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HIGH COURT OF AUSTRALIA BELL LAWYERS PTY LTD APPELLANT AND JANET PENTELOW & ANOR RESPONDENTS Bell Lawyers Pty Ltd v Pentelow [2019] HCA 29 4 September 2019 ORDER Appeal allowed. Set aside orders 1 to 4 of the Court of Appeal of the Supreme Court of New South Wales made on 13 July 2018 and, in their place, order that: the summons for judicial review be dismissed; and the first respondent (Ms Pentelow) pay the costs of the appellant (Bell Lawyers Pty Ltd) in the District Court of New South Wales and the Court of Appeal of the Supreme Court of New South Wales. The first respondent pay the appellant's costs of the appeal to this Court. On appeal from the Supreme Court of New South Wales Representation B W Walker SC with M Castle for the appellant (instructed by Bell Lawyers) G O'L Reynolds SC with D P Hume for the first respondent (instructed by Castagnet Lawyers) Submitting appearance for the second respondent Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Bell Lawyers Pty Ltd v Pentelow Practice and procedure β Costs β Legal practitioners β Barristers β Where self-represented litigant may not obtain any recompense for value of his or her time spent in litigation β Where exception commonly referred to as "Chorley exception" exists for a self-represented litigant who is a solicitor β Where first respondent is a barrister β Where first respondent undertook legal work in litigation in which she was represented β Where first respondent incurred costs on her own behalf and for legal services provided by herself β Whether Chorley exception operates to benefit barristers β Whether Chorley exception recognised as part of common law of Australia. Words and phrases β "anomalous", "Chorley exception", "common law of Australia", "costs", "costs payable", "creature of statute", "employed solicitors", "equality before the law", "exception to the general rule", "exercise of legal practice", "indemnity", "judicial professional skill", "incorporated abolition", overruling", "prospective services", legal "remuneration", "rule of practice", "rules committees", "self-represented litigants", "statutory power". "professional Civil Procedure Act 2005 (NSW), ss 3(1), 98(1). KIEFEL CJ, BELL, KEANE AND GORDON JJ. As a general rule, a self-represented litigant may not obtain any recompense for the value of his or her time spent in litigation1. Under an exception to the general rule, a self-represented litigant who happens to be a solicitor may recover his or her professional costs of acting in the litigation. This exception is commonly referred to as "the Chorley exception", having been authoritatively established as a "rule of practice" by the Court of Appeal of England and Wales in London Scottish Benefit Society v Chorley2. One issue raised by this appeal is whether the Chorley exception operates Another, more to the benefit of barristers who represent themselves. fundamental, issue is whether the Chorley exception should be recognised as part of the common law of Australia. The Chorley exception has rightly been described by this Court as "anomalous"3. Because it is anomalous, it should not be extended by judicial decision4 to the benefit of barristers. This view has previously been taken by some courts in Australia5. Dealing with the matter more broadly, however, the Chorley exception is not only anomalous, it is an affront to the fundamental value of equality of all persons before the law. It cannot be justified by the considerations of policy said to support it. Accordingly, it should not be recognised as part of the common law of Australia. 1 Cachia v Hanes (1994) 179 CLR 403 at 410-411; [1994] HCA 14. See also Guss v Veenhuizen [No 2] (1976) 136 CLR 47 at 51; [1976] HCA 57. (1884) 13 QBD 872 at 877. The rule of practice was acknowledged prior to the decision in Chorley by Faucett J in the Supreme Court of New South Wales in Pennington v Russell [No 2] (1883) 4 LR (NSW) Eq 41. 3 Cachia v Hanes (1994) 179 CLR 403 at 411. 4 Midgley v Midgley [1893] 3 Ch 282 at 299, 303, 306-307; Best v Samuel Fox & Co Ltd [1952] AC 716 at 728, 733; Cassell & Co Ltd v Broome [1972] AC 1027 at 1086; CSR Ltd v Eddy (2005) 226 CLR 1 at 18 [35]; [2005] HCA 64. 5 See Hartford Holdings Pty Ltd v CP (Adelaide) Pty Ltd [2004] SASC 161 at [125]; Winn v Garland Hawthorn Brahe (Ruling No 1) [2007] VSC 360 at [10]-[11]; Murphy v Legal Services Commissioner [No 2] [2013] QSC 253 at [16]; Bechara v Bates [2018] FCA 460 at [6]. But see to the contrary Ada Evans Chambers Pty Ltd v Santisi [2014] NSWSC 538 at [29]. Bell Gordon The proceedings The appellant, an incorporated legal practice, retained the first respondent ("the respondent"), a barrister, to appear in proceedings in the Supreme Court of New South Wales in a matter under the Family Provision Act 1982 (NSW). Following the conclusion of those proceedings, a dispute arose as to the payment of the respondent's fees6. The appellant paid only a portion of the bill rendered by the respondent for her services, and the respondent sued the appellant for the balance of her fees in the Local Court of New South Wales. She was unsuccessful in that proceeding, but appealed successfully to the Supreme Court of New South Wales. The appellant was ordered to pay the respondent the balance of her unpaid fees. Orders for costs were also made in the respondent's favour in relation to both the Local Court and the Supreme Court proceedings7. The respondent was represented by a solicitor in the Local Court proceeding, and by solicitors and senior counsel in the Supreme Court proceeding. In each proceeding, the respondent had undertaken preparatory legal work which included, among other things, compiling written submissions, drawing her affidavit evidence, legal research, reviewing submissions in reply, and advising senior counsel on various issues. The respondent also attended court in person on a number of directions hearings and for the purpose of taking The respondent forwarded a memorandum of costs to the appellant pursuant to those costs orders. The total sum claimed was $144,425.45, which included $22,605 for "Costs incurred on her own behalf" in the Local Court proceeding and $22,275 for the "Provision of Legal Services Provided by herself" in the Supreme Court proceeding9. The appellant refused to pay the costs claimed for the work undertaken by the respondent herself. Pursuant to s 353 of the now-repealed Legal Profession Act 2004 (NSW), the appellant made an application for assessment of the costs 6 Pentelow v Bell Lawyers Pty Ltd [2018] NSWCA 150 at [4]. 7 Pentelow v Bell Lawyers Pty Ltd [2018] NSWCA 150 at [4]. 8 Pentelow v Bell Lawyers Pty Ltd [2018] NSWCA 150 at [5]. 9 Pentelow v Bell Lawyers Pty Ltd [2018] NSWCA 150 at [6]. Bell Gordon claimed by the respondent. The costs assessor rejected the respondent's claim for the costs of the work she had performed herself on the ground, among others, that in New South Wales the Chorley exception does not apply to barristers10. The costs assessor's decision was affirmed on appeal by the Review Panel11. The respondent appealed against the decision of the Review Panel to the District Court of New South Wales, but her appeal was dismissed by the primary The Court of Appeal The respondent sought judicial review of the decision of the District Court in the Court of Appeal of the Supreme Court of New South Wales13. The primary issue was whether the respondent could rely upon the Chorley exception14. A subsidiary issue arose as to whether the respondent was a "self-represented" litigant, but this issue was held not to be amenable to judicial review as it concerned a finding of fact15. That subsidiary issue need not be further considered. The Court of Appeal proceeded on the basis that the issue was whether the Chorley exception applied to the respondent as a barrister, in circumstances where she had undertaken legal work in litigation in which she The Court of Appeal held by majority (Beazley A-CJ and Macfarlan JA, Meagher JA dissenting) that the respondent was entitled to rely upon the Chorley 10 Pentelow v Bell Lawyers Pty Ltd [2018] NSWCA 150 at [7]. 11 Pentelow v Bell Lawyers Pty Ltd [2018] NSWCA 150 at [8]. 12 Pentelow v Bell Lawyers Pty Ltd [2018] NSWCA 150 at [9]. See Pentelow v Bell Lawyers Pty Ltd (2016) 23 DCLR (NSW) 134. 13 Pentelow v Bell Lawyers Pty Ltd [2018] NSWCA 150 at [10]. 14 Pentelow v Bell Lawyers Pty Ltd [2018] NSWCA 150 at [11]. 15 Pentelow v Bell Lawyers Pty Ltd [2018] NSWCA 150 at [15]. 16 Pentelow v Bell Lawyers Pty Ltd [2018] NSWCA 150 at [112], [116]. Bell Gordon exception for the same reason that a solicitor is so entitled, namely, that her costs were quantifiable by the same processes as solicitors' costs17. Meagher JA, in dissent, expressed reservations as to the continued application of the Chorley exception to solicitors, but accepted that he was bound by authority to hold that the exception still exists. Nevertheless, his Honour rejected the "extension" of the Chorley exception to barristers18. The power to order costs The power to make an order for costs is conferred on the courts of New South Wales by s 98(1) of the Civil Procedure Act 2005 (NSW), which provides: "Subject to rules of court and to this or any other Act: costs are in the discretion of the court, and the court has full power to determine by whom, to whom and to what extent costs are to be paid, and the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis." Section 3(1) of the Civil Procedure Act defines "costs" as follows: "costs, in relation to proceedings, means costs payable in or in relation to the proceedings, and includes fees, disbursements, expenses and remuneration." On one view, the reference to "costs payable" in this definition is an indication that an order for costs may be made only in respect of costs payable by the party in whose favour the order is made to another person for services rendered. On this view the Chorley exception is inconsistent with the statutory definition of costs and, costs being a creature of statute, the Chorley exception has been displaced by the Civil Procedure Act. 17 Pentelow v Bell Lawyers Pty Ltd [2018] NSWCA 150 at [90]-[96], [121]. 18 Pentelow v Bell Lawyers Pty Ltd [2018] NSWCA 150 at [138]. Bell Gordon This view, which commended itself to Meagher JA below19, was advanced by the appellant in argument in this Court. The respondent argued that the legislature did not intend to abrogate the Chorley exception by ss 3 and 98(1) of the Civil Procedure Act in the absence of clear words to that effect. It is preferable to address the proper effect of ss 3 and 98(1) of the Civil Procedure Act in the context of a discussion of the broader question whether the Chorley exception should be recognised as part of the common law of Australia. The examination of that question may conveniently proceed by reference to the principal authorities referred to by the parties in the course of argument in this Court. Chorley One may begin with a consideration of the reasons said to support the Chorley exception. In that case, Brett MR stated the general rule, and the exception to it, in the following terms20: "When an ordinary party to a suit appears for himself, he is not indemnified for loss of time; but when he appears by solicitor, he is entitled to recover for the time expended by the solicitor in the conduct of the suit. When an ordinary litigant appears in person, he is paid only for costs out of pocket. He cannot himself take every step, and very often employs a solicitor to assist him: the remuneration to the solicitor is money paid out of pocket. He has to pay the fees of the court, that is money paid out of pocket; but for loss of time the law will not indemnify him. When, however, we come to the case of a solicitor, the question must be viewed from a different aspect. There are things which a solicitor can do for himself, but also he can employ another solicitor to do them for him; and it would be unadvisable to lay down that he shall not be entitled to ordinary costs if he appears in person, because in that case he would always employ another solicitor." It may be said immediately that the view that it is somehow a benefit to the other party that a solicitor acts for himself or herself, because the expense to be borne by the losing party can be expected to be less than if an independent solicitor were engaged, is not self-evidently true. A self-representing solicitor, lacking impartial and independent advice that the court expects its officers to provide to the litigants they represent, may also lack objectivity due to 19 Pentelow v Bell Lawyers Pty Ltd [2018] NSWCA 150 at [126]-[141]. 20 London Scottish Benefit Society v Chorley (1884) 13 QBD 872 at 875. Bell Gordon self-interest. That may, in turn, result in higher legal costs to be passed on to the other party in the event that the self-representing solicitor obtains an order for his or her costs. Importantly, the view that solicitors should be encouraged to act for themselves is contrary to the modern orthodoxy that it is undesirable, as a matter of professional ethics, for a solicitor to act for himself or herself in litigation. In McIlraith v Ilkin (Costs), Brereton J said21: "Where a solicitor represents a litigant, the court is entitled to expect the litigant to be impartially and independently advised by an officer of the court. Indeed, where the court concludes that a solicitor is not in a position to give impartial and independent advice to a party, because of the solicitor's own interest in the outcome, the court has restrained the solicitor from continuing to act ... Where a solicitor acts for himself or herself there cannot be independent and impartial advice, and this is in principle a strong reason for holding that a solicitor litigant should not be entitled to costs of acting for him or herself." The view expressed by Brereton J is reflected in rr 17.1 and 27.1 of the Australian Solicitors' Conduct Rules, which have been adopted in New South Wales22, Victoria23, Queensland24, South Australia25 and the Australian Capital Territory26. Rules broadly equivalent to rr 17.1 and 27.1 of the Australian Solicitors' Conduct Rules also appear in the conduct rules of Western Australia27 and the Northern Territory28. 21 [2007] NSWSC 1052 at [25]. 22 Legal Profession Uniform Law Australian Solicitors' Conduct Rules 2015 (NSW). 23 Legal Profession Uniform Law Australian Solicitors' Conduct Rules 2015 (Vic). 24 Legal Profession (Australian Solicitors Conduct Rules) Notice 2012 (Qld). 25 Australian Solicitors' Conduct Rules 2011 (SA). 26 Legal Profession (Solicitors) Conduct Rules 2015 (ACT). 27 Legal Profession Conduct Rules 2010 (WA), rr 6, 12, 42. 28 Rules of Professional Conduct and Practice 2005 (NT), rr 13, 17.3. Bell Gordon In Chorley, Bowen LJ explained the rationale for the exception as follows29: "Professional skill and labour are recognised and can be measured by the law; private expenditure of labour and trouble by a layman cannot be measured. It depends on the zeal, the assiduity, or the nervousness of the individual. Professional skill, when it is bestowed, is accordingly allowed for in taxing a bill of costs; and it would be absurd to permit a solicitor to charge for the same work when it is done by another solicitor, and not to permit him to charge for it when it is done by his own clerk." This reasoning is not persuasive. The notion that the "private expenditure of labour and trouble by a layman cannot be measured" is not the basis for the general rule. The general rule that a self-represented litigant may not obtain any recompense for his or her time spent on litigation is not based on a concern about the difficulty of valuing the appropriate amount of recompense, but, as was explained by the majority in Cachia v Hanes, because "costs are awarded by way of ... partial indemnity ... for professional legal costs actually incurred in the conduct of litigation"30. Accordingly, to say that the value of legal services rendered by a solicitor to himself or herself can be measured is not to justify an exception to the general rule. In addition, in Cachia, Mason CJ, Brennan, Deane, Dawson and McHugh JJ, commenting on the rationale for the exception suggested by Bowen LJ, said31: "Those assertions that it would be 'unadvisable' or 'absurd' to refuse to allow a solicitor who acts for himself 'to charge' for the work done by himself or his clerk ignore the questionable nature of a situation in which a successful litigant not only receives the amount of the verdict but actually profits from the conduct of the litigation." 29 London Scottish Benefit Society v Chorley (1884) 13 QBD 872 at 877. 30 (1994) 179 CLR 403 at 410. 31 (1994) 179 CLR 403 at 412. Bell Gordon Further, there is no reason why, in principle, the reasonable value of the time of any litigant cannot be measured32. The courts regularly value the provision of labour or services in the context of quantum meruit claims. To act upon a principle that evidence enabling the quantification of the value of the time of non-solicitor litigants in person should not be received or acted upon by the courts is to exalt the position of solicitors in the administration of justice to an extent that is an affront to equality before the law. To say that practical difficulties may arise in taking evidence to value the time of non-lawyers spent in the course of litigation is merely to identify a reason why, as a matter of policy, the general rule should not be abolished. No doubt such practical difficulties as might be expected to arise in that event could be addressed in legislation for the abolition of the general rule. The need to address practical questions of this kind is one reason why the abolition of the general rule is properly a matter for the legislature rather than the courts. The point to be made here, however, is that to suggest that practical difficulties may attend the abolition of the general rule is not to identify a reason that supports the Chorley exception. that "[t]his is not a question as In Chorley, Fry LJ expressed his agreement with Bowen LJ, and went on to a solicitor's privilege"33. to say Notwithstanding this remark by Fry LJ, there is an air of unreality in the view that the Chorley exception does not confer a privilege on solicitors in relation to the conduct of litigation. In Australia, as early as Pennington v Russell [No 2]34, the exception was recognised as the solicitor's privilege that, to modern eyes, it patently is. A privilege of that kind is inconsistent with the equality of all persons before the law35. 32 Sandtara Pty Ltd v Australian European Finance Corporation Ltd (1990) 20 NSWLR 82 at 93. See also Reed v Gray [1952] Ch 337 at 357-358; Australian Blue Metal Ltd v Hughes [1970] 2 NSWR 119 at 123-124. 33 London Scottish Benefit Society v Chorley (1884) 13 QBD 872 at 877. 34 (1883) 4 LR (NSW) Eq 41 at 42-43, 46. 35 Compare Attwells v Jackson Lalic Lawyers Pty Ltd (2016) 259 CLR 1 at 26 [52]; [2016] HCA 16. See also the discussion of the common law norm of equal justice in Green v The Queen (2011) 244 CLR 462 at 472-473 [28]; [2011] HCA 49. Bell Gordon Guss v Veenhuizen [No 2] In Guss v Veenhuizen [No 2]36, a majority of this Court proceeded on the basis that the Chorley exception was otherwise applicable on the facts of the case, and decided that the exception was not excluded by the terms of the legislation that applied in that case. Whether the Chorley exception should be recognised as part of the common law of Australia was not argued in Guss37. Instead, the case turned on whether the solicitor litigant was precluded from recovering costs in respect of his own time and services by reason of the circumstance that he was, without fault on his part, not on the Court's Register of The question whether the Chorley exception should be recognised as part of the common law of Australia is now squarely before the Court, and has been the subject of full argument. Insofar as the Chorley exception might be said to be part of the common law of Australia on the authority of Guss, the appellant submitted that the Court should reconsider that aspect of the decision in Guss. It submitted that the foundation upon which the exception rests is infirm in point of principle. It might be said that, since the question whether the Chorley exception is part of the common law of Australia was not in dispute in Guss, the decision in that case may be said to "lay[] down no legal rule concerning that issue"39. In CSR Ltd v Eddy40, Gleeson CJ, Gummow and Heydon JJ observed that "where a proposition of law is incorporated into the reasoning of a particular court, that proposition, even if it forms part of the ratio decidendi, is not binding on later courts if the particular court merely assumed its correctness without argument"41. 36 (1976) 136 CLR 47. 37 See Cachia v Hanes (1994) 179 CLR 403 at 412. 38 See Cachia v Hanes (1994) 179 CLR 403 at 412. 39 Coleman v Power (2004) 220 CLR 1 at 44 [79]; [2004] HCA 39. 40 (2005) 226 CLR 1 at 11 [13]. 41 See also R v Warner (1661) 1 Keb 66 at 67 [83 ER 814 at 815]; Felton v Mulligan (1971) 124 CLR 367 at 413; [1971] HCA 39; National Enterprises Ltd v Racal Communications Ltd [1975] Ch 397 at 405-406; Baker v The Queen [1975] AC 774 at 787-789; Barrs v Bethell [1982] Ch 294 at 308; In re Hetherington [1990] Ch 1 (Footnote continues on next page) Bell Gordon However, given that the present appeal was conducted on the basis that abandoning the Chorley exception would require the Court to depart from the authority of Guss in that respect, it is necessary to address the considerations relevant to that question. In John v Federal Commissioner of Taxation42, Mason CJ, Wilson, Dawson, Toohey and Gaudron JJ identified considerations relevant to the exercise of this Court's undoubted power to review and depart from its earlier decisions. These included the following circumstances: that the earlier decisions did not "rest upon a principle carefully worked out in a significant succession of cases"; that the earlier decisions had "achieved no useful result but on the contrary had led to considerable inconvenience"; and that the earlier decisions "had not been independently acted on in a manner which militated against reconsideration"43. It may fairly be said that the decision in Guss proceeded upon an uncritical acceptance of the authority of Chorley, and so did not establish a principle carefully worked out in a succession of cases in this Court. Importantly, the decision in Chorley β on the authority of which Guss stands β departed from principle in several respects, as this Court explained in Cachia. Cachia v Hanes As to whether the recognition of the Chorley exception in Guss is a "useful result", the criticisms of the majority in Cachia strongly suggest a negative answer. Although the Court in Cachia was not invited to abolish the Chorley exception, the majority's criticisms of the Chorley exception substantially undermine the authority of the decision in Chorley, and consequently the authority of Guss. In Cachia, the majority, in discussing the decision in Guss, described the Chorley exception as "somewhat anomalous" and stated that the justification for the exception was "somewhat dubious"44. As noted above, at 10; Spence v Queensland (2019) 93 ALJR 643 at 711 [294]; 367 ALR 587 at 667; [2019] HCA 15. 42 (1989) 166 CLR 417; [1989] HCA 5. 43 (1989) 166 CLR 417 at 438-439. 44 (1994) 179 CLR 403 at 411. Bell Gordon their Honours were of the view that to permit a self-represented solicitor to recover costs β which are the solicitor's reward for the exercise of professional skill β gives rise to the possibility of allowing the solicitor to profit from his or her participation in the conduct of litigation. That possibility is unacceptable in point of principle. In that regard, costs are a creature of statute45. It has never been thought that any of the ubiquitous statutory provisions empowering courts to order costs are available to compensate a litigant for his or her time and trouble in participating in litigation. That is because costs are awarded by way of indemnity; they are not awarded as compensation for lost earnings, much less as a reward for a litigant's success. The courts have long regarded the statutory power to make an order for costs as confined by the concern to provide the successful party with a measure of indemnity against the expense of professional legal costs actually incurred in the litigation. Thus, the majority in Cachia said46: "It has not been doubted since 1278, when the Statute of Gloucester47 introduced the notion of costs to the common law, that costs are awarded by way of indemnity (or, more accurately, partial indemnity) for professional legal costs actually incurred in the conduct of litigation. They were never intended to be comprehensive compensation for any loss suffered by a litigant." In Cachia48, it was argued that Guss was wrongly decided and ought not be followed in its affirmation of the general rule that orders for costs are not available to self-represented litigants. The majority did not accept that argument, but in the course of their criticism of the Chorley exception they said49: 45 Latoudis v Casey (1990) 170 CLR 534 at 557; [1990] HCA 59; Cachia v Hanes (1994) 179 CLR 403 at 410; Oshlack v Richmond River Council (1998) 193 CLR 72 at 85-86 [33]-[34], 120 [134]; [1998] HCA 11; Northern Territory v Sangare [2019] HCA 25 at [12]. 46 (1994) 179 CLR 403 at 410-411. 47 6 Edw I c 1. 48 (1994) 179 CLR 403 at 405. 49 (1994) 179 CLR 403 at 412. Bell Gordon "It is ... important to note that no general submission was advanced in [Guss] to the effect that a successful solicitor litigant who acts for himself is never entitled to recover 'costs' in respect of his own time and services." The majority went on to say50: "If the explanations for allowing the costs of a solicitor acting for himself are unconvincing, the logical answer may be to abandon the exception in favour of the general principle rather than the other way round. However, it is not necessary to go so far for the purposes of the present case. It suffices to say that the existence of a limited and questionable exception provides no proper basis for overturning a general principle which has, as we have said, never been doubted and which has been affirmed in recent times." In Cachia, Toohey and Gaudron JJ dissented in this regard. Their Honours concluded that the "general principle" should not be applied because of the expansive view they took of the Supreme Court Rules 1970 (NSW), which authorised the making of orders for costs51. In the view of the majority in Cachia52, if the anomaly were to be removed by abolishing the general rule, it could appropriately be done only by legislation and not judicial decision. It was noted that this course had been taken in England53. It may also be noted that in New Zealand, suggestions that the courts should abrogate the general rule have been rejected on the basis that such a course is a matter for the legislature54. In Canada, on the other hand, the courts have not shrunk from abrogating the general rule by judicial decision55. The majority in Cachia, in rejecting the argument that the Chorley exception disproves the general rule, noted that "[i]f costs were to be awarded 50 (1994) 179 CLR 403 at 412-413 (footnote omitted). 51 (1994) 179 CLR 403 at 424-425. 52 (1994) 179 CLR 403 at 416-417. 53 Litigants in Person (Costs and Expenses) Act 1975 (UK). 54 McGuire v Secretary for Justice [2018] NZSC 116 at [56]. 55 Skidmore v Blackmore (1995) 122 DLR (4th) 330. Bell Gordon otherwise than by way of indemnity, there would be no logical reason for denying compensation to a litigant who was represented" and "[t]hat would in some cases dramatically increase the costs awarded to a successful litigant", especially in corporate litigation of complexity where a litigant "may expend considerable time and effort in preparing its case"56. Further, so far as the general rule is concerned, and "[p]utting to one side the question posed by the relatively rare exception of a solicitor acting in person, there is no inequality involved: all litigants are treated in the same manner". On the other hand, "if only litigants in person were recompensed for lost time and trouble, there would be real inequality between litigants in person and litigants who were represented, many of whom would have suffered considerable loss of time and trouble in addition to incurring professional costs"57. These considerations weighed with their Honours in declining the invitation to abolish the general rule on the basis that such a course was a matter for the legislature. Importantly for present purposes, their Honours recognised that the Chorley exception, though "relatively rare", involved inequality before the law. For these reasons, in the absence of a compelling reason to the contrary, this Court should now accept the "logical answer" and hold that the Chorley exception is not part of the common law of Australia, as foreshadowed by the majority in Cachia. Independently acted upon? The respondent advanced several arguments with a view to identifying a compelling reason to maintain the authority of Guss and Chorley. The respondent emphasised that there had been no rejection of the Chorley exception by any Australian legislature. It was said that if Guss were to be overruled in relation to its acceptance of the Chorley exception, the intention of the various legislatures would be subverted. In particular, the respondent argued that the Civil Procedure Act itself embraced the Chorley exception. She submitted that the New South Wales legislature demonstrated an intention to maintain the Chorley exception by explicitly including within the definition of "costs" the different types of costs, such as "fees, disbursements, expenses and remuneration". 56 (1994) 179 CLR 403 at 414. 57 (1994) 179 CLR 403 at 414-415. Bell Gordon In particular, it was argued on behalf of the respondent that the word "remuneration" in the definition of "costs" is apt to encompass costs within the Chorley exception. The respondent submitted that the recovery by a lawyer for work on his or her own case is "remuneration" for the exercise of professional skill by a qualified legal professional. On the other hand, it was said that there is no basis for valuing the work of a non-lawyer because he or she cannot recover "remuneration for the exercise of a professional skill which he has not got"58. This argument should be rejected. Both the anomalous nature of the Chorley exception, and the difference between the position of a lawyer acting for himself or herself and that of a lawyer representing another person, are reflected in the definition of "costs" in s 3(1) of the Civil Procedure Act. That definition is a "means and includes" definition. In BHP Billiton Iron Ore Pty Ltd v National Competition Council59, this Court explained that: "As a general proposition, the adoption of the definitional structure 'means and includes' indicates an exhaustive explanation of the content of the term which is the subject of the definition, and conveys the idea both of enlargement and exclusion. In doing so, the definition also may make it plain that otherwise doubtful cases do fall within its scope." In s 3(1) of the Civil Procedure Act, the "means" part of the definition, in referring to "costs payable", is a restatement of the general rule that costs are awarded only for professional costs actually incurred. The "includes" part of the definition, in referring to "remuneration", can be seen readily enough to encompass remuneration for professional services rendered under a contract of service as well as remuneration for professional services rendered under a contract for services. In so doing, it "makes plain" that the cost of professional legal services rendered by an employed lawyer is included in the definition of "costs". The definition, being otherwise exhaustive, leaves no room for the Chorley exception as a matter of legislative intention. "Remuneration" is simply not a word which is apt to include the notion of payment to a person by himself or herself for work done by himself or herself. By contrast, in McGuire v Secretary for Justice60, the Supreme Court of New Zealand concluded by majority that the applicable rules of court "proceed 58 Buckland v Watts [1970] 1 QB 27 at 38. 59 (2008) 236 CLR 145 at 159 [32]; [2008] HCA 45 (footnotes omitted). 60 [2018] NZSC 116 at [86]. Bell Gordon on the basis of the continued operation of both the [general] rule and the [Chorley] exception". Unacceptable inconvenience The respondent argued that serious inconvenience would be occasioned in relation to the use of in-house solicitors by governments and corporations, including incorporated legal practices, if the Chorley exception were not recognised by this Court as part of the common law. It was argued that governments and other employers, and incorporated legal practices operating through a sole director, would be prevented from recovering costs for professional legal services rendered by employed solicitors. This submission fails to appreciate that in relation to the use of in-house solicitors, such arrangements have been treated as being outside the general rule because it is accepted that the recovery of the professional costs of in-house solicitors enures by way of indemnity to the employer, as is confirmed by the inclusion of "remuneration" in the definition of "costs" in the Civil Procedure Act. Where a government or corporate litigant has been represented by an employed solicitor, the courts have proceeded on the footing that the actual cost to the government or corporation of the legal services provided by its employed solicitor would not exceed, in any substantial amount, the sum recoverable by it for professional legal costs. In Commonwealth Bank of Australia v Hattersley61, Davies A-J explained that: "[W]here an employed solicitor is involved, the traditional approach has been to award costs on a basis comparable to the costs which would have been incurred and allowed on taxation had an independent solicitor been engaged. The assumption has been made that, in an ordinary case, the indemnity principle will not be infringed by taking this approach." In Ly v Jenkins62, Kiefel J (as her Honour then was) adopted that explanation and the view expressed by Russell LJ, with whom Stamp and Lawton LJJ agreed, in In re Eastwood, decd63: 61 (2001) 51 NSWLR 333 at 337 [11]. 62 (2001) 114 FCR 237 at 280 [160]. 63 [1975] Ch 112 at 132. Bell Gordon "It is a sensible and reasonable presumption that the figure arrived at on this basis will not infringe the principle that the taxed costs should not be more than an indemnity to the party against the expense to which he has been put in the litigation." Similarly, in the decision of the Court of Appeal of New Zealand in Henderson Borough Council v Auckland Regional Authority64, Cooke J, with whom Woodhouse P and Richardson J agreed, said: "In New Zealand I do not think it can be said to be improper for an employed barrister to represent his employer ... A fortiori an employed solicitor duly enrolled and with a current practising certificate may properly act as solicitor for his employer. Against that background it appears to me that the fact that an employed practitioner has acted for the successful party is not a sufficient reason for denying that party an award of party and party costs: after all, the time of a salaried employee has been occupied." A decision by this Court that the Chorley exception is not part of the common law of Australia would not disturb the well-established understanding in relation to in-house lawyers employed by governments and others, that where such a solicitor appears in proceedings to represent his or her employer the employer is entitled to recover costs in circumstances where an ordinary party would be so entitled by way of indemnity. Whether the same view should be taken in relation to a solicitor employed by an incorporated legal practice of which he or she is the sole director and shareholder stands in a different position. It might be queried whether such a solicitor has sufficient professional detachment to be characterised as acting in a professional legal capacity when doing work for the incorporated legal practice. And it might be queried whether costs claimed by an incorporated legal practice for work of its sole director and shareholder are within the expansive view of indemnity that has been adopted in the authorities. In this regard, in McIlraith65, Brereton J was disposed to attribute "no significance" to the circumstance that the party seeking an order for costs was an incorporated legal practice whose director was the solicitor who actually performed the work for which costs were sought. It is neither appropriate nor necessary to come to a conclusion as to whether Brereton J was correct in this regard. 64 [1984] 1 NZLR 16 at 23. 65 [2007] NSWSC 1052 at [11]. Bell Gordon The resolution of this question may require close consideration of the legislation which provides for incorporation of solicitors' practices and the intersection of that legislation with the provisions of the Civil Procedure Act in light of the general rule; and so the resolution of this question may be left for another day, when all the legislation that bears on the question has been the subject of argument. It is sufficient for present purposes to say that whether or not an incorporated legal practice that is a vehicle for a sole practitioner should be able to obtain an order for costs for work performed by its sole director and shareholder is ultimately a matter for the legislature. Whether the Chorley exception is part of the common law of Australia is a matter for this Court. A matter for the legislature The respondent also argued that this Court should refrain from holding that the Chorley exception is not part of the common law because that is a task more appropriately dealt with by the relevant legislature or rules committee of a superior court66. It was said that the legislature would be better placed than a court to decide whether the court's rules of practice should be altered or abrogated. This argument may be disposed of briefly. The majority in Cachia saw great difficulty in resolving the inconsistency between the general rule and the Chorley exception by judicial abolition of the general rule. No such difficulty was said to confront the taking of the logical step of holding that the exception is not part of the common law. The Chorley exception is the result of judicial decision, and it is for this Court to determine whether it is to be recognised in Australia. Prospective overruling The respondent submitted that if this Court were to alter or abrogate the Chorley exception, such a change should operate only prospectively so that the decision of the Court of Appeal in this case is not disturbed. Once again, this argument should be rejected for reasons that may be explained briefly. To hold that the Chorley exception is not part of the common law is to hold that there was no basis in law for the decision of the Court of Appeal. In Ha v New South Wales, Brennan CJ, McHugh, Gummow and Kirby JJ said67: 66 McGuire v Secretary for Justice [2018] NZSC 116 at [88]. 67 (1997) 189 CLR 465 at 503-504; [1997] HCA 34 (footnotes omitted). Bell Gordon "A hallmark of the judicial process has long been the making of binding declarations of rights and obligations arising from the operation of the law upon past events or conduct. The adjudication of existing rights and obligations as distinct from the creation of rights and obligations distinguishes the judicial power from non-judicial power. Prospective overruling is thus inconsistent with judicial power on the simple ground that the new regime that would be ushered in when the overruling took effect would alter existing rights and obligations. If an earlier case is erroneous and it is necessary to overrule it, it would be a perversion of judicial power to maintain in force that which is acknowledged not to be the law." Dawson, Toohey and Gaudron JJ expressly agreed with these observations68. Conclusion and orders There is no compelling reason for this Court to refrain from taking the "logical step" identified in Cachia. The Chorley exception is not part of the common law of Australia. The appeal should be allowed. Orders 1 to 4 of the Court of Appeal of the Supreme Court of New South Wales should be set aside. In their place it should be ordered that the summons for judicial review be dismissed and the first respondent pay the appellant's costs in the District Court and the Court of Appeal. The first respondent should pay the appellant's costs of the appeal to this Court. 68 Ha v New South Wales (1997) 189 CLR 465 at 515. GAGELER J. Costs in courts administering the common law are and always have been "entirely and absolutely creatures of statute"69. Yet statutes authorising courts to award costs have formed part of the armoury of common law courts for almost as long as the common law system has existed70. Throughout much of the history of the common law system, the principles according to which statutory authority to award costs has been exercised have been left to exposition and development by the courts themselves. The courts have articulated those principles at times legislatively through the promulgation of rules of court and at times judicially through reasoned decisions which have the status of precedents. The "general principle" that "costs are awarded by way of indemnity (or, more accurately, partial indemnity) for professional legal costs actually incurred in the conduct of litigation" is a judicial creation of considerable antiquity71. A comparatively recent judicial creation until now has been the "Chorley exception", according to which a legal practitioner has been able to be indemnified at a professional rate for time spent acting on his or her own behalf. The Chorley exception was authoritatively introduced into the common law system by a decision of the English Court of Appeal72 at a time when it had been laid down by the Privy Council to have been "of the utmost importance that in all parts of the empire where English law prevails, the interpretation of that law by the Courts should be as nearly as possible the same" with the consequence that colonial courts construing and applying colonial statutes were bound to follow decisions of the English Court of Appeal on the construction and application of English statutes in materially identical terms73. The last vestiges of 69 Knight v FP Special Assets Ltd (1992) 174 CLR 178 at 182; [1992] HCA 28, quoting Garnett v Bradley (1878) 3 App Cas 944 at 962. 70 Statute of Gloucester 1278 (6 Edw I c 1); An Act that the Defendant shall recover Costs against the Plaintiff, if the Plaintiff be nonsuited, or if the verdict pass against him 1531 (23 Hen VIII c 15); An Act to give Costs to the Defendant upon a Nonsuit of the Plaintiff, or upon a Verdict against him 1606 (4 Jac I c 3). 71 Cachia v Hanes (1994) 179 CLR 403 at 410-412; [1994] HCA 14, citing Coke, Second part of the Institutes of the Laws of England (1797) at 288, Howes v Barber (1852) 18 QB 588 at 592 [118 ER 222 at 224] and Dowdell v Australian Royal Mail Steam Navigation Co (1854) 3 El & Bl 902 at 906 [118 ER 1379 at 1381]. See also Harold v Smith (1860) 5 H & N 381 at 385 [157 ER 1229 at 1231]. 72 London Scottish Benefit Society v Chorley (1884) 13 QBD 872, affirming London Scottish Benefit Society v Chorley (1884) 12 QBD 452. 73 Trimble v Hill (1879) 5 App Cas 342 at 344-345. the policy laid down in that era were removed only with the termination of appeals to the Privy Council from all decisions of Australian courts in 198674, immediately following which this Court declared that earlier statements to the effect that decisions of the English Court of Appeal (including those on the construction and application of statutes) ought generally to be followed75 "should no longer be seen as binding upon Australian courts"76. The timing of that cessation of institutionalised deference on the part of Australian courts to decisions of the English Court of Appeal does much to explain the contrast between the uncritical acceptance of the Chorley exception in Guss v Veenhuizen [No 2]77 and the subsequent acknowledgement in Cachia v Hanes78 of the Chorley exception as "somewhat anomalous" accompanied by the suggestion that, if the explanations for the exception were "unconvincing", "the logical answer may be to abandon the exception in favour of the general principle". Using the term "common law" in the broad sense of judge-made law79, it is therefore not inappropriate to refer to the general principle and the Chorley exception as part of the common law, originally of England and then, by application of the rules of reception (in the case of the principle) and by application of the rules of precedent (in the case of the exception), also of Australia. Treating both the principle and the exception as part of the common law of Australia, it is entirely appropriate for this Court in its capacity as ultimate custodian of the contemporary common law of Australia80 now to take the step foreshadowed in Cachia of determining that the exception to the general principle should be abandoned. For the reasons given by Kiefel CJ, Bell, Keane and Gordon JJ, that is the step which should now be taken. 74 Section 11 of the Australia Act 1986 (Cth). 75 eg, Public Transport Commission (NSW) v J Murray-More (NSW) Pty Ltd (1975) 132 CLR 336 at 341, 349; [1975] HCA 28. 76 Cook v Cook (1986) 162 CLR 376 at 390; [1986] HCA 73. 77 (1976) 136 CLR 47; [1976] HCA 57. 78 (1994) 179 CLR 403 at 411-412. 79 See PGA v The Queen (2012) 245 CLR 355 at 370 [22]; [2012] HCA 21, quoting Simpson, "common law", in Cane and Conaghan (eds), The New Oxford Companion to Law (2008) 164 at 165. 80 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 563; [1997] HCA 25. In Guss, the continued existence of the Chorley exception was not in issue. All that was determined was that the appellant, who acted for himself, was not disentitled from claiming professional costs on a taxation under the High Court Rules 1952 (Cth) because his name failed to appear on the Register of Practitioners kept under s 55C of the Judiciary Act 1903 (Cth) through no fault of his own. In determining that the Chorley exception is to be abandoned, no question of overruling Guss in truth arises. It is enough to say that abandonment of the Chorley exception means that "the view of the majority in that case would not prevail today"81. The step now taken to abandon the Chorley exception is a step which the Supreme Court of New Zealand chose not to take only last year82. That was in part because the rules of court which the Supreme Court was concerned with construing and applying were seen to have been framed on the basis of the continued operation of the exception83 and in part because the Supreme Court was not satisfied that it had been presented with complete arguments as to the ramifications of abandoning the exception84. The Supreme Court mentioned in particular that it had been presented with no principled basis on which it could abandon the exception and yet maintain the ability of a party to recover the costs of using an employed lawyer85. The Supreme Court specifically overruled a holding of the Court of Appeal of New Zealand to the effect that costs could only be awarded by way of reimbursement for fees actually invoiced86. In so doing, the Supreme Court specifically noted that maintaining that holding would have been fatal to the recovery of costs by a party who used an employed solicitor as much as it would have been fatal to the recovery of costs by a legal practitioner who acted on his or her own behalf87. In light of that recent decision of the Supreme Court of New Zealand, I think it important to emphasise that the step now taken in abandoning the Chorley exception as part of the common law of Australia encounters neither of the obstacles which were of concern to the Supreme Court and involves no 81 Annetts v McCann (1990) 170 CLR 596 at 600; [1990] HCA 57. 82 McGuire v Secretary for Justice [2018] NZSC 116. 83 [2018] NZSC 116 at [86], [94]. 84 [2018] NZSC 116 at [87(c)]. 85 [2018] NZSC 116 at [87(c)]. 86 Joint Action Funding Ltd v Eichelbaum [2018] 2 NZLR 70 at 83-84 [41]-[43]. 87 [2018] NZSC 116 at [85], [88]. adoption of the view specifically rejected by the Supreme Court that costs can only be awarded by way of reimbursement for fees actually invoiced. As to the immediate statutory setting for the present appeal, the reasons given by Kiefel CJ, Bell, Keane and Gordon JJ show that the definition of "costs" in s 3(1) of the Civil Procedure Act 2005 (NSW) reflects the general principle in a manner which leaves no room for an exception for recovery of costs by a legal practitioner acting on his or her own behalf. The legislative history of the Civil Procedure Act contains nothing to suggest legislative endorsement of the Chorley exception88. As to the statutory setting elsewhere in Australia, it is sufficient to record that, in an argument on behalf of the respondent legal practitioner which left no stone unturned or unflung in defence of the Chorley exception, no suggestion was made that the statutory costs regime presently applicable in any other Australian jurisdiction has been framed in a manner which relies on the continuing existence of the Chorley exception. Unlike the position in New Zealand, there is in Australia no legislative impediment to its wholesale judicial abolition. Recovery of costs by a party using an employed solicitor predated introduction of the Chorley exception89. The better view, explained in a number of cases to which the Supreme Court of New Zealand appears not to have been referred, is that recovery of costs by a party using an employed solicitor is an application of the general principle rather than an exception to it90. The general rule is engaged on the basis that the costs of using the employed solicitor are still awarded as indemnity for professional legal costs actually incurred in the conduct of litigation by the employer who is a party to the litigation, albeit that those professional legal costs are incurred in the form of an overhead and are therefore not reflected in a severable liability. I agree with the orders proposed by Kiefel CJ, Bell, Keane and Gordon JJ. 88 cf Re Alcan Australia Ltd; Ex parte Federation of Industrial, Manufacturing and Engineering Employees (1994) 181 CLR 96 at 106-107; [1994] HCA 34. See also Flaherty v Girgis (1987) 162 CLR 574 at 594; [1987] HCA 17. 89 Attorney-General v Shillibeer (1849) 4 Ex 606 [154 ER 1356]; Raymond v Lakeman (1865) 34 Beav 584 [55 ER 761]. 90 eg, Registrar of Titles v Watson [1954] VLR 111 at 112-113; Commonwealth Bank of Australia v Hattersley (2001) 51 NSWLR 333 at 337 [11]-[12], 338-340 [17]- Nettle NETTLE J. I agree with the plurality that the rule of practice known as the "Chorley exception" does not extend to barristers and should not be extended to barristers. Unlike the plurality and Gageler and Edelman JJ, however, I do not consider that there is need or justification to decide as part of this matter that the Chorley exception should be abolished. If the issue were tabula rasa, I would agree that the exception is undesirable; although not because I consider it to be anomalous91 or an affront to equality of litigants before the law92. The exception reflects the fact that, relevantly, only a solicitor may lawfully charge for legal work; the work which the solicitor undertakes on his or her own behalf is the kind of legal work for which only a solicitor may lawfully charge; and the work which the lay litigant undertakes on his or her own behalf is not. The real problem with the Chorley exception, as was observed93 in Cachia v Hanes, is that it is productive of a situation in which a successful litigant is permitted not only to recover the amount of the verdict but also to profit from the conduct of the litigation. Despite that difficulty, however, the Chorley exception is a rule of practice of long standing which has twice been acknowledged94 by decisions of this Court β albeit that the correctness of the exception was not there disputed95 β and which has been widely acted upon by courts, the legal profession, governments and government departments, business and various legislatures and rules committees throughout Australasia. The ramifications of abrogating the exception are potentially very wide, and, without this Court first hearing argument on behalf of the interests likely to be affected, to a large extent unknowable. Moreover, even if the Court had the benefit of argument from representative bodies on behalf of the interests most obviously affected, the potential regulatory and fiscal consequences of abrogating the exception appear 91 cf Cachia v Hanes (1994) 179 CLR 403 at 411 per Mason CJ, Brennan, Deane, Dawson and McHugh JJ; [1994] HCA 14. 92 See and compare Cachia v Hanes (1994) 179 CLR 403 at 414-415 per Mason CJ, Brennan, Deane, Dawson and McHugh JJ. 93 Cachia v Hanes (1994) 179 CLR 403 at 412 per Mason CJ, Brennan, Deane, 94 Guss v Veenhuizen [No 2] (1976) 136 CLR 47; [1976] HCA 57; Cachia v Hanes (1994) 179 CLR 403. 95 See and compare Coleman v Power (2004) 220 CLR 1 at 44-45 [79] per McHugh J; [2004] HCA 39. Nettle to me to be of a nature and extent that only Parliament is competent to measure and balance96. To adopt and adapt the language of Mason CJ, Brennan, Deane, Dawson and McHugh JJ in Cachia97: "there are considerations which must be weighed before any reasoned conclusion can be reached. A court engaged in litigation between parties, even if it were not constrained by the legislation and rules, is plainly an inappropriate body to carry out that exercise or to act upon any conclusion by laying down the precise nature of any change required." Recently, the Supreme Court of New Zealand cited that observation in support of their decision98 not to abrogate what is there called "the employed lawyer rule" exception to the "primary rule" that a lay litigant is not entitled to its costs: on the basis that "if there is to be reform to the law [in this area] this should be effected otherwise than by the courts". Significant among the concerns which led the Supreme Court to that conclusion was the "practical inconsistency if the lawyer in person exception were to be abrogated but the employed lawyer rule retained"99. In this country, there is no employed lawyer rule as such. But the position is similar. It has long been accepted, and costs have long been taxed on the basis, that firms of solicitors, corporations and government and semi-government agencies that employ solicitors may, under the Chorley exception, recover the taxed costs of the work performed by such employee solicitors in representing their employers100. Logically, abolition of the Chorley exception would mean 96 See State Government Insurance Commission v Trigwell (1979) 142 CLR 617 at 627 per Gibbs J, 629 per Stephen J, 633, 636 per Mason J; [1979] HCA 40, citing Ross v McCarthy [1970] NZLR 449 at 456 per Turner J and Bagshaw v Taylor (1978) 18 SASR 564 at 579 per Bray CJ. See also McGuire v Secretary for Justice [2018] NZSC 116 at [87(c) and (d)], [88] per Elias CJ, William Young, Glazebrook and O'Regan JJ, [92] per Ellen France J. 97 (1994) 179 CLR 403 at 416. 98 McGuire v Secretary for Justice [2018] NZSC 116 at [68], [88] per Elias CJ, William Young, Glazebrook and O'Regan JJ, see also at [92] per Ellen France J. 99 McGuire v Secretary for Justice [2018] NZSC 116 at [85] per Elias CJ, William Young, Glazebrook and O'Regan JJ, see and compare [93] per Ellen France J. 100 See and compare Attorney-General v Shillibeer (1849) 4 Ex 606 [154 ER 1356]; In re Eastwood, decd [1975] Ch 112; Commonwealth Bank of Australia v Hattersley (2001) 51 NSWLR 333; Ly v Jenkins (2001) 114 FCR 237; Dyktynski v BHP Titanium Minerals Pty Ltd (2004) 60 NSWLR 203; Council of the City of Sydney v Galanis [2012] NSWLEC 263; Deputy Commissioner of Taxation v Debaugy (Footnote continues on next page) Nettle that the entitlement to do so ceases to exist. It may be open to declare, as the plurality do, that the abolition of the Chorley exception should not be taken to disturb the well-established understanding in relation to in-house solicitors employed by governments and others. But why should there be a distinction? There are potentially many forensic and social considerations relevant to a determination of whether the employed solicitor rule should be permitted to survive the Chorley exception, and, if so, in what form; and none of that analysis has been or can be undertaken in this proceeding. As the matter stands, therefore, I consider that the decision whether to abrogate the Chorley exception in whole or part is something that should properly be left to the Commonwealth and State Parliaments or at least to the Rules Committees or Law Society Committees101 in the exercise of their representative and regulatory functions. It was contended on behalf of the appellant that Parliament has, in effect, abrogated the Chorley exception by defining "costs" as "costs payable in or in relation to the proceedings" in s 3(1) of the Civil Procedure Act 2005 (NSW) ("the Act"). In brief substance, the argument tracks suggestions made by Meagher JA in the Court of Appeal, in dissent, as well as by other judges of that Court in other decisions concerning the same or cognate costs powers, that, because s 98(1)(b) of the Act authorises a court to determine by an order for costs "by whom, to whom and to what extent costs are to be paid", and because "costs" are defined in s 3(1) of the Act in terms of "costs payable", the only costs which may be ordered are those which are "payable" in the sense of there being an "underlying liability to pay costs incurred in or in relation to proceedings, rather than any prospective liability under a court order to defray those costs"102. When a solicitor acts for him or herself, ex hypothesi, there are no costs "payable". Hence, the Chorley exception is excluded. The force of the argument is apparent but I do not accept it. The definition of "costs" in s 3(1) was enacted against the background of the long (2012) 263 FLR 193; Maher v Official Trustee in Bankruptcy (2013) 11 ABC (NS) 101 See, eg, the Law Society of New South Wales Costs Committee and Legal Costs Unit. 102 Pentelow v Bell Lawyers Pty Ltd [2018] NSWCA 150 at [126] per Meagher JA (emphasis in original). See also Wang v Farkas (2014) 85 NSWLR 390 at 397 [28] per Basten JA (Bathurst CJ and Beazley P agreeing at 392 [1], [2]); Wilkie v Brown [2016] NSWCA 128 at [34]-[49] per Beazley P (McColl and Gleeson JJA agreeing at [55], [56]); Bechara trading as Bechara and Company v Bates [2016] NSWCA Nettle history of the Chorley exception. Accordingly, if Parliament had intended to abrogate the exception, it is to be expected that it would have done so expressly, and most improbable that it would choose to do so by the inclusion of a single word of ambiguous import in an Act designed to effect a general consolidation of the law of civil procedure in New South Wales "without radical changes in substance or form"103. As it is, although a primary natural and ordinary meaning of "payable" is payable to someone other than the payer, the word also conveys the sense of that which can be paid104. Alternatively, it may mean no more than "'payable' pursuant to costs orders made in proceedings"105. Either way, however, in the context in which "payable" appears in the definition of "costs", it conveys the sense of that which would be payable if the solicitor had not acted for him or herself. That was the meaning that it was assumed to have in O 71 r 19 of the High Court Rules 1952 (Cth) in Guss v Veenhuizen [No 2]106; and, although the point was not expressly considered in that case, Parliament may be presumed to have proceeded on the basis that it was what the Court intended107. So much is confirmed by the Second Reading Speech, in which the Attorney- General told108 the Parliament that the purpose and effect of cl 98 of the Bill was simply to "carry over provisions dealing with the court's power as to costs", which, in practical terms, meant the earlier provisions of s 76 of the Supreme Court Act 1970 (NSW)109. The Attorney-General said110: "The bill and rules largely reflect existing provisions and continue to use phrases that have a settled legal meaning. Where there is change, much of 103 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 6 April 2005 at 15116. 104 Oxford English Dictionary, online, "payable, adj", sense 1b, available at <https://www.oed.com/view/Entry/139176>. 105 Wilkie v Brown [2016] NSWCA 128 at [40]; see also at [42]. 106 (1976) 136 CLR 47. 107 See Coshott v Spencer [2017] NSWCA 118; cf Pentelow v Bell Lawyers Pty Ltd [2018] NSWCA 150 at [132] per Meagher JA. 108 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 6 April 2005 at 15118. 109 See and compare Commonwealth Bank of Australia v Hattersley (2001) 51 NSWLR 333 at 338 [15]. 110 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 6 April 2005 at 15116. Nettle it can be attributed to the fact that drafting styles have changed over the past 30 years. Parties should not be arguing that a rule has changed because a modern drafting style has been adopted if the substance of the rule remains the same." In the result, I agree in the orders proposed by the plurality, but for the reason only that the Chorley exception should not be extended to barristers. Edelman The application of general statutory words In 1884, in London Scottish Benefit Society v Chorley111, the Court of Appeal of England and Wales held that the successful, unrepresented solicitors were entitled to their costs although they would not have been so entitled if they were not solicitors. That rule was not new. Prior to that decision, writers who had considered the issue112, including the commentary in Archbold's Practice from 1840113 to 1879114, had treated unrepresented solicitor parties as entitled to their costs115. Earlier decisions had also recognised that a solicitor could recover costs for attending as a party where it was necessary for the solicitor to attend at court116. This rule was also uniform in the Court of Chancery and subsequently the Chancery Division of the High Court117. It was, however, generally understood that there was a difference between the source of the rules in Chancery and at common law. The authority to order costs in Chancery was inherent118. Hence, the development of those rules in 111 (1884) 13 QBD 872 at 876, 877, 878. See also Pennington v Russell [No 2] (1883) 4 LR (NSW) Eq 41. 112 Compare Sayer, The Law of Costs (1768) at 5; Hullock, The Law of Costs, 2nd ed (1810), vol 1 at 3; Gray, A Treatise on the Law of Costs in Actions & Other Proceedings in the Courts of Common Law at Westminster (1853); Morgan and Wurtzburg, A Treatise on the Law of Costs in the Chancery Division of the High Court of Justice (1882). 113 Chitty, Archbold's Practice of the Court of Queen's Bench, 7th ed (1840), vol 1 114 Prentice, Archbold's Practice of the Queen's Bench, Common Pleas and Exchequer Divisions of the High Court of Justice, 13th ed (1879), vol 1 at 82. See also Pennington v Russell [No 2] (1883) 4 LR (NSW) Eq 41 at 46. 115 Pulling, A Summary of the Law and Practice Relating to Attorneys, 3rd ed (1862) at 267; Dixon, Lush's Practice of the Superior Courts of Law at Westminster, 3rd ed (1865), vol 2 at 896. 116 Leaver v Whalley (1833) 2 Dowl 80 at 80; Jervis v Dewes (1836) 4 Dowl 764 117 In re West; Ex parte Chamberlayne (1850) 4 De G & Sm 17 [64 ER 715]. See London Scottish Benefit Society v Chorley (1884) 12 QBD 452 at 457. 118 Jones v Coxeter (1742) 2 Atk 400 at 400 [26 ER 642 at 642]. Edelman Chancery was purely a matter of judge-made law. By contrast, in a view that has been endorsed in this Court119, it was thought that at common law the authority was entirely statutory120. Nevertheless, from the seventeenth century121 and through the late nineteenth century repeals and reforms122, which did not affect "[a]ny jurisdiction or principle or rule of law or equity established or confirmed"123, the statutory power was expressed in such wide terms as to leave the circumstances for its application as a matter of judicial development. The same broad power exists in statutes in Australia, which replicate this general power to award costs, in provisions such as s 98(1), read with the definition of costs in s 3(1), of the Civil Procedure Act 2005 (NSW). By such provisions, Parliament "intends to give the Court the widest possible power and discretion in the allocation of costs"124. The question considered in Chorley did not concern the interpretation of the essential meaning of the statutory words that were thought to be the sole source of a power to order costs. In cases of the interpretation of the essential meaning of statutory words, where a statute has been re-enacted or amended on a "settled understanding"125, it will generally be assumed that Parliament intended the words to have that settled meaning126. The question in Chorley was different. The essential meaning of the statutory words was established: it was to confer a broad power upon the judiciary to award costs. As Denman J said in the Divisional Court, the "origin of costs is to be traced to some early statutes: but none of the statutes and none of the rules have at all, I think, affected the 119 See Knight v FP Special Assets Ltd (1992) 174 CLR 178 at 182; [1992] HCA 28; Edwards v Santos Ltd (2011) 242 CLR 421 at 426-427 [11]; [2011] HCA 8. 120 Garnett v Bradley (1878) 3 App Cas 944 at 962. But compare Blackstone, Commentaries on the Laws of England (1768), bk 3 at 398-399. 121 An Act to give Costs to the Defendant uppon a Nonsuite of the Plaintiffe, or uppon a Verdict against him 1606 (4 Jac 1 c 3), which extended generally 23 Hen 8 c 15. 122 Civil Procedure Acts Repeal Act 1879 (UK) (42 & 43 Vict c 59). 123 Civil Procedure Acts Repeal Act 1879 (UK), s 4(1)(b). See also London Scottish Benefit Society v Chorley (1884) 12 QBD 452 at 459; Supreme Court of Judicature Act 1890 (UK) (53 & 54 Vict c 44), s 5. 124 McWilliams Wines Pty Ltd v Liaweena (NSW) Pty Ltd (1993) 32 NSWLR 190 125 Brisbane City Council v Amos [2019] HCA 27 at [48]. 126 Attorney-General for NSW v Brewery Employes Union of NSW (1908) 6 CLR 469 at 531; [1908] HCA 94; Brisbane City Council v Amos [2019] HCA 27 at [24]. Edelman question"127. The question in Chorley concerned the manner in which the broad statutory power to award costs should be developed and applied by the judiciary. The conferral of a wide, general power as to costs was intended by Parliament to permit an approach by which the judiciary develops and applies the rules on costs in a principled and coherent manner. The same approach can be seen in statutes where Parliament "speaks continuously to the present" by picking up "as a criterion for its operation a body of the general law"128, or where Parliament is "always speaking" in the sense that the essential original meaning of statutory words is applied to new circumstances and new understandings but consistently with the original statutory purpose129. This was the point being made by the repeated references, from the time of Chorley130, to the rule being one of "practice". It is not a "practice" in the sense that the content of the rule will be determined by generally accepted, or expected, conduct of practitioners, which is itself dependent upon economic, social or political conditions. Rather, the "practice" to which reference was made is the authoritative application of a statute based upon legal principle. Even at the time of Chorley, the authority of the rule did not derive merely from habit and market expectations but rather from professional opinion and judicial decisions that were thought to be founded upon principle131. Unlike in New Zealand or England and Wales, in Australia the re- enactment of general provisions as to costs has not incorporated the approach taken by judicial decisions concerning the application of such provisions so that Australia has not "proceed[ed] on the basis of the continued operation" of the 127 London Scottish Benefit Society v Chorley (1884) 12 QBD 452 at 454-455. 128 Aid/Watch Inc v Federal Commissioner of Taxation (2010) 241 CLR 539 at 549 [23]; [2010] HCA 42. 129 Aubrey v The Queen (2017) 260 CLR 305 at 323 [34]; [2017] HCA 18. 130 London Scottish Benefit Society v Chorley (1884) 12 QBD 452 at 458; London Scottish Benefit Society v Chorley (1884) 13 QBD 872 at 877-878; H Tolputt & Co Ltd v Mole [1911] 1 KB 87 at 92, affirmed on appeal H Tolputt & Co Ltd v Mole [1911] 1 KB 836 at 839; Guss v Veenhuizen [No 2] (1976) 136 CLR 47 at 51-52; [1976] HCA 57; Dobree v Hoffman (1996) 18 WAR 36 at 41, 43, 45, 51; Khera v Jones [2006] NSWCA 85 at [1], [3]; Soia v Bennett (2014) 46 WAR 301 at 321 131 Burns v Corbett (2018) 92 ALJR 423 at 468-469 [210]; 353 ALR 386 at 444-445; [2018] HCA 15, quoting Baker, The Law's Two Bodies (2001) at 66. Edelman Chorley rule132. Rather, in Australia, re-enacted statutory costs powers have left rules, such as the Chorley rule, to judicial development by the judicial application of the general costs power. A coherent principle in the treatment of "costs" of solicitor parties Great care should be taken before abolishing a legal rule that has lasted for, and been followed for, more than a century. Other legal rules, statutory or common law, might have developed around the longstanding doctrine so that the removal or alteration of the longstanding rule could also uproot or damage the developments around it. This will often be so where the rule has been carefully worked out in a succession of cases. Change might also disrupt longstanding foundations upon which people have arranged their affairs and thus disturb existing entitlements133. None of these concerns prevent the alteration of the costs rule recognised in Chorley. No party pointed to any legal doctrine whose development had been affected by the Chorley rule. Nor was it suggested that anyone had arranged their affairs on the basis of the rule. Further, throughout its life the rule has been controversial. Two decades after Chorley, in 1904, in the Full Court of the Supreme Court of Victoria, Madden CJ still saw the point as "not free from doubt" and one about which it was "not easy even now to find the full explanation of the established principle on this point"134. In Dobree v Hoffman135, the Full Court of the Supreme Court of Western Australia refused to follow the Chorley rule. In Cachia v Hanes136, a majority of this Court described the rule as "somewhat anomalous" and "limited and questionable". In the Federal Court, "serious doubts" have been expressed about the correctness of the rule137. The rule has not been applied to a solicitor without a practising certificate138 and 132 McGuire v Secretary for Justice [2018] NZSC 116 at [86], [94]. Compare also EMW Law LLP v Halborg [2018] 1 WLR 52 at 61 [40]. 133 See Nelson v Nelson (1995) 184 CLR 538 at 602; [1995] HCA 25. 134 Ogier v Norton (1904) 29 VLR 536 at 538. 135 (1996) 18 WAR 36. Overruled in Soia v Bennett (2014) 46 WAR 301. 136 (1994) 179 CLR 403 at 411, 413; [1994] HCA 14. 137 Bechara v Bates [2018] FCA 460 at [5]-[6]. See also Hudson v Sigalla [No 2] [2017] FCA 339 at [51]-[53]. 138 Lloyd v Hill [2004] NSWSC 652 at [18]; Worchild v Petersen [2008] QCA 26 Edelman a solicitor who gave contested evidence139. In some cases it has not been applied to a barrister140. The Chorley rule is unjustifiable as a matter of principle without wholesale reform. In the Divisional Court in Chorley, Watkin Williams J considered that the primary application of "costs" was expenditure in "the form of employing skilled persons to do the work necessary to insure success"141 but he said that the extension should apply where the successful party is "a person of skill, and devotes that skill and valuable time and legal knowledge to the doing of that for which he would otherwise have been obliged to employ and pay some one else". As a matter of principle, there may have been good arguments in support of a rule that applied "costs" to "any real expenditure, whether of time or money"142. Time is money. Expenditure of time, as a measure of true loss, might be valued by the opportunity cost143, although if it is measured as a provision of something of independent value the award would more naturally be in the form of a fair remuneration for work of that nature as the common law and equity have done for centuries, including for claims based on contract and on unjust enrichment. A costs rule that is based upon all real expenditure in this sense has been adopted in England, since 1998, in the Civil Procedure Rules, which allow all litigants in person, including barristers and solicitors144, to recover, subject to a cap, those costs "which would have been allowed if the work had been done or the disbursements had been made by a legal representative on the litigant in person's behalf"145. The amount of costs is either the proved financial loss or "an 139 Adamson v Williams [2001] QCA 38 at [26]. 140 Winn v Garland Hawthorn Brahe (Ruling No 1) [2007] VSC 360 at [10]; Murphy v Legal Services Commissioner [No 2] [2013] QSC 253 at [16]. See also the discussion in Lake v Municipal Association of Victoria [No 2] (2018) 57 VR 154 at 141 (1884) 12 QBD 452 at 460. 142 London Scottish Benefit Society v Chorley (1884) 12 QBD 452 at 460. See also Dixon, Lush's Practice of the Superior Courts of Law at Westminster, 3rd ed (1865), vol 2 at 896. 143 Atlas Corporation Pty Ltd v Kalyk [2001] NSWCA 10 at [9]. 144 Civil Procedure Rules 1998 (UK), r 46.5(6)(b)(i)-(ii). 145 Civil Procedure Rules 1998 (UK), r 46.5(3). Edelman amount for the time reasonably spent on doing the work" at a prescribed rate of Β£19 per hour for non-solicitor litigants in person146. As a matter of principle, it might be arguable that if the law had been judicially developed in the manner of the 1998 civil procedure reforms in England then such an approach should also extend to the time reasonably spent by represented parties. But on this appeal no party submitted that such a wholesale reform, which might substantially increase the costs of litigation, could be made judicially to the general rule against recovery of the value of time so that "the exception [for solicitor litigants in person] becomes the rule"147. If the general rule is not to change then, as a matter of principle, it is impossible to justify an exception that recognises costs for expenditure of time in litigation by an unrepresented solicitor litigant who performs work on the case but not by any other unrepresented litigant. If a distinction were said to lie in the skill often possessed by unrepresented solicitors but not by other unrepresented litigants then costs should be permitted for the time of an unrepresented builder, plumber, engineer, architect, or accountant who relies on their expertise to perform work on their own case including preparing submissions on matters within their expertise. In the Court of Appeal in Chorley, Bowen LJ thought it "absurd" to "permit a solicitor to charge for the same work when it is done by another solicitor, and not to permit him to charge for it when it is done by his own clerk"148. Whether or not that is correct, it would be equally absurd to permit the builder, plumber, and engineer to recover costs for the same skilled work when it is done by another for the litigation, but not to permit them to recover when it is done by themselves. Nor is there any reason to treat solicitors differently from other professions due to the particular duties that they owe in the course of representing others. Although an unrepresented solicitor who is party to an action is often described as "self-represented", the solicitor, like any other unrepresented litigant, does not "represent herself or himself". The solicitor's role as an agent for another is absent. Further, although it might be said that evidence given by a builder, plumber, or engineer would better be given by an independent person, modern orthodoxy, as the joint judgment explains, is also that it is undesirable for solicitors to act for themselves. 146 Civil Procedure Rules 1998 (UK), r 46.5(4) and para 3.4 of Practice Direction 46 β Costs Special Cases. 147 Cachia v Hanes (1994) 179 CLR 403 at 414. 148 (1884) 13 QBD 872 at 877. Edelman In summary, since the Chorley rule was a judicially developed rule which did not form an underlying assumption of any later statutory enactment, and since it is inconsistent with the underlying foundation of principle upon which costs rules have developed, those decisions that have adopted the Chorley rule in Australia should be overruled. Prospective overruling Echoing Pope Innocent III, Lord Rodger said that "in the New Testament even God himself made some changes to what he had laid down in the Old"149. If a broad view is taken of "prospective", of "overruling", and of the subject matter that is prospectively overruled, it might be arguable that almost every common judicial overruling. However, the primary point of concern raised by the opponents of "prospective overruling" is not the terminology. Their valid point is that judges must not cross the Rubicon, however elusive its precise location might be, between adjudication and legislation. jurisdiction recognises some form of prospective law In Ha v New South Wales150, in the context of the interpretation of the essential meaning of s 90 of the Constitution, this Court refused to overrule previous decisions with prospective effect only. Gummow and Kirby JJ said that the "adjudication of existing rights and obligations as distinct from the creation of rights and obligations distinguishes the judicial power from non-judicial power"151. This passage should not be understood as endorsing the theory of law, described by Lord Reid as a "fairy tale"152, that courts cannot create new law or that adjudication does not involve creating new rights and obligations. Plainly courts do create new rights and obligations as a matter of legal effect by recognising rights or obligations that are different from a previously settled understanding or a previously settled recognition. Less obvious, but nonetheless still involving a creation of new rights and obligations by a court order, is when a party is exposed to a liability, such as to make discovery or to account, and a judicial order creates the duty to do so. 149 Rodger, "A Time for Everything under the Law: Some Reflections on Retrospectivity" (2005) 121 Law Quarterly Review 57 at 79. 150 (1997) 189 CLR 465; [1997] HCA 34. 151 (1997) 189 CLR 465 at 504; see also at 515. 152 Reid, "The Judge as Law Maker" (1972) 12 Journal of the Society of Public Teachers of Law 22 at 22. Edelman The point instead being made in the quoted passage from Ha v New South Wales is that when the legal effect of a judicial decision is to create a substantive right or obligation, a court achieves this by reasoning of legal principle that is "fundamentally different from the enactment of new statutory provisions" because it is explicitly or implicitly based upon an assumption that the right or obligation was "at all relevant times legally correct and an authentic legal rule"153. In that sense, an obligation to which the order gives effect will be based on a legal duty or liability that is held to have been "existing" at the time of the relevant event as a matter of legal principle154. The concern of this Court in Ha v New South Wales was that prospective overruling could not alter these foundational precepts by requiring courts to "maintain in force that which is acknowledged not to be the law"155. The Court was not concerned with whether there could ever be any circumstances in which courts might create rules with other than retroactive effect to the time of the relevant events156. For instance, practice directions of a court, which regulate or govern the court's authority, are usually concerned only with future practices because they are not concerned with duties or liabilities at the time of any relevant event. Sometimes, perhaps on the same theory by describing the rule as one of "practice", orders have been made inter partes without giving the rule upon which they were based full retroactive effect157. But it does not appear that such orders have ever been made after full argument about the scope of judicial power. And it was not submitted on this appeal that a power to overrule prospectively could be contained within judicial power by limiting it only to rules that regulate or govern the court's authority. The scope of such a power was thus not directly raised on this appeal. Although the Chorley rule has often been described as a "rule of practice", it was not submitted that it is merely a rule that regulates or governs the court's 153 Finnis, "The Fairy Tale's Moral" (1999) 115 Law Quarterly Review 170 at 174- 154 Precision Data Holdings Ltd v Wills (1991) 173 CLR 167 at 189-190; [1991] HCA 155 (1997) 189 CLR 465 at 504. 156 Campbell, "The Retrospectivity of Judicial Decisions and the Legality of Governmental Acts" (2003) 29 Monash University Law Review 49 at 53-56, 71. 157 McKinney v The Queen (1991) 171 CLR 468 at 476; [1991] HCA 6. See also Connelly v Director of Public Prosecutions [1964] AC 1254 at 1296, 1360-1361, 1368. Compare Royal Bank of Scotland Plc v Etridge [No 2] [2002] 2 AC 773 at Edelman authority rather than being a rule that creates substantive rights or liabilities or creates or alters the court's powers to enforce or sanction those rights or liabilities. If that submission had been made and accepted, it would have been necessary to determine (i) whether, and if so when, it is possible to give, with prospective effect only, an authoritative legal application to a general statutory power to create a "rule of practice", and (ii) whether that prospective effect could be made to post-date the resolution of the dispute itself. It is enough in this case to apply the usual principle that in the exercise of judicial power a court cannot determine that a statute be applied in one way to the parties before the court but in another way to other parties in the future. The legal rule which this Court determines to apply by ss 3(1) and 98(1) of the Civil Procedure Act is one that should have applied, and does now apply, at all relevant times. Conclusion For these reasons, I agree with Kiefel CJ, Bell, Keane and Gordon JJ that the rule in Chorley is not part of Australian law and with the orders proposed. |
HIGH COURT OF AUSTRALIA PLAINTIFF M79/2012 PLAINTIFF AND MINISTER FOR IMMIGRATION AND CITIZENSHIP DEFENDANT Plaintiff M79/2012 v Minister for Immigration and Citizenship [2013] HCA 24 29 May 2013 ORDER The questions asked by the parties in the Amended Special Case dated 30 October 2012 and referred for consideration by the Full Court be answered as follows: Question 1 Was the plaintiff validly granted the temporary safe haven visa? Answer Yes. Question 2 Is the plaintiff's application for a protection visa a valid application? Answer Question 3 Who should pay the costs of this Special Case? Answer The plaintiff. Representation M R Pearce SC and L G De Ferrari for the plaintiff (instructed by Baker & J T Gleeson SC, Acting Solicitor-General of the Commonwealth with S P Donaghue SC and K L Walker for the defendant (instructed by Sparke Helmore) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Plaintiff M79/2012 v Minister for Immigration and Citizenship Administrative law β Migration β Refugees β Minister exercised power under s 195A(2) of Migration Act 1958 (Cth) to grant plaintiff temporary safe haven visa permitting stay of seven days and bridging visa permitting stay of six months β Temporary safe haven visa granted to engage bar imposed by s 91K of Act on making valid application for protection visa β Whether decision to grant temporary safe haven visa made without power β Whether decision to grant temporary safe haven visa made for improper purpose β Whether plaintiff's application for protection visa valid. Migration Act 1958 (Cth), ss 29, 31, 37A, 46A, 65, 91H, 91J, 91K, 91L, 195A. Words and phrases β "improper purpose", "offshore entry person", "public interest", "temporary safe haven visa". FRENCH CJ, CRENNAN AND BELL JJ. Introduction The mandatory detention in Australia of asylum seekers without visas who have tried to enter Australia from the sea is a matter of intense public interest and debate. Most if not all of such arrivals seek protection visas under the Migration Act 1958 (Cth) ("the Act") on the basis that they are refugees under the Refugees Convention1 to whom Australia, as a party to that Convention, owes protection obligations. The Act provides that such asylum seekers who have arrived in designated "excised offshore places" cannot make a valid application for a protection visa unless the Minister exercises a statutory dispensing power. An administrative assessment and independent review process has been created to determine their claims for refugee status so that the Minister can then decide whether or not to consider exercising that dispensing power. In order to enable a number of such persons to be released from detention pending completion of the assessment and review processes, the Minister, exercising a special power applicable to persons in detention under the Act, decided it was in the public interest to grant each of them two visas: a seven-day temporary safe haven visa and a bridging visa of a duration between three and twelve months. The duration of the bridging visa varied according to different categories of asylum seeker. The purpose of granting the seven-day temporary safe haven visas was to enliven a statutory bar, which would survive the expiry of those visas, preventing the asylum seekers from making a valid application for a protection visa unless the Minister exercised another dispensing power. The purpose of granting the bridging visas was to enable the asylum seekers to remain in the community, to work and to access services pending completion of the assessment and independent review of their claims for protection. The plaintiff was granted a seven-day temporary safe haven visa and a six- month bridging visa under those arrangements. He subsequently lodged an application for a protection visa. He maintains that there is no bar against him lodging that application because the Minister's special power did not extend to the grant of a temporary safe haven visa to a person who would not have qualified under the provisions of the Act relating to such visas. He also says that 1 Convention relating to the Status of Refugees (1951) as amended by the Protocol relating to the Status of Refugees (1967). Crennan Bell the grant of the temporary safe haven visa was for an improper purpose: in effect, to prevent him from making a valid application for a protection visa. The plaintiff applied to this Court seeking certiorari to quash the Minister's decision to issue him with a temporary safe haven visa and mandamus requiring the Minister to consider the plaintiff's application for a protection visa. A special case has been referred to the Full Court posing the questions whether the grant of the temporary safe haven visa was valid and whether the plaintiff's application for a protection visa was valid. For the reasons that follow the answers, adverse to the plaintiff, are "yes" and "no" respectively. Factual and procedural outline The plaintiff, a Sri Lankan national claiming to be a refugee entitled to protection by Australia, arrived at Christmas Island by boat and without a visa in February 2010. Because he had no visa, he was an "unlawful non-citizen" within the meaning of s 14 of the Act2. Because Christmas Island is designated as an "excised offshore place" under the Act, the plaintiff was classified by the Act as an "offshore entry person"3. So classified, he was prevented by s 46A(1) of the Act from making a valid application for a protection visa. That bar could be lifted if the Minister were to exercise a non-compellable dispensing power under s 46A(2). The plaintiff requested assessment under an administrative refugee status assessment process established by the Government for offshore entry persons and described in the judgment of this Court in Plaintiff M61/2010E v The Commonwealth4. The assessment process and an associated independent merits review process were established so that the Minister could, on the basis of the assessment or review of an offshore entry person's claim for protection, determine whether to exercise his dispensing power under s 46A(2). The plaintiff was found by an officer of the Department, who carried out the requested assessment, not to be a refugee within the meaning of the Refugees Convention. A reviewer appointed to carry out an independent merits review of that determination recommended to the Minister, on 17 May 2011, that the plaintiff not be recognised as a person to whom Australia owes protection obligations under the Refugees Convention. The plaintiff applied to the Federal Magistrates Court on 5 July 2011 for judicial review of that recommendation. At 2 The Act, ss 13(1) and 14(1). 3 The Act, s 5. (2010) 243 CLR 319; [2010] HCA 41. Crennan Bell that point he had no prospect of being considered for the exercise of the Minister's dispensing power under s 46A(2) unless he were successful in his judicial review application. In the ordinary course, success would result in an order requiring that he be reassessed. Being an unlawful non-citizen, the plaintiff was held in detention pursuant to s 189 of the Act from the time of his arrival in Australia. A mechanism by which he could be, and eventually was, released from detention was the grant of a visa by the Minister pursuant to a power conferred on him by s 195A, a section which is expressed to apply to persons in detention under s 1895. It allows the Minister, if he thinks it is in the public interest, to grant such a person a visa of a particular class6, whether or not the person has applied for a visa7. On 12 April 2012, the Minister decided to exercise his power under s 195A to grant the plaintiff a temporary safe haven visa8 permitting a stay for seven days and a bridging E visa9 permitting a stay of six months. The latter was the first of two bridging visas granted to the plaintiff. The plaintiff was one of 2,383 offshore entry persons to whom that combination of visas was issued between 25 November 2011 and 25 October 2012. The purposes of the dual grants were: The grant of the short-term temporary safe haven visas would render the offshore entry persons to whom they were granted lawful non-citizens and thereby able to be released from detention. The grant of temporary safe haven visas would engage a statutory bar preventing the grantee from making a valid application for any other visa. The Minister could then consider by reference to existing assessment and review processes whether to lift the statutory bar. 5 The Act, s 195A(1). 6 The Act, s 195A(2). 7 Plaintiff S10/2011 v Minister for Immigration and Citizenship (2012) 86 ALJR 1019 at 1036 [82] per Gummow, Hayne, Crennan and Bell JJ; 290 ALR 616 at 637; [2012] HCA 31. 8 Class UJ Subclass 449. 9 Class WE Subclass 050. Crennan Bell The simultaneous grant of the bridging E visa would also render the holder a lawful non-citizen during the currency of that visa and would enable the holder, under conditions attached to the visa, to work and to have access to support services and programs while living in the community10. In the Minister's affidavit filed in these proceedings he said: "If I had not been able to grant a Temporary Save Haven visa to the Plaintiff simultaneously with the grant of a Bridging E visa, I would not have exercised my power under s 195A of the Act to grant to the Plaintiff a Bridging E visa. This is because the grant of a Bridging E visa on its own would have enabled the Plaintiff to lodge a valid application for a protection visa without the restriction in s 46A of the Migration Act 1958, in circumstances where the Plaintiff's protection claims had been assessed through an existing process." The grantees of the temporary safe haven visas and bridging E visas who were subject to refugee status assessment and independent merits review processes which were incomplete were intended to remain subject to those processes. The original end point of the incomplete assessment and review process no longer applied. That end point would have been a decision by the Minister whether or not to consider, under s 46A(2), lifting the bar to a valid application for a protection visa. It no longer applied because the grantees of the visas ceased to be unlawful non-citizens. However, the grant of the temporary safe haven visas engaged a new bar imposed by s 91K, which prevents the holder of such a visa, or a former holder who had not left Australia since the visa expired, from making a valid application for any other visa11. That bar, like the bar created by s 46A(1), can be lifted. Section 91L confers upon the Minister a power, if he thinks it in the public interest to do so, to determine by written notice given to a particular non-citizen that s 91K does not apply to an application for a visa made within a seven-day period from when the notice is given. The Minister's stated purpose for granting the temporary safe haven visas to offshore entry persons who claim to be refugees and were subject to 10 There was a question whether, in the case of the plaintiff, the bridging E visa which he was granted came into effect concurrently with the temporary safe haven visa or only upon its expiration. In the event, nothing turns on the resolution of that question. 11 The Act, s 91K read with s 91J. Crennan Bell incomplete assessment and review processes was to enable him to consider, having regard to the outcome of those processes, whether to exercise his dispensing power under s 91L. The implementation of that purpose with respect to the plaintiff was complicated by the fact that by 12 April 2012, when the Minister granted him a temporary safe haven visa and a bridging E visa, the assessment and review processes which he had undertaken had been completed. The outcome of the review process was subject to a judicial review proceeding in the Federal Magistrates Court, but a threshold question, agitated in that Court, namely whether the proceeding had become moot because of the grant of the temporary safe haven and bridging visas, was unresolved at the time of this hearing. The Magistrate had evidently reserved judgment on the question of whether, having regard to the grant of visas to the plaintiff, he lacked jurisdiction to hear the application for judicial review. The Acting Solicitor-General of the Commonwealth submitted that the judicial review proceedings were not moot. In the event that they were successful, the Minister would consider the possible exercise of his power under s 91L. That submission rested upon the premise that the Minister could appropriate to the exercise of that power the outcome of an assessment or review process originally directed to the exercise of his power under s 46A(2). There is no reason why the Minister could not inform the decision whether to consider the exercise of his power under s 91L by reference to the outcomes of that assessment and review process. An exercise of power under s 91L depends on the Minister forming a view as to the public interest, informed by relevant matters. It may be that for persons in the plaintiff's circumstances, where the issue of a temporary safe haven visa and a bridging visa raised a question mark about pending judicial review proceedings, the Minister could simply direct that a fresh assessment process be undertaken for the purposes of informing his consideration whether or not to exercise his power under s 91L. It is not necessary, in order to answer the questions posed in the special case, to express a concluded view on the status of the judicial review proceedings or options which may be available to the Minister to deal with the plaintiff's claim for protection as a refugee. The plaintiff's application to the Federal Magistrates Court for judicial review of the recommendation of 17 May 2011 adverse to his claim for recognition as a refugee came on for hearing on 13 April 2012 and again on 10 July 2012. Judgment was reserved and remains reserved. On 22 August 2012, the plaintiff applied to this Court for certiorari to quash the Minister's decision to grant him a temporary safe haven visa. He also sought associated declaratory relief. On its face, the application did not engage the jurisdiction conferred on the Court by s 75(v) of the Constitution defined by reference to matters "in which a writ of Mandamus or prohibition or an Crennan Bell injunction is sought against an officer of the Commonwealth". The plaintiff applied on 18 September 2012 for a protection visa and on 28 September 2012 amended his application to seek mandamus. On 30 October 2012, Hayne J made an order referring for consideration by a Full Court a special case agreed upon by the parties. The relief claimed by the plaintiff In his amended application, the plaintiff seeks a declaration that the decision of the Minister to grant him a temporary safe haven visa was made without power and alternatively or additionally was made for an improper purpose. He seeks a writ of certiorari to quash the decision, a declaration that his application for a protection visa was a valid application under the Act and mandamus directing the Minister to determine that application according to law. The grounds for relief The plaintiff identified two jurisdictional errors said to have been committed by the Minister in granting him a temporary safe haven visa: s 195A of the Act did not authorise the grant of the temporary safe haven visa to the plaintiff; and the decision to grant the temporary safe haven visa was made for an improper purpose. The questions on the special case The questions stated for the opinion of the Full Court on the special case were: 1. Was the plaintiff validly granted the temporary safe haven visa? Is the plaintiff's application for a protection visa a valid application? 3. Who should pay the costs of this special case? The legislative framework and temporary safe haven visas The challenge to the Minister's decision to grant the plaintiff a temporary safe haven visa directs attention to the scope of the power to grant a visa Crennan Bell conferred upon the Minister by s 195A. As Hayne J observes in his reasons12 that section must be considered in the context of the Act as a whole. The Minister is empowered by s 29(1) of the Act to "grant a non-citizen permission, to be known as a visa" to travel to and enter and/or remain in Australia. The Act and the Migration Regulations 1994 (Cth) ("the Regulations") provide for different classes of visa13. Some classes of visa are set out in the Act itself. These are referred to in s 31(2). Others are prescribed by the Regulations14. The Regulations may prescribe criteria for each class15. A visa is a visa of "a particular class" if the Act or the Regulations specify that it is a visa of that class16. All classes of visa share a common purpose reflected in the definition of "visa" in s 29(1). They are granted in order to permit non-citizens to travel to and enter and/or remain in Australia. Subject to specific provisions of the Act and the Regulations, a person who wants a visa has to apply for it and has to apply for a visa of a particular class17. The Minister is obliged by the Act to consider a valid application for a visa18. The Act also provides specifically that the Minister is not to consider an application that is not a valid application19. Regulation 2.01 of the Regulations provides in par (a) that, for the purposes of s 31 of the Act, the prescribed classes of visa are20: "such classes (other than those created by the Act) as are set out in the respective items in Schedule 1". 12 Reasons of Hayne J at [62]. 13 The Act, s 31. 14 The Act, s 31(1). 15 The Act, s 31(3). 16 The Act, s 31(5). 17 The Act, s 45. 18 The Act, s 47(1). 19 The Act, s 47(3). 20 Paragraph (b) refers to additional transitional classes which are not material for present purposes. Crennan Bell The Regulations do not purport to redefine the particular classes of visa created by the Act itself. They do, however, define "subclasses" of such visas for the purpose of attaching, as the Act contemplates they may, different sets of criteria conditioning the grant of such visas in different circumstances or for different purposes. The temporary safe haven visa is a particular class of visa created by s 37A(1) of the Act, which provides: "There is a class of temporary visas to travel to, enter and remain in Australia, to be known as temporary safe haven visas." A note to s 37A(1) states that a "temporary safe haven visa is granted to a person to give the person temporary safe haven in Australia." It is a characteristic of the visa that the Minister may, by notice in the Gazette, extend its period21. The Minister may also shorten its period22: "if, in the Minister's opinion, temporary safe haven in Australia is no longer necessary for the holder of the visa because of changes of a fundamental, durable and stable nature in the country concerned." The term "country concerned" means the country or countries in which circumstances exist that gave rise to the grant of temporary safe haven visas23. Section 37A is to be read in conjunction with subdiv AJ of Div 3 of Pt 2 of the Act, which comprises ss 91Hβ91L. The operation of those provisions, barring the holders of temporary safe haven visas or former holders still in Australia from making a valid application for another visa, and the Minister's non-compellable power to lift that bar, have already been discussed. The purpose of the subdivision, stated in s 91H, is to impose the bar. Also relevant to temporary safe haven visas is s 500A, which authorises the Minister to refuse to grant such a visa, or to cancel it if granted. The grounds set out in that section are related to past or present criminal conduct and associations on the part of the applicant or holder of the visa and/or an assessment that the person constitutes a threat to national security or could prejudice Australia's international relations. 21 The Act, s 37A(2). 22 The Act, s 37A(3). 23 The Act, s 37A(7). Crennan Bell Section 37A identifies the purpose of the class of temporary safe haven visas which it creates. The evident purpose, not confined by any criteria specified in the Act, is to provide a temporary refuge for non-citizens who would be at risk of some form of harm if returned to another country. The kinds of harm are not specified in the Act. They could reasonably be expected to include the risk of persecution, the risk of death or injury arising out of ongoing civil disorder or armed conflict and perhaps the risk of starvation or disease arising out of natural disasters. The wide range of circumstances which might give rise to a need for such a visa means that the Minister, subject to any constraints imposed by the Regulations, has a broad discretion in determining circumstances under which it is appropriate to grant it. The purpose of the temporary safe haven visa is also made clear by its legislative history. The provisions of the Act relating to temporary safe haven visas were inserted by the Migration Legislation Amendment (Temporary Safe Haven Visas) Act 1999 (Cth). Their initial purpose was to provide temporary safe haven to Kosovars displaced in the Balkan conflict of the late 1990s24. The then Minister described the amendment as a "short-term humanitarian measure" to "assist in alleviating the massive suffering and human tragedy that has developed in Kosovo."25 It was not to become a means of obtaining permanent residence in Australia. As temporary safe haven was to be provided at short notice in circumstances where extensive character checking was not possible, it was necessary to have effective powers to withdraw temporary safe haven visas26. The purpose of the temporary safe haven visa, derived from that history and the text of s 37A, is not confined to the provision of temporary safe haven to Kosovars. It is a class of visa which, as defined by the Act, could be granted to anyone in need of temporary safe haven. The plaintiff submitted that the purpose of the temporary safe haven visa and the words "to travel to, enter and remain in Australia" in s 37A indicated that an applicant for a temporary safe haven visa had to be outside Australia at the time of application. That submission should not be accepted. Plainly there may be cases in which, by reason of events in a non-citizen's country while that 24 Explanatory Memorandum to the Migration Legislation Amendment (Temporary Safe Haven Visas) Bill 1999 (Cth) at [1]; Australia, House of Representatives, Parliamentary Debates (Hansard), 11 May 1999 at 5022. 25 Australia, House of Representatives, Parliamentary Debates (Hansard), 11 May 26 Australia, House of Representatives, Parliamentary Debates (Hansard), 11 May Crennan Bell person is in Australia, the grant of a temporary safe haven visa would fall within the scope and purpose of s 37A. To construe the words "travel to, enter and remain in Australia" conjunctively is to impose an inexplicable limit upon the broad discretion conferred by the section. It follows that there is nothing about the grant of a temporary safe haven visa under s 195A, to a person who is already in Australia, which is on that account inconsistent with the power conferred by s 37A. In any event, as appears below, once the Minister has identified a "visa of a particular class" which he wishes to grant pursuant to s 195A, the relevant power is to be found in that provision. For the purposes of legal characteristics and these reasons, consequences of the temporary safe haven visa may be distinguished from its purpose27. The characteristic and consequence relevant to the Minister's decision to make a grant of the visa pursuant to s 195A(2) are respectively: the it can be granted for a short time albeit that time can be extended by notice by the Minister; and its grant prevents the visa holder or a grantee who has not left Australia since the visa expired from making a valid application for any other kind of visa unless the Minister exercises his dispensing power under s 91L. The class of temporary safe haven visa is created by the Act. Two "subclasses", UJ(448) and UJ(449), have been designated by the Regulations28. The Regulations do not thereby define the particular class of visa created by s 37A. They specify alternative sets of criteria which have to be satisfied for its grant. As appears below, however, those criteria do not bind the Minister in the exercise of his power under s 195A. For completeness, it may be noted that Subclass 448 visas are designated in the Regulations as Kosovar Safe Haven (Temporary) and Subclass 449 as Humanitarian Stay (Temporary)29. It is a time of decision criterion of the Subclass 448 visa that the applicant was resident in Kosovo in the Federal Republic of Yugoslavia on 25 March 1999 and has been 27 It may be accepted that the characteristics of a visa can be defined widely enough to encompass its purpose and the circumstances of its grant: reasons of Hayne J at 28 Subclass UJ(448) created in April 1999 by Migration Amendment Regulations 1999 (No 2) (Cth) and Subclass UJ(449) created in June 1999 by Migration Amendment Regulations 1999 (No 7) (Cth). 29 The Regulations, Sched 1, item 1223B. Crennan Bell displaced from Kosovo since that date30. It is a time of decision criterion of the Subclass 449 visa that the applicant has been displaced or that there is a strong likelihood that the applicant will be displaced from his or her place of residence and that the applicant is in grave fear of his or her personal safety because of the circumstances in which or reasons why the applicant has been or may be displaced31. The temporary safe haven visa granted to the plaintiff by the Minister was stated in the ministerial Decision Instrument signed on 12 April 2012 to be a temporary safe haven (Subclass 449) visa. While accepting that it was not necessary to the exercise of ministerial power under s 195A that the criteria in the Regulations for the grant of the visa be satisfied, the plaintiff nevertheless submitted: "it must still be a visa to give temporary safe haven in response to a humanitarian emergency." The plaintiff's argument that the Minister had exceeded the power conferred upon him by s 195A converged with his argument that the Minister had exercised the power for an improper purpose. In substance, the plaintiff's submission was that s 195A did not authorise the Minister to grant a temporary safe haven visa to a person who did not require temporary safe haven in response to a humanitarian emergency and that, in this case, the Minister had purported to do so for another purpose. The proposition that a temporary safe haven visa may be granted under s 195A, without application, for a purpose foreign to that for which it was created appears to be in tension with the legislative scheme for the grant of visas generally. The same is true of the related proposition that such a visa may be granted in order to prevent a person from seeking the grant of another kind of visa. However, the purposes for which a visa may be granted under s 195A are to be found in the statutory criterion of the public interest. That is a matter which, within the general scope and purposes of the Act, it is left for the Minister to judge. Neither that criterion nor the mechanism which the section creates for the grant of visas by personal ministerial decision without application are in terms confined by the general scheme of the Act for the grant of visas. It is necessary now to consider whether s 195A authorises the grants made by the Minister in this case. 30 The Regulations, Sched 2, cl 448.221(2). 31 The Regulations, Sched 2, cl 449.221(2). Crennan Bell The scope of the power conferred by s 195A As one of a number of dispensing provisions in the Act, s 195A stands apart from the regime of tightly controlled official powers, duties and discretions relating to applications for and grants of visas. The dispensing provisions confer upon the Minister a degree of flexibility by authorising him to grant visas which might not otherwise be able to be granted because of non-satisfaction of substantive or procedural requirements and to do so in the absence of an application for the visa granted, or indeed for any visa32. The relevant parts of s 195A are in the following terms: "Persons to whom section applies This section applies to a person who is in detention under section 189. Minister may grant visa If the Minister thinks that it is in the public interest to do so, the Minister may grant a person to whom this section applies a visa of a particular class (whether or not the person has applied for the visa). In exercising the power under subsection (2), the Minister is not bound by Subdivision AA, AC or AF of Division 3 of this Part or by the regulations, but is bound by all other provisions of this Act." The Minister is under no duty to consider whether to exercise his power under s 195A(2)33. If the Minister exercises the power and grants a visa, he must cause to be laid before each House of Parliament a statement that says that he has granted a visa under the section and that sets out his reasons for doing so, referring in particular to his reasons for thinking that the grant is in the public interest34. 32 Plaintiff S10/2011 v Minister for Immigration and Citizenship (2012) 86 ALJR 1019 at 1027 [30] per French CJ and Kiefel J; 290 ALR 616 at 624. 33 The Act, s 195A(4). 34 The Act, s 195A(6). Crennan Bell Subdivision AA, comprising ss 44β51 of the Act, which does not bind the Minister when exercising his powers under s 195A(2), deals with applications for visas. It imposes the requirement for a valid application for a particular class of visa35 and imposes an obligation on the Minister to consider a valid application36. Subdivision AF, comprising ss 72β76, also disapplied by s 195A(3), deals with the grant of bridging visas. Subdivision AC comprises ss 65β69 and deals with the grant of visas generally. In particular, s 65(1) provides: "After considering a valid application for a visa, the Minister: if satisfied that: the health criteria for it (if any) have been satisfied; and (iii) the other criteria for it prescribed by this Act or the regulations have been satisfied; and the grant of the visa is not prevented by section 40 (circumstances when granted), 500A (refusal or cancellation of temporary safe haven visas), 501 (special power to refuse or cancel) or any other provision of this Act or of any other law of the Commonwealth; and any amount of visa application charge payable in relation to the application has been paid; is to grant the visa; or if not so satisfied, is to refuse to grant the visa." A note to s 65(1) refers the reader to s 195A and the disapplication of subdivs AA, AC and AF and the Regulations. Section 195A was introduced into the Act by the Migration Amendment (Detention Arrangements) Act 2005 (Cth). The Explanatory Memorandum for the Bill stated, conformably with the text of the provision37: 35 The Act, s 45(1). 36 The Act, s 47(1). 37 Explanatory Memorandum to the Migration Amendment (Detention Arrangements) Bill 2005 (Cth) at [20]. Crennan Bell "It is intended that it will be used to release a person from detention where it is not in the public interest to continue to detain them." The exemption from the requirements of subdivs AA, AC and AF was, according to the Explanatory Memorandum, intended38: "to clarify that in the exercise of the section 195A power, the Minister is not bound by the usual requirements that apply to the grant of visas. The Minister will have the flexibility to grant any visa that the Minister considers is appropriate to the individual's circumstances". It was submitted for the Minister that, if he thinks it is in the public interest to do so, by exercising his power under s 195A he can grant any class of visa whether or not the person to whom he grants it satisfies criteria otherwise controlling such a grant. The fact that some criteria, including those relating to the grant of temporary safe haven visas, are found in parts of the Act not disapplied by s 195A(3) was said to be irrelevant because they are given effect by s 65, which is expressly disapplied. In any event there are no relevant "criteria" in the Act governing the grant of temporary safe haven visas. The purpose served by the grant of such a visa is apparent by inference from the text of s 37A, the explanatory memorandum and the second reading speech for the amendment which introduced it into the Act. That purpose is not in form or substance a "criterion" for its grant. There are provisions of the Act which prescribe criteria for the grant of certain classes of visa created by the Act39. Section 37A is not one of them. The kind of visa which the Minister may grant under s 195A(2) is "a visa of a particular class". The "particular class" may be a class provided for by one of the sections of the Act mentioned in s 31(2), which includes s 37A. Alternatively, the particular class of visa may be a class prescribed by the Regulations. Another relevant class, for which the Act itself provides in s 37, is the class of "bridging visas". As observed above, the creation by the Regulations of "subclasses" of those classes of visa for the purpose of attaching different sets of criteria and conditions to them does not define additional "particular" classes of visa within the meaning of s 195A. The particular classes of visa granted by the Minister in this case were a temporary safe haven visa for which s 37A provides and a bridging visa for which s 37 provides. The reference in the 38 Explanatory Memorandum to the Migration Amendment (Detention Arrangements) Bill 2005 (Cth) at [20]β[21]. 39 See for example s 32(2) relating to special category visas and s 36(2) relating to protection visas. Crennan Bell Decision Instrument to a temporary safe haven visa of Subclass 449 did not attract the time of decision criteria applying to the grant of that subclass of visa. Indeed, it would have been sufficient for the Minister to have designated the visa which he was granting as a temporary safe haven visa without reference to the subclass designation created by the Regulations. The key condition for the grant of a visa of a particular class under s 195A(2) is that "the Minister thinks that it is in the public interest to do so". That involves, as this Court has previously said40: "a discretionary value judgment to be made by reference to undefined factual matters, confined only 'in so far as the subject matter and the scope and purpose of the statutory enactments may enable β¦ given reasons to be [pronounced] definitely extraneous to any objects the legislature could have had in view'". It is significant that the section provides that the Minister, when exercising his power to grant a visa under it, must cause a statement to be laid before each House of the Parliament. Gummow, Hayne, Crennan and Bell JJ said of that obligation in Plaintiff S10/2011 v Minister for Immigration and Citizenship41: "This is a particular manifestation of that aspect of responsible government which renders individual Ministers responsible to the Parliament for the administration of their departments." That particular manifestation of responsible government in this case, over and above the general accountability that the Minister has to the Parliament for the administration of his Department, reflects the nature of the decisions made under s 195A(2) and the other dispensing provisions which were referred to in Plaintiff S10. They are decisions which depart from the detailed legislative scheme for the grant of visas of particular classes which has been created by the Parliament. Given their special dispensing character, it is not surprising that the Act provides a specific mechanism of accountability to the Parliament in relation to them. 40 O'Sullivan v Farrer (1989) 168 CLR 210 at 216 per Mason CJ, Brennan, Dawson and Gaudron JJ; [1989] HCA 61; see also Plaintiff S10/2011 v Minister for Immigration and Citizenship (2012) 86 ALJR 1019 at 1027 [30] per French CJ and Kiefel J; 290 ALR 616 at 625. 41 (2012) 86 ALJR 1019 at 1032 [55]; 290 ALR 616 at 631. Crennan Bell In the exercise of his power under s 195A(2) the Minister may decide to grant a particular class of visa because its legal characteristics and legal consequences serve a purpose which he has adjudged to be in the public interest. In this case, he has selected the temporary safe haven visa primarily on the basis that, consistently with the Government's approach to protection claims by offshore entry persons in detention, it will maintain the position that, after release from detention, such persons continue to be barred from applying as of right for a protection visa but must await the application of the ministerial dispensing power, albeit now to be exercised, if at all, under s 91L rather than as previously under s 46A(2). It was open to the Minister, in this case, to grant a temporary safe haven visa by reference to its legal characteristics and consequences unconstrained by the purpose for which it was created under the Act. The purposes for which the Minister might grant such a class of visa were those purposes which would serve the public interest as the Minister judged it. In this case those purposes were not shown to be beyond the scope and purpose of the Act, nor the power conferred by s 195A. They were not improper purposes. The grant of the temporary safe haven visa to the plaintiff was a valid application of the power conferred by s 195A(2). It also follows, by operation of ss 91J and 91K of the Act, that the plaintiff's application for a protection visa made on 18 September 2012 was not a valid application. Conclusion For the preceding reasons, the questions stated for the opinion of the Court on the special case should be answered as follows: Question 1: Was the plaintiff validly granted the temporary safe haven visa? Answer: yes. Question 2: Is the plaintiff's application for a protection visa a valid application? Answer: no. Question 3: Who should pay the costs of this special case? Answer: the plaintiff. Hayne HAYNE J. The object of the Migration Act 1958 (Cth) ("the Act") "is to regulate, in the national interest, the coming into, and presence in, Australia of non-citizens"42. To advance that object, the Act "provides for visas permitting non-citizens to enter or remain in Australia"43 and records44 that "the Parliament intends that [the] Act be the only source of the right of non-citizens to so enter or remain" (emphasis added). Section 31(1) provided that "[t]here are to be prescribed classes of visas". Some of those classes were provided45 for by the Act in ss 32-38B and some were prescribed46 by regulations made under the Act. This proceeding concerns a "temporary safe haven visa", which is a class of visa provided for by s 37A of the Act. The Minister, relying on the power given by s 195A(2), purported to grant the plaintiff a temporary safe haven visa. Section 195A(2) provided that: "If the Minister thinks that it is in the public interest to do so, the Minister may grant a person to whom this section applies a visa of a particular class (whether or not the person has applied for the visa)." In exercising that power, the Minister was not bound by specified provisions of the Act, or by regulations made under the Act, but was bound by all other provisions of the Act47. The central question in this proceeding is whether s 195A(2) empowered the Minister, if "the Minister thinks that it is in the public interest to do so", to grant a visa of a class provided for by the Act, regardless of whether any statutory requirements for that visa were met. In particular, did s 195A(2) give the Minister power to grant the plaintiff a s 37A temporary safe haven visa when the Minister neither considered whether, nor decided that, the plaintiff needed temporary safe haven in Australia? These reasons will show that the Minister did not have this power. 46 ss 31(1) and 504(1). 47 s 195A(3). Hayne The present proceeding The plaintiff commenced a proceeding in the original jurisdiction of this Court seeking, among other relief, certiorari to quash the Minister's decision made on 12 April 2012 to grant the plaintiff a temporary safe haven visa. The parties agreed in stating questions of law for the opinion of the Full Court in the form of a special case. Those questions asked about the validity of the grant of a temporary safe haven visa and the validity of an application the plaintiff had made for a protection visa. The special case set out agreed facts and documents on which the questions were to be determined. Relevant facts and circumstances On about 7 February 2010, the plaintiff entered Australian territory by entering the Territory of Christmas Island. The Territory of Christmas Island was what the Act called48 an "excised offshore place". The plaintiff is a citizen of Sri Lanka and he did not have a visa to enter or remain in Australia. He was, therefore, "an unlawful non-citizen"49 and he was detained under s 189(3) of the Act. Because the plaintiff entered Australia at an excised offshore place and became an unlawful non-citizen because of that entry, he was50 an "offshore entry person". For so long as the plaintiff remained in Australia as an unlawful non-citizen, he could not make a valid application for a visa51 unless the Minister personally decided to exercise the non-compellable power given by s 46A(2) to allow the plaintiff to apply for a visa. The plaintiff claimed to be a person to whom Australia owed protection obligations under the Refugees Convention52. While the plaintiff was in detention, a departmental officer considered that claim for the purpose of advising the Minister of a matter to which the Minister may wish to have regard in deciding whether to exercise the power under s 46A(2) to permit the plaintiff to apply for a visa. The officer determined that the plaintiff was not a refugee. 48 s 5(1), par (a) of the definition of "excised offshore place". 50 s 5(1), definition of "offshore entry person". 51 s 46A(1). 52 Convention relating to the Status of Refugees (1951) as amended by the Protocol relating to the Status of Refugees (1967). Hayne The plaintiff asked that the officer's decision be reviewed. An independent reviewer appointed by the Minister also concluded that the plaintiff was not a refugee and recommended to the Minister that the plaintiff not be recognised as a person to whom Australia had protection obligations under the Refugees Convention. The plaintiff applied to the Federal Magistrates Court for a declaration that the recommendation of the independent reviewer had not been made according to law. That application has been heard but has not been determined. In November 2011, after the plaintiff had made his application for judicial review of the independent reviewer's decision, the Minister announced that some offshore entry persons (or "irregular maritime arrivals") held in detention would be "considered for community placement on bridging visas while their asylum claims are assessed". On 5 April 2012, the Minister agreed with the Department's recommendation that he consider exercising the power under s 195A(2) of the Act with regard to the plaintiff and 288 other "irregular maritime arrivals". The Department proposed that each should be granted both a temporary safe haven visa (valid for seven days) and a bridging visa "with no work limitations". The Department told the Minister that the grant of temporary safe haven visas to these persons would "bar them from lodging further onshore visa applications". On 12 April 2012, the Minister approved a Decision Instrument recording that he had determined that it is in the public interest to grant specified persons (including the plaintiff) each a temporary safe haven visa permitting a stay of seven days and a bridging visa. In the plaintiff's case, the bridging visa permitted a stay of six months. For so long as one of those visas was current, the plaintiff was a lawful non-citizen. It was accepted that the Minister neither considered whether, nor decided that, the plaintiff was in need of temporary safe haven in Australia. Rather, argument in this Court proceeded on the footing that the plaintiff was granted a temporary safe haven visa because s 91K of the Act would prevent him making a valid application for any visa other than a further temporary safe haven visa unless the Minister, exercising the personal power given by s 91L, permitted the plaintiff to do so. As the Minister affirmed in an affidavit attached to the special case, the simultaneous grant of a temporary safe haven visa and a bridging visa was made to "allow offshore entry persons to be released from detention while at the same time avoiding the consequence that they would then be able to apply for protection visas in circumstances where their protection claims had already been, or were already being, assessed through an existing process" (emphasis added). And, as the Department said in its letter to the plaintiff advising him of the Minister's decision, temporary safe haven visa was "granted for administrative reasons and will keep the processing of your protection claims". The only remaining "processing" of the plaintiff's protection claims was the Hayne determination of his application for judicial review of the independent reviewer's decision. Having been granted the visas that have been described, the plaintiff was released from detention. On 18 September 2012, he applied for a protection visa. His bridging visa expired on 12 October 2012 and he was again taken into detention. On 15 October 2012, the Minister, acting under s 195A(2), granted the plaintiff a further bridging visa and again the plaintiff was released from detention. The parties' arguments The plaintiff submitted that the grant of a temporary safe haven visa was beyond power because a visa of that class can lawfully be granted only "to give temporary safe haven in response to a humanitarian emergency". Alternatively, the plaintiff submitted that the grant of a temporary safe haven visa was made for the purpose of imposing the bar to applications for visas provided by s 91K and thus for an improper purpose. The plaintiff submitted that, if the grant of a temporary safe haven visa was invalid, the grant of a bridging visa remained valid and that he could make a valid application for a protection visa53. The Minister's principal submission was that the power conferred by s 195A(2) was to be exercised in the "public interest", not by reference to the criteria that ordinarily governed the grant of any visa. That is, the Minister submitted that s 195A(2) hinged only on the Minister's view of what was in the public interest and empowered the Minister to grant a visa of any class to a person to whom the section applied, if the Minister thought it was in the public interest to do so. The Minister further submitted that s 37A did not provide any criterion for the grant of a temporary safe haven visa but that, if it did, the plaintiff did not demonstrate that the criterion was not satisfied in his case. It is convenient to begin examination of these arguments by turning immediately to the text of s 195A itself. That section cannot, however, be understood in isolation. Its place in the context of the entire Act must also be understood. 53 While holding a current visa, the plaintiff was a lawful non-citizen and could apply for a protection visa. If the plaintiff did not hold a current visa, he was an unlawful non-citizen and s 46A(1) would prevent him, as an offshore entry person, making a valid application for a visa unless the Minister personally decided under s 46A(2) to permit him to apply. Hayne Section 195A It will be recalled that s 195A(2) provided that "[i]f the Minister thinks that it is in the public interest to do so, the Minister may grant a person to whom this section applies a visa of a particular class (whether or not the person has applied for the visa)". Section 195A(3) provided that: "In exercising the power under subsection (2), the Minister is not bound by Subdivision AA, AC or AF of Division 3 of this Part or by the regulations, but is bound by all other provisions of this Act." The three subdivisions referred to in s 195A(3) dealt respectively with applications for visas (subdiv AA (ss 44-51)), the grant of visas (subdiv AC (ss 65-69)) and bridging visas (subdiv AF (ss 72-76)). Some aspects of the power given to the Minister by s 195A(2) were examined by this Court in Plaintiff S10/2011 v Minister for Immigration and Citizenship54. The focus of argument in that case was whether, in deciding whether or not to exercise power under s 195A(2) (or under ss 48B, 351 or 417), the Minister was obliged to afford procedural fairness to the person seeking exercise of the power. Matters of construction were not in dispute except in so far as they touched upon that question of procedural fairness55. The Minister made much in this case of the fact that the power given by s 195A(2) was conditioned upon what the Minister "thinks ... is in the public interest". The Minister's principal argument was that this "public interest" criterion, together with the exclusion of certain subdivisions and the regulations that was effected by s 195A(3), had the consequence that the Minister could grant any visa if the Minister thought it to be in the public interest to do so. No doubt the expression "public interest" "can have no fixed and precise content" in that it "involves a value judgment often to be made by reference to undefined matters"56. But it is equally clear57 that powers that are conditioned on notions of 54 (2012) 86 ALJR 1019; 290 ALR 616; [2012] HCA 31. 55 (2012) 86 ALJR 1019 at 1037 [87]; 290 ALR 616 at 638. 56 Plaintiff S10 (2012) 86 ALJR 1019 at 1039 [99(v)]; 290 ALR 616 at 640 (footnote omitted). 57 See, for example, Water Conservation and Irrigation Commission (NSW) v Browning (1947) 74 CLR 492 at 505 per Dixon J; [1947] HCA 21; O'Sullivan v Farrer (1989) 168 CLR 210 at 216-217; [1989] HCA 61; Osland v Secretary to Department of Justice [No 2] (2010) 241 CLR 320 at 329-330 [13]-[14]; [2010] HCA 24. Hayne the public interest are not completely unlimited. These powers, like any other form of statutory power, can only be understood in the context of the Act in which they appear. And contrary to the Minister's submission, the context provided by s 195A(3) and its exclusion of subdivs AA, AC and AF and the regulations does not "free up" the Minister to ignore any statutory requirements for the grant of a visa imposed by the Act outside those subdivisions. Both the text of s 195A(3) and the content of the particular subdivisions which it excluded run directly counter to that submission. the power given by s 195A(2), Where requirements for the grant of a visa were to be excluded in exercising the Act did so expressly. Section 195A(3) provided that, in exercising that power, the Minister was not bound by regulations made under the Act and thus any criteria for the grant of a visa that may be prescribed58 by regulation. Section 195A(3) expressly excluded subdiv AF and thus the Minister was not bound by either the regulatory or the statutory requirements governing the grant of a bridging visa (in particular, that the person be an "eligible non-citizen"59). That a statutory requirement was expressly excluded where that exclusion was intended by the Parliament serves to reinforce what the words of s 195A(3) themselves make plain: "the Minister ... is bound by all other provisions of this Act". Nothing in the exclusion of subdiv AA suggests that the Minister could ignore statutory requirements not expressly excluded by s 195A(3). There is evident reason for s 195A(3) having provided that subdiv AA did not bind the Minister. Subdivision AA concerned applications for visas and s 45(1) provided that "[s]ubject to this Act and the regulations, a non-citizen who wants a visa must apply for a visa of a particular class". Because the power given by s 195A(2) could be exercised whether or not the person had applied for the visa which the Minister was to grant, the application of subdiv AA had to be excluded for s 195A(2) to operate according to its terms. The exclusion of subdiv AC, and in particular the exclusion of s 65, was central to the Minister's case. Section 65 required the Minister, after considering a valid application, to grant the visa if satisfied of the matters set out in the section (including60 the criteria for the visa prescribed by the Act or the regulations) and to refuse to grant the visa if not so satisfied. It was said in the Minister's written submissions that "[t]he exclusion of s 65 is particularly significant, because it has the consequence that the Minister is able to grant a visa irrespective of whether any criteria in the Act that would otherwise govern the 58 ss 31(3), 40, 504(1) and 505. 59 ss 72 and 73. 60 s 65(1)(a)(ii). Hayne grant of the visa are satisfied". And in oral argument, it was said that restraining exercise of the power given by s 195A(2) by reference to the statutory requirements for a particular class of visa (where those statutory requirements did not appear within subdivs AA, AC and AF) would have the consequence that "the disapplication of section 65 has been given no work to do at all". Contrary to these submissions, nothing in the exclusion of subdiv AC and in particular s 65 suggests that the Minister could ignore statutory requirements in the Act other than those expressly excluded by s 195A(3). The Minister's submissions assumed (wrongly) that the statutory requirements for the grant of a particular class of visas can have effect only through s 65. Section 65 is of course the primary means by which practical effect is given to these requirements, if only because s 65 was evidently intended to be the most frequently exercised source of power for the grant of a visa. But the fact that s 65 is conditioned upon satisfaction of the statutory and regulatory requirements for the grant of a visa does not mean that, by excluding s 65, the grant of a visa under a different source of statutory power need not satisfy statutory requirements. And contrary to the Minister's submissions, this construction does not give the exclusion of s 65 no work to do. The exclusion of subdiv AC was necessary to permit s 195A to operate according to its terms. Although the power given by s 195A(2) could be exercised when the person had not applied for a visa, it could also be exercised when the person had made a valid application for a visa. Providing that subdiv AC did not bind the Minister in exercising power under s 195A(2) was necessary to permit the Minister to exercise that power by deciding to dispose of a valid application for a visa otherwise than in accordance with s 65. In particular, to allow s 195A to operate according to its terms, it was necessary to permit the Minister to grant a visa in circumstances where the criteria prescribed by regulation were not met. The exclusion of subdiv AC generally, or s 65 in particular, does not entail that the statutory requirements for a visa made in provisions of the Act other than subdivs AA, AC and AF did not bind the Minister. Section 195A(3) expressly provided that those other statutory requirements bound the Minister. The Minister's principal argument must therefore be rejected. In exercising the power given by s 195A(2), the Minister cannot ignore those statutory requirements imposed by provisions outside subdivs AA, AC and AF. The Minister is bound by those other provisions. Neither the exclusion of the regulations and subdivs AA, AC and AF nor the conditioning of the power given by s 195A(2) upon the Minister's assessment of the "public interest" provides any basis for ignoring statutory requirements elsewhere in the Act. It is necessary therefore to consider what, if any, statutory requirements for the grant of a visa are imposed by the other provisions of the Act. That requires examination of the Act's provisions about visas. Hayne The Act's provisions about visas Subdivision A (ss 28-43) of Div 3 of Pt 2 of the Act made general provisions about visas. Section 29(1) provided that: "Subject to this Act, the Minister may grant a non-citizen permission, to be known as a visa, to do either or both of the following: travel to and enter Australia; remain in Australia." Section 31(1) provided that there are to be prescribed classes of visas and s 31(2) recognised that, "[a]s well as the prescribed classes" of visas (to be prescribed by regulation61), "there are the classes provided for by sections 32, 33, 34, 35, 36, 37, 37A, 38, 38A and 38B". Those classes were, respectively, "special category visas", "special purpose visas", "absorbed person visas", "ex-citizen visas", "protection visas", "bridging visas", "temporary safe haven visas", "criminal justice visas", "enforcement visas" and "maritime crew visas". Section 31(3) provided that "[t]he regulations may prescribe criteria for a visa or visas of a specified class (which, without limiting the generality of this subsection, may be a class provided for by section 32, 36, 37, 37A or 38B but not by section 33, 34, 35, 38 or 38A)". Thus, the regulations could prescribe criteria for "special category visas", "protection visas", "bridging visas", "temporary safe haven visas" and "maritime crew visas" but not for any other statutorily created class of visas. It follows from subdiv A of Div 3 that some classes of visas were provided for by the Act; some were prescribed by regulation. And it further follows that the characteristics of and criteria for different classes of visas could be found either in the Act or in regulations or in both the Act and regulations. (The word "characteristic" is adopted here to permit a distinction to be drawn between those features of a statutorily created class of visas which were specified by the Act and the "criteria" for grant which were prescribed by regulation.) Classes of visas prescribed by regulation had all of their characteristics and all of the criteria for their grant identified by regulation. Some classes of visas provided for by the Act had all of their characteristics and all of the criteria for their grant identified by the Act. That must be so because the regulations could not prescribe criteria for the grant of those classes of visas62. And some classes 62 The classes of visas provided for by ss 33 (special purpose visas), 34 (absorbed person visas), 35 (ex-citizen visas), 38 (criminal justice visas) and 38A (enforcement visas). Hayne of visas provided for by the Act had their characteristics and some of the criteria for their grant identified by both the Act and by regulation. That must be so because the regulations could prescribe criteria for the grant of those classes of visas. Of course, any criteria prescribed by regulation could not be inconsistent with the Act63 and thus could not be inconsistent with the characteristics of the class that were identified in the Act. All of the classes of visas provided for by the Act had statutorily identified characteristics even though, for some of those classes, further criteria for their grant, not inconsistent with the Act, could be prescribed by regulation. In many cases, these statutory characteristics were found in the section creating the class. So, for example, s 36 made elaborate provision for the characteristics of protection visas and s 38B identified the central characteristic of the class of visas for which it provided by describing it as "a class of temporary visas to travel to and enter Australia by sea, and to remain in Australia, to be known as maritime crew visas". In three cases (bridging visas64, criminal justice visas65 and enforcement visas66), the relevant characteristics of the class were set out elsewhere in the Act. In some but not all cases, further criteria for the grant of one of these statutorily created classes of visas could be prescribed. But all of the statutory classes of visas had statutorily identified characteristics. The conclusion that all of the statutory classes of visas had statutorily identified characteristics is hardly surprising. The Act itself provided for some classes of visas and provided for the creation of other classes by regulation. It would be odd if provisions of the Act which created a class of visas did no more than provide a statutorily specified name for the class and left all questions of substance for prescription by regulation. If that were the desired result, why not simply create the relevant class of visas by regulation? It follows from this understanding of subdiv A of Div 3 that, in exercising the power given by s 195A(2), the Minister remained bound by those provisions of the Act which specified statutory characteristics of classes of visas. There is no basis for reading s 195A(3) as qualifying in any respect the application of those provisions of the Act. Section 195A(2) gave the Minister power to grant "a visa of a particular class". That expression directed attention67 to what the Act 64 Section 37 provided that bridging visas were "to be granted under Subdivision AF". 65 Section 38 provided that criminal justice visas were "to be granted under Subdivision D of Division 4". 66 The note to s 38A provided that "Division 4A deals with these visas". Hayne and the regulations specified as classes of visas. The expression is not to be read as if it gave the Minister power to grant "a visa of any class". Did s 37A differ from the other nine provisions of the Act which created classes of visas? That is, did s 37A have no statutory content other than to provide for the name of a class of visas which, if granted, would make the holder a lawful non-citizen and to provide for the steps which had to be taken to alter the visa's duration? Section 37A Section 37A created a class of visas. That class was described68 as the "class of temporary visas to travel to, enter and remain in Australia, to be known as temporary safe haven visas". A central, and the determinative, point of difference between the parties was whether s 37A did more than create a class of visas. In particular, did s 37A define any characteristic of the class of visas it created? to give the person temporary safe haven The note to s 37A(1) provided that a "temporary safe haven visa is granted to a person in Australia". Section 37A(3) gave the Minister power, by notice in the Gazette, to shorten the visa period of a temporary safe haven visa "if, in the Minister's opinion, temporary safe haven in Australia is no longer necessary for the holder of the visa because of changes of a fundamental, durable and stable nature in the country concerned" (emphasis added). Section 37A(4) required the Minister to cause a copy of a notice given under s 37A(3) to be laid before each House of the Parliament together with a statement of reasons "referring in particular to the Minister's reasons for thinking that changes of a fundamental, durable and stable nature have occurred in the country concerned". The expression "country concerned" was defined in s 37A(7) as "the country or countries in which the circumstances exist that give rise to the grant of temporary safe haven visas" (emphasis added). Contrary to the submissions of the Minister, s 37A cannot be read as having created a class of visas the nature and criteria for the grant of which were to be found only in regulations. Section 37A did not provide a wholly empty vessel into which may be poured the whole of its content by the prescription of criteria for the grant of visas of this class. Section 37A did more than create a class of visas; it identified defining characteristics of the class. Those characteristics were found in the name given to the class and in the Act's specification of the circumstances in which the visa period may be shortened. The visa was one which, as the note to s 37A(1) said, may be "granted to a 68 s 37A(1). Hayne person to give the person temporary safe haven in Australia". And its grant had to be occasioned by circumstances in one or more countries which made it necessary to grant the person temporary safe haven in Australia. So much is clear from the definition of "country concerned": "the country or countries in which the circumstances exist that give rise to the grant of temporary safe haven visas" (emphasis added). The kinds of circumstances that might be judged to necessitate the grant of the visa to provide temporary safe haven were not identified further in the Act. The prescribed criteria The criteria prescribed69 by the Migration Regulations 1994 (Cth) for the grant of temporary safe haven visas referred70 to persons being "displaced" from their place of residence. In the case of the Humanitarian Stay (Temporary) subclass, the prescribed criteria referred71 to the visa applicant being "in grave fear of his or her personal safety because of the circumstances in which, or reasons why" he or she has been, or is likely to be, displaced from that place of residence. the circumstances in which a person might be judged to require temporary safe haven in Australia. The criteria that were prescribed were consistent with the defining characteristics of the class of temporary safe haven visas that s 37A created. Those criteria were founded in, and served only to give more particular content to the application of, those statutorily identified defining characteristics. But it was s 37A which identified those characteristics, namely, that temporary safe haven visas were to be granted to give a person temporary safe haven in Australia when the need for safe haven was occasioned by circumstances existing in one or more other countries. identified more precisely thus It follows from this understanding of s 37A that the Minister could not grant a temporary safe haven visa under s 195A(2) except to give a person temporary safe haven in Australia when the need for safe haven was occasioned by circumstances existing in one or more other countries. The plaintiff submitted that two further statutory characteristics of a temporary safe haven visa should be identified. These submissions should be rejected. First, the plaintiff submitted that a temporary safe haven visa can only be given "in response to a humanitarian emergency". Although it may sometimes, perhaps often, be accurate to describe the grant of a visa of this class as "humanitarian", there is no textual basis in s 37A for adopting the description as one of the statutory characteristics of this class of visas. Second, the plaintiff 69 reg 2.04, Sched 2, Subclass 448 (Kosovar Safe Haven (Temporary)) and Subclass 449 (Humanitarian Stay (Temporary)). 70 Sched 2, cll 448.221(2)(b) and 449.221(2). 71 Sched 2, cl 449.221(2). Hayne submitted that a person can only apply for his or her first temporary safe haven visa (it being possible to apply for a second temporary safe haven visa72) while outside Australia. As the plaintiff pointed out, s 37A(1) described the visas with which it dealt as "visas to travel to, enter and remain in Australia". But, contrary to these submissions, that expression does not provide any characteristic of the visa that is relevant to the present dispute. Nothing turns on the reference to the visa permitting "travel to" Australia. As the Minister correctly pointed out, s 91K expressly contemplated the possibility of a further grant of a temporary safe haven visa to a person already in Australia. This aspect of s 37A(1) may be put aside from consideration in this case. Consequences Because the decision to grant the plaintiff a temporary safe haven visa was made without consideration of whether he needed temporary safe haven occasioned by circumstances existing in one or more other countries, the grant of the visa was beyond power. It is, therefore, not necessary to consider whether it was made for an improper purpose. Nor is it necessary to consider whether it would have been open to the Minister to conclude that the plaintiff (a person to whom the Department and the independent reviewer had found Australia did not owe protection obligations) required safe haven in Australia because of circumstances in his country of origin or elsewhere, or required safe haven for a period as short as seven days. The Minister submitted that, if the decision to issue a temporary safe haven visa was legally infirm, it followed that the whole decision made in respect of the plaintiff on 12 April 2012, including that aspect of it which dealt with granting the plaintiff a bridging visa, must be quashed. The plaintiff submitted that the Minister made two decisions concerning the plaintiff and that the decisions can and should be severed either by application of s 46 of the Acts Interpretation Act 1901 (Cth) or by application of principles of the general law. It is not necessary to decide whether s 46 of the Acts Interpretation Act applies to the Decision Instrument approved by the Minister. It is enough to observe that the decision recorded in the Decision Instrument was one composite decision: to effect the plaintiff's release from detention by granting him visas of two classes with identified conditions attached to one of those visas. For the reasons that have been given, that decision was legally flawed. It cannot be severed into two separate decisions without radically recasting its nature and effect. The whole of the decision relating to the plaintiff should be quashed. 72 See ss 91H and 91K. Hayne It was not suggested that quashing the 12 April 2012 decision made by the Minister in respect of the plaintiff affected in any way the subsequent grant to the plaintiff of a bridging visa. But because the decision made on 12 April 2012 was invalid, it follows that the plaintiff was not the holder of a valid visa when, on 18 September 2012, he made his application for a protection visa. It further follows that he was then an unlawful non-citizen and that, by operation of s 46A(1), his application for a protection visa was not a valid application. More fundamental issues? The conclusions that have been expressed about s 195A proceed wholly from construction of the Act according to established principles. It is important to notice, however, that, if the Act could be construed as permitting the Minister, exercising power under s 195A(2), to grant any class of visas and to do that guided only by public interest considerations, more fundamental issues may arise. This construction, which was urged by the Minister, would give the Minister a very wide power to grant visas. Section 195A applied to a person who was in detention under s 189. Section 189 requires73 the detention of any person known or suspected of being an unlawful non-citizen in the migration zone or in an excised offshore place. Section 195A could therefore apply to well-nigh every unlawful non-citizen. On the Minister's construction, the power given by s 195A was confined only by public interest considerations. Yet, as noted at the outset of these reasons, the Act records74 the Parliament's intention that the Act "be the only source of the right of non-citizens" to enter or remain in Australia. Section 195A(3) identified the only provisions of the Act which were not to bind the Minister in the exercise of power under s 195A(2). Two points may follow from these considerations. First, it is not to be supposed that s 195A(2) (or s 195A as a whole) can be read as permitting the Minister to dispense with or relieve from the application of otherwise binding provisions of the Act. But second, it may well be that any ambiguity in or uncertainty about the reach of a provision like s 195A must be resolved in a way that confines rather than expands the relevant power. Whether that is so requires close consideration of fundamental questions about the relationship between the Parliament and the Executive75. And it may be that consideration of those 73 s 189(1) and (3). Migration Legislation Amendment (Regional Processing and Other Measures) Act 2012 (Cth), s 3, Sched 1, item 12 omitted the words "may detain" in s 189(3) and substituted the words "must detain". 75 Zheng v Cai (2009) 239 CLR 446 at 455-456 [28]; [2009] HCA 52. Hayne questions would have to begin by examining the present significance of the protest recorded in The Bill of Rights (1 Will & Mar Sess 2 c 2) against the assumed "Power of Dispensing with and Suspending of Lawes and the Execution of Lawes without Consent of Parlyament" and the provisions of that Act declaring "That the pretended Power of Suspending of Laws or the Execution of Laws by Regall Authority without Consent of Parlyament is illegall" and "That the pretended Power of Dispensing with Laws or the Execution of Laws by Regall Authoritie as it hath beene assumed and exercised of late is illegall". Second, reading the Act in the manner urged by the Minister would likely require examination of some issues touched on by five members of this Court, but not decided, in Plaintiff S157/2002 v The Commonwealth76. The plurality recorded77 that, in argument in that case, the Commonwealth had suggested that the Parliament might validly delegate to the Minister "the power to exercise a totally open-ended discretion as to what aliens can and what aliens cannot come to and stay in Australia", subject only to this Court deciding any dispute as to the constitutional fact of alien status. The plurality said78 of this suggestion: "The inclusion in the Act of such provisions to the effect that, notwithstanding anything contained in the specific provisions of that statute, the Minister was empowered to make any decision respecting visas, provided it was with respect to aliens, might well be ineffective. It is well settled that the structure of the Constitution does not preclude the Parliament from authorising in wide and general terms subordinate legislation under any of the heads of its legislative power. Victorian Stevedoring and General Contracting Co Pty Ltd and Meakes v Dignan79 may be cited for that proposition. But what may be 'delegated' is the power to make laws with respect to a particular head in s 51 of the Constitution. The provisions canvassed by the Commonwealth would appear to lack that hallmark of the exercise of legislative power identified the determination of 'the content of a law as a rule of conduct or a declaration as to power, right or duty'." in The Commonwealth v Grunseit80, namely, 76 (2003) 211 CLR 476; [2003] HCA 2. 77 (2003) 211 CLR 476 at 512 [101] per Gaudron, McHugh, Gummow, Kirby and 78 (2003) 211 CLR 476 at 512-513 [102]. 79 (1931) 46 CLR 73; [1931] HCA 34. 80 (1943) 67 CLR 58 at 82; [1943] HCA 47. Hayne Having regard to the conclusions that I have set out earlier in these reasons about the construction and application of s 195A, I need not consider these more fundamental issues. Conclusion and orders The parties agreed that the costs of the special case should follow the answer that is given to the first question in the special case. For the reasons that have been given, the questions in the special case should be answered as follows: Question 1: "Was the Plaintiff validly granted the TSH Visa?" Answer: Question 2: "Is the Plaintiff's application for a protection visa a valid application?" Answer: Question 3: "Who should pay the costs of this special case?" Answer: The defendant. Introduction This special case in proceedings in the original jurisdiction of the High Court under s 75(v) of the Constitution asks questions the answers to which turn on an analysis of the scope and permitted purposes of the power conferred on the Minister for Immigration and Citizenship ("the Minister") by s 195A of the Migration Act 1958 (Cth) ("the Act") to grant "a visa of a particular class" to a person in immigration detention "[i]f the Minister thinks that it is in the public interest to do so". The questions are set out by French CJ, Crennan and Bell JJ, with whose proposed answers I agree. The answers determine as valid a Temporary Safe Haven (Class UJ subclass 449) visa ("TSH visa") and a Bridging E (Class WE subclass 050) visa ("Bridging visa") the Minister granted to the plaintiff, when in immigration detention, under s 195A of the Act in the implementation of a policy of "community placement" announced by the Minister in November 2011. Facts Community placement as announced by the Minister in November 2011 needs to be understood against the background of "mandatory detention", which had previously been the policy of successive Australian Governments. It also needs to be understood against the background of the decision of the High Court in Plaintiff M61/2010E v The Commonwealth (Offshore Processing Case)81 in November 2010. Mandatory detention has since September 2001 been underpinned in part by provisions of the Act that apply to an "offshore entry person": a person who becomes an unlawful non-citizen by entering Australia at Christmas Island or another "excised offshore place"82. Section 189(3) of the Act has the effect of requiring that an offshore entry person in an excised offshore place be taken into immigration detention. The offshore entry person must then be kept in immigration detention until the happening of an event which may be that the person is removed from Australia or may be that the person is granted a visa83. 81 (2010) 243 CLR 319; [2010] HCA 41. 82 Section 5(1) ("offshore entry person", "excised offshore place"), inserted by the Migration Amendment (Excision from Migration Zone) Act 2001 (Cth). 83 Section 196. Section 46A of the Act has the additional effect that an offshore entry person, while in Australia without a visa, is barred from making a valid application for a visa. That is so unless the Minister considers the exercise of a personal non-compellable power conferred by s 46A and, "[i]f the Minister thinks that it is in the public interest to do so", exercises that power to determine that the bar does not apply to an application by the person for a visa of a class specified by the Minister in the determination. The Offshore Processing Case concerned the nature of Refugee Status Assessment ("RSA") and Independent Merits Review ("IMR") processes implemented by the Department of Immigration and Citizenship ("the Department") following a ministerial announcement in July 2008 made in the wake of an earlier announcement by the Australian Government "that asylum claims of future unauthorised boat arrivals would be processed on Christmas Island"84. The relevant finding was that "the effect of the [July 2008] announcement was that β¦ consideration would be given to exercising the powers given by ss 46A and 195A in every case in which an offshore entry person claimed that Australia owed that person protection obligations"85. The relevant holding was86: "Because the Minister has decided to consider exercising power under either s 46A or s 195A of the [Act] in every case where an offshore entry person claims to be a person to whom Australia owes protection obligations, the RSA and IMR processes taken in respect of each plaintiff were steps taken under and for the purposes of the [Act]." The ministerial announcement in November 2011 was to the effect that some offshore entry persons would thereafter be "placed in the community on bridging visas β¦ as part of the new approach to asylum seeker management". The announcement referred to the Australian Government remaining "committed to maintaining a mandatory detention system, including using mandatory detention on Christmas Island for reception and initial checks" but having recently announced that "following initial health, security and identity checks, eligible boat arrivals who do not pose risks will be progressively considered for community placement on bridging visas while their asylum claims are assessed". The new approach referred to in the announcement is explained in more detail in an affidavit of the Minister filed for the purposes of the special case. 84 (2010) 243 CLR 319 at 342 [37]. 85 (2010) 243 CLR 319 at 350-351 [70]. 86 (2010) 243 CLR 319 at 334 [9]. The Minister's affidavit discloses that the Australian Government decided shortly before the November 2011 announcement that, from 24 March 2012, new offshore entry persons would generally be permitted (through the exercise by the Minister of power under s 46A of the Act) to lodge applications for protection visas. In relation to offshore entry persons who had made claims to protection that were the subject of RSA processes begun before 24 March 2012, the Government decided that "the existing assessment processes would continue to completion for the purpose of [the Minister's] consideration whether to exercise [his] personal public interest powers to permit such persons to lodge valid applications for protection visas". The Minister decided in light of that decision that he would consider the simultaneous grant to offshore entry persons who had made claims to protection that were the subject of RSA processes begun before 24 March 2012 of a Bridging visa and a TSH visa of short duration. His reasoning was that: "this would allow offshore entry persons to be released from detention while at the same time avoiding the consequence that they would then be able to apply for protection visas in circumstances where their protection claims had already been, or were already being, assessed through an existing process." He took the view that, where an existing process was incomplete, "that process should continue following the grant of the visas for the purpose of [his] consideration whether to exercise [his] personal public interest power under s 91L of the [Act]". The Minister's reference to avoiding the consequence that offshore entry persons released from detention would be able to apply for protection visas is a reference to the effect of s 91K of the Act. The effect of s 91K, subject to s 91L, is to bar the holder of a TSH visa (or a non-citizen who has not left Australia since ceasing to hold a TSH visa) from making a valid application for any other visa. Section 91L allows the Minister to consider the exercise of a personal non- compellable power conferred by that section and, "[i]f the Minister thinks that it is in the public interest to do so", exercise that power to determine that the bar imposed by s 91K does not apply to an application by the person for a visa made by that person within the seven working day period after notice is given. The Minister's purpose in granting Bridging visas was to allow offshore entry persons released from immigration detention to work and to access various support services and programs while living in the community until the completion of the existing RSA and IMR processes. The Minister's purpose in simultaneously granting TSH visas can be stated as follows. It was to ensure that s 91K would bar those offshore entry persons making valid applications for protection visas unless the Minister exercised the power conferred by s 91L to lift that bar. It was also to ensure that the existing RSA and IMR processes would continue in relation to those persons no longer for the purpose of the Minister considering the exercise of the powers conferred by ss 46A and 195A but for the new purpose of the Minister considering the exercise of the power conferred by s 91L. The Minister's affidavit discloses that, in an 11 month period following the November 2011 announcement, the Minister made simultaneous grants of TSH visas and Bridging visas to over 2,383 offshore entry persons all of whom were in immigration detention at the time of grant and all of whom had made claims to protection that were the subject of RSA processes begun before 24 March 2012. The plaintiff was one of 278 offshore entry persons then in immigration detention to each of whom the Minister granted a TSH visa and a Bridging visa on 12 April 2012. The plaintiff had by then been assessed under the RSA and IMR processes not to be a person to whom Australia owes protection obligations. However, the plaintiff had commenced proceedings in the Federal Magistrates Court the IMR recommendation was not made in accordance with law. Along with others in a similar position, the plaintiff was granted a TSH visa for seven days and a Bridging visa for six months and was immediately released from immigration detention. in which he sought a declaration that On 18 September 2012, the plaintiff made an application for a protection visa. By reason of the plaintiff having been the holder of a TSH visa and in the absence of an exercise of power by the Minister under s 91L to determine that the application could be made, the Department treated the application as invalid under s 91K. Arguments The plaintiff argues that the Minister did not validly exercise the power conferred by s 195A to grant the TSH visa to the plaintiff with the result that s 91K did not apply to the plaintiff's subsequent application for a protection visa. That is because the Minister acted beyond the scope of the power conferred by s 195A by ignoring statutory criteria for the grant of a TSH visa or because the Minister acted for a purpose not permitted by s 195A in granting the TSH visa to ensure that s 91K would bar the plaintiff from making a valid application for a protection visa unless the Minister exercised the power conferred by s 91L to lift that bar. A further argument that the power cannot be exercised to grant two visas simultaneously is put but faintly by the plaintiff; plainly, it can. The Minister denies that the TSH visa was invalid for any of the reasons argued by the plaintiff. But if the TSH visa was invalid, argues the Minister, so was the Bridging visa: the simultaneous grant of the two visas was the product of a single process of reasoning. If both visas were invalid, then it was not s 91K but s 46A that applied to make the plaintiff's application for a protection visa invalid. For reasons which follow, the grant of a TSH visa to the plaintiff in the implementation of the policy of community placement was within the scope of the power conferred by s 195A and was for a purpose permitted by that section. The TSH visa being valid, s 91K applied to make the plaintiff's application for a protection visa invalid. The Minister's alternative argument that the Bridging visa was invalid and that s 46A continued to apply need not be considered. Section 195A: scope Section 195A was inserted into Pt 2 of the Act in 2005 as part of a package of amendments the purpose of which was "to provide greater flexibility and transparency in the administration of the detention of persons known or to be unlawful non-citizens"87. reasonably suspected The explanatory memorandum for the amending legislation expressed an intention that the section "will be used to release a person from detention where it is not in the public interest to continue to detain them"88 and that "[i]n the exercise of this power the Minister will not be bound by the provisions of the [Act] or regulations governing application and grant requirements" and "will have the flexibility to grant any visa that is appropriate to [an] individual's circumstances"89. Section 195A is expressed to apply only to a person who is in detention under s 18990. It provides91: "If the Minister thinks that it is in the public interest to do so, the Minister may grant a person to whom this section applies a visa of a particular class (whether or not the person has applied for the visa)." 87 Australia, House of Representatives, Migration Amendment (Detention Arrangements) Bill 2005, Explanatory Memorandum at 2. 88 Australia, House of Representatives, Migration Amendment (Detention Arrangements) Bill 2005, Explanatory Memorandum at 8. 89 Australia, House of Representatives, Migration Amendment (Detention Arrangements) Bill 2005, Explanatory Memorandum at 3. 90 Section 195A(1). 91 Section 195A(2). It provides further92: "In exercising the power ... the Minister is not bound by Subdivision AA, AC or AF of Division 3 of [Pt 2] or by the regulations, but is bound by all other provisions of [the] Act." It states that the power can only be exercised by the Minister personally93, and that the Minister does not in any circumstances have a duty to consider whether to exercise the power94. It goes on to require the Minister promptly to inform each House of Parliament of the grant of a visa and of the reasons for that grant including in particular the Minister's reasons for thinking the grant to be in the public interest95. Preconditions to the exercise of the power conferred by s 195A to grant a visa of a particular class to a person who is in immigration detention are that: (a) the Minister has decided to consider whether to exercise that power and (b) the Minister, having considered whether to exercise the power, thinks that it is "in the public interest" to grant that person a visa of that particular class96. The plaintiff's argument that the Minister acted beyond the scope of the power by ignoring statutory criteria for the grant of a TSH visa raises issues as to what, if any, further preconditions to the exercise of the power conferred by s 195A arise from: (a) the power being limited to the grant of "a visa of a particular class"; and (b) the Minister "[i]n exercising the power" being "bound" by the provisions of the Act other than subdivs AA, AC and AF of Div 3 of Pt 2. The reference in s 195A to "a visa of a particular class" must be read in light of the general provisions about visas in subdiv A of Div 3 of Pt 2. In particular, the reference must be read in light of the explanations in subdiv A that a visa "is a visa of a particular class if [the] Act or the regulations specify that it is a visa of that class"97 and that, "[a]s well as" the classes prescribed by regulations made under the Act, "there are the classes provided for by 92 Section 195A(3). 93 Section 195A(5). 94 Section 195A(4). 95 Section 195A(6)-(8). 96 Plaintiff S10/2011 v Minister for Immigration and Citizenship (2012) 86 ALJR 1019 at 1039 [99(iv)]; 290 ALR 616 at 640; [2012] HCA 31. 97 Section 31(5). sections 32, 33, 34, 35, 36, 37, 37A, 38, 38A and 38B"98, all of which are located within that same subdivision. The reference makes clear that the power conferred by s 195A is only to grant a visa from within the range of existing classes for which provision is already made either in the regulations or in ss 32 to 38B of the Act. The section confers no power to grant a visa of a new class or to grant a visa that is a modified version of an existing class. The significance of the reference in s 195A to the Minister "[i]n exercising the power" being "bound" by provisions of the Act other than subdivs AA, AC and AF of Div 3 of Pt 2 is best understood by examining first the significance of the Minister not being bound in exercising the power by subdivs AA, AC and AF of Div 3 of Pt 2. The significance of the Minister not being bound by subdiv AA of Div 3 of Pt 2 in the exercise of the power conferred by s 195A is that it excludes, amongst other things, the general requirement of s 47 read in light of s 45 that the Minister must consider a valid application for a visa of a particular class and must not consider any other application for a visa. That exclusion reinforces the parenthetical statutory explanation of the power as being to grant a visa of a particular class to a person "whether or not the person has applied for the visa". The significance of the Minister not being bound by subdiv AC of Div 3 of Pt 2 in the exercise of the power conferred by s 195A is that it excludes, amongst other things, the general requirement of s 65 that, after considering a valid application for a visa of a particular class, the Minister must grant the visa if the Minister is satisfied of matters that include that "criteria for it prescribed by [the] Act or the regulations have been satisfied" and must refuse to grant the visa if not so satisfied. The similar significance of the Minister not being bound by subdiv AF of Div 3 of Pt 2 is that, in relation to the power to grant a visa within a class of "bridging visas" provided for by s 37 whether or not there has been a valid application, it excludes, amongst other things, the specific requirement of s 73 that the Minister be "satisfied that an eligible non-citizen satisfies the criteria for a bridging visa as prescribed under subsection 31(3)". Together, the exclusion of these requirements reinforces the exclusivity of the criterion set out in s 195A for the grant of a visa of a particular class: "[i]f the Minister thinks that it is in the public interest to do so". There is also significance in the circumstance that the Minister is bound in the exercise of the power conferred by s 195A by subdiv D of Div 4 of Pt 2. That subdivision includes, amongst other things, the specific requirement of 98 Section 31(2). s 159 that, in relation to the Minister's power to grant a visa within a class of "criminal justice visas" provided for by s 38 "in his or her absolute discretion", the Minister, "after considering the grant of a criminal justice visa for a non- citizen, [be] satisfied that the criteria for it have been met". Maintenance of the s 159 precondition that the Minister be satisfied of the criteria for a criminal justice visa, and of the s 159 discretion unconstrained by considerations of the public interest where that precondition is satisfied, is inconsistent with the general power of the Minister under s 195A being capable of exercise to grant a visa of that particular class simply "[i]f the Minister thinks that it is in the public interest to do so". The exception reinforces the general rule that the criterion is exclusive. Doubtless, the Minister is also bound by the provisions of subdiv A of Div 3 of Pt 2 of the Act in the exercise of the power conferred by s 195A. However, contrary to the plaintiff's argument, the terms in which ss 32, 33, 34, 35, 36, 37, 37A, 38, 38A and 38B provide for classes of visas cannot be read as independently binding the Minister to address any additional criteria in the exercise of the power conferred by s 195A. Sections 33, 34, 35 and 38A each provide for a class of visa that, apart from s 195A, is either granted or taken to be granted by force of the Act if specified circumstances exist. Sections 32, 36, 37, 37A, 38 and 38B each provide for a class of visa that can only be granted by the Minister in the exercise of a power to grant a visa of that class to be found elsewhere in the Act. Sections 32 and 36 each set out a criterion for the grant of a visa of the class for which they provide. Sections 37, 37A, 38 and 38B do not: the criteria for the grant of a visa of the class for which they provide depend on other provisions of the Act or on regulations made under the Act. The plaintiff's argument that statutory criteria for the grant of a TSH visa are to be inferred from the terms of s 37A cannot be accepted. The mere provision for "a class of temporary visas to travel to, enter and remain in Australia, to be known as temporary safe haven visas" does not imply that the holder must be out of Australia at the time of initial grant. Nor are any criteria for the grant of a visa of that class to be inferred from the power of the Minister to shorten the period of a visa of that class once granted "if, in the Minister's opinion, temporary safe haven in Australia is no longer necessary for the holder of the visa because of changes of a fundamental, durable and stable nature in the country concerned" being "the country or countries in which the circumstances exist that give rise to the grant of temporary safe haven visas". The spelling out of criteria for the grant of TSH visas is left to regulations. Be that as it may, the critical point for present purposes is that any requirement for the Minister to be satisfied of criteria as a precondition to granting visas of the classes for which provision is made by ss 32, 36, 37, 37A, 38 and 38B comes not from the terms of those sections but from the terms of the sections which confer power on the Minister to make the grants. For criminal justice visas of the class for which provision is made by s 38, the power to grant is to be found in s 159, the requirement of which for the Minister's satisfaction of the criteria for a visa of that class binds the Minister in the exercise of the power conferred by s 195A. For bridging visas of the class for which s 37 provides, the power to grant is ordinarily to be found in s 73, in which case satisfaction of criteria for the grant of a visa of that class is required. For visas of the classes for which provision is made in ss 32, 36, 37A or 38B or in regulations made under the Act, the power to grant is ordinarily to be found in s 65, in which case satisfaction of criteria for the grant of visas of those classes is also required. However, for visas of the classes for which provision is made in ss 32, 36, 37, 37A and 38B or in the regulations, the power to grant can also be found in s 195A, the terms of which make clear not only that ss 65 and 73 have no application but that the criterion for making that grant is that "the Minister thinks that it is in the public interest to do so". The "focus" of s 195A is therefore "upon the Minister's view of the public interest rather than upon the satisfaction of conditions for the issue of visas"99. Subject only to the exception of criminal justice visas, the section allows the Minister "to grant visas which might not otherwise be able to be granted because of non-satisfaction of substantive or procedural requirements"100. The reference in s 195A to the Minister not being bound by the regulations in the exercise of the power conferred by that section does not provide a basis for distinguishing between criteria prescribed by the Act (relevantly in ss 32 and 36) and criteria prescribed by regulations made under the Act. The reference to the Minister not being bound by the regulations in the exercise of the power is to be read in light of the provision the Act makes for regulations made under the Act not only to "prescribe criteria for a visa or visas of a specified class" (including a class provided for by ss 32, 36, 37, 37A or 38B)101 but also to "provide that visas or visas of a specified class may only be granted in specified circumstances"102 and to "provide that visas, or visas of a 99 Plaintiff S10/2011 v Minister for Immigration and Citizenship (2012) 86 ALJR 1019 at 1039 [99(ix)]; 290 ALR 616 at 641. 100 Plaintiff S10/2011 v Minister for Immigration and Citizenship (2012) 86 ALJR 1019 at 1027 [30]; 290 ALR 616 at 624. 101 Section 31(3). 102 Section 40(1). specified class, are subject to specified conditions"103 non-compliance with which may lead to the cancellation of a visa104. The reference to the Minister not being bound by the regulations is directed to regulations within the second of those categories. The reference makes clear that the Minister may exercise the power to grant a visa of a particular class outside and notwithstanding any circumstances that may be specified in the regulations as the only circumstances in which a visa of that particular class may be granted. The reference has nothing to do with such criteria as the regulations may prescribe for a visa or visas of a specified class: those criteria do not bind the Minister in the exercise of a power to grant a visa other than through the terms in which the power is conferred preconditioning its exercise on the Minister's satisfaction of them. Nor does the reference dispense with, or allow the Minister to dispense with, any conditions that may be prescribed by regulation for a visa of a particular class: such conditions as may be prescribed for a visa of a particular class are not conditions of the exercise of power by the Minister to grant the visa but conditions of the visa as granted. The plaintiff's argument that the Minister acted beyond the scope of the power conferred by s 195A by ignoring statutory criteria for the grant of a TSH visa is therefore to be rejected. Section 195A empowers the Minister to grant visas of the particular class for which s 37A provides, and makes the sole criterion for a grant of a visa of that class that "the Minister thinks that it is in the public interest to do so". Section 195A: permitted purposes The sole criterion for the grant of a visa of a particular class under s 195A of the Act β that "the Minister thinks that it is in the public interest to do so" β requires105: 103 Section 41(1). 104 Section 116(1)(b). 105 Plaintiff S10/2011 v Minister for Immigration and Citizenship (2012) 86 ALJR 1019 at 1027 [30]; 290 ALR 616 at 625, quoting O'Sullivan v Farrer (1989) 168 CLR 210 at 216; [1989] HCA 61. See also Plaintiff S10/2011 v Minister for Immigration and Citizenship (2012) 86 ALJR 1019 at 1039 [99(v)]; 290 ALR 616 "a discretionary value judgment to be made by reference to undefined factual matters, confined only 'in so far as the subject matter and the scope and purpose of the statutory enactments may enable ... given reasons to be [pronounced] definitely extraneous to any object the legislature could have had in view'." The plaintiff's argument that the Minister acted for a purpose not permitted by s 195A in granting the TSH visa to ensure that s 91K, subject to s 91L, would bar the plaintiff from making a valid application for a protection visa necessarily depends on characterising that purpose as "definitely extraneous to any object the legislature could have had in view" in inserting s 195A. The argument takes too narrow a view both of the place of s 195A within the scheme of the Act and of the Minister's purpose in granting a TSH visa to the plaintiff in the implementation of the policy of community placement. The Act identifies its object as being "to regulate, in the national interest, the coming into, and presence in, Australia of non-citizens"106 and explains that "[t]o advance its object" the Act "provides for visas permitting non-citizens to enter or remain in Australia"107. A visa amounts to permission for a non-citizen to enter or remain in Australia108, and the holding of a visa granted or taken to be granted by or under the Act distinguishes a lawful non-citizen from an unlawful non-citizen109. However, the plaintiff goes too far to suggest that "all the powers of the Minister to grant a visa β¦ are to be exercised only for the purpose of permitting a non-citizen to be a lawful non-citizen". The Act divides the visas that it grants or permits to be granted into particular classes. The Act then attaches different statutory consequences to the holding of visas of different classes. The attachment of different statutory consequences to the holding of visas of particular classes is the principal means by which the Act advances so much of its object as involves the regulation of the presence of non-citizens in Australia. Section 195A does not dispense with, or allow the Minister to dispense with, any statutory consequence that may attach to the holding of a visa of a particular class. The Minister, in exercising the power, must rather choose from within the available range one or more particular classes of visa with their attendant statutory consequences. The choice is one that s 195A requires to be 106 Section 4(1). 107 Section 4(2). 108 Section 29. 109 Sections 13 and 14. made by the Minister by reference to the public interest. The statutory consequences that attach to the grant of a visa of a particular class are considerations that the Minister is entitled to take into account in considering whether the Minister thinks that it is in the public interest to grant a visa of that class. In thinking that it is in the public interest to exercise the power conferred by s 195A to grant to a person in immigration detention a visa of the particular class for which s 37A provides, the Minister is therefore entitled to take into account that a statutory consequence of the grant would be that s 91K, subject to s 91L, would bar the holder from making a valid application for a protection visa when released from immigration detention. The purpose of the Minister in granting TSH visas in the implementation of the policy of community placement was not only to ensure the application of s 91K, subject to s 91L, but also to ensure that the existing RSA and IMR processes would continue for the purpose of the Minister's consideration of whether or not to exercise the power conferred by s 91L. That wider purpose of the Minister was entirely consistent with the statutory purpose of s 195A to provide flexibility and transparency in the administration of the detention of unlawful non-citizens including offshore entry persons to whom s 46A applied. In common with the powers conferred by ss 46A and 195A, exercise of the power conferred by s 91L requires the Minister to decide to consider whether to exercise the power and, having considered whether to exercise it, to think that it is "in the public interest" to exercise the power. Just as the Minister's July 2008 announcement was found in the Offshore Processing Case to involve a decision to consider whether to exercise the power conferred by ss 46A and 195A in every case in which an offshore entry person claimed that Australia owed that person protection obligations, so the Minister's November 2011 announcement involved a decision to consider (through the existing RSA and IMR processes) whether to exercise the power conferred by s 91L in every case in which an offshore entry person released from detention had made claims to protection that were the subject of RSA processes begun before 24 March There is no reason in principle why administrative processes of assessment and review begun under and for the purposes of ss 46A and 195A should not be continued under and for the purposes of s 91L. And it was entirely consistent with providing flexibility and transparency in the administration of the detention of unlawful non-citizens for the Minister to consider it to be in the public interest that protection claims that were the subject of RSA and IMR processes begun under and for the purposes of ss 46A and 195A should be continued to completion under and for the purposes of s 91L. Conclusion The Minister had power under s 195A of the Act to grant the TSH visa to the plaintiff solely by reference to the criterion that the Minister thought that it was in the public interest to do so. The Minister was entitled to take into account that a statutory consequence of the grant would be that s 91K, subject to s 91L, would bar the plaintiff from making a valid application for a protection visa. The Minister's purpose of achieving the implementation of the policy of community placement in respect of offshore entry persons who were the subject of existing RSA or IMR processes begun under s 46A and to be continued under s 91L, was a purpose permitted by s 195A. that consequence, The TSH visa and the Bridging visa were both validly granted to the plaintiff. Section 91K applied to make the plaintiff's subsequent application for a protection visa invalid. |
HIGH COURT OF AUSTRALIA Matter No M17/2015 MINISTER FOR IMMIGRATION AND BORDER PROTECTION APPELLANT AND WZAPN & ANOR RESPONDENTS Matter No P10/2015 WZARV AND APPELLANT MINISTER FOR IMMIGRATION AND BORDER PROTECTION & ANOR RESPONDENTS Minister for Immigration and Border Protection v WZAPN WZARV v Minister for Immigration and Border Protection [2015] HCA 22 17 June 2015 M17/2015 & P10/2015 ORDER Matter No M17/2015 Appeal allowed. Set aside the declaration of the Federal Court of Australia made on 3 September 2014. Set aside orders 5 and 6 of the orders of the Federal Court of Australia made on 3 September 2014 and, in their place, order that: order 2 of the orders of the Federal Magistrates Court made on 31 January 2013 be set aside; and the appeal be otherwise dismissed. The appellant is to pay the first respondent's costs of the appeal to this Court. Matter No P10/2015 Appeal dismissed with costs. On appeal from the Federal Court of Australia Representation S P Donaghue QC with L T Brown for the appellant in M17/2015 and the first respondent in P10/2015 (instructed by Australian Government Solicitor) S E J Prince with P W Bodisco for the appellant in P10/2015 (instructed by Rasan T Selliah & Associates) R M Niall QC with A F Solomon-Bridge for the first respondent in M17/2015 (instructed by Maddocks) Submitting appearances for the second respondent in both matters Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Minister for Immigration and Border Protection v WZAPN WZARV v Minister for Immigration and Border Protection Migration β Refugee status β Section 91R(1)(b) of Migration Act 1958 (Cth) provides persecution must involve "serious harm to the person" β Section 91R(2)(a) lists "threat to the person's life or liberty" as instance of serious harm β Where person faces period or periods of temporary detention β Whether that constitutes "threat to liberty" amounting to serious harm, without qualification as to severity of threat. Migration β Refugee status β Section 91R(1)(a) of Migration Act 1958 (Cth) requires Refugees Convention reason to be "essential and significant reason" for persecution β Where Federal Court held there was failure to accord procedural fairness to claimant β Whether independent merits reviewer failed to draw claimant's attention to relevant issue or information β Whether no fair opportunity to address argument that could materially affect assessment. Words and phrases β "persecution", "serious harm", "threat to life or liberty". Migration Act 1958 (Cth), ss 91R(1)(a), 91R(1)(b), 91R(2)(a). Convention relating to the Status of Refugees (1951) as amended by the Protocol relating to the Status of Refugees (1967), Art 1A(2). FRENCH CJ, KIEFEL, BELL AND KEANE JJ. In each of these two appeals from single Justices of the Federal Court of Australia, which were heard together, the claimant for a protection visa contends that he is a refugee from persecution in the country of his nationality or former habitual residence. Each will be referred to as a "claimant" in these reasons. At issue in each appeal is whether, for the purposes of s 91R of the Migration Act 1958 (Cth) ("the Act"), the likelihood of temporary detention of a person for a reason mentioned in the Refugees Convention1 is, of itself and without more, a threat to liberty within the meaning of s 91R(2)(a) of the Act. Each claimant argued that the likelihood of any detention is such a threat, and therefore an instance of serious harm for the purposes of s 91R(1)(b) of the Act, irrespective of the frequency, length or conditions of that detention and its consequences for the detainee. In the matter involving the claimant WZAPN, the Federal Court of Australia (North J) upheld2 this argument on appeal from the Federal Magistrates Court. The argument was not advanced by the claimant WZARV in the Federal Circuit Court3 nor on appeal to the Federal Court4, but special leave was granted to WZARV in order to afford him the opportunity to rely on the view taken by North J, should that view be upheld in this Court. In SZTEQ v Minister for Immigration and Border Protection5, the Full Court of the Federal Court of Australia (Robertson, Griffiths and Mortimer JJ) rejected the argument which had been upheld by North J in WZAPN. The Full Court held6 that "s 91R(2)(a) should not be construed as meaning that any deprivation of liberty constitutes serious harm for the purposes of s 91R(1)(b) 1 Convention relating to the Status of Refugees (1951) as amended by the Protocol relating to the Status of Refugees (1967). 2 WZAPN v Minister for Immigration and Border Protection [2014] FCA 947 at 3 WZARV v Minister for Immigration [2013] FCCA 1556. 4 WZARV v Minister for Immigration and Border Protection (2014) 144 ALD 82. [2015] FCAFC 39. SZTEQ v Minister for Immigration and Border Protection [2015] FCAFC 39 at Bell and Art 1A(2)" of the Convention. The Full Court was of the view7 that "'liberty' is a nuanced concept which takes its meaning from the context in which it appears, namely the requirement that the persecution involve serious harm". These appeals are not the occasion for a comprehensive consideration of what is encompassed by the phrase "a threat to liberty" in s 91R(2)(a) of the Act. The critical question is whether the likelihood of future episodes of temporary detention constitutes a threat to liberty within s 91R(2)(a) of the Act, irrespective of the circumstances and consequences of that detention for the person seeking refugee status. The text of s 91R of the Act, understood in its context, is determinative8 of this question. The decision of the Full Court in SZTEQ was correct, and North J's construction of s 91R(2)(a) in WZAPN cannot be sustained. To explain why that is so, it is convenient to begin by setting out separately the factual and procedural background to each matter, and then proceed to a consideration of the terms of s 91R and a discussion of the arguments agitated by the parties. it became) for the Federal Circuit Court (as These appeals arise out of applications in the Federal Magistrates Court and judicial review of recommendations of Independent Merits Reviewers who were part of a process established with respect to offshore entry persons to inform the exercise of the ministerial discretion under s 46A of the Act to determine whether or not an offshore entry person claiming to be a refugee may be permitted to apply for a protection visa. The nature of the process, its connection to the exercise of the ministerial statutory powers, and the way in which federal judicial review is engaged were explained in Plaintiff M61/2010E v The Commonwealth9. SZTEQ v Minister for Immigration and Border Protection [2015] FCAFC 39 at 8 Minister for Immigration and Multicultural and Indigenous Affairs v QAAH of 2004 (2006) 231 CLR 1 at 14 [33]; [2006] HCA 53; VBAO v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 233 CLR 1 at 17 [48]; [2006] HCA 60; Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at 46-47 [47]; [2009] HCA 41. (2010) 243 CLR 319; [2010] HCA 41. Bell Background β Minister for Immigration and Border Protection v WZAPN The claimant in this matter is a stateless Faili Kurd who was born in Iran, and for whom Iran is his former habitual residence. He is between 26 and 30 years of age. He arrived in Australia on 21 July 2010 as an "offshore entry person", as that expression was then defined in s 5(1) of the Act. He applied for a refugee status assessment ("RSA") and, on 27 September 2010, an RSA officer concluded that he did not qualify for refugee status. The Independent Merits Reviewer The claimant sought review of that assessment by an Independent Merits Reviewer ("IMR"). Before the IMR, the claimant's case centred on his fear of harm arising from persistent detention and interrogation at the hands of the Basij, a paramilitary force of vigilantes whose activities are tolerated by the government of Iran. One period of detention to which he had been subjected lasted for 48 hours; otherwise, the periods did not exceed 12 hours. The claimant did not claim to have been physically harmed while detained, although he suffered extreme verbal abuse. It was claimed that this treatment was due to his ethnicity and his membership of a particular social group. The detail of the claimant's treatment was summarised by the IMR: "The Basij were based in a mosque and had places for interrogation within the village, where he had been taken as much as 30 to 40 times for periods in excess of 2 hours; once for 48 hours and often for 12 hours; he was released after bribes were paid by Iranian citizen friends. He might be detained daily, weekly or monthly. Whilst he has never been physically assaulted, he has been questioned interminably about his lack of identity and the fate of his parents; he has been shouted at, sworn at and called a 'bitch', which he finds particularly offensive. He was given no food or water. He was taken by car and made to walk back. This could be by either the police or the Basiji." On 10 August 2011, the IMR recommended that the claimant not be recognised as a person to whom Australia owes protection obligations under the Convention. The IMR did not accept that the claimant faced serious harm should he return to Iran. The IMR found that: "[T]here is a real chance that the claimant will be questioned periodically, and probably detained for short periods when he fails to produce identification, in the reasonably foreseeable future should he return to Iran, but having regard to the guidance provided by s 91R(2)(a), (b) and/or Bell (c), I do not accept that the frequency or length of detention, or the treatment he will receive whilst in detention will involve serious harm within the meaning of the Act." Having so found, the IMR went on to conclude that, even if the risk of future detention did involve a real chance of the claimant suffering "serious harm", that harm would not be "for the essential and significant reason of a convention ground" as required by s 91R(1)(a). This conclusion was set aside10 by North J in favour of the claimant on the basis that it was attended by a failure to accord the claimant procedural fairness. It is convenient to refer in more detail to this aspect of the IMR's decision in the course of the discussion of that issue later in these reasons. The Federal Magistrates Court The claimant applied, under s 476 of the Act, for an injunction against the Minister and his officers to restrain them from acting upon the recommendation of the IMR, arguing, among other things, that the IMR had misapplied s 91R(2)(a) of the Act. The claimant argued that no additional requirements or considerations as to the quality of the detention should have been added to the assessment of whether a person's liberty was threatened. Lucev FM held11 that the IMR's construction of s 91R(2)(a) of the Act was correct, and that the recommendations were not affected by jurisdictional error. The claimant also argued that the correct characterisation of the group to which he belongs is "undocumented Faili Kurds living in Iran". Lucev FM held12 that it was immaterial whether the IMR erred in recommending that the claimant was not a member of a particular social group for the purposes of the Convention because even if "undocumented Faili Kurds living in Iran" were a particular social group for the purposes of the Convention, any harm that the claimant fears upon return to Iran would be a consequence of laws of general application in relation to undocumented persons, whether Faili Kurd or not. 10 WZAPN v Minister for Immigration and Border Protection [2014] FCA 947 at 11 WZAPN v Minister for Immigration [2013] FMCA 6 at [84]. 12 WZAPN v Minister for Immigration [2013] FMCA 6 at [109]. Bell The Federal Court The claimant sought an extension of time within which to appeal to the Federal Court from the decision of the Federal Magistrates Court. North J granted the extension and allowed the appeal instanter. His Honour upheld13 the claimant's contention that Lucev FM had erred in failing to hold that the IMR had applied the wrong test to determine whether the claimant was at risk of serious harm within the meaning of s 91R(1)(b) and (2)(a) of the Act. In addition, his Honour held14 that the IMR had failed to afford the claimant procedural fairness in relation to the consideration of s 91R(1)(a) of the Act. As to the first ground, North J said15: "The conclusion from the language and structure of s 91R(2) is that serious harm in s 91R(1)(b) is constituted by a threat to life or liberty, without reference to the severity of the consequences to life or liberty." His Honour's reasoning16 proceeded on the footing that the interpretation of s 91R(2)(a) is informed by international human rights standards, so that a decision-maker must ask "whether the deprivation [of liberty] was on grounds and in accordance with procedures established by law, whether the detention was arbitrary, and whether the applicant was treated with humanity and respect for the inherent dignity of the person."17 13 WZAPN v Minister for Immigration and Border Protection [2014] FCA 947 at 14 WZAPN v Minister for Immigration and Border Protection [2014] FCA 947 at 15 WZAPN v Minister for Immigration and Border Protection [2014] FCA 947 at 16 WZAPN v Minister for Immigration and Border Protection [2014] FCA 947 at 17 WZAPN v Minister for Immigration and Border Protection [2014] FCA 947 at Bell North J went on to conclude18: "In taking the human rights approach, there is no place for a qualitative assessment of detention affecting the right to liberty for it to constitute an infringement of that right. By making a qualitative assessment of the nature and degree of the harm experienced by the applicant when asking whether the threat to the applicant's liberty was sufficiently significant, the reviewer in the present case applied the wrong test in the application of s 91R(2)(a), and thereby fell into jurisdictional error." As to the procedural fairness ground, his Honour held19 that the IMR's alternative conclusion, that any serious harm was not for the essential and significant reason of a Convention ground, was vitiated by a failure to afford the claimant procedural fairness. The basis for this conclusion will be discussed later in these reasons. In the upshot, North J allowed the appeal and declared that the IMR made jurisdictional errors "by failing to apply the correct test to determine whether the applicant was at risk of serious harm", and "by failing to accord the applicant procedural fairness in the consideration whether s 91R(1)(a) of the β¦ Act applied in this case." The Minister appealed to this Court pursuant to special leave granted by Hayne and Nettle JJ on 13 February 2015. Both grounds on which North J decided the case against the Minister were challenged. Background β WZARV v Minister for Immigration and Border Protection In this matter, the following summary of the factual background is drawn from the judgment of McKerracher J in the Federal Court of Australia20. 18 WZAPN v Minister for Immigration and Border Protection [2014] FCA 947 at 19 WZAPN v Minister for Immigration and Border Protection [2014] FCA 947 at 20 WZARV v Minister for Immigration and Border Protection (2014) 144 ALD 82. Bell The claimant is a Sri Lankan citizen who entered Australia by boat and was taken to Christmas Island on 7 November 2010. On 12 December 2010, the appellant had an entry interview. Later, he applied for an RSA. In the course of the entry interview, the claimant claimed that he was of Tamil ethnicity, born in the Northern Province of Sri Lanka in 1985. He claimed that he was forced to do one day's training with the Liberation Tigers of Tamil Eelam ("LTTE") in 2008. He also claimed that he was injured in a bomb blast later that year. In 2009, he worked as a security guard for the United Nations High Commissioner for Refugees ("UNHCR"). In 2010, he was employed by a non-governmental organisation ("NGO"), the Swiss Foundation for Mine Action, to remove land mines. The claimant claimed that he was detained by the Sri Lankan Army ("SLA") in 2009, but that his father managed to pay a bribe in order to secure his release. He also claimed that he was apprehended while waiting at a bus shelter on 10 June 2010, detained and beaten. He claimed that, after this detention, SLA officers came to his house on a number of occasions asking for him. An RSA officer interviewed the claimant in relation to his claims on 26 January 2011. The RSA officer did not accept the claimant's account of the events that led to his departure from Sri Lanka, and so was not satisfied that the claimant was a person to whom Australia owed protection obligations. On 21 April 2011, the claimant was informed that he had been assessed as not meeting the Convention definition of a refugee. The Independent Merits Reviewer On 10 May 2011, the claimant applied to have the decision of the RSA officer reviewed by an IMR. By letter dated 21 September 2012, the IMR recommended that the claimant was not a person to whom Australia owed protection obligations. The IMR found that the claimant did not have a profile that indicated he would be suspected of being an LTTE supporter. The IMR was satisfied that there was only a remote chance that the claimant would face harm as a result of his Tamil ethnicity, work for NGOs or training with the LTTE, and that there was no indication that he was at risk of "significant harm". Relevantly for present purposes, the IMR accepted, based on country information, that it was likely the claimant would be interviewed by Sri Lankan authorities at the airport upon his return, but that it is usual for such questioning to be completed in a matter of hours. Bell The Federal Circuit Court The claimant sought judicial review of the IMR's recommendation in the Federal Circuit Court. The claimant was not represented on the hearing of his application. On 14 October 2013, Judge Burchardt rejected21 the claimant's application, holding that the IMR's reasoning was open on the facts. The Federal Court The claimant appealed the decision of Judge Burchardt to the Federal Court. On 22 August 2014, McKerracher J dismissed his appeal. Three grounds of appeal were raised, but none of those grounds is presently relevant. The judgment of McKerracher J was delivered before the judgment of North J in WZAPN. After the judgment in WZAPN had been delivered, the claimant sought special leave to appeal to this Court on the ground that, on North J's construction of s 91R(2)(a) of the Act, the IMR had failed properly to apply s 91R(2)(a) of the Act in his case. On this basis, the claimant was granted special leave to appeal on 24 February 2015 by Hayne and Nettle JJ. The claimant argued that because he will be subject to detention upon arrival in Sri Lanka, and thus deprived of his liberty for a time, the IMR's decision is affected by error in its finding that the claimant would face no "serious harm" upon return to Sri Lanka. The Act and the Refugees Convention The arguments agitated by the parties in this Court are best understood after reference to the material provisions of the Act and the relevant provision of the Convention. Section 36(2) of the Act, which deals with the grant of protection visas, provides that a criterion for the grant of a protection visa is that the applicant is a non-citizen "to whom β¦ Australia has protection obligations under the Refugees Convention". 21 WZARV v Minister for Immigration [2013] FCCA 1556 at [75]. Bell Article 1A(2) of the Convention applies to any person who: "owing to well-founded fear of being persecuted for reasons of race, religion, nationality, membership of a particular social group or political opinion, is outside the country of his nationality and is unable or, owing to such fear, is unwilling to avail himself of the protection of that country; or who, not having a nationality and being outside the country of his former habitual residence, is unable or, owing to such fear, is unwilling to return to it." Section 91R of the Act relevantly states: "(1) For the purposes of the application of this Act and the regulations to a particular person, Article 1A(2) of the Refugees Convention as amended by the Refugees Protocol does not apply in relation to persecution for one or more of the reasons mentioned in that Article unless: that reason is the essential and significant reason, or those reasons are the essential and significant reasons, for the persecution; and the persecution involves serious harm to the person; and the persecution involves systematic and discriminatory conduct. (2) Without limiting what is serious harm for the purposes of paragraph (1)(b), the following are instances of serious harm for the purposes of that paragraph: a threat to the person's life or liberty; significant physical harassment of the person; significant physical ill-treatment of the person; significant economic hardship that threatens the person's capacity to subsist; denial of access to basic services, where the denial threatens the person's capacity to subsist; Bell denial of capacity to earn a livelihood of any kind, where the denial threatens the person's capacity to subsist." It is noteworthy that the language in which each of the conditions in s 91R(1) is expressed calls for a qualitative judgment in order to determine whether it is satisfied in any given case. Thus par (a) speaks of "the essential and significant reason ... for the persecution", par (b) speaks of "serious harm", and par (c) speaks of "systematic and discriminatory conduct." It is also to be noted that s 91R(2) sets out a non-exhaustive list of instances of serious harm "for the purposes" of s 91R(1)(b). The claimants' arguments The claimants' arguments in relation to s 91R may now be considered. While there were some differences in the arguments presented on behalf of each of the claimants, there was a degree of overlap so that for the sake of coherent discussion it is convenient to refer particularly to the arguments articulated on behalf of WZAPN that reflected the position common to each claimant. The substantial point of difference between the claimants was that counsel for WZAPN sought to distance the case made on behalf of his client from the factual circumstances of WZARV's case. Counsel for WZAPN, in urging that there is a meaningful difference between the two cases, was disposed to accept that restrictions on movement in terms of passport control at an airport do not involve a loss of liberty. Counsel for WZARV sought to deal with what he identified in oral argument as the "potential for absurdity" if even the most anodyne restriction of a person's freedom of movement were to be regarded as a loss of liberty amounting to persecution, by pointing to the conditions in s 91R(1) other than s 91R(1)(b) as "mechanisms by which the absurdity of results of a strict approach to liberty β¦ can be avoided." This attempt to avoid the acknowledged potential for absurdity cannot avail the claimant. As the text of s 91R(1) of the Act indicates, it is the existence of persecution under Art 1A(2) of the Convention that is the "premise for the engagement"22 of s 91R. Accordingly, even if a well-founded fear of persecution might otherwise be said to be established in terms of Art 1A(2) of the Convention, Art 1A(2) is nevertheless taken not to apply unless each of the three 22 SZWAU v Minister for Immigration and Border Protection [2015] HCATrans 002 at line 714. Bell conditions specified in s 91R(1) is met. Absent a positive conclusion that each of the conditions following the word "unless" is satisfied, a claimant will fail in his or her claim for protection under the Act. The condition stated in s 91R(1)(b) that the persecution feared by a claimant involves "serious harm to the person" must be satisfied. It is convenient to deal with the other arguments advanced on behalf of the claimants in relation to s 91R(2)(a) by reference to considerations of text and context. Textual considerations It has already been noted that each of the conditions in s 91R(1) requires the making of a qualitative judgment. The application of s 91R(2)(a) for the purposes of s 91R(1)(b) also requires a qualitative judgment, involving the assessment of matters of fact and degree. In VBAO v Minister for Immigration and Multicultural and Indigenous Affairs23, Gleeson CJ and Kirby J explained that "threat" in s 91R(2)(a) of the Act refers to "likelihood of harm" so that "[t]he decision-maker is required to consider future persecution that involves serious harm, and one instance of such serious harm is a threat to life or liberty. The decision-maker is to decide the risk of future harm". Because not all risks involve the same degree of likelihood or the same level of apprehended harm, the task of the decision-maker under s 91R(2)(a) involves making an assessment of the risk of future harm to a person. In that assessment, the decision-maker may be required to balance the likelihood of harm to the person against the gravity of the feared harm to the person should likelihood become fact. The claimants argued that the text of s 91R(2)(a) indicates that no such evaluative exercise is required because a threat to liberty is to be regarded, of itself and without more, as an instance of serious harm. WZAPN argued that "threat to liberty" means the risk of a loss of liberty. Further, it was said that the collocation in s 91R(2)(a) of a threat to liberty and a threat to life is an indication that the risk of a loss of liberty is serious harm because it is placed on the same level of seriousness of harm as a threat of the loss of life. These contentions do not advance the claimants' position. The claimants' argument speaks of a loss of liberty as meaning any intrusion upon a person's freedom, but to say that s 91R(2)(a) speaks of a risk of the loss of liberty is also apt to evoke a contrast between the loss of liberty in a 23 (2006) 233 CLR 1 at 4-5 [1]-[3]. Bell comprehensive sense and a temporary diminution in the enjoyment of some aspect of liberty. In addition, to say that s 91R(2)(a) places a threat of a loss of a person's liberty on the same level of serious harm as a threat to a person's life is to offer encouragement to the conclusion that the risk in each case is of a comprehensive and catastrophic loss: the loss of human life in one case, and the loss of liberty in the sense of the independent human autonomy that makes life worth living in the other. That conclusion would be fatal to the case advanced by the claimants because on no view could the harassment that each fears be characterised as a loss of liberty in the sense of a catastrophic destruction of his autonomy as a human being. But it is not necessary to accept that conclusion in order to reject these aspects of the claimants' argument. In particular, it is not necessary to conclude that a loss of liberty for the purposes of s 91R(2)(a) is the catastrophic loss of all, or substantially all, of those aspects of free human agency which may collectively be referred to as liberty. If it is accepted that the reference to loss of liberty in s 91R(2)(a) is not to a catastrophic loss of all the aspects of human autonomy but to a loss of some such aspect, as the claimants urge, then it is also necessary to accept that some losses of liberty have more serious consequences for the person affected than others. To resolve the question before the Court, it is enough to say, in light of the collocation of threats to life and liberty in s 91R(2)(a), that the question of whether a risk of the loss of liberty constitutes "serious harm" for the purposes of s 91R(1)(b) requires a qualitative judgment. This qualitative judgment will include an evaluation of the nature and gravity of the loss of liberty. Whether the likelihood of detention in any case rises to the level of serious harm instanced by s 91R(2)(a) is a question which invites a consideration of the circumstances and consequences of that detention. The circumstances of likely detention identified by the claimant in WZARV serve to highlight the dissonance between the collocation of threats to life and liberty in s 91R(2)(a) and the construction of the paragraph on which the claimants' arguments depend. As has been seen, WZARV seeks to base his claim for refugee status on the likelihood that he will be detained for some hours upon his arrival at the airport of his country of nationality. A decision-maker required to apply s 91R(2)(a) would be entitled to regard detention at an airport for an hour or two as not being a loss of liberty of the same level of seriousness as the loss of a human life. Counsel for WZARV was right to perceive that it borders on the absurd to suggest otherwise. WZAPN argued that, whereas the other paragraphs of s 91R(2) include a qualitative element, a threat to liberty is provided in s 91R(2)(a) as an instance of Bell serious harm irrespective of qualitative considerations. It was said that a "threat" to liberty, without more, is sufficient to constitute serious harm. Moreover, s 91R(2) is an inclusive definition of "serious harm" designed to enlarge the ordinary meaning of the words, and the expression "threat to liberty" should not be read down by reference to "serious harm". It was said that to require a "significant" threat to liberty, as the IMR did, would be contrary to this approach. The first difficulty with this aspect of the argument for the claimants is that s 91R(2) does not purport to define the term "serious harm to the person". This is not a case which engages the proposition for which this Court's decisions in Wacal Developments Pty Ltd v Realty Developments Pty Ltd24 and Owners of "Shin Kobe Maru" v Empire Shipping Co Inc25 stand as authority, that it is impermissible "to construe the words of a definition by reference to the term defined"26. Section 91R(2) does not seek to define "serious harm"; rather, it provides instances of the serious harm referred to in s 91R(1)(b) by way of an aid in its application. It is true that s 91R(2)(a) does not contain a qualifying adjective, such as "significant", but, like the other provisions of s 91R(2), it provides guidance towards the determination of whether the persecution which the person claims to fear involves serious harm for the purposes of s 91R(1)(b). As Crennan J, when a judge of the Federal Court of Australia, said in VBAS v Minister for Immigration and Multicultural and Indigenous Affairs27: "Subsections 91R(1)(b) and (2) do not replace the test of 'persecution' with a test of 'serious harm'; rather, those provisions require an applicant to have a well-founded fear of persecution involving serious harm." (emphasis in original) 24 (1978) 140 CLR 503; [1978] HCA 30. 25 (1994) 181 CLR 404; [1994] HCA 54. 26 Owners of "Shin Kobe Maru" v Empire Shipping Co Inc (1994) 181 CLR 404 at 27 (2005) 141 FCR 435 at 442 [18]. Bell These observations were referred to with evident approval by Gleeson CJ and Kirby J in VBAO28. They accord with the view of Gummow J in the same case29, where his Honour said, in an illuminating passage: "It is trite to observe that the six paras (a)-(f) of s 91R(2) should be considered together; they all take their colour from the specification of 'serious harm' in the opening words of the sub-section. That phrase in turn may be traced to judicial statements such as that of Mason CJ in Chan to which reference has been made. His Honour also used the adjective 'significant' to describe a detriment or disadvantage which answers the description of persecution. The phrase 'a threat' to life or freedom was used in Chan by Dawson J. The term 'significant' qualifies the physical harassment, physical ill-treatment and economic hardship spoken of in paras (b), (c) and (d) of s 91R(2). The consequence of an action or state of affairs spoken of in paras (d), (e) and (f) must be one which 'threatens the person's capacity to subsist'. This reading of the whole of the text of s 91R(2) suggests that no less an element of comparable gravity is involved in the stipulation of a threat to the life or liberty of the person in question. More is required than a possibility which is capable of instilling a fear of danger to life or liberty." (footnotes omitted) that s 91R(2)(b) is also noteworthy lists "significant physical harassment" as an instance of serious harm. Temporary detentions of a person fall naturally within the description of physical harassment, and so readily within s 91R(2)(b). Because that is so, it is unnecessary to engage in the awkward shoehorning of cases of harassment involving episodes of temporary detention into s 91R(2)(a) in order to give effect to Australia's obligations under the Convention. Moreover, to treat any detention as falling within s 91R(2)(a) rather than s 91R(2)(b) would deprive s 91R(2)(b) of much of the operation it could be expected to have. Further, a determination whether temporary detention amounts to significant physical harassment obviously requires a decision-maker to consider the gravity and frequency of the incidents in which harassment is said to have occurred: that task is indisputably one of fact and degree. It may be said in a given case that the risk of physical harassment involving detention is so severe as to be properly described as a threat to the life or liberty of a person. But to say 28 (2006) 233 CLR 1 at 5 [3]. 29 (2006) 233 CLR 1 at 9 [19]-[20]. Bell that is to acknowledge, emphatically, that the question is a matter of fact and degree dependent upon the circumstances of the detention. Considerations derived from the context in which s 91R emerged, and is required to operate, support the conclusion that the application of s 91R(2)(a) for the purposes of s 91R(1)(b) requires an evaluation of the likely circumstances of the loss of liberty feared by the claimant. Contextual considerations Australian decisions on the Refugees Convention As was said in Minister for Immigration and Multicultural and Indigenous Affairs v QAAH of 200430 by Gummow ACJ, Callinan, Heydon and Crennan JJ: "Australian courts will endeavour to adopt a construction of the Act β¦ if that construction is available, which conforms to the Convention." WZAPN argued that s 91R is drawn from earlier judicial statements in relation to the Convention to the effect that a threat to liberty is per se serious harm. It is true that, as Gummow J noted in VBAO31, s 91R may be traced to dicta in Chan v Minister for Immigration and Ethnic Affairs32, where Dawson J said "there is general acceptance that a threat to life or freedom for a Convention reason amounts to persecution". But it does not assist the claimants to point to these dicta because they do not resolve the question as to what is meant by a threat to freedom in this context. In particular, and importantly, Dawson J's observations do not suggest that the circumstances and consequences of a threat to freedom are irrelevant to whether the threat amounts to persecution. In Chan, Mason CJ said33: "Obviously harm or the threat of harm as part of a course of selective harassment of a person, whether individually or as a member of a group subjected to such harassment by reason of membership of the group, amounts to persecution if done for a Convention reason. The denial of 30 (2006) 231 CLR 1 at 15 [34]. 31 (2006) 233 CLR 1 at 9 [19]. 32 (1989) 169 CLR 379 at 399; [1989] HCA 62. 33 (1989) 169 CLR 379 at 388. Bell fundamental rights or freedoms otherwise enjoyed by nationals of the country concerned may constitute such harm, although I would not wish to express an opinion on the question whether any deprivation of a freedom in a democratic society would constitute traditionally guaranteed persecution if undertaken for a Convention reason." (emphasis in original) Those observations do not support the claimants' argument. At the highest for the claimants, Mason CJ treated the question whether any deprivation of liberty would constitute persecution as an open question. His Honour went on to say34: "Discrimination which involves interrogation, detention or exile to a place remote from one's place of residence under penalty of imprisonment for escape or for return to one's place of residence amounts prima facie to persecution unless the actions are so explained that they bear another character." It is far from clear that his Honour was speaking in this passage of the interruption of ordinary life by episodes of temporary detention, rather than of the kind of conditions to be encountered in the Gulag. In Minister for Immigration and Multicultural Affairs v Haji Ibrahim35, "The Convention protects persons from persecution, not discrimination. Nor does the infliction of harm for a Convention reason always involve persecution. Much will depend on the form and extent of the harm. Torture, beatings or unjustifiable imprisonment, if carried out for a Convention reason, will invariably constitute persecution for the purpose of the Convention. But the infliction of many forms of economic harm and the interference with many civil rights may not reach the standard of persecution. Similarly, while persecution always involves the notion of selective harassment or pursuit, selective harassment or pursuit may not be so intensive, repetitive or prolonged that it can be described as persecution." 34 (1989) 169 CLR 379 at 390. 35 (2000) 204 CLR 1 at 18-19 [55]; [2000] HCA 55. Bell WZAPN seized upon the reference by McHugh J to "unjustifiable imprisonment" as support for the view that any episode of harassment involving temporary detention invariably constitutes persecution for the purposes of the Convention. But the context in which McHugh J made this remark, and his Honour's observations made subsequently in Appellant S395/2002 v Minister for Immigration and Multicultural Affairs36, make it clear that his Honour was not speaking of brief periods of temporary detention, but of arbitrary imprisonment the circumstances of which are such as to warrant the conclusion that it is intolerable. As McHugh and Kirby JJ said in Appellant S39537: "Whatever form the harm takes, it will constitute persecution only if, by reason of its intensity or duration, the person persecuted cannot reasonably be expected to tolerate it." Their Honours also said38 that, in addressing the question whether a person had a well-founded fear of persecution, it was necessary to consider, among other things: the extent to which, if at all, the individual will encounter the harm feared; the nature, severity and likely repetitiveness of the harm feared; the extent to which the individual can be expected to tolerate the harm without leaving or refusing to return to the country of nationality." (footnote omitted) International jurisprudence As the construction of s 91R may be informed by Art 1A(2) of the Convention, so may the meaning of the Convention be illuminated by consideration of the views of the courts of other countries in respect of the notion of persecution in the Convention. 36 (2003) 216 CLR 473; [2003] HCA 71. 37 (2003) 216 CLR 473 at 489 [40]. 38 (2003) 216 CLR 473 at 486 [31]. Bell In Islam v Secretary of State for the Home Department39, Lord Hoffmann stated that "[t]he Convention is about persecution, a well founded fear of serious harm", and Lord Millett stated40 that "[t]he denial of human rights ... is not the same as persecution, which involves the infliction of serious harm." Reference may also be made to decisions of courts of the United States and Canada, which hold that a short period of detention does not constitute persecution under the Convention. In Vasili v Holder41, the United States Court of Appeals for the First Circuit held that detention of a short duration which is not accompanied by other forms of harm does not "rise to the level" of (Minister of Citizenship and persecution. Immigration)42, the Federal Court of Canada stated that it is "generally true" that short periods of detention will not constitute persecution, and concluded that it is necessary to consider any special circumstances (in particular in that case, the applicant's age). In Velluppillai v Canada Academic writings WZAPN argued that there is a "scholarly consensus" that a threat to life or liberty per se amounts to persecution under the Convention because of the special importance which the rights to life and liberty enjoy under the Convention. In particular, it was said that North J was right to take a human rights based approach to construing the Convention, as suggested by this scholarly consensus. There is no scholarly consensus that Art 1A(2) of the Convention does not require an evaluation of the circumstances and consequences of apprehended detention in order to determine whether it amounts to persecution. For example, Professor Goodwin-Gill has stated43 that "persecution is ... very much a question 39 [1999] 2 AC 629 at 655. 40 [1999] 2 AC 629 at 660. 41 732 F 3d 83 at 89-90 (2013). 42 [2000] FCJ No 301 at [15]. 43 Goodwin-Gill, "Entry and Exclusion of Refugees: The Obligations of States and the Protection Function of the Office of the United Nations High Commissioner for Refugees", (1982) 3 Michigan Yearbook of International Legal Studies 291 at 298. Bell of degree and proportion". That view is quite inconsistent with the conclusion that a qualitative assessment of the risk of likely harm is irrelevant. Given the reliance by North J44 on Professors Hathaway and Foster in The Law of Refugee Status45 as being supportive of his Honour's human rights approach, it is also pertinent to note that those learned authors46 accept that the circumstances and consequences of the violation of a human rights norm are indeed relevant to whether a case of persecution is made out: "[I]nternational human rights law not only allows, but actually requires, careful scrutiny of particularized circumstances. β¦ [C]ourts relying on human rights norms to identify serious harm for refugee law purposes have appropriately insisted, for example, that personal attributes such as 'age and frailty' may have an impact on the seriousness of harm". (footnote omitted) In SZTEQ, the Full Court of the Federal Court reviewed47 the academic writings on this issue, and identified a divergence, rather than a consensus, of "In our view, it is unnecessary for the purposes of this appeal to choose between the competing academic approaches to the analysis of what kind of conduct may constitute 'being persecuted' for the purposes of Art 1A. Whether or not the preferable analysis is to measure it against human rights norms, the point of referring to this approach in some detail here is to put beyond doubt that, on any view, the evaluation of whether what a person claims to fear is 'serious harm' will be a question of fact and degree, often complicated and quite specific to the individual concerned, and involving consideration of domestic and international justifications for 44 WZAPN v Minister for Immigration and Border Protection [2014] FCA 947 at 45 2nd ed (2014) at 193-208, 239. 46 Hathaway and Foster, The Law of Refugee Status, 2nd ed (2014) at 198. 47 SZTEQ v Minister for Immigration and Border Protection [2015] FCAFC 39 at 48 SZTEQ v Minister for Immigration and Border Protection [2015] FCAFC 39 at Bell interference with, and limits placed on, the enjoyment of human rights in a particular country of nationality." The Refugees Convention and the Act Section 91R was not enacted to expand the scope of Australia's protection obligations beyond those undertaken by it under the Convention. In VBAO, Callinan and Heydon JJ said49 that s 91R is a "manifestation of a statutory intent to define persecution, and therefore serious harm, in strict and perhaps narrower terms than an unqualified reading of [Art 1A(2)] might otherwise require", and that it was enacted to "raise the threshold of what can properly amount to 'serious harm', within the spirit of the Refugees Convention."50 It is significant in this regard that the Explanatory Memorandum accompanying the Bill that became the relevant amending Act (the Migration Legislation Amendment Act (No 6) 2001 (Cth)) stated51 that the intention of s 91R(2) is to identify for protection only those people who "have a well founded fear of harm which is so serious that they cannot return to their country of nationality". Nothing in the Explanatory Memorandum suggests that detention considered apart from the severity of its circumstances for the person concerned might qualify as serious harm for the purpose of establishing a well-founded fear of persecution. Section 91R is concerned, as is Art 1A(2) of the Convention, not simply with the violation of rights, but also with the seriousness of the harm suffered by a person as a result of the violation. That is consistent with the approach taken in the case law relating to the Convention to which reference has been made. As Professor Hathaway has said, modern refugee law rejects a human rights based model in favour of a narrower focus52. McHugh J explained that narrower focus 49 (2006) 233 CLR 1 at 17 [49]. 50 (2006) 233 CLR 1 at 14 [40] citing Minister for Immigration and Multicultural and Indigenous Affairs v VBAO (2004) 139 FCR 405 at 411 [35]-[38]. 51 Australia, Senate, Migration Legislation Amendment Bill (No 6) 2001, Revised Explanatory Memorandum at 9 [25]. 52 Hathaway, "A Reconsideration of the Underlying Premise of Refugee Law", (1990) 31 Harvard International Law Journal 129 at 148-151 cited in Minister for Immigration and Multicultural Affairs v Haji Ibrahim (2000) 204 CLR 1 at 47-48 Bell in Minister for Immigration and Multicultural Affairs v Respondents "In the Convention β¦ the notion of persecution is not at large. Either expressly or by necessary implication or inference, the Convention controls and narrows the meaning of persecution for its purposes. β¦ It is not to be supposed that the Convention required signatory States to give asylum to persons who were persecuted for a Convention reason but who were unlikely to suffer serious infringement of their rights as human beings. Thus, for the purpose of the Convention, the feared harm will constitute persecution only if it is so oppressive that the individual cannot be expected to tolerate it so that refusal to return to the country of the applicant's nationality is the understandable choice of that person54." Summary It is persecution, involving serious harm inflicted by the violation of fundamental rights and freedoms, from which the Convention and s 91R of the Act are concerned to provide asylum. Both the Convention and s 91R of the Act embody an approach which is concerned with the effects of actions upon persons in terms of harm to them. That approach is not engaged automatically upon the demonstration of any breach, or apprehended breach, of human rights in their country of nationality or former habitual residence. Is the IMR's decision in WZAPN vitiated by a breach of procedural fairness? As noted above, the IMR concluded that WZAPN did not qualify for refugee status on the alternative basis that his circumstances did not meet the requirement in s 91R(1)(a). It was argued that North J was correct to hold that the IMR's finding that the harm apprehended by WZAPN was not persecution for a Convention reason is vitiated by a want of procedural fairness. The question that arises immediately is whether there is any utility in this argument. The conclusion that North J erred in his view of s 91R(2)(a) means that the claimant's application for refugee status was bound to fail however the s 91R(1)(a) issue might be resolved. In other words, even if the procedural 53 (2004) 222 CLR 1 at 26 [73]; [2004] HCA 18. 54 Minister for Immigration and Multicultural Affairs v Haji Ibrahim (2000) 204 CLR Bell fairness ground of the challenge to the IMR's decision were upheld, the claimant would nevertheless fail to establish his claim to refugee status55. WZAPN sought to meet this difficulty by arguing that the want of procedural fairness about which he complains infected the IMR's conclusion on the serious harm issue. It was also said that acceptance of his contentions on this aspect of the case would have utility in that it would serve to sustain the declaration made by North J as to the failure of the IMR to accord the claimant procedural fairness. These arguments are not compelling. North J set aside the IMR's conclusion in relation to s 91R(1)(a) on the basis of his Honour's understanding of the following passage in the reasons of the IMR: "Furthermore, even if I accepted the questioning, detention and abuse there is a real chance the claimant will be subjected to, is sufficiently significant to amount to serious harm (which I do not); I am not satisfied it will be for the essential and significant reason of a convention ground. Country information indicates that State and de-facto authorities such as the Basij will stop and question people indiscriminately. Detention will follow if the person stopped is suspected of being involved in any illegal or immoral activity or otherwise presents some threat to State security. The inability to provide identification papers will attract further enquiries, but I do not consider such questioning and detention as described by the claimant to be persecutory, as I do not consider it to be discriminatory for a Convention reason. Even if people without identification papers could be regarded as a particular social group (which I do not accept), I do not consider such questioning and detention to be inappropriate in the sense discussed by the High Court in Applicant S v MIMA56." On a fair reading of these reasons, it is apparent that the IMR concluded that any harassment that WZAPN might suffer would not be discriminatory conduct directed at him as a result of his membership of a particular social group. 55 WZAPN v Minister for Immigration and Border Protection [2014] FCA 947 at 56 (2004) 217 CLR 387; [2004] HCA 25. Bell North J concluded57 that WZAPN was denied procedural fairness because the IMR failed to draw WZAPN's attention to the issue adverted to in the last sentence of this excerpt from the IMR's reasons. But that issue was one which required resolution only if it were found, contrary to the IMR's express conclusion in the preceding sentence, that WZAPN was at risk of discriminatory conduct because he is a member of a particular social group. That issue would arise on the basis that even discriminatory conduct for a reason specified by the Convention will not be within the Convention if it is justified by a local law which can be said to be appropriate and adapted to achieving some legitimate national objective58. The conclusion of North J that the IMR did not afford the claimant a fair opportunity to address that argument fixed upon the IMR's reference to this Court's decision in Applicant S v Minister for Immigration and Multicultural Affairs. In that case, Gleeson CJ, Gummow and Kirby JJ said59: "The criteria for the determination of whether a law or policy that results in discriminatory treatment actually amounts to persecution were articulated by McHugh J in Applicant A. His Honour said that the question of whether the discriminatory treatment of persons of a particular race, religion, nationality or political persuasion or who are members of a particular social group constitutes persecution for that reason ultimately depends on whether that treatment is 'appropriate and adapted to achieving some legitimate object of the country [concerned]'60." The passage cited from Applicant S makes it clear that an inquiry into whether a law or policy is "appropriate" to some legitimate object of the country concerned is relevant only once it is concluded that the law or policy results in discriminatory treatment for a reason specified by the Convention. The IMR had not reached that conclusion. Indeed, he had concluded to the contrary. Accordingly, the IMR's reference to Applicant S did not warrant an attribution to the IMR of an error in deciding the case on the basis of the determination of a relevant issue of which the claimant had no notice. 57 WZAPN v Minister for Immigration and Border Protection [2014] FCA 947 at 58 WZAPN v Minister for Immigration and Border Protection [2014] FCA 947 at 59 (2004) 217 CLR 387 at 402 [43]. 60 Applicant A v Minister for Immigration and Ethnic Affairs (1997) 190 CLR 225 at 258; [1997] HCA 4. Bell The additional observation made by the IMR in the last sentence of the excerpt of his reasons was additional to, and in no way necessary to, his conclusion in respect of the issue under s 91R(1)(a). In SZBYR v Minister for Immigration and Citizenship61, it was accepted that procedural unfairness in relation to one basis for a decision may infect an alternative basis for that decision; this is not such a case. Here the IMR's additional observation did not materially affect his assessment of whether the treatment of the claimant amounted to "serious harm". It was truly inconsequential. The IMR's decision to reject the claimant's claim to refugee status was not affected by any want of procedural fairness; and so this aspect of WZAPN's appeal fails. Conclusion and orders In Matter No M17 of 2015, involving the claimant WZAPN, the appeal to this Court should be allowed. The declaration made by the Federal Court on 3 September 2014 should be set aside. Orders 5 and 6 made on that date (which allowed the appeal from Lucev FM and set aside his Honour's orders) should be set aside, except in so far as order 6 sets aside Lucev FM's order as to costs, and the appeal to the Federal Court should be otherwise dismissed. In accordance with a condition of the grant of special leave, the Minister must pay WZAPN's reasonable costs of the appeal to this Court. In Matter No P10 of 2015, involving the claimant WZARV, the appeal to this Court should be dismissed with costs. 61 (2007) 81 ALJR 1190 at 1198 [29]; 235 ALR 609 at 618-619; [2007] HCA 26. Special leave to appeal was granted in these two cases to enable this Court to consider the correctness of the construction of s 91R(2)(a) of the Migration Act 1958 (Cth) ("the Act") adopted by North J, who alone constituted the Full Court of the Federal Court62, in one of them63. Two events later occurred. The first in time was that an enlarged bench of the Full Court of the Federal Court (Robertson, Griffiths and Mortimer JJ) overruled North J in the course of deciding another case64. The second in time was that the Parliament repealed s 91R65. Notwithstanding those events, the appeals remain appropriate for consideration by this Court. That is because the question of construction which formerly arose under s 91R(2)(a) of the Act continues to arise under the newly enacted s 5J(5)(a) of the Act66, and because that question is important to Australian implementation of the Convention relating to the Status of Refugees (1951) as amended by the Protocol relating to the Status of Refugees (1967) ("the Refugees Convention"). The statutory language which gives rise to the question of construction occurs in the context of the statutory prescription of a precondition to a person meeting the definition of a "refugee" within Art 1A(2) of the Refugees Convention as that definition has been interpreted by the Parliament and implemented in the Act. The particular precondition is that the "persecution" feared by the person must involve "serious harm to the person"67. The statutory language in question specifies "a threat to the person's life or liberty" as the first of six "instances" of that "serious harm"68. The other specified instances are "significant physical harassment of the person"69, 62 Section 25(1AA)(a) of the Federal Court of Australia Act 1976 (Cth). 63 WZAPN v Minister for Immigration and Border Protection [2014] FCA 947. 64 SZTEQ v Minister for Immigration and Border Protection [2015] FCAFC 39 at 65 Item 12 of Sched 5 to the Migration and Maritime Powers Legislation Amendment (Resolving the Asylum Legacy Caseload) Act 2014 (Cth). 66 Inserted by item 7 of Sched 5 to the Migration and Maritime Powers Legislation Amendment (Resolving the Asylum Legacy Caseload) Act 2014 (Cth). 67 Section 91R(1)(b). See now s 5J(4)(b). 68 Section 91R(2)(a). See now s 5J(5)(a). 69 Section 91R(2)(b). See now s 5J(5)(b). "significant physical ill-treatment of the person"70, "significant economic hardship that threatens the person's capacity to subsist"71, "denial of access to basic services, where the denial threatens the person's capacity to subsist"72, and "denial of capacity to earn a livelihood of any kind, where the denial threatens the person's capacity to subsist"73. The prescription of that precondition was explained at the time of its introduction in 200174 to be part of a package of amendments designed to "restore" the application of the Refugees Convention in Australia "to its proper interpretation"75, against the background of "[c]laims of persecution hav[ing] been determined by Australian courts to fall within the scope of the Refugees Convention even though the harm feared fell short of the level of harm accepted by the parties to the Convention to constitute persecution"76. The language of "serious harm", like the language of "real risk"77, derives from the classic explanation of Art 1A(2) of the Refugees Convention by Mason CJ in Chan v Minister for Immigration and Ethnic Affairs78. Mason CJ "When the Convention makes provision for the recognition of the refugee status of a person who is, owing to a well-founded fear of being 70 Section 91R(2)(c). See now s 5J(5)(c). 71 Section 91R(2)(d). See now s 5J(5)(d). 72 Section 91R(2)(e). See now s 5J(5)(e). 73 Section 91R(2)(f). See now s 5J(5)(f). 74 By item 5 of Sched 1 to the Migration Legislation Amendment Act (No 6) 2001 (Cth). 75 Australia, Senate, Migration Legislation Amendment Bill (No 6) 2001, Revised Explanatory Memorandum at 2 [1]. See also Australia, House of Representatives, Parliamentary Debates (Hansard), 28 August 2001 at 30421. 76 Australia, Senate, Migration Legislation Amendment Bill (No 6) 2001, Revised Explanatory Memorandum at 8 [19]. 77 See s 36 of the Act. 78 (1989) 169 CLR 379; [1989] HCA 62. 79 (1989) 169 CLR 379 at 388. See also Minister for Immigration and Ethnic Affairs v Guo (1997) 191 CLR 559 at 570; [1997] HCA 22. persecuted for a Convention reason, unwilling to return to the country of his nationality, the Convention necessarily contemplates that there is a real chance that the applicant will suffer some serious punishment or penalty or some significant detriment or disadvantage if he returns." "The denial of fundamental rights or freedoms otherwise enjoyed by nationals of the country concerned may constitute such harm, although I would not wish to express an opinion on the question whether any deprivation of a freedom traditionally guaranteed in a democratic society would constitute persecution if undertaken for a Convention reason." Subsequently, in Minister for Immigration and Multicultural Affairs v Haji Ibrahim81, McHugh J linked the requisite seriousness of the harm feared by a putative refugee to what he identified as the principal rationale of the Refugees Convention. The parties to the Convention, he said, "should be understood as agreeing to give refuge to a person when, but only when, he or she 'is outside the country of his [or her] nationality and is unable or, owing to such [well-founded] fear, is unwilling to avail himself [or herself] of the protection of that country'"82. Acknowledging the probable impossibility of framing an exhaustive definition of persecution for the purpose of the Convention, McHugh J explained it to be consistent with that identified rationale to understand persecution ordinarily to involve conduct which, amongst other things, both: (1) "constitutes an interference with the basic human rights or dignity of [a] person"; and (2) "is so oppressive or likely to be repeated or maintained that the person threatened cannot be expected to tolerate it, so that flight from, or refusal to return to, that country is the understandable choice of the individual concerned"83. The particular determination by an Australian court which the Parliament sought to address by introducing the statutory precondition for serious harm 80 (1989) 169 CLR 379 at 388 (emphasis in original). 81 (2000) 204 CLR 1; [2000] HCA 55. 82 (2000) 204 CLR 1 at 21 [64], quoting in part Art 1A(2) of the Refugees Convention (emphasis in original). (2000) 204 CLR 1 at 21 [65]. See also Appellant S395/2002 v Minister for Immigration and Multicultural Affairs (2003) 216 CLR 473 at 486 [31]; [2003] HCA 71; Minister for Immigration and Multicultural Affairs v Respondents S152/2003 (2004) 222 CLR 1 at 26 [73]; [2004] HCA 18; HJ (Iran) v Home Secretary [2011] 1 AC 596 at 621 [12]. appears to have been a decision of the Full Court of the Federal Court in 200084, which was treated by a single judge of the Federal Court in 2001 as authority binding him to accept a proposition which he acknowledged to be inconsistent with the explanation given by McHugh J in Haji Ibrahim85. The proposition was that: "unjustifiable and discriminatory conduct, officially tolerated, directed at an applicant by reason of his race is persecution unless the impact of that conduct on the applicant is trivial or insignificant"86. The introduction of the statutory precondition of serious harm in 2001 can be seen in light of that history to have been a deliberate legislative return to the concept of persecution as expounded by Mason CJ in Chan and as elaborated by McHugh J in Haji Ibrahim. The six instances of serious harm specified in the Act can be seen in that light together to constitute a non-exhaustive list of instances in which, consistently with that exposition and elaboration, an interference with basic human rights or dignity will have the requisite degree of severity. The critical statutory language of "a threat to the person's life or liberty" is reminiscent of the references in Arts 31 and 33 of the Refugees Convention to a territory or territories in which the "life or freedom" of a refugee has been or would be "threatened". There has been controversy as to the extent to which that language in Arts 31 and 33 can be taken to bear on the content of the reference in Art 1A(2) to a "well-founded fear of being persecuted"87. It is unnecessary to enter into that controversy save to note general acceptance by those engaged in it that the language of Arts 31 and 33 is appropriate to express at least the minimum content of the definition in Art 1A(2). That common ground was noted by Dawson J in Chan88 and continues to be acknowledged in the discussion 84 Gersten v Minister for Immigration and Multicultural Affairs [2000] FCA 855 at [45]-[48], approving Kanagasabai v Minister for Immigration and Multicultural Affairs [1999] FCA 205 at [27]. 85 Kord v Minister for Immigration & Multicultural Affairs [2001] FCA 1163 at [35], overruled in Minister for Immigration and Multicultural and Indigenous Affairs v Kord (2002) 125 FCR 68. 86 [2001] FCA 1163 at [36]. 87 See generally Grahl-Madsen, The Status of Refugees in International Law, (1966), vol 1 at 193-197; Zimmermann (ed), The 1951 Convention Relating to the Status of Refugees and its 1967 Protocol: A Commentary, (2011) at 1387-1389. 88 (1989) 169 CLR 379 at 399. See also Minister for Immigration and Ethnic Affairs v Guo (1997) 191 CLR 559 at 570. of the concept of persecution in the United Nations High Commissioner for Refugees' Handbook89. There is an important similarity between the critical statutory language and the language in Arts 31 and 33. There is also an important difference. The important similarity lies in the common invocation of the notion of a threat. The existence of a threat or of danger is a question of degree. Answering that question involves evaluation of not only the probability of an occurrence but also the severity of the consequence of such an occurrence. The important difference lies in the statutory use of the word "liberty", in contrast to the use of the word "freedom" in Arts 31 and 33. Against the background of the prominence given in the Preamble to the Refugees Convention to the Universal Declaration of Human Rights (1948) and to the principle that "human beings shall enjoy freedoms without fundamental discrimination", the statutory reference to liberty can be seen to reflect a deliberate legislative choice to refer to a threat not to freedom at large but to the specific fundamental human right to liberty of the person. That fundamental human right is spelt out in Art 3 of the Universal Declaration of Human Rights and also in Art 9 of the International Covenant on Civil and Political Rights (1966). In that latter context, it has been explained90: rights and "All human rights ultimately serve the realization of human freedom, even when, in accordance with their object and purpose, they may be assigned differing dimensions of liberty. Liberty of person, on the other hand, relates only to a very specific aspect of human liberty: the freedom of bodily movement in the narrowest sense. An interference with personal liberty results only from the forceful detention of a person at a certain, narrowly bounded location". Recognition of the statutory reference to a threat to liberty as a reference to a threat to the fundamental human right to liberty provides guidance in evaluating the quality of a constraint on bodily movement necessary to amount to an interference with liberty91. To avoid that label, a constraint on bodily 89 United Nations High Commissioner for Refugees, Handbook and Guidelines on Procedures and Criteria for Determining Refugee Status under the 1951 Convention and the 1967 Protocol Relating to the Status of Refugees, (2011) at 13 90 Nowak, UN Covenant on Civil and Political Rights: CCPR Commentary, (1993) at 160 (emphasis in original; footnote omitted). 91 Cf Hathaway and Foster, The Law of Refugee Status, 2nd ed (2014) at 239-240. movement would ordinarily need: to occur "on such grounds and in accordance with such procedure[s] as are established by law"92; to not be "arbitrary"93; and to involve the person constrained being "treated with humanity and with respect for the inherent dignity of the human person"94. Yet the question remains as to the extent of the interference with a person's liberty that is necessary in order to amount to a threat to the person's liberty in the relevant sense. A recent commentary on Art 1A(2) of the Refugees Convention, which the Full Court of the Federal Court has quoted with agreement95, observed: that "both refugee law and human rights law make clear that it is only if violations of human rights attain a sufficient severity or disproportionality that they amount to persecution or ill treatment"; that "[n]ot every violation of human rights will have equally serious consequences for different individuals"; and that "[t]here is broad acceptance of the need for the human rights approach to be applied contextually"96. The same commentary went on to conclude, in terms with which I agree: that, in the context of the Refugees Convention, persecution and protection are interdependent; and that persecution in that context is best understood in terms of "severe violations of international law norms, in particular international human rights norms"97. Those conclusions are wholly consistent with the concept of persecution as expounded by Mason CJ in Chan and as elaborated by McHugh J in Haji Ibrahim. "It is trite to observe", as Gummow J put it in VBAO v Minister for Immigration and Multicultural and Indigenous Affairs98, that the six specified instances of serious harm "all take their colour" precisely from the circumstance that they all happen to be specified as instances of the serious harm necessarily to be feared by a person if that person is to meet the definition of a refugee in Art 1A(2) of the Refugees Convention as that definition has been translated into 92 Article 9(1) of the International Covenant on Civil and Political Rights (1966). 93 Article 9(1) of the International Covenant on Civil and Political Rights (1966). 94 Article 10(1) of the International Covenant on Civil and Political Rights (1966). 95 SZTEQ v Minister for Immigration and Border Protection [2015] FCAFC 39 at 96 Storey, "Persecution: Towards a Working Definition", in Chetail and Bauloz (eds), Research Handbook on International Law and Migration, (2014) 459 at 476. 97 Storey, "Persecution: Towards a Working Definition", in Chetail and Bauloz (eds), Research Handbook on International Law and Migration, (2014) 459 at 517. 98 (2006) 233 CLR 1; [2006] HCA 60. the Act99. Gummow J concluded that the reference to a threat to the person's liberty is appropriately read, in the context of defining one of those instances of serious harm, as a reference to a threat of at least "comparable gravity" with the other five specified instances of serious harm100. I agree. Each of the specified instances of serious harm is to be read as referring to a category of detriment or disadvantage of a severity that the person threatened cannot be expected to tolerate. The problem with the construction adopted by North J was not the adoption of a human rights standard for the purpose of determining whether a putative constraint on the freedom of bodily movement of a person would amount to an interference with liberty. The problem lay rather in treating that approach as leaving no place for a qualitative assessment of the nature and degree of that interference with liberty. With these additional observations, I agree with the reasons for judgment of French CJ, Kiefel, Bell and Keane JJ. 99 (2006) 233 CLR 1 at 9 [19]. 100 (2006) 233 CLR 1 at 9 [20]. |
HIGH COURT OF AUSTRALIA Matter No A28/2015 APPELLANT AND THE QUEEN Matter No A22/2015 RESPONDENT APPLICANT AND THE QUEEN Matter No A17/2015 RESPONDENT JOHNAS JEROME PRESLEY APPLICANT AND THE DIRECTOR OF PUBLIC PROSECUTIONS FOR THE STATE OF SOUTH AUSTRALIA RESPONDENT Miller v The Queen Smith v The Queen Presley v Director of Public Prosecutions (SA) [2016] HCA 30 24 August 2016 A28/2015, A22/2015 & A17/2015 ORDER Matter No A28/2015 Appeal allowed. Set aside the order of the Court of Criminal Appeal of the Supreme Court of South Australia made on 28 April 2015. Remit the matter to the Court of Criminal Appeal for determination. Matters No A22/2015 and No A17/2015 Special leave to appeal granted. Appeal treated as instituted and heard instanter and allowed. Set aside the order of the Court of Criminal Appeal of the Supreme Court of South Australia made on 28 April 2015. Remit the matter to the Court of Criminal Appeal for determination. On appeal from the Supreme Court of South Australia Representation D M J Bennett QC and A L Tokley SC with G N E Aitken for the appellant in A28/2015 (instructed by Noblet & Co) T A Game SC with K G Handshin for the applicant in A22/2015 (instructed by Legal Services Commission) M E Shaw QC with B J Doyle for the applicant in A17/2015 (instructed by Old Port Chambers) W J Abraham QC with J D Williams and E O Brown for the respondent in each matter (instructed by Director of Public Prosecutions (SA)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Miller v The Queen Smith v The Queen Presley v Director of Public Prosecutions (SA) Criminal law β Criminal liability β Complicity β Extended joint criminal enterprise liability β Where appellants and fourth man involved in violent altercation, during which fourth man fatally stabbed victim β Where appellants tried with fourth man for murder β Where bases on which murder left to jury included extended joint criminal enterprise β Whether liability for murder on basis of extended joint criminal enterprise should have been left to jury β Whether extended joint criminal enterprise proper basis for conviction of murder. Criminal law β Appeal β Where appeal against conviction on ground jury verdict unreasonable or cannot be supported having regard to evidence β Where evidence appellants intoxicated β Whether Court of Criminal Appeal of Supreme Court of South Australia reviewed sufficiency of evidence. Criminal law β Criminal liability β Complicity β Extended joint criminal enterprise β Consideration of McAuliffe v The Queen (1995) 183 CLR 108; [1995] HCA 37 in light of R v Jogee [2016] 2 WLR 681; [2016] 2 All ER 1 β Whether doctrine of extended joint criminal enterprise liability should be confined or abandoned. High Court β Stare decisis β Whether McAuliffe v The Queen (1995) 183 CLR 108 should be reopened and overruled. Words and phrases β "accessorial liability", "common purpose", "complicity", "extended common purpose", "extended joint criminal enterprise", "joint criminal enterprise", "review of sufficiency of evidence", "unreasonable verdict", "verdict not supported by the evidence". FRENCH CJ, KIEFEL, BELL, NETTLE AND GORDON JJ. In this matter, the Court is asked to review the doctrine of complicity in the criminal law known as "extended common purpose" or "extended joint criminal enterprise" enunciated in McAuliffe v The Queen1 and abandon or confine it. Although of general application, the doctrine is commonly invoked, as here, as a means of establishing the secondary offender's liability for murder. In this context, the doctrine holds that a person is guilty of murder where he or she is a party to an agreement to commit a crime and foresees that death or really serious bodily injury might be occasioned by a co-venturer acting with murderous intention and he or she, with that awareness, continues to participate in the agreed criminal enterprise2. The doctrine has been criticised for being inconsistent with the principles of accessorial liability3 and for being incongruous in light of the mental element of reckless murder4. More generally, the criticism is of "over-criminalising": attaching criminal liability to the secondary offender in circumstances in which his or her moral culpability is suggested not to justify that liability5. These criticisms were invoked in support of an application to re-open and overrule McAuliffe in Clayton v The Queen6. By majority, the Court declined to do so. Among the majority's reasons for that refusal was the observation that principles (1995) 183 CLR 108; [1995] HCA 37. 2 McAuliffe v The Queen (1995) 183 CLR 108; Gillard v The Queen (2003) 219 CLR 1; [2003] HCA 64; Clayton v The Queen (2006) 81 ALJR 439; 231 ALR 500; [2006] HCA 58; R v Taufahema (2007) 228 CLR 232; [2007] HCA 11. 3 Giorgianni v The Queen (1985) 156 CLR 473; [1985] HCA 29. 4 R v Crabbe (1985) 156 CLR 464; [1985] HCA 22. 5 See the articles collected in Clayton v The Queen (2006) 81 ALJR 439 at 458 [98] fn 119 per Kirby J; 231 ALR 500 at 524. See also Hayes and Feld, "Is the Test for Extended Common Purpose Over-extended?", (2009) 4 University of New England Law Journal 17; McNamara, "A Judicial Contribution to Over-criminalisation?: Extended Joint Criminal Enterprise Liability for Murder", (2014) 38 Criminal Law Journal 104. (2006) 81 ALJR 439 at 458 [98] per Kirby J; 231 ALR 500 at 524. Bell Nettle Gordon consistent with McAuliffe form part of the common law in other countries7. These principles are commonly traced to the decision of the Privy Council in Chan Wing-Siu v The Queen8. Recently, the Supreme Court of the United Kingdom and the Privy Council in R v Jogee; Ruddock v The Queen ("Jogee") held that the common law took a "wrong turn" in Chan Wing-Siu and that there is no place for extended joint criminal enterprise liability in the law9. Jogee makes it appropriate to reconsider McAuliffe; however, for the reasons to be given, the principle of extended joint criminal enterprise liability stated in McAuliffe should remain part of the common law of Australia. Liability as a secondary party to a joint criminal enterprise "Common purpose", "common design", "concert" and "joint criminal enterprise" are expressions variously used in the Australian jurisdictions to describe one means of establishing the complicity of the secondary party in the commission of a crime10. The expression "joint criminal enterprise" is used in South Australia and it is the expression that generally will be used in these reasons. The law, as stated in McAuliffe, is that a joint criminal enterprise comes into being when two or more persons agree to commit a crime. The existence of the agreement need not be express and may be an inference from the parties' conduct. If the crime that is the object of the enterprise is committed while the agreement remains on foot, all the parties to the agreement are equally guilty, regardless of the part that each has played in the conduct that constitutes the actus reus11. Each party is also guilty of any other crime ("the incidental crime") (2006) 81 ALJR 439 at 443 [18] per Gleeson CJ, Gummow, Hayne, Callinan, Heydon and Crennan JJ; 231 ALR 500 at 505. 9 R v Jogee [2016] 2 WLR 681 at 705 [87] per Lord Hughes and Lord Toulson (Lord Neuberger, Lady Hale and Lord Thomas agreeing); [2016] 2 All ER 1 at 25. 10 McAuliffe v The Queen (1995) 183 CLR 108 at 113 per Brennan CJ, Deane, Dawson, Toohey and Gummow JJ. 11 McAuliffe v The Queen (1995) 183 CLR 108 at 114 per Brennan CJ, Deane, Dawson, Toohey and Gummow JJ; Johns v The Queen (1980) 143 CLR 108; [1980] HCA 3; Macklin, Murphy and Others' Case (1838) 2 Lew CC 225 per Alderson B [168 ER 1136]. Bell Nettle Gordon committed by a co-venturer that is within the scope of the agreement ("joint criminal enterprise" liability). An incidental crime is within the scope of the agreement if the parties contemplate its commission as a possible incident of the execution of their agreement. Moreover, a party to a joint criminal enterprise who foresees, but does not agree to, the commission of the incidental crime in the course of carrying out the agreement and who, with that awareness, continues to participate in the enterprise is liable for the incidental offence ("extended joint criminal enterprise" liability). The expression used in Jogee to describe extended joint criminal enterprise liability is "parasitic accessory liability"12. The expression was coined by Professor JC Smith in an influential article on accessorial liability13. Professor JC Smith observed that liability for a crime not intentionally assisted and encouraged by the secondary party, but merely foreseen by him, was not an innovation by the Privy Council in Chan Wing-Siu: the rule imposing liability for offences committed in the course of committing the offence which the secondary party assists or encourages is long-standing14. History In the mid-18th century, Foster described the liability of the accessory before the fact for the incidental crime committed by the principal in this way15: "[I]f in the event the felony committed was a probable consequence of what was ordered or advised, the person giving such orders or advice will be an accessary to that felony." 12 [2016] 2 WLR 681 at 685 [2] per Lord Hughes and Lord Toulson (Lord Neuberger, Lady Hale and Lord Thomas agreeing); [2016] 2 All ER 1 at 6. 13 JC Smith, "Criminal Liability of Accessories: Law and Law Reform", (1997) 113 Law Quarterly Review 453 at 455. 14 JC Smith, "Criminal Liability of Accessories: Law and Law Reform", (1997) 113 Law Quarterly Review 453 at 456-457, referring to authoritative text writers Foster, Russell and Stephen. 15 Foster, Discourses on Crown Law, 3rd ed (1809) at 370. Bell Nettle Gordon Among Foster's illustrations of the proposition was the following16: "A adviseth B to rob C, he doth rob him, and in so doing, either upon resistance made, or to conceal the fact, or upon any other motive operating at the time of the robbery, killeth him. A is accessary to this murder." The statement appeared in the part of the Discourses dealing with accessories before the fact. Nonetheless, it would seem the rule applied equally to aiders and abettors17. As Professor JC Smith has observed, it is difficult to suppose that Foster thought a party who would have been liable if he had stayed away would not be liable if he "turned up to bear a hand should he be needed"18. In light of modern notions of criminal responsibility, the objective test has been replaced by one that focuses on the subjective state of mind of the secondary participant. The wrong turn in the law that Jogee held the Privy Council took in Chan Wing-Siu was the substitution of foresight as the subjective counterpart to Foster's objective probable consequences test. Their Lordships in Jogee held that the proper subjective element of liability is intention19: the secondary party must intend by his or her participation in the joint criminal enterprise to assist the principal to commit the incidental offence. Where that offence requires specific intention, the secondary party must intend that the principal act with that specific intention. The paradigm case of joint criminal enterprise liability is where the parties agree to commit a robbery and, in the course of carrying out their plan, one of them kills the intended victim with the requisite intention for murder. Applying the principles of joint criminal enterprise liability explained in Johns v The Queen, the secondary party is equally liable if the parties foresaw murder as a 16 Foster, Discourses on Crown Law, 3rd ed (1809) at 370. 17 See KJM Smith, A Modern Treatise on the Law of Criminal Complicity, (1991) at 18 JC Smith, "Criminal Liability of Accessories: Law and Law Reform", (1997) 113 Law Quarterly Review 453 at 456. 19 [2016] 2 WLR 681 at 702 [73] per Lord Hughes and Lord Toulson (Lord Neuberger, Lady Hale and Lord Thomas agreeing); [2016] 2 All ER 1 at 22- Bell Nettle Gordon possible incident of carrying out the agreed plan20. It can be seen that the rejection of foresight as a sufficient mental element would affect the foundation of joint criminal enterprise liability generally in Australian law. Jogee addresses the paradigm case of joint criminal enterprise liability by the adoption of the concept of "conditional intent": the parties may have hoped to carry out their planned robbery without violence but the prosecution must establish it was their intention, in the event the need arose, that a party would administer violence with The conclusion in Jogee reflects considerations of policy to which it will be necessary to return. It also reflects an analysis of a line of 19th century decisions which evidenced a shift from the objective probable consequences test, to the requirement that the incidental offence form part of the parties' common purpose should the occasion arise22. Of critical importance to their Lordships' reasoning is that Chan Wing-Siu did not refer to two English decisions, R v Smith (Wesley) and Reid, in which it was held that a party to an unlawful attack, in which the principal acts with murderous intent not shared by the party, is guilty of manslaughter and not murder23. Professor KJM Smith traces the history of the development of the doctrine of common purpose in his Modern Treatise on the Law of Criminal Complicity. He observes of the shift from the objective test for liability to some form of subjective requirement that no tolerably clear authoritative principle emerges from the case law24. He instances the division in judicial opinion as to the 20 (1980) 143 CLR 108. 21 [2016] 2 WLR 681 at 707 [94] per Lord Hughes and Lord Toulson (Lord Neuberger, Lady Hale and Lord Thomas agreeing); [2016] 2 All ER 1 at 27. 22 [2016] 2 WLR 681 at 689 [21] per Lord Hughes and Lord Toulson (Lord Neuberger, Lady Hale and Lord Thomas agreeing); [2016] 2 All ER 1 at 10. 23 [2016] 2 WLR 681 at 691 [27] per Lord Hughes and Lord Toulson (Lord Neuberger, Lady Hale and Lord Thomas agreeing); [2016] 2 All ER 1 at 12, citing, among others, R v Smith (Wesley) [1963] 1 WLR 1200; [1963] 3 All ER 597; Reid (1975) 62 Cr App R 109. 24 KJM Smith, A Modern Treatise on the Law of Criminal Complicity, (1991) at 210-211; see Matters of the Crown Happening at Salop (1553) 1 Plowd 97 [75 ER 152]; Mansell and Herbert's Case (1556) 2 Dyer 128b [73 ER 279]; Trial of Lord Mohun (1692) Holt KB 479 [90 ER 1164]; Ashton's Case (1698) 12 Mod 256 [88 (Footnote continues on next page) Bell Nettle Gordon responsibility of an accessory for the violence of a confederate in carrying out a robbery: some decisions hold the accessory liable for any action performed in pursuance of the common purpose, while others require evidence of a common design to execute the common purpose with all necessary force25. He suggests that the imposition of liability on the secondary party for the acts of the principal which, although outside the common design, were carried out in its pursuance and were objectively foreseeable was the subject of some controversy in the 19th century. He points to the absence of reference to the objective probable consequences test in the editions of Russell under the editorship of Charles Greaves26. It remains that the 1877 edition, under the editorship of Samuel Prentice, concluded the section on common purpose with this summary27: "It is submitted that the true rule of law is, that where several persons engage in the pursuit of a common unlawful object, and one of them does an act which the others ought to have known was not improbable to happen in the course of pursuing such common unlawful object, all are guilty." This statement of the law was reproduced in successive editions of Russell until 195828. In 1877, Stephen's Digest of the Criminal Law stated the law, consistently with Foster, in Article 41 under the heading "where crime committed is probable consequence of crime suggested"29: ER 1304]; R v Wallis (1703) 1 Salk 334 [91 ER 294]; R v Edmeads (1828) 3 Car & P 390 [172 ER 469]; R v Cooper (1846) 8 QB 533 [115 ER 976]; cf R v Hodgson (1730) 1 Leach 6 [168 ER 105]; R v White and Richardson (1806) Russ & Ry 99 [168 ER 704]; R v Collison (1831) 4 Car & P 565 [172 ER 827]; R v Franz (1861) 2 F & F 580 [175 ER 1195]. 25 KJM Smith, A Modern Treatise on the Law of Criminal Complicity, (1991) at 211. 26 KJM Smith, A Modern Treatise on the Law of Criminal Complicity, (1991) at 211. 27 KJM Smith, A Modern Treatise on the Law of Criminal Complicity, (1991) at 211-212, referring to Prentice, Russell on Crime, 5th ed (1877), vol 1 at 164. 28 Turner, Russell on Crime, 11th ed (1958) at 152-153. 29 Stephen, A Digest of the Criminal Law, (1877) at 25-26. Bell Nettle Gordon "If a person instigates another to commit a crime, and the person so instigated commits a crime different from the one which he was instigated to commit, but likely to be caused by such instigation, the instigator is an accessory before the fact." Stephen's second illustration of the operation of the principle stated in Article 41 was30: "A instigates B to rob C, B does so, C resists and B kills C. A is accessory before the fact to the murder of C." Stephen's statement of the law has been influential in this country. The 1879 Criminal Code (Indictable Offences) Bill (UK), largely his work, proposed the imposition of liability for any offence committed in pursuance of the parties' common purpose which "ought to have been known to be a probable consequence of the prosecution of such common purpose"31. This statement was taken by Sir Samuel Griffith to reflect the common law at the close of the 19th century when he came to draft the Criminal Code (Q). It remains in s 8 of the Criminal Code (Q) and in the Criminal Codes of Western Australia32 and Tasmania33. The appellants submit that Stephen's statement of the principles was not a correct reflection of the law as it stood in the latter part of the 19th century. The submission was not developed but may be understood as based on the decisions collected in Jogee which form part of the second of the two streams of judicial opinion identified by Professor KJM Smith. The cases are not easy to reconcile. As late as 1930, there are decisions in England, and in this country, in which the conclusion of liability of a secondary party for murder or infliction of grievous bodily harm with intent committed by the principal in the course of carrying out a planned robbery reveals more than a trace of Foster's objective test34. 30 Stephen, A Digest of the Criminal Law, (1877) at 26. 31 Criminal Code (Indictable Offences) Bill 1879 (UK), s 71. 32 Criminal Code (WA), s 8. 33 Criminal Code (Tas), s 4. 34 Betts and Ridley (1930) 22 Cr App R 148 at 155-156 per Avory J (delivering the judgment of the Court); R v Kalinowski (1930) 31 SR (NSW) 377 at 380 per (Footnote continues on next page) Bell Nettle Gordon Johns It was against this background that the Court of Criminal Appeal of the Supreme Court of New South Wales considered the liability of the accessory before the fact to a robbery for the murder of the intended victim of the robbery in R v Johns35. Johns was a party to an agreement with two other men, Watson and Dodge, to rob a man named Morriss, who was believed to be a receiver of stolen jewellery. It was Johns' role to drive Watson and Dodge to a location near the planned scene of the robbery and to wait there to collect the proceeds from them and conceal those proceeds at an agreed location. Johns knew that Watson always carried a pistol and that he was quick tempered and would not let Morriss "get on top of him"36. In the event, there was a struggle and Watson shot and killed Morriss. Watson died before the trial. Dodge and Johns were both convicted of the murder of Morriss. Johns appealed against his conviction, contending that the doctrine of joint criminal enterprise cast the net too widely in attaching liability to the accessory before the fact. Street CJ acknowledged that, in light of the fundamental alteration to proof of criminal liability effected by Woolmington v Director of Public Prosecutions37, a subjective element had come to replace Foster's test38. His Honour took the modern law to be correctly stated in the 12th edition of Russell39: "Nowadays, it is submitted, the test should be subjective and the person charged as accessory should not be held liable for anything but what he either expressly commanded or realised might be involved in the Davidson J (delivering the judgment of the Court), citing Avory J's summing-up in Shore, Trial of Frederick Guy Browne and William Henry Kennedy, (1930) at 35 [1978] 1 NSWLR 282. 36 R v Johns [1978] 1 NSWLR 282 at 285. 38 R v Johns [1978] 1 NSWLR 282 at 289. 39 R v Johns [1978] 1 NSWLR 282 at 289, citing Russell on Crime, 12th ed (1964) at Bell Nettle Gordon performance of the project agreed upon. It would, on this principle, therefore be a question of evidence to satisfy the jury that the accused did contemplate the prospect of what the principal has in fact done." Adopting this analysis, Street CJ stated that the secondary party bears criminal liability40: "for an act which was within the contemplation of both himself and the principal in the first degree as an act which might be done in the course of carrying out the primary criminal intention β an act contemplated as a possible incident of the originally planned particular venture." This statement of the principle was adopted in the joint reasons in Johns v The Queen41. As their Honours explained, the act is within the scope of the agreed criminal enterprise because it is within the parties' contemplation and foreseen as a possible incident of its execution42. Jogee describes Johns as an "entirely orthodox" decision43. Their Lordships observed there was ample evidence from which the jury could infer that Johns gave his assent to a criminal enterprise which involved the discharge of a firearm should the occasion arise44. Nonetheless, there may be discerned a difference in principle between the parties' contemplation of the possible commission of the incidental offence and a requirement of proof of conditional intent that the incidental offence be committed. In Chan Wing-Siu, the Privy Council took the law of joint criminal enterprise to be as stated by Lord Parker CJ in R v Anderson: where two persons embark on a joint enterprise each is liable for the acts done in pursuance of it, 40 R v Johns [1978] 1 NSWLR 282 at 290. 41 (1980) 143 CLR 108 at 130-131 per Mason, Murphy and Wilson JJ, quoting R v Johns [1978] 1 NSWLR 282 at 290. 42 (1980) 143 CLR 108 at 131 per Mason, Murphy and Wilson JJ. 43 [2016] 2 WLR 681 at 701 [67] per Lord Hughes and Lord Toulson (Lord Neuberger, Lady Hale and Lord Thomas agreeing); [2016] 2 All ER 1 at 21. 44 [2016] 2 WLR 681 at 701 [67] per Lord Hughes and Lord Toulson (Lord Neuberger, Lady Hale and Lord Thomas agreeing); [2016] 2 All ER 1 at 21. Bell Nettle Gordon including for "unusual consequences" arising from the execution of the agreement, but if one party goes beyond the tacit agreement, the other parties are not liable for the consequences of that unauthorised act45. Sir Robin Cooke, giving the judgment of the Privy Council, noted the absence of analysis of the test that the jury is to apply in deciding whether an act is within the scope of the agreement46. Sir Robin adopted the statement of the principle in Johns, which he considered to be in accord with Lord Simonds LC's reference to the secondary party's contemplation of the infliction of mortal injury in Davies v Director of Public Prosecutions47. The prosecution case in Chan Wing-Siu was that three men armed with knives forced their way into an apartment with the intention of robbing the occupants. The male occupant died as the result of stab wounds inflicted by one or more of the men. The evidence of the role played by one of the three, Tse, was less precise than the evidence concerning the other two. All three were tried for murder. One way the prosecution case was put was that the accused must have contemplated the possible commission of the murder in carrying out the robbery48. In light of this, Sir Robin said that liability depended on the "wider principle" whereby a secondary party is criminally liable for acts done by the primary offender of a type which he foresees but does not necessarily intend. "That there is such a principle is not in doubt. It turns on contemplation or, putting the same idea in other words, authorisation, which may be express but is more usually implied. It meets the case of a crime foreseen as a possible incident of the common unlawful enterprise. The criminal culpability lies in participating in the venture with that foresight." 45 [1985] AC 168 at 175-176, citing [1966] 2 QB 110 at 118-119. 46 [1985] AC 168 at 176. 47 Chan Wing-Siu v The Queen [1985] AC 168 at 177, citing [1954] AC 378 at 401. 48 Chan Wing-Siu v The Queen [1985] AC 168 at 175. 49 Chan Wing-Siu v The Queen [1985] AC 168 at 175. Bell Nettle Gordon The principle stated in Chan Wing-Siu was affirmed by the Privy Council in Hui Chi-Ming v The Queen50 and by the House of Lords in R v Powell51. As noted earlier, putting to one side considerations of policy, the reason for departing from it in Jogee was the neglect, in Chan Wing-Siu, of relevant English authority and, in particular, the decision of the five member Court of Criminal Appeal in Wesley Smith52. Smith, Atkinson and two other men were involved in a brawl in a hotel. It was the prosecution case that the four men were a party to an agreement to "tear up the joint"53. Smith and a confederate were outside the hotel throwing bricks at its glass door while Atkinson and the fourth man remained inside brawling, in the course of which Atkinson fatally stabbed the barman. All four men were indicted for murder. Two were acquitted and Atkinson and Smith were convicted of manslaughter. The decision is not without difficulty. Smith challenged his conviction on the ground that the fatal knife attack was outside the ambit of the agreement. In rejecting this challenge, Slade J, delivering the judgment of the Court of Criminal Appeal, said that54: "It must have been clearly within the contemplation of a man like Smith ... [that Atkinson] might use it [the knife] ... as Atkinson did. By no stretch of imagination, in the opinion of this court, can that be said to be outside the scope of the concerted action in this case." This passage was cited by Lord Hutton, giving the leading judgment in Powell, as supporting the principle enunciated by the Privy Council in Chan Wing-Siu55. In Jogee, it was concluded that Wesley Smith was misinterpreted in 52 [2016] 2 WLR 681 at 691 [27] per Lord Hughes and Lord Toulson (Lord Neuberger, Lady Hale and Lord Thomas agreeing); [2016] 2 All ER 1 at 12. 53 R v Smith (Wesley) [1963] 1 WLR 1200 at 1203; [1963] 3 All ER 597 at 599. 54 [1963] 1 WLR 1200 at 1206; [1963] 3 All ER 597 at 602. 55 [1999] 1 AC 1 at 18-19. Bell Nettle Gordon Powell56. This is because the Court of Criminal Appeal in Wesley Smith also approved the trial judge's directions to the jury, which included the direction, with reference to the secondary party57: "Only he who intended that unlawful and grievous bodily harm should be done is guilty of murder. He who intended only that the victim should be unlawfully hit and hurt will be guilty of manslaughter if death results." It was unnecessary for the Court of Criminal Appeal to resolve any tension between its view that the scope of the enterprise was to be determined by Smith's contemplation of what his co-venturer might do and the jury direction, in circumstances in which their Lordships were not considering the liability of the secondary party for murder. McAuliffe The question raised in McAuliffe, which was not explicitly raised in Chan Wing-Siu, was whether it was necessary for there to be mutual contemplation of the commission of the incidental crime. It was common ground in McAuliffe that three youths had agreed to bash a person or persons in a park. All three were convicted of the murder of a man whom they had set upon. The jury was directed that the accused whose case it was considering would be guilty of murder if he shared the common intention, with the accused who did the act causing death, of inflicting grievous bodily harm or if he "contemplated that the intentional infliction of grievous bodily harm was a possible incident of the common criminal enterprise"58. The emphasised part of the direction was the subject of challenge on appeal. The McAuliffe brothers' case on appeal was that joint criminal enterprise liability required the prosecution to prove a shared contemplation that grievous bodily harm might intentionally be inflicted as a possible incident of the agreement to assault59. 56 [2016] 2 WLR 681 at 702 [71] per Lord Hughes and Lord Toulson (Lord Neuberger, Lady Hale and Lord Thomas agreeing); [2016] 2 All ER 1 at 22. 57 See [2016] 2 WLR 681 at 702 [70] per Lord Hughes and Lord Toulson (Lord Neuberger, Lady Hale and Lord Thomas agreeing); [2016] 2 All ER 1 at 22. 58 McAuliffe v The Queen (1995) 183 CLR 108 at 113. 59 McAuliffe v The Queen (1995) 183 CLR 108 at 113. Bell Nettle Gordon The Court observed that the challenged direction conveyed to the jury that, even if the criminal enterprise embarked upon by the three youths did not embrace the intentional infliction of grievous bodily harm, there was "a sufficient intent" for murder if the accused contemplated the intentional infliction of grievous bodily harm by one of them as a possible incident in carrying out their agreement and, with that awareness, the accused continued to participate in the enterprise60. The accused was as much a party to the incidental crime as when its commission was within the common purpose. Participation in the joint criminal enterprise, with the requisite awareness, was not relevantly distinct from an understanding or arrangement that included foresight of the intentional infliction of grievous bodily harm61. The Court in McAuliffe adopted the rationale for the imposition of extended joint criminal enterprise liability given in Chan Wing-Siu62: "As Sir Robin Cooke observed, the criminal culpability lies in the participation in the joint criminal enterprise with the necessary foresight and that is so whether the foresight is that of an individual party or is shared by all parties. That is in accordance with the general principle of the criminal law that a person who intentionally assists in the commission of a crime or encourages its commission may be convicted as a party to As will appear, the second sentence proceeded upon acceptance of Professor JC Smith's analysis that the secondary party "lends" himself to the enterprise thereby giving encouragement to the commission of an offence which he knows may involve committing the incidental offence63. It is also to be understood in the context of the following paragraph, in which their Honours, returning to what the challenged direction conveyed, reiterated that individual contemplation of the intentional infliction of grievous bodily harm as a possible 60 McAuliffe v The Queen (1995) 183 CLR 108 at 113. 61 McAuliffe v The Queen (1995) 183 CLR 108 at 117-118. 62 McAuliffe v The Queen (1995) 183 CLR 108 at 118. 63 JC Smith, "R v Wakely", [1990] Criminal Law Review 119 at 121. Bell Nettle Gordon incident of the enterprise amounted to "a sufficient intention on the part of either of them for the purpose of murder"64. Jogee held that the law stated in Chan Wing-Siu, and the decisions following it, extended the reach of criminal liability too far65. It is a conclusion that is in line with the views of a number of distinguished commentators66. Their Lordships' conclusions that there is no occasion for extended joint criminal enterprise liability, and that the proper counterpart to Foster's objective probable consequences test is intention, are conclusions about the policy that the law should pursue67. They are conclusions which reflect their Lordships' preference for the view of the editors of the 14th edition of Smith and Hogan's Criminal Law68 that extended joint criminal enterprise does not come within the principles of accessorial liability. The relationship of joint criminal enterprise and extended joint criminal enterprise to general concepts of complicity is contested69. Professor JC Smith saw no difficulty locating both within ordinary principles of accessorial liability. As noted, in the case of extended joint criminal enterprise, the secondary party "lends" himself to the enterprise and in so doing gives assistance and encouragement to the principal in carrying out an enterprise that he knows may The alternative view, proposed by involve Professor Simester, is that joint criminal enterprise is a sui generis form of incidental offence70. the 64 McAuliffe v The Queen (1995) 183 CLR 108 at 118. 65 [2016] 2 WLR 681 at 704 [79] per Lord Hughes and Lord Toulson (Lord Neuberger, Lady Hale and Lord Thomas agreeing); [2016] 2 All ER 1 at 24. 66 See above fn 5. 67 [2016] 2 WLR 681 at 702-703 [73] per Lord Hughes and Lord Toulson (Lord Neuberger, Lady Hale and Lord Thomas agreeing); [2016] 2 All ER 1 at 68 [2016] 2 WLR 681 at 703 [76] per Lord Hughes and Lord Toulson (Lord Neuberger, Lady Hale and Lord Thomas agreeing); [2016] 2 All ER 1 at 23-24, citing Smith and Hogan's Criminal Law, 14th ed (2015) at 260. 69 KJM Smith, A Modern Treatise on the Law of Criminal Complicity, (1991) at 209. 70 JC Smith, "R v Wakely", [1990] Criminal Law Review 119 at 121; see, too, Gillies, Criminal Law, 4th ed (1997) at 167. Bell Nettle Gordon secondary participation in a crime and not merely a sub-species of accessorial liability71. In Clayton v The Queen, the joint reasons adopt Professor Simester's analysis distinguishing the liability of the aider and abettor from the liability of a party to a joint criminal enterprise72. The wrong in the case of the aider and abettor is grounded in his or her contribution to the principal's crime73. The wrong in the case of the party to the joint criminal enterprise lies in the mutual embarkation on a crime with the awareness that the incidental crime may be committed in executing their agreement74. Acknowledgement of the sui generis nature of the secondary liability that arises from participation in a joint criminal enterprise may be thought to resolve at least some of the anomalies that are suggested to arise from allowing foresight of the possible commission of the incidental offence by a co-venturer as a sufficient mental element of liability. The appellants contend that the doctrine of extended joint criminal enterprise diminishes the state of mind necessary for criminal liability. They argue that, if McAuliffe is reversed, the prosecution may have to make more of an effort to establish liability in joint enterprise cases but that to recognise so much is not to justify the imposition of liability without a sound doctrinal foundation. That submission is apt to overlook the difficulty, in the case of group criminal activity, of establishing the contributions made by individual members. Commonly enough the identity of the principal offender will not be known. In Powell, Lord Steyn identified an important justification for the doctrine 71 Simester, "The Mental Element in Complicity", (2006) 122 Law Quarterly Review 578; Simester and Sullivan, Criminal Law: Theory and Doctrine, 3rd ed (2007) at 72 (2006) 81 ALJR 439 at 444 [20] per Gleeson CJ, Gummow, Hayne, Callinan, Heydon and Crennan JJ; 231 ALR 500 at 505. 73 Clayton v The Queen (2006) 81 ALJR 439 at 444 [20] per Gleeson CJ, Gummow, Hayne, Callinan, Heydon and Crennan JJ; 231 ALR 500 at 505. 74 Clayton v The Queen (2006) 81 ALJR 439 at 444 [20] per Gleeson CJ, Gummow, Hayne, Callinan, Heydon and Crennan JJ; 231 ALR 500 at 505. 75 R v Powell [1999] 1 AC 1 at 14. Bell Nettle Gordon "In the real world proof of an intention sufficient for murder would be well nigh impossible in the vast majority of joint enterprise cases. Moreover, the proposed change in the law must be put in context. The criminal justice system exists to control crime. A prime function of that system must be to deal justly but effectively with those who join with others in criminal enterprises. Experience has shown that joint criminal enterprises only too readily escalate into the commission of greater offences. In order to deal with this important social problem the accessory principle is needed and cannot be abolished or relaxed." McAuliffe builds on the principles enunciated in Johns. The appellants do not contest that the parties' foresight of the possible commission of the incidental offence suffices for liability for that offence on the principles of joint criminal enterprise liability enunciated in Johns. In cases in which the participants in a joint criminal enterprise acknowledge that an incidental crime is a possible consequence of carrying out their agreement, the commission of the offence is within the scope of the agreement and the parties must be taken to have authorised or assented to its commission even if it is their preference that it be avoided. It is the authorisation or assent which is said to justify the imputation of the acts of the principal to all the participants in the agreement. The wrong turning in the law enunciated in McAuliffe, in the appellants' submission, was the discarding of the concepts of mutuality, authorisation and assent. The reason for McAuliffe's rejection of the mutuality of foresight of the commission of the incidental offence as the criterion of liability is well illustrated by the example given by Professor JC Smith in his commentary on R v Wakely: A knows that P is carrying a weapon which he will use to kill or cause grievous bodily harm if it is necessary in carrying out the agreed enterprise and A says to P "I do not agree to your using that weapon" but nevertheless A continues to participate in the enterprise76. As Professor JC Smith observed, A's words deny tacit assent to the use of the weapon. Moreover, adopting the Jogee analysis, A can hardly be said to have conditionally intended the use of the weapon. It is not self-evident, however, that the policy of the law should be against the imposition of liability for murder in such a case. Certainly A's moral culpability is not less than that of the secondary party in a case such as Johns. 76 JC Smith, "R v Wakely", [1990] Criminal Law Review 119 at 121. Bell Nettle Gordon The principles applied to the re-opening of decisions of this Court need not be recited77. McAuliffe was a unanimous decision. It has since been affirmed on a number of occasions78. Many prosecutions have been conducted on the law stated in it in the Australian common law jurisdictions. Jogee held that the effect of "putting the law right" will not be to invalidate convictions arrived at over many years by faithfully applying the law laid down in Chan Wing-Siu, as leave to appeal out of time would only be granted where the applicant can demonstrate substantial injustice79. The position in Australian law in this respect cannot be regarded as settled80 and it cannot be said that to depart from the law as it has been consistently stated and applied would not occasion inconvenience. Of course, were the law stated in McAuliffe to have led to injustice, any disruption occasioned by departing from it would not provide a good reason not to do so. However, here, as in Clayton, the submissions are in abstract form and do not identify decided cases in which it can be seen that extended joint criminal enterprise liability has occasioned injustice81. In Gillard v The Queen82 and again in Clayton, this Court rejected arguments that the doctrine of extended joint criminal enterprise should be 77 Queensland v The Commonwealth (1977) 139 CLR 585 at 599 per Gibbs J, 602 per Stephen J, 620 per Aickin J; [1977] HCA 60; John v Federal Commissioner of Taxation (1989) 166 CLR 417 at 438 per Mason CJ, Wilson, Dawson, Toohey and Gaudron JJ; [1989] HCA 5; Wurridjal v The Commonwealth (2009) 237 CLR 309 at 350 [65] per French CJ; [2009] HCA 2. 78 Osland v The Queen (1998) 197 CLR 316; [1998] HCA 75; Gillard v The Queen (2003) 219 CLR 1; Clayton v The Queen (2006) 81 ALJR 439; 231 ALR 500; R v Taufahema (2007) 228 CLR 232; Huynh v The Queen (2013) 87 ALJR 434; 295 ALR 624; [2013] HCA 6. 79 [2016] 2 WLR 681 at 708 [100] per Lord Hughes and Lord Toulson (Lord Neuberger, Lady Hale and Lord Thomas agreeing); [2016] 2 All ER 1 at 28. 80 Kentwell v The Queen (2014) 252 CLR 601 at 613 [29] per French CJ, Hayne, Bell and Keane JJ; [2014] HCA 37. 81 Clayton v The Queen (2006) 81 ALJR 439 at 443 [15] per Gleeson CJ, Gummow, Hayne, Callinan, Heydon and Crennan JJ; 231 ALR 500 at 504. 82 (2003) 219 CLR 1. Bell Nettle Gordon abandoned or extensively modified83. In addition to observing that the doctrine had not been shown to occasion injustice in the application of the law, the joint reasons in Clayton rejected that its application had made criminal trials unduly complex84. Moreover, most of the arguments in favour of change had been thoroughly considered and rejected by the House of Lords in Powell85. Importantly, in Clayton it was said that no change should be undertaken to the law of extended joint criminal enterprise without examining the whole of the law with respect to secondary liability for crime. As was observed, it would be undesirable to alter the doctrine as it applies to the law of homicide, which is its principal area of application, without consideration of whether the common law of murder should be amended to distinguish between killing with intent to kill and killing with intent to cause really serious injury86. The undesirability of altering the doctrine of extended joint criminal enterprise without examining the law with respect to secondary liability generally87 is underlined by the report of the Law Commission of England and Wales Inchoate Liability for Assisting and Encouraging Crime, in which a proposal to abolish secondary liability for a collateral offence committed in the course of a joint criminal enterprise was rejected88. As emerged from that report, the projected and other possible ramifications of change were such that, if any change were to be made, it should be made by the Parliament. 83 See also the endorsement of the doctrine in Osland v The Queen (1998) 197 CLR 316; R v Taufahema (2007) 228 CLR 232; Huynh v The Queen (2013) 87 ALJR 434; 295 ALR 624. 84 (2006) 81 ALJR 439 at 444 [21] per Gleeson CJ, Gummow, Hayne, Callinan, Heydon and Crennan JJ; 231 ALR 500 at 505. 86 Clayton v The Queen (2006) 81 ALJR 439 at 443 [19] per Gleeson CJ, Gummow, Hayne, Callinan, Heydon and Crennan JJ; 231 ALR 500 at 505. 87 Clayton v The Queen (2006) 81 ALJR 439 at 443-444 [19] per Gleeson CJ, Gummow, Hayne, Callinan, Heydon and Crennan JJ; 231 ALR 500 at 505. 88 The Law Commission, Inchoate Liability for Assisting and Encouraging Crime, Law Com No 300, (2006) at 19 [2.24]-[2.25]. Bell Nettle Gordon In the decade since Clayton was decided, the Parliament of Victoria has amended the Crimes Act 1958 (Vic), abolishing the common law of complicity89 and in its place imposing liability on persons "involved in the commission of an offence"90. The New South Wales Law Reform Commission undertook a review of the law of complicity91. The Commission proposed retention of extended joint criminal enterprise liability along the lines adopted in the Criminal Code (Cth) with a further modification in the case of liability for homicide92. In such cases the Commission recommended that the secondary party's foresight be of the probability of the commission of the offence93. The Parliament of New South Wales has to date not chosen to act on the Commission's recommendations. The Parliament of South Australia has also not chosen to reform the law as stated in McAuliffe. In light of this history, it is not appropriate for this Court to now decide to abandon extended joint criminal enterprise liability and require, in the case of joint criminal enterprise liability, proof of intention in line with Jogee. For the same reasons, it is not appropriate to depart from McAuliffe by substituting a requirement of foresight of the probability of the commission of the incidental offence. As Johns explains, the difficulty with such a requirement is that it "stakes everything on the probability or improbability of an act, admittedly contemplated, occurring"94. This is not to accept the submission that since "anything is possible", the secondary party may bear liability for a crime contemplated by him or her as no more than a fanciful possibility. In Chan Wing-Siu, the Privy Council considered that there may be a case in which the commission of the incidental offence occurs to the accused fleetingly and is genuinely dismissed by him or her as a negligible risk. It was 89 Crimes Act 1958 (Vic), s 324C. 90 Crimes Act 1958 (Vic), ss 323-324. 91 New South Wales Law Reform Commission, Complicity, Report No 129, (2010). 92 New South Wales Law Reform Commission, Complicity, Report No 129, (2010) at 93 New South Wales Law Reform Commission, Complicity, Report No 129, (2010) at 94 Johns v The Queen (1980) 143 CLR 108 at 131 per Mason, Murphy and Wilson JJ. Bell Nettle Gordon held that, in such a case, the secondary party would not possess the necessary foresight to support liability95. That conclusion should be accepted. Proof of the accused's foresight of the possibility of the commission of the incidental offence usually will be an inference from what the accused is proved to have done and to have known. Cases in which the evidence leaves open that the accused may have contemplated the incidental offence, but dismissed it as a fanciful possibility, are likely to be few. In such a case, it would be necessary to direct the jury that a possibility dismissed as negligible would not suffice for liability. Before parting with Jogee, it is necessary to say something about the suggestion that the expression "joint enterprise liability" occasions public misunderstanding. The misunderstanding that their Lordships identified was that the expression allows a form of "guilt by association" or "guilt by simple presence without more"96. Nothing in McAuliffe supports either conclusion. It is to be appreciated that in the paradigm case of murder, the secondary party's foresight is not that in executing the agreed criminal enterprise a person may die or suffer grievous bodily harm β it is that in executing the agreed criminal enterprise a party to it may commit murder. And with that knowledge, the secondary party must continue to participate in the agreed criminal enterprise. The procedural history Everard Miller, Wayne Smith and Johnas Presley were all convicted of the murder of Clifford Hall following a trial in the Supreme Court of South Australia (Stanley J). The deceased was fatally stabbed by Joshua Betts in the course of an assault to which Miller, Smith and Presley were said to be parties. Liability for the murder of the deceased was left in each case on the basis of either joint criminal enterprise or extended joint criminal enterprise. Miller, Smith, Presley and Betts were also charged with causing harm to a man named Wayne King with the intention of causing harm. That offence was alleged to have been aggravated by being committed in company and by the use of offensive weapons particularised as a baseball bat and a pole97. Presley pleaded guilty upon arraignment to this offence, and the jury returned verdicts of 95 Chan Wing-Siu v The Queen [1985] AC 168 at 179. 96 [2016] 2 WLR 681 at 703 [77] per Lord Hughes and Lord Toulson (Lord Neuberger, Lady Hale and Lord Thomas agreeing); [2016] 2 All ER 1 at 24. 97 Criminal Law Consolidation Act 1935 (SA), s 24. Bell Nettle Gordon guilty against Miller, Smith and Betts. The jury found, in each case, that the offence was aggravated by having been committed in company. The jury did not find in any case that the offence was aggravated by the use of offensive weapons. Miller, Smith, Presley and Betts had all been drinking alcohol in the hours leading up to the killing of the deceased and the assault on King. It was open to find that each was intoxicated at the material time. All four appealed unsuccessfully against their convictions to the Court of Criminal Appeal of the Supreme Court of South Australia (Gray, Sulan and Blue JJ)98. Miller, Smith and Presley each contended, among their grounds of appeal, that the verdicts were unreasonable and could not be supported by the evidence having regard to their states of intoxication. On 13 November 2015, Keane and Nettle JJ granted Miller special leave to appeal on a ground which contends that the Court of Criminal Appeal erred in holding that his convictions are capable of being supported by the evidence. On 12 February 2016, French CJ and Kiefel J referred applications for special leave made by Smith and Presley to an enlarged Court with a view to those applications being heard with Miller's appeal. The question raised by these applications is also the capacity of the evidence to support the convictions when account is taken of the evidence of the applicants' intoxication. The judgment in Jogee was delivered on 18 February 2016. Miller applied for leave to amend his grounds of appeal to contend that the trial miscarried as the result of liability for the murder of the deceased being left for the jury's consideration on the basis of extended joint criminal enterprise principles. Smith and Presley applied for leave to amend their proposed grounds of appeal to raise the same point. Leave was granted in each case. For the reasons given, McAuliffe remains a correct statement of the common law of Australia and it follows that the amended grounds of appeal must be dismissed. Nonetheless, as will appear, the Court of Criminal Appeal did not review the sufficiency of the evidence to sustain the verdicts consistently with the task explained in M v The Queen99. Special leave to appeal must be granted to Smith and Presley. The appeals in each case must be allowed and the proceedings in each case must be remitted to the Court of Criminal Appeal for determination of the ground that the verdict is unreasonable. 98 R v Presley (2015) 122 SASR 476. 99 (1994) 181 CLR 487; [1994] HCA 63. Bell Nettle Gordon The facts The appellants and Betts are Aboriginals. They spent much of 12 December 2012 together drinking. In the evening, they were at Presley's home in Hayles Road, Elizabeth Park. Sometime before 11:00pm, Betts and Presley left those premises to obtain some marijuana. On their way back, Betts urinated against the fence of a residential property in Grant Street, Elizabeth Park. The deceased, a resident of Grant Street, remonstrated with them. He was joined by a neighbour, King. There was a heated exchange between the four men in the course of which the deceased made racial slurs. Betts or Presley was pushed by either the deceased or King and Betts was punched to the face. On their return to the Hayles Road premises, Betts reported that he had been struck by three "white fellas", who had jumped him in the alleyway. His lip was bloodied. Presley was angry. He took hold of a baseball bat and said "let's go back and see what these people β go and see what the problem is". The appellants and Betts left the Hayles Road premises. Presley had the baseball bat. Betts was armed with a 332 mm long knife. One issue at the trial was whether the prosecution had established that the appellants must have been aware of the knife. The appellants, Betts and, perhaps, others made their way to the scene of the earlier altercation in Grant Street. At least some of the group walked up a laneway that runs between Butterfield Road and Grant Street. The deceased, King and some of their neighbours were still gathered in Grant Street near the entry to the laneway when the group arrived. Estimates of the interval between the initial altercation and the second, fatal altercation varied from between three to 20 minutes. Estimates of the number of Aboriginals who formed part of the hostile group that made its way along the laneway to Grant Street varied from four to eight persons. The group was described as hitting the fence with objects as they made their way down the lane. One of them, a big Aboriginal man, on the prosecution case Smith, was brandishing a shovel. The deceased, who was in the laneway, called out "run they've got weapons". King, who was also in the laneway, started to run back towards his house. He was struck on the left shoulder by something solid from behind. He turned and saw Betts and Presley. Each was holding an object and each struck him. He raised his arm and was struck by the taller of the two men with an object described as "like a baseball bat". King sustained a fracture to the upper arm, which required surgery. Witnesses saw King being kicked and hit by two men as he lay on the ground. One of the men had a tattoo of a crucifix on his face. This was Betts. Bell Nettle Gordon The deceased was struck from behind with the shovel. He fell to the ground, where one witness saw him being kicked to the jaw. The same witness described a "hand coming at him like at the back of him and hitting him" just below the shoulder blade. On the prosecution case, this was the fatal knife blow struck by Betts. The deceased was kicked and hit as he lay on the ground by a number of Aboriginal men. The estimates varied as to the number of his assailants. One was armed with a shovel or shovel-like implement. The deceased sustained a scalping wound to the head which was consistent with the use of a shovel. A witness saw the deceased being struck with a bottle. The appellants and Betts returned to the Hayles Road premises after the second altercation. Gary Willis, who had been drinking with the group earlier in the evening, recalled one of them saying on their return "We smashed them. We had a fight" and Betts saying "I think I stabbed him, stabbed a bloke in the guts". Presley was seen by a police officer at the front of the Hayles Road premises shortly after 11:30pm. He was pacing in an agitated state saying "you're fucked, dog" and "you dog". He was arrested at about 12:25am. Betts and Miller were arrested at premises in Northampton Crescent, Elizabeth East at about 1:52am. Smith was arrested asleep in a car outside the Northampton Crescent premises at about 5:15am. None of the appellants gave evidence at the trial. In an interview with the police, Betts admitted to stabbing the deceased and said that he had done so in self-defence. Following his arrest, Betts directed police to premises in Butterfield Road, where he showed them the knife, which had been placed in a drain. The blade of the knife was 202 mm long. It was stained with blood matching that of the deceased. A shovel was seized from the rear yard of the Butterfield Road premises. Hair and skin were observed on the leading edge of the blade. DNA profiling matched that of the deceased. Presley declined to be interviewed on the morning of his arrest. On 22 December 2012, he was interviewed at his request. He said that he obtained a baseball bat after the initial altercation and that he ran, or jogged, back to the scene with Smith, Betts and a man whom he did not know. He said that Smith had a cricket bat, that he thought the man he did not know had a shovel and that Betts had a knife. He admitted to striking one man to the elbow but he said that he did no more than this. He did not see Betts stab the deceased. The police located an empty Passion Pop bottle at the scene in Grant Street. Blood-like stains were observed on the neck of the bottle. The mouth of Bell Nettle Gordon the bottle contained DNA consistent with Betts' DNA profile. Smith's fingerprints were found on the bottle. The location of the fingerprints was consistent with the bottle having been held by Smith both upside down and upright. A baseball bat was seized from the lounge room at the Hayles Road premises. A swab obtained from the handle of the bat contained a mixed DNA profile from four contributors. Betts, Miller and Smith were excluded as contributors to the DNA deposit. Presley was not excluded, although the result did not establish that he was a contributor. A triangular 1.9 kg piece of concrete was located in Grant Street in close proximity to the deceased. There were two blood-like spots on the edge of the block, which matched the DNA profile of the deceased. A witness described a concrete block as having been thrown from the direction of the laneway towards her during the course of the assault. Intoxication Evidence of Miller's intoxication At the time of his arrest, Miller was observed by Constable Penn to be "extremely intoxicated by something". He was unsteady on his feet, his speech was slurred, he struggled to keep his eyes open and he smelt of alcohol. Constable Penn kept constant observations on him while Miller was in the holding cell at the Elizabeth Police Station. He noted that Miller was "extremely lethargic and fell asleep in the holding cell". A breath test administered by a police officer recorded an alcohol concentration of 0.167 grams of alcohol per 100 millilitres of blood at the time of Miller's arrest. At about 9:20am on 13 December 2012, a blood sample was taken from Miller. This revealed an alcohol concentration of 0.139 grams of alcohol per 100 millilitres of blood. The blood sample also revealed 0.5 grams per 100 millilitres of blood of diazepam and 0.04 grams per 100 millilitres of blood of nordiazepam. Nordiazepam is the metabolite of diazepam. The combined effect of these drugs was at the lower end of the therapeutic range. Diazepam is a drug of the benzodiazepine family. Among its effects is that it operates as a sedative and muscle relaxant. The sample also revealed three micrograms per litre of blood of THC, the active chemical in cannabis. Dr Majumder, a pharmacologist, gave evidence in Miller's case. She estimated, based on Miller's blood sample, that at around the time of the second altercation Miller's blood alcohol reading would have been 0.292. The estimate Bell Nettle Gordon assumed that alcohol was eliminated from Miller's system at 0.015 per cent per hour. The rate of elimination, which varies between individuals, is between 0.01 to 0.02. Taking into account that range, Dr Majumder considered that Miller's blood alcohol concentration at the time of the second altercation was between 0.241 and 0.342. Dr Majumder was asked about the effect on her calculations if Miller had consumed two standard drinks after the second altercation. She said two standard drinks would not have raised Miller's blood alcohol levels by more than 0.04 per cent on average. She was asked what effects a blood alcohol concentration in the range of 0.272 to 0.322 would have on the mental state and behaviour of the subject. Dr Majumder said that, at these levels, there would be "significant effects on the behaviour and mental state" of the person. She went on to explain that the person would be "very drunk" and that it would be obvious to an observer because the person's speech would be slurred and he or she may have stumbling gait and glazed eyes. Dr Majumder said that levels of 0.272 to 0.322 would be "close to the level that is generally considered very high level". It is a level at which a person can lose consciousness. A person who has not lost consciousness and who has this level of alcohol in the blood is a person with a degree of tolerance to the effects of alcohol. Dr Majumder said that at the assumed levels of alcohol concentration in Miller's blood, an individual's "thinking process, decisionmaking process will be significantly impaired". The person would have problems concentrating and would have a short attention span. An experienced drinker may be slightly less affected than a non-experienced drinker. At this high level of blood alcohol concentration the person would have "significantly impair[ed] decisionmaking and also planning β¦ so the person may not be able to foresee or predict the consequences of certain decisions". Dr Majumder explained that alcohol can release aggressive behaviour and cause disinhibition. Its effects may cause the person to act without thinking. At these high levels a person may be too intoxicated to be aggressive. Dr Majumder considered it possible that the interaction of diazepam and nordiazepam could enhance the effects of alcohol. The impairment of concentration might be more pronounced taking into account the interaction with diazepam. It was possible that this enhanced effect would include the impairment of foresight. Dr Majumder considered the level of THC in Miller's blood to be a moderate level. She was not able to say whether, at the time of the second altercation, Miller would have been under the influence of cannabis. It was one Bell Nettle Gordon of the possibilities. The ingestion of cannabis could have potentiated the impairment from alcohol in combination with the diazepam and nordiazepam. There was evidence upon which it may have been open to find that Miller was present with Smith and Betts at premises in Halsey Road, Elizabeth East after the second altercation, drinking a pre-mixed alcoholic drink described as a "cowboy". Betts, Smith and a third man, who may have been Miller, were at those premises for half an hour or an hour drinking. A witness present at the Halsey Road premises, who was herself drinking, did not consider that either Smith or Betts looked drunk. In the witness' estimate, they "most probably had a few drinks". The witness made no observation of the third man, whose face she did not really see and who had been sitting in the dark. Dr Majumder was asked to assume that Miller had consumed five standard drinks between 11:30pm and 9:20am the following day when the blood sample was taken. On this assumption, Miller's range of blood alcohol concentration at the time of the second altercation was estimated at between 0.192 and 0.242. If the rate of elimination was calculated as between 0.01 per cent and 0.02 per cent per hour, the range, allowing for the consumption of five standard drinks after 11:00pm, came down to 0.141 to 0.242. At this lower range the effects on the individual would be as described for the higher range but to a lesser degree. Evidence of Presley and Smith's intoxication The police officers who observed Presley outside the Hayles Road premises at about 11:30pm considered that he was moderately affected by alcohol. A blood sample taken from Presley at 8:28am on 13 December recorded a concentration of 0.054 grams of alcohol per 100 millilitres of blood. If Presley had not consumed alcohol after the second altercation, his blood alcohol level at the time was likely to have been about 0.2. Dr Majumder said that a person with a blood alcohol concentration of the order of 0.2 would have appreciable deficits in the person's perception of events occurring around them and their decision-making processes would be impaired to some degree. King said that the two Aboriginal men involved in the first altercation were affected by alcohol. Ms Bateman, one of the neighbours in Grant Street, said the man accompanying the one who urinated on the fence was staggering a bit. Two other neighbours described the Aboriginal men involved in the first altercation as being drunk or intoxicated in some way. Bell Nettle Gordon In his interview, Presley gave an account of drinking Passion Pop and Jack Daniel's. Willis said that, while it was still light on 12 December 2012, he had driven Miller and Smith from the Elizabeth Tavern to the Hayles Road premises, where they met up with Betts and Presley, who were drinking. The group were drinking West End Draught. Willis recalled Presley going to the Elizabeth Tavern and returning with a bottle of Bundaberg Rum. Willis himself had been drinking for two days. He said all of the men were drunk that evening. A few, including Smith, had been smoking marijuana that night. Smith was not alcohol breath tested. The only blood sample taken from him was performed about 24 hours after the fatal altercation. This showed a zero blood alcohol concentration. Traces of prescription drugs and cannabis were detected. There was uncontradicted evidence that Smith had been drinking throughout 12 December 2012. It was his case that the blood alcohol concentrations of his co-accused recorded in analysis of samples taken much closer to the event provided cogent circumstantial evidence of his likely state of intoxication at the material time. The zero blood alcohol concentration in his blood, 24 hours after the events, did not cast doubt on a conclusion that he was significantly intoxicated at the time. The Court of Criminal Appeal Each appellant relied on a number of grounds of challenge to his convictions β in Presley's case, his conviction for murder β before the Court of Criminal Appeal. Each appellant's Notice of Appeal included a ground challenging the trial judge's directions on intoxication. Miller and Smith both abandoned this ground prior to the hearing before the Court of Criminal Appeal. Presley maintained the ground, contending, among other things, that the trial judge failed to instruct the jury as to how its findings respecting his state of intoxication might affect its findings as to the scope of any joint criminal enterprise to which he was a party and whether "he turned his mind to possible consequences of participation". The Court of Criminal Appeal extracted the trial judge's general directions on intoxication and specific directions as this issue applied to Presley100. The Court of Criminal Appeal concluded that the summing-up on this topic could not be fairly criticised101. 100 R v Presley (2015) 122 SASR 476 at 493-494 [93]-[94]. 101 R v Presley (2015) 122 SASR 476 at 494 [95]. Bell Nettle Gordon As noted earlier, in common to each appeal was a ground contending that the verdict was unreasonable because it was not supported by the evidence. The ground was largely advanced by reference to the unchallenged evidence of the appellant's intoxication. Determination of this ground in each case required the Court of Criminal Appeal to engage with the evidence and consider for itself the findings that were open as to what the appellant did in connection with the second altercation. The inferences to be drawn from these findings needed to be assessed in the context of the findings that were open as to the appellant's state of intoxication. It was necessary to consider whether the prosecution had excluded the reasonable possibility that, by reason of his intoxication, the appellant had not in fact come to an understanding or arrangement with the others to inflict grievous bodily harm or to assault a person or persons in Grant Street102. In the event that the Court of Criminal Appeal was satisfied that it was open to find that the appellant was a party to an agreement at least to assault a person or persons in Grant Street, it remained to consider whether the prosecution had excluded the reasonable possibility that, by reason of his intoxication, the appellant did not in fact foresee that one of his co-venturers might kill or inflict grievous bodily harm on a person or persons in Grant Street intending so to do. In dealing with each appellant's ground that the verdict was unreasonable, the Court of Criminal Appeal did no more than refer to its summary of the evidence and the way the prosecution had put its case at the trial. In no case did the Court review the evidence as it related to the appellant and address the asserted deficiencies in its capacity to establish the nature, if any, of his participation in the second altercation. Nor did the Court assess the significance of the evidence of the appellant's intoxication to its conclusion. In Presley's appeal, the whole of the Court's reasoning for rejecting the ground that the verdict was unreasonable is103: "Earlier in these reasons we have set out the prosecution case against Presley of his presence and participation. We have identified the evidence led in the trial to support this case. In our view, the evidence allowed the jury to conclude that Presley was present and did participate in the attack on Mr Hall and that he did so with the necessary criminal intent." 102 R v O'Connor (1980) 146 CLR 64; [1980] HCA 17. 103 R v Presley (2015) 122 SASR 476 at 496-497 [109]. Bell Nettle Gordon In Miller's appeal, the whole of the Court's reasoning for rejecting the ground that the verdicts were unreasonable is104: "In our view, given the concession that Miller was present at the time of the incident, the other facts were capable of establishing that Miller was acting with the others and was either party to a plan to inflict grievous bodily harm or foresaw that possibility. With respect to the other charge, the other facts were capable of establishing that Miller was party to a plan to assault. We do not consider that any basis has been made out to establish that the verdicts are unreasonable or cannot be supported having regard to the evidence as far as Miller is concerned." In Smith's appeal, the whole of the Court's reasoning for rejecting the ground that the verdicts were unreasonable is105: "We have earlier set out the evidence against Smith. In our view, there was sufficient evidence to leave it open to the jury to find that Smith was present at the scene and participated in the attack with the necessary intent." Miller and Presley submit that the Court of Criminal Appeal erred in rejecting the ground that the verdicts are unreasonable. They invite this Court to allow their appeals and to substitute verdicts of acquittal. On the hearing in this Court, Smith made a less ambitious submission. He accepted that it is not usually appropriate for this Court to embark on an assessment of the sufficiency of evidence to support a verdict in circumstances in which the Court of Criminal Appeal has not undertaken that task106. He submitted that the appropriate order is to remit the proceedings to the Court of Criminal Appeal. That submission should be accepted. The proceedings in each case must be remitted to the Court of Criminal Appeal for determination of the ground which contends that the verdicts in the appeals of Miller and Smith and the verdict in the appeal of Presley are not supported by the evidence. 104 R v Presley (2015) 122 SASR 476 at 499 [126]-[127]. 105 R v Presley (2015) 122 SASR 476 at 507 [156]. 106 Cornwell v The Queen (2007) 231 CLR 260 at 300 [102] per Gleeson CJ, Gummow, Heydon and Crennan JJ; [2007] HCA 12. Bell Nettle Gordon Orders The following orders should be made: Matter No A28/2015 Appeal allowed. Set aside the order of the Court of Criminal Appeal of the Supreme Court of South Australia made on 28 April 2015. Remit determination. the matter the Court of Criminal Appeal for Matters No A22/2015 and No A17/2015 Special leave to appeal granted. Appeal treated as instituted and heard instanter and allowed. Set aside the order of the Court of Criminal Appeal of the Supreme Court of South Australia made on 28 April 2015. Remit determination. the matter the Court of Criminal Appeal for GAGELER J. The common law imposes criminal liability on one person, a secondary party, for an offence committed by another person, a primary party, where the secondary party intentionally assists or encourages the commission of the offence by the primary party. The common law also imposes criminal liability on a secondary party where the primary party commits the offence as part of a criminal enterprise in which the secondary party participates. The criminal liability of the secondary party in the first of those circumstances is commonly referred to as "accessorial liability". The criminal liability of the secondary party in the second of those circumstances is commonly referred to as "joint criminal enterprise liability". There is a real question as to whether accessorial liability and joint criminal enterprise liability are distinct in concept, and in particular as to whether joint criminal enterprise liability is anything more than a subcategory of accessorial liability. The question has been debated academically107 and conflicting answers have been suggested judicially108. The question has not previously arisen for definitive resolution in this Court and does not arise for definitive resolution now. Procedural and substantive differences attaching Accessorial liability and joint criminal enterprise liability overlap in to different practice. subcategories of accessorial liability have long been abrogated by statutory provisions in the form of s 267 of the Criminal Law Consolidation Act 1935 (SA). With the abrogation of those differences, where accessorial liability and joint criminal enterprise liability have overlapped in practice there has seldom been seen to be any practical need to distinguish between them. Common to accessorial liability and joint criminal enterprise liability is the mental element of intention: in order to be liable, a secondary party must intend the commission of the offence by the primary party. The common law for a long time treated intention as a matter for objective determination: a party was taken to intend a probable consequence of an act which that party did or to which that party agreed. Early commentaries on criminal liability at common law, particularly those of Sir Michael Foster in the middle of the eighteenth century 107 Bronitt and McSherry, Principles of Criminal Law, 3rd ed (2010) at 424; Simester et al, Simester and Sullivan's Criminal Law, 5th ed (2013) at 244-249; Ormerod and Laird, Smith and Hogan's Criminal Law, 14th ed (2015) at 259-260. 108 Compare Gillard v The Queen (2003) 219 CLR 1 at 35 [109]; [2003] HCA 64 and Likiardopoulos v The Queen (2012) 247 CLR 265 at 270 [7], 273-277 [19]-[28]; [2012] HCA 37 with Darkan v The Queen (2006) 227 CLR 373 at 397-398 [76]; [2006] HCA 34 and R v B, FG (2012) 114 SASR 170 at 175 [13], 178 [22], 179 and Sir James Stephen in the second half of the nineteenth century, need to be read cautiously in that light109. Not until towards the middle of the twentieth century did the common law firmly settle on understanding intention as wholly subjective β as an actual state of mind. Take, then, a simple case. Three men set out to rob a bank. They adopt a simple plan. One of them, the driver, is to wait in the car. The other two are to enter the bank. One is to wave a gun. The other is to put the money in a bag. The two who enter the bank encounter a security guard. The gunman shoots him and he dies. Who of the three is liable for murder? The traditional answer of the common law is that the criminal liability of each depends on the intention of each. The gunman is liable for murder if he shot the security guard intending to cause death or grievous harm. If the gunman is liable for murder, the bagman (who might in earlier times have been described as an accessory at the fact) and driver (who might in earlier times have been described as an accessory before the fact) are also liable for murder if they intended that the gunman would shoot with intention to cause death or grievous harm. Their intention need not have been absolute; it need only have been contingent. They may have hoped to get away with robbing the bank without anyone getting hurt. They need only have intended that the gunman would shoot to kill or cause grievous harm as a possible means of carrying out the plan β if worst came to worst110. But what if shooting to kill or cause grievous harm was never part of the plan? The gunman went too far. The gun was not meant to be loaded. The gun was meant only to frighten. The common law's traditional answer has been that the bagman and driver cannot be liable for a criminal act of the gunman that they never intended to occur111. 109 See the discussion in Woolmington v The Director of Public Prosecutions [1935] AC 462 at 474-475 (as to intention of a primary party) and in R v Johns [1978] 1 NSWLR 282 at 288-290 and Johns v The Queen (1980) 143 CLR 108 at 120-121, 131; [1980] HCA 3 (as to intention of a secondary party). 110 R v Kalinowski (1930) 31 SR (NSW) 377 at 380; Varley v The Queen (1976) 51 ALJR 243 at 246; 12 ALR 347 at 353; Markby v The Queen (1978) 140 CLR 108 at 112-113; [1978] HCA 29; Johns v The Queen (1980) 143 CLR 108 at 130-131; Miller v The Queen (1980) 55 ALJR 23 at 26; 32 ALR 321 at 326-327; Smith v The Queen (1993) 67 ALJR 706 at 706. 111 Varley v The Queen (1976) 51 ALJR 243 at 246; 12 ALR 347 at 353 and Markby v The Queen (1978) 140 CLR 108 at 112, referring with approval to R v Anderson [1966] 2 QB 110. See especially [1966] 2 QB 110 at 118-120. The common law has of late given a different answer. The bagman and driver need not have intended that the gunman would shoot to kill or cause grievous harm as a possible means of carrying out the plan to rob the bank. It is enough for them to be liable for murder that they foresaw the possibility that the gunman would take it upon himself to shoot to kill or cause grievous harm and that they participated in the plan to rob the bank with that foresight. The distinction between intention and foresight as a basis for imposing criminal liability, in this instance for murder, might seem a fine one where the group is three men, the weapon is a gun, and the plan is to take coordinated action to rob a bank. The distinction comes into sharp relief where the group is an indeterminate number of youths, the weapon is a knife or a baseball bat, and the plan is an evolving tacit agreement to assault or to engage in an affray. One of the group is more prone to violence. He goes further than the rest. He stabs or hits with intent to kill or cause grievous harm and someone dies. Other members of the group may never have intended things to turn out that way. Each member of the group is nevertheless liable for murder if he foresaw the possibility that the one more prone to violence would go beyond the plan and would stab or hit with intent to kill or cause grievous harm. Just when the common law came to admit of foresight as a sufficient basis for criminal liability can be traced to the advice of the Privy Council on appeal from Hong Kong in Chan Wing-Siu v The Queen112. The author of the advice was Sir Robin Cooke. Equating "contemplation" with "authorisation", the advice propounded a "wider principle" of secondary liability according to which a secondary party would be criminally liable for the commission by a primary party of an offence which the secondary party did "not necessarily intend" but which the secondary party did foresee as a "possible incident" of their "common unlawful enterprise". The "criminal culpability" of the secondary party according to that wider principle was said to lie in "participating in the venture with that foresight"113. The timing of the common law development can be traced more precisely to a comment on Chan Wing-Siu by Professor JC Smith in the Criminal Law Review in 1990. Professor Smith there pointed out in relation to the critical passage in Chan Wing-Siu that "contemplation" is not the same thing as "authorisation" and that "the general effect of the passage is that contemplation 113 [1985] AC 168 at 175. or foresight is enough"114. Until then, Chan Wing-Siu had not been understood that way by courts in England115 or in Australia116. Professor Smith went on to comment in 1997 that "[i]t may be that the law is too harsh and, if so, it could be modified so as to require intention (or even purpose) on the part of the accessory that, in the event which has occurred, the principal should act as he did"117. But by 1997 the common law had turned in the harsh direction to which Professor Smith had pointed in 1990. The turn occurred in England in 1990 in the decision of the Court of Appeal in R v Hyde118. Referring to its own emphatic rejection as late as 1989 of the suggestion that "a mere foresight of the real or definite possibility of violence being used is sufficient to constitute the mental element of murder", the Court of Appeal then said119: "On reconsideration, that passage is not in accordance with the principles set out by Sir Robin Cooke which we were endeavouring to follow and was wrong, or at least misleading. If B realises (without agreeing to such conduct being used) that A may kill or intentionally inflict serious injury, but nevertheless continues to participate with A in the venture, that will amount to a sufficient mental element for B to be guilty of murder if A, with the requisite intent, kills in the course of the venture. As Professor Smith points out, B has in those circumstances lent himself to the enterprise and by so doing he has given assistance and encouragement to A in carrying out an enterprise which B realises may involve murder." 114 Smith, "R v Wakely; R v Symonds; R v Holly", [1990] Criminal Law Review 119 115 See R v Slack [1989] QB 775; Smith, "R v Wakely; R v Symonds; R v Holly", [1990] Criminal Law Review 119. 116 See Mills v The Queen (1986) 61 ALJR 59 at 59; 68 ALR 455 at 455; [1986] HCA 71; Browne (1987) 30 A Crim R 278 at 306; R v Britten (1988) 49 SASR 47 at 53- 54; Woolley (1989) 42 A Crim R 418 at 437-438. 117 Smith, "Criminal Liability of Accessories: Law and Law Reform", (1997) 113 Law Quarterly Review 453 at 465. 119 [1991] 1 QB 134 at 139. Within a year, that new view of secondary criminal liability was adopted in a further decision of the Privy Council on appeal from Hong Kong120. Within 10 years, it was endorsed by the House of Lords in R v Powell121. The House of Lords there held that "it is sufficient to found a conviction for murder for a secondary party to have realised that in the course of the joint enterprise the primary party might kill with intent to do so or with intent to cause grievous bodily harm"122. The equivalent turn occurred in Australia in 1995 in the decision of this Court in McAuliffe v The Queen123. The Court there upheld a direction of a trial judge to the effect that all would be liable for murder where: three youths go to a park with a common intention of bashing whoever might be there; an act of one of them causing death is done with the intention of inflicting grievous harm; and each of the other two either share the intention of inflicting grievous harm or "contemplate the intentional infliction of grievous bodily harm as a possible incident of the common criminal enterprise" of bashing whoever might be in the park. McAuliffe was a unanimous decision of five members of the Court. Acknowledging that occasion had not arisen in Johns v The Queen124 for the Court to "turn its attention to the situation where one party foresees, but does not agree to, a crime other than that which is planned, and continues to participate in the venture"125, the Court in McAuliffe followed Chan Wing-Siu and R v Hyde to hold that the liability of the secondary party for the crime committed by the primary party was relevantly the same in each situation. The Court said126: "As Sir Robin Cooke observed, the criminal culpability lies in the participation in the joint criminal enterprise with the necessary foresight and that is so whether the foresight is that of an individual party or is shared by all parties. That is in accordance with the general principle of the criminal law that a person who intentionally assists in the commission 120 Hui Chi-Ming v The Queen [1992] 1 AC 34 at 50-51. 122 [1999] 1 AC 1 at 27. 123 (1995) 183 CLR 108; [1995] HCA 37. 124 (1980) 143 CLR 108. 125 (1995) 183 CLR 108 at 117. 126 (1995) 183 CLR 108 at 118. of a crime or encourages its commission may be convicted as a party to The awkwardness of the resultant common law doctrine, by which a member of a group setting out to commit one offence would become liable for a different offence committed by another member of the group if he or she foresees the possibility of that other member committing that different offence, was reflected in the labels the new doctrine came to be given. Professor Smith called it "parasitic accessory liability" and noted that it had "a savour of 'constructive crime'"127. In Australia, it became known as "extended common purpose" or "extended joint criminal enterprise liability". Very recently, the common law doctrine has been revisited by the Supreme Court of the United Kingdom in R v Jogee128 and by the Privy Council on appeal from Jamaica in Ruddock v The Queen129. "[T]he benefit of a much fuller analysis than on previous occasions when the topic [had] been considered" allowed the Supreme Court and the Privy Council to conclude that their earlier acceptance of the doctrine had been "based on an incomplete, and in some respects erroneous, reading of the previous case law, coupled with generalised and questionable policy arguments"130. The doctrine was said to have remained "highly controversial and a continuing source of difficulty for trial judges" and to have "led to large numbers of appeals"131. The Supreme Court and the Privy Council concluded that acceptance of the doctrine had been a "wrong turn"132. They held that the doctrine should be reversed and that the common law should be restated in accordance with previously established principles133. Unsurprisingly, the appellant and applicants for special leave to appeal moved promptly to invite this Court to follow the course taken by the Supreme Court and the Privy Council in restating the common law of Australia. In responding to that invitation, the procedural and pragmatic considerations 127 Smith, "Criminal Liability of Accessories: Law and Law Reform", (1997) 113 Law Quarterly Review 453 at 455, 464 (emphasis added). 128 [2016] 2 WLR 681; [2016] 2 All ER 1. 129 [2016] 2 WLR 681; [2016] 2 All ER 1. 130 [2016] 2 WLR 681 at 704 [79]-[80]; [2016] 2 All ER 1 at 24. 131 [2016] 2 WLR 681 at 704 [81]; [2016] 2 All ER 1 at 24. 132 [2016] 2 WLR 681 at 704 [82], 705 [85], [87]; [2016] 2 All ER 1 at 24, 25. 133 [2016] 2 WLR 681 at 705 [87]; [2016] 2 All ER 1 at 25. identified by the Supreme Court and the Privy Council for reversing the doctrine ushered in by Chan Wing-Siu must be acknowledged from the outset to have limited purchase in Australia. Prosecution reliance on extended joint criminal enterprise liability in Australia has been noted to have been a source of difficulty for judges, to have added to the complexity of jury directions, and to have contributed to the number of appeals134. But the problem has not been ignored by legislatures and law reform bodies in Australia. The common law of secondary liability has not for some time applied to offences under Commonwealth or Territory law and the entirety of the common law of secondary liability has recently been abolished by legislation implementation of recommendations of Weinberg JA, the Judicial College of Victoria and the Victorian Department of Justice136. Extensive legislative reform of the common law of secondary liability has been recommended by the New South Wales Law Reform Commission137. in Victoria135 the Apart from the effect on past convictions (an important topic to which I will need to return), for this Court now to reverse the doctrine of extended joint criminal enterprise would in practical terms amount to declaring that doctrine no longer to form part of the common law as it continues to govern secondary liability only in South Australia and New South Wales. This Court, moreover, cannot be said to have failed carefully to consider the doctrine until now. Of particular significance is that in 2006 the Court entertained a fully argued attempt to reopen McAuliffe in the course of refusing applications for special leave to appeal in Clayton v The Queen138. For reasons then elaborately given, the attempt to reopen McAuliffe was rejected by a majority of six to one. Reasons for refusing applications for special leave to appeal are not binding as precedents139. The indication of views of current 134 New South Wales Law Reform Commission, Complicity, Report No 129, (2010) at 135 Crimes Amendment (Abolition of Defensive Homicide) Act 2014 (Vic), s 6. 136 Weinberg, Simplification of Jury Directions Project: A Report to the Jury Directions Advisory Group, (2012). 137 New South Wales Law Reform Commission, Complicity, Report No 129, (2010). 138 (2006) 81 ALJR 439; 231 ALR 500; [2006] HCA 58. 139 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 at 133 [112], 134 [119]; [2015] HCA 37; Mason, "The Use and Abuse of Precedent", (1988) 4 Australian Bar Review 93 at 96-98. members of the Court contained in reasons for refusing applications for special leave to appeal can nevertheless have a significant effect on legal practice. The Clayton refusal had just that effect. In 2007, Kirby J, who had been the sole dissentient in Clayton, said that "[w]hatever doubts or hesitations existed earlier concerning the common law of Australia in this respect, the decision in Clayton has to be taken as settling the matter, at least for the present"140. Since then, the Court has reapplied McAuliffe, declining an express invitation in 2012 "to establish a more principled and unified approach to when a person should be criminally responsible for the acts of another"141. If the common law of Australia is now to be returned to the path it was on before McAuliffe, the only justification could be that the return is compelled by principle142. Consideration of principle must examine the reason for following Chan Wing-Siu and R v Hyde stated by all five members of the Court more than 20 years ago in McAuliffe. Consideration of principle must also grapple with the reasons for not reopening McAuliffe given by six members of the Court nearly 10 years ago in Clayton. One of the reasons given in Clayton for not reopening McAuliffe was that other countries continued to apply a similar doctrine. That reason has been overtaken by Jogee and Ruddock. Other reasons have not. Just one reason was stated in McAuliffe for following Chan Wing-Siu and R v Hyde. That reason, as has already been noted, was that to hold a secondary party liable for a crime committed by a primary party on the basis of the secondary party's participation in a joint criminal enterprise with foresight of that crime accorded with the general principle of the criminal law that a person who intentionally assists in or encourages the commission of a crime may be convicted of that crime. McAuliffe's identification of the applicable general principle of the criminal law is undoubtedly correct: a person who intentionally assists in or encourages the commission of a crime may be convicted as a party to that crime. The principle explains accessorial liability and (if there is a difference) joint criminal enterprise liability. The problem is that the general principle does not explain why a secondary party should be liable for a crime committed by a primary party which 140 R v Taufahema (2007) 228 CLR 232 at 274 [114]; [2007] HCA 11 (footnote omitted). 141 See Likiardopoulos v The Queen (2012) 247 CLR 265 at 268. 142 Cf Imbree v McNeilly (2008) 236 CLR 510 at 526 [45]; [2008] HCA 40. the secondary party neither intentionally assisted nor encouraged. In short, the principle does not explain McAuliffe's extension of criminal liability beyond accessorial liability or joint criminal enterprise liability. Of the numerous criticisms of the extension of criminal liability ushered in by Chan Wing-Siu and R v Hyde which are to be found in Jogee and Ruddock and in the formidable dissent of Kirby J in Clayton, two predominate. The first is that making a party liable for a crime which that party foresaw but did not intend disconnects criminal liability from moral culpability. The second is that making the criminal liability of the secondary party turn on foresight when the criminal liability of a principal party turns on intention creates an anomaly. To my mind, those two criticisms are unanswerable. The first is fundamental, and the second is related to the first. The anomaly demonstrates incoherence in the imposition of criminal liability. The incoherence in turn highlights the disconnection between criminal liability and moral culpability. The common law has developed ordinarily to insist that justice requires that a primary party become criminally liable only by acting with intention, albeit that in the case of murder the requisite intention is not confined to an intention that the victim be killed but can be an intention that the victim suffer very serious injury, and albeit that in a case of manslaughter special considerations apply. Exceptions to the principle that intention is an element of an offence at common law have been few, and the overall trend of the case law has been for the exceptions to become fewer. The imposition of liability in the category of case sometimes described as murder by recklessness is not an exception, at least in any presently meaningful sense. To the contrary, contrasting liability of a secondary party for extended joint criminal enterprise murder with liability of a primary party for reckless murder illustrates both the incoherence and the disconnection. According to the narrow view of murder by recklessness, which has prevailed in Australia, the concept of recklessness is confined to engaging in an act expecting its probable result to be death or grievous harm. Acting with that expectation has been seen to be acting with a state of mind "comparable" to acting with an intention to kill or to do grievous harm in that acting with that expectation is "just as blameworthy"143. But even on the wide view of murder by recklessness, now rejected, the concept of recklessness was understood to involve more than mere foresight of a possible result: it required foresight to be 143 R v Crabbe (1985) 156 CLR 464 at 469; [1985] HCA 22. coupled with willingness to run the risk of the result occurring so as to amount to indifference to a foreseen result144. Underlying the Australian common law's preference for the narrow view over the wide view of murder by recklessness has been acknowledgement of a basic distinction in terms of moral culpability between acting with an intention or an equivalent expectation and acting with mere foresight. Acknowledgement of that basic distinction in terms of moral culpability has in turn been seen to be reflected in the common law distinction between murder and manslaughter. Gibbs J explained in La Fontaine v The Queen145: "There is a great difference between the state of mind of an accused who is prepared to risk the consequences of death or grievous bodily harm that he foresees as probable and that of an accused who does no more than take the chance that death or serious injury may ensue although it seems an unlikely consequence. The act of the former is much more worthy of blame than that of the latter. To treat knowledge of a possibility as having the same consequences as knowledge of a probability would be to adopt a stringent test which would seem to obliterate almost totally the distinction between murder and manslaughter." Consistently with accepting higher moral culpability to attach to acting with intention and lower moral culpability to attach to acting with mere foresight, Gibbs ACJ spelt out the gradations of criminal responsibility of participants in a joint criminal enterprise resulting in death in Markby v The Queen146: "When two persons embark on a common unlawful design, the liability of one for acts done by the other depends on whether what was done was within the scope of the common design. Thus if two men go out to rob another, with the common design of using whatever force is necessary to achieve their object, even if that involves the killing of, or the infliction of grievous bodily harm on, the victim, both will be guilty of murder if the victim is killed ... If, however, two men attack another without any intention to cause death or grievous bodily harm, and during the course of the attack one man forms an intention to kill the victim, and strikes the fatal blow with that intention, he may be convicted of murder while the other participant in the plan may be convicted of manslaughter ... The reason why the principal assailant is guilty of murder and the other participant only of manslaughter in such a case is that the former had an 144 Pemble v The Queen (1971) 124 CLR 107 at 119; [1971] HCA 20. 145 (1976) 136 CLR 62 at 76; [1976] HCA 52. 146 (1978) 140 CLR 108 at 112. actual intention to kill whereas the latter never intended that death or grievous bodily harm be caused to the victim, and if there had not been a departure from the common purpose the death of the victim would have rendered the two participants guilty of manslaughter only. In some cases the inactive participant in the common design may escape liability either for murder or manslaughter. If the principal assailant has gone completely beyond the scope of the common design, and for example 'has used a weapon and acted in a way which no party to that common design could suspect', the inactive participant is not guilty of either murder or manslaughter". Those very clear gradations of criminal responsibility of participants in a joint criminal enterprise resulting in death have been blurred by the choice made in McAuliffe147. The gradations should in my view have been maintained. To hold a secondary party liable for a crime committed by a primary party which the secondary party foresaw but did not intend does not measure up against the informing principle of the common law "that there should be a close correlation between moral culpability and legal responsibility"148. In the language of King CJ, who stood against the introduction of the doctrine of extended joint criminal enterprise into the common law of Australia during the period after Chan Wing-Siu and before McAuliffe, the doctrine results in "the unjust conviction of persons of crimes of which they could not be said, in any true sense, to be guilty"149. The fundamental problem that the doctrine fails to align criminal liability with moral culpability was not, to my mind, answered by the majority in Clayton in the suggestion that "criminal culpability lies in the continued participation in the joint enterprise with the necessary foresight" or in the observation that a primary party as well as a secondary party can be liable for murder without intending that a victim be killed150. Neither the suggestion nor the observation explains how it is consistent with justice and principle that a secondary party is criminally liable for acting merely with foresight of the possibility of the primary party acting with intent. 147 Cf Gillard v The Queen (2003) 219 CLR 1. 148 Wilson v The Queen (1992) 174 CLR 313 at 334; [1992] HCA 31. 149 R v Britten (1988) 49 SASR 47 at 54. 150 (2006) 81 ALJR 439 at 443 [17]; 231 ALR 500 at 504-505. See also to similar effect Gillard v The Queen (2003) 219 CLR 1 at 38 [118]-[119]. The The prosecution seeks to provide the missing explanation. prosecution asserts that the imposition of criminal liability on a participant in a joint criminal enterprise for acting with foresight of the commission of a more serious crime is necessary to prevent a "gap" in the law. To support the existence of and need to fill that gap, the prosecution invokes the policy justification that the doctrine is necessary to address the important social problem of escalating gang violence. The prosecution points in support of that policy justification to social science research said to show that individuals behave differently when they are in groups β they take more risks, feel pressure to conform to the majority, and feel less personal responsibility151. What the prosecution seeks to characterise as a gap in the law is nothing more or less than the difference between the limit of secondary criminal liability as traditionally understood and the limit of secondary criminal liability as extended following Chan Wing-Siu. There is in truth no gap to be filled. Absent the extension of secondary criminal liability, there would be no hole in the legal fabric which would need to be mended. There would be an absence of secondary criminal liability in circumstances now covered solely by the extension. There would be an alignment of criminal liability with moral culpability. What the prosecution advances as the policy justification for the extension is a highly contestable normative judgment about the appropriate legal response to a particular social problem. The policy justification was once proffered in the House of Lords152, but is now rejected by the Supreme Court of the United Kingdom and the Privy Council153. Courts must of course make normative judgments in the course of adapting the common law to meet contemporary social conditions. But courts must be extremely cautious about refashioning common law principles to expand criminal liability. Escalating gang violence is hardly a new social phenomenon. Whether some, and if so what, modification of common law principles of secondary criminal liability is needed to address that particular social problem in a contemporary setting is appropriately a question for legislative consideration. Significantly, no law reform body considering the problem has seen fit to 151 Cromwell et al, "Group Effects on Decision-making by Burglars", (1991) 69 Psychological Reports 579 and Marshall, Webb and Tilley, Rationalisation of Current Research on Guns, Gangs and Other Weapons: Phase 1, (2005), both referred to in The Law Commission, Participating in Crime, Law Com No 305, 152 See R v Powell [1999] 1 AC 1 at 14. 153 R v Jogee [2016] 2 WLR 681 at 702-703 [74]-[75]; [2016] 2 All ER 1 at 23. recommend that the appropriate response is to impose secondary criminal liability by reference only to foresight. Whether the social science literature to which the prosecution points provides an empirical basis for drawing any general conclusion about gang behaviour has been questioned academically154 and was not scrutinised in argument. The literature does nothing to dispel the concern expressed by Kirby J in Clayton that the extension of secondary criminal liability to individuals unable to extricate themselves from a group as violence gets out of hand operates to catch potentially weak and vulnerable secondary offenders, fixing them with "very serious criminal liability because they were in the wrong place at the wrong time in the wrong company"155. The majority in Clayton gave as another reason for refusing to reopen McAuliffe that it would be inappropriate to reconsider the doctrine of extended joint criminal enterprise without reconsidering other aspects of common law criminal responsibility including the whole of the law with respect to secondary liability for crime156. I cannot agree. Adoption of the doctrine was a discrete judicial development. The doctrine is capable of discrete judicial reversal. Whatever room there may be for debate as to their jurisprudential foundation, and however much they might yet be improved by reconsideration and re- expression, the common law principles of secondary liability apart from the doctrine of extended joint criminal enterprise would remain unaffected by its excision. The distinction between murder and manslaughter in a case of joint criminal enterprise would re-emerge with clarity. One further consideration, not mentioned in Clayton and not now raised by the prosecution, must be addressed. It is the systemic consideration of stability. To declare the common law in a case such as this is to declare the common law for the past as well as the future. To reopen and overrule McAuliffe would be to hold that the doctrine McAuliffe introduced has never been part of the common law of Australia. The overruling of McAuliffe would not of itself alter the legal rights of persons whose criminal liability has already merged in conviction. The overruling would nevertheless create a legitimate sense of injustice in persons who have been convicted on the assumption that the doctrine of extended joint criminal enterprise formed part of the common law of Australia and raise the real prospect of many of them seeking to have their convictions 154 Green and McGourlay, "The Wolf Packs in Our Midst and Other Products of Criminal Joint Enterprise Prosecutions", (2015) 79 Journal of Criminal Law 280 at 155 (2006) 81 ALJR 439 at 463 [119]; 231 ALR 500 at 531. 156 (2006) 81 ALJR 439 at 443-444 [19]-[20]; 231 ALR 500 at 505. overturned by invoking such avenues of legal redress as may remain available to them. The overruling would also raise the prospect of criticism of a court system which could proceed on an erroneous view of the common law for more than 20 years. Troubling as that consideration is, it cannot be decisive. The doctrine of extended joint criminal enterprise is neither deeply entrenched nor widely enmeshed within our legal system. The problem the doctrine has created is one of over-criminalisation. To excise it would do more to strengthen the common law than to weaken it. Where personal liberty is at stake, no less than where constitutional issues are in play, I have no doubt that it is better that this Court be "ultimately right" than that it be "persistently wrong"157. The doctrine of extended joint criminal enterprise is anomalous and unjust. The occasion for its reconsideration having been squarely presented, I cannot countenance its perpetuation. Dissenting from the view of the majority, I would reopen and overrule McAuliffe. To overrule McAuliffe would mean that one of the pathways to criminal liability for murder left to the jury in respect of the appellant and each applicant for special leave to appeal was not open in law. On that basis, I would accede to each application for special leave to appeal and, in each appeal, allow the appeal and set aside the order of the Full Court of the Supreme Court of South Australia. In place of that order, I would quash the convictions and order a retrial on counts other than those which rely on extended joint criminal enterprise. 157 Wurridjal v The Commonwealth (2009) 237 CLR 309 at 350 [65]; [2009] HCA 2, quoting Australian Agricultural Co v Federated Engine-Drivers and Firemen's Association of Australasia (1913) 17 CLR 261 at 278; [1913] HCA 41. 131 KEANE J. I agree that the applications for special leave should be granted and the appeals should be allowed for the reasons given by French CJ, Kiefel, Bell, Nettle and Gordon JJ. I also agree with their Honours' reasons for concluding that the common law in Australia should not be altered by the rejection of the principle of criminal responsibility associated with the doctrine known as extended joint criminal enterprise. I wish to add some brief observations upon the issues of principle and policy exposed by the divergence of approach which has emerged between this Court and the Supreme Court of the United Kingdom following its decision in R v Jogee158. Jogee In Jogee, the Supreme Court held that the Privy Council's decision in Chan Wing-Siu v The Queen159 should be overruled in so far as it supports the proposition that if two people set out to commit an offence (crime A), and in the course of it one of them commits another offence (crime B), the second person is guilty as an accessory to crime B if he or she foresaw it as a possibility, but did not necessarily intend it. The Supreme Court (Lord Hughes and Lord Toulson JJSC, with whom Lord Neuberger of Abbotsbury PSC, Lord Thomas of Cwmgiedd CJ and Baroness Hale of Richmond DPSC agreed) said160: "The error [in Chan Wing-Siu] was to equate foresight with intent to assist, as a matter of law; the correct approach is to treat it as evidence of intent. The long-standing pre Chan Wing-Siu practice of inferring intent to assist from a common criminal purpose which includes the further crime, if the occasion for it were to arise, was always a legitimate one; what was illegitimate was to treat foresight as an inevitable yardstick of common purpose." Their Lordships considered that Chan Wing-Siu "brings the striking anomaly of requiring a lower mental threshold for guilt in the case of the accessory than in the case of the principal."161 In this regard, it was said to be anomalous that "foreseeability of death or really serious harm was not sufficient 158 [2016] 2 WLR 681; [2016] 2 All ER 1. 160 [2016] 2 WLR 681 at 705 [87]; [2016] 2 All ER 1 at 25. 161 [2016] 2 WLR 681 at 704 [84]; [2016] 2 All ER 1 at 25. mens rea for the principal to be guilty of murder, but was sufficient in a secondary party."162 The Australian position In Gillard v The Queen163, Hayne J, with whom Gummow J agreed164, explained that the decision in McAuliffe v The Queen165 is founded on the notion that the criminal culpability of a participant in a criminal joint venture for an "incidental crime, when its commission is foreseen but not agreed β¦ lies in the participation in the joint criminal enterprise with the necessary foresight." Similarly, Gleeson CJ and Callinan J166, with whom Kirby J agreed167, identified the basis of responsibility for the incidental crime in continued participation in the venture with foresight of that crime as a possibility. Continued participation with that foresight "is regarded as intentionally assisting in the commission" of that crime168. In Clayton v The Queen169, six members of this Court declined to reconsider the position established in McAuliffe and Gillard, and emphasised that, while accessorial responsibility is grounded in the secondary party's intentional contribution to a particular crime, the criminal responsibility of a participant in a joint criminal enterprise is grounded in the authorisation of a crime which is incidental to the enterprise170. Considerations of principle The position established in Australian law by these decisions does not deny or diminish the importance of the overarching concern that criminal responsibility should reflect the moral culpability of the individual offender. 162 [2016] 2 WLR 681 at 698 [55]; [2016] 2 All ER 1 at 19. 163 (2003) 219 CLR 1 at 36 [112]; [2003] HCA 64 (footnote omitted). 164 (2003) 219 CLR 1 at 15 [31]. 165 (1995) 183 CLR 108 esp at 113-114; [1995] HCA 37. 166 (2003) 219 CLR 1 at 13-14 [25]. 167 (2003) 219 CLR 1 at 30 [85]. 168 (2003) 219 CLR 1 at 14 [25]. 169 (2006) 81 ALJR 439; 231 ALR 500; [2006] HCA 58. 170 Clayton v The Queen (2006) 81 ALJR 439 at 444 [20]; 231 ALR 500 at 505. Rather, the Australian position recognises that deliberate participation in a joint criminal enterprise which carries a foreseen risk of an incidental crime itself has an important bearing upon the individual moral culpability of each participant for the incidental crime. The implications of deliberate participation in a criminal enterprise for the moral culpability of each individual participant are ignored if one adopts an analysis of criminal responsibility which starts from an assumption that the person who commits the actus reus of the incidental offence is the principal offender and all others complicit in that offence are to be regarded as having accessorial responsibility only. The moral culpability of a participant in a crime will not always be revealed by an analysis which assumes that the participant has merely aided or abetted the commission of the actus reus by the principal offender171. In particular, where two or more persons agree to commit a crime together knowing that its execution includes the risk of the commission of another crime in the course of its execution, there is no obvious reason, in terms of individual moral culpability, why the person who commits the actus reus should bear primary criminal responsibility, as between himself or herself and the other participants to the joint criminal enterprise, for the incidental crime. Because of the fact of the agreement to carry out jointly the criminal enterprise, the person who commits the actus reus of the incidental crime is necessarily acting as the instrument of the other participants to deal with the foreseen exigencies of carrying their enterprise into effect. The decision in Jogee proceeds squarely on the basis that cases of complicity in a crime must be analysed as a subset of accessorial liability172. To insist that the liability of participants in a joint criminal enterprise be analysed exclusively in terms of accessorial liability is to fail to recognise that each participant in a joint criminal enterprise is not merely an accessory to a crime committed by someone else. Where parties commit to a joint criminal enterprise, each participant becomes, by reason of that commitment, both the principal and the agent of the other participants: for the purposes of that enterprise they are partners in crime. Each participant also necessarily authorises those acts which he or she foresees as possible incidents of carrying out the enterprise in which he or she has agreed, and continues, to participate. It is to be understood, of course, that the agreement to participate in a joint criminal enterprise, while it may be inferred from the circumstances, must be proved as a fact beyond reasonable doubt. 171 Simester, "The Mental Element in Complicity", (2006) 122 Law Quarterly Review 578; Simester and Sullivan, Criminal Law: Theory and Doctrine, 3rd ed (2007) at 228; Clayton v The Queen (2006) 81 ALJR 439 at 444 [20]; 231 ALR 500 at 505. 172 [2016] 2 WLR 681 at 704 [78]; [2016] 2 All ER 1 at 24. As to the anomaly identified in Jogee173, namely that under the approach in Chan Wing-Siu foreseeability of death or really serious injury is not a sufficient mens rea for the principal to be guilty of murder, but is sufficient in a secondary party, two points may be made. First, the anomaly is said to lie in a comparison of the position of the person who performs the actus reus as the principal, with that of the participant who is described as the secondary party. But to say this is to identify the person who commits the actus reus as the principal. For reasons already stated, in cases of an agreed pursuit of a criminal purpose, one is not concerned with the criminal responsibility of a party whose involvement is merely "secondary". One is concerned with the criminal responsibility of each of two principal parties to a criminal enterprise for incidents which occur in carrying it out. Secondly, there is little reason to conclude that the person who commits the actus reus of the incidental crime should bear a greater degree of moral culpability for that crime than those of his or her consorts whose instrument he or she became for the purpose of dealing with the exigencies of carrying the joint enterprise into execution where those exigencies have subjectively been foreseen by them. There is little reason why one who organises a crime should be regarded as less morally culpable for the risks of carrying it out, which he or she foresees, than those deployed to deal with those risks. To say that those who join together to organise the commission of a crime, in circumstances which involve the acceptance of the risk of the commission of an incidental crime in the course of carrying out their enterprise, are less morally culpable for the incidental crime than their consort who actually does the dirty work, is to appeal to a sense of morality which could commend itself only to the criminal elite. In Jogee174, Sir Robin Cooke's reasons in Chan Wing-Siu were also criticised because, as was said, they "elided foresight with authorisation". But the reasoning of Sir Robin Cooke does not equate contemplation with authorisation, or otherwise merge these concepts. Rather, his Lordship held that participation in the commission of a crime, with foresight of the risk of the incidental crime, establishes authorisation of the incidental crime where the foreseen risk eventuates175. The concept of authorisation of an incidental crime is no less apt to capture the degree of individual moral culpability for that crime than the concept of "conditional intent" propounded in Jogee176. 173 [2016] 2 WLR 681 at 698-699 [55], see also at 704 [84]; [2016] 2 All ER 1 at 19, see also at 25. 174 [2016] 2 WLR 681 at 701 [65]; [2016] 2 All ER 1 at 21. 175 Chan Wing-Siu v The Queen [1985] AC 168 at 175. 176 [2016] 2 WLR 681 at 707 [94]; [2016] 2 All ER 1 at 27. In Jogee177, it was said that authorisation of crime B cannot "automatically be inferred from continued participation in crime A with foresight of crime B" because it "makes guilty those who foresee crime B but never intended it or wanted it to happen." But no one disputes that a person may be held criminally responsible for an occurrence even though he or she does not want it to happen178. The circumstance that a party to a robbery might fervently hope that no one will be killed in the course of carrying it out is hardly a reason to hold that that party did not authorise, and thereby intend, an intentional killing where that occurrence was actually foreseen as a possible incident of carrying out the robbery. The final criticism in Jogee of the reasoning of Sir Robin Cooke in Chan Wing-Siu which may be noted here was that it is "illegitimate β¦ to treat foresight as an inevitable yardstick of common purpose."179 But, as is apparent from McAuliffe, Gillard and Clayton, foresight is not a yardstick of common purpose; rather it is a basis for concluding that what occurred in the pursuit of the common purpose was subjectively authorised by each participant. Considerations of policy As a matter of policy, it is well-recognised that the pursuit of a joint criminal enterprise necessarily involves a substantial element of unpredictability, which exposes the participants, their victims and the general public to the unacceptable risk that a crime additional to that which motivated the enterprise might be committed180. It is perfectly intelligible, as a matter of policy, that the law should expose each participant in a joint criminal enterprise to punishment for an incidental crime if he or she actually foresees the risk of the commission of the incidental crime and authorises the eventuation of that risk as part of his or her continued participation in the enterprise. The appellants' contention that a participant in a joint criminal enterprise does not, by the "mere" fact of agreement to participate, make any causal contribution to the commission of the actus reus of the incidental crime is not at all compelling. It is trite that a group is a more potent force, even in purely 177 [2016] 2 WLR 681 at 701 [66]; [2016] 2 All ER 1 at 21. 178 Zaburoni v The Queen (2016) 90 ALJR 492 at 496 [18]; 330 ALR 49 at 54-55; [2016] HCA 12; see also R v Moloney [1985] AC 905 at 926. 179 [2016] 2 WLR 681 at 705 [87]; [2016] 2 All ER 1 at 25. 180 Johns v The Queen (1980) 143 CLR 108 at 118; [1980] HCA 3; R v Powell [1999] 1 AC 1 at 14. physical terms, than an individual acting alone: there is strength in numbers181. In addition, members of groups acting together tend to exhibit higher levels of moral disinhibition in their interactions with other persons than occurs when individuals act alone182. McAuliffe is a powerful illustration of this phenomenon. The strength of the policy of protecting the public from the dangerous exigencies of the pursuit of joint criminal enterprises was acknowledged in England in R v Powell183; nothing has occurred since to cause a reappraisal of the strength of that consideration. In addition, where a joint criminal enterprise is in the nature of a business activity on the part of the participants, as was the case in Gillard, the reasons of policy which support the Australian position are no less strong. Where crime is a business the conduct of which puts the lives of innocent citizens at risk, it is not sound policy to minimise the criminal responsibility of those who organise crime, and in so doing create the foreseen risk of an incidental crime, merely because they are able to engage others as their agents for that purpose. For this Court now to accept the invitation to depart from the position established in McAuliffe would create a serious "want of continuity in the interpretation of the law."184 Only the most compelling grounds would justify such a course, given that since McAuliffe this Court has twice affirmed that it correctly stated the common law in Australia. For the reasons stated above, the grounds for taking that course are far from compelling. On the contrary, considerations of principle and policy provide strong support for maintaining the Australian position. 181 R v Jogee [2016] 2 WLR 681 at 687 [11]; [2016] 2 All ER 1 at 8. 182 R v Jogee [2016] 2 WLR 681 at 687 [11]; [2016] 2 All ER 1 at 8. 183 [1999] 1 AC 1 at 14, 25. 184 The Tramways Case [No 1] (1914) 18 CLR 54 at 58; [1914] HCA 15; Attwells v Jackson Lalic Lawyers Pty Ltd (2016) 90 ALJR 572 at 579 [28]; 331 ALR 1 at 8; [2016] HCA 16. |
HIGH COURT OF AUSTRALIA STATE OF WESTERN AUSTRALIA APPELLANT AND ALEXANDER BROWN & ORS RESPONDENTS Western Australia v Brown [2014] HCA 8 12 March 2014 ORDER Appeal dismissed. Appellant to pay the costs of the first respondents. On appeal from the Federal Court of Australia Representation G R Donaldson SC, Solicitor-General for the State of Western Australia with G J Ranson for the appellant (instructed by State Solicitor (WA)) B W Walker QC with R W Blowes SC and C L Tan for the first respondents (instructed by Yamatji Marlpa Aboriginal Corporation) P D Quinlan SC with J M Bursle for the second respondents (instructed by Ashurst) Intervener M G Hinton QC, Solicitor-General for the State of South Australia with D F O'Leary for the Attorney-General for the State of South Australia, as amicus curiae (instructed by Crown Solicitor (SA)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Western Australia v Brown Native title β Native title rights in relation to land β Agreement made in 1964 between State of Western Australia and joint venturers to develop iron ore deposits at Mount Goldsworthy β Mineral leases for iron ore granted pursuant to agreement β Joint venturers required under agreement to give State and third parties access to land subject of mineral leases provided such access did not unduly prejudice or interfere with joint venturers' operations β Whether mineral leases granted joint venturers right of exclusive possession β Whether joint venturers' rights under mineral leases inconsistent with claimed native title rights and interests β Whether claimed native title rights and interests extinguished by actual or potential conflicting use or development of land by joint venturers subsequent to grant of mineral leases. Words and phrases β "exclusive possession", "extinguishment", "inconsistency of rights". Iron Ore (Mount Goldsworthy) Agreement Act 1964 (WA), Schedule. FRENCH CJ, HAYNE, KIEFEL, GAGELER AND KEANE JJ. In 1964, the State of Western Australia made an agreement with some joint venturers about the development and exploitation of iron ore deposits at Mount Goldsworthy. The agreement was approved by s 4(1) of the Iron Ore (Mount Goldsworthy) Agreement Act 1964 (WA) and it is convenient to refer to it as "the State Agreement". The State Agreement obliged the State to grant, and the State did grant, to the joint venturers mineral leases for iron ore (in a form provided by the agreement). Two leases are relevant to this matter. Each was for a term which expired in 1986, with the right to renew from time to time for further periods each of 21 years. Each has been renewed and is still in force. The parties to this litigation agree that, subject to the question of extinguishment, the Ngarla People hold native title to the land which is subject to the two mineral leases. The parties agree that the relevant native title rights and interests are non-exclusive rights (a) to access and camp on the land; (b) to take flora, fauna, fish, water and other traditional resources (excluding minerals) from the land; (c) to engage in ritual and ceremony on the land; and (d) to care for, maintain and protect from physical harm particular sites and areas of significance to the native title holders. Did the grant of the mineral leases extinguish those native title rights and interests in relation to the land subject to the mineral leases? This Court's decision in Western Australia v Ward1 requires that the question be answered "No". The rights granted under the mineral leases are not inconsistent with the claimed native title rights and interests. The State Agreement The Mount Goldsworthy iron ore project was a very large development. The State Agreement made detailed provisions about the rights and obligations of the State and of the joint venturers. It is enough, for present purposes, to notice only the following provisions. The State Agreement provided2 that, "[a]s soon as conveniently may be" after the commencement date specified in the agreement, and after application by the joint venturers, the State would grant the joint venturers "a mineral lease ... for iron ore" in the form provided in the schedule to the agreement and later (2002) 213 CLR 1; [2002] HCA 28. Iron Ore (Mount Goldsworthy) Agreement Act 1964 (WA), Schedule, cl 8(2)(a). Hayne grant3 similar mineral leases over other areas. The form of mineral lease provided by the State Agreement was generally similar to the form of mineral lease then provided by the Mining Act 1904 (WA). The State agreed4 that, subject to the joint venturers performing their obligations under the State Agreement, the State and its authorities would not resume any property used for the purposes of the agreement. The State further agreed5 not to rezone the land which was the subject of a mineral lease granted in accordance with the State Agreement. The joint venturers agreed6 that, within three years of the commencement date fixed by the State Agreement, they would do all that was necessary to enable them to mine iron ore from the land the subject of the initial mineral lease, to transport ore by rail to the joint venturers' wharf and to commence shipment of ore from the wharf at an annual rate of not less than one million tons of ore. In particular, the joint venturers agreed7 to construct a railway, to make roads, to construct a wharf, to lay out and develop townsites and to provide suitable housing, recreational and other facilities and services. Some of this was to be done on the land the subject of a mineral lease but some of it had to occur elsewhere. The joint venturers agreed8 that, "[t]hroughout the continuance" of the State Agreement, they would: "allow the State and third parties to have access (with or without stock vehicles and rolling stock) over the mineral lease (by separate route road or railway) PROVIDED THAT such access over shall not unduly Iron Ore (Mount Goldsworthy) Agreement Act 1964, Schedule, cl 11(6). Iron Ore (Mount Goldsworthy) Agreement Act 1964, Schedule, cl 8(5)(b). Iron Ore (Mount Goldsworthy) Agreement Act 1964, Schedule, cl 10(g). Iron Ore (Mount Goldsworthy) Agreement Act 1964, Schedule, cl 9(1). Iron Ore (Mount Goldsworthy) Agreement Act 1964, Schedule, cl 9(1)(c), (d), (e), (f)(ii). Iron Ore (Mount Goldsworthy) Agreement Act 1964, Schedule, cl 9(2)(g). Hayne prejudice or interfere with the Joint Venturers' operations [under the State Agreement]". The State Agreement has been varied three times since it was first made. Nothing turns on those variations. There have been assignments of interests in the joint venture and in the mineral leases. Again, nothing turns on the detail of those changes and it is convenient to refer to the "joint venturers" without distinguishing between the differing compositions of the joint venture over the years. The mineral leases The State has granted two mineral leases that are relevant to this litigation. The first (variously referred to as "ML 235", "ML 235SA" or "AML 7000235") was granted by instrument dated 17 February 1966. The second (referred to as "ML 249", "ML 249SA" or "AML 7000249") was granted by instrument dated 8 May 1974. Both mineral leases were granted before the enactment of the Racial Discrimination Act 1975 (Cth) and long before the enactment of the Native Title Act 1993 (Cth). Argument in this Court proceeded on the basis that there is no relevant difference between the two mineral leases and that each was in the form provided for by the State Agreement. It is therefore convenient to refer only to the first of them (ML 235). The recitals to the instrument recorded that, by the State Agreement, the State had agreed to grant the joint venturers "a mineral lease", that the State Agreement had been ratified by the Iron Ore (Mount Goldsworthy) Agreement Act 1964 and that the Act had authorised the grant of a mineral lease or leases to the joint venturers. The instrument provided that, "in consideration of the rents and royalties reserved by and of the provisions of the [State] Agreement", the Crown "do[es] by these presents grant and demise" to the joint venturers as tenants in common in equal shares: "ALL THAT piece or parcel of land [identified in the instrument] and all those mines, veins, seams, lodes and deposits of iron ore in on or under the said land (hereinafter called 'the said mine') together with all rights, liberties, easements, advantages and [appurtenances] thereto belonging or appertaining to a lessee of a mineral lease under the MINING ACT, 1904 ... or to which the JOINT VENTURERS are entitled under the [State] Hayne Agreement TO HOLD the said land and mine and all and singular the premises hereby demised for the full term of twenty one years ... for the purposes but upon and subject to the terms, covenants and conditions set out in the [State] Agreement and to the Mining Act (as modified by the [State] Agreement) YIELDING and paying therefor the rent and royalties as set out in the [State] Agreement". The instrument further provided that "this lease is subject to the observance and performance" by the joint venturers of certain covenants and conditions, including that the joint venturers "use the land bona fide exclusively for the purposes of the [State] Agreement". Subsequent activities In accordance with their obligations under the State Agreement, the joint venturers developed the Mount Goldsworthy iron ore project. Construction of the townsite and mine operations on the land the subject of ML 235 began in 1965. A town of over 200 houses (and separate single men's quarters) was built, together with roads, a shopping centre, a school, clubs and sporting facilities, a medical centre, a police station and other associated works. In 1977, the town reached a maximum population of 1,400 people. Together, the minesite infrastructure and the town covered about one third of the area of ML 235. (The parties agreed that there was no evidence that any significant construction was carried out on the remainder of the area of ML 235.) Mining was conducted using open pit mining. Before mining began, the peak of Mount Goldsworthy was about 132 metres above sea level. When mining stopped, Mount Goldsworthy had been transformed into a pit about 135 metres below sea level. The mine was closed in December 1982. The town was closed in 1992. The town has since been completely removed and the land on which it stood restored. The pit remains, but is now filled with water. Procedural history Alexander Brown and others (on behalf of the Ngarla People) applied to the Federal Court of Australia for native title determinations in respect of land and waters in the Pilbara region of Western Australia. The claimed areas included the areas subject to the two mineral leases referred to at the start of Hayne these reasons. On 30 May 2007, the primary judge (Bennett J) made9 a consent determination of native title with respect to part of the claimed areas other than the areas the subject of the mineral leases. On 5 October 2007, the primary judge ordered the trial of some questions relating to the effect of the grant of the mineral leases. The order recorded that it was agreed that, subject to the answers given to the questions, "native title exists in the land [the subject of the mineral leases] in the manner recognised" in the consent determination which had been made on 30 May 2007. The questions included10 the following: "(1) Did the grant of the [mineral] leases pursuant to the ... State Agreement confer on the holders of those leases a right of exclusive possession such that any native title rights and interests were wholly extinguished? If the grant of the [mineral] leases did not confer exclusive possession so as to extinguish any native title rights and interests, are the rights granted pursuant to the [mineral] leases and the ... State Agreement inconsistent with any or all of the bundle of native title rights and interests recognised in [the consent determination of 30 May 2007]? If the answer is 'yes', which ones? If the answer to (2) is 'yes', in relation to any and each of such native title rights which are inconsistent, are these rights wholly extinguished? (4) Was native title wholly extinguished to the area (or part of the area) of the [mineral] leases through the rights as exercised under the [mineral] leases and the ... State Agreement? If the answer to (4) is 'yes', in which areas has native title been wholly extinguished?" 9 Brown (on behalf of the Ngarla People) v State of Western Australia [2007] FCA 10 Brown (on behalf of the Ngarla People) v Western Australia (No 2) (2010) 268 ALR 149 at 153-154 [3]. Hayne For the purposes of the trial of those separate questions, the parties submitted a statement and chronology of agreed relevant facts and a statement and chronology of further undisputed facts, the relevance of which was contested. On the trial of the separate questions, the primary judge held11 that the mineral leases (ML 235 and ML 249) did not confer on the joint venturers a right of exclusive possession such that any native title rights and interests were wholly extinguished. The primary judge further held12, however, that the rights granted pursuant to ML 235 and ML 249 and the State Agreement were inconsistent with the continued existence of any of the determined native title rights and interests "in the area where the mines, the town sites and associated infrastructure were constructed". The rights which the joint venturers exercised with respect to this "developed" area were said13 to be "analogous to rights of exclusive possession". But the analogy was neither explored nor explained further. Her Honour subsequently made14 a determination of native title reflecting the conclusions which have been described. The holding of inconsistency, and consequent extinguishment of native title, on account of activities undertaken by the joint venturers on the land the subject of the mineral leases subsequent to the grant of those interests, followed from the decision of the Full Court of the Federal Court in De Rose v South Australia (No 2)15. It will be necessary to say more about that decision but, in order to understand the subsequent procedural history of this matter, two points should be made about it now. The Full Court held16 in De Rose (No 2) that the grant in a pastoral lease of the right to construct improvements on the land (such as a dwelling house or shed), when exercised, was inconsistent with native title 11 Brown (on behalf of the Ngarla People) v Western Australia (No 2) (2010) 268 ALR 149 at 205 [230]. 12 (2010) 268 ALR 149 at 205 [231]. 13 (2010) 268 ALR 149 at 200 [202]. 14 Brown (on behalf of the Ngarla People) v State of Western Australia (No 3) [2010] FCA 859. 15 (2005) 145 FCR 290. 16 (2005) 145 FCR 290 at 331-332 [149]. Hayne rights to access and move about the land, hunt and gather on the land, camp on the land, engage in ceremonies and cultural activities on the land and maintain and protect places of significance. The Full Court further held17 that construction of improvements by the holders of the pastoral lease on the land extinguished native title rights and interests in the land on which the improvements were constructed and in any adjacent land reasonably necessary for or incidental to the operation or enjoyment of the improvements. In the present matter, the native title holders appealed to the Full Court of the Federal Court against the orders and determination made by the primary judge. They alleged, in effect, that her Honour should have held that their native title rights and interests were not extinguished to any extent by the grant of the mineral leases or by any subsequent activities on the leased land. The State of Western Australia and the joint venturers each cross-appealed against the determination. Each alleged that the claimed native title rights and interests were wholly extinguished over the whole of the area of the mineral leases, either because those leases conferred on the holders a right of exclusive possession or because the rights granted by the leases and the State Agreement were inconsistent with all of the native title rights and interests. On 5 November 2012, the Full Court (Mansfield, Greenwood and Barker JJ) published18 reasons for judgment and made orders that the appeal by the native title holders "be upheld" and the cross-appeals by the State and the joint venturers be dismissed. The Full Court divided in opinion, principally about what consequences followed from the joint venturers having exercised their rights under the mineral leases to build the mine, the town and associated facilities. Mansfield J concluded19 that the orders and reasons of the primary judge were correct. Greenwood J held20 that the native title rights and interests of the Ngarla People were not extinguished by the grant of the mineral leases but that the exercise of the rights granted by the leases would prevent the exercise of native title rights 17 (2005) 145 FCR 290 at 333 [157], 335 [166]. 18 Brown v Western Australia (2012) 208 FCR 505. 19 (2012) 208 FCR 505 at 526 [94]. 20 (2012) 208 FCR 505 at 586-587 [431]. Hayne over any part of the leased land for so long as the joint venturers hold rights under the leases. Barker J also held21 that the native title rights and interests were not extinguished but held22 that, to the extent that native title rights and interests could not be exercised or enjoyed by reason of the incompatibility of activities conducted by the joint venturers, the exercise of the native title rights and interests "yielded" to the joint venturers' exercised rights. Subsequently, on 22 February 2013, the Full Court set aside23 the determination of native title made by the primary judge and made a new determination in a form proposed by the native title holders. Because these reasons will show that subsequent use of the land the subject of the mineral leases is irrelevant to the issue of extinguishment, it is not necessary to explore the differences between the members of the Full Court or the particular resolution of those differences which was reflected in the substituted determination of native title. It is sufficient to complete the description of the procedural history of the matter by noting that, by special leave, the State appeals to this Court against the orders of the Full Court. The State again advances the argument (advanced in the Full Court) that native title rights and interests were wholly extinguished over the whole of the area of the mineral leases, either because those leases conferred on the holders a right of exclusive possession or because the rights granted by the leases and the State Agreement were inconsistent with all of the native title rights and interests. In the alternative, the State submits that the native title rights and interests were extinguished "in respect of those lands ... on which the [joint venturers] exercised their rights to develop and construct mines, a town and associated works". The joint venturers did not appeal against the orders made by the Full Court. They made submissions supporting the State in its appeal. The Attorney-General for the State of South Australia was granted leave to appear and make submissions as amicus curiae. 21 (2012) 208 FCR 505 at 596 [479]. 22 (2012) 208 FCR 505 at 597 [479]. 23 Brown (on behalf of the Ngarla People) v State of Western Australia (No 2) [2013] Hayne Extinguishment This is an appeal against a determination of native title made under the Native Title Act 1993. The Native Title Act 1993 therefore "lies at the core of this litigation"24. As noted earlier in these reasons, both of the mineral leases (ML 235 and ML 249) were granted before the enactment of the Racial Discrimination Act 1975. No party submitted that the provisions of that Act are engaged in any relevant way. In both the Full Court of the Federal Court25 and this Court, it was common ground that none of the provisions of the Native Title Act 1993 dealing with "past acts", "intermediate period acts" or "previous exclusive possession acts" applied. That is, it was common ground, in both the Full Court and this Court, that the question of extinguishment which lies behind the determination sought under the Native Title Act 1993 was not governed by statute. Did the grant of the mineral leases extinguish some or all of the claimed native title rights and interests? To answer this question, it is necessary, as the plurality held26 in Ward, to ask "whether the rights [granted] are inconsistent with the alleged native title rights and interests". This question is27 "an objective inquiry which requires identification of and comparison between the two sets of rights". Each stage of this inquiry β identification of rights and comparison between rights β will be considered in turn. Identifying the rights The identification of the relevant rights is an objective inquiry. This means that the legal nature and content of the rights must be ascertained28. The 24 Ward (2002) 213 CLR 1 at 60 [2]. See also Akiba v The Commonwealth (2013) 87 ALJR 916 at 930 [54]; 300 ALR 1 at 19; [2013] HCA 33. 25 (2012) 208 FCR 505 at 511-513 [23]-[27]. 26 (2002) 213 CLR 1 at 89 [78]. 27 (2002) 213 CLR 1 at 89 [78]. 28 cf Wik Peoples v Queensland (1996) 187 CLR 1 at 71-72 per Brennan CJ, 185 per Gummow J; [1996] HCA 40. Hayne nature and content of a right is not ascertained by reference to the way it has been, or will be, exercised. That is why the plurality in Ward said29 that consideration of the way in which a right has been exercised is relevant only in so far as it assists the correct identification of the nature and content of the right. The claimed native title rights and interests As was said30 in Ward, "[q]uestions of extinguishment first require identification of the native title rights and interests that are alleged to exist". As already noted, the nature and extent of those rights was agreed in this case. It was agreed that those rights were non-exclusive rights to access and camp on the land, to take flora, fauna, fish, water and other traditional resources (excluding minerals) from the land, to engage in ritual and ceremony on the land and to care for, maintain and protect from physical harm particular sites and areas of significance. It is important to recognise that particular considerations apply to the identification of native title rights and interests. In examining the "intersection of traditional laws and customs with the common law"31 (or, in this case, the intersection with rights derived from statute), it is important32 to pay careful attention to the content of the traditional laws and customs. It is especially important not to confine33 the understanding of rights and interests which have their origin in traditional laws and customs "to the common lawyer's one-dimensional view of property as control over access". Yet it is no less important to recognise that, as Fejo v Northern Territory made clear34, a right of exclusive possession affords the holder the right to "use the land as he or she sees fit and [to] exclude any and everyone from access to the land" (emphasis added). The grant of a right to exclude any and everyone from access to the land for any 29 (2002) 213 CLR 1 at 89 [78]. 30 (2002) 213 CLR 1 at 208 [468]. See also at 91-95 [83]-[95]; Akiba (2013) 87 ALJR 916 at 930 [51]; 300 ALR 1 at 19. 31 Fejo v Northern Territory (1998) 195 CLR 96 at 128 [46]; [1998] HCA 58. 32 Ward (2002) 213 CLR 1 at 92 [85]. 33 Ward (2002) 213 CLR 1 at 95 [95]. 34 (1998) 195 CLR 96 at 128 [47]. Hayne reason or no reason is inconsistent with the continued existence not only of any right in any person other than the grantee to gain access to the land but also of any right which depends upon access to the land. Determining inconsistency The determination of whether two or more rights are inconsistent is also an objective inquiry. The question of inconsistency of rights can always be decided at the time of the grant of the allegedly inconsistent rights. And it must be decided by reference to the nature and content of the rights as they stood at the time of the grant. At that time, were the rights as granted inconsistent with the relevant native title rights and interests? As these reasons will later demonstrate, to the extent to which the decision in De Rose (No 2) countenances a notion of contingent extinguishment (contingent on the later performance of some act in exercise of the "potentially inconsistent" rights granted), it is wrong and should not be followed. In the present case, then, the question of inconsistency is to be determined at the time of the grant of the relevant mineral leases. What the joint venturers did or did not do in exercise of the rights granted under the mineral leases is important35 only to the extent to which it directs attention to the nature and content of the rights which were granted. There cannot be "degrees of inconsistency of rights". "Two rights are inconsistent or they are not. If they are inconsistent, there will be extinguishment to the extent of the inconsistency; if they are not, there will not be extinguishment."36 As counsel for the native title holders put the point in argument in this Court, inconsistency is that state of affairs where "the existence of one right necessarily implies the non-existence of the other". And one right necessarily implies the non-existence of the other when there is logical antinomy between them: that is, when a statement asserting the existence of one right cannot, without logical contradiction, stand at the same time as a statement asserting the existence of the other right. The joint venturers and South Australia sought to formulate a test for determining whether rights granted are inconsistent by analogy with s 109 of the Constitution. Reference was made to notions of "direct" and "indirect" inconsistency and to whether the existence or enjoyment of native title rights would alter, impair or detract from the enjoyment of a right conferred by statute. 35 Ward (2002) 213 CLR 1 at 89 [78]. 36 Ward (2002) 213 CLR 1 at 91 [82]. Hayne Yet, as was acknowledged in argument, the analogy is necessarily imperfect. An inconsistent State law is inoperative37 only for so long as there is inconsistent federal law. A native title right, once extinguished, cannot be revived38. More fundamentally, however, the analogy is apt to mislead, at least to the extent to which it directs attention to the enjoyment of rights rather than the necessary comparison between the legal nature and content of the right granted and the native title right asserted. The analogy should not be pursued. It is convenient to turn to the task of identifying the rights which the State granted to the joint venturers pursuant to the Iron Ore (Mount Goldsworthy) Agreement Act 1964 and comparing those rights with the claimed native title rights and interests. Exclusive possession? As noted earlier, the State (supported by the joint venturers) submitted that the mineral leases granted the joint venturers exclusive possession of the land the subject of the instruments. Three points may be made about ML 235 which apply equally to ML 249. First, like any mineral lease granted under the Mining Act 1904, ML 235 was described as a kind of lease: a "mineral lease". The instrument used the term "demise". It granted and demised identified land as well as mines, veins, seams, lodes and deposits of a mineral in, on or under that land. As with the mining leases considered in Ward, the rights and obligations of the joint venturers are not to be determined39 by fastening upon the use of the words "lease" or "demise", or by noticing that there was a demise of land as well as mines. As Toohey J said40 in Wik Peoples v Queensland, "[a] closer examination 37 Butler v Attorney-General (Vict) (1961) 106 CLR 268; [1961] HCA 32. 38 Fejo (1998) 195 CLR 96 at 131 [56]-[58]. 39 Ward (2002) 213 CLR 1 at 158 [284]-[287]; Wik (1996) 187 CLR 1 at 117 per Toohey J. See also Wade v New South Wales Rutile Mining Co Pty Ltd (1969) 121 CLR 177 at 192-193 per Windeyer J; [1969] HCA 28; Goldsworthy Mining Ltd v Federal Commissioner of Taxation (1973) 128 CLR 199 at 212-219; [1973] HCA 7; O'Keefe v Malone [1903] AC 365 at 377. 40 (1996) 187 CLR 1 at 117. Hayne is required". It is necessary to identify the rights which are actually conferred upon the joint venturers. And that leads to the second point to be noticed. The grant was expressed to be "for the purposes but upon and subject to the terms, covenants and conditions set out in the [State] Agreement". The joint venturers were required to use the land "bona fide exclusively for the purposes of the [State] Agreement". Read as a whole, in the context provided by the State Agreement, the instrument provided for a "mineral lease" of the kind understood by the common law and described in Newcrest Mining (WA) Ltd v The Commonwealth41. That is, the instrument gave the joint venturers liberty to go into and under the land, during the currency of the mineral lease, and to get and take away the iron ore that they found there. This being the nature of the right granted to the joint venturers, the third point to be made is that neither the instrument itself nor the State Agreement provided expressly that the joint venturers were not only to have possession of the land which was the subject of the mineral lease for the purposes which have been described but also to have the right to exclude any and everyone from that land for any reason or no reason at all. On the contrary, as already noted, the State Agreement provided expressly that the joint venturers must allow not only the State but also third parties to have access over the land the subject of the mineral lease, provided that the access did not "unduly prejudice or interfere with" the joint venturers' operations. This express provision precludes construing the leases as impliedly providing a right of exclusive possession. It follows that neither ML 235 nor ML 249 gave the joint venturers a right of the kind identified42 in Fejo: the unqualified right to exclude any and everyone from access to the land, for any reason or no reason. The joint venturers could prevent anyone else from using the land for mining purposes and could use any part of the land for the extraction of iron ore or for any of the associated purposes described in the State Agreement (such as building a town, roads and railway). It may be accepted that the grant of these rights would be inconsistent with a native title right of the kind which was at issue in Ward: a native title right to control access to land (for any purpose or no purpose). But no 41 (1997) 190 CLR 513 at 616 per Gummow J; [1997] HCA 38, citing Gowan v Christie (1873) LR 2 Sc & Div 273 at 284 per Lord Cairns. 42 (1998) 195 CLR 96 at 128 [47]. Hayne right of that kind was in issue in this case. Neither instrument gave the joint venturers the right to exclusive possession of the land. The first branch of the State's argument must be rejected. Extinguishment by actual or potential conflicting use? The alternative arguments advanced by the State depended, directly or indirectly, on the proposition that extinguishment could be demonstrated by showing that native title rights could clash with rights under the mineral leases in the sense that the rights could not be exercised simultaneously in the one place. That is, the State's alternative arguments were founded in the observation that a native title holder could not hunt over land being excavated to recover iron ore or over land on which there stood one of the houses in the town. And because the mineral leases gave the joint venturers the right to mine anywhere on the land and the right to build many and very large improvements anywhere on the land, the State submitted that the rights granted by the leases were wholly inconsistent with the claimed native title rights and interests at the time of the grant of the mineral leases, or at least became so when the joint venturers exercised their rights. It follows from what has already been said in these reasons that these arguments must be rejected. It is as well, however, to examine further the flawed premises upon which the arguments depend. The State sought to support its broader proposition (that a right to mine or build anywhere on the land was wholly inconsistent with the claimed native title rights and interests) by reference to the reasons of Brennan CJ in Wik. Particular emphasis was given to his Honour's statement43 that "[t]he law ... cannot recognise the co-existence in different hands of two rights that cannot both be exercised at the same time". This statement must be understood in the context in which it appears. In particular, it is important to notice that, in the very paragraph from which the statement relied on by the State was taken, Brennan CJ emphasised that extinguishment of native title does not depend upon the exercise of the allegedly inconsistent right: the inconsistency is, as his Honour said44, "between 43 (1996) 187 CLR 1 at 87 (footnote omitted). 44 (1996) 187 CLR 1 at 87. Hayne the rights" and not "between the manner of their exercise" (emphasis added). That is, questions of extinguishment must be resolved45 as a matter of law, not as a matter of fact. Hence, inconsistency arises46 "at the moment when those [inconsistent] rights are conferred". These propositions, though stated in a dissenting judgment, state principles which must now be taken to be firmly established. In Wik, the Court divided on whether the pastoral leases in issue in that case gave the holders a right of exclusive possession (in the sense of a right to exclude any and everyone from the land for any reason or no reason). The majority concluded that the relevant pastoral leases did not give such a right to their holders and that it followed47 that there was no necessary extinguishment of native title rights and interests. Brennan CJ, and other Justices who dissented, concluded that the pastoral leases did give the holders exclusive possession. The statement by Brennan CJ, on which the State placed such emphasis, responded to the argument advanced on behalf of the Wik and Thayorre Peoples that only practical inconsistency between the exercise of competing rights can extinguish native title rights and interests. The observation which Brennan CJ made about simultaneous exercise of rights was made in answer to the argument that the manner of exercise of the competing rights was relevant to the question of extinguishment. As has already been seen, that argument was rejected. But the observation answered that argument because, even if the argument were correct, the rights that could not both be exercised at the same time were, on the one hand, rights such as a right to hunt and gather on the land and, on the other, the leaseholder's right to exclude any and everyone from the land for any reason or no reason. Two other submissions made by the State may be noted at this point, but put aside from consideration. It is not to the point to observe, as the State did, that other forms of land tenure might have been granted to the joint venturers. Nor is it to the point to observe, as the State did, that the State Agreement obliged the State not to resume or rezone the land which was the subject of the mineral leases and that the holder of an interest in fee simple in land will seldom 45 (1996) 187 CLR 1 at 87. 46 (1996) 187 CLR 1 at 87. 47 (1996) 187 CLR 1 at 132-133 per Toohey J (Gaudron, Gummow and Kirby JJ concurring). Hayne have the benefit of such obligations. Even if it is right to say, as the State did, that in these respects the joint venturers had rights that were greater than those of the holder of a fee simple, the observation is irrelevant to the question of extinguishment. The joint venturers' rights to insist upon performance of these obligations did not intersect in any way with the claimed native title rights and interests. The decisions in both Wik and Ward established that the grant of rights to use land for particular purposes (whether pastoral, mining or other purposes), if not accompanied by the grant of a right to exclude any and everyone from the land for any reason or no reason, is not necessarily inconsistent with, and does not necessarily extinguish, native title rights such as rights to camp, hunt and gather, conduct ceremonies on land and care for land. As the State rightly pointed out, both Wik and Ward were decided before the native title rights claimed had been determined. But neither case could have been determined as it was if, as the State submitted, the grant of rights to perform acts or erect structures on land was necessarily inconsistent with the native title rights and interests claimed in this case. And contrary to the submissions made by the State, observing that the Mount Goldsworthy iron ore project was very large, requiring a large mine and extensive associated facilities, founds no tenable legal distinction between this case and the earlier decisions of this Court. Rather, it is necessary to ask whether the existence of the rights granted to the joint venturers necessarily implied that the claimed native title rights and interests could no longer exist. For the reasons which have been given, the mineral leases in issue in this case did not give the joint venturers a right of exclusive possession. In this respect, the mineral leases were no different from the pastoral leases considered in Wik, the mining leases considered in Ward or the Argyle mining lease also considered in Ward. The mineral leases did not give the joint venturers the right to exclude any and everyone from any and all parts of the land for any reason or no reason. The joint venturers were given more limited rights: to carry out mining and associated works anywhere on the land without interference by others. Those more limited rights were not, and are not, inconsistent with the coexistence of the claimed native title rights and interests over the land. (No party submitted that any distinction should be drawn between the several native title rights and interests that were claimed.) That the rights were not inconsistent can readily be demonstrated by considering the position which would have obtained on the day following the grant of the first of the mineral leases. On that day, the native title holders could have exercised all of the rights that now are claimed anywhere on the land without any breach of any right which had been Hayne granted to the joint venturers. That being so, there was not then, and is not now, any inconsistency between the rights granted to the joint venturers and the claimed native title rights and interests. The State's larger alternative submission (that the grant of rights to mine and build improvements anywhere on the land was wholly inconsistent with the claimed native title rights and interests) should be rejected. There remains for consideration the State's narrower alternative submission that the claimed native title rights and interests were extinguished when the joint venturers exercised their rights to develop and construct mines, a town and associated works. It is convenient this submission as asserting extinguishment by development. to refer Extinguishment by development? The submission that there could be (and in this case was) extinguishment of native title by the exercise of rights granted by or under statute should be rejected. As has already been explained, the submission is directly contrary to the principles established and applied in both Wik and Ward and postulates a test for inconsistency which turns upon the manner of exercise of one of the allegedly competing rights rather than upon the right's nature and content. As Brennan CJ said48 in Wik, that would deny the law's capacity to determine the priority of rights over or in respect of the same piece of land. No less importantly, as Brennan CJ also pointed out49, "[t]o postulate extinguishment of native title as dependent on the exercise of the private right of the lessee (rather than on the creation or existence of the private right) would produce situations of uncertainty, perhaps of conflict" (emphasis added). The decision of the Full Court of the Federal Court in De Rose (No 2) has already been mentioned. The decision proceeded from a misunderstanding of what was decided in Ward. It assumed, wrongly, that the principles applied in Ward permit the deferral of consideration of extinguishment until the manner of exercise of the allegedly inconsistent and extinguishing rights is known. So to proceed would be to return to and adopt the argument about practical inconsistency advanced but rejected in Wik. 48 (1996) 187 CLR 1 at 87. 49 (1996) 187 CLR 1 at 87. Hayne De Rose (No 2) was not, and this is not, a case in which the "operation of a grant of rights [was] subjected to conditions precedent or subsequent"50. That is, De Rose (No 2) was not, and this is not, a case in which the rights were51 "incapable of identification in law without the performance of a further act or the taking of some further step beyond that otherwise said to constitute the grant". To understand52 the grant of a right as being subject to a "condition precedent" that consists in the granted right being exercised is to fall into confusion. The decision in De Rose (No 2) assumed, again wrongly, that the permitted construction of an improvement on land held under a "lease" which did not give a right of exclusive possession necessarily affected the existence of native title rights and interests rather than the manner of their exercise. That is, the decision treated extinguishment as determined by the manner of exercise of the allegedly inconsistent right rather than, as it must be, by the nature and content of the two rights which are said to be inconsistent. As the State rightly pointed out, the mineral leases gave the joint venturers the right to mine anywhere on the land and the right to build improvements anywhere on the land. But the mineral leases did not provide that the joint venturers must use the whole of the land for mining or associated works. Had the mineral leases provided that the whole of the land must be used in a way which would not permit any use of the land by native title holders, it may have been open to construe the mineral leases as providing for the joint venturers to exclude any and everyone from the whole of the land for any reason or no reason. But, as has been explained, that is not what these mineral leases provided. In the end, then, the State's narrower alternative argument reduces to the practical observation that two persons cannot occupy the one place. When the joint venturers built a house in the town, native title holders could not (for example) hunt and gather on the land which that house occupied. And the rights which the joint venturers had, and exercised, took and continue to take priority over the rights and interests of the native title holders for so long as the joint venturers enjoy and exercise those rights. Any competition between the exercise of the two rights must be resolved in favour of the rights granted by statute. But 50 Ward (2002) 213 CLR 1 at 114 [150]. 51 Ward (2002) 213 CLR 1 at 114-115 [150]. 52 cf De Rose (No 2) (2005) 145 FCR 290 at 333 [156]. Hayne when the joint venturers cease to exercise their rights (or their rights come to an end) the native title rights and interests remain, unaffected. Conclusion and orders For these reasons, the State's appeal must be dismissed with costs. The joint venturers should bear their own costs. There being no cross-appeal against the determination made by the Full Court, that determination stands. |
HIGH COURT OF AUSTRALIA PUBLIC SERVICE ASSOCIATION OF SOUTH AUSTRALIA INCORPORATED APPLICANT AND INDUSTRIAL RELATIONS COMMISSION OF SOUTH AUSTRALIA AND ANOR RESPONDENTS Public Service Association of South Australia Incorporated v Industrial Relations Commission of South Australia [2012] HCA 25 11 July 2012 ORDER Special leave to appeal granted. Appeal treated as instituted and heard instanter, and allowed. Set aside the orders of the Full Court of the Supreme Court of South Australia made on 15 March 2011. Remit the matter to the Full Court of the Supreme Court of South Australia for determination of the appellant's summons for judicial review, including any questions of costs in the Full Court. The second respondent, the Chief Executive, Department of the Premier and Cabinet of South Australia, pay the costs of the appellant in this Court. On appeal from the Supreme Court of South Australia Representation P A Heywood-Smith QC with P N Moloney for the applicant (instructed by Submitting appearance for the first respondent M G Hinton QC, Solicitor-General for the State of South Australia with D F O'Leary for the second respondent and intervening on behalf of the Attorney-General for the State of South Australia (instructed by Crown Solicitor S J Gageler SC, Solicitor-General of the Commonwealth with G R Kennett SC and C D Bleby intervening on behalf of the Attorney-General of the Commonwealth (instructed by Australian Government Solicitor) W Sofronoff QC, Solicitor-General of the State of Queensland with G J D del Villar intervening on behalf of the Attorney-General of the State of Queensland (instructed by Crown Law (Qld)) G L Sealy SC, Solicitor-General of the State of Tasmania with S D Gates intervening on behalf of the Attorney-General of the State of Tasmania (instructed by Crown Solicitor for Tasmania) S G E McLeish SC, Solicitor-General for the State of Victoria with P R D Gray SC intervening on behalf of the Attorney-General for the State of Victoria (instructed by Victorian Government Solicitor) R M Mitchell SC, Acting Solicitor-General for the State of Western Australia with A K Sharpe intervening on behalf of the Attorney-General for the State of Western Australia (instructed by State Solicitor (WA)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Public Service Association of South Australia Incorporated v Industrial Relations Commission of South Australia Administrative law β Judicial review β Excess or want of jurisdiction β Appellant commenced proceedings in Industrial Relations Commission of South Australia ("Commission") β Commission had jurisdiction with respect to "industrial disputes" which meant a dispute about an "industrial matter" as defined by Fair Work Act 1994 (SA) ("Act") β Commission determined that it lacked jurisdiction because there was no industrial dispute β Full Court of Supreme Court of South Australia dismissed summons for judicial review because s 206 of Act excluded review except for "excess or want of jurisdiction", which phrase it interpreted as excluding failure or refusal to exercise jurisdiction β Whether Commission had duty to determine jurisdictional fact of existence of industrial dispute β Whether s 206 of Act precluded mandamus but not prohibition and certiorari β Whether "excess or want of jurisdiction" in s 206 of Act included jurisdictional error or only some species of jurisdictional error. Constitutional law (Cth) β Judicial power of Commonwealth β Constitution, Ch III β State Supreme Courts β Defining characteristics of State Supreme Courts β Application of Kirk v Industrial Court (NSW) (2010) 239 CLR 531 in determining characteristics of State Supreme Courts identified in Ch III of Constitution β Whether power to issue mandamus to inferior courts and to tribunals a defining feature of State Supreme Courts β Whether s 206 of Act limited State Supreme Court jurisdiction to exercise judicial review for jurisdictional error. Words and phrases β "excess or want of jurisdiction", "judicial review", "jurisdiction", "jurisdictional error", "jurisdictional fact", "mandamus". Constitution, Ch III. Fair Work Act 1994 (SA), ss 26, 206. Industrial Conciliation and Arbitration Act 1972 (SA), s 95. Supreme Court Act 1935 (SA), s 17(2). Introduction On 15 March 2011, the Full Court of the Supreme Court of South Australia held that it did not have jurisdiction to entertain a summons, filed by the Public Service Association of South Australia Inc ("the PSA") for judicial review of a decision of the Full Commission of the Industrial Relations Commission of South Australia ("the Commission")1. The PSA contended that the Commission had wrongly refused to exercise its jurisdiction in relation to two industrial disputes between it and the Chief Executive of the Department of the Premier and Cabinet of South Australia ("the Chief Executive"). The Commission had decided that in each case there was no industrial dispute and that it therefore lacked jurisdiction2. The Full Court refused to entertain the PSA's summons because of s 206 of the Fair Work Act 1994 (SA) ("the Fair Work Act"), which provides: "(1) A determination of the Commission is final and may only be challenged, appealed against or reviewed as provided by this Act. (2) However, a determination of the Commission may be challenged before the Full Supreme Court on the ground of an excess or want of jurisdiction." The Full Court held that a refusal by the Commission to exercise jurisdiction, even if wrongful, could not be judicially reviewed because the authority of the Court to hear and decide a challenge to a determination of the Commission was limited to a challenge brought on the ground of an excess or want of jurisdiction. The Full Court held, on the basis of the decision of this Court in Public Service Association (SA) v Federated Clerks' Union3 ("the 1991 PSA Case"), that a refusal to exercise jurisdiction did not constitute an excess or want of jurisdiction4. 1 Public Service Association of SA Inc v Industrial Relations Commission of SA (2011) 109 SASR 223. 2 Public Sector Association of SA Inc v Chief Executive Department of the Premier and Cabinet [2010] SAIRComm 11. (1991) 173 CLR 132; [1991] HCA 33. 4 Public Service Association of SA Inc v Industrial Relations Commission of SA (2011) 109 SASR 223 at 228-229 [15]. The PSA sought special leave to appeal to this Court. Its application was referred to an enlarged Bench. The threshold question for determination in this Court is whether the decision of the Commission, that there was no industrial dispute before it, could be characterised as a decision on a question of jurisdictional fact which, if erroneous, constituted a decision in excess of jurisdiction. For the reasons that follow, the answer to that question is yes. That being so, the Full Court did have jurisdiction to entertain an application for mandamus to direct the Commission to exercise its jurisdiction. The appeal should be allowed and orders made as proposed in the joint judgment. The history of the proceedings The history of these proceedings began early in October 2010 with the notification by the PSA to the Commission of two disputes with the Chief Executive. The disputes related to security of employment for public sector employees and recreation leave loading and long service leave arrangements. Both disputes arose out of the 2010-2011 State Budget. The Chief Executive and the PSA were parties to the South Australian Government Wages Parity (Salaried) Enterprise Agreement 2010 ("the Agreement") which had been approved by the Commission pursuant to s 79 of the Fair Work Act. Clause 9 of that Agreement, entitled "Memorandum of Understanding", included a provision that: "There will be no forced redundancy for employees bound by this Enterprise Agreement for the period during which the MOU has been extended." The first dispute concerned plans for reducing the size of the State public service. In a statement made at the time of the presentation of the 2010-2011 Budget, the State Treasurer is said to have told Parliament of plans to reduce public service employee numbers through redeployment and voluntary separation packages. If the required reduction could not be achieved through those mechanisms then, according to the Treasurer's budget statement, "the Government will reconsider its 'no forced redundancy' policy."5 The second dispute arose out of cl 2.2 of the Agreement which provided, inter alia, that the parties were committed to existing conditions of employment applying to a party not being reduced, subject to the terms of the Agreement and 5 South Australia, House of Assembly, Parliamentary Debates (Hansard), 16 September 2010 at 1279. any applicable Workplace Flexibility Agreement. In connection with the State Budget, the Statutes Amendment (Budget 2010) Bill 2010 (SA), which was introduced into the Parliament, provided for the replacement of recreation leave loading, to which certain public sector employees were entitled, with two days extra leave, and a reduction of long service leave entitlements of all public sector employees with 15 years or more employment. The matter having been referred to the Commission, Commissioner McMahon conducted a voluntary conference apparently pursuant to s 200 of the Fair Work Act. On 15 October 2010, he issued a statement to the effect that the Commission did not have any jurisdiction to deal with either dispute. The matter was then referred to a compulsory conference under s 202 of the Fair Work Act. Pursuant to the powers conferred by that section, the Commissioner referred the subject matter of the conference for determination by himself and formally declined to make orders in relation to the matters of dispute on the basis that the Commission lacked jurisdiction to do so. He incorporated by reference, as his reasons for that determination, the statement which he had made on 15 October There followed an appeal to the Full Commission. The Commission took the view that there was no industrial dispute before it in relation to either the matter of redundancy or the matter of recreation leave loading and long service leave entitlements. This was on the basis that in neither case had the Chief Executive made any statement or taken any action which could be regarded as a threatened or impending breach of the relevant provisions of the Agreement6. Subsequently the PSA instituted proceedings in the Supreme Court of South Australia seeking orders quashing the order of the Commission made on 4 November 2010 and remitting the matter to the Commission to be determined in accordance with the law. The summons for judicial review was dismissed by the Full Court on 15 March 2011 on the basis that the Full Court lacked jurisdiction to make the orders sought7. An application for special leave to appeal was filed in this Court on 30 March 2011. On 8 June 2011 the application for special leave was referred by Heydon and Bell JJ to an enlarged Court for hearing as on an appeal. 6 Public Sector Association of SA Inc v Chief Executive Department of the Premier and Cabinet [2010] SAIRComm 11 at 8-9 [26], [31]. 7 Public Service Association of SA Inc v Industrial Relations Commission of SA (2011) 109 SASR 223. Before turning to the reasons for the decision of the Full Court, which applied the 1991 PSA Case, it is helpful to refer to the decision of this Court in that case. The 1991 PSA Case In the 1991 PSA Case, this Court held by majority that a decision of the Full Commission of the Industrial Commission of South Australia ("the Industrial Commission"), refusing an application for leave to appeal against a decision of the Registrar of the Industrial Commission, could be reviewed on the ground that it involved an "excess of jurisdiction" within the meaning of s 95 of the Industrial Conciliation and Arbitration Act 1972 (SA) ("the ICAA 1972"). That section, like s 206 of the Fair Work Act, precluded judicial review of awards, orders or decisions of the Industrial Commission "except on the ground of excess or want of jurisdiction." The 1991 PSA Case concerned a challenge to a decision by the Registrar of the Industrial Commission to register a change to the eligibility rule of the PSA to permit extension of its membership to employees of two charitable organisations. The Industrial Commission refused applications by two objecting unions for leave to appeal from the Registrar's decision and did so on the basis that the applicants were seeking leave to appeal from a discretionary decision and that they had not demonstrated error of the type necessary for interference with such a decision. The Full Court of the Supreme Court held that the Industrial Commission's characterisation of the Registrar's decision as discretionary was erroneous and that the error constituted an excess and/or want of jurisdiction within the meaning of s 95 of the ICAA 1972. The PSA appealed from that decision to this Court. The appeal was dismissed by majority (Brennan, Dawson and Gaudron JJ, Deane and McHugh JJ dissenting). The difference between the majority and dissentients the Industrial Commission's decision, rather than the construction of the exception in s 95. All the judges agreed that a refusal to exercise jurisdiction would not fall within the description of "an excess or want of jurisdiction"8. the characterisation of lay Brennan J held that there was "no acceptable canon of construction" by which the exception for "excess or want of jurisdiction" in s 95 could be extended to cover the case of a wrongful failure or refusal to exercise jurisdiction9. Deane J also excluded "a failure fully to exercise jurisdiction (1991) 173 CLR 132 at 142-143 per Brennan J, 153 per Deane J, 160 per Dawson and Gaudron JJ, 164-165 per McHugh J. (1991) 173 CLR 132 at 142. which was possessed" from the scope of the term "excess or want of jurisdiction"10. Dawson and Gaudron JJ observed, without elaboration11: "A failure to exercise jurisdiction is a jurisdictional error, although, prima facie, it is not an error involving an excess of or want of jurisdiction". "an inferior court or tribunal can be said to have acted in excess or in want of jurisdiction only when the relevant act was done in breach of the conditions which define the ambit of the powers and authorities of that court or tribunal. That being so, a mere failure to exercise jurisdiction cannot constitute an 'excess or want of jurisdiction'." What was said in the 1991 PSA Case went to the construction of s 95 of the ICAA 1972. The construction of its successor, s 206 of the Fair Work Act, must be undertaken today in light of the constitutional limits on State legislative power discussed in Kirk v Industrial Court (NSW)13 and encapsulated in the proposition in the joint judgment that14: "Legislation which would take from a State Supreme Court power to grant relief on account of jurisdictional error is beyond State legislative power." The privative provision of the Fair Work Act "must be read in a manner that takes account of these limits on the relevant legislative power."15 That proposition applies the general principle of statutory construction that Parliament does not intend its statutes to exceed constitutional limits. A statute should therefore be construed, if its language allows, in such a way as to keep it within 10 (1991) 173 CLR 132 at 153. 11 (1991) 173 CLR 132 at 160. 12 (1991) 173 CLR 132 at 164-165. 13 (2010) 239 CLR 531; [2010] HCA 1. 14 (2010) 239 CLR 531 at 581 [100] per French CJ, Gummow, Hayne, Crennan, 15 (2010) 239 CLR 531 at 581 [101] per French CJ, Gummow, Hayne, Crennan, those limits16. That general principle is reflected in s 22A(1) of the Acts Interpretation Act 1915 (SA) ("the Acts Interpretation Act") which provides: "Every Act and every provision of an Act will be construed so as not to exceed the legislative power of the State." It is complemented by the reading down provision, s 22A(2): "Any Act or provision of an Act which, but for this section, would exceed the power of the State, is nevertheless a valid enactment to the extent to which it does not exceed that power." Before turning to the question of the construction and application of s 206 to this case, reference should be made to a decision of the Full Court of the Supreme Court of South Australia which was considered in the 1991 PSA Case. In the course of their judgments in the 1991 PSA Case, Brennan J17, Deane J18 and McHugh J19 rejected the proposition in R v Industrial Commission of South Australia; Ex parte Minda Home Incorporated20 that the words "excess or want of jurisdiction" "should be given a wide meaning so as to include all the jurisdictional matters which at common law would have induced the Court of Queen's Bench to interfere by the machinery of the prerogative writs."21 16 Attorney-General (Vict) v The Commonwealth (1945) 71 CLR 237 at 267 per Dixon J; [1945] HCA 30; R v Director-General of Social Welfare (Vict); Ex parte Henry (1975) 133 CLR 369 at 374 per Gibbs J; [1975] HCA 62; Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1 at 14 per Mason CJ; [1992] HCA 64; New South Wales v The Commonwealth (2006) 229 CLR 1 at 161 [355] per Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ; [2006] HCA 52; Gypsy Jokers Motorcycle Club Inc v Commissioner of Police (2008) 234 CLR 532 at 553 [11] per Gummow, Hayne, Heydon and Kiefel JJ; [2008] HCA 4; K-Generation Pty Ltd v Liquor Licensing Court (2009) 237 CLR 501 at 519 [46] per French CJ; [2009] HCA 4. 17 (1991) 173 CLR 132 at 142-143. 18 (1991) 173 CLR 132 at 151-152. 19 (1991) 173 CLR 132 at 165. 20 (1975) 11 SASR 333. 21 (1975) 11 SASR 333 at 337 per Bray J. In Minda Home the Full Court awarded mandamus against the Industrial Commission on the basis that that Commission had wrongly construed a provision of the ICAA 1972 as not giving it discretion to allow an amendment to a defective notice of appeal. Absent amendment, the Industrial Commission lacked jurisdiction to entertain the appeal. Bray CJ relied upon reasoning in the decision of the Full Court of the Supreme Court of Queensland in R v Licensing Commission; Ex parte Nicolosi22 for the proposition that an administrative body which misconstrues its own governing statute strays beyond the limits of its jurisdiction23. Wells J, in a separate concurring judgment, also held that, in declining to exercise a discretion to allow an amendment to the defective notice, "the Full Commission β¦ must have relied β upon grounds of fact or law or both that lay beyond the bounds of its jurisdiction" and that "[i]n short, its decision was based upon an excess or a want of jurisdiction."24 When the basis upon which mandamus issued in Minda Home is considered, the wide construction of "excess or want of jurisdiction", rejected in the 1991 PSA Case, may not have been necessary to support the grant of that prerogative remedy. The decision of the Full Court The decision of the Full Court in this case, that it did not have jurisdiction to entertain the PSA's summons, applied to s 206 of the Fair Work Act the construction of s 95 of the ICAA 1972 which was adopted in the 1991 PSA Case. Chief Justice Doyle delivered the judgment of the Court. Duggan and Vanstone JJ agreed with his Honour's reasons25. that "[l]egislation which denies The Chief Justice referred to the observation in the joint judgment in Kirk26 for non-jurisdictional error of law appearing on the face of the record is not beyond power."27 His Honour observed that s 206 of the Fair Work Act permitted the Supreme Court to correct decisions by the Commission which exceeded its the availability of relief 22 [1962] Qd R 90. 23 (1975) 11 SASR 333 at 338. 24 (1975) 11 SASR 333 at 344. 25 (2011) 109 SASR 223 at 232 [30] per Duggan J, 232 [31] per Vanstone J. 26 Public Service Association of SA Inc v Industrial Relations Commission of SA (2011) 109 SASR 223 at 225-226 [5]. 27 (2010) 239 CLR 531 at 581 [100] per French CJ, Gummow, Hayne, Crennan, jurisdiction28. However he did not go on to suggest that a wrongful failure to exercise jurisdiction would not amount to jurisdictional error. The Chief Justice also held that it was not open to the Full Court to hold that the 1991 PSA Case had been reversed by the decision of this Court in Kirk, even though Kirk was based on submissions not considered in the 1991 PSA Case29. The Chief Justice elaborated on his conclusion that the Full Court lacked jurisdiction by discussing the 1991 PSA Case in some detail. His Honour rejected, as inconsistent with the reasoning in that case, a submission that the Commission, having mistakenly denied the existence of the jurisdiction, had no jurisdiction to dismiss the appeal before it and was therefore in excess of jurisdiction in purporting to do so30. The Chief Justice went on to say that the Full Court, having no jurisdiction to entertain the challenge to the Commission's decision, should not express its own opinion, which in any event would be non-binding, about the correctness of that decision. He also noted that there was a question, which had not been argued, whether the reliance placed by the PSA on statements made by the State Treasurer in the South Australian Parliament might involve an infringement of the privileges of the Parliament. The orders made by the Full Court were: The Applicant's Summons for Judicial Review be dismissed. There be no order as to costs." Whether the PSA summons alleged excess of jurisdiction In its amended summons filed in the Supreme Court, the PSA sought orders quashing the order of the Commission made on 4 November 2010 and remitting the matter to the Commission to be determined in accordance with the law. The proceedings were issued in reliance upon the general jurisdiction conferred upon the Supreme Court by s 17(2) of the Supreme Court Act 1935 (SA) and the provisions of rr 199 and 200 of the Supreme Court Civil Rules 2006 (SA). Rule 199(1) provides that "[t]he Court may make an order for judicial review." Consistently with the jurisdiction conferred by s 17(2) the term "order for judicial review" as defined in r 199(2) includes: 28 Public Service Association of SA Inc v Industrial Relations Commission of SA (2011) 109 SASR 223 at 226 [6]. 29 (2011) 109 SASR 223 at 226 [6]. 30 (2011) 109 SASR 223 at 229 [16]. an order setting aside the decision of another court or a tribunal that has a duty to act judicially because of error, absence of jurisdiction, failure to observe the requirements of natural justice or fraud (certiorari); an order to compel the performance of a duty of a public nature that cannot be enforced by some other adequate legal remedy (mandamus);" Rule 200 provides that "[i]f a plaintiff claims to be entitled to an order for judicial review, an action for judicial review may be commenced but cannot proceed further in the Court without the Court's permission." In this case, the PSA obtained the permission of a judge and the matter was referred to the Full Court. Rule 200(3)(b) requires that the originating process for an action for judicial review, when filed in the Court, be accompanied by an application for the Court's permission to proceed and an affidavit: stating the nature of the order sought; and setting out, in detail, the grounds on which the applicant seeks the order for judicial review." In its affidavit filed in support of its summons in the Supreme Court, the PSA contended relevantly that: it had notified two disputes in the Industrial Relations Commission of South Australia; it had lodged an appeal against the determination of Commissioner McMahon; the Commission had made its order dismissing the appeal to it and had published reasons which were exhibited to the affidavit; the Commission had ruled that there was a want of jurisdiction as there was no industrial dispute because those making the statements said to give rise to the dispute were not the relevant employer. The PSA's complaint in the proceedings in the Supreme Court therefore was that the Commission had found it lacked jurisdiction to entertain the PSA's appeal upon the erroneous premise that there was no industrial dispute. The question for this Court is not whether there was such a dispute but whether, notwithstanding s 206 of the Fair Work Act, the Supreme Court had jurisdiction to entertain the proceedings by the PSA in which that error was asserted. The submissions made by the PSA to this Court involved the propositions that: its complaint to the Full Court of the Supreme Court was that the Commission had committed a jurisdictional error in holding that there was no industrial dispute before it and therefore wrongly concluded that it lacked jurisdiction; the decision of the Commission was not a discretionary refusal to exercise jurisdiction; the decision of this Court in Kirk applied to protect the supervisory jurisdiction of the Supreme Court in respect of inferior State courts and the exercise of Executive power; in light of the decision of this Court in Kirk the jurisdiction of the Supreme Court to issue an order in the nature of mandamus to the Commission for jurisdictional error could not be cut down by legislation; to avoid invalidity, s 206 of the Fair Work Act should be construed as it was construed in Minda Home as extending to a wrongful refusal to exercise jurisdiction. The State of South Australia argued that the Court's decision in Kirk did not deal with the case of wrongful refusal to exercise jurisdiction. The State argued that the supervisory jurisdiction of the State Supreme Courts, as they existed at Federation, derived from the supervisory jurisdiction of the Court of Queens Bench, and did not extend to correcting an inferior court or tribunal for wrongful refusal to exercise jurisdiction. The State placed reliance upon the judgment of the Privy Council in Colonial Bank of Australasia v Willan31 in which the concept of "want of jurisdiction" was defined by reference to three limitations on jurisdiction, namely32: the existence of the "essential preliminaries to the inquiry". the character and constitution of the tribunal; the nature and subject-matter of the inquiry; 31 (1874) LR 5 PC 417. 32 (1874) LR 5 PC 417 at 442-443. The Commission was said to have breached none of these limitations. There was therefore no excess or want of jurisdiction. On this basis the State argued that the construction of s 95 of the ICAA 1972, adopted in the 1991 PSA Case, was consistent with the constraints on the State legislature imposed by the decision in Kirk. That decision had the effect that State legislative power does not extend to depriving a State Supreme Court of its supervisory jurisdiction in respect of jurisdictional error by the executive government of the State, its Ministers or authorities33. Kirk is not to be confined in the way for which South Australia contended. As was stated in the joint judgment in that case, it is the boundary between jurisdictional error and non-jurisdictional error that marks the limits upon State legislative power to abrogate the supervisory jurisdiction of a State Supreme Court34. It is sufficient, in order to dispose of the present case, to focus upon the character of the decision made by the Commission. Underpinning the Commission's decision, that it lacked jurisdiction to entertain the appeal from Commissioner McMahon, was its finding that there was no industrial dispute. That finding may be characterised as a question of jurisdictional fact. It was a matter which the Commission had jurisdiction to decide as an essential preliminary to the exercise of its substantive jurisdiction. That jurisdictional question β was there an industrial dispute in existence β allowed for only one correct answer, which was either yes or no. It was not a matter of discretion. The Commission was not authorised by the Fair Work Act to decide that question wrongly. If its answer to that question was wrong, it was acting beyond the limits of its jurisdiction. That is to say, it was acting in excess of its jurisdiction. To so characterise the nature of the question which the Commission had to answer and the consequence of a wrong answer, is to apply the approach which, as earlier explained, was sufficient to support the decision of the Full Court in Minda Home and the decision of the majority of this Court in the 1991 PSA Case. On that basis, the result in Minda Home may be regarded as correct notwithstanding the rejection by this Court in the 1991 PSA Case of the approach to the construction of s 95 of the ICAA 1972 adopted in Minda Home. 33 South Australia v Totani (2010) 242 CLR 1 at 27 [26] per French CJ, 78 [193] per Hayne J, 105 [268] per Heydon J; [2010] HCA 39; Wainohu v New South Wales (2011) 243 CLR 181 at 195 [15] per French CJ and Kiefel J, 224 [89] per Gummow, Hayne, Crennan and Bell JJ; [2011] HCA 24. 34 Kirk v Industrial Court (NSW) (2010) 239 CLR 531 at 581 [100] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ. That approach is consistent with the statement of principle set out by Latham CJ in R v Blakeley; Ex parte Association of Architects of Australia35. The Chief Justice referred to the decision of Coleridge J in Bunbury v Fuller36, that a decision on a collateral matter conditioning jurisdiction must be open to question and that if a judge forebore or proceeded on the main matter in consequence of an error on the collateral matter, the Court of Queens Bench would issue mandamus or prohibition to correct his mistake37. Latham CJ, after "If an authority with limited jurisdiction has no power to make a conclusive decision as to the existence or non-existence of a collateral matter upon which jurisdiction depends, and makes a wrong preliminary decision either way, the mistake will be corrected by mandamus or prohibition β by mandamus if he wrongly decides that he has no jurisdiction, by prohibition if he wrongly decides that he has jurisdiction." The Full Court of the Supreme Court did have jurisdiction to entertain the proceedings for an order of judicial review which were instituted by the PSA. Consistently with these reasons, I agree with the proposition in the joint reasons that if the Commission decides erroneously not to proceed upon an application before it on the footing that there is no industrial dispute as required by s 26 of the Fair Work Act, the Commission has erred in the determination of its jurisdiction and has exceeded its jurisdiction in doing so39. Such a decision falls within the scope of "excess or want of jurisdiction" for the purposes of As a practical matter, it is not easy to imagine circumstances in which the Commission would find it lacked jurisdiction in a matter before it without first having made a determination about the non-existence of a jurisdictional fact. Nevertheless, the 1991 PSA case suggests that s 206(2) is not capable of a construction covering all forms of jurisdictional error. If such a construction be open, then, consistently with the decision of this Court in Kirk, and the application of s 22A(1) of the Acts Interpretation Act, s 206 should be so construed. Otherwise, s 206(1) should be read down pursuant to s 22A(2) of the 35 (1950) 82 CLR 54 at 75; [1950] HCA 40. 36 (1853) 9 Ex 111; 156 ER 47. 37 (1853) 9 Ex 111 at 140; 156 ER 47 at 60. 38 (1950) 82 CLR 54 at 75. 39 Reasons of Gummow, Hayne, Crennan, Kiefel and Bell JJ at [65]. Acts Interpretation Act so as not to preclude the exercise by the Supreme Court of its supervisory jurisdiction with respect to jurisdictional error, whether or not such error answers the description of excess or want of jurisdiction. Conclusion For the preceding reasons, I agree with the orders proposed in the joint judgment. Crennan Bell GUMMOW, HAYNE, CRENNAN, KIEFEL AND BELL JJ. Section 17(2) of the Supreme Court Act 1935 (SA) ("the Supreme Court Act") vests in the Supreme Court of South Australia the like jurisdiction to that formerly vested in the English courts, including the Court of Queen's Bench, and thus includes the issue of the writ of mandamus and the other prerogative writs. The applicant ("the PSA") seeks special leave to appeal from a decision of the Full Court of the Supreme Court of that State (Doyle CJ, Duggan and Vanstone JJ)40 which concerns the extent of the supervisory jurisdiction of the Supreme Court over the activities of the first respondent ("the Commission"). The resolution of that issue is said, in turn, to require appreciation of the significance for the Australian judicial structure of the conferral by s 73(ii) of the Constitution of jurisdiction on this Court to entertain "appeals from all judgments, decrees, orders, and sentences ... of the Supreme Court of any State", and of the decision in Kirk v Industrial Court (NSW)41 respecting the defining characteristics of those Supreme Courts. It will become apparent that matters of jurisdiction are involved in this litigation at least at two levels. The first is the determination of the Commission that it lacked jurisdiction, and the second is the extent of the jurisdiction of the Supreme Court to entertain a challenge by the PSA to that ruling. The PSA contends that the Commission erred by its determination that there was a want or absence of jurisdiction in the Commission because a particular jurisdictional fact, the presence of an industrial dispute, did not exist. These reasons seek to demonstrate that if the PSA makes good in the Supreme Court its contention that the Full Commission so erred, there will be presented an error by the Full Commission in the determination of its jurisdiction, and this error will be open to challenge in the Supreme Court. Early in October 2010, the PSA wrote to the Commission notifying it of what it said were two "industrial disputes" as defined in s 4(1) of the Fair Work Act 1994 (SA) ("the Fair Work Act") and thereby instituting applications under s 194 of that statute. The term "industrial dispute" means "a dispute, or a threatened, impending or probable dispute, about an industrial matter", and the term "industrial matter" is broadly defined so as to apply to a matter affecting or 40 Public Service Association of SA Inc v Industrial Relations Commission (SA) (2011) 109 SASR 223. 41 (2010) 239 CLR 531; [2010] HCA 1. Hayne Bell relating to the rights, privileges or duties of an employer or employers or an employee or employees, or the work to be done in employment. Part 3 (ss 23-40) of Ch 2 of the Fair Work Act is headed "The Industrial Relations Commission of South Australia". Section 26 sets out the jurisdiction of the Commission. Paragraphs (c) and (d) of s 26 respectively state that the Commission has jurisdiction "to resolve industrial disputes" and "to hear and determine any matter or thing arising from or relating to an industrial matter". The term "determination" means "an award, order, declaration, approval or decision" and "decision" includes "a refusal or failure to make a decision" The second respondent, the Chief Executive of the Department of Premier and Cabinet ("the Chief Executive") is the active respondent in this Court and is represented by the South Australian Solicitor-General. The Commission entered a submitting appearance. The Chief Executive is the employer of public employees for the purposes of the Fair Work Act42. The applications to the Commission by the PSA were followed by a voluntary conference under s 200. This was held before Commissioner McMahon on 13 October 2010. The Chief Executive denied there was any dispute as contended by the PSA and maintained that the jurisdiction of the Commission had not been enlivened. On 15 October 2010 the Commissioner issued a statement that the Commission was "of the preliminary view that it does not currently have any jurisdiction to deal with this matter". Thereafter, on 22 October 2010, the Commissioner made an order under s 202 of the Fair Work Act that it was the view of the Commission that "there is no jurisdiction" for the Commission to make orders in relation to the PSA matters. Section 39 of the Fair Work Act provides for the constitution of the Full Commission and s 207 deals with appeals from the Commission constituted by a single member to the Full Commission. The Full Commission (Judge Parsons DP, Bartel DP and Commissioner Doyle) agreed with Commissioner McMahon and on 26 October 2010 dismissed an appeal by the PSA43. 42 Fair Work (General) Regulations 2009 (SA), Reg 4(c). 43 [2010] SAIRComm 11. Crennan Bell Rule 200 of the Supreme Court Civil Rules 2006 (SA) ("the Rules")44 requires the permission of the Supreme Court to proceed with an action for judicial review. The Court may grant that permission if it is "satisfied that there is a reasonable basis on which the applicant might establish a right to an order for judicial review" (Rule 200(4)). An order for judicial review may be "an order to compel the performance of a duty of a public nature that cannot be enforced by some other adequate legal remedy (mandamus)" (Rule 199(2)(c)). Permission was granted to the PSA to proceed with its application, and it was heard by the Full Court of the Supreme Court. Section 206 of the Fair Work Act was a critical provision for that litigation because it concerns the extent of the supervisory jurisdiction of the Supreme Court. The section states: "(1) A determination of the Commission is final and may only be challenged, appealed against or reviewed as provided by this Act. (2) However, a determination of the Commission may be challenged before the Full Supreme Court on the ground of an excess or want of jurisdiction." The expression "the Commission" is so defined as to be read as including the Full Commission and it appears to have been common ground in the Full Court of the Supreme Court that s 206 applies to decisions of the Full Commission on appeals to it under s 207. The conferral of jurisdiction upon the Supreme Court by s 17(2) of the Supreme Court Act, carries with it the power to determine the satisfaction of criteria upon which this jurisdiction depends45. These criteria include the saving by s 206(2) of the Fair Work Act of certain jurisdiction from the exclusion otherwise made by s 206(1). 44 The Rules are made by the three or more Judges of the Supreme Court in pursuance of s 72 of the Supreme Court Act. 45 See DMW v CGW (1982) 151 CLR 491 at 507; [1982] HCA 73; R v Gray; Ex parte Marsh (1985) 157 CLR 351 at 374-375; [1985] HCA 67; Residual Assco Group Ltd v Spalvins (2000) 202 CLR 629 at 638 [8]; [2000] HCA 33; Re Macks; Ex parte Saint (2000) 204 CLR 158 at 177 [22], 185 [51], 278 [341]; [2000] HCA 62. Hayne Bell Is relief in the nature of mandamus available in the Supreme Court, despite s 206(1), where a determination of the Commission is challenged on the ground that the Commission erred in dismissing the proceeding before it on the ground that there was a want or absence of jurisdiction? As explained later in these reasons, a fair reading of s 206 would indicate that the answer is in the affirmative. However, this Court, in Public Service Association (SA) v Federated Clerks' Union46 ("the first PSA Case"), considered a similarly expressed provision to s 206 which was found in s 95(b) of the Industrial Conciliation and Arbitration Act 1972 (SA) ("the 1972 Act"). The first PSA Case was decided by Brennan J and by Dawson and Gaudron JJ on the immediate basis that the error in the decision of the Full Commission was that it had acted in excess of its jurisdiction with the result that s 95(b) did not preclude judicial review by the Supreme Court47. However, with respect to the phrase "excess or want of jurisdiction", all members of the Court in the first PSA Case48 appear to have accepted that it did not include failure or refusal to exercise jurisdiction. The distinction was drawn by Brennan J as follows49: "Judicial review on the ground of excess or want of jurisdiction is available when a body purportedly acting in exercise of jurisdiction has no jurisdiction to act in the particular way. Judicial review on that ground stands in contrast with judicial review on the ground of a wrongful failure or refusal to exercise jurisdiction. In the former case, there is no jurisdiction to exercise; in the latter, there is jurisdiction but no exercise of it. The exception in s 95(b) covers the former case; there is no acceptable canon of construction by which it can be extended to cover the latter case. Thus, s 95(b) appears to permit erroneous assumptions of jurisdiction to 46 (1991) 173 CLR 132; [1991] HCA 33. 47 (1991) 173 CLR 132 at 144-145 per Brennan J, 161 per Dawson and Gaudron JJ. Deane J (at 152-153) dissented on the basis that any error was within the jurisdiction of the Commission. McHugh J (at 166) dissented on the basis that the Commission did not make a jurisdictional error of any kind. 48 (1991) 173 CLR 132 at 142-143 per Brennan J, 151 per Deane J, 160 per Dawson and Gaudron JJ, 164-165 per McHugh J. 49 (1991) 173 CLR 132 at 142. Crennan Bell be checked by judicial review, but not erroneous refusals to exercise jurisdiction." In the present case, the Full Court of the Supreme Court correctly50 held that it was required by this construction of s 95(b) of the earlier legislation to conclude that s 206 of the Fair Work Act denied it jurisdiction with respect to the judicial review sought by the PSA. On 15 March 2011 the Full Court dismissed the Summons by the PSA for judicial review. On 8 June 2011, Heydon and Bell JJ referred to an enlarged Bench of this Court the special leave application by the PSA and directed that the application be fully argued as on an appeal. There are interventions by the Commonwealth, Victoria, Queensland, Western Australia and Tasmania, as well as by South Australia. On 28 November 2011, the day before the application was fixed for hearing before the whole Court, the South Australian Attorney-General notified the Court that the Solicitor-General would be submitting that special leave should be refused because "underlying factual circumstances giving rise to the original dispute in the Full Commission have been affected by subsequent events so as to render the present matter hypothetical". At the hearing the next day the PSA disputed that this was so. Rather than this Court resolve a factual dispute presented in this unsatisfactory manner, the better course is to proceed now to determine the substantive issues respecting the jurisdiction of the Supreme Court. If the PSA succeeds in obtaining special leave and its appeal is allowed, it will then be for the Full Court of the Supreme Court, on remitter, to determine whether there ever was, or, if so, whether there now remains, any relevant current industrial dispute for the resolution of which by the Commission an order in the nature of mandamus should issue. The primary submission of the PSA is that from the reasoning in Kirk51 it follows that s 206 of the Fair Work Act is invalid to the extent to which it denies the jurisdiction of the Full Court to review for jurisdictional error decisions of the Commission. The Commonwealth intervened substantially in support of the 50 Jacob v Utah Construction and Engineering Pty Ltd (1966) 116 CLR 200 at 207, 217; [1966] HCA 67; Western Export Services Inc v Jireh International Pty Ltd (2011) 86 ALJR 1 at 2-3 [3]-[4]; 282 ALR 604 at 605; [2011] HCA 45. 51 (2010) 239 CLR 531. Hayne Bell The Solicitor-General of South Australia appeared PSA. the Attorney-General as intervener, and was supported to some degree by the other State interveners. However, it will be unnecessary for this Court to determine any question of invalidity of s 206 if, upon its proper construction, the section does not, to any relevant degree, deny the jurisdiction of the Supreme Court52. for The South Australian Solicitor General, as had counsel for the Chief Executive in the Full Court of the Supreme Court, accepted that the Commission had a duty not merely a power to determine whether it had jurisdiction. The dispute between the active parties concerns the operation of s 206 upon the jurisdiction of the Supreme Court. However, Victoria, with the support of Queensland and Tasmania, sought to sidestep the dispute as to the scope of s 206 and the availability of mandamus, by denying any duty on the part of the Commission to determine jurisdictional facts. That submission, even if within the scope of an intervention as of right under s 78A of the Judiciary Act 1903 (Cth), should be rejected. Decisions of this Court given in its early years and collected in In re Judiciary and Navigation Acts53, established that the existence of an industrial dispute was "a condition of jurisdiction" conferred by the Commonwealth Conciliation and Arbitration Act 1904 (Cth) ("the 1904 Act"). It followed that mandamus might issue under s 75(v) of the Constitution to require determination of such a dispute, and, in particular, that it was no answer that the industrial tribunal had applied itself to the question whether it had jurisdiction, and that, therefore, in the absence of mala fides, the industrial tribunal had discharged the duty imposed upon it54. That is to say, it was not for the tribunal to determine 52 See Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 473-474 [249]-[252]; [2001] HCA 51; Wotton v State of Queensland (2012) 86 ALJR 246 at 250 [9]-[10], 253 [23]; 285 ALR 1 at 4-5, 8; [2012] HCA 2. 53 (1921) 29 CLR 257 at 267-268; [1921] HCA 20. 54 R v Commonwealth Court of Conciliation and Arbitration; Ex parte Ozone Theatres (Aust) Ltd (1949) 78 CLR 389; [1949] HCA 33; Attorney-General (Q) v Australian Industrial Relations Commission (2002) 213 CLR 485 at 502-503 [41]; [2002] HCA 42. Crennan Bell with finality whether or not an application was within its authority55. It is true that in the cases under the 1904 Act the jurisdictional fact of the existence of an industrial dispute also had the character of a constitutional fact, given the terms of s 51(xxxv) of the Constitution. Nevertheless, there is nothing in the text or structure of the Fair Work Act which requires any different construction of the jurisdictional provisions in s 26. An object of the Fair Work Act is the provision of a means for settling industrial disputes that cannot be resolved by amicable agreement (s 3(h)). The relevant jurisdiction of the Commission is created by s 26 of the Fair Work Act for the public benefit. Upon an application made to it under s 194, the Commission is not at liberty to refuse to deal with the matter, but, rather, has a duty to determine any jurisdictional facts upon which the attraction of its jurisdiction depends. It is no answer to the case put by the PSA that, if having entered upon the exercise of jurisdiction, the Commission would be empowered by s 168(b) of the Fair Work Act to desist from further hearing of proceedings if, in its opinion, it was not "in the public interest" to continue. It should be added that the species of jurisdictional error, constituted by a refusal or failure to exercise jurisdiction, is remedied by mandamus without any order in the nature of certiorari quashing any decision which refuses or fails to exercise jurisdiction. This is because the "ostensible determination is not a real performance of the duty imposed by law upon the tribunal"56. 55 Mutual Life & Citizens' Assurance Co Ltd v Attorney-General (Q) (1961) 106 CLR 48 at 56; [1961] HCA 51; cf Wade v Burns (1966) 115 CLR 537 at 562; [1966] HCA 35. 56 R v War Pensions Entitlement Appeal Tribunal; Ex parte Bott (1933) 50 CLR 228 at 242-243; [1933] HCA 30. See also R v Anderson; Ex parte Ipec-Air Pty Ltd (1965) 113 CLR 177 at 193, 201, 203; [1965] HCA 27; R v Toohey; Ex parte Northern Land Council (1981) 151 CLR 170 at 193-194, 269, 287; [1981] HCA 74; Minister for Immigration and Multicultural Affairs v Bhardwaj (2002) 209 CLR 597 at 614-615 [51], 644 [148]; [2002] HCA 11; Wade and Forsyth, Administrative Law, 9th ed (2004) at 624-625. Cf Public Service Association (SA) v Federated Clerks' Union (1991) 173 CLR 132 at 144-145, where there is an incomplete reference to a passage in the 6th edition of Professor Wade's work which has been substantially repeated in the later editions in which Professor Wade participated before his death in 2004. Hayne Bell The relationship in this area between prohibition and mandamus is, as the Commonwealth Solicitor-General submitted, correctly explained by Latham CJ in R v Blakeley; Ex parte Association of Architects of Australia57, a case under the 1904 Act. The Chief Justice said: "If an authority with limited jurisdiction has no power to make a conclusive decision as to the existence or non-existence of a collateral matter upon which jurisdiction depends, and makes a wrong preliminary decision either way, the mistake will be corrected by mandamus or prohibition β by mandamus if he wrongly decides that he has no jurisdiction, by prohibition if he wrongly decides that he has jurisdiction. In the present case the Commissioner has in my opinion erroneously decided that there are no disputes existing between the Association and its members on the one hand and the employers who were served with the log on the other. He has wrongly declined to exercise his power and to perform his duty of hearing and determining the disputes. Therefore, in my opinion, mandamus should issue." The effect of the construction of s 206 for which the Chief Executive and the supporting interveners contend is to deny to the Supreme Court its jurisdiction to issue orders in the nature of mandamus whilst preserving the jurisdiction to issue orders in the nature of prohibition and certiorari to control other species of jurisdictional error. The upshot would be that the Commission becomes a body to which the legislature has committed final authority to decide adversely to applicants issues of jurisdictional fact. This, to adapt what was said by Bray CJ in R v Industrial Commission of South Australia; Ex parte Minda Homes Incorporated58, is an interpretation of s 206 which "would produce a one-sided and partial result". Further, as explained in Kirk59, one of the defining characteristics of the Supreme Courts identified in Ch III of the Constitution is the supervision they exercise by the grant of remedies of which mandamus is one60. State legislative 57 (1950) 82 CLR 54 at 75; [1950] HCA 40. 58 (1975) 11 SASR 333 at 337. 59 (2010) 239 CLR 531 at 580-581 [98]-[99]. 60 (2010) 239 CLR 531 at 581 [100]-[101]. Crennan Bell power does not extend to depriving a State Supreme Court of its supervisory jurisdiction in respect of jurisdictional error by the Executive Government of the State, its Ministers or authorities61. Provisions such as s 206 of the Fair Work Act are to be read in a manner that takes into account the incapacity of State legislatures to take from the Supreme Courts their authority to grant relief for These propositions of constitutional law were not jurisdictional error. appreciated at the time when the first PSA Case was decided62. The Chief Executive and the State interveners sought to limit these propositions. They sought to do so by emphasising that the relief granted in Kirk was in the nature of certiorari to quash orders of the Industrial Court of New South Wales63 and that there was a citation in the joint reasons in Kirk64 of a passage from The Colonial Bank of Australasia v Willan65 which referred to certiorari to quash for "manifest defect of jurisdiction". The adjective "manifest" then was said to identify only that species of jurisdictional error considered in the first PSA Case to be captured by the phrase "excess or want of jurisdiction". There is some confusion of thought in these submissions. First, "manifest" is used with respect to certiorari in the sense of patent or apparent on the face of the record; what constitutes the "record" in a particular case may be a matter of debate. Secondly, as explained above, and contrary to what may be suggested by observations in the first PSA Case66, mandamus is not an adjunct to certiorari. Thirdly, Willan was relied upon in the joint reasons in Kirk for the general proposition that67: 61 South Australia v Totani (2010) 242 CLR 1 at 27 [26]; [2010] HCA 39. 62 cf John v Federal Commissioner of Taxation (1989) 166 CLR 417 at 438-439; [1989] HCA 5. 63 (2010) 239 CLR 531 at 595-596 [134]. 64 (2010) 239 CLR 531 at 580 [97]. 65 (1874) LR 5 PC 417 at 442. 66 (1991) 173 CLR 132 at 145. 67 (2010) 239 CLR 531 at 580 [97]. Hayne Bell "accepted doctrine at the time of federation was that the jurisdiction of the colonial Supreme Courts to grant certiorari for jurisdictional error was not denied by a statutory privative provision". This was followed68 by the statement that the supervisory role of the Supreme Courts was exercised through the grant of prohibition, certiorari, mandamus and habeas corpus. Accordingly, as the PSA, with the support of the Commonwealth, submitted, s 206 would be invalid if on its proper construction it purported to preclude a challenge in the Supreme Court to a determination of the Commission on the ground of a failure to exercise jurisdiction. The question then becomes one of the application to s 206 of a passage in the reasons of Isaacs J in Federal Commissioner of Taxation v Munro69, but bearing in mind that his Honour's reference there to "the intention of the legislature" is not to any collective mental state of legislators but rather to an expression of the constitutional relationship between the arms of government with respect to the making, interpretation and application of laws70. The passage in the reasons of Isaacs J is as follows71: "Construction of an enactment is ascertaining the intention of the legislature from the words it has used in the circumstances, on the occasion and in the collocation it has used them. There is always an initial presumption that Parliament did not intend to pass beyond constitutional bounds. If the language of a statute is not so intractable as to be incapable of being consistent with this presumption, the presumption should prevail. That is the principle upon which the Privy Council acted in Macleod v Attorney-General for New South Wales72. It is the principle which the 68 (2010) 239 CLR 531 at 581 [98]. 69 (1926) 38 CLR 153; [1926] HCA 58. See also Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1 at 14 per Mason CJ; [1992] HCA 64. 70 Zheng v Cai (2009) 239 CLR 446 at 455-456 [28]; [2009] HCA 52; Momcilovic v The Queen (2011) 85 ALJR 957 at 984 [38], 1009 [146], 1033 [280]; 280 ALR 221 at 239-240 [38], 274-275 [146], 306 [280]; [2011] HCA 34. 71 (1926) 38 CLR 153 at 180. Crennan Bell Supreme Court of the United States has applied, in an unbroken line of decisions, from Marshall CJ to the present day (see Adkins v Children's Hospital73). It is the rule of this Court (see, for instance, per Griffith CJ in Osborne v The Commonwealth74)." The terms in which s 206 is expressed are not so intractable as necessarily to impose a dichotomy between those jurisdictional errors by the Commission which are analogous to a misfeasance by reason of acts of the Commission "which have been done or carried out in breach of the conditions which circumscribe [its] powers and authorities"75, and those which are analogous to non-feasance by reason of failure to enter upon the exercise of jurisdiction. When the Commission decides erroneously not to proceed upon an application on the footing that there is no industrial dispute as required by s 26 of the Fair Work Act, the Commission has erred in the determination of its jurisdiction, and has exceeded its jurisdiction in doing so. The expression in s 206(2) "on the ground of excess or want of jurisdiction" is apt to include jurisdictional error, rather than merely some species of jurisdictional error. The result, upon this construction, is that s 206 preserves the jurisdiction of the Supreme Court with respect to jurisdictional error, but denies that jurisdiction with respect to other errors by the Commission, whether on the face of the record or otherwise. It also may be that s 206(1) operates to exclude collateral attacks on determinations by the Commission76. It is unnecessary to decide that question here. In the end, the justification for not following, with respect to s 206, the interpretation given to s 95(b) of the 1972 Act in the first PSA Case, is that that interpretation has now been shown to be "wrong in a significant respect"77. 73 261 US 525 at 544 (1923). 74 (1911) 12 CLR 321 at 337; [1911] HCA 19. 75 The words are those of McHugh J in the first PSA Case, (1991) 173 CLR 132 76 See Ousley v The Queen (1997) 192 CLR 69 at 80, 87, 100, 140; [1997] HCA 49; von Arnim v Ellison (2006) 150 FCR 282 at 291-293 [33]-[40]; Gedeon v Commissioner of New South Wales Crime Commission (2008) 236 CLR 120 at 132 [19], 133 [22]; [2008] HCA 43. 77 John v Federal Commissioner of Taxation (1989) 166 CLR 417 at 440; Barns v Barns (2003) 214 CLR 169 at 205 [104]; [2003] HCA 9. Hayne Bell Special leave to appeal should be granted, and the appeal treated as heard instanter and allowed. The orders of the Full Court of the Supreme Court made on 15 March 2011 should be set aside and the matter remitted to the Full Court for determination of the appellant's summons for judicial review, including any questions of costs in the Full Court. The second respondent should pay the costs of the PSA in this Court. HEYDON J. The applicant opened his address by observing that "this is a relatively short point and can be determined relatively easily." The trouble is that opinions have differed about what the short point is and how it should be determined. The orders that the other members of the Court propose should be made, but for different reasons. Background A Full Bench of the Industrial Relations Commission of South Australia concurred with the decision of Commissioner McMahon at first instance. Commissioner McMahon had decided that there was no "industrial dispute" between the applicant and the second respondent (the Chief Executive of the Department of Premier and Cabinet)78. Commissioner McMahon therefore held that he lacked jurisdiction. Assuming that there was in fact an industrial dispute, his decision was a failure to exercise jurisdiction, and, subject to s 206 of the Act, relief in the nature of mandamus was available to compel the exercise of jurisdiction. The Full Court of the Supreme Court of South Australia dismissed the applicant's summons for judicial review. The Full Court held that it lacked jurisdiction because of s 206 of the Act. This holding was contrary to a concession by the second respondent. Section 206 permits challenges before the Full Court to determinations of the Commission only on the ground of "an excess or want of jurisdiction."79 The Full Court correctly treated the Commission as having failed to exercise jurisdiction80. But the Full Court held that the words "an excess or want of jurisdiction" did not apply to a failure to exercise jurisdiction by reason of an erroneous finding that there was no industrial dispute. The Full Court reached this conclusion in the light of dicta in Public Service Association (SA) v Federated Clerks' Union, which considered a precursor to s 206 of the Act81. 78 The expression "industrial dispute" is defined in s 4(1) of the Fair Work Act 1994 (SA) ("the Act") as meaning "a dispute, or a threatened, impending or probable dispute, about an industrial matter". Section 4(1) gives an extensive meaning to "industrial matter". 79 See above at [46]. 80 Public Service Association of SA Inc v Industrial Relations Commission of SA (2011) 109 SASR 223 at 229 [16]-[17]. 81 (1991) 173 CLR 132; [1991] HCA 33. This application raises three questions. First, in view of the principles stated in Kirk v Industrial Court (NSW)82, is a State legislature precluded from preventing a State Supreme Court from engaging in judicial review of a wrongful failure by a tribunal to exercise jurisdiction? Secondly, if it is, does s 206 purport to do that? Thirdly, did the Act create a duty to exercise jurisdiction? For the reasons which follow, each question should be answered "Yes". First question: is Kirk's case relevant to mandamus for failure to exercise jurisdiction? The applicant's submissions on Kirk's case. The applicant's submissions rested on two incontrovertibly correct propositions. One was that wrongly to deny the existence of jurisdiction is to make a jurisdictional error83. The other was that mandamus is a remedy granted to deal with denial of jurisdiction84. The applicant submitted that it was beyond the power of the South Australian legislature to prevent the Supreme Court of South Australia from engaging in review of jurisdictional error. Kirk's case dealt with a privative clause which purported to exclude all relief by way of the prerogative writs. It purported not only to exclude orders of certiorari (quashing decisions based on jurisdictional error) and prohibition (preventing decisions based on jurisdictional error from being made), but also orders of mandamus (requiring the performance of a duty to exercise jurisdiction which the decision-maker had actually or constructively failed to exercise). The decision in Kirk's case did not distinguish between categories of jurisdictional error. It did not suggest that jurisdictional error arising when a decision-maker purports to exercise jurisdiction that that decision- maker lacks should be treated differently from jurisdictional error arising when a decision-maker wrongly fails or refuses to exercise jurisdiction which that decision-maker possesses. Further, the reasoning in Kirk's case was not limited to privative clauses preventing judicial review of courts for jurisdictional error; it extended to privative clauses preventing judicial review of tribunals for jurisdictional error. The applicant's submissions on Kirk's case accepted. The applicant's submissions are correct. Kirk's case held that the Constitution requires that 82 (2010) 239 CLR 531; [2010] HCA 1. 83 Kirk v Industrial Court (NSW) (2010) 239 CLR 531 at 573-574 [72]; Edwards v Santos Ltd (2011) 242 CLR 421 at 439 [46]; [2011] HCA 8. 84 Darling Casino Ltd v NSW Casino Control Authority (1997) 191 CLR 602 at 633; [1997] HCA 11; Bodrudazza v Minister for Immigration and Multicultural Affairs (2007) 228 CLR 651 at 675 [70]; [2007] HCA 14. "there be a body fitting the description 'the Supreme Court of a State'."85 A "constitutional corollary" 86 followed: "it is beyond the legislative power of a State so to alter the constitution or character of its Supreme Court that it ceases to meet the constitutional description."87 This Court explained88: "At federation, each of the Supreme Courts referred to in s 73 of the Constitution had jurisdiction that included such jurisdiction as the Court of Queen's Bench had in England." It held that at the time of federation it was "accepted doctrine β¦ that the jurisdiction of the colonial Supreme Courts to grant certiorari for jurisdictional error was not denied by a statutory privative provision."89 It held90: "The supervisory jurisdiction of the Supreme Courts was at federation, and remains, the mechanism for the determination and the enforcement of the limits on the exercise of State executive and judicial power by persons and bodies other than the Supreme Court. That supervisory role of the Supreme Courts exercised through the grant of prohibition, certiorari and mandamus (and habeas corpus) was, and is, a 'with such defining characteristic of those courts. exceptions and subject to such regulations as the Parliament prescribes', s 73 of the Constitution gives this Court appellate jurisdiction to hear and determine appeals from all judgments, decrees, orders and sentences of the Supreme Courts, the exercise of that supervisory jurisdiction is ultimately subject to the superintendence of this Court β¦ in which s 71 of the Constitution vests the judicial power of the Commonwealth." (emphasis added) And because, "The supervisory jurisdiction exercised by the State Supreme Courts by the grant of prerogative relief or orders in the nature of that relief is 85 (2010) 239 CLR 531 at 580 [96] per French CJ, Gummow, Hayne, Crennan, Kiefel 86 (2010) 239 CLR 531 at 580 [96]. 87 Forge v Australian Securities and Investments Commission (2006) 228 CLR 45 at 76 [63] per Gummow, Hayne and Crennan JJ; [2006] HCA 44. 88 Kirk v Industrial Court (NSW) (2010) 239 CLR 531 at 580 [97] (footnote omitted). 89 Kirk v Industrial Court (NSW) (2010) 239 CLR 531 at 580 [97]. 90 Kirk v Industrial Court (NSW) (2010) 239 CLR 531 at 580-581 [98]. 91 Kirk v Industrial Court (NSW) (2010) 239 CLR 531 at 581 [99]. governed in fundamental respects by principles established as part of the common law of Australia." "To deprive a State Supreme Court of its supervisory jurisdiction enforcing the limits on the exercise of State executive and judicial power by persons and bodies other than that Court would be to create islands of power immune from supervision and restraint." (emphasis added) And it held that there was a93: "continued need for, and utility of, the distinction between jurisdictional and non-jurisdictional error in the Australian constitutional context. The distinction marks the relevant limit on State legislative power. Legislation which would take from a State Supreme Court power to grant relief on account of jurisdictional error is beyond State legislative power." (emphasis added) The Court drew no distinction between different types of jurisdictional error in Kirk's case. It drew no distinction between certiorari and prohibition on the one hand and mandamus on the other. To draw these distinctions would leave in existence the "islands of power" which the reasoning in Kirk's case denied. Indeed, the Court treated mandamus as a remedy of equal significance to certiorari and prohibition in its capacity to carry out the supervisory role of the Supreme Courts. Those three remedies were treated as remedies which, depending on the form of a particular jurisdictional error, can be deployed as necessary to deal with the consequences of that error. South Australia's submissions on Kirk's case. South Australia did not dispute that Kirk's case applied to tribunals as well as to courts. But it, and at least two interveners, argued that Kirk's case held that both at federation and since, privative clauses were only ineffective to deny the capacity of State Supreme Courts to review for jurisdictional errors where those errors amounted to a "manifest defect of jurisdiction". The expression "manifest defect of jurisdiction" is taken from the Privy Council's advice in Colonial Bank of Australasia v Willan94. That passage was quoted with approval in Kirk's case95. 92 Kirk v Industrial Court (NSW) (2010) 239 CLR 531 at 581 [99]. 93 Kirk v Industrial Court (NSW) (2010) 239 CLR 531 at 581 [100]. 94 (1874) LR 5 PC 417 at 442. 95 Kirk v Industrial Court (NSW) (2010) 239 CLR 531 at 580 [97]. South Australia's argument assumes that the expression "manifest defect of jurisdiction" draws a distinction between excess or want of jurisdiction on the one hand and a failure to exercise jurisdiction on the other. South Australia relied on R v Bolton to support its assumption96. It submitted that R v St Olave's District Board97 applied that case. This reliance was misconceived. R v Bolton encountered some criticism in Kirk's case98. In any event, neither case supported South Australia's assumption. Neither case determined that a wrongful failure to refuse to exercise jurisdiction is to be distinguished from other forms of jurisdictional error. Willan's case was decided in 1874. There is English authority before that period recognising the power of the Court of King's Bench to grant mandamus against a refusal to exercise jurisdiction99. There is also authority from that period that the State Supreme Courts had power to issue mandamus to correct a failure to exercise jurisdiction100. And in modern times the Court of Appeal of the Supreme Court of New South Wales has held that mandamus will lie where a magistrate fails to exercise jurisdiction on the ground of apprehended bias. Their Honours cited Willan's case to support that approach101. More importantly, the context in which the expression "manifest defect of jurisdiction" is quoted in Kirk's case shows that this Court did not construe the expression as supporting South Australia's assumption. South Australia's position rests on a misconstruction of the reasoning in Kirk's case. In Kirk's case this Court did accept that there can be "legislation affecting the availability of judicial review in the State Supreme Courts."102 South 96 (1841) 1 QB 66 [113 ER 1054]. 97 (1857) 8 E & B 529 [120 ER 198]. 98 (2010) 239 CLR 531 at 569-571 [60]-[65]. 99 For example, R v Justices of Cumberland (1836) 4 Ad & El 695 [111 ER 949]. 100 Ex parte Himmelhoch (1878) SCR NS (NSW) 247; Gilbey v Stanton (1880) 14 SALR 64; In re Linley Hurst Lumb (1880) 14 SALR 128. See also Ex parte Thomas Cox (1876) 14 SCR (NSW) 287 and Ex parte Krefft (1876) 14 SCR (NSW) 446, which are cases in which mandamus was sought on that ground, but was refused for reasons other than the absence of power to grant it. 101 Sankey v Whitlam [1977] 1 NSWLR 333 at 344-345 per Moffitt P (Reynolds JA concurring). See also Hutley JA at 359-360. 102 (2010) 239 CLR 531 at 581 [100]. Australia relied on that passage without elaboration. However, legislation like s 206 which precludes judicial review for one type of jurisdictional error while leaving it open for another type of jurisdictional error is not the permitted type of legislation alluded to in that quotation. Three submissions of Victoria and Tasmania on Kirk's case. Tasmania supported all of Victoria's submissions without qualification and with little amplification. Three of those submissions relate to the submissions advanced by South Australia in relation to the first question. First, Victoria submitted that the reference to "mandamus" in Kirk's case was a reference only to a power to grant mandamus incidentally to prohibition or certiorari where jurisdiction had been exceeded. It was not a reference to a power to grant it where jurisdiction had not been exercised at all. Contrary to that submission and to other submissions of Victoria, and the reasoning in Kirk's case is not so limited. Secondly, Victoria submitted that since State legislatures can grant powers to act without creating duties to act, it would be anomalous to invalidate State legislation that limited judicial review for failure to exercise those powers. That submission overlooks the fact that what is under immediate consideration is not a power of the Commission, but a duty103. The submission is thus beside the point. Thirdly, Victoria submitted that while Kirk's case suggested that Supreme Court supervision of other State courts is constitutionally protected104, the protection did not extend to Supreme Court supervision of tribunals which were not courts. The submission departs from South Australia's position. There are no qualifications in the key passages in Kirk's case quoted above which support it105. And some of the words to which emphasis has been added in those passages β executive power and legislative power β suggest that there are no qualifications. Legislative power creates tribunals, and tribunals which are not courts exercise executive power. That there are no qualifications is also supported by the emphasised words, used twice, "persons and bodies other than" the Supreme Court. Those words extend not only to courts but also to tribunals which are not courts. The jurisdiction of the Court of Queen's Bench at the time of federation, to which Kirk's case referred, extended to the grant of prerogative relief not only in relation to courts but also other bodies. The "islands of power" to which the 103 Subject to arguments negating the existence of a duty, considered below at 104 (2010) 239 CLR 531 at 573-574 [72]. 105 See above at [73]. Court referred in Kirk's case and which would exist but for the entrenched supervisory jurisdiction of Supreme Courts could have been executive or judicial in nature, and could have involved powers exercised by a court, by a non-curial tribunal, or even by a body which is neither a court nor a tribunal. The application of Kirk's case beyond "courts" is rational, for it can be hard to distinguish between adjudicative bodies which are courts and those which are not, particularly in the case of non-federal bodies, for State constitutions do not embody any strict separation of powers. Further, this Court's consideration of Kirk's case in two later decisions has not suggested that it is limited to jurisdictional review of courts. The first was South Australia v Totani. It concerned a decision made by the South Australian Attorney-General under a South Australian statute. In that context the following statements were made. First106: "State legislative power does not extend to depriving a State Supreme Court of its supervisory jurisdiction in respect of jurisdictional error by the executive government of the State, its Ministers or authorities." (emphasis added) Secondly, it was said that "judicial review of the Attorney-General's decision will be available in the Supreme Court."107 Thirdly, it was said that for the reasons explained in Kirk's case108 the privative clause in the South Australian statute does not "remove the supervisory jurisdiction of the Supreme Court for jurisdictional error including breaches of the obligation to give procedural fairness."109 (emphasis added) The second decision was Wainohu v New South Wales. It concerned a non-curial decision β a decision made pursuant to a New South Wales statute by a judge of the Supreme Court of New South Wales, but acting as a designated person. It was said not to be in dispute that the effect of Kirk's case was that a privative provision in the New South Wales statute "has the effect that the section would not prevent a person from seeking prerogative relief in the Supreme Court 106 (2010) 242 CLR 1 at 27 [26] per French CJ; [2010] HCA 39, citing Kirk v Industrial Court (NSW) (2010) 239 CLR 531 at 581 [99]-[100]. 107 (2010) 242 CLR 1 at 78 [193], citing Kirk v Industrial Court (NSW) (2010) 239 CLR 531. 108 (2010) 239 CLR 531 at 580-581 [98]-[100] and 585 [113]. 109 South Australia v Totani (2010) 242 CLR 1 at 105 [268]. of New South Wales on the ground of jurisdictional error."110 It was also said of the privative provision that the "effectiveness of that exclusion is denied by the decision in [Kirk's case]."111 (footnote omitted) Second question: is s 206 inconsistent with Kirk's case? For the reasons just given, it is beyond the power of the South Australian legislature to prevent the Supreme Court of South Australia from reviewing a failure by the Commission to exercise jurisdiction. The second question therefore arises. Does s 206 purportedly prevent review of decisions which allegedly rest on a wrongful refusal to exercise jurisdiction? If it does not, it is valid. If it does, it is invalid. A statute is to be construed bearing in mind the constitutional limits on the powers of the relevant legislature. If the impugned statute is capable of bearing two meanings, one which would render it invalid and the other which would render it valid, the latter is to be preferred112. "[S]o far as different constructions β¦ are available, a construction is to be selected which, so far as the language β¦ permits, would avoid, rather than result in, a conclusion that the section is invalid"113. But the meaning compatible with validity must be "available". It is wrong to take words which bear only one meaning, which meaning leads to invalidity, and to rewrite them to create another meaning leading to validity. It is not for the Court to stand in the shoes of the legislature and purport to enact legislation within power which is different from the statute which the legislature actually enacted. 110 Wainohu v New South Wales (2011) 243 CLR 181 at 195 [15] per French CJ and Kiefel J; [2011] HCA 24, citing Kirk v Industrial Court (NSW) (2010) 239 CLR 111 Wainohu v New South Wales (2011) 243 CLR 181 at 224 [89]. 112 Federal Commissioner of Taxation v Munro (1926) 38 CLR 153 at 180; [1926] HCA 58; Attorney-General (Vict) v The Commonwealth (1945) 71 CLR 237 at 267; [1945] HCA 30; Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1 at 14; [1992] HCA 64; Gypsy Jokers Motorcycle Club Inc v Commissioner of Police (2008) 234 CLR 532 at 553 [11]; [2008] HCA 4. Similarly, s 22A(1) of the Acts Interpretation Act 1915 (SA) provides: "Every Act and every provision of an Act will be construed so as not to exceed the legislative power of the State." But this means only that it will be so construed if it is possible to do so. 113 New South Wales v The Commonwealth (Work Choices Case) (2006) 229 CLR 1 at 161 [355] per Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ; [2006] HCA South Australia submitted that the construction which some dicta of this Court gave to the precursor to s 206 in Public Service Association (SA) v Federated Clerks' Union of Australia114 was correct. That submission is sound. With respect to those who hold the contrary view115, and unsatisfactory though the construction may be in point of policy, a failure to exercise jurisdiction cannot be described as "an excess or want of jurisdiction", however widely the latter words are construed. Hence s 206 is invalid, at least to the extent that it excludes the Supreme Court's jurisdiction in circumstances of the present kind. South Australia made no submission that s 206 should be read down pursuant to s 22A(2) of the Acts Interpretation Act 1915 (SA). The dicta in Public Service Association (SA) v Federated Clerks' Union of Australia assumed that the precursor to s 206 was valid, but the reasoning stated in Kirk's case was not advanced to the Court on that occasion. It is therefore right to depart from that assumption in the light of Kirk's case. Third question: is there a duty on the Commission to exercise jurisdiction? Neither of the first two questions would arise if the Act only conferred on the Commission various powers to resolve industrial disputes, without imposing any duty on it to exercise jurisdiction to resolve them. South Australia did not advocate that point of view. Victoria, Tasmania, Queensland and Western Australia, however, did. In that fashion the third question potentially arises. The right of States to intervene in these proceedings depended on s 78A(1) of the Judiciary Act 1903 (Cth). The condition of intervention was that the proceedings "relate to a matter arising under the Constitution or involving its interpretation". There is a strong argument for the view that the role of an intervener under s 78A is limited to constitutional questions. What the interveners said about the first question fell within that limitation. What they said about the third question arguably did not. It may be desirable to bear in mind that s 78A(2) gives the Court power to make orders against interveners in relation to the costs of and occasioned by their interventions. However, no party in this case protested about being vexed by the conduct of the interveners, and it is therefore necessary to deal briefly with most of the interveners' arguments on the third question. Section 26(c) of the Act provided that the Commission has "jurisdiction to resolve industrial disputes". In the absence of statutory language to the contrary, a grant of jurisdiction ordinarily carries with it a duty to exercise it. No statutory 114 (1991) 173 CLR 132 at 141-143, 149, 160-161 and 166. 115 For example, Bray CJ in R v Industrial Commission of South Australia; Ex parte Minda Home Incorporated (1975) 11 SASR 333 at 337. language to the contrary exists. Hence, contrary to Victoria's approach, the circumstances do not create any task of "reconciling" s 206 with other provisions of the Act. Reliance was placed on s 206(1). It provides: "A determination of the Commission is final and may only be challenged, appealed against or reviewed as provided by this Act." It was submitted that s 206(1) confers power on the Commission to decline to exercise jurisdiction. The submission must be rejected. Victoria, Tasmania, Queensland and Western Australia relied on the words "excess or want of jurisdiction" in s 206(2) coupled with the absence of an express reference to a failure to exercise jurisdiction. But this mixes up two questions. One is: "Does the Commission have a duty to exercise jurisdiction?" The other is: "How far can a failure properly to carry out any duty be reviewable?" Section 206(2) is directed at the second question, not the first. Queensland argued that some of the Commission's powers arose only if there were "an industrial dispute", and that expression is so vague as to call for fine judgments to be made. The answer to that argument is that many issues arise in the law which rest on indeterminate criteria, and which can be hard to resolve in particular instances. That does not preclude the existence of duties to resolve those issues. Queensland submitted expressly, and Victoria and Tasmania submitted by implication, that the Act grants the Commission's powers of intervention under ss 82(3), 197, 200(1), 201(1) and 202 of the Act by the verb "may" rather than "must". It was pointed out that the Commission had power to reopen a decision that it had no jurisdiction pursuant to s 174. Victoria and Tasmania further relied on s 207. Tasmania also relied on s 199. The statutory provisions to which the submissions refer give the Commission specific powers, often in specific circumstances. The existence of those specific powers does not negate the Commission's general duty to exercise its jurisdiction which is to be inferred from s 26(c). Nor does the fact, on which Queensland relied, that despite the language of the Act the Commission cannot actually resolve disputes; it can only attempt to do so. Victoria and Tasmania also relied on the importance of speed and finality in resolving industrial disputes116. That factor does not deny the existence of a duty on the Commission to resolve them. It may explain, however, the South Australian legislature's decision to limit access to judicial review by means of 116 They cited Public Service Association (SA) v Federated Clerks' Union (1991) 173 CLR 132 at 147-148. For those reasons there is no statutory language excluding a duty on the Commission to exercise its jurisdiction to resolve an industrial dispute. There are also strong indications in the legislation that the duty exists. One of these is the power conferred by s 168. That section gives power to the Commission to desist from hearing proceedings where they are frivolous or vexatious or where it is not in the public interest that there be any further hearing. It therefore assumes that if those fairly stringent conditions are not met there is a duty to hear the proceedings. Western Australia advanced various additional arguments, but in view of its sound decision to take "no position on the correct construction to be given to the [Act]" these arguments need not be dealt with. Hypothetical controversy? South Australia submitted that special leave should be refused because changes in government policy favourable to the interests of the applicant's members had rendered the controversy moot and merely hypothetical. At least in relation to long service leave entitlements, that is not so. Conclusion Special leave should be granted, the appeal should be allowed, and consequential orders should be made. |
HIGH COURT OF AUSTRALIA PACIFIC CARRIERS LIMITED APPELLANT AND BNP PARIBAS RESPONDENT Pacific Carriers Limited v BNP Paribas [2004] HCA 35 5 August 2004 1. Appeal allowed with costs. ORDER 2. Set aside the orders of the New South Wales Court of Appeal made on 29 November 2002. 3. Remit the matter to the New South Wales Court of Appeal to deal with outstanding issues in conformity with the reasoning of this Court and to make orders disposing of the costs of the appeal to the Court of Appeal. On appeal from Supreme Court of New South Wales Representation: D F Jackson QC with A W Street SC and G J Nell for the appellant (instructed by Norton White) B W Rayment QC with I E Davidson for the respondent (instructed by Corrs Chambers Westgarth) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Pacific Carriers Limited v BNP Paribas Contract β Carriage of goods β Carriage by sea β Delivery of goods without surrendering bills of lading β Indemnity to carrier. Contract β Construction and interpretation β Relevant principles β Objective interpretation of commercial documents β Letters of indemnity executed by trader in favour of carrier relating to unloading cargo without bills of lading β Where documents also signed by officer of the respondent bank β Whether letters of indemnity purported to bind the respondent as an indemnifying party. Contract β Agency β Ostensible authority β Documents of the kind commonly relied upon and intended to be relied upon by third parties β Whether the assumption made by the appellant that the respondent was party to the letters of indemnity was induced or assisted by the respondent's conduct in such a way that it would be unjust to permit the respondent to depart from the assumption. GLEESON CJ, GUMMOW, HAYNE, CALLINAN AND HEYDON JJ. The issues in this appeal are narrower than the claims and cross-claims litigated before Hunter J in the Supreme Court of New South Wales1, or those aspects of the matter that went to the Court of Appeal2. The proceedings arose out of the sale of a cargo of legumes, comprising 10,000 metric tonnes of chick peas and 10,000 metric tonnes of dun peas, by an Australian grain trader, New England Agricultural Traders Pty Ltd (NEAT), to Royal Trading Company (Royal), an Indian grain trader operating out of Calcutta. The respondent, BNP Paribas (BNP), was NEAT's Sydney banker, and was financing the export transaction. A company based in Singapore, Swiss Singapore Overseas Enterprises Pte Ltd (SSOE), was Royal's financier. The appellant, Pacific Carriers Limited (Pacific), was the time charterer of the MV Nelson, the vessel on which the cargo was carried. The venture was something of a disaster. There was confusion about the letters of credit and bills of lading. While the cargo was between Australia and India there was a fall in the market for legumes. Hunter J found that Royal dishonestly delayed accepting the cargo, and failed to pay the purchase price. The carrier experienced problems with discharging in India, partly because of difficulties with the size of the vessel and the port draught. The cargo was delivered without production of the relevant bills of lading. The vessel was arrested. Claims made by SSOE against Pacific went to arbitration, and were settled on the basis that Pacific paid substantial damages and interest. NEAT became insolvent. The particular matter giving rise to this appeal concerns two letters of indemnity which were signed, or purportedly signed, by NEAT and BNP, and addressed and delivered to Pacific. Pacific claimed, pursuant to those letters of indemnity, to be entitled to be indemnified by BNP in respect of the losses it suffered by reason of delivering the cargo in the absence of bills of lading. BNP's defence to that claim was based mainly on two contentions: first, that on the true construction of the letters of indemnity BNP did not agree to indemnify 1 Pacific Carriers Ltd v Banque Nationale de Paris [2001] NSWSC 900 and [2001] NSWSC 963. 2 BNP Paribas v Pacific Carriers Ltd [2002] NSWCA 379. Pacific (the construction issue); secondly, that the letters of indemnity were signed without BNP's authority and were therefore not binding (the authority issue). The letters of indemnity The two letters of indemnity were dated respectively 28 January and 19 February 1999. This was not the first occasion on which BNP had co-signed, with NEAT, a letter of indemnity, addressed to carriers, agreeing to indemnify them in respect of any liability or loss or damage the carriers may sustain by reason of delivering cargo without production of bills of lading by the receiver. In September 1997, NEAT arranged for BNP to join in signing such a letter of indemnity addressed to the "Owners/Managers/Masters/Agents of the SS/MV Alam Tangkas". That letter of indemnity was procured by an employee of the Pacific group, who described it as a "bank letter of indemnity" and asked the brokers for the Alam Tangkas to "confirm the names and designations of the persons who have signed on behalf of the bankers". The brokers replied: "Signatories to L0I from [BNP] are Ms Era Dhiri - Manager Trade Finance - and Mr Phil Arndell - Senior Trade Officer". The document bore the signatures of Ms Dhiri and Mr Arndell and the same bank stamp, or "chop", as was to be used on the 1999 documents. There is no evidence that the indemnity was enforced, or that it was adverted to in 1999. There was some other evidence of commercial practice. The 1999 documents were based on a standard form of letter of indemnity, described by the authors of a text on bills of lading3 as being "designed ... to be provided by those who want to have the cargo delivered to them but do not have the bill. It provides protection for the carrier up to a certain figure ... It will normally be backed by a bank." The reasons why carriers might seek such an indemnity are obvious. There could be a number of circumstances in which, upon the arrival of cargo, delivery is sought without the production of bills of lading. In that event, a carrier will seek an indemnity before delivery. Since the indemnifying party may be an entity whose credit is unknown to the carrier, the carrier may require that a bank join in the indemnity. The editors of an Australian text on the law relating to banker and customer refer4 to "undertakings relating to the delivery of goods 3 Gaskill, Asariotis & Baatz, Bills of Lading: Law and Contracts (2000) at 426. 4 Weaver and Craigie, The Law Relating to Banker and Customer in Australia, 3rd ed (2003), vol 3 at [15.7450]. by a ship's master without surrender of the bill of lading" as a recognised form of guarantee given by a bank. In his evidence, Mr Ryan, the State Manager of BNP, referred to "a bank endorsed absent bill of lading guarantee". Substituting "indemnity" for "guarantee", that is what Pacific says it sought, and obtained, in September 1997, and again in January and February 1999. A carrier ordinarily will not know the details of the financial and other arrangements between the primary party to such an indemnity and the bank which endorses it. There was evidence that a bank would normally charge a substantial fee for joining in such an indemnity. It is likely that a carrier would not know whether such a fee had been paid, or what, if any, security the bank held. In the present case, no fee was charged by BNP, and no adequate security to cover any potential liability as an indemnifier was held, but Pacific was not aware, and could not reasonably have been expected to be aware, of that. The legumes were sold by NEAT to Royal under four contracts made in July and August 1998. Shipment was to be made between dates in November and December 1998. The discharge port was Calcutta. Payment was to be by letters of credit to be opened and payable in Sydney with BNP. SSOE arranged for letters of credit to be opened. In December 1998, Pacific entered into a time charter of the MV Nelson, and NEAT entered into a voyage charter. Loading was completed in January 1999. On 24 January 1999, the vessel arrived in India. It is unnecessary to go into the problems then encountered. The initial bills of lading covering the cargo were switched and split. There were delays in discharge. NEAT sent a facsimile message to a firm of brokers saying: "To avoid delay in discharge we have prepared LOI text for Royal to open to shipping company to commence discharging against LOI pending B/L's arrival. This needs to be signed by Royal Trading's bank and original lodged with shipowner's agent in Calcutta." On 28 January, the brokers sent to NEAT a form of letter of indemnity signed by Royal, but with an endorsement by a bank which disclaimed any liability on the part of the bank and merely confirmed Royal's signature. This was rejected by Pacific. It may be noted, however, that the text prepared by NEAT for Royal and its bank to sign was in the form of a receivers' indemnity, not a shippers indemnity. As will appear, the same form was used later when NEAT itself signed the two letters of indemnity now in question. The bank involved in the original attempt to satisfy the requirements of Pacific made clear that it was not undertaking liability as an indemnifier. NEAT knew that Royal's letter of indemnity had been rejected. This occurrence illustrates the commercial importance of the capacity in which a bank signs a letter of indemnity of the kind in question. Royal's bank specified and limited the capacity in which it signed, for the obvious purpose of avoiding potential liability as an indemnifying party. On 25 January 1999, an officer of NEAT had spoken to Ms Dhiri of BNP. He referred to the possibility of "a back to back LOI". On 28 January, NEAT sent a facsimile to Ms Dhiri referring to the "need to get LOI in place at Calcutta to allow vessel to commence lightening ... ." He attached the first of the two relevant letters of indemnity. Ms Dhiri was requested to have it signed and sent to Pacific. Ms Dhiri signed it in the space reserved for "Banker's signature" and affixed BNP's stamp. The document sent by NEAT to Ms Dhiri for signature by BNP was in the following form: "STANDARD FORM OF UNDERTAKING TO BE GIVEN BY CARGO RECEIVERS IN RETURN FOR RECEIVING CARGO WITHOUT PRODUCTION OF THE BILLS OF LADING PACIFIC CARRIERS LTD The owners of the M/V Nelson c/- MULTIMODE MARITIME PVT LTD 53-A MIRZA GHALIB STREET CALCUTTA 700016 TEL: (9133) 229 4314/7312/7339/5298 FAX: (9133) 226 9081/5353 MR BIBLAP RAY FROM NEW ENGLAND AGRICULTURAL TRADERS PTY LTD PO BOX 770 ARMIDALE NSW 2350 TEL: 61 2 67 725588 FAX: 61 2 67 728004 Dear Sirs, VOYAGE: FREMANTLE/ESPERANCE/BRISBANE, AUSTRALIA TO CALCUTTA, INDIA CARGO & ORIGINAL BILLS OF LADING NUMBERS: 10,469.23 METRIC TONNES AUSTRALIAN FIELD (DUN) PEAS FARMER DRESSED BILLS OF LADING NOS: 1 DATED 24/12/98 2 DATED 27/12/98 3 DATED 27/12/98 The above goods were shipped on the above vessel by Mssrs NEW ENGLAND AGRICULTURAL TRADERS PTY LTD (and consigned to order) for delivery at the port of CALCUTTA, INDIA, but the Bills of Lading and we, NEW ENGLAND AGRICULTURAL TRADERS PTY LTD hereby request you to give delivery of the said cargo to: arrived have not yet RECEIVERS AS DIRECTED BY M/S ROYAL TRADING COMPANY NO 2, CLIVE GHAT STREET 5TH FLOOR, ROOM NO 8 CALCUTTA 700 001 (W.B) without production of the original Bills of Lading. In consideration of your complying with our above request we hereby agree as follows: To indemnify you, your servants and agents and to hold all of you harmless in respect of any liability loss or damage of whatsoever nature which you may sustain by reason of delivering the goods to RECEIVERS AS DIRECTED BY M/S ROYAL TRADING COMPANY NO 2, CLIVE GHAT STREET 5TH FLOOR, ROOM NO 8 CALCUTTA 700 001 (W.B) in accordance with our request. In the event of any proceedings being commenced against you or any of your servants or agents in connection with the delivery of the goods as aforesaid to provide you or them from time to time with sufficient funds to defend the same. If, in connection with the delivery of the cargo as aforesaid, the ship or any other vessel or property belonging to/chartered by you should be arrested or detained or if the arrest or detention thereof should be threatened, to provide on demand such bail or other security as may be required to prevent such arrest or detention or to secure the release of such vessel or property and to indemnify you in respect of any liability, loss, damage or expenses caused by such arrest or detention or threatened arrest or detention whether or not such arrest or detention or threatened arrest or detention may be justified. As soon as all original bills of lading for the above goods shall have come into our possession, to produce and deliver the same to you whereupon our liability hereunder shall cease. The liability of each and every person under this indemnity shall be joint and several and shall not be conditional upon your proceeding first against any person, whether or not such person is party to or liable under this indemnity. in no circumstances exceed 200% of the CIF value of the above cargo. The liability of each and every person under this indemnity shall This indemnity shall be construed in accordance with English law and each and every person liable under this indemnity shall at your request submit to the jurisdiction of the High Court of Justice of England. [stamp: [NEW ENGLAND AGRICULTURAL] [TRADERS PTY LTD [PO BOX 770 [ARMIDALE NSW 2350 [ACN 003 271 841] Yours Faithfully, [signature of] [signature of] For and on Behalf of NEW ENGLAND AGRICULTURAL TRADERS PTY LTD PO Box 770 ARMIDALE NSW 2350 TEL: 61 2 67 725588 FAX: 61 2 67 728004 Name(s): [printed PETER P SNIEKERS] [printed: PETER M HOWARD] [printed DIRECTOR] [printed DIRECTOR] For and on behalf of: BANQUE NATIONALE DE PARIS 12 CASTLEREAGH ST AUSTRALIA (insert name of bank) Banker's signature [signature of] [Era Dhiri] [bank stamp] [or 'chop']" Ms Dhiri signed her name, and affixed the bank's stamp or "chop", next to the words "Banker's signature". She sent the document to NEAT, and NEAT sent it by facsimile to Pacific. It will be necessary to refer below to the evidence as to how Ms Dhiri came to sign the letter of indemnity. In February 1999, further difficulties were experienced in relation to discharge and delivery of the cargo. By 16 February, discussions had taken place between NEAT and Ms Dhiri about the issue of another letter of indemnity, this time in respect of part of the cargo of chick peas. In a facsimile message, a copy of which went to Ms Dhiri, NEAT said: "Shipping company have once again advised they will not discharge cargo on to lighters without BNP counter signed NEAT LOI." On 18 February 1999, NEAT sent to BNP an "attached LOI in readiness for bank's signature to allow MV Nelson to recommence discharging grain at Calcutta." The letter of indemnity had already been executed by NEAT. The cargo referred to was 3,800 metric tonnes of Australian chick peas. Four bills of lading were mentioned. Otherwise the form was the same as the first letter of indemnity. Ms Dhiri was requested by NEAT to "fax it directly" to the shipping agent so that he "can then pass it directly onto vessel owners so discharging of vessel can commence as soon as possible." On 19 February 1999, Ms Dhiri signed the second letter of indemnity in the space reserved for "Banker's signature" and affixed BNP's stamp to it. The document was sent by facsimile to Pacific, which then informed its agent in Calcutta that, since Pacific was in possession of the letter of indemnity, the agent had authority to release 3,800 metric tonnes of chick peas to Royal. Hunter J found that Ms Dhiri "was made well aware of the purpose for which NEAT required BNP's execution of the second NEAT LOI and that it would be forwarded directly to [Pacific] once signed by the bank so discharging could commence". He found that the use to be made of both letters of indemnity, once signed on behalf of BNP, was made clear by NEAT to Ms Dhiri. Once the second letter of indemnity reached Pacific, lightening resumed. Discharge of cargo occurred in stages until 10 March 1999, when it stopped. The vessel was arrested on 31 March 1999 on SSOE's application. At that time a quantity of chick peas and dun peas remained on board. Pacific's loss It is unnecessary to explain the nature or the amount of the loss suffered by Pacific in consequence of delivery of cargo to, or in accordance with the direction of, Royal. There was no issue before this Court about that matter. Hunter J, who, for reasons to be mentioned below, awarded damages to Pacific against BNP, not in contract but in tort, assessed damages at US$4,237,207.47 together with interest. A number of BNP's grounds of appeal to the Court of Appeal related to the calculation of damages, but the Court of Appeal did not reach that question. It allowed BNP's appeal on liability. The decisions of Hunter J and the Court of Appeal Pacific's primary claim against BNP, NEAT being insolvent, was that BNP was liable in contract as a party to the two letters of indemnity. BNP's defence was that, on the true construction of the letters of indemnity, only NEAT was bound to indemnify Pacific, and BNP's role was merely to verify or authenticate NEAT's execution of the documents. In addition, BNP argued that, if it failed on the construction issue, then it was not liable on the letters of indemnity because Ms Dhiri had no authority to bind the bank to an indemnity. Those competing arguments were maintained in the Court of Appeal and in this Court. Hunter J took a view of the construction of the documents which was not advanced by either party, and which was not supported by either party on appeal. He concluded that BNP's role was that, by signing the letters of indemnity, it was representing to Pacific that NEAT had the financial capacity to honour its obligations under the letters of indemnity. Pacific made alternative claims against BNP in negligence, and for misleading conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth). Hunter J held that the negligence case, though argued on a different basis, was wide enough to cover negligent misrepresentation as to NEAT's financial strength. He held that NEAT's conduct amounted to actionable negligence, and assessed and awarded damages as mentioned above. In the Court of Appeal, Sheller JA, with whom Handley JA and Giles JA agreed, accepted the construction of the letter of indemnity for which Pacific contended. He said that the contest was "between, on the one hand, language which might be read so as to limit to one party, the requestor [NEAT] alone, an agreement to indemnify, and on the other hand, the clear purpose of the ... standard form to be used as a joint indemnity by the requestor and a bank". He rejected the construction contended for by BNP, and also the alternative construction preferred by Hunter J. However, he upheld BNP's defence based on lack of authority. He held that Ms Dhiri had neither actual nor ostensible authority to bind the bank to an indemnity. He also rejected the claims in negligence and under the Trade Practices Act. If Pacific's appeal to this Court succeeds on the contract issue, it will be unnecessary to consider those alternative claims. The construction issue The nature of the obligations undertaken by BNP in consequence of the signature and transmission to Pacific of the letters of indemnity depends upon the meaning of the documents, the particular problem being the capacity in which, on the true construction of the documents, the bank was involved in the transaction. That question has a factual relationship to the question of Ms Dhiri's authority, in that both she, and her superior, Mr Kavanagh, gave evidence that it was their understanding that all that BNP was doing was authenticating NEAT's execution of the letters of indemnity. Ms Dhiri gave evidence that she told NEAT that execution by BNP was only for verification of the signatures. That evidence was denied. Hunter J said he had great difficulty in deciding where the truth lay. He accepted that "something must have been said by [Ms Dhiri] at one time or another to a NEAT representative that, in her mind, conveyed the message that she was signing the NEAT LOIs merely for verification of signatures", but he did not accept that any such limitation was effectively communicated to NEAT. More significantly, it was never communicated to Pacific. What is important is not Ms Dhiri's subjective intention, or even what she might have conveyed, or attempted to convey, to NEAT about her understanding of what she was doing. The letters of indemnity were, and were intended by NEAT and BNP to be, furnished to Pacific. Pacific did not know what was going on in Ms Dhiri's mind, or what she might have communicated to NEAT as to her understanding or intention. The case provides a good example of the reason why the meaning of commercial documents is determined objectively: it was only the documents that spoke to Pacific5. The construction of the letters of indemnity is to be determined by what a reasonable person in the position of Pacific would have understood them to mean6. That requires consideration, not only of the text of the documents, but also the surrounding circumstances known to Pacific and BNP, and the purpose and object of the transaction7. In Codelfa Construction Pty Ltd v State Rail Authority of NSW8, Mason J set out with evident approval the statement by Lord Wilberforce in Reardon Smith Line Ltd v Hansen-Tangen9: "In a commercial contract it is certainly right that the court should know the commercial purpose of the contract and this in turn presupposes knowledge of the genesis of the transaction, the background, the context, the market in which the parties are operating." 5 Wilson v Anderson (2002) 76 ALJR 1306 at 1308-1309 [7]-[10]; 190 ALR 313 at 6 Gissing v Gissing [1971] AC 886 at 906; Christopher Hill Ltd v Ashington Piggeries Ltd [1972] AC 441 at 502; ABC v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540. Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896; [1998] 1 All ER 98. (1982) 149 CLR 337 at 350. See further Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002) 76 ALJR 436 at 445 [39]; 186 ALR 289 at [1976] 1 WLR 989 at 995-996; [1976] 3 All ER 570 at 574. It is not suggested that there is any material difference between the two letters of indemnity. It is convenient to deal with the construction question by reference to the first. The heading of the document describes it as a "standard form of undertaking" to be given in connection with delivery of cargo "without production of the bills of lading". The reason why a carrier would seek such an undertaking has already been explained. The heading contains a misdescription. It describes the undertaking as being "given by cargo receivers". The body of the document contains an undertaking by the shippers. The explanation is fairly obvious. An abortive attempt had been made earlier by NEAT to provide Pacific with a bank endorsed indemnity from Royal. The same "standard form" was used for NEAT's indemnity. That also accounts for the terms of cl 4. The primary indemnifying party is NEAT. The question concerns the effect of BNP's signature and stamp (leaving to one side the issue of authority). Pacific argues that it was a bank endorsement under which BNP also accepted liability as an indemnifier. The commercial purpose was plain. Pacific was being requested by NEAT to take a risk by delivering cargo to receivers who could not produce the appropriate bills of lading. Pacific informed NEAT, and NEAT informed BNP, that Pacific would not agree to take that risk unless NEAT's bank also signed the document. Pacific had only limited knowledge of the financial capacity of NEAT to meet its obligations under the indemnity. The terms of the document, understood in the light of the surrounding circumstances and the purpose and object of the transaction, and the market in which the parties were operating, meant that BNP was undertaking an obligation of indemnity. Relevant to the meaning of the document was not only what it said, but also what it did not say. There was nothing in the terms of the document to indicate that BNP was merely authenticating the execution by NEAT, and there was nothing in the surrounding circumstances to suggest that Pacific would accept such authentication only. A reasonable reader in the position of Pacific would have understood the document as a bank endorsed absent bills of lading indemnity, and would have understood that the bank was undertaking liability as an indemnifying party to support the liability undertaken by NEAT. The decision of the Court of Appeal on the construction issue was correct. A subsidiary question of construction was raised before Hunter J. The Court of Appeal did not need to deal with it. BNP argued that because, by the time the letters of indemnity were invoked, the original bills of lading referred to had been cancelled (in consequence of switching and splitting), the letters of indemnity were spent, or incapable of having further effect. This argument was based principally upon the terms of cl 4. BNP was aware that the bills of lading were to be switched and split. The letters of indemnity were for the very purpose of dealing with a situation in which no bills of lading were produced by the person or persons seeking delivery of the goods. Given the knowledge of Pacific and NEAT, as at the execution of the letters of indemnity, that the initial bills would be cancelled, and switched bills issued, Hunter J held that it would be absurd to construe the document as producing the consequence that, upon cancellation of the original bills the obligation to indemnify would cease to operate. He was right to do so. The authority issue It is necessary to make further reference to the facts. Ms Dhiri, who signed the letters of indemnity on behalf of BNP, and affixed BNP's stamp, was Manager of the Documentary Credit Department. It seems that this was also described as the Trade Finance Department. Her evidence was that her duties included supervising the day-to-day handling of import/export letters of credit, the day-to-day handling of import/export collections, and the staff of the Documentary Credit Department. That is how it came about that NEAT dealt with her in relation to the whole transaction, including Pacific's requests for letters of indemnity. BNP's Sydney office was of a relatively modest size, and there were only five people, including Ms Dhiri, in the Documentary Credit Department. The stamp was one that was used for the purposes of letters of credit. The evidence showed that the issuing of indemnities and guarantees by BNP in Sydney was the function of the Guarantee Loan Department, not the Documentary Credit Department. Guarantees and indemnities were to be signed under power of attorney. An internal bank instruction, provided also to agents and correspondents, dealt with authorisation to sign documents. All Commercial Bills of Exchange and Certificates of Deposit were to be signed by two persons, one of whom had to be an "A" Signatory. Other correspondence or documents to bind the bank had to bear two signatures. Ms Dhiri was an ordinary signatory, not an "A" signatory. Hunter J found that Ms Dhiri did not have authority to bind the bank to a guarantee or indemnity. That finding is not contested. It has already been noted that, in 1997, Ms Dhiri had signed, together with another BNP officer, and stamped, a letter of indemnity given by NEAT, in respect of delivery of cargo without bills of lading. Ms Dhiri's superior was Mr Kavanagh, the bank's "account manager" for NEAT. He was a "relationship manager" in "the Corporate Lending Department". Both Mr Kavanagh and Ms Dhiri said that, when NEAT asked Ms Dhiri to obtain BNP's signature to the first 1999 letter of indemnity, she spoke to Mr Kavanagh. Mr Kavanagh said it was his understanding that Ms Dhiri was seeking authority "to verify the letter of indemnity", and that he left it to her to decide the method of verification. He did not give her any instructions as to how to do that, as she "was the head of the department". He did not read the entire document but he acknowledged in his evidence that there was "a problem" in signing it if it was not made clear to the parties who requested it in the first instance in what capacity that was being done. Mr Ryan, the State Manager, said that, in January and February 1999, there was no established practice within the Sydney branch of BNP as to the procedure to be followed where the bank was asked by a third party to verify a customer's signature on a commercial document, but in-house counsel in March 1999 instituted such a procedure, which was "more explicit in terms of the capacity we would be signing". found Mr Kavanagh's evidence of his communications with Ms Dhiri confusing, because of an apparent difficulty of recalling the sequence of events. The judge said he had difficulty in accepting Ms Dhiri as a reliable witness. He was prepared to accept that, in her mind, she believed she was signing merely for verification purposes. He found that she did not make that clear to NEAT. Certainly, nobody informed Pacific of that. Hunter J found that Pacific regarded the letters of indemnity as carrying an indemnity from BNP and that, in all the circumstances, it was reasonable for Pacific to rely upon the letters as carrying a bank indemnity. Those circumstances included the rejection by Pacific of the Royal indemnity, and the absence of any limitation or notation on the letters of indemnity. Implicit in the finding that it was reasonable for Pacific to rely upon the documents as carrying an indemnity from BNP is a finding that it was reasonable for Pacific to rely on the signature and the stamp as binding the bank. As to how NEAT and Ms Dhiri came to act as they did, Hunter J said: "The evidence ... is strongly indicative of a state of confusion, if not near panic created by Royal's dishonesty in failing to meet its obligations of payment under the NEAT/Royal contracts, combined with SSOE's frustrating conduct in delaying acceptance of discrepant documents, due to unsatisfactory business relations with Royal. I think the reasoning of both NEAT and Dhiri, shortly stated, was that, once payment under the subject letters of credit was assured by acceptance of discrepant documents, the provision of an LOI was an expedient, risk free exercise. In reality, with SSOE as the notify party under the initial bills, as shipper under the switched bills and as the party nominated in the NEAT/Royal contracts to open the requisite letters of credit, the risk was great in providing the LOIs where, in each instance, the bills of lading would be in the possession of SSOE under the letters of credit arrangements and where the passage of the bills into the hands of Royal depended upon the terms of the financial arrangements between SSOE and Royal: the precise terms of which were unknown to NEAT." It was put to Mr Ryan, in the course of his evidence, that the bank knew that the letters of indemnity were going to a third party, and that the execution of such a document by the bank without any qualifying endorsement offered some form of assurance to that third party. His response was that he would have agreed to that proposition if the original of the document were going to the third party, but the position would be different if only a facsimile copy were going. This distinction is unconvincing in light of the fact that Pacific was calling for the letters of indemnity as a matter of urgency and it was contemplated by Pacific, NEAT and BNP that they would be sent by facsimile. However, Mr Ryan accepted that it was "not best practice" to sign documents like this for purposes of verification only without stating that this was the limited purpose. As has been noted, BNP's practice changed in March 1999. The absence of any practice within BNP for the guidance or instruction of Ms Dhiri as to communicating to the addressee of a letter of indemnity that the bank's signature on the document was only for the purpose of verifying the signature of the other party, in contrast to the procedure that had been adopted by Royal's banker, is part of the explanation of Ms Dhiri's conduct. There was no established procedure for qualifying or limiting the terms upon which the bank signed; Mr Kavanagh left Ms Dhiri to her own devices; and she signed and stamped the documents in an unqualified form. On the facts found by Hunter J, there is no question of fraud on the part of Ms Dhiri, and there was nothing to put Pacific on notice or inquiry as to her lack of actual authority to bind the bank. Emphasis was placed in the argument for Pacific upon the fact that Ms Dhiri was, in truth, authorised to sign and stamp the two documents on behalf of the bank. There is an ambiguity in that proposition. Mr Kavanagh knew and intended that Ms Dhiri would sign the documents, and send them to Pacific. Mr Kavanagh had no authority to bind the bank to an indemnity, and Ms Dhiri dealt with the documents as she did under a misapprehension as to their legal effect. The actual authority possessed by Ms Dhiri explains, as a matter of fact, how she came to sign and stamp the documents, and send them to Pacific. The unusual feature of the case is that Ms Dhiri had authority to sign the documents in one capacity but not in another, and the documents made no express reference to the capacity in which they were signed. To describe Ms Dhiri's conduct as unauthorised is true, but it is an over- simplification. It should be added that there is no suggestion that there is anything in the public documents of BNP inconsistent with the possibility that Ms Dhiri might have had actual authority to bind the bank. As a matter of administration she did not have such authority, but that was the consequence of the bank's internal procedures, not of its constitution. In Crabtree-Vickers Pty Ltd v Australian Direct Mail Advertising & Addressing Co Pty Ltd10, and in Northside Developments Pty Ltd v Registrar- General11, this Court followed and applied Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd12 as to the general principles concerning the apparent or ostensible authority of an officer of a company dealing with a third party. Where an officer is held out by a company as having authority, and the third party relies on that apparent authority, and there is nothing in the company's constitution to the contrary, the company is bound by its representation of authority. "The representation, when acted upon by the contractor by entering into a contract with the agent, operates as an estoppel, preventing the principal from asserting that he is not bound by the contract."13 It is not enough that the representation should come from the officer alone. Whether the representation is general, or related specifically to the particular transaction, it must come from the principal, the company14. That does not mean that the conduct of the officer is irrelevant to the representation, but the company's conduct must be the source of the representation. In many cases the representational conduct commonly takes the form of the setting up of an organisational structure consistent with the company's constitution. That structure presents to outsiders a complex of appearances as to authority. The assurance with which outsiders deal with a company is more often than not based, not upon inquiry, or positive statement, but upon an assumption that company officers have the authority that people in 10 (1975) 133 CLR 72. 11 (1990) 170 CLR 146. 13 Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480 at 503 per Diplock LJ. 14 Northside Developments Pty Ltd v Registrar-General (1990) 170 CLR 146 at 187 their respective positions would ordinarily be expected to have. In the ordinary case, however, it is necessary, in order to decide whether there has been a holding out by a principal, to consider the principal's conduct as a whole15. In the present case, BNP insisted that the necessary representation had to be one made to Pacific by BNP about Ms Dhiri, not merely one made by Ms Dhiri about herself. Again, this is true, but it is also an over-simplification. The point was regarded as decisive in the Court of Appeal. Sheller JA considered that "the only evidence of any representation by BNP to [Pacific] has to be found in Ms Dhiri's signature on the NEAT LOIs. In other words the argument has to be that Ms Dhiri by herself signing the document represented that she had authority to and did bind BNP to a contract to indemnify." There is more to the case than that. A kind of representation that often arises in business dealings is one which flows from equipping an officer of a company with a certain title, status and facilities. In Crabtree-Vickers Pty Ltd v Australian Direct Mail Advertising & Addressing Co Pty Ltd, for example, the Court spoke of the representation that might flow from supplying a particular person with "a blank order form, thus arming him with a document which, when he signed it, would bear the hallmark of authenticity"16. The reference to corporate administrative procedures under which an officer is armed with a document to which he or she can, by signature, impart an appearance of authenticity is a reminder of the wider principle of estoppel which may be relevant to a question of ostensible authority17. The holding out might result from permitting a person to act in a certain manner without taking proper safeguards against misrepresentation. In Thompson v Palmer18, Dixon J said: "The object of estoppel in pais is to prevent an unjust departure by one person from an assumption adopted by another as the basis of some act or omission which, unless the assumption be adhered to, would operate to 15 The "Raffaella" 1985] 2 Lloyd's Rep 36 at 41 per Browne-Wilkinson LJ. 16 (1975) 133 CLR 72 at 80. 17 Northside Developments Pty Ltd v Registrar-General (1990) 170 CLR 146 at 200 per Dawson J, 212 per Gaudron J. 18 (1933) 49 CLR 507 at 547. that other's detriment. Whether a departure by a party from the assumption should be considered unjust and inadmissible depends on the part taken by him in occasioning its adoption by the other party. He may be required to abide by the assumption because it formed the conventional basis upon which the parties entered into contractual or other mutual relations, such as bailment; or because he has exercised against the other party rights which would exist only if the assumption were correct ... or because knowing the mistake the other laboured under, he refrained from correcting him when it was his duty to do so; or because his imprudence, where care was required of him, was a proximate cause of the other party's adopting and acting upon the faith of the assumption; or because he directly made representations upon which the other party founded the assumption." Later, in Tobin v Broadbent19, Dixon J referred to the conduct of a party which "induced or assisted" an assumption from which that party ought not to be permitted to depart. Commercial documents, such as the letters of indemnity in the present case, are commonly relied upon, and intended to be relied upon, by third parties who act upon an assumption of authenticity created or reinforced by their mode of execution, and by the fact and circumstances of their delivery. Within a commercial enterprise, such as a bank, there will normally be internal lines of authority, and procedures, designed to ensure that, when documents issue to third parties, appearances are reliable. Such an enterprise might induce or its assist an assumption, not only by organisational structure, and lines of communication with third parties, but also by a failure to establish appropriate internal procedures designed to protect itself, and people who deal with it in good faith, from unauthorised conduct. the representation conveyed by Issuing a letter of indemnity which bound the bank ("a bank endorsed absent bills of lading indemnity") was a transaction forming part of the ordinary course of business of a bank providing documentary credits in connection with international sale of goods transactions. The letters of indemnity now in question were sought from, and provided by, the employee of the bank whom the bank described as the Manager of its Documentary Credit Department. No question of the competence of the bank under its constituent documents or the competence under those constituent documents of particular organs or office holders of the bank intrudes. Rather, documents evidencing transactions ancillary to and in the ordinary course of the bank's business of providing documentary credits in 19 (1947) 75 CLR 378 at 407. connection with international sale of goods transactions were signed for and on behalf of the bank by the person whom it described as its Manager of the Documentary Credit Department. Pacific's reliance upon the letters of indemnity was based upon their form and contents, the signature of a person who appeared to be (and was) an officer of the bank, the stamp or "chop", and the fact that Pacific was sent copies of the documents, directly or indirectly, by BNP. The stamp was probably more significant to Pacific than the signature, which was indecipherable. It was designed for use on letters of credit, and it allowed the person who was authorised to use it to give an appearance of authenticity to documents to which it was applied. The organisational structure of BNP in Sydney at the time was such that Ms Dhiri was the bank officer to whom Pacific's request, would be, and was, communicated by NEAT. She was the person who dealt with the request, and who communicated BNP's response to Pacific. That response, involving her signature of the letters of indemnity and fixing the bank's stamp to them, would signify to a reasonable third party, and signified to Pacific, agreement to what was requested. The stamp was not BNP's common seal, but placing it on a commercial document which named the bank as a party strongly enhanced the appearance that the document was signed on behalf of BNP. Ms Dhiri was given the stamp without any instructions as to how she should use it. The importance to a third party, such as Pacific, of the difference between a bank's signature to a letter of indemnity in the capacity of an indemnifying party, and a bank's signature by way of verification of the signature of another party, should have been, and was, obvious to Mr Ryan (although he was not personally involved in this transaction), Mr Kavanagh, and Ms Dhiri. They all accepted, in their evidence, the importance that attached to the capacity in which the bank was lending its name to the documents. Ms Dhiri was the natural and appropriate person to whom Pacific's request for signature of the documents by the bank was directed. If the role of the bank was to be merely that of authentication of NEAT's signature, then she was also the appropriate person to sign and stamp the documents on behalf of the bank. If the role of the bank was to be that of an indemnifying party, she was not the appropriate person. There were no procedures within BNP under which she was to seek legal advice about the manner and form of BNP's signature, or take other steps to see that it was communicated to Pacific that the only role the bank was willing to undertake was one of authentication. She was placed in a position to sign and stamp the documents, and send them to NEAT and Pacific, but without any internal check upon their final form and, in particular, without any qualification or limitation of the capacity in which the bank was participating in the transaction. The assumption made by Pacific, found by the trial judge to have been reasonable, upon which Pacific acted to its detriment, was induced and assisted by the conduct of BNP in placing Ms Dhiri in a position which equipped her to deal with the letters of indemnity as requested by Pacific. It would be unjust to permit BNP to depart from the assumption. Conclusion and orders Pacific is entitled to succeed in its claim based on contract. The other causes of action do not require consideration. There were outstanding issues including calculation of damages that were not decided by the Court of Appeal. The appeal should be allowed with costs. The orders of the Court of Appeal should be set aside. The matter should be remitted to the Court of Appeal to deal with any outstanding issues in conformity with the reasoning of this Court. |
HIGH COURT OF AUSTRALIA MINISTER FOR IMMIGRATION AND BORDER PROTECTION APPELLANT AND CED16 & ANOR RESPONDENTS Minister for Immigration and Border Protection v CED16 [2020] HCA 24 Date of Hearing: 9 June 2020 Date of Judgment: 30 June 2020 ORDER Appeal allowed. Set aside order 2 made by the Federal Court of Australia on 25 September 2018 and order 1 made by the Federal Court of Australia on 3 April 2019. In their place, order that the appeal from the judgment of the Federal Circuit Court of Australia given on 14 February 2017 be dismissed. The appellant pay the first respondent's costs of the appeal to this Court. On appeal from the Federal Court of Australia Representation G T Johnson SC with B D Kaplan for the appellant (instructed by HWL Ebsworth Lawyers) J F Gormly with D J McDonald-Norman for the first respondent (instructed by Labour Pains Legal) Submitting appearance for the second respondent Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Minister for Immigration and Border Protection v CED16 Immigration β Refugees β Application for protection visa β Immigration Assessment Authority ("Authority") β Review by Authority under Pt 7AA of Migration Act 1958 (Cth) β Where delegate of Minister for Immigration and Border Protection refused to grant first respondent protection visa β Where decision referred to Authority for review β Where Authority ordinarily obliged to consider "review material" provided by Secretary of Department of Immigration and Border Protection ("Secretary") without considering "new information" β Where review material must include material considered by Secretary to be relevant to review β Where review material included identity assessment form β Where Authority notified that s 473GB applied to identity assessment form β Where notification included certificate purporting to certify that disclosure of information or matter contained in identity assessment form contrary to public interest β Where certificate invalid β Where certificate not before delegate at time of making decision under review β Whether certificate "new information" within meaning of s 473DC(1) β Whether certificate a "document" or contained "information" β Whether Authority could be inferred to have considered that certificate may have been relevant to conduct of review. Words and phrases β "certificate", "document", "documentation or information of an evidentiary nature", "fact, subject or event", "fast track reviewable decision", "identity assessment form", "information", "new information", "notification", "procedural obligation", "protection visa", "relevant", "relevant to the conduct of the review", "review material". Migration Act 1958 (Cth), Pt 7AA. GAGELER, KEANE, NETTLE AND GORDON JJ. The Minister for Immigration and Border Protection appeals by special leave from a judgment of Derrington J in the Federal Court of Australia allowing an appeal from a judgment of Judge Street in the Federal Circuit Court of Australia. The judgment of Judge Street dismissed an application by the first respondent for judicial review of a decision of the Immigration Assessment Authority which affirmed a decision of a delegate of the Minister not to grant the first respondent a protection visa. The appeal from the judgment of Derrington J is to be allowed and the judgment of Judge Street dismissing the application for judicial review is to be restored in the application of principles established in prior decisions of this Court. No novel issue arises. The matter to which the appeal relates has an unfortunate procedural history. The first respondent, who is a citizen of Sri Lanka, arrived in Australia in September 2012 as an "unauthorised maritime arrival" within the meaning of the Migration Act 1958 (Cth). The first respondent lodged an application for a protection visa in September 2015. The delegate of the Minister decided not to grant the visa in May 2016. Being a "fast track reviewable decision" within the meaning of the Act, the decision of the delegate of the Minister was immediately referred for review by the Authority under Pt 7AA of the Act. In compliance with s 473CB(1) of the Act, a delegate of the Secretary of the Department of Immigration and Border Protection soon after the referral gave to the Authority "review material" which was required by s 473CB(1)(c) to include any material in the Secretary's possession or control "considered by the Secretary [at the time of referral] to be relevant to the review". Included within the review material given to the Authority by the delegate of the Secretary was a document described as a "Draft IMAPS Identity Assessment Form" ("the Identity Assessment Form"). Contemporaneously with the referral, in purported compliance with s 473GB(2)(a), notification was given to the Authority that s 473GB applied to the Identity Assessment Form. Included within that notification was a certificate ("the Certificate") stated to be issued by a delegate of the Minister under s 473GB(5) which purported to certify for the purpose of s 473GB(1)(a) that disclosure of information or matter contained in the Identity Assessment Form would be contrary to the public interest "because it is a Departmental working document". The Authority made its decision to affirm the decision of the delegate of the Minister not to grant the first respondent a protection visa in July 2016. The statement of reasons for its decision which the Authority then gave in accordance with s 473EA(1)(b) of the Act contained the statement that the Authority "had regard to the material referred by the Secretary under s 473CB". The statement of NettleJ reasons made no reference to the Identity Assessment Form or to the Certificate and addressed no issue concerning the identity of the first respondent. The first respondent's application to the Federal Circuit Court for judicial review of the decision of the Authority identified a number of grounds of review. The penultimate ground, although not formulated with precision, was broadly to the effect that the decision of the Authority was affected by jurisdictional error for reasons related to the invalidity of the Certificate. At the first return date of the application for judicial review in October 2016, Judge Street fixed the application for hearing on a date in February 2017 and made other timetabling directions. One of those other directions was a direction that the Minister by a date in November 2016 file and serve on the first respondent a "Court Book". The Court Book which the Minister went on to file and serve in accordance with that direction included a copy of the Certificate. The Court Book did not include a copy of the Identity Assessment Form. The index to the Court Book listed the Identity Assessment Form as a document on the departmental file which had been before the Authority but indicated that it was a document which was "not reproduced" in the Court Book. The first respondent, who was then legally represented, did not seek its production. In the result, the Identity Assessment Form was not put in evidence. The hearing of the application for judicial review proceeded before Judge Street on the scheduled date in February 2017. For reasons given orally at the conclusion of the hearing on that date and later published in writing, his Honour dismissed the application1. His Honour rejected the penultimate ground of review without finding it necessary to determine whether the Certificate was invalid. His Honour did so on the basis that "no rational argument" was developed before him as to how the Identity Assessment Form "could have possible relevance to the outcome of the decision of the Authority"2. During the course of the appeal by the first respondent from the judgment of Judge Street to the Federal Court, the Minister adduced further evidence for the purpose of demonstrating that the Identity Assessment Form had been before the delegate of the Minister at the time of making the initial decision not to grant the 1 CED16 v Minister for Immigration and Border Protection [2017] FCCA 233. [2017] FCCA 233 at [51]. NettleJ first respondent a protection visa. But again, the Identity Assessment Form was not put in evidence. Exercising the appellate jurisdiction of the Federal Court alone, as is common in migration appeals, Derrington J heard the appeal in August 2018. In September 2018, his Honour delivered a judgment in which he allowed the appeal but made no consequential orders3. In April 2019, his Honour delivered a further judgment in which he set aside the order of Judge Street dismissing the application for judicial review and ordered the issue of writs of certiorari and mandamus directed to the Authority4. The first respondent had sought leave at the hearing of the appeal to the Federal Court to rely on proposed grounds of appeal formulated in terms differing from the grounds on which he had relied in the application before Judge Street. In his reasons for judgment delivered in September 2018, Derrington J granted the first respondent leave to rely on just one of those proposed grounds of appeal. The ground of appeal on which his Honour then granted leave was formulated in terms that the decision of the Authority "was affected by jurisdictional error because the statutory condition required to enliven the discretionary powers under s 473GB(3)(a) and (b) had not been met". As the ground was particularised by the first respondent, the statutory pre-condition in s 473GB(2)(a) to the enlivening of the powers conferred by s 473GB(3)(a) and (b) had not been met "because the Certificate was invalid, it not having been issued for the purposes of s 473GB(1)". The Minister for his part had conceded at the hearing of the appeal to the Federal Court that the Certificate was invalid. The concession was well made. The reason specified in the Certificate, that the Identity Assessment Form was a "Departmental working document", was plainly an insufficient basis for "a claim by the Crown in right of the Commonwealth in a judicial proceeding" that information or matter contained in the Identity Assessment Form "should not be disclosed". The Certificate therefore failed s 473GB(1)(a), as a consequence of which the whole of s 473GB (including the duty imposed on the Secretary by s 473GB(2)(a) and the powers conferred on the Authority by s 473GB(3)(a) and (b)) simply had no application to the Identity Assessment Form. the description to meet 3 CED16 v Minister for Immigration and Border Protection (2018) 265 FCR 115. 4 CED16 v Minister for Immigration and Border Protection [No 2] [2019] FCA 438. NettleJ To determine the appeal on the sole ground of appeal on which his Honour ultimately granted the first respondent leave to rely, Derrington J was accordingly required to turn his attention to the effect on the decision of the Authority of the non-enlivening of the powers conferred by s 473GB(3)(a) and (b). In his reasons for judgment delivered in September 2018, Derrington J instead adopted a path of reasoning not canvassed in the parties' submissions. The Certificate, his Honour then held, was "new information" within the meaning given by s 473DC(1)5. The Authority, his Honour then found, fell into jurisdictional error by having regard to that "new information" in making its decision without giving, or considering giving, particulars of it to the first respondent in compliance with s 473DE(1)6. The Minister argues in the appeal to this Court that Derrington J was wrong to characterise the Certificate as "new information" within the meaning given by s 473DC(1) for the reason that the Certificate was incapable of satisfying the description of "information" consistently with reasoning of this Court in Plaintiff M174/2016 v Minister for Immigration and Border Protection7 and in Minister for Immigration and Border Protection v SZMTA8. The Minister argues in the alternative that, even if the Certificate contained "new information", Derrington J was wrong to think that s 473DE(1) applied to the Certificate for the reason that the Certificate was incapable of satisfying the condition in s 473DE(1)(a)(ii), that any new information it contained "would be the reason, or a part of the reason" for affirming the delegate's decision, as the language of that condition has been consistently interpreted by this Court in SZBYR v Minister for Immigration and 5 CED16 v Minister for Immigration and Border Protection (2018) 265 FCR 115 at 6 CED16 v Minister for Immigration and Border Protection (2018) 265 FCR 115 at (2018) 264 CLR 217 at 228 [24]. (2019) 264 CLR 421 at 440 [28]. NettleJ Citizenship9, Minister for Immigration and Citizenship v SZLFX10, Plaintiff M174/201611 and SZMTA12. The first respondent concedes in the appeal to this Court that the Certificate was incapable of satisfying the condition in s 473DE(1)(a)(ii) as interpreted in SZBYR, SZLFX, Plaintiff M174/2016 and SZMTA. The first respondent nevertheless contends that Derrington J was correct to hold that the Certificate was "new information" and correct to conclude that receipt of that "new information" caused the Authority to fall into jurisdictional error. Receipt of the "new information" caused the Authority to fall into jurisdictional error, the first respondent contends, not because it led to the Authority failing to comply with s 473DC(1) but because it led to the Authority failing to perform the procedural obligation imposed by s 473DB(1)(a) to review the fast track reviewable decision referred to it "by considering the review material provided to the Authority under section 473CB ... without accepting ... new information". The meaning given to "new information" by s 473DC(1) for the purposes of Pt 7AA is "any documents or information" that satisfy two conditions. The first condition, specified in s 473DC(1)(a), requires that the documents or information not have been before the Minister or delegate at the time of the making of the decision under review. The second condition, specified in s 473DC(1)(b), requires that the Authority consider that the documents or information "may be relevant". Taken at its highest, the argument now put by the first respondent that the Certificate met the definition of "new information" is that: (1) the Certificate was a "document" or contained "information"; (2) the Certificate was not before the delegate of the Minister at the time of the making of the decision not to grant the protection visa; and (3) having received the Certificate at the time of referral, the Authority can be inferred to have considered that the Certificate may have been relevant to the conduct of the review. The argument that the Authority can be inferred to have considered that the Certificate may have been relevant to the conduct of the review is put by the first respondent at two levels. At the more general level, the first respondent argues that (2007) 81 ALJR 1190 at 1195-1196 [17]; 235 ALR 609 at 615. (2009) 238 CLR 507 at 513-514 [20]-[23]. (2018) 264 CLR 217 at 223 [9]. (2019) 264 CLR 421 at 435 [10]. NettleJ the fact that the Certificate was given to the Authority in conjunction with the purported notification under s 473GB(2)(a) justifies the inference that the Authority accepted the Certificate to be valid for the purpose of s 473GB(1)(a) so as to enliven the powers conferred by s 473GB(3)(a) and (b) in relation to information contained in the Identity Assessment Form. At a more specific level, the first respondent argues that the statement in the Authority's reasons that the Authority "had regard to the material referred by the Secretary under s 473CB" justifies the inference that the Authority in fact exercised the power conferred by s 473GB(3)(a) to take information contained in the Identity Assessment Form into account in making its decision to affirm the decision under review. Whilst the more general inference is available to be drawn, the more specific inference is not. Fairly read within the statutory context in which the Authority's reasons were given13, its statement that it "had regard to the material referred by the Secretary under s 473CB" did no more than reflect the Authority's conscious compliance with the primary procedural obligation imposed on it by s 473DB(1) to review the fast track reviewable decision referred to it by considering the review material provided to it under s 473CB. The obligation imposed by s 473DB(1) is no more than "that the Authority examine the review material provided to it by the Secretary in order for the Authority to form and act on its own assessment of the relevance of that material to the review of the referred decision"14. The statement alone provides no foundation for an inference that the Authority treated any specific part of the review material as a basis for making any finding of fact that formed part of the reason for its decision to affirm the decision under review15. Even less does the statement provide a foundation for an inference that the Authority took into account review material covered by any notification or purported notification under s 473GB(2)(a)16. However, that minor difficulty for 13 cf BVD17 v Minister for Immigration and Border Protection (2019) 93 ALJR 1091 at 1100 [38]-[40]; 373 ALR 196 at 205-206. 14 CNY17 v Minister for Immigration and Border Protection (2019) 94 ALJR 140 at 145 [7]; 375 ALR 47 at 50. 15 cf CNY17 v Minister for Immigration and Border Protection (2019) 94 ALJR 140 at 145 [8]; 375 ALR 47 at 50. 16 cf Minister for Immigration and Border Protection v SZMTA (2019) 264 CLR 421 NettleJ the first respondent's attempt to support the overall conclusion of Derrington J can be put to one side. The fundamental difficulty with the notion that the Certificate met the definition of "new information" in s 473DC(1) is essentially that captured in the central argument of the Minister in the appeal to this Court that the Certificate was incapable of satisfying the description of "information". The plurality in Plaintiff M174/201617 explained that "[t]he term 'new information' must be read consistently when used in ss 473DC, 473DD and 473DE as limited to 'information' (which may or may not be recorded in a document), in the ordinary sense of a communication of knowledge about some particular fact, subject or event". Adapting to the scheme of Pt 7AA the subsequent holding in SZMTA18 concerning the same terminology in Pt 7 of the Act, "[t]he term 'information' in the context of [Div 3] cannot sensibly be read as extending beyond knowledge of facts or circumstances relating to material or documentation of an evidentiary nature". Interpreted in accordance with the authority of Plaintiff M174/2016 and SZMTA, the reference to "any documents or information" in the definition of "new information" in s 473DC(1) has no application to a certificate issued or purporting to be issued under s 473GB(5) for the purpose of s 473GB(1)(a), just as the definition has no application to a written notification made or purporting to be made under s 473GB(2)(a). A certificate or notification of that nature is an instrument which, if valid, has statutory consequences under s 473GB(3)(a) and (b). It is not a document which communicates knowledge of facts or circumstances of an evidentiary nature. Consistently with the confinement of s 473DC(1)'s reference to "any documents or information" to documentation or information of an evidentiary nature, the word "relevant" in s 473DC(1)(b) can only sensibly be read as having the same meaning that the word "relevant" has in s 473CB(1)(c). Documentation or information of an evidentiary nature that the Authority considers may be "relevant" is documentation or information of an evidentiary nature that the Authority considers "capable directly or indirectly of rationally affecting assessment of the probability of the existence of some fact about which the (2018) 264 CLR 217 at 228 [24]. (2019) 264 CLR 421 at 440 [28]. NettleJ Authority might be required to make a finding in the conduct of its review of the referred decision"19. The Certificate was therefore not a "document" nor did it contain "information" within the reference to "any documents or information" in the definition of "new information" in s 473DC(1). Moreover, even if the Authority had treated the Certificate as valid to enliven the powers conferred by s 473GB(3)(a) and (b), and even if the Authority had gone on to exercise the power conferred by s 473GB(3)(a) to take the Identity Assessment Form into account in making some finding of fact in the review, the Authority cannot thereby be taken to have considered that the Certificate "may be relevant" within the meaning of s 473DC(1)(b). In contrast to the Certificate, the Identity Assessment Form to which the Certificate related did have the character of documentation of an evidentiary nature. As Derrington J appears correctly to have recognised20, however, the Identity Assessment Form was excluded from the definition of "new information" in s 473DC(1) for the reason that it had been before the delegate of the Minister at the time of making the decision not to grant the protection visa. For completeness, it is to be noted that the first respondent does not seek by notice of contention to uphold the orders made by Derrington J by invoking another aspect of the reasoning in SZMTA21 to argue that the invalid notification purporting to be made under s 473GB(2)(a) "amount[ed], without more, to an unauthorised act in breach of a limitation within the statutory procedures which condition the performance of the overarching duty of the [Authority] to conduct a review" subject to the implied limitation that "the Act is not to be interpreted to deny legal force to a decision made on a review in the conduct of which there has been a breach of that limitation unless that breach is material". The appeal can be, and is to be, allowed without reference to any issue of materiality. The appeal is to be allowed. The substantive orders made by Derrington J are to be set aside. The order of Judge Street dismissing the application for judicial review is to be restored. In accordance with undertakings as to costs given by the 19 CNY17 v Minister for Immigration and Border Protection (2019) 94 ALJR 140 at 145 [6]; 375 ALR 47 at 50. 20 CED16 v Minister for Immigration and Border Protection (2018) 265 FCR 115 at (2019) 264 CLR 421 at 444 [44]. NettleJ Minister as a condition of the grant of special leave, the costs orders made by Derrington J are to be left undisturbed. Edelman EDELMAN J. The Migration Act 1958 (Cth) has been the subject of vast amounts of litigation. It has been amended many times. Sometimes the litigation has concerned amendments in response to judicial interpretations which have, themselves, been the response to amendments. This background, together with the particular context and purpose of some of the legislative provisions, can sometimes give a provision a meaning that might be contrary to the first impression of a reasonable reader whose understanding of the legislation is consistent with the plain language drafting technique of parliamentary counsel22. The essence of this appeal concerns the short, and mundane, issue of the meaning of two words, "new information". I agree with the joint judgment that those words in Pt 7AA describe only a particular class of new information. As the joint judgment explains, the same conclusion was reached in relation to the meaning of "information" in the context of Pt 7 of the Migration Act by Bell, Gageler and Keane JJ in Minister for Immigration and Border Protection v SZMTA23, a decision delivered subsequent to that of Derrington J in the Federal Court of Australia from which this appeal is brought. In the context of Pt 7, as in the context of Pt 7AA, "information" is limited to "facts or circumstances relating to material or documentation of an evidentiary nature"24. That conclusion resolves this appeal. In the Federal Court of Australia, the conclusion of Derrington J that the Immigration Assessment Authority ("the Authority") had made a jurisdictional error was dependent upon the ordinary meaning of the words "new information". The oral submissions of the first respondent in this Court also relied upon the same ordinary meaning of those words. The first respondent accepted that the entirety of his argument that the Authority had contravened s 473DB(1)(a) of the Migration Act depended upon establishing that the Authority had accepted "new information". In light of the context in which "new information" appears in s 473DB(1)(a), I agree with the joint judgment that these words should not be interpreted to mean all information which is new. The words must mean only new information of an evidentiary nature. This restriction upon the ordinary meaning of "new information" in Pt 7AA can be most directly seen in the "definition"25 of 22 Office of Parliamentary Counsel, Plain English Manual (2016). See Dharmananda, "Drafting Statutes and Statutory Interpretation: Express or Assumed Rules?" (2019) 45 Monash University Law Review 401. (2019) 264 CLR 421. 24 Minister for Immigration and Border Protection v SZMTA (2019) 264 CLR 421 at 440 [28]. See also SZBYR v Minister for Immigration and Citizenship (2007) 81 ALJR 1190 at 1196 [18]; 235 ALR 609 at 616. 25 See s 473BB: "new information has the meaning given by subsection 473DC(1)". Edelman "new information" in s 473DC(1), which provides that subject to Pt 7AA the Authority "may, in relation to a fast track decision, get any documents or information (new information) that: (a) were not before the Minister when the Minister made the decision under section 65; and (b) the Authority considers may be relevant". The relevance to which s 473DC(1) refers is relevance to the Authority's decision. The documents or information which comprise "new information" must therefore be documents or information that are capable of being considered by the Authority to be relevant to its decision. That class of documents concerns material or documentation of an evidentiary nature. The certificate issued by the delegate of the Minister purported to be a certification pursuant to s 473GB(5). It relevantly provided: "I notify the Immigration Assessment Authority that section 473GB of the Migration Act 1958 applies to a document or information in the document titled CLD2015/20746095 AAR054 DRAFT IMAPS Identity Assessment Form ... In my view, this document or information should not be disclosed to the referred applicant or the referred applicant's representative because: the disclosure of any matter contained in the document, or the disclosure of the information, would be contrary to the public interest because it is a Departmental working document." The classification of the matter to which the certificate related as a "Departmental working document" was insufficient to meet either of the required criteria for certification in s 473GB(1). If the Identity Assessment Form had not been before the Minister at the time that the Minister made his decision under s 65 it might have contained new information. But since that form was before the Minister this appeal resolves simply to whether the certificate itself is material that could be capable of being relevant to the Authority's decision. The certificate effectively did no more than notify the Authority of the title of the form and the reason asserted for its non- disclosure to the applicant or to the applicant's representative. It was not material that was capable of being considered by the Authority to be relevant to the Authority's decision. The Authority made no specific reference to it. The appeal should be allowed and orders made as proposed in the joint judgment. |
HIGH COURT OF AUSTRALIA APPLICANT AND INDEPENDENT COMMISSION AGAINST CORRUPTION RESPONDENT Duncan v Independent Commission Against Corruption [2015] HCA 32 9 September 2015 ORDER So much of proceeding number 2014/239426 as was pending in the Court of Appeal of the Supreme Court of New South Wales as concerns grounds 1A, 1B and 1D and prayers 1, 2 and 4 of the Further Amended Draft Notice of Appeal dated 14 May 2015 be dismissed. The applicant pay the respondent's costs of the proceedings in this Court. Representation N C Hutley SC with G E S Ng for the applicant (instructed by Yeldham B W Walker SC with G M Watson SC, S J Free and Z C Heger for the respondent (instructed by Crown Solicitor (NSW)) Interveners M G Sexton SC, Solicitor-General for the State of New South Wales with A M Mitchelmore for the Attorney-General for the State of New South Wales, intervening (instructed by Crown Solicitor (NSW)) M G Hinton QC, Solicitor-General for the State of South Australia with A D Doecke for the Attorney-General for the State of South Australia, intervening (instructed by Crown Solicitor (SA)) G R Donaldson SC, Solicitor-General for the State of Western Australia with R Young for the Attorney-General for the State of Western Australia, intervening (instructed by State Solicitor (WA)) P J Dunning SC, Solicitor-General of the State of Queensland with F J Nagorcka for the Attorney-General of the State of Queensland, intervening (instructed by Crown Solicitor (Qld)) R M Niall QC, Solicitor-General for the State of Victoria with G A Hill for the Attorney-General for the State of Victoria, intervening (instructed by Victorian Government Solicitor) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Duncan v Independent Commission Against Corruption Statutes β Interpretation β Amending Acts β Independent Commission Against Corruption Act 1988 (NSW) β Meaning of corrupt conduct β Where High Court decision in Independent Commission Against Corruption v Cunneen [2015] HCA 14 declared meaning of "corrupt conduct" in ICAC Act β Where effect of Cunneen was to make invalid some past acts of respondent β Where Pt 13 of Sched 4 to ICAC Act inserted to validate otherwise invalid acts done by respondent before decision in Cunneen β Whether Pt 13 invalid. Constitutional law β Validity of legislation β Retrospective amendments β Relevance of Kable principle β Relevance of Kirk principle. Words and phrases β "corrupt conduct", "deem", "Kable principle", "legal consequences", "retrospective validity". Independent Commission Against Corruption Act 1988 (NSW), Sched 4, Pt 13, cll 34, 35. FRENCH CJ, KIEFEL, BELL AND KEANE JJ. In proceedings pending in the Court of Appeal of the Supreme Court of New South Wales, the applicant seeks a declaration that certain findings contained in a report entitled "Investigation into the Conduct of Ian Macdonald, Edward Obeid Senior, Moses Obeid and Others" dated July 2013 ("the Report") were made in excess of the jurisdiction of the respondent, the Independent Commission Against Corruption (ICAC). In the Report, the respondent found1 that the applicant had engaged in conduct which adversely affected, or could have adversely affected, the efficacy of the performance of functions by officials of the executive government of the State of New South Wales. The respondent proceeded to conclude that this conduct was "corrupt conduct" within the meaning of s 8(2) of the Independent Commission Against Corruption Act 1988 (NSW) ("the ICAC Act"). The applicant commenced proceedings in the Supreme Court of New South Wales challenging the validity of the findings against him in the Report. His claim was dismissed by the primary judge (McDougall J)2. He then applied for leave to appeal to the Court of Appeal of New South Wales. Before that application could be determined, this Court on 15 April 2015 delivered its judgment in Independent Commission Against Corruption v Cunneen3, holding that "corrupt conduct" within the respondent's investigative jurisdiction under the ICAC Act4 did not encompass conduct which did not compromise the probity of public administration. Given that the Report did not suggest that the applicant's conduct had adversely affected the probity of the exercise of any official function, the applicant then added to the grounds of his claim the contention that the respondent lacked jurisdiction to make findings of corrupt conduct against him. On 6 May 2015, while the application for leave to appeal to the Court of Appeal was still pending, the New South Wales Parliament enacted the Independent Commission Against Corruption Amendment (Validation) Act 2015 (NSW) ("the Validation Act"). The Validation Act added Pt 13 of Sched 4 to the 1 The findings against the applicant are summarised by the primary judge in Duncan v Independent Commission Against Corruption (2014) 311 ALR 750 at 752 [7]. 2 Duncan v Independent Commission Against Corruption (2014) 311 ALR 750 at (2015) 89 ALJR 475 at 486 [50]-[51]; 318 ALR 391 at 403-404; [2015] HCA 14. 4 Section 13(1) of the ICAC Act. Bell ICAC Act ("Pt 13") to ensure the validity of the respondent's activities before 15 April 2015 (including the compilation of the Report), notwithstanding this Court's decision in Cunneen. The applicant thereupon added to his claims in the Court of Appeal a claim for a declaration that Pt 13 is invalid. Further, the applicant sought, in the alternative, a declaration that s 79(1) of the Judiciary Act 1903 (Cth) ("the Judiciary Act") does not validly apply Pt 13 as surrogate federal law in the proceedings. On 25 May 2015, Gageler J ordered the removal into this Court of so much of the proceedings pending in the Court of Appeal as related to the applicant's challenge to the validity of Pt 13. In this Court, it was common ground that, given this Court's decision in Cunneen, the respondent's findings in the Report that the applicant had engaged in corrupt conduct were based upon a misconstruction of s 8(2) of the ICAC Act so that the Report was, at the time of its original publication, affected by jurisdictional error. Part 13 Given the contention advanced by the applicant, it is desirable to set out the full text of the material terms of Pt 13. It will be readily apparent that Pt 13 is concerned to address only one problem. That problem was that, on the interpretation in Cunneen of "corrupt conduct" in s 8(2) of the ICAC Act, the findings of the respondent, in the Report, were beyond power to the extent that they concerned the applicant. Part 13 purports to deal comprehensively with this problem by addressing the validity of the respondent's activities prior to this Court's decision in Cunneen on 15 April 2015. In considering the terms of Pt 13, it is to be borne in mind that it was the applicant's contention that the brief but comprehensive provisions missed the only target at which they were directed. "Part 13 Validation relating to decision on 15 April 2015 in Independent Commission Against Corruption Interpretation In this Part: relevant conduct means conduct that would be corrupt conduct for the purposes of this Act if the reference in section 8(2) to conduct that adversely affects, or could adversely affect, the exercise of Bell official functions included conduct that adversely affects, or could adversely affect, the efficacy (but not the probity) of the exercise of official functions. (2) A reference in this Part to anything done or purporting to have been done by the Commission includes a reference to: anything done or purporting to have been done by an officer of the Commission, and any investigation, examination, inquiry, hearing, finding, referral, recommendation or report conducted or made by the Commission or an officer of the Commission, and Validation (1) Anything done or purporting to have been done by the Commission before 15 April 2015 that would have been validly done if corrupt conduct for the purposes of this Act included relevant conduct is taken to have been, and always to have been, validly done. The validation under subclause (1) extends to the validation of: things done or purporting to have been done by any person or body, and legal proceedings and matters arising in or as a result of those proceedings, if their validity relies on the validity of a thing done or purporting to have been done by the Commission. The validation under subclause (1) extends to the validation of things on and from the date they were done or purported to have been done. The Commission is authorised (and is taken always to have been authorised) to exercise functions under this Act on or after 15 April 2015 to refer matters for investigation or other action to other persons or bodies, or to communicate or provide evidence given to the Commission to other persons or bodies, even if the matter arose Bell or the evidence was given to the Commission before 15 April 2015 and its validity relies on the validation under subclause (1). Subclause (4) applies even if any finding of corrupt conduct that relates to the matter or evidence is declared a nullity or otherwise set aside by a court. The applicant's challenge to Pt 13 Underpinning the applicant's principal challenge to the validity of Pt 13 was the submission that, properly construed, cll 34 and 35 do not deem the conduct of the applicant referred to in the Report to be "corrupt conduct". The applicant submitted that Pt 13 does not validate invalid acts of the respondent; rather, so it was said, it directs courts to treat as valid acts that were, and remain, invalid. It was argued that this case is distinguishable on this basis from others in which this Court upheld the validity of laws which effect the retrospective validity of invalid acts5. It was submitted that, in directing the courts to treat as valid that which Pt 13 has left invalid, Pt 13 contravenes the principle in Kable v Director of Public Prosecutions (NSW)6 by undermining the institutional integrity of the Supreme Court of New South Wales. It was also said that Pt 13 offends the principle stated by this Court in Kirk v Industrial Court (NSW)7 that "[l]egislation which would take from a State Supreme Court power to grant relief on account of jurisdictional error is beyond State legislative power". The operation of Pt 13 The applicant's construction of Pt 13 is distinctly implausible given the purpose of its enactment. It is not sustainable on a fair reading of cll 34 and 35. As a matter of the ordinary use of language, cll 34 and 35 deem to be valid acts done by the respondent before 15 April 2015 to the extent that they would have been valid if corrupt conduct as defined in s 8(2) of the ICAC Act 5 Nelungaloo Pty Ltd v The Commonwealth (1948) 75 CLR 495; Australian Education Union v General Manager of Fair Work Australia (2012) 246 CLR 117; [2012] HCA 19. (1996) 189 CLR 51; [1996] HCA 24. (2010) 239 CLR 531 at 581 [100]; [2010] HCA 1. Bell encompassed conduct which adversely affected the efficacy, but not the probity, of the exercise of official functions. In this way, cll 34 and 35 operate to amend s 8(2) of the ICAC Act in its application to acts done by the respondent prior to 15 April 2015. Parliament thereby changed the meaning of "corrupt conduct", as a matter of substantive law, from the meaning given to that expression in Cunneen in respect of acts occurring before 15 April 2015. It is not to the point that cl 35 does not expressly purport to "amend" s 8(2): it is well settled8 that a statute which effects an alteration of the provisions of an earlier statute amends that earlier statute even though it may not expressly describe itself as "an amending statute". The applicant's argument that Pt 13 does not validate the respondent's invalid findings in the Report, and so cannot require a court to attribute the legal consequences of valid findings to the respondent's invalid findings, involved the elusive suggestion that the invalid findings in the Report had no legal consequences. It might be said that the adverse effect of the Report upon the applicant's reputation would have been one relevant legal consequence of the Report, and indeed a consequence which was relevant to his standing to bring the present proceedings9. However that may be, the applicant's argument strains too hard against the ordinary meaning of cll 34 and 35. In truth, they declare the legal position of the respondent, and of persons affected by things "done or purporting to have been done" by the respondent, prior to 15 April 2015. Clause 35 operates so that the legal position so declared is the same as if the respondent had been authorised by the ICAC Act to investigate and report on conduct that included "relevant conduct" as defined in cl 34; and cl 35 also attaches to the respondent's findings, "as acts in the law, consequences which it declares them to have always had"10. The Report becomes, by virtue of cll 34 and 35, cognisable as a matter of law as a report into "corrupt conduct" made 8 Kariapper v Wijesinha [1968] AC 717 at 741. 9 Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 577-578, 583-585; [1992] HCA 10. See Greiner v Independent Commission Against Corruption (1992) 28 NSWLR 125 at 148. 10 R v Humby; Ex parte Rooney (1973) 129 CLR 231 at 243; [1973] HCA 63; Australian Education Union v General Manager of Fair Work Australia (2012) 246 CLR 117 at 143 [53]. Bell under the ICAC Act11. Even if it were the case that the respondent's activities in investigating the applicant and making findings about the conduct of the applicant and his associates initially had no legal consequences at the time the activities occurred, that circumstance would no longer be fatal to the validity of the Report: it is well settled that it is open to the legislature to select the fact that these activities occurred as the ground for attaching such legal consequences as it may choose12. Because cll 34 and 35 widened the scope of the expression "corrupt conduct", and thereby widened the jurisdiction of the respondent in relation to its investigation, the principal ground of the applicant's challenge to the validity of Pt 13 is not made out. On behalf of the applicant, it was acknowledged that if Pt 13, properly construed, does no more than attribute the consequences of legal validity to things done by the respondent, then his challenge must fail. This concession was rightly made. Some brief reference to earlier decisions of this Court will suffice to explain why that is so. Kable As this Court recently noted in Attorney-General (NT) v Emmerson13, the Kable principle stands for the proposition that, in the case of a State court capable of being invested with the judicial power of the Commonwealth: "State legislation which purports to confer upon such a court a power or function which substantially impairs the court's institutional integrity, and which is therefore incompatible with that court's role as a repository of federal jurisdiction, is constitutionally invalid." (footnote omitted) As was explained in H A Bachrach Pty Ltd v Queensland14, Kable takes as its starting point: 11 See ss 13(1)(a) and (b), 13(3), 13(3A), 13(5), 74, 74A and 75 of the ICAC Act. See also cl 3 of Sched 6A to the Mining Act 1992 (NSW), which was inserted by the Mining Amendment (ICAC Operations Jasper and Acacia) Act 2014 (NSW). 12 Baker v The Queen (2004) 223 CLR 513 at 532 [43]; [2004] HCA 45 citing Re Macks; Ex parte Saint (2000) 204 CLR 158 at 178 [25], 187-188 [59]-[60], 200 [107], 232-233 [208], 280 [347]; [2000] HCA 62. 13 (2014) 88 ALJR 522 at 533 [40]; 307 ALR 174 at 185; [2014] HCA 13. 14 (1998) 195 CLR 547 at 561-562 [14]; [1998] HCA 54. Bell "the principles applicable to courts created by the Parliament under s 71 [of the Constitution] and to the exercise by them of the judicial power of the Commonwealth under Ch III. If the law in question here had been a law of the Commonwealth and it would not have offended those principles, then an occasion for the application of Kable does not arise." Decisions of this Court establish that a law of the Commonwealth to the effect of Pt 13 would not be inconsistent with Ch III of the Constitution. In Nelungaloo Pty Ltd v The Commonwealth15, this Court rejected a challenge to the validity of the Wheat Industry Stabilization Act (No 2) 1946 (Cth) on the ground that it validated an order for the acquisition of wheat the validity of which was in issue in judicial proceedings pending when the statute was enacted. Nelungaloo was concerned with s 11 of the Wheat Industry Stabilization Act (No 2), which purported to deem an executive order made under a regulation "to be, and at all times to have been, fully authorized by that regulation" and to have and have had "full force and effect according to its tenor". In rejecting the contention that s 11 amounted to a usurpation of the judicial power of the Commonwealth in contravention of Ch III of the Constitution, Dixon J said that there could be no objection to the validity of the statute, which was16: "simply a retrospective validation of an administrative act and should be treated in the same way as if it said that the rights and duties [of the parties to the litigation] should be the same as they would be, if the order was valid." In R v Humby; Ex parte Rooney17, this Court was concerned with a challenge to the validity of legislation passed to validate decisions18 under the Matrimonial Causes Act 1959 (Cth) made in excess of jurisdiction. Section 5 of the Matrimonial Causes Act 1971 (Cth) deemed the rights, liabilities and obligations of people affected by certain decrees issued by non-judicial officers of the Supreme Court of South Australia to be the same as if those decrees had been made by the Supreme Court constituted by a single judge. Section 5 was 15 (1947) 75 CLR 495 esp at 503-504; (1948) 75 CLR 495 esp at 579-580. 16 (1948) 75 CLR 495 at 579. 17 (1973) 129 CLR 231. 18 See Kotsis v Kotsis (1970) 122 CLR 69; [1970] HCA 61; Knight v Knight (1971) 122 CLR 114; [1971] HCA 21. Bell held not to involve an interference with the judicial process contrary to Ch III of the Constitution. Mason J said19: "Chapter III contains no prohibition, express or implied, that rights in issue in legal proceedings shall not be the subject of legislative declaration or action." This observation by Mason J was adopted by Gummow, Hayne and Bell JJ in Australian Education Union v General Manager of Fair Work Australia20, with whom French CJ, Crennan and Kiefel JJ agreed in this respect21. In AEU, this Court considered the validity of s 26A of the Fair Work (Registered Organisations) Act 2009 (Cth), which provided that, where the registration of an association under the Workplace Relations Act 1996 (Cth) prior to the commencement of s 26A was invalid only because that organisation's rules did not provide for the termination of membership or preclusion from membership of particular persons, that registration would be taken to be valid and to have always been valid. All members of this Court rejected the contention that s 26A was an impermissible interference with judicial power. French CJ, Crennan and Kiefel JJ said22: "If a court exercising federal jurisdiction makes a decision which involves the formulation of a common law principle or the construction of a statute, the Parliament of the Commonwealth can, if the subject matter be within its constitutional competence, pass an enactment which changes the law as declared by the court. Moreover, such an enactment may be expressed so as to make a change in the law with deemed operation from a date prior to the date of its enactment. Section 26A was such a law." 19 (1973) 129 CLR 231 at 250. 20 (2012) 246 CLR 117 at 150 [78]. 21 (2012) 246 CLR 117 at 141 [49]-[50]. 22 (2012) 246 CLR 117 at 141-142 [50]. Bell To similar effect, Gummow, Hayne and Bell JJ referred23 with approval to the following passage in Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs24: "It is one thing for the Parliament, within the limits of the legislative power conferred upon it by the Constitution, to grant or withhold jurisdiction. It is a quite different thing for the Parliament to purport to direct the courts as to the manner and outcome of the exercise of their jurisdiction. The former falls within the legislative power which the Constitution, including Ch III itself, entrusts to the Parliament. The latter constitutes an impermissible intrusion into the judicial power which Ch III vests exclusively in the courts which it designates." (emphasis added) The retrospective conferral upon the respondent by cl 35 of the jurisdiction which was held lacking in Cunneen is a grant of jurisdiction within the first category of cases identified in that passage. No relevant distinction is discernible between s 26A of the Act considered in AEU and cll 34 and 35: both sets of provisions attach new legal consequences and a new legal status to things done which otherwise would not have had such legal consequences or status. It is now well settled that a statute which alters substantive rights does not involve an interference with judicial power contrary to Ch III of the Constitution even if those rights are in issue in pending litigation. This Court's decision in Bachrach affords an example of a case involving a piece of State legislation which was said to contravene the Kable principle. That case was concerned with a section of the Local Government (Morayfield Shopping Centre Zoning) Act 1996 (Q) that provided that the purposes for which certain land could be used without the consent of the local council were "taken to include" a particular proposed shopping centre development. This Court held that the impugned legislation did not constitute an impermissible interference with judicial power, notwithstanding that it was directed at the specific parcel of land which was the subject of pending proceedings in court25. It is also to be noted that cl 35 does not purport to confer any power or function upon a court. Importantly, it does not purport to give a direction to a court to treat as valid that which the legislature has left invalid. The present case 23 (2012) 246 CLR 117 at 150 [78]. 24 (1992) 176 CLR 1 at 36-37; [1992] HCA 64. 25 (1998) 195 CLR 547 at 560 [8]-[9], 563-564 [18]-[22]. Bell is, therefore, readily distinguishable from this Court's decision in International Finance Trust Co Ltd v New South Wales Crime Commission26, on which the applicant relied. In International Finance, this Court held that s 10 of the Criminal Assets Recovery Act 1990 (NSW), which required the court to hear applications for restraining orders in respect of specific interests in property on an ex parte basis, was an impermissible direction to the judicature27. In contrast, Pt 13 is a retrospective alteration of the substantive law which is to be applied by the courts in accordance with their ordinary processes. While s 10 of the Criminal Assets Recovery Act required the court to hear certain applications on an ex parte basis, Pt 13 does not affect the processes applied by the Supreme Court; indeed it neither confers a function on the Supreme Court nor deprives it of one. Kirk This Court's decision in Kirk was concerned with legislative intrusion upon the supervisory jurisdiction of the Supreme Courts of the States over administrative agencies and inferior courts28; but it did not deny the competence of State legislatures to alter the substantive law to be applied by those agencies and courts. As has been explained, Pt 13, properly understood, effects an alteration in the substantive law as to what constitutes corrupt conduct; it does not withdraw any jurisdiction from the Supreme Court. The Court of Appeal remains seized of the proceedings pending before it. Accordingly, Pt 13 does not contravene the Kirk principle. Federal jurisdiction The applicant advanced an alternative contention to the effect that Pt 13 is incompatible with Ch III of the Constitution and therefore cannot apply in the proceedings in the Court of Appeal, which had engaged that Court's federal jurisdiction. It was said that federal jurisdiction was engaged because the proceedings in the Court of Appeal involved a question arising under s 184(1) of the Corporations Act 2001 (Cth). Accordingly, so said the applicant, Pt 13 could only apply to the proceedings via s 79(1) of the Judiciary Act, thereby directly engaging Ch III of the Constitution. 26 (2009) 240 CLR 319; [2009] HCA 49. 27 (2009) 240 CLR 319 at 354-355 [55]. 28 (2010) 239 CLR 531 at 581 [99]-[100]. Bell Insofar as the applicant's alternative claim is based on the contention that the proceedings pending in the Court of Appeal have engaged federal jurisdiction, it must fail. As the earlier decisions of this Court in Nelungaloo, Humby and AEU show, even if Pt 13 were a law of the Commonwealth it would not be inconsistent with Ch III of the Constitution. Part 13 does not operate as an impermissible direction to the judicature: it is not concerned with the functions or jurisdiction of courts; it does not refer to court proceedings either specifically or generally; and it does not direct the courts as to the giving of relief. It is not necessary, therefore, to have regard to the applicant's submissions about the interaction between s 79 of the Judiciary Act and Pt 13. Conclusion The applicant's challenge to the validity of Pt 13 fails. So much of proceeding number 2014/239426 as was pending in the Court of Appeal of the Supreme Court of New South Wales as concerns grounds 1A, 1B and 1D and prayers 1, 2 and 4 of the Further Amended Draft Notice of Appeal should be dismissed. The applicant must pay the costs of the proceedings in this Court. GAGELER J. "It is, of course", as Dixon J pointed out in R v Hickman; Ex parte Fox and Clinton29, "quite impossible" for the Commonwealth Parliament "to impose limits upon the quasi-judicial authority of a body which it sets up with the intention that any excess of that authority means invalidity, and yet, at the same time, to deprive this Court of authority to restrain the invalid action of the β¦ body by prohibition." It is equally impossible for a State Parliament to impose limits upon the administrative or judicial authority of a body which it sets up with the intention that any excess of that authority means invalidity, and yet, at the same time, to deprive the Supreme Court of that State of authority to declare and enforce the limits it has set. That is the consequence of the holding in Kirk v Industrial Court (NSW)30 that "[l]egislation which would take from a State Supreme Court power to grant relief on account of jurisdictional error is beyond State legislative power". The constitutional argument of the applicant in this case is that, in enacting the Validation Act to insert Pt 13 into Sched 4 of the ICAC Act, the Parliament of New South Wales attempted the impossible. Instead of retrospectively expanding the administrative authority of ICAC with the intention of saving from invalidity a category of things done by ICAC in the past that were revealed by in Independent Commission Against Corruption v Cunneen31 to have been done in excess of the authority which had been granted to ICAC β something which the Parliament undoubtedly has power to do β the Parliament chose to leave the previous jurisdictional limits of ICAC unaltered and to attempt to prevent the Supreme Court from declaring and enforcing those limits. the majority decision The constitutional argument teeters on a narrow proposition of statutory construction. The proposition is that cl 35 operates to attach new legal consequences to an invalid act of ICAC while accepting that the act remains invalid. The difficulty for the applicant is that that is not what cl 35 says. And, as his counsel frankly conceded, if that is not what it says, the applicant loses. Part 13 engages two relevant principles of statutory construction. One is a statutory principle which has a common law analogue32. It is that, in the 29 (1945) 70 CLR 598 at 616; [1945] HCA 53. 30 (2010) 239 CLR 531 at 581 [100]; [2010] HCA 1. 31 (2015) 89 ALJR 475; 318 ALR 391; [2015] HCA 14. 32 CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408; [1997] HCA 2. interpretation of a statutory provision, "a construction that would promote the purpose or object underlying the [statute] ... shall be preferred to a construction that would not promote that purpose or object"33. The other is a common law principle which has a statutory analogue34. It is that "[i]f the choice is between reading a statutory provision in a way that will invalidate it and reading it in a way that will not, a court must always choose the latter course when it is reasonably open"35. Those principles of statutory construction confirm what emerges in any event from a plain reading of the statutory text. In referring to "[a]nything done or purporting to have been done by the Commission before 15 April 2015 that would have been validly done if corrupt conduct for the purposes of this Act included relevant conduct", cl 35(1) refers to nothing more than historical acts of ICAC. The historical acts of ICAC so identified are limited to acts which would have been in excess of the power conferred on ICAC for the reason stated by the majority decision in Cunneen were it not for the enactment of the Validation Act. In going on to provide that those historical acts of ICAC are "taken to have been, and always to have been, validly done", cl 35(1) does no more than to provide that the authority conferred on ICAC extends by force of cl 35(1) itself to include authority to have done those historical acts. An historical act of ICAC which would have been in excess of the power conferred on ICAC for the reason stated by the majority decision in Cunneen were it not for the enactment of the Validation Act is brought within the power conferred on ICAC through the operation of cl 35(1) itself. That which was "invalid" (in excess of the authority granted to ICAC by the Parliament) is thereby made "valid" (within the authority granted to ICAC by the Parliament). Sub-clauses (2) and (3) of cl 35 respectively spell out the consequential and retrospective effects of that "validation". There is no novelty in the proposition that "in general, a legislature can select whatever factum it wishes as the 'trigger' of a particular legislative consequence"36. There is even less novelty in the legislative selection of the historical fact of a previously unauthorised administrative act as the trigger for 33 Section 33 of the Interpretation Act 1987 (NSW). 34 Section 31(1) of the Interpretation Act 1987 (NSW). 35 Residual Assco Group Ltd v Spalvins (2000) 202 CLR 629 at 644 [28]; [2000] HCA 33. 36 Baker v The Queen (2004) 223 CLR 513 at 532 [43]; [2004] HCA 45, citing Re Macks; Ex parte Saint (2000) 204 CLR 158 at 178 [25], 187-188 [59]-[60], 200 [107], 232-233 [208], 280 [347]; [2000] HCA 62. the retrospective conferral of legislative authority on the administrator concerned to have done that act37: a legal consequence fairly described as validation38. That is all that has happened here. For these reasons, I agree with the orders proposed by French CJ, Kiefel, 37 Eg Nelungaloo Pty Ltd v The Commonwealth (1948) 75 CLR 495 at 579. 38 Australian Education Union v General Manager of Fair Work Australia (2012) 246 CLR 117 at 126 [5]; [2012] HCA 19. NettleJ NETTLE AND GORDON JJ. We have had the considerable advantage of reading in draft the reasons of French CJ, Kiefel, Bell and Keane JJ. We agree with the reasons advanced by their Honours for concluding that Pt 13 (cll 34 and 35) of Sched 4 to the Independent Commission Against Corruption Act 1988 (NSW) ("the ICAC Act") deems to be valid acts done by the respondent before 15 April 2015 to the extent that they would have been valid if corrupt conduct as defined in s 8(2) of the ICAC Act encompassed conduct which adversely affected the efficacy, but not the probity, of the exercise of official functions. We would prefer to put it upon the basis that in their legal operation cll 34 and 35 do not amend s 8(2) of the ICAC Act in its application to acts done by the respondent prior to 15 April 2015. Clauses 34 and 35 do operate to effect a change in the law. They create a new or different legal regime in which, for a prescribed period of time, the concept of corrupt conduct (as defined in s 8(2) of the ICAC Act) is taken to be expanded to encompass conduct which adversely affected, or could adversely affect, the efficacy, but not the probity, of the exercise of official functions. Clauses 34 and 35 then validate acts done during that time according to the new or different legal regime. We agree with the orders proposed in the judgment of French CJ, Kiefel, |
HIGH COURT OF AUSTRALIA JAYANT MUKUNDRAY PATEL APPELLANT/APPLICANT AND THE QUEEN RESPONDENT Patel v The Queen [2012] HCA 29 24 August 2012 B11/2012 & B25/2011 ORDER In matter B11/2012: Appeal dismissed. In matter B25/2011: Special leave to appeal granted. Appeal treated as instituted and heard instanter, and allowed. Set aside the order of the Court of Appeal of the Supreme Court of Queensland made on 21 April 2011 and, in its place, order that: the appellant's appeal to that Court be allowed; the appellant's convictions for the manslaughter of Mervyn John Morris, James Edward Phillips and Gerardus Wilhelmus Gosewinus Kemps and for unlawfully doing grievous bodily harm to Ian Rodney Vowles be quashed; and a new trial be had. On appeal from the Supreme Court of Queensland Representation L F Kelly SC with D M Turner and P F Mylne for the appellant/applicant (instructed by Raniga Lawyers) W Sofronoff QC, Solicitor-General of the State of Queensland and P J Davis SC with D L Meredith and J R Jones for the respondent (instructed by Director of Public Prosecutions (Qld)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Patel v The Queen Criminal law β Manslaughter by criminal negligence β Appellant convicted of manslaughter and unlawfully doing grievous bodily harm β Section 288 of Criminal Code (Q) imposes duty on persons who undertake to administer surgical treatment to have reasonable skill and use reasonable care β Prosecution alleged appellant breached his duty by deciding to operate on certain patients β Whether "surgical treatment" in s 288 encompasses decision to operate. Criminal law β Miscarriage of justice β Change in prosecution case at late point in trial β Prejudicial evidence admitted β Whether test of criminal negligence is objective β Whether evidence remained relevant on revised case β Significance of tactical decisions by defence counsel. Criminal law β Appeal β Application of "proviso" β Irrelevant and prejudicial evidence admitted β Whether no substantial miscarriage of justice actually occurred β Consideration of Wilde v The Queen (1988) 164 CLR 365 and concept of fundamental error. Words and phrases β "fundamental error", "miscarriage of justice", "moral culpability", "no substantial miscarriage of justice has actually occurred", "proviso", "surgical treatment". Criminal Code (Q), ss 282, 288-289, 303, 320, 668E(1)-(1A). FRENCH CJ, HAYNE, KIEFEL AND BELL JJ. On 29 June 2010 Jayant Mukundray Patel ("the appellant") was convicted by a jury of three counts of manslaughter1 and one count of unlawfully doing grievous bodily harm2, after a trial in the Supreme Court of Queensland which lasted 58 days. The appellant was at the relevant times employed as a surgeon at Bundaberg Base Hospital. The charges of manslaughter arose out of surgery conducted by the appellant upon Mervyn John Morris, James Edward Phillips and Gerardus Wilhelmus Gosewinus Kemps and that of grievous bodily harm related to surgery that the appellant conducted upon Ian Rodney Vowles. Allegations concerning the appellant's competence as a surgeon had been a subject of discussion at inquiries into the public hospital system in Queensland3 and the subject of much discussion in the media. It was against this background that the prosecution opened its case before the jury. The general tenor of the case was that the appellant was generally incompetent and grossly negligent in: recommending the surgical procedures; the manner in which he carried out each of them; and the post-operative treatment which he supervised. Particulars of the prosecution case concerning the charge arising out of the surgical procedure performed on Mr Morris, which were provided some days into the trial, confirmed that the case ranged over the whole of the appellant's conduct as a surgeon. Particulars of the prosecution case on the other charges were not provided immediately. The defence applied, unsuccessfully, to have the jury discharged without giving a verdict4, in part because of the absence of those particulars. 1 Criminal Code (Q), s 303. References to provisions of the Criminal Code in these reasons are to the provisions as they stood at the relevant times. 2 Criminal Code, s 320. 3 See Commissions of Inquiry Order (No 1) 2005 (Q), published in Queensland Government Gazette, E84, 26 April 2005 (inquiry not completed); Commissions of Inquiry Order (No 2) 2005 (Q), published in Queensland Government Gazette, E5, 6 September 2005 as amended by Commissions of Inquiry Amendment Order in Queensland Government Gazette, E22, 23 September 2005 (report published as Davies, Queensland Public Hospitals Commission of Inquiry: Report, (2005)); Forster, Queensland Health Systems Review: Final Report, (2005). (Q), published Jury Act 1995 (Q), s 60. Hayne Bell On day 43 of the trial the prosecution provided a set of revised particulars in each case, which had the effect of narrowing the case against the appellant. With the principal exception of the procedure concerning Mr Kemps, allegations that the appellant was criminally negligent in the conduct of surgery were no longer maintained, nor was it alleged that the deaths or grievous bodily harm were caused by negligent post-operative care. The prosecution case was now focused upon whether the surgical procedure in each case should have been undertaken. Following receipt of the revised particulars, the defence sought on day 44 of the trial, again unsuccessfully, to have the jury discharged on the basis that a great deal of prejudicial, and now largely irrelevant, evidence had been admitted. The appellant's appeal against conviction was dismissed5, the Court of Appeal of the Supreme Court of Queensland holding that, in all but one respect, the evidence remained relevant. The appellant has been granted special leave to appeal on the ground that he has been convicted on a wrong basis. It was part of the prosecution case that the standard of care provided by the appellant in connection with the surgical procedures was so low as to breach the duty imposed by s 288 of the Criminal Code (Q) upon a person who undertakes to administer surgical treatment. It is the appellant's contention that s 288 applies to the conduct of surgery but not to the anterior decision to operate, which decision was the essence of the prosecution case following the filing of its revised particulars. Alternatively it is submitted that the section is ambiguous and ought not to be construed so as to extend its operation. A further ground in respect of which the appellant seeks special leave to appeal has been referred to a Full Court of this Court. It is that there was a miscarriage of justice in the conduct of his trial. The appellant contends that the trial judge (Byrne SJA) wrongly permitted the trial to proceed on the basis of the original particulars, when they provided so many alternatives as to be incoherent and therefore to prejudice the defence. The appellant submits that the trial judge was wrong to refuse to discharge the jury on day 44 because evidence that was highly prejudicial and now largely irrelevant had been admitted and it was not possible to ameliorate its effects on the jury by directions. Alternatively, this Court can now determine that there has been a miscarriage of justice for those reasons. 5 R v Patel; ex parte A-G (Qld) [2011] QCA 81. Hayne Bell The respondent seeks to uphold the decision of the Court of Appeal that almost all of the evidence in question remained relevant and submits that special leave should be refused because no objection was made to much of the evidence in question. By Notice of Contention the respondent contends that if there was a wrong decision on a question of law, by virtue of either the prosecution's reliance on s 288 or the wrongful admission of evidence, the proviso in s 668E(1A) of the Criminal Code6 should be applied to maintain the convictions because there has been no substantial miscarriage of justice. It is submitted by the respondent that the evidence properly admitted proves to the requisite standard that the appellant was guilty of each of the charges. For the reasons which follow, the appellant's argument respecting s 288 should be rejected. There should be a grant of special leave with respect to the ground that there was a miscarriage of justice. The reformulation of the prosecution case rendered irrelevant the evidence it had led to demonstrate that the appellant had done things in the operating theatre and in the post-operative care of the patients that were careless to the point of being criminally negligent. The prosecution case as eventually put to the jury was that no competent surgeon would have recommended to the patients the procedures which the appellant undertook and that to do so was so large a departure from the norm as to be criminally negligent. A feature of the prosecution case was that the appellant should have appreciated that he lacked skill as a surgeon. As will be explained in these reasons, it was irrelevant whether, as the prosecution alleged, the appellant ought to have known of his shortcomings as a surgeon. The prosecution case as ultimately formulated turned on what the appellant was shown to have known about each patient's state of health: in particular, what he knew about the patient having the disease to which the surgery was directed and what he knew about the patient's state of health. What he knew, or ought to have known, about his own skill was not to the point. Consideration of the appellant's allegation of miscarriage of justice and the respondent's response to it will require that consideration be given to the course of the trial and the conduct of the prosecution and defence cases. 6 Set out at [120] below. Hayne Bell Section 288 Under the Criminal Code, a person who causes the death of another is deemed to have killed that other person (s 293). A person who unlawfully kills another in circumstances which do not constitute murder is guilty of manslaughter (s 303). A person who kills another does so unlawfully unless the killing is authorised, justified or excused by law (s 291). In the present case, for convictions on the counts of manslaughter to be returned it was necessary for the prosecution to prove that the appellant caused the death of the three patients, thereby killing them (s 293). For a conviction on the count of grievous bodily harm, it was necessary to prove that the appellant had done grievous bodily harm to another and that the doing of it was unlawful (s 320). Section 282 is an exculpatory provision which may apply in the case of a surgical procedure. At the relevant time, it provided: "A person is not criminally responsible for performing in good faith and with reasonable care and skill a surgical operation upon any person for the patient's benefit, or upon an unborn child for the preservation of the mother's life, if the performance of the operation is reasonable, having regard to the patient's state at the time and to all circumstances of the case." Section 288 appears in Ch 27 of the Criminal Code, which is entitled "DUTIES RELATING TO THE PRESERVATION OF HUMAN LIFE". The section provides: "It is the duty of every person who, except in a case of necessity, undertakes to administer surgical or medical treatment to any other person, or to do any other lawful act which is or may be dangerous to human life or health, to have reasonable skill and to use reasonable care in doing such act, and the person is held to have caused any consequences which result to the life or health of any person by reason of any omission to observe or perform that duty." Section 288 is not expressed in terms of criminal responsibility7, but in terms of duty and causation. In R v Stott and Van Embden8, McPherson JA observed that the provisions of Ch 27 were probably originally designed to cater 7 Which is defined by s 1 to mean liability to punishment as for an offence. [2002] 2 Qd R 313 at 319 [16]. Hayne Bell for questions of causation arising out of cases of "'pure' omission or failure to act." Generally speaking, the law does not render a person liable for the consequences of such an omission where there is no obligation to act9. However, provisions of the Chapter came to be recognised as operating in relation to criminally negligent acts which might found a conviction for manslaughter. The decision in Callaghan v The Queen10 explains how a provision like s 288 operates. That decision was concerned with a provision11 equivalent to s 289 of the Criminal Code12, which also appears in Ch 27. Section 289 imposes a duty on persons in charge of dangerous things to use reasonable care and take reasonable precautions to avoid danger to life, safety and health. It operates in a way similar to s 288. In Callaghan v The Queen13 it was observed that a defence which was of similar effect to s 23(1) of the Criminal Code14 was not available under the 9 Director of Public Prosecutions (Cth) v Poniatowska (2011) 244 CLR 408 at 421 [29]; [2011] HCA 43. 10 (1952) 87 CLR 115; [1952] HCA 55. 11 Criminal Code 1913-1945 (WA), s 266. 12 "It is the duty of every person who has in the person's charge or under the person's control anything, whether living or inanimate, and whether moving or stationary, of such a nature that, in the absence of care or precaution in its use or management, the life, safety, or health, of any person may be endangered, to use reasonable care and take reasonable precautions to avoid such danger, and the person is held to have caused any consequences which result to the life or health of any person by reason of any omission to perform that duty." 13 (1952) 87 CLR 115 at 119. 14 Section 23(1) of the Criminal Code provides: "Subject to the express provisions of this Code relating to negligent acts and omissions, a person is not criminally responsible forβ an act or omission that occurs independently of the exercise of the person's will; or an event that occurs by accident." Hayne Bell equivalent of s 289, because the defence was expressed to be subject to provisions relating to negligent acts and omissions and the equivalent of s 289 was such a provision. Therefore, an event causing death which occurs independently of a person's will, or by accident, provides no excuse for the purposes of s 289. For that reason, and because s 289 holds a person omitting to perform the duty imposed to have caused any consequences which result to the life or health of another, breach of the duty of care becomes a constituent of the offence of manslaughter. The same may be said of the offence of grievous bodily harm. The duty under s 288 is "to have reasonable skill and to use reasonable care", but the degree of negligence necessary to constitute a breach of duty is not that of the civil law of negligence. Callaghan v The Queen holds15 that, because the provision appeared in a Code dealing with major crimes involving grave moral guilt, the standard to which a provision such as s 289 must be taken to refer is that set by the common law in cases where negligence amounts to manslaughter. The same standard applies to s 288. Criminal responsibility therefore attaches only if there has been "criminal" or "gross" negligence. In Bateman16, Hewart LCJ said that whatever epithet be used, the standard of conduct must go beyond that relevant to a matter of compensation; it must be such as to show such disregard for the life and safety of others as to amount to a crime and to be conduct deserving punishment. In Nydam v The Queen17, the requisite standard was said to involve "such a great falling short of the standard of care which a reasonable man would have exercised and which involved such a high risk that death or grievous bodily harm would follow that the doing of the act merited criminal punishment." The respondent submits that the prosecution case need not have depended upon a breach of the duty imposed by s 288 for a conviction of manslaughter or grievous bodily harm to be returned and that there is authority18 for the view that, as an alternative to a case alleging criminal negligence, the prosecution could have simply alleged that the appellant directly or indirectly caused the deaths, 15 (1952) 87 CLR 115 at 121, 124. 16 (1925) 19 Cr App R 8 at 11-12. 17 [1977] VR 430 at 445. 18 Referring to Griffiths v The Queen (1994) 69 ALJR 77 at 79; 125 ALR 545 at 547; [1994] HCA 55. Hayne Bell relying upon ss 293 and 303 (or s 320 for grievous bodily harm). If that alternative path to a conviction had been taken, s 23(1) would have applied, as would s 282. Thus, in addition to proof of causation, the prosecution would have had to show that the deaths or grievous bodily harm were a foreseeable consequence of the surgical acts19 and that s 282 did not operate to exculpate the appellant. The respondent appears to be prepared to concede, consistent with the aforementioned interpretation of s 288, that the standard it would have to address to negative a defence under s 282 is the criminal standard of negligence20. The prosecution case was conducted by reference to s 288. As will be seen from the discussion concerning the conduct of the trial, it sought at a late point in the trial to run an alternative case, avoiding s 288, but the trial judge did not permit the prosecution to change its course. On that application the appellant argued to the contrary of its present position and submitted that s 288 did apply to the prosecution case. The respondent's present contention is that, regardless of which path to conviction was taken, the questions which the prosecution had to address at the trial were essentially the same and therefore no miscarriage of justice has occurred if s 288 does not apply. That would not affect, and would leave for determination, the larger case that there was a miscarriage of justice by reason of the likely effects upon the jury of irrelevant and prejudicial evidence having been admitted. It is not necessary to determine the correctness of the respondent's contention. As will shortly be explained, s 288 applied to the prosecution case. Properly construed, s 288 does impose a duty with respect to the formation of a judgment that surgery be undertaken. The appellant submits that s 288 deals with the actual performance of surgery or the provision of medical treatment, but that it does not, in terms, refer to a decision or recommendation to operate. The appellant's argument relies upon the text of s 288 and in particular the words "or to do any other lawful act" and "in doing such act". The physical sense of the word "act" does not, in the appellant's submission, accommodate any anterior decision to operate. The appellant seeks further support from the terms of s 282, which he submits, by contrast, do extend to such a decision. The appellant's submission in this respect is that the words in s 282 "having regard to the patient's state at the 19 Referring to, inter alia, Kaporonovski v The Queen (1973) 133 CLR 209; [1973] HCA 35. 20 As to which see Callaghan v The Queen (1952) 87 CLR 115 at 119-121. Hayne Bell time and to all circumstances of the case" encompass a decision to operate. Whether or not that is so, s 288 should first be considered in its own terms. It may be accepted that the word "act" in the phrase "doing such act" refers back to "surgical or medical treatment β¦ or β¦ any other lawful act". The act to which it refers is not, however, restricted to the act of surgery. It refers to surgical treatment, which may readily be understood to encompass all that is provided in the course of such treatment, from the giving of an opinion relating to surgery to the aftermath of surgery. It would be a strange result if the section was taken as intending to impose a duty with respect to the conduct of surgery and its aftermath, but not to require the exercise of skill and care in the judgment which led to it. Further support for a construction which gives full meaning to the term "surgical β¦ treatment" and imposes a wider duty is provided by recognising the point at which the duty is imposed by the section. It arises when the person "undertakes" to administer surgical or medical treatment, which undertaking is given prior to the conduct of surgery and may commonly involve the formation of a judgment about whether surgery should be recommended. Surgical treatment refers to all that is involved, from a recommendation that surgery should be performed, to its performance and the post-operative care which is necessary to be given or supervised by the person who conducted the surgery. The duty imposed by s 288 may be breached by a discrete act of gross negligence in carrying out the surgical procedure or if gross negligence attends the making of judgments about a patient's condition and the risks to the patient of the surgical procedure. It is of course obvious that there can be no criminal responsibility for a death or grievous bodily harm without the physical act of surgery. However, recognition of the causative significance of the act of surgery does not prevent the duty from arising at an earlier point. Section 288 is apt to refer to the matters necessary to be considered before surgery is performed. There can be no criminal responsibility for manslaughter or grievous bodily harm merely by the formation of an opinion or the giving of a recommendation. But once the surgery is performed, the person performing it may be guilty of those offences if his or her assessment of the need for it, or of the risks to the patient which would attend it, is criminally negligent and death or grievous bodily harm results. Background Mr Morris was aged 75 years at the time the appellant undertook the removal of his sigmoid colon (a sigmoid colectomy) and the attachment of a Hayne Bell colostomy bag. The appellant determined that the bleeding per rectum from which this patient suffered was caused by diverticulosis. Mr Morris died on 14 June 2003 from the effects of the sequelae of the operation. Mr Phillips was aged only 46 years, but was in poor health at the time of his surgery. He was in the final stages of renal failure, an earlier kidney transplant having failed. He required haemodialysis to survive. He had previously suffered a heart attack. Prior to surgery he had been found to have dangerously high levels of potassium in his system, the most likely cause of which was inadequate dialysis because of poor vascular access. Tests conducted on Mr Phillips showed that he suffered cancer of the oesophagus which was invasive and terminal. The appellant removed Mr Phillips' oesophagus (by way of an oesophagectomy) on 19 May 2003. Mr Phillips died two days later after an acute cardiac event brought about by high potassium levels. Mr Kemps was 77 years of age when he underwent an oesophagectomy following a diagnosis of cancer in the oesophagus. He suffered from heart disease and impaired kidney function, amongst other conditions. He had recently suffered post-operative complications following another surgical procedure which necessitated his transfer from the hospital in Bundaberg to an intensive care unit in Brisbane. Mr Kemps died on 21 December 2004, the day following the oesophagectomy. The cause of death was uncontrolled bleeding from an unidentified source. Mr Vowles, the subject of the charge of grievous bodily harm, had part of his large bowel removed in 1999 and again in 2003, when cancers were detected in his colon. The appellant recommended removal of the large bowel (by a proctocolectomy with ileostomy), and undertook this operation on 4 October 2004. The appellant did so on the basis of his interpretation of test results as showing pre-malignant changes which were signs of cancer and taking into account Mr Vowles' history and the likelihood of familial colon cancer. In fact Mr Vowles did not have cancer of the colon. The conduct of the trial The prosecution case as opened with respect to Mr Morris' surgical procedure provides the clearest example of the width of the case. It was said that the jury would be invited to conclude from the evidence "that Mr Morris died from either of or a combination of the surgery performed by the accused and the post surgical care supervised by the accused." The appellant was described as the "wrong doctor" to perform the operation. The "wrong preparation" was done, in that insufficient care was taken to correctly diagnose his condition. Bundaberg Base Hospital was the "wrong hospital" in which to carry out surgery of this Hayne Bell kind. Mr Morris should have been treated more conservatively and he received the wrong post-operative care. At the conclusion of the first day of the trial Byrne SJA discussed the possible provision of particulars by the prosecution. The topic had been raised by his Honour at a directions hearing two days before the commencement of the trial. The concern expressed by his Honour at the conclusion of the first day of the trial was that the case as opened thus far contained many complaints about the appellant's conduct β before, during and after surgery β and that it was as yet unclear whether each of them in isolation or in combination might be said by the prosecution to be causally related to the deaths of the three patients. Clearly causation loomed as a potentially difficult issue because of the way in which the prosecution case was to be presented. The trial proceeded for some days without particulars having been supplied. On the fifth day of the trial his Honour observed that, whilst the particulars might have an important role in the trial, the defence did not appear to be pressing for them. The defence responded by saying that it had requested particulars on the first day of the trial and was expecting them to be provided. Original particulars β Mr Morris On day 6 of the trial the prosecution provided particulars with respect to its case on the charges concerning Mr Morris' surgery. The original particulars ran to some 29 paragraphs but included much duplication. The detail in some of the particulars and general allegations, including those framed simply in the terms of s 282, may be put to one side. The essential allegations of negligence concerning the appellant's decision to operate were that the surgery should not have been undertaken and that further tests would have indicated this; and that the operation presented a high risk to the patient, not only because of the nature of the operation but also because of his poor state of health and the multiple conditions from which he suffered (described as "co-morbidities"). These allegations remained largely unchanged throughout the trial. The original particulars also contained allegations of negligence in the performance of the surgical procedure and in the provision of post-operative care. Details of the former were that the surgery was performed or supervised in such a way as to give rise to (i) wound dehiscence (a breaking open of the surgical wound) which required surgical correction and (ii) the creation of an inadequate stoma (the colostomy opening in the abdominal wall), which was said to be a cause of post-operative partial bowel obstruction. The bowel obstruction alone or in combination with the incorrect placement of a nasogastric tube was said to have the consequence, post-operatively, that the patient vomited and aspirated the Hayne Bell vomitus. Further, negligence in post-operative care was said to be shown by the inadequate attention that was paid by the appellant to the patient's nutrition, amongst other things. Mr Morris' death was said to have been caused by any of these matters alone or in combination. An application to discharge the jury is made On day 9 of the trial his Honour the trial judge observed that the defence task was difficult, given the multiplicity of allegations and the variety of alternative cases seemingly put by the prosecution. Although his Honour thought that the essence of the prosecution case was "that it was criminally negligent to conduct the operation at all", he was beginning to doubt that the case would be so confined by the time the matter went to the jury. The following day the defence made an application to have the jury discharged. The application was made on two grounds, one of which related to the particulars which were outstanding with respect to all but the Morris charges21. The application was refused. His Honour observed that the defence had not sought particulars until very late and considered that the defence would have to abide by the consequences of what his Honour took to be a considered, tactical decision. The trial proceeded with particulars of the prosecution case on each of the other three charges being supplied prior to the evidence with respect to each charge being led. The process undertaken at trial was to call all medical and other evidence relating to one charge before moving to the next. Those witnesses giving evidence with respect to more than one charge were recalled as necessary. The trial proceeded with the trial judge expressing concerns about what appeared to be "roving investigations" into the appellant's conduct. The Phillips, Kemps and Vowles particulars The original particulars of the case concerning Mr Phillips' surgery alleged that the procedure should not have been performed given his state of health and medical history, and that there were other, less dangerous options available. It was alleged that the appellant should have consulted with the patient's treating doctors and in particular his renal physician. Relevant to the decision to perform the surgery was said to be the fact that Bundaberg Base Hospital had inadequate intensive care resources to care for the patient post- 21 The other ground related to the evidence of an expert witness and is not presently relevant. Hayne Bell operatively. It was also alleged that the appellant performed the surgical procedure negligently in that he caused the patient to bleed internally at the end of the operation or shortly thereafter. The original particulars relating to Mr Kemps' surgery alleged that the appellant failed to control internal bleeding which occurred during the surgical procedure and delayed undertaking a second procedure in order to find the source of the bleeding. When he did undertake the second procedure, he failed to find the source of the bleeding and stop the bleeding. The other allegations in the original particulars concerning Mr Kemps related to the appellant's decision to operate. It was alleged that the procedure should not have been undertaken given the risks to the patient's health and the availability of other options. It was also alleged that the lack of resources of the intensive care unit at Bundaberg Base Hospital should have been taken into account by the appellant. The original particulars relating to Mr Vowles alleged that the surgical procedure was unnecessary because test results at that time did not indicate that the surgical procedure should be undertaken and there were further investigations that should have been performed. It was also alleged that the appellant performed the procedure without reasonable care and skill because the operation resulted in the patient having an inadequate stoma that later required rectification. Particulars were also given of the treatment of one James Ashton Grave, although the appellant was not charged over the surgical procedure undertaken with respect to him (an oesophagectomy). Mr Grave survived the procedure, but had a difficult post-operative period, necessitating his transfer to a hospital in Brisbane which had a tertiary intensive care unit. It was alleged that it was dangerous to perform the operation on a patient with Mr Grave's medical history and that the procedure should not have been performed without further tests with respect to the conditions from which he suffered. The matters otherwise raised by the particulars were that the appellant should have known that Bundaberg Base Hospital lacked the capacity to care post-operatively for patients recovering from this type of operation and that the earlier death of Mr Phillips following an oesophagectomy showed that the appellant lacked the skill to perform such a procedure. The evidence The above short summary of the particulars provided by the prosecution does not convey fully the nature and extent of the evidence given in the prosecution case. It involved a large number of witnesses, as may be evident Hayne Bell from the length of the trial. As observations made by the trial judge from time to time in the course of the trial confirm, the evidence given ranged beyond the acts identified in the particulars and extended to criticisms of the appellant's professional and personal conduct. The evidence was not restricted to the treatment of, and surgery conducted upon, the four patients and Mr Grave. Evidence was led about his working relationship with nursing and other staff and included references to his expressions of anger when his orders were disobeyed. His interpersonal skills at the hospital were described as "dysfunctional" and as affecting the welfare of his patients. Evidence was led that he instructed that another patient be removed from a ventilator so that he could conduct surgery upon Mr Kemps before going on holidays ("the ventilator incident"). Evidence was led about conversations the appellant had with relatives of Messrs Phillips, Kemps and Grave, when he failed to advise them of the true position relating to the patients' post-operative status. Much of this evidence reflected adversely upon the appellant as a person. It suggested that he was egotistical, uncaring, and dishonest in his dealings with the patients' families, and felt guilty about his performance as a surgeon. In summary, the prosecution case might be described as a wide-ranging attack upon the appellant both professionally and personally. It is true that much of the focus of the prosecution was upon the judgment formed by the appellant as to the need for surgery in each case. Considerable time was taken with the questioning of experts called on that issue; but so too was considerable time taken in connection with the conduct by the appellant of the surgery itself, in the cases of Mr Morris, Mr Phillips and Mr Kemps. And, in the case of Mr Kemps, much of the evidence about the extent of the uncontrolled bleeding and attempts to stop it was very graphic. A considerable amount of evidence was given about problems which were experienced post-operatively, not only in the case of these three gentlemen, but also in the case of Mr Grave. The jury was provided with the records of the patients electronically and was taken through the stages of each patient's demise with detail being provided of the nature and extent of their suffering. In all, approximately 36 doctors (or retired doctors) who had had some connection with the treatment of the patients were called. In addition, it appears that some five independent expert witnesses were called to review the decisions taken, the surgery performed and the problems encountered with post-operative care and to explain the duties of a surgeon in each respect. Opinions, which differed, were given about the adequacy of the facilities at the intensive care unit of Bundaberg Base Hospital to deal with the post-operative care of patients with complex, pre-existing conditions and those who had surgery as major as an oesophagectomy. Some 25 nurses were called. Hayne Bell The revised particulars On day 40 the prosecution sought to put forward a case which did not depend upon s 288. It appears from his Honour the trial judge's ruling that the reason for the change of direction in the prosecution case was that the expert evidence, which had then concluded, suggested that at least three of the four operations conducted by the appellant were performed with reasonable care and skill. During his later summing up, his Honour would say that all the procedures had been "performed competently enough". The prosecution was concerned that s 288 might not extend to the anterior decision to operate or the recommendation to operate. His Honour ruled that the prosecution should confine itself to the case it had opened, which depended upon a failure to observe the duty imposed by s 288. His Honour was of the view that s 288 extended to a case where it was grossly negligent to undertake the surgery. It appears from the discussion following the ruling that the prosecution nevertheless intended to rely upon aspects of the appellant's lack of surgical competence as relevant to the decision to operate. Not for the first time his Honour remarked that the approach taken was akin to throwing "every little piece of mud in the hope that some will stick", taking up a metaphor which had been used by defence counsel. The matter was left at that point on the basis that the prosecution would provide further particulars of the case it now intended to put to the jury. Revised particulars of each of the four cases were provided on day 43. His Honour the trial judge referred to the revised particulars as the first comprehensible particulars provided and described the revised particulars pertaining to Mr Morris as a "vast improvement". The particulars of the appellant's breach of duty in deciding to undertake the procedure on Mr Morris were retained but were now more specific. It was alleged that the appellant did not undertake proper testing, had not determined the cause of the bleeding with which the patient had presented and had not excluded the possibility that it was caused by radiation proctitis, of which there was evidence in the patient's medical history. The symptom of bleeding was said to be insufficient to justify the operation and the patient's age and the conditions from which he suffered made it dangerous. It was alleged that the appellant knew or ought to have known of his limitations as a result of the treatment of Mr Phillips, which predated Mr Morris' surgery. It is unclear whether the limitations of which it was said the appellant should have been aware concerned his ability to perform surgery, or his judgment about whether surgery was warranted, or both. The latter is consistent with the Hayne Bell tenor of the revised particulars. With that qualification, the revised particulars contained no allegations of negligence in the performance of the surgery. The previous particulars concerning negligent post-operative care were not repeated. The revised particulars with respect to Mr Phillips' surgical procedure alleged that the surgery should not have been undertaken because it was too dangerous to perform given this patient's multiple pre-existing conditions, and was not appropriate for the condition from which he then suffered. It was said that the surgical treatment was wrongly undertaken because the cancer was of a nature which did not justify the procedure and the appellant failed to investigate whether the cancer had metastasised (which would have made the operation pointless). Other treatment options were alleged to have been available. Further, it was alleged that the operation was performed at a hospital which would have difficulty dealing with post-operative complications. These matters relate to the appellant's judgment in deciding to perform the surgery. The original allegation concerning the conduct of the surgery itself, namely, that the appellant caused the patient to bleed, was maintained. The revised particulars with respect to Mr Kemps alleged that the surgery should not have been performed because the cancer was too advanced; there was evidence of metastatic spread, making the surgery pointless; the patient was too old and unwell to survive the operation or the recovery period; and there were other treatment options available. It was alleged that the appellant should have known of his limits at this point because of the outcomes of the operations upon Messrs Phillips, Morris, Grave and Vowles; and of the limits of the intensive care unit at Bundaberg Base Hospital because of problems encountered post- operatively with respect to Messrs Phillips and Grave, and because of conversations he had had with other staff. Allegations concerning the appellant's surgical competence were maintained in these particulars. It was alleged that the appellant failed to stop the uncontrolled bleeding during the first procedure, delayed undertaking a second procedure to locate and stop it and, having undertaken the second procedure, failed to stop the bleeding. The revised particulars relating to Mr Vowles continued the allegations that the surgery was unnecessary. It was now alleged that the polyp found by the appellant was non-malignant. It was alleged that the appellant should have known of his limitations as a result of the treatment of Messrs Phillips, Morris and Grave. However, there was no mention of the previous allegation that the stoma had been incorrectly positioned. That is to say, there was now no suggestion that the appellant had been negligent in the conduct of the surgery itself. Hayne Bell The Oregon Order It is necessary to mention a document which was referred to in some of the original and revised particulars. It was referred to in the proceedings as "the Oregon Order". The appellant had trained as a surgeon in the United States of America and in 1989 had obtained a licence to practise medicine in Oregon. By the terms of an order made on 7 September 2000 by the Board of Medical Examiners of that State, an organisation responsible for regulating health care providers, the appellant acknowledged that he had engaged in conduct that was described as "gross or repeated acts of negligence in the practice of medicine" and that this conduct amounted to unprofessional conduct. The background to the Oregon Order was a peer review conducted in 1998 by the appellant's then employer of 79 charts of his patients. The appellant's then employer restricted his surgical practice to exclude surgeries involving the pancreas, resections of the liver and the construction of ileoanal pouches. The Oregon Board of Medical Examiners conducted its own investigations, including obtaining a list of detrimentally affected patients from the appellant's employer, and questioned the appellant. The Oregon Order was the result of these investigations. The Oregon Order recorded a settlement of the matter whereby the appellant agreed not to undertake the abovementioned surgery and to obtain a second opinion pre-operatively "on complicated surgical cases" from approved surgeons. "Complicated surgical cases" were defined to include surgeries on high risk patients with severe co-morbidities including heart or renal failure, oesophageal and gastric surgeries, and surgeries on post-operative patients with more than two days' stay in an intensive care unit. The Oregon Order was the subject of a pre-trial ruling of admissibility22 over the objection of the defence. It had been referred to in the original particulars concerning Mr Morris' and Mr Vowles' surgical procedures, but only in connection with an allegation that the appellant lacked good faith in conducting the operations, for the purposes of s 282. The Oregon Order was referred to in the revised particulars. So far as concerned Mr Morris' procedure, it was relied upon to show that the appellant was required to obtain a second opinion before operating upon a patient with severe co-morbidities. So far as concerned Mr Kemps and Mr Vowles, it was relied upon to show that a second 22 In the matter of Patel unreported, Supreme Court of Queensland, 20 March 2010 per Byrne SJA. Hayne Bell opinion was required with respect to the types of surgical procedures conducted upon them. The defence applies again to discharge the jury Upon receipt of the revised particulars, the defence raised the matter of what it described as a large quantity of evidence which had been given in preceding weeks but which did not now appear to be relevant. The following day, day 44 of the trial, the defence applied to have the jury discharged without rendering a verdict on the basis that the appellant could not secure a fair trial. The trial at this point was described by defence counsel as a "movable feast". The defence provided a schedule of evidence said to be irrelevant in light of the narrower case now pursued by the prosecution, although it was said that it may not be exhaustive. Much more evidence is now said to have been both prejudicial and irrelevant. Amongst the evidence which the defence did identify on its application as having become irrelevant was evidence which reflected upon the appellant's competence as a surgeon, evidence concerning the ventilator incident and evidence of the conversations which the appellant had with members of three of the patients' families, when he reassured them about the patients' conditions when they were in fact deteriorating. His Honour the trial judge was understandably concerned about discharging a jury at so late a stage in a long trial and when the matter was about to go to the jury. His Honour acknowledged that whilst some evidence, such as that of mistakes made in other cases, might have probative value in connection with the appellant's knowledge about his abilities and could thus be connected to his decisions to embark upon surgery, other evidence of surgical misadventures had the potential for prejudice which far outweighed its probative value. There was a risk that the jury might misuse the evidence. His Honour observed that some jurors might feel overwhelmed by the sheer magnitude of the criticisms made of the appellant. His Honour, however, observed that save for some pre- trial applications, the evidence had not been objected to. His Honour reiterated his view that the defence appeared to have allowed the matter to proceed to trial on an unparticularised basis, as a result of a tactical decision. But his Honour's refusal to discharge the jury appears to have been based principally upon a view that directions to the jury might overcome much of the prejudice. His Honour invited the defence to identify evidence that should be subject to directions. However, the defence subsequently informed his Honour that it did not wish to make submissions on the point beyond those it had made on its application for the discharge of the jury. Hayne Bell Summing up about the nature of the prosecution case At an early point in summing up, his Honour directed the jury as to the use that could be made of the Oregon Order. His Honour pointed out that the Oregon Order did not affect the appellant's entitlement to practise as a surgeon in Queensland and that it did not prohibit the procedures involved in the charges. His Honour further noted that even in Oregon they might have been performed, albeit following a second opinion. An additional question might be what opinion the appellant might have obtained from surgeons in Australia. His Honour directed the jury that the only uses that could be made of the Oregon Order were: (i) in considering the weight to be given to the patient's choice to undergo a procedure; and (ii) that its requirements might be thought to suggest that the appellant had reason to reflect, before recommending major surgery to patients, on any deficiencies there may have been in his knowledge and aptitude. His Honour directed the jury that it would be wrong to suppose that, because the appellant had admitted to having been grossly negligent in surgery in Oregon, it was likely that he had committed the offences charged. It is at this point that his Honour directed the jury as to the essential nature of the prosecution case concerning the surgery performed by the appellant. His Honour said, "It is critical to appreciate that this trial is not about botched surgery. Instead, it is about surgery performed competently enough." His Honour continued, "It is not how the Accused performed surgery that matters in these four cases." His Honour explained that what mattered was the appellant's judgment in deciding to commend the surgery and then, having obtained a patient's consent, performing the surgery, and that the prosecution contended that the operations were unnecessary or inappropriate. The respondent did not take issue with the correctness of this aspect of his Honour's summing up either in the Court of Appeal or in this Court. Miscarriage of justice? The contentions The appellant submits that he was always entitled to particulars of the acts relied upon in proof of the offences23. So much may be accepted. The defence might have applied for them at any time in the numerous pre-trial hearings which 23 Referring to, inter alia, Johnson v Miller (1937) 59 CLR 467 at 489; [1937] HCA 77. See also Kirk v Industrial Court (NSW) (2010) 239 CLR 531 at 557 [26]; [2010] HCA 1. Hayne Bell took place. However, doing so may have served to focus the prosecution on the essential strengths of its case. It may readily be inferred, as his Honour the trial judge did, that a tactical decision was made by the defence not to demand particulars until his Honour raised questions about their need shortly prior to the commencement of the trial. The appellant is bound by the decision made in this regard24. The particulars that were originally supplied, especially those relating to Mr Morris' surgical procedure, were complex. The many alternative bases relied upon for findings of guilt would necessitate individual assessments of causation which might not be consistent with each other. The appellant submits that his Honour ought not to have permitted the trial to proceed on the basis of particulars which were legally incoherent. But his Honour's complaints about the incoherence of the particulars appear not to have motivated the defence to attack them. The appellant cannot now be heard to say that unfairness resulted to him on this account. In any event, it is the effect of the particulars, not their quality, which is now in issue. If there was a miscarriage of justice, it was because the prosecution case changed at a very late point in the trial with the result that much of the evidence that had been admitted on the wide-ranging prosecution case no longer remained relevant to the more confined case that went to the jury. This is the matter which requires further consideration. The question is not, however, whether the trial judge was wrong in refusing to discharge the jury on this basis. As Sachs LJ observed in R v Weaver25, there is no rule that, where inadmissible or prejudicial evidence is admitted through inadvertence, a jury must be discharged. This statement was referred to with approval by Gibbs ACJ26 in Maric v The Queen. His Honour said that when an accused has been convicted, the appeal is not against the failure to discharge the jury, but against the conviction27. His Honour's observation remains relevant to a case such as this, even if the test as to what constitutes a miscarriage of justice sufficient to warrant the quashing of a 24 Nudd v The Queen (2006) 80 ALJR 614 at 618 [9]; 225 ALR 161 at 164; [2006] HCA 9. 25 [1968] 1 QB 353 at 360. 26 Maric v The Queen (1978) 52 ALJR 631 at 634; 20 ALR 513 at 519-520. 27 Maric v The Queen (1978) 52 ALJR 631 at 634; 20 ALR 513 at 520. Hayne Bell conviction referred to in Maric is affected by what was later said by this Court in Weiss v The Queen28. Relevant evidence? Questions as to the relevance of evidence cannot properly be understood except by reference to the matters which it was necessary for the prosecution to prove or which it might reasonably be necessary to meet in anticipation of a defence29. It is useful to start with what the prosecution case did not involve following the revised particulars. The prosecution case did not involve allegations of surgery performed so incompetently as to amount to criminal negligence. The effect of the evidence at the point the revised particulars were provided, as his Honour the trial judge later observed, was that the surgical procedures had been performed competently. The revised particulars relating to Mr Phillips, which contain the allegation that the appellant caused some bleeding at the conclusion of the operation, do not detract from this assessment. It appears to have been an allegation that went nowhere. The particulars relating to Mr Kemps did consistently allege negligence in the conduct of surgery: in the appellant concluding the first procedure without locating the source of the internal bleeding and stopping it and, subsequently, in delaying the patient's return to surgery and then again failing to locate and stop the bleeding. However, these particulars require some further clarification, in light of the expert evidence. As the trial judge observed in summing up in relation to Mr Kemps' procedure, "again, the focus is not on proficiency in carrying out a surgical procedure." Although the oesophagectomy caused the fatal bleeding, the source of the bleeding was never located and expert opinion did not resolve that question. It was said by one expert that a surgeon should be able to find a source of bleeding, but that expert did not suggest that the appellant was wrong to conclude the first procedure given the extent to which the bleeding had reduced. Nor did the evidence suggest that he was criminally negligent because he was unable to stop the bleeding in the second procedure. The prosecution case was that the appellant should not have delayed in undertaking the second procedure 28 (2005) 224 CLR 300; [2005] HCA 81. 29 See HML v The Queen (2008) 235 CLR 334 at 351 [5]; [2008] HCA 16. Hayne Bell and that he should have suspended the surgery he had commenced on another patient and dealt with Mr Kemps' bleeding more promptly. The Court of Appeal considered that the only revised particulars which contained no allegation of negligent acts in the conduct of a surgical procedure were those relating to Mr Vowles. Even so, it considered, some such allegation was to be found in the particular alleging that the appellant did not have reasonable skills and did not use reasonable care30. For the foregoing reasons, the Court of Appeal was incorrect in its conclusion concerning the particulars relating to Messrs Morris, Phillips and Kemps. So far as concerns those relating to Mr Vowles, the allegation was merely a general one, details of which were said to follow. No further particulars relating to surgery were provided. The revised particulars in respect of each patient contained no allegation that the appellant was criminally negligent in the provision or supervision of post-operative care. The detailed allegations which had originally been made in the case concerning Mr Morris were not repeated. The prosecution case according to the revised particulars was that none of the procedures was warranted: in the case of Mr Morris, because the bleeding had a cause which the surgery conducted would not address; in the case of Messrs Phillips and Kemps, because their health was too precarious for major surgery such as an oesophagectomy; and in the case of Mr Vowles, because he did not in fact have colon cancer. Thus, in general terms, the evidence necessary to be led by the prosecution concerned the appellant's judgment about the need for, and the risks associated with, the surgical procedures for the particular patient, the facts available to him about those matters, and whether the judgment he made fell so far below the standard of a competent surgeon as to warrant criminal punishment. Additionally, the prosecution was required to prove that the undertaking of the surgical procedure in each case was a significant or a substantial cause of the death or grievous bodily harm31 and that this was so despite the existence of other, more direct, causes. It was necessary for the prosecution to attempt to meet the defence of mistake of fact provided by s 24 of the Criminal Code. In the case of Mr Morris, it might be said that the appellant had an honest and 30 R v Patel; ex parte A-G (Qld) [2011] QCA 81 at [122]. 31 Royall v The Queen (1991) 172 CLR 378 at 389, 398, 411-412, 423; [1991] HCA 27; Osland v The Queen (1998) 197 CLR 316 at 324 [15], 366 [147]; [1998] HCA Hayne Bell reasonable, but mistaken, belief that the bleeding he presented with was from diverticula in the sigmoid colon. And in the case of Mr Vowles, it might be said that the appellant mistakenly believed that the growth was pre-cancerous, given the patient's history of bowel cancer. Relevance of evidence of incompetence in surgery In accordance with the original particulars concerning Mr Morris' surgery, evidence was led concerning the occurrence of the wound dehiscence and the incorrect positioning of the stoma. Evidence was also given concerning Mr Vowles' stoma as having been incorrectly positioned. In the case concerning Mr Morris, it was said by one expert that the incorrect positioning of the stoma was an error of surgery which could have been fixed when the surgery to correct the wound dehiscence was undertaken and that it was associated with the blockage of the colostomy. Evidence therefore connected the surgery performed by the appellant with the post-operative complications, although neither was the subject of the revised particulars. The evidence concerning the surgery performed upon Mr Phillips went beyond the particulars and touched upon the appellant's competence as a surgeon in a number of respects. His inability to obtain a central venous line was said by an expert to indicate not only an unsatisfactory situation in which to proceed with surgery, but that he lacked technical competence with respect to a basic procedure. Evidence was given that the oesophagus had been torn in the process of the operation. This was said by one expert to be something that should not have occurred and to suggest that the surgery was handled roughly. Moreover, the removal of the cancerous oesophagus in two parts, rather than intact, was said to be unorthodox and to risk the "spilling" of cancer cells. This body of evidence was tendered to support a case of general incompetence and that the surgery itself was performed in a manner which was grossly negligent with serious or fatal results. The evidence was not sufficient to support such a conclusion, yet it was clearly prejudicial to the appellant. How can this evidence be said, logically, to be relevant to the earlier formation of a judgment as to whether to operate? that evidence of The respondent submits the appellant's general incompetence cannot be irrelevant to his negligence in deciding to undertake the surgical procedures. It is not readily apparent why this would be so. A view formed about the appellant's performance as a surgeon on other occasions does not permit a conclusion with respect to the offences alleged. The submission may, however, be better understood by reference to other submissions put, which Hayne Bell concerned the insight that the appellant should have had into his own competence, or lack thereof. It is submitted by the respondent that evidence of the appellant's misleading the patients' families, and of his stating, unprompted, that the complications arising from surgery were not his fault, may be relevant to show that the appellant was conscious of his carelessness. This submission is consistent with the conclusion reached by the Court of Appeal that the way in which the appellant carried out the surgical procedures was relevant to show that he "knew or ought to have known" of his limitations32. This was a general allegation which had been made in the revised particulars concerning Mr Morris', Mr Kemps' and Mr Vowles' procedures. Such an approach raises questions about just what the appellant should have perceived from the results of particular procedures and just what it is said his limitations were. It is not obvious what the appellant ought to have learned from what was reasonably competent surgery in those cases. Where there were errors, they had not themselves had a significant effect. More likely to be relevant to his judgment in deciding to operate was the fact that some patients with severe co-morbid conditions had suffered serious complications post- surgery. Logically, what happened to a particular patient during or after surgery cannot have informed the appellant's decision to operate on that patient. The prosecution case did not have this temporal problem. It sought to fix the appellant with actual or imputed knowledge of earlier surgery and apply it to subsequent decisions with respect to other patients. This was the basis upon which the Court of Appeal viewed the evidence as relevant33. Indeed, this appears to have been one of the bases upon which the evidence relating to Mr Grave was initially tendered34. Notions of the appellant's supposed consciousness of his lack of skill, in surgery or in his judgment, permeate the respondent's submissions as to the relevance of much of the evidence in question. Yet there is a fundamental objection to the respondent's position. Even if the allegations that the appellant "knew or ought to have known" of his own shortcomings were relevant to the 32 R v Patel; ex parte A-G (Qld) [2011] QCA 81 at [124]. 33 R v Patel; ex parte A-G (Qld) [2011] QCA 81 at [124]. 34 See R v Patel [2010] QSC 068 at [14], [22]-[23]. Hayne Bell case as originally formulated (a question that need not be decided), they were not relevant to the reformulated case. As these reasons will show, the test of criminal negligence is objective. The central questions presented by the reformulated prosecution case were first, would a competent surgeon have decided to operate and second, was the decision to operate so great a departure from reasonable skill as to be criminally negligent. Showing that the appellant ought to have known he should not operate was irrelevant. Evidence critical of his surgical technique (in these or in other cases) was wholly irrelevant. As will be shown, evidence critical of his post-operative care of these patients was also irrelevant except to the extent that it bore upon the immediate cause of death of the patient. Before discussing that matter, it is appropriate to mention the Oregon Order, in respect of which questions about the appellant's consciousness assume special importance. Relevance of the Oregon Order The prosecution did not address the jury about the use to which the Oregon Order could be put, but the respondent now says that its probative value was higher than that which the trial judge indicated in his directions to the jury. The respondent submits that the Oregon Order was relevant as an admission that the appellant had made surgical errors of the kinds there specified. An obvious difficulty with the submission is that the surgery here was said to have been performed competently enough. The Oregon Order cannot counter direct evidence to this effect. His Honour the trial judge correctly directed the jury that it could not use the appellant's admissions to determine that the appellant was guilty of the offences charged. The Oregon Order was not sought to be relied upon as propensity evidence35, as to the appellant forming grossly negligent opinions about whether to undertake surgery upon patients with severe co-morbidities. It is difficult to see how it could have been, not least because the Oregon Order did not specify the facts relating to any previous decisions of this kind. Nevertheless, the potential for the misuse of the contents of the Oregon Order by the jury and the level of prejudice that it might have engendered in the minds of members of the jury is self-evident. The trial judge sought to minimise its potential effects by limiting the use to which it might be put. His Honour directed the jury that the only uses that could be made of it were in considering the weight to be attached to a patient's choice to undergo a procedure and, more importantly, that it might 35 Pfennig v The Queen (1995) 182 CLR 461; [1995] HCA 7. Hayne Bell be thought to have caused the appellant to reflect upon his limitations. However, the evidence could not be relevant even for that latter purpose. The test of criminal negligence is objective Because of the value the law places upon human life, it punishes grossly or criminally negligent conduct which causes death or grievous bodily harm, and it does so regardless of the subjective intentions of the accused or the accused's appreciation of the risk involved in his or her conduct36. The test applied to conduct which is alleged to amount to gross or criminal negligence in the context of the crime of manslaughter, or grievous bodily harm, is an objective one37. So too is an objective test applied to manslaughter by unlawful and dangerous act38 and driving a motor vehicle in a negligently culpable manner39. The test does not require that an accused have an appreciation of, or an indifference to, the risk created by the conduct in question. The only criterion necessary is an intention to do the act which inadvertently causes death40 or grievous bodily harm. The objective standard of conduct set by the law in a case such as the present is that of a reasonably competent surgeon. The question is whether the appellant's conduct, in judging that surgery was necessary or warranted, fell so far below that standard as to amount to gross or criminal negligence and thereby warrant criminal punishment. There may be cases where the standard to be applied must take account of special knowledge on the part of a person, as relevant to how a person with that knowledge would act41. But that is not to use a person's knowledge to determine 36 R v Lavender (2005) 222 CLR 67 at 87-88 [60]; [2005] HCA 37. 37 R v Lavender (2005) 222 CLR 67 at 87-88 [60]. 38 Wilson v The Queen (1992) 174 CLR 313 at 324, 341; [1992] HCA 31; R v Lavender (2005) 222 CLR 67 at 82-83 [40]. 39 King v The Queen (2012) 86 ALJR 833 at 843 [31], 857 [92]; 288 ALR 565 at 576, 594; [2012] HCA 24. 40 R v Lavender (2005) 222 CLR 67 at 83 [40]. 41 Ormerod, Smith and Hogan's Criminal Law, 13th ed (2011) at 148 [6.1.2.1]. Hayne Bell their guilt. A person's special knowledge may mean that the standard of conduct expected of them is higher. It is necessary to add that the appellant's imputed knowledge of his limitations cannot, logically, be applied to exculpate him for the reason that the objective standard to be applied is a minimum standard, applicable to all persons who profess to have the skills and competence of a surgeon by undertaking to perform surgery. In Bateman42, Hewart LCJ said that it was conceivable that a person may be held liable for undertaking a case "which he knew, or should have known, to be beyond his powers". His Lordship should not be taken to suggest as appropriate an enquiry into an accused's state of mind. What his Lordship said is not inconsistent with the application of an objective test. It is not necessary to show that an accused in fact knew that a case was beyond his or her powers. Criminal negligence in the context of manslaughter is to be distinguished from other forms of criminal liability which involve intention or recklessness. The respondent did not suggest in argument that the appellant's consciousness was relevant because he appreciated the risks he was taking with respect to the lives and bodily states of the patients, but nevertheless chose to take them. The respondent's argument centred upon what the appellant should have understood about his deficiencies. Had the respondent raised questions of recklessness of the kind just mentioned, it would have been necessary to consider what was said by this Court in Wilson v The Queen43, as to whether the application of a test of recklessness in the context of criminal negligence might create confusion with the concept of reckless indifference as it applies to murder. This serves to underline subjective intention as being relevant to murder, but not to manslaughter or grievous bodily harm. In assessing the appellant's decision to operate by reference to that which would have been reached by a reasonably competent surgeon, it would be relevant to have regard to the facts and matters which would affect the formation of that judgment. Thus, evidence about the facts known about a patient's condition; whether a diagnosis was possible without further investigation; what the correct diagnosis was; whether a need for surgery was thereby indicated; whether there were less invasive procedures to be considered; the risks to the patient from the surgery; and the ability of the patient to withstand surgery are all 42 (1925) 19 Cr App R 8 at 13. 43 (1992) 174 CLR 313 at 339-340 per Brennan, Deane and Dawson JJ; see also R v G [2004] 1 AC 1034. Hayne Bell matters which would be relevant. The prosecution case contained much evidence of this kind. Evidence about what the appellant perceived about himself, and what insight he had, or should have gleaned, from other surgical experiences, is not relevant to an assessment as to whether he was negligent. He is not to be punished because he failed to learn lessons and obtain insights. He will be punished by the law only if the opinion he formed was, judged objectively by the standard of conduct that the law requires, so careless and so unskilled as to be grossly negligent and if the surgery which followed caused death or grievous bodily harm. Relevance of the evidence relating to Mr Grave A similar misapprehension about the relevance of the appellant's subjective understanding of his competence attends the respondent's submission concerning the evidence relating to Mr Grave. Such evidence was initially said to have been relevant because the appellant must have appreciated his lack of competence when he later undertook the same operation, an oesophagectomy, on Mr Kemps. This is not a correct application of the objective test. In any event, this is not the approach which was ultimately taken by the respondent to the probative value of this evidence at trial. In argument before this Court it was contended that, in the end result, the evidence about the post- operative complications that Mr Grave suffered was relevant only to the issue of where an operation of the kind conducted should have been carried out, which is to say whether it required, for post-operative care, the facilities available at larger intensive care units at metropolitan hospitals. There were differences of view about whether the intensive care unit at Bundaberg Base Hospital was adequate. In any event, it is conceded by the respondent that there was no evidence that, if Mr Grave's surgical procedure had been undertaken in Brisbane, the outcome of the operation would have been different. Moral culpability as a test The appellant's alleged lack of competence is also said by the respondent to be relevant to whether the alleged breach of the duty imposed by s 288 was "morally grave". It will be recalled that in Callaghan v The Queen44 it was explained that the degree of negligence required to prove that a person is guilty of manslaughter is gross or criminal, the offence being contained in a criminal 44 (1952) 87 CLR 115 at 121, 124. Hayne Bell code dealing with crimes involving grave moral guilt. However, this is to explain the rationale for the degree of negligence required to amount to criminal negligence. It does not suggest that moral culpability is itself a test of a person's guilt. It may be inferred that the moral aspect of the appellant's conduct to which the respondent refers, by way of this submission, is the appellant's supposed awareness of his limitations when he decided to undertake the surgery. This is at least consistent with the respondent's other submissions. So understood, the submission suffers from the same problem, explained above, as those submissions concerning the use of an accused's subjective intentions or understanding about the risks being taken. It has been said that a conviction for manslaughter should reflect the principle that there should be a close correlation between moral culpability and legal responsibility45. That correlation, however, should be achieved by the degree of negligence required46. Relevance of post-operative care There was a considerable body of evidence led by the prosecution concerning the problems in Mr Morris' post-operative care which were connected to his death. Detailed evidence was also given of the nature and the extent of the suffering of Mr Morris in the period leading to his death, including his mental anguish. The immediate cause of Mr Morris' death was the aspiration of vomit into the lungs. It is not evident that the appellant was said to have been responsible for the mis-positioning of the nasogastric tube but there was evidence connecting the stoma to the post-operative blockage of the colostomy which, in turn, was linked with the aspiration. Malnutrition was said to have been a secondary cause of death. There was evidence that a surgeon is responsible for the maintenance of a patient's nourishment post-operatively and that the failure to address this patient's nutritional requirements suggested the level of care fell below that of a competent surgeon. Evidence of post-operative difficulties was given with respect to the other three patients. The cause of Mr Phillips' death was directly attributable to the 45 Wilson v The Queen (1992) 174 CLR 313 at 334. 46 R v Lavender (2005) 222 CLR 67 at 108 [128]. Hayne Bell failure of dialysis treatment to reduce his potassium levels, which induced heart failure. Evidence was led of his "parlous" condition post-operatively, which deteriorated until his death. Evidence was led concerning the action the appellant should have taken, namely, returning Mr Kemps to theatre in order to identify and stop his bleeding. There were post-operative complications with respect to Mr Vowles' stoma and there was evidence that it needed repositioning by another surgeon. Evidence was given concerning the problems and discomfort associated with this complication. What was a substantial body of evidence as to the post-operative condition of the four patients was tendered, most clearly in the case of Mr Morris, in order to show that the appellant was criminally responsible for what then occurred. It is now said that, when the prosecution case narrowed, it remained relevant to issues of causation. It may be accepted that, in respect of the patients who died, the prosecution needed to explain to the jury the sequelae to the surgical procedures and the part they played as causes of death. The direct cause of death in each case was not the surgery and arose post-operatively: the aspiration of matter by Mr Morris; heart failure caused by Mr Phillips' high potassium levels; and uncontrolled bleeding from an unidentified source in the case of Mr Kemps. But the evidence which was called by the prosecution went beyond these purposes and made other, more general criticisms of the appellant's conduct. That evidence was not relevant, whether to proof of causation or at all. Apart from evidence about the appellant's part (if any) in placing and monitoring the feeding tube in Mr Morris and in not taking Mr Kemps back to theatre quickly enough, evidence critical of the appellant's post-operative care was not relevant to whether the decision to operate was a substantial cause of each patient's death. Relevance of the ventilator incident At least eight witnesses gave evidence with respect to the ventilator incident. The evidence included testimony by the instrument nurse who assisted the appellant in Mr Kemps' surgery, who said that she had heard that Mr Kemps' operation might not be proceeding because there were insufficient beds in the intensive care unit. The appellant gave instructions that the patient who was then attached to the ventilator was to be removed from it and the bed made available. The appellant was said to have become angry when he realised those instructions had not been carried out. The reason the appellant's instructions were not followed was that procedures necessary for the removal of life support had not been undertaken. A clinical nurse had obtained further instructions from an Hayne Bell anaesthetist, Dr Joiner, that the patient was not to be removed from the ventilator until the proper procedures had been completed. When they were, the head of the anaesthetics department, Dr Carter, turned off the ventilator. Of particular significance in the context of this evidence was the statement alleged to have been made by the appellant to the clinical nurse, to explain the need to act promptly. He was alleged to have told the clinical nurse that he had to perform the operation that morning as he was due to go on leave in a day or two. This evidence was clearly prejudicial to the appellant. It suggests that he was unprofessional in directing that action be taken without observing proper procedures. The conversation with the nurse is likely to have created a strong, adverse feeling towards him on the part of the jury, as a person who was callously indifferent to the plight of the patient taken off the ventilator and concerned only about his own interests. The prosecution in closing address sought to downplay the incident, and emphasised that no criticism was made of the appellant for having instructed that the ventilator be turned off. By this point, however, it may be thought that the damage had been done. The Court of Appeal held that this evidence was irrelevant, even on the wider prosecution case articulated in the original particulars 47. The respondent does not now contend to the contrary, but says that the evidence was innocuous in light of the evidence of Dr Carter, the limited reliance placed on it by the prosecution in closing address, and the trial judge's summing up. The Court of Appeal considered that evidence concerning the ventilator was a relatively small body of evidence led over the course of a long trial and was unlikely to have been prominent in the jury's deliberations with respect to either the charge arising out of Mr Kemps' surgery or the other charges48. We respectfully disagree. The evidence is likely to have made a strong impression upon the jury and to have reinforced adverse views about the appellant, professionally and personally, which the prosecution was encouraging the jury to form by the evidence that it led. Relevance of evidence of conversations with relations Malnutrition was regarded by an expert witness as a secondary cause of the death of Mr Morris and to have contributed to it to a significant extent. Evidence of non-expert witnesses reinforced this aspect of the case against the appellant. Mr Morris' daughter gave evidence of the concerns that his family had 47 R v Patel; ex parte A-G (Qld) [2011] QCA 81 at [136]. 48 R v Patel; ex parte A-G (Qld) [2011] QCA 81 at [137]. Hayne Bell as to whether her father was receiving sufficient nutrients. She relayed these concerns to the appellant and received off-hand responses, accompanied by advice that the nasogastric tube was working. Clearly it was not. There was evidence from a number of nurses to the effect that the appellant advised Mr Phillips' mother and sister that he was stable and improving, when he was not, and that he became upset when he learned that other medical or nursing staff had advised the family to the contrary. Similar evidence was led concerning conversations with Mr Kemps' wife, and with Mr Grave's wife and daughter. It is difficult to imagine that evidence of this kind made no impression upon the jury, which was also told in detail of the suffering of the patients and the distress that their condition caused their families. Indeed, the trial judge remarked in the course of the trial that he had observed members of the jury taking notes whilst family members of the deceased patients were giving evidence. A substantial miscarriage of justice? There can be no doubt that the evidence referred to above was highly prejudicial to the appellant and that much of it was rendered irrelevant by the narrowing of the prosecution case. Where it was relevant to issues such as causation, some of it may nevertheless have been excluded in the exercise of the trial judge's discretion had the trial been conducted on the narrower basis from the outset. The appellant was denied an opportunity to have much prejudicial evidence excluded. Despite the fact that the trial judge gave careful and succinct directions as to some of the most prejudicial evidence, such as evidence of errors in surgery, it cannot be concluded that the directions were sufficient to overcome the prejudicial effects of the evidence, individually and collectively, upon the jury. The misgivings his Honour recorded in his ruling on the application to discharge the jury were well-founded. The respondent submits, nevertheless, that there was no miscarriage of justice, in the sense of a lack of fairness to the appellant, because the appellant did not object to much of the evidence and did not seek to make it the subject of any particular directions. Certainly there must be exceptional circumstances for the Court to grant special leave to appeal where an applicant did not object at trial to the tender of evidence which is subsequently found to have been Hayne Bell improperly admitted49. Although the law recognises the possibility that justice may demand exceptions, it is a cardinal principle of litigation, including criminal litigation, that parties are bound by the conduct of their counsel50. The correctness of their counsel's decision for the most part will not be relevant, for it is the fairness of the process which is in question. Where it can be seen that a failure to object was a rational, tactical decision, the Court is entitled to conclude that no unfairness attended the process51. The appellant's counsel did take objection to the admission of the Oregon Order, the evidence relating to Mr Grave and evidence of the ventilator incident52. Objections to this evidence were taken and ruled upon before the trial commenced. The evidence relating to Mr Grave and the evidence of the ventilator incident was also identified as prejudicial and irrelevant in the application made by the defence to discharge the jury on day 44, when it was apparent that the case to be presented to the jury was much narrower than that which had been particularised and presented to that point. At that time, the appellant also identified the evidence of the patients' families as amongst the prejudicial evidence which was no longer relevant. It is true that the defence did not seek a reconsideration by the trial judge of rulings53 which had been made by his Honour and by another judge pre-trial refusing the applications by the appellant to have certain prejudicial evidence excluded. Such an application was possible54, but unlikely to succeed. Until the 49 HML v The Queen (2008) 235 CLR 334 at 361 [36], 408 [207], 459 [360], 491 50 Nudd v The Queen (2006) 80 ALJR 614 at 618 [9]; 225 ALR 161 at 164. 51 Suresh v The Queen (1998) 72 ALJR 769 at 772 [13], 773-774 [22]-[23], 780 [55]- [56]; 153 ALR 145 at 149, 151, 160; [1998] HCA 23; Ali v The Queen (2005) 79 ALJR 662 at 664 [7], 677 [98]-[99]; 214 ALR 1 at 4, 21-22; [2005] HCA 8; Tully v The Queen (2006) 230 CLR 234 at 280 [149]; [2006] HCA 56; Nudd v The Queen (2006) 80 ALJR 614 at 618-619 [9]; 225 ALR 161 at 164-165. 52 See R v Patel [2010] QSC 068; In the matter of Patel unreported, Supreme Court of Queensland, 20 March 2010 per Byrne SJA. 53 R v Patel [2010] QSC 068; In the matter of Patel unreported, Supreme Court of Queensland, 20 March 2010 per Byrne SJA. 54 Criminal Code, s 590AA(3). Hayne Bell revised particulars were provided, nothing had occurred which would have justified such an application. The difficulty that faced the defence was the width of the prosecution case as opened, which resembled a wide-ranging inquiry into the appellant's conduct, as was confirmed by the original particulars. Objection was taken to evidence which was clearly irrelevant. The rulings on this evidence appear to have been influenced by views about the width of the prosecution case. It may be that the appellant could have objected to some other evidence, such as the detailed evidence as to the demise of each of the three patients which was given by doctors, nurses and family members, or sought the exclusion of some of it on discretionary grounds. Objection perhaps should have been taken to the evidence tendered for the purpose of showing that the appellant was callous and deceitful. However, it cannot be said that such objections were assured of success, given the width of the prosecution case. In any event, it cannot be inferred that the appellant's counsel made a considered, tactical decision not to object. It is difficult to see what was to be gained by the appellant in allowing the evidence to be admitted. A careful consideration by the prosecution of the expert evidence to be tendered to prove that the appellant was not competent in the conduct of the surgery and in the provision of post-operative care ought to have revealed that the evidence could not sustain a finding to that effect, let alone a finding of gross negligence to the requisite standard. The result was that very late in the trial the prosecution was forced to acknowledge that if, on the prosecution case, the appellant were criminally liable, he might only be so in respect of his judgments. Much of the prejudicial evidence which had been tendered was not relevant to this topic. Not only had the jury been exposed to this large body of evidence, it had been exposed to it repeatedly over a long period of time and in the context of a much wider prosecution case. There has been a miscarriage of justice. Subject to consideration of the proviso to s 668E(1) of the Criminal Code, the miscarriage warrants an order for a new trial. This is not a step to be taken lightly in any case, let alone one where there has been a very lengthy trial. The need to consider such a course is brought about by the way in which the prosecution conducted its case: in tendering a body of evidence prejudicial to the appellant which could not be maintained as relevant once it had radically revised its case. Had the prosecution focused at the outset on the judgment the appellant formed about the need for or appropriateness of the surgical procedures, the trial would not have assumed the dimensions that it did and there would not have been the miscarriage of justice that occurred. Hayne Bell It remains to consider whether the proviso to s 668E(1) of the Criminal Code should be applied. Section 668E(1A) provides: "However, the Court may, notwithstanding that it is of the opinion that the point or points raised by the appeal might be decided in favour of the appellant, dismiss the appeal if it considers that no substantial miscarriage of justice has actually occurred." It cannot be concluded that there has been no substantial miscarriage of justice unless the Court is persuaded that the evidence, properly admitted at trial, proved beyond reasonable doubt the accused's guilt of the offence on which the jury returned its verdict of guilty55. The evidence presents some difficulties in concluding, to the requisite standard, that the appellant was guilty of the offences charged. According to the evidence of one expert, Mr Morris' surgery caused his death only in the sense that without it he would not have suffered the complications from which he died. There was evidence that the appellant honestly believed that the bleeding with which Mr Morris presented was from diverticula and that multiple diverticula were seen as present by another doctor in attendance when the appellant conducted a colonoscopy on this patient. Even if the appellant was not reasonable in deciding to operate because of his failure to conduct further investigations, or because there were alternatives to surgery, a conclusion of guilt would require those facts to amount to gross negligence. The case concerning Mr Phillips presents problems in establishing causation. He died of an acute cardiac arrest caused by potassium poisoning following the failure of dialysis treatment, for which the appellant was not responsible. Other doctors, including the anaesthetist who took part in the surgery, had also assessed the patient as suitable for the procedure. Further, a review of the decision to operate must take account of the type of cancer from which he suffered. As was pointed out by expert witnesses, cancer of the oesophagus has an extremely unpleasant and certain side effect, namely that at some point the sufferer will no longer be able to swallow. An oesophagectomy is often the only cure and sufferers will often undertake it for that reason. Mr Kemps also suffered from cancer of the oesophagus. The bleeding from which he suffered during surgery was not caused by the appellant. Its source was not found and could not be determined at trial. Bleeding to death is 55 Weiss v The Queen (2005) 224 CLR 300 at 317 [44]. Hayne Bell an extremely rare complication in surgery of this kind. There was evidence that, while this patient could have been suitable for the surgery, he should have been sent to Brisbane. But to find that a failure to conduct such an operation in Brisbane was causative of death would require a conclusion that the outcome would have been different had he been transferred. It was not suggested that the appellant was wrong to cease the first operation when he did, the bleeding having apparently lessened, and it was not said that he was criminally responsible because he could not stop the bleeding when he operated again. On the prosecution case at trial, whether the appellant was grossly negligent in relation to the continued bleeding depended upon his judgment in delaying the undertaking of the second operation. Whether the appellant's delay was a significant cause of death depended upon whether there could be no reasonable doubt that, had the appellant intervened earlier, Mr Kemps would have survived. A defence was raised concerning the appellant's diagnosis of Mr Vowles as suffering from bowel cancer. It was that the appellant honestly and reasonably believed, based on this patient's history in having had this form of cancer twice before, that he was most likely suffering from it. The growth was later found to be benign. It was said that there were less radical procedures which could have been undertaken. The question here would be whether the appellant's decision to undertake removal of the bowel was grossly negligent. Before reaching a conclusion as to these questions, and as to the appellant's guilt of the offences charged in the manner that Weiss v The Queen requires, it is necessary to consider the appellant's submission that the miscarriage of justice which occurred at his trial is such as to render the proviso inapplicable. In Wilde v The Queen56, it was said that the proviso has no application where there has been such a departure from the essential requirements of the law that the irregularity goes to the root of the proceedings. If that has occurred, it can be said that the accused has not had a proper trial and that there has been a substantial miscarriage of justice. Errors of this kind may be so fundamental that by their very nature they exclude the application of the proviso. Wilde v The Queen57 further explained that there is no rigid formula for determining what qualifies as such a fundamental error. In AK v Western 56 (1988) 164 CLR 365 at 373; [1988] HCA 6. 57 (1988) 164 CLR 365 at 373. Hayne Bell Australia58 and in Cesan v The Queen59, a cautionary note was sounded. It was said that what was said in Wilde v The Queen "is not to be taken as if it were a judicially determined exception grafted upon the otherwise general words of the relevant statute". What was said in Wilde v The Queen simply acknowledged a particular class of circumstances in which errors at trial are to be seen as radical60. The application of the proviso is not to be determined by reference to the form of expression used in Wilde v The Queen; it is necessary to consider in a particular case the miscarriage of justice that has been identified61. In some cases where the proviso is to be considered it will be possible to place some weight upon the fact that the jury returned a verdict of guilty62. In Cesan v The Queen this was not possible, because the jurors had been distracted when the accused gave them explanations in evidence. The jury did not then perform its task63 and the proviso was therefore held not to be engaged64. In the present case, no weight can be given to the verdicts of guilty for the reason that so much irrelevant or unnecessary and prejudicial evidence was before the jury. The miscarriage of justice was grounded in the nature, significance and extent of the evidence to which the jury had been exposed. It would be expecting too much of a jury to attend to its task of determining the appellant's guilt on the four charges on the basis only of the appellant's judgment about whether to operate, putting to one side all that it had seen and heard concerning his competencies in other areas and his deficiencies as a person. It is possible to identify those pieces of evidence which are likely to have been most damaging. The Oregon Order is clearly significant, as is the evidence of errors in the surgery itself. The Oregon Order was likely to be misused by a jury and no direction could prevent that. It should not have been admitted for any purpose. Other evidence, such as that concerning the ventilator, was 58 (2008) 232 CLR 438 at 455-456 [54]; [2008] HCA 8. 59 (2008) 236 CLR 358 at 394 [126]; [2008] HCA 52. 60 AK v Western Australia (2008) 232 CLR 438 at 456 [54]. 61 Cesan v The Queen (2008) 236 CLR 358 at 394 [126]. 62 Cesan v The Queen (2008) 236 CLR 358 at 395 [129]. 63 Cesan v The Queen (2008) 236 CLR 358 at 395 [130]. 64 Cesan v The Queen (2008) 236 CLR 358 at 396 [132]. Hayne Bell damaging to the appellant personally. However, any consideration of the effect upon the jury's ability to undertake its now more confined task must take account of the evidence as a whole. The sheer extent of the prejudicial evidence in the context of a wide-ranging prosecution case is likely to have overwhelmed the jury. The jurors were not given directions that they must exclude much of it from their minds. In practical terms any such directions would have been useless. In these circumstances it cannot be said, in the terms of s 668E(1A), that no substantial miscarriage of justice has actually occurred. The proviso does not apply. Conclusion and orders The appeal on the ground that the appellant was prosecuted under a wrong provision of the Criminal Code, s 288, should be dismissed. However, special leave to appeal should be granted with respect to the ground that there has been a miscarriage of justice, and the appeal on that ground should be allowed. The order of the Court of Appeal should be set aside and in lieu it should be ordered that the appeal to that Court be allowed, the appellant's convictions be quashed, and a new trial be had. 132 HEYDON J. Bundaberg is in Queensland. About 70,000 people live there. It is 385 kilometres from the largest city in the State, Brisbane. The appellant practised surgery at Bundaberg Base Hospital. After a trial by jury presided over by Byrne SJA, the appellant was convicted on three counts of manslaughter. They related to three patients: Mr Morris, Mr Phillips and Mr Kemps. He was also convicted of unlawfully causing grievous bodily harm to another patient, Mr Vowles. The appellant conducted a sigmoid colectomy and colostomy on Mr Morris. He performed oesophagectomies on Mr Phillips and Mr Kemps. He removed Mr Vowles's large bowel. At the trial, much attention was directed to uncharged acts of the appellant in treating another patient, Mr Grave, on whom the appellant performed an oesophagectomy. The appeal raises one question. Was the appellant charged under the wrong section of the Criminal Code (Q) ("the Code")? The answer is "No". The appellant's application for special leave to appeal raises a second question. Did a miscarriage of justice arise from, inter alia, a change in the prosecution case on the forty-third day of the trial? The answer is "Yes". Special leave should be granted in relation to the second question, and the appeal should be allowed. Section 288 of the Code The issue. The ground of appeal on which special leave was granted was: "The Court of Appeal erred in law in finding that the convictions of the appellant β¦ could be supported on the basis that the appellant had breached a duty under s 288 of the [Code]. This section did not apply to the offences of which the appellant was convicted." Section 288 provided: "It is the duty of every person who, except in a case of necessity, undertakes to administer surgical or medical treatment to any other person, or to do any other lawful act which is or may be dangerous to human life or health, to have reasonable skill and to use reasonable care in doing such act, and the person is held to have caused any consequences which result to the life or health of any person by reason of any omission to observe or perform that duty." Section 300 of the Code provided: "Any person who unlawfully kills another is guilty of a crime, which is called murder or manslaughter, according to the circumstances of the case." Putting to one side the charge of unlawfully doing grievous bodily harm to Mr Vowles contrary to s 320, the appellant was charged with manslaughter. What is "unlawful" killing? Section 291 provided: "It is unlawful to kill any person unless such killing is authorised or justified or excused by law." What is "killing"? Section 293 defined "killing" by reference to causation: "Except as hereinafter set forth, any person who causes the death of another, directly or indirectly, by any means whatever, is deemed to have killed that other person." It follows that if an accused person caused the death of another, the accused person would be guilty of manslaughter unless the killing were authorised, or justified, or excused by law. Section 288 created a duty. Breach of that duty meant that, subject to any exculpatory provision, a killing was not authorised, or justified, or excused by law. As the respondent submitted, the duty arose at the moment when a person undertook to administer surgical or medical treatment. The duty was to have reasonable skill and to use reasonable care in administering that surgical or medical treatment. What is "treatment"? "Treatment" in ordinary usage. Treatment is "[m]anagement in the application of remedies; medical or surgical application or service."65 It is "[t]he course of action adopted to deal with illness, and the control of the patient."66 It is "management in the application of medicines, surgery, etc."67 It is "medical care for an illness or injury."68 The process involved in "management", a "course of action" or "medical care" is a process which includes typical steps like taking a history, assessing symptoms, conducting a physical examination and procuring tests. Then, often later, the process can involve diagnosing the relevant condition, and giving advice as to how to deal with it, as well as carrying out any surgical or medical procedures, or supplying any drugs or medicines, conforming to that advice. As the respondent submitted, the duty to have reasonable skill and to use reasonable care arises not when surgery begins, for example, but at an earlier moment when a person "undertakes" to administer surgical or medical treatment, which occurs before those typical steps are taken. A medical practitioner who, after considering a patient's history and symptoms, advises that patient that it is desirable to undergo surgery is administering treatment to that patient. This is so whether or not the medical practitioner personally carries out the surgery. It is so whether or not the surgery takes place. Suppose a person pants heavily and habitually complains of chest pain after walking 50 metres. If someone said to that person: "You need medical treatment", it would accord with ordinary English usage for that person to reply: "I am getting it: I am seeing a cardiologist who is considering whether a course of blood pressure and cholesterol tablets will help me or whether I need an angioplasty to be performed by a cardiothoracic surgeon." The receipt of 65 The Oxford English Dictionary, 2nd ed (1989), vol 18 at 464 (meaning 3). 66 Critchley (ed), Butterworths Medical Dictionary, 2nd ed (1978) at 1740. 67 Delbridge et al (eds), Macquarie Dictionary, Federation ed (2001), vol 2 at 1999 (meaning 3). 68 Soanes and Stevenson (eds), Concise Oxford English Dictionary, 11th ed (2004) at 1536 (meaning 2). "treatment" can commence before any positive act by way of a surgical procedure takes place. The historical origins of s 288. That construction is supported by the origins of s 28869. In 1877, James Fitzjames Stephen published the first edition of A Digest of the Criminal Law (Crimes and Punishments). Article 217 provided: "It is the legal duty of every person who undertakes (except in case of necessity) to administer surgical or medical treatment, or to do any other lawful act of a dangerous character, and which requires special knowledge, skill, attention, or caution, to employ in doing it a common amount of such knowledge, skill, attention and caution." In 1878, Stephen drafted a Criminal Code based on the Digest. It was introduced into Parliament but did not pass. A Royal Commission comprising Lord Blackburn, Mr Justice Barry, Lord Justice Lush and Stephen was appointed to report on the Draft Criminal Code of 1878. It reported in 1879. It recommended the enactment of a provision (cl 162) in the following terms70: "Every one who undertakes (except in case of necessity) to administer surgical or medical treatment, or to do any other lawful act the doing of which is or may be dangerous to life, is under a legal duty to have and to use reasonable knowledge skill care and caution in doing any such act, and is criminally responsible for omitting to discharge that duty if death is caused thereby." A Draft Code as revised by the Commission was introduced into Parliament in 1880, but was not carried. Clause 158 of the Bill provided: "Every one who undertake (except in case of necessity) to administer surgical or medical treatment, or to do any other lawful act the doing of which is or may be dangerous to life, is under a legal duty to have and to use reasonable knowledge skill and care in doing any such act, and is criminally responsible for omitting without lawful excuse to discharge that duty if death is caused by such omission." 69 The Court of Appeal quoted lengthy passages from the relevant ruling of the trial judge exploring the origins of s 288 as far back as Stephen. However, these passages did not deal with the common law to which Stephen referred. See R v Patel; Ex parte Attorney-General (Qld) [2011] QCA 81 at [46] and R v Patel (2010) 202 A Crim R 60 at 63-65 [32]-[47]. 70 United Kingdom, Report of the Royal Commission Appointed to Consider the Law Relating to Indictable Offences, (1879) [C 2345] at 98. Sir Samuel Griffith modelled cl 295 of the Draft Code he prepared in 1897 on cl 158. Clause 295 provided71: "It is the duty of every person who, except in a case of necessity, undertakes to administer surgical or medical treatment to any other person, or to do any other lawful act which is or may be dangerous to human life or health, to have reasonable skill and to use reasonable care in doing such act: and he is held to have caused any consequences which result to the life or health of any person by reason of any omission to observe or perform that duty." What did Stephen mean by "treatment"? Light is cast on that question by a footnote to Art 217. Neither Art 217 nor the footnote changed in any of the editions of Stephen's Digest published in his lifetime. Nor, apart from renumbering the Article, was there any change after his death72. The footnote to Art 217 referred, inter alia, to "R v St John Long, 2nd Case"73. The accused was charged with manslaughter. The deceased occasionally experienced a choking sensation in her throat. She habitually treated this by applying a blister to her throat, thereafter dressing the wound with spermaceti ointment. The accused, however, treated her by applying a liquid to her chest which caused ulceration and eventually death. The Attorney-General, Sir Thomas Denman, in opening the case for the prosecution, said that the charge against the accused was "of applying himself to the treatment of a case of which he knew nothing, and of using a most dangerous liquid, with the effect of which, in the judgment of charity, he must be supposed to have been unacquainted."74 After argument at the close of the prosecution case, Bayley B said that the case should go to the jury. He stated: "rashness will be sufficient to make it manslaughter." He gave the following example of that kind of manslaughter: "If I have the tooth-ache, and a person undertakes to cure it by administering laudanum, and says 'I have no notion how much will be sufficient,' but gives me a cup-full, which immediately kills me"75. Laudanum is a drug capable of beneficial use. Advice that a cupful of laudanum be taken to cure toothache is negligent advice as to the proper course to be pursued in order to alleviate the 71 Griffith, Draft of a Code of Criminal Law, (1897) at 119. 72 See Sturge (ed), Stephen's Digest of the Criminal Law (Indictable Offences), 9th ed 73 (1831) 4 C & P 423 [172 ER 767]. 74 (1831) 4 C & P 423 at 424 [172 ER 767 at 767]. 75 (1831) 4 C & P 423 at 438 [172 ER 767 at 773]. condition. It is also negligent administration of a medicine. This is the case even though if laudanum were properly administered it could have alleviated the condition. Stephen's footnote also referred to "cases collected" in Russell on Crime76. Five of them will be considered. In R v Crook77, the deceased suffered from a cancer on his face. The accused informed the deceased that he could cure him. He applied corrosive sublimate to the cancer β a substance sometimes applied in small quantities to wounds, but dangerous if applied to a large skin surface. Watson B "directed the jury to find the prisoner guilty if they considered he took upon himself the responsibility of attending to a patient suffering under cancer, when he, the prisoner, was not qualified for the purpose."78 As with R v St John Long, the decision to advise a particular method of treatment was a negligent act distinct from the negligent administration of a substance pursuant to that method. The negligent decision of the accused to attend to the deceased's cancer was thus regarded as sufficient to constitute manslaughter, even if the negligent way the patient was attended were put to one side. In R v Webb79, the accused, a publican, was an agent for the sale of Morison's Pills. Morison's Pills had some medical value, apparently as a purgative. The accused advised a victim of smallpox to take large quantities of Morison's Pills. The victim died. There was evidence that "medicine of the violent character of which the pills were composed, could not be administered to a person in the state in which the deceased was, without accelerating his death."80 "if a person not acquainted with the medical art, administers to a person labouring under a serious disease, and death ensues from such administering, it is manslaughter. So, if such person administer medicine, of the nature of which he is ignorant, and such medicine causes death." 76 Prentice (ed), Russell's A Treatise on Crimes and Misdemeanors, 5th ed (1877), vol 1 at 672-673. Stephen referred to 572-573, but this was a slip. 77 (1859) 1 F & F 521 [175 ER 835]. 78 (1859) 1 F & F 521 at 522-523 [175 ER 835 at 836]. 79 (1834) 2 Lew 196 [168 ER 1127]. 80 (1834) 2 Lew 196 at 209-210 [168 ER 1127 at 1131]. 81 (1834) 2 Lew 196 at 211 [168 ER 1127 at 1131]. Hence to advise a person to adopt a particular medical course which causes that person's death can be manslaughter. In R v Markuss82, a herbalist advised the daughter of a woman suffering from back pain and a cold, and weakened by heart disease, to prepare and administer to her mother a mixture of brandy and colchicum seeds. The woman died two days later. Her death was caused by gastritis induced by an overdose of colchicum seeds and by exhaustion resulting from her heart disease. Willes J said to the jury that one type of gross negligence: "consisted in rashness, where a person was not sufficiently skilled in dealing with dangerous medicines which should be carefully used, of the properties of which he was ignorant, or how to administer a proper dose. A person who with ignorant rashness, and without skill in his profession, used such a dangerous medicine acted with gross negligence β¦ If a man knew that he was using medicines beyond his knowledge, and was meddling with things above his reach, that was culpable rashness."83 In R v Bull84, the accused medical practitioner was charged with manslaughter after advising a patient to take, and providing her with, prussic acid. It was not clear how much prussic acid the patient had ingested before her death. The accused maintained that he had given the patient four drops. This amount was understood to be appropriate treatment. Cockburn CJ said85: "If a person takes upon himself to administer a dangerous medicine, it is his duty to administer it with proper care; and if he does it with negligence he is guilty of manslaughter. But do the facts here show such culpable negligence on the part of the prisoner? If, indeed, the prisoner had given the deceased all that was missed from the bottle, it would be so, for the quantity would have been so large that it must have been the grossest negligence. But the cork was found broken and half out of the bottle, so that it is impossible to say how much of the poison might not have escaped; or again, the cork being half gone, the liquid might have dropped faster than the prisoner supposed, and, if so, 82 (1864) 4 F & F 356 [176 ER 598]. 83 (1864) 4 F & F 356 at 358-359 [176 ER 598 at 599]. 84 (1860) 2 F & F 201 [175 ER 1024]. 85 (1860) 2 F & F 201 at 202 [175 ER 1024 at 1024]. it would not be such culpable negligence as would make him criminally responsible." In R v Chamberlain86, a woman had a tumour on her shoulder. The accused, a herbalist, advised her to rub arsenic-based ointment on it. The woman died of arsenic poisoning. There was evidence that arsenic-based ointment had been used up to the last 30 years in England. It continued to be used on the Continent as an "heroic" method of treating hopeless cases. Blackburn J directed the jury that: "if the prisoner administered the arsenic, without knowing, or taking the pains to find out, what its effect would be, or if, knowing this, he gave it to the patient to be used, without giving her adequate directions as to its use, there would, in either view of the case, be culpable negligence"87. The authorities to which Stephen referred support the view that at common law an accused could be guilty of manslaughter for rashly advising or carrying out the administration of substances and the use of procedures. It might be rash because the person who administered the substances, used the procedures or commended them to the patient was not a person competent to do so. It might be rash because the substance or procedure, while having some safe and useful applications, was dangerous in other applications, either in itself or because of the patient's condition. Whether or not the modern law of manslaughter corresponds in every respect with the mid-19th century common law is immaterial. The question is what the common law then viewed as "treatment". The widest versions of the case alleged against the present appellant β that the patients should not have been operated on at all; them at Bundaberg Base Hospital; that he conducted the operations without having reasonable skill or using reasonable care; or that he supervised post-operative care without having reasonable skill or using reasonable care β all fall within the conception of "treatment" revealed in the common law authorities. that he should not have operated on The appellant's argument on s 288 assumes that there is a clear and water-tight division between negligent advice to undergo a procedure (either at all, or at a particular person's hands) and negligent conduct of that procedure in all circumstances. In many factual contexts there is such a division. But in some there is not. In some there is an overlap between the category which the appellant submits is outside s 288 and the categories which the appellant accepts are within it. To say: "I advise you to take these pills", where in fact they are 86 (1867) 10 Cox CC 486. 87 (1867) 10 Cox CC 486 at 488. lethal, may reflect gross negligence in the advice and also in the preparation of the pills. It is artificial to separate them. Section 288 can be traced back to Stephen's Art 217. In Art 217, Stephen was stating his perception of the common law. It may be inferred that the meaning of "treatment" in s 288 corresponds with the common law. It is true that the Code is to be interpreted according to its terms without resort to any presumption that its provisions reflect the common law88. But the above reasoning is not resorting to that presumption. Nor does the above reasoning adopt the forbidden course of finding out how the law stood before the Code, and then seeing if the Code will bear an interpretation which will leave the law unaltered89. Instead the above reasoning depends on the fact that the original source of s 288 was modelled on the common law. The Code replaced the common law. But in many places, one of which is s 288, it was modelled on a series of earlier Codes. The first of those Codes adopted the common law. The appellant's submissions. The appellant advanced several submissions against the construction urged by the respondent and accepted above. The appellant's first submission was that the words creating a duty to have reasonable skill and use reasonable care "in doing such act" in s 288 referred to an act of performing surgery or an act involving non-surgical medical conduct. The appellant described his construction of s 288 as "perfectly plain". But an "act" can be the giving of advice. The appellant's second submission was that "when the Code intends to refer to a decision to operate it does so, as in s 282, and that no such intention is revealed in s 288." However, ss 282 and 288 perform different functions. Section 282 is in Ch 26 of the Code. Chapter 26 is headed: "Assaults and violence to the person generally β justification and excuse". Section 288 is in Ch 27. Chapter 27 is headed: "Duties relating to the preservation of human life". It is dangerous to draw much from formal differences in the language of the two sections. Further, the field of operation of s 282 is narrower than that of s 288. Section 282 refers to "a surgical operation". Section 288 concerns undertakings "to administer surgical or medical treatment β¦ or to do any other lawful act which is or may be dangerous to human life or health". As the Court of Appeal said, the contrast is an insufficient ground for reading s 288 down. The appellant's third submission was that the construction adopted by the trial judge and the Court of Appeal failed to give significance to the word "lawful" in the expression "or to do any other lawful act" in s 288. He submitted: 88 R v Barlow (1997) 188 CLR 1 at 18; [1997] HCA 19. 89 Brennan v The King (1936) 55 CLR 253 at 263; [1936] HCA 24. "The section is premised upon the decision to operate, logically anterior to the performance of the surgery, being lawful. It does not make sense that the section could be attempting to cover criminally reprehensible decisions to operate as they, by definition, could not be lawful." (emphasis in original) The answer is that the words "any other lawful act" refer to acts which are lawful provided that the actor has reasonable skill and uses reasonable care. The words exclude punches or the throwing of glass bottles, for example. The appellant's fourth submission was that s 288 should be given the "most lenient construction" in the event of ambiguity. There is no relevant ambiguity. In his fifth submission, the appellant criticised the process of construing s 288 widely in order to prevent impunity attaching to wanton decisions to operate. He submitted that "it is not a correct principle of interpreting the Code β¦ to strain unreasonably the meaning of a plain provision to make it accommodate extreme, hypothetical examples of medical misconduct." If the trial judge or the Court of Appeal had adopted that type of reasoning, the submission would have been right to criticise it. But the trial judge and the Court of Appeal did not adopt that type of reasoning. The conclusion that s 288 catches decisions to operate can be supported without recourse to that type of reasoning. Finally, the appellant submitted that to construe s 288 as applying to a decision to undertake unnecessary surgery meant that there was a duty to have reasonable skill and to use reasonable care "in doing" conduct which should not be done. This, the appellant submitted, was so odd as to point against that construction. The submission reads "treatment" too narrowly. "Treatment" is not limited to the physical manipulation of instruments involved in surgery. It includes earlier advice to undergo surgery. It includes post-operative care. It also includes advice not to undergo particular forms of surgery or to receive particular forms of post-operative care. Hence the respondent's submission that s 288 extends to advice about whether surgery should be undertaken is correct. Miscarriage of justice: the procedural history In order to understand the arguments relating to miscarriage of justice, it is necessary first to examine the procedural history of the trial. Separate trials. The indictment presented on 24 April 2009 put first things first. It charged the appellant with eight counts of dishonestly gaining or attempting to gain a financial benefit contrary to s 408C(1)(d) and (2)(d) of the Code. The young Hayden Starke would have applauded this decision to place important questions of dollars and cents ahead of mere manslaughter matters90. An order was, however, made for a separate trial on the dishonesty charges. The balance of the indictment contained the charges on which the appellant was convicted and two further alternative charges of causing grievous bodily harm to a patient. Those two charges were dropped before the trial began. Inherent problems in the trial. The circumstances of the trial created considerable difficulties for the jury. One problem was that a great deal of the evidence called was technical and scientific in nature. It was therefore not always easy to understand. Further, the prosecution's testimonial modus operandi lay to a large extent in taking many of the witnesses through the medical records of each patient, line by line. Some of these witnesses had made the relevant entries. Some were familiar with the system by which the entries were made. Some were experts whose opinions were sought on the facts which the records supposedly revealed. The prosecution case thus involved much repetition. A lot of the evidence about what happened during and after the operations was potentially prejudicial. Some jurors may not have fully appreciated that surgery conducted by surgeons who have a high degree of skill and use a high degree of reasonable care is often startling, even grisly, to those who have not experienced it before. This is particularly so where the patient is already very unwell. The prosecution has a duty to call all relevant witnesses. But that duty is subject to the dictates of fairness towards the accused91. It was necessary β though by no means easy or straightforward β for the prosecution to discriminate between what was strictly relevant and what was arguably not strictly relevant. That consideration made it important that precise particulars be provided, and that evidentiary tenders conform to them. There was a risk that the techniques the prosecution employed would build up among the jurors two feelings. One was that the patients had experienced terrible suffering. The other was that for this suffering someone should pay. In short, the evidence was prejudicial in two senses β the jury was "likely to give the evidence more 90 Cf the start of the prosecution's final address. It quoted words attributed to the appellant by a nurse: "Don't you think the community's lucky to have someone like me? I've brought a lot of money to the hospital. I've increased its activity. Are you aware of these things ...?" The address went on: "to focus on money after these disastrous outcomes is a misplaced priority". 91 R v Apostilides (1984) 154 CLR 563 at 575-576; [1984] HCA 38. weight than it deserve[d]" and "the nature or content of the evidence [might have inflamed] the jury or divert[ed] the jurors from their task."92 A second problem was that the charges concerned four different patients. The evidence on each patient was treated as cross-admissible similar fact evidence. In addition, similar fact evidence of uncharged acts relating to another patient, Mr Grave, was tendered. In Pfennig v The Queen, McHugh J gave reasons for the general exclusion of similar fact evidence. Some of the reasons are material in this case93: "One reason is that it creates undue suspicion against the accused and undermines the presumption of innocence. Another is that tribunals of fact, particularly juries, tend to assume too readily that behavioural patterns are constant and that past behaviour is an accurate guide to contemporary conduct. '[c]ommon assumptions about improbability of sequences are often wrong', and when the accused is associated with a sequence of deaths, injuries or losses, a jury may too readily infer that the association 'is unlikely to be innocent'. Another reason for excluding the evidence is that in many cases the facts of the other misconduct may cause a jury to be biased against the accused". (footnotes omitted) Similarly, Thirdly, the charges were serious. The appellant was sentenced to concurrent terms of seven years' imprisonment for each conviction of manslaughter and three years' imprisonment for grievous bodily harm. The charges therefore needed to be examined with particular care. Then there were the problems flowing from adverse publicity. The prosecution approach to the trial resembled that of a commission of inquiry conducting a very broad survey. The appellant's conduct had already been the subject of two commissions of inquiry. There were proceedings to extradite him from the United States of America. It is difficult to imagine that there could be many speakers of English living in Australia, even parts of Australia outside Queensland, in the years before the trial who had not been exposed to the massively unfavourable publicity that the appellant received during these events. It was inflammatory, derisive and bitter. Its effect must have been more intense, and therefore more damaging, in Queensland than elsewhere. The trial judge warned the jury not to be influenced by it. Counsel referred to it during the trial without contradiction. In his address to the jury, defence counsel spoke of "a frenzied media storm" against the appellant over a five-year period. In 92 Festa v The Queen (2001) 208 CLR 593 at 609-610 [51] per McHugh J; [2001] HCA 72. 93 Pfennig v The Queen (1995) 182 CLR 461 at 512-513; [1995] HCA 7. Queensland, the appellant was seen as a hostis humani generis. The appellant's counsel informed this Court that if the appeal succeeded the appellant would be seeking a stay on that ground. It may be inferred from the pre-trial publicity that there was great pressure on the prosecution to put the case against the appellant on its widest possible basis. "There is an accumulative Cruelty in a number of Men, though none in particular are ill-natured. The angry Buzz of a Multitude is one of the bloodiest Noises in the World."94 The prosecution called witnesses who loathed the appellant. Some of the nurses appeared to come to the trial determined to tell all, and to tell it colourfully. The risk of prejudice was thus very great. Whether prejudicial evidence should be admitted became a peculiarly sensitive question. The need for particulars. In Johnson v Miller, Dixon J said that an accused person "is entitled to be apprised not only of the legal nature of the offence with which he is charged but also of the particular act, matter or thing alleged as the foundation of the charge."95 A representative instance of how the indictment expressed each manslaughter charge is count 9: "between the first day of April, 2003 and the fifteenth day of June, 2003 at Bundaberg in the State of Queensland, [the appellant] unlawfully killed [Mr Morris]." Count 9 raised many queries. In what circumstances did the unlawful killing take place? Had Mr Morris died in a fight with the appellant? Or had Mr Morris been run over by the appellant? No doubt the jury soon understood that the prosecution concerned the much-publicised behaviour of the appellant towards his patients. But what was the particular act, matter or thing which was alleged as the foundation of the charge? Was it a decision that Mr Morris should be operated on at all? Was it the decision of the appellant that he should operate? Was it some careless act or failure to act while performing the surgery? Was it some careless act or failure to act while providing and advising on post-operative care? The 19th century cases to which Stephen referred96 generally left a reader of the indictment in no doubt as to what the allegedly unlawful conduct was. The criminal procedure of those 94 George Savile, Marquis of Halifax, A Character of King Charles the Second, 95 (1937) 59 CLR 467 at 489; [1937] HCA 77. See also S v The Queen (1989) 168 CLR 266 at 286-287; [1989] HCA 66 and R v Carr [2000] 2 Cr App R 149 at 96 See above at [140]-[147]. days is often denigrated today, but in this respect at least it seems to have been much superior. In Johnson v Miller, Evatt J said97: "It is an essential part of the concept of justice in criminal cases that not a single piece of evidence should be admitted against a defendant unless he has a right to resist its reception upon the ground of irrelevance, whereupon the court has both the right and the duty to rule upon such an objection. These fundamental rights cannot be exercised if, through a failure or refusal to specify or particularize the offence charged, neither the court nor the defendant (nor perhaps the prosecutor) is as yet aware of the offence intended to be charged." to make particular But the importance of particulars does not lie only in relation to questions of inadmissibility for irrelevance. Particulars can also be necessary to enable the the defence cross-examination of prosecution witnesses. Others concern the marshalling and deployment of its own evidence98. Parts of the trial record, incidentally, suggest that the present case may, with respect, illustrate Evatt J's point that without particulars the prosecution can be as unsure of the case being run as is the court and the defendant. Some concern judgments. forensic In pleading civil cases there is a distinction between the "necessary" particulars of allegations like fraud, which ought to appear in the pleadings themselves, and other particulars, which need not appear in the pleadings but must be supplied if requested. "[It is] anomalous and wrong that a case against a defendant should be spelled out with less particularity when he stands in the dock accused of [homicide] than when he resists a claim for compensation."99 The nature and seriousness of the charges levelled at the appellant obligated the prosecution to provide some particulars either in the indictment itself or at least well before the trial. The particulars issue before the trial. In the period before a pre-trial hearing on Saturday 20 March 2010, two days before the trial started, the 97 (1937) 59 CLR 467 at 497-498. 98 R v Carr [2000] 2 Cr App R 149 at 157. 99 R v Carr [2000] 2 Cr App R 149 at 157 per Lord Bingham of Cornhill CJ (Scott Baker and Curtis JJ concurring). prosecution had supplied no particulars of any of the charges. None had been ordered pursuant to s 573 of the Code100. None had been ordered pursuant to the inherent power of the Court101. On 20 March 2010, a hearing took place before the trial judge. Particulars were discussed. The trial judge expressed surprise at the lack of particulars. Defence counsel informed the trial judge that he had earlier submitted that particulars needed to be supplied β in the course of committal proceedings and in the course of pre-trial hearings about the admissibility of evidence before a judge other than the trial judge. The pre-trial hearings before that judge were conducted on 16 June 2009 and 9 March 2010. Prosecution counsel did not protest at or contradict what defence counsel said. Prosecution counsel said that the defence was content for him to open the case and provide particulars in the course of the opening. The opening. On the first day of the trial, 22 March 2010, the appellant was arraigned. The jury was empanelled. Prosecution counsel opened the case102. The opening began by alleging that the appellant's decision to operate on the four patients breached s 288. Later, the opening alleged that Mr Morris's death had also been caused by the defective surgical method the appellant employed and by the unsatisfactory post-operative care the appellant provided. An early debate about particulars. At the end of the first day, after releasing the jury, the trial judge turned to particulars. He said: that have been foreshadowed about "The other thing that occurs to me from the opening is that at some stage β I hope not too far away β the particulars that were discussed [on 20 March 2010] will need to be reduced into writing. The large number of complaints the surgery and postoperative care in respect of Mr Morris indicate to me that it will be necessary to identify with some care, especially in cases where the cause of death may be doubtful, precisely what acts or omissions are said to have brought about the death. I am particularly concerned about the prospect of a number of alternative scenarios being left to the jury at the end of the day about acts or omissions that may or may not be 100 It provided: "The court may, in any case, if it thinks fit, direct particulars to be delivered to the accused person of any matter alleged in the indictment, and may adjourn the trial for the purpose of such delivery." 101 Johnson v Miller (1937) 59 CLR 467 at 497. 102 Counsel who led for the prosecution at the trial (apart from a brief appearance by the Solicitor-General of the State of Queensland) and in the Court of Appeal did not appear in this Court. Counsel who led for the appellant at the trial did not appear in the Court of Appeal or in this Court. Counsel who led for the appellant in the Court of Appeal did not appear in this Court. characterised as criminal negligence, and if any are, which, if any, of those is shown to have caused the death." Prosecution counsel did not demur. Defence counsel said: "My concern is that's the first time I have heard them particularised." After prosecution counsel offered a further explanation as to how the various complaints made in the opening related to the causes of the deaths, the trial judge said: "I have a feeling that before the addresses begin, some refinement will be necessary. In any event, we shall see how things progress." Defence counsel then expressed concern that he would need the particulars "sooner rather than later with a view to cross-examining". The trial judge indicated that the prosecution had made at least 10 complaints about the appellant's treatment of Mr Morris in its opening. His Honour foreshadowed the possibility that the prosecution would present to the jury numerous alternative theories as to which particular factors, in isolation or in combination, caused Mr Morris's death. Prosecution counsel then said of the complaints: "The number of them is not a criticism of the Crown, it's a criticism of the [appellant]." The trial judge pointed out the need for the prosecution to isolate instances where it claimed that the appellant had exhibited a lack of care which allegedly caused death. Prosecution counsel then said: "the Crown is not inclined to leave itself in the position where the defence can say, 'Well, you pick one and we'll pick the other', and that's why β and it's really a consequence of the generally substandard treatment of this patient." The trial judge then replied: "It can't be left to the jury on the basis that there's a litany of things that went wrong and then leave it to the jury to pick and choose which of them might matter to a case of unlawful killing." Prosecution counsel answered: "Well, that's a consequence not of the Crown's choosing, but of what he did." The trial judge responded: "We shall see." In this exchange and in other, similar, later exchanges, the trial judge perceptively foresaw the troubles which would later plague the trial. Further consideration of particulars. On the second day, Tuesday 23 March 2010, the opening concluded. The prosecution began to call evidence. It called the evidence relating to Mr Morris before the evidence relating to each of the other patients. On the fifth day of the trial, Friday 26 March 2010, defence counsel told the trial judge that prosecution counsel had supplied him with what he understood to be "draft particulars" of the case concerning Mr Morris. This had happened, according to prosecution counsel, some days earlier. The document was handed to the trial judge. The transcript then attributes to his Honour the expression: "Mmm". Prosecution counsel then said: "Your Honour, it troubles me with the β your Honour just expressed some concern, I thought." The trial judge agreed. But his Honour said that it was a matter for defence counsel to decide whether he wished to take issue with the particulars. However, after an intervention by prosecution counsel, the trial judge made a lengthy critique of the particulars. His Honour especially criticised their failure to state any causal connection between the alleged omissions of the appellant and the death of Mr Morris. Prosecution counsel and the trial judge both attributed this deficiency to the fact that the particulars had been supplied independently of any specific request from the defence. Defence counsel agreed that he wanted particulars meeting the deficiency. It was left to counsel for both parties to see what progress could be made before the sixth day of the trial, Monday 29 March 2010. Before the start of that day, particulars in relation to Mr Morris were supplied to defence counsel in a non-draft form. Defence counsel then asked for particulars in relation to Mr Phillips's death. The trial judge said that judging by the particulars, the trial "is about to become considerably more difficult." His Honour said that if the particulars for the other patients were going to be like those for Mr Morris, the trial would become "unmanageable". On the seventh day of the trial, Tuesday 30 March 2010, the trial judge indicated that he was still concerned about whether any of the complaints made against the appellant could be causally connected to Mr Morris's death. His Honour queried whether there were over a dozen alternative cases pleaded. At the start of the ninth day, Thursday 1 April 2010, defence counsel complained about a disparity between the evidence of an expert witness given at the trial in relation to a particular invasive procedure and that given by the same witness at the committal hearing. The trial judge remarked: "Why does any of it matter? By the sound of it, when finally the case is pared down it can be left to the jury in a digestible form, the essence of it is going to be that it was criminally negligent to conduct the operation at all." The trial judge foresaw that the case against the appellant would eventually turn on his decisions to operate, rather than on deficiencies in how he performed those operations or in the post-operative care he provided. A little later his Honour said: "I don't know if it is going to assume any significance at the end of the case. I am rather optimistic, as I say, that it will be reduced to a form that is manageable in a jury trial." Defence counsel judge had earlier foreshadowed, "a lot of mud" was being thrown in the course of the evidence. The trial judge responded: then complained that, as trial the "I grant you that it is hard for you in a case where, as you put it a little figuratively, every piece of mud that can be thrown is. And you may be right. My optimism that it will be pared back by the time it goes to the jury to a digestible case capable of rational assessment may prove to be unduly optimistic. You might still be confronted [with] a welter of additional or alternative allegations. And it looks as though the prosecution wishes to conduct the case on the basis that in respect of those acts or omissions which are said to have caused the death, whether they bear the character of such a substantial departure that they should be characterised as criminal negligence, can be informed by whether other mistakes were made, which at the moment seems to me to be an unlikely proposition, but [prosecution counsel] has said that's to be advanced." The first application to discharge the jury. At the start of the tenth day of the trial, Tuesday 6 April 2010, defence counsel applied for a discharge of the jury. He applied on the ground that no particulars had been supplied, save for the convoluted particulars in relation to Mr Morris. The trial judge challenged defence counsel: "How can you complain about that, you didn't ask for them?" The defence had in fact pressed for them before the trial. And even if they had not been asked for by means of specific requests for particulars, they were asked for on the first and fifth days. The following exchange then took place. It commenced with an affirmative but ambiguous answer to the trial judge's question. "[DEFENCE COUNSEL]: Well, we β that's true, but we didn't expect them to be as convoluted, if I may respectfully say so, as what they appear to be achieving in the case of Morris. We were told β or we heard on Friday, or Thursday, I should say that, indeed, in respect to Morris it's probable that those particulars will themselves change. HIS HONOUR: In the sense that they are likely to be narrowed. So that by the time the addresses begin, the prosecution will have a more confined and digestible case to put to the jury, reducing the number of alternatives tiffs." (emphasis added) In the course of argument, it emerged that the discharge application was not based solely on the deficiencies in or the absence of particulars. It was also based on the tender by the prosecution of inadmissible evidence. The defence had had no notice of that evidence. But it had not objected to its admission. The application metamorphosed into an application for an adjournment. The purpose of that adjournment would have been to "put in place a tightly controlled Court managed schedule" in relation to final particulars. In argument, the trial judge opposed the complaint about particulars. His opposition flowed from the lateness with which the matter had been agitated. Counsel for the defence admitted to a possible lack of diligence. But he denied that there was any tactical motivation behind the failure to seek particulars early. The trial judge did express disquiet about the volume of complaints in the particulars, and their broad and indefinite expression. He again foresaw that by the time of its final address the prosecution might abandon some of the alternatives in its particulars. The trial judge rejected the inadmissible evidence complaint on the ground that the evidence had not been objected to. The particulars relating to Mr Phillips. On the tenth and eleventh days of the trial, the trial judge and defence counsel had pressed for final particulars in relation to Mr Phillips. On the twelfth day, Thursday 8 April 2010, the trial judge read those particulars. His Honour said: "Oh, dear." On the twentieth day, Thursday 22 April 2010, the trial judge declared that he was "completely befuddled" by the prosecution case. On the twenty-first day, the trial judge challenged the prosecution to produce authorities that supported the proposition that "you can bolster a case to characterise an act or omission as gross by reference to some other act or omission not shown to have any ... causal connection with the death." His Honour foreshadowed the possibility that "we may ... be confronting, 10 weeks down the track, an application to discharge without verdict because the jury will have heard so much that can't ultimately be left to them ... I remain very troubled by the idea that you can prove a case against this surgeon by finding every little criticism that can be mustered and saying, 'Things could have been done differently.'" The trial judge's further complaints about particulars. the twenty-second day of the trial, Tuesday 27 April 2010, the trial judge asked: "How much more complicated can the case be made?" On the twenty-sixth day, Tuesday 4 May 2010, the trial judge expressed concern about the large litany of complaints that the prosecution had made against the appellant. His Honour drew attention to the "myriad number of alternative cases that [had been] propounded". On the same day, the trial judge referred again to the prosecution's optimism that by the time the evidence had concluded, the range of alternative cases for the jury would have narrowed. On the thirtieth day, Wednesday 12 May 2010, prosecution counsel tendered some evidence as part of the res gestae. Counsel was either remembering or forgetting Lord Blackburn's dictum: "If you wish to tender inadmissible evidence, say it is part of the res gestae"103. The trial judge said: "Enough of things that have nothing to do with what may have caused the death. It is not a third Commission of Inquiry. A man is standing trial on very serious charges on the footing that he is criminally responsible for these consequences. The idea that we should have roving investigations into every little thing he is said to have done imperfectly is most unattractive." 103 According to Cross on Evidence, 5th English ed (1979) at 43 n 13. On the thirty-fifth day of the trial, Wednesday 19 May 2010, the trial judge repeated his prediction that by the time the case went to the jury, there would be particulars that identified acts or omissions that were allegedly both negligent and causative of death. On the thirty-sixth day of the trial, Monday 24 May 2010, the trial judge said that he remained "concerned at the extent of the evidence adduced of acts or omissions which are the subject of criticism, but which are not shown to be connected with a surgical outcome." His Honour also stated: "We keep hearing a great deal of criticisms, and at the moment I remain, as I have been for many weeks, concerned that this may be putting a fair trial at risk." Prosecution counsel submitted: "If it is necessary for the prosecution to prove that what was done was, in broad terms, gross beyond the meaning of negligence, then the prosecution says it can do so by looking much more widely than just the narrow focus". The trial judge replied: "I remain to be persuaded of the proposition that you can demonstrate that a particular act or omission bears the character of criminally culpable negligence by reference to other acts or omissions that are disconnected with a pertinent event". Even at that stage, prosecution counsel maintained that the appellant had failed to have reasonable skill and to use reasonable care before and during the operation on Mr Grave, and that these uncharged acts were relevant to the charges in the indictment. On the thirty-eighth day of the trial, Wednesday 26 May 2010, the particulars relating to Mr Vowles were handed up. The trial judge said: "What concerns me, still concerns me, is the state of the particulars, but I've borne in mind your optimism that by the time the case is left it will be considerably narrowed. ... I'm, frankly, struggling to see how we will move past the particulars to a digestible case. Anyhow, we shall see how these things develop." The following day, the thirty-ninth day of the trial, the trial judge extensively criticised the particulars provided in relation to Mr Vowles. His Honour said that if they were a civil pleading, they would be struck out as not disclosing a reasonable cause of action. The oral evidence called by the prosecution came to an end. The emergence of the revised particulars. On the forty-second day of the trial, Friday 4 June 2010, prosecution counsel informed the trial judge that the defence wanted some refinement of the particulars. The trial judge said of the prosecution's proposed approach: "To me, it just sounds like throwing a welter of prejudicial material at the jury and saying, 'Even if logically the Crown can't show a connection between a decision to remove a colon that is not cancerous and whether or not he can insert a central venous line, nonetheless you can take that into account.' Can he read a CT scan? If it's got nothing whatsoever to do with the particular surgery, how could a jury logically say, 'Because he has difficulty reading a CT scan that has something to tell you about the degree of culpability involved in taking out a colon where there isn't a cancer'? I can't see it." His Honour added: "It sounds as though the Crown is very anxious to over-egg the pudding and to throw β well, we have been over this before β every little piece of mud in the hope that some will stick." On the forty-third day, Monday 7 June 2010, revised particulars were handed up. In the trial judge's view, they abandoned the prosecution's complaints about the appellant's incompetence in performing surgery and in providing post-operative care. On the forty-fourth day, Tuesday 8 June 2010, the trial judge remarked that he did "not find even looking at [the original particulars] an appealing exercise they are so bad." In contrast, the trial judge described the revised particulars as a "vast improvement", as "sensible", and as "considered". The trial judge asserted that the delivery of the revised particulars meant that the trial "is not just a mud-slinging exercise anymore." His Honour also asserted that for "the first time in the trial [defence counsel] has comprehensible particulars that make sense." Even though the appellant agreed with this praise, with respect, for reasons set out below104, if the revised particulars are read in a certain way, these are questionable propositions. If they are read another way β as the trial judge appeared to in his summing up β they are sounder propositions. However, one thing is plain. If so experienced and capable a criminal lawyer as the trial judge found the original particulars incoherent and confusing, the jury must have been in a much worse position. The second application to discharge the jury. On the forty-third day, Monday 7 June 2010, defence counsel agreed to attempt to identify the items of evidence which were not admissible in the light of the revised particulars. On the forty-fourth day, Tuesday 8 June 2010, he supplied a non-exhaustive schedule of transcript references to that evidence. And he again applied for a discharge of the jury. The primary ground of the application was that much of the evidence admitted at the trial was not admissible on the case the revised particulars 104 See below at [196]-[202]. propounded. The trial judge accepted a submission by the prosecution that evidence of bad surgery performed by the appellant was relevant to whether he knew he was a bad surgeon. This, in turn, went to proving that he was morally culpable in advising that he should perform surgery. The trial judge accepted defence counsel's argument that the evidence could be unfairly prejudicial. But his Honour pointed out that the defence had not objected to most of it. Of course, at the time an objection could have been made, the particulars were different in very significant respects. His Honour concluded that if any evidence were admissible only in relation to one or more particular charges, or might be used only for a limited purpose, that could be dealt with by counsel identifying those items of evidence and by appropriate directions to the jury. In contrast, the trial judge had said the day before: "we'll now have a lot of material in, for example β a lot of it β about malnutrition and scout nurses who were inexperienced ... [t]hat has nothing to do with the case that's to go to the jury." The appellant's complaints The original particulars attacked the appellant in three ways. First, they attacked the appellant for incompetent decisions to operate on the patients. Secondly, they attacked him for performing the actual surgery incompetently. Thirdly, they attacked him for giving incompetent post-operative care. The appellant submitted that the revised particulars pursued the first line of attack only. The appellant's principal point was that the change to the particulars caused much of the evidence which was relevant or arguably relevant under the original particulars to become irrelevant. The appellant grouped the evidence of which he complained into four categories. One was evidence of allegedly incompetent surgery. Another was evidence of incompetent post-operative care. The third category was evidence calculated to call the appellant's integrity and professionalism into question. The final category was graphic and emotional evidence about the patients' pain and suffering and the consequential distress of their families and friends. The trial judge said he had noticed many jurors taking notes of this fourth category of evidence. He went on to say that the evidence of family members was "[f]requently about matters that might have seemed to lawyers to have little or no relevance to the case but which might be thought to engage the emotions rather than reasoning faculties." In broad terms, the appellant's submissions should be accepted. Before going to the detail of the appellant's submissions and why they should be accepted, however, it is desirable to analyse the revised particulars. General problems with the revised particulars The revised particulars summarised. In seeking to understand the particulars, it is necessary to bear in mind the order in which the relevant operations occurred. On 19 May 2003, the appellant operated on Mr Phillips. On 21 May 2003, Mr Phillips died. On 23 May 2003, the appellant operated on Mr Morris. On 6 June 2003, the appellant operated on Mr Grave. On 14 June 2003, Mr Morris died. On 4 October 2004, the appellant operated on Mr Vowles. On 20 December 2004, the appellant operated on Mr Kemps. Later that day, the appellant operated on Mr Kemps for the second time. Mr Kemps died the next day. The particulars in their final form relied on this chronology in the following way. In relation to Mr Morris, the revised particulars alleged that one reason why the surgical treatment (a sigmoid colectomy and colostomy) was wrongly undertaken was that the appellant knew or ought to have known of his limitations as a surgeon because of his treatment of Mr Phillips (an oesophagectomy). The original particulars in relation to Mr Grave were never revised. They alleged that the appellant was negligent in deciding to operate, in the actual conduct of the operation, and in providing post-operative care. They also alleged that "the facts concerning the treatment and death of [Mr] Phillips show that the [appellant] lacked reasonable skill and reasonable care to perform oesophagectomies and show that such operations should not be performed at the hospital and these facts should have been apparent to the [appellant]." Even though the operation on Mr Grave (oesophagectomy) took place two weeks after the operation on Mr Morris, the prosecution placed no reliance on any "facts concerning the treatment" of Mr Morris. The revised particulars in relation to Mr Vowles alleged that one reason why the surgical treatment (removal of large bowel and rectum, and ileostomy) was wrongly undertaken was that the appellant knew or ought to have known of his limitations as a surgeon because of his treatment of Messrs Phillips and Grave (each oesophagectomies) and Mr Morris (sigmoid colectomy and colostomy). And the revised particulars in relation to Mr Kemps alleged treatment (oesophagectomy) was wrongly undertaken was that the appellant knew or ought to have known of his limitations as a surgeon because of his treatment of Messrs Morris, Phillips, Grave and Vowles. They also alleged that the appellant knew or ought to have known of the limitations of the hospital as a facility because of the outcomes for Messrs Phillips and Grave. These allegations may be described as the "lessons of experience" particulars. that one reason why the first surgical The four sets of revised particulars and the unrevised particulars about Mr Grave created two related problems. Time problems in relation to Mr Phillips and Mr Kemps. One problem appears in the revised particulars pertaining to Mr Phillips. They alleged that one reason why the decision to advise surgical treatment was negligent was that the appellant "caused the patient to bleed internally at the end of the operation or shortly afterwards". What happens after a decision to recommend surgery cannot have influenced the making of that decision. A similar flaw appears in the revised particulars in relation to Mr Kemps. They alleged, after a paragraph charging that the first surgical procedure on Mr Kemps should not have been performed, that during "the first surgical procedure the [appellant] caused uncontrolled bleeding which the [appellant] did not control during the first surgical procedure or at any time afterwards." They also alleged that one reason why the surgical treatment was wrongly undertaken was that "the [appellant] failed to stop the uncontrolled bleeding during the first surgical procedure and delayed before attempting to do so in the second surgical procedure and failed to stop the bleeding in the second surgical procedure". What happened during either the first surgery or the second surgery cannot have affected the appellant's decision to advise the first surgical procedure. And what happened during the second surgery cannot have affected the appellant's decision to undertake it. In these respects, the particulars were liable to be struck out. The "lessons of experience" particulars. A second difficulty lies in the "lessons of experience" particulars. The revised particulars for Mr Phillips did not say what was negligent in the appellant's actual conduct of the procedures used on Mr Phillips. The revised particulars for Mr Morris did not say what was negligent in the appellant's actual conduct of the procedures in relation to Mr Morris. And the particulars for Mr Grave did not say what was negligent in the appellant's actual conduct of the procedures in relation to Mr Grave. Thus in the particulars about Mr Morris, it was alleged that the appellant "knew or ought to have known of his limitations as a result of the treatment of [Mr] Phillips" (emphasis added). But what aspects of that treatment? What limitations? In relation to Mr Grave, the prosecution alleged that the appellant lacked the skill to perform an oesophagectomy. The prosecution alleged also that the appellant lacked the skill to provide post-operative care to patients who had undergone oesophagectomies. Yet the prosecution did not allege that any particular act or omission of the appellant in treating Mr Grave was negligent. In relation to Mr Phillips, the only particular given of negligent treatment should have been struck out for reasons just given β namely, that what happens during or after an operation is irrelevant to whether that operation ought to have been performed105. One view is that the evidence about the appellant's limitations as a surgeon, the hospital's limitations as a facility and the treatment of other patients was inadmissible in each particular case because the particulars were uncertain and should be treated as nullities. Even if that evidence was admissible, tensions were likely to arise when the trial judge directed the jury that, with limited exceptions, to operate, not incompetently conducted operations106. incompetent decisions the case was about 105 See above at [197]. 106 See below at [204]-[209]. The "lessons of experience" particulars rested on the appellant's knowledge of his "limitations" as a result of "treatment" of patients before the particular patient in question. In the original particulars, there were some details given of the respects in which the appellant's performance of particular operations was said to be criminally negligent. They appeared to rest on the maxim res ipsa loquitur. For example, it was said that the appellant performed Mr Morris's surgery without having reasonable skill or using reasonable care for two reasons. First, it gave rise to wound dehiscence which required surgical correction. Secondly, it created an inadequate stoma, which caused partial bowel obstruction. It was said that the appellant performed Mr Phillips's surgery without having reasonable skill or using reasonable care because Mr Phillips suffered internal bleeding. It was said that the appellant lacked reasonable skill to perform Mr Grave's oesophagectomy because, after it, Mr Grave required operations to deal with dehiscence, and to repair a leaking jejunostomy, as well as an exploratory laparotomy. It was said that the appellant lacked reasonable skill and did not use reasonable care in operating on Mr Kemps in three respects. He concluded the first operation, despite failing to control the patient's internal bleeding. He delayed performing the second operation. And he failed to identify the source of the bleeding during the second operation, he failed to stop it, and he failed to seek the assistance of an experienced surgeon to do so. It was said that the appellant performed Mr Vowles's surgery without having reasonable skill or using reasonable care because it resulted in an inadequate stoma. In two instances, particulars were also given about defects in post-operative care. These particulars of the appellant's operative skill and his provision of post-operative care did not appear in the revised particulars. The introduction of references to "limitations" and "treatment", and of the "lessons of experience" allegations, meant that in fact the revised particulars were less particularised than the original particulars, not more. It is not clear whether the "lessons of experience" particulars alleged that the "treatment" was criminally negligent, or was merely in breach of the civil duty of care (if that were relevant), or was not negligent at all (though revealing "limitations"). Apart from the revised particulars for Mr Kemps, there was no substantive allegation of either criminal or civil negligence in performing surgery or providing post-operative care in any of the revised particulars. How, then, could surgery or post-operative care which did not fall below the levels of competence required by the criminal law (or perhaps the civil law) create in the appellant knowledge of his "limitations" as a surgeon? Of what materiality were these "limitations"? Why would surgery or post-operative care which was, ex hypothesi, reasonably skilful and careful, be such as to suggest to the appellant, or such as to suggest to a reasonable person in the appellant's position, that he had "limitations" as a surgeon? The prosecution ignored these problems. It continued to maintain, right up to and including its final jury address, that all evidence admitted under the original particulars remained admissible under the revised particulars. This can only have been true if the "lessons of experience" particulars are viewed as having this effect. The prosecution opened its final jury address by submitting that the appellant was "a bad surgeon". It submitted that "there were bad choices made about when and upon whom to operate, where to operate, how to operate, how to treat patients after the operation." Prosecution counsel made more detailed points to this effect throughout the address. The trial judge's summing up put the prosecution case to the jury as being a much narrower one. It expressed the case as turning almost entirely on the appellant's decisions to advise surgery107. At the end of the summing up, the trial judge asked prosecution counsel whether he had any application for a redirection. He answered in the negative. That state of affairs creates very serious problems for the respondent in this Court. The trial judge's summing up Initially, the trial judge appeared to view the revised particulars as permitting quite a wide prosecution case. On the forty-fourth day in delivering his judgment refusing to discharge the jury his Honour outlined the prosecution case as he saw it: "To prove that each of the decisions of the [appellant] to operate in respect of charged surgical procedures was not only negligent but criminally so, the prosecution contends that the [appellant's] moral culpability matters. This is correct. Then it is said that evidence tending to establish that culpability is admissible; again, in principle, that must be so. Next it is argued that the [appellant] is a bad surgeon and, more than that, knows that he is, and that evidence of what he has done in performing surgery that is not the subject of the charge in question is admissible to prove his moral culpability. Now, evidence of other errors, whether of poor judgment in deciding whether to perform surgery, or in a lack of technical surgical proficiency in performing surgical procedures, has potential to bear on whether the [appellant] knew facts which should have caused him not to operate on the patients whose surgery is the subject of the charges. In that way, evidence of mistakes in other cases, at least those known to the [appellant], in connection with the surgical management of other patients, has potential probative value in connection with such issues as whether embarking on surgery as major as an oesophagectomy was so reprehensible as to constitute criminal negligence." 107 See below at [204]-[209]. But by the time of his summing up, his Honour characterised the case much more narrowly. He gave the following direction: "It is critical to appreciate that this trial is not about botched surgery. Instead, it is about surgery performed competently enough. There may have been an imperfection or two in some of the procedures. If so, the mistakes did not, it seems, adversely affect patients. It is not how the [appellant] performed surgery that matters in these four cases. What matters is his judgment in deciding to commend the surgery to a patient and, having obtained patient's consent, in taking the patient to theatre to perform it." (emphasis added) This stated explicitly to the jury not only that the competence of the surgery was not in issue, but that it was in fact competently performed. And it stated implicitly that post-operative incompetence was not in issue. It stated implicitly that reasoning based on the "lessons of experience" which made or should have made the appellant aware of his own limitations as a surgeon was impermissible. Indeed, the trial judge reinforced what he had just said by continuing: "The prosecution contends that the operations were unnecessary or inappropriate. Removal of Mr Morris's sigmoid colon is said to have been inappropriate, mainly because the bleeding problem that the surgery was to address was sourced in his rectum. The surgery on Mr Vowles is said to have been inappropriate because, contrary to what the [appellant] supposed, Mr Vowles did not then have colon cancer. With both Mr Phillips and Mr Kemps, the primary contention is that the patient's health was too precarious for an oesophagectomy." The narrowness with which the trial judge so presented the prosecution case must be qualified in two respects. First, later parts of the summing up indicated that to a limited extent the "lessons of experience" remained relevant in relation to whether Bundaberg Base Hospital was an appropriate facility at which to conduct certain types of operations and to whether the appellant was an appropriate surgeon to conduct those operations. But these matters were said to go to the question of whether the appellant was right to recommend that he conduct those operations. They were not relevant to whether the surgery he actually conducted, or the post-operative care he supervised, violated the criminal law. Secondly, the failure of the appellant to stop Mr Kemps's bleeding and to start the second operation earlier was relevant under the revised particulars in relation to him. Since he was the last of the five patients, however, there were no "lessons of experience" to be learned from the treatment of him. Conformably with what the trial judge had said in the two passages quoted108, in dealing with each patient, the trial judge concentrated on the appellant's decision to operate (apart from the failure to stop Mr Kemps's bleeding and to start the second operation on him earlier). The trial judge did refer to prosecution counsel's description of the appellant as a "bad surgeon". But he said nothing about either incompetently conducted surgery (save in relation to Mr Kemps) or incompetently provided post-operative care, even when summarising the prosecution's detailed submissions. For example, the trial judge summarised prosecution counsel's submissions about the copious evidence concerning Mr Morris's decline into death thus: "But for the surgery, the consequences that followed the operation, including the patient's death, would not have happened. The operation, therefore, caused the death." It is true that the trial judge summarised prosecution counsel's submissions concerning Mr Grave as follows: "the Grave case demonstrated that an oesophagectomy was beyond the capacity of both the Bundaberg ICU and the [appellant's] judgment. [Prosecution counsel] also argued that the Grave case: Demonstrates that the [appellant] lacked the skills to perform an oesophagectomy. Shows that even when the oesophagectomy itself goes well, things can go wrong afterwards, which is a reason not to perform the procedure in Bundaberg." The trial judge also summarised prosecution submissions that Mr Grave's post-operative experiences showed that his oesophagectomy should not have been performed at Bundaberg Base Hospital. Those submissions concerned the decision to operate, not the actual competence with which the operation was conducted and the post-operative care was provided. It is important to bear in mind that the appellant was not charged with any crime in relation to Mr Grave. 108 See above at [204] and [206]. The trial judge summarised some of prosecution counsel's submissions about the alleged "lessons of experience". He summarised some submissions by prosecution counsel about the appellant's lack of surgical skill. But, as summarised, these submissions were not directed to obtaining a conviction for manslaughter by way of incompetent surgery. They were directed only to the question of whether the appellant's decision to recommend that he conduct an operation was criminal. It is now necessary to compare the evidence admitted under the original particulars in relation to each patient with the scope of the issues as defined in the revised particulars and the summing up respectively. The evidence relating to Mr Phillips What the revised particulars said. The revised particulars in relation to Mr Phillips alleged that it was wrong to conduct an oesophagectomy on him. This was essentially because it was dangerous in view of his co-morbidities; because the operation was or may have been pointless; because there were other, less dangerous treatments available; and because the appellant knew or ought to have known that Bundaberg Base Hospital would have difficulty in dealing with the post-operative problems that could reasonably be anticipated109. The revised particulars contained no allegation of incompetence in relation to either the appellant's conduct of the operation or his provision of post-operative care. The absence in the revised particulars of any such allegation rendered inadmissible a considerable amount of evidence regarding the appellant's conduct of Mr Phillips's surgery which had been admitted under the original particulars. That evidence was prejudicial to the appellant. Inadmissible evidence of incompetent surgery. The evidence of incompetent surgery which became inadmissible after the revised particulars were issued was along the following lines. The appellant could not get central venous access, which was said to indicate surgical incompetence. The operation should not have continued until central venous access was established. The appellant inadvertently but incompetently tore the oesophagus. There was considerable blood loss during the operation. Contrary to some principles of cancer surgery, the piece of the oesophagus removed was divided into two pieces, creating a risk of cancer cells "spilling". Given that Mr Phillips died of potassium poisoning for which the appellant was not responsible, none of this evidence can have been relevant even to the cause of death. Nor was any of it relevant to the merits of the decision to operate. It concerned events after that decision had been made. 109 This leaves aside a matter discussed above at [199]-[201]. revealing something drastically wrong, Inadmissible evidence arising out of Mr Phillips's post-operative condition. Further, despite the absence of any allegation of incompetence in providing post-operative care, there was evidence prejudicial to the appellant in relation to Mr Phillips's post-operative progress. Indeed, this evidence was inadmissible even under the original particulars, save to the extent that it might have gone to causation. Mr Phillips did not regain consciousness after the operation. He lost blood after surgery and his blood pressure was unstable. After his death, he had very high potassium levels, probably contributed to by internal bleeding, to the point that his heart was being poisoned by potassium. The appellant was in charge of the patient after surgery. He was in a "parlous" condition because of the instability of his blood pressure and the abnormality of his coagulation. Mr Phillips received numerous blood transfusions. His pupils became unresponsive, like a haemorrhage, inside the brain. There was evidence that the patient's circulation was marginal and that he was shutting down. A senior specialist challenged the accuracy of the appellant's post-operative notes. Contrary to those notes, the patient was haemodynamically unstable. There was evidence that the appellant gave orders about the post-operative care of Mr Phillips which conflicted with the advice of other doctors. There was evidence that he resisted and obstructed attempts to transfer Mr Phillips to Brisbane despite the limited capabilities of the Intensive Care Unit in Bundaberg Base Hospital. There was evidence that the appellant had conducted himself in a "dysfunctional" way. There was evidence that the appellant had misleadingly told Mr Phillips's mother and sister that his condition was improving. There was evidence that he became angry with nurses for telling the truth about Mr Phillips's condition to his family. In particular, there was evidence that when it was suggested to the appellant that Mr Phillips's next-of-kin be notified of his condition, he said that there was "no way" that they should be told of the patient's poor prognosis because "he's going to get up and walk out of here." The appellant then became angry when a doctor spoke to Mr Phillips's mother, who then approached the appellant. He screamed at a nurse, and threatened to leave his post at the hospital. Conclusion. Once the revised particulars had been supplied, this evidence was only relevant as "lessons of experience". The evidence was alleged to have conveyed to the appellant what he knew or ought to have known of his "limitations" as a result of his "treatment" of Mr Phillips, being a matter allegedly relevant to the decisions to operate on Messrs Morris and Kemps. But, as already noted110, there was no particularisation of those allegations. And even more of the evidence was inadmissible once the trial judge told the jury that the case was about decisions to operate only. 110 See above at [200]-[201]. Evidence relating to Mr Morris What the revised particulars said. The revised particulars alleged that the appellant was negligent because the sigmoid colectomy and colostomy performed on Mr Morris should not have been performed. This was largely because of the patient's age, the patient's co-morbidities, the failure to conduct a complete investigation of the patient's condition, and the "limitations" of which the appellant knew or ought to have known as a result of the treatment of Mr Phillips. In contrast to the original particulars, there was in the revised particulars no allegation of any substantive deficiency in the appellant's conduct of Mr Morris's surgery or in his provision of post-operative care. Inadmissible evidence of incompetent surgery. Despite that radical change in the prosecution case, there remained before the jury evidence alleging that the appellant, through surgical error, had failed to create an adequate stoma for Mr Morris's bowel. There was evidence of an obstruction of the bowel not detected or attended to competently by the appellant. There was evidence that wound dehiscence took place after the operation. When a second operation took place to repair this, the appellant did not deal with the stoma or bowel blockage problems. Inadmissible evidence arising out of Mr Morris's post-operative condition. There was evidence that a causal factor in Mr Morris's death was the appellant's alleged mispositioning of a nasogastric tube in Mr Morris's oesophagus instead of his stomach, which led to the aspiration of vomit and faecal matter into his lungs. This event has no relevance to the appellant's earlier decision to operate on the only particularised event requiring examination for its significance as a possible cause of Mr Morris's death. That decision was If the revised version of the particulars had been supplied before the evidence was called, much of the copious evidence about Mr Morris's condition over the 22 days between his operation and his death would have been inadmissible (subject to a causation argument advanced by the respondent). It was evidence from medical staff and from Mr Morris's daughter. It dealt with the malnourishment of Mr Morris; his pain, suffering and disorientation; his low blood pressure; his difficulty in breathing; his growing weakness; his development of oedema (excess fluid retention); his abdominal pain, which developed to the point that Mr Morris needed morphine; the increasing amount of fluid in his lungs; his lack of appetite; his loss of liver, kidney and bowel function; his gradual development of mental distress; his feelings of nausea; his distended abdomen; his urinary tract infection; and his pain when he tried to move. Conclusion. The trial judge's account of the issues in his summing up made even more of the evidence which had been received irrelevant. Evidence relating to Mr Grave The inadmissibility of evidence relating to Mr Grave. In this Court the respondent strongly argued that all the evidence which the appellant now complains about was not objected to before it was received. To this the respondent acknowledged three exceptions, one of which concerned Mr Grave. The appellant objected to the whole of the evidence concerning Mr Grave. The objection was based on the proposition that Mr Grave's evidence was similar fact evidence which did not comply with the principle stated in Pfennig v The Queen111. The objection was wrongly overruled. But since the appeal in relation to the evidence concerning Mr Grave did not take the Pfennig point, there is no purpose in examining why the objection was soundly based. What counsel for the appellant did submit was that no evidence relating to Mr Grave should have been admitted unless it was capable of demonstrating criminal negligence in the appellant's decisions to operate on the four patients whose operations were the subject of the charges. So far as the evidence concerning Mr Grave related to incompetent surgery and post-operative treatment, it was irrelevant after the particulars for the patients whose treatment was the subject of charges were revised. The trial judge's summing up stated Professor Jamieson's opinion that Mr Grave's operation had been carried out in "a standard and acceptable fashion", and that Mr Grave's post-operative complications β for example, pneumonia β were "recognised occurrences following an oesophagectomy." His Honour also said: "The post-operative complications are said by the prosecution to reveal lessons the [appellant] should have learned: in particular, that Bundaberg was not the place for an oesophagectomy." On that basis, evidence not going to that issue should have been treated as inadmissible because it was irrelevant or excludable under s 130 of the Evidence Act 1977 (Q)112. The inadmissibility of some of the evidence relating to Mr Grave. Counsel for the appellant submitted that a considerable amount of Mr Grave's evidence was irrelevant or so prejudicial as to warrant exclusion. Contrary to that submission, and subject to the criticisms of the "lessons of experience" particulars made above113, some of that evidence was at least arguably relevant under the revised particulars in relation to the patients whose oesophagectomies 111 (1995) 182 CLR 461. 112 Section 130 provided: "Nothing in this Act derogates from the power of the court in a criminal proceeding to exclude evidence if the court is satisfied that it would be unfair to the person charged to admit that evidence." 113 See above at [198]-[202]. told her and Mr Grave's wife took place after that of Mr Grave. Its potential relevance lay in providing "lessons of experience" for the appellant concerning possible shortcomings of Bundaberg Base Hospital as a facility for performing oesophagectomies. That approach would permit some general evidence about what the post-operative complications were, together with evidence about how they would have been avoided or overcome at a large Brisbane hospital, and any discussions on that subject in the appellant's presence. But that approach would not permit evidence that the appellant inadvertently put a hole in Mr Grave's oesophagus during the operation (particularly since this was not said to be negligent). And it would not permit various items of evidence about what happened after the operation. One example is evidence from Ms Davon, who was Mr Grave's daughter, that the appellant the operation had been straightforward, coupled with her graphic evidence about Mr Grave bleeding and needing subsequent surgery to stop the bleeding. Another example is evidence from Ms Davon that her father could not speak properly after the operation and never recovered his voice before he died. Another example is evidence from Mr Grave's widow that after the operations on her husband, the appellant said everything would be fine, when the opposite turned out to be the case. Another example is very detailed evidence about Mr Grave's post-operative complications. Another example is evidence presumably tendered as admissions by conduct, but tending to reveal the appellant as stubbornly unconcerned with Mr Grave's welfare, to the effect that the appellant resisted Mr Grave's transfer to Brisbane and threatened to resign if it occurred. On the forty-fourth day, after the supply of the revised particulars for the other four patients, the trial judge said that the evidence about transferring Mr Grave to Brisbane, which was voluminous, "now looks to have receded very largely into the background". That is a euphemistic way of saying that it had become irrelevant. that The evidence relating to Mr Vowles What the revised particulars said. The revised particulars for Mr Vowles alleged negligence in the appellant's decision to operate to remove his bowel because it was pointless since the patient did not have bowel cancer, because the investigations conducted prior to surgery were incomplete, and because of the "lessons of experience". Unlike the original particulars, they contained no allegations of incompetence in performing surgery or in providing post-operative care, except to the extent that the appellant's treatment of Mr Vowles and its consequences were said to provide "lessons of experience" in relation to the last patient, Mr Kemps. Inadmissible evidence of incompetent surgery. Evidence of the appellant's conduct after he recommended surgery for Mr Vowles had, however, already been admitted. There was evidence of surgical incompetence: the stoma the appellant created was defective and needed revision. This caused numerous problems: it was "a horrendous time" for Mr Vowles and his family. The revision by the appellant failed. It was undertaken too early. A further revision by another surgeon succeeded. Conclusion. The irrelevance of this evidence as to what happened after the appellant had recommended surgery became even more marked once the summing up had been delivered. Evidence relating to Mr Kemps What the revised particulars said. The revised particulars relating to Mr Kemps alleged negligence in the decision to operate largely because it was pointless; because other, less dangerous, treatments were available; and because of the "lessons of experience". They contained, unlike the original particulars, no allegations of incompetence in performing the surgery or in providing post-operative care, save for the appellant's failure to stop Mr Kemps's internal bleeding in either operation and the appellant's delay in starting the second operation. Some problems arise with the evidence relating to Mr Kemps. One concerns evidence which lay outside the prosecution case, as it was explained in the trial judge's summing up. Another relates to the "ventilator" evidence (which had been objected to before the trial). Inadmissible evidence of incompetent surgery. The trial judge's direction to the jury that surgical and post-operative competence was not in issue was subject to a qualification in relation to Mr Kemps. The prosecution had not abandoned the allegations about the appellant's failure to stop Mr Kemps's bleeding and his tardy start to the second operation. Even so, there was still evidence before the jury that was irrelevant to the case it was to consider. It may be taken in chronological order. There was expert evidence that, contrary to basic principles of cancer surgery, not all the cancer cells had been removed from Mr Kemps because not enough of the oesophagus had been removed. There was evidence that, during the first operation on Mr Kemps, a nurse drew the appellant's attention to the fact that a Bellovac drain had no vacuum on it, was freely flowing and was over half full, to receive the reply, "That's what drains are for". There was also inadmissible evidence concerning the second operation. Prejudicial evidence which went beyond proof of the objective facts on which the prosecution was relying was received. One example is that blood poured out of Mr Kemps and the nurses "scooped kidney basin after kidney basin" out of him. Another is that there were blood clots all over the floor and footprints of blood throughout the operating theatre. Another is that the appellant incompetently employed an unreliable indicator of blood loss by looking at the drain collecting the blood. Inadmissible evidence about post-operative events. There were numerous examples of inadmissible evidence about events after, or distinct from, the operations. An example is evidence of Mr Kemps's widow that the appellant had misled her about the success of the first operation and that his notes did not accurately record a conversation with her. Another example is that when the appellant returned to the theatre and found Mr Kemps still there he expressed anger. Another is evidence that the appellant had claimed, in a loud and unprompted way, that Mr Kemps's bleeding was not the result of his surgery. There was also evidence that he repeated this claim to Mrs Kemps later. There was evidence that this claim was wrong and not connected with reality. Another example is that, during the second operation, the appellant instructed junior doctors to keep "tight-lipped" and not discuss the matter with anyone. Another example is that the appellant remarked: "Maybe they're right, maybe we shouldn't do oesophagectomies here." Another example is evidence that the appellant said: "Maybe I should start thinking about not doing these type of procedures any more." Another example is evidence that the appellant had "a very uncaring look about him" after Mr Kemps had died. To that might be added evidence of the appellant's unprompted statement to a nurse after the second operation that it had been the worst day of his life. There was evidence that the death of Mr Kemps had not been referred to the coroner even though the appellant's team had been asked to do so and that it was the responsibility of the appellant to have done so. Finally, there was evidence that, on an occasion in some way connected with Mr Kemps, and after his death, the appellant had said that the local community was lucky to have someone like him because he had increased activity at Bundaberg Base Hospital and brought in a lot of money. The "ventilator" evidence. Eight witnesses gave evidence from which the jury could have reached the following conclusions. Before Mr Kemps's operation, it was perceived that a ventilator had to be available to assist Mr Kemps after the operation. A ventilator was being used to keep alive a female patient, Mrs Turton, who was terminally ill and brain-dead because of a cerebral bleed. The appellant, in an upset, angry, heated and petulant manner, demanded that Mrs Turton's ventilator be turned off prematurely. After some controversy between the appellant, an anaesthetist and a resident, the ventilator was turned off. Mrs Turton died. The appellant's motive was to ensure that the ventilator could be available to Mr Kemps so that the appellant could complete the operation on Mr Kemps in time to enable him to go on holidays. This evidence was irrelevant to the prosecution case as defined in the original particulars. It was irrelevant to the prosecution case as defined in the revised particulars. It was irrelevant to the prosecution case as described by the trial judge to the jury. To none of these cases were haste, neglect of pre-procedures for surgery or failure to follow brain-death protocols relevant. The Court of Appeal concluded that the evidence was irrelevant. Despite that, in this Court the respondent submitted, both in written submissions and in the documentary summary of its oral address, that the ventilator evidence was relevant. Only in oral argument did it concede that the evidence was irrelevant on the original particulars and on the revised particulars. The trial judge considered that "potentially devastating prejudice" lay in the evidence. It lay not in the desire to go on holidays, but in the allegation that the appellant "arranged for the premature death of the patient on the ventilator." The trial judge thought this was "pretty nasty stuff before a jury." He also said: "This has a significant potential to have an effect upon the jury that is out of all proportion to its probative value". Some of the jurors may have held the view that there is no moral difference between shutting off a ventilator and murder. Clough expressed this view in "The Latest Decalogue"114: "Thou shalt not kill; but need'st not strive, Officiously to keep alive". The Court of Appeal considered that the ventilator evidence was unlikely to have been prominent in the jury's deliberations. The trial judge's view is preferable. The respondent argued that any prejudicial effect of the evidence was "diffused". That is extremely doubtful. The prosecution's opening address referred to it at some length. Prosecution counsel said that the incident, coupled with the appellant's talk about going on holidays, was an indicator of unseemly haste, and a consequence of that "may well [have been] a lack of preparation done in staging the operation." Prosecution counsel in closing address also referred to the incident. He said: "[P]rior to the operation there was an elderly lady on the ventilator whose ventilation was turned off, and the significance of that is, you will recall evidence from the nurse Brennan about being shouted at, and evidence of a tantrum that Carter spoke of about that. What that points to is really a rush to do this. All of that evidence led up to Brennan reporting to us that the [appellant] said that he was going on holidays, and that's essentially why this had to be done, and it was coming up to Christmas-time, as we know. Now, I emphasise β I emphasise this: there is no criticism of the [appellant] over this issue with respect to turning off the ventilator for that unwell lady. It was her time. But the evidence about it prompts this conversation about the holiday and his urgency to get this done. That might, you might think, be a driver for his haste in doing this, for not consulting, for not getting all that wide array of opinions that we all know 114 Poems, 3rd ed (1871) at 142. about now that are necessary before you undertake this scope of operation." Defence counsel then addressed on the matter. That part of the transcript goes over two pages. The trial judge referred to what defence counsel said. The Court of Appeal said that the ventilator evidence had "been made irrelevant by the change in particulars". That is not so. It was always irrelevant. The Court of Appeal said: "Part of that evidence cast the appellant in an unfavourable light." That is inaccurate. All of it was capable of casting him in an unfavourable light. The Court of Appeal then said: "But although it demonstrated that the appellant acted in relation to the Kemps operation with undue haste and ignored protocols concerning the turning off of ventilators, it would have been plain to the jury that there was no question of the appellant's wanting the ventilator switched off prematurely or misguidedly." This fine distinction may have been plain to some jurors. It may not have been plain to others. The Court of Appeal then said: "The evidence in relation to the ventilator was a relatively small body of evidence led in a 58 day trial in which evidence was led over approximately 39 days." The evidence came from eight witnesses. It was given more than halfway through the trial on four days, spread over a five-day period. The Court of Appeal said: "That piece of evidence was thus unlikely to have had prominence in the jury's deliberations, either in respect of the count concerning Mr Kemps or the other counts." It certainly should not have had prominence β for it had no relevance whatever β on the other counts. Even if the evidence can be characterised, as the Court of Appeal did, as "short", deference should be paid to the view of the trial judge that it was "pretty nasty". That was the assessment of a lawyer with very great experience of criminal trials by jury. He was uniquely placed to assess prejudice in relation to this particular jury. The evidence showed graphically, on one view of it, that the appellant was prepared to ignore and break hospital rules that were in place for good reasons and that he was prepared to show a callous disregard for human life by prematurely ending it in order to fit in with his holiday plans. The evidence was objected to in a pre-trial hearing conducted by a judge other than the trial judge at a time before any particulars were supplied. That judge said: "[The appellant's] actions in relation to securing the provision of a ventilator are quite proximate in time to his surgery on Mr Kemps. They provide some evidence of a motivation on [the appellant's] part, unrelated to a concern about the most appropriate treatment for either patient. They also provide some context for the evidence relating to his failure to undertake proper preparation for the surgery." That was said in response to a submission that the appellant failed to undertake the "necessary staging", or was guilty of "inadequate surgical workup" before commencing surgery. The supply of the original particulars made it clear that the evidence was irrelevant. But by then it would have been very difficult to persuade the trial judge to reverse the other judge's earlier ruling that the evidence was admissible. The evidence continued to be totally irrelevant once the original particulars were revised so as to centre on the appellant's decision to operate on Mr Kemps. It was totally irrelevant to the decision to operate. Even if it had been relevant, its prejudicial effect was grossly disproportionate to its probative value. Conclusion. Some of the evidence relating to Mr Kemps was inadmissible even before the original particulars were supplied. Some became inadmissible after the revised particulars were supplied. Some became inadmissible after the trial judge's summing up. The Court of Appeal observed, correctly, that the defence had not applied for the ventilator evidence to be excluded on discretionary grounds, and had not applied for any particular direction to be given about it. It is now necessary to give reasons why those failures should not debar the appellant's arguments from succeeding in relation to both the ventilator evidence and the enormous quantities of other evidence which either was inadmissible from the start or which became inadmissible after the prosecution case changed. The failure to object and the failure to ask for directions A lot of the evidence which the appellant now argues is inadmissible was not objected to when it was tendered. No application to exclude it was made after the particulars changed. No application for any jury direction about it was made. The respondent attempted to make much of this. Failure to object. There is no doubt that a complaint on appeal that evidence not objected to at trial is inadmissible is ordinarily one that is very hard to make good. The appellant's success in this appeal, despite a failure to object, should not be taken as an auspicious precedent, capable of fructifying into widespread future use. But the circumstances of the appellant's trial were not ordinary. Some of the prosecution evidence was never admissible. A lot of the evidence β not all, but a lot β which the appellant now complains about was admissible on the original particulars, unsatisfactory though the trial judge kept saying that they were. Other parts of the evidence fell outside them. While others might have objected to evidence inadmissible even on the original particulars, the decisions of defence counsel not to do so are understandable. The jury could have been angered by repeated objection, or provoked into thinking that defence counsel was attempting to conceal something very damning. The trial judge had repeatedly said that the original particulars were incoherent, had permitted the deployment of every possible complaint about the appellant and had led to mud slinging. But he declined either to discharge the jury or to grant an adjournment for the particulars to be regularised. It is therefore very likely that the trial judge would have been unreceptive to complaints that evidence fell outside the particulars (putting aside some evidence which, even if within the particulars, might have been excludable on discretionary grounds). Any objection to evidence of incompetent surgery or post-operative care would inevitably have failed. If the particulars had been narrow it would have been much easier to object on grounds of relevance and discretionary exclusion. The original particulars were so wide as to preclude a great many of the objections which later became available. Much of the evidence admissible under the original particulars ceased to be admissible when the particulars were revised. Even more of it ceased to be admissible when the trial judge, without protest from the prosecution, narrowed the case further in his summing up. Once the discharge application on the forty-fourth day failed, there was no point in defence counsel trying to have the objectionable evidence rejected at that late hour. It had had its impact β the thirty-nine days of mud throwing to which the trial judge had often referred. That impact was inexpungible. Defence counsel's failures to object therefore lack determinative significance. Failure to seek special directions. The prejudicial effect of evidence, which may once have been admissible but which had ceased to be after the particulars had narrowed, was so extensive that it could not be cured. There was no point in seeking special jury directions. Those directions could only remind the jurors of what some might have forgotten. It would have been self-defeating to ask the jurors to bring the prejudicial evidence to their minds, and, having got it clearly fixed there, then to ask them to put it back out of their minds. To refer to each piece of inadmissible evidence and say that it was inadmissible would have taken a very long time. To redact the transcript would, as the trial judge said, have been a time-consuming exercise. It would not have addressed the fact that many jurors had been taking notes. It would have called for a complex dissection of the lengthy expert evidence into what remained admissible and what did not. Special directions and redactions of the transcript would have intensified the problems they were directed to solve. It was probably beyond human power to remove from the jury's purview all the irrelevant, or relevant but prejudicial, evidence that had been admitted against the appellant. The trial judge appears to have embarked on a praiseworthy attempt to solve the problem by simplifying the prosecution case as being even narrower than his initial view of the revised particulars. That technique revealed how the prosecution might have run the case if it had employed more economy and discrimination. But, in its own way, the trial judge's technique increased the extent to which masses of evidence became inadmissible. technical. Much of The appellant correctly submitted that a further problem arose from the trial judge's directions. In giving a conventional direction that the jury was bound by his Honour's directions on the law only, the trial judge said: "You are to determine the facts of the case based on the evidence that has been placed before you." That could have left the jurors with the impression that they were at liberty to use any part of the evidence which had been placed before them for any purpose they thought fit. That evidence included the "welter of prejudicial material" to which the trial judge had referred115. That comment did little to reduce the potential for a miscarriage of justice. The trial was long. Much of the technique, evidence was post-operative treatment, the sufferings of the patients, and the distress of their families. Much of the evidence was also, in the light of both the revised particulars and The most judge's summing up, comprehensible and moving parts of this irrelevant evidence concerned the sufferings of the appellant's patients and the distress of their families. The sheer volume and power of this evidence would have weighed on the lay jurors. The trial judge observed them taking notes about it116. While the jurors may have understood the trial judge's summation of the ultimate case as being largely about a decision to operate only, it is very difficult to think that they would not be fortified in reaching a guilty verdict by the "welter" of other prejudicial evidence heard. The jury had not been present when the trial judge repeatedly expressed to counsel his confusion about the prosecution case. The jurors had no reason to think that they were required to do anything other than pay close attention to the detail of the prejudicial evidence. it concerned operative irrelevant. trial the The respondent's stance in the appeal The respondent contended that all the evidence which the appellant said was inadmissible because of the change in particulars was still admissible. Evidence of decline. One argument of the respondent was that "the voluminous evidence given about the state of each patient between the operation and the time of death ... demonstrated the progression of health from operation by way of a steady decline to ultimate death". But the argument did not explain why that made the evidence admissible. Causation. A second argument was that much of the evidence went to causation117. The argument was that all the post-operative care evidence was 115 See above at [187]. 116 See above at [192]. 117 See above at [219]. necessary to exclude as causes of death any matters not connected with the decision to operate. There are difficulties in this argument. One is that it cannot assist in relation to Mr Vowles, who did not die. There is another, and wider, difficulty. Before the revised particulars were supplied, the prosecution case was that the death of Mr Morris was caused by incompetent advice that there be surgery, or incompetent surgery, or incompetent post-operative care, or any of those factors in combination. In the cases of Mr Phillips and Mr Kemps, the prosecution alleged that the deaths were caused by incompetent advice to undergo surgery, or incompetent surgery, or both. The only allegation of causation in the revised particulars was framed thus in the particulars supplied in relation to Mr Morris: "the patient died as a consequence of the surgical procedure because the [appellant] did not have reasonable skills and did not use reasonable care the details of which are set out below." There follow allegations that the decision to operate was wrong. The same formulation was used for Mr Phillips. It was also used for Mr Kemps, but failure to stop his bleeding was alleged as a cause of death as well. The revised particulars revealed a considerable about-face in tactics. The prosecution was saying in the case of Mr Morris that: "It was only the decision to operate which caused death, and we have excluded the other two as possibilities." In the case of Mr Phillips, the prosecution was saying that death was caused by incompetent advice to undergo surgery, and that it had excluded incompetent surgery. Only in the case of Mr Kemps did the prosecution maintain both advice to undergo surgery and the surgery itself as causes of death. Before the revised particulars, The prosecution was thus reversing its case in relation to Mr Morris and incompetent surgery and Mr Phillips. post-operative care were alleged as causes of Mr Morris's death. After that time they were not. Before the revised particulars, incompetent surgery was alleged to be a cause of Mr Phillips's death. After that time it was not. This is an extreme version of the problem that Lord Bingham of Cornhill CJ referred to in R v "[A]ny defendant (not least a defendant accused of murder) is entitled to know whether the Crown relied on a kick or a punch or both β¦ [W]e think it unfortunate, the prosecution having apparently nailed its colours to one version of events in opening, namely that the deceased was felled by a karate kick, that the prosecution sought, and the judge permitted, departure from that position in the course of the case, at any rate without making sure that the defendant was in no way prejudiced." 118 [2000] 2 Cr App R 149 at 156-157 per Lord Bingham of Cornhill CJ (Scott Baker The revision of the particulars was equal in significance to amending the indictment. In R v Johal, the English Court of Appeal said119: "amendment of an indictment during the course of a trial is likely to prejudice an accused person. The longer the interval between arraignment and amendment, the more likely is it that injustice will be caused, and in every case in which amendment is sought, it is essential to consider with great care whether the accused person will be prejudiced thereby." And in S v The Queen120, Dawson J said that amendments to the indictment "may only be allowed if it does not cause injustice or prejudice to the accused and that generally means that [they] cannot be made during the course of a trial". In any event, it is not possible to sustain the continued admissibility of the evidence to which the appellant now objects by recourse to causation. The respondent submitted in this Court that "everything that happened to Mr Morris from the time of the operation until the end bore upon proof of causation in respect of [the decision to advise] the operation." That submission must be rejected. There was expert evidence about causation. The jury could, on that evidence, form a view as to whether causation was or was not made out. The mass of evidence about Mr Morris's sufferings was not necessary to prove the prosecution case on causation. Moral gravity. A third argument of the respondent is that evidence of the appellant's incompetence went to showing that his alleged breaches of duty were morally grave. But the respondent did not explain how conduct of the appellant, not alleged to be itself a breach of the duties imposed by civil and criminal law to provide competent surgery and competent post-operative care, can establish that an earlier breach of duty in relation to advice about having an operation at all was morally grave. Consciousness of guilt. A fourth argument is that some of the appellant's conduct after the surgery reveals a consciousness on his part that he had been negligent, and was admissible to prove criminal negligence and the gravity of that negligence. This matter was not debated in detail, whether at trial, in the Court of Appeal, or in this Court. Potentially difficult issues arise in relation to the admissibility of this type of evidence. Those who contend that it is admissible often have to descend to some degree of detail in justifying admissibility. This was not done here. In those circumstances, little will be said about the matter, particularly in view of the fact that a new trial is to be ordered. 119 [1973] QB 475 at 481 per Karminski LJ, Ashworth and Hinchcliffe JJ, approved in R v Radley (1973) 58 Cr App R 394 at 403. 120 (1989) 168 CLR 266 at 274. If that new trial takes place, admissibility may have to be debated in detail. To some degree at least, the incidents referred to appear to reflect no more than the reaction of a busy professional, under severe stress and prone to irritation, understandably troubled at the unfortunate consequences for his patients of their medical treatment. Incidents of that character may well be irrelevant, or excludable on discretionary grounds, or incapable of satisfying the tests for receiving evidence of admissions by conduct. Section 24(1) of the Code. A fifth argument is that the evidence was relevant to the defence provided by s 24(1) of the Code. That sub-section provided: "A person who does or omits to do an act under an honest and reasonable, but mistaken, belief in the existence of any state of things is not criminally responsible for the act or omission to any greater extent than if the real state of things had been such as the person believed to exist." It was submitted that the evidence was relevant, both to the existence of the appellant's belief and to its reasonableness. This point was even less developed in argument than the last. In those circumstances it must be rejected. Conclusion The prosecution case, even on the revised particulars as the trial judge initially understood them, had rendered inadmissible a lot of evidence that may arguably have been admissible on the original particulars. And the prosecution case on the revised particulars in final address, as the trial judge summarised it to the jury, rendered even more evidence inadmissible. The bulk, intensity, significance and repetitiveness of the evidence thus rendered inadmissible is likely to have had a profound and illegitimate effect on the jury. Its prejudicial effect was increased by the fact that much of it was referred to in opening, at a time when its content would be likely to have had a considerable impact. The trial judge's endeavours throughout the trial to minimise the problems which eventually emerged were earnest, energetic, even heroic. But despite those endeavours, circumstances had conspired to ensure that the prejudice to which the prosecution's conduct of the trial had exposed the appellant was incapable of being overcome. None of the standard techniques for dealing with material which, having been received into evidence, turns out to be inadmissible could have surmounted it121. 121 BBH v The Queen (2012) 86 ALJR 357 at 378 [94]; 286 ALR 89 at 114; [2012] HCA 9. The convictions were miscarriages of justice. They were miscarriages of justice because a "failure ... occurred in observing the conditions which β¦ [were] essential to a satisfactory trial"122. It was a failure in process. "[T]he concepts of justice, and miscarriage of justice, bear two aspects: outcome and process. They are different, but related."123 "[I]t is the process itself that is judged, not the individual performance of the participants in the process."124 Subject to the proviso, the miscarriages of justice are sufficient to justify allowing the appeal. The proviso The respondent claimed that if the appellant's case in relation to the wrongful admission of evidence were sound, the appeal should be dismissed pursuant to the "proviso"125. The claim depends on this Court being "persuaded that the evidence properly admitted at trial proved, beyond reasonable doubt, the [appellant's] guilt of the offence[s] on which the jury returned its verdict[s] of guilty."126 (emphasis added) The respondent's proviso arguments rested on the assumption that all the evidence had been "properly admitted at trial". That is because they were directed to whether the proviso applied in the event that the appellant's construction of s 288 prevailed. That construction has not prevailed. The respondent's arguments were not directed to whether the proviso applied where much of the evidence had not been "properly admitted at trial". It is not surprising that the respondent did not present proviso arguments directed to that state of affairs. It would be very difficult to do so in the particular circumstances of this case. That is because the flaws in the revised particulars make it almost impossible to read the record of the trial putting to one side the inadmissible evidence. The revised particulars do not readily permit definitive decisions about the admissibility or inadmissibility of many pieces of evidence. It is relatively easy to consider whether to apply the proviso where there is one or a small 122 Davies v The King (1937) 57 CLR 170 at 180 per Latham CJ, Rich, Dixon, Evatt and McTiernan JJ; [1937] HCA 27. 123 Nudd v The Queen (2006) 80 ALJR 614 at 617 [3] per Gleeson CJ; 225 ALR 161 at 162; [2006] HCA 9. 124 Nudd v The Queen (2006) 80 ALJR 614 at 618 [8]; 225 ALR 161 at 164. 125 Section 668E(1A) provided: "the Court may, notwithstanding that it is of the opinion that the point or points raised by the appeal might be decided in favour of the appellant, dismiss the appeal if it considers that no substantial miscarriage of justice has actually occurred." 126 Weiss v The Queen (2005) 224 CLR 300 at 317 [44]; [2005] HCA 81. number of technical errors of procedure, evidentiary reception or misdirection. It is extremely difficult to do so where, as here, the prosecution tactics have created great prejudice and the now proffered criterion of evidentiary admissibility is in numerous respects unworkable. This is a case in which, to use the words of Gleeson CJ, the "departure from the requirements of a fair trial according to law is such that an appellate court will identify what occurred as a miscarriage of justice, without undertaking an assessment of the strength of the prosecution case." That is because "the consequence of the failure of process is to deprive the appellate court of the capacity justly to assess the strength of the case against the appellant."127 For those reasons, even taking the most charitable view of the respondent's position, it is not possible to say that no substantial miscarriage of justice has actually occurred. The truth is that the appellant was the victim of very substantial miscarriages of justice. Omitted matters The appellant presented arguments in relation to the admissibility of what the parties called "the Oregon order". In view of his success on other issues, it is not necessary to deal with them. Nor is it necessary to deal with questions about whether miscarriages of justice flowed from the trial judge's decisions to dismiss the first jury discharge application and to refuse the appellant's request for an adjournment with a view to the supply of proper particulars. The appeal raises two very difficult questions, which were not articulated or debated by the parties. One is: to what extent can and should judges in a criminal trial by jury intervene of their own motion to reject evidence to which a party fails to object128? The other question is: when should judges in a criminal trial by jury compel the prosecution to provide particulars even though the defence has not pressed for them? One source of the difficulty in relation to each of these questions is that some think it undesirable to interfere with the autonomy of trial counsel in conducting trials as they see fit. These questions need not be answered in this appeal. Order The appeal must be allowed, the orders of the Court of Appeal set aside, the convictions quashed and a new trial ordered. Whether, in all the 127 Nudd v The Queen (2006) 80 ALJR 614 at 618 [6]; 225 ALR 161 at 163. 128 The issue has been discussed in statutory contexts in Seltsam Pty Ltd v McGuiness (2000) 49 NSWLR 262 at 287 [149]; Dhanhoa v The Queen (2003) 217 CLR 1 at 8-9 [18]-[22]; [2003] HCA 40; R v Kaddour (2005) 156 A Crim R 11 at 26 [62] and Gonzales v The Queen (2007) 178 A Crim R 232 at 243-244 [24]-[26]. circumstances, a new trial should in fact take place is a matter for the prosecuting authorities. |
HIGH COURT OF AUSTRALIA THE QUEEN AND APPLICANT ZACHARY ROLFE RESPONDENT The Queen v Rolfe [2021] HCA 38 Date of Hearing: 2 November 2021 Date of Judgment: 10 November 2021 ORDER Special leave to appeal granted. Appeal allowed. Set aside order 3 of the orders of the Full Court of the Supreme Court of the Northern Territory of Australia made on 13 August 2021 and, in its place, order that: (a) Question 3 is restated as follows: "Does a 'function' under s 148B of the Police Administration Act 1978 (NT) include the functions listed in s 5(2) of the Police Administration Act 1978 The answer to question 3 is: "No, the relevant powers and functions to which s 148B of the Police Administration Act 1978 (NT) applies are those of the common law, which s 25 of the Act confers, and the power of arrest in s 124 of the Act." On appeal from the Supreme Court of the Northern Territory Representation P M Strickland SC with S G Callan SC and S Palaniappan for the applicant (instructed by Director of Public Prosecutions (NT)) B W Walker SC with J D Edwardson QC for the respondent (instructed by Tindall Gask Bently) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS The Queen v Rolfe Criminal law β Defences β Where respondent member of Northern Territory Police Force β Where respondent alleged to have fatally shot deceased after being deployed to arrest β Where respondent charged with murder and alternative offences under Criminal Code (NT) β Where s 148B of Police Administration Act 1978 (NT) ("Act") provides person "not civilly or criminally liable" for act done or omitted to be done "in good faith" in actual or purported "exercise of a power or performance of a function under" Act β Where s 5(2) of Act lists "core functions" of Police Force β Where s 25 of Act provides member of Police Force "shall perform the duties and obligations and have the powers and privileges as are, by any law in force in the Territory, conferred or imposed on" member β Whether "function" under s 148B of Act includes core functions listed in s 5(2) of Act. Criminal practice β Question of law arising before trial β Where trial judge referred four questions to Full Court of Supreme Court of Northern Territory of Australia β Where questions referred on basis of "assumed facts" β Where "assumed facts" not agreed and likely to be disputed at trial β Where Full Court reformulated third question β Whether third question hypothetical β Whether Full Court erred in reformulating third question. Words and phrases β "assumed facts", "common law powers", "defence", "exercise of a power or performance of a function", "fragmenting the ordinary course of criminal proceedings", "hypothetical", "powers and functions of a police officer", "protection from liability". Interpretation Act 1978 (NT), s 55. Police Administration Act 1978 (NT), ss 5(2), 25, 124, 148B. KIEFEL CJ, GAGELER, KEANE, GORDON, EDELMAN, STEWARD AND GLEESON JJ. The respondent is a member of the Police Force of the Northern Territory with the rank of Constable. He has been charged with one count of murder1; in the alternative, manslaughter2; and in the further alternative, engaging in a violent act which caused the death of a person3. He has pleaded not guilty. On 9 November 2019 the respondent and a number of other police officers were deployed from Alice Springs to assist in the arrest of Charles Arnold (Kumanjayi) Walker ("the deceased"). A warrant had issued for his arrest for breaching a condition of an order for a suspended sentence. The respondent and another officer entered the house where the deceased was present. The respondent directed the deceased to put his hands behind his back. The deceased did not do so. He stabbed the respondent in the left shoulder with a pair of scissors which had been secreted. The respondent shot the deceased three times. Either or both of the second and third shots later proved to be fatal. Prior to the commencement of the respondent's trial, the trial judge referred four questions to the Full Court of the Supreme Court of the Northern Territory ("the Full Court") under s 21 of the Supreme Court Act 1979 (NT). The questions were referred on the basis of a set of "assumed facts". They were not agreed facts and there is likely to be some dispute at trial with respect to one or more aspects of them. It is not necessary to refer in any greater detail to the facts so assumed other than those referred to above. It is the third question, as redrawn by the Full Court, and its answer which is the subject of the Crown's application for special leave to appeal from the decision of the Full Court. The application was referred to a Full Court of this Court for argument as on appeal. 1 Criminal Code (NT), s 156. 2 Criminal Code (NT), s 160. 3 Criminal Code (NT), s 161A(1). The third question In the reference to the Full Court the third question was stated in these terms: "Based upon the said assumed facts, at the time the accused fired the second and third shots resulting in the deceased's death, was he acting in the exercise or purported exercise of a power or the performance or purported performance of a function under the Police Administration Act 1978, such that s 148B of that Act arises for the jury's consideration?" During the course of the hearing before the Full Court the parties were agreed that the question should be reformulated as: "Does a 'function' under s 148B of the Police Administration Act 1978 (NT) include the functions listed in s 5(2) of the Police Administration Act 1978 and advised the Full Court accordingly. That was not the question which the Full Court dealt with. Question 3 was redrafted by the Full Court as: "[B]ased upon the assumed facts, at the time the accused fired the second and third shots resulting in the deceased's death, would it be open to the jury to find that the accused was acting in the exercise or the purported exercise of a power, or the performance or purported performance of a function under the Police Administration Act, such that section 148B of the Act arises for the jury's consideration?" The answer given by the Full Court was "Yes". In its application for special leave to appeal, the Crown submitted that Question 3 as posed by the Full Court should have been answered "no". Alternatively, this Court should answer the question as drafted by the parties "no". The provisions of the Police Administration Act 1978 (NT) Section 148B, "Protection from liability", appears in Div 2 of Pt VIIA of the Police Administration Act 1978 (NT) ("the PA Act"). It is in these terms: "(1) A person is not civilly or criminally liable for an act done or omitted to be done by the person in good faith in the exercise of a power or performance of a function under this Act. Subsection (1) does not affect any liability the Territory would, apart from that subsection, have for the act or omission. In this section: exercise, of a power, includes the purported exercise of the power. performance, of a function, includes the purported performance of the function." Section 124, "Arrest of person where warrant issued", appears in Div 3 of Pt VII, which Part is entitled "Police powers". It provides: "(1) A member of the Police Force may, without warrant, arrest and take into custody any person who the member has reasonable cause to believe is a person for whose apprehension or committal a warrant has been issued by any Supreme Court Judge, Local Court Judge or justice of the peace. (2) Where a member arrests a person under subsection (1), the member shall, as soon as reasonably practicable thereafter, produce or cause to be produced to the person the warrant authorising his apprehension or committal, where the person has been apprehended in pursuance of a warrant authorising his apprehension, and the person shall be charged with the offence specified in the warrant." Part II of the PA Act is entitled "Police Force of the Northern Territory". Section 5 is located in Div 1 β "Establishment of Police Force" β of Pt II. It provides: "(1) There is established by this Act the Police Force of the Northern Territory. The core functions of the Police Force are: to uphold the law and maintain social order; and to protect life and property; and to prevent, detect, investigate and prosecute offences; and to manage road safety education and enforcement measures; and to manage the provision of services in emergencies." Section 25, "Function of members", is in Div 3 of Pt II and provides: "Subject to this Act, a member shall perform the duties and obligations and have the powers and privileges as are, by any law in force in the Territory, conferred or imposed on him." Section 26(1), which follows, relevantly provides that: "A person shall not exercise or perform any of the powers, functions or duties conferred or imposed upon a member of the Police Force by a law of the Territory unless he or she has taken and subscribed an oath in the form in the Schedule." The Full Court At issue before the Full Court, as relevant to this application, was whether s 148B applied to and provided protection for the functions stated in s 5. Southwood J and Mildren A-J reasoned that, by virtue of the oath members of the Police Force take, and the fact that the Police Force can only act through its members, its members are under an obligation and have a duty to carry out the core functions stipulated in s 5 of the PA Act4. Section 25, in its reference to duties, obligations, powers and privileges conferred or imposed on police officers "by any law in force in the Territory", includes the common law and statutory law5, they 4 R v Rolfe [No 5] [2021] NTSCFC 6 at [107]. 5 R v Rolfe [No 5] [2021] NTSCFC 6 at [108]. observed. Their Honours concluded6 that s 5, when considered in the light of s 25 and the oath taken by a member of the Police Force, makes it part of a police officer's functions and duties to protect life and prevent offences. So understood, s 148B applies to those s 5 functions7. Kelly and Blokland JJ and Hiley A-J reasoned likewise. Their Honours held that functions of the Police Force were functions of its members8. Whilst some of the core functions in s 5(2) would be performed at an organisational level, some can only be performed by individual members of the Police Force, including two of the most important functions: protecting life and property, and preventing offences. In their Honours' view the protection afforded by s 148B did extend to the performance of the functions in s 5 of the PA Act9. The proper construction The evident purpose of s 148B is to provide protection from liability, including for a criminal act, provided that the person committing the act does so "in the exercise of a power or performance of a function" (or in the purported exercise or performance) under the PA Act, and does so in good faith. It contemplates that the power exercised or function performed will be of a kind which may result in the commission of a crime or a civil wrong, which may be contrasted with powers or functions which are of a more general character and do not require any special authority10. Section 124 confers a power of arrest upon warrant on a member of the Police Force. It appears in Pt VII of the PA Act, which is headed "Police powers", 6 R v Rolfe [No 5] [2021] NTSCFC 6 at [111]. 7 R v Rolfe [No 5] [2021] NTSCFC 6 at [127]. 8 R v Rolfe [No 5] [2021] NTSCFC 6 at [176]. 9 R v Rolfe [No 5] [2021] NTSCFC 6 at [178], [180]. 10 Board of Fire Commissioners (NSW) v Ardouin (1961) 109 CLR 105 at 110 per which heading is to be read as part of the PA Act11. Whilst the provisions of s 55 of the Interpretation Act 1978 (NT) do not deal with the heading of a section in the same way12, a modern approach to statutory construction often takes account of headings, much in the same way as use is made of extrinsic materials13. In this regard, s 25 is headed "Function of members". In any event, s 25 clearly is concerned to confer powers and functions on members of the Police Force. It provides that a member of the Police Force is to perform the "duties and obligations" and have the "powers and privileges" that any law in force in the Territory confers or imposes on a member. It is to be read with s 26, which provides that a person shall not exercise or perform any of the "powers, functions or duties" conferred or imposed upon a member of the Police Force by a law of the Territory unless the prescribed oath is taken and subscribed. Section 5 is not a provision of this kind. Its text and its location in Div 1 of Pt II, which is concerned with the establishment of the Police Force14, suggest that its purpose is to identify the principal functions of the Police Force, but not to confer any particular power or function on its members. Reading s 5 with s 25 does not alter this construction. The reference in s 25 to a law in force in the Territory is to a law which confers or imposes powers and s 5 is not of this character. True it is that powers such as those of prevention of offences and the apprehension of persons suspected of offences are intrinsically within the powers and functions of a police officer, as the respondent submits, but that is to say no more than that the common law recognises this to be the case. It is correct, as the respondent points out, that s 5 reflects certain of the police powers recognised by the common law. Importantly though, s 5 does not confer those powers, whereas Interpretation Act 1978 (NT), s 55(1). 12 Except where the relevant Act is enacted, or the heading is amended or inserted, after 1 July 2006: see Interpretation Act 1978 (NT), s 55(2). 13 Bennion, Bailey and Norbury on Statutory Interpretation, 8th ed (2020) at 539-543 [16.7]; R v A2 (2019) 93 ALJR 1106 at 1118 [40]; 373 ALR 214 at 225. 14 See Interpretation Act 1978 (NT), s 55(1) in relation to headings of Divisions. s 25 and s 124 do. That they do so tends against a construction that s 5 was intended to confer the same or similar powers or functions. The reference in s 25 to "any law" encompasses both the common law and statutory law which applies in the Northern Territory. The common law powers include those to prevent the commission of a crime15; to apprehend a person suspected of having committed an offence16; and to prevent breaches of the peace17. The common law power to arrest without warrant notably has been replaced with a statutory power (s 123 of the PA Act). The exercise of the common law powers, like the statutory powers, is subject to constraints, such as doing only that which is reasonable and necessary18. The text and legislative history of s 148B do not point to the application of s 148B to the performance by members of the Police Force of the core functions under s 5(2). When s 148B was introduced in 2005, it extended protection, from civil liability, to members of the Police Force. It provided19 that such a person was not civilly liable for an act done "in the performance or purported performance of duties" as a member. It was amended in 201620 to its present form, which notably replaces "member" with the more general reference to "person", and refers to the "exercise of a power or performance of a function" under the PA Act. The 2016 amendments to s 148B coincided with the insertion of Div 7AA in Pt VII, which dealt with blood testing for infectious diseases. The Division was 15 Binsaris v Northern Territory (2020) 94 ALJR 664 at 670-671 [28] per Gageler J; 380 ALR 1 at 7; Rice v Connolly [1966] 2 QB 414 at 419. 16 Binsaris v Northern Territory (2020) 94 ALJR 664 at 683 [105] per Gordon and Edelman JJ; 380 ALR 1 at 24. 17 Enever v The King (1906) 3 CLR 969 at 975-976. 18 R v Turner [1962] VR 30 at 36; Woodley v Boyd [2001] NSWCA 35 at [37]; Dowse v New South Wales (2012) 226 A Crim R 36 at 51 [52]. 19 Police Administration Amendment (Powers and Liability) Act 2005 (NT), s 10. 20 Police Administration Amendment Act 2016 (NT), s 7. concerned with the possible transmission of infectious diseases to members of the Police Force and provided that an "affected member" may apply to a "senior member" who may grant a "disease test approval" by which a blood sample was authorised to be taken from "the transferor", the person from whom it is suspected blood or another substance was transferred to the affected member21. The taking of a blood sample involved persons such as doctors and nurses, who were now performing a special public duty. It was obviously thought necessary to protect them from civil or criminal liability which might arise from their actions22, hence the widening of the reference in s 148B to "person". The term "function" is now apt to refer to duties undertaken by members of the Police Force and these other persons. The term "power" remains appropriate to members of the Police Force. The correct question On the hearing of the application for special leave before the Full Court of this Court, the respondent argued that this matter was not appropriate for a grant of special leave because it depended upon facts which were not proved and had not been agreed. In that sense it is hypothetical. A concern that Question 3 might be hypothetical is evident in the discussion which occurred in the Full Court about the form of the question and the statement by Southwood J and Mildren A-J23 that the answer to Question 3 did not involve "hypothetical matters". The Crown relied on two decisions of this Court, Bass v Permanent Trustee Co Ltd24 and Director of Public Prosecutions (Cth) v JM25, which were said to support their Honours' view. In the former it was accepted that a question was not 21 See Police Administration Act 1978 (NT), ss 147FA-147FF. 22 Northern Territory, Legislative Assembly, Police Administration Amendment Bill 2016, Explanatory Statement. 23 R v Rolfe [No 5] [2021] NTSCFC 6 at [25(3)], see also [6]. (1999) 198 CLR 334. (2013) 250 CLR 135. hypothetical where it proceeded on the basis of facts which were accepted to be true, as on a demurrer26. In JM, the facts were not agreed, but it was held that it was sufficient that they be identified as those which the prosecution would seek to establish at trial27. The question in the present case does not depend on facts assumed to be correct. It does involve facts which the Crown undertakes to prove. The distinction which might be drawn with JM is that there the question was framed as one of law which could be applied to the facts as established by the prosecution28. Here the assumed facts are bound up with the question of law so that the underlying question, whether a defence based on ss 5 and 148B is available to the respondent and may be put to the jury, may be answered. It was no doubt to overcome this problem that the parties sought to redraw Question 3 before the Full Court. The question as redrafted identified the real controversy between the parties as whether s 148B applied to the functions in s 5(2), and it stated the question of law so that it and the answer to it could be applied as in JM. The Full Court should not have reformulated it, just as the appellate court in JM should not have29. The question which may properly be applied to the facts as they are found by the jury was correctly stated by the parties in the Full Court. The answer to it is "no", subject to qualifications necessary to make it plain where the powers relevant to this matter and to which s 148B applies reside. Fragmentation of proceedings The answer given by the Full Court to Question 3 as reformulated by it conveys that the exercise or performance of any police function is the subject of 26 Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 at 358 [52]. (2013) 250 CLR 135 at 151 [24]. (2013) 250 CLR 135 at 153 [28]. 29 See Director of Public Prosecutions (Cth) v JM (2013) 250 CLR 135 at 158 [41]- the protection given by s 148B, a construction which was overbroad and erroneous. It has been necessary for this Court to correct that error but it should not be assumed that this Court will do so in every case. To adopt what was said in R v Iorlano30, "[t]he fact that the Court has expressed its conclusion on the substantive question at issue in the present case is not intended to encourage applications of this kind". When this matter first came before this Court the respondent's trial had been scheduled shortly to commence. This Court has emphasised on many occasions how rare it is to make orders which would have the effect of fragmenting the ordinary course of criminal proceedings31. The reasons why it is highly undesirable to do so are obvious. They include delay and its effects32. That is why the hearing of this application was expedited. Orders There should be a grant of special leave to appeal. The appeal should be allowed and order 3 of the Full Court of the Supreme Court of the Northern Territory set aside. In lieu thereof, Question 3 should be restated as: "Does a 'function' under s 148B of the Police Administration Act 1978 (NT) include the functions listed in s 5(2) of the Police Administration Act 1978 and it should be answered: "No, the relevant powers and functions to which s 148B of the Police Administration Act 1978 (NT) applies are those of the common law, which s 25 of the Act confers, and the power of arrest in s 124 of the Act." (1983) 151 CLR 678 at 680. 31 Sankey v Whitlam (1978) 142 CLR 1 at 25-26; Yates v Wilson (1989) 168 CLR 338 at 339; R v Elliott (1996) 185 CLR 250 at 257; Gedeon v Commissioner of New South Wales Crime Commission (2008) 236 CLR 120 at 133 [23]; Obeid v The Queen (2016) 90 ALJR 447 at 450 [15]; 329 ALR 372 at 376. 32 R v Elliott (1996) 185 CLR 250 at 257. |
HIGH COURT OF AUSTRALIA Matter No A14/2016 AND APPELLANT THE DIRECTOR OF PUBLIC PROSECUTIONS RESPONDENT Matter No A15/2016 RROK JAKAJ AND APPELLANT THE DIRECTOR OF PUBLIC PROSECUTIONS RESPONDENT Matter No A16/2016 AND APPELLANT THE DIRECTOR OF PUBLIC PROSECUTIONS RESPONDENT Matter No A19/2016 DARIO STAKAJ AND APPELLANT THE DIRECTOR OF PUBLIC PROSECUTIONS RESPONDENT NH v Director of Public Prosecutions Jakaj v Director of Public Prosecutions Zefi v Director of Public Prosecutions Stakaj v Director of Public Prosecutions [2016] HCA 33 31 August 2016 A14/2016, A15/2016, A16/2016 & A19/2016 ORDER Matter No A14/2016 Appeal allowed with costs. Set aside orders 1 to 4 of the Full Court of the Supreme Court of South Australia made on 25 September 2015, and in their place order that: the application of the Director of Public Prosecutions filed on 16 January 2015 be dismissed; the application of the Director of Public Prosecutions filed on 5 March 2015 be dismissed; and the Director of Public Prosecutions pay the appellant's costs of the two applications. Remit the matter to the Full Court for further hearing on grounds 3 to 6 of the Notice of Appeal filed in that Court on 7 October 2014. Matters No A15/2016 and No A16/2016 Appeal allowed with costs. Set aside orders 1 to 4 of the Full Court of the Supreme Court of South Australia made on 25 September 2015, and in their place order that: the application of the Director of Public Prosecutions filed on 16 January 2015 be dismissed; the application of the Director of Public Prosecutions filed on 5 March 2015 be dismissed; and the Director of Public Prosecutions pay the appellant's costs of the two applications. Matter No A19/2016 Appeal allowed with costs. Set aside orders 1 to 4 of the Full Court of the Supreme Court of South Australia made on 25 September 2015, and in their place order that: the application of the Director of Public Prosecutions filed on 16 January 2015 be dismissed; the application of the Director of Public Prosecutions filed on 5 March 2015 be dismissed; and the Director of Public Prosecutions pay the appellant's costs of the two applications. Remit the matter to the Full Court for further hearing on grounds 4 to 6 of the Substituted Grounds of Appeal filed in that Court on 21 November 2014. On appeal from the Supreme Court of South Australia Representation M L Abbott QC for the appellant in A14/2016 (instructed by Legal Services Commission of South Australia) O P Holdenson QC with A M Dinelli for the appellant in A15/2016 B W Walker SC with S A McDonald for the appellant in A16/2016 (instructed by Patsouris & Associates) S G Henchliffe with S Georgiadis for the appellant in A19/2016 (instructed by Steven Georgiadis & Associates) A P Kimber SC and C D Bleby SC with F J McDonald for the respondent in each matter (instructed by Director of Public Prosecutions (SA)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS NH v Director of Public Prosecutions Jakaj v Director of Public Prosecutions Zefi v Director of Public Prosecutions Stakaj v Director of Public Prosecutions Criminal law β Appeal β Verdict β Not guilty of murder but guilty of manslaughter β Alleged mistake by foreperson β Requisite majority for verdict of not guilty of murder allegedly not reached β Report of foreperson to court officer disclosing alleged error β Statements as affidavits from jurors β Full Court quashed jury verdicts and ordered new trials on count of murder β Whether presumption of correctness of jury verdicts rebuttable in circumstances β Whether Full Court could reconsider perfected orders in original jurisdiction β Whether alleged mistake was material irregularity leading to unlawful verdicts β Whether alleged mistake by foreperson and acquiescence of jury an abuse of process β Whether inherent power to correct perfected orders in circumstances β Admissibility of jury statements to impeach verdicts β Consideration of distinction between verdict and judgment. Words and phrases β "abuse of process", "alternative offence", "functus officio", "inherent jurisdiction", "inherent power", "judgment", "majority verdict", "major offence", "material irregularity", "perfected", "unlawful verdict", "verdict". Criminal Law Consolidation Act 1935 (SA), ss 350, 351A, 352, 353. Juries Act 1927 (SA), s 57. Supreme Court Act 1935 (SA), ss 17, 48, 49. FRENCH CJ, KIEFEL AND BELL JJ. Introduction On 22 September 2014, after a trial before a judge and jury in the Supreme Court of South Australia, the four appellants were acquitted of the murder of Christopher Hatzis, but convicted of his manslaughter, for which they were sentenced to terms of imprisonment. On one of two applications by the Director of Public Prosecutions ("the DPP") to the Supreme Court, which were heard concurrently by the Full Court, a majority of the Full Court made orders quashing the verdicts and directing new trials on the charge of murder. The Court held that the verdicts as recorded were reached in contravention of s 57 of the Juries Act 1927 (SA). That section provides that a jury who have found a person not guilty of an offence charged may find the person guilty of an alternative uncharged offence. In this case the charged offence was murder. The alternative uncharged offence was manslaughter. On the basis of affidavit evidence obtained from the jurors by an officer of the Court, the Full Court found that the foreperson had erroneously told the Court that a majority of at least 10 of the jury had reached verdicts of not guilty of murder. Pursuant to s 57 of the Juries Act a verdict of not guilty required a majority of at least 10 of them. The Full Court found that majority had not been reached. The majority of the Court held that absent verdicts of not guilty of murder reached by the requisite majorities, the jury could not, consistently with s 57, have proceeded to consider verdicts of guilty of the alternative uncharged offence of manslaughter. There was more than one difficulty with the reasoning of the Full Court. The Court would not reach the question whether there was a non-compliance with s 57 of the Juries Act unless it had the power to look behind the verdicts delivered by the foreperson. Those verdicts were delivered in open court in the sight and hearing of the other jurors, without any dissent or action by them, and were therefore presumed to be correctly communicated to the Court. There is no doubt that while still assembled the jury could have corrected the verdicts1. That is a proposition of long standing and not only in the United Kingdom and Australia2: 1 R v Parkin (1824) 1 Mood 45 at 46 [168 ER 1179 at 1180]. 2 Smith v Massachusetts 543 US 462 at 474 (2005). Bell "Double-jeopardy principles have never been thought to bar the immediate repair of a genuine error in the announcement of an acquittal, even one rendered by a jury." However, the only arguable source of power, in the original jurisdiction of the Court, to alter or set aside verdicts post-discharge, without recalling the jury, was the inherent power of the Court. Once the jury were discharged and beyond the control of the Court, they no longer existed as a decision-making organ of the Court with the capacity to correct their own verdict. The objections to the proposition that the inherent power extended to support the Full Court's orders were formidable β not least the presumed correctness of the verdicts and the finality of the perfected judgments of acquittal and conviction. Those objections could not be overcome by the Full Court's characterisation of the claimed error by the foreperson and acquiescence in it by the other jurors as an abuse of process attracting the protective application of the inherent power. The absence of inherent power to set aside the verdicts appears from a consideration of the court record and the allegations in the DPP's first application. There was no basis for receiving in evidence affidavits taken from the foreperson and the other jurors. The orders should not have been made. The appeals should be allowed with costs. Procedural history By an information dated 7 March 2014, the appellants were jointly charged in the Supreme Court of South Australia with the murder of Christopher Hatzis at Adelaide on 4 August 2012. The charges arose out of a fatal altercation between the appellants and the deceased in the early hours of 4 August 2012 in the vicinity of the Savvy nightclub in Light Square. The deceased was stabbed several times and died from his wounds. The prosecution case was that the appellant Zefi had inflicted the stab wounds with a knife and that the other appellants aided and abetted him in that murder. The trial before Vanstone J and a jury commenced on 7 August 2014. The jury retired to consider their verdicts on 17 September 2014. In her summing up the trial judge directed the jury in the following terms: "In respect of each accused there are three possible verdicts open to you in this case depending on the view you take of the evidence. Those verdicts are guilty of murder, guilty of manslaughter or simply not guilty. There is no mention of manslaughter in the formal statement of the charge because it goes without saying that when a person is charged with murder the jury may always bring in a verdict of the alternative and lesser offence of manslaughter, and so there is no need to spell that out in the charge." Bell That direction did not indicate to the jury that they must return a verdict of not guilty of murder before they could return a verdict of guilty of manslaughter. Later in her summing up the trial judge directed the jury about their verdicts in the following terms: "Now, a verdict of guilty of murder must be unanimous. Any other verdict including not guilty of murder, can be by majority, that is, 10 or more of you after four hours of deliberation. But in a case of this nature it is plainly preferable that all verdicts be unanimous and I urge you to work towards that position." It was open to the judge to give such a direction. It was not required by law3. Whether or not such a direction is desirable has been the subject of differing views in South Australia4. It was not suggested in the present case that the trial judge erred in that direction5. After a break from their deliberations over the weekend of 20 and 21 September 2014, the jury returned verdicts on Monday 22 September 2014 at 2.26pm. The foreperson, in answer to questions from the judge's associate, reported that the jury found each of the appellants not guilty of murder but guilty of manslaughter. Later that day, the foreperson reported to a court officer that he had mistakenly told the Court that at least 10 of the jury had agreed on a verdict of not guilty of murder. At the direction of the Chief Justice, a signed statement was taken from the foreperson by the Acting Sheriff. Statements in question and answer form were taken from the other members of the jury between 24 and 26 September 2014. Neither the DPP nor the appellants' legal representatives were aware of these steps until 30 September 2014 when they were provided with a memorandum by the Acting Sheriff and an affidavit by the trial judge's 3 Milgate v The Queen (1964) 38 ALJR 162. See also R v Tropeano (2015) 122 SASR 298 at 318 [110] per Duggan AJ, Kourakis CJ agreeing. 4 See R v Harrison (1997) 68 SASR 304 at 306 per Cox J; cf R v K (1997) 68 SASR 405 at 413-414 per Doyle CJ. 5 As to the need to direct a jury regarding the alternative verdict of manslaughter, where there is a viable case of manslaughter, see Gilbert v The Queen (2000) 201 CLR 414 at 416-417 [1]-[2] per Gleeson CJ and Gummow J, 434 [70] per Callinan J; [2000] HCA 15; Gillard v The Queen (2003) 219 CLR 1 at 14 [26] per Gleeson CJ and Callinan J, 15 [32] per Gummow J, 30 [85] per Kirby J, 34-35 [106], 40 [129] per Hayne J; [2003] HCA 64; R v Nguyen (2010) 242 CLR 491 at 505 [50]; [2010] HCA 38; Nguyen v The Queen (2013) 87 ALJR 853 at 857 [23]; 298 ALR 649 at 653-654; [2013] HCA 32. Bell associate. Submissions on sentencing of the appellants proceeded on 2 October 2014 and sentencing on 7 October 2014. The judgments of acquittal and conviction based on the jury's verdicts were perfected, at the latest, at that time. In two applications to the Supreme Court β one on 16 January 2015, invoking the "inherent jurisdiction" of the Court, and the other on 5 March 2015, invoking provisions of the Criminal Law Consolidation Act 1935 (SA) ("the CLC Act") β the DPP sought orders for the quashing of all of the verdicts and for a retrial of each of the appellants on the charge of murder. The Full Court heard the applications by the DPP concurrently with appeals and applications for permission to appeal against the convictions of two of the appellants, NH and Stakaj, filed on 7 and 13 October 2014 respectively. Those appeals were based in part upon the "invalidity" of the verdicts of not guilty of murder. NH and Stakaj also contended that the verdicts of guilty of manslaughter were unsafe and unsatisfactory and against the weight of the evidence, and that they did not have a case to answer on the charge of murder or the alternative of manslaughter. On 18 September 2015, the Full Court by majority (Gray and Sulan JJ, Kourakis CJ dissenting) made the following orders on the DPP's first application: That the Application of the Director of Public Prosecutions is granted. That the Verdicts of not guilty of murder with respect to each respondent are quashed. That the Verdicts of guilty of manslaughter with respect to each respondent are quashed. That each respondent is to be retried on the charge of murder. That the respondent's [sic] Zefi and Jakaj are remanded in custody on the information in the Supreme Court." The orders did not in terms quash or set aside the judgments of acquittal and conviction which had been entered as a result of the verdicts. After the delivery of the judgment of the Full Court, counsel for NH and Stakaj complained that they had not been heard on the common form grounds of their appeals against conviction. The Full Court recalled its orders of 18 September 2015 to allow the reasons to be amended to dispose of the common form grounds of NH and Stakaj's appeals. On 25 September 2015, the Full Court reconvened to deliver amended orders and reasons. The final orders did not differ from those quoted above. Before their delivery, counsel for NH and Stakaj orally applied to be heard on the common form grounds, and alternatively on Bell submissions that the Court should order an acquittal or a permanent stay on the DPP's first application. The Court refused that oral application and published its reasons on 23 February 20166. Essentially the Court held that the jury verdicts had been quashed, thereby "extinguishing any right of appeal of the defendants and any entitlement to an acquittal."7 On 11 March 2016, this Court granted each of the appellants special leave to appeal against the judgment of the Full Court8. A further order was made in respect of the appellant Stakaj on 13 April 20169. It is necessary now to review the record of what occurred when the verdicts were delivered. The delivery of the verdicts The transcript of proceedings before the trial judge, as reproduced in the joint judgment of Gray and Sulan JJ10, recorded the following in relation to the delivery of verdicts: "Trial Judge: [Foreperson], I understand you have verdicts? Foreperson: Yes, I do. Trial Judge: Are they unanimous, or at least any conviction for murder must be unanimous? You do know that, don't you? Foreperson: Yes, but β Trial Judge: But others are majority? Foreperson: Can you please start that again? 6 R v Stakaj; R v NH [2016] SASCFC 9. [2016] SASCFC 9 at [21] per Gray J, with whom Sulan J agreed. [2016] HCATrans 65. [2016] HCATrans 84. 10 Case Stated on Acquittal (No 1 of 2015); R v Stakaj (2015) 123 SASR 523, commencing at 544 [62]. Bell Trial Judge: Take your time. My associate will take them from you. I take it all the verdicts are not unanimous? Is there a majority verdict among the verdicts? Foreperson: Yes, that is correct. Trial Judge: My associate will need to know as you go through which are unanimous and which are majority. Foreperson: Yes. Trial Judge: Just listen carefully. Foreperson: Sure. Associate: As to the accused David Zefi, are you unanimously agreed upon your verdict as to the charge of murder? Foreperson: Associate: As to the charge of murder, and the accused David Zefi, are ten or more of you agreed upon your verdict for a majority verdict of 'not guilty'? Foreperson: Yes. Trial Judge: Not guilty of murder by majority. Foreperson: Yes. Associate: As to the charge of murder, do you find the accused Foreperson: Yes. Associate: And that is the verdict of ten or more of you? Foreperson: Yes. Associate: Members of the jury, as to the alternative charge of manslaughter, do you find the accused David Zefi 'guilty' or 'not guilty'? Foreperson: Guilty. Bell Associate: And is that the verdict of you all? Foreperson: Yes." The same series of questions and answers followed with respect to each of the other appellants save that the foreperson asked the associate to repeat the question whether 10 or more of the jury were agreed upon a verdict of not guilty of the charge of murder in relation to Jakaj. The trial judge interpolated: "You're now being asked if it's 'not guilty' of murder for Jakaj." The foreperson responded "Yes". The only other variation was that the foreperson advised that the jury were not unanimous on the verdict for the alternative of manslaughter against NH but that a majority of 10 or more of them were agreed on a verdict of guilty. The traditional interrogation of the foreperson and jury by the Clerk of Arraigns in a case in which unanimity was required was "So says your foreman, so say you all?" Barwick CJ in Milgate v The Queen pointed to the need for great care in the manner in which the foreperson and jury were interrogated as to the verdict. Referring to provisions in State laws for majority verdicts, he said11: "the Clerk of Arraigns' formula on the taking of a verdict should not be expressed in a perfunctory way nor allowed to appear as a mere statement of an assumed or concluded state of affairs, but should be clearly interrogative of the members of the jury." Gray and Sulan JJ observed in their majority judgment that it was the practice of the Court to interrogate the foreperson when the jury returned to deliver their verdict and thereby to superintend compliance with s 5712. The associate's questions were all directed to the foreperson in the presence and hearing of the other members of the jury. In each case the foreperson was asked whether the relevant verdict was unanimous or the verdict of 10 or more of the jury. There was no dissent from any of the other jurors to the verdicts communicated by the foreperson. It is not suggested that the questions put to the foreperson could be regarded as anything less than questions put to the jury as a whole. There was no attempt by the jury after the delivery of the verdicts but before they were discharged to seek their correction. 11 (1964) 38 ALJR 162 at 162. 12 (2015) 123 SASR 523 at 552 [83]. Bell The trial judge accepted the verdicts after they were delivered. The associate endorsed the information accordingly and the jury were discharged. The trial judge administered the allocutus, ie, her Honour asked each of the appellants why the court should not proceed to judgment against him. The proceedings were then adjourned to 2 October 2014 for submissions on sentence. Presumption of correct verdict It is a long-standing principle that where a verdict is delivered in open court by the foreperson in the sight and hearing of other members of the jury, without dissent from any of them, it is presumed that they assented to it13. That principle, developed in the context of the common law requirement for unanimous verdicts, is of equal application in the case of a verdict arrived at by a majority of 10 or more14. It may be that, for a variety of reasons, jurors do not speak out against a misstatement of their verdict at the time it is delivered15. There is authority for the proposition that a correction may be made by the trial judge even after the jury have been discharged16. The Court of Appeal of England and Wales in Andrews17 said that the trial judge exercising that discretion, at the request of the jury, will take into account all the circumstances of the case and in particular the length of time elapsed between the original verdict and the jury's wish to alter it. The judge would also take into account the probable reasons for the initial mistake and the need to ensure that justice is done to both the defendant and the 13 Ellis v Deheer [1922] 2 KB 113 at 118 per Bankes LJ, 120 per Atkin LJ; Nanan v The State [1986] AC 860 at 871; R v Challinger [1989] 2 Qd R 352 at 363-364 per Shepherdson J, Kelly SPJ agreeing at 355; Matta v The Queen (1995) 119 FLR 414 at 417 per Franklyn J, Pidgeon J and Steytler J agreeing at 415, 418; Biggs v Director of Public Prosecutions (1997) 17 WAR 534 at 544 per Kennedy J, 556 per Franklyn J, Walsh J agreeing at 558. 14 Halsbury's Laws of England, 4th ed (2006 reissue), vol 11(3) at [1344] and authorities there cited. See also Biggs v Director of Public Prosecutions (1997) 17 WAR 534 at 555-556 per Franklyn J citing Andrews (1986) 82 Cr App R 148. 15 Smith v Western Australia (2014) 250 CLR 473 at 484-485 [47]; [2014] HCA 3. 16 R v Vodden (1853) Dears 229 at 231 [169 ER 706 at 707]; R v Cefia (1979) 21 SASR 171 at 175 per King CJ and Sangster J, Hogarth J agreeing at 175; Andrews (1986) 82 Cr App R 148 at 154. 17 (1986) 82 Cr App R 148. Bell prosecution. Practical considerations impose limits on the exercise of that discretion in favour of alteration. As Simon Brown J, delivering the judgment of the Court of Appeal, said18: "If the jury have been discharged and a fortiori if they have dispersed, it might well be impossible for the judge to allow the verdict to be changed." The exposition of the discretion in Andrews was followed in Western Australia in Biggs v Director of Public Prosecutions19. There is a distinction to be drawn between a correction of the verdict by jurors acting collectively as the jury before they are discharged and a correction made by the trial judge on the basis of a request or evidence from members of the jury after they have been discharged and have dispersed beyond the control of the court. The distinction is of importance. Before discharge the jurors are still a part of the court exercising jurisdiction in the case. After discharge they are no longer part of the court and unless recalled by the trial judge, following rescission of the discharge order, no longer act as a collective decision-making body. Any correction to the verdict taken by the trial judge without recalling the jury but acting on information supplied by the jurors can only be supported, absent any statutory authority, as the exercise of an inherent power. Whether or not the jury are recalled, the post-discharge power of the court to correct the verdict is narrowly confined. In the context of civil proceedings before a jury in the United States, the Supreme Court of the United States has recently held that district courts have an inherent power to recall a discharged jury and re-empanel the jurors with curative instructions. In Dietz v Bouldin20, the Court held, by majority, that there was no implicit limitation under the Federal Rules of Civil Procedure which would prohibit a court from rescinding its discharge order and reassembling the jury. Nevertheless, the Court saw the power as constrained21: "The inherent power to rescind a discharge order and recall a dismissed jury, therefore, must be carefully circumscribed, especially in light of the 18 (1986) 82 Cr App R 148 at 154. 19 (1997) 17 WAR 534. 20 136 S Ct 1855 (2016). 21 136 S Ct 1855 at 1893 (2016). Bell guarantee of an impartial jury that is vital to the fair administration of justice." The Supreme Court was particularly concerned with the effect of delay between discharge and recall on the likelihood of prejudice affecting members of the jury. In any event, its decision was limited to civil cases. Having regard to additional concerns in criminal cases such as attachment of a double-jeopardy bar, the Court did not address whether it would be appropriate to recall a jury after discharge in a criminal case22. The question of a power to recall a jury does not arise directly in these appeals. However, the considerations which constrain the exercise of that power are also relevant to the asserted inherent power to alter or set aside a verdict on the basis of evidence from members of the jury. A post-discharge recall was considered by the Supreme Court of Canada in R v Burke23. The jury foreperson had cleared his throat while announcing the verdict, obscuring the jury's intended verdict of "guilty" and resulting in the erroneous recording of the verdict as "not guilty". Departing from its previous decision in R v Head24, the Court held that a trial judge retains a narrow post- discharge jurisdiction for the purposes of enquiring into an alleged error in the verdict, limited to cases where there can be no reasonable apprehension of bias on the part of the jury when recalled25. The majority of the Court in Burke found that such an apprehension existed on the facts of the case because, among other factors, the jury had been dispersed for a day before they were recalled and the trial judge's post-discharge enquiry to the jury took place over a number of days during which news articles describing the incident were published26. That was not, however, a case like the present case in which the other members of the jury remained silent while a verdict clearly heard by all of them and by the court was delivered by the foreperson. And the present case was not a case in which the exposure of jurors to external influences after they had dispersed could be negatived, although no such exposure was suggested. 22 136 S Ct 1855 at 1895 (2016). 23 [2002] 2 SCR 857. 24 [1986] 2 SCR 684. 25 [2002] 2 SCR 857 at 885 per Iacobucci, Major, Binnie and LeBel JJ, McLachlin CJ, L'Heureux-DubΓ©, Gonthier and Bastarache JJ agreeing at 863. 26 [2002] 2 SCR 857 at 897-899 per Iacobucci, Major, Binnie and LeBel JJ, Arbour J agreeing at 906. Bell In R v Tawhiti27 the Court of Appeal of New Zealand, in circumstances which, it might be thought, presented a stronger case for intervention than the present, refused an application by an appellant for an order that jurors who had found him guilty of murder be interviewed about the verdict28. At the time the verdict was delivered the jurors were asked whether they were all agreed. The court records showed no dissent from any of them. After their discharge counsel for the appellant received, at his home, a telephone call from a juror which led to a meeting in which three jurors told him that the jury had been equally divided between verdicts of murder and manslaughter. Eichelbaum CJ, delivering the judgment of the Court, observed29: "The principle described as the finality of verdicts has several facets but one of particular significance here is that when a verdict is delivered in the sight and hearing of all the jury without protest, their assent to it is conclusively inferred. Subject to extraordinary exceptions, such as where jurors could not see or hear what was taking place when the verdict was announced, affidavits that jurors did not agree with the verdict will not be received." What is "conclusively inferred", where there is no dissent and no timely correction, is that the verdict delivered by the foreperson is the verdict of the jury. The presumption that the verdict is correctly communicated is rebuttable when it is not delivered in the sight and hearing of all jurors or if it can be shown that one or more of the jurors was not competent to understand the proceedings30. As a general principle, the presumption will not be rebutted by evidence admitted simply to show that a juror did not agree with the verdict or that the juror's apparent agreement resulted from a misapprehension31. There is nothing to suggest that in this case, the foreperson's post-verdict communication to the court was done after any discussion with members of the jury. The jury had been discharged and were not recalled at the time of the communication. As appears below, when the matter was before the trial judge again on 2 October 2014, her Honour took the view that the question about the verdicts was out of her hands, a view which was evidently supported by the DPP. Within a few days, as appears 27 [1994] 2 NZLR 696. 28 [1994] 2 NZLR 696 at 699-700. 29 [1994] 2 NZLR 696 at 699. 30 Nanan v The State [1986] AC 860 at 871-872. 31 [1986] AC 860 at 870. Bell in the next part of these reasons, sentencing was completed and the record of the verdicts and judgments formally entered without any dissent on the part of the DPP. Perfecting the orders When the matter came on for sentencing submissions on 2 October 2014, counsel for Jakaj, evidently reflecting the position of all counsel, requested the trial judge, in closed court, to defer hearing submissions on sentencing until the Crown had determined what, if any, course it intended to take about the verdicts. The trial judge said that the matter was out of her hands. Counsel for the DPP suggested that the jury were probably "functus officio" and that the trial judge no longer had a residual discretion to try and remedy any such defect. Notwithstanding that position, the DPP was later to invoke the original jurisdiction of the Court and its inherent power in support of his first application to quash the verdicts. The trial judge proceeded, in open court, to hear sentencing submissions. After the submissions were completed, the hearing was adjourned to 7 October 2014 when her Honour sentenced each of the appellants. NH was sentenced to three years imprisonment to be served in a youth training centre subject to a non- parole period of one year and two months. Jakaj was sentenced to five years and three months imprisonment with a non-parole period of four years and one month. Zefi was sentenced to eight years and 10 months imprisonment with a non-parole period of six years and 10 months. Stakaj was sentenced to five years and five months imprisonment with a non-parole period of four years and three months. Following sentencing, the verdicts delivered and sentences imposed with respect to each of the appellants were recorded in documents entitled "Report of Prisoner Tried at the Criminal Sessions of the Supreme Court of South Australia Held at Adelaide". In relation to each appellant, the "outcome details" were recorded as "acquitted" of murder and "convicted" of the alternative offence of manslaughter. It was separately recorded that the jury had returned a majority verdict of not guilty to murder. The details of the relevant appellant's sentence for manslaughter were also set out. Each report was signed by the judge's associate under the title Clerk of Arraigns and by the trial judge. It was common ground in the Full Court that the judgments of acquittal and conviction, reflecting the trial court's acceptance of the verdicts of the jury, were perfected, at the latest, when each of the Reports was signed. That is a matter of substance and not just of form. Five Justices of this Court cautioned in Bell Burrell v The Queen32 that the use of the term "perfected" must not be seen as giving form and procedure precedence over substance and principle. The real question is "What is to mark the point at which a court concludes its consideration of a controversy?" Their Honours said33: "Identifying the formal recording of the order of a superior court of record as the point at which that court's power to reconsider the matter is at an end provides a readily ascertainable and easily applied criterion. But more than that, identifying the formal recording of the order as the watershed both marks the end of the litigation in that court, and provides conclusive certainty about what was the end result in that court." When the matter came before the Full Court of the Supreme Court of South Australia the exercise of the original jurisdiction of the Supreme Court initiated by the information against the appellants had been completed and exhausted subject to the outcome of statutory appellate processes. Those processes could not be invoked by the DPP because appeals against acquittal in South Australia are precluded save in circumstances not relevant to these proceedings34. The DPP's applications On 16 January 2015, the DPP filed his first application, headed "In the Supreme Court of South Australia, Criminal Jurisdiction". He sought what amounted to an interlocutory direction that affidavits be taken from the foreperson and the other members of the jury in relation to the correctness of the answers of the foreperson when being asked whether the "not guilty" verdicts on a charge of murder were the verdicts of 10 or more of the jury. He sought final orders that the verdicts and the corresponding judgments of acquittal of murder and conviction of manslaughter be "expunged or quashed". The DPP also sought an order "in the exercise of the Court's inherent jurisdiction and in the interests of justice, [that] a new trial be ordered for each defendant on the charge of Murder." The stated grounds of the application included the following: The Supreme Court has a duty to use the powers at its disposal to protect its processes from abuse. 32 (2008) 238 CLR 218 at 224 [18] per Gummow ACJ, Hayne, Heydon, Crennan and Kiefel JJ; [2008] HCA 34. 33 (2008) 238 CLR 218 at 224 [20] per Gummow ACJ, Hayne, Heydon, Crennan and 34 CLC Act, s 352(1)(ab). Bell The ability of the Court to protect its processes cannot be restricted to defined or closed categories. Considerations which bear on the public confidence in the administration of justice must reflect contemporary values and the circumstances of each case. There is admissible evidence that the Court was misled into accepting the so called 'verdicts' of 'Not Guilty' and entering judgements of acquittal for each defendant on the charge of Murder. This evidence also proves the prosecution and each defendant were misled. The incorrect or misleading statements by the foreperson were made in answer to questions designed to safeguard the Court's processes. Howsoever the false statements are described, the consequences and effects are the same. The Court's jurisdiction is not dependent upon a finding of criminal behaviour or malice. The Court's retained inherent jurisdiction permits the Court to interfere with perfected judgments in the exercise of the Court's jurisdiction to protect its processes and when it is in the interests of justice to do so." The DPP also sought an order that his application be referred to the Full Court for hearing and determination concurrently with the appeals and applications for permission to appeal lodged by NH and Stakaj. No statutory basis for the application was disclosed. On 11 February 2015, Sulan J gave a direction that the Registrar obtain affidavits from each of the jurors. Pursuant to that direction, affidavits were obtained from each juror, who all adopted the answers given to the written questions put to them between 24 and 26 September 2014. On 3 March 2015, the DPP wrote to the associate to Vanstone J advising that he intended to apply to her Honour to reserve questions for consideration and determination by the Full Court pursuant to s 350 of the CLC Act. The DPP also attached a document outlining relevant facts and questions which had been served on the appellants. He requested that the application to reserve questions for consideration and determination by the Full Court be listed before her Honour at the earliest convenient time. Vanstone J responded, via her associate, on 4 March 2015 doubting that she had authority under s 350(4) of the CLC Act, or otherwise, to reserve a question of law. She proposed to await directions from the Full Court. Bell A further application was filed by the DPP on 5 March 2015, purportedly pursuant to s 350(6) of the CLC Act. He sought an order that Vanstone J refer to the Full Court five questions of law for its consideration and determination β first as to the admissibility of the affidavits of the jurors, second and third as to whether the not guilty verdicts in relation to murder and the guilty verdicts in relation to manslaughter were unlawful verdicts and fourth, whether, if so, the judgments of acquittal and conviction were also unlawful. The fifth question was whether the Court had power, pursuant to s 351A of the CLC Act, to set aside the judgments of acquittal and of conviction and to order a new trial. That application was referred for hearing by the Full Court concurrently with the hearing of the DPP's application filed on 16 January 2015 and with the appeals of NH and Stakaj. The time at which the application was so referred and the means by which it was referred do not appear from the record. Following the hearing of the applications and appeals, the Full Court reserved its decision and on 25 September 2015 delivered judgment and made the orders on the DPP's first application which were set out earlier in these reasons. No orders were made on the DPP's second application. The appeals by NH and Stakaj Reference should be made to the appeals lodged by NH and Stakaj. On 7 and 13 October 2014 respectively, they appealed and sought permission to appeal to the Full Court against their convictions for manslaughter on a number of grounds35. The first ground was that the jury had failed to first deliberate and return a true verdict of not guilty of murder before proceeding to consider and deliver a majority verdict on the alternative of manslaughter36. The second ground was that such a verdict involved a substantial miscarriage of justice as it was not available until the jury had first reached a verdict of not guilty on the charge of murder. In the alternative, if the verdicts of guilty of manslaughter had been validly returned, each of NH and Stakaj contended that the verdicts were 35 Substituted Grounds of Appeal filed by Stakaj on 21 November 2014 closely mirrored those of NH. In addition to the grounds raised by NH, Stakaj contended that the trial judge had erred in not directing, or not adequately directing, the jury to the effect that they were required to reach a majority verdict of not guilty of murder before delivering a verdict on the alternative of manslaughter. He also raised as a ground of appeal the trial judge's failure to adequately direct the jury in relation to the fact that he had not given evidence at the trial. 36 As noted earlier in these reasons at [16], the verdict of guilty of manslaughter in relation to Stakaj was unanimous. It was not suggested by the Full Court nor in this Court that this error in Stakaj's grounds of appeal was material. Bell against the weight of the evidence and were unsafe and unsatisfactory. Their final ground was that the trial judge had erred in finding that each appellant had a case to answer on the charge of murder or on the alternative of manslaughter. The evidence before the Full Court The Full Court received evidence of the foreperson's affidavit and all but the final paragraph of his statement exhibited to that affidavit, which together set out his view as to whether the verdicts delivered reflected the view of the jury. The Court also received the other jurors' affidavits exhibiting their respective statements in answer to written questions from the Court, but limited to the part of the response to Question 5 which asked whether the verdict of not guilty of murder by majority was correct for each appellant37. In the foreperson's statement, he said that when asked by the associate if the jury were unanimously agreed on a verdict for the charge of murder for each appellant, he had answered "No". He was then asked by the associate if the jury had reached a majority verdict of "not guilty" for the charge of murder, to which he had responded "Yes" for each appellant. A verdict of guilty on the alternative charge of manslaughter was given for each appellant. The foreperson then said: "Immediately after leaving the court room I began to feel unsure about the accuracy of the majority not guilty verdicts given and after arriving home I phoned the Sheriff's Office and asked to come in and speak to the Jury manager to express those concerns. I met with the Jury Manager at approximately 4.50pm on that same day and stated that it was correct that the Jury could not agree on a unanimous verdict of guilty for the charge of murder, however we did not have a majority verdict of not guilty. Upon reflection, when asked if the jury had a majority not guilty verdict for the charge of murder, I should have answered 'No'." Question 5 set out in the remaining jurors' statements, exhibited to their affidavits, was in the following terms: "Please advise whether each verdict rendered was correct: Zefi Not guilty murder β by majority (10 or more) 37 (2015) 123 SASR 523 at 547-548 [71]-[73], 561 [121]. Bell Guilty manslaughter β unanimous Jakaj Not guilty murder β by majority (10 or more) Guilty manslaughter β unanimous Stakaj Not guilty murder β by majority (10 or more) Guilty manslaughter β unanimous Not guilty murder β by majority (10 or more) Guilty manslaughter β by majority (10 or more)." Each of the jurors responded to Question 5 to the effect that there had not been a majority of 10 or more in favour of a verdict of not guilty of murder in relation to any of the appellants. Each agreed, however, that there were unanimous verdicts of guilty of manslaughter in relation to Zefi, Jakaj and Stakaj and a majority of 10 or more in favour of a verdict of guilty of manslaughter in relation to NH. The requirement for a verdict of "not guilty" of the charged offence β Juries Act, s 57(3) The DPP relied upon s 57 of the Juries Act to impugn the "validity" of the verdicts. That argument rested upon the premise that the Court could look behind the verdicts as delivered by the foreperson for the purpose of determining whether they complied with s 57. As explained in these reasons, that premise was wrong. Nevertheless, reference should be made to the terms and operation of s 57. Section 57 provides for majority and alternative verdicts in the following terms: "(1) Subject to subsection (2), where a jury, having retired to consider its verdict, has remained in deliberation for at least 4 hours and the jurors have not then reached a unanimous verdictβ if a sufficient number agrees to enable the jury to return a majority verdictβa majority verdict will be returned; but otherwiseβthe jury may be discharged from giving a verdict. Bell (2) No verdict that an accused person is guilty of murder or treason can be returned by majority. (3) Where an accused person is charged with a particular offence (the major offence) and it is possible for a jury to return a verdict of not guilty of the offence charged but guilty of some other offence for which the person has not been charged (the alternative offence)β the jury must consider whether the accused is guilty of the major offence before considering whether he or she is guilty of the alternative offence; and if the jury reaches a verdict (either unanimously or by majority) that the accused is not guilty of the major offence but then, having been in deliberation for at least 4 hours, is unable to reach a verdict on the question of whether the accused is guilty of the alternative offenceβ the accused must be acquitted of the major offence; and the jury may be discharged from giving a verdict in respect of the alternative offence; and (iii) fresh proceedings may be taken against the accused on a charge of the alternative offence." The term "majority verdict" is defined in s 57(4) and, as in this case, where the jury at the time of returning their verdict consists of 12 jurors, a majority verdict is a verdict in which 10 or 11 jurors concur. South Australia was the first Australian State to introduce a provision for jury verdicts by majority. Section 57(1) as it appeared in the Juries Act as enacted in 1927 provided for majority verdicts of at least 10 in non-capital offences when the jury had been deliberating for at least four hours and were unable to agree upon their verdict. Section 57(2), as originally enacted, was the precursor of s 57(3) as it stands today. When a jury had been unable to reach agreement on a verdict for a capital offence after four hours of deliberation they could be discharged. A proviso followed: "Provided that where in any inquest for a capital offence in which it is competent for the jury to bring in a verdict of manslaughter, the jury has remained in deliberation for four hours and ten of the jurors agree that the accused is guilty of manslaughter, the verdict of such ten jurors that the accused is guilty of manslaughter shall be taken as the verdict of all." Bell The majority verdict in each case was deemed to be "the verdict of all". That is to say that term may be understood as a direction that the majority verdict was to be treated as the collective decision of the jury notwithstanding one or two dissenters. The provision for an alternative verdict in s 57(2) was not conditioned upon the verdict of not guilty of the capital offence. That was, however, the position at common law as appears below. Section 57 was amended in 1976 by the substitution of "murder or treason" for "a capital offence"38 and amended to substantially its current form in 198439. Minor amendments were made in 1994 making the language gender neutral and substituting the word "must" for "shall"40. In the Second Reading Speech for the Bill which enacted the current form of s 57(3) in 1984, it was "New section 57(3) has the effect of overcoming two problems perceived in the operation of section 57 as it presently stands. The first problem is that it is unclear whether a jury must first decide on the question of guilty or not guilty of murder before proceeding to consider the question of guilty or not guilty of manslaughter. The position is made clear by new section 57(3)(a). The second problem is that it is unclear whether a unanimous or majority verdict of not guilty of murder is required before the jury can proceed to consider manslaughter. The amendment provides that the verdict of not guilty of a major offence can be reached by either a unanimous or majority verdict. The only verdict which requires a unanimous verdict is the verdict of guilty of murder or treason." There has been little judicial exegesis of s 57 or its analogues in other States relevant to the present appeals. They were important departures from the common law requirement for unanimity in verdicts and were treated as requiring a strict construction favourable to the accused42. In Cheatle v The Queen43 this 38 Statutes Amendment (Capital Punishment Abolition) Act 1976 (SA), s 16. 39 Juries Act Amendment Act 1984 (SA), s 26. 40 Juries (Jurors in Remote Areas) Amendment Act 1994 (SA), s 11 and Sched. 41 South Australia, Legislative Council, Parliamentary Debates (Hansard), 14 August 42 Newell v The King (1936) 55 CLR 707 at 712 per Latham CJ, 712-713 per Dixon J, 713 per Evatt J; [1936] HCA 50. 43 (1993) 177 CLR 541; [1993] HCA 44. Bell Court held that s 57 could not be applied, by virtue of s 68 of the Judiciary Act 1903 (Cth) or otherwise, to a trial on indictment for an offence against a law of the Commonwealth because s 80 of the Constitution, which mandated trial by jury in such cases, imported the common law requirement of unanimity44. The Court drew a distinction between the decision-making process required for unanimity and that required for a specified numerical majority. Unanimity ensured that the representative character and the collective role of the jury were carried forward into any ultimate verdict45: "A majority verdict, on the other hand, is analogous to an electoral process in that jurors cast their votes relying on their individual convictions." The majority of the Full Court in the present case took the view that s 57 was to be strictly construed, as its provision for verdict by majority was an abridgement of the fundamental common law right to trial by jury, which imported the requirement of unanimity46. The Chief Justice, on the other hand, did not accept that a jury would be precluded, by s 57(3), from returning a verdict of guilty of an alternative offence if they had not first returned a verdict of not guilty of the major offence. It was the sequential interrogation which was a practice of the Court based on the common law which precluded the return of a verdict of guilty of an alternative offence without the jury first returning a verdict of not guilty of the primary offence47. The Chief Justice said48: "The manifest purpose of s 57(3) of the Juries Act is to allow a verdict of not guilty of the major offence to be returned, if such a verdict is reached, before the discharge of the jury if it cannot reach a verdict on the alternative offence. In that way a defendant is not placed in jeopardy of conviction of the major offence on his subsequent trial if the jury on the first trial would have acquitted him of that offence. Section 57(3)(a) of the Juries Act requires only that the jury must first consider whether the accused is guilty of the major offence before considering his or her guilt of the alternative offence. There is no evidence to suggest, nor could there 44 (1993) 177 CLR 541 at 552. 45 (1993) 177 CLR 541 at 553. 46 (2015) 123 SASR 523 at 550 [80]. 47 (2015) 123 SASR 523 at 541 [46]. 48 (2015) 123 SASR 523 at 541 [47]. Bell ever be because it goes to the deliberations of the jury, that that requirement was breached." In this Court, the DPP did not seek to support the reasoning of the majority in the Full Court by reference to its construction of s 57(3). Rather, he founded his case upon the proposition that the foreperson miscommunicated the jury's verdicts with respect to murder to the trial judge. The appellant Zefi adopted the reasoning of Kourakis CJ that s 57(3) was facultative, allowing a verdict of not guilty of the major offence to be returned if the jury could not reach a verdict on the alternative offence. The appellant NH submitted, inter alia, that s 57(3)(a) required no more than consideration of whether the accused was guilty of the major offence and did not require a verdict of not guilty of the major offence before proceeding to determine guilt of the alternative offence. Counsel for NH accepted that his construction of s 57 implied a displacement of the common law, where a verdict of not guilty of the major offence was put before proceeding to the alternative. The common law position, stated in Gammage v The Queen49 by Kitto J and quoted with approval by this Court in Stanton v The Queen50, was that: "The common law, authorizing as it did a verdict of guilty of manslaughter on an indictment for murder, always made it a condition of the validity of that verdict that the jury should first have returned a verdict of not guilty of murder." The Second Reading Speech indicated that it was a purpose of s 57(3)(a) that the jury decide on the question whether the accused was not guilty of the major offence before proceeding to the question whether the accused was guilty or not guilty of the alternative offence. The text of s 57(3)(a) is open to that construction. That construction being open, and according with the common law and with the statutory purpose, it is the preferred construction. That conclusion, although it played an important part in the reasoning of the Full Court, is peripheral to the real issue in this case. The real issue is whether the Court was empowered to look behind the verdicts as communicated in open court by the foreperson. 49 (1969) 122 CLR 444 at 453; [1969] HCA 68. 50 (2003) 77 ALJR 1151 at 1155 [23]; 198 ALR 41 at 47; [2003] HCA 29. Bell Unless the verdicts of not guilty which led to the judgments of acquittal can be impugned, no question of non-compliance with s 57(3) or the common law requirement for a verdict of not guilty of murder arises. The Court was required to act upon that verdict in entering, as it did in this case for each appellant, a judgment of acquittal of murder. Jurisdiction of the Supreme Court β Supreme Court Act 1935 (SA) It is necessary to identify statutory provisions relevant to the jurisdiction and powers of the Supreme Court of South Australia which were in question in the appeals to this Court. Section 6 of the Supreme Court Act 1935 (SA) continued the existence of the Supreme Court of South Australia as: "the superior court of record, in which has been vested all such jurisdiction (whether original or appellate) as is at the passing of this Act vested in, or capable of being exercised by that court." Section 17(1) provided that the Court shall be a court of law and equity. Section 17(2) vested in the Court: the like jurisdiction, in and for the State, as was formerly vested in, or capable of being exercised by, all or any of the courts in England, following: The High Court of Chancery, both as a common law court and as a court of equity: The Court of Queen's Bench: (iii) The Court of Common Pleas at Westminster: (iv) The Court of Exchequer both as a court of revenue and as a court of common law: The courts created by commissions of assize: such other jurisdiction, whether original or appellate, as is vested in, or capable of being exercised by the court: such other jurisdiction as is in this Act conferred upon the court." Bell Section 17 conferred general civil jurisdiction on the Supreme Court and, by virtue of s 17(2)(a)(ii), jurisdiction over all indictable criminal offences51. The Supreme Court Act, importing, by reference, the jurisdiction of the English common law courts, did not thereby confer appellate jurisdiction on the Supreme Court in respect of convictions on information. Appellate jurisdiction generally was not a common law creation but a creation of statute. Criminal appeals were not provided for in the United Kingdom until the establishment of the Court of Criminal Appeal by the Criminal Appeal Act 1907 (UK)52. Jurisdiction to hear appeals against conviction and sentence was conferred upon the courts of the Australian States thereafter53. As appears below, the source of the jurisdiction of the Supreme Court of South Australia to entertain appeals against conviction is to be found in the CLC Act. There is no provision in the CLC Act for an appeal by the Crown against a verdict of acquittal by a jury unless that verdict was directed by the trial judge54. Pursuant to s 48 of the Supreme Court Act, and subject to any express enactment and the rules of court, the jurisdiction vested in the Supreme Court shall be exercised either by the Full Court or by a single judge sitting in court55. The Full Court is the Supreme Court consisting of not less than three judges56. It is to hear and determine all applications for new trials and all questions of the consideration of, or directed to be argued before, the Full Court57. Questions of law may be reserved by a judge or master for the consideration of the Full to or reserved for law referred 51 Selway, The Constitution of South Australia, (1997) at 113 [8.3.2]. 52 Lacey v Attorney-General (Qld) (2011) 242 CLR 573 at 578-579 [8]-[9] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ; [2011] HCA 10. 53 Criminal Code Amendment Act 1911 (WA), s 10; Criminal Appeal Act 1912 (NSW), s 5(1); Criminal Code Amendment Act 1913 (Q), ss 3, 8; Criminal Appeal Act 1914 (Vic), s 3; Criminal Appeals Act 1924 (SA), s 5; Criminal Code (Tas), s 401(1) as enacted by the Criminal Code Act 1924 (Tas). 54 CLC Act, s 352(1)(ab)(ii). 55 Supreme Court Act, s 48(1). 56 Supreme Court Act, s 5(1) definition of "Full Court". The Full Court may comprise two judges in circumstances not material for present purposes. 57 Supreme Court Act, s 48(2)(a)(i) and (iv). Bell Court58. Its jurisdiction in such a case is the original jurisdiction of the Supreme Court invoked in the matter before the single judge or master. Appellate proceedings in the Supreme Court β CLC Act The CLC Act is the only source of the Supreme Court's jurisdiction to entertain appeals against conviction on information. Part 11 of the CLC Act is entitled "Appellate proceedings". Appeals against conviction and sentence are provided for in Div 3 of Pt 11. Section 352 provides for appeals to the Full Court by persons convicted on information. The appeals are as of right on any ground that involves a question of law alone. Otherwise they require the permission of the Full Court or the certificate of the trial court59. In the case in which a person is tried on information and acquitted, there is no circumstance relevant to these proceedings in which the DPP can appeal against the acquittal. An appeal against an acquittal lies only if the trial is by judge alone or if the trial was by jury and the judge directed the jury to acquit the person60. The powers of the Full Court on an appeal against conviction are set out in common form terms in s 353. Subject to special provisions of the CLC Act, the Full Court shall, if it allows an appeal against conviction, quash the conviction and either direct a judgment and verdict of acquittal to be entered or direct a new trial61. Section 350, which appears in Div 2 of Pt 11 under the heading "Reference of questions of law", provides for the reservation of "relevant questions". A relevant question is defined in that section as "a question of law" and includes a question about how "a judicial discretion should be exercised or whether a judicial discretion has been properly exercised."62 A court by which a person has been, is being or is to be tried or sentenced for an indictable offence may reserve for consideration and determination by the Full Court a relevant 58 Supreme Court Act, s 49(1). 59 CLC Act, s 352(1)(a). 60 CLC Act, s 352(1)(ab). 61 CLC Act, s 353(2). 62 CLC Act, s 350(1). Bell question on an issue antecedent to trial or relevant to the trial or sentencing of the defendant63. Section 350(4) provides: "A court before which a person has been tried and acquitted of an offence must, on application by the Attorney-General or the Director of Public Prosecutions, reserve a question antecedent to the trial, or arising in the course of the trial, for consideration and determination by the Full Court." The provisions evidently relied upon in the DPP's second application were s 350(5) and (6), which respectively provide: "(5) The Full Court may, on application under subsection (6), require a court to refer a relevant question to it for consideration and determination. (6) An application for an order under subsection (5) may be made byβ ... the Director of Public Prosecutions". There is also a requirement that when a court reserves a question for the consideration and determination of the Full Court, the presiding judge must state a case setting out the question reserved, the circumstances out of which the reservation arises and any findings of fact necessary for the proper determination of the question reserved64. No case was stated for the Full Court. The Full Court in considering a question reserved under s 350 is not exercising appellate jurisdiction. Its powers on such a reservation are set out in s 351A, which provides that the Full Court may determine a question reserved under Pt 11 and make consequential orders and directions65. There are limits on those powers, including that set out in s 351A(2)(c): "if the defendant has been acquitted by the court of trial, no determination or order of the Full Court can invalidate or otherwise affect the acquittal." 63 CLC Act, s 350(2). 64 CLC Act, s 351(1). 65 CLC Act, s 351A(1). Bell In this case, the Full Court, having made the orders it did on the DPP's application of 16 January 2015, did not deal with his application purporting to be made pursuant to s 350(6). In that respect Gray and Sulan JJ said66: "For completeness, we note that it is unnecessary to decide the Director's application pursuant the Criminal Law Consolidation Act as we have found that the Court does have an inherent power, within its inherent jurisdiction, to overturn the verdicts of acquittal and order a retrial. We note, however, that it is unlikely that Parliament wished to confer such a power on the Court by virtue of that legislation." to s 351A of That last sentence could well have raised the obvious question whether, given the statutory provisions referred to, there could be any inherent power in the original jurisdiction of the Court to overturn verdicts of acquittal and order a retrial. In this case, the inherent power as defined and applied by the majority in the Full Court depended upon identification of an abuse of the Court's process residing in an innocent error by the foreperson and other members of the jury in responding to the associate's question in relation to the verdict of not guilty of murder. The jurisdiction and powers of the Court invoked by the DPP's application It is necessary, in considering these appeals, to identify the jurisdiction of the Supreme Court which the DPP invoked in his application of 16 January 2015. It was clearly not the appellate jurisdiction conferred by the CLC Act. The application was headed "In the Supreme Court of South Australia, Criminal Jurisdiction". It was brought in the original jurisdiction of the Court. The only relevant original jurisdiction was that which the DPP had invoked when filing the information charging the appellants which led to their trial and the verdicts and orders which followed. Assuming, for the sake of argument, that that jurisdiction was not exhausted when the verdicts and sentences were formally recorded, the referral of questions to the Full Court on the first application did not change its nature. As appears below, the "inherent jurisdiction" relied upon by the DPP and the Full Court to authorise the orders made on the application is not an additional head of jurisdiction. It is a collection of powers in aid of jurisdiction. 66 (2015) 123 SASR 523 at 571 [165]. Bell The decision of the Full Court In their joint judgment, the majority reasoned as follows: Courts have admitted evidence of material irregularity in proceedings and, if a miscarriage of justice has occurred, overturned the conviction67. The foreperson's response indicating that each of the "not guilty" verdicts on the charge of murder in relation to each defendant was the verdict of 10 or more of the jury when the correct response was "No" was a material irregularity. It resulted in unlawful verdicts pursuant to s 57 of the Juries Act68. This step in the reasons, preceding the finding as to admissibility of the affidavit evidence, should be read as a statement about the content of the proffered evidence, not as a finding of fact. The public pronouncement by the foreperson of the results of the jury's deliberations was not part of those deliberations. If it did not reflect the true verdicts then the Court could have regard to evidence which established that fact69. The Supreme Court has inherent jurisdiction to prevent the abuse of its processes. The abuse of process arose from the Court's acceptance of the unlawful verdicts on the premise that the answers given by the foreperson were true and accurate70. If it was necessary to point to some conduct in the proceedings giving rise to the abuse, the relevant abuse of process arose out of the foreperson's mistake in the responses to the questions of the associate and the 67 (2015) 123 SASR 523 at 558 [111]. 68 (2015) 123 SASR 523 at 559 [113]. 69 (2015) 123 SASR 523 at 561 [119]. 70 (2015) 123 SASR 523 at 564 [133], 565 [139]. The latter proposition is involved in the acceptance by the Court of the submissions made by the Solicitor-General which were set out in the joint reasons for judgment. Bell unanimous mistake made by the other members of the jury in acquiescing to those responses at the time of the delivery of the verdicts71. The relief sought was not precluded by the finality rule in relation to the jury's verdicts because the requirements of s 57 had not been met. No valid verdicts had been made. The Court, prima facie, had an inherent power to recall the order72. It was unnecessary to decide the DPP's application dated 5 March 2015. The Court had an inherent power within its inherent jurisdiction to overturn the verdicts of acquittal and order a retrial73. The Chief Justice was not persuaded that the Court had any power on application by the DPP to set aside the verdicts of not guilty of murder and, as a necessary consequence, the convictions of manslaughter74. The Court, he said, should not abrogate the common law principle of inviolability of judgments of acquittal based on jury verdicts75. The Chief Justice, as earlier explained, took the view that the evidence did not establish a contravention of s 57(3) of the Juries Act. The case before the Court did not concern a failure to require the jury to decide. It was a case of the foreperson allegedly returning a "false" verdict of not guilty of the major offence when the jury had not resolved to return that verdict76. The Chief Justice would have dismissed the DPP's application to set aside the judgments of acquittal of murder, and would not have set aside the convictions of manslaughter on the part of Zefi and Jakaj. He would have dismissed the DPP's application made pursuant to s 350 of the CLC Act77. 71 (2015) 123 SASR 523 at 565 [140]. 72 (2015) 123 SASR 523 at 570 [159]. 73 (2015) 123 SASR 523 at 571 [165]. 74 (2015) 123 SASR 523 at 540 [42]. 75 (2015) 123 SASR 523 at 541 [45]. 76 (2015) 123 SASR 523 at 541-542 [47]-[48]. 77 (2015) 123 SASR 523 at 542 [49]. Bell In the appeals against conviction by NH and Stakaj, Kourakis CJ held that the evidence tendered by the DPP was admissible to the extent that it showed that the foreperson delivered verdicts of not guilty of murder which the jury had not resolved to return and that, by reason of that miscommunication, there had been a miscarriage of justice in the convictions of NH and Stakaj. The Chief Justice would have set aside the convictions of manslaughter and would have listed the appeals of NH and Stakaj for argument on the unsafe verdict ground. However, because of the conclusion reached by the majority on the DPP's first application, there were no convictions against which an appeal could be brought pursuant to s 353 (scil: s 352) of the CLC Act. There was therefore no utility in hearing from NH and Stakaj on their unsafe verdict grounds78. The reasoning of the Full Court requires a consideration of the inherent jurisdiction of the Supreme Court in relation to a perfected order of the Court, specifically, as in this case, a judgment of acquittal resting upon a jury verdict of not guilty. The inherent jurisdiction of the Supreme Court The statute which vested in the Supreme Court the like jurisdiction of the courts of common law and chancery conveyed with that vesting "inherent jurisdiction". As this Court said in Keramianakis v Regional Publishers Pty Ltd, the inherent jurisdiction is a power described generically as "the inherent power necessary to the effective exercise of the jurisdiction granted"79. It is a power or collection of powers that comes with the status of the Supreme Court of a State as a superior court of record80. Contrary to the submissions of the DPP, and the findings of the majority of the Full Court81, inherent jurisdiction is not a "separate head of jurisdiction". Reliance for that proposition was placed upon the observations of Dawson J in Grassby v The Queen82. His Honour there spoke of the exercise by a superior court of inherent power in the discharge of its general 78 (2015) 123 SASR 523 at 533-534 [20]. 79 (2009) 237 CLR 268 at 280 [36]; [2009] HCA 18. 80 R v Forbes; Ex parte Bevan (1972) 127 CLR 1 at 7 per Menzies J, Barwick CJ, Walsh J and Stephen J agreeing at 5, 9, 10; PT Bayan Resources TBK v BCBC Singapore Pte Ltd (2015) 89 ALJR 975 at 982 [37] per French CJ, Kiefel, Bell, Gageler and Gordon JJ; 325 ALR 168 at 177; [2015] HCA 36. 81 (2015) 123 SASR 523 at 562 [125]. 82 (1989) 168 CLR 1; [1989] HCA 45. Bell responsibility for the administration of justice83. He did not draw a relevant distinction between inherent jurisdiction and inherent power. However, the distinction between jurisdiction and power is of importance. As five Justices of this Court observed in PT Bayan Resources TBK v BCBC Singapore Pte Ltd84: "'Jurisdiction' is a word of many meanings. The term 'inherent jurisdiction' has been described as 'elusive', 'uncertain' and 'slippery'. The difficulty is minimised if the term is confined to its primary signification: to refer to the power inhering in a superior court of record administering law and equity to make orders of a particular description. For present purposes, inherent jurisdiction can be used interchangeably with 'inherent power'." (footnotes omitted) Inherent jurisdiction understood not as authority to adjudicate, but as inherent power, may be deployed in the exercise of federal jurisdiction conferred on Supreme Courts pursuant to s 39(2) of the Judiciary Act or some other Commonwealth law85. As Toohey J said in Harris v Caladine86 in a passage repeatedly quoted in this Court: "The distinction between jurisdiction and power is often blurred, particularly in the context of 'inherent jurisdiction'. But the distinction may at times be important. Jurisdiction is the authority which a court has to decide the range of matters that can be litigated before it; in the exercise of that jurisdiction a court has powers expressly or impliedly conferred by the legislation governing the court and 'such powers as are incidental and necessary to the exercise of the jurisdiction or the powers so conferred'." (citations omitted) 83 (1989) 168 CLR 1 at 16. 84 (2015) 89 ALJR 975 at 982 [38] per French CJ, Kiefel, Bell, Gageler and Gordon JJ; 325 ALR 168 at 177. See also Condon v Pompano Pty Ltd (2013) 252 CLR 38 at 59-61 [39]-[42] per French CJ; [2013] HCA 7. 85 PT Bayan Resources TBK v BCBC Singapore Pte Ltd (2015) 89 ALJR 975 at 982 [39] per French CJ, Kiefel, Bell, Gageler and Gordon JJ; 325 ALR 168 at 177-178. 86 (1991) 172 CLR 84 at 136; [1991] HCA 9. Quoted in eg Australian Securities and Investments Commission v Edensor Nominees Pty Ltd (2001) 204 CLR 559 at 590 [64] per Gleeson CJ, Gaudron and Gummow JJ; [2001] HCA 1 and Batistatos v Roads and Traffic Authority (NSW) (2006) 226 CLR 256 at 263 [5] per Gleeson CJ, Gummow, Hayne and Crennan JJ; [2006] HCA 27. Bell The species of the genus of the inherent power of the Supreme Court of South Australia were aptly described by the late Bradley Selway, a former Solicitor-General for South Australia and Justice of the Federal Court, in his book on the Constitution of South Australia87. They are to be found in all superior courts. They include the powers to punish contempt, to grant injunctions, to protect the subject matter of the litigation, to correct accidental slips and omissions in court records, including in orders of the court, and to stay proceedings in order to prevent the abuse of the processes of the court. The last mentioned is an aspect of the inherent power described by Master Jacob in 1970, in a much cited article, as the power to maintain the authority of the court and to prevent its processes from being obstructed and abused88. The inherent power is limited by the general principle of the finality of litigation which has repeatedly been affirmed by this Court89: "A central and pervading tenet of the judicial system is that controversies, once resolved, are not to be reopened except in a few, narrowly defined, circumstances." That principle informs the scope of the Supreme Court's power to correct a judgment or order. There is an inherent power to correct errors before orders are formally recorded90. That is not applicable in this case. It was common ground that the judgments of acquittal and conviction were perfected at the latest after sentencing when the Reports of Prisoners were completed and signed. The inherent power to correct an order after it is perfected by being drawn up as a record of the court is very limited. In such a case the proceeding, apart from any statutory power to the contrary, is at an end in that court and is in 87 Selway, The Constitution of South Australia, (1997) at 114-116 [8.3.5]. 88 Jacob, "The Inherent Jurisdiction of the Court", (1970) 23 Current Legal Problems 89 D'Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at 17 [34]; [2005] HCA 12. See also Burrell v The Queen (2008) 238 CLR 218 at 223 [15] per Gummow ACJ, Hayne, Heydon, Crennan and Kiefel JJ; Achurch v The Queen (2014) 253 CLR 141 at 152 [14] per French CJ, Crennan, Kiefel and Bell JJ; [2014] HCA 10. 90 Smith v NSW Bar Association (1992) 176 CLR 256 at 265 per Brennan, Dawson, Toohey and Gaudron JJ; [1992] HCA 36; Achurch v The Queen (2014) 253 CLR 141 at 153 [17] per French CJ, Crennan, Kiefel and Bell JJ. Bell substance beyond its recall91. That does not prevent limited correction of an order after final entry so that the record represents what the court pronounced or intended to pronounce. That aspect of the power is called the "slip rule". However, it does not permit reconsideration or alteration of the substance of the result that was reached and recorded92. The present case was not one in which the record did not represent what the Court pronounced or intended to pronounce as its order. The judgments of acquittal and conviction were made by the trial judge acting upon the verdicts of the jury. The slip rule was simply not engaged in this case. The majority in the Full Court characterised the foreperson's error and the other jurors' acquiescence in it as an abuse of process. Kourakis CJ in dissent observed that93: "A decision made by a constituent part of a court may be right or wrong in law but it is not possible to characterise it as an abuse of itself." The DPP, supporting the majority's reasoning on the issue of abuse of process, submitted that the concept did not require the agency of an "abuser". The question was whether there was an unacceptable threat to the institutional integrity of the Court. Such a threat, it was said, could arise from an agency within the Court's own processes. The wide concept of abuse of process adopted by the majority and propounded by the DPP in this Court should be rejected. It seems to have few if any limits. As was submitted for the appellant Zefi, if the power to prevent abuse of process extended as far as suggested by the majority in the Full Court, and by the DPP, appellate and supervisory judicial review jurisdiction would be virtually redundant. The concept of abuse of process is a broad one, as it must be, to cover the variety of means which human ingenuity can devise to misuse the processes of the court. As has been said repeatedly in this and other courts, its categories are 91 Achurch v The Queen (2014) 253 CLR 141 at 153-154 [17] per French CJ, Crennan, Kiefel and Bell JJ citing Bailey v Marinoff (1971) 125 CLR 529 at 530 per Barwick CJ; [1971] HCA 49. 92 Burrell v The Queen (2008) 238 CLR 218 at 224-225 [21] per Gummow ACJ, Hayne, Heydon, Crennan and Kiefel JJ. 93 (2015) 123 SASR 523 at 538 [34]. Bell not closed94. Whatever their limits, however, those categories do not extend to cover innocent error by a jury foreperson in delivering a verdict, nor acquiescence by other members of the jury in that delivery. That being so, a major premise of the Full Court's intervention, which would have impermissibly expanded the inherent power of the Court, is falsified. There were, in any event, barriers to any such operation of the inherent power. For reasons already explained, the verdicts delivered by the foreperson, without dissent or correction by the jury, translated by the trial judge into perfected judgments of acquittal and conviction, were beyond the power of the Court to amend or set aside in the exercise of inherent power. The statutory appellate and reference provisions expressly precluded appeals against acquittals and orders effecting acquittals in the circumstances relevant to this case. Absent inherent power to intervene, there was no warrant for the Full Court to admit affidavit evidence from members of the jury. The conclusions reached thus far are sufficient to support orders that the appeals should be allowed. It is, however, desirable to add something about the relationship between verdict and judgment. Verdict and judgment The verdict of a jury in a criminal case is not the judgment of the court. The judgment of the court is that of conviction or acquittal entered upon acceptance of the verdict. When the Full Court hears an appeal against conviction it is hearing an appeal against a judgment of the court at first instance. It must allow the appeal if it thinks that the verdict of the jury should be set aside on the grounds set out in s 353(1) of the CLC Act. It is not required by the statute to make an order in those terms, although the power of courts to make such orders in criminal appeals is well established95. Section 353(2) provides that the Court must, if it allows the appeal, "quash the conviction and either direct a judgment and verdict of acquittal to be entered or direct a new trial." On the reservation of a question under s 350, the Full Court may, under s 351A, determine the question and make consequential orders and directions. Examples attached to the text of s 351A include setting aside a conviction and ordering a new trial. They do not extend to setting aside an acquittal. 94 Jeffery & Katauskas Pty Ltd v SST Consulting Pty Ltd (2009) 239 CLR 75 at 93-94 [28] per French CJ, Gummow, Hayne and Crennan JJ; [2009] HCA 43. 95 Chamberlain v The Queen [No 2] (1984) 153 CLR 521 at 530-532 per Gibbs CJ and Mason J; [1984] HCA 7. Bell The juristic character of a verdict is a collective act of the jury as a decision-making body even when their decision is not unanimous but by majority. It can only be done by the jury assembled as such. A guilty verdict reflects a collective finding that all the facts necessary to establish the guilt of the accused, according to the law as directed by the trial judge, have been proven beyond reasonable doubt. Taken by itself, the verdict imposes no liability. It has, however, a legal consequence, which is a judgment of conviction. That is the legally effective act of the trial judge. A verdict of not guilty reflects the decision of the jury that not all of the factual elements necessary to establish the guilt of the accused, according to the law as directed by the trial judge, have been proven beyond reasonable doubt. It is a collective act which can accommodate an individual diversity of opinion among members of the jury as to which elements the prosecution has failed to establish to the requisite standard of proof. The verdict has the legal consequence that a judgment of acquittal is entered by the trial judge. Unless the jury are able to be recalled post-discharge, any subsequent correction to the verdict or setting aside of the verdict by the trial judge or the court on the basis of evidence from the jurors, other than in the exercise of the statutory referral or appellate powers, would require the exercise of the inherent power subject to the narrow constraints already discussed. The majority in the Full Court held that the process in which it was engaged did not involve reviewing a decision in which orders had been finalised and perfected. No valid verdict had been reached. There had been no valid verdict of acquittal. The majority did not go so far as to say that the consequential judgments of acquittal and conviction were invalid, but rather that the public interest in finality, informing the finality principle, was overtaken by the public interest in reaching a fair result96. The DPP took a similar position in his submissions. It is not clear what the Full Court intended by its orders "quashing" the various verdicts. Assuming that those orders should be construed as quashing the judgments of acquittal and conviction, the Court was quashing perfected orders. It did so outside any specific statutory authority and relied entirely upon a broad reading of the inherent power which depended critically upon the Court's erroneous characterisation of the asserted error of the foreperson and the other jurors as an abuse of process. In any event, the verdicts, for the reasons already explained, must be taken to have been the majority verdicts stated by the foreperson. There was debate in this Court about the admissibility of the affidavit evidence from the foreperson and the other jurors to prove the 96 (2015) 123 SASR 523 at 570 [158]. Bell foreperson's mistake. That debate cannot be disentangled from the anterior question of the Court's power to set aside the verdicts. There is a very long-standing rule that evidence of a jury's decision- making processes cannot be received to impeach their verdict. The rule dates back to Lord Mansfield's judgment in Vaise v Delaval97. In that case, in civil proceedings before a jury, one of the jurors deposed on affidavit that the jury having been divided, the other jurors had "tossed up" and the plaintiff won. The affidavit was rejected. Lord Mansfield said98: "The Court cannot receive such an affidavit from any of the jurymen themselves, in all of whom such conduct is a very high misdemeanour: but in every such case the Court must derive their knowledge from some other source: such as from some person having seen the transaction through a window, or by some such other means." It has been said that this was the true beginning of the rule because prior to Vaise v Delaval the practice in England had been to receive a juror's testimony in such cases99. The general rule against admissibility of affidavit evidence from jurors to impeach a verdict feeds back into the question of power. It supports the principle that a verdict declared by the foreperson in the sight and hearing of the other jurors and without their dissent is taken to be their true verdict. Therefore, where the verdict was not delivered in the sight and hearing of one or more of the jurors, evidence may be adduced from them that they did not agree with it100. That is because the court has power to correct a verdict in such a case. So too in cases of fraud or subornation or intimidation, or where a juror or jurors lacks the capacity to understand the proceedings, the court has the requisite power to intervene, and may take evidence in the exercise of that power. That was not this case. 97 (1785) 1 TR 11 [99 ER 944]. 98 (1785) 1 TR 11 at 11 [99 ER 944 at 944] (footnotes omitted). 99 Rosshirt, "Admissibility of Jurors' Affidavits to Impeach Jury Verdict", (1956) 31 Notre Dame Lawyer 484 at 484. 100 Nanan v The State [1986] AC 860 at 871. Bell Conclusion It is not in dispute that the members of the jury could not reach a unanimous verdict of guilty of murder in respect of any of the appellants. It may be that some or all of them thought that because they could not reach unanimity on guilt, a verdict of not guilty of murder must follow. Whether that is right or not, it is not suggested that any of them disagreed with the verdicts that were delivered with respect to manslaughter. The question remains β what is to be done with respect to the appeals of NH and Stakaj against their convictions for manslaughter? Counsel for NH made it clear that his client would not be relying upon the first two grounds in the Notice of Appeal filed in the Full Court, which were based upon the absence of a true verdict of acquittal of murder as vitiating the verdict of guilty of manslaughter. NH would pursue his appeal in the Full Court only on the ground that the verdict of guilty of manslaughter was unsafe and unsatisfactory. Counsel for Stakaj took a different position, wishing to maintain before the Full Court the argument that the affidavit evidence from the jurors was admissible to show that his conviction for manslaughter was vitiated by the failure of the jury to first reach a majority verdict of not guilty of murder. In taking such a position before the Full Court Stakaj would have relied upon the affidavit evidence of the jury to support an order quashing the judgment, in his favour, of acquittal of murder. That raises the question whether, in the exercise of the jurisdiction and powers conferred upon it by the CLC Act, the Full Court could quash a judgment of acquittal on the application of the beneficiary of that judgment. Not surprisingly, the CLC Act is silent on the matter. The powers of the Supreme Court in the exercise of its criminal appellate jurisdiction are statutory. There is no common law power to quash a judgment of acquittal and none is conferred by the CLC Act. In the circumstances, the appropriate disposition in relation to the appeals by both NH and Stakaj is that the Full Court should deal with them but only in relation to the common form grounds. So far as the application of the DPP dated 5 March 2015 is concerned, that application, relying upon statutory power, could not extend to allow the Court to make any order affecting the judgments of acquittal in favour of the appellants. In respect of each of the appellants, the following orders are appropriate: Appeal allowed with costs. Set aside orders 1 to 4 of the Full Court of the Supreme Court of South Australia made on 25 September 2015, and in their place order that: Bell the application of the Director of Public Prosecutions filed on 16 January 2015 be dismissed; the application of the Director of Public Prosecutions filed on 5 March 2015 be dismissed; and the Director of Public Prosecutions pay the appellant's costs of the two applications. In relation to the appellant NH, the following additional order should be made: Remit the matter to the Full Court for further hearing on grounds 3 to 6 of the Notice of Appeal filed in that Court on 7 October 2014. In relation to the appellant Stakaj, the following additional order should be made: Remit the matter to the Full Court for further hearing on grounds 4 to 6 of the Substituted Grounds of Appeal filed in that Court on 21 November NettleJ NETTLE AND GORDON JJ. After a trial by judge and jury in the Supreme Court of South Australia, the foreperson, in answer to questions from the judge's associate, told the Court that the jury found each appellant not guilty of murder but guilty of manslaughter. The questions were asked, and the answers were given, in the presence of all members of the jury and without dissent from any juror. After the verdicts were given, the jury was discharged and separated. Later the same day, the foreperson told a court officer he had mistakenly told the Court that at least ten of the jurors had agreed on a not guilty verdict of murder for each appellant. The Court had no contact from the other jurors. At the direction of the Chief Justice, a signed statement was taken from the foreperson by the Acting Sheriff and, over subsequent days, from each of the other jurors. The signed statements, together with a memorandum by the Acting Sheriff and an affidavit from the judge's associate, were provided to the parties. Sentencing hearings were then held and the appellants were sentenced. Judgments of acquittal and conviction, consistent with the jury's verdict, were entered. The respondent ("the DPP") applied to the Full Court of the Supreme Court of South Australia seeking to quash the verdicts of not guilty of murder and guilty of manslaughter, along with the corresponding judgments of acquittal and conviction, and seeking a new trial of each appellant on the charge of murder. The DPP also sought to have certain questions of law referred to the Full Court101. Two of the appellants (Stakaj and NH) appealed their convictions for manslaughter. Both the DPP and those two appellants sought to rely on the statements made by the jurors to have the relevant judgments set aside. Can a verdict of not guilty on a charge of murder, upon which a judgment of acquittal has been entered and perfected, be set aside after the jury is discharged and has separated and the trial judge is functus officio, on the ground that at least some members of the jury were under a misapprehension as to the need for a verdict, by majority, on the charge of murder? In the circumstances of the present matters, the answer is "No". Applicable principles Acquittal by jury There is no right of appeal at common law. Any rights of appeal are statutory102. Except where provided by statute, the prosecution has no right of 101 s 350(6) of the Criminal Law Consolidation Act 1935 (SA). 102 South Australian Land Mortgage and Agency Co Ltd v The King (1922) 30 CLR 523 at 552-553; [1922] HCA 17; Grierson v The King (1938) 60 CLR 431 at (Footnote continues on next page) NettleJ appeal against a verdict of not guilty. In South Australia, there is no statutory right of appeal or any other grant of jurisdiction or power to set aside a perfected judgment of acquittal discharging an accused after a verdict of not guilty is returned by a jury. Verdicts of not guilty are inviolable except in the most limited of circumstances. Inviolability of a jury verdict Where a trial is completed, the verdict is given and the jury intentionally discharged, the jury is no longer under the charge of the court officer. The jury is free to separate and is separated. The trial judge is functus officio103. A verdict given on behalf of and in the presence of all members of the jury, without dissent, is the verdict of the jury. The act of each juror is judged and determined by the polling of the jury in open court, irrespective of motives or beliefs which may have led to the verdict and irrespective of the deliberations during retirement. The assent to a verdict by a juror is constituted by the express answer, here to the judge's associate, at polling in open court or by the silence that implies assent. The outward act is final104, subject only, in the case of error, to correction before the jury separates105. The purpose of formally polling the jury is to afford an opportunity of free expression by all jurors unhampered by fears or errors in private106. That is the opportunity for jurors, or the jury as a whole, to correct the verdict of the jury before it separates107. Accordingly, the fact that the verdict as delivered was later said, by one or more jurors, to not have been assented to by one or more jurors, or is said to be different from the one informally assented to by one or some of them in the jury 435-436; [1938] HCA 45; Da Costa v Cockburn Salvage & Trading Pty Ltd (1970) 124 CLR 192 at 201-202; [1970] HCA 43. 103 R v Vodden (1853) Dears 229 [169 ER 706]; R v Hodgkinson [1954] VLR 140 at 146-147; R v Gough [1993] AC 646 at 658. 104 Wigmore, Evidence in Trials at Common Law, McNaughton rev (1961), vol 8 at 105 See, eg, R v Cefia (1979) 21 SASR 171; R v Loumoli [1995] 2 NZLR 656; Aylott [1996] 2 Cr App R 169; R v Ciantar (2006) 16 VR 26. 106 Nanan v The State [1986] AC 860 at 871. 107 See R v Parkin (1824) 1 Mood 45 at 46-47 [168 ER 1179 at 1180]; R v Vodden (1853) Dears 229 at 230-231 [169 ER 706 at 707]. NettleJ room, is no ground for later correcting or setting aside the verdict. Moreover, even if a juror were mistaken or unwilling in the assent given in the jury room it would be no ground for later setting aside the verdict if, when the verdict was given without dissent, the juror committed themselves to the verdict as delivered. If not all members of the jury were present when the foreperson delivered the verdict, a new trial may be granted in certain circumstances108. An exception of that kind is unsurprising because there would have been no poll. It is also unlikely in accordance with modern jury practice. Further, a venire de novo may be awarded where evidence is given and accepted that a juror was not competent to understand the proceedings109. Neither of those exceptions arises here and neither needs to be explored further. It is also important to keep in mind the distinction between the verdict of the jury and the judgment entered by the court upon acceptance of that verdict. The above exceptions relate only to the former. Once judgment has been entered and thus perfected, a different principle is engaged β the finality of perfected judgments110. A perfected judgment is final and, subject to its own limited set of exceptions, cannot be set aside. For example, if a jury verdict were obtained by fraud of the accused, a new trial might be granted. The present matters β verdicts entered and judgments perfected For each appellant, a judgment was entered upon the verdicts and that judgment was subsequently perfected. Before a court could exercise any power it might have to set aside a perfected judgment because the underlying verdict is allegedly incorrect, it would first have to be established that the underlying jury verdict fell within one of the limited exceptions to the principle that a jury verdict is inviolable. The DPP and the two appellants who appealed their convictions had to demonstrate that the verdicts could be impugned. Only if that premise were established would the question of power to set aside those perfected judgments, based on those verdicts, arise. 108 Nanan [1986] AC 860 at 871-872. 109 A writ for summoning a new jury panel, or venire, "because of some impropriety or irregularity in the original jury's return or verdict such that a judgment cannot be entered on it": Black's Law Dictionary, 10th ed (2014) at 1789, "venire facias". This results in a trial de novo. See also Nanan [1986] AC 860 at 872. 110 See Burrell v The Queen (2008) 238 CLR 218 at 224 [18]-[20]; [2008] HCA 34. NettleJ In the present matters, the premise was not and could not be established. The verdicts could not be impugned. As will become apparent, the statements said to have been made by the jurors, which were relied upon to demonstrate the alleged error in the verdicts, were inadmissible because each statement fell within the prohibition of the general rule that evidence about jury deliberations is inadmissible to impugn the jury's verdict. Therefore, the further question of what power a court has to set aside a perfected judgment because the underlying verdict is allegedly incorrect is not reached. Jurors' statements inadmissible General rule Evidence from a juror as to what took place in the jury room, either by explanation of the grounds on which the verdict was given or by way of statement as to what the juror believed the effect of the verdict to be, is generally inadmissible111. The same rule applies to discussions between jurors in the jury room112. As this Court recently stated in Smith v Western Australia113: "It is a general rule of the administration of criminal justice under the common law that once a trial has been determined by an acquittal or conviction upon the verdict of a jury, and the jury discharged, evidence of a juror or jurors as to the deliberations of the jury is not admissible to impugn the verdict." So, for example, as Lord Goff of Chieveley summarised in Nanan v The State114, courts have refused to receive evidence from a juror that they did not understand the effect of an answer given by the foreperson to a question from the judge115, or that the juror did not in fact agree with the verdict that was 111 Ellis v Deheer [1922] 2 KB 113 at 121; Nanan [1986] AC 860 at 870. 112 Nanan [1986] AC 860 at 871. See also Smith v The Queen (2015) 255 CLR 161 at 171 [32]; [2015] HCA 27. 113 (2014) 250 CLR 473 at 476 [1]; [2014] HCA 3. 114 [1986] AC 860 at 871. 115 Raphael v Governor and Company of the Bank of England (1855) 17 CB 161 [139 NettleJ announced116, or that the juror disagreed with the verdict but was too frightened to stand up and say so117. The general rule has limits. Those limits are ascertained by reference to the rationale for the rule: to preserve the confidentiality of jury deliberations. That confidentiality needs to be preserved for two purposes. The first is to enable "jurors to approach their task through frank and open discussion knowing that what is said in the jury room remains in that room"118. Open discussion is necessary to ensure the verdict of the jury "is a true one"119. The second is to protect "the finality of the verdict"120. What the DPP and the two appellants who challenged their convictions seek to do in the present matters is inconsistent with the rule and its rationale. The jurors' statements All the jurors were interviewed and provided a statement that was said to suggest that the verdicts of not guilty of murder were incorrect because the prescribed majority for that verdict was never obtained. That emerges most clearly in the statement of the foreperson, who stated that "[u]pon reflection, when asked if the jury had a majority not guilty verdict for the charge of murder, I should have answered 'No'". The other jurors' statements were in the form of answers to questions drafted by the trial judge. The questions posed to each juror were identical. Question 5 was: "Please advise whether each verdict rendered was correct: Zefi Not guilty murder β by majority (10 or more) Guilty manslaughter β unanimous Jakaj Not guilty murder β by majority (10 or more) Guilty manslaughter β unanimous 116 Nesbitt v Parrett (1902) 18 TLR 510. 117 R v Roads [1967] 2 QB 108. See also Nanan [1986] AC 860 at 871. 118 Smith v The Queen (2015) 255 CLR 161 at 171 [33]. 119 See Smith v Western Australia (2014) 250 CLR 473 at 481 [31]. 120 Smith v The Queen (2015) 255 CLR 161 at 172 [35]. NettleJ Stakaj Not guilty murder β by majority (10 or more) Guilty manslaughter β unanimous Not guilty murder β by majority (10 or more) Guilty manslaughter β by majority (10 or more)." The Court below did not admit the entirety of each juror's statement, as some portions obviously went to the deliberations of the jury. For example, one question asked about each juror's "own vote in respect of each accused and each charge". Most of the foreperson's initial statement was admitted, but, for the other jurors, only the answers to question 5 in so far as they related to the murder charge were admitted. Read in isolation, the answers to question 5, together with the admitted part of the foreperson's statement, might be read as indicating that the answers given by the foreperson in court to the judge's associate were not correct. That was the construction adopted by the Court below. However, it is artificial to divorce the answers given to question 5 from the remainder of the jurors' statements. Doing so obscures what the statements actually disclose β that at least some jurors may have been under a misapprehension about the relevant law. Taken as a whole, the statements of several of the jurors, including the foreperson, indicate that they personally may not have appreciated that, before the jury could consider the offence of manslaughter for an appellant, the jury had to reach a not guilty verdict (whether unanimously or by majority) on that appellant's murder charge. This emerges from several of the answers to a question directed to that very issue (question 3), as well as the final discursive section of some of the affidavits. But not every juror's statement disclosed a misapprehension of the law. The content of the statements was not consistent and the parties did not agree what the statements disclosed. Not only do not all of the jurors' statements disclose the same misapprehension or mistake, some jurors' answers to question 3 indicate that they did understand the relevant law. Even taken at their highest, all that the statements show is that some of the jurors may not have understood the law properly but that all jurors agreed in the verdicts that were given in open court and to which there was no dissent. Thus, the general rule about the admissibility of jurors' evidence applied. The jurors' statements were inadmissible. An alleged misapprehension by some jurors in agreeing to a verdict is a misapprehension of a fundamental kind. But the same may be said of other misapprehensions by the jury β as to the facts NettleJ of the case or the applicable law β which can lead to an erroneous verdict. In each of those cases, evidence of misapprehension is inadmissible121. The evidence is inadmissible because it offends the inviolability of the finality of the jury verdict and thus falls within the scope of the exclusionary rule. Importantly, the statutory provisions for appeal by an accused, not the DPP β in particular on the ground that the jury's verdict is unreasonable or cannot be supported having regard to the evidence122 β mark the relevant extent to which the jury's verdict can be challenged. Conclusion The DPP's contention that the verdict of not guilty of the charge of murder for each appellant, which had been perfected, could be set aside after the jury separated and the trial judge was functus officio because each verdict allegedly inaccurately reflected the jury's vote should be rejected. The circumstances in which the verdicts in the present matters were obtained do not fall within any of the narrow exceptions to the rule that a verdict of a jury, especially an acquittal verdict, is inviolable. And none of the statements raised, let alone established, any fact or matter which even suggested that the verdicts were erroneous because of one or more of the established limited exceptions. The statements were inadmissible. For the same reasons, Stakaj and NH's challenge to their convictions on the basis of the jurors' statements fails. For these reasons, we agree with the orders proposed by French CJ, Kiefel 121 Nanan [1986] AC 860 at 872; Biggs v Director of Public Prosecutions (1997) 17 WAR 534 at 544, 558. 122 See, eg, s 353(1) of the Criminal Law Consolidation Act 1935 (SA). |
HIGH COURT OF AUSTRALIA AND APPLICANT MINISTER FOR IMMIGRATION AND MULTICULTURAL AFFAIRS RESPONDENT Shaw v Minister for Immigration and Multicultural Affairs [2003] HCA 72 9 December 2003 ORDER 1. Answer the question reserved in the Case Stated as follows: Question Was s 501(2) of the Migration Act 1958 (Cth) within the legislative powers of the Commonwealth to the extent that it authorised the respondent to cancel the applicant's visa on 17 July 2001? Answer Yes. 2. Costs of the proceeding in the Full Court to be the costs in the matter in the course of which the case was stated. Representation: S J Hamlyn-Harris for the applicant (instructed by South Brisbane Immigration & Community Legal Service Inc) D M J Bennett QC, Solicitor-General of the Commonwealth with M N Allars and B D O'Donnell for the respondent (instructed by Australian Government Solicitor) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Shaw v Minister for Immigration and Multicultural Affairs Constitutional law (Cth) β Powers of the Parliament β Naturalisation and aliens β Applicant born in United Kingdom β Applicant entered Australia in 1974 β Applicant did not acquire Australian citizenship β Cancellation of applicant's visa by Minister β Whether power of cancellation validly extended to applicant β Whether applicant an "alien" for purposes of s 51(xix) of the Constitution β Whether applicant's statutory status as "British subject" at time of entry into Australia inconsistent with classification as "alien" β Whether applicant a "subject of the Queen" for purposes of s 117 of the Constitution. Constitutional law (Cth) β Powers of the Parliament β Whether applicant subject to removal under power with respect to immigration β Whether applicant subject to removal under power with respect to external affairs β Whether implied nationhood power relevant. Constitution, ss 51(xix), (xxvii), (xxix), 117. Citizenship Act 1948 (Cth), s 7. Migration Act 1958 (Cth), ss 15, 501. British Nationality Act 1948 (UK). British Nationality and Status of Aliens Act 1914 (UK). GLEESON CJ, GUMMOW AND HAYNE JJ. The principal issue raised by the Case Stated is whether the power of the Parliament conferred by s 51(xix) of the Constitution to make laws with respect to "naturalization and aliens" supported s 501(2) of the Migration Act 1958 (Cth) ("the Act") in the application of that provision to authorise the respondent ("the Minister") to cancel the applicant's visa on 17 July 2001. The issue should be resolved favourably to the Minister. The power conferred by s 51(xix) supports legislation determining those to whom is attributed the status of alien; the Parliament may make laws which impose upon those having this status burdens, obligations and disqualifications which the Parliament could not impose upon other persons1. On the other hand, by a law with respect to naturalisation, the Parliament may remove that status, absolutely or upon conditions. In this way, citizenship may be seen as the obverse of the status of alienage. The applicant was born to British parents on 27 December 1972 in the United Kingdom of Great Britain and Northern Ireland ("the UK"). He arrived in Australia on 17 July 1974 and has not left Australia since that date. The applicant has not become an Australian citizen pursuant to the Australian Citizenship Act 1948 (Cth) ("the Citizenship Act") and has not applied for Australian citizenship. He is not eligible to vote in this country. That the applicant and his parents may have entered Australia under a Commonwealth programme of assisted passages, a factual matter as to which the Case Stated is silent, would not be inconsistent with his alien status. The applicant was regarded by the Minister as the holder of a transitional (permanent) visa which, unless revoked according to law, permitted him to remain in Australia indefinitely. However, immediately prior to 17 July 2001, the applicant was deemed to have a "substantial criminal record" within the meaning of s 501(7) of the Act. By reason of his criminal record, the applicant did not pass the "character test" specified in s 501(6). On 17 July 2001, the Minister cancelled the applicant's visa in exercise of a power under s 501(2) which was enlivened by the applicant's failure to pass the "character test". That cancellation, by force of s 15, rendered the applicant an "unlawful non-citizen" to whom there applied the provisions respecting removal and deportation in Pt 2 of the Act. The term 1 Re Minister for Immigration and Multicultural Affairs; Ex parte Meng Kok Te (2002) 77 ALJR 1 at 5-7 [21]-[31], 13 [80], 18-19 [114], 33 [209]-[210]; 193 ALR "non-citizen" is defined in s 5(1) of the Act as meaning "a person who is not an Australian citizen". In Cunliffe v The Commonwealth2, Toohey J, referring to Nolan v Minister for Immigration and Ethnic Affairs3, said that: "an alien can generally be defined as a person born out of Australia of parents who were not Australian citizens and who has not been naturalized under Australian law or a person who has ceased to be a citizen by an act or process of denaturalization." That statement would lead to the classification of the applicant as an alien at birth, when he entered Australia and at all times since. However, the applicant contends that he was not an alien when he entered Australia and that nothing that occurred subsequently has placed him within the reach of the aliens power. The reasoning relied upon for this attribution of non-alien status depends upon a particular view of the relationship between this country and the UK at the time of the applicant's birth in 1972. In Pochi v Macphee4, Gibbs CJ said that the Parliament could not expand the power under s 51(xix) to include persons "who could not possibly answer the description of 'aliens' in the ordinary understanding of the word". The case presented by the applicant fixes upon the thought expressed in that statement. The "ordinary understanding" of the term "alien", correctly, is not said to be at large. Its appropriate use in Australia must have regard to the circumstances and conditions applicable to the individual in question. The applicant contends that the relevant circumstances and conditions include the political and constitutional relationship between the UK and Australia at the time of his birth and thereafter. That may be accepted, with the caveat that the relationship also is to be understood in the light of various provisions of the Constitution to which further reference will be made. However, contrary to the submissions for the applicant, the result of such a consideration of his position is his classification as an alien for the purposes of s 51(xix) of the Constitution. Much of the applicant's argument proceeded from the premise that, because the expression "British subject" could be applied to (1994) 182 CLR 272 at 375. (1988) 165 CLR 178 at 183-185. (1982) 151 CLR 101 at 109. him, he was not an alien. That premise is flawed. First, "British subject" is not a constitutional expression; it is a statutory expression. Secondly, and more fundamentally, if "British subject" was being used as a synonym for "subject of the Queen", an expression which is found in the Constitution, that usage would assume that there was at the time of federation, and there remains today, a constitutional and political unity between the UK and Australia which 100 years of history denies. The status of subjects of the Crown derived from the mediaeval common law in England. The term "British subject" seems first to have appeared at the time of the Union with Scotland. Article IV of the Articles of Union ensured trade and navigation rights to "all the subjects of the United Kingdom of Great Britain"5. Thereafter, the British Nationality and Status of Aliens Act 1914 (UK) ("the 1914 UK Act") deemed to be "natural-born British subjects" those "born within His Majesty's dominions and allegiance" (s 1(1)). Hence the statement6 that the 1914 UK Act "was based on the conception of a common British nationality of all subjects of the Crown throughout the Commonwealth and Empire, which had grown out of, and perpetuated, the common law doctrine of allegiance to the King". In their commentary on the covering clauses of the Constitution, Quick and Garran rightly pointed out that7: "[t]he relation of the Commonwealth to the Empire, and the relation of the Federal and State Governments of the Commonwealth to one another, can hardly be appreciated apart from a sound study of the principle of sovereignty." They distinguished between "legal sovereignty" (as, for example, the sovereignty of the British Parliament), "political sovereignty" (the sovereignty of the people), and "titular sovereignty" (the sovereignty of the Queen). As H W R Wade was later to point out, in 19558, there comes a point in debate about "sovereignty" and related concepts where the legal and the political intersect. As long ago as 1935, in British Coal Corporation v The King9, Viscount Sankey LC said of the 5 See Union with Scotland Act 1706, 5 Anne c 8. 6 Halsbury's Laws of England, 3rd ed, vol 1, par 1023. 7 The Annotated Constitution of the Australian Commonwealth, (1901) at 324-328. "The Basis of Legal Sovereignty", (1955) Cambridge Law Journal 172. [1935] AC 500 at 520. possibility that the British Parliament might repeal the Statute of Westminster's provisions recognising or giving legislative independence to the dominions that it was "theory" and had "no relation to realities". The "realities" to which Lord Sankey referred were the political realities of the separation of the dominions from the UK which had occurred and which found reflection in the Statute of Westminster. These political realities informed the relevant body of law and are reflected in the later observation by Sir Robert Menzies that constitutional law combines elements of history, statutory interpretation and political philosophy10. In Kirmani v Captain Cook Cruises Pty Ltd [No 1]11, Gibbs CJ said of the Statute of Westminster that: "[i]ts principal purpose was to give to the Dominions (Canada, Australia, New Zealand, the Union of South Africa, the Irish Free State and Newfoundland) that autonomy and equality of status with each other and with the United Kingdom which had been recognized by the Balfour Declaration of 1926. By a process of gradual development, the status of the Dominions had changed; as a matter of constitutional practice they had come to be regarded, not as colonies, but as sovereign communities." The constitutional term "subject of the Queen" must be understood in the light of the development and evolution of the relationship between Australia and the UK and between the UK and those other countries which recognise the monarch of the UK as their monarch. In particular, the expression "subject of the Queen" can be given meaning and operation only when it is recognised that the reference to "the Queen" is not to the person but to the office. That recognition necessarily entails recognition of the reality of the independence of Australia from the UK. At the time of his birth, the applicant was, by force of the UK statute then in force, the British Nationality Act 1948 (UK) ("the 1948 UK Act") (s 1(1))12, a "citizen of the [UK] and Colonies" and "by virtue of" that citizenship he had "the status of a British subject". This status was the creation of and derivative from 10 See Plaintiff S157 v The Commonwealth (2003) 77 ALJR 454 at 475 [108]; 195 ALR 24 at 52-53. 11 (1985) 159 CLR 351 at 363. 12 The 1914 UK Act had been relevantly repealed by s 34(3) of the 1948 UK Act. This in turn was repealed, so far as is material, by the British Nationality Act 1981 (UK), s 52(8). UK statute law, because its existence was dependent upon the possession of UK citizenship, itself a statutory concept. In Australia, by virtue of s 7 of the Citizenship Act, the applicant, "by virtue of" his citizenship of the UK, was classified as a "British subject"13. This Australian legislative status conferred on such persons certain advantages under other Australian statutes, such as those dealing with the franchise and the issue of passports14. The passage of the Citizenship Act and the 1948 UK Act and legislation in other Commonwealth countries followed negotiations between the governments concerned. The new arrangements reflected significant changes in the Imperial system which had taken place since federation. In Halsbury, the point was made as follows15: "The concept of a common British nationality as the only nationality known within the Commonwealth was difficult to reconcile with the complete legislative independence of the self-governing countries within the Commonwealth and tended to lead to complications in both the domestic and the international spheres." One of the objectives of the new arrangements was to clarify the position with regard to diplomatic protection and to enable governments when making treaties with other countries to define with precision those who were the "persons belonging to its country and on whose behalf it [was] negotiating"16. 13 Section 7 stated: "(1) A person who, under this Act, is an Australian citizen or, by an enactment for the time being in force in a country to which this section applies, is a citizen of that country shall, by virtue of that citizenship, be a British subject. (2) The countries to which this section applies are the following countries, namely, the United Kingdom and Colonies, Canada, New Zealand, the Union of South Africa, Newfoundland, India, Pakistan, Southern Rhodesia and Ceylon." 14 Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 440-441 [148]-[149], 442 15 Halsbury's Laws of England, 3rd ed, vol 1, par 1023. 16 British Nationality Bill, 1948, Summary of Main Provisions, Cmd 7326, par 7. From the perspective of the UK, the House of Lords in R v Secretary of State for Foreign and Commonwealth Affairs; Ex parte Ross-Clunis17 described the changes made in 1948 as follows: "The Act of 1948 introduced a new nationality regime the broad effect of which was that all British subjects were to become citizens either of the United Kingdom and Colonies or of one of the fully independent countries within the Commonwealth which are named in section 1(3) and which had then already introduced or were about to introduce their own separate citizenship laws." Australia was one of the countries named in s 1(3) of the 1948 UK Act. It may be that there never was a single nationality law throughout the British Empire18. In 1901, the Home Office in the UK established an inter-departmental committee to consider the state of the law of naturalisation in the British Empire19. That committee pointed to a number of difficulties that followed from disparate and local laws governing naturalisation throughout the British Empire20. These matters were taken up at Imperial conferences in 1902, 1907 and 1911, and in 1914 the UK Parliament enacted the 1914 UK Act to deal with some of the problems that were seen to have emerged. Even under that Act, however, the naturalising power was to be exercisable by the self-governing dominions without reference to the UK21. So much, of course, was entirely consistent with the provision of s 51(xix) of the Constitution by which the Parliament of the Commonwealth had power with respect to naturalisation and aliens. The 1914 UK Act and the 1948 UK Act both assumed that questions of naturalisation were within the powers of the dominion legislatures. The understanding of the expression "subject of the Queen", and the light which that 17 [1991] 2 AC 439 at 444. 18 Potter v Minahan (1908) 7 CLR 277 at 304-305; Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 439-440 [146]-[147]; Parry, Nationality and Citizenship Laws of The Commonwealth and of The Republic of Ireland, (1957) at 82. 19 Parry, Nationality and Citizenship Laws of The Commonwealth and of The Republic of Ireland, (1957) at 81. 20 Parry, Nationality and Citizenship Laws of The Commonwealth and of The Republic of Ireland, (1957) at 81-82. understanding casts on the ambit of the aliens power cannot, then, attribute significance to the adoption of the expression "British subject" in UK legislation. Rather, "subject of the Queen", with its implicit reference to notions of sovereignty, must recognise that at least by 1948 the subjects of the Queen to which reference was made were subjects of the monarch in right of Australia, not subjects of the monarch in right of the UK. The Citizenship Act, then styled the Nationality and Citizenship Act 1948 (Cth), came into force on 26 January 1949. Undoubtedly, to a significant degree, that statute depended upon the aliens power. Under UK law, Irish citizens ceased to be British subjects on 1 January 194922. Special provision, of a favourable nature, was made in s 8 of the Citizenship Act with respect to Irish citizens. In addition, Irish citizens might acquire Australian citizenship by following the procedures and conditions of s 12 which were less rigorous than those stipulated by s 15 for other aliens. Further, the statute created its own class of aliens which was narrower than the class of what might be called "constitutional aliens". This is apparent from the terms of the definition in s 5(1) of "alien" as meaning "a person who is not a British subject, an Irish citizen or a protected person" (emphasis added). It also should be noted that the "protected persons" spoken of included those in British protectorates who were aliens in the ordinary sense of the term but were taken out of that category for the purposes of the legislation23. The classification by s 7 of the Citizenship Act of the citizens of the UK, Canada, New Zealand, the Union of South Africa, Newfoundland, India, Pakistan, Southern Rhodesia and Ceylon, as British subjects in Australian law by virtue of that citizenship, also was an exercise of the legislative power with respect to aliens. The new statutory status rendered those persons a class of aliens with special advantages in Australian law, as mentioned above. It can hardly be said that, as the relevant political facts and circumstances stood in 1948, those citizens could not possibly answer the description of aliens in the ordinary understanding of that word. The Constitution was, to use Isaacs J's expression24, made not "for a single occasion", but for "the continued life and progress of the community". The 22 Kenny v Minister for Immigration, Local Government and Ethnic Affairs (1993) 42 FCR 330 at 341. 23 cf Halsbury's Laws of England, 3rd ed, vol 1, par 1025. 24 The Commonwealth v Kreglinger & Fernau Ltd and Bardsley (1926) 37 CLR 393 Constitution took effect at a time when "the Crown" was said to be "indivisible" and when the common law notion of allegiance to that "Crown" informed the statutory use of the term "British subject". But, as was explained in Sue v Hill25, in 1900 the term "the Crown" was used in constitutional theory in several distinct senses. In particular, the expression "the Crown in right of ..." was used to distinguish between the newly created governmental units within the Empire. Harrison Moore made the point26 that, in the statutes establishing the Canadian and Australian federations, the Imperial Parliament had "unquestionably treated these entities as distinct persons". Further, as Windeyer J later observed27, the words of the Constitution were to be read having in mind matters and circumstances in one sense external to Australia but in another bearing upon the meaning of expressions in the Constitution. The developments in Imperial relations after the commencement of the Constitution are an obvious example. The development of the "autonomous Communities" recognised by the Imperial Conference of 192628 proceeded by steps and over periods which had different consequences for the reading of various provisions of the Constitution. To ask when Australia actually achieved complete constitutional independence or other questions phrased in similar terms is to assume a simple answer to a complex issue, rather than to attend to the particular matter arising under the Constitution or involving its interpretation which has arisen for decision. In that regard, Gaudron J said in Sue v Hill29: "To acknowledge that, in some constitutional provisions, some words and phrases are capable of applying to different persons or things at different times is not to change the meaning of those provisions. It is simply to give them their proper meaning and effect." It will be recalled that the provisions of the Statute of Westminster fell short of achieving a full measure of legal autonomy for Australia, notably 25 (1999) 199 CLR 462 at 497-503 [83]-[94]. 26 "The Crown as Corporation", (1904) 20 Law Quarterly Review 351 at 359. 27 Bonser v La Macchia (1969) 122 CLR 177 at 223-224. 28 Summary of Proceedings, Cmd 2768 at 14. See also R v Secretary of State for Foreign and Commonwealth Affairs; Ex parte Indian Association of Alberta [1982] QB 892 at 916-917; Kirmani v Captain Cook Cruises Pty Ltd [No 1] (1985) 159 CLR 351 at 363, 373-374, 398-399, 422. 29 (1999) 199 CLR 462 at 526 [167]. because s 2 thereof did not apply to State legislation nor to State legislatures30. At times when elements of the UK government still participated or had the power to participate in Australian legislative, executive and judicial affairs, in particular until 1986 in the affairs of the States, it was difficult to classify the UK as a "foreign power" within the meaning of s 44(i) of the Constitution. The decision in Sue v Hill31 proceeded on that footing. On the other hand, s 34 of the Constitution acknowledges the possibility of change in the relationship between the UK on the one hand and Australia on the other. It does so by providing that the Parliament may alter the qualifications for elections so as to eliminate any requirement that candidates "be a subject of the Queen, either natural-born or for at least five years naturalised under a law of the United Kingdom". Further, in Sue v Hill32, Gaudron J remarked: "Of greater significance is that, by s 51(xxxviii) of the Constitution, the Commonwealth has power to legislate with respect to 'the exercise within the Commonwealth, at the request or with the concurrence of the Parliaments of all the States directly concerned, of any power which can at the establishment of this Constitution be exercised only by the Parliament of the United Kingdom or by the Federal Council of Australasia'. It was pursuant to s 51(xxxviii) that the Parliament of the Commonwealth enacted the Australia Act 1986 (Cth)". Once it be decided that the text of the Constitution contemplates changes in the political and constitutional relationship between the United Kingdom and Australia, it is impossible to read the legislative power with respect to "aliens" as subject to some implicit restriction protective from its reach those who are not Australian citizens but who entered Australia as citizens of the UK and colonies under the 1948 UK Act. It was unnecessary to reach that conclusion in Re Patterson; Ex parte Taylor33, but it should now be reached. References in argument to the statutory status of a "British subject" are apt to obscure the undoubted truth that, by 1948, the Imperial Crown, indivisible in nature, with an undivided allegiance, was no longer apparent, whether in this 30 Kirmani v Captain Cook Cruises Pty Ltd [No 1] (1985) 159 CLR 351 at 373-374, 31 (1999) 199 CLR 462 at 490 [59], 528 [173]. 32 (1999) 199 CLR 462 at 525 [164]. 33 (2001) 207 CLR 391 at 470 [240]. country or the UK. Such references also obscure the realisation that, in the pre-1948 law, the status of a natural-born British subject was statute based, particularly in the 1914 UK Act. There never was a common law notion of "British subject" rendered into an immutable element of "the law of the Constitution". This is so, whether that term be as understood to Diceyeans in the UK or to lawyers in this country. Moreover, it is readily apparent from a consideration of Joyce v Director of Public Prosecutions34, which was decided before the 1948 legislation, that "[a]llegiance and alienage are not mutually exclusive"35. Thus aliens may owe a measure of allegiance, but aliens they nevertheless continue to be. It remains to refer to s 117 of the Constitution. This operates in favour of "[a] subject of the Queen, resident in any State". The Citizenship Act no longer provides for any status of "British subject"36. Nor has the law of the UK, since 1 January 1983, used the term as a status enjoyed in relation to citizenship37. Does this mean that, like the expression in the Schedule to the Constitution, "the United Kingdom of Great Britain and Ireland", s 117 is to be read as it would have been read in 1901? The answer must be "no", lest the section be deprived of any useful operation. The reading of the text should accommodate the evident purpose of s 117 in present conditions. That purpose is the protection of citizens (but not aliens) resident in one State against the relevant disability or discrimination in another State. The conclusion reached is that the applicant entered Australia as an alien in the constitutional sense. Re Minister for Immigration and Multicultural Affairs; Ex parte Meng Kok Te38 establishes that, this being so, he did not lose that status by reason of his subsequent personal history in this country. Upon the cancellation of his visa, he became an "unlawful non-citizen" within the meaning of the Act. 34 [1946] AC 347. See Re Minister for Immigration and Multicultural Affairs; Ex parte Meng Kok Te (2002) 77 ALJR 1 at 20-21 [125]-[130]; 193 ALR 37 at 63-65. 35 Re Minister for Immigration and Multicultural Affairs; Ex parte Meng Kok Te (2002) 77 ALJR 1 at 6 [29]; 193 ALR 37 at 43. 36 Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 442-443 [153]. 37 Halsbury's Laws of England, 4th ed reissue, vol 4(2), par 9. 38 (2002) 77 ALJR 1; 193 ALR 37. This case should be taken as determining that the aliens power has reached all those persons who entered this country after the commencement of the Citizenship Act on 26 January 1949 and who were born out of Australia of parents who were not Australian citizens and who had not been naturalised. The scope of any earlier operation of the power does not fall for consideration. However, it may be observed that, like the other powers of the Parliament, s 51(xix) is not to be given any meaning narrowed by an apprehension of extreme examples and distorting possibilities of its application in some future law39. In argument, various submissions were made as to the authority to be accorded the decision in Patterson. A plain ground for the making of the orders absolute in that case was the constructive failure by the Minister to exercise jurisdiction. It is with respect to the other ground, concerned with the scope of the aliens power, that difficulty is encountered. The determination of the proposition for which Patterson is authoritative on that subject is particularly of significance for other Australian courts. Long v Minister for Immigration and Multicultural and Indigenous Affairs40 illustrates the inconvenience and lack of useful result from Patterson. In Long, French J determined41 that there was no binding principle in Patterson which assisted him to a decision in the instant case. His Honour decided the case by reference to the "minimum position" to be distilled from the various majority judgments in Patterson. French J said42: "I would add the observation that the more recent the date upon which it was possible for a person who was not an Australian citizen to be other than an 'alien' for constitutional purposes, the more recent the date upon which it would have to be said that Australia had not achieved independent nationhood in all its aspects." 39 Kartinyeri v The Commonwealth (1998) 195 CLR 337 at 380-381 [87]-[88]; Egan v Willis (1998) 195 CLR 424 at 505 [160]; Grain Pool of Western Australia v The Commonwealth (2000) 202 CLR 479 at 492 [16]. 40 [2002] FCA 1422. 41 [2002] FCA 1422 at [40]. 42 [2002] FCA 1422 at [40]. In Re Minister for Immigration and Multicultural Affairs; Ex parte Meng Kok Te43, four members of the Court agreed that there was no single strain of reasoning in the majority judgments in Patterson which contains a binding statement of constitutional principle and that there were differing views in the majority as to what were the facts material to the decision. One of those four Justices, McHugh J, concluded that Patterson had no precedent value beyond its own facts44. Any consideration of the significance to be attached to Patterson must involve the determination whether Patterson was effective to take the first step of overruling the earlier decision in Nolan v Minister for Immigration and Ethnic Affairs45. In our view, the Court should be taken as having departed from a previous decision, particularly one the Constitution, only where that which purportedly has been overthrown has been replaced by some fresh doctrine, the elements of which may readily be discerned by the other courts in the Australian hierarchy. On that approach to the matter, and as Long indicates, the decision in Patterson plainly fails to pass muster. interpretation of involving the The reasoning in this judgment upon the substantive question proceeds upon that footing respecting Patterson. It develops but is designedly harmonious with the reasoning in Nolan. In particular, in the joint judgment of six members of the Court in Nolan, it was said46: "The transition from Empire to Commonwealth and the emergence of Australia and other Dominions as independent sovereign nations within the Commonwealth inevitably changed the nature of the relationship between the United Kingdom and its former colonies and rendered obsolete notions of an indivisible Crown. A separate Australian citizenship was established by the Nationality and Citizenship Act 1948 (Cth), now known as the Australian Citizenship Act 1948. ... The fact that a person who was born neither in Australia nor of Australian parents and who had not become a citizen of this country was a British subject or a subject of the Queen by reason of his birth in another country could no 43 (2002) 77 ALJR 1 at 4-5 [17]-[19], 14-15 [86]-[88], 22 [136], 33 [211]; 193 ALR 44 (2002) 77 ALJR 1 at 15 [87]; 193 ALR 37 at 55. 45 (1988) 165 CLR 178. 46 (1988) 165 CLR 178 at 184. longer be seen as having the effect, so far as this country is concerned, of precluding his classification as an 'alien'." For more abundant caution, the Solicitor-General of the Commonwealth, who appeared for the Minister, sought leave to re-open Patterson itself. The controlling principles recently were considered in Esso Australia Resources Ltd v Federal Commissioner of Taxation47, with particular reference to the adoption in John v Federal Commissioner of Taxation48 of what had been said by Gibbs CJ in The Commonwealth v Hospital Contribution Fund49. The decision in Patterson does not rest upon a principle carefully worked out in a significant succession of decisions; the contrary, as we have indicated, is the case. Secondly, the treatment of the aliens power in Patterson was not necessary for the decision, because there was a clear alternative basis for the decision. Thirdly, the inconvenience flowing from the existence of Patterson is indicated by reference to Long. Finally, the Minister has moved as quickly as may be in this Court to obtain a reconsideration of Patterson. That case henceforth should be regarded as authority for what it decided respecting s 64 of the Constitution and the constructive failure in the exercise of jurisdiction by the Minister. The question reserved for the Full Court should be answered "yes". The costs of the proceeding in the Full Court should be the costs in the matter in the course of which the case was stated. 47 (1999) 201 CLR 49 at 71 [55], 101-106 [152]-[167]. 48 (1989) 166 CLR 417 at 438-439. 49 (1982) 150 CLR 49 at 55-58. McHugh 41 McHUGH J. The question in this case is whether the Migration Act 1958 (Cth) ("the Act") can constitutionally authorise the Minister for Immigration and Multicultural Affairs to deport a British citizen who has lived permanently in Australia since 1974 but who has never become an Australian citizen. In my opinion, although the Act in terms gave the Minister power to deport such a person, the Act was invalid in so far as it purported to apply to him. Statement of the case Jason Shaw, the applicant, migrated to Australia with his parents in 1974. He was then two years of age and a citizen of the United Kingdom. Along with his parents, he was granted a permanent entry permit. Under reg 4 of the Migration Reform (Transitional Provisions) Regulations (Cth), after 1 September 1994 the permanent entry permit held by the applicant continued in effect as a transitional (permanent) visa that permitted the applicant to remain in Australia indefinitely. He has never left Australia since arriving in 1974. However, he has never become an Australian citizen. Section 501(2) of the Act authorises the Minister to cancel a visa. He may do so if he reasonably suspects that the holder of the visa does not pass the character test as defined in s 501(6) of the Act and the holder does not satisfy the Minister that he or she passes the character test. Section 501(6) provides that, for the purposes of s 501, a person does not pass the character test if that person has a substantial criminal record as defined by s 501(7). Section 501(7) defines a substantial criminal record to include a person who has been sentenced to a term of imprisonment of 12 months or more. Acting under the power conferred by s 501, the Minister has revoked the applicant's visa. Since the age of 14, the applicant has followed a life of crime. He has been convicted on numerous occasions for offences that include stealing, breaking and entering and unlawfully using a motor vehicle. In 1998 he was sentenced to five years imprisonment for property offences; in the same year he was sentenced to two and a half years imprisonment for offences concerning drugs. In July 2001, the Minister cancelled the applicant's visa on the ground that he had a substantial criminal record and did not pass the character test as defined by s 501(6). Section 501 does not apply to British citizens who arrived in Australia before 3 March 1986 There are only two heads of federal constitutional power that could arguably extend the operation of s 501 to a person such as the applicant who is a McHugh British citizen and who arrived in Australia in 1974. The first is the immigration power; the second is the aliens power50. A long line of authority establishes that the immigration power does not authorise the Parliament to make laws with respect to persons who have immigrated to Australia, made their permanent homes here and become members of the Australian community51. Accordingly, the immigration power did not authorise the enactment of s 501 in so far as it purports to apply to the applicant. The aliens power, however, gives the Parliament greater power over immigrants than the immigration power. In Nolan v Minister for Immigration and Ethnic Affairs52, this Court held that any immigrant who has not taken out Australian citizenship is an alien for the purpose of s 51(xix) of the Constitution. On that view of the aliens power, the Parliament can legislate for the deportation of persons who are British citizens and have been permanent residents of Australia for many years. In Nolan, the Court upheld an order of the Minister deporting Nolan, a citizen of the United Kingdom who had lived permanently in Australia since 1967 but who had not taken out Australian citizenship. In Re Patterson; Ex parte Taylor53, however, a majority of this Court held that Nolan should be overruled in so far as it held that all British citizens living in Australia who had not taken out Australian citizenship were aliens for the purpose of the Constitution. Taylor was a British citizen who had arrived in Australia in 1966 and had since lived here permanently. However, he had not taken out Australian citizenship. A majority of the Court held that s 501 of the Act could not constitutionally authorise the deportation of Taylor. 50 Section 51 of the Constitution states: "The Parliament shall ... have power to make laws for the peace, order, and good government of the Commonwealth with respect to:- (xix) ... aliens: (xxvii) Immigration and emigration: 51 The line of cases commences with Ex parte Walsh and Johnson; In re Yates (1925) 37 CLR 36. 52 (1988) 165 CLR 178. 53 (2001) 207 CLR 391. McHugh As I pointed out in Re Minister for Immigration and Multicultural Affairs; Ex parte Te54, Re Patterson has no ratio decidendi. The four majority Justices were Gaudron, Kirby and Callinan JJ and myself. Gaudron J held that Taylor was a member of the body politic that constituted the Australian community and that British citizens who were members of that body politic and had been in Australia before 198755, were not aliens within the meaning of the Constitution. Kirby J held that Taylor was not an alien when he arrived in Australia, that he "had been absorbed into the people of the Commonwealth"56 and that the Parliament could not retrospectively declare him to be an alien. I held that British immigrants who settled in Australia before 1973 were subjects of the Queen of Australia and could not be "aliens" for the purpose of the Constitution. I selected 1973 as the earliest date on which the constitutional power to legislate with respect to aliens could apply to British immigrants. I did so because 1973 was the year in which the Parliament enacted the Royal Style and Titles Act 1973 (Cth). But I expressed the view that the relevant date "maybe later"57. Callinan J agreed with the reasoning of both Kirby J and myself. Although Re Patterson has no ratio decidendi, "it still has precedential authority in respect of circumstances that 'are not reasonably distinguishable from those which gave rise to the decision58'." It is not possible, however, to say that the present case is not reasonably distinguishable from Re Patterson. The only material fact in Re Patterson that was common to all majority judgments was that Taylor had arrived in Australia in 1966. Re Patterson is therefore only an authority for the proposition that a British citizen is not an alien if that person arrived in Australia in or before 1966 and has lived here permanently since that time. Even if the relevant year be extended to 1973, it does not assist the applicant in this case: he did not migrate to Australia until 1974. Accordingly, the applicant cannot rely on Re Patterson as an authority that supports his claim that the Act cannot constitutionally authorise the Minister to revoke his visa and render him liable to deportation. 54 (2002) 77 ALJR 1 at 14 [86]; 193 ALR 37 at 55. 55 Until 1987, s 5 of the Australian Citizenship Act 1948 (Cth) defined "alien" to mean "a person who [was] not ... a British subject ... an Irish citizen or a protected person". 56 (2001) 207 CLR 391 at 492 [304]. 57 (2001) 207 CLR 391 at 436 [135]. 58 (2002) 77 ALJR 1 at 15 [87]; 193 ALR 37 at 55. McHugh Despite Re Patterson having no precedential value for the purpose of this case, I remain convinced that Re Patterson was correctly decided. Having read the reasons of Callinan J, I am also convinced that his Honour is correct in holding59 that the evolutionary process by which the term "subject of the Queen" in s 117 of the Constitution became "subject of the Queen of Australia" was not completed until 3 March 198660. Until that date, therefore, Australians, born or naturalised, and British citizens permanently residing in Australia owed their allegiance to the "Crown of the United Kingdom of Great Britain and Ireland"61. Until that date, they were subjects of the Queen of the United Kingdom of Great Britain and Ireland for the purpose of s 117 of the Constitution, and were entitled to the protection of that section. When the evolutionary process ended, British citizens then permanently residing in Australia became subjects of the Queen of Australia by the same evolutionary process that had transformed the Queen of the United Kingdom of Great Britain and Ireland into the Queen of Australia. For the reasons that I gave in Re Patterson, subjects of the Queen of Australia are not aliens for the purpose of the Constitution. It follows that the applicant, who arrived in Australia in 1974 and was permanently living in Australia on 3 March 1986, is a subject of the Queen of Australia. He is not an alien within the meaning of s 51(xix) of the Constitution. The Parliament of the Commonwealth has no power to authorise his deportment from this country. Order The question reserved in the case stated should be answered "No", and the case should be remitted to a single judge to be determined consistently with that answer. The Minister should pay the applicant's costs in the Full Court. 59 Reasons of Callinan J at [177]. 60 With the passing of the Australia Act 1986 (UK) and the Australia Act 1986 (Cth). 61 Preamble to the Constitution. Kirby KIRBY J. In Calvin's Case62, Sir Edward Coke CJ held that a man born in Scotland after the accession of King James I to the English throne was not an "alien" to England. He appealed to many authorities. One of them involved Saul of Tarsus, later the Biblical Apostle St Paul63. Facing punishment for preaching his beliefs, Paul appealed to his Roman nationality. Although a Jew, he had been born a Roman citizen. By Roman law, he was entitled to be freed upon payment of a sum of money. Coke CJ remarked that "such a plea as is now imagined against Calvin might have made St Paul an alien to Rome"64. Just as the Emperor of Rome "had several ligeances for every several kingdom and country under his obedience"65 so, when the people of Australia "agreed to unite in one indissoluble Federal Commonwealth under the Crown of the United Kingdom of Great Britain and Ireland, and under the Constitution", they did so as "subjects of the Queen". Their status as British subjects defined their nationality. It was no more possible in law to treat a person, wherever born with allegiance to that Crown, as "alien" than it was to treat St Paul as an alien to Rome. Mr Jason Shaw (the applicant) is a man far from sainthood. He was born in the United Kingdom in 1972. In 1974 he arrived in Australia with his parents as an immigrant. It was common ground that in 1901 he could not possibly have fallen within the "aliens" power conferred on the Federal Parliament by the Constitution66. Yet now the Minister for Immigration and Multicultural Affairs ("the Minister") asserts that the Minister is entitled under the Migration Act 1958 (Cth) ("the Act") to deport the applicant from Australia. The Minister seeks to do so, in substance, because the applicant has committed criminal offences in Australia which constitute a "substantial criminal record" within the Act67. The provisions upon which the Minister relies were enacted well after the applicant's arrival here68. 62 (1608) 7 Co Rep 1a [77 ER 377]; cf Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 429 [116]. 63 Calvin's Case (1608) 7 Co Rep 1a at 24a [77 ER 377 at 406]. 64 Calvin's Case (1608) 7 Co Rep 1a at 24a [77 ER 377 at 406]. 65 Calvin's Case (1608) 7 Co Rep 1a at 24a [77 ER 377 at 406]. 66 Constitution, s 51(xix). 67 The Act, s 501(7). 68 See Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 404-406 [23]-[27], 410 Kirby The applicant challenges the power of the Minister to act in this way. He asserts that, in so far as subsequently adopted provisions of the Act69, and of subordinate legislation70, made under federal law71, purport to apply to him, they exceed the law-making power of the Commonwealth derived from the Constitution. The Minister disputes the applicant's proposition. Necessarily, the Minister accepts that the consequence of the applicant's removal from Australia would be to part him from the only country he has known, in which he was educated and has grown up since infancy, from the family that brought him here and from his two children, each of them Australian citizens, born in Australia respectively in 1992 and 1996. This Court is not concerned with the merits of the Minister's decision, simply with its constitutional validity. The Minister points to a number of sources of constitutional power to sustain the validity of the laws under which the action is proposed. Principally, the Minister contends that the applicant is an "alien" and thus subject to laws made under that constitutional head of legislative power72. The Minister also argues that the laws are supported by the federal legislative powers with respect to "immigration"73 and "external affairs"74. Sotto voce, the Minister suggests that the laws are also sustained by the implied federal power to make laws concerning Australia's nationhood. The applicant is entitled to succeed. The purported actions of the Minister are not sustained by any valid federal law. No more than if he were now an Australian citizen with a criminal record can the applicant be expelled from Australia on that ground. He is a member of the Australian community. He has been so since his arrival. Although not naturalised and thus not, as such, an Australian citizen, he was not on arrival, and could not thereafter lawfully be made, an "alien". As well, he has passed beyond the process of "immigration". His expulsion from Australia is an internal and not an external affair to this country. No implication of the Constitution supports the challenged laws in his 69 The Act, s 501(2), (6) and (7). 70 Migration Reform (Transitional Provisions) Regulations (Cth), reg 4. 71 Migration Reform Act 1992 (Cth). 72 Constitution, s 51(xix). 73 Constitution, s 51(xxvii). 74 Constitution, s 51(xxix). Kirby case. The Case Stated must be answered accordingly. In answering it, this Court should not use chance happenings affecting its composition to change its recent statements of the governing law. The facts and applicable legislation A fuller statement of the facts appears in other reasons75. Also appearing there are details of the legislation, under (or pursuant to) which the Minister has purported to alter the status of the applicant76. When, in 1974, at the age of two years, the applicant arrived in Australia, he was granted a permanent entry permit77. That permit immediately recognised the special nationality status of the applicant and his parents at that time. Such special status derived from the fact that the applicant and his parents were subjects of the Queen. Whereas under the Act, as it then stood, the Minister could, in the Minister's absolute discretion, cancel a temporary entry permit78, issued to persons having a different nationality status, the Minister enjoyed no legal power to cancel a permanent entry permit79. The Minister had the power to deport aliens convicted of certain crimes. But under the Act, as it then stood, the term "alien" was defined in language that inter alios excluded British subjects such as the applicant from treatment as foreign The hypothesis in the Minister's case is that, although at federation and for some time thereafter persons such as the applicant would not have been "aliens" for constitutional purposes and although on arrival and until 198481 (with effect from 1 May 1987) the applicant was not an "alien" under the Act, somehow the applicant (and inferentially the many thousands of persons in a like position) 75 Reasons of Gleeson CJ, Gummow and Hayne JJ ("the joint reasons") at [3]-[6]; reasons of McHugh J at [42]-[45]; reasons of Callinan J at [130]-[138]. 76 Reasons of Callinan J at [133]-[135]. 77 Pursuant to the Act, s 6, as it then stood. 78 The Act, s 7(1). 79 Such a permit would not, however, have effect if it had been obtained improperly. See the Act, s 16, as it then stood. 80 The Act, s 5(1). 81 When the definition of "alien" was removed from the Australian Citizenship Act 1948 (Cth) by the Australian Citizenship Amendment Act 1984 (Cth). The definition of "alien" was removed from the Act itself by the Migration Amendment Act 1983 (Cth). Kirby became constitutional "aliens", susceptible for that reason to new laws under which they could be expelled from Australia. It is this thesis that lies at the heart of the issue presented for decision. Just to state the thesis is to indicate the gravity of the proposition being advanced. To establish the proposition, with its large consequences for the nationality of a substantial number of British subjects who came to Australia like the applicant enjoying a special status82, the burden of persuasion is upon the Minister to demonstrate that such a change of status was lawfully achieved. It is the Minister who must show when the change happened. The Minister must justify a constitutional principle that has such serious results for the applicant and that could also validly affect the nationality status of so many people in a like position. The Minister must do so in the face of recent decisions of this Court that stand in the way. The course of this Court's authority on deportation The immigration and other powers: For a very long time Australian constitutional doctrine has accepted that the federal constitutional power with respect to "immigration"83 is not open-ended. It does not permit the indefinite regulation by federal law of persons who once were (or whose parents or family were) immigrants. The applicable power is addressed, as such, to "immigration". This is a process. It is not addressed, as such, to "immigrants". Thus, as early as 1925, in Ex parte Walsh and Johnson; In re Yates84, Knox CJ, considering the deportation of two persons who were British subjects and who had immigrated to Australia in 1893 and 1910 respectively, concluded that the power over immigration "should not be construed as extending to persons who had made their homes in Australia and become part of its people". This Court held that the validity of a provision authorising deportation as a law with respect to immigration "depends on this conclusion"85. According to this approach, a point was reached where "a person who has immigrated into 82 The number of persons affected by the "aliens" point was not identified with certainty. However, statistics presented to this Court in Re Patterson; Ex parte Taylor showed that the number of persons affected who arrived in Australia between 1959 and 1969 was half a million. If those who had arrived before 1959 and after 1969 but before 3 March 1986 or 1 May 1987 were included in this figure, the number would be even larger. 83 Constitution, s 51(xxvii). 84 (1925) 37 CLR 36 at 62. See also at 109, 112 per Higgins J. 85 Ex parte Walsh and Johnson; In re Yates (1925) 37 CLR 36 at 62. Kirby Australia will pass beyond the range of the [immigration] power when the act of immigration is at an end β that is when that person has become a full member of the Australian community"86. No reliance was placed in that case upon the "aliens" power because each of the persons concerned was a subject of the King87. This test of "absorption into the Australian community" is concededly vague. The precise moment when it occurs may be a matter of dispute in a particular case88. But the concept of absorption, for the purposes of the immigration power, is so well established and so clearly grounded in the constitutional text that it is now beyond dispute. By parity of reasoning, the classification of a subject matter of a law as one of "external affairs", for the purpose of the constitutional power with respect to that subject89, postulates a dichotomy between affairs that are purely "internal" and those that are "external". Upon this basis the applicant disputed the invocation of the constitutional power with respect to "external affairs". For like reasons he rejected reliance on the implied nationhood power. Aliens and British subjects: The constitutional head of power principally relied on by the Minister to sustain action against the applicant was none of the foregoing. Those heads of power were held in reserve to supplement, if necessary, the principal way in which the Minister advanced the case. This was that, constitutionally speaking, the applicant was an "alien". He was by birth a citizen of the United Kingdom, a foreign country90. Although he was also a "British subject" at the time of his birth91, by that time such status no longer enjoyed a single, universal significance throughout the British dominions where, as in Australia, the Queen retained the role of constitutional monarch and 86 R v Director-General of Social Welfare (Vict); Ex parte Henry (1975) 133 CLR 369 at 373 per Gibbs J. 87 Ex parte Walsh and Johnson; In re Yates (1925) 37 CLR 36 at 117. 88 Re Minister for Immigration and Multicultural Affairs; Ex parte Meng Kok Te (2002) 77 ALJR 1 at 6 [26]; 193 ALR 37 at 42-43. 89 Constitution, s 51(xxix). 90 British Nationality Act 1948 (UK), s 4; cf Sue v Hill (1999) 199 CLR 462 at 487- 91 British Nationality Act 1948 (UK), s 1. Kirby enjoyed the duty of allegiance as such92. Because the applicant personally, or his parents on his behalf, had not undertaken the process of naturalisation, and the applicant had not himself become an Australian citizen, according to the Minister, he was, in law, an "alien". For that reason, he was validly subject to any law of the Commonwealth with respect to "aliens" that authorised the Minister to remove him from Australia. Pochi and the dichotomy: To some members of this Court, the proposition of the Minister is clearly correct. The ultimate foundation for that view, applicable at least in the recent decades in which it has been propounded, has been a dichotomous approach to alienage and Australian citizenship. If a person is not an Australian citizen, by birth or subsequent naturalisation, such a person is an "alien" for the purposes of the Constitution. He or she may be dealt with as such. Cadit quaestio. End of contest. In support of this dichotomy, the Minister relied once again upon remarks made in this Court in Pochi v Macphee93. There, Gibbs CJ propounded, as a general proposition, that "the Parliament can β¦ treat as an alien any person who was born outside Australia, whose parents were not Australians, and who has not been naturalized as an Australian"94. Although this proposition was stated more broadly in Pochi than any principle of law needed to reach the orders in that case (which concerned a person who was born outside the dominions of the Crown, was never a British subject but was at all times an Italian citizen), the remarks became the foundation for the central holding of this Court in Nolan v Minister for Immigration and Ethnic Affairs95. In such a way serious legal error is sometimes built upon overstated legal propositions. Nolan endorses the dichotomy: As in this case, Nolan involved a person born in the United Kingdom who came to Australia as a child, lived here until his late twenties, committed offences and was then the subject of purported action on the part of the Minister to expel him as an "alien". The majority of this Court 92 Attorney-General for Ontario v Attorney-General for Canada [1912] AC 571 at 581, 583-584, 589; R v Secretary of State for Home Department; Ex parte Bhurosah [1968] 1 QB 266 at 278, 284, 286; R v Secretary of State for Foreign and Commonwealth Affairs; Ex parte Indian Association of Alberta [1982] QB 892 at 93 (1982) 151 CLR 101. See also Re Minister for Immigration and Multicultural Affairs; Ex parte Meng Kok Te (2002) 77 ALJR 1 at 25-26 [158]-[163]; 193 ALR 94 Pochi v Macphee (1982) 151 CLR 101 at 109-110. 95 (1988) 165 CLR 178. Kirby upheld the constitutional power of the Minister to so act96. Only Gaudron J dissented97. Sweeping aside the history of nationality status under the Australian Constitution, the deliberate omission of an express constitutional status for Australian citizenship, the long course of assisted British migration to Australia98 and the problem presented by the express reference in s 117 of the Constitution to "subject of the Queen"99, the joint reasons of the majority in Nolan endorsed the dichotomous theory. For that majority, the word "aliens" in s 51(xix) of the Constitution, by 1988, included any person born outside Australia whose parents were not Australian citizens, and who had not been naturalised as an Australian citizen. Whilst this meaning of "aliens" was accepted in Nolan, it was acknowledged that it would not have been adopted in 1901 when the Constitution commenced operation. Accordingly, the change was held to be implicit in "the emergence of Australia as an independent nation, the acceptance of the divisibility of the Crown which was implicit in the development of the Commonwealth β¦ and the creation of a distinct Australian citizenship"100. The ratio decidendi of Nolan could thus not have been clearer. It expressed a constitutional rule that survived until it was challenged directly in this Court in Re Patterson; Ex parte Taylor101. Re Patterson overrules the dichotomy: Whatever else may be unclear about the holding of this Court in Re Patterson, this much is indisputable. Re Patterson overruled the dichotomous theory endorsed in Nolan. It returned the constitutional doctrine of this Court to a more complex notion of Australian nationality in keeping with the constitutional text and Australia's history. Correctly, the headnote writer in the authorised report of this Court's decision in Re Patterson states that Nolan was overruled102. The supposed dichotomy 96 Nolan v Minister for Immigration and Ethnic Affairs (1988) 165 CLR 178 at 186 per Mason CJ, Wilson, Brennan, Deane, Dawson and Toohey JJ. 97 Nolan v Minister for Immigration and Ethnic Affairs (1988) 165 CLR 178 at 190- 98 See reasons of Callinan J at [141]-[145]. 99 Nolan v Minister for Immigration and Ethnic Affairs (1988) 165 CLR 178 at 186. 100 Nolan v Minister for Immigration and Ethnic Affairs (1988) 165 CLR 178 at 185- 101 (2001) 207 CLR 391. 102 (2001) 207 CLR 391 at 392. Kirby between Australian citizenship and "alien" status stood between Mr Taylor and success upon the issue on which the Court was narrowly divided (the constitutional validity of the Minister's deportation power in such a case). The holding on the point of the applicability of Nolan to the case was determinative of the orders ultimately made in Re Patterson. If Nolan had been endorsed by a majority of this Court, it would have followed, from the other holdings, that the Minister had the power to remove Mr Taylor from Australia. All other impediments to deportation decided in the case might have been cured by the Minister. But this one could not be. Mr Taylor stayed in Australia. He could not be deported as an "alien". This was so although he was certainly not a citizen. The supposed dichotomy was rejected. Te affirms rejection of the dichotomy: In 2002, in Re Minister for Immigration and Multicultural Affairs; Ex parte Meng Kok Te103, this Court returned once again to the constitutional word "aliens". Undaunted by the reverse in Re Patterson, the Minister argued in Te for a quick return to the rule in Nolan. Specifically, the Minister urged a revival of the dichotomy between alienage and Australian citizenship. Those who, in Re Patterson, had dissented from the Court's holding in that case, continued to find the Minister's invitation irresistible104. In my respectful opinion, adherence to the dichotomy involved a rejection of a clear principle for which the decision in Re Patterson stood as legal authority. In Te, the particular issue that had arisen for decision in Nolan and Re Patterson (and which now arises in the present case) was not before this Court. Te, like Pochi, concerned persons who had been born outside the dominions of the Crown105. They were never British subjects or naturalised Australians. Thus, they were always within the concept of "aliens" as envisaged by s 51(xix) of the Constitution. It followed from the facts of Te (and the companion case of Re Minister for Immigration and Multicultural Affairs; Ex parte Dung Chi Dang) that none of the complications of the concept of nationality and of alienage that arose in Nolan and Re Patterson (and which now arise) had to be considered. Anything said in Te on those complications was therefore obiter dicta. The legal principle for which Re Patterson stands was unaltered. Nothing decided in Te 103 (2002) 77 ALJR 1; 193 ALR 37. 104 Re Minister for Immigration and Multicultural Affairs; Ex parte Meng Kok Te (2002) 77 ALR 1 at 5 [19] per Gleeson CJ, 22 [133]-[136] per Gummow J, 33 [210]-[211] per Hayne J; 193 ALR 37 at 41, 65-66, 82. 105 Mr Te was born in Cambodia. Mr Dang, the applicant in the associated case, was born in Vietnam. See Re Minister for Immigration and Multicultural Affairs; Ex parte Meng Kok Te (2002) 77 ALJR 1 at 23 [142], [145]; 193 ALR 37 at 67. Kirby changed in the slightest the holding in Re Patterson rejecting the dichotomy of alienage and citizenship favoured by the dissenting judges in Re Patterson. As a matter of legal authority, the holding in Re Patterson therefore applies to the present case. It is contrary to the applicable part of the ratio decidendi in Re Patterson to attempt, in this case, to reinstate the dichotomy between the status of "alien" and citizen. Stare decisis and constitutional law: I recognise that, in respect of the meaning of the Constitution, the duty of each Justice is to the fundamental law of the nation. In the history of this Court the rule of obedience to a majority holding of the Court on a point of law has not been uniformly treated as applying in the same way to a constitutional ruling. Nevertheless, whilst adhering to (and often expressing) individual views concerning the meaning of the Constitution, it is normal for Justices of this Court to give effect to majority rulings on the Constitution, if only to avoid the spectacle of deliberate persistence in attempts to overrule recent constitutional decisions on identical questions on the basis of nothing more intellectually persuasive than the retirement of a member of a past majority and the replacement of that Justice by a new appointee who may hold a different view106. Those who recognise the stabilising element of the doctrine of precedent in our legal system (even to the extent of suggesting the need for leave of this Court to re-argue a matter determined by past authority107) will ordinarily accept a determination of a rule, especially where that determination is recent and concerns exactly the same legal issue. Otherwise, every important constitutional decision will be resubmitted for redetermination following new appointments until the dissenter gets his or her way108. The rejection of the dichotomy suggested obiter in Pochi, endorsed in Nolan but overruled in Re Patterson should not continue to revisit this Court awaiting the hoped for arrival of a majority to give effect to an opinion about the Constitution dismissed in the past in an authoritative decision on the point. 106 Re Wakim; Ex parte McNally (1999) 198 CLR 511 at 597-600 [179]-[187] with reference to Gould v Brown (1998) 193 CLR 346. 107 cf Evda Nominees Pty Ltd v Victoria (1984) 154 CLR 311 at 316 per Gibbs CJ, Mason, Murphy, Wilson, Brennan and Dawson JJ; Deane J dissenting. See also Allders International Pty Ltd v Commissioner of State Revenue (Vict) (1996) 186 CLR 630 at 673. 108 Western Australia v The Commonwealth (1975) 134 CLR 201; cf Queensland v The Commonwealth (1977) 139 CLR 585 at 599-600 per Gibbs J, 603 per Stephen J; cf at 592-594 per Barwick CJ, 631 per Aickin J. Kirby In the present case, so far as the nationality of non-citizen non-alien British subjects is concerned, it must be conceded that a difficulty arises in expressing the affirmative side of the decision in Re Patterson represented in its negative face by the rejection of the dichotomy. Amongst the majority in Re Patterson for overruling Nolan, there was no exact concurrence in the expression of a constitutional principle to replace the discarded dichotomy. The differences in the statements of the individual judges in the majority in Re Patterson were analysed in Te. Unfortunately, in the light of what has been said, it is necessary to return to that analysis. Whilst those of the Nolan persuasion persisted in Te with a view that the reasoning of the majority in Re Patterson "was not soundly based"109, with respect, that is what must be said of the reasoning of the minority in Re Patterson and Te. As Gaudron J consistently, and correctly, pointed out in Nolan, Re "Citizenship is a statutory, not a constitutional concept. The relevant constitutional concepts with which this case are concerned are 'alien', the singular form of the word used in s 51(xix) of the Constitution, and, by way of constitutional distinction, 'non-alien'. Thus, the fact that the prosecutor is not an Australian citizen is irrelevant if he is not an alien." Although this is a notion that the minority in Re Patterson and Te have been persistently unwilling to accept, it is the clear and repeated holding of four members of this Court. It is a holding that should be respected as a matter of legal precedent. It is also correct as a matter of basic constitutional principle. It is fatal to the Minister's principal argument. The criteria of alienage in Re Patterson: In Te, McHugh J, one of the majority in Re Patterson, acknowledged the different ways in which the Justices constituting the majority in Re Patterson had expressed the criterion for alienage, once the discrimen of non-citizenship was rejected as a universal criterion111. These differences led McHugh J to an hypothesis that no ratio decidendi with respect to the "aliens" power could be extracted from the reasoning in Re 109 (2002) 77 ALJR 1 at 22 [133] per Gummow J; 193 ALR 37 at 65. 110 Re Minister for Immigration and Multicultural Affairs; Ex parte Meng Kok Te (2002) 77 ALJR 1 at 10 [53]; 193 ALR 37 at 48. 111 (2002) 77 ALJR 1 at 14 [85]-[86]; 193 ALR 37 at 54-55. Kirby Patterson112. This part of McHugh J's reasons is cited in the joint reasons in the present case113. However, the citation by their Honours does not state the entirety, or indeed the most important part, of McHugh J's analysis. His Honour also said that Re Patterson had "precedential authority in respect of circumstances that 'are not reasonably distinguishable from those which gave rise to the decision'"114. This additional part of McHugh J's reasoning should not be ignored. It involves an element of the doctrine of precedent as it applies in Australian law. Two principles stood as the authority of this Court before the present decision. The first was the negative principle that the absence of citizenship did not define alienage. The second, positive principle was emerging to meet the needs of the particular cases. So it does in the present case. In my reasons in Te, I suggested (and it is still my view) that the difference between Gaudron J and McHugh J in Re Patterson was "essentially upon a matter of detail concerning the way in which a group of non-alien British subjects, resident in Australia, were formally associated with Australia although not citizens and never having been naturalised"115. McHugh J in Re Patterson had explained the position of this intermediate class by reference to the traditional common law concept of allegiance116. This led his Honour to attach significance to the Royal Style and Titles Act 1973 (Cth)117. By that Act, reserved for the Queen's pleasure in accordance with the Constitution118, the Royal style and title of the monarch was, in Australia, henceforth to delete any reference to the United Kingdom such as had previously existed. Instead, it was to refer to Her Majesty as "Queen of Australia". That alteration was said to amount to "a formal recognition of the changes that had occurred in the constitutional relations 112 Re Minister for Immigration and Multicultural Affairs; Ex parte Meng Kok Te (2002) 77 ALJR 1 at 14-15 [86]-[87]; 193 ALR 37 at 55. 113 The joint reasons at [35]. 114 Re Minister for Immigration and Multicultural Affairs; Ex parte Meng Kok Te (2002) 77 ALJR 1 at 15 [87]; 193 ALR 37 at 55 citing Midland Silicones Ltd v Scruttons Ltd [1962] AC 446 at 479; Re Tyler; Ex parte Foley (1994) 181 CLR 18 115 (2002) 77 ALJR 1 at 29 [182]; 193 ALR 37 at 75. 116 (2001) 207 CLR 391 at 432 [124]. 117 Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 436-437 [135]. 118 Constitution, s 58. Kirby between the United Kingdom and Australia"119. It was such a change, reflected in concurrent changes to the Australian Citizenship Act 1948 (Cth) in 1973120, that convinced McHugh J that "the evolutionary process" had occurred by which "the subjects of the Queen born and living in Australia became subjects of the Queen of Australia"121. His Honour described the process as a "mystical" one. It was one by which, without formal naturalisation, British subjects living in Australia, some of whom were not Australian citizens, "became subjects of the Queen of Australia". Those who had been born in the United Kingdom "owed their allegiance to the Queen of Australia, not the Queen of the United Kingdom"122. In his reasons in Re Patterson, Callinan J agreed with McHugh J that the prosecutor in that case, "as a subject of the Queen resident in Australia at the end of the evolutionary process" to which his Honour had referred, "became a subject of the Queen of Australia"123. It was in such a way that Callinan J, like McHugh J, considered that the rights expressly conferred on a "subject of the Queen" by s 117 of the Constitution were protected124. Callinan J also agreed with my reasons in Re Patterson that persons in the position of Mr Taylor could not be treated as an "alien" for constitutional purposes125. My reasons were substantially the same as those of Gaudron J. We were prepared to accept that the repeal of the definition of the word "alien" in s 5 of the Australian Citizenship Act in 1984 (with effect from 1 May 1987) had a consequence from that time of recognising the "members of the Australian 119 Southern Centre of Theosophy Inc v South Australia (1979) 145 CLR 246 at 261 per Gibbs J applied in Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 432 120 By which a person seeking Australian citizenship was required to swear or affirm allegiance to the Queen as Queen of Australia. See Australian Citizenship Act 1973 (Cth), s 8 inserting s 15, which refers to the oath or affirmation of allegiance in Sched 2: see Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 431 [119]. 121 Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 432 [124]. 122 Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 432 [124]. 123 (2001) 207 CLR 391 at 518 [378]. 124 Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 518 [378] referring to the reasons of McHugh J at 435 [131]. 125 Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 518 [377] by reference to my reasons at 485 [281], 491 [300]-[302], 493-494 [308], 495-496 [312]. Kirby community", as such membership by then had evolved for the constitutional purposes of alienage126. Clearly, by the principle that Gaudron J and I accepted (Callinan J agreeing with my reasons in this respect), the applicant in the present case was not an "alien" within the Constitution. Like thousands who had gone before, and who had arrived in Australia as British subjects at and about the time he arrived, the applicant enjoyed a special nationality position in Australia amounting to "the uniquely privileged status of non-citizen British subjects β¦ who had migrated to this country"127. The question affecting the second binding rule to be derived from Re Patterson, applicable to the present case, is therefore whether the opinion stated by McHugh J, by reference to the Royal Style and Titles Act, requires a different and narrower conclusion to that adopted in Re Patterson by Gaudron and Callinan JJ and myself. In my view it does not. The "aliens" power Alienage in an Australian context: In approaching the meaning of the word "aliens" in the Constitution, it is important to note three points upon which, I should have thought, there can be no real dispute. First, the word is a constitutional word appearing in the Constitution of the Australian Commonwealth. From the start of the nation's colonial history, through the debates that culminated in the adoption of the Constitution and up to the present time, the context is that of an immigrant country. Australia has, at all relevant times, been heavily dependent for its welfare, prosperity and security upon a constant flow of immigrants. In this sense, the context in which the word "aliens" appears in the Australian Constitution is different from the context in which alienage earlier arose to be interpreted in England in the times of the Stuart kings128, in the England of the Hanoverian succession129 or in the United States 126 Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 410 [44] per Gaudron J, at 493-494 [308], 495-496 [312] of my own reasons. 127 Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 496 [314]. 128 Calvin's Case (1608) 7 Co Rep 1a [77 ER 377]. 129 In re Stepney Election Petition; Isaacson v Durant (1886) 17 QBD 54 at 59-60. See Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 411-412 [49], 430 Kirby immediately after the revolutionary wars130. Whilst the concept of "alienage" was one known to the common law (as earlier it had been known to Roman law) the meaning of the concept in the present context is one peculiarly Australian. So much follows from the fact that the task of this Court is to give meaning to the constitutional word "aliens" not for some other purpose but solely for the purpose of defining the operation of the fundamental law of the Australian nation and people. Change in alienage after 1901: Secondly, any suggestion that "aliens" in the Constitution would, in 1901, have included a subject of the Queen born in the United Kingdom would have been treated as absurd. It would have been as self- evidently wrong as it would have been to suggest, at that time, that the United Kingdom was, for the purposes of s 44(i) of the Constitution, a "foreign power"131. Put simply, there were too many indications in the constitutional text and in social, political and economic facts at that time to the contrary132. The Minister did not contest this point. It follows that upon this argument, somewhere between 1901 and the present, a change occurred in the denotation of the word "aliens", or in the meaning of the word itself taken in the Australian constitutional context133. That change permitted, and required, a different meaning of the word "aliens" from that which would have applied when the Constitution was first adopted. The view has been expressed by those who adhere doggedly to the dichotomous theory, that the reasoning in Re Patterson "inserts into the universe occupied by Australian citizens and aliens a third class formed by those who are identified as non-citizens but non-aliens"134. This, it is said, is why the reasoning 130 Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 482 [274] referring to Jackson v Wright (1809) NY 4 Johns 75 at 78-79; Kelly v Harrison (1800) 1 Am Dec 154 at 156; Hollingsworth v Duane (1801) 12 Fed Cas 356 at 358; Inhabitants of Manchester v Inhabitants of Boston (1819) 16 Mass 230 at 235. 131 Sue v Hill (1999) 199 CLR 462. See Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 495 [312]. 132 Notably in the Preamble to and s 2 of the Commonwealth of Australia Constitution Act 1900 (Imp) (63 & 64 Vict c 12) and s 117 of the Constitution, together with the many references to the Queen in the Constitution and in the Schedule thereto. 133 cf Grain Pool of Western Australia v Commonwealth (2000) 202 CLR 479 at 511- 134 Re Minister for Immigration and Multicultural Affairs; Ex parte Meng Kok Te (2002) 77 ALJR 1 at 22 [133]; 193 ALR 37 at 65. Kirby of the majority in Re Patterson is "not soundly based"135. However, with all respect to the minority analysis in that case, the majority's view in Re Patterson is based firmly in Australia's constitutional history. Indeed, it is grounded in the text of the Constitution itself, most notably s 117. It rests on the incontestable fact that, for decades in Australia during the twentieth century, nationality status for constitutional purposes in Australia involved, and involved only, the question of whether the person concerned was "a subject of the Queen [or King]". Once the statutory notion of citizenship was introduced after 1948, it was thus the Constitution, and not errant judges, that prevented what is termed the "third class". Unfortunately, it is the reasoning of those who ignore this simple truth that is "not soundly based". It is in error. The best that the dichotomous theory can suggest is that the constitutional distinction between alienage and citizenship was created at some unspecified time after 1901 or was effected by federal legislation. But such legislation, whilst it may mirror and give effect to the deep undercurrents of constitutional change, cannot of its own alter the meaning and application of a constitutional word. Yet that is what the minority in Re Patterson, now forming a majority in the present case, suggest has occurred. The meaning of "aliens": Thirdly, because "aliens" is a constitutional word, it cannot have any meaning that the Federal Parliament may choose to give it136. Thus, it would not be open to the Parliament to state that every Aboriginal Australian was an "alien", or that every descendant of Australians of Chinese (or other) ethnicity was an "alien"137. The word is not devoid of a discoverable meaning. Although the exact content may alter, indeed has altered, over time β and is no longer a reflection of the original dichotomy between the status of British subjects in Australia and all others β it is not open-ended. History and past practice cannot chart the ultimate boundaries of the notion. The search is one for the essential character of the constitutional idea of alienage. What then does that notion imply? In my view it refers to someone who is outside the Australian community and its fundamental loyalties, that is, outside Australian nationality. Applied today and for future application, I would accept 135 Re Minister for Immigration and Multicultural Affairs; Ex parte Meng Kok Te (2002) 77 ALJR 1 at 22 [133]; 193 ALR 37 at 65. 136 Pochi v Macphee (1982) 151 CLR 101 at 109; cf Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 431 [121]; Re Minister for Immigration and Multicultural Affairs; Ex parte Meng Kok Te (2002) 77 ALJR 1 at 32 [198]; 193 ALR 37 at 79- 137 Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 491-492 [303]. Kirby that such community and such loyalties are marked off by citizenship of birth and descent, and citizenship by naturalisation. Indeed, so much is accepted by all members of the Court. Yet there was a time in the past, and not such a distant past, when a very large number of persons came to Australia and were fully accepted as partaking in the Australian community and sharing the loyalties referred to. They were fully accepted as enjoying Australian nationality. This was so, notwithstanding that after 1948, when separate Australian citizenship was introduced by legislation, such persons did not procure such citizenship. In the case of the residual class of subjects of the Queen β most of them from the United Kingdom β such a formality was not at the time required or expected. Without it, members of their class were treated, and regarded, as full members of the Australian community. They enjoyed the nationality of this country. They were liable to jury service138. They were entitled as such to be employed in the public service as aliens were not139. They were obliged to perform national military service where others were exempt140. They were entitled to enrol for participation in federal and State elections and in constitutional referenda141. They had, by law and fact, the attributes that the Constitution itself continued to recognise as Australian nationality. Thus, they were, in the transitional years, nationals of Australia although not statutory citizens. They were not "aliens" either for statute law or for the Constitution. The vast majority of this group of subjects of the Queen came from the United Kingdom, before the alteration of migration policy, on assisted passages, as indeed did selected aliens. Most of those from the United Kingdom arrived substantially at the cost of the Australian community and at its invitation142. 138 Conventionally, the Jury Acts throughout Australia provided for the qualification of jurors by reference to entitlement to be enrolled as an elector. See eg Jury Act 1929 (Q), s 6. 139 eg Commonwealth Public Service Act 1922 (Cth) s 33. The reference to "British subject" in provisions of the Public Service Act governing eligibility for appointment to the Public Service was removed in 1984 by the Public Service Reform Act 1984 (Cth), s 26, which substituted "an Australian citizen". 140 National Service Act 1951 (Cth), s 10(1)(a). The Act has since been repealed. See Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 487-488 [289]. 141 Commonwealth Electoral Act 1918 (Cth), s 93(1)(b)(ii). See Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 487-488 [287]-[289]. The position of the applicant in relation to this legislation is explained by Callinan J at [176], fn 214. 142 Reasons of Callinan J at [141]-[145]. Kirby Whether assisted migrants or not143, they were immediately welcomed into full membership of the Australian community. Nor did they see themselves as aliens. So far as they were concerned, they owed allegiance to the Queen. When her title in Australia was changed to Queen of Australia, they owed allegiance to her in that right. They did so by living here as full members of the Australian community and its people. History, including constitutional history, placed them at that time outside the constitutional power with respect to "aliens"144. If this was so when such persons arrived in Australia and for a time thereafter, the notion that retrospectively, by legislation, their status could be changed to "alien" within the Constitution would put in peril to such a unilateral alteration the constitutional status of a very large number of people in a category that dates back to the beginnings of European settlement of Australia and to the original notion of nationality in the Australian Constitution. The present case is thus not concerned merely with the constitutional position of persons such as Messrs Nolan, Taylor and Shaw, with their discouraging criminal records. If constitutional power exists to deport them, it would equally exist to expel others who, like them, came to this country and enjoyed the special status of a "subject of the Queen", recognised in the Constitution, that persisted well into the second half of the twentieth century. To render such a large and loyal section of the Australian community vulnerable to retrospective treatment as constitutional "aliens" would be an extremely grave step. It is one which this Court in Re Patterson held could not be taken conformably with the Constitution. Defining the point of change: Much of the argument in the present case was addressed to defining the precise point at which the special nationality status of the residual class of non-citizen non-alien British subjects terminated for constitutional purposes. Those of the Nolan persuasion make much of the supposed difficulty, if the criterion of citizenship is not accepted, of fixing the exact point when non-citizen British subjects ceased to enjoy a constitutionally protected status of Australian nationality and became "aliens". But, with respect, this is no more than empty rhetoric. Once it is accepted that, in 1901, such British subjects were not "aliens", whichever theory of the meaning of the power over "aliens" is adopted, it obliges its adherents to propound some point on the journey since 1901 when the content of the constitutional notion of "aliens" changed. 143 As the joint reasons point out, the Case Stated is silent upon whether the applicant's parents arrived in Australia as assisted migrants: the joint reasons at [4]. See also reasons of Callinan J at [145]. 144 Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 492 [304]. Kirby The dichotomy endorsed by the minority in Re Patterson drives its proponents back to a suggested alteration of the notion of Australian nationality by reference to the enactment of statutory citizenship. However, this is not only wrong in legal principle, as permitting legislation, in effect, to change the Constitution. It is also contradicted by historical facts evidenced, in turn, by the very language of the Act and much other contemporary legislation. Long after statutory citizenship was introduced in 1948, Australian law and practice, federal and State, continued to recognise the special nationality status of non-citizen subjects of the Queen who had joined the Australian community. No theory of constitutional meaning can legitimately endorse the notion that the point of the change could be assigned by Australian legislation on its own145. Still less could British legislation have such a constitutional consequence for Australia at a time when the United Kingdom had no authority to alter Australia's constitutional law146. Even less persuasive is the appeal to the submissions or opinions of British Ministers147 or of British scholars148. Such personages, distinguished though they may have been, would have insufficient understanding of the peculiar transitional Australian position of the significant number of British assisted immigrants who came to Australia as part of our community and enjoyed a special status in the nation because, at the time, they were regarded as sharing a common allegiance and a common membership of our community which had outlived even the bonds of the British Empire. Only those fully familiar with Australian constitutional facts, legal doctrine and history are in a position to describe accurately the "evolutionary" and "mystical" process by which that large category of immigrants was assimilated to Australian nationality although they did not procure Australian citizenship149. 145 Such as the Nationality and Citizenship Act 1948 (Cth), later known as the Citizenship Act 1948 (Cth) and later still as the Australian Citizenship Act 1948 (Cth). See Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 408 [35]. 146 Such as by the passage of the British Nationality Act 1948 (UK); cf the joint reasons at [20]; cf Attorney-General (WA) v Marquet (2003) 202 ALR 233 at 282- 147 Such as Sir Hartley Shawcross KC, the Attorney-General of England and Wales in Joyce v Director of Public Prosecutions [1946] AC 347 at 356-357 cited Re Minister for Immigration and Multicultural Affairs; Ex parte Meng Kok Te (2002) 77 ALJR 1 at 21 [127]-[128]; 193 ALR 37 at 64. 148 Such as Professor Hersch Lauterpacht in "Allegiance, Diplomatic Protection and Criminal Jurisdiction over Aliens", (1947) 9 Cambridge Law Journal 330 at 333 cited Re Minister for Immigration and Multicultural Affairs; Ex parte Meng Kok Te (2002) 77 ALJR 1 at 21 [129]; 193 ALR 37 at 64. 149 cf Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 432 [124] per McHugh J. Kirby By the 1970s, imperceptibly as McHugh J correctly pointed out in Re Patterson, things began to change. The first step in the change was not the adoption of Australian citizenship separate from the nationality status of British subject. For a much longer transitional period, Australian citizens continued by statute to enjoy a dual statutory status including that of British subject, in effect the same status as is recognised in s 117 of the Constitution and as had been enjoyed by Australians before and after federation150. For a long time, the Minister's predecessors were authorised by statute to issue Australian passports to Australian citizens "and to British subjects who are not Australian citizens"151. The latter words were not omitted from Australian law until 1984152. In Re Patterson, three members of this Court153 were prepared to conclude that the amendments to the Australian Citizenship Act in 1984 (which commenced on 1 May 1987) evidenced the final completion of the process of constitutional evolution of the status of alienage by that time. There were many steps on the path to that evolution. Those steps were political, economic and social, as well as legislative. Because the issue affects the status of individuals and the duties of officers of the Commonwealth in relation to them, it is necessary as a matter of law, and certainly desirable, that there should be clarity about the point at which non-citizen non-alien British subjects lost the constitutional protection of Australian nationality. If the proposition that this occurred in 1948 is self-evidently erroneous, as I believe to be the case, the continuation of the residual status up to the present time is equally denied by contemporary Australian realities. The constitutional change happened somewhere in between. I do not understand the reasoning of McHugh J, either in Re Patterson or in Te, to be inconsistent with the proposition that the final termination of the residual status of non-citizen British subjects should be taken to have been reached by the mid 1980s. Certainly, such a view would be compatible with the notion that McHugh J propounded, founded on the concept of allegiance. As his Honour explained in Re Patterson, that process was both evolutionary and 150 This was preserved by the Australian Citizenship Act 1948 (Cth) as successively re-titled. See Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 485-487 151 Passports Act 1938 (Cth), s 7(1) following the Passports Amendment Act 1948 (Cth). 152 Passports Amendment Act 1984 (Cth), s 4. 153 Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 412 [51] per Gaudron J, 518 [377] per Callinan J and 496 [313]-[315] of my own reasons. Kirby mystical. It did not happen in an instant. It did not occur at the moment in 1973 when the Royal Style and Titles Act of that year was enacted. It continued to evolve as the separate identity of the Queen as Queen of Australia gained greater reflection in the practice of Australia, in the manifestations of the allegiance of its nationals and in the gradual elimination of special legal treatment of subjects of the Queen, as Queen of countries other than Australia. A family, such as that of the applicant, arriving in Australia in 1974, owed allegiance to the Queen on their arrival. They should be taken by their actions at the time of entering and joining the Australian community, living here and participating in special civil rights and duties within it without need to change citizenship, to have gone through the same "evolutionary" and "mystical" process of transferring their allegiance to the Queen of Australia as those, like Mr Taylor's family, who had come a little earlier. By the mid 1980s, the constitutional evolution to which the majority in Re Patterson referred, approached its completion. That completion was reflected in the moves to enact the 1984 amendments to the Australian Citizenship Act. It was when the end of the special status of British subjects was fully recognised in the Australian legislation commencing on 1 May 1987 that the process of constitutional development should, in my view, be taken to have been completed. Any such legislation did not cause the constitutional change. But it reflected and evidenced the fact that, by then, the change had occurred. Fixing the date of the change in the mid 1980s rather than 1948, accords much more closely with historical and constitutional facts and with the letter of much Australian statute law well after 1948. Australia Acts β a definitive moment? The applicant invoked as determinative the resort of Australian legislators to the United Kingdom Parliament to procure the passage of the Australia Act 1986 (UK). That Act and the coordinate federal and State Acts154 were said to amount to a formal recognition by all relevant legislatures of the final severance of "the remaining constitutional links between Australia and the United Kingdom"155. 154 See the Australia Act 1986 (Cth), Australia (Request and Consent) Act 1985 (Cth), Australia Acts (Request) Act 1985 (NSW), Australia Acts (Request) Act 1985 (Vic), Australia Acts (Request) Act 1985 (SA), Australia Acts (Request) Act 1985 (Q), Australia Acts (Request) Act 1985 (WA), Australia Acts (Request) Act 1985 (Tas). 155 Explanatory Memorandum to the Australia (Request and Consent) Bill 1985 (Cth) and Australia Bill 1986 (Cth). Kirby In Attorney-General (WA) v Marquet156 I expressed my reservations about the validity of the relevant parts of the Australia Acts invoked in that case. I contested the proposition that, in 1986, the United Kingdom Parliament had any legislative power to enact a law with respect to Australia's constitutional arrangements. Such power in my view belongs, and in 1986 belonged, only to the Australian people and their legislatures. So far as the federal Act is concerned, the stream could not rise higher than the source. It could not enlarge federal constitutional power or make it greater than it was. Nor, in my opinion, did s 51(xxxviii) of the Constitution provide a source for the validity of the federal Act157. That Act was subject to the provisions of Chs III and V of the Constitution, including provisions with respect to the States and the requirements of s 128 concerning alteration of the Constitution. However, in Marquet, my view was not adopted by the majority of this Court. Pending a greater enlightenment, I must accept this Court's holding that the Australia Acts are valid laws. Unlike others, I will in this case abide by the recent majority holding of the Court. In his reasons in this case, Callinan J158 has adopted as determinative of the change of status of people in the applicant's class 3 March 1986, being the date of the coming into force of the Australia Acts of that year by the Queen's Royal Assent, signified by Her Majesty personally in Canberra on that day. McHugh J has agreed in this conclusion159. It is appropriate for me to adopt the identical conclusion of McHugh J and Callinan J that the enactment of the Australia Acts in 1986 represented an important constitutional moment. Thereafter, the special residual status for non-citizen British subjects born in the United Kingdom or elsewhere was anomalous and inappropriate, both as a matter of statute and constitutional law. It follows that, although I adhere to the opinion that I expressed in Re Patterson, it is desirable that the unseemly persistence in challenges to this Court's rulings upon this matter be brought to an end. This reinforces my resolve to surrender my own opinion and agree in the date that McHugh J and Callinan J have adopted. The difference in time reflected in the two views is trivial. It is irrelevant to the facts of this case, given that the applicant arrived in Australia as an infant in 1974. 156 (2003) 202 ALR 233 at 282-284 [202]-[208]. 157 cf Sue v Hill (1999) 199 CLR 462 at 490-493 [60]-[66]. 158 Reasons of Callinan J at [177]. 159 Reasons of McHugh J at [51]. Kirby I therefore concur in finding the applicable date for the termination of the status of non-citizen British subjects as being 3 March 1986. The process that had begun in the change in Australian nationality at an unspecified time after federation should be taken to have concluded on 3 March 1986. Persons arriving as immigrants in Australia as "subjects of the Queen" on and before that date were not "aliens". They cannot be deported as such under laws made pursuant to the "aliens" head of constitutional power. Ultimately, only this Court can say when such a moment of constitutional change arrived. The Parliament could not do so. Nor did it purport to do so by introducing the statutory concept of citizenship160. Many more political, economic, social and legal changes had to occur before the constitutional notion of alienage would change in its content. But change it eventually did. Status of the applicant and others: The result of this analysis is that, at the time the applicant arrived in Australia in 1974 as a boy of two years, he was not an "alien" for constitutional purposes. He could not thereafter, by legislation of the kind invoked, having retrospective operation, be turned into an "alien". Otherwise, every national, including every citizen and even those born in Australia would be vulnerable to statutory change of their nationality status without any renunciation of nationality or other action relevant to their status. Accordingly, the provisions of the Act, and of the regulations, pursuant to which the Minister purported to "cancel" the applicant's "visa" had no validity in their application to him under the constitutional power to make laws with respect to "aliens". It follows that, to the extent that such laws purported to apply to the applicant, they were beyond the legislative power of the Federal Parliament and the regulation-making power of the federal Executive. The provisions of those laws should therefore be read down in their application to the applicant. He cannot be expelled from Australia any more than a citizen with a bad criminal record could be expelled. In the transitional class of non-citizen non-alien British subjects who are members of the Australian community, Australia must accept the applicant as an Australian "subject of the Queen". This status protects from expulsion a person with a bad criminal record such as his, on the basis that, doing so, acknowledges constitutional recognition and protection for the many thousands of persons in the residual class who arrived before March 1986 and who have become full and loyal members of the Australian community with Reframing Legal and 160 cf Horrigan, "Paradigm Shifts Constitutional Reasoning" Interpreting Constitutions: Theories, Principles and Institutions, (1996) 31 at 35; Meagher, "Guided by Voices? β Constitutional Interpretation on the Gleeson Court", (2002) 7 Deakin Law Review 261 at 269-270, 280. in Interpretation: in Sampford and Preston (eds), Kirby blameless records and civic fidelity. For the protection of their rights, tolerating the applicant who grew from boyhood to adulthood in Australia, is a small price to pay. In truth, the real legal principle at issue in this case is not the supposed alienage of the applicant but the suggested alienage (and therefore vulnerability to deportation) of thousands of members of the Australian community who arrived on a basis similar to the applicant before 3 March 1986. For them, as for him, the Constitution stands guardian. The "immigration" power The process or activity of immigration: Having reached the foregoing conclusion, it is necessary to consider the Minister's alternative constitutional propositions. The first of these was that the applicant could be deported under laws deriving their validity from the constitutional power over "immigration"161. As has been said, a long line of authority, dating back to this Court's earliest years162, has recognised that, generally speaking, the power to make laws with respect to immigration is lost once an immigrant has arrived in Australia and become a member of the Australian community. This proposition has been repeatedly upheld163. It was a proposition effectively conceded by the Minister in Re Patterson164. It is a view of the constitutional power over immigration appropriate to a country so dependent upon that process. It is supported by the terms in which the power is conferred by the Constitution, being by reference to a continuous activity ("immigration") and not by reference to a status acquired by reason of participating in that activity ("immigrants"). This principle must be applied to the applicant. On the face of things, like Mr Taylor, the applicant is entitled to say that he arrived in Australia as an infant with his parents, has been here continuously without departure for 29 years, and has thus long since concluded his process of "immigration". He is therefore beyond the reach of federal law (at least of a coercive character) enacted by reference to the spent activity of immigration. This conclusion is reinforced, if 161 Constitution, s 51(xxvii). 162 Potter v Minahan (1908) 7 CLR 277. 163 R v Macfarlane; Ex parte O'Flanagan and O'Kelly (1923) 32 CLR 518 at 531-533; Ex parte Walsh and Johnson; In re Yates (1925) 37 CLR 36 at 61-62, 109, 112; R v Carter; Ex parte Kisch (1934) 52 CLR 221 at 229; R v Director-General of Social Welfare (Vict); Ex parte Henry (1975) 133 CLR 369 at 378, 381-382, 383; Cunliffe v The Commonwealth (1994) 182 CLR 272 at 295. 164 (2001) 207 CLR 391 at 397, 407 [32]. See also Nolan v Minister for Immigration and Ethnic Affairs (1988) 165 CLR 178 at 193-195. Kirby such reinforcement were necessary, by legislative provisions treating the process of absorption into the Australian community as complete at the end of five years165. On the face of things, the decision in Re Patterson appears to stand as specific authority against the proposition, advanced by the Minister, reliant upon the "immigration" power. However, the Minister sought to distinguish Re Patterson on the footing that the applicant had not been absorbed into the Australian community by the time the decision was made to cancel the applicant's visa. This argument was propounded on the basis that the process of "absorption" into the community could not commence in the case of an "immigrant child" until he or she attained adulthood. Only then would that person have the legal capacity, by affirmative decision, to change his or her nationality status. Such change of status required formalisation in a process of "naturalization" as envisaged by the Constitution166 and given effect by legislation167. If these arguments were accepted, the Minister submitted that, not only had the applicant not formalised his change of nationality by naturalisation, but, by his repeated criminal conduct and by the periods of time spent in prison, he had acted in ways that were inconsistent with absorption into the Australian community, a point made in Te168. The Minister sought to distinguish Re Patterson on the basis that Mr Taylor's criminal record had not commenced, like that of the applicant, during adolescence and continued into adulthood. Differentiation of child immigrants: The attempt to distinguish Re Patterson in this respect is unconvincing. Mr Taylor did not formalise a change of nationality when he became an adult. Like the applicant, he never acquired Australian citizenship, explaining that he did not think that it was necessary for persons in his position to do so. Because he arrived with his parents as an infant, and a member of a migrating family unit, he was treated, for the purposes of the "immigration" power as passing, in the same way as his parents had, beyond the entitlement of the Parliament to rely on that power to remove him. The notion 165 The Act, s 14(2), as originally enacted. See Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 486 [284]. 166 Constitution, s 51(xix). 167 Australian Citizenship Act 1948 (Cth), ss 13, 15. The naturalisation power in the Constitution was used immediately to enact the Naturalization Act 1903 (Cth), s 8. That provision provided for a certificate of naturalisation to be granted to a person thereby "entitled to all political and other rights powers and privileges and be subject to all obligations to which a natural-born British subject is entitled or subject in the Commonwealth" (emphasis added). 168 (2002) 77 ALJR 1 at 32 [201], 39 [227]; 193 ALR 37 at 80, 88-89. Kirby that, for constitutional purposes, parents had completed the process of "immigration" but that their children did not, is one that was not even argued in Re Patterson. That was so because it is unpersuasive. Parents and child in both cases engaged in a single "process" of immigration. When that process was completed for the parents, it was completed for the child. To differentiate, and to disadvantage, a child by postponing the conclusion of the process of "immigration" during minority runs counter to the realities of family immigration as a process and to the actual treatment of the applicant on his arrival in Australia as having a nationality status derivative from his parents. It is also inconsistent with the approach to the status of children as immigrants explained in R v Director-General of Social Welfare (Vict); Ex parte Henry169. It is one thing for the Parliament to enact a special provision for an "immigrant child" designed to provide for that child's welfare and to facilitate his or her full absorption into the Australian community as a child170. It is quite another, where the process of immigration of the child and its parents has concluded, to attempt, retrospectively, to impose on the child, by then a grown adult, laws justified by reference to the supposed postponement during childhood of the activity of immigration. Neither by law nor in fact was there any such postponement in the applicant's case. Like Mr Taylor, he has long since passed beyond the reach of the immigration power. That power could not sustain, as valid, legislation or regulations with a retrospective effect by reference to the activity of immigration into Australia which, in his case, was completed. The first alternative argument to support the Minister's purported action therefore fails. The "external affairs" and implied nationhood powers The external affairs power: These conclusions leave only the final ways in which the Minister sought to uphold the application of the Act to the applicant. The first was by invocation of the "external affairs" power provided in the Constitution171. This was argued on the footing that the applicant came to Australia from a place "external" to the Commonwealth, was at the time a citizen of that place and was, by the Act, to be removed, presumably to the same place, "external" to Australia. In support of this argument, the Minister invoked once again the dissenting opinions in Re Patterson172. The invocation of the "external 169 (1975) 133 CLR 369. 170 (1975) 133 CLR 369 at 374 per Gibbs J; cf at 388 per Murphy J. 171 Constitution, s 51(xxix). 172 (2001) 207 CLR 391 at 443-444 [157], 474-475 [253]. Kirby affairs" power in Re Patterson did not succeed. Otherwise, the order providing for Mr Taylor's deportation to the United Kingdom would have been confirmed; and it was not. Turning to the majority opinions in Re Patterson, I remain of the view expressed there on this point. The assertion that the "external affairs" power is attracted to the applicant's case "begs the very question to be determined"173. If he has been absorbed into the Australian community and is no longer an "alien" or an "immigrant", the basis for providing for his removal from Australia, namely his criminal record in this country, "is no longer a feature 'external' to Australia. It is well and truly positioned as an 'internal' Australian matter" to do with the Australian community174. Neither the Parliament nor the Minister could retrospectively "create the facts which condition the power needed for [a law's] own support"175. As a matter of characterisation, such a law is not one with respect to an "external affair". The existence of facts in the applicant's case creating an historical connection with a country external to Australia does not sustain a law as based on this head. Were it otherwise, the Parliament could ignore all of the limitations imposed by the "aliens" and "immigration" powers and legislate for the expulsion from Australia of the great majority of the population. Such an interpretation is self-evidently untenable in the context of s 51 of the Constitution. It is an interpretation that would potentially enhance the scope for the exercise of expulsive power over millions of Australians. It should be rejected. The implied nationhood power: That leaves, finally, the Minister's invocation of the implied nationhood power176. This was mentioned by me in passing, but without encouragement, in Re Patterson177. It was not argued in that case. It is not arguable in this case. Essentially this is so for the reasons that explain why the "external affairs" power is inapplicable. Where express powers are granted by the Constitution that are specifically relevant to the federal activity that is impugned and where such powers are subject to well developed limitations upon their exercise directly derived from the constitutional language 173 (2001) 207 CLR 391 at 496-497 [316]-[317]. See also at 412-413 [52] per 174 Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 497 [317]. 175 Polyukhovich v The Commonwealth (1991) 172 CLR 501 at 555. 176 See eg Re Wakim; Ex parte McNally (1999) 198 CLR 511 at 614-616 [221]-[224] and cases there cited. 177 (2001) 207 CLR 391 at 477 [260], fn 295. Kirby apt to that particular activity, no implied powers can cut a swathe through the Constitution to sustain an action otherwise beyond power. Conclusion, transient majorities and orders It follows that the applicant, having arrived in Australia as a migrant and permanent entrant and as a subject of the Queen before 3 March 1986 and who became a member of the Australian community with the requisite allegiance, is not an "alien". Nor is he the subject of any valid law based on any other head of constitutional power, express or implied, upon which the Minister could rely. Accordingly, in its application to him, s 501(2) of the Act was beyond the legislative powers of the Commonwealth to the extent that it purported to authorise the Minister to "cancel" the applicant's "visa" on 17 July 2001. The success of the Minister's persistent submission in the conclusion of the new majority gathered in this case, following a change of membership of the Court, is a sharp reminder of the opinionative character of constitutional doctrine. Some citizens and some judges may wish that it were otherwise; but ultimately a case such as the present obliges us to face the facts. About such questions what matters in the end is the conclusion of a majority of this Court. Indeed, there could not be a clearer illustration of that truth. Reason, history, principle, words, adverse risks and legal precedent, all bend in the wind of transient majorities. One day, if a larger challenge comes than is presented by Mr Shaw's unhappy case, it may be hoped that a new majority in this Court will gather around the view of the Constitution favoured by the majority in Re Patterson and that that view will be restored178. The question reserved in the Case Stated should be answered "No". The Minister should pay the applicant's costs in this Court. The matter should be returned to a single judge of the Federal Court of Australia to be determined consistently with this answer. 178 cf Gleeson, "Judicial Legitimacy", (2000) 20 Australian Bar Review 4 at 11: "The quality which sustains judicial legitimacy is β¦ fidelity"; Hayne, "Letting Justice Be Done Without the Heavens Falling", (2001) 27 Monash University Law Review 12 at 17: "Faithful application of precedent is at the heart of the judicial task. The justice which a judge must do, is justice according to law." (original emphasis) Callinan CALLINAN J. This is a case stated. It raises questions as to the validity of s 501(2) of the Migration Act 1958 (Cth) ("the Migration Act") in its application to an immigrant from the United Kingdom of persistent criminal inclination who has lived in Australia for about twenty-nine of the thirty-one years of his life. The facts The applicant was born in the United Kingdom on 27 December 1972 and arrived in Australia with his parents on 17 July 1974. They were citizens of the United Kingdom and Colonies, and British subjects. They entered this country on a permanent entry permit pursuant to s 6 of the Migration Act179 as it then stood. 179 Section 6 of the Migration Act 1958 (Cth) then provided: "(1) An immigrant who, not being the holder of an entry permit that is in force, enters Australia thereupon becomes a prohibited immigrant. An officer may, in accordance with this section and at the request or with the consent of an immigrant, grant to the immigrant an entry permit. An entry permit shall be in a form approved by the Minister and shall be expressed to permit the person to whom it is granted to enter Australia or to remain in Australia or both. For the purposes of the last preceding sub-section, where a notation in a form approved by the Minister as a form of entry permit is made by an officer in a passport or other document of identity held by a person and the notation does not specify the name of any person as the person to whom it relates, the notation has effect as if it were expressed to relate to the person holding the passport or other document. An entry permit may be granted to an immigrant before he enters Australia or after he has entered Australia (whether before or after the commencement of this Part). An entry permit that is intended to operate as a temporary entry permit shall be expressed to authorize the person to whom it relates to remain in Australia for a specified period only, and such a permit may be granted subject to conditions. A woman who enters Australia in the company of, and whose name is included in the passport of, or any other document of identity of, her husband shall be deemed to be included in any entry permit granted to her husband before his entry and written on that passport or other document of identity, unless the contrary is stated in the entry permit. (Footnote continues on next page) Callinan The applicant has not left Australia since 17 July 1974. He has not enrolled as an elector on the national electoral rolls, has never applied for, or obtained an Australian passport, and has not sought to become an Australian citizen pursuant to the Australian Citizenship Act 1948 (Cth). Regulation 4 of the Migration Reform (Transitional Provisions) Regulations (Cth), which was made under the Migration Reform Act 1992 (Cth), provided that a permanent entry permit held by a non-citizen continues in effect after 1 September 1994 as a transitional (permanent) visa permitting the holder to remain indefinitely in Australia. Such a visa however, is held subject to the respondent's power of cancellation under s 501(2) of the Migration Act, which may be exercised if he reasonably suspects that its holder does not pass the character test within s 501(6) of the Migration Act, and does not satisfy the respondent that he or she passes the character test. Section 501(6) provides: "(6) For the purposes of this section, a person does not pass the character test if: the person has a substantial criminal record (as defined by subsection (7)); or the person has or has had an association with someone else, or with a group or organisation, whom the Minister reasonably suspects has been or is involved in criminal conduct; or having regard to either or both of the following: the person's past and present criminal conduct; the person's past and present general conduct; A child under the age of sixteen years who enters Australia in the company of, and whose name is included in the passport of, or any other document of identity of, a parent of the child shall be deemed to be included in any entry permit granted to that parent before the entry of that parent and written on that passport or other document of identity, unless the contrary is stated in the entry permit." Callinan the person is not of good character; or in the event the person were allowed to enter or to remain in Australia, there is a significant risk that the person would: engage in criminal conduct in Australia; or harass, molest, intimidate or stalk another person in Australia; or (iii) vilify a segment of the Australian community; or incite discord in the Australian community or in a segment of that community; or represent a danger to the Australian community or to a segment of that community, whether by way of being liable to become involved in activities that are disruptive to, or in violence threatening harm to, that community or segment, or in any other way. Otherwise, the person passes the character test." Section 501(7) defines "substantial criminal record" as follows: "(7) For the purposes of the character test, a person has a substantial criminal record if: the person has been sentenced to death; or the person has been sentenced to imprisonment for life; or the person has been sentenced to a term of imprisonment of 12 months or more; or the person has been sentenced to 2 or more terms of imprisonment (whether on one or more occasions), where the total of those terms is 2 years or more; or the person has been acquitted of an offence on the grounds of unsoundness of mind or insanity, and as a result the person has been detained in a facility or institution." The applicant's first offence was committed when he was only 14 years old, and has been followed by a life of persistent criminal conduct. The offences the applicant has committed have included stealing, breaking and entering, and the unlawful use of a motor vehicle. A number of custodial sentences were imposed for these crimes. In 1998, he was sentenced to five years imprisonment Callinan for property offences. A further two and a half years term of imprisonment was imposed in 1998 for drug related offences. On 17 July 2001, the respondent purported to cancel the applicant's visa on the ground that the applicant had a "substantial criminal record" and therefore did not pass the character test as stated in s 501(6). The applicant sought a review of the decision of the respondent in the Federal Court of Australia. The case stated Before the applicant's application for review was heard in the Federal Court, the Attorney-General of the Commonwealth applied as of right under s 40(1) of the Judiciary Act 1903 (Cth) ("the Judiciary Act") for the removal of the cause to this Court. Section 40(1) provides: "(1) Any cause or part of a cause arising under the Constitution or involving its interpretation that is at any time pending in a federal court other than the High Court or in a court of a State or Territory may, at any stage of the proceedings before final judgment, be removed into the High Court under an order of the High Court, which may, upon application of a party for sufficient cause shown, be made on such terms as the Court thinks fit, and shall be made as of course upon application by or on behalf of the Attorney-General of the Commonwealth, the Attorney-General of a State, the Attorney-General of the Australian Capital Territory or the Attorney-General of the Northern Territory." On 9 October 2002, a Justice of this Court ordered that the whole of the cause pending in the Federal Court be removed to the Court. On 9 December 2002, his Honour Gummow J ordered that a case be stated for the consideration of the Full Court under s 18 of the Judiciary Act. The following question was reserved for the consideration of the Full Court: "Was subsection 501(2) of the Migration Act 1958 (Cth) within the legislative powers of the Commonwealth to the extent that it authorised the respondent to cancel the applicant's visa on 17 July 2001?" Callinan Post-war immigration from the United Kingdom The historical context in which this case arises cannot be ignored180. As with many others, the applicant's family was induced to leave the United Kingdom and come to this country to live as permanent residents as participants in a broader programme designed to encourage migration to Australia by citizens of the United Kingdom. Shortly after the Second World War, the Australian government embarked upon a programme of reconstruction and expansion. As part of it, a decision was made that immigrants should make up at least one percent of the total population. Priority was given to immigrants from the United Kingdom. In 1946 and 1947, the Australian and British governments entered into agreements to provide free and assisted passage to British ex-servicemen, selected civilians and their dependants. Other schemes to encourage migration from Britain included a campaign to "Bring Out a Briton" which started in 1957 and which encouraged employers and organisations to sponsor nominated families to assist them to settle in this country. The most dramatic increase in the Australian population of former residents of the United Kingdom occurred between 1961 and 1971. In 1971, the number of people living in Australia who had been born in the United Kingdom exceeded one million.181 The agreements reached between the respective governments set out the basis upon which they would cooperate182: "in order to assist suitable persons in the United Kingdom to proceed to Australia for permanent settlement." (emphasis added) That the agreements envisaged long term residency in Australia of those following further illustrated by the whose passage was assisted understanding183: 180 The history which I summarize has as its source authoritative records and documents compiled by the department of government administered by the respondent. 181 Department of Immigration and Multicultural Affairs, Immigration: Federation to Century's End 1901-2000, (2001) at 33. 182 Australia/United Kingdom Assisted Passage [Migration] Agreement, ATS 1967 No 14 at 1. 183 Australia/United Kingdom Assisted Passage [Migration] Agreement, ATS 1967 No 14 at 2. Callinan In the event of a migrant not remaining in Australia for a minimum period of two years after arrival, the Commonwealth Government shall be at liberty to require him to repay to the Commonwealth of Australia the difference between the cost of his passage and the amount contributed by him thereto. The Commonwealth Government may also require each migrant, prior to his departure for Australia, to sign an undertaking to make such repayment if he should depart within two years hereinbefore referred to." The British government withdrew assistance to intending immigrants in 1972, but the Australian government continued to afford it until 1981. The overwhelming majority of those who came to Australia after the end of the Second World War did so under an assisted migration programme184. It may be safely assumed that most if not all of those immigrants were subjects of the Queen, a constitutional expression in this country185, and would have continued so to regard themselves when they reached and settled in Australia. Whether this applicant or his parents were assisted migrants is beside the point. They entered this country as subjects of the Queen enjoying a special status in Australia in circumstances in which great encouragement was being held out to Britons to become Australians. The fact of that encouragement provides an indication that this country and its government also regarded the British entrants as people having a like status to those who were born in this country. Interfering with status The applicant's entitlement to permanent residency in Australia is a matter of "status". The concept of status was described by Griffith CJ in Daniel v Daniel186: "Without pretending to give an exhaustive definition, I apprehend that the term 'status' means something of this sort: a condition attached by law to a person which confers or affects or limits a legal capacity of exercising some power that under other circumstances he could not or could exercise without restriction." In Ford v Ford Latham CJ said this187: 184 Department of Immigration and Multicultural Affairs, Immigration: Federation to Century's End 1901-2000, (2001) at 34. 185 Constitution, ss 34 and 117. 186 (1906) 4 CLR 563 at 566. 187 (1947) 73 CLR 524 at 529. Callinan "A person may be said to have a status in law when he belongs to a class of persons who, by reason only of their membership of that class, have rights or duties, capacities or incapacities, specified by law which do not exist in the case of persons not included in the class and which, in most cases at least, could not be created by any agreement of such persons. An alien, for example, as distinct from a subject of the Crown, a married person as distinct from an unmarried person, a bankrupt as distinct from other persons generally, are all persons who have a particular status." Courts have long been reluctant to alter the status of a person without a compelling reason to do so. In In re Selot's Trust188, Farwell J expressed the need for caution in making such an alteration or reaching a conclusion about it. His Lordship said189: "the onus is on the person asserting that there has been a change in status to prove it ...". The applicant's argument The applicant contends that s 501(2) is beyond the legislative power of the Commonwealth Parliament to the extent that it authorised the respondent to cancel his visa. He argued that s 501(2) is not a valid exercise of the power of the Parliament under "naturalization and aliens" (s 51(xix)) or "immigration and emigration" (s 51(xxvii)): or, that in any event it could have no application to him as a British subject who had first entered Australia in 1974 and had lived here for the whole of his life since then. laws with respect the Constitution to make The immigration power It is convenient to deal with the applicant's contention with regard to s 51(xxvii) first. It is submitted by the applicant that at the date of the cancellation of his visa, he had long been a member of the Australian community and had ceased to be an immigrant. He was therefore beyond the reach of the immigration power. In support of this proposition the applicant referred to Ex parte Walsh and Johnson; In re Yates190. In that case, Knox CJ said191: 189 [1902] 1 Ch 488 at 492. 190 (1925) 37 CLR 36. 191 (1925) 37 CLR 36 at 64-65. Callinan "a person who has originally entered Australia as an immigrant may, in course of time and by force of circumstances, cease to be an immigrant and becomes a member of the Australian community. He may, so to speak, grow out of the condition of being an immigrant and thus become exempt from the operation of the immigration power. The power to make laws with respect to immigration would, no doubt, extend to enable Parliament either to prohibit absolutely or to regulate as it might think fit immigration into Australia, but, in my opinion, it does not extend to enable Parliament to prohibit or regulate anything which is not immigration, and the decision in Potter v Minahan192 shows that, when the person seeking to enter the Commonwealth is a member of the Australian community, his entry is not within the power to make laws with respect to immigration." In Re Patterson; Ex parte Taylor193, a case of some similarity to this one, the respondent conceded, and rightly so, that the applicant there had been absorbed into the Australian community, and accordingly, s 501(3) of the Migration Act could have no valid application to him. Precisely how long a period of residence must have passed, or what communal activities, or abstention from anti-social activities, must have taken place, for absorption into the Australian community to have occurred has not so far been settled by this Court. Gleeson CJ however, did point out in Re Minister for Immigration and Multicultural Affairs; Ex parte Te194, that "absorption" identifies the point at which a person's status as an immigrant comes to an end: "The concept of absorption into the Australian community, vague as it may be, has been developed as a method of indicating that the activity of immigration in which a person has engaged has come to an end." In the same case I pointed out195, and I adhere to the view, that persistent serious criminal activity from soon after the inception of residence here is likely to be regarded as antipathetic to absorption into the general community. 192 (1908) 7 CLR 277. 193 (2001) 207 CLR 391 at 407 [32]. 194 (2002) 77 ALJR 1 at 6 [26]; 193 ALR 37 at 42. 195 (2002) 77 ALJR 1 at 39 [227]; 193 ALR 37 at 88-89. Callinan The applicant in this case has been absorbed into the Australian community. His residence here for more than ten years with his parents before the commission by him of serious crime produced that result. He is therefore beyond the reach of the immigration power conferred upon Parliament by s 51(xxvii) of the Constitution. Section 501(2) of the Migration Act has no application in relation to this applicant. The "aliens" power The next question is whether the section can operate in relation to the applicant conformably with s 51(xix) of the Constitution. The answer depends on the proper construction of the word "alien". The applicant contends that as he was born in the United Kingdom and entered Australia in 1974 he is not an alien. At the time of his birth and settlement in Australia with his parents, the applicant was a citizen of the United Kingdom and Colonies, and a British subject196. He was therefore a member of a class of persons who were "British subjects" for the purposes of s 7 of the Nationality and Citizenship Act 1948 (Cth) ("the Nationality and Citizenship Act"), and, later, a member of a class of persons having the "status of British subjects" following amendments to that Act in 1969 which renamed it the Australian Citizenship Act 1948 (Cth) ("the Citizenship Act"). Persons of that status were expressly excluded from the definition of "alien" for citizenship purposes. The position remained unchanged until amendments to the Citizenship Act were enacted in 1984 to commence on 1 May 1987197. By the time that the special status of British subjects as non-aliens was changed by the removal of the exception in their favour in the Citizenship Act, the applicant contends, he had become a member of the Australian community, a person who was, in effect, an Australian and not an alien, and therefore beyond the reach of the aliens power under s 51(xix) of the Constitution. Alternatively, the applicant argues, he could not have been regarded as an alien until the commencement of the Australia Act 1986 (Cth) and the Australia Act 1986 (UK) on 3 March 1986 ("the Australia Acts"), at which point the United Kingdom became a foreign power for the first time. The respondent, on the other hand, argues that the passage of the Nationality and Citizenship Act and the British Nationality Act 1948 (UK) ("the British Nationality Act") produced the result that Australia became then an 196 British Nationality Act 1948 (UK), ss 1 and 4. 197 Australian Citizenship Amendment Act 1984 (Cth). Callinan independent nation with its own citizens, and exclusive rules about entitlement to citizenship. On this argument, there was after 1949 a Queen of Australia distinct, in legal theory, from the Queen of the United Kingdom. Parliament and Parliament alone could determine that a person who was not born in Australia, or who did not have Australian parents (whether or not they were British subjects), was an alien absent a grant of Australian citizenship. At federation, the term "alien" certainly did not extend to British subjects. As Mason CJ, Wilson, Brennan, Deane, Dawson and Toohey JJ observed in Nolan v Minister for Immigration and Ethnic Affairs198: "The word could not ... properly have been used in 1900 to identify the status of a British subject vis-Γ -vis one of the Australian or other colonies of the British Empire for the reason that those colonies were not, at that time, independent nations with a distinct citizenship of their own. At that time, no subject of the British Crown was an alien within any part of the British Empire." The question accordingly is, at what point can a British subject who has not obtained formal Australian citizenship be regarded and treated as an alien. Several possibilities have been suggested: 1949, on the commencement of the Nationality and Citizenship Act and the British Nationality Act; some unidentifiable date before 1973; 1973 itself; some unidentifiable date after it and before 1986; 1986 itself on the commencement of the Australia Acts; and 1987 on the commencement of the amendments to the Citizenship Act to which I have referred. This Court has held that there has been an evolutionary change in the meaning of the term "alien" but has not definitively stated the starting point or the terminus of that evolution. In Nolan, Mason CJ, Wilson, Brennan, Deane, Dawson and Toohey JJ said that following the creation of separate Australian citizenship by the Nationality and Citizenship Act199: "The fact that a person who was born neither in Australia nor of Australian parents and who had not become a citizen of this country was a British subject or a subject of the Queen by reason of his birth in another country could no longer be seen as having the effect, so far as this country is concerned, of precluding his classification as an 'alien'." However, in Patterson the Court found that a British subject who was born in the United Kingdom and had come to live permanently in Australia in 198 (1988) 165 CLR 178 at 183. 199 (1988) 165 CLR 178 at 184. Callinan 1966 was not an alien. McHugh J noted that the connotation of the term "alien" had remained the same since Federation, but that, along with the evolution of Australia as a sovereign state, the denotation of the term had changed200. That is, the term "alien" now refers to classes of persons who would not have been so regarded at federation, and may include British subjects who are not citizens of Australia. However his Honour held, for reasons I discuss below, that the denotation of the term had not changed sufficiently in the case of the applicant in that case to alter his status to that of an alien. The Solicitor-General of the Commonwealth, who appeared for the respondent, sought leave to re-open Patterson and invited the Court to affirm its decision in Nolan201. It was argued that Patterson does not express a ratio concerning the class of British subjects who are neither Australian citizens nor aliens. As such, it was contended that Patterson offers no binding constitutional principle and need not be followed. Rather, the Court's earlier decision in Nolan should be followed. An additional basis for preferring the decision in Nolan, it was argued, was inconvenience arising from seeking to apply Patterson in various circumstances. Long v Minister for Immigration and Multicultural and Indigenous Affairs202 was cited as an example. With respect to those who hold the contrary view, I do not agree. The difficulty that arises from Patterson is the lack of the statement of a definitive final milestone in the evolutionary process of complete independence, not the absence of an explicit statement by a majority of the Court that Nolan should be overruled. The decision in Nolan, as McHugh J said in Patterson203: "overlooked two significant matters. First, if the emergence of Australia as an independent nation had made Australians who were subjects of the Queen of the United Kingdom subjects of the Queen of Australia, there was no constitutional reason for distinguishing their position from that of British born subjects of the Queen of the United Kingdom living in Australia. Logically, the evolutionary process that converted persons born in Australia into subjects of the Queen of Australia must also have converted British born subjects living in Australia into subjects of the Queen of Australia. Secondly, although the joint judgment in Nolan 200 (2001) 207 CLR 391 at 427-428 [111]. 201 (1988) 165 CLR 178. 202 [2002] FCA 1422. 203 (2001) 207 CLR 391 at 421 [90]. Callinan referred to s 117 of the Constitution, it failed to acknowledge and give effect to its implications and the light that those implications threw on who was an 'alien' for the purpose of s 51(xix) of the Constitution." In Sue v Hill a majority of this Court held that, at least by the commencement of the Australia Acts, the United Kingdom was a foreign power for the purposes of s 44(1) of the Constitution204. It was not, however, necessary then for the Court to decide the precise time that the United Kingdom came to be so viewed. I pointed out in Sue v Hill that there were problems in seeking to apply changing denotations of constitutional terms in tandem with an evolutionary theory of Australian independence205: "The great concern about an evolutionary theory of this kind is the doubt to which it gives rise with respect to peoples' rights, status and obligations as this case shows. The truth is that the defining event in practice will, and can only be a decision of this Court ruling that the evolutionary process is complete, and here, as the petitioners and the Commonwealth accept, has been complete for some unascertained and unascertainable time in the past." I also thought that the evolutionary theory was one to be regarded with great caution206. While a precise date at which Australia actually achieved complete constitutional independence may not, in strict legal, or indeed historical theory, be able to be determined, it is highly desirable that a point in time by which it had occurred be nominated. To do so will give guidance to courts in applying the decision in Patterson. It is necessary, therefore, to consider the alternative dates that have been advanced. The magic date is not, in my view, 1949 as contended by the respondent. It may be said that the enactment of citizenship legislation in Australia and the United Kingdom in 1948 reflected changes in the Imperial system. However, that legislation did not and could not alter the constitutional status of the Sovereign in this country. That some marked political evolution had taken place cannot be disputed, but it is not appropriate to cite political change in support of changes to the law. To do so would be to fall into the same sort of error as 204 (1999) 199 CLR 462. 205 (1999) 199 CLR 462 at 571-572 [291]. 206 (1999) 199 CLR 462 at 571 [290]. Callinan Viscount Sankey LC (delivering the opinion of the Judicial Committee) made in British Coal Corporation v The King207 in treating politics as one and the same as the law. In that case, his Lordship said that the possibility that the British Parliament might repeal the recognition of the legislative independence of the dominions that the Statute of Westminster conferred on them, was "theory" and had no "relation to realities". Such a statement conflates political "realities" with the true legal position. Nothing that I have said is to deny the importance of both politics and realpolitik in circumstances in which the Constitution and the legal arrangements that give it effect and validity have insufficient, or nothing that is definitive, to say about the constitutional issue to be decided. But this is not such a situation. Unlike in the case of Eire and the securing of its independence, there is no legal ambiguity about the cooperative arrangements between the United Kingdom and Australia by which the Australian federation was established and has moved towards independence. Nor at any stage has it been necessary for the people of this country in order to obtain their national independence, to resort, as happened in the colonies of North America, to arms and rebellion. The Australian people have since 1900 proceeded regularly, indeed scrupulously and overtly legally, in collaboration with the Parliament of the United Kingdom along the path to full and independent nationhood. There has never been and there is now no occasion to resort to political theory, or perhaps more accurately, realpolitik, in lieu of the combined legislative measures constituted by the joint endeavours of the States, the Commonwealth, and the United Kingdom208. Had Viscount Sankey LC been correct in 1935 there would have been no need for the elaborate mechanism of the Australia Acts. I would reject arguments in support of 1949 as the magic date for the same reason. The British Nationality Act dealt with a number of matters concerning the citizenship of United Kingdom residents. It did not purport to deal with the status in Australia of Australian residents. Further inquiry into the effect of the English statute would require the Court to embark on the undesirable, and here unnecessary, exercise of construing the legislation of another country. The argument that British immigrants who settled in Australia before 1973 are not aliens within the meaning of the Constitution is based on the fact of the 207 [1935] AC 500 at 520. 208 See the Australia Act 1986 (Cth), Australia Act 1986 (UK), Australia (Request and Consent) Act 1985 (Cth), Australia Acts (Request) Act 1985 (Q), Australia Acts (Request) Act 1985 (NSW), Australia Acts (Request) Act 1985 (Vic), Australia Acts (Request) Act 1985 (Tas), Australia Acts (Request) Act 1985 (SA), Australia Acts (Request) Act 1985 (WA). Callinan enactment in 1973 of the Royal Style and Titles Act 1973 (Cth) which adopted a new style for the Sovereign: Queen of Australia. McHugh J in Patterson, for example, accepted that "subject of the Queen" as that phrase appears in s 117 of the Constitution had evolved to mean "subject of the Queen of Australia"209. His Honour went on to hold that, by parity of reasoning, subjects of the Queen resident in Australia at the time that the evolutionary process came to an end, became subjects of the Queen of Australia irrespective of their place of birth210. The significance of this is that once a person is accepted as a subject of the Queen for the purposes of the Constitution, that person cannot be an alien for the purposes of the Constitution211. In my view, 1973 is not the appropriate date. The change to the Sovereign's style and title in Australia in 1973 rang no bell for British born subjects of the Queen who had settled in Australia: that, suddenly, notoriously and decisively they were now aliens. The applicant's status in this country should not be made a casualty of an unrecorded, unnoticed, unheralded, and undefined, in chronological terms, evolutionary denotational change in constitutional meaning. In Patterson, Kirby J placed greater emphasis on the commencement in 1987 of amendments to the Migration Act and the Citizenship Act that were passed in 1983 and 1984 respectively212. His Honour said that213: "All immigrants, including non-citizen British subjects, arriving in Australia after May 1987 at the latest may be taken to be aware, or could be advised, that the privileged position accorded before that time to non- citizen British subjects was thenceforth terminated. However, such termination did not, in my view, operate retrospectively on the class of persons who arrived before that time. ... So far as the Migration Act was concerned, it did not have the power to do so, at least in respect of immigrants who have been absorbed into the community and are members of the people, and electors, of the Commonwealth." 209 Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 435 [131]. 210 Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 435 [131]. 211 Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 435 [132] per McHugh J. 212 Migration Amendment Act 1983 (Cth), s 4; Australian Citizenship Amendment Act 1984 (Cth), s 5. 213 Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 496 [313]. Callinan I note that the applicant in the present case does not have the right to vote in Australia214. I would not understand Kirby J to have ruled that factor to be determinative. As Gleeson CJ said in Re Minister for Immigration and Multicultural Affairs; Ex parte Te215, the right to vote is not necessarily inconsistent with alienage or vice versa. In my opinion, the correct date for the change in status of a subject of the Queen in Australia can be no earlier than the coming into force of the Australia Acts: 3 March 1986. The long title of the Australia Act 1986 (Cth) is: to bring "An Act the Commonwealth and the States into conformity with the status of the Commonwealth of Australia as a sovereign, independent and federal nation." constitutional arrangements affecting It was this overt legislative act, mirroring simultaneous legislation in the United Kingdom, that gave voice to the completion of Australia's evolutionary independence. It was a formal declaration that the Commonwealth of Australia and the Australian states were completely constitutionally independent of the United Kingdom. Nothing can serve so well to give legitimacy to a nation and its constitutional integrity as a rare and complete consensus of governments of the kind that the enactment of the Australia Acts represents. The respondent's alternative arguments In addition to advancing the arguments that s 501(2) of the Migration Act is supported by both the immigration power and the power with respect to "aliens", the respondent argues that there are two other bases upon which the validity of the section can be supported. The first is that the section is a valid exercise of power with respect to external affairs under s 51(xxix) of the Constitution. The second is that an "implied nationhood" power supports legislation such as s 501(2) to control the entry, exit and removal of people from Australia. 214 See s 93 of the Commonwealth Electoral Act 1918 (Cth). Former British subjects who are not Australian citizens have the right to vote in Australia if they were on the electoral roll before 26 January 1984. The applicant was a British subject resident in Australia before that date, but was not eligible to vote as he had not yet reached the age of 18 years. 215 (2002) 77 ALJR 1 at 6 [30]; 193 ALR 37 at 43. Callinan I would reject the respondent's alternative arguments. The legislative powers of the Commonwealth Parliament are to be found in the text of the Constitution, primarily, if not almost exclusively, in s 52. Constitutional implications may only be made in clear and unarguable cases of real necessity. There is nothing in the fact of a national government to justify an implied power to legislate for the removal of persons from Australia otherwise than pursuant to the ample but not absolutely unconfined powers enumerated in the text of the Constitution. I would add this in relation to the external affairs power. "External affairs" is a simple and clear expression. It is concerned with events, places and people external to Australia and their relation to Australia. It is not an unbridled power. It must be read with the rest of the Constitution and in conformity with the concept that it embodies, of the sharing and allocation of powers between the central government and the state governments. This applicant is a longstanding resident of Australia who entered the country before it achieved absolute independence from the United Kingdom. The external affairs power has nothing to say about his right to continue to live in Australia. The decision I summarize my conclusions. The applicant does have a long history of criminal behaviour, beginning in 1987 when he was aged 14. The respondent relies on the decision of this Court in Re Minister for Immigration and Multicultural Affairs; Ex parte Te216 as authority for the proposition that the commission of serious crimes against the community is inconsistent with a person's absorption into the community. I accept that to be generally so, but in this case the applicant had been living in Australia for more than 12 years before his first conviction, and that occurred when he was still a child. In my view the applicant had been absorbed into the Australian community by the time that he came to the notice of the criminal courts. And, in any event, I would not regard that first conviction, occurring as it did when he was so young, as putting him beyond the community of ordinary Australians. I reject the respondent's argument that a person cannot be absorbed into the Australian community until he has attained adulthood217. Absorption may not necessarily be a matter of choice. It is better gauged by actual presence and conduct. 216 (2002) 77 ALJR 1; 193 ALR 37. 217 See The Queen v Director-General of Social Welfare (Vict); Ex parte Henry (1975) 133 CLR 369 at 374 per Gibbs J, 382 per Mason J. Callinan That the applicant cannot vote in Australian elections is a factor, but standing alone, and in the case of a longstanding resident, does not detract from his integration in, and participation as, a member of the Australian community. The applicant is beyond the reach of the power of the Commonwealth Parliament to legislate with respect to immigration. Nor do I consider that the applicant can be described as an "alien" for the purposes of the Constitution. At federation, a subject of the Sovereign of the United Kingdom was not an alien for the purposes of s 51(xix). There is authority of this Court to indicate that that is no longer the case. The precise time at which the Australian political and legal evolutionary process culminated in that outcome has not so far been definitively stated. However, in my view, it can be no earlier than the coming into effect of the Australia Acts in 1986. It is clear that the applicant was absorbed into the Australian community at a time when subjects of the Sovereign of the United Kingdom were accorded special privileges and status in Australia indicating that they were not to be regarded or treated as aliens. Retrospectively, to alter that status at this late stage is unacceptable and without constitutional warrant. As I have said, in my opinion, the correct date for the change in status of a subject of the Queen in Australia can be no earlier than the coming into force of the Australia Acts, the third day of March 1986. The applicant is not an "alien" for the purposes of s 51(xix) of the Constitution. Section 501(2) of the Migration Act is therefore not a valid exercise of the legislative powers of the Commonwealth under s 51(xix) in relation to him. As attractive as a different answer might be in the case of this criminal who would, in consequence of my decision if it were to prevail, continue to be a charge upon the Australian people, I am bound to answer the question as follows: Q. Was subsection 501(2) of the Migration Act 1958 (Cth) within the legislative powers of the Commonwealth to the extent that it authorised the respondent to cancel the applicant's visa on 17 July The respondent should pay the applicant's costs of the application and the case stated. 190 HEYDON J. It was common ground between the applicant and the Solicitor- General of the Commonwealth that while it is now the case that British subjects who are not Australian citizens are aliens, in 1901 British subjects were not aliens. Hence the argument between the parties postulated the axiomatic correctness of the proposition that in 1901 British subjects were not aliens, and concentrated on the question of when and how the change occurred. Understandable though this approach is, there is an unsatisfactory element in it. It is not in fact self-evident that from 1 January 1901 all British subjects were not aliens, and inquiry into a subsequent date on which, or process by which, they became aliens tends to proceed on a false footing so far as it excludes the possibility that on 1 January 1901 some of them were aliens. Much has been said in this Court and elsewhere, and much more could be said, in denial of that possibility, but there are arguments that that possibility is correct, and its correctness should be left open until a case is heard in which the contrary is not simply assumed, but fully debated. The stance of the parties makes it inevitable that the Court must proceed on the assumption on which the case was argued. On that assumption, the orders proposed by Gleeson CJ, Gummow and Hayne JJ should be made for the reasons they give. |
HIGH COURT OF AUSTRALIA Matter No P15/2011 AND APPELLANT STATE OF WESTERN AUSTRALIA & ANOR RESPONDENTS Matter No P16/2011 AND APPELLANT STATE OF WESTERN AUSTRALIA & ANOR RESPONDENTS AB v Western Australia AH v Western Australia [2011] HCA 42 6 October 2011 P15/2011 & P16/2011 ORDER In each matter: Appeal allowed. Set aside paragraphs 1 to 4 of the order of the Court of Appeal of the Supreme Court of Western Australia made 2 September 2010 and in their place order that the appeal to that Court be dismissed. The first respondent pay the appellant's costs in this Court. On appeal from the Supreme Court of Western Australia Representation S Penglis for the appellant in both matters (instructed by Freehills) G T W Tannin SC with C S Bydder for the first respondent in both matters (instructed by State Solicitor (WA)) Submitting appearance for the second respondent in both matters Intervener D S Mortimer SC with E A Bennett intervening on behalf of the Australian Human Rights Commission (instructed by Australian Human Rights Commission) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS AB v Western Australia AH v Western Australia Statutes β Construction β Gender reassignment β Applications for recognition certificates as males β Reassignment procedures undertaken to alter genitals and gender characteristics β Appellants adopted lifestyle and have physical appearance of males β Retain some female sexual organs β Whether requirement that person have "the physical characteristics by virtue of which a person is identified as male or female" met β Whether adverse social consequences or community standards and expectations permissible considerations. Words and phrases β "gender", "gender characteristics", "physical characteristics by virtue of which a person is identified", "reassignment procedure", "recognition certificate", "transsexual". Gender Reassignment Act 2000 (WA), ss 14(1), 15(1). FRENCH CJ, GUMMOW, HAYNE, KIEFEL AND BELL JJ. For many years the common law struggled with the question of the attribution of gender to persons who believe that they belong to the opposite sex. Many such persons undertake surgical and other procedures to alter their bodies and their physical appearance in order to acquire gender characteristics of the sex which conforms with their perception of their gender. Self-perception is not the only difficulty with which transsexual persons must contend. They encounter legal and social difficulties, due in part to the official record of their gender at birth being at variance with the gender identity which they have assumed. Lockhart J in Secretary, Department of Social Security v "SRA"1 and Mathews J in R v Harris2 reviewed decisions in Australia and overseas which dealt with the question of the recognition to be afforded by courts to the gender of a transsexual person who had undertaken a surgical procedure. In each case it was3 held that the decisions in Corbett v Corbett4 and R v Tan5, which applied a purely biological test, should not be followed. Lockhart J in SRA observed that the development in surgical and medical techniques in the field of sexual reassignment, together with indications of changing social attitudes towards transsexuals, led to that conclusion. His Honour said that gender should not be regarded merely as a matter of chromosomes. It is partly a psychological question, one of self-perception, and partly a social question, how society perceives the individual6. (1993) 43 FCR 299. (1988) 17 NSWLR 158. In R v Harris (1988) 17 NSWLR 158 at 159, 161-162 per Street CJ, 193 per Mathews J (Carruthers J dissenting); in Secretary, Department of Social Security v "SRA" (1993) 43 FCR 299 at 304 per Black CJ, 325 per Lockhart J (Heerey J agreeing with Black CJ and Lockhart J). See also Attorney-General v Otahuhu Family Court [1995] 1 NZLR 603 at 605-607 per Ellis J. 6 Secretary, Department of Social Security v "SRA" (1993) 43 FCR 299 at 325. Bell In Re T7 McMullin J observed that whilst courts could deal with some legal situations involving the reassignment of gender, they could not make a declaration as to the gender of a person which would bind persons who were not parties to the proceedings. Legislation was necessary. Legislation which provides for the registration of a change to the official records of a person's gender has been passed in each of the States and Territories of Australia8. In Western Australia the Gender Reassignment Act 2000 (WA) ("the Act") provides for the issue of a recognition certificate which is conclusive evidence of the fact that a person has undergone a reassignment procedure and "is of the sex stated in the certificate"9. The long title of the Act states that its purposes are to allow the reassignment of gender and establish a Gender Reassignment Board ("the Board") with power to issue recognition certificates, and to make necessary consequential to promote equality of opportunity and to provide remedies in respect of discrimination. These statutory objects and their nature, which is remedial and beneficial, assume importance in these appeals. legislative amendments, in order The functions of the Board are to receive and determine applications for recognition certificates and to issue recognition certificates in suitable cases10. On its production the certificate is required to be registered by the Registrar of Births, Deaths and Marriages ("the Registrar"), who must alter any register or index kept by the Registrar as may be necessary in view of the reassignment11. [1975] 2 NZLR 449 at 452-453. 8 Births, Deaths and Marriages Registration Act 1995 (NSW), s 32B; Births, Deaths and Marriages Registration Act 1996 (Vic), s 30A; Sexual Reassignment Act 1988 (SA), s 7; Births, Deaths and Marriages Registration Act 2003 (Q), s 23; Gender Reassignment Act 2000 (WA), s 17; Births, Deaths and Marriages Registration Act 1999 (Tas), s 28A; Births, Deaths and Marriages Registration Act 1996 (NT), s 28B; Births, Deaths and Marriages Registration Act 1997 (ACT), s 24. 9 Gender Reassignment Act 2000, s 16(1)(b). 10 Gender Reassignment Act 2000, s 5(2). 11 Gender Reassignment Act 2000, s 17(1). Bell A birth certificate for the person is to issue from the Registrar showing the person's sex in accordance with the register12. Before a person can apply to the Board for a certificate, it is necessary that the person has undergone a reassignment procedure13. A "reassignment procedure" is defined to mean14: "a medical or surgical procedure (or a combination of such procedures) to alter the genitals and other gender characteristics of a person, identified by a birth certificate as male or female, so that the person will be identified as a person of the opposite sex and includes, in relation to a child, any such procedure (or combination of procedures) to correct or eliminate ambiguities in the child's gender characteristics". Section 15 of the Act contains the conditions for the grant of a recognition certificate. Section 15(1)(a) contains certain jurisdictional requirements. It is satisfied if one or more of the following applies: that the reassignment procedure which the applicant has undertaken was carried out in Western Australia; the applicant's birth is registered in that State; or the applicant has been a resident of the State for not less than 12 months. Section 15(1)(b) provides that the Board must be satisfied that the person applying for a recognition certificate: believes that his or her true gender is the gender to which the person has been reassigned; has adopted the lifestyle and has the gender characteristics of a person of the gender to which the person has been reassigned; and (iii) has received proper counselling in relation to his or her gender identity." The focus of these appeals is sub-par (ii) and the term "gender characteristics". That term is defined to mean "the physical characteristics by 12 Gender Reassignment Act 2000, s 18(1). 13 Gender Reassignment Act 2000, s 14(1). 14 Gender Reassignment Act 2000, s 3. Bell virtue of which a person is identified as male or female"15. What is comprehended by that part of s 15(1)(b)(ii) falls to be determined by construing its terms in the context of the Act as a whole and by reference to its evident purposes16. In Commissioner for Railways (NSW) v Agalianos17, Dixon CJ referred to the importance of the context, general purpose, policy and fairness of a statutory provision, as guides to its meaning. The modern approach to statutory interpretation uses "context" in its widest sense, to include the existing state of the law and the mischief to which the legislation is addressed18. Judicial decisions which preceded the Act may be relevant in this sense, but the task remains one of the construction of the Act. Each of the appellants, AB and AH, identify themselves as male although they retain some gender characteristics of a female. Each of the appellants has undergone gender reassignment procedures, in the nature of a bilateral mastectomy and testosterone therapy. The Board was satisfied in each case that the appearance of each of the appellants is that of a male person and that all the indications were that they had adopted the lifestyle of such a person. The sole reason why it determined not to issue a certificate to them was that they retained a female reproductive system. The Board reasoned: "The fact of having a female reproductive system is inconsistent with being male. Because it is inconsistent with being male, it is inconsistent with being identified as male." The Board went on to say that there would be adverse social and legal consequences should the appellants be issued a recognition certificate whilst they have the capacity to bear children. 15 Gender Reassignment Act 2000, s 3. 16 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381 [69]; [1998] HCA 28. 17 (1955) 92 CLR 390 at 397; [1955] HCA 27. 18 CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408; [1997] HCA 2. Bell Following a review of the Board's decisions in each case, pursuant to s 21(1) of the Act, the State Administrative Tribunal ("the Tribunal") set the decisions aside, granted each application for a recognition certificate and directed the Board to issue such a certificate19. The Court of Appeal of the Supreme Court of Western Australia allowed appeals from those decisions and set aside the Tribunal's decisions, but made no orders as to costs20. For the reasons which follow these appeals should be allowed with costs and the orders of the Court of Appeal set aside, with the result that the decision and orders of the Tribunal are reinstated. Each of the appellants gave evidence before the Tribunal and led medical evidence. Each identified as a male from an early age and was diagnosed as suffering from a gender identity disorder, or gender dysphoria. The Diagnostic and Statistical Manual of Mental Disorders, to which the Tribunal referred21, explains that the term "gender dysphoria" denotes "strong and persistent feelings of discomfort with one's assigned sex, the desire to possess the body of the other sex, and the desire to be regarded by others as a member of the other sex."22 AB was aged 31 at the time of the Tribunal hearing and AH was 26. AB commenced testosterone therapy in 2004 and underwent a bilateral mastectomy in 2005. AH commenced the same therapy in 2006 and underwent the same surgical procedure in 2007 and had a further revision of the procedure Neither AB nor AH contemplate any further surgical procedures. It was explained, by medical evidence to the Tribunal, that a penis construction (phalloplasty) is not performed in Australia, because of the high risks associated with it and its low rate of success24. Neither of the appellants wished to have a 19 AB & AH v Gender Reassignment Board (WA) (2009) 65 SR(WA) 1 at 21 [145]. 20 The State of Western Australia v AH (2010) AMLC ΒΆ30-025. 21 AB & AH v Gender Reassignment Board (WA) (2009) 65 SR(WA) 1 at 10 [63]. 22 American Psychiatric Association, Diagnostic and Statistical Manual of Mental Disorders, 4th ed (text rev) (2000) at 535. 23 AB & AH v Gender Reassignment Board (WA) (2009) 65 SR(WA) 1 at 7-8 [50], 24 AB & AH v Gender Reassignment Board (WA) (2009) 65 SR(WA) 1 at 20 [135]. Bell hysterectomy. Neither considered it necessary to their sense of male identity. Each had suffered the effects of surgery in the past and wished to retain their internal organs because they believed that they might be beneficial for future phalloplasty, if advances in that procedure made it feasible25. that treatment infertile26. they will remain Each of the appellants has maintained testosterone therapy. Whilst they continue Evidence of an endocrinologist was tendered at the Tribunal hearing concerning the possibility, expressed as a percentage, that each of AB and AH might conceive children were they to discontinue that treatment. The endocrinologist gave evidence that he had not encountered one female to male transsexual who had ceased the therapy27. Each of AB and AH told the Tribunal that they would not do so and explained that it was essential to their way of life that they maintain it28. The Tribunal accepted this evidence "without reservation"29. The Tribunal detailed the changes which had been brought about to the appellants both internally, with respect to their sexual organs, and externally. The Tribunal stated30: "The applicants have not merely altered their external appearance by superficial means. The medical and surgical procedures they have undergone have altered their genitals and other gender characteristics in profound ways. They have undergone clitoral growth and have the voices, body shapes, musculature, hair distribution, general appearance and demeanour by virtue of which a person is identified as male. They have acquired characteristics that are consistent with being male, and 25 AB & AH v Gender Reassignment Board (WA) (2009) 65 SR(WA) 1 at 8 [52]-[53], 26 AB & AH v Gender Reassignment Board (WA) (2009) 65 SR(WA) 1 at 3 [4]. 27 AB & AH v Gender Reassignment Board (WA) (2009) 65 SR(WA) 1 at 12 [81]. 28 AB & AH v Gender Reassignment Board (WA) (2009) 65 SR(WA) 1 at 8 [54], 29 AB & AH v Gender Reassignment Board (WA) (2009) 65 SR(WA) 1 at 8 [55], 30 AB & AH v Gender Reassignment Board (WA) (2009) 65 SR(WA) 1 at 20 [138]. Bell inconsistent with being female, to the extent that only an internal medical examination would disclose what remains of their female gender Insofar as what remains of their female gender characteristics. characteristics has been altered to such an extent that it no longer functions, it is no longer a female gender characteristic." The Tribunal was mindful of the possibility that the appellants could not be said, with absolute certainty, to be permanently infertile31. However, it accepted that the reversion rate of female to male transsexuals was rare32. In the view of the Tribunal the appellants had done "everything medically available, short of hysterectomy, to alter their genitals and other gender characteristics so as to be identified as male." It said "[a] requirement that each [appellant] go even further and undergo a hysterectomy in these circumstances would seem to serve the purpose only of requiring further proof of their conviction."33 The issue before the Court of Appeal was whether the appellants satisfied the requirement of s 15(1)(b)(ii). In turn, this required consideration of the definition of the term "gender characteristics" and, in particular, whether each of the appellants has the "physical characteristics by virtue of which a person is identified" as male. The majority (Martin CJ and Pullin JA) did not consider this question could be answered in the appellants' favour, because the appellants retain some characteristics of a female. Martin CJ held that each of the appellants "possess none of the genital and reproductive characteristics of a male, and retain virtually all of the external genital characteristics and internal reproductive organs of a female" and that "[t]hey would not be identified, according to accepted community standards and expectations, as members of the male gender."34 Pullin JA agreed that it was necessary to apply community standards in order to answer the question posed by the Act35. 31 AB & AH v Gender Reassignment Board (WA) (2009) 65 SR(WA) 1 at 20 [140]. 32 AB & AH v Gender Reassignment Board (WA) (2009) 65 SR(WA) 1 at 20-21 33 AB & AH v Gender Reassignment Board (WA) (2009) 65 SR(WA) 1 at 21 [142]. 34 The State of Western Australia v AH (2010) AMLC ΒΆ30-025 at 36,058 [115]. 35 The State of Western Australia v AH (2010) AMLC ΒΆ30-025 at 36,059 [124]. Bell Martin CJ recognised the nature of the legislation to be beneficial, but said that it was of no assistance on the approach which he took to the requirements of s 15(1)(b)(ii). That approach was necessitated because Parliament had determined "that value judgments are to be made, involving questions of fact and degree, as to the gender with which a particular applicant is to be identified."36 His Honour rejected the prospect that a person's gender characteristics might be determined by the observation of a casual bystander37. that Buss JA dissented. His Honour considered the physical characteristics by which a person is identified as male or female are confined to external physical characteristics, for the purposes of the Act38. His Honour noted that there are obvious limitations to the extent to which a person's physical characteristics could be altered39. His Honour observed that the purpose of the Act is to alleviate the condition of persons suffering from gender dysphoria, by providing a legislative mechanism which will enable their reassigned gender to be legally recognised. The disconformity inherent in gender dysphoria is as between the person's rejection of their assigned gender and their external physical characteristics. It is the latter to which the legislation is directed, his Honour said40. Buss JA also considered the language chosen by the Parliament in the definitions of the terms "gender characteristics" and "reassignment procedure" in the Act. His Honour observed that, if the physical characteristics by virtue of which a person is identified as male or female were intended to include internal physical characteristics, such as organs associated with the person's gender at birth, the physical characteristics by virtue of which a person "is" a male or female or "will be" a person of the opposite sex41. Instead the definitions refer to the physical characteristics by which a person is, or will be "identified" as a person of the the definitions would respectively have referred 36 The State of Western Australia v AH (2010) AMLC ΒΆ30-025 at 36,056 [105]. 37 The State of Western Australia v AH (2010) AMLC ΒΆ30-025 at 36,057 [110]. 38 The State of Western Australia v AH (2010) AMLC ΒΆ30-025 at 36,068 [197]. 39 The State of Western Australia v AH (2010) AMLC ΒΆ30-025 at 36,068 [200]-[201]. 40 The State of Western Australia v AH (2010) AMLC ΒΆ30-025 at 36,069 [202]-[203]. 41 The State of Western Australia v AH (2010) AMLC ΒΆ30-025 at 36,069 [206]. Bell opposite sex. His Honour read the words "identified as" as connoting "recognised as"42. The general approach of Buss JA is to be preferred. It gives effect to the evident purpose of the legislation and is consistent with its terms. It is an approach that gives proper weight to the central issue with which the legislation grapples: that the sex of a person is not, and a person's gender characteristics are not, in every case unequivocally male or female. As the definition of "reassignment procedure" makes plain, a person's gender characteristics may be ambiguous. The injunction contained in s 18 of the Interpretation Act 1984 (WA)43 is relevant to the task of construing the provisions of the Act. Moreover, the principle that particular statutory provisions must be read in light of their purpose was said in Waters v Public Transport Corporation44 to be of particular significance in the case of legislation which protects or enforces human rights. In construing such legislation "the courts have a special responsibility to take account of and give effect to the statutory purpose". It is generally accepted that there is a rule of construction that beneficial and remedial legislation is to be given a "fair, large and liberal" interpretation45. The Act acknowledges the difficulty under which certain members of society labour by reason of the disconformity between their belief about who they are, by reference to their gender, and the social-historical record of their gender at birth. It seeks to alleviate that suffering and the discrimination which such persons may face by providing legal recognition of the person's perception of their gender. 42 The State of Western Australia v AH (2010) AMLC ΒΆ30-025 at 36,069 [205]. 43 "In the interpretation of a provision of a written law, a construction that would promote the purpose or object underlying the written law (whether that purpose or object is expressly stated in the written law or not) shall be preferred to a construction that would not promote that purpose or object." 44 (1991) 173 CLR 349 at 359 per Mason CJ and Gaudron J; [1991] HCA 49. 45 IW v City of Perth (1997) 191 CLR 1 at 12 per Brennan CJ and McHugh J, 39 per Gummow J; [1997] HCA 30, referring to Coburn v Human Rights Commission [1994] 3 NZLR 323 at 333. Bell However, a person's belief about their gender is but one requirement for the issue of a recognition certificate. Section 14 of the Act contains the minimum condition for a recognition certificate, namely that an applicant for a certificate has undergone a medical or surgical procedure to alter their genitals or other gender characteristics. The undertaking of that procedure may be seen to evidence the commitment by the person to the gender to which the person seeks reassignment. It was the absence of such an undertaking on the part of the applicant for a wife's pension which created the difficulty in SRA46. Section 15(1)(b)(i) also requires the Board to be satisfied about the person's belief in his or her true gender and sub-par (iii) requires the person to have received proper counselling concerning his or her gender identity. These are matters which are directed to how the person perceives himself or herself and the certainty of that perception. Section 15(1)(b)(ii) involves an enquiry, on the part of the Board, of a different kind. It requires, in the first place, that the Board be satisfied that the person has adopted the lifestyle of a person of the gender to which the person seeks reassignment. The adoption of a lifestyle will reflect something about a person's self-perception and, in some respects, about their maleness or femaleness. The word "lifestyle" refers to the characteristic manner in which a person lives and reflects a collection of choices which that person makes. It has both a private and a public dimension. Many lifestyle choices made by a person are observable by other members of society, by reference to how that person lives and conducts himself or herself. The first enquiry of s 15(1)(b)(ii) may therefore also direct the attention of the Board to a social perspective. read with Section 15(1)(b)(ii), the s 3 definition of "gender characteristics", further requires the Board to be satisfied that the person has the physical characteristics "by virtue of which a person is identified as male or female". In resolving what is intended by this provision, much turns upon the use of the word "identified". The majority in the Court of Appeal appear to have considered that it required the Board to determine the extent to which a person had assumed the characteristics of the opposite sex. In the way in which that enquiry was approached, it appears to have been assumed that there is some point which is reached, in the transition, when a person might be regarded as male not 46 Secretary, Department of Social Security v "SRA" (1993) 43 FCR 299 at 303-305 per Black CJ, 326 per Lockhart J (Heerey J agreeing with Black CJ and Lockhart J). Bell female or female not male. That is not an approach that is reflected in the provisions of the Act. Martin CJ observed that the word "identified" is used in s 3 in the definition of "reassignment procedure" ("identified by a birth certificate") and in the definition of "recognition certificate" ("that identifies a person who has undergone a reassignment procedure as being of the sex to which the person has been reassigned")47. The inference his Honour drew from the usage of the word "identified" was that it carried the connotation of "established" or "accepted as"48. This suggests that an applicant for a recognition certificate must have achieved the gender characteristics of the opposite sex to a high standard. Section 14(1) cannot be taken to require a particular level of success in achieving the gender characteristics of the opposite sex. Such an approach was considered in R v Harris49, in relation to a male to female transsexual. However, as Lockhart J observed in SRA50, a male to female transsexual after surgery is no longer a functional male, but a female to male transsexual is in a different situation. Even successful surgery cannot cause him to be a fully functional male. An approach to the requirements of s 15(1)(b)(ii) which has regard to the extent to which a person obtains gender characteristics of the gender to which they identify would therefore operate differentially and unfairly. Such an effect cannot be taken to have been intended in legislation such as this, which is of a remedial and beneficial kind. It is also relevant that a surgical procedure to alter the genitals or other gender characteristics is not required of an applicant for a recognition certificate. The definition of "reassignment procedure" refers to a "medical or surgical procedure". A medical procedure would include hormone therapy, such as that undertaken by the appellants. As the Tribunal observed51, although surgery is a requirement of legislation providing for recognition of gender reassignment in 47 The State of Western Australia v AH (2010) AMLC ΒΆ30-025 at 36,055 [93]. 48 The State of Western Australia v AH (2010) AMLC ΒΆ30-025 at 36,055 [94]. 49 (1988) 17 NSWLR 158. 50 Secretary, Department of Social Security v "SRA" (1993) 43 FCR 299 at 326. 51 AB & AH v Gender Reassignment Board (WA) (2009) 65 SR(WA) 1 at 17 [117]. Bell other States, and it is evident that Parliament was familiar with that legislation52, Parliament did not consider surgery to be a necessary step in order to acquire the gender characteristics by which a person is identified as male or female. The options thus provided by the Act do not lend support for a view that a person must take all possible steps, including with respect to their sexual organs, to become as male or female as possible. On one view the definition of "reassignment procedure" might suggest a concern with the result achieved by the surgical procedure. The words "so that the person will be identified as a person of the opposite sex" may be thought to connote a level of certainty of identification as male or female. However, s 14(1) and s 15(1)(b)(ii) may be read together in a more harmonious way, by attributing the purposive aspect of s 14(1) to the person53. Section 14(1) may be understood to require that the person undertakes a reassignment procedure with the intention that he or she may be identified by others as being of the gender to which he or she seeks reassignment. Furthermore, s 14(1) requires only that the medical or surgical procedure alter the genitals and other gender characteristics of a person. It does not require that the person undertake every procedure to remove every vestige of the gender which the person denies, including all sexual organs. Martin CJ accepted that it could not have been intended that a person have all of the physical characteristics of a person of the opposite gender and held that the test must be one of sufficiency54. However, that leaves unanswered the question β sufficient for what purpose? The answer would appear to be social recognition. The Act does not, by s 15(1)(b)(ii), contemplate some abstract evaluation of maleness or femaleness. Its objects suggest that the question for the Board is to be approached from a social perspective, which is to say, by reference to what other members of society would perceive the person's gender to be. Such a perspective is consistent with the objects of the Act, which are to remove impediments to the way in which a person lives within society. So long as the other requirements of ss 14(1) and 15(1)(a) and (b) are met it is intended that legal recognition be given of the gender with which the person is identified 52 Western Australia, Legislative Assembly, Parliamentary Debates (Hansard), 9 April 1997 at 1360-1361. 53 As Martin CJ observed in The State of Western Australia v AH (2010) AMLC 54 The State of Western Australia v AH (2010) AMLC ΒΆ30-025 at 36,056 [104]. Bell within society. Section 15(1)(b)(ii) is addressed to that perspective. The question it raises is what gender the person exhibits to other members of society, by reference to the gender characteristics they now have and to their lifestyle. That conclusion would be reached by reference to the person's appearance and behaviour, amongst other things. It does not require detailed knowledge of their bodily state. The question whether a person is identified as male or female, by reference to the person's physical characteristics, is intended by the Act to be largely one of social recognition. It is not intended to require an evaluation by the Board of how much of a person's body remains male or female. Rather, the Board is directed by s 15(1)(b)(ii) to the question of how other members of society would perceive the person, in their day-to-day lives. Such a recognition does not require knowledge of a person's remnant sexual organs. The concern of s 15(1)(b)(ii) may be taken to be whether a transsexual person's appearance and behaviour in the conduct of their life would be accepted by other members of society as conforming to the gender to which the person seeks reassignment. That is what is intended by the phrase "is identified as male or female" in the s 3 definition of "gender characteristics". Such an understanding of the operation of s 15(1)(b)(ii) is consistent with the objects of the Act, which are to facilitate the acceptance of a person, as being of the gender to which they are reassigned, within society so that they may fully participate within it. No point would be served, and the objects of the Act would not be met, by denying the recognition provided by the Act to a person who is identified within society as being of the gender to which they believe they belong and otherwise fulfils the requirements of the Act. The objects of the Act bring to mind what was said in SRA. Lockhart J there referred to what had been said many years ago by a Swiss court on the subject of post-operative transsexuals55. Having observed that such a person's psychological association with a sex is in such a situation supported by anatomical changes, the Court suggested that it is preferable to legally recognise a state which the law did not prevent from coming into existence. To do so, the Court said, facilitates the person's social adaptation by permitting the person to lead a more normal life than before. 55 Secretary, Department of Social Security v "SRA" (1993) 43 FCR 299 at 317. Bell The Act contains no warrant for implying further requirements, such as potential adverse social consequences, to which the Board had regard, or community standards and expectations, to which the majority in the Court of Appeal referred. Such considerations are quite different from the social perspective mentioned above56, which has regard to the assessment made of the person by members of society in everyday life. They involve matters of policy and value judgments according to which recognition should be given or refused. Considerations of policy and an understanding of the extent to which society is accepting of gender reassignment are matters which may be taken to have been considered when the Act was passed. The Act reflects the policy decisions taken. The objectives of the Act, and their social and legal consequences, are to be met by reference to its stated requirements. Those requirements, including those of s 15(1)(b)(ii), are to be given a fair and liberal interpretation in order that they achieve the Act's beneficial purposes. The construction placed upon s 15(1)(b)(ii) and the identification which is its concern, does not mean that a recognition certificate is to be provided based only upon a person's external appearance, and that person's belief about his or her gender. Section 14 must be satisfied before a person can apply for a certificate. But that is the only provision in the Act which requires a surgical or other reassignment procedure. Once that condition and those of s 15(1)(a) are met, the Board is directed by s 15(1)(b) to other enquiries relating to the person's perception of themselves and to social perceptions about them. No further consideration of the extent of the person's bodily state is required. No issue was taken on these appeals with the conclusion reached by the Board and the Tribunal as to the observable physical characteristics of each of the appellants. Counsel for the State of Western Australia accepted those findings to be correct. It follows that each of the appellants would be identified as having the gender characteristics of a male. In this Court the Board was joined as the second respondent to each appeal but entered a submitting appearance. The opposition to the appeals was presented by the first respondent, the State of Western Australia. The Australian Human Rights Commission was granted leave to intervene. 56 See [34] of these reasons. Bell As indicated earlier in these reasons57, each appeal should be allowed, the orders of the Court of Appeal set aside, and in place thereof the appeals from the Tribunal should be dismissed. This will have the effect of reinstating the orders of the Tribunal. The Court of Appeal made no costs order. The appellants seek and should have orders against the State for their costs in this Court. 57 See [13] of these reasons. |
HIGH COURT OF AUSTRALIA CARTER HOLT HARVEY WOODPRODUCTS AUSTRALIA PTY LTD APPELLANT AND THE COMMONWEALTH OF AUSTRALIA & ORS RESPONDENTS Carter Holt Harvey Woodproducts Australia Pty Ltd v The Commonwealth [2019] HCA 20 19 June 2019 ORDER Appeal dismissed with costs. On appeal from the Supreme Court of Victoria Representation D J Williams QC for the appellant (instructed by Polczynski Robinson) J P Moore QC with J A G McComish for the first respondent (instructed by King & Wood Mallesons) No appearance for the second respondents Submitting appearance for the third respondent Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Carter Holt Harvey Woodproducts Australia Pty Ltd v The Commonwealth Corporations β External administration β Receivers and other controllers of property β Priority debts β Where corporation carrying on business solely as trustee created circulating security interest over trust assets in favour of bank β Where receivers and managers appointed by bank realised trust assets and satisfied obligations to bank β Whether surplus proceeds required to be paid in accordance with Corporations Act 2001 (Cth), s 433 β Whether corporation's right of indemnity is property of the company "comprised in or subject to a circulating security interest" within meaning of s 433 β Whether trust assets themselves are such "property of the company" β Whether statutory order of priorities for payment of debts applicable to distribution of surplus proceeds from trust assets among trust creditors β Whether proceeds from exercise of insolvent corporate trustee's right of exoneration to be applied only in satisfaction of trust liabilities to which it relates. Trusts β Trustees β Right of indemnity β Whether trustee's right of indemnity confers beneficial interest in trust assets β Whether such interest is "property" within meaning of Corporations Act, s 9. Words and phrases β "beneficial interest", "circulating asset", "circulating security interest", "floating charge", "insolvent corporate trustee", "payment of creditors out of property", "power of exoneration", "PPSA security interest", "priority payments", "property", "property comprised in or subject to a circulating security interest", "property held by the bankrupt on trust", "property of the company", "right of exoneration", "right of indemnity", "taking possession or assuming control of property", "trust asset", "trust liabilities". Corporations Act 2001 (Cth), ss 9, 51, 51C, 433, 555, 556, 560. Personal Property Securities Act 2009 (Cth), ss 10, 12, 340. KIEFEL CJ, KEANE AND EDELMAN JJ. Introduction In 1988, the Australian Law Reform Commission observed that although the trading trust had been used extensively for more than a decade, "the companies legislation makes little or no provision for corporate trustees which become insolvent"1. That observation remains true today2. The issue that arises on this appeal, which was foreseen nearly four decades ago3, essentially concerns whether creditors who would be priority creditors of an insolvent company are priority creditors when that company trades as the trustee of a trading trust. The context in which the question arises is one where, for more than a century, employees have had priority in the distribution of property by liquidators over the holders of a floating charge4 or, as it is now described, a circulating security interest5. The issue on this appeal is whether the relevant provision in relation to receivers in s 433 of the Corporations Act 2001 (Cth), duplicating those in relation to liquidators6, gives the same priority to employees of a trading trust over other creditors of a trading trust. In other words, do employees of a company that is in receivership or insolvency have no statutory priority if that company happens to have been trading as the trustee of a trading trust and holding its assets on trust? 1 Australia, Law Reform Commission, General Insolvency Inquiry, Report No 45 2 D'Angelo, "The trust as a surrogate company: The challenge of insolvency" (2014) 8 Journal of Equity 299 at 314. 3 Re Byrne Australia Pty Ltd and the Companies Act [1981] 1 NSWLR 394 at 399. See also Meagher, "Insolvency of Trustees" (1979) 53 Australian Law Journal 648 4 Preferential Payments in Bankruptcy Amendment Act 1897 (UK) (60 & 61 Vict c 19), s 2. See, in Victoria, Companies Act 1910 (Vic), s 208(3)(b). 5 This change in terminology was introduced by the Personal Property Securities (Corporations and Other Amendments) Act 2010 (Cth), Sch 1, item 87. 6 Corporations Act 2001 (Cth), ss 556 and 561. Edelman The primary judge (Robson J) effectively answered this question "yes", essentially on the basis that assets held on trust are not the property of the company. The Court of Appeal of the Supreme Court of Victoria (Ferguson CJ, Whelan, Kyrou, McLeish and Dodds-Streeton JJA) effectively answered this question "no", with reliance upon the right of indemnity that a trustee company has to use trust assets for its own benefit and exonerate itself from its liability to trust creditors. For the reasons that follow, the answer given by the Court of Appeal was correct and the appeal must be dismissed. Background Amerind Pty Ltd ("Amerind") carried on a business as the trustee for a trading trust, the Panel Veneer Processes Trading Trust. It traded solely as trustee of that trust. It had various debt facilities with the Bendigo and Adelaide Bank ("the Bank") which were secured by a range of securities. One of those was a debtor finance facility by which the Bank was entitled to purchase Amerind's book debts. the same day, On 11 March 2014, Amerind's sole director appointed administrators ("the Administrators") to Amerind pursuant to s 436A of the Corporations Act. then appointed receivers and managers ("the Receivers") to Amerind. The Bank, which had earlier demanded payment from Amerind, exercised rights under its debtor finance facility and gave written notice to Amerind's debtors, thereby perfecting a legal assignment of their debts from Amerind to the Bank. the Bank The Receivers were appointed to a business with assets that included cash at bank, stock, plant and equipment, and reserve amounts contingently owed to Amerind under the Bank's debtor finance facility. For about a month after their appointment the Receivers continued to trade on a "business as usual" basis whilst seeking a purchaser for the business. On 14 April 2014, the Receivers began a wind down phase in which they realised the vast majority of the stock, including stock which was the subject of a security interest of the Bank. On 13 August 2014, at the second meeting of Amerind's creditors, the creditors resolved that Amerind be wound up in insolvency. The Administrators were appointed as joint and several liquidators of Amerind. By this time, the Receivers had realised most of Amerind's assets and were in a position to retire. Additionally, all of the Bank's secured debt had been discharged and that discharge was not, and is not, contested. The Bank's discharge was by means that included payment of almost $21 million from the debts that had been assigned to it under its security. The Receivers had a receivership surplus of $1,619,018. However, before they could retire, the Receivers were confronted Edelman with competing claims in relation to that surplus. Two of the competing claims to the receivership surplus that were in issue at trial are the subject of this appeal. in relation One claim the receivership surplus was by the first respondent to this appeal, the Commonwealth of Australia. Under a statutory scheme known as the Fair Entitlements Guarantee Scheme, the Commonwealth had paid $3.8 million in accrued wages and entitlements to former employees of Amerind. By s 560 of the Corporations Act, the Commonwealth had the same priority entitlement as those employees who were entitled to payment as a priority under ss 433 and 556 of the Corporations Act. The competing claim to the surplus was by the appellant, Carter Holt Harvey Woodproducts Australia Pty Ltd ("Carter Holt"), a creditor of Amerind, which submitted that s 433 of the Corporations Act did not afford priority to the Commonwealth. The second respondents to this appeal are the Receivers. Since the receivership surplus has already been diminished by the costs of the Receivers' ongoing appointment including the costs of this litigation, and because the Receivers had already had substantial input into the orders of the primary judge (supported by Carter Holt) and the Court of Appeal (supported by the Commonwealth), the Receivers did not seek to make any submissions in this Court on the merits of the competing claims. Section 433 of the Corporations Act The provision with which this appeal is centrally concerned is s 433 of the Corporations Act. That section is the modern iteration of a provision that has existed in various forms in insolvency legislation since at least 18977. Its first iteration arose after the development in the 1870s of a new form of security, the floating charge8. As Lord Millett observed of that history9: 7 See Preferential Payments in Bankruptcy Amendment Act 1897 (UK) (60 & 61 Vict c 19), s 3; Companies Act 1910 (Vic), s 114; Companies Act 1961 (Vic), In re Panama, New Zealand, and Australian Royal Mail Co (1870) LR 5 Ch App 318 at 322 (generally regarded as the first case in which a floating charge was recognised); In re Florence Land and Public Works Co; Ex parte Moor (1878) 10 Ch D 530 at 543, 546, 550; In re Hamilton's Windsor Ironworks; Ex parte Pitman and Edwards (1879) 12 Ch D 707 at 713-714; In re Colonial Trusts Corporation; Ex parte Bradshaw (1879) 15 Ch D 465 at 472. See Agnew v Commissioner of Inland Revenue [2001] 2 AC 710 at 717-718 [5]-[8]. Edelman "Valuable as the new form of security was, it was not without its critics. One of its consequences was that it enabled the holder of the charge to withdraw all or most of the assets of an insolvent company from the scope of a liquidation and leave the liquidator with little more than an empty shell and unable to pay preferential creditors. Provision for the preferential payment of certain classes of debts had been introduced in bankruptcy in 1825 and was extended to the winding up of companies by section 1(1)(g) of the Preferential Payments in Bankruptcy Act 1888. Section 107 of the Preferential Payments in Bankruptcy Amendment Act 1897 now made the preferential debts payable out of the proceeds of a floating charge in priority to the debt secured by the charge." With one exception, s 433 has been expressed in essentially the same form since 198210. The exception is a change in terminology in 201211. Prior to 2012, s 433 of the Corporations Act had the effect that a receiver who was appointed on behalf of the holders of any debentures of a company that were secured by a floating charge was required to pay "out of the property coming into his, her or its hands" certain debts, including employee claims, in priority to any claim for principal or interest in respect of the debentures. The section, with its century-old antecedents, prevented "[t]he debenture holder, by virtue of his (crystallised) floating charge, scoop[ing] the pool"12. The change in 2012 was the consequence of the replacement by the Personal Property Securities Act 2009 (Cth) of the concept of a floating charge with the concept of a circulating security interest. The change of language was not intended to affect existing rights under the Corporations Act, including the priority given to employees over unsecured creditors13. Other than preserving 9 Agnew v Commissioner of Inland Revenue [2001] 2 AC 710 at 718 [9]. 10 See Companies Code, s 331; Corporations Law, s 433. 11 The amendments introduced by the Personal Property Securities (Corporations and Other Amendments) Act 2010 (Cth), Sch 1, item 87 commenced operation on 30 January 2012. 12 Buchler v Talbot [2004] 2 AC 298 at 305 [11]. 13 Australia, House of Representatives, Personal Property Securities (Corporations and Other Amendments) Bill 2010, Explanatory Memorandum at 3 [1.2], 19 [8.1], [8.4]; Australia, House of Representatives, Parliamentary Debates (Hansard), 10 March 2010 at 2100; Australia, House of Representatives, Parliamentary Debates (Hansard), 13 May 2010 at 3632. Edelman those floating charges that existed before 2012, a "circulating security interest" is defined in s 51C(a) of the Corporations Act as also including "a PPSA security interest, if: (i) the security interest has attached to a circulating asset within the meaning of the Personal Property Securities Act 2009; and (ii) the grantor (within the meaning of that Act) has title to the asset". A "circulating asset" is defined in s 340 of the Personal Property Securities Act in terms similar to the old floating charge, including where, by s 340(1)(b), the "secured party has given the grantor express or implied authority for any transfer of the personal property to be made, in the ordinary course of the grantor's business, free of the security interest". The change in terminology in s 433 of the Corporations Act from "floating charge" the to "circulating Corporations Act and the Personal Property Securities Act14. thus aligned interest" security Section 433(2)(a) of the Corporations Act provides for two alternative preconditions to the operation of the priority regime in s 433(3). Those two alternative preconditions are: "[(1)] a receiver is appointed on behalf of the holders of any debentures of a company or registered body that are secured by a circulating security interest, or [(2)] possession is taken or control is assumed, by or on behalf of the holders of any debentures of a company or registered body, of any property comprised in or subject to a circulating security interest". Other preconditions in s 433(2) are not in dispute on this appeal, with the result that if either of the two preconditions set out above is met then s 433(3) applies. Section 433(3) provides: "In the case of a company, the receiver or other person taking possession or assuming control of property of the company must pay, out of the property coming into his, her or its hands, the following debts or amounts in priority to any claim for principal or interest in respect of the debentures: first, any amount that in a winding up is payable in priority to unsecured debts pursuant to section 562; next, if an auditor of the company had applied to ASIC under subsection 329(6) for consent to his, her or its resignation as 14 Australia, House of Representatives, Personal Property Securities (Corporations and Other Amendments) Bill 2010, Explanatory Memorandum at 6 [4.3], 7 [4.8]. Edelman auditor and ASIC had refused that consent before the relevant date β the reasonable fees and expenses of the auditor incurred during the period beginning on the day of the refusal and ending on the relevant date; subject to subsections (6) and (7), next, any debt or amount that in a winding up is payable in priority to other unsecured debts pursuant to paragraph 556(1)(e), (g) or (h) or section 560." Sections 556(1)(e), (g) or (h) and 560 of the Corporations Act are the provisions that give priority to certain claims, including claims by employees and by those, here the Commonwealth, who advance funds on behalf of the employer to meet them. The proceedings before the primary judge and the Court of Appeal The Receivers applied to the primary judge for directions on a number of questions, and the parties formulated an agreed list of issues15. It is not necessary to set out all of those issues and the answers provided to the questions. It suffices for this appeal to describe a number of relevant conclusions reached by his Honour in the course of answering those questions. First, the receivership surplus is trust property16. Secondly, the Bank, and therefore the Receivers, held debentures over the assets of Amerind and those debentures were secured by a circulating security interest17. Thirdly, the assets of Amerind included four classes of circulating assets that Carter Holt had alleged were not circulating18: cash at bank, purchase price paid by the Bank to Amerind under two debtor finance facilities to purchase certain accounts, realisation of stock other tax refunds and sundry receipts. Fourthly, the trustee's right to be indemnified from the trust assets is not a circulating asset within s 340 of the Personal Property Securities Act nor is it a floating charge, and the Corporations Act19. Fifthly, in principle the priority regime in s 433(3) of the it does not fall within s 51C of through credit sales, and therefore than 15 See Re Amerind Pty Ltd; The Commonwealth v Byrnes and Hewitt (2018) 54 VR 16 Re Amerind Pty Ltd (In liq) (2017) 320 FLR 118 at 129 [49]. 17 Re Amerind Pty Ltd (In liq) (2017) 320 FLR 118 at 138 [68]. 18 Re Amerind Pty Ltd (In liq) (2017) 320 FLR 118 at 200 [442], 201 [455], [459], 19 Re Amerind Pty Ltd (In liq) (2017) 320 FLR 118 at 192 [389]. Edelman Corporations Act applies to the proceeds of the various assets comprising the receivership surplus20. However, sixthly, ss 433 and 556 of the Corporations Act apply only to the property of the company and do not apply to trust assets or to the trustee's right of indemnity since neither of those is the property of the company21. It is this final point which sits at the heart of this appeal. There were broadly two groups of issues before the Court of Appeal22. One group of issues concerned whether relevant assets fell within the ambit of property which is secured by a "circulating security interest". Carter Holt alleged that Amerind's right of indemnity from the trust assets was the only asset that could be the property of Amerind but that it was not subject to a circulating security interest and therefore the preconditions in s 433(2) were not met. The Court of Appeal rejected this submission, concluding that it was not necessary for the right of indemnity to be the subject of a circulating security interest23, but that even if it were necessary to characterise the right of indemnity as circulating or non-circulating then the character of the trust assets as "circulating" was one that "flowed through to the right of indemnity"24. The Court of Appeal also dismissed a notice of contention by Carter Holt, which had disputed the characterisation by the primary judge of three classes of assets as circulating assets25. There is no appeal from that conclusion, which has the effect that the debentures under which the Receivers were appointed were secured by a "circulating security interest", over trust property which included those three classes, within the meaning of s 51C of the Corporations Act26. 20 Re Amerind Pty Ltd (In liq) (2017) 320 FLR 118 at 139 [76], 194 [401]. 21 Re Amerind Pty Ltd (In liq) (2017) 320 FLR 118 at 129-130 [53], 141-142 [94]. 22 Re Amerind Pty Ltd; The Commonwealth v Byrnes and Hewitt (2018) 54 VR 230 at 23 Re Amerind Pty Ltd; The Commonwealth v Byrnes and Hewitt (2018) 54 VR 230 at 24 Re Amerind Pty Ltd; The Commonwealth v Byrnes and Hewitt (2018) 54 VR 230 at 25 Re Amerind Pty Ltd; The Commonwealth v Byrnes and Hewitt (2018) 54 VR 230 at 26 Re Amerind Pty Ltd; The Commonwealth v Byrnes and Hewitt (2018) 54 VR 230 at Edelman Although the "circulating assets" that were subject to the circulating security interest were trust property, Amerind had, by a "General Security Deed", dated 19 December 2012, which defined "personal property", "security interest", and "collateral" broadly, granted a security interest in favour of the Bank over all property of any kind whether Amerind was "the beneficial owner" or held the property "as trustee of a trust". The other group of issues concerned whether the receivership surplus was trust property and, if so, whether s 433 of the Corporations Act applied to it with the effect that rights held by Amerind on trust were subject to the priority regime in ss 433(3), 556, and 560. Included within this group of issues was the question whether the trustee's "right of indemnity", to exonerate itself from trust liabilities, is property of the company. The Court of Appeal held that the receivership surplus fell within s 433 of the Corporations Act and that the effect of this was that the surplus was subject to the priority regime in ss 433(3), 556, and 56027. The issues before this Court Before this Court, Carter Holt's grounds of appeal were broadly twofold. First, it was said that s 433 of the Corporations Act did not apply because, contrary to the reasoning of the Court of Appeal, Amerind's right of indemnity was not "property comprised in or subject to a circulating security interest" within s 433(2)(a). This ground of appeal was effectively concerned with the preconditions to the operation of s 433. Secondly, it was asserted that the Court of Appeal erred by concluding that the funds held by the Receivers were proceeds of Amerind's exercise of its right of indemnity and therefore available for distribution within s 433 of the Corporations Act. This ground of appeal effectively asserted that the funds obtained from the sale of trust assets were trust property which was not subject to the Receivers' duty to pay, "out of the property coming into his, her or its hands", creditors of Amerind in accordance with s 433(3) of the Corporations Act. Each of the Commonwealth's submissions in response focused upon a trustee company's right of indemnity. In particular, the Commonwealth relied upon the power of the trustee to use trust assets to exonerate itself from debts properly incurred in the course of trust business. The Commonwealth's primary submission was that this power of exoneration entitled the Receivers to sell trust assets to obtain a fund to be used to discharge all of the company's debts, whether trust business. or not incurred with authority the course of 27 Re Amerind Pty Ltd; The Commonwealth v Byrnes and Hewitt (2018) 54 VR 230 at Edelman The Commonwealth's alternative submission was that the power of exoneration entitled the Receivers only to discharge debts that were incurred with authority in the course of trust business. Since all of the debts of Amerind were authorised debts incurred in the course of the trust business28 the appeal must be dismissed if either of these submissions is accepted. An appreciation of fundamental principles of trust law is necessary to understand the operation of s 433 of the Corporations Act, since that provision and its antecedents were enacted against the background of, and assumed the operation of, these fundamental principles. The resolution of this appeal depends upon the application of particular principles concerning (i) the benefit in insolvency of rights held on trust, and (ii) the nature of the trustee's "right of indemnity", in particular its power of exoneration, in insolvency. Application of these principles determines the ultimate question of whether a payment to trust creditors using the trustee's power of exoneration is a payment "out of the property coming into [the receiver's] hands" within s 433(3). The benefit in insolvency of rights held on trust Although the Commonwealth's written submissions focused upon scenarios involving permutations of solvency and insolvency of a trustee and a trust, the trust is not a separate entity and therefore does not have a separate solvency status from the trustee. A trustee is personally liable for debts incurred as trustee29. This is so whether or not the trustee contracted with creditors as a named trustee, and hence whether or not the creditors knew of the existence of the trust30. Similarly, the expressions "trust assets" and "trust creditors" are simply shorthand for, respectively, the rights held on trust by the trustee and those creditors of the trustee whose debts were properly incurred with authority in the course of trust business. Although a trustee is personally liable to creditors, it has been established for centuries in bankruptcy law that rights held by a bankrupt on trust do not generally form part of the bankrupt's estate that is available for general 28 Re Amerind Pty Ltd; The Commonwealth v Byrnes and Hewitt (2018) 54 VR 230 at 29 Octavo Investments Pty Ltd v Knight (1979) 144 CLR 360 at 367; [1979] HCA 61. See also Vacuum Oil Co Pty Ltd v Wiltshire (1945) 72 CLR 319 at 324; [1945] HCA 37. 30 Meagher, "Insolvency of Trustees" (1979) 53 Australian Law Journal 648 at 652. See also Watling v Lewis [1911] 1 Ch 414 at 423. Edelman distribution amongst creditors31. In this respect, the common law courts took notice of a trust32. Despite Australian bankruptcy legislation having adopted a broad definition of "property"33, it also expressly adopted this principle by excluding from the property divisible among creditors all property held by the bankrupt on trust for another person34. The Corporations Act contains a similarly broad definition of "property"35 to the bankruptcy legislation but it does not contain an equivalent express exclusion of property held by a company on trust for another person. However, the same "elementary, and fundamental"36 principle that generally precludes distribution of trust property from distribution among creditors has been consistently applied in Australia to trustee companies37. It has been said that, as a general proposition, it would be "extraordinary, in the context of insolvency law, if 'property of the company' included property of which it was a trustee and in which it had no beneficial interest"38. Hence, as the Court of Appeal correctly observed, the exclusion of property held on trust from the 31 Scott v Surman (1742) Willes 400 at 402 [125 ER 1235 at 1236]; Winch v Keeley (1787) 1 Term Rep 619 at 623 [99 ER 1284 at 1286]; Boddington v Castelli (1853) 1 El & Bl 879 at 885 [118 ER 665 at 667]. 32 Winch v Keeley (1787) 1 Term Rep 619 at 623 [99 ER 1284 at 1286]. See also Gladstone v Hadwen (1813) 1 M & S 517 at 526 [105 ER 193 at 197]; Britten v Perrott (1834) 2 C & M 597 at 602 [149 ER 898 at 901]. 33 Bankruptcy Act 1924 (Cth), s 4; Bankruptcy Act 1966 (Cth), s 5(1). 34 Bankruptcy Act 1924 (Cth), s 91(a); Bankruptcy Act 1966 (Cth), s 116(2)(a). 35 Corporations Act 2001 (Cth), s 9. 36 Angove's Pty Ltd v Bailey [2016] 1 WLR 3179 at 3190 [25]; [2017] 1 All ER 773 37 Re Sutherland; French Caledonia Travel Service Pty Ltd (In liq) (2003) 59 NSWLR 361 at 425 [206]; Re Stansfield DIY Wealth Pty Ltd (In liq) (2014) 291 FLR 17 at 22-23 [16]; Jones v Matrix Partners Pty Ltd; Re Killarnee Civil & Concrete Contractors Pty Ltd (In liq) (2018) 260 FCR 310 at 329 [69], 333 [89], 354-355 [211]. See also Octavo Investments Pty Ltd v Knight (1979) 144 CLR 360 38 Re Stansfield DIY Wealth Pty Ltd (In liq) (2014) 291 FLR 17 at 22 [16]. Edelman property of a trustee, while express in bankruptcy, applies "by undisputed analogy in the case of corporations"39. The reason that rights held on trust by an insolvent company or bankrupt individual are generally excluded from division amongst the creditors of the company or of the bankrupt individual is that a liquidator's power over the rights of an insolvent company and the statutory assignment of rights in bankruptcy have always been concerned only with those rights that enure in law "for the benefit of" the "personal estate" of the bankrupt or insolvent person40, even if in some cases that legal benefit might not be a "practical benefit"41. By contrast, other than as permitted by rules of law or the terms of the trust, the trustee owes a "personal obligation to deal with the trust property for the benefit of the beneficiaries, and this obligation must be annexed to the trust property"42. The trustee does not generally have any entitlement to deal with the rights held on trust for the trustee's own benefit. Courts of law took notice of the trust because "it would be absurd" for rights to have vested in bankruptcy "for no other purpose but in order that there may be a bill in equity brought against [the trustee in bankruptcy]"43. Hence, rights held on trust were, and are, generally excluded from inclusion in the statutory concepts of the "property" of the bankrupt or the "property" of the insolvent company. However, the general principle that excludes those rights held on trust from division among creditors does not apply to the extent to which a trustee is 39 Re Amerind Pty Ltd; The Commonwealth v Byrnes and Hewitt (2018) 54 VR 230 40 An Act for the better relief of the creditors against such as shall become bankrupts 1604 (1 Jac 1 c 15), s 8. See Beckham v Drake (1849) 2 HLC 579 at 627 [9 ER 1213 at 1231]; Rose v Buckett [1901] 2 KB 449 at 454. 41 Davies v The English, Scottish & Australian Bank Ltd (1934) 7 ABC 210 at 214; Fuller v Beach Petroleum NL (1993) 43 FCR 60 at 68, 74-75. 42 DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties [1980] 1 NSWLR 510 at 518-519, citing Meagher and Gummow, Jacobs' Law of Trusts in New South Wales, 3rd ed (1971) at 109. See also Maitland, Equity: also The Forms of Action at Common Law (1909) at 17-18; Maitland, Equity: A Course of Lectures, 2nd ed (rev) (1936) at 17. 43 Gladstone v Hadwen (1813) 1 M & S 517 at 526 [105 ER 193 at 197]. Edelman permitted to benefit personally by "deriv[ing] any benefit"44 from the rights held on trust. One means by which a trustee can benefit personally from the trust rights is the trustee's power to use those trust rights to indemnify itself from liabilities. The existence of that "right of indemnity" means that, to the extent of the power, the trust rights are "no longer property held solely in the interests of the beneficiaries of the trust"45. The nature of the power of exoneration in insolvency The trustee's right of indemnity Whether sourced in statute46, or as an express term or equitable implication47 in the trust instrument, the trustee has two rights to obtain indemnity48. In Chief Commissioner of Stamp Duties (NSW) v Buckle49, 44 Carpenter v Marnell (1802) 3 Bos & Pul 40 at 41 [127 ER 23 at 24]. See also Carvalho v Burn (1833) 4 B & Ad 382 at 393 [110 ER 499 at 503]. 45 Octavo Investments Pty Ltd v Knight (1979) 144 CLR 360 at 370; Chief Commissioner of Stamp Duties (NSW) v Buckle (1998) 192 CLR 226 at 246 [50]; [1998] HCA 4. Compare Meagher, "Insolvency of Trustees" (1979) 53 Australian Law Journal 648 at 650; Heydon and Leeming, Jacobs' Law of Trusts in Australia, 8th ed (2016) at 523 [21-15]. 46 Trustee Act 1925 (NSW), s 59(4); Trustee Act 1958 (Vic), s 36(2); Trustee Act 1936 (SA), s 35(2); Trusts Act 1973 (Qld), s 72; Trustees Act 1962 (WA), s 71; Trustee Act 1898 (Tas), s 27(2); Trustee Act 1893 (NT), s 26; Trustee Act 1925 (ACT), s 59(4). 47 Worrall v Harford (1802) 8 Ves Jun 4 at 8 [32 ER 250 at 252]; Savage v Union Bank of Australia Ltd (1906) 3 CLR 1170 at 1187-1188; [1906] HCA 37; In re Suco Gold Pty Ltd (In liq) (1983) 33 SASR 99 at 104; Chief Commissioner of Stamp Duties (NSW) v Buckle (1998) 192 CLR 226 at 245 [47]; Jones v Matrix Partners Pty Ltd; Re Killarnee Civil & Concrete Contractors Pty Ltd (In liq) (2018) 260 FCR 310 at 321 [38]-[39]. 48 See In re Blundell; Blundell v Blundell (1888) 40 Ch D 370 at 376-377; Chief Commissioner of Stamp Duties (NSW) v Buckle (1998) 192 CLR 226 at 245 [47]; Bruton Holdings Pty Ltd (In liq) v Federal Commissioner of Taxation (2009) 239 CLR 346 at 358-359 [43]; [2009] HCA 32. 49 (1998) 192 CLR 226 at 245 [47]. Edelman this Court approved the following passage from Scott on Trusts50, which described the general characteristics of the two rights of indemnity: "Where the trustee acting within his powers makes a contract with a third person in the course of the administration of the trust, although the trustee is ordinarily personally liable to the third person on the contract, he is entitled to indemnity out of the trust estate. If he has discharged the liability out of his individual property, he is entitled to reimbursement; if he has not discharged it, he is entitled to apply the trust property in discharging it, that is, he is entitled to exoneration." Although both of these rights of indemnity might strictly be described as powers of indemnity, their description as "rights" emphasises that they do not exist independently of the rights that the trustee holds on trust. The powers of indemnity are concerned with a means by which trust rights can be used. They are thus part and parcel of the trust "rights" in a broad sense. For instance, a trustee's rights concerning "cash at bank" include both the right to be paid money on request and the power to direct that those funds be used to discharge debts owed to trust creditors. The trustee's power to be reimbursed from the trust fund for the entirety of a payment that has been made by the trustee personally, sometimes also described as "recoupment"51, is not in issue in this appeal. This appeal is concerned with the trustee's power of exoneration, which is a power to use trust funds to discharge debts that were properly incurred by the trustee in the course of trust business. By the exercise of the power of exoneration, equity ensures that the trustee "need not pay and perhaps ruin himself before seeking relief"52. However, the value of the power of exoneration, like the value of the power of reimbursement, may decrease by "netting-off reciprocal monetary obligations"53 to the extent to which the trustee has incurred a duty to increase the 50 Scott and Fratcher, The Law of Trusts, 4th ed (1988), vol 3A at 345 Β§246. 51 Levy v Kum Chah (1936) 56 CLR 159 at 173; [1936] HCA 60; Vacuum Oil Co Pty Ltd v Wiltshire (1945) 72 CLR 319 at 336-337. See also Re Enhill Pty Ltd [1983] 1 VR 561 at 569. Compare the use of "contribution" generally to describe partial recovery: Mitchell, The Law of Contribution and Reimbursement (2003) at 52 Savage v Union Bank of Australia Ltd (1906) 3 CLR 1170 at 1197. 53 In re Kaupthing Singer & Friedlander Ltd [No 2] [2012] 1 AC 804 at 813 [8]. Edelman trust funds or, more loosely, a "liability which the trustee owes to the trust estate"54. The power of exoneration, like that of reimbursement, has been described as conferring upon the trustee "a proprietary interest"55 in the trust assets. These labels, "trust assets" and the trustee's "proprietary interest", describe the combination and effect of the legal and equitable rights which the trustee holds on trust. Hence, where a trustee has legal title, as well as equitable or statutory powers of indemnity that are concerned with ways in which the legal title can be used, the legal title is not independent of those powers of indemnity. The legal title held by the trustee has thus been described as subject to an equitable charge or lien in favour of the trustee to secure the powers of indemnity56. As this Court explained in Chief Commissioner of Stamp Duties (NSW) v Buckle57, the "trust assets" are subject to competing "proprietary rights, in order of priority, of the trustee and the beneficiaries". The trustee's rights take priority over those of the beneficiaries to the extent of the trustee's powers of indemnity. Where the "trust assets" need to be sold to reimburse or exonerate the trustee, the beneficiaries' rights have lower priority than the trustee's rights. A court may authorise the sale of assets held by the trustee so as to satisfy the power of indemnity, as a step in the process of the trustee exonerating itself from authorised liabilities, in the same manner as any other equitable charge58. 54 Lane v Deputy Commissioner of Taxation (2017) 253 FCR 46 at 68 [54], citing Cherry v Boultbee (1839) 4 My & Cr 442 [41 ER 171]. See also Jennings v Mather [1902] 1 KB 1 at 5. 55 Octavo Investments Pty Ltd v Knight (1979) 144 CLR 360 at 370; Chief Commissioner of Stamp Duties (NSW) v Buckle (1998) 192 CLR 226 at 246 [49]; Bruton Holdings Pty Ltd (In liq) v Federal Commissioner of Taxation (2009) 239 CLR 346 at 359 [43]. 56 Jennings v Mather [1901] 1 QB 108 at 113-114; Jennings v Mather [1902] 1 KB 1 at 6; Octavo Investments Pty Ltd v Knight (1979) 144 CLR 360 at 367; Chief Commissioner of Stamp Duties (NSW) v Buckle (1998) 192 CLR 226 at 247 [50]; Bruton Holdings Pty Ltd (In liq) v Federal Commissioner of Taxation (2009) 239 CLR 346 at 358-359 [43]. 57 (1998) 192 CLR 226 at 247 [50]. See also Vacuum Oil Co Pty Ltd v Wiltshire (1945) 72 CLR 319 at 335; Octavo Investments Pty Ltd v Knight (1979) 144 CLR 58 Chief Commissioner of Stamp Duties (NSW) v Buckle (1998) 192 CLR 226 at 247 [50]. See Hewett v Court (1983) 149 CLR 639 at 663; [1983] HCA 7. Edelman This well-established59 priority that the trustee's rights have over the equitable rights of the beneficiaries was justified in In re Johnson; Shearman v Robinson60 by Jessel MR on the basis that: "it would not be right that the cestui que trust should get the benefit of the trade without paying the liabilities; therefore the Court says to him, You shall not set up a trustee who may be a man of straw, and make him a bankrupt to avoid the responsibility of the assets for carrying on the trade". The operation of the right of exoneration in insolvency Trust creditors take the insolvent trustee's power of exoneration as they find it. They can enforce the power of exoneration by subrogation to the trustee's rights61 but the creditor "can be no better off than the trustee"62. A trustee in bankruptcy or liquidator is constrained in the same way. It is "established beyond all question"63 that the rights of a trustee in relation to trust assets, to the extent of the associated powers of indemnity, pass to her or his trustee in 59 Vacuum Oil Co Pty Ltd v Wiltshire (1945) 72 CLR 319 at 335; Chief Commissioner of Stamp Duties (NSW) v Buckle (1998) 192 CLR 226 at 247 [51], quoting Chief Commissioner of Stamp Duties v Buckle (1995) 38 NSWLR 574 at 586. 60 (1880) 15 Ch D 548 at 552, quoted in Jennings v Mather [1901] 1 QB 108 at 115. See also In re Beddoe; Downes v Cottam [1893] 1 Ch 547 at 558, quoted in Chief Commissioner of Stamp Duties (NSW) v Buckle (1998) 192 CLR 226 at 61 Vacuum Oil Co Pty Ltd v Wiltshire (1945) 72 CLR 319 at 335; Octavo Investments Pty Ltd v Knight (1979) 144 CLR 360 at 367, 370. 62 Heydon and Leeming, Jacobs' Law of Trusts in Australia, 8th ed (2016) at 520 [21-12]; In re Johnson; Shearman v Robinson (1880) 15 Ch D 548 at 552, 555; In re Frith; Newton v Rolfe [1902] 1 Ch 342 at 345-346; In re British Power Traction and Lighting Co Ltd; Halifax Joint Stock Banking Co Ltd v British Power Traction and Lighting Co Ltd [1910] 2 Ch 470 at 475-476; Corozo Pty Ltd v Total Australia Ltd [1987] 2 Qd R 11 at 19-20; Re Enhill Pty Ltd [1983] 1 VR 561 at 63 Savage v Union Bank of Australia Ltd (1906) 3 CLR 1170 at 1196. Edelman bankruptcy64. The same is true when control over those rights, rather than title, passes to a liquidator. And just as a trustee's ability to exercise its power of exoneration for personal benefit is limited to the terms of the power of exoneration, so too is the trustee in bankruptcy or liquidator limited by the terms of the power of exoneration in the exercise of control over the trust rights65. An analogy can be drawn with the power of a purchaser of land to obtain specific performance. Just as a purchaser's proprietary rights to, and ability to benefit from, land under a contract of sale of land are commensurate with the purchaser's power to obtain specific performance of the contract of sale66, so too a trustee's proprietary rights to, and ability by its power of exoneration to benefit from, trust assets are commensurate with the trustee's power to use those assets to discharge the trustee's personal liability for liabilities properly incurred as trustee. As Allsop CJ pointed out in Jones v Matrix Partners Pty Ltd; Re Killarnee Civil & Concrete Contractors Pty Ltd (In liq)67, the "nature and character" of the power of exoneration, namely that it is exercisable only to pay trust creditors, is not altered in the hands of a liquidator or trustee in bankruptcy. If a liquidator or trustee in bankruptcy were able to assert control over property of "the bankrupt's because it came to his hands and at the same time [were able] to reject the terms and conditions on which alone the bankrupt procured it ... [the consequence would be] manifestly unjust and contrary to principle"68. In Vagrand Pty Ltd (In liq) v Fielding69, the Full Court of the Federal Court of Australia put the point this way: 64 Jennings v Mather [1901] 1 QB 108 at 117; Jennings v Mather [1902] 1 KB 1 at 5-6, 9; Savage v Union Bank of Australia Ltd (1906) 3 CLR 1170 at 1188, 1196; Octavo Investments Pty Ltd v Knight (1979) 144 CLR 360 at 371. 65 Savage v Union Bank of Australia Ltd (1906) 3 CLR 1170 at 1188, 1197. 66 Redman v Permanent Trustee Co of New South Wales Ltd (1916) 22 CLR 84 at 96; [1916] HCA 47; Brown v Heffer (1967) 116 CLR 344 at 349; [1967] HCA 40; Legione v Hateley (1983) 152 CLR 406 at 456-457; [1983] HCA 11; Bahr v Nicolay [No 2] (1988) 164 CLR 604 at 612, 628, 646; [1988] HCA 16; Stern v McArthur (1988) 165 CLR 489 at 511, 522, 537; [1988] HCA 51; Tanwar Enterprises Pty Ltd v Cauchi (2003) 217 CLR 315 at 333 [53]; [2003] HCA 57. 67 (2018) 260 FCR 310 at 315 [4], 331-332 [79]-[82], 338 [107]. See also at 351-352 [197]; Re Byrne Australia Pty Ltd and the Companies Act [1981] 1 NSWLR 394 68 In re Rogers; Ex parte Holland & Hannen (1891) 8 Morr 243 at 248. Edelman "If an asset is held by the company in trust for somebody else, the liquidator is bound by the trust ... [T]he assets come to the liquidator with their history and inherent characteristics. Although the liquidator takes the assets on behalf of the creditors, third parties retain any rights which enure to them as a result of that history or those characteristics." The Commonwealth's primary submission was that this conclusion was wrong and that proceeds from the sale of trust assets should be used, after payment of priority creditors, for the discharge of all other debts, not merely trust creditors. Although in this appeal the only creditors are trust creditors it is necessary to address this submission because it directly affects the interpretation of s 433 and its antecedents. The Commonwealth relied upon the "distinctly fragile"70 decision of the Full Court of the Supreme Court of Victoria in Re Enhill Pty Ltd71. In that case the Full Court (Young CJ and Lush J, Gray J agreeing with both judgments) held that a trading trustee company's right of indemnity, namely its power of exoneration, entitled it to have recourse to trust assets in a winding up under s 292(1)(a) of the Companies Act 1961 (Vic) so that the liquidator was entitled to be paid his remuneration, costs and expenses out of moneys realised from the use or sale of the trust assets72. However, the Full Court also said that, after payment of the priority debts, the proceeds from the sale of trust assets could be used to discharge all other debts of the insolvent company and not merely those debts incurred in the course of performance of the trust duties73. Young CJ reasoned that if proceeds from the sale of trust assets were only applied to discharge the debts of creditors of the trust then this would "deny the very purpose of the right to indemnity which is to exonerate the trustee's personal estate"74. His Honour thus rejected75 an earlier decision of Needham J to the 69 (1993) 41 FCR 550 at 552-553. See also Jones v Matrix Partners Pty Ltd; Re Killarnee Civil & Concrete Contractors Pty Ltd (In liq) (2018) 260 FCR 310 at 70 Mason, "Themes and Prospects", in Finn (ed), Essays in Equity (1985) 242 at 250. 72 [1983] 1 VR 561 at 563, 572. 73 [1983] 1 VR 561 at 564, 570. 74 [1983] 1 VR 561 at 564. Edelman contrary76. Lush J reached the same conclusion by treating the "limited purposes" for which the right of exoneration can be used as "dehors the [Companies Act 1961 (Vic)]"77. With respect to Young CJ, the purpose of the power of exoneration is not to exonerate the trustee's personal estate unconditionally. It is to exonerate the trustee's estate only from authorised liabilities incurred in the course of the business of the trust. And, with respect to Lush J, the "limited purposes" of the power of exoneration did not fall outside the Companies Act, nor do they fall outside subsequent corporations legislation. Those limited purposes are part of the nature and character of the power of exoneration itself. The liquidator took the power of exoneration with all of its characteristics. As Cozens-Hardy MR said in In re Richardson; Ex parte St Thomas's Hospital (Governors)78: "If and when [a trustee in bankruptcy] pays the amount of the debt he will have a right to treat the money, which he can then sue for from the person who is bound to indemnify, as part of the estate, but unless and until he pays I fail to see how it can be in accordance with justice and common fairness that he should be allowed to augment the estate of the bankrupt in a way which results in this, that the greater the liability the greater will be the advantage to the estate. The trustee cannot be allowed to say 'I will take the money recovered under my right [of exoneration] against the claim of St Thomas's Hospital and will apply it, not towards satisfying the claim of the hospital in the way which the indemnity implies, but as part of the general assets, and I will give no effect whatever to the indemnity except so far as the hospital come in and prove for their claim in the bankruptcy.'" Nine months after the Victorian decision in Re Enhill Pty Ltd, the Full Court of the Supreme Court of South Australia departed from that decision in In re Suco Gold Pty Ltd (In liq)79. In In re Suco Gold Pty Ltd (In liq), a trustee 75 [1983] 1 VR 561 at 563-564. 76 Re Byrne Australia Pty Ltd and the Companies Act [1981] 1 NSWLR 394 at 398, although Needham J also concluded that the liquidator could only recover if he was a creditor of the trust, which Needham J later concluded he was not: Re Byrne Australia Pty Ltd and the Companies Act [No 2] [1981] 2 NSWLR 364 at 367. 77 [1983] 1 VR 561 at 572. 78 [1911] 2 KB 705 at 711. 79 (1983) 33 SASR 99. Edelman company of two unit trusts had incurred debts in the course of its duties as trustee of those trusts. The liquidator of the trustee company applied for directions as to the use of trust assets, including whether the liquidator could have recourse to the trust assets for the purpose of discharging costs and expenses of the winding up, and the liquidator's remuneration, as priority debts under s 292(1)(a) of the Companies Act 1962 (SA) before other unsecured debts. The Full Court (King CJ and Jacobs J, Matheson J agreeing with both judgments) concluded that since the power of exoneration could be used, in each case, to pay the creditors of each of the two trusts of which the company was trustee, and since the liquidator's remuneration and the costs and expenses of winding up were to be given priority over those unsecured creditors, the liquidator was entitled to have recourse to the property of each trust for that remuneration and those costs, so far as they were incurred in relation to each trust80. In an approach supported by the Commonwealth in the alternative, King CJ in In re Suco Gold Pty Ltd (In liq) said that the decision in Re Enhill Pty Ltd was "in conflict with fundamental principles of the law of trusts"81. As his Honour concluded, if a trustee in bankruptcy, or a liquidator in the case of a trustee company, were permitted to use the trust funds for a purpose other than the discharge of properly incurred trust liabilities then "the money is being used for an unauthorized purpose and is being used, moreover, for the benefit of the trustee, and of third parties, namely the non-trust creditors"82. Jacobs and Matheson JJ agreed with the analysis of these principles by King CJ. Jacobs J observed that the principles concerning the power of exoneration might not apply where the trustee has paid trust creditors from her or his own assets and seeks reimbursement from the trust fund83. As King CJ pointed out, the conclusion in that case was concerned with the trustee's power of exoneration, not its power of reimbursement by which the proceeds from the sale of trust property become part of the property divisible among all creditors84. The power of reimbursement permits a trustee who has discharged trust liabilities 80 (1983) 33 SASR 99 at 110, 113. 81 (1983) 33 SASR 99 at 105. 82 (1983) 33 SASR 99 at 105. See also In re Richardson; Ex parte St Thomas's Hospital (Governors) [1911] 2 KB 705 at 711, 714, 717; Official Assignee v Jarvis [1923] NZLR 1009 at 1019. 83 (1983) 33 SASR 99 at 114. 84 (1983) 33 SASR 99 at 108. Edelman to benefit from the trust assets without the condition limiting that benefit to discharge of debts to trust creditors. The conclusion that Re Enhill Pty Ltd was wrongly decided on this point does not contradict the provision in s 555 of the Corporations Act that, except as otherwise provided in that Act, "all debts and claims proved in a winding up rank equally and, if the property of the company is insufficient to meet them in full, they must be paid proportionately". Recognising that the power of exoneration can only be used according to its terms is not to give priority to debts incurred by the trustee with authority over other proved debts and claims. It is, instead, to confine the use of trust funds by the power of exoneration to the discharge of those debts. Further, the proportionate payment requirement in s 555 is premised upon the extent to which the property of the company can "meet" those debts. The intrinsic limit of the power of exoneration precludes it from being used to meet debts other than those incurred with authority for the conduct of the trust business. Are the preconditions for the operation of s 433(3) met? In its grounds of appeal, and in its written submissions, Carter Holt claimed that a precondition in s 433(2)(a) of the Corporations Act for the operation of s 433(3) had not been met. This involved a denial that either (i) the Receivers had been "appointed on behalf of the holders of any debentures of a company or registered body that are secured by a circulating security interest" or (ii) they had assumed control, on behalf of the Bank, which held debentures of Amerind, "of any property comprised in or subject to a circulating security interest". The immediate difficulty with this submission is that, as the Court of Appeal held, and as senior counsel for Carter Holt accepted in oral submissions, the Receivers were appointed on behalf of the holders of debentures secured by a circulating security interest. That security, created by the General Security Deed, had been registered on 20 December 2012 on the Personal Property Securities Register under Pt 5.3 of the Personal Property Securities Act. Ultimately, in oral submissions senior counsel for Carter Holt accepted that the expressed preconditions in s 433(2)(a) for the operation of s 433(3) were met. His submission effectively became that s 433(2)(a) or s 433(3) must contain an implication further limiting the operation of the priority provision in s 433(3) so that the priority is given only over circulating assets that are the property of the company. He submitted that this implication was necessary because otherwise s 433 would extend to "every item of property of the company regardless of whether it is circulating or not", contrary to the purpose of s 433, which was to provide for priority only over the distribution of circulating assets. Edelman His submission was effectively that since s 433 was concerned only with floating charges, now circulating security interests, the implication is necessary to avoid giving priority to the specified debts over fixed charges, which would disturb vested and established property rights. Applying this alleged implication in s 433 of the Corporations Act, senior counsel for Carter Holt effectively submitted that s 433 could have no operation in relation to the distribution of trust assets to trust creditors by use of Amerind's power of exoneration because Amerind's power of exoneration does not fall within the definition of a "circulating asset" in s 340 of the Personal Property Securities Act and is therefore not one of the circulating assets over which the Bank held its security interest. Conversely, although, as the Court of Appeal held, the proceeds comprising the receivership surplus held by the Receivers are circulating assets, it was submitted that they are not "property of the company". Carter Holt's submissions should not be accepted for two reasons. First, there is no need for the suggested implication. The existing preconditions in s 433(2)(a) of the Corporations Act prevent the specified creditors, including employees, being given priority over the holders of fixed, or non-circulating, security rights. The preconditions require the appointment of, or the control of assets by, a receiver to have arisen as a result of debentures of a company that are secured by a circulating security interest. Debentures that are secured by fixed, or non-circulating, security interests are not within the terms of s 433(2). Section 433(3) then confines the priority of the specified creditors to a priority over claims "in respect of the debentures", meaning those debentures that are secured by a circulating security interest. As the Court of Appeal correctly observed, there is no requirement in s 433 that "the right of indemnity by means of which the receiver could have recourse to the trust property must itself be subject to a circulating security interest"85. Secondly, and fundamentally, the reason there is no such implied requirement in s 433 is that it is incorrect to treat rights held on trust by a company as if they existed separately and independently from its power of exoneration so that it could be said that (i) the rights held on trust, and subject to the circulating security interest, are not the property of the company, but (ii) the power of exoneration, which is the property of the company, is not subject to the circulating security interest. As explained above, Amerind's power of exoneration is the means by which its trust rights can be used for its personal 85 Re Amerind Pty Ltd; The Commonwealth v Byrnes and Hewitt (2018) 54 VR 230 at Edelman benefit as trustee. It is meaningless to ask whether Amerind's power of exoneration is subject to the circulating security interest independently of the legal rights to the trust assets to which the power relates. The point is that Amerind's legal rights to the trust assets, to the extent that it has power to use them for its own benefit, are thus themselves circulating assets and are "property of the company" within s 433. The same reasoning applies to s 561 of the Corporations Act, which is the provision cognate to s 433 but relevant to liquidators rather than receivers. That section provides that if the "property of a company available for payment of creditors other than secured creditors" is insufficient to meet payment of the debts to various priority creditors, including employees, then payment of those debts: "must be made in priority over the claims of a secured party in relation to a circulating security interest created by the company and may be made accordingly out of any property comprised in or subject to the circulating security interest". Again, to the extent of the power of exoneration the rights held by the trustee on trust are the property of the company which is, again to the extent of that power, "available", in the sense of available to be used, for the payment of creditors. The trust rights held by Amerind and controlled by the Receivers are "subject to [the] circulating security interest". Is there a payment "out of the property coming into [the receiver's] hands"? In Re Independent Contractor Services (Aust) Pty Ltd (In liq) [No 2]86, Brereton J considered the applicability of s 556(1)(e) of the Corporations Act to the trustee company in liquidation of a trading trust. The relevant priority in that case concerned the payment of a superannuation guarantee charge in respect of services rendered to the company by employees over other unsecured debts. On the liquidator's application for directions, Brereton J held that s 556 did not require liabilities to be paid out from trust property "because s 556 is concerned only with the distribution of assets beneficially owned by a company and available for division between its general creditors"87. The primary judge in this case followed the decision in Re Independent Contractor Services (Aust) Pty Ltd (In liq) [No 2] and treated that reasoning as 86 (2016) 305 FLR 222 at 230-232 [23]-[25]. 87 (2016) 305 FLR 222 at 230 [23]. Edelman leading to the conclusion that the trustee's power of exoneration was not the property of the trustee company88. Carter Holt refined this argument in oral submissions and alleged that a payment from the proceeds held by the Receivers would not be a payment "out of the property coming into his, her or its hands". This was said to be because although the power of exoneration is property coming into the Receivers' hands, a payment from the receivership surplus is a payment from trust assets, which are not property of the company held by the Receivers. This submission must be rejected. To reiterate, the "trust assets" are the property of the company and are held by the Receivers, although only to the extent to which Amerind could use them for its own benefit, relevantly by Amerind's power of indemnity. Further, the statutory expression "out of the property" cannot mean that the payment must only be made immediately from the trust rights. That would preclude even the conversion of non-monetary trust rights to money and then payment of the cash. "Out of the property" must include payments made "by the use of the property". Hence, if the trustee can use its rights in relation to the trust assets, including its power of indemnity, to sell the assets for the purpose of exoneration, then a payment of a trust creditor directly from the trust assets by use of the power of exoneration is a payment made "out of" the trustee's rights in relation to the trust assets. A payment by the Receivers of trust creditors by use of Amerind's power of exoneration must be a payment "out of the property" in the Receivers' hands. Conclusion This appeal was concerned only with two related issues of basic principle. Further issues may arise that need not be resolved on this appeal. For instance, questions might arise about the correct order of priority between trust creditors after payment of the priority debts89. Or questions might arise about the 88 Re Amerind Pty Ltd (In liq) (2017) 320 FLR 118 at 138 [67]. See also Bruton Holdings Pty Ltd (In liq) v Federal Commissioner of Taxation (2011) 193 FCR 442 at 449 [27]; Woodgate, in the matter of Bell Hire Services Pty Ltd (In liq) [2016] FCA 1583 at [35]. 89 See McPherson, "The Insolvent Trading Trust", in Finn (ed), Essays in Equity (1985) 142 at 156; Heydon and Leeming, Jacobs' Law of Trusts in Australia, 8th ed (2016) at 523 [21-15]. Compare In re Suco Gold Pty Ltd (In liq) (1983) 33 SASR Edelman marshalling of claims where a creditor has access to more than one fund. That question had been reserved for later hearing by the primary judge90. The fundamental reason why this appeal must be dismissed flows from an appreciation that s 433 of the Corporations Act is not based upon a conception of a trustee company's rights that draws a sharp division between, on the one hand, the rights held on trust and, on the other hand, the trustee's powers in association with those rights, here the power of exoneration. The rights of the trustee, collectively so viewed, can be used for the benefit of the trustee in discharging debts to trust creditors and, to that extent, when the subject of a circulating security interest they are property of the company coming into the hands of a receiver. From that property the receiver must pay various debts, including employee debts, in priority to any claim for principal or interest in respect of debentures secured by that circulating security interest. Apart from the underlying conception of the law of trusts that s 433 thus applies, two further considerations fortify this conclusion. The first is the obvious fit that the conclusion has with the underlying purpose of provisions such as ss 433 and 561. It would be perverse if the Corporations Act operated to deny employee creditors a particular priority over the holders of a circulating security interest solely for the reason that the company which employed them was, perhaps even unknown to the employees, trading as a trustee. Secondly, as Allsop CJ observed in Jones v Matrix Partners Pty Ltd; Re Killarnee Civil & Concrete Contractors Pty Ltd (In liq)91, s 433 was enacted in 2001 as part of the Corporations Act at a time when the decision in In re Suco Gold Pty Ltd (In liq) had stood for 17 years and "was both well-regarded and followed (though by no means universally) including in relation to priorities and liquidator's costs". The appeal must be dismissed with costs. 90 Re Amerind Pty Ltd (In liq) (2017) 320 FLR 118 at 215 [542]. 91 (2018) 260 FCR 310 at 338 [106]. Bell Nettle BELL, GAGELER AND NETTLE JJ. This is an appeal from the Court of Appeal of the Supreme Court of Victoria (Ferguson CJ, Whelan, Kyrou, McLeish and Dodds-Streeton JJA). As initially presented, it posed two questions for decision: (1) whether an insolvent corporate trustee's right to be indemnified out of trust assets is "property of the company" within the meaning of s 433(3) of the Corporations Act 2001 (Cth); and (2) whether such a right is "property comprised in or subject to a circulating security interest" for the purpose of s 433(2)(a) by reason of a deed under which credit facilities were made available to a corporate trustee. For the reasons which follow, neither of those questions is dispositive of the appeal. Instead, the appeal should be dismissed because the trust assets themselves were property "coming into [the receivers'] hands" and out of which they were bound to pay priority "debts or amounts" in accordance with s 433(3). The facts Amerind Pty Ltd (receivers and managers appointed) (in liquidation) ("Amerind") carried on a business, solely in its capacity as trustee of the Panel Veneer Processes Trading Trust ("the Trust"), of manufacturing and distributing decorative and architectural finishes. To that end, it maintained a number of credit facilities and accounts with Bendigo and Adelaide Bank Ltd ("the Bank") secured by a range of securities. On 6 March 2014, the Bank sent a notice to Amerind terminating all facilities and demanding their repayment, and, on 11 March 2014, the Bank appointed Mathew James Byrnes and Andrew Stewart Reed Hewitt as receivers and managers of Amerind ("the receivers") pursuant to the General Security Deed between the parties ("the Deed"). On 13 August 2014, Amerind's creditors resolved that the company be wound up in insolvency. Following their appointment, the receivers traded on until they had realised all of the assets of the Trust, and out of the proceeds satisfied all Amerind's obligations to the Bank. After provision for what the receivers considered to be a just estimate of their remuneration, the surplus remaining available for distribution to creditors was some $1,619,018, being the proceeds of realisation of inventory ("the receivership surplus"). By that time, the Commonwealth had advanced accrued wages and entitlements totalling $3.8 million to Amerind's former employees pursuant to the Fair Entitlements Guarantee Scheme. The Commonwealth claimed that it was entitled to be paid out of the receivership surplus, pursuant to ss 433(3), 556(1)(e) and 560 of the Corporations Act, in priority to other creditors. Bell Nettle The Deed Clause 2 of the Deed relevantly provided that: "2.1 For the purpose of securing payment of the amount owing, you: grant a security interest in the personal property to us; and charge the other property to us by way of fixed charge. You do this ... as sole trustee of the trust for all the collateral comprising the trust fund of the trust ... 2.2 Without limiting clause 2.1, the security interests taken by us under this security deed extend to all of the collateral being all of your present and after acquired property." Clause 10 of the Deed relevantly provided that: "10.2 You may not, without our prior written consent, do, or agree to do, any of the following in respect of the collateral: sell, assign or otherwise dispose of the collateral; ... except for a disposal of inventory in the ordinary course of your business. ... If you dispose of, deal with or part with possession of any interest in inventory in the ordinary course of business, our security interest will extend to the proceeds you receive in respect of that inventory." Clause 40 of the Deed relevantly provided that: "40.1 In this security deed: amount owing means all amounts that at any time ...: are payable, are owing but not currently payable, are contingently owing, or remain unpaid by you to us; ... Bell Nettle collateral means the personal property and other property: of whatever kind and wherever situated; (b) whether you are the beneficial owner or hold as trustee of a trust; and (c) whether you hold it jointly or with one or more other persons (whether in partnership or not and whether named in the Details or not). other property means all your present and after-acquired rights and interests in land and any other property, rights and interests that is not personal property. personal property means all of your present and after-acquired personal property (as defined in the PPSA and to which the PPSA applies) and all present and after-acquired personal property (as defined in the PPSA and to which the PPSA applies) in which you have rights. PPSA means the Personal Property Securities Act 2009 (Cth) and any regulations made pursuant to it. proceeds includes proceeds for the purposes of the PPSA but is not limited to them. security interest: in relation to any personal property (as defined in the PPSA) has the same meaning as in the PPSA; and in relation to any other property means any security for the payment of money or performance of obligations pledge, trust or power. including a mortgage, charge, Bell Nettle 40.2 The following words have the respective meanings given to them in the PPSA: ... inventory ..." Relevant statutory provisions Section 9 of the Corporations Act relevantly defines "property" as follows: "property means any legal or equitable estate or interest (whether present or future and whether vested or contingent) in real or personal property of any description and includes a thing in action ..." Section 51 of the Corporations Act provides, so far as is relevant, that: "PPSA security interest (short for Personal Property Securities Act security interest) means a security interest within the meaning of the Personal Property Securities Act 2009 and to which that Act applies ..." Section 51C of the Corporations Act provides that: "circulating security interest means a security interest that is: a PPSA security interest, if: the security interest has attached to a circulating asset within the meaning of the Personal Property Securities Act 2009; and the grantor (within the meaning of that Act) has title to the asset; or a floating charge." Section 433 of the Corporations Act provides, so far as is relevant, that: "(2) This section applies where: a receiver is appointed on behalf of the holders of any debentures of a company ... that are secured by a circulating security interest ... of any property comprised in or subject to a circulating security interest; and Bell Nettle at the date of the appointment ... (in this section called the relevant date): the company ... has not commenced to be wound up voluntarily; and the company ... has not been ordered to be wound up by the Court. In the case of a company, the receiver ... taking possession or assuming control of property of the company must pay, out of the property coming into his, her or its hands, the following debts or amounts in priority to any claim for principal or interest in respect of the debentures: first, ...; next, ...; subject to subsections (6) and (7), next, any debt or amount that in a winding up is payable in priority to other unsecured debts pursuant to paragraph 556(1)(e), (g) or (h) or section 560. The receiver ... taking possession or assuming control of property must pay debts and amounts payable pursuant to paragraph (3)(c) ... in the same order of priority as is prescribed by Division 6 of Part 5.6 in respect of those debts and amounts." Section 555 of the Corporations Act provides in substance that, subject to exceptions, all debts and claims proved in a winding up rank equally and, in the event of a deficiency of assets, pari passu. Section 556(1)(e) of the Corporations Act, which is in Div 6 of Pt 5.6, relevantly provides for the payment of "wages, superannuation contributions and superannuation guarantee charge payable by the company in respect of services rendered to the company by employees before the relevant date" in priority to all other unsecured debts and claims except classes of claims which do not here apply. Section 10 of the Personal Property Securities Act 2009 (Cth) ("the PPSA") defines "inventory" as follows: Bell Nettle "inventory means personal property (whether goods or intangible property) that, in the course or furtherance, to any degree, of an enterprise to which an ABN has been allocated: is held by the person for sale or lease, or has been leased by the person as lessor; or is held by the person to be provided under a contract for services, or has been so provided; or is held by the person as raw materials or as work in progress; or is held, used or consumed by the person, as materials." Section 12 of the PPSA provides, so far as is relevant, that: "(1) A security interest means an interest in personal property provided for by a transaction that, in substance, secures payment or performance of an obligation (without regard to the form of the transaction or the identity of the person who has title to the property). Note: For the application of this Act to interests, see section 8. For example, a security interest includes an interest in personal property provided by any of the following transactions, if the transaction, in substance, secures payment or performance of an obligation: a fixed charge; a floating charge ..." Section 340 of the PPSA defines "circulating asset" to include personal property in respect of which a security interest has been granted where "the secured party has given the grantor express or implied authority for any transfer of the personal property to be made, in the ordinary course of the grantor's business, free of the security interest". Bell Nettle Proceedings at first instance Before the primary judge (Robson J), the parties were agreed92 that, in order for s 433 of the Corporations Act to apply to the receivers, two conditions had to be satisfied: that the receivers were in possession of "property of the company" within the meaning of s 433(3); and that that property was subject to a "circulating security interest". The primary judge held93 that the receivers were not in possession of "property of the company", because the company "ha[d] no assets of its own with which to pay the trust creditors", only a right of indemnity in respect of trust liabilities; and that right was "not personal property of the trustee", but rather "held on trust for the trust creditors". In the alternative, the primary judge reasoned94 that, even if Amerind's right of indemnity were "property of the company" within the meaning of s 433, it was not comprised in or subject to the "circulating security interest" created by the Deed, and, therefore, that s 433 was not engaged. The primary judge thus rejected95 the Commonwealth's claim. Proceedings in the Court of Appeal The Commonwealth's appeal to the Court of Appeal was successful. The Court of Appeal held96 that Amerind's right to be indemnified out of the assets of the Trust was "property of the company" and that it necessarily followed that the provisions of ss 433, 555 and 556 applied. The Court of Appeal further held97 in effect that, because the Deed created a circulating security interest in the proceeds of realisation of the inventory, it was unnecessary to decide whether the Deed created a circulating security interest in the company's right of indemnity. It was enough that s 433(3) operated according to its terms to require the receivers to pay out of the proceeds 92 Re Amerind Pty Ltd (In liq) (2017) 320 FLR 118 at 189 [373]. 93 Re Amerind Pty Ltd (In liq) (2017) 320 FLR 118 at 139 [79], 142 [99], 182 [333]. 94 Re Amerind Pty Ltd (In liq) (2017) 320 FLR 118 at 189 [374], 192 [389]. 95 Re Amerind Pty Ltd (In liq) (2017) 320 FLR 118 at 192 [391]. 96 Re Amerind Pty Ltd; The Commonwealth v Byrnes and Hewitt (2018) 54 VR 230 at 97 Re Amerind Pty Ltd; The Commonwealth v Byrnes and Hewitt (2018) 54 VR 230 at Bell Nettle of realisation of the inventory (being property of Amerind the subject of a circulating security interest and of which the receiver had taken possession or assumed control) the claims provided for in s 556(1)(e), (g) and (h), in priority to any claim for principal or interest. The Court of Appeal added98 that, because all of Amerind's creditors were trust creditors, it was unnecessary to decide whether the proceeds of realisation were distributable among creditors generally, as was held in Re Enhill Pty Ltd99, or only as between trust creditors, as was held in In re Suco Gold Pty Ltd (In liq)100, but that, until and unless the issue was authoritatively determined, trial judges in Victoria should continue to follow Re Enhill. The right of indemnity A corporate trustee's right to be indemnified out of the assets of the trust confers "property" for the purposes of the Corporations Act. As was stated101 by the plurality in Octavo Investments Pty Ltd v Knight, although a trustee who enters into business transactions as trustee is personally liable for debts incurred in the course of those transactions, the trustee is entitled to be indemnified (whether by recoupment or exoneration) out of the trust assets against such liabilities, and thus enjoys a beneficial interest in those assets. The corollary, as was stated102 unanimously in Chief Commissioner of Stamp Duties (NSW) v Buckle, is that the trustee does not hold the trust assets solely for the benefit of the beneficiaries to the extent of that right of indemnity. 98 Re Amerind Pty Ltd; The Commonwealth v Byrnes and Hewitt (2018) 54 VR 230 at 100 (1983) 33 SASR 99. 101 (1979) 144 CLR 360 at 367 per Stephen, Mason, Aickin and Wilson JJ; [1979] HCA 61. 102 (1998) 192 CLR 226 at 246 [48] per Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ; [1998] HCA 4. See also CPT Custodian Pty Ltd v Commissioner of State Revenue (Vic) (2005) 224 CLR 98 at 121 [51] per Gleeson CJ, McHugh, Gummow, Callinan and Heydon JJ; [2005] HCA 53. Bell Nettle The idea of a trustee's right of indemnity conferring a beneficial interest in the trust assets has been criticised. Professor Ford, for example, argued103 that a trustee's right of exoneration, being limited to the discharge of trust liabilities, should properly be characterised as conferring a personal power, not property within the meaning of s 5(1) of the Bankruptcy Act 1966 (Cth). But criticism of that kind is misplaced. It is apt to distract attention from the practical relationship between the trustee's equitable right of indemnity and legal powers of ownership. As has been understood at least since Maitland's explication of the trust104, a trustee as legal owner of the trust assets has all the powers incidental to ownership subject only to the power of the beneficiaries to compel the trustee to exercise the trustee's powers in accordance with the terms of trust105. Inasmuch as a court of equity will aid the beneficiaries in the enforcement of the terms of trust, the beneficiaries are described, especially in revenue contexts, as having a beneficial interest in, or occasionally even beneficial ownership of, the trust assets106. The beneficiaries' interest is not, however, to be conceived of as cut out 103 Ford, "Trading Trusts and Creditors' Rights" (1981) 13 Melbourne University Law Review 1 at 4-5, 14, 17. 104 See Maitland, Equity, also The Forms of Action at Common Law (1909), lectures 9-11. See also Stone, "The Nature of the Rights of the Cestui Que Trust" (1917) 17 Columbia Law Review 467; Jordan, Chapters on Equity in New South Wales, 6th ed (1947) at 17. See and contrast Scott, "The Nature of the Rights of the Cestui Que Trust" (1917) 17 Columbia Law Review 269; Hohfeld, "The Relations between Equity and Law" (1913) 11 Michigan Law Review 537. 105 DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties [1980] 1 NSWLR 510 at 518-519 per Hope JA (Glass JA agreeing at 531); Buckle (1998) 192 CLR 226 at 242 [37] per Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ. See also Federal Commissioner of Taxation v Linter Textiles Australia Ltd (In liq) (2005) 220 CLR 592 at 606 [30] per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ; [2005] HCA 20. 106 Linter (2005) 220 CLR 592 at 612 [52]-[53] per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ; CPT Custodian (2005) 224 CLR 98 at 119 [44] per Gleeson CJ, McHugh, Gummow, Callinan and Heydon JJ; ElecNet (Aust) Pty Ltd v Federal Commissioner of Taxation (2016) 259 CLR 73 at 87-88 [50] per Kiefel, Gageler, Keane and Gordon JJ, 98-99 [86]-[87] per Nettle J; [2016] HCA 51. Bell Nettle of the trustee's legal estate but rather as engrafted onto it as a restriction on the manner in which the trustee may deal with trust assets107. The trustee also has a right to be indemnified out of the trust assets in respect of liabilities properly incurred in the execution of the trust, which takes priority over the beneficiaries' claim on the trust assets108. Until that right has been satisfied, the beneficiaries cannot compel the trustee to exercise the trustee's powers as legal owner of the trust assets for their benefit109. A court of equity will assist the trustee to realise trust assets to satisfy the trustee's right of indemnity, in priority to the beneficiaries' interests110, and thus it is said that the trustee has an equitable charge or lien over the trust assets111. It is not, however, a charge or lien comparable to a synallagmatic security interest over property of another. It arises endogenously as an incident of the office of trustee in respect of the trust assets112. 107 Re Transphere Pty Ltd (1986) 5 NSWLR 309 at 311 per McLelland J. See White, "Insolvent Trusts: Implications of Buckle and CPT Custodian" (2017) 44 Australian Bar Review 1 at 9-11. 108 Re Exhall Coal Co Ltd (1866) 35 Beav 449 at 452-453 per Lord Romilly MR [55 ER 970 at 971]; Vacuum Oil Co Pty Ltd v Wiltshire (1945) 72 CLR 319 at 335 per Dixon J; [1945] HCA 37; Octavo (1979) 144 CLR 360 at 369-370 per Stephen, Mason, Aickin and Wilson JJ; Buckle (1998) 192 CLR 226 at 246 [47] per Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ. 109 In re Johnson; Shearman v Robinson (1880) 15 Ch D 548 at 552 per Jessel MR; In re Evans; Evans v Evans (1887) 34 Ch D 597 at 601 per Cotton LJ; Jennings v Mather [1901] 1 QB 108 at 115 per Kennedy J; [1902] 1 KB 1 at 6-7 per Stirling LJ; Buckle (1998) 192 CLR 226 at 246 [47] per Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ. 110 See, eg, Grissell v Money (1869) 38 LJ Ch 312 per Lord Romilly MR; cf Darke v Williamson (1858) 25 Beav 622 at 626-627 per Romilly MR [53 ER 774 at 776]. 111 Buckle (1998) 192 CLR 226 at 247 [50] per Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ. See also Bruton Holdings Pty Ltd (In liq) v Federal Commissioner of Taxation (2009) 239 CLR 346 at 358-359 [43] per French CJ, Gummow, Hayne, Heydon and Bell JJ; [2009] HCA 32. 112 Worrall v Harford (1802) 8 Ves Jun 4 at 8 per Lord Eldon LC [32 ER 250 at 252], quoted in Buckle (1998) 192 CLR 226 at 245 [47]. See and compare Hewett v Court (1983) 149 CLR 639 at 663-664 per Deane J; [1983] HCA 7. Bell Nettle Possibly, the trustee's right of indemnity could be as well described as conferring a personal power (as Professor Ford argued it should be) as a proprietary interest. But the choice of description should conform to, rather than dictate, the application of fundamental principles to "solving a concrete legal problem"113. The trustee's right to apply trust assets in satisfaction of trust liabilities is proprietary in that it may be exercised in priority to the beneficial interests of the beneficiaries114. To describe it as constituting a beneficial interest in the trust assets, and so as property, thus acknowledges the characteristic blending of personal rights and obligations with proprietary interests which is the "genius" of the trust institution115. Such a beneficial interest falls naturally and ordinarily within the definition of "property" in s 9 of the Corporations Act. Property of the company In several of the authorities116, and thus in the proceedings below117, the property of a trustee available for the payment of creditors in the event of insolvency is described as being the right of indemnity. That is so in the sense that the trustee's right of indemnity confers a beneficial interest in the trust assets. As this case demonstrates, however, it is necessary to keep in mind that the property constituted of the right of indemnity as such and the property constituted of the trust assets themselves are separate and distinct, albeit that the former confers a proprietary interest in the latter. Failure to bear that in mind is liable to result in the misconception at which the primary judge arrived, and which was perpetuated in the appellant's submissions before this Court, that, because Amerind's right of indemnity as such was not property that was subject to a circulating security interest, s 433 did not apply. 113 Livingston v Commissioner of Stamp Duties (Q) (1960) 107 CLR 411 at 448 per Kitto J; [1960] HCA 94. 114 Buckle (1998) 192 CLR 226 at 246 [47]-[48] per Brennan CJ, Toohey, Gaudron, 115 Waters, "The Nature of the Trust Beneficiary's Interest" (1967) 45 Canadian Bar Review 219 at 274. 116 Jennings v Mather [1901] 1 QB 108 at 117 per Kennedy J; [1902] 1 KB 1 at 6 per Sterling LJ, 9 per Mathew LJ; Savage v Union Bank of Australia Ltd (1906) 3 CLR 1170 at 1188 per Griffith CJ, 1196 per O'Connor J; [1906] HCA 37; Octavo (1979) 144 CLR 360 at 367 per Stephen, Mason, Aickin and Wilson JJ. 117 See [76]-[77] above. Bell Nettle In s 433(3) of the Corporations Act, the property of which the receiver takes possession or assumes control and out of which the receiver is required to pay the specified liabilities is the "property comprised in or subject to [the] circulating security interest", granted by a company, pursuant to which the receiver is appointed. Amerind's right of indemnity was not "property [of the company] comprised in or subject to a circulating security interest" granted by Amerind. In the absence of any suggestion that the Bank gave Amerind express or implied authority to transfer Amerind's right of indemnity in the ordinary course of business, it was not a "circulating asset" within the meaning of s 340 of the PPSA and thus any security over it was not a "circulating security interest" as defined in s 51C of the Corporations Act. The property "coming into [the receivers'] hands", and out of which they were to pay the priority "debts or amounts", did not include the right of indemnity itself. Nor was it the case, as the Court of Appeal reasoned might be possible118, that the character of the trust assets automatically flowed through to the right of indemnity and so brought the right of indemnity within the reach of s 433. It was the inventory itself which was the circulating asset the subject of a circulating security interest (created by cl 2.1 of the Deed), pursuant to which the receivers were appointed, which attracted the operation of s 433. Certainly, as the primary judge found in effect, Amerind held the inventory on trust in accordance with the terms of the trust deed, but, contrary to the primary judge's reasoning, that did not mean that it could not be "property of the company" for the purposes of s 433119. As legal owner of the inventory, with power under the trust deed to encumber the inventory in favour of the Bank as security for the company's borrowings, Amerind was empowered to, and did, subject the inventory to a circulating security interest in favour of the Bank. Upon Amerind's default under the Deed, the receivers were empowered to, and did, take possession or assume control of the inventory pursuant to that circulating security interest. And Amerind had at that time a right of indemnity out of the whole of the inventory of which the receivers took possession or assumed control. 118 Re Amerind Pty Ltd; The Commonwealth v Byrnes and Hewitt (2018) 54 VR 230 at 119 See [76] above. Bell Nettle Amounts payable in a winding up In Stein v Saywell, Barwick CJ posited120 that the policy behind s 196 and s 292(4) of the Companies Act 1961 (NSW) (legislative forerunners of s 433 and s 556 of the Corporations Act) was that a creditor who accepts a floating charge of a company's business assets and allows the company to be carried on and the assets the subject of the floating charge to be altered and possibly augmented by the efforts of the company and its employees will not be permitted to displace the priorities which the legislation accords to certain debts which accrue during the carrying on of the business: amongst them, the remuneration of employees. The same is true under s 433. Its purpose is to enjoin a receiver appointed by the holder of a circulating security interest to observe the order of priorities which applies to preferential creditors in the event of a winding up. It requires a receiver who has taken possession or assumed control of property the subject of a circulating security interest to pay out of that property any debt or amount that, in the event of the company being wound up, would be payable out of the proceeds of realisation of that property pursuant to s 556(1)(e), (g) or (h). In this case, s 433 applied, according to its terms, to require the receivers to pay out of the proceeds of realisation of the inventory so much of the debts identified in s 556(1)(e) as would, in the event of a winding up, be payable out of those proceeds in discharge of trust liabilities. Identification of the amounts that would be payable pursuant to s 556(1)(e) in the event of a winding up is informed by the legislative context in which s 556(1)(e) appears, and in particular the close juxtaposition of s 556(1)(e) to both s 555 (which provides in part that if the "property of the company" is insufficient to meet claims they must be paid proportionately) and s 561 (which provides that, in a winding up, so far as "the property of a company available for payment of creditors" is insufficient to meet the payment of any debt referred to in s 556(1)(e), (g) or (h), such a debt must be paid in priority over the claims of a secured party in relation to a circulating security interest created by the company and may be made accordingly out of any property comprised in or subject to the circulating security interest). In the winding up of a corporate trustee, the "property of the company" that is available for the payment of creditors includes so much of the trust assets as the company is entitled, in exercise of the company's right of indemnity as trustee, to apply in satisfaction of the claims of trust creditors. Thus, in this case, where the liabilities identified in s 556(1)(e) were trust liabilities, the "property of the company" that would have been available for the payment of creditors in the 120 (1969) 121 CLR 529 at 544; [1969] HCA 16. Bell Nettle event of a winding up would have been so much of the trust assets as would be sufficient to pay or satisfy the claims of trust creditors. Because the trust assets were inventory, rather than money or an equivalent, and there was a deficiency, the whole of the receivership surplus was to be applied to priority "debts" and "amounts". Re Enhill or Re Suco Gold? A significant part of the primary judge's reasons, and a substantial part of the Court of Appeal's reasons, was directed to the question of whether an insolvent corporate trustee's right to be indemnified out of trust assets against trust liabilities constitutes property of the company that may be applied only in payment of trust creditor liabilities (as was held121 in Re Suco Gold) or is property of the company available for distribution among creditors generally (as was held122 in Re Enhill). Consistently with the preponderance of authority that favours123 the correctness of Re Suco Gold, the primary judge held124 that a trustee's right of exoneration in respect of trust liabilities may be applied only in satisfaction of the trust liabilities to which the right of exoneration relates. In contrast, the Court of Appeal in effect adhered125 to the decision of the Full Court 121 (1983) 33 SASR 99 at 105 per King CJ (Matheson J agreeing at 115), 114 per Jacobs J (Matheson J agreeing at 115). 122 [1983] 1 VR 561 at 564 per Young CJ (Gray J agreeing at 572), 569 per Lush J (Gray J agreeing at 572). 123 Re Byrne Australia Pty Ltd and the Companies Act [1981] 1 NSWLR 394 at 399 per Needham J; Re ADM Franchise Pty Ltd (1983) 7 ACLR 987 at 988-989 per McLelland J; Re Indopal Pty Ltd (1987) 12 ACLR 54 at 57 per McLelland J; Re G B Nathan and Co Pty Ltd (In liq) (1991) 24 NSWLR 674 at 685 per McLelland J; Sjoquist v Rock Eisteddfod Productions Pty Ltd (1996) 19 ACSR 339 at 343 per McLelland CJ in Eq; 13 Coromandel Place Pty Ltd v C L Custodians Pty Ltd (In liq) (1999) 30 ACSR 377 at 384 per Finkelstein J; Jones v Matrix Partners Pty Ltd; Re Killarnee Civil & Concrete Contractors Pty Ltd (In liq) (2018) 260 FCR 310 at 319-320 [30], 331 [76]-[78], 338 [106] per Allsop CJ (Farrell J agreeing at 351-352 [197]), 349 [178] per Siopis J. See also McPherson, "The Insolvent Trading Trust", in Finn (ed), Essays in Equity (1985) 142 at 153-154; Mason, "Themes and Prospects", in Finn (ed), Essays in Equity (1985) 242 at 250; Merralls, "Unsecured Borrowings by Trustees of Commercial Trusts" (1993) 10 Australian Bar Review 248 at 249-250. 124 Re Amerind Pty Ltd (In liq) (2017) 320 FLR 118 at 182 [327], 189 [371]. 125 See [79] above. Bell Nettle of the Supreme Court of Victoria in Re Enhill that the proceeds of the trustee's right of indemnity are property of the company available for distribution among all creditors according to the order of priority established by ss 555, 556 and 560. The primary judge was correct that the proceeds from an exercise of a corporate trustee's right of exoneration in respect of trust liabilities may be applied only in satisfaction of the trust liabilities to which that right relates. As was concluded126 by King CJ in Re Suco Gold, and has since been affirmed127 by the Full Court of the Federal Court of Australia in Jones v Matrix Partners Pty Ltd; Re Killarnee Civil & Concrete Contractors Pty Ltd (In liq): "the right of indemnity can only produce proceeds for division among the creditors generally if the trustee has discharged the liabilities incurred in the performance of the trust and is therefore entitled to recoup himself out of the trust property. If he has not discharged the liabilities, the right of indemnity entitles him to resort to the trust property only for the purpose of discharging those liabilities. He may apply the trust moneys directly to the payment of the trust creditors or he may take it into his own possession for that purpose. If he takes trust property into his possession to satisfy his right to be indemnified in respect of unpaid trust liabilities, ... that property retains its character as trust property and may be used only for the purpose of discharging the liabilities incurred in the performance of the trust. The exercise of the right of indemnity is for the benefit of the trustee in that it relieves him of liability for the trust debts. If the trustee is bankrupt, or being a company is in liquidation, the trustee in bankruptcy or liquidator can exercise the right of indemnity which vests in him as part of the property of the bankrupt or insolvent company. If the trust liabilities have been discharged, the trustee in bankruptcy or liquidator is entitled to recoup the bankrupt estate out of the trust property and the proceeds of the right of indemnity become part of the property divisible among the creditors. If the liabilities have not been discharged, the trustee in bankruptcy or liquidator may, by reason of the right of indemnity which vests in him, apply the trust property to the payment of the trust liabilities, thereby exonerating the bankrupt estate to the extent of the value of the available trust assets. In the latter circumstances there cannot be proceeds of the right of indemnity which are available for distribution among the general body of creditors." (emphasis added) 126 (1983) 33 SASR 99 at 107-108. 127 (2018) 260 FCR 310 at 335-337 [100]-[101]. Bell Nettle The primary judge was not correct, however, in holding that it followed that the statutory order of priority for the payment of debts was inapplicable. It is true, as his Honour observed128, that there is authority to the effect that the proceeds of an insolvent corporate trustee's right of indemnity should be distributed among trust creditors pari passu129, either by an application of "the general principle of equity that requires a distribution of company property in winding-up to proceed upon a footing of equality amongst all the creditors of equal degree"130 or by analogy with "cases of competing claims by beneficiaries of different trusts to trace into a mixed fund"131. But so to reason by reference to general precepts of equity wrongly presupposes that s 556 and its precursors cannot apply in terms to the proceeds of realisation of a trustee's right of indemnity because such provisions are "addressed only to distribution of assets beneficially owned by the company and available for division between general creditors"132. In this respect, the oft-stated maxim that bankruptcy legislation has no application to trust assets has the capacity to mislead. From the outset, courts of equity construed133 the earliest bankruptcy statutes according to a presumption that assignees in bankruptcy, who were 128 Re Amerind Pty Ltd (In liq) (2017) 320 FLR 118 at 141-142 [94]. 129 Re Independent Contractor Services (Aust) Pty Ltd (In liq) [No 2] (2016) 305 FLR 222 at 230-231 [23] per Brereton J. 130 McPherson, "The Insolvent Trading Trust", in Finn (ed), Essays in Equity (1985) 142 at 157-158, citing Re Alfred Shaw and Co Ltd; Ex parte Mackenzie (1897) 8 QLJ 93 at 96 per Griffith CJ. 131 Heydon and Leeming, Jacobs' Law of Trusts in Australia, 8th ed (2016) at 523 [21-15], citing Keefe v Law Society of New South Wales (1999) 44 NSWLR 451 and Re Sutherland; French Caledonia Travel Service Pty Ltd (In liq) (2003) 59 NSWLR 361. See also Meagher, "Insolvency of Trustees" (1979) 53 Australian Law Journal 648 at 653. 132 Heydon and Leeming, Jacobs' Law of Trusts in Australia, 8th ed (2016) at 523 133 See, eg, Taylor v Wheeler (1706) 2 Vern 564 at 566 per Wright LK [23 ER 968 at 968-969]; Bennet v Davis (1725) 2 P Wms 316 at 318 per Jekyll MR [24 ER 746 at 747]; Tyrrell v Hope (1743) 2 Atk 558 at 562 per Fortescue MR [26 ER 735 at 737]; Ex parte Dumas (1754) 2 Ves Sen 582 at 585 per Lord Hardwicke LC [28 ER 372 at 373]; Mitford v Mitford (1803) 9 Ves Jun 87 at 99-100 per Grant MR [32 ER 534 at 539]; Ex parte Hanson (1806) 12 Ves Jun 346 at 349 per Lord (Footnote continues on next page) Bell Nettle considered as volunteers, took subject to equities. To avoid circuity of action, courts of law went further, by holding134 that property the subject of a trust or assignment would not pass at all β unless the bankrupt had even "the most remote possibility of interest" in the property135. Consistently with this history, the reference to property "held by the bankrupt in trust" in successors to s 15(1) of the Bankruptcy Act 1869 (32 & 33 Vict c 71), such as s 116(2) of the Bankruptcy Act 1966, is understood to mean held on trust solely for another person136. Accordingly, where a trustee in bankruptcy or other administrator assumes control of the property of a bankrupt, the trustee in bankruptcy or assignee takes the bankrupt's property subject to equities, but otherwise as property divisible amongst creditors137. That allows for the payment of creditors out of property held on trust to the extent that the bankrupt has a beneficial interest in the trust assets, and thus to the extent of the bankrupt's right of indemnity. The position under the Corporations Act is comparable. The liquidator of a company assumes control of the company's assets subject to equities138, and, accordingly, must deal with assets held by the company as trustee in accordance with the terms of trust. But to the extent that the company has a beneficial Erskine LC [33 ER 131 at 132]; Turner v Harvey (1821) Jacob 169 at 173-174 per Lord Eldon LC [37 ER 814 at 816]. 134 Scott v Surman (1742) Willes 400 at 402-403 per Willes LCJ [125 ER 1235 at 1236-1237]; Winch v Keeley (1787) 1 TR 619 at 622-623 per Ashhurst J [99 ER 1284 at 1286]; Boddington v Castelli (1853) 1 El & Bl 879 at 885 per Parke B [118 ER 665 at 667]. 135 Carpenter v Marnell (1802) 3 Bos & Pul 40 at 41 per Lord Alvanley CJ [127 ER 23 at 24]. See also Gladstone v Hadwen (1813) 1 M & S 517 at 526-527 per Lord Ellenborough CJ [105 ER 193 at 197]; Carvalho v Burn (1833) 4 B & Ad 382 at 393-394 per Littledale J [110 ER 499 at 503]; Britten v Perrott (1834) 2 C & M 597 at 602 per Lord Lyndhurst CB, 602 per Parke B [149 ER 898 at 901]. 136 Octavo (1979) 144 CLR 360 at 370 per Stephen, Mason, Aickin and Wilson JJ. 137 Westpac Banking Corporation v Queensland [2016] FCA 269 at [20]-[21] per Edelman J. See also In re Richardson; Ex parte Governors of St Thomas's Hospital [1911] 2 KB 705 at 713-714 per Fletcher Moulton LJ. 138 See generally Glenn, The Law Governing Liquidation (1935) at 449-451 Β§312, 764-768 Β§532; Zwieten (ed), Goode on Principles of Corporate Insolvency Law, 5th ed (2018) at 119-120 [3-05]; Murray and Harris, Keay's Insolvency: Personal and Corporate Law and Practice, 9th ed (2016) at 446-447 [14.10]-[14.15]. Bell Nettle interest in the trust assets, as it has by reason of the company's right of indemnity in respect of properly incurred trust obligations, the trust assets are property of the company available for the payment of creditors. In Re Suco Gold, King CJ articulated139 the point thus: "The liquidator is bound by the provisions of s 292 [of the Companies Act, now s 556 of the Corporations Act] with respect to the payment of the company's debts. He must therefore endeavour to pay the debts in accordance with the order of priority set out in that section. To the extent that each priority debt has been incurred in the performance of a particular trust he should have recourse to the property of that trust for the purpose of paying it. If there is a residue of assets of a particular trust after payment of the priority debts incurred in the performance of that trust, that residue should be applied to the payment of the other debts applicable to that trust. If there is a deficiency in the assets of a particular trust, the non-priority debts applicable to that trust would have to rank pari passu. The unpaid balance would, of course, rank for dividend out of the general assets of the company". As Allsop CJ recently observed140 in effect in Jones v Matrix, there is therefore no reason in principle or by reference to text or context why the statutory order of priorities should not be followed in the distribution of the proceeds of the trustee's right of indemnity among trust creditors. Nor, given the wide-spread use of companies as trustees of business trusts in Australia, and Parliament's re-enactment of s 292 of the Companies Act in effect as s 556 of the Corporations Act against the background of the decision in Re Suco Gold and its general acceptance, is there any reason to suppose that it is not what Parliament intended. Section 556 should be understood as applicable to such corporations and their property of all kinds. Complications may arise in cases where a corporate trustee has carried on business as trustee of more than one trust or as trustee of a trust and on its own account. But the solution proposed141 by King CJ β of construing s 556 in such circumstances as if the liquidator of the corporate trustee held separate funds, each for a different group of creditors β coheres to the law of trusts and has common sense to commend it. It may not provide the whole of the answer where, for example, expenses, such as the wages and salaries of employees, have 139 (1983) 33 SASR 99 at 109-110. 140 (2018) 260 FCR 310 at 338-339 [108]. 141 Re Suco Gold (1983) 33 SASR 99 at 110. Bell Nettle been incurred by a company partially on one account and partially on another. But as experience shows, situations of that kind are not insuperable142. As Allsop CJ concluded in Jones v Matrix143, they fall to be resolved by the application of principle to the text of the legislation in the particular circumstances of each case. Conclusion It should be understood that Amerind's right of indemnity as such was not "property comprised in or subject to a circulating security interest". It could not be so, because it was not a "circulating asset" within the meaning of s 340 of the PPSA and thus any security over it was not a "circulating security interest" as defined in s 51C of the Corporations Act, there being no suggestion that the Bank gave Amerind express or implied authority to transfer the right of indemnity in the ordinary course of business. The inventory itself, however, was property of the company, being property "comprised in or subject to a circulating security interest" created by Amerind in favour of the Bank. To the extent of Amerind's right of indemnity, that property would have yielded proceeds of realisation from which Amerind would have been entitled to discharge properly incurred trust liabilities. The inventory was property of Amerind of which the receivers took possession or assumed control pursuant to the circulating security interest which Amerind created over the inventory in favour of the Bank. That property yielded proceeds of realisation from which the receivers were, as Amerind would have been, entitled to discharge properly incurred trust liabilities. And in the event of a winding up, those proceeds would have been property of Amerind available for the payment of creditors in accordance with s 556(1)(e) of the Corporations Act. That is why s 433 applied. For these reasons, the appeal should be dismissed with costs. 142 See and compare Re Byrne [1981] 1 NSWLR 394; Re Byrne Australia Pty Ltd and the Companies Act [No 2] [1981] 2 NSWLR 364. 143 (2018) 260 FCR 310 at 339 [108]. Amerind Pty Ltd (receivers and managers appointed) (in liquidation) ("Amerind") carried on a business solely in its capacity as trustee of the Panel Veneer Processes Trading Trust ("the trust"). As is not uncommon, Amerind had no assets of its own, other than perhaps a nominal sum settled to establish the trust, and a right in equity to be indemnified (a right of exoneration as opposed to a right of recoupment) from the trust assets in respect of liabilities incurred in the conduct of the trust. Amerind had facilities with the Bendigo and Adelaide Bank ("the bank") secured against both fixed and circulating trust assets. On 11 March 2014, following a notice from the bank demanding repayment and terminating the facilities, Amerind's director appointed joint and several administrators to Amerind. On the same day, the bank appointed the second respondents as receivers and managers ("the receivers")144. The receivers, exercising Amerind's right of exoneration, sold the fixed and circulating assets. After paying out the bank from the sale of fixed assets, and providing for their own estimated remuneration, the receivers held a net surplus of $1,619,018 ("the receivership surplus"). That surplus comprised, in part, proceeds from the sale of the circulating assets. Determination of the issues in this appeal concerns the application of specific statutory provisions: in particular, how, if at all, s 433 of the Corporations Act 2001 (Cth), which prescribes a priority payments regime, interacts with the receivership surplus to the extent that it comprised circulating assets. Section 433 is headed "[p]roperty subject to circulating security interest β payment of certain debts to have priority" (emphasis added). Section 433 relevantly applies to "property of the company"145 over which a receiver takes possession or assumes control, and requires that employees' claims (and the Commonwealth's claims, by operation of s 560 of the Corporations Act, where it has paid out the employees' claims) have priority in the distribution of "property of the company" to which the section applies146. Employees of Amerind had their the Commonwealth. Thus, the Commonwealth submitted that s 433 applied to the receivership surplus as "property of [Amerind]" within the meaning of s 433(3), and that it had statutory priority to that surplus. entitlements partially paid out 144 The receivers did not make any substantive submissions in this appeal. 145 Corporations Act, s 433(3). 146 Corporations Act, ss 433(3)(c) and 556(1)(e), (g) and (h). The appellant, a trade creditor, submitted that s 433 of the Corporations Act did not apply to the receivership surplus on two grounds. First, the appellant noted that, as is uncontroversial, the receivers could only access the receivership surplus through the exercise of Amerind's right of exoneration. That is, there was no free-standing right to the receivership surplus, which comprised the proceeds from the sale of the trust assets, separate from the right of exoneration. On this basis, the appellant submitted that the receivership surplus represented "trust property" and not "property of [Amerind]" to which s 433 applied. Second, the appellant submitted that the receivership surplus fell outside the scope of s 433 because, among other things, s 433 only deals with circulating assets147 and the trustee's right of exoneration (the means through which the receivers could access the assets) was a fixed asset, rather than a circulating asset. Both grounds should be rejected. I agree with what Bell, Gageler and Nettle JJ have written. I write separately to explain my reasons why, at a level of principle and practice, the appeal should be dismissed with costs. In relation to the first ground, once the nature of the right of exoneration is properly understood, and regard had to the broad definition of "property" in the Corporations Act, Amerind's interest in the receivership surplus generated by its right of exoneration out of those assets was "property of [Amerind]" within the meaning of s 433. In relation to the second ground, it was not in dispute that the receivers had been appointed by the bank under debentures that were secured, at least in part, by a circulating security interest as required by s 433(2)(a). At issue was the interaction of the right of exoneration (a fixed asset) with s 433(3) of the Corporations Act. Did the fact that a fixed asset β the right of exoneration β was the gateway to the sale of circulating assets preclude the application of s 433(3) to the circulating assets? The answer is "no". The only concern of s 433(3) is that in the distribution of circulating assets, certain claims are to have priority over other claims. To the extent that the receivership surplus represented the proceeds of the sale of circulating assets, s 433(3) applied to the receivership surplus. It is not right to say, and I do not accept, that the right of exoneration is itself a circulating asset. It is convenient to deal with the appellant's two grounds separately. Before doing so, it is necessary to consider the relevant legislative provisions. 147 See Corporations Act, s 433(2)(a) read with s 51C. The Corporations Act Employees have had priority over claims secured by a floating charge, now referred to as a circulating security interest, for more than a century148. Granting employees priority over claims secured by a circulating security interest, as opposed to property secured by a fixed charge, has been criticised but no substantial change has been made. The Corporations Act provides for employees' claims to have priority over the claims of secured creditors in relation to property secured by a circulating security interest both where a receiver is appointed to that property, and where a company is in liquidation149. Although this appeal is concerned with the appointment of a receiver to such property, the conclusions apply with equal force to a liquidator dealing with that property150, and will be relevant to other cases in which the statutory order of priority fixed by the Corporations Act intersects with assets realised through an insolvent corporate trustee's right of exoneration151. For this reason, the questions raised in this appeal are significant. It is therefore necessary to set out the legislative provisions that mandate priority of employees' claims in respect of circulating security interests in relation to both receivers and liquidators. In relation to receivers, the key legislative provision is s 433 of the Corporations Act, which requires that a receiver pay out of the "property of the company" certain debts or amounts in priority to any claim for principal or interest in respect of the debentures secured by a circulating security interest. There are relevantly two interlocking provisions β s 433(2) and (3). Section 433(2) provides that the section applies where: a receiver is appointed on behalf of the holders of any debentures of a company or registered body that are secured by a circulating security interest, or possession is taken or control is assumed, by or on behalf of the holders of any debentures of a company or 148 See generally Preferential Payments in Bankruptcy Amendment Act 1897 (UK) (60 & 61 Vict c 19), s 2 read with Preferential Payments in Bankruptcy Act 1888 (UK) (51 & 52 Vict c 62), s 1. In Victoria, see Companies Act 1910 (Vic), s 208(1) and (3)(b). 149 Corporations Act, ss 433(3)(c) and 561(a). 150 By operation of Corporations Act, ss 556 and 561. 151 See, in this regard, Jones v Matrix Partners Pty Ltd; Re Killarnee Civil & Concrete Contractors Pty Ltd (In liq) (2018) 260 FCR 310. registered body, of any property comprised in or subject to a circulating security interest; and at the date of the appointment or of the taking of possession or assumption of control (in this section called the relevant date): the company or registered body has not commenced to be wound up voluntarily; and the company or registered body has not been ordered to be wound up by the Court." (emphasis added) As is apparent, s 433(2) must be satisfied before the balance of the section is engaged. And in this appeal there was no dispute that the receivers had been appointed by the bank under debentures that were secured, at least in part, by a circulating security interest, as required by s 433(2)(a)152. When s 433(2) is satisfied, then s 433(3) provides that: "In the case of a company, the receiver or other person taking possession or assuming control of property of the company must pay, out of the property coming into his, her or its hands, the following debts or amounts in priority to any claim for principal or interest in respect of the debentures: first, any amount that in a winding up is payable in priority to unsecured debts pursuant to section 562; next, if an auditor of the company had applied to ASIC under subsection 329(6) for consent to his, her or its resignation as auditor and ASIC had refused that consent before the relevant date β the reasonable fees and expenses of the auditor incurred during the period beginning on the day of the refusal and ending on the relevant date; subject to subsections (6) and (7), next, any debt or amount that in a winding up is payable in priority to other unsecured debts pursuant to paragraph 556(1)(e), (g) or (h) or section 560." (emphasis added) In short, where s 433(2) has been satisfied, s 433(3) is enlivened if the receiver takes possession of property of the company. The word "property" is relevantly defined in s 9 of the Corporations Act to mean: 152 There was also no dispute that s 433(2)(b) was satisfied. "any legal or equitable estate or interest (whether present or future and whether vested or contingent) in real or personal property of any description and includes a thing in action β¦" That definition is wide. Where a receiver takes possession of property of the company, the receiver must pay out of the property coming into his, her or its hands certain debts or amounts in priority to any claim for principal or interest in respect of the debentures. The reference to "the debentures" in s 433(3) is not unimportant; they are the same debentures referred to in s 433(2) and provide the basis for the application of the section. Moreover, the debentures are debentures of a company that are secured by a circulating security interest. Section 433(3) is concerned with the distribution of circulating assets, not any other property of the company, and requires payment of three categories of claims in priority to all other claims when distributing those circulating assets. This appeal is concerned with the third priority category, that in s 433(3)(c), which concerns employee entitlements and directs attention to s 556(1)(e), (g) or (h) of the Corporations Act. Those provisions of s 556 provide: "(1) Subject to this Division, in the winding up of a company the following debts and claims must be paid in priority to all other unsecured debts and claims: subject to subsection (1A) β next: superannuation wages, and superannuation guarantee charge payable by the company in respect of services rendered to the company by employees before the relevant date; or contributions liabilities to pay the amounts of estimates under Division 268 the Taxation Administration Act 1953 of superannuation guarantee charge mentioned in subparagraph (i); in Schedule 1 subject to subsection (1B) β next, all amounts due: on or before the relevant date; and because of an industrial instrument; and (iii) to, or in respect of, employees of the company; and in respect of leave of absence; subject to subsection (1C) β next, retrenchment payments payable to employees of the company." Section 560 of the Corporations Act, also referred to in s 433(3)(c), grants the Commonwealth the same rights to priority in a winding up as the employees would have had, as follows: a payment has been made by a company: on account of wages; or (iii) on account of superannuation contributions (within the meaning of section 556); or in respect of employment, under an industrial instrument; and leave of absence, or termination of the payment was made as a result of an advance of money by a person (whether before, on or after the relevant date) for the purpose of making the payment; then: the person by whom the money was advanced has the same rights under this Chapter as a creditor of the company; and subject to paragraph (e), the person by whom the money was advanced has, in the winding up of the company, the same right of priority of payment in respect of the money so advanced and paid as the person who received the payment would have had if the payment had not been made; and the right of priority conferred by paragraph (d) is not to exceed the amount by which the sum in respect of which the person who received the payment would have been entitled to priority in the winding up has been diminished by reason of the payment." (emphasis added) A parallel scheme applies in respect of liquidators by s 561(a) of the Corporations Act. That section provides for employee priority over claims of a secured party in relation to a circulating security interest, as follows: "So far as the property of a company available for payment of creditors other than secured creditors is insufficient to meet payment of: any debt referred to in paragraph 556(1)(e), (g) or (h) [being the employee entitlements set out above]; β¦ payment of that debt or amount must be made in priority over the claims of a secured party in relation to a circulating security interest created by the company and may be made accordingly out of any property comprised in or subject to the circulating security interest." (emphasis added) The intended effect of ss 433(3)(c) and 561(a) is that where a company is in receivership or in liquidation, employees' claims will enjoy priority over the claim of a party secured by a circulating security interest, and will be paid out of the property comprised in or subject to the circulating security interest in priority to the secured creditor. The intention of ss 433(3)(c) and 561(a) is to ensure that, as has been the case historically, employees rank before creditors secured by a circulating security interest in relation to property subject to the circulating security interest, whether a company is in receivership, or is being wound up. First ground: whether Amerind's right of exoneration, and proceeds from the exercise of that right, are "property of the company" within the meaning of s 433 The question raised by this appeal ground is whether the fact that Amerind operated as trustee of a trading trust, and could only access trust assets through its right of exoneration, took those assets (the receivership surplus) outside the scope of "property of the company" for the purposes of s 433. Put a different way, if Amerind had been conducting the business in its own right, Amerind's employees would be priority creditors under s 433(3)(c). Is the position different because Amerind conducted the business as a trustee and had a right of indemnity out of the assets of the trust to pay the employees? The question arises in the following way. The receivers, who were appointed by the bank, discharged the bank's secured debt out of Amerind's fixed assets. What remained was, relevantly, "circulating assets" over which the bank was also secured (holding a "circulating security interest" within the meaning of s 433), namely the receivership surplus. Because the bank's debt had already been discharged out of Amerind's fixed assets, there was no need to prioritise the employees' claims over the claim for principal or interest made by the bank in respect of its debt. The question remained, however, whether s 433(3) operated on the receivership surplus such that the employees' claims took priority in respect of the receivership surplus over the claims of other creditors. Here, the appellant claimed to be a secured creditor, ranking behind the bank. Did the receivers have to pay the priority creditors specified in s 433(3) out of the relevant part of the receivership surplus before the appellant? In relation to the first ground, the appellant and the Commonwealth each focused on the nature of the trustee's right of exoneration. They were right to do so. Its interaction with s 433 of the Corporations Act is key to the resolution of this appeal ground. the trustee's arm of right of exoneration The appellant contended that s 433(3) did not mandate the payment of priority creditors out of the receivership surplus. This was because, the appellant argued, indemnity, properly understood, was "no more than a right to have trust assets applied to meet trust debts" and "confers upon the trustee no interest in the trust assets themselves, or the proceeds thereof". The appellant further contended that what came into the receivers' hands when they were appointed to Amerind β the relevant "property of the company" within the meaning of s 433(3) β was the power to apply the receivership surplus to meet trust debts (in other words, a right of exoneration), rather than any proprietary interest in the receivership surplus. The appellant argued that the trustee's right or power to apply the trust fund pursuant to its right of exoneration, and the trustee's corresponding interest in the fund, could and should be separated. It followed that the receivership surplus, according to the appellant, was not "property of [Amerind]" within the meaning of s 433(3); Amerind's only "property" was its right of exoneration. That is, Amerind had no "property" in the receivership surplus and thus the receivership surplus fell outside the scope of s 433(3). The Commonwealth argued that Amerind had a proprietary interest in the receivership surplus, and that s 433 applied to Amerind's proprietary interest in the receivership surplus as "property of the company". By implication, this argument meant that ss 556 and 561 would have applied to Amerind's proprietary interest in the receivership surplus, had the question been posed by the liquidator of Amerind. These reasons will show that the Commonwealth's argument should be accepted. Trustee's right of indemnity β principles In order to show why the Commonwealth's argument should be accepted, it is necessary to first consider the origins and nature of the trustee's right of exoneration by reference to some basic principles. A trust has no legal personality, subject, of course, to statute. It is an institution developed and recognised by equity. It is an equitable obligation binding on the trustee to deal with property for the benefit of the beneficiaries (or, in limited circumstances, a particular purpose or purposes)153. The trustee is personally liable for debts or liabilities incurred in the course of transactions concerning the trust154. The liability of a trustee remains "emphatically personal", rather than being confined by the office of trustee155. That liability arises in accordance with ordinary principles of law156. Where a trustee acting within its powers incurs a debt in the course of the administration of the trust, although the trustee is ordinarily personally liable in relation to the debt, it is entitled to indemnity out of the trust estate. If the trustee has discharged the liability out of its individual property, it is entitled to reimbursement; if it has not discharged the liability, it is entitled to apply the trust property in discharging it. That is, the trustee is entitled to exoneration157. This appeal is only concerned with the right of exoneration. The sources of the trustee's indemnity (whether in the form of exoneration or recoupment) are threefold: equity, the terms of the trust instrument and statute158. In relation to the first source, even before statute159 empowered a trustee to be reimbursed out of trust property for expenses properly incurred, 153 Jones (2018) 260 FCR 310 at 320 [31]. See also Allsop, "The Nature of the Trustee's Right of Indemnity and Its Implications for Equitable Principle", paper presented to the Society of Trust and Estate Practitioners, 18 July 2012 at 154 Vacuum Oil Co Pty Ltd v Wiltshire (1945) 72 CLR 319 at 324; [1945] HCA 37; Octavo Investments Pty Ltd v Knight (1979) 144 CLR 360 at 367; [1979] HCA 61. 155 Heydon, Leeming and Turner, Meagher, Gummow & Lehane's Equity Doctrines & Remedies, 5th ed (2015) at 1150 [41-140]; Heydon and Leeming, Jacobs' Law of Trusts in Australia, 8th ed (2016) at 510 [21-02]. See also Octavo Investments (1979) 144 CLR 360 at 367, citing Vacuum Oil (1945) 72 CLR 319. 156 Jones (2018) 260 FCR 310 at 320 [34]. 157 Chief Commissioner of Stamp Duties (NSW) v Buckle (1998) 192 CLR 226 at 245 [47]; [1998] HCA 4, quoting Scott on Trusts, 4th ed (1988), vol 3A, Β§246. 158 Jones (2018) 260 FCR 310 at 321 [37]. 159 See Trustee Act 1925 (NSW), s 59(4); Trustee Act 1958 (Vic), s 36(2); Trustee Act 1936 (SA), s 35(2); Trusts Act 1973 (Qld), s 72; Trustees Act 1962 (WA), s 71; Trustee Act 1898 (Tas), s 27(2). See, in relation to the Territories, Trustee Act 1893 (NT), s 26; Trustee Act 1925 (ACT), s 59(4). See also Ford, "Trading Trusts and Creditors' Rights" (1981) 13 Melbourne University Law Review 1 at 4 fn 10. equity implied into every trust deed the same right160. In relation to the other sources, all States and Territories have legislatively provided for a trustee's reimbursement and exoneration161. The trustee has an equitable charge or lien on trust property, which gives the trustee a right to retain trust property until the right of indemnity is satisfied and, if necessary, to sell that property162. The scope of the trustee's indemnity (whether exoneration or recoupment) is confined to expenses which are "properly" or "reasonably" incurred163. In equity, there is no direct access by the creditors to the assets of the trust. However, creditors may be subrogated to the rights of the trustee against the trust assets164. Allsop CJ, in Jones v Matrix Partners Pty Ltd; Re Killarnee Civil & Concrete Contractors Pty Ltd (In liq)165, addressed the right of indemnity in the form of exoneration. Allsop CJ's description was rightly accepted by the appellant. His Honour confirmed that the right of exoneration generates a proprietary interest on the part of the trustee in the trust fund as follows166: "[T]he right (in a sense personal in that it was distinct from and superior to the interests of cestuis que trust) of the trustee to use trust assets to exonerate itself arises to meet a trust liability, and can be exercised only for that purpose. The property in the hands of the trustee remains trust 160 In re Suco Gold Pty Ltd (In liq) (1983) 33 SASR 99 at 104, citing Worrall v Harford (1802) 8 Ves Jun 4 at 8 [32 ER 250 at 252]. See also Ford, "Trading Trusts and Creditors' Rights" (1981) 13 Melbourne University Law Review 1 at 4. 161 See fn 159 above. 162 Ford, "Trading Trusts and Creditors' Rights" (1981) 13 Melbourne University Law Review 1 at 4. A court of equity may authorise the sale of assets held by the trustee so as to satisfy the right of reimbursement or exoneration: Buckle (1998) 192 CLR 226 at 247 [50]. See also Heydon and Leeming, Jacobs' Law of Trusts in Australia, 8th ed (2016) at 513 [21-04]. 163 Heydon and Leeming, Jacobs' Law of Trusts in Australia, 8th ed (2016) at 516 164 Jones (2018) 260 FCR 310 at 320 [34], citing Vacuum Oil (1945) 72 CLR 319 at 165 (2018) 260 FCR 310, in particular at 320-321 [35]-[36], 321 [39], 321-322 [42] and 166 Jones (2018) 260 FCR 310 at 324-325 [49]. property, but subject to the trustee's proprietary interest that exists for the purpose of paying the creditors. The property is not held on trust for the beneficiaries alone; the proprietary interest of the trustee is preferential to the interests of the beneficiaries, but that interest of the trustee is shaped by its purpose and origins in the trust relationship β to pay trust creditors in order to exonerate itself from those debts. The character and limits of the interest are shaped by its purpose and origins. The obligation of the trustee to use the trust assets to pay trust creditors is reflected by, and provides the creditors' right of subrogation." (emphasis added) the foundation for, The principle that the right of exoneration generates an equitable interest in the trust fund that is proprietary in nature was subsequently restated by Allsop CJ in the same decision as follows167: "Thus, in one sense, what exists can be seen to be an equitable proprietary interest or charge or lien in or over trust assets; but any enforcement by a Court of Equity is not of a security interest or a right created over the interests of the beneficiaries, but rather the enforcement by a Court of Equity of a prior proprietary interest in the trust fund to support the right of indemnity". (emphasis added) The approach of Allsop CJ to the right of exoneration, and, in particular, his explanation that the right of exoneration generates a proprietary interest in the trust fund, was consistent with a number of decisions of this Court. First, Octavo Investments Pty Ltd v Knight168 established that a trustee's right of indemnity against trust property, whether for exoneration or recoupment, for liabilities properly incurred in the performance of the trust, confers on the trustee a proprietary interest in the trust property. Second, that principle was affirmed in Chief Commissioner of Stamp Duties (NSW) v Buckle169, where the Court held that the trustee's right of indemnity (whether in the form of exoneration or recoupment) confers on the trustee a beneficial proprietary interest in the trust assets and that that interest takes priority over the interests of beneficiaries. There the Court said170: 167 Jones (2018) 260 FCR 310 at 332 [87]. 168 (1979) 144 CLR 360 at 369-370. 169 (1998) 192 CLR 226. 170 Buckle (1998) 192 CLR 226 at 246-247 [48]-[51] (footnotes omitted). "Until the right to reimbursement or exoneration has been satisfied, 'it is impossible to say what the trust fund is'. The entitlement of the beneficiaries in respect of the assets held by the trustee which constitutes the 'property' to which the beneficiaries are entitled in equity is to be distinguished from the assets themselves. The entitlement of the beneficiaries is confined to so much of those assets as is available after the liabilities in question have been discharged or provision has been made for them. To the extent that the assets held by the trustee are subject to their application to reimburse or exonerate the trustee, they are not 'trust assets' or 'trust property' in the sense that they are held solely upon trusts imposing fiduciary duties which bind the trustee in favour of the beneficiaries. The entitlement to reimbursement and exoneration was identified by Lindley LJ as 'the price paid by cestuis que trust for the gratuitous and onerous services of trustees'. The right of the trustee has been described as a first charge upon the assets vested in the trustee, as one upon the 'trust assets', and as conferring upon the trustee an 'interest in the trust property [which] amounts to a proprietary interest'. However, the starting point in the class of case under consideration is that the assets held by the trustee are 'no longer property held solely in the interests of the beneficiaries of the trust'. The term 'trust assets' may be used to identify those held by the trustee upon the terms of the trust, but, in respect of such assets, there exist the respective proprietary rights, in order of priority, of the trustee and the beneficiaries. The interests of the beneficiaries are not 'encumbered' by the trustee's right of exoneration or reimbursement. Rather, the trustee's right to exoneration or recoupment 'takes priority over the rights in or in reference to the assets of beneficiaries or others who stand in that situation'. A court of equity may authorise the sale of assets held by the trustee so as to satisfy the right to reimbursement or exoneration. In that sense, there is an equitable charge over the 'trust assets' which may be enforced in the same way as any other equitable charge. However, the enforcement of the charge is an exercise of the prior rights conferred upon the trustee as a necessary incident of the office of trustee β¦ Accordingly, we agree with the following treatment of the matter by Sheller JA: 'β¦ the trustee has a beneficial interest in the trust assets to the extent of its right to be indemnified out of those assets against personal liabilities incurred in the performance of the trust and that interest will be preferred to the beneficial interests of the cestuis que trust β¦'" (emphasis added) Third, in the later decision of Bruton Holdings Pty Ltd (In liq) v Federal Commissioner of Taxation171, this Court confirmed that a trustee's right of recoupment or exoneration is supported by a lien over trust assets which amounts to a proprietary interest therein; and in CPT Custodian Pty Ltd v Commissioner of State Revenue (Vic)172, it held that (as was held in Buckle173) it is not possible to identify the trust fund until account is taken of the right of exoneration. Accepting that the trustee's right of exoneration generates a proprietary interest in the trust fund not only is consistent with the above decisions, but is consistent with the nature of the trustee's interest in the fund as a security interest in the form of an equitable lien174. The general concept of a security involves a transaction where one person (the creditor), to whom an obligation is owed by another person (the debtor), is afforded, in addition to the personal promise of the debtor to discharge the obligation, rights exercisable against some property of the debtor in order to enforce discharge of the obligation. The concept involves a transaction, but the security is not the transaction, rather, it is the interest or aggregation of rights which arises from such a transaction. Such an interest is of a "proprietary" character: not necessarily in the sense of rights amounting to full ownership, but in the sense of rights available against a thing, and not merely against a person175. A number of cases have adopted imprecise language in describing the nature of the proprietary interest generated in the trust assets by the trustee's right of exoneration, referring to the right of exoneration as the proprietary interest176. This imprecision generates confusion: what the Commonwealth described as a "category error". The proprietary interest generated by the trustee's right of exoneration is not the right of exoneration itself. Rather, the right of exoneration generates a proprietary interest in the trust assets. To label the right of 171 (2009) 239 CLR 346 at 358-359 [43], 359 [47]; [2009] HCA 32. 172 (2005) 224 CLR 98 at 121 [51]; [2005] HCA 53. 173 (1998) 192 CLR 226 at 246 [48], citing Dodds v Tuke (1884) 25 Ch D 617 at 619. 174 See Bruton (2009) 239 CLR 346 at 358-359 [43]; Sykes and Walker, The Law of Securities, 5th ed (1993) at 192, 203; Heydon and Leeming, Jacobs' Law of Trusts in Australia, 8th ed (2016) at 513 [21-04]. 175 Sykes and Walker, The Law of Securities, 5th ed (1993) at 3. 176 See Jones (2018) 260 FCR 310 at 329 [69], 331 [79]; Re Amerind Pty Ltd; The Commonwealth v Byrnes and Hewitt (2018) 54 VR 230 at 287-288 [271]- exoneration a proprietary interest is to confuse the source of the proprietary interest with the interest itself. As has been seen, "property" is relevantly defined in s 9 of the Corporations Act as "any legal or equitable estate or interest (whether present or future and whether vested or contingent) in real or personal property of any description and includes a thing in action". The trustee's proprietary interest in the trust assets, generated by the right of exoneration, clearly falls within that broad definition of "property" and thus the phrase "property of the company" used in s 433(3) of the Corporations Act. There is, however, a further reason to reject the appellant's contentions. As stated earlier, the appellant sought to sever the right of exoneration from the trustee's corresponding interest in the trust fund. The basis for this approach was unclear, except to seek to escape the application of s 433(3). The approach should be rejected. The trustee's right of exoneration confers a proprietary interest in the trust fund which takes priority over competing interests of beneficiaries. The right of exoneration and the trustee's proprietary interest in the trust fund are inextricably linked; the trustee's interest in the fund rises and falls as debts are incurred on behalf of the trust, and satisfied out of the fund, and, of course, the right of exoneration is the basis for the existence of the trustee's fluctuating proprietary interest in the trust fund177. So much is consistent with the holding of this Court in CPT that "[u]ntil satisfaction of rights of reimbursement or exoneration, it was impossible to say what the trust fund in question was"178. Where a corporate trustee becomes insolvent, those principles do not change. Where s 433 applies, it operates, in its terms, on the trustee's interest in the trust fund to the extent that that interest is in circulating assets. Section 433 takes the property of the company as it finds it. Section 433 does not and cannot operate only on the source of the trustee's interest in the trust fund, namely the right of exoneration. In addition to ignoring the breadth of the definition of "property" in s 9 and the nature of the trustee's right of exoneration as generating a proprietary interest in the fund, the appellant's first ground of appeal also ignores that historically employees have been given priority in the event of a corporate insolvency in relation to circulating assets (formerly floating assets) as set out 177 See Re Independent Contractor Services (Aust) Pty Ltd (In liq) [No 2] (2016) 305 FLR 222 at 231 [24]. 178 (2005) 224 CLR 98 at 121 [51], citing Buckle (1998) 192 CLR 226 at 246 [48]. See also Dodds (1884) 25 Ch D 617 at 619; Jennings v Mather [1902] 1 KB 1 at 9; Heydon and Leeming, Jacobs' Law of Trusts in Australia, 8th ed (2016) at 513 above179. This Court should be slow to attribute an intention to Parliament to create two classes of employees in insolvency: those employed by a company and those employed by a corporate trustee. The appellant put forward no principled basis for such a differentiation. Thus, the Court of Appeal correctly held that s 433 operated on the trustee's proprietary interest in the trust fund and required the application of the statutory priority rules in s 433 to the receivership surplus. Appellant's other arguments The appellant identified three further matters which it contended supported its construction of s 433, and tended against the construction now adopted of that provision. None of these matters fell for determination in this appeal. However, these additional matters explain why, contrary to the submissions of the appellant, the construction adopted of s 433 (considered in light of the implications of the construction for ss 556 and 561) is a practical and sensible reading of the provision that does not generate absurd or unworkable outcomes. The answer to the issues in this appeal must recognise the wider, and different, circumstances that may and will arise in other insolvencies, particularly given the importance of trading trusts to Australia's economy180. The matters raised by the appellant were, first, the uncertainty about whether creditors generally could be paid out of the trustee's interest in the fund (the primary position of the Commonwealth) or whether only trust creditors could be paid out (the alternative position of the Commonwealth), and whether this uncertainty provided a reason to reject the Commonwealth's construction of s 433. Second, if the Commonwealth's construction of s 433 was adopted, the appellant identified two issues: how s 433 would operate on a trustee of multiple trusts; and an alleged inconsistency between the approach adopted in relation to an insolvent corporate trustee, and the position of a bankrupt trustee. A further matter raised at the hearing must also be addressed: how costs of administration, which have priority in a winding up pursuant to s 556(1)(a) of the Corporations Act, should be distributed where there is a corporate trustee of multiple trusts. Each of the additional matters is addressed below. 179 Protecting workers' claims is also a matter of international obligation: see Protection of Workers' Claims (Employer's Insolvency) Convention (1992). 180 See Jones (2018) 260 FCR 310 at 319 [29]. See also Leeming, "Trustees' Rights of Indemnity, Insolvency and Statutory Distributions to Preferred Creditors" (2018) 92 Australian Law Journal 503 at 503. Trust creditors or general creditors to be paid? Whether general creditors are to be paid was not in issue in the appeal as Amerind only had trust creditors. However, the question was important because it spoke to the interaction between the provisions of the Corporations Act mandating that employees' claims have priority in relation to property subject to a circulating security interest, and equitable principles governing the right of exoneration. The appellant contended that the nature of the right of exoneration mandated that only trust creditors could be paid out of the fund pursuant to the right of exoneration, and that this limitation on the nature of the trustee's interest in the fund was incompatible with the operation of s 433. The Commonwealth adopted two positions β what it described as its primary and alternative contentions. The Commonwealth's primary contention was that s 433 applied to Amerind's proprietary interest in the receivership surplus; but then, s 433 "swept away" the attributes of the property to which it applied, namely the limited nature of Amerind's interest in the receivership surplus. On that basis, the Commonwealth argued that Amerind's proprietary interest in the receivership surplus became "property of [Amerind]" in the hands of the receivers; and that that interest theoretically became available for distribution to creditors generally, but only in accordance with the priority rules mandated by s 433 (and in relation to liquidators, s 561). This approach was consistent with the decision in Re Enhill Pty Ltd181. The Commonwealth's alternative contention was that s 433 operated on Amerind's interest in the receivership surplus, but did not alter the limitations of that interest. Thus, the assets were only available to be applied by the receivers to meet trust debts, but only in accordance with the priority rules mandated by s 433 (and in relation to liquidators, s 561). This approach was consistent with the decisions in In re Suco Gold Pty Ltd (In liq)182 and of Allsop CJ in Jones183. The Commonwealth's alternative contention should be accepted. The position is straightforward where a right of reimbursement is exercised. The trust assets that are the subject of the right of reimbursement are 181 [1983] 1 VR 561 at 564. 182 (1983) 33 SASR 99 at 105, 107-110. 183 (2018) 260 FCR 310 at 336-337 [101]. the trustee's personal assets, which fall into the trustee's general estate, and will be divisible among creditors of the trustee generally according to the statutory rules of priority fixed by the Corporations Act, without constraint or limitation184. Relevantly to this appeal, as set out above, where a receiver is appointed to property of a corporate trustee, s 433 of the Corporations Act requires that employees' claims rank before a secured creditor in relation to the distribution of assets subject to a circulating security interest. And, as has been noted, parallel provision is made under the Corporations Act for liquidators to apply the same priority rules185. In the case of a right of exoneration, the proprietary interest of the trustee in the trust fund is shaped by its purpose and origins in the trust relationship β to pay trust creditors in order for the trustee to exonerate itself from those debts186. Circulating assets which are the subject of the right of exoneration can only be applied to satisfy trust debts and are not available for distribution to creditors generally. However, that limitation does not preclude the application of the relevant statutory priority rules β here, s 433. First, and fundamentally, s 433 of the Corporations Act does not purport to change the nature and character of property that falls under control of the receiver as property of the company187. Legal restrictions inherent in property must be respected where there is no clear statutory mandate to adopt any other approach. Having regard to the breadth of the definition of "property" in s 9, if the Commonwealth's primary position were accepted (and it should not be), property held on bare trust would be property of the corporate trustee and theoretically available for distribution to all creditors. Second, to come to a different conclusion would require the priority regime in s 433 of the Corporations Act to be interpreted as intending to alter the relationship between a trustee and beneficiaries such that the proceeds of a trustee's right of exoneration could be used to satisfy the personal liabilities of the trustee, potentially leaving trust debts unsatisfied188. There is nothing in the text of s 433, or the other provisions of the priority regime in the Corporations Act, to support such an intention. Further, to find otherwise would ignore that, 184 See Jones (2018) 260 FCR 310 at 323 [45]. 185 Corporations Act, s 561(a). 186 Jones (2018) 260 FCR 310 at 324-325 [49]. 187 See Jones (2018) 260 FCR 310 at 334-335 [97]. 188 See In re Suco Gold (1983) 33 SASR 99 at 105. in equity, creditors cannot directly get at trust assets, but instead have to be subrogated to the trustee's right of exoneration189. Multiple trusts The appellant contended that difficulties that could arise in the case of an insolvent corporate trustee of multiple trusts constituted a "powerful indication" as to why the construction of s 433 which has been adopted was not consistent with the statutory scheme, given that s 555 mandates equal treatment of debts and claims unless otherwise provided. That contention is rejected. In accordance with the earlier legal principles, a receiver or liquidator of an insolvent corporate trustee of multiple trusts should be viewed as holding multiple funds, each directed to different groups of creditors190. If Amerind had been a trustee of multiple trusts, s 433 (or s 561) would then have applied, in its terms, to each fund separately, to the extent that the fund constituted circulating assets. That approach follows from the fact that, as has been seen, there is an inherent limitation on the proprietary rights of the trustee in a trust fund. The funds can only be applied to satisfy debts incurred to creditors of the relevant trust. As just seen, there is nothing in the text of s 433 (read with s 9) that suggests that s 433 intends to sweep away the limitations and attributes of each proprietary interest of the trustee in each trust fund. Put in different terms, where the trustee is a trustee of multiple trusts, the attributes of the trustee's proprietary interests require that s 433 be applied separately to each fund because s 433 does not alter the nature of the assets such that the funds can be mixed and applied to meet the claims of non-trust creditors. Of course, it must be accepted that that approach may lead to practical difficulties and expense. In such a case, equity may need to fill the vacuum left by the failure of the statute to deal expressly with multiple trust funds191. An available mechanism is for a receiver to apply under s 424 of the Corporations Act192, or a liquidator to apply under s 90-15 of Sch 2 to the 189 See Jones (2018) 260 FCR 310 at 320 [34], citing Vacuum Oil (1945) 72 CLR 319 190 See Jones (2018) 260 FCR 310 at 337 [103]. 191 See Jones (2018) 260 FCR 310 at 337 [103]. 192 Read with the definition of "controller" in s 9 of the Corporations Act. Corporations Act193 ("the Insolvency Practice Schedule"), for directions from the court to seek to resolve any issues in relation to allocation between multiple to case. trusts. Hotchpot (like marshalling) is one possibility; an illustration of the maxim that equity is equality194. What will be appropriate will vary from case Indeed, Allsop CJ referred to the possibility of a liquidator or receiver applying the principles of hotchpot to multiple funds in Jones195, by reference to the approach of King CJ in In re Suco Gold196, which is discussed shortly. In Jones, Allsop CJ stated that197: "Complexities may arise in circumstances of multiple trusts or of trusts and activity on the corporation's own account. Considerations of, or akin to, marshalling or hotchpot may be relevant as to the payment of debts dealt with in the statutory order. But these complexities will be resolved by application of principle and the text of the legislation, in a manner reflected by the approach of King CJ in Re Suco Gold." (emphasis added) His Honour's suggestion should be adopted in the context of the application of s 433 to a trustee of multiple trusts β the trust funds should be kept separate and, where this causes practical difficulties or expense, the receiver or liquidator can apply to the court for directions. That is, equity can fill the vacuum. Notably, the statutory framework for a liquidator to apply for directions has changed. Prior to its repeal and the enactment of the Insolvency Practice Schedule198, s 479(3) of the Corporations Act allowed a liquidator to apply to the court for directions in relation to a matter arising under a winding up. Section 90-15(1) of the Insolvency Practice Schedule now provides a source of power for the court to provide directions to liquidators, and relevantly provides 193 Read with s 90-20 of Sch 2 and the definition of "officer of a corporation" in s 9 of the Corporations Act. 194 Akers v Deputy Commissioner of Taxation (2014) 223 FCR 8 at 41 [135]. 195 (2018) 260 FCR 310 at 339 [108]. 196 (1983) 33 SASR 99. 197 (2018) 260 FCR 310 at 339 [108]. 198 By the Insolvency Law Reform Act 2016 (Cth). that the court may make "such orders as it thinks fit" in relation to the "external administration" of a company199. Administration costs where multiple trusts or trust and non-trust activities A similar issue to that of multiple trusts, how costs of an administration given priority under s 556(1)(a) should be allocated where there is a trustee of multiple funds, was the subject of argument. Counsel for the appellant submitted that whatever decision the Court made had to be capable of applying in a principled way to "all scenarios that might arise in relation to a [corporate] trustee". Further, counsel for the appellant contended that there was no relevant distinction between the operation of ss 433 and 556 but argued that neither applied to a trustee's right of exoneration. Given this Court has rejected the appellant's argument that s 433 (or by implication, ss 556 and 561) cannot apply where a trustee has exercised its right of exoneration, it is necessary to address this further issue. Section 556(1)(a) of the Corporations Act provides that in the winding up of a company "expenses (except deferred expenses) properly incurred by a relevant authority in preserving, realising or getting in property of the company, or in carrying on the company's business" must be paid in priority to all other unsecured debts and claims. Two issues may arise. First, on what basis can the relevant authority (relevantly defined as a liquidator, provisional liquidator or administrator200) be paid out of the assets of the trust fund where that relevant authority has been appointed to a trustee of a trading trust? Second, how should costs of that relevant authority, properly incurred, be distributed against assets of the trust where there is a corporate trustee of multiple funds? In relation to the first question, the relevant authority can be treated as a trust creditor on the same basis as King CJ dealt with a liquidator's expenses in In re Suco Gold201. In re Suco Gold considered s 292(1)(a) of the Companies Act 1962 (SA), which provided that costs and expenses of winding up be paid 199 See Ample Source International Ltd v Bonython Metals Group Pty Ltd (In liq), in the matter of Bonython Metals Group Pty Ltd (In liq) [No 8] [2018] FCA 1614 at [89]-[93]. See also Preston, in the matter of Sandalwood Properties Ltd (2018) 36 ACLC ΒΆ18-016 at 251 [45]; Re Kelly (2018) 16 ABC (NS) 148 at 151-153 200 Corporations Act, s 556(2). 201 (1983) 33 SASR 99. "in priority to all other unsecured debts", a provision relevantly similar to s 556(1)(a) of the Corporations Act. King CJ there stated202: "The expression 'other unsecured debts' appears to imply that the costs and expenses of winding up ... are regarded by the statute as debts of the company. As the company's obligation as trustee to pay the debts incurred in carrying out the trust cannot be performed unless the liquidation proceeds, it seems to me to be reasonable to regard the expenses mentioned above as debts of the company incurred in discharging the duties imposed by the trust and as covered by the trustee's right of indemnity." (emphasis added) King CJ went on to state203: "On these principles which I have discussed, the liquidator is entitled to have recourse to the property of each trust for the purpose of meeting the costs and expenses of winding up, the petitioner's costs and the liquidator's remuneration, so far as they are incurred in relation to each trust. As there are no non-trust assets or liabilities, all the expenses are attributable to one or other of the trusts and must be apportioned between them. The liquidator will be able to make an estimate of the work and expense involved in the liquidation so far as it relates to each trust. Where no apportionment is possible, the maxim that equality is equity should provide the problem of apportionment." (emphasis added) the solution There is no reason why the approach of King CJ should not be extended to apply to an administrator or provisional liquidator of a trustee of a trading trust: their expenses should be regarded as debts of the corporate trustee which would have priority under s 556(1)(a) of the Corporations Act as expenses incurred in preserving, realising or getting in property of the company. Further, distribution of those expenses between multiple trusts with a single trustee should adopt the approach of King CJ set out above204. The expenses of the winding up could be apportioned across each trust on the basis of the extent to which the work of the relevant authority related to each trust. However, if apportioning the expenses across the multiple trusts created practical difficulties, liquidator, relevant authority provisional liquidator or administrator) should apply to the court for directions in (namely, the the 202 In re Suco Gold (1983) 33 SASR 99 at 110. 203 In re Suco Gold (1983) 33 SASR 99 at 110. 204 In re Suco Gold (1983) 33 SASR 99 at 110. relation to their costs. The statutory basis for the liquidator to apply to the court for directions has been set out above. Administrators, of course, have a further option under s 447A in Pt 5.3A of the Corporations Act to apply to the court for directions205. Adopting and adapting what Allsop CJ said in Jones206, these complexities, as well as others, can and will be resolved by application of principle and the text of the legislation, in a manner reflected by the approach of King CJ in In re Suco Gold. Bankruptcy At the hearing of the appeal, the appellant submitted that if s 433 of the Corporations Act were found to apply to proceeds of the trustee's right of exoneration, this would create a distinction between the treatment of a corporate trustee in insolvency and a trustee in bankruptcy. The appellant contended that, given trust property could not be applied to meet the debts of a bankrupt, then the same approach should apply in relation to a corporate trustee. That contention should not be accepted. The right of exoneration and the proprietary interest generated in the fund means that the "trust property" in which the trustee has an interest ceases to be aptly described as property "held on trust" but instead is property of the trustee subject to limitations as to use. So much was made clear in Buckle207. It follows that there is no apparent inconsistency between the corporate insolvency priority regime and s 116(2)(a) of the Bankruptcy Act 1966 (Cth), which provides that property held by a bankrupt in trust for another person is not property divisible amongst the creditors of the bankrupt. In Lane v Deputy Commissioner of Taxation208, Derrington J held that money to be paid from trust assets to trust creditors could not be characterised as "proceeds" within the scope of the phrase "proceeds of the property of the bankrupt" as that phrase is used in ss 108 and 109(1) of the Bankruptcy Act. That conclusion is wrong. Conclusion The first appeal ground must fail. 205 See Corporations Act, s 447A(4)(c)-(d). 206 Jones (2018) 260 FCR 310 at 339 [108]. 207 (1998) 192 CLR 226 at 246-247 [48]-[50]. 208 (2017) 253 FCR 46 at 82 [98], 88 [119], [121]. Second ground: whether an insolvent corporate trustee's right of indemnity is comprised in or subject to a "circulating security interest" within the meaning of s 433 The appellant's contention in relation to this ground was that an insolvent corporate trustee's right of indemnity falls outside the ambit of property secured by a "circulating security interest" or "comprised in or subject to a circulating security interest" under s 433(2)(a). The second appeal ground fails because it proceeds on a misconstruction of s 433(3). Section 433(2) relevantly states that the provision applies where a receiver is appointed on behalf of the holder of a debenture secured by a circulating security interest. That condition was satisfied in this appeal. It is then necessary to consider s 433(3). Section 433(3) only applies to circulating assets. The only concern of s 433(3) was and remains the application of the priority rules to those circulating assets. There is no requirement that the right of indemnity constitute a circulating asset. Again, it is necessary to start with the statute. In addition to s 433(3) of the Corporations Act, which has been extracted earlier, two further legislative provisions must be considered. Section 51C of the Corporations Act provides that a "circulating security interest" means a security interest that is: a PPSA security interest, if: the security interest has attached to a circulating asset within the meaning of the Personal Property Securities Act 2009; and the grantor (within the meaning of that Act) has title to the asset; or a floating charge." (emphasis added) The definition of "circulating asset" is to be found in the Personal Property Securities Act 2009 (Cth). Section 340 of that Act relevantly provides that "if a grantor grants a security interest in personal property to a secured party, the personal property is a circulating asset if ... the personal property is covered by subsection (5) (unless subsection (2) or (3) applies)" (second emphasis added). Among the personal property listed in s 340(5) are an account that is the proceeds of inventory209 and an authorised deposit-taking institution (bank) account210. As has been observed, the Court of Appeal held that the first requirement of s 433(2)(a), that a receiver be appointed by a holder of a debenture secured by a circulating security interest (as defined in s 51C), was satisfied and this conclusion was not challenged by the appellant. However, the Court of Appeal also held that s 433(2) contained a second requirement before the section could apply, namely, the property to be distributed had to be subject to a circulating security interest. The Court accepted an argument put forward by the Commonwealth, for the first time in that Court, that the second requirement was satisfied on the basis that, because the right of indemnity gives the trustee a proprietary interest in the trust assets, the relevant question was which, if any, of those assets were circulating assets and therefore subject to the priority rules in s 433(3). It was not necessary that the means by which the property was available to pay the company's creditors was itself subject to a circulating security interest. The Court of Appeal said that if it was wrong in relation to that finding, then to the extent that the trust assets were circulating assets, that description befitted the right of indemnity, which was a means of recourse to those same assets. On appeal to this Court, the appellant argued, consistently with its argument in relation to the first ground, that the relevant property in issue (the "property of the company") was the right of indemnity itself, not any underlying interest in the receivership surplus. The appellant maintained that the right of indemnity itself had to be comprised in or subject to a circulating security interest as defined by s 51C for s 433 to apply. The Commonwealth submitted that where the requirements of s 433(2)(a) are met, as they had been, s 433 did not contain any further relevant provisions restricting its application. During the course of oral argument, counsel for the Commonwealth correctly accepted that s 433 only applies to property subject to a circulating security interest but submitted that it was not necessary for the right of indemnity to constitute property subject to a circulating security interest. That submission should be accepted. There is no provision requiring the trustee's right of exoneration itself to constitute a circulating asset and, of course, the right is not a circulating asset. It is a fixed asset. Moreover, the text of s 433 does not require, and provides no basis to find, that the "gateway" to reach the circulating assets β the right of 209 Personal Property Securities Act, s 340(5)(b). 210 Personal Property Securities Act, s 340(5)(c). exoneration β must itself be a circulating asset. There were only two questions: did s 433(2) apply and, if so, did the receivers hold circulating assets to which s 433(3) required the application of certain priority rules. Here, of course, s 433(2)(a) was satisfied and the receivers held circulating assets in the form of the receivership surplus. It follows that the second ground of appeal must also fail. Conclusion and orders The appeal should be dismissed with costs. |
HIGH COURT OF AUSTRALIA AUSTRALIAN EDUCATION UNION APPELLANT AND DEPARTMENT OF EDUCATION AND CHILDREN'S SERVICES RESPONDENT Australian Education Union v Department of Education and Children's Services [2012] HCA 3 29 February 2012 ORDER The Chief Executive, Department of Premier and Cabinet of South Australia be substituted as respondent for the Department of Education and Children's Services in the proceedings in this Court, in the Full Court of the Supreme Court of South Australia and in the Industrial Relations Court of South Australia. Appeal allowed. Set aside the orders of the Full Court of the Supreme Court of South Australia made on 28 May 2010 and, in their place, order that: the appeal be allowed; the order of the Full Court of the Industrial Relations Court of South Australia be varied so as to answer question 1 as follows: Question 1: Did s 9(4) of the Education Act 1972 (SA), at the time that it was in force, authorise the Minister to appoint officers to be engaged as teachers, or did s 15 of the Act provide exclusively the appointment of teachers? for Answer: Section 9(4) of the Education Act 1972 (SA), at the time that it was in force, did not authorise the Minister to appoint officers to be engaged as teachers and s 15 of the Act provided exclusively for the appointment of teachers. and; the matter be remitted to the Full Court of the Industrial Relations Court of South Australia for further consideration of question 2. The respondent, the Chief Executive, Department of Premier and Cabinet of South Australia, pay the appellant's costs in this Court and in the Full Court of the Supreme Court of South Australia. On appeal from the Supreme Court of South Australia Representation R J Whitington QC with M B Manetta and A P Durkin for the appellant (instructed by Australian Education Union (SA)) M G Hinton QC, Solicitor-General for the State of South Australia with K Hodder for the respondent (instructed by Crown Solicitor (SA)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Australian Education Union v Department of Education and Children's Services Statutes β Acts of Parliament β Interpretation β Statutory powers and duties β Construction β Conferral and extent of power β Minister purportedly appointed persons as temporary "contract teachers" under s 9(4) of Education Act 1972 (SA) β Section 15 empowered Minister to appoint "officers of the teaching service" on permanent or temporary basis β Section 9(4) empowered Minister to appoint such officers and employees "in addition to" employees and officers of teaching service as Minister considered "necessary for the proper administration of this Act or for the welfare of the students of any school" β Meaning of "in addition to" β Whether Minister empowered to appoint officers as teachers under s 9(4) β Whether s 15 provided exclusively for such appointments. Words and phrases β "in addition to", "officers and employees", "officers of the teaching service". Education Act 1972 (SA), ss 9(4), 15. FRENCH CJ, HAYNE, KIEFEL AND BELL JJ. Introduction A teacher appointed as an officer of the teaching service of South Australia by virtue of s 15 of the Education Act 1972 (SA) ("the Act") may be appointed on a permanent or temporary basis and, in any event, is appointed on terms and conditions which include terms and conditions set out in Pt III of the Act. For many years the Minister of Education of South Australia ("the Minister") also appointed persons as temporary "contract teachers", purportedly under a general power to appoint "officers and employees" conferred by s 9(4), which was found in Pt II of the Act. That subsection was repealed in 20071. This appeal raises the disputed question whether it was ever open to the Minister to appoint persons as teachers under that subsection. The question arises because the long service leave entitlements of officers and employees appointed under s 9(4) were less favourable than the entitlements enjoyed by officers of the teaching service appointed under s 15. That difference in terms and conditions of appointment underpinned a long running dispute between the Australian Education Union ("the Union") and the Department of Education and Children's Services ("the Department"). In this appeal, from a decision of the Full Court of the Supreme Court of South Australia2, the Union contends, contrary to the conclusion of that Court, that s 9(4) did not authorise the Minister to appoint anybody as a teacher. The Union contends that the only mechanism which the Act provided for the appointment of teachers was that found in s 15. The Union's contention is correct. As explained in these reasons, s 9(4), properly construed, authorised the appointment of officers and employees, other than employees and officers of the Department and officers of the teaching service. The appointment of officers of the Department was authorised by s 11 of the Act. The appointment of teachers was authorised by s 15. Section 9(4) did not apply to the appointment of officers of "the teaching service". The appeal against the decision of the Full Court of the Supreme Court should be allowed. 1 That subsection was replaced by s 101B(1) of the Act. 2 Australian Education Union v Department of Education and Children's Services (2010) 270 LSJS 47. Hayne Bell Statutory framework and legislative history The Act was enacted after a detailed review of the Education Act 1915- 1971 (SA), which it repealed. Part II of the Act, entitled "The Minister and the Department", devolved on the Minister the "general administration of [the] Act and the administration and control of the teaching service."3 The distinction between the "general administration of [the] Act" and the "administration β¦ of the teaching service" is significant. It informs the purpose of the general power of appointment of employees and officers which was conferred on the Minister by s 9(4) of the Act and supports the distinction between that power and the specific power of appointment of teachers to the teaching service conferred by Section 9 set out a miscellany of powers conferred upon the Minister including the establishment and maintenance of government schools4 and their temporary or permanent closure or sale5, the establishment of institutions for the proper education and training of teachers6, the establishment and maintenance of accommodation for teachers or students7, the acquisition of land for the purposes of the Act8, and the provision of transport for children to and from any school9. The Minister was also empowered to establish any school, college or centre for the purpose of providing, inter alia, technical education10. The Department, which had already been established under the Public Service Act 1967 (SA) ("the Public Service Act"), was continued in existence by s 11(1) of the Act. The office of Director-General of Education as the permanent head of the Department was established. Section 11(4) provided: 3 Act, s 6. 4 Act, s 9(1). 5 Act, s 9(3). 6 Act, s 9(5). 7 Act, s 9(6). 8 Act, s 9(7). 9 Act, s 9(8). 10 Act, s 9(9). Hayne Bell "There shall be such other officers of the Department as may be necessary or expedient for the proper administration of this Act." It was amended in 1986 to read11: "There shall be such employees in the Department as may be necessary or expedient for the proper administration of this Act." Section 9(4), as originally enacted, provided: "The Minister may appoint such officers and employees (in addition to the officers of the Department and of the teaching service) as he considers necessary for the proper administration of this Act or for the welfare of the students of any school." The subsection was amended in 1986 to read12: "The Minister may appoint such officers and employees (in addition to the employees and officers of the Department and the teaching service) as he considers necessary for the proper administration of this Act or for the welfare of the students of any school." The power so conferred was wide but limited to the purposes expressed in the words "the proper administration of the Act" and "for the welfare of the students at any school." The latter term, it may be said immediately, does not on its face or in context, relate to the provision of teachers at a school. The term "officers of the Department", in parentheses in the original version of s 9(4), referred to officers appointed pursuant to Div IV of the Public Service Act. They were officers of the kind referred to in s 11(4) of the Act. The replacement of that term by "employees and officers of the Department" followed the repeal of the Public Service Act and its replacement by the Government Management and Employment Act 1985 (SA). The latter Act did not reproduce the definition of "officer" found in the Public Service Act but defined "employee" relevantly as "a person appointed to the Public Service 11 The amendment was effected by the Education Act Amendment Act (1986) (SA), 12 The amendment was effected by the Education Act Amendment Act 1986 (SA), s 5. Hayne Bell (including a Chief Executive Officer)"13. The class designation "employees and officers of the Department" appearing in parentheses in s 9(4) as amended alluded to persons appointed to the Public Service under the new regime. Part III of the Act was entitled "The Teaching Service". "[T]he teaching service" was defined as the teaching service "constituted" under Pt III of the Act14. Division I of Pt III, entitled "Appointment to the Teaching Service", consisted only of s 15. The relevant parts of that section were15: "(1) Subject to this Act, the Minister may appoint such teachers to be officers of the teaching service as he thinks fit. (2) An officer may be so appointed on a permanent or temporary basis. (5) No officer appointed on a permanent basis (other than an officer appointed on probation) shall be dismissed or retired from the teaching service except in accordance with the provisions of this Act. (6) An officer appointed on a temporary basis or appointed on probation shall hold office at the pleasure of the Minister." A "teacher" was defined in s 5 of the Act, unless the contrary intention was shown, as "any person who gives, or is qualified to give, instruction at any Government or non-Government school". That definition should be read with Pt IV of the Act which provided for the registration of teachers. Section 63(1)(a) prohibited any unregistered person, without the authority in writing of the Teachers Registration Board, from holding "any office or position in a Government or a non-Government school in which he is required to administer 13 Government Management and Employment Act 1985 (SA), s 4 and Pt 3, Div 5 entitled "Employment in the Public Service". 14 Act, s 5. 15 By operation of the Statutes Amendment (Public Sector Employment) Act 2006 (SA), s 31(2) and (3), the term "the employing authority" was substituted for "the Minister" in s 15(4) and (6) of the Act respectively. That term refers to the Director-General or a person designated for the purpose by proclamation: see Act, s 5 definition of "employing authority". The change occurred after the end of the period relevant to this appeal, being 14 December 1972 to 21 February 2005. Hayne Bell or teach any course of instruction in primary or secondary education". The power conferred by s 15 to appoint teachers was therefore linked to the protective regulatory provisions of Pt IV of the Act. In the Second Reading Speech for the Education Bill which became the Act, the Minister made no specific reference to s 9. Of s 15 he said16: "Clauses 15 to 17 provide for the teaching service. Under clause 15, an officer appointed on a temporary basis or appointed on probation shall hold office at the pleasure of the Minister." There was nothing in the Second Reading Speech to support the proposition that the Act authorised the appointment of persons as teachers in government schools who were not officers of the teaching service. The other provisions of Pt III covered retrenchment and retirement of officers17, long service leave18, retiring age19 including the mandatory retiring age, which was 65 years20, discipline21, and the classification of officers22. Part III of the Act, as enacted, also established a "Teachers Salaries Board", abolished in 199123, to fix maximum and minimum salaries and other remuneration payable to officers of the teaching service24 and a "Teachers Appeal 16 South Australia, House of Assembly, Parliamentary Debates (Hansard), 15 November 1972 at 3108. 17 Act, Div II, ss 16-17. 18 Act, Div III, ss 18-24. 19 Act, Div IV, s 25. 20 Act, s 25(1). 21 Act, Div V, ss 26-27. 22 Act, Div VI, ss 28-33. 23 Industrial Conciliation and Arbitration (Commonwealth Provisions) Amendment Act 1991 (SA), s 53(b). 24 Act, s 37. Hayne Bell Board"25 ("the Board") to exercise such jurisdiction as might be conferred upon it by the Act26. The Board could, inter alia, hear appeals against a decision by the Director-General to take disciplinary action against an officer or by the Minister to dismiss an officer27. As appears from the preceding, the power of appointment under s 15 was linked not only to the regulatory provisions of Pt IV of the Act but to the statutory scheme in Pt III providing for the terms and conditions of officers of the teaching service. Of particular significance from the perspective of the Union was the provision, in Pt III, made under s 22(2) of the Act, for long service leave entitlements where there had been an interruption of service. In effect, s 22(2) provided that, where the service of a person employed under the Act was interrupted otherwise than by resignation or dismissal for misconduct and the person was subsequently appointed as an officer of the teaching service within two years after the date of that interruption, that person's service before and after the interruption would be taken into account as though that person's service were continuous. The benefit of s 22(2) appears to extend to temporary teachers appointed under successive contracts pursuant to s 15. Procedural history In May 2003, the Vice President of the South Australian Branch of the Union wrote to the Minister concerning the appointment of contract teachers under s 9(4) and the impact of "appointment type" on long service leave entitlements. The Union asked that in future contract teachers be appointed as "officers of the teaching service" on a temporary basis pursuant to s 15(2) of the Act. The Government ultimately responded favourably the Union's representations. On 21 February 2005, the Director of Human Resources and Industrial Relations Services at the Department wrote to the Union advising that, in future, contract teachers would be known as "temporary teachers" and "temporary relieving teachers" and would be appointed under s 15 of the Act on a temporary basis. 25 Act, s 45. 26 Act, s 49. 27 Act, s 26. Hayne Bell In spite of that change of position, the Department and the Union continued to dispute the entitlements of those teachers previously purportedly appointed under s 9(4). On 5 March 2007, the Secretary of the South Australian Branch of the Union wrote to the Industrial Registrar of the Industrial Relations Commission of South Australia ("the Commission") notifying a dispute and requesting a voluntary conference pursuant to s 200 of the Fair Work Act 1994 (SA). The Union asserted in its notice that the power to appoint teachers, including temporary teachers, stemmed from s 15 of the Act and that they were all officers of the teaching service and entitled to the benefit of s 22(2) of the Act. On 21 August 2007, the Commission referred two questions of law to the Industrial Relations Court of South Australia ("the IRC") for determination. The questions of law were: "1. Did section 9(4) of the Education Act 1972, at the time that it was in force, authorise the Minister to appoint officers to be engaged as teachers, or did section 15 of the Act provide exclusively to [sic] the appointment of teachers? In consequence of the court's answer to question 1, are the long service leave entitlements of any teachers purportedly appointed pursuant to section 9(4) governed by the provisions of the Public Sector Management Act 1995, or Division 3 of Part 3 of the Education Act 1972?" A statement of agreed facts was filed in the IRC. Additions to the statement of agreed facts filed related to two named persons who had been appointed as contract teachers purportedly pursuant to s 9(4) of the Act. On 29 May 2009, the Full Court of the IRC concluded that s 9(4) had provided authority for the Minister to appoint officers to be engaged as teachers independently of s 15 of the Act28. The Union appealed to the Full Court of the Supreme Court. The Full Court of the Supreme Court (Nyland, Gray and Vanstone JJ) dismissed the appeal on 28 May 2010 and ordered that the Union pay the 28 Australian Education Union v Department of Education and Children's Services [2009] SAIRC 37 at [44] per Jennings SJ and Gilchrist J, [59] per McCusker J. Hayne Bell Department's costs of the appeal29. The respondent in the IRC and in the Full Court of the Supreme Court was designated as the "Department of Education and Children's Services". It was also so designated in the proceedings in this Court. The Department is not a body corporate. It was not in dispute that the proper respondent, both in this Court and in the courts below, was the Chief Executive, Department of Premier and Cabinet. Special leave to appeal to this Court was granted on 11 February 2011 (Gummow, Crennan and Kiefel JJ). Grounds of appeal There were two grounds of appeal: The Court erred in law in holding that s 9(4) of the Education Act 1972 (SA) authorised the Minister of Education to appoint officers to be engaged as teachers independently of s 15 of the Act and ought to have found that the Minister was never empowered to appoint teachers under s 9(4) of the Act. The Court erred in law in permitting a miscellaneous legislative provision to be used by the Minister so as to permit the Minister to appoint teachers in public schools without having to observe the rights and obligations attaching to such appointments under Part III of the Act." The decision of the IRC Jennings SJ and Gilchrist J published a joint judgment30. Their reasoning involved the following steps: Although s 15 of the Act permits the Minister to appoint members of the teaching service on a temporary basis, it does not necessarily give the Minister all of the flexibility necessary to fulfil the Minister's obligations under the Act31. 29 Australian Education Union v Department of Education and Children's Services (2010) 270 LSJS 47. 30 Australian Education Union v Department of Education and Children's Services [2009] SAIRC 37. 31 [2009] SAIRC 37 at [39]. Hayne Bell Part III of the Act confers detailed rights on members of the teaching service which might be thought unnecessarily prescriptive in respect of the ad hoc appointment of relief teachers in diverse circumstances32. The width and generality of the powers conferred upon the Minister by Pt II of the Act indicated a parliamentary intention to empower the Minister, subject to the Act, to do whatever is necessary to make proper provision for primary and secondary education in South Australia33. Jennings SJ and Gilchrist J held that s 9(4) required a "generous construction that allows for flexibility."34 McCusker J, in a separate concurring judgment, saw s 9(4) as a provision supplementary to s 15 and held that the two provisions served distinct and different purposes which were not repugnant to each other35. McCusker J concluded that s 9(4) of the Act authorised the Minister to appoint teachers to schools36. The IRC answered the first question posed to it as follows: "Section 9(4) of the Education Act 1972, at the time it was in force, authorised the Minister to appoint such teachers as he considered necessary for the proper administration of the Act or for the welfare of the students of any school independently of s 15 of the Act." The parties were given liberty to apply as to question 2. 32 [2009] SAIRC 37 at [40]. 33 [2009] SAIRC 37 at [41]. 34 [2009] SAIRC 37 at [41]. 35 [2009] SAIRC 37 at [57]-[58] citing Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom (2006) 228 CLR 566 at 571 [2] per Gleeson CJ, 592 [70] per Gummow and Hayne JJ; [2006] HCA 50. 36 [2009] SAIRC 37 at [59]. Hayne Bell The decision of the Full Court of the Supreme Court The principal judgment in the Full Court was written by Gray J, with whom Nyland J agreed. Vanstone J wrote a separate concurring judgment. The essential elements of Gray J's reasons were as follows: Section 9(4) was auxiliary to s 15. The powers conferred by the two provisions did not relevantly deal with the same subject matter37. Section 9(4) was designed to allow persons to be appointed who were considered necessary for the education scheme to function, that is, additional to the officers of the Department and the teaching service. The broad powers it conferred upon the Minister indicated that Parliament intended to ensure that the Minister was equipped to do what was necessary for the provision of primary and secondary education in the The purpose of s 9(4) was to provide a power to make additional appointments to address the diverse and unpredictable employment requirements necessary for the proper administration of the Act and the welfare of students. There was no good reason why "teachers" should be excluded from that process39. The section contemplated varying job specifications. An appointee under s 9(4) could contract out of the obligation to serve anywhere else in the State, the requirement for probation could be abrogated, the contract need not be "at the pleasure of the Minister", and the retirement age applicable to Pt III teachers need not apply40. Vanstone J found the construction question "finely balanced." However, in her Honour's opinion, there was nothing in the language of the section or the 37 (2010) 270 LSJS 47 at 53 [29]. 38 (2010) 270 LSJS 47 at 53-54 [30]. 39 (2010) 270 LSJS 47 at 54 [31]. Gray J also referred at 53 [27]-[28] to obiter observations in Cusack v Parsons (1988) 48 SASR 364 that contract teachers could be appointed under s 9(4) and were often young recently qualified teachers awaiting appointment as officers of the teaching service. 40 (2010) 270 LSJS 47 at 54 [32]. Hayne Bell structure of the Act to indicate that the Minister was to be restricted to appointing teachers under s 15. The words "in addition to" in s 9(4) were conjunctive or The approach to construction The disposition of this appeal turns upon the correct construction of s 9(4). The process of construction begins with a consideration of the ordinary and grammatical meaning of the words of the provision having regard to their context and legislative purpose. According to the construction adopted by the IRC and the Full Court of the Supreme Court, the power conferred by the subsection extended to the appointment of persons as teachers. On the construction for which the Union contends, the power did not extend to such appointments. There are textual and purposive indicators to be considered in determining the preferred construction. Also applicable is s 22(1) of the Acts Interpretation Act 1915 (SA) which relevantly provides: "where a provision of an Act is reasonably open to more than one construction, a construction that would promote the purpose or object of the Act (whether or not that purpose or object is expressly stated in the Act) must be preferred to a construction that would not promote that purpose or object." The reasoning in the IRC was informed by the view that it was desirable that the Minister have flexibility in the appointment of teachers and that Pt III of the Act might be "unnecessarily prescriptive"42 in its application to the ad hoc appointments of relief teachers in diverse circumstances. This approach, with respect, emphasised a judicially constructed policy at the expense of the requisite consideration of the statutory text and its relatively clear purpose. In construing a statute it is not for a court to construct its own idea of a desirable policy, impute it to the legislature, and then characterise it as a statutory purpose43. The 41 (2010) 270 LSJS 47 at 58 [52]. 42 [2009] SAIRC 37 at [40] per Jennings SJ and Gilchrist J. 43 Sovar v Henry Lane Pty Ltd (1967) 116 CLR 397 at 405 per Kitto J; [1967] HCA 31; Baker v Campbell (1983) 153 CLR 52 at 104 per Brennan J; [1983] HCA 39; Miller v Miller (2011) 242 CLR 446 at 459-460 [29] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ; [2011] HCA 9; Momcilovic v The Queen (2011) 85 ALJR 957 at 1064-1065 [441] per Heydon J; 280 ALR 221 at 349; (Footnote continues on next page) Hayne Bell statutory purpose in this case was to be derived from a consideration of the scheme of the Act as a whole, the respective functions of Pts II and III of the Act, and the regulatory requirements of Pt IV of the Act. The Full Court of the Supreme Court, like the IRC, emphasised what their Honours considered to be the benefits flowing from the Minister's construction of s 9(4). Those benefits, expressed in terms of flexibility, were elevated to a statutory purpose. That purpose lacked a foundation in the text of the Act. Textual and contextual indicators of the respective purposes of s 9(4) and s 15 are: Section 9(4) provided for the appointment of "officers and employees". Section 15, on the other hand, provided for the appointment of "teachers" as "officers of the teaching service". Section 15, like s 9(4), conferred a power of appointment of "officers" but it was a specific power to appoint teachers. The words in parentheses in s 9(4) indicated that appointments under that power were additional to appointments of employees and officers of the Department and the teaching service. The Department argued that the words "in addition to" meant "as well as" and should be read as supplementary, conjunctive or expansionary in their intended operation44. However, that synonym begs the essential constructional question. It does not answer it. The appellant's proffered construction of the words "in addition to" as words of limitation used in the sense of "apart from" accords with the division of ministerial responsibilities between "the general administration of [the] Act and the administration and control of the teaching service" reflected in s 6. The "teaching service" was, by definition, constituted under Pt III and consisted of teachers appointed under s 15(1)45. [2011] HCA 34; AB v Western Australia (2011) 85 ALJR 1233 at 1241 [38]; 281 ALR 694 at 703-704; [2011] HCA 42. 44 Reference was made to Wheeler v Kelly (1956) 94 CLR 206 at 212; [1956] HCA 5 in which the Court so construed the words "in addition to" in a quite different statutory setting β the Crown Lands Consolidation Act 1913-1948 (NSW). 45 Act, s 5. Hayne Bell The appointment power under s 15 provided for permanent, temporary and probationary appointments. It therefore encompassed the power to make short-term appointments. The Solicitor-General also accepted that it would authorise part-time employment. The appointment of teachers under the Act involved the exercise of a specific power linked to a statutory scheme reflected in Pt III providing for their terms and conditions and requiring, by operation of Pt IV, that persons appointed be registered as teachers or otherwise have the authority of the Board to teach. The Act, in defining the responsibilities of the Minister, drew a distinction between the "general administration of [the] Act" and the "administration and control of the teaching service." That distinction supports the proposition that s 9(4) and s 15 served different purposes under the Act. The textual and contextual indicators and the purpose of the statutory scheme lead to the conclusion that the authority of the Minister to appoint teachers under the Act was at all times to be found in s 15 and that s 9(4) did not authorise such appointments. Even if it were possible to characterise the power conferred upon the Minister by s 15 as a specific power carved out of a more general power conferred by s 9(4), the interpretative principle enunciated in Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia46 would require that the general power be read as not applying to the subject matter of the specific power47. The Solicitor-General for South Australia submitted that the Court should have regard to a statement made by the Minister in the Second Reading Speech for the Education (Part-time Remuneration) Amendment Act 1991 (SA). That Act introduced a new s 101A into the Act which provided for rates of remuneration to be paid to part-time officers and employees. In the course of his 46 (1932) 47 CLR 1; [1932] HCA 9. 47 (1932) 47 CLR 1 at 7-8; Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom (2006) 228 CLR 566 at 589 [59] per Gummow and Hayne JJ; Plaintiff M70/2011 v Minister for Immigration and Citizenship (2011) 85 ALJR 891 at 907 [50]-[51] per French CJ, 913-914 [84] per Gummow, Hayne, Crennan and Bell JJ, 940 [236] per Kiefel J; 280 ALR 18 at 39-40, 48, 84; [2011] HCA 32. Hayne Bell Second Reading Speech the Minister referred to "casual teachers who, unlike the permanent teachers appointed under section 15 of the Education Act ('officers of the teaching service'), are engaged under contracts of service pursuant to section 9 (4) of the Act."48 In South Australia the use of extrinsic materials in the construction of South Australian statutes is governed by the common law, there being no equivalent in the Acts Interpretation Act 1915 (SA) to s 15AB of the Acts Interpretation Act 1901 (Cth)49. There is no basis at common law or otherwise for resorting to a ministerial statement, about the effect of a law in force at the time of the statement, as an aid to the interpretation of that law. It was not contended before this Court that the appointment of a person as a contract teacher made in mistaken reliance upon the existence of a power to make such an appointment under s 9(4) could not be a valid exercise of the appointment power under s 15. The issue was not raised by the first question considered by the IRC. That question went to the scope of the power conferred by s 9(4) and the exclusivity or otherwise of the power conferred by s 15. The conclusion that question 1 was erroneously answered by the Full Court of the IRC does not involve a conclusion about the validity of appointments purportedly made under s 9(4). A mistake by an administrative decision-maker as to the source of his or her power to make a decision does not necessarily invalidate the decision if it is able to be supported by another source of power. Whether it can be supported by the other source of power will depend upon whether that power is subject to requirements which the decision-maker has failed to meet because of his or her belief as to the source of the power or for some other reason. As Heydon J said in Eastman v Director of Public Prosecutions (ACT)50: 48 South Australia, House of Assembly, Parliamentary Debates (Hansard), 15 November 1990 at 1943. 49 Gerhardy v Brown (1985) 159 CLR 70 at 104 per Mason J, 111 per Wilson J; [1985] HCA 11; Hoare v The Queen (1989) 167 CLR 348 at 360-361; [1989] HCA 50 (2003) 214 CLR 318 at 362 [124]; [2003] HCA 28. See also R v Bevan; Ex parte Elias and Gordon (1942) 66 CLR 452 at 487 per Williams J; [1942] HCA 12; Lockwood v The Commonwealth (1954) 90 CLR 177 at 184 per Fullagar J; [1954] HCA 31; Brown v West (1990) 169 CLR 195 at 203; [1990] HCA 7; Johns v Australian Securities Commission (1993) 178 CLR 408 at 426 per Brennan J, 469 per McHugh J; [1993] HCA 56; Newcrest Mining (WA) Ltd v The Commonwealth (1997) 190 CLR 513 at 618 per Gummow J; [1997] HCA 38; Mercantile Mutual (Footnote continues on next page) Hayne Bell "If the maker of an administrative decision purports to act under one head of power which does not exist, but there is another head of power available and all conditions antecedent to its valid exercise have been satisfied, the decision is valid despite purported reliance on the unavailable head of power." (footnote omitted) Conclusion For the preceding reasons the appeal should be allowed. The following orders should be made: The Chief Executive, Department of Premier and Cabinet of South Australia be substituted as respondent for the Department of Education and Children's Services in the proceedings in this Court, in the Full Court of the Supreme Court of South Australia and in the Industrial Relations Court of South Australia. Appeal allowed. Set aside the orders of the Full Court of the Supreme Court of South Australia made on 28 May 2010 and, in their place, order that: the appeal be allowed; the order of the Full Court of the Industrial Relations Court of South Australia be varied so as to answer question 1 as follows: Question 1: Did s 9(4) of the Education Act 1972 (SA), at the time that it was in force, authorise the Minister to appoint officers to be engaged as teachers, or did s 15 of the Act provide exclusively for the appointment of teachers? Life Insurance Co Ltd v Australian Securities Commission (1993) 40 FCR 409 at 412 per Black CJ; Harris v Great Barrier Reef Marine Park Authority (1999) 162 ALR 651 at 656 [18] per Kiefel J. Hayne Bell Answer: Section 9(4) of the Education Act 1972 (SA), at the time that it was in force, did not authorise the Minister to appoint officers to be engaged as teachers and s 15 of the Act provided exclusively for the appointment of teachers. and; the matter be remitted to the Full Court of the Industrial Relations Court of South Australia for further consideration of question 2. The respondent, the Chief Executive, Department of Premier and Cabinet of South Australia, pay the appellant's costs in this Court and in the Full Court of the Supreme Court of South Australia. HEYDON J. Before it was repealed, s 9(4) of the Education Act 1972 (SA) ("the Act") referred to two classes of people other than the officers and employees whom the Minister might have appointed under it. One was the "officers of the Department". Relevantly to that class, s 11 as originally enacted provided for a Director-General of Education to be Permanent Head of the Education Department, for Deputy Directors-General of Education and, by s 11(4), "such other officers of the Department as may be necessary or expedient for the proper administration of this Act." The other class referred to in s 9(4) was the "officers of β¦ the teaching service". These officers were appointed pursuant to s 15. Section 15(1) might be described as a "particular" provision since it conferred power on the Minister to appoint "officers of the teaching service". Section 15(2) might also be described as a "particular" provision because it permitted officers of the teaching service to be appointed on a permanent or temporary basis. Section 15 as a whole may be described as a "particular" provision in another sense β it appeared in Pt III of the Act, which contained 40 sections and as originally enacted set up a very detailed regime that related to officers of the teaching service, rather than teachers. After its initial enactment the section was amended, but without changes material to the outcome of this appeal. The enacted regime dealt with the appointment, retrenchment and retirement of the officers of the teaching service, their long service leave entitlements, the disciplinary procedures and outcomes applicable to them, their classification and their remuneration. It also created institutions to administer this regime such as the Teachers Classification Board, the Teachers Salary Board and the Teachers Appeal Board. Section 9(4), on the other hand, was a more general provision. It conferred power on the Minister to appoint such "officers and employees" as he or she considered necessary for two purposes β the proper administration of the Act and the welfare of the students of any school. The appointment of persons other than teachers could have effectuated both purposes. Section 9(4) was one of nine subsections, each of which deals with a disparate subject. Section 9(4) was part of a provision providing for those powers and functions of the Minister which are, to use the adjective in the relevant marginal note, "general". That structure suggested that the correct construction of the Act required that s 9(4) be read as not having permitted the employment of teachers. If s 9(4) were read as having permitted their employment, the elaborate and specific structure of Pt III dealing with the officers of the teaching service who were appointed under s 15 could have been bypassed. If s 9(4) were read as having permitted the employment of teachers, two classes would have existed. The first would have comprised officers of the teaching service, whose affairs were regulated in detail. The second would have comprised other teachers β temporary teachers β whose affairs were not regulated at all. There is no statutory warrant for concluding that teachers could be appointed to government schools who were not "officers of the teaching service". Hence s 9(4), which provided that the officers and employees capable of being appointed under that provision were "in addition to the officers of the Department and of the teaching service", excluded the appointment of teachers from the powers it conferred. In that context, "in addition" meant "along with" or "apart from" or "distinct from". It is desirable to deal with three specific arguments of the respondent. First, the respondent argued that on the construction which it advocated the statutory scheme was rational because s 9(4) gave the Minister the "flexibility necessary properly to provide for the educational requirements of the students at government schools." However, the respondent did not point to any matter of practical utility flowing from the "flexibility" of s 9(4) which could not be found in s 15, and in particular s 15(2). That weakens the proposition that s 9(4) conferred the flexibility on which the respondent relied. Secondly, the respondent relied on certain statements in Cusack v Parsons. Jacobs J (with whom Millhouse J agreed) said51: "'[T]eachers' in departmental schools are not necessarily officers in the teaching service. They may be 'employees' appointed and engaged by the Minister pursuant to [s] 9(4)." And in his dissenting judgment Cox J said52: "The Act β¦ makes a clear distinction between those teachers who are officers of the teaching service and those who are not." But his Honour also suggested that s 9(4) did not permit appointments for teaching purposes53: "[Section 9(4)] envisages three categories of officers β officers of the teaching service, departmental officers, and other officers considered necessary for administration or welfare purposes β¦. It is probably also the case that the teaching service established under Pt III consists solely of officers, appointed pursuant to s 15". Decisions of the Full Court of the Supreme Court of South Australia do not bind this Court. In addition, the controversy in Cusack v Parsons did not 51 (1988) 48 SASR 364 at 366. 52 (1988) 48 SASR 364 at 374. 53 (1988) 48 SASR 364 at 375. concern the relationship between s 9(4) and s 15. The statements about s 9(4) were only dicta. The question whether teaching appointments could be made under s 9(4) has to be decided in this appeal. Even if one adopts the reading of what was said in Cusack v Parsons which was most favourable to the respondent, the answer to the question before this Court was not decided in that case. It was simply assumed. "A point of law merely assumed in an opinion, not discussed, is not authoritative."54 Thirdly, the respondent pointed to the definition of "teacher" in the original form of s 5(1) as meaning "any person who gives, or is qualified to give, instruction at any Government or non-Government school". The respondent submitted that there was thus a distinction between "teachers" and "officers of the teaching service", and that persons who were teachers without being members of the teaching service could be appointed under s 9(4). That argument is flawed, however, because the definition of "teacher" served no function in relation to s 9(4) and s 15. Its function lay in the provision by the Act of a system of registration for teachers generally β those who taught in non- government schools as well as those who taught in government schools. The distinction between "teachers" and "officers β¦ of the teaching service", though real, does not point in the direction which the respondent desires, for ss 9(4) and 15 are concerned only with government schools. For the above reasons, the first part of question 1 should be answered in the negative and the second in the affirmative. The appeal should be allowed. The respondent should pay the appellant's costs in the Full Court and in this Court. 54 Matter of Stegall 865 F 2d 140 at 142 (7th Cir 1989) per Judge Posner, Chief Judge Bauer and Judge Coffey agreeing. See also Baker v The Queen [1975] AC 774 at |
HIGH COURT OF AUSTRALIA ROSELLIE JONNELL COLE APPELLANT AND SOUTH TWEED HEADS RUGBY LEAGUE FOOTBALL CLUB LIMITED & ANOR RESPONDENTS Cole v South Tweed Heads Rugby League Football Club Limited [2004] HCA 29 15 June 2004 ORDER Appeal dismissed with costs. On appeal from the Supreme Court of New South Wales Representation: B W Walker SC with E G Romaniuk and P J Woods for the appellant (instructed D F Jackson QC with R J Carruthers for the first respondent (instructed by Colin Biggers & Paisley) No appearance for the second respondent Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Cole v South Tweed Heads Rugby League Football Club Limited Negligence β Duty of care β Appellant seriously injured by motor vehicle shortly after leaving respondent's premises in intoxicated state β Level of specificity of formulation of duty of care β Whether respondent owed duty to take reasonable care to monitor and moderate amount of alcohol served to appellant β Whether respondent owed duty of care to take reasonable care that appellant travelled safely away from respondent's premises β Whether duty of care existed to protect persons from harm caused by intoxication following deliberate and voluntary decision on their part to drink to excess β Whether duty took into account the vulnerability of some persons to alcohol consumption β Relevance of statutory provisions, creating offences in relation to conduct on club premises and requiring police to eject intoxicated persons from premises, to existence or content of duty of care owed by respondent where no allegation made of breach of statutory duty β Registered Clubs Act 1976 (NSW). Negligence β Breach of duty and causation β Appellant seriously injured by motor vehicle shortly after leaving respondent's premises in intoxicated state β Whether respondent's offer of safe transport to appellant discharged any duty owed by respondent to take reasonable steps for appellant's safety β Whether assurance by other patrons that they would look after appellant discharged any onus on respondent β Whether, assuming respondent in breach of duty to monitor and moderate consumption, breach of duty was a cause of injuries ultimately sustained β Remoteness of damage β Reasonable foreseeability. Words and phrases β "intoxication". Registered Clubs Act 1976 (NSW), ss 44A, 67A. GLEESON CJ. The appellant, having suffered personal injuries, claims that the first respondent is liable to her in damages for negligence1. In the circumstances of this case, it is of little assistance to consider issues of duty of care, breach, and damages, at a high level of abstraction, divorced from the concrete facts. In particular, to ask whether the respondent owed the appellant a duty of care does not advance the matter. Before she was injured, the appellant was for some hours on the respondent's premises, and consumed food and drink supplied by the respondent. Of course the respondent owed her a duty of care. There is, however, an issue concerning the nature and extent of the duty. To address that issue, it is useful to begin by identifying the harm suffered by the appellant, for which the respondent is said to be liable, and the circumstances in which she came to suffer that harm2. As Brennan J said in Sutherland Shire Council v Heyman3, "a postulated duty of care must be stated in reference to the kind of damage that a plaintiff has suffered". The kind of damage suffered is relevant to the existence and nature of the duty of care upon which reliance is placed. Furthermore, a description of the damage directs attention to the circumstances in which damage was suffered. "Physical injury", or "economic loss", may be an incomplete description of damage for the purpose of considering a duty of care, especially where, as in the present case, the connection between the acts or omissions of which a victim complains and the damage that she suffered is indirect. The appellant was injured as a result of being run down by a motor car on a public road. The driver of the motor car was also sued, but she is not involved in the present appeal. The respondent had no connection with the motor car, or the driver. The respondent's alleged connection with the appellant's injuries arose in the following manner. At the time she was run down (about 6.20 pm on a Sunday evening), the appellant was walking in a careless manner along the roadway. The motorist was unable to avoid her. The appellant's explanation of her careless behaviour was that she was drunk. The appellant had spent most of the day at or around the respondent's licensed club. The respondent supplied her with some, but not all, of the drink she consumed. The appellant blames the respondent for her presence on the road in an intoxicated state, and for her injuries. Two aspects of the conduct of the respondent are said to involve fault. First, it is said that the respondent supplied the appellant with drink at a time when a reasonable person would have known she was intoxicated. Secondly, it is It is convenient to refer to the first respondent as "the respondent". The second respondent took no part in the present appeal. cf Modbury Triangle Shopping Centre Pty Ltd v Anzil (2000) 205 CLR 254 at 262- (1985) 157 CLR 424 at 487. said that the respondent allowed the appellant to leave its premises in an unsafe condition, without proper and adequate assistance. Those two allegations of negligence involve disputed assumptions about the nature and extent of the duty of care which the respondent owed to the appellant. Before turning to those assumptions, however, it is important to relate the allegations to the evidence, and the findings of fact, in the case. The allegations are stated at a certain level of generality, and can only be understood sufficiently if made more concrete. It is to be noted that they involve failure to restrain or prevent the appellant from engaging in voluntary behaviour. The appellant's written submissions, filed in advance of oral argument, complained that the respondent permitted the appellant to continue to drink. In oral argument the emphasis was on supplying her with drink, but the supply was in response to her request. The second complaint was of allowing the appellant to leave the respondent's premises in a certain condition. When acts of negligence are said to consist of permitting, or allowing, an adult person to act in a manner of her choosing, even if her judgment is affected by drink, then there is a need for careful attention to the supposed duty, which must be a duty to prevent her from acting in accordance with her intentions. The appellant was a healthy woman of mature age. She did not suffer from any physical or mental disability. The evidence did not suggest that she was an alcoholic; much less that she was known to be such by the respondent. The trial judge, Hulme J, found that the appellant, "voluntarily and in full possession of her faculties, embarked on a drinking spree". The appellant's evidence was that, at a time shortly before the respondent refused to serve her further drink, which was about two hours after the respondent last sold her drink, she was "possibly intoxicated", and "talking to people, having fun". The first allegation of negligence was narrowed somewhat in the course of argument. It began as a complaint about permitting the appellant to drink on the respondent's premises, and later took the form of a complaint about supplying her with drink. The difference is not unimportant. The club premises were near a football ground. People, including the appellant, moved during the course of the day between the club premises and the playing or watching areas. The respondent was not the only source of supply of drink in the vicinity, and the appellant could well have had access to drink in addition to that which the club's employees supplied directly to her. She certainly had access to drink that had been supplied originally to her friend, Mrs Hughes. The trial judge found that the respondent was negligent in supplying the appellant with a bottle of wine at about 12.30 pm. The fact of that supply was not disputed, although the circumstances were contentious. He also found that there was a later supply of a bottle of wine by the respondent to the appellant, and that such supply also was an act of negligence. That second finding of supply was overturned by the Court of Appeal. What is to be noted, however, is that the trial judge's findings of negligence were based on supplying wine to the appellant, not upon some general permission to her to drink on the respondent's premises. As to the facts relating to supply to the appellant, the following should be noted. The appellant commenced drinking at about 9.30 or 10 am. It seems clear that she continued to drink throughout most of the day. Hulme J found that the appellant purchased a bottle of wine shortly before 12.30 pm. He also found that, at that time, it should have been apparent to employees of the respondent that she was intoxicated. The Court of Appeal reversed that finding. The Court of Appeal also concluded that, although the appellant continued to drink during the afternoon, there was no evidence to support any finding that she was served alcohol by the respondent after 12.30 pm. No successful challenge has been made to the reasoning of the Court of Appeal on those matters of fact. There was evidence as to the appellant's condition at about 2.20 pm, when she told Mrs Hughes that she would not accompany her home, but would stay on at the club. According to Mrs Hughes, the appellant was "very joyous and happy", "an embarrassment" and "totally inebriated", but capable of directing a taxi driver where to take Mrs Hughes, and of making clear her decision to remain at the club with some new-found friends. Between 12.30 pm and 2.20 pm, the appellant had the opportunity to consume a substantial quantity of wine. It is not clear how much, if any, of the bottle she bought at 12.30 pm she drank herself. She shared with Mrs Hughes during the day, but her evidence was that, just as there were times when she was giving some of her wine to Mrs Hughes, so also Mrs Hughes was giving some of her wine to the appellant. The evidence is consistent with the appellant having consumed at least a bottle of wine, and perhaps more, between 12.30 pm and 2.20 pm. That is of significance if one seeks to draw an inference as to her condition at 12.30 pm from the evidence as to her condition at At about 3 pm, the wife of the manager of the respondent's club refused to serve the appellant because of her state of intoxication. Thus, on the facts as found by the Court of Appeal, there was no evidence of any supply of alcohol by the respondent to the appellant after 12.30 pm; the evidence did not support a finding that, at the time of that supply, it should have been apparent that the appellant was then intoxicated; thereafter the appellant consumed at least a bottle of wine; she had access to drink in addition to that which the respondent supplied her; and at 3 pm, when next she sought to purchase alcohol from the respondent, she was refused supply. The harm suffered by the appellant was personal injury resulting from her careless behaviour as a pedestrian, the carelessness being attributable to her state of intoxication at 6.20 pm. The argument for the appellant must involve two steps: first, that the respondent, as a supplier of alcohol, owed her a duty to take reasonable care to protect her against the risk of physical injury resulting from her careless behaviour in consequence of her excessive consumption of alcohol; and secondly, that in the circumstances the conduct of the respondent, through its employees, amounted to a failure to take such care. The Court of Appeal rejected both of those contentions. It is unnecessary, for the purposes of the present case, to endeavour to formulate, in abstract terms, some general proposition as to whether in any, and if so what, circumstances a supplier of alcohol, in either a commercial or a social setting, is under a duty to take reasonable care to protect a consumer of alcohol against the risk of physical injury resulting from consumption of alcohol. The question is whether there was such a duty in the circumstances of this case. The practical consequences of such a duty are worth noting. Intoxication is an imprecise concept, but the laws concerning drink driving reflect the fact that a person in charge of a motor vehicle may be at risk of suffering, or causing, injury after three or four standard drinks. That is probably the best known and most clearly foreseeable risk of injury that accompanies the consumption of alcohol. The risk does not necessarily involve a high level of intoxication. There are other forms of risk of physical injury which may accompany the consumption of alcohol, even in relatively moderate amounts. Consistently with the appellant's argument, if she had gone home in the early afternoon, tripped on a doorstep, and suffered a broken wrist, she may have had a cause of action against the respondent. In R v O'Connor4, a case concerning the effect of intoxication upon criminal responsibility, Barwick CJ said: "The state of drunkenness or intoxication can vary very greatly in degree. A person may be intoxicated in the sense that his personality is changed, his will is warped, his disposition altered, or his self-control weakened, so that whilst intoxicated to this degree he does [an] act voluntarily and intentionally which in a sober state he would or might not have done. His intoxication to this degree, though conducive to and perhaps explanatory of his actions, has not destroyed his will or precluded the formation of any relevant intent. Indeed intoxication to this degree might well explain how an accused, otherwise of good character, came to commit an offence with which he is charged." Some consumers of alcohol respond quickly to its effects, while others can consume a large quantity without much change of appearance or demeanour. People in both categories may be at risk of injury if they drive a car. To impose on suppliers of alcohol a general duty to protect consumers against risks of injury attributable to alcohol consumption involves burdensome practical consequences. It provides no answer to say that such a duty comes into play only when a (1980) 146 CLR 64 at 71. consumer is showing clear signs of a high degree of intoxication. The risk sets in well before that. The appellant argued that there is a duty on a supplier to "monitor" alcohol consumption. The capacity of a supplier of alcohol to monitor the level of risk to which a consumer may be exposed is limited. If a restaurant proprietor serves a bottle of wine to two customers at a table, the proprietor may not know what either of them has had to drink previously, the proportions in which they intend to share the bottle, or what they propose to do when they leave the restaurant. Few customers would take kindly to being questioned about such matters. There is a further question of principle bearing upon the reasonableness of the imposition of a duty of the kind for which the appellant contends. Most adults know that drinking to excess is risky. The nature and degree of risk may be affected by the extent of the excess, or by other circumstances, such as the activities in which people engage, or the conditions in which they work or live. A supplier of alcohol, in either a commercial or a social setting, is usually in no position to assess the risk. The consumer knows the risk. It is true that alcohol is disinhibiting, and may reduce a consumer's capacity to make reasonable decisions. Even so, unless intoxication reaches a very high degree (higher than that achieved by the appellant in this case), the criminal and the civil law hold a person responsible for his or her acts. If, in the present case, the appellant, deliberately or negligently, had damaged the respondent's property, or caused physical injury to some third party, she would have been liable for the damage. There is no suggestion that she lacked the mental capacity to form the necessary intent. Save in extreme cases, the law makes intoxicated people legally responsible for their actions. As a general rule they should not be able to avoid responsibility for the risks that accompany a personal choice to consume alcohol. The significance of a need for coherence in legal principle and values, when addressing a proposal for the recognition of a new form of duty of care, was stressed by this Court in Sullivan v Moody5. Although there are exceptional cases, as Lord Hope of Craighead pointed out in Reeves v Commissioner of Police of the Metropolis6, it is unusual for the common law to subject a person to a duty to take reasonable care to prevent another person injuring himself deliberately. "On the whole people are entitled to act as they please, even if this will inevitably lead to their own death or injury." This principle gives effect to a value of the law that respects personal autonomy. It is not without relevance to ask what the appellant says the respondent should have done by way of monitoring and controlling her behaviour. Whatever exactly it might have been, it would seem to involve a fairly high degree of interference with her privacy, (2001) 207 CLR 562 at 581 [55]. [2000] 1 AC 360 at 379-380. and her freedom of action. It is not difficult to guess what the appellant's response would have been if the person who sold her a bottle of wine at 12.30 pm had demanded to be told whether she intended to drink it all herself. A duty to take care to protect an ordinary adult person who requests supply from risks associated with alcohol consumption is not easy to reconcile with a general rule that people are entitled to do as they please, even if it involves a risk of injury to themselves. The particular circumstances of individual cases, or classes of case, might give rise to such a duty, but we are not here concerned with a case that is out of the ordinary. Again, as a general rule a person has no legal duty to rescue another. How is this to be reconciled with a proposition that the respondent had a duty to protect the appellant from the consequences of her decision to drink excessively? There are many forms of excessive eating and drinking that involve health risks but, as a rule, we leave it to individuals to decide for themselves how much they eat and drink. There are sound reasons for that, associated with values of autonomy and privacy. Counsel for the appellant drew attention to a provision in the Registered Clubs Act 1976 (NSW) (s 44A) which makes it an offence to supply liquor to an intoxicated person. This may explain why the appellant was refused service at 3 pm. It was not argued that the appellant had a cause of action based on breach of statutory duty. On the facts found by the Court of Appeal, there was no breach. For other reasons, as well, the provision does not assist the appellant's argument. A person may be at risk of physical injury following the consumption of alcohol even if the person is well short of the state of intoxication contemplated in the provision. As has been noted, the most obvious example of such a risk is that involved in driving a motor vehicle, and the risk becomes real and significant well before a person has reached the state at which a supplier is legally obliged to refuse service. If the argument for the appellant is correct, the legal responsibility of a supplier is more onerous than that imposed by s 44A. Indeed, as a guide to the responsibilities of suppliers, s 44A would be something of a trap. It is possible that there may be some circumstances in which a supplier of alcohol comes under a duty to take reasonable care to protect a particular person from the risk of physical injury resulting from self-induced intoxication7. However, the appellant cannot succeed in this case unless there is a general duty upon a supplier of alcohol, at least in a commercial setting, to take such care. I do not accept that there is such a general duty. I would add that, if there were, it cf Desmond v Cullen (2001) 34 MVR 186 at 187. It is to be noted that the Canadian case Jordan House Ltd v Menow [1974] SCR 239 involved knowledge of the plaintiff's propensities, and placing him in a situation of known danger. is difficult to see a basis in legal principle, as distinct from legislative edict, by which it could be confined to commercial supply. When supply of alcohol takes place in a social context, there may be a much greater opportunity for appreciating the risks of injury, for monitoring the condition of the consumer, and for influencing the consumer's behaviour. In a social, as in a commercial, context, the risk of injury associated with the consumption of alcohol is not limited to cases where there is an advanced state of intoxication. Depending upon the circumstances, a guest who has had a few drinks and intends to drive home may be at greater risk than a guest who is highly intoxicated but intends to walk home. If there is a duty of the kind for which the appellant contends, it would be the degree of risk associated with the consumption of alcohol, rather than the degree of intoxication, that would be significant. In many cases the two would go together, but in some cases they would not. The consequences of the appellant's argument as to duty of care involve both an unacceptable burden upon ordinary social and commercial behaviour, and an unacceptable shifting of responsibility for individual choice. The argument should be rejected. Even if there were a duty on the respondent to take reasonable care to protect the appellant from the risk of physical injury resulting from careless behaviour in consequence of excessive consumption of alcohol, the evidence does not establish failure to take reasonable care. At the level of breach, as at the level of duty, it is material to consider that the appellant was a healthy, mature woman who, for her personal enjoyment, decided to embark upon a drinking spree. The Court of Appeal concluded that reasonableness did not require any more of the respondent, by way of care for the safety of the appellant, than was actually done. Two aspects of the conduct of the parties are of particular significance. First, the Court of Appeal found that there was no supply of alcohol by the respondent to the appellant at any time after 12.30 pm, some six hours before her injury, and that at that time there was no reason for the employee who supplied the bottle of wine to regard the appellant as significantly intoxicated. The next time the appellant sought supply from the respondent, at 3 pm, she was refused. There was no further supply to the appellant by the respondent. At about 5.30 pm, the appellant's disorderly behaviour drew attention. She was in the company of two men, who themselves were apparently sober. The manager of the respondent's club asked her to leave the premises. He offered to provide her a courtesy bus to drive her home. Alternatively, he said that, if she preferred it, he would call for a taxi to take her home. She refused both offers in blunt and abusive terms. One of her male companions told the manager to "leave it with us and we'll look after her". A few minutes later the appellant and the men left. The appellant is not complaining of damage to her liver from drinking too much. The harm she suffered was the direct and immediate consequence of her own careless behaviour as a pedestrian, about half an hour after she left the club. There is no evidence as to how she spent that half-hour. On the evidence, the club refused to sell her drink the first time she asked for it in a significantly intoxicated condition. It did not sell her any drink after that. When she was asked to leave the premises, the club offered to provide free transport home or, alternatively, to obtain a taxi to take her home. She declined those offers. Two reasonably sober male companions then said they would look after her, and she left. There is no reason to disturb the Court of Appeal's finding that the respondent took reasonable care to protect the appellant from the risk of injury that ultimately occurred. That the offers of a courtesy bus and a taxi were part of the club's procedures no doubt reflects the fact that the most obvious risk to someone who has consumed excessive amounts of alcohol is the risk associated with drink driving. It was a standard procedure for the club, even in the case of people who might have had much less to drink than the appellant. It was a useful and sensible facility for customers. The appellant's rejection of the manager's offers might have reflected the fact that her judgment was affected by drink. It might have reflected her enjoyment of the company that was available to her. It could simply have been the result of resentment at being asked to leave. There is no way of knowing. Whatever the reason for the rejection of the offers, they were made in good faith, and if they had been accepted it is unlikely that, half an hour later, the appellant would have been walking on the roadway. Furthermore, the respondent had no reason to doubt the genuineness of the intention of the two men to look after the appellant, or their capacity to do so. As to causation, the appellant's condition of intoxication was never so extreme that she was not legally responsible for her actions. The respondent did not eject her from the club onto the roadway. She refused an offer to be driven home. What then went on between the time she left the club and the time she was run down by the car is not known. Her rejection of the offer of transport to take her home would be material if an issue of causation had arisen. For the reasons already given, no such issue arises. The appeal should be dismissed with costs. McHugh 27 McHUGH J. The question in this appeal is whether a licensed club is legally responsible for the injuries sustained by a customer when she was struck by a motor vehicle shortly after leaving the club after spending most of the day drinking in the club and becoming highly intoxicated. In my opinion the club is legally responsible for the injuries suffered by the customer. The facts of the case are set out in other judgments. I need not repeat them. Because my view of the case is a dissenting one, I can state my conclusions summarily by reference to basic principle and without the necessity to embellish the judgment with an extensive discussion of case law. Basic principle in the law of negligence holds that a defendant is liable in negligence only when the defendant owed a duty of care to the plaintiff8, breached that duty, and, as a result, caused injury to the plaintiff of a kind that was reasonably foreseeable. If the defendant owed a duty of care to the plaintiff, breach of duty is determined by considering whether an act or omission of the defendant gave rise to a risk of injury to the plaintiff that, by the exercise of reasonable care, could have been foreseen and avoided. In determining the breach issue, what the defendant knew or ought to have known is critical. If the duty has been breached, the defendant will be responsible for any injury suffered by the plaintiff that, as a matter of common sense, is causally connected with the breach and is of a kind that was a reasonably foreseeable consequence of the breach. The common law has long recognised that the occupier of premises owes a duty to take reasonable care for the safety of those who enter the premises. That duty arises from the occupation of premises. Occupation carries with it a right of control over the premises and those who enter them. Unless an entrant has a proprietary right to be on the premises, the occupier can turn out or exclude any entrant β even an entrant who enters under a contractual right. Breach of such a contract will give an entrant a right to damages but not a right to stay on the premises. The duty of an occupier is not confined to protecting entrants against injury from static defects in the premises. It extends to the protection of injury from all the activities on the premises. Hence, a licensed club's duty to its members and customers is not confined to taking reasonable care to protect them from injury arising out of the use of the premises and facilities of the club. It extends to protecting them from injury from activities carried on at the club including the sale or supply of food and beverages. In principle, the duty to 8 Or, in cases where the plaintiff sues in respect of injury to a third person β such as cases under Lord Campbell's Act, or in actions for nervous shock or per quod servitium amisit β the third person. McHugh protect members and customers from injury as a result of consuming beverages must extend to protecting them from all injuries resulting from the ingestion of beverages. It must extend to injury that is causally connected to ingesting beverages as well as to internal injury that is the result of deleterious material, carelessly added to the beverages. If the supply of intoxicating alcohol by a club to a customer gave rise to a reasonable possibility that the customer would suffer injury of a kind that a customer who was not under the influence of liquor would be unlikely to suffer, the club is liable for the injury suffered by the customer provided the exercise of reasonable care would have avoided the injury. That statement is subject to the qualification that the injury must be of a kind that was reasonably foreseeable. However, it is not necessary that the club should reasonably foresee the precise injury that the customer suffered or the manner of its infliction. It is enough that the injury and its infliction were reasonably foreseeable in a general way. Mrs Cole commenced drinking at the Club around 9.30am. No later than lunchtime, signs of her inebriation were plain to anyone who cared to look. A friend of Mrs Cole said that at midday she was drunk and carrying on and arguing and that her speech was "a bit funny". At 3pm, Mrs Cole was so intoxicated that the wife of the Club manager refused to serve her any more liquor. At around 5.30pm, the manager said that she was "very, very drunk". She had to be held up. She was behaving so badly that the manager told her to leave the premises. Upon these facts, the inference is irresistible that, by early afternoon, liquor supplied by the Club had reduced Mrs Cole to such a physical and mental state that there was a real risk that she would suffer harm of some kind. The inference is also irresistible that the more she drank the more opportunities there were that she would suffer harm and the greater the likelihood that the harm would be serious. If the Club ought to have foreseen that her consumption of alcohol had reached a point that further alcohol might expose her to an alcohol- induced risk of injury, it does not matter whether she purchased the further alcohol she drank or whether her companions purchased the alcohol that she drank. The Club owed her a personal duty not to expose her to the risk of injury and, by directly supplying her, or by permitting her companions to supply her, with further alcohol, the Club breached the personal duty of care that it owed to her. It is not relevant to the breach of duty issue that her conduct in drinking an excessive amount of alcohol brought about her intoxicated condition. That conduct is relevant in assessing whether she was guilty of contributory negligence and, if so, to what extent that contributed to the harm that she suffered. It may also be relevant to the issue of causation. But it has nothing to do with the breach of duty issue. The Club had the right to control the conduct of Mrs Cole and her companions and could enforce that right in various ways including ejecting her and her companions from the Club premises. Like employers, teachers, professional persons, guardians, crowd controllers, security McHugh guards, jailers and others who have rights of control over persons, property or situations, the duty owed by clubs to entrants extends to taking affirmative action to prevent harm to those to whom the duty is owed. It may extend from the giving of advice and warnings to the forcible ejection from the premises of one or more of those present. Upon the evidence, the Club ought to have foreseen by early afternoon at the latest that Mrs Cole's drinking had the effect that she was exposed or becoming exposed to the real possibility of suffering injury and taken action to prevent it. It is not to the point, as the learned judges in the Court of Appeal thought, that this might require the Club to constantly survey the condition of those drinking alcohol on the premises. The need to monitor the conduct of others and to intervene by advice, warning or more drastic action are frequent characteristics of affirmative duties. No one could plausibly deny that, if a club's failure to monitor the conduct of persons on the premises led to a club member sustaining injury, the club would be liable in negligence for its failure. And where, as here, a club has a duty to protect an entrant from injury, it is beside the point that the discharge of its duty may require the club to monitor the conduct including the sobriety of persons on the premises. Not much experience of clubs and hotels is needed to know that, in many β probably most β of them, management is constantly monitoring the conduct and condition of those on the premises. Indeed, many clubs and hotels employ personnel for no other purpose than to monitor and, where necessary, control the conduct of patrons. Nor is it to the point that alcohol affects persons differently and that it is often very difficult to judge the extent to which a particular person is affected by liquor. Clubs, hotels, restaurants and others are held to the standard of reasonableness, not mathematical precision. It may be an axiom of business management that you can't manage what you can't measure. But in this area of management control, precise measurements are not required. It is not a question of whether the plaintiff had a blood alcohol reading of .11 or .15 or some other figure. It is a question of whether a reasonable licensee, having the opportunity to observe a customer, would think that further drinking by the customer might give rise to a real possibility that the customer would suffer harm. Nor is any question of the autonomy of Mrs Cole or the management of the Club involved in this case. The autonomy of the management is not involved because the Club, through its management, owed a duty of care to Mrs Cole and that duty extended to taking affirmative action. Questions concerning a defendant's autonomy are relevant in determining whether the defendant owed a duty of care to the plaintiff. But once it is held that a duty is owed β especially when the duty extends to taking affirmative action β the autonomy of the defendant is, to the extent of the duty, curtailed. Nor does the autonomy of Mrs Cole enter into the issue of breach of duty. It is a central thesis of the common law that a person is legally responsible for his McHugh or her choices. The common law regards individuals as autonomous beings who are entitled to make, but are legally responsible for, their own choices. But like all common law doctrines, there are exceptions. One of the most important is that a person will seldom be held legally responsible for a choice if another person owes the first person an affirmative duty of care in relation to the area of choice. An employer does not automatically escape liability for failing to lay down a proper system of work because its employee took it upon himself to do the work in a manner that caused his injury. Particularly where the duty owed extends to protecting the plaintiff, it is unlikely that the voluntary choice of the injured person will preclude a right of action. Such a choice is likely to exclude liability only when it can be said that the choice is the sole cause of the plaintiff's injury. Hence, a club that has breached its duty to protect a member from harm resulting from intoxication cannot automatically escape liability for a member's injury because the member voluntarily consumed the alcohol. If a club member's intoxication causes him or her to fall down a flight of stairs, the club cannot escape liability merely by asserting that the intoxication was self-induced. Nor does it matter whether several hundred persons were on the Club's premises at various times that day or whether Mrs Cole went out to watch the match that was being played. The Club had a duty to monitor the behaviour and condition of those present. In any event, it had numerous opportunities to observe Mrs Cole's increasingly intoxicated condition. She was at the bar buying wine at 12.20pm and 3pm and sitting at a table inside the Club between 12.20pm and 2.20pm and between 3pm and 5.30pm. Yet, despite the Club's opportunities to observe her condition, it is impossible to resist the inference that the Club took no steps to prevent her drinking, until probably close to 5.30pm when the manager told her to leave. Once the Club through its employees should reasonably have foreseen that the time had come for Mrs Cole to stop drinking if she was to avoid a serious risk of injury, the Club had an affirmative duty to take steps to prevent her drinking. The Club may have discharged its duty by advising or warning her that she had had too much to drink. Or more drastic steps may have been required. If she refused to take advice or a warning to stop drinking, discharge of the Club's duty may have required the Club to remove her from the premises. As long as the Club had acted promptly in removing her from the premises after it ought to have been aware that further drinking might result in her suffering harm, the Club could not be responsible for what happened to her outside the premises. That is because on that hypothesis the Club would not be in breach of its duty. However, the Club did not discharge its duty by refusing to sell her any more liquor at 3pm. Discharge of its duty required the Club to prevent her from drinking more alcohol after the time when it ought to have realised that any further drinking by her could result in her suffering harm. Once it became apparent that Mrs Cole was so intoxicated that her condition gave rise to a significantly increased risk of harm that she would not be exposed to if she were sober, the Club's failure to prevent her drinking more alcohol constituted a breach of the duty owed to her. It is not necessary in this McHugh case, as it might be in other cases of this kind, to specify the precise time when the breach of duty occurred. That is because, on any view of the evidence, the Club permitted her to drink long after it should have taken steps to stop her drinking and because her rising intoxication increased the chance that she would suffer injury of the kind that she did. Accordingly, sometime in the early afternoon, the Club breached the duty that it owed to Mrs Cole to take reasonable care to protect her from harm. With great respect to those who take the contrary view, it is a mistake to see the question of breach as arising at or about the time Mrs Cole was leaving the premises. What occurred at that stage is relevant to the causation issue but, in the circumstances of this case, it has nothing to do with the breach issue. The Club was in breach of its duty long before Mrs Cole left the premises. If she had fallen over and injured herself as the result of her intoxication at (say) 4pm, she would have had an action against the Club because by then the Club had been in breach of its duty for some time, probably for close to three hours. Furthermore, unless Mrs Cole's refusal of management's offer of a courtesy bus and driver or, alternatively, a taxi broke the causal chain between the Club's breach of duty and her injury, Mrs Cole must succeed on the causation issue. Her injury was the direct result of the alcohol consumed by her as the result of the Club's breach of duty. Under the common law doctrine of causation, however, the voluntary choice of a plaintiff to take a course of action that leads to injury may destroy the causal link between breach of duty and the injury even though the breach contributed to the injury. But that principle has no application where the voluntary choice of the plaintiff or the intervening act of a third party is the direct result of the defendant's breach of duty. The plaintiff who elects to jump aside to avoid the risk of injury from a negligently driven vehicle is not deprived of a cause of action because no injury would have been suffered if the plaintiff had remained where he or she was. In the present case, Mrs Cole's abusive rejection of management's transport offers was just the kind of response that might be expected to flow from the Club's breach of duty in permitting her to continue to drink alcohol on the Club's premises. Her refusal of the offers of transport, therefore, no more broke the causal link between the Club's breach of duty and her injury than the voluntary act of the thief breaks the causal chain between a security company's breach of duty and the plaintiff's loss from theft. Nor was the causal chain broken by the offer of Mrs Cole's new-found companions to look after her. Going off with those persons might have founded an intervening cause argument if it had been established that their conduct had contributed to the injuries that she suffered. But there was no such evidence. The fact that she left the premises in their company is therefore not an intervening act that severs the causal connection between the Club's breach of duty and Mrs Cole's injuries. McHugh The most difficult question in the case is that of remoteness of damage. Was it reasonably foreseeable in a general way that, as a result of the Club's breach of duty, Mrs Cole might suffer injury of the kind and in the general way that she did? It is not necessary that the Club should reasonably foresee the precise injury or the manner of its occurrence. The received doctrine is that a defendant, in breach of duty, is liable for injury causally connected to the breach if the injury and the manner of its occurrence were reasonably foreseeable in a general way. Hence, the issue of remoteness has to be determined by asking: was it reasonably foreseeable in a general way that permitting Mrs Cole to continue to drink after the Club should have stopped her drinking might lead to her being struck by a car in the vicinity of the Club's premises up to 50 minutes after she left the Club? Given Mrs Cole's state of intoxication, it was reasonably foreseeable that that state might result in her suffering injury for up to an hour or even longer after she left the Club premises. Furthermore, injury as a pedestrian was high up on the list of injuries that she was at risk of suffering as the result of her intoxication. Accordingly, given that it is not necessary that either the precise injury or the manner of its infliction should be foreseen, her injury was reasonably foreseeable. It was reasonably foreseeable in a general way that within 50 minutes of leaving the Club she might be struck by a motor vehicle while walking on the road. The rigorous application of basic negligence doctrine requires the reversal of the Court of Appeal's decision and the restoration of the trial judge's verdict in favour of Mrs Cole. No doubt some minds may instinctively recoil at the idea that the Club should be liable for injuries sustained by a drunken patron who is run down after leaving its premises. But once it is seen that the Club had a legal duty to prevent her drinking herself into a state where she was liable to suffer injury, the case wears a different complexion. The Club has a legal responsibility for the injury. Instinct must give way to the logic of the common law. Order The appeal should be allowed with costs. GUMMOW AND HAYNE JJ. On Sunday, 26 June 1994, the first respondent ("the Club") held a champagne breakfast at its clubhouse, next to grandstands built beside the Club's football ground. Several football matches were played at the ground that day, from about 11.30 am to about 5.00 pm. The appellant went to the breakfast with three friends. The appellant consumed a lot of liquor. One of the friends who went to the Club with her later gave evidence that, by about 1.45 pm, the appellant was "absolutely drunk". Two of the appellant's friends left the Club at about noon; the third, Mrs Fay Hughes, left during the early part of the afternoon. The appellant, having met some New Zealanders, decided to stay at the Club. At about 6.00 pm, approximately eight hours after the appellant had first arrived at the Club's premises, she was asked to leave the clubhouse. (The appellant and her companions were said to have been touching each other indecently.) The Club's manager offered the appellant safe transport home, either by the Club's courtesy bus, or by taxi. She bluntly (and crudely) refused both offers. One of her companions told the Club's manager that they (her companions) would "look after her". A few minutes later she and her companions had left the premises, whether together or separately the evidence does not reveal. At about 6.20 pm, on a road about 100 metres north of the Club's premises, the appellant was struck by a four wheel drive vehicle driven by the second respondent. No one was then with the appellant. The appellant's blood alcohol content was later found to be 0.238 gm per 100 ml. It was estimated that to reach this blood alcohol result she would have had to have consumed 16 standard drinks9. The proceedings below The appellant brought an action in the Supreme Court of New South Wales for damages for the injuries she sustained in the collision, naming as defendants the Club and the driver of the vehicle that struck her. At first instance, the appellant obtained judgment against both the Club and the driver10. The primary judge (Hulme J) found the appellant to have been contributorily negligent and apportioned responsibility between the parties, as to 30 per cent against the driver, 30 per cent against the Club and 40 per cent against the appellant. 9 A "standard drink" was defined as a drink delivering 10 gm of alcohol: 285 ml of full strength beer, 30 ml of spirits or 120 ml of table wine. 10 Cole v Lawrence (2001) 33 MVR 159. On appeal to the Court of Appeal of New South Wales (Heydon and Santow JJA and Ipp AJA), the Club's appeal and the driver's cross-appeal were both allowed11. The judgment entered at trial was set aside and, in its place, judgment was entered for the Club and the driver. The issues By special leave, the appellant now appeals against only those parts of the judgment of the Court of Appeal which related to the liability of the Club. Special leave was granted to examine what, if any, duty of care the Club, as a seller of liquor, owed to the appellant. The appellant alleged that her collision with the driver's vehicle was caused, or contributed to, by the Club's negligence. In Graham Barclay Oysters Pty Ltd v Ryan12, McHugh J observed: "Ordinarily, the common law does not impose a duty of care on a person to protect another from the risk of harm unless that person has created the risk." His Honour also emphasised13 that the more specific the terms of the formulation of the duty of care, the greater the prospect of mixing the anterior question of law (the existence of the duty) with questions of fact in deciding whether a breach has occurred. On the other hand, the articulation of a duty of care at too high a level of abstraction provides an inadequate legal mean against which issues of fact may be determined. The present litigation was pleaded and conducted in such a fashion as to conflate asserted duty and breach of that duty and to make it inappropriate to decide on this appeal any issue respecting the existence or content of a duty of care. Although put in several different ways, the appellant's case in this Court was anchored in two complaints. First, it was alleged that the Club had been negligent in continuing to serve the appellant alcohol when the Club knew or 11 South Tweed Heads Rugby League Football Club Ltd v Cole (2002) 55 NSWLR 12 (2002) 211 CLR 540 at 575-576 [81]. 13 (2002) 211 CLR 540 at 585 [106]. should have known she was intoxicated. Secondly, it was said that the Club was negligent in allowing her to leave the premises in an intoxicated state. Thus the duties relied on were duties first, to take reasonable care to monitor and moderate the amount she drank, and second, to take reasonable care that she travelled safely away from the Club. These reasons will seek to show that whether the Club owed either of those duties need not be decided. If the Club owed the appellant a duty to take care that she did not fall into danger of physical injury when she left the Club, it discharged that duty of care by offering her safe transport home, only to be met by her refusal and the offer, from her apparently sober companions, to look after her. If the Club owed the appellant a duty to take care in monitoring and moderating the amount of liquor she took, any breach of that duty was not a cause of the injuries she sustained. A disputed question of fact It is convenient to deal first with a question of fact about which the Court of Appeal differed from the primary judge. How much alcohol did the Club serve the appellant? About 100 people attended the regular Sunday morning champagne breakfasts held by the Club. At each breakfast, two dozen bottles of spumante were provided by the Club for those attending. On the day of the accident, these 24 bottles were consumed in the period between about 9.30 am and 10.30 am, or a little later. Mrs Hughes, one of the friends who had come to the Club with the appellant, said that she, herself, would have had "around about eight" glasses of the free wine. She was unable to say how much the appellant had of the free wine but there is no reason to think it would have been significantly less than Mrs Hughes drank. By contrast, however, another member of the party, Mrs Hughes' husband, took no alcohol. Once the free wine ran out, Mrs Hughes bought another bottle of the same wine. The appellant and Mrs Hughes consumed that bottle. At about 12.30 pm Mrs Hughes saw the appellant drinking straight out of another full bottle of spumante. There was no direct evidence that the appellant had bought this bottle herself, but the primary judge found that she did, and the Court of Appeal did not overturn that finding. It may be accepted, therefore, that at about 12.30 pm the Club sold her this bottle of wine ("the 12.30 pm bottle"). The primary judge found that it was probable that the Club served the appellant alcohol after serving her with the 12.30 pm bottle14. As Ipp AJA rightly pointed out in the Court of Appeal15, drawing the inference that the appellant bought alcohol from the Club after the 12.30 pm bottle did not take into account other possibilities that were inconsistent with that inference. Ipp AJA referred to her buying alcohol from persons other than Club employees, and it may be that, as the appellant submitted, this possibility can be discounted. But what cannot be discounted is the real possibility that those in whose company the appellant spent the afternoon at the Club, watching football, gave her the alcohol that she most likely drank during that afternoon. She had, after all, refused to go home with Mrs Hughes because she preferred to stay with others. When it is recalled that there was evidence which the primary judge accepted that the Club refused to serve liquor to the appellant at about 2.30 pm or 3.00 pm, it is evident that the Court of Appeal was right to conclude that the evidence did not permit the primary judge to infer, as he did, that the appellant bought more liquor from the Club after 12.30 pm. All that the evidence showed was that it was more probable than not that she consumed more alcohol during the afternoon. The evidence was silent about who supplied it to her and was silent about whether those who supplied alcohol to the appellant did so from stocks they brought with them to the ground or from purchases made at the Club. A duty to monitor and moderate the appellant's drinking? The appellant's contention that her collision with the driver's vehicle was caused or contributed to by the Club's negligence in continuing to serve her alcohol, when the Club knew or should have known that she was intoxicated, was a contention that depended upon taking a number of steps, some (perhaps all) of which may be contested. First, what exactly is meant by "serving" the appellant alcohol? Does it encompass, or is it limited to, selling alcohol which it is known that the appellant will consume? Does it extend to selling, to others, alcohol which it is suspected that the appellant will consume? How is the Club to control what other patrons may do with bottles of alcohol which the Club sells them? Given the uncertainties about how and from whom the appellant obtained alcohol during the second half of the day, these are questions that go directly to the formulation of the duty which is said to have been breached. 14 (2001) 33 MVR 159 at 170 [63]. 15 (2002) 55 NSWLR 113 at 135 [140]. Secondly, the evidence of what the Club knew, or could reasonably be taken to have known, of what alcohol the appellant took during the day was very slight. Mrs Hughes described the appellant as "flitting around and dancing" at about noon. She described the appellant drinking directly from a bottle at about 12.30 pm but she said that then the appellant went outside the clubhouse to "the football area". To do that she passed from an area where Mrs Hughes was playing a poker machine and would have been "in the view of anyone if they had been looking for her to see her for at least 3 or 4 seconds". There was no evidence about how the "football area" was or could have been monitored by Club staff. There was no evidence about whether patrons coming to watch matches could or did bring alcohol with them. Again, these are questions which would have to be considered in deciding whether the Club owed the appellant a duty which it breached. Unsurprisingly, there was no evidence which would have revealed that servants of the Club could have (let alone reasonably should have) been able to observe how much the appellant drank during the morning. That is, as we say, unsurprising when it is recalled how many patrons attended the Club. About 100 or 120 had attended breakfast. Some of those patrons stayed at, and no doubt others came to, the clubhouse and the ground to attend the several football games to be played that day. There was, therefore, a large and shifting population to observe. If it is said that the Club owed the appellant a duty to monitor and moderate the amount that she drank, it owed all its patrons such a duty. All that the evidence showed was that there were points during the day where Mrs Hughes recognised that her friend was drunk and that in the afternoon the appellant was refused service. Presumably she was then evidently intoxicated. But whether, or when, her intoxication should have been evident to others, and in particular Club staff, was not revealed by the evidence. Next, what level of intoxication is said to be relevant? Does it mean not lawfully able to drive a motor car? Some drivers may not drive a motor car if they have had any alcohol. Other drivers may be unfit to drive after very few glasses of alcohol. Does "intoxicated" mean, as the primary judge held, "loss of self-control or judgment which is more than of minor degree"16? If that is so, many drinkers will arrive at that point after very little alcohol. All of these questions would have to be answered in deciding what duty of care was owed. None can be answered in isolation. All would require consideration of the purpose for which it is said that the duty alleged is to be imposed. 16 (2001) 33 MVR 159 at 169 [58]. In this case, the appellant alleged that the collision in which she was injured was caused by the Club negligently continuing to serve her alcohol. Thus, "intoxicated" must refer to some state in which her capacity to care for herself was adversely affected, and the nature of the duty said to be imposed on the Club must be one to take reasonable steps to prevent her reaching that state. But if that is so, it is evident that other considerations must intrude. Is the content of the duty to be imposed on the Club to vary according to what it knows, or what it should know, about what arrangements the appellant had made (if any) to leave the Club? Or are all patrons to be treated alike, regardless of whether they have made arrangements to be safely taken home? Where, until about midday, the appellant was in a party of four people of whom one did not drink at all, was the Club under a duty to moderate her drinking or not? Could it rely on there being one member of the party who would be responsible for shepherding the party home safely? What steps was the Club expected to take during the afternoon, or after the point it is said that it should have recognised that she was intoxicated? If it should have not supplied her alcohol in the afternoon, it was not shown that the Club did so after the 12.30 pm bottle. If it should have done more than refuse her service, what exactly was to be expected of it? All of these, and more, questions would have to be answered to identify the duty alleged to exist. And in answering them it would be necessary to pay due regard to the facts that the appellant and others in the Club were adults, none of whom could be expected to be ignorant of the intoxicating effects of the alcohol they voluntarily consumed. The statutory context The appellant submitted that it was relevant to notice that the Club was registered under the Registered Clubs Act 1976 (NSW) and that, under s 44A of that Act, it was an offence to permit intoxication on Club premises and an offence to sell or supply liquor to an intoxicated person. It was also said to be relevant to notice that s 67A of the Registered Clubs Act required a member of the police force, when requested by the secretary or an employee of the Club, to turn out or to assist in turning out of the premises of the Club any person who was then intoxicated, violent, quarrelsome or disorderly. Both of these provisions appear to have been directed chiefly, if not exclusively, to the maintenance of order in registered clubs' premises, not to the safety of the intoxicated patron. Whether or not that is so, no allegation was made of breach of statutory duty, and these provisions shed no light on the problems now presented. Any breach of duty to monitor and moderate not causative Even assuming the various difficulties identified about the formulation of a duty of care to monitor and moderate the amount of liquor the appellant drank could be overcome, the breach of such a duty, however it is expressed, was not a cause of the injuries the appellant sustained. That is revealed by considering the case, contrary to the facts found by the Court of Appeal, that the Club carelessly sold the appellant further liquor during the course of the afternoon, when it knew or ought to have known that she was intoxicated. In such a case the fact would remain that, before turning the appellant out of its premises, the Club offered her safe transport home. This she refused and once she refused it, the Club could do nothing more to require her to take care. In particular, it could not lawfully detain her. If, as happened here, she left the Club and was injured, any carelessness of the Club in selling her liquor was not a cause of what happened. Why that is so is revealed by considering the allegation that the Club breached its duty by allowing her to leave in an intoxicated state. Breach of a duty by allowing her to leave? The appellant contended that the Club broke its duty by allowing her to leave its premises in an intoxicated state. It was said that the Club should have "counselled" her before she left, to impress upon her the dangers that might await her. Why that should be so when she was willingly in the company of two apparently sober men offering to look after her is far from clear. And exactly what form this counselling might usefully have taken is equally unclear. The appellant was an adult woman whose only disability at the time she was turned out of the Club was the state of intoxication she had induced in herself. There was a thinly veiled suggestion that, because it seemed that the appellant's companions may have had sexual designs upon her, they were "unsafe" companions with whom to allow her to leave the Club. But what business would the Club have had to attempt to look after the moral wellbeing of the appellant? It was suggested that the Club should have called the police17. But again it must be asked: to do what? If the police had been called they would have been bound (by s 67A of the Registered Clubs Act) to turn the appellant out of the Club's premises. But what else is it suggested that the police might have done? No satisfactory answer was given to this question. All that was said was that it could not be supposed that the police would have left her to fend for herself. That assumes that the appellant would have reacted differently to a suggestion 17 cf Jordan House Ltd v Menow [1974] SCR 239 at 247-248 per Laskin J. that she take the courtesy bus or a taxi β differently, that is, from her crudely blunt response to the Club's manager. Again, even if there were some duty to take reasonable care not to allow her to leave the premises except by a safe means of transport, the Club did not breach that duty. It took reasonable steps to make safe transport available to her. Questions of duty of care not decided In these circumstances it is neither necessary nor appropriate to decide any question about the existence of a duty of care. It is not necessary to do so for the reasons given earlier. It is not appropriate to do so because any duty identified would necessarily be articulated in a form divorced from facts said to enliven it. And, as the present case demonstrates, the articulation of a duty of care at a high level of abstraction either presents more questions than it answers, or is apt to mislead. Here, as in so many other areas of the law of negligence, it is necessary to keep well in mind that the critical question is whether the negligence of the defendant was a cause of the plaintiff's injuries. The duty that must be found to have been broken is a duty to take reasonable care to avoid what did happen, not to avoid "damage" in some abstract and unformed sense. Thus asking whether it is careless to sell liquor to an obviously intoxicated patron may, when the question is cast in that abstract form, appear to invite an affirmative answer. And giving an affirmative answer may be thought to conduce to the careful and responsible service of a product which, if misused, can be dangerous. But as the events which give rise to this appellant's claim demonstrate, the simplicity of a question framed in the way described serves only to obscure the complexity of the problems that lie beneath it. The appeal should be dismissed with costs. Kirby KIRBY J. A problem with the consumption of alcohol, persisted with beyond small quantities, is that it has a capacity to destroy the ability of the consumer to make reasoned choices, to observe proper self-protection and to behave in a civil and rational way. These facts are generally known to supplier and consumer alike. However, the consumer may be a person highly vulnerable to alcohol-induced conduct that is harmful and self-destructive. What for most members of the community is, if taken in prudent quantities, an enjoyable and relaxing pastime is for a small minority of consumers a highly dangerous and potentially lethal poison. Even for those who do not fall into the category of highly vulnerable people, alcohol, of its nature, has the capacity to affect adversely people with full faculties, when it is consumed to excess. Vulnerable people are not only those who drink to excess. Alcohol adversely affects many people in different ways. A rational system of law will recognise these differentials. It will not allow suppliers, who have a commercial interest in supplying alcohol to consumers, to wash their hands of legal responsibility for the safety of those to whom the alcohol they supply becomes the cause of serious injuries. That is what the appellant alleges happened in her case. Conclusions at trial and on appeal The primary judge in the Supreme Court of New South Wales (Hulme J)18 approached the contest between Mrs Cole (the appellant) and the respondent Club ("the Club") with the foregoing realities in mind. He found that the Club, with relevant statutory duties and with economic and physical control over the supply of alcohol to patrons on its premises, owed the appellant a duty of care in accordance with the common law of negligence. He concluded that the Club had breached its duty of care and was partially the cause of the serious injuries suffered by the appellant. Those injuries were a result of the appellant's disorientation on a public road 100 metres from the Club's premises soon after she had left those premises in a serious state of intoxication. On the evidence proved in this case, the primary judge was entitled to reach the conclusions of fact and law that he did. The Court of Appeal was not warranted to disturb the judgment which the appellant recovered against the Club. This Court is not concerned with the issue of the liability of the driver of the motor vehicle that struck the appellant. However, the judgment at trial in favour of the appellant against the Club should be restored. 18 Cole v Lawrence (2001) 33 MVR 159. Kirby The Club owed the appellant a duty of care Two central problems were said to stand in the way of recovery by the appellant. The first was the suggested absence of a duty of care owed in law to a person in the position of the appellant to ensure that she did not become so seriously intoxicated that she might be confronted with the foreseeable risks of the kind that befell her and, if she did become so intoxicated, to ensure that she was taken home or to some other safe place where she could recover further from the alcohol-induced intoxication before venturing beyond the Club's premises to circumstances potentially of great danger. The reasons of Gummow and Hayne JJ ("the joint reasons") prefer to postpone resolution of the issue of the duty of care although hinting at difficulties which their Honours see in its availability19. The reasons of Gleeson CJ20 and Callinan J21 deny the existence of a duty of care. Their Honours' reasons are, with respect, replete with expressions reflecting notions of free will, individual choice and responsibility22. This is reinforced in the reasons of Callinan J by his Honour's references to the opinion of Heydon JA in the Court of Appeal from which the appeal comes23. Whatever difficulties free-will assumptions pose for the law in normal circumstances24, such assumptions are dubious, need modification and may ultimately be invalidated having regard to the particular product which the Club sold or supplied to patrons such as the appellant, namely alcoholic drinks. The effect of that product can be to impair, and eventually to destroy, any such free will. This fact imposes clear responsibilities upon those who sell or supply the product in circumstances like the present to moderate the quantity of the supply; to supervise the persistent sale or supply to those affected; and to respond to, and ameliorate, the consequences of such sale or supply where it is clear that the recipient has consumed enough of the product to be in a 19 Joint reasons at [57], [59], [65]-[73]. 20 Reasons of Gleeson CJ at [18]. 21 Reasons of Callinan J at [125]. 22 Reasons of Gleeson CJ at [13]-[14]; see also for an example the statement in the joint reasons at [78]: "The appellant was an adult woman β¦ [in a] state of intoxication she had induced in herself." (emphasis added) 23 Reasons of Callinan J at [130] referring to South Tweed Heads Rugby League Football Club Ltd v Cole (2002) 55 NSWLR 113 at 115-116 [4]-[7]. 24 See eg discussion of one such difficulty in Taylor, "Should Addiction to Drugs be a Mitigating Factor in Sentencing?", (2002) 26 Criminal Law Journal 324 citing R v Smith [1987] 1 SCR 1045 at 1053; Lawrence (1988) 10 Cr App R (S) 463. Kirby temporary state of inability to take proper care for his or her own safety. On the findings of the primary judge, such was the case of the appellant. The law of tort exists not only to provide remedies for injured persons where that is fair and reasonable and consonant with legal principle. It also exists to set standards in society, to regulate wholly self-interested conduct and, so far as the law of negligence is concerned, to require the individual to act carefully in relation to a person who, in law, is a neighbour25. The Club had a commercial interest to supply alcohol to its members and their guests, including the appellant. Doing so tended to attract them to an early morning breakfast, to induce them to use profitable gambling facilities in the Club's premises and to encourage them to use the restaurant and other outlets where alcohol would continue to be purchased or supplied to the profit of the Club. As McHugh J points out in his reasons26, with which I agree, the common law has long recognised that the occupier of premises owes a duty to take reasonable care for the safety of those who enter the premises. That duty arises from the occupation of premises. It extends to protection from injury from all of the activities on the premises, including, in registered premises such as the Club's, the sale of alcoholic drinks27. In such circumstances, to hold that the Club owed no duty of care by the standards of the common law of negligence, to patrons such as the appellant, is unrealistic. Such a patron was a person who, in the reasonable contemplation of the Club and its employees, was potentially vulnerable to harm as a result of its commercial activities. Such harm was reasonably foreseeable in the given circumstances. The appellant was within the proximity of the Club in a physical sense. The policy reasons, concerned with free will and personal autonomy, that might in other circumstances justify withholding the imposition of a duty of care are overridden, in the case of the Club, by the commercial interest it had in the presence of the appellant on its premises and the known propensity of the alcoholic product, made available there, to expose at least some individuals to the risk of serious harm. With all respect to those with doubts or holding contrary views, I therefore have no hesitation in concluding that the Club owed the appellant a duty of care of the kind posited. There is much support for this proposition in Canada: 25 Donoghue v Stevenson [1932] AC 562 at 580. 26 Reasons of McHugh J at [30]. 27 Reasons of McHugh J at [31]. Kirby Jordan House Ltd v Menow28 and Stewart v Pettie29. There are many decisions elsewhere that support the general proposition that a person in control of licensed premises owes a duty of care in negligence to take reasonable precautions in the circumstances not to contribute to a danger to others: Chordas v Bryant (Wellington) Pty Ltd30 and Munro v Porthkerry Park Holiday Estates Ltd31. The withered view of community and legal neighbourhood propounded by Gleeson CJ and Callinan J is one that I would reject. There is no reason for this Court to endorse the narrower legal principle for Australia. There is every reason for it to follow an approach similar to that taken in other jurisdictions32. The social and legal environment in Australia is similar to those countries where the duty has been upheld. This conclusion is also endorsed by the indications of the purposes of Parliament in the statutory provisions regulating control of, and standards in, registered licensed clubs in the State of New South Wales where the appellant's injuries occurred33. Although these provisions do not themselves give rise to a statutory cause of action (and none was alleged) they do shed light on the problems presented because they make plain the purpose of Parliament that intoxicated persons are not to be sold, or supplied with, alcohol on such club premises. Doing so is a criminal offence in proof of which the onus of establishing innocence is exceptionally placed on the club secretary, not the accuser. 28 [1974] SCR 239. 29 [1995] 1 SCR 131; cf Desmond v Cullen (2001) 34 MVR 186. See also Oxlade v Gosbridge Pty Ltd unreported, New South Wales Court of Appeal, 18 December 1998 per Mason P; Rosser v Vintage Nominees Pty Ltd (1998) 20 SR (WA) 78; cf Johns v Cosgrove (1997) 27 MVR 110. There were particular features of these cases that do not exist in the present case and vice versa. 30 (1988) 20 FCR 91. 31 [1984] TLR 138 per Beldam J. See Orr, "Is an innkeeper her brother's keeper? The liability of alcohol servers", (1995) 3 Torts Law Journal 239; Solomon and Payne, "Alcohol Liability in Canada and Australia: Sell, Serve and Be Sued", (1996) 4 Tort Law Review 188. See also O'Halloran, "Social Host And Vendor Liability For Driving-Related Injuries Caused By Intoxicated Guests And Customers", (1987) Annual Survey of American Law 589. 32 Solomon and Payne, "Alcohol Liability in Canada and Australia: Sell, Serve and Be Sued", (1996) 4 Tort Law Review 188 at 189. 33 See reasons of Callinan J at [125], fn 46, [127] citing ss 44A and 67A of the Registered Clubs Act 1976 (NSW): see also reasons of Gleeson CJ at [16]; joint reasons at [74]-[75]. Kirby Statutory provisions of such a kind can only be explained by Parliament's recognition, and acceptance, of the special risks that selling, supplying or condoning the sale and supply of excessive quantities of alcohol to sometimes vulnerable patrons on such premises occasions to them and to others. The principles of the common law of negligence remain to be expressed in the context of these realistic statutory provisions. They reinforce the conclusion, which commonsense affirms, that the Club owed a duty of care to the appellant as claimed. In the circumstances of this case, they help to overcome the common law's usual reluctance to impose on strangers duties of affirmative action to take care of others. Here the appellant was not a legal stranger to the Club. The Registered Clubs Act 1976 (NSW) imposed duties in respect of her. To the appellant, the Club was, in law, a neighbour. The Club, a registered purveyor of alcoholic drinks that began the day with a breakfast with the supply of free bottles of spumante in large quantities and thereafter tolerated the continued presence on its premises of a patron who became drunk, and who eventually was obviously drunk (drinking at one stage directly from a bottle of wine and acting in a disordered, sometimes indecent and even offensive manner), cannot say that it owed no duty of care to her. It cannot do so when soon after she left its premises the virtually inevitable motor accident occurred with serious injuries to her person. There was no error in the conclusion of the primary judge on the duty issue. The Court of Appeal erred in disturbing his conclusion. A breach of duty contributed to the appellant's damage That leaves the issues of breach and causation. Once the duty of care is accepted, the breach of duty is clearly established because the Club had the right to control the conduct of the appellant on the Club's premises. This included in the supply of alcoholic drinks for her consumption, the termination of such supply and her ejection from the Club premises long before it became highly dangerous to do so34. The Club breached its duty long before any issue of causation arose to be decided35. The real possibility that the appellant would suffer injury, as she did, was clearly foreseeable in the circumstances. Causation is the substantial issue in this appeal. Its resolution ultimately reduces to the question of whether the Club did enough by offering the appellant transport home in a "courtesy bus" or taxi at about 6.00pm on the day of her 34 Reasons of McHugh J at [34]. 35 cf reasons of McHugh J at [41]. Kirby injuries. Relevant to the decision on this issue is the intervention of two male New Zealander companions of the appellant who said they would "look after her". Was this sufficient? Did it sever the link between, on the one hand, the duty of care and the breach of that duty found by the trial judge and, on the other, his Honour's conclusion that the acts and omissions of the Club were partly the cause of the damage suffered by the appellant soon after she left the Club's premises? I accept that the situation of the appellant at about 6.00pm on the day of her injuries presented the Club and its secretary/manager with a difficult situation. It was, however, one partly, even substantially, of their own making. What they were to do was governed by the circumstances then arising. Those circumstances included the very prolonged course of supply of alcohol to the appellant, one way or another, on the Club's premises following the spumante breakfast. The obvious state of intoxication of the appellant over a long interval and the profound effect this had on the appellant's intellectual and motor capacity β as well as the obvious risks she faced if she were left to her own devices on or near a public highway on leaving the Club's premises β made the possibility of an accident reasonably foreseeable in the circumstances of her condition. By 5.30pm or 6.00pm on the day of the accident the secretary/manager of the Club saw the appellant in a condition which was described as "grossly intoxicated". At around 3pm, Mrs Pringle, wife of the secretary/manager, had refused to serve her and described her as unsteady on her feet. At 2.15pm to 2.30pm, the appellant's friend Mrs Hughes had described her as "totally inebriated" and "an embarrassment". This was not, therefore, a case of chance or unexpected intoxication at a late hour. It was an instance of prolonged and obvious drunkenness on the Club's premises over an extended period. It is not adequate to respond with Sunday School horror to the fact that the appellant said to Mr Pringle "get fucked" when he told her, at last, at about 6.00pm, that she would have to leave the premises and offered her transport home. An object of the law applicable to this case, statutory and common law, is to prevent things coming to such a pass. If the appellant had by that hour, indeed much earlier, dropped her "ladylike" behaviour, this was precisely the outcome of serving her with, or permitting the sale or supply to her of, much more alcohol than it was safe for her to consume. In his into evidence, Dr Starmer, an expert pharmacologist, explained features of such alcohol consumption that are largely within common knowledge. He summarised its elements: received report "Alcohol exerts its major effects on the structures of the brain which are responsible for balance and co-ordination. Alcohol also affects mental and cognitive ability (ie judgement, reasoning, memory). Alcohol Kirby reduces peripheral awareness as well as impairing speed and distance judgements. The ability to successfully divide attention between two or more inputs is significantly degraded at blood alcohol concentrations as low as 0.05g/100ml and impairment increases exponentially with rising blood alcohol concentration. Glare resistance is also reduced under alcohol and perspective is distorted. In many collisions involving alcohol- intoxicated pedestrians, although the pedestrian has been shown to have detected the presence of an oncoming vehicle, she has continued to cross the road. This has usually been attributed to an alcohol-induced increase of the time-intervals between detection, decision and action. Another feature common to many such collisions is an increase in uncertainty on the part of the intoxicated pedestrian. Often, the pedestrian realises her miscalculation and stops or hesitates just before the impact. If an avoidance strategy is decided upon, then the intoxicated pedestrian experiences other difficulties, in terms of decreased agility and lack of co- ordination. These deficits taken together with increased perception and reaction times, substantially reduce the chances of successfully avoiding an impact." The proper operation of the law of tort to a person whose capacity Either this Court accepts that the law imposes a duty of care on those in effective control in such circumstances (the Club and its employees) or it transfers responsibility solely to exercise responsibility had been repeatedly and seriously diminished over a very long time by the type of conditions that existed in the Club's premises, as described in the evidence. If responsibility β even partial β is imposed on the Club by the law of negligence a message is sent that control is not just a formal duty imposed on the Club and its officers by Parliament and by statutory offences unlikely to be prosecuted often. A holding of liability in negligence would reinforce such duties36 by visiting civil consequences that would sound in direct liability to the injured, with a resulting increase in insurance premiums that might stimulate a desirable change of culture and conduct. The Club's eventual response to the appellant's conduct can be seen for what it was: an instance of too little, too late. By their decision, the majority of this Court tolerate and perpetuate this state of affairs. I dissent from their view. It is not the concept of the law of tort that I hold. Some Australians find such drunkenness amusing and socially tolerable. Sometimes, in certain environments and some degrees, it may be so. But the picture portrayed in the case of the appellant's behaviour at the Club's premises is 36 Young, "Dram Shop Liability: A Sobering Thought for Licensees", (1998) 18(1) Proctor 30 at 33. Kirby of a human being who eventually became profoundly affected by alcohol over an extremely long period, actually ill, and was effectively turned out of the Club's premises drunk, on the flimsy possibility that new-found male companions would "look after" her. Unsurprisingly, given her condition, they did not do so. Soon after, she was wandering onto the highway where she was struck by a motor vehicle and seriously injured. This consequence was readily foreseeable if not inevitable. Certainly, it was one of a number of serious risks that it was open to the primary judge to conclude were reasonably foreseeable in the circumstances. For those in the Club's premises who had a large (certainly the primary and also the statutory) responsibility for her state, what was offered was not enough. It was proposed far too late. The common law required more. The trial judge was right to so hold. The rejection of this appeal will reinforce indifference and belated and formal offers of transport by a club where proper standards of reasonable care require a significantly more prompt and higher standard of attention to the case of such a vulnerable individual. Until that higher standard is imposed by the law, including the common law of negligence, purveyors of alcoholic liquor will continue to gather significant profits with no substantial economic contribution to the occasional victims who are injured as a result, such as the appellant. As a matter of principle, the result in this appeal is contrary to my view of the operation of the Australian common law of negligence. The case joins an increasing number of decisions where judgments of negligence in favour of plaintiffs at trial are taken away not by statutory deprivation but by appellate courts endorsed by this Court, despite the advantages the trial judge has in evaluating all of the evidence relevant to the multifunctional assessment of the existence of a duty of care and to the commonsense assessment of whether breach of that duty caused the plaintiff's damage37. By the standards of commonsense the Club, through its secretary/manager and employees who also had important statutory duties to observe, should have taken steps much earlier to prevent sale or supply of more alcohol to the appellant. The Club, the secretary/manager and the employees should have been more strict about it. If necessary, they should have called the police as the applicable legislation contemplates. Doing so would doubtless have put in motion a realistic and enforced procedure for taking the appellant home by transport supplied by the Club. That, in my view, is what the common law required, and should require, of a vendor of alcoholic drinks in circumstances such as these. The appellant was unlikely to have responded to the police as she 37 Luntz, "Torts Turnaround Downunder", (2001) 1 Oxford University Commonwealth Law Journal 95; Stapleton, "The golden thread at the heart of tort law: Protection of the vulnerable", (2003) 24 Australian Bar Review 135. Kirby did to the secretary/manager of the Club. Had she done so, I do not doubt that, at the least, the police would, properly, have taken her in hand, put her off the premises and insisted on her taking the proffered transport home. Clearly, this is what would once have happened in Australia as it happened elsewhere38. I do not see that the law today condones a lesser standard of care in our community for a person rendered substantially dependent on others for her physical safety, even her life, by the commercial operations of those with full lawful charge over the sale and supply of alcohol to vulnerable recipients. Greater firmness on the part of the Club and its employees in handling the predicament to which the appellant had been brought was essential. Instead, the Club secretary/manager's position was one of weakness, indecision and ultimate inaction. This was conduct substantially in keeping with the sale and tolerated supply of alcohol to the appellant over a long day starting with breakfast and continuing until about 6.00pm. As to suggesting that the appellant remain on the premises until she was fit to travel in a world of fast-moving motor vehicles proceeding in the dark, the secretary/manager was asked: "Q. And you didn't think to ask the lady to remain until perhaps she became more composed? After the confrontation, I was involved in other duties and didn't really take notice again until after. You were just anxious to get her off the premises? Basically, yes." Conclusions and orders The majority of this Court disagrees with my conclusion. However, in my opinion the expressed attitude of the Club's secretary/manager and the conduct and "blind eyes" of the other employees of the Club did not reach the standards of the common law. The Club was not a kindergarten. But it was not a place for substantial indifference to a person who became steadily, obviously and seriously intoxicated. Statute imposed, or implied, relevant duties on those in charge of the Club and its premises. And so did the common law. It was open to the primary judge to so conclude. The Court of Appeal erred in interfering in the judgment in favour of the appellant against the Club based on the trial judge's assessment. The appeal should be allowed with costs. The orders of the Court of Appeal of the Supreme Court of New South Wales in pars (a), (d) and (e) should 38 cf Jordan House Ltd v Menow [1974] SCR 239 at 248. Kirby be set aside to the necessary extent. In place thereof, it should be ordered that the appeal against the judgment entered at trial against the respondent South Tweed Heads Rugby League Football Club Ltd be dismissed with costs. Callinan CALLINAN J. Mrs Cole, the appellant, had worked in a buffet car on the railways, as a waitress in a restaurant on South Molle Island, in a nightclub for two periods, and at a tavern as a function manager at the Gold Coast. She was 45 years old at the time of the events with which this Court is concerned. It is inconceivable that by then, in 1994, she had not had ample opportunity to observe and come to understand the universal effects of the consumption of alcohol. The appellant systematically and deliberately drank herself into a state of intoxication at or in the vicinity of the licensed premises of the first respondent ("the respondent"), starting at about 9.30am and continuing throughout the day of 26 June 1994. It is far from clear how much of the liquor that she drank during that day was supplied to her by the respondent. The appellant spent some of the day at the premises talking to, and drinking with friends. For part of the time she played gambling games. Unsurprisingly, she could not account for her movements and activities at other times although she remembers, as the primary judge found, that "she had a very good time"39. Equally unsurprisingly, by one-thirty in the afternoon the appellant was manifesting to some people signs of her inebriation. Her friend Mrs Hughes said that as early as midday the appellant was drunk, carrying on and arguing, and her speech was "a bit funny". Mr Pringle, the manager of the respondent spoke to the appellant at about 5.30pm. He saw a bottle of wine on the table where she was seated and later described her as then being "very, very drunk". He thought that she was being held up by someone else. He said to her "You are affected by alcohol, I won't tolerate your behaviour, you will have to leave". Because Mr Pringle thought the appellant needed help to reach her home safely, he offered her the use of the club's courtesy bus and driver. The alternative of a taxi was offered, which again was a service provided by the respondent from time to time. The appellant's response to both offers was, as Mr Pringle recalled, "Get f.....". Mr Pringle told the appellant that he would not tolerate her behaviour. One of two Maori men who were then in the appellant's company told Mr Pringle to "leave it with [them] and [that he would] look after her". Within a matter of minutes the Maori men and the appellant left. Mr Pringle had already told the men in the group that because of their behaviour, they would not be served again. They did not however appear to him to be drunk. The appellant must have consumed a very great quantity of alcoholic liquor. All of her consumption was entirely voluntary. Some time after she finished drinking the content of alcohol in her blood was 0.238. The evidence, contrary to the finding of the primary judge, did not establish that the respondent had supplied the appellant with any alcohol after about 12.30pm. In fact 39 Cole v Lawrence (2001) 33 MVR 159 at 160 [5]. Callinan Mrs Pringle, who was assisting at the club, had refused to serve her at about The appellant's last recollection of events before she was injured was of speaking to the driver of a taxi cab to tell him the address to which her friend should be taken, and of returning to the club to watch a football match in progress on a playing field in front of it. Her next recollection is of waking up in hospital in Brisbane. A further sighting of the appellant, a very brief one, was made by Mrs Lawrence in the headlights of the motor vehicle that she was driving in a southerly direction along Fraser Drive in the vicinity of the respondent's premises at about 6.20pm in darkness. The appellant was walking towards her on Mrs Lawrence's side of the roadway but near the edge of the bitumen carriageway. The appellant was wearing dark clothing. Mrs Lawrence initially saw only her face. The vehicle struck the appellant. She suffered serious injuries. The appellant sued Mrs Lawrence and the respondent in the Supreme Court of New South Wales40. The case was heard by Hulme J. In one passage in his judgment he described the appellant's conduct in walking on the roadway in this fashion41: "Thus, despite the almost unbelievable stupidity (at least for a sober person) of continuing to walk towards, or stand in the way of, a lighted oncoming car at night, it seems to me that the probabilities are that that is what the [appellant] did. Of course, it may be that it was a case of her just not moving off the carriage way in time and for enough time for the car to pass." His Honour found both Mrs Lawrence and the respondent to be negligent. His conclusion in relation to the respondent was as follows42: "There can be no doubt that the supply of alcohol in the form of what I may call the 12.30 bottle and the later one, was a contributing cause of the injury she later suffered." 40 Cole v Lawrence (2001) 33 MVR 159. 41 Cole v Lawrence (2001) 33 MVR 159 at 167 [44]. 42 Cole v Lawrence (2001) 33 MVR 159 at 170 [68]. Callinan The primary judge apportioned liability for the appellant's injuries, as to the appellant herself 40 percent, and as to Mrs Lawrence and the respondent, 30 percent each43. Both Mrs Lawrence and the respondent successfully appealed to the Court of Appeal of New South Wales44 (Heydon and Santow JJA and Ipp AJA) and in consequence, the appellant's action was dismissed with costs. As will appear, I agree with the decision of the Court of Appeal which I regard as an inevitable one. The Court of Appeal held that when the appellant purchased a bottle of wine from the respondent at 12.30pm her state of intoxication would not have been known to the respondent's employees. Likewise, the evidence was not capable of establishing on the balance of probabilities that, after 12.30pm, the appellant bought alcohol from the respondent or that it supplied alcohol to her. The source of alcohol she acquired during the afternoon is a matter of speculation. Except for extraordinary cases, the law should not recognise a duty of care to protect persons from harm caused by intoxication following a deliberate and voluntary decision on their part to drink to excess. The voluntary act of drinking until intoxicated should be regarded as a deliberate act taken by a person exercising autonomy for which that person should carry personal responsibility in law. The respondent owed the appellant only the ordinary general duty of care owed by an occupier to a lawful entrant. Heydon JA, with Santow JA agreeing held that to extend the duty to the protection of patrons from self-induced harm caused by intoxication would subvert many other principles of law and statute which strike a balance between rights and obligations, and duties and freedoms45. The appeal to this Court The appellant appeals to this Court against the exculpation by the Court of Appeal of the respondent only. The answer to the last of the appellant's grounds of appeal provides an answer to the whole of the appellant's appeal. That ground 43 Cole v Lawrence (2001) 33 MVR 159 at 173 [81]. 44 South Tweed Heads Rugby League Football Club Ltd v Cole (2002) 55 NSWLR 45 South Tweed Heads Rugby League Football Club Ltd v Cole (2002) 55 NSWLR Callinan "that the Court of Appeal erred in holding that the first respondent's offer of safe transport to the appellant whilst intoxicated discharged any duty that the first respondent might have had to take reasonable steps for the appellant's safety." It is convenient to deal with it immediately. The appellant submits that the respondent was under a duty, either to attempt "to achieve a sobering up of the appellant and/or the actual sobering up of the appellant ... [i]n effect, facilitating the regaining of composure by the appellant." It was said that: the appellant regaining some composure. "Mr Pringle decided to avoid further confrontation rather than assist or Assisting or facilitate facilitating the regaining of composure would have materially affected the appellant's ability to get home safely. It could have been achieved with a relative minimum of effort: ceasing service of alcohol, preventing consumption of alcohol, supplying non-alcoholic drinks and beverages and when some composure has been regained or some sobriety obtained, again offering transport to the appellant when she was not in a state where she had lost complete control and when a more reasoned and rational response was probable. Mr Pringle knew that the appellant's rudeness and rejection of his suggestion was similar to the conduct of 'most drunks' to 'get upset when you turn the grog off' and common experience informs that grossly intoxicated persons can be troublesome, disinhibited and non- compliant when compared to sober persons acting rationally." Let me assume, contrary to what I would hold to be the case, that the respondent owed a duty of care of the kind suggested, to the appellant before and at about the time that she left its premises. There was no breach of such a duty. The notion that the appellant, as far gone and as offensively abusive as she was, would have been amenable to counselling, or simple restraint, or indeed to any measures intended to restore her composure, is fanciful. Forceful restraint was out of the question. No sensible person would ever remotely contemplate such a course, capable, as it would be, of leading to a physical altercation, an assault, and the possibility of criminal and civil proceedings in relation to it. The same consequences could equally flow from any attempt to induce the appellant to regain her sobriety in a room or other quiet place at the respondent's premises. As for the suggestion made in oral argument, that a police officer could and should have been called, these responses should be made. It is highly improbable that a heavily pressed police force would have had, or would have been likely if it did have them, to provide, sufficient personnel to enable a police officer or officers to make a timely and effective visit to the premises. And in the unlikely event that a police officer did make a timely call at the premises, it is equally unlikely that his or her official duty could have been discharged otherwise than by doing what the respondent itself did, that is, "turn [the appellant] out β¦ of the Callinan premises of the club"46. There is another complete answer to this ground of appeal. It is that the appellant when she left did so voluntarily and apparently with a group of men. The men said that they would look after her. In those circumstances there was nothing that the respondent could do. There is no obligation upon anyone to engage in a futility. Even assuming a relevant duty of care the respondent would have fully discharged it by doing what it did, offering the appellant the use of a courtesy bus, or a taxi. Reference was made in argument by the appellant to s 44A of the Registered Clubs Act 1976 (NSW) which was as follows at the relevant time47: 46 This was a requirement of s 67A of the Registered Clubs Act 1976 (NSW) which at the relevant time provided as follows: "Removal of persons from premises of registered club Where a member of the police force is requested by the secretary or an employee of a registered club to turn out, or to assist in turning out, of the premises of the club any person β who is then intoxicated, violent, quarrelsome or disorderly; who, for the purposes of prostitution, engages or uses any part of the premises; whose presence on the premises renders the club or the secretary of the club liable to a penalty under this Act; or who hawks, peddles or sells any goods on the premises, it is the duty of the member of the police force to comply with the request and he may, for that purpose, enter the premises and use such reasonable degree of force as may be necessary." 47 The section was amended in 1996 by the amendment of s 44A(3) and the insertion of s 44A(4). These sub-sections now provide: If a person on the premises of a registered club is intoxicated, the secretary is taken to have permitted intoxication on the premises unless it is proved that the secretary and all employees selling or supplying liquor took the steps set out in subsection (4) or all other reasonable steps to prevent intoxication on the premises. For the purposes of subsection (3), the following are the relevant steps: (Footnote continues on next page) Callinan "Conduct on club premises (1) A secretary of a registered club who: permits intoxication on the club premises; or permits any indecent, violent or quarrelsome conduct on the club premises, is guilty of an offence. Maximum penalty: 20 penalty units. (2) A person who, in a registered club, sells or supplies liquor to an intoxicated person is guilty of an offence. Maximum penalty: 20 penalty units. If a person on the premises of a registered club is intoxicated, the secretary is taken to have permitted intoxication on the premises unless it is proved that the secretary and all employees selling or supplying liquor took all reasonable steps to prevent intoxication on the premises." Although that section provides some indication of the nature of the responsibilities of clubs it was not suggested that it gave rise to any statutory causes of action. In any event, the respondent probably complied with the section by taking the step of asking the appellant to leave the premises. The evidence, even as to whether the respondent did permit the appellant to be intoxicated on the premises, certainly after 12.30pm, was to say the least obscure. The section does not assist the appellant in this case. What I have so far said is sufficient to dispose of the appeal. Nonetheless I would wish to endorse fully and explicitly some of the propositions stated in the judgments of the Court of Appeal. I think this desirable not only because those propositions are correct, but also because the statement of them achieves a high degree of certainty with respect to the duty to customers of vendors of alcoholic asked the intoxicated person to leave the premises, contacted, or attempted to contact, a police officer for assistance in removing the person from the premises, refused to serve the person any alcohol after becoming aware that the person was intoxicated." Callinan liquors, the matter which excited the interest of the Court on the application for special leave. I agree with these pronouncements by Heydon JA48: "Ipp A-JA has identified several factors pointing decisively against the recognition of a duty of care owed by publicans not to serve customers whom they know will become or have become intoxicated in order to prevent the customers causing injury to themselves. Underlying those factors are two matters of particular significance both for potential plaintiffs and for potential defendants. One is that if the duty existed it might call for constant surveillance and investigation by publicans of the condition of customers. That process of surveillance and investigation might require publicans to direct occasional oral inquiries to customers. Inquiries of this kind would ordinarily be regarded as impertinent and invasive of privacy. Quite apart from the inflammatory effect of these activities on publican-customer relations and on good order in the hotel or club, the impact of these activities on the efficient operation of the businesses of publicans would 'contravene their freedom of action in a gross manner'. The other significant matter is that if a customer reached a state of intoxication requiring that no further alcohol be served and the customer decided to depart, recognition of the duty of care in question might oblige publicans to restrain customers from departing until some guarantee of their safety after departure existed. The [appellant's] arguments in this case repeatedly stressed the proposition that the club was at fault in permitting the [appellant] to leave without ensuring that it was safe for her to do so. How are customers to be lawfully restrained? If customers are restrained by a threat of force, prima facie the torts of false imprisonment and of assault will have been committed. If actual force is used to restrain customers, prima facie the tort of battery will have been committed as well as the tort of false imprisonment. Further, the use of actual force can be a criminal offence: Crimes Act 1900, s 59 and s 61. It is a defence to these torts to prove lawful justification β reasonable and probable cause. However, the constitutional significance of the torts in question in protecting the liberties of citizens β they create, after all, important limitations on police power β means that 'lawful justifications' should not lightly be found independently of legislative sanction even outside the immediate police context. Subsections (1) and (3) of s 67A(1) of the 48 South Tweed Heads Rugby League Football Club Ltd v Cole (2002) 55 NSWLR Callinan Registered Clubs Act 1976 make it lawful for the secretary or an employee of a registered club to use whatever reasonable force is necessary to 'turn out' of a club intoxicated persons. But the legislation says nothing about using reasonable force to keep intoxicated persons in pending the appearance of some guarantee for their safety after departure. In short, if the tort of negligence were extended as far as the [appellant] submitted, it would 'subvert many other principles of law, and statutory provisions, which strike a balance of rights and obligations, duties and freedoms'." I am also of the opinion that in general β there may be some exceptional cases β vendors of products containing alcohol will not be liable in tort for the consequences of the voluntary excessive consumption of those products by the persons to whom the former have sold them. The risk begins when the first drink is taken and progressively increases with each further one. Everyone knows at the outset that if the consumption continues, a stage will be reached at which judgment and capacity to care for oneself will be impaired, and even ultimately destroyed entirely for at least a period. It follows that I would disagree with any propositions to the contrary deducible from the Canadian cases referred to in argument: Stewart v Pettie49 and Jordan House Ltd v Menow50. The appeal should be dismissed with costs. 49 [1995] 1 SCR 131. 50 [1974] SCR 239. |
HIGH COURT OF AUSTRALIA APPELLANT AND DIRECTOR-GENERAL OF THE NATIONAL ARCHIVES OF AUSTRALIA RESPONDENT Hocking v Director-General of the National Archives of Australia [2020] HCA 19 Date of Hearing: 4 & 5 February 2020 Date of Judgment: 29 May 2020 ORDER Appeal allowed. Set aside the orders of the Full Court of the Federal Court of Australia made on 8 February 2019 and, in their place, order that: the appeal to the Full Court be allowed; the orders of Griffiths J made on 16 March 2018 be set aside and, in their place, it be: declared that the contents of Record AA1984/609 ("the deposited correspondence") constitute Commonwealth records within the meaning of the Archives Act 1983 (Cth); ordered that a writ of mandamus issue to compel the Director-General of the National Archives of Australia to reconsider Professor Hocking's request for access to the deposited correspondence; and (iii) ordered that the Director-General of the National Archives of Australia pay Professor Hocking's costs at first instance; and the Director-General of the National Archives of Australia pay Professor Hocking's costs of the appeal to the Full Court. The Director-General of the National Archives of Australia pay Professor Hocking's costs of this appeal. On appeal from the Federal Court of Australia Representation B W Walker SC with T J Brennan for the appellant (instructed by Corrs Chambers Westgarth) S P Donaghue QC, Solicitor-General of the Commonwealth, with C L Lenehan SC, D M Forrester and J A G McComish for the respondent and the Attorney-General of the Commonwealth, intervening (instructed by Australian Government Solicitor) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Hocking v Director-General of the National Archives of Australia Administrative law (Cth) β Judicial review β Archives β Access to records β Where Governor-General engaged in correspondence with Her Majesty the Queen β Where correspondence described as personal and confidential β Where Official Secretary to Governor-General kept correspondence and made arrangement to deposit correspondence with predecessor organisation to National Archives of Australia ("Archives") β Where correspondence deposited by Official Secretary on instructions of former Governor-General after his retirement β Where Archives Act 1983 (Cth) subsequently enacted β Where s 31 of Archives Act provides that Commonwealth records within care of Archives must be made available for public access when within "open access period" β Where s 3(1) defines "Commonwealth record" as including "record that is the property of the Commonwealth or of a Commonwealth institution" β Where "Commonwealth institution" defined as including "the official establishment of the Governor-General" β Whether correspondence property of Commonwealth or of official establishment of Governor-General β Whether "property" within context of Archives Act connoted relationship involving holding of rights corresponding to ownership or possession at common law or connoted existence of legally endorsed concentration of power to control custody of record. record", Words and phrases β "administration", "archival resources of the Commonwealth", "Archives", "body politic", "care and management", "Commonwealth institution", "Commonwealth "convention", "comprehensive "correspondence", "created or received officially and kept institutionally", "Crown in right of the Commonwealth", "custody", "functional unit of government", "Governor-General", "kept by reason of", "lawful power of control", "legally endorsed concentration of power", "management", "official establishment of the and Governor-General", confidential", "personal records", "possession", "private and confidential", "property", "property of the Commonwealth or of a Commonwealth institution", "public access", "record", "right to exclude others", "the Commonwealth". "Official Secretary", "ownership", expression", "personal Constitution, covering cll 3, 4, s 2, Ch II. Archives Act 1983 (Cth), ss 2A, 3, 3C, 5, 6, 62, 64, 70, Pt V. Governor-General Act 1974 (Cth), s 6. KIEFEL CJ, BELL, GAGELER AND KEANE JJ. Introduction The Right Honourable Sir John Kerr held the constitutional office of Governor-General of the Commonwealth of Australia from 11 July 1974 until 8 December 1977. Throughout that tumultuous period in Australian constitutional and political history, Sir John engaged in "personal and confidential" correspondence with Her Majesty the Queen. Following Sir John Kerr's retirement from the office of Governor-General, a sealed package containing contemporaneous copies of correspondence sent by him to Her Majesty and originals of correspondence received by him from Her Majesty was deposited with the Australian Archives. The Australian Archives was an organisation within the Department of Home Affairs which operated under administrative arrangements first laid down during World War II. The package was deposited by the Official Secretary to the Governor-General ("the Official Secretary") under cover of a letter expressing Her Majesty's "wishes" and Sir John's "instructions" that its contents should remain "closed" for 60 years from his date of retirement, so as not to be available for public access until after 8 December 2037. Much later, another letter from the Official Secretary, sent not long after Sir John's death on 24 March 1991, announced that Her Majesty had "reduced" the closed period to 50 years, so as to allow release to the public after 8 December With the enactment of the Archives Act 1983 (Cth), to which it will be necessary to turn in some detail, the deposited correspondence became "records" forming part of the "archival resources of the Commonwealth" within the "care and management" of the National Archives of Australia ("the Archives"), the powers of which are exercisable by the Director-General of the Archives ("the Director-General"). The "archival resources of the Commonwealth" consist of "Commonwealth records" and "other material" that are "of national significance or public interest" and that "relate to", amongst other things, "the history or government of Australia". By force of the Archives Act, subject to exceptions the potential application of which are not in issue, a "Commonwealth record" within the care of the Archives must be made available for public access once the record is within the "open access period". The open access period for a Commonwealth record that came into existence before 1980 is on and after 1 January in the year that is 31 years after the year of its creation. There is no requirement for public access to archival resources of the Commonwealth that are not Commonwealth records. Professor Jennifer Hocking is an academic historian and writer with a particular interest in the period of Australian constitutional and political history in which Sir John Kerr held the office of Governor-General. On 31 March 2016, she requested access to the file within the custody of the Archives which contains the deposited correspondence. On 10 May 2016, the Director-General rejected her request for access on the basis that the contents of the file were not Commonwealth records. That characterisation of the deposited correspondence was upheld on judicial review by the Federal Court, at first instance (Griffiths J)1 and on appeal by a majority of the Full Court (Allsop CJ and Robertson J, Flick J dissenting)2. We would allow Professor Hocking's appeal from the judgment of the Full Court, declare the deposited correspondence to be Commonwealth records within the meaning of the Archives Act and order that a writ of mandamus issue to compel the Director-General to reconsider Professor Hocking's request for access. Contrary to the arguments of the parties, the outcome of the appeal does not turn on who might have been the true owner of the correspondence at common law or on expectations held at the time of its deposit with the Australian Archives by reference to constitutional convention or otherwise. The appeal turns rather on the construction and application of the elaborate statutory definition of "Commonwealth record". In particular, it turns on the application to the deposited correspondence of that part of the definition which on its proper construction operates to include records the physical custody of which is within the lawful power of control of specified functional units of government, one of which is the "official establishment of the Governor-General". The determinative consideration is that the correspondence met that part of the definition at the time of its deposit irrespective of its ownership. Explaining why that is so commences best with a description of the deposited correspondence and an explanation of the circumstances of its creation, keeping and deposit followed by an examination of the scheme and legislative history of the Archives Act. Issues of construction are then best resolved before turning to note the detail of the arguments of the parties concerning the ownership of the records and moving finally to an elucidation of the determinative consideration. 1 Hocking v Director-General of National Archives of Australia (2018) 255 FCR 1. 2 Hocking v Director-General of the National Archives of Australia (2019) 264 FCR The deposited correspondence The parties chose not to put the deposited correspondence in evidence before the Federal Court. The consequence of that forensic choice is that all that can be known for the purposes of the appeal about the contents of the deposited correspondence and about the circumstances of its creation, and of its keeping and deposit, is what appears from facts formally agreed between the parties as supplemented by such inferences as are open to be drawn from other documentary material which the parties did choose to put in evidence. letters and telegrams sent by The agreed facts record that the deposited correspondence comprises contemporaneously made copies of the Governor-General to the Queen together with originals of letters and telegrams received by the Governor-General from the Queen. All of the letters and telegrams were exchanged by the Queen through her Private Secretary ("the Private Secretary"). Most, but not all, of the Governor-General through the Official Secretary. Most, but not all, of the letters "address topics relating to the official duties and responsibilities of the Governor-General". Some of the letters "take the form of reports to The Queen about the events of the day in Australia", and some of the letters which take that form "include attachments comprising photocopies of newspaper clippings or other items of correspondence, expanding upon and corroborating the information communicated by the Governor-General in relation to contemporary political happenings in Australia". the letters were exchanged by The agreed facts also record that the correspondence was deposited with the Australian Archives by Mr David Smith "in his capacity as Official Secretary to the Governor General" under cover of a letter of deposit dated 26 August 1978. Mr Smith had been appointed to the office of Official Secretary in 1973, when Sir Paul Hasluck still held the office of Governor-General, and went on to hold the office of Official Secretary until 1990, a period which spanned the whole of the periods in which each of Sir John Kerr, Sir Zelman Cowen and Sir Ninian Stephen held the office of Governor-General. At the time of Mr Smith's appointment in 1973, the Official Secretary was an office in the Australian Public Service established under the Public Service Act 1922 (Cth) within the Prime Minister's Department. Since 24 December 1984, the office of Official Secretary has been a statutory office established under the Governor-General Act 1974 (Cth)3. Section 6(1) of the Governor-General Act 1974 (Cth), inserted in its original form by the Public Service Reform Act 1984 (Cth). The letter of deposit which Mr Smith wrote to the Australian Archives in his capacity as Official Secretary was in the following terms: "This package contains the personal and confidential correspondence between the Right Honourable Sir John Kerr, AK, GCMG, GCVO, K St J, QC, Governor-General of the Commonwealth of Australia from 11 April 1974 until 8 December 1977, and Her Majesty The Queen. In accordance with The Queen's wishes and Sir John Kerr's instructions, these papers are to remain closed until 60 years after the end of his appointment as Governor-General, ie until after 8 December 2037. Thereafter the documents are subject to a further caveat that their release after 60 years should be only after consultation with the Sovereign's Private Secretary of the day and with the Governor-General's Official Secretary of the day." Unchallenged in the appeal is a finding by the primary judge that "[a]lthough Sir John had ceased to be Governor-General when the records were placed by Mr Smith with Australian Archives, it is plain that he was doing so as Sir John's agent and not as the agent of the incumbent Governor-General"4. Against the background of the agreed fact that Mr Smith deposited the documents in his capacity as Official Secretary, the finding can only be understood as a finding that, in depositing the correspondence, Mr Smith acted not on the instructions of Sir Zelman Cowen but on the instructions of Sir John, whose affairs as Governor-General Mr Smith was in the process of winding up. More about the contents of the correspondence and about the circumstances of its creation can be gleaned from Sir John Kerr's published autobiography5 and from his unpublished journals, extracts from both of which are in evidence. The extracts reveal that Sir John engaged in the correspondence in the performance of what he understood to be a "duty" of the office of Governor-General to "keep Her Majesty informed" and that he did so "with the conscious and deliberate thought that the reports would be preserved" in the Australian Archives as a "record" of his "Governor-Generalship". From a personal letter Sir John later wrote to Mr Smith, it appears to have been the practice of Sir John as Governor-General and of Mr Smith as Official Secretary that Mr Smith checked Sir John's correspondence 4 Hocking v Director-General of National Archives of Australia (2018) 255 FCR 1 at 5 Matters for Judgment: An Autobiography (1978). before dispatch, from time to time making suggestions as to its content, and commented on "the replies from the Palace". More about the circumstances of the keeping and deposit of the correspondence emerges from other documents which were put in evidence. The most salient of those other documents are conveniently noted in broadly chronological sequence. First in chronological sequence are letters exchanged in late 1976 between Sir John Kerr and the then Private Secretary, Sir Martin Charteris. The letters are both marked "PERSONAL AND CONFIDENTIAL". Initiating the exchange, Sir John wrote to Sir Martin in the following terms: "This short letter is of a different kind from our usual correspondence. I recently had occasion to remake my will. This resulted in my realising that something should be done about my papers. These include, amongst other things, documents relevant to my Governor-Generalship, especially the crisis. They include a lot of diary notes, records of conversations and draft chapters of possible future books. Also included, of course, is my copy of the correspondence between us. I would want to appoint literary editors to look after all my other papers, and as you would expect, I am under some pressure from libraries to leave my papers in their custody to be opened at some future time fixed by me. The Australian National Library is, of course, the strongest candidate. I can make the appropriate decisions about papers which are exclusively mine, but our correspondence falls into a different category. We talked to some extent about this in London and you made the obvious point that this correspondence will have to be under embargo for a very long time. One thing that worries me is, that if I were to die ... someone has to have the custody and control of our letters. Do you have any suggestions about this? I would not wish to leave this correspondence in Government House. Each Governor-General takes with him such material. Having regard to the probable historical importance of what we have written, it has to be, I think, preserved at this end as well as in the Palace. I assume that your records there are carefully preserved. The alternatives appear to be to allow it to go into the custody of my literary editors, unopened and fully embargoed with instructions for it to be deposited in a bank or some other safe place, or to let it go to, say, the National Library completely embargoed for whatever period of time you suggest. I think I should get this matter settled so that there is no doubt what is to be done with this correspondence in the event of my death." Sir Martin Charteris' letter in reply included the following: "I have given considerable thought as to what would be the most suitable repository for your papers dealing with the Governor-Generalship and particularly the correspondence which has passed between us and I have no doubt in my own mind that the best solution, from The Queen's point of view, would be for them to be deposited in the National Library. This end of the correspondence will, of course, be preserved in the Royal Archives under complete confidentiality. If you agree to this solution it remains to be decided for what period of time your papers are placed under complete embargo. The figure we usually specify nowadays is 60 years from the end of the appointment concerned. In 1968, when the National Library of Australia tracked down the papers of the first Lord Stonehaven (Governor-General of Australia 1925-30), his son and successor offered to hand them over to that Library subject to The Queen's wishes. On Her Majesty's instructions we stipulated, and the National Library accepted, that they should remain closed until 60 years after the end of the appointment. It seems therefore very suitable that your papers should be dealt with in the same way." The exchange reveals that, although Sir John Kerr understood the correspondence to have been within his power of disposition, he did not understand his choice as to the disposition of the correspondence to be unfettered. He understood its historical significance to be such that it needed to be preserved in the national interest. And he understood Her Majesty's interest in its confidentiality to be such that he needed to consult with the Private Secretary as to the course he should take. Next in chronological sequence is a letter sent in October 1977 from Mr Malcolm Fraser, as Prime Minister, to Sir John Kerr, as Governor-General. The letter refers to proposed legislation then in the form of a draft of what would become the Archives Bill and continues: "The provisions of the draft Bill, clause 18, relating to compulsory transfer, custody and access provisions do not apply to the records of a Governor-General or his Office. It seems to me that a proper distinction should be made between Government House records and the records of executive government and this is reflected in the Bill as drafted. Government House records nevertheless are part of the history of Australia and it is proper that they should receive all the care and protection possible. For that purpose clause 21 provides that Australian Archives may enter into arrangements with a Governor-General to take custody of records under access rules which a Governor-General may lay down. Royal Household records, including The Queen's correspondence with Governors-General, are protected in Britain under special archives rules. I am sure you will agree that there should be no lesser protection in Australia. You are probably aware that Lord Casey, and now Lady Casey, and Sir Paul Hasluck have made arrangements in respect of the custody of papers relating to their terms as Governor-General. I hope that it will be possible, when the legislation is passed, for your Office to move promptly to enter into arrangements with the Australian Archives for the protection of records arising from your own period in office. In due course I shall be bringing this matter under the notice of the incoming Governor-General." As will appear from the legislative history of the Archives Act to be traced later in these reasons, provisions of the nature described in the Prime Minister's letter were in fact incorporated in the Archives Bill in the form in which it was introduced into the Senate in June 1978, but came to be omitted from the Archives Bill in the form in which it was ultimately reintroduced into the Senate in June 1983 to result in the eventual enactment of the Archives Act. The terms of the letter indicate that the Prime Minister was aware of the existence of correspondence between the Governor-General and the Queen and considered that correspondence to form a special category of records within the general description in his letter of "Government House records". In the penultimate sentence, the Prime Minister was careful to express hope, rather than to give advice, that all Government House records relating to Sir John Kerr's term in the office of Governor-General would soon become the subject of an arrangement between the Governor-General's "Office" and the Australian Archives that would ensure their preservation. Following in chronological sequence soon after the Prime Minister's letter to the Governor-General is a letter sent in November 1977 from the then Director-General of the Australian Archives, Professor R G Neale, to Mr Smith in his capacity as Official Secretary. The letter documents an arrangement the entering into of which can be inferred to have been prompted by the Prime Minister's expression of hope to the Governor-General. Professor Neale confirmed in the letter that, in a conversation between him and Mr Smith on "the question of the transfer of Sir John's papers", "it was agreed that both the originals and the copies of the papers would be transferred to the custody of the Australian Archives". Professor Neale would wait for Mr Smith to tell him when Mr Smith wished the Australian Archives to take custody of the papers. On "[t]he question of access", Professor Neale added, "[g]iven the nature of the sensitive papers, these would normally be administered by the official policy governing such papers whether in the custody of the Australian Archives or of the Royal Archives at Windsor". Next in chronological sequence are letters sent from Mr Smith to Sir John Kerr after his departure from Government House during the period between his retirement from the office of Governor-General on 8 December 1977 and the deposit of the correspondence with the Archives on 26 August 1978. The letters are handwritten on "Government House" letterhead. They reveal that Mr Smith, acting alone and outside working hours, laboriously made photocopies of the correspondence and then sent those photocopies to Sir John. Mr Smith referred to the correspondence as then on a "file" and described that file as being kept "in my strong-room under absolute security until the task is completed and the original file is in Archives". When the photocopying was completed, Mr Smith wrote to Sir John announcing that "[t]he task is done" and that "[t]he files will now be sealed and lodged with the Director-General of Archives, with instructions that they are to remain closed until after 8 December 2037, ie 60 years after you left office". As to the fate of the photocopies, the agreed facts reveal that a member of the Kerr family arranged for them to be collected by the Archives not long after the death of Sir John's widow on 16 December 1997. Whether or not the photocopies are Commonwealth records is not in issue in the appeal. Also in evidence are documents which indicate that correspondence between Her Majesty and each of Sir Paul Hasluck, Sir Zelman Cowen and Sir Ninian Stephen has come into the care and management of the Archives. The contents of those documents also provide some evidence of the circumstances in which that occurred. In relation to Sir Paul Hasluck, documents comprising his "private notebooks and personal files", itemised to include "copies of despatches written by the Governor-General for the information of Her Majesty the Queen and the acknowledgements made of them by the Private Secretary to the Queen", were deposited with the Australian Archives on 16 December 1974. The deposit was apparently made by Sir Paul himself. Much later, on 29 May 1989, Sir Paul executed an "Instrument of Deposit" in which he stipulated that, except for those which would be exempt under the provisions of the Archives Act if they were Commonwealth records, the deposited documents "will be made available for access by the public when a period of 30 years has elapsed since the end of the calendar year in which they were created". In relation to Sir Zelman Cowen and Sir Ninian Stephen, the "personal and confidential" correspondence between each of them and Her Majesty was deposited with the Archives by Mr Smith in his capacity as Official Secretary under cover of letters of deposit dated 14 June 1984 and 31 August 1990 respectively. The letters are materially identical to the letter of deposit dated 26 August 1978 under cover of which Mr Smith had deposited with the Australian Archives the "personal and confidential" correspondence between Sir John Kerr and Her Majesty. They express the "wishes" of Her Majesty and the respective "instructions" of Sir Zelman and Sir Ninian that the correspondence should remain closed for 60 years from the dates of their retirements, so as not to be released to the public until after 29 July 2042 in the case of Sir Zelman and until after 16 February 2049 in the case of Sir Ninian. Next in chronological sequence of the documents in evidence are letters exchanged in mid-1991 between Mr Douglas Sturkey, who had by then succeeded Mr Smith as Official Secretary, and Mr George Nichols, who was then Director-General. Each wrote in his official capacity. The full text of the letter from the Official Secretary, dated 23 July 1991, is as follows: "Under cover of letters dated 31 August 1990, 14 June 1984 and 26 August 1978, my predecessor forwarded sealed packages containing the personal and confidential correspondence of Sir Ninian Stephen, Sir Zelman Cowen and Sir John Kerr respectively with The Queen. In those letters the requirement that the papers remain closed for 60 years after the end of the appointment of each Governor-General was stated. The Queen has now reduced this period to 50 years, subject to the approval in each case of the Sovereign's Private Secretary and the Official Secretary to the Governor-General. I have taken this up with Sir Zelman Cowen and Sir Ninian Stephen, both of whom have signified their concurrence in the new arrangements. Accordingly, the dates of release of the three packages should now be: after 8 December 2027 Sir Zelman Cowen after 29 July 2032 Sir Ninian Stephen after 16 February 2039 I should be grateful if you could acknowledge receipt of this letter and agree to observe the new requirements." The relevant text of the Director-General's response the next month is as follows: "I refer to your letters of 23 July 1991 concerning the new arrangements decided by The Queen regarding the release of personal and confidential from Australian Governors-General, and correspondence Mr Hayden's enquiry whether we hold copies of such correspondence from previous incumbents which might now be released under the new arrangements. to her Concerning the sealed packages, held by Australian Archives, of correspondence of Sir John Kerr, Sir Zelman Cowen and Sir Ninian Stephen respectively with The Queen, I have noted the date after which the contents of each package may be released, subject to the approval in each case of the Sovereign's Private Secretary and the Official Secretary to the Governor- General. I will ensure that these requirements are observed. The Australian Archives holds no records of previous Governors-General which might now be released under the 50-year rule. However, we do hold copies of Sir Paul Hasluck's personal and confidential despatches to The Queen or her Private Secretary while he was Governor-General. We also hold some correspondence of Lord Casey with The Queen or her Private Secretary, including some confidential correspondence. On his retirement as Governor-General, Sir Paul deposited with the Archives a locked, sealed case containing three categories of records. One of these categories consists of the copies of despatches referred to above. The arrangement agreed between Sir Paul and my predecessor is that the case will be opened in 1999, 30 years after Sir Paul became Governor- General, so that some of the records in the other two categories can be made available for public access on 1 January 2000, in accordance with the 30-year rule. The case is to be opened by the Director-General of the Archives of the Governor-General as sole witness, so that the copies of despatches referred to above, if exposed, can then and there be resealed and repackaged unread, and the new package endorsed with the action taken and the necessary directions for the future. the Official Secretary the day alone with These directions were to be that these papers should remain closed for a period of 60 years after Sir Paul ceased to be Governor-General (that is, until after 11 July 2034), and that thereafter access should only be after consultation with the Sovereign's Private Secretary of the day. It would now be appropriate for the directions to state that the papers should remain closed until after 11 July 2024, and that thereafter access should only be with the approval of the Sovereign's Private Secretary and the Official Secretary to the Governor-General. I assume you will wish to contact Sir Paul to seek his concurrence in the new arrangements, and I would appreciate your further advice in due course. The National Library's Guide to Collections of Manuscripts relating to Australia indicates that the National Library holds papers of Sir Paul Hasluck and Lord Casey, six earlier Governors-General, and one Administrator of the Commonwealth, including Baron Tennyson's secret despatches, Viscount Novar's official despatches to the King and letters to and the King's Private Secretaries, Viscount Stonehaven's correspondence with the King and the King's Private Secretaries and some papers of Sir Isaac Isaacs. Only some of the Stonehaven papers appear to be affected by the new 50-year rule." from Two aspects of the Director-General's response to the Official Secretary are noteworthy. The first is that the Director-General was unequivocal in adopting the position that the Official Secretary's conveyance of the "decision" of Her Majesty was effective to create a "new 50-year rule". The operation of that new 50-year rule was accepted to be effective to reduce the closed periods stipulated by the earlier letters of deposit in which the former Official Secretary had conveyed the wishes of Her Majesty and instructions of Sir John Kerr, Sir Zelman Cowen and Sir Ninian Stephen respectively. It was also accepted to be effective to increase the closed period stipulated by Sir Paul Hasluck in his Instrument of Deposit. The second and more specific of the noteworthy aspects of the Director- General's response is that the then Official Secretary's conveyance of Her Majesty's decision was accepted by him to be effective to reduce the closed period stipulated in the letter dated 26 August 1978 on the instructions of Sir John Kerr even though it was apparent from the terms of the letter dated 23 July 1991 that Sir John Kerr had not been consulted about the reduction and had not consented to the reduction. Indeed, Sir John had died several months earlier. Quite properly, the position adopted by the then Director-General has been maintained by the current Director-General as respondent to the appeal. There remains finally to note an exchange of letters in February 2017 between the Official Secretary, who was then Mr Mark Fraser, and the Private Secretary, who was then Sir Christopher Geidt. The exchange occurred after Professor Hocking had commenced the proceeding for judicial review in the Federal Court and in contemplation of that proceeding. The Official Secretary initiated the exchange by writing to the Private Secretary attaching copies of an earlier letter from the Official Secretary, then Mr Stephen Brady, to the Private Secretary dated 7 April 2011 and of the Private Secretary's letter in reply dated 27 May 2011. In the context of discussing implications of the Freedom of Information Act 1982 (Cth), those earlier letters had recorded a firm mutual understanding that "correspondence between the Office and the Palace" occurred "in confidence". In the second of them, the Private Secretary had stated "we would assert that such correspondence is covered by a convention of confidentiality due to the constitutional position of the Sovereign and the Monarchy". The Official Secretary's letter to the Private Secretary in February 2017 includes the following: "It is the understanding of the Office of the Official Secretary to the Governor-General that it is a matter of long-standing convention that non- official correspondence between the Monarch and Her Governors-General across the 15 Realms outside the United Kingdom are private and confidential communications, not forming part of any official government records. We note that underpinning this convention is the fundamental British constitutional principle that communications between The Queen and Her Ministers and other public bodies should remain confidential, and that the political neutrality of The Queen and the Royal Family, and the Royal Household acting on their behalf, should be maintained. By the vice-regal extension, we understand communications with representatives of The Queen also fall within the terms of this principle. It is understood that this long-standing convention exists in order for The Sovereign and Her representatives in the Commonwealth Realms to communicate in confidence and thereby permits and facilitates such communications. The confidential nature of such correspondence, including correspondence between the Palace and the Office, has been confirmed in our exchange of letters dated 7 April 2011 and 27 May 2011 respectively ... It appears to be very much a matter of mutual understanding that communications between The Queen and the Governor-General, and the offices of the Private Secretary and the Official Secretary respectively, are made on a confidential basis." The letter goes on to refer to an understanding on the part of the Official Secretary that "The Queen's correspondence with Governors-General" received protection in the United Kingdom under "special archives rules" drawing a distinction between the "Royal Archives" and the "National Archives". The material part of the Private Secretary's letter in response to the Official Secretary in February 2017 is as follows: "The Royal Household agrees with the assessment outlined in your predecessor's letter of 7th April 2011 that correspondence between the Sovereign and her Governors-General and their respective offices are made in confidence. These are essentially private communications which are inherently sensitive. It has therefore been my understanding, and that of my predecessors, that the records in question are not caught by the Archives Act 1983, but are instead retained on the advice of the Royal Household for a minimum period of 50 years to reflect the uniqueness of the length of a reign. For the avoidance of doubt, I can confirm that the embargo period of 50 years applies in each of Her Majesty's 15 Commonwealth Realms, and the same convention of confidentiality is attached to communications between The Queen and her Ministers in the UK. As my letter of 27th May 2011 makes clear, it is my strong view that a convention of confidentiality is necessary to protect the privacy and dignity of the Sovereign and her Governors-General, and to preserve the constitutional position of the Monarch and the Monarchy. This is clearly reflected in the special archives arrangements that are in place in the UK for the retention of these records. You are correct in noting the distinction between the Royal Archives at Windsor, which is a private archive not subject to FOI or the Public Records Act 1958, and The National Archives at Kew, which is the national archive for the United Kingdom and a public authority subject to information access legislation. I hope that the above serves to clarify my agreement with the position outlined in your letter. Given the significance of the principles under examination, I am content for this letter to form part of the official submissions to the Court." The Archives Act The Archives Act commenced on 6 June 1984. It has since been amended numerous times. Its object, as now expressed in its text, is "to provide for a National Archives of Australia", the functions of which are stated to include "identifying the archival resources of the Commonwealth" and "preserving and making publicly available the archival resources of the Commonwealth"6. To that end, the Archives Act mandates existence of the Archives as an "organization", being "a group of persons centrally controlled and acting in concert to perform particular functions"7, within the Department of the Minister administering the Archives Act8. Under current administrative arrangements, it is in the Attorney-General's Department9. The Archives is therefore not "a legal entity independent of the executive government"10. Like the Department in which it is located, it lacks a distinct legal personality. The Archives Act mandates too the appointment or engagement under the Public Service Act 1999 (Cth) of the Director-General11. Upon the Director- General it confers a number of specific powers and imposes a number of specific duties and in the Director-General it reposes general authority to exercise any of the powers and perform any of the duties which it confers or imposes on the Archives12. For the purposes of the Archives Act, the "archival resources of the Commonwealth" consist of such "Commonwealth records and other material" as fulfil two conditions. One is that they are of "national significance or public interest". The other is that they "relate to", amongst other things, "the history or government of Australia" or "a person who is, or has at any time been, associated with a Commonwealth institution"13. One of the specific powers conferred on the Section 2A of the Archives Act. 7 Church of Scientology v Woodward (1982) 154 CLR 25 at 69. Section 5(1) of the Archives Act. 9 Administrative Arrangements Order, 5 December 2019, Schedule Pt 2. 10 Church of Scientology v Woodward (1982) 154 CLR 25 at 57. 11 Section 7(1) of the Archives Act. 12 Section 7(2) of the Archives Act. 13 Section 3(2) of the Archives Act. Director-General is, in writing, to "determine that a specified Commonwealth record or other material is part of the archival resources of the Commonwealth"14. The term "material" means "records and other objects"15. The term "record" means "a document, or an object, in any form (including any electronic form) that is, or has been, kept by reason of" either "information or matter that it contains or that can be obtained from it" or "its connection with any event, person, circumstance or thing"16. The term "document" means "any record of information" and includes "anything on which there is writing"17. The critical expression "Commonwealth record" is in relevant part defined to mean "a record that is the property of the Commonwealth or of a Commonwealth institution"18 other than a record of that description which is "exempt material" because it is included in a collection maintained by another custodial institution, such as the National Library of Australia19. The cognate expression "current Commonwealth record" is defined to mean "a Commonwealth record that is required to be readily available for the purposes of a Commonwealth institution"20. To understand the definition of "Commonwealth record", it is necessary to refer to the definition of "Commonwealth institution", which is as follows21: "Commonwealth institution means: the official establishment of the Governor-General; the Executive Council; 14 Section 3C(1) of the Archives Act. 15 Section 3(1) of the Archives Act, definition of "material". 16 Section 3(1) of the Archives Act, definition of "record". 17 Section 2B of the Acts Interpretation Act 1901 (Cth), definition of "document". 18 Section 3(1) of the Archives Act, definition of "Commonwealth record", para (a). 19 Section 3(1) of the Archives Act, definition of "exempt material". 20 Section 3(1) of the Archives Act, definition of "current Commonwealth record". 21 Section 3(1) of the Archives Act, definition of "Commonwealth institution". the Senate; the House of Representatives; a Department; a Federal court or a court of a Territory other than the Northern Territory or Norfolk Island; an authority of the Commonwealth; or the Administration of an external Territory other than Norfolk Island." To understand the scope of the definition of "Commonwealth institution", it is in turn necessary to refer to the definitions of "Department" and "authority of the Commonwealth". A "Department" is either a "Department of the Australian Public Service" established under the Public Service Act 1999 "that corresponds to a Department of State of the Commonwealth", administered by a Minister of State appointed by the Governor-General under s 64 of the Constitution, or a "Parliamentary Department"22, being a Department of the Parliament established under the Parliamentary Service Act 1999 (Cth)23. The expression "authority of the Commonwealth" is elaborately defined as follows24: "authority of the Commonwealth means: an authority, body, tribunal or organization, whether incorporated or unincorporated, established for a public purpose: by, or in accordance with the provisions of, an Act, regulations made under an Act or a law of a Territory other than the Northern Territory or Norfolk Island; by the Governor-General; or (iii) by, or with the approval of, a Minister; 22 Section 3(1) of the Archives Act, definition of "Department". 23 Section 3(1) of the Archives Act, definition of "Parliamentary Department". 24 Section 3(1) of the Archives Act, definition of "authority of the Commonwealth". the holder of a prescribed office under the Commonwealth; or a Commonwealth-controlled company or a Commonwealth- controlled association; but does not include: a court; the Australian Capital Territory; a body established by or under an enactment within the meaning of the Australian Capital Territory (Self-Government) Act 1988; the Northern Territory; or the Administration of an external Territory." company" Last in the sequence of interlocking definitions which bear on the scope of the definition of "Commonwealth institution" are definitions of the expressions "Commonwealth-controlled "Commonwealth-controlled association". A "Commonwealth-controlled company" is "an incorporated company over which the Commonwealth is in a position to exercise control" other than "a company that is declared by the regulations not to be a Commonwealth- controlled company"25. A "Commonwealth-controlled association" is "an association over which the Commonwealth is in a position to exercise control" other than "an association that is declared by the regulations not to be a Commonwealth-controlled association"26. and Bearing also on the primary meaning of "a record that is the property of the Commonwealth or of a Commonwealth institution" in the definition of "Commonwealth record" is the circumstance that two categories of records are "deemed to be" Commonwealth records27. One comprises records of a "Royal 25 Section 3(1) of the Archives Act, definition of "Commonwealth-controlled company". 26 Section 3(1) of the Archives Act, definition of "Commonwealth-controlled association". 27 Section 3(1) of the Archives Act, definition of "Commonwealth record", para (b). Commission" (defined to mean "a Commissioner or Commissioners appointed by the Governor-General in the name of the Queen to make inquiry and report upon any matter"28), but only from the time when those records are no longer required for the purposes of the Royal Commission29. The other comprises "records of which the Commonwealth or a Commonwealth institution has, or is entitled to have, possession" in "cases or circumstances" specified by regulation30. In addition, a record "held by or on behalf of the Parliament or a House of the Parliament" is "taken to be the property of the Commonwealth"31. Part II of the Archives Act specifies the functions and powers of the Archives. The functions of the Archives include to "ensure the conservation and preservation of the existing and future archival resources of the Commonwealth"32, to "have the care and management of Commonwealth records, other than current Commonwealth records, that ... are part of the archival resources of the Commonwealth"33, and to "make Commonwealth records available for public access" in accordance with Pt V of the Archives Act34. By s 5(2)(f), the functions of the Archives also include "to seek to obtain, and to have the care and management of, material (including Commonwealth records) not in the custody of a Commonwealth institution, that forms part of the archival resources of the Commonwealth and, in the opinion of the Director-General, ought to be in the care of the Archives". A record is in the "care" of the Archives if it is in the "custody" of the Archives or in the "custody" of a person under an arrangement with the 28 Section 3(1) of the Archives Act, definition of "Royal Commission". 29 Section 22(2) of the Archives Act. 30 Section 3(6) of the Archives Act. 31 Section 3(5) of the Archives Act. 32 Section 5(2)(a) of the Archives Act. 33 Section 5(2)(e)(i) of the Archives Act. 34 Section 5(2)(j) of the Archives Act. Archives35. The word "custody" in that context plainly refers to physical custody, meaning simply "physical control" even as a bailee36. Insofar as an arrangement made in the performance of the function conferred by s 5(2)(f) covers access to records accepted by the Archives under the arrangement, the arrangement attracts the operation of s 6(2), which is in turn qualified by s 6(3). The former provides: "Where, in the performance of its functions, the Archives enters into arrangements to accept the care of records from a person other than a Commonwealth institution, those arrangements may provide for the extent (if any) to which the Archives or other persons are to have access to those records and any such arrangements have effect notwithstanding anything contained in Division 3 of Part V." The latter provides: "Where an arrangement entered into by the Archives to accept the care of records from a person other than a Commonwealth institution relates to a Commonwealth record, then, to the extent that that arrangement, in so far as it relates to such a record, is inconsistent with a provision of Part V, that provision shall prevail." The powers of the Archives enable it to do all things necessary or convenient to be done in connection with the performance of its functions37. Specifically included within those powers are to "establish and control repositories or other facilities to house or exhibit" records in its care38 and to "make arrangements for the acquisition by the Commonwealth of, or of copyright in 35 Section 3(1) of the Archives Act, definition of "care", and s 64 of the Archives Act. 36 cf Federal Commissioner of Taxation v Australia and New Zealand Banking Group Ltd (1979) 143 CLR 499 at 521, 546. See also at 533, 541. 37 Section 6(1) of the Archives Act. 38 Section 6(1)(a) of the Archives Act read with s 3(1) of the Archives Act, definition of "material of the Archives". relation to, or arrangements relating to the custody of, material that forms part of the archival resources of the Commonwealth"39. Part V of the Archives Act governs the management and preservation of Commonwealth records. Within Pt V, Div 2 is concerned with dealings with Commonwealth records and Div 3 is concerned with access to Commonwealth records. Division 2 of Pt V contains a general prohibition against "the destruction or other disposal of a Commonwealth record", "the transfer of the custody or ownership of a Commonwealth record" and "damage to or alteration of a Commonwealth record"40 except as "required by any law", "with the permission of the Archives or in accordance with a practice or procedure approved by the Archives", "in accordance with a normal administrative practice" not disapproved by the Archives, or "for the purpose of placing Commonwealth records that are not in the custody of the Commonwealth or of a Commonwealth institution in the custody of the Commonwealth or of a Commonwealth institution that is entitled to custody of the records"41. It imposes a duty on "[t]he person responsible for the custody" of a Commonwealth record that is "in the custody of a Commonwealth institution other than the Archives" to "cause the record to be transferred to the care of the Archives in accordance with arrangements approved by the Archives" if the record is determined by the Director-General to be part of the archival Division 3 of Pt V centrally imposes a duty on the Archives to cause a Commonwealth record, other than an "exempt record", that is in the "care" of the Archives or in the "custody" of a Commonwealth institution to be made available for public access once the record is within the "open access period"43, and confers a corresponding entitlement on "any person" to access such Commonwealth 39 Section 6(1)(c) of the Archives Act. 40 Section 24(1) of the Archives Act. 41 Section 24(2) of the Archives Act. 42 Section 27 of the Archives Act. 43 Section 31 of the Archives Act. record44. Division 5 of Pt V also confers power on the Minister, in accordance with arrangements approved by the Prime Minister, to cause all records in a particular class of Commonwealth records not in the open access period to be available for public access45. The open access period for a Commonwealth record that came into existence before 1980, as has already been noted, begins on 1 January 31 years after the year of creation of the record46. Where, in the ordinary course of the administration of the Archives Act, access is given to a Commonwealth record that is required to be made available for public access because it is in the open access period or that is authorised by the Minister to be made available for public access, "no action for defamation, breach of confidence or infringement of copyright lies, by reason of the authorizing or giving of the access, against the Commonwealth or any person concerned in the authorizing or giving of the access"47. Having the potential to bear on an arrangement entered into by the Australian Archives before the commencement of the Archives Act is a transitional provision, s 70(3), which provides: "Where, immediately before the commencement of Part II, any records were in the custody of the establishment known as the Australian Archives, as existing at that time, under arrangements by which the custody of the records was accepted from a person other than a Commonwealth institution by the Commonwealth, or by an authority or person acting on behalf of the Commonwealth, those arrangements (including any provision of those arrangements concerning access to or disposal of those records) have effect from that commencement as if they were made, after that commencement, by that person with the Archives, and subsection 6(2) applies accordingly." The relevant effect of s 70(3) is that an arrangement by which the Australian Archives before 6 June 1984 accepted custody of records from a person other than a Commonwealth institution must be given effect under the Archives Act as if the arrangement had been made by the Archives in the performance of the function conferred by s 5(2)(f). As spelt out in s 70(3), such a prior arrangement in that way 44 Section 36(1) of the Archives Act. 45 Section 56 of the Archives Act. Item 1 of the table set out in s 3(7) of the Archives Act. 47 Section 57(1)(a) and (1A) of the Archives Act. attracts the operation of s 6(2). If it attracts the operation of s 6(2), the prior arrangement also necessarily attracts the operation of s 6(3). Legislative history The parliamentary process which culminated in the enactment of the Archives Act was unusually long. The process overlapped with, and at various stages influenced, the sequence of events resulting in the deposit of the correspondence already recounted. The parliamentary process commenced with the introduction of the Archives Bill into the Senate in June 1978. There it became the subject of parallel inquiries by the Senate Standing Committee on Constitutional and Legal Affairs48 and the Senate Standing Committee on Education and the Arts49, both of which reported in October 1979. However, it lapsed upon the prorogation of the Parliament which preceded the general election of October 1980. The Government's response to the reports of the two Senate Committees was incorporated into the Archives Bill as reintroduced into the Senate in 1981 before itself lapsing upon the dissolution of the Parliament which preceded the general election of March 1983. Following the change of Government which occurred at that general election, a further revised version of the Archives Bill was introduced into the Senate in June 1983. The passage of that version, with amendments, resulted in enactment of the Archives Act in November 1983. The three iterations of the Archives Bill involved no change to its basic structure. The central concept of the "archival resources of the Commonwealth" as consisting of "Commonwealth records and other material" and the critical definition of a "Commonwealth record" as "a record that is the property of the Commonwealth or of a Commonwealth institution" remained unchanged throughout the parliamentary process. So too did the material terms of the provisions which came to be enacted as ss 5(2)(f), 6(2) and 70(3). 48 Senate Standing Committee on Constitutional and Legal Affairs, Freedom of Information (1979). 49 Senate Standing Committee on Education and the Arts, Report on the Archives Bill The provenance of the definition of "Commonwealth record" as "a record that is the property of the Commonwealth or of a Commonwealth institution" was examined by the Australian Law Reform Commission in the context of undertaking a review of the Archives Act which it commenced in 1996 and concluded in 199850. The Commission then reported that successive drafts of the Archives Bill in 1975 and 1976 had moved from "a provenance definition through a custodial definition ('a record that is held in official custody on behalf of the government')" to "the present property definition". The Commission noted "[a]necdotal evidence from those involved in drafting the legislation" which indicated that the property definition was preferred for a number of reasons. One was that "ownership was a term which was generally understood and which defined clearly a body of material to which the legislation would apply". Another was that "as owner of the records the Commonwealth already exercised many of the rights (for example, in relation to custody, disposal and public access) proposed to be included in the legislation"51. Written and oral submissions to the Senate Standing Committee on Education and the Arts by Professor Neale, in his capacity as Director-General of the Australian Archives, shed light on a link between the preference of those involved in the early stages of the drafting of the Archives Bill for a "property definition" of "Commonwealth record" and the preference of those involved in those early stages of drafting for the inclusion of the provisions which came to be enacted as ss 5(2)(f), 6(2) and 70(3). Professor Neale explained that the Archives Bill contained "no clause whatsoever giving the Archives or the Government the right to recover Commonwealth records" and that "[t]he Commonwealth's power to recover Commonwealth-owned records" was to remain as it always had been under the general law52. Neither the proposed definition of "Commonwealth record" nor the proposal to make provision for categories of records to be deemed to be Commonwealth records was intended to create a new the drafting intent was that 50 Australian Law Reform Commission, Australia's Federal Record: A review of Archives Act 1983, Report No 85 (1998). 51 Australian Law Reform Commission, Australia's Federal Record: A review of Archives Act 1983, Report No 85 (1998) at 99 [8.13]. 52 Australia, Senate, Standing Committee on Education and the Arts (Reference: Archives Bill) 1978-79, Official Hansard Transcript of Evidence (1979) at 20. legal right to recovery53. Deeming was intended simply to ensure the coverage of records in categories where there might be doubt about the application of the definition54. Professor Neale also explained that in practice "[t]here are many papers of an undeniably official character which might not satisfy the property test which is used to identify Commonwealth records" and that "given modern copying technology, there may often be real doubt as to where ownership of a particular record resides"55. He explained that it was not the policy of the Government "to attempt to recover Commonwealth records ... in the custody of persons or institutions other than Commonwealth institutions" and referred to the historical fact that no legal recovery action had ever been attempted56. Against that background, the practical difficulty which had confronted the Australian Archives in the past and which would continue to confront the Archives in the future arose from the fact that there was a "grey area between personal and official". The problem was that "some" former "Ministers and officials" regarded as "personal papers" what "others" would call "official papers" and what "others" would call "Commonwealth records in terms of the Bill". Professor Neale was able to "say categorically that in many collections of personal papers there exist official government files"57. Professor Neale explained that the purpose of the proposed s 5(2)(f) was to enable the Archives to "collect certain material without regard for ownership" so as "to avoid the need to establish ownership before taking custody of official 53 See eg Australia, Senate, Standing Committee on Education and the Arts (Reference: Archives Bill) 1978-79, Official Hansard Transcript of Evidence (1979) 54 Australia, Senate, Standing Committee on Education and the Arts (Reference: Archives Bill) 1978-79, Official Hansard Transcript of Evidence (1979) at 169. 55 Australia, Senate, Standing Committee on Education and the Arts (Reference: Archives Bill) 1978-79, Official Hansard Transcript of Evidence (1979) at 19. 56 Australia, Senate, Standing Committee on Education and the Arts (Reference: Archives Bill) 1978-79, Official Hansard Transcript of Evidence (1979) at 21. 57 Australia, Senate, Standing Committee on Education and the Arts (Reference: Archives Bill) 1978-79, Official Hansard Transcript of Evidence (1979) at 42-43. material in private hands and to avoid the undesirable splitting of groups of papers where official and private material is inextricably mixed"58. He explained that, in combination with the proposed s 6(2), the proposed s 5(2)(f) would provide the Archives with statutory authority to continue the longstanding practice of the Australian Archives of approaching "Ministers and officials" at or around the time of their retirements to offer them the ability to deposit the whole of their collections of papers without "having to decide which papers are Commonwealth-owned". He recounted that "[t]his approach has been made for many years and has been accepted by many former officials, Ministers, Prime Ministers and Governors- General"59. He explained that the intention was to ensure "that the Archives can continue to do as it always has done, namely to offer donors the right to state conditions of access on the whole of their deposits"60. To be emphasised is that Professor Neale's explanation was in the context of the Archives Bill as first introduced in 1978. In that original form, the Archives Bill contained no clause corresponding to s 6(3) of the Archives Act. Moreover, as foreshadowed to the Governor-General by the Prime Minister in his letter of October 1977, the Archives Bill in that form contained in cll 18 and 21 provisions which would have operated to exclude "records of the Governor-General or of a former Governor-General" from the application of Divs 2 and 3 of Pt V and to allow a "person having the control of the custody" of such records to enter into an arrangement for the Archives to "have or retain the custody of those records" including by providing for the extent, if any, to which the Archives or any other persons were to have access to them. None of that was altered when the Archives Bill was reintroduced in 1981. The Archives Bill as reintroduced in 1983, however, took quite a different approach. Whilst retaining substantively unaltered the text which became ss 5(2)(f), 6(2) and 70(3) of the Archives Act, it incorporated two significant departures from the earlier versions. One was the deletion of the proposed exclusion by cll 18 and 21 of records of the Governor-General or of a former 58 Australia, Senate, Standing Committee on Education and the Arts (Reference: Archives Bill) 1978-79, Official Hansard Transcript of Evidence (1979) at 21. 59 Australia, Senate, Standing Committee on Education and the Arts (Reference: Archives Bill) 1978-79, Official Hansard Transcript of Evidence (1979) at 368. 60 Australia, Senate, Standing Committee on Education and the Arts (Reference: Archives Bill) 1978-79, Official Hansard Transcript of Evidence (1979) at 368. Governor-General from the application of Divs 2 and 3 of Pt V. The other was the insertion of the reference to "the official establishment of the Governor-General" into the definition of "Commonwealth institution". In his second reading speech in the Senate, the Attorney-General explained the relevantly altered policy intent to be that "[t]he provisions of the legislation will apply to the records of the official establishment of the Governor-General, but not to his private or personal records"61. Another significant departure from the text of the earlier versions of the Archives Bill was then made by amendment moved on behalf of the Government during the committee stage in the Senate. The amendment involved the insertion of the provision which came to be enacted as s 6(3). The policy intent, as explained in a Revised Explanatory Memorandum, was "to ensure that normal government controls over Commonwealth records ... will apply to any Commonwealth records which might appear in collections of personal papers deposited with the Archives" but "not in any way [to] affect the freedom of a donor to determine conditions of access to personal papers"62. The net result of those departures in 1983 from the Archives Bill as first introduced in 1978 and as reintroduced in 1981 was that, although the machinery provisions of ss 5(2)(f), 6(2) and 70(3) were retained in the Archives Act as enacted, donors of records were no longer to have what Professor Neale had described as "the right to state conditions of access on the whole of their deposits". Instead, s 6(3) would ensure that Div 3 of Pt V would govern access to any Commonwealth records deposited under any new arrangement with the Archives in the exercise of the function conferred on it by s 5(2)(f) and would govern as well access to any Commonwealth records already deposited under any pre-existing arrangement with the Australian Archives to be given ongoing effect by s 70(3). That was to be so irrespective of the terms of the arrangement. At the same time, the insertion of the reference to "the official establishment of the Governor- General" into the definition of "Commonwealth institution" would both expand the category of "Commonwealth records" and narrow the category of arrangements to be given ongoing effect by s 70(3) as arrangements by which the custody of records "was accepted from a person other than a Commonwealth institution". As will be seen, those changes to the scheme of the Archives Act as enacted in November 1983 from the scheme of the Archives Bill as first introduced in June 1978 are significant both to the characterisation for the purpose of s 70(3) of the 61 Australia, Senate, Parliamentary Debates (Hansard), 2 June 1983 at 1184. 62 Australia, Senate, Archives Bill 1983, Revised Explanatory Memorandum at [1]-[2]. arrangement that had been entered into between Professor Neale in his capacity as Director-General of the Australian Archives and Mr Smith in his capacity as Official Secretary in or about November 1977 and to the characterisation for the purpose of Div 3 of Pt V of the correspondence which Mr Smith in his capacity as Official Secretary had deposited with the Australian Archives pursuant to that arrangement on 26 August 1978. The statutory changes were almost certainly unforeseen by either party to the arrangement. Four issues of construction To address the ultimate question of whether each item of the deposited correspondence is properly characterised as "a record that is the property of the Commonwealth or of a Commonwealth institution" within the meaning of the Archives Act, it is necessary to determine the proper construction of the four principal statutory terms which combine to give that composite expression its relevant content. The four statutory terms are "record", "the Commonwealth" as distinct from "a Commonwealth institution", "the official establishment of the Governor-General" as a Commonwealth institution, and perhaps most importantly, "property". "record" Two features of the statutory definition of "record" are significant. The first is that a record is an "object" β a tangible thing β which has an existence that is independent of any informational content it may have and that is separate from any copyright in the form of any informational content it may have. In the case of a record that is a document, including a record that is a paper copy of a letter sent or the original of a letter received, the record is the document as a physical thing: the paper on which words are written or copied. The second is that a thing does not become a "record" in virtue of being created or received but in virtue of being "kept by reason of" its informational content or its connection with an event, person or circumstance. To keep a thing for such a reason is to maintain the physical integrity of the thing for that reason. Whether, and if so when, a thing is so kept is an objective question the answer to which must ordinarily turn on the applicable system of record-keeping. For the purposes of the Archives Act, a document created or received is therefore not necessarily a "record". Depending on the applicable system of record- keeping, working documents such as notes, aide memoires and preliminary drafts might never become records. Originals of correspondence received and copies of correspondence sent will only become records if and when in fact kept by reason of their informational content or connection with an event, person or circumstance. Depending again on record-keeping, some the applicable system of correspondence, especially correspondence embodying communications of a routine or transient nature, might not be so kept at all. "the Commonwealth" and "Commonwealth institution" The term "Commonwealth" in a Commonwealth statute obviously means the "Commonwealth of Australia"63. But, of course, "the Commonwealth of Australia" can be used in a Commonwealth statute in different senses, corresponding at least to the several senses in which it is used in the Constitution64. The definite noun "the Commonwealth", when not used geographically, sometimes refers to the body politic of the Commonwealth of Australia. Together with the bodies politic of each of the States, the body politic of the Commonwealth of Australia was called into existence upon the proclamation of the Constitution. The Commonwealth as a body politic is a distinct legal entity, the legislative, executive and judicial powers of which are conferred and limited by the Constitution. The executive power of the Commonwealth as a body politic includes the power to exercise any right of property vested in the Commonwealth as a body politic. That executive power is formally vested in the Queen and exercisable by the Governor-General and is functionally exercisable by the Executive Government of the Commonwealth within the framework of responsible government established by Ch II of the Constitution65, subject always to the capacity for statutory control by the Commonwealth Parliament66. When referring to the exercise of the executive power of the Commonwealth through the Executive Government of the Commonwealth, and when referring to its statutory control, the 63 Section 2B of the Acts Interpretation Act 1901 (Cth), definition of "Commonwealth". 64 R v Sharkey (1949) 79 CLR 121 at 153, quoting Moore, The Constitution of The Commonwealth of Australia, 2nd ed (1910) at 73. 65 See New South Wales v Bardolph (1934) 52 CLR 455 at 489-490, 501-503, 507- 509, 517-519; Plaintiff M68/2015 v Minister for Immigration and Border Protection (2016) 257 CLR 42 at 90-93 [115]-[122]. 66 Brown v West (1990) 169 CLR 195 at 202. distinct legal personality of the Commonwealth as a body politic has traditionally been expressed as "the Crown in right of the Commonwealth"67. Sometimes a statutory reference to "the Commonwealth" is more broadly to the central government of the nation understood in accordance with "the conceptions of ordinary life"68. In that broader sense, the expression is not confined to the Commonwealth as a body politic but can extend to encompass agencies and instrumentalities of the central government which have their own legal personalities69. In that broader sense, it can extend to encompass the holders of constitutional offices of the Commonwealth as a body politic and of statutory offices created by the Commonwealth Parliament in their official capacities70. "the Commonwealth" The distinction drawn between "Commonwealth institution" makes apparent that "the Commonwealth" is used in the Archives Act in the narrower sense to refer only to the Commonwealth as a body politic. That usage is confirmed by the interlocking definitions of "Commonwealth Commonwealth", "authority "Commonwealth-controlled "Commonwealth-controlled company", to which extensive reference has been made, the operation of which is to bring within the statutory conception of a "Commonwealth institution" some but not all agencies and instrumentalities of the central government and some but not all holders of constitutional and statutory offices. association" institution", and and the That usage is also specifically confirmed by the deeming of a record kept by a Royal Commission to be a Commonwealth record only when the record is no longer required for the purposes of the Royal Commission and by the prescription that a record held by or on behalf of the Parliament or a House of the Parliament 67 eg The Commonwealth v Rhind (1966) 119 CLR 584 at 599; Jacobsen v Rogers (1995) 182 CLR 572 at 585; The Commonwealth v Western Australia (1999) 196 CLR 392 at 409-411 [31]-[36], 429-431 [105]-[109]; Sue v Hill (1999) 199 CLR 68 Bank of New South Wales v The Commonwealth ("the Bank Nationalisation Case") (1948) 76 CLR 1 at 363. 69 eg Deputy Commissioner of Taxation v State Bank (NSW) (1992) 174 CLR 219 at 233; Austral Pacific Group Ltd (In liq) v Airservices Australia (2000) 203 CLR 136 70 eg Crouch v Commissioner for Railways (Q) (1985) 159 CLR 22 at 36-43. is to be taken to be a Commonwealth record. Records held by or on behalf of a House of the Parliament include the Journals of the Senate and the Votes and Proceedings of the House of Representatives together with documents tabled in, or presented to or created by committees of, the Senate and the House of Representatives71. Records of the Senate are typically held in the custody of the Clerk of the Senate72 and records of the House of Representatives are typically held in the custody of the Clerk of the House of Representatives under the direction of the Speaker of the House of Representatives73. Holders of constitutional and statutory offices are therefore not "the Commonwealth" for the purposes of the Archives Act merely by reason of holding office and acting in the discharge of the functions of office. Amongst the holders of constitutional offices who are not within that statutory conception of "the Commonwealth" are notably Ministers, Senators, members of the House of Representatives and Justices of the High Court and judges of the other courts created by Commonwealth Parliament. Amongst them also is the Governor- General. Moreover, holders of such constitutional offices are not automatically within the statutory conception of a "Commonwealth institution". A Minister who is a member of the Federal Executive Council is not "the Executive Council"; a Senator is not "the Senate"; a member of the House of Representatives is not "the House of Representatives"; a Justice of the High Court or a judge of another court created by Commonwealth Parliament is not "a Federal court". In the same way, the Governor-General is not "the official establishment of the Governor-General". Unless specifically prescribed by a regulation made for the purpose of para (b) of the definition of "authority of the Commonwealth", none of those office holders is a "Commonwealth institution". Exclusion of constitutional office holders from the statutory conception of the Commonwealth, and in the absence of regulation also from the statutory conception of a Commonwealth institution, is comprehensible as a matter of legislative design when regard is had to the relationship between constitutional office holders and components of the definition of a "Commonwealth institution". The relevant components are those which operate to bring within the statutory conception of a Commonwealth institution functional units of government which, 71 cf Archives (Records of the Parliament) Regulations 2019 (Cth). 72 Australia, Senate, Standing Orders, standing order 44. 73 Australia, House of Representatives, Standing Orders, standing order 28. in the regular course of public administration, are to be expected to have responsibility for the keeping of records created or obtained by the holders of constitutional offices in their official capacities. In the case of a Minister, the applicable functional unit is the Department of the Australian Public Service, which corresponds to the Department of State of the Commonwealth administered by that Minister. The Department is comprised of persons engaged or employed under the Public Service Act 1999. Subject to the capacity for direction by the Minister, responsibility for the management of the Department, including responsibility for the management of "property ... that is owned or held by the Commonwealth" within the portfolio administered by the Department, is cast by statute on the Secretary of the Department74. As the Solicitor-General of the Commonwealth emphasised in argument, a document created or received by a Minister in his or her official capacity can be expected in the regular course of public administration to be delivered into the control of the Department and kept by the Department on a departmental file. That is routinely so for originals of correspondence received and for copies of correspondence sent by the Minister in an official capacity. There will, of course, be exceptions. An email or memorandum embodying a confidential and politically sensitive communication between Ministers on a matter of government business, for example, if it is kept at all, might well be kept solely by one or other of those Ministers or within what has come to be referred to as the "private office"75 of a Minister. A notable feature of the design of the Archives Act is that ministerial consultants and personal staff engaged or employed under the Members of Parliament (Staff) Act 1984 (Cth) are not within the definition of a "Commonwealth institution". One consequence is that a document that is kept within the private office of a Minister by reason of its informational content or its connection with an event, person or circumstance is not thereby a record that is kept by the Commonwealth or a Commonwealth institution. Another consequence is that a document created or received by a Senator or member of the House of Representatives is not a record that is kept by the Commonwealth or a Commonwealth institution even if the document is kept by reason of its 74 Section 57(2) of the Public Service Act 1999 (Cth) and ss 8 (definitions of "public resources" and "relevant property"), 12 (definition of "accountable authority"), 15 and 16 of the Public Governance, Performance and Accountability Act 2013 (Cth). 75 Ng, Ministerial Advisers in Australia: The Modern Legal Context (2016) at 1-2. informational content or its connection with an event, person or circumstance within the private office of the Senator or member. In the case of a Justice of the High Court or a judge of another court created by Commonwealth Parliament, the applicable functional unit is the "Federal court" of which the judge is a member. The records of a court in the regular course of its administration can be expected to be kept under the control of its registry insofar as those records concern the exercise of judicial power or its chief executive officer insofar as those records concern matters of administration. The mere fact that a document is created or received by a judge in the discharge of his or her functions of office does not mean that the document is a record of the court of which the judge is a member. That is so even if the document is kept within the chambers of the judge by reason of its informational content or by reason of its connection with a case that is or has been before the court. A memorandum sent from one judge to another expressing a view as to the merits of a case on which both are sitting is unlikely ever to become a record given that the limited purpose and confidential nature of the communication would make it improper for the recipient to retain the memorandum once the case had been determined. But even if the recipient chose to take it upon himself or herself to preserve the memorandum for posterity, the memorandum would not by reason of being so kept by a judge become a record of the court. In the case of the Governor-General, the applicable functional unit of government is "the official establishment of the Governor-General". To the meaning of that expression, it is appropriate next to turn. "the official establishment of the Governor-General" The word "establishment" within the reference to "the official establishment of the Governor-General" in the definition of "Commonwealth institution" is evidently used in the arcane sense of referring to an organised staff provided at public expense for the assistance of the holder of a public office76. The word was used just once before in a Commonwealth statute in a cognate statutory expression in precisely that sense in the Governor-General's Establishment Act 1902 (Cth), which appropriated funds "[t]o assist in defraying the expenses of the Governor- General's establishment in connexion with the visit to Australia of Their Royal Highnesses the Duke and Duchess of Cornwall and York". 76 The Oxford English Dictionary, 2nd ed (1989), vol 5 at 405, senses 9 and 10. The statutory reference to "the official establishment of the Governor- General" can therefore be taken for practical purposes now to be synonymous with the organisation that the Governor-General Act has since 199977 referred to as "the Office of Official Secretary to the Governor-General", constituted by the Official Secretary and staff employed by the Official Secretary78. The Governor-General Act now spells out that "[t]he function of the Office is to assist the Governor-General"79. It now places the Official Secretary in relation to the management of the Office of Official Secretary to the Governor-General in like position to that of a Secretary in relation to the management of a Department80. Whatever the outer limits of the statutory reference to "the official establishment of the Governor-General" might at any earlier time have been, the holder from time to time of the office of Official Secretary must always have been squarely within it. The Official Secretary acting in his or her official capacity could always have been expected to have had responsibility for keeping records created or obtained by the Governor-General in his or her official capacity. The Official Secretary acting in his or her official capacity could also always have been to have had responsibility for assisting a newly appointed expected Governor-General with the transition to office and for assisting a retiring Governor-General with the transition from office. "property" Property is not "a monolithic notion of standard content and invariable intensity"81; it is not "a term of art with one specific and precise meaning"82. It is "a term that can be, and is, applied to many different kinds of relationship with a subject matter". The relationship with a subject matter is in some contexts best 77 Public Employment (Consequential and Transitional) Amendment Act 1999 (Cth). 78 Section 6(2) of the Governor-General Act. 79 Section 6(3) of the Governor-General Act. 80 Section 6(4) of the Governor-General Act. 81 Yanner v Eaton (1999) 201 CLR 351 at 366 [19], quoting K Gray and S F Gray, "The Idea of Property in Land", in Bright and Dewar (eds), Land Law: Themes and Perspectives (1998) 15 at 16. 82 Kennon v Spry (2008) 238 CLR 366 at 397 [89]. understood in terms of a "bundle of rights". In other contexts, it is best understood in terms of a "legally endorsed concentration of power"83. Accordingly, property is not for all purposes to be equated with "full beneficial, or absolute, ownership"84. Indeed, a proprietary relationship can have the quality of relativity. Especially is that so in relation to property in tangible things. It is an old and well-known application of common law doctrine, for example, that "the finder of a jewel, though he does not by such finding acquire an absolute property or ownership, yet he has such a property as will enable him to keep it against all but the rightful owner"85. The doctrine of the common law has been explained in terms that physical possession of a tangible or "corporeal" thing, in the sense of actual physical custody of the thing, "is not merely evidence of absolute title: it confers a title of its own, which is sometimes called a 'possessory title'". The possessory title that derives from lawful physical possession "is as good as the absolute title as against, it is usually said, every person except the absolute owner"86. Though the doctrine has been so much encrusted with technicalities that any exposition of it must be hedged with qualifications87, a slightly more complete statement of it might be that lawful physical possession is as good as absolute title against every person except someone "who can show a better right to possession"88. The question, however, is not as to the content of the common law concepts of "possession" or "possessory title" but as to the meaning of "property" within the context of the Archives Act. The two are not the same. 83 Yanner v Eaton (1999) 201 CLR 351 at 365-366 [17]-[19]; Telstra Corporation Ltd v The Commonwealth (2008) 234 CLR 210 at 230-231 [44]. 84 Yanner v Eaton (1999) 201 CLR 351 at 367 [22]. 85 Armory v Delamirie (1722) 1 Stra 505 at 505 [93 ER 664 at 664]. 86 Russell v Wilson (1923) 33 CLR 538 at 546. 87 eg Moors v Burke (1919) 26 CLR 265 at 268-269; Willey v Synan (1937) 57 CLR 88 Holdsworth, A History of English Law (1925), vol 7 at 449. See The Winkfield [1902] P 42 at 55-56; Gatward v Alley (1940) 40 SR (NSW) 174 at 180; Gollan v Nugent (1988) 166 CLR 18 at 30-33, 48-49. Within the definition of "Commonwealth record", "property" obviously connotes a relationship between a record β a tangible thing β on the one hand and either the Commonwealth as a body politic or a Commonwealth institution as a functional unit of government on the other hand. The nature and intensity of the requisite relationship is a question of statutory construction the resolution of which is informed by the statutory context. Despite the focus of those involved in the early stages of the drafting of the Archives Act on the "ownership" of a record, the inclusion within the definition of "Commonwealth institution" of Departments of State of the Commonwealth and of other functional units of government which lack legal personality necessarily means that the connoted relationship cannot be confined to the holding of rights. Much less can it be confined to the holding of rights corresponding to ownership or possession at common law. The relationship connoted can only be understood in terms of a legally endorsed concentration of power. The question becomes as to the nature and intensity of the requisite concentration of power. Purposively construed in the context of the Archives Act, the relationship between a record and either the Commonwealth as a body politic or a Commonwealth institution as a functional unit of government connoted by "property" is best understood as a legally endorsed concentration of power to control the physical custody of the record. The power might arise from a capacity to exercise a common law or statutory right arising from ownership or possession. But it need not so arise. The power might be exclusive. But it need not be. The paradigm of a Department of State of the Commonwealth rather indicates that the concentration of power can arise from a capacity to control the physical custody of the record that is conferred and is exercisable as a matter of management or administration rather than as a matter of the recognition and vindication of rights of ownership or possession at common law. The Archives Act is not concerned to vindicate the incidents of ownership or possession at common law such as the right to destroy or the right to alienate the property. A record which is kept in the control of a Department in the course of the management and administration of the affairs of the Commonwealth is sensibly described as property of the Commonwealth for the purposes of the Archives Act whether or not another person β such as the author of the record β may have a claim to ownership or possession of the record under the general law. The paradigm of a Department of State of the Commonwealth also indicates that the power to control the physical custody of the record need not depend on the capacity to assert any right of ownership or possession at common law given that the Department is not an entity capable of bearing or enforcing legal rights. Nor need the power of control extend to the ultimate power to dispose of the record. The power can be constrained, including by rights of ownership or possession vested in the Commonwealth as a body politic or in another legal person. The exercise of the power can be subject to a power of direction in another β in the case of a Department, most obviously its Minister. That contextual understanding of the statutory reference to "property" furthers the legislative purpose of enabling the Archives to preserve and make publicly available the archival resources of the Commonwealth. It does so by ensuring that the Archives is able to assume the custody of a Commonwealth record of national significance or public interest without needing to concern itself with questions of the ultimate ownership or possessory title. Underlying the legislative scheme is an expectation that a record the physical custody of which is within the lawful power of control of the Commonwealth as a body politic or of a Commonwealth institution as a functional unit of government will in the regular course of administration be kept in the actual physical custody of a Commonwealth institution. Within the Commonwealth institution there will be a "person responsible for the custody of the record". That person will be compelled to transfer the record to the Archives if the record is determined by the Director-General to be part of the archival resources of the Commonwealth. The circumstance that a record is in fact kept in the actual physical custody of a Commonwealth institution lacking in legal personality makes it highly likely that the true owner of the record will be the Commonwealth as a body politic. But the circumstance cannot exclude the possibility that the true owner of the document is some other person. Informed by the experience of the Australian Archives as recounted to the Senate Standing Committee on Education and the Arts by Professor Neale, the legislative contemplation is also that a record the physical custody of which is within the lawful power of control of the Commonwealth or a Commonwealth institution might on occasions in fact be found in the actual physical custody of a person outside a Commonwealth institution. The person might even claim to be its owner. The function conferred by s 5(2)(f) enables the Archives in those circumstances to seek and obtain the physical custody of the record by entering into an arrangement with the person without necessarily resolving the question of ownership. If the record is not a Commonwealth record at the time the Archives obtains custody of it under the arrangement, s 6(2) will ensure that the terms of the arrangement will prevail over the access regime in Div 3 of Pt V. If the record is a Commonwealth record at the time the Archives obtains custody of it under such an arrangement, s 6(3) will ensure that the access regime in Div 3 of Pt V will prevail notwithstanding the terms of the arrangement. By whichever of those two methods the Archives obtains custody of a record, the result in terms of ownership is the same. For the Archives to take the record into its physical custody does nothing to affect the ownership of the record or to alter any legal right of property in the record that might be vested in anyone. The Archives, after all, is nothing more than a grouping of officers of the Australian Public Service who act in concert under the supervision of the Director-General within a Department of State of the Commonwealth, which is currently the Attorney-General's Department. The true owner of a Commonwealth record that has been transferred to the Archives from a Commonwealth institution or obtained by the Archives under an arrangement with a person outside a Commonwealth institution might or might not be the Commonwealth as a body politic. If the true owner is not the Commonwealth as a body politic, the true owner might well have a common law cause of action in detinue89 against the Commonwealth for the recovery of the record from the Archives. If the true owner were to recover physical custody of the record from the Archives, then the record would cease to be in the lawful physical custody of the Attorney-General's Department as a Commonwealth institution. It would at that time cease to be a Commonwealth record, with the consequence that the access regime in Div 3 of Pt V would no longer apply to it. For so long as the record remains in the lawful physical custody of the Archives, however, it remains a Commonwealth record and the access regime in Div 3 of Pt V applies to it irrespective of its true ownership. Property of the Commonwealth? On the appeal, as at first instance in the Federal Court and in the Full Court, the principal focus of Professor Hocking and of the Director-General has been on attempting to establish the ultimate ownership of the deposited correspondence. There has been no dispute between them that legal title to a physical copy of correspondence that is made before the correspondence is sent ordinarily vests at common law in the creator of the copy at the time of its creation90 and that legal title to the original of correspondence that is received ordinarily vests at common law in the recipient at the time of its receipt91. There has also been no dispute between them that the creator or recipient of each item of the deposited 89 Gollan v Nugent (1988) 166 CLR 18 at 25. In re Wheatcroft (1877) 6 Ch D 97 at 98. 91 Pope v Curl (1741) 2 Atk 342 at 342 [26 ER 608 at 608]; In re Dickens; Dickens v Hawksley [1935] Ch 267 at 292-293. correspondence was Sir John Kerr and that each act of creation or receipt was in his capacity as Governor-General. Where issue has been joined between them has been as to whether legal title at the time of creation or receipt vested in the Commonwealth as a body politic or in Sir John as an individual. Both parties place reliance, in different ways and to different ends, on the constitutional nature of the offices held by the correspondents and on the constitutional nature of the relationship connoted by the prescription in s 2 of the Constitution that "[a] Governor-General appointed by the Queen shall be Her Majesty's representative in the Commonwealth". Both accept that the nature of the relationship between the Governor-General and the Queen during the period in which Sir John Kerr held the office of Governor-General had been shaped by developments that had occurred in the constitutional relations between the United Kingdom and Australia in the three-quarters of a century which had by then elapsed since the enactment of the Constitution in the last year of the reign of Queen Victoria. Those developments included recognition in the Balfour Declaration of the Imperial Conference in 1926 that the Governor-General "is not the representative or agent of [Her] Majesty's Government in Great Britain or of any Department of that Government", acceptance from at least the time of the appointment of Sir Isaac Isaacs as Governor-General in 1931 that the Monarch would act on the advice of the Australian Prime Minister in appointing the Governor-General92, and ascription to Her Majesty by the Royal Style and Titles Act 1973 (Cth) for use in relation to Australia of the title "Queen of Australia"93. The argument for Professor Hocking at its widest, however, does not rely on the particular position of the Governor-General or on the particular relationship between the Queen and the Governor-General. The argument at its widest is that legal title to anything created or received by the holder of any constitutional or statutory office in his or her official capacity automatically vests in the Commonwealth as a body politic at the time of creation or receipt, and is accordingly immediately within the purview of the exercise of the executive power of the Commonwealth. The argument is sought to be supported by reference to cases which illustrate that a secret profit or private gain made by the holder of a 92 Sue v Hill (1999) 199 CLR 462 at 495 [74]. 93 Southern Centre of Theosophy Inc v South Australia (1979) 145 CLR 246 at 261. public office from misuse of that office can be held on constructive trust for the body politic to which the public office is appurtenant94. A moment's reflection on the adverse consequences the asserted doctrine would have on the separation of judicial power, and on the capacity of Senators and members of the House of Representatives to discharge their constitutional duties of holding the Executive Government of the Commonwealth to account95, is sufficient to reject it. The case law on which the argument relies does nothing to support it. Necessarily implicit in recognition that a person who is the holder of a public office can be held liable to account by way of constructive trust for a secret profit or private gain is recognition that legal title to the profit or gain can vest in the person as an individual. Concentrating on the uniqueness of the constitutional position of the Governor-General and on the peculiarity of the constitutional relationship between the Queen and the Governor-General, the narrower version of the argument for Professor Hocking is that the centrality of that relationship to the functioning of the Commonwealth as a body politic means that communications between the Queen and the Governor-General are inherently communications of the Commonwealth as a body politic. They are communications the content and means of which must fall within the purview of the Executive Government of the Commonwealth within the framework of responsible government established by Ch II of the Constitution. For those communications to be considered personal to the those communications to be privately owned by the individuals involved, is constitutionally unthinkable. An argument to that effect was accepted by Flick J in dissent in the Full Court96. the physical embodiments of involved, and for individuals The argument for the Director-General, presented by the Solicitor-General of the Commonwealth, is that legal title to a thing created or received by the holder of a constitutional office in his or her official capacity automatically vests in the Commonwealth as a body politic at the time of creation or receipt only if the holder of the constitutional office is then acting as an "emanation of the Commonwealth" 94 eg Reading v Attorney-General [1951] AC 507; Attorney-General for Hong Kong v Reid [1994] 1 AC 324. 95 R v Boston (1923) 33 CLR 386 at 401. 96 Hocking v Director-General of the National Archives of Australia (2019) 264 FCR in creating or receiving the thing. Otherwise, the vesting of legal title is a matter of objectively determined intention. The Solicitor-General invokes in that respect the approach taken by the United States Court of Appeals for the District of Columbia in Nixon v United States97 to conclude that "through mutually explicit understandings and uniform custom, Presidents retained an exclusive property interest in their presidential papers". The Solicitor-General points out that amongst the "presidential papers" held in that case to be owned by Richard M Nixon were "correspondence of the President and his staff"98. The Solicitor-General argues that, in circumstances where neither the Governor-General nor the Queen wrote as an emanation of the body politic, the "personal and confidential" labelling of the particular correspondence between them indicated their mutual objective intention to be that correspondence created or received by the Governor-General was not to be within the immediate purview of the Executive Government of the Commonwealth at the time of creation or receipt and therefore that legal title to the correspondence was not to vest in the Commonwealth as a body politic but rather in the individual who held the office of Governor-General. The Solicitor-General goes further to argue that such a mutual objective intention was not confined to the Governor-General and the Queen: "each relevant office-holder β whether at the Palace, Government House, the Lodge or the Archives β considered, and acted on the basis that, the [correspondence] belonged privately to Sir John and [was] not property of the Commonwealth". An argument much to that effect was accepted by Griffiths J at first instance99 and by Allsop CJ and Robertson J in the majority in the Full Court100. The Solicitor-General seeks to support the inference of that objective intention by submitting that this Court should recognise the existence, now and throughout the period in which Sir John Kerr held the office of Governor-General, of a "longstanding convention that communications between the Governor- General and the Queen are confidential, and do not form part of the official records (1992) 978 F 2d 1269 at 1282. (1992) 978 F 2d 1269 at 1270. 99 Hocking v Director-General of National Archives of Australia (2018) 255 FCR 1 at 100 Hocking v Director-General of the National Archives of Australia (2019) 264 FCR of government". The convention, to which it is submitted that all relevant office holders can be found to have regarded themselves as bound101, is said to be as spelt out in the exchange of letters in February 2017 between the then Official Secretary and the then Private Secretary. Echoing the language of the Private Secretary, the convention is said to be observed "in each of Her Majesty's 15 Commonwealth Realms" and to be "necessary to protect the privacy and dignity of the Sovereign and her Governors-General, and to preserve the constitutional position of the Monarch and the Monarchy". Whether a constitutional convention pertaining to the ownership of confidential communications with Her Majesty exists in the United Kingdom or in relation to any other country is neither necessary nor appropriate for this Court to decide. Whether such a constitutional convention exists or has at any relevant time existed in the outworking of the Australian Constitution is not satisfactorily established merely by an exchange of letters between the Official Secretary and the Private Secretary and is not unambiguously borne out by the practices of Governors-General revealed by the other documents that are in evidence. Though recognition of a constitutional convention cannot depend on formal proof by admissible evidence on the balance of probabilities, the Court would not be justified in taking cognisance of an asserted constitutional convention unless convinced on adequate material of the convention's existence102. Even aside from the difficulty of taking judicial cognisance of the asserted constitutional convention, the issue of the ownership of the deposited correspondence has an unavoidable constitutional dimension. As such, it is an issue appropriate to be determined only if its resolution is truly necessary to the outcome of the appeal103. It is not. If, on the one hand, the Commonwealth as a body politic was the true owner of the correspondence at the time it was deposited with the Australian Archives, it would follow that each item of correspondence would have been the property of the Commonwealth and therefore a Commonwealth record. If, on the other hand, Sir John Kerr as an individual was then the true owner of the correspondence, each item of correspondence would still have been a Commonwealth record if it was 101 cf Re Resolution to Amend the Constitution [1981] 1 SCR 753 at 888. 102 Maloney v The Queen (2013) 252 CLR 168 at 299 [353]; Re Day (2017) 91 ALJR 262 at 269 [23]-[24]; 340 ALR 368 at 375. 103 Lambert v Weichelt (1954) 28 ALJ 282 at 283; Knight v Victoria (2017) 261 CLR the property of the official establishment of the Governor-General. The appeal can, and therefore should, be determined through the resolution of that issue alone. Property of the official establishment of the Governor-General? The focus of the parties on the ownership of the correspondence resulted in the significance of the circumstances in which the correspondence came to be deposited with the Australian Archives not being brought to the attention of the Federal Court. The significance is as follows. The sequence of events that has been recounted makes apparent that, at least from the time of Sir John Kerr's departure from Government House upon his retirement from office on 8 December 1977 until the time of the deposit of the correspondence on 26 August 1978, the correspondence was in the lawful physical custody of Mr Smith in his capacity as Official Secretary. During that period, Mr Smith in his private capacity made copies of the correspondence for Sir John in his private capacity. But that does not detract from the fact that Mr Smith held the correspondence throughout the period in the proper performance of his functions as Official Secretary. He did so in order to fulfil the arrangement he had made in his capacity as Official Secretary with Professor Neale in his capacity as Director-General of the Australian Archives in November 1977 to deposit the correspondence with the Australian Archives. The making of the arrangement had been suggested by Mr Fraser as Prime Minister to Sir John as Governor-General and the arrangement was undoubtedly made with the knowing approval of Sir John when he was still Governor-General. On Sir John's instructions, Mr Smith then went on to fulfil the arrangement by depositing the correspondence with the Australian Archives in his capacity as Official Secretary after Sir John's retirement. The very actions of Mr Smith in making and fulfilling in his capacity as Official Secretary the arrangement by which the correspondence came to be deposited with the Australian Archives are sufficient to demonstrate that lawful power to control the physical custody of the correspondence then lay with Mr Smith in his capacity as Official Secretary. The quality of that power to control the physical custody of the correspondence is not affected by the finding that Mr Smith acted on the instructions of Sir John Kerr in making the deposit in his capacity as Official Secretary just as it is unaffected by the inference that the arrangement was entered into by Mr Smith in his capacity as Official Secretary with the knowing approval of Sir John when he was still Governor-General. The inference that Mr Smith in his capacity as Official Secretary had lawful power to control the physical custody of the correspondence is compelling. It is, after all, the power that was actually exercised by the unit of government in whose physical custody the correspondence was in fact kept. The nature and significance of the correspondence was such that it was only to be expected that the correspondence would be kept within the official establishment of the Governor- General as the functional unit of government responsible for keeping records created or obtained by the Governor-General in his or her official capacity. With respect to the majority in the Full Court, we cannot see how the correspondence could appropriately be described, however "loosely", as "private or personal records of the Governor-General"104 even allowing for the ambiguity of the description of "private or personal". It cannot be supposed, for example, that Sir John Kerr could have taken the correspondence from the custody of the official establishment and destroyed it or sold it, and the sequence of events which resulted in its deposit with the Australian Archives demonstrates that such a possibility was never contemplated. The inference is sufficient to conclude that the correspondence was properly characterised at the time of deposit as property of the official establishment of the Governor-General. The conclusion follows the Commonwealth as a body politic or Sir John Kerr as an individual was the true owner of the correspondence as a matter of common law. irrespective of whether Conclusion The conclusion that the correspondence was the property of the official establishment of the Governor-General at the time of deposit with the Australian Archives is sufficient to lead to the ultimate conclusion that each item of the deposited correspondence was then a Commonwealth record, and remains a Commonwealth record in the care and management of the Archives. There is accordingly no need to resolve the controversy about whether the Commonwealth as a body politic or Sir John Kerr as an individual was the true owner at the time of its deposit with the Australian Archives. If Sir John was the true owner, his rights of ownership were unaffected by the deposit, were unaffected by the subsequent enactment of the Archives Act, and enured for the benefit of his estate. The mere existence of those rights would have no effect on the characterisation of each item of the deposited correspondence as a Commonwealth record or on the application of Div 3 of Pt V to the deposited correspondence. For completeness, it should be added that the fact that the correspondence was deposited under an arrangement between the Official Secretary and the Director-General of the Australian Archives and was fulfilled by the Official 104 Hocking v Director-General of the National Archives of Australia (2019) 264 FCR Secretary in his official capacity also means that the arrangement was not one by which the custody of records was accepted by the Australian Archives "from a person other than a Commonwealth institution". The consequence is that s 70(3) of the Archives Act has no application to the arrangement. Even if it did, the character of each item of the deposited correspondence as a Commonwealth record would make Div 3 of Pt V applicable to it through the operation of s 6(3) notwithstanding s 6(2). To the extent that the conclusion that each item of the deposited correspondence is a Commonwealth record might run counter to the current understanding of the Private Secretary and to the present expectations of Her Majesty about the timing of public access to it, two points are to be made. The first is that the conclusion is the product of the application of the Archives Act, properly interpreted, to the historical circumstances. The second is that acceptance that the holder of the office of Official Secretary acting in his official capacity had power to enter into and fulfil the arrangement under which the correspondence was deposited was implicit in acceptance that a subsequent holder of the office of Official Secretary acting in the same official capacity had power, by conveying the decision of Her Majesty, to alter the conditions on which the deposit was made. To the extent that conclusion might be thought to run counter to the expectations of Mr Smith as Official Secretary and of Professor Neale as Director- General of the Australian Archives in entering into the arrangement under which the correspondence was deposited, of Mr Fraser as Prime Minister in suggesting it, and of Sir John Kerr as retiring Governor-General in acquiescing in it, the point to be emphasised is that the conclusion is the product of legislative choices made in the final stages of the parliamentary processes which resulted in the enactment of the Archives Act. The determinative legislative choices were made after the arrangement was entered into and fulfilled. The appeal must be allowed. The orders of the Full Court must be set aside, the appeal to that Court must be allowed, and the orders made at first instance must be set aside. In their place, it should be declared that the deposited correspondence is constituted by Commonwealth records within the meaning of the Archives Act and it should be ordered that a writ of mandamus issue to compel the Director- General to reconsider Professor Hocking's request for access to the deposited correspondence. The Director-General must pay Professor Hocking's costs. Nettle 125 NETTLE J. Most of the facts of this matter and the terms of the relevant legislation sufficiently appear from the reasons for judgment of the plurality, and I gratefully adopt their Honours' recitation of them. I respectfully disagree, however, with their Honours' conclusion. Definition of "Commonwealth record" As the plurality's reasons indicate105, the Governor-General is not "the Commonwealth" within the meaning of the Archives Act 1983 (Cth). As is apparent from the way that the Act distinguishes between "the Commonwealth" and "a Commonwealth institution", "the Commonwealth" refers to the body politic established under the Constitution106 or, as it is sometimes described, the Crown in right of the Commonwealth107. As the plurality's reasons also indicate108, the Governor-General is not "a Commonwealth institution", because the Governor-General is not part of "the official establishment of the Governor-General". Within the Archives Act, "the official establishment of the Governor-General" refers to the Official Secretary and other staff who assist the Governor-General in the performance of duties of the viceregal office109. That conclusion is fortified by the way the Act recognises the distinction between persons holding office and organs of government to which their offices relate, in each of the other paragraphs of the definition of "Commonwealth institution". Most notably, just as para (a) distinguishes "the official establishment 105 See reasons of Kiefel CJ, Bell, Gageler and Keane JJ at [77]. 106 Constitution, covering cll 3, 4; "A Proclamation", in Commonwealth of Australia Gazette, No 1, 1 January 1901 at 1; Acts Interpretation Act 1901 (Cth), s 2B (definition of "Commonwealth"). See The Commonwealth v Rhind (1966) 119 CLR 584 at 599 per Barwick CJ (McTiernan J agreeing at 600), 603 per Taylor J, 611 per Owen J; The Commonwealth v Western Australia (1999) 196 CLR 392 at 431 [109] per Gummow J; Williams v The Commonwealth (2012) 248 CLR 156 at 185 [22] per French CJ, 237 [154] per Gummow and Bell JJ, 254 [205] per Hayne J. 107 See The Commonwealth v Baume (1905) 2 CLR 405 at 418 per O'Connor J; The Commonwealth v Bogle (1953) 89 CLR 229 at 259 per Fullagar J (Dixon CJ, Webb and Kitto JJ agreeing at 249, 255, 274). 108 See reasons of Kiefel CJ, Bell, Gageler and Keane JJ at [80]. 109 See, eg, R v Accrington Youth Court; Ex parte Flood [1998] 1 WLR 156 at 162 per Sedley J; [1998] 2 All ER 313 at 318. Nettle of the Governor-General" from the Governor-General, whom the Official Secretary and other staff assist in the performance of viceregal duties, para (b) distinguishes "the Executive Council" from the Governor-General, whom the Executive Councillors "advise ... in the government of the Commonwealth"110; and para (e) distinguishes "a Department" from the Minister of State who administers the Department. In marked contrast, para (c) refers to "the Senate", which includes the Senators; para (d) refers to "the House of Representatives", which includes the Members of the House of Representatives; para (f) refers to "a Federal court", which includes the Chief Justice or Chief Judge and Judges of each federal court; and para (h) refers to "the Administration of an external Territory", which includes the Territory's Administrator. Finally, para (g) refers to "an authority of the Commonwealth", which includes both "an authority, body, tribunal or organization ... established for a public purpose" by prescribed means and "the holder of a prescribed office under the Commonwealth". As the plurality's reasons indicate111, too, the reference to "the property" of the Commonwealth or a Commonwealth institution in the definition of "Commonwealth record" cannot mean a thing owned by the Commonwealth or one of the Commonwealth institutions112. Ownership is neither necessary nor sufficient for compliance with the "record-keeping obligations"113 which the Act attaches to Commonwealth records. As the principal obligation is to cause Commonwealth records to be transferred to the care of the Archives114, the word "property" must refer to the "legally endorsed concentration of power"115 that Pollock and Wright termed "possession in law": "the fact of control" over a record 110 Constitution, s 62. 111 See reasons of Kiefel CJ, Bell, Gageler and Keane JJ at [94]. 112 cf Shorter Oxford English Dictionary, 6th ed (2007) at 2370, quoted in White v Director of Public Prosecutions (WA) (2011) 243 CLR 478 at 485 [10] per French CJ, Crennan and Bell JJ. 113 Archives Act 1983 (Cth), s 2A. 114 Archives Act 1983 (Cth), s 27. 115 Gray, "Property in Thin Air" (1991) 50 Cambridge Law Journal 252 at 299, quoted in Yanner v Eaton (1999) 201 CLR 351 at 366 [18] per Gleeson CJ, Gaudron, Kirby and Hayne JJ and Telstra Corporation Ltd v The Commonwealth (2008) 234 CLR 210 at 230-231 [44] per Gleeson CJ, Gummow, Kirby, Hayne, Heydon, Crennan Nettle "coupled with a legal claim and right to exercise it in one's own name against the world at large"116. For Commonwealth institutions that have no separate legal personality or collective power over chattels (such as the power to compel production of documents on pain of contempt117), possession in law β like any other legally endorsed concentration of power over things β must be exercised by one or more natural persons comprising the Commonwealth institution118. To avoid the absurd consequence that every record in the lawful possession of any such natural person is a "Commonwealth record", the references to such Commonwealth institutions must be taken to require that the person lawfully possess the record in his or her capacity as one of the persons comprising the Commonwealth institution. Evidently, then, the definition of "Commonwealth record" is intended to confine the record-keeping obligations in the Act to records in the lawful possession of the Commonwealth or a person or persons comprising a Commonwealth institution in their capacity as such, and thereby to prevent those obligations attaching to records in the lawful possession of office holders and others related to a Commonwealth institution in their personal capacity. The intention so to distinguish records officially possessed by organs of government from records in the personal possession of office holders is also apparent from the legislative history of the Act. As first introduced in 1978, the Archives Bill expressly excluded all records of the present, and any former, Governor-General from the open-access requirements under the proposed Act119. Thereafter, the Bill was referred to two committees: the Senate Standing Committee on Constitutional and Legal Affairs ("the Constitutional Committee"); and the Senate Standing Committee on Education and the Arts ("the Education Committee"). Although not accepting the policy of total exemption for a Governor-General's records, the Constitutional Committee acknowledged "the need for special treatment to be given to a few categories of records, such as ... 116 Pollock and Wright, An Essay on Possession in the Common Law (1888) at 16. 117 See James v Cowan; In re Botten (1929) 42 CLR 305; Egan v Willis (1998) 195 CLR 424. 118 See Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Queensland Rail (2015) 256 CLR 171 at 192-193 [52]-[53] per 119 cl 18(1)(a). Nettle correspondence with the Monarch"120. By contrast, the Education Committee concluded that the total exemption of, inter alia, a Governor-General's documents was "acceptable on the grounds of preserving the traditional independence of [those] arms of government from the executive"121. As re-introduced in 1981, the Archives Bill retained the total exemption for a Governor-General's records122 but lapsed. In 1983, the Archives Bill was re-introduced in the form of the present Act, providing that records of the official establishment of the Governor-General are subject to the open-access requirements, but without any indication of an intention to include personal records of the Governor-General, including the special category of correspondence between the Governor-General and the Queen. To the contrary, as Senator Evans observed in his Second Reading Speech123, the 1983 Bill was "chiefly designed to replace existing ad hoc decisions and conventions which have been relied upon for the last thirty years" and thus the provisions of the legislation would "apply to the records of the official establishment of the Governor-General, but not to his private or personal records". Personal communications and official records At common law, the fact of control of a chattel, as of land, is prima facie evidence of the right to exercise such control124. Hence, just as a person who takes the profits or product of land is presumed to have lawful possession of the land125, a person who holds or writes on a document is presumed to have lawful possession 120 Australia, Senate Standing Committee on Constitutional and Legal Affairs, Freedom of Information (1979) at 339 [33.22]-[33.23]. 121 Australia, Senate Standing Committee on Education and the Arts, Report on the Archives Bill 1978 (1979) at 19 [5.16]. 122 cl 18(1)(a). 123 Australia, Senate, Parliamentary Debates (Hansard), 2 June 1983 at 1183, 1184. 124 Wilbraham v Snow (1670) 2 Wms Saund 47 at 47 n (1) [85 ER 624 at 628]; Robertson v French (1803) 4 East 130 at 136-137 per Lord Ellenborough CJ [102 ER 779 at 782]; Jeffries v Great Western Railway Co (1856) 5 El & Bl 802 at 806 per Lord Campbell CJ, 806 per Wightman J [119 ER 680 at 681]; Russell v Wilson (1923) 33 CLR 538 at 546 per Isaacs and Rich JJ; Gatward v Alley (1940) 40 SR (NSW) 174 at 178-180 per Jordan CJ. 125 See Finlaison, Wills on the Law of Evidence in Civil and Criminal Cases, 3rd ed Nettle of the document126. Where, however, a person exercises control merely as agent, the fact and right of control which comprise lawful possession are attributed to the principal, and the agent enjoys only bare "custody"127. Accordingly, the fact that a document is dealt with by a person in his or her capacity as part of a Commonwealth institution will support an inference that the document is in the lawful possession of the Commonwealth institution, and so is a Commonwealth record. By contrast, the fact that a document is dealt with by, or as agent for, a person other than the Commonwealth or a Commonwealth institution will support an inference that the document was not in the lawful possession of the Commonwealth or a Commonwealth institution, and thus not a Commonwealth record. Ordinarily, the determination of the capacity in which a person exercises control over a document depends on the objectively discerned intentions of the persons directing and engaged in its production, sending, receipt and storage. And such intentions may often be inferred from the character of the document itself. Other things being equal, a document communicating personal information on a confidential basis is more likely to have been produced, sent, received and stored in a personal capacity or as agent for the confider or confidant. By contrast, a the document communicating official Commonwealth institution is more likely to have been produced, sent, received and stored in an official capacity as part of the Commonwealth institution. the purposes of information for So, for example, if one Senator or Member of the House of Representatives sends a note conveying personal opinions on proposed legislation to another Senator or Member of the House of Representatives expressly on the basis that those opinions should be and remain confidential, the note will ordinarily be a personal communication between the Senators or the Members, notwithstanding that the opinion concerns the business of the Senate or the House. By contrast, if one Senator or Member of the House of Representatives sends a report of the public proceedings of a committee to another Senator or Member of the House of Representatives for the latter to table it, the report will ordinarily be an official record of the Senate or the House. Likewise, if a Judge of a federal court sends a personal note to the Chief Justice or Chief Judge of the court conveying personal opinions about a matter before the court with the evident intention that the opinions be and remain 126 See Pollock and Wright, An Essay on Possession in the Common Law (1888) at 37. 127 Ancona v Rogers (1876) 1 Ex D 285 at 291 per Mellish LJ for the Court; Lord Advocate v Lord Blantyre (1879) 4 App Cas 770 at 791 per Lord Blackburn. See also Pollock and Wright, An Essay on Possession in the Common Law (1888) at Nettle confidential, the note will ordinarily be a personal communication between the Judge and the Chief Justice or Chief Judge. By contrast, if a Judge of a federal court sends a memorandum to the Chief Justice or Chief Judge notifying his or her intended absence from the country with the evident intention of providing formal notice, the memorandum will ordinarily be an official record of the court. Similarly, if a Minister of State sends a personal note to another Minister concerning upcoming Cabinet business, but with the intention, as objectively discerned, that the note be and remain confidential, the note will be a personal communication between the Ministers, notwithstanding that it concerns Cabinet business. By contrast, if a Minister sends a memorandum to another Minister detailing the progress of a change in departmental functions with the intention, as objectively discerned, that it be kept as an official record of the recipient Minister's Department, the memorandum will be such a record. Conceivably, personal communications sent and received on an express or tacit understanding that they be and remain confidential could become official records of an organ of government if the sender or recipient were to deal with them in a manner that objectively bespeaks an intention so to convert their character. But whether the actions of the sender or recipient would have that effect would need to be assessed in light of all the circumstances of the case, in particular the likelihood that each person's initial reasons for desiring confidentiality, and interest in not disappointing the confidence reposed by the other, will continue. More particularly, where an understanding of confidentiality exists, the act of the sender or the recipient in storing his or her copy in official facilities might well indicate no more than the choice of an available and convenient means of keeping the communication secure and confidential. And delivery of the copy to another person engaged in official work for the purpose of such storage might well indicate no more than a personal reliance on the diligence and fidelity of the latter as agent. Furthermore, an observation to that agent or another that the copy should one day be released in the public interest might well indicate no more than an intention to part with lawful possession at some later time and on terms consistent with the understanding between sender and recipient. So, in the case of the personal communication between Senators or Members of the House of Representatives postulated above, the fact that the recipient placed the note in a safe in his or her parliamentary office could hardly be regarded as enough to infer an intention to make the note an official record of the Senate or the House of Representatives. Likewise, in the case of the personal communication between a Judge of a federal court and the Chief Justice or Chief Judge, one plainly could not infer an intention to make the communication an official record of the court merely from the fact that the Chief Justice or Chief Judge requested his or her associate to file a photocopy in a filing facility provided by the court. If those were the only facts in either case, the logical inference would Nettle be that all involved were merely endeavouring to abide by the understanding of confidentiality using the resources available to them. Of course, if the Senator or Member of the House of Representatives were to table the personal note in Parliament, or if the Chief Justice or Chief Judge were to instruct a Registrar of the court to place the personal note in the official file of a matter, then, notwithstanding the understanding, the logical inference would be one of intention to make the communication a record of the Senate or the House of Representatives, or of the court; and, other things being equal, the communication would thereby become such a record. Correspondence between the Governor-General and the Monarch As the plurality in Kline v Official Secretary to the Governor-General observed128, "the position of the Governor-General calls for the exercise of a multiplicity of powers and functions, many (but not all) of which are undertaken in public, and some (but few) of which involve making decisions other than on the advice of a Minister or the Executive Council". This case is demonstrative of those dichotomies. As the primary judge found129, and the majority of the Full Court affirmed130, the letters under consideration arose from a "representative" function of the Governor-General which was undertaken in "private". As the primary judge also found131, and the majority of the Full Court affirmed132, at all relevant times, correspondence of the kind in issue has been dealt with as the personal property of the Governor-General or the Monarch, not to be disclosed without the Monarch's assent. So much is apparent from documents immediately before, during and immediately after Sir John Kerr's tenure. For example, in a memorandum from the United Kingdom Secretary of State to the Governor of the State of Victoria, the practice which appears to have applied equally to State Governors and Governors-General was detailed as follows: 128 (2013) 249 CLR 645 at 661 [38] per French CJ, Crennan, Kiefel and Bell JJ. 129 Hocking v Director-General of National Archives of Australia (2018) 255 FCR 1 at 130 Hocking v Director-General of the National Archives of Australia (2019) 264 FCR 131 Hocking v Director-General of National Archives of Australia (2018) 255 FCR 1 at 132 Hocking v Director-General of the National Archives of Australia (2019) 264 FCR Nettle "The Secretary of State will be glad to receive from the Governor periodically, for the information of Her Majesty The Queen, reports relating to affairs in the State. If these reports take the form of official despatches, they should be marked 'Confidential', and should not be included in the ordinary numbered series of despatches, since the intention is that they should afford to the Governor an opportunity of expressing his own personal views and not those of his Ministers. It may, however, be found convenient that they should not take the form of despatches, but of personal letters marked 'Personal and Confidential'. Observations by the Governor of a general nature, from his own personal enquiries or experiences, and impressions gained during travel in the State, are most helpful to Her Majesty. The Governor might wish from time to time to comment on the state of the political situation, on public feeling in the State, as indicated in the Press or in other ways, and on economic affairs, (eg unemployment and commerce)." Consistently with that practice, a document dated 16 December 1974 outlining the contents and public availability of the papers of Sir John's predecessor, Sir Paul Hasluck, provides as follows: "This collection of papers contains copies of documents which have not been placed on official files. Consequently they are additional to material that may be found on the files of Government House, the Prime Minister's Office and Commonwealth Government Departments. This collection is arranged in five groups. Group 1. Copies of despatches written by the Governor-General for the information of Her Majesty the Queen and the acknowledgements made of them by the Private Secretary to the Queen. The originals are now the property of the Queen and the permission of Her Majesty or Her successor has to be obtained before the documents can become public." Likewise, on 22 September 1976, Sir John wrote, on a personal and confidential basis, to the Queen's Private Secretary, Sir Martin Charteris: "I recently had occasion to remake my will. This resulted in my realising that something should be done about my papers. These include, amongst other things, documents relevant to my Governor-Generalship, especially the crisis. They include a lot of diary notes, records of conversations and draft chapters of possible future books. Also included, of course, is my copy of the correspondence between us. Nettle One thing that worries me is, that if I were to die in the relatively near future β indeed whenever I die β someone has to have the custody and control of our letters. Do you have any suggestions about this? I would not wish to leave this correspondence in Government House. Each Governor- General takes with him such material. Having regard to the probable historical importance of what we have written, it has to be, I think, preserved at this end as well as in the Palace. ... The alternatives appear to be to allow it to go into the custody of my literary editors, unopened and fully embargoed with instructions for it to be deposited in a bank or some other safe place, or to let it go to, say, the National Library completely embargoed for whatever period of time you suggest." Sir Martin replied on 8 October 1976: "I have no doubt in my own mind that the best solution, from The Queen's point of view, would be for [your papers] to be deposited in the National Library. ... If you agree to this solution it remains to be decided for what period of time your papers are placed under complete embargo. The figure we usually specify nowadays is 60 years from the end of the appointment concerned." On 18 October 1977, the Prime Minister, Malcolm Fraser, wrote to Sir John advising that Ministers had under consideration the introduction of an Archives Bill but that the provisions for compulsory transfer, custody and access would not apply "to the records of a Governor-General or his Office" because "a proper distinction should be made between Government House records and the records of executive government", which was "reflected in the Bill as drafted". The Prime Minister proceeded to observe, however, that "Government House records nevertheless are part of the history of Australia", that it was thus "proper that they should receive all the care and protection possible" and that, to that end, the Bill provided that Archives "may enter into arrangements with a Governor-General to take custody of records under access rules which a Governor-General may lay down". He continued: "Royal Household records, including The Queen's correspondence with Governors-General, are protected in Britain under special archives rules. I am sure you will agree that there should be no lesser protection in Australia. ... I hope that it will be possible, when the legislation is passed, for your Office to move promptly to enter into arrangements with the Australian Archives for the protection of records arising from your own period in office." Nettle Seemingly as a result of arrangements made in response to that request, on 18 November 1977 the Director-General of the Australian Archives wrote to the Official Secretary to the Governor-General, David Smith, in the following terms: "On the question of the transfer of Sir John's papers, as I remember it, it was agreed that both the originals and the copies of the papers would be transferred to the custody of the Australian Archives and that I would arrange for the copies to be forwarded by Foreign Affairs safe hand to a London address to be determined when Sir John has finalised his London arrangements. I am to wait upon your initiative in these things, you will let me know when you wish me to take custody ... I can guarantee the security and the privacy of the papers placed in the custody of the Archives. The question of access. Given the nature of the sensitive papers, these would normally be administered by the official policy governing such papers whether in the custody of the Australian Archives or of the Royal Archives at Windsor. I assume that any variation from these rules will be determined by discussions in London. I would, however, like to stress one matter and that is, I suggest the desirability of Sir John making adequate and suitable provision for the disposition of the sensitive papers in case of death or incapacity. ... It might be possible, for example, if Sir John uses a bank vault for security deposit of these copies, that in case of death or incapacity, the papers should be either placed in the custody of or retained by the bank in order that they might be transferred securely into the custody of either the Australian Archives or the Royal Archives at Windsor." On 8 December 1977, Sir John ceased to hold the office of Governor- General, and Mr Smith became the Official Secretary to Sir John's successor, Sir Zelman Cowen. But, on 23 December 1977, Mr Smith wrote a handwritten, apparently personal note to Sir John, who was then in London, to the effect that he had, in his own time, partially completed the process of photocopying the papers for transmission of the copies to Sir John in London. Mr Smith continued: "In the meantime the papers are in my strong-room under absolute security until the task is completed and the original file is in Archives." On 3 June 1978, Mr Smith wrote, again in hand and apparently in his personal capacity, to the effect that the process of copying was finally completed and that the originals: "will now be sealed and lodged with the Director-General of Archives, with instructions that they are to remain closed until after 8 December 2037, ie 60 years after you left office". Nettle Then, as foreshadowed, on 26 August 1978 Mr Smith wrote to the Director- General of the Australian Archives: "This package confidential correspondence between the Right Honourable Sir John Kerr, AK, GCMG, GCVO, K St J, QC, Governor-General of the Commonwealth of Australia from 11 April 1974 until 8 December 1977, and Her Majesty The Queen. personal contains and the In accordance with the Queen's wishes and Sir John Kerr's instructions, these papers are to remain closed until 60 years after the end of his appointment as Governor-General, ie until after 8 December 2037. Thereafter the documents are subject to a further caveat that their release after 60 years should be only after consultation with the Sovereign's Private Secretary of the day and with the Governor-General's Official Secretary of the day." As can be seen, therefore, at all relevant times Sir John regarded the letters from the Monarch, and the copies of his own letters to the Monarch, as subject to an established understanding of confidentiality. Consistently with that understanding, Sir John resolved that the correspondence should be deposited with Archives subject to the embargo. And, to that end, Sir John gave instructions for the correspondence to be so deposited. On those facts, the overwhelming inference is that Sir John continued to exercise control over the correspondence at the time of deposit. A lot is made in the appellant's argument, and the plurality's reasons133, of the fact that the records were at some points of time kept by Mr Smith in his official strong room. But, for the reasons already expressed134, the mere fact that a personal communication may be kept pro tem in an available place of storage of the official establishment is not sufficient to infer an intention that the communication should thenceforth stand as an official record of that establishment. Much less could it be sufficient to infer an intention that Mr Smith or anyone else in the official establishment could thenceforth exercise control over the correspondence, personally or in an official capacity. A lot is made, too, in the plurality's reasons135, of the fact that the letter of deposit with Archives was on official letterhead and identified Mr Smith as the "Official Secretary to the Governor-General". But that unexceptional use of 133 See reasons of Kiefel CJ, Bell, Gageler and Keane JJ at [22], [115], [117]. 134 See [140]-[141] above. 135 See reasons of Kiefel CJ, Bell, Gageler and Keane JJ at [11]-[13], [116]. Nettle official stationery and an official title can hardly be regarded as involving an assertion by Mr Smith of the right to control the correspondence, either personally or in his capacity as Official Secretary, by then to Sir Zelman. Any implication to that effect is immediately contradicted by Mr Smith's express statements that the correspondence was "personal and confidential" to Sir John and the Monarch and that the papers were to remain closed for 60 years in accordance with "Sir John Kerr's instructions". Relying on later correspondence between Sir John and Mr Smith, the appellant also contended that Sir John ran his office at Government House by distinguishing between his "personal papers", which were kept in his Administrative Secretary's office and were later sent to him in London after his tenure as Governor-General, and "official papers", which were "passed out" to the Official Secretary's office, as "must have" occurred with the correspondence in issue. That contention is not persuasive. The evidence relied upon is a letter of 15 January 1981 from Mr Smith to Sir John, outlining how "letters and telegrams" sent to Sir John "supporting or criticising [his] actions of 11 November 1975" were dealt with. It explains that the letters and telegrams to which Sir John replied personally were kept in the Administrative Secretary's office and later sent to London with other personal papers, while the remaining letters and telegrams were passed out to the Official Secretary's office, acknowledged where possible, and placed in boxes in a store-room in out-buildings at Government House to go to the Archives as soon as possible. Contrary to the appellant's contention, it does not in Mr Smith's office β even indicate correspondence "private" and "confidential" β was, ipso facto, an official record of the official establishment of the Governor-General. Rather, it only confirms that Sir John exercised personal control over correspondence to which he attended personally, like that with the Monarch, notwithstanding that such correspondence might be relevant to his performance of the viceregal office. that every document ever placed repeatedly described as "personal" or This conclusion is supported by a letter of 15 December 1983 from the Acting Director-General of the Australian Archives to Sir John as to arrangements to be made to bring back archival material with Sir John from England to Australia. The clearly understood distinction between personal records of the Governor- General and records of the official establishment of the Governor-General is apparent in the following paragraph of that letter: "In my view, it is important that such arrangements be made for its storage, preservation and accessibility as are appropriate to both the official and personal components. Of course, it will be necessary for any such arrangements to take account of the provisions of Archives legislation which was passed in October. Briefly, the position will be that all private and personal material including direct and personal correspondence with Nettle the Queen, is exempt from the provisions of the legislation. Any official material is subject to provisions covering disposal, access and storage." (emphasis added) Finally, the appellant relied as well upon the fact, apparent from evidence at trial, that some of Sir John's correspondence with the Monarch was "drafted with the Official Secretary's input". That evidence consisted of the following paragraph from a personal and confidential letter of 24 March 1981 from Sir John to "I appreciate very much all that you have done for me, including, of course, your attention to the 'Palace correspondence'. As to the latter, I have always been very glad that I introduced the system during my period of the Official Secretary participating in the preparation of that correspondence. Your checking of it before despatch and suggestions which you made from time to time as to its contents were very valuable to me, as were your comments on the replies from the Palace." According to the appellant, the fact that the Official Secretary was involved in the composition of some of the Palace correspondence was a strong indicator that the correspondence was correspondence of the official establishment of the Governor- General. That contention should also be rejected. The fact that Sir John involved his Official Secretary in correspondence with the Monarch does not suggest that the correspondence so created was anything other than a personal communication by Sir John, sent, copied and kept in accordance with the established understanding that it would remain confidential, and thus subject to the personal control of the Governor-General. It shows no more than that Sir John sufficiently valued the ability of the Official Secretary as to seek his assistance in composing the personal correspondence with the Palace. Conclusion For the foregoing reasons, nothing in the evidence gives reason to doubt that Sir John exercised control over his personal communications with the Monarch from the moment that they were written or received to the moment of their deposit with the Archives. At times, that control was exercised through Mr Smith, who, as Sir John's agent, had custody of the correspondence until that custody was transferred to the Archives. In the absence of contrary evidence, it follows that the correspondence was in Sir John's lawful possession at all relevant times. And, as the plurality's reasons indicate136, Sir John's powers over the correspondence are not to be attributed to the Commonwealth or a Commonwealth 136 See reasons of Kiefel CJ, Bell, Gageler and Keane JJ at [106]. Nettle institution merely because Sir John held a public office. Hence, even if the Commonwealth or a Commonwealth institution had a superior right to possession as owner of some or all of the correspondence, Sir John's control could not be attributed to any organ of government. In the result, no part of the correspondence was the "property" of the Commonwealth or of a Commonwealth institution, and, accordingly, the appeal should be dismissed. The Official Secretary to the Governor-General of the Commonwealth of Australia deposited a package with the Australian Archives, as it then was, on 26 August 1978. That package contained letters and telegrams, and attachments such as newspaper clippings, between the Right Honourable Sir John Kerr, who held the office of Governor-General of the Commonwealth of Australia from 11 July 1974 to 8 December 1977, and Her Majesty The Queen. The question in this case is whether each item of correspondence in that package is a "Commonwealth record" within the meaning of the Archives Act 1983 (Cth) and subject to the access regime in Div 3 of Pt V of that Act or merely "other material"137. I agree with the plurality that the answer to that question is that each item of correspondence in that package is a "Commonwealth record". I write separately primarily to address the construction of key provisions of the Archives Act. Archives Act The package was deposited with the Australian Archives prior to the commencement of the Archives Act. Upon commencement of that Act138, the contents of the package became "records" which formed part of the "archival resources of the Commonwealth", and which the Australian Archives had the function of conserving and preserving139. The "archival resources of the Commonwealth" consist of such "Commonwealth records" and "other material" as are "of national significance or public interest" and "relate to", among other things, "the history or government of Australia"140. Record A "record" is broadly defined to include a document, or an object, in any form that is, or has been, kept by reason of "any information or matter that it contains or that can be obtained from it" or "its connection with any event, person, 137 See Archives Act, s 3(2). 138 The complete text of the relevant provisions of the Archives Act is set out in the reasons of Kiefel CJ, Bell, Gageler and Keane JJ at [35]-[53]. It is unnecessary to repeat it except to the extent necessary to explain these reasons. 139 Archives Act, ss 3(2), 5(2)(a). The Australian Archives was created by s 5(1) of the Archives Act. It was later renamed the National Archives of Australia: Census Information Legislation Amendment Act 2000 (Cth), Sch 2. 140 Archives Act, s 3(2)(a). circumstance or thing"141. The fact that a document or object exists is not sufficient for it to be a "record". For a document or object to be a "record", it must be kept, or have been kept, for one or both of the stated reasons. Commonwealth record A "Commonwealth record" is, among other things, "a record that is the property of the Commonwealth or of a Commonwealth institution"142. There are two limbs to the definition: "property of the Commonwealth" and "property ... of a Commonwealth institution"143. The definition cannot be read as treating "of the Commonwealth or of a Commonwealth institution" as a compound expression. And describing the expression as "comprehensive" cannot obscure the fact that many of the institutions in the list of Commonwealth institutions are not legal persons. the first of which A "Commonwealth institution" is defined to mean one of a list of eight institutions, the Governor-General"144. Many of the institutions in the list are not legal persons and are therefore not recognised by law as capable of having legal rights and duties145. The inclusion of institutions that are not legal persons in the definition of a "Commonwealth institution" has interlinked consequences. the "official establishment of The first consequence is that, like artificial legal persons, the interests of the named institutions can be pursued and protected only by natural persons appointed to act for an institution either generally or specifically146. For the official 141 Archives Act, s 3(1) definition of "record". 142 Archives Act, s 3(1) para (a) of the definition of "Commonwealth record". 143 Each reference to the limbs of the definition of "Commonwealth record" in this judgment is a reference to the limbs in para (a) of that definition. 144 Archives Act, s 3(1) definition of "Commonwealth institution". See reasons of Kiefel CJ, Bell, Gageler and Keane JJ at [41]. 145 Paton, A Textbook of Jurisprudence, 4th ed (1972) at 391-395; Dicey, Morris and Collins on the Conflict of Laws, 15th ed (2012), vol 2 at 1528-1529. 146 Paton, A Textbook of Jurisprudence, 4th ed (1972) at 394-395. establishment of the Governor-General, the Official Secretary is such a natural Property A second consequence concerns the meaning to be given to "property". "[P]roperty" is not defined in the Archives Act. As Gleeson CJ, Gaudron, Kirby and Hayne JJ said in Yanner v Eaton148, the concept of "property" may be elusive. The word "property" can refer to something that "belongs to another" but it can also be no more than a description of a legal relationship with a thing; it can refer to "a degree of power that is recognised in law as power permissibly exercised over the thing"149. Thus, it "can be, and is, applied to many different kinds of relationship with a subject matter"150. It can and often does refer to "a legally endorsed concentration of power over things and resources", or "control over access"151, which may not derive from legal title. In deciding what is "property ... of a Commonwealth institution" (here, the official establishment of the Governor-General), the question is whether "property" is limited to something that belongs to another152, or whether it extends to records in the custody of the official establishment of the Governor-General β or, to put it another way, records over which the Official Secretary has a legally endorsed concentration of power. "Property" is a core element of both limbs of the definition of "Commonwealth record". It is a common element. In the first limb of the definition the of "Commonwealth record" β "a record the property of that 147 See Governor-General Act 1974 (Cth), s 6. 148 (1999) 201 CLR 351 at 365-367 [17]-[20]. See also Telstra Corporation Ltd v The Commonwealth (2008) 234 CLR 210 at 230-231 [44]. 149 Yanner (1999) 201 CLR 351 at 365-366 [17]. 150 Yanner (1999) 201 CLR 351 at 366 [19]. 151 Gray, "Property in Thin Air" (1991) 50 Cambridge Law Journal 252 at 299, cited in Yanner (1999) 201 CLR 351 at 366 [18]. 152 See Pope v Curl (1741) 2 Atk 342 at 342 [26 ER 608 at 608]; In re Wheatcroft (1877) 6 Ch D 97 at 98; Earl of Lytton v Devey (1884) 54 LJ Ch 293. cf Victoria Park Racing and Recreation Grounds Co Ltd v Taylor (1937) 58 CLR 479 at 496-497; Yanner (1999) 201 CLR 351 at 365 [17]; JT International SA v The Commonwealth (2012) 250 CLR 1 at 69 [175]. See also Hohfeld, "Some Fundamental Legal Conceptions as Applied in Judicial Reasoning" (1913) 23 Yale Law Journal 16 at 21-22. Commonwealth" β "property" may be thought to be limited to, or referring to, something that belongs to another, though it is not necessary to decide that point. The content of the second limb of the definition, however, compels a different conclusion. Where, as here, the relevant Commonwealth institution has no legal personality, the reference to "property ... of a Commonwealth institution" (emphasis added) must be read as extending to those records of an institution in the custody of that institution. "Custody" is not limited to physical custody. It may be physical custody but "property" in a record also can, and often does, extend to records over which an institution has a legally endorsed concentration of power absent physical custody β for example, when a document is provided to a third party to hold it as bailee for, or agent of, that institution. And where the document is held by a third party as bailee for, or agent of, that institution, the institution still has custody of β "property" in β the document because it retains a legally endorsed concentration of power over the document. The institution may, subject to the terms on which the document was provided to the third party, call for the return of it. At the same time, the third party may be described as having custody of β "property" in β the document because the third party holds it with a legally endorsed concentration of power, albeit that the source of the power to hold and control the document is different from the institution's because it derives from the institution. Moreover, the construction of what is "property", and thus "property ... of a Commonwealth institution", that has been described is not inconsistent with, but is reinforced by, s 24(2)(d) of the Archives Act. Section 24(2)(d) provides that the prohibition in s 24(1) on a person engaging in conduct that results in destruction or other disposal of a Commonwealth record, or transfer of the custody or ownership of a Commonwealth record, or damage to or alteration of a Commonwealth record, does not apply to anything done "for the purpose of placing Commonwealth records that are not in the custody of the Commonwealth or of a Commonwealth institution in the custody of the Commonwealth or of a Commonwealth institution that is entitled to custody of the records". The provision recognises that Commonwealth records may not be in the physical custody of the Commonwealth or of a Commonwealth institution, and that steps may need to be taken to place those Commonwealth records in the physical custody of the Commonwealth or of a Commonwealth institution that is "entitled to custody of the records". What that entitlement is will not be uniform. Official establishment of the Governor-General It is unnecessary to attempt any general definition of the phrase "official establishment of the Governor-General" in the Archives Act153. Although the version of the Governor-General Act 1974 (Cth) in force at the time the Archives Act was enacted did not refer to the Official Secretary154, the phrase "the official establishment of the Governor-General" certainly includes the Official Secretary to the Governor-General155 acting in his or her official capacity and, in that capacity, having custody of the records of that institution. Parties' positions the Two aspects positions noted. parties' First, Professor Jennifer Hocking did not accept that the records which had been deposited with the Australian Archives were the property of the official establishment of the Governor-General. And the Director-General of the National Archives of Australia and the Attorney-General of the Commonwealth, intervening, did not accept that the inference could be drawn that the records were kept in the official establishment of the Governor-General. should Second, the parties embraced the conclusion reached by the primary judge156 and the Full Court of the Federal Court of Australia157 that the phrase "the property of the Commonwealth or of a Commonwealth institution" was to be given content by the common law. The Director-General of the National Archives of Australia and the Attorney-General of the Commonwealth then submitted that it was critical to examine the common law concerning ownership of correspondence. There can be no dispute that the law distinguishes between: property in or associated with letters as tangible property; copyright in their contents; and other rights relating to their contents, such as the right to restrain a breach of 153 Archives Act, s 3(1) para (a) of the definition of "Commonwealth institution". 154 Provisions referring the Official Secretary were introduced into the Governor-General Act by the Public Service Reform Act 1984 (Cth), ss 139, 141. 155 See Governor-General Act, s 6. 156 Hocking v Director-General of National Archives of Australia (2018) 255 FCR 1 at 157 Hocking v Director-General of the National Archives of Australia (2019) 264 FCR confidence158. Moreover, as a chattel, the "property in the paper" of a letter is owned by the recipient159 and if the sender of a letter keeps a copy, that copy belongs to the sender, not the recipient160. Indeed, the Archives Act itself recognises that the National Archives of Australia may enter into arrangements to accept the care of records from a person other than a Commonwealth institution and that those arrangements may provide for the extent (if any) to which the Archives or other persons are to have access to those records161. But those respective positions were adopted because each party misunderstood and misconstrued the concept of "property" in the phrase "property ... of a Commonwealth institution" in the Archives Act. As has been explained162, the reference to "property" is not limited to something that belongs to another but, relevantly, extends to records in the custody of an institution. To treat "property" as limited to something that belongs to another would fail to recognise that many of the Commonwealth institutions are not legal persons. It is this which leads to the construction that has been given to "property" and, thus, the second limb of the definition of "Commonwealth record". Issue In the present appeal, it was an agreed fact that the package which was deposited with the Australian Archives under the letter of deposit of 26 August 1978 contained the letters and telegrams Sir John received from The Queen and a contemporaneous copy of each letter and telegram Sir John sent to Her Majesty. The question which emerges is whether that package was "property" of the official establishment of the Governor-General and was deposited by the Official Secretary on behalf of the official establishment of the Governor-General. 158 OBG Ltd v Allan [2008] AC 1 at 76 [274], citing Philip v Pennell [1907] 2 Ch 577. See also Oliver v Oliver (1861) 11 CB (NS) 139 [142 ER 748]; Macmillan & Co v Dent [1907] 1 Ch 107 at 120-121, 129; British Oxygen Co v Liquid Air Ltd [1925] Ch 383 at 389-390. cf Moorhouse v Angus and Robertson (No 1) Pty Ltd [1981] 1 NSWLR 700, especially at 711; Musical Fidelity Ltd v Vickers [2003] FSR 50 at 159 Pope v Curl (1741) 2 Atk 342 at 342 [26 ER 608 at 608]. See also Oliver v Oliver (1861) 11 CB (NS) 139 [142 ER 748]; Earl of Lytton v Devey (1884) 54 LJ Ch 293. 160 In re Wheatcroft (1877) 6 Ch D 97 at 98. 161 Archives Act, s 6(2). See also s 6(3). 162 See [171]-[175] above. For the reasons that follow, the answer is yes: the Official Secretary to the Governor-General, in his capacity as Official Secretary on behalf of the official establishment of the Governor-General, had custody of the original file, and then deposited the package containing the contents of that original file with the Australian Archives. "Property ... of a Commonwealth institution" The Official Secretary had physical custody of the papers later deposited with the Australian Archives. He referred to these papers as the "original file". The Official Secretary recorded that "the papers [were] in [his] strong-room under absolute security until the task [of copying the papers for Sir John] [was] completed and the original file [was] in Archives". It is thus apparent that the original file was not taken by Sir John when his appointment as Governor-General ceased but was instead held by the Official Secretary. Further, when Sir John subsequently sought access to what was in the original file, he did not ask for the original file to be sent to him in London. Sir John asked for a copy163. That the original file was part of the administrative apparatus surrounding the Governor-General is reinforced by the Official Secretary's correspondence with Sir John, written on "Government House" letterhead, about the copying of the contents of the original file and the deposit of the contents of the original file with the Australian Archives164. That Sir John had ceased to be Governor-General by the time the Official Secretary first corresponded with him on those subjects does not detract from that conclusion. Mr Smith remained employed as Official Secretary, albeit a new Governor-General had been appointed. Practically speaking, there was, and had to be, some continuity in the apparatus surrounding the office of Governor-General. It was also an agreed fact that "[o]n 26 August 1978 Mr Smith, in his capacity as Official Secretary to the Governor General lodged with the [Australian] Archives the documents contained in Archives record AA1984/609". Mr Smith, in his capacity as Official Secretary to the Governor-General, wrote that deposit letter165 on the letterhead of the Governor-General of the Commonwealth of Australia, Government House, Canberra, and signed it "David I Smith", above the typewritten words "Official Secretary to the Governor-General". The inevitable inference is that physical transfer of the package to the Australian Archives was controlled by the Official Secretary to the Governor-General, in his capacity as 163 Reasons of Kiefel CJ, Bell, Gageler and Keane JJ at [21]-[22]. 164 Reasons of Kiefel CJ, Bell, Gageler and Keane JJ at [22]. 165 Reasons of Kiefel CJ, Bell, Gageler and Keane JJ at [12]. Official Secretary on behalf of the official establishment of the Governor-General, rather than on behalf of, or as agent for, Sir John. On any view, the physical transfer of the package was not made by Sir John or his personal representative. The form and content of the documents in the original file166 further reinforce the conclusion that Mr Smith deposited the package in his capacity as Official Secretary on behalf of the official establishment of the Governor-General. Most, but not all, of the letters and telegrams were exchanged by Sir John, as Governor-General, through the Official Secretary. All of the letters and telegrams were exchanged by The Queen through her Private Secretary. The majority of the documents were letters addressing topics relating to the official duties and responsibilities of the Governor-General. Some of the letters were in the form of reports to The Queen about the events of the day in Australia. Certain of the reports included attached photocopies of newspaper articles and other correspondence "expanding upon and corroborating the information communicated by the Governor-General in relation to contemporary political happenings in Australia". that correspondence, it was only to be expected that it would be kept within the official establishment of the Governor-General with responsibility for keeping records created or received by a Governor-General in that capacity. the nature and significance of the plurality explain167, given Thus, it does not matter if Sir John had some property interest in the correspondence or its contents β any such property interest was not inconsistent with the official establishment of the Governor-General having "property" in the letters as that term is used in the Archives Act. But if Sir John did have some property interest in the correspondence or its contents then under the control of the Official Secretary in his official capacity (and it is unnecessary to resolve that question), Sir John encouraged and agreed in the Official Secretary retaining custody of the package containing that correspondence, and then subsequently depositing it with the Australian Archives168. By those actions, Sir John must be taken to have given up any property interest he may have held. For Sir John, it was enough that he had a copy of the correspondence. Put in different terms, when Sir John put in train, as he did, that the correspondence on the original file was to be copied and then the contents of that original file deposited with the Australian Archives, Sir John gave up any claim that he might have had in respect of the original file. The better view is that even before Sir John took those steps, the original file was the "property" of the official 166 Reasons of Kiefel CJ, Bell, Gageler and Keane JJ at [10]. 167 Reasons of Kiefel CJ, Bell, Gageler and Keane JJ at [117]. 168 Reasons of Kiefel CJ, Bell, Gageler and Keane JJ at [16]-[18], [21]-[22]. establishment of the Governor-General. The steps described above which Sir John took put the matter beyond doubt. Finally, although not determinative, subsequent correspondence between Sir John and the Official Secretary in the early 1980s reinforces that conclusion. The correspondence records that Sir John knew that what he described as the "Palace correspondence", namely the package the subject of this appeal, was "lodged in the National Archives" and that other papers that Sir John had left behind, after he had decided which papers he would take with him, "remained as part of the official records of the Governor-General's Office". In a letter dated 20 May 1980, the Official Secretary told Sir John that those papers that Sir John had left behind: "are still held here at Government House in our own file storage ... Irrespective of where the papers are physically kept, they are now part of the official records of this office, and the Official Secretary of the day is responsible for their safe custody. The advice which I have received ... is that I have no authority to release these or any other papers from the official records." In responding to that letter in July 1980, Sir John did not dispute or take issue with these matters but, instead, said he wished to talk with Professor Neale, the then Director-General of the Australian Archives, about other material he may have been able to put together with a view to depositing it in the Australian Archives in addition to the items already there. Later correspondence between Sir John and the Official Secretary in 1981 records that that discussion was held. Part of contents of package personal and confidential and terms of deposit Much was made in argument in writing and orally of the fact that the correspondence between Sir John and The Queen was personal and confidential and, further, that the letter of deposit stated that it was their joint wish that the papers were to remain closed until 60 years after the end of Sir John's appointment169. Those matters are not determinative of the disposition of this appeal. They are outweighed by the considerations addressed above170, which show that the transfer of the package to the Australian Archives was controlled by the Official Secretary in that capacity on behalf of the official establishment of the 169 Reasons of Kiefel CJ, Bell, Gageler and Keane JJ at [12]. This was later said to be reduced to 50 years: reasons of Kiefel CJ, Bell, Gageler and Keane JJ at [28]. 170 See [182]-[185] above. Governor-General. The designation of the correspondence as personal and confidential and the terms of the deposit may be relevant when the reconsiders Director-General of Professor Hocking's request for access. Those considerations may β I do not say must β be relevant171. And, of course, depending on the precise contents of "any information or matter that [each record] contains or that can be obtained from it"172, reconsideration of the request for access to each Commonwealth record may give rise to different answers. the National Archives of Australia Form of orders For these reasons, I agree that orders should be made in the form proposed in the reasons for decision of Kiefel CJ, Bell, Gageler and Keane JJ173. 171 Archives Act, s 35. 172 Archives Act, s 3(1) para (a) of the definition of "record". 173 Reasons of Kiefel CJ, Bell, Gageler and Keane JJ at [124]. Edelman Introduction On 26 August 1978, Mr David Smith, acting in his capacity as Official Secretary to the Governor-General, and on instructions of the former Governor- General, Sir John Kerr, lodged with the Australian Archives (now the National Archives of Australia, or "Archives"174) a package of documents being "originals" of correspondence between Sir John and the Queen (always by her Private Secretary), namely the originals of letters received, the originals of telegrams sent, and the contemporaneous copies of letters sent (described in some correspondence as "carbon copies") with photocopies of attachments such as newspaper articles. Those original documents are now held in record AA1984/609. The appellant, Professor Hocking, is an academic historian who was refused access to those original documents by the Archives. She applied for judicial review of that decision but her application was dismissed by the Federal Court of Australia. An appeal was dismissed by a majority of the Full Court of the Federal Court of Australia. The period of the correspondence covered by the original documents was one described by the primary judge as relating to "one of the most controversial and tumultuous events in the modern history of the nation"175, namely the dismissal of Prime Minister Whitlam by the Governor-General, Sir John Kerr. The primary judge found that Sir John had assumed that he owned the "material"176. Two years prior to the lodgement of the original documents with the Archives, Sir John had remarked to the Private Secretary to the Queen that, upon departure from office, "[e]ach Governor-General takes with him such material". However, Sir John also recognised that the historical significance of the correspondence meant that it had to be preserved. Perhaps for this reason, after his retirement from office, Sir John took the material with him by having Mr Smith, his former Official Secretary, make and send photocopies of the originals to him in London, whilst preserving the originals in a file at Government House to be deposited with the Archives. The photocopied material sent to Sir John in London is now also contained in the Archives, as Series M4513 Part 1. That material is a near complete copy of the original documents. But this litigation concerns the "originals", not the photocopies. 174 Archives Act 1983 (Cth), s 3(1). 175 Hocking v Director-General of National Archives of Australia (2018) 255 FCR 1 at 176 Hocking v Director-General of National Archives of Australia (2018) 255 FCR 1 at Edelman The question on this appeal is whether the Commonwealth had a property right to those originals. The legal issue concerns the meaning of the expression "the property of the Commonwealth or of a Commonwealth institution" in the definition of "Commonwealth record" in s 3(1) of the Archives Act 1983 (Cth). If the original documents held in the Archives record AA1984/609 were "the property of the Commonwealth or of a Commonwealth institution" when they were deposited then they are Commonwealth records within s 3(1) of the Archives Act and are within the "open access period" as defined in s 3(7) because 31 years has expired since their creation. Access will then be governed by Div 3 of Pt V of the Archives Act. Any restrictions upon the ability of the appellant to access them will depend upon the application of exemptions to access. On the other hand, if (i) the original documents in record AA1984/609 were not the property of the Commonwealth or of a Commonwealth institution when they were deposited, and (ii) the Archives accepted the care of those records "from a person other than a Commonwealth institution", then access to those documents will be governed by arrangements made with that person, rather than by Div 3 of Pt V of the Archives Act177. In this case, the terms of the letter of deposit of the original documents provided for restrictions that "[i]n accordance with The Queen's wishes and Sir John Kerr's instructions, these papers are to remain closed until 60 years after the end of his appointment as Governor-General, ie until after 8 December 2037" and that thereafter their release should only be "after consultation with the Sovereign's Private Secretary of the day and with the Governor-General's Official Secretary of the day". Throughout this litigation, a consistent approach was taken to the meaning of "property" in the definition of "Commonwealth record" in s 3(1) of the Archives Act. That approach was taken in this Court by the appellant, and in the joint submissions of the Director-General of the Archives and the Commonwealth (intervening), together described in these reasons as "the respondent". The same approach was taken by the parties in the Federal Court and the Full Court, and by all judges in those courts. That approach, correctly, was to treat the Archives Act as using the term "property" in its ordinary, common law sense in relation to chattels rather than to create a new, and potentially unique, meaning. As explained below, that long-established sense involves a right to exclude others from the chattel (here, the record) or, by its correlative, it recognises a duty upon others not to interfere physically with the chattel. As to the meaning of the expression "of the Commonwealth or of a Commonwealth institution", this expression is sparsely used in the Archives Act. 177 See Archives Act, ss 6(2), 6(3), 70(3). Edelman The focus throughout the Archives Act is upon Commonwealth institutions. It is not upon "the Commonwealth". The phrase "of the Commonwealth or of a Commonwealth institution" is used in the Archives Act only to describe the holding of property rights. It follows the familiar form of a "comprehensive expression"178. It is comprehensive in the sense that it is exhaustive of the ways of holding property rights to documents that are, or were, kept by the wide list of enumerated Commonwealth institutions. The comprehensive expression does not obscure the issue concerning how title could be held by a Commonwealth institution without legal personhood. Nor does it obscure issues that would otherwise arise by legislative provisions that deem the property rights of some of those institutions to be held by the Commonwealth as a body politic. Rather, the inclusion in the comprehensive expression of the Commonwealth as a body politic is a direct response to, and a clear resolution of, those issues. The relevant property right will always be held by either the Commonwealth institution or the Commonwealth as a body politic. The primary judge and the majority of the Full Court held, again correctly, that institutionally kept documents that record matters such as the exercise of the executive power of the Commonwealth by the Governor-General are property of the Commonwealth179. But the majority of the Full Court, affirming the decision of the primary judge, concluded that the correspondence between the Governor- General and the Queen was "personal" rather than "official"180. In dissent in the Full Court, Flick J held that personal and official were not binary categories. A conclusion that the correspondence was personal did not prevent the conclusion, which his Honour reached, that the correspondence was also official181. That conclusion, with respect, was correct. For the reasons below, the original documents in the Archives record AA1984/609 were created or received officially, and were kept as institutional documents. They were kept by the "official establishment of the Governor-General" to the exclusion of others. They are the "property of the Commonwealth". No convention existed that requires them to be treated otherwise. The appeal must be allowed. 178 Dennis Hotels Pty Ltd v Victoria (1960) 104 CLR 529 at 600. See Constitution, 179 Hocking v Director-General of National Archives of Australia (2018) 255 FCR 1 at 32 [120]; Hocking v Director-General of the National Archives of Australia (2019) 264 FCR 1 at 19 [91]. 180 Hocking v Director-General of the National Archives of Australia (2019) 264 FCR 181 Hocking v Director-General of the National Archives of Australia (2019) 264 FCR Edelman The definition of a "Commonwealth record" in s 3(1) of the Archives Act A "Commonwealth record" is defined, with exceptions that can be put to one side, in s 3(1) of the Archives Act as, relevantly, a "record that is the property of the Commonwealth or of a Commonwealth institution". A "record" is defined as "a document, or an object, in any form (including any electronic form) that is, or has been, kept by reason of: (a) any information or matter that it contains or that can be obtained from it; or (b) its connection with any event, person, circumstance or thing". Two aspects of the definition are presently relevant. First, and of considerable importance, a document will only be a record if it is, or has been, "kept" for the relevant reason. Secondly, although records can be electronic, the core concept of a record is concerned with tangibles, namely chattels. This case concerns only chattels. The meaning of "property" in the Archives Act The common law meaning of property in relation to chattels The word "property" is not defined in the Archives Act. As all the parties and both courts below rightly assumed, in the absence of any indication in the Archives Act to the contrary it must bear its usual legal meaning. At common law, the word has been used in different senses, applying to both tangibles and intangibles, and common law and equitable rights to things182. Its meaning in relation to intangibles is different from its meaning in relation to tangibles. Its meaning in relation to equitable rights is different from its meaning in relation to common law rights. But when dealing with a relationship with tangible things, or chattels, the common law conception of property has been the subject of development and analysis for hundreds of years. It would be very surprising if Parliament had intended to use the concept of "property" in the Archives Act to describe a legal relationship with a chattel according to some unique, undefined meaning, unknowable until it is revealed by creative judicial exegesis. If Parliament had created such a unique meaning it would potentially compete with the common law conception of property rights, violating a numerus clausus principle of a closed number of property rights183 and creating a potential clash between the statutory regime and co-existing remedies for common law actions for 182 Zhu v Treasurer of New South Wales (2004) 218 CLR 530 at 577 [135]; Kennon v Spry (2008) 238 CLR 366 at 397 [89]. See also McFarlane and Stevens, "The nature of equitable property" (2010) 4 Journal of Equity 1. 183 See also Swadling, "Opening the Numerus Clausus" (2000) 116 Law Quarterly Review 354 at 357. Edelman detinue and replevin and equitable remedies for delivery up of chattels. Unsurprisingly, it did not do so. Despite its long history of exposition and development at common law, the concept of "property" in relation to a chattel has sometimes been the subject of confusion by loose thinking and expressions of "common speech"184. For instance, "property" is sometimes used, by "false thinking"185, to describe a thing that is the subject of rights: "That book is my property". In more precise thought, it has been long recognised that when the concept of property is used in law in the context of a tangible thing it describes the legal relationship between a person and a thing rather than the thing itself. The focus is therefore upon the nature of the legal relationship between a person and a thing. Because the relationship between a person and a thing is metaphysical β that is, abstracted from the physical thing β there is a tendency in the case law, adopted at times in submissions on this appeal, to describe that legal relationship between person and thing by metaphors and slogans such as a "bundle of rights"186 or "a legally endorsed concentration of power over things"187. Although these expressions can occasionally be helpful in directing thinking, they should not control analysis. They have serious "limits as an analytical tool or accurate 184 Bentham, "An Introduction to the Principles of Morals and Legislation", in Bowring (ed), The Works of Jeremy Bentham (1843), vol 1 at 108. See also Minister of State for the Army v Dalziel (1944) 68 CLR 261 at 276; White v Director of Public Prosecutions (WA) (2011) 243 CLR 478 at 485 [10]. 185 Yanner v Eaton (1999) 201 CLR 351 at 366 [18]. 186 Minister of State for the Army v Dalziel (1944) 68 CLR 261 at 285; Mabo v Queensland [No 2] (1992) 175 CLR 1 at 207; Yanner v Eaton (1999) 201 CLR 351 at 366 [17]; Western Australia v Ward (2002) 213 CLR 1 at 95 [95], 262 [615], 263 [618], 273 [638]; Telstra Corporation Ltd v The Commonwealth (2008) 234 CLR 210 at 230 [44]; Wurridjal v The Commonwealth (2009) 237 CLR 309 at 421-422 [296], see also at 360 [89]; White v Director of Public Prosecutions (WA) (2011) 243 CLR 478 at 485 [10]; JT International SA v The Commonwealth (2012) 250 CLR 1 at 32 [37], 107 [299]-[300]. 187 Yanner v Eaton (1999) 201 CLR 351 at 366 [18]; Telstra Corporation Ltd v The Commonwealth (2008) 234 CLR 210 at 230-231 [44]; Wurridjal v The Commonwealth (2009) 237 CLR 309 at 421-422 [296], see also at 360 [89]; White v Director of Public Prosecutions (WA) (2011) 243 CLR 478 at 485 [10]; JT International SA v The Commonwealth (2012) 250 CLR 1 at 83 [218]. Edelman description"188. They can be "awkward and incongruous"189. In the United States, where the "bundle of rights" metaphor may have originated190, it has been said that its conflation of use interests with legal interests, commonly "sticks" in the bundle or sources of "power", is a reason that the application of the approach "winds up being wrong in practice"191. A "right to use" a chattel is generally treated as one of the different "sticks" in the "bundle of rights" or as an aspect of the power derived from a "concentration of patiently garnered rights"192. But a "right to use" a chattel usually means only a liberty to use it193 and a mere liberty to use a chattel is neither necessary194 nor sufficient195 for a property right. The misleading language of a "right to use" can also lead to the error of thinking that property rights arise only by lawful conduct. But even a thief can obtain a property right to exclude all others except those with a better right if the thief has physical control of the chattel and the intent to exercise that control on their own behalf to exclude others196. A clear understanding of a 188 Yanner v Eaton (1999) 201 CLR 351 at 366 [17]. 189 JT International SA v The Commonwealth (2012) 250 CLR 1 at 107 [300]. 190 See Lewis, A Treatise on the Law of Eminent Domain in the United States (1888) at 191 Smith, "Property Is Not Just a Bundle of Rights" (2011) 8 Econ Journal Watch 279 192 HonorΓ©, "Ownership", in Guest (ed), Oxford Essays in Jurisprudence (1961) 107 at 193 Allen v Flood [1898] AC 1 at 29. See Douglas and McFarlane, "Defining Property Rights", in Penner and Smith (eds), Philosophical Foundations of Property Law 194 Douglas and McFarlane, "Defining Property Rights", in Penner and Smith (eds), Philosophical Foundations of Property Law (2013) 219 at 233-234, discussing Yearworth v North Bristol NHS Trust [2010] QB 1. 195 Leigh and Sillavan Ltd v Aliakmon Shipping Co Ltd [1986] AC 785 at 809, quoted in R G and T J Anderson Pty Ltd v Chamberlain John Deere Pty Ltd (1988) 15 NSWLR 363 at 368-369. See also Sport Internationaal Bussum BV v Inter-Footwear Ltd [1984] 1 WLR 776 at 794; [1984] 2 All ER 321 at 325. 196 Buckley v Gross (1863) 3 B & S 566 at 574 [122 ER 213 at 216]; Field v Sullivan [1923] VLR 70 at 84; Costello v Chief Constable of Derbyshire Constabulary [2001] 1 WLR 1437 at 1446 [22]; [2001] 3 All ER 150 at 159; McMillan Properties Pty Edelman property right to tangible goods should eschew metaphors and avoid conflation of different juristic concepts by being expressed simply as the right to exclude others or, by a correlative, as a duty upon those others not to interfere physically with the chattel. For chattels, this is the "necessary and sufficient condition of identifying the existence of property"197. Even despite the (powerfully criticised198) bundle of rights and concentration of power metaphors, the Supreme Court of the United States has still characterised the right to exclude others as "one of the most essential sticks in the bundle of rights"199. Indeed, even the most vociferous supporter of the "bundle of rights" has described the right to possession β that is, the right to control physical access β as "the foundation on which the whole superstructure of ownership rests"200. Similarly, in the passage by Professor Gray from which members of this Court borrowed the slogan of a "legally endorsed concentration of power"201, the power in relation to a thing was described as the "control over access" of the thing and the ability to exclude others from it202, with Gray later adding that "[b]eyond the irreducible constraints imposed by the idea of excludability, 'property' Ltd v W C Penfold Ltd (2001) 40 ACSR 319 at 325-326 [44]; Government of the Islamic Republic of Iran v The Barakat Galleries Ltd [2009] QB 22 at 32 [15]; Bride v Shire of Katanning [2013] WASCA 154 at [72]. 197 Merrill, "Property and the Right to Exclude" (1998) 77 Nebraska Law Review 730 198 For instance, Penner, "The 'Bundle of Rights' Picture of Property" (1996) 43 UCLA Law Review 711; Merrill, "Property and the Right to Exclude" (1998) 77 Nebraska Law Review 730; Smith, "Property Is Not Just a Bundle of Rights" (2011) 8 Econ Journal Watch 279; Douglas and McFarlane, "Defining Property Rights", in Penner and Smith (eds), Philosophical Foundations of Property Law (2013) 219. 199 Kaiser Aetna v United States (1979) 444 US 164 at 176. 200 HonorΓ©, "Ownership", in Guest (ed), Oxford Essays in Jurisprudence (1961) 107 at 201 Yanner v Eaton (1999) 201 CLR 351 at 366 [18]; Telstra Corporation Ltd v The Commonwealth (2008) 234 CLR 210 at 230-231 [44]. 202 Gray, "Property in Thin Air" (1991) 50 Cambridge Law Journal 252 at 299. Edelman terminology is merely talk without substance β a filling of empty space with empty words"203. The essence of a property right to, or "property" in, a chattel as the right to exclude others also flows from the requirements for a property right in the chattel, namely that a person have (i) a sufficient degree of physical control (sometimes described as "factual possession"204) to the exclusion of others and (ii) a manifested intention to exercise that control personally (ie not on behalf of another) in a manner that "exclude[s] unauthorized interference"205. These two requirements have been recognised as essential for a property right to a physical thing for thousands of years206. They are the reason the common law has long refused to recognise as a property right the mere "custody" of a chattel where the custodian holds the chattel for another207. Hence, the common law has long held that "mere custody" of a chattel by a servant or agent on behalf of an employer or principal is not sufficient for a property right208. Similarly, for a property right to arise by bailment the bailee "must have both the intention and the practical means to exercise independent control over the item that would exclude the bailor's own possession and control"209. The established meaning of property applied in the Archives Act The Archives Act generally uses "property" in this long-established common law sense with its essence being the right to exclude others. As the 203 Gray, "Property in Thin Air" (1991) 50 Cambridge Law Journal 252 at 306. 204 J A Pye (Oxford) Ltd v Graham [2003] 1 AC 419 at 435-436 [40]. 205 Pollock and Wright, An Essay on Possession in the Common Law (1888) at 41. 206 J A Pye (Oxford) Ltd v Graham [2003] 1 AC 419 at 435-436 [40]. 207 Pollock and Wright, An Essay on Possession in the Common Law (1888) at 60. 208 Alexander v Southey (1821) 5 B & Ald 247 at 248-249 [106 ER 1183 at 1183-1184]; Wilton v Commonwealth Trading Bank of Australia Ltd [1973] 2 NSWLR 644 at 651; Rowell v Alexander Mackie College of Advanced Education (1988) Aust Torts Reports ΒΆ80-183 at 67,733; Burnett v Randwick City Council [2006] NSWCA 196 at [64], referring to Fleming, The Law of Torts, 9th ed (1998) at 73. See now Sappideen and Vines (eds), Fleming's The Law of Torts, 10th ed (2011) at 77 [4.180] and Palmer, Palmer on Bailment, 3rd ed (2009) at 458 [7-001]. 209 American Law Institute, Restatement of the Law Fourth: Property, Tentative Draft No 1 (2020), Bailments, Β§2 at 78, Comment e. Edelman Australian Law Reform Commission explained in its review of the Archives Act, the drafts of what became the Archives Bill 1978 (Cth) evolved from a "provenance definition" to a "custodial definition" before the present property definition was adopted, albeit with recognition of the difficulties for the Commonwealth to prove "ownership" where the Commonwealth sought to recover what it believed to be official records from private custodians210. The Archives Act provides for mechanisms to compel Commonwealth institutions to transfer to the Archives records that are the property of the Commonwealth211 but it does not subject individuals to those mechanisms212. Apart from Commonwealth institutions, the procedures for recovery of chattels that are Commonwealth property are left to the general law, including actions for detinue or delivery up of chattels. The assumption is that the same notion of a property right is involved under the Archives Act as at common law. As the Director- General of the Australian Archives observed when asked during a committee consideration of a draft Archives Bill about the test for identifying a Commonwealth document213: "As the test is a property test it is not determinable under this Bill. Under existing law, it is determinable in the courts and if it ever came to an attempt to acquire a paper the onus would be on the Commonwealth to prove that right." Consistently with the common law conception of property as a right to exclude others, the Archives Act also draws the same distinctions as the common law between (i) property and custody and (ii) property and physical possession without an intention to possess personally. The contrast between "property" and "custody" can be seen throughout the Archives Act. For instance, s 5(2)(f) describes a function of the Archives as being "to seek to obtain ... material (including Commonwealth records) not in the custody of a Commonwealth institution". Hence, s 5(2)(f) assumes that a record that is the property of a Commonwealth institution, within the definition of "Commonwealth record" in s 3(1), might not be in the custody of a Commonwealth institution. 210 Australian Law Reform Commission, Australia's Federal Record: A review of Archives Act 1983, Report No 85 (1998) at [8.13]-[8.14]. 211 Archives Act, s 27. 212 Australia, Senate, Standing Committee on Education and the Arts (Reference: Archives Bill) 1978-79, Official Hansard Transcript of Evidence (1979) at 45. 213 Australia, Senate, Standing Committee on Education and the Arts (Reference: Archives Bill) 1978-79, Official Hansard Transcript of Evidence (1979) at 47. Edelman Another example is s 6(1)(c), which is concerned with the power of the Archives to make arrangements relating to the custody of material that forms part of the archival resources of the Commonwealth, a category that, by s 3(2), is not limited to records that are the property of the Commonwealth or of a Commonwealth institution. A further example is s 24(2)(d), which provides that the prohibitions in s 24(1) do not apply to anything done "for the purpose of placing Commonwealth records that are not in the custody of the Commonwealth or of a Commonwealth institution in the custody of the Commonwealth or of a Commonwealth institution that is entitled to custody of the records". That is, this section contemplates that a record can be the "property" of the Commonwealth or of a Commonwealth institution (and therefore a Commonwealth record) without the record being in the custody of the Commonwealth or of a Commonwealth institution. The Archives Act contrasts property and possession in s 3(6) by providing for the power to make regulations, in certain cases, to deem records to be Commonwealth records, and therefore the property of the Commonwealth or of a Commonwealth institution, where the Commonwealth is in possession of the records. In other words, s 3(6) recognises that there will be cases where records will not be the property of the Commonwealth despite the Commonwealth being in physical possession of the records. Another example is s 22(2), which entitles the Commonwealth to "the possession of records kept by a Royal Commission, or by a Commission of inquiry, that are no longer required for the purposes of the Commission". However, since the mere entitlement to possession is insufficient for the records to become the "property" of the Commonwealth, the sub-section also provides that "all such records shall be deemed to be Commonwealth records [and therefore property of the Commonwealth] for the purposes of this Act". "The Commonwealth or ... a Commonwealth institution" in the Archives Act What is "the Commonwealth"? Rousseau described the "public person ... formed by the union of individuals", with individual "members" collectively described as "The People", as a "Body Politic"214. Rousseau carefully distinguished "The People", the collective term for membership of the body politic, from the subsets of "Citizens" and "Subjects"215. In its primary sense, the body politic of the Commonwealth is such a legal body with membership constituted by the political community of the 214 Rousseau, "The Social Contract", in Barker (ed), Social Contract: Essays by Locke, Hume and Rousseau (1947) 237 at 257-258. 215 Rousseau, "The Social Contract", in Barker (ed), Social Contract: Essays by Locke, Hume and Rousseau (1947) 237 at 257-258. Edelman people, and with established territory216. In this primary sense of "the Commonwealth", which the preamble to the Constitution describes as an "indissoluble Federal Commonwealth", the membership is of all the people and not merely the subsets such as statutory citizens, subjects or electors217. The Constitution contains inherent limits upon the extent to which legislatures can fracture the membership of the political community of the body politic such as by exclusion of those people who were, and remain, necessary members of the body politic218 or by imposition of unjustified restraints upon the participation by the people in the operation of the body politic219. In its primary sense, the body politic described as "the Commonwealth" is a legal entity or right-holder. It has a legal body or corpus like a body corporate and it represents the people who are its members. Maitland described it as a "corporation aggregate"220. As Griffith CJ said in The Commonwealth v Baume221, "the body politic ... [although] not a corporation or body corporate in the sense in which those words are used in [s 102 of the Common Law Procedure Act 1899 (NSW)] ... stands for the Crown as representing the whole community". The body politic of the Commonwealth has legislative, executive and judicial functions222. The expression "Crown in right of the Commonwealth" is commonly used to 216 Quick and Garran, The Annotated Constitution of the Australian Commonwealth (1901) at 366-368; Lumb, "'The Commonwealth of Australia' β Constitutional Implications" (1979) 10 Federal Law Review 287 at 289. 217 Rowe v Electoral Commissioner (2010) 243 CLR 1 at 93 [279]; Arcioni, "The Core of the Australian Constitutional People β 'The People' as 'The Electors'" (2016) 39 University of New South Wales Law Journal 421 at 443-444. See also DJL v Central Authority (2000) 201 CLR 226 at 277-278 [134]; Love v The Commonwealth (2020) 94 ALJR 198 at 247 [249], 258 [295], 259 [304]-[305], 277 [406]-[407], 283-284 [434]; 375 ALR 597 at 656, 670, 672, 695-696, 704. 218 See Love v The Commonwealth (2020) 94 ALJR 198; 375 ALR 597. 219 Cheatle v The Queen (1993) 177 CLR 541 at 560-561; Lange v Australian Broadcasting Corporation (1997) 189 CLR 520; Roach v Electoral Commissioner (2007) 233 CLR 162; Rowe v Electoral Commissioner (2010) 243 CLR 1. 220 Maitland, "The Crown as Corporation" (1901) 17 Law Quarterly Review 131 at 140. 221 (1905) 2 CLR 405 at 413. 222 New South Wales v The Commonwealth (Work Choices Case) (2006) 229 CLR 1 at Edelman describe the exercise of executive power by the Commonwealth as a body politic223, albeit that this expression is not without difficulties224. The primary sense of "the Commonwealth" as a body politic is not its only connotation. There are others225. For instance, the Commonwealth has also been extended beyond its character as a body politic to include all legal entities within the description of Commonwealth agencies and instrumentalities. This includes the creation of a new body corporate from that which would otherwise have fallen within the conception of the Commonwealth as a body politic. For instance, "the Commonwealth" as a party to a suit, within s 64 of the Judiciary Act 1903 (Cth), is not limited to the body politic of "the Commonwealth stricto sensu" but extends also to cases of "a statutory corporation representing the Crown in right of the Another meaning of the Commonwealth is a secondary, or instrumental, conception, also used in the Constitution, to describe the "central organs of 223 The Commonwealth v Rhind (1966) 119 CLR 584 at 599. As Dawson J observed in The Commonwealth v Mewett (1997) 191 CLR 471 at 498, this expression may have been first so described in The Municipal Council of Sydney v The Commonwealth (1904) 1 CLR 208 at 231. See also R v Sutton (1908) 5 CLR 789 at 805; Bank of New South Wales v The Commonwealth ("the Bank Nationalisation Case") (1948) 76 CLR 1 at 362; Jacobsen v Rogers (1995) 182 CLR 572 at 585; The Commonwealth v Western Australia (1999) 196 CLR 392 at 409-411 [31]-[36], 429- 431 [105]-[109]; Sue v Hill (1999) 199 CLR 462 at 501 [90]. 224 State Authorities Superannuation Board v Commissioner of State Taxation (WA) (1996) 189 CLR 253 at 291, 293; The Commonwealth v Western Australia (1999) 196 CLR 392 at 431 [108]-[109]; Australian Competition and Consumer Commission v Baxter Healthcare Pty Ltd (2007) 232 CLR 1 at 13 [2], 41 [82], 45 [89], 51 [115], 55 [131]. See also Hartford Davis, "The Legal Personality of the Commonwealth of Australia" (2019) 47 Federal Law Review 3 at 9. 225 Kruger v The Commonwealth (1997) 190 CLR 1 at 56; Re Minister for Immigration and Multicultural Affairs; Ex parte Goldie (2004) 217 CLR 264 at 271 [23]; JT International SA v The Commonwealth (2012) 250 CLR 1 at 72 [185]. See also Hartford Davis, "The Legal Personality of the Commonwealth of Australia" (2019) 47 Federal Law Review 3 at 7-8. 226 Maguire v Simpson (1977) 139 CLR 362 at 398. See further Austral Pacific Group Ltd (In liq) v Airservices Australia (2000) 203 CLR 136 at 143 [15]; Australian Securities and Investments Commission v Edensor Nominees Pty Ltd (2001) 204 CLR 559 at 581-582 [42]-[43]. Edelman government", and particularly the executive227. In this secondary sense, the Commonwealth connotes the "organizations or institutions of government in accordance with the conceptions of ordinary life" including "government owned and controlled instrumentalities"228. Such organisations can be, but need not be, entities with a legal corpus or body. The instrumental use of "Commonwealth institutions" in the Archives Act The central focus of the Archives Act is upon Commonwealth institutions of government in accordance with the conceptions of ordinary life. An object of the Archives Act is "overseeing Commonwealth record-keeping, by determining standards and providing advice to Commonwealth institutions"229. The functions of the Archives include, in broad terms, promoting the "creation, keeping and management of current Commonwealth records" "by providing advice and other assistance to Commonwealth institutions"230. The archival resources of the Commonwealth are defined in terms relating to "the legal basis, origin, the Commonwealth or of a development, organization or activities of Commonwealth institution"231 and "a person who is, or has at any time been, associated with a Commonwealth institution"232. The Archives has power to "chronicle and record matters relating to the structure and functioning of Commonwealth institutions"233 and, on request, to "assist Commonwealth institutions in the training of persons responsible for the keeping of current Commonwealth records"234. For the purposes of the Archives Act, the Archives is entitled to full and free access, at all reasonable times, to all Commonwealth 227 Quick and Garran, The Annotated Constitution of the Australian Commonwealth (1901) at 368; Lumb, "'The Commonwealth of Australia' β Constitutional Implications" (1979) 10 Federal Law Review 287 at 289. 228 Deputy Commissioner of Taxation v State Bank (NSW) (1992) 174 CLR 219 at 230- 231. See also Bank Nationalisation Case (1948) 76 CLR 1 at 362-363. 229 Archives Act, s 2A(a)(iii). 230 Archives Act, s 5(2)(c). 231 Archives Act, s 3(2)(b). 232 Archives Act, s 3(2)(c). 233 Archives Act, s 6(1)(d). 234 Archives Act, s 6(1)(j). Edelman records in the custody of a Commonwealth institution other than the Archives235. Although the Archives has power to enter arrangements to accept care of records from a person other than a Commonwealth institution236, the Archives Act contemplates the usual circumstance being transfer of a Commonwealth record to the Archives from a Commonwealth institution237. Commonwealth institutions are, in general terms, entitled to reasonable access to Commonwealth records that they have transferred238. The "Commonwealth institutions" about which the Archives Act is concerned are defined. They are the organisations or institutions of government which accord with the conceptions of ordinary life. Some are incorporated. Some are not. The definition of "Commonwealth institution" in s 3(1) provides that they are: "(a) the official establishment of the Governor-General; (b) the Executive Council; (c) the Senate; (d) the House of Representatives; (e) a Department; (f) a Federal court or a court of a Territory other than the Northern Territory or Norfolk Island; (g) an authority of the Commonwealth; or (h) the Administration of an the external Territory other Commonwealth" is itself defined in s 3(1), again using the Commonwealth in its conception based upon ordinary life, as generally including, subject to exceptions: "an authority, body, incorporated or unincorporated, established for a public purpose" in various ways; "the holder of a prescribed office under the Commonwealth"; and Commonwealth-controlled companies and associations. tribunal or organization, whether Island". An "authority of than Norfolk The enumerated Commonwealth institutions are separate from the holders of offices within those institutions unless the office under the Commonwealth β that is, appointed by the Commonwealth or employed by the Commonwealth239 β is prescribed240. Thus, the institutions of the House of Representatives and the Senate will not automatically include the offices of its members, Senators, or 235 Archives Act, s 28. 236 Archives Act, s 6(2). 237 Archives Act, s 27. See also s 6A(2). And compare the exception in s 6(3) for other transfers. 238 Archives Act, s 30. 239 Sykes v Cleary (1992) 176 CLR 77 at 95-96; Re Lambie (2018) 263 CLR 601 at 628 240 Archives Act, s 3(1), definition (b) of "authority of the Commonwealth". Edelman Ministers241. The institution of the High Court of Australia and other federal courts of Australia will not automatically include the offices of the Justices or judges. And the institution of the official establishment of the Governor-General will not automatically include the office of the Governor-General. However, as will be seen below, things that are created or received for the institution and which are, or were, kept by the holders of those individual offices will be the property of the institution or, if the institution has no legal existence, the property of the Commonwealth as a body politic. The Governor-General and the institution of "the official establishment of the Governor-General" The office of Governor-General is not the institution of the official establishment of the Governor-General nor is it the Commonwealth as a body politic242. But it is closely related to both. The constitutional office of Governor- General has some independence243 and involves public loyalty. As Mr Kingston said at the Convention Debates in 1897, if the Governor-General "does his duty conscientiously he need not fear anything, neither should he be driven from the strict course of duty by the hope of reward"244. Nevertheless, despite swearing an oath or making an affirmation to perform functions without fear or favour, many of the official acts performed by the Governor-General, particularly the exercises of executive power under s 61 of the Constitution, involve decisions taken upon advice of a Minister or the Executive Council245. Those exercises of power are official acts, creating documents that, if kept by the Governor-General, will be retained institutionally and owned by the Commonwealth as a body politic. The enumerated institution, "the official establishment of the Governor- General", was not included in the early incarnations of the Archives Bill. Clause 18(1)(a) of the 1978 draft of the Archives Bill expressly provided that Divs 2 and 3 of Pt V do not apply to the "records of the Governor-General or of a former Governor-General". However, a Senate Standing Committee on Constitutional and Legal Affairs suggested that whilst there may be a need "for special treatment to be given to a few categories of records, such as judges' 241 See also the Notes to Archives Act, ss 27 and 28. 242 See Constitution, s 2. 243 Constitution, s 3. 244 Official Report of the National Australasian Convention Debates (Adelaide), 14 April 1897 at 633. 245 Kline v Official Secretary to the Governor-General (2013) 249 CLR 645 at 661 [38]. Edelman notebooks and correspondence [by the Governor-General] with the Monarch", the guarantee of preservation and reconstruction of national history "must exist with respect to the operation of the Head of State, of the Legislature and of the Judiciary, much as it exists in relation to the operation of departments"246. The Senate Standing Committee referred to evidence from the Director-General of the Australian Archives where the following exchange occurred247: "Senator HAMER β If we eliminate [the exclusion of records of a Governor-General and the Executive Council and Cabinet documents] and treat them like the other documents, would any damage be done that you can see? Prof. Neale β Well, there would be to the relations between Australia and Great Britain. The Governor-General, representing the Queen, is in direct correspondence with Her Majesty. The letters from the Governor-General would be in the Royal Archives and copies of the Monarch's letters to the Governor-General would be in the Australian Archives." Senator Hamer then asked what damage to the relations between Australia and Great Britain could result if the letters were treated like other documents with an exemption under cl 31 where they contain information the disclosure of which would prejudice the international relations of the Commonwealth. After the Director-General responded by referring to the different access periods in Great Britain and Australia, Senator Hamer observed that Australia could make its own rules because "[w]e are dealing here with ... the Queen of Australia". He observed248: "What would happen if you brought all these under the same provision and just used the exemption under clause 31 [categories of exempt record] for 246 Australia, Senate, Standing Committee on Constitutional and Legal Affairs, Freedom of Information: Report of the Senate Standing Committee on Constitutional and Legal Affairs on the Freedom of Information Bill 1978 and the Archives Bill 1978 (1979) at 339 [33.22]-[33.23]. 247 Australia, Senate, Standing Committee on Constitutional and Legal Affairs (Reference: Freedom of Information), Transcript of Evidence, 13 December 1978 at 248 Australia, Senate, Standing Committee on Constitutional and Legal Affairs (Reference: Freedom of Information), Transcript of Evidence, 13 December 1978 at Edelman necessary protection? I am afraid that I still cannot understand why this cannot be done." Although the recommendations of the Senate Standing Committee were not initially adopted in the 1981 draft of the Archives Bill, which retained the exclusion of the Governor-General's records, they were adopted when the Archives Bill was reintroduced in 1983. The 1983 version of the Archives Bill removed the exclusion of the Governor-General's records and inserted the "official establishment of the Governor-General" into the definition of "Commonwealth institution". In the Second Reading Speech the Minister for Home Affairs and Environment said that "[t]he provisions of the legislation will apply to the records of the official establishment of the Governor-General, but not to his private or personal records"249. In this context, the expression therefore connotes the institutional apparatus that supports and assists the official acts of the Governor-General, equivalent to the institutional apparatus of a Department that supports and assists a Minister250. As the appellant pointed out in oral submissions, the only other similar statutory phrase is a reference to the "Governor-General's Establishment"251 in legislation which appropriated Β£10,000 from the Consolidated Revenue Fund to defray the expenses of "the Governor-General's establishment in connexion with the visit to Australia of Their Royal Highnesses the Duke and Duchess of Cornwall and York". The holding of property by the Commonwealth or Commonwealth institutions Although the focus of the Archives Act is upon Commonwealth institutions of government in accordance with the conceptions of ordinary life, on several occasions the Archives Act uses the comprehensive expression "the property of the Commonwealth or of a Commonwealth institution". One example is s 62(2), which is concerned with the transfer of samples of objects from Commonwealth institutions, where those samples being transferred from the Commonwealth institution are the property of the Commonwealth or of a Commonwealth institution. Another, and the matter of present significance, is the definition in s 3(1) of "Commonwealth record" as including property of the Commonwealth or of a Commonwealth institution. 249 Australia, House of Representatives, Parliamentary Debates (Hansard), 18 October 250 Compare Appropriation Act (No 1) 1982-83 (Cth), Sch 2, Divs 505 and 506. 251 Governor-General's Establishment Act 1902 (Cth). Edelman Despite the general focus throughout the Archives Act on Commonwealth institutions rather than on the Commonwealth as a body politic, the expression "of the Commonwealth or of a Commonwealth institution" was intended as a comprehensive expression to cover all of the ways in which property rights to documents that are or were kept by the enumerated institutions of government could be held252. The expression is comprehensive in the sense that it is exhaustive of all the ways in which property rights to institutionally kept documents can be held. The use of the conjunction "or", and the repetition of "of", reinforces the comprehensive nature of the expression as comprised of two different parts that exhaust the two different categories of person who might hold the property rights to institutionally kept documents. The comprehensive expression follows the same form as the expression in ss 55 and 90 of the Constitution, "duties of customs or of excise", which is also a "comprehensive expression"253 which "must be construed as exhausting the categories of taxes on goods"254. The comprehensive nature of the expression avoids the difficulty that arises where the enumerated institution is not a legal person, because the relevant property rights that would have been held by that institution if it were a legal person will be held by the Commonwealth. For instance, documents administered and kept within a Department of State are generally "property of the Commonwealth" as a body politic. Equally, documents that are administered and kept by an unincorporated body, tribunal or organisation falling within the meaning of an "authority of the Commonwealth" will also generally be "property of the Commonwealth" as a body politic. The comprehensive expression also avoids any debate about whether the relevant property right to a document is held by an institution with independent legal personality or by the Commonwealth as a body politic itself. As the Australian Law Reform Commission observed, "while most Commonwealth property is owned by the Commonwealth as a whole, there are some Commonwealth institutions which own property in their own right"255. A simple example is a Commonwealth-controlled company within the definition in s 3(1) of an "authority of the Commonwealth". 252 See also Archives Act, s 36(4)(d). 253 Dennis Hotels Pty Ltd v Victoria (1960) 104 CLR 529 at 600. 254 Ha v New South Wales (1997) 189 CLR 465 at 488, quoting Capital Duplicators Pty Ltd v Australian Capital Territory [No 2] (1993) 178 CLR 561 at 589-590. 255 Australian Law Reform Commission, Australia's Federal Record: A review of Archives Act 1983, Report No 85 (1998) at [8.39]. Edelman The comprehensive expression thus avoids any debate or dispute about whether the Commonwealth as a body politic holds a property right to documents that are in the custody of Commonwealth institutions or whether the property right is instead held by those institutions. For instance, any real or personal property, other than money, held by the High Court of Australia is deemed to be the property of the Commonwealth256. A record held by or on behalf of the Parliament or a House of Parliament is taken to be the property of the Commonwealth257. And a record kept by a Royal Commission or Commission of Inquiry which is no longer required for the purposes of the Commission is a record to which the Commonwealth is entitled to possession and is deemed to be a Commonwealth record, and therefore the property of the Commonwealth258. the institution The official establishment of the Governor-General is not an independent legal person. As I have explained above, the expression distinguishes the Governor-General from therefore distinguishes the Governor-General's private or personal records from official records kept by the official establishment. An assumption underlying the Archives Act is that a property right to institutional records is held by the Commonwealth. In other words, one assumption inherent in the expression "property of the Commonwealth or of a Commonwealth institution" is that a property right to those official records kept by the official establishment of the Governor-General, which is not a legal entity, will be a property right of the Commonwealth as a body politic. that supports them. It Property rights to the correspondence lodged with the Archives When Mr Smith lodged the documents now forming Archives record AA1984/609, he was acting in his capacity as Official Secretary to the Governor- General, then Sir Zelman Cowen, and doing so on the instructions of the former Governor-General, Sir John Kerr259. That record contains correspondence between 15 August 1974 and 5 December 1977, being correspondence between the Queen, by her Private Secretary, and the former Governor-General, Sir John, or his Official Secretary, Mr Smith. The subject matter was described by Sir John, in an extract of his autobiography tendered in evidence at trial, to be part of "the duty ... 256 High Court of Australia Act 1979 (Cth), s 17(3). 257 Archives Act, s 3(5). 258 Archives Act, s 3(1), definition of "Commonwealth record", read with s 22(2). 259 Hocking v Director-General of National Archives of Australia (2018) 255 FCR 1 at Edelman to send despatches which keep Her Majesty informed"260. The following was agreed by the parties as to the content of the correspondence: "The majority of the letters exchanged between the Governor-General (including by means of his Official Secretary) and the Queen (by means of Her Private Secretary) address topics relating to the official duties and responsibilities of the Governor-General. Some of the letters sent by the Governor-General (including by means of his Official Secretary) take the form of reports to The Queen about the events of the day in Australia. Certain of these letters include attachments comprising photocopies of newspaper clippings or other items of correspondence, expanding upon and corroborating the information communicated by the Governor-General in relation to contemporary political happenings in Australia." As will be seen, the title to the original documents, being the contents of Archives record AA1984/609, was held by the Commonwealth. It is therefore unnecessary to engage with the issue of whether Sir John Kerr manifested sufficient intention gratuitously to transfer title to those originals to the Commonwealth. The Commonwealth, as a body politic, had "property" in the original documents held in Archive record AA1984/609. General law property principles and the Archives Act It is curious that although huge intellectual effort has been devoted to the development of principles of administrative law regulating the authority by which public power is exercised, there has been far less focus upon the norms governing the manner of the exercise of authorised power and its consequences261. The parties to this case focused upon private law analogies, essentially relying on the Diceyan principle that government should be held to the same principles that apply between private persons262. The private law principle is that if the letters had been written by a person as an independent "professional" then the title to those letters would usually be held by that person263 and when they are sent the title would usually be held by the 260 Kerr, Matters for Judgment: An Autobiography (1978) at 329. 261 See Smith, "Loyalty and politics: From case law to statute law" (2015) 9 Journal of Equity 130 at 144. 262 Dicey, Lectures Introductory to the Study of the Law of the Constitution (1885) at 263 Breen v Williams (1996) 186 CLR 71 at 89, 101. Edelman intended recipient264. By contrast, if the letters had been written by a person as an employee or agent then the title to the letters would usually be held by the employer or the principal265, unless they were drafts, working papers, or "memoranda, notes, etc, made by him for his own information"266. The appellant's submissions effectively equated the legal position of the Governor-General with that of an agent. The respondent's submissions effectively equated the legal position of the Governor-General with that of the independent professional. All parties rightly recognised that the analogies were not entirely apt. But the underlying principle is important. The underlying principle is one which generally allocates to a person a property right to a new thing that the person created for themself but allocates the right to another where the new thing was created for another. The issue of when a new thing is created for another is not affected by the purely subjective views of the creator. It depends upon objective assumptions of responsibility, established by express or implied undertaking, including by reference to the history and status of an office. Thus, if a solicitor, not acting as agent or employee, procures a contract or deed for a paying client then, unless their agreement provides otherwise, that document will be owned by the client267. This principle can only be stated in general terms. A qualification must be made. Although both of the examples β the "agent" and the "professional" β assume that the property right becomes that of the creator of the new thing or the person on whose behalf the creator acts, that general proposition is not always true. Where a new thing is created using the materials of another, sometimes the property right will be held by the owner of the materials. Perhaps in anticipation that this might be an issue, the respondent submitted that the appropriate rule in relation to correspondence sent by Sir John Kerr was the approach adopted in Justinian's Institutes by which the creator of a new thing (here, the "carbon copies" and telegrams created by Sir John being assumed to be a new thing) became the owner unless the materials were all owned by another and the new thing could be 264 Earl of Lytton v Devey (1884) 54 LJ Ch 293 at 295, citing Pope v Curl (1741) 2 Atk 342 at 342 [26 ER 608 at 608]. 265 Breen v Williams (1996) 186 CLR 71 at 88, 101, quoting Leicestershire County Council v Michael Faraday and Partners Ltd [1941] 2 KB 205 at 216. 266 Breen v Williams (1996) 186 CLR 71 at 89, citing Chantrey Martin v Martin [1953] 2 QB 286 at 293 and Wentworth v De Montfort (1988) 15 NSWLR 348. 267 Breen v Williams (1996) 186 CLR 71 at 89. Edelman reduced back to its original material (blank paper that might be owned by the Commonwealth)268. With a dearth of modern authority, some judges have, like the submissions of the respondent, relied upon the rule adopted by Justinian's Institutes269. However, this rule: (i) was a forced compromise between two schools of thought270; (ii) was arguably intended to apply only where there was common ground between the schools271; (iii) has been powerfully criticised as taking "no account of the relative importance of the materials and of the maker's skill" and therefore leading to potentially bizarre consequences272; (iv) has not generally been adopted in English or Australian law273; and (v) is the subject of considerable variation in practice among Civilian jurisdictions274 with dispute even in Scotland, where the dominant rule is closest to, but still not identical with, the Roman rule275. 268 Citing Inst II.1.25. See Justinian's Institutes, tr Birks and McLeod (1987) at 57: "if the thing can be turned back into its materials, its owner is the one who owned the materials; if not, the maker". 269 International Banking Corporation v Ferguson, Shaw, & Sons 1910 SC 182; McDonald v Provan (of Scotland Street) Ltd 1960 SLT 231 at 232. See also Borden (UK) Ltd v Scottish Timber Products Ltd [1981] Ch 25 at 35, 44, 46; Associated Alloys Pty Ltd v Metropolitan Engineering and Fabrications Pty Ltd (1996) 20 ACSR 205 at 209-210. 270 See D 41.1.7.7 (Gaius, Common Matters or Golden Things, bk 2): The Digest of Justinian, tr ed Watson, rev ed (1998), vol 4 at 3. 271 Thomas, Textbook of Roman Law (1976) at 175, fn 4. 272 Nicholas, An Introduction to Roman Law (1962) at 137. 273 Glencore International AG v Metro Trading International Inc [2001] 1 All ER (Comm) 103 at 165 [178]. Compare Blackstone, Commentaries on the Laws of England (1766), bk II at 404; Associated Alloys Pty Ltd v Metropolitan Engineering and Fabrications Pty Ltd (1996) 20 ACSR 205 at 209-210. 274 Compare, for instance, Code Civil, Arts 570, 571 (France); BΓΌrgerliches Gesetzbuch, s 950 (Germany). 275 McDonald v Provan (of Scotland Street) Ltd 1960 SLT 231. See Scottish Law Commission, Corporeal Moveables: Mixing Union and Creation, Memorandum No 28 (1976) at [19]-[20]. Edelman For these reasons, although I proceed on the basis that Sir John Kerr was the creator of the correspondence sent to the Queen and that the Commonwealth had no right to exclude him from the original documents if they were created for him personally, I do not do so on the basis of the application of Justinian's rule as the respondent had submitted. I do so because the creation of the originals of the telegrams sent were the subject of substantial work and skill by Sir John and both the nature and the value of those originals depend essentially upon that work rather than upon the materials used. The same principle applies to the "originals" of the letters sent which were described as "carbon copies". I accept the submission of the Solicitor-General of the Commonwealth, which was not contested, that the Court should draw an inference that these carbon copies were "created simultaneously upon Sir John writing the letters ... rather than by some subsequent process by which an agent went away and copied them using a photocopier". However, the same conclusion might not apply in a case where the maker does no more than take a photocopy of another's thing so that the existence and nature of the new thing (if it be such) depends upon nothing more than the press of a button276. As the Director-General of the Australian Archives presciently observed during a committee consideration of the draft Archives Bill, "given modern copying technology, there may often be real doubt as to where ownership of a particular record resides"277. The correspondence was created and received by Sir John Kerr for the institution of the official establishment of the Governor-General The primary submission by the appellant was that the Commonwealth obtained a property right to all the original documents created or received by the Governor-General in the course of performance of his duties. This submission cannot be accepted. Since is neither the body politic of the Governor-General the Commonwealth nor the institution of the official establishment of the Governor- General, things created or received by the Governor-General can only become the property of the Commonwealth if the circumstances indicate that they were created or received officially, and retained institutionally. The creation or receipt of documents in that way involves physical control over the documents being asserted with a manifested, or objective, intention that the Commonwealth or the Commonwealth institution have a right to exclude others from them. 276 Compare Glencore International AG v Metro Trading International Inc [2001] 1 All ER (Comm) 103 at 165 [178]. 277 Australia, Senate, Standing Committee on Education and the Arts (Reference: Archives Bill) 1978-79, Official Hansard Transcript of Evidence (1979) at 19. Edelman The fact that something is created or received by a public officer in the course of performance of public duties is a powerful indicator that it was created or received for the institution so that the legal entity of the Commonwealth or the Commonwealth institution has a property right in that thing. But documents are commonly created or received in the course of performance of public duties where the creation or receipt is entirely personal and not institutional. Examples are preliminary working papers, personal notes or drafts of a final product created by judges, Ministers, Senators or the Governor-General. As the majority rightly said in the Full Court, if the Commonwealth obtained a property right in the correspondence, thus rendering the correspondence a "Commonwealth record" under s 3(1) of the Archives Act, simply because the officer was performing duties, this would "introduce an administrative provenance definition, when that alternative had been rejected some years earlier"278. The respondent submitted that the Commonwealth obtains a property right to documents created by the Governor-General when the Governor-General is acting as "an emanation" of the Commonwealth. But the expression "emanation of the Commonwealth" either is too opaque to be meaningful or collapses into an approach based upon agency which the respondent rightly disclaimed as too narrow. The "much criticised"279 expression, "emanation of the Crown", has similarly been said to convey "no meaning capable of precise significance"280 and, where it is used, commonly denotes a relationship of agency such that the so-called emanation is acting with actual or apparent authority of the Crown281. The issue of whether a document was created or received for an institution that is not a legal entity is not one of agency, although there are similarities. The general principles of property adopted in the Archives Act require consideration of whether the creation of the new thing (the carbon copies of letters, and originals of telegrams, sent) or the receipt of a new thing (the correspondence received), as objectively characterised, (i) was solely for Sir John Kerr personally so that he alone obtained the property right or (ii) was official, being created or received officially and retained for the institution of the official establishment of the Governor-General with a property right held by the body politic of the 278 Hocking v Director-General of the National Archives of Australia (2019) 264 FCR 279 NT Power Generation Pty Ltd v Power and Water Authority (2004) 219 CLR 90 at 280 Bank voor Handel en Scheepvaart NV v Slatford [1953] 1 QB 248 at 284. 281 International Railway Co v Niagara Parks Commission [1941] AC 328 at 342-343. See also Hollis v Vabu Pty Ltd (2001) 207 CLR 21 at 42 [50]. Edelman Commonwealth so that the correspondence was a "Commonwealth record" within s 3(1) of the Archives Act. There are five reasons why the correct characterisation is the latter in the circumstances of this case. First, the exchange of correspondence was treated by Sir John Kerr as an official issue. Sir John was assisted by Mr Smith in the preparation of correspondence sent to the Queen and in discussing the correspondence received from the Queen. As Sir John observed in a letter to Mr Smith, he adopted a system "of the Official Secretary participating in the preparation" of what he described as "Palace correspondence" and providing comments on the replies from the Palace. At that time, the office of Official Secretary to the Governor-General was not a statutory office282. The position of Official Secretary was filled by Mr Smith as a public servant holding an office in a Department (within the definition of "Commonwealth institution" in s 3(1) of the Archives Act), namely the Department of the Prime Minister and Cabinet283. Thus, the correspondence written by the Governor-General was authored with the assistance of an officer of the public service who formed part of the official establishment of the Governor-General. Secondly, as the primary judge correctly characterised the correspondence between the Governor-General and the Queen, it was correspondence "arising from the performance of the duties and functions of the office of Governor- General"284. Holders of high public offices such as that of the Governor-General have been described as "trustees of the public"285. Public powers to act in the performance of duties are said to be conferred "as it were upon trust"286. 282 Australia, House of Representatives, Public Service Reform Bill 1984, Explanatory Memorandum at 47. 283 Australia, House of Representatives, Public Service Reform Bill 1984, Explanatory Memorandum at 47. See Public Service Act 1922 (Cth), s 48A (as at 19 December 284 Hocking v Director-General of National Archives of Australia (2018) 255 FCR 1 at 285 Finn, "The Forgotten 'Trust': The People and the State", in Cope (ed), Equity: Issues and Trends (1995) 131 at 143. See also R v Bembridge (1783) 22 St Tr 1 at 155 ("an office of trust and confidence, concerning the public"); R v Whitaker [1914] 3 KB 286 Porter v Magill [2002] 2 AC 357 at 463 [19], quoting R v Tower Hamlets London Borough Council; Ex parte Chetnik Developments Ltd [1988] AC 858 at 872, in turn quoting Wade, Administrative Law, 5th ed (1982) at 355. See also Three Rivers Edelman These loose references to trusteeship are expressions of the duty of loyalty owed by holders of public offices created "for the benefit of the State"287. Like all implied duties of loyalty, the content of the duty falls to be determined against a background of general expectations, based upon custom, convention and practice, which impose upon the public officer "an inescapable obligation to serve the public with the highest fidelity"288. Thus, a member of Parliament has a duty to "act with fidelity and with a single-mindedness for the welfare of the community"289. Compliance with this obligation of loyalty was manifested by the expressed reason why Sir John Kerr kept the originals of the telegrams sent, the carbon copies of the letters sent, and the correspondence received, as part of the performance of his official duties. As Sir John expressed this reason in a letter to the Private Secretary to the Queen, it was that "[h]aving regard to the probable historical importance of what we have written, it has to be ... preserved". Sir John's expression of the desire to preserve the documents given their historical import, understood in light of his duties of public loyalty, militates powerfully against the originals having been created or received by him personally. Thirdly, events subsequent to the creation or receipt of the original correspondence, which reveal how the original correspondence was treated, can shed light on how the correspondence was created or received. In particular, the subsequent treatment of the "original" correspondence as institutional, that is, part of the official establishment of the Governor-General, is supported by a letter written by Prime Minister Malcolm Fraser to Sir John Kerr towards the end of Sir John's period as Governor-General and from which there is no suggestion of demur by Sir John. The Prime Minister referred in that letter to the draft Archives Bill and said that "Government House records ... are part of the history of Australia and it is proper that they should receive all the care and protection possible". The Prime Minister continued: District Council v Governor and Company of the Bank of England [No 3] [2003] 2 AC 1 at 235 (power "held in trust for the general public"). 287 Chitty, A Treatise on the Law of the Prerogatives of the Crown; and the Relative Duties and Rights of the Subject (1820) at 83. 288 Driscoll v Burlington-Bristol Bridge Co (1952) 86 A 2d 201 at 221. 289 R v Boston (1923) 33 CLR 386 at 400. See also Re Day [No 2] (2017) 263 CLR 201 Edelman "For that purpose clause 21 provides that Australian Archives may enter into arrangements with a Governor-General to take custody of records under access rules which a Governor-General may lay down." In the draft of the Archives Bill that was current at the time that the Prime Minister wrote, cl 21 permitted those arrangements to be made for records of the Governor- General that were exempt from the operation of Divs 2 and 3 of Pt V of the Archives Bill, concerning dealings with Commonwealth records and access to Commonwealth records290. Although that draft of the Archives Bill contained no reference to the "official establishment of the Governor-General" as a category of Commonwealth institution, it was still contemplated that the records were Commonwealth records. The Prime Minister was referring to an exemption from the regime of dealings with Commonwealth records and access to Commonwealth records which assumed that those records were Commonwealth records that required exemption. Naturally, once there was express provision for the institution of the Governor-General and removal of the exemption from the Archives Bill when it was reintroduced in 1983 the inference that originals of the correspondence were created or received institutionally, and were therefore Commonwealth records, became even stronger. Fourthly, the same institutional approach to the correspondence was taken after Sir John Kerr's retirement as Governor-General by the different treatment of the original correspondence (the original telegrams sent, the carbon copies of the letters sent, and the original letters received) and the copies made of those originals. Very shortly before Sir John's retirement as Governor-General took effect, on 18 November 1977 the Director-General of the Australian Archives wrote to Mr Smith, as Sir John's Official Secretary, confirming their agreement that both the originals and the "copies" would be transferred to the Australian Archives with the copies then to be sent to a London address for Sir John. After Sir John's retirement took effect, Mr Smith (who was then the Official Secretary to the new Governor-General, Sir Zelman Cowen) wrote to Sir John on 23 December 1977 and described photocopying that he had been undertaking on the instructions of Sir John of correspondence in the "original file" at Government House. He said that he could "copy only at night" and had been encountering problems with the copying process. He explained that "[i]n the meantime the papers are in my strong-room under absolute security until the task is completed and the original file is in Archives". These letters provide strong support for the treatment of Sir John Kerr's correspondence with the Queen as being subject to property rights of the Commonwealth as a body politic or, more loosely, as part of the institution of "the official establishment of the Governor-General". Relevantly, the matters supporting this conclusion are: (i) the presence of the "originals" of the 290 See cl 18(1)(a) of the Archives Bill 1978 (Cth). Edelman correspondence at Government House even after Sir John had left office; (ii) the separate arrangements made by Sir John for copies to be made for his own personal purposes; (iii) the description of the originals as part of a "file"; and (iv) the high security within Government House which was given to the file containing the originals. Fifthly, it was an agreed fact that Mr Smith lodged the originals of the correspondence with the Australian Archives on 26 August 1978 (at which time the Governor-General was Sir Zelman Cowen) as the Official Secretary to the Governor-General. Although Mr Smith referred in the letter of deposit to various caveats by Sir John Kerr including that the "papers are to remain closed until 60 years after the end of his appointment as Governor-General", he did not sign the letter of deposit as an agent for Sir John. He signed it as the "Official Secretary to the Governor-General". Each of these five matters points to the character of the correspondence between the Governor-General and the Queen as being created or received officially and kept institutionally. As I explain below, some of the content of that correspondence might have been confidential, and some might have contained observations of a personal nature, akin to those in correspondence between State Governors and the Queen concerning "reports relating to affairs in the State", which were described as "most helpful to Her Majesty" when containing information "of a general nature, from ... personal enquiries or experiences, and impressions gained during travel". Nevertheless, the agreed fact in this case was that the correspondence "relat[ed] to the official duties and responsibilities of the Governor-General". There was no convention that the correspondence was not official or institutional The respondent supported the contrary conclusion by relying upon the references by the primary judge to correspondence that suggested that several people subjectively held the view that title to the documents was held by Sir John Kerr. The people said to have held that subjective view were Sir John himself, one former Director-General of the Australian Archives, the executor of Lady Kerr's estate, and some previous Governors-General, namely Lord Stonehaven, Lord Casey, and Sir Paul Hasluck291. The respondent also relied upon the subjective view of the Private Secretary to the Queen, who, in replying to a letter from Sir John, referred to the letters as "your papers". 291 Hocking v Director-General of National Archives of Australia (2018) 255 FCR 1 at 11 [15], 29 [108], 30-31 [113]-[117(a)-(e)]. Edelman the Commonwealth. For These submissions were factually overstated. Sir John Kerr probably did not hold the view that he had title to the originals, as opposed to the copies, to the the reasons explained above292, exclusion of Prime Minister Fraser did not hold that view and Sir John had not demurred from the view of the Prime Minister in correspondence with him. In a letter to the Private Secretary to the Queen, Sir John also said that "I can make the appropriate decisions about papers which are exclusively mine, but our correspondence falls into a different category". It was in response to that letter that the Private Secretary had referred to "your papers dealing with the Governor-Generalship". Sir Paul Hasluck also did not regard his correspondence with the Queen as part of his personal property. In the outline to his collation of "The Governor- General's papers", which were an exhibit at trial, the papers were divided into five groups. The first group concerned the despatches written to the Queen and the responses by her Private Secretary. The documents in that group were described as requiring the permission of Her Majesty before they could be made public. In contrast, in the second group, notes made in the Governor-General's personal minute book were described as "the private property of Sir Paul Hasluck". As for the opinion of the Archives itself, the clearest expression of the opinion that such correspondence was not a Commonwealth record was made decades after the correspondence in issue. Earlier expressions of opinion are more equivocal. For instance, the appellant pointed to a statement by the Director- General of the Australian Archives in a letter dated 18 November 1977 that conditions of access to the originals of the correspondence in this case "would normally be administered by the official policy governing such papers" and that "variation from these rules will be determined by discussions in London". The role of London in amending rules of access is, at least, in tension with an understanding that the originals of the correspondence are the personal property of Sir John Kerr. More fundamentally than any factual overstatement, the legal flaw in the respondent's submission is that a person does not obtain a property right by thinking they have a property right or merely by them or others expressing that belief. The respondent's submission thus transmogrified to an argument that the expression of these subjective views established a convention that the correspondence was "private and confidential" and "does not form part of any official government record". If this convention existed at the time of the correspondence, and if it were not inconsistent with the policy of the Archives Act, then the respondent would be correct that the correspondence was not created or Edelman received officially nor retained institutionally so that the originals of the correspondence would not be the property of the Commonwealth. It is only in the application of whether the correspondence was created or received institutionally that the convention suggested in this case could be recognised and enforced by the Court293. The convention could not contradict the effect of the Archives Act; it could only operate to establish a rule based upon the uniform consensus of the relevant persons that correspondence passing between the Governor-General and the Queen is never created or received by the Governor- General officially nor retained institutionally. In other words, the convention to be given effect is that the correspondence would never be created or received for the institution of the official establishment of the Governor-General. A common starting point for ascertaining the existence of a convention is the three questions posed by Sir Ivor Jennings294: "first, what are the precedents; secondly, did the actors in the precedents believe that they were bound by a rule; and thirdly, is there a reason for the rule?" This approach is not a fixed legal test. Recorded historical precedents are only one indicator of past practice. Further, although the expressions of belief by actors can be important, the work and approach of senior bureaucrats, scholars and other writers can be relevant where the convention is one that binds the general public295. More fundamentally for present purposes, the conventions with which Jennings was concerned were those of a "duty-imposing" kind rather than a rule of characterisation such as characterising the nature of correspondence296. Nevertheless, it suffices in this case to address the convention in the terms upon which it was asserted by the respondent, purportedly supported by the three criteria proposed by Jennings. As Professor Twomey has explained, a convention that excludes from government records the correspondence between the Governor-General and the 293 Compare, generally, Dicey, Introduction to the Study of the Law of the Constitution, 9th ed (1939) at 417 and Barber, "Laws and Constitutional Conventions" (2009) 125 Law Quarterly Review 294. 294 Jennings, The Law and the Constitution, 5th ed (1959) at 136, adopted in Re: Resolution to Amend the Constitution [1981] 1 SCR 753 at 888. 295 See also Heard, "Constitutional Conventions: the Heart of the Living Constitution" (2012) 6 Journal of Parliamentary and Political Law 319 at 332. 296 See also Jaconelli, "Do Constitutional Conventions Bind?" (2005) 64 Cambridge Law Journal 149 at 152, citing Marshall, Constitutional Conventions: The Rules and Forms of Political Accountability (1984) at 210. Edelman Queen is "difficult to substantiate" upon Jennings' approach for three reasons297. First, prior to 1983, Commonwealth record-keeping was "haphazard and little regulated". If they were not lost, vice-regal records were sometimes kept by Governors-General or their families, sometimes kept by national institutions and sometimes archived on government files. Secondly, the precedents in relation to the manner in which vice-regal records are handled are, at best, "thin"298. The respondent's overstatement of the position of some of the relevant actors has already been mentioned. More fundamentally, some of the thin precedents relied upon by the respondent would support a wider convention than that relied upon by the respondent, extending to all correspondence between the Governor-General and the Queen, whether or not it was confidential. For instance, only "some" of the correspondence between Lord Casey and the Queen or her Private Secretary, which he took with him at the end of his term as Governor-General, was confidential299. In addition to the weakness of the precedents, there is also the lack of evidentiary support for the submission that the behaviour of the relevant actors is attributable only to a belief in an underlying norm that the original correspondence was personal and was not official. For instance, even if Sir Paul Hasluck believed that he held property rights to the exclusion of the Commonwealth in the personal and confidential correspondence between him and the Queen during his tenure as Governor-General, there is no evidence to suggest that he saw those property rights as arising due to an understanding that correspondence with the Queen must be treated as non-institutional. A similar point was made by the Director-General of the Australian Archives in evidence to a committee consideration of the draft Archives Bill about the practice of public servants and Ministers in treating official papers as if they were personal records. Even if this were not done knowingly, the 297 Twomey, "Peering into the Black Box of Executive Power: Cabinet Manuals, Secrecy and the Identification of Convention", in Varuhas and Stark (eds), The Frontiers of Public Law (2019) 399 at 410-411. 298 Twomey, "Peering into the Black Box of Executive Power: Cabinet Manuals, Secrecy and the Identification of Convention", in Varuhas and Stark (eds), The Frontiers of Public Law (2019) 399 at 410. 299 Hocking v Director-General of National Archives of Australia (2018) 255 FCR 1 at Edelman Ministers could not be said to have reached a conclusion by critical reflection. The Director-General said this300: "The papers of Lord Bruce, for example, are called personal papers. They are copies of every cable sent by Bruce and received by Bruce while he was in office in London, every record of conversation he had with every ambassador and with every British official, and of records, of which he should never have made, of debates which took place in the British War Cabinet. There is nothing whatsoever private or personal about them. They are copies of official records and in the [Archives Bill] sense they are copies of Commonwealth records ... Many other Ministers have followed this practice and they have kept in their offices complete sets of copies of correspondence crossing their desk". In the report of the Committee the view of the Australian Archives was recorded that "in many of the collections of personal papers of former ministers and officials there were records which might be the property of the Commonwealth"301. Thirdly, there is "no adequate reason" for the convention proposed by the respondent302. No coherent principle could justify a convention that title to the originals of final correspondence, created and received as part of official duties, should vest in a holder of high public office to the exclusion of the Commonwealth. The principle of loyalty which underlies public office, and which precludes public officers from benefiting personally from their office303, points to the opposite conclusion. Indeed, as the appellant observed, the effect of the convention suggested by the respondent is that the more controversial the correspondence the more wealth that would be created for the Governor-General. The respondent relied upon a letter, dated 1 February 2017 and written in an attempt to clarify the position prior to the trial in this matter, from the Official 300 Australia, Senate, Standing Committee on Education and the Arts (Reference: Archives Bill) 1978-79, Official Hansard Transcript of Evidence (1979) at 42-43. 301 Australia, Senate Standing Committee on Education and the Arts, Report on the Archives Bill 1978 (1979) at 9 [3.9]. 302 Twomey, "Peering into the Black Box of Executive Power: Cabinet Manuals, Secrecy and the Identification of Convention", in Varuhas and Stark (eds), The Frontiers of Public Law (2019) 399 at 411. 303 For instance, see The Earl of Devonshire's Case (1607) 11 Co Rep 89a [77 ER 1266]; Hornsey Urban Council v Hennell [1902] 2 KB 73 at 80; Attorney-General for Hong Kong v Reid [1994] 1 AC 324 at 330. See also Re Day [No 2] (2017) 263 CLR 201 at 250-251 [174]-[179], 272-273 [270]-[271]. Edelman Secretary to the Governor-General to the Private Secretary to the Queen. In that letter, the Official Secretary said that his understanding was that "it is a matter of long-standing convention that non-official correspondence between the Monarch and Her Governors-General across the 15 Realms outside the United Kingdom are private and confidential communications, not forming part of any official government records". It was asserted that the reason for the convention was to enable the communication between the Queen and the Governor-General to be in confidence and thereby to permit and facilitate such communication. The reply from the Private Secretary to the Queen was no doubt written with considerable care and with the expressed permission for the letter to form part of the "official submissions to the Court". It did not acknowledge that the communications were "non-official" or that they did not form part of any official government records. The convention to which the Private Secretary referred was "a convention of confidentiality ... necessary to protect the privacy and dignity of the Sovereign and her Governors-General, and to preserve the constitutional position of the Monarch and the Monarchy". The confidentiality of the correspondence to which the Private Secretary referred is entirely consistent with the marking of the correspondence between the Queen and the Governor-General as "personal and confidential". That labelling convention was explained in documentary exhibits from trial concerning correspondence from State Governors to the Queen through the relevant Secretary of State on general affairs in the State. The labelling convention was explained as requiring the use of "confidential" to describe correspondence which, although part of official despatches on general affairs in the State, contained the views of the Governor and not of their Ministers and the use of "personal and confidential" to describe correspondence that was confidential and also contained personal observations of a general nature. Confidentiality is not a reason that could justify a convention that correspondence passing between the Governor-General and the Queen is never created or received by the Governor-General officially nor retained as part of the institution of the official establishment of the Governor-General. Whether or not the correspondence is created or received officially, and whether or not it is retained institutionally, the confidentiality of such correspondence is protected by the general law of confidence304. It is also protected by the categories of exemption to which Senator Hamer referred during the hearings concerning the Archives Bill before the Senate Standing Committee, including as "information or matter the disclosure of which under [the Archives Act] could reasonably be expected to cause 304 Earl of Lytton v Devey (1884) 54 LJ Ch 293 at 295, citing Pope v Curl (1741) 2 Atk 342 at 342 [26 ER 608 at 608]. Edelman damage to the ... international relations of the Commonwealth"305 or as "information or matter the disclosure of which under [the Archives Act] would constitute a breach of confidence"306. That protection, however, is neither absolute nor perpetual. The labelling convention of "personal and confidential" is also not inconsistent with a characterisation of the correspondence as official or with its retention institutionally. Indeed, the trial exhibits in this matter include correspondence, disclosed under the open access provisions of the Archives Act, between Sir Paul Hasluck, the Governor-General prior to Sir John Kerr, and the Private Secretary to the Queen concerning quintessentially institutional matters such as the employment relationships in the official establishment of the Governor- General. That correspondence was marked "Personal and Confidential". And even if it was once confidential it is no longer so: "a person who sends a communication to a public officer, relative to the public business, cannot make his communication private and confidential simply by labeling it as such. The law determines its character, not the will of the sender."307 Extreme consequences The respondent submitted that a legal rule to govern the application of the meaning of "property" was needed because the consequence of permitting title to the original correspondence to be held by the Commonwealth would be that the correspondence "could be inspected within government and/or publicly released at any time of the Government's choosing". The implicit suggestion that information about which the Queen has rights to confidence might be publicly released by the executive in breach of duties of confidence upon which the Queen imparted the information, or that the executive would assert the property right of the Commonwealth as a body politic to discover the content of the correspondence at any time of the executive's choosing, is the type of extreme consequence that is of little assistance in the interpretation of legislative provisions308. 305 Archives Act, s 33(1)(a). See Australia, Senate, Standing Committee on Constitutional and Legal Affairs (Reference: Freedom of Information), Transcript of Evidence, 13 December 1978 at 714-715. 306 Archives Act, s 33(1)(d). 307 Egan v Board of Water Supply of New York (1912) 98 NE 467 at 470. 308 See Love v The Commonwealth (2020) 94 ALJR 198 at 289 [455] and the authorities cited there; 375 ALR 597 at 711-712. Edelman In any event, it could hardly be supposed that confidences would be more likely to be protected if title to the correspondence were held privately, to the exclusion of the Commonwealth, so that the Governor-General personally could sell, publish or distribute the correspondence at any time. The respondent correctly observed that "no responsible Governor-General would ever do such a thing". But the reason this would not occur in Australia is the duty of loyalty that exists for original records kept of correspondence sent or received. This duty contrasts with the position in the United States, where Presidents do not regard themselves as "trustees for the American people" so that, absent voluntary arrangements for a Presidential Library, the institutional correspondence of a President can be sold "for a fancy sum" or can be the subject of arrangements, such as in the case of President Monroe, for publication with the profits to be divided among his daughters and son-in-law309. Conclusion Orders should be made as follows: Appeal allowed. Set aside the orders of the Full Court of the Federal Court of Australia made on 8 February 2019 and, in their place, order that: the appeal to the Full Court be allowed; the orders of Griffiths J made on 16 March 2018 be set aside and, in their place, it be: declared that the contents of Record AA1984/609 ("the constitute Commonwealth records within the meaning of the Archives Act 1983 (Cth); correspondence") deposited ordered that a writ of mandamus issue to compel the Director-General of the National Archives of Australia to reconsider Professor Hocking's request for access to the deposited correspondence; and (iii) ordered that the Director-General of the National Archives of Australia pay Professor Hocking's costs at first instance; and 309 Nixon v United States (1992) 978 F 2d 1269 at 1278. Edelman the Director-General of the National Archives of Australia pay Professor Hocking's costs of the appeal to the Full Court. The Director-General of the National Archives pay Professor Hocking's costs of this appeal. |
HIGH COURT OF AUSTRALIA RE: THE MARITIME UNION OF AUSTRALIA & ORS EX PARTE CSL PACIFIC SHIPPING INC RESPONDENTS APPLICANT/PROSECUTOR Re The Maritime Union of Australia & Ors; Ex parte CSL Pacific Shipping Inc [2003] HCA 43 7 August 2003 ORDER 1. Order nisi granted on 18 November 2002, as amended on 6 May 2003, discharged. 2. Prosecutor to pay the respondentsβ costs. Representation: C N Jessup QC with G J Hatcher SC and C S Ward for the applicant/prosecutor (instructed by Blake Dawson Waldron) No appearance for the first respondents D F Jackson QC with A S Bell for the second respondents (instructed by W G McNally & Co) Intervener: D M J Bennett QC, Solicitor-General of the Commonwealth of Australia with R F Crow intervening on behalf of the Attorney-General of the Commonwealth of Australia (instructed by Australian Government Solicitor) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Re The Maritime Union of Australia & Ors; Ex parte CSL Pacific Shipping Inc Constitutional Law (Cth) β Powers of the Parliament β Trade and commerce with other countries and among the States β Industrial relations β Application for variation of an award β Whether s 5(3), Workplace Relations Act 1996 (Cth) ("WRA") validly extends to employers not present in Australia β Whether s 5(3), WRA validly extends to foreign non-resident seafarers engaged outside Australia. Industrial Law (Cth) β Application for variation of an award β Whether Australian Industrial Relations Commission had jurisdiction pursuant to s 5(3), WRA β Whether Pt VI, Navigation Act 1912 (Cth) impliedly repealed s 5(3), WRA β Whether s 5(3), WRA validly extends to employers not present in Australia β Whether s 5(3), WRA validly extends to foreign non-resident seafarers engaged outside Australia β Whether construction of s 5(3) to be limited through reference to rules of customary international law regarding "innocent passage" and "internal economy" of ships β Whether prosecutor validly served pursuant to Australian Industrial Relations Commission Rules 1998. Constitution (Cth), s 51(i). Acts Interpretation Act 1901 (Cth), s 21(1)(b). Navigation Act 1912 (Cth), Pt VI. Workplace Relations Act 1996 (Cth), ss 5, 111(1)(g), 113. GLEESON CJ, McHUGH, GUMMOW, KIRBY, HAYNE, CALLINAN AND HEYDON JJ. On 22 January 2002, an application was lodged with the Australian Industrial Relations Commission ("the AIRC") on behalf of the Maritime Union of Australia, the Australian Institute of Marine and Power Engineers and the Australian Maritime Officers' Union. These bodies, together, comprise the second respondent in this Court. The application to the AIRC was made under s 113 of the Workplace Relations Act 1996 (Cth) ("the WRA"). This empowers the AIRC to vary an award. The application (which was amended on 28 February 2002) sought a variation to the Maritime Industry Seagoing Award 1999 ("the Award"). The variation would relevantly add to Sched 1 of the Award "CSL Pacific Shipping Inc, and any other person or corporation who from time to time is the employer of the crew engaged upon the ship CSL Pacific". In this Court, relief is sought under s 75(v) of the Constitution against what is said to be the erroneous assumption of jurisdiction by the AIRC. The parties The prosecutor, CSL Pacific Shipping Inc ("CSL Pacific"), is incorporated in Barbados. Together with an Australian corporation, CSL Australia Pty Ltd ("CSL Australia"), CSL Pacific is a member of a group of companies ultimately owned in whole or in part by a Canadian corporation, The CSL Group Inc ("CSL Canada"). As a result of changes brought about by the ANL (Conversion into Public Company) Act 1988 (Cth), ANL Ltd ("ANL") became a company registered under the Companies Act 1981 (Cth) as a public company limited by shares1. In May 1999, CSL Australia acquired a portion of the business of ANL involving the operation of two ships, the CSL Pacific (then known as the River Torrens) and the CSL Yarra (then known as the River Yarra). These ships worked on the Australian coast. It appears that, at the time of their sale to CSL Australia, both ships were registered under the Shipping Registration Act 1981 (Cth) and were licensed to operate in the Australian coasting trade pursuant to the requirements of Pt VI (ss 284-293A) of the Navigation Act 1912 (Cth) ("the Navigation Act"). The rates of pay and conditions of employment of the crews of the ships were regulated by the Maritime Industry Seagoing Interim Award 1998 ("the Interim Award"). That state of affairs continued after the transfer of the ships to CSL 1 Smith v ANL Ltd (2000) 204 CLR 493 at 506 [25]. Australia, save that the rates of pay and conditions of employment of the Australian crew were, from 27 August 1999, regulated by the Award in place of the Interim Award. On or about 14 July 2000, CSL Pacific acquired the River Torrens from CSL Australia. The vessel was renamed the CSL Pacific and was registered at Nassau in the Bahamas. At the time of the acquisition of the ship by CSL Pacific, the vessel was lying in Shanghai and had no crew. CSL Pacific arranged for the recruitment of a crew in the Ukraine. All crew members are Ukrainian citizens and they each signed ship's articles at Odessa in that country. The CSL Pacific then commenced trading in North Asia. It did not work on the Australian coast until October 2001. In that month, the vessel was returned to the Australian coast and was time chartered by CSL Pacific to CSL Australia. The terms of the time charter, dated 1 October 2001, left CSL Pacific with responsibility for the navigation of the vessel and the crew and provided that it was not to be construed as a demise to CSL Australia. As a matter of internal practice within the corporate group, a time charter such as the one executed between CSL Pacific and CSL Australia may be terminated at the conclusion of any voyage at the direction of CSL Canada. The CSL Pacific has operated on the Australian coast under spot contracts, carrying dry bulk cargoes for a number of customers on a number of voyages between ports in South Australia, Victoria, New South Wales and Queensland. This has taken place pursuant to a combination of a continuing voyage permit and single voyage permits issued under s 286 of the Navigation Act. It will be necessary to refer further to that provision later in these reasons. The rates of pay and conditions of employment of the crew of the CSL Pacific are fixed by agreement made with the International Transport Federation and they differ from those provided for by the Award. It was in that setting that the application for variation was lodged with the AIRC on behalf of the second respondent. The Full Bench of the AIRC (comprising two Senior Deputy Presidents and a Commissioner) held2 that there was before it an "industrial issue" within the meaning of sub-s (3)(b) of s 5 of the WRA. The members of the Full Bench together are the first respondent in this Court. 2 Re Maritime Industry Seagoing Award 1999 (2002) 118 IR 294. The WRA Section 5 of the WRA is a provision of central importance in this dispute. It states (s 5(1)) that "[w]ithout prejudice to its effect apart from this section", the WRA "also has effect as provided by" s 5. That effect is specified in s 5(2) as follows: "This Act has effect as if: each reference in this Act to preventing or settling industrial disputes, by conciliation or arbitration, included a reference to settling by conciliation, or hearing and determining, industrial issues; and each reference in this Act to an industrial dispute included a reference to an industrial issue." Much then turns upon the use of the term "industrial issue" in place of "industrial dispute". Reference has been made to the power of variation of awards conferred on the AIRC by s 113 of the WRA. Section 113(4) states: "This Act applies in relation to applications, and proceedings in relation to applications, for the setting aside or variation of awards in the same manner, as far as possible, as it applies in relation to industrial disputes and proceedings in relation to industrial disputes, and for that purpose such an application shall be treated as if it were the notification of an industrial dispute." That provision in turn must be read, in the present case, with the reference in par (b) of s 5(2) to industrial issues. Section 5(3) details the content of the expression "industrial issue". It deals first with the relationship between waterside employers and waterside workers (par (a)), employers and maritime employees (par (b)), flight crew officers and employers (par (c)), and public sector employment (par (d)). Paragraphs (b) and (c) should be set out in full: "For the purposes of this section, the following are industrial issues: (b) matters pertaining to the relationship between employers and maritime employees, so far as those matters relate to trade or commerce: between Australia and a place outside Australia; between the States; or (iii) within a Territory, between a State and a Territory, or between 2 Territories; (c) matters pertaining to: (iii) the relationship between flight crew officers and flight crew officers' employers, so far as those matters relate to trade or commerce: between Australia and a place outside Australia; between the States; or (C) within a Territory, between a State and a Territory, or between 2 Territories". It is par (b) which is immediately relevant. The term "maritime employees" is, by s 4 of the WRA, given the meaning under cl 1 of Sched 1, namely "a person who is, or whose occupation is that of, a master as defined in section 6 of the [Navigation Act], a seaman as so defined or a pilot as so defined". The term "seaman" is defined in s 6 of the Navigation Act as meaning: "a person employed or engaged in any capacity on board a ship on the business of the ship, other than: the master of the ship; a pilot; or a person temporarily employed on the ship in port". The assumption of jurisdiction On 27 September 2002, the Full Bench of the AIRC made the following finding as to its jurisdiction3: "We find that an industrial issue exists in this matter. The parties to the industrial issue are [the second respondent] and [CSL Pacific]. The subject matter of the industrial issue is whether terms and conditions of employment corresponding with some or all of the terms and conditions of employment applicable to maritime employees whose employment is covered by the [Award] should be accorded to maritime employees engaged on the ship CSL Pacific in respect of any class of, or all voyages to or from a port in Australia. We are satisfied that the industrial issue as found is a matter pertaining to the relationship between employers and maritime employees. The subject matter at issue reflects a claim by [the second respondent] for terms and conditions of employment to be accorded to a class of maritime employees who are not members of [the second respondent]. The subject matter at issue pertains to the relationship of the employer and the employees who are members of the organisations party to the issue. This is so because the employer's non-observance of standard minimum conditions of employment for maritime employees engaged in maritime trade and commerce within or about Australian territory causes such employees to be engaged on terms and conditions less favourable to them and less onerous on the employer than would be the case if terms and conditions under the Award were applicable." "In the practical sense, the matter at issue that pertains to the relationship between employers and maritime employees clearly relates to trade or commerce between the States. That is so because the issue is about the conditions of employment of maritime employees who on the evidence are (2002) 118 IR 294 at 320-321. (2002) 118 IR 294 at 321-322. engaged regularly in the carriage of goods by sea between Australian ports for and on behalf of Australian shippers." The AIRC concluded that it was within its jurisdiction to hear and determine the industrial issue as so identified and in particular to hear and determine the application to vary the Award for that purpose. Finally, the AIRC recorded its provisional determination that the parties show cause within 15 working days before a Commissioner as to why the Award should not be varied by adding CSL Pacific, as employer of the crew engaged upon the ship CSL Pacific, and by adding a provision to the effect that the Award "applies in or in connection with voyages and operations within Australian waters or while operating under a permit or licence granted under the [Navigation Act] or on a voyage to or from a port in Australia"5. The proceeding in this Court On 18 November 2002, a Justice of this Court, on the application of CSL Pacific, ordered that the first respondent and the second respondent show cause before the Full Court as to why certiorari should not issue directed to the first respondent to bring into the High Court to be quashed the decision made on 27 September 2002 that the AIRC assume jurisdiction, and why prohibition should not issue directed to the first respondent prohibiting any further proceeding upon the application for variation of the Award made by the second respondent. The essential ground of the orders nisi was that, upon the proper construction and application of s 5(3)(b) of the WRA to the materials before the AIRC, the application to vary the Award did not present an industrial issue. By leave of the Full Court, CSL Pacific added a further ground expressed as follows: "Section 51(i) of the Constitution does not authorise the making of a law which regulates or operates by reference to the relationship between an employer and its employees when β (2002) 118 IR 294 at 328. the employer has no presence in Australia and does not engage in trade or commerce of the kind referred to in section 51(i); and the employees are foreign seafarers, not resident in Australia, not engaged in Australia and not members of any relevant Australian industrial organisation; merely because the ship owned by that employer, and on which those employees work, is being used by another person to whom it has been wet chartered for the purposes of such trade or commerce, and to the extent that section 5(3)(b) of [the WRA] is such a law it is beyond legislative competence under the Constitution and invalid." The use of the phrase "to the extent" indicates reliance by the prosecutor upon the severance or "reading down" provision made by s 15A of the Acts Interpretation Act 1901 (Cth) ("the Interpretation Act"). The WRA contains in s 7A its own particular severance provision but it may be put to one side. The order nisi should be discharged. What follows are our reasons for that conclusion. The provenance of s 5(3)(b) of the WRA The legislative pedigree of s 5(3)(b) of the WRA commenced with the Navigation Act 1952 (Cth). Section 37 thereof added Pt XA (ss 405A-405Q) to the Navigation Act. Section 405D(2) conferred upon what was then the Commonwealth Court of Conciliation and Arbitration the power to hear and determine "industrial matters" in so far as they related to "trade and commerce with other countries or among the States or in a Territory of the Commonwealth, whether or not an industrial dispute exists in relation to those matters". The phrase "industrial matters" was defined in s 405A as meaning "all matters in relation to the salaries, wages, rates of pay or other terms and conditions of service or employment of masters, pilots or seamen". After changes made in 19566, a provision in like terms to s 405D(2) appeared as s 72(b) of the Conciliation and Arbitration Act 1904 (Cth). The 6 By s 7 of the Navigation Act 1956 (Cth) and s 7 of the Conciliation and Arbitration Act 1956 (Cth). expression "industrial matter" was defined in s 71 in terms following those of s 405A. Sections 71 and 72(b) were the subject of the decision in R v Foster; Ex parte Eastern and Australian Steamship Co Ltd7. The Court there held that s 72(b) was valid and supported by s 51(i) of the Constitution. Further, it was held that what by then had become the Commonwealth Conciliation and Arbitration Commission was empowered to deal with an industrial matter concerning the working conditions of officers at sea or in port in circumstances where they served on ships registered in London and trading between South Australia and Japan, under articles opened and signed in Hong Kong but where it was the practice of the shipping company to engage the officers in Australia. Section 5 of the WRA is expressed in terms expanded from and made more precise than those of the previous provisions. The apparent looseness of the terms in which ss 71 and 72 had been expressed had occasioned difficulty, as identified by Dixon CJ in Foster8. The new s 5 first appeared in the Industrial Relations Act 1988 (Cth). The form taken by s 5, in particular the opening words of s 5(1), "[w]ithout prejudice to its effect apart from this section, this Act also has effect as provided by this section", reflects the form then already taken by s 6 of the Trade Practices Act 1974 (Cth). Of s 6, Mason J observed in R v Australian Industrial Court; Ex parte CLM Holdings Pty Ltd9: "I now turn to s 6, which gives the Act an extended operation. To understand what the section seeks to achieve one must bear in mind that for the most part the operative sections of the Act which, according to their terms, regulate the conduct of corporations, are based upon the corporations power and the territories power. It will be recalled that in Strickland v Rocla Concrete Pipes Ltd10 the Court held that the corporations power could sustain provisions regulating restrictive trade practices engaged in by corporations within the meaning of s 51(xx). Section 6(1) recognizes that the Act will in the first instance have a direct (1959) 103 CLR 256. (1959) 103 CLR 256 at 276-277. (1977) 136 CLR 235 at 243-244. See also Seamen's Union of Australia v Utah Development Co (1978) 144 CLR 120 at 136-137, 151. 10 (1971) 124 CLR 468. operation according to its terms and at the same time provides that in addition to this operation the Act shall have a further operation in accordance with the provisions of s 6(2) and (3)." Part VI of the Navigation Act Further reference now should be made to the provisions of Pt VI of the Navigation Act. Part VI, except where otherwise expressed, applies "to all ships". Section 288(1) creates an offence by the master, owner and agent of a ship engaging in the coasting trade without a licence. Licences are for a period not exceeding three years (s 288(2)) and are issued subject to compliance on the part of the ship, its master, owner and agent "during such time as it is engaged in the coasting trade" with conditions including an obligation that seamen employed on the ship be paid wages in accordance with Pt VI of the Navigation Act. The term "coasting trade" is given a detailed definition in s 7. It is sufficient for present purposes to note the statement in s 7(1): "A ship shall be deemed to be engaged in the coasting trade, within the meaning of this Act, if it takes on board passengers or cargo at any port in a State, or a Territory, to be carried to, and landed or delivered at, any other port in the same State or Territory or in any other State or other such Territory". As has been noted earlier in these reasons, whilst the River Torrens was owned by CSL Australia, and before its acquisition by CSL Pacific and renaming as the CSL Pacific, the vessel was licensed to operate in the coasting trade pursuant to the requirements of Pt VI of the Navigation Act. The condition respecting wages stipulated under s 288 is further spelled out in s 289. Every seaman employed on a ship engaged "in any part of the coasting trade" is entitled, "for the period during which the ship is so engaged", to payment of wages "at the current rates ruling in Australia for seamen employed in that part of the coasting trade" (s 289(1)). Where the ship is engaged not only in the coasting trade but also trades to places beyond Australia, the wages to which a seaman is entitled under s 289(1) shall be paid before the departure of the ship from Australia, and the ship may be detained until the payment is made (s 289(2)). Section 291 denies the efficacy of any agreement whether made in or out of Australia to limit or prejudice the rights of any seaman under Pt VI. Further, s 292 gives the character of prima facie evidence of the rates of wages ruling in Australia, for the purposes of s 289(1), to an award within the meaning of the WRA which is binding on or applicable to seamen employed in the coasting trade. However, the nexus provided in Pt VI between award wages and engagement in the coasting trade was broken, with respect to the CSL Pacific, after its acquisition from CSL Australia. This was achieved by the operation of permits issued under s 286. A permit under that section may be for a single voyage or may be a continuing permit (s 286(3)). Permits of both species were issued in respect of the CSL Pacific. Where a permit has been issued, then the prohibition otherwise imposed by s 288 upon the engagement in the coasting trade without a licence is lifted. This is effected by s 286(2) which states: "The carriage, by the ship named in a permit issued under this section, of passengers or cargo to or from any port, or between any ports, specified in the permit shall not be deemed engaging in the coasting trade." The issue of licences is dealt with in s 286(1), which states: "Where it can be shown to the satisfaction of the Minister, in regard to the coasting trade with any port or between any ports in the Commonwealth or in the Territories: that no licensed ship is available for the service; or that the service as carried out by a licensed ship or ships is inadequate to the needs of such port or ports; and the Minister is satisfied that it is desirable in the public interest that unlicensed ships be allowed to engage in that trade, the Minister may grant permits to unlicensed ships to do so, either unconditionally or subject to such conditions as he or she thinks fit to impose." No conditions were attached to any of the permits which would have achieved a result that wages had to be paid at the same rates as would have been necessary had the CSL Pacific been licensed for the coasting trade. It is unnecessary to consider whether the power conferred by s 286(1) would have permitted the attachment of such conditions. The relationship between the WRA and the Navigation Act The prosecutor contends that the application to vary the Award made by the second respondent assumes a construction of the WRA which is "quite at odds" with the scheme expressed in Pt VI of the Navigation Act. What was said to follow from such a proposition was not entirely clear. Even allowing for an appropriate time sequence between the enactment of the provisions in the two statutes, it would require very strong grounds to support an implication that Pt VI impliedly repealed s 5(3) of the WRA11. Nor is it readily apparent that, notwithstanding its plain words, s 5(3) is to be given a limited construction by reason of the terms of Pt VI of the Navigation Act. Rather, as was indicated in Project Blue Sky Inc v Australian Broadcasting Authority12 with respect to provisions within the one statute, both s 5(3) of the WRA and Pt VI of the Navigation Act should be read together. If that is done, the apparent difficulties which the prosecutor identifies and places at the forefront of its submissions then disappear. Were this a case where the prosecutor held a licence for the CSL Pacific to engage in the coasting trade under Pt VI of the Navigation Act, the Award would have the significance attached by the evidentiary provision in s 292. Where there is no such licence, and reliance is placed upon the permit system provided in s 286 for unlicensed ships, s 292 has no operation. Nevertheless, an application may be made to the AIRC founded upon s 5(3) of the WRA. That is the present case. The case for the prosecutor It will be recalled that the AIRC identified the relevant industrial issue as concerning the conditions of employment of maritime employees engaged regularly in the carriage of goods at sea between Australian ports for, or on behalf of, Australian shippers. That was an invocation in particular of par (b)(ii) of s 5(3) of the WRA with reference to industrial issues being matters pertaining to the relationship between employers and maritime employees, so far as those matters relate to trade or commerce between the States. However, the provisional determination contemplates a variation in the Award which perhaps 11 Shergold v Tanner (2002) 209 CLR 126 at 136-137 [34]-[35]. 12 (1998) 194 CLR 355 at 381-382 [69]-[71]. goes further by the inclusion of the words not only "in or in connection with voyages and operations within Australian waters or while operating under a permit or licence granted under the [Navigation Act]" but also "on a voyage to or from a port in Australia"13. The latter expression may contemplate reliance upon that branch of par (b) of s 5(3) which fixes upon matters of the necessary character which relate to trade or commerce between Australia and a place outside Australia. The conclusions which follow in these reasons support the exercise of jurisdiction by the AIRC in both respects. In essence, the case for the prosecutor is that the advantage it gains by the absence from the permits under Pt VI of the Navigation Act of any conditions respecting payment of wages at Australian rates is preserved from displacement by a variation to the Award made by the AIRC under its statute. In particular, the prosecutor contends, with the support of the Attorney-General of the Commonwealth on his intervention, that the extended operation given to the WRA by s 5 does not, on the proper construction of that legislation, reach far enough to permit the Award variation sought by the second respondent. The prosecutor further submits that if, contrary to its primary submission, the legislation did have a sufficient reach to permit this result, then it would be beyond the power conferred upon the Parliament by s 51(i) of the Constitution and would be read down to save its validity. However, these submissions as to lack of power do not have the support of the intervener. The Attorney-General submits that the power exists but that it has not been exercised to its full extent. Validity Section 51(i) of the Constitution confers power upon the Parliament to make laws, subject to the Constitution, for the peace, order and good government of the Commonwealth with respect to "[t]rade and commerce with other countries, and among the States". Paragraph (b)(iii) of s 5(3) of the WRA speaks of matters relating to trade or commerce "within a Territory, between a State and a Territory, or between 2 Territories". It thus evinces a reliance by the legislature upon the territories power in s 122 of the Constitution. The submissions respecting validity made by the prosecutor would appear to apply to the territories power as well as to the 13 Re Maritime Industry Seagoing Award 1999 (2002) 118 IR 294 at 328. commerce power. It also is implicit in the prosecutor's submissions that there is no other head of power which could support the legislation. However, the variation of the Award is sought in terms which, as indicated above, would be sufficiently supported by s 5 in its foundation upon the trade and commerce power. In what follows, attention will be given, accordingly, to s 51(i) of the Constitution. It is well settled that the character of the law in question must be determined by reference to the rights, powers, liabilities, duties and privileges which it creates and that its practical as well as legal operation must be examined to determine whether there is a sufficient connection between the law and the head of power in s 51(i)14. If a connection exists between the law and the relevant head of power the law will be "'with respect to' that head of power" unless the connection is "'so insubstantial, tenuous or distant' that it cannot sensibly be described as a law 'with respect to' that head of power"15. It is also well settled that, in the exercise of the trade and commerce power, the Parliament can validly regulate the conduct of persons employed in those activities which form part of trade and commerce with other countries and among the States16. A ship journeying for reward is in commerce; those who co-operate in the journeying of the ship are in commerce and the wages of those persons and the conditions of their employment relate to that commerce17. It may be added that, with respect to the commerce clause in the United States Constitution, the Supreme Court settled the law to the same effect a 14 Grain Pool of Western Australia v The Commonwealth (2000) 202 CLR 479 at 492 [16]; cf at 515 [89]. 15 Re Dingjan; Ex parte Wagner (1995) 183 CLR 323 at 369. See Melbourne Corporation v The Commonwealth (1947) 74 CLR 31 at 79 per Dixon J. 16 Australian Steamships Limited v Malcolm (1914) 19 CLR 298 at 329-330; Seamen's Union of Australia v Utah Development Co (1978) 144 CLR 120 at 138, 17 cf the argument of Sir Garfield Barwick QC in R v Foster; Ex parte Eastern and Australian Steamship Co Ltd (1959) 103 CLR 256 at 264. century ago. The Supreme Court said in Patterson v Bark Eudora18 of a federal law protecting the payment of the wages of seamen19: "We are of the opinion that it is within the power of Congress to protect all sailors shipping in our ports on vessels engaged in foreign or interstate commerce, whether they belong to citizens of this country or of a foreign nation, and that our courts are bound to enforce those provisions in respect to foreign equally with domestic vessels." As is apparent from these authorities, the commerce power is attracted by the engagement of the employees in interstate and overseas trade. The Attorney- General correctly stressed in his submissions that it is not to the point that the party responsible for payment of the wages of those employees and owning the ship in question is not itself also plying that ship for commercial reward. However, the prosecutor contends that s 51(i) does not support a law in the terms of s 5(3) of the WRA where particular circumstances apply. The first of these circumstances is a variation of those just considered with reference to the Attorney-General's submission. It treats the "presence" in Australia of the employer providing the wages to the persons who are part of the complement of the ship as essential, and the want of that "presence" as decisive. The second of these circumstances is that the employees were not engaged in Australia, do not reside here and are not members of any Australian industrial organisation. Thirdly, the prosecutor also emphasises that s 5 of the WRA is concerned with the extension of the power reposed by that statute in the AIRC. In that regard, the prosecutor relies upon a statement by Windeyer J in Foster. His Honour said20: "Prima facie Commonwealth statutes ought not to be so construed as authorizing any subordinate law-making body to deal with matters which have no real and substantial connexion with Australia or to make any rules 18 190 US 169 (1903). See also Strathearn Steamship Co Ltd v Dillon 252 US 348 at 355-356 (1920); Benz v Compania Naviera Hidalgo 353 US 138 at 142 (1957); McCulloch v Sociedad Nacional 372 US 10 at 17 (1963). 19 190 US 169 at 179 (1903). 20 (1959) 103 CLR 256 at 311. except such as can be directly or indirectly enforced by the authority of Australian courts." There is no substance in the first and second matters relied upon by the prosecutor. They deny the settled authority that, where a connection exists between the law in question and the head of power which is not insubstantial, tenuous or distant, that connection is not displaced by the lack of some further or additional connection21. The same is true of the reliance upon the phrase "real and substantial connexion" as it appears in the passage in the judgment of Windeyer J in Foster. However it may have appeared soon after the changes made in 1956 to the industrial relations legislation, there is now no specific requirement of a particular added degree of connection to a head of power where the law in question authorises the exercise of legislative authority by a non-judicial body such as the AIRC. It may be added that, in Foster, no other member of the Court used terms akin to those used by Windeyer J. The submissions with respect to invalidity and reading down of s 5(3) fail. There remains the submission by the prosecutor that, notwithstanding the reach of the terms in which it is expressed, s 5(3) should be given a construction placing the assumption of jurisdiction by the AIRC in this case beyond its reach. Construction The prosecutor submits that s 5(3) should be read with the unexpressed limitations that it not apply to industrial matters in which (a) the employer has no "presence" in Australia and (b) the employees are foreign non-residents who are not members of any relevant Australian industrial organisation. In this way, the prosecutor re-introduces as matters of construction the arguments upon validity. The prosecutor prayed in aid s 21(1)(b) of the Interpretation Act. That was said, if applied to s 5(3) of the WRA, to produce a construction which would be consistent with the reading advocated by the prosecutor. Section 21(1)(b) provides: "In any Act, unless the contrary intention appears: 21 Grain Pool of Western Australia v The Commonwealth (2000) 202 CLR 479 at 492-493 [16]-[17] and the authorities there cited; cf at 515 [89]. references to localities jurisdictions and other matters and things shall be construed as references to such localities jurisdictions and other matters and things in and of the Commonwealth." The point which the prosecutor seeks to make good may be examined by reference to the provision of the Jones Act22 construed by the Supreme Court of the United States in cases including Lauritzen v Larsen23 and Hellenic Lines v Rhoditis24. That statute conferred rights upon "[a]ny seaman who shall suffer personal injury in the course of his employment". In Lauritzen, Jackson J, delivering the opinion of the Court, said of this provision25: "It makes no explicit requirement that either the seaman, the employment or the injury have the slightest connection with the United States. Unless some relationship of one or more of these to our national interest is implied, Congress has extended our law and opened our courts to all alien seafaring men injured anywhere in the world in service of watercraft of every foreign nation β a hand on a Chinese junk, never outside Chinese waters, would not be beyond its literal wording." The Supreme Court decisions upon the Jones Act are concerned with the reading of territorial limitations into the statute, with contrasting outcomes upon differing facts. To such legislation, if enacted in Australia, s 21(1)(b) of the Interpretation Act would have a readily apparent application. But the terms of s 5(3) of the WRA are not at large. Rather, they identify, in par (b) thereof, trade and commerce between the States, between Australia and a place outside Australia, and within and between Territories and between a State and a Territory. Section 21(1)(b) has no relevant operation upon s 5(3) of the WRA. 22 46 USC Β§688. 25 345 US 571 at 576-577 (1953). Two other principal grounds are relied upon by the prosecutor in construing s 5(3). The first is the need to avoid a construction of s 5(3) which places it "at odds" with Pt VI of the Navigation Act. There is, as explained above, no force in that ground. The second may be identified by reference to the authorities cited by Taylor J in Meyer Heine Pty Ltd v China Navigation Co Ltd26 for the proposition that the Parliament, in enacting the WRA, is not readily to be taken as intending to deal with persons or matters over which, according to the comity of nations, jurisdiction belongs to some other sovereign or State. The sovereign authority involved here, the prosecutor submits, is that of the Bahamas, the law of the flag of the CSL Pacific. In particular, the prosecutor emphasises the need to displace only by clear and express terms what are said to be the rules of customary international law preserving to the law of the flag the regulation of the "internal economy" of ships, and protecting the right of "innocent passage". "Innocent passage" It is convenient to commence with consideration of the right of "innocent passage". In that regard, the prosecutor referred in particular to Arts 17, 18 and 19 of the United Nations Convention on the Law of the Sea ("the LOS Convention"). This was adopted on 10 December 1982 by the Third United Nations Conference on the Law of the Sea but it entered into force generally and for Australia only on 16 November 199427. That was well after the enactment of s 5(3) of the WRA. There is room for dispute as to when the right of "innocent passage" came to be regarded as forming part of customary international law and as to the content of the doctrine28. Article 18 of the LOS Convention defines "passage" in this regard as meaning: "navigation through the territorial sea for the purpose of: 26 (1966) 115 CLR 10 at 31. 27 Australian Treaty Series, (1994), No 31. 28 The Commonwealth v Yarmirr (2001) 208 CLR 1 at 55 [58]. traversing that sea without entering internal waters or calling at a roadstead or port facility outside internal waters; or proceeding to or from internal waters or a call at such roadstead or port facility". Of par (b), Professor O'Connell observed29: "The inclusion of passage to and from ports in internal waters is intended to reflect the supposition that there are rules of international law reflecting freedom of access to ports, and that the coastal State would not be free to deny ships transit rights for the purpose of access." Of the LOS Convention, it has been said30 that it: "involved a delicate compromise on the issues that carefully balanced the rights of coastal states with the maritime powers. The emerging view is that the provisions of the LOS Convention relating to navigation are either customary international law, the best evidence of international practice, or, at the very least, the foundation upon which customary international law will develop." The result is that the provisions of Art 18 provide a somewhat uncertain basis on which to identify in any specific sense the comity of nations referred to in Meyer Heine. However, there is no interference by or pursuant to s 5(3) of the WRA with the navigation of the CSL Pacific through the territorial sea for the purpose of proceeding to or from Australian waters and calling at Australian ports. Internal economy The prosecutor referred to the well-known passage in the 1887 decision of the Supreme Court of the United States in Wildenhus's Case31. That Court, after 29 The International Law of the Sea, vol 1, (1982) at 269. 30 Schoenbaum, Admiralty and Maritime Law, 3rd ed (2001), vol 1, Β§2-22. referring to the general proposition that, when a merchant vessel of one country enters the ports of another for the purposes of trade, it subjects itself to the law of the place to which it goes32, continued33: "From experience, however, it was found long ago that it would be beneficial to commerce if the local government would abstain from interfering with the internal discipline of the ship, and the general regulation of the rights and duties of the officers and crew towards the vessel or among themselves. And so by comity it came to be generally understood among civilized nations that all matters of discipline and all things done on board which affected only the vessel or those belonging to her, and did not involve the peace or dignity of the country, or the tranquillity of the port, should be left by the local government to be dealt with by the authorities of the nation to which the vessel belonged as the laws of that nation or the interests of its commerce should require." However, that statement falls short of a rigid formulation of a normative requirement of customary international law. English writers recently put the position as follows34: "By entering foreign ports and other internal waters, ships put themselves within the territorial jurisdiction of the coastal State. Accordingly, that State is entitled to enforce its laws against the ship and those on board, subject to the normal rules concerning sovereign and diplomatic immunities, which arise chiefly in the case of warships. But since ships are more or less self-contained units, having not only a comprehensive body of laws β that of the flag State β applicable to them while in foreign ports, but also a system for the enforcement of those flag State laws through the powers of the captain and the authority of the local consul, coastal States commonly enforce their laws only in cases where their interests are engaged. Matters relating solely to the 'internal economy' of the ship tend in practice to be left to the authorities of the flag State." 32 120 US 1 at 11 (1887). 33 120 US 1 at 12 (1887). 34 Churchill and Lowe, The law of the sea, 3rd ed (1999) at 65-66 (footnote omitted). In the Reporters' Notes to Β§512 of the Restatement of the Law of the Foreign Relations Law of the United States35, it is said: "A coastal state can condition the entry of foreign ships into its ports on compliance with specified laws and regulations. The jurisdiction to prescribe may extend even to some matters relating to the internal affairs of the ship." There then is a citation of Patterson v Bark Eudora36. The question thus becomes whether the interests of the coastal State are engaged such as to attract the operation of its legislation upon a particular subject to the visiting ship. An example of legislation of that nature is provided by Pt VI of the Navigation Act. That, as has been indicated, applies to all ships (s 284) and requires licensing to engage in the coasting trade. Moreover, the licensing system carries requirements, discussed earlier in these reasons, respecting the payment of wages. The licensing requirements of Pt VI do not apply to the CSL Pacific by reason of the operation of the permit system. However, the terms of s 5(3) of the WRA, in particular par (b), found the exercise of jurisdiction by the AIRC in matters engaging the interstate and territories and overseas commerce power. Whether, and the extent to which, an award or variation of an award is to affect the "internal economy" of ships such as the CSL Pacific is a matter entrusted for consideration by the AIRC. In that regard, s 111(1)(g) of the WRA is important. This applies to the present application before the AIRC for variation by dint of s 113(4). The text of that latter provision is set out earlier in these reasons. Paragraph (g)(iii) empowers the AIRC to dismiss an application in whole or in part, or to refrain from further hearing or determining the industrial issue, if it appears to the AIRC that further proceedings would not be "desirable in the public interest". Considerations respecting the significance of the "internal economy" rule on the one hand and the economic interests of Australia on the other will be for consideration in due course by the AIRC. The "internal economy" rule does not 35 3d, vol 2, Ch 2, (1987). require, as a matter of construction, the reading of s 5(3) of the WRA in such a fashion as to preclude entry by the AIRC upon consideration of the subject. The suggested canons of construction upon which the prosecutor relies do not warrant any conclusion that the determination by the AIRC on 27 September 2002 was made in excess of jurisdiction. Service In John Pfeiffer Pty Ltd v Rogerson37, it was said in the joint judgment of five members of the Court: "Federal, State and Territory courts have jurisdiction in personal actions if the defendant is served with the court's originating process within the territorial bounds of the court's jurisdiction38. Those courts will also take jurisdiction in certain other circumstances prescribed by rules of court or by the Service and Execution of Process Act 1992 (Cth). In this 'long arm' jurisdiction a plaintiff must show some connection between the claim and the jurisdiction in which the claim is made." The prosecutor emphasises its situation outside Australia and relies upon the proposition in the first sentence set out above as specifying the effective foundation of the jurisdiction of the AIRC in the present matter. Before the Full Bench, the prosecutor appeared by its solicitor. However, the appearance was expressed to be "conditional" and not to be taken as an admission or concession by the prosecutor that the AIRC had jurisdiction to entertain and hear the application to vary the Award39. The evidence indicates that, earlier, on 28 March 2002, CSL Pacific had received at its office in Barbados a letter from the solicitors for the second respondent. This enclosed a copy of the application filed on 22 January 2002, as amended on 28 February 2002. 37 (2000) 203 CLR 503 at 517 [13]; see also at 548-549 [116]. 38 Laurie v Carroll (1958) 98 CLR 310; Gosper v Sawyer (1985) 160 CLR 548 at 39 (2002) 118 IR 294 at 296. The Full Bench of the AIRC said with respect to the objection as to service outside the jurisdiction taken by the prosecutor40: "Jurisdiction under the [WRA] is not dependent or conditioned upon formal or actual service of process. Rather, jurisdiction arises from an objectively established state of affairs between participants in employment and industrial relationships. That is not to deny that the exercise of jurisdiction may be precluded where procedural fairness is not accorded for reasons that include a failure to adequately notify or serve process." That statement of the position should be accepted as correct. The AIRC was not concerned with the exercise of judicial power where, as identified in Pfeiffer, the assertion of jurisdiction in personal actions depends upon the legal service of the initiating process. Rather, its powers are of a legislative rather than judicial nature, being concerned with the prescription of rules of conduct for the future in respect of the disputing parties. The only question that arises is whether the Australian Industrial Relations Commission Rules 1998 stipulate for service of documents only within Australia. Rule 72 specifies various methods of effecting service of documents. They include posting the documents by registered post to the secretary at the registered office of a body corporate (r 72(2)(d)(ii)). The term "registered office" is defined in r 72(3) as meaning, in relation to a body corporate, the principal office or place of business of the body corporate. In the present case, there was literal compliance with r 72. In any event, further provision is made by r 73. This provides that the AIRC may make an order for substituted or other service of notice by letter or other specified means "for the purpose of bringing the document to the notice of the person to be served". On 25 January 2002, a Commissioner ordered service upon CSL Pacific to be effected by sending sealed copies of the relevant documents, including the notification of hearing, by post to the office in Sydney of CSL Australia and there is no dispute that this was done. It is unnecessary to determine whether the service provided for in r 72 is limited to service within the Commonwealth. This 40 (2002) 118 IR 294 at 327. is because r 73 was availed of in this case. Its general terms are apt to encompass an order for service within the jurisdiction in substitution for service outside the jurisdiction by the party in question. The controlling consideration is that identified by the Full Bench, namely, whether in a particular case, there has been a denial of procedural fairness by a failure adequately to notify or serve process. A denial of procedural fairness may attract a remedy in this Court for excess of jurisdiction41. As has been indicated, no such issue arises in the present case. Conclusions The order nisi should be discharged. There should also be a costs order against the prosecutor42. 41 Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82. 42 Re McJannet; Ex parte Australian Workers' Union of Employees (Q) [No 2] (1997) 189 CLR 654 at 657. |
HIGH COURT OF AUSTRALIA APPLICANT AND THE QUEEN RESPONDENT Heron v The Queen [2003] HCA 17 8 April 2003 ORDER Application for special leave to appeal dismissed. On appeal from the Supreme Court of New South Wales Representation: T A Game SC with D Jordan for the applicant (instructed by Legal Aid Commission of New South Wales) R D Ellis with G E Smith for the respondent (instructed by S E O'Connor, Solicitor for Public Prosecutions (New South Wales)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Heron v The Queen Criminal law β Application for special leave to appeal β Applicant to argue point not raised at trial or in intermediate appellate court β Whether circumstances of the case are exceptional. Criminal law β Murder trial β Defences β Provocation β Misdirection of trial judge β No objection to direction β No request for further directions β Significance of misdirection in circumstances of the case. GLEESON CJ. It is now settled that this Court has jurisdiction to entertain a criminal appeal on a ground not taken at the trial or in an intermediate court of appeal. In Crampton v The Queen1, Hayne J and I, adopting the language of Gibbs CJ in Giannarelli v The Queen2, qualified that by saying that special leave to appeal on such a ground would only be granted in exceptional circumstances. In our separate reasons, we explained the considerations which give rise to that qualification3. Kirby J referred to "repeated statements in this Court [which] acknowledge that to permit a new ground to be added in this Court requires exceptional circumstances to be shown"4. Gaudron, Gummow and Callinan JJ said that the Court may perhaps only choose to grant special leave in such a case rarely, but the power should be exercised to cure a substantial and grave injustice5. Whatever the difference, if any, between circumstances that are rare and circumstances that are exceptional, it is not one upon which the outcome of the present application turns. In both Giannarelli and Crampton, the point taken for the first time in this Court was a point of law that constituted an unanswerable defence to the charge of which the applicant had been convicted. The present case is very different. The facts are set out in the reasons for judgment of Callinan J. The applicant was tried for murder following the death of a man who was stabbed in the course of a bar-room brawl. The trial judge, out of an abundance of caution, directed the jury on provocation. On the evidence, any case of provocation was extremely tenuous. The applicant did not claim to have lost self-control; the description by eye-witnesses of his behaviour indicated brutal thuggery, but not loss of self-control; and, in the context and circumstances in which it was uttered, the alleged insult proffered by the victim could hardly have been thought to satisfy the objective part of the test for provocation stated in Masciantonio v The Queen6. In his directions, the trial judge did not, as submitted by counsel, reverse the onus of proof. However, he mis-stated the objective part of the test for (2000) 206 CLR 161. (1983) 154 CLR 212 at 221. (2000) 206 CLR 161 at 172-173 [14]-[20] and at 216-219 [156]-[163]. (2000) 206 CLR 161 at 206-207 [122]. (2000) 206 CLR 161 at 185 [57]. (1995) 183 CLR 58 at 66-67. provocation by referring to what an ordinary person "must" or "would" have done, rather than what such a person "could" have done. Trial counsel made no complaint about the mis-direction. This, in combination with the failure to make such a complaint in the Court of Criminal Appeal, brings into play the principle enunciated in Crampton, including the qualification to that principle. That qualification is necessarily imprecise, but it is to be taken seriously. It was not a rhetorical flourish. Furthermore, in the circumstances of the present case, the failure of trial counsel to take the point now relied upon reinforces the strong impression created by a reading of the record, which is that the issue of provocation was of little, if any, practical significance. It is understandable that the trial judge felt it prudent to give directions on provocation. It is also understandable that trial counsel either did not notice the error, or did not think it necessary to raise the matter for correction. In the context of the case, the error was not important. It was certainly not, like the errors in Giannarelli and Crampton, decisive of the outcome. The circumstances are not exceptional. No grave and substantial injustice has been shown. Special leave to appeal should be refused. McHugh McHUGH J. The applicant was tried for murder before a judge and jury in the Supreme Court of New South Wales. The jury convicted him of murder although the trial judge left to the jury an alternative verdict of manslaughter based on the alleged provocation of the applicant by the deceased. The trial lasted 23 days. The Court of Criminal Appeal dismissed the applicant's appeal against the conviction. He now seeks special leave to appeal against the order of the Court of Criminal Appeal on the ground that the trial judge misdirected the jury on provocation. The question in this application is whether the applicant should be granted special leave to raise this ground despite not raising any objection to the directions on provocation at his trial or in the Court of Criminal Appeal. In my opinion, the circumstances of the case are not so exceptional that the Court should entertain a special leave application in respect of a point that was not raised at the trial or in the intermediate court of appeal. The principal issue at the trial was whether the applicant stabbed the deceased with a knife or whether the fatal wound was the accidental result of the deceased impaling himself on a shard from a broken glass. At no stage in his evidence did the applicant suggest that he lost self-control, evidence that would have been led if he had relied on provocation as a defence. Although the applicant's defence was that the deceased died by accident, the learned trial judge left the issue of provocation to the jury. His Honour took the view that there was evidence that could justify the jury holding that the provocative conduct of the deceased made the case one of manslaughter, not murder. The relevant evidence is set out in the judgment of Callinan J, who holds that the evidence was insufficient to raise the issue of provocation. Although the evidence of provocation was weak, I think that the trial judge was justified in leaving the issue to the jury. On the applicant's version of the incident, the deceased punched him while a friend of the applicant was restraining him and then the deceased kicked him. Although the applicant gave no evidence that he then lost self-control, I think on that evidence the trial judge was probably right to leave the issue of provocation to the jury. But I do not think that there is anything so exceptional or extraordinary about this case that it would be proper for this Court to grant special leave to appeal on the ground that the trial judge misdirected the jury on the issue of provocation. The applicant did not ask the trial judge for further directions on provocation to overcome the errors of which he now complains. Nor were the trial judge's directions on provocation the subject of argument in the Court of Criminal Appeal. Because that is so, this Court would grant special leave to appeal only if the circumstances of the case were exceptional7. 7 Crampton v The Queen (2000) 206 CLR 161. McHugh It is true that the trial judge misdirected the jury on the issue of provocation. He did so by directing the jury to consider what an ordinary person "must" or "would" have done, instead of directing the jury to consider what an ordinary person "could" have done. But this misdirection is only one factor to be considered. Provocation was an issue that was probably technically open on the evidence. But it was an issue remote from the way the applicant conducted his case at the trial. The applicant's case was that he did not have a knife with him that day and that he did not stab the deceased. But the evidence tending to prove that the applicant stabbed the deceased was overwhelming. The applicant's friend and two independent witnesses testified that the applicant had a knife in his hand while he was fighting. The applicant's friend testified that during the fight the applicant was holding the knife in his right hand "in an arc from left to right". He said that he saw the applicant stab the deceased "more than once". Another two witnesses also testified that the applicant stabbed the deceased. Two witnesses testified that, during the fight, someone called out "he's got a knife". Witnesses also said that the deceased called out, "he's killed me" or "he's stabbed me" or words to that effect. The person who drove the applicant to the hotel where the fight took place said that the applicant took a knife with him to the hotel. He claimed that the applicant had said "your friends, you can't rely on them, they can run but knife is always your friend and is in your hands, never run away, it's always with you." All the evidence, except that of the applicant, suggested that he was the aggressor. Most importantly, the evidence, including the evidence of the applicant's friend, contradicted the applicant's claim that the deceased had punched him while his friend held him. The friend said that, after being held, the applicant broke away and ran around the pool table to get to the deceased. Given the way that the applicant conducted his case and the evidence against him, I do not think there is a real chance that the trial judge's misdirection has resulted in any miscarriage of justice. In my opinion, a rational jury would be convinced beyond reasonable doubt that the deceased did not provoke the applicant. Because that is so, no miscarriage of justice has occurred. The case would not be one for the grant of special leave even if counsel for the applicant at the trial had asked the learned trial judge to withdraw the erroneous direction. The application for special leave to appeal must be dismissed. Kirby KIRBY J. The applicant, Michael Heron, seeks special leave to appeal from a judgment of the Court of Criminal Appeal of New South Wales8. By that judgment, that Court confirmed the applicant's conviction of murder that followed a trial in the Supreme Court of New South Wales before Sully J and a jury. The application was referred to a Full Court of this Court by the panel to which it was originally assigned. In accordance with directions then given, it was argued before us as on the return of an appeal. The facts are stated in the reasons of Callinan J9. As is there explained, the applicant argued his entitlement to a retrial on the basis that the trial judge gave the jury directions on the law of provocation that were erroneous in law. If the jury, properly instructed in the law, concluded that the prosecution had not negatived provocation in the circumstances of the case, they would have been bound to return a verdict of manslaughter10. By inference, this could have resulted in a reduction in the custodial sentence to be served by the applicant. As it was, the trial judge sentenced the applicant to penal servitude for a minimum of 14 years, with an additional term of four years11. In the present case the applicant did not raise the issue of provocation before the jury. Nor was any complaint made to the Court of Criminal Appeal concerning the trial judge's directions on that issue. Had any such complaint been made, it would have required the leave of that Court because of the way the trial had been conducted12. On the issues argued before it (none of which are now before this Court), the Court of Criminal Appeal confirmed the applicant's conviction. On the premises argued, it also dismissed his application for leave to appeal against his sentence. Four issues Four issues are presented for decision: Should this Court, having heard full argument, simply deal with the application by dismissing it peremptorily on the ground that no "special" 8 R v Heron [2000] NSWCCA 312. 9 Reasons of Callinan J at [67]-[72]. 10 Crimes Act 1900 (NSW), s 23. 11 R v Heron [2000] NSWCCA 312 at [1]. 12 Criminal Appeal Rules (NSW), r 4. Kirby or "exceptional" circumstances have been shown to permit the new point to be argued for the first time in this Court13? Should the trial judge have given the jury directions on provocation in the circumstances of the trial? (3) Having given the directions on provocation, were they wrong on "any question of law"14? If a relevant error of law in the directions to the jury is demonstrated, should the appeal nonetheless be dismissed on the ground that no substantial miscarriage of justice has actually occurred? Disposition as on an appeal There are certain attractions in dealing with this application as one would the determination of an ordinary hearing seeking special leave to appeal. To do so affirms the primacy of the trial and of the function of the Court of Criminal Appeal. It reinforces the role of this Court in correcting errors of those courts made in deciding the matters put before them. It highlights the importance of ensuring the availability of the consideration of questions of law and fact by the intermediate court, for the assistance of this Court. It respects the special experience of the judges of the Supreme Court, both at trial and in the Court of Criminal Appeal. It avoids any inclination to bypass the requirement of leave in that Court, to raise grounds not argued at trial. It conserves the time of this Court. It permits the appeal to be disposed of by short reasons addressed principally to the manner in which the applicant's case was conducted below, reflecting also an opinion that, largely because of that conduct, there has been no miscarriage of justice in the case that requires the intervention of this Court. Tempting although it is to adopt that approach, I do not believe that we should. The application having been referred to a Full Court, it was argued in full. The Court received the assistance of detailed written and oral submissions. There is no constitutional impediment to this Court's hearing and determining a new ground that was not raised at trial or in the intermediate court15. The new 13 Giannarelli v The Queen (1983) 154 CLR 212 at 221; Crampton v The Queen (2000) 206 CLR 161 at 172 [14], 185 [57], 207 [122], 216-217 [156]. 14 Criminal Appeal Act 1912 (NSW), s 6(1). 15 Gipp v The Queen (1998) 194 CLR 106 at 116 [23], 153-155 [134]-[138], 164 [170]-[171]; Crampton v The Queen (2000) 206 CLR 161 at 171 [10], 184 [52], Kirby ground is one of law. It invokes the application to the trial of an Act of the New South Wales Parliament. Miscarriage of justice can include departures in a trial from the accurate application of the law. The applicant has been convicted of the most serious crime in the criminal calendar. He has, in consequence, been subjected to punishment that, arguably, would be reduced if his point of law is good and a new trial were to result in a conviction of a lesser offence16. The formula permitting new grounds to be raised for the first time in "special" or "exceptional" circumstances is open-ended. It is wide enough to include directions to a jury amounting to legal error. And the correction of such error in the particular case serves to discourage its repetition in later cases. There is one point upon which I would insist. The mere fact that a case was "fought at trial"17 in a particular way is not, in my opinion, a sufficient response to a complaint of legal error and miscarriage of justice, whether at the stage of a special leave application or on the hearing of an appeal. Ordinarily, strategies at trial are decided by legal representatives with varying input from the accused. It must necessarily be so. The law will normally hold the accused to the choices so made18. However, occasionally, errors and oversights occur which, with hindsight, may cause injustice to the accused. This is why the "focus of appellate attention is not upon how the appellant or his representatives played the forensic game in the trial at which he was convicted"19. In Conway v The Queen20 I explained this point thus: "The 'miscarriage of justice' with which an appellate court is concerned in a criminal appeal is addressed to matters of substance and not just procedure. Courts of criminal appeal, and ultimately this Court, must be guardians against wrongful convictions of persons accused of crimes. Recent notorious cases of convictions, later shown by scientific and other evidence to have been mistaken21, demand rejection of an appellate principle which is complacent and formalistic. Courts of criminal appeal are not mere referees of a game that can only be played once in accordance with a single game plan. β¦ There will be cases where there is no procedural injustice (because of the way the trial was conducted) and 16 cf Charlie v The Queen (1999) 199 CLR 387 at 399-400 [29]. 17 Reasons of Hayne J at [59]. 18 R v Birks (1990) 19 NSWLR 677 at 683-684. 19 Conway v The Queen (2002) 76 ALJR 358 at 379 [102]; 186 ALR 328 at 356. 20 (2002) 76 ALJR 358 at 379-380 [104]; 186 ALR 328 at 357. 21 eg R v Button [2001] QCA 133 per Williams JA, White and Holmes JJ concurring. Kirby yet a substantive injustice is shown (because a real possibility exists that the prisoner is innocent of the crime in respect of which a conviction has been entered)." Once an application is referred into a Full Court and heard as on an appeal, it is my respectful opinion that it will be rare indeed, certainly in the case of a conviction for murder, that it should be disposed of without responding to the arguments of the parties22. The applicant, serving his long sentence, is at least entitled to know why the arguments advanced in full on his behalf by his counsel were rejected23. Especially is this so because, in my view, the applicant in this case has made good the submission that an error of law occurred in the instruction to his jury on the law that was to be applied by the jury. The need for instruction on provocation The law of provocation has been considered by this Court on a number of occasions in recent years24. One of the reasons for the cases has been the obscurity, and internal ambivalence, of statutory expressions of the competing considerations of an objective and subjective kind involved in the law of provocation25. The language of s 23 of the Crimes Act 1900 (NSW), in issue in this case, is a good illustration26. The section, as it has been amended and as it 22 cf Public Service Board of NSW v Osmond (1986) 159 CLR 656 at 666-667; Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue (Vic) (2001) 207 CLR 72 at 85-86 [31]-[33]. See also South-West Forest Defence Foundation Inc v Executive Director, Department of Conservation & Land Management (WA) (1998) 72 ALJR 837 at 840 [22]-[23]; 154 ALR 405 at 410. 23 cf North Range Shipping Ltd v Seatrans Shipping Corporation [2002] 1 WLR 2397; [2002] 4 All ER 390; English v Emery Reimbold & Strick Ltd [2002] 1 WLR 2409; [2002] 3 All ER 385; Lewis v Wilson & Horton Ltd [2000] 3 NZLR 546 at 565 [76] per Elias CJ. 24 Stingel v The Queen (1990) 171 CLR 312; Masciantonio v The Queen (1995) 183 CLR 58; Green v The Queen (1997) 191 CLR 334; cf McGhee v The Queen (1995) 183 CLR 82. 25 The Australian Model Criminal Code Officersβ Committee recommended abolition of the defence of provocation: Fatal Offences Against the Person, Discussion Paper (1998), at 83 extracted in Eburn and Hayes, Criminal Law and Procedure in New South Wales, (2002) at 69-73. The New South Wales Law Reform Commission recommended the abolition of the ordinary person test and the substitution of a general discretion to convict of manslaughter: Partial Defences to Murder: Provocation and Infanticide, Report No 83 (1997) at 51-53. 26 The section is set out in the reasons of Callinan J at [74]. Kirby stood at the relevant time, presents difficulties for a judge in explaining its requirements to a jury, in simple terms so that they may be applied to the facts of So far as those requirements are concerned, I remain of the opinion that I expressed in Green v The Queen28. However, I was in dissent in that case. I am content, therefore, as Callinan J does, to accept that the reasons of McHugh J in Green state the applicable law on the aspects of the law of provocation relevant for the resolution of this application29. The reason why, in the applicant's trial, his counsel did not raise the issue of provocation before the jury is easily explained. It reflects a dilemma that an accused will often face with provocation. The applicant's real defence at the trial was that he did not stab the deceased. To the extent that he relied upon provocation, and elaborated circumstances giving rise to arguments on that issue, the applicant would necessarily have to emphasise evidence tending to conflict with his primary defence. If the jury found that the applicant did not stab the deceased, but that he died from the accidental penetration of his vital organs by a shard of glass, the applicant would have been entitled to acquittal of murder. The most he could hope for on a favourable resolution of the issue of provocation was conviction of manslaughter with the possibility of a shorter custodial sentence than he has received. There were therefore tactical or forensic reasons to justify the omission of the applicant's counsel to press provocation before the jury. Nevertheless, seeking (as he was entitled) to have it both ways, counsel at the end of the evidence and in the absence of the jury, raised with the trial judge whether it was incumbent on his Honour to instruct the jury on the issue of provocation. This presented the judge with an acute dilemma. Was he to give the jury instruction upon an issue that neither the accused nor the prosecutor had 27 This point is made in Mankotia (2001) 120 A Crim R 492 at 495-496 per Smart AJ. See also R v Smith (Morgan) [2001] 1 AC 146 at 156 per Lord Slynn of Hadley, 172-174 per Lord Hoffmann. 28 (1997) 191 CLR 334. 29 As was pointed out by the Court of Criminal Appeal of New South Wales, no other Justice of this Court has adopted McHugh Jβs view, expressed in Masciantonio v The Queen (1995) 183 CLR 58 at 73 and repeated in Green v The Queen (1997) 191 CLR 334 at 368, that the "ordinary person standard" incorporates "the general characteristics of an ordinary person of the same age, race, culture and background as the accused on the self-control issue": Mankotia (2001) 120 A Crim R 492 at 494 per Heydon JA, 495 per Smart AJ; cf Eburn, "A New Model of Provocation in New South Wales", (2001) 25 Criminal Law Journal 206 at 211. Kirby raised? Or was he to omit the instruction, although (upon one view) the evidence required assistance to the jury on an issue which they were obliged by law to consider? This is not a new problem. In Bullard v The Queen30, Lord Tucker, giving the reasons of the Judicial Committee of the Privy Council said: "It has long been settled law that if on the evidence, whether of the prosecution or of the defence, there is any evidence of provocation fit to be left to a jury, and whether or not this issue has been specifically raised at the trial by counsel for the defence and whether or not the accused has said in terms that he was provoked, it is the duty of the judge, after a proper direction, to leave it open to the jury to return a verdict of manslaughter if they are not satisfied beyond reasonable doubt that the killing was unprovoked." The obligation of the trial judge, so stated, is supported by much authority, both in this country31 and overseas32. The question is therefore whether, in the particular case, there is evidence of provocation fit to be left to the jury. If there is, the trial judge's duty is clear. It is not controlled by the way the case was fought at trial. For much the same reasons as I expressed in Green, I am extremely doubtful that, viewing the applicant's case at its highest (as the jury were entitled to accept it) there was evidence to ground a conclusion of provocation in the sense specified in the applicable section. However, the majority view of this Court in Green was more sympathetic to the availability of provocation than I was. A review of the cases in this Court shows how minds can differ on the issue of whether there was evidence fit to go to a jury on provocation33. This was a point I made in Green directing attention to the dissenting opinions in Parker34, 30 [1957] AC 635 at 642. 31 Parker v The Queen (1964) 111 CLR 665 at 681-682; [1964] AC 1369 at 1392; Da Costa v The Queen (1968) 118 CLR 186 at 213; Van Den Hoek v The Queen (1986) 161 CLR 158 at 161-162, 169. See also Pemble v The Queen (1971) 124 CLR 107 at 117-118, 132-133. 32 Mancini v Director of Public Prosecutions [1942] AC 1 at 7; Kwaku Mensah v The King [1946] AC 83 at 91-92; Lee Chun-Chuen v The Queen [1963] AC 220 at 232- 33 cf Eburn, "A New Model of Provocation in New South Wales", (2001) 25 Criminal Law Journal 206 at 214. 34 (1963) 111 CLR 610 at 628-632 per Dixon CJ, 660 per Windeyer J. Kirby later endorsed by the Privy Council35; in Moffa v The Queen36 and in Masciantonio37. Similarly, a division of opinion arose in Green both in this Court38 and in the New South Wales Court of Criminal Appeal. Given some of the views expressed in Green I am not so certain that "looks or expressions"39 could not constitute provocative conduct, at least in particular circumstances. Nor am I sure that it could be said, as a general rule, that the law of provocation is unavailable to the circumstances of a bar room brawl of the kind in which the applicant and the deceased became embroiled in this case40. Once there is evidence that arguably raises the issue of provocation "in the legal sense", the actual interpretation of the facts is a matter for the jury41. That was the approach of the majority in Green. Thus, a jury might take the view that it was impossible, and artificial, to dissect the chain of events in which the applicant and the deceased became engaged. They might regard the earlier racial insult ("well fuck you, you black cunt") as still operating in the subconsciousness of the applicant, possibly rendered susceptible to its effects by earlier insults, frustration, alcohol intake and the alleged action of the deceased in "kneeing" him when he was on a couch. Within the approach adopted in Green, I could not, therefore, say that there was no evidence fit to place before the jury the issue of provocation. The trial judge had a further responsibility. He was concluding a trial that had lasted 23 days. It represented a public accusation of the gravest kind. Not only was the resolution important for the applicant and the community. At stake, 35 (1964) 111 CLR 665 at 680; [1964] AC 1369 at 1390. 36 (1977) 138 CLR 601 at 616-617 per Gibbs J. 37 (1995) 183 CLR 58 at 80 per McHugh J. 38 (1997) 191 CLR 334 at 387 per Gummow J (diss) and at 416 of my own reasons. 39 Reasons of Callinan J at [82]. 40 Reasons of Callinan J at [88]. In Green (1997) 191 CLR 334 at 375-376, Gummow J pointed out that the effect of the amendment to s 23 of the Crimes Act 1900 (NSW) was to broaden provocation in a way more generous to the accused than at common law as stated in Moffa (1977) 138 CLR 601 at 605. The contemporary "defence" of provocation had its origin in drunken brawls and dangerous duels and this feature of its history has been one of the repeated sources of criticism of the law on the subject: Australian Model Criminal Code Officersβ Committee, Fatal Offences Against the Person, Discussion Paper, (1998) at 73. 41 Masciantonio (1995) 183 CLR 58 at 70; Green (1997) 191 CLR 334 at 414. Kirby in the accurate conduct of the trial, was a very large public investment of actual and opportunity costs amounting to hundreds of thousands of dollars. In such circumstances, it was unsurprising, the question having been raised, that the trial judge should give the jury a direction on provocation in this case. In my view, he cannot be criticised for doing so. It was an entirely prudent and proper course in the circumstances. The directions contained legal errors In his reasons, Callinan J identifies the two errors of law of which the applicant complained before this Court. They were that, in instructing the jury on the meaning of provocation, the trial judge on a number of occasions used the word "would" or "must" for the statutory word "could"42. On one occasion, he also asked whether it was reasonable that an ordinary person "would have responded to an insult of that particular gravity by stabbing fatally the person who had insulted him?" By the terms of the statute the test in New South Wales is one of possibilities. Further, it is not limited to the formation of "an intent to kill"43. It extends to the infliction of grievous bodily harm. The distinction is not a trivial or irrelevant one. In Green, it was drawn to notice by Brennan CJ44. The correct statutory language was also used by the other members of this Court45. The second error complained of concerned the suggestion that the trial judge's directions to the jury effectively imposed upon the applicant the burden of establishing provocation whereas, in law, it is for the prosecution to disprove the operation of that "defence"46. I consider that there is no substance in this second complaint. Both in his oral charge to the jury and in the written directions that he gave them, the trial judge made it clear that the onus was upon the prosecution. Thus, in the written directions the judge told the jury: 42 See reasons of Callinan J at [75]-[78]. 43 s 23(2)(b). 44 (1997) 191 CLR 334 at 340. 45 Green (1997) 191 CLR 334 at 351 per Toohey J, 374 per McHugh J, 381 per Gummow J, 413 of my own reasons. See also Stingel (1990) 171 CLR 312 at 335. Note however that in Green (1997) 191 CLR 334 at 355, Toohey J quoted the Attorney-General introducing the Bill that inserted s 23 of the Act as using the word "would". 46 The main passages are set out in the reasons of Callinan J at [99]. Kirby "The question to be decided is: Has the Crown proved beyond reasonable doubt that such intentional killing of the victim by the accused was not the result of the provocation, in the requisite legal sense, of the accused by the victim?" At several points during the oral instruction, the judge explicitly said that it was for the Crown to prove beyond reasonable doubt that the "accused was not provoked by the victim". Read in the context of these clear directions on this point, the complaint about onus is unconvincing. Nevertheless, the applicant has, in my opinion, made good his complaint of misdirection, both in the oral and written instructions to the jury, involved in the repeated juxtaposition of the words "would" or "must" for the statutory word "could". Legal error and the conduct of the trial The establishment of legal error in the direction to the jury raises two threshold points before any application of the "proviso" arises47. The first is whether, given the conduct of the trial and the need for "special" or "exceptional" circumstances, this Court should entertain the point at all. For reasons that I have already given, I cannot agree that the failure of the applicant to rely on the issue of provocation at the trial is fatal to the consideration of the issue in an appeal following conviction or in an application to this Court for special leave to appeal. Long ago, Isaacs J pointed out that the introduction of appeals against criminal convictions by the Criminal Appeal Act 1907 (UK), copied throughout Australia, worked a legal revolution and one of a beneficial kind48. In the place of the technical procedures of the past governing criminal appeals was substituted a simple procedure of appeal. In the place of concern only with questions of law was substituted a large jurisdiction concerned with the prevention of miscarriages of justice. In such appeals, courts are not now confined to errors of law49. The very language of s 6(1) of the Criminal Appeal Act makes it clear that the common concern of all of the grounds mentioned is "miscarriage of justice"50. 47 The proviso to s 6(1) of the Criminal Appeal Act 1912 (NSW). 48 Hargan v The King (1919) 27 CLR 13 at 23. 49 De Gruchy v The Queen (2002) 76 ALJR 1078 at 1088 [65]; 190 ALR 441 at 456. 50 MFA v The Queen (2002) 77 ALJR 139 at 148 [50], 149-150 [59]; 193 ALR 184 at Kirby Once this changed feature of criminal appeals is appreciated, it becomes unacceptable to confine attention to the manner in which a trial was run. If an issue is properly raised before an appellate court β whether a court of criminal appeal or this Court β the proper subject of attention is ultimately the miscarriage issue51. Whilst the ways a trial and an appeal are run are relevant to that issue, they do not determine it. Secondly, an issue is presented as to whether, when an error of law in the directions given to the jury is shown, the error is "fundamental"52. If it is, as McHugh J pointed out in Green53: "β¦ the question as to whether a reasonable jury would have found the accused guilty does not arise. In such circumstances, the accused has not had a trial according to law and that itself constitutes a relevant miscarriage of justice." In Green provocation was one of the key issues at trial. McHugh J was of the view that the errors by the trial judge in his directions on provocation "led to the trial being fundamentally flawed"54. That conclusion was not shared by the other members of the majority55. In the opinion of Brennan CJ, the error fell short of "a departure from the essential requirements of the law that β¦ goes to the root of the proceedings"56. In my opinion, the most that could be said of the erroneous directions given to the jury in the present case is that they involved "a misdirection on a particular point of fact or law arising in the trial"57. It is therefore necessary to turn to the proviso. 51 Lord Steyn has described the belated quashing of wrongful conviction in several cases in England in the 1990s as causing "a seismic shock" for the English legal system. "Nowadays we have come to realise that the risk of convicting the innocent is ever present": Steyn, "Human Rights: The Legacy of Mrs Roosevelt" (2002) Public Law 473 at 474. 52 Wilde v The Queen (1988) 164 CLR 365 at 372-373; Glennon v The Queen (1994) 179 CLR 1 at 8. 53 (1997) 191 CLR 334 at 371. 54 (1997) 191 CLR 334 at 372. 55 (1997) 191 CLR 334 at 346 per Brennan CJ. See also at 358 per Toohey J. 56 Wilde (1988) 164 CLR 365 at 373. 57 Green (1997) 191 CLR 334 at 347 per Brennan CJ. Kirby The application of the proviso Arguments against: Certain features of this case lend support to the applicant's argument that it is not one suitable for the proviso. The erroneous directions to the jury were repeated. They were included not only in the oral charge but in the written directions given to the jury. The difference between "would" or "must" and "could" in the statute (being the main aspect of the error) is not inconsequential. The verbal differences address attention to possibilities of human reaction and, to that extent, renders provocation more available to an accused person than would be the case if the provision were expressed in terms of probabilities ("could"). One reason for assigning importance to legal directions given by a trial judge to a jury is the necessary assumption that juries comply with judicial instructions about the content of law58. Even if the error is not fundamental, it does constitute a departure from an accurate trial which is a form of miscarriage of justice in itself. There is no way of knowing exactly how the jury reasoned for they give no explanation for their verdicts. Even if a view were taken that the judge did not have to give instruction on the law of provocation, once he decided to do so it was his duty to give legally accurate instruction which, unfortunately, did not occur in this case. Arguments in support: As against these considerations, to which I give due weight, many others tell in favour of application of the proviso. First, courts must obviously give effect to the will of Parliament expressed in the language of the proviso. It applies to cases where there has been "an erroneous ruling on the admissibility of evidence or a misdirection on a particular point of fact or law arising in the trial"59. The statute then requires courts to address the question whether "a substantial miscarriage of justice has actually occurred". This formulation reflects the anxiety that existed in England, as in Australia, before the introduction of the Criminal Appeal Act. That anxiety related to whether the larger facility for appeals would become a means for permitting "substantially unmeritorious" points to displace the substantively accurate determination of contested trials reflected in the verdicts of juries60. 58 Zoneff v The Queen (2000) 200 CLR 234 at 260-261 [65]-[66]; cf MFA v The Queen (2002) 77 ALJR 139 at 154 [85]; 193 ALR 184 at 204 citing R v Kirkman (1987) 44 SASR 591 at 593; MacKenzie v The Queen (1996) 190 CLR 348 at 367. 59 Green (1997) 191 CLR 334 at 347. 60 Conway (2002) 76 ALJR 358 at 372 [69]; 186 ALR 328 at 346 with reference to O'Connor, "Criminal Appeals in Australia Before 1912" (1983) 7 Criminal Law (Footnote continues on next page) Kirby The language of s 6(1) of the Criminal Appeal Act makes it clear that, notwithstanding rulings and directions of law that are erroneous in point of law, the proviso is still applicable. It evokes an appellate judgment. It may be true that there is a tendency in recent times to apply the "proviso" less frequently, particularly where a misdirection on a key point of law is shown61. Nevertheless, the "proviso" remains an important provision of statutory law. In most trials, slips and mistakes of a relatively minor kind will occur, even in relation to the instruction of the jury on the law62. The application of the proviso, therefore, obliges the appellate court to examine the error in context and having regard to the evidence and substance of the trial. If that court concludes that there is no real possibility that the error has affected the outcome and occasioned a miscarriage of justice, the proviso applies. Notwithstanding the error, the conviction will not be disturbed. Secondly, it is important to consider the precise nature of the error of law identified and to view it in the context of the entirety of the judge's directions63. When that is done in the present case, it is clear that the judge raised for the jury's consideration the issue of provocation, although neither side in the trial had addressed argument on that point. He instructed the jury to consider the gravity of the particular provocative conduct and that they were "permitted to take into a fair and sensible account any demonstrated relevant characteristics personal to the accused [such as] the age, the worldly wisdom, any relevant personal history, ethnicity and its social and cultural implications to and for the accused, and his powers of reasoning and of judgment". This was arguably more favourable to the accused than the statute required. His Honour specifically directed the jury's attention to the insult of a racial kind of which the applicant had testified (although other witnesses denied it). He also directed the jury to the physical assault of which the applicant complained. Whilst there were legal errors in the way the issue was framed, those errors must be read in the context of very clear directions, repeatedly given, that Journal 262 at 275; cf Kirby, "Why has the High Court become more involved in criminal appeals?", (2002) 23 Australian Bar Review 4 at 17-18 61 Gilbert v The Queen (2000) 201 CLR 414 at 438 [86] citing Whittaker (1993) 68 A Crim R 476 at 484. 62 MFA v The Queen (2002) 77 ALJR 139 at 155 [96]; 193 ALR 184 at 206 citing Green (1997) 191 CLR 334 at 398. 63 Conway (2002) 76 ALJR 358 at 374-375 [82], [84]; 186 ALR 328 at 350, 351. Kirby it was for the prosecution to prove beyond reasonable doubt that the killing was not the result of provocation of the accused by the victim. Read as a whole, and especially remembering the form of the applicable question given to the jury, it cannot be said that they would ultimately have been misled on the onus issue. So far as the failure to use the word "could" is concerned, it must be remembered that the mistake appeared in isolated passages of long and careful instructions. Elsewhere in his charge, his Honour explicitly referred to possibilities. The overall impression of the directions on provocation is by no means unfavourable to the applicant. Given that experienced judges have not always noticed the difference between "could" and "would" or "must" in this context, it asks too much to conclude that a jury's verdict on the provocation issue would have turned, in this case, upon such a small difference64. Thirdly, several recent decisions of this Court illustrate the fact that, notwithstanding established errors, appellate courts have felt able in the facts of the case to conclude that a new trial should not be granted65. The authority of this Court demands that a stringent approach be taken to legal error66. In part, this is because of the language of the statutes in which the "proviso" appears67 and in part because an appellate court has no way of knowing, with certainty, whether a misdirection has actually influenced the jury's deliberations or not68. Various formulae have been used to explain the invocation of the "proviso" notwithstanding established error. Commonly it is said that the conviction of the prisoner was "inevitable"69. Or that the error would not reasonably have influenced the outcome70. In Festa71, McHugh J held that, in deciding whether 64 Zoneff (2000) 200 CLR 234 at 260-261 [65]-[67]. 65 eg Festa v The Queen (2001) 208 CLR 593 at 633 [127], 657 [213], 671 [263]; Conway v The Queen (2002) 76 ALJR 358 at 366-367 [37]-[40], 381 [114]; 186 ALR 328 at 339-340, 359. 66 See eg Domican v The Queen (1992) 173 CLR 555 at 562 noted in Festa v The Queen (2001) 208 CLR 593 at 645-646 [173]-[176]. 67 eg Criminal Appeal Act 1912 (NSW), s 6(1) which states that the Court "shall allow the appeal": cf TKWJ v The Queen (2002) 76 ALJR 1579 at 1589-1590 [62] per McHugh J; 193 ALR 7 at 21-22. 68 A point made by the majority of this Court in Domican (1992) 173 CLR 555 at 69 Festa (2001) 208 CLR 593 at 655 [204]. 70 cf Conway v The Queen (2002) 75 ALJR 358 at 366 [32], 381 [114]; 186 ALR 328 Kirby the proviso should be applied, the appellate court is necessarily involved in weighing up the evidence for itself. His Honour said that it "should assume that ordinarily if it thinks that the accused must be convicted, so would a reasonable jury". Commentary has argued that this approach avoids rhetorical and implausible explanations about the inevitability of what a jury would do and having "the merit that it is probably in accordance with what appellate courts actually do"72. Whichever test is applied in the present case, it leaves me convinced that no miscarriage (and certainly no substantial miscarriage) has actually occurred73. The conviction of murder was inevitable. Fourthly, the foregoing conclusion is reinforced by the way in which the applicant's case was conducted at trial and in the Court of Criminal Appeal. Whilst that consideration is not determinative of the application, it can at least be said that it deprives the applicant of any argument that would be available had provocation been an important issue in the proceedings. In Green, for example, the accused had admitted killing the deceased. Provocation was therefore the key issue in the trial and subsequent appeals. The trial judge had ruled against the reception of evidence of the past history of the accused tendered for the defence on that issue74. The evidence was subsequently admitted for a different purpose, and the trial judge instructed the jury not to take that evidence into account for the purposes of provocation. As a result, McHugh J was of the opinion that the "accused's real case on provocation was never left to the jury"75. None of those complaints avail the applicant in these proceedings. To that extent, his appeal lacks the substance that carried the day in Green. So far as substance was concerned, the real issue that the applicant wished to tender to the jury was whether he had stabbed the deceased. Upon that issue the jury's verdict must be taken to have rejected the applicant's defence. Conclusions and order In the result I am of the opinion that the judge was probably entitled, and certainly well advised, to leave provocation to the jury. In doing so he made errors of law in the instruction he gave them on the requirements of the 71 (2001) 208 CLR 593 at 632 [123]. 72 Pincus, "Criminal Cases in the High Court of Australia β Festa v The Queen" (2002) 26 Criminal Law Journal 241 at 243. 73 Hembury v Chief of the General Staff (1998) 193 CLR 641 at 651 [22]-[23]. 74 Green (1997) 191 CLR 334 at 342. 75 Green (1997) 191 CLR 334 at 372. Kirby applicable statute. Such errors did not deprive the applicant's trial of its fundamental quality as a trial according to law. They were no more than a misdirection on a particular point of law arising within the trial limited to the use on some (but not all) of the occasions of the incorrect verb of probability rather than possibility. Although not taken at trial or in the Court of Criminal Appeal, the point remains open in this Court. It has been fully argued. The applicant is not deprived of it simply because of the way his trial or the earlier appeal were run. Having heard full argument on the point, this Court should deal with its merits and not dispose of the application as if it were back before a panel of the Court as an ordinary application for special leave. The case is one where, notwithstanding established legal error, it has not been shown that a miscarriage of justice has actually occurred. The verdict of guilty of murder was inevitable. The demonstrated mistake in the directions on provocation do not justify disturbance of the conviction that followed that verdict. Although my preference, the application having been argued as an appeal, would be to grant special leave and dismiss the appeal, nothing turns on the disposition. I will therefore join in the order proposed by the other members of the Court. Special leave should be refused. Hayne HAYNE J. In the Supreme Court of New South Wales, after a trial which lasted 23 days, the applicant was convicted of murder. The facts which gave rise to the charge are described in the reasons of Callinan J. At trial the applicant did not submit to the jury that he had been, or at least had not been proved not to have been, acting under provocation. His contention was that he had not stabbed the deceased; the deceased must have suffered the fatal wound in some other accidental way. Nonetheless, at the suggestion of the applicant's counsel, the trial judge (Sully J) gave the jury directions about provocation. The applicant now contends that those directions were wrong. The applicant made no application at trial for any redirection about provocation. Had he done so, what now are said to have been errors in the directions given by the trial judge could have been corrected. Not only was no complaint made to the trial judge about the directions that were given about provocation, no such complaint was made to the Court of Criminal Appeal in the applicant's appeal to that Court against his conviction. The first time the applicant has complained about the directions that were given on the subject of provocation is in his application for special leave to appeal to this Court. As the case was fought at trial, the central question of fact for the jury was whether the applicant stabbed the deceased with a knife. The applicant did not suggest that there was evidence that he may have lost self-control. Indeed, the whole thrust of his evidence was that he had not and that the deceased's death was an accident. There was ample evidence from which the jury could have concluded that the applicant had brought a knife with him to the place where the fatal fight occurred and had used it to stab the deceased, thus bringing a prolonged and episodic bar-room brawl between the two men to its fatal conclusion. If the jury accepted this evidence, and their verdict reveals that they did, the issue fought at trial was decided against the applicant. There was evidence that, in the course of the brawl, words were said and things were done that might be said to invite consideration of the issue of provocation. It may be, therefore, that after a trial of this length, abundant caution suggested that it was prudent to instruct the jury about the topic. But the course of proceedings at trial and on appeal to the Court of Criminal Appeal reveals that any error in the instructions given about provocation is not such as to require the intervention of this Court. No special circumstance of the kind referred to in Crampton v The Queen76 is shown for this Court to entertain the ground of appeal which it is sought to raise for the first time in this Court. 76 (2000) 206 CLR 161. Hayne The interests of justice neither in this case nor more generally require the grant of special leave. It is not arguable that there has been any miscarriage of justice. Special leave should be refused. Callinan CALLINAN J. In this matter the applicant seeks special leave to appeal from a decision of the Court of Criminal Appeal of New South Wales dismissing an appeal to that Court against his conviction for murder in July 1998 following a trial before a judge and jury which lasted 23 days. At an earlier incomplete hearing of his application, the applicant was confined to one ground only, on any appeal that he might be granted leave to pursue, and informed that he should be prepared to argue his application as if he were arguing an appeal. The ground was: The trial judge erred in his directions on provocation and on the burden of proof as it related to provocation. The Court of Criminal Appeal erred in holding that these directions were "appropriate". The applicant submits that the ground presents the following issues for determination: Did the trial judge err in his directions on provocation? (ii) Did the trial judge err in his directions on the burden of proof as it related to provocation? (iii) Did the trial judge's directions on provocation result in a miscarriage of justice? Two anterior questions do however arise: was it necessary that directions with respect to provocation be given anyway; and, why should the applicant, his counsel not having sought directions at the trial, and not having relied on any alleged inadequacies in the directions as to provocation in the Court of Criminal Appeal, now be permitted to rely upon a ground that raises them in this Court for the first time? The applicant submits that the answer to the second question, the correctness of which I will assume for present purposes, is that this is a case of the same kind as Crampton v The Queen77 in which this Court held that there was no inhibition upon it to entertain an appeal on grounds raised here for the first time, although special leave to appeal on such grounds should be granted only in exceptional circumstances. Facts and previous proceedings At about 7 o'clock in the evening of 27 October 1996 the applicant and Mr Jularic were arguing and fighting in a bar at the Beresford Hotel at Darlinghurst 77 (2000) 206 CLR 161. Callinan in Sydney. During the fight a sharp object penetrated Mr Jularic's chest. He collapsed. The applicant ran away. Mr Jularic died very soon afterwards. The prosecution case at trial was that the applicant stabbed Mr Jularic with a knife. The applicant gave evidence at the trial that he did not have a knife with him and that he did not stab anyone. He suggested that the fatal wound was caused by a shard from a glass broken during the fight. A friend of the applicant, however, Mr Niumeitolu, said that he actually saw him stab Mr Jularic with a knife. Two other witnesses confirmed Mr Niumeitolu's evidence and another saw the applicant with a knife in his hands. Although provocation was not part of the applicant's case the trial judge left it as an issue to the jury. It is necessary to refer to the evidence in some detail. In doing so I will take the case for the applicant at its highest by relevantly quoting his version of events as he recounted it in evidence in chief. The applicant described his occupation as a barman at a strip club. He worked there throughout the night before the slaying. At the beginning of his shift he took amphetamines and at the end of it he drank whisky mixed with a soft drink. For the period from 9 am until the death of Mr Jularic he was drinking continuously but was unable to make any estimate of how much he drank. At some time in the late afternoon or early evening he went to the Beresford Hotel where Mr Jularic was playing pool. After Mr Jularic had finished playing a game with some other people, the applicant began a game of pool with him. In the applicant's own words, the following events occurred: "Q: β¦ you had a number of drinks, is that right? I was pretty drunk. So you got up to play the game of pool. What happened next? Towards the end of the game, I think there was only about β maybe β I don't know β I can't guess β like there was a couple of balls left on the table. I just like walked over to get to the other side and I accidentally bumped his pool cue. I said 'sorry' but he just gave me a dirty look and shook his head and when I stood by the sliding door β Well, after the game he kind of looked at me and come over to shake my hand and me being drunk I thought I would give him a Callinan bit of his own medicine and shake my head to see how he felt. He just said, 'Well f*** you, you black c***' and walked off. I pushed him. Can I ask you to pause there β he walked off where? Just to my other side, just a metre away. After those words were said and the deceased walked away from you, what happened then? I pushed him and asked him what he said. He laughed at me so I pushed him again and he pushed me back and then I hit him. Then we started fighting. I can remember falling backwards and taking out the sliding door. After that we was broke up. Rob had a hold of me and I thought it was over. I thought I got my black c***'s worth and as Rob was holding me the deceased came up and like, hit me and I kind of like slumped and then he kicked me. Then I got back up. Can I ask you to pause there. Where did the kick connect? In the chest. Go on. Then I got back up and Rob wouldn't let go of me, so I screamed at him to let go of me. Then the deceased said, 'Let him go, I want to see what he's got.' As soon as they let go of me, I shoulder barged him to the ground. We wrestled there for a while. How did you feel about the words that you say had been said to you by the deceased? I was pretty mad, you know, just angry. You barged the deceased into the corner, is that right? Yes. Q: What happened next? Callinan I can remember Rob grabbing me, pulling me off the deceased and throwing me on the couch and as I was sitting on the couch the deceased come over and started kneeing me in the head, I kind of like I covered up and then Rob started pushing him away. I can remember one of the guys in there hitting him with a pool cue. Q: We will turn to when you were on the couch. You say the deceased kneed you; what happened then, can you remember? I can remember Rob pushing him away, telling him to go and somebody, a guy, come over with a pool cue and started hitting him across the back, I can't really remember, a pool cue, and telling him to get out of the pool room, I don't know. Q: What happened next? The deceased walked off. In which direction? Into the direction towards the glass house. I walked behind the deceased and then I come and I sit on these chairs over here [Indicating], where it says 'pool cue' here, like here [Indicating], but on the side. Q: What happened next? The deceased come back in with a bar stool, kind of looked at me, started to approach. I grabbed the glass, I threw it at him and I go to the pool table, I grabbed another pool ball and I threw it at him again. Q: What do you recollect happened next? A: Well, punching on again. Go on. I can remember punching on with him and somebody called out 'police' and then I heard somebody else say, 'Let's get the f*** out of here', and then everybody started running and I suppose I ran too and jumped over the wall and ran down the street." Callinan There was other evidence of the applicant's state of mind and demeanour before the fight. The applicant himself gave evidence that before the pool game he went into the lavatory and asked a "couple of familiar faces" if they had a "line of speed". They said "No". Mark McConnell testified that he saw the applicant in the lavatory pacing up and down and saying "f***, f***, f***". He said the applicant asked for a line of speed and that the applicant said to him "Come on, I really need some, man". Mark McConnell said that he thought the applicant was under the influence of some kind of drug and referred to his manner as one of "jitteriness, nervousness" and involving "pacing back and forth". John Williams saw the applicant speaking loudly and "very aggressively" in the same area. The applicant and Mr Jularic had made a bet of $20 on the game which the applicant lost. Appeal to this Court The Court does not have the benefit of any consideration by the Court of Criminal Appeal of the arguments of the applicant because they were not advanced in that Court. Provocation On this branch of his argument the applicant drew attention to a repetition, in the directions by the trial judge, Sully J, of departures from the language of s 23, especially sub-s (2)(b), of the Crimes Act 1900 (NSW) ("the Act") which relevantly provides as follows: "23 Trial for murderβprovocation (1) Where, on the trial of a person for murder, it appears that the act or omission causing death was an act done or omitted under provocation and, but for this subsection and the provocation, the jury would have found the accused guilty of murder, the jury shall acquit the accused of murder and find the accused guilty of manslaughter. For the purposes of subsection (1), an act or omission causing death is an act done or omitted under provocation where: the act or omission is the result of a loss of self-control on the part of the accused that was induced by any conduct of the deceased (including grossly insulting words or gestures) towards or affecting the accused, and that conduct of the deceased was such as could have induced an ordinary person in the position of the accused to have so far lost self-control as to have formed an intent to kill, or to inflict grievous bodily harm upon, the deceased, Callinan whether that conduct of the deceased occurred immediately before the act or omission causing death or at any previous time." The defect in the directions was, it was submitted, the substitution, in both their written and oral forms, of the words "must" and "would" for "could". In the written directions his Honour said this: "Secondly, the particular conduct of the victim which is said to have so provoked the accused must have been sufficient to have induced an ordinary person to have so far lost his self-control as to have formed an intent to kill the victim, or to inflict upon the victim really serious bodily injury." (emphasis added) Later in the written directions his Honour said: "The question for you is whether you think that an ordinary member of the contemporary Australian community, aged in his mid twenties, and towards whom the victim had behaved as he behaved towards the present accused would have responded by shooting the victim dead." (emphasis added) In drawing together the subjective and objective elements required to establish provocation, his Honour again used the word "would": "The subjective test to begin with: what was the level of affront in fact to this accused? The objective test: transposing an insult of that level of gravity to the case of an ordinary person in October 1996, is it reasonable to say that such an ordinary person would have responded to an insult of that particular gravity by stabbing fatally the person who had insulted him?" (emphasis added) At another point the trial judge again chose not to use the word "could": "Making the assessment you are to bear carefully in mind the underlying assumption of the law, which is that the particular provocative conduct may be such as to cause an ordinary person to lose his self-control to such an extent that he does what is unreasonable and extraordinary, that is to say, an act which, were it not for the provocation, would amount to the crime of murder." (emphasis added) The applicant relied on the observations of Brennan CJ in Green v The 78 (1997) 191 CLR 334 at 340. Callinan "The objective test prescribed by par (b) turns not on what the ordinary person would have done in response to the provocation experienced, but on what the ordinary person could have been induced to intend. Dependent on the circumstances of the trial, the jury may need a direction to draw their attention to the difference between 'would' and 'could' and will ordinarily need a direction to distinguish between what the ordinary person could have been induced to intend and what the ordinary person could have been induced to do." It must be accepted that the use of the word "would" was a misdirection: whether however it led to any possibility of a miscarriage of justice is another matter. The Act relevantly looks to "an ordinary person in the position of the accused". The use of the words, "an ordinary person" in the sub-section must have been intended to impose some objective limits to the kind of behaviour which might be regarded as sufficiently provocative to answer the statutory description of provocation. Section 23 requires the Crown to exclude or negate beyond reasonable doubt one or more of the matters to which the section refers. The accused lost self-control. The loss of self-control caused the act or omission causing the death. The provocative conduct was the conduct of the victim. The provocative conduct consisted of grossly insulting words or gestures (not, it may be observed, looks or expressions). The provocative conduct was directed towards, or affected the accused. The provocative conduct could cause the formation of an intent to kill, or to inflict grievous bodily harm. The provocative conduct could have induced an ordinary person in the position of the accused to think and act as the accused did. The provocative conduct was of such a kind as to cause the accused, not merely to lose some self-control, but to so far lose self-control as to form the requisite intent. As will appear, I am of the opinion that there was evidence capable of negating beyond reasonable doubt the first, seventh and eighth matters. What s 23(2)(b) does not indicate is the stage in a course of events that "the position of the accused" has to be considered, a matter upon which Criminal Code provisions do shed some light by referring, for example, to an act done "in the heat of passion caused by sudden provocation, and before there is time for the Callinan person's passion to cool"79. The absence of language of that kind compounds the difficulties in a case such as this one, of an initial mild slight by a look, of insulting language, of a fight, an interruption to the fight, the applicant's forcible restraint by others, blows by the deceased, and a deliberate resumption of violence by the applicant. I doubt whether the possibilities should be confined (as to the loss of self-control) to the precise moment at which (assuming it to be ascertainable) the applicant formed the intent (which the sub-section requires) to kill or inflict grievous bodily harm. Section 23 of the Act was last considered by this Court in Green80. There McHugh J quoted81 from the joint judgment of Brennan, Deane, Dawson and Gaudron JJ in Masciantonio v The Queen82: "Homicide, which would otherwise be murder, is reduced to manslaughter if the accused causes death whilst acting under provocation. The provocation must be such that it is capable of causing an ordinary person to lose self-control ... The provocation must actually cause the accused to lose self-control and the accused must act whilst deprived of self-control before he has had the opportunity to regain his composure. It follows that the accused must form an intention to kill or to do grievous bodily harm (putting recklessness to one side) before any question of provocation arises. Provocation only operates to reduce what would otherwise be murder to manslaughter. Since the provocation must be such as could cause an ordinary person to lose self-control and act in a manner which would encompass the accused's actions, it must be such as could cause an ordinary person to form an intention to inflict grievous bodily harm or even death83. The test involving the hypothetical ordinary person is an objective test which lays down the minimum standard of self-control required by the 79 See the Criminal Code of Queensland: s 304, "Killing on provocation"; s 268 defines provocation generally in relation to assault which contemplates an entirely objective test of an "ordinary person" and excluding "a lawful act" as an act of provocation; and s 269, which expressly requires proportionality of the response to the provocation. 80 (1997) 191 CLR 334. 81 (1997) 191 CLR 334 at 367-368. 82 (1995) 183 CLR 58 at 66-67. 83 Johnson v The Queen (1976) 136 CLR 619 at 639 per Barwick CJ. Callinan law. Since it is an objective test, the characteristics of the ordinary person are merely those of a person with ordinary powers of self-control. They are not the characteristics of the accused, although when it is appropriate to do so because of the accused's immaturity, the ordinary person may be taken to be of the accused's age. ethnicity, physical However, the gravity of the conduct said to constitute the provocation must be assessed by reference to relevant characteristics of the accused. Conduct which might not be insulting or hurtful to one person might be extremely so to another because of that person's age, sex, race, attributes, personal relationships or past history. The provocation must be put into context and it is only by having regard to the attributes or characteristics of the accused that this can be done. But having assessed the gravity of the provocation in this way, it is then necessary to ask the question whether provocation of that degree of gravity could cause an ordinary person to lose self-control and [form an intent to kill or inflict grievous bodily harm]." features, personal In Green McHugh J offered one qualification to that84: "The only qualification I would make to this statement is to add considerations of 'ethnic or cultural background of the accused' to age and maturity as relevant to any inquiry into the objective standard by which the self-control of an accused is measured.85" McHugh J's summary of the relevant principles to be distilled from the sub-section was as follows86: "All of the accused's attendant circumstances and sensitivities are relevant in determining the effect of the provocation on 'an ordinary person in the position of the accused'. Indeed, '[w]ere it otherwise, it would be quite impossible to identify the gravity of the particular provocation.'87 As the Court said in Stingel88: 84 (1997) 191 CLR 334 at 368. 85 See generally McHugh J's comments in Masciantonio (1995) 183 CLR 58 at 72-74: cf Yeo, "Sex, Ethnicity, Power of Self-Control and Provocation Revisited", (1996) 18 Sydney Law Review 304. 86 (1997) 191 CLR 334 at 369. 87 Stingel v The Queen (1990) 171 CLR 312 at 326. Callinan '[N]one of the attributes or characteristics of a particular accused will be necessarily irrelevant to an assessment of the content and extent of the provocation involved in the relevant conduct. For example, any one or more of the accused's age, sex, race, physical features, personal attributes, personal relationships and past history may be relevant.' (emphasis added). The fact that an accused is especially sensitive to the conduct constituting the provocation, or that he or she takes the conduct as being aimed at a particular sensitivity when in fact it is not, will not preclude a finding of provocation, nor prevent it from being attributed to the hypothetical ordinary person. For example, in Luc Thiet Thuan v The Queen89, the Privy Council held that the accused's impaired mental condition which made him prone to respond explosively even to minor provocation was a factor which could properly be taken into account when assessing the gravity of the conduct by the deceased. Similarly, the fact that the accused in the present appeal had a special sensitivity to sexual assault because of what he believed had occurred to his sisters was relevant to the issue of provocation under s 23(2)(a) and the extent of his provocation must be attributed to the ordinary person for the purpose of s 23(2)(b)." Even with the benefit of his Honour's careful exposition of the meaning and effect of the sub-section, it is not easy to see how it can operate in the circumstances of a bar room brawl of the kind that occurred here in which, however the dispute may have started, there came a stage at which the applicant appears to have become, if not the instigator, at least a fully voluntary participant not any longer acting under an uncontrollable impulse. A further difficulty of applying the section arises out of the two almost irreconcilable concepts contained within it, of, on the one hand, a loss of self-control, and, on the other, the deliberate mental process of the formation of the requisite intent. A submission of the applicant was that he did not lose self-control: according to him he did not even have a knife and never stabbed the deceased, propositions clearly rejected by the jury in finding the applicant guilty of murder. The applicant's own description of his state of mind during the fight was "pretty aggressive, angry". He did not say in terms, and I do not think that it may fairly be inferred from anything that he said in evidence, that he had truly lost self- control. 88 (1990) 171 CLR 312 at 326. 89 [1997] AC 131 at 146. Callinan The observations of Gleeson CJ in the Court of Criminal Appeal of New South Wales in Chhay are in point90: "Emotions such as hatred, resentment, fear, or the desire for revenge, which commonly follow ill-treatment, and sometimes provide a motive for killing, do not of themselves involve a loss of self-control although on some occasions, and in some circumstances, they may lead to it. What the law is concerned with is whether the killing was done whilst the accused was in an emotional state which the jury are prepared to accept as a loss of self-control." I am unable to accept that an ordinary person in the position of the applicant here could have so far lost, and indeed did in fact so far lose self- control as to have formed an intent to kill, or to inflict grievous bodily harm on Mr Jularic. What was in reality the position of the applicant? He had drunk a very large amount of alcohol. He was in an angry and aggressive mood. The fight began because of a "look" on the face of Mr Jularic. This was so even though Mr Jularic had offered to shake the applicant's hand. The applicant was carrying a knife before the fight began and during it. An offensive racist remark was made to him. Following an interruption to the fight the applicant was punched and kicked. The applicant was restrained but on his release insisted on resuming the fight. He very soon thereafter stabbed Mr Jularic. In my opinion an ordinary person in the position of the applicant, that is, in all of the circumstances to which I have just referred, could not have been induced so far to lose self-control as to intend to kill or inflict grievous bodily harm to the deceased. One particular requirement of the sub-section, the possible reaction of the hypothetical ordinary person, is not satisfied here even though the applicant was insulted and was at one stage pushed and kneed or kicked by Mr Jularic. Accordingly it was unnecessary for his Honour to give any directions on provocation although it is easy to understand, why after a long trial as this one was, a trial judge would out of caution choose to do so. The giving of them, even in the form in which they were given could have caused no miscarriage of justice. I am reinforced in my opinion by these matters: first, that the applicant's counsel did not directly raise provocation by seeking from the applicant any answer whether he had lost self-control, and did not refer to provocation in his speech to the jury. Instead he submitted to the trial judge that there were matters deserving of attention relating to provocation and to intoxication. He said that he did not propose to address the jury in relation to them but suggested that his Honour might think it appropriate to sum up on them. 90 (1994) 72 A Crim R 1 at 14. Callinan Secondly, the trial judge himself was doubtful whether there was evidence of provocation sufficient to form a basis for a direction about it. Thirdly, the applicant's counsel made no request for any relevant redirections. Fourthly, the applicant did not raise the matter in the Court of Criminal Appeal. Fifthly, there were obvious forensic reasons why the applicant's counsel might not have wished to adduce evidence for the applicant of loss of self- control, or to address on provocation: in particular, that if he had, the jury might regard that as an implicit admission of the matters so vehemently denied by the applicant, that he had a knife and formed an intent to stab Mr Jularic with it in order to kill him or inflict grievous bodily harm on him. Having said that, I would not however wish to be taken as saying that a judge is not obliged to put provocation to a jury if there is a basis for it and even if counsel for the defence has not raised it. Once a basis for it exists it is for the prosecution to negate it beyond reasonable doubt. The other matter is the related one of the onus of proof. The applicant points to passages in the trial judge's summing up and a statement made in the absence of the jury which he submits had the effect of reversing the onus of proof with respect to the negating of provocation. "If you accept that the deceased did in fact make that particular remark to which the accused referred in his evidence, and of which I reminded you yesterday, then you would be entitled to regard that as an act of provocation. I do not mean by that that all the consequences that we have been discussing would immediately follow. All I am saying is that you would be entitled to find as a fact β but it would be a matter for you β that that was a provocative thing to do; and you would thereupon be put upon the first stage of the inquiry that we have been discussing: what was in fact the affront, the level of affront, the level of the gravity of the affront to this particular accused? If you find as a fact that in the course of what developed from that point on, the deceased in fact fomented an intensification of the argument by saying provocatively and aggressively and challengingly, 'Let him go. I want to see what he's got'; if you find that as a fact, that too would be behaviour of which you would be entitled to find that it was provocative in the sense that we are discussing. Callinan I stopped myself when I was on the verge of saying you have got to be satisfied. I knew I had better not say that; and the only alternative is to say to them, you have to find as a fact a basis upon which you can then move to apply the principles. You cannot apply them in a vacuum. You either find facts on which you can bring those principles to bear or you do not. Now I do not know how much more plainly one can bring it to the jury's attention. The law will not regard the accused as having been provoked in the requisite legal sense by the victim, unless two conditions are both satisfied." It is true that the passages to which the applicant points may at least imply that there was an onus of proof upon the applicant to establish facts to ground a defence of, or to prove provocation, rather than that it was for the prosecution to negative it if there were any basis for it in the evidence. But those passages, and those where "would" instead of "could" were used, are a few only in an otherwise careful summing up which made it clear from beginning to end that it was for the prosecution to prove the case beyond reasonable doubt and to negative defences available on the evidence, including provocation. The respondent makes the important point that again the applicant made no application to the trial judge for any relevant redirections on the onus of proof. What I have said in relation to the other aspects of the applicant's proposed grounds of appeal also applies to this one. For the reasons given therefore, that it was unnecessary to leave provocation to the jury, that the case against the applicant was a strong one, and because there are no real prospects of a successful appeal, I would refuse special leave. |
HIGH COURT OF AUSTRALIA PLAINTIFF AND THE COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA AND ANOR DEFENDANTS Pape v Commissioner of Taxation [2009] HCA 23 Date of order: 3 April 2009 Date of publication of reasons: 7 July 2009 ORDER Order that the questions stated in the amended special case be answered as follows: Question 1: Does the plaintiff have standing to seek the relief claimed in his writ of summons and statement of claim? Answer: Yes. Question 2: Is the Tax Bonus for Working Australians Act (No 2) 2009 (Cth) valid because it is supported by one or more express or implied heads of legislative power under the Commonwealth Constitution? Answer: The Tax Bonus for Working Australians Act (No 2) 2009 is a valid law of the Commonwealth. Question 3: Is payment of the tax bonus to which the plaintiff is entitled under the Tax Bonus for Working Australians Act (No 2) 2009 supported by a valid appropriation under ss 81 and 83 of the Constitution? Answer: There is an appropriation of the Consolidated Revenue Fund within the meaning of the Constitution in respect of payments by the Commissioner required by s 7 of the Tax Bonus for Working Australians Act (No 2) 2009. Question 4: Who should pay the costs of the special case? Answer: In accordance with the agreement of the parties announced on the second day of the hearing of the special case, there is no order for costs. Representation B R Pape in person (instructed by Toomey Pegg Drevikovsky Lawyers) S J Gageler SC, Solicitor-General of the Commonwealth with S B Lloyd SC and G M Aitken for the defendants (instructed by Australian Government Solicitor) Interveners R J Meadows QC, Solicitor-General for the State of Western Australia with C L Conley intervening on behalf of the Attorney-General for the State of Western Australia (instructed by State Solicitor for Western Australia) M G Hinton QC, Solicitor-General for the State of South Australia with S A McDonald intervening on behalf of the Attorney-General for the State of South Australia (instructed by Crown Solicitor for the State of South Australia) M J Leeming SC with J K Kirk intervening on behalf of the Attorney-General for the State of New South Wales (instructed by Crown Solicitor (NSW)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Pape v Commissioner of Taxation Constitutional law β Standing β Section 7 of the Tax Bonus for Working Australians Act (No 2) 2009 (Cth) ("the Act") provides that the Commissioner of Taxation must pay a tax bonus to entitled persons β Persons entitled under s 5 of Act if, inter alia, an individual, Australian resident with an adjusted tax liability greater than nil and not exceeding $100,000 for 2007-08 income tax year β Whether person entitled under s 5 of Act has standing to bring action for declarations and injunction. Constitutional law β Appropriations of moneys from the Consolidated Revenue Fund β Whether payment of tax bonus supported by valid appropriation under ss 81 and 83 of Constitution β Whether appropriation "for the purposes of the Commonwealth" under s 81 β Whether phrase "for the purposes of the Commonwealth" limits legislative power β Whether source of legislative "power to spend" is ss 81 and 51(xxxix). Constitutional law β Powers of the Commonwealth Parliament β Whether Act law with respect to trade and commerce under s 51(i) β Whether Act law with respect to taxation under s 51(ii) β Whether Act law with respect to external affairs under s 51(xxix) β Whether Act supported by implied nationhood power β Whether Act supported by power conferred by ss 81 and 51(xxxix) β Whether Act supported by power conferred by ss 61 and 51(xxxix) β If Act beyond power, whether Act can be read down so as to be within power. Constitutional law β Executive power of the Commonwealth β Global financial and economic crisis β Whether Act supported by ss 61 and 51(xxxix). Constitutional law β Taxation power β Persons entitled under s 5 of Act included persons entitled to tax bonus greater than their adjusted tax liability for the 2007-08 financial year β Whether Act law with respect to taxation. Words and phrases β "appropriation", "for the purposes of the Commonwealth", "made by law" and "maintenance of this Constitution". Constitution, ss 51(i), (ii), (xxix), (xxxix), 61, 81 and 83. Acts Interpretation Act 1901 (Cth), s 15A. Tax Bonus for Working Australians Act (No 2) 2009 (Cth). Taxation Administration Act 1953 (Cth), ss 2 and 16. Introduction On 4 February 2009, the Minister for Families, Housing, Community Services and Indigenous Affairs introduced into the House of Representatives the Tax Bonus for Working Australians Bill 2009. The Minister said that the measure would provide, at a cost of $8.2 billion, financial support to about 8.7 million taxpayers. This support was to take the form of one-off payments ranging from $950 to $300 according to the taxable income of the recipients in the year ended 30 June 2008. Their stated purpose was to1: "immediately support jobs and strengthen the Australian economy during a severe global recession." The Bill was defeated in the Senate. A fresh Bill in substantially the same terms save for the amounts of the payments was introduced into the House of Representatives on 12 February 2009 as the Tax Bonus for Working Australians Bill (No 2) 2009. It provided for payments ranging from $900 to $250 for taxpayers earning between nil and $100,000 for the year ended 30 June 2008. A Tax Bonus for Working Australians (Consequential Amendments) Bill (No 2) 2009 was introduced at the same time. The Second Reading Speeches for the new Bills incorporated by reference the Second Reading Speeches for their predecessors2. The payments were said to be among five key one-off payments for lower and middle-income households and individuals3. Eligibility for the payments, according to entitlements defined by the legislation, was to be determined by the Commissioner of Taxation. The bonus would be available from April 2009 to Australian resident taxpayers who had already had their tax returns assessed. Taxpayers who had not yet lodged their returns would have their bonus paid following assessment of their returns by the Australian Taxation Office ("the ATO"). 1 Australia, House of Representatives, Parliamentary Debates (Hansard), 4 February 2 Australia, House of Representatives, Parliamentary Debates (Hansard), 12 February 2009 at 1267. 3 The Household Stimulus Package Act (No 2) 2009 (Cth) provided for the "back to school bonus", the "single income family bonus", the "training and learning bonus" and the "farmers hardship bonus", primarily by amendments to the Social Security Act 1991 (Cth) and the A New Tax System (Family Assistance) Act 1999 (Cth). The Bills were enacted and assented to on 18 February 2009 as the Tax Bonus for Working Australians Act (No 2) 2009 (Cth) ("the Tax Bonus Act") and the Tax Bonus for Working Australians (Consequential Amendments) Act (No 2) 2009 (Cth) ("the Consequential Amendments Act"). On 26 February 2009, Bryan Reginald Pape, a person apparently entitled to receive $250 under the Tax Bonus Act, issued a writ out of the Sydney Registry of this Court against the Commissioner of Taxation claiming, inter alia, declarations that the Tax Bonus Act is invalid and that the tax bonus payable to him under that Act is "unlawful and void". He also sought an injunction restraining the making of the payment to him. The Commonwealth was joined as a defendant to the action. The parties agreed to submit a Special Case pursuant to r 27.08 of the High Court Rules 2004, stating questions for the opinion of the Full Court. On 13 March 2009, Gummow J ordered that the Special Case be referred to the Full Court for hearing commencing on 30 March 2009. Notices under s 78B of the Judiciary Act 1903 (Cth) were issued on 17 March 2009 to the Attorneys-General of the States and Territories. The States of New South Wales, South Australia and Western Australia intervened. In my opinion, Mr Pape had standing to claim the relief he sought. I am also of the opinion that the Tax Bonus Act is valid and the tax bonus payable to Mr Pape is lawful. On 3 April 2009, I joined in the pronouncement of orders reflecting this conclusion by way of the answers then given to the questions stated in the Special Case. I base my opinion as to validity upon the following propositions: The executive power of the Commonwealth conferred by s 61 of the Constitution extends to the power to expend public moneys for the purpose of avoiding or mitigating the large scale adverse effects of the circumstances affecting the national economy disclosed on the facts of this case, and which expenditure is on a scale and within a time-frame peculiarly within the capacity of the national government. The executive power so to expend public moneys is conditioned, by ss 81 and 83 of the Constitution, upon appropriation of the requisite moneys by an Act of the Parliament for that purpose. The appropriation necessary to authorise the proposed expenditure in this case was effected by s 16 of the Taxation Administration Act 1953 (Cth) ("the Taxation Administration Act") read with s 3 of the Tax Bonus Act. The legislative power to enact statutory provisions, beyond appropriation, to support the exercise of the executive power in this case is found in the incidental power conferred by s 51(xxxix) of the Constitution. the Commonwealth Parliament. The provisions of ss 81 and 83 do not confer a substantive "spending They provide for power" upon parliamentary control of public moneys and their expenditure. The relevant power to expend public moneys, being limited by s 81 to expenditure for "the purposes of the Commonwealth", must be found elsewhere in the Constitution or statutes made under it. It is not necessary in light of the preceding to consider the specific heads of power otherwise relied upon by the Commonwealth to support the Tax Bonus Act. The implications of these propositions for the scope of the executive power generally are limited. The aspect of the power engaged in this case involves the expenditure of money to support a short-term national fiscal stimulus strategy calculated to offset the adverse effects of a global financial crisis on the national economy. The legislative measures defining the criteria of that expenditure and matters incidental to it were authorised by s 51(xxxix). The expenditure was necessarily conditioned upon a parliamentary appropriation, in legislative form, mandated by ss 81 and 83 of the Constitution. The constitutional support for expenditure for national purposes, by reference to the executive power, may arguably extend to a range of subject areas reflecting the established practice of the national government over many years, which may well have relied upon ss 81 and 83 of the Constitution as a source of substantive spending power. It is not necessary for present purposes to define the extent to which such expenditure, previously thought to have been supported by s 81, lies within the executive power. Future questions about the application of the executive power to the control or regulation of conduct or activities under coercive laws, absent authority supplied by a statute made under some head of power other than s 51(xxxix) alone, are likely to be answered conservatively4. They are likely to be answered bearing in mind the cautionary words of Dixon J in the Communist "History and not only ancient history, shows that in countries where democratic institutions have been unconstitutionally superseded, it has been done not seldom by those holding the executive power. Forms of 4 See discussion of the authorities in Zines, The High Court and the Constitution, 5th ed (2008) at 414-415. 5 Australian Communist Party v The Commonwealth (1951) 83 CLR 1 at 187; [1951] HCA 5. government may need protection from dangers likely to arise from within the institutions to be protected." In that connection, and as appears below, the identification of a class of events or circumstances which might, under some general rubric such as "national concern" or "national emergency", enliven the executive power does not arise for consideration here. The questions for determination The Special Case stated the following questions for the opinion of the Full Court: Does the plaintiff have standing to seek the relief claimed in his writ of summons and statement of claim? Is the Tax Bonus Act valid because it is supported by one or more express implied heads of legislative power under the Commonwealth Constitution? Is payment of the tax bonus to which the plaintiff is entitled under the Tax Bonus Act supported by a valid appropriation under ss 81 and 83 of the Constitution? 4. Who should pay the costs of the Special Case? The Special Case proceeded in part on the basis of certain "agreed facts" incorporated in it by recitation and by documentary attachment. It is necessary to consider the nature of those facts and their role in the decision in this case before turning to their detailed content. The nature of the agreed facts The facts agreed in the Special Case fall into the following categories: Statements of law or mixed law and fact. In particular the statement that Mr Pape is putatively entitled under the Tax Bonus Act to a payment of $250 and that his adjusted tax liability for the year ended 30 June 2008 was $25,951.92. The existence of certain economic conditions. (iii) Statements made by the Executive and by international bodies comprising the Group of 20 ("the G20"), the International Monetary Fund ("the IMF") and the Organisation for Economic Co-operation and Development ("the OECD"). (iv) Decisions taken by the Executive. Mr Pape contested the relevance of the factual matters. He did not dispute their accuracy or that of the statements, attached to the Special Case, made by the Commonwealth Government, the G20, the IMF and the OECD. Organisations referred to in the agreed facts In order to understand the agreed facts it is necessary to describe the international entities referred to in the attachments to the Special Case. The G20, the IMF and the OECD may be explained briefly by reference to materials provided to the Court, without objection, during the hearing of the Special Case. The G20, of which Australia is a member, comprises Finance Ministers and Central Bank Governors of industrialised and developing countries. Meetings of the Ministers and Governors are usually preceded by two meetings of Deputies6. The IMF was established in 1945 pursuant to the Articles of Agreement of the International Monetary Fund, a treaty which entered into force for Australia on 5 August 1947. The purposes of the IMF set out in Art I of the treaty include: "(i) To promote international monetary cooperation through a permanent for consultation and collaboration on international monetary problems. institution which provides the machinery To facilitate the expansion and balanced growth of international trade, and to contribute thereby to the promotion and maintenance of high levels of employment and real income and to the development of the productive resources of all members as primary objectives of economic policy." Members of the IMF assume, inter alia, obligations to collaborate with the IMF to promote exchange stability and maintain orderly exchange arrangements with other members and to avoid competitive exchange alterations7. Members also undertake not to impose restrictions on the making of payments and transfers for current international transactions without the approval of the IMF8. 6 http://www.g20.org accessed 28 March 2009, provided to the Court by the Commonwealth at the hearing. 7 Articles of Agreement of the International Monetary Fund, Art IV, s 1. 8 Articles of Agreement of the International Monetary Fund, Art VIII, s 2(a). Australia is also a party to the Convention on the Organisation for Economic Co-operation and Development made in Paris in 1960. The Convention entered into force for Australia on 7 June 1971. The Convention reconstituted what was formerly the Organisation for European Economic Co- operation as the OECD. The aims of the OECD are set out in Art 1 of the Convention, including the promotion of policies designed: to achieve the highest sustainable economic growth and employment and a rising standard of living in Member countries, while maintaining financial stability, and thus to contribute to the development of the world economy; to contribute to sound economic expansion in Member as well as non-member countries in the process of economic development; and to contribute to the expansion of world trade on a multilateral, non- discriminatory basis in accordance with international obligations." The members also agree that they will "co-operate closely and where appropriate take co-ordinated action"9. Factual background The following sets out salient features of the agreed facts, including those reflected in the attachments to the Special Case. There have been rapid adverse changes in macroeconomic circumstances globally and in Australia in 2008 and 2009. These are characterised in the agreed facts as a global financial and economic crisis. No country's economy is expected to avoid its effects. It has already involved the most severe and rapid deterioration in the global economy since the Great Depression. It is the most significant economic crisis since the Second World War. It involves sharp world-wide declines in growth, rises in unemployment, restricted access to credit and falling wealth. The crisis has triggered a global recession. This has caused a deterioration in the Australian economy with almost all of its sectors facing significant weakness over the forecast horizon. Significantly weakened domestic growth and higher unemployment are forecast. 9 Convention on the Organisation for Economic Co-operation and Development, Art 3(c). On 15 November 2008 the G20 held a Summit on Financial Markets and the World Economy in Washington DC and issued a declaration which referred to "serious challenges to the world economy and financial markets" and the determination of the members to enhance cooperation, to restore global growth and to achieve needed reforms in the world's financial systems. The declaration included the following statement: "Against this background of deteriorating economic conditions worldwide, we agreed that a broader policy response is needed, based on closer macroeconomic cooperation, to restore growth, avoid negative spillovers and support emerging market economies and developing countries. As immediate steps to achieve these objectives, as well as to address longer-term challenges, we will: * Use fiscal measures to stimulate domestic demand to rapid effect, as appropriate, while maintaining a policy framework conducive to fiscal sustainability." In December 2008 in an OECD publication entitled "OECD Economic Outlook" reference was made to fiscal stimulus packages. The general observation was offered that in some countries the scope for the reduction in policy rates was limited. In that unusual situation fiscal policy stimulus over and above the support provided through automatic stabilisers had an important role to play: "Fiscal stimulus packages, however, need to be evaluated on a case-by- case basis in those countries where room for budgetary manoeuvre exists. It is vital that any discretionary action be timely and temporary and designed to ensure maximum effectiveness." Reference was made to the long-term nature of infrastructure investment and: "[a]lternatives, such as tax cuts or transfer payments aimed at credit- constrained, poorer households, might prove more effective in boosting demand." Staff of the IMF prepared a note of a meeting of the Deputies of the Group of 20 held between 31 January and 1 February 2009 in London. The note referred to the current downturn in the global economy and an "adverse feedback loop between the real and financial sectors". The Executive Summary to the note stated: "More aggressive and concerted policy actions are urgently needed to resolve the crisis and establish a durable turnaround in global activity. To be effective, policies need to be comprehensive and internationally coordinated to limit unintended cross-border effects. Action is needed on two fronts β to restore financial sectors to health and to bolster demand to sustain a durable recovery in global activity." The need to support demand was specifically referred to: "Macroeconomic policy stimulus will be critical to support demand while financial issues are addressed and to avoid a deep and prolonged recession. With conventional monetary policy reaching its limits, central banks will need to explore alternative policy approaches with a focus on intervention to unlock key credit markets. That said, with constraints on the effectiveness of monetary policy, fiscal policy must play a central role in supporting demand, while remaining consistent with medium-term sustainability. A key feature of a fiscal stimulus program is that it should support demand for a prolonged period of time and be applied broadly across countries with policy space to minimize cross-border leakages." The role of direct fiscal stimulus was also identified: "Fiscal policy is providing important support to the economy through a range of channels, including direct stimulus, automatic stabilizers and the use of public balance sheets to shore up the financial system. While such support is critical to bolster aggregate demand and to limit the impact of the financial crisis on the real economy, it implies a significant deterioration in the fiscal accounts." At the time of the Deputies' meeting, G20 countries had adopted or planned to adopt fiscal stimulus measures amounting on average to around Β½% of GDP in 2008, 1Β½% of GDP in 2009 and about 1ΒΌ% of GDP in 2010. There was considerable variation across G20 countries in the size and composition of stimulus packages. Fiscal stimulus, to that time, had consisted of one-third revenue measures and two-thirds expenditure measures. Revenue measures had focussed on cuts in personal income tax and indirect taxes such as VAT or excises. Increased spending for infrastructure had been emphasised on the expenditure side. Other expenditure measures included transfers to states or local governments, support for housing sectors and aid to small and medium enterprises. Fiscal stimulus measures in G20 countries were expected to affect their growth in 2009 by the order of Β½ to 1ΒΌ percentage points. A statement from an IMF-OECD-World Bank seminar convened in February 2009 included the following: "In parallel, there continues to be an urgent need for fiscal stimulus. The size and composition of fiscal packages should be consistent with each country's fiscal space and institutional capacity. The deepening of the downturn suggests the need for an increase in high-impact fiscal expenditures in the first half of 2009, with further support in the following quarters, by countries in a position to prudently undertake such spending. At the same time, embedding stimulus packages in a credible medium- term strategy that safeguards fiscal sustainability will also increase their impact in the short term." The Updated Economic and Fiscal Outlook ("the UEFO") published by the Treasurer and the Minister for Finance on 3 February 2009 referred to the deteriorating global economy and falling tax revenues. The circumstances were described as "exceptional" and the conclusion offered that "fiscal policy must take a strong role in supporting the economy". The paper described support for economic growth and jobs as "the immediate and overriding priority for fiscal policy". The Ministers said that a $42 billion Nation Building and Jobs Plan would deliver a fiscal stimulus package of about 2% of GDP in 2008-09. Elements of the proposed fiscal stimulus package were set out in the UEFO. The element relevant to these proceedings was described: "The Government will provide $12.7 billion to deliver an immediate stimulus to the economy to support growth and jobs now before investment spending and lower interest rates take effect. These measures include an $8.2 billion Tax Bonus for Working Australians, a $1.4 billion Single-income Family Bonus, a $20.4 million Farmer's Hardship Bonus, a $2.6 billion Back to School Bonus and a $511 million Training and Learning Bonus. These bonuses will be paid from early March." The Ministers referred to statements by international financial institutions about the necessity for domestic fiscal stimulus. The decisions taken by the Commonwealth Government by way of response to the macroeconomic circumstances included: To create three substantial fiscal stimulus packages and a range of other interventions in financial markets, including a deposit and wholesale funding guarantee. The fiscal stimulus packages are the Economic Security Strategy, announced 14 October 2008, the Nation Building Package announced 12 December 2008 and the Nation Building and Jobs Plan announced in the UEFO on 3 February 2009; To provide an $8.2 billion tax bonus for working Australians, which was reduced to $7.7 billion as a result of the legislative process. A copy of a joint media release by the Prime Minister and the Treasurer on 3 February 2009 in relation to the Nation Building and Jobs Plan was set out as an annexure to the Special Case. The press release said, inter alia: "Targeted bonuses to low and middle income households will provide an immediate stimulus to the economy and support Australian jobs. In conjunction with the payments delivered as part of the $10.4 billion Economic Security Strategy announced in October, these measures have been designed to assist those groups most affected by the flow-on effects of the global recession." The Special Case annexed a minute of the ATO relating to the implications of delaying the tax bonus as a result of these proceedings. The minute referred to: "an extremely tight implementation schedule in order to ensure that as many tax bonus payments as possible are distributed in the last quarter of the financial year in line with the objectives of the Government's fiscal stimulus strategy." Distribution of the payments was planned to begin in the week commencing 6 April 2009 with some 80% of the payments being made over the following four weeks. A smaller wave of distributions was to be made in May and June. The objective of the Commonwealth Government was that payments of the tax bonus be made as soon as possible on the basis that the earlier the stimulus was delivered the more effective it would be. The statutory framework The Tax Bonus Act commenced on the day on which it received the Royal Assent10. Section 3 of the Act provides: "The Commissioner has the general administration of this Act." This provision makes the Tax Bonus Act a "taxation law" within the meaning of s 995-1(1) of the Income Tax Assessment Act 1997 (Cth). The term "taxation law" is there defined, inter alia, as: "an Act of which the Commissioner has the general administration". Section 5 of the Tax Bonus Act creates the entitlement to a tax bonus payment: 10 Tax Bonus Act, s 2. "Entitlement to tax bonus (1) A person is entitled to a payment (known as the tax bonus) for the 2007-08 income year if: the person is an individual; and the person is an Australian resident for that income year; and the person's adjusted tax liability for that income year is greater than nil; and the person's taxable income for that income year does not exceed $100,000; and the person lodges his or her income tax return for that income year no later than: unless subparagraph (ii) applies β 30 June 2009; or if, before the commencement of this Act, the Commissioner deferred the time for lodgment of the return under section 388-55 in Schedule 1 to the Taxation Administration Act 1953 to a day later than 30 June 2009 β that later day. Exception for persons aged under 18 without employment income etc. (2) However, the person is not entitled to the tax bonus for the 2007-08 income year if: he or she is a prescribed person in relation to that income year and is not an excepted person in relation to that income year; and his or her assessable income for the income year does not include excepted assessable income." The term "prescribed person" is defined in s 4 as having the same meaning as in s 102AC of the Income Tax Assessment Act 1936 (Cth). An "excepted person" is also defined by reference to s 102AC11. 11 In s 102AC, "prescribed person" refers to a person aged less than 18 years at the end of a given income year who is not an excepted person. An "excepted person" is a minor who is engaged in a full-time occupation, or who receives certain allowances or pensions, or who suffers from certain types of disability. Section 6 sets out the amounts of the tax bonus payable to persons entitled to it for the 2007-08 income year. The amounts are: if the person's taxable income for that income year does not exceed if the person's taxable income for that income year exceeds $80,000 but does not exceed $90,000 β $600; or if the person's taxable income for that income year exceeds $90,000 but does not exceed $100,000 β $250." The obligation to pay the tax bonus is imposed on the Commissioner by s 7, which provides, inter alia: If the Commissioner is satisfied that a person is entitled to the tax bonus for the 2007-08 income year, the Commissioner must pay the person his or her tax bonus as soon as practicable after becoming so satisfied." It was submitted by the Solicitor-General of the Commonwealth that the entitlement created by s 5 did not give rise to a right of recovery by the person entitled to the tax bonus. It was the Commissioner's duty to pay under s 7 which would be enforceable by mandamus. In my opinion, however, a right of recovery would lie on the basis of the Commissioner's duty. And where, as in this case, the debt is liquidated an action in debt would lie12. Section 8 makes provision for recovery of overpayments in the event that a tax bonus is paid to a person not entitled to it or in the event that a person is paid more than the correct amount of his or her tax bonus. There is a general interest charge applicable by virtue of s 9 in the event that a person liable to repay an amount does not do so within the required time. The Commonwealth13 relied upon s 16 of the Taxation Administration Act as the provision effecting the appropriations necessary under ss 81 and 83 of the Constitution to authorise the payment of the bonuses. Section 16 provides, inter alia: 12 The Commonwealth v SCI Operations Pty Ltd (1998) 192 CLR 285 at 313 [65] per McHugh and Gummow JJ; [1998] HCA 20, citing Mallinson v Scottish Australian Investment Co Ltd (1920) 28 CLR 66 at 70; [1920] HCA 51 and Shepherd v Hills (1855) 11 Ex 55 at 67 [156 ER 743 at 747]. 13 Reference in these reasons to submissions by the Commonwealth refers to the common submissions put by the Commonwealth and the Commissioner. "(1) Where the Commissioner is required or permitted to pay an amount to a person by or under a provision of a taxation law other than: a general administration provision; or a provision prescribed for the purposes of this paragraph; the amount is payable out of the Consolidated Revenue Fund, which is appropriated accordingly. In this section, general administration provision means a provision of a taxation law that provides that the Commissioner has the general administration of the taxation law." The Explanatory Memorandum which accompanied the Bills for the Tax Bonus Act and the Consequential Amendments Act, under the heading "Context of the Bills", stated: "1.3 These Bills give effect to the Government's Nation Building and Jobs Plan announced on 3 February 2009. The plan was introduced to assist the Australian people deal with the most significant economic crisis since the Second World War and provide immediate economic stimulus to boost demand and support jobs. This measure, at a cost of $7.7 billion, provides financial support to around 8.7 million taxpayers." The constitutional framework Provisions of the Constitution central to the arguments advanced for and against validity were: Paragraphs of s 51 conferring express legislative power on the Parliament with respect to: trade and commerce with other countries, and among the States; taxation; but so as not to discriminate between States or parts of States; (xxix) external affairs; (xxxix) matters incidental to the execution of any power vested by this Constitution in the Parliament or in either House thereof, or in the Government of the Commonwealth, or in the Federal Judicature, or the Commonwealth." in any department or officer of The executive power of the Commonwealth conferred by s 61 of the Constitution: "The executive power of the Commonwealth is vested in the Queen and is exercisable by the Governor-General as the Queen's representative, and extends to the execution and maintenance of this Constitution, and of the laws of the Commonwealth." Section 81 which directs government revenues into a Consolidated Revenue Fund subject to appropriation in the following terms: "All revenues or moneys raised or received by the Executive Government of the Commonwealth shall form one Consolidated Revenue Fund, to be appropriated for the purposes of the Commonwealth in the manner and subject to the charges and liabilities imposed by this Constitution." Section 83 which provides: "No money shall be drawn from the Treasury of the Commonwealth except under appropriation made by law. But until the expiration of one month after the first meeting of the Parliament the Governor-General in Council may draw from the Treasury and expend such moneys as may be necessary for the maintenance of any department transferred to the Commonwealth and for the holding of the first elections for the Parliament." The Commonwealth seeks to support the validity of the provisions of the Tax Bonus Act by reference to the following broad propositions: The Tax Bonus Act read with s 16 of the Taxation Administration Act is supported by ss 81 and 51(xxxix) of the Constitution. In the alternative the Tax Bonus Act is supported by legislative powers identified as: Section 51(xxxix) of the Constitution read with ss 61, 81 and 83. The Trade and Commerce Power β Constitution, s 51(i). (iii) The External Affairs Power β Constitution, s 51(xxix). (iv) The Taxation Power β Constitution, s 51(ii). Jurisdiction The jurisdiction of this Court to entertain the application is derived from s 30 of the Judiciary Act which confers upon the Court original jurisdiction: in all matters arising under the Constitution or involving its interpretation". That statutory jurisdiction is conferred pursuant to the authority given to the Parliament by s 76(i) of the Constitution. The plaintiff's standing The Commonwealth accepted that Mr Pape had a sufficient interest and therefore standing to seek a declaration that the tax bonus payable to him is unlawful and void. However, it maintained that he did not have standing to seek a declaration that the Tax Bonus Act is invalid. In particular, it was submitted, he could not argue that the Tax Bonus Act was invalid in its application to persons who would receive a tax bonus of a greater amount than the tax that they paid given that he himself will not be in that class of persons. The submission was an unattractive one. It assumed that if Mr Pape were to succeed in establishing that the payment to him was unauthorised because the Tax Bonus Act was beyond power, there would be no consequence beyond his entitlement. It is difficult to imagine how the Commonwealth, faced with a finding by this Court that the Tax Bonus Act is invalid, could confine the application of that finding to Mr Pape and disregard it in its application to the remainder of those purportedly entitled under the Act. A declaration of invalidity of the Act would reflect the resolution of a question forming part of the matter in respect of which Mr Pape has invoked this Court's jurisdiction. Existing authorities as to standing in constitutional litigation would not prevent Mr Pape from obtaining the declaration he seeks as to the invalidity of the Act. There is a long history of judicial caution in relation to the standing of private individuals to challenge the validity of statutes absent some particular or special interest to be advanced by such challenge. The Supreme Court of the United States described the relation of taxpayer to federal government as "shared with millions of others" and "comparatively minute and indeterminable"14. The resolution of the standing issue in that case was related to the availability of equitable relief15 and limiting considerations flowing from the separation of 14 Massachusetts v Mellon 262 US 447 at 487 (1923). 15 262 US 447 at 487 (1923). legislative and judicial powers16. The decision was referred to and relied upon in Australia in the formulation of a "private or special interest" test for standing17. Earlier decisions of the Court have left some doubt about the standing of taxpayers to challenge taxing legislation. Absent exposure to a specific liability or obligation, taxpayers have been thought to lack the interest needed to support a challenge to the validity of the legislation18. Private challenges to spending arrangements have also encountered standing difficulties. In the AAP Case19, Mason J observed that the activity there under challenge created no cause of action in the individual citizen and that the individual taxpayer would have no interest at all in funds standing to the credit of the Consolidated Revenue Fund20. Similarly, in Attorney-General (Vict); Ex rel Black v The Commonwealth21, Gibbs J did not think that plaintiffs who were taxpayers and parents of children at government schools had a sufficiently "special interest in the subject matter" of an action to challenge the validity of grants made under s 96 for the purposes of funding church schools22. His Honour referred to an exception which appeared to have been recognised for constitutional cases by the Supreme Court of Canada in Thorson v Attorney- General of Canada23. He expressed no concluded opinion on that exception24. The question of standing is not readily detached from that of jurisdiction where the jurisdiction is federal. In Croome v Tasmania25, Gaudron, McHugh and Gummow JJ pointed to the conceptual awkwardness, if not impossibility, of 16 262 US 447 at 488 (1923). 17 Anderson v The Commonwealth (1932) 47 CLR 50 at 52; [1932] HCA 2. 18 Fishwick v Cleland (1960) 106 CLR 186; [1960] HCA 55 and Logan Downs Pty Ltd v Federal Commissioner of Taxation (1965) 112 CLR 177; [1965] HCA 16. 19 Victoria v The Commonwealth and Hayden (1975) 134 CLR 338; [1975] HCA 52. 20 (1975) 134 CLR 338 at 402. 21 (1981) 146 CLR 559; [1981] HCA 2. 22 (1981) 146 CLR 559 at 589. 23 [1975] 1 SCR 138. 24 (1981) 146 CLR 559 at 589-590. 25 (1997) 191 CLR 119; [1997] HCA 5. the attempted severance between questions going to the standing of the plaintiffs and those directed to the constitutional requirement that federal jurisdiction be exercised with respect to a "matter"26. Their Honours said27: "Where the issue is whether federal jurisdiction has been invoked with respect to a 'matter', questions of 'standing' are subsumed within that issue. The submission made in the present case, to the effect that a proceeding in which a citizen seeks a declaration of invalidity of a law of a State, by reason of the operation of the Constitution, is liable to be struck out unless there is attempted enforcement of the State law against the citizen, indicates the interdependence of the notions of 'standing' and of 'matter'." The interdependence of jurisdiction and standing was revisited in Bateman's Bay Local Aboriginal Land Council v Aboriginal Community Benefit Fund Pty Ltd28: "[I]n federal jurisdiction, questions of 'standing', when they arise, are subsumed within the constitutional requirement of a 'matter'. This emphasises the general consideration that the principles by which standing is assessed are concerned to 'mark out the boundaries of judicial power' whether in federal jurisdiction or otherwise." (footnotes omitted) Mr Pape's standing was conceded in relation to his challenge to the lawfulness of the payment to be made to him under the Tax Bonus Act. That concession concludes the question of his standing for the purpose of the relief he claimed. It was a necessary part of the disposition of the matter before the Court that it determine whether the Tax Bonus Act was valid. Declaratory relief which Mr Pape sought would reflect, were he to succeed, findings made by the Court leading to the conclusion that he was not entitled to the tax bonus payment. He would be entitled to a declaration of invalidity in relation to the Act reflecting that conclusion. There is no basis for the contention that he lacks standing to seek declaratory relief in relation to the validity of the Tax Bonus Act. It is necessary now to consider the so-called "appropriations power", which has been called "the spending power"29, under ss 81 and 83 of the 26 (1997) 191 CLR 119 at 132. 27 (1997) 191 CLR 119 at 132-133. 28 (1998) 194 CLR 247 at 262 [37] per Gaudron, Gummow and Kirby JJ; [1998] HCA 49. 29 For example, see Saunders, "The Development of the Commonwealth Spending Power", (1978) 11 Melbourne University Law Review 369. Constitution. Having regard to their text, their historical antecedents in the history of responsible government and their development at the Conventions of the 1890s, these provisions are better seen as parliamentary controls of the exercise of executive power to expend public moneys than as a substantive source of such power. It follows that the "purposes of the Commonwealth", for which appropriation may be authorised, are to be found in the provisions of the Constitution and statutes made under it which, subject to appropriation, confer substantive power to expend public moneys. Appropriation and responsible government β historical background Parliamentary control of executive expenditure of public funds had its origins in 17th century England. Quick and Garran, in their commentary on s 53 of the Constitution, referred to the resolution of the House of Commons on 3 June 167830: "That all aids and supplies, and aids to His Majesty in Parliament, are the sole gift of the Commons; and all bills for the granting of any such aids and supplies ought to begin with the Commons; and that it is the undoubted and sole right of the Commons to direct, limit, and appoint in such bills the ends, purposes, considerations, conditions, limitations, and qualifications of such grants, which ought not to be changed or altered by the House of Lords." Although the resolution was concerned with the relationship between the House of Commons and the House of Lords, it also reflected the assertion by the House of Commons of control as against the Executive of the expenditure of public moneys. The needs of government before the Revolution of 1688 were "principally supplied by various ordinary lucrative prerogatives inherent in the Crown, and which had existed time out of mind"31. After the Revolution the public revenue of the Crown was32: "dependent upon Parliament, and β¦ derived either from annual grants for specific public services, or from payments already secured and 30 Quick and Garran, The Annotated Constitution of the Australian Commonwealth, 31 Chitty, A Treatise on the Law of the Prerogatives of the Crown, (1820) at 200. 32 Erskine May, A Treatise on the Law, Privileges, Proceedings and Usage of Parliament, 10th ed (1893) at 554. appropriated by Acts of Parliament, and which are commonly known as charges upon the Consolidated Fund". The Bill of Rights 1689 provided, inter alia: "That levying money for or to the use of the Crown by pretence of prerogative, without grant of Parliament, for longer time, or in other manner than the same is or shall be granted, is illegal." The concept of a Consolidated Revenue Fund dates back to the 18th century. Before its emergence particular taxes were assigned to particular items of expenditure. There was some movement to partial consolidation. Blackstone wrote of a history of distinct funds set up to receive the products of various taxes and the reduction of the number of those funds to three33. In 1787 a Consolidated Fund was established by statute34 "into which shall flow every stream of the public revenue, and from whence shall issue the supply for every public service"35. Drafts made upon the Consolidated Fund were based upon resolutions of a parliamentary ways and means committee. The resolutions were the basis for36: "sessional Consolidated Fund Acts, and finally the Appropriation Act, which endows those resolutions with complete legal effect; and upon receipt of the order from the sovereign, which gives final validity to a supply grant, the treasury makes the issues to meet those grants out of the Consolidated Fund." The right of supreme control over taxation with the correlative right to control expenditure was regarded as the "most ancient, as well as the most valued, prerogative of the House of Commons"37. The prohibition upon raising taxes without parliamentary authority would be nugatory if the proceeds, even of 33 Blackstone, Commentaries on the Laws of England, (1765), bk 1, ch 8 at 318. 34 27 Geo III, c 13. 35 Erskine May, A Treatise on the Law, Privileges, Proceedings and Usage of Parliament, 10th ed (1893) at 558. 36 Erskine May, A Treatise on the Law, Privileges, Proceedings and Usage of Parliament, 10th ed (1893) at 558. 37 Durell, The Principles and Practice of the System of Control over Parliamentary Grants, (1917) at 3 citing Todd, Parliamentary Government in England, (1892), vol 2 at 196. legal taxes, could be expended at the will of the sovereign38. The principle that the Executive draws money from Consolidated Revenue only upon statutory authority is central to the idea of responsible government. The principle of parliamentary control of public expenditure was recognised by the Privy Council in Auckland Harbour Board v The King39. Viscount Haldane said40: "For it has been a principle of the British Constitution now for more than two centuries β¦ that no money can be taken out of the consolidated Fund into which the revenues of the State have been paid, excepting under a distinct authorization from Parliament itself. The days are long gone by in which the Crown, or its servants, apart from Parliament, could give such an authorization or ratify an improper payment. Any payment out of the consolidated fund made without Parliamentary authority is simply illegal and ultra vires, and may be recovered by the Government if it can, as here, be traced." Emerging from the Bill of Rights 1689 and the common law in England were what have been described as "three fundamental constitutional principles" supporting parliamentary control of finance41: The imposition of taxation must be authorised by Parliament. (ii) All Crown revenue forms part of the Consolidated Revenue Fund. (iii) Only Parliament can authorise the appropriation of money from the Consolidated Revenue Fund. These principles were imported into the Australian colonies upon their achievement of responsible government. A Consolidated Revenue Fund was established for each of them. The principles operate today in all States and Territories, albeit they are not expressly referred to in all of their Constitutions42. 38 Durell, The Principles and Practice of the System of Control over Parliamentary Grants, (1917) at 3. 40 [1924] AC 318 at 326-327. 41 Carney, The Constitutional Systems of the Australian States and Territories, (2006) 42 For more specific references see: Australian Capital Territory (Self-Government) Act 1988 (Cth), s 58(1); Constitution Act 1902 (NSW), s 39(1); Northern Territory (Footnote continues on next page) They are central to the system of responsible ministerial government which "prior to the establishment of the Commonwealth of Australia in 1901 β¦ had become one of the central characteristics of our polity"43. The Executive in English and Australian constitutional history has on occasions expended public moneys without prior parliamentary appropriation44. Professor Keith wrote in 193345: "The practice is far from rare, but in some cases it has been mitigated by legislation which permits expenditure either of sums up to a fixed amount or sums based on the expenditure authorised for the previous year pending Parliamentary sanction β¦ The Governor-General's position in these matters is governed by the consideration that he cannot, unless in a very flagrant case of illegality, refuse to accept the assurance of ministers that funds must be provided to carry on the administration." In the context of executive agreements involving commitments to expenditure, but not involving actual expenditure, he accepted that ministers could act and obtain an appropriation later on and described as "very dubious" the suggestion in Colonial Ammunition Co that a commitment by the Executive not previously (Self-Government) Act 1978 (Cth), s 45(1); Constitution of Queensland 2001 (Q), ss 64-66; Constitution Act 1934 (SA), ss 60, 73B; Constitution Act 1934 (Tas), s 36; Constitution Act 1975 (Vic), ss 62-65, 89-93; Constitution Act 1889 (WA), 43 Victorian Stevedoring and General Contracting Co Pty Ltd and Meakes v Dignan (1931) 46 CLR 73 at 114; [1931] HCA 34 quoted with approval in Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 558; [1997] HCA 25. For reference to the historical roots of ss 81 and 83 in British constitutional law and practice see also Northern Suburbs General Cemetery Reserve Trust v The Commonwealth (1993) 176 CLR 555 at 575 per Mason CJ, Deane, Toohey and Gaudron JJ, 580 per Brennan J, 591 per Dawson J, 597-598 per McHugh J; [1993] HCA 12. 44 Campbell, "Parliamentary Appropriations", (1971) 4 Adelaide Law Review 145 at 150, citing instances dating back to 1860 in England and 1868 in New South Wales. As to the various devices used to circumvent the appropriation requirement in Victoria and New South Wales in the 1860s and 1870s see Waugh, "Evading Parliamentary Control of Government Spending: Some Early Case Studies", (1998) 9 Public Law Review 28. 45 Keith, The Constitutional Law of the British Dominions, (1933) at 244. authorised by the Parliament could not be put right by a subsequent appropriation46. In New South Wales v Bardolph47, this Court upheld the validity of a contractual obligation undertaken by the Government of New South Wales without the benefit of a current parliamentary appropriation. Dixon J said48: "It is a function of the Executive, not of Parliament, to make contracts on behalf of the Crown. The Crown's advisers are answerable politically to Parliament for their acts in making contracts. Parliament is considered to retain the power of enforcing the responsibility of the Administration by means of its control over the expenditure of public moneys. But the principles of responsible government do not disable the Executive from acting without the prior approval of Parliament, nor from contracting for the expenditure of moneys conditionally upon appropriation by Parliament and doing so before funds to answer the expenditure have actually been made legally available." He also said, however, that "all obligations to pay money undertaken by the Crown are subject to the implied condition that the funds necessary to satisfy the obligation shall be appropriated by Parliament"49. This did not qualify the legal requirements of s 83. As Brennan J in Northern Suburbs General Cemetery Reserve Trust v The Commonwealth said50: "The actual withdrawal of money from the CRF requires a prior valid appropriation." In Australian Woollen Mills Pty Ltd v The Commonwealth51 the Court, relying upon Bardolph, regarded it as "well settled" that judgment may be given against 46 Keith, The Constitutional Law of the British Dominions, (1933) at 245, citing The Commonwealth v Colonial Ammunition Co Ltd (1924) 34 CLR 198; [1924] HCA 5. 47 (1934) 52 CLR 455. 48 (1934) 52 CLR 455 at 509. See also at 498 per Rich J, 502 per Starke J, 523 per 49 (1934) 52 CLR 455 at 508 citing New South Wales v The Commonwealth [No 1] (1932) 46 CLR 155 at 176; [1932] HCA 7. 50 (1993) 176 CLR 555 at 581. 51 (1954) 92 CLR 424; [1954] HCA 20. the Crown on a contract although that judgment cannot be enforced in the absence of provision of funds by an Act of Parliament52. The phenomenon of the so-called standing appropriation may be linked to the practical exigencies that in the past gave rise to expenditure without prior parliamentary authority. It is useful briefly to mention the two classes of appropriation made as a matter of practice. Appropriations fall into two classes, annual and special (or standing) appropriations. The annual appropriations comprise the budget. The standing appropriations are permanent and provide for appropriation from time to time. They were described by Quick and Garran as "payments which it is not desirable to make subject to the annual vote of Parliament"53. Stawell CJ characterised them as "a voluntary surrender by Parliament of what is supposed to be its most important power"54. The Senate Standing Committee on Finance and Public Administration reported in 2007 that the great majority of Commonwealth funds are now provided by means of special appropriations. In 2002-03 they represented more than 80% of all appropriations drawings for the year55. Professor Lindell in a submission to the Committee described "the modern reality β¦ that Parliament is gradually losing control over the expenditure of public funds. Appropriations are increasingly permanent rather than annual and they are also framed in 52 (1954) 92 CLR 424 at 455. See also Vass v Commonwealth (2000) 96 FCR 272 at 287-288 [24]-[25] and generally Seddon, "The Interaction of Contract and Executive Power", (2003) 31 Federal Law Review 541. 53 Quick and Garran, The Annotated Constitution of the Australian Commonwealth, 54 Alcock v Fergie (1867) 4 W W & A'B (L) 285 at 319. 55 Australia, Senate, Standing Committee on Finance and Public Administration, Transparency and Accountability of Commonwealth Public Funding and Expenditure, March 2007 at 15. 56 Australia, Senate, Standing Committee on Finance and Public Administration, Transparency and Accountability of Commonwealth Public Funding and Expenditure, March 2007 at 15; see also the discussion in Lawson, "Re- Invigorating the Accountability and Transparency of the Australian Government's Expenditure", (2008) 32 Melbourne University Law Review 879, particularly at 916 and 921. The history of executive and parliamentary practice does not suggest any legal qualification in existence at the time of federation, or subsequently under the Constitution, of the well established proposition, reflected in the law of Great Britain and its colonies, that parliamentary appropriation conditions the It is not submitted in the present case that there is any basis upon which the executive power of the Commonwealth would extend to the expenditure of public moneys without parliamentary appropriation58. the It was Commonwealth's contention that the requisite appropriation had been made. Appropriation in the Convention Debates The 1891 draft Bill for the Constitution contained two provisions directly material to appropriations. They appeared in Ch IV of the draft entitled "Finance and Trade". Clause 1 of Ch IV provided, in language foreshadowing that of s 81: "All duties, revenues, and moneys, raised or received by the Executive this Government of the Commonwealth, under Constitution, shall form one Consolidated Revenue Fund, to be appropriated for the Public Service of the Commonwealth in the manner and subject to the charges provided by this Constitution." the authority of Clause 3 provided: "No money shall be drawn from the Treasury of the Commonwealth except under appropriations made by law." This limitation set out the terms of what was to become the first sentence in s 83. Clause 1 was not discussed at the 1891 Sydney Convention. Clause 3 was discussed and agreed to. In the course of debate an amendment was proposed to cl 3 which would have added the words "and for purposes authorised by this Constitution"59. Mr Thynne, who proposed the amendment, had originally 57 Campbell, "Parliamentary Appropriations", (1971) 4 Adelaide Law Review 145 at 150 and see Australian Alliance Assurance Co Ltd v John Goodwyn, the Insurance Commissioner [1916] St R Qd 225 at 252-253 per Lukin J. 58 As to other provisions of the Constitution which may authorise expenditure directly see Lawson, "Re-Invigorating the Accountability and Transparency of the Australian Government's Expenditure", (2008) 32 Melbourne University Law Review 879 at 895 fn 135. 59 Official Record of the Debates of the Australasian Federal Convention, (Sydney), 7 April 1891 at 788-789. intended to incorporate it in the precursor of s 51 with a view to "restricting the powers of the federal parliament for the appropriation of money absolutely to the purposes authorised by this constitution". He withdrew the amendment at the suggestion of Sir Samuel Griffith with a view to introducing it into cl 3. The amendment was opposed and defeated. Sir Samuel Griffith commented that the words in cl 1 already contained "all the limitations we can really insert, however many words we may use to express them"60. Clause 79 of the draft Bill considered by the 1897 Adelaide Convention was in the same terms as cl 1 of Ch IV of the 1891 draft Bill. It was amended to omit the words "duties" and "moneys"61. The object of the amendment was to prevent loan moneys being taken into the revenue for the purposes of the Commonwealth. However, later in the drafting process, the word "moneys" was brought back. While Quick and Garran were unable to point to any reason for its reinsertion, they pointed out that it was the "universal constitutional practice, not only of Great Britain, but of all the British colonies, to keep loan funds distinct from revenue funds" and that there was no intention evidenced at the Convention of departing from that established usage62. Proposed cl 81 of the 1897 draft, corresponding to cl 3 of Ch IV of the 1891 draft, read: "No money shall be drawn from the Treasury of the Commonwealth except under appropriation made by law and by warrant countersigned by the Chief Officer of Audit of the Commonwealth." The clause was agreed to in that form63. By the close of the 1897 Adelaide Convention, cl 79 of the draft there considered had been renumbered as cl 81. That clause became s 81 of the 60 Official Record of the Debates of the Australasian Federal Convention, (Sydney), 7 April 1891 at 789. 61 Official Record of the Debates of the Australasian Federal Convention, (Adelaide), 19 April 1897 at 835. 62 Quick and Garran, The Annotated Constitution of the Australian Commonwealth, 63 Official Record of the Debates of the Australasian Federal Convention, (Adelaide), 19 April 1897 at 835. Constitution. An amendment proposed in Melbourne in 1898 to add back the word "moneys" after "revenues" was unsuccessful64. Clause 81 of the draft Bill considered in 1897 became cl 83 of the 1898 draft Bill. It foreshadowed s 83 of the Constitution. It was agreed to at the 1898 Melbourne Convention with two amendments. The first omitted the words "and by warrant countersigned by the Chief Officer of Audit of the Commonwealth"65. The second amendment foreshadowed the second paragraph of s 83 as set out in the Constitution. That amendment was itself further amended on the motion of Edmund Barton and the clause agreed to in its present form66. An amendment to cl 81, substituting the words "Public Service" with the word "purposes", was prepared by the Drafting Committee and ordered to be embodied in the draft Bill pro forma and printed on 1 March 189867. Dixon J referred to the change in the Pharmaceutical Benefits Case when saying of "it is a provision in common constitutional form substituting for the usual words 'public service' the word 'purposes' of the Commonwealth only because they are more appropriate in a Federal form of government". Notwithstanding the submission on behalf of the Attorney-General of New South Wales to the contrary, the words "purposes of the Commonwealth" must be given their full amplitude and not read down on the assumption that they are simply another way of saying "public service". The terms of ss 81 and 83 have been contrasted in this Court with the equivalent provisions in the Constitution of the United States, which were known 64 Official Record of the Debates of the Australasian Federal Convention, (Melbourne), 14 February 1898 at 900. 65 Official Record of the Debates of the Australasian Federal Convention, (Melbourne), 14 February 1898 at 901-907. Note: a printing error on p 907 incorrectly indicates that the amendment was negatived. 66 Official Record of the Debates of the Australasian Federal Convention, (Melbourne), 4 March 1898 at 1899. 67 Official Record of the Debates of the Australasian Federal Convention, (Melbourne), 1 March 1898 at 1721. 68 Attorney-General (Vict) v The Commonwealth (1945) 71 CLR 237 at 271; [1945] HCA 30. to the framers of the Commonwealth Constitution. Article I, Β§8, cl 1 of the United States Constitution confers upon the Congress the power: "To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States". Article I, Β§9, cl 7 provides: "No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law β¦" There is nothing in the consideration at the Convention Debates, of what became ss 81 and 83 of the Constitution, to suggest that they were intended as other than parliamentary controls of public funds and of executive expenditure in accordance with established principles of responsible government. As Professor Harrison Moore wrote in 1910, the Constitution in ss 81 and 83 "adopts the results of English and Colonial experience"69. This experience was reflected in the observation of Griffith CJ in the Surplus Revenue Case70: "The appropriation of public revenue is, in form, a grant to the Sovereign, and the Appropriation Acts operate as an authority to the Treasurer to make the specified disbursements. A contractual obligation may or may not be added by some statutory provision or by authorized The agreement, but Appropriation Act does, however, operate as a provisional setting apart or diversion from the Consolidated Revenue Fund of the sum appropriated by the Act." it does not arise from the appropriation. In similar vein, Isaacs J remarked71: "'Appropriation of money to a Commonwealth purpose' means legally segregating it from the general mass of the Consolidated Fund and dedicating it to the execution of some purpose which either the 69 Harrison Moore, The Constitution of The Commonwealth of Australia, 2nd ed 70 The State of New South Wales v The Commonwealth (1908) 7 CLR 179 at 190-191; [1908] HCA 68. 71 (1908) 7 CLR 179 at 200. Constitution has itself declared, or Parliament has lawfully determined, shall be carried out." In his judgment in the Wool Tops Case72, Isaacs J relied upon the British constitutional history. The Court there held that the Executive of the Commonwealth had no power, absent parliamentary authorisation, to enter into agreements involving the exaction of fees or the payment of public moneys. Some of the reasoning has been overtaken by later cases about the scope of the executive power73. Relevantly to parliamentary control of taxation and "For centuries under responsible government, as any history will tell us, the insistence of the House of Commons on control of taxation was the basis of popular liberty. That alone, however, would have been of little use but for the accompanying power over appropriation. The Report of the Committee on Public Moneys of 1857 (App 3, p 568) said: 'The chain of historical evidence undeniably proves that a previous and stringent appropriation, often minute and specific, has formed an essential part of the British Constitution.'" The last quoted sentence was taken from Durell on Parliamentary Grants75. It was repeated by Isaacs and Rich JJ in The Commonwealth v Colonial Ammunition Co Ltd76, which also involved an executive agreement. They said of the appropriation requirement77: "It β¦ neither betters nor worsens transactions in which the Executive engages within its constitutional domain, except so far as the declared willingness of Parliament that public moneys should be applied and that 72 The Commonwealth v Colonial Combing, Spinning and Weaving Co Ltd (1922) 31 CLR 421; [1922] HCA 62. 73 For example, Barton v The Commonwealth (1974) 131 CLR 477; [1974] HCA 20; New South Wales v The Commonwealth ("the Seas and Submerged Lands Case") (1975) 135 CLR 337; [1975] HCA 58; Johnson v Kent (1975) 132 CLR 164; [1975] HCA 4; Davis v The Commonwealth (1988) 166 CLR 79; [1988] HCA 63. 74 (1922) 31 CLR 421 at 449. 75 Durell, The Principles and Practice of the System of Control over Parliamentary Grants, (1917) at 3. 76 (1924) 34 CLR 198 at 224. 77 (1924) 34 CLR 198 at 224-225. specified funds should be appropriated for such a purpose is a necessary legal condition of the transaction. It does not annihilate all other legal conditions." That view supports the conclusion that appropriation is a necessary condition which takes its place with other conditions and limitations, derived from statute or otherwise, upon the executive power to spend. The history does not support a view that the requirement for parliamentary appropriation is itself a substantive source of power to expend public money. The appropriation of moneys β s 81 Consideration of s 81 requires an examination of its text, albeit that examination may be informed by the history already outlined. The section directs that revenues or moneys raised or received by the Executive Government of the Commonwealth "form one Consolidated Revenue Fund". It requires that those revenues or moneys be appropriated in the manner and subject to the charges and liabilities imposed by the Constitution. It also requires that they be appropriated for the purposes of the Commonwealth. These are not words of legislative power in the ordinary sense. They are words of constraint. The manner of appropriation is shortly specified in s 83 and requires that it be made "by law". That can be taken as a reference to appropriation by a statute enacted by the Parliament of the Commonwealth, or otherwise authorised by the Constitution78. The textual basis for the proposition that the appropriation provisions of the Constitution should be elevated into a source of substantive power is elusive. In order to ascertain the correctness or otherwise of that proposition it is necessary to have regard to the way in which the provisions have been construed previously in this Court. Section 81 was invoked in aid of Commonwealth power in the Clothing Factory Case79. The majority of the Court in that case held that the impugned extension of the operation of a Commonwealth clothing factory to supply clothing to civilians was authorised by the Defence Act 1903 (Cth) and supported 78 It is not necessary for present purposes to consider whether and to what extent particular provisions of the Constitution authorise expenditure in their own terms; see Lawson, "Re-Invigorating the Accountability and Transparency of the Australian Government's Expenditure", (2008) 32 Melbourne University Law Review 879 at 895 fn 135. 79 Attorney-General (Vict) v The Commonwealth (1935) 52 CLR 533; [1935] HCA by the defence power80. Only Starke J, who dissented, considered whether s 81 could be a source of the necessary power. After contrasting s 81 with Art I, Β§8, cl 1 of the United States Constitution he concluded81: to appropriate moneys "The power the Commonwealth' does not, in my opinion, enable the Commonwealth to appropriate such moneys to any purposes it thinks fit, but restricts that power to the subjects assigned to, or departments or matters placed under the control of the Federal Government by the Constitution." the purposes of 'for In Australian Woollen Mills82 the Court referred in passing to the basis upon which subsidies were paid to wool manufacturers under the National Security (Wool) Regulations. The Court said of s 81 that it "authorizes the appropriation of the revenues and moneys of the Commonwealth for the purposes of the Commonwealth"83. The subsidies could not be described as bounties under s 51(iii) because they were not payable on the production or export of goods. The Court continued84: "The justification, however, for the appropriation of moneys for paying subsidies would probably, if challenged, be sought in the defence power, which is conferred by s 51(vi)." But no contention that there was a want of power to support the subsidy having been raised, the matter was not pursued further. This passage in the judgment in Australian Woollen Mills seems to suggest that while the Court regarded s 81 as the source of parliamentary authority for appropriation, the power to expend the money had to be found elsewhere. These decisions, however, did not foreshadow a consensus on the Court as to the extent of the term "purposes of the Commonwealth" in s 81, which was central to the judgments in the Pharmaceutical Benefits Case85 and the AAP 80 (1935) 52 CLR 533 at 558 per Gavan Duffy CJ, Evatt and McTiernan JJ, 563 per 81 (1935) 52 CLR 533 at 568. 82 (1954) 92 CLR 424. 83 (1954) 92 CLR 424 at 454. 84 (1954) 92 CLR 424 at 454. 85 (1945) 71 CLR 237. Case86. In the Pharmaceutical Benefits Case a majority of this Court held that the Pharmaceutical Benefits Act 1944 (Cth), which appropriated money to pay chemists for medicines supplied to the public and imposed associated duties on them and medical practitioners, was not authorised by s 81 or the incidental power in s 51(xxxix)87. Opinions about the construction of s 81 varied among the members of the Court. A wide view was adopted by Latham CJ and by McTiernan J, the latter in dissent. Latham CJ held that the Commonwealth Parliament has "a general, and not a limited, power of appropriation of public moneys" and that it was for the Parliament to determine whether a particular purpose was a purpose of the Commonwealth88. This treated s 81, in effect, as a substantive spending power, albeit it was held not to authorise "legislative control of matters relating to any such objects in respect of which there is no other grant of legislative power"89. On this latter basis the impugned Act was beyond power90. Dixon J, with whom Rich J agreed91, referred to the "power of expenditure" under s 81 and gave it a wide construction although not as wide as that of the Chief Justice. He said92: "Even upon the footing that the power of expenditure is limited to matters to which the Federal legislative power may be addressed, it necessarily includes whatever is incidental to the existence of the Commonwealth as a state and to the exercise of the functions of a national government. These are things which, whether in reference to the external or internal concerns of government, should be interpreted widely and applied according to no narrow conception of the functions of the central government of a country in the world of to-day." 86 (1975) 134 CLR 338. 87 (1945) 71 CLR 237 at 263 per Latham CJ, 266 per Starke J, 272 per Dixon J (Rich J agreeing at 264), 275 per McTiernan J (dissenting), 282 per Williams J. 88 (1945) 71 CLR 237 at 254, 256. 89 (1945) 71 CLR 237 at 256. 90 (1945) 71 CLR 237 at 263. 91 (1945) 71 CLR 237 at 264. 92 (1945) 71 CLR 237 at 269. Despite the reference to the "power of expenditure", the passage quoted is consistent with the view that "the purposes of the Commonwealth" are to be found in laws made by the Parliament and in the discharge by the Executive of the powers otherwise conferred upon it by the Constitution and particularly by s 61. As his Honour later said, "s 81 has little or no bearing upon the matter"93. In the event Dixon J did not express a concluded view on the construction adopted by Latham CJ and McTiernan J. It was sufficient for his purposes that s 81 was not to be equated to Art I, Β§8, cl 1 of the United States Constitution. To do so would import a "conception foreign" to the provisions in the Australian Constitution94. He said95: "The words of our Constitution are 'purposes of the Commonwealth' and whether ultimately they are, or are not, held to be consistent with a power of expenditure unrestrained in point of subject matter or purpose, they cannot be regarded as doing the work which the words 'general welfare' have been required to do in the United States. That is all, I think, that need be decided in the present case about the power of expenditure under the Commonwealth Constitution." Importantly he added that, in deciding what appropriation laws might validly be enacted, it would be necessary to remember the position occupied by a national government and "to take no narrow view"96. The "basal consideration", he said in a passage that would be described 43 years later as a "Delphic counsel"97, "would be found in the distribution of powers and functions between the Commonwealth and the States"98. Starke J, like Dixon J, rejected the equation of s 81 to Art I, Β§8, cl 1 of the United States Constitution, and said99: 93 (1945) 71 CLR 237 at 271. 94 (1945) 71 CLR 237 at 270. 95 (1945) 71 CLR 237 at 271. 96 (1945) 71 CLR 237 at 271. 97 Australia, Final Report of the Constitutional Commission, (1988), vol 2 at 832 98 (1945) 71 CLR 237 at 271-272. Similar considerations were referred to by Evatt J, albeit in a different context, in Federal Commissioner of Taxation v Official Liquidator of E O Farley Ltd (1940) 63 CLR 278 at 319-320; [1940] HCA 13. 99 (1945) 71 CLR 237 at 265-266. "[t]he purposes of the Commonwealth are those of an organized political body, with legislative, executive and judicial functions, whatever is incidental thereto, and the status of the Commonwealth as a Federal Government." The Pharmaceutical Benefits Act was "beyond any purpose of Commonwealth"100: the "No legislative, executive or judicial function or purpose of the Commonwealth can be found which supports it, and it cannot be justified because of the existence of the Commonwealth or its status as a Federal Government." An implication in the reasoning of Starke J was that an appropriation could be justified for the exercise of an executive function. Williams J regarded "the purposes of the Commonwealth" as words of limitation101. The purposes had to be found "within the four corners of the Constitution". The Pharmaceutical Benefits Act could not be supported on that basis102. At issue in the AAP Case103 was the validity of an appropriation of money for the Australian Assistance Plan, under which grants were to be made to Regional Councils for Social Development programs. Six of the Justices were evenly divided on the validity of the legislation104. Stephen J held that neither the State nor its Attorney-General had standing to impugn the legislation105. The challenge therefore failed on two different bases. 100 (1945) 71 CLR 237 at 266. 101 (1945) 71 CLR 237 at 282. 102 (1945) 71 CLR 237 at 282. 103 (1975) 134 CLR 338. 104 (1975) 134 CLR 338 at 364 per Barwick CJ, 378 per Gibbs J, 401 per Mason J (against validity); 370 per McTiernan J, 413 per Jacobs J, 425 per Murphy J (in favour of validity). 105 (1975) 134 CLR 338 at 390-391. Barwick CJ held that the words "purposes of the Commonwealth" in s 81 were words of limitation and not a matter for the Parliament to determine106. They were not confined to the heads of legislative power in ss 51 and 52. Some powers, legislative and executive, might come from the formation of the Commonwealth as a polity and its emergence as an international state. The extent of powers inherent in the fact of nationhood and of international personality had not been fully explored. They included the power to explore on foreign lands or seas or in areas of scientific knowledge or technology107. But to say of a matter that it was of national interest or concern did not attract power to the Commonwealth. Recognising that Australia has but one economy and that the economy of the nation is of national concern, Barwick CJ said108: "But no specific power over the economy is given to the Commonwealth. Such control as it exercises on that behalf must be effected by indirection through taxation, including customs and excise, banking, including the activities of the Reserve Bank and the budget, whether it be in surplus or in deficit. The national nature of the subject matter, the national economy, cannot bring it as a subject matter within Commonwealth power." The federal distribution of powers was an important element in the reasoning of the Chief Justice, who said in that connection109: "However desirable the exercise by the Commonwealth of power in affairs truly national in nature, the federal distribution of power for which the Constitution provides must be maintained." McTiernan J adhered to the wide view he and Latham CJ had adopted in the Pharmaceutical Benefits Case110. Gibbs J considered that the power of appropriation was not general and unlimited but could only be exercised for purposes which the Commonwealth could "lawfully put into effect in the exercise of the powers and functions conferred upon it by the Constitution"111. They were purposes for which the Commonwealth had power to make laws but were not limited to those mentioned in ss 51 and 52. They could include "matters 106 (1975) 134 CLR 338 at 360. 107 (1975) 134 CLR 338 at 362. 108 (1975) 134 CLR 338 at 362. 109 (1975) 134 CLR 338 at 364. 110 (1975) 134 CLR 338 at 369. 111 (1975) 134 CLR 338 at 373-374. incidental to the existence of the Commonwealth as a state and to the exercise of its powers as a national government"112. Stephen J's refusal to accord standing to the State of Victoria to challenge the appropriation in the AAP Case rested on the basis that what was complained of was "not truly an instance of law making but rather an example of the exercise of fiscal control over the executive by the legislature"113. This was consistent with the view, albeit he did not articulate it, that s 81 was not a source of substantive legislative power. the wide construction of "purposes of the Commonwealth" in s 81114. However, like Latham CJ in the Pharmaceutical Benefits Case, he held that the section was not a source of "legal authority for the Commonwealth's engagement in the activities in connexion with which the moneys are to be spent"115. He referred to s 51(xxxix) of the Constitution and its conjunction with s 61, relied upon in Burns v Ransley116 and R v Sharkey117, and added118: "Secondly, the Commonwealth enjoys, apart from its specific and enumerated powers, certain implied powers which stem from its existence and its character as a polity β¦ So far it has not been suggested that the implied powers extend beyond the area of internal security and protection of the State against disaffection and subversion. But in my opinion there is to be deduced from the existence and character of the Commonwealth as a national government and from the presence of ss 51(xxxix) and 61 a capacity to engage in enterprises and activities peculiarly adapted to the government of a nation and which cannot otherwise be carried on for the benefit of the nation." The establishment of the Commonwealth Scientific and Industrial Research Organisation was an exercise of that national governmental capacity by the 112 (1975) 134 CLR 338 at 375. 113 (1975) 134 CLR 338 at 390. 114 (1975) 134 CLR 338 at 396. 115 (1975) 134 CLR 338 at 396. 116 (1949) 79 CLR 101; [1949] HCA 45. 117 (1949) 79 CLR 121; [1949] HCA 46. 118 (1975) 134 CLR 338 at 397. Commonwealth. So too was expenditure of money on inquiries, investigation and advocacy in matters of public health. Mason J said119: "No doubt there are other enterprises and activities appropriate to a national government which may be undertaken by the Commonwealth on behalf of the nation. The functions appropriate and adapted to a national As time unfolds, as government will vary from time to time. circumstances and conditions alter, it will transpire that particular enterprises and activities will be undertaken if they are to be undertaken at all, by the national government." Mason J added the necessary qualification that the executive power could not, in this way, be given a wide operation effecting a radical transformation in what had hitherto been thought to be the Commonwealth's area of responsibility under the Constitution. His Honour said that the Commonwealth could not thereby be empowered to carry out programs standing outside acknowledged heads of legislative power, simply because they could conveniently be formulated and administered by the national government120. Jacobs J linked the appropriation provisions to the executive power under s 61 and the incidental power121: "Within the words 'maintenance of this Constitution' appearing in s 61 lies the idea of Australia as a nation within itself and in its relationship with the external world, a nation governed by a system of law in which the powers of government are divided between a government representative of all the people of Australia and a number of governments each representative of the people of the various States." It was within the competence of the Parliament to legislate on any matter within the competence of the Executive under s 61, including the exercise of that area of the prerogative which attached to the government of Australia. It did not follow that legislation was necessary before a prerogative power could be exercised122. As to the term "purposes of the Commonwealth" in s 81, Jacobs J adopted what he perceived as the majority view in the Pharmaceutical Benefits Case123, 119 (1975) 134 CLR 338 at 397-398. 120 (1975) 134 CLR 338 at 398. 121 (1975) 134 CLR 338 at 406. 122 (1975) 134 CLR 338 at 406. 123 (1975) 134 CLR 338 at 412. namely that the power of appropriation is limited by the nature and purposes of the government of the Commonwealth, which not only fall within the subject matter of general or particular power prescribed in the Constitution but may include other purposes adhering fully to Australia as a nation externally and internally sovereign. He said124: "The growth of national identity results in a corresponding growth in the area of activities which have an Australian rather than a local flavour. Thus, the complexity and values of a modern national society result in a need for co-ordination and integration of ways and means of planning for that complexity and reflecting those values. Inquiries on a national scale are necessary and likewise planning on a national scale must be carried out. Moreover, the complexity of society, with its various interrelated needs, requires co-ordination of services designed to meet those needs. Research and exploration likewise have a national, rather than a local, flavour." Murphy J took the same wide view of the purposes for which public moneys could be appropriated under ss 81 and 83 as adopted by Latham CJ and McTiernan J in the Pharmaceutical Benefits Case125. As Professor Cheryl Saunders wrote in a helpful paper in the Melbourne University Law Review in 1978, "no clear constitutional principles emerged" from the Pharmaceutical Benefits Case and the AAP Case "did little to clarify the uncertainty" which has "bedevilled" the scope of the spending power since federation126. In Davis v The Commonwealth127, Mason CJ, Deane and Gaudron JJ adverted to the "long-standing controversy about the meaning of 'purposes of the Commonwealth' in s 81"128. Taking the judgments of McTiernan, Mason, Jacobs and Murphy JJ in the AAP Case together, they treated that case as authority for the proposition that "the validity of an appropriation act is not ordinarily susceptible to effective legal challenge"129. It was unnecessary in that case to 124 (1975) 134 CLR 338 at 412-413. 125 (1975) 134 CLR 338 at 417, 421. 126 Saunders, "The Development of the Commonwealth Spending Power", (1978) 11 Melbourne University Law Review 369 at 372, 373, 401 and 403. 127 (1988) 166 CLR 79. 128 (1988) 166 CLR 79 at 95. 129 (1988) 166 CLR 79 at 96. consider whether "extraordinary circumstances" might exist in which an appropriation could be susceptible to such challenge130. Professor Leslie Zines has made the fair point that it is doubtful whether the proposition extracted by their Honours in Davis from the AAP Case would ordinarily be regarded as its ratio decidendi. Nor was there an indication of what might amount to "extraordinary circumstances"131. The nature and purpose of s 81 was again considered in Northern Suburbs General Cemetery Reserve Trust132. Mason CJ, Deane, Toohey and Gaudron JJ, in a joint judgment, said of s 81 that it must be read with s 83. Their Honours said of s 83133: "That section expresses the principle that parliamentary authority is required for the expenditure of any moneys by the Crown." (emphasis in original) In similar vein, Brennan J said134: "What s 81 is concerned to do is to identify the moneys which form the CRF and to prevent their application otherwise than in accordance with an appropriation by the Parliament for the purposes of the Commonwealth." His Honour, referring to the passage extracted earlier in these reasons from the judgment of Griffith CJ in the Surplus Revenue Case135, said that "[a]n appropriation is not a withdrawal of money from the CRF"136. In the same case, McHugh J expressed the view, to which I will presently return, that137: 130 (1988) 166 CLR 79 at 96. 131 Zines, The High Court and the Constitution, 5th ed (2008) at 354. 132 (1993) 176 CLR 555. 133 (1993) 176 CLR 555 at 572. 134 (1993) 176 CLR 555 at 580. 135 (1908) 7 CLR 179 at 190; see [78] above. 136 (1993) 176 CLR 555 at 581. 137 (1993) 176 CLR 555 at 601. "Neither s 81 nor s 83 of the Constitution gives any express power to appropriate money for Commonwealth purposes. However, the power to appropriate is a necessary incident of the power to make laws with respect to a subject matter and is implied by the grant of that power." Professor Zines has helpfully summed up the different approaches to the appropriations power emerging from the decisions of this Court138: "(a) The appropriation power is a power to appropriate for any purpose. The executive power enables the Commonwealth to carry out that purpose (McTiernan and Murphy JJ) and s 51(xxxix) provides a legislative source of power (Murphy J). 'Purposes of the Commonwealth' in s 81 refer to legislative and executive purposes to be ascertained by examining the specific powers of the Commonwealth and its inherent power as a nation: Barwick CJ and Gibbs J. Section 81 permits appropriations for any purpose but does not permit the Commonwealth to engage in activities unless those activities come within s 61. The scope of s 61 is to be ascertained as in (b) above: Mason J." A significant feature of the appropriation process discussed in the plurality judgment in Combet v The Commonwealth139 flows from s 56 of the Constitution. The plurality made it clear that it is "the Executive Government which begins the process of appropriation"140. It does this by specifying the purpose of the appropriation by message from the Governor-General to the House of Representatives. The wide view adopted by Latham CJ and McTiernan J in the Pharmaceutical Benefits Case, and by McTiernan, Mason and Murphy JJ in the AAP Case, reflected opinions extant well before the former case was decided. Sir Robert Garran, in evidence given to the 1929 Royal Commission on the Constitution, said he had always considered that s 81 was "an absolute power of appropriation" and that "the Commonwealth Parliament has always acted on that supposition". He contrasted the term "purposes of the Commonwealth" in s 81 138 Zines, The High Court and the Constitution, 5th ed (2008) at 353. 139 (2005) 224 CLR 494; [2005] HCA 61. 140 (2005) 224 CLR 494 at 570 [143]. with "any purpose in respect of which the Parliament has power to make laws" in s 51(xxxi) to buttress that proposition141. In a paper published in 1952, the year he retired as Chief Justice, Sir John Latham gave examples of the "many occasions" on which, he said, Parliament had "authorized the expenditure of money upon matters which the Parliament regarded as of general interest and concern, but as to which the Parliament had no power to make laws so as to impose obligations upon any persons"142. Referring back to the Pharmaceutical Benefits Case he acknowledged the differing views as to the meaning of s 81 there expressed, but said that "the decision in the case did not depend upon the acceptance of one or other of these views"143. Notwithstanding what Sir Robert Garran may have perceived to be the prevailing view at one time about the operation of s 81, the uncertain foundations upon which that view rested were acknowledged in the Final Report of the Constitutional Commission of 1988 which recommended the amendment of the section to allow appropriation from the Consolidated Revenue Fund "for any purpose that the Parliament thinks fit"144. In support of that recommendation, the Commission referred to the differing judicial views about s 81 and what it described as the "Delphic counsel" provided by the judgment of Dixon J in the Pharmaceutical Benefits Case. The use of that metaphor may have been intended to draw out the indeterminate character of the boundary conditions formulated for the validity of appropriation laws, namely the "position occupied by a national government" and "the basal consideration" of the distribution of powers and functions between the Commonwealth and the States145. The Executive Government Committee advising the Commission had expressed the opinion that practical considerations favouring the wider view of 141 Australia, Report of the Royal Commission on the Constitution, (1929), Minutes of Evidence, Pt 1 at 69. 142 Latham, "Interpretation of the Constitution", in Else-Mitchell (ed), Essays on the Australian Constitution, 2nd ed (1961) 1 at 43. 143 Latham, "Interpretation of the Constitution", in Else-Mitchell (ed), Essays on the Australian Constitution, 2nd ed (1961) 1 at 44. 144 Australia, Final Report of the Constitutional Commission, (1988), vol 2 at 831 [11.296]; see also at 832 [11.298]. 145 Australia, Final Report of the Constitutional Commission, (1988), vol 2 at 832 [11.300], citing the Pharmaceutical Benefits Case (1945) 71 CLR 237 at 271-272. the appropriations provision were compelling146. In its Report, the Commission noted that the Parliament had for many years made appropriations to persons or bodies for purposes having little or no apparent connection with the powers or functions of the Commonwealth147: "If, as some of the Justices have said, the extent of the appropriation power is to be measured by that of the legislative power, many of such payments have been illegally made and likely to be so made in the future." That observation reflected the view of Owen Dixon KC in evidence given to the 1929 Royal Commission on the Constitution. He said of s 81148: "We have considered this matter somewhat closely, because we understand differences of opinion exist upon the subject, and in the view which we have suggested [ie that the appropriations power was limited to the subjects of the legislative powers of the Commonwealth] the Federal Parliament has upon a number of occasions, and over a long period of time, exceeded its powers in the expenditure of money." The 1988 Constitutional Commission recommended amendment to dispel the constitutional uncertainty. amendments which went to the unsuccessful referendum in 1988 did not include its proposed amendment to s 81. Notwithstanding recommendation, its In my opinion, the history, the text and the logic underlying the operation of ss 81 and 83 are inconsistent with their characterisation as the source of a "spending" or "appropriations" power, notwithstanding their description as such in some of the judgments of Justices of this Court149. There is no clear indication in the judgments of a majority consensus in support of a contrary view. The clearest statement of the character of ss 81 and 83 in this regard, with which I respectfully agree, is that of McHugh J in the passage quoted above from 146 Australia, Final Report of the Constitutional Commission, (1988), vol 2 at 833 147 Australia, Final Report of the Constitutional Commission, (1988), vol 2 at 834 148 Australia, Report of the Royal Commission on the Constitution, (1929), Minutes of Evidence, Pt 3 at 780. 149 See, for example, the Pharmaceutical Benefits Case (1945) 71 CLR 237 at 251 per Latham CJ, 273 per McTiernan J; and the AAP Case (1975) 134 CLR 338 at 371 Northern Suburbs General Cemetery Reserve Trust150. Neither provision confers power. Section 81 directs all revenues or moneys made by the Executive Government into the Consolidated Revenue Fund. Such moneys are only to be appropriated from that Fund for "the purposes of the Commonwealth". By virtue of s 83 no money can be drawn from the Fund absent such an appropriation by law, that is to say by statute. Substantive power to spend the public moneys of the Commonwealth is not to be found in s 81 or s 83, but elsewhere in the Constitution or statutes made under it. That substantive power may be conferred by the exercise of the legislative powers of the Commonwealth. It may also be an element or incident of the executive power of the Commonwealth derived from s 61, subject to the appropriation requirement and supportable by legislation made under the incidental power in s 51(xxxix). In my opinion, the Commonwealth's submission that the Tax Bonus Act can be supported by a combination of ss 81 and 51(xxxix) should not be accepted. The requisite power in this case is to be found in s 61 read with s 51(xxxix), conditioned upon the appropriation requirement in s 83 read with the requirement in s 81 that appropriations must be for "the purposes of the Commonwealth". The preceding conclusions do not involve an undesirable shift in the locus of a spending power of uncertain extent from Parliament to the Executive. They leave in place questions about the scope of the executive power which cannot be answered in the compass of a single case. They involve a rejection of the proposition that s 81 is a source of power to spend money on anything that the Parliament designates as a purpose of the Commonwealth. The "purposes of the Commonwealth" are the purposes otherwise authorised by the Constitution or by statutes made under the Constitution151. The executive power of the Commonwealth The executive power of the Commonwealth is vested in the Queen and is exercisable by the Governor-General. Ministers commissioned by the Governor- General and their officers and other officials exercise that power in the name of the Crown. The principal source of that power is s 61. Other references to executive power relating to particular matters are to be found in other provisions of the Constitution152. The only repository of the executive power other than the 150 (1993) 176 CLR 555 at 601; see [103] above. 151 As to particular provisions of the Constitution which may authorise expenditure in their own terms, see above at [81] fn 78. 152 These include matters which might otherwise have been read into s 61 as inherited royal prerogatives β see ss 5, 28, 32, 56, 62, 64, 67, 68, 70 and 72: Campbell, (Footnote continues on next page) Governor-General was the Inter-State Commission which, under s 101, was to have "such powers of adjudication and administration as the Parliament deems necessary for the execution and maintenance, within the Commonwealth, of the provisions of this Constitution relating to trade and commerce, and of all laws made thereunder". In his speech moving consideration of the draft Bill for a Constitution at the Australasian Federal Convention in Sydney in 1891, Sir Samuel Griffith said of the proposed Ch II, dealing with the executive power153: "This part of the bill practically embodies what is known to us as the British Constitution as we have it working at the present time; but the provisions of the bill are not made so rigid that our successors will not be able to work out such modifications as their experience may lead them to think preferable." Clause 8 of Ch II, which evolved into part of what is now s 61 of the Constitution, then provided: "The executive power and authority of the Commonwealth shall extend to all matters with respect to which the legislative powers of the Parliament may be exercised, excepting only matters, being within the legislative powers of a State, with respect to which the Parliament of that State for the time being exercises such powers." Griffith moved an amendment to cl 8 during the debate in Committee. The amendment was agreed to and the amended clause read154: "The Executive power and authority of the Commonwealth shall extend to the execution of the provisions of this Constitution, and the Laws of the Commonwealth." "Parliament and the Executive", in Zines (ed), Commentaries on the Australian Constitution, (1977) 88 at 89. 153 Official Record of the Debates of the Australasian Federal Convention, (Sydney), 31 March 1891 at 527. 154 Official Record of the Debates of the Australasian Federal Convention, (Sydney), 6 April 1891 at 777-778. He said of the amendment that it did not alter the intention of cl 8 and added155: "As the clause stands, it contains a negative limitation upon the powers of the executive; but the amendment will give a positive statement as to what they are to be." He also said that the amendment would cover all that was meant by the clause and, in words that turned out not to be prophetic, said that it was "quite free from ambiguity"156. The first Attorney-General of the Commonwealth, Alfred Deakin, observed in his well-known opinion of 12 November 1902, arising out of the Vondel incident157: "The original clause, therefore, extended the executive power of the Commonwealth to all matters within the legislative power of the Parliament, with a negative limitation applying to the execution of State laws on matters within the concurrent power of the States. The form was altered, to avoid even a negative limitation, but the intention remained the same." As appears later in these reasons, Deakin did not intend to convey that the executive power was exhaustively defined by reference to the heads of Commonwealth legislative power158. The draft Bill as adopted by the National Australasian Convention on 9 April 1891, in Ch II dealing with the Executive Government, contained two relevant provisions: The Executive power and authority of the Commonwealth is vested in the Queen, and shall be exercised by the Governor-General as the Queen's Representative. 155 Official Record of the Debates of the Australasian Federal Convention, (Sydney), 6 April 1891 at 777. 156 Official Record of the Debates of the Australasian Federal Convention, (Sydney), 6 April 1891 at 778. 157 Deakin, "Channel of Communication with Imperial Government: Position of Consuls: Executive Power of Commonwealth", in Brazil and Mitchell (eds), Opinions of Attorneys-General of the Commonwealth of Australia, Volume 1: 158 See [124] below. The Executive power and authority of the Commonwealth shall extend to the execution of the provisions of this Constitution, and the Laws of the Commonwealth." The provisions were reproduced in the draft Constitution approved by the Australasian Federal Convention at Adelaide in April 1897 but were renumbered as cll 60 and 67. At the Sydney Convention in 1897, cl 60 was amended to substitute the word "exercisable" for the word "exercised". Mr Reid, who moved the amendment, described it as "more in harmony with the nature of the clause which vests in the Queen the power and authority of the commonwealth"159. Clause 67 was agreed to without debate160. Clauses 60 and 67 were not debated in Committee at the 1898 Melbourne Convention. However, they were condensed by the Drafting Committee into one clause, cl 61, which became s 61. Quick and Garran pointed to the encroachment by s 1 of the Constitution upon the old notion that the Crown enacts the law. Legislative power is vested by s 1 in the Parliament comprising the Senate, the House of Representatives and the Queen. However, in respect of the executive power they said161: "The dictum that 'the Crown conducts all the affairs of State', is still true in theory, and has been followed and maintained in form, by s 61, which says that the executive power of the Federal Government is vested in the Queen." There is a marked difference between the way in which the Constitution sets out the legislative and executive powers of the Commonwealth. Whereas Ch I provides a detailed account of the distribution of legislative power, Ch II is "suggestive rather than expressive" concerning the distribution of executive 159 Official Record of the Debates of the Australasian Federal Convention, (Sydney), 17 September 1897 at 782. 160 Official Record of the Debates of the Australasian Federal Convention, (Sydney), 17 September 1897 at 806. 161 Quick and Garran, The Annotated Constitution of the Australian Commonwealth, power162. Professor Michael Crommelin has pointed out that this approach accorded with colonial constitutional practice. In that connection he referred to "For more than one reason, Statutes defining the Constitutions of the Colonies have been almost silent on the subject of the powers as of the organization of the Executive. In the first place, the legislative power has included the power of making full provision for the execution of the law. Secondly, a large measure of executive power resides in the prerogative of the Crown, and has been conferred through prerogative acts and not by Statute, lest thereby the prerogative should be prejudiced. Finally, the organization of the Government and the relations of the Ministry and Parliament in our system are a very type of matters which are not under the continual direction of organic laws, but are freely organized as utility has suggested or may suggest within the ultimate bounds of law." Further, as Professor Crommelin wrote, the sources of executive power in statute and the prerogative were recognised in the Conventions but it is not clear how they were reflected in the Constitution. The content of the executive power of the Commonwealth was not defined nor in terms limited by the drafters of the Constitution. Alfred Deakin, in his Vondel opinion, said of s 61164: "No exhaustive definition is attempted in the Constitution β obviously because any such attempt would have involved a risk of undue, and perhaps unintentional, limitation of the executive power. Had it been intended to limit the scope of the executive power to matters on which the Commonwealth Parliament had legislated, nothing would have been easier than to say so." 162 Crommelin, "The Executive", in Craven (ed), The Convention Debates 1891-1898: Commentaries, Indices and Guide, (1986) 127 at 130-131. 163 Harrison Moore, The Constitution of The Commonwealth of Australia, (1902) at 212, quoted in Crommelin, "The Executive", in Craven (ed), The Convention Debates 1891-1898: Commentaries, Indices and Guide, (1986) 127 at 131. 164 Deakin, "Channel of Communication with Imperial Government: Position of Consuls: Executive Power of Commonwealth", in Brazil and Mitchell (eds), Opinions of Attorneys-General of the Commonwealth of Australia, Volume 1: Noting the extension of executive power to the execution and maintenance "of this Constitution" as well as "of the laws of the Commonwealth", Deakin wrote165: "The framers of that clause evidently contemplated the existence of a wide sphere of Commonwealth executive power, which it would be dangerous, if not impossible, to define, flowing naturally and directly from the nature of the Federal Government itself, and from the powers, exercisable at will, with which the Federal Parliament was to be entrusted." And further166: "The scope of the executive authority of the Commonwealth is therefore to be deduced from the Constitution as a whole. It is administrative, as well as in the strict sense executive; that is to say, it must obviously include the power not only to execute laws, but also to effectively administer the whole Government of which Parliament is the legislative department." In testimony to the 1929 Royal Commission on the Constitution, Sir Edward Mitchell KC offered the same wide view of s 81 as Sir Robert Garran had and, in relation to the Executive Government, added that167: "Of course, the executive government cannot be confined, like a manager of a business might, merely to those specific matters which come within the provisions enumerating what it is authorized to bring before Parliament to legislate about. It is clear that all sorts of emergencies may arise, and all sorts of things may happen as to which the executive government must have a free hand." It is not necessary for present purposes to consider the full extent of the powers and capacities of the Executive Government of the Commonwealth. 165 Deakin, "Channel of Communication with Imperial Government: Position of Consuls: Executive Power of Commonwealth", in Brazil and Mitchell (eds), Opinions of Attorneys-General of the Commonwealth of Australia, Volume 1: 166 Deakin, "Channel of Communication with Imperial Government: Position of Consuls: Executive Power of Commonwealth", in Brazil and Mitchell (eds), Opinions of Attorneys-General of the Commonwealth of Australia, Volume 1: 167 Australia, Report of the Royal Commission on the Constitution, (1929), Minutes of Evidence, Pt 3 at 760. Such powers as may be conferred upon the Executive by statutes made under the Constitution are plainly included. So too are those powers which are called the prerogatives of the Crown, for example the power to enter into treaties and to declare war168. In addition, whatever the source169, the Executive possesses what have been described as the "capacities"170 which may be possessed by persons other than the Crown. The collection of statutory and prerogative powers and non-prerogative capacities form part of, but do not complete, the executive power. They lie within the scope of s 61, which is informed by history and the common law relevant to the relationship between the Crown and the Parliament. That history and common law emerged from what might be called an organic evolution. Section 61 is an important element of a written constitution for the government of an independent nation. While history and the common law inform its content, it is not a locked display cabinet in a constitutional museum. It is not limited to statutory powers and the prerogative. It has to be capable of serving the proper purposes of a national government. On the other hand, the exigencies of "national government" cannot be invoked to set aside the distribution of powers between Commonwealth and States and between the three branches of government for which this Constitution provides, nor to abrogate constitutional prohibitions. This important qualification may conjure the "Delphic" spirit of Dixon J in the Pharmaceutical Benefits Case. But to say that is to say no more than that there are broadly defined limits to the power which must be respected and applied case by case. As for this case, it is difficult to see how the payment of moneys to taxpayers, as a short-term measure to meet an urgent national economic problem, is in any way an interference with the constitutional distribution of powers. 168 Farey v Burvett (1916) 21 CLR 433 at 452; [1916] HCA 36. Australia lacked executive independence in the conduct of foreign relations at the time of federation. Such independence was recognised for all Dominions at the Imperial Conference held in 1926. See Winterton, "The Acquisition of Independence", in French, Lindell and Saunders (eds), Reflections on the Australian Constitution, (2003) 31 at 169 There are various competing views as to the nature, source and scope of these capacities: see Clough v Leahy (1904) 2 CLR 139; [1904] HCA 38; New South Wales v Bardolph (1934) 52 CLR 455 at 496 per Rich J, 509 per Dixon J; Winterton, Parliament, the Executive and the Governor-General, (1983) at 47, 120-122; Hogg and Monahan, Liability of the Crown, 3rd ed (2000) at 16-17; and Zines, The High Court and the Constitution, 5th ed (2008) at 345-346. It is unnecessary to enter into that debate. 170 Davis v The Commonwealth (1988) 166 CLR 79 at 108 per Brennan J. In this connection, Professor Geoffrey Sawer in 1976, referring to the judgment of Mason J in the AAP Case, suggested that s 61 includes "an area of inherent authority derived partly from the Royal Prerogative, and probably even more from the necessities of a modern national government"171. There has been substantial support in this Court for that proposition. In the Pharmaceutical Benefits Case, in a passage cited earlier in these reasons, Dixon J abjured any "narrow conception of the functions of the central government of a country in the world of to-day"172. Starke J mentioned the "status of the Commonwealth as a Federal Government"173. In the AAP Case, Barwick CJ referred to the powers "inherent in the fact of nationhood and of international personality"174. Mason J spoke of "the existence and character of the Commonwealth as a national government" and referred to ss 61 and 51(xxxix) in the context of "a capacity to engage in enterprises and activities peculiarly adapted to the government of a nation and which cannot otherwise be carried on for the benefit of the nation"175. In Barton v The Commonwealth176 the Court held that it was within the prerogative powers of the Commonwealth to request a foreign state to detain and surrender to Australia a person alleged to have committed an offence against a law of the Commonwealth. Mason J approached the case on the basis that in the United Kingdom, absent a treaty, a request to a foreign state for extradition of an offender fell within the executive power of the Crown at the end of the 19th century. It was necessary therefore to examine the executive power of the Commonwealth. He referred to the establishment by its Constitution of the Commonwealth of Australia as a political entity and as a member of the community of nations, and said177: 171 Sawer, "The Executive Power of the Whitlam Government", unpublished Octagon Lecture, University of Western Australia, (1976) at 10, cited in Winterton, "The Limits and Use of Executive Power by Government", (2003) 31 Federal Law Review 421 at 430-431. the Commonwealth and 172 (1945) 71 CLR 237 at 269; see [87] above. 173 (1945) 71 CLR 237 at 266. 174 (1975) 134 CLR 338 at 362. 175 (1975) 134 CLR 338 at 397. 176 (1974) 131 CLR 477. 177 (1974) 131 CLR 477 at 498. "By s 61 the executive power of the Commonwealth was vested in the Crown. It extends to the execution and maintenance of the Constitution and of the laws of the Commonwealth. It enables the Crown to undertake all executive action which is appropriate to the position of the Commonwealth under the Constitution and to the spheres of responsibility vested in it by the Constitution. It includes the prerogative powers of the Crown, that is, the powers accorded to the Crown by the common law." Jacobs J thought it "within the executive power of the Australian Government as the government of a sovereign state to communicate in such terms as it thinks fit" with a foreign government unless that power is taken away by statute178. In Davis179 Mason CJ, Deane and Gaudron JJ acknowledged that the scope of the executive power of the Commonwealth had "often been discussed but never defined"180. The spheres of responsibility vested in the Executive under the Constitution which had been referred to in Barton were described thus181: "These responsibilities derived from the distribution of legislative powers effected by the Constitution itself and from the character and status of the Commonwealth as a national polity β¦ So it is that the legislative powers of the Commonwealth extend beyond the specific powers conferred upon the Parliament by the Constitution and include such powers as may be deduced from the establishment and nature of the Commonwealth as a polity". The plurality acknowledged the federal distribution of powers between Commonwealth and States, and added182: "On this footing β¦ s 61 confers on the Commonwealth all the prerogative powers of the Crown except those that are necessarily exercisable by the States under the allocation of responsibilities made by the Constitution and those denied by the Constitution itself. Thus the existence of Commonwealth executive power in areas beyond the express grants of legislative power will ordinarily be clearest where Commonwealth 178 (1974) 131 CLR 477 at 505. 179 (1988) 166 CLR 79. 180 (1988) 166 CLR 79 at 92. 181 (1988) 166 CLR 79 at 93. 182 (1988) 166 CLR 79 at 93-94. executive or legislative action involves no real competition with State executive or legislative competence." Brennan J spoke of the executive power thus183: "But s 61 does confer on the Executive Government power 'to engage in enterprises and activities peculiarly adapted to the government of a nation and which cannot otherwise be carried on for the benefit of the nation', to repeat what Mason J said in the AAP Case. In my respectful opinion, that is an appropriate formulation of a criterion to determine whether an enterprise or activity the Commonwealth. It invites consideration of the sufficiency of the powers of the States to engage effectively in the enterprise or activity in question and of the need for national action (whether unilateral or in co-operation with the States) to secure the contemplated benefit. The variety of enterprises or activities which might fall for consideration preclude the a priori development of detailed criteria but, as cases are decided, perhaps more precise tests will be developed." (footnote omitted) the executive power of lies within Toohey J took a more restrictive approach to s 61 than Mason CJ, Deane and Gaudron JJ and was in general agreement with the view of Wilson and Dawson JJ that the legislative powers of the Commonwealth were to be found in the enumerated matters in s 51 of the Constitution, including the incidental power in s 51(xxxix)184. In R v Hughes185 six of the members of this Court referred with evident approval to a passage from the judgment of Mason J in Duncan186, where his Honour had said187: "The scope of the executive power is to be ascertained, as I indicated in the AAP Case, from the distribution of the legislative powers effected by the Constitution and the character and status of the Commonwealth as a national government. Of necessity the scope of the power is appropriate 183 (1988) 166 CLR 79 at 111. 184 (1988) 166 CLR 79 at 117 per Toohey J; see at 103-104 per Wilson and 185 (2000) 202 CLR 535 at 554-555 [38]; [2000] HCA 22. 186 R v Duncan; Ex parte Australian Iron and Steel Pty Ltd (1983) 158 CLR 535; [1983] HCA 29. 187 (1983) 158 CLR 535 at 560. to that of a central executive government in a federation in which there is a distribution of legislative powers between the Parliaments of the constituent elements in the federation." (footnote omitted) The judgment in Hughes referred, in the footnote against that quotation, to the pages in Davis covering the various passages to which I have referred. Elucidation of the content of the executive power in s 61 and the incidental power conferred by s 51(xxxix) is a process to be distinguished from the discovery by implication of a "nationhood" power as an implied head of legislative competence188. This is not a case which depends for its resolution upon the existence of any such implied power. The executive power extends, in my opinion, to short-term fiscal measures to meet adverse economic conditions affecting the nation as a whole, where such measures are on their face peculiarly within the capacity and resources of the Commonwealth Government. This is consistent with the executive power as broadly explained by Mason CJ, Brennan, Deane and Gaudron JJ in Davis, and by Mason J in the passage from Duncan quoted in Hughes. To say that the executive power extends to the short-term fiscal measures in question in this case does not equate it to a general power to manage the national economy. In this case the Commonwealth had the resources and the capacity to implement within a short time-frame measures which, on the undisputed facts, were rationally adjudged as adapted to avoiding or mitigating the adverse effects of global financial circumstances affecting Australia as a whole, along with other countries. The question of the reviewability of factual assertions of the Executive grounding the exercise of its powers under s 61 does not arise in this case, having regard to the accepted facts189. The executive power is exercised in this case with the necessary prior authority of the Parliament under s 83. The incidental power supports the provisions of the Tax Bonus Act which set up a statutory framework in aid of the tax bonus payments. In my opinion the impugned provisions are within the legislative power of the Commonwealth. 188 Davis v The Commonwealth (1988) 166 CLR 79 at 103-104 per Wilson and 189 As noted earlier at [13], Mr Pape did not challenge the factual content of the Special Case but rather its relevance. The locus of the appropriation For the reasons set out in the judgment of Gummow, Crennan and Bell JJ190, I agree that the requisite appropriation was effected by s 16 of the Taxation Administration Act read with s 3 of the Tax Bonus Act. Conclusion The Tax Bonus Act is supported by s 61 of the Constitution and by the incidental power. The expenditures made under it are authorised by an appropriation made in conformity with ss 81 and 83. Having regard to this conclusion, it is not necessary to consider whether the Tax Bonus Act is supported by the other heads of power relied upon by the Commonwealth. 190 See below at [168]-[171]; see also at [267] and [394] per Hayne and Kiefel JJ. Crennan Bell 137 GUMMOW, CRENNAN AND BELL JJ. The Tax Bonus for Working Australians Act (No 2) 2009 (Cth) ("the Bonus Act") received the Royal Assent on 18 February 2009 and commenced on that day. The first defendant ("the Commissioner") has the general administration of the Bonus Act (s 3). The Bonus Act is valid. The reasons for that conclusion and upon other issues which are before the Full Court are organised as follows: The legislation The context of the legislation The litigation Question 1 β standing Question 3 β appropriation The submissions upon Question 3 The first submission by the plaintiff Appropriation and law-making Conclusions respecting s 81 At Westminster and Whitehall The Australian situation The drafting of s 81 of the Constitution Section 83 of the Constitution Question 2 β validity The Executive Government of the Commonwealth The present crisis Conclusions respecting s 61 and s 51(xxxix) The taxation power β s 51(ii) Other heads of power Result The legislation The central provisions of the Bonus Act are as follows. Section 5(1) states: "A person is entitled to a payment (known as the tax bonus) for the 2007-08 income year if: the person is an individual; and the person is an Australian resident for that income year; and the person's adjusted tax liability for that income year is greater than nil; and Crennan Bell the person's taxable income for that income year does not exceed $100,000; and the person lodges his or her income tax return for that income year no later than: unless subparagraph (ii) applies β 30 June 2009; or if, before the commencement of this Act, the Commissioner deferred the time for lodgment of the return under section 388-55 in Schedule 1 to the Taxation Administration Act 1953 [(Cth) ('the Administration Act')] to a day later than 30 June 2009 β that later day." Section 5(2) limits the entitlement of minors to the tax bonus, by the adoption of criteria consistent with the treatment of the income of minors by the Income Tax Assessment Act 1936 (Cth). Section 6 specifies the amount of the tax bonus as $250, $600 or $900, depending upon the size of the taxable income of persons entitled to the tax bonus. If the Commissioner is satisfied that a person is entitled under s 5 to the tax bonus, s 7 requires the Commissioner to pay it to the person as soon as practicable after becoming so satisfied. It is agreed between the parties that the plaintiff is "putatively entitled" under the Bonus Act to the payment of a tax bonus of $250. Section 5 states an entitlement of certain persons and s 7 imposes a duty or obligation upon the Commissioner which arises upon the Commissioner being satisfied of the entitlement. The better view is that these provisions attract the reasoning of Parke B in Shepherd v Hills191 and that an action in debt is the appropriate means of enforcement. Baron Parke said in that case: "There is no doubt that wherever an Act of Parliament creates a duty or obligation to pay money, an action will lie for its recovery, unless the Act contains some provision to the contrary." The result is that the payment of the tax bonus involves, contrary to the submission of the plaintiff, more than the receipt of a mere gratuity; the payment 191 (1855) 11 Ex 55 at 67 [156 ER 743 at 747]. See also Mallinson v Scottish Australian Investment Co Ltd (1920) 28 CLR 66 at 70; [1920] HCA 51; The Commonwealth v SCI Operations Pty Ltd (1998) 192 CLR 285 at 313 [65]; [1998] HCA 20; cf Health Insurance Commission v Peverill (1994) 179 CLR 226 at 242-243; [1994] HCA 8. Crennan Bell is the discharge of a legal obligation. There is a concomitant obligation to repay to the Commonwealth overpayments (s 8). The Tax Bonus for Working Australians (Consequential Amendments) Act (No 2) 2009 (Cth) ("the Consequential Amendments Act") also commenced on 18 February 2009. Among the consequential amendments is the amendment of the Income Tax Assessment Act 1997 (Cth) ("the Assessment Act") so as to provide that a tax bonus paid in accordance with the Bonus Act "is not assessable income and is not exempt income". The amendment is made to Div 59 of the Assessment Act. Further, the Consequential Amendments Act amends the Taxation Administration Act 1953 (Cth) ("the Administration Act")192 to ensure that the payment of the tax bonus cannot be considered a credit to offset tax debts or liabilities. The context of the legislation The Explanatory Memorandum circulated by the authority of the Treasurer to the House of Representatives on 3 February 2009 dealt together with the Bills for the Bonus Act and the Consequential Amendments Act. Under the heading "Context of the Bills" the Explanatory Memorandum stated: "These Bills give effect to the Government's Nation Building and Jobs Plan announced on 3 February 2009. The plan was introduced to assist the Australian people [to] deal with the most significant economic crisis since the Second World War and provide immediate economic stimulus to boost demand and support jobs. This measure, at a cost of $7.7 billion, provides financial support to around 8.7 million taxpayers." The parties accept that the Bonus Act was enacted to respond to a crisis in economic affairs. As a result of rapid, adverse changes in macroeconomic circumstances in 2008 and this year, the world is in the midst of a global recession; no country can expect its economy to avoid the effects of the crisis which include sharp world-wide declines in growth, rising unemployment, restricted access to credit and falling wealth; the global recession has caused a deterioration in the Australian economy; and the Treasury forecasts significantly weaker domestic growth and higher unemployment. The Nation Building and Jobs Plan proposed measures "targeted towards those low- and middle-income households who are most likely to spend 192 Section 8AAZA, amended by the Consequential Amendments Act, Sched 1, Item 6. Crennan Bell additional income and who are most vulnerable during an economic slowdown". It stated that payments which are saved rather than spent will "accelerate balance sheet repair and underpin consumption over time". One of the proposed measures is implemented substantially by the Bonus Act. The measure was designed for quick implementation so that the expected boost to demand would occur in the first half of 2009. On 6 March 2009 the Second Commissioner of Taxation estimated that 6.7 million people were presently eligible to receive the tax bonus and would receive $900, that 250,000 would receive $600, and that 160,000 would receive $250. The Commissioner planned to begin distribution of payments on 6 April 2009. The Second Commissioner also estimated that a remainder of about 1.6 million people would file, after 6 March and before 30 June 2009, their income tax returns for the 2007-2008 income tax year and some would subsequently become eligible for payment of the tax bonus. The litigation On 26 February 2009 the plaintiff instituted an action in the original jurisdiction of this Court against the Commissioner asserting the invalidity of the Bonus Act and seeking declaratory and injunctive relief. The Commonwealth was later joined as a defendant. Directions for the further conduct of the litigation were given by a Justice on 13 March 2009 and on 17 March 2009, pursuant to r 27.08 of the High Court Rules 2004, the plaintiff and the defendants agreed a Special Case stating four questions for the opinion of the Full Court. The Special Case was heard by the whole Court on 30 and 31 March and 1 April 2009. There were interventions by the Attorneys-General of New South Wales, South Australia and Western Australia. Their submissions offered varying degrees of support to those of the defendants. On 3 April 2009 the Court pronounced its order and reserved to a later occasion the delivery of reasons. The questions and the answers given by the Court, with our support, are as follows: Question 1: Does the Plaintiff have standing to seek the relief claimed in his Writ of Summons and Statement of Claim? Answer: Yes. Question 2: Is the [Bonus Act] valid because it is supported by one or more express or implied heads of legislative power under the Commonwealth Constitution? Crennan Bell Answer: The Bonus Act is a valid law of the Commonwealth. Question 3: Is payment of the tax bonus to which the plaintiff is entitled under the [Bonus Act] supported by a valid appropriation under ss 81 and 83 of the Constitution? Answer: There is an appropriation of the Consolidated Revenue Fund within the meaning of the Constitution in respect of payments by the Commissioner required by s 7 of the Bonus Act. Question 4: Who should pay the costs of the special case? Answer: In accordance with the agreement of the parties announced on the second day of the hearing of the Special Case, there is no order for costs. It is convenient to consider Question 1 and Question 3 before turning to Question 2. Question 1 β standing This asks whether the plaintiff has standing to seek the relief he claims. The plaintiff seeks declarations that the tax bonus payable to him by the Commissioner "is unlawful and void", and that the Bonus Act is invalid, and an interlocutory injunction restraining the Commissioner from making any payment to him of the tax bonus. The controversy between the parties comprises several heads of "matter" within the original jurisdiction of this Court. Section 75(iii), s 75(v), and s 76(i) as implemented by s 30(a) of the Judiciary Act 1903 (Cth), are engaged. It is now well established that in federal jurisdiction, questions of "standing" to seek equitable remedies such as those of declaration and injunction are subsumed within the constitutional requirement of a "matter"193. This 193 Australian Conservation Foundation v The Commonwealth (1980) 146 CLR 493 at 550-551; [1980] HCA 53; Croome v Tasmania (1997) 191 CLR 119 at 124-126, 132-136; [1997] HCA 5; Bateman's Bay Local Aboriginal Land Council v Aboriginal Community Benefit Fund Pty Ltd (1998) 194 CLR 247 at 262 [37]; [1998] HCA 49; Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (2000) 200 CLR 591 at 610-613 [42]-[50], 629-633 [101]-[109], 659-660 [177]-[179]; [2000] HCA 11. Crennan Bell important point appears to have been insufficiently appreciated in some of the submissions upon Question 1. The defendants submit that the plaintiff has standing to challenge the payment of the tax bonus to him but "does not have standing to challenge the validity of the payment of tax bonus to anyone else". The defendants are supported in this submission by New South Wales, South Australia and Western Australia. It is accepted, for example, by New South Wales that (i) the plaintiff has a right to payment by the Commissioner of the tax bonus pursuant to s 7 of the Bonus Act, and (ii) there thus is an immediate right and duty in the relationship between the plaintiff and the defendants which gives rise to a justiciable controversy. However, it is submitted that while the relief the plaintiff may obtain includes the injunction he seeks against the Commissioner, it cannot include a declaration against the Commissioner and the Commonwealth of invalidity of the Bonus Act. That outcome is said by New South Wales to be dictated by the absence in the plaintiff of a "particular interest in that broader issue of validity". This and other submissions to like effect should be rejected. They proceed from erroneous assumptions as to the nature and incidents in the present case of the adjudication of matters arising under the Constitution or involving its interpretation, and thus give insufficient weight to the place of the rule of law in the scheme of the Constitution. It may be accepted, to adapt the words of Starke J in The Real Estate Institute of NSW v Blair194, that the plaintiff cannot "roam at large" over the Bonus Act and that he should be restricted to a declaration of invalidity with respect to those provisions applying to him, so far as they are unauthorised by the Constitution. However, the Bonus Act is a statute of nine sections which together present what appears to be an inseverable whole. The plaintiff's entitlement is in an amount of $250 (s 6(c)). Other persons qualify for $900 (s 6(a)), or $600 (s 6(b)). Assume that the plaintiff demonstrates the invalidity of so much of the statute as purports to confer his entitlement to the $250. A question of severance would then arise as to the operation of the statute with respect to the payments of 194 (1946) 73 CLR 213 at 227; [1946] HCA 43. Crennan Bell $900 and $600195. The plaintiff has the competence, as a step in the resolution of the controversy between him and the defendants, to embark upon that question as it may arise. The disposition of the controversy between the plaintiff and the Commissioner and the Commonwealth does not turn solely upon facts or circumstances unique to the plaintiff. If the plaintiff succeeds in establishing, as a necessary step in making out his case for relief, that the Bonus Act is invalid, then the reasoning of the Court upon the issue of invalidity would be of binding force in subsequent adjudications of other disputes. Hence the very great utility in granting declaratory relief in the plaintiff's action. In this way the resolution pursuant to Ch III of the Constitution of the plaintiff's particular controversy acquires a permanent, larger, and general dimension. The declaration would vindicate the rule of law under the Constitution. The fundamental considerations at stake here were recently affirmed and explained in Plaintiff S157/2002 v The Commonwealth196. Question 1 should be answered "Yes". Question 3 β appropriation Question 3 of the Special Case asks: "Is payment of the tax bonus to which the plaintiff is entitled under the [Bonus Act] supported by a valid appropriation under ss 81 and 83 of the Constitution?" Section 81 states: "All revenues or moneys raised or received by the Executive Government of the Commonwealth shall form one Consolidated Revenue Fund, to be appropriated for the purposes of the Commonwealth in the manner and subject to the charges and liabilities imposed by this Constitution." The first sentence of s 83 reads: "No money shall be drawn from the Treasury of the Commonwealth except under appropriation made by law." 195 See Victoria v The Commonwealth (Industrial Relations Act Case) (1996) 187 CLR 416 at 501-503; [1996] HCA 56. 196 (2003) 211 CLR 476 at 513-514 [103]-[104]; [2003] HCA 2. Crennan Bell The question assumes that the Commissioner is bound by the terms of s 83 and that this may present a justiciable issue as to the existence of an "appropriation" within the meaning of that section and s 81. Notwithstanding the doubts expressed by Jacobs J, and perhaps by Mason J, in Victoria v The Commonwealth and Hayden ("the AAP Case")197 the contrary is not submitted in the present dispute. However, the processes for the making of an appropriation involve other provisions of the Constitution, in particular the Vice-Regal recommendation provision in s 56 and the respective authority of the House of Representatives and the Senate which is identified in s 53. It may be noted that these provisions treat together those "money bills" dealing with the raising of revenue by the imposition of taxation and those providing for appropriation. Section 53 has been said in this Court to be a procedural provision governing the intra-mural activities of the Parliament and not giving rise to invalidity of legislation which has passed both legislative chambers and received the Royal Assent198. The adjudication of the issue presented by Question 3, respecting the operation of s 81 and s 83 of the Constitution, thus requires some care lest that adjudication trespass upon the anterior operation of s 53 with respect to the passage of the Bill for the Bonus Act. It may, however, be noted that House of Representatives Practice199, edited by the Clerk of the House, treats as a special appropriation bill one which: "while not in [itself] containing words of appropriation, would have the effect of increasing, extending the objects or purposes of, or altering the destination of, the amount that may be paid out of the Consolidated Revenue Fund under existing words of appropriation in a principal Act to be amended, or another Act". 197 (1975) 134 CLR 338 at 410-412 and 394 respectively; [1975] HCA 52. See also Combet v The Commonwealth (2005) 224 CLR 494 at 561 [112]-[114], 578-579 [164]-[165]; [2005] HCA 61. 198 Permanent Trustee Australia Ltd v Commissioner of State Revenue (Vict) (2004) 220 CLR 388 at 409 [41]; [2004] HCA 53. 199 Harris (ed), House of Representatives Practice, 5th ed (2005) at 409. Crennan Bell The Bill for the Bonus Act, as will appear, was of that character. Accordingly, the answer to Question 3 is that there is an appropriation of the Consolidated Revenue Fund within the meaning of the Constitution in respect of payments by the Commissioner required by s 7 of the Bonus Act. The Bill for the Bonus Act received its Second Reading in the House of Representatives on 12 February 2009. The Official Hansard for that day records the announcement of a message from the Governor-General dated 12 February 2009 and recommending to the House "that an appropriation be made for the purposes of a Bill [for the Bonus Act]"200. Section 56 of the Constitution states: "A vote, resolution, or proposed law for the appropriation of revenue or moneys shall not be passed unless the purpose of the appropriation has in the same session been recommended by message of the Governor-General to the House in which the proposal originated." It was the inclusion in the Bill of what became s 3 of the Bonus Act, stating: "The Commissioner has the general administration of this Act", which had the effect of increasing and extending the objects or purposes of the amount which may be paid out of the Consolidated Revenue Fund under existing words of appropriation in s 16 of the Administration Act. Section 16 of the Administration Act appropriates the Consolidated Revenue Fund to the payment thereout of certain amounts the Commissioner is required to pay by a provision of a "taxation law". This term has an ambulatory definition. Section 2 of the Administration Act gives it "the meaning given by [the Assessment Act]" and this includes in its meaning "an Act of which the Commissioner has the general administration". The definition of "taxation law" was "picked up" by the Bonus Act, with the consequence that the Bill for the Bonus Act was a special appropriation bill as identified by the Practice. The submissions upon Question 3 That answer involves rejection of three submissions by the plaintiff which are put in the alternative in his written submissions. The first is that upon its proper construction, s 16 of the Administration Act is limited to refunds of tax 200 Australia, House of Representatives, Parliamentary Debates (Hansard), 12 February 2009 at 1295. Crennan Bell and related payments and the payments under the Bonus Act are not of that character. The second submission involves several steps. There is said to be no appropriation which answers s 81 of the Constitution, because the phrase "for the purposes of the Commonwealth" was correctly construed by Barwick CJ and by Gibbs J in the AAP Case201 as requiring appropriation for a purpose for which the Parliament has power to make laws, and the Bonus Act is beyond power. The third submission is that the Bonus Act is "inoperative" because there is no appropriation provision stipulated in the terms of the Bonus Act itself and as a result no "appropriation made by law" as required by s 83 of the Constitution. The first submission by the plaintiff The first submission fails. As a matter of construction, s 16 of the Administration Act is ambulatory in its operation, in the sense described earlier in these reasons. The Bonus Act is a statute the general administration of which is given by s 3 to the Commissioner and as a consequence s 16 of the Administration Act is engaged. Appropriation and law-making Consideration of the second and third submissions by the plaintiff (and of certain submissions made by the defendants) requires construction of the text of s 81 and s 83 and an appreciation of the nature of an "appropriation" by the Parliament. The term "appropriation" is an ordinary English word but it is apparent that it is used in the Constitution in a particular sense. The term appears in provisions of the Constitution dealing with the carriage of financial measures within the Parliament. These processes require recommendation by message from the Governor-General to the House of Representatives (s 56) and ss 53 and 54 lay down the respective roles of the two legislative chambers. Sections 81 and 83 on their face are concerned with the treatment of moneys raised or received by the Executive Government of the Commonwealth and the imposition of a requirement for the drawing of money from the Treasury. The term "appropriation" is used here to identify the conferral of authority upon the Executive to spend public moneys, rather than the subsequent exercise of that authority and the debiting of the relevant account. This understanding is 201 (1975) 134 CLR 338 at 363 per Barwick CJ, 373-375 per Gibbs J. Crennan Bell apparent in the statement by Griffith CJ in The State of New South Wales v The Commonwealth202: "The appropriation of public revenue is, in form, a grant to the Sovereign, and the Appropriation Acts operate as an authority to the Treasurer to make the specified disbursements." In the same case, Isaacs J said of s 81203: "'Appropriation of money to a Commonwealth purpose' means legally segregating it from the general mass of the Consolidated Fund and dedicating it to the execution of some purpose which either the Constitution has itself declared, or Parliament has lawfully determined, shall be carried out." The use of the phrase "the Constitution has itself declared, or Parliament has lawfully determined" is significant. Isaacs J was distinguishing the grant of authority to the Executive to appropriate from subsequent expenditure. The grant of an appropriation is not by its own force the exercise of an executive or legislative power to achieve an objective which requires expenditure. Yet, in different ways, both the plaintiff and the defendants presented submissions which assumed the contrary. There is, as Mason J indicated in the AAP Case204, no analogy between the validity of legislation and the validity of expenditure. Jacobs J, with respect, correctly said of an appropriation that it "is no more than an earmarking of the money, which remains the property of the Commonwealth" and the disclosure "that the Parliament assents to the expenditure of the moneys appropriated for the purposes stated in the appropriation"205. To the same effect is the statement by Stephen J in the AAP Case206: "When an item in an Appropriation Act is attacked as ultra vires it is not in any real sense the Commonwealth Parliament's legislative power 202 (1908) 7 CLR 179 at 190; [1908] HCA 68. 203 (1908) 7 CLR 179 at 200. 204 (1975) 134 CLR 338 at 392-393. 205 (1975) 134 CLR 338 at 411. 206 (1975) 134 CLR 338 at 386. Crennan Bell that is attacked but rather the taking of the first step in the expenditure of moneys on a particular purpose." Stephen J also said of an appropriation Act207: "It is an Act which, while a necessary precondition to lawful disbursement of money by the Treasury, is not in any way directed to the citizens of the Commonwealth; it does not speak in the language of regulation, it neither confers rights or privileges nor imposes duties or obligations. It only permits of moneys held in the Treasury being paid out, upon the Governor-General's warrant, to departments of the Government." The reference in this passage to permission should be noted. Section 94 of the Constitution assumes that there may be surplus revenue of the Commonwealth, from which Parliament may provide payments to the States. However, the Surplus Revenue Act 1908 (Cth), the validity of which was upheld in The State of New South Wales v The Commonwealth208, established the practice of appropriating to Commonwealth "trust" accounts revenues unexpended at the end of the financial year, so that there since has been no scope for the operation of Once the nature of the process of parliamentary appropriation is appreciated, the sections of the Constitution which provide for it do not serve as sources of a "spending power" by the width of which is determined the validity of laws which create rights and impose obligations or otherwise utilise the supply approved by an appropriation. Submissions which assume the contrary found upon statements in the several judgments delivered in Attorney-General (Vict) v The Commonwealth ("the Pharmaceutical Benefits Case")209 and in the AAP Case of a range of opinions as to the construction of s 81 and s 83 and their place in the plan of the Constitution. However, it is fair to say that from those decisions no firm consensus emerges which is to the contrary of what has been said in these reasons210. 207 (1975) 134 CLR 338 at 386-387. 208 (1908) 7 CLR 179. 209 (1945) 71 CLR 237; [1945] HCA 30. 210 See Zines, The High Court and the Constitution, 5th ed (2008) at 351-354. Crennan Bell The difficulty with some of the reasoning in the earlier cases in significant measure is the consequence of the form of the argument presented by the Commonwealth in the Pharmaceutical Benefits Case, to which the judgments responded and which they rejected. The holding of invalidity of the legislation largely was based on a minor premise. This assumed that s 81 conferred a "spending power" but constrained it by the phrases "for the purposes of the Commonwealth" in s 81211 or "by law" in s 83212. However, the result in Pharmaceutical Benefits should today be supported by denial of the major premise. Dr Coppel KC, who appeared for the Commonwealth, relied upon "the power to spend under s 81", which was "as wide as the power to tax", and "perhaps, for all practical purposes unlimited"213. The Commonwealth submitted that s 51(xxxix) provided for the means of execution of the power to spend money. That submission reflected the long held view of those instructing counsel for the Commonwealth that s 81 enabled achievement of a financial outcome for the Executive Government without the need for legislation having a root outside s 81. That view saw a power of expenditure as the concomitant of the wide power of taxation enjoyed by the Commonwealth. It had been vigorously expressed by Sir Robert Garran in his evidence given to the 1929 Royal Commission on the Constitution of the Commonwealth. He said214: "There is in the Commonwealth Constitution no limitation whatever of the The purposes for which money may be raised by Commonwealth Government can increase its taxation to any extent, and what constitutional or other reason there can be for limiting its power to spend the money so raised, I confess I am unable to see." taxation. In particular, reliance upon a combination of s 81 and s 51(xxxix) made it unnecessary for the Executive Government of the Commonwealth to risk a narrow construction of what might be achieved by use of the power associated with s 61, with or without legislation relying upon s 51(xxxix). 211 See (1945) 71 CLR 237 at 266 per Starke J, 282 per Williams J. 212 See (1945) 71 CLR 237 at 264 per Rich J, 271-272 per Dixon J. 213 (1945) 71 CLR 237 at 245. 214 Australia, Report of the Royal Commission on the Constitution, (1929), Minutes of Evidence, Pt 1 at 71. Crennan Bell That construction of s 81 was urged once more by the Commonwealth as its primary argument in the present case, and it was opposed by the plaintiff and by New South Wales, South Australia and Western Australia. For the reasons given above and following, it should be rejected. Conclusions respecting s 81 Section 81 does not occupy either of the decisive (but opposing) positions which the plaintiff and the defendants sought to give it. The section does not support the validity of the Bonus Act (contrary to the defendants' submission), and the existence of the appropriation made by s 16 of the Administration Act is not impeached by the absence of s 81 as legislative support for the Bonus Act (contrary to the plaintiff's second submission). There is no support in the text or structure of the Constitution for the construction for which the plaintiff contends in his second submission, treating the phrase in s 81 "for the purposes of the Commonwealth" as containing words of limitation of legislative power. The plaintiff answers reliance by the defendants upon s 16 of the Administration Act as the appropriation supporting the payments by the Commissioner under s 7 of the Bonus Act by construing s 81 as requiring a link to a head of legislative power. That submission should be rejected. An issue of legislative power arises, but it does so with the challenge by the plaintiff in Question 2 of the Special Case to the validity of the Bonus Act itself. It does not arise with respect to the operation of s 81. At Westminster and Whitehall Matters of Imperial and colonial history respecting the raising and expenditure of public moneys support these conclusions respecting the power of appropriation conferred by the Constitution. A knowledge of legal history is indispensable to an appreciation of the essential characteristics of the power of appropriation in the Constitution; it affords an understanding of the setting in which the Constitution was formulated. This case thus illustrates the importance of the remarks on the subject of legal history by Gleeson CJ in Singh v The Commonwealth215. 215 (2004) 222 CLR 322 at 331-332 [8]-[10]; [2004] HCA 43. Crennan Bell Even before Cole v Whitfield216 broadened the scope of constitutional interpretation some attention had been given to successive draft bills for the Constitution which were debated in 1891, 1897 and 1898217. However much this may have been the practice before Cole v Whitfield, that case undoubtedly supports the giving of attention to considerations not expressly adverted to in the earlier decisions of this Court respecting s 81 and s 83. To these matters of Imperial and colonial history we now turn. They also give the setting for the provision made by s 61 respecting the executive power of the Commonwealth, which it will be necessary to treat when considering Question 2. For the United Kingdom executive government (identified as "the Crown")218 to function it was necessary to provide the "ways and means" for the raising of the revenue to fund its activities and for the appropriation of that revenue to make it available to the executive government for expenditure. Much of the development in the United Kingdom of a parliamentary system of government in the period before 1900 had concerned the control of the power of the purse. The significance of this for Australia was well appreciated by Alfred Deakin when he said as early as 1902 (and with the later approbation of Sir "As the power of the purse in Great Britain established by degrees the authority of the Commons, so it will in Australia ultimately establish the authority of the Commonwealth." In the United Kingdom, the control by the Parliament (particularly by the House of Commons) was effected by the principles that (i) taxes were to be imposed only by the authority of statute220, and (ii) public moneys were subject to 216 (1988) 165 CLR 360 at 385; [1988] HCA 18. 217 New South Wales v The Commonwealth (The Incorporation Case) (1990) 169 CLR 482 at 501-502; [1990] HCA 2. 218 In Sue v Hill (1999) 199 CLR 462 at 497-503 [83]-[94]; [1999] HCA 30, reference was made to the various senses in constitutional theory and practice in which that term has been used. 219 Central Power in the Australian Commonwealth, (1967) at 94. 220 Commissioner of Stamps (SA) v Telegraph Investment Co Pty Ltd (1995) 184 CLR 453 at 465-468; [1995] HCA 44. Crennan Bell to a parliamentary control, until expended by parliamentary appropriation221. Here lie the antecedents of the concurrent treatment in provisions such as s 56 and s 53 of the Constitution of proposed laws raising and appropriating revenue, a matter referred to earlier in these reasons. the executive pursuant At the time of the adoption of the Constitution the received understanding in the United Kingdom of the place of appropriations in the relationship between the executive and the legislature was stated in the then current edition of Erskine May's work222 as follows: "The Sovereign, being the executive power, is charged with the management of all the revenue of the state, and with all payments for the public service. The Crown, therefore, acting with the advice of its responsible ministers, makes known to the Commons the pecuniary necessities of the government; the Commons, in return, grant such aids or supplies as are required to satisfy these demands; and they provide by taxes, and by the appropriation of other sources of the public income, the ways and means to meet the supplies which they have granted. Thus the Crown demands money, the Commons grant it, and the Lords assent to the grant: but the Commons do not vote money unless it be required by the Crown; nor do they impose or augment taxes, unless such taxation be necessary for the public service, as declared by the Crown through its constitutional advisers. The demand by the Crown for grants of aid and supply for the service of each financial year is made in the speech from the throne at the opening of Parliament. The sovereign addresses the Commons, demands the annual supply for the public service, and acquaints them that estimates will be laid before them of the amount that will be required. The form in which the Commons vote those supplies is consequently a resolution that each sum 'be granted to her Majesty;' nor is a grant of supply, even when endowed with the force of law, available for use until the sovereign puts it 221 Durell, The Principles and Practice of the System of Control over Parliamentary Grants, (1917) at 3-4; Campbell, "Parliamentary Appropriations", 4 Adelaide Law Review 145 at 145-147; Selway, The Constitution of South Australia, (1997) at 127-128. 222 A Treatise on the Law, Privileges, Proceedings and Usage of Parliament, 10th ed (1893) at 515-516. See also Hearn, The Government of England: Its Structure and Its Development, 2nd ed (1886) at 376-378, quoted in Quick and Garran, The Annotated Constitution of the Australian Commonwealth, (1901) at 681. Crennan Bell at the disposal of the treasury by a royal order under the sign manual." (citation omitted) The Royal Order was addressed to the Commissioners of the Treasury and recited the grant of the sums mentioned in the Schedule to the Order "to defray the expenses of the Public Supply Services" which would come "in course of payment" in the next year; the Order directed the Commissioners to authorise the Bank of England to transfer the requisite sums to the accounts of those charged with payment of these Services223. It was important, as appears from the treatment of "Revenue" in the first edition of Halsbury's Laws of England, published in 1912224: "to distinguish between the control which consists in determining in anticipation how the revenue is to be spent, and therefore ends with the act of voting, and that which is exercised over those who actually expend the grants, by the knowledge that accounts will have to be submitted and will be carefully scrutinised. It is only in recent times that Parliament has sought to obtain this latter form of control." Thus, legislation controlled the actual receipt and issue of public money and provided for the examination of the accounts of all supply grants for the purpose of reporting thereon to the House of Commons: Exchequer and Audit Departments Act 1866 (UK)225. This system was adapted in the Australian colonies and the review and audit laws of the colonies were carried over by s 97 of the Constitution until the Parliament otherwise provided. It has done so first by the Audit Act 1901 (Cth) and more recently by the Auditor-General Act 1997 (Cth) and the Financial Management and Accountability Act 1997 (Cth)226. These are laws supported at least by s 51(xxxvi) of the Constitution, as matters in respect of which the Constitution made provision in s 97 until the Parliament otherwise provided. They may also be laws with respect to matters incidental to the execution of the power of appropriation vested in the Parliament and so supported by s 51(xxxix). It is unnecessary to pursue that question. 223 A form of Royal Order is set out in Anson, The Law and Custom of the Constitution, 4th ed (1935), vol 2, pt 2 at 372-373. 224 Vol 24, Title "Revenue" at 539, fn (b). 225 29 & 30 Vict c 39. See Halsbury's Laws of England, 1st ed (1912), vol 24, Title "Revenue", §§1049-1056. 226 See Combet v The Commonwealth (2005) 224 CLR 494 at 569 [140], 570-572 Crennan Bell The degree of the control of the public purse by the House of Commons was qualified in at least three relevant respects. First, the Commons relinquished their annually exercised power over expenditure when a standing appropriation was enacted, because such appropriations do not need to be included in annual appropriations. Secondly, as the dispute in Combet v The Commonwealth illustrates and as the Court in that case held227, it is for the legislature to identify the degree of specificity with which the purpose of an appropriation is identified. One consequence is that, as Jacobs J indicated in the AAP Case228, the description given to items of appropriation provides an insufficient textual basis for the determination of issues of constitutional fact and for the treatment of s 81 as a criterion of legislative validity. This underlines the conclusion reached earlier in the present reasons which denies to s 81 the character of a legislative "spending power". The third aspect is a development of the second. It concerns the wide scope in the United Kingdom of appropriation for expenditure by the executive for "the Public Service". An understanding of this will assist in the construction of s 61 of the Constitution. Appropriation was provided in the United Kingdom by annual grants for the "Public Service" and after 1787 by charges upon the Consolidated Fund established by the statute 27 Geo III c 13 ("the Consolidated Fund Act"). The Consolidated Fund had been designed to receive "every Stream of the Public Revenue, and from whence shall issue the Supply for every Public Service" and thereby introduce "the most simple of all Modes of Account into the Depository of the Public Treasure"229. The phrase "Public Service" was not used in this period and thereafter as a limitation upon the activities of the executive branch of government. Rather, it encompassed the range of those activities conducted from time to time230, and whether pursuant to statute or to what in the United Kingdom might be identified as "the prerogative". The concept of "Public Service" extended to what Pitt the Younger, in speaking in 1798 on the new income tax 227 (2005) 224 CLR 494 at 577 [160]-[161]. 228 (1975) 134 CLR 338 at 411. 229 Great Britain, The Thirteenth Report of the Commissioners appointed to Examine, Take, and State, the Public Accounts of the Kingdom, (1785) at 60. 230 See Pfizer Corporation v Ministry of Health [1965] AC 512 at 533-534, 566-567. Crennan Bell introduced to meet a financial emergency caused by the war with Revolutionary France231, described as232: "every purpose of national safety and glory ... every advantage of permanent credit and of increased prosperity". Chitty distinguished the Civil List voted to the sovereign from the appropriation of the rest "to the public service", saying233: "The civil list is indeed properly the whole of the King's revenue in his own distinct capacity; the rest being rather the revenue of the public, or its creditors, though collected and distributed again, in the name and by the officers of the Crown". Blackstone had written in similar terms234. There is seen in such writings the themes that taxation was a gift to the executive government made by the Commons, the representative chamber, and was then disbursed for the benefit of the body politic235. The House of Commons (Disqualification) Act 1782 (UK)236 is a progenitor of s 44(v) of the Constitution. This was noted by Barwick CJ in In re Webster237. The earlier statute spoke of disqualification by reason of the interest of a Member in any contract "for or on account of the public service", and s 44(v) speaks of "any direct or indirect pecuniary interest in any agreement with the statute, Public Service of the Commonwealth". the 1782 231 Pitt faced a deficit of Β£17m and the new tax in 1799 yielded about Β£6m: Arnold-Baker, The Companion to British History, (1996), Title "Income Tax" at 232 Bland, Brown and Tawney (eds), English Economic History: Select Documents, 233 Chitty, A Treatise on the Law of the Prerogatives of the Crown, (1820) at 201. 234 Commentaries on the Laws of England, (1765), bk 1, ch 8 at 321. 235 See also Goldsworthy, The Sovereignty of Parliament, (1999) at 69-70, 192-194. 236 22 Geo III c 45, s 1. 237 (1975) 132 CLR 270 at 278; [1975] HCA 22. Crennan Bell Viscount Haldane LC said that the phrase in question reached "any service of the Crown anywhere"238. The Australian situation The development in the Australian colonies of representative and responsible government during the second half of the nineteenth century presented several issues which are relevant for the present case. One concerned the sharing or division of executive power between the Imperial and colonial governments239. Another required the making of legislative provision for parliamentary control of the appropriation of public moneys for the purposes of the colonial executive governments. In New South Wales, s 47 in Sched (1) to the New South Wales Constitution Act 1855 (Imp)240 provided for all revenues of the Crown, from whatever source arising in the colony and over which the legislature had power of appropriation, to form: "One Consolidated Revenue Fund, to be appropriated for the Public Service of this Colony". No part of the revenue in the Colony arising from an appropriation was to issue except in pursuance of warrants under the hand of the Governor and directed to the Public Treasurer (ss 54, 55). Similar provisions were made for Victoria in the same year241. The result was later described by Mr H B Higgins as having been to make it "impossible to impugn any appropriation for Victoria or New South Wales"242. 238 In re Samuel [1913] AC 514 at 526. 239 See Yougarla v Western Australia (2001) 207 CLR 344 at 358-362 [31]-[37]; [2001] HCA 47. 240 18 & 19 Vict c 54. 241 By s 44 and by ss 57 and 58 respectively in Sched (1) to the Victoria Constitution Act 1855 (Imp) (18 & 19 Vict c 55); see Jenks, The Government of Victoria (Australia), (1897) at 279-284. Provision in similar terms also was made by the Constitution Act 1867 (Q), s 34; the Constitution Act 1889 (WA), s 64; in s 54 of the New Zealand Constitution Act 1852 (Imp) (15 & 16 Vict c 72), and in Canada by s 106 and s 126 of the British North America Act 1867 (Imp) (30 Vict c 3). 242 Australia, House of Representatives, Parliamentary Debates (Hansard), 9 July Crennan Bell It was no doubt with an understanding of these matters of law and practice both at Westminster and in Whitehall and in the colonies that Isaacs and Rich JJ in The Commonwealth v Colonial Ammunition Co Ltd243 explained the operation of the mechanism of supply and appropriation as being "simply to furnish the [Executive Government] with authority and opportunity to obtain the money it desires for the government of the country". After referring to Durell on Parliamentary Grants244, their Honours identified the function of the Parliament as "financial, not regulative" and as not being concerned with "general legislation"245. Hence, the statement by Mason J in the AAP Case246: "An Appropriation Act therefore is something of a rara avis in the world of statutes; its effect is limited in the senses already explained; apart from this effect it does not create rights, nor does it impose duties." The drafting of s 81 of the Constitution Against this background, it is unsurprising that the 1891 draft constitution prepared by Inglis Clark provided for a Consolidated Revenue Fund which was to be appropriated by the federal Parliament "for the Public Service of the Federal Dominion of Australasia"247. It became apparent, as the processes of drafting of the Constitution continued in the years after 1891, that even the broad expression "for the Public Service" of the proposed new federal polity might not extend to new and federal subject matter. This included grants to the States under what became s 96, and the provisions for the payments to the States before the imposition of uniform duties of customs (s 89), the distribution of all surplus revenue of the Commonwealth (s 94), the funding of pensions of certain former State public servants (s 84) and compensation to the States for property passing to the Commonwealth under s 85. At the Melbourne Convention, on 14 February 1898, Mr Isaacs suggested that the words "public service of the Commonwealth" were not sufficiently large to cover the proposed return of moneys to the States248. 243 (1924) 34 CLR 198 at 222; [1924] HCA 5. 245 (1924) 34 CLR 198 at 224. 246 (1975) 134 CLR 338 at 393. 247 Williams, The Australian Constitution, (2005) at 80-81, 91. 248 Official Record of the Debates of the Australasian Federal Convention, (Melbourne), 14 February 1898 at 900. Crennan Bell What Quick and Garran describe as a "drafting amendment" by the substitution of "purposes" for "public service" then was made "to make it clear that the payments to the States, under ss 89 and 93, were included"249. The amendment was made to confirm the extended reach of s 81, not to place a limit upon its scope. In the commentary on s 81 of the Constitution, they wrote250: "'The purposes of the Commonwealth' include the payments to the States made by virtue of the Constitution. The States being 'parts of the Commonwealth,' expenditure by the federal government in pursuance of its constitutional liability to the States is as much a 'purpose of the Commonwealth' as its expenditure upon the services of the federal government." In construing s 81, regard should be had to this history. This supports the statement by Dixon J in the Pharmaceutical Benefits Case251 that s 81 is but "a provision in common constitutional form substituting for the usual words 'public service' the word 'purposes' of the Commonwealth only because they are more appropriate in a Federal form of government". In the course of argument, Dixon J said of the substitution of "the purposes" for "the Public Service" that "[i]t was merely done as a piece of draftsmanship, without much reflection"252. Section 83 of the Constitution Before turning to Question 2, there remains the third submission by the plaintiff, namely that there is no appropriation "made by law" as required by s 83 of the Constitution. It is said that taken by itself the Bonus Act contains no appropriation. For the reasons given under the heading "Question 3 β appropriation", that submission should be rejected. However, given the consideration given to s 83 in the Pharmaceutical Benefits Case, something further should be said respecting s 83. 249 Quick and Garran, The Annotated Constitution of the Australian Commonwealth, 250 Quick and Garran, The Annotated Constitution of the Australian Commonwealth, 251 (1945) 71 CLR 237 at 271. 252 Transcript, 10 October 1945 at 198. Crennan Bell What then is conveyed by the requirement that the drawing be under appropriation "made by law"? The provision resembles Art I, Β§9, cl 7 of the United States Constitution which, in part, reads: "No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law". Story said of the object of this provision253: "As all the taxes raised from the people, as well as the revenues arising from other sources, are to be applied to the discharge of the expenses, and debts, and other engagements of the government, it is highly proper, that congress should possess the power to decide, how and when any money should be applied for these purposes. If it were otherwise, the executive would possess an unbounded power over the public purse of the nation; and might apply all its monied resources at his pleasure. ... Congress is made the guardian of this treasure". The reference to the Congress, and thus to both legislative chambers, is significant. The primacy of the House of Commons with respect to money bills gave a different slant to the subject in the United Kingdom. This gave rise to controversy in the Australasian colonies after the establishment of bicameral legislatures and the assertion by lower houses of an authority comparable to that of the House of Commons254. Against this background, the inclusion in s 83 of the Constitution of the words "by law" served, as Harrison Moore wrote255: "[to exclude] the once popular doctrine that money might become legally available for the service of Government upon the mere votes of supply by the Lower House". Thus s 83 affirms that a vote or resolution of either chamber cannot suffice256. Where, for the purposes of the Constitution, a resolution rather than a law will suffice, as it does for the exception as to bounties made by s 91, the Constitution 253 Commentaries on the Constitution of the United States, (1833), vol 3 at 213-214. 254 Twomey, The Constitution of New South Wales, (2004) at 532-537. 255 The Constitution of the Commonwealth of Australia, 2nd ed (1910) at 522-523. 256 Combet v The Commonwealth (2005) 224 CLR 494 at 558 [103]. Crennan Bell expressly so provides. Further, the phrase "by law" is apt also to include those appropriations, such as for the salaries of the Governor-General (s 3), and Ministers (s 66), which are made by force of the Constitution itself. In the Pharmaceutical Benefits Case257, however, Dixon J went further. He said that: "s 83, in using the words 'by law' limits the power of appropriation to what can be done by the enactment of a valid law". Section 83 thus provided the path by which Dixon J responded to the Commonwealth's submission as to the width of "the power to spend" and in doing so his Honour reached the point which the plaintiff seeks by fixing upon the phrase "the purposes of the Commonwealth" in s 81. For the reasons that have been given above respecting the place of appropriation in the scheme of the Constitution, neither construction of s 81 and s 83 should be accepted. Nor, as explained above, should the Commonwealth respecting the "spending power". that broad, and reiterated, submission by It is now convenient to pursue that aspect of the Special Case by turning to Question 2. Question 2 β validity Question 2 asks whether the Bonus Act is a valid law of the Commonwealth. The statute is a valid law of the Commonwealth. The Bonus Act is a law with respect to matters incidental to the execution of a power vested by the the Constitution "in Commonwealth" (s 51(xxxix)), being the executive power of the Commonwealth recognised by s 61, vested in the Queen and exercisable by the Governor- General. the Government of The Executive Government of the Commonwealth The text of the Constitution in ss 67, 70, 81, 84 and 86 assumes the existence and conduct of activities of government by what it identifies as "the 257 (1945) 71 CLR 237 at 271. He had long held this view; see Saunders, "The Development of the Commonwealth Spending Power", (1978) 11 Melbourne University Law Review 369 at 385; Australia, Report of the Royal Commission on the Constitution, (1929), Minutes of Evidence, Pt 3 at 780. Crennan Bell Executive Government of the Commonwealth". It is upon that understanding that Ch II (ss 61-70) is headed "The Executive Government" and s 61 states: "The executive power of the Commonwealth is vested in the Queen and is exercisable by the Governor-General as the Queen's representative, and extends to the execution and maintenance of this Constitution, and of the laws of the Commonwealth." The Constitution assumes also, in s 119258, the existence and conduct of activities by "the Executive Government of the State". The conduct of the executive branch of government includes, but involves much more than, enjoyment of the benefit of those preferences, immunities and exceptions which are denied to the citizen and are commonly identified with "the prerogative"; the executive power of the Commonwealth enables the undertaking of action appropriate to the position of the Commonwealth as a polity created by the Constitution and having regard to the spheres of responsibility vested in it259. With that understanding, the phrase "maintenance of this Constitution" in s 61 imports more than a species of what is identified as "the prerogative" in constitutional theory. It conveys the idea of the protection of the body politic or nation of Australia. In The Commonwealth v Colonial Combing, Spinning and Weaving Co Ltd ("the Wool Tops Case"), Isaacs J said260: "When the Constitution was framed there were six separate Colonies, six separate 'constitutional units,' in Australia. In the aggregate they covered the whole territory of the continent of Australia. Each had its separate Constitution and laws, throughout the territory of each the Sovereign exercised the executive power of the Colony in accordance with the local Constitution, and by the advice of local Ministers, and that executive power, by whatsoever functionary exerted, extended to the execution and maintenance of the Colonial Constitution and laws. But the limit of executive jurisdiction as to every Colony was its geographical area, and that was easily gathered from its Constitution as a truth long familiar. 258 See also s 110 which refers to the administration of the government of a State. 259 Re Residential Tenancies Tribunal (NSW); Ex parte Defence Housing Authority (1997) 190 CLR 410 at 464; [1997] HCA 36; Ruddock v Vadarlis (2001) 110 FCR 491 at 540. 260 (1922) 31 CLR 421 at 439. Crennan Bell Over the whole of that geographical area, and not beyond it, the local Government exercised executive power β and normally the power was exclusive." His Honour then observed that the creation by the Constitution of the Commonwealth "superimposed" upon the constituent States a new constitutional unit, and went on261: "Two conditions had, therefore, to be satisfied. First, the constitutional domain of the new unit had to be delimited and distinguished from the respective constitutional domains of the States, and, next, that could not be done simply in terms of territory. It was found by applying to the territory certain powers β powers differently phrased with respect to the three branches of government. As to the executive power, it was delimited by attaching to the notion of territory, which is always connoted, the words 'extends to the maintenance of this Constitution, and of the laws of the Commonwealth.'" What the text of the Constitution did not attempt was to detail the respective relationships between those Executive Governments and between them and the Imperial Government262. With respect to the latter, the matter was fully settled only upon the commencement of the Australia Act 1986 (Cth)263. There could thereafter, even if not before 1986, be no doubt that the polity which the Constitution established and maintains is an independent nation state with a federal system of government. But it is as well to recall that references to "nationhood" and the like in the decisions of this Court may be traced to its earliest years. In Commissioners of Taxation (NSW) v Baxter264 Griffith CJ, Barton and O'Connor JJ said: "The object of the advocates of Australian federation, then, was not the establishment of a sort of municipal union, governed by a joint committee, like the union of parishes for the administration of the Poor Laws, say in the Isle of Wight, but the foundation of an Australian Commonwealth 261 (1922) 31 CLR 421 at 439-440. 262 See the remarks of Brennan J in Davis v The Commonwealth (1988) 166 CLR 79 at 108; [1988] HCA 63. 263 Sue v Hill (1999) 199 CLR 462. 264 (1907) 4 CLR 1087 at 1108; [1907] HCA 76. Crennan Bell embracing the whole continent with Tasmania, having a national character, and exercising the most ample powers of self-government consistent with allegiance to the British Crown." It has also long been recognised that in ascertaining the boundaries of the authority of the Executive Government of the Commonwealth in any given situation there will be a need to deal, as Isaacs J put it, with "new positions which the Nation in its progress from time to time assumes"265. Express provision was made in s 109 respecting the exercise of concurrent legislative powers. But what are the respective spheres of exercise of executive power by the Commonwealth and State governments? We have posed the question in that way because it is only by some constraint having its source in the position of the Executive Governments of the States that the government of the Commonwealth is denied the power, after appropriation by the Parliament, of expenditure of moneys raised by taxation imposed by the Parliament. Otherwise there appears no good reason to treat the executive power recognised in s 61 of the Constitution as being, in matters of the raising and expenditure of public moneys, any less than that of the executive in the United Kingdom at the time of the inauguration of the Commonwealth. New South Wales submitted that the Constitution split the executive and legislative power of the respective bodies politic in a particular way so as to effect an accommodation between them. The executive power, whether of the Commonwealth or the States, it was said, "continues to be subservient to legislative power irrespective of whether the source of the legislative power is State or Commonwealth". There are difficulties with that submission and, like the submission itself, these are fundamental in nature. First, the submission gives insufficient acknowledgement to the comparative superiority of the position of the Commonwealth in the federal structure. That superiority informs the doctrine associated with the judgment of Dixon CJ in The Commonwealth v Cigamatic Pty Ltd (In liq)266, and concerns the placement beyond the reach of the States of rights "belonging to the Commonwealth as a government" and of the "legal rights 265 The Commonwealth v Colonial Combing, Spinning and Weaving Co Ltd (1922) 31 CLR 421 at 438. 266 (1962) 108 CLR 372 at 377-378; [1962] HCA 40. See, further, Re Residential Tenancies Tribunal (NSW); Ex parte Defence Housing Authority (1997) 190 CLR 410 at 441-442, 453-454, 469-470. Crennan Bell and duties between the Commonwealth and its people". Secondly, the submission of New South Wales, in speaking in terms of continuation, gives insufficient weight to the creation by the Constitution of a new body politic which enjoyed capacities superior to that of a mere aggregation of the federating colonies. State laws of general application may regulate activities of the Executive Government of the Commonwealth in the same manner as persons generally267, and, by the exercise of its legislative powers, the Commonwealth may affect the executive capacity of a State, but the States do not have power to affect the capacities of the Executive Government of the Commonwealth268. The submission for New South Wales referred to the position of s 109 in the scheme of the Constitution. But that weakens rather than strengthens its submission. In Re Residential Tenancies Tribunal (NSW); Ex parte Defence Housing Authority269, after referring to s 109, Dawson, Toohey and Gaudron JJ said: "The States, on the other hand, do not have specific legislative powers which might be construed as authorising them to restrict or modify the executive capacities of the Commonwealth. The legislative power of the States is an undefined residue which, containing no such authorisation, cannot be construed as extending to the executive capacities of the Commonwealth. No implication limiting an otherwise given power is needed; the character of the Commonwealth as a body politic, armed with executive capacities by the Constitution, by its very nature places those capacities outside the legislative power of another body politic, namely a State, without specific powers in that respect. Having regard to the fundamental principle recognised in Melbourne Corporation v The Commonwealth, only an express provision in the Constitution could authorise a State to affect the capacities of the Commonwealth executive and there is no such authorisation." 267 Re Residential Tenancies Tribunal (NSW); Ex parte Defence Housing Authority (1997) 190 CLR 410 at 427, 443-444, 455, 473-474. 268 The Commonwealth v Western Australia (1999) 196 CLR 392 at 471 [229]; [1999] HCA 5. 269 (1997) 190 CLR 410 at 440. Crennan Bell In the same case, Brennan CJ stated that the States lack any legislative power that can reach the executive power of the Commonwealth270. A question thus may arise whether there is applicable to the scope of s 61 that very broad proposition concerning the extent of the common weal which was expressed in the United Kingdom constitutional theory in the notion of the public service of the Crown. That such notions were understood in the drafting of the Constitution is apparent from the provisions of s 52(i) of the Constitution. This contemplates the acquisition by the Commonwealth of "places ... for public purposes". The notion here of the public purposes of the Commonwealth resembles that of the public service understood in the Imperial and colonial application of moneys appropriated by the legislature and discussed earlier in these reasons. There is here, as Windeyer J put it in Worthing v Rowell and Muston Pty Ltd271, the expression of "a large and general idea". He added272: "[P]ublic purposes are not necessarily purposes for which the Parliament can make laws. I can see no reason why the Commonwealth, or a Commonwealth statutory body on behalf of the Commonwealth, should not be able to accept a gift from a landowner by his deed or will of land for the purpose, say, of a public park, just as I suppose it could become by gift possessed of pictures or books for public use and enjoyment." However, in deciding the validity of the Bonus Act it is unnecessary to attempt to determine the outer limits of the executive power. One such settled limit, that respecting the need for statutory authority to support extradition from in Vasiljkovic v The Australia of Commonwealth273. the Executive Government to dispense with obedience to the law274. fugitive offenders, was affirmed Another concerns incapacity of the After denying the proposition that the Constitution created no more than an aggregation of colonies, with a redistribution of powers between the federal 270 (1997) 190 CLR 410 at 424-426. See also at 457-458 per McHugh J, 473-474 per 271 (1970) 123 CLR 89 at 125; [1970] HCA 19. 272 (1970) 123 CLR 89 at 127. 273 (2006) 227 CLR 614 at 634-635 [49]-[50]; [2006] HCA 40. 274 A v Hayden (1984) 156 CLR 532 at 580-581; [1984] HCA 67; White v Director of Military Prosecutions (2007) 231 CLR 570 at 592 [37]; [2007] HCA 29. Crennan Bell and State governments275, Brennan J went on in Davis v The Commonwealth276 to say: "It does not follow that the Executive Government of the Commonwealth is the arbiter of its own power or that the executive power of the Commonwealth extends to whatever activity or enterprise the Executive Government deems to be in the national interest. But s 61 does confer on the Executive Government power 'to engage in enterprises and activities peculiarly adapted to the government of a nation and which cannot otherwise be carried on for the benefit of the nation', to repeat what Mason J said in the AAP Case277. In my respectful opinion, that is an appropriate formulation of a criterion to determine whether an enterprise or activity lies within the executive power of the Commonwealth." That formulation should be accepted, subject to qualifications which it will be necessary to develop later in these reasons. The formulation, and the qualifications to be made, together emphasise a point made by six members of the Court in the joint reasons in R v Hughes278. This was that while s 51(xxxix) authorises the Parliament to legislate in aid of the executive power, that does not mean that it may do so in aid of any subject which the Executive Government regards as of national interest and concern. The present crisis This case requires consideration of certain novel or at least unusual matters which are not contested for the purposes of the Special Case. Some of these are identified, in short form, earlier in these reasons. In the determination of the existence of facts said to attract the exercise of the executive power of the Commonwealth, as with other matters of constitutional fact, the Court may rely on agreed facts279. The agreement of the plaintiff in the present case to the matters detailed in the Special Case was qualified only as to their relevance. They are relevant at least to the operation of the executive power. 275 (1988) 166 CLR 79 at 110. 276 (1988) 166 CLR 79 at 111. 277 (1975) 134 CLR 338 at 397. 278 (2000) 202 CLR 535 at 555 [39] per Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ; [2000] HCA 22. 279 Thomas v Mowbray (2007) 233 CLR 307 at 517 [629]; [2007] HCA 33. Crennan Bell Collectively the facts emphasise the unusual nature of the current economic times being experienced globally and in the domestic national economy. Rapid changes in macroeconomic circumstances globally have caused the Commonwealth Department of the Treasury to revise economic forecasts downwards from those released in the 2008-2009 Budget on 13 May 2008. The Government has published a document entitled Updated Economic and Fiscal Outlook, in which it is stated that the world is experiencing a global recession triggered by a global financial and economic crisis which is the most severe deterioration in the global economy since the Great Depression and the most significant economic crisis since the Second World War. The revised forecasts mentioned foreshadow significantly weaker domestic growth and higher unemployment. Reports and statements provided by international bodies, the Group of Twenty280 and the International Monetary Fund281, emphasise the global nature of the current financial and economic crisis. The Group of Twenty, colloquially the G20, is an informal forum of Finance Ministers and Central Bank Governors established in 1999 to discuss key issues in the global economy. Australia is a member. Such is the background and context in which the Commonwealth Government has announced three "fiscal stimulus packages"282. The third and most recent "package" includes the payment of the tax bonus pursuant to the Bonus Act. The defendants contend that the purpose of the tax bonus is immediate fiscal stimulus to the economy to support economic growth and employment and to help reduce the impact of the global recession in Australia. They also contend that without a timely stimulus to the economy of this kind, Australia would face a more severe financial and economic slowdown than has been forecast. It was alleged that the global conditions were extraordinary and that that circumstance gives rise to the need for a fiscal stimulus to support economic growth and jobs. It was said that the fiscal stimulus was targeted towards low and middle income households, which are most likely to spend the additional income and are most vulnerable during the economic downturn. Swiftness of execution was said to be desirable. 280 Declaration of the Summit on Financial Markets and the World Economy, 15 November 2008. 281 World Economic Outlook Update, 28 January 2009. 282 The Economic Security Strategy announced on 14 October 2008; the Nation Building Package announced on 12 December 2008; and the Nation Building and Jobs Plan announced on 3 February 2009 [SCB 24 [13]]. Crennan Bell Conclusions respecting s 61 and s 51(xxxix) In determining whether the Bonus Act is supported by s 61 and s 51(xxxix) of the Constitution, it is necessary to ask whether determining that there is the need for an immediate fiscal stimulus to the national economy, in the circumstances set out above, falls within executive power and then to ascertain whether s 51(xxxix) of the Constitution supports the impugned legislation as a law which is incidental to that exercise of executive power. As already mentioned, that there is a global financial and economic crisis is not contested in this proceeding. It can hardly be doubted that the current financial and economic crisis concerns Australia as a nation. Determining that there is the need for an immediate fiscal stimulus to the national economy in the circumstances set out above is somewhat analogous to determining a state of emergency in circumstances of a natural disaster. The Executive Government is the arm of government capable of and empowered to respond to a crisis be it war, natural disaster or a financial crisis on the scale here. This power has its roots in the executive power exercised in the United Kingdom up to the time of the adoption of the Constitution but in form today in Australia it is a power to act on behalf of the federal polity. The content of the power provided by s 61 of the Constitution presents a question of interpretation of the Constitution. That power has at least the limitations discussed in these reasons, but it is unnecessary in the present case to attempt an exhaustive description. A question presented in a particular controversy as to the existence of power provided by s 61 may be determined under Ch III of the Constitution with appropriately framed declaratory and other relief. The decision in Australian Communist Party v The Commonwealth283, to which reference was made in oral submissions, is not to the contrary. The provisions of the statute held in that case to be invalid included sections empowering the Governor-General to declare to be an "unlawful association" a body of persons in respect of which the Governor-General was "satisfied" of certain matters. Dixon J rejected a submission284 that the validity of such a declaration might be impugned upon the principles governing the exercise of discretionary powers which were considered in Water Conservation and 283 (1951) 83 CLR 1; [1951] HCA 5. 284 (1951) 83 CLR 1 at 180. Crennan Bell Irrigation Commission (NSW) v Browning285. One ground for that rejection was that the matters of which the Governor-General was to be satisfied were expressed in vague and indefinite terms286. Another was that decisions under statute of the Governor-General in Council had never been examined upon judicial review287. But that was said before FAI Insurances Ltd v Winneke288. What then is of immediate, and decisive, importance for the present case is the notion of national crisis captured by Sir Robert Garran in his evidence to the Royal Commission as follows289: "Political and national emergencies are so unknown and unforseeable that the framers of the Constitution decided to give an unlimited power of taxation to the Commonwealth Parliament. After all, when you have once had the power of raising the money, the power of spending it is one with which you may very easily entrust the parliament." Of course, the taxation power is not "unlimited". It must be employed "so as not to discriminate between States or parts of States" (s 51(ii)), nor by any law or regulation of revenue may the Commonwealth "give preference to one State or any part thereof over another State or any part thereof" (s 99). Nor may a subject of the Queen, resident in one State, be subject in any other State to discrimination as prohibited by s 117. Bounties on the production or export of goods must be "uniform throughout the Commonwealth" (s 51(iii)). The provision for payments made by the Bonus Act does not operate by any criterion which discriminates, gives preferences or has a lack of uniformity of application in the sense of these revenue and other provisions of the Constitution. The criteria for entitlement specified in s 5 of the Bonus Act are not of that character. Had the contrary been the case, then a question may have arisen as to the scope of the executive power to support a law resting on s 51(xxxix). 285 (1947) 74 CLR 492; [1947] HCA 21. 286 (1951) 83 CLR 1 at 185. 287 (1951) 83 CLR 1 at 180. 288 (1982) 151 CLR 342; [1982] HCA 26. 289 Australia, Report of the Royal Commission on the Constitution, (1929), Minutes of Evidence, Pt 1 at 72. In Davis v The Commonwealth290 Mason CJ, Deane and Gaudron JJ said: Crennan Bell "[T]he existence of Commonwealth executive power in areas beyond the express grants of legislative power will ordinarily be clearest where real Commonwealth executive or competition with State executive or legislative competence." legislative action involves no In the same case Brennan J remarked of the determination of whether an enterprise or activity lies within the executive power of the Commonwealth291: "It invites consideration of the sufficiency of the powers of the States to engage effectively in the enterprise or activity in question and of the need for national action (whether unilateral or in co-operation with the States) to secure the contemplated benefit." The governments of the States have the interest given by s 94 of the Constitution in the distribution of all surplus revenue of the Commonwealth, but, as remarked above, the Commonwealth has no obligation to tailor its expenditure to provide a surplus292. The Parliament may grant financial assistance to any State, but, by force of s 96, the Parliament may impose such terms and conditions as it thinks fit. The Parliament of the Commonwealth is constrained by s 114 of the Constitution from imposing any tax on property of any kind "belonging to a State". That prohibition is supplemented by the principles of federalism associated with Melbourne Corporation v The Commonwealth293 but no reliance is placed by the plaintiff or the interveners upon those doctrines. Further, to say that the power of the Executive Government of the Commonwealth to expend moneys appropriated by the Parliament is constrained by matters to which the federal legislative power may be addressed gives insufficient weight to the significant place in s 51 of the power to make laws with respect to taxation (s 51(ii)). The intervening States do not seriously dispute the Commonwealth has the resources available to respond promptly to the present financial crisis on the scale exemplified by the Bonus Act. The submissions of the interveners appear to have been moved more by apprehension of a wide that only 290 (1988) 166 CLR 79 at 93-94. 291 (1988) 166 CLR 79 at 111. 292 The State of New South Wales v The Commonwealth (1908) 7 CLR 179. 293 (1947) 74 CLR 31; [1947] HCA 26. Crennan Bell reading of the scope of s 61. But in considering what enterprises and activities are peculiarly adapted to the government of the country and which cannot otherwise be carried on for its benefit, this case may be resolved without going beyond the notions of national emergency and the fiscal means of promptly responding to that situation. It is not to the point to regret the aggregation of fiscal power in the hands of the Commonwealth over the last century. The point is that only the Commonwealth has the resources to meet the emergency which is presented to it as a nation state by responding on the scale of the Bonus Act. That Australia is a federal state does not produce the consequence that the policy determined upon by the Executive Government cannot be put into effect by measures such as the Bonus Act. The present is an example of the engagement by the Executive Government in activities peculiarly adapted to the government of the country and which otherwise could not be carried on for the public benefit. To the extent that the implementation of this policy involves the creation by s 7 of the Bonus Act of a right to receive the tax bonus and the imposition by s 8 of an obligation to restore overpayments, legislation is necessary and the authority to enact it is supplied by s 51(xxxix) of the Constitution. In that regard the reasoning of Latham CJ in the Pharmaceutical Benefits Case294 is important, albeit addressed to the attachment of s 51(xxxix) to s 81 not to an exercise of the executive power of the Commonwealth. It has long been established in the United Kingdom that the executive government cannot create a new offence and that limitation applies in this country295. Against that background, Latham CJ viewed as limited the extent to which s 51(xxxix) empowered the Parliament to make laws creating rights and imposing duties which were not incidental to the execution of another head of legislative power. The legislation held invalid in the Pharmaceutical Benefits Case by the creation of rights and imposition of duties attempted to control medical practice. This was a matter beyond the legislative powers of the Commonwealth. The entitlement to payment which is conferred by the Bonus Act is not a use of s 51(xxxix) of such a character; it is incidental to the effectuation of the fiscal stimulus policy. 294 (1945) 71 CLR 237 at 256-260. 295 Davis v The Commonwealth (1988) 166 CLR 79 at 112. The taxation power β s 51(ii) Crennan Bell submissions, the course of his oral the Commonwealth Solicitor-General made an important concession. It was that the defendants did not seek to support the Bonus Act as an exercise of the taxation power "to the extent that it would authorise payment to an individual of tax bonus that is in excess of that individual's adjusted tax liability". Without a reading down of s 6 of the Bonus Act, it was said that some 820,880 taxpayers, approximately 11 percent of recipients, would receive an amount greater than their adjusted liability. Later in the hearing the Solicitor-General proposed a reading down of s 6 as follows: "If a person is entitled to the tax bonus for the 2007-08 income year, the amount of his or her tax bonus is the lesser of the amount of the person's adjusted tax liability for that income year and: if the person's taxable income for that income year does not exceed if the person's taxable income for that income year exceeds $80,000 but does not exceed $90,000 β $600; or if the person's taxable income for that income year exceeds $90,000 but does not exceed $100,000 β $250." (emphasis supplied) The plaintiff responded that a reading down in these terms was beyond what the authorities in this Court permitted. He referred to the statement by Dixon J in Bank of NSW v The Commonwealth296: "[W]here severance would produce a result upon the persons and matters affected different from that which the entire enactment would have produced upon them, had it been valid, it might be said with justice that unless the legislature had specifically assented to that result, contingently on the failure of its primary intent, it could not amount to a law." Thereafter, in Victoria v The Commonwealth (Industrial Relations Act Case)297 the authorities were collected and one question they pose with respect to s 6 of 296 (1948) 76 CLR 1 at 371; [1948] HCA 7. 297 (1996) 187 CLR 416 at 502-503. Crennan Bell the Bonus Act is whether it was designed to operate fully and completely according to its terms or not at all. The plaintiff correctly submits that the lower income earners, whose position was of particular concern in the framing of this fiscal stimulus "package", are the most prejudiced by the reading down proposed by the defendants. The reading down suggested by the Solicitor-General must yield to the contrary intention298 to most benefit those who have paid the least tax. Section 6 cannot be read down as proposed. In aid of the submissions in support of the reading down proposed by the Solicitor-General, counsel referred to the reading down effected in R v Hughes299 and British American Tobacco Australia Ltd v Western Australia300. In the first case, the general words "functions and powers" were treated as limited to functions and powers in respect of matters within the legislative powers of the Parliament of the Commonwealth. In the second case, the phrase "in any suit to which ... a State is a party" was construed as applying to suits in which a State is a defendant. These decisions provide examples of that class of case where the phrase "shall nevertheless be a valid enactment to the extent to which it is not in excess of [the legislative] power [of the Commonwealth]" in s 15A of the Acts Interpretation Act 1901 (Cth) ("the Interpretation Act") is applied to a provision which is addressed "to a larger subject matter, territory or class of persons than the power allows". The words quoted are those of Dixon J in R v Poole; Ex parte Henry [No 2]301. In that case the word "aerodrome" was construed as applying to aerodromes used for air navigation with other countries and among the States. The proposed reading down of s 6 of the Bonus Act does not limit the provision to one or more of various operations otherwise encompassed by any form of general words. Rather, it seeks to introduce a foreign integer, namely the adjusted tax liability of those persons who otherwise would have answered the criteria in one of pars (a), (b) and (c) of s 6. To treat s 15A of the Interpretation 298 Re Dingjan; Ex parte Wagner (1995) 183 CLR 323 at 339 per Brennan J, 371-372 per McHugh J; [1995] HCA 16. 299 (2000) 202 CLR 535 at 556-557 [43]. 300 (2003) 217 CLR 30 at 66 [85]-[87]; [2003] HCA 47. 301 (1939) 61 CLR 634 at 652; [1939] HCA 19. Crennan Bell Act as authorising such a reading of s 6 would be to risk construing s 15A as impermissibly entrusting legislative power to Ch III courts302. The result is that the plaintiff has the benefit of the concession by the defendants and the Bonus Act is not supported by s 51(ii) of the Constitution. New South Wales sought to gainsay that concession by arguing that it was unnecessary because the Bonus Act in its terms was supported by s 51(ii). That submission, made orally after the concession by the defendants, may have exceeded the proper role of an intervener, but no objection was taken to it. In any event, the Bonus Act could not be sustained on the basis suggested. This is that the statute is analogous to that considered in Mutual Pools & Staff Pty Ltd v The Commonwealth303. That statute provided for the refund of payments of taxes paid pursuant to an invalid law. Here the Parliament has not acted to make any refund of tax lawfully exacted for the 2007-2008 income tax year. In Moore v The Commonwealth304, Dixon J said that the power conferred by s 51(ii) covers "what is incidental to the imposition and collection of taxation". The Bonus Act takes as the criterion of its operation certain taxpayers for the 2007-2008 income year. But that does not render the Bonus Act a law with respect to the imposition and collection of taxation. In particular, given the formulation of s 6 as enacted, the Bonus Act cannot be said to be "in substance" a law conferring a rebate of tax on income brought to account for 2007-2008. Other heads of power The defendants relied upon other heads of power, principally those with respect to trade and commerce (s 51(i)) and external affairs (s 51(xxix)). It is unnecessary to consider whether these also support the Bonus Act. 302 Western Australia v The Commonwealth (Native Title Act Case) (1995) 183 CLR 373 at 485-486; [1995] HCA 47. 303 (1994) 179 CLR 155 at 164-165; [1994] HCA 9. 304 (1951) 82 CLR 547 at 569; [1951] HCA 10. Crennan Bell Result The challenge by the plaintiff to the Bonus Act has failed. The further conduct of the plaintiff's action, from which the Special Case stemmed, should involve the taking of the necessary procedural steps to dismiss the action. 258 HAYNE AND KIEFEL JJ. On 3 February 2009, the Commonwealth Government published its Updated Economic and Fiscal Outlook. That document ("the 2009 Outlook") recorded that the International Monetary Fund ("the IMF") was forecasting "a deep global recession". The 2009 Outlook noted that advanced economies are expected to experience the sharpest collective decline in gross domestic product in the period since World War II and that the "key emerging economies" of China and India are expected to slow markedly. The global commodity boom, which was said to have provided significant stimulus to Australian growth and incomes over recent years, was described as "unwinding". The parties and interveners did not dispute that there is a global financial crisis. No party or intervener suggested that Australia stands apart from that crisis or is immune from its effects. In response to these circumstances, the Commonwealth Government has taken a number of steps. In particular, three "fiscal stimulus packages" have been announced: an "Economic Security Strategy" announced on 14 October 2008; a "Nation Building Package" announced on 12 December 2008; and a "Nation Building and Jobs Plan" announced in the 2009 Outlook. This litigation concerned the validity of one statute enacted as part of the third fiscal stimulus package, the Tax Bonus for Working Australians Act (No 2) 2009 (Cth) ("the Impugned Act"). The constitutional questions presented in this matter are deeper and more enduring than the particular and urgent circumstances that caused the enactment of the particular law. They raise issues that are fundamental to the constitutional structure of the nation, and transcend the immediate circumstances in which the questions were posed. The Impugned Act The long title of the Act is "An Act to provide for a tax bonus, and for related purposes". Its central provision is s 5, which reads: "(1) A person is entitled to a payment (known as the tax bonus) for the 2007-08 income year if: the person is an individual; and the person is an Australian resident for that income year; and the person's adjusted tax liability for that income year is greater than nil; and the person's taxable income for that income year does not exceed $100,000; and the person lodges his or her income tax return for that income year no later than: unless subparagraph (ii) applies β 30 June 2009; or if, before the commencement of this Act, the Commissioner deferred the time for lodgment of the return under section 388-55 in Schedule 1 to the Taxation Administration Act 1953 to a day later than 30 June 2009 β that later day. Exception for persons aged under 18 without employment income etc. (2) However, the person is not entitled to the tax bonus for the 2007-08 income year if: he or she is a prescribed person in relation to that income year and is not an excepted person in relation to that income year; and his or her assessable income for the income year does not include excepted assessable income." (The expressions "excepted person" and "prescribed person" are defined by s 4(1) of the Impugned Act as having the same meaning as in s 102AC of the Income Tax Assessment Act 1936 (Cth); the expression "tax offset" is defined as having the meaning given by the Income Tax Assessment Act 1997 (Cth).) Section 3 of the Impugned Act provides that "[t]he Commissioner has the general administration of this Act", and the "Commissioner" is defined in s 4(1) as the Commissioner of Taxation. The amount of the tax bonus is fixed by s 6 as $900 (if the person's taxable income for the 2007-08 income year does not exceed $80,000), $600 (if taxable income exceeds $80,000 but does not exceed $90,000) or $250 (if taxable income exceeds $90,000 but does not exceed $100,000). Section 7(1) provides that if the Commissioner is satisfied that a person is entitled to the tax bonus for the 2007-08 income year "the Commissioner must pay the person his or her tax bonus as soon as practicable after becoming so satisfied". Section 8 provides for recovery of overpayments and s 9 levies the general interest charge, worked out under Pt IIA of the Taxation Administration Act 1953 (Cth) ("the Administration Act"), on overpayment debts. A person's taxable income is worked out305 by subtracting allowable deductions from assessable income. The amount of the tax bonus to be paid is fixed according to the amount of a person's taxable income. But, as the Impugned Act recognises, the amount of a person's taxable income is not the only matter that affects how much income tax that person must pay. To be eligible for a payment under the Impugned Act, a person must have had an "adjusted tax liability" for the 2007-08 income year that is "greater than nil"306. A person's "adjusted tax liability" is to be worked out307 by taking the sum of a person's basic income tax liability (worked out in accordance with step two of the method statement in s 4-10(3) of the Income Tax Assessment Act 1997), Medicare levy and Medicare levy surcharge and reducing that by the sum of the person's tax offsets for that income year. Tax offsets are identified in s 13-1 of the Income Tax Assessment Act 1997 and include amounts allowed in respect of such diverse subject-matters as social security and other benefit payments, dependents, franked dividends, primary production, private health insurance and superannuation. It follows that the amount to be paid under the Impugned Act is not expressed as being determined by reference to the amount of income tax that a person was liable to pay for the 2007-08 income year. It is to be paid only to persons who were liable to pay some amount for income tax during that year, but its amount is fixed as one of three set amounts by reference to that person's taxable income, regardless of how much tax the person was required to pay. The Impugned Act contains no express provision appropriating the Consolidated Revenue Fund for the purposes of making the payment. Section 3 of the Impugned Act gives the general administration of the Act to the Commissioner of Taxation. This engages the standing appropriation made by s 16(1) of the Administration Act, which provides: "Where the Commissioner is required or permitted to pay an amount to a person by or under a provision of a taxation law other than: a general administration provision; or a provision prescribed for the purposes of this paragraph; 305 Income Tax Assessment Act 1997 (Cth), s 4-15. 306 s 5(1)(c). the amount is payable out of the Consolidated Revenue Fund, which is appropriated accordingly." Section 2(1) of the Administration Act defines "taxation law" as having the meaning given by the Income Tax Assessment Act 1997 and that latter Act provides in s 995-1(1) that: "taxation law means: an Act of which the Commissioner has the general administration (including a part of an Act to the extent to which the Commissioner has the general administration of the Act); or regulations under such an Act (including such a part of an Act)." Although the plaintiff contended to the contrary, if the Impugned Act is valid, s 16(1) of the Administration Act is engaged and, subject to compliance with the requirements of the Financial Management and Accountability Act 1997 (Cth) ("the Financial Management Act") concerning the drawing of moneys, s 16(1) authorises the withdrawal of the amounts necessary from the Treasury of the Commonwealth. If the Impugned Act is valid, s 27(2)(a) of the Financial Management Act obliges the Finance Minister to issue sufficient drawing rights to allow payment in full of the amount that the Impugned Act requires to be paid. The proceedings The plaintiff, Mr Pape, is an Australian resident eligible to receive a tax bonus if the Impugned Act is valid. In an action commenced in the original jurisdiction of this Court against the Commissioner of Taxation, he sought orders declaring the Impugned Act invalid, declaring the tax bonus payable by the Commissioner to the plaintiff "unlawful and void", and restraining the Commissioner from making any payment of the tax bonus to the plaintiff. The Commonwealth was joined as a defendant. The defendants were jointly represented. It is convenient, therefore, to refer to the submissions made on behalf of both defendants as submissions made on behalf of the Commonwealth. The parties joined in stating questions of law in the form of a Special Case for the opinion of the Full Court. For that purpose they agreed certain facts. The questions were: Does the Plaintiff have standing to seek the relief claimed in his Writ of Summons and Statement of Claim? Is the Tax Bonus for Working Australians Act (No 2) 2009 (Cth) valid because it is supported by one or more express or implied heads of legislative power under the Commonwealth Constitution? Is payment of the tax bonus to which the plaintiff is entitled under the Tax Bonus for Working Australians Act (No 2) 2009 (Cth) supported by a valid appropriation under ss 81 and 83 of the Constitution? 4. Who should pay the costs of the special case? During the hearing of the matter, the parties agreed that, whatever the outcome of the case, each party would bear its own costs. On 3 April 2009, the Court made orders answering the questions. We joined in the answers given to the first question, about standing, and to the last question, about costs. We did not agree with the answers given to the second and third questions. We would have answered the second question, about the validity of the Impugned Act: "The Tax Bonus for Working Australians Act (No 2) 2009 (Cth) is a valid law of the Commonwealth to the extent to which it provides for the payment to a person entitled to a tax bonus of the lesser of the amount of the person's adjusted tax liability for the 2007-08 income year and the amount of the bonus fixed in accordance with that Act. Otherwise, no." We would have answered the third question: "Yes". Standing The Commonwealth submitted, and no intervener submitted to the contrary, that Mr Pape has standing to seek relief in respect of the payment of the tax bonus to him. In particular, it was not disputed that Mr Pape has standing to seek a declaration that the tax bonus payable to him by the Commissioner of Taxation is unlawful and void, and an injunction restraining the Commissioner from making that payment. The Commonwealth further submitted, however, and the interveners did not submit to the contrary, that Mr Pape does not have standing to seek a declaration that the Impugned Act is invalid. It was submitted that he "has no special interest which would allow him to challenge the validity of the Act in its application to other persons". For the reasons given by Gummow, Crennan and Bell JJ this submission should be rejected and question 1 answered: "Yes". It was not made clear in argument whether the Commonwealth's submission about standing was directed only to the form in which a declaration was made or was intended to advance some more general proposition to the effect that the decision in this case could later be seen and acted upon on a footing that it concerned facts or circumstances unique to Mr Pape and did not decide any point of more general application. A submission of the latter kind would have profoundly serious implications for the rule of law when, as was the case here, the Commonwealth pointed to no fact or circumstance unique to Mr Pape (apart, that is, from him being the only person willing to take a proceeding in this Court the outcome of which, if successful, would deny him entitlement to $250). It is not necessary, however, to consider this aspect of the matter further. Question 2 β Heads of power The Commonwealth submitted that the Impugned Act was supported on any or all of five bases: the appropriations power read with the incidental power, the implied "nationhood power", the external affairs power, the trade and commerce power and the taxation power. Chief weight was placed upon the first of these arguments. It proceeded in two steps. The Commonwealth submitted first that an appropriation does no more than provide lawful authority of the Parliament for the Executive to withdraw money from the Treasury of the Commonwealth, and prescribe the purpose for which that money may be applied. The second step was to submit that s 51(xxxix) (the incidental power) supports a law imposing a duty on an officer of the Executive to withdraw and apply money which has been validly appropriated. This second step was described as s 51(xxxix) "relevantly [adding] to ss 61 and 81 of the Constitution by allowing for 'the making of laws for the purpose of securing that public money is applied to the purposes for which it is appropriated and not otherwise'308". It will be observed that s 51(xxxix) was said to "add to" both s 61 and s 81. That is, the Commonwealth submitted that s 51(xxxix) was engaged in the present matter in two distinct ways: first, by the grant of legislative power with respect to "matters incidental to the execution of any power vested by this Constitution ... in the Government of the Commonwealth" and secondly, by the grant of legislative power with respect to "matters incidental to the execution of any power vested by this Constitution in the Parliament" (in this case the power given to the Parliament by s 81). 308 Attorney-General (Vict) v The Commonwealth ("the Pharmaceutical Benefits Case") (1945) 71 CLR 237 at 250 per Latham CJ; [1945] HCA 30. Section 81 and the incidental power The argument about s 81 and the incidental power in s 51(xxxix) may be dealt with briefly. The Impugned Act is not a law whose making is incidental to the execution of a power vested by the Constitution in the Parliament to appropriate moneys. Section 81 of the Constitution provides that: "All revenues or moneys raised or received by the Executive Government of the Commonwealth shall form one Consolidated Revenue Fund, to be appropriated for the purposes of the Commonwealth in the manner and subject to the charges and liabilities imposed by this Constitution." Section 83 provides that "[n]o money shall be drawn from the Treasury of the Commonwealth except under appropriation made by law." The Commonwealth submitted that the Impugned Act provides "an essential element of the appropriation" because it prescribes the purposes for which amounts are appropriated. The Commonwealth submitted that because s 7(1) of the Impugned Act directs the Commissioner to pay the tax bonus it "is a sufficiently clear indication by the Parliament that the [Consolidated Revenue Fund] is to be debited for the purposes of making that payment". And in this connection the Commonwealth pointed to the fact that the Bill for the Impugned Act was the subject of a message from the Governor-General under s 56 of the the House of Representatives "that an Constitution recommending appropriation be made for the purposes of a Bill for an Act to provide for a tax bonus, and for related purposes". The Bill identified in the message was the Bill for what was to become the Impugned Act. As already noticed, the Impugned Act does not expressly provide any appropriation of the Consolidated Revenue Fund. It is sufficient for present purposes to conclude that the Impugned Act was evidently intended to engage, and if valid will engage, the standing appropriation in s 16(1) of the Administration Act. As the Commonwealth rightly pointed out in argument, s 3 of the Impugned Act, giving the general administration of the Act to the Commissioner of Taxation, had no purpose other than engaging s 16(1) of the Administration Act. That being so, it is not necessary to examine what the position would have been if the standing appropriation had not been engaged in this way. It is not to be doubted that the Parliament has power to make a standing appropriation of the kind found in s 16(1) of the Administration Act: an appropriation permitting application of the Consolidated Revenue Fund to the execution of valid laws administered by the Commissioner of Taxation. But it is not incidental to the power of the Parliament to make a law providing for that standing appropriation to make a new law requiring a new and wholly different outlay to be made. The argument relying on the power with respect to matters incidental to the execution of a power of appropriation that is vested in the Parliament amounts to an assertion that it is incidental to a standing appropriation to make any law that would require a payment drawn against that standing appropriation. But, as was correctly submitted on behalf of New South Wales, that inverts the proper order of inquiry. The standing appropriation in s 16(1) responds to enable fulfilment of legal obligations whose source lies elsewhere. The creation of those obligations, by the Impugned Act, is not incidental to the standing appropriation which would respond to enable fulfilment of those same obligations. Section 61 and the incidental power This leaves for separate consideration the other way in which the Commonwealth submitted that the incidental power is engaged in connection with an appropriation: as the enactment of a law with respect to a matter incidental to the execution of power vested by the Constitution in the Government of the Commonwealth. Consideration of these submissions is organised as follows: The Commonwealth's submissions Beginning at s 81? The place of s 81 in the Constitution The "purposes of the Commonwealth" as a limit? Some matters of history The decided cases The executive power Conclusions respecting s 61 and the incidental power (a) The Commonwealth's submissions The Commonwealth submitted that "[m]aking a payment pursuant to an appropriation Act involves the doing of something authorised by a law of the Commonwealth and, accordingly, falls within the executive power of the Commonwealth under s 61 of the Constitution". The Commonwealth further submitted that the Executive, through the exercise of executive power, can give effect to an appropriation in a variety of ways but accepted that there remained unresolved issues about whether "the Commonwealth has a general power to engage in the activities that are the subject of the appropriation". The Commonwealth submitted that these unresolved issues do not need to be decided in this case because the appropriation effected by s 16(1) of the Administration Act in respect of the tax bonus is "for the purposes of the Commonwealth" within the meaning of s 81 of the Constitution. Examination will reveal that this branch of the Commonwealth's argument has a number of elements which should be identified and treated separately. Ultimately, however, the critical question will be whether the payment of money drawn from the Treasury of the Commonwealth to those entitled under the Impugned Act is a payment that could validly be made in exercise of the executive power of the Commonwealth without any legislative support except the law which appropriates the Consolidated Revenue Fund for the payment. If it could, the Impugned Act will be valid as incidental to the execution of the executive power to make the payment. If the payment could not be made in exercise of the executive power of the Commonwealth, the validity of the Impugned Act must depend upon engaging some other head or heads of power. The Commonwealth's submission that the Impugned Act was supported by ss 51(xxxix) and 61, as a law with respect to a matter incidental to the execution of a power vested by the Constitution in the Government of the Commonwealth, was expressed in various ways in the course of oral argument. Although not articulated in these terms, the submission can be summarised as follows: the Parliament has power to appropriate the Consolidated Revenue Fund for any purpose it thinks fit; the Executive necessarily has power to expend any money lawfully appropriated; and the Parliament may enact a law requiring that payment, and regulating the conditions that are to be met before payment is made. Thus, so the argument concluded, the appropriation power having no relevant limitation (whether by reference to heads of legislative power or otherwise) the Executive of the Commonwealth may spend money for any purpose which the Parliament by its appropriation treats as a purpose of the Commonwealth. (b) Beginning at s 81? Although the argument, thus framed, proceeds from premises about the ambit of the Parliament's power to appropriate, it is important to recognise that there is no textual or structural reason to treat s 81 as the point at which it is necessary to begin in defining the ambit of the Executive's power to spend. It is necessary to construe each provision of the Constitution as part of the whole. There is no little danger in taking one of its provisions (for example, s 81), construing it in isolation, and then taking that construction as a premise for further conclusions about the ambit of other powers. Of course it is necessary to observe that the constitutional text is to be construed "with all the generality which the words used admit"309. But that neither requires nor permits consideration of particular provisions in isolation from their place within the Constitution as a whole. Especially is this so with respect to s 81, which is not cast in its terms as a grant of legislative power. Rather, the head of legislative power relevant to s 81 is more readily identified in s 51(xxxix). And in the case of a number of other provisions of Ch IV of the Constitution (for example, ss 87, 93 and 96) the relevant head of legislative power is not to be found in Ch IV but rather in s 51(xxxvi). Although it is convenient to begin the examination of this branch of the Commonwealth's arguments by considering s 81 and what is meant in that section by "for the purposes of the Commonwealth", it will ultimately be unnecessary to attempt some definitive exposition of the meaning of this phrase beyond saying that there is evident force in the view that it is not limited to purposes in respect of which the Parliament has express power to make laws. Not least is that so when it is recognised that there may be an appropriation for a valid exercise of the executive power of the Commonwealth and that, at least to the extent of matters going to the very survival of the polity310 and a class of matters like national symbols and celebrations311, the executive power of the Commonwealth is not bounded by the express grants of legislative power. But it 309 R v Public Vehicles Licensing Appeal Tribunal (Tas); Ex parte Australian National Airways Pty Ltd (1964) 113 CLR 207 at 225; [1964] HCA 15; Grain Pool of Western Australia v The Commonwealth (2000) 202 CLR 479 at 492 [16]; [2000] HCA 14. 310 Australian Communist Party v The Commonwealth (1951) 83 CLR 1 at 187-188; [1951] HCA 5. 311 Davis v The Commonwealth (1988) 166 CLR 79; [1988] HCA 63. is neither necessary nor possible to attempt to chart the boundaries of the area encompassed by the phrase "for the purposes of the Commonwealth" when it is used in s 81. And in particular, it is not necessary to decide whether the phrase encompasses any purpose determined by the Parliament to be a purpose of the Commonwealth312. (c) The place of s 81 in the Constitution The nature of the processes for which ss 81 and 83 of the Constitution provide must be understood having regard to their constitutional context. As was pointed out in the plurality reasons in Combet v The Commonwealth313, ss 81 and 83 of the Constitution must be understood in the light of other provisions of Ch IV of the Constitution, notably s 94314 and s 97315, and those provisions of 312 Pharmaceutical Benefits Case (1945) 71 CLR 237 at 254 per Latham CJ; Victoria v The Commonwealth and Hayden ("the AAP Case") (1975) 134 CLR 338 at 417 per Murphy J; [1975] HCA 52. 313 (2005) 224 CLR 494 at 569-570 [139]-[143]; [2005] HCA 61. 314 Section 94 provides: "After five years from the imposition of uniform duties of customs, the Parliament may provide, on such basis as it deems fair, for the monthly payment to the several States of all surplus revenue of the Commonwealth." 315 Section 97 provides: "Until the Parliament otherwise provides, the laws in force in any Colony which has become or becomes a State with respect to the receipt of revenue and the expenditure of money on account of the Government of the Colony, and the review and audit of such receipt and expenditure, shall apply to the receipt of revenue and the expenditure of money on account of the Commonwealth the Commonwealth, or the Government or an officer of the Commonwealth, were mentioned whenever the Colony, or the Government or an officer of the Colony, is mentioned." the same manner as the State Pt V of Ch I (in particular, s 53316, s 54317 and s 56318) which regulate the relations between the two Houses of the federal Parliament in respect of money bills. Section 94, with its provision for distribution of surplus revenue, emphasises the importance to other integers of the Federation of the prohibition in s 83 against drawing from the Treasury except under appropriation made by law. And s 97, with its provisions about audit of receipt and expenditure of money on account of the Commonwealth, is important because the audit arrangements that were picked up and applied required report to the Parliament. Section 97 thus emphasises that ss 81 and 83 are directed to regulating the relationship between the Executive and the Parliament. Although s 81 has often been referred to as "the appropriation power" it is important to recognise that its purpose is to regulate a particular aspect of the relationship between the Executive and the Parliament: the relationship in matters of finance. Section 81 is not directed to the making of laws which will regulate the rights, duties or obligations of citizens. Rather, as Griffith CJ said in The State of New South Wales v The Commonwealth ("the Surplus Revenue Case")319: "The appropriation of public revenue is, in form, a grant to the Sovereign, and the Appropriation Acts operate as an authority to the Treasurer to make the specified disbursements. A contractual obligation may or may not be added by some statutory provision or by authorized 316 Section 53 provides, in part, that "[p]roposed laws appropriating revenue or moneys, or imposing taxation, shall not originate in the Senate" and that "[t]he Senate may not amend proposed laws imposing taxation, or proposed laws appropriating revenue or moneys for the ordinary annual services of the Government". 317 Section 54 provides: "The proposed law which appropriates revenue or moneys for the ordinary annual services of the Government shall deal only with such appropriation." 318 Section 56 provides: "A vote, resolution, or proposed law for the appropriation of revenue or moneys shall not be passed unless the purpose of the appropriation has in the same session been recommended by message of the Governor-General to the House in which the proposal originated." 319 (1908) 7 CLR 179 at 190-191; [1908] HCA 68. it does not arise from agreement, but The Appropriation Act does, however, operate as a provisional setting apart or diversion from the Consolidated Revenue Fund of the sum appropriated by the Act." the appropriation. Or, as Isaacs J put the same point320: "'Appropriation of money to a Commonwealth purpose' means legally segregating it from the general mass of the Consolidated Fund and dedicating it to the execution of some purpose which either the Constitution has itself declared, or Parliament has lawfully determined, shall be carried out." Section 81 is not the only provision that regulates the relationship between the Executive and the Parliament in matters of finance. Sections 53, 54 and 56 make plain, among other things, that appropriations "for the ordinary annual services of the Government" are treated as a distinct class of appropriation. The appropriation relied on in this case is not of that kind; it is a standing appropriation of a kind long recognised321 as distinct from appropriations for the ordinary annual services of the government. But while the appropriation which would be relied on in this case is a standing appropriation, it is important to recognise that the provisions of Ch IV of the Constitution and Pt V of Ch I reflect the cardinal principle of parliamentary control which underpinned the British financial system at the time of Federation and which had earlier been transported to the Australian colonies. Proposed laws appropriating revenue or moneys or imposing taxation must originate, in Britain in the House of Commons, in the colonies in the more numerous House of the colonial legislature, and in the Commonwealth, under s 53 of the Constitution, in the House of Representatives. In Britain, "[t]he most ancient, as well as the most valued, prerogative of the House of Commons is the right of supreme control over taxation, to which the right to control issues is a natural corollary"322. So too, under the Constitution, the power of appropriation given by ss 81 and 83 is a logical consequence of the right of levying supplies. But no less importantly, it is the Executive which seeks supplies323 and applies the moneys that have been appropriated. 320 (1908) 7 CLR 179 at 200. 321 Combet v The Commonwealth (2005) 224 CLR 494 at 570 [143]. 322 Durell, The Principles and Practice of the System of Control over Parliamentary Grants, (1917) at 3 (emphasis added). An appropriation from the Consolidated Revenue Fund permits application of the Fund to the purpose or purposes described in the appropriation and, subject to any statutorily prescribed steps, permits the drawing of money from the Treasury of the Commonwealth. Drawing and application of appropriated moneys are now regulated by the Financial Management Act and provision is now made for the "review and audit of ... the receipt of revenue and the expenditure of money on account of the Commonwealth", as contemplated by s 97 of the Constitution, by the combined operation of the Financial Management Act and the Auditor-General Act 1997 (Cth). Those two Acts are examples of laws whose making is supported by the incidental power. The subjects with which those Acts deal are matters incidental to the execution of the Parliament's power under ss 81 and 83 to make an appropriation by law which will authorise withdrawal from the Treasury of the Commonwealth. Parliamentary appropriation is the process which permits application of the Consolidated Revenue Fund to identified purposes. Since Federation, those purposes have usually been articulated at a very high level of abstraction. The adoption of output accounting practices described in Combet has led to the adoption of even more general, not to say diffuse, descriptions of those purposes. The appropriation of funds, standing alone, does not and never has required application of the amounts appropriated. Any obligation to apply the funds to the permitted purpose must be found elsewhere than in the appropriation. (d) The "purposes of the Commonwealth" as a limit? It has been said324 that "for the purposes of the Commonwealth" in s 81 of the Constitution encompasses any and every purpose which the Parliament may choose. Others have concluded325 that the purposes of the Commonwealth can only be purposes for which the Parliament of the Commonwealth has power to enact a law. Between these polar extremes lie several intermediate positions, including the view326 that: "[e]ven upon the footing that the power of expenditure is limited to matters to which the Federal legislative power may be addressed, it necessarily includes whatever is incidental to the existence of the 324 Pharmaceutical Benefits Case (1945) 71 CLR 237 at 256 per Latham CJ; AAP Case (1975) 134 CLR 338 at 417 per Murphy J. 325 AAP Case (1975) 134 CLR 338 at 360 per Barwick CJ, 374-375 per Gibbs J. 326 Pharmaceutical Benefits Case (1945) 71 CLR 237 at 269 per Dixon J. Commonwealth as a state and to the exercise of the functions of a national government. These are things which, whether in reference to the external or internal concerns of government, should be interpreted widely and applied according to no narrow conception of the functions of the central government of a country in the world of to-day." (e) Some matters of history Much of what has been written about the construction and application of s 81 of the Constitution has been written without express resort to any material extrinsic to the Constitution, whether in the form of Convention Debates or like material. In Cole v Whitfield, the Court referred327 to the history of s 92: "not for the purpose of substituting for the meaning of the words used the scope and effect β if such could be established β which the founding fathers subjectively intended the section to have, but for the purpose of identifying the contemporary meaning of language used, the subject to which that language was directed and the nature and objectives of the movement towards federation from which the compact of the Constitution finally emerged". Like reference should be made in this matter to the history of the drafting of s 81 in order to understand better the contemporary meaning of the language used ("for the purposes of the Commonwealth"), the subject to which that language was directed, and the nature and objectives of the movement towards Federation which bear upon the questions that now arise. the Constitution, as There was disagreement at the 1891 Sydney Convention about whether the draft Bill for the Commonwealth to appropriate and spend money raised for any purpose, and disagreement about whether the Commonwealth should have such a power. In debate, Mr Inglis Clark denied328 that the Bill as it stood gave such power to the Commonwealth. Sir Samuel Griffith agreed329 in substance with Mr Inglis Clark whereas Mr Deakin may be understood330 to have been of the opposite opinion. then stood, empowered 327 (1988) 165 CLR 360 at 385; [1988] HCA 18. 328 Official Record of the Debates of the Australasian Federal Convention, (Sydney), 3 April 1891 at 698-699. 329 Official Record of the Debates of the Australasian Federal Convention, (Sydney), 3 April 1891 at 699-700. 330 Official Record of the Debates of the Australasian Federal Convention, (Sydney), 3 April 1891 at 700. The draft Bill, as it stood after the Sydney session of the Convention in 1897, provided331 in cl 81 that: "All revenues raised or received by the Executive Government of the Commonwealth, under the authority of this Constitution, shall form one Consolidated Revenue Fund to be appropriated for the Public Service of the Commonwealth in the manner and subject to the charges provided by this Constitution." In debate at Melbourne on 14 February 1898, Mr Isaacs suggested332 that the words "Public Service of the Commonwealth" may not be sufficiently large to cover the proposed return of surplus revenues to the States. Thereafter, the Bill was amended by deleting from cl 81 reference to the Public Service of the Commonwealth and substituting "for the purposes of the Commonwealth". Apart from the intervention of Mr Isaacs, the Convention Debates do not give any indication of why "for the purposes of the Commonwealth" was chosen in preference to "for the Public Service of the Commonwealth". It may be assumed that the latter phrase was modelled on the common form of expression used in colonial constitutions333 in connection with the appropriation powers of colonial legislatures. Further, as Quick and Garran noted334, "for the Public Service" was itself an expression reflecting then current British parliamentary practice which, as recorded in the edition of Erskine May's Parliamentary Practice335 current at Federation, was to appoint those Committees of the whole House of Commons known as the Committee of Supply and the Committee of Ways and Means to respond to "the demand of aid and supply for the public service made by the speech from the throne". 331 Williams, The Australian Constitution: A Documentary History, (2005) at 785. 332 Official Record of the Debates of the Australasian Federal Convention, (Melbourne), 14 February 1898 at 899-900. 333 New South Wales Constitution Act 1855 (Imp) (18 & 19 Vict c 54), Sched 1, s 47; Victoria Constitution Act 1855 (Imp) (18 & 19 Vict c 55), Sched 1, s 44; Constitution Act 1867 (Q), s 34; and Constitution Act 1889 (WA), s 64 each provided for revenue to be appropriated to or for the public service of the Colony. 334 The Annotated Constitution of the Australian Commonwealth, (1901), Β§242 at 666. 335 Erskine May, A Treatise on the Law, Privileges, Proceedings and Usage of Parliament, 10th ed (1893) at 554-555. It may be accepted, then, that the expression "for the Public Service" had a very wide application and that adoption of "for the purposes of the Commonwealth" was intended to encompass within its ambit the proposed return of surplus revenue. But it is also necessary to notice one other aspect of the drafting history of the Constitution. During the Convention Debates about what was to become s 96 of the Constitution (enabling the Commonwealth to grant financial assistance to the States on condition) differing views were expressed336 about whether, without an express provision to that effect, the power to make such grants would in any event be implied. Mr O'Connor expressed337 the view that such an express power would be necessary because, although the colonial parliaments "do as they think fit almost within any limits", the only expenditures that would be constitutionally permitted to the Commonwealth would be expenditures within the heads of legislative power. Taken together, these matters of drafting history may well be equivocal. Whether, as has been suggested338, "it seems unlikely on balance that [s 81] was intended to allow appropriation for any purpose" need not be decided. It is enough for present purposes to say that the drafting history of the relevant provisions of the Constitution does not point unequivocally to a settled understanding at the time of Federation that the appropriation and spending powers of the Commonwealth extended to any purpose. That there was no such settled understanding about the extent of the appropriation and spending powers of the Commonwealth is confirmed by the fact that debate about the extent of the Commonwealth powers of appropriation and spending continued after Federation. In the early years of Federation 336 Official Record of the Debates of the Australasian Federal Convention, (Melbourne), 17 February 1898 at 1107-1108. 337 Official Record of the Debates of the Australasian Federal Convention, (Melbourne), 17 February 1898 at 1108. 338 Saunders, "The Development of the Commonwealth Spending Power", (1978) 11 Melbourne University Law Review 369 at 377. Mr Higgins339, Sir John Forrest340 and Sir John Quick341 all expressed the view, in the course of parliamentary debates, that the spending power was limited to the heads of legislative power. Yet despite the expression of such views, the Commonwealth enacted several pieces of legislation whose validity could rest only in an extended understanding of the appropriation and spending powers. Thus, the Maternity Allowance Act 1912 (Cth) provided an allowance to "every woman who ... gives birth to a child" in Australia and who fell within the class of claimants described by s 6 of the Act. And in 1923 Acts were passed to promote the purchase by settlers in outback areas of wire netting for fencing342 and to authorise the first systematic road grants343. The validity of these Acts was not challenged in the courts. In 1926, however, by the Federal Aid Roads Act 1926 (Cth) the Parliament provided for specific purpose grants to the States for construction and reconstruction of roads. The State of Victoria challenged the validity of the Act. The challenge was dismissed by this Court344 with very brief reasons. The Act was said345 to be "plainly warranted by the provisions of s 96 of the Constitution". Further exposition of that conclusion was said346 to be unnecessary. The ambit of the Commonwealth's powers to appropriate remained controversial. The Report of the Royal Commission on the Constitution, presented on 21 November 1929, considered the appropriation power. It concluded347 that: 339 Australia, House of Representatives, 14 Parliamentary Debates (Hansard), 9 July 340 Australia, House of Representatives, 66 Parliamentary Debates (Hansard), 25 September 1912 at 3422-3424. 341 Australia, House of Representatives, 66 Parliamentary Debates (Hansard), 1 October 1912 at 3639. 342 Advances to Settlers Act 1923 (Cth). 343 Main Roads Development Act 1923 (Cth). 344 Victoria v The Commonwealth (1926) 38 CLR 399; [1926] HCA 48. 345 (1926) 38 CLR 399 at 406. 346 (1926) 38 CLR 399 at 406. 347 Australia, Report of the Royal Commission on the Constitution, (1929) at 137. "[t]he only constitutional limitations on the power of the Commonwealth Parliament to appropriate the [Consolidated] Revenue Fund are those which are mentioned or referred to in s 81. The Commonwealth Parliament cannot disregard the charges and liabilities imposed by the Constitution, or the obligations of the Commonwealth under the Financial Agreement of 12 December 1927, but subject to these charges liabilities and obligations it may appropriate any part of the Fund 'for the purposes of the Commonwealth'." How far those words limit the power of appropriation was the subject of conflicting evidence to the Royal Commission. Sir Robert Garran submitted that "the Commonwealth" was used in the phrase "for the purposes of the Commonwealth" in the wider sense of "the whole government structure, that is, the Commonwealth as an organised system of government, including the States"348. Thus, in Sir Robert Garran's view, the Commonwealth Parliament may appropriate for any purpose which it considers to be a purpose of the Commonwealth. Further, even if the power of appropriation was not properly to be regarded as unlimited, the purpose of an appropriation was, in his view, a political question on which the High Court would not interfere "unless it could be satisfied that the purpose was one which could, by no conceivable means, have any interest for the Commonwealth qua Commonwealth, or have any relation to any of the powers given to the Commonwealth by the Constitution"349. By contrast, Sir Edward Mitchell and Mr Owen Dixon gave evidence to the Royal Commission to the effect that s 81 should be read as limiting the objects of appropriation. Sir Edward Mitchell's view was that "the purposes of the Commonwealth" included not merely everything about which the Parliament may legislate but also everything which the Executive Government of the Commonwealth may do without express legislative authority. Mr Dixon submitted that the power of the Parliament to appropriate money was restricted to the subjects assigned to federal legislative power. The competing views expressed to the Royal Commission reveal four distinct strands of argument which did not necessarily intersect. First, Sir Robert Garran focused upon what is meant by "the Commonwealth" in the phrase "for the purposes of the Commonwealth". Secondly, Sir Edward Mitchell pointed to the difficulty of using "for the purposes of the Commonwealth" as a criterion of constitutional validity when appropriations are expressed at a very high level of 348 Australia, Royal Commission on the Constitution of the Commonwealth, Minutes of Evidence, Pt 1 at 69. 349 Australia, Report of the Royal Commission on the Constitution, (1929) at 138. generality and abstraction. Thirdly, all of those who gave evidence on this subject to the Royal Commission gave attention to questions of federal structure. Finally, all recognised that although Parliament controls the application of public moneys by the processes of appropriation, it is the Executive that initiates the process by proposing the estimates of expenditure not only for the ordinary annual services of the government but for "the Public Service" more generally. It is necessary to say something further about two of these strands of thought: the Executive's role with respect to appropriations and the debate about the meaning of "the Commonwealth" in s 81. As was said in the 10th edition of Erskine May's Parliamentary Practice350: "The Sovereign, being the executive power, is charged with the management of all the revenue of the state, and with all payments for the public service. The Crown, therefore, acting with the advice of its responsible ministers, makes known to the Commons the pecuniary necessities of the government; the Commons, in return, grant such aids or supplies as are required to satisfy these demands; and they provide by taxes, and by the appropriation of other sources of the public income, the ways and means to meet the supplies which they have granted. Thus the Crown demands money, the Commons grant it, and the Lords assent to the grant: but the Commons do not vote money unless it be required by the Crown; nor do they impose or augment taxes, unless such taxation be necessary for the public service, as declared by the Crown through its constitutional advisers". (emphasis added) There is no doubt that in British parliamentary practice the "public service" encompassed a wide variety of purposes. But the breadth and diversity of purposes for which money might be appropriated under British parliamentary practice is consistent with the absence of any relevant limitation of the subjects to which the executive power in Britain could apply the revenues of the state. If the Crown demanded money for a particular purpose, and if the Commons granted it and the Lords assented to the grant, money could be applied to the purpose. The breadth of the powers of the Crown in Britain provides no assistance in deciding whether, in the federal form of government for which the Constitution provides, the Executive Government of the central polity has some lesser power. 350 Erskine May, A Treatise on the Law, Privileges, Proceedings and Usage of Parliament, 10th ed (1893) at 515. Similarly, the debate about whether "the Commonwealth" when used in the phrase "for the purposes of the Commonwealth" refers to the polity created upon Federation or refers to the nation organised in accordance with the Constitution is a debate which, however it is resolved, sheds little light upon the questions that must be decided in the present matter. It sheds little light on those issues because the debate about the meaning of "the Commonwealth" when used in s 81 masks a more fundamental question. That more fundamental question is whether "for the purposes of the Commonwealth" is to be understood as limiting the purposes for which the Executive Government of the Commonwealth has power to apply money drawn from the Consolidated Revenue Fund. Consistent with the notion that it is the Executive that demands money, the more numerous House of the Parliament (the House of Representatives) that grants it, the upper House (the Senate) that assents to the grant and the Executive that then outlays the money demanded and granted, the question is whether "for the purposes of the Commonwealth" provides some limitation upon executive power in relation to spending that is not derived by reference to other provisions of the Constitution, notably s 61. That question is not resolved by choosing between reading "the Commonwealth" in s 81 as referring to the polity or the nation. It is readily accepted that "for the purposes of the Commonwealth" does not yield a criterion easily applied as a measure of constitutional validity of an appropriation. When it is recognised that parliamentary appropriation is a necessary but not sufficient step for the spending of money by the Executive it may be thought to follow that a more precise and concrete issue would be presented by considering whether particular expenditure for identified purposes was a valid exercise of the executive power of the Commonwealth or was authorised by a valid law of the Parliament. Even in such a case, however, determining whether the purpose being pursued is within the phrase "the purposes of the Commonwealth" would not be easy. In Victoria v The Commonwealth and Hayden ("the AAP Case"), McTiernan J concluded351 that the question of what is a purpose of the Commonwealth was "non-justiciable". (Vict) v The Commonwealth ("the Pharmaceutical Benefits Case"), Latham CJ described352 the question as a "political matter". It is not necessary to adopt either of those paths of reasoning to conclude that asking whether a particular appropriation can be described as being for a purpose of the Commonwealth will In Attorney-General 351 (1975) 134 CLR 338 at 370. 352 (1945) 71 CLR 237 at 256. seldom if ever yield an answer determinative of constitutional litigation in this Court. There are at least two reasons why that is so. First, the generality with which appropriations are ordinarily expressed will not readily permit examination of whether the purposes thus identified are purposes of the Commonwealth. Secondly, if there is a plaintiff (other than a State Attorney-General) who has standing to challenge a particular expenditure, the question at issue will be about a particular application of money to a particular purpose. That is an inquiry that will turn upon the ambit of the power (legislative or executive) that is said to be engaged if the expenditure is made. All this being so, the question at issue in the present matter is not to be understood as depending upon first resolving the meaning or application of the expression "for the purposes of the Commonwealth" in s 81. Rather, validity of the Impugned Act depends upon other considerations. (f) The decided cases The argument advanced on behalf of the Commonwealth in the present matter is not substantially different in effect from the argument urged on behalf of the Commonwealth in the Pharmaceutical Benefits Case353. In the Pharmaceutical Benefits Case and in this case, the Commonwealth's argument treated s 81 not as directed to the regulation of the relationship between the Executive and the Parliament but as giving to the Executive a power to spend. Thus, in the Pharmaceutical Benefits Case it was submitted354 that "the purposes of the Commonwealth" was a larger field of Commonwealth expenditure than what might be called "the domestic or governmental expenditure, the necessary expenses of carrying out the functions of the Government" encompassed by the reference The Commonwealth further submitted355 that the effect of the reference in s 81 to "the purposes of the Commonwealth" was analogous to the meaning attributed to Art I, Β§8, cl 1 of the Constitution of the United States356 and that, consistent with certain decisions of the the United States357, to "the expenditure of the Supreme Court of the Commonwealth". in s 82 353 (1945) 71 CLR 237. 354 (1945) 71 CLR 237 at 243. 355 (1945) 71 CLR 237 at 243. 356 "The Congress shall have Power to lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States". 357 United States v Butler 297 US 1 (1936); Charles C Steward Machine Co v Davis 301 US 548 (1937). See also Helvering v Davis 301 US 619 at 640-645 (1937); (Footnote continues on next page) Commonwealth power to spend should be understood as being "for purposes as large as the purposes for which it is empowered to raise money"358. The validity of the premise for the Commonwealth's argument in the Pharmaceutical Benefits Case, that s 81 gives power to spend money, was not examined in that case. The decision in the case turned on consideration of the reach of the incidental power. But the premise for the Commonwealth's argument in the Pharmaceutical Benefits Case, that s 81 gives a power to spend, should not be accepted. Section 81 does not provide for spending; it regulates the relationship between the Executive and the Parliament. Section 81 provides for control by the Parliament over the purposes to which the Consolidated Revenue Fund may be applied and s 83 regulates withdrawal of money from the Treasury of the Commonwealth. The power to spend lies elsewhere. Because of the way in which opinions were divided in the AAP Case, no proposition about the ambit of the Commonwealth's powers as to appropriation and expenditure can be identified as commanding the assent of a majority of the Justices in that case. Two members of the Court, Barwick CJ and Gibbs J, were of opinion that the Commonwealth's power of appropriation was limited to purposes in respect of which the Parliament has legislative power. By contrast, McTiernan, Mason and Murphy JJ were of opinion that the purposes of the Commonwealth are not limited to those purposes for which the Commonwealth has power to make laws and that it is for Parliament to determine what are the purposes of the Commonwealth. Although Jacobs J treated the purposes of the Commonwealth as being limited to purposes identified from within the Constitution, those purposes included, in his Honour's view359, purposes implied from the existence of "Australia as a nation externally and internally sovereign" including "co-ordination of services" to meet the "various interrelated needs" of a complex society. The seventh member of the Court, Stephen J, held that the plaintiffs, the State of Victoria and the Attorney-General for that State, lacked standing to bring the proceedings. For present purposes, it is useful to focus particularly upon the reasons of Mason J. First, Mason J rejected360 the argument that the express provision of power under s 96 of the Constitution to make grants of financial assistance to the United States v Gerlach Live Stock Co 339 US 725 at 738 (1950); Buckley v Valeo 424 US 1 at 90-91 (1976). 358 (1945) 71 CLR 237 at 245. 359 (1975) 134 CLR 338 at 412-413. 360 (1975) 134 CLR 338 at 395. States on conditions was reason to confine s 81. Rather, in his Honour's view, s 96 was to be seen as a provision which put beyond question the power of Parliament to attach conditions to grants made to the States. For the reasons given earlier, this understanding of the purpose for including s 96 in the Constitution may not be consistent with the course of debate at the constitutional conventions. For the moment, however, it is convenient to proceed on the footing that s 96 was included for the limited purposes identified by Mason J in the AAP Case. the meaning ascribed Although Mason J gave to the words "for the purposes of the the Commonwealth" Pharmaceutical Benefits Case (for such purposes as Parliament may determine361) that conclusion was not seen362 as leading to the conclusion that the Commonwealth has an unlimited executive power or to the conclusion that a statutory appropriation provides lawful authority for the engagement by the Commonwealth in particular activities. Rather, Mason J emphasised363 that the executive power of the Commonwealth "is not unlimited and ... its content does not reach beyond the area of responsibilities allocated to the Commonwealth by the Constitution, responsibilities which are ascertainable from the distribution of powers, more particularly the distribution of legislative powers, effected by the Constitution itself and the character and status of the Commonwealth as a national government". Having regard364 to the provisions of s 61 taken in conjunction with the federal character of the Constitution and the distribution of powers between the Commonwealth and the States, any other conclusion was described by Mason J as "unacceptable". In the AAP Case, Mason J would have restrained365 the Commonwealth from carrying into effect the activities for which money was appropriated and restrained the Commonwealth from expending those moneys. (g) The executive power As has been observed, the Commonwealth's submissions on s 61 and the incidental power can be understood as proceeding by three steps: (a) the Parliament has power to appropriate the Consolidated Revenue Fund for any 361 (1945) 71 CLR 237 at 256. 362 (1975) 134 CLR 338 at 396. 363 (1975) 134 CLR 338 at 396. 364 (1975) 134 CLR 338 at 396-397. 365 (1975) 134 CLR 338 at 402. purpose it thinks fit; (b) the Executive necessarily has power to expend any money lawfully appropriated; and (c) the Parliament may enact a law requiring that payment and regulating the conditions that are to be met before payment is made. These submissions necessarily proposed a particular understanding of the structure of the Federation. It is an understanding in which the central polity has legislative power with respect to taxation (limited by the requirement "not to discriminate between States or parts of States"366) and an executive power with respect to expenditure limited only by the necessity to secure the approval of the Parliament for that expenditure. And because both the initiative for expenditures and the making of expenditures are matters for the Executive, the understanding of the Federation for which the Commonwealth contends is one which gives the Executive of the Commonwealth an unlimited power to propose financial expenditures and, subject to parliamentary appropriation, power to make those expenditures that is in no way limited by subject-matter or purpose. Such an understanding of the structure of the Federation does not fit easily with the long-accepted understanding of the constitutional structure, expressed in Melbourne Corporation v The Commonwealth367 or R v Kirby; Ex parte Boilermakers' Society of Australia368, of separate polities, separately organised, continuing to exist as such, in which the central polity is a government of limited and defined powers. In The Commonwealth v Colonial Combing, Spinning and Weaving Co Ltd ("the Wool Tops Case"), Isaacs J pointed out369 that: "Section 61 makes three declarations as to the executive power of the Commonwealth. Observe, it is not as to the Executive Government of the Commonwealth or as to the powers of the Government, but as to the 'executive power of the Commonwealth.' As to that 'power', it declares that it (a) is vested in the Sovereign, (b) is exerciseable by the Governor-General as the Sovereign's representative, (c) 'extends to the execution and maintenance of this Constitution, and of the laws of the the Commonwealth.' representative of the Sovereign must be read with sec 2 of the Constitution, which constitutes him such representative. As to the first the Governor-General as The reference 366 s 51(ii). 367 (1947) 74 CLR 31 at 82; [1947] HCA 26. 368 (1956) 94 CLR 254 at 267-268; [1956] HCA 10. 369 (1922) 31 CLR 421 at 437-438; [1922] HCA 62. declaration it is a renewed statement of the law and introductory of what follows. Blackstone (vol I at 190) says: 'The Supreme executive power of these Kingdoms is vested by our laws in a single person, the King or Queen.' In Halsbury's Laws of England (vol VI at 318) it is said: 'The executive authority is vested in the Crown as part of the prerogative.' The second declaration need not be further considered now. The third is very important. It marks the external boundaries of the Commonwealth executive power, so far as that is conferred by the Constitution, but it its leaves entirely untouched ascertainment in any given instance. It no more solves the difficulty in the present case than would the words 'for the peace welfare and good government of New South Wales' or the words 'in and for Victoria' solve a similar difficulty in relation to the constitutional executive authority of those States. But the third declaration is an essential starting-point, and the extent it marks out cannot be exceeded." (last emphasis added) the definition of that power and Although the ambit of Commonwealth executive power is not otherwise defined by Ch II, "it is not unlimited [in scope] and ... its content does not reach beyond the area of responsibilities allocated to the Commonwealth by the Constitution, responsibilities which are ascertainable from the distribution of powers, more particularly the distribution of legislative powers, effected by the Constitution itself and the character and status of the Commonwealth as a national government"370. As Mason J had earlier observed, in Barton v The Commonwealth371, the executive power of the Commonwealth: "extends to the execution and maintenance of the Constitution and of the laws of the Commonwealth. It enables the Crown to undertake all executive action which the is appropriate Commonwealth under the Constitution and to the spheres of responsibility vested in it by the Constitution." the position of As was later explained in the plurality reasons in Davis v The Commonwealth372, those "spheres of responsibility" vested in the Executive Government of the Commonwealth include responsibilities derived from the character and status of the Commonwealth as a national polity. In the Pharmaceutical Benefits Case373, 370 AAP Case (1975) 134 CLR 338 at 396 per Mason J. 371 (1974) 131 CLR 477 at 498; [1974] HCA 20. 372 (1988) 166 CLR 79 at 93. 373 (1945) 71 CLR 237 at 269. Dixon J made a related point in relation to the power of expenditure, when he said that the power "necessarily includes whatever is incidental to the existence of the Commonwealth as a state and to the exercise of the functions of a national government". And as Dixon J went on to say374: "These are things which, whether in reference to the external or internal concerns of government, should be interpreted widely and applied according to no narrow conception of the functions of the central government of a country in the world of to-day." In the AAP Case, Mason J said375: "[T]here is to be deduced from the existence and character of the Commonwealth as a national government and from the presence of ss 51(xxxix) and 61 a capacity to engage in enterprises and activities peculiarly adapted to the government of a nation and which cannot otherwise be carried on for the benefit of the nation". The establishment by the Commonwealth of the Commonwealth Scientific and Industrial Research Organisation to undertake scientific research on behalf of the nation was given376 as an example of the capacity of the Commonwealth to engage in enterprises and activities "peculiarly adapted to the government of a nation ... which cannot otherwise be carried on for the benefit of the nation". Whether the establishment of that organisation could be supported as an exercise of the patents power need not be explored. Mason J distinguished377 between the power to spend money and the power of the Commonwealth to engage in particular activities. Mason J indicated378 that the executive power to engage in such activities, "arising as it does from an implication drawn from the Constitution and having no counterpart, apart from the incidental power, in the expressed heads of legislative power, is limited in scope". As Mason J went on to point out379: 374 (1945) 71 CLR 237 at 269. 375 (1975) 134 CLR 338 at 397. 376 (1975) 134 CLR 338 at 397. 377 (1975) 134 CLR 338 at 396. 378 (1975) 134 CLR 338 at 398. 379 (1975) 134 CLR 338 at 398. "It would be inconsistent with the broad division of responsibilities between the Commonwealth and the States achieved by the distribution of legislative powers to concede to this aspect of the executive power a wide operation effecting a radical transformation in what has hitherto been thought to be the Commonwealth's area of responsibility under the Constitution, thereby enabling the Commonwealth to carry out within Australia programmes standing outside the acknowledged heads of legislative power merely because these programmes can be conveniently formulated and administered by the national government." As has already been noted, the Commonwealth submitted that it was unnecessary to consider how far the power identified by Mason J in the AAP Case might extend. Rather, it was submitted that it was sufficient to conclude that the power to make the expenditure now in question was to be found in the Executive's power to spend what Parliament has appropriated, coupled with the legislative power with respect to matters incidental to the execution of the executive power to spend, giving power to enact a law making the expenditure mandatory. In the course of oral argument, it was suggested that to conclude that the Commonwealth Executive did not have power to spend money that had been appropriated by the Parliament to any purpose falling within the appropriation was to return to notions of reserved powers which underpinned R v Barger380 but were discarded in Amalgamated Society of Engineers v Adelaide Steamship Co Ltd ("the Engineers' Case")381. That is, it was suggested that the conclusion proceeded from an unstated assumption about the ambit of State executive or legislative power. The decision in the Engineers' Case does not entail that any reference to notions of "constitutional structure" or implications based upon the division of powers between the integers of the Federation is necessarily wrong. Reference to those notions may invite attention to whether they are being used in a way that proceeds from some unstated premise about "federal balance". As pointed out in New South Wales v The Commonwealth (Work Choices Case)382, an appeal to "federal balance" depends upon making an a priori assumption about the consequences of division of legislative powers. And the Engineers' Case established that federal legislative power is not to be determined by resorting to 380 (1908) 6 CLR 41; [1908] HCA 43. 381 (1920) 28 CLR 129; [1920] HCA 54. 382 (2006) 229 CLR 1 at 119-121 [194]-[196]; [2006] HCA 52. any assumption of that kind. As five members of the Court said383 in the Work Choices Case: "What was discarded in the Engineers' Case was an approach to constitutional construction that started in a view of the place to be accorded to the States formed independently of the text of the Constitution. The Engineers' Case did not establish that no implications are to be drawn from the Constitution. So much is evident from Melbourne Corporation384 and from R v Kirby; Ex parte Boilermakers' Society of Australia (Boilermakers' Case)385. Nor did the Engineers' Case establish that no regard may be had to the general nature and structure of the constitutional framework which the Constitution erects. As was held in Melbourne Corporation386: 'The foundation of the Constitution is the conception of a central government and a number of State governments separately organised. The Constitution predicates their continued existence as independent entities.' And because the entities, whose continued existence is predicated by the Constitution, are polities, they are to continue as separate bodies politic each having legislative, executive and judicial functions. But this last observation does not identify the content of any of those functions. It does not say what those legislative functions are to be." And, it may be added, nor does it say what those executive functions are to be. Whether the Impugned Act is a law incidental to the execution of a power vested by the Constitution in the Government of the Commonwealth depends upon the ambit of the Commonwealth's executive power. To conclude that the executive power of the Commonwealth is not unbounded is neither to revert to some doctrine of reserved powers nor to treat the new and national polity created by Federation as a cripple. It does not leave some element of executive power (let alone some essential element of such power) undistributed between the integers of the Federation, and thus unavailable to any. 383 (2006) 229 CLR 1 at 119-120 [194]. 384 (1947) 74 CLR 31. 385 (1956) 94 CLR 254. 386 (1947) 74 CLR 31 at 82. See also Austin v The Commonwealth (2003) 215 CLR 185; [2003] HCA 3. The bound that is passed when the Commonwealth Executive seeks to spend money in the manner for which the Impugned Act provides is the boundary set by those structural considerations which informed and underpinned the decision in Melbourne Corporation. The executive power of the Commonwealth is the executive power of a polity of limited powers. The Engineers' Case decided that the powers are not to be understood as confined by a priori assumptions. But no statement of this Court suggests that the executive power of the Commonwealth is unbounded. Why do structural considerations require the conclusion that the executive power of the Commonwealth in matters of spending is not unbounded? That question is best approached by examining the proposition that, in matters of raising and expenditure of public moneys, the executive power recognised in s 61 is the same as the power of the Executive in the United Kingdom at the time of Federation. There are several reasons to reject that proposition. First, the ambit of the Commonwealth executive power is to be identified having regard to the whole of the constitutional structure, not only those provisions that deal directly with the subject of executive power. To do otherwise would not read s 61 in the context of the whole Constitution. In particular, identifying the scope of Commonwealth executive power in relation to raising and expenditure of public moneys requires consideration of more than the respective spheres of exercise of executive power by the Commonwealth and State governments. To confine attention to executive power is to ignore the intersection between executive and legislative power for which s 51(xxxix) expressly provides. The Parliament's legislative powers cannot be determined without regard to the engagement of s 51(xxxix) with respect to matters incidental to the execution of powers vested by the Constitution in the Government of the Commonwealth Executive must be determined bearing in mind that there is legislative power with respect to matters incidental to the execution of that executive power. the Commonwealth. the powers of Conversely, Secondly, determination of the ambit of the Commonwealth Executive's power in matters of raising and expending public moneys must not ignore the carefully delineated intersection between the respective roles of the Executive and the Parliament that not only lies at the centre of a proper understanding of the provisions of Pt V of Ch I and Ch IV of the Constitution but also informs the meaning that is to be given to s 61 in matters of executive power with respect to public moneys. The central elements of the delineation of the respective roles of the Executive and the Legislature provided by the Constitution came directly from the United Kingdom practices of the late nineteenth century. But there was one fundamental alteration to those arrangements that was made by the Constitution and cannot be ignored. The Parliament which was to control both taxation and expenditure under the Australian Constitution was given only limited legislative powers. Yet when it is said that the position of the Commonwealth Executive in matters of expenditure is no different from that of the United Kingdom Executive at the time of Federation, it is asserted that the executive arm of government has unbounded powers. Of course it must be understood that, as Dixon J said387 in Melbourne Corporation: "The position of the federal government is necessarily stronger than that of the States. The Commonwealth is a government to which enumerated powers have been affirmatively granted. The grant carries all that is proper for its full effectuation. Then supremacy is given to the legislative powers of the Commonwealth." But it is the very fact of the supremacy of the Commonwealth's legislative power that directs attention to the consequences that follow for the continued existence of separate polities, separately organised, if the executive power of the Commonwealth in matters of expenditure is unbounded. If the executive power in this respect is unbounded, the legislative power of the Parliament in such matters, given by s 51(xxxix), is limited only by the requirement that the legislation be with respect to a matter incidental to the execution of that power. (h) Conclusions respecting s 61 and the incidental power To the extent to which the Commonwealth's submissions about s 61 and s 51(xxxix) depended upon distinguishing between the power to spend and the power to engage in activities, those submissions should be rejected as resting upon a distinction that cannot be maintained. The distinction cannot be maintained if proper account is taken of the incidental power. As was said in Re Wakim; Ex parte McNally388, "[n]o single formula will describe the relationship that must exist between a power or group of powers and some exercise of power that is said to be incidental to the execution of the principal power or is necessary or proper to render the main grant of power effective". But both the central idea and the generality of the incidental power 387 (1947) 74 CLR 31 at 82-83. 388 (1999) 198 CLR 511 at 580 [122]; [1999] HCA 27. are stated by Marshall CJ in McCulloch v Maryland389, cited with approval in Grannall v Marrickville Margarine Pty Ltd390: "Let the end be legitimate, let it be within the scope of the constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consist with the letter and spirit of the constitution, are constitutional." It would be wrong to read the incidental power as having some narrow or confined application in connection with the execution of powers vested by the Constitution in the Government of the Commonwealth. The matters incidental to the execution of the power of the Executive to withdraw from the Treasury (under an appropriation made by law) and spend the money so withdrawn are not limited to matters incidental to the withdrawal; they must include matters incidental to the execution of the power to spend what has been withdrawn. And if the Executive has power to spend money for a particular purpose, it is not to be supposed that the incidental power would not authorise the enactment of legislation facilitating and controlling that expenditure and its application. Legislation which facilitates and controls the expenditure and its application is not a narrow subject. It includes the specification (as in the Impugned Act) of conditions that must be met if the payment is to be made. But it extends to providing for terms and conditions regulating the manner and circumstances of application of the money provided. No distinction can then be drawn between cases where the money is to be spent by giving it to a third party and cases where it is to be spent directly by or on behalf of the Commonwealth. The spending of money by giving it to a third party may be classed as "spending" and spending it directly by or on behalf of the Commonwealth might be classed as the Commonwealth "engaging in activities". But even if such a classification could be made it supports no different engagement of the incidental power. That is why attention must focus on the ambit of the executive power, not upon a supposed distinction between spending money and engaging in activities. The executive power of the Commonwealth extends to the execution and maintenance of the Constitution and of the laws of the Commonwealth. The Executive's power to spend money is not confined to expenditures made in accordance with a law made by the Parliament under an enumerated head of legislative power. But, for the reasons given earlier in connection with the executive power generally, the executive power to spend is not unlimited. Its 389 17 US 159 at 206 (1819). 390 (1955) 93 CLR 55 at 77; [1955] HCA 6. limits are determined in the same manner as are the limits on the executive power generally. In the present matter it will later be demonstrated that some but not all operations of the Impugned Act are supported as a law with respect to taxation. To that extent the expenditure in satisfaction of the rights created by the Impugned Act (as read down) is a valid exercise of the executive power as executing a law of the Commonwealth. To the extent to which the Impugned Act is not supported as a law with respect to taxation, it will later be shown that it is not supported by any other head of legislative power. It is not shown that so much of the expenditure as is not supported by a head of legislative power is to be supported as an exercise of executive power identified as derived from the character and status of the Commonwealth as a national polity or as deduced from the existence and character of the Commonwealth as a national government. That proposed expenditure is not shown to fall within this area by demonstrating only that the expenditure in question is directed to an end that is described as a national economic emergency. It is necessary to say something in amplification of this last point. It is said that, because there is a national economic crisis or emergency to which a national response must be made, the executive power under s 61, to spend money that has been lawfully appropriated, extends to spending money to meet that crisis in whatever way the Executive chooses. And it is said that the Impugned Act is valid because the Parliament may make a law providing for the execution of the power of the Executive by requiring the Commissioner of Taxation to make the payments that the Impugned Act requires. Words like "crisis" or "emergency" do not readily yield criteria of constitutional validity. It may be accepted, for the purposes of argument, both that there is shown to be a national crisis to which a national response is required and that only the Commonwealth has the administrative and financial resources to respond. It does not follow, however, that the Commonwealth's executive power to respond to such circumstances by spending money is a power that is unbounded. Were it so, the extensive litigation about the ambit of the defence power during World War II was beside the point. Though variously expressed, the argument by reference to national "crisis" or "emergency" can be summed up as being: "There is a crisis; if the Commonwealth cannot do this, who can?" What that and similar forms of rhetorical question obscure is a conflation of distinct questions about ends and means. The questions are conflated because the legislative power to enact the Impugned Act is treated as depending upon the execution of a power, said to be implicitly vested by the Constitution in the Executive, to meet a national crisis (in this case a financial or economic crisis). But if that is the end to which the exercise of power is to be directed, it by no means follows that any and every means of achieving that end must be within power. To argue from the existence of an emergency to either a general proposition that the Executive may respond to the crisis in any way it sees fit, or to some more limited proposition that the Executive has power to make this particular response, is circular. Describing the expenditure in issue in this matter as a "short term fiscal [measure] to meet adverse economic conditions affecting the nation as a whole" engages no constitutional criterion of a kind hitherto enunciated by this Court. It is a description that conflates the distinction between ends and means that this Court must maintain. It is for the political branches of government, not this Court, to fix upon the ends to be sought by legislative or executive action. It is for the Court, not the political branches of government, to decide whether the means chosen to achieve particular political ends are constitutionally valid and it is for the Court to identify the criteria that are to be applied to determine whether those particular means are constitutionally valid. The question for decision is whether the response that has been made (by the enactment of the Impugned Act) is within power. That question is not answered by pointing out why the Impugned Act was enacted. Reference to notions as protean and imprecise as "crisis" and "emergency" (or "adverse effects of circumstances affecting the national economy") to indicate the boundary of an aspect of executive power carries with it difficulties and dangers that raise fundamental questions about the relationship between the judicial and other branches of government. It was noted at the start of these reasons that no party or intervener disputed that there is a global financial crisis, or sought to suggest that Australia stands apart from the crisis or is immune from its effects. It was, therefore, not necessary in this case to identify the relevant constitutional facts. In particular, it was not necessary to examine whether it is for this Court to decide what constitutes a "crisis" or an "emergency", or whether it is sufficient that the Executive has concluded that circumstances warrant such a description. If it is for the Court to decide these matters, questions arise about what evidence the Court could act upon other than the opinions of the Executive, and how those opinions could be tested or supported. Yet, if it is to be for the Executive to decide whether there is some form of "national emergency" (subject only to some residual power in the Court to decide that the Executive's conclusion is irrational), then the Executive's powers in such matters would be self-defining. The difficulties that are presented by such an understanding of executive power are real and radical. They are difficulties that have their immediate origins in two different sources. The first is the conflation of ends and means. The second is that reference is made to crisis or emergency to invoke (at least inferentially) that notion of which Dixon J wrote in Australian Communist Party v The Commonwealth391 when speaking of the source of the legislative power to put down subversive activities and endeavours as392 "the necessary power of the federal government to protect its own existence and the unhindered play of its legitimate activities". But as Dixon J went on to say393, "[t]he extent of the power which I would imply cannot reach to the grant to the Executive Government of an authority, the exercise of which is unexaminable, to apply as the Executive Government thinks proper". in several documents which were produced by The different ways in which a fiscal stimulus can be delivered were international described organisations and upon which the Commonwealth relied as demonstrating both the existence of an international financial crisis and the degree of international agreement about how it should be met. Those documents show that a fiscal stimulus can be delivered in a number of different ways, including direct government investment as, for example, in capital works and provision of additional disposable income to some or all members of the community, by reduced taxation and taxation instalments, rebates in respect of taxation that has not yet been paid, refunds of taxation that has been paid, increased social security benefits or other direct payments to recipients. Legislative measures with respect to taxation and social security benefits would find ready support in s 51(ii), s 51(xxiii) and s 51(xxiiiA). Legislation for some other forms of direct payments to recipients may likewise be supported by other heads of power within s 51. The question is whether a direct payment not otherwise supported by legislation made under an enumerated head of power may be made in exercise of the executive power of the Commonwealth. In the end the Commonwealth's submissions about the executive and incidental powers came down to the proposition that the Commonwealth's power to spend is limited only by the need to obtain parliamentary approval for the proposed expenditure. That contention should be rejected. The matters of history described earlier in these reasons do not require its acceptance. Its 391 (1951) 83 CLR 1 at 187-188. 392 Quoting Black's American Constitutional Law; see Black, Handbook of American Constitutional Law, 2nd ed (1897) at 340, 3rd ed (1910) at 392. 393 (1951) 83 CLR 1 at 188. acceptance would not be consistent with what Mason J referred394 to as "the broad division of responsibilities between the Commonwealth and the States achieved by the distribution of legislative powers" and would, by "enabling the Commonwealth to carry out within Australia programmes standing outside the acknowledged heads of legislative power merely because these programmes can be conveniently formulated and administered by the national government", effect a radical transformation in what has hitherto been thought to be the constitutional structure of the nation. To hold that the Commonwealth power to spend does not extend so far is consistent with what was decided in the Pharmaceutical Benefits Case and, after the AAP Case, in Davis v The Commonwealth395. Nationhood The Commonwealth submitted that the Impugned Act is to be supported as an exercise of legislative power with respect to matters that follow from the Commonwealth's status as the national government. Many of the matters urged in this regard have already been dealt with in connection with executive power and the treatment of those matters need not be repeated here. Rather, it is necessary to deal with a more particular expression of the Commonwealth's argument under this heading, namely, that it should now be recognised that the Commonwealth has legislative power with respect to the national economy. The Commonwealth advanced the argument in two forms. First, it was submitted that a legislative power with respect to the "national economy" was created and sustained by s 92 of the Constitution together with the aggregation of specific heads of legislative power with respect to trade and commerce, taxation, bounties, borrowing, banking, currency, insurance, corporations and external affairs, and the exclusive power under s 90 to impose duties of customs and of excise. Secondly, the Commonwealth submitted that a legislative power with respect the Commonwealth being the national government. Both submissions should be rejected. the national economy implication from is a necessary With respect to the first argument, it is enough to say that the aggregation of separate heads of power yields no greater power than the sum of the parts. With respect to the second of the arguments, it may readily be accepted that the Constitution recognises that there is a national economy. Where once there may have been six separate markets, one of the chief elements of the design 394 AAP Case (1975) 134 CLR 338 at 398. 395 (1988) 166 CLR 79. of the Constitution (and in particular Ch IV concerning Finance and Trade) was to create and foster national markets396. But the implication of legislative power with respect to a subject-matter described as the "national economy" by no means follows from the observation that there is a national economy. First and foremost, despite the evident constitutional intention to create and foster national markets the Parliament was given no express head of power with respect to such a subject-matter. Secondly, the expression "national economy" is anything but certain. Its uncertainty is demonstrated by the fact that a central premise of the present litigation was that Australia's economic wellbeing is not isolated from global economic influences. That may suggest that there is only limited utility in treating (or at least in continuing to treat) the Australian national economy as if it is a separate and distinct unit. It is not necessary, however, to examine that subject further. More particularly it was not explained what areas the asserted power would cover beyond such subject-matters as now fall within s 51(i) ("trade and commerce with other countries, and among the States"), s 51(ii) ("taxation; but so as not to discriminate between States or parts of States") and s 51(xiii) ("banking, other than State banking; also State banking extending beyond the limits of the State concerned, the incorporation of banks, and the issue of paper money"). Rather, the power which it was said should be implied was treated as sufficiently described by its alleged connection with the fact of the existence of Australia as a nation. But that connection does not create or give content to such a power. As is apparent from what has already been said in these reasons, it may be accepted that there is some implied legislative power in the Parliament that follows from the existence of the national polity. That power extends to laws putting down subversive activities and endeavours397. But that implied legislative power does not extend so far as to encompass the general subject of the "national economy". Not only is the content of such a power too uncertain to permit its implication, but, even if the power could be given sufficiently certain content, its implication is not necessary. As will later be shown, in all but a small part of its operation, the Impugned Act is a law with respect to taxation. There is no lack of power to provide for refunds of taxation paid by those who paid tax for the 396 Betfair Pty Ltd v Western Australia (2008) 234 CLR 418 at 452 [12]; [2008] HCA 11. 397 Communist Party Case (1951) 83 CLR 1 at 187-188. 2007-08 income year; no lack of power to provide for reduction in taxation instalments payable in respect of those who are "Pay as you go" taxpayers398; no lack of power to provide for reduction in rates of direct or indirect taxation. And no other aspect of the three "fiscal stimulus packages" mentioned at the start of these reasons was said to be dependent upon the implication of the power now under consideration. These considerations apart, the argument that power with respect to the national economy is a necessary implication from the constitutional text and structure amounted ultimately to no more than the proposition that the economic circumstances that now exist require national action. That provides no sufficient basis for the implication of the asserted power. The Impugned Act is not supported by considerations stemming from the position of the Commonwealth as the central government of the nation. External affairs The Commonwealth submitted that the Impugned Act is a law with respect to external affairs on either of two different bases. First, it was submitted that the Impugned Act is an appropriate and adapted response to what is an external matter or thing, namely, the global financial crisis. Secondly, it was submitted that the fiscal stimulus (including the provision of the tax bonus) implements an international agreement or understanding. Neither argument should be accepted. The causes of the financial difficulties which now confront Australia may be found in events occurring outside Australia. Those events and their consequences have affected many countries. The Impugned Act provides for payments to Australian taxpayers with a view to reducing the domestic consequences of those events. The Impugned Act is directed, and directed only, to providing a fiscal stimulus to the Australian economy. It is not a law with respect to any matter or thing external to Australia399. It is not shown that Australia has undertaken any international obligation sufficient to found the Impugned Act in the external affairs power. It was submitted that there is an international agreement or understanding to make a co-ordinated international response to a global economic problem. The agreement or understanding was said to have two sources. First, reference was 398 Administration Act, s 3AA, Sched 1, Ch 2. 399 XYZ v The Commonwealth (2006) 227 CLR 532 at 546 [30]; [2006] HCA 25. made to a Declaration of the Summit on Financial Markets and the World Economy made by the leaders of the Group of Twenty ("the G-20") on 15 November 2008 in Washington DC. Australia is a member of the G-20. Secondly, reference was made to some recommendations of the IMF and the Organisation for Economic Co-operation and Development ("the OECD"). Australia is a member of each of those organisations. As was pointed out in Victoria v The Commonwealth (Industrial Relations Act Case)400 legislation may be supported under the external affairs power if the legislation gives effect to some international obligation. But as also pointed out in that case, what is said to be the legislative implementation of a treaty may present some further questions for consideration, including whether the treaty in question sufficiently identified the means chosen in legislation as one of the ways in which parties to the treaty are to pursue some commonly held aspiration expressed in the treaty. In the present case, however, it is not necessary to examine these questions. It is sufficient to observe that neither the Declaration by the leaders of the G-20, nor the recommendations of either the IMF or the OECD, imposed any obligation on Australia to take action of the kind now in question. The chief focus of the Declaration by the leaders of the G-20 was the articulation of some "common principles for reform of financial markets" and the statement of an "action plan to implement principles for reform". Whether the statement of these principles, or the settling of an action plan, are to be understood as imposing obligations on participants need not be considered. What the Commonwealth submitted to be the relevant obligation was not contained in these parts of the Declaration. Rather, the relevant obligation was said to be contained in a part of the Declaration that described "Actions Taken and to Be Taken". Under that heading, the Declaration recorded that the nations represented had taken certain actions and would take a number of steps to "restore growth, avoid negative spillovers and support emerging market economies and developing countries". Six steps were set out. One of them was: "Use fiscal measures to stimulate domestic demand to rapid effect, as appropriate, while maintaining a policy framework conducive to fiscal sustainability". Read in the context of the Declaration as a whole it is evident that none of the six steps described was intended to bind the nations whose leaders signed the Declaration to any particular course of action. Rather, the document as a whole made plain (by its use of expressions like "as appropriate") that it was for each 400 (1996) 187 CLR 416 at 486-487; [1996] HCA 56. nation to chart its own course in responding to the circumstances that have arisen. The Impugned Act was not enacted in fulfilment of any obligation on Australia recorded in the Declaration of the leaders of the G-20. The recommendations made by the IMF and the OECD are of a similarly advisory or hortatory character. In a World Economic Outlook Update, published in January 2009, the IMF said that "[m]onetary and fiscal policies need to become even more supportive of aggregate demand and sustain this stance over the foreseeable future, while developing strategies to ensure long-term fiscal sustainability" and further, that "the timely implementation of fiscal stimulus across a broad range of advanced and emerging economies must provide a key support to world growth". But these and similar statements made by staff of the IMF in a paper presented to a meeting of the Deputies of the G-20 did no more than point to the perceived need for action to be taken by individual nations if there was to be a durable recovery in global economic activity. They imposed no obligation upon any nation. The Impugned Act is not a law with respect to external affairs. Trade and commerce with other countries and among the States It may be accepted that the Impugned Act was promoted and passed with the hope that many recipients would spend the sum paid. Those who do spend the money may spend it in a way that constitutes international or interstate trade and commerce. But neither the legal nor the practical effect of the Impugned Act is such as to make it a law with respect to either or both of international or interstate trade and commerce. The Commonwealth did not press for any reconsideration of the accepted doctrine of the Court about the trade and commerce power. The Commonwealth submitted that the question critical to the engagement of s 51(i) in this case was one about the practical effect of the Impugned Act. In particular, would the Impugned Act have "a substantial economic effect on the flow of commercial transactions, goods, services, money, credit, among the States?" It is not necessary to decide whether an affirmative answer to the question posed by the Commonwealth would suffice to show that the Impugned Act is a law supported by s 51(i). It was not submitted that the material in the Special Case directly answered the factual question posed by the Commonwealth. The material in the Special Case showed that the "$42 billion Nation Building and Jobs Plan" announced in February 2009 (of which the Impugned Act was one component) was designed to provide "a boost to the economy of around Β½ per cent of [Gross Domestic Product] in 2008-09 and around ΒΎ to 1 per cent of GDP in 2009-10". About $12.77 billion of the total sum of $42 billion is intended to be spent in 2008-09. Sums expected to be payable under the Impugned Act during 2008-09 total $6.95 billion and this would account for more than half of the expenditure of $12.77 billion to be made during 2008-09. But the material in the Special Case shows no estimation of how the increase in Gross Domestic Product relates to trade and commerce with other countries, or among the States. As the Commonwealth acknowledged in argument, "nobody has modelled the precise effect on the flow [of transactions] among the States". The Impugned Act is not a law with respect to trade and commerce with other countries, and among the States. A law with respect to taxation? Although the Commonwealth, in its written submissions, had sought to support the whole of the Impugned Act as a law with respect to taxation, that submission was not maintained in oral argument. The parties agreed that it was expected that, of those taxpayers who on the face of the Impugned Act were eligible for payment of a tax bonus, about 11 per cent would be entitled to a bonus greater than the amount of the taxpayer's adjusted tax liability for the 2007-08 income year. In oral argument, the Commonwealth submitted that only so much of the Impugned Act as provided for the payment of amounts less than or equal to the amount of a taxpayer's adjusted tax liability for the 2007-08 income year was properly characterised as a law with respect to taxation. It was submitted that if the Impugned Act was not otherwise supported as a valid law, s 15A of the Acts Interpretation Act 1901 (Cth) was engaged and the Impugned Act was to be read down. This submission should be accepted. New South Wales, intervening, submitted that the Impugned Act, in all its operations, was a law with respect to taxation. New South Wales submitted that the Impugned Act was to be characterised in this way because s 5 of the Act gives those who were taxpayers for the 2007-08 income year a right to recover the amount of the tax bonus. The submission should be rejected; the Impugned Act is not, in all its operations, a law with respect to taxation. For the purposes of considering the New South Wales submission that the Impugned Act is a law with respect to taxation in all its operations it is convenient to put on one side the questions of reading down presented by the Commonwealth submissions. The Impugned Act raises no revenue. It requires the making of payments to persons who were liable to pay income tax for the immediately preceding financial year. As explained at the start of these reasons, on the face of the Act, the amount to be paid is fixed by reference to the taxable income of that person in that financial year but is not fixed by reference to the amount of tax that was paid. Only those who have lodged their taxation return are eligible for the payment. The Court's decisions about the ambit of the taxation power have focused, at least for the most part, upon whether a law requiring payment of a sum to government is a law with respect to taxation. It is to be recalled that Kitto J expressed his often-quoted propositions401 about characterisation of a law in the context of deciding whether the statutory provisions then in question were to be supported as a law with respect to taxation. The law at issue in Fairfax v Federal Commissioner of Taxation provided for trustees of superannuation funds to pay tax at a higher rate if the fund was not invested to a specified level in public securities including Commonwealth bonds. The question was whether the law was, as the plaintiffs in that case contended, a law with respect to investment in public securities and not a law with respect to taxation402. Subsequent decisions, v The including Australian Tape Manufacturers Association Ltd Commonwealth403, Northern Suburbs General Cemetery Reserve Trust v The Commonwealth404, Airservices Australia v Canadian Airlines International Ltd405 and Luton v Lessels406, have also focused upon whether particular forms of compulsory exaction are properly described as taxation. By contrast, the question in this case is whether a law which requires payment of money to those who have been taxpayers is a law with respect to taxation. In Mutual Pools & Staff Pty Ltd v The Commonwealth407, the Court held, subject to a qualification that is not now material, that a law regulating and defining rights of refund of amounts unnecessarily or mistakenly paid to the Commonwealth in discharge of asserted taxation liabilities was a law with respect to taxation. But that is not this case. If the Impugned Act operated according to its terms, there would be no necessary connection between the amount that was paid as tax and the amount to be paid as a tax bonus. 401 Fairfax v Federal Commissioner of Taxation (1965) 114 CLR 1 at 7; [1965] HCA 64. 402 (1965) 114 CLR 1 at 2. 403 (1993) 176 CLR 480; [1993] HCA 10. 404 (1993) 176 CLR 555; [1993] HCA 12. 405 (1999) 202 CLR 133; [1999] HCA 62. 406 (2002) 210 CLR 333; [2002] HCA 13. 407 (1994) 179 CLR 155 at 167, 175, 183, 205, 209 and 212; [1994] HCA 9. Rather, the argument that the Impugned Act, in all its operations, is a law with respect to taxation may be understood as the reflex of the argument considered and rejected in Fairfax. In Fairfax, it was submitted that consideration of what "seems most likely to have been the main preoccupation of those who enacted"408 the law then in question showed that the law was a law with respect to that subject-matter (promotion of investment in government securities) not a law with respect to taxation. This was said to follow from the need to distinguish between form and substance, and extensive reference was made not only to R v Barger409, but also to McCulloch v Maryland410 and other United States decisions. But as Kitto J rightly pointed out in Fairfax411, an inquiry into the ultimate indirect consequences of the operation of a law can yield no conclusion except about the motives of the legislators. And those motives, even if they could safely be identified, are beside the point. Here, it is said that the Impugned Act, in all its operations, is a law with respect to taxation because it takes as the critical criterion for its operation the identification of a person as one who has paid tax for the most recently completed financial year. And because those, and only those, who have paid tax (and whose taxable income for that year did not exceed $100,000) are eligible for the payment, the law is said to be a law with respect to taxation. But as in Fairfax, that fact, standing alone, directs attention to why the legislators may have enacted the Impugned Act. While it may readily be accepted that the Impugned Act seeks to single out certain taxpayers for the benefit for which it provides, that does not make the Impugned Act a law with respect to taxation. Further, although the payment to be made under the Impugned Act is called a "tax bonus", attribution of that name adds nothing to the debate about characterisation. The character of the Impugned Act depends upon "the nature of the rights, duties, powers and privileges which it changes, regulates or abolishes"412. The amount to be paid depends upon a person's taxable income for 2007-08. On the face of the Impugned Act there is no direct connection, in all operations of the Act, between the amount of the bonus and the amount that has been paid in tax. As the Act is written, the amount that is paid under the 408 (1965) 114 CLR 1 at 7 per Kitto J. 409 (1908) 6 CLR 41. 411 (1965) 114 CLR 1 at 10-11. 412 Fairfax (1965) 114 CLR 1 at 7. Impugned Act may be more or it may be less than the amount of tax the person paid for that year. By the time payments must be made under the Impugned Act it will not be known whether a person to whom the payment is made will be liable to pay income tax for 2008-09. The Commonwealth was right to accept that the Impugned Act is not a law with respect to taxation in all its operations. Reading down The principles governing whether s 15A of the Acts Interpretation Act is to be applied to read down a statutory provision that in some operations would be beyond legislative power are not controversial. They are conveniently described in the joint reasons of five Justices in the Industrial Relations Act Case413: "Section 15A of the Interpretation Act may fall for application in two distinct situations. It may fall for application in relation to 'particular clauses, provisos and qualifications, separately expressed, which are beyond legislative power'414. It may also fall for application in relation to general words or expressions415. It is well settled that s 15A cannot be applied to effect a partial validation of a provision which extends beyond power unless 'the operation of the remaining parts of the law remains unchanged'416. Nor can it be applied to a law expressed in general terms if 413 (1996) 187 CLR 416 at 502. 414 Re Tracey; Ex parte Ryan (1989) 166 CLR 518 at 577; [1989] HCA 12; as to provisions of this kind, see R v Poole; Ex parte Henry [No 2] (1939) 61 CLR 634 at 652; [1939] HCA 19; and Bank of NSW v The Commonwealth (1948) 76 CLR 1 at 371; [1948] HCA 7. 415 See Pidoto v Victoria (1943) 68 CLR 87 at 108; [1943] HCA 37; Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468 at 517-518; [1971] HCA 40; Re F; Ex parte F (1986) 161 CLR 376 at 384-385; [1986] HCA 41. 416 Pidoto v Victoria (1943) 68 CLR 87 at 108 per Latham CJ. See also R v Commonwealth Court of Conciliation and Arbitration; Ex parte Whybrow & Co (1910) 11 CLR 1 at 54; [1910] HCA 33; Vacuum Oil Co Pty Ltd v Queensland [No 2] (1935) 51 CLR 677 at 692; [1935] HCA 9; Bank of NSW v The Commonwealth (1948) 76 CLR 1 at 369-371; Re Dingjan; Ex parte Wagner (1995) 183 CLR 323 at 348; [1995] HCA 16. it appears that 'the law was intended to operate fully and completely according to its terms, or not at all'417. Where a law is expressed in general terms, it may be more difficult to determine whether Parliament intended that it should, nonetheless, have a partial operation. And there is an additional difficulty if it 'can be reduced to validity by adopting any one or more of a number of several possible limitations'418. It has been said that if, in a case of that kind, 'no reason based upon the law itself can be stated for selecting one limitation rather than another, the law should be held to be invalid'419." The critical question in this case is whether it appears that "the law was intended to operate fully and completely according to its terms, or not at all"420. The metaphor of "intention" must not be permitted to mislead421. It may greatly be doubted that legislation is ever passed with legislators intending less than full and complete operation of the statute according to its terms. And in the present matter it may be observed that an important motive for the Impugned Act being directed to taxpayers with low adjusted tax liabilities was the expectation that those taxpayers are more likely to spend the tax bonus than others. But if the question identified in the Industrial Relations Act Case is to be understood, as it must, as directing a comparison between the legal and practical operation of the Act according to its terms and its legal and practical operation as read down, the Impugned Act should be read down in the manner submitted by the Commonwealth. The operation of the Impugned Act as read down is not so different from its operation in accordance with its terms as to lead to the conclusion that it is not intended to operate in that restricted fashion. In particular, because the Impugned Act was evidently intended to provide an 417 Pidoto v Victoria (1943) 68 CLR 87 at 108 per Latham CJ. See also R v Commonwealth Court of Conciliation and Arbitration; Ex parte Whybrow & Co (1910) 11 CLR 1 at 54; Cam & Sons Pty Ltd v Chief Secretary of New South Wales (1951) 84 CLR 442 at 454; [1951] HCA 59; Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468. 418 Pidoto v Victoria (1943) 68 CLR 87 at 111 per Latham CJ. 419 Pidoto v Victoria (1943) 68 CLR 87 at 111 per Latham CJ. 420 Pidoto v Victoria (1943) 68 CLR 87 at 108 per Latham CJ. See also R v Commonwealth Court of Conciliation and Arbitration; Ex parte Whybrow & Co (1910) 11 CLR 1 at 54; Cam & Sons Pty Ltd v Chief Secretary of New South Wales (1951) 84 CLR 442 at 454. 421 cf Wilson v Anderson (2002) 213 CLR 401 at 418 [8]; [2002] HCA 29. urgent stimulus to the economy by putting money in the hands of the intended recipients quickly, it is not to be assumed that the legislative "intention" was that there were to be no payments at all unless those who had paid the least amount of tax for the 2007-08 income year received the whole of the intended amount. That is, the reading down that is required is of the second class identified by Dixon J in R v Poole; Ex parte Henry [No 2]422. Provision is made which, in relation to a limited class of persons, might validly have been enacted, but "is expressed to apply ... to a larger ... class of persons than the power allows". It is intended that "the particular command or requirement expressed in the provision should apply to or be fulfilled by each and every person within the class independently of the application of the provision to the others"423. It is not to be supposed that none were to receive unless all did. As the Commonwealth rightly submitted, the simplest and most elegant drafting expression of the valid operation of the Impugned Act would be to read s 6 as if it provided that the amount of a person's tax bonus is the lesser of the amount of the person's adjusted tax liability for the 2007-08 income year and the amount specified in s 6 as the amount of the tax bonus. But in fact the reading down that is required concerns the entitlement to a tax bonus, not its amount. The valid operation of the Impugned Act depends upon reading down the class of those who are entitled to the payment. In particular, what is necessary is the reading down of one of the five cumulative requirements set out in s 5(1) as conditions to be satisfied for entitlement to a tax bonus: the requirement of par (c) that "the person's adjusted tax liability for that income year is greater than nil". The class of persons that s 5(1)(c) identified is larger than the legislative power with respect to taxation allows424 to the extent that it entitles a person to payment of a tax bonus that is greater than the amount of the person's adjusted tax liability. Read down in the manner indicated, the Impugned Act provides for payment to taxpayers whose taxable income for the income year 2007-08 did not exceed $100,000 (and who are not within one of the exceptions provided by 422 (1939) 61 CLR 634 at 652. 423 R v Poole; Ex parte Henry [No 2] (1939) 61 CLR 634 at 652. 424 R v Poole; Ex parte Henry [No 2] (1939) 61 CLR 634 at 652. See also R v Hughes (2000) 202 CLR 535 at 556-557 [43]; [2000] HCA 22; British American Tobacco Australia Ltd v Western Australia (2003) 217 CLR 30 at 66 [85]-[87]; [2003] HCA s 5(2)) of the amount of that person's adjusted tax liability for that income year or the amount of the tax bonus fixed under the Act, whichever is the less. Read with that operation, the Impugned Act provides for repayment to certain taxpayers of some or all of the amount the taxpayer was liable to pay for income tax for the last complete income year. With that operation the Impugned Act is a law with respect to taxation. Question 3 For the reasons given earlier, s 16(1) of the Administration Act responds to the valid operation of the Impugned Act and appropriates the Consolidated Revenue Fund to the necessary extent. Conclusion For these reasons we would have answered the questions in the Special Case as follows: Yes. The Tax Bonus for Working Australians Act (No 2) 2009 (Cth) is a valid law of the Commonwealth to the extent to which it provides for the payment to a person entitled to a tax bonus of the lesser of the amount of the person's adjusted tax liability for the 2007-08 income year and the amount of the bonus fixed in accordance with that Act. Otherwise, no. Yes. In accordance with the agreement of the parties announced on the second day of the hearing of the Special Case, there is no order for costs. 396 HEYDON J. I dissent. The preferred arguments of the defendants in these proceedings advanced wide constructions of s 61425 of the Constitution read with s 51(xxxix)426 and of s 81427 read with s 51(xxxix). These were arguments capable of producing very extreme results428. If correct, they would cause the "incidental" legislative power in s 51(xxxix) to be wider in its effects than any of the non-incidental legislative powers, and perhaps wider than all of them taken together. What s 1 of the Constitution calls a "Federal" Parliament would have a power to enact legislation of the kind usually associated with non-federal parliaments. The defendants started with s 16429 of the Taxation Administration Act 1953 (Cth) ("the Taxation Administration Act"). They submitted that s 16 was a standing appropriation which authorised the payment of "tax bonuses" under the Tax Bonus for Working Australians Act (No 2) 2009 (Cth) ("the Tax Bonus Act"). Let that be assumed. The remaining issues are whether the plaintiff had standing to challenge the constitutional validity of the Tax Bonus Act, and, if so, whether there was legislative power to enact it. All the defendants' submissions on these remaining issues are erroneous. For that reason, since success for the defendants on any one issue would have been sufficient to bring them victory, it is necessary to deal with them all. The reasons why the defendants must fail are set out in the following order. STANDING CONSTITUTIONAL CONSTRUCTION The defendants' preamble Two "constitutional facts" Deliberate creation by the framers of a national economy? 425 Set out above at [214]. 426 Set out above at [277]. 427 Set out above at [161] and [279]. 428 Cf Liversidge v Anderson [1942] AC 206 at 244. 429 Set out above at [267]. The United States and Canada SECTION 51(i): TRADE AND COMMERCE POWER The key distinction The key question The controversial proposition The purposes of the government The likely effects of the legislation Conclusion SECTION 51(ii): TAXATION POWER Section 51(ii) was available The defendants' submission on the taxation power The plaintiff's submission on the taxation power A gift? Tax liability issues Incentive to lodge tax returns? Refund of mistaken payment? Reading down SECTION 51(xxix): EXTERNAL AFFAIRS POWER One: origins of crisis physically external to Australia β the submission Two: matter of international concern β the submission [460] Three: pursuit and advancement of comity with foreign governments β the submission Four: implementation of international commitment β the submission One: origins of crisis physically external to Australia β consideration Two: matter of international concern β consideration [471]-[473] Three: pursuit and advancement of comity with foreign governments β consideration Four: implementation of international commitment β consideration Conclusion IMPLIED LEGISLATIVE "NATIONHOOD POWER" Classifying the defendants' remaining arguments The defendants' arguments on the "nationhood power" and the "power to manage the national economy": outline Implied legislative "nationhood power" The defendants' arguments: some authorities The Commonwealth v Tasmania Supposed examples of the implied legislative "nationhood power" Which nation? The problem of vagueness Implication not necessary Conclusion on implied legislative "nationhood power" [510] SECTION 61 EXECUTIVE POWER INCLUDES OR SUPPORTS A "NATIONHOOD POWER" Mason J's test: "and which cannot otherwise be carried on for the benefit of the nation" Non-satisfaction of Mason J's test Mason J's test: "peculiarly adapted to the government of a nation" Competition with the powers of the States The Commonwealth v Colonial Combing, Spinning and Weaving Co Ltd Barton v The Commonwealth Jacobs and Brennan JJ: "the idea of Australia as a nation" Correctness of Mason J's test R v Hughes SECTION 61 EXECUTIVE POWER TO MANAGE NATIONAL ECONOMY The broad argument: management of national economy in good times and bad The narrow argument: national fiscal emergency The broad argument considered The narrow argument considered SECTION 51(xxxix) READ WITH SECTION 61 INDEPENDENTLY OF A "NATIONHOOD POWER" OR POWER TO MANAGE THE NATIONAL ECONOMY [553]-[570] The defendants' argument The argument of New South Wales The key question Width of s 61 SECTION 51(xxxix) READ WITH SECTION 81 The defendants' arguments: outline The defendants' arguments: authorities The defendants' arguments: the Constitutional Commission The defendants' arguments: "purposes of the Commonwealth": seven factors The defendants' seven factors considered No independent head of legislative power in s 81 "For the purposes of the Commonwealth" has a narrow meaning The Tax Bonus Act is not incidental to the appropriation VALID APPROPRIATION CONCLUSION STANDING The defendants accepted that the plaintiff had standing to seek two forms of relief. One was a declaration that "the tax bonus [payable to him] is unlawful and void". The other was an interlocutory injunction restraining the first defendant from paying the tax bonus to the plaintiff. But the defendants contended that the plaintiff did not have standing to obtain a declaration that the Tax Bonus Act was invalid. They contended that the plaintiff had no special interest which would allow him to challenge the validity of the Tax Bonus Act in its application to other persons. They also contended that, for example, the plaintiff could not argue that the Tax Bonus Act was invalid in its application to persons who would receive a tax bonus of a greater amount than the tax that they paid, given that the plaintiff himself would not be in that class of persons. This last submission lost its foundation when, late in the oral argument, the defendants made an inevitable concession. They conceded that if the validity of the Tax Bonus Act depended on s 51(ii), the taxation power, the Act could not be supported to the extent to which it would authorise payment to an individual of a tax bonus in excess of that person's adjusted tax liability. But the other submissions, too, must fail. On the defendants' approach, even if the Court held the Tax Bonus Act invalid in relation to the plaintiff, the Commonwealth could continue to treat it as valid in relation to all other persons to whom it applies, and make payments under it even though the duty to do so depended on a statute which had been enacted beyond power, unless each of those persons instituted proceedings similar to those instituted by the present plaintiff. The defendants contemplated that bizarre and unimaginable state of affairs with remarkable equanimity. In fact, it would not arise. The concession that the plaintiff has standing in relation to his own position entails the conclusion that he has standing for all purposes. The defendants' submissions rest on the theory that the Tax Bonus Act could be void in relation to the plaintiff but not in relation to all other persons to whom it applies. That theory is wrong. If the Act is void in relation to the plaintiff, it must be void for all similarly placed persons upon whom an entitlement is conferred. The defendants and the interveners cited numerous well-known authorities on standing430. But in none of them did the problems created by the defendants' argument and concession arise. None of them say anything about those problems. The plaintiff submitted that the law in relation to standing to challenge unconstitutional legislation was too narrow and ought to be widened431. Given that under the existing law the plaintiff has sufficient standing, it is not necessary to examine that submission. CONSTITUTIONAL CONSTRUCTION The defendants' preamble The defendants made six points as part of a preamble to their substantive constitutional arguments. The first step was to say that "a constitutional grant of power is to be read with all the generality that the words used admit"432 (emphasis added). 430 Anderson v The Commonwealth (1932) 47 CLR 50 at 52; [1932] HCA 2; Pye v Renshaw (1951) 84 CLR 58 at 83; [1951] HCA 8; Fishwick v Cleland (1960) 106 CLR 186 at 199; [1960] HCA 55; Logan Downs Pty Ltd v Federal Commissioner of Taxation (1965) 112 CLR 177 at 187; [1965] HCA 16; Victoria v The Commonwealth and Hayden (1975) 134 CLR 338 at 402; [1975] HCA 52; Australian Conservation Foundation v The Commonwealth (1980) 146 CLR 493 at 511, 530-531, 547-548 and 551; [1980] HCA 53; Onus v Alcoa of Australia Ltd (1981) 149 CLR 27 at 37; [1981] HCA 50; Shop Distributive and Allied Employees Association v Minister for Industrial Affairs (SA) (1995) 183 CLR 552 at 558; [1995] HCA 11; Bateman's Bay Local Aboriginal Land Council v Aboriginal Community Benefit Fund Pty Ltd (1998) 194 CLR 247; [1998] HCA 49. 431 He cited Thorson v Attorney General of Canada [1975] 1 SCR 138 at 145 and 161; Inland Revenue Commissioners v National Federation of Self-Employed and Small Businesses Ltd [1982] AC 617 at 644. 432 Grain Pool of Western Australia v The Commonwealth (2000) 202 CLR 479 at 492 [16]; [2000] HCA 14. The second step was to contend that the reason for that rule was explained by O'Connor J's celebrated words in Jumbunna Coal Mine NL v Victorian Coal Miners' Association433. The defendants quoted two passages. One was: "[The] broad and general β¦ terms" of the Constitution are "intended to apply to the varying conditions which the development of our community must involve." The other was: "For that reason, where the question is whether the Constitution has used an expression in the wider or in the narrower sense, the Court should β¦ always lean to the broader interpretation". (emphasis added) The third step was to assert that: "the historical reality is that the framers of the Constitution, as they emerged from the very significant depression that the Australasian colonies went through in the 1890s, could have had no concept of macroeconomic policy." The fourth step argued that nobody had discovered or understood that concept "until the Keynesian revolution of the 1930s in the wake of the Great Depression". The fifth step was the statement that: "what the framers did quite consciously, deliberately and expressly was, by the constitutional restraints and structures that they created, establish a single national economy". The sixth step contended: "[T]o the extent that competing constructions may be [open] in respect of the structures which they created a construction ought not be chosen β¦ which would deprive national institutions of the ability to manage the national economy in the interests of the Australian people as a whole and with the same flexibility as national institutions in other developed nations, including, in particular, Canada and the United States, both of which have sophisticated federal systems." Although those points were made in relation to a supposed constitutional power to manage the national economy434, they pervaded the defendants' approach to other issues. For this reason they require early attention. 433 (1908) 6 CLR 309 at 367-368. 434 See below at [547]-[552]. The breadth of O'Connor J's approach. The first and second steps in the defendants' preamble talk of the construction of "words", "terms" and "expressions". They do not speak of drawing implications, but analysing the meaning of express language. Generally that is how the courts have applied O'Connor J's statement in the Jumbunna case435. However, properly understood, it has some application to the drawing of implications as well. O'Connor J's approach in its totality. There is a forensic technique which is becoming increasingly common. The technique takes a particular statement by a judge like O'Connor J, who was one of the framers of the Constitution, who is revered as one of the finest constitutional lawyers in our annals, whose judgments are much-cited by persons of all constitutional persuasions, whose character is deeply admired, whose "work has lived better than that of anybody else of the earlier times."436 But it sets it out incompletely. It ignores the totality 435 For example, Bank of NSW v The Commonwealth (1948) 76 CLR 1 at 332 per Dixon J; [1948] HCA 7; R v Public Vehicles Licensing Appeal Tribunal (Tas); Ex parte Australian National Airways Pty Ltd (1964) 113 CLR 207 at 225-226 per Dixon CJ, Kitto, Taylor, Menzies, Windeyer and Owen JJ; [1964] HCA 15; Worthing v Rowell and Muston Pty Ltd (1970) 123 CLR 89 at 96 per Barwick CJ; [1970] HCA 19; Western Australia v The Commonwealth (1975) 134 CLR 201 at 282 per Murphy J; [1975] HCA 46; Attorney-General (Cth); Ex rel McKinlay v The Commonwealth (1975) 135 CLR 1 at 68 per Murphy J; [1975] HCA 53; Actors and Announcers Equity Association v Fontana Films Pty Ltd (1982) 150 CLR 169 at 207 per Mason J; [1982] HCA 23; Koowarta v Bjelke-Petersen (1982) 153 CLR 168 at 227-228 per Mason J; [1982] HCA 27; R v Coldham; Ex parte Australian Social Welfare Union (1983) 153 CLR 297 at 314 per Gibbs CJ, Mason, Murphy, Wilson, Brennan, Deane and Dawson JJ; [1983] HCA 19; The Commonwealth v Tasmania (1983) 158 CLR 1 at 128 per Mason J and 220-221 per Brennan J; [1983] HCA 21; Port MacDonnell Professional Fishermen's Association Inc v South Australia (1989) 168 CLR 340 at 378-379 per Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ; [1989] HCA 49; Street v Queensland Bar Association (1989) 168 CLR 461 at 554 per Toohey J; [1989] HCA 53; XYZ v The Commonwealth (2006) 227 CLR 532 at 550-551 [43] per Gummow, Hayne and Crennan JJ; [2006] HCA 25. A possible exception is Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 565 per Brennan CJ, Dawson, Toohey, Gaudron, McHugh, Gummow and Kirby JJ; [1997] HCA 25. Another is McGinty v Western Australia (1996) 186 CLR 140 at 200 per Toohey J; [1996] HCA 48. 436 Remarks by Dixon CJ on his retirement on 13 April 1964, 110 CLR viii at xi. of the judge's position as stated in a particular case. It ignores the totality of the judge's position over a judicial lifetime. The defendants adopted that technique in these proceedings. They, not the Court, interrupted their reading in the middle of the last sentence they quoted from O'Connor J's judgment in the Jumbunna case. Their quotation omitted the following important words: "unless there is something in the context or in the rest of the Constitution to indicate that the narrower interpretation will best carry out its object and purpose."437 The meaning of the first half of the sentence considered in isolation is thus totally different from its meaning when read with the second half. For O'Connor J, the expression "context" was not limited to the local context of the words being construed or even to the content of the Constitution as a whole. In another important passage to which the defendants did not refer, O'Connor J had said four years earlier in State of Tasmania v The Commonwealth and State of Victoria438: "I do not think it can be too strongly stated that our duty in interpreting a Statute is to declare and administer the law according to the intention expressed in the Statute itself. In this respect the Constitution differs in no way from any Statute of the Commonwealth or of a State. β¦ The intention of the enactment is to be gathered from its words. If the words are plain, effect must be given to them; if they are doubtful, the intention of the legislature is to be gathered from the other provisions of the Statute aided by a consideration of surrounding circumstances. In all cases in order to discover the intention you may have recourse to contemporaneous circumstances β to the history of the law β¦ In considering the history of the law β¦ you must have regard to the historical facts surrounding the bringing [of] the law into existence. β¦ You may deduce the intention of the legislature from a consideration of the instrument itself in the light of these facts and circumstances, but you cannot go beyond it." There are many other decisions of O'Connor J revealing his concern to look at context, to view the Constitution as a whole, and to examine the circumstances surrounding its enactment439. For him, a key element in the "context", the "other 437 (1908) 6 CLR 309 at 368. 438 (1904) 1 CLR 329 at 358-359; [1904] HCA 11. See also at 360; and see Griffith CJ at 338-339, with whom O'Connor J concurred at 358. 439 See The Municipal Council of Sydney v The Commonwealth (1904) 1 CLR 208 at 239 and 242; [1904] HCA 50; Peterswald v Bartley (1904) 1 CLR 497 at 507 per Griffith CJ, Barton and O'Connor JJ; [1904] HCA 21; Deakin v Webb (1904) 1 (Footnote continues on next page) provisions" and the "historical facts surrounding the bringing [of] the" Constitution into existence was the federal nature of the Constitution. That was a matter which O'Connor J made plain in yet another of his observations not referred to by the defendants. In Huddart, Parker & Co Pty Ltd v Moorehead440 "[I]t will be well to bear in mind the principle now firmly established in this Court that the Constitution, like any other instrument, must be construed as a whole. Where it confers a power in terms equally capable of a wide and of a restricted meaning, that meaning will be adopted which will best give effect to the system of distribution of powers between State and Commonwealth which the Constitution has adopted, and which is most in harmony with the general scheme of its structure." As Callinan J said in New South Wales v The Commonwealth441, O'Connor J was there being "careful to make clear, a matter of which sight has at times been lost, that generality must make way to context and other limiting provisions in the Constitution". And as Callinan J also pointed out442, it is the "object and purpose" of each particular constitutional expression under examination which is material. What Dawson J said in The Commonwealth v Tasmania is, with respect, compelling443: CLR 585 at 630; [1904] HCA 57; The Federated Amalgamated Government Railway and Tramway Service Association v The New South Wales Railway Traffic EmployΓ©s Association (1906) 4 CLR 488 at 534-535 per Griffith CJ, Barton and O'Connor JJ; [1906] HCA 94; Baxter v Commissioners of Taxation (NSW) (1907) 4 CLR 1087 at 1103 per Griffith CJ, Barton and O'Connor JJ; [1907] HCA 76; Cooper v Commissioner of Income Tax for the State of Queensland (1907) 4 CLR 1304 at 1321; [1907] HCA 27; R v Barger (1908) 6 CLR 41 at 72 per Griffith CJ, Barton and O'Connor JJ; [1908] HCA 43; Attorney-General for NSW v Brewery EmployΓ©s Union of NSW (1908) 6 CLR 469 at 533; [1908] HCA 94; and Australian Boot Trade EmployΓ©s Federation v Whybrow & Co (1910) 10 CLR 266 at 304-305; [1910] HCA 8. 440 (1909) 8 CLR 330 at 369; [1909] HCA 36. 441 (2006) 229 CLR 1 at 317 [767]; [2006] HCA 52. 442 New South Wales v The Commonwealth (2006) 229 CLR 1 at 317 [768]. 443 (1983) 158 CLR 1 at 302. No doubt "No doubt it is true that in the construction of the Constitution an expression should, where possible, be given a wider rather than a narrower construction. But it is only possible to do so where the context, which above all else emphasizes the federal nature of the Constitution, does not suggest that a narrower interpretation will best carry out the object and purpose of that instrument: see Jumbunna Coal Mine NL v Victorian Coal Miners' Association444. the Commonwealth should not be construed with any preconception in mind of the residual powers of the States, but that does not mean that Commonwealth powers should receive an interpretation which has no regard to the federal context in which they are found. The notion that Commonwealth the widest interpretation which the language bestowing them will bear, without regard to the whole of the document in which they appear and the nature of the compact which it contains, is a doctrine which finds no support in [the Engineers' case]445 and is unprecedented as a legitimate method of construction of any instrument, let alone a constitution." legislative powers are legislative powers of to be given the The defendants' submissions would, in Callinan J's words, give the Court a "constitutional role β¦ no different from the role of an umpire of a cricket match, who, by the rules of that game, is obliged to give the batsman, at the expense of the bowler, the 'benefit of the doubt'."446 As bowlers have often lamented, that rule is extremely favourable to batsmen. The defendants urged an approach equally favourable to the Commonwealth. Misapplication of O'Connor J's approach. At one point in their oral address, the defendants observed that nothing is unarguable. That is not so. But the observation was significant. The defendants' reading of the statements of O'Connor J in the Jumbunna case which they quoted was that where there is a controversy between parties about a constitutional expression, one of whom advocates a "wide" meaning (however irrational or unlikely, and however inconsistent with other parts of the Constitution), and the other of whom advocates a "narrow" meaning (however intrinsically more likely that meaning may be), the former should always be adopted. That is not what his language means, whether one looks at the Jumbunna case by itself or other cases in which he explained his approach. Plainly O'Connor J had in mind a contest between two meanings, neither of which had unmistakably compelling force, but each of 444 (1908) 6 CLR 309 at 368. 445 Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (1920) 28 CLR 129; [1920] HCA 54. 446 New South Wales v The Commonwealth (2006) 229 CLR 1 at 318 [768]. which was reasonably available. Only in those circumstances did his reasoning come into play. It is not hard to find decisions where a broad view of a constitutional power was available, but a narrower view was selected for particular reasons, even though judicial minds differed about the merits of those reasons447. On that ground it may be said that Sir Harry Gibbs spoke with some exaggeration, though understandably so, when he said448: "The fact that the Constitution is a federal one has been allowed to play no significant part in determining the meaning and scope of the various powers conferred by s 51 of the Constitution." The arguments of the defendants treat both the legislative and the executive power of the Commonwealth as having great width. When the thinking of O'Connor J is invoked in support of these quite extreme submissions, it is time to pause. Despite their invocation of O'Connor J's approach, the submissions of the defendants are fundamentally inconsistent, it will be seen, with that element of the approach which called attention to the constitutional division of powers between the Commonwealth and the States449. Original meaning. The defendants' submissions are inconsistent with O'Connor J's approach in another way. Some of the defendants' submissions rested on an assumption that the Constitution has changed since 1901: that the Executive has powers now that it did not have in 1901, and that either for that reason, or independently of that reason, the legislature has wider powers as well. Whatever that assumption rests on, it cannot rest on the sources which the defendants assigned to it β the propositions stated by O'Connor J in the Jumbunna case. O'Connor J's reference to applying the broad and general terms of the Constitution to the varying conditions which the community would face 447 For example, New South Wales v The Commonwealth (1990) 169 CLR 482 at 498; cf at 506; [1990] HCA 2. 448 Gibbs, "The Decline of Federalism?", (1994) 18 University of Queensland Law Journal 1 at 3. 449 For examples of the defendants' invocation of O'Connor J's approach, see below at [531], [585] and [592]. For examples of inconsistencies between that invocation and O'Connor J's approach, see below at [534], [605] and [608]. after 1901 does not stand alone in his judgments450. And it had both precursors and successors. In 1816, Story J said in Martin v Hunter's Lessee451: "The [Constitution] was not intended to provide merely for the exigencies of a few years, but was to endure through a long lapse of ages, the events of which were locked up in the inscrutable purposes of Providence." In similar vein, in 1819 Marshall CJ said in McCulloch v Maryland that "we must never forget that it is a constitution we are expounding"452. In the same case he said that constitutions are "intended to endure for ages to come, and consequently, to be adapted to the various crises of human affairs."453 In 1884, Gray J, in delivering the opinion of the Supreme Court of the United States, said454: "A constitution, establishing a frame of government, declaring fundamental principles, and creating a national sovereignty, and intended to endure for ages and to be adapted to the various crises of human affairs, is not to be interpreted with the strictness of a private contract." Griffith CJ, Barton and O'Connor JJ quoted Story J's statement in Baxter v Commissioners of Taxation (NSW)455. Barton J quoted Gray J's dictum in Farey v Burvett456. The passages from Marshall CJ set out above were echoed by Dixon J in Australian National Airways Pty Ltd v The Commonwealth457: 450 For example, State of Tasmania v The Commonwealth and State of Victoria (1904) 1 CLR 329 at 358, concurring with Griffith CJ at 338; The Federated Amalgamated Government Railway and Tramway Service Association v The New South Wales Railway Traffic EmployΓ©s Association (1906) 4 CLR 488 at 534 per Griffith CJ, Barton and O'Connor JJ. 451 14 US 304 at 326 (1816). 452 17 US 316 at 407 (1819) (italics in original). 453 17 US 316 at 415 (1819) (italics in original). 454 Juilliard v Greenman (Legal Tender Case) 110 US 421 at 439 (1884). 455 (1907) 4 CLR 1087 at 1105. 456 (1916) 21 CLR 433 at 444; [1916] HCA 36. 457 (1945) 71 CLR 29 at 81; [1945] HCA 41. "[I]t is a Constitution we are interpreting, an instrument of government meant to endure and conferring powers expressed in general propositions to changing to be capable of flexible application wide enough circumstances." These passages do not suggest that their authors believed that the meaning of either the United States or the Australian Constitution changed over time. They rather suggest that their authors believed that, while the meaning did not change, the meaning was broad. As Justice Scalia wrote458: "Marshall was saying that the Constitution had to be interpreted generously because the powers conferred upon Congress under it had to be broad enough to serve not only the needs of the federal government originally discerned but also the needs that might arise in the future. If constitutional interpretation could be adjusted as changing circumstances required, a broad initial interpretation would have been unnecessary." And Marshall CJ himself specifically said that the American Constitution was "designed to be permanent" and was "unchangeable by ordinary means"459. Certainly O'Connor J was no adherent to any theory that the meaning of constitutional language changed through time. Thus in R v Barger460, a judgment in which he joined with Griffith CJ and Barton J, he said: 458 Scalia, "Originalism: The Lesser Evil", (1989) 57 University of Cincinnati Law Review 849 at 853. See also Goldsworthy, "Originalism in Constitutional Interpretation", (1997) 25 Federal Law Review 1 at 28. 459 In Marbury v Madison 5 US 137 at 176 (1803) he said: "That the people have an original right to establish, for their future government, such principles as, in their opinion, shall most conduce to their own happiness, is the basis on which the whole American fabric has been erected. The exercise of this original right is a very great exertion; nor can it, nor ought it, to be frequently repeated. The principles, therefore, so established, are deemed fundamental: and as the authority from which they proceed is supreme, and can seldom act, they are designed to be permanent." At 177 he indicated that the "constitution is β¦ a superior paramount law, unchangeable by ordinary means". 460 (1908) 6 CLR 41 at 68. See also Attorney-General for NSW v Brewery EmployΓ©s Union of NSW (1908) 6 CLR 469 at 535. "What is the meaning of the word 'taxation' as used in the Constitution, an instrument which became law in the year 1900? It is possible that since that time the word may have been used in Australia in a wider or more limited sense, but whatever it meant in 1900 it must mean so long as the Constitution exists, so far as regards the nature and extent of the power conferred on the Parliament with respect to it." This rests on the view that the Constitution is a statute, to be construed as a statute. For the idea that a statute can change its meaning as time passes, so that it has two contradictory meanings at different times, each of which is correct at one time but not another, without any intervention from the legislature which enacted it, is, surely, to be polite, a minority opinion. The disfavouring of certain aspects of R v Barger in later cases does not affect the correctness of the passage just quoted. O'Connor J's approach: conclusion. Striking aesthetic effects can be achieved by selecting semi-precious stones, splitting them into fragments, jettisoning some fragments, fine-chiselling the remainder, and placing them into a fore-ordained pattern in the manner of a Byzantine mosaic, or a Florentine table of pietra dura, or that type of Mughal craftsmanship involving the inlaying of marble known as parchin kari. The employment of analogous processes in relation to legal propositions, however, rarely leads to convincing conclusions. The defendants appear to think that some parts of O'Connor J's approach suit their interests: these they rely on. They appear to dislike other parts: about these they are silent. But it is not rationally possible to embrace the first and enfold them in the radiant glory of O'Connor J's name while shunning the second. It is true to say that not every part of O'Connor J's constitutional thinking accords with the authorities. His view that the Constitution should be read down on an assumption that some specific heads of power were reserved to the States461 was rejected in the Engineers' case462. But that view was not an 461 For example, Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330 at 370: "The grant of power to the Parliament must β¦ be so construed as to be consistent as far as possible with the exclusive control over its internal trade and commerce vested in the State" (emphasis added). 462 Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (1920) 28 CLR 129. That decision, though it is assumed to possess almost constitutional status in its own right, is open to many criticisms of various kinds: for example, New South Wales v The Commonwealth (2006) 229 CLR 1 at 305-308 [740]-[747] and Walker, "The Seven Pillars of Centralism: Engineers' Case and Federalism", (2002) 76 Australian Law Journal 678. The trade unions and governments whose short-term interests lay in attacking it in New South Wales v The Commonwealth (Footnote continues on next page) essential aspect of the approach to statutory construction described above. It is one thing to construe the Constitution on the presumption that some specific heads of power are reserved to the States. It is another thing to construe it without any such presumption, but bearing in mind that sometimes a narrower rather than a broader meaning for Commonwealth powers will best give effect to the construction of the federal compact considered as a whole. In all relevant respects other than the reserved State powers doctrine, O'Connor J's approach survives. The Engineers' case does not alter the present relevance of his approach to construction. Nor does the fate of his opinions on the substantive point in Huddart, Parker & Co Pty Ltd v Moorehead463. His approach to construction does not rest on any discredited idea of "federal balance"464. Far from supporting the defendants, O'Connor J's approach to construction is fatal to their position at numerous points465. Two "constitutional facts" Failure to demonstrate constitutional facts. The third step in the preamble to the defendants' arguments asserted that the framers had no concept of macroeconomic policy. The fourth step made a related assertion β that no-one else did either, until Keynes. It must be conceded that the fourth step corresponds with popular myth. But is the myth true? The fact is that the defendants made no endeavour at any stage of their argument to demonstrate the truth of these two assertions. In the absence of demonstration, they cannot be accepted. The defendants tender for consideration two "constitutional facts". The consideration calls for inquiry into "the general facts of history as ascertained or ascertainable from the accepted writings of serious historians"466 β here economic or intellectual historians. This may require agreement between the parties on what are accepted writings and did not do so, no doubt because their long-term interests were perceived to lie elsewhere, and hence there was no need to examine its status in that case. The same may be said of their failure to challenge Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468; [1971] HCA 40. 463 (1909) 8 CLR 330 at 374. See Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468; New South Wales v The Commonwealth (2006) 229 CLR 1. 464 New South Wales v The Commonwealth (2006) 229 CLR 1 at 119-121 [194]-[196]. 465 See [534], [605] and [608]. 466 Australian Communist Party v The Commonwealth (1951) 83 CLR 1 at 196 per Dixon J; [1951] HCA 5. who are serious historians467. The defendants took the Court to no writings of any historians or anyone else β to no "serious studies and inquiries and historical narratives."468 That may not be fatal, because there are other ways of establishing constitutional facts469. But what is fatal is that the defendants did not rely on those other ways or advance any other reason for accepting the accuracy of the constitutional facts relied on. The 1937 Royal Commission. In similar vein, the defendants contended that the: "whole notion of monetary policy in respect of the national economy β¦ really was not around as a macroeconomic concept, but it could not have had any implementation before the common currency was introduced by the Commonwealth in 1910[470]. It was 1924 when the Commonwealth Bank came to have control over the issue of currency[471]." The defendants contended that fiscal policy only "creeps in β¦ [,] was invented, and started being used β¦ in 1937 and following". The sole material relied on was the following passage in the Report of the Royal Commission on Monetary and Banking Systems in Australia472, published in August 1937: "In general, the proper policy for the governments to pursue if a depression is developing is to expand public works, refrain from increasing taxation, and avoid a general contraction of government 467 Woods v Multi-Sport Holdings Pty Ltd (2002) 208 CLR 460 at 512 [165] per Callinan J; [2002] HCA 9. 468 Australian Communist Party v The Commonwealth (1951) 83 CLR 1 at 196 per 469 Thomas v Mowbray (2007) 233 CLR 307 at 517 [629]; [2007] HCA 33. 470 A reference to the Australian Notes Act 1910 (Cth). 471 In fact this event took place in 1920, when the relevant amendment to the Commonwealth Bank Act 1911 (Cth) was effected by the Commonwealth Bank Act 1920 (Cth), s 7. 472 Australia, Report of the Royal Commission on Monetary and Banking Systems in Australia, (1937) at 209-210. One member was the Hon J B Chifley. The coming event of his attempt as Prime Minister to nationalise the banks cast long shadows before it in his brief but well-known dissent advocating that course. The other members were Mr Justice Napier (Chairman), Edwin Van-der-vord Nixon, Professor R C Mills, Henry Arthur Pitt and Joseph Palmer Abbott. expenditure, even although deficits are incurred. When conditions have improved as private enterprise revives and full employment is approached, the proper policy is to contract public works expenditure, maintain or increase taxation, budget for surpluses, and reduce the debt which has been incurred through the depression policy. β¦ The assistance which can be given by the central bank in meeting or preventing a depression is to expand or control credit in conformity with the general policy. If an expansion of central bank credit is to be successful in promoting recovery, the credit must be used, and this comes about mainly through government spending as a supplement to private spending." The defendants submitted that this passage was a reference to the treatment of fiscal policy in Keynes's General Theory of Employment, Interest and Money. Some of the ideas in that work had been propounded in the circles in which Keynes moved a little before it was published in January 1936473. But the proposition that what was discussed in the courts and combination rooms of Cambridge or the squares of Bloomsbury had come to the attention of the Commissioners at the other end of the earth needs demonstration if it is to be relied on. Further, Keynes's General Theory itself is not easy or simple to absorb474. In truth, for all that appears on its face, the quoted passage seems to have origins quite independent of Keynes. The passage does not present itself as containing some insight never before perceived in the history of economic thought. Rather its authors evidently conceived themselves to be referring to well-understood commonplaces in a matter-of-fact way. The passage suggests that "Keynesian" methods had been employed by governments in earlier times, even though those governments may not have appreciated the subtleties of the theoretical framework Keynes erected to defend those methods. There were, indeed, distinguished reviewers who thought that Keynes's work was not a landmark, but in part a symptom of trends and in part a reversion to mercantilism475. In truth, Keynes's brilliance and originality may have lain in 473 Harrod, The Life of John Maynard Keynes, (1951) at 452. 474 "His main difficulty was not that his critics disagreed with his position, still less that they brought good arguments against it, but that he simply could not make them understand what the position was that he was taking up": Harrod, The Life of John Maynard Keynes, (1951) at 451. In 1931, Samuelson said of the book: "It is a badly written book, poorly organised β¦ It is arrogant, bad-tempered, polemical, and not overly-generous in its acknowledgments. It abounds in mares' nests and confusions β¦ Flashes of insight and intuition intersperse tedious algebra": quoted by Skidelsky, John Maynard Keynes, Volume Two: The Economist as Saviour 475 Skidelsky, John Maynard Keynes, Volume Two: The Economist as Saviour 1920- places other than those suitable for the defendants' arguments. Whatever the truth, it is not possible to accept the third and fourth steps in the defendants' preamble: the Court was not directed to any consideration which might support them. Original intent. There are two further difficulties with the third and fourth steps. One difficulty is that recourse to history, so far as Cole v Whitfield476 permits it, is limited to "identifying the contemporary meaning of language used, the subject to which that language was directed and the nature and objectives of the movement towards federation from which the compact of the Constitution finally emerged." Reference to history is not permitted for the purpose of substituting for the meaning of the words used in the Constitution the scope and effect which the framers subjectively intended the Constitution to have. Whether or not this type of reasoning is limited to the construction of express language477, the third and fourth steps appear to be "originalist" assertions. What is more, as United States lawyers would say, they seem to be laying the groundwork for inferences about "original intent", not "original meaning". The unusual course of drawing originalist inferences from negatives to support conclusions about the mental state of the framers is impermissible. The other difficulty is that even if, as the defendants assert, the framers were unaware of macroeconomic policy, and even if, contrary to Cole v Whitfield, material revealing the framers' actual mental states may be considered, acceptance of the third and fourth steps would suggest that there had not been a conferral on the Commonwealth of general powers of control over the economy. If the mental states of the framers are relevant, as distinct from the meaning of the words they used at the time they used them, any ignorance they had of macroeconomic policy would suggest a complete failure to advert to the question whether the Commonwealth should have general powers of control over the economy. That in turn would support the conclusion that there was no intention to confer the relevant power on the Commonwealth, and no conferral of it in fact. What in fact was the defendants' purpose in seeking to establish the propositions stated in the third and fourth steps of their preamble? They seem to 476 (1988) 165 CLR 360 at 385; [1988] HCA 18. 477 See, in Cole v Whitfield (1988) 165 CLR 360 at 385, the expressions "the meaning of the words used", "the scope and effect β¦ which the founding fathers subjectively intended the section to have", "the contemporary meaning of language used" and "that language" (emphasis added). have had in mind an argument against them that while the Commonwealth legislature is expressly granted many particular powers to manage the national economy, there is no general power to manage the national economy, because none was expressly granted. The defendants appear to have been seeking to rebut that argument by saying that the absence of an express grant of a general power can be explained by the framers' ignorance of macroeconomic policy, and by hinting that the Constitution would have contained an express grant of a general power had the framers been aware of macroeconomic policy. This enterprise seems to assume that the words which the framers might have used in the Constitution had their knowledge been greater than it was, but which they did not use, is relevant to the construction of the words they actually did use. This novel approach to the interpretation of the Constitution must be rejected. Deliberate creation by the framers of a national economy? The fifth step in the preamble asserted that the framers deliberately established a "single national economy". This is problematic because it is not possible for constitutions to establish economies or prevent them from being established, whether they be "single national economies" or otherwise, outside Colbertian mercantilist states or totalitarian regimes of the Nazi or Stalinist type β and even in those systems it is very hard to do so. The Constitution made possible the eventual emergence of a national economy. The fact that a national economy eventually emerged β a very general phenomenon resulting from many imponderable factors and processes independent of the will of the framers β has no significance in determining whether the Commonwealth has an exclusive, as distinct from a very substantial, power to manage it. The United States and Canada The sixth step contended that the Commonwealth Government should have the same powers as the central governments in the United States and Canada. The problem with the sixth step is that it purports to apply the rules of construction set out in steps one and two to the "construction" either of express words, or of "structures β¦ created" by the Constitution which, if in fact created by the Constitution, must have been created by express words. The defendants did not point to any express words which could profitably be exposed to the rules of construction stated in the first two steps. Nor did they at any stage compare the express words of the Constitutions which created the "sophisticated federal systems" of the United States and Canada with the express words of the Australian Constitution to see what, if any, difference there was. Further, the sixth step, when the defendants' arguments, can be seen to rest on two fallacies underlying many of those arguments. One is velleity. The defendants persistently advocated conclusions which corresponded with what the defendants desired, irrespective of any difficulties in the path of achieving that desire. Their motto was: "We taken with other parts of want it to be so, therefore it is so." The other fallacy is the Panglossian belief that what is said to have evolved over time as a matter of governmental practice corresponds with the Constitution. It holds, not only that everything which exists is for the best in the best of all possible worlds, but also that what exists in that world is constitutionally valid. It fails to face up to the fact that, magnificent though the framers' achievement was, the Constitution is not consistent with every human desire478. If it is to be changed, s 128 is a means, and the sole means, of doing so. SECTION 51(i): TRADE AND COMMERCE POWER The key distinction Section 51(i) of the Constitution gives power to make laws with respect to "trade and commerce with other countries, and among the States". It compels a distinction between trade and commerce with other countries, and among the States, on the one hand, and other forms of trade and commerce, on the other479. It does not permit an argument that trade and commerce in Australia is one indivisible whole. Nor does it permit an argument that any legislation having an effect on trade and commerce in Australia must inevitably have an effect on trade and commerce with other countries, and among the States. While it may not be necessary to demonstrate that the Tax Bonus Act is exclusively related to trade and commerce with other countries, and among the States, it is necessary to show at least that it has some definable relationship with that class of trade and commerce. The key question To establish this relationship, the defendants posed the key question as being: "does this law have a substantial economic effect on the flow of commercial transactions, goods, services, money, credit, among the States?" 478 XYZ v The Commonwealth (2006) 227 CLR 532 at 596-597 [186]. 479 Airlines of NSW Pty Ltd v New South Wales [No 2] (1965) 113 CLR 54 at 88, 115, 128, 142-144 and 155; [1965] HCA 3; Attorney-General (WA) v Australian National Airlines Commission (1976) 138 CLR 492 at 499, 502-503 and 508-511; cf at 529-530; [1976] HCA 66. Despite indicating a conditional desire to reopen these cases, and despite reminders from New South Wales of the necessity to do so if the defendants were to win on s 51(i), the defendants did not in fact apply to do The controversial proposition The defendants' argument was, in summary, that the intended practical operation of the Tax Bonus Act was to inject $7.7 billion into the Australian economy and give around 8.7 million recipients the means to participate directly in trade or commerce "thereby affecting both directly and indirectly trade and commerce among the States and with other countries." The only controversial part of this proposition is what appears in quotation marks. The defendants supported this part with two submissions. The purposes of the government Explanatory Memorandum. The first of the defendants' submissions appeared to rest, whether or not legitimately, on the intentions or purposes of those who introduced the legislation. The submission was that the Explanatory Memorandum to the Bill for the Tax Bonus Act explained it as part of a package to give effect to the government's "Nation Building and Jobs Plan", which was "introduced to assist the Australian people [to] deal with the most significant economic crisis since the Second World War and [to] provide immediate economic stimulus to boost demand and support jobs."480 However, the Explanatory Memorandum does not establish the legislative purpose necessary to support the submission, namely a purpose that the trade and commerce in which recipients of the bonus will participate will be trade and commerce with other countries, and among the States. "Updated Economic and Fiscal Outlook". The same is true of other indications of legislative purpose. Thus the government's "Updated Economic and Fiscal Outlook" (February 2009) contended that a purpose underlying the decision to provide for tax bonuses was, together with all the other elements in the "Nation Building and Jobs Plan", to "support economic growth and jobs in Australia", and, taken with certain other bonus payments, was to "deliver an immediate stimulus to the economy to support growth and jobs now". These goals are neutral as between the impact on trade and commerce with other countries, and among the States, on the one hand, and other types of trade, on the other. It was not demonstrated to be the case that if there is a significant impact on the latter types of trade and commerce it will merely be a collateral and unintended result of endeavouring to provide the former type. 480 Australia, House of Representatives, Tax Bonus for Working Australians Bill (No 2) 2009 and Tax Bonus for Working Australians (Consequential Amendments) Bill (No 2) 2009, Explanatory Memorandum, par 1.3. The Tax Bonus Act itself. Leaving aside s 15AB of the Acts Interpretation Act 1901 (Cth) and the capacity at common law to resort to other material giving contextual background, the only evidence of statutory purpose is that to be found by construing the statute. The Tax Bonus Act does not reveal a purpose of having an impact on trade and commerce with other countries, and among the States, as distinct from other kinds of trade. This point demonstrates weakness in the defendants' second submission on s 51(i) as well. The likely effects of the legislation The submission. The second submission advanced by the defendants appeared to turn not on the purposes of those who promoted the legislation, but on its likely effects. The submission was that "[i]t can reasonably be anticipated that the spending generated by the payments made under the Act will have a material effect on the amount of" trade and commerce with other countries, and among the States. The silence of the Tax Bonus Act. As South Australia pointed out, nothing in the provisions of the Tax Bonus Act reflects any criterion ensuring that particular recipients are more likely to make expenditures, if they make expenditures at all, in trade and commerce with other countries, and among the States. The Act is structured so as to target a class β persons with taxable incomes between nil and $100,000, divided into three subclasses. The class as a whole is not inherently likely to favour trade and commerce with other countries, and among the States, as the object of their expenditures. The same is true of each subclass. "Updated Economic and Fiscal Outlook". The defendants pointed to the following passage in "Updated Economic and Fiscal Outlook" (February 2009): "Well-designed discretionary fiscal policy should work in conjunction with monetary policy to provide an immediate boost to demand. The most effective fiscal policy measures the current circumstances are those that can be implemented quickly and are targeted to those who are most likely to spend additional income. to achieve this Like the Economic Security Strategy, the Nation Building and Jobs Plan includes measures that can be implemented quickly, so that it will support growth through to June 2009, and has been targeted towards those low- and middle-income households who are most likely to spend additional income and who are most vulnerable during an economic slowdown. To the extent that these payments are saved rather than spent immediately, they will accelerate balance sheet repair and underpin consumption over time." This passage does not indicate that the bonus payments will have an impact on trade and commerce with other countries, and among the States, as distinct from other forms of trade and commerce. Absence of financial modelling. At other points in their arguments the defendants referred to the financial modelling underlying the "Nation Building and Jobs Plan". But no financial modelling was cited to support the alleged reasonable anticipation that the expenditure of the bonus payments would have a material effect on the amount of trade and commerce with other countries, and among the States. Indeed the defendants specifically conceded that no financial modelling of that kind had been done. All they pointed to was modelling indicating an effect on gross domestic product of 0.5 percent by June 2009 and another 0.75 to 1 percent by June 2010. The tax bonuses were to be paid across the country. The country has, as the defendants rightly agreed, a fairly homogeneous character geographically in terms of distribution of wealth. The payments are to poor or relatively poor people, or "low- and middle-income households" (or as "Updated Economic and Fiscal Outlook" (February 2009) more euphemistically still puts it, "liquidity constrained households"). The problem is that while these figures measure an impact on trade and commerce, they do not measure any impact on trade and commerce with other countries, and among the States. Sufficient practical connection? The defendants accepted that the payments were "not focused on interstate trade and commerce", but were focused on trade and commerce in general. However, they submitted that the desired effect on gross domestic product gave the payments a sufficient practical connection with trade and commerce with other countries, and among the States. That submission must be rejected. It ignores a necessary distinction. It fails to bridge a gap not otherwise bridged. It could not be correct unless s 51(i) were rewritten by leaving out the last seven words. Conclusion The answer to the question posed by the defendants as the key one481 is "no". But even if it is assumed that the spending of the bonus payments will have some eventual connection with trade and commerce with other countries, and among the States, it has not been demonstrated that the connection is more than "insubstantial, tenuous or distant". Hence "[the legislation] cannot be described as made with respect to" that kind of trade and commerce482. 481 See above at [437]. 482 Melbourne Corporation v The Commonwealth (1947) 74 CLR 31 at 79 per Dixon J; [1947] HCA 26. SECTION 51(ii): TAXATION POWER Section 51(ii) was available Section 51(ii) of the Constitution gives power to make laws with respect to "taxation; but so as not to discriminate between States or parts of States". There is no doubt that a law supported by s 51(ii) could have been employed to achieve the goals of the Tax Bonus Act. For example, a law could have made a for retrospective downward adjustment of corresponding repayment of excess sums assessed483. Nothing in the materials before the Court suggested that that technique would have been slower or less convenient or less effective than the technique embodied in the Tax Bonus Act. The only question is whether the different technique actually employed by the Tax Bonus Act makes it a law with respect to taxation. liability and provided tax The defendants' submission on the taxation power The defendants relied on some language in Mutual Pools & Staff Pty Ltd v The Commonwealth484. They contended that s 51(ii) conferred power to make a law "to define and regulate rights of refund", in the words of Deane and Gaudron JJ485, and to create "a procedure for repaying the sums collected β¦ to those who had paid those sums", in the words of McHugh J486. They submitted that these propositions did not apply only to the repayment of taxes wrongly collected or, as Deane and Gaudron JJ said, "of amounts unnecessarily or mistakenly paid to the Commonwealth"487. They submitted that the Tax Bonus Act was a law "that, in substance, returns taxes collected to a class of taxpayers who had a positive adjusted tax liability" for the 2007-2008 income year. 483 Putting aside individuals with an adjusted tax liability of less than $900 to whom the Commonwealth could not make a payment of $900 under the taxation power because it would involve a "return" of more money than they had paid in tax for the relevant year. 484 (1994) 179 CLR 155; [1994] HCA 9. 485 (1994) 179 CLR 155 at 182. 486 (1994) 179 CLR 155 at 218. 487 (1994) 179 CLR 155 at 183. The plaintiff's submission on the taxation power The plaintiff submitted that the Tax Bonus Act when examined "by reference to the nature of the rights, duties, powers and privileges which it changes, regulates or abolishes"488 was not a law with respect to taxation within the meaning of s 51(ii). He submitted that in truth the payments of tax bonuses had no effect on the legal rights and liabilities of the recipients with respect to their taxation affairs. They were not debts due and payable. They were only gifts arbitrarily fixed by Parliament. A gift? This particular submission cannot be accepted without qualification. If a monetary "gift" is a payment which could not have been legally enforced, the tax bonuses are not gifts. It is true that they were not bargained for, that there is no consideration for them and that no trust was declared in relation to them. But ss 5-7 of the Tax Bonus Act describe identified persons as being "entitled" to them489. There is a right to receive them. There is a duty to pay them which is legally enforceable either by an action in debt490, or by obtaining an order of mandamus against the Commissioner491. Tax liability issues However, the other submissions of the plaintiff broadly to the following effect are correct. The right to recover the payments did not affect the legal rights and liabilities of recipients with respect to their taxation affairs. The tax liability of recipients as assessed under the Income Tax Assessment Act 1997 (Cth) remains unchanged: they are obliged to pay a sum corresponding to the tax assessed as payable in their notices of assessment, not that sum less the tax bonus. The Tax Bonus Act does not provide for the amendment of any assessment. It does not provide for a refund or repayment or rebate. The entitlement to a tax bonus cannot be set off by the Commissioner or the recipient 488 Fairfax v Federal Commissioner of Taxation (1965) 114 CLR 1 at 7 per Kitto J; [1965] HCA 64. 489 See above at [139], [261] and [263]. 490 Shepherd v Hills (1855) 11 Ex 55 at 67 [156 ER 743 at 747]; The Commonwealth v SCI Operations Pty Ltd (1998) 192 CLR 285 at 313 [65]; [1998] HCA 20. 491 Health Insurance Commission v Peverill (1994) 179 CLR 226 at 242-243; [1994] HCA 8. tax liability the fact that even against the recipient's existing tax liability492. The lack of correlation of the tax bonuses with the is revealed by recipient's "adjusted tax liability" is less than the bonus β even if it is as little as $1 β it may still trigger a bonus of $900. The Tax Bonus Act has nothing to do with arriving at a figure which the recipient must pay by way of tax, or which the Commonwealth must pay in order to ensure that no more than the legally correct amount of tax was exacted. The tax bonuses were to come to recipients, in the ordinary course, by payment to the credit of a nominated financial institution account pursuant to s 7(2) of the Tax Bonus Act. The Tax Bonus Act injects $7 billion into the bank accounts of persons thought likely to spend what they receive. The Tax Bonus Act is thus a method of achieving fiscal goals. It is not a law about tax liabilities. It does not change, regulate or abolish any right, duty, power or privilege with respect to taxation. The Tax Bonus Act may produce for recipients an effect equivalent in money terms to an Act retrospectively reducing their tax liability and reimbursing any overpayment493, but, even in substance, it is not equivalent in law. An Act of the latter kind would alter taxation liabilities; the Tax Bonus Act does not. The references to "adjusted tax liability" and "taxable income" serve as methods for identifying the class of recipients and the quantum of what they are to receive. These references to their tax position have nothing to do with the correctness of their tax liability. Their tax position is significant because of its utility as a guide to whether recipients are likely to spend rather than save the bonuses paid, and because of the Commissioner's possession of readily available records enabling expeditious assessment of whether recipients meet the criteria for entitlement to the bonuses. It was not the bonus which adjusted any tax liability; rather, it was the "adjusted tax liability" which was a criterion for identifying which persons were eligible for the bonus. The defendants submitted that a law could relate to taxation even though it provided for a payment to achieve an object other than the correction of a taxation error. The present difficulty, however, is that the Tax Bonus Act, although devised to achieve an object other than the correction of a taxation error, has no other connection with rights and liabilities in relation to taxation. Incentive to lodge tax returns? The defendants did not seek to have the Tax Bonus Act characterised as a law relating to taxation merely because s 5(1)(e)494 may have the effect of 492 Tax Bonus for Working Australians (Consequential Amendments) Act (No 2) 2009 (Cth), Sched 1, item 6. 493 Putting aside the individuals referred to in n 483 above. 494 See above at [139] and [261]. causing persons who want to receive the bonus to lodge their tax returns by 30 June 2009. Their stance in this respect was correct. The primary duty of taxpayers, established by a legislative instrument long antedating the enactment of the Tax Bonus Act, was to lodge returns by 31 October 2008. By 6 March 2009, 7.11 million taxpayers had lodged their tax returns, and 1.6 million had not. It was not an intended effect of the Tax Bonus Act to generate an incentive for taxpayers to file their tax returns up to eight months after they should have. The date 30 June 2009 was selected merely as a means of assisting ascertainment of which taxpayers would and which taxpayers would not be eligible for the tax bonus. Like other references to taxation integers, it helped mark out a class of persons to which the law would apply. But neither it nor the other markers gave the law the character of one relating to tax. Refund of mistaken payment? Unlike the legislation upheld in Mutual Pools & Staff Pty Ltd v The Commonwealth, the Tax Bonus Act did not regulate and define "rights of refund of amounts unnecessarily or mistakenly paid to the Commonwealth in discharge of asserted taxation liabilities"495. In that case the amounts were paid on the faith of an assumption that the legislation in question, which was invalidated by this Court, was valid. It cannot be said that the Commonwealth was acknowledging that it had "mistakenly imposed" too much tax on the persons falling within s 5 of the Tax Bonus Act, and was saying "we want to hand it back." The Commonwealth was not acknowledging any mistake. It had not made any mistake. It regarded the tax levels in force for the 2007-2008 year of income as correct at all material times β not as correct at all times up to the decision to adopt the "Nation Building and Jobs Plan" in February 2009. It did not want to "hand back" something mistakenly received. It wanted to hand over sufficient monies to stimulate the economy. Reading down The defendants made a concession that if the Tax Bonus Act could only be validated by recourse to s 51(ii), it could not be supported "to the extent that it would authorise payment to an individual of [a] tax bonus that is in excess of that individual's adjusted tax liability." However, they submitted that the Tax Bonus Act could be read down and remain valid so far as it was not in excess of power. But the submission only extended to a reading down of the Tax Bonus Act which would cure that relatively minor defect. The defendants did not submit that even if the much more radical defect discussed in the preceding paragraphs existed, the Tax Bonus Act was nonetheless capable of being validated by being read down. The decision to abstain from that submission was correct. The only 495 (1994) 179 CLR 155 at 183 per Deane and Gaudron JJ. reading down submission advanced by the defendants was structured so as to deal with the consequences of their concession β not the much more radical defect. SECTION 51(xxix): EXTERNAL AFFAIRS POWER Section 51(xxix) of the Constitution gives power to make laws with respect to "external affairs". The defendants submitted that the Tax Bonus Act was a law with respect to external affairs on one or more of four bases. One: origins of crisis physically external to Australia β the submission The defendants submitted that if a place, person, matter or thing lies outside the geographical limits of Australia, then it is external to it and falls within the meaning of the phrase "external affairs". Hence they submitted that a law of the Commonwealth legislature would be valid if it can properly be characterised as a law "with respect to" a place, person, matter or thing which is external to Australia496. The criterion of validity was whether an Australian law was sufficiently connected in its legal and practical operation with s 51(xxix)497. The defendants submitted that the power to make laws with respect to external affairs extended to laws "addressing adverse consequences within Australia which result from matters or things physically external to Australia." They submitted that the Tax Bonus Act was a response to internal difficulties which have arisen because of a sharp downturn in external economic conditions. In the end, the defendants widened the submission. It was said that s 51(xxix) supported not only laws which responded to overseas causes for local Australian difficulties, but also laws which might have a beneficial effect overseas. Two: matter of international concern β the submission The defendants advanced a contention, sometimes as part of the next argument, and sometimes as an independent (though secondary) argument, that the global financial crisis is a matter of international concern. 496 Citing Polyukhovich v The Commonwealth (1991) 172 CLR 501 at 530, 599, 695-696 and 712; [1991] HCA 32. 497 Citing Leask v The Commonwealth (1996) 187 CLR 579 at 624; [1996] HCA 29; New South Wales v The Commonwealth (2006) 229 CLR 1 at 103 [142]. Three: pursuit and advancement of comity with foreign governments β the submission The defendants submitted that a law seeking the pursuit and advancement of comity with foreign governments could be a law with respect to external affairs. They submitted that international economic agencies have called for all countries with advanced economies to pursue policies of fiscal stimulation. The Australian Government had answered the calls by agreeing to use fiscal measures to stimulate domestic demand rapidly in committing to the Declaration of the Summit on Financial Markets and the World Economy on 15 November 2008 ("the G-20 Declaration"). The Tax Bonus Act pursued international comity with foreign governments in dealing with the global financial crisis. And the defendants submitted that a failure by Australia to act had the capacity to affect its relations with other countries. Four: implementation of international commitment β the submission South Australia advanced a fourth basis for invoking the external affairs power by developing a narrow version of the defendants' third argument, which it rejected as being uncertain and apt to mislead. It contended that the Tax Bonus Act would be valid if it were a proportionate legislative response to an assumption by the Australian Government of "a precise and identifiable international obligation or international commitment" or to receipt by the Australian Government of "a specific and identifiable recommendation of a relevant international organisation". South Australia did not rely on any recommendation. But it identified an "international commitment" in the following words in the G-20 Declaration, appearing under the heading "Actions Taken and to Be Taken": "Against this background of deteriorating economic conditions worldwide, we agreed that a broader policy response is needed, based on closer macroeconomic cooperation, to restore growth, avoid negative spillovers and support emerging market economies and developing countries. As immediate steps to achieve these objectives, as well as to address longer-term challenges, we will: Use fiscal measures to stimulate domestic demand to rapid effect, as appropriate, while maintaining a policy framework conducive to fiscal sustainability." The defendants joined South Australia in advancing this submission. They said that the G-20 Declaration was an agreement β not an agreement "made within any formal treaty structure" and not "an enforceable agreement", but rather a "commitment to act in a particular way for international purposes." But the defendants did not go so far as to submit that those G-20 countries which had not complied with the commitment were departing from any agreement. The implementing defendants also submitted recommendations of international bodies that are not binding under international law. They relied on certain "recommendations" as steps carried out in the implementation of the G-20 Declaration. that s 51(xxix) extended The above four submissions cannot be accepted for the following reasons. One: origins of crisis physically external to Australia β consideration The authorities. The defendants' submission that legislation is valid under s 51(xxix) if it relates to external causes of conditions in Australia is unsupported by authority498. There is authority, not challenged in this case, which holds that a place, person, matter or thing outside Australia is within the phrase "external affairs"499. Hence, on that authority, a law relating to a place, a person, a matter or a thing outside Australia can be a valid law pursuant to s 51(xxix) β for example, war crimes committed in Europe500, or sexual crimes committed in Thailand501. But it does not follow that a law regulating matters and things within Australia falls within the external affairs power simply because a cause of the perceived need to regulate those Australian matters and things arose outside Australia. That kind of law relates not to external affairs, but to domestic affairs. A law relating to a consequence is not necessarily a law relating to its cause. The Australian orientation of the Tax Bonus Act. The Tax Bonus Act does not relate to the external causes of the present state of the Australian economy. 498 The defendants submitted that De L v Director-General, NSW Department of Community Services (1996) 187 CLR 640 at 650; [1996] HCA 5 indicated that s 51(xxix) was not limited to regulating conduct, duties or rights outside Australia. That is not so. The passage cited stated that control of "the movement of children between Australia and places physically external to Australia" is within s 51(xxix). That movement is not complete until it reaches a point physically external to Australia. Until that time the geographic externality doctrine cannot operate; from that time it does. 499 Polyukhovich v The Commonwealth (1991) 172 CLR 501 at 632; Horta v The Commonwealth (1994) 181 CLR 183 at 193-194; [1994] HCA 32; Victoria v The Commonwealth (1996) 187 CLR 416 at 485; [1996] HCA 56; XYZ v The Commonwealth (2006) 227 CLR 532 at 546 [30]; Thomas v Mowbray (2007) 233 CLR 307 at 324 [6] and 365 [153]. 500 Polyukhovich v The Commonwealth (1991) 172 CLR 501. 501 XYZ v The Commonwealth (2006) 227 CLR 532. The Explanatory Memorandum to the Bill for the Tax Bonus Act said that the tax bonuses were part of the Commonwealth's plan: "to assist the Australian people [to] deal with the most significant economic crisis since the Second World War and [to] provide immediate economic stimulus to boost demand and support jobs." Those are references to an Australian economic crisis, Australian demand and Australian jobs. The demand stimulated is demand within the Australian economy. The Tax Bonus Act is thus concerned with Australian matters and things. The from government's "Updated Economic and Fiscal Outlook" (February 2009): defendants following passage cited the the "With national economies more closely linked today than ever before, the effectiveness of any individual country's macroeconomic policy response depends upon what other countries are doing. As many countries are looking to fiscal policy to address the macroeconomic effects of the global recession, the benefits from improved coordination of macroeconomic policy responses are clear". The rights and obligations which the Tax Bonus Act creates are not created by reference to matters and things lying outside Australia. They are created by reference to persons liable to pay Australian income tax for the period 2007-2008 who are Australian residents in that year. In the ordinary course, the tax bonuses were to be paid to the credit of a financial institution account nominated in the recipient's income tax return for the 2007-2008 income year for the purposes of s 8AAZLH of the Taxation Administration Act. Hence that account was "maintained at a branch or office of the institution that is in Australia" pursuant to s 8AAZLH(2) of that Act. The legislation is thus directed to internal Australian affairs, not external affairs. As South Australia submitted, so far as the Tax Bonus Act operates in relation to persons external to Australia, as by requiring payments to be made to persons outside Australia, "that operation is entirely fortuitous and the Tax Bonus Act plainly does not take its character from that fortuitous operation." The effect of the Tax Bonus Act overseas. The defendants submitted that the Tax Bonus Act related to external affairs because the actions it mandated in Australia had effects on the global financial crisis outside Australia. However, while an improvement in the condition of Australian affairs might have beneficial effects overseas, the legislation is not specifically structured so as to achieve those effects. Conclusion. If the defendants' submission were correct, it would rest upon so wide a construction of s 51(xxix) as to make many of the placita in s 51 unnecessary. That is because a great many matters and things in Australia have been affected by external causes. Further, if the defendants' submission were correct, it would have implications for the federal division of powers between the Commonwealth and the States. This reveals that the contention of the defendants on the "geographic externality" aspect of s 51(xxix) involves an extension of it beyond what was contemplated in XYZ v The Commonwealth, which did not involve any consideration of that federal division of powers502. Two: matter of international concern β consideration According to the defendants, in XYZ v The Commonwealth three judges of the Court "expressed reservations" about whether a matter of international concern was an "external affair" for s 51(xxix) purposes503. The defendants submitted that those reservations did not express the concluded view of any of those judges "and should be treated accordingly." The submission did not spell out quite what treatment that was. Assuming but not accepting that the views hostile to the "matter of international concern" doctrine were not concluded views, and assuming but not accepting that the global financial crisis is a "matter of international concern" in some sense of that expression, in view of the defendants' advocacy of that doctrine in this case it becomes necessary now to reach a concluded view about the merits of the supposed doctrine. It has no merits. It has no merits for the reasons given in XYZ v The Commonwealth504. The only additional observation which is necessary relates to the defendants' reliance on statements in various well-known cases in support of their submission. Most of those cases are discussed in XYZ v The Commonwealth505. The statements on which the defendants relied were not part of the ratio decidendi of any of the decisions in which they were made. They were seriously considered dicta, but they could not be described as conforming with long- established authority506. Further, some of them do not support the defendants' 502 (2006) 227 CLR 532 at 543 [18]. 503 (2006) 227 CLR 532 at 574-575 [124] and 612 [225]. 504 (2006) 227 CLR 532 at 607-612 [216]-[225]. 505 (2006) 227 CLR 532 at 607-608 [217] n 344. 506 See Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 at 151 [134]; [2007] HCA 22. submission, but rather stand for the very different proposition that a law can be supported by s 51(xxix) if it concerns Australia's relations with other states507. Three: pursuit and advancement of comity with foreign governments β consideration The word "comity" has several meanings. The defendants did not explain which meaning they were using in submitting that the Tax Bonus Act fell within s 51(xxix) on the ground that it was enacted in "the pursuit and advancement of comity with foreign governments"508. The intended meaning appears to be the fostering of friendly relationships between the government of Australia and other governments. Yet many kinds of legislation may improve, or damage, the friendliness of relationships between the Australian Government and other governments. To adopt the suggested criterion would be to give s 51(xxix) a meaning far beyond anything yet recognised in the authorities509. Four: implementation of international commitment β consideration The need for specificity. If legislation is to be validated by recourse to a treaty (or international commitment) that treaty or commitment must set out a 507 For example, R v Sharkey (1949) 79 CLR 121 at 136; [1949] HCA 46; Koowarta v Bjelke-Petersen (1982) 153 CLR 168 at 190-191 (two other passages in that case make plain Gibbs CJ's opposition to the "matter of international concern" doctrine, at 202-203 and 207). Adapting Gibbs CJ's reasoning at 202-203 to the present case, international interest in what Australia does to counter the global financial crisis domestically does not automatically convert that domestic affair into an international or "external" affair. 508 For possible meanings of "comity", see O'Connell, International Law, 2nd ed (1970), vol 1 at 20-21; Jennings and Watts (eds), Oppenheim's International Law, 9th ed (1992), vol 1 at 50-51; Brownlie, Principles of Public International Law, 7th ed (2008) at 28-29. 509 The defendants relied on Thomas v Mowbray (2007) 233 CLR 307 at 364 [151] where Gummow and Crennan JJ said the "pursuit and advancement of comity with foreign governments β¦ may be a subject matter of a law with respect to external affairs." But they then said: "In XYZ v The Commonwealth [(2006) 227 CLR 532 at 543 [18]] Gleeson CJ noted (with evident approval) that it was accepted that the external affairs power at least includes power to make laws in respect to matters affecting Australia's relations with other countries." The sentence in which Gleeson CJ said that concluded: "and that includes matters the subject of treaties entered into by Australia." That context suggests that their Honours were discussing "comity" in a sense much stricter than the sense used by the defendants. regime defined with "sufficient specificity to direct the general course to be taken" by the relevant states510. The treaty or commitment need not have the precision necessary to establish a legally enforceable agreement at common law, but it must avoid excessive generality. The G-20 Declaration β the central passage. The high point of the defendants' argument, and the only matter to which South Australia referred, was the passage quoted above from the G-20 Declaration511. That language is no more than aspirational. It does not say which fiscal measures are to be used. What is stated leaves it very much open to individual governments to decide whether to use fiscal measures, and, if so, which ones. That is because of the words "as appropriate". It is also because of the reference to "maintaining a policy framework conducive to fiscal sustainability", which points against deficit spending. As New South Wales submitted, it is a qualified proposition on which governments can agree, but it "commits to nothing, because different views quite reasonably can be taken of what is sufficient to stimulate domestic demand to to maintain fiscal rapid effect as appropriate, and what sustainability." It is what might be expected of an organisation like the G-20, which concentrates on discussion, dialogue and influence, and which has a diverse membership512. It is highly improbable that in the ordinary course the deliberations of such a body would generate obligations in international law. In is necessary 510 Victoria v The Commonwealth (1996) 187 CLR 416 at 486 per Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ. and constructive discussion between 512 The Group of Twenty is an informal body without permanent staff but made up of the finance ministers and central bank governors of 19 nations (including Australia) and the European Union. Officers of the International Monetary Fund and the World Bank attend its meetings. According to the organisation's webpage, accessed by the defendants on 28 March 2009 and entitled "About G-20", it "promotes open and emerging-market countries on key issues related to global economic stability." It continues: "By contributing to the strengthening of the international financial architecture and providing opportunities for dialogue on national policies, international co-operation, and international financial institutions, the G-20 helps to support growth and development across the globe." It also states: "The G-20's economic weight and broad membership gives it a high degree of legitimacy and influence over the management of the global economy and financial system." A document published online by the G-20 on 15-16 March 2008, The Group of Twenty: A History, stresses its role in broadening informal dialogue, cooperation, discussion, development of standards and codes, and carrying on studies on various subjects. industrial Victoria v The Commonwealth it was said that an "external affair" did not exist where all that was stated was a "broad objective with little precise content and permitting widely divergent policies by parties"513. Yet that is all the G-20 Declaration does. The defendants submitted that it went further, because the "words of commitment" given by the G-20 nations had triggered "an overall sameness about the nature of the responses." That was not demonstrated by the material the defendants referred to514. In any event, the existence of parallel conduct does not necessarily demonstrate a commitment to pursue it. The defendants submitted that the relevant passage was "expressed in terms as specific as one gets in international agreements." With respect, that submission is entirely incorrect. The G-20 Declaration lacks "sufficient specificity to direct the general course to be taken"515. The Commonwealth v Tasmania. The defendants submitted that the requirement in Victoria v The Commonwealth that the treaty have sufficient specificity should be read in the light of the fact that Arts 4 and 5 of the World Heritage Convention were held to be sufficient in The Commonwealth v Tasmania516. If the language in one case is to be assessed in the light of the decision in another, the appropriate process in these proceedings seems to be the opposite of that argued by the defendants. That appropriate process would be to read what was said in The Commonwealth v Tasmania, a case in which the Court was sharply and closely divided on many questions, in the light of the detailed treatment of specificity by five Justices in the later decision of Victoria v The Commonwealth. In any event, the World Heritage Convention was a solemn treaty. It was made under the auspices of the General Conference of the United Nations Educational, Scientific and Cultural Organisation. It followed the usual course for treaties of going through lengthy processes of negotiation, adoption, ratification and eventually entry into force. In those respects it is in sharp 513 (1996) 187 CLR 416 at 486 per Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ, quoting Zines, The High Court and the Constitution, 3rd ed (1992) at 514 The material was the following passage from "Note by the Staff of the International Monetary Fund" entitled "Group of Twenty Meeting of the Deputies January 31-February 1, 2009 London, UK": "To date, the G-20 countries have adopted (or plan to adopt) fiscal stimulus measures amounting on average to around Β½ percent of GDP in 2008, 1Β½ percent of GDP in 2009, and about 1ΒΌ percent of GDP in 515 Cf Victoria v The Commonwealth (1996) 187 CLR 416 at 486 per Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ. 516 (1983) 158 CLR 1. The Articles are set out at 81. The defendants relied on what Mason J said at 132-133. contrast with the G-20 Declaration. The G-20 Declaration falls more into the genre of public relations than the genre of treaties. Other parts of the G-20 Declaration. Although the passage from the G-20 Declaration just discussed was the highlight, the defendants also relied on other passages. They relied on the whole of the section "Actions Taken and to Be Taken" from the G-20 Declaration. That contained an account of international economic problems and the actions already taken to deal with them. It also contained five bullet points reflecting agreements in addition to the one appearing as part of the passage quoted above517. The only one containing an agreement arguably referable to the Tax Bonus Act is an agreement to "[c]ontinue our vigorous efforts and take whatever further actions are necessary to stabilize the financial system." But an agreement that "further actions are necessary" is far too unspecific to give constitutional validity to a particular and highly specific action like enacting the Tax Bonus Act. As New South Wales correctly submitted, that "is a most unlikely, waffly or aspirational statement to engage Commonwealth legislative power." The other four bullet points do not relate to fiscal measures of the kind illustrated by the Tax Bonus Act, but to questions of monetary policy, access to finance, aid to development and provision of sufficient funds to the International Monetary Fund, the World Bank and like bodies. These passages may reveal that the financial crisis is a matter of international concern, but that, as was discussed above518, does not render it an "external affair" for s 51(xxix) purposes. Recommendations by international agencies: the law. Recommendations by international agencies cannot support the validity of the Tax Bonus Act. Any support they can give to a law enacted in reliance on s 51(xxix) exists only where they are pronounced in order to give effect to the terms of a treaty to which they relate519. The defendants relied on the following words of Evatt and McTiernan JJ in R v Burgess; Ex parte Henry520: "[T]he Parliament may well be deemed competent to legislate for the carrying out of 'recommendations' β¦ resolved upon by the International Labour Organization or of other international recommendations or requests upon other subject matters of concern to Australia as a member of the family of nations." (emphasis added) 517 See [462]. 518 See [471]-[473]. 519 Victoria v The Commonwealth (1996) 187 CLR 416 at 509. 520 (1936) 55 CLR 608 at 687; [1936] HCA 52. The defendants said that that passage, which was quoted in Victoria v The Commonwealth521, was actually applied in that case. That is not so. In that case the Court specifically declined to decide whether legislation enacted to carry out the recommendations of international agencies made otherwise than in order to give effect to the terms of a treaty to which they relate could be supported by s 51(xxix)522. The better view is that it cannot, because mere recommendations if some do not create recommendations could do so, the recommendations relied on in this case are too vague. The defendants gave various illustrations of their submission that "[i]nternational economic agencies have called for all countries with advanced economies to pursue policies of fiscal stimulation". The calls were in documents issued by the International Monetary Fund; the staff of the International Monetary Fund to assist a meeting of deputies of the G-20; and the Organisation for Economic Co-operation and Development. It is necessary now to assess the submission in relation to each of them. international obligations. In any event, even International Monetary Fund "World Economic Outlook Update". The defendants relied on two passages in a document dated 28 January 2009 issued by the International Monetary Fund and entitled "World Economic Outlook Update". The first was: "Monetary and fiscal policies need to become even more supportive of aggregate demand and sustain this stance over the foreseeable future, while developing strategies to ensure long-term fiscal sustainability." The other was: "In current circumstances, the timely implementation of fiscal stimulus across a broad range of advanced and emerging economies must provide a key support to world growth. Given that the current projections are predicated on strong and coordinated policy actions, any delays will likely worsen growth prospects. Countries that have policy room should make a firm commitment to do more if the situation deteriorates further. Fiscal stimulus packages should rely primarily on temporary measures and be formulated within medium-term fiscal frameworks that ensure that the envisaged buildup in fiscal deficits can be reversed as economies recover and that fiscal sustainability can be attained in the face of demographic pressure. Countries that have more limited fiscal space should focus their efforts on supporting the financial sector and credit flows, while ensuring that budgets adjust to less favorable external conditions." (footnote omitted) 521 (1996) 187 CLR 416 at 483. 522 Victoria v The Commonwealth (1996) 187 CLR 416 at 509. These passages say nothing specific about tax bonuses, and they impose no obligation to grant them. Further, the International Monetary Fund is established by the Articles of Agreement of the International Monetary Fund, a treaty to which Australia is a party. Article VIII ("General Obligations of Members") does not create an obligation on any party to comply with a recommendation either of the International Monetary Fund itself or of its officials. Nor does any other Article. International Monetary Fund Staff "Note". The defendants also relied on various passages in a "Note by the Staff of the International Monetary Fund" on a meeting of G-20 deputies held in London on 31 January and 1 February 2009. Under the heading "Executive Summary" it was stated: "More aggressive and concerted policy actions are urgently needed to resolve the crisis and establish a durable turnaround in global activity. To be effective, policies need to be comprehensive and internationally coordinated to limit unintended cross-border effects. Action is needed on two fronts β to restore financial sectors to health and to bolster demand to sustain a durable recovery in global activity." (emphasis in original) A later part of the "Executive Summary" (reflecting a passage in the body of the document) said: "[W]ith constraints on the effectiveness of monetary policy, fiscal policy must play a central role in supporting demand, while remaining consistent with medium-term sustainability. A key feature of a fiscal stimulus program is that it should support demand for a prolonged period of time and be applied broadly across countries with policy space to minimize cross-border leakages." Later still, in a section headed "Fiscal Policy" to which the defendants drew particular attention, the document stated that G-20 countries had adopted (or planned to adopt) fiscal stimulus measures amounting on average to 0.5 percent of GDP in 2008, 1.5 percent in 2009 and about 1.25 percent in 2010. It then listed a variety of short-term, medium-term and long-term fiscal measures which had been adopted or planned. The document reported that many countries had announced plans "to protect liquidity-constrained or vulnerable groups". Examples of these plans were given, including Australian plans to support children and pensioners. The document then estimated that the fiscal stimulus plan would increase GDP growth by 0.5 to 1.25 percent. These passages do not envisage anything like the Tax Bonus Act and have no relevance to it. The Act does not "protect liquidity-constrained or vulnerable groups". Instead it selects them as suitable recipients of the bonus because of the expectation that they will spend it quickly. Organisation for Economic Co-operation and Development "Statement". The defendants relied next on a document issued by the Organisation for It was a "Statement on Economic Co-operation and Development. IMF-OECD-World Bank Seminar on the Response to the Crisis and Exit Strategies". It said: "In parallel, there continues to be an urgent need for fiscal stimulus. The size and composition of fiscal packages should be consistent with each country's fiscal space and institutional capacity. The deepening of the downturn suggests the need for an increase in high-impact fiscal expenditures in the first half of 2009, with further support in the following quarters, by countries in a position to prudently undertake such spending. in a credible time, embedding stimulus packages medium-term strategy that safeguards fiscal sustainability will also increase their impact in the short term. Due attention should be given to longer-term policy perspectives, including consideration of how stimulus policies could work to serve the objectives of climate-friendly and innovation-enhancing investment." the same This creates no specific obligation on any nation. Indeed, it recommends no specific action for Australia. The Organisation for Economic Co-operation and Development was created by the Convention on the Organisation for Economic Co-operation and Development, to which Australia is a party. Article 5 provides: "In order to achieve its aims, the Organisation may: take decisions which, except as otherwise provided, shall be binding on all the Members; (b) make recommendations to Members; and enter into agreements with Members, non-member States and international organisations." The document relied on by the defendants is neither a decision nor an agreement. It is at most a recommendation. Since it is a statement not of the Organisation for Economic Co-operation "IMF-OECD-World Bank Seminar", it is doubtful whether it is even an Organisation for Economic Co-operation and Development recommendation. The defendants contended that the recommendations were not made under Art 5. If the power to make them lies elsewhere, there is even greater difficulty in triggering s 51(xxix). and Development but of alone, Organisation for Economic Co-operation and Development Editorial. Another document emanating from the Organisation for Economic Co-operation and Development on which the defendants relied is the Editorial in a periodical named OECD Economic Outlook523. The Editorial was signed by Klaus Schmidt-Hebbel, Chief Economist, and dated 25 November 2008. The relevant passage stressed the importance of fiscal stimulus in dealing with the crisis. It continued524: "Fiscal stimulus packages, however, need to be evaluated on a case-by-case basis in those countries where room for budgetary manoeuvre exists. It is vital that any discretionary action be timely and temporary and designed to ensure maximum effectiveness. Infrastructure investment is often mentioned as a desirable instrument for stimulus. While it will boost both supply and demand, provided the investments are well chosen, infrastructure investment typically takes a long time to be brought on stream and, once begun, is difficult to wind down in line with a recovery in activity. Alternatives, such as tax cuts or transfer payments aimed at credit-constrained, poorer households, might prove more effective in boosting demand." (emphasis added) The parts of this passage which have been emphasised reveal its tentative, non-mandatory character. Its provenance indicates that it cannot possibly be seen as a recommendation by an international organisation in implementation of the G-20 Declaration. Conclusion The Tax Bonus Act cannot be supported under s 51(xxix). IMPLIED LEGISLATIVE "NATIONHOOD POWER" Classifying the defendants' remaining arguments The remaining arguments advanced by the defendants may be described without any criticism as being complex and subtle. They were also mercurial in the sense that in the course of their presentation the Schwerpunkt of the advocacy shifted from argument to argument often and suddenly. They had significant overlaps. Particular considerations underpinned more than one argument. It is not easy to classify them. 523 Schmidt-Hebbel, "Editorial: Managing the Global Financial Crisis and Economic Downturn", (2008) 84 OECD Economic Outlook 7. 524 Schmidt-Hebbel, "Editorial: Managing the Global Financial Crisis and Economic Downturn", (2008) 84 OECD Economic Outlook 7 at 8. It is proposed to divide them, it is hoped without undue crudeness, into three groups. They are all extreme, but in different ways. The first asserted a "nationhood power" in the Parliament as an implied head of legislative power, or a "nationhood power" in the Executive under s 61 of the Constitution, or a "power to manage the national economy" under s 61, and relied on s 51(xxxix) as a source of power for legislation on matters incidental to the execution of those powers525. The second saw s 61 as giving the Executive power to spend money which has been lawfully appropriated, independently of any "nationhood power" or power to manage the national economy, and relied on s 51(xxxix) as a source of power to enact legislation on matters incidental to the execution of that power526. The third saw s 81 as giving a legislative "power" to authorise the Executive to spend funds appropriated and relied on s 51(xxxix) as a source of power to enact legislation on matters incidental to the execution of that legislative power527. The defendants' arguments on the "nationhood power" and the "power to manage the national economy": outline The first group of arguments proceeded on two assumptions. One was that there was a valid appropriation of sums sufficient to pay the tax bonuses528. The second was that the appropriation did not itself enliven a power to spend the sums appropriated or to enact legislation like the Tax Bonus Act to regulate their expenditure529. The arguments shared a common element: the importance of the central government possessing ample power to regulate the national economy. The defendants asserted that it was on this general power or related powers that the Tax Bonus Act rested. The arguments in this first group took three forms. The first, which did not concern s 61 of the Constitution, was that there was an implied legislative "nationhood power" existing independent of s 51(xxxix). The second and third arguments did concern s 61. The second was that the executive power of the Commonwealth under s 61 included a "nationhood power" to which support could be given by legislation resting for its validity on s 51(xxxix). The third was that there was an executive power (independently of any nationhood power) 525 See [489]-[552]. 526 See [553]-[570]. 527 See [571]-[612]. 528 See above at [398]. 529 The defendants departed from this assumption in relation to their broader s 61/s 51(xxxix) and s 81/s 51(xxxix) arguments: see [553]-[570] and [571]-[612]. to manage the national economy, in both good times and bad, or, more narrowly, in emergencies, to which support could be given by legislation resting for its validity on s 51(xxxix). The second and third forms of the argument are discussed later530. The first is discussed immediately531. Implied legislative "nationhood power" Although the defendants focused almost entirely on the arguments addressed to s 61, and spent little time on the first argument orally, they did not resile from it. The defendants' arguments: some authorities The defendants pointed to certain statements by former Justices. The defendants drew succour from the submission that the statements favoured their contention even though the Justices in question thought that the power in s 81 to make appropriations was not unlimited. That is, the defendants sought to strengthen their position by presenting themselves as relying on what were suggested to be "pro-centralist statements" made by "anti-centralist judges". Gibbs J. Thus in Victoria v The Commonwealth and Hayden Gibbs J thought that the expression "purposes of the Commonwealth" in s 81 extended not only to purposes for which the Commonwealth had powers to make laws under ss 51 and 52, but also to "matters incidental to the existence of the Commonwealth as a state and to the exercise of its powers as a national government."532 Starke J. In Attorney-General (Vict) v The Commonwealth Starke J, while opposing the idea that the Commonwealth could appropriate monies for any purpose whatever, thought that the "purposes of the Commonwealth" in s 81 included "matter[s] arising from the existence of the Commonwealth and its status as a Federal Government."533 530 At [511]-[546] and [547]-[552]. 532 (1975) 134 CLR 338 at 375. 533 (1945) 71 CLR 237 at 266; [1945] HCA 30. Dixon J. And in the same case, Dixon J, while declining to accept the idea that s 81 empowered Parliament to spend money for any purpose at all that was for the benefit of the people of the Commonwealth, said534: "Even upon the footing that the power of expenditure is limited to matters to which the Federal legislative power may be addressed, it necessarily includes whatever is incidental to the existence of the Commonwealth as a state and to the exercise of the functions of a national government. These are things which, whether in reference to the external or internal concerns of government, should be interpreted widely and applied according to no narrow conception of the functions of the central government of a country in the world of to-day. There is no reason why such matters should be taken to fall outside the province of Federal appropriation though ascertained and defined by reference to the legislative power of the Commonwealth." The Australian Communist Party case. These statements of Gibbs J, Starke J and Dixon J were directed to s 81, not to the precise issue raised by the present submission: whether legislation enacted to regulate the expenditure of money which has been validly appropriated is within the legislative power of the Commonwealth. Nor was their language precise. Dixon J was more specific, however, in a passage in Australian Communist Party v The Commonwealth535 on which the defendants relied: "I do not think that the full power of the Commonwealth Parliament to legislate against subversive or seditious courses of conduct and utterances should be placed upon s 51(xxxix) in its application to the executive power dealt with by s 61 of the Constitution or in its application to other powers. I do not doubt that particular laws suppressing sedition and subversive endeavours or preparations might be supported under powers obtained by combining the appropriate part of the text of s 51(xxxix) with the text of some other power. But textual combinations of this kind appear to me to have an artificial aspect in producing a power to legislate 534 (1945) 71 CLR 237 at 269. In New South Wales v The Commonwealth (1975) 135 CLR 337 at 389; [1975] HCA 58, Gibbs J referred to those words with approval. 535 (1951) 83 CLR 1 at 187-188. In Ex parte Walsh and Johnson; In re Yates (1925) 37 CLR 36 at 94; [1925] HCA 53, Isaacs J said that there was power to enact legislation permitting "deportation as a means of self-protection in relation to constitutional functions [, for example, deportation of] some individual found plotting with foreign powers against the safety of the country, or even suspected of being a spy or a traitor." with respect to designs to obstruct the course of government or to subvert the Constitution. History and not only ancient history, shows that in countries where democratic institutions have been unconstitutionally superseded, it has been done not seldom by those holding the executive power. Forms of government may need protection from dangers likely to arise from within the institutions to be protected. In point of constitutional theory the power to legislate for the protection of an existing form of government ought not to be based on a conception, if otherwise adequate, adequate only to assist those holding power to resist or suppress obstruction or opposition or attempts to displace them or the form of government they defend. As appears from Burns v Ransley536 and R v Sharkey537, I take the view that the power to legislate against subversive conduct has a source in principle that is deeper or wider than a series of combinations of the words of s 51(xxxix) with those of other constitutional powers. I prefer the view adopted in the United States β¦ 'β¦ it is within the necessary power of the federal government to protect its own existence and the unhindered play of its legitimate activities. And to this end, it may provide for the punishment of treason the suppression of insurrection or rebellion and for the putting down of all individual or concerted attempts to obstruct or interfere with the discharge of the proper business of government β¦' [T]he considerations giving rise to the implied power exist in the Commonwealth Constitution." The laws protecting the Commonwealth from subversion and sedition which were held valid in Burns v Ransley and R v Sharkey can be seen as an aspect of "the execution and maintenance of [the] Constitution" within the meaning of those words in s 61. Hence, although Dixon J saw this as having an artificial aspect, it is possible to support these cases as being within the executive power conferred by s 61, and s 51(xxxix) authorises the enactment of laws on that subject538. Legislation dealing with sedition and subversion is also within the defence power in s 51(vi), for that is not limited to external threats against the Commonwealth and the States from foreign nation states539. However, none of this supports the defendants' argument in relation to legislation regulating the economy. As Wilson and Dawson JJ said in Davis v The Commonwealth, 536 (1949) 79 CLR 101 at 116; [1949] HCA 45. 537 (1949) 79 CLR 121 at 148 and 149. 538 Davis v The Commonwealth (1988) 166 CLR 79 at 101-102 and 117-118; [1988] HCA 63. 539 Thomas v Mowbray (2007) 233 CLR 307 at 324 [6], 361-364 [139]-[148] and 511 "subversion, sedition and the like are matters of a very special kind, striking, as they do, at the very foundation of the Constitution"540. They are far removed from the field in which the Tax Bonus Act operates. The Commonwealth v Tasmania Background. Most of the discussions in the cases about the implied nationhood power, whether as a legislative or an executive power, are dicta. But there is one decision relevant to the defendants' argument that there is a legislative power. The defendants did not deal with this aspect of it. It may be distinguishable but it is a binding authority. It is The Commonwealth v Tasmania. The Commonwealth advanced an argument referred to under the title "Inherent Power of Nationhood"541. The detail of the argument is not stated in the report, and Dawson J said it "was but faintly put"542. The Court did not call on Tasmania for a reply to the Commonwealth's argument543. The legislation allegedly supported by the "implied power derived from nationhood" was the World Heritage Properties Conservation Act 1983 (Cth), ss 6(2)(e) and 9. Those provisions rendered it unlawful for numerous activities to be carried on on property which was part of the heritage distinctive of the Australian nation and in relation to which, in the language of s 6(2)(e)(ii)544: "by reason of the lack or inadequacy of any other available means for its protection or conservation, it is peculiarly appropriate that measures for the protection or conservation of the property be taken by the Parliament and Government of the Commonwealth as the national parliament and government of Australia." A majority (Gibbs CJ, Wilson, Deane and Dawson JJ) struck those provisions down on the ground that they were not validated by the "implied power derived from nationhood". It was not necessary for Mason, Murphy and Brennan JJ to deal with the question. 540 (1988) 166 CLR 79 at 102. 541 (1983) 158 CLR 1 at 44. 542 (1983) 158 CLR 1 at 322. 543 (1983) 158 CLR 1 at 53. 544 This sub-paragraph is set out at (1983) 158 CLR 1 at 72. "The implied power derived from nationhood has no possible application to the present case. The question whether and to what extent restrictions should be put on the use of lands within a State is not a matter which is peculiarly appropriate to a national government. On the contrary, it is a matter which traditionally has been considered to be within the province of the government of the State within which the lands are situated. The protection of the Parks is not so complex a matter, and does not involve action on so large a scale, that it requires national co-ordination to achieve, assuming that to be a test." "The Commonwealth argues that, independently of any express legislative power conferred by the Constitution, the existence of the circumstances described in s 6(2)(e) of the Act brings into being an inherent power to legislate. The circumstances are the following: a heritage distinctive of the Australian nation, an absence or inadequacy of any other available means for its protection, and a conclusion that it is peculiarly appropriate that the Parliament and government of the Commonwealth should protect it. I am unable to accept the argument. I know of no occasion when a coercive law declaring certain conduct to be unlawful and imposing penalties has been enacted by the Parliament otherwise than pursuant to a given head of power. Such an approach to federal legislative power would in my opinion be wholly subversive of the Constitution and cannot be permitted." "There are many statements in judgments in this Court which support the proposition that, in the context of s 51(xxxix) and s 61 of the Constitution, each of the Commonwealth Parliament and executive is vested with certain powers which are inherent in its existence or in the fact of Australian nationhood and international personality". 545 (1983) 158 CLR 1 at 109. 546 (1983) 158 CLR 1 at 203-204. 547 (1983) 158 CLR 1 at 252. He then said548: "It suffices, for present purposes, to say that I consider that the inherent powers of the Commonwealth could not, on any proper approach, be seen as including the power to enact a law imposing drastic restrictions of the type contained in s 9 of the Act in respect of 'identified property' β¦ in relation to which the requirements of sub-ss (2)(e) and (3) of s 6 of the Act are satisfied. Those restrictions would involve the potential freezing of the 'identified property' to which they were applied and would, to no small extent, override and displace the ordinary legislative and executive powers of the State, in which such property was situate, to authorize or regulate conduct thereon. The fact that particular physical property or artistic, intellectual, scientific or sporting achievement or endeavour is 'part of the heritage distinctive of the Australian nation' may well be decisive of the question whether the protection, preservation or promotion of such property, achievement or endeavour may be made the object of an appropriation of money by the Commonwealth Parliament or of Commonwealth action to assist or complement actions of a State. In the absence of any relevant grant of power to the Commonwealth however, that fact cannot constitute the basis of some unexpressed power in the Commonwealth to arrogate to itself control of such property, achievement or endeavour or to oust or override the legislative and executive powers of the State in which such property is situated or such achievement or endeavour has been effected or is being pursued." "Although it can be said that the protection or conservation of the Australian cultural and natural heritage is in the national interest (and the submission can be put no higher), that does not carry with it the implication that the Commonwealth has power to legislate with respect to the matter. There are many matters which may be said to affect the national interest β matters such as education, health, the prevention and punishment of crime β which are not the subject of Commonwealth legislative power and are consequently within the residual powers of the States. Whatever inherent legislative powers the Commonwealth may have, if any, they do not, in my view, extend to the matters dealt with by the World Heritage Properties Conservation Act." Dissimilarities and points of value. That case concerned legislative restraints on the use of land in a State in order to vindicate the national interest in 548 (1983) 158 CLR 1 at 253. 549 (1983) 158 CLR 1 at 323. protecting the Australian heritage. This case concerns legislative measures about fiscal policy. It is true that there is no close analogy between these things. It is also true that restrictions on the use of land in a State collide much more directly with State authority than the Tax Bonus Act does. However, if an implied "nationhood power" existed, there are some measures of fiscal policy supportable by resort to it which are much more likely to collide with State authority than the Tax Bonus Act. And one aspect of the ratio decidendi on this point in The Commonwealth v Tasmania is that a matter of national interest does not ipso facto fall within any implied "nationhood power". Hence the mere fact that controlling economic crises is a matter of national interest does not lead to the conclusion that the Commonwealth has any power to control them apart from the powers expressly granted to it. The defendants made no application for leave to argue the correctness of The Commonwealth v Tasmania on this point (if leave be necessary) with a view to having it overruled. Nor did they criticise it. In Davis v The Commonwealth, Wilson and Dawson JJ550 and Toohey J551 each rejected an implied legislative "nationhood power". Mason CJ, Deane and Gaudron JJ left the point open552. Brennan J did not discuss it. Supposed examples of the implied legislative "nationhood power" Apart from cases dealing with legislation directed at subversion and sedition, the type of legislation relating to the governmental symbols and celebrations discussed in Davis v The Commonwealth553, and the World Heritage Properties Conservation Act, ss 6(2)(e) and 9554, the issues relating to a "nationhood power" have generally been discussed only in dicta. But there has been little precision in what has been said. It has been said that there is a power 550 (1988) 166 CLR 79 at 103-104. 551 (1988) 166 CLR 79 at 117-119. 552 (1988) 166 CLR 79 at 95. 553 (1988) 166 CLR 79. 554 The Commonwealth v Tasmania (1983) 158 CLR 1: see [499]-[504] above. to legislate in relation to exploration555; science and technology556; research557; inquiries, investigation and advocacy in relation to matters affecting public health558; inquiries, planning and coordination on a national scale559 and national initiatives in science, literature and the arts560. But how this power can be recognised has not been explained. Which nation? If any "nationhood power" (or, for that matter, any power to manage the national economy) exists, it must rest on either the "nation", in the sense of a new form of political organisation for the people living in the Australian colonies, which was created in 1901, or the nation more independent of the United Kingdom that developed after 1901. If these powers rest on the fact that a type of nation was created in 1901, they must be read as powers which are subordinate to and the Commonwealth, the States and the Territories that is effected by the express language of the Constitution in ss 51, 52, 90, 107, 114, 117 and 122. For constitutional implications cannot be made in the face of express constitutional language. As Barwick CJ said in Victoria v The Commonwealth and Hayden561: the distribution of powers between incapable of affecting "to describe a problem as national β¦ does not attract power. Though some power of a special and limited kind may be attracted to the Commonwealth by the Commonwealth as a polity, no power to deal with matters because they may conveniently and best be dealt with on a national basis is similarly derived. However desirable the exercise by the Commonwealth of power the very setting up and existence of 555 Victoria v The Commonwealth and Hayden (1975) 134 CLR 338 at 362 per Barwick CJ and 413 per Jacobs J. 556 Victoria v The Commonwealth and Hayden (1975) 134 CLR 338 at 362 per Barwick CJ and 397 per Mason J. 557 Victoria v The Commonwealth and Hayden (1975) 134 CLR 338 at 413 per 558 Victoria v The Commonwealth and Hayden (1975) 134 CLR 338 at 397 per 559 Victoria v The Commonwealth and Hayden (1975) 134 CLR 338 at 412 per 560 Davis v The Commonwealth (1988) 166 CLR 79 at 111 per Brennan J. 561 (1975) 134 CLR 338 at 364. in affairs truly national in nature, the federal distribution of power for which the Constitution provides must be maintained." If, on the other hand, these powers are said to rest on the development of a more independent nation after 1901, that development, too, did not have the effect of destroying that distribution of powers. In the same case Gibbs J correctly said562: "The legislative power that is said to be incidental to the exercise by the Commonwealth of the functions of a national government does not enable the Parliament to legislate with respect to anything that it regards as of national interest and concern; the growth of the Commonwealth to nationhood did not have the effect of destroying the distribution of powers carefully effected by the Constitution." Dawson J agreed in The Commonwealth v Tasmania563. The points made by Barwick CJ and Gibbs J correspond with those made by Mason J in a passage quoted below from Victoria v The Commonwealth and Hayden564. They also correspond with those made in Davis v The Commonwealth by Wilson and Dawson JJ and Toohey J565. The problem of vagueness A "nationhood power" of the width claimed by the defendants shares the vagueness of other constitutional "doctrines" which briefly flourished but were then rejected. One was the doctrine of the inalienable or essential functions of governments566. Others were doctrines resting on implications of representative government and representative democracy beyond those implications to be drawn from the text of the Constitution567. The vagueness of a "nationhood power" is demonstrated by the ease of a slide from asking whether activities are incidental to the existence of the Commonwealth, to asking whether they are geographically 562 Victoria v The Commonwealth and Hayden (1975) 134 CLR 338 at 378. He quoted that statement in The Commonwealth v Tasmania (1983) 158 CLR 1 at 109. 563 (1983) 158 CLR 1 at 323. 564 (1975) 134 CLR 338 at 398: see [519] below. 565 (1988) 166 CLR 79 at 103-104 and 117-119 respectively. 566 Rejected in Ex parte Professional Engineers' Association (1959) 107 CLR 208 at 274-276; [1959] HCA 47. 567 Rejected in Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at nationwide, to asking whether they are activities which the central government has characterised as national, to asking whether they are activities which the central government has identified as being politic for it to engage in or regulate. In the course of this slide the central government is being permitted to characterise or define its way into legislative power of its own initiative. Implication not necessary If ultimately the defendants' arguments depend on constitutional implication, and if questions of necessity are relevant, it is not necessary to imply into the Constitution a term as broad as the defendants advocate. It is not necessary to do so in relation to sedition, by reason of s 51(vi) and s 61568. And it is less necessary, and, if it matters, very much less desirable, to imply a "nationhood power" of the kind advocated by the defendants in order to deal with economic problems. There are extensive express powers to do this β for example, s 51(i), (ii), (iii), (iv), (ix), (xii), (xiii), (xiv), (xvi), (xvii), (xix) (xx), (xxvii), (xxix), (xxxi) and (xxxvii), s 90, s 96 and s 115. The very specificity of these provisions negates the defendants' proposition that there is some wider power. The total of some parts is less than the total of all possible parts. Barwick CJ was, with respect, right to say in Victoria v The Commonwealth and Hayden569: "[I]t could not be denied that the economy of the nation is of national concern. But no specific power over the economy is given to the Commonwealth. Such control as it exercises on that behalf must be effected by indirection through taxation, including customs and excise, banking, including the activities of the Reserve Bank and the budget, whether it be in surplus or in deficit. The national nature of the subject matter, the national economy, cannot bring it as a subject matter within Commonwealth power." Conclusion on implied legislative "nationhood power" In summary, the wide power on which the defendants rely cannot be treated as an independent legislative power to be implied into the Constitution. 568 See above at [498]. 569 (1975) 134 CLR 338 at 362. SECTION 61 EXECUTIVE POWER "NATIONHOOD POWER" INCLUDES OR SUPPORTS A Mason J's test: "and which cannot otherwise be carried on for the benefit of the nation" Although in oral argument the defendants exhibited some discomfort about it and made modifications to it, the defendants' initial written submissions contained a contention that the object of the Tax Bonus Act was one which the Commonwealth Government is "peculiarly" adapted to carry out. The object of the Act was a matter of national interest and concern570. But, more than that, it was said that the difficulties facing the Australian economy required a national response; and "the Commonwealth Government [was] the only Government with the resources, both financial and administrative, to provide it." These submissions rested on the contention that within, or perhaps alongside, s 61 there was a "nationhood power". The defendants based the s 61 "nationhood power" on what Mason J said in Victoria v The Commonwealth and Hayden. After referring to Burns v Ransley and R v Sharkey, Mason J said that "the Commonwealth enjoys, apart from its specific and enumerated powers, certain implied powers which stem from its existence and its character as a polity"571. For that he cited what Dixon J said in Australian Communist Party v The Commonwealth572. He continued573: "So far it has not been suggested that the implied powers extend beyond the area of internal security and protection of the State against disaffection and subversion. But in my opinion there is to be deduced from the 570 The defendants' written submissions cited R v Hughes (2000) 202 CLR 535 at 555 [39]; [2000] HCA 22, which at note 72 referred to Wilson and Dawson JJ in Davis v The Commonwealth (1988) 166 CLR 79 at 102-103. See below at [546]. 571 (1975) 134 CLR 338 at 397. He repeated these points in R v Duncan; Ex parte Australian Iron and Steel Pty Ltd (1983) 158 CLR 535 at 560; [1983] HCA 29. 572 (1951) 83 CLR 1 at 187-188. 573 (1975) 134 CLR 338 at 397. He then went on to give examples (the legislation creating the Commonwealth Scientific and Industrial Research Organisation, and inquiries, investigations and advocacy relating to public health). As South Australia submitted, these do not actually satisfy the requirements of the passage: it cannot be said that only the Commonwealth Government has the capacity to carry on the relevant activities. However, the legislation, the Science and Research Act 1951 (Cth), can probably be supported under various of the placita in s 51 of the Constitution, and the activities indicated, even if not backed by legislation, do not go beyond the fields marked out by s 51. existence and character of the Commonwealth as a national government and from the presence of ss 51(xxxix) and 61 a capacity to engage in enterprises and activities peculiarly adapted to the government of a nation and which cannot otherwise be carried on for the benefit of the nation." Below, that last sentence will be referred to as "Mason J's test". The concluding 13 words are particularly important. Brennan J agreed with Mason J's test in Davis v The Commonwealth574, and he referred to the last 13 words in saying that the criterion: "invites consideration of the sufficiency of the powers of the States to engage effectively in the enterprise or activity in question and of the need for national action (whether unilateral or in co-operation with the States) to secure the contemplated benefit." And in The Commonwealth v Tasmania, Gibbs CJ575 and Wilson J576 assumed those 13 words to be part of the test. Non-satisfaction of Mason J's test The defendants relied on Mason J's test β but for the concluding 13 words, "and which cannot otherwise be carried on for the benefit of the nation." That was a significant act of jettison, but it was essential if the defendants' argument was not to be wrecked. Stimulating the economy by means other than the tax bonuses. That is because a speedy stimulus equal in size to the tax bonuses could have been effectuated for the benefit of the nation in some other way. The Commonwealth acting alone could have given an equivalent stimulus in a different form under s 51(ii) (by granting tax rebates a little higher than the bonuses and paying them out in exactly the way the tax bonuses were paid out)577. The Commonwealth acting in cooperation with the States could have done it under s 96, by granting the money to the States on condition that the bonuses be paid pursuant to the formula which is set out in the Tax Bonus Act. The modification which the defendants wish to make to Mason J's test rests on a perception which contradicts, and indicates the incorrectness of, the defendants' submission that the Commonwealth Government "is the only Government with the resources, both 574 (1988) 166 CLR 79 at 111. 575 (1983) 158 CLR 1 at 108. 576 (1983) 158 CLR 1 at 203. 577 Putting aside the individuals referred to in n 483 above. financial and administrative, to provide it." This in turn undermines the defendants' contention that the Tax Bonus Act is supported by the need for national action in consequence of the insufficiency of the powers of the States to engage in the relevant enterprise. So framed, the question is one of insufficiency of powers. Legally, there is no bar to the States injecting monies equivalent to the total of the tax bonuses into the economy: their powers are "sufficient" to do this; they are not in the very constrained position that they are in, compared to the Commonwealth, in international affairs578. Practically, it may be true that the States in the year 2009 would have difficulty in raising sufficient monies for the purposes of a large fiscal injection, at least without considerable disruption to the rest of their activities: but the Special Case did not aver or deny this. It was for the defendants to demonstrate, if it were integral to their argument, that the States lack practical power to raise the monies by persuading the Commonwealth to engage in an act of cooperative federalism and supply them through s 96, or that they would have refused to cooperate with a Commonwealth plan to employ s 96. This the defendants did not do. The defendants said that there was no material before the Court indicating that consideration was given to the employment of s 96, but said that to employ s 96 "sounds a bit silly" and was "a practical absurdity". New South Wales, on the other hand, said that to exclude the possibility of employing s 96 would be "absurd". The latter view is correct. Cooperative federalism as a response to the global financial crisis. The Tax Bonus Act forms part of a stimulus package entitled "the Nation Building and Jobs Plan". But it is not the only stimulus package introduced by the government to deal with the global financial crisis. It is the third, following the Economic Security Strategy announced on 14 October 2008 and the Nation Building Package announced on 12 December 2008. The Economic Security Strategy involved an increase in grants to first home owners building their own homes from $7,000 to $21,000. This was a fiscal stimulus worth $1.5 billion. It was administered, pursuant to an agreement between the Commonwealth and the States, by the States under State legislation. In the case of New South Wales, that legislation was enacted less than two months after 14 October 2008, namely on 10 December 2008579. 578 See XYZ v The Commonwealth (2006) 227 CLR 532 at 596-598 [184]-[188]. 579 The agreement is annexed to the A New Tax System (Commonwealth-State Financial Arrangements) Act 1999 (Cth). The New South Wales legislation is the First Home Owner Grant Act 2000 (NSW), amended in 2008 to include ss 18-18B: the legislation has equivalents in all other States. Further, the Nation Building and Jobs Plan involved various "public sector capital works and infrastructure projects", several of which "will be delivered in partnership with the States." The Treasurer's "Updated Economic and Fiscal Outlook", which described the Plan, said: "Several of these measures will be delivered in partnership with the States. It is vital that the additional funding being provided to the States flows into the economy quickly and is not used by the States to reduce their own spending effort in the relevant sectors. The Government will ensure that the States maintain their own expenditure through each State reporting to the Ministerial Council on Federal Financial Relations against benchmarks for their expenditure in each of the sectors. Where the Ministerial Council finds that a State fails to meet its expenditure benchmark, it will report that finding to COAG and consideration will be given to reallocating the funding to ensure that it flows into the economy as intended." The statement also described a component of the stimulus package totalling $14.7 billion and entitled "Building the Education Revolution". The statement said: "The Building the Education Revolution program will be structured as an agreement with the States and Territories and the non-government sector to provide extra funding for capital infrastructure for schools, over and above all existing and planned investments." The statement referred to other components of the Plan which involved agreements with the States and Territories, or the States, such as the acceleration of payments under the Trade Training Centres in Schools Program and under the Commonwealth Social Housing Initiative, and in repairing regional roads. It is true that these aspects of the stimulus do not operate immediately, whereas the payment of tax bonuses was to be made within two or three months of the statement, but, as already indicated, equivalent sums could have been paid by relying on s 51(ii)580 or by conditional grants under s 96. As noted above, the States began implementing the grants made in relation to first home owners in less than two months. Conclusion. Hence the concluding 13 words of Mason J's test are not satisfied. That is no doubt why the defendants chose to abandon them. 580 Putting aside the individuals referred to in n 483 above. Mason J's test: "peculiarly adapted to the government of a nation" Apart from the concluding 13 words in Mason J's test which the defendants disavow, it is also necessary to consider some words in his test which they did not disavow: "enterprises and activities peculiarly adapted to the government of a nation" (emphasis added). The question: "What enterprises and activities are peculiarly adapted to the government of a nation?" cannot be answered without inquiring: "Which type of nation? Which specific nation? What form of government?" The nation in question being Australia, it is necessary to bear in mind, as South Australia submitted, that the Commonwealth Government, while in one sense a "national government", is only the central government in a federal nation. Certainly it is legally powerful. But it is not legally all-powerful. Throughout their submissions, the defendants complained that if their arguments were not accepted, the Commonwealth would be shrunken or crippled in its powers, and insufficiently equipped to deal with the problems of modern life. But an essential aspect of federalism is its concentration on the division and dilution of power. And not all federations confer the same powers on their central governments. Moreover it is inherent in the idea of a federation that the central government has less power than the central government of a non-federation. It would be fallacious, and antithetical to the Constitution which created the federation, with its central and State governments, to ascribe to the central government automatically all powers which, in a non-federal nation, might be thought to be inherent in the fact of nationhood or in the idea of national government. That is not a fallacy into which Mason J's reasoning fell. Soon after stating his test, he said581: "[T]he executive power to engage in activities appropriate to a national government, arising as it does from an implication drawn from the Constitution and having no counterpart, apart from the incidental power, in the expressed heads of legislative power, is limited in scope. It would be inconsistent with the broad division of responsibilities between the Commonwealth and the States achieved by the distribution of legislative powers to concede to this aspect of the executive power a wide operation effecting a radical transformation in what has hitherto been thought to be the Commonwealth's area of responsibility under the Constitution, thereby enabling the Commonwealth to carry out within Australia programmes standing outside the acknowledged heads of legislative power merely because formulated and administered by the national government." these programmes can be conveniently 581 Victoria v The Commonwealth and Hayden (1975) 134 CLR 338 at 398. In The Commonwealth v Tasmania (1983) 158 CLR 1 at 109 Gibbs CJ said: "I completely agree with that statement." Accordingly, even if Mason J's test is sound, to use Professor Winterton's phrase, "the contours of executive power generally follow those of legislative power."582 The Australian federation rests on constitutional distinctions which are not to be discarded, "however out of touch with practical conceptions or with modern conditions they may appear to be in some or all of their applications."583 Davis v The Commonwealth584 recognised that there is a limited "nationhood power" incidental to the creation of a new "nation" in 1901. It was a "nation" not wholly independent of the legislative power of the United Kingdom, of the power in relation to foreign policy of the United Kingdom Government, of Privy Council judicial decisions, and perhaps of United Kingdom executive decisions so far as the role of Governor-General was concerned. But it was nonetheless a nation capable of developing full independence, as it did, by reason of future events. Some of these events were external to Australia or depended on the cooperation of others (the Balfour Declaration 1926, the Statute of Westminster 1931 (Imp), the Australia Acts 1986). Some rested wholly in Australian hands (the partial abolition of appeals to the Privy Council in 1968585 and 1975586). None of these changes of themselves increased federal power at the expense of the States. Nor did the "nationhood power" to the extent that it was recognised in Davis v The Commonwealth. It was a power of a very limited character, relating to symbolic aspects of nationhood, like the regulation of flags, emblems, national days and celebrations. The correctness of Davis v The Commonwealth was not challenged by the plaintiff or the interveners in this case. The limited "nationhood power" there recognised is very remote from the extensive power, claimed by the defendants although not referred to in the Constitution, to provide a national response to problems of national interest and concern. 582 Winterton, Parliament, the Executive and the Governor-General, (1983) at 30. 583 Airlines of NSW Pty Ltd v New South Wales [No 2] (1965) 113 CLR 54 at 115 per 584 (1988) 166 CLR 79. 585 Privy Council (Limitation of Appeals) Act 1968 (Cth). 586 Privy Council (Appeals from the High Court) Act 1975 (Cth). Competition with the powers of the States The defendants also submitted: "[T]he fact that the fiscal stimulus provided by the Tax Bonus Act involves no competition with the powers of the States is consistent with a valid exercise of the nationhood power." They cited the following observation by Deane J in The Commonwealth v Tasmania587: "Even in fields which are under active State legislative and executive control, Commonwealth legislative or executive action may involve no competition with State authority: an example is the mere appropriation and payment of money to assist what are truly national endeavours." Now the present problem does not concern the "mere appropriation and payment of money to assist what are truly national endeavours." The present problem concerns something more: legislation to regulate the payment of money which has been appropriated. That legislation created, in s 5, a right to receive the payment. It also created, in s 7, an obligation to make it. Leaving aside s 94 of the Constitution, it may often be true that the appropriation and payment of money involves no competition with State authority. South Australia propounded examples of State laws which s 109 could render inoperative by reason of the Tax Bonus Act. One was a State law forbidding a person from receiving the tax bonus, which would be inconsistent with ss 5 and 7 of the Tax Bonus Act. Another was a State law providing that no interest was payable on monies which an overpaid recipient of the tax bonus was obliged to repay, which would be inconsistent with s 9. These examples are admittedly lacking in reality. But it is easy to imagine examples which are more likely in other fields in which an implied nationhood power might operate. Hence it does not follow that legislation regulating the payment of money involves no competition with State authority. If from the extensive but partial powers conferred on the central government it were to be inferred somehow that the central powers were not partial but complete, on the ground that regulating a "national economy" must be something peculiarly adapted to the government of a nation, then State legislation regulating economic activity within a State would often be vulnerable 587 (1983) 158 CLR 1 at 252-253. A similar point was made by Mason CJ, Deane and Gaudron JJ in Davis v The Commonwealth (1988) 166 CLR 79 at 93-94: "[T]he existence of Commonwealth executive power in areas beyond the express grants of legislative power will ordinarily be clearest where Commonwealth executive or legislative action involves no real competition with State executive or legislative competence." under s 109. That is difficult to reconcile with the division of powers which the Constitution effects. The Commonwealth v Colonial Combing, Spinning and Weaving Co Ltd The defendants submitted that their arguments as to an executive "nationhood power" were also supported by two groups of passages in Isaacs J's judgment in The Commonwealth v Colonial Combing, Spinning and Weaving Co Ltd588. The submission on the first passage. The first passage comprised two sentences. The two sentences appear in the course of a discussion, within a single paragraph extending over three and a half pages, of a distinction drawn by Sir William Anson in these words589: "There are some things which are necessary to be done, and some rules necessary to be enforced, if a State is to be solvent and orderly at home and to maintain independence and dignity abroad. There are others which are not necessary but expedient to be done, and other rules in like manner to be observed, for the well-being of the community. The first of these represent the duty of the Executive par excellence, the essential business of government. The second represent the desire of the State to regulate human conduct so as not merely to secure the existence of the community, but to promote its well-being." (emphasis in Isaacs J's judgment) Isaacs J applied that distinction to the question in the case before him β the validity of a contract between the Commonwealth Government and a company for the manufacturing of wool-tops. He said590: "In ordinary times of peace, the business of wool-top manufacture would prima facie fall within the second class formulated by Sir William Anson and be within executive power only when specially authorized by a competent law. But in war time it may be β I do not need to say more β that the emergency would so widen the application of the defence power without intruding on the special jurisdiction of the States, and would so enlarge the implied authority of the Executive in the exercise of the suprema potestas in the manner indicated in the authorities I have earlier quoted, as to bring the case within Anson's first class." (emphasis added) 588 (1922) 31 CLR 421 at 446; [1922] HCA 62. 589 (1922) 31 CLR 421 at 445-446, quoting Anson, The Law and Custom of the Constitution, 3rd ed (1907), vol 2, Pt 1 at 145-146. 590 (1922) 31 CLR 421 at 446. He then said that the contract was not necessarily outside s 61, which provides that the executive power of the Commonwealth "extends to the execution and maintenance of this Constitution, and of the laws of the Commonwealth." It is at this point that the two sentences relied on by the defendants appear: "It is another and I think a very striking instance of the impossibility of regarding the mere written words of the Constitution as affording the only test of validity. Those written words have to take into account the circumstances of the extent of constitutional development." the moment and The defendants relied on the two sentences in question as capturing "the inherently fluid and evolving nature of executive power." The immateriality of the first passage. But Isaacs J's two sentences are not material to the present problem. The "striking instance" to which he referred is an instance of how war time emergencies "may" widen "the application of the defence power" β not its terms. The word "may" indicates that this instance is tentatively put. It is also an instance that is remote from the present circumstances, which do not concern a war time emergency and do not attract the defence power. Further, Isaacs J was discussing wider powers based on war time emergencies which do not intrude "on the special jurisdiction of the States". From Isaacs J, that is a significant phrase. He was a party to the majority reasons in the Engineers' case, decided just over two years earlier591, and, it would seem, in large part their author. Isaacs J's phrase is not one to be brushed aside as an outmoded relic of pre-1920 errors. To take what Isaacs J said about wide powers to deal with war time emergencies, which do not intrude upon the "special jurisdiction" of the States, as a warrant for recognising peace time powers, which may so intrude, is not valid reasoning. The second group of passages. The second group of passages from Isaacs J's judgment on which the defendants relied included the following statement592: "It is the duty of the Judiciary to recognize the development of the Nation and to apply established principles to the new positions which the Nation in its progress from time to time assumes. The judicial organ would otherwise separate itself from the progressive life of the community, and 591 Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (1920) 28 CLR 592 (1922) 31 CLR 421 at 438-439. act as a clog upon the legislative and executive departments rather than as an interpreter." This statement was preceded by a discussion of, but was in fact not dealing with, the content of the executive powers referred to in s 61. It was part of a discussion in which Isaacs J had switched to a new subject β the doctrine of responsible government, which he saw as a common law doctrine. It was preceded by the following statement about that doctrine593: "In the development of the Federal system in the Dominions, the doctrine adapts itself to the differentiation of ministerial agents for different purposes in the same locality." Isaacs J then cited cases "which illustrate the flexibility of the common law and its capacity to adapt its principles to the changing circumstances of the life of the community no less than to that of the individuals who compose it."594 It does not follow from the flexibility and adaptability of common law doctrines that the language of s 61 of the Constitution can change its meaning. And in any case what Isaacs J advocated was the application of "established" principles to new positions β not the invention of new principles. Barton v The Commonwealth The defendants' submissions. The next authority on which the defendants relied was Barton v The Commonwealth. In that case Mason J said595: "[The executive power of the Commonwealth under s 61] enables the Crown to undertake all executive action which is appropriate to the position of the Commonwealth under the Constitution and to the spheres of responsibility vested in it by the Constitution." The defendants submitted that the expression "spheres of responsibility" is a broad concept. Its breadth was demonstrated by the "spheres of responsibility β¦ legislatively articulated" in s 10(2) of the Reserve Bank Act 1959 (Cth) ("the 593 (1922) 31 CLR 421 at 438. 594 (1922) 31 CLR 421 at 438. 595 (1974) 131 CLR 477 at 498; [1974] HCA 20. Reserve Bank Act")596 and in the Charter of Budget Honesty Act 1998 (Cth) ("the Charter of Budget Honesty Act")597. 596 It provides: "It is the duty of the Reserve Bank Board, within the limits of its powers, to ensure that the monetary and banking policy of the Bank is directed to the greatest advantage of the people of Australia and that the powers of the Bank under this Act and any other Act, other than the Payment Systems (Regulation) Act 1998, the Payment Systems and Netting Act 1998 and Part 7.3 of the Corporations Act 2001, are exercised in such a manner as, in the opinion of the Reserve Bank Board, will best contribute to: the stability of the currency of Australia; the maintenance of full employment in Australia; and the economic prosperity and welfare of the people of Australia." 597 Schedule 1, cl 1 provides: "The Charter of Budget Honesty provides a framework for the conduct of Government fiscal policy. The purpose of the Charter is to improve fiscal policy outcomes. The Charter provides for this by requiring fiscal strategy to be based on principles of sound fiscal management and by facilitating public scrutiny of fiscal policy and performance." Schedule 1, cl 2(1) provides: "The Government's fiscal strategy is to be based on the principles of sound fiscal management (see Part 3)." In Pt 3, cl 5 provides: "(1) The principles of sound fiscal management are that the Government is to: manage financial risks faced by the Commonwealth prudently, having including by to economic circumstances, maintaining Commonwealth general government debt at prudent levels; and regard ensure that its fiscal policy contributes: to achieving adequate national saving; and to moderating cyclical fluctuations in economic activity, as appropriate, taking account of the economic risks (Footnote continues on next page) The defendants submitted that if the legislature could, through the banking power in s 51(xiii) of the Constitution, confer on a statutory agency like the Reserve Bank the duty and the power to carry out the purposes listed in the Reserve Bank Act, it would be surprising if the Executive could not have the power to fulfil those purposes itself. The defendants also submitted that recourse to the Reserve Bank Act and the Charter of Budget Honesty Act was a legitimate means of establishing the meaning of s 61. How could an Act enacted in 1959 and another Act enacted in 1998 cast light on s 61, which was approved in the Australian colonies in the 1890s and enacted at Westminster in 1900? The defendants submitted that this course was legitimated by what O'Connor J said in the Jumbunna case598. They also submitted that the words of s 61 had to be read as "subject to the understanding that in 1900 [executive power] was an evolving concept and it continued to evolve through time β¦ because the Constitution was established for the government of the nation into the future, in good times and in bad." There are several difficulties with the defendants' submissions. facing the nation and the impact of those risks on the Government's fiscal position; and pursue spending and taxing policies that are consistent with a reasonable degree of stability and predictability in the level of the tax burden; and maintain the integrity of the tax system; and ensure that its policy decisions have regard to their financial effects on future generations. The financial risks referred to in paragraph (1)(a) include risks such as: risks arising from excessive net debt; and commercial risks arising from ownership of public trading enterprises and public financial enterprises; and risks arising from erosion of the tax base; and risks arising from the management of assets and liabilities." 598 (1908) 6 CLR 309 at 367-368. See above at [405] and [413]. "Spheres of responsibility". First, the defendants' submission that Mason J, in the passage quoted from Barton v The Commonwealth, meant to use the expression "spheres of responsibility" in a broad sense β let alone in as broad a sense as the defendants went on to advocate β must be rejected. As noted earlier, he made it plain in Victoria v The Commonwealth and Hayden599 that the "broad division of responsibilities between the Commonwealth and the States achieved by the distribution of legislative powers" caused the "executive power to engage in activities appropriate to a national government" not to have a "wide operation", but to be "limited". Organic changes contrasted with revolutions. Secondly, it may be accepted that some find merit in "organic" or "living tree"600 or "living force"601 approaches to the Constitution, free from the "dead hands" of the framers602, insulated from the cryogenic effects of their language603, and emancipated from enslavement to their mental world604. It may be assumed but not conceded that in particular instances those approaches, depending on what is meant by them, can have value. However, they do not work validly when applied to developments in governmental practices, whether "organic" or not, which led to legislation that was not within legislative power as originally understood. So to apply them would be to espouse a theory of continuous constitutional revolution, in which successive usurpations would be constantly seeking to legitimise themselves by claiming de the defendants' submissions suggested that it is appropriate to take into account the individual mental attitudes of the framers. That is not correct. But even if it were, there is little doubt that it would have come as a grave shock to O'Connor J, who thought that the meaning of the Constitution in 1900 would their de facto position. jure status from Some of 599 (1975) 134 CLR 338 at 398, quoted above at [519]. 600 Kirby, "Constitutional Interpretation and Original Intent: A Form of Ancestor Worship?", (2000) 24 Melbourne University Law Review 1 at 6. 601 Theophanous v Herald & Weekly Times Ltd (1994) 182 CLR 104 at 173 per Deane J; [1994] HCA 46. 602 Theophanous v Herald & Weekly Times Ltd (1994) 182 CLR 104 at 171 per 603 McGinty v Western Australia (1996) 186 CLR 140 at 200 per Toohey J; Mason, "The Role of a Constitutional Court in a Federation β A Comparison of the Australian and the United States Experience", (1986) 16 Federal Law Review 1 at 604 Eastman v The Queen (2000) 203 CLR 1 at 50 [155] per McHugh J; [2000] HCA remain its meaning thereafter605, to be told, if the Reserve Bank Act and the Charter of Budget Honesty Act had been enacted in 1903, that these statutes demonstrated the existence of a power in the Commonwealth Executive and the Commonwealth legislature to manage the economy fiscally, even though three years earlier no express language to that effect had been inserted in s 51 or in any other part of the Constitution. If, as the defendants suggested, O'Connor J's principles could be used to that end, they would be profoundly damaging to the position of the States. For the wider the Commonwealth's power to manage the economy by legislative means the less is the power of the States to enact valid legislation to control economic problems as they perceive them. That is inverting O'Connor J's principles, not applying them. Risk of abuse. Thirdly, if it were perceived that the legislation actually enacted by the Commonwealth were capable of being used as a means of establishing what the executive (or the legislative) power of the Commonwealth is, there would soon be an increase of appetite which grows with what it feeds on. Satiation of that appetite, if it were ever possible to achieve it, would only come at a point when the distribution of power which the thinking of O'Connor J and Mason J was astute to preserve had been annihilated606. That consequence points strongly against the validity of that approach to construction. Limited character of legislation relied on. Fourthly, the Charter of Budget Honesty Act can scarcely support a wide constitutional power in the Commonwealth Executive: it gives rise to no enforceable obligations (Sched 1, cl 3(2)). Nor does the Reserve Bank Act, for it did not cut down the power of the States to conduct their own fiscal policies, ie their expenditure policies. "Evolving concept". Finally, the defendants' submission that in 1900 "executive power" was an "evolving concept" appeared to rest on a silent appeal to recent authorities. Those authorities recognise a principle of construction that applies where a constitutional expression relates to doctrines "still evolving in 1900"607 or "in a condition of continuing evolution"608 or "in a state of 605 See above at [423]. 606 See above at [414] and [519]. 607 Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (2000) 200 CLR 591 at 629 [100] per Gummow J; [2000] HCA 608 Victoria v The Commonwealth (1996) 187 CLR 416 at 482 per Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ. development"609 or subject to "cross-currents and uncertainties"610 or subject to "dynamism"611. In these circumstances, where it is possible to establish the meaning which skilled lawyers and other informed observers of the federation period considered a constitutional expression bore, or would reasonably have considered that it might bear in future, it might be right to apply that meaning612. In argument no detailed attempt was made to employ that approach here. Even if it had been applied, however, it would not have overcome the difficulty identified by Mason J β that expanded meanings of "executive power" to include a "nationhood power" cannot disturb "the broad division of responsibilities between the Commonwealth and the States achieved by the distribution of legislative powers" in the Constitution613. Jacobs and Brennan JJ: "the idea of Australia as a nation" The defendants' submissions. The defendants relied on the following statement of Jacobs J in Victoria v The Commonwealth and Hayden614: "Primarily [the] exercise [of the prerogative] is limited to those areas which are expressly made the subject matters of Commonwealth legislative power. But it cannot be strictly limited to those subject matters." That statement was followed by these further remarks615: is now exercisable by the "The prerogative Governor-General acting on the advice of the Executive Council on all matters which are the concern of Australia as a nation. Within the words 'maintenance of this Constitution' appearing in s 61 lies the idea of the Queen through 609 Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82 at 97 [34] per Gaudron and Gummow JJ; [2000] HCA 57. 610 Grain Pool of Western Australia v The Commonwealth (2000) 202 CLR 479 at 501 [41] per Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ. 611 Grain Pool of Western Australia v The Commonwealth (2000) 202 CLR 479 at 496 [23] per Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ. 612 XYZ v The Commonwealth (2006) 227 CLR 532 at 583-584 [153]. 613 Victoria v The Commonwealth and Hayden (1975) 134 CLR 338 at 398. 614 (1975) 134 CLR 338 at 405. 615 (1975) 134 CLR 338 at 405-406. Australia as a nation within itself and in its relationship with the external world, a nation governed by a system of law in which the powers of government are divided between a government representative of all the people of Australia and a number of governments each representative of the people of the various States." As the defendants pointed out, in Davis v The Commonwealth616 Brennan J approved the entirety of that not wholly clear statement. Brennan J said617: "I respectfully agree with Jacobs J that the phrase 'maintenance of this Constitution' imports the idea of Australia as a nation. I would briefly state my reasons for holding that the function which that phrase assigns to the Executive Government relates not only to the institutions of government but more generally to the protection and advancement of the Australian nation." Among the reasons he gave were the following618: "With great respect to those who hold an opposing view, the Constitution did not create a mere aggregation of colonies, redistributing powers between the government of the Commonwealth and the governments of the States. The Constitution summoned the Australian nation into existence, thereby conferring a new identity on the people who agreed to unite 'in one indissoluble Federal Commonwealth', melding their history, embracing their cultures, synthesizing their aspirations and their destinies. The reality of the Australian nation is manifest, though the manifestations of its existence cannot be limited by definition. The end and purpose of the Constitution is to sustain the nation. If the executive power of the Commonwealth extends to the protection of the nation against forces which would weaken it, it extends to the advancement of the nation whereby its strength is fostered. There is no reason to restrict the executive power of the Commonwealth to matters within the heads of legislative power." There are four difficulties with the approach of Jacobs and Brennan JJ. 616 (1988) 166 CLR 79 at 109-110. 617 (1988) 166 CLR 79 at 110. 618 (1988) 166 CLR 79 at 110. See Planned Parenthood of Southeastern Pennsylvania v Casey 505 US 833 at 853 (1992) per O'Connor, Kennedy and Souter JJ. Cf Lawrence v Texas 539 US 558 at 589 (2003) per Scalia J (Rehnquist CJ and First, in one sense there was an "Australian nation" well before 1901. It was not "summoned β¦ into existence" in 1901, any more than the Polish nation was summoned into existence in 1918. What happened in 1901 was that the political organisation of the people making up the existing nation was reorganised from six colonies to a single Commonwealth divided into six States, with governmental responsibilities being divided between those seven polities and any States or Territories created in future. Even if that reorganisation of itself involved "melding the history of the people", or "embracing their cultures", or "synthesizing their aspirations and their destinies", which may be doubted, the melding, the embrace and the synthesis are not legally relevant to the present problem. Definitional difficulties. Secondly, defining what "matters β¦ are the concern of Australia as a nation", what is involved in "the idea of Australia as a nation" and what is meant by "the protection and advancement of the Australian nation" are impossibly difficult tasks. Defining what matters are of "national concern" is as difficult as defining what matters are of "international concern" in relation to s 51(xxxix), for the concept is equally nebulous. Federal structure. Thirdly, even if Brennan J is correct in saying that the Constitution did more than redistribute the powers of the former colonies between the new States and the new Commonwealth, it did do at least that. That explicit distribution cannot be undermined by the more general possibilities to Risk of aggrandisement. Fourthly, Jacobs J's reasoning invites uncontrollable aggrandisement on the part of the Commonwealth. It is a truism that Commonwealth legislation cannot "recite" itself into validity. Similarly, if matters of "national concern" are those about which the Commonwealth wishes to hold discussions with the States, to encourage the States to enact uniform legislation, to enact legislation complementary with State legislation, or to develop any other national approach of a non-legislative kind, like conducting inquiries and taking initiatives, the Commonwealth is, merely by developing those desires, giving itself a basis on which to engage in executive conduct. It is thus elevating its conduct into validity. This suggests that Jacobs J's reasoning is wrong. Other arguments. Some of the problems in the path of an implied legislative "nationhood power" also exist in relation to an executive "nationhood power". It is not necessary to repeat the exposition of these619. 619 See above at [507]-[509]. Conclusion. Professor Zines was correct to conclude620: "The concept of 'nationhood' is an extremely vague notion from which to draw principles and rules relating to governmental power where the conflicting notion of a 'federal state' is always present." Correctness of Mason J's test In The Commonwealth v Tasmania the majority assumed, but did not investigate, the correctness of Mason J's test in Victoria v The Commonwealth and Hayden621. Apart from the defendants' refusal to accept the last 13 words of Mason J's test, and apart from debates about its precise meaning, there was no criticism of it except from New South Wales. New South Wales submitted that Mason J's test did "little to avoid the uncertainty, and lack of textual foundation, of the notion of nationhood." It submitted: the nation by either "There are few if any activities which cannot be carried on for the benefit the Commonwealth and States combined, except those activities precluded by constitutional guarantees." the Commonwealth, the States, or And there have been other critics622. But even if Mason J's test were correct, the defendants have failed to establish that it has been satisfied623. In view of that fact, it is not necessary to consider whether the criticisms made of Mason J's test are valid. R v Hughes Finally, although the defendants relied on R v Hughes624, what was said in that case is entirely against the defendants' submission. That is because six Justices expressed reluctance to accept that s 51(xxxix) authorised legislation in aid of any subject regarded by the Executive Government as of national 620 Zines, The High Court and the Constitution, 5th ed (2008) at 417. 621 See above at [511]. 622 For example, Winterton, "The Limits and Use of Executive Power by Government", (2003) 31 Federal Law Review 421 at 426-427. Further, the exceptions to the power recognised by Mason J tend to destroy the power itself. 623 See above at [512]-[518]. 624 (2000) 202 CLR 535 at 555 [39] per Gleeson CJ, Gaudron, McHugh, Gummow, interest and concern. In doing so they approved what two Justices had said in SECTION 61 EXECUTIVE POWER TO MANAGE NATIONAL ECONOMY The broad argument: management of national economy in good times and bad The defendants pointed to the many express powers of the Commonwealth having a potential impact on the economy and the effect of ss 88, 90, 92 and 99 in creating a free trade area. It was submitted that "[w]hen all the powers of the Commonwealth are aggregated, the Commonwealth has constitutional responsibility for management of the national economy." It was not clear whether the argument went so far as to claim that the Commonwealth had a specific (although unexpressed) legislative power of this kind. It did seem to claim that the Commonwealth had an executive power to manage the national economy, and that legislation could be enacted under s 51(xxxix) incidentally to the execution of that power. the conclusion irresistible that The narrow argument: national fiscal emergency A narrow version of the defendants' submission was that there is a power in the Executive to deal with a national fiscal emergency only capable of being promptly and appropriately met out of the resources of the Commonwealth, both financial and administrative. They also said that legislation based on s 51(xxxix) could be enacted incidentally to the execution of that power. The broad argument considered Many of the specific arguments advanced to support the existence of a s 61 executive power to manage the national economy were employed by the defendants for other purposes and have already been rejected626. For example, the although Commonwealth to deal with economic problems, their very specificity suggests that no wider power exists627, and any wider power would alter the federal structure radically by reason of s 109 of the Constitution628. There is no point in repeating those refutations. It is sufficient to deal specifically here only with the the Constitution confers extensive express powers on 625 (1988) 166 CLR 79 at 102-103 per Wilson and Dawson JJ. 627 See at [509]. 628 See at [522]. narrow argument for a power to manage the economy in times of national fiscal emergency. It does not exist, and hence the wider power cannot exist either. The narrow argument considered Non-establishment of factual pre-condition. First, the alleged power to deal with a national fiscal emergency depends on satisfaction of a factual pre-condition. That pre-condition is that the emergency is only capable of being promptly and appropriately met by Commonwealth action. The pre-condition has not been satisfied. There were many ways in which the Commonwealth could have stimulated consumer spending by reducing taxation. While the defendants may be correct in saying that some of those methods could not have operated as quickly and effectively as a direct payment via the "tax bonuses", the Commonwealth did have power to act by paying genuine tax rebates by way of direct payment and by employing s 96 as speedily as it paid the "tax bonuses"629. No constitutional warrant. Secondly, there is no constitutional warrant for the supposed power to deal with a national fiscal emergency. There is no express warrant for it. The claim that it exists is entirely novel. Its existence is doubtful because of its potential for abuse. Let it be assumed that, whatever conclusions historians writing in the future may come to, the current economic crisis is as severe as the Special Case says. The truth is that the modern world is in part created by the way language is used. Modern linguistic usage suggests that the is one of "emergencies", "crises", "dangers" and "intense present age difficulties", of "scourges" and other problems. They relate to things as diverse as terrorism, water shortages, drug abuse, child abuse, poverty, pandemics, obesity, and global warming, as well as global financial affairs. In relation to them, the public is endlessly told, "wars" must be waged, "campaigns" conducted, "strategies" devised and "battles" fought. Often these problems are said to arise suddenly and unexpectedly. Sections of the public constantly demand urgent action to meet particular problems. The public is continually told that it is facing "decisive" junctures, "crucial" turning points and "critical" decisions. Even if only a very narrow power to deal with an emergency on the scale of the global financial crisis were recognised, it would not take long before constitutional lawyers and politicians between them managed to convert that power into something capable of almost daily use. The great maxim of governments seeking to widen their constitutional powers would be: "Never allow a crisis to go to waste." Definitional difficulties. Thirdly, it is far from clear what, for constitutional purposes, the meanings of the words "crises" and "emergencies" would be. It would be regrettable if the field were one in which the courts 629 See [513] above. deferred to, and declined to substitute their judgment for630, the opinion of the Executive or the legislature. That would be to give an "unexaminable" power to the Executive, and history has shown, as Dixon J said, that it is often the Executive which engages in the unconstitutional supersession of democratic institutions631. On the other hand, if the courts do not defer to the Executive or the legislature, it would be difficult for the courts to assess what is within and what is beyond power. It is a difficulty which suggests that the power to deal with national fiscal emergencies does not exist. SECTION 51(xxxix) READ WITH SECTION 61 INDEPENDENTLY OF A "NATIONHOOD POWER" OR POWER TO MANAGE THE NATIONAL ECONOMY The defendants' argument Outline. The defendants advanced a wider argument which did not depend in terms on any "nationhood power" or "power to manage the national economy"632. Nor did it depend on the "power" to appropriate in ss 81 and 83, which, according to the last group of the defendants' arguments to be considered below633, carries with it a power to authorise the Executive to spend independently of s 61. It did assume, however, that Parliament could appropriate for any purpose whatever by an appropriation law. The argument was put thus: "[I]f the Constitution is not to contradict itself and if Parliament's power of appropriation for national purposes or for those broad purposes of the polity is not to be stultified, then the limited authority that Parliament gives to the Executive in an appropriation must be capable of being exercised by the Executive, that is β¦ the executive power of the Commonwealth must extend to expending money that is lawfully appropriated." The argument was that when the Parliament appropriates money, s 61 authorises its expenditure. Hence, the defendants submitted, the Tax Bonus Act was validly enacted under s 51(xxxix) as incidental to the execution of that executive power. The defendants submitted that there were three ways to this destination, despite saying that they were overlapping and that "they may [constitute] the one way in the end". 630 See The Commonwealth v Tasmania (1983) 158 CLR 1 at 125. 631 Australian Communist Party v The Commonwealth (1951) 83 CLR 1 at 187-188. 632 See above at [511]-[552]. Scope of s 61: broad connection with legislative powers. The first way was that the scope of the executive power of the Commonwealth, considered as a "unitary concept" independently of its extension in s 61, "is one that in some way conforms to or is moulded to the scope of the Commonwealth's legislative powers." The defendants submitted that the connection between s 61 and those legislative powers was not close but broad β how broad, they said, need not be examined in this case. They relied on what Isaacs J said in The Commonwealth v Colonial Combing, Spinning and Weaving Co Ltd634. The defendants submitted that if there is an appropriation, the scope of the executive power to spend was coextensive with the scope of the legislative power to appropriate, and that this proposition was entirely consistent with the scope of the Commonwealth's executive power in an area being no narrower than the scope of Commonwealth legislative power in that area. taken to extend taking action which Scope of s 61: taking action authorised by legislature. The second way was that s 61, in extending expressly to the execution of the laws of the Commonwealth, must be the Commonwealth Parliament authorises to be taken. That is, where the Parliament has made an appropriation, the Executive has power to spend the money appropriated. The defendants relied on Williams J's observation in Australian Communist Party v The Commonwealth635 that the execution and maintenance of the laws of the Commonwealth "must mean the doing and the protection and safeguarding of something authorized by some law of the Commonwealth made under the Constitution." The defendants submitted that withdrawing and expending money "pursuant to an appropriation Act involves the doing of something authorised by a law of the Commonwealth and, accordingly, falls within the executive power of the Commonwealth under s 61 of the Constitution." Scope of s 61: prerogative power to determine whether and how to spend appropriated monies. The third way centred on the process by which the Executive expended money. The process began with its request, through a message from the Governor-General recommending the purpose of the appropriation pursuant to s 56 of the Constitution, continued with appropriation under s 81, and was followed by expenditure by the Executive of the monies appropriated by the legislation. The defendants relied on the following words of Jacobs J in Victoria v The Commonwealth and Hayden636: 634 (1922) 31 CLR 421 at 437ff. See [524] above. 635 (1951) 83 CLR 1 at 230, cited in Re Residential Tenancies Tribunal (NSW); Ex parte Defence Housing Authority (1997) 190 CLR 410 at 464; [1997] HCA 36. 636 (1975) 134 CLR 338 at 404-405. "When moneys are voted to the Queen by Parliament for the purposes declared by the Parliament, it falls within the prerogative to determine whether or not those moneys will be expended for that purpose and how, within the expression of the purpose to which the moneys have been appropriated, the expenditure will be made." Section 51(xxxix). The defendants then submitted that a statute like the Tax Bonus Act, which, by s 7, created a duty on a Commonwealth officer to pay the money appropriated in a particular way, was incidental to the execution of the power vested in the Executive by s 61 to spend it. They invoked some further words of Jacobs J in Victoria v The Commonwealth and Hayden637: "The power to legislate in respect of matters falling within the prerogative arises under s 51(xxxix) in so far as it does not arise under any other particular head of power. β¦ The Parliament is sovereign over the Executive and whatever is within the competence of the Executive under s 61, including or as well as the exercise of the prerogative within the area of the prerogative attached to the Government of Australia, may be the subject of legislation of the Australian Parliament." The defendants also submitted that there was "an almost identical statement" by Mason CJ, Brennan, Deane, Dawson and Toohey JJ in Brown v West638: "Whatever the scope of the executive power of the Commonwealth might otherwise be, it is susceptible of control by statute." These passages, of course, say nothing about what the precise scope of the executive power actually is. No excessive regulation. The defendants submitted that imposing a duty by s 7 of the Tax Bonus Act, creating an entitlement in recipients by s 5, and authorising recovery of overpayments by s 8, fell well short of the regulation of pharmacists' conduct which invalidated the legislation in Attorney-General (Vict) v The Commonwealth639 and well short of the "activities" that Mason J considered fell outside s 61 read with s 51(xxxix) in Victoria v The Commonwealth and Hayden640. The defendants said that it was not necessary to decide what further provisions would or would not fall within s 51(xxxix). These emollient observations tend to cloak the very radical nature of the core submission. 637 (1975) 134 CLR 338 at 406. 638 (1990) 169 CLR 195 at 202; [1990] HCA 7. 639 (1945) 71 CLR 237. 640 (1975) 134 CLR 338 at 396. The argument of New South Wales The issue is legislation. New South Wales pointed out that the Court was not asked to adjudicate on the lawfulness of the Commonwealth merely making grants to members of the public, unaffected by the creation of any rights in the members of the public to receive the grants or duties on any officer to make them. It noted that these proceedings, unlike those in Victoria v The Commonwealth and Hayden, did not involve the mere invocation of the executive power. They involved the enactment of legislation, the Tax Bonus Act β allegedly as an incident to the execution of that power. While it was unlikely that there would be any State legislation which was inconsistent with the Tax Bonus Act and thereby rendered inoperative by s 109 of the Constitution, invocation of the reasoning proffered by the defendants in other fields might create widespread inconsistency between State and Commonwealth statutes. New South Wales cited Latham CJ's words641: "The grant of money is one thing: the creation of a right which will prevail over State laws is an entirely different thing." The complaint of New South Wales was that if the defendants' broad view of executive power under s 61 and the broad view of s 51(xxxix) were adopted, the effect of s 109 would in many fields be injurious to the validity of State legislation. Even if the executive power to draw money from the Consolidated Revenue Fund under an appropriation pursuant to ss 81 and 83 and to spend it under s 61 were broad, it was not simply "incidental" to the execution of that non-coercive power to enact legislation creating rights and duties in relation to the expenditure enforceable by legal action. Distinction between expenditure of money and creation of rights and obligations. New South Wales accepted that in these particular proceedings the problem was a narrow one in the sense that the right to be paid conferred by s 5 and the duty to pay imposed by s 7 were not in substance very different from the actual payments, which the defendants were very eager to make. New South Wales agreed with the defendants that there was no regulation, of the kind which was found fatal in Attorney-General (Vict) v The Commonwealth642. No condition was imposed that the payments be applied in a particular way, let alone a condition breach of which would attract legal sanctions. But, said New South Wales, that did not matter: expenditure of money by itself was one thing, control of that expenditure by the creation of legal rights and coercive obligations was another, and there was no dividing line between the "richly encrusted series of rights and criminal obligations, as well as civil obligations," created by legislation like the Pharmaceutical Benefits Act and the much more modest framework of the Tax Bonus Act. legislation the 641 Attorney-General (Vict) v The Commonwealth (1945) 71 CLR 237 at 259-260. 642 (1945) 71 CLR 237. Narrowness of "incidental" in s 51(xxxix). New South Wales submitted that a merely declaratory or aspirational law like the Charter of Budget Honesty Act could be within s 51(xxxix) because Sched 1, cl 3(2) specifically provided that it did not create enforceable rights or duties. Legislation creating rights and obligations in relation to spending is not "incidental" to that spending, but something additional and outside the quality of being "incidental". Non-paramountcy of Commonwealth executive power over State executive power. New South Wales said that the crux of its submission was that just as executive power was subservient to legislative power in the United Kingdom and in the Australian colonies before 1901, after 1901 the effect of s 51 and other sections was to ensure not only that State executive power remained subservient to State legislative power, and Commonwealth executive power remained subservient to Commonwealth legislative power, but that Commonwealth executive power could not override State legislative or executive power. State and Commonwealth legislative power was allocated in a particular way by ss 106-109 of the Constitution. But there was no equivalent for conflicts between Commonwealth executive power and State executive power to the function s 109 played in relation to conflicts between Commonwealth legislative power and State legislative power. To treat s 51(xxxix) in conjunction with s 61 as justifying the Tax Bonus Act would be to render Commonwealth executive power paramount over State executive power in the absence of any constitutional provision justifying this course for executive power equivalent to s 109 for legislative power. The key question Contrary to the submissions of New South Wales, let it be assumed, without deciding, that the States do not have legislative or executive powers that affect the powers of the Executive Government of the Commonwealth. That leaves open the question of what those latter powers are. Width of s 61 There is a fallacy in the defendants' submission that there is a wide executive power which is capable of resulting in the enactment of valid Commonwealth legislation pursuant to s 51(xxxix) of a kind more extensive than that which could have been enacted under s 51(i)-(xxxviii). The fallacy lies in the excessive width it attributes to the executive power. "Extends". The language of s 61 suggests that its scope is not particularly broad. The executive power "extends" to the execution and maintenance of the Constitution, and of the laws of the Commonwealth. The verb "extends" implies that but for the extension, the meaning of "executive power" would be narrower. No power to legislate on subjects of national interest and concern. The defendants' submission at its most extreme β as seen in its advocacy particularly of the second and third ways to its destination643 β was that s 51(xxxix) authorises the Parliament to legislate in aid of any subject which it wished to. They submitted, it will be remembered, that Parliament could appropriate for any purpose whatever by an appropriation law, that it was within the executive power of the Commonwealth to spend the appropriated funds for that purpose, and that legislation could be enacted under s 51(xxxix) incidentally to that power644. Section 61 limited by legislative competence of Commonwealth. Gibbs J was, with respect, correct to say645: "According to s 61 of the Constitution, the executive power of the Commonwealth 'extends to the execution and maintenance of this Constitution, and of the laws of the Commonwealth'. Those words limit the power of the Executive and, in my opinion, make it clear that the Executive cannot act in respect of a matter which falls entirely outside the legislative competence of the Commonwealth." Isaacs J was of a similar opinion646, as was Barwick CJ647. And, as has been seen, Mason J, too, said that the executive power of the Commonwealth is a power which enables, and does no more than enable, "the Crown to undertake all 643 At [553]-[570] and [571]-[612]. 644 See above at [553]. 645 Victoria v The Commonwealth and Hayden (1975) 134 CLR 338 at 378-379 per 646 The Commonwealth v Colonial Combing, Spinning and Weaving Co Ltd (1922) 31 CLR 421 at 441 and 443 (contract entered by the Commonwealth Executive beyond power in part because it related to intrastate trade). See also The Commonwealth v Australian Commonwealth Shipping Board (1926) 39 CLR 1 at 9 per Knox CJ, Gavan Duffy, Rich and Starke JJ; [1926] HCA 39 ("There is no power which enables the Parliament or the Executive Government to set up manufacturing or engineering businesses for general commercial purposes"); and Federal Commissioner of Taxation v Official Liquidator of E O Farley Ltd (1940) 63 CLR 278 at 320-322 per Evatt J; [1940] HCA 13 (subject to statute, executive prerogatives as distinct from preferences, immunities and exceptions enjoyed at common law by the Executive and not the subject, and as distinct from prerogatives in the nature of property, are vested in the Executives of the States if the subject-matter to which they relate is outside ss 51 and 52). 647 Victoria v The Commonwealth and Hayden (1975) 134 CLR 338 at 362. executive action which is appropriate to the position of the Commonwealth under the Constitution and to the spheres of responsibility vested in it by the Constitution" (emphasis added)648. The Crown inherited the executive power as exercisable in the United Kingdom and in the Australian colonies in 1900, but subject to a qualification deriving from the federal nature of the constitutional compact. Since the creation of a right to receive and a duty to pay tax bonuses is a matter falling outside the legislative competence or spheres of responsibility of the Commonwealth649, it falls outside s 61 also. Mason J's additional propositions. It is true that Mason J put additional propositions. One was that among the powers conferred by s 61 were those effected by "the character and status of the Commonwealth as a national government."650 Another was that from s 51(xxxix) and s 61 could be deduced "a capacity to engage in enterprises and activities peculiarly adapted to the government of a nation and which cannot otherwise be carried on for the benefit of the nation."651 As was stated above652, it is not necessary in these proceedings to decide on the correctness of these latter propositions, since the Tax Bonus Act did not satisfy these criteria. Consequences of the defendants' approach for federalism makes it improbable. If the executive power of the Commonwealth could be used to make payments independently of s 96 in relation to matters outside the legislative competence of the Commonwealth, there would exist a means of bypassing the restrictions on that legislative power in ss 51 and 52, and bypassing the need to ensure, in effect, State consent to s 96 payments. The Commonwealth could make conditional grants to or contracts with corporations or non-corporations inducing them by douceurs to do what it could not compel them to do by legislation. That would read the Constitution in such a fashion as to be internally inconsistent. The question is not whether State legislation can affect the capacities of the Commonwealth. It is rather a question of assessing what the boundaries of Commonwealth capacities are. 648 Barton v The Commonwealth (1974) 131 CLR 477 at 498: see [529] above. See also Victoria v The Commonwealth and Hayden (1975) 134 CLR 338 at 396 and 649 See [603]-[605] below. 650 Victoria v The Commonwealth and Hayden (1975) 134 CLR 338 at 396. 651 Victoria v The Commonwealth and Hayden (1975) 134 CLR 338 at 397, quoted above at [511], and accepted by Brennan J in Davis v The Commonwealth (1988) 166 CLR 79 at 111. 652 See [512]-[518] and [545]. Conclusion. Even assuming that Parliament could appropriate for any purpose whatever by an appropriation law, including the purpose of paying tax bonuses, it was not within the power of the Executive under s 61 to expend the appropriated funds to pay tax bonuses. SECTION 51(xxxix) READ WITH SECTION 81 The defendants' arguments: outline The final category of arguments advanced by the defendants proceeded on the assumption that there had been a valid appropriation within the meaning of ss 81 and 83653. Section 81 as a grant of legislative "power". The defendants argued that s 81 is a grant of legislative "power" to the Commonwealth Parliament to make laws appropriating the Consolidated Revenue Fund for the "purposes of the Commonwealth". The defendants' argument was that under s 81 the Parliament had a power to earmark or segregate funds for a purpose and a power to authorise the Executive to spend those funds. These powers, together, constituted the "power of appropriation" in s 81. If the power to authorise expenditure by the Executive were exercised, the authority so conferred on the Executive to spend what had been appropriated was independent of s 61. The "purposes of the Commonwealth". The only limit on this power of expenditure which accompanied the "power" to appropriate was the requirement that the appropriation be for the "purposes of the Commonwealth". It was submitted that that expression had one of two meanings. The first meaning was "the purposes of the Commonwealth as a nation as determined by the Parliament itself acting under section 81". On the second, and alternative, meaning, "the expression extends to such purposes in the sense of goals or objectives as the Commonwealth as a polity in fact has and pursues from time to time in the exercise of its legislative and executive powers." Section 51(xxxix). The defendants then submitted that s 51(xxxix) is a source of power incidental to the execution of the power of appropriation vested in the Parliament by s 81 to enact legislation imposing an obligation on the Executive to expend money appropriated under s 81 "and, if needs be, a correlative entitlement on a recipient to receive such money." Avoidance of s 61 problems. The central point in the defendants' argument was that the executive power to spend was coterminous with the 653 These provisions are set out at [161]-[162] and [279]-[280]. legislative power to appropriate: if there were a power to appropriate, there was power to spend within the purpose for which the appropriation was made, and s 51(xxxix) supported legislation incidental to the appropriation. The advantage of this argument over arguments relying on s 61 was that it endeavoured to avoid any adverse consequences for the defendants of any possibly narrow view of what the executive power was under s 61. Width of submission. This is a very wide submission. The Executive β in the sense of the Cabinet β almost always controls the House of Representatives, and, while it does not always control the Senate, after appropriate payments of Danegeld at the behest of Senators in minor parties and independent Senators, it usually gets its way in that place to a substantial extent. The Executive's power, through its control of the legislature, to raise taxes pursuant to s 51(ii) is not limited to taxes only to be spent on purposes within other heads of legislative power. The Executive initiates appropriation and controls the legislature which grants appropriation. If appropriation can be for any purpose thought fit by the legislature, which rarely has a will different from that of the Executive, if an appropriation confers power on the Executive to spend on those purposes, and if s 51(xxxix) confers power to control that expenditure by legislation, the legislative restrictions on the Commonwealth to be found in ss 51 and 52 are not merely outflanked but destroyed. Thus the defendants' submission means that if the Executive thought it was for the purposes of the Commonwealth to pay pensions, it could procure the legislature to appropriate money for that purpose. That would give the Executive power to spend the money on pensions. And s 51(xxxix) would then give the legislature power to impose conditions in relation to the payments of pensions. On the defendants' submission in its application to pensions, there would have been no need for s 51(xxiii) and On what basis did the defendants seek to justify this very wide submission? The defendants' arguments: authorities Attorney-General (Vict) v The Commonwealth. The defendants contended that the proposition that s 81 contained "no substantive grant of power at all" had been advanced by (Vict) v The Commonwealth654, denied by the Commonwealth in that case655, rejected by in Attorney-General the plaintiff 654 (1945) 71 CLR 237 at 240-241. 655 (1945) 71 CLR 237 at 242. three judges β Starke J656, Dixon J657 and McTiernan J658 β and perhaps rejected also by Latham CJ659. However, it is far from clear that the Court understood the plaintiff as having argued that s 81 contained "no substantive grant of power at all" or that it dealt specifically with that argument. Further, whatever was said on the point was dicta: the actual ground of decision was that the legislation fell outside s 51(xxxix) because regulation of the activities of chemists was not incidental to any power to appropriate, whatever its nature and scope. He said More significantly, it is not true to say that Starke J supported the the "Commonwealth power of that defendants' position. appropriation"660 did not authorise the Commonwealth appropriating its revenues for any purpose whatsoever "without regard to whether the object of expenditure is for the purpose of and incident to some matter which belongs to the Federal Government"661. He did not say that legislation could be validly enacted under s 51(xxxix) as an incident to an appropriation under s 81. Latham CJ said the legislation could be enacted under s 51(xxxix) as an incident to an appropriation under s 81, but only of a limited kind662: "[Section] 51(xxxix) authorizes the making of laws for the purpose of securing that public money is applied to the purposes for which it is appropriated and not otherwise. But s 51(xxxix), applied to the power to make laws for the appropriation of money, though it authorizes legislation with respect to matters incidental to the expenditure of the money, does not authorize legislation which is incidental only to the purposes for which the money appropriated is to be expended, unless there is power to make laws for such purposes." Dixon J (Rich J concurring) certainly said that s 81 conferred a power of appropriation. But he declined to hold, as distinct from assume, that it gave a 656 (1945) 71 CLR 237 at 265-266. 657 (1945) 71 CLR 237 at 269. 658 (1945) 71 CLR 237 at 273. 659 (1945) 71 CLR 237 at 253-256. 660 (1945) 71 CLR 237 at 265. 661 (1945) 71 CLR 237 at 266, citing Harrison Moore, The Constitution of the Commonwealth of Australia, 2nd ed (1910) at 523-527. 662 (1945) 71 CLR 237 at 250. "power to spend money β¦ independent of the limitations which affect the other powers of the Commonwealth"663. And he, like Starke J, did not say that legislation could be validly enacted under s 51(xxxix) as an incident to an appropriation under s 81. Australian Woollen Mills Pty Ltd v The Commonwealth. The next case on which the defendants relied was Australian Woollen Mills Pty Ltd v The Commonwealth. There Dixon CJ, Williams, Webb, Fullagar and Kitto JJ said664: "Section 81 of the Constitution authorizes the appropriation of the revenues and moneys of the Commonwealth for the purposes of the Commonwealth." However, depending on the meaning of "appropriation", that is a proposition as compatible with the idea that s 81 empowers the segregation of money from the Consolidated Revenue Fund (but not the authorisation of expenditure) as it is with the idea that s 81 empowers not only the segregation of money but also the authorisation of expenditure. Victoria v The Commonwealth and Hayden. The defendants then referred to the following sentences in the argument of Victoria in Victoria v The Commonwealth and Hayden665: "The power to appropriate moneys is not found in s 81 of the Constitution. It arises as an incident of the other powers conferred by the Constitution and is also incidental to the execution of those powers." The defendants submitted that the contention in the first sentence was rejected by Barwick CJ666, McTiernan J667, Gibbs J668, Mason J669, Jacobs J670 and 663 (1945) 71 CLR 237 at 269. 664 (1954) 92 CLR 424 at 454; [1954] HCA 20. 665 (1975) 134 CLR 338 at 340. 666 (1975) 134 CLR 338 at 354. 667 (1975) 134 CLR 338 at 367. 668 (1975) 134 CLR 338 at 371. 669 (1975) 134 CLR 338 at 392. 670 (1975) 134 CLR 338 at 410. Murphy J671, whilst Stephen J did not decide the point. Whether or not all the passages relied on support the defendants' submission, the key weakness in that submission is that even if the proposition advocated by Victoria in Victoria v The Commonwealth and Hayden was rejected by the Court in that case, the proposition is not identical with the contrary of the defendants' contention here. The defendants' contention here is that s 51(xxxix) is a source of power to enact the Executive to expend money legislation imposing an obligation on appropriated under s 81. The proposition advocated by Victoria was that s 81 assumes the existence of a legislative power to appropriate conferred by the Constitution in other provisions such as ss 51, 52 and 122672. Rejection of Victoria's proposition did not entail acceptance of the defendants' present contention. The defendants' arguments: the Constitutional Commission The defendants then relied on passages in the Final Report of the Constitutional Commission in 1988673. However, while the passages relied on support the view that a law is validly made pursuant to s 83 if the appropriation made by it is authorised by s 81, they do not support the view that an appropriation not only earmarks funds but also confers authority on the Executive to expend those funds, or the view that a law regulating that expenditure is valid in the absence of any constitutional power other than that found in s 51(xxxix). Like the passages in the three authorities to which the defendants referred, they were not directed to the present question. The Commission recommended only that s 81 "be amended to allow the appropriation of the Consolidated Revenue Fund for any purpose that the Parliament thinks fit"674. The Commission did so because it saw the present operation of s 81 as affected by uncertainty. It was troubled by difficulties arising from challenges to appropriation Acts675. It pointed to legislative practice conformable with a wide 671 (1975) 134 CLR 338 at 418. 672 Victoria v The Commonwealth and Hayden (1975) 134 CLR 338 at 340, citing Australian Woollen Mills Pty Ltd v The Commonwealth (1954) 92 CLR 424 at 454. 673 Australia, Final Report of the Constitutional Commission, (1988), vol 2 at 831 and 834, and particularly at 832 [11.299]. 674 Australia, Final Report of the Constitutional Commission, (1988), vol 2 at 831 675 Australia, Final Report of the Constitutional Commission, (1988), vol 2 at 834 "To leave the necessarily wide statements of purpose in appropriation Acts open to challenge could bring the operations of government to a halt. Again, (Footnote continues on next page) view of s 81676. It stated: "Adoption of our recommendation is unlikely to have any major consequences for the Commonwealth and the States."677 These are all points which, as the recommendation itself and the terms in which the key issue was stated678 suggest, go to the meaning of "purposes of the Commonwealth", not to the question of how any legislation in addition to the appropriation Act itself can be validly enacted. That is supported by the following passage679: the distribution of powers between "We would add that the effect of an appropriation is financial, not regulative, and neither betters nor worsens transactions in which the Executive engages within its constitutional domain, except that the declared willingness of the Parliament that public moneys should be applied, and funds appropriated, for the purpose is a legal condition of the transaction." to treat the purposes stated in appropriation Acts (when often the details of expenditure have not been worked out) as supportable only if answering some one or more of the legislative powers of the Commonwealth would leave the courts with a difficult, if not impossible, task. How would the not fully articulated purpose be proved? What evidence would be admissible? What material supplementary to the Act could be considered by the Court?" 676 Australia, Final Report of the Constitutional Commission, (1988), vol 2 at 834 "[T]he Parliament has for many years made appropriations to persons or bodies for purposes having little or any apparent connection with the powers or functions of the Commonwealth. If, as some of the Justices have said, the extent of the appropriation power is to be measured by that of the legislative power, many of such payments have been illegally made and likely to be so made in the future." 677 Australia, Final Report of the Constitutional Commission, (1988), vol 2 at 834 678 Australia, Final Report of the Constitutional Commission, (1988), vol 2 at 832 679 Australia, Final Report of the Constitutional Commission, (1988), vol 2 at 834 [11.314]. The Commission cited The Commonwealth v Colonial Ammunition Co Ltd (1924) 34 CLR 198 at 224-225; [1924] HCA 5 and Victoria v The Commonwealth and Hayden (1975) 134 CLR 338 at 392-393. That passage is based on a part of Mason J's judgment in Victoria v The Commonwealth and Hayden680 in which his Honour was discussing the meaning of "for the purposes of the Commonwealth". The defendants' arguments: "purposes of the Commonwealth": seven factors The defendants then turned to a consideration of the meaning of "purposes of the Commonwealth" in s 81. They submitted that, pursuant to O'Connor J's statement in the Jumbunna case681, the wider of the two meanings they postulated should be preferred. They also advanced seven other factors to that end. The first and second assumed that s 81 was to be read as a grant of power to authorise expenditure. The last five factors were also said to point to the correctness of that assumption. Section 81 read with ss 51 and 52. The first factor was: to read the expression "Commonwealth" in s 81 as meaning "nation" was to read it in the same way as the expression "Commonwealth" is used in ss 51 and 52, as part of the phrase "power to make laws for the peace, order, and good government of the Commonwealth". Section 81 read with s 51(xxxi). The second factor was that if "purposes of the Commonwealth" meant only purposes otherwise within Commonwealth legislative power, the expression was inapt. Instead one would have expected a formula like that used in s 51(xxxi) β "for any purpose in respect of which the Parliament has power to make laws". Power to tax correlative with power to appropriate. The third factor was that the power to tax was correlative with the power to appropriate682. The power to tax involved the collection of money and the placing of it into the Consolidated Revenue Fund pursuant to the opening words of s 81. The power to appropriate involved approving the taking of money out of the Consolidated Revenue Fund and the authorising of its expenditure. The power to tax was not limited to purposes that could be pursued by the Commonwealth Parliament683. 680 (1975) 134 CLR 338 at 392-393. 681 See above at [405] and [413]. 682 For this South Australia v The Commonwealth (1942) 65 CLR 373 at 414-415; [1942] HCA 14 was cited. 683 For this the defendants relied on Northern Suburbs General Cemetery Reserve Trust v The Commonwealth (1993) 176 CLR 555 at 569 per Mason CJ, Deane, Toohey and Gaudron JJ ("If a law, on its face, is one with respect to taxation, the law does not cease to have that character simply because Parliament seeks to (Footnote continues on next page) It was submitted that in those circumstances it would be "somewhat odd and asymmetrical to say that the power to spend is limited as to purpose." It was submitted that the oddness and asymmetry were even greater when it was remembered that fiscal policy as a means of managing a national economy can only be implemented in two ways, adjusting taxation and adjusting spending, and it would be "odd, not inconceivable, but odd and unfortunate, if one of the two fiscal hands was tied behind Parliament's back." Difficulties created by constitutional limit on power of appropriation. The fourth factor was that if there were a constitutional limit on the power of appropriation, it would create difficulties both for the Court and for Parliament. It would create "extraordinary practical difficulties of judicial determination" in adjudicating on the constitutional limit684. It would cause Parliament constantly to be "looking over its shoulder and being fearful of the long-term consequences" if it made an appropriation outside power685. achieve, by its enactment, a purpose not within Commonwealth legislative power") and 572; [1993] HCA 12. 684 They relied on Victoria v The Commonwealth and Hayden (1975) 134 CLR 338 at 394, where Mason J said: "It has been the practice, born of practical necessity, in this country and in the United Kingdom, to give but a short description of the particular items dealt with in an Appropriation Act. No other course is feasible because in many respects the items of expenditure have not been thought through and elaborated in detail. How is the short description of an item contained in the schedule to the Act to serve as the fulcrum of constitutionality? If it fails to throw sufficient illumination on the area of doubt, is the Court to have regard to supplementary material, as it has been invited to do in this case, and if so, to what material will it have recourse? These questions, which to my mind admit of no satisfactory solution, illustrate the problems inherent in the narrow construction offered by the plaintiffs and the hazards attending the processes of Parliament if that construction is accepted." They also relied on Australia, Final Report of the Constitutional Commission, (1988), vol 2 at 834 [11.311], quoted above at [584] n 675. 685 They relied on Victoria v The Commonwealth and Hayden (1975) 134 CLR 338 at 418, where Murphy J said a narrow construction of s 81 would have a "chilling effect β¦ on governmental and parliamentary initiatives", and would be a formula for "stultifying government". They also relied on Sir Robert Garran's views to similar effect, cited by Murphy J, in Australia, Report of the Royal Commission on Child Endowment or Family Allowances, (1929) at 10, pars 5 and 6; Australia, Report of the Royal Commission on the Constitution, (1929), Minutes of Evidence, Pt 1 at 69 and 71. Drafting changes. The fifth factor related to the drafting history of s 81. In the original drafts the expression "the public service of the Commonwealth" was employed; that was an expression used in colonial constitutions in a broad way; and the ultimate change to "the purposes of the Commonwealth" was not meant to have a narrowing effect. Broad view of s 81 has no impact on States. The sixth factor was that reading s 81 broadly had no practical impact on the exercise of State legislative power, because it would be unlikely that any State Act could be enacted which would be inconsistent with appropriation legislation under s 109 of the Constitution. Nor would it have any other impact on the States. It would have no impact via s 94, partly because the Commonwealth had for a long time taken care to ensure that there was no surplus revenue which Parliament might pay to the States and partly because, even if there were surplus revenue, there was no duty on Parliament to pay it to the States. In response to a submission by New South Wales suggesting that a wide view of s 81 would undermine the ability of the Commonwealth to make conditional grants to the States under s 96, the defendants submitted that since s 96 grants could be made on conditions not limited to purposes otherwise within Commonwealth power, s 96 was in fact consistent with a wide construction of s 81. Legislative practice. Seventhly, it was relevant to the construction of s 81 to consider longstanding legislative practice. It had been the practice of the Executive and the legislature since 1901, although at times the practice had been controversial, to act on the wide view of s 81686. That is, the defendants submitted that much legislation assumed both that s 81 contained an independent grant of legislative power and that it could be exercised for the purposes of the nation as determined by Parliament itself under s 81. The defendants submitted that the States had always had standing to challenge the relevant legislation, but had never chosen to do so. The defendants denied that the argument involved advancing a particular construction on the ground that the Commonwealth had always acted on that construction, but said, in a further instance of reliance on 686 The defendants gave the following examples of legislation containing appropriations where, it was said, there were no specific heads of legislative power the appropriation: that comprehensively corresponded Trans-Pacific Flight Appropriation Act 1934 (Cth); Wool Publicity and Research Act 1936 (Cth); National Fitness Act 1941 (Cth); Home Deposit Assistance Act 1982 (Cth); Farm Household Support Act 1992 (Cth); Dairy Industry Adjustment Act 2000 (Cth); and Nation-building Funds Act 2008 (Cth). In argument reference was also made to the Special Annuity Act 1934 (Cth). These are discussed below at the purposes of what O'Connor J said in the Jumbunna case687, that since the Constitution was a document drawn up for the practical working of government through the centuries, and the practical working of government in the last century had proceeded beneficially on a wide view of s 81, it would be surprising if the Constitution were to be construed as forbidding the construction on which that practical and beneficial working rested. The defendants accepted that "the Commonwealth has no specific power to manage the national economy"688, but submitted that this was nevertheless what it had increasingly been doing over the last century. Thus the purposes stated in s 10(2) of the Reserve Bank Act were purposes of the Commonwealth, even before 1959. The defendants' seven factors considered The first and second arguments put aside. The first and second arguments assume that s 81 is a source of legislative power to confer on the Executive power to spend. Thus they have no significance if the conclusion is reached that s 81 is not a source of that legislative power. In this event, the question of what "the purposes of the Commonwealth" means does not arise. If that question, which is dealt with below689, does arise, the defendants' arguments are no more than claims that s 81 could have been more clearly drafted. Claims of that kind in this instance are weak and not determinative. The third argument: asymmetry between s 51(ii) and s 81. The third argument appealed to an asymmetry which would arise from the fact that s 51(ii) contained a power to tax for purposes wider than those which the legislature could pursue if the power to spend were limited only to those purposes within the power of the Parliament conferred otherwise than by s 81. This exaggerates the asymmetry: for example, the Commonwealth is entitled to spend under s 96, in cooperation with the States, in relation to matters on which it has no legislative power. And the question: "For what purposes may taxation be raised?" is distinct from the question: "For what purposes may legislation in relation to the money so raised be enacted?" While it may now be unlikely that there will ever be scope for s 94 to operate in the future, it was not necessarily unlikely in 1901. Section 90 denied the States those powers formerly enjoyed by the colonies to raise monies by duties of customs and excise. It deprived them of what had 687 (1908) 6 CLR 309 at 368: see above at [405] and [413]. 688 See Victoria v The Commonwealth and Hayden (1975) 134 CLR 338 at 362 per formerly been their main source of income. That meant that other sources of income would have to be found. Two of those sources of income were s 94 and s 96. Those sections pointed to the possibility that what the Commonwealth raised by taxation might legitimately be more than it would need for its limited purposes690. Difficulties created by constitutional limit on power of appropriation. The fourth factor relied on the difficulties facing the Court in determining whether an appropriation had exceeded constitutional power, and the difficulties facing the legislature in seeking to avoid constitutional invalidity. Difficulties though they may be, they were not shown to be greater than those which face the Court in deciding whether non-appropriation legislation was valid, and those which face the legislature in seeking to avoid enacting non-appropriation legislation which was invalid. The occasional declaration that federal legislation is invalid does not cause the progress of government to be unduly chilled or stultified. In any event, this fourth consideration, like the fifth, which in itself is not decisive, goes the more Commonwealth" means than to the question of whether s 81 confers an independent legislative power to confer on the Executive a power to expend monies appropriated. the expression "the purposes of the question of what Impact on States. The sixth factor related to the impact on State legislative power if s 81 were construed as giving an independent legislative power to confer on the Executive a power to expend monies appropriated. If the federal power were widely used, the impact on State legislative power would be considerable. Further, as New South Wales said, there would be an impact on the operation of s 96. The defendants' submission that s 96 was consistent with a wide construction of s 81 as a source of legislative power, because s 96 grants could be made for purposes not limited to purposes otherwise within the power, is flawed. The making of s 96 grants depends on consultation with, and the cooperation of, the States. If s 81 created a wide power to authorise expenditure and s 51(xxxix) permitted enactment of legislation incidental to it so as to constitute an independent head of legislative power much wider than those in ss 51 and 52, it is a head of power which would be exercisable whether or not the States agreed. Legislative practices. As to the seventh factor, the defendants' reliance on longstanding legislative practices brought about by the conduct of the Executive in choosing what kinds of Bill to introduce must be wholly rejected. They are practices which have often been controversial691. When they have not been 690 Victoria v The Commonwealth and Hayden (1975) 134 CLR 338 at 354-356. 691 For examples, see Saunders, "The Development of the Commonwealth Spending Power", (1978) 11 Melbourne University Law Review 369 at 381-386. controversial, that is partly because they are practices which have been devoted to relatively minor but beneficial ends. And to construe the Constitution in the light of actual executive and legislative practices involves a misconception of the correct relationship between the Court on the one hand and the Executive and the legislature on the other. It inverts the correct approach. The Court decides what the Constitution means in the light of its words. It does not infer what the Constitution means from the way the Executive and the legislature have behaved. The development of particular legislative practices in reliance on particular decisions of the Court construing the Constitution in a certain way may be a consideration militating against the overruling of those decisions692. But there are no decisions of that kind relevant to the present problem. Executive and legislative practice cannot make constitutional that which would otherwise be unconstitutional. Practice must conform with the Constitution, not the Constitution with practice. The fact that the executive and legislative practices may have generated benefits does not establish that they are constitutional; for it has not been shown that the same benefits could not have been generated on a different view of s 81 from that which the defendants propound. Nor has it been shown that they could not have been based on the legislative powers set out in 692 Queensland v The Commonwealth (1977) 139 CLR 585 at 600; [1977] HCA 60. 693 This may be seen from the examples given by the defendants. The Trans-Pacific Flight Appropriation Act 1934 (Cth) made a grant of Β£5,000 to the widow of Charles Ulm, who flew across the Pacific with Charles Kingsford Smith in 1928 and died while attempting a crossing of the Pacific 14 days before the Act was given royal assent: it may have been supportable by s 51(xxiii). See McCarthy, "Charles Thomas Philippe Ulm", in Ritchie (ed), Australian Dictionary of Biography, Volume 12: 1891-1939, (1990) 302 at 302. So may the Special Annuity Act 1934 (Cth): it provided for payment of an annuity of Β£156 per annum to the widow of D C McGrath, who had been a member of the House of Representatives for 21 years and whose estate was valued for probate at only Β£944 (Love, "David Charles McGrath", in Nairn and Serle (eds), Australian Dictionary of Biography, Volume 10: 1891-1939, (1986) 275 at 275). That Act may also have been supportable by the head of power discussed in Brown v West (1990) 169 CLR 195. The Wool Publicity and Research Act 1936 (Cth) may have been supportable under s 51(i) (see s 13(b), which stated one of the Act's purposes to be the increasing and extending of the use of wool throughout the world). The National Fitness Act 1941 (Cth) may have been supportable by the defence power. The Home Deposit Assistance Act 1982 (Cth) may have been supportable, at least in its operation in relation to married persons, by s 51(xxi). The Farm Household Support Act 1992 (Cth) and the Dairy Industry Adjustment Act 2000 (Cth) may have been supportable under s 51(xxiiiA). The Nation-building Funds Act 2008 (Cth) may be supportable under s 96. Although South Australia advocated a wide view of s 81, it declined to align itself with the defendants' submission so far as it depended on the contrary legislative practice of the Commonwealth. There is force in the language it used in that regard: "The Commonwealth cannot now turn to its advantage, as a factor tending in favour of an expanded view of Commonwealth power, the fact that it has acted in disregard of the clearly expressed views of a majority of this Court for over 60 years[694]. No encouragement should be [given] to the Commonwealth to ignore the decisions and reasoning of this Court as to the limits of its powers, by attaching significance to the fact that the Commonwealth has acted on the assumption that the views expressed by the Court are wrong." The defendants countered this submission by referring to supposed contrary legislative practice before 1945, but that does not improve their position. No independent head of legislative power in s 81 It is necessary to reject the defendants' submission that s 81 creates an independent head of legislative power in the sense that the "legislative power" to appropriate carries with it a power to authorise the Executive to spend the funds appropriated. The important but narrow function of appropriation. Statutory language effectuating an appropriation merely creates a capacity to withdraw money from the Consolidated Revenue Fund and set it aside for a particular purpose. The appropriation regulates the relationship between the legislature and the Executive. It vindicates the legislature's long-established right, in Westminster systems, to prevent the Executive spending money without legislative sanction. The appropriation of public revenue operates as a grant by the legislature to the Executive giving the Executive authority to segregate the relevant money issued from the Consolidated Revenue Fund and to dedicate it to the execution of some purpose which either the Constitution has itself declared, or Parliament has lawfully determined, shall be carried out695. It also operates so as to restrict any 694 This is a reference to Attorney-General (Vict) v The Commonwealth (1945) 71 CLR 237 at 265-266 per Starke J, 271-272 per Dixon J (with whom Rich J agreed at 264) and 282 per Williams J. 695 The State of New South Wales v The Commonwealth (1908) 7 CLR 179 at 190 and 200; [1908] HCA 68. See also Attorney-General (Vict) v The Commonwealth (1945) 71 CLR 237 at 248. expenditure of the money appropriated to the particular purpose for which it was appropriated696. That is, it creates a duty β a duty not to spend outside the purpose in question. Beyond that it creates no rights and it imposes no duties697. Nor does it create any powers. It fulfils one pre-condition to expenditure. It does not do away with other pre-conditions to expenditure. Of itself it gives no untrammelled power to spend. "[Appropriation] neither betters nor worsens transactions in which the Executive engages within its constitutional domain, except so far as the declared willingness of Parliament that public moneys should be applied and that specified funds should be appropriated for such a purpose is a necessary legal condition of the transaction. It does not annihilate all other legal conditions."698 One relevant legal pre-condition which must be satisfied is the existence of power to spend what has been appropriated. Whether the Executive has power to spend the money will depend on there being either a conferral of that power on it by legislation or some power within s 61 of the Constitution. Hence the effect of an appropriation is to operate as an "earmarking"699 or a means of "legally segregating"700 or a "provisional setting apart or diversion from the Consolidated Revenue Fund of the sum appropriated"701; to prevent the money from being used for any purpose other than the purpose for which it was appropriated; and to prevent it from being treated as "surplus revenue of the Commonwealth" for the purposes of s 94 of the Constitution702. Having regard to 696 The Commonwealth v Colonial Ammunition Co Ltd (1924) 34 CLR 198 at 222 and 697 Victoria v The Commonwealth and Hayden (1975) 134 CLR 338 at 386-387, 392-393 and 411. 698 The Commonwealth v Colonial Ammunition Co Ltd (1924) 34 CLR 198 at 224-225 per Isaacs and Rich JJ. 699 Victoria v The Commonwealth and Hayden (1975) 134 CLR 338 at 411 per 700 The State of New South Wales v The Commonwealth (1908) 7 CLR 179 at 200 per 701 The State of New South Wales v The Commonwealth (1908) 7 CLR 179 at 190-191 702 The State of New South Wales v The Commonwealth (1908) 7 CLR 179. Section 94 is set out at [291] n 314. the received meaning of "appropriation", the greatest power that s 81 could confer on the legislature is a power to earmark funds in the Consolidated Revenue Fund. By its terms, s 81 could go no further than giving Parliament a power to appropriate. It does not confer a power on the Parliament to authorise the Executive to expend the appropriated funds. And it does not confer a power on the Parliament to regulate expenditure made, by imposing a duty on the Executive or imposing a right in a third party, or otherwise. The creation of rights, duties and powers. Even though there may be legislation giving a power to spend the money appropriated, or even though an aspect of the executive power permits expenditure, the Commonwealth may desire the expenditure of the money appropriated to be carried out in conformity with particular rights, duties or powers. The creation of a power beyond the power to spend will almost always involve the creation of a duty. That is because if the power is to be exercised, someone against whose interests it is exercised will have to be compelled to comply with the exercise of the power through the creation of an enforceable duty to obey the person exercising it. If a provision in an enactment creates rights or imposes duties or confers powers, it is not an appropriation provision. Hence the creation of rights, the imposition of duties and the conferral of powers cannot be effected by the statutory words effecting the appropriation. Those acts of creation, imposition and conferral can only be effected by some legislation other than the statutory words making the appropriation703. A provision in an enactment creating rights, imposing duties or conferring powers cannot rest on ss 81 and 83, for it goes beyond mere appropriation. The validity of such a provision must find its source, if anywhere, in some other head of Commonwealth legislative power. A decision of the Executive to spend the monies appropriated will be invalid if it is beyond executive power and unsupported by a valid enactment. It follows that the defendants' submission that the Executive's power to spend is necessarily coterminous with the legislature's "power" to appropriate is erroneous. The Executive's power to spend depends on finding legislation permitting the expenditure or on finding support for the expenditure in s 61. If the latter course is embarked on, it must be remembered that, for reasons given earlier, the executive power is no wider than the legislative704, subject to the possibility of a small extension if Mason J's test in Victoria v The Commonwealth and Hayden705 is correct. Since s 81 does not confer a legislative power to 703 Campbell, "Parliamentary Appropriations", (1971) 4 Adelaide Law Review 145 at 704 Victoria v The Commonwealth and Hayden (1975) 134 CLR 338 at 398: see [519] above. 705 (1975) 134 CLR 338 at 397: see above at [511]. authorise expenditure, s 51(xxxix) cannot be a source of power to enact laws as an incident of any such power. The power to spend appropriated money does not extend beyond the limits of authority conferred by legislation empowered otherwise than by s 81 and the limits of the executive power of the Commonwealth under s 61. Hence, s 51(xxxix) cannot be a source of power to enact laws as an incident of the execution of any wider power to spend. If the defendants' submission were correct (and if the words "for the purposes of the Commonwealth" had a wide meaning), Commonwealth legislative power would extend well beyond the boundaries marked elsewhere in the Constitution. Accordingly, on the principles of construction stated by O'Connor J in the Jumbunna case706, the narrower view of s 81 is to be preferred β it creates no "legislative power" to confer on the Executive a power to spend what is appropriated. Constitutional language. That conclusion β that ss 81 and 83 do not create a grant of legislative power to authorise expenditure β is supported by the following parts of the Constitution. Chapter I Pt V is headed "Powers of the Parliament". It would be expected that the grants of legislative power are to be found in that Part. In that Part, ss 51 and 52 set out many legislative powers, and the succeeding sections set out various powers and restrictions on powers of the Parliament and its two Houses. The defendants submitted that that was not conclusive, since powers could also be found in the Chapter in which ss 81 and 83 were placed, namely Ch IV, which is headed "Finance and Trade". They gave ss 94 and 96 as examples. But the power to provide in the manner described in s 96 is actually found in Ch I Pt V, particularly s 51(xxxvi)707. Section 94 is not, or at least not primarily, a power to legislate. And in other parts of their argument the defendants treated s 94 as obsolete. Further, the defendants' argument does not confront the difficulty that the only words which can support a power in s 81 are the words "to be appropriated". Even if those words confer a power, it must be limited to a power of appropriation. But the authorities say that an appropriation of money is simply the earmarking or segregating of it from the 706 (1908) 6 CLR 309 at 367-368: see [405] and [413] above. 707 Section 96 provides: "During a period of ten years after the establishment of the Commonwealth and thereafter until the Parliament otherwise provides, the Parliament may grant financial assistance to any State on such terms and conditions as the Parliament thinks fit." (emphasis added) Section 51(xxxvi) gives the Parliament power to make laws with respect to "matters in respect of which this Constitution makes provision until the Parliament otherwise provides". Consolidated Revenue Fund. Hence, at most, s 81 could confer a power so to earmark or segregate. Conclusion. Section 81 does not create a "legislative power" to confer on the Executive the power to spend what is appropriated. "For the purposes of the Commonwealth" has a narrow meaning Even if, contrary to what has just been said, an appropriation under s 81 and s 83 does give the Executive power to spend the money appropriated, the defendants' submission must be rejected on a separate ground. It relates to the construction of the words "for the purposes of the Commonwealth" in s 81. Those words do not have the wide meaning urged by the defendants. Section 81 does not give the Commonwealth a power to make appropriations for the general welfare. That is because if it did, it would, taken with the executive power to spend (which for the purposes of considering the present argument is assumed to be conferred by the appropriation) and a power to legislate under s 51(xxxix) as an incident to it, make the Commonwealth a government of general and unlimited legislative powers, despite the enumeration in other sections of the Constitution of specific powers. On O'Connor J's principles of construction, again, the narrower construction must be preferred. In Attorney-General (Vict) v The Commonwealth Dixon J said that to read s 81 as giving the Commonwealth a power to enact laws for the general welfare "would be to amend the Constitution, not to interpret it."708 The power of appropriation is limited by s 83. Of that limitation, Dixon J said709: "[Section] 83, in using the words 'by law' limits the power of appropriation to what can be done by the enactment of a valid law. In deciding what appropriation laws may validly be enacted it would be necessary to remember what position a national government occupies and β¦ to take no narrow view, but the basal consideration would be found in the distribution of powers and functions between the Commonwealth and the States." In the same case710 Starke J rejected the view that the appropriation power authorised the Commonwealth to appropriate its revenues and monies for any purpose whatsoever, and suggested that the expenditure had to be for the purpose of and incidental to some other matter which belongs to the federal government. 708 (1945) 71 CLR 237 at 271. 709 (1945) 71 CLR 237 at 271-272. 710 (1945) 71 CLR 237 at 265-266. Williams J was of a similar opinion711. Rich J agreed with Dixon J712. Now it is true, as the defendants submitted, that Dixon J said that the controversy in Attorney-General (Vict) v The Commonwealth did not require the Court to choose between his view and the wider view advocated by the present defendants713. But he did say that the view he expressed was what his view had always been714, and that he had not yet seen any reason to desert that opinion715. Barwick CJ agreed with it716. So did Gibbs J717. On the other hand, various other judges have not718. The statement of Dixon J quoted above has been criticised as unclear719. After allowances have been made for the inherent difficulty of the subject matter, and for a compressed manner of expression, that criticism must be rejected. When Dixon J said that s 83, in using the words "by law", limits the power of appropriation to what can be done by the enactment of a valid law, he meant that it was not possible to appropriate money for purposes beyond those which could be achieved by enacting legislation validly under Commonwealth legislative power. That was the position he had taken up in his evidence to the Royal Commission on the Constitution720. That is what he meant when he said that the view he expressed in that passage was what his view had always been and that he had not yet seen any reason to desert it. The defendants submitted that Dixon J's approach "requires the bare reference to 'law' in s 83 to do too much work." They did not explain why. 711 (1945) 71 CLR 237 at 282. 712 (1945) 71 CLR 237 at 264. 713 (1945) 71 CLR 237 at 269. 714 (1945) 71 CLR 237 at 271. 715 (1945) 71 CLR 237 at 272. 716 Victoria v The Commonwealth and Hayden (1975) 134 CLR 338 at 356 and 363. 717 Victoria v The Commonwealth and Hayden (1975) 134 CLR 338 at 371 and 718 Attorney-General (Vict) v The Commonwealth (1945) 71 CLR 237 at 256 per Latham CJ and 273 per McTiernan J; Victoria v The Commonwealth and Hayden (1975) 134 CLR 338 at 369 per McTiernan J, 396 per Mason J, 411 per Jacobs J and 417 per Murphy J. 719 Australia, Final Report of the Constitutional Commission, (1988), vol 2 at 832 720 See above at [309]. The Tax Bonus Act is not incidental to the appropriation Section 51(xxxix) gives power to make laws with respect to matters incidental to the "execution" of a power vested in Parliament or the Executive. An appropriation merely authorises the withdrawal of money from the Consolidated Revenue Fund, not the expenditure of that money721. Hence a statute creating rights or imposing duties in relation to the money withdrawn from the Consolidated Revenue Fund goes beyond being merely incidental to the withdrawal. The rights and duties are not just an incident of the execution of the power to withdraw the money from that Fund β something naturally appertaining or attaching to it, or subordinate, subsidiary, or ancillary to it, or consequential on it, or "something which attends or arises in its exercise"722. The creation of rights or duties in relation to the expenditure of appropriated monies is something outside that which attends or arises in the exercise of the executive power to withdraw money from the Fund. If s 81 is limited solely to a power to withdraw or segregate or earmark money from the Consolidated Revenue Fund, and confers no power to spend, there is no scope for s 51(xxxix) to operate. This is because the appropriation is complete as soon as the funds are withdrawn or segregated or earmarked. There is nothing further to execute. Hence, there is nothing incidental to the execution of the legislative power to withdraw or segregate or earmark which can be done once the withdrawal or segregation or earmarking has taken place. Further, to paraphrase the language of Dixon J in Attorney-General (Vict) v The Commonwealth723, in this case appropriation of the necessary money is the consequence of the plan to create rights and duties in relation to the bonuses; the plan is not consequential upon or incidental to the appropriation of money. The following words of Latham CJ are also relevant724: "The result of a contrary view would be that, by the simple device of providing for the expenditure of a sum of money with respect to a particular subject matter, the Commonwealth could introduce a scheme which in practice would completely regulate and control that subject matter. The Commonwealth Parliament would thus have almost unlimited 721 See above at [601]. 722 Le Mesurier v Connor (1929) 42 CLR 481 at 497 per Knox CJ, Rich and Dixon JJ; [1929] HCA 41. 723 (1945) 71 CLR 237 at 270. 724 Attorney-General (Vict) v The Commonwealth (1945) 71 CLR 237 at 263. legislative power. The careful delimitation of Commonwealth powers made by the Constitution prevents the adoption of such an opinion." Here the rights of intended recipients to be paid the tax bonuses and the obligation on the Commissioner to pay them arise from the Tax Bonus Act. The point of seeking to appropriate the necessary monies by the standing appropriation in s 16 of the Taxation Administration Act was to enable those rights to be vindicated and that obligation to be carried out. The rights to be paid and the obligation to pay cannot be incidental to the appropriation which enables the rights to be vindicated and the obligation to be fulfilled. VALID APPROPRIATION Question 3 in the Special Case is set out above725. Since it cannot be said that the plaintiff was "entitled" to payment of the tax bonus under the Tax Bonus Act, because that Act is invalid, this question does not arise. CONCLUSION The questions in the Special Case should have been answered: Yes. Does not arise. In accordance with the agreement of the parties announced on the second day of the hearing of the Special Case, there is no order for costs. |
HIGH COURT OF AUSTRALIA PLAINTIFF M64/2015 PLAINTIFF AND MINISTER FOR IMMIGRATION AND BORDER PROTECTION DEFENDANT Plaintiff M64/2015 v Minister for Immigration and Border Protection [2015] HCA 50 17 December 2015 ORDER The questions asked by the parties in the special case dated 28 August 2015 and referred for consideration by the Full Court be answered as follows: Question 1 Did the Delegate: construe clause 202.222(2)(d) of Schedule 2 to the Migration Regulations 1994 (Cth) as requiring or permitting him to consider the capacity of Australia to resettle all applicants who apply for a fail to construe clause 202.222(2)(d) as requiring him to consider the capacity of the Australian community to provide for the permanent settlement in Australia of each of the Visa Applicants, or persons such as each of the Visa Applicants, having regard to their individual circumstances; or fail to construe clause 202.222(2) as requiring him to assess whether or not for giving special consideration to granting permanent visas to the Visa Applicants in there were compelling reasons the circumstances of the particular case, having regard to all of the matters in 202.222(2)(a) to (d) both individually and cumulatively? Answer Yes. (b) No. Question 2 If so, did the Delegate thereby make a jurisdictional error? Answer Question 3 In deciding whether he was satisfied that the Visa Applicants satisfied clause 202.222(2) of Schedule 2 to the Regulations, was the Delegate bound not to consider: the number of 'places' available in the SHP; or the 'priorities' set by the government within the SHP? Answer (a) No. (b) No. Question 4 If so, did the Delegate consider either or both of those matters, and thereby make a jurisdictional error? Answer Unnecessary to answer. Question 5 In deciding whether he was satisfied that the Visa Applicants satisfied the criterion in clause 202.222(2) of Schedule 2 to the Regulations, did the Delegate apply the policy stated in the relevant parts of the Department's Procedures Advice Manual (being Attachment G, sections 71.2, 71.4 and 71.6 and Attachment H, section 7.2) (the Policy)? Answer Yes. Question 6 If so: (a) was the Policy inconsistent with the [Migration Act 1958 (Cth)] and Regulations; or did the Delegate apply the Policy inflexibly without regard to the merits or circumstances of the case; and did the Delegate thereby make a jurisdictional error? Answer (a) No. (b) No. It is unnecessary to answer the rest of Question 6. Question 7 What, if any, relief should be granted? Answer None. The proceedings should be dismissed. Question 8 Who should pay the costs of the special case? Answer The plaintiff. Representation C J Horan with K E Grinberg for the plaintiff (instructed by Russell Kennedy Pty Ltd) S P Donaghue QC with N M Wood for the defendant (instructed by Australian Government Solicitor) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Plaintiff M64/2015 v Minister for Immigration and Border Protection Migration β Visa application β Clause 202.222(2) of Sched 2 to Migration Regulations 1994 (Cth) provides for grant of Refugee and Humanitarian (Class XB) (Subclass 202) visa if Minister satisfied there are compelling reasons for giving special consideration to granting visa β Where applications for Subclass 202 visas refused by delegate of Minister β Where delegate considered capacity of Australian community to permanently settle visa applicants β Where delegate considered departmental policy that established priorities to be accorded to visa applications β Construction of cl 202.222(2) β Whether decision affected by jurisdictional error. Words and phrases β "irrelevant considerations", "jurisdictional error", "priorities policy", "special consideration". "compelling "capacity", reasons", Migration Regulations 1994 (Cth), Sched 2, cl 202.222(2). FRENCH CJ, BELL, KEANE AND GORDON JJ. The plaintiff is a citizen of Afghanistan born on 20 April 1994. In 2003, the plaintiff and his family, who are of Hazara ethnicity, fled from Afghanistan to Iran. In early 2010, the plaintiff was arrested in Iran as an undocumented immigrant and was deported to Afghanistan. The plaintiff's family remained in Iran. On 29 May 2010, the plaintiff entered Australia as an unaccompanied minor at an "excised offshore place" within the meaning of the Migration Act 1958 (Cth) ("the Act"). Upon his arrival in Australia, he became an "unlawful non-citizen" and an "offshore entry person" within the meaning of the Act as it then stood. On 18 August 2011, the plaintiff was granted a Protection (Class XA) (Subclass 866) visa by the defendant ("the Minister"). Subsequently, the plaintiff's mother and three younger brothers ("the Visa Applicants") applied for Refugee and Humanitarian (Class XB) (Subclass 202) visas under the Australian Government's Special Humanitarian Programme. The plaintiff proposed the Visa Applicants for entry into Australia in accordance with the Migration Regulations 1994 (Cth) ("the Regulations"). The application was refused by a delegate of the Minister ("the Delegate"). The plaintiff then commenced proceedings in the original jurisdiction of this Court pursuant to s 75(v) of the Constitution, seeking certiorari to quash the Delegate's decision to refuse to grant the visas, and mandamus to require the Minister to determine the application according to law. The plaintiff contends that the decision of the Delegate was affected by one or more jurisdictional errors. The plaintiff argued that the Delegate misconstrued and misapplied the regulation pursuant to which the application was determined, and that the Delegate unlawfully applied a departmental policy which was inconsistent with the requirements of the Act and the Regulations, or applied that policy inflexibly and without regard to the merits of the particular application. The policy required that the lowest priority be accorded to the application on the basis of the type of visa that the plaintiff had been granted, and the circumstance that he arrived in Australia as an "irregular maritime arrival". The parties agreed to state a number of questions for determination by this Court, in the form of a special case, with a view to resolving the plaintiff's challenge to the Delegate's decision. Before considering the parties' arguments, it is necessary to give a brief description of the programme under which the visas were sought, the terms of the application, and the basis for, and the detail of, the Delegate's decision to refuse it. Bell Gordon Australia's Humanitarian Programme Australia's Humanitarian Programme is the component of Australia's Immigration Programme that provides for the immigration of refugees and people in refugee-like situations. The offshore component of the Humanitarian Programme has two categories: "Refugee" and "Special Humanitarian Programme" ("SHP"). The Refugee category comprises four visa subclasses: Refugee (Subclass 200), In-country Special Humanitarian (Subclass 201), Emergency Rescue (Subclass 203) and Woman at Risk (Subclass 204). The SHP category comprises one visa subclass: Global Special Humanitarian (Subclass 202). The Refugee and Humanitarian (Class XB) (Subclass 202) visa ("Subclass 202 visa"), sometimes referred to as a "split family visa", is directed to the immigration of people who are subject to substantial discrimination amounting to gross violation of their human rights in their home country, and who are members of the immediate family of a person in Australia who has already been granted a Subclass 202 visa, or has been granted a Protection (Class XA) (Class CD) (Subclass 866) visa or a Resolution of Status (Subclass 851) visa. Each year, the Australian Government consults with State and Territory governments, peak refugee and humanitarian bodies, the United Nations High Commissioner for Refugees ("the UNHCR"), and the public, and makes a decision as to the size and composition of the Humanitarian Programme. In the 2014-2015 financial year, the Humanitarian Programme would comprise 13,750 places, including a minimum of 11,000 places for offshore applicants. On 17 August 2014, the Minister announced that 5,000 places would be allocated to the SHP category in 2014-2015. A minimum of 4,400 places were committed for persons affected by the conflicts in Iraq and Syria, and those places were to be provided predominantly out of the SHP allowance. the Australian Government decided that The visa application On 5 December 2011, the Visa Applicants applied for Subclass 202 visas as prescribed the Regulations ("the Visa Application"). The plaintiff proposed the Visa Applicants for entry into Australia in accordance with approved form 681 and cl 202.211(2) of Sched 2 to the Regulations. item 1402 of Sched 1 The plaintiff's proposal contained information that assistance would be provided to the Visa Applicants by way of permanent housing in Australia. In December 2011, the plaintiff's carer sent a letter to the Department of Immigration and Citizenship (now the Department of Immigration and Border Bell Gordon Protection) ("the Department") in support of the Visa Application. On 19 April 2012, The Victorian Foundation for Survivors of Torture Inc, known as Foundation House, sent a letter to the Department in support of the Visa Application to the effect that the plaintiff's mental health would "significantly improve" if the Visa Applicants were granted protection in Australia. On 31 May 2012, the plaintiff's carer sent a further letter to the Department, requesting that the processing of the Visa Application be expedited. On 2 April 2014, the Department sent a letter to the plaintiff's mother, care of the plaintiff, outlining changes affecting the assessment of the Visa Application and requesting additional information. On 21 May 2014, the Flemington and Kensington Community Legal Centre, on behalf of the plaintiff's mother, sent a letter to the Department providing further information in support of the Visa Application and confirming, in particular, the ongoing support of the plaintiff's carer and her willingness "to help settle the family", and stating that the family would live in Melbourne, "where there is a lively and close Hazara community which will embrace and support the family as they settle into Australia". The Delegate's decision Clause 202.222(2) The Visa Application was decided under cl 202.222(2) of Sched 2 to the Regulations. The terms of cl 202.222(2) have varied over time, but it is common ground that, at the relevant time, it provided for the grant of a visa if: "the Minister is satisfied that there are compelling reasons for giving special consideration to granting the applicant a permanent visa, having regard to: the degree of discrimination to which the applicant is subject in the applicant's home country; and the extent of the applicant's connection with Australia; and (c) whether or not there is any suitable country available, other than Australia, that can provide for the applicant's settlement and protection from discrimination; and the capacity of the Australian community to provide for the permanent settlement of persons such as the applicant in Australia." Bell Gordon The SHP "processing priorities" On 12 December 2013, the Minister made an adjustment to what were described as the "processing priorities" for applications in the SHP. The proposed changes were outlined in a submission from the Department to the Minister annexed to the special case. The changes, which took effect from 22 March 2014, did not alter the order in which applications were considered, but provided for five categories of priority for the grant of applications. The "processing priorities within the SHP", as they became, were, in descending order of priority, as follows: applicants proposed by an immediate or 'split' family member who holds a Refugee and Humanitarian (Class XB) (subclass 202) visa; applicants proposed by a close family member (a sibling, parent, partner or child) who does not hold a Protection (Class XA) (Subclass 866) visa or a Resolution of Status (Class CD) (Subclass 851) visa; applicants proposed by an extended family member (a grandparent, grandchild, aunt, uncle, niece, nephew or cousin) who does not hold a Protection (Class XA) (Subclass 866) visa or Resolution of Status (Class CD) (Subclass 851) visa; applicants proposed by a friend or distant relative who does not hold a Protection (Class XA) (Subclass 866) visa or a Resolution of Status (Class CD) (Subclass 851) visa or by an organisation operating in Australia; any application proposed by or on behalf of a person who holds a Protection (Class XA) (Subclass 866) visa or a Resolution of Status (Class CD) (Subclass 851) visa, or who arrived as an 'irregular maritime arrival' prior to 13 August 2012." Because the Visa Application was proposed by the plaintiff, who is a person who holds a Protection (Class XA) (Subclass 866) visa and who arrived as an irregular maritime arrival prior to 13 August 2012, the Visa Application was accorded the lowest of these priorities. Departmental information about the "priorities" in relation to Subclass 202 visas was set out in the Department's Procedures Advice Manual 3 ("the PAM 3"), which was also annexed to the special case. The PAM 3, referring to the "compelling reasons" criterion in cl 202.222(2), stated that: Bell Gordon "It is a reality of the global situation that every year many more persons apply for a [Subclass 202] visa than Australia has the capacity to accept. From a pool of many applicants, officers must ensure that the limited resettlement places available each year are offered to those applicants for whom there are compelling reasons for resettlement. This is, by necessity, a subjective process. The 4 factors [in cl 202.222(2)] should be considered both individually and cumulatively. ... When assessing the 'compelling reasons' criterion, officers should be aware of the following background: the Government's current priorities for resettlement of persons under the humanitarian program, as announced each year, including the number of visa places available under the refugee and special humanitarian program categories". The PAM 3 noted that in exceptional circumstances individual applications may be given a higher priority. The decision letter By letter to the plaintiff's mother dated 16 September 2014, the Delegate informed the Visa Applicants that the Visa Application had been refused ("the Delegate's letter"). The Delegate said that he was not satisfied that there were compelling reasons for giving special consideration to granting Subclass 202 visas to the Visa Applicants. The parties' arguments made extensive reference to this letter; it is therefore convenient to set out the passages that were said to be relevant. The Delegate referred to cl 202.222(2) and said: "The assessment of the four (4) factors included in the compelling reasons criteria is made in the context of the Government's annual decision on the size of the Humanitarian Programme, and the reality of a very large number of applicants who are subject to persecution or substantial discrimination. On 1 July 2014 there were over 45,000 applicants awaiting a decision in the Special Humanitarian Programme with only 5,000 places available in the 2014-15 programme year. Most applicants have close family in Australia and have suffered some form of discrimination or persecution. Bell Gordon I have considered all the information provided for the purposes of this visa application. I acknowledge you and your family have strong links to Australia and that there is no other suitable country available for resettlement. I accept that you are subject to a significant degree of discrimination in your home country. I have also considered that Australia does not have the capacity to resettle all applicants who apply for a humanitarian visa at this time. Every year many more people apply to be resettled in Australia than we can accept. In 2013-14, more than 63,000 people applied and 11,000 were accepted. On 1 July 2014 there were over 45,000 applicants, including close family members of Australian proposers, awaiting a visa decision, with only around 5,000 places available in the Special Humanitarian Programme for 2014-15. While most applicants have suffered some form of discrimination or persecution, the limited number of visas available and the high demand for them mean that only a small proportion of applicants can be successful. The government has decided that the fairest way to deal with applications is to give priority to applicants who are outside their home country and are either assessed as refugees by the [UNHCR] and formally referred to Australia for resettlement, or proposed by very close family members under the [SHP]. Weighing all these factors I am not satisfied that there are compelling reasons for giving special consideration to granting you and your family a Class XB visa. As we can accept only a small number of applicants, the government has set priorities within the [SHP]. Only the highest priority applications will be successful because there are not enough visas available. Australia does not have the capacity to provide for permanent settlement of all close family proposed applicants at this time. I appreciate that you wish to resettle in Australia, and I understand you will be disappointed with this decision. I assure you that I considered all the information included in your application." Bell Gordon In addition, on 16 September 2014, the Delegate made an entry into the case notes field of the Department's "Immigration Records Information System" to which the parties referred in the course of their arguments. The Minister accepted that it may be inferred that, as the plaintiff contended, the Delegate assessed the Visa Application as one that ought to receive the lowest "priority". Questions for determination Pursuant to r 27.08 of the High Court Rules 2004 (Cth), the parties agreed upon questions for determination by this Court in a special case and the facts relevant to those questions. The questions posed for the opinion of this Court are: Did the Delegate: construe cl 202.222(2)(d) as requiring or permitting him to consider the capacity of Australia to resettle all applicants who apply for a fail to construe cl 202.222(2)(d) as requiring him to consider the capacity of the Australian community to provide for the permanent settlement in Australia of each of the Visa Applicants, or persons such as each of the Visa Applicants, having regard to their individual circumstances; or fail to construe cl 202.222(2) as requiring him to assess whether or not there were compelling reasons for giving special consideration to granting permanent visas to the Visa Applicants in the circumstances of the particular case, having regard to all of the matters individually and cumulatively? in cl 202.222(2)(a) (d) both If so, did the Delegate thereby make a jurisdictional error? In deciding whether he was satisfied that the Visa Applicants satisfied cl 202.222(2), was the Delegate bound not to consider: the number of "places" available in the SHP; or the "priorities" set by the Government within the SHP? Bell Gordon If so, did the Delegate consider either or both of those matters, and thereby make a jurisdictional error? In deciding whether he was satisfied that the Visa Applicants satisfied the criterion in cl 202.222(2), did the Delegate apply the policy stated in the relevant parts of the PAM 3? If so: (a) was the PAM 3 inconsistent with the Act and the Regulations; or did the Delegate apply the PAM 3 inflexibly without regard to the merits or circumstances of the case; and did the Delegate thereby make a jurisdictional error? 7. What, if any, relief should be granted? 8. Who should pay the costs of the special case? The limited scope of the judicial review It is necessary to make some preliminary observations in relation to the constraints within which the plaintiff's challenge to the validity of the Delegate's decision falls to be determined. These constraints are aspects of the scope of judicial review of administrative action, which is confined to the legality of the Delegate's decision. In particular, judicial review is concerned with whether the Delegate's decision was one which he was authorised to make; it is not1: "an appellate procedure enabling either a general review of the β¦ decision β¦ or a substitution of the β¦ decision which the β¦ court thinks should have been made." First, the burden is upon the plaintiff to demonstrate that the Delegate's decision was affected by jurisdictional error. The plaintiff must show that the approach adopted by the Delegate "manifest[ed] a legally erroneous view as to 1 Craig v South Australia (1995) 184 CLR 163 at 175; [1995] HCA 58. See also Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 41-42; [1986] HCA 40; Attorney-General (NSW) v Quin (1990) 170 CLR 1 at 35-36; [1990] HCA 21. Bell Gordon what it was about which [he] needed to be satisfied"2, so that the Delegate lacked legal authority to make the decision that was made3. It is well settled that in the context of administrative decision-making, the court is not astute to discern error in a statement by an administrative officer which was not, and was not intended to be, a statement of reasons for a decision that is a broad administrative evaluation rather than a judicial decision4. It is possible that error of law on the part of the Delegate might be demonstrated by inference from what the Delegate said by way of explanation of his decision; but it must be borne in mind that the Delegate was not duty-bound to give reasons for his decision5, and so it is difficult to draw an inference that the decision has been attended by an error of law from what has not been said by the Delegate6. Further, "jurisdictional error may include ignoring relevant material in a way that affects the exercise of a power"7; but here the plaintiff does not show that relevant material was ignored simply by pointing out that it was not mentioned by the Delegate, who was not obliged to give comprehensive reasons for his decision. Further, the Delegate's letter is "not to be scrutinised upon over-zealous judicial review by seeking to discern whether some inadequacy may be gleaned from the way in which the reasons are expressed"8. 2 Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 at 629 [55]; [1999] HCA 21. 3 Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 at 351 [82]; [2001] HCA 30. 4 Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 271-272, 278, 282; [1996] HCA 6. 5 Migration Act 1958 (Cth), s 66(2)(c) and (3). 6 Minister for Immigration and Citizenship v SZGUR (2011) 241 CLR 594 at 605-606 [31]-[33], 615-618 [66]-[73]; [2011] HCA 1. 7 Minister for Immigration and Citizenship v SZJSS (2010) 243 CLR 164 at 175 [27]; [2010] HCA 48; see also Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 at 351-352 [82]-[84]. 8 Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 Bell Gordon Secondly, the formation by the Delegate of the state of satisfaction required by cl 202.222(2) establishes whether a visa is to be granted. That state of mind is not readily seen as a jurisdictional fact upon which the Delegate's authority to enter upon the determination of the application depends9. A complaint about the result of the exercise by the Delegate of his authority is not a complaint about the non-existence of that authority10. Accordingly, there may be a question as to whether any demonstrated error on the part of the Delegate in deciding the application was such as to vitiate his authority to decide whether or not to grant the visas. As will appear, however, the plaintiff's challenge fails at the point of demonstrating any error of law on the part of the Delegate so that it is unnecessary to delve further into the subtleties encompassed in the concept of jurisdictional error11. In addition to the limited scope of judicial review, it is also to be noted that the arguments advanced by the plaintiff asserted error of law in relation to the Delegate's understanding of cl 202.222(2) and his application of that provision by reference to the priorities policy adopted by the Minister. No case was advanced that the Delegate's decision was vitiated by a failure to accord the plaintiff or the Visa Applicants procedural fairness. For the sake of coherence in addressing the issues raised by the agreed questions, it is convenient to marshal the arguments addressed by the parties under three broad headings. While there is some overlap of the arguments relating to the various questions, the groupings will aid focus and, to some extent, reduce repetition. Under the heading "Clause 202.222(2): its proper construction and application" will be grouped the arguments which bear upon Questions 1 and 2. Under the heading "Irrelevant considerations" will be grouped the arguments relevant to Questions 3 and 4. Under the heading "The priorities" will be grouped the arguments relevant to Questions 5 and 6. 9 Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 10 Parisienne Basket Shoes Pty Ltd v Whyte (1938) 59 CLR 369 at 391; [1938] HCA 11 cf Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82 at 141 [163]; [2000] HCA 57; Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 at 350-351 [81]-[82]. Frankfurter J famously described the concept of jurisdictional error as a "verbal coat of too many colors": United States v L A Tucker Truck Lines Inc 344 US 33 at 39 (1952). Bell Gordon Clause 202.222(2): its proper construction and application Four criteria or one criterion The plaintiff argued that the Delegate's letter contains positive findings made by the Delegate in respect of each of the factors enumerated in cl 202.222(2)(a), (b) and (c). It was said that the Delegate found that the Visa Applicants were subject to a "significant degree" of discrimination in their home country, that they had "strong links to Australia" and that there was "no other suitable country available for resettlement". Accordingly, in the plaintiff's submission, the issue on which the Delegate's determination turned was cl 202.222(2)(d): "the capacity of the Australian community to provide for the permanent settlement of persons such as the applicant in Australia". The plaintiff submitted that the Delegate's view that "Australia does not have the capacity to resettle all applicants who apply for a humanitarian visa at this time" and "only a small proportion of applicants can be successful" erroneously treated par (d) as determinative of the outcome of the Visa Application, rather than as one factor to be weighed in applying cl 202.222(2). The plaintiff's submission misunderstands the operation of cl 202.222(2). Clause 202.222(2) does not state several criteria by reference to which the decision is to be made: it raises only one criterion for the grant of the relevant visa. That criterion is that the Minister (or a delegate) is "satisfied" that "there are compelling reasons for giving special consideration to granting the applicant a permanent visa". As was the case in Minister for Immigration and Ethnic Affairs v Wu Shan Liang12, the nature of the decision entrusted to the Delegate was not a "determination" but, rather, "satisfaction". That state of satisfaction must be informed by the factors mentioned in pars (a) to (d), to which the Minister must have regard in making the single evaluation required in order to grant a Subclass 202 visa. It is, therefore, wrong to speak of findings that the Visa Application "satisfied" pars (a), (b) and (c). And, in truth, the terms of the Delegate's letter do not suggest that the Delegate approached his task as a matter of making findings about separate criteria rather than taking the factors into account in reaching his decision. In addition, the state of mind required of the Minister (or a delegate) must be reached by reference to "reasons" that are "compelling"; that is, those reasons 12 (1996) 185 CLR 259 at 271. Bell Gordon must "force or drive the decision-maker"13 "irresistibly"14 to be satisfied that "special consideration" should be given to granting the particular application. Paragraphs (a), (b) and (c) of cl 202.222(2) may be met by an applicant in a general way, but the reasons why that is so may not be sufficiently compelling to satisfy the Minister that "special consideration" should be given to granting the application. The rationale of the criterion of "compelling reasons for giving special consideration" is that there are, indeed, more applicants in the general category of persons described in pars (a), (b) and (c) than can, in the Government's judgment, be settled permanently within the Australian community. To accept that this is so does not mean, as the plaintiff argued, that the Delegate effectively treated the limits on Australia's capacity as leaving no room for the operation of the factors specified in cl 202.222(2)(a) to (c) in the circumstances of this particular case. The plaintiff's argument that the Delegate failed to construe cl 202.222(2) as requiring him to have regard to all of the matters in cl 202.222(2)(a) to (d) individually and cumulatively must be rejected. The meaning of cl 202.222(2)(d) The plaintiff also argued that a misunderstanding of cl 202.222(2)(d) is demonstrated by the circumstance that the Delegate, in his letter of 16 September 2014, spoke of having: "considered that Australia does not have the capacity to resettle all applicants who apply for a humanitarian visa at this time. β¦ Australia does not have the capacity to provide for permanent settlement of all close family proposed applicants at this time." In particular, the plaintiff argued that the Delegate misconstrued par (d) as referring to "Australia's" capacity to resettle all applicants for Subclass 202 visas, rather than the "Australian community's" capacity to resettle persons such as the particular Visa Applicants in Australia. The plaintiff argued that par (d) should be understood as referring to the "settlement of the applicant" not to "all applicants who apply for a humanitarian visa". On this basis, it was said that the Delegate failed to give proper consideration to the individual circumstances of 13 Babicci v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 141 FCR 285 at 289 [21]. 14 Paduano v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 143 FCR 204 at 211 [32], 213 [37]. Bell Gordon the Visa Applicants. And in this regard, the plaintiff emphasised that the Delegate's letter contains no reference to the support available to the Visa Applicants which was apparent in the material before the Delegate, including in the letters from the plaintiff's carer, from Foundation House and from the Flemington and Kensington Community Legal Centre. In the plaintiff's submission, that material was directly relevant and not so "insignificant that the failure to take it into account could not have materially affected the decision"15. The Minister submitted that the plaintiff identified no basis upon which this Court might conclude that the Delegate did not consider all of the evidence provided in support of the Visa Application, especially given the Delegate's express assurances in his letter that he had done so. It was said that the onus of establishing that fact is upon the plaintiff, and in circumstances where the Delegate's letter cannot be taken as comprehensive reasons for decision, a finding to that effect is not open to the Court. The plaintiff's scrutiny of the Delegate's letter as if it were a comprehensive statement of his reasons concerned to make findings as to the various matters referred to in cl 202.222(2)(a) to (d) does not expose error by the Delegate. As noted above, by reason of s 66(2)(c) and (3) of the Act, the Delegate was not required to give a statement of reasons in relation to his decision to refuse the Visa Application. It is apparent from the Delegate's letter that the Delegate considered the Visa Application taking account of each of the four matters specified in pars (a) to (d) of cl 202.222(2). The plaintiff cannot invite the inference that an erroneous view has been taken of some material aspect of the matter simply because that aspect has not been expressly addressed and made the subject of findings. As to the plaintiff's attempt to seize upon the reference to "Australia" in the letter, as opposed to the "Australian community" in par (d), on any fair reading of the letter, there is no reason to think that the Delegate used the word "Australia" in contradistinction to the "Australian community". In addition, the Delegate did not err in construing par (d) of cl 202.222(2) as referring to the capacity of Australia to settle permanently persons who, like the Visa Applicants, might fall within pars (a), (b) and (c). The Delegate's approach conformed to both the letter and the substance of the provision. The plaintiff's argument fails to acknowledge that the occasion for having regard to cl 202.222(2)(d) is the making of a determination as to whether there 15 Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 40. Bell Gordon are "compelling reasons for giving special consideration to granting the applicant a permanent visa". To give "special consideration" is to distinguish the application for the grant of a visa from the general run of candidates who, individually, might have merit under cl 202.222(2)(a) to (c). The Australian community's "capacity" to provide for the permanent resettlement of such persons who apply for Subclass 202 visas is a factor in the assessment of whether there are "compelling reasons for giving special consideration" to granting permanent visas to the Visa Applicants. This is because cl 202.222(2)(d), in referring to "persons such as the applicant", is naturally apt to include all persons who may qualify for the same visa. An evaluation of "the capacity of the Australian community to provide for the permanent settlement of persons such as the applicant in Australia" involves an evaluation that is so open-textured that it may be doubted whether a challenge to its correctness is viable at all unless a misunderstanding of this factor on the part of the decision-maker can be demonstrated by reference to what the decision-maker has actually said on that subject. In this case, the plaintiff asserted that an error of this kind may be inferred from the circumstance that material was placed before the Delegate about the support that would be available to the Visa Applicants should they be permitted to come to Australia, and so only if the Delegate had misunderstood par (d) could he have concluded that the Australian community does not have the capacity to provide for the permanent settlement of the Visa Applicants in Australia. But this argument itself depends upon the premise that par (d) is concerned only with the availability in Australia of sources of support for, and accommodation of, the Visa Applicants. That premise is not supported by the language of the paragraph. for to provide their permanent The issue is not whether arrangements can be made to feed, clothe and house the Visa Applicants by relying upon the support of the plaintiff's carer and the local Hazara community. The issue is as to the capacity of the Australian community in Australia. Clause 202.222(2) authorises the decision-maker to consider a wide range of matters which bear upon their successful absorption into the Australian community, including, but not limited to, their likely ability to support themselves, and the effect that the exercise of that ability is likely to have upon others in the community. Concerns such as these are comprehended in the notion of "provid[ing] for ... permanent settlement β¦ in Australia", that is, as members of the Australian community. These concerns are not apt to be resolved by arrangements for the provision of accommodation and support to the Visa Applicants. settlement Bell Gordon Irrelevant considerations The plaintiff submitted that, in considering cl 202.222(2)(d), the Delegate took into account irrelevant considerations. These considerations were said to be the "5,000 places available in the Special Humanitarian Programme for 2014-15", "the limited number of visas available and the high demand for them", the assertion that "only a small proportion of applicants can be successful", and that "[o]nly the highest priority applications will be successful because there are not enough visas available". The plaintiff argued that the Delegate treated the number of places and visas available as an informal cap or quota on the grant of Subclass 202 visas. This was said to be an irrelevant consideration because the Minister had not utilised the statutory mechanisms16 in the Act and the Regulations to impose a limit on the number of such visas that may be granted. The plaintiff also argued that, insofar as the priorities policy is an attempt to implement an informal administrative cap or quota on the number of Subclass 202 visas, it is inconsistent with the statutory mechanism for implementing a formal cap or quota. These arguments cannot be accepted. The plaintiff's characterisation of the Government's decision to allocate 5,000 "places" in the SHP as an informal cap or quota is misconceived. It is true that the Minister did not exercise the statutory power to determine the maximum number of Subclass 202 visas that could be granted in a specified year, but the effect of the priorities policy on the Delegate's consideration of cl 202.222(2)(d) was not equivalent to a "cap" or "quota" fixed under s 85 of the Act. If a cap is fixed under s 85, then once that cap is reached in any given year, all outstanding applications are deemed not to have been made and affected applicants would be required to recommence the Clause 202.222(2)(d) there are "compelling reasons for giving special consideration" to granting a visa, taking requires consideration of whether 16 Section 85 of the Act empowers the Minister to limit the number of visas of a specified class that may be granted in a financial year. Section 39 of the Act and cl 202.226 of Sched 2 to the Regulations empower the Minister to fix the number of Subclass 202 visas that may be granted in a financial year by legislative instrument. 17 Plaintiff S297/2013 v Minister for Immigration and Border Protection (2014) 88 ALJR 722 at 729-730 [38]-[45]; 309 ALR 209 at 218-219; [2014] HCA 24. Bell Gordon into account the decisions and guidance of the Australian Government. Choices must necessarily be made in deciding which applicants should be given special consideration. Whether there are compelling reasons for making a particular choice may be affected by the number of available places. The number of available places in the SHP affects how compelling a case must be to distinguish an application requiring special consideration from the others which are generally worthy of consideration under pars (a), (b) and (c) of cl 202.222(2). The priorities The plaintiff submitted that the priorities policy is inconsistent with the Act and the Regulations. Further, it was said that the Delegate inflexibly applied the priorities policy without regard to the merits of the Visa Application. As to the first of these arguments, the plaintiff said that the instruction to officers given in the PAM 3 to consider the "stated Government priorities" when assessing the capacity of the Australian community in cl 202.222(2)(d) is inconsistent with the factors prescribed for consideration by cl 202.222(2). In particular, it was said that the priority category to which the plaintiff belongs is unrelated to any characteristic of a visa applicant (as opposed to the person who proposed the application); that it is irrelevant to the Australian community's capacity to resettle persons such as the visa applicant; and that it is, in effect, a punishment of the plaintiff imposed by reason of the circumstances of his arrival in Australia. As to the second argument, it was said that cl 202.222(2) does not contemplate that the Minister may "quarantine" a category of applicants without regard to the circumstances of a particular application. Inconsistency and irrationality The priorities policy is not inconsistent with cl 202.222(2). Rather, it is apt to inform the evaluation required to be satisfied that there are "compelling reasons for giving special consideration" to an application which can be seen to attract general consideration under pars (a) to (c). And the plaintiff's submissions that the "priorities" are irrelevant to the issues which arise under cl 202.222(2) or are in some way designed to "visit a punitive consequence" on irregular maritime arrivals cannot be sustained. The evident rationale of the priorities policy is that no-one should receive a migration advantage as a result of arriving in Australia as an irregular maritime arrival. Whether or not one agrees with that rationale as a matter of policy, it is the subclause not inconsistent with cl 202.222(2). As already noted, Bell Gordon contemplates a process of differentiation to separate the special from the general run of applicants who are candidates under pars (a), (b) and (c). Further, there is no suggestion that the application of the priorities policy means that any visa places allocated to the SHP are not filled. The policy means only that, in conducting the evaluation of whether there are compelling reasons for giving special consideration to the grant of a visa, an advantage will be conferred on an applicant whose application was proposed by a person who arrived in Australia in a "regular", rather than "irregular", fashion. The breadth of the evaluative judgment authorised by cl 202.222(2) can accommodate a consideration of the manner in which the proposer of a visa came to Australia. Consideration of that factor as an aspect of government policy is not inconsistent with either the text or purpose of cl 202.222(2). If numerous applications are otherwise compelling in terms of the criteria in cl 202.222(2), it is not irrational, or unreasonable, or punitive to prefer an application from the family of a proposer who came to Australia by regular means over an application from the family of a proposer who came to Australia as an irregular maritime arrival. It is not irrational that the former application might be regarded as of a kind which should be encouraged in preference to others. There is nothing irrational or unreasonable about preferring the former application over the latter where it is impossible, or simply invidious, to attempt to distinguish between them on other, more subjective grounds. It must also be said that to separate those with a compelling claim to special consideration from all those who generally have merit under pars (a), (b) and (c) by reference to the circumstances of the arrival in Australia of the proposer is not to punish those whose proposer arrived in circumstances not favoured by Australian law18: it is simply to recognise that not every applicant for a visa can obtain that advantage, and that the choice to be made may reflect a view that some applications are more compelling than others because of the circumstances of the proposer. Inflexibility In relation to the plaintiff's submission that the Delegate impermissibly treated the priorities policy as a fetter on the exercise of his discretion, it was said that any application of an administrative policy "must admit of the possibility of 18 Migration Act 1958 (Cth), s 42(1), which provides relevantly that "a non-citizen must not travel to Australia without a visa that is in effect." Bell Gordon exception depending upon the circumstances of a particular case"19 and must not be such as to20: "preclude the person on whom the power is conferred from departing from the policy or from taking into account circumstances which are relevant to the particular case in relation to which the discretion is being exercised. If such an inflexible and invariable policy is adopted, both the policy and the decisions taken pursuant to it will be unlawful". The plaintiff argued that the Delegate's letter revealed that the priorities policy was inflexibly applied without proper regard to the circumstances or merits of the individual case. Once again, the plaintiff's argument fails to appreciate that the application of cl 202.222(2) involves an evaluative judgment as to whether the Minister is satisfied that there are "compelling reasons for giving special consideration". The priorities policy assists in informing that evaluative judgment but, as the PAM 3 noted, exceptions might apply. Policy guidelines like the priorities policy promote values of consistency and rationality in decision-making, and the principle that administrative decision-makers should treat like cases alike21. In particular, policies or guidelines may help to promote consistency in "high volume decision-making"22, such as the determination of applications for Subclass 202 visas. Thus in Re Drake and Minister for Immigration and Ethnic Affairs (No 2)23, Brennan J, as President of the Administrative Appeals Tribunal, said that "[n]ot only is it lawful for the Minister to form a guiding policy; its promulgation is desirable" because the adoption of a guiding policy serves, among other things, to assure the integrity of administrative decision-making by "diminishing the importance of 19 Seiffert v Prisoners Review Board [2011] WASCA 148 at [124]. 20 R v Secretary of State for the Home Department; Ex parte Venables [1998] AC 407 at 497, cited by Gleeson CJ in NEAT Domestic Trading Pty Ltd v AWB Ltd (2003) 216 CLR 277 at 287 [17]; [2003] HCA 35. 21 R v Anderson; Ex parte Ipec-Air Pty Ltd (1965) 113 CLR 177 at 201-202, 204-205; [1965] HCA 27; Nevistic v Minister for Immigration and Ethnic Affairs (1981) 34 ALR 639 at 646-647. 22 Minister for Immigration, Local Government and Ethnic Affairs v Gray (1994) 50 FCR 189 at 206. 23 (1979) 2 ALD 634 at 642. Bell Gordon individual predilection" and "the inconsistencies which might otherwise appear in a series of decisions"24. The subjectivity of the evaluation by a decision-maker in a case such as the present highlights the importance of guidelines. The importance of avoiding individual predilection and inconsistency in making choices between a large number of generally qualified candidates by the application of the open-textured criterion of "compelling reasons for giving special consideration" is readily apparent. The plaintiff observed that there was nothing in the Delegate's letter that revealed any consideration of whether the particular circumstances of this case should give rise to an exception to the application of the "priorities". But to say this is not to demonstrate that consideration was not given to that possibility. It cannot be inferred that the Delegate ignored evidence that the Visa Applicants were exposed to a degree of discrimination in their home country which was so serious relative to the generality of applicants for a visa, or that the extent of their connection with Australia was so strong relative to the generality of applicants, that a reasonable decision-maker would disregard the priorities policy. Understandably, the plaintiff did not attempt the difficult task of demonstrating that the circumstances of the Visa Applicants were so compelling in terms of their connection with Australia, and so grave in terms of their situation in Iran, that, on any reasonable assessment, their claim to a grant of visas overwhelmed that of all other applicants who are worthy candidates under pars (a), (b) and (c) and who stand higher than them under the priorities policy. It may be said that the difficulty of demonstrating that the decision of the Delegate lacked an "evident and intelligible justification"25 is a virtually insuperable hurdle for the plaintiff, but to say that is to acknowledge the broad and subjective evaluation required in the application of cl 202.222(2) and the difficulty of distinguishing between all the applications which have merit in terms of pars (a), (b) and (c). The plaintiff also fixed on the statement in the penultimate paragraph of the excerpt from the Delegate's letter set out above β "[o]nly the highest priority applications will be successful" β and asserted that it demonstrates that the 24 Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 25 Minister for Immigration and Citizenship v Li (2013) 249 CLR 332 at 367 [76]; [2013] HCA 18. Bell Gordon priorities policy was applied inflexibly. This statement does not establish the plaintiff's contention. It may be accepted that the priorities policy could not lawfully be applied rigidly so as to preclude the consideration by the Delegate of the circumstances of each applicant. But the departmental policy referred to in the PAM 3 contemplated that the circumstances of a particular application might be such as to raise compelling reasons for giving special consideration to the grant of a visa notwithstanding the priorities policy. The policy thus contemplated the possibility of relaxation of the priorities having regard to the circumstances of a particular case. And the paragraph on which the plaintiff has fixed does not demonstrate that the priorities policy was applied rigidly without regard to the particular circumstances of this case. In Minister for Immigration and Ethnic Affairs v Wu Shan Liang26, Brennan CJ, Toohey, McHugh and Gummow JJ approved the statement of the Full Court of the Federal Court (Neaves, French and Cooper JJ) in Collector of Customs v Pozzolanic Enterprises Pty Ltd27 that "[t]he reasons for the decision under review are not to be construed minutely and finely with an eye keenly attuned to the perception of error." The statement of the Delegate on which the plaintiff relied follows the statement in the previous paragraph of the basis of the Delegate's decision: "Weighing all these factors I am not satisfied that there are compelling reasons for giving special consideration to granting you and your family a [Subclass 202] visa." That statement does not reveal error28. The Delegate's letter must be read fairly as a whole. It is apparent that the Delegate expressed his conclusion in respect of the application in the paragraph before that on which the plaintiff has fixed. That paragraph might have been an attempt on the part of the Delegate to emphasise that many applicants have strong claims to the scarce places available, in an attempt to assuage the disappointment which the Visa Applicants could be expected to feel at the decision stated in the preceding paragraph. However that may be, it can fairly be seen as a postscript to his conclusion. 26 (1996) 185 CLR 259 at 272. 27 (1993) 43 FCR 280 at 287. 28 Minister for Immigration and Citizenship v SZGUR (2011) 241 CLR 594 at Bell Gordon Conclusion The questions posed for determination by the Court should be answered: (a) Yes. (b) No. (c) No. (a) No. (b) No. Unnecessary to answer. Yes. (a) No. (b) No. It is unnecessary to answer the rest of Question 6. None. The proceedings should be dismissed. The plaintiff. In my opinion, the questions reserved should be answered in the manner proposed by French CJ, Bell, Keane and Gordon JJ substantially for the reasons their Honours give. The criterion prescribed by cl 202.222(2) of Sched 2 to the Migration Regulations 1994 (Cth), which must be met at the time of the grant of a Refugee and Humanitarian (Class XB) (Subclass 202) visa, is a single criterion that "the Minister is satisfied that there are compelling reasons for giving special consideration to granting the applicant a permanent visa". A statutory requirement that a decision-maker arrive at a state of satisfaction as a precondition to an exercise of a statutory power, like a requirement that a decision-maker hold a belief as a precondition to an exercise of a statutory power, necessitates that the decision-maker "feel an actual persuasion"29 β "an inclination of the mind towards assenting to, rather than rejecting, a proposition"30. A statutory requirement that a decision-maker be satisfied that there are "compelling reasons" for taking particular action is a requirement that the decision-maker be persuaded that there are reasons in favour of taking that action which, when weighed within the context of the particular statutory scheme, are irresistible31. The structure of cl 202.222(2) obliges the Minister, or his or her delegate, in deciding whether there are compelling reasons for giving special consideration to granting the applicant a permanent visa, to reach the requisite state of satisfaction by "having regard to" the individual and cumulative effect of each of the considerations identified in pars (a) to (d). The requirement of "having regard to" those considerations is a requirement to take each of those considerations into account and to give each of them weight as a "fundamental element" of the decision to be made32. There is no dispute that each of pars (a) to (d) of cl 202.222(2) refers to a consideration which requires the exercise of evaluative judgment on the part of the decision-maker. It would be nonsense to suggest that any of them refers to a "jurisdictional fact", the existence or non-existence of which is for the objective 29 Briginshaw v Briginshaw (1938) 60 CLR 336 at 361; [1938] HCA 34. 30 George v Rockett (1990) 170 CLR 104 at 116; [1990] HCA 26. 31 Babicci v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 141 FCR 285 at 289 [21]-[24]. 32 R v Hunt; Ex parte Sean Investments Pty Ltd (1979) 180 CLR 322 at 329; [1979] HCA 32. determination of a court33. The evaluative judgment of the decision-maker gives content to each of them, provided the decision-maker conducts himself or herself according to law34. Once it is accepted that par (d) of cl 202.222(2) refers to a consideration which is for the evaluative judgment of the Minister or his or her delegate, there can be no doubt that it is for the Minister or his or her delegate to determine both the category of persons who meet the description of "persons such as the applicant" and the capacity of the Australian community to provide for the permanent settlement in Australia of persons within that category. Given that the capacity of the Australian community to provide for the permanent settlement in Australia of any category of persons must always be finite, it must also be for the Minister or his or her delegate to determine how to prioritise allocation of that finite capacity amongst persons within that category for the purpose of coming to the requisite state of satisfaction as to whether there are compelling reasons for giving special consideration to granting a permanent visa to a particular applicant within that category. It is open to the Minister in the exercise of non-statutory executive power to lay down a policy for the guidance of his or her delegates in making those determinations. Indeed, it is inconceivable that the Minister would not do so. In Nevistic v Minister for Immigration and Ethnic Affairs35, Deane J emphasised the importance of the adoption and consistent application of policy to the avoidance of substantial injustice in administrative decision-making, which involves "competition or correlativity between rights, advantages, obligations and disadvantages". Each applicant must always be entitled to have his or her application for the exercise of a decision-making power determined on its merits. But the merits of an application cannot always adequately be considered by reference to the circumstances of the applicant alone. Where, as here, the statutory question is whether the decision-maker should be persuaded that there are compelling reasons for giving special consideration to granting one of a finite number of permanent visas to a particular applicant, the correct or preferable decision in the individual case cannot be divorced from the correct or preferable decision across the range of cases in which an exercise of that decision-making power can be expected to be 33 Contrast Plaintiff M70/2011 v Minister for Immigration and Citizenship (2011) 244 CLR 144 at 194 [107]-[109]; [2011] HCA 32. 34 Compare Buck v Bavone (1976) 135 CLR 110 at 118-119; [1976] HCA 24; Australian Heritage Commission v Mount Isa Mines Ltd (1997) 187 CLR 297 at 306; [1997] HCA 10. 35 (1981) 34 ALR 639 at 647. sought. Blinkered and individualised decision-making would be a recipe for maladministration. The policy in fact determined by the Minister at the time of the decision of his delegate under review in this case had two relevant components. One was the determination that, of the 13,750 persons which the Australian Government had decided it was within the capacity of the Australian community permanently to settle in Australia in 2014-2015, 5,000 places would be allocated to applicants for Refugee and Humanitarian (Class XB) (Subclass 202) visas. The other was the determination that, in the allocation of those 5,000 places amongst the very much larger number of potentially deserving applicants for Refugee and Humanitarian (Class XB) (Subclass 202) visas, processing priorities would be applied according to which the lowest priority would be given to applications proposed by or on behalf of a person who arrived in Australia as an irregular maritime arrival before 13 August 2012. Neither component of that policy was inconsistent with the terms or structure of cl 202.222(2) of Sched 2 to the Migration Regulations. The policy did not disregard the four mandatory considerations set out in pars (a) to (d) of cl 202.222(2). The ordering of the priorities was consistent with the object set out in s 4(1) of the Migration Act 1958 (Cth) of regulating, in the national interest, the coming into, and presence in, Australia of non-citizens, and was not inconsistent with the general scheme of the Migration Act or with any of its provisions. The expression of the policy was not so rigid as to exclude consideration of the merits of the particular case, including a consideration of whether the circumstances of the particular applicant were so extraordinary as to warrant departure from the priority which would be afforded to the applicant in the ordinary application of the policy. The terms of the delegate's letter notifying the applicants of the delegate's decision do not justify drawing an inference that the delegate adopted such a rigid approach to the application of the policy that he failed to have regard to the circumstances of the individual case advanced in support of the application. The letter was not a formal statement of the reasons for the decision: it was not a document devoted to setting out, exclusively and exhaustively, the findings of fact made by the delegate and the process of reasoning which the delegate adopted to reach the conclusion that there were no compelling reasons for giving special consideration to granting the visas. It was somewhat informally expressed. The delegate's statement that "[o]nly the highest priority applications will be successful" would be demonstrative of undue rigidity were it to be read as reflecting part of the process of reasoning by which the delegate arrived at the conclusion that there were no compelling reasons for giving special consideration to granting the visas. The statement was made, however, after the delegate had already explained that he had reached that conclusion "[w]eighing" all of the factors to which he had referred. The statement is best read, in the context of the letter as a whole, as having been offered by way of consolation in light of the recognised would cause decision already made, which disappointment to the applicants. the delegate |
HIGH COURT OF AUSTRALIA MINERALOGY PTY LTD & ANOR PLAINTIFFS AND STATE OF WESTERN AUSTRALIA DEFENDANT Mineralogy Pty Ltd v Western Australia [2021] HCA 30 Dates of Hearing: 15, 16, 17 & 18 June 2021 Date of Judgment: 13 October 2021 ORDER The questions of law stated in the Special Case filed on 8 April 2021 be answered as follows: Is the Iron Ore Processing (Mineralogy Pty Ltd) Agreement Amendment Act 2020 (WA) ("2020 Act") invalid or inoperative in its entirety? Answer: If the answer to question 1 is "no", are any of the following parts or provisions of the 2020 Act invalid or inoperative (and, if so, to what extent): (a) Part 3; Subsections 8(3)-(5); Subsections 9(1)-(2); Subsections 10(4)-(7); Subsections 11(1)-(7); Subsections 12(1)-(2) and (4)-(7); Subsections 13(4)-(8); Section 14; Subsection 15(5)(b); Subsection 16(3); Subsections 17(4)-(5); Subsections 18(1)-(3) and (5)-(7); Subsections 19(1)-(7); Section 20; Subsections 21(4)-(8); Section 22; Subsection 23(5)(b); Subsection 24(3); Subsections 25(4)-(5); and/or Sections 30 and 31. Answer: Sections 9(1) and 9(2) and 10(4) to 10(7) of the Iron Ore Processing (Mineralogy Pty Ltd) Agreement Act 2002 (WA), as inserted by the 2020 Act, are not invalid or inoperative to any extent. The question is otherwise unnecessary to answer. If the answer to question 2 is "yes", are any or all of the invalid provisions of the 2020 Act severable such that the 2020 Act is capable of operating to the extent of the remaining valid provisions? Answer: The question does not arise. By whom should the costs of this Special Case be paid? Answer: The plaintiffs. Representation D F Jackson QC with M A Karam and H C Cooper for the plaintiffs J A Thomson SC, Solicitor-General for the State of Western Australia, with S J Free SC, J E Shaw and Z C Heger for the defendant (instructed by State Solicitor's Office (WA)) S P Donaghue QC, Solicitor-General of the Commonwealth, with F I Gordon, T M Wood and J G Wherrett for the Attorney-General of the Commonwealth, (instructed by Australian Government Solicitor) intervening M G Sexton SC, Solicitor-General for the State of New South Wales, with J S Caldwell for the Attorney-General for the State of New South Wales, intervening (instructed by Crown Solicitor's Office NSW) N Christrup SC, Solicitor-General for the Northern Territory, with L S Peattie for the Attorney-General for the Northern Territory, intervening (instructed by Solicitor for the Northern Territory) R J Orr QC, Solicitor-General for the State of Victoria, with G A Hill and M-Q T Nguyen for the Attorney-General for the State of Victoria, intervening (instructed by Victorian Government Solicitor's Office) E J Longbottom QC with F J Nagorcka for the Attorney-General of the State of Queensland, intervening (instructed by Crown Law Qld) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Mineralogy Pty Ltd v Western Australia Constitutional law β State Parliament β Legislative power β Where State of Western Australia entered into agreement concerning mining projects in Pilbara region with Mineralogy Pty Ltd and other parties ("co-proponents") including International Minerals Pty Ltd β Where agreement and 2008 variation set out in schedules to, and thereby formed part of, Iron Ore Processing (Mineralogy Pty Ltd) Agreement Act 2002 (WA) ("State Act") β Where agreement provided that Mineralogy Pty Ltd, alone or with co-proponent, could submit proposals to relevant Minister regarding projects β Where two plaintiff companies submitted proposals to Minister in 2012 and 2013 β Where disputes in relation to 2012 proposal referred to arbitration, resulting in arbitral awards in favour of plaintiffs in 2014 and 2019 β Where in August 2020 Parliament of Western Australia passed Iron Ore Processing (Mineralogy Pty Ltd) Agreement Amendment Act 2020 (WA) ("Amending Act") β Where Amending Act purported to insert new Pt 3 into State Act, including provisions which would deprive 2012 and 2013 proposals of legal effect (s 9) and deprive 2014 and 2019 arbitral awards of legal effect (s 10) β Where plaintiffs commenced proceedings in High Court's original jurisdiction seeking declarations that Amending Act wholly or partly invalid β Whether manner of enactment of Amending Act contravened s 6 of Australia Act 1986 (Cth) β Whether Amending Act exceeded limitation on legislative power of Parliament of Western Australia arising from rule of law or deeply rooted common law rights β Whether ss 9(1), 9(2) and 10(4)-(7) of State Act incompatible with Ch III of Constitution β Whether ss 9(1), 9(2) and 10(4)-(7) of State Act incompatible with s 118 of Constitution. High Court β Practice β Special case β Where parties agreed to state questions of law for opinion of Full Court β Where special case stated facts and identified documents said to be necessary to enable Court to answer questions of law β Whether facts stated and documents identified sufficient to satisfy Court of necessity of answering questions of law stated in special case for determination of immediate right, duty or liability in controversy between parties. Words and phrases β "adjudicative function", "advisory", "arbitral awards", "conflict between State laws", "deeply rooted common law rights", "exercise of judicial power", "full faith and credit", "government agreement", "institutional integrity", "interference with judicial power", "legislative power", "limitations on the scope of the legislative power", "manner and form", "necessity of answering the questions stated by the parties", "original jurisdiction", "prudential approach to resolving questions of constitutional validity", "rule of law", "severance", "special case". Constitution, Ch III, ss 107, 118. Colonial Laws Validity Act 1865 (Imp), s 5. Australia Act 1986 (Cth), s 6. Judiciary Act 1903 (Cth), s 18. High Court Rules 2004 (Cth), rr 27.07, 27.08. Commercial Arbitration Act 2013 (Qld), ss 35, 36. Government Agreements Act 1979 (WA). Iron Ore Processing (Mineralogy Pty Ltd) Agreement Act 2002 (WA), Pts 2, 3, Schs 1, 2. Iron Ore Processing (Mineralogy Pty Ltd) Agreement Amendment Act 2020 (WA). KIEFEL CJ, GAGELER, KEANE, GORDON, STEWARD AND GLEESON JJ. Introduction The plaintiffs, Mineralogy Pty Ltd and International Minerals Pty Ltd, and the defendant, the State of Western Australia, in 2001 entered into an agreement known as the "Iron Ore Processing (Mineralogy Pty Ltd) Agreement" which in 2008 they varied by entering into a further agreement, known as the "Variation Agreement". The Iron Ore Processing (Mineralogy Pty Ltd) Agreement as varied by the Variation Agreement is conveniently referred to as the "State Agreement". The Iron Ore Processing (Mineralogy Pty Ltd) Agreement Act 2002 (WA), as amended from time to time, is conveniently referred to as the "State Act". The Iron Ore Processing (Mineralogy Pty Ltd) Agreement and the Variation Agreement are set out in Schedules to the State Act. Through the operation of the Interpretation Act 1984 (WA)1, the Schedules form part of the State Act. Part 2 of the State Act contains provisions expressed in identical terms with respect to the Iron Ore Processing (Mineralogy Pty Ltd) Agreement2, including "as varied from time to time in accordance with its provisions"3, and to the Variation Agreement4. Their cumulative effect is to provide that the State Agreement "is ratified"5, that the implementation of the State Agreement "is authorised"6, and that ("[w]ithout limiting or otherwise affecting the application of the Government Agreements Act 1979 [(WA)]") the State Agreement "operates and takes effect despite any other Act or law"7. Implicit in the qualification to the last of those Section 31(2) of the Interpretation Act. Section 4 of the State Act. Section 3 (definition of "the Agreement") of the State Act. Section 6 of the State Act. Sections 4(1) and 6(1) of the State Act. Sections 4(2) and 6(2) of the State Act. Sections 4(3) and 6(3) of the State Act. provisions is an acknowledgement that the State Agreement is also a "Government agreement" within the meaning of the Government Agreements Act8, which provides that "each provision of a Government agreement shall operate and take effect ... according to its terms notwithstanding any other Act or law"9 and that "any purported modification of any other Act or law contained, or provided for, in [a provision of a Government agreement] shall operate and take effect so as to modify that other Act or law for the purposes of the Government agreement ... according to its terms notwithstanding any other Act or law"10. The Iron Ore Processing (Mineralogy Pty Ltd) Agreement Amendment Act 2020 (WA) purports to further amend the State Act by inserting a new Pt 3 into the State Act without altering the text of Pt 2. It is conveniently referred to as the "Amending Act". In a proceeding commenced by writ of summons in the original jurisdiction of the High Court under s 30(a) of the Judiciary Act 1903 (Cth), the plaintiffs seek against the defendant a declaration that the Amending Act is invalid or alternatively declarations that the whole or each of numerous specified provisions of Pt 3 of the State Act as inserted by the Amending Act is invalid. The relief is framed to focus on the operation of the Amending Act, recognising that the State Act as amended by the Amending Act must operate in accordance with its terms if and to the extent that the Amending Act is not invalid11. The principal allegation of the plaintiffs in the proceeding is that the manner of enactment of the Amending Act, as an ordinary Act of the Parliament of Western Australia, contravened s 6 of the Australia Act 1986 (Cth). They also allege that the Amending Act as a whole exceeds one or more asserted limitations on the scope of the legislative power of the Parliament of Western Australia continued by s 107 of the Constitution. Their alternative allegations are to the effect that the See s 2 of the Government Agreements Act. Section 3(a) of the Government Agreements Act. 10 Section 3(b) of the Government Agreements Act. 11 cf Commissioner of Taxation v Clyne (1958) 100 CLR 246 at 267-268; Attorney- General (NSW); Ex rel McKellar v The Commonwealth (1977) 139 CLR 527 at 550, 560, 562, 582; Air Caledonie International v The Commonwealth (1988) 165 CLR whole of Pt 3 of the State Act, or in the alternative each of the numerous provisions of Pt 3 which they specify, is invalid either on the basis that it exceeds one or more asserted limitations on the scope of the legislative power of the Parliament of Western Australia or on the basis that it exceeds one or more limitations imposed on the exercise of State legislative power by Ch III or by one or more provisions within Ch V of the Constitution. By special case in the proceeding, the plaintiffs and the defendant agreed in stating questions of law for the opinion of the Full Court. The questions of law were framed by the parties in the drafting of the special case, and written and oral argument was joined between the parties on the hearing of the special case, with a view to obtaining the opinion of the Full Court on each of the multifarious legal bases on which the plaintiffs seek declarations of invalidity in respect of the Amending Act and in respect of the numerous challenged provisions within Pt 3 of the State Act. A measure of imprecision as to the scope of the plaintiffs' challenges to provisions within Pt 3 of the State Act became apparent in the course of oral argument on the hearing of the special case. To ensure that no challenge to a provision was overlooked or misunderstood, the plaintiffs were asked to provide a schedule setting out each ground of invalidity claimed with respect to each provision sought to be impugned. To the extent that the challenges identified in the schedule provided in response to that request depart from those which might have been thought to emerge from the manner in which the plaintiffs framed the relief sought in the proceeding, from the manner in which the parties framed the questions of law in the special case, or from the detail of the written and oral arguments, the plaintiffs are held to the challenges identified in the schedule in the reasons which follow. The special case procedure adopted by the parties is appropriate to obtain judicial resolution of the issues as to whether the Amending Act is non-compliant with s 6 of the Australia Act or exceeds the legislative power of the Parliament of Western Australia as well as to obtain judicial resolution of issues as to whether certain central provisions of Pt 3 of the State Act are compatible with Ch III and s 118 of the Constitution. To the extent that the questions of law stated in the special case raise those issues, the questions must be answered adversely to the plaintiffs for reasons to be explained. The procedure adopted by the parties is inappropriate to obtain judicial resolution of legal issues which might or might not arise in relation to the numerous other legal bases on which the plaintiffs seek declarations of invalidity in respect of Pt 3 of the State Act. The reason is that the facts agreed between the parties for the purpose of the special case provide an inadequate foundation upon which to crystallise those legal issues or to demonstrate the necessity of their resolution to the determination of any immediate right, duty or liability in controversy between the parties. Before explaining in more detail why some but not all questions of law stated in the special case are appropriate to be answered, and then proceeding to answer each question that is appropriate to be answered, it will be fitting to say something at the level of principle about the proper and improper use of the special case procedure. To allow that to occur, it is necessary at the outset to record the terms of the State Agreement, to recount certain events leading up to the enactment of the Amending Act, and to set out the central provisions and outline the structure of Pt 3 of the State Act. The State Agreement The State Agreement refers to the first plaintiff, Mineralogy Pty Ltd, as "the Company" and to the defendant as "the State". The Minister in the Government of the State for the time being responsible for the administration of the State Act, it refers to as "the Minister". Other parties to the State Agreement, including the second plaintiff, International Minerals Pty Ltd, it refers to as "the Co-Proponents". The State Agreement recites that "[t]he Company is the holder of mining tenements in the Pilbara region" and "has granted various rights in relation to certain of the said mining tenements to the Co-Proponents". The recital continues by stating that "[t]he Company by itself or in conjunction with one or more of the Co-Proponents wishes to develop projects" incorporating, amongst other potential elements, the mining and concentration of iron ore in delineated portions of areas covered by mining tenements held by the Company and the processing of that iron ore. The recital concludes by stating that the State "has agreed to assist the establishment of the proposed projects upon and subject to the terms of" the State Agreement "for the purpose of promoting employment opportunity and industrial development in Western Australia". Clause 4(3) of the State Agreement makes provision to the effect that, upon the commencement of the State Act, the State Agreement "shall operate and take effect according to its terms notwithstanding the provisions of any Act or law of Western Australia". Clause 6 of the State Agreement requires the Company, either alone or with a Co-Proponent, to submit to the Minister detailed proposals for one or more or a combination of projects of the type described in the State Agreement as "Project 1", "Project 2" or "Project 3". Clause 7 of the State Agreement requires the Minister to take one of three specified courses of action in respect of a proposal submitted pursuant to cl 6. The first is to approve the proposal without qualification or reservation. The second is to defer considering or making a decision on the proposal pending submission of a further proposal or proposals in respect of matters not covered by the proposal. The third is to require, as a condition precedent to approval of the proposal, that there be alteration of the proposal or compliance with conditions in respect of the proposal that the Minister for stated reasons thinks reasonable. What the Minister cannot do is to reject the proposal. The State Agreement contains numerous other provisions designed to facilitate implementation of approved proposals. One example is cl 10, which obliges the State in specified circumstances to cause the Company to be granted mining leases under the Mining Act 1978 (WA) as modified in specified respects for the purposes of the State Agreement. Another is cl 27, which empowers the State to resume and dispose of land for the purposes of the State Agreement under the Land Administration Act 1997 (WA) and the Public Works Act 1902 (WA) as also modified in specified respects for the purposes of the State Agreement. Clause 32 of the State Agreement, which is central to the plaintiffs' argument that the manner of enactment of the Amending Act contravened s 6 of the Australia Act, deals with variation of the State Agreement. The clause provides in full: "(1) The parties to this Agreement may from time to time by agreement in writing add to substitute for cancel or vary all or any of the provisions of this Agreement or of any lease licence easement or other title granted under or pursuant to this Agreement for the purpose of more efficiently or satisfactorily implementing or facilitating any of the objects of this Agreement. The Minister shall cause any agreement made pursuant to subclause (1) in respect of any addition substitution cancellation or variation of the provisions of this Agreement to be laid on the Table of each House of Parliament within 12 sitting days next following its execution. Either House may, within 12 sitting days of that House after the agreement has been laid before it pass a resolution disallowing the agreement, but if after the last day on which the agreement might have been disallowed neither House has passed such a resolution the agreement shall have effect from and after that last day." Clause 42 of the State Agreement deals with arbitration. Read with cl 2(f) of the State Agreement, which gives ambulatory operation to references to legislation, cl 42(1) provides that "[a]ny dispute or difference between the parties arising out of or in connection with this Agreement the construction of this Agreement or as to the rights duties or liabilities of the parties or any of them under this Agreement or as to any matter to be agreed upon between the parties under this Agreement shall in default of agreement between the parties and in the absence of any provision in this Agreement to the contrary be referred to and settled by arbitration under the provisions of the [Commercial Arbitration Act 2012 (WA)]". Events leading up to the enactment of the Amending Act Nine years ago, in or around August 2012, the plaintiffs submitted to the Minister responsible for the administration of the State Act documents entitled "Balmoral South Iron Ore Project: Project Proposal for the Western Australian Government" and "Balmoral South Iron Ore Project: Project Proposal addendum for the Western Australian Government". Those documents are together referred to in Pt 3 of the State Act as the "first Balmoral South proposal"12. Nearly a year later, in June 2013, the plaintiffs submitted to the Minister then responsible for the administration of the State Act further documents entitled "Balmoral South Iron Ore Project: Project Proposal for the Western Australian Government". Those further documents are referred to in Pt 3 of the State Act as the "second Balmoral South proposal"13. The plaintiffs and the defendant took different views about whether the submission of the first Balmoral South proposal amounted to the submission of a proposal within the meaning of cl 6 of the State Agreement: the plaintiffs took the view that it did; the defendant took the view that it did not. The dispute between 12 Section 7(1) (definition of "first Balmoral South proposal") of the State Act. 13 Section 7(1) (definition of "second Balmoral South proposal") of the State Act. them was eventually referred to arbitration pursuant to cl 42(1) of the State Agreement. The outcome of the arbitration was an arbitral award dated 20 May 2014. The arbitral award declared that the first Balmoral South proposal was a proposal submitted pursuant to cl 6 of the State Agreement with which the Minister was required to deal under cl 7 of the State Agreement. The arbitral award also ordered the State to pay the arbitrator's costs and expenses, which the State subsequently did. Against the background of the arbitral award dated 20 May 2014 having declared that the first Balmoral South proposal was a proposal submitted pursuant to cl 6 of the State Agreement with which the Minister was required to deal under cl 7 of the State Agreement, the Premier on 22 July 2014 purported pursuant to cl 7 of the State Agreement to require that the plaintiffs comply with 46 conditions precedent to his approval of the first Balmoral South proposal. More than four years later, in December 2018, the parties referred to arbitration a procedural dispute about whether the arbitral award dated 20 May 2014 precluded the plaintiffs from pursuing a claim for damages for breach of the State Agreement based on the initial failure of the Minister to deal with the first Balmoral South proposal. A procedural dispute was also referred to arbitration about whether inordinate or inexcusable delay precluded the plaintiffs from pursuing a further claim for damages for breaches of the State Agreement based on an allegation that the conditions precedent to approval of the first Balmoral South proposal imposed by the Premier on 22 July 2014 were so unreasonable as to give rise to a further failure to deal with the first Balmoral South proposal. The outcome was an arbitral award dated 11 October 2019 which declared that the plaintiffs were not precluded from pursuing either claim for damages. Ultimately, in July 2020, the parties referred to arbitration the substantive disputes foreshadowed in the procedural disputes which had resulted in the arbitral award dated 11 October 2019. The substantive disputes were about the liability of the defendant to the plaintiffs in damages for breach of cl 7 of the State Agreement based on the initial failure of the Minister to deal with the first Balmoral South proposal and based on the allegation that the conditions precedent to approval imposed by the Premier on 22 July 2014 were unreasonable. The arbitration of those disputes was cut short by the enactment of the Amending Act. The Amending Act and Pt 3 of the State Act The Bill for the Amending Act was introduced into the Legislative Assembly on 11 August 2020 and passed the next day. The Bill was then introduced into and passed by the Legislative Council on 13 August 2020. The Governor assented to the Bill on the same day. The Amending Act was expressed to operate to amend the State Act to insert Pt 3 on the day it received assent14. The effect of the amendment, read with the Interpretation Act, was to cause Pt 3 to commence at midnight on 12 August 202015, a time referred to in Pt 3 as "commencement"16. The Part is expressed to have extra-territorial operation so far as the legislative power of the Parliament of Western Australia permits17. Machinery provisions within Pt 3 of the State Act are noteworthy. Section 8(1) combines with s 8(2) to provide that Pt 3 "has effect despite Part 2 and any other Act or law" and that, "[s]ubject to" Pt 3, the State Agreement "continues to operate in accordance with its provisions and as provided for under" Pt 2. Importantly, s 8(4) and s 8(5) make specific and complementary provision for the substantive provisions of Pt 3 to have distinct and severable operations in the event of invalidity. Noting that s 8(1) displaces the operation of the standard severance provision in the Interpretation Act18 for the purposes of Pt 3, s 8(4) and s 8(5) leave no room for inference19 that those provisions can in turn themselves be displaced through discernment of a contrary intention in Pt 320. Despite being 14 Section 2 and s 7 of the Amending Act. 15 Section 21 of the Interpretation Act. 16 Section 7(1) (definition of "commencement") of the State Act. 17 Section 8(6) of the State Act. 18 Section 7 of the Interpretation Act. 19 cf s 3 of the Interpretation Act. 20 Knight v Victoria (2017) 261 CLR 306 at 325 [35]. mentioned in a question stated in the special case, the validity of neither is separately challenged in the proceeding. Sufficient for present purposes is therefore to note the terms of s 8(5), which provides that if "a provision of [Pt 3], or a part of a provision of [Pt 3], is not valid for any reason, the rest of [Pt 3] is to be regarded as divisible from, and capable of operating independently of, the provision, or the part of a provision, that is not valid". Machinery provisions within Pt 3 also include those which empower the making of "subsidiary legislation" in the form of regulations under s 29 and orders under s 30. The regulation-making power conferred by s 29 is expressed in familiar form21 to empower the Governor to make regulations prescribing matters "necessary or convenient" to be prescribed for giving effect to Pt 3. Section 30 is in a less familiar β perhaps unprecedented β form, being described by the Attorney- General in the Legislative Assembly as "the Henry VIII clause of all Henry VIIIs"22. The section is expressed to empower the Governor, if the Minister is of the opinion that one or more specified circumstances exist or may exist and on the Minister's recommendation, by order to amend Pt 3 to address those circumstances or to make any other provision necessary or convenient to address those circumstances. Section 31 goes on to provide that subsidiary legislation may be expressed to operate retrospectively, to have effect despite the State Agreement, Pt 2, Pt 3 or any other Act or law, and to provide that a specified provision in the State Agreement, Pt 3 or a written law applies with specified modifications to or in relation to any matter or thing. Section 29 is not, but ss 30 and 31 are, separately challenged in the proceeding. There was nothing in the special case to suggest that any subsidiary legislation has been made within the scope of s 30 or s 31. Turning from the machinery provisions to the substantive provisions of Pt 3, s 8(3) provides that the State Agreement "is taken not to have been, and never to have been, repudiated by any conduct of the State, or of a State agent, occurring or arising on or before commencement". Although the validity of s 8(3) is separately challenged in the proceeding, the plaintiffs have not contended that the State Agreement has been repudiated. 21 See Shanahan v Scott (1957) 96 CLR 245 at 249-250. 22 Western Australia, Legislative Assembly, Parliamentary Debates (Hansard), 12 August 2020 at 4834. Section 9, the validity of which is separately challenged in the proceeding, provides: "(1) To the extent that it would not otherwise be the case, on and after commencement, neither the first Balmoral South proposal nor the second Balmoral South proposal has, nor can have, any contractual or other legal effect under the Agreement or otherwise. For the Balmoral South Iron Ore Project β only proposals submitted under the Agreement on or after commencement can be proposals for the purposes of the Agreement; and no document provided to the State, or of which the State is otherwise aware, before commencement can be proposals for the purposes of the Agreement." Section 10 needs to be understood in light of the definition of "relevant arbitration"23. The definition is tailored to capture each of the arbitrations concluded by the arbitral awards of 20 May 2014 and 11 October 2019 as well as the arbitration of the substantive disputes as to the entitlement of the plaintiffs to damages for alleged breaches of the State Agreement commenced in July 2020 and ongoing as at 12 August 2020. Section 10(1) speaks to the ongoing arbitration in providing that "[a]ny relevant arbitration that is in progress, or otherwise not completed, immediately before commencement is terminated". The validity of s 10(1) is not separately challenged in the proceeding. It follows that, if the Amending Act and Pt 3 of the State Act are not wholly invalid, the arbitration commenced in July 2020 which was ongoing as at 12 August 2020 must be treated as having ended at midnight on that date by force of s 10(1). Section 10(4) to s 10(7), which are separately challenged in the proceeding, speak in turn to each of the concluded arbitrations in providing: 23 Section 7(1) (definition of "relevant arbitration") of the State Act. "(4) The arbitral award made in a relevant arbitration and dated 20 May 2014 is of no effect and is taken never to have had any effect. The arbitration agreement applicable to that relevant arbitration, and under which that arbitral award is made, is not valid, and is taken never to have been valid, to the extent that, apart from this subsection, the arbitration agreement would underpin, confer jurisdiction to make, authorise or otherwise allow the making of that arbitral award. The arbitral award made in a relevant arbitration and dated 11 October 2019 is of no effect and is taken never to have had any effect. The arbitration agreement applicable to that relevant arbitration, and under which that arbitral award is made, is not valid, and is taken never to have been valid, to the extent that, apart from this subsection, the arbitration agreement would underpin, confer jurisdiction to make, authorise or otherwise allow the making of that arbitral award." Most of the remaining provisions of Pt 3 separately challenged in the proceeding hinge on the elaborately defined expressions "disputed matter" and "protected matter"24. The definitions of those expressions repeatedly employ the expression "connected with", which is in turn elaborately defined to encompass a range of causal and other relationships25. The definition of "disputed matter" encompasses the conduct of the Minister then responsible for the administration of the State Act which gave rise to the subject matter of each of the three arbitrations addressed in s 10 and encompasses more broadly conduct of the Minister connected with the first Balmoral South proposal or the second Balmoral South proposal26. The definition 24 Section 7(1) (definitions of "disputed matter" and "protected matter") of the State Act. 25 Section 7(1) (definition of "connected with") and s 7(3) of the State Act. 26 Section 7(1) (paras (a)-(e) of the definition of "disputed matter") of the State Act. encompasses even more broadly conduct of the State or any State agent that is or was connected with the Balmoral South Iron Ore Project as proposed or described from time to time as well as conduct of the State or any State agent connected with the making of the State Agreement27. In respect of a disputed matter, s 11(1) to s 11(4) provide: "(1) On and after commencement, the State has, and can have, no liability to any person that is or would be β in respect of any loss, or other matter or thing, that is the subject of a claim, order, finding or declaration made against the State in a relevant arbitration; or in respect of any other loss, or other matter or thing, that is, or is connected with, a disputed matter (whether the loss, or other matter or thing, occurs or arises before, on or after commencement); or in any other way connected with a disputed matter. (2) Any liability of the type described in subsection (1) that the State has to any person before commencement is extinguished. (3) On and after commencement, no proceedings can be brought, made or begun against the State to the extent that the proceedings are or would be β for the purpose of establishing, quantifying or enforcing a liability of the type described in subsection (1); or otherwise β in respect of any loss, or other matter or thing, that is the subject of a claim, order, finding or declaration made against the State in a relevant arbitration; or 27 Section 7(1) (paras (f)-(h) of the definition of "disputed matter") of the State Act. in respect of any other loss, or other matter or thing, that is, or is connected with, a disputed matter (whether the loss, or other matter or thing, occurs or arises before, on or after commencement); or (iii) in any other way connected with a disputed matter. (4) Any proceedings brought, made or begun against the State, to the extent that they are of the type described in subsection (3), are terminated if either or both of the following apply β the proceedings are brought, made or begun before before commencement commencement; completed but not are the proceedings are brought, made or begun before the end of the day on which the amending Act receives the Royal Assent but are not completed before the end of that day." Use of the time-honoured expression "no proceedings can be brought" indicates that the operation of s 11(3) is not to extinguish a right or cause of action or to affect jurisdiction but rather to create a statutory defence that can be raised by the State in answer to proceedings and that, conversely, has no operation unless raised by the State in answer to proceedings28. The operation of s 11(4) to terminate proceedings that have already been brought is through the creation of a statutory defence of the same nature. Section 11(5) and s 11(6) go on to make provision in respect of proceedings of the type described in s 11(3) brought and completed before commencement. Section 11(7) concerns legal costs in proceedings referred to in s 11(4) and s 11(6). Although s 11(5) to s 11(7) are challenged in the proceeding along with s 11(1) to 28 Minister for Home Affairs v DMA18 (2020) 95 ALJR 14 at 18 [4], 23-24 [26]-[31]; 385 ALR 16 at 19, 26-27, citing The Commonwealth v Verwayen (1990) 170 CLR 394 at 405-406, 425-426, 456, 473-474, 486-488, Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 at 562 and The Commonwealth v Mewett (1997) 191 CLR 471 at 507-509, 511, 516, 534; Price v Spoor (2021) 95 ALJR 607 at 613-614 [9]-[11], 618 [40], 625-626 [78]-[79], 627 [85]; 391 ALR 532 at 535, 541, 551, 553. s 11(4), there is no suggestion in the special case that any proceeding covered by them ever existed. The definition of "protected matter" encompasses past, present and future consideration of courses of action for resolving, addressing or otherwise dealing with a disputed matter or liabilities or proceedings, or potential liabilities or proceedings, connected with a disputed matter and extends to processes involved in enacting the Amending Act29. The definition also encompasses past, present and future consideration of courses of action for resolving, addressing or otherwise dealing with matters or things to be, or potentially to be, the subject of a regulation under s 29 or an order under s 30 and extends to processes that might be involved in promulgating such regulations or making such an order30. In respect of a protected matter, s 18(1) is expressed to prevent the matter from giving rise to a cause of action or legal right or remedy against the State after commencement and s 18(2) provides that the protected matter is taken never to have had the effect of giving rise to any cause of action or legal right or remedy against the State which may have existed before commencement. For those purposes, a protected matter is required by s 18(3) to be taken to include both "a protected matter combined with another matter or thing" and "a matter or thing connected with a protected matter". Section 18(5) to s 18(7) are expressed to impose restrictions on the admissibility and compellability of testimony as well as on the discovery and production of documents connected with a protected matter. In respect of a protected matter, s 19(1) to s 19(4) substantially reproduce the language of s 11(1) to s 11(4), substituting "protected matter" for "disputed matter". Like s 11(3) and s 11(4), s 19(3) and s 19(4) must each be read as creating a statutory defence that has no operation unless and until raised by the State in answer to proceedings. Section 19(5) and s 19(6) mirror s 11(5) and s 11(6) in going on to make provision in respect of proceedings of the type described in s 19(3) brought and completed before commencement. Section 19(7) mirrors s 11(7) in going on to deal with legal costs in proceedings referred to in s 19(4) and s 19(6). Although s 19(5) to s 19(7) are challenged in the proceeding, there is yet again no suggestion in the special case that any proceeding covered by them ever existed. 29 Section 7(1) (paras (a)-(e) of the definition of "protected matter") of the State Act. 30 Section 7(1) (paras (f)-(j) of the definition of "protected matter") of the State Act. Other provisions separately challenged in the proceeding can be grouped into three main categories. Within each category, substantially identical provision is made in respect of disputed matters and in respect of protected matters. The first category of other provisions separately challenged can be described as "administrative law provisions". The category comprises provisions expressed to exclude "[a]ny conduct of the State that is, or is connected with, [a disputed or protected] matter" from judicial review31, other than for jurisdictional error32, and from the application of "the rules of natural justice (including any duty of procedural fairness)"33. The category includes provisions stating that "no proceedings can be brought, made or begun to the extent that the proceedings are connected with seeking, by or from the State, discovery, provision, production, inspection or disclosure of any document or other thing connected with [a disputed or protected] matter"34 as well as provisions which deal with judicial review proceedings and discovery proceedings of types not suggested in the special case ever to have existed35. The second category of other provisions separately challenged can be described as "indemnity provisions". The category comprises provisions expressed to impose joint and several liability on "relevant persons" to indemnify the State against any amount that might be recovered from the State in respect of a disputed matter or a protected matter36 or that might be recovered from the Commonwealth in respect of a disputed matter or a protected matter37. The definition of "relevant 31 Section 12(1) and s 12(3) and s 20(1) and s 20(3) of the State Act. 32 Section 26(6) of the State Act. 33 Section 12(2) and s 12(3) and s 20(2) and s 20(3) of the State Act. 34 Sections 13(4) and 21(4) of the State Act. 35 Section 12(4) to s 12(7), s 13(5) to s 13(8), s 20(4) to s 20(7) and s 21(5) to s 21(8) of the State Act. 36 Sections 14 and 15 and 22 and 23 of the State Act. 37 Sections 16 and 24 of the State Act. person" refers by name to each of the plaintiffs and to Mr Clive Frederick Palmer38, who is identified as a director of the first plaintiff39. The third category of other provisions separately challenged can be described as "non-enforcement provisions". The category comprises provisions expressed to prevent a liability of the State connected with a disputed matter or a protected matter being charged to or paid out of the Consolidated Fund or enforced against any asset of the State40. A provision to the effect that "[a]ny conduct of the State that occurs or arises before, on or after commencement, and that is, or is connected with, a protected matter does not constitute an offence and is taken never to have constituted an offence"41 is also separately challenged. The special case does not suggest that the State has engaged in any such conduct. Lastly, a provision to the effect that "[t]he State has, and can have, no liability, and is taken never to have had any liability, to any person to pay damages, compensation or any other type of amount connected with" certain conduct of the Minister administering the State Act or of the State or an agent of the State "occurring or arising" after midnight on 11 August 202042 is separately challenged. Yet again, the special case contains no suggestion that the Minister, the State or any agent of the State has engaged in any such conduct. Use and misuse of the special case procedure The procedures of the High Court make provision for three alternative means by which a question of law thought to arise in a proceeding in its original jurisdiction can be raised in that proceeding for the consideration of the Full Court. 38 Sections 14(2) and 22(2) of the State Act. 39 Section 7(1) (definition of "Mr Palmer") of the State Act. 40 Sections 17 and 25 of the State Act. 41 Section 20(8) of the State Act. 42 Section 27 of the State Act read with s 7(1) (definition of "introduction time") of the State Act. One can be invoked only by a Justice, acting on his or her own initiative or on the application of a party. The others can be invoked by a party or the parties together. The procedure that can be invoked by a Justice is to "direct any case or question to be argued before a Full Court" in the exercise of the power conferred by s 18 of the Judiciary Act. The power can be exercised by the Justice stating a "case" on the basis of facts found or agreed, in which event the Full Court "is limited to ascertaining from the contents of the case stated what are the ultimate facts, and not the evidentiary facts, from which the legal consequences ensue that govern the determination of the rights of [the] parties"43. Alternatively, the power can be exercised by the Justice reserving a "question" which the Justice is satisfied requires resolution in order to determine or facilitate determination of the rights of the parties, in which event the Justice can be expected to make further directions to establish the basis, whether of fact or evidence or pleading, on which the Full Court is being asked by the Justice to resolve the question. The procedure that can be invoked by a party is the filing of a demurrer to the whole or part of a pleading of the opposite party accompanied by an application to a Justice to set the demurrer down for hearing before the Full Court, as provided for in r 27.07 of the High Court Rules 2004 (Cth). A demurrer admits for the purpose of its disposal allegations of fact in the pleading of the opposite party but denies the asserted legal consequence of those facts on a ground of law identified in the demurrer44. The demurrer procedure "proceeds from the premise that a party whose pleading is challenged will have set out, in that pleading, the case which the party seeks to make"45 and "presupposes a pleading which is drawn so as to allege with distinctness and clearness the constituent facts of the cause of action or defence set up"46. The procedure that can be invoked by the parties together β and which has been invoked by the parties in the present proceeding β is the special case procedure for which provision is made in r 27.08 of the High Court Rules. That 43 R v Rigby (1956) 100 CLR 146 at 150-151. 44 Kathleen Investments (Aust) Ltd v Australian Atomic Energy Commission (1977) 139 CLR 117 at 135. 45 Wurridjal v The Commonwealth (2009) 237 CLR 309 at 368 [121]. 46 South Australia v The Commonwealth (1962) 108 CLR 130 at 142. rule provides that "the parties to a proceeding may", "[b]y leave of the Court or a Justice", "agree in stating the questions of law arising in the proceeding in the form of a special case for the opinion of the Full Court". The rule goes on to provide that "[t]he special case shall state the facts and identify the documents necessary to enable the Court to decide the questions raised" and that "[t]he Court may draw from the facts stated and documents identified in the special case any inference, whether of fact or law, which might have been drawn from them if proved at a trial". its original The special case procedure has come in this century to be the predominant means by which the High Court has resolved questions of constitutional validity jurisdiction. Experience has in proceedings commenced demonstrated that agreement between the parties about the questions of law that arise in their proceeding and about the facts and documents necessary for a decision to be made on those questions can enable the opinion of the Full Court on the questions stated in a special case to result in final determination of the rights in controversy in the proceeding in an efficient and timely manner. The agreement of the parties about facts and documents has in most cases provided the Full Court with an adequate basis upon which to determine "adjudicative facts" (being "ordinary questions of fact which arise between the parties because one asserts and the other denies that events have occurred bringing one of them within some criterion of liability or excuse set up by the law") and upon which also to be satisfied of "constitutional facts" (being "matters of fact upon which ... the constitutional validity of some general law may depend" and which "cannot and do not form issues between parties to be tried like the former questions")47. Sometimes overlooked, however, has been the need for the parties to bring no less precision to the framing of adjudicative facts to be stated in a special case than is necessary to be brought to the framing of adjudicative facts to be alleged in a pleading that is appropriate to be the subject of a demurrer. More than once in recent years, the Full Court giving judgment on a special case has had occasion to remind parties that they have no entitlement to expect an 47 Breen v Sneddon (1961) 106 CLR 406 at 411-412. See also Thomas v Mowbray (2007) 233 CLR 307 at 482-483 [526], 512-522 [613]-[639]; Aytugrul v The Queen (2012) 247 CLR 170 at 200-201 [70]; Maloney v The Queen (2013) 252 CLR 168 at 298-299 [351]-[353]; Re Day (2017) 91 ALJR 262 at 268-269 [20]-[24]; 340 ALR answer to a question of law they have agreed in stating in a special case unless the Full Court can be satisfied by reference to the facts and documents they have agreed in the special case that "there exists a state of facts which makes it necessary to decide [the] question in order to do justice in the given case and to determine the rights of the parties"48. That cautious and restrained approach to answering questions agreed by the parties in a special case is a manifestation of a more general prudential approach to resolving questions of constitutional validity "founded on the same basal understanding of the nature of the judicial function as that which has informed the doctrine that the High Court lacks original or appellate jurisdiction to answer any question of law (including but not confined to a question of constitutional law) if that question is divorced from the administration of the law"49. Prudential considerations supporting the approach have been identified to include "avoiding the formulation of a rule of constitutional law broader than required by the precise facts to which it is to be applied" and "avoiding the risk of premature interpretation of statutes on the basis of inadequate appreciation of their practical operation"50. Underlying the prudential approach is recognition that the function performed by the Full Court in answering a question of law stated for its opinion is not advisory but adjudicative. Underlying it also is recognition that performance of an adjudicative function in an adversary setting "proceeds best when it proceeds if, and no further than is, warranted to determine a legal right or legal liability in 48 Lambert v Weichelt (1954) 28 ALJ 282 at 283. See Duncan v New South Wales (2015) 255 CLR 388 at 410 [52]; Knight v Victoria (2017) 261 CLR 306 at 324 [32]; Zhang v Commissioner of the Australian Federal Police (2021) 95 ALJR 432 at 437 [21]; 389 ALR 363 at 368; LibertyWorks Inc v The Commonwealth (2021) 95 ALJR 490 at 511 [90]; 391 ALR 188 at 210. 49 Clubb v Edwards (2019) 267 CLR 171 at 216-217 [136], citing Mellifont v Attorney- General (Q) (1991) 173 CLR 289 at 303-305 explaining In re Judiciary and Navigation Acts (1921) 29 CLR 257 at 266-267. 50 Zhang v Commissioner of the Australian Federal Police (2021) 95 ALJR 432 at 438 [22]; 389 ALR 363 at 368-369, citing Tajjour v New South Wales (2014) 254 CLR controversy"51. That is to say, "the adjudicatory process is most securely founded when it is exercised under the impact of a lively conflict between antagonistic demands, actively pressed, which make resolution of the controverted issue a practical necessity"52. Two implications of the prudential approach repeatedly spelt out are that "a party will not be permitted to 'roam at large' but will be confined to advancing those grounds of challenge which bear on the validity of the provision in its application to that party"53 and that "it is ordinarily inappropriate for the [Full] Court to be drawn into a consideration of whether a legislative provision would have an invalid operation in circumstances which have not arisen and which may never arise if the provision, if invalid in that operation, would be severable and otherwise valid"54. Two further implications of the prudential approach should also be spelt out. One is that the application of an impugned legislative provision to the facts must appear from the special case with sufficient clarity both to identify the right, duty or liability that is in controversy and to demonstrate the necessity of answering the question of law to the judicial resolution of that controversy55. The other is that the necessity of answering the question of law to the judicial resolution of the controversy may not sufficiently appear where there remains a prospect that the controversy can be judicially determined on another basis. The special case in the present proceeding has been framed by the parties with insufficient attention to those principles. 51 Clubb v Edwards (2019) 267 CLR 171 at 217 [137]. 52 Poe v Ullman (1961) 367 US 497 at 503. 53 Knight v Victoria (2017) 261 CLR 306 at 325 [33], quoting The Real Estate Institute of NSW v Blair (1946) 73 CLR 213 at 227. 54 Knight v Victoria (2017) 261 CLR 306 at 324 [33]; LibertyWorks Inc v The Commonwealth (2021) 95 ALJR 490 at 511 [90]; 391 ALR 188 at 210. 55 eg Duncan v New South Wales (2015) 255 CLR 388 at 411 [53]-[54]. Questions appropriate to determine in this special case Each for reasons sufficient unto itself, the plaintiffs and the defendant have seen fit to agree on identifying facts in the special case which do much to reveal the sequence of events that led to the enactment of the Amending Act but little to reveal the practical effect of Pt 3 of the State Act on the rights of the plaintiffs beyond the immediate extinguishment of their rights purportedly effected by s 9(1) and s 9(2) and by s 10(4) to s 10(7). If the Amending Act is not wholly invalid, the effect of s 8(5) of the State Act, which it will be recalled is not separately challenged in the proceeding, is that each part of each provision of Pt 3 of the State Act that is for any reason invalid is severable with the result that each other part of the provision and each other provision remains valid. And the effect of s 10(1) of the State Act, which it will be recalled is also not separately challenged in the proceeding, is that the arbitration commenced in July 2020 concerning the liability of the defendant to the plaintiffs in damages for breach of the State Agreement must be treated as having ended at midnight on 12 August 2020. What then is left in fact to engage the remaining provisions of the State Act separately challenged in the proceeding? The special case reveals two possibilities. On analysis, they remain nothing more than possibilities. First, the special case reveals that the plaintiffs commenced a proceeding against the defendant in the Federal Court of Australia on 12 August 2020 seeking, amongst other things, damages for breach of contract and under the Australian Consumer Law arising from the introduction of the Bill for the Amending Act into the Parliament of Western Australia. The proceeding has the potential to engage s 11(1), s 11(2) and s 11(4) as well as the potential to engage s 19(1), s 19(2) and s 19(4). But whether it will and, if so, how and to what extent cannot now be known. The defendant has not to date raised any defence in reliance on s 11(4) or s 19(4) and the proceeding has been adjourned pending the result of the present proceeding without the plaintiffs having formulated their claims with precision56. Second, the special case reveals that the defendant put the plaintiffs on notice on 9 December 2020 that it intended to rely on an indemnity provision to claim an indemnity from the plaintiffs in connection with its costs in an identified proceeding in the Supreme Court of Queensland. The special case reveals nothing 56 See Mineralogy Pty Ltd v Western Australia [2020] FCA 1517. more about the proceeding and, in particular, reveals nothing about whether any costs have in fact been ordered in the proceeding or about whether any order for costs that might have been made in the proceeding is the subject of an undetermined appeal or application for leave to appeal to the Court of Appeal of the Supreme Court of Queensland. In the result, the facts and documents identified in the special case provide a basis on which to be satisfied of the necessity of answering the questions stated by the parties in the special case as to the validity of the Amending Act and as to the validity of s 9(1) and s 9(2) and of s 10(4) to s 10(7) of the State Act. The facts and documents identified in the special case provide no basis on which to be satisfied of the necessity of answering questions as to the validity of any other provision of the State Act. Asked in the course of hearing the special case to identify the basis or bases on which they asserted each provision of the State Act separately challenged in the proceeding to be invalid, the plaintiffs specified as the bases on which they challenged validity of s 9(1) and s 9(2) and s 10(4) to s 10(7) of the State Act only Ch III and s 118 of the Constitution. Addressing the questions stated by the parties in the special case, it is therefore appropriate to determine whether the Amending Act is non-compliant with s 6 of the Australia Act and whether the Amending Act as a whole exceeds one or more asserted limitations on the scope of the legislative power of the Parliament of Western Australia. It is also appropriate to determine whether s 9(1) and s 9(2) and s 10(4) to s 10(7) of the State Act are compatible with Ch III and s 118 of the Constitution. That is all. The question whether the Amending Act as a whole exceeds asserted limitations on the scope of the legislative power of the Parliament of Western Australia can be dealt with quite shortly. The limitations asserted by the plaintiffs were identified as limitations "concerning the rule of law and deeply rooted common law rights". No operative limitation arises from the rule of law, for reasons set out in Palmer v Western Australia57. No deeply rooted common law right was identified. The remaining questions can be addressed in order. [2021] HCA 31. Manner of enactment of the Amending Act Section 5 of the Colonial Laws Validity Act 1865 (Imp) provided in part: "[E]very Representative Legislature shall, in respect to the Colony under its Jurisdiction, have, and be deemed at all Times to have had, full Power to make Laws respecting the Constitution, Powers, and Procedure of such Legislature; provided that such Laws shall have been passed in such Manner and Form as may from Time to Time be required by any ... Colonial Law for the Time being in force in the said Colony." Within the meaning of the section, at the time of federation, the Commonwealth Parliament and each State Parliament was a "Representative Legislature" and a law enacted by the Commonwealth Parliament or by a State Parliament was a "Colonial Law". The Colonial Laws Validity Act ceased to apply to a law made by the Parliament of the Commonwealth upon the adoption by the Statute of Westminster Adoption Act 1942 (Cth) of the Statute of Westminster 1931 (Imp). The Colonial Laws Validity Act ceased to apply to a law made by the Parliament of each State by force of the Australia Act58, enacted by the Parliament of the Commonwealth under s 51(xxxviii) of the Constitution at the request of the Parliaments of all the States. Restating in positive terms an aspect of the proviso to s 5 of the Colonial Laws Validity Act59, s 6 of the Australia Act provided henceforth that "a law made ... by the Parliament of a State respecting the constitution, powers or procedure of the Parliament of the State shall be of no force or effect unless it is made in such manner and form as may from time to time be required by a law made by that Parliament". The plaintiffs advanced three main propositions in arguing that the Parliament of Western Australia contravened s 6 of the Australia Act in the manner in which it enacted the Amending Act. The first was that the Amending Act answers the description of "a law made ... by the Parliament of [Western Australia] respecting the constitution, powers or procedure of the Parliament of [Western Australia]". The second was that cl 32 of the State Agreement, either by reason of 58 Attorney-General (WA) v Marquet (2003) 217 CLR 545 at 570-571 [67]-[68]. 59 Attorney-General (WA) v Marquet (2003) 217 CLR 545 at 572 [73]. having been set out in a Schedule to the State Act or otherwise by operation of the State Act or the Government Agreements Act, answers the description of "a law made by that Parliament". The third was that cl 32 of the State Agreement prescribes a requirement as to the "manner and form" in which a law is to be "made" by the Parliament of Western Australia. The argument can be rejected by reference to the third of those propositions without need to examine either of the first two propositions. In giving force to a requirement imposed by an existing law of the Parliament of a State concerning the manner and form in which a law is to be made by the Parliament of that State, s 6 of the Australia Act is not confined to ensuring compliance with the intra-mural processes of the Houses of Parliament so far as those processes might have been legislated. Like the proviso to s 5 of the Colonial Laws Validity Act before it, s 6 "relates to the entire process of turning a proposed law into a legislative enactment" and can be taken to have been "intended to enjoin fulfilment of every condition and compliance with every requirement which existing legislation imposed upon the process of law-making"60. That said, s 6 of the Australia Act is confined to ensuring compliance with requirements which an existing law of the Parliament of a State imposes upon a process of making a law by the Parliament of that State. Determinative for the purpose of s 6 of the Australia Act is that cl 32 of the State Agreement says nothing about any process by which the Parliament of Western Australia might make any law, including any law affecting any right which may have accrued under the State Agreement or affecting the operation of the State Act or the Government Agreements Act. Neither in form nor in substance does cl 32 of the State Agreement prescribe a requirement as to the manner or as to the form in which a law is to be made by the Parliament of Western Australia. Rather, cl 32(1) prescribes the parameters within which the parties to the State Agreement may agree to a variation of the State Agreement. Clause 32(2) and cl 32(3) then combine to prescribe a procedure that must be followed in order for a variation of the State Agreement agreed to by the parties within the parameters prescribed by cl 32(1) to take effect so as then to become subject to the operation of the State Act and the Government Agreements Act. That cl 32(2) should require the Minister in the Government of the State for 60 Attorney-General (NSW) v Trethowan (1931) 44 CLR 394 at 419. See also at 424, the time being responsible for the administration of the State Act to cause the variation to be tabled in each House of Parliament and that cl 32(3) should allow for disallowance of the variation by resolution of either House is hardly surprising given the political accountability of the Government to each House of Parliament for agreeing to the variation and given the legislated consequences that the variation coming into effect can have through the operation of the State Act or the Government Agreements Act. The involvement of the Houses of Parliament does not make the process for which the clause provides a process of making a law by the Parliament. Adapting language used by King CJ in West Lakes Ltd v South Australia61 to describe the operation of a provision of a contract entered into by the Government of South Australia which was required by a South Australian statute to "be carried out and have effect as if the provisions thereof ... were agreed to between the parties thereto and expressly enacted", cl 32 of the State Agreement "is a provision controlling the amendment of the [contract] by agreement", making "no reference, either expressly or impliedly, to the amendment by parliament of the [statute] itself". The operation of the State Act and the Government Agreements Act provides no basis upon which to "discern any indication of a legislative intention to take the drastic step of attempting to limit the legislature's freedom to legislate for the peace, order and good government of the State". Compatibility of provisions of the State Act with Ch III The plaintiffs' argument that s 9(1) and s 9(2) and s 10(4) to s 10(7) of the State Act are incompatible with Ch III of the Constitution has two principal strands. The plaintiffs argue that the provisions impair the institutional integrity of a State court to an extent that is incompatible with its status as a repository or potential repository of federal jurisdiction. They argue further or in the alternative that the provisions constitute an exercise of judicial power by the Parliament of Western Australia. They go on to argue that an exercise of judicial power by the Parliament of a State is precluded by the integrated judicial system prescribed by Ch III. To support both strands of their argument, the plaintiffs urge the need to consider the substantive operation of s 9(1) and s 9(2) and of s 10(4) to s 10(7) within the context of the State Act as a whole and against the background of the (1980) 25 SASR 389 at 398. See also Commonwealth Aluminium Corporation Ltd v Attorney-General [1976] Qd R 231 at 237. long history of disputation between the plaintiffs and the defendant concerning the operation of cl 6 and cl 7 of the State Agreement on past events. They point to the targeted application of the provisions to those past events. They point to the obvious purpose and effect of the provisions being to remove any liability of the defendant to the plaintiffs in damages for breach of the State Agreement by reference to those past events. Without denying the importance of considering the substantive operation of the impugned provisions within the context of the State Act as a whole or of considering the circumstances of the enactment of the Amending Act, there is a need to be clear about precisely what that importance is. The importance is as was identified in the following passage in H A Bachrach Pty Ltd v Queensland62 in relation to the Queensland Act impugned in that case, which purported to extinguish rights accrued under the Local Government (Planning and Environment) Act 1990 (Qld) that had been the subject of long-running and ongoing litigation between the plaintiff and the responsible Minister: "Whether the Act constitutes an impermissible interference with judicial process, or offends against Ch III of the Constitution, does not depend upon the motives or intentions of the Minister or individual members of the legislature. The effect of the legislation is to be considered in context, and the plaintiff is entitled to point to the litigious background for such assistance as may be gained from it. However, it is the operation and effect of the law which defines its constitutional character, and the determination thereof requires identification of the nature of the rights, duties, powers and privileges which the statute changes, regulates or abolishes. An adequate appreciation of the operation of the Act, and its proper characterisation, as a matter of substance and not merely of form, may require consideration of the history of the plaintiff's pursuit of its legal rights under the Planning and Environment Act. However, it does not advance the plaintiff's argument to attribute malevolent designs to the Minister or to other persons who promoted or supported the legislation." Properly considered within the context of the State Act as a whole against the background of the events leading up to the enactment of the Amending Act, the substantive operation and effect of each of s 9(1) and s 9(2) and s 10(4) to (1998) 195 CLR 547 at 561 [12] (footnote omitted). s 10(7) of the State Act goes no further than to ascribe new legal consequences to past events and thereby to alter substantive legal rights. In Duncan v Independent Commission Against Corruption63, four members of the Court pointed out by reference to a long line of cases, including H A Bachrach Pty Ltd v Queensland, that "[i]t is now well settled that a statute which alters substantive rights does not involve an interference with judicial power contrary to Ch III of the Constitution even if those rights are in issue in pending litigation". Much less does a statute which alters substantive rights involve an exercise of judicial power even if those rights have been the subject of a concluded arbitration or are the subject of a pending arbitration. In Kuczborski v Queensland64, the plurality had earlier pointed out that "to demonstrate that a law may lead to harsh outcomes, even disproportionately harsh outcomes, is not, of itself, to demonstrate constitutional invalidity" by reference to a principle "concerned to preserve the integrity of the judicial function". The institutional integrity of a court as an independent and impartial tribunal cannot readily be threatened by a mere alteration of substantive legal rights even if the alteration might be regarded as extreme or drastic. Given that none of the impugned provisions can be characterised as an exercise of judicial power, there is here, as in Duncan v New South Wales65, no occasion to examine the large question of whether the integrated nature of the judicial system prescribed by Ch III might preclude the exercise of judicial power directly by a State Parliament, as distinct from by a repository of State statutory power subject to the constitutionally entrenched supervisory jurisdiction of a State Supreme Court. Compatibility of provisions of the State Act with s 118 The plaintiffs' argument that s 9(1) and s 9(2) and s 10(4) to s 10(7) of the State Act are incompatible with s 118 of the Constitution focuses on the direct operation of s 10(4) and s 10(6) to deprive the arbitral awards dated 20 May 2014 and 11 October 2019 of legal effect and on the indirect operation of s 9(1) and (2015) 256 CLR 83 at 98 [26]. (2014) 254 CLR 51 at 116 [217]. (2015) 255 CLR 388 at 410 [51]. s 9(2) and of s 10(5) and s 10(7) independently to deprive those arbitral awards of legal effect. The argument of the plaintiffs involved three propositions. The first was that s 35(1) of the Commercial Arbitration Act 2013 (Qld) and uniform provisions in the Commercial Arbitration Act of each of New South Wales, Victoria, South Australia and Tasmania operated to recognise the two arbitral awards as binding on the parties from the dates on which the arbitral awards were made. The next proposition was that subsequent operation of s 9(1) and s 9(2) and s 10(4) to s 10(7) of the State Act to deprive the awards of legal effect was in conflict with the earlier and ongoing recognition of the arbitral awards as binding on the parties under the laws of those other States. The final proposition was that s 118 of the Constitution resolved that conflict between the law of Western Australia and the laws of those other States by invalidating the law of Western Australia to the extent of the conflict. The principle by which s 118 brought about that resolution of a conflict between State laws was not developed in the argument. The premise of the argument that the operation of s 9(1) and s 9(2) and s 10(4) to s 10(7) of the State Act conflicted with the earlier and ongoing operation of s 35(1) of the uniform Commercial Arbitration Act in each other State paid insufficient attention to the operation of s 36(1)(a)(i) of each uniform Commercial Arbitration Act to permit a court to refuse recognition or enforcement of an arbitral award at the request of the party against whom the arbitral award is invoked if that party furnishes proof to the court that "the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication in it, under the law of the State ... where the award was made". The law applicable to the arbitration agreement for the purposes of s 36(1)(a)(i) is the law as it stands when the jurisdiction of the court is invoked to refuse recognition or enforcement. Through the operation of s 36(1)(a)(i), s 35(1) therefore accommodates a change in the law applicable to the arbitration agreement at least up until the time that the jurisdiction of the court is invoked to refuse recognition or enforcement of an arbitral award. There being no suggestion in the special case that the law applicable to the arbitration agreement that resulted in each of the arbitral awards dated 20 May 2014 and 11 October 2019 was other than that of Western Australia, and there being no suggestion in the special case that the jurisdiction of any court has been invoked to refuse recognition or enforcement of either of those awards in any other State, the asserted conflict between s 9(1) and s 9(2) and s 10(4) to s 10(7) of the State Act and s 35(1) of the Commercial Arbitration Act of each of Queensland, New South Wales, Victoria, South Australia and Tasmania has not been demonstrated to exist. Noted in Sweedman v Transport Accident Commission66 was that an "adequate constitutional criterion ... which would resolve inconsistency between the laws of two or more States ... awaits formulation on another occasion where the circumstances of the propounded incompatibility of the State laws suggest a criterion by which that incompatibility is to be recognised and resolved". This is not that occasion. The role, if any, of s 118 of the Constitution in resolving such a conflict must await consideration if and when that occasion arises. Disposition The special case asks four questions. The first question asks whether the Amending Act is invalid or inoperative in its entirety. The answer is that it is not. The second question asks whether Pt 3 of the State Act or specified provisions of Pt 3 of the State Act are invalid or inoperative to any extent. The appropriate response is that s 9(1) and s 9(2) and s 10(4) to s 10(7) of the State Act are not invalid or inoperative to any extent and that the question is otherwise unnecessary to answer. The third question is contingent on an affirmative answer to the second, and therefore does not arise. The final question asks who should pay the costs of the special case. The answer is: the plaintiffs. 66 (2006) 226 CLR 362 at 407 [52]. Edelman Introduction The plaintiffs argued this special case, which was heard together with the related Palmer v Western Australia proceeding, in the original jurisdiction of this Court across four days. This special case involved a challenge by the plaintiffs, on numerous constitutional grounds, to the entirety of Pt 3 of the Iron Ore Processing (Mineralogy Pty Ltd) Agreement Act 2002 (WA) ("the State Act") as introduced by the Iron Ore Processing (Mineralogy Pty Ltd) Agreement Amendment Act 2020 (WA) ("the Amending Act") or, alternatively, to part or all of 21 sections inserted by the Amending Act into the State Act. The core purpose of the Amending Act is to extinguish the plaintiffs' contractual rights arising from the Iron Ore Processing (Mineralogy Pty Ltd) Agreement ("the State Agreement"). Those contractual rights had been vindicated in arbitral awards in favour of the plaintiffs. In an endeavour to provide what the Solicitor-General for the State of Western Australia described as "cascading layers of protection", the Parliament of Western Australia enacted the Amending Act, which contains elaborate provisions purporting to extinguish the plaintiffs' contractual rights and to exclude almost any legal proceeding that might seek to enforce those rights. In the course of doing so, the Amending Act takes extreme measures, including purporting to: exclude natural justice67; deny freedom of information68; exclude any proceedings for discovery or inspection of any documents69; and require the plaintiffs to pay costs incurred and to compensate for various losses suffered by the State of Western Australia, notwithstanding that those costs incurred and losses suffered might derive from the State's own breach of contract as found by the arbitrator70. I have had the benefit of reading in draft the joint reasons of the other members of this Court, which set out the background to this proceeding and the relevant provisions of the State Act, the Amending Act, and the State Agreement. On the issue of whether this Court should engage with many of the constitutional questions raised by the parties, I agree with the joint judgment that a restrained approach should be adopted. In circumstances in which the plaintiffs had standing to raise the broad range of issues concerning the entirety of the Amending Act and 67 State Act, ss 12(2), 20(2). 68 State Act, ss 13(1)-13(3), 21(1)-21(3). 69 State Act, ss 13(4), 18(6)-18(7), 21(4). 70 State Act, ss 14, 15, 22, 23. Edelman in a context in which all parties to this proceeding (including all interveners) sought to have this dispute resolved on wider grounds, I explain below the additional reasons that I approach the adjudication of this special case on a restrained basis. Putting to one side challenges concerning the rule of law and the alleged punitive nature of the Amending Act, which are considered in Palmer v Western Australia71, the only challenges by the plaintiffs which are appropriate to determine in this special case are: (i) the challenge to the validity of the Amending Act on the basis that it failed to comply with the manner and form requirement prescribed by the State Act; (ii) the challenge to ss 9(1), 9(2), and 10(4) to 10(7) of the State Act (which can be described, as the State of Western Australia did, as the "Declaratory Provisions") on the basis that the provisions are incompatible with Ch III of the Constitution; and (iii) the challenge to the Declaratory Provisions on the basis that they are contrary to s 118 of the Constitution. For the reasons below, each of those challenges fails. The decision to enact the Declaratory Provisions may reverberate with sovereign risk consequences. But those consequences are political, not legal. The duties and powers of this Court to decide cases General principles In Attorney-General for NSW v Brewery Employes Union of NSW72, Isaacs J said: "the Court cannot be called on, or with propriety assume, to question the legality of what Parliament has enacted as the will of the nation unless such a determination is absolutely necessary". His Honour was there speaking of the need for this Court to avoid adjudicating legal questions raised by a party who does not have a "legal cause of complaint"73. In other words, this Court will not adjudicate complaints by a party who has no standing. One circumstance in which a party will usually have no standing is where the answer to the question sought to be adjudicated will not affect the party's interests, in the sense of rights, privileges, powers, immunities, or correlative concepts. [2021] HCA 31. (1908) 6 CLR 469 at 553. (1908) 6 CLR 469 at 554. Edelman A similar principle applies where a party seeks to challenge provisions beyond those that affect their interests: to "roam at large" over the statute74. There is rarely a basis for a court to adjudicate upon the validity of provisions which do not affect the interests of that party. One exception is where the provisions which do not affect the party's interests are inseverably tied to those that do75. Like a lack of standing, this principle involves the constitutional boundaries of adjudicative authority in an action instigated by a party whose interests are unaffected, in whole or in part, by the resolution of the action. A different question arises where a party with legal standing challenges provisions that affect that party's interests but it is possible for the court to resolve the dispute without deciding important constitutional issues. In that circumstance, the question is no longer one of the constitutional boundaries of adjudicative authority. Instead, the court must choose whether to exercise restraint in deciding the dispute. That choice requires evaluation of different factors. As an evaluative choice, it is unsurprising that, as this Court said in Zhang v Commissioner of the Australian Federal Police76, "different views have been expressed by different members of the Court as to the application of the practice [of adjudication] in particular cases". One consideration that can weigh powerfully in favour of broader adjudication is whether a decision upon an otherwise undecided ground could have a significant effect upon the interests of a party. For instance, in Jones v The Queen77, Mason CJ, Brennan, Dawson and Toohey JJ said that the duty of a court of criminal appeal to exercise its jurisdiction precluded such a court from allowing an appeal and ordering a retrial on one ground where other grounds might have entitled the appellant to an acquittal. An example is an appeal from conviction that is brought before this Court upon two grounds where the first ground turns only upon the facts of the case but the second ground involves constitutional issues. If success on the first ground would lead to a retrial but success on the second ground would require an acquittal, then it should be a very rare case in which this Court would avoid adjudication of the constitutional ground. There are other significant considerations favouring adjudication of constitutional issues even if the dispute can be resolved on narrower grounds. 74 The Real Estate Institute of NSW v Blair (1946) 73 CLR 213 at 227; Pape v Federal Commissioner of Taxation (2009) 238 CLR 1 at 69 [156]. 75 British Medical Association v The Commonwealth (1949) 79 CLR 201 at 258. (2021) 95 ALJR 432 at 438 [23]; 389 ALR 363 at 369. (1989) 166 CLR 409 at 411. Edelman A second consideration is whether there is a division within the Court leaving a minority of Justices for whom "it is necessary to deal with a range of issues to dispose of the appeal"78. It would be desirable in those circumstances for the range of issues to be considered by the whole Court. A third consideration concerns the role of this Court. Whilst the primary role of this Court is to resolve disputes between the parties, this Court does so by developing the law in a principled way that aims to guide both the public and lower courts. For instance, the premise of s 35A(a) of the Judiciary Act 1903 (Cth) is that, in its appellate jurisdiction, this Court will not eschew questions of public importance, or issues upon which lower courts are divided, in favour of resolving disputes on the basis of narrower issues. The greater the magnitude of the issue involved, and the more pressing the matters that it raises, the more compelling will be the case for this Court to consider the issue rather than to leave it in the shadows to await future adjudication. A fourth consideration is the sense of injustice to the parties that could be engendered by the feeling that this Court's decision has not matched the procedure in which they participated, particularly if the decisive ground in the Court's reasons is only peripheral to the submissions made by the parties79. This fourth consideration may have been the foundation for the submission made by the Solicitor-General of the Commonwealth in this case that "where a plaintiff with admitted standing puts in issue the constitutional validity of provisions that affected their rights ... there needed to be some reason we could advance persuasively to the Court why the point should not be decided". On the other hand, there are sometimes powerful considerations that weigh against this Court deciding a constitutional issue where a matter can be resolved on some other, narrower basis. One circumstance is where the Court has insufficient facts or legal argument upon which to engage in a proper examination of a constitutional issue. An example is Lambert v Weichelt80, in which the Stipendiary Magistrate had dismissed an information against the defendant on the basis that any prohibition upon the alleged sale by the defendant by the Prices Regulation Act 1948 (Vic) would be contrary to s 92 of the Constitution. This Court discharged the order nisi because there was not enough evidence to support a conviction. The lack of such evidence meant that there were insufficient facts from which to consider the effect on that legislation of s 92 of the Constitution. 78 Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd (2001) 207 CLR 1 at 20 [34]. 79 See R (Osborn) v Parole Board [2014] AC 1115 at 1149 [68], quoting Waldron, "How Law Protects Dignity" (2012) 71 Cambridge Law Journal 200 at 210. (1954) 28 ALJ 282 at 283. Edelman Similar issues may arise where the Court does not have adequate legal argument on the constitutional issue before it, although one response to such a circumstance has historically been for the Court to write to the parties inviting further written submissions and occasionally also to invite further oral submissions. A second consideration weighing against adjudication of constitutional issues when the dispute could be resolved more narrowly is the converse of the second consideration favouring adjudication. It arises where a majority of the Justices on the Court have decided a case on a narrow ground and there is a path open for a minority of the Justices also to decide the case on that narrow ground. Just as it can be undesirable for a majority of Justices to avoid adjudication of a point that it is necessary for a minority of Justices to decide, so too it can be undesirable for a minority of Justices to express views on a point that is not necessary for their decision. A third consideration weighing against adjudication of constitutional issues arises where there is a concern about a "risk of premature interpretation of statutes on the basis of inadequate appreciation of their practical operation"81. But rather than avoiding the constitutional issue altogether, this concern can be addressed by considering: (i) whether the challenged provision does not affect the rights of the party impugning it and whether it could be severed from other challenged provisions which do; (ii) whether the challenged provision could be read down to have a narrower meaning if necessary to ensure validity; or (iii) whether the challenged provision in its application to the facts of the case is constitutionally valid and is a provision that is "applied distributively"82 so that it can be disapplied from any otherwise invalid application. In each of these circumstances, the ability of the Court to sever, read down, or disapply the provision means that a consideration of any circumstance in which it might be invalid can be left to when those circumstances actually arise83. This consideration, and the associated concern of premature interpretation, should not be overstated. Rules of law, no less of constitutional law, are almost always stated at a level of generality beyond the particular facts to which they apply. That is what makes rules of law general rules and prevents the law from disintegrating into a wilderness of single instances. The circumstance in which this consideration is likely to be most appropriate is where a legislative provision does not appear to be facially compliant with a 81 Tajjour v New South Wales (2014) 254 CLR 508 at 588 [174]. 82 Bank of NSW v The Commonwealth (1948) 76 CLR 1 at 369. 83 LibertyWorks Inc v The Commonwealth (2021) 95 ALJR 490 at 511 [89]; 391 ALR 188 at 209-210. See Acts Interpretation Act 1901 (Cth), s 15A. Edelman constitutional restriction but there are insufficient facts to adjudicate upon the areas of potential invalidity beyond the circumstances of the case84. This case The core provisions of the State Act, as inserted by the Amending Act, are those that extinguish the plaintiffs' extant rights arising from either (i) the first or second Balmoral South proposal or (ii) the arbitrations or arbitration agreement. Those provisions, being the Declaratory Provisions, are (i) ss 9(1) and 9(2) and (ii) ss 10(4) to 10(7). At a minimum, it is necessary to adjudicate upon the validity of those provisions. The question becomes whether this Court should go further, as the plaintiffs urge. The plaintiffs' primary submission was that this Court should adjudicate upon the validity of the whole of the Amending Act. Their alternative submission was that this Court should adjudicate upon any or all of the particular provisions that the plaintiffs challenged on various grounds. These provisions and grounds were set out in a schedule that the plaintiffs provided in response to this Court's request for precise identification of the grounds of invalidity with respect to each challenged provision: ss 8(3), 11(1)-11(4), 11(7), 12(1)-12(2), 12(4), 12(7), 13(4)-13(5), 13(8), 14(4), 14(7)(b), 15(2), 15(5)(b), 16(3), 17(4)-17(5), 21(4)-21(5), 21(7)-21(8), 22(4), 22(7)(b), 23(2), 23(5)(b), 24(3), 25(4)-25(5), 27, and 30-31. The plaintiffs' schedule put their numerous particular challenges only as an alternative. As the plaintiffs explained in the preamble to their schedule, their "primary submission is that the validity of the [Amending] Act is to be considered in toto", and "one does not leave out of account that the specifically impugned provisions are part of one Act and operate together" and, in many cases, "particularly references to the application of the Kable principle, as well as the limitation concerning the rule of law ..., one is looking at the Act as a whole". The plaintiffs made two submissions in support of their primary submission that this Court should approach its adjudicative task on the broader basis of the validity of the Amending Act as a whole. First, the plaintiffs relied upon factors favouring broader adjudication and submitted that it was appropriate for this Court to consider the validity of the entirety of the Amending Act or the numerous provisions that affected their rights. Secondly, the plaintiffs submitted that, at least in relation to their grounds of challenge based upon the rule of law and the institutional integrity of the Supreme Court of Western Australia, the provisions 84 Palmer v Western Australia (2021) 95 ALJR 229 at 275 [227]; 388 ALR 180 at 235. Edelman of the Amending Act were inseverable and required examination of "the whole of the Act in question and all of the features which it present[s]"85. As to the first submission, the extinguishment of the plaintiffs' rights by the Declaratory Provisions is the central feature of the Amending Act. The decision of this Court to focus upon the validity of those provisions, rather than on other possibly invalid provisions that affect the same rights of the plaintiffs, is not, as Latham CJ said in a related context86, a "selection among ... possibilities [which] would result in the content of the law depending upon the mere choice of the court". As I have reached the same conclusion as the other members of this Court that the Declaratory Provisions are valid, and in light of the speculative nature of the effect upon the plaintiffs' interests of some other provisions of the Amending Act described in the joint reasons, there is a strong case for restraint from adjudication upon the validity of those other provisions or upon the validity of the Act as a whole. The second submission β that the provisions of the Amending Act are inseverable, requiring examination of the whole Act β cannot be accepted because the Amending Act expressly permits any provision that is invalid in its application to be disapplied to that extent87 and, failing that, to be severed88. In the plaintiffs' third further amended statement of claim and notice of a constitutional matter, they alleged that these disapplication and severance provisions are invalid for three reasons. First, it was said that there would be "one version of the [A]mending Act to be applied in matters in federal jurisdiction, and another version in matters in State jurisdiction". Such bifurcation, the plaintiffs pleaded, is beyond the legislative power of the Parliament of Western Australia. Secondly, the plaintiffs alleged that the provisions are likely to result in a version of the Amending Act that the Parliament of Western Australia could never have intended to enact. Thirdly, the plaintiffs pleaded that the provisions "place[] the judiciary into the position of a legislative body". In relation to the severance provision in s 8(5), there would be a powerful argument that s 8(5) would be invalid, at least in so far as it purported to permit severance, particularly by a court exercising federal jurisdiction, if "the Statute 85 Condon v Pompano Pty Ltd (2013) 252 CLR 38 at 91 [129]. 86 Pidoto v Victoria (1943) 68 CLR 87 at 110. 87 State Act, s 8(4): "does not apply to a matter or thing to the extent (if any) that is necessary" to avoid invalidity. 88 State Act, s 8(5): "regarded as divisible from, and capable of operating independently of, the provision, or the part of a provision, that is not valid". Edelman with the invalid portions omitted would be substantially a different law as to the subject matter dealt with by what remains from what it would be with the omitted portions forming part of it"89. To permit severance in such circumstances would be "in effect making a new law"90 and would cross the divide between adjudicating and legislating91. One circumstance in which this divide will have been crossed is where the objective purpose of the legislation changes after the provisions are severed. If the removal of some provisions would change the objective purpose of the legislation then the judiciary would be creating a new law by severing the provisions to the extent of invalidity. Parliament could not, by the device of a severance provision, confer such legislative power upon a court, at least when the court is exercising federal jurisdiction. In relation to whether any other invalid provisions of the State Act can be severed from the Declaratory Provisions, the plaintiffs' three arguments concerning the invalidity of s 8(5) ultimately all reduce to the point of whether the severance would create a new law. The plaintiffs' arguments should not be accepted. The plaintiffs referred to some provisions that were said to be inseverable but did not explain how those provisions were so interdependent with the Declaratory Provisions, or how the removal of those provisions would so change the purpose of the Amending Act, that severance would create a substantially new law. The severance from the Declaratory Provisions of any or all of the other provisions of the Amending Act would not create a new law. This can be illustrated by reference to provisions to which the parties referred in submissions on this issue, being: (i) those described by the State of Western Australia as the "No Liability Provisions", including ss 11(1) and 11(2), which exclude and extinguish any liability of the State for matters connected with the subject matter of the Declaratory Provisions; and (ii) those described as the "Admissibility and Discovery Provisions", ss 18(5) to 18(7), which purport to make documents and oral testimony connected with a protected matter inadmissible against the State 89 R v Commonwealth Court of Conciliation and Arbitration; Ex parte Whybrow & Co (1910) 11 CLR 1 at 27. See also Bell Group NV (In liq) v Western Australia (2016) 260 CLR 500 at 527 [71]; Clubb v Edwards (2019) 267 CLR 171 at 314-316 90 Owners of SS Kalibia v Wilson (1910) 11 CLR 689 at 699. 91 Owners of SS Kalibia v Wilson (1910) 11 CLR 689 at 709, 715; Australian Railways Union v Victorian Railways Commissioners (1930) 44 CLR 319 at 386; Pidoto v Victoria (1943) 68 CLR 87 at 111; Bank of NSW v The Commonwealth (1948) 76 CLR 1 at 372; Clubb v Edwards (2019) 267 CLR 171 at 315 [419]. Edelman and to prevent any person being compelled to discover such documents or to give such testimony. The association between the Declaratory Provisions and the No Liability Provisions and Admissibility and Discovery Provisions might be close, especially in proceedings in relation to the subject matter of the Declaratory Provisions. Nevertheless, for two reasons, the severance of the No Liability Provisions and the Admissibility and Discovery Provisions would not substantially alter the nature of the Amending Act. First, although the purpose of the Amending Act is not expressly stated in the Act itself, the structure of the Amending Act, which the Solicitor-General for Western Australia described as providing "cascading layers of protection", reveals the purpose of extinguishing the plaintiffs' rights for the reason that, as the Attorney-General said when introducing the legislation, the "government is not prepared to risk the financial consequences to the state of an adverse arbitral award"92. Secondly, in fulfilling the purpose of avoiding State liability, the Act relies upon different protections related to the basic distinction between an underlying right and the process of enforcing that right. The Declaratory Provisions concern the former. The other provisions concern the latter. The Declaratory Provisions are severable. The manner and form required for the Amending Act The plaintiffs submitted that the Amending Act was of no force or effect because it failed to comply with the requirements of s 6 of the Australia Act 1986 (Cth)93. It was not suggested that there was any other valid source of power by which a State Parliament might bind itself to a manner and form requirement, or affect its own composition, in a manner applicable to the enactment of a later 92 Western Australia, Legislative Assembly, Parliamentary Debates (Hansard), 11 August 2020 at 4598. 93 And, to the extent necessary, the Australia Act 1986 (UK). Edelman law94. There was also no dispute that s 6 was binding upon the Parliament of Western Australia95. Section 6 relevantly provides: "... a law made after the commencement of this Act by the Parliament of a State respecting the constitution, powers or procedure of the Parliament of the State shall be of no force or effect unless it is made in such manner and form as may from time to time be required by a law made by that Parliament, whether made before or after the commencement of this Act". The starting point is to consider whether the State Act was a "law made by [the] Parliament [of Western Australia]" that required a later law purporting to amend the State Act to follow a prescribed "manner and form". The positions of the parties reflected two different approaches to the characterisation of the State Act with different effects upon the alleged manner and form provision in cl 32 of the State Agreement. The first approach, taken by the State of Western Australia and the interveners, and supported by intermediate appellate court authority, is that the clauses of the State Agreement have a contractual character, and that the State Act did not imbue any of those provisions with any other character. The second approach, taken by the plaintiffs, is that the State Act imbued at least some of the provisions of the State Agreement with a further character, being that of statute law. The plaintiffs pointed to s 3(a) of the Government Agreements Act 1979 (WA) and ss 4(3) and 6(3) of the State Act. Section 3 of the Government Agreements Act requires that Government agreements (including the State Agreement) "operate and take effect ... notwithstanding any other Act or law" and that "any purported modification of any other Act or law" in a provision of a Government agreement "shall operate and take effect so as to modify that other Act or law" for the purposes of the Government agreement. Sections 4(3) and 6(3) of the State Act provide that, without limiting or otherwise affecting the operation 94 Compare Bribery Commissioner v Ranasinghe [1965] AC 172 at 197, discussed in Victoria v The Commonwealth and Connor (1975) 134 CLR 81 at 163-164; Western Australia v Wilsmore (1982) 149 CLR 79 at 96. See also Attorney-General (NSW) v Trethowan (1931) 44 CLR 394 at 419-420, 429-430; Goldsworthy, The Sovereignty of Parliament: History and Philosophy (1999) at 14-15; Lee, "'Manner and Form': An Imbroglio in Victoria" (1992) 15 University of New South Wales Law Journal 95 cf Johnston, "Method or Madness: Constitutional Perturbations and Marquet's Case" (2004) 7 Constitutional Law and Policy Review 25 at 33. Edelman of the Government Agreements Act, the State Agreement and its variations "operate[] and take[] effect despite any other Act or law". The first approach and the first character of cl 32 As an agreement between eight parties, including the Premier acting for and on behalf of the State of Western Australia, the State Agreement has a character as a private agreement, in the sense that it involves private undertakings made by parties only to each other. The State of Western Australia focused upon this private character of the State Agreement. Western Australia submitted that if "the State Agreement is statute law, it is difficult to see how the plaintiffs could ever say that they had a claim for contractual damages arising from breach of contract". Western Australia also submitted that any enforcement of the State Agreement by a third party would be "a matter of contract[] law"96. In its character only as a private agreement, these submissions are correct. It is therefore correct that the enforceability of cl 32, in its character as a provision of a contract, is a matter of contract law only. In that character, cl 32 is plainly not a "law made by [the] Parliament" within s 6 of the Australia Act: the Parliament of Western Australia is not a party to the State Agreement. The first approach to the characterisation of the State Agreement is that the provisions have only this contractual effect. The State of Western Australia, supported by the Attorneys-General of the Commonwealth, the State of Victoria, the State of Queensland, the Northern Territory, and the State of New South Wales, submitted that the provisions of the State Agreement operated merely to "clear[] any legislative obstacle out of the path of the [State Agreement] taking effect". On this interpretation, although the State Agreement is part of the State Act97, it is only part of the State Act for the limited purpose of ensuring that the provisions of the State Agreement remain enforceable as a matter of contract law. Some authorising legislation is plainly intended to adopt this first approach of having only contractual effect. An example is s 3 of the War Service Land Settlement Agreements Act 1945 (Cth), considered in P J Magennis Pty Ltd v The Commonwealth98, which had provided that the execution of agreements between the Commonwealth and the States substantially in the form contained in the schedules "is hereby authorized". This provision went no further than to secure 96 See also Property Law Act 1969 (WA), s 11. Interpretation Act 1984 (WA), s 31(2). (1949) 80 CLR 382. Edelman parliamentary approval for the transaction. As Dixon J said99, although dissenting as to the result of the case, s 3 "certainly [did] not convert the terms of the agreement into the provisions of a law". The same reasoning will usually apply to a statutory provision that does no more than approve or ratify an agreement100. The obligations remain purely contractual and subject to the rules of contractual interpretation. The legislative effect is only the removal of any common law or statutory obstacles to enforceability of the agreement, such as a lack of power of a contracting party or the illegality of any of the contractual provisions101. The second approach and the second character of cl 32 The second approach was taken by the plaintiffs. They submitted that the State Act or the Government Agreements Act, or both, gave provisions of the State Agreement a separate character as having statutory force in addition to contractual force. Underlying the plaintiffs' submission was the valid assumption that, by conferring a separate statutory character upon some or all of the provisions, the State Act or the Government Agreements Act did not deprive the provisions of their contractual force (with obstacles to contractual enforcement removed) and thus did not deprive the parties of their contractual rights102. Some legislation plainly takes this second approach, conferring upon provisions of a Government agreement not merely contractual force with statutory obstacles to their contractual force removed but also statutory force. In Caledonian Railway Co v Greenock and Wemyss Bay Railway Co103, the House of Lords considered legislation, one provision of which their Lordships described in the following terms: "The said agreement shall be, and the same is hereby sanctioned and confirmed, and shall be as valid and obligatory upon the company and the Caledonian Railway Company respectively, as if those companies had been authorized by this Act to enter into the said agreement, and as if the same had been duly executed by them after the passing of this Act. (1949) 80 CLR 382 at 410. 100 See Placer Development Ltd v The Commonwealth (1969) 121 CLR 353 at 357, 368; Sankey v Whitlam (1978) 142 CLR 1 at 31, 76-77. 101 Davis & Sons v Taff Vale Railway Co [1895] AC 542 at 552-553. 102 cf Mann v Paterson Constructions Pty Ltd (2019) 267 CLR 560 at 623 [159]. 103 (1874) LR 2 Sc and Div 347 at 349. Edelman And it shall be lawful for the company (that is, the Greenock and Wemyss Bay Railway Company) and the Caledonian Railway Company respectively, and they are hereby required, to implement and fulfil all the provisions and stipulations in the said agreement contained." The Lord Chancellor, with whom the other Lords agreed, said of the first paragraph of the provision that it did "no more than give statutory validity to the agreement" (the first approach) but that it was "clear beyond the possibility of argument" that, with the agreement being scheduled to the Act and the requirements of the second paragraph, the agreement became "as obligatory and binding on the two companies as if those provisions had been repeated in the form of statutory sections"104 (the second approach). In some Australian legislation, it is clear beyond rational argument that Parliament intended that some or all of the provisions of a Government agreement have the force of statute law in addition to their contractual force (the second approach). Examples are statutes which provide that the provisions of a scheduled agreement shall "have the force of law as though the Agreement were an enactment of this Act"105. As will be seen, Parliament might also give the force of law to only some of the contractual provisions, namely those contractual provisions that purport to modify other laws. The background to the Government Agreements Act The difference between the two approaches to statutory provisions that implement or give effect to Government agreements was squarely confronted by this Court in Sankey v Whitlam106. That case concerned a financial agreement between the Commonwealth and the States, first made in 1927 and scheduled to the Financial Agreement Act 1928 (Cth), and "approved" by s 2 of that Act107. Subsequently, the agreement was "validated"108 following an amendment to the Constitution that had inserted s 105A, which concerns agreements made between 104 (1874) LR 2 Sc and Div 347 at 349. 105 See Commonwealth Aluminium Corporation Ltd v Attorney-General [1976] Qd R 231 at 234. See also West Lakes Ltd v South Australia (1980) 25 SASR 389 at 402; Brown v Western Australia (2012) 208 FCR 505 at 531 [128]. 106 (1978) 142 CLR 1. 107 And subsequently by various statutes including the Financial Agreement Act 1944 (Cth). 108 Financial Agreement Validation Act 1929 (Cth). Edelman the Commonwealth and the States with respect to the public debts of the States. Section 105A(5) provides that "[e]very such agreement and any such variation thereof shall be binding upon the Commonwealth and the States parties thereto notwithstanding anything contained in this Constitution or the Constitution of the several States or in any law of the Parliament of the Commonwealth or of any State". One issue in Sankey v Whitlam was whether the legislative "approval" of the Financial Agreement or the operation of s 105A(5) had the effect that the Financial Agreement was a "law of the Commonwealth" for the purposes of s 86(1)(c) of the Crimes Act 1914 (Cth). Aickin J observed that although the distinction between the two approaches was "a fine one and not perhaps wholly satisfactory" it was nevertheless a distinction which was well established by judicial decisions109. The members of this Court who considered the issue all held that the Financial Agreement had not become a law of the Commonwealth by legislation or by s 105A of the Constitution110. As to the latter, Gibbs A-CJ and Mason J both relied upon the terms of s 105A as making it clear that s 2 did no more than approve the Financial Agreement111: the provision in s 105A(3) for the Commonwealth Parliament to "make laws for the carrying out by the parties" of such an agreement suggested, in the words of Mason J, "that the imposition of a statutory obligation to perform the Agreement was a matter left for Parliament to determine"; and the provision in s 105A(4) that any such agreement may be varied or rescinded by the parties meant that "[l]ike every contract it continues to be capable of variation or rescission by the parties"112. The year after the decision in Sankey v Whitlam, a similar interpretation issue arose in the Full Court of the Supreme Court of Western Australia in Margetts v Campbell-Foulkes113. The Full Court considered an appeal by members of an environmental group who, by standing in front of a bulldozer, had obstructed a company from building an alumina refinery. They were convicted of an offence under s 67(4) of the Police Act 1892 (WA), which, among other things, prohibited any person from preventing or obstructing an activity which another person was lawfully entitled to do "pursuant to any law of the State or of the Commonwealth" which granted a "licence, permit or authorisation". One issue was whether an 109 (1978) 142 CLR 1 at 106. See also at 89 (Mason J). 110 (1978) 142 CLR 1 at 30-32, 77-78, 90-91, 106. 111 (1978) 142 CLR 1 at 29, 90. 112 (1978) 142 CLR 1 at 90. 113 Unreported, Supreme Court of Western Australia, 29 November 1979. Edelman agreement between a company and the State of Western Australia, which had been "ratified" by State legislation114, was a "law of the State". The Full Court allowed the appeal on the ground that the company's activity had not been "authorised" by a letter which approved the work, where approval was a condition precedent to the obligation to perform work under the agreement. Hence, the Court did not need to decide whether the agreement was a law of the State. Nevertheless, Wickham J, with whom Jones and Smith JJ agreed, described the question as to whether the ratified agreement was a law of the State as "debatable"115. Jones J also observed that the point had been "debated before us at length"116. Counsel for the successful appellant in that case, Messrs French and Johnston, subsequently observed in an academic article117 that the "State Government then seems to have demonstrated its anxiety about the status of special development agreements ratified by Acts in that almost immediately after the handing down of [Margetts] it introduced and had passed by Parliament the [Government Agreements Act 1979 (WA)]". They described the evident effect of the Government Agreements Act as being that "for Western Australian purposes, the agreements concerning major mining developments which are ratified by legislation will have the force of law". When introducing the Government Agreements Bill 1979 (WA) into the Parliament of Western Australia, the Minister for Industrial Development said that the consequence of the decision in Margetts was that, "in a number of our State agreements in which there are provisions whereby Parliament has simply ratified or approved an agreement, the terms of those agreements may not have the force of law. This could have serious significance."118 The concern appears to have been that a provision of a Government agreement that purported directly to modify a statutory provision could not have effect unless the contractual provision also had statutory force. There is a difference between removing a statutory obstacle to a contractual agreement and giving a contractual term legal effect so that it can 114 Alumina Refinery (Wagerup) Agreement and Acts Amendment Act 1978 (WA), s 3. 115 Unreported, Supreme Court of Western Australia, 29 November 1979 at 6. 116 Unreported, Supreme Court of Western Australia, 29 November 1979 at 2. 117 Johnston and French, "Environmental Law in a Commonwealth-States Context: The First Decade" (1980) 2(2) Australian Mining and Petroleum Law Journal 77 at 87. 118 Western Australia, Legislative Assembly, Parliamentary Debates (Hansard), 4 December 1979 at 5705. Edelman modify existing legislation. Under the first approach described above119 the "ratified" contractual provisions of a Government agreement would have no statutory force and could not effect any modification. The Minister gave examples of serious consequences that were apprehended: provisions consolidating mining tenements; provisions making different rates payable to local authorities than otherwise required by legislation; and provisions expressly varying or overriding the operation of various State laws. The overarching purpose of the Government Agreements Act was to give statutory effect, where it was needed, to the provisions of Government agreements. As the purpose of s 3 of the Government Agreements Act was described in the Legislative Council, it was "simply closing a loophole" to "put ... beyond legal doubt" that a Government agreement would become the law of the State120. The Government Agreements Act The Government Agreements Act defines a "Government agreement" in s 2 in terms which include "an agreement scheduled to ... an Act the administration of which is for the time being ... approved by the Governor to be placed under the control of, the Minister". Section 3 of the Government Agreements Act relevantly provides that, "[f]or the removal of doubt": each provision of a Government agreement shall operate and take effect, and shall be deemed to have operated and taken effect from its inception, according to its terms notwithstanding any other Act or law; and any purported modification of any other Act or law contained, or provided for, in such a provision shall operate and take effect so as to modify that other Act or law for the purposes of the Government agreement, and shall be deemed to have so operated and taken effect from its inception, according to its terms notwithstanding any other Act or law." The ordinary meaning of the words of s 3 reflects the second approach121. First, s 3(a) removes any common law or statutory obstacles to the contractual operation of the provisions of a Government agreement. Secondly, and in addition, s 3(b) gives effect to a provision of a Government agreement as a statutory provision, "notwithstanding any other Act or law", to the extent that the provision 119 See above at [121]-[124]. 120 Western Australia, Legislative Council, Parliamentary Debates (Hansard), 6 December 1979 at 5906. 121 See above at [125]-[127]. Edelman modifies another Act or law. That could only be possible if the provision of the Government agreement had the force of statutory law. Section 4(2) of the Government Agreements Act created an offence specifically related to Government agreements including where a person, without lawful authority, prevents, obstructs, or hinders any activity which is being carried on pursuant to a Government agreement. One assumption that permeated some of the parliamentary debate with respect to the introduction of s 4 was that the provision was not necessary to resolve the doubts expressed in Margetts about whether provisions of a Government agreement had the force of law. The reason it was thought that s 4 was not necessary was that s 3 of the Government Agreements Act122 made provisions of the Government agreement a "law of the State" sufficient for the prosecution in Margetts to "have been sustained" under s 67 of the Police Act. It was therefore argued that it was unnecessary to create a new offence in s 4 with increased penalties of a $5,000 fine or 12 months' imprisonment123. This assumption is dubious. It may be that the relevant provisions of the Government agreement considered in Margetts did not purport to modify any existing law and hence possibly did not obtain the independent force of law. But, in any event, s 4 created an independent offence which removed any such issue and provided for penalties which were "severe" and which would "reflect the seriousness with which the Government views these deliberate acts of obstruction"124. For these reasons, the context, purpose, and ordinary meaning of the words of s 3 of the Government Agreements Act all support the second approach. The contrary conclusion, however, was reached in Re Michael; Ex parte WMC Resources Ltd125. In that case, Parker J, with whom Templeman and Miller JJ agreed126, carefully considered the various judgments in Sankey v Whitlam before concluding that the legislative ratification of the agreement in Re Michael did not give statutory force to any of its terms, leaving the agreement "binding on the 122 Sections 1 and 2 are concerned with the citation of the Act and interpretation. 123 Western Australia, Legislative Assembly, Parliamentary Debates (Hansard), 5 December 1979 at 5842. 124 Western Australia, Legislative Assembly, Parliamentary Debates (Hansard), 4 December 1979 at 5706. 125 (2003) 27 WAR 574. 126 (2003) 27 WAR 574 at 592 [73], [74]. Edelman parties to the contract and not on others"127. His Honour then asserted that s 3 of the Government Agreements Act operated in the same way128. Perhaps due to a lack of submissions on the point, neither in Re Michael nor in the cases which followed it129 did the courts closely consider the context, purpose, or ordinary meaning of the words of s 3. In so far as those authorities recognise that Government agreements to which s 3 applies continue to have contractual effect, they are correct. In so far as they conclude that such Government agreements can have no other character, and hence no force or effect as statutory provisions to modify other laws, they should be overruled. The State Act On 30 June 2003, the Governor notified for public information the approval of the administration of the State Act, placed under the control of the Minister for State Development130. Section 3 of the Government Agreements Act removed common law or statutory obstacles to the contractual effect of the State Agreement and gave statutory force to the provisions of the State Agreement that modified other laws. The operation of s 3, however, did not mean that there was no remaining need for the provisions of the State Act in relation to the terms and variations of the State Agreement which: "ratif[y]" the State Agreement131; authorise the implementation of the State Agreement132; and provide that, without limiting or otherwise affecting the application of the Government Agreements Act, the State Agreement "operates and takes effect despite any other Act or law"133. These statutory provisions resolved any issues that might arise concerning conflict between the provisions of the State Agreement and statutes that have been enacted subsequent to the Government Agreements Act in 1979. It is a matter of statutory interpretation as to whether Parliament intended to take the first approach, merely removing common law or statutory obstacles to the operation of a Government agreement, or the second approach, which goes 127 (2003) 27 WAR 574 at 581 [26]. 128 (2003) 27 WAR 574 at 581 [29]. 129 See Commissioner of State Revenue v OZ Minerals Ltd (2013) 46 WAR 156 at 189-190 [179], 204 [275]; Western Australia v Graham (2016) 242 FCR 231 at 240 [41]. Compare West Lakes Ltd v South Australia (1980) 25 SASR 389 at 398. 130 Western Australian Government Gazette, No 112, 30 June 2003 at 2639, 2647. 131 State Act, ss 4(1), 6(1). 132 State Act, ss 4(2), 6(2). 133 State Act, ss 4(3), 6(3). Edelman further by also making some or all of the provisions of a Government agreement binding as statute law. Like all statutory interpretation, there is rarely any magic in the use of particular words. Words must be read and interpreted in their context and in light of Parliament's purpose. A literal reading of the provisions of the State Act suggests that the intention of Parliament was merely to remove any common law or statutory obstacles in the path of any provision of the State Agreement. The ordinary meaning of "ratified", "authorised", and "operates and takes effect despite any other Act or law" suggests that the intention was merely to remove common law or statutory obstacles. But two important matters of context support a wider intention consistent with the second approach. First, the opening words of ss 4(3) and 6(3) of the State Act β "[w]ithout limiting or otherwise affecting the application of the Government Agreements Act 1979" β reveal an intention that the State Act have a cognate operation with the Government Agreements Act by giving statutory effect to contractual provisions that expressly or impliedly purport to modify State laws. Secondly, there are numerous provisions of the State Agreement that cannot "operate[] and take[] effect" merely by removal of statutory obstacles: those provisions modify other laws and require the force of statute law to take effect according to their terms. The intention of Parliament to give effect to those contractual provisions which expressly or impliedly modify other laws must include an intention to give those contractual provisions the force of law. Numerous examples can be given of provisions in the State Agreement which expressly or impliedly modify other laws and as to which it would be a verbal nonsense to speak of the State Act as merely removing inconsistent State laws to give contractual effect to the provisions. One example is cl 10(8), which provides that reg 28A of the Mining Regulations 1981 (WA) "shall be deemed modified" in various respects. Another example is cll 9(2) and 9(5), which purport to "modify" the Mining Act 1978 (WA). Another example is cl 20(6), which purports to "modify" the Land Administration Act 1997 (WA). Another example is cl 20(7), which purports to "modify" the Aboriginal Heritage Act 1972 (WA). And, as explained below, another example is cl 32, which, in its express terms, purports to modify the law concerning the manner and form in which an amendment to the State Agreement, made by agreement, can be given statutory force by Parliament. Edelman The manner and form requirement imposed by cl 32 The nature of the manner and form requirement in cl 32 Clause 32 of the State Agreement provides as follows: "(1) The parties to this Agreement may from time to time by agreement in writing add to substitute for cancel or vary all or any of the provisions of this Agreement or of any lease licence easement or other title granted under or pursuant to this Agreement for the purpose of more efficiently or satisfactorily implementing or facilitating any of the objects of this Agreement. The Minister shall cause any agreement made pursuant to subclause (1) in respect of any addition substitution cancellation or variation of the provisions of this Agreement to be laid on the Table of each House of Parliament within 12 sitting days next following its execution. Either House may, within 12 sitting days of that House after the agreement has been laid before it pass a resolution disallowing the agreement, but if after the last day on which the agreement might have been disallowed neither House has passed such a resolution the agreement shall have effect from and after that last day." Since some provisions of the State Agreement have the force of statute law as well as contractual force, the reference in cl 32(3) to when an agreed variation "shall have effect" must be to when the agreed variation takes effect not merely in its character as a contractual provision but also in its character as having the force of law. For instance, cl 32(3) could not have been intended only to concern the manner in which contractual force is given to an agreed amendment to cl 10(8), which provides that reg 28A of the Mining Regulations "shall be deemed modified". By altering the manner in which a provision can "have effect" as a statute, cl 32 itself is a provision that must have the force of statute law. Since cl 32 has the force of statute law in addition to its contractual effect, the next question is whether, in its character as having the force of statute law, cl 32 imposes a manner and form requirement upon the Parliament of Western Australia before any law can be passed which amends the State Agreement. If so, in its character as having the force of law, cl 32 would modify existing statute law and would impose a constraint upon Parliament. It was not suggested that cl 32 imposed a constraint upon the parties by containing an implication that the State of Western Australia, as a party to the State Agreement, could not by its Executive Edelman take steps to permit the introduction of legislation that would unilaterally amend the agreement134. The terms of cl 32 in its statutory character plainly purport to impose a constraint upon Parliament. Where the parties have agreed under cl 32(1) to make any change135 to the State Agreement then, in their character as enactments of Parliament, cll 32(2) and 32(3): (i) require the Minister to put those changes before Parliament within 12 sitting days next following execution of those changes; and (ii) preclude statutory effect being given to the changes until the expiry of 12 sitting days from when the change has been laid before each House without the change being disallowed. This purports to be a legislative requirement controlling any statutory amendment to the State Agreement in its character as an enactment of Parliament, following an agreed change by the parties to the State Agreement under cl 32. An extension by implication of the manner and form requirement? Since the Amending Act was not the consequence of an agreement between the parties, the constraints purportedly imposed by cl 32 do not expressly apply to the Amending Act. The plaintiffs therefore submitted that, whilst cl 32 did not say so "in terms", an implication from the words of cl 32, in its character as a statutory provision, was that the State Agreement could only be amended by the procedure in cl 32. Mr Palmer submitted in the related proceeding that cl 32 required that Parliament would not "unilaterally" act without following the procedure of cl 32. The plaintiffs' submission, therefore, was that an implication in cl 32, based upon an assumption underlying that manner and form provision, was that Parliament would only amend the State Act following the agreement of the parties. in dissent, The plaintiffs' submission derives some support from the decision of in Commonwealth Aluminium Corporation Ltd v Attorney-General136. The plaintiff company relied on ss 3 and 4 of the Commonwealth Aluminium Corporation Pty Limited Agreement Act 1957 (Qld), which gave effect to a Government agreement. Section 3 provided that the provisions of the agreement "shall have the force of law as though the Agreement were an enactment of this Act". Section 4 provided that the agreement shall be varied exclusively by a procedure involving agreement between the parties and that any "purported alteration of the Agreement not made and approved in such 134 See West Lakes Ltd v South Australia (1980) 25 SASR 389; Port of Portland Pty Ltd v Victoria (2009) 27 VR 366. 135 "[A]dd to substitute for cancel or vary all or any of the provisions". 136 [1976] Qd R 231. Edelman manner shall be void and of no legal effect whatsoever". Different approaches were taken by each of the judges of the Full Court of the Supreme Court of Queensland. Wanstall SPJ held that the provision was not concerned with prescribing the manner and form of legislation but instead was an invalid abdication of legislative power137. Dunn J, in reasoning which has been described as "questionable as it reduces to insignificance, if not ignores altogether, the provisions ... that expressly stated that the agreement there was to have the force of law"138, held that the agreement was an instance of the first approach, merely removing common law or statutory obstacles to contractual enforcement and not giving the force of law to the provisions themselves139. In dissent, Hoare J held140: "To treat the section as only applying to an act of the executive government, it seems to me, involves ignoring the provisions of s 3 which has in effect converted the agreement into an Act of Parliament. In my opinion, it follows that s 4 purports to provide that the provisions of the 1957 Act may only be varied in the manner provided by s 4 of that Act." It is unnecessary to consider the proper interpretation of the particular legislation in Commonwealth Aluminium Corporation Ltd v Attorney-General. The State Act in that case was in different language with a different context and background. On the terms of the legislation in the present case, the plaintiffs' submission cannot be accepted for four reasons. First, no assumption underlies cl 32 that Parliament would not unilaterally amend any provisions of the State Agreement having the force of statute law. The plaintiffs accepted that changes to the State Agreement in its contractual character might arise as a consequence of an order made in an arbitration under cl 42(1) of the State Agreement rather than as a result of an agreed variation. Assuming this to be correct, it means that cl 32 is not the exclusive procedure for making amendments to the provisions of the State Agreement in their contractual character. Likewise, it could not have been intended to be the exclusive means of making changes to the provisions of the State Agreement in their statutory character. 137 [1976] Qd R 231 at 236. See also West Lakes Ltd v South Australia (1980) 25 SASR 138 Nonggorr, "The Legal Effect and Consequences of Conferring Legislative Status on Contracts" (1993) 17 University of Queensland Law Journal 169 at 174. 139 [1976] Qd R 231 at 259. 140 [1976] Qd R 231 at 248. Edelman Secondly, and in any event, such an assumption about what Parliament would do is not an implication constraining what Parliament could do. Much clearer words would be required to evince an intention of Parliament in passing either the Government Agreements Act or the State Act that changes to the State Agreement would effectively require a reconstitution of the Parliament of Western Australia, with a precondition to legislation being an agreement between the State and external parties. Thirdly, if any such assumption were an implication it would not, in any event, involve a condition concerned with the manner and form of Parliament's exercise of existing power to legislate. Instead, it would be an implied restructure of parliamentary power within a limited sphere. Such restructures of parliamentary power have been contrasted with manner and form provisions. In West Lakes Ltd v South Australia141, King CJ addressed a submission that ratifying legislation, the West Lakes Development Act 1969 (SA), contained a general implication that the Parliament of South Australia could only legislate to vary the agreement following the agreement of the parties. Like Wanstall SPJ in Commonwealth Aluminium Corporation Ltd v Attorney-General142, King CJ held that such an implication would amount to a renunciation pro tanto of the lawmaking power rather than a manner and form provision143. As Professor Twomey has written144: "In most cases, the requirement that an external body approve a measure before legislation can be enacted is not a 'manner and form' requirement, because it is a provision which purports to remove power from the legislature, rather than deal with the manner and form in which legislation is enacted." Fourthly, whether the implication that the plaintiffs sought to justify is properly understood as one which involves an abdication of legislative power or a reconstitution of the Parliament of Western Australia for limited purposes, either effect might require compliance with manner and form requirements, including a referendum145, before the implication could be valid. The legislation giving statutory force to cl 32 did not satisfy those manner and form requirements. 141 (1980) 25 SASR 389. 142 [1976] Qd R 231 at 236. 143 West Lakes Ltd v South Australia (1980) 25 SASR 389 at 398. 144 Twomey, The Constitution of New South Wales (2004) at 286. 145 Compare Constitution Act 1889 (WA), ss 73(2)(e)-73(2)(g), read with s 2. Edelman In conclusion, since cl 32 imposed no manner and form requirement upon Parliament in unilaterally enacting the Amending Act, it is unnecessary to consider any of the further submissions of Western Australia concerning whether cl 32 could bind Parliament, including whether the Amending Act is a law respecting the "constitution, powers or procedure" of the Parliament of Western Australia. Consistency with Ch III of the Constitution The plaintiffs' submissions concerning Ch III of the Constitution were twofold. The first of the plaintiffs' submissions was that the provisions of the Amending Act were contrary to Ch III of the Constitution, relying upon the principle in Kable v Director of Public Prosecutions (NSW)146. That principle has been synthesised as one of invalidity of State legislation "which purports to confer upon [a State Supreme Court] a power or function which substantially impairs the court's institutional integrity, and which is therefore incompatible with that court's role as a repository of federal jurisdiction"147. Such power or function must be assessed by both its legal and practical operation. The plaintiffs' second submission was related. The major premise of the second submission was that the Amending Act is properly characterised as an exercise of judicial power. The minor premise was that Ch III of the Constitution precludes the Parliament of Western Australia from exercising judicial power. These submissions require characterisation of the nature of, and identification of the scope of the operation of, the Declaratory Provisions. There are features of the Declaratory Provisions that, in combination, provide significant support for the plaintiffs' submissions that those provisions amount to a direction to the courts or an exercise of judicial power. First, there is the ad hominem nature of the provisions. Secondly, and in circumstances in which "trial[s] of actions for breach of contract ... are inalienable exercises of judicial power"148, the provisions are expressed as declarations of law about the effect or application of contractual provisions: neither of the Balmoral South proposals "has, nor can have, any contractual or other legal effect under the [State] Agreement or otherwise" (s 9(1)); neither proposals nor documents submitted under the State Agreement before commencement of the Amending Act can be proposals for the purposes of the State 146 (1996) 189 CLR 51. 147 Attorney-General (NT) v Emmerson (2014) 253 CLR 393 at 424 [40]. See also Kuczborski v Queensland (2014) 254 CLR 51 at 98 [139]; Vella v Commissioner of Police (NSW) (2019) 269 CLR 219 at 245-246 [55]. 148 Bachrach (HA) Pty Ltd v Queensland (1998) 195 CLR 547 at 562 [15]. See also Federal Commissioner of Taxation v Munro (1926) 38 CLR 153 at 175. Edelman Agreement the arbitral awards made on 20 May 2014 and 11 October 2019 are of no effect and are taken to be of no effect (ss 10(4), 10(6)); and the arbitration agreement under which the 20 May 2014 and 11 October 2019 arbitral awards were made is "taken never to have been valid" (ss 10(5), 10(7)). The State of Western Australia and the Attorney-General of the Commonwealth relied upon the decision of this Court in Australian Building Construction Employees' and Builders Labourers' Federation v The Commonwealth149. In that case, the Australian Conciliation and Arbitration Commission had made a declaration which empowered the Minister to cancel the registration of the Federation. While the Federation's application to quash that declaration was pending in this Court, the Commonwealth Parliament passed legislation to cancel the registration of the Federation. This Court held that the legislation was valid because it did not "deal with any aspect of the judicial process"150. The judicial process had concerned the legality of the declaration by the Commission. The legislation might have had the effect that the ultimate purpose for the proceeding became redundant but it did not, in any way, affect the conclusion or the process of considering the legality of the Commission's declaration. By contrast, this Court referred with approval151 to Liyanage v The Queen152, in which the Privy Council held invalid legislation that attempted to circumscribe the judicial process, including on sentencing. As the Privy Council explained153: "Quite bluntly, [the aim of the legislation] was to ensure that the judges in dealing with these particular persons on these particular charges were deprived of their normal discretion as respects appropriate sentences." If the Declaratory Provisions had been enacted whilst litigation was pending in the courts concerning the same parties and the same subject matter then there may have been force, even at the level of State courts154, in the plaintiffs' submission to the effect that the legislation would have undermined the assignment 149 (1986) 161 CLR 88. 150 (1986) 161 CLR 88 at 96. 151 (1986) 161 CLR 88 at 96. 153 [1967] 1 AC 259 at 290. 154 South Australia v Totani (2010) 242 CLR 1 at 45-48 [66]-[69]. Edelman of judicial power to judges155. This point was powerfully made in dissent by Roberts CJ (Sotomayor J agreeing) in Bank Markazi v Peterson156: "No less than if it had passed a law saying 'respondents win,' Congress has decided this case by enacting a bespoke statute tailored to this case that resolves the parties' specific legal disputes to guarantee respondents victory." But the effect of (i) the absence of any extant legal proceedings to which the Amending Act was directed at resolving, and (ii) the purpose of the Amending Act being to provide cascading layers of protection for the financial position of the State of Western Australia rather than to resolve a judicial dispute157, is that the Declaratory Provisions bear the character of provisions which extinguish rights of the plaintiffs. With that single character, it is "well settled" that any effect of a law causing extinguishment or lesser alteration of rights, even on pending litigation, does not invalidate the law158. As for the ad hominem nature of the law, this is not conclusive that the function is judicial159. It can be a factor that suggests a judicial process but in this context the ad hominem aspect of the law served only the legislative function of focusing upon the particular rights to be extinguished. Finally, as explained in Palmer v Western Australia160, the Declaratory Provisions are not relevantly punitive. 155 Albarran v Companies Auditors and Liquidators Disciplinary Board (2007) 231 CLR 350 at 370 [66]. 156 (2016) 578 US 212 at 237. 157 See Construction, Forestry, Mining and Energy Union v Australian Industrial Relations Commission (2001) 203 CLR 645 at 658 [31]; TCL Air Conditioner (Zhongshan) Co Ltd v Judges of the Federal Court of Australia (2013) 251 CLR 158 Duncan v Independent Commission Against Corruption (2015) 256 CLR 83 at 98 [26]. See also Nelungaloo Pty Ltd v The Commonwealth (1948) 75 CLR 495 at 503-504, 579-580; R v Humby; Ex parte Rooney (1973) 129 CLR 231 at 250; Bachrach (HA) Pty Ltd v Queensland (1998) 195 CLR 547 at 560 [8]-[9], 563-564 159 Liyanage v The Queen [1967] 1 AC 259 at 289; Leeth v The Commonwealth (1992) 174 CLR 455 at 469-470; Nicholas v The Queen (1998) 193 CLR 173 at 192 [28], 160 [2021] HCA 31 at [14]-[16]. Edelman Section 118 of the Constitution The plaintiffs submitted that the Declaratory Provisions were invalid because a law of Western Australia could not deprive the 20 May 2014 and 11 October 2019 arbitral awards of legal effect when that effect had been recognised in other States. The plaintiffs relied upon: (i) s 35 of the Commercial Arbitration Acts161 as recognising an arbitral award as uniformly binding "irrespective of the State or Territory in which it was made"; (ii) the views expressed by French CJ and Gageler J in TCL Air Conditioner (Zhongshan) Co Ltd v Judges of the Federal Court of Australia162 that an arbitral award is binding under s 35 of the Commercial Arbitration Acts from the date that it is made; and (iii) s 118 of the Constitution as requiring full faith and credit to be given to the laws of every State, which, it was said, prevented a law of Western Australia from depriving an arbitral award of the legal effect that it has by the laws of other States. The premise of the plaintiffs' submission was that there was an inconsistency between, on the one hand, the Declaratory Provisions and, on the other hand, the binding effect of an arbitral award in States other than Western Australia by virtue of s 35 of the Commercial Arbitration Acts. The fatal flaw in the plaintiffs' submission is that the operation of s 36 of the Commercial Arbitration Acts denies any inconsistency in this case. Both the recognition and enforcement limbs of s 35 of the Commercial Arbitration Acts are expressed to be "subject to the provisions of ... section 36". Section 36 provides that recognition or enforcement of an arbitral award "may be refused" in various circumstances, including on proof that the arbitration agreement "is not valid under the law to which the parties have subjected it or, failing any indication in it, under the law of the State or Territory where the award was made"163. Even on the assumption that the effect of s 35 is that an arbitral award is binding at the time that it is made, subject to defeasance by s 36, the satisfaction of three criteria contained in s 36(1)(a)(i) will have the effect that s 36 removes any inconsistency that would otherwise have arisen by the arbitral awards being enforceable in other States but not in Western Australia as a consequence of the Declaratory Provisions. The first criterion is that the relevant law of the arbitration agreement is the law of Western Australia as either the law to which the parties have subjected it or the law of the State where the award was made. The second criterion is that the arbitral awards are not valid under the law of Western 161 Commercial Arbitration Act 2010 (NSW); Commercial Arbitration Act 2011 (Vic); Commercial Arbitration Act 2011 (SA); Commercial Arbitration Act 2011 (Tas); Commercial Arbitration Act 2012 (WA); Commercial Arbitration Act 2013 (Qld). 162 (2013) 251 CLR 533 at 552 [23], 555 [31]. 163 Commercial Arbitration Acts, s 36(1)(a)(i). Edelman Australia at the time that they would be recognised or enforced. The third criterion is that the court would exercise its discretion to refuse the recognition or enforcement of the arbitral awards. As to the first criterion, the State Agreement provides in cl 46 that the agreement "shall be interpreted according to the law for the time being in force in the State of Western Australia". It was submitted by the Solicitor-General of the Commonwealth, without dispute, that this was a choice of law provision for the arbitration agreement in cl 42 and that this choice of law extended to questions of validity as well as interpretation. Hence, it was argued, there was no dispute that the parties made a choice to subject their arbitration agreement to the law of Western Australia. In the absence of any reason why the choice of law in the State Agreement should not be applied in the usual way as a choice of law also for the arbitration agreement164, and in circumstances in which, within the terms of s 36, "the award was made" at Perth, Western Australia, it is appropriate to proceed upon that assumption. As to the second criterion, the expression in s 36 of the question of validity in the present tense β "is not valid under the law to which the parties have subjected it" β emphasises that validity falls to be determined at the time that the arbitral awards are sought to be recognised or enforced and not at the time that the awards are made. Since the Declaratory Provisions are not otherwise invalid, their effect is that, at all times, the arbitral awards have not been valid under the law of Western Australia. As to the third criterion, although s 36 involves a discretionary power it is only in very limited circumstances that a court would exercise the discretion in s 36 not to refuse to recognise or enforce an arbitral award where conditions such as the invalidity of the arbitration agreement are established. The limited scope of the discretion was discussed by Lord Collins of Mapesbury JSC in Dallah Real Estate and Tourism Holding Co v Ministry of Religious Affairs of the Government of Pakistan165 in the course of considering the discretion contained in s 103(2)(b) of the Arbitration Act 1996 (UK), which enacts Art V(1)(a) of the New York 164 See Enka Insaat ve Sanayi AS v OOO "Insurance Company Chubb" [2020] 1 WLR 4117 at 4132 [43]-[45] and especially at 4189-4190 [233]-[234]; [2021] 2 All ER 1 at 16-17, 72-73; Briggs, Private International Law in English Courts (2014) at 1005-1006 [14.37]-[14.38]. See also Davies et al, Nygh's Conflict of Laws in Australia, 10th ed (2020) at 942 [39.2]. Edelman Convention166 and provides, in similar terms to s 36 of the Commercial Arbitration Acts, that recognition or enforcement "of the award may be refused" if the arbitration agreement was not valid under the relevant law. His Lordship said that the discretion enabled the court to consider circumstances "which might on some recognisable legal principle affect the prima facie right to have an award set aside"167. The plaintiffs did not rely upon any such legal principle independently of their grounds for challenging the validity of the Declaratory Provisions. The consequence, therefore, is that if they are valid then the Declaratory Provisions preclude any State from recognising or enforcing the arbitral awards of 20 May 2014 and 11 October 2019. There is no inconsistency between the Declaratory Provisions and the effect of an arbitral award in States other than Western Australia. Conclusion The questions in the special case should be answered as proposed in the joint judgment. 166 Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958. See also Paulsson, "May or Must Under the New York Convention: An Exercise in Syntax and Linguistics" (1998) 14 Arbitration International 227. 167 [2011] 1 AC 763 at 843 [127]. |
HIGH COURT OF AUSTRALIA WORKCOVER QUEENSLAND APPELLANT AND AMACA PTY LTD & ANOR RESPONDENTS WorkCover Queensland v Amaca Pty Ltd [2010] HCA 34 20 October 2010 ORDER Appeal allowed with costs. Set aside the answers to questions 4 and 5 in the order of the Court of Appeal of the Supreme Court of Queensland made on 27 March 2009, and in their place order that questions 4 and 5 of the amended case stated be answered as follows: (a) Question 4: No. (b) Question 5: The respondents should pay the costs of the plaintiff WorkCover Queensland in the amended case stated before the Court of Appeal. On appeal from the Supreme Court of Queensland Representation W Sofronoff QC Solicitor-General of the State of Queensland with K F Holyoak for the appellant (instructed by Bruce Thomas Lawyers) D F Jackson QC with R C Morton for the respondents (instructed by Holman Webb Lawyers and CLS Lawyers) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS WorkCover Queensland v Amaca Pty Ltd Practice and procedure β Action β Death of worker β Survival of cause of action β Section 66(1) of Succession Act 1981 (Q) ("Succession Act") provided causes of action vested in deceased person shall survive for benefit of person's estate β Section 66(2) limited damages recoverable "in any action brought" where cause of action survives under s 66(1) β Whether s 66(1) creates new cause of action β Discussion of history of survival of causes of action. Workers' compensation β Insurance β Statutory scheme β Insurer's right of indemnity against third party for compensation paid β Insurer paid compensation to worker exposed to asbestos manufactured and supplied by respondents β Worker died and no proceedings instituted by worker or estate against any persons β Section 207B(7) of Workers' Compensation and Rehabilitation Act 2003 (Q) ("Compensation Act") gave insurer, in these circumstances, right of indemnity against third party up to amount of compensation paid to worker, but only "to the extent of that person's liability for the damages" β Whether s 66(2) of Succession Act limits amount recoverable under right of indemnity in s 207B(7) of Compensation Act β Nature of cause of action created by s 207B(7) β Difference between liability and damages recoverable β Relevance of history of s 66(2) of Succession Act. Words and phrases β "in any action brought", "liability", "to the extent of that person's liability for the damages". Common Law Practice Act 1867 (Q), s 15D. Succession Act 1981 (Q), s 66. Workers' Compensation and Rehabilitation Act 2003 (Q), s 207B. Law Reform (Miscellaneous Provisions) Act 1934 (UK), 24 & 25 Geo V c 41, FRENCH CJ, GUMMOW, CRENNAN, KIEFEL AND BELL JJ. On 22 June 2007 the appellant ("WorkCover") commenced proceedings in the Supreme Court of Queensland pursuant to s 272(7)1 of the Workers' Compensation and Rehabilitation Act 2003 (Q) ("the Compensation Act") to recover the quantum of compensation previously paid by it to Mr Rex Noel Thomson. Mr Thomson was a carpenter and builder, and "worker" within the meaning of the Compensation Act, who had died on 20 June 2006 from malignant mesothelioma contracted as a result of inhaling asbestos contained in building products manufactured by the respondents. WorkCover now sought to recover by indemnity from the respondents the payments made by it to Mr Thomson under the Compensation Act. It will be necessary to refer further to the relevant facts later in these reasons. From the pleadings four broad issues emerged. On 2 September 2008, Dutney J ordered the referral of a case stated to the Court of Appeal pursuant to r 483(2) of the Uniform Civil Procedure Rules 1999 (Q). The appeal by WorkCover to this Court, from the decision of the Court of Appeal (de Jersey CJ and Muir JA; McMurdo P dissenting)2, concerns the fourth question in the case stated: "Is the quantum of the indemnity [WorkCover] is entitled to recover pursuant to [s 207B(7) of the Compensation Act] reduced by the operation of [s 66 of the Succession Act 1981 (Q) ("the Succession Act")] if the worker dies after compensation is paid and before the trial of [WorkCover's] action to recover the indemnity?" Contrary to the decision of the majority of the Court of Appeal, that question should be answered "no" and the appeal by WorkCover should be allowed. We turn to explain why this is so. The facts Mr Thomson had been born on 30 June 1931 and had worked for various employers in the State of Queensland between 1947 and 1983. Throughout that time he was a "worker" for the purposes of the Workers' Compensation Act 1916 1 Section 272 subsequently was renumbered as s 207B: Workers' Compensation and Rehabilitation and Other Acts Amendment Act 2007 (Q), s 24. 2 WorkCover Queensland v Amaca Pty Ltd [2009] 2 Qd R 181. Crennan Bell (Q), the Workers' Compensation Act 1990 (Q), the WorkCover Queensland Act 1996 (Q) and, finally, the Compensation Act. During the course of his employment, Mr Thomson was exposed to asbestos manufactured and supplied by the respondents. As a consequence he for payment of contracted mesothelioma and applied compensation. On 18 April 2006, WorkCover paid to Mr Thomson the sum of $340,000 by way of compensation to which he was entitled under the Compensation Act for his contraction of mesothelioma. to WorkCover Before his death, Mr Thomson had not instituted any proceedings upon any cause of action he may have had against persons who may have been liable for his injury. That circumstance entitled WorkCover to pursue its right of indemnity under s 207B(7)(a) of the Compensation Act. The relevant legislative provisions Section 207B, formerly s 272, of the Compensation Act relevantly provides: "(1) This section applies to β an injury sustained by a worker in circumstances creating β an entitlement to compensation; and a legal liability in the worker's employer, or other person, to pay damages for the injury, independently of this Act β¦ If a person who has received compensation has not recovered, or taken proceedings to recover, damages for the injury from another person, other than the worker's employer β the insurer is entitled to be indemnified for the amount of the compensation by the other person to the extent of that person's liability for the damages, so far as the amount of damages payable for the injury by that person extends; and to that end, the insurer is subrogated to the rights of the person for the injury. Crennan Bell In this section β includes damages under a damages liability existing independently of this Act, whether or not within the meaning of section 10." (emphasis added) legal There was no issue between the parties that the threshold in s 207B(1) had been met. The appeal turns upon the interaction, if any, between s 207B(7) of the Compensation Act and s 66 of the Succession Act. The heading to s 66 reads "Survival of actions", and the section relevantly provides: "(1) Subject to the provisions of this section and with the exception of causes of action for defamation or seduction, on the death of any person after the 15 October 1940 all causes of action subsisting against or vested in the person shall survive against, or, as the case may be, for the benefit of, the person's estate. (2) Where a cause of action survives pursuant to subsection (1) for the benefit of the estate of a deceased person, the damages recoverable in any action brought β shall not include damages for pain and suffering, for any bodily or mental harm or for curtailment of expectation of life; and (d) where the death has been caused by the act or omission which gives rise to the cause of action β shall be calculated without reference to β loss or gain to the estate consequent upon the death save that a sum in respect of funeral expenses may be included; or future probable earnings of the deceased had the deceased survived." (emphasis added) The opening words of sub-s (2), with their reference back to sub-s (1), and the following words "in any action brought" are significant for this appeal. In short, when read together they identify the subject of the qualifications upon heads of Crennan Bell damages recoverable as those recoverable in an action which survives for the benefit of the deceased estate, and they do not speak to recovery in any action otherwise arising, including that between WorkCover and the respondents. The Court of Appeal It is necessary first to refer to the text of s 207B(7). The majority of the Court of Appeal held that s 207B(7)(a) contains two distinct subject matters. The first is the existence of the indemnity. The second is the calculation of damages to determine how far that indemnity extends. The calculation of the extent of the right of indemnity is determined by "the extent of [the wrongdoer's] liability for the damages [for the injury] so far as the amount of damages payable for the injury by [the wrongdoer] extends" (s 207B(7)(a)). The majority held that the extent of the indemnity is to be determined by the damages that would be recoverable by the worker, or his estate in the event of death, in an action brought against the wrongdoer, as at the date of judgment in the indemnity proceedings3. The finding that the damages are to be calculated as at the date of judgment in the indemnity proceedings is not the subject of an appeal to this Court. Mr Thomson having died on 20 June 2006, the majority found that the calculation of damages in the subsequent indemnity proceedings brought by WorkCover necessarily would be subject to the limitations found in s 66(2) of the Succession Act. Section 66(2) would have limited the damages payable by the wrongdoer to the estate of the worker had the estate sued. McMurdo P, dissenting, concluded that as an insurer would not need to rely on s 66(1) of the Succession Act to bring a claim for indemnity under s 207B(7)(a) of the Compensation Act, the limitations on damages found in s 66(2) would not apply; rather, s 207B(7)(a) requires a hypothetical assessment of damages as at the date of judgment which is not dependent on the operation of Her Honour also gave a further reason why the quantum WorkCover is entitled to recover under par (a) of s 207B(7) of the Compensation Act should not be reduced by reason of s 66(2) of the Succession Act5: [2009] 2 Qd R 181 at 192, 200. [2009] 2 Qd R 181 at 198. [2009] 2 Qd R 181 at 198. Crennan Bell "In any case, s 66(2) in its terms specifically relates to a cause of action which survives under s 66(1) for the benefit of the estate of a deceased person. A plaintiff insurer's claim under [s 207B(7)] is not such a cause of action." The point made by McMurdo P may be expressed by asking whether s 66(2), in light of the words "[w]here a cause of action survives pursuant to subsection (1) for the benefit of the estate of a deceased person, the damages recoverable in any action brought β¦" (emphasis added), is concerned not with imposing limitations on the cause of action of the deceased, but only with imposing limitations "in any action brought" for the benefit of the estate. In its supplementary written submissions, filed by leave after the conclusion of oral submissions in this Court, WorkCover relies upon that construction of the legislation. As already indicated, and for the following reasons, that submission should be accepted and the appeal should be allowed. The cause of action created by s 207B(7) of the Compensation Act It was not in contention between the parties that par (a) of s 207B(7) creates a cause of action separate to that vested in the deceased worker. In the past, that point has not been without its controversy. After the conclusion of oral argument, the Court invited further submissions on the relevance to the present appeal of the decision of the New South Wales Court of Appeal in WorkCover Queensland v Seltsam Pty Ltd6. That case concerned the effect of the equivalent provision to par (b) of s 207B(7) then in force7 on the rights of WorkCover. It had been held by Gibb DCJ that the words "[the insurer] is subrogated to the rights of the person for the injury" meant that the nature of the right of the insurer was one of subrogation, such that the insurer could only bring an action in the worker's name8. (2001) 53 NSWLR 518. 7 WorkCover Queensland Act 1996 (Q), s 278(7)(b). 8 WorkCover Queensland v Seltsam Pty Ltd (2001) 53 NSWLR 518 at 520-521. Crennan Bell However, the New South Wales Court of Appeal held9 that the predecessor to s 207B(7) created a statutory cause of action for indemnity vested in, and pursued in the name of, the insurer; par (b) merely gave the insurer an ancillary subrogation to the rights of the worker to the extent necessary to aid the indemnity granted. One such way in which subrogation may be necessary is to enable the insurer to give the notices required to be given by the worker prior to liability arising in a third party, as a failure to do so may otherwise limit the insurer's ability to recover under its right of indemnity10. In their further written submissions, the respondents submit that the Court of Appeal in Seltsam unnecessarily read down the predecessor to par (b) of s 207B(7) by construing the right of subrogation as operative only in the limited circumstances described by the Court, namely, the giving of notices; rather, the Court should have found that the provision in par (b) confers an additional right of subrogation, not so limited, as needed adequately to satisfy the entitlement to indemnity given by par (a) of the sub-section. That additional right may be needed, as identified in Seltsam, for the giving of required notices in the worker's name. The respondents submit that it may also be used by the insurer, for example, in circumstances where it is more advantageous to seek recovery in the worker's name, such as in the Dust Diseases Tribunal of New South Wales11. It is not clear that the decision of Seltsam limited the right of subrogation to the extent submitted by the respondents, but in any event, it is not necessary for that issue to be decided in this appeal. That is because both parties accepted the proposition for which Seltsam does stand, that s 207B(7) creates a new cause of action vested in the insurer, WorkCover in this case. 9 WorkCover Queensland v Seltsam Pty Ltd (2001) 53 NSWLR 518 at 524 per Young CJ in Eq, Priestley JA and Ipp AJA agreeing. 10 See, eg, Austral Pacific Group Ltd (In Liq) v Airservices Australia (2000) 203 CLR 136; [2000] HCA 39. 11 Proceedings brought by WorkCover in its name may not be proceedings for "damages" that would confer the Dust Diseases Tribunal with jurisdiction pursuant to s 11(1) of the Dust Diseases Tribunal Act 1989 (NSW). See, generally, Goliath Portland Cement Co Ltd v Bengtell (1994) 33 NSWLR 414; BHP Billiton Ltd v Schultz (2004) 221 CLR 400; [2004] HCA 61. Crennan Bell The significance of Seltsam for this appeal is that it identifies the starting point for the consideration of the construction of par (a) of s 207B(7). This is the acknowledgment of the independence of the cause of action vested in the insurer by that provision from that of the person to whom that insurer had paid compensation, in this case the worker. It is the independence of this cause of action from that of the worker that, even prior to the existence of equivalent provisions of s 66(1) of the Succession Act, allowed the insurer to pursue an indemnity following the death of the worker12. It is also why a right of indemnity exists even when the cause of action of the worker is time-barred under the relevant statute of limitations13. But contrary to WorkCover's submission, it does not follow that, given the right of indemnity would exist under par (a) of s 207B(7) irrespective of the existence of s 66(1) of the Succession Act, the limitations on damages found in s 66(2) necessarily do not apply. The respondents correctly submit that the operation of par (a) of s 207B(7) involves two matters. The first is the existence of the right of indemnity. The second is the scope of that indemnity. Whereas the right of indemnity is distinct from the cause of action of the person to whom compensation has been paid, the scope of the indemnity necessarily is tied to that cause of action. This is the effect of the words "to the extent of that person's liability for the damages". The reference to "that person" is a reference to the wrongdoer from whom the insurer seeks recovery under the indemnity. And the phrase "liability for the damages" refers back to the opening words of sub-s (7), being liability "for the injury" suffered by the "person who has received compensation", that person having "not recovered, or taken proceedings to recover, damages". By virtue of sub-s (10), "damages" includes any damages for which the wrongdoer is liable arising independently of the Compensation Act, whether the liability arises from statute or the common law14. 12 Smith's Dock Co v John Readhead & Sons [1912] 2 KB 323 at 327; Tooth & Co Ltd v Tillyer (1956) 95 CLR 605 at 610; [1956] HCA 49; Tickle Industries Pty Ltd v Hann (1974) 130 CLR 321 at 333; [1974] HCA 5. 13 Tickle Industries Pty Ltd v Hann (1974) 130 CLR 321. 14 Cf the construction of "those damages" in s 151Z(1)(d) of the Workers Compensation Act 1987 (NSW): Grant v Royal Rehabilitation Centre Sydney (1999) 47 NSWLR 263 at 265. Crennan Bell No issue was taken in this Court as to the meaning of the phrase "so far as the amount of damages payable for the injury by that person extends", which immediately follows the phrase "to the extent of that person's liability for the damages". In the Court of Appeal, the respondents submitted that the two phrases must be directed towards different ends; if they both referred to the limit on the quantum of the indemnity then one or the other would be otiose15. The Court of Appeal rejected that submission16 and appears to have read the two phrases together as referring to each respondent's liability for the whole of the damages payable. That finding was not the subject of a cross-appeal by the respondents to this Court, and in oral argument the respondents appeared to adopt the construction given to those two phrases by the Court of Appeal. However, the preferable construction may be that the two phrases are directed to two distinct limitations on the quantum of the right of indemnity. The phrase "to the extent of that person's liability for the damages" limits the insurer's right of indemnity against a wrongdoer as extending only up to the amount of damages for which the wrongdoer is liable to the person who received compensation. The phrase "so far as the amount of damages payable for the injury by that person extends", on the other hand, reinforces the proposition that the amount payable under the indemnity, being an amount up to "the amount of damages payable for the injury by that person", is not to extend beyond "the amount of compensation" paid by the insurer. Whether that construction is to be preferred to that of the Court of Appeal is a question that need not be determined for the resolution of this appeal. Difference between liability and damages recoverable The respondents submit, and WorkCover appears to accept, that the phrase "to the extent of that person's liability" in par (a) of s 207B(7) requires a hypothetical assessment of damages that would have been payable had the person to whom compensation has been paid brought an action against the wrongdoer. Yet construing the limitation in this way is apt to mislead. We turn to explain why this is so. 15 [2009] 2 Qd R 181 at 185, 193. 16 [2009] 2 Qd R 181 at 194, 196, 200. Crennan Bell Paragraph (a) of s 207B(7) does not limit the indemnity to the amount that would have been received by the person to whom compensation has been paid had they, or their personal representative upon their death, brought an action. Rather, it limits the indemnity "to the extent of β¦ liability" of the wrongdoer. That point was made by Winneke P17, in a passage approved by this Court in Victorian WorkCover Authority v Esso Australia Ltd18, in relation to a similar provision in Victoria. It is a "notional liability at common law [or under a statute other than the Compensation Act] for pecuniary and non-pecuniary loss"19, having regard to limitations on the liability of the wrongdoer to the person who has received compensation. In this regard, reference was made by the Court of Appeal in this case (as it had been by this Court in Esso20) to the treatment of the term "liable" in a similar Northern Territory provision by Barwick CJ, with whom McTiernan J agreed, in Tickle Industries Pty Ltd v Hann21. His Honour said22: "'Liable' must therefore be given a meaning consistent with the evident purpose of the legislation and cannot be confined to meaning liable to be sued by the workman or his dependants. In other words, both in the expression 'the person liable to pay the damages' and in the expression 'for which that person is liable' the reference is to the tortfeasor, the person who, in the circumstances of the occurrence out of which the compensable injuries arose, appeared at that time to be the person responsible therefor and thus liable to pay damages." The policy of the legislation to which Barwick CJ referred was that an employer, or insurer, as the case may be, who paid compensation to a worker (or his or her 17 Esso Australia Ltd v Victorian WorkCover Authority (2000) 1 VR 246 at 257. 18 (2001) 207 CLR 520 at 527-528 [14]; [2001] HCA 53. 19 Esso Australia Ltd v Victorian WorkCover Authority (2000) 1 VR 246 at 252, approved in Victorian WorkCover Authority v Esso Australia Ltd (2001) 207 CLR 20 (2001) 207 CLR 520 at 527-528 [13]-[15]. 21 (1974) 130 CLR 321. 22 (1974) 130 CLR 321 at 331. Crennan Bell dependants) for injury (or death) caused by the wrongful act or omission of another was entitled to be indemnified against the payment of that compensation by that wrongdoer23. The outcome in Tickle Industries turned upon whether the insurer could recover from the wrongdoer under an indemnity in circumstances where the worker (or the dependants in that case) was barred from bringing a claim against the wrongdoer under the applicable statute of limitations. This Court (Barwick CJ and McTiernan J; Menzies J dissenting) held that the right of indemnity would exist so long as the wrongdoer had legal responsibility for the injury or death at some point in time24. The respondents submit that Tickle Industries was only concerned with the existence of the right of indemnity; it did not concern the further question of the quantification of that indemnity. However, in considering the Northern Territory ordinance, which contained a limitation on the right of indemnity similar to that found in par (a) of s 207B(7), Barwick CJ said25: "The limitation of the indemnity given by [s 22(d) of the Workmen's Compensation Ordinance 1949 (NT)] to the amount of the damages caused is but an expression of a limitation implicit in the grant of the right of indemnity and clearly, in my opinion, evidences no departure from the settled policy of workers' compensation legislation." It would be inconsistent with the policy of the legislation and the reasoning of Barwick CJ to construe the present statute as providing for the existence of a right of indemnity and then denying recovery under that indemnity on the footing that had the person who received compensation brought an action it would have been time-barred. It was not necessary for Barwick CJ in that case to take the next step and specify why, when assessing the limit of the indemnity, the statute of limitations would not apply. 23 (1974) 130 CLR 321 at 326-327. 24 (1974) 130 CLR 321 at 333. See also Smith's Dock Co v John Readhead & Sons 25 (1974) 130 CLR 321 at 333. Crennan Bell However, in The Commonwealth v Mewett26, Gummow and Kirby JJ said of the effect of statutes of limitations: "[A] statutory bar, at least in the case of a statute of limitations in the traditional form, does not go to the jurisdiction of the court to entertain the claim but to the remedy available and hence to the defences which may be pleaded. The cause of action has not been extinguished. Absent an appropriate plea, the matter of the statutory bar does not arise for the consideration of the court27. This is so at least where the limitation period is not annexed by statute to a right which it creates so as to be of the essence of that right28." That is especially so in the context of the Limitation of Actions Act 1974 (Q), whereby a limitation period may also be extended in certain actions for personal injury or death in the circumstances provided for in s 3129. Accordingly, a general limitation on a personal action does not affect the liability of the wrongdoer; rather it acts as a bar, when pleaded, to any remedy the plaintiff may seek when bringing an action for damages pursuant to that liability. Paragraph (a) of s 207B(7) of the Compensation Act requires an assessment of the liability of the wrongdoer to the person who has received compensation, and the circumstance that the time for the bringing by that person of an action has expired will not affect an assessment of the right of the insurer to indemnity. In the Court of Appeal, de Jersey CJ referred30 to the decision in Xpolitos v Sutton Tools Pty Ltd31. There compensation had been paid to the dependant 26 (1997) 191 CLR 471 at 534β535; [1997] HCA 29. 27 The Commonwealth v Verwayen (1990) 170 CLR 394 at 473-474; [1990] HCA 39. 28 Australian Iron & Steel Ltd v Hoogland (1962) 108 CLR 471 at 488-489; [1962] HCA 13; Pedersen v Young (1964) 110 CLR 162 at 169; [1964] HCA 28; The Commonwealth v Verwayen (1990) 170 CLR 394 at 497-498; McKain v R W Miller & Co (SA) Pty Ltd (1991) 174 CLR 1 at 43; [1991] HCA 56. 29 See Queensland v Stephenson (2006) 226 CLR 197; [2006] HCA 20. 30 [2009] 2 Qd R 181 at 191-192. 31 (1977) 136 CLR 418; [1977] HCA 25. Crennan Bell child of the worker, who had been killed in the course of his employment, and it exceeded that which would have been recovered by the child in a Lord Campbell's Act action. Xpolitos decided that which for the purposes of the present litigation is made explicit by par (a) of s 207B(7) of the Compensation Act: a right of indemnity of the person who has paid the compensation extends only up to the amount for which a third-party wrongdoer would be liable to the worker. How, then, does this state of affairs under the Compensation Act engage s 66 of the Succession Act? Section 66 of the Succession Act The issue is whether the limitation in s 66(2) applies to the liability of the wrongdoer to the person who received compensation, or imposes a limitation that only applies when the person's cause of action is brought "for the benefit of the estate of a deceased person". The resolution of this question requires an examination of the provenance of s 66 and the context in which the limitations the subject of this appeal arose. Prior to the enactment of s 66 in Queensland, the common law maxim actio personalis moritur cum persona provided that a cause of action in tort died with the person in whom it was vested. This was the first of two common law rules preventing civil actions upon the death of a person which legislatures have, in the past few centuries, addressed through legislation32. The second was that the death of a person could not be complained of as an injury33, a rule overturned in part by the Lord Campbell's Acts34. The distinction between these two rules was emphasised by Lord Atkin in Rose v Ford35. Although there has been discussion of the justifications for the second rule36, there is little by way of explanation of the first rule. It merely seems to 32 See Fitch v Hyde-Cates (1982) 150 CLR 482 at 487; [1982] HCA 11. 33 Baker v Bolton (1808) 1 Camp 493 [170 ER 1033]. 34 Currently to be found, in Queensland, in the Supreme Court Act 1995 (Q), Pt 4, Div 5 (ss 17-23D). 35 [1937] AC 826 at 833. 36 Admiralty Commissioners v SS Amerika [1917] AC 38 at 43-50 per Lord Parker of Waddington; Holdsworth, "The Origin of the Rule in Baker v Bolton", (1916) 32 Law Quarterly Review 431. Crennan Bell have been assumed37. In Finlay v Chirney38 Bowen LJ (with the agreement of Fry LJ) explained that, in the earliest times of English law, survival of causes of action was the rare exception and non-survival the rule. It was only since the reign of Queen Elizabeth I, when actions of assumpsit were introduced, that exceptions to the maxim evolved for actions in contract or for wrongs that involved property. A logical justification for the maxim is nonetheless given by Professor Ames in lecture XVIII of his legal history lectures, published in 1913. He explained that a private action always presupposed a personal relationship between two individuals; a right of action in the injured person and a corresponding duty in the tortfeasor; such a personal relationship could not survive the death of one of the parties39. The submissions of WorkCover sought to construe s 66 as conferring a statutory right upon the estate of a deceased person to sue in tort for actions vested in the deceased. Section 66 was characterised in this way to support WorkCover's general submission that par (a) of s 207B(7) of the Compensation Act and s 66 of the Succession Act did not speak to each other; they were concerned with the creation of different rights, neither of which depended on the other. But that characterisation is not critical to acceptance of the general submission. Section 66 does not create a fresh cause of action in favour of the deceased estate. Rather, it largely displaces the operation of the common law maxim actio personalis moritur cum persona which had applied to all but a few 37 Russel v Prat (1590) 4 Leo 44 [74 ER 718]; Pinchon's Case (1611) 9 Co Rep 86 38 (1888) 20 QBD 494 at 502-504. 39 Ames, Lectures on Legal History, (1913) at 211-212. Crennan Bell tort actions40. The cause of action of the deceased and that pursued under s 66 by the estate are one and the same41. The origin of s 66 can be traced to the Law Reform (Miscellaneous Provisions) Act 1934 (UK)42 ("the 1934 Act"), and, in turn, to 19th century legislation in North American jurisdictions, including that of New York in 184743, Connecticut in 184844 and Ontario in 188645. In 1940, Queensland largely adopted the 1934 Act and, with effect from 16 October 1940, inserted s 15D into the Common Law Practice Act 1867 (Q) ("the CLP Act")46. Section 15D was the immediate predecessor to s 66 of the Succession Act. Neither the 1934 Act nor s 15D of the CLP Act as originally enacted contained the limitations the subject of the present litigation and now found in pars (a) and (d)(ii) of s 66(2) of the Succession Act. Section 15D(2) of the CLP Act, as enacted, excluded only exemplary damages and all damages in an action for breach of a promise to marry other than the damage to the estate of a person who was the victim of the breach. It also provided that the damages recoverable by the estate were to be calculated without reference to any loss or gain to the estate consequent upon a person's death, except for sums in respect of medical and funeral expenses. 40 Phillips v Homfray (1883) 24 Ch D 439 at 456-457; Woolworths Ltd v Crotty (1942) 66 CLR 603 at 612-615; [1942] HCA 35; Malone, "The Genesis of Wrongful Death", (1965) 17 Stanford Law Review 1043 at 1045-1047. 41 Rose v Ford [1937] AC 826 at 834 per Lord Atkin, 839-840 per Lord Russell of Killowen, 845 per Lord Wright, 855-856 per Lord Roche; Fitch v Hyde-Cates (1982) 150 CLR 482 at 497 per Mason J. 42 24 & 25 Geo V c 41, s 1. 43 See Brown v Buffalo and State Line Railroad Co 22 NY 191 at 192-193 (1860). 44 See Murphy v The New York and New Haven Railroad Co 30 Conn 184 at 188 (1861); Malone, "American Fatal Accident Statutes β Part I: The Legislative Birth Pains", (1965) Duke Law Journal 673 at 707. 45 Statute Amendment Act 1886 (49 Vic c 16), s 23 (Ont). 46 Common Law Practice Act Amendment Act 1940 (Q), s 2. Crennan Bell The exclusions now found in s 66(2) for damages for pain and suffering, loss of expectation of life and loss of future earning capacity were introduced into the CLP Act in 1972 by s 3 of the Common Law Practice Act Amendment Act 1972 (Q). That amendment was proposed by the Queensland Law Reform Commission when conducting a review into the Lord Campbell's Act47. The Commission's report noted that such exclusions were made in New South Wales48 and Victoria49 in cases where the death was caused by the injury in question, and in all circumstances in South Australia50. The Commission recommended adopting the approach taken in South Australia51. The justification given by the Commission for the exclusion of certain types of damages in a claim brought for the benefit of the estate was the perception that the awarding of such damages to the estate was contrary to the principle of compensatory damages. Damages for pain and suffering, bodily or mental harm and the curtailment of expectation of life (all now excluded by par (a) of s 66(2)) were being paid to people who had not suffered those injuries52. insufficiently appreciate the that nature may characterisation of provisions like s 66(1) as a mere continuation of the deceased's chose in action. Nevertheless, they appear to have persuaded the Queensland legislature to insert such limitations in 197253. Arguments of 47 Queensland, Law Reform Commission, Report in Relation to an Examination of the "Fatal Accidents Acts" with a View to the Elimination of Anomalies, (1971). 48 Law Reform (Miscellaneous Provisions) Act 1944 (NSW), s 2(2)(d). 49 Administration and Probate Act 1958 (Vic), s 29(2)(c)(ii). 50 Survival of Causes of Action Act 1940 (SA), s 3(a). 51 Queensland, Law Reform Commission, Report in Relation to an Examination of the "Fatal Accidents Acts" with a View to the Elimination of Anomalies, (1971) 52 See Fleming, The Law of Torts, 3rd ed (1965) at 697. 53 In introducing the 1972 amendment, the then Attorney-General for Queensland, Sir William Knox, noted that the new s 15D was responding to criticism of the recovery by the estate of such damages as it seemed contrary to "the whole concept of common law to compensate a person who has not suffered": Queensland, Parliamentary Debates (Hansard), 11 October 1972 at 904. Crennan Bell Less apparent is the rationale for the limitation on the recovery of future probable earnings of the deceased had he or she survived, now found in par (d)(ii) of s 66(2). A similar exclusion was not made in other Australian jurisdictions until after the decision of the New South Wales Court of Appeal in Fitch v Hyde-Cates54, upheld on appeal to this Court55. Fitch overturned the assumption that damages for loss of earning capacity for a period after the date of death were not recoverable by the estate, and was followed throughout Australia by a flurry of amendments to exclude the recovery of such damages in terms similar to those found in s 66(2)(d)(ii)56. Prior to the 1972 Queensland amendment, in Oliver v Ashman57, Holroyd Pearce LJ said that there was no room for treating any differently a claim brought by a person whilst alive and that brought by the estate upon their death. This point was not critical in Oliver v Ashman, as the Court of Appeal went on to determine that not even a person whilst alive could recover for their lost earning capacity taking into account the probable period of their working life had they not been injured. This Court refused to follow Oliver v Ashman in Skelton v Collins58. There then was a risk that, in line with the observations of Holroyd Pearce LJ, the estate could recover for lost earning capacity referable to a period following the actual death of the deceased. The reasons, at the time of the 1972 amendment, why an estate should not be entitled to recover for the deceased's loss of earning capacity for a period 54 [1980] 2 NSWLR 757. 55 Fitch v Hyde-Cates (1982) 150 CLR 482. 56 Law Reform (Miscellaneous Provisions) Amendment Act 1982 (NSW); Administration and Probate (Survival of Actions) Act 1982 (Vic); Survival of Causes of Action Act Amendment Act 1982 (SA); Law Reform (Miscellaneous Provisions) Amendment Act 1982 (WA); Administration and Probate Amendment Act 1983 (Tas); Law Reform (Miscellaneous Provisions) Amendment Act 1986 (NT); Law Reform (Miscellaneous Provisions) (Amendment) Ordinance 1982 (ACT). 57 Oliver v Ashman [1962] 2 QB 210 at 227-228. See also Fitch v Hyde-Cates (1982) 150 CLR 482 at 489 per Mason J. 58 (1966) 115 CLR 94; [1966] HCA 14. Crennan Bell following death were succinctly explained in 1971 by Professor Atiyah (then holder of a Chair at the Australian National University) in response to an argument to the contrary. Professor Atiyah wrote59: "Since the dependants already have their claim under fatal accidents legislation, policy obviously is overwhelmingly against allowing such a claim to be made for the benefit of a deceased, while admitting it for a living plaintiff." Later, following the decision in Fitch, the Chief Justice's Law Reform Committee of Victoria explained that the problem with allowing the estate to recover for the "lost years" of earning capacity of the deceased was the risk of the damages payable by the tortfeasor being greater than the actual loss to the dependants60. Arguments of that nature had been discussed by Taylor J in Skelton v Collins61, and by Mason J in Fitch62. From this narrative, it is apparent that the limitations on recovery for pain and suffering, bodily or mental harm and curtailment of expectation of life found in par (a) of s 66(2) were directed to a particular, perceived problem: that the recovery by the estate of damages for heads of loss it had not, or would not, suffer was contrary to the rationale of compensatory damages. The limitation in par (d)(iii) of s 66(2) on the recovery of future probable earnings of the deceased had the deceased survived was directed to the same problem. It may have also been directed to a perceived problem of double liability, but this does not clearly appear from the extraneous materials at the time of the 1972 amendment. In an action under s 207B(7) of the Compensation Act, there is no apprehension about the recovery of damages for heads of loss not suffered. WorkCover is not seeking damages for something it has not suffered. To the contrary, the policy of the Compensation Act, as explained above, indicates that WorkCover is entitled to be indemnified for moneys it paid in compensation to Mr Thomson. That he has since died is not to the point. 59 "Loss of Earnings or Earning Capacity?", (1971) 45 Australian Law Journal 700. 60 Report on Survival of Causes of Action for Personal Injury and Matters Related to Claims for Wrongful Death, (1982) at 4. 61 (1966) 115 CLR 94 at 114. 62 (1982) 150 CLR 482 at 495-499. Crennan Bell The primary concern of the amendment to s 15D of the CLP Act in 1972 was to avoid the perceived violence that actions brought by the estate would do to the notion of compensatory damages if all damages which had been recoverable by the deceased thereafter could be recoverable by the estate of that person. It now is convenient to return to the opening words of s 66(2): "Where a cause of action survives pursuant to subsection (1) for the benefit of the estate of a deceased person, the damages recoverable in any action brought β¦" (emphasis added). The perceived mischief which the 1972 amendment addressed arose only when an action was brought for the benefit of the estate. Accordingly, the phrase "the damages recoverable in any action brought" in s 66(2) refers not to any action in the general sense, but rather only to actions brought pursuant to s 66(1) "for the benefit of the estate of a deceased person". Section 66(2) is a limitation on the remedy available, applying only to an action brought by the estate of the person in whose favour a liability existed. It is not a limitation on the liability of a wrongdoer towards the deceased. In Victoria, Gillard J reached a similar conclusion concerning the construction of s 29 of the Administration and Probate Act 1958 (Vic), a provision that was first introduced in Victoria by the Survival of Actions Act 1942 (Vic)63. The respondents rely on a statement by Latham CJ in Woolworths Ltd v "a person who has died cannot bring an action for his own death, simply because he is dead and cannot bring an action for anything, and not by reason of the application of any rule of law". From that apparent statement of the obvious, the argument for the respondents proceeds. The damages payable by the wrongdoer to the person who has received compensation could only be paid, when that person has died, to the estate of the person upon the estate bringing an action pursuant to s 66(1) yet subject to the limitations in s 66(2). It must therefore follow, it is said, that the damages payable to WorkCover under par (a) of s 207B(7) are also so limited. If these submissions were to be accepted, it would follow that, had there been no 63 Lotter v Salmon Street Ltd [2006] VSC 495 at [66]. 64 (1942) 66 CLR 603 at 611-612. Crennan Bell equivalent to s 66 in existence, no damages would be recoverable by WorkCover. As explained already in these reasons, such a construction would be inconsistent with the policy of the Compensation Act and should be rejected. That construction also ignores the critical distinction between liability for damages and the damages that would be payable upon a person, or their estate, bringing an action. Conclusion Upon an action brought by WorkCover pursuant to its right of indemnity under par (a) of s 207B(7) of the Compensation Act, it is entitled to be indemnified by the respondents "to the extent of" their liability to Mr Thomson. The amount to which WorkCover is entitled is to be assessed by reference to the amount for which the respondents would be so liable at the time of judgment in the indemnity proceedings, taking into account all limitations at common law or by statute on that liability. It is not to be assessed by reference to the amount of damages that would be recovered in a hypothetical action brought by Mr Thomson, or his estate upon his death, against the respondents. In the passage from Esso, referred to earlier in these reasons, it was pointed out that the statutory right of indemnity is not to be equated with the cause of action which the worker would have had. The claim to enforce the entitlement is a cause of action created by statute for an indemnity against a person liable to pay damages to another. That liability is best understood as an ingredient of the statutory right. The limitations found in s 66(2) of the Succession Act apply to limit damages which would be recoverable by Mr Thomson's estate upon an action brought "for the benefit of" his estate, and do not apply to an action brought by WorkCover seeking indemnity from the respondents under s 207B(7)(a). This follows as a matter of construction of s 66(2) and is consistent with the underlying policies to which that provision gives effect. Those policies have no application to the right of indemnity given by s 207B(7)(a) of the Compensation Act. Indeed they would be in conflict with it. The respondents pointed to what was a perceived incongruity if it were concluded that s 66(2) did not apply to an action brought under s 207B(7). Relevantly for this submission, ss 207B(2)-(4) provide: "(2) An amount paid as compensation to a person for an injury, to which there is an entitlement to payment of damages at a time or Crennan Bell for a period before the person becomes entitled to payment of damages by an employer or another person, is a first charge on any amount of damages recovered by the person to the extent of the amount paid as compensation to the person. (3) An employer or other person from whom the damages are recoverable must pay the insurer the amount of the first charge or, if the damages are not more than the amount of the first charge, the whole of the damages. Payment to the insurer under subsection (3), to the extent of the payment, satisfies the liability of the employer or other person for payment of the damages." The respondents correctly point out that if the estate sued the respondents pursuant to s 66(1) of the Succession Act, s 66(2) would limit the damages available to the estate. Having paid compensation, WorkCover would then have a first charge on any damages recovered by the estate, and the respondents would be obliged to pay the insurer up to the amount of the charge. Assuming the damages recovered by the estate would be less than the amount of compensation paid by the insurer, by virtue of the limits on recovery in s 66(2), WorkCover would receive less than it would have had the estate not sought recovery and WorkCover pursued its right of indemnity under s 207B(7). The respondents submit that there was no evident policy indicating that the legislature would have intended an outcome whereby WorkCover would recover from a wrongdoer amounts which differed as a consequence of the time at which the wrongdoer was sued (if at all) by the worker or his estate. However, this apparent conundrum is not sufficient to displace the construction that has been given to s 66(2) of the Succession Act in light of its history and purpose. The fact that WorkCover might recover from the respondents an amount which differs from what Mr Thomson's estate might recover is simply a reflection of the operation of the different policies of the two Acts. So far as concerns the Compensation Act, the point is that WorkCover is recovering moneys from the respondents because it has paid compensation to Mr Thomson on account of his injuries. It cannot be gainsaid that what the respondents will pay will reflect their liability in respect of those injuries. The amount that WorkCover recoups from a wrongdoer may differ in any event, depending upon when the amount representing a wrongdoer's legal Crennan Bell liability in respect of a worker's injuries is assessed. It might pay compensation and recover against a wrongdoer prior to the death of a worker from the injuries caused by the wrongdoer. In other cases, such as the present, proceedings could only be brought after death, which occurred shortly after the payment of compensation. The amount recovered will ordinarily be assessed at the date of judgment, following the rule applied in cases involving personal injuries65, although the rule may yield depending upon the circumstances66. In the present case it was accepted by WorkCover that the time for assessment was at the date of judgment. So far as concerns the sum assessed, much will depend upon the facts then known about the injuries and their effects. An assessment of prospective damage involves a measure of speculation; it is otherwise when that damage (or its diminution) has become actual67. In this case an assessment would take account of Mr Thomson's death. This may have the effect of limiting some heads of damage, although perhaps not to the extent which would result were the Succession Act to apply. In any event the fact that the respondents might be required to pay a larger sum in proceedings brought by WorkCover does not displace the construction given to s 66(2) of the Succession Act, in light of its history and purpose. Order The appeal should be allowed and the answers to questions 4 and 5 in the order of the Court of Appeal made on 27 March 2009 set aside. In lieu thereof, question 4 should be answered "no". Question 5 asked: "By whom should the costs of the Case Stated be paid?" The point which ultimately is determinative of these reasons is whether s 66(2) applied to limit the liability of the wrongdoer to the person who received compensation, or only applied to actions brought for the benefit of the estate. The respondents accept that if the appellant succeeds on that issue, they should bear 65 O'Brien v McKean (1968) 118 CLR 540 at 545; [1968] HCA 58. 66 Johnson v Perez (1988) 166 CLR 351 at 367; [1988] HCA 64. 67 Willis v The Commonwealth (1946) 73 CLR 105 at 109; [1946] HCA 22; Johnson v Perez (1988) 166 CLR 351 at 368-369. Crennan Bell the costs of the successful appeal to this Court. In the Court of Appeal the present respondents recovered three-quarters of their costs of the case stated, this being stated as the answer to question 5. Given the significant measure of success by the appellant in this Court, the answer given by the Court of Appeal to question 5 should be set aside and replaced by an order that the respondents pay the costs of the appellant in the Court of Appeal. |
HIGH COURT OF AUSTRALIA APPELLANT AND THE QUEEN RESPONDENT [2020] HCA 23 Date of Hearing: 17 March 2020 Date of Judgment: 30 June 2020 ORDER Appeal allowed. Set aside the answer given on 29 May 2019 by the Full Court of the Supreme Court of the Northern Territory to Question 2 of the questions referred to that Court and in lieu thereof order that the answer to that question be "Yes". On appeal from the Supreme Court of the Northern Territory Representation M L Abbott QC with C Jacobi and A E Abayasekara for the appellant (instructed by Northern Territory Legal Aid Commission) D J Morters SC with N M Loudon for the respondent (instructed by Director of Public Prosecutions (NT)) North Australian Aboriginal Justice Agency appearing as amicus curiae, limited to its written submissions Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Evidence β Criminal trial β Mixed statements β Where appellant interviewed by police prior to being charged β Where appellant made inculpatory and exculpatory statements during interview ("mixed statements") β Where recorded interview relevant and admissible β Where recorded interview not tendered by prosecution at trial β Whether prosecution's obligation to put case fully and fairly requires tender of records of interview containing mixed statements. Words and phrases β "admissibility of mixed statements", "admissions", "all available, cogent and admissible evidence", "duty of fairness", "ethical practice", "fair trial", "fully and fairly", "inculpatory and exculpatory statements", "miscarriage of justice", "mixed record of interview", "mixed statement", "obligation to tender", "prosecutorial discretion", "prosecutorial duty", "record of interview", "rule of practice", "speculation by the jury", "tactical decision". Evidence (National Uniform Legislation) Act 2011 (NT), ss 59(1), 81, 190. KIEFEL CJ, BELL, GAGELER, KEANE AND GORDON JJ. The appellant was charged on indictment with offences against the Criminal Code (NT) and stood trial before a jury in the Supreme Court of the Northern Territory. The appellant had been interviewed by the police about the offences in question prior to being charged. The interview was recorded electronically. The recorded interview contained statements by the appellant in the nature of admissions together with exculpatory statements. The appellant offered an explanation for his conduct which could be taken to be a claim of self-defence. Records of this kind, which contain both inculpatory and exculpatory statements, are commonly called "mixed statements"1. The recorded interview was relevant and admissible. The prosecution did not tender the recorded interview as part of the Crown case, although it was not suggested that the statements made by the appellant were demonstrably untrue or unreliable. The essential reason for the refusal to tender the statements into evidence was that they would not assist the Crown case. The appellant did not give evidence at trial. His retrial2 was stayed whilst questions which there arose were referred to a Full Court of the Supreme Court of the Northern Territory for consideration. The principal issue concerned the discretion of a prosecutor with respect to the tender of evidence. More particularly the question for the Full Court was whether the prosecution was obliged to tender the recorded interview containing the mixed statements. The Court answered that question in the negative3. The appellant contends that, ordinarily speaking, the prosecution's obligation of fairness in the conduct of a trial would require its tender unless there were good reasons not to do so. 1 Malek (ed), Phipson on Evidence, 19th ed (2018) at [36-33]. See below at [11]. 3 R v Nguyen (2019) 345 FLR 40 at 46 [24] per Kelly and Barr JJ, 54 [56] per Bell Gordon The evidence and the interview The appellant was charged with one count of unlawfully causing serious harm to another and one count of assault aggravated by the use of an offensive weapon4. He pleaded not guilty to both counts. The Crown case on count 1 was that he either threw a bottle of beer at the victim or hit the victim on the head with it, causing serious harm; its case on count 2 was that he threw a bottle of beer at a second victim. The evidence from Crown witnesses was that the appellant and the victims were at a party with others in a house where alcohol was consumed. The first victim and the appellant had an exchange of words with raised voices when the appellant did not follow the rules of a singing game and refused the victim's requests to do so. One witness said they afterwards shook hands. After the game the appellant and the first victim were outside. The victim said that the appellant followed him outside, approached him with something in his hand and hit him on the top of his head. A witness said that he heard one of the group yell out that there was fighting outside; another heard the same person say that the appellant and the first victim were fighting. The person who had yelled out said that he saw, through a window of the house, the appellant hit someone with a bottle and that person fall to the ground. The witnesses saw the victim enter the house bleeding from his head injuries. The second victim was said to have been one of two people who ran after the appellant. The appellant then threw a bottle of beer at him. The appellant was administered a special caution prior to his interview, which was conducted with the assistance of an interpreter. The appellant was asked to explain the caution in his own words. He said: "Whatever you ask and whatever I answer will be taken as evidence in the court." In the interview the appellant admitted throwing the bottles but said, in effect, that he did so in self-defence. He said that while he was at the party singing the first victim became angry towards him. They exchanged words. Five of those present went outside to smoke; three showed anger towards him and the appellant thought they wanted to hit him. Two of them blocked the door to the house. The appellant took two bottles of beer and threatened to throw them if they hit him. The first victim moved forward. The appellant said he had no choice but to throw the bottle of beer at him for otherwise he would have been hit. When he threw the 4 Criminal Code (NT), s 188(1) and (2)(m). Bell Gordon bottle, he was at a distance of two to three metres from the victim, who was struck on the head. The appellant then ran outside to the road. When others followed he threw the other bottle at them as a warning. The proceedings below At the appellant's first trial the prosecution played the recorded interview as part of its case. The jury were unable to reach a verdict. Before the commencement of the second trial the prosecutor advised the Court that the Crown would not tender the recorded interview. The trial judge asked if that was because the prosecutor considered the Crown had "a better chance of winning" without the recorded interview, to which the prosecutor responded: "To be blunt, your Honour, yes it's a tactical decision." He said that if the exculpatory statements were given in evidence the appellant would not be subject to cross-examination on that account. He pointed out that the appellant could give evidence about the matters in the record of interview if he chose to do so. On an application to stay the trial, defence counsel argued that the recorded interview was properly characterised as a mixed statement and was admissible in the Crown case, and that in fairness the Crown should tender it. The prosecutor disputed that the interview was a mixed statement and asserted an absolute discretion to decide whether to adduce it. The trial judge referred two questions to the Full Court5: "Question 1: Is the recorded interview ... admissible in the Crown case? Question 2: Is the Crown obliged to tender the recorded interview?" A Court of Criminal Appeal of the Supreme Court of the Northern Territory constituted by the same judges (Kelly, Blokland and Barr JJ) had previously considered essentially the same question regarding the Crown's obligation in Singh v The Queen6. There on the first day of the trial the prosecutor advised the trial judge that she did not anticipate that the Crown would lead evidence of the record of interview. The prosecutor gave as her reason for not tendering the record that it would go to the jury untested, which would not be fair to the Crown. Defence counsel protested but the trial judge ruled that he was unable to compel the Crown Supreme Court Act 1979 (NT), s 21. (2019) 344 FLR 137. Bell Gordon to tender the record in its case. An application by defence counsel on the second day of the trial to tender the record of interview in its entirety was refused on the basis that an exculpatory or self-serving statement can only be introduced as an exception to the hearsay rule when it is tendered with admissions relied on by the Crown as part of its case7. Mr Singh appealed from his conviction on the ground that the decision of the Crown not to tender the record of interview deprived him of a reasonable chance of acquittal. The Court of Criminal Appeal by a majority (Kelly and Barr JJ, Blokland J dissenting) dismissed the appeal. It was the view of the majority8 that it is a matter for the prosecutor to decide whether to adduce evidence of admissions. If the evidence is not called it is then a matter for an appeal court to determine whether the accused had been denied a fair trial9. An appellant cannot discharge the onus of proving unfairness merely by establishing that an exculpatory account was not put before the jury or that he was obliged to give evidence in order to place his version of events before the jury10. The majority in Singh accepted as uncontroversial11 that if the prosecution wishes to rely on admissions by an accused in a record of interview or other statement, it is obliged to tender the whole of a mixed statement12. Kelly J (Barr J agreeing) considered that there is no general principle that a prosecutor must, as a matter of fairness, tender either exculpatory or mixed out-of-court statements by an accused13. The Full Court answered Question 1: "Yes". Kelly and Barr JJ added to their answer that "the record of interview would be admissible in evidence at the 7 R v Singh (2018) 328 FLR 427 at 428 [4]. Singh v The Queen (2019) 344 FLR 137 at 141 [12], 166 [68]. Singh v The Queen (2019) 344 FLR 137 at 149 [25], 166 [68]. 10 Singh v The Queen (2019) 344 FLR 137 at 166 [68]. 11 Singh v The Queen (2019) 344 FLR 137 at 141 [13]. 12 See also Singh v The Queen (2019) 344 FLR 137 at 177-178 [106] per Blokland J. 13 Singh v The Queen (2019) 344 FLR 137 at 165-166 [66]. Bell Gordon instance of the Crown. The exculpatory parts of the interview are not admissible at the instance of the accused." Their Honours answered Question 2: "No". In her reasons Blokland J accepted that, because of the view of the majority in Singh, the answer to Question 2 must be in the negative, but considered that there remained the question whether the trial could be perceived to be fair when evidence of this kind is withheld from the jury. In that regard, her Honour observed that the appellant was given to understand at the interview that what he said would be put before the jury. Her Honour suggested that the prosecutor reconsider the question of tender of the recorded interview14. In relation to the question as to whether the prosecution was obliged to tender the recorded interview, Kelly and Barr JJ reiterated the view which their Honours had expressed in Singh that there is no general rule or principle that the prosecution's duty of fairness requires it to tender a record of interview simply because it contains admissible material. Fundamentally it is a matter for the prosecution to determine what witnesses will be called and what evidence will be adduced in the Crown case. A prosecutor may take into account a number of factors, including whether the evidence of a particular witness is essential to the Crown case; whether the witness is credible; and whether it is in the interests of justice for particular evidence to be subject to cross-examination by the Crown15. The admissibility of mixed statements Chapter 3 of the Evidence (National Uniform Legislation) Act 2011 (NT) ("the Uniform Evidence Act"), which was adopted in the Northern Territory, is concerned with the admissibility of evidence. Section 56(1), which appears in Pt 3.1, states the primary rule that evidence that is relevant in a proceeding is admissible in the proceeding except as otherwise provided by that Act. Section 59(1), which appears in Pt 3.2, states the hearsay rule in terms to the effect that evidence of a previous, out-of-court, statement made by a person is not admissible to prove the existence of a fact that it can reasonably be supposed that the person intended to assert. Section 81(1), which appears in Pt 3.4, provides that the hearsay rule does not apply to evidence of an admission. Section 81(2) provides for a further 14 R v Nguyen (2019) 345 FLR 40 at 54 [56]. 15 R v Nguyen (2019) 345 FLR 40 at 44 [16]. Bell Gordon exception to the hearsay rule. The hearsay rule does not apply to evidence of a previous statement: that was made in relation to an admission at the time the admission was made, or shortly before or after that time; and to which it is reasonably necessary to refer in order to understand the admission." It is through the combined operation of s 81(1) and (2) that the exculpatory aspects of a mixed statement may be admissible under the Uniform Evidence Act. Once admitted they are evidence of the truth of what is there stated, subject to questions of weight. There are of course other means by which a record of interview may be admissible but it is not necessary to canvass them. It is to be expected that exculpatory statements made in a record of interview which also contains admissions will usually satisfy the requirements of s 81(2)(a) and (b). In the event that there is some doubt about the connection between an exculpatory statement and an admission16, it should be borne in mind that what is to be made of a mixed statement is a matter for the jury, which might attach different degrees of credit to different parts of it17. It has been observed18 that, under the Uniform Evidence Acts, provided relevant evidence is rationally capable of acceptance, questions of credibility and reliability are to be seen as squarely within the province of the jury. Considerations of this kind suggest that no narrow approach should be taken to the relationship between exculpatory statements and admissions. At common law exculpatory or self-serving elements of a mixed statement were also received into evidence as an exception to the hearsay rule. The exception has been said to trace back to 19th century authorities19. The anomalous position 16 See also [44] below. 17 Malek (ed), Phipson on Evidence, 19th ed (2018) at [36-33]. 18 R v Bauer (a pseudonym) (2018) 92 ALJR 846 at 866 [70]; 359 ALR 359 at 382. 19 Malek (ed), Phipson on Evidence, 19th ed (2018) at [36-35]; Gooderson, "Previous Consistent Statements" (1968) 26 Cambridge Law Journal 64 at 66. Bell Gordon which formerly prevailed at common law20, by which exculpatory statements were said to be something less than evidence of their truth, has been resolved21. Howsoever mixed statements come to be admitted into evidence they are invariably subject to a direction to the jury that they may give less weight to exculpatory assertions than to admissions and that it is for them to decide what weight is to be given to a particular statement22. The rationale for the direction is that exculpatory statements are not statements made against interest, are not made on oath and are not subject to cross-examination. The admissibility of mixed statements by statute facilitates their reception as part of the Crown case. It follows from the terms of s 81(2) that any exculpatory evidence connected with an admission can only be admissible when an admission is to be relied upon, and that will invariably be by the Crown. But the Uniform Evidence Act and its provisions for admissibility do not provide an answer to the question which arises in this matter, namely whether the prosecution may be obliged to tender a mixed statement. Practice and principle The conduct of a criminal trial is subject to practices and procedures23 which are not to be found in statutes such as the Uniform Evidence Act and the Criminal Code (NT). These practices and procedures may be informed by principles or rules which are regarded as fundamental to the conduct of a criminal trial. One such fundamental rule is that it is for the prosecution to decide which witnesses are to be called and what evidence is necessary for the proper presentation of the case for the Crown24. Another fundamental principle affecting the conduct of a trial is that the prosecution must put its case both fully and fairly 20 Pearce (1979) 69 Cr App R 365 at 369-370. 21 Duncan (1981) 73 Cr App R 359 at 365; R v Sharp [1988] 1 WLR 7 at 15; [1988] 1 All ER 65 at 71; R v Aziz [1996] AC 41. 22 Mule v The Queen (2005) 79 ALJR 1573 at 1580 [25]; 221 ALR 85 at 94. 23 R v Soma (2003) 212 CLR 299 at 308 [26]-[27]. 24 See, eg, Richardson v The Queen (1974) 131 CLR 116 at 119; R v Apostilides (1984) 154 CLR 563 at 575; Dyers v The Queen (2002) 210 CLR 285 at 295 [17]. Bell Gordon before the jury25. The broader concern that trials be conducted fairly has informed many aspects of the rules of evidence both at common law and in the Uniform Evidence Acts26 as well as aspects of practice and procedure in the context of a trial. It is well settled that if the prosecution seeks to rely upon an out-of-court admission or other incriminating statement the whole statement made by the accused must be put before the jury including those hearsay statements by which the accused tried to exculpate himself or herself. This practice is not to be confused with questions of admissibility, although the two may share a common rationale. The practice may be understood to reflect the fundamental obligation referred to above, that the prosecution put its case fully and fairly. The prosecution may not "pick and choose" between statements which it says bear out its case and those which do not27. Differences of opinion and practice It has been observed that there has been a divergence of opinion in Australian courts as to whether the prosecution has an obligation to tender mixed statements28. In Ritchie v Western Australia29, McLure P observed that there was a line of authority in that State that it is for the prosecution to determine whether or not it wishes to adduce an admissible out-of-court statement made by an accused as part of its case. Her Honour said that in R v Callaghan30 the Queensland Court 25 R v Soma (2003) 212 CLR 299 at 308 [27]. 26 Australian Law Reform Commission, Uniform Evidence Law, ALRC Report 102 27 Mahmood v Western Australia (2008) 232 CLR 397 at 408 [39], referring to Jack v Smail (1905) 2 CLR 684 at 695. 28 Barry v Police (SA) (2009) 197 A Crim R 445 at 456 [44]; see also Ritchie v Western Australia (2016) 260 A Crim R 367 at 377 [46]. (2016) 260 A Crim R 367 at 374-375 [39]. [1994] 2 Qd R 300. Bell Gordon of Appeal had expressed a similar view. It suffices to say that that view has been challenged31. In Barry v Police (SA)32, Kourakis J concluded that the prosecution was under no obligation to tender a mixed statement. This is a view with which not all judges of the Supreme Court of South Australia have agreed. In R v Helps33, Peek J considered that the situation was governed by the principle that it is the duty of the prosecution to present the Crown case fairly and completely. No mention was made in Barry of the decision of the South Australian Court of Criminal Appeal in R v Golding and Edwards34, where it was observed that it had been the practice in South Australia for the prosecutor to tender statements made to police even if they were exculpatory. More recently, it has been observed that the practice may have changed over time35. Some years ago it was noted by the Victorian Court of Appeal36 that evidence in the nature of self-serving statements was traditionally led by the Crown, whether it was also incriminating or not, both as a matter of fairness and to show the response made by the accused to the allegations made against them when they were given the first opportunity to do so. The practice has also been explained as consistent with the duty of the prosecution to give the jury a complete and fair understanding of the events on which the prosecution relies37. A line of authority in New South Wales refers to the common practice of the prosecution adducing evidence of conversations with police containing exculpatory statements. A justification for the practice is said to be that otherwise 31 Mahmood v Western Australia (2008) 232 CLR 397 at 408-409 [41]. (2009) 197 A Crim R 445 at 463 [70]. (2016) 126 SASR 486 at 555 [336]-[337]. (2008) 100 SASR 216 at 236 [54]; see also Spence v Demasi (1988) 48 SASR 536 at 540; R v H, ML [2006] SASC 240 at [25]-[27]. 35 R v Helps (2016) 126 SASR 486 at 493 [25]. 36 R v Su [1997] 1 VR 1 at 64. 37 R v Rudd (2009) 23 VR 444 at 458 [55]-[56], [59]. Bell Gordon the jury would be left to speculate as to whether the accused had given any account of their actions when first challenged by the police38. Whatever be the difference in prosecutorial practices or the views of judges and intermediate appellate courts of the States and Territories concerning mixed statements, there can be no question about the obligation of the prosecution to present its case fully and fairly. It is an obligation which informs the rules of conduct of prosecutors which apply to members of the legal profession in the Northern Territory39. It is an obligation which has been reiterated in a number of decisions of this Court as a fundamental principle. And it is that fundamental principle which resolves the question on this appeal. Prosecutorial discretion and fairness In Richardson v The Queen40 it was pointed out that any discussion of the role of a Crown prosecutor must commence with the fundamental proposition, noted above41, that it is for the prosecutor to determine what evidence will be called and how the case for the Crown will be presented. The Court went on to say that the prosecution also has the responsibility of ensuring that the Crown case is presented with fairness to the accused. In Richardson the Court acknowledged that there may be many factors for the prosecution to take into account regarding evidence, including whether it is credible and whether it is in the interests of justice that it be tendered. Importantly, 38 Familic (1994) 75 A Crim R 229 at 234; R v Keevers (unreported, Court of Criminal Appeal of the Supreme Court of New South Wales, 26 July 1994) at 7, both quoting R v Astill (unreported, Court of Criminal Appeal of the Supreme Court of New South Wales, 17 July 1992). 39 Northern Territory Bar Association, Barristers' Conduct Rules, rr 62, 66B(a)-(b); Law Society Northern Territory, Rules of Professional Conduct and Practice, rr 17.46, 17.52(a)-(b); see also Northern Territory, Guidelines of the Director of Public Prosecutions, Guidelines 1, 14. (1974) 131 CLR 116 at 119. 41 See above at [26]. Bell Gordon the Court observed42, it is in light of those factors that a prosecutor must determine the course "which will ensure a proper presentation of the Crown case conformably with the dictates of fairness to the accused". This, the Court said, is what is meant by prosecutorial "discretion". The discretion is not reviewable43. The tender of evidence by the Crown cannot be compelled by a trial judge44 although in practice a trial judge might suggest that the prosecutor reconsider a decision not to tender certain evidence. A trial judge might do so where it is foreseen that a failure to do so may result in a miscarriage of justice. Whilst the decision remains one for the prosecutor to make, the reality is that if the exercise of that discretion miscarries the accused might be denied a fair trial. In Whitehorn v The Queen45 it was explained that because a failure to call evidence may result in a miscarriage of justice and a new trial it is possible to speak of a Crown prosecutor being bound, or under a duty, to call all available material witnesses. It is not to be understood as a duty owed to an accused. It forms part of the functions of a prosecutor. It has been said that the concept of a fair trial cannot comprehensively or exhaustively be defined46. But there can be no doubt that fairness encompasses the presentation of all available, cogent and admissible evidence. In Ziems v The Prothonotary of the Supreme Court of New South Wales47, Fullagar J observed the rule in criminal cases to be that "the prosecution is bound to call all the material witnesses before the Court, even though they give inconsistent accounts, in order that the whole of the facts may be before the jury". This statement was quoted with 42 Richardson v The Queen (1974) 131 CLR 116 at 119. 43 Richardson v The Queen (1974) 131 CLR 116 at 119. 44 Whitehorn v The Queen (1983) 152 CLR 657 at 674. (1983) 152 CLR 657 at 674-675. 46 Dietrich v The Queen (1992) 177 CLR 292 at 300, 353. (1957) 97 CLR 279 at 294, quoting R v Harris [1927] 2 KB 587 at 590. Bell Gordon approval by the Court in Richardson48, where, as noted above49, it was said that it was the responsibility of the prosecution to present the case for the Crown "conformably with the dictates of fairness to the accused". In Whitehorn50 Dawson J said that "[a]ll available witnesses should be called whose evidence is necessary to unfold the narrative and give a complete account of the events upon which the prosecution is based". The respondent to this appeal sought to distinguish these and other cases on the basis that they concerned decisions whether to call material witnesses, the implication being that mixed inculpatory and exculpatory statements made by an accused when interviewed by police about an offence are not subject to the same or similar considerations. The simple answer to that submission is that what was said in cases such as Richardson and Whitehorn about the responsibilities of a prosecutor apply by analogy. They apply to the tender of all evidence which may properly and fairly inform the jury about the guilt or otherwise of the accused. As Dawson J said in Whitehorn51, the prosecutorial obligation to call all witnesses is but an aspect of "the general obligation which is imposed upon a Crown Prosecutor to act fairly in the discharge of the function which he performs in a criminal trial. That function is ultimately to assist in the attainment of justice between the Crown and the accused." So understood, the power or discretion of a prosecutor is not unconfined52. It is subject to the principle that, as a general rule, the prosecution must offer all its proofs during the progress of its case53. Thus in R v Soma it was said54 that the prosecution could not, conformably with its obligations, tender part only of a tape recording of an interview with the accused to prove that he had made a prior inconsistent statement. If the prosecution case was to be put fully and fairly, it had 48 Richardson v The Queen (1974) 131 CLR 116 at 119, 120-121. 49 See above at [34]. 50 Whitehorn v The Queen (1983) 152 CLR 657 at 674. See also Mahmood v Western Australia (2008) 232 CLR 397 at 408 [39], fn 33 and the authorities cited therein. 51 Whitehorn v The Queen (1983) 152 CLR 657 at 675. 52 R v Soma (2003) 212 CLR 299 at 309 [29]. 53 R v Soma (2003) 212 CLR 299 at 311 [36]. (2003) 212 CLR 299 at 309-310 [30]-[31]. Bell Gordon to adduce any admissible evidence of what the accused had said to the police when interviewed. To the extent that the recording of the interview contained exculpatory material, if the prosecution wished to rely on inculpatory material, it was "bound to take the good with the bad". The prosecutor's obligation to put the case fairly required the prosecutor to put the interview in evidence "unless there were some positive reason for not doing so". What was said in Soma should be understood not just as a caution to prosecutors about being selective but rather as a reminder about the prosecutorial obligation to present all available, cogent and admissible evidence. Cases involving the omission of a vital witness may provide somewhat more stark examples of a failure properly to exercise that discretion than a mixed statement given by an accused in a police interview, but the latter may have just as important an impact on the outcome of the trial and the need for a new one. It was considerations of what is necessary for the proper presentation of the prosecution case which led Hayne J to say in Mahmood v Western Australia55 that: "If there is admissible evidence available to the prosecution of out-of-court statements of the accused that contain both inculpating and exculpating material, fair presentation of the prosecution case will ordinarily require that the prosecution lead all that evidence." The use of digital recordings together with statutory provisions aimed at ensuring that they have not been tampered with56 have alleviated some concerns formerly held about methods of questioning suspects. The fact that suspects are invariably questioned by police is widely known, including to persons who may become members of a jury. The point made by the New South Wales Court of Criminal Appeal as explaining the practice of prosecutors to tender mixed statements is apposite57. To do otherwise would encourage juries to speculate as to whether the accused had given an account of their actions when first challenged by the police. The omission of that evidence may for this reason also work an unfairness to the accused. There may be circumstances where it would be unfair to an accused to tender a record of interview, for example where the accused has refused to (2008) 232 CLR 397 at 409 [41]. 56 Police Administration Act 1978 (NT), Pt VII, Div 6A. 57 See above at [31]. Bell Gordon comment. In such a circumstance the omission of that evidence is justified. But where an accused provides both inculpatory and exculpatory statements to investigating police officers, it is to be expected that the prosecutor will tender that evidence in the Crown case, unless there is good reason not to do so, if the prosecutorial duty is to be met. Earlier in these reasons58 it was explained that the question of the duty of a prosecutor is not to be confused with that of the admissibility of evidence of mixed statements. The provisions of the Uniform Evidence Act respecting exceptions to the hearsay rule facilitate the tender, but they do not determine whether the evidence should be tendered. There is another provision of the Uniform Evidence Act which permits the prosecutorial duty to be discharged where the provisions relating to the hearsay exceptions are not met. It will be recalled that ss 59(1) and 81(1) and (2) appear respectively in Pts 3.2 and 3.4 of the Uniform Evidence Act. Section 190(1) provides that the parties to a proceeding may dispense with the application of provisions of those and other Parts in relation to particular evidence or generally. In criminal proceedings s 190(2) requires that an accused's consent must be the subject of legal advice. In a case where a record of interview does not meet the requirements of s 81(2) there seems no reason in principle why a prosecutor ought not properly resort to this provision with the consent of the accused. Countervailing factors What has been said about the obligations which attach to the power or discretion of a prosecutor with respect to the tender of evidence does not detract from the need for a prosecutor to consider factors about particular evidence which may properly influence the decision whether to call that evidence. There may be valid reasons not to do so. In Richardson the prosecutor had grounds for believing that the witness in question was not credible or truthful. The prosecution could not be expected to tender the evidence of a witness whose account has been carefully prepared or is otherwise contrived59. It would not be necessary for the full presentation of the prosecution case to adduce evidence which is no more than a scurrilous attack on the character of a witness or when it is clear to demonstration 58 See above at [25]. 59 Pearce (1979) 69 Cr App R 365 at 370. Bell Gordon that it is false, as where it is contradicted by other, objective evidence. But circumstances such as these may be expected to be rare. The decision whether to tender evidence should be guided in each case by the overriding interests of justice. It should only be where the reliability or credibility of the evidence is demonstrably lacking that the circumstances may be said to warrant a refusal, on the part of a prosecutor, to call such evidence60. A prosecutor acting in accordance with the responsibilities of their office is not to be expected to be detached or disinterested in the trial process61. A prosecutor is to be expected to act to high professional standards and therefore to be concerned about the presentation of evidence to the jury. It is to be expected that some forensic decisions may need to be made. It is not to be expected that they will be tactical decisions which advance the Crown case and disadvantage the accused. In Ziems62, Fullagar J observed that in that case the object of not calling a vital witness could only have been to deny the other party the ability to cross- examine him. Whilst the creation of a tactical advantage might be permissible in civil cases, in criminal cases it may not accord with traditional notions of a prosecutor's function, his Honour said. In Whitehorn63, Deane J said that the observance of traditional considerations of fairness requires that prosecuting counsel refrain from deciding whether to call a material witness by reference to tactical considerations. It will be obvious that a decision by a prosecutor to refuse to tender a mixed statement so that the accused is forced to give evidence falls into this category. Conclusion and orders The recorded interview of the appellant provided his detailed account of what occurred. He was challenged a number of times by the interviewing police officer but his account remained consistent. It was not suggested that his account could be described as demonstrably false because it differed from the account of others. It provided the foundation for a claim to self-defence and the basis for 60 R v Apostilides (1984) 154 CLR 563 at 575-576. 61 Whitehorn v The Queen (1983) 152 CLR 657 at 675. 62 Ziems v The Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 63 Whitehorn v The Queen (1983) 152 CLR 657 at 663-664. Bell Gordon questioning Crown witnesses by defence counsel. It is evident that the appellant believed that what he was to say in the interview would be placed before the court64. The decision not to adduce it was admittedly a tactical one, to favour the Crown. It did not accord with the prosecutorial obligation respecting the presentation of the Crown case and disadvantaged the appellant. There should be orders allowing the appeal. The answer to the second question referred to the Full Court should be set aside. That question should be answered: "Yes". 64 See above at [9]. Nettle NETTLE J. I have had the advantage of reading in draft the reasons for judgment of the plurality, and I agree with their Honours that the Crown's obligation to put its case both fully and fairly before the jury means that the Crown ought to tender an accused's mixed record of interview unless there are proper grounds for not doing so65. As professional practice in New South Wales and Victoria has long recognised66, a prosecutor's failure to adduce such admissible evidence of an accused's response when confronted with allegations of criminality is apt to present an unfair choice to the accused between electing to give or tender such evidence and risking adverse speculation by the jury. That conclusion does not entail, however, and I am not persuaded, that the Crown's obligation of fairness ordinarily extends to the presentation to the jury of "all available, cogent and admissible evidence"67. To date, the scope of the obligation has developed incrementally68, and by reference to identified procedural disadvantages to accused persons from decisions by the prosecution not to adduce 65 R v Soma (2003) 212 CLR 299 at 309-310 [31] per Gleeson CJ, Gummow, Kirby and Hayne JJ; Mahmood v Western Australia (2008) 232 CLR 397 at 408 [39] per 66 R v Keevers (unreported, Court of Criminal Appeal of New South Wales, 26 July 1994) at 7-8 per Hunt CJ at CL (Carruthers and Bruce JJ agreeing); R v Su [1997] 1 VR 1 at 64 per Winneke P, Hayne JA and Southwell A-JA; R v Rymer (2005) 156 A Crim R 84 at 90 [33] per Grove J (Barr and Latham JJ agreeing at 100 [92], [93]); R v Rudd (2009) 23 VR 444 at 457-458 [54]-[57] per Redlich JA (Maxwell P and Vickery A-JA agreeing at 445 [1], 465 [93]). 67 Reasons of Kiefel CJ, Bell, Gageler, Keane and Gordon JJ at [36]. 68 See, eg, R v Simmonds (1823) 1 Car & P 84 at 84 per Hullock B [171 ER 1111 at 1111-1112]; R v Beezley (1830) 4 Car & P 220 at 220 per Littledale J [172 ER 678 at 678]; R v Bodle (1833) 6 Car & P 186 at 187 per Gaselee J (Vaughan B agreeing) [172 ER 1200 at 1201]; R v Vincent (1839) 9 Car & P 91 at 106 per Alderson B [173 ER 754 at 761]; R v Carpenter (1844) 1 Cox CC 72 at 72 per Alderson B; R v Barley (1847) 2 Cox CC 191 at 191 per Pollock CB; cf R v Woodhead (1847) 2 Car & K 520 at 520 per Alderson B [175 ER 216 at 216]; R v Farrell (1848) 3 Cox CC 139 at 139 per Pennefather B; R v Cassidy (1858) 1 F & F 79 at 79 per Parke B [175 ER 634 at 634]; cf also Ziems v The Prothonotary of the Supreme Court of NSW (1957) 97 CLR 279 at 294 per Fullagar J; Whitehorn v The Queen (1983) 152 CLR 657 at 664-665 per Deane J; R v Apostilides (1984) 154 CLR 563 at 576 per Gibbs CJ, Mason, Murphy, Wilson and Dawson JJ; Velevski v The Queen (2002) 76 ALJR 402 at 411 [47] per Gleeson CJ and Hayne J, 421 [118] per Gaudron J, 432 [176] per Gummow and Callinan JJ; 187 ALR 233 at 245-246, 260, 274. Nettle particular types of evidence69. As it appears to me, that approach recognises that the Anglo-Australian system of criminal justice is not only accusatorial, but also adversarial70, and, therefore, that "a criminal trial is not, and does not purport to be, an examination and assessment of all the information and evidence that exists, bearing on the question of guilt or innocence"71. It follows that there may well be unexceptional cases in which a prosecutor would be perfectly entitled to choose not to tender available, cogent and admissible evidence without risk of unfairness to the accused72. Of course, each case depends on its own facts and circumstances, and, in the end, the question of whether a prosecutor's decision not to tender some piece of evidence is productive of a substantial miscarriage of justice can only be judged in hindsight on appeal against conviction73. But, if for no other reason than that, I am not willing to predicate as a proposition of apparently general application that the Crown's obligation to put its case fully and fairly includes a prima facie duty to adduce all "cogent"74 and admissible evidence available to the Crown. For the reasons above, however, I agree in the orders proposed by the plurality. 69 See Wigmore, Evidence in Trials at Common Law, Chadbourn rev (1978), vol 7, 70 See Doggett v The Queen (2001) 208 CLR 343 at 346 [1] per Gleeson CJ; Nudd v The Queen (2006) 80 ALJR 614 at 618-619 [9] per Gleeson CJ; 225 ALR 161 at 164; R v Baden-Clay (2016) 258 CLR 308 at 324 [48] per French CJ, Kiefel, Bell, 71 Ratten v The Queen (1974) 131 CLR 510 at 517 per Barwick CJ, quoting Re Ratten [1974] VR 201 at 214 per Smith J for the Full Court. 72 See, eg, Velevski (2002) 76 ALJR 402 at 421 [118] per Gaudron J; 187 ALR 233 at 73 Apostilides (1984) 154 CLR 563 at 577 per Gibbs CJ, Mason, Murphy, Wilson and Dawson JJ; cf R v Hair [2009] NTSC 9 at [15] per Mildren J; R v Nguyen (2019) 345 FLR 40 at 42-43 [8]-[12] per Kelly and Barr JJ. 74 See and compare R v Kneebone (1999) 47 NSWLR 450 at 460 [49]-[50] per Greg James J, 470-471 [102] per Smart A-J (Spigelman CJ agreeing with both at 451 [1]). Edelman Introduction This appeal raises the following legal question: what are the legal consequences, for a trial governed by the Evidence (National Uniform Legislation) Act 2011 (NT) ("the Uniform Evidence Act"), of the refusal of a prosecutor to tender into evidence a "mixed" video record of interview between the police and an accused person β that is, a record containing both inculpatory and exculpatory statements. The facts and circumstances of this appeal are set out more fully in the joint judgment. I agree with their Honours that the appeal should be allowed generally for the reasons they express. The central focus of the following reasons is upon the difficulties that arise from the way in which this legal question arose before the Full Court of the Supreme Court of the Northern Territory and the expression of the questions referred to that Court. The usual circumstance in which an allegation of breach of prosecutorial duty arises before an appellate court can be seen in Singh v The Queen, Matter D16 of 2019, with which this appeal was heard concurrently. In Singh, the appellant was convicted after trial before a judge and jury. The question before the Court of Criminal Appeal of the Northern Territory75 was whether the appeal should be allowed because the failure of the prosecutor to tender the video record of interview occasioned a miscarriage of justice76. But the legal question in this appeal arose in a different way. The relevant trial, namely the retrial, of Mr Nguyen had not even begun when the issue arose. The trial was stayed pending the referral of two questions to the Full Court of the Supreme Court of the Northern Territory, which concerned (i) whether the video record of interview was "admissible in the Crown case", and (ii) whether the Crown was "obliged to tender the recorded interview"77. The Full Court answered the first question "Yes" and the second question "No". Although the answer to the first question was not challenged by a cross-appeal in this Court, it is necessary to understand the basis for that answer in order to answer the second question. The assumption underlying the literal expression of the second question referred to the Full Court is that prior to a trial there can be an existing legal obligation on interview. That assumption is incorrect. A so-called "obligation" to tender a video record of interview, like a so-called "obligation" to call a witness, is not a free-standing obligation at all. It is an aspect of the prosecutor's duty of fairness. The content of tender a video record of the prosecution 75 Singh v The Queen (2019) 344 FLR 137 at 149 [24]-[25], 182 [122]. 76 See Criminal Code (NT), s 411(1). 77 R v Nguyen (2019) 345 FLR 40 at 43 [12]. Edelman the prosecutor's duty of fairness depends upon all the circumstances at trial. It can never be said with certainty prior to the conclusion of the prosecution case that a prosecutor's duty of fairness would necessarily require a witness to be called or a video record of interview to be tendered. An initial impression that fairness would require a witness to be called or a video record of interview to be tendered might be affected by later circumstances, perhaps wholly unexpected, which might even make the tender of a video record of interview or calling of a witness unfair. If the second question referred to the Full Court were understood literally as asking, at a point prior to trial, whether there will be a legal obligation for the prosecution to tender the video record of interview during the prosecution case at trial then the answer would be "Impossible to answer". The manner in which this issue was argued in the Full Court and in this Court reveals that the second question can only be understood as asking about a breach of the prima facie content of the prosecutor's duty of fairness in the circumstances that existed prior to the trial. Understood in that way, the second question should be answered in the affirmative: on the information presently before this Court, and in the absence of any change in circumstances, if the prosecutor were to maintain his stance throughout the Crown case of refusing to tender the video record of interview then it is likely that his conduct would be a breach of his duty of fairness and would lead to an unfair trial and a miscarriage of justice. The first referred question: admissibility of the "mixed" record of interview Although the respondent orally queried the admissibility of the video record of interview, the respondent did not file any cross-appeal to challenge the answer given to the first question by the Full Court, that the video record of interview was admissible. It became common ground during oral submissions that the mixed video record of interview was admissible because it contains admissions. The statements of admission in the video record of interview fall within the exception, in s 81(1)78 of the Uniform Evidence Act, to the general inadmissibility of hearsay evidence in Pt 3.279. This exception for admissions is broad. An admission by the accused is any previous representation that is "adverse to the person's interest in the outcome of the proceeding" whether by statement or 78 And outside the proviso in s 82. 79 See Uniform Evidence Act, s 59 "The hearsay rule β exclusion of hearsay evidence". Edelman conduct80. Almost any statement or conduct, no matter how apparently innocuous, is capable of being an admission. It need not be against the maker's interest at the time it was made81. It might not even be apparent prior to trial whether the statement is an admission82. However, a substantial constraint on the matters which can constitute an admission is that the previous representation must be adverse to the interest of an accused "in the outcome of the proceeding". In other words, at the point in time that the admissibility issue is raised, there must be some possibility that the previous representation could have an effect upon the outcome of the proceeding that is adverse to the interest of an accused. The existence, at the time of the admissibility dispute, of admissions in a video record of interview does not, by itself, make the whole video record of interview admissible. As to the remainder of the video record of interview, including self-serving statements, the Uniform Evidence Act generally reflects the previous, although criticised83, common law position that hearsay statements that reveal a consciousness of guilt are generally admissible but hearsay statements that reveal a consciousness of innocence are generally inadmissible. However, one extremely significant departure from this general position is s 81(2), which permits evidence of any hearsay "(a) that was made in relation to an admission at the time the admission was made, or shortly before or after that time; and (b) to which it is reasonably necessary to refer in order to understand the admission". Section 81(2), like the common law that preceded it, has a primary underlying concern for the need for context for admissions84. The context contemplated by s 81(2) is broad. For instance, in its application to video records of interview, it will often be reasonably necessary to see and hear self-serving statements by an accused person 80 Uniform Evidence Act, Dictionary, Pt 1 "Definitions", see "admission" and "previous representation"; see also Northern Territory, Legislative Assembly, Evidence (National Uniform Legislation) Bill 2011, Explanatory Statement at 49. 81 Falcon v Famous Players Film Co [1926] 2 KB 474 at 489; R v Lovett [No 3] [2013] WASC 102 at [36]. See Wigmore, A Treatise on the System of Evidence in Trials at Common Law (1904), vol 2 at 1217 Β§1048. 82 R v Horton (1998) 45 NSWLR 426 at 437-438. 83 Wigmore, A Treatise on the System of Evidence in Trials at Common Law (1904), vol 1 at 384-385 Β§293; Corke v Corke & Cook [1958] P 93 at 109; Jolowicz, "Case and Comment" (1958) 16 Cambridge Law Journal 145 at 146, discussing Corke v Corke & Cook [1958] P 93. 84 Pearce (1979) 69 Cr App R 365 at 369; Duncan (1981) 73 Cr App R 359 at 363. See Australia, Law Reform Commission, Evidence, Report No 26 (Interim) (1985), vol 1 at 424 [755]. Edelman made in the same interview in order to consider why the accused person made admissions in that interview even if they might seem to concern matters unconnected to the self-serving statements. The expression of the self-serving statements might also reveal matters that could shape the precise meaning, purpose and weight of the admission such as the general demeanour of the accused person during the interview or how the accused person responded to the interviewer. For these reasons, it should be extremely rare for any part of the same interview to be treated as falling outside the necessary context for admissions contained elsewhere in that interview. Quite properly, this was not suggested to be the case in this appeal. Although the concern of s 81(2) is context, the use to which the self-serving statements is put is not limited to mere context for the admissions. They are admissible for the truth of their contents. One reason for this is that they might be difficult or impossible to separate from the admissions85. Another is that they might qualify or modify the admissions, which are admitted as evidence of the truth of their contents86. A third is the unintelligibility of a direction to the jury that some previous statements are admissible for the truth of their contents but others are something less although made at about the same time, such as in the same interview. It would be, "to say the least, not helpful to try to explain to the jury that the exculpatory parts of the statement are something less than evidence of the facts they state"87. And, contrary to the approach in England, which countenances a usual direction by the trial judge that "incriminating parts are likely to be true (otherwise why say them?), whereas the excuses do not have the same weight"88, such a general statement has been held in Australia to be an "unwise" direction and an "undesirable" one to the extent that it expounds traditional reasons why admissions against interest are commonly regarded as reliable evidence89. 85 Mule v The Queen (2005) 79 ALJR 1573 at 1577 [15]; 221 ALR 85 at 90; Australia, Law Reform Commission, Evidence, Report No 26 (Interim) (1985), vol 1 at 424 86 See Australia, Law Reform Commission, Evidence, Report No 26 (Interim) (1985), vol 1 at 424 [755], 424 fn 29. 87 Duncan (1981) 73 Cr App R 359 at 365. See also R v Sharp [1988] 1 WLR 7 at 15; [1988] 1 All ER 65 at 71; R v Aziz [1996] AC 41 at 49-50. 88 Duncan (1981) 73 Cr App R 359 at 365. 89 Mule v The Queen (2005) 79 ALJR 1573 at 1579 [23]; 221 ALR 85 at 93, quoting R v Cox [1986] 2 Qd R 55 at 65. See also, in Canada, R v Rojas [2008] 3 SCR 111 Edelman There is another basis relevant to this appeal upon which the entirety of a mixed record of interview might be admissible. Section 190 of the Uniform Evidence Act, enacted against an understanding that the laws of evidence were "often waived by parties in litigation"90, permits the court to dispense with the application of the hearsay provisions in Pt 3.2. The consent of the parties is required, including the advised or informed consent of an accused person. Mr Nguyen, with legal advice, had sought the tender of the video record of interview by the prosecution. For "tactical" reasons the prosecution said that they did not intend to tender the video record of interview, asserting that "there's no unfairness involved in doing things this way ... the accused is able to give evidence if he wants to and, of course, if he does then he'll be subjected to cross- examination". The second referred question: an "obligation" upon the prosecution to tender the mixed record of interview The obstacles of principle to the purported pre-trial legal obligation There is a strong analogy between a so-called obligation prior to trial upon the prosecution to tender a video record of interview and a so-called obligation prior to trial upon the prosecution to call a witness. Indeed, the existence of a legal obligation upon the prosecution, prior to trial, to tender a video record of interview might involve an obligation to call a person, such as a police officer who conducted the interview, who could tender the video record of interview. The ethical practices for prosecutors generally to undertake, where requested prior to trial, to tender a video record of interview or to call relevant witnesses are aspects of the prosecutor's duty of fairness. There are three reasons that point strongly against elevating them to the status of free-standing obligations. First, any attempt to carve an independent obligation in advance of trial to tender a video record of interview from the general duty of fairness existing in all of the circumstances of the trial would require numerous exceptions and qualifications which would prevent the obligation from being stated in anything other than vague, contingent terms. For instance, an obligation upon the prosecution to call a witness or to tender a video record of interview could not exist if, in the circumstances of the trial that unfolded, the evidence was immaterial. If a hundred people saw an accused person at the scene of the crime, whose image was also captured on CCTV, then the prosecution could not be obliged to call all of the hundred people to give evidence. And in such a case, at least if the accused did not request its tender, the prosecution could not be obliged to tender a video 90 Australia, Law Reform Commission, Reform of Evidence Law, Discussion Paper No 16 (1980) at 10 [21]. Edelman record of interview in which the accused said no more than to acknowledge their presence at the scene of the crime. Another exception to any purported prosecutorial legal obligation in advance of trial to tender a video record of interview would be where evidence called by the prosecution during trial made it manifest that, by reference to clear and objectively identifiable circumstances, the accused's answers in the interview as a whole were plainly false or fanciful or were plainly unreliable91. A further exception to such a pre-trial obligation, which could potentially undermine it entirely, would be that such a pre-trial obligation would necessarily be subject to the prosecutor's overriding duty to conduct the trial fairly. A prosecutor could not be obliged to tender a video record of interview if it were apparent at the time of tender, either from previous circumstances or from events that arose during trial, that the tender would cause legal unfairness to the conduct of the defence. In such circumstances, the prosecutor would not merely be permitted to accede to the request of an accused person not to tender the video record of interview; the prosecutor would be obliged to do so. Thus, the relevant prosecutorial duty is not concerned with the prosecutor's decision to tender the video record of interview but, instead, with the overall fairness in the conduct of the trial. Secondly, a curious, even bizarre, attribute of a so-called pre-trial prosecutorial legal obligation to call a witness or to tender a video record of interview is that it would be one that a trial judge would be incapable of enforcing. Trial judges have powers to enforce the prosecutor's duty to act fairly in order to ensure a fair trial without descending into the adversarial arena. Their powers include a range of directions and orders including, in the most extreme cases of unfairness, the grant of a permanent stay of proceedings where other measures cannot be taken to ameliorate a substantial unfairness in the trial92. In contrast, a trial judge has no power to enforce any perceived pre-trial "obligation" to tender a video record of interview. As this Court said in R v Apostilides93, the trial judge "cannot direct the prosecutor to call a particular witness". Nor could a trial judge 91 R v Apostilides (1984) 154 CLR 563 at 576. Compare R v Brown [1998] AC 367 at 377; Mallard v The Queen (2005) 224 CLR 125 at 153 [73]-[74]. 92 Strickland (a pseudonym) v Director of Public Prosecutions (Cth) (2018) 93 ALJR 1 at 23 [99]-[100], 40 [197]-[198], 50-53 [264]-[272]; 361 ALR 23 at 49, 71-72, 86- 88; Director of Public Prosecutions (Cth) v Kinghorn [2020] NSWCCA 48 at [139]. (1984) 154 CLR 563 at 575. Edelman direct a prosecutor to ensure that evidence is tendered. In Apostilides94, this Court also referred to discussion of Brinsden J in Skubevski v The Queen95, including his Honour's quotation from Barwick CJ in Ratten v The Queen96: "[A criminal trial] is a trial, not an inquisition: a trial in which the protagonists are the Crown on the one hand and the accused on the other. Each is free to decide the ground on which it or he will contest the issue, the evidence which it or he will call, and what questions whether in chief or in cross-examination shall be asked; always, of course, subject to the rules of evidence, fairness and admissibility. The judge is to take no part in that contest, having his own role to perform in ensuring the propriety and fairness of the trial and in instructing the jury in the relevant law." Thirdly, even on an appeal which raised issues concerning the failure by the prosecution to call a witness, the question would not be whether the prosecutor was obliged to call the witness. The question would be whether a decision by a prosecutor not to call a particular person as a witness constituted a ground for setting aside the conviction because it gave rise to a miscarriage of justice "when viewed against the conduct of the trial taken as a whole"97. That question is plainly not to be assessed from a perspective before the trial took place. The obstacles of authority to the purported pre-trial legal obligation In Skubevski v The Queen98, Mr Skubevski was charged with wilful murder arising from a brawl between a group of Aboriginal men and a group of Macedonian men. The Crown called all of the Aboriginal men but none of the Macedonian men. After the prosecutor refused to comply with a direction by the trial judge to call the Macedonian men, the trial judge discharged the jury, adjourned the trial, and referred questions for consideration by the Court of Criminal Appeal of the Supreme Court of Western Australia. The Court of Criminal Appeal accepted the Crown submission, not made on the present appeal, that the reference of most of the questions was incompetent because for all 94 R v Apostilides (1984) 154 CLR 563 at 570. [1977] WAR 129 at 138-140. (1974) 131 CLR 510 at 517, quoted in Skubevski v The Queen [1977] WAR 129 at 139. See also R v Apostilides (1984) 154 CLR 563 at 575. 97 R v Apostilides (1984) 154 CLR 563 at 575. See also Director of Public Prosecutions (Cth) v Kinghorn [2020] NSWCCA 48 at [139]. [1977] WAR 129. Edelman practical purposes the trial was at an end99. Nevertheless, the Court expressed an opinion on the questions. After explaining that the prosecutor was legally entitled not to call the Macedonian men as witnesses, the Court of Criminal Appeal explained, in answer to one of the questions (Question 4), that it had no power to "express an opinion upon whether in the circumstances the discretion ought to have been exercised in the manner in which it was"100. Burt CJ, with whom Smith J agreed, said this101: "For the purposes of Question (4) it is, I think, important to appreciate that we are not being called upon to say whether there has been a miscarriage of justice, that being a question which cannot arise at this point of time. As the question now arises before us it should be answered 'No'. A decision of Crown counsel to call or not to call a witness cannot be reviewed or challenged within the trial in which that decision is made. It is no doubt possible that such a decision could give rise to a miscarriage of justice. As such it would be examinable on appeal. But that is a different matter." The point being made by Burt CJ is that there is a difference between, on the one hand, asking an appellate court directly to review a decision of a Crown prosecutor about whether to call a witness when the prosecutor has no legal duty to do so and, on the other hand, asking an appellate court to make an assessment of the fairness of a trial, such as that made in the context of an appeal from conviction. The distinction may be a fine one but it is one that this Court also made in its decision in Richardson v The Queen102 nearly half a century ago, in terms that have been approved or followed on many occasions103. This Court acknowledged that a failure by the prosecutor to call a particular witness might 99 Skubevski v The Queen [1977] WAR 129 at 133, 140. 100 Skubevski v The Queen [1977] WAR 129 at 131, 133. 101 Skubevski v The Queen [1977] WAR 129 at 133. 102 (1974) 131 CLR 116. 103 Whitehorn v The Queen (1983) 152 CLR 657 at 674; R v Apostilides (1984) 154 CLR 563 at 577-578; Velevski v The Queen (2002) 76 ALJR 402 at 421 [117]; 187 ALR 233 at 259-260; Adler v Australian Securities and Investments Commission (2003) 179 FLR 1 at 150 [677]; R v Nikolaidis [2003] VSCA 191 at [54]-[55]; Roberts v Western Australia [2010] WASCA 223 at [36]; Diehm v Director of Public Prosecutions (Nauru) (2013) 88 ALJR 34 at 47 [65]; 303 ALR 42 at 58-59; Lane v The Queen (2013) 241 A Crim R 321 at 358 [164]; R v M, RS (2018) 131 SASR 24 at 41 [47]. Edelman give rise to a miscarriage of justice "when viewed against the conduct of the trial taken as a whole"104 but concluded that the prosecutor does not owe a specific "duty" to call any witness105: "It is, therefore, a misconception to speak of the prosecutor as owing a duty to the accused to call all witnesses who will testify as to the events giving rise to the offence charged. The misconception has arisen, we venture to think, from treating some observations in the decided cases, which have been made with the intention of offering guidance to prosecutors in how they are to approach their task, as the prescription of an inflexible duty to call all material witnesses, subject to certain exceptions or to special circumstances." A prosecutor is under a continuing duty to act fairly For the reasons explained, any "requirement" for a prosecutor to call witnesses or to tender evidence "is not a duty owed by the prosecutor to the accused which is imposed by some rule of law; rather it forms part of a description of the functions of a Crown Prosecutor"106. Those functions can often be performed in different ways but the underlying principle which governs their performance is that the prosecutor is under a continuing duty to conduct the trial fairly. In Attorney- General (NT) v Emmerson107, six members of this Court described the "traditional considerations" of fairness as standards that arise from "rules of practice; established by judges over the years ... calculated to enhance the administration of justice by ensuring that an accused has a fair trial". The requirements of the duty of fairness are neither rigid nor static. They vary according to the circumstances of the particular accused person and the changing circumstances of the case, and over time can even change with changing social values108. However, it is now well established that the prosecutor's duty of 104 Richardson v The Queen (1974) 131 CLR 116 at 121-122. 105 Richardson v The Queen (1974) 131 CLR 116 at 120. 106 Whitehorn v The Queen (1983) 152 CLR 657 at 674. 107 (2014) 253 CLR 393 at 432 [63], citing Whitehorn v The Queen (1983) 152 CLR 657 at 664 and Cannon v Tahche (2002) 5 VR 317 at 339 [56]. 108 Dietrich v The Queen (1992) 177 CLR 292 at 364. Edelman fairness requires that decisions about whether to call a witness "be made with due sensitivity to the dictates of fairness towards an accused person"109. The only sensible meaning of the second referred question In light of the insurmountable obstacles of principle to the recognition of a legal obligation existing before trial to tender a video record of interview, and in light of nearly half a century of consistent authority, the only sensible way to understand the question whether, prior to trial, the Crown could be said to be "obliged to tender the recorded interview" at trial is to see it as instead inviting the enunciation of a "prima facie rule of practice"110, a general guide to the ethical practice which informs the prosecutor's duty of fairness, the departure from which in the trial could be productive of a miscarriage of justice. Mr Nguyen's submissions on appeal should be understood as submissions that, subject to events that might emerge at trial, the pre-trial prima facie content of the prosecutor's duty of fairness included an undertaking, where requested, to tender the video record of interview. The breach of the prosecutor's duty of fairness A prima facie rule of practice that admissible video records of interview be tendered As I have explained, the video record of interview was admissible evidence which could be tendered by the prosecution on two different bases. One basis was that it contained admissions (s 81 of the Uniform Evidence Act). And since Mr Nguyen sought the tender of the interview with informed consent, the other basis was by consent of the parties (s 190 of the Uniform Evidence Act). Either basis required the prosecutor's decision to be made fairly, in light of general rules of ethical practice. Once the decision to tender the interview was taken, the entire interview (as edited by consent of the parties to remove anything inadmissible to which objection is taken) would have been required to be tendered: the prosecution would be "bound to take the good with the bad and put it all before the jury"111. The starting point for the prosecutor's preliminary view about whether to tender the video record of interview, subject always to any issues that might later emerge during trial, should have been that "the prosecutor's obligation to put the 109 R v Apostilides (1984) 154 CLR 563 at 576. 110 McKinney v The Queen (1991) 171 CLR 468 at 478. 111 R v Soma (2003) 212 CLR 299 at 309 [31]. Edelman case fairly would, on its face, require the prosecutor to put the interview in evidence unless there were some positive reason for not doing so"112. In Mahmood v Western Australia113, this prima facie requirement for fairness was expressed by Hayne J as an ordinary requirement. His Honour said of admissible mixed statements that "fair presentation of the prosecution case will ordinarily require that the prosecution lead all that evidence". Those words were carefully chosen. They did not assert a legal obligation to call evidence. Instead they directed attention to the unfairness that might result from a failure to do so. Contrary to the reasoning of McLure P in Ritchie v Western Australia114, the reasoning of Hayne J was not obiter dicta, nor was it inconsistent with the joint reasons of the other members of this Court in Mahmood, who did not address this issue. Nor was his Honour's reasoning confined to cases where there are several out-of-court statements115. The reasons that underpin this prima facie ethical rule of practice that informs the prosecutor's duty of fairness are several. First, the video record of interview is usually an early response, sometimes the first opportunity, of an accused person confronted by the allegations116. The fading and plasticity of memory and the cognitive processing of the allegations between interview and trial can make recollection and response at trial less accurate and more generalised than recollections and responses closer to the events and in the absence of adversarial dispute117. Secondly, the tender of a video record of interview avoids, more conclusively than any direction, any adverse speculation by the jury about whether an accused gave any account of their actions when confronted by the police118. 112 R v Soma (2003) 212 CLR 299 at 310 [31] (emphasis in original). 113 (2008) 232 CLR 397 at 409 [41]. 114 (2016) 260 A Crim R 367 at 376 [44]. 115 Compare Barry v Police (SA) (2009) 197 A Crim R 445 at 460 [58]. 116 Storey (1968) 52 Cr App R 334 at 337-338; Pearce (1979) 69 Cr App R 365 at 369; Newsome (1980) 71 Cr App R 325 at 329; R v Su [1997] 1 VR 1 at 64; R v Pidoto [2002] VSCA 60 at [49]-[50]; R v H, ML [2006] SASC 240 at [27]. Compare R v Helps (2016) 126 SASR 486 at 493 [25]. 117 See also Fennell v The Queen (2019) 93 ALJR 1219 at 1233 [81]; 373 ALR 433 at 452. See further Lacy and Stark, "The neuroscience of memory: implications for the courtroom" (2013) 14 Nature Reviews Neuroscience 649 at 651, 653, 656. 118 R v Astill (unreported, New South Wales Court of Criminal Appeal, 17 July 1992) at 8-9; Familic (1994) 75 A Crim R 229 at 234. Edelman Thirdly, and in the almost invariable circumstance that the interview contains some admissions, the prima facie requirement to tender a video record of interview in conformity with the duty of fairness avoids the risk that the prosecutor might present a less than complete picture of the Crown case based upon an inaccurate prediction of the likely materiality of admissions in the defence case. Breach of the prima facie requirements of the duty of fairness In this case, as the North Australian Aboriginal Justice Agency submitted in its intervention, the prima facie requirement of the duty of fairness was further enhanced by Mr Nguyen's linguistic and cultural disadvantages and his expectation at the time of giving the interview that it would be tendered in court. The video record of interview of Mr Nguyen was undertaken after the police had given Mr Nguyen a caution, following the general approach described in the Anunga rules119, in an attempt to ensure fairness in the interview of Mr Nguyen as a vulnerable or disadvantaged person. After Mr Nguyen, who was assisted by an interpreter, was asked to explain the caution in his own words he said: "Whatever you ask and whatever I answer will be taken as evidence in the court." When counsel appearing for the Director of Public Prosecutions was questioned by the trial judge about the reasons why the video record of interview would not be tendered, his explanation was that it was a "tactical decision". It was a decision taken not to adduce evidence of admissions which would otherwise be part of the prosecution case in order to require the accused man, with cultural and linguistic disadvantages that are plainly evident from the interview, to expose himself to cross-examination in order to put his account of events before the jury120. This reasoning process was not consistent with the prosecutor's duty of fairness. In the absence of any compelling reason for the prosecution not to tender the record of interview, the maintenance of that refusal at trial is extremely likely to have been productive of an unfair trial with the consequence that any conviction would have involved a miscarriage of justice. In this Court, senior counsel for the respondent relied upon an alternative purported reason for the refusal by the prosecution to tender the video record of interview. This reason was that the interview contained no material admissions in the sense that any admissions possessed such a low degree of relevance that they could not be admissible. The submission that the interview contained no material admissions could not be maintained in the absence of a cross-appeal on the answer to the first question given by the Full Court. If a cross-appeal had been brought 119 R v Anunga (1976) 11 ALR 412. 120 As to the difficulties presented by such an approach, see Eades, "The social consequences of language ideologies in courtroom cross-examination" (2012) 41 Language in Society 471 at 474-479. Edelman and if it had been concluded that there were no material admissions there would then have been a need to consider other relevant aspects of the video record of interview when considering the duty of fairness in relation to s 190 of the Uniform Evidence Act. The submission that the interview contained no material admissions was not ultimately pressed on this appeal. It suffices therefore to make only two general observations about the submission concerning "immateriality" β that is, an extremely low degree of relevance. First, in circumstances where Mr Nguyen was alleged to have caused serious harm to one man by throwing a beer bottle at him or hitting him on the head with the bottle, as well as throwing another bottle at another man, the admissions by Mr Nguyen that he threw bottles at those men were plainly more than minimally relevant. In Dyers v The Queen121, speaking of a usual requirement of the duty of fairness that the prosecution call all material witnesses, Callinan J said that a "broad practical view of materiality should be taken". This is particularly so because the precise contours of the issues at trial are not always clear at the time prosecution witnesses are called. His Honour said that admissible evidence is material if it could "reasonably influence a jury on the question of the guilt or otherwise of an accused". It will be rare for an admission in a video record of interview to fall outside that description of materiality. Secondly, even in the rare instance where, prior to trial, a prosecutor correctly considers that an admission might be immaterial to the issues that, objectively, are likely to unfold during the trial, this does not necessarily mean that it will be fair for the prosecutor to refuse an informed request to tender the record of interview. The reasons for the prima facie requirement of the duty of fairness, discussed above, will not necessarily be overcome merely because the admissions are, in the events existing prior to trial, objectively likely to be immaterial. Conclusion The appeal should be allowed and orders made as proposed in the joint judgment, with the second question to be understood as expressed in these reasons. 121 (2002) 210 CLR 285 at 326 [118]. |
HIGH COURT OF AUSTRALIA GUMMOW ACJ MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS APPELLANT AND QAAH OF 2004 & ANOR RESPONDENTS Minister for Immigration and Multicultural and Indigenous Affairs v QAAH of 2004 [2006] HCA 53 15 November 2006 ORDER Appeal allowed. Set aside Orders 1 and 2 (except par 3 of Order 2), of the orders made by the Full Court of the Federal Court of Australia on 27 July 2005 and in their place order that the appeal to that Court be dismissed. Appellant to pay the costs of the first respondent of the application for special leave to appeal and the appeal. On appeal from the Federal Court of Australia Representation S J Gageler SC and S B Lloyd for the appellant (instructed by Clayton Utz Lawyers) B W Walker SC with M O Plunkett for the respondent (instructed by Terry Fisher & Co) Submitting appearance for the second respondent S P Estcourt QC with J A Gibson appearing on behalf of the United Nations High Commissioner for Refugees as amicus curiae (instructed by Mallesons Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Minister for Immigration and Multicultural and Indigenous Affairs v QAAH of 2004 Immigration β Refugees β Application for permanent protection visa β Statute requiring Minister to be satisfied Australia owes protection obligations to the applicant under the Convention β Applicant previously granted temporary protection visa for a specified period β Whether previous grant of temporary protection visa entitles applicant on application for a new visa to a presumption of being owed protection obligations under the Convention β Construction of Migration Act 1958 (Cth), s 36 β Construction of the Convention. Words and phrases β "refugee", "protection obligations", "cessation". Migration Act 1958 (Cth), ss 5(1), 36. Convention relating to the Status of Refugees, Art 1A, Art 1C(5). Protocol relating to the Status of Refugees. GUMMOW ACJ, CALLINAN, HEYDON AND CRENNAN JJ. The principal question in this appeal is whether an entrant to Australia, who has been granted a temporary protection visa, is, on its expiry, and notwithstanding benign changes in the conditions of the country from which he fled, entitled under Australian law to assert that he continues to be a person to whom Australia owes protection obligations. Other questions, as to the proper construction of the Convention relating to the Status of Refugees1, taken with the Protocol relating to the Status of Refugees2 (together, "the Convention"), as they have been received into Australian law in the Migration Act 1958 (Cth) ("the Act"), and the nature and onus of proof in proceedings concerning refugees, arise for consideration. An application for special leave to appeal in NBGM v Minister for Immigration and Multicultural Affairs3, which raised similar questions, was argued at the same time as this one. The Act is to be read against the consistent refusal of nation states to accept, apart from any limitations imposed by treaties to which they are parties, any abridgment of their authority to determine for themselves whether or not a right of entry and of permanent settlement should be afforded to any individual or group of individuals. Statements in this Court to that effect have been adopted by the House of Lords in R (European Roma Rights) v Prague Immigration Officer4 and Januzi v Secretary of State for the Home Department5. Facts and proceedings The first respondent is a citizen of Afghanistan. He is of Hazara ethnicity, and is a Shi'a Muslim. He arrived in Australia on 27 September 1999. On 28 March 2000 he was granted, by a delegate of the appellant, a temporary protection visa to expire after three years. He applied on 17 April 2000 for a 1 Done at Geneva on 28 July 1951. 2 Done at New York on 31 January 1967. [2006] HCA 54. [2005] 2 AC 1 at 27-28 [14]-[15], 31-32 [19] per Lord Bingham of Cornhill with whom Lord Hope of Craighead (at 47 [48]), Baroness Hale of Richmond (at 55 [72]) and Lord Carswell (at 66 [108]) agreed. [2006] 2 WLR 397 at 402 [4] per Lord Bingham of Cornhill with whom Lord Nicholls of Birkenhead (at 413 [23]), Lord Carswell (at 424 [61]) and Lord Mance (at 427 [70]) agreed; [2006] 3 All ER 305 at 311, 322, 332, 335. Gummow ACJ Callinan Crennan permanent protection visa. On 27 March 2003, another temporary protection visa was issued to him pending a decision upon his entitlement to a permanent visa. That decision was given some months later and was adverse to the first respondent. Under s 36(2)(a) of the Act, a criterion for the issue of a protection visa is that the applicant is a non-citizen, present in Australia, and a person to whom, the Minister the Convention6. is satisfied, Australia owes protection obligations under Following the decision of the appellant's delegate, denying the first respondent a permanent protection visa, the first respondent applied to the Refugee Review Tribunal ("the Tribunal") for review. The Tribunal affirmed the decision of the appellant's delegate. In doing so, the Tribunal posed for itself two questions, to the first of which, as will appear, there was a dispute whether an answer was required in the circumstances. It was whether the cessation provision (Art 1C(5)) of the Convention applied. The second question was said to be whether there was new evidence, to suggest that the first respondent was currently a "refugee" for the purposes of the Act. The Tribunal answered the first question by holding that the cessation provision did apply: the first respondent could no longer continue to refuse to avail himself of the protection of Afghanistan. The Tribunal accepted that the extremist group, the Taliban, if it were still in power, would have persecuted the first respondent because of his Hazara ethnicity, and because he is a Shi'a Muslim. But, the Tribunal observed, the Taliban had been effectively dislodged from power by late 2001: even though remnants of the Taliban remained active in some parts of the country, it had ceased to be a coherent political movement. Further, the Tribunal did not accept that there was a real chance of the re- emergence of the Taliban as an effective authority in the reasonably foreseeable future: there was no satisfactory evidence to support the first respondent's assertion that in a neighbouring province the Taliban maintained a real power base. The first respondent had also claimed to fear harm from a number of other sources, all because of his ethnicity and religion. As to this claim, the Tribunal found that he did not have a real chance of being persecuted by any of the people or groups whom he identified. The Tribunal accordingly concluded that the first respondent did not have any well-founded fear of persecution. 6 As per s 5(1) of the Act. Gummow ACJ Callinan Crennan The first respondent unsuccessfully applied to the Federal Court of Australia (Dowsett J) for judicial review of the Tribunal's decision7. Dowsett J was of the opinion that the Tribunal did not need to consider both of the questions. He said8: "In my view, it follows that the question for the Tribunal in the present case was whether or not, at the time of the decision, the [first respondent] had a well-founded fear of persecution for a Convention reason. It was not strictly relevant that he had previously applied for and received temporary ... visas. In other words it was not necessary to decide whether or not the cessation clause had been engaged as a result of changed circumstances in Afghanistan. The [first respondent's] argument to the contrary is that identified by Dawson J in Chan at 398[9], which argument was, in my view, rejected by the High Court." His Honour went on to say10: "In my view, the [first respondent's] entitlement to a permanent visa depended upon the circumstances as they were at the time of the Tribunal's decision, meaning that it was necessary that he then hold a well-founded fear of persecution for a Convention reason. His argument to the contrary is without merit. If I am wrong in my understanding of the decision in Chan, nonetheless, the [first respondent's] argument would still fail. The cessation clause will be engaged if 'the circumstances in connexion with which [the first respondent] has been recognized as a refugee have ceased to exist'. It cannot be sensibly argued that Australia has ever recognized the applicant as a refugee other than in conne[x]ion with circumstances as they existed in March 2000. As I understand it, the applicant accepts that those circumstances have ceased to exist. No recognizable legal basis has been advanced on behalf of the applicant to support the assertion that the grant of the temporary (XC) visa in 2003 raises a conclusive presumption that he was entitled to a visa on the basis 7 QAAH of 2004 v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 1448. [2004] FCA 1448 at [23]. 9 Chan v Minister for Immigration and Ethnic Affairs (1989) 169 CLR 379 at 398. 10 [2004] FCA 1448 at [25]. Gummow ACJ Callinan Crennan of circumstances which then existed. Those circumstances were never identified or relied upon by the applicant and never considered by the Minister. The [first respondent's] argument is without merit." The first respondent appealed to the Full Court of the Federal Court, which, by majority, allowed the appeal (Wilcox and Madgwick JJ, Lander J dissenting)11. Wilcox J (with whom Madgwick J agreed) took the view that the appellant bore an onus of proving that the first respondent was no longer a "refugee" for the purposes of the Act12. Wilcox J said that there was a real and significant difference between an obligation that might be imposed upon a refugee to prove that he remained a refugee, and an obligation upon the Executive to establish the contrary under the cessation provision13. The majority held that in order to attract the operation of the cessation provision, the appellant had to advance positive evidence circumstances which were substantial, effective and durable, or profound and durable, and incompatible with a real chance of future Taliban persecution of the first respondent14. in Afghanistan changes there had occurred that The majority of the Full Court concluded that the Tribunal had made jurisdictional errors, first, in failing to investigate, and make findings about the extent of Taliban activity in Afghanistan, in particular in the area of the first respondent's home, as well as any likely increases in that activity15; secondly, in failing to consider the stability of the Afghan government16; thirdly, in failing to express its findings in the context of the applicability or otherwise of the cessation clause17; and, fourthly, in determining the first respondent's claims in 11 QAAH v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 145 FCR 363. 12 (2005) 145 FCR 363 at 381 [58] and 383 [69]. 13 (2005) 145 FCR 363 at 381 [58] and 383 [69]. 14 (2005) 145 FCR 363 at 384 [71], 385 [78] and 392 [110]. 15 (2005) 145 FCR 363 at 384 [74]. 16 (2005) 145 FCR 363 at 385 [77]. 17 (2005) 145 FCR 363 at 385 [78]. Gummow ACJ Callinan Crennan the absence of information about continuing problems. It was for the appellant to produce positive material demonstrating that a settled and durable state of affairs existed in the first respondent's former district, material, moreover, that was incompatible with a real chance of future Taliban persecution18. The emphasis placed upon the "home district" of an applicant, is, it should be pointed out, misconceived, because it tends to treat circumstances there as conclusive, and may foreclose consideration of the possibility of safe relocation. Nothing further need be said about this however, because the appellant has chosen to rely upon other errors on the part of the majority to contend, correctly, that this appeal should be upheld. It is unnecessary to examine the dissenting judgment of Lander J because, in substance, he agreed with the primary judge, and in any event, much of their Honours' reasoning is adopted in the arguments of this appellant. The appeal to this Court The appellant made the following four submissions as to the proper construction of the Act and the Convention: putting aside the position of refugees falling within Art 1A(1) of the Convention, there is a precise symmetry between the tests imposed by Arts 1A(2) and 1C(5), which form part of the one definitional provision; the test for both is whether the protection visa applicant has a well- founded fear of being persecuted for a Convention reason and is unable or, owing to such fear, is unwilling to avail himself or herself of the protection of his country; neither Art 1C(5) nor any other part of the definition of refugee in Art 1 of the Convention needs to be invoked in order to have application to a person; rather it operates automatically according to its terms and is relevant whenever the question arises of whether a person is a refugee; neither the Convention nor the Migration Act imposes a burden of proof on the Tribunal in undertaking a review of a decision not to grant a protection visa." 18 (2005) 145 FCR 363 at 385 [78]. Gummow ACJ Callinan Crennan Before considering these submissions it will be necessary to refer to and comment on the relevant provisions of the Act and the Regulations made under it, and the Convention. At the outset however it should be pointed out that there are many provisions in the Act and the Regulations which distinguish between a visa valid for a period and a permanent visa. Section 29 of the Act empowers the Minister, among other things, to grant a non-citizen a visa to "remain in Australia". Section 30 is a section which contemplates the issue of visas for different periods: "Kinds of visas (1) A visa to remain in Australia (whether also a visa to travel to and enter Australia) may be a visa, to be known as a permanent visa, to remain indefinitely. (2) A visa to remain in Australia (whether also a visa to travel to and enter Australia) may be a visa, to be known as a temporary visa, to remain: during a specified period; or until a specified event happens; or (c) while the holder has a specified status." Section 31 is concerned with classes of visas. Subsequent sections, 32, 33, 34, 35, 36, 37, 37A, 38 and 38A, make provision for the specific classes, namely, temporary special category visas, in respect of New Zealanders and certain others, special purpose visas, "absorbed person" visas, former citizens' visas, visas for persons owed protection, bridging visas, temporary safe haven visas, criminal justice visas and enforcement visas. Section 36, which governs protection visas, and which adopts the definition of a refugee in the Convention, should be set out in full: "Protection visas There is a class of visas to be known as protection visas. Note: See also Subdivision AL. (2) A criterion for a protection visa is that the applicant for the visa is: Gummow ACJ Callinan Crennan a non-citizen in Australia to whom the Minister is satisfied Australia has protection obligations under the Refugees Convention as amended by the Refugees Protocol; or a non-citizen in Australia who is the spouse or a dependant of a non-citizen who: is mentioned in paragraph (a); and holds a protection visa. Protection obligations (3) Australia is taken not to have protection obligations to a non-citizen who has not taken all possible steps to avail himself or herself of a right to enter and reside in, whether temporarily or permanently and however that right arose or is expressed, any country apart from Australia, including countries of which the non-citizen is a national. (4) However, if the non-citizen has a well-founded fear of being persecuted in a country for reasons of race, religion, nationality, membership of a particular social group or political opinion, subsection (3) does not apply in relation to that country. (5) Also, if the non-citizen has a well-founded fear that: a country will return the non-citizen to another country; and the non-citizen will be persecuted in that other country for reasons of race, religion, nationality, membership of a particular social group or political opinion; subsection (3) does not apply in relation to the first-mentioned country. Determining nationality For the purposes of subsection (3), the question of whether a non- citizen is a national of a particular country must be determined solely by reference to the law of that country. Subsection (6) does not, by implication, affect the interpretation of any other provision of this Act." Gummow ACJ Callinan Crennan Section 41 makes provision for regulations to subject visas of the classes specified to conditions, for example, with respect to employment. A visa may only be issued on application for it by a non-citizen, and on payment of a charge (ss 45 and 45A). Section 65 is as follows: "Decision to grant or refuse to grant visa (1) After considering a valid application for a visa, the Minister: if satisfied that: (iii) the health criteria for it (if any) have been satisfied; and the other criteria for it prescribed by this Act or the regulations have been satisfied; and the grant of the visa is not prevented by section 40 (circumstances when granted), 500A (refusal or cancellation of temporary safe haven visas), 501 (special power to refuse or cancel) or any other provision of this Act or of any other law of the Commonwealth; and any amount of visa application charge payable in relation to the application has been paid; is to grant the visa; or if not so satisfied, is to refuse to grant the visa. Note: See also section 195A, under which the Minister has a non-compellable power to grant a visa to a person in detention under section 189 (whether or not the person has applied for this Subdivision, Subdivision AF and the regulations do not apply to the Minister's power under that section. Subdivision AA, the visa). To avoid doubt, an application put aside under section 94 is not taken for the purposes of subsection (1) to have been considered until it has been removed from the pool under subsection 95(3)." The Act, by s 68(3), further makes it clear that visas can have temporal limitations: "A visa can only be in effect during the visa period for the visa." Gummow ACJ Callinan Crennan Section 77 is to a similar effect, as is s 82(7). Section 77 provides: "Visas held during visa period To avoid doubt, for the purposes of this Act, a non-citizen holds a visa at all times during the visa period for the visa." And s 82(7) is as follows: "A visa to remain in Australia (whether also a visa to travel to and enter Australia) during a particular period or until a particular date ceases to be in effect at the end of that period or on that date." It is unnecessary to set them out, but we would also draw attention to ss 91R, 91S, 91T, 91U and 91V, which effectively define "persecution" for the purpose of the Act and, it follows, the application of the Convention in Australia. These sections, it may be noted, speak of persecution in the present tense. Visas are subject to cancellation under, among other sections, s 116(1)(a), which looks to the contemporaneity of the threat or otherwise: "Power to cancel Subject to subsections (2) and (3), the Minister may cancel a visa if he or she is satisfied that: any circumstances which permitted the grant of the visa no longer exist ... ." Section 129 requires the Minister to give notice of cancellation of a visa inviting its holder to show reason why the cancellation should not have occurred and seeking its revocation. There are other sections which make provision for the cancellation of various classes of visa but they need no further reference here. Regulation 2.01 of the Migration Regulations (Cth) ("the Regulations") describes classes of visas in terms of their duration: "Classes of visas (Act, s 31) For the purposes of section 31 of the Act, the prescribed classes of visas are: such classes (other than those created by the Act) as are set out in the respective items in Schedule 1; and Gummow ACJ Callinan Crennan the following classes: transitional (permanent); and transitional (temporary). Note For the classes created by the Act, see ss 32 to 38." It is also the fact that Sched 2 to the Regulations, which specifies criteria for every visa, repeatedly states that certain criteria must be satisfied at the "time of application"19 or at the "time of decision"20. It is convenient now to set out some provisions of the Convention. Article 1A(2) relevantly defines "refugee" as a person who: "owing to well-founded fear of being persecuted for reasons of race, religion, nationality, membership of a particular social group or political opinion, is outside the country of his nationality and is unable or, owing to such fear, is unwilling to avail himself of the protection of that country; or who, not having a nationality and being outside the country of his former habitual residence as a result of such events, is unable or, owing to such fear, is unwilling to return to it." Because s 36 of the Act refers to protection obligations under the Convention it is legitimate, in deciding whether those obligations arise, to look to such other provisions of the Convention as bear upon that question. Article 1C is as follows: "This Convention shall cease to apply to any person falling under the terms of section A if: (1) He has voluntarily re-availed himself of the protection of the country of his nationality; or (2) Having lost his nationality, he has voluntarily reacquired it; or 19 See regs 010.21, 020.21, 030.21, and following. 20 See regs 010.22, 020.22, 030.22, and following. Gummow ACJ Callinan Crennan (3) He has acquired a new nationality, and enjoys the protection of the country of his new nationality; or (4) He has voluntarily re-established himself in the country which he left or outside which he remained owing to fear of persecution; or (5) He can no longer, because the circumstances in connexion with which he has been recognized as a refugee have ceased to exist, continue to refuse to avail himself of the protection of the country of his nationality; Provided that this paragraph shall not apply to a refugee falling under section A(1) of this article who is able to invoke compelling reasons arising out of previous persecution for refusing to avail himself of the protection of the country of nationality; Being a person who has no nationality he is, because the circumstances in connexion with which he has been recognized as a refugee have ceased to exist, able to return to the country of his former habitual residence; Provided that this paragraph shall not apply to a refugee falling under section A(1) of this article who is able to invoke compelling reasons arising out of previous persecution for refusing to return to the country of his former habitual residence." Articles 32 and 33 may also need to be considered: "Article 32. Expulsion The Contracting States shall not expel a refugee lawfully in their territory save on grounds of national security or public order. The expulsion of such a refugee shall be only in pursuance of a decision reached in accordance with due process of law. Except where compelling reasons of national security otherwise require, the refugee shall be allowed to submit evidence to clear himself, and to appeal to and be represented for the purpose before competent authority or a person or persons specially designated by the competent authority. The Contracting States shall allow such a refugee a reasonable period within which to seek legal admission into another country. Gummow ACJ Callinan Crennan The Contracting States reserve the right to apply during that period such internal measures as they may deem necessary. Article 33. Prohibition of expulsion or return ('refoulement') No Contracting State shall expel or return ('refouler') a refugee in any manner whatsoever to the frontiers of territories where his life or freedom would be threatened on account of his race, religion, nationality, membership of a particular social group or political opinion. The benefit of the present provision may not, however, be claimed by a refugee whom there are reasonable grounds for regarding as a danger to the security of the country in which he is, or who, having been convicted by a final judgment of a particularly serious crime, constitutes a danger to the community of that country." Despite the emphasis that the Act and the Regulations to which we have referred place upon the periodicity of all, or almost all, visas, unless and until a permanent visa21 is granted, the first respondent submits that if an applicant has once been accepted as having held, at any time in the past, a relevant fear of persecution, Australia must either accept that he is a refugee for all times and all purposes, including an application for a permanent visa, or must effectively assume a burden of showing that the basis for the well-founded fear no longer exists. We summarize the submission in this way because that in substance was the way it was put in written submissions, although during argument the first 21 Under cl 866.511 of Sched 2 of the Regulations, a person holding a "permanent visa" is permitted "to travel to and enter Australia for a period of 5 years from the date of grant". That regulation may be of questionable validity under s 30(1) and (2)(a) of the Act, the former of which provides that a permanent visa is a visa "to remain indefinitely", and the latter of which provides that a temporary visa is one allowing the visa-holder to remain "during a specified period". Mansfield J noted the inconsistency in NBGM v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 150 FCR 522 at 531 [30] (see also at 540 [66] per Stone J). The validity of reg 866.511 was not, however, called into question in this Court. No matter what the duration of a "permanent visa" is, it appears to confer the important advantage upon a holder of it of being able, under s 5A(1)(bb) and s 13 of the Australian Citizenship Act 1948 (Cth), to apply for Australian citizenship, another matter which it is presently unnecessary to decide. Gummow ACJ Callinan Crennan respondent accepted that the role of the Tribunal was an administrative one. The submission proceeds, that if the "status" of refugee or otherwise were governed entirely by Art 1A, the cessation provision (Art 1C(5)) would have no work to The first respondent accepts, as he must, that it is the law of Australia which prevails in case of any conflict between it and the Convention. It is the law of Australia which must first be identified. The relevant law of Australia is found in the Act and in the Regulations under it. It is Australian principles of statutory interpretation which must be applied to the Act and the Regulations. One of those principles is s 15AA(1) of the Acts Interpretation Act 1901 (Cth)22. Another is s 15AB(2)(d) of that Act. The Convention has not been enacted as part of the law of Australia, unlike, for example, the Hague Rules23 and the Warsaw Convention24. Section 36 of the Act is the only section (apart from the interpretation section, s 5) which refers in terms to the Convention. That does not mean that thereby the whole of it is enacted into Australian law. As McHugh and Gummow JJ said in Minister for Immigration and Multicultural Affairs v Khawar25: "[T]he Act is not concerned to enact in Australian municipal law the various protection obligations of Contracting States found in Chs II, III and IV of the Convention. The scope of the Act is much narrower. In providing for protection visas whereby persons may either or both travel to and enter Australia, or remain in this country, the Act focuses upon the definition in Art 1 of the Convention as the criterion of operation of the protection visa system." 22 Section 15AA(1) provides: "In the interpretation of a provision of an Act, a construction that would promote the purpose or object underlying the Act (whether that purpose or object is expressly stated in the Act or not) shall be preferred to a construction that would not promote that purpose or object." 23 See Great China Metal Industries Co Ltd v Malaysian International Shipping Corporation, Berhad (1998) 196 CLR 161 at 166 [3], 186 [70], 210 [132], 224 24 See Povey v Qantas Airways Ltd (2005) 79 ALJR 1215 at 1217 [3], 1233 [107]; 216 ALR 427 at 428, 451-452. 25 (2002) 210 CLR 1 at 16 [45]. Gummow ACJ Callinan Crennan Hence, by reason of s 15AB(2)(d) of the Acts Interpretation Act, the Convention may be considered for the purposes described in s 15AB(1). Further, Australian courts will endeavour to adopt a construction of the Act and the Regulations, if that construction is available, which conforms to the Convention. And this Court would seek to adopt, if it were available, a construction of the definition in Art 1A of the Convention that conformed with any generally accepted construction in other countries subscribing to the Convention, as it would with any provision of an international instrument to which Australia is a party and which has been received into its domestic law26. The Convention will also be construed by reference to the principles stated in the Vienna Convention on the Law of Treaties ("the Vienna Convention")27, even though the Vienna Convention has not been enacted as part of the law of Australia. One of the principles stated in Art 31 of the Vienna Convention28 requires that regard be had 26 Great China Metal Industries Co Ltd v Malaysian International Shipping Corporation, Berhad (1998) 196 CLR 161 at 176 [38], 186-187 [71], 213 [137], 227-228 [179]-[180]; Povey v Qantas Airways Ltd (2005) 79 ALJR 1215 at 1220 [25], 1236-1237 [128]; 216 ALR 427 at 433, 456. 27 The Vienna Convention was ratified by Australia on 13 June 1974 and came into force on 27 January 1980 (see Vienna Convention on the Law of Treaties [1974] ATS 2). 28 Article 31 provides: "General rule of interpretation A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose. The context for the purpose of the interpretation of a treaty shall comprise, in addition to the text, including its preamble and annexes: any agreement relating to the treaty which was made between all the parties in connexion with the conclusion of the treaty; any instrument which was made by one or more parties in connexion with the conclusion of the treaty and accepted by the other parties as an instrument related to the treaty. There shall be taken into account, together with the context: (Footnote continues on next page) Gummow ACJ Callinan Crennan to the context, object and purpose of the Convention. Another, stated in Art 3229, permits recourse to the preparatory work of the Convention in the circumstances of its conclusion. But despite these respects in which the Convention may be used in construing the Act, it is the words of the Act which govern. With that background in mind, we turn to the construction of s 36. Section 36, like the Convention itself, is not concerned with permanent residence in Australia or any other asylum country, or indeed entitlements to residence for any particular period at all. Its principal concern is with the protection of a person against a threat or threats of certain kinds in another country. Neither the texts nor the histories of the Act and the Convention require that when the threat passes, protection should be regarded as necessary and continuing. any subsequent agreement between the parties regarding the interpretation of the treaty or the application of its provisions; any subsequent practice in the application of the treaty which establishes its interpretation; the agreement of the parties regarding any relevant rules of international law applicable in the relations between the parties. A special meaning shall be given to a term if it is established that the parties so intended." 29 Article 32 provides: "Supplementary means of interpretation Recourse may be had to supplementary means of interpretation, including the preparatory work of the treaty and the circumstances of its conclusion, in order to confirm the meaning resulting from the application of article 31, or to determine the meaning when the interpretation according to article 31: leaves the meaning ambiguous or obscure; or leads to a result which is manifestly absurd or unreasonable." Gummow ACJ Callinan Crennan Whether under s 36(2) Australia has protection obligations depends upon whether a person satisfies the definition of a refugee in Art 1A of the Convention, in the context of other relevant articles, none of which say anything about the period of residence or permanent residence. If they did, they would have to yield in any event to the provisions of the Act which do. There is nothing in s 36(3) of the Act which points to a different conclusion. The words in s 36(3) "whether temporarily or permanently" do no more than make it clear that any obligation of protection may or will not be assumed by Australia at any time, or from time to time, if a person has not taken all possible steps to avail himself or herself of residence in another country. Having regard to the sections of the Act and Regulations under it to which we have referred, and which are concerned with the duration of visas, these conclusions follow. A visa subsists for only the period of it, or until an event, if any, specified in it occurs (ss 28, 29(3), 67, 68(3) and 116). When the visa expires, the holder of it must make a fresh application for another visa, in this case, another protection visa, because otherwise that person would have no entitlement to remain in Australia: and, a, or the relevant criterion for the grant of a protection visa at that time is that the non-citizen, the applicant, is a person to whom Australia has (not, it may be observed, "in the past had, or owed") protection obligations under the Convention (s 36(2) and (4)). The Act does not pose the question which the majority of the Full Court posed as a relevant question, whether, at the time of an application for a permanent protection visa, there have occurred in the applicant's country changes of a substantial, effective and durable kind. True it may be that if the non-citizen did, before entering Australia, suffer persecution or had a well-founded fear of it in that other country, unless there have been real and ameliorative changes that are unlikely to be reversed in the reasonably foreseeable future, then the person will in all probability continue to be one to whom Australia owes protection obligations, but to put the question in the way in which the majority of the Full Court did, and to hold that there was, in effect, an onus upon the appellant to establish the occurrence of substantial, effective and durable change, was to fail to give effect to the rule of Australian law that the Act, and the holdings of this Court that the proceedings under it in the Tribunal, are not adversarial. This Court has repeatedly said that the proceedings of the Tribunal are administrative in nature, or inquisitorial30, and that there is an onus upon neither 30 See, eg, Muin v Refugee Review Tribunal (2002) 76 ALJR 966 at 985 [98] per McHugh J (citing, among others, Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82 at 115 [76] per Gaudron and Gummow JJ), 1001 [208] per (Footnote continues on next page) Gummow ACJ Callinan Crennan an applicant nor the Minister31. It may be that the Minister will sometimes, perhaps often, have a greater capacity to ascertain and speak to conditions existing in another country, but that does not mean that the Minister is to bear a legal onus, just as, in those cases in which an applicant is the better informed, that applicant is not to be so burdened. This is so, even though, pursuant to s 91V of the Act, the Minister may require an applicant to make or verify a statement on oath or affirmation, and may draw an adverse inference against an applicant if the Minister has reason to believe that "the applicant was not sincere" in complying with the request. What we have said is sufficient to dispose of the appeal. But in view of the arguments addressed to it, we should say something about the operation of the whole of Art 1, and such other of the provisions of it as require consideration under the Act. No doubt the provision made by Art 1 is to be interpreted in good faith. However, as the House of Lords recently emphasised32, the principle of good faith is not in itself a source of obligation where none otherwise would exist. Both the opening words of Art 1C(5), "He can no longer" (emphasis added), and the subsequent words, "the circumstances ... have ceased to exist" (emphasis added), make it clear that the circumstances from time to time and not merely as a matter of history are the relevant circumstances, that is, that the "status", as the Convention has it, of a person permitted to reside in an asylum country may change as circumstances in the country which he has left change. The opening words of Art 1C state that the "Convention shall cease to apply to any person falling under the terms of [Art 1A]" if any of the following pars (1)-(6) apply. Accordingly, the language of Art 1C(5) is unambiguous and Kirby J, 1008 [246] per Hayne J, 1014 [287] per Callinan J; 190 ALR 601 at 625, 31 See, eg, Minister for Immigration and Ethnic Affairs v Guo (1997) 191 CLR 559 at 573-574 per Brennan CJ, Dawson, Toohey, Gaudron, McHugh and Gummow J; Abebe v The Commonwealth (1999) 197 CLR 510 at 544-545 [83] per Gleeson CJ and McHugh J; Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 at 673 [195] per Callinan J. 32 R (European Roma Rights) v Prague Immigration Officer [2005] 2 AC 1 at 31-32 [19] per Lord Bingham of Cornhill, 50-53 [57]-[64] per Lord Hope of Craighead. Gummow ACJ Callinan Crennan compels the same conclusion as the Act. The appellant's submission, that the cessation provision operates automatically according to its terms, and need not for its application be triggered by a request for a visa, or any particular kind of visa, although in practice such a request will ordinarily be the occasion for consideration of a person's right or otherwise to continuing protection, should be accepted. This is the operation that Art 1C(5) has, and is the work that it has to do and for which Art 1A does not make provision. In R (Hoxha) v Special Adjudicator33 the House of Lords (Lord Nicholls of Birkenhead, Lord Steyn, Lord Hope of Craighead, Baroness Hale of Richmond and Lord Brown of Eaton-under-Heywood) considered the relevant articles of the Convention without reference to any legislative framework for them in the United Kingdom34. The argument for the appellant in Hoxha went a step beyond that accepted by the Full Court in the present case. The argument was that if, albeit without any formal determination of refugee status made at an earlier time, the applicant subsequently was shown to have fulfilled the criteria under Art 1A(2) at that earlier time, the applicant was to be treated as having been "recognised" for the purposes of Art 1C(5). That argument was rejected by the House of Lords unanimously. Lord Brown's view that "[Art] 1C(5), a cessation clause, simply has no application ... at any stage unless and until it is invoked by the State against the refugee in order to deprive him of the refugee status previously accorded to him"35 (original emphasis) is not inconsistent with the conclusion to which we 33 [2005] 1 WLR 1063; [2005] 4 All ER 580. 34 It appears that while various provisions of the United Kingdom legislation operate by reference to the obligations of that country under the Convention (eg Nationality, Immigration and Asylum Act 2002 (UK), ss 18, 113; Asylum and Immigration (Treatment of Claimants, etc) Act 2004 (UK), Sched 3, Item 1), the Convention has not been enacted into the domestic law and that in some respects the statute law is more narrowly drawn than the Convention: R (on application of Pepushi) v Crown Prosecution Service [2004] Imm AR 549, a decision of Thomas LJ and Silber J. See also R (European Roma Rights) v Prague Immigration Officer [2005] 2 AC 1 at 25-26 [8] per Lord Bingham of Cornhill, 44- 45 [41]-[42] per Lord Steyn, 47-48 [49]-[51] per Lord Hope of Craighead, where somewhat differing views were expressed as to the extent and mode of incorporation of the Convention by the law as it stood in July 2001, the critical date for that case. 35 [2005] 1 WLR 1063 at 1082 [60]; [2005] 4 All ER 580 at 600. Gummow ACJ Callinan Crennan have come. The authority of this Court36 is however to a different effect on the question of onus, as to which Lord Brown adopted37 a statement made at the Lisbon Conference38: "the asylum authorities should bear the burden of proof that such [benign] changes [of circumstances in the country of departure] are indeed fundamental and durable". The jurisprudence of this Court is that no burden of proof lies upon either party in Tribunal proceedings. The first respondent argued that articles of the Convention other than those so far referred to support his submission that once he has been accepted as a refugee he must be taken to be a refugee for all times and purposes, stressing that Chs II, III and IV which are concerned with juridical status, employment and welfare in the country of asylum, and which confer upon a refugee many of the other conventional benefits of citizenship, including rights to hold property (albeit as an alien)39, of association40, access to the courts41, to work for remuneration42, and to welfare43, imply that a person, once recognized as being entitled to protection, effectively ceases to be a refugee, acquires a "status" as an ordinary citizen, and may not be treated otherwise, or removed from Australia, or at least not removed unless and until the appellant establish relevantly changed circumstances in the first respondent's own or former country of residence. The argument would fail even if the Act left open unqualified recourse to the articles upon which the first respondent seeks to rely for the implication. Those articles do not purport to define a refugee either for all times or purposes 36 See fns 21 and 22, supra. 37 [2005] 1 WLR 1063 at 1082 [63]; [2005] 4 All ER 580 at 601. 38 The United Nations High Commission for Refugees Lisbon Roundtable Meeting of Experts held in May 2001: see [2005] 1 WLR 1063 at 1082 [61]; [2005] 4 All ER 39 Article 13. 40 Article 15. 41 Article 16. 42 Article 17. Note however s 41 of the Act which particularly permits qualification of this right. 43 Articles 20-24. Gummow ACJ Callinan Crennan or at all. Nor do they touch upon how a refugee is to be defined or accorded recognition as such, or to be entitled to continue to avail himself of protection. These matters are expressly and exhaustively the subject of Art 1 of Ch I. Such consequential rights as flow from recognition as a refugee and give effect to the extent that they do to the Convention, are the subject, in part at least, of the Act under which conditions of residence can be imposed, and of other legislation, including social security and industrial legislation enacted from time to time. Nor do Arts 32 and 33 which are concerned with expulsion assist the first respondent. To discontinue protection upon the lapsing of a need for it, and to refuse to grant a visa, whether permanent or temporary in those circumstances, in consequence of which a person may be liable to be removed from an asylum country, is not to expel that person. Article 33(1) if anything argues to the contrary of the first respondent's submissions. It speaks prospectively and not historically by prohibiting expulsion to any frontier "where his life or freedom would be threatened on account of his race, religion, nationality, membership of a particular social group or political opinion" (emphasis added). A further basis for allowing the appeal is that the Tribunal did not, as the Full Court held, fail to make the inquiries which the Full Court said that it was bound, in the proper exercise of its jurisdiction, to make. The Tribunal did make findings with respect to Taliban activity generally in Afghanistan, what the future held in that regard, for example, sporadic but containable threats to security, and the applicant's susceptibility, if any, to threats from the Taliban and other sources. The appeal should be allowed. The orders made by the Full Court of the Federal Court on 27 July 2005, save in respect of costs, should be set aside. In place thereof the appeal to the Full Court should be dismissed. By consent the appellant should pay the first respondent's costs of the appeal to this Court. Kirby KIRBY J. This appeal from the Full Court of the Federal Court of Australia44 concerns the meaning of art 1 of the Refugees Convention ("the Convention")45, and its relationship to the system of temporary protection established by the Migration Act 1958 (Cth) ("the Act")46. It is a relationship that has been described as uncomfortable47; and it raises a question of construction that is made more difficult by the absence of settled State practice on the application of the provisions of the Convention to individual cases48. This Court must decide whether a person, recognised as a "refugee" for the purposes of art 1A(2) of the Convention, can lose that status at any time if he or she ceases, on the facts, to fall within the definition of "refugee". In resolving that question, the Court must first decide whether it is necessary, under Australian law, to have regard to the Convention, and if so, to what extent. If the Convention is legally relevant, the Court must determine a number of issues relating to its interpretation, including the extent of any change in circumstances necessary to ground a cessation claim; and whether the Minister bears an evidentiary, or at least forensic, burden of proving the cessation of refugee status. 44 QAAH v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 145 FCR 363. 45 Convention relating to the Status of Refugees, opened for signature 28 July 1951, 189 UNTS 150; 1954 ATS 5 (entered into force 22 April 1954), read with the Protocol relating to the Status of Refugees, opened for signature 31 January 1967, 606 UNTS 267; 1973 ATS 37 (entered into force 4 October 1967) (together, "the Convention"). 46 The relationship was recently considered by this Court in NAGV and NAGW of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 222 CLR 161. In the Federal Court, see Minister for Immigration and Multicultural Affairs v Thiyagarajah (1997) 80 FCR 543. 47 NBGM v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 1373 at [61]; NBGM (2006) 150 FCR 522 at 548 [103]. 48 Fitzpatrick, "The End of Protection: Standards for Cessation of Refugee Status and Withdrawal of Temporary Protection", (1999) 13 Georgetown Immigration Law Journal 343 at 356-363; Fitzpatrick and Bonoan, "Cessation of refugee protection", in Feller, TΓΌrk & Nicholson (eds), Refugee Protection in International Law, UNHCRβs Global Consultations on International Protection, (2003) 491 at 512- 513; O'Sullivan, "Before The High Court: Minister for Immigration and Multicultural and Indigenous Affairs v QAAH: Cessation of Refugee Status", (2006) 28 Sydney Law Review 359 at 359, 361. Kirby Subject to any peculiarities of Australian law, in the absence of established State practice on the interpretation of art 1C(5) of the Convention, the decision of this Court has the potential to influence the interpretation of the Convention beyond Australian law. Experience demonstrates that courts in many countries, including Australia, pay close regard to court decisions in other countries grappling with the meaning and application of the Convention. This is such a decision. For the reasons that follow, it is my view that the majority of the Full Court came to the correct conclusion and, basically, for the correct reasons. The appeal from the Full Court's judgment should be dismissed. The facts and decisional history The grant and refusal of visas: QAAH is a national of Afghanistan. He is a Shi'a Muslim of Hazara ethnicity. He arrived in Australia in September 1999. On 28 March 2000 he was granted a "temporary protection visa" by a delegate of the appellant, the Minister for Immigration and Multicultural and Indigenous Affairs ("the Minister"). In accordance with its terms, the visa would expire after three years. In granting the visa, the delegate made the following findings affirming that QAAH was entitled to protection as a "refugee", within the Convention definition: "I accept that the applicant is a male from the Hazara ethnic group in Afghanistan. I also accept that if he returns to Afghanistan he has a real chance of being captured by the Taliban and forced to fight or be killed by them. I accept that the Taliban control large areas in Afghanistan, and there are no areas that the applicant could be safe in Afghanistan, as he is readily identifiable as an ethnic Hazara from his physical appearance and his language." In April 2000, QAAH applied for a permanent protection visa. On 27 March 2003, he was issued a further temporary protection visa. By its terms, this second visa remained in force for an indefinite time, pending a decision upon his application for permanent protection. During an interview with the Minister's delegate in respect of his application, QAAH claimed that he feared remnants of the Taliban still operating in his district of Afghanistan. He argued that refusal of his application would involve the cessation of his refugee status. This course was said to be unjustified because any changes in the country circumstances in Afghanistan were slight. On 21 November 2003, the delegate refused QAAH's application for a permanent protection visa. In the Refugee Review Tribunal: QAAH then applied to the Refugee Review Tribunal ("the Tribunal") for review of that decision. The Tribunal Kirby affirmed the delegate's decision. In doing so, the Tribunal asked itself two questions. The first was whether the cessation provision in art 1C(5) of the Convention applied in the circumstances of the case, where the applicant had previously applied for, and had been granted, a protection visa on the ground of refugee status. The second question was whether there was new evidence supporting the proposition that QAAH was currently a "refugee" for the purposes of the Act and the protection visas for which it provided. In answer to the first question, the Tribunal held that the cessation provision in art 1C(5) did apply and was fulfilled. As a result, it concluded that QAAH could no longer continue to refuse to avail himself of the protection of his country of nationality, Afghanistan. The Tribunal accepted that the Taliban, if they were still in power, would have persecuted QAAH because of his Hazara ethnicity, and because he was a Shi'a Muslim. However, the Tribunal concluded that, whilst remnants of the Taliban remained active in some parts of Afghanistan, by late 2001 they had ceased to be a coherent political movement. In the Tribunal's opinion, there was no real chance of the Taliban re-emerging as an effective authority in the foreseeable future. QAAH made separate claims of persecution on account of his ethnicity and religion. Those claims were rejected on the basis that there was no real chance that he would be persecuted by any of the nominated causes or groups, if he were returned to Afghanistan. The Tribunal therefore concluded that QAAH did not have a well-founded fear of persecution sufficient to attract Australia's protection obligations. It was on this basis that the application for a permanent protection visa was refused. In the Federal Court: QAAH then applied to the Federal Court of Australia for judicial review of the Tribunal's decision. In that Court, the primary judge (Dowsett J) dismissed the application. He concluded that the Tribunal was not required to consider both of the questions identified above49: "[T]he question for the Tribunal in the present case was whether or not, at the time of the decision [QAAH] had a well-founded fear of persecution for a Convention reason. It was not strictly relevant that he had previously applied for and received temporary β¦ visas. In other words it was not necessary to decide whether or not the cessation clause had been engaged as a result of changed circumstances in Afghanistan." On appeal to the Full Court of the Federal Court, that Court (Wilcox and Madgwick JJ; Lander J dissenting) concluded that the Tribunal's failure to address the cessation issue properly, together with other mistakes, constituted jurisdictional errors. QAAH's appeal was therefore allowed and a rehearing was 49 QAAH of 2004 v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 1448 at [23] per Dowsett J, cited in QAAH (2005) 145 FCR Kirby ordered in the Tribunal. It is from those orders that the appellant, by special leave, now appeals to this Court. Contested approaches: The Minister argued that, in the course of their reasoning, the Full Court majority reached a number of conclusions which she contested. Among these was said to be a conclusion that a State party to the Convention, such as Australia, that had previously recognised the refugee status of the person concerned, bears a burden of proving that such a person has ceased to have that status before withdrawing it; that the approach to the grant of refugee status under art 1A(2) of the Convention does not precisely mirror the approach to the cessation of refugee status under art 1C(5); and that, in order for cessation to be established, so as to warrant a withdrawal of refugee status, there must be positive evidence that changes in circumstances in the country of nationality have been fundamental, stable and durable. The Minister argued that these conclusions were not consistent with the applicable Australian law, including its reference to the language of the Convention. The issues Six issues arise for decision by this Court: The Australian law issue: Is it erroneous to decide this appeal by reference to the Convention provisions on the meaning of "refugee" and the circumstances in which status as a "refugee" has ceased? Is the answer to the appeal found exclusively in the Act's scheme for temporary visas? Or, reading the Act's provisions in light of the scheme of temporary visas, does Australian law oblige the decision-maker to approach arguments concerning refugee status and loss of that status by reference to the provisions of the Convention, including those provisions that apply to cessation of a previously accepted refugee status? The UNHCR assistance issue: In answering the issues in this appeal, should this Court pay any regard to the submissions offered to it by and on behalf of the UNHCR? In construing the Convention and provisions of the Act referring to the Convention, should the Court take into account opinions expressed in the UNHCR Handbook50, Guidelines51 and reports 50 UNHCR, Handbook on Procedures and Criteria for Determining Refugee Status under the 1951 Convention and the 1967 Protocol relating to the Status of Refugees, 1979 (rev ed 1992). 51 UNHCR, Guidelines on International Protection: Cessation of Refugee Status under Article 1C(5) and (6) of the 1951 Convention relating to the Status of Refugees, (2003). Kirby of expert meetings concerning the meaning of the Convention and its intended operation? The art 1C(5) test issue: Do art 1A(2) and art 1C(5) of the Convention impose an "identical" test, namely, whether or not the applicant has a well founded fear of persecution for a Convention reason? Or do they impose two "separate and distinct" tests, which are applied at different times, and which are not "mirrored" precisely in one another? The extent of change issue: When making a decision to which art 1C(5) of the Convention is relevant, is the decision-maker required to consider whether the purported change in country circumstances in the country of nationality is "fundamental", "stable" and "durable", as distinct from temporary and transient? Or does any change of circumstances, of whatever degree and duration, attract the operation of art 1C(5) of the Convention? The burden of proof issue: Does the State party to the Convention which earlier recognised a person as a "refugee" bear a burden of proving changed circumstances warranting cessation of refugee status? Or does Australia's inquisitorial refugee determination process mean that a burden of proof, as such, may not be imposed? If a burden of a legal kind is not imposed, is a forensic obligation nonetheless applicable to the Australian decision-maker's reasoning? The Tribunal decision issue: Whatever the resolution of the foregoing issues, did the Tribunal approach its decision in the correct way? Is a rehearing futile because the country information on Afghanistan, provided to the Tribunal, already convinced it of a material change of circumstances between the original grant to QAAH of a temporary visa as a refugee and the time of the Tribunal's decision on his application for a permanent protection visa? The Australian law issue The provisions of municipal law: In their joint reasons, the majority in this Court state that Australian law is determinative of the issues in this appeal52. They conclude that, in the face of the many provisions of the Act that deal with the temporariness and "periodicity" of Australia's protection regime, the 52 Joint reasons at [34]. Kirby provisions of the Convention have no effect53, or at least must take second place to the operation of the applicable municipal law. I entirely agree that it is necessary to begin the resolution of the issues before this Court with the provisions of Australian law under consideration. In case of any conflict, that domestic law prevails over the requirements of the Convention54. I also agree that relevant provisions of Australian law offer the framework for the resolution of the issues under consideration; and that Australian law is ultimately determinative of the questions in this appeal. The central provision of Australian law in issue is s 36(2) of the Act. Because the language and structure of that section are critical to my conclusions, I will reproduce it here. Section 36 of the Act relevantly provides: (2) A criterion for a protection visa is that the applicant for the visa is: a non-citizen in Australia to whom the Minister is satisfied Australia has protection obligations under the Refugees Convention as amended by the Refugees Protocol β¦" From the language of its provisions, it is clear that s 36(2) points directly back to the Convention. It does this because it grants "protection" to a person to whom the Minister is satisfied55 Australia has protection obligations "under the Refugees Convention as amended by the Refugees Protocol". It follows that it is only when a person satisfies the requirements of art 1 of the Convention that he or she becomes a person to whom Australia owes "protection obligations" under the Convention, that is, a "refugee"56. Before that, by Australian law, no such obligations exist. 53 Joint reasons at [32]-[34]. 54 Minister for Immigration and Multicultural and Indigenous Affairs v B (2004) 219 CLR 365 at 414 [136]. 55 In its previous form, s 36(2) did not require the Minister to be "satisfied" that the applicant was a person entitled to Australia's protection. The subjective criterion was introduced by Pt 1(5) of the Migration Legislation Amendment (Judicial Review) Act 2001 (Cth). The pre-existing form of the legislation does not apply in these proceedings. 56 Grahl-Madsen, The Status of Refugees in International Law, (1966), vol 1 at 399- 401. Because this Court has stated on numerous occasions that the whole of art 1 is relevant to determining whether or not a person is a "refugee" within the meaning of the Convention and Protocol, s 36(2) necessarily accepts into Australian law the (Footnote continues on next page) Kirby Incorporation of treaty definition: Thus, as this Court has noted on several occasions, s 36(2) directly incorporates into Australian municipal law the legal criteria for determining who is entitled to protection, thereby enlivening the Minister's satisfaction57. In enacting s 36(2), the Parliament's intention was to give effect to the "definition in Art 1 of the Convention as the criterion of the operation of the protection visa system"58. Because, in this way, art 1 is incorporated into Australian law, it cannot be said that having recourse to the requirements, object, scope and purpose of that article amounts to the subordination of municipal law to the demands of the Convention, as the joint reasons in this Court would suggest. On the contrary, any other approach would involve a departure from the letter of Australian law. Nor are the specific requirements of art 1 of the Convention, incorporated into Australian law by s 36(2) of the Act, altered by those general provisions of the Act that establish temporary visas, or emphasise "limited periods" or the "effluxion of time"59. First, only a limited number of the sections referred to in the joint reasons are actually addressed to Australia's protection regime. The remainder include sections addressed to general powers (to issue visas (s 29), to impose conditions or restrictions on visas (s 41), to grant or refuse visas (s 65) and to cancel visas (116(1)). They also include sections establishing various classes of visa unrelated to Australia's protection obligations, including special whole of art 1. See, eg, NAGV and NAGW of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 222 CLR 161 at 176 [43]. 57 In its previous form, Div 1AA of Pt 2 of the Act was headed "Refugees". It contained s 22AA, which stated that, "[i]f the Minister is satisfied that a person is a refugee, the Minister may determine, in writing, that the person is a refugee". The term "refugee" was defined in s 4 as having "the same meaning as it has in Article 1 of the Refugees Convention". The Migration Reform Act 1992 (Cth), repealed s 22AA, deleted the word "refugees" and introduced the predecessor to s 36 (drawn in substantially similar terms). The Explanatory Memorandum accompanying the Bill stated that the change was a "technical" one designed to increase administrative efficiency by combining in one process the application for recognition as a refugee and the application for the grant of a protection visa. The purpose behind these reforms was not to limit the incorporation, into Australian municipal law, of art 1 of the Convention. If anything, the reform had the effect of extending the incorporation, to include additional provisions of the Convention, by the Refugees broadening Convention" to the more general "Refugees Convention and Protocol". limited reference to "Article 1 of the original, 58 Minister for Immigration and Multicultural Affairs v Khawar (2002) 210 CLR 1 at 59 [2006] HCATrans 340 at 56. Kirby visas for citizens of New Zealand (s 32); persons who are of a "prescribed status" (s 33); "absorbed persons" (s 34); former citizens of Australia (s 35); and persons who are subject to criminal justice and enforcement proceedings (ss 38 and 38A respectively). Whether or not these sections evince "periodicity" or impose temporal limitations on the right to enter and reside in Australia, they do not relate to Australia's protection regime. These general provisions may not be used to override the clear requirements of s 36(2). Distinguishing recognition and protection: Secondly, as I will explain in more detail below60, s 36 of the Act incorporates a distinction that is central to the operation of art 1 of the Convention, namely, the distinction between recognition of a person as a refugee; and the conferral of Australia's protection. Recognition, as envisaged by the Convention, can only lapse in accordance with one of the cessation grounds set out in art 1C. Protection, on the other hand, may lapse in accordance with the provisions of the Act. Because they are distinct processes, the lapse of protection does not necessarily have any causal effect on a person's recognition as a refugee. A person may remain "recognised" as a refugee notwithstanding the periodic lapse of a protection visa. In this sense, the Act does nothing more than establish a system of temporary protection. The periodicity of Australia's protection regime cannot be used to infer the existence of a regime of temporary recognition. By assuming that the provisions of the Act dealing with the temporariness of protection have some operation in relation to the recognition (or cessation) of a person's refugee status, the joint reasons confuse the distinct functions of recognition of refugee status, and protection. With respect, this is a serious error of analysis. It is one which the majority in the Full Court avoided. The distinction between the two steps is central to the operation of art 1 of the Convention. It is therefore vital to the operation of s 36 of the Act, which accepts the Convention in this respect, as part of the Australian law governing the entitlement to "refugee" status61. It follows that I would reject the conclusion expressed in the joint reasons62 as to the supposed error of the majority in the Full Court in their approach to the legal questions presented by this appeal. There was no such error in the Full Court. 60 These reasons below at [97]-[98]. 61 Because s 36 incorporates art 1 into Australian law, it can be assumed that the Parliament intended it to be "β¦construed in accordance with the meaning to be attributed to the treaty provision in international law": Applicant A v Minister for Immigration and Ethnic Affairs (1997) 190 CLR 225 at 239 per Dawson J; cf 240 per Dawson J, 251-252 per McHugh J; Koowarta v Bjelke-Petersen (1982) 153 CLR 168 at 265; Morrison v Peacock (2002) 210 CLR 274 at 278-279 [15]. 62 Joint reasons at [37]-[38]. Kirby The UNHCR assistance issue UNHCR Guidelines and Handbook: Accepting, as I do, that s 36(2) of the Act requires consideration of the meaning and operation of art 1 of the Convention, incorporated by reference as part of Australian law, it is necessary next to consider a threshold question that arose in this Court, and in the courts below, about the use that might be made of the Guidelines and other UNHCR material in the interpretation of art 1. In her submissions, the Minister expresses misgivings about the use of UNHCR material in aid of the interpretation of the law applicable in this case. I do not support those concerns. Article 31 of the Vienna Convention on the Law of Treaties forms part of (and substantially re-expresses) customary international law63. It requires State parties to international treaties, such as the Refugees Convention, where relevant, to examine both the "ordinary meaning" and the "context β¦ object and purpose" of a treaty where it is applicable to the facts in issue before them64. In Applicant A v Minister for Immigration and Ethnic Affairs65, McHugh J explained the "general principle that international instruments should be interpreted in a more liberal manner than β¦ exclusively domestic legislation". This approach presents consequences for the materials that may be used to assist in the interpretation of international instruments. In the same decision, Brennan CJ explained66: "Although the text of a treaty may itself reveal its object and purpose or at least assist in ascertaining its object and purpose, assistance may also be obtained from extrinsic sources. The form in which a treaty is drafted, the subject to which it relates, the mischief that it addresses, the history of its negotiation and comparison with earlier or amending instruments relating to the same subject may warrant consideration in arriving at the true interpretation of its text." The purpose of this "holistic" approach to understanding treaty provisions is to "enable a simultaneous consideration of the treaty text and useful and valid 63 Thiel v Federal Commissioner of Taxation (1990) 171 CLR 338 at 356; cf The Commonwealth v Tasmania (The Tasmanian Dam Case) (1983) 158 CLR 1 at 193- 64 Thiel v Federal Commissioner of Taxation (1990) 171 CLR 338 at 356. 65 (1997) 190 CLR 225 at 255. (1997) 190 CLR 225 at 231. Kirby extrinsic materials elucidating it"67. It follows that, in the interests of determining the "context, object and purpose" of art 1C(5) of the Convention in this case, "a wider range of extrinsic sources may be referred to than in the case of domestic statutes"68. This Court has frequently resorted to the UNHCR Guidelines and the Handbook in construing and applying the Convention69. This has been done because of the expertise of the UNHCR in the application of the Convention. Pursuant to its Statute70, "the competence of [the UNHCR] to provide for the protection of refugees extends β¦ to ensuring [a] correct interpretation of the provisions of the Refugees Convention consistent with international refugee law and protection requirements"71. Article 35 of the Convention obliges State parties to "co-operate with [UNHCR]" in its "duty of supervising the application of the provisions of [the] Convention". This principle is also reflected in the preamble to the Convention. The UNHCR's specific expertise in the application of art 1C derives from one of its functions, which is to declare that refugees, emanating from a particular country, no longer fall within the UNHCR mandate72. The power to terminate particular mandates, in respect of nominated 67 QAAH (2005) 145 FCR 363 at 388 [95] per Madgwick J; cf Morrison v Peacock (2002) 210 CLR 274 at 279 [16]; El Greco (Australia) Pty Ltd v Mediterranean Shipping Co SA (2004) 140 FCR 296 at 326-327 [142]. 68 QAAH (2005) 145 FCR 363 at 388 [95] per Madgwick J; cf Somaghi v Minister for Immigration, Local Government and Ethnic Affairs (1991) 31 FCR 100 at 117; Fothergill v Monarch Airlines Ltd [1981] AC 251 at 294-295. 69 See, eg, Chan v Minister for Immigration and Ethnic Affairs (1989) 169 CLR 379 at 392; Minister for Immigration and Multicultural Affairs v Ibrahim (2000) 204 CLR 1 at 20 [61]; Minister for Immigration and Multicultural Affairs v Singh (2002) 209 CLR 533 at 545 [21]; Minister for Immigration and Multicultural and Indigenous Affairs v SGLB (2004) 78 ALJR 992 at 1008-1009 [80]-[82]; 207 ALR 12 at 35-36; Re Woolley; Ex parte Applicant M276/2003 (by their next friend GS) (2004) 79 ALJR 43 at 67 [107]; 210 ALR 369 at 399. 70 Statute of the Office of the United Nations High Commissioner for Refugees, UNGAR 428(V), annex, 5 UNGAOR Supp (No 20) at 46 (1950). 71 UNHCR written submissions at 1-2. 72 See, eg, the following formal declarations of general cessation: "Applicability of the Cessation Clauses the Republics of Malawi and Mozambique", (1996); "Applicability of the Cessation Clauses to Refugees from Bulgaria and Romania", (1997); "Applicability of the Ceased Circumstances; Cessation Clauses to pre-1991 refugees from Ethiopia", (1999); and "Declaration of Cessation β Timor Leste", (2002). to Refugees from Kirby circumstances, was exercised some 21 times between 1973 and 199973. In deciding an appeal such as this, due weight should therefore be given to the guidance provided by relevant UNHCR publications, including the UNHCR Handbook and the Guidelines. This does not mean that such sources are binding on this or any other court. But it does mean that, like other final courts, this Court will often derive great assistance by having access to such materials74. UNHCR as amicus curiae: In this appeal, UNHCR exceptionally, and so far as I am aware, uniquely, sought to be heard as an amicus curiae. Counsel were retained for this purpose and travelled to the hearing to make the application. I would unhesitatingly have granted leave for UNHCR to be heard in these proceedings. However, unrestricted leave for oral argument was withheld by the Court. The UNHCR's participation was confined to written submissions. The intervention of UNHCR is recorded in important proceedings in national courts overseas75. In my view, it should be welcomed, not resisted. Decisions of national courts play an important role in expressing the meaning of the Convention and deciding the application of such treaty law. In effect, in deciding cases such as the present, national courts are exercising a species of international jurisdiction76. The more assistance courts can receive from the relevant international agencies, in discharging such international functions, the better. Utilising UNHCR assistance: The Guidelines do not express rules of law. To the extent that they are inconsistent either with the Act or the Convention itself, they must be disregarded. The Full Court was fully aware of this77. Yet as McHugh J stated in Chan v Minister for Immigration and Ethnic Affairs78, the 73 cf Fitzpatrick & Bonoan, "Cessation of Refugee Protection", in Feller, TΓΌrk & Nicholson (eds), Refugee Protection in International Law, UNHCRβs Global Consultations on International Protection, (2003) 491 at 499-512. Immigration and Naturalization Service v Cardozo Fonseca 480 US 421 at 439 n 22 (1987); R v Secretary of State for the Home Department; Ex parte Adan [2001] 2 AC 477 at 500 per Lord Woolf MR, 519-520 per Lord Steyn. 75 See, eg, R v Immigration Appeal Tribunal; Ex parte Shah [1999] 2 AC 629. 76 Al-Kateb v Godwin (2004) 219 CLR 562 at 622 [168], citing Brownlie, Principles of Public International Law, 5th ed (1998) at 584. 77 QAAH (2005) 145 FCR 363 at 376 [46] per Wilcox J. 78 (1989) 169 CLR 379 at 424. See QAAH (2005) 145 FCR 363 at 376 [46]. Kirby UNHCR Handbook is a document designed to "assist member States to carry out their obligations" under the Convention and the Protocol. Having been prepared by experts, it is available for use by any decision-maker considering whether a person is a "refugee"; or whether a person who has previously been recognised as a "refugee" has ceased to be one79. It follows that the UNHCR Guidelines and Handbook constitute a useful source of expertise that can aid the interpretation of provisions in the Convention that are ambiguous or unclear. Specifically, they can assist in elucidating the purpose and object of the Convention and the way it is intended to operate, and does operate, in other countries80. They may therefore be used to assist courts such as this in the interpretation of Convention provisions such as art 1C(5). Particularly is this so in the absence of clear national jurisprudence and relevant State practice, factors that can help, where available, to explain the meaning of provisions of any international treaty81. To the extent that this Court cuts itself off from insights expressed in the UNHCR Guidelines, the Handbook and expert views, about the meaning and purposes of the Convention, it reduces its own capacity for accurate decision- making. It limits the value that its decisions may have for other countries that will have no such inhibitions82. It risks adopting interpretations of the Convention that put it at odds with the courts of other State parties engaged in the interpretation of the treaty. And it reveals a degree of parochialism that, unless 79 QAAH (2005) 145 FCR 363 at 376-379 [46]-[54] per Wilcox J. 80 Vienna Convention on the Law of Treaties, art 32; opened for signature 23 May 1969, 1155 UNTS 331; 1974 ATS 2 (entered into force 27 January 1980). 81 There is very little State practice concerning the application of art 1C(5) to individual cases. This appears to be because the provision tends to be invoked most clearly in mass influx situations, where it is not possible to conduct individual assessments; cf O'Sullivan, "Before The High Court: Minister for Immigration and Multicultural and Indigenous Affairs v QAAH: Cessation of Refugee Status", (2006) 28 Sydney Law Review 359 at 359, 361; Fitzpatrick and Bonoan, "Cessation of Refugee Protection", in Feller, TΓΌrk & Nicholson (eds), Refugee Protection in International Law, UNHCRβs Global Consultations on International Protection, (2003) 491 at 512-513; UNHCR Guidelines at 2-3 [3]. On the standards to be applied in this context, see Gilbert, "Current Issues in the application of the exclusion clauses" in Feller, TΓΌrk & Nicholson (eds), Refugee Protection in International Law, UNHCRβs Global Consultations on International Protection, 82 See, eg, Adan v Secretary of State for the Home Department [1999] 1 AC 293 at Kirby clearly warranted by the peculiarities of domestic law, is inappropriate to the legal task of interpreting, and giving effect to, the provisions of an international treaty which Australia has opted to ratify and which it has incorporated by reference into its federal law. The art 1C(5) test issue The recognition and cessation decisions: Recognising, therefore, that s 36(2) of the Act requires a decision-maker to have regard to art 1 of the Convention, as elucidated by the submissions of the parties and any persuasive UNHCR materials, it is necessary, next, to consider a number of issues relating to the interpretation of art 1. Central to this appeal is a controversy about the appropriate test to be applied by a decision-maker in cases where it is alleged that a person's status as a "refugee" has ceased. Before the Court this issue boiled down to whether or not a decision-maker is to apply the same test in respect of cessation under art 1C(5) as he or she would apply in respect of an original application for recognition as a refugee under art 1A(2). The Minister argued that a precise symmetry exists between the tests imposed by arts 1A(2) and 1C(5)83 of the Convention. According to the Minister, in each case the question is whether the person has a "well-founded fear of persecution" for a Convention reason, as a result of which the person is unwilling to avail himself or herself of the protection of the country of nationality. According to this view, in Australia, when a further protection visa is sought by a person previously found to be a "refugee", the Minister is required by s 36(2)(a) of the Act to conduct the same inquiry as if the person were applying for protection for the first time. Thus, the Minister would have to re-determine, on each occasion, whether or not the person fell within the definition of "refugee" contained in art 184. On this view, the Minister would have to consider afresh the circumstances prevailing at the time of each decision. The question to be asked would be whether or not the visa applicant is a "refugee" at the date of each decision. Hence, refugee status could "come and go" according to changed conditions in a person's country of nationality"85. 83 In the Minister's words, the Tribunal should ask itself an "Art1A(2)/1C(5) question": Appellant's Outline of Submissions at 20 [56]. 84 Whether or not a person has previously been recognised as a refugee, the Tribunal's function under the Act was said to be the same: to decide whether or not it is satisfied that the applicant is a refugee within the meaning of art 1. 85 [2006] HCATrans 339 at 24. Kirby QAAH submitted that art 1A(2) and art 1C(5) involve "separate and distinct" tests. According to him, in cases where the Minister has previously been satisfied that Convention obligations arise in respect of him, pursuant to art 1A(2), the initial question for the Tribunal is whether such obligations have ceased. That question demands that attention be given to art 1C(5). Without this second stage in the test, QAAH submitted that art 1C(5) would have no meaning additional to the test set out in art 1A(2). In effect, it would be superfluous. Because such a conclusion would not readily be arrived at, in the structure and apparent scheme of the Convention, the provisions of art 1C(5) need to be given work to do in a case where a person has already been found to be a "refugee" but is said no longer to warrant that status because of supervening events in the country of that person's nationality. In support of his interpretation of the Convention, QAAH referred to the UNHCR Guidelines. He submitted that the "symmetrical" approach urged by the Minister would lead to a situation in which Australia's protection obligations would be "granted in instalments to be affirmed by the Minister each time it is necessary for a recognised refugee to seek another visa". QAAH argued that this interpretation had no foundation either in the Act or in the Convention itself. Especially was this so because, so far as the Convention was concerned, it established defined obligations on the part of the State party towards a person recognised as a "refugee". The language and purpose of the Convention suggested that, once recognised as a "refugee", that status could not be withdrawn and re-granted, or granted and withheld, periodically. A threshold issue in this appeal is therefore whether the Convention, and the Act read in the light of the Convention, reflect the conception of "refugee" status urged by QAAH, or the contrary, periodic conception urged by the Minister. Authority of this Court: In deciding this issue, something should first be said of the reliance that the Minister placed on the decisions of this Court concerning the appropriate test under art 1C(5). The Minister's submission, that refugee status could "come and go" with changed conditions in the country of nationality, was said to be supported by observations made in the decisions in Chan86 and Minister for Immigration and Ethnic Affairs v Mayer87. Chan concerned an application for a protection visa by a Chinese national. He alleged that he faced persecution on the basis of his association with a faction of the Red Guards that had lost a struggle for power in his local district. This, he said, had resulted in his detention and condemnation as "anti-revolutionary", and 86 (1989) 169 CLR 379 at 398-399; [2006] HCATrans 339 at 24. (1985) 157 CLR 290 at 302; [2006] HCATrans 339 at 24. Kirby ultimately, his exile to another district of China. By the time the matter came before this Court, Mr Chan's application for protection had been refused twice. The Court found in his favour, concluding that, in failing to recognise Mr Chan's well-founded fear of persecution, and refusing him a protection visa, the Tribunal had acted so unreasonably as to warrant intervention. Relevantly, in the course of reaching this finding, Dawson J stated that88: "Art 1C speaks of the circumstances in connexion with which he has been recognized as a refugee having ceased to exist, suggesting that refugee status under the Convention may come and go according to changed conditions in a person's country of nationality and is to be determined according required." to existing circumstances whenever a determination Further, Toohey J stated that89: "The structure of Art 1 implies that status as a refugee is to be determined when recognition by the State party is sought and that, if granted, the status may thereafter be lost because the circumstances giving rise to recognition have ceased to exist." The Minister argued that these statements supported her submission that the test under art 1C(5) of the Convention had to mirror the test under art 1A(2). Accordingly, whether approached through art 1A(2) or art 1C(5), the result would be the same: cessation of the circumstances giving rise to refugee status would automatically result in a person's ceasing to fall within the Convention definition of "refugee". The person would no longer enjoy the entitlement to a protection visa under the Act. The second case upon which the Minister placed reliance was Mayer90. The applicant there held a "temporary entry permit". He subsequently applied to the Minister for "recognition" as a "refugee" within the terms of the Convention. He did so presumably in the expectation of satisfying one of the requirements for the grant of a permanent protection visa, namely, that he was a "refugee" within the meaning of the Convention. The application was refused. The appeal to this Court turned on the question of whether the Minister's decision to refuse the application constituted a "decision under an enactment" within the meaning of s 5 of the Administrative Decisions (Judicial Review) Act 1977 (Cth), capable of 88 Chan (1989) 169 CLR 379 at 398-399. 89 Chan (1989) 169 CLR 379 at 405. 90 Mayer (1985) 157 CLR 290. Kirby being reviewed within the terms of that Act. The Court observed that, in order to be eligible for the grant of a protection visa under the Act, a person had to be capable of fulfilling the requirements for the grant at the time of the grant91: "[T]he reference to a determination that an applicant for an entry permit 'has' the status of refugee is a reference to a contemporaneous determination rather than to some past determination that the applicant had the 'status of refugee' at the time when that past determination was made." The Minister submitted that the cited passage in Mayer stood for a proposition similar to Chan. Because it was necessary for a person to meet the requirements at the time of the grant, the question to be asked would at all times be the same. It would be so irrespective of whether the person had previously been recognised as a "refugee" or not. The question would always be whether or not the person was a "refugee" within the meaning of the Convention at the time of the applicable decision. in circumstances similar Neither of the cited decisions constitutes a binding determination of the issue that must now be decided. This Court has not previously decided the the present case. application of art 1C(5) Specifically, this Court has not decided a cessation claim in circumstances where a person has previously applied for, and been granted, recognition as a "refugee", thereby having an entitlement to Australia's protection. Both Mayer and Chan dealt with claims under art 1A(2), rather than under art 1C(5). The applicants in those cases, unlike QAAH, had not previously been recognised as "refugees"92. Any observations made by judges of this Court in the earlier authorities must be read in the light of the different issues then under consideration. Although the earlier remarks must be read with respect for any assumptions that they express, they do not bind us in concluding the issue that now falls for determination. The language and structure of art 1: Accepting that Australian law requires recourse to the Convention, specifically art 1, it is necessary to consider closely the language and structure of that provision. Observations drawn from the language and structure of art 1 are persuasive considerations against the "symmetrical" approach advocated by the Minister. Article 1 relevantly provides: For the purposes of the present Convention, the term "refugee", shall apply to any person who: 91 Mayer (1985) 157 CLR 290 at 302. 92 QAAH (2005) 145 FCR 363 at 383 [70] per Wilcox J. Kirby (2) As a result of events occurring before I January 1951 and owing to well-founded fear of being persecuted for reasons of race, religion, nationality, membership of a particular social group or political opinion, is outside the country of his nationality and is unable or, owing to such fear, is unwilling to avail himself of the protection of that country; or who, not having a nationality and being outside the country of his former habitual residence as a result of such events, is unable or, owing to such fear, is unwilling to return to it. In the case of a person who has more than one nationality, the term 'the country of his nationality' shall mean each of the countries of which he is a national, and a person shall not be deemed to be lacking the protection of the country of his nationality if, without any valid reason based on well- founded fear, he has not availed himself of the protection of one of the countries of which he is a national. C. This Convention shall cease to apply to any person falling under the terms of section A if: (5) He can no longer, because the circumstances in connection with which he has been recognized as a refugee have ceased to exist, continue to refuse to avail himself of the protection of the country of his nationality; Provided that this paragraph shall not apply to a refugee falling under section A (1) of this article who is able to reasons arising out of previous invoke compelling persecution for refusing to avail himself of the protection of the country of nationality; Observations on art 1: Several features of art 1 should be noticed. First, the provision establishes a process by which a person becomes "recognized" as a refugee. In using the language of "recognition", rather than "rendering", "becoming" or "constituting", the article connotes a process whereby a person, who already is a refugee, gains formal "recognition" as such within the country of refuge. Recognition does not render a person a "refugee". It simply Kirby recognises the status as one that preceded the recognition. This is why the process is commonly described as merely "declaratory"93. Secondly, having established the process of "recognition", the article assumes that the cessation clauses contained in art 1C of the Convention will only apply to a person who has been "recognised" as a refugee in accordance with art 1A. Indeed art 1C assumes that the person in question has previously been found to "fall[] under section A", and (in respect of art 1C(5) specifically) that he or she has previously been "recognized as a refugee". Because art 1C(5) presupposes the earlier "recognition" of a person under art 1A(2), the language of art 1C(5), on its face, can have no application to a person who has not already been "recognized as a refugee" under art 1A(2). Thirdly, art 1C(5) speaks of two discrete functions or processes. The first, as I have explained, is "recognition". The second is "protection"94. Because art 1C(5) applies to a person who has been "recognized" as a refugee, and who can no longer continue to refuse to avail himself or herself of the protection of the country of nationality, "recognition" is said to be a function of the Convention; and "protection", a function of municipal law (in the case of Australia, of the Act)95. Separate and distinct tests required: This analysis of the language and structure of art 1 indicates that what was intended was a two-stage approach to arts 1A(2) and 1C(5). The provisions contemplate two separate inquiries, by inference occurring at different times. The first, performed in accordance with art 1A(2) of the Convention, involves a determination of an applicant's "refugee" status. The question at that stage, the answer to which is merely "declaratory"96, is whether or not the applicant is to be recognised as a refugee. To this status determination, the language of art 1C(5) adds an additional, distinct and subsequent process. It does so because it presupposes that 93 UNHCR, Refugee Status Determination: Identifying who is a refugee, (2005) at 4, 18. Before this Court, the Minister stated that she did not contest this conclusion. However, she submitted a qualification to this concession, to the effect that the recognition was declaratory only "as at a point in time" of the applicable assessment: [2006] HCATrans 340 at 86. 94 O'Sullivan, "Before The High Court: Minister for Immigration and Multicultural and Indigenous Affairs v QAAH: Cessation of Refugee Status", (2006) 28 Sydney Law Review 359 at 361. 95 QAAH (2005) 145 FCR 363 at 386 [83]. 96 These reasons above at [96]. Kirby "recognition" as a refugee has already happened. But, as explained97, this can only have occurred under art 1A(2). The words "circumstances in connexion with which he has been recognized as a refugee" are relatively clear. They indicate that the person concerned "has been recognized as a refugee". Had the drafters instead used the words, "became a refugee" or "was a refugee", perhaps art 1C(5) could be taken to apply, like art 1A(2), to a person who is a refugee but who has not yet been recognised as such98. However, in this important respect, the language of the two sections, and the lines of inquiry they each prescribe, differ. Upon this analysis, art 1C(5) of the Convention cannot apply to a person who has not previously been recognised as a refugee99. Nor can art 1A(2) apply to a person who has already been so recognised. It follows that the approach to the grant of "refugee" status under art 1A(2) cannot "mirror" or be "symmetrical to" the approach to cessation of refugee status under art 1C(5). The language of the Convention, its structure and apparent scheme, deny such an interpretation. That art 1 of the Convention contemplates separate and distinct tests is confirmed by UNHCR in its Handbook100. The two-stage approach was also recently affirmed by the Roundtable Meeting of Experts on the operation of the The summary Convention, convened by UNHCR in Lisbon, Portugal. conclusions of that meeting state that "[i]n principle, refugee status determination and cessation procedures should be seen as separate and distinct processes, and should not be confused"101. I agree with, and adopt, the opinion of the international experts. Their opinion and conclusions adopt the correct interpretation of the Convention. It is the scheme of refugee status to which, by its ratification of that treaty, Australia has agreed, and which, by s 36(2) of the Act102, the Parliament has accepted and incorporated into Australian law. 97 These reasons above at [97]-[98]. 98 See comments of Lord Brown of Eaton-under-Heywood in R (Hoxha) v Special Adjudicator [2005] 1 WLR 1063 at 1082 [61]-[62]; [2005] 4 All ER 580 at 601. 99 cf Adan v Secretary of State for the Home Department [1999] 1 AC 293 at 302. 101 UNHCR Expert Roundtable, "Summary Conclusions: Cessation of Refugee Status", in Feller, TΓΌrk & Nicholson (eds), Refugee Protection in International Law, UNHCRβs Global Consultations on International Protection, (2003) 545 at 102 These reasons above at [65]-[72]. Kirby To the foregoing considerations, I would add an obvious point arising from the structure of art 1 of the Convention itself. The inclusion of two separate provisions within art 1 points against the creation of "symmetrical" or "identical" tests for recognition and cessation of "refugee" status for the purpose of the Convention. Had the drafters of the Convention intended, as the Minister submits, that a single test applies, it is reasonable to ask why they would have included in art 1 a separate and additional section dealing with cessation, framed in relevantly different terms. As QAAH argued, if the approach to the meaning of the Convention contended for by the Minister were given effect, the cessation provision contained in art 1C(5) would be effectively superfluous. It would have no purpose or meaning additional to that of art 1A(2). Whilst not conclusive, this last consideration, when taken with those already mentioned, convinces me that this Court should accept the meaning of the Convention explained in the UNHCR Handbook. That meaning is reinforced by the recent opinion of international experts. Moreover, it is expressed in the language of art 1 of the Convention itself. To the extent that the Minister submitted to the contrary, I would reject her submission. Refugee status coming and going? The difficulty with the Minister's approach to the Act and the Convention is compounded by her submission that "refugee" status can "come and go"103. This view conflates the discrete concepts of recognition and protection104. Because recognition is an action distinct from the protection, unless cessation occurs, a person may, notwithstanding withdrawal of protection105, nonetheless remain recognised as a "refugee" within the terms of the Convention. Speaking specifically of art 1C(5), a person may remain so recognised unless and until the circumstances in connection with which he or she was recognised as a "refugee" in the first place cease to exist. This would be so notwithstanding any periodic lapse or renewal, or non-renewal, of national temporary protection visas106, because the Convention does not establish a system of "temporary recognition". In this light, as Allsop J correctly for Immigration and Multicultural and in NBGM v Minister explained Indigenous Affairs107, the Minister's approach: 103 [2006] HCATrans 339 at 24. 104 These reasons above at [98]. 105 See, eg, Pt 2, Div 1, Subdivs C, D, E, F, G, GA, GC of the Migration Act. 106 Especially is this so when a visa expires or is cancelled for reasons unrelated to ceased circumstances. 107 (2006) 150 FCR 522 at 572 [201]. Kirby "β¦ requires something contrary to the operation of the Convention: the lapsing of recognition of the applicant as a refugee, and the requirement upon the applicant to reassert a claim for recognition as a refugee under [art 1]A(2), absent the operation of the cessation provisions in [art 1]C. Not only is that contrary to the Convention, it is inconsistent with the clear requirement of the Regulations themselves which is to assess whether Australia has protection obligations under the Convention (properly interpreted)." I agree with Allsop J's analysis. In my view, both as a matter of international and municipal law, it is correct. In confirmation, in its official documentation, the UNHCR has repeatedly stated that the list of cessation grounds in art 1C of the Convention is exhaustive. If it were accepted that recognition as a "refugee" under the Convention could lapse in accordance with the lapse of national protection, all of the instances in the Act in which protection visas may lapse or be cancelled would, of necessity, effectively become additional cessation grounds. By the text of the Convention, this is not the case and it may not be so. The introduction by individual State parties of additional cessation grounds into the exhaustive list contained in art 1C of the Convention is a legally impermissible course108. Consequences of the distinction: The significance of the distinction between recognition and protection is that, at the time when cessation proceedings are commenced, a person who has previously been recognised as a "refugee" is still recognised as a refugee under the Convention. This is so whether or not he or she still has an Australian protection visa. Therefore, the answer to the question under art 1A(2) of the Convention will necessarily be in the affirmative. The person will still have an established well-founded fear of persecution for a Convention reason. Under the Convention, this fact can be displaced once an available ground of cessation is made out. However, at the commencement of any cessation proceedings, the applicant is still a "refugee" for Convention purposes and hence for the purposes of the Act. A de novo inquiry under art 1A(2) is therefore redundant. Only by ignoring or misstating the significance of the distinction between recognition and protection could a de novo inquiry produce anything other than a legally irrelevant outcome. The Minister's so-called "symmetrical" approach fails to appreciate this distinction. Consequences for the Tribunal's decision: If, in the present case, the Tribunal had conducted the inquiry required under s 36(2) of the Act, it would have concluded that QAAH, a person already recognised as a "refugee" within the terms of art 1 of the Convention and s 36 of the Act, upon whose status the cessation provisions had not yet operated, was a person to whom "Australia has 108 cf UNHCR Guidelines at 5-6 [18]; UNHCR Handbook at [24]. Kirby protection obligations under the β¦ Convention". This conclusion could have been displaced had one of the cessation provisions operated against him. However, because cessation was not considered, the correct answer to an art 1A(2) inquiry would have been that QAAH was a "refugee", because he had already been recognised as such by a State party to the Convention and no consideration had yet been given to whether cessation, within the terms of the Convention, had been established. To the extent that the Minister's delegate and the Tribunal approached the task required by the Act differently, they erred in law. To the extent that the primary judge failed to perceive that error as an error of jurisdiction, by which the administrators asked themselves the wrong question, he too erred. The Full Court majority were correct to detect that error and to provide relief against it. The extent of change issue Implication of fundamental change: Accepting, as I do, that the two provisions contained in art 1 of the Convention require the decision-maker to conduct distinct inquiries, what is the appropriate test to be applied in individual cases where cessation is alleged to have occurred? The test for recognition with respect to art 1A(2) is accepted: whether or not the person has a well-founded fear of persecution for a Convention reason. But what does the cessation provision in the Convention require? How, conformably with the Convention, is the Minister to satisfy herself that conditions that formerly sustained an affirmative determination of "refugee" status have ceased to exist? QAAH submitted that not all changes in country circumstances would meet the requirements of art 1C(5) of the Convention or sustain a conclusion of cessation of "refugee" status. What was required was a "fundamental", "stable" and "durable" change in conditions. In the joint reasons, it is said that the words "fundamental", "stable" and "durable" have no textual basis either in the Convention or in the Act; and that the language, which has been drawn from the UNHCR Guidelines on cessation, could only be useful in determining the refugee status of an entire population, not the status of individuals. In this respect, the joint reasons effectively adopt the Minister's submissions. I disagree with their conclusion. Significance of the decision: At the outset, it is important to recognise, as Lord Brown of Eaton-under-Heywood did in R (Hoxha) v Special Adjudicator, that art 1C(5) of the Convention is "calculated, if invoked, to redound to the refugee's disadvantage, not his benefit"109. If successfully invoked, that provision will have the effect of removing the substantial rights and entitlements that 109 [2005] 1 WLR 1063 at 1082 [63]; [2005] 4 All ER 580 at 601. Kirby otherwise flow in international and national law from recognition as a "refugee", entitled to protection from State parties to the Convention110. Such serious, and in some cases life-threatening, consequences would not ordinarily be visited upon a person without strong and persuasive reasons justifying that course. A construction that would allow a change in circumstances to be construed too broadly does not evince a precautionary attitude on the part of a decision-maker whose decision potentially poses grave consequences for the subject of the decision. To say this is to say no more than is obvious and inherent in the language, structure and purpose of the Convention. Self- evidently, taking away a protection status that is contingent on a person's qualifying as a "refugee" within the Convention, is a very serious step. For that step to be taken, the Convention provides criteria. They are expressed in the language of art 1C(5) dealing with cessation. According to the language of art 1C(5) it is not any change in country circumstances that will justify taking the step contemplated. The cessation provision is expressed negatively and exhaustively. According to ordinary principles of construction, it should be interpreted restrictively111. This means narrowly, that is, the clauses should not be taken to apply too easily. Reasons for this approach are convincingly explained in the UNHCR Handbook112: "'Circumstances' [in art 1C(5)] refer to fundamental changes in the country, which can be assumed to remove the basis of the fear of persecution. A mere β possibly transitory β change in the facts surrounding the individual refugee's fear, which does not entail such major changes of circumstances, is not sufficient to make this clause applicable. A refugee's status should not in principle be subject to frequent review to the detriment of his sense of security, which international protection is intended to provide." The language of art 1C(5): The language of art 1C(5) of the Convention makes it plain that for any change to be within that article it should be such that it goes to the root of "the circumstances in connexion with which [the applicant] has been recognized as a refugee". It must be such that the person "can no longer 110 These include rights relating to housing (art 21), social security (art 24) and gainful employment (Ch III). 111 UNHCR Handbook at [115]-[116]; cf UNHCR Executive Committee Conclusion No 69 (XLIII) (1992). 112 UNHCR Handbook at [135]. Kirby β¦ continue to refuse to avail himself of the protection of the country of nationality". I agree with QAAH's submissions113: "β¦ [T]he inquiry in [art 1]C(5) is not simply about whether circumstances have ceased to exist. That is the pointy end of it. The inquiry is whether a person can no longer continue to refuse to avail himself of protection of that country because the [entitling] circumstances have ceased to exist β¦ [T]hat is why transitory false dawns β¦ in the violent or political nature of the country from which refuge has been sought will usually not suffice." Resolution of the issue presented by art 1C(5) of the Convention must therefore focus upon the extent of the change in circumstances in a person's country of nationality, such that it can be said that the circumstances that previously gave rise to recognition of the person as a refugee have ceased. Only then may that person continue to refuse to avail himself or herself of the protection of the country of nationality. If the language of art 1C(5) of the Convention posited only a "change in circumstances", perhaps temporary, slight or superficial changes would satisfy the cessation test. However, the language and purpose of the article stand against that interpretation. As Professor Goodwin-Gill explains, the Convention requires a decision-maker to ask whether "the nature of the changes [is] such that it is more likely than not that the pre-existing basis for fear of persecution has been removed"114. Temporary, superficial, insubstantial or ineffective changes will not satisfy this test. This is why the Guidelines and other publications of UNHCR indicate that a decision-maker must consider whether the suggested change in circumstances is "fundamental"115, "stable"116 and "durable"117: 113 [2006] HCATrans 340 at 63. 114 Goodwin-Gill, The Refugee in International Law, 2nd ed, (1996) at 87. 115 UNHCR Handbook at [135]. 116 UNHCR, Interpreting Article 1 of the 1951 Convention Relating to the Status of Refugees, (2001) at 14 [54] (footnote omitted). 117 UNHCR, Interpreting Article 1 of the 1951 Convention Relating to the Status of Refugees, (2001) at 14 [54]; cf UNHCR Executive Committee Conclusions No 29 (XXXIV) (1983); No 50 (XXXIX) (1988); No 58 (XL) (1989); No 79 (XLVII) (1996); No 81 (XLVIII) (1997); No 85 (XLIX) (1998); No 87 (L) (1999); No 89 (L) (2000); and No 90 (LII) (2001); UNHCR, Interpreting Article 1 of the 1951 Convention Relating to the Status of Refugees, (2001) at 14 [54]. Kirby "Cessation of refugee status may be understood as, essentially, the mirror of the reasons for granting such status found in the inclusion elements of Article 1A(2). When those reasons disappear, in most cases so too will the need for international protection. Recognising this link, and exploiting it to understand whether the changes in circumstance are relevant and fundamental to the causes of flight, will serve to elucidate circumstances which should lead to cessation of status. This is particularly important with respect to individual cessation." To similar effect, the UNHCR Executive Committee conclusions on the subject of cessation state118: "β¦ [T]he possibility of use of the cessation clauses β¦ in situations where a change of circumstances in a country is of such a profound and enduring nature that refugees from that country no longer require international protection, and can no longer continue to refuse to avail themselves of the protection of their country". Principle of non-refoulement: It is true that the words "fundamental", "stable" and "durable" do not, as such, appear in the Convention. But they are entirely appropriate to the context of cessation proceedings, including the serious step of taking away from a person recognition as an internationally protected "refugee". In the Full Court in NBGM, the same idea was explained by reference to the need for "demonstration, with clarity, of the lasting nature of the changes in circumstances", which necessarily follows from the "gravity and likely permanence of the consequences of applying [art 1C(5)] against the person hitherto recognised as a refugee"119. In effect, such requirements are inextricably linked, and reinforced by, the duty of non-refoulement, expressed as one of the central objectives of the Convention120. Where a change in circumstances is slight, impermanent, 118 UNHCR Executive Committee Conclusions No 65 (XL11) (1991); No 69 (XLIII) (1992) ("Cessation of Status") (emphasis added). 119 NBGM (2006) 150 FCR 522 at 567 [172] per Allsop J; cf Hoxha [2005] 1 WLR 1063 at 1083 [65]; [2005] 4 All ER 580 at 601-602. 120 The duty is supported by international treaties prohibiting torture and inhuman and degrading treatment, including art 3 of the Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment, opened for signature 10 December 1984, 1465 UNTS 85; 1989 ATS 21 (entered into force 26 June 1987); and arts 7 and 17 of the International Covenant on Civil and Political Rights, opened for signature 16 December 1966, 999 UNTS 171; 1980 ATS 23 (entered into force 23 March 1976). Kirby insubstantial or ineffective, a State party will run the risk of returning a person to a place where he or she may face persecution upon return. That risk is one against which the Convention has set its face. UNHCR has explained121: "[C]essation practices should be developed in a manner consistent with the goal of durable solutions. Cessation should not result in persons being compelled to return to a volatile situation, as this would undermine the likelihood of a durable solution and could also cause additional or renewed instability in an otherwise improving situation." The test which the Minister advocates, now endorsed in the joint reasons in this Court122, places no real qualifications on the substantiality, effectiveness or temporariness of the purported change in circumstances of the country of nationality. Yet by definition, these circumstances were earlier such that the person concerned was found to have a "well-founded fear of being persecuted" because of them, and was in need of protection from a country of refuge upon a Convention ground. The adoption of such insubstantial criteria risks departure from Australia's duty of non-refoulement. It is contrary to the language and purpose of the Convention to which the Act, by s 36(2), has given effect as part of Australian law. Conclusion: requirement of significant change: It follows that when the test in art 1C(5) of the Convention is applied, the decision-maker is obliged to consider whether any purported change in circumstances of the country of nationality is fundamental, stable and durable. Before cessation can be said to have occurred, conditions in the country of nationality must have changed in a significant and enduring way. Anything less would not comply with the language and purpose of the applicable law. The fourth issue should be decided against the Minister. The "burden of proof" issue The suggested error of the Full Court: Having concluded that separate tests exist in respect of arts 1A(2) and 1C(5) of the Convention; and that a decision-maker considering the art 1C(5) test must decide whether any purported changes are fundamental, stable and durable in order to sustain a conclusion that "refugee" status, once accepted, has ceased in accordance with the Convention, it is now necessary to consider the fifth issue. This is whether the Full Court erred 121 UNHCR, Considerations Relating to Cessation on the Basis of Article 1C(5) of the 1951 Convention With Regard to Afghan Refugees and Persons Determined in Need of International Protection, (2005) at 1. 122 Joint reasons at [39]. Kirby in suggesting (if it did) that the Minister bears a burden of proving cessation in the sense explained. The Minister argued that neither the Convention nor the Act imposes a burden of proof on the Minister in undertaking a review of a decision not to grant a permanent protection visa. The Minister relied on the language of art 1 of the Convention, which, it was argued, says nothing about the determination process by which a person gains recognition as a "refugee" or any consequent entitlement of that person to Australia's protection. Upon this basis, the Minister submitted that, if any burden of proof were to arise, it could only do so in accordance with municipal law; and that nothing in the Act or any other Australian law imposed a requirement on the Minister to accept any burden of proof in applying art 1 of the Convention to the facts of a case like the present. The Court was referred to comments in Abebe and other cases, in which the general inquisitorial character of proceedings before the Tribunal was described123. That authority was said to stand for the proposition that no burden of proof could be applied in such proceedings, whether upon the Minister, the applicant, or anyone else. The Minister's submission in this respect is accepted in the joint reasons124. Although those reasons agree that, in some cases, the Minister's delegate or the applicant will have a greater capacity to provide evidence or information about country conditions, they conclude that this does not warrant imposing a "burden" on either party in the context of cessation proceedings125. For this reason, the joint reasons reject the approach of the majority in the Full Court. No burden of proof was assigned: On my reading of the reasons of the majority in the Full Court, their Honours did not express a view that there is a burden of proof "resting on a State that contends that a person who has been recognised as a refugee has ceased to have that status"126. In citing those words, Wilcox J was merely referring to comments made by Lord Brown in Hoxha to that effect. Both judges in the majority in the Full Court would have been fully aware of the repeated indication by this Court that proceedings before the Tribunal are generally inquisitorial in character. Thus, Wilcox J explicitly acknowledged that "in a technical sense, no burden of proof rests on any party in 123 Abebe v The Commonwealth (1999) 197 CLR 510 at 576 [187]; Re Refugee Review Tribunal; Ex Parte Aala (2000) 204 CLR 82 at 115 [76]. 124 Joint reasons at [46]. 125 Joint reasons at [40]. 126 Appellant's Outline of Submissions at 6 [13]. Kirby relation to review of an administrative decision"127. This was a correct statement. The majority below did not make the error which the Minister asserted in this Court and which the majority in this Court have now accepted. The necessity of distinct persuasion: Lord Brown's statement was both understandable and correct in the context of the operation of the Convention as it applies in England. That a person who asserts a relevant change in circumstances must establish such a change in some appropriate way, if it is disputed, is an unremarkable proposition. It is supported in this context both by UNHCR material and by the majority of academic opinion on the interpretation of art 1C(5) of the Convention. UNHCR has repeatedly stated that, when government decision-makers are seeking to apply the cessation clause to a refugee, "the onus is on them to establish the reasons justifying exclusion or cessation"128. The UNHCR Lisbon Roundtable Meeting of Experts on the Convention has also held that "the asylum authorities should bear the burden of proof that such changes are indeed fundamental and durable"129. In the context of art 1C(5) of the Convention, the Australian Department of Immigration and Multicultural and Indigenous Affairs has itself accepted the stated principle in terms that are virtually identical to those used by Lord Brown in Hoxha. It accepted that, in proceedings relating to art 1C(5) and (6) of the Convention, "[t]he burden of proof should be on the authorities concerned, not the refugee"130. Leading scholars have repeatedly made the same point. Professor Goodwin-Gill, for instance, states that where the State seeks to show that a previously recognised refugee should no longer be considered a refugee, the burden is on that State, and the standard of proof is on the balance of probabilities131. Professor Fitzpatrick similarly states that the burden of proof in 127 QAAH (2005) 145 FCR 363 at 383 [69]. 128 UNHCR, Interpreting Article 1 of the 1951 Convention relating to the Status of Refugees, (2001) at 3 [10]. 129 UNHCR Expert Roundtable, "Summary Conclusions: cessation of refugee status", in Feller, TΓΌrk & Nicholson (eds), Refugee Protection in International Law, UNHCRβs Global Consultations on International Protection, (2003) 545 at 550 130 Department of Immigration, Multicultural and Indigenous Affairs, "The Cessation Clauses (Article 1C): An Australian Perspective", paper delivered to the UNHCR's Expert Roundtable Series, October 2001 at 16. 131 Goodwin-Gill, The Refugee in International Law, 2nd ed (1996) at 87 (emphasis added). Kirby relation to the application of changed circumstances "rests with the asylum State authorities"132. State practice on persuasion of change: Available State practice on the application of art 1C(5) of the Convention β whilst limited β also appears to accord with this interpretation of the Convention. Thus, in the United States, s 208(c)(2)(A) of the Immigration and Nationality Act 1952 (US) provides that the Attorney-General may terminate a grant of asylum if he or she determines that the refugee no longer meets the definition of refugee in the Act "owing to a fundamental change in circumstances"133. According to the United States Immigration Regulations, where an applicant has demonstrated past persecution, the decision-maker bears the evidential burden of establishing "by a preponderance of the evidence" that there has been a relevant change in circumstances134. In Canada, the Immigration and Refugee Protection Act 2001 (Can) also reflects cessation principles similar to those contained in art 1C of the Convention. Section 108 of that Act sets out the procedure for cessation. Importantly, it authorises consideration of cessation by the Canadian Refugee Protection Division only upon the Minister's application. Canadian jurisprudence indicates that it is the person who asserts a change of circumstances who bears the burden of proof in relation to changed circumstances. In the Canadian case of Mahmoud v Canada (Minister for Employment and Immigration)135, Nadon J held that, where the Minister seeks a determination that a person's refugee status has ceased the "burden of proof" rests with the Minister136. 132 Fitzpatrick and Bonoan, "Cessation of refugee protection", in Feller, TΓΌrk & Nicholson (eds), Refugee Protection in International Law, UNHCRβs Global Consultations on International Protection, (2003) 491 at 515. 133 1952 8 USC 1158. 134 US Code of Federal Regulations, 8 CFR (revised as of 1 January 2006), s 208.13(b)(1)(ii). 135 Mahmoud v Canada (Minister for Employment and Immigration) (1994) 69 FTR 136 Mahmoud v Canada (Minister for Employment and Immigration) (1994) 69 FTR 100 at 109 [43], quoting with approval Waldman, Immigration Law and Practice, vol 1, (1992) at [8.35]-[8.40]; cf Fitzpatrick and Bonoan, "Cessation of refugee protection", in Feller, TΓΌrk & Nicholson (eds), Refugee Protection in International Law, UNHCRβs Global Consultations on International Protection, (2003) 491 at 515, citing Goodwin-Gill, The Refugee in International Law, 2nd ed (1996) at 87; [2005] 4 All ER 580 at 602. Kirby In the United Kingdom, policy documents relating to cessation reflect language similar to that used by Lord Brown137, cited by Wilcox J. The documents state that138: "Withdrawing an individual's refugee status, curtailing their refugee leave, and/or refusing their application for a further grant of leave on the basis of their refugee status are important decisions. The burden of proof is on [the Department] to show that a person is no longer eligible for refugee status and clear evidence will be required to justify that decision." Apart from the statements of Lord Brown in Hoxha139, the English Court of Appeal in Arif v Secretary of State for the Home Department held that the burden of proof in respect of the cessation clause rested upon the Home Secretary140: "The sentence I would particularly emphasise there is 'proof that the circumstances have ceased to exist would fall upon the receiving state'. It is true that because of the notoriously long delays which attend our system of asylum hearings the appellant here was never granted refugee status β¦ It nevertheless seems to me that by analogy β¦ there is now an evidential burden on the Secretary of State to establish that this appellant could safely be returned home." Administrative law analogies: Very serious consequences may flow from the withdrawal of recognition of a person as a "refugee", after that recognition has been accorded. Therefore, as UNHCR argued in its written submissions in this Court, "a determination of applicability of ceased circumstances [cessation must involve] a formal process, as formal at least as the granting of refugee status". This proposition is not dissimilar to the requirements of the rules of natural justice in Australian administrative law. Indeed, it only really amounts to common sense and basic fairness. The more serious the consequences for a person the subject of an administrative decision, the more rigorously the rules of 137 Hoxha [2005] 1 WLR 1063 at 1083 [66]; [2005] 4 All ER 580; cf Saad, Diriye and Osorio v Secretary of State for the Home Department [2001] EWCA Civ 2008 at [54]-[55]; Arif v Secretary of State for the Home Department [1999] INLR 327. 138 United Kingdom Home Office, Immigration & Nationality Directorate, Asylum Policy Instruction (API) on Refugee Leave, (2006) at 4. 139 Hoxha [2005] 1 WLR 1063. 140 [1999] IAR 271 at 276, quoted in Dyli v Secretary of State for the Home Department [2000] UKIAT 00001. Kirby procedural fairness will usually be applied141. This is why, in some administrative law proceedings, applicants engaged in what is otherwise a process inquisitorial in its general character have been afforded the opportunity to cross-examine important witnesses142; or to have legal representation in particular circumstances143. In relation to the "character" test144, which forms the basis of a visa cancellation in Australia, the Minister invariably accepts a forensic burden of establishing the disqualifying element. Why should it be different in this case? Distinction between legal and forensic burdens: There are several difficulties with the appellant's reliance on Abebe145 to contradict the foregoing propositions of legal principle. First, Abebe dealt with the recognition of "refugee" status under art 1A(2) of the Convention. It did not deal with cessation. It did not therefore address the meaning and application of art 1C(5). The comments of the majority in Abebe merely indicate that a party before the Tribunal does not bear a legal burden of proving that party's contentions. This is because the procedures of the Tribunal are inquisitorial in character, not adversarial. So much is not contested in this appeal. In fact, the comments of Gummow and Hayne JJ in Abebe, referred to by the Minister, acknowledge that it is for the party propounding a contention to "advance whatever evidence or argument"146 it wishes in support of that contention, and, in accordance with the requirements of the inquisitorial process, it is then for the Tribunal to decide whether or not the proposition is established. 141 The content of procedural fairness rules is flexible, and will vary depending on the circumstances of the case: Russell v Duke of Norfolk [1949] 1 All ER 109 at 118; Kioa v West (1985) 159 CLR 550 at 584. Regarding the standards applicable in cessation proceedings, see UNHCR Handbook at [25]; UNHCR Executive Committee Conclusion No 69 (XLIII) (1992). 142 Harrison v Pattison (1987) 14 ALD 570; Mayor, Councillors and Citizens of the City of Brighton v Selpam Pty Ltd [1987] VR 54; R v King; Ex parte Westfield Corporation (Victoria) Ltd (1981) 64 LGRA 28. 143 R v Board of Appeal; Ex parte Kay (1916) 22 CLR 183; McNab v Auburn Soccer Sports Club Ltd [1975] 1 NSWLR 54 at 60-61. 144 The Act, s 501E. 145 (1999) 197 CLR 510. 146 Abebe v The Commonwealth (1999) 197 CLR 510 at 576 [187]. Kirby In an inquisitorial tribunal, the legal burden of proof typical of an adversarial trial may be missing. However, the forensic context still reflects the reality of a decision-making process. If a party that could be expected to present material in support of its case fails to do so, that party cannot then complain if the decision-maker decides that a basis for the relief claimed has not been established. A forensic burden could sometimes present procedural difficulties, particularly in the many cases where the Minister or her delegate are not present at Tribunal hearings. However, in my view, this difficulty could be resolved in the usual way. Where necessary, the Tribunal may request that additional material be provided in support of the contested matter or resolve the issue on the basis that the suggested "cessation" has not been demonstrated in a convincing way. As this Court knows from many cases, applications often fail before the Tribunal because of the failure of the applicant to adduce proof of the matters asserted. The point in the present case is that, to establish cessation of a continued entitlement to the status of "refugee", previously granted, both under the Act and the Convention, a forensic obligation will rest with those who contend that this is so. Normally this will be officers of the Minister's department who have convinced the Minister's delegate of a change of circumstances in the country of nationality. This conclusion is not inconsistent with the general inquisitorial character of the Tribunal. Nor does it question the fact that a burden of proof in the strict legal sense is not imposed on the Tribunal, the Minister, her delegate or a refugee. The comments in Abebe do not furnish support for the Minister's approach to this issue in the appeal. The correct approach for the Tribunal: Accepting that no legal burden of proof applies to cessation or any other proceedings before the Tribunal, a question remains concerning the approach that the Tribunal should take in accordance with art 1C(5) of the Convention in cases where the evidence is ultimately limited or inconclusive. Of their nature, cessation proceedings often necessitate up-to-date information about conditions in remote parts of strife-torn countries, many of them far from Australia. It is not always possible to obtain substantial, current, objective information about the prevailing conditions. It is quite common for the material on such a point to be inconclusive and imperfect. How then, in practice, should the Tribunal approach such a situation? The answer to this question is not "technically" to apply notions of a legal burden of proof. Instead, the answer relates to "the measure and nature of the task"147; or the proper question to be asked. Alternatively, as Wilcox J put it in the Full Court, "it matters to the parties which one of them fails if the evidence is 147 NBGM (2006) 150 FCR 522 at 569 [183] per Allsop J. Kirby inconclusive"148. The question is thus whether, in the absence of convincing material, a change in country conditions, sufficient to terminate a person's refugee status under the Convention, is to be assumed or readily taken as established. Whether one explains the process as Lord Brown did in Hoxha, that a recognised refugee should not be stripped of that status "save for demonstrably good and sufficient reason"149; or, as UNHCR does, that "a practical or evidential burden of proof lies with the asylum State authorities"150, the outcome is the same. Even if, in Australia, it is not appropriate to speak of a legal "burden of proof" in this context, what is still required is a rigorous satisfaction of the circumstances warranting the decision-maker's taking a step so potentially serious for the person affected. Wilcox J explained why a "confident finding" about the applicability of cessation must occur for changed circumstances to be upheld151: "[A]n acceptable art 1C(5) decision could not be based on an absence of information about problems; there would have to be positive information demonstrating a settled and durable situation in that district that was incompatible with a real chance of future Taliban persecution of the appellant". to attract art 1C(5). Conclusion: No error in Full Court: It follows from this analysis that the Minister does not bear a legal burden of proving a requisite change in However, as a matter of forensic circumstances practicalities, the Minister's officials will usually be obliged to furnish affirmative evidence of a propounded change. The Minister's proposition to the contrary in this appeal would effectively postulate a presumption in favour of cessation, simply because it was asserted. It would impose upon the person already recognised as a "refugee" an effective burden of negating any suggested change in circumstances. That course would not conform to the requirements of the Tribunal's inquisitorial character any more than would the imposition of a legal burden upon the Minister. The fifth issue should therefore, likewise, be decided against the Minister. 148 QAAH (2005) 145 FCR 363 at 383 [69]. 149 R (Hoxha) v Special Adjudicator [2005] 1 WLR 1063 at 1082 at 1083 [65]; [2005] 4 All ER 580 at 601. 150 UNHCR Submissions at [29]. 151 QAAH (2005) 145 FCR 363 at 385 [78] per Wilcox J (emphasis added). Kirby The Tribunal decision issue Finally, I agree with the majority of the Full Court that the Tribunal needed to be satisfied of more than the simple fact that the Taliban were unlikely to re-emerge as a governing authority, or that the Taliban were unlikely to exercise control of the same nature or scale as they did in 1999. The Tribunal would need to make informed findings about, "the extent of Taliban activity in the Afghan countryside, especially in the appellant's home district"152. It would then have to consider whether any changes so found amounted to enduring and significant ones. This the Tribunal failed to do. The requirement that the Tribunal re-hear the application is neither futile nor pointless. Far from it. Doing so vindicates the correct exercise of the Tribunal's jurisdiction. Moreover, a correct examination of the evidence by the application of the proper legal test could result in a decision favourable to QAAH. This is an answer to the sixth issue, which was raised defensively by the Minister. The majority have concluded that (however unnecessarily in their view) the Tribunal ultimately reached an opinion of the kind that QAAH says it was required to reach153. I disagree. The Tribunal asked the wrong question. Unsurprisingly, it gave an imperfect answer. Conclusions and order Conclusion in the appeal: The Act incorporates the elements of the definition of "refugee" contained in the Convention. To that extent, by specific reference, the Convention has been made part of Australian domestic law. In accordance with the Act, QAAH was duly recognised as a "refugee". He received a protection visa. There is no place in the Convention scheme for temporary, partial or provisional recognition of refugee status. QAAH thus enjoys "refugee" status under the Convention and also under the Act, whatever protection Australia has contingently given him from time to time under its temporary visa system. The temporary and permanent visas established by the Act cannot alter, unilaterally, the language and requirements of the Convention that forms part of Australian law. Specifically, they cannot change the provisions and structure of the Convention insofar as it provides for the cessation of "refugee" status, once that status has been accepted in the case of a person claiming surrogate protection from a country of refuge. Cessation of such status, once granted, is governed by 152 QAAH (2005) 145 FCR 363 at 384 [74] per Wilcox J. 153 Joint reasons at [50]. Kirby art 1C(5) of the Convention. In international and municipal law, there is a strong presumption that a State party to the Convention, which has not renounced obligations under it, complies in its law with the requirements of the Convention. This is the way in which the Act should be read so as to conform to the Convention154. The statutory language is not incompatible with the foregoing features of the Convention. Given the seriousness with which Australia typically complies with its treaty obligations, it would be surprising if there were discord between the Convention and the Act in this or any other respect. The Act should be interpreted as far as possible to avoid such discord and to uphold Australia's obligations under the Convention, freely accepted by the process of ratification and affirmed by the legislative reference to it in s 36(2) of the Act155. Reading the Act in this way, it is both proper and helpful to have regard to UNHCR materials on the intended meaning and operation of the cessation provisions in the Convention. Such materials confirm what the language and apparent purpose of the Convention in any case demonstrate. In order to conclude that cessation of a recognised "refugee" status has been established, a forensic (although, in Australia, not a legal) burden of persuasion rests on whoever suggests a change of circumstances in the refugee's country of nationality. The majority in the Full Court did not mistake or confuse the nature of the proof of such changes. Their Honours were correct to conclude that the Convention language and purpose, imported by the Act, necessitated an affirmative conclusion that conditions had changed. Such demonstration, because of its consequences, will reflect the importance of the decision made. It will require a distinct satisfaction of a fundamental, stable and durable change in the conditions of the country of nationality that occasioned the refugee's flight. Neither the Minister's delegate nor the Tribunal approached their functions in this way. Each was diverted by the temporary visa system applicable under Australian law. It was a fundamental mistake to confuse national protection arrangements with national and international requirements following recognition of a person as a "refugee". The majority in the Full Court were correct to detect this error and to view it as a serious one. It was one that constituted a jurisdictional error on the part of the Tribunal. The Tribunal failed to ask itself 154 cf Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273 at 287; Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1 at 38; Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476 at 492 [29]. 155 Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476 at 492 [29] per Kirby the correct questions. Its answers cannot therefore stand. The matter must be returned to the Tribunal so that it can exercise its jurisdiction correctly, according to law. Order: To give effect to this conclusion, the appeal should be dismissed with costs. |
HIGH COURT OF AUSTRALIA ALO-BRIDGET NAMOA APPELLANT AND THE QUEEN RESPONDENT Namoa v The Queen [2021] HCA 13 Date of Hearing: 11 March 2021 Date of Judgment: 14 April 2021 ORDER Appeal dismissed. On appeal from the Supreme Court of New South Wales Representation G O'L Reynolds SC with R W Haddrick and D P Farinha for the appellant (instructed by Zali Burrows at Law) S J Free SC with T O Prince and B E M Anniwell for the respondent (instructed by Commonwealth Director of Public Prosecutions) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Namoa v The Queen Criminal law (Cth) β Conspiracy β Where s 11.5(1) of Criminal Code (Cth) established offence of conspiracy β Where appellant charged with conspiring to do acts in preparation for terrorist act contrary to ss 11.5(1) and 101.6(1) of Criminal Code β Whether s 11.5 applies to spouses who agree between themselves, and no other person, to commit offence against Commonwealth law β Whether interpretation of s 11.5 of Criminal Code affected by any common law rule that spouses alone cannot conspire β Whether references in s 11.5 of Criminal Code to "person" and "another person" include two spouses β Whether meaning of "conspires" and "conspiracy" in s 11.5 of Criminal Code incorporates any common law rule that spouses alone cannot conspire. Words and phrases β "another person", "common law rule", "conspiracy", "conspires", "doctrine of unity", "person", "single legal personality of spouses". Criminal Code (Cth), s 11.5. KIEFEL CJ. I agree with Gleeson J. I agree with Gleeson J. KEANE J. I agree with Gleeson J. GORDON J. I agree with Gleeson J. EDELMAN J. I agree with Gleeson J. Edelman STEWARD J. I agree with Gleeson J. Gleeson GLEESON J. This appeal concerns the interpretation of s 11.5(1) of the Criminal Code (Cth) ("the Code"), which creates a statutory offence of conspiracy, and whether that offence applies to spouses who agree between themselves, and no other person, to commit an offence against a law of the Commonwealth. The appellant was found guilty by a jury of conspiring to do acts in preparation for a terrorist act contrary to ss 11.5(1) and 101.6(1) of the Code. The offence occurred between 8 December 2015 and 25 January 2016. Prior to the trial, the trial judge rejected an application for a permanent stay which had been made on the basis that the appellant and her co-conspirator married on 30 December 2015 and, as husband and wife, could not be guilty of conspiracy under the Code1. The appellant contends that there is a common law rule that spouses alone cannot conspire; and that this rule affects the meaning of "conspires" and "conspiracy" in s 11.5 of the Code. Although the appellant referred to the rule as an immunity from prosecution in the courts below2, that characterisation was not maintained in this Court. For the following reasons, the proper interpretation of s 11.5(1) is not affected by any such common law rule. The Court of Criminal Appeal of the Supreme Court of New South Wales was correct to conclude that, on the clear language of the Code, a husband and wife are each a "person" and can be guilty of conspiring with each other within the meaning of s 11.53. Accordingly, s 11.5 of the Code applied to the appellant and the appeal must be dismissed. At the relevant time, s 11.5 relevantly provided: "Conspiracy (1) A person who conspires with another person to commit an offence punishable by imprisonment for more than 12 months, or by a fine of 200 penalty units or more, is guilty of the offence of conspiracy to commit that offence and is punishable as if the offence to which the conspiracy relates had been committed. Note: Penalty units are defined in section 4AA of the Crimes Act 1914. 1 R v Bayda [No 3] (2018) 274 A Crim R 1 at 18 [78]-[79] per Fagan J. 2 Namoa v Director of Public Prosecutions (2020) 282 A Crim R 362 at 368 [23], 376 [54] per Payne JA (Johnson J agreeing at 383 [88], Davies J agreeing at 383 [89]). 3 Namoa v Director of Public Prosecutions (2020) 282 A Crim R 362 at 383 [85] per Payne JA (Johnson J agreeing at 383 [88], Davies J agreeing at 383 [89]). Gleeson For the person to be guilty: the person must have entered into an agreement with one or more other persons; and the person and at least one other party to the agreement must have intended that an offence would be committed pursuant to the agreement; and the person or at least one other party to the agreement must have committed an overt act pursuant to the agreement. (3) A person may be found guilty of conspiracy to commit an offence even if: committing the offence is impossible; or the only other party to the agreement is a body corporate; or each other party to the agreement is at least one of the following: a person who is not criminally responsible; a person for whose benefit or protection the offence exists; or subject to paragraph (4)(a), all other parties to the agreement have been acquitted of the conspiracy. (4) A person cannot be found guilty of conspiracy to commit an offence all other parties to the agreement have been acquitted of the conspiracy and a finding of guilt would be inconsistent with their acquittal; or he or she is a person for whose benefit or protection the offence exists. Gleeson Interpretation of the Code The principles for interpreting a statutory code are well established. A code is to be construed according to its natural meaning and without any presumption that its language was intended to do no more than restate the common law4. The common law cannot be used to supply the meaning of a word used in a code except where the word has a well-established technical meaning under the pre-existing law and the code uses that word without definition5, or it appears that the relevant provision in a code is ambiguous6. The common law cannot be invoked in the interpretation of a code for the purpose of creating an ambiguity7. R v LK holds that, subject to express statutory modification, the words "conspires" and "conspiracy" in s 11.5 bear their common law meaning8. In that case, the plurality said relevantly9: that "Spigelman CJ's conclusion 'conspires' and 'conspiracy' in s 11.5(1) are to be understood as fixed by the common law subject to express statutory modification is to be accepted. ... These are words that had an established meaning within the criminal law at the time the Code was enacted. Their use, without definition, in the statement of the Code offence was intended to be understood by reference to that legal the words 4 Pickett v Western Australia (2020) 94 ALJR 629 at 635-636 [22]-[23] per Kiefel CJ, Bell, Keane and Gordon JJ; 379 ALR 471 at 477, quoting Brennan v The King (1936) 55 CLR 253 at 263 and Stuart v The Queen (1974) 134 CLR 426 at 437. See also Mellifont v Attorney-General (Q) (1991) 173 CLR 289 at 309 per Mason CJ, Deane, Dawson, Gaudron and McHugh JJ. 5 R v LK (2010) 241 CLR 177 at 220 [97] per Gummow, Hayne, Crennan, Kiefel and 6 Mellifont v Attorney-General (Q) (1991) 173 CLR 289 at 309 per Mason CJ, Deane, Dawson, Gaudron and McHugh JJ. 7 Mellifont v Attorney-General (Q) (1991) 173 CLR 289 at 309 per Mason CJ, Deane, Dawson, Gaudron and McHugh JJ. (2010) 241 CLR 177 at 224 [107] per Gummow, Hayne, Crennan, Kiefel and Bell JJ. Affirmed in Agius v The Queen (2013) 248 CLR 601 at 615 [54] per 9 R v LK (2010) 241 CLR 177 at 224 [107] per Gummow, Hayne, Crennan, Kiefel and Bell JJ; see also at 231 [131]. Gleeson meaning. On the hearing of the appeals senior counsel for the appellant accepted so much." Spouses are separate "persons" Whatever may have been the historical position, there is no longer any principle in Australian common law respecting the single legal personality of spouses10. Senior counsel for the appellant properly acknowledged that the common law rule for which he contends cannot depend upon any proposition that husband and wife form a single person. On its face, s 11.5(1) refers to "[a] person who conspires with another person". "Person" is defined in the Dictionary to the Code as follows: "person includes a Commonwealth authority that is not a body corporate, and another has a corresponding meaning. Note: This definition supplements subsection 2C(1) of the Acts Interpretation Act 1901. That subsection provides that person includes a body politic or corporate as well as an individual." The references in s 11.5 to a "person" and "another person" are apt to include two spouses. The appellant did not contend otherwise. Meaning of "conspires" and "conspiracy" In R v LK, the plurality explained the meaning of "conspires" and "conspiracy" in s 11.5(1) in the following passages11: "Spigelman CJ's analysis, that the common law offence of conspiracy requires that an accused person know the facts that make the proposed act or acts unlawful, should be accepted as an accurate statement of the law. Section 11.5(1) makes it an offence to conspire with another person to commit an offence punishable by imprisonment for more than twelve months or by a fine of 200 penalty units or more (a non-trivial offence). It 10 Magill v Magill (2006) 226 CLR 551 at 573 [55] per Gummow, Kirby and Crennan JJ. See also Tooth & Co Ltd v Tillyer (1956) 95 CLR 605 at 615-616 per Dixon CJ, Williams, Webb and Fullagar JJ. (2010) 241 CLR 177 at 227 [114], 231 [131], 232 [133], 235 [141] per Gummow, Hayne, Crennan, Kiefel and Bell JJ (footnotes omitted). Gleeson reads naturally as the law creating the offence. It is by the adoption of the word 'conspires', with its established legal meaning, that the drafters of the Code chose to deal with questions that are not otherwise addressed in s 11.5. These may be taken to include the parties to the conspiracy and the sufficiency of their dealings to constitute the agreement. Section 11.5(1) is the specification of a physical element of the offence, namely, conspiring with another person to commit a non-trivial offence. Central to the concept of conspiring is the agreement of the conspirators. Paragraphs (a) and (b) of s 11.5(2) are epexegetical of what it is to 'conspire' with another person to commit an offence within the meaning of s 11.5(1). Section 11.5(2)(b) looks to the time at which the agreement was entered, making clear that for a person to 'conspire' under s 11.5(1) it is necessary that he or she and at least one other party to the agreement 'must have intended' that an offence be committed pursuant to it. Together paras (a) and (b) clarify, first, the two points made in the first sentence of the highlighted passage from the Gibbs Committee Report, extracted at [105] above [concerning the mental element for the crime of conspiracy], and, secondly, that the reach of the Code offence does not extend to an agreement to which the only parties are a single accused person and an agent provocateur. ... At the trial of a person charged with conspiracy it is incumbent on the prosecution to prove that he or she meant to conspire with another person to commit the non-trivial offence particularised as being the object of the conspiracy. In charging a jury as to the meaning of 'conspiring' with another person, it is necessary to direct that the prosecution must establish that the accused entered into an agreement with one or more other persons and that he or she and at least one other party to the agreement intended that the offence particularised as the object of the conspiracy be committed pursuant to the agreement." These passages say nothing about any common law rule relating to spouses as an aspect of the common law meaning of "conspiracy". R v LK did not address that issue and cannot be authority that the meaning of "conspires" and "conspiracy" incorporates such a rule12. The passages reveal that the common law meaning of 12 Bell Lawyers Pty Ltd v Pentelow (2019) 93 ALJR 1007 at 1016 [28] per Kiefel CJ, Bell, Keane and Gordon JJ; 372 ALR 555 at 562, citing Coleman v Power (2004) 220 CLR 1 at 44-45 [79] per McHugh J and CSR Ltd v Eddy (2005) 226 CLR 1 at 11 [13] per Gleeson CJ, Gummow and Heydon JJ. Gleeson "conspires" comprises entering into an agreement to perform the actus reus of an offence with knowledge of facts that make the proposed acts unlawful13. In context (including the relevant footnote14), the observation that the drafters of the Code chose to address "the parties to the conspiracy and the sufficiency of their dealings to constitute the agreement" by adoption of the word "conspires" is not directed to the capacity of particular types of persons to commit the offence. The overseas case law upon which the appellant relied to contend that the language of s 11.5 does not expressly oust the common law position does not assist her case15 because of the different statutory contexts and the courts' reliance upon the proposition, disavowed by the appellant as part of the common law of Australia, that spouses may constitute a single person. In R v McKechie, the New Zealand Court of Appeal held, by majority, that the relevant statute authorised a common law defence to a statutory charge of conspiracy "in accordance with the common law that there should be two persons to constitute a conspiracy"16. The majority reasoned that "at common law, as regards a charge of conspiracy, husband and wife are not two persons but only one, and there is no indication that that basic rule is reversed"17. In the Canadian case of Kowbel v The Queen, the relevant statutory offence was to the effect that "every one is guilty of an indictable offence, who in any case not otherwise provided for, conspires with any person to commit any indictable offence"18. The words "every one" were defined to apply only to persons in relation 13 See also Agius v The Queen (2013) 248 CLR 601 at 616-617 [59] per Gageler J, quoting Review of Commonwealth Criminal Law, Interim Report: Principles of Criminal Responsibility and Other Matters (July 1990) at 361 [34.11]. 14 The footnote states: "The agreement of the conspirators need not be attended by any formalities: R v Orton [1922] VLR 469 at 473 per Cussen J; Gerakiteys (1984) 153 CLR 317. See also Orchard, '"Agreement" in Criminal Conspiracy β 1' [1974] Criminal Law Review 297." 15 Director of Public Prosecutions v Blady [1912] 2 KB 89; R v Peel (The Times, 8 March 1922); R v McKechie [1926] NZLR 1; Kowbel v The Queen [1954] SCR 498; Mawji v The Queen [1957] AC 126; Midland Bank Trust Co Ltd v Green [No 3] [1979] Ch 496; Midland Bank Trust Co Ltd v Green [No 3] [1982] Ch 529; R v Cheung Ka Fai [1995] 3 HKC 214. [1926] NZLR 1 at 12 per Sim, Reed and Adams JJ. 17 R v McKechie [1926] NZLR 1 at 12 per Sim, Reed and Adams JJ. [1954] SCR 498 at 499 per Kerwin and Taschereau JJ (emphasis in original). Gleeson to such acts and things as they are capable of doing19. Kerwin and Taschereau JJ, with whom Estey and Cartwright JJ agreed, concluded that "every one" did not include husbands and wives because they lacked capacity to conspire on the basis of a common law defence "because judicially speaking they form but one person"20. In Mawji v The Queen, the Privy Council concluded that the rule of English criminal law that husband and wife cannot be guilty of conspiracy was incorporated into the relevant statutory offence by a provision to the following effect21: "This Code shall be interpreted in accordance with the principles of legal interpretation obtaining in England, and expressions used in it shall be presumed ... except as may be otherwise expressly provided, to be used with the meaning attaching to them in English criminal law and shall be construed in accordance therewith." The offence was in the following terms22: "Any person commits a misdemeanour who conspires with any other person to accuse any person falsely of any crime, or to do anything to obstruct, prevent, pervert or defeat the course of justice." Their Lordships identified a rule of English criminal law that23: "A husband and wife cannot alone be found guilty of conspiracy, for they are considered in law as one person, and are presumed to have but one will." 19 Kowbel v The Queen [1954] SCR 498 at 500 per Kerwin and Taschereau JJ. 20 Kowbel v The Queen [1954] SCR 498 at 499 per Kerwin and Taschereau JJ, 503 per Estey J, 505 per Cartwright J. [1957] AC 126 at 133-134; Penal Code of Tanganyika, s 4. 22 Penal Code of Tanganyika, s 110(a). 23 Mawji v The Queen [1957] AC 126 at 134. Gleeson Their Lordships accepted that the rule was "an example of the fiction that husband and wife are regarded for certain purposes ... as in law one person"24. In construing the offence provision, their Lordships held25: "Their Lordships are of opinion that the rule is incorporated into the provisions of section 110(a). The words 'conspires' and 'conspiracy' in English criminal law are not applicable to husband and wife alone; the words 'other person' in section 110(a), if English criminal law is applied to their 'interpretation' or 'meaning,' cannot in this context include a spouse." Finally, the appellant sought to rely on Midland Bank Trust Co Ltd v Green [No 3]26. In that case, the Court of Appeal of England and Wales held that the "doctrine of unity" between husband and wife, which applied to the crime of conspiracy, should not be applied to the modern tort of conspiracy27. At first instance, Oliver J found that "a criminal conspiracy did and does require, at common law, and as an essential ingredient of the offence, an agreement between the accused and some person other than his or her spouse"28. His Honour stated that "the common law rule was and is that a husband and wife cannot be convicted of the crime of conspiracy in circumstances in which they are the only parties to the conspiracy alleged"29. Ultimately, however, Oliver J concluded that30: "the continued existence of the rule, in relation to the crime of conspiracy rests ... not upon a supposed inability to agree as a result of some fictional unity, but upon a public policy which, for the preservation of the sanctity of marriage, accords an immunity from prosecution to spouses who have done no more than agree between themselves in circumstances which would lay them open, if unmarried, to a charge of conspiracy." (emphasis added) 24 Mawji v The Queen [1957] AC 126 at 135. 25 Mawji v The Queen [1957] AC 126 at 134-135. 27 Midland Bank Trust Co Ltd v Green [No 3] [1982] Ch 529 at 539-540 per Lord Denning MR, 540-542 per Fox LJ, 542-543 per Sir George Baker. 28 Midland Bank Trust Co Ltd v Green [No 3] [1979] Ch 496 at 511. 29 Midland Bank Trust Co Ltd v Green [No 3] [1979] Ch 496 at 520. 30 Midland Bank Trust Co Ltd v Green [No 3] [1979] Ch 496 at 521. Gleeson His Honour further concluded that31: "there is no good logical or historical reason for slavishly applying in the law of tort, simply because the tort is called the 'tort of conspiracy,' the primitive and inaccurate maxim that spouses are one person, so as to confer upon them an immunity from civil liability not accorded to the unmarried." (emphasis added) On appeal, Oliver J's decision was upheld32. The reasoning of the Court of Appeal does not indicate that the common law meaning of "conspiracy" incorporates a notion that spouses alone cannot "conspire" or be "conspirators". In particular, Lord Denning MR identified as the appellant's argument that the doctrine of unity between husband and wife is an established doctrine in English law. One of the ramifications of that doctrine was said to be that husband and wife cannot be guilty as conspirators together33. Lord Denning MR noted that "[t]he crime of conspiracy is still based on an agreement to do an unlawful act without more"34. Fox LJ distinguished between a "conspiracy" and the question of whether a husband and wife can be convicted of the crime of conspiracy, saying35: "It is clear that a husband and wife cannot be convicted of the crime of conspiracy if they are the only parties to the conspiracy alleged. That has long been the law. It was confirmed by the Criminal Law Act 1977. The question is whether the same rule should be applied to the tort. The crime and the tort shared the same definition: an agreement by two or more persons to do an unlawful act or to do a lawful act by unlawful means." Sir George Baker identified the statutory exemption from liability for criminal conspiracy as the expression of a "very limited rule" of the legal doctrine of unity of husband and wife36. While the explanations for the special position of spouses in relation to the crime of conspiracy varied, in none of these cases was the court concerned with the meaning of "conspiracy". It follows that, whether there is or was a rule of 31 Midland Bank Trust Co Ltd v Green [No 3] [1979] Ch 496 at 525. 32 Midland Bank Trust Co Ltd v Green [No 3] [1982] Ch 529 at 540 per Lord Denning MR, 542 per Fox LJ, 542-543 per Sir George Baker. 33 Midland Bank Trust Co Ltd v Green [No 3] [1982] Ch 529 at 538. 34 Midland Bank Trust Co Ltd v Green [No 3] [1982] Ch 529 at 539. 35 Midland Bank Trust Co Ltd v Green [No 3] [1982] Ch 529 at 540. 36 Midland Bank Trust Co Ltd v Green [No 3] [1982] Ch 529 at 542. Gleeson Australian common law that there can be no criminal conspiracy if the only two parties to the agreement are spouses, that rule is not incorporated into the offence contained in s 11.5 of the Code by the words "conspires" and "conspiracy". Contextual and extrinsic material The appellant sought to rely upon s 11.5(3) in support of her construction of s 11.5(1), observing that it does not address explicitly the position of spouses. The respondent accepted that the legislature could have addressed the position of spouses in s 11.5(3). However, as senior counsel for the respondent contended, s 11.5(3) tells against an interpretation of "conspires" and "conspiracy" that incorporates complicated rules as to which types of persons can commit the offence created by s 11.5(1). The relevant extrinsic material includes an interim report, published in July 1990, of a Committee chaired by Sir Harry Gibbs and entitled "Principles of Criminal Responsibility and Other Matters" ("the Gibbs Committee Report")37. Chapter 39 of that report is entitled "Parties to the Conspiracy"38. The chapter 37 See R v LK (2010) 241 CLR 177 at 203 [51] per French CJ. 38 Review of Commonwealth Criminal Law, Interim Report: Principles of Criminal Responsibility and Other Matters (July 1990) at 379-391. Gleeson commences by citing s 2(2) of the Criminal Law Act 1977 (UK)39, referred to in Midland Bank [No 3]40, and then relevantly states41: "At common law there can be no criminal conspiracy if the only two parties to the agreement are husband and wife [citing Mawji and Midland Bank [No 3]]. This rule originally derived from the doctrine of the unity of husband and wife; it has been criticised as outmoded and there has been a refusal to extend it to the tort of civil conspiracy. ... Conspiracies to commit offences against Commonwealth laws are of a kind likely to be made between spouses. Conspiracies to import heroin into Australia and conspiracies to defraud the revenue are obvious examples. The Review Committee can see no valid reason of social policy why the rule that there can be no conspiracy between husband and wife should be retained. That rule is based upon a fiction which is unacceptable in modern society. It is anomalous, since a wife may be guilty as an accessory to an offence committed by her husband although she is not capable of conspiring to commit that offence. 39 Section 2(2) of the Criminal Law Act 1977 (UK) provided that: "A person shall not by virtue of section 1 above be guilty of conspiracy to commit any offence or offences if the only other person or persons with whom he agrees are (both initially and at all times during the currency of the agreement) persons of any one or more of the following descriptions, that is to say β his spouse; a person under the age of criminal responsibility; and an intended victim of that offence or of each of those offences." [1982] Ch 529 at 539 per Lord Denning MR, 540 per Fox LJ, 542 per Sir George 41 Review of Commonwealth Criminal Law, Interim Report: Principles of Criminal Responsibility and Other Matters (July 1990) at 380-381 [39.3], [39.4], [39.7] (footnotes omitted). Gleeson The Review Committee recommends that the consolidating law should contain a provision to the effect that there may be a conspiracy to which the only parties are spouses." The Code does not include a provision which explicitly addresses the Review Committee's recommendation. However, even assuming that the inclusion of such a provision was intended by the recommendation, its absence in the Code is of little assistance to the appellant where the report identifies the rule upon which the appellant relies as distinct from the common law meaning of "conspiracy". The position of corporations as parties to a conspiracy is also considered in the Gibbs Committee Report. The report refers to uncertainty about whether a company could be criminally liable for conspiracy; whether there could be no conspiracy between a "one man company" and the director who has sole responsibility for its management; and whether there could be conspiracy between a company and the board of directors who controlled it, or between a company and a subsidiary over which the company exercised complete control42. In that context, s 11.5(3)(b) would appear to simplify the operation of s 11.5 in relation to corporations and does not relevantly affect the proper interpretation of s 11.5(1). Finally, it is relevant to note that the Code has its origins in a draft Model Code prepared by a Committee established by the Standing Committee of Attorneys-General in 1990, the Criminal Law Officers Committee, subsequently designated the Model Criminal Code Officers Committee43. After setting out the draft offence in relevantly similar terms to s 11.5(1), the Committee stated in its "Parties issues Conspiracy raises a number of issues which might be described as issues related to the 'parties' to the agreement. No protection is provided for spouses. Clearly a husband and wife can be guilty of conspiring with each other. Marital immunity is outdated; any objections to husband/wife conspiracies are objections which go to the nature of the conspiracy offence itself ... Some Griffith Codes are also outdated on this issue: see s 33 Queensland Code (recommended for repeal 42 Review of Commonwealth Criminal Law, Interim Report: Principles of Criminal Responsibility and Other Matters (July 1990) at 388 [39.22]. 43 See R v LK (2010) 241 CLR 177 at 204 [53] per French CJ. 44 Australia, Criminal Law Officers Committee of the Standing Committee of Attorneys-General, Model Criminal Code, Chapters 1 and 2: General Principles of Criminal Responsibility, Final Report (December 1992) at 103. Gleeson by O'Regan, p5) and s 297(2) Tasmanian Code, both taking the common law position." These extrinsic materials further support the conclusion that the statutory offence of conspiracy in s 11.5(1) applies to spouses who agree between themselves, and no other person, to commit an offence against a law of the Commonwealth. It is unnecessary to consider whether the common law includes or included at any relevant time a rule by virtue of which the common law of conspiracy does not apply to spouses. Conclusion The appeal should be dismissed. |
HIGH COURT OF AUSTRALIA Matter No M44/2022 AND THE QUEEN Matter No M45/2022 APPELLANT RESPONDENT APPELLANT AND THE QUEEN RESPONDENT Awad v The Queen Tambakakis v The Queen [2022] HCA 36 Date of Hearing: 13 September 2022 Date of Judgment: 9 November 2022 M44/2022 & M45/2022 ORDER In each matter: Appeal allowed. Set aside paragraph 2 of the orders made by the Court of Appeal of the Supreme Court of Victoria dated 18 October 2021 dismissing the appeal and, in its place, order that: the appeal against conviction be allowed; the appellant's conviction be set aside; and there be a new trial. On appeal from the Supreme Court of Victoria Representation B W Walker SC with O P Holdenson KC for the appellant in M44/2022 (instructed by Milides Lawyers) D A Dann KC with P J Smallwood for the appellant in M45/2022 (instructed by Stephen Andrianakis and Associates) P J Doyle SC with C J Tran for the respondent in both matters (instructed by Commonwealth Director of Public Prosecutions) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Awad v The Queen Tambakakis v The Queen Criminal Practice β Appeal β Error or irregularity in trial β Directions to jury β Where credibility of one accused giving evidence central to both trials β Where trial judge directed jury that innocent person can do nothing more than give evidence β Where trial judge directed jury that guilty person may give evidence in hope or belief they will more likely be believed β Where directions prohibited by s 44J of Jury Directions Act 2015 (Vic) β Whether misdirection constituted substantial miscarriage of justice. Words and phrases β "charge", "conviction was inevitable", "credibility", "deflect the jury from its fundamental task", "direction", "essential to a fair trial", "fundamental error", "jury", "misdirection", "motivation to give evidence", "natural limitations", "onus of proof", "presumption of innocence", "prohibited direction", "serious departure from the prescribed processes for trial", "substantial miscarriage of justice". Criminal Procedure Act 2009 (Vic), s 276(1)(b). Jury Directions Act 2015 (Vic), ss 44J, 44K. KIEFEL CJ AND GLEESON J. Following a trial in the County Court of Victoria, the appellants were each convicted of one charge of attempting to possess a commercial quantity of an unlawfully imported border-controlled drug1, namely cocaine. These appeals concern a misdirection by the trial judge. The misdirection was as to the reason why Mr Tambakakis may have chosen to give evidence. It is a direction which s 44J(b) of the Jury Directions Act 2015 (Vic) states must not be made. There is no issue that the direction was contrary to law. The question on the appeals is whether the direction amounts to a substantial miscarriage of justice from which it would follow that the appeals from conviction should have been allowed by the Court of Appeal of the Supreme Court of Victoria. Background Australian Border Force officers intercepted a consignment of printers which were found to contain 22.4 kilograms of cocaine, 15.456 kilograms of which was pure cocaine. A commercial quantity is two kilograms. An inert substance was substituted for the cocaine, and a listening device and a tracking device were placed within the consignment. Surveillance of the delivery of the consignment was undertaken. So far as concerned Mr Tambakakis, the evidence showed that he collected the consignment and stored it overnight in the yard of premises in which he conducted a business. The following evening the consignment was moved to the residential premises of another co-accused. Mr Tambakakis delivered a white Kia van to those premises and the van was later used to transport the consignment to a warehouse which he had leased in a false name. Mr Awad picked up Mr Tambakakis after the van was delivered and they drove to Mr Tambakakis' apartment. The two later travelled together to a carpark in the vicinity of the warehouse and proceeded on foot, though separately, towards it. At a certain point Mr Tambakakis entered the van and helped unload the consignment at the warehouse. When the van was unloaded, Mr Tambakakis drove it out of the warehouse and parked at a carpark. He and Mr Awad were then seen walking to the carpark where Mr Awad's car was parked and drove away. Mr Tambakakis and Mr Awad were not charged with any conspiracy to commit an offence. Mr Awad was not charged with having aided, abetted, counselled or procured the commission of an offence by Mr Tambakakis. The prosecution case that Mr Awad was in joint possession of the substance in the consignment depended upon him having entered the van with Mr Tambakakis. But Mr Tambakakis gave evidence that, although it had been planned that both he and 1 Criminal Code (Cth), ss 11.1(1) and 307.5(1). Gleeson Mr Awad would enter the van and travel in it to the warehouse, Mr Awad did not do so. And there was no CCTV footage which placed Mr Awad there. Mr Tambakakis also gave evidence in his own defence. It was to the effect that another person organised the importation and that he, Mr Tambakakis, believed the drugs were steroid tablets. They had previously imported such drugs. This defence involved confessing to involvement in the illegal importation of steroids but not to the importation of a border-controlled drug. It follows that both Mr Tambakakis' defence and the prosecution case against Mr Awad critically involved the jury's assessment of the credibility of Mr Tambakakis' evidence. The misdirection At an early point in his charge to the jury, the trial judge directed the jury that, although Mr Tambakakis had the right to remain silent and was not obliged to give evidence, he chose to do so. The trial judge told them that Mr Tambakakis undertook to tell the truth and submitted himself to cross-examination, a process by which the credibility and truthfulness of a witness are examined. The trial judge went on: "Now, there are two factors that are significant that you should have regard to when you are assessing Mr Tambakakis' evidence. Firstly, in a criminal trial, there is nothing more [that] an innocent [person] can do than give evidence in his own defence and subject himself to cross-examination, and that is what occurred here. On the other hand, secondly, a guilty person might decide to tough out cross-examination in the hope or belief that he will be more likely to be believed and his defence accepted if he takes the risk of giving evidence. You should consider both of these observations when evaluating Mr Tambakakis' evidence." (emphasis added) The trial judge went on to say that it is a matter for the jury as to what they accept or what weight they give to the evidence. They should treat Mr Tambakakis' evidence in the same way as they would treat the evidence of other witnesses. But they should bear in mind that an accused giving evidence is probably under more stress than any other witness when giving evidence in a trial. The appellants contend that the directions were not only prohibited by the Jury Directions Act, but that they resulted in a substantial miscarriage of justice such that their convictions should be quashed and new trials ordered. The Jury Directions Act Sections 44H to 44K were inserted into the Jury Directions Act with operation from 1 October 2017. Section 44J is in the following terms: Gleeson "Prohibited directions in relation to evidence of an accused The trial judge must not direct the jury about any of the following matters in relation to the evidence of an accused β (a) whether the accused is under more stress than any other witness; that the accused gave evidence because β a guilty person who gives evidence will more likely be believed; or an innocent person can do nothing more than give evidence. Note This section prohibits the trial judge from giving directions to the jury about particular matters. This does not limit the obligation of the trial judge to refer the jury to the way in which the prosecution and the accused put their cases in relation to the issues in the trial β see section 65." Section 44K provides: "Abolition of common law rules (1) Any rule of common law under which a trial judge is prohibited from directing the jury on the interest a witness or an accused may have in the outcome of a trial is abolished. (2) Any rule of common law under which a trial judge is required or permitted to direct the jury about the matters referred to in section 44J in relation to the evidence of an accused is abolished. Notes Subsection (1) abolishes the rule attributed to Robinson v R [1991] HCA 38; (1994) 180 CLR 531. Subsection (2) abolishes directions based on β R v Haggag [1998] VSC 355; (1998) 101 A Crim R 593; and R v McMahon [2004] VSCA 64; (2004) 8 VR 101; and Gleeson R v Buckley [2004] VSCA 185; (2004) 10 VR 215. Section 4 applies generally to override any rule of law or practice to the contrary of this Act." It will be observed that the trial judge gave each of the directions to which s 44J(a), (b)(i) and (b)(ii) refer. The direction which the appellants contend gave rise to a substantial miscarriage of justice2 is that referred to in s 44J(b)(i) and is highlighted in the directions set out above. Prior to its enactment, directions of the kind prohibited by s 44J were given in criminal trials in Victoria. The cases noted to s 44K are examples of such cases. But in his dissenting judgment in the Court of Appeal in this case3, Priest JA observed that prior to the promulgation of s 44J(b), not every trial judge in Victoria gave the directions, since not every judge was satisfied that they were not offensive to principle. The directions had not gained currency or approval outside that State. A report by the Criminal Law Review of the Department of Justice & Regulation4 described the directions as "unhelpful" and "problematic". It said5: "The direction on assessing evidence (i.e. a guilty person may tough out cross-examination, but there's nothing more an innocent person may do) contains two competing propositions that arguably neutralise each other. The competing nature of the directions may confuse the jury and have the unintended consequence of focusing attention on the motivation of an accused to give particular evidence given their interest in the outcome of a trial." In the Second Reading Speech to the Jury Directions and Other Acts Amendment Bill 2017, the Attorney-General said that "trial judges and parties will be prohibited from suggesting that an accused's evidence is less credible or requires more scrutiny than the evidence of other witnesses. β¦ The bill will β¦ prohibit 2 Criminal Procedure Act 2009 (Vic), s 276(1)(b)-(c). 3 Awad v The Queen (2021) 291 A Crim R 303 at 320-321 [64]. 4 Victoria, Criminal Law Review, Department of Justice & Regulation, Jury Directions: A Jury-Centric Approach Part 2 (2017) at 13. 5 Victoria, Criminal Law Review, Department of Justice & Regulation, Jury Directions: A Jury-Centric Approach Part 2 (2017) at 12. Gleeson trial judges from giving certain problematic common law directions"6.The Explanatory Memorandum of the Bill described the directions the subject of the proposed prohibition as "confusing, unhelpful and arguably inaccurate"7. A "mandatory" provision? In the Court of Appeal, as in this Court, the appellants contended that the language of s 44J is mandatory and must be given effect. In enacting s 44J(b)(i), the legislature has prescribed what is essential to a fair trial for an accused. Non-compliance with the prohibition is a departure from that process and is itself sufficient to constitute a substantial miscarriage of justice for the purpose of s 276(1) of the Criminal Procedure Act 2009 (Vic). The appellants may be understood to say that a conclusion that there has been a substantial miscarriage of justice follows automatically from non-compliance with s 44J(b)(i). The issue raised is one of statutory interpretation. It may first be observed that the Jury Directions Act does not itself spell out the consequences of a failure to comply with s 44J(b)(i). In such a circumstance the question of what may be taken to follow non-compliance is not resolved by describing statutory requirements as "mandatory" or "directory". In Project Blue Sky Inc v Australian Broadcasting Authority8, it was said that these classifications have "outlived their usefulness because they deflect attention from the real issue which is whether an act done in breach of the legislative provision is invalid". The classification reflects the result of an enquiry, not the beginning. The correct test for determining validity is to ask whether it was a purpose of the legislation that an act done in breach of the provision is invalid. In Project Blue Sky, the relevant provision of the Broadcasting Services Act 1992 (Cth) proceeded on the basis that the Australian Broadcasting Authority ("the ABA") has power to perform certain functions. It then directed the ABA to perform those functions in a "manner consistent with" four matters set out in the relevant section. It was held that the fact the provision regulates the exercise of functions already conferred on the ABA, rather than imposes essential preliminaries to the exercise of its functions, strongly indicates that it was not a 6 Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 22 February 7 Victoria, Legislative Assembly, Jury Directions and Other Acts Amendment Bill 2017, Explanatory Memorandum at 8. (1998) 194 CLR 355 at 390 [93]. Gleeson purpose of the Act that a breach of the provision was intended to invalidate any act done in breach of it. Project Blue Sky may be contrasted with Subramaniam v The Queen9, where the statute required the Court at the commencement of a special hearing to explain to the jury ("must explain to the jury") the fact that the accused person is unfit to be tried in accordance with the normal procedures, the meaning of unfitness to be tried, the purpose of the special hearing, the verdicts which are available and the legal and practical consequences of those verdicts. The requirements were not met, in that they were provided piecemeal over the course of the hearing or in statements by counsel10. This Court held that the failure to comply with the provision was, of itself, a substantial miscarriage of justice. An obligation was imposed on the Court and it was both limited and specific. As mentioned previously, the appellants here argue that the Jury Directions Act has in s 44J(b)(i) determined what is essential to a fair trial, so that non-compliance with its prohibition necessarily amounts to a substantial miscarriage of justice. It may be noted at the outset that of the three directions which s 44J prohibits being made, the other two are such as might favour the accused. More importantly, when regard is had to the stated purposes of the Jury Directions Act, it is not obvious that its purpose here is as the appellants contend. Most relevant amongst the purposes stated in s 1 are: to reduce the complexity of jury directions in criminal trials; and to simplify and clarify the duties of the trial judge in giving jury directions in criminal trials β¦" The stated purposes accord with the description of the prohibited directions in the extrinsic materials as "confusing" and "unhelpful", "arguably inaccurate" or "problematic". Nowhere is it suggested that non-compliance with s 44J(b)(i) means that a fair trial will be lost in every case. That is understandable. Much will depend upon the evidence given by the accused to which the direction refers, the issues for the jury arising from that evidence and the prosecution case, and the directions given by the trial judge as a whole. (2004) 79 ALJR 116; 211 ALR 1. 10 Subramaniam v The Queen (2004) 79 ALJR 116 at 126 [44]; 211 ALR 1 at 14. Gleeson A substantial miscarriage of justice? Section 276(1) of the Criminal Procedure Act provides that an appeal against conviction must be allowed if an appellant satisfies the court that: the verdict of the jury is unreasonable or cannot be supported having regard to the evidence; or as the result of an error or an irregularity in, or in relation to, the trial there has been a substantial miscarriage of justice; or for any other reason there has been a substantial miscarriage of justice." In Baini v The Queen11, the majority said that, when read together, paras (b) and (c) encompass every form of substantial miscarriage of justice. Section 276(1)(b) encompasses any departure from trial according to law and the reference in para (c) to "any other reason" shows that para (b) is not exhaustive. In Baini12, it was explained that no single universally applicable description can be given for what amounts to a substantial miscarriage of justice. There may be many examples. It may, however, be said that an error or irregularity in relation to the trial will amount to such a miscarriage only where an appellate court cannot be satisfied that it did not make a difference to the outcome of the trial13. An appellate court can be satisfied that the result of the trial would not have been different if, having reviewed the record of the trial, it concludes that conviction The majority in Baini made some further observations which are here relevant. One such observation concerns the fact that s 276(1) does not adopt the common form proviso15. The majority pointed out that to recognise the inevitability of a verdict of guilty in a given case does not involve the reintroduction of the common form proviso, nor does it impose some kind of onus on the appellant. It merely acknowledges that an appellate court's satisfaction of inevitability is relevant to determining whether there has been a substantial (2012) 246 CLR 469 at 479 [25]. 12 Baini v The Queen (2012) 246 CLR 469 at 479 [26]. 13 Baini v The Queen (2012) 246 CLR 469 at 479 [26]. 14 Baini v The Queen (2012) 246 CLR 469 at 480 [30], 481 [32]. 15 As to which see Weiss v The Queen (2005) 224 CLR 300 at 317 [44]. Gleeson miscarriage of justice16. If it is submitted that a guilty verdict was inevitable, an appellant need not prove his or her innocence to meet the point. It will be sufficient for the appellant to show no more than that, had there been no error, the jury may have entertained a doubt as to his or her guilt. The respondent must then convince the court that the appellant's conviction was inevitable17. The majority also observed18 that in many cases the appellate court will not be in a position to decide whether an appellant must have been convicted if the error had not been made. Such a conclusion may not be reached because of the nature of the error or irregularity and the "natural limitations" that attend an appellate court's task19. If it is said that a guilty verdict was inevitable, which is to say that a verdict of acquittal was not open, an appellate court must decide that question on the written record of the trial with the "natural limitations" that exist in the case of an appellate court proceeding on that basis. In that regard the majority referred to Fox v Percy20. There it was said that one such natural limitation is the disadvantage that an appellate court labours under in respect of the evaluation of the credibility of a witness. It has never been disputed that the misdirection by the trial judge in this case was an error in the trial within the meaning of s 276(1)(b). No member of the Court of Appeal (Priest, McLeish and Niall JJA) accepted that it was of a fundamental kind which of its nature meant that the trial substantially miscarried. But their Honours divided on the question of the possible effect of the misdirection. In the view of McLeish and Niall JJA, the nature of the error or irregularity may be such that it made no difference to the trial. It may be possible in some cases to determine whether that is so without assessing the whole of the record of the trial21. Consideration could be given as a preliminary matter to identifying how the direction may have affected the outcome of the trial when the issue of inevitability 16 Baini v The Queen (2012) 246 CLR 469 at 480 [30]. 17 Baini v The Queen (2012) 246 CLR 469 at 481 [31]. 18 Baini v The Queen (2012) 246 CLR 469 at 480 [29], 481 [32]. 19 Baini v The Queen (2012) 246 CLR 469 at 480 [29]. (2003) 214 CLR 118 at 125-126 [23]. See also Kalbasi v Western Australia (2018) 264 CLR 62 at 71 [15]; Orreal v The Queen (2021) 96 ALJR 78 at 82 [20], 86-87 [41]; 395 ALR 631 at 636, 641-642. 21 Awad v The Queen (2021) 291 A Crim R 303 at 339-340 [149]. Gleeson is raised22. There will be cases where the departure from a trial according to law was "innocuous", in the sense that it could have occasioned no real forensic disadvantage to the appellant23. The issue, their Honours observed24, is whether the misdirection had the capacity to direct or encourage the jury to reason in a particular way or from a particular standpoint which they may not have adopted had the direction not been given. Their Honours accepted that, in a criminal trial, framing the issue as one of guilt or innocence might distract attention from the real issue, namely whether the prosecution has discharged its burden of proof to the requisite standard25. But their Honours considered that the direction given provided two alternative explanations for an accused giving evidence, but it did not provide a basis for the jury to assume which of the two might apply. The jury were not distracted from their task26. Priest JA dissented. In his Honour's view a direction of this kind has the real potential to undermine the presumption of innocence and deflect the jury from applying the requisite onus of proof27. It had the potential to taint the jury's consideration and evaluation of Mr Tambakakis' evidence, thereby undermining his defence. His Honour was unable to conclude that, absent the giving of the prohibited direction, Mr Awad's conviction was inevitable28. It will be recalled that Mr Tambakakis' defence was that he believed that the substance in the consignment was steroids. His evidence, that Mr Awad did not enter the van containing the substance (and, it would follow, that Mr Awad did not participate in its unloading), if accepted, could seriously affect the prosecution case against Mr Awad on possession. Mr Tambakakis' credibility was critical to the jury's evaluation of the evidence and the outcome of the case against both Mr Tambakakis and Mr Awad. 22 Awad v The Queen (2021) 291 A Crim R 303 at 340 [150]. 23 Awad v The Queen (2021) 291 A Crim R 303 at 340-341 [152], referring to Kalbasi v Western Australia (2018) 264 CLR 62 at 87-88 [70]. 24 Awad v The Queen (2021) 291 A Crim R 303 at 343 [164]. 25 Awad v The Queen (2021) 291 A Crim R 303 at 344 [170]. 26 Awad v The Queen (2021) 291 A Crim R 303 at 345 [177]. 27 Awad v The Queen (2021) 291 A Crim R 303 at 322 [70], 325 [87]. 28 Awad v The Queen (2021) 291 A Crim R 303 at 325 [83]. Gleeson The concerns of Priest JA as to the effects upon the presumption of innocence and the onus of proof, which are essential to a criminal trial, are clearly well founded. The jury were invited to come to a view about Mr Tambakakis' motivation to give evidence. The choice given β to identify that motive as one of a "guilty person" who decided to "tough out cross-examination in the hope or belief that he will be more likely to be believed and his defence accepted if he takes the risk of giving evidence" β has the real potential both to undermine the presumption and to deflect the jury from their task of determining whether they are satisfied beyond reasonable doubt that the accused were guilty of the acts charged. The respondent submitted that the directions about why a guilty person and an innocent person might give evidence balance each other out. That submission cannot be accepted. The directions do not neutralise each other. The directions are specific. They clearly identify a choice for the jury to make, and the one in issue is inconsistent with the presumption that an accused person is innocent of the acts charged until the jury are satisfied to the requisite standard of that person's guilt. It was also submitted that the other directions given by the trial judge, in particular that which immediately followed the misdirection, would have made it clear to the jury how they were to correctly approach their task. It will be recalled that the trial judge said that they should treat Mr Tambakakis' evidence in the same way as they would treat the evidence of other witnesses. And it is true to say that the trial judge correctly directed the jury about the onus and standard of proof at a number of points in the charge and said that they were not altered by reason that Mr Tambakakis gave evidence. It cannot be accepted that these directions would have dispelled the effect of the misdirection as to why a guilty person might give evidence. The misdirection was directly relevant to the credit of Mr Tambakakis. It may not have been obvious to the jury that the question of his credit, as to various aspects of his evidence, was to be determined bearing in mind the presumption and the onus of proof. It may not have been obvious because the jury were instructed by the misdirection to approach the question from a particular perspective. Further, the jury were not told how Mr Tambakakis' possible innocence or guilt might be used to assist in the evaluation of his evidence. Nor were the jury instructed about how to reconcile the misdirection with the elements of the charge concerning onus and standard of proof, if they were capable of reconciliation. On the one hand, the jury were told to evaluate Mr Tambakakis' evidence by reference to his possible guilt or innocence. In the next breath, the jury were told to approach his evidence in the same way as any other witness. The respondent did not explain how the jury might have done both of these things. The majority in the Court of Appeal reasoned to the effect that the misdirection was of such a kind that it could not have made a difference to the trial. They did not resolve the question of whether there had been a substantial Gleeson miscarriage of justice by determining whether conviction was inevitable having regard to the record of the trial. Even approached correctly, this is not a case where it is possible for an appellate court to be satisfied that conviction was inevitable. In our view that conclusion could not be reached because it would not be possible properly to evaluate the credibility of Mr Tambakakis' account. This is not a case like Hofer v The Queen29, where it is possible to do so on the basis of objective evidence. Here an appellate court is subject to the "natural limitations" to which Baini refers30. Here, the defence in Mr Tambakakis' case raised his belief that the substance imported was steroids. The respondent did not explain how this was overcome. In such a circumstance it is appropriate to order a new trial31. The respondent does not now contend to the contrary. During the course of the hearing of these appeals, the respondent withdrew its submission that the matter should be remitted to the Court of Appeal to conduct a review of the record in order to determine the issue of inevitability. It is appropriate that there be an order for a new trial in each matter. Orders We agree with the orders proposed by Gordon and Edelman JJ in each appeal. (2021) 95 ALJR 937 at 952-954 [61]-[71]; 395 ALR 1 at 15-18. 30 Baini v The Queen (2012) 246 CLR 469 at 480 [29]. 31 See, eg, Orreal v The Queen (2021) 96 ALJR 78; 395 ALR 631. Introduction The appellants, Mr Awad and Mr Tambakakis, were jointly tried before a judge and jury. The trial judge directed the jury in terms that were prohibited by s 44J of the Jury Directions Act 2015 (Vic). The appellants were convicted. The prohibited direction concerned the manner in which the jury should assess the evidence of Mr Tambakakis. There was no dispute that the giving of the prohibited direction was an error of law within the meaning of s 276(1)(b) of the Criminal Procedure Act 2009 (Vic). The issue was whether the error of law resulted in a substantial miscarriage of justice within that subsection. Mr Awad and Mr Tambakakis submitted that any contravention by a trial judge of s 44J results in a substantial miscarriage of justice or, alternatively, that there was a substantial miscarriage of justice because the Crown had not established that, without the error of law, conviction was inevitable. The Court of Appeal of the Supreme Court of Victoria unanimously, and correctly, rejected the primary submission of Mr Awad and Mr Tambakakis. A majority of the Court of Appeal (McLeish and Niall JJA; Priest JA dissenting) also rejected the alternative submission. The majority of the Court of Appeal concluded that the conviction of Mr Awad and Mr Tambakakis was inevitable without considering the whole of the trial record. They considered that, in the context of the whole of the trial judge's charge to the jury, the prohibited direction could not have had any bearing on the outcome of the trials. For the reasons below, that reasoning was erroneous. In broad terms, the prohibited direction was not sufficiently ameliorated by other, correct, directions given by the trial judge because the prohibited direction had the capacity to affect the jury's assessment of Mr Tambakakis' credibility in circumstances where his credibility was central to the defence of both appellants. The Crown abandoned a submission that if the appeals were allowed the matter should be remitted to the Court of Appeal for consideration of whether the convictions were inevitable. Therefore, the proper orders upon allowing the appeals are for new trials. The trials of Mr Awad and Mr Tambakakis Mr Awad, Mr Tambakakis, and Mr Kanati were tried on a joint indictment for the offence of attempting to possess a commercial quantity of an unlawfully imported border-controlled drug contrary to ss 11.1(1) and 307.5(1) of the Criminal Code (Cth). Mr Awad and Mr Tambakakis were convicted by the jury. The jury were unable to reach a verdict in relation to Mr Kanati. The evidence led in the prosecution and defence cases was to the following effect. The prosecution case On 1 May 2017, a consignment of five Xerox printers arrived in Melbourne from Mexico. The consignment was intercepted and inspected by Australian Border Force officers, who discovered 22.4 kg of cocaine concealed within the consignment, with a content of 15.46 kg of pure cocaine. Australian Federal Police officers substituted an inert substance for the cocaine and placed a listening device and a tracking device within the consignment. On the afternoon of 8 May 2017, the consignment was delivered to the premises of Overall Auto Care, as part of a "controlled delivery" conducted by police. Delivery was accepted by Mr Rohen, who introduced himself as "Mark Hart". The consignment was collected from the Overall Auto Care premises later that day by Mr Tambakakis, who took it on the back of a "skip" truck to the Campbellfield premises of his business, GT Skips. It was then taken to a secure yard in Randor Street, Campbellfield, used by Mr Tambakakis for his GT Skips business. That evening, Mr Tambakakis was seen driving a Jeep car, with false number plates, slowly down Randor Street and stopping to ask the occupants of another car β who were undercover police officers β for directions. Mr Awad's car was also seen in the vicinity of Randor Street. The next evening, on 9 May 2017, the consignment was collected from the Randor Street yard and taken to Mr Kanati's house in a Budget rental truck that had been hired shortly beforehand by Mr Rohen. On the evening of 10 May 2017, Mr Tambakakis drove a Kia van to Mr Kanati's house and left it there. Mr Tambakakis was then picked up by Mr Awad and they drove to Mr Tambakakis' apartment. At 5.26 pm, Mr Kanati drove the Kia van, loaded with the consignment, to King Street, Airport West. He drove in convoy with a white BMW that was registered to Mr Rohen. Earlier in the afternoon, the white BMW had been seen driving up and down Shaftsbury Street, with Mr Kanati periodically coming out of his house to speak with the driver. Surveillance officers had also previously observed Mr Awad walking around a football oval while speaking with a man who was driving the white BMW. It was agreed that Mr Rohen was not the driver on either of those earlier occasions. At 5.53 pm on 10 May 2017, Mr Kanati parked the Kia van in King Street. The white BMW was also parked in King Street, facing the Kia van, with its headlights on. Shortly afterwards, Mr Tambakakis and Mr Awad arrived at the nearby Autobarn car park. CCTV footage showed them walking out of the car park at 6.07 pm. At 6.13 pm, Mr Kanati drove the Kia van down King Street. CCTV footage showed Mr Tambakakis walking on the southern side of that street and Mr Awad walking on the northern side of the street. At 6.18 pm, Mr Kanati did a U-turn, parked the Kia van, and collected an unidentified man. At 6.25 pm, the Kia van was driven down King Street. At 6.29 pm, it was driven into a warehouse at Halsey Road, Airport West, where the consignment was unloaded. The warehouse had been leased by Mr Tambakakis using a false name. At 6.55 pm, Mr Tambakakis drove the Kia van, no longer containing the consignment, from the warehouse and parked it in a car park in King Street. At 7.02 pm, CCTV footage showed Mr Tambakakis and Mr Awad walking back to the Autobarn car park. They drove away and were later arrested in Mr Awad's car. A search of the car revealed: (i) a Hawk Sweep electronic scanner; (ii) a backpack containing a vacuum sealer and multiple plastic vacuum seal bags; and (iii) a key to the Kia van. When investigators entered the warehouse at 10.55 pm, they discovered that only one box in the consignment had been opened. The printer had been removed from that box, the paper tray taken out, and the substituted package removed from that tray. The package had been cut open and the surveillance devices removed. A hard case for the Hawk Sweep electronic scanner and digital scales were also found at the warehouse. Mr Kanati's fingerprints were found on two of the unopened boxes in the warehouse. Mr Rohen's left palm print was found on the top of one of the unopened boxes. DNA and fingerprint analysis of items seized from the warehouse and of the Kia van did not reveal any match to Mr Awad. However, Mr Awad's fingerprints were found on the vacuum sealer in the backpack seized by police when they searched his car following the arrest. The prosecution case was that Mr Awad and Mr Tambakakis got into the Kia van shortly prior to 6.25 pm, when it was driven to the warehouse. At the warehouse, Mr Awad and Mr Tambakakis helped to unload the consignment and scan it for surveillance devices with the Hawk Sweep electronic scanner (with the sounds of scanning being detected on the listening device), before leaving at 6.55 pm. On the prosecution case, therefore: (i) Mr Awad was in possession of the substance in the consignment from 6.25 pm until 6.55 pm when he left the warehouse; and (ii) Mr Tambakakis was in possession of the substance in the consignment from the time he collected the consignment from Overall Auto Care on 8 May 2017 until it was unloaded from the Kia van in the warehouse. The defence cases Mr Awad did not give evidence. As the trial judge instructed the jury, Mr Awad's case relied "significantly on the evidence of Mr Tambakakis". Mr Tambakakis gave evidence as follows. Mr Tambakakis denied any intention to possess cocaine. He said that he had acted at the direction of his personal trainer and business partner, Mr Edwards. The core of Mr Tambakakis' defence was that he thought the consignment contained steroid tablets. Mr Tambakakis said that Mr Edwards had previously received a shipment of large terracotta pots containing steroids and that he and Mr Edwards had vacuum sealed and repackaged at least five kilograms of those steroids at the warehouse. They had packaging left over afterwards and Mr Edwards had remarked, "we'll end up using all these bottles", leading Mr Tambakakis to understand that "more [steroids] would come". Mr Edwards and Mr Tambakakis intended to distribute steroids to make money for a proposed business at the warehouse involving recycling clothes. They needed money for the business in order to pay for the bins in which the clothes would be collected. The reason Mr Tambakakis had leased the warehouse in a false name was that he had a credit default on his record. Mr Tambakakis transported the consignment to the Randor Street yard on 8 May 2017 as a favour to Mr Edwards, who he believed was in Thailand. Mr Edwards had promised to pay him $2,500 "for an hour's work". That evening, Mr Tambakakis drove around the streets near the Randor Street yard checking parked cars because Mr Edwards had told him that the consignment was "worth a stack" and wanted to check if law enforcement was aware of the steroid shipment. The Jeep car that Mr Tambakakis drove was owned by Mr Edwards, but Mr Tambakakis knew that it had false plates. Mr Tambakakis accepted in cross-examination that he met with Mr Awad on the evening of 8 May 2017, but he said that it was "just a social meeting" to "catch up for a bite to eat". During that meeting, they agreed that Mr Awad would receive sample bottles of steroids for a friend who would buy more if his friend was satisfied. On 9 May 2017, Mr Edwards asked Mr Tambakakis to help with repackaging the steroids. Mr Tambakakis initially refused but then agreed after Mr Edwards offered him a cut of the profits: "he said, 'I'll give you 10 per cent, it should be about 20 or 30 K.'" On 10 May 2017, at the direction of Mr Edwards, Mr Tambakakis drove the Kia van to Mr Kanati's house. Mr Awad picked Mr Tambakakis up from Mr Kanati's house. As Mr Awad was interested in obtaining samples of the steroids, Mr Tambakakis had asked Mr Awad to pick him up and said that they could go to get the steroids together, requesting that he bring "a set of scales and a cryovac machine". But Mr Awad had not brought scales, so they drove to Mr Tambakakis' apartment where Mr Tambakakis obtained scales and gloves to package steroids. They then drove to the Autobarn in Airport West. It was planned that Mr Tambakakis and Mr Awad would enter the Kia van and go to the warehouse. However, after they had parked in the Autobarn car park and walked to the Kia van, Mr Awad did not get in the van. Instead, Mr Tambakakis took Mr Awad's backpack containing the cryovac machine and put it in the Kia van, before Mr Tambakakis got into the driver's seat. The only people in the Kia van were Mr Tambakakis and Mr Rohen. Mr Edwards had expressed a concern that his friends would "rip him off" so Mr Awad did not get into the van. Mr Awad was concerned that "if [Mr Edwards] didn't want his boys to ... know where the warehouse was then he wouldn't want [Mr Awad] to know where the warehouse was". Mr Tambakakis told Mr Awad to wait, and that he would be back in ten minutes. Mr Tambakakis' evidence was therefore that he was seated in the driver's seat of the Kia van and Mr Rohen was seated in the passenger seat. Mr Tambakakis accepted that his voice was recorded on the listening device, remarking to Mr Rohen about the short stature of the previous driver. Mr Tambakakis explained that this remark was prompted by the fact that the driver's seat was "pretty far forward". In that exchange, Mr Tambakakis twice referred to the previous driver in the third person, although on his own account the immediately previous driver was Mr Rohen, the person to whom he was speaking. Mr Tambakakis maintained in cross-examination that he was not talking about Mr Rohen. When Mr Tambakakis arrived at the warehouse with Mr Rohen, a friend of Mr Edwards who Mr Tambakakis knew as "Sam" was already there. Mr Rohen and Sam scanned the boxes in the Kia van and Mr Tambakakis helped them move the boxes into the warehouse. Sam opened one of the boxes, walked into the warehouse kitchenette with a package, and then came out "pretty frantic and freaked out", telling the others that it was "off" and to get out. Mr Tambakakis left with Mr Rohen and Sam in the Kia van. The others soon got out of the Kia van and Mr Tambakakis drove back to King Street where, upon seeing Mr Awad, he parked the Kia van, threw Mr Awad's backpack to him, and took the scanner that had been left in the Kia van. Mr Tambakakis and Mr Awad then walked back to the Autobarn car park and drove away in Mr Awad's car. The central issue in the trials of Mr Awad and Mr Tambakakis Mr Awad and Mr Tambakakis were not charged with any conspiracy to commit an offence, pursuant to s 11.5 of the Criminal Code (Cth). The prosecution also chose not to present a case against Mr Awad that, pursuant to s 11.2(1) of the Criminal Code (Cth), he aided, abetted, counselled or procured the commission of an offence by Mr Tambakakis. The sole issue in dispute at trial was therefore whether Mr Awad and Mr Tambakakis took possession of the substance that was substituted for the cocaine. In relation to each of Mr Awad and Mr Tambakakis β for whom the prosecution case was based on knowledge not recklessness β this question reduced to whether, in the belief that the consignment contained a border-controlled drug, they received, had physical possession, or had control or joint control of the consignment32. Consequently, the credibility of Mr Tambakakis' evidence was at the heart of the trials of Mr Tambakakis and Mr Awad. Section 44J of the Jury Directions Act Prior to 2017, a "conventional comment" by a trial judge to a jury in Victoria, as Callaway JA expressed it in Haggag33, was that "whilst there is really no more that an innocent person can do than give sworn evidence and submit to cross-examination, a guilty person may choose to brazen it out in the witness box". This was described in R v Buckley34 as a "standard direction" and was said in R v McMahon35 to be "unexceptionable". In a 2017 review by the Department of Justice and Regulation, under the heading "Problems with the current law", it was observed that this direction appeared to be unique to Victoria and that it did not appear in the model directions in Queensland, New South Wales, the United Kingdom, or Canada. The review considered a prohibition upon the direction proposed by the Jury Directions and Other Acts Amendment Bill 2017, saying that the direction36: "contains two competing propositions that arguably neutralise each other. The competing nature of the directions may confuse the jury and have the unintended consequence of focusing attention on the motivation of an accused to give particular evidence given their interest in the outcome of a trial". In the second reading speech of the Bill, the Attorney-General described this, and related directions, as "confusing, unnecessary or inaccurate"37. The Explanatory Memorandum accompanying the Bill also noted that the proposed 32 Criminal Code (Cth), s 300.2, definition of "possession". (1998) 101 A Crim R 593 at 598. (2004) 10 VR 215 at 231 [56]. (2004) 8 VR 101 at 116 [28]. 36 Victoria, Department of Justice and Regulation, Jury Directions: A Jury-Centric Approach Part 2 (2017) at 12-15. 37 Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 22 February s 44J "prohibits certain common law directions relating to the evidence of an accused that are confusing, unhelpful and arguably inaccurate"38. The relevant provisions of the Jury Directions Act commenced on 1 October 2017. Sections 44J and 44K provide: "44J Prohibited directions in relation to evidence of an accused The trial judge must not direct the jury about any of the following matters in relation to the evidence of an accused β (a) whether the accused is under more stress than any other witness; that the accused gave evidence because β a guilty person who gives evidence will more likely be believed; or an innocent person can do nothing more than give evidence. Note This section prohibits the trial judge from giving directions to the jury about particular matters. This does not limit the obligation of the trial judge to refer the jury to the way in which the prosecution and the accused put their cases in relation to the issues in the trial β see section 65. 44K Abolition of common law rules (1) Any rule of common law under which a trial judge is prohibited from directing the jury on the interest a witness or an accused may have in the outcome of a trial is abolished. (2) Any rule of common law under which a trial judge is required or permitted to direct the jury about the matters referred to in section 44J in relation to the evidence of an accused is abolished. 38 Victoria, Legislative Assembly, Jury Directions and Other Acts Amendment Bill 2017, Explanatory Memorandum at 8. Notes Subsection (1) abolishes the rule attributed to Robinson v R [1991] HCA 38; (1994) 180 CLR 531. Subsection (2) abolishes directions based on β R v Haggag [1998] VSC 355; (1998) 101 A Crim R 593; and R v McMahon [2004] VSCA 64; (2004) 8 VR 101; and R v Buckley [2004] VSCA 185; (2004) 10 VR 215. Section 4 applies generally to override any rule of law or practice to the contrary of this Act." The prohibited direction and the redirection In the critical part of the trial judge's charge relevant to these appeals, the trial judge directed the jury as follows: "Mr Tambakakis chose to give evidence in his own defence, he did not have to do that. An accused person has the right to remain silent in court, they are not a compellable witness, he cannot be compelled to give evidence. So, he chose to. In choosing to give evidence, Mr Tambakakis undertook to tell the truth, and he also submitted himself to cross-examination which is the way lawyers test a witness' credibility and truthfulness, and he was cross-examined over an extensive period of time by [the prosecutor]. Now, there are two factors that are significant that you should have regard to when you are assessing Mr Tambakakis' evidence. Firstly, in a criminal trial, there is nothing more [that] an innocent [person] can do than give evidence in his own defence and subject himself to cross-examination, and that is what occurred here. On the other hand, secondly, a guilty person might decide to tough out cross-examination in the hope or belief that he will be more likely to be believed and his defence accepted if he takes the risk of giving evidence. You should consider both of these observations when evaluating Mr Tambakakis' evidence. In the end, it is for you to determine whether or not you accept it and what weight you give to it. In making this determination, you should treat the accused's evidence in exactly the same way as you would treat the evidence of any other witness. However, you must bear in mind, ladies and gentlemen, that an accused giving evidence in his own defence is probably under more stress than any other witness giving evidence in a trial. And if you were assessing Mr Tambakakis' demeanour, which of course you would have been when he gave his evidence, have regard to that fact." At the conclusion of the day on which this direction was given, and after the jury had retired, senior counsel for Mr Tambakakis informed the trial judge that the direction was prohibited by s 44J of the Jury Directions Act. He told the trial judge that he was concerned how the direction could be corrected "without highlighting the issue" and added, with the later agreement of the prosecutor, that it was "better to say nothing". Senior counsel for Mr Tambakakis asked the trial judge instead to direct that if the jury were to find that it was reasonably possible that Mr Tambakakis believed that the secreted substance was steroids, then they must acquit him. The trial judge had already given a direction to the jury that if they rejected the evidence of Mr Tambakakis then they should put his evidence to one side rather than finding him guilty. But if they accepted his evidence as reasonably possible then they would find him not guilty. That is broadly a direction of the nature described by Brennan J in his dissenting reasons in Liberato v The Queen39, as modified by four members of this Court in De Silva v The Queen40. His Honour repeated this modified Liberato direction to the jury on the morning after the prohibited direction had been given. A substantial miscarriage of justice within s 276(1)(b) of the Criminal Procedure Act On an appeal that concerns only an error of law in the course of the trial, s 276(1)(b) of the Criminal Procedure Act relevantly provides that the Court must allow the appeal if the appellant satisfies the Court that "as the result of an error or an irregularity in, or in relation to, the trial there has been a substantial miscarriage of justice". Otherwise, the Court must dismiss the appeal41. Section 276 of the Criminal Procedure Act is not in the same form as the common form criminal appeal provision, which was its legislative predecessor. As the majority of this Court, French CJ, Hayne, Crennan, Kiefel and Bell JJ, said in Baini v The Queen42, "comparing a statute with its legislative predecessor (and cases decided under that predecessor) is only a useful exercise if doing so illuminates the actual text of the new provision". The interpretation of s 276 must (1985) 159 CLR 507 at 515. (2019) 268 CLR 57 at 64 [12]. 41 Criminal Procedure Act 2009 (Vic), s 276(2). (2012) 246 CLR 469 at 478 [20]. therefore begin with the text of that provision and the decision of this Court in Two of the non-exhaustive categories of substantial miscarriage of justice described by the majority in Baini43 are where: (i) "there has been a serious departure from the prescribed processes for trial"; or (ii) "there has been an error or an irregularity in, or in relation to, the trial and the Court of Appeal cannot be satisfied that the error or irregularity did not make a difference to the outcome of the trial". As their Honours later said, the first category involves a departure "from trial processes (sufficiently described for present purposes as 'serious' departures), whether or not the impact of the departure in issue can be determined"; and the second category involves "an error which possibly affected the result of the trial"44. As to the first category β like appeals under the common form criminal appeal provision β where the conclusion is reached that an error is a fundamental one, which "goes to the root of the proceedings"45 or amounts to "a serious breach of the presuppositions of the trial"46, the demonstration of that error by the appellant will, of itself, establish a substantial miscarriage of justice. That is, a fundamental error will result in a substantial miscarriage of justice irrespective of whether the Court of Appeal considers that the error could have affected the result of the trial. As to the second category, the majority in Baini observed47: "If it is submitted [by the respondent] that a guilty verdict was inevitable, an appellant need not prove his or her innocence to meet the point. An appellant will meet the point by showing no more than that, had there been no error, the jury may have entertained a doubt as to his or her guilt. As a practical matter, it will then be for the respondent to the appeal (2012) 246 CLR 469 at 479 [26]. (2012) 246 CLR 469 at 481 [33]. 45 Wilde v The Queen (1988) 164 CLR 365 at 373; Krakouer v The Queen (1998) 194 CLR 202 at 211 [21]; Hofer v The Queen (2021) 95 ALJR 937 at 950 [51]; 395 ALR 46 Weiss v The Queen (2005) 224 CLR 300 at 317 [46]; Lane v The Queen (2018) 265 CLR 196 at 212 [57]; Hofer v The Queen (2021) 95 ALJR 937 at 954 [72]; 395 ALR (2012) 246 CLR 469 at 481 [31]. to articulate the reasoning by which it is sought to show that the appellant's conviction was inevitable." In other words, once the appellant shows that an error of law had the capacity to affect the result of the trial, then as a practical matter the Crown will be required to show that the appellant's conviction was nevertheless inevitable48. However, it may also be the case that the Court is not in a position to assess inevitability because the error will be of a kind that will prevent the Court from reaching that conclusion on the record of the trial, given the natural limitations attending the appellate task49. Once the appellant has shown an error of law had the capacity to affect the result of the trial, if the Court is not satisfied, or is unable to be satisfied, that the conviction was inevitable on the record of the trial, the appeal must be upheld. The majority of the Court of Appeal conclude that there was no substantial miscarriage of justice In the Court of Appeal, and in this Court, there was no dispute that the trial judge's direction, prohibited by s 44J, was an error in the trials within the meaning of s 276(1)(b) of the Criminal Procedure Act. Putting to one side the other grounds of appeal raised by Mr Awad and Mr Tambakakis, which were rejected by the Court of Appeal and for which special leave was not sought, the sole remaining issue was whether the contravention of s 44J by the trial judge resulted in a substantial miscarriage of justice. Mr Awad and Mr Tambakakis relied, as alternatives, on each category of substantial miscarriage of justice described above. In relation to the first category, the Crown submitted to the Court of Appeal that a contravention of s 44J does not necessarily involve a fundamental departure from the trial process. In relation to the second category, the Crown submitted that each appellant's conviction was inevitable: (i) because the nature and effect of the error could not have distracted the jury from their task; or (ii) having regard to the entire record. The Court of Appeal unanimously rejected the submission by Mr Awad and Mr Tambakakis that a contravention of s 44J was such a fundamental error that, without more, it would always result in a substantial miscarriage of justice50. However, the majority of the Court of Appeal accepted the Crown's submission 48 See Mraz v The Queen (1955) 93 CLR 493 at 514-515; TKWJ v The Queen (2002) 212 CLR 124 at 143 [63]; Lindsay v The Queen (2015) 255 CLR 272 at 294 [64]. 49 Baini v The Queen (2012) 246 CLR 469 at 480 [29]. 50 Awad v The Queen (2021) 291 A Crim R 303 at 324 [78], 349 [196]. that, when the trial judge's charge was considered as a whole β including the correct directions as to the onus and standard of proof β and in light of the "approach taken to the direction before the enactment of s 44J", the prohibited direction would not have distracted the jury from the performance of their task51. The majority held that, in assessing whether there was a substantial miscarriage of justice, it was not necessary to assess the whole of the record if a misdirection, in the context of the charge as a whole, "was innocuous, had been corrected, or could have had no bearing on the outcome of the trial"52. The majority thus did not consider the Crown's submission that conviction was inevitable having regard to the entire record of the trials. Priest JA dissented. His Honour held that the prohibited direction had "the potential to undermine the jury's consideration and evaluation of crucial evidence" and was unable to conclude that, absent the prohibited direction, the convictions There was a substantial miscarriage of justice in each trial The way that the issue was framed in this Court At the special leave hearing in this Court, the Crown foreshadowed an intention to file a notice of contention in each appeal to contend that the appeal should be dismissed because, having regard to the whole of the record, conviction was inevitable. No notice of contention was ultimately filed. Instead, in the circumstances involving the constraint of hearing time, and taking the view that "it would be inappropriate for this Court to do so at first instance", the Crown submitted that if the appeals were allowed then the matter should be remitted to the Court of Appeal for consideration of whether conviction was inevitable, having regard to the whole of the record. At the hearing of the appeals in this Court, the Crown abandoned its submission that the matter should be remitted. The decision to abandon that submission was properly made because the submission misapprehended the test and onus under s 276(1)(b) of the Criminal Procedure Act. Once an appellant establishes that there was an error and it had the potential to affect the outcome, the appellate court must allow the appeal unless it can be satisfied that the error did not make a difference to the outcome of the trial. (2021) 291 A Crim R 303 at 345 [177]. (2021) 291 A Crim R 303 at 340 [150]. (2021) 291 A Crim R 303 at 325 [83], [87]. Since the Crown no longer seeks to establish that the convictions were inevitable having regard to the whole of the record of the appellants' trials, a new trial should be ordered for each appellant if he establishes that either (i) a contravention of s 44J is a fundamental error which will always constitute a miscarriage of justice, or (ii) as Priest JA held, the prohibited direction, in the context of the charge as a whole, had the potential, or capacity, to affect the result of the trials. For the reasons below, Priest JA was correct. A contravention of s 44J is not a fundamental error Mr Awad and Mr Tambakakis relied on the formulation by the majority in Baini54 that a fundamental error occurs where "there has been a serious departure from the prescribed processes for trial". It was submitted that the breach of s 44J was a serious departure from a legislatively prescribed process for trial, compliance with s 44J being, as Mr Awad submitted, "an essential means of securing a fair trial according to law". In using the expression "serious departure from the prescribed processes for trial", a paraphrase of s 276(1)(b), the majority in Baini were not suggesting a formula for ready application. The expression is no more capable of direct application than other well-used expressions, such as errors that go "to the root of the proceedings" or amount to "a serious breach of the presuppositions of the trial". As the majority in Baini55 said, "paraphrases do not, and cannot, stand in the place of the words used in the statute". The more absurd the outcome of requiring a new trial or an acquittal for any breach of a legislative provision, the less likely that Parliament intended that outcome. Although it might be expressed in mandatory terms, in circumstances where a statutory provision can be contravened in a variety of ways, with effects that range from the most serious to the very trivial, Parliament should rarely be taken to have intended that any breach of the provision be treated as a substantial miscarriage of justice. This reflects the position at common law. The common law position can be seen in Glennon v The Queen56. In that case, the trial judge directed the jury that they could use the silence of the applicant to test the veracity of his evidence. The applicant submitted that the misdirection on his right to silence was so fundamental an error that, without more, it resulted in a substantial miscarriage of justice. Although this Court ultimately concluded, (2012) 246 CLR 469 at 479 [26]. (2012) 246 CLR 469 at 476 [14]. (1994) 179 CLR 1. on consideration of the whole of the record, that conviction was not inevitable57, this submission of fundamental error was rejected. Mason CJ, Brennan and Toohey JJ said that "[a]lthough the right to silence is a fundamental right of any accused person, it cannot be said that any misdirection on that subject is a fundamental irregularity"58. Deane and Gaudron JJ said that "a misdirection of that kind is ordinarily one that must be evaluated in the light of the issues in the trial and the way in which the trial was conducted"59. The same is true of a direction prohibited by s 44J. An example that illustrates the absurdity of a conclusion that Parliament intended that any breach of s 44J would result in a substantial miscarriage of justice, requiring a new trial or an acquittal, is where the breach is to the advantage of an accused. Indeed, that occurred in this case. In giving the directions set out above, the trial judge breached s 44J(a) by directing the jury that the accused was under more stress than any other witness. Unsurprisingly, no ground of appeal alleged that the giving of that prohibited direction had resulted in a substantial miscarriage of justice. In circumstances where Mr Tambakakis had said in cross-examination that he was under pressure and his counsel had reiterated that in his closing address, that direction by the trial judge would have been to the advantage of Mr Awad and Mr Tambakakis. The Court of Appeal was correct to reject the appellants' submission that any breach of s 44J would result in a substantial miscarriage of justice. The contravention of s 44J had the capacity to affect the result The majority of the Court of Appeal concluded that the prohibited direction did not result in a substantial miscarriage of justice "by reference to the part that error or irregularity played in the wider context of the trial, without assessing the whole of the record to determine whether a finding of guilt was the only conclusion reasonably open"60. The effect of this reasoning is that, no matter how strong the defence cases were, the giving of the prohibited direction had no capacity to affect the result of the trials. There might be cases in which an appellate court dismisses an appeal without considering the whole of the record because the error of law had no capacity to affect the result of the trial. An example given by Gleeson CJ is the (1994) 179 CLR 1 at 9, 13. (1994) 179 CLR 1 at 8. (1994) 179 CLR 1 at 12. 60 Awad v The Queen (2021) 291 A Crim R 303 at 340 [149]. admission of inadmissible evidence to prove a fact against an accused where the accused later admits that fact61. The same is true for some errors of law under the Jury Directions Act. Suppose a trial judge gives a required direction without first inviting submissions from the prosecution and defence counsel as required under s 16(2) of the Jury Directions Act. If both the prosecution and defence counsel would necessarily have supported such an essential direction, the error of law in failing to comply with s 16(2) would have no capacity to affect the result of the trial. Even without consideration of the whole of the record, the error can be seen to involve no substantial miscarriage of justice, perhaps because it involved no miscarriage of justice at all. However, where the appellant has demonstrated that an error of law has occurred in or in relation to their trial, the appellate court will need to be satisfied that the error was plainly so innocuous that it could not possibly have affected the outcome in order to dismiss the appeal on that basis. If that high threshold of satisfaction cannot be reached, then the court must assess the inevitability of the conviction on the whole of the record. Where the error is a particular misdirection to a jury, it will usually be necessary to focus upon the specific misdirection when considering whether the misdirection had the capacity to deflect the jury from their fundamental task of deciding whether or not the prosecution has proved the elements of the charged offence beyond reasonable doubt. That may commonly be the case where the misdirection was not trivial or innocuous and, in the context of the whole of the charge, it was "open" for the jury to follow the misdirection62. For instance, a trial judge may give unexceptionable general directions on matters such as the presumption of innocence and the onus and standard of proof, but nonetheless also give a particular misdirection that tends to contradict those general directions and results in a substantial miscarriage of justice63. The nature of the error may be such that the court cannot be satisfied that it was so innocuous that the jury would have disregarded it, or that the correct directions were too general to counteract the particular potential effect of the misdirection on the jury's task. In the present case, senior counsel for the Crown submitted that the prohibited direction was an error that was so innocuous that the jury would have disregarded it. It was submitted that the standard direction was abolished only 61 Weiss v The Queen (2005) 224 CLR 300 at 302. 62 Hargraves v The Queen (2011) 245 CLR 257 at 277 [46]. 63 See, eg, Robinson v The Queen (1991) 180 CLR 531 at 534-535; Azzopardi v The Queen (2001) 205 CLR 50 at 75-76 [71]-[72]; GBF v The Queen (2020) 271 CLR because it was "no longer regarded as particularly helpful", rather than because it gave rise to any risk of impermissible reasoning by the jury. Further, it was submitted that in the prohibited direction "one comment balances out the other". In other words, the invitation to reason on the basis that Mr Tambakakis was guilty was balanced by the invitation to reason on the basis that he was innocent. The attempt by the Crown to minimise the effect of the prohibited direction should not be accepted. It is not to the point that the direction had previously been regarded as a standard direction in Victoria, albeit uniquely. It was prohibited by Parliament because it was confusing, unnecessary, or inaccurate. As the majority of the Court of Appeal correctly observed, the trial judge's prohibited direction invited "consideration, from the perspective of an accused, as to why the person may have chosen to give evidence"64. And that consideration was to be undertaken on the basis that Mr Tambakakis was innocent or guilty. If the jury were to have accepted the invitation and to have speculated that Mr Tambakakis was guilty independently of their consideration of the whole of the evidence, then the effect of the prohibited direction would have been to invite the jury "to engage in circular reasoning: (a) assume sub silentio that the accused is guilty; (b) use that assumption to discount his or her evidence; and (c) having discounted that evidence, find that the accused is guilty"65. required them, before The two aspects of the prohibited direction did not "balance" each other out. The jury were not instructed that the presumption that Mr Tambakakis was not to approach guilty Mr Tambakakis' evidence only on the basis that "there is nothing more [that] an innocent [person] can do than give evidence in his own defence and subject himself to cross-examination". Instead, it was left open for the jury to approach Mr Tambakakis' evidence on the basis that "a guilty person might decide to tough out cross-examination in the hope or belief that he will be more likely to be believed and his defence accepted if he takes the risk of giving evidence". reaching any conclusions, By leaving the jury with the choice to approach Mr Tambakakis' evidence on the a priori basis that he was a guilty person deciding to "tough out cross-examination", there was a conflict with the directions given on the onus and standard of proof. As this Court said in Robinson v The Queen66, if the presumption of innocence "is to have any real effect in a criminal trial, the jury must act on the basis that the accused is presumed innocent of the acts which are the subject of the 64 Awad v The Queen (2021) 291 A Crim R 303 at 343 [167]. 65 Haggag (1998) 101 A Crim R 593 at 598. (1991) 180 CLR 531 at 535-536. indictment until they are satisfied beyond reasonable doubt that he or she is guilty of those acts". The Crown also submitted that the trial judge had given a number of directions that mitigated the potential damage arising from the prohibited direction. The most immediate of these was the direction given by the trial judge after the prohibited direction to "treat the accused's evidence in exactly the same way as you would treat the evidence of any other witness". The trial judge repeatedly told the jury that the assessment of all the evidence was a matter for them. The trial judge correctly directed generally about the onus and standard of proof. The trial judge also reiterated on several occasions that each accused did not need to prove his innocence and that this did not change because Mr Tambakakis decided to give evidence. And the modified Liberato direction was given and subsequently repeated. These correct directions mitigated the damage caused by the prohibited direction. But, for three reasons, they did not entirely remove the capacity of the prohibited direction to affect the result of the trials. In other words, and "expressed at a high level of abstraction", there remained the capacity for the prohibited direction to "deflect the jury from its fundamental task of deciding whether the prosecution proved the elements of the charged offence beyond reasonable doubt"67. First, the trial judge's modified Liberato direction on how the jury should approach the Crown case in circumstances where Mr Tambakakis had given evidence was directed to what the jury should do after they had decided whether or not to accept his evidence in whole or in part. These directions did not address the approach the jury should take when assessing the credibility or reliability of his evidence, and so could not mitigate the effect of the prohibited direction on that assessment. Indeed, in written submissions the Crown identified only one aspect of the charge, other than the misdirection, that addressed the manner in which the jury should assess or evaluate Mr Tambakakis' evidence. That was when, immediately after the misdirection, the trial judge told the jury to "treat the accused's evidence in exactly the same way as you would treat the evidence of any other witness". Secondly, despite the mitigating effect of the correct directions, it remained the case that the jury had been effectively instructed in contradictory terms. Without a redirection to the jury requiring them to disregard the prohibited direction β which, contrary to the concession by senior counsel for Mr Awad, may not have been sufficient in the circumstances of this case to ameliorate the error to the extent that it was plainly so innocuous that it could not have possibly affected 67 Hargraves v The Queen (2011) 245 CLR 257 at 277 [46]. the outcome of the trials β it remained possible that the jury would speculate as to the reason that Mr Tambakakis gave evidence, and that confusion might ensue concerning the onus and standard of proof in the assessment of Mr Tambakakis' evidence. Thirdly, even if the prospect of confusion was small, it was highly significant in circumstances where the credibility of Mr Tambakakis was central to both his defence and Mr Awad's defence. The trial judge correctly directed the jury that there was "one significant factual issue" that they needed to resolve in relation to Mr Tambakakis. That issue was whether the prosecution had proved that Mr Tambakakis knew that the consignment contained a border-controlled drug. The credibility of Mr Tambakakis, in turn, was central to Mr Awad's defence that (as Mr Tambakakis said) Mr Awad did not get into the Kia van and thus did not possess the substance in the consignment, and that (consistently with the account of Mr Tambakakis) Mr Awad believed the substance in the consignment to be steroids. In assessing Mr Tambakakis' credibility, many questions may have arisen for the jury, including: Did Mr Tambakakis collect the consignment as a favour to Mr Edwards? Why had he previously been involved in illegal importation and distribution of steroids? How plausible was his explanation about slowly driving down Randor Street on the evening that the consignment had been delivered? Why was he driving a Jeep car that he said was owned by Mr Edwards, knowing that it had false number plates? Did Mr Tambakakis meet with Mr Awad only for social reasons on the very same day that the consignment arrived? If the only people in the Kia van at the time of the recorded conversation about the size of the previous driver were himself and Mr Rohen (the immediately previous driver on Mr Tambakakis' account), why would Mr Tambakakis have referred to the previous driver twice in the third person? Was it plausible that the vacuum sealer was being used for packaging steroids? Was it believable that Mr Tambakakis rented the warehouse in a false name due to his concerns about credit default? Was Mr Tambakakis' evidence plausible that $22,000 was paid annually in rent for the warehouse but that he and Mr Edwards could not afford to purchase the bins in which the clothing was to be deposited for recycling? In the context of the trials of Mr Awad and Mr Tambakakis, therefore, with the importance of the jury's assessment of Mr Tambakakis' credibility, the prohibited direction had the capacity to deflect the jury from their task and thus the potential to affect the result of the trials. The Court of Appeal could only have concluded that conviction was inevitable by assessing the prohibited direction in light of the whole of the record, including all of the issues related to Mr Tambakakis' credibility and any natural limitations attending the appellate task which may have prevented such a conclusion. It may be that the natural limitations arising from the Court of Appeal not having seen Mr Tambakakis give evidence would have prevented such a conclusion. But since the Crown no longer seeks remittal of the appeals to determine the inevitability of the convictions, and since the parties made no submissions on the substance of that issue, this Court should not attempt to determine it. Conclusion In circumstances in which the Court of Appeal did not consider the whole of the record, the Court of Appeal should have concluded that there was a substantial miscarriage of justice. Orders should be made in each appeal as follows: Appeal allowed. Set aside paragraph 2 of the orders made by the Court of Appeal of the Supreme Court of Victoria dated 18 October 2021 dismissing the appeal and, in its place, order that: the appeal against conviction be allowed; the appellant's conviction be set aside; and there be a new trial. STEWARD J. The facts of these matters are set out in the reasons of Gordon and Edelman JJ, which I gratefully adopt. I agree with the majority that this was not a case in which it could be said that the misdirection (set out below) constituted a serious departure from the prescribed processes for a criminal trial68. That leaves for consideration the appellants' alternative contention, as described by Gordon and Edelman JJ69, made in reliance upon s 276(1)(b) of the Criminal Procedure Act 2009 (Vic). The misdirection took place in the context of a detailed charge to a jury. It is convenient to set out the misdirection in full: "Now, there are two factors that are significant that you should have regard to when you are assessing Mr Tambakakis' evidence. Firstly, in a criminal trial, there is nothing more [that] an innocent [person] can do than give evidence in his own defence and subject himself to cross-examination, and that is what occurred here. On the other hand, secondly, a guilty person might decide to tough out cross-examination in the hope or belief that he will be more likely to be believed and his defence accepted if he takes the risk of giving evidence. You should consider both of these observations when evaluating Mr Tambakakis' evidence." Mr Tambakakis was one of three accused, the others being Mr Kanati (who was not convicted and is not a party to these appeals) and Mr Awad. Mr Tambakakis gave evidence; Mr Awad did not. Mr Tambakakis' evidence was critical to the outcome of his own trial as well as the outcome of the separate trial of Mr Awad (as a matter of convenience, the trials were heard together). It was common ground that the direction should not have been given because of s 44J of the Jury Directions Act 2015 (Vic) ("the JD Act"), the terms of which are set out in the reasons of Gordon and Edelman JJ70. It was "an error or an irregularity" for the purposes of s 276(1)(b) of the Criminal Procedure Act. In determining whether an error or an irregularity has resulted in a substantial miscarriage of justice, it is not always necessary to assess the whole of the record to determine whether a finding of guilt was or was not the only conclusion reasonably open. In the Court of Appeal below, McLeish and Niall JJA were, with very great respect, correct to observe that an examination of the nature 68 Being the third category of case identified by French CJ, Hayne, Crennan, Kiefel and Bell JJ in Baini v The Queen (2012) 246 CLR 469 at 479 [26]. 69 See [78], [92]-[106], being the second category of case identified by French CJ, Hayne, Crennan, Kiefel and Bell JJ in Baini v The Queen (2012) 246 CLR 469 at 70 See [70]. of the error or irregularity may show that it could have made no difference to the outcome of the trial71. The error may have been entirely harmless or of "no significance"72. As French CJ, Heydon, Kiefel and Bell JJ observed in Jones v The "In Weiss v The Queen it was said that there are cases in which it is possible for an appellate court to conclude that an error at trial would have had no significance in determining the verdict. This was such a case. Keane JA described the impugned direction in the appellant's case as innocuous. He observed that it had occasioned no real forensic disadvantage to the appellant. Given the issues in the trial and the conduct of it, which included the trial judge's direction as to the use the jury might make of the evidence of [the co-accused's] bad character, this assessment of the effect of the misdirection was well open." (footnotes omitted) It follows that, in the case of a given misdirection, McLeish and Niall JJA were right to state that74: "[T]here will have been no substantial miscarriage of justice if, having regard to the direction in the context of the charge as a whole, the erroneous direction was innocuous, had been corrected, or could have had no bearing on the outcome of the trial." (footnote omitted) The foregoing expressions of principle do not involve any alteration to the shifting persuasive onus imposed by s 276(1)(b)75. Here, the appellants established that an error or irregularity had taken place. It was thereafter a matter for the Crown to show that there had been no resulting substantial miscarriage of justice. In this case, that meant demonstrating that the error or irregularity "was innocuous, had been corrected, or could have had no bearing on the outcome of the trial"76. For the 71 Awad v The Queen (2021) 291 A Crim R 303 at 339-340 [149]-[150]. 72 Weiss v The Queen (2005) 224 CLR 300 at 317 [43] per Gleeson CJ, Gummow, Kirby, Hayne, Callinan and Heydon JJ. (2009) 83 ALJR 671 at 678 [30]; 254 ALR 626 at 634. 74 Awad v The Queen (2021) 291 A Crim R 303 at 340 [150]. 75 See Baini v The Queen (2012) 246 CLR 469 at 480-481 [30]-[31] per French CJ, Hayne, Crennan, Kiefel and Bell JJ; Andelman v The Queen (2013) 38 VR 659 at 681 [101]-[102] per Maxwell P, Weinberg and Priest JJA. 76 Awad v The Queen (2021) 291 A Crim R 303 at 340 [150] per McLeish and Niall JJA. reasons which follow, and with very great respect to the majority, the Crown has established that the misdirection here was an error or irregularity of this kind. At the outset, three propositions should be noted. First, a misdirection cannot be characterised as innocuous or harmless, and will instead be productive of a substantial miscarriage of justice, if it "deflect[ed] the jury from [their] fundamental task of deciding whether the prosecution proved the elements of the charged offence beyond reasonable doubt"77. Secondly, that inquiry requires a consideration of the entire charge to the jury by the trial judge78. In order to evaluate the true nature and possible effect of a misdirection, it must be considered in its entire context. Thirdly, as a matter of logic, a misdirection may be capable of being corrected or cured by the trial judge during his or her charge79. A misdirection will have been effectively corrected or cured when it can be said of it that it no longer had the effect of deflecting the jury from their fundamental task. In applying the foregoing test, care must be taken not to raise the bar too high and insist upon a trial which is immaculate. A misdirection is either innocuous or harmless, or it is not. With profound respect, it makes little sense, and may lead to error, to define grades of what is innocuous or what is harmless. In that respect, it is well established that80: "A fair trial according to law does not mean a perfect trial, free from possible detriment or disadvantage of any kind or degree to the accused". It is thus better to express the test consistently with what this Court said in Hargraves v The Queen81 by reference to that which has deflected the jury away 77 Hargraves v The Queen (2011) 245 CLR 257 at 277 [46] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ. 78 Hargraves v The Queen (2011) 245 CLR 257 at 277 [46] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ. 79 See, eg, Webb v The Queen (1994) 181 CLR 41 at 81 per Deane J. See also s 16 of the JD Act, which entitles a judge to give a redirection if there are "substantial and compelling reasons for doing so"; cf s 7, which obliges a judge to correct statements or suggestions made at trial by counsel, or arising in a question from the jury, that are contrary to the Act. 80 Jarvie v The Magistrates' Court of Victoria [1995] 1 VR 84 at 90 per Brooking J, citing Jago v District Court (NSW) (1989) 168 CLR 23 at 49-50, 54 per Brennan J, R v Glennon (1992) 173 CLR 592 at 614-617 per Brennan J and Dietrich v The Queen (1992) 177 CLR 292 at 325 per Brennan J. See also Packard v The Queen (2018) 271 A Crim R 353 at 401-402 [164], [168] per Beach JA and Beale A-JA. (2011) 245 CLR 257. from their fundamental task. Where the misdirection has not so deflected the jury because by its nature it is harmless, or because of the adoption of some successful correction or cure by the trial judge which renders the misdirection harmless or innocuous, there is no substantial miscarriage of justice. Senior counsel for Mr Awad conceded that if the prohibited direction set out above had been expressly corrected by the trial judge, there would have been no substantial miscarriage of justice. He was, however, at pains to emphasise that no such correction had taken place here. The observation of senior counsel for Mr Awad that the misdirection was not expressly corrected should be accepted. But it does not follow that it was not otherwise cured. In that respect, this is not a case where there was a manifest failure by counsel to object to a misdirection at trial82. Senior counsel for Mr Tambakakis promptly raised the misdirection with the trial judge as an exception at the end of the first day of the charge to the jury. When informed, the trial judge stated that he would correct the mistake. Senior counsel submitted that to do so would highlight the error to the jury and that it would be better to say nothing. He submitted that the trial judge should instead make the following direction: "If you find that it's reasonably possible that Mr Tambakakis believed the secreted substance was steroids, then you must acquit him." The trial judge informed counsel that he intended to give this direction anyway. Senior counsel for the Crown was also of the opinion that the misdirection should be "simply left alone". He expressed the view that, in any event, each proposition in the misdirection "balance[d] out the other", a view also reached by the Court of Appeal83. Senior counsel for McLeish and Niall JJA Mr Tambakakis also agreed that the misdirection "was balanced". The trial judge responded by inviting counsel to consider overnight whether the misdirection should be corrected and confirmed again that he would give the direction sought by senior counsel for Mr Tambakakis; indeed, he said he would "emphasize" it. The next day, having had a full opportunity to reconsider the matter, counsel for Mr Tambakakis informed the Court that their position had not changed; they even 82 See, eg, R v Osland [1998] 2 VR 636 at 651-652 per Winneke P, Hayne and Charles JJA; King v The Queen (2012) 245 CLR 588 at 611 [55] per French CJ, Crennan and Kiefel JJ; Mitchell v The Queen [2022] VSCA 32 at [46]-[47] per Maxwell P, Beach and Sifris JJA. See also Dhanhoa v The Queen (2003) 217 CLR 1 at 12-13 [37]-[38] per McHugh and Gummow JJ. 83 Awad v The Queen (2021) 291 A Crim R 303 at 343-344 [167]. opposed a suggestion by the trial judge that he make it clear to the jury that what he had said was only a mere comment and not a direction of law. It was submitted that the vice of the prohibited direction was that it would have confused the jury into thinking both that they were required to make a choice between guilt and innocence and, further, that Mr Tambakakis bore some onus in order to secure the acceptance of his defence. These propensities, it was said, deflected the jury from their task of deciding whether the Crown had "proved the elements of the charged offence beyond reasonable doubt"84. As mentioned already, the issue is not whether the misdirection, in and of itself, might have deflected the jury away from their fundamental task, but rather whether the entire charge, which included the misdirection, might have had such an effect. The trial judge commenced his charge with an orthodox statement that the jury would be bound by his directions of law, but not by any comments he might make about the evidence or the facts. His Honour emphasised: that the prosecution must satisfy the jury of guilt beyond reasonable doubt; that an accused may remain silent and does not have to prove anything; and, in particular, that Mr Tambakakis did not, by giving evidence, "assume some evidentiary onus". His Honour further said that, in giving evidence, Mr Tambakakis undertook to tell the truth and submitted himself to cross-examination, "which is the way lawyers test a witness' credibility and truthfulness". All of this was said before the misdirection took place. Following the misdirection, in a passage that commenced with the words "[i]n the end, it is for you to determine whether or not you accept [Mr Tambakakis' evidence] and what weight you give to it", the trial judge told the jury to treat his evidence "in exactly the same way as you would treat the evidence of any other witness". His Honour then said: "[i]t is also essential, and this is very important in this case, ... that it is for the prosecution to prove its case beyond reasonable doubt". This direction was made repeatedly by the trial judge. His Honour also repeated that it was not for Mr Tambakakis to prove his innocence and that the burden of proof remained on the prosecution "irrespective of what you make of Mr Tambakakis' evidence". The jury were told that: if they thought that Mr Tambakakis' evidence was true, then they were to find him not guilty; if they were not sure about whether his evidence was true, they were to find him not guilty; if they merely preferred the evidence of the prosecution witnesses to that of Mr Tambakakis, they were to find him not guilty; and if they were to reject Mr Tambakakis' evidence, they were then to put that evidence "to one side" and determine whether the Crown had nonetheless proven guilt beyond reasonable doubt. The trial judge made this last 84 Hargraves v The Queen (2011) 245 CLR 257 at 277 [46] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ. Steward direction four times. It was also repeated in the Crown's final address to the jury. Consistently with the direction sought by Mr Tambakakis' defence counsel, the trial judge told the jury that if they thought that it was reasonably possible that Mr Tambakakis believed that he had acquired steroids, they were to find him not guilty. The trial judge repeated this direction after summarising Mr Tambakakis' evidence. Ultimately, it was up to the prosecution to prove beyond reasonable doubt, his Honour said, that Mr Tambakakis knew that a border controlled drug was in the printer boxes. In the case of Mr Awad, amongst other matters, the trial judge charged the jury that if they were to reject Mr Tambakakis' evidence about who was in the van, they were then to put that evidence aside and consider the other evidence relied upon by the Crown to determine whether they were satisfied beyond reasonable doubt that Mr Awad was guilty. The foregoing charge β when "taken as a whole"85 β makes it abundantly clear that the trial judge well cured the effect of his mistaken direction and any propensity it may have had to deflect the jury away from their fundamental task. The jury could not have been under any misapprehension that the onus was entirely on the Crown to prove the guilt of Mr Tambakakis and Mr Awad beyond reasonable doubt. They would clearly have understood that: there was no onus on Mr Tambakakis or Mr Awad; Mr Tambakakis did not change this by giving evidence; and their task was not simply to make a choice between guilt or innocence. That conclusion is supported by three considerations. First, there is the nature of the misdirection. It is conceivable that the two propositions contained in it β one that assumed innocence, followed by one that assumed guilt β balanced each other out and did not steer the jury in any particular direction. Indeed, as already mentioned, that conclusion was accepted by senior counsel for Mr Tambakakis during the charge and by McLeish and Niall JJA on appeal. Whether this is so may not matter. That is because it should be accepted, in any event, that the proposition that a guilty man might enter the witness box as a means of exculpation would be an idea that would occur in the minds of a jury without the need to be told of this possibility. It would have been "something which ... must have been quite obvious to any moderately intelligent human being"86. 85 Hargraves v The Queen (2011) 245 CLR 257 at 277 [46] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ. 86 Haggag (1998) 101 A Crim R 593 at 601-602 per Callaway JA, quoting R v Silk (unreported, Court of Criminal Appeal of the Supreme Court of Victoria, 22 September 1993). Steward Secondly, the charge proceeded in accordance with the solution to the misdirection proposed by senior counsel for Mr Tambakakis. That is also significant. As French CJ, Crennan and Kiefel JJ observed in King v The Queen87, a decision to not seek a redirection by defence counsel at trial, which may be made for a variety of reasons, "informs consideration of the extent to which, taken in context, the direction was likely to confuse or mislead the jury". In R v Osland88, Winneke P, Hayne and Charles JJA made a similar observation in circumstances where "well-experienced" defence counsel had declined to object to certain erroneous directions and omissions at trial that then formed the basis for an appeal against conviction. Their Honours said89: "That, in itself, tends to suggest that, in the context of the trial, those counsel did not regard the directions as other than adequate to convey to the jury the relevant law as it related to the evidence in the trial and the cases being made to the jury on that evidence. It is the obligation of counsel, if he or she thinks that a direction or omission to direct is significant in the context of the trial, to take exception and ask the judge to redirect." A failure to seek an explicit correction of a misdirection will not always preclude a finding of a substantial miscarriage of justice on appeal in respect of that misdirection90. But it will nonetheless be relevant insofar as it "tends to shed [light] on the atmosphere, and the forensic conduct of an accused's counsel, at the trial"91. If there was a substantial risk of the jury being deflected from their task by the misdirection here, it would be expected that defence counsel would have sought an express redirection. That the parties made the deliberate forensic decision not to draw further attention to the misdirection, but rather to correct it by emphasising the burden of proof borne by the prosecution, supports a characterisation of the misdirection as being unhelpful at its highest, rather than as being potentially productive of a substantial miscarriage of justice. Thirdly, today's juries have never been so well educated. It can safely be assumed that jurors are intelligent and rational individuals who will follow the (2012) 245 CLR 588 at 611 [55]. [1998] 2 VR 636 at 651-652. See also R v Defrutos [1998] 2 VR 589 at 600 per Callaway JA; cf General Motors-Holden's Pty Ltd v Moularas (1964) 111 CLR 234 at 242-243 per Barwick CJ. 90 R v Clune [No 2] [1996] 1 VR 1 at 6 per Callaway JA (Winneke P and Crockett A-JA agreeing). 91 Melbourne v The Queen (1999) 198 CLR 1 at 62 [175] per Callinan J. Steward directions of the trial judge and will not be easily confused92. As Keane JA observed in R v D'Arcy93: "High authority confirms that the law does not proceed upon a sceptical view of the intelligence or integrity of juries, or their ability rationally to determine issues of guilt or innocence strictly by reference to the evidence adduced at trial. Rather, the law proceeds upon the assumption that jurors may be relied upon to determine issues of guilt or innocence in accordance with their sworn oath. The administration of criminal justice necessarily depends upon the compliance by jurors with directions from the trial judge to base their verdict on the evidence given before them on the trial and to disregard information otherwise acquired." In Varga v Matri, Priestley JA said94: "The trial judge was of the opinion that the problems caused by the defence's opening could be overcome by the directions he would give concerning them. In stating this view he remarked that he was taking into account that juries must be given credit for education and intelligence. This is an observation with which I agree. Juries are entrusted with serious tasks in the administration of justice and it seems to me to be quite incongruous for appellate courts to treat juries entrusted by the community with those serious tasks, as being less than ordinarily adequate to cope with them." In Roux v Australian Broadcasting Corporation, Cummins J observed95: "I think the responsibility, intelligence, commonsense and robustness of Australian juries is constantly under-estimated. I consider that when persons come together to act as judges of the facts, time and time again it is demonstrated that they do just that β they give verdicts according to the evidence before them. Time and again juries demonstrate they are capable of putting aside extraneous or prejudicial or inflammatory or irrelevant material. ... Juries, in my view, are well capable of acting consonantly with their high function of giving a true verdict according to the evidence." 92 Gilbert v The Queen (2000) 201 CLR 414 at 420 [13] per Gleeson CJ and Gummow J, 425 [31] per McHugh J. [2005] QCA 292 at [28]; cf R v H [1995] 2 AC 596 at 613 per Lord Griffiths. 94 Unreported, Court of Appeal of the Supreme Court of New South Wales, 28 August (1991) 25 ALD 210 at 212. Of course, there may be rare exceptions to the foregoing, but these cannot dictate the rule to be applied in all cases. As explained above, the trial judge's charge was emphatic as to the fundamental task of the jury. His Honour consistently articulated the approach that the jury should take with respect to Mr Tambakakis' evidence, as well as the presumption of innocence to which Mr Tambakakis was entitled and the burden of proof borne by the prosecution. In light of the insignificance of the misdirection in the entire context of the charge and the trust reposed by the criminal justice system in "the integrity and sense of duty of jurors"96, it should be concluded that the jury understood and faithfully applied the trial judge's directions as to their fundamental task of "giving a true verdict according to the evidence". The appeals should be dismissed. 96 R v Glennon (1992) 173 CLR 592 at 615 per Brennan J. |
HIGH COURT OF AUSTRALIA THE QUEEN (CTH) AND VU LANG PHAM APPELLANT RESPONDENT The Queen v Pham [2015] HCA 39 4 November 2015 ORDER Appeal allowed. Set aside the orders of the Court of Appeal of the Supreme Court of Victoria made on 5 September 2014. Remit the matter to the Court of Appeal for determination. On appeal from the Supreme Court of Victoria Representation R J Bromwich SC with D D Gurvich for the appellant (instructed by Commonwealth Director of Public Prosecutions) G A Archer SC with M D Phillips for the respondent (instructed by Victoria Legal Aid) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS The Queen v Pham Criminal law β Sentencing β Federal offences β Consistency β Current sentencing practices β Whether sentencing courts to have regard to current sentencing practices throughout Commonwealth. Criminal law β Appeals against sentence β Manifest excess or inadequacy β Sentencing statistics β Drug importation offences β Whether permissible to assess current sentencing practices by statistical analysis of correlation between sentence and quantity of drug imported. Precedent β Intermediate appellate courts β Use of sentencing decisions of intermediate appellate courts. Words and phrases β "consistency", "courier", "current sentencing practices", "statistics", "yardstick". Crimes Act 1914 (Cth), Pt IB. Criminal Code (Cth), s 307.2. Judiciary Act 1903 (Cth), s 68. Sentencing Act 1991 (Vic), s 5(2)(b). FRENCH CJ, KEANE AND NETTLE JJ. Upon pleading guilty before a judge of the County Court of Victoria (Judge Tinney) to one charge of importing a marketable quantity of a border controlled drug, namely, heroin, contrary to s 307.2(1) of the Criminal Code (Cth), the respondent was convicted and sentenced to eight years and six months' imprisonment with a non-parole period of six years. On appeal to the Court of Appeal of the Supreme Court of Victoria (Maxwell P, Osborn and Kyrou JJA), the sentence was set aside and the respondent was re-sentenced to six years' imprisonment with a non-parole period of four years. By special leave granted on 15 May 2015, the Commonwealth Director of Public Prosecutions appeals to this Court on grounds that the Court of Appeal erred in law by: determining that the respondent should be sentenced in accordance with current sentencing practices in Victorian courts, to the exclusion of sentencing practices throughout the Commonwealth; and adopting an impermissible statistical analysis of comparable cases to determine the objective seriousness of the subject offence. The facts The respondent was born in Vietnam and migrated to Australia with his parents when he was still a child. He left home after completing year 9 at high school and was introduced to illicit drugs. Thereafter he struggled with drug dependency issues up to the time of the subject offending. At the time of sentencing, he had prior convictions for possession and use of drugs, and for offences of dishonesty. He also had a prior conviction for trafficking heroin, which dated back to 1996. On that occasion, he had been released on a community-based order for 12 months, on condition that he perform 40 hours of unpaid community work. In February 2013, the Australian Federal Police began investigating drug importation activities connected with Anh Lan Vo. They believed that Vo was responsible for organising couriers to transport drugs from Vietnam to Australia and, subsequently, organising the trafficking of those imported drugs. During the investigation, the police lawfully intercepted telephone conversations, to which Vo was a party, which disclosed that Vo had facilitated the purchase of airline tickets in the name of the respondent. Police believed that Nettle Vo and her associates had recruited the respondent to bring drugs from Vietnam to Australia. On 4 February 2013, the respondent was issued with an Australian passport by the Department of Foreign Affairs and Trade and, on 6 February 2013, a Vietnam Airlines ticket for return travel from Melbourne, departing Melbourne on 7 February 2013, was issued in the respondent's name. The respondent was originally set to return on 7 March 2013 but that was subsequently altered to 15 March 2013. The Vietnam Airlines flight arrived at Melbourne Airport on Friday, 15 March 2013 with the respondent on board. Officers of the Australian Customs and Border Protection Service received information from the captain and crew that the respondent had required medical attention during the flight for a potential drug overdose, and that a crew member had found two clear plastic packages containing white powder in a bathroom that the respondent had used. Customs officers detained the respondent, who admitted under caution to having ingested heroin whilst on board the flight, that the packages were his and that he guessed that they contained heroin. Subsequent testing established that the packages contained heroin mixed with caffeine and that the weight of pure heroin was 577.1 grams. A marketable quantity of heroin is between two grams and 1.5 kilograms1. The respondent was committed by way of straight hand-up brief on 10 July 2013, after which he entered a plea of guilty to the sole charge on the indictment. The judgments delivered in the Court of Appeal Each member of the Court of Appeal delivered separate reasons for judgment. Maxwell P gave the leading judgment. Near to the outset of his Honour's reasons, he said that "the [respondent] pleaded guilty in the reasonable expectation that he would be sentenced in accordance with current sentencing practices in Victorian courts"2. His Honour annexed a statistical analysis of the results of 32 sentencing decisions of Australian intermediate appellate courts for offences involving a marketable quantity of a border controlled drug in which the accused was a "courier", had pleaded guilty and had no relevant prior convictions. The presentation included a calculation of the quantity imported 1 Criminal Code, s 314.4(1), item 76. 2 Pham v The Queen [2014] VSCA 204 at [10]. Nettle expressed as a percentage of the commercial quantity for each of the different drugs imported (without distinguishing between drugs and precursors) and ranked the cases according to the percentage of the commercial quantity for the given drug in each case. In a further attachment, his Honour presented a graph which plotted what was described as the correlation between the head sentence imposed (in months) and the quantity of the drug imported as a percentage of the commercial quantity, with the results shown separately for Victoria alone and then by way of comparison for all other States taken together. Based on those analyses, his Honour concluded that the sentences imposed in New South Wales, Queensland and Western Australia were substantially greater than sentences imposed in Victoria for offences involving similar quantities of drugs; that the sentence imposed on the respondent was "well outside the range indicated by Victorian practice"; and that, because the respondent would have pleaded guilty with the "reasonable expectation" that he would be sentenced in accordance with current sentencing practices of Victorian courts, the appeal had to be allowed3. Osborn JA observed in his reasons for judgment that an analysis of sentencing statistics by reference only to the weight of the drug imported is at risk of masking differences with respect to other aspects of the culpability of the offender, such as the role of the offender, the relative extent to which the offender stood to profit from the offending and the purpose of the importation. His Honour also noticed that such an analysis may mask significant differences between the personal circumstances of the analysed offenders and thus, as was observed in Wong v The Queen4, a statistical analysis of sentences for an offence which encompasses a very wide range of conduct and criminality is fraught with problems, especially if the number of examples is small. Osborn JA was persuaded, however, that the analysis undertaken by Maxwell P was relevant. His Honour observed that "[i]f a sentence appears to be outside the range ordinarily imposed in generally similar circumstances, that fact invites very close scrutiny of the individual case. The analysis undertaken by the President demonstrates that this is such a case", albeit that "other sentences cannot be definitive of error"5. His Honour then turned to a detailed consideration of the 3 Pham [2014] VSCA 204 at [10]. (2001) 207 CLR 584 at 608 [66] per Gaudron, Gummow and Hayne JJ; [2001] HCA 64. 5 Pham [2014] VSCA 204 at [73]. Nettle respondent's individual circumstances and concluded that, in view of the weight of the drug involved and the respondent's individual circumstances, the sentence imposed in the County Court was manifestly excessive. Kyrou JA stated that the statistics set out in the attachments to Maxwell P's judgment established that the impugned sentence was out of line with current sentencing practices in Victoria. That factor, taken together with the other considerations to which Osborn JA referred, satisfied him that the subject sentence must have resulted from such a misapplication of principle as to warrant appellate intervention. Current sentencing practices The Director of Public Prosecutions submits that Maxwell P erred in holding that the respondent was entitled to expect that he would be sentenced in accordance with current sentencing practices in Victoria as opposed to the relevant range of sentences established across all States and Territories. That contention should be accepted. As Hili v The Queen6 made clear, where a State court is required to sentence an offender for a federal offence, the need for sentencing consistency throughout Australia requires the court to have regard to sentencing practices across the country and to follow decisions of intermediate appellate courts in other States and Territories unless convinced that they are plainly wrong. It follows that to approach the sentencing task on the basis that an offender is entitled to assume that he or she will be sentenced in accordance with current sentencing practices in the State or Territory where the offender is sentenced is an error that is likely to result in just the kind of inconsistency that the Australia-wide approach mandated by Hili is calculated to avoid. Of course, that is not to say that there are not differences between various State and Territory laws concerning trial and conviction, including sentencing laws, which may be picked up and applied to federal offences by s 68 of the Judiciary Act 1903 (Cth). The Australia-wide approach mandated in Hili recognises that, to some extent at least, the effect of s 68 of the Judiciary Act is (2010) 242 CLR 520 at 538 [57] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ; [2010] HCA 45. Nettle "to place the administration of the criminal law of the Commonwealth in each State upon the same footing as that of the State"7. So, for example, a State or Territory aggregate sentence law may be picked up and applied in a manner which results in a different sentence structure in one State or Territory from that which would be imposed for the same federal offence in another State or Territory8. The parole system in one State or Territory may also be so much different from the system in another as to warrant a significant difference between the non-parole period imposed in respect of a federal offence and the non-parole period which would be imposed for the same offence in the other State or Territory9. It might be, too, that the particular difficulties faced by a class of offender in one State or Territory would warrant a significant difference between the sentences imposed for the same offence in other States or Territories10. Nevertheless, such State and Territory sentencing laws as are picked up and applied by s 68 of the Judiciary Act operate only so far as they are applicable and the laws of the Commonwealth do not otherwise provide. They are excluded where applicable Commonwealth sentencing laws leave no room for their application11. To the extent that Pt IB of the Crimes Act 1914 (Cth) specifically or impliedly provides for sentencing considerations which are different from otherwise applicable State and Territory sentencing considerations, the Crimes Act is exclusive. Part IB of the Crimes Act does not specifically provide for sentencing judges to take current sentencing practices into account. Apart from the application of such relevant State or Territory legislation as may be picked up and applied by s 68 of the Judiciary Act, the obligation of a judge to take current sentencing practices into account when sentencing an offender for a federal offence arises as a matter of common law. Section 5(2)(b) of the Sentencing Act 1991 (Vic) provides for a sentencing judge to take current sentencing practices 7 Williams v The King [No 2] (1934) 50 CLR 551 at 560 per Dixon J; [1934] HCA 19, quoted in Leeth v The Commonwealth (1992) 174 CLR 455 at 467 per Mason CJ, Dawson and McHugh JJ; [1992] HCA 29. 8 Putland v The Queen (2004) 218 CLR 174; [2004] HCA 8. 9 Leeth (1992) 174 CLR 455. 10 Neal v The Queen (1982) 149 CLR 305 at 324-326 per Brennan J; [1982] HCA 55. 11 Putland (2004) 218 CLR 174 at 179-180 [7] per Gleeson CJ. Nettle into account, and to some extent it is capable of operating consistently with Pt IB of the Crimes Act. But, whereas in its application to State offences s 5(2)(b) necessarily directs attention to current sentencing practices in Victoria (albeit not necessarily to the exclusion of current sentencing practices elsewhere in the Commonwealth), in the case of federal offences it is implicit in Pt IB of the Crimes Act that a sentencing judge must have regard to current sentencing practices throughout the Commonwealth. As Kirby J observed in Putland v The Queen12, a federal offence is, in effect, an offence against the whole Australian community and so the offence is the same for every offender throughout the Commonwealth. Hence, in the absence of a clear statutory indication of a different purpose or other justification, the approach to the sentencing of offenders convicted of such a crime needs to be largely the same throughout the Commonwealth. Further, as Gleeson CJ stated in Wong13, the administration of criminal justice functions as a system which is intended to be fair, and systematic fairness necessitates reasonable consistency. And, as was observed by the plurality in Hili14, the search for consistency requires that sentencing judges have regard to what has been done in comparable cases throughout the Commonwealth. Counsel for the respondent submitted that, allowing that the Court of Appeal was bound to have regard to sentencing practices throughout the Commonwealth, it was not, however, incumbent on the Court of Appeal to follow sentencing practices in other States. Having had regard to current sentencing practices in other States, it was open to the Court of Appeal to prefer Victorian current sentencing practices and, in view of current sentencing practices in Victoria, to conclude that the sentence imposed was excessive. That submission should be rejected. As was explained in Hili, the point of sentencing judges and intermediate appellate courts having regard to what has been done in other comparable cases throughout the Commonwealth is twofold: first, it can and should provide guidance as to the identification and application of relevant sentencing principles15; and, secondly, the analysis of comparable 12 (2004) 218 CLR 174 at 202-203 [81]-[82]. 13 (2001) 207 CLR 584 at 591 [6]. 14 (2010) 242 CLR 520 at 536 [53] per French CJ, Gummow, Hayne, Crennan, Kiefel 15 (2010) 242 CLR 520 at 535 [49], 538 [57]. Nettle cases may yield discernible sentencing patterns and possibly a range of sentences against which to examine a proposed or impugned sentence16. It does not mean that the range of sentences so disclosed is necessarily the correct range or otherwise determinative of the upper and lower limits of sentencing discretion. As was emphasised in Hili17, and again more recently in Barbaro v The Queen18, the sentencing task is inherently and inevitably more complex than that. But it does mean that to prefer one State's sentencing practices to sentencing practices elsewhere in the Commonwealth, or at least to prefer them for no more reason than that they are different, is contrary to principle, tends to exacerbate inconsistency and so ultimately is unfair. Previous decisions of this Court have laid down in detail the way in which the assessment of sentences in other cases is to be approached. It is neither necessary, therefore, nor of assistance to repeat all of what has previously been said. But, in view of the way in which the Court of Appeal approached the task in this case, it is appropriate to re-emphasise the following: Consistency in sentencing means that like cases are to be treated alike and different cases are to be treated differently19. The consistency that is sought is consistency in the application of the relevant legal principles20. Consistency in sentencing for federal offenders is to be achieved through the work of intermediate appellate courts21. 16 (2010) 242 CLR 520 at 537 [54]; see also Director of Public Prosecutions (Cth) v De La Rosa (2010) 79 NSWLR 1 at 70-71 [303]-[305] per Simpson J. 17 (2010) 242 CLR 520 at 537 [54], 539 [60]. 18 (2014) 253 CLR 58 at 70-71 [24]-[28], 74 [41] per French CJ, Hayne, Kiefel and Bell JJ; [2014] HCA 2. 19 Wong (2001) 207 CLR 584 at 591 [6] per Gleeson CJ, 608 [65] per Gaudron, Gummow and Hayne JJ; Hili (2010) 242 CLR 520 at 535 [49]. 20 Hili (2010) 242 CLR 520 at 535 [49]. 21 Hili (2010) 242 CLR 520 at 537-538 [56]. Nettle Such consistency is not synonymous with numerical equivalence and it is incapable of mathematical expression or expression in tabular form22. For that and other reasons, presentation in the form of numerical tables, bar charts and graphs of sentences passed on federal offenders in other cases is unhelpful and should be avoided23. (6) When considering the sufficiency of a sentence imposed on a federal offender at first instance, an intermediate appellate court should follow the decisions of other intermediate appellate courts unless convinced that there is a compelling reason not to do so24. (7) Appellate intervention on the ground of manifest excessiveness or inadequacy is not warranted unless, having regard to all of the relevant sentencing factors, including the degree to which the impugned sentence differs from sentences that have been imposed in comparable cases, the appellate court is driven to conclude that there must have been some It should also be recorded that, during the hearing of this appeal, there was some discussion as to what it means for intermediate appellate courts to "follow" sentencing decisions of other intermediate appellate courts. It is settled that, in the absence of binding authority from this Court, an intermediate appellate court must follow a statement of legal principle by another intermediate appellate court unless persuaded that it is plainly wrong. It is also settled that a "sentence itself gives rise to no binding precedent"26. Where, however, decisions of other courts in sentencing appeals are referred to in the context of determining whether a given sentence is manifestly excessive or inadequate, it should now be accepted that intermediate appellate courts must have regard to sentencing decisions of other intermediate appellate courts in comparable cases as "yardsticks" that may serve to illustrate (although not define) the possible range of sentences 22 Wong (2001) 207 CLR 584 at 608 [66]; Hili (2010) 242 CLR 520 at 535 [48]. 23 Wong (2001) 207 CLR 584 at 608 [66]. 24 Hili (2010) 242 CLR 520 at 538 [57]. 25 Wong (2001) 207 CLR 584 at 605 [58]; Barbaro (2014) 253 CLR 58 at 79 [61]. 26 Wong (2001) 207 CLR 584 at 605 [57] per Gaudron, Gummow and Hayne JJ; Lacey v Attorney-General (Qld) (2011) 242 CLR 573 at 596 [55] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ; [2011] HCA 10. Nettle available27. A court must have regard to such a decision in this way unless there is a compelling reason not to do so, which might include where the objective circumstances of the crime or subjective circumstances of the offender are so distinguishable as to render the decision irrelevant, or where the court is persuaded that the outcome itself in the other court was manifestly excessive or inadequate. Error in the use of current sentencing practices Maxwell P was not correct in stating that the respondent was entitled to assume that he would be sentenced in accordance with current sentencing practices in Victoria as opposed to current sentencing practices throughout the Commonwealth. It is apparent from Kyrou JA's reasons for judgment that Kyrou JA was also significantly influenced by the fact of what Maxwell P identified as a considerable difference between Victorian and other States' current sentencing practices with respect to the offence of importation of a marketable quantity of a border controlled drug. Osborn JA's reasons show that he was less concerned with sentences imposed in comparable cases than the identified, but range of nevertheless that he too considered the identified disparity to be in itself a relevant sentencing consideration and thus that, to some extent, the fact of the disparity informed his conclusion that the sentence was manifestly excessive. legitimate sentencing considerations which he Accordingly, the first ground of appeal should be upheld. Error in the use of statistical analyses Reference has already been made to the inutility of the presentation of the sentences imposed on federal offenders by means of numerical tables, bar charts and graphs. As the plurality in Hili explained, it is unhelpful because28: "Presentation in any of these forms suggests, wrongly, that the task of a sentencing judge is to interpolate the result of the instant case on a graph that depicts the available outcomes. But not only is the number of federal offenders sentenced each year very small, the offences for which they are sentenced, the circumstances attending their offending, and their personal circumstances are so varied that it is not possible to make any useful statistical analysis or graphical depiction of the results." 27 Hili (2010) 242 CLR 520 at 537 [54]; Barbaro (2014) 253 CLR 58 at 74 [41]. 28 (2010) 242 CLR 520 at 535 [48] per French CJ, Gummow, Hayne, Crennan, Kiefel Nettle This case illustrates the point. As was earlier noticed, the first of the two attachments to Maxwell P's reasons was a tabular presentation of sentences imposed in a number of previous cases of "couriers" who pleaded guilty to offences of importation of various kinds of border controlled drugs and had no relevant prior convictions. The second was a graph β although it might more accurately be described as two of several possible lines of best fit β of the correlation between the head sentences imposed (in months) and quantities imported as a percentage of the commercial quantity, separately for Victoria and by way of comparison with all other States taken together. In his reasons for judgment, Maxwell P stated that the table and graph were so constructed because cases involving an offender who has performed the role of courier, pleaded guilty and had no relevant prior convictions were so prevalent that "a large number of sentencing decisions can be assembled β for the purposes of comparison β in which the only variable factor affecting offence seriousness is the quantity imported"29. As was emphasised in R v Olbrich, however, characterising an importer of a border controlled drug as a "courier" must not be allowed to obscure the assessment of what the offender and prior offenders have done30: "[I]t is always necessary, whether one or several offenders are to be dealt with in connection with a single importation of drugs, to bear steadily in mind the offence for which the offender is to be sentenced. Characterising the offender as a 'courier' or a 'principal' must not obscure the assessment of what the offender did." Equally, as was made plain in Wong, it is an error to attribute chief importance to the weight of the drug in fixing sentence and distinguishing between offenders31: "[T]here will be many cases in which a sentencing judge will be more concerned to identify the level of the offender's criminality by looking to the state of the offender's knowledge about the importation in which he or she was involved. Often enough, information about the kind and size of reward given or promised to the offender for involvement in the 29 Pham [2014] VSCA 204 at [3]. 30 (1999) 199 CLR 270 at 279 [19] per Gleeson CJ, Gaudron, Hayne and Callinan JJ; [1999] HCA 54. 31 (2001) 207 CLR 584 at 609 [69]-[70] per Gaudron, Gummow and Hayne JJ. Nettle importation will be seen as important in fixing a sentence and distinguishing between offenders. ... The selection of weight of narcotic as the chief factor to be taken into account in fixing a sentence represents a departure from fundamental principle." Certainly, in Adams v The Queen32, this Court rejected any idea of a judicially constructed assessment of the relative harmfulness of the different kinds of narcotic substances. As the joint judgment observed, amongst other difficulties, such an approach would cut across the legislative scheme for a "This legislative approach, which recognises the financial rewards available from dealing in illicit drugs ... differentiates between various narcotic substances in designating the trafficable and commercial quantities, but applies the same penalty regime to the quantities so designated. It may be contrasted with legislation in New Zealand and Canada, which grades drugs according to a legislative perception of their harmfulness, and prescribes penalties based on harmfulness rather than quantities." Nothing said in Adams, however, displaced the holding in Wong that to treat the weight of the narcotic as the chief factor in fixing sentence, without taking into account the many conflicting and contradictory elements which bear upon sentencing an offender, represents a departure from fundamental sentencing principle. It follows that by assuming that the "courier" status of the respondent and each of the prior offenders was of uniform significance, and treating the weight of the drug imported in each case as "the only variable factor affecting offence seriousness"34, Maxwell P, in effect, deployed two departures from fundamental principle as if they were correct statements of principle indicative of error in the sentence passed below. And, as has been seen, those errors played at least some part in each of the other judges' conclusions. 32 (2008) 234 CLR 143; [2008] HCA 15. 33 (2008) 234 CLR 143 at 146 [3] per Gleeson CJ, Hayne, Crennan and Kiefel JJ (footnotes omitted); see also at 148 [10]. 34 Pham [2014] VSCA 204 at [3]. Nettle It follows that the second ground of appeal should also be upheld. Conclusion and orders In the result, the reasoning of all three judges was to some extent affected by error. The appeal should therefore be allowed and the orders of the Court of Appeal should be set aside. Consistently with the usual practice in appeals against sentence, the matter should be remitted to the Court of Appeal for redetermination according to law. Bell BELL AND GAGELER JJ. The facts and procedural history are set out in the reasons of French CJ, Keane and Nettle JJ and need not be repeated in order to explain our reasons. This appeal is brought on two grounds. The first ground complains that the Court of Appeal of the Supreme Court of Victoria erred by taking into account current sentencing practice in Victoria to the exclusion of the sentencing practice in other jurisdictions. We agree with French CJ, Keane and Nettle JJ that this ground succeeds for the reasons that their Honours give. We prefer to express our own reasons with respect to the second ground, which is said by the appellant to raise consideration of "the scope" of the decisions in Hili v The Queen35 and Barbaro v The Queen36. In particular, the second ground is said to raise the question of whether those decisions are concerned not only with the consistent application of sentencing principles but also with reasonable consistency of sentencing outcomes37. The second ground, in terms, contends that the Court of Appeal "adopted an impermissible statistical analysis of comparable cases to determine the objective seriousness of the offence." The reference is to the table, "Attachment A" ("the Table"), and the graph, "Attachment B", in Maxwell P's reasons. The impermissible feature of the statistical analysis which the appellant identifies is the inclusion in the Table of a column setting out the weight of the imported drug with the inclusion of a further column expressing that weight as a percentage of the commercial quantity applicable to that drug. The Criminal Code (Cth) ("the Code") prescribes the same maximum penalty for the importation of a marketable quantity of any border controlled drug and the same maximum penalty for the importation of a commercial quantity of any border controlled drug38. Differing quantities of those drugs are specified as the marketable quantity and the commercial quantity, as the case may be39. The purpose of expressing the weight of a drug as a percentage of the 35 (2010) 242 CLR 520; [2010] HCA 45. 36 (2014) 253 CLR 58; [2014] HCA 2. 37 See Hili v The Queen (2010) 242 CLR 520 at 535-538 [47]-[57] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ. 38 The Code, ss 307.1(1), 307.2(1). 39 The Code, s 314.4(1). This provision now appears in Criminal Code Regulations 2002 (Cth), reg 5D, Sched 4. Bell commercial quantity prescribed for that drug is to provide a common denominator allowing comparison between, say, the importation of a quantity of heroin, for which the commercial quantity is 1.5kg, and the importation of a quantity of methamphetamine, for which the commercial quantity is 0.75kg40. It is well settled that the quantity of the drug is not the controlling factor when it comes to the assessment of the seriousness of an importation offence (or other drug offence)41. The quantity of the drug imported (or trafficked or possessed) will usually be relevant to assessment of the seriousness of the offence. In some cases it will be the most significant consideration in this regard and in other cases it may be of little moment42. If, as the appellant asserts, the Court of Appeal used the Table in order to determine the objective seriousness of the respondent's offence it would be an error43. However, misuse of the Table would not demonstrate that presentation of material of this kind as an aid in sentencing is impermissible. The appellant is right to submit that the "reasonable consistency" to which the joint reasons in Hili refer is with respect to sentencing outcomes44. The qualifier "reasonable" in this context is an acknowledgment both that sentencing is a discretionary judgment and that the mix of factors that must be weighed in determining the appropriate sentence will never be precisely the same as in a past case or cases. It is in this connection that the joint reasons in Hili state45: "Consistency is not demonstrated by, and does not require, numerical equivalence. Presentation of the sentences that have been passed on federal offenders in numerical tables, bar charts or graphs is not useful to a sentencing judge. It is not useful because referring only to the 40 The Code, s 314.4(1). 41 Wong v The Queen (2001) 207 CLR 584 at 609 [67] per Gaudron, Gummow and Hayne JJ; [2001] HCA 64. 42 Markarian v The Queen (2005) 228 CLR 357 at 373 [33] per Gleeson CJ, Gummow, Hayne and Callinan JJ; [2005] HCA 25. 43 Hili v The Queen (2010) 242 CLR 520 at 536-537 [53]-[54] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ. 44 (2010) 242 CLR 520 at 535 [49] per French CJ, Gummow, Hayne, Crennan, Kiefel 45 (2010) 242 CLR 520 at 535 [48] per French CJ, Gummow, Hayne, Crennan, Kiefel Bell lengths of sentences passed says nothing about why sentences were fixed as they were." (emphasis added) This is not to deny that statistical material showing the pattern of past sentences for an offence may serve as a yardstick by which the sentencer assesses a proposed sentence and the appellate court assesses a challenge of manifest inadequacy or excess46. The joint reasons in Barbaro put it this way47: "As the plurality pointed out in Hili v The Queen, in seeking consistency sentencing judges must have regard to what has been done in other cases. Those other cases may well establish a range of sentences which have been imposed. But that history does not establish that the sentences which have been imposed mark the outer bounds of the permissible discretion. This history stands as a yardstick against which to examine a proposed sentence." Their Honours, having earlier distinguished the "proper and ordinary" use of sentencing statistics and material indicating sentences imposed in comparable cases, went on to identify these aids as part of the material which the sentencer must take into account48. It will be recalled that in Wong v The Queen Gleeson CJ commented on the challenge to consistent sentencing that is presented by the increasing size of the judiciary and the legal profession49. Specialisation in legal practice is now the norm and, as a consequence, sentencing and appellate judges may not have the knowledge that judges a generation ago possessed of the range of likely penalties for common offences50. The Commonwealth Director of Public Prosecutions supplies the Judicial Commission of New South Wales with the details of sentences imposed on federal offenders in all the Australian jurisdictions. The National Judicial College makes this material available to all Australian judicial officers. This is a source of potentially relevant information about the pattern of sentencing for federal offences. Statistics have a role to play 46 Hili v The Queen (2010) 242 CLR 520 at 536-537 [53]-[54] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ. 47 (2014) 253 CLR 58 at 74 [41] per French CJ, Hayne, Kiefel and Bell JJ. 48 Barbaro v The Queen (2014) 253 CLR 58 at 74 [40]-[41] per French CJ, Hayne, 49 (2001) 207 CLR 584 at 592-593 [10]. 50 Wong v The Queen (2001) 207 CLR 584 at 592-593 [10] per Gleeson CJ. Bell in fostering consistency in sentencing, and in appellate review, provided care is taken to understand the basis upon which they have been compiled51 and provided the limitations explained in the extract from Barbaro above are observed. The value of sentencing statistics will vary between offences. It is not meaningful to speak of a pattern of past sentences in the case of offences which are not frequently prosecuted and where a relatively small number of sentences make up the set. The appellant correctly submits that comparable cases decided by the intermediate courts of appeal provide the most useful guidance to a sentencing judge. An appellate court's reasons reveal the mix of factors that were taken into account and will usually involve consideration of the appropriateness of the sentence imposed at first instance. Osborn JA commented that the material in the Table was significantly more helpful than the material commonly presented to the Court52. His Honour did not expand on this observation but it is likely to have reflected that each of the 32 cases in the Table was identified by name and citation and that each had been decided by an appellate court. The Table was confined to sentences imposed for importing (or attempting to possess) a marketable quantity of a border controlled drug by persons who had pleaded guilty to the offence, had no (or no relevant) prior convictions and performed the role of courier (or recipient) in the enterprise53. The criteria for the exclusion of "relevant" prior convictions are not stated. This is a deficiency in this case. The respondent had a number of prior convictions and had served "a handful of prison sentences". His most recent convictions, for arson and assault, had resulted in sentences of imprisonment. The sentence imposed by Judge Tinney was expressed to reflect the need for specific deterrence among other purposes. In the circumstances, the Table recording the sentences imposed on persons who pleaded guilty to importing drugs as a courier, and who had no (or no relevant) prior convictions, was a yardstick of limited utility by which to gauge the respondent's sentence. It was an error to reason, as Maxwell P did, that in the case of drug importation by "couriers" the only variable affecting the seriousness of the offence is the quantity of the drug imported54. By contrast, Osborn JA (with 51 See Knight v The Queen [2015] NSWCCA 222 at [3]-[13] per R A Hulme J. 52 Pham v The Queen [2014] VSCA 204 at [63] per Osborn JA (Kyrou JA agreeing at 53 Pham v The Queen [2014] VSCA 204 at [37] per Maxwell P. 54 Pham v The Queen [2014] VSCA 204 at [1]-[3]. Bell whose reasons Kyrou JA agreed) correctly observed that consideration of the quantity of the drug imported may mask other relevant considerations that bear on the seriousness of the offending55. The respondent acknowledges that the courts must take into account sentencing practice throughout Australia in sentencing federal offenders and that it is an error to determine the objective seriousness of his offence solely by reference to the weight of the drug or solely by comparison of comparable cases. He does not seek to support Maxwell P's analysis. The respondent submits that the majority in the Court of Appeal rested their conclusion of manifest excess upon reasons that are not tainted by either error of which the appellant complains. Moreover, the respondent submits that the cases in the Table do not support Maxwell P's conclusion that in New South Wales, Queensland and Western Australia substantially higher sentences have been imposed for drug importation offences than in Victoria56. Correctly understood, the respondent submits that the statistical material supports Osborn JA's conclusion that the sentence imposed on him is "heavy" by comparison with comparable cases throughout Australia. The respondent's submissions which seek to insulate the majority's holding from error in the use of the Table must be rejected. At the commencement of his reasons, Osborn JA said that the Table "demonstrates that the sentence imposed was on its face a heavy one if assessed against sentencing practice in Victoria"57. When his Honour came to set out the factors that in combination led him to conclude that the sentence was manifestly excessive he did not, in terms, only refer to what the Table demonstrated about Victorian sentencing practice. His Honour described the sentence as "very heavy when compared with the class of broadly comparable cases identified by the President"58. It will be recalled that the Table included decisions from other jurisdictions. In light of the earlier reference to Victorian sentencing practice, if his Honour was making a different, wider point about the pattern of sentencing across the jurisdictions, it might be expected that he would have said so. In any event, it is apparent that his Honour wrongly treated the pattern of past sentences 55 Pham v The Queen [2014] VSCA 204 at [66]-[68] per Osborn JA (Kyrou JA agreeing at [81]). 56 Pham v The Queen [2014] VSCA 204 at [8]. 57 Pham v The Queen [2014] VSCA 204 at [63] per Osborn JA (Kyrou JA agreeing at 58 Pham v The Queen [2014] VSCA 204 at [77(f)] per Osborn JA (Kyrou JA agreeing Bell as defining the boundaries of the proper exercise of the sentencing judge's discretion. Osborn JA's conclusion of manifest excess was based on the combined effect of the six matters set out at [77] of his reasons. The respondent points out that the first five matters address the applicable factors that a sentencing court is required to take into account under s 16A(2) of the Crimes Act 1914 (Cth), save for specific deterrence. As to this factor, the respondent submits it was unnecessary for Osborn JA to refer to it given that the original and the substituted sentence involve lengthy imprisonment. The submissions overlook the need for the appellate court to find error before it exercises the sentencing discretion afresh. The only issue raised by the respondent's appeal to the Court of Appeal, as Osborn JA acknowledged at the outset, was whether the sentence arrived at by Judge Tinney was reasonably open to him59. The circumstance that Osborn JA (and Kyrou JA) would have given greater weight to the respondent's (a) limited role and financial interest in the enterprise; (b) medical condition; (c) plea of guilty and cooperation with the authorities; (d) prospects of rehabilitation; and (e) likelihood of being shunned within the prison community60 does not establish that Judge Tinney's weighting of these same factors was wrong. The exercise of the discretion that the law reposed in Judge Tinney did not yield a single correct sentence61. It is only if the sentence is found to be "unreasonable or plainly unjust" that the challenge of manifest excess succeeds62. Manifest excess is a conclusion, relevantly in the context of sentencing for this offence, that the sentence is manifestly too long63. To observe that a sentence is "very heavy" when compared with other sentences is not, without more, to conclude that it exceeded the bounds of the sentencer's discretion. 59 Pham v The Queen [2014] VSCA 204 at [62] per Osborn JA (Kyrou JA agreeing at 60 Pham v The Queen [2014] VSCA 204 at [77] per Osborn JA (Kyrou JA agreeing at 61 Pearce v The Queen (1998) 194 CLR 610 at 624 [46] per McHugh, Hayne and Callinan JJ; [1998] HCA 57; Markarian v The Queen (2005) 228 CLR 357 at 371 [27] per Gleeson CJ, Gummow, Hayne and Callinan JJ. 62 House v The King (1936) 55 CLR 499 at 505 per Dixon, Evatt and McTiernan JJ; [1936] HCA 40. 63 Dinsdale v The Queen (2000) 202 CLR 321 at 325 [6] per Gleeson CJ and Hayne J; [2000] HCA 54. Bell The appeal must be allowed and the orders proposed by French CJ, Keane |
HIGH COURT OF AUSTRALIA FIREBIRD GLOBAL MASTER FUND II LTD APPELLANT AND REPUBLIC OF NAURU & ANOR RESPONDENTS Firebird Global Master Fund II Ltd v Republic of Nauru [2015] HCA 43 2 December 2015 ORDER Vary paragraph (1)(ii) of the order of the Court of Appeal of the Supreme Court of New South Wales made on 23 October 2014 by deleting the order that the summons filed on 9 May 2012 be dismissed and, in lieu thereof, order that order 1 of the orders of Young AJA made on 3 October 2014 be set aside insofar as it orders that the registration of the foreign judgment be set aside. Appeal otherwise dismissed. The parties are to file written submissions as to costs on or before 9 December 2015. On appeal from the Supreme Court of New South Wales Representation T G R Parker SC with J A C Potts for the appellant (instructed by Clayton Utz Lawyers) R A Dick SC with D J Barnett and N D Oreb for the first respondent (instructed by Ashurst Australia) Submitting appearance for the second respondent Intervener J T Gleeson SC, Solicitor-General of the Commonwealth with N J Owens for the Attorney-General of the Commonwealth, intervening (instructed by Australian Government Solicitor) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Firebird Global Master Fund II Ltd v Republic of Nauru international law β Foreign State Public immunity β Immunity from jurisdiction β Proceedings for registration of a foreign judgment β Where appellant obtained judgment in Tokyo District Court against first respondent as guarantor of certain bonds β Where appellant obtained order from Supreme Court of New South Wales that the foreign judgment be registered under Foreign Judgments Act 1991 (Cth) β Whether first respondent entitled to foreign State immunity from jurisdiction under s 9 of Foreign States Immunities Act 1985 (Cth) β Whether exception in s 11(1) of Foreign States Immunities Act for proceedings concerning "commercial transactions" applies. Public international law β Foreign State immunity β Immunity from execution β Where appellant obtained garnishee order against Australian bank where first respondent held bank accounts β Whether first respondent entitled to foreign State immunity from execution under s 30 of Foreign States Immunities Act β Whether property "in use" or "set aside" β Whether exception in s 32(1) of Foreign States Immunities Act for "commercial property" applies. Statutory interpretation β Implied repeal β Where Foreign States Immunities Act provides for foreign State immunity from jurisdiction in certain proceedings and Foreign Judgments Act requires a foreign judgment be registered on satisfaction of applicable criteria β Whether the operations of the two statutes are inconsistent such that the earlier statute is impliedly repealed to the extent of inconsistency. Procedure β Service β Registration of foreign judgments β Where judgment debtor in registration proceedings is a foreign State β Whether Pt III of Foreign States Immunities Act requires service of summons prior to registration order being made under Foreign Judgments Act. Words and phrases β "commercial property", "commercial purposes", "commercial transactions", "concerns", "in use", "proceeding", "restrictive doctrine", "set aside". Foreign Judgments Act 1991 (Cth), ss 6, 7, 17. Foreign States Immunities Act 1985 (Cth), ss 9, 11(1), 11(3), 27(1), 30, 32(1), 32(3), 38, 41, Pt III. Uniform Civil Procedure Rules 2005 (NSW), Pt 53. FRENCH CJ AND KIEFEL J. The appellant, Firebird Global Master Fund II Ltd ("Firebird"), is the holder of bonds which were issued by the Republic of Nauru Finance Corporation (known as "RONFIN"), a statutory corporation established under the Republic of Nauru Finance Corporation Act 1972 (Nauru). RONFIN is no longer in existence1. Firebird obtained judgment in the Tokyo District Court in the sum of Β₯1,300 million together with interest and costs2 against the first respondent, the Republic of Nauru ("Nauru"), as guarantor for the bonds ("the foreign judgment"). Firebird subsequently obtained an order from the Supreme Court of New South Wales that the foreign judgment be registered under Pt 2 of the Foreign Judgments Act 1991 (Cth) ("the Foreign Judgments Act"). The summons for the order for registration was not served on Nauru. The order for registration stated the period within which Nauru could apply to have the registration of the foreign judgment set aside. Further orders were subsequently made granting leave to serve the notice of registration outside Australia and on the Secretary for Justice of the Republic of Nauru. There was some delay in effecting service in Nauru. After the time within which Nauru was permitted to file an application to set the registration of the foreign judgment aside had expired, Firebird obtained a garnishee order against the Australian bank in which the accounts of Nauru were kept. Nauru filed motions seeking to set aside the registration of the foreign judgment and the garnishee order. The question whether Nauru could apply to set aside the registration order notwithstanding that the time for doing so had passed no longer remains in issue. Principal amongst the issues raised by Nauru on those motions was its entitlement under the Foreign States Immunities Act 1985 (Cth) ("the Immunities Act") to foreign State immunity from the jurisdiction of Australian courts and from execution against its property. Those issues and the others raised on this appeal involve the interaction of the Immunities Act with the Foreign Judgments Act. It was abolished by the Republic of Nauru Finance Corporation (Repeal) Act 2009 (Nauru). 2 Equivalent to a total of approximately A$31 million at the time of the hearing before the primary judge, Young AJA: Firebird Global Master Fund II Ltd v Republic of Nauru (2014) 289 FLR 373 at 377 [10]. The Immunities Act Prior to the passing of the Immunities Act, the entitlement of foreign States to immunity from the jurisdiction of the courts of Australia was governed by the common law. In 19843 a report was prepared by the Australian Law Reform Commission ("the ALRC") following the reference to it of the subject of the law in Australia of foreign State immunity4. At the commencement of the summary of its report5, the ALRC observed there had been a progressive reduction in the scope of foreign State immunity in other jurisdictions. It recommended that the Commonwealth legislate on the subject, as other countries had done. The Immunities Act was based upon draft legislation prepared by the ALRC. It is now the sole basis for foreign State immunity in Australian courts6. The ALRC explained7 that the central argument behind the shift away from the absolute immunity of a foreign State from the jurisdiction of local courts was that when a foreign State acts in a "commercial" matter within the ordinary jurisdiction of local courts, it should be subject to that jurisdiction8. The ALRC recommended an exception to the general immunity of a foreign State in relation to "commercial transactions" and that the term should be defined objectively9. Section 9, which appears in Pt II ("Immunity from jurisdiction") of the Immunities Act, provides for the general immunity: 3 Australian Law Reform Commission, Foreign State Immunity, Report No 24, 4 Professor James Crawford was the Commissioner in Charge. 5 Australian Law Reform Commission, Foreign State Immunity, Report No 24, (1984) at xv. 6 Foreign States Immunities Act 1985 (Cth), s 9; PT Garuda Indonesia Ltd v Australian Competition and Consumer Commission (2012) 247 CLR 240 at 245 [8]; [2012] HCA 33. 7 Australian Law Reform Commission, Foreign State Immunity, Report No 24, 8 See also PT Garuda Indonesia Ltd v Australian Competition and Consumer Commission (2012) 247 CLR 240 at 244 [5]. 9 Australian Law Reform Commission, Foreign State Immunity, Report No 24, (1984) at xviii [17]. "Except as provided by or under this Act, a foreign State is immune from the jurisdiction of the courts of Australia in a proceeding." Section 11 concerns "commercial transactions". Sub-section (1) of s 11 provides: "A foreign State is not immune in a proceeding in so far as the proceeding concerns a commercial transaction." "Commercial transaction" is defined by sub-s (3) of s 11: "In this section, commercial transaction means a commercial, trading, business, professional or industrial or like transaction into which the foreign State has entered or a like activity in which the State has engaged and, without limiting the generality of the foregoing, includes: (a) a contract for the supply of goods or services; (b) an agreement for a loan or some other transaction for or in respect of the provision of finance; and (c) a guarantee or indemnity in respect of a financial obligation; but does not include a contract of employment or a bill of exchange." The ALRC also recommended10 that proceedings concerning certain other matters be the subject of exceptions to the general immunity from the jurisdiction of Australian courts. Included amongst these are proceedings concerning contracts of employment (s 12); personal injury and damage to property (s 13); intellectual property (s 15); membership of bodies corporate (s 16) and taxes (s 20). The proceedings the subject of these exceptions are also expressly required to have a territorial nexus with Australia. An exception from immunity in the case of the exercise by Australian courts of a supervisory jurisdiction over arbitrations and the enforcement of arbitral awards is also dealt with separately It might be thought that the argument supporting a restrictive immunity of the foreign State from jurisdiction should also apply to support a restrictive immunity from execution against its property. The ALRC, however, pointed out that, although the English courts appear to have treated the two immunities as 10 Australian Law Reform Commission, Foreign State Immunity, Report No 24, (1984) at xviii-xx [19]-[29]. subject to the same common law principles, most jurisdictions distinguish between them11. Separate provision is made for immunity from execution for the property of a foreign State in Pt IV ("Enforcement") of the Immunities Act. Section 30 provides: "Except as provided by this Part, the property of a foreign State is not subject to any process or order (whether interim or final) of the courts of Australia for the satisfaction or enforcement of a judgment, order or arbitration award or, in Admiralty proceedings, for the arrest, detention or sale of the property." Section 32 provides: "(1) Subject to the operation of any submission that is effective by reason of section 10, section 30 does not apply in relation to commercial property. For the purposes of this section: (a) commercial property is property, other than diplomatic property or military property, that is in use by the foreign State concerned substantially for commercial purposes; and (b) property that is apparently vacant or apparently not in use shall be taken to be being used for commercial purposes unless the court is satisfied that it has been set aside otherwise than for commercial purposes." Section 41, in Pt V, concerns the evidentiary effect of certificates given by certain foreign State diplomats as to the purposes for which the property of a foreign State is used at a point in time. This was the subject of a recommendation by the ALRC12. Section 41 provides: 11 Australian Law Reform Commission, Foreign State Immunity, Report No 24, 12 Australian Law Reform Commission, Foreign State Immunity, Report No 24, "For the purposes of this Act, a certificate in writing given by the person for the time being performing the functions of the head of a foreign State's diplomatic mission in Australia to the effect that property specified in the certificate, being property: in which the foreign State or a separate entity of the foreign State has an interest; or that is in the possession or under the control of the foreign State or of a separate entity of the foreign State; is or was at a specified time in use for purposes specified in the certificate is admissible as evidence of the facts stated in the certificate." Sections 23 and 24, in Pt III ("Service and judgments"), provide for service of initiating process on a foreign State by agreement or through the diplomatic channel, respectively. "Initiating process" is defined in s 3(1) to mean "an instrument (including a statement of claim, application, summons, writ, order or third party notice) by reference to which a person becomes a party to a proceeding." Where the diplomatic channel is used, certain documents are required to accompany the initiating process. Provision is made in s 24 for when service is deemed to have been effected by these methods and for the time from which the time for entering an appearance by a foreign State in proceedings is to run. Section 25 provides that purported service of an initiating process upon a foreign State in Australia undertaken otherwise than in accordance with s 23 or s 24 is ineffective. Section 27(1) provides: "A judgment in default of appearance shall not be entered against a foreign State unless: it is proved that service of the initiating process was effected in accordance with this Act and that the time for appearance has expired; and the court is satisfied that, in the proceeding, the foreign State is not immune." Section 38 provides that where a court is satisfied that a judgment, order or process of the court made or issued in a proceeding with respect to a foreign State is inconsistent with an immunity conferred by or under the Immunities Act, the court shall set aside the judgment, order or process. The Immunities Act contains no express reference to proceedings for registration of foreign judgments. The Foreign Judgments Act At the time when the Immunities Act was passed, the registration of foreign judgments was effected through State and Territory legislation. Those systems were replaced by one under the Foreign Judgments Act, which operates nationally. The regime for registration and enforcement of foreign judgments established by that Act, however, relies upon the application of the ordinary processes of the courts of the Commonwealth, the States and the Territories13. Section 17(1) provides for the making of rules of court necessary to give effect to the Foreign Judgments Act. Part 2 of the Foreign Judgments Act deals with the reciprocal enforcement of foreign money judgments that are final and conclusive. Regardless of whether such a judgment is registered, it is to be recognised in any Australian court as conclusive between the parties to it in all proceedings founded on the same cause of action (s 12(1)). Section 6(1) of the Foreign Judgments Act provides that a judgment creditor may apply to the appropriate court to have a foreign judgment registered. Sub-section (3) provides: "Subject to this Act and to proof of the matters prescribed by the applicable Rules of Court, if an application is made under this section, the Supreme Court of a State or Territory or the Federal Court of Australia is to order the judgment to be registered." Sub-section (4) requires that the order for registration state the period within which an application may be made under s 7 to have the registration of the foreign judgment set aside. The court may extend that period (sub-s (5)). The provision in s 17(1) for the making of rules of court includes rules respecting service of the notice of the registration of a foreign judgment on the judgment debtor (par (c)) and for extending the period within which an application may be made to have the registration set aside (par (d)). By s 6(7), a registered judgment has, for the purposes of enforcement, the same force and effect as if the judgment had been originally given in the court in which it is registered. Section 7(1) provides that a party against whom a registered judgment is enforceable may seek to have the registration set aside by applying to the court in which the judgment was registered. One of the grounds upon which the 13 PT Bayan Resources TBK v BCBC Singapore Pte Ltd (2015) 89 ALJR 975 at 981 [30]; [2015] HCA 36. registration of a judgment may be set aside is that the courts of the country from which the judgment was obtained (the "country of the original court") had no jurisdiction (s 7(2)(a)(iv)). Section 7(4)(c) provides that the courts of the country of the original court are taken not to have had jurisdiction if the judgment debtor, who was a defendant in those proceedings, was a person who was entitled to immunity from the jurisdiction of those courts under the rules of public international law and did not submit to their jurisdiction. This is the only reference to foreign State immunity in the Foreign Judgments Act. General entitlement to immunity from the jurisdiction of the courts of foreign States is not stated as a ground for setting aside the registration of a foreign judgment. The issues In these proceedings the following issues arise: Immunity from jurisdiction Firebird disputes Nauru's claim to immunity from jurisdiction under s 9 of the Immunities Act on the basis that the words "jurisdiction β¦ in a proceeding" in s 9 do not refer to a proceeding for the registration of a foreign judgment under the Foreign Judgments Act. Firebird's alternative argument is that if the Immunities Act applies, the proceeding for registration "concerns a commercial transaction" within the meaning of the exception in s 11(1) of the Immunities Act and therefore the s 9 immunity does not extend to that proceeding. Implied repeal Alternatively, Firebird contends that there is an unavoidable inconsistency between the entitlement which Nauru claims to arise under s 38 of the Immunities Act, to have the registration proceedings set aside on the basis of the s 9 immunity, and the requirement of the Foreign Judgments Act that a judgment be registered. As a result, as the later Act, the Foreign Judgments Act must be taken to have repealed the Immunities Act to the extent of that inconsistency. Service Nauru relies on the requirements for service on a foreign State under ss 23-25 and 27, in Pt III of the Immunities Act, and s 27 in particular, as founding an order under s 38 setting aside the registration of the foreign judgment, on the basis that Firebird did not comply with these requirements. Immunity from execution In the event that the Immunities Act applies, Firebird argues that Nauru cannot rely upon the immunity from execution over its property given by s 30, because "commercial property" within the meaning of s 32(3). the relevant property, Nauru's bank accounts in Australia, The decisions below The primary judge (Young AJA)14 and the Court of Appeal of the Supreme Court of New South Wales (Bathurst CJ, Beazley P and Basten JA)15 held that Nauru was entitled to the immunity recognised by s 9 of the Immunities Act and that the exception in s 11(1) did not apply to the proceedings for registration under the Foreign Judgments Act. Firebird's argument claiming there to be an inconsistency in the operation of the two statutes was rejected. The Court of Appeal agreed with Nauru's contention that service should have been effected upon Nauru before the foreign judgment was registered under the Foreign Judgments Act. A majority of the Court of Appeal further held that the funds in all of the bank accounts were immune from execution under the garnishee order. Bathurst CJ (Beazley P agreeing) did so by reference to a certificate given by the head of Nauru's diplomatic mission in Australia ("the certificate"), tendered under s 41 of the Immunities Act, and by reference to evidence given by Nauru's Minister for Finance in the proceedings before the primary judge. Immunity from jurisdiction: ss 9 and 11 of the Immunities Act In the proceedings below and in submissions on this appeal the issue whether the immunity from jurisdiction recognised by s 9 extends to the proceedings under the Foreign Judgments Act was dealt with separately from that which follows if s 9 does apply; namely, whether the exception to that immunity provided by s 11 in proceedings concerning commercial transactions also applies. Whilst a statute must be read as a whole, the questions of construction raised by the two provisions are, for the most part, discrete. It is therefore convenient to continue to deal with them separately. 14 Firebird Global Master Fund II Ltd v Republic of Nauru (2014) 289 FLR 373. 15 Firebird Global Master Fund II Ltd v Republic of Nauru (2014) 316 ALR 497. Section 9 Firebird's submissions that a proceeding for registration and enforcement of a foreign judgment is not a "proceeding" within the meaning of that term in s 9 of the Immunities Act would not appear to be supported by the ordinary meaning given to that term in a legal context or by its meaning within the context of the Immunities Act. In PT Garuda Indonesia Ltd v Australian Competition and Consumer Commission16, it was observed that "jurisdiction" is a generic term that is used in a variety of senses. In s 9, and elsewhere in the Immunities Act, the term is used to identify the amenability of a defendant to the process of Australian courts17. The notion expressed by the term "immunity" is that Australian courts are not to implead a foreign State, which is to say the courts will not by their process make the foreign State a party to a legal proceeding against that foreign State's will18. Given that s 9 is intended to provide an immunity from all proceedings brought against a foreign State, subject only to the exceptions for which provision is made elsewhere in the Immunities Act, there is no reason not to give the term "proceeding" its widest meaning. The term "proceeding" is apt to refer to any application to a court in its civil jurisdiction for its intervention or action; that is, some method permitted by law for moving a court to do some act according to law19. In the context of s 9 and foreign State immunity, it may be understood to refer to a process by which the jurisdiction of an Australian court is invoked, in which a foreign State is named as a party and in which judicial power may be exercised against the foreign State and its interests. Firebird concedes that the registration of a foreign judgment involves the exercise of judicial power20. Its argument seeks to differentiate registration 16 (2012) 247 CLR 240 at 246 [14]. 17 PT Garuda Indonesia Ltd v Australian Competition and Consumer Commission (2012) 247 CLR 240 at 247 [17]. 18 Compania Naviera Vascongado v SS Cristina [1938] AC 485 at 490. 19 Cheney v Spooner (1929) 41 CLR 532 at 536-537, 538-539; [1929] HCA 12. 20 TCL Air Conditioner (Zhongshan) Co Ltd v Judges of the Federal Court of Australia (2013) 251 CLR 533 at 555 [32] per French CJ and Gageler J, 573 [104] per Hayne, Crennan, Kiefel and Bell JJ; [2013] HCA 5, which refers to the analogous case of registration and enforcement of foreign awards; see also South Australia v Totani (2010) 242 CLR 1 at 64 [136] per Gummow J; [2010] HCA 39. proceedings from the proceedings to which it submits s 9 refers. It submits s 9 refers to a proceeding in which a foreign State is required to appear in an Australian court to answer a claim against it, as occurs when a cause of action is pleaded against it. The procedure for registration of a foreign judgment does not involve the assertion of a cause of action; rather, it recognises that the foreign State's rights and liabilities have already been determined by the relevant foreign judgment. In Firebird's submission, registration proceedings are no more than the invocation of post-judgment enforcement proceedings over the property of a judgment debtor. In support of these submissions, Firebird points to the various exceptions to the s 9 general immunity that are created by ss 11-16 and ss 18-20, and the fact that each of those sections refers to proceedings in which a cause of action would be pleaded. Notably absent from Firebird's list is the proceedings to which s 17(2) refers β proceedings for the recognition and enforcement of arbitral awards, wherever made. This aspect of Firebird's submissions may be dealt with shortly. The exceptions to which Firebird points β for example, claims concerning contracts of employment (s 12), or personal injury and damage to property (s 13) β may be expected to generate pleadings of a cause of action. It does not follow that the immunity provided by s 9 extends only to proceedings in which a cause of action is pleaded. The generality of the language of s 9 does not support such a construction. Firebird relies on what was said in Hunt v BP Exploration Co (Libya) Ltd21 concerning the procedure for registration of foreign judgments under the Queensland statute which was in force prior to the Foreign Judgments Act22. The procedure is similar to that later adopted in the Commonwealth Act. The Court observed that the registration procedure was designed to operate ex parte and does not depend upon compliance with rules relating to traditional actions in personam. What was said in BP Exploration does not advance Firebird's argument. The fact that a statute permits steps to be taken ex parte, which is to say without notice to the party affected23, does not detract from the characterisation of something as a proceeding. The description of the registration procedure does 21 (1980) 144 CLR 565 at 573-574; [1980] HCA 7. 22 Reciprocal Enforcement of Judgments Act 1959 (Q). 23 International Finance Trust Co Ltd v New South Wales Crime Commission (2009) 240 CLR 319 at 348 [38], 372 [119]; [2009] HCA 49. not otherwise assist the determination of whether the proceedings to which s 9 of the Immunities Act refers are only traditional actions. It assumes relevance only if Firebird is able to establish that this is the case, in which event it might be said proceedings for registration are not of this kind. By applying for registration of the foreign judgment, as it was entitled to do under s 6(1) of the Foreign Judgments Act, Firebird invoked federal jurisdiction invested in the Supreme Court of New South Wales. Nauru was named as a party, as a judgment debtor, in those proceedings. Firebird invoked the judicial power of the Commonwealth, exercised by the Supreme Court of New South Wales, in order to obtain rights against Nauru and its property. The effect of registration of the foreign judgment was to make it enforceable as a judgment of the Supreme Court. Registration, if valid, created new rights in favour of Firebird against Nauru and its property, which were then enforceable24. It is therefore not correct to say that the registration proceedings are merely the invocation of enforcement proceedings. They are proceedings of a kind to which the immunity recognised by international law is referable. True it is that Nauru was not called upon to answer the claim for registration and enforcement prior to the order for registration being made, although it could have defended the proceedings at the outset had it come to have knowledge of them. But the notice of the registration of the foreign judgment served upon Nauru required it to respond to Firebird's claim for registration and enforcement if Nauru wished to avoid execution over its property. The construction contended for by Firebird suffers from the additional disadvantage that it does not give full effect to the jurisdictional immunity of a foreign State which is recognised by international law. Section 9 ought, so far as its language permits, to be construed in conformity with international law25. Especially is this so where the statute implements or codifies Australia's obligations under international law26. Whereas in Australia the procedure for recognition and enforcement of foreign judgments is largely governed by statute, in other countries, such as Canada, the courts themselves provide for those effects. The question of foreign 24 Foreign Judgments Act 1991 (Cth), s 6(7). 25 Jumbunna Coal Mine NL v Victorian Coal Miners' Association (1908) 6 CLR 309 at 363; [1908] HCA 95. 26 Plaintiff M70/2011 v Minister for Immigration and Citizenship (Malaysian Declaration Case) (2011) 244 CLR 144 at 189-190 [90]-[91], 191-192 [96]-[98]; [2011] HCA 32. State immunity is regarded as one necessary to be dealt with in those proceedings. Section 3(2) of the State Immunity Act RSC 1985, c S-18 of Canada provides for immunity of foreign States from "any proceedings before a court". Foreign judgments are not themselves enforceable by statute. It was explained in Kuwait Airways Corp v Iraq27 that the courts of Quebec may nevertheless declare a foreign judgment to be enforceable. In making that decision the court, "in a sense, naturalizes the foreign decision and permits it to be enforced". The Supreme Court of Canada held that the application for recognition involves a judicial demand that creates an adversarial relationship between the parties to it and is a "proceeding" to which foreign State immunity applies. In countries which are signatories to the Brussels Convention28 and later the Brussels I Regulation29, a foreign judgment was until recently30 rendered enforceable by a court on a request for exequatur31. Procedurally, a request for exequatur has in common with the registration procedure under the Foreign Judgments Act that the request to the court is made ex parte. If the request is acceded to, it is incumbent upon the party against whom the order is made authorising enforcement to appeal against it32. In Jurisdictional Immunities of the State (Germany v Italy: Greece intervening)33, it was explained of the proceeding for exequatur that, in granting or refusing it, the court exercises a jurisdictional power which results in a foreign 27 [2010] 2 SCR 571 at 583-584 [20]. 28 Convention on jurisdiction and the enforcement of judgments in civil and commercial matters (1968). 29 Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (2000). 30 10 January 2015, the date from which Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast) (2012) applied. 31 On the procedure for exequatur, see Kennett, Enforcement of Judgments in Europe, 32 Kennett, Enforcement of Judgments in Europe, (2000) at 215. 33 [2012] ICJ Reports 99 at 150 [125], 151-152 [128]-[130]. judgment being given effects corresponding to those of an order of the court itself. It follows that the court must ask itself whether the respondent foreign State enjoys immunity from jurisdiction. An application for registration of a foreign judgment under the Foreign Judgments Act is a "proceeding" within the meaning of s 9. It follows that Nauru, as a foreign State, enjoys general immunity from the jurisdiction of the Supreme Court of New South Wales unless one of the exceptions referred to in the Immunities Act applies. Section 11 i. The history of the exception for commercial transactions The arguments on this appeal require something more to be said about the development and level of acceptance within the international community of a restrictive doctrine of immunity from jurisdiction, which provide the background to the enactment of s 11(1). The rule of international law that the courts of a country will not implead a foreign State was said by Lord Atkin in Compania Naviera Vascongado v SS Cristina ("The Cristina")34 to have become engrafted into English law, to be well established and to be beyond dispute. So stated, foreign State immunity from the jurisdiction of local courts appears to be absolute, but even at that time, differences of view had been expressed as to whether State-owned merchant ships were immune from the jurisdiction of courts of other countries35. In any event, a series of decisions of the English courts in the 1970s36 reflected the growing, general trend towards favouring a restriction on immunity from jurisdiction in cases involving commercial transactions to which the foreign State was a party, a circumstance which was becoming increasingly more common. 34 [1938] AC 485 at 490. 35 The Parlement Belge (1879) 4 PD 129 (although this decision was reversed on appeal: The Parlement Belge (1880) 5 PD 197); The Porto Alexandre [1920] P 30. 36 See, eg, The Philippine Admiral [1977] AC 373 at 403; Trendtex Trading Corporation v Central Bank of Nigeria [1977] QB 529 at 555; Hispano Americana Mercantil SA v Central Bank of Nigeria [1979] 2 Lloyd's Rep 277 at 279. See also the earlier statement in Sultan of Johore v Abubakar Tunku Aris Bendahar [1952] AC 318 at 343. The correctness of these decisions was confirmed by the House of Lords in 1981 in I Congreso del Partido37. I Congreso del Partido was a case in which a claim was brought against the government of the Republic of Cuba for breach of contract. Lord Wilberforce observed38 that the more restrictive doctrine of immunity had arisen from the "willingness of states to enter into commercial, or other private law, transactions with individuals." His Lordship considered that there were two main foundations for the restriction on the principle of immunity: the first was that it was in the interests of justice to allow individuals to bring such transactions before the court; the second was that there was no challenge to, or enquiry into, any act of sovereignty or governmental act of the State by requiring a State to answer a claim based on transactions of this kind. A court determining whether immunity should be restricted would have regard to whether the claim is39: "fairly within an area of activity, trading or commercial, or otherwise of a private law character, in which the state has chosen to engage, or whether the relevant act(s) should be considered as having been done outside that area, and within the sphere of governmental or sovereign activity." The ALRC considered that the decision in I Congreso del Partido clarified the position at common law40. The ALRC recommended41 that the provisions of the State Immunity Act 1978 (UK) ("the 1978 UK Act") respecting the exception of proceedings concerning commercial transactions should generally be followed. It has been said of the development of the restrictive doctrine in international law that "[t]he former practice of treating public loans as sovereign acts and hence immune gave way as loans were increasingly raised by States 37 Playa Larga (Owners of cargo lately laden on board) v I Congreso del Partido (Owners) [1983] 1 AC 244 at 261-262. 38 Playa Larga (Owners of cargo lately laden on board) v I Congreso del Partido (Owners) [1983] 1 AC 244 at 262. 39 Playa Larga (Owners of cargo lately laden on board) v I Congreso del Partido (Owners) [1983] 1 AC 244 at 267. 40 Australian Law Reform Commission, Foreign State Immunity, Report No 24, 41 Australian Law Reform Commission, Foreign State Immunity, Report No 24, using commercial markets"42. They are now generally held to be commercial transactions and not immune. Another commentator43 observes that discernible judicial practice is now more or less uniform in the treatment of loan contracts and obligations of guarantee. The courts hold that the State does not enjoy immunity from proceedings in a foreign court in respect of those loan contracts and guarantees. ii. Issues of construction Section 3(1) of the 1978 UK Act provides that a State is not immune as respects proceedings "relating to" a commercial transaction entered into by the State. A "commercial transaction" is defined in wide terms by s 3(3) of that Act, as the same term also is in s 11(3) of the Immunities Act. Nauru submits that the word "concerns", appearing in s 11(1) of the Immunities Act ("is not immune in a proceeding in so far as the proceeding concerns a commercial transaction"), like the words "relating to", identifies a connection, or relationship, between the proceeding and the relevant matter in respect of which the exception is created. "Concerns", it submits, requires a close relationship, or direct connection, between the proceedings and the transaction, and fastens upon the subject matter of the particular proceeding before the Australian court, here the proceeding for registration of the foreign judgment. The approach taken by Firebird to the construction of s 11(1) places greater emphasis upon the provision's purpose in giving effect to the restriction on the general immunity. On this approach, a proceeding for registration of a foreign judgment can more generally be said to concern the commercial transaction which underlies the judgment sought to be registered. It has never been disputed that the foreign judgment in this case was based upon a commercial transaction, namely the guarantee of the bonds. Such a transaction is clearly one which falls within the definition of "commercial transaction" in s 11(3). Bathurst CJ accepted that, on one construction, the registration proceedings could be said, as a matter of practical reality, to concern a commercial transaction, but preferred the construction that the registration proceedings did not "concern" liability under the bonds; rather they concerned 42 Fox and Webb, The Law of State Immunity, 3rd ed (2013) at 402. 43 Wittich, "Article 2(1)(c) and (2) and (3)", in O'Keefe and Tams (eds), The United Nations Convention on Jurisdictional Immunities of States and their Property: A Commentary, (2013) 54 at 64. registration of the foreign judgment44. In his Honour's view45, the focus of s 11(1) is upon the proceeding itself, not the transaction which underlies the proceeding. His Honour accepted that this involves a "narrower" construction of the word "concerns" in s 11(1)46, one which might not accord with the position at international law47. His Honour considered that some, though limited, contextual support for this construction was provided by s 17(2) of the Immunities Act48. Section 17 has been referred to earlier in these reasons, but not in detail. It concerns agreements for arbitration and the enforcement of foreign arbitral awards. Section 17(1) provides that when a foreign State is party to an agreement to submit a dispute to arbitration, then, subject to any inconsistent provision in the agreement, the foreign State is not immune from the exercise of the supervisory jurisdiction of an Australian court in respect of the arbitration. It is s 17(2) to which Bathurst CJ referred. It relevantly provides: "Where: (a) β¦ a foreign State would not be immune in a proceeding concerning a transaction or event; and the foreign State is a party to an agreement to submit to arbitration a dispute about the transaction or event; then, subject to any inconsistent provision in the agreement, the foreign State is not immune in a proceeding concerning the recognition as binding for any purpose, or for the enforcement, of an award made pursuant to the arbitration, wherever the award was made." 44 Firebird Global Master Fund II Ltd v Republic of Nauru (2014) 316 ALR 497 at 45 Firebird Global Master Fund II Ltd v Republic of Nauru (2014) 316 ALR 497 at 46 Firebird Global Master Fund II Ltd v Republic of Nauru (2014) 316 ALR 497 at 47 Firebird Global Master Fund II Ltd v Republic of Nauru (2014) 316 ALR 497 at 48 Firebird Global Master Fund II Ltd v Republic of Nauru (2014) 316 ALR 497 at His Honour reasoned that if the word "concerns" in s 11(1) were given a broader meaning, one that is referable to the underlying transaction, s 17(2) would not be necessary, at least where the underlying transaction was a commercial transaction49. If proceedings were brought for the registration or enforcement of a foreign arbitral award to which the foreign State was a party, and the arbitration had concerned a commercial transaction, a broader construction of the exception in s 11(1) would mean the foreign State could claim no immunity. It would not be necessary to resort to s 17(2) for that conclusion to be reached. Nauru goes further. It submits that a consistent application of a broader construction of the word "concerns" (or words "proceeding concerns") in the other exception provisions in the Immunities Act produces the result that there will be little, if any, work for s 17(2) to do. If regard is had to the underlying transaction in the proceedings to which those other provisions refer, s 17(2)(a) will not be triggered. The scheme of the Immunities Act is to provide for a broad immunity in s 9 and then make specific provision for exceptions to it. These exceptions may overlap with each other, including s 17(2). In such a context, as Firebird submits, the potential for redundancy has little, if any, significance. Where one exception applies, the immunity will be lost. In NML Capital Ltd v Republic of Argentina50 (a decision discussed further below), the potential for overlap with the equivalent arbitration provision in the 1978 UK Act was considered by Lord Collins of Mapesbury (with whom Lord Walker of Gestingthorpe and Lord Clarke of Stone-cum-Ebony JJSC agreed) not to support a narrow construction of s 3 of that Act. As his Lordship pointed out, the overlap would not be complete and it would be "artificial and over-technical" to use a potential overlap to cut down the scope of the commercial transaction exception. So far as concerns s 17(2), the potential overlap is brought about by particular provision being made for an exception to immunity with respect to arbitral proceedings based upon an agreement to arbitrate, while the other exception provisions relate to proceedings concerning particular subject matters. The ALRC explained51 that the enforcement of arbitral awards was regarded as 49 Firebird Global Master Fund II Ltd v Republic of Nauru (2014) 316 ALR 497 at 50 [2011] 2 AC 495 at 539 [112], 546 [150]. 51 Australian Law Reform Commission, Foreign State Immunity, Report No 24, of sufficient importance to warrant separate and explicit treatment and that making separate provision was considered preferable to treating a foreign State as having waived immunity by entering into an agreement for arbitration. This explains the presence in the Immunities Act of s 17(2), but it does not require that other exceptions be read down in order to ensure that s 17(2) has a wider operation. Nauru further submits that a broader meaning of the words "proceeding concerns" cannot consistently be applied to some of the exception provisions. Sections 12-16 contain a requirement of a territorial nexus between the subject matter of the proceedings and Australia. In Nauru's submission, this requirement of a territorial nexus makes sense when the focus is on the determination of the underlying cause of action, but not when the focus is on a regime for registration of foreign judgments. Those sections would not ordinarily apply to a foreign judgment relating to their subject matter because the Australian nexus would not be satisfied. The correct scope of this last-mentioned assertion may be put to one side. The effect to which Nauru points is not one of lack of coherence. Section 11(1) has a different operation from ss 12-16. It does not have, and cannot be construed to have, the requirement of a territorial nexus for which the other sections provide. The different operation of the sections arises because of that requirement and because the purposes of ss 12-16 are different from that of s 11(1). The subject matter of these sections was regarded as appropriate for the jurisdiction of Australian courts so long as that nexus was present. Section 11(1), consistently with the restrictive doctrine it seeks to enforce, applies to commercial transactions of foreign States regardless of territorial nexus. Nauru submits that s 17(2) is also useful to show that where the Immunities Act intends to direct attention not to the immediate subject matter but to the underlying transaction, a mechanism is provided by which the underlying transaction is to be examined. The same submission is put regarding s 19 and the provision it makes for the exception to immunity in the case of proceedings concerning a bill of exchange. It may be accepted that ss 17(2) and 19 direct attention to an underlying transaction and that s 11(1) does not. The question is what is to be drawn from these observations so far as concerns the area of intended operation of s 11(1). It cannot be inferred, by reference to ss 17(2) and 19, that it was intended that s 11(1) is not to apply with respect to foreign judgments and the transactions which underlie them. At most, it may be inferred that attention was not directed, by those who drafted the Immunities Act, to proceedings for the registration of foreign judgments. The ALRC report makes no mention of such proceedings. What was or was not in the minds of those drafting or enacting legislation is not relevant to the construction of s 11(1). If the meaning of the words chosen has a wider application than what may have been contemplated by the draftsperson, then the Court is bound to give effect to that meaning52. In interpreting a provision of an Act, the Court is required by s 15AA of the Acts Interpretation Act 1901 (Cth) to prefer that interpretation that would best achieve the purpose or object of the Act. In the context of proceedings for registration of a foreign judgment to which s 9 applies, reading "[a] foreign State is not immune in a proceeding in so far as the proceeding concerns a commercial transaction" as referring to the commercial transaction on which that foreign judgment is based is not to give an unduly strained construction of s 11(1). It has the advantage over the narrower construction of s 11(1) of giving effect to the evident purpose of that provision. The purpose of s 11(1) is to give effect to the restriction on the general immunity from jurisdiction. The view which prevailed in the international community at the time the Immunities Act was drafted was that the immunity should not be extended to cover commercial transactions. iii. NML Capital Reference has been made in these reasons to the decision of the Supreme Court of the United Kingdom in NML Capital, which considered provisions of the 1978 UK Act upon which sections of the Immunities Act presently under consideration were based. There was a division of opinion between members of the Court in NML Capital as to whether the proceedings at common law on a foreign judgment debt could be said to relate to the underlying bond transaction. A majority of the Court held that s 31(1) of the Civil Jurisdiction and Judgments Act 1982 (UK) ("the 1982 Act"), which sought to give effect to the Brussels Convention53, provided an alternative avenue for enforcement. Differences of view about the applicability of the 1978 UK Act were therefore not decisive of the outcome of that case. 52 Stingel v Clark (2006) 226 CLR 442 at 458 [26]; [2006] HCA 37. 53 Convention on jurisdiction and the enforcement of judgments in civil and commercial matters (1968): see NML Capital Ltd v Republic of Argentina [2011] 2 AC 495 at 515 [44]. In the decision below in this case, Basten JA54 considered that the construction of s 11(1) of the Immunities Act, at the time of its enactment, should conform to that adopted by the majority in NML Capital with respect to s 3(1) of the 1978 UK Act, because that Act had been the subject of careful consideration by the ALRC in its report55. Lord Mance JSC (who was in the majority) held56 that proceedings "relating to ... a commercial transaction" within the meaning of s 3 of the 1978 UK Act did not extend to proceedings for the enforcement of a foreign judgment which itself related to a commercial transaction. Bathurst CJ said57 that he did not rely upon the decision in NML Capital, but his Honour's reference to a narrower construction may be taken to refer to the effect of the construction favoured by Lord Mance. Apart from some anomalies arising with respect to the other exceptions, which have already been dealt with in these reasons, two matters appear to have been influential to Lord Mance's reasoning. In his Lordship's view, those drafting the 1978 UK Act could not have contemplated that s 3(1) should apply to a foreign judgment against a foreign State because at the time the Act was passed I Congreso del Partido had not been decided and the law was therefore not settled on the question of restrictive immunity in England58. Secondly, the rules of court at that time provided no basis for service out of the jurisdiction and this therefore posed a practical difficulty59. These matters were considered by Lord Collins60 to be relevant, but not conclusive, as to the meaning of s 3. The report of the ALRC provides quite a different picture of the basis for s 11 of the Immunities Act. I Congreso del Partido had been decided and the ALRC considered that it had settled the existence of the restrictive doctrine of 54 Firebird Global Master Fund II Ltd v Republic of Nauru (2014) 316 ALR 497 at 55 Australian Law Reform Commission, Foreign State Immunity, Report No 24, 56 NML Capital Ltd v Republic of Argentina [2011] 2 AC 495 at 532 [86]. 57 Firebird Global Master Fund II Ltd v Republic of Nauru (2014) 316 ALR 497 at 58 NML Capital Ltd v Republic of Argentina [2011] 2 AC 495 at 534 [91]. 59 NML Capital Ltd v Republic of Argentina [2011] 2 AC 495 at 533-534 [90]. 60 NML Capital Ltd v Republic of Argentina [2011] 2 AC 495 at 539 [114]-[115]. immunity, sufficiently so to warrant legislation. Further, provision had been made in Australia for service out of the jurisdiction for some time61. Lord Phillips of Worth Matravers PSC (with whom Lord Clarke agreed on this point), whilst acknowledging that there were some anomalies in applying the 1978 UK Act to foreign judgments, nevertheless considered that the question whether a foreign State is immune from a claim should, in accordance with the restrictive immunity, depend on the nature of the underlying transaction that has given rise to the claim, not the nature of the process by which the claimant is seeking to enforce the claim62. Lord Collins (with whom Lord Walker agreed) considered63 that but for s 31(1) of the 1982 Act applying, it might have been desirable, as a matter of policy, to give s 3 of the 1978 UK Act a wider meaning. iv. The construction of s 11(1) The construction for which Nauru contends would have s 11(1) applying where a commercial transaction is itself the subject of the proceedings before an Australian court, but not where it was the subject of a foreign judgment which is sought to be enforced in an Australian court. On this approach, the effect to be given by an Australian court to the restriction on immunity would depend upon the nature of the proceedings before it, yet in both kinds of proceedings referred to above the Australian court is exercising its jurisdiction and powers with respect to the foreign State. A construction of s 11(1) by which the proceedings for registration and enforcement of a foreign judgment are to be taken to be concerned with the commercial transaction upon which that judgment is based is consistent with the approach that was taken by the courts of countries which are signatories to the Brussels Convention, Jurisdictional Immunities of the State64 it was said that, in deciding that application, and considering whether immunity applies, a court must ask itself whether, if it had itself been seised of "a dispute identical to that which was the subject of the foreign judgment", it would have been obliged under international in dealing with applications for exequatur. 61 See, eg, Supreme Court Rules 1970 (NSW), Pt 10, made under the Supreme Court Act 1970 (NSW). Other States and Territories made similar provision. 62 NML Capital Ltd v Republic of Argentina [2011] 2 AC 495 at 510-511 [26], 544 63 NML Capital Ltd v Republic of Argentina [2011] 2 AC 495 at 539 [116]. 64 [2012] ICJ Reports 99 at 151 [130]. law to accord immunity having regard to the nature of that case. This directs attention to the underlying commercial transaction involved in the dispute. Consistently with the approach taken to the construction of s 9, where "proceeding" is given its widest meaning in order to give effect to the general immunity from the jurisdiction of Australian courts, a wider meaning should be given to "the proceeding concerns a commercial transaction" in order to give effect to the restriction on immunity which s 11(1) seeks to achieve. Such a construction of the two provisions gives effect to Australia's international obligations. Section 11(1) should be taken to apply to proceedings for registration of a foreign judgment where that judgment is based upon a commercial transaction. Implied repeal Inconsistency is at the root of the principle of implied repeal65. The potential conflict between the Foreign Judgments Act and the Immunities Act is said by Firebird to arise because, on Nauru's argument, s 38 of the Immunities Act entitles Nauru to have the registration of the foreign judgment set aside as non-compliant with the Immunities Act, whereas s 6 of the Foreign Judgments Act requires a foreign judgment to be registered on the satisfaction of the applicable criteria. The result, it submits, is that the later Foreign Judgments Act must be taken to repeal the Immunities Act to the extent of the inconsistency. Firebird submits that s 7(4)(c) of the Foreign Judgments Act points up this inconsistency, because that provision makes it clear that the legislature expressly contemplated that a judgment against a foreign State might be registered. Section 7(4)(c), read with s 7(2)(a)(iv), provides a ground for setting aside a registration of a judgment under s 7(1) where a person who was a defendant in the proceedings in the foreign country was not accorded immunity they were entitled to under the rules of public international law. Assuming s 7(4)(c) applies to foreign States, it deals only with the question of immunity which arose in the foreign proceedings. It says nothing about the application of immunity in proceedings in Australia. The question of foreign State immunity from the jurisdiction of Australian courts remains one to be dealt with by reference to the Immunities Act. The Immunities Act deals with the special and discrete topic of foreign State immunity in Australia. It provides for a general immunity and creates 65 Ferdinands v Commissioner for Public Employment (2006) 225 CLR 130 at 137- 138 [18]; [2006] HCA 5. exceptions to it, thereby defining the circumstances in which immunity will be accorded to a foreign State. That the Immunities Act is intended to deal comprehensively and specifically with the immunity of foreign States is confirmed by the opening words of s 9 ("[e]xcept as provided by or under this Act"). It is not to be supposed that a later general statute dealing with the subject of the enforcement of foreign judgments was intended to derogate from the Immunities Act provisions66. The two statutes deal with different subject matters and the overlap between them is only slight. As Basten JA observed67: "the Foreign Judgments Act is directed to the registration and enforcement of judgments given in courts of other countries, of which judgments involving a foreign state will be but a small subset β¦ On the other hand, the Foreign States Immunities Act addresses the jurisdiction of Australian courts with respect to foreign states and their entities, of which proceedings for enforcement of foreign judgments will be but a small subset". For a court to conclude that a later statute impliedly repeals an earlier statute the court must be satisfied that the two statutes are so inconsistent that they cannot stand or live together68. This will be so only if the provisions of the two statutes cannot be reconciled. The potential conflict to which Firebird points is resolved by reading the provisions of the Foreign Judgments Act to only apply where a defendant, including a foreign State defendant, is amenable to the jurisdiction of the courts exercising jurisdiction under that Act. No inconsistency arises by reason of the procedures in respect of registration under the Foreign Judgments Act. In so far as service of initiating process on a foreign State should be effected by the means provided for in the Immunities Act, the Foreign Judgments Act can accommodate those means. 66 See Maybury v Plowman (1913) 16 CLR 468 at 473-474; [1913] HCA 43. 67 Firebird Global Master Fund II Ltd v Republic of Nauru (2014) 316 ALR 497 at 68 Goodwin v Phillips (1908) 7 CLR 1 at 10; [1908] HCA 55; Ferdinands v Commissioner for Public Employment (2006) 225 CLR 130 at 138 [18]; Commissioner of Police (NSW) v Eaton (2013) 252 CLR 1 at 19-20 [48], 34 [100]; [2013] HCA 2. Service under the Foreign Judgments Act on a foreign State In the Court of Appeal it was observed69 that the Foreign Judgments Act does not prohibit service prior to the registration of a foreign judgment. In BP Exploration70 it was said that the scheme of the Foreign Judgments Act is to permit proceedings on a foreign judgment to be conducted, in the first place at least, ex parte, but this does not point up an inconsistency with the service provisions in the Immunities Act. Where a foreign State is named as a judgment debtor in registration proceedings, an issue may well arise as to whether it is immune from, or amenable to, the jurisdiction of Australian courts. In these circumstances, it may be as well for a court seised of an application for registration to consider whether service should be effected before an order for registration is made, rather than requiring the foreign State to apply to set aside the registration of the judgment. It may also be preferable, if not more convenient, to use the process for service with respect to a foreign State which is provided for in Australia by Pt III of the Immunities Act, rather than those provided for by the rules of court. This appeal is not concerned with matters such as these. The issue here is whether the procedure adopted for service on Nauru was prohibited, expressly or impliedly, by Pt III of the Immunities Act. Service was effected in accordance with the Uniform Civil Procedure Rules 2005 (NSW)71, which provide for leave to serve outside Australia72. More importantly, service was effected after the order for registration was made. In its notice of contention, Nauru contends that the Court of Appeal should have held that s 27 of the Immunities Act expressly prohibits the entry of a judgment against a foreign State in circumstances where the initiating process has not been served in accordance with the requirements in Pt III. However, s 27(1), which is set out earlier in these reasons, requires proof of service in accordance with Pt III only in the circumstance where a judgment in default of appearance is entered against a foreign State, which is not the case for ex parte proceedings. 69 Firebird Global Master Fund II Ltd v Republic of Nauru (2014) 316 ALR 497 at 508 [49] per Bathurst CJ, 540 [261] per Basten JA. 70 (1980) 144 CLR 565 at 573. 71 Rule 53.6. 72 Uniform Civil Procedure Rules 2005 (NSW), rr 11.2, 11.5. In its submissions, Nauru further argues for a construction of s 27(1) which would extend its application to the entry or registration of all judgments. In Nauru's submission, the scheme of Pt III of the Immunities Act is that a foreign State must be served with an initiating process prior to any judgment being entered or steps being taken to enforce a judgment. The definition of "initiating process" is wide and would include a summons for registration of a foreign judgment. However, none of the other relevant provisions of Pt III lend support to Nauru's argument. Sections 23 and 24 are concerned with methods of service, not when it is to be effected. Section 25, which provides that service otherwise than in accordance with s 23 or s 24 is ineffective, is limited in its application to service in Australia. These provisions do not suggest that any extension of the requirements of s 27(1) is necessary to give effect to the purposes of Pt III. Nothing in the ALRC report suggests that the prohibition in s 27(1) is to apply to judgments other than one entered in default of appearance. The rationale for Pt III was not only to facilitate service in Australia, it was to reduce the possibility of offence being caused to a foreign State. The likelihood of offence was considered to be greater where the foreign State had not agreed to the method of service and a default judgment was obtained against it. It was therefore proposed that methods of service which utilised the diplomatic channel and any method to which the foreign State had agreed be adopted73. No doubt there is a basis for an implication of a requirement in the Immunities Act that a foreign State be served in order that it can effectively assert its claim to immunity. Even so, it cannot be said that the procedures under the Foreign Judgments Act deny a foreign State such as Nauru that opportunity. The foreign judgment may have been registered, but that registration was liable to be set aside on the application of Nauru and upon Nauru's assertion of its immunity. Immunity from execution against property Background It has been observed74, speaking generally, that the transition from absolute immunity towards a restrictive doctrine has been slower to take hold in 73 Australian Law Reform Commission, Foreign State Immunity, Report No 24, 74 Crawford, Brownlie's Principles of Public International Law, 8th ed (2012) at 503; Reinisch, "European Court Practice Concerning State Immunity from Enforcement Measures", (2006) 17 European Journal of International Law 803 at 804. the case of immunity from execution against foreign State property than for immunity from jurisdiction. The decision of the German Federal Constitutional Court in the Philippine Embassy Bank Account Case75 has been regarded76 as stating the position at public international law with respect to bank accounts of a diplomatic mission which are used for defraying the expenses of the mission. It was held that immunity from the legal processes of execution should be accorded to that property, even though many of the day-to-day expenses would include the supply of goods or services to the mission77 and so be "commercial" in that sense. More recently, in Jurisdictional Immunities of the State78, it was said that one condition that, if satisfied, permits execution against property belonging to a foreign State is that "the property in question must be in use for an activity not pursuing government non-commercial purposes". A similar question to that which arose in the Philippine Embassy Bank Account Case arose in Alcom Ltd v Republic of Colombia79, but it could not be answered by resort only to the requirements of public international law. It was necessary to give effect to the provisions of the 1978 UK Act concerning immunity from execution, albeit these provisions could be construed by reference to international law. Section 13(4) of the 1978 UK Act permitted execution to be levied against "property which is for the time being in use or intended for use for commercial In Alcom80, Lord Diplock observed that if the expression purposes". "commercial purposes" bore its ordinary meaning, the bank account of the diplomatic mission would fall outside the exception to immunity. However, a difficulty was created by an extended meaning being given to "commercial purposes" because it was linked81 to the wide definition of "commercial 75 (1977) 65 ILR 146. 76 Alcom Ltd v Republic of Colombia [1984] AC 580 at 599 per Lord Diplock. 77 Philippine Embassy Bank Account Case (1977) 65 ILR 146 at 158-159. See also Alcom Ltd v Republic of Colombia [1984] AC 580 at 603-604. 78 [2012] ICJ Reports 99 at 148 [118]. 80 Alcom Ltd v Republic of Colombia [1984] AC 580 at 602-603. 81 By State Immunity Act 1978 (UK), s 17(1). transaction" in s 3(3). The definition of "commercial transaction", relevant to an exception to jurisdictional immunity, was carried over into the "commercial purposes" exception to immunity from execution. The difficulty which was presented by the 1978 UK Act in Alcom was addressed by the ALRC in its report. Speaking of the linkage effected by the 1978 UK Act between "commercial purposes" and "commercial transaction", the ALRC said82: "Part of the reason for treating execution as a distinct matter from jurisdiction is that the considerations governing the two matters are not entirely the same. The object of the definition of 'commercial' in the context of jurisdiction was to focus on the nature of a specific transaction. Moreover, in that context 'purpose' or 'motive' are usually said to be irrelevant. To attempt to use this definition in the context of execution, where 'purpose' is intended to be the key discriminator, is not a recipe for clarity." The ALRC recommended that commercial purposes, in the context of execution against property, be defined independently of "commercial" in the context of jurisdiction83. This is the background to s 32(3) of the Immunities Act. Section 32(3) enquiries Section 32(3), when applied to bank accounts, asks whether the choses in action represented by them are "in use" by the foreign State or "apparently not in use". If they are in use, the party seeking execution must show that the use is "substantially for commercial purposes" (s 32(3)(a)). If the account is not in use, s 32(3)(b) deems it to be used for commercial purposes. In this circumstance the foreign State must rebut that presumption by showing that it has been "set aside" otherwise than for commercial purposes. It will be recalled that s 41 provides that a certificate given by the head of a foreign State's diplomatic mission that property was in use for specified purposes is admissible as evidence of those facts. 82 Australian Law Reform Commission, Foreign State Immunity, Report No 24, (1984) at 76 [125] (footnotes omitted). 83 Australian Law Reform Commission, Foreign State Immunity, Report No 24, "In use" and "set aside" Firebird submits that, of its nature, money in a bank account is not "in use". It submits that a bank account can only be said to be "in use" to earn interest, as in the case of a term deposit, to act as security or to be drawn upon. A credit balance is an inseverable item of property which cannot be characterised by past or intended future drawings. Bathurst CJ held84 that all of the accounts except for the term deposit account (also referred to as the "trust account") were in use. His Honour considered that the certificate as to the purposes for which the various accounts were in use told against Firebird's submission that they were not in use. His Honour also accepted the evidence of Nauru's Minister for Finance that it was not likely to have been the case that some of the accounts had not been drawn upon for some considerable period of time. The length of the periods of inactivity were insufficient, in his Honour's view, to detract from the evidence provided by the certificate and by the Minister for Finance. Subject to what follows, there is no reason to doubt the correctness of this approach. The words "in use" are not to be taken to refer to particular uses to which bank accounts may be put for the benefit of the account holder. They are used to distinguish accounts in which monies may be idle, as where a foreign State sets funds aside. In such a case, the purpose of the accounts cannot be readily discerned from the use to which they are put and it would be a simple enough matter for a foreign State to assert that they were intended for future government purposes. For these reasons, s 32(3)(b) creates the presumption that they are being used for commercial purposes and requires the foreign State to show that they were set aside other than for those purposes. Bathurst CJ accepted Firebird's submission that the funds in the term deposit account were not in use85. This finding is the subject of Nauru's notice of contention. The statement in the certificate, that the funds were held as the cash reserves of the government of Nauru to provide future government services, was taken by his Honour to mean that they were set aside. Firebird challenges this finding. In Firebird's submission, for funds to be "set aside" something more is required than an intention as to how property is to be used. The ALRC clearly 84 Firebird Global Master Fund II Ltd v Republic of Nauru (2014) 316 ALR 497 at 85 Firebird Global Master Fund II Ltd v Republic of Nauru (2014) 316 ALR 497 chose to depart from a test of intended use when drafting s 32(3). It is necessary that there be some formal action, which may be expected of a foreign State, such as an act of appropriation or other administrative act. There is no evidence that such a procedure had been undertaken. It is correct to observe that s 32(3) contains no reference to an "intended use", in contrast to s 13(4) of the 1978 UK Act. The reference to "intended use" was considered by the ALRC to be vague and uncertain86. Hence s 32(3) is concerned with the fact of property being in use, not in use, or set aside, for a discernible non-commercial purpose. It contains no requirement that any formal act accompany the act of setting aside funds. Once funds are shown in fact to be set aside, the question of whether the funds are to be adjudged as immune from execution depends upon whether the foreign State's purpose with respect to them is commercial, or non-commercial and governmental. Firebird identifies three accounts, referred to as the "aircraft leasing accounts", which had been used for loans to entities which ran the Nauruan commercial airline. The loans had been repaid. Firebird submits that the accounts were not in use because they had not been drawn upon sufficiently frequently and recently. In this regard, the evidence of the Minister for Finance appears to support Firebird's contention. It may also be said of these accounts that because the funds had been retained for some time after the loans had been repaid, they were also set aside. The critical enquiry with respect to them is also as to the purpose for which they are maintained. "For commercial purposes" The larger question concerning s 32(3) concerns the purposes for which the monies in the accounts were in use or were set aside. The test for which Firebird contends has regard to the nature of the activity involving the accounts. Firebird submits that if the activity in question is properly characterised as commercial, the accounts are used for commercial purposes. Nauru submits that Firebird's test conflates the form that the use of the property takes with the purpose for which it is "in use". A particular use of property may in form be a business, trading or commercial transaction, but the question of purpose is different. It looks to the reasons, objectively, why the property is in use in order to determine whether it is in use substantially for commercial purposes or, if not in use, is set aside for such purposes. 86 Australian Law Reform Commission, Foreign State Immunity, Report No 24, Nauru's submissions should be accepted. In the context of s 32(3), the words "in use β¦ for commercial purposes" and "set aside otherwise than for commercial purposes" direct attention to the reason why, objectively, the property is used or set aside. This is confirmed by what was said by the ALRC in the passage, set out above, concerning the need to disassociate the meaning to be given to "commercial property" of a foreign State, against which execution may be levied, and a "commercial transaction", which is the basis for loss of jurisdictional immunity. The test for which Firebird contends has regard to the nature of the transactions conducted through the bank accounts, which is the very problem that was sought to be avoided by the separate and distinct definition of "commercial property" in s 32(3). In the course of argument, Firebird was obliged to concede that a transaction in the nature of a purchase of goods to be used in the running of a government will be for a government purpose, notwithstanding the commercial nature of the transaction. The certificate tendered under s 41 in the present case identifies the source of the funds and what the monies in the accounts have been and are used for, from which an inference as to the purpose for which they are used or set aside may be drawn. With respect to some accounts, a purpose associated with government is identified. So far as concerns the term deposit account, or trust account, the certificate states: "The funds in this account are derived from [Nauru] Government Revenue and are held by [Nauru] Government treasury as cash reserves to provide future Government Services." Firebird's submissions concerning the term deposit account rely upon its transactional quality, being the fact that it was used to earn interest. There is no reason to doubt the statement in the certificate that the funds in that account are held as cash reserves against future needs for government services. The fact that they earn interest in the interim does not detract from this purpose. What are termed the "residual accounts" also relate to government purposes. It is stated in the certificate with respect to each of the aircraft leasing accounts that: "The funds in this account were used by [Nauru] Government to provide government loans to Nauru Airlines for the procurement and maintenance of its aircraft. The government loans were provided on a non interest/non-profit basis and have been repaid." Firebird also challenges the part of the certificate which relates to what is called a "fuel account". The certificate states: "The funds in this account are derived from payments received from customers purchasing fuel from the [Nauru] Government. The funds in this account are used by [Nauru] Government predominantly for the purpose of providing Government Services." Consistently with its submissions in respect of the other accounts, Firebird submits that the purchase of fuel is a commercial transaction. Bathurst CJ took into account87 the particular circumstances of Nauru as relevant to explain the use to which the accounts were put and to place them in context. Relevant in this regard are the facts that Nauru is remote from other countries, is of a small geographical size and has a small population. This explains why the government of Nauru itself provides a wider range of services. A further relevant feature is that Nauru has no central bank. The accounts held in the Australian bank are effectively Nauru's source of revenue and are therefore more likely to be for government purposes. The Minister for Finance further explained in his evidence that the government of Nauru is obliged to operate a national airline to provide passenger and charter services because private airlines will not provide air services to Nauru. Regarding the funds in the "fuel account", the Minister for Finance explained that the Nauru government is obliged to buy and sell fuel on Nauru because no one else will. It would not be viable, commercially, for a business to do so. The fuel accounts are used to purchase fuel which is then sold on Nauru. The cost of fuel is calculated in such a way that the government could cover its costs, not to obtain profits. The "utilities account", similarly, is used to fund the provision of water and electricity to the population. Evidence of this kind is relevant and necessary in order to understand that what might otherwise be thought to be a commercial enterprise is in fact no more than the provision of essential services to those resident in a foreign State by its government. It is to be expected that the circumstance of one foreign State may differ from another, especially when the foreign State in question has a small population and is remote. Contrary to Firebird's submissions, the acceptance of evidence of this kind does not involve a court in a difficult assessment about the state of development in a country. 87 Firebird Global Master Fund II Ltd v Republic of Nauru (2014) 316 ALR 497 at The "loan account" referred to by Firebird was used to provide loans to small businesses, on a non-profit basis. Bathurst CJ was satisfied that the funds were for a non-commercial purpose despite involving commercial transactions, because the policy behind the loans was to strengthen the economy of the country. There is no reason to doubt his Honour's conclusion. The remaining account referred to by Firebird β the "phosphate compensation account" β has a dual use: to pay the salaries of government employees and to compensate land owners whose land has been used for mining operations. Bathurst CJ was satisfied that this did not involve a commercial purpose and no reason is shown to doubt the correctness of this finding. Conclusion and orders The proceedings for registration of the foreign judgment under the Foreign Judgments Act are proceedings to which s 9 of the Immunities Act applies so that Nauru is immune from the jurisdiction of Australian courts, subject to the exceptions for which the Immunities Act provides. The exception stated in s 11(1) of the Immunities Act applies to the proceedings for the registration of the foreign judgment in this case because they concerned a commercial transaction; namely, the guarantee upon which the foreign judgment was based. The immunity from jurisdiction is therefore lost. However, Nauru is immune from execution against its property represented by the bank accounts held in Australia because the purpose for which these accounts are in use, or for which the monies in them are set aside, are not commercial purposes. The appeal should be dismissed, but, consistently with these reasons, the orders of the Courts below should reflect the fact that the Supreme Court of New South Wales had jurisdiction to register the foreign judgment. Therefore, order 1(ii) of the Court of Appeal should be varied by deleting the order that the summons for registration of the foreign judgment filed on 9 May 2012 be dismissed and, in lieu thereof, order that order 1 of the orders of Young AJA should be set aside in so far as it ordered that the registration of the foreign judgment be set aside. 131 GAGELER J. The four principal issues in this appeal are identified by French CJ and Kiefel J as: immunity from jurisdiction; implied repeal; service; and immunity from execution. With the exception only of the issue of service, I agree with their resolution of each of those issues. On the issue of service, I consider the better view to be that of Basten JA in the Court of Appeal of the Supreme Court of New South Wales88. It is that s 27(1) of the Immunities Act prevents a court from making an ex parte order for the registration of a foreign judgment against a foreign State. State immunity was explained in Jurisdictional Immunities of the State (Germany v Italy: Greece intervening) to have emerged as a rule of customary international law by 198089, to derive from the principle of the sovereign equality of States90, to require one State to accord immunity to another91, and to be essentially procedural in nature in that it is "confined to determining whether or not the courts of one State may exercise jurisdiction in respect of another State"92. The rule of customary international law was specifically explained to apply to the determination of whether or not a court of one State may exercise jurisdiction to render enforceable in that State a judgment given by a court of a second State against a third State93. The rule was explained to require that the court94: "ask itself whether, in the event that it had itself been seised of the merits of a dispute identical to that which was the subject of the foreign judgment, it would have been obliged under international law to accord immunity to the respondent State". The effect of the judgment of the Supreme Court of Canada in Kuwait Airways Corp v Iraq95 was thereby endorsed. The effect of the judgment of the Supreme 88 Firebird Global Master Fund II Ltd v Republic of Nauru (2014) 316 ALR 497 at 89 [2012] ICJ Reports 99 at 123 [56]. 90 [2012] ICJ Reports 99 at 123 [57]. 91 [2012] ICJ Reports 99 at 140 [93]. 92 [2012] ICJ Reports 99 at 140 [93]. 93 [2012] ICJ Reports 99 at 151-152 [128], [130]. 94 [2012] ICJ Reports 99 at 152 [130]. 95 [2010] 2 SCR 571. Court of the United Kingdom in NML Capital Ltd v Republic of Argentina96 was also endorsed. Despite that endorsement of the actual result in NML Capital, the explanation of the customary international law rule in Jurisdictional Immunities of the State has been noted to have corresponded more closely to the reasoning of the minority in NML Capital97. To the extent that there are competing constructions which are equally consistent with the purpose of the Immunities Act, a construction which conforms to customary international law as now explained in Jurisdictional Immunities of the State is to be preferred to a construction which would place Australia in breach of customary international law98. French CJ and Kiefel J demonstrate that preferred construction. The preferred construction is first to construe "proceeding", in s 9 and elsewhere in Pt II of the Immunities Act, to extend to any application for the making of an order in civil jurisdiction, thereby extending the general immunity conferred by s 9 to an application for registration of a foreign judgment under s 6(1) of the Foreign Judgments Act. It is next to construe "concerns", in s 11(1) and elsewhere in Pt II of the Immunities Act, to look to the source of rights in issue in the proceeding; thereby excepting from the general immunity that is conferred by s 9 an application for registration of a foreign judgment where the rights determined by that foreign judgment arose out of a commercial transaction. Neither party the appeal, nor the Commonwealth, who intervenes by leave, argues that there has emerged a rule of customary international law which governs the international service of an initiating process on a State. The ALRC noted varying State practice in its 1984 report99. Service of process and the entry of default judgment have been made the subject of specific obligations in the United Nations Convention on the Attorney-General of 97 O'Keefe, "Decisions of British Courts during 2011 involving Questions of Public or Private International Law: (A) Public International Law", (2012) 82 British Yearbook of International Law 564 at 607. 98 Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273 at 287; [1995] HCA 20. 99 Australian Law Reform Commission, Foreign State Immunity, Report No 24, Jurisdictional Immunities of States and Their Property100, but that Convention has not entered into force. international it conforms to customary The construction of Pt II of the Immunities Act which is to be preferred because law nevertheless has consequences for the construction of Pt III. That is because the Immunities Act is structured on the assumption that an exercise of judicial power against a foreign State will occur only in a proceeding to which the foreign State is a party. Within the scheme of the Immunities Act, "judgment" in Pt III is naturally read as commensurate in scope with "proceeding" in Pt II. The term is sufficiently broad to encompass any order made by a court against a foreign State on any application made to that court in civil jurisdiction. In particular, the term is sufficiently broad to encompass an order for the registration of a foreign judgment under s 6(3) of the Foreign Judgments Act. The further assumption which underlies the structure of the Immunities Act is that a foreign State will become a party to a proceeding only through service of initiating process on the foreign State in accordance with either of the methods of service for which provision is made in s 23 (which permits service by agreement) and s 24 (which permits service through the diplomatic channel). Consistently with that assumption, "initiating process" is defined in s 3(1) to mean "an instrument (including a statement of claim, application, summons, writ, order or third party notice) by reference to which a person becomes a party to a proceeding", and s 26 provides that "[w]here a foreign State enters an appearance in a proceeding without making an objection in relation to the service of the initiating process, the provisions of this Act in relation to that service shall be taken to have been complied with". The territorial focus of s 25, rendering ineffective service of an initiating process on a foreign State in Australia otherwise than in accordance with s 23 or s 24, is best explained on the basis that (other than where service is in accordance with an agreement pursuant to s 23) s 24 makes service through the diplomatic channel the exclusive method of service of the initiating process on a foreign State and treats that service as occurring outside Australia. The ALRC twice stated in its 1984 report that service by agreement and service through the diplomatic channel were to be the only methods of service on a foreign State allowed under the Immunities Act101. The ALRC explained that "[w]here the foreign state has agreed upon a method of service that method will be followed" but recommended that "if recourse is had to the diplomatic channel 100 2 December 2004, UN Doc A/RES/59/38 (Annex), Arts 22-23. 101 Australian Law Reform Commission, Foreign State Immunity, Report No 24, ... a number of ancillary requirements be specified"102. The first of those ancillary requirements, which the ALRC explained under the heading "All Service to be Service Out", was that, although the Department of Foreign Affairs would be given the option to serve the foreign State through its diplomatic mission in Canberra, all documents presented to the Department for service comply with the rules of the issuing court for service outside the jurisdiction. It was explained that "[i]n most jurisdictions this will require the plaintiff to obtain leave to serve out, a requirement which will go far to eliminate vexatious and frivolous claims"103. The second of the ancillary requirements, which the ALRC explained under the heading "Time-Limits", was that a period of two months be allowed before the normal time limits specified in rules of court begin to run, on the basis that it seemed generally to be recognised that governments may need more time to respond to service of process than other defendants104. In conformity with those recommendations of the ALRC: s 24(5) makes clear that s 24 does not exclude the operation of any rule of court under which the leave of the court is required in relation to service of initiating process outside the jurisdiction; s 24(6) provides that service of initiating process under s 24 "shall be taken to have been effected outside the jurisdiction and in the foreign State concerned, wherever the service is actually effected"; and s 24(7) provides that the time for entering an appearance only begins to run at the expiration of two months after the date on which service of the initiating process was effected. The ALRC described Pt III as extending "procedural immunities" to foreign States in addition to the "immunities from jurisdiction" conferred by Pt II105. That description was picked up in the explanatory memorandum to the Bill for the Immunities Act106. The scope of the procedural immunities extended to foreign States by Pt III would be severely limited were "default of appearance" in s 27(1) limited 102 Australian Law Reform Commission, Foreign State Immunity, Report No 24, 103 Australian Law Reform Commission, Foreign State Immunity, Report No 24, (1984) at 92 [151] (footnote omitted). 104 Australian Law Reform Commission, Foreign State Immunity, Report No 24, 105 Australian Law Reform Commission, Foreign State Immunity, Report No 24, 106 Australia, House of Representatives, Foreign States Immunities Bill 1985, Explanatory Memorandum at 16. to failure of the foreign State to appear only as a result of some choice or neglect of the foreign State. Those procedural immunities would be even more limited were "judgment in default of appearance" confined to an order attracting the label of "default judgment" under an applicable rule of civil procedure. Section 27(1) is rather to be understood as protective of a foreign State whenever a foreign State has for any reason not appeared in a proceeding. It is directed to ensuring in those circumstances that a court will not proceed to make an order against the foreign State unless the foreign State has been made a party to the proceeding as a result of service of an initiating process by a method allowed under Pt III of the Immunities Act and unless the immunity from jurisdiction conferred on the foreign State by Pt II is not infringed. Section 27(1) so construed operates to prevent an Australian court from making any order against a foreign State in a proceeding in which the foreign State has not appeared unless two conditions are met. The first is that it is proved to the court that the foreign State has been served with the initiating process in accordance with either s 23 or s 24, and that the time for appearance following service has expired. The second is that the court is satisfied that the foreign State is not immune. Those conditions do much to harmonise the relationship between the Immunities Act and the Foreign Judgments Act, given that a registered judgment has by operation of s 6(7)(a) of the Foreign Judgments Act the same force and effect for the purpose of enforcement as if it had been originally given in the registering court, and given the absence of any ground under s 7 of the Foreign Judgments Act requiring a court to set aside a registered judgment where the foreign State is immune from the jurisdiction of the registering court by force of s 9 of the Immunities Act. The harmonisation occurs as a result of immunity from jurisdiction being required to be addressed at the threshold, as a precondition to the making of an order for registration, after the foreign State has been served with notice of the application and has had an opportunity to appear. For a court to make an order against a foreign State in contravention of s 27(1) of the Immunities Act is for that court to make an order inconsistent with the procedural immunity extended to the foreign State by that provision. On subsequent application by the foreign State under s 38 of the Immunities Act, the court is required to set such an order aside. Here, there was a failure to serve notice of the application for registration of the foreign judgment on Nauru, in accordance with s 23 or s 24 of the Immunities Act or at all. The Supreme Court acted inconsistently with the procedural immunity conferred by s 27(1) of the Immunities Act in making the order for registration under s 6(3) of the Foreign Judgments Act ex parte. When Nauru subsequently applied under s 38 of the Immunities Act, the Supreme Court was required to set the order aside. The primary judge was correct to set aside the order for registration on the ground that the application for the order for registration had not been served on Nauru, and the Court of Appeal was correct to dismiss the appeal from the primary judge insofar as Firebird challenged the making of the order on that ground. The appeal should be dismissed with costs. NettleJ 150 NETTLE AND GORDON JJ. This is an appeal from a judgment of the Court of Appeal of the Supreme Court of New South Wales (Bathurst CJ, Beazley P and Basten JA)107. It concerns whether the first respondent, the Republic of Nauru ("Nauru"), is immune under the Foreign States Immunities Act 1985 (Cth) ("the Immunities Act") from the registration and execution in Australia under the Foreign Judgments Act 1991 (Cth) of a judgment of the Tokyo District Court for moneys found to be due to the appellant, Firebird Global Master Fund II Ltd ("Firebird"), under a guarantee by Nauru of the payment of Japanese bearer bonds issued by the Republic of Nauru Finance Corporation ("RONFIN"). The Court of Appeal held that Nauru is immune from the registration and execution of the judgment. It also held that Firebird was required to serve the initiating summons seeking orders for registration and enforcement of the Japanese judgment on Nauru in accordance with the Immunities Act. The questions to which the appeal gives rise are: (1) Does the exception to foreign state immunity for commercial transactions in s 11(1) of the Immunities Act apply to Firebird's application under the Foreign Judgments Act for registration of the Tokyo District Court judgment? (2) Can the Tokyo District Court judgment be enforced against Nauru without Firebird having first served the initiating process on Nauru in accordance with Pt III of the Immunities Act? (3) Does the exception to foreign state immunity for execution against commercial property in s 32 of the Immunities Act apply to the bank account deposits against which Firebird seeks to execute the judgment? For the reasons which follow, those questions should be answered: (1) Yes. (2) Yes. 107 Firebird Global Master Fund II Ltd v Republic of Nauru (2014) 316 ALR 497. NettleJ The facts Between 1988 and 1989, RONFIN borrowed a total of Β₯9 billion in the form of Japanese bearer bonds. Payment of the bonds was guaranteed by Nauru. RONFIN defaulted on its repayment obligations and Nauru refused to meet its obligations as guarantor. Firebird held Β₯6.5 billion of the Japanese bearer bonds and brought proceedings in the Tokyo District Court against RONFIN and Nauru for payment of the amount due. Nauru unsuccessfully asserted sovereign immunity in the Tokyo proceedings and raised other defences which were only partially successful. Ultimately, in October 2011, Firebird obtained judgment from the Tokyo District Court against Nauru for Β₯1.3 billion plus interest ("the Japanese judgment"). As it does not have a central bank, Nauru holds a large proportion of its money in Australia in accounts with the second respondent, Westpac Banking Corporation ("Westpac"). For this reason, Firebird sought to enforce the Japanese judgment in the Supreme Court of New South Wales by registering the Japanese judgment under the Foreign Judgments Act. Part 53 of the Uniform Civil Procedure Rules 2005 (NSW) ("the UCPR") provides that an application for registration of a judgment under the Foreign Judgments Act is to be made by summons naming the judgment debtor as defendant108. The application may proceed without service of the summons on the defendant109. The Supreme Court may make a registration order on the papers110 and only after that has been made must notice of registration be served on the defendant111. The defendant then has a set time in which to apply to set aside the order for registration and the judgment cannot be enforced until that time has expired without the order for registration having been set aside112. In accordance with that procedure, Firebird filed a summons in May 2012 and an order for registration was made by a Deputy Registrar of the Supreme Court of New South Wales in June 2012. In March 2013, a judge of the Supreme 108 UCPR, r 53.2. 109 UCPR, r 53.2(3). 110 UCPR, r 53.2(4). 111 UCPR, r 53.6. 112 UCPR, rr 53.5, 53.7, 53.8; see also Foreign Judgments Act, s 6(3), (4), (10). NettleJ Court ordered that the order for registration could be served on the Secretary for Justice of Nauru. The order for registration was so served on 18 August 2014 and, after expiration of the time limit for an application to be made to set aside the order for registration, Firebird obtained a garnishee order against Westpac to attach to the accounts of Nauru for the amount due under the judgment. Nauru then applied to set aside the order for registration and garnishee order under s 38 of the Immunities Act on the basis that it was entitled to immunity. The judge at first instance (Young AJA) set aside the order for registration and garnishee order on the basis that Nauru enjoyed immunity from suit and the service requirements of the Immunities Act had not been complied with when the registration order was made. Firebird appealed to the Court of Appeal, but the appeal was dismissed. The Court of Appeal held that Nauru was entitled to immunity from suit and therefore to have the order for registration and garnishee order set aside under s 38 of the Immunities Act. By special leave granted on 13 February 2015, Firebird now appeals to this Court. Foreign Judgments Act Part 2 of the Foreign Judgments Act provides for the registration and enforcement in Australia of judgments of foreign courts specified in the Foreign Judgments Regulations 1992 (Cth). The Regulations apply Pt 2 of the Foreign Judgments Act to judgments of the Tokyo District Court113. Firebird's application to the Supreme Court of New South Wales to have the Japanese judgment registered and enforced against Nauru was made under s 6 of the Act. Section 6(1) provides: "A judgment creditor under a judgment to which this Part applies may apply to the appropriate court at any time within 6 years after: the date of the judgment; or (b) where there have been proceedings by way of appeal against the judgment, the date of the last judgment in those proceedings; to have the judgment registered in the court." 113 Foreign Judgments Regulations, Schedule, item 16. NettleJ Section 6(4) of the Foreign Judgments Act stipulates that the court must state the "period within which an application may be made under section 7 to have the registration of the judgment set aside" and s 6(5) allows the court to extend that period. Pursuant to s 6(6), a judgment is not to be registered if at the date of the application "it has been wholly satisfied" or "it could not be enforced in the country of the original court". Neither of those conditions applied to the Japanese judgment. Section 7 of the Foreign Judgments Act is directed to setting aside the registration of a judgment. Section 7 relevantly provides: "(1) A party against whom a registered judgment is enforceable, or would be enforceable but for an order under section 8, may seek to have the registration of the judgment set aside by duly applying to the court in which the judgment was registered ... to have the registration of the judgment set aside. (2) Where a judgment debtor duly applies to have the registration of the judgment set aside, the court: (a) must set the registration of that judgment aside if it is satisfied: that the judgment is not, or has ceased to be, a judgment to which this Part applies; or that the courts of the country of the original court had no jurisdiction in the circumstances of the case; or In spite of subsection (3), the courts of the country of the original court are not taken to have had jurisdiction: if the judgment debtor, being a defendant in the original proceedings, was a person who under the rules of public international law was entitled to immunity from the jurisdiction of the courts of the country of the original court and did not submit to the jurisdiction of that court." NettleJ Section 17 of the Foreign Judgments Act provides that rules regulating the practice and procedure of a superior court and which are not inconsistent with the Act or any regulations may be made prescribing all matters necessary or convenient to be prescribed for carrying out or giving effect to the Act. It was not in dispute that this rule-making power authorises Pt 53 of the UCPR, which provides for various procedural matters including the commencement of proceedings and evidence in proceedings under the Foreign Judgments Act in New South Wales. Foreign state immunity Until 1975, the common law of England, and therefore probably the common law of Australia, was that the courts had no jurisdiction to entertain an action or other proceedings against a foreign state or the head of government or any department of the government of a foreign state; and an action or other proceeding against the property of any of those entities was regarded as an action or proceeding against the entity114. That "absolute" doctrine of sovereign immunity was founded on broad considerations of public policy, international law and comity115 and protected a foreign state in proceedings directly against the state and also in indirect proceedings against the state's property116. If a foreign state had an interest in property situated in the jurisdiction, regardless of whether it was proprietary, possessory or of some other nature, an action affecting that interest would be stayed even though it was not brought against the foreign state. As Lord Atkin explained in The Cristina117: "[T]he courts of a country will not implead a foreign sovereign, that is, they will not by their process make him against his will a party to legal proceedings whether the proceedings involve process against his person or seek to recover from him specific property or damages." 114 Dicey, Morris and Collins, The Conflict of Laws, 15th ed (2012), vol 1 at 339-340. 115 Rahimtoola v Nizam of Hyderabad [1958] AC 379 at 404 per Lord Reid. 116 See, eg, Compania Naviera Vascongado v SS Cristina ("The Cristina") [1938] AC 485 at 506-507 per Lord Wright (quoting The Parlement Belge (1880) 5 PD 197 at 214-215 per Brett LJ); see also at 490 per Lord Atkin. 117 [1938] AC 485 at 490. NettleJ In the same case, Lord Wright said118: "[T]he rule is not limited to ownership. It applies to cases where what [the foreign sovereign] has is a lesser interest, which may be not merely not proprietary but not even possessory." As was noticed in the ninth edition of Dicey and Morris' The Conflict of Laws, which was published in 1973, the history of the doctrine of sovereign immunity in England up to that point had largely been one of "gradual extension combined with a restriction on the scope of the doctrine of waiver"119. But all of that was about to change. Twenty-one years before, in Sultan of Johore v Abubakar Tunku Aris Bendahar120, the Privy Council had observed that it was not finally established in England that a foreign sovereign could not be impleaded in any circumstances. In 1975, however, in Philippine Admiral (Owners) v Wallem Shipping (Hong Kong) Ltd121, the Privy Council decisively rejected the absolute doctrine of foreign state immunity in relation to an action in rem and held that it was more consonant with justice in such a case to apply a "restrictive" doctrine of foreign state immunity. Just over one year later, in Trendtex Trading Corporation v Central Bank of Nigeria122, which concerned an action based on a commercial letter of credit arising out of the purchase of cement, the English Court of Appeal held that, as a matter of contemporary international law, the restrictive theory of foreign state immunity should generally be applied. The prospects of further development in the English common law of foreign state immunity were thereafter effectively brought to an end by the enactment of the State Immunity Act 1978 (UK) ("the SIA"). Three years later, however, in I Congreso del Partido123, a 1981 decision concerning a transaction undertaken between 1973 and 1975 (before the SIA came into force), the House of Lords unconditionally adopted the restrictive 118 [1938] AC 485 at 507. 119 Dicey and Morris, The Conflict of Laws, 9th ed (1973) at 143. 120 [1952] AC 318 at 343. 121 [1977] AC 373 at 397-403. NettleJ doctrine of foreign state immunity as part of the common law of England applicable to transactions not covered by the SIA. Lord Wilberforce delivered the leading speech. After referring with evident approval to the decision in Trendtex, his Lordship continued124: "The basis upon which one state is considered to be immune from the territorial jurisdiction of the courts of another state is that of 'par in parem' which effectively means that the sovereign or governmental acts of one state are not matters upon which the courts of other states will adjudicate. The relevant exception, or limitation, which has been engrafted upon the principle of immunity of states, under the so called 'restrictive theory,' arises from the willingness of states to enter into commercial, or other private law, transactions with individuals. It appears to have two main foundations: (a) It is necessary in the interest of justice to individuals having such transactions with states to allow them to bring such transactions before the courts. (b) To require a state to answer a claim based upon such transactions does not involve a challenge to or inquiry into any act of sovereignty or governmental act of that state. It is, in accepted phrases, neither a threat to the dignity of that state, nor any interference with its sovereign functions." As Lord Wilberforce observed, in some cases the process of deciding upon the character of the relevant act presents no difficulty125. In other situations, "it may not be easy to decide whether the act complained of is within the area of non-immune activity or is an act of sovereignty wholly outside it"126. Based, however, on a number of American and European decisions, his Lordship concluded that127: "[I]n considering, under the 'restrictive' theory whether state immunity should be granted or not, the court must consider the whole context in which the claim against the state is made, with a view to deciding whether the relevant act(s) upon which the claim is based, should, in that context, be considered as fairly within an area of activity, trading or commercial, or otherwise of a private law character, in which the state has chosen to 124 [1983] 1 AC 244 at 262. 125 [1983] 1 AC 244 at 263-264. 126 [1983] 1 AC 244 at 264. 127 [1983] 1 AC 244 at 267; see also at 272 per Lord Diplock, 276 per Lord Edmund- Davies, 277 per Lord Keith of Kinkel, 278 per Lord Bridge of Harwich. NettleJ engage, or whether the relevant act(s) should be considered as having been done outside that area, and within the sphere of governmental or sovereign activity." The Australian Law Reform Commission report As was noted in PT Garuda Indonesia Ltd v Australian Competition and Consumer Commission128, the Immunities Act was based on a comprehensive report by the Australian Law Reform Commission ("the ALRC") which traced the development of the common law doctrine of foreign state immunity from the former rule of absolute sovereign immunity to the now current restrictive view of foreign state immunity129. The report proposed Australian legislation on the topic which was designed to reflect the more restrictive view of the common law immunity that had been taken in other countries130 and adopted in their legislation131. For present purposes, the ALRC report is significant because, although it cannot displace the clear meaning of the Immunities Act, it assists in ascertaining the legislative context and purpose and the particular mischief that the legislation is seeking to remedy132. Immunity from the jurisdiction of Australian courts Immunities Act Part II of the Immunities Act (ss 9-22), which is headed "Immunity from jurisdiction", is exhaustive of the common law and, in s 9, indicates that the Immunities Act provides the sole basis for foreign state immunity in Australian courts. Section 9 is, however, expressly subject to other provisions of the Act, of 128 (2012) 247 CLR 240 at 245 [7]; [2012] HCA 33. 129 See Australia, House of Representatives, Foreign States Immunities Bill 1985, Explanatory Memorandum at 2; Australia, House of Representatives, Parliamentary Debates (Hansard), 21 August 1985 at 141-143; Australia, Senate, Parliamentary Debates (Hansard), 8 October 1985 at 795-796. 130 Australian Law Reform Commission, Foreign State Immunity, Report No 24, 131 See, eg, in the United States of America, the Foreign Sovereign Immunities Act of 1976, 28 USC §§1602-1611; and, in the United Kingdom, the SIA. 132 Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at 46-47 [47] per Hayne, Heydon, Crennan and Kiefel JJ; [2009] HCA 41; see also Acts Interpretation Act 1901 (Cth), s 15AB. NettleJ which the most important for present purposes is the exclusion by s 11(1) of the immunity in a proceeding in so far as the proceeding concerns a commercial transaction. Section 9 of the Immunities Act provides that: "Except as provided by or under this Act, a foreign State is immune from the jurisdiction of the courts of Australia in a proceeding." Section 11 is headed "Commercial transactions" and provides that: "(1) A foreign State is not immune in a proceeding in so far as the proceeding concerns a commercial transaction. Subsection (1) does not apply: if all the parties to the proceeding: are foreign States or are the Commonwealth and one or more foreign States; or have otherwise agreed in writing; or in so far as the proceeding concerns a payment in respect of a grant, a scholarship, a pension or a payment of a like kind. In this section, commercial transaction means a commercial, trading, business, professional or industrial or like transaction into which the foreign State has entered or a like activity in which the State has engaged and, without limiting the generality of the foregoing, includes: a contract for the supply of goods or services; an agreement for a loan or some other transaction for or in respect of the provision of finance; and a guarantee or indemnity in respect of a financial obligation; but does not include a contract of employment or a bill of exchange." As was concluded in Garuda133, the phrase "in so far as" in s 11(1) indicates that the provision is capable of application to a proceeding which is 133 (2012) 247 CLR 240 at 246 [11]. NettleJ only partly concerned with a commercial transaction. But in Garuda it was unnecessary to consider what effect that had on the interaction between the Immunities Act and the Foreign Judgments Act. The decision in NML Section 11(1) of the Immunities Act is, to some extent, based on s 3(1) of the SIA134. The latter provides as follows: "A State is not immune as respects proceedings relating toβ a commercial transaction entered into by the State; or an obligation of the State which by virtue of a contract (whether a commercial transaction or not) falls to be performed wholly or partly in the United Kingdom." In NML Capital Ltd v Republic of Argentina135, a majority of the Supreme Court of the United Kingdom concluded that s 3(1)(a) did not apply to a proceeding to enforce a foreign judgment under the Civil Jurisdiction and Judgments Act 1982 (UK). Lord Mance JSC delivered the principal judgment in favour of that interpretation. His Lordship reasoned, in substance, as follows: (1) At the time of enactment of the SIA, the rules of court provided no basis for obtaining leave for service out of the jurisdiction of a claim to enforce a foreign judgment or arbitral award. But s 12(7) of the SIA expressly maintained the need to obtain leave to serve out of the jurisdiction where required by the rules of court. The failure to provide for a means of obtaining leave to serve out of the jurisdiction in relation to the enforcement of a foreign judgment implied that, as originally enacted, the SIA was not intended to apply to proceedings for the enforcement of foreign judgments. Thus foreign state immunity in relation to such proceedings continued to be governed by the common law until identified provisions of the SIA were expressly applied to the enforcement of 134 See Australian Law Reform Commission, Foreign State Immunity, Report No 24, (1984) at 51-55 [90]-[93], 133; Australia, House of Representatives, Foreign States Immunities Bill 1985, Explanatory Memorandum at 2; Australia, House of Representatives, Parliamentary Debates (Hansard), 21 August 1985 at 141-143; Australia, Senate, Parliamentary Debates (Hansard), 8 October 1985 at 795-796. NettleJ foreign judgments by s 31 of the Civil Jurisdiction and Judgments Act136. Section 3(1) was calculated to adopt a restrictive theory of foreign state immunity. But, at the time of enactment of s 3(1), the English common law of foreign state immunity was unsettled. It was not until 1981 that it was finally determined by the House of Lords in I Congreso del Partido that foreign states were not immune under English common law in respect of commercial transactions. The uncertainty as to the extent of foreign state immunity at common law at the time of enactment of s 3(1) of the SIA raised a question as to whether the drafters of the SIA appreciated or covered the full possibility allowed by international law. More specifically, it threw doubt on whether they intended s 3(1)(a) of the SIA to apply to proceedings to enforce a foreign judgment or whether the drafters intended to leave that matter over to be dealt with later, as ultimately it was, in the Civil Jurisdiction and Judgments Act137. If the SIA had lifted foreign state immunity in respect of foreign judgments, it had done so in a very haphazard way. For example, under s 2, a foreign state was not immune as respects proceedings where it submitted to the jurisdiction of the courts in the United Kingdom but s 3 did not lift foreign state immunity in relation to the enforcement of foreign judgments where the foreign state had submitted to the jurisdiction of the foreign court. There were corresponding anomalies in ss 4-8. And there was no mention in the Civil Jurisdiction and Judgments Act of it being designed to replace such a haphazard relaxation of immunity with the comprehensive scheme provided for in the latter Act138. (4) Nor was it appropriate to ascribe an ambulatory meaning to "relating to a commercial transaction", such that even though it did not at first include the enforcement of a foreign judgment relating to a commercial transaction, it could be taken to have assumed that meaning once it was established at common law that the restrictive doctrine of foreign state immunity would henceforth be applied139. 136 [2011] 2 AC 495 at 533-534 [90]-[91]. 137 [2011] 2 AC 495 at 534 [91]. 138 [2011] 2 AC 495 at 534-535 [92]-[96]. 139 [2011] 2 AC 495 at 535-536 [97]. NettleJ The judgments below The judgments given in the Court of Appeal were in large measure directed to a comparison of s 11 of the Immunities Act with s 3(1) of the SIA and to the applicability of the reasoning in NML to s 11. Bathurst CJ, with whom Beazley P agreed, considered the broader and narrower constructions of s 3(1) of the SIA in NML and found that little assistance was to be gained from the extrinsic materials relevant to the Immunities Act because the ALRC report did not deal with the question of whether the commercial transaction exception to foreign state immunity applied to the proceedings or the underlying transaction. His Honour therefore approached the question by focusing on the text of the provision considered in the context of the Immunities Act as a whole. He considered that the words "proceeding concerns" suggest that what is being looked at is the issues raised by the proceedings themselves and that that was supported by the words "in so far". He also rejected the idea of s 11(1) being given an ambulatory meaning so as to pick up the common law's now changed approach to foreign state immunity. He concluded that140: "In circumstances where the legislation in its terms did not consider the question of registration of foreign judgments, where at the time it was passed the extent of the restriction on the immunity was uncertain and the words in question are narrower than the words 'relating to' in the [SIA], it does not seem to me appropriate to adopt an 'updated' construction. It is of significance in this regard that no amendment to the Immunities Act was made consequent upon the enactment of the Foreign Judgments Act." Basten JA considered that it was significant that the ALRC's proposals made no reference to an intention to cover registration of foreign judgments and, in his Honour's view, that consideration, coupled with the ALRC's express recommendation of provision for immunity in relation to the exercise of supervisory jurisdiction in respect of arbitrations, weighed heavily against construing s 11(1) as an exception to immunity with respect to proceedings for the registration of a foreign judgment. Like Bathurst CJ, Basten JA concluded that there were sound reasons not to apply an "updated construction" to s 11(1). His Honour stated that was in part "because the relationship between Australian and independent sovereign states is 140 Firebird Global Master Fund II Ltd v Republic of Nauru (2014) 316 ALR 497 at NettleJ very much a matter for the Federal government to assess and determine, rather than for a state court exercising federal jurisdiction"141. The application of s 9 Firebird contended that an application for the registration of a foreign judgment under the Foreign Judgments Act was not a "proceeding" within the meaning of s 9 of the Immunities Act, and therefore that Nauru was not entitled to any immunity from that process. That contention must be rejected. As was explained in PT Bayan Resources TBK v BCBC Singapore Pte Ltd142, an application to a State Supreme Court for the registration of a foreign judgment under the Foreign Judgments Act is, from its inception, a proceeding in a matter within the federal jurisdiction of the Supreme Court. Since the evident purpose of s 9 of the Immunities Act is to provide comprehensively for immunity from all forms of jurisdiction in all forms of proceedings in Australian courts, it cannot seriously be doubted that s 9 affords immunity against the exercise by a State Supreme Court of federal jurisdiction in a proceeding for the registration of a foreign judgment under the Foreign Judgments Act. The proper construction of s 11(1) Nauru sought to uphold the Court of Appeal's construction of s 11(1) of the Immunities Act on the basis of what it submitted were close similarities between s 11(1) and s 3(1) of the SIA and therefore between this case and the decision in NML. But, despite the apparent similarities between s 11(1) of the Immunities Act and s 3(1) of the SIA, the starting point for the proper construction of s 11(1) of the Immunities Act is not the decision in NML. It is the words of s 11(1)143. And, according to the plain and ordinary meaning of the words of s 11(1), a proceeding for the registration of a foreign judgment for a money sum owed under a commercial transaction is a proceeding which "concerns" a commercial transaction. 141 Firebird Global Master Fund II Ltd v Republic of Nauru (2014) 316 ALR 497 at 142 (2015) 89 ALJR 975 at 984-985 [51]-[54]; [2015] HCA 36. 143 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381 [69] per McHugh, Gummow, Kirby and Hayne JJ; [1998] HCA 28; Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at 46-47 [47] per Hayne, Heydon, Crennan and Kiefel JJ; Momcilovic v The Queen (2011) 245 CLR 1 at 175 [441] per Heydon J; [2011] HCA 34. NettleJ The fact that such a proceeding might also be described as one which concerns the registration of a foreign judgment does not detract from the semasiological propriety of describing it as a proceeding which concerns a commercial transaction. The connecting term "concerns" connotes a relationship between the proceeding and a commercial transaction. There is nothing in that term that suggests that a proceeding which concerns a commercial transaction must be one that bears only that single character. Nauru submitted that the subject matter of the registration proceeding is the Japanese judgment rather than the underlying bond instruments. But that submission obscures the practical reality that, from the perspective of a party to a commercial transaction that is seeking to recover a debt owed to it by a foreign state, there is no distinction between initiating proceedings, the registration of the judgment in another country and the steps taken to enforce that judgment against property of the foreign state. Although the nature or legal form of the proceeding varies at each stage, in substance each stage is directed towards the same end of enforcing the claimant's rights arising from a commercial transaction. Thus, each stage of the proceeding can fairly be said to "concern" that commercial transaction. The next step is to note that there is no indication elsewhere in the Immunities Act or beyond it of a statutory purpose of exempting proceedings for the registration of foreign judgments from the operation of s 11(1). The Immunities Act was enacted to give effect to the restrictive doctrine of foreign state immunity. In terms, it does so by denying immunity in relation to proceedings, whatever their nature, which concern a commercial transaction. There is nothing in that or otherwise implicative of an intention to exclude a proceeding for the registration of a foreign judgment from the class of proceedings to which immunity does not attach. Thirdly, according to ordinary canons of statutory construction, an Act must be construed so far as possible to give the same meaning to the same words wherever those words appear in the statute144. It is clear that "proceeding" in s 9 includes a proceeding for the registration of a foreign judgment under the Foreign Judgments Act. Otherwise, there would be no provision for the immunity of foreign states from proceedings for the registration of foreign judgments. In the absence of a contrary indication, it is to be presumed that "proceeding" has the same meaning in s 11(1). So, where s 11(1) refers to a proceeding which concerns a commercial transaction, it is prima facie to be read 144 Registrar of Titles (WA) v Franzon (1975) 132 CLR 611 at 618 per Mason J; [1975] HCA 41. NettleJ as including a proceeding for the registration of a foreign judgment under the Foreign Judgments Act which concerns a commercial transaction. It was submitted for Nauru that the fact that s 17 of the Immunities Act makes specific provision for proceedings for the supervision and enforcement of foreign arbitral awards, but does not make specific provision for immunity in relation to the registration of foreign judgments under the Foreign Judgments Act, implies a statutory purpose that s 11(1) not extend to the registration and enforcement of foreign judgments under the Foreign Judgments Act. That argument is unconvincing. Although the bulk of arbitrations are concerned with commercial transactions, there are some which are concerned with matters other than commercial transactions145. The evident purpose of s 17 is to provide comprehensively for immunity in relation to proceedings for the supervision of arbitral proceedings and the enforcement of arbitral awards regardless of whether or not they concern commercial transactions. The exemption for proceedings which concern commercial transactions would not achieve that objective. A further difficulty, as will be seen, is that s 17(2)(a) of the Immunities Act provides, inter alia, for exemption from immunity in relation to proceedings which concern a commercial transaction where, as a result of an agreement entered into under s 11(2)(a)(ii), the operation of s 11(1) has been excluded. It was next contended on behalf of Nauru that, because the exceptions from immunity provided for in ss 12-16 of the Immunities Act all have some link to matters in Australia, it is unlikely that s 11(1) is directed to a proceeding to enforce a foreign judgment by registration under the Foreign Judgments Act. In general terms, s 12 of the Immunities Act provides that a foreign state is not immune in a proceeding in so far as the proceeding concerns the employment of a person under a contract of employment made in Australia or to be performed wholly or partly in Australia. Section 13 provides that a foreign state is not immune in a proceeding in so far as the proceeding concerns death, personal injury or loss or damage to tangible property caused by an act done or omitted to be done in Australia. Section 14 provides that a foreign state is not immune in a proceeding in so far as the proceeding concerns a state's interest in, possession of or use of immovable property in Australia or its interest in property which arose by way of gift made in Australia. Section 15 provides that a foreign state is not immune in a proceeding in so far as the proceeding concerns the ownership, 145 See, eg, SD Myers Inc v Government of Canada 40 ILM 1408 (2001); Marvin Feldman v Mexico 42 ILM 625 (2003). NettleJ registration or protection of intellectual property in Australia. Section 16 provides that a foreign state is not immune in a proceeding in so far as the proceeding concerns its membership, or a right or obligation that relates to its membership, of a body corporate, unincorporated body or partnership that has a member that is not a foreign state or the Commonwealth and is incorporated or established under the law of Australia or is controlled from or has its principal place of business in Australia. In summary, therefore, ss 12-16 apply where a proceeding concerns an act done or omitted to be done in Australia. It was contended that, while that makes sense if s 11(1) is construed as limited to proceedings that are directly concerned with the subject matter of a dispute, it would make no sense if s 11(1) extended to a proceeding for the registration of a foreign judgment concerning the subject matter of a dispute. In Nauru's submission, that is a strong indicator that a proceeding for the enforcement of a foreign judgment which concerns a commercial transaction is not a proceeding which concerns a commercial transaction within the meaning of As will be appreciated, that argument is based on some of the observations of Lord Mance JSC in NML which are summarised above146. With respect, however, it should be rejected. There is nothing surprising or anomalous about a foreign state being amenable to the jurisdiction of an Australian court under one of ss 12-16 in a proceeding under the Foreign Judgments Act to register a foreign judgment which concerns one of the matters the subject of ss 12-16. As may be discerned from the ALRC report, the purpose of each of the exceptions to immunity provided for in ss 12-16 is to deal specifically with the different considerations which apply to different kinds of cases. So, in the case of employment contracts which are provided for in s 12, the basis of the exception to immunity is that, where a foreign state enters into an employment contract in Australia or which is to be performed in Australia, the interest of Australia in providing a local forum outweighs the interest of the foreign state in exclusive jurisdiction147. In the case of personal injuries and property claims dealt with in s 13, the basis of the exception to immunity is that, where a foreign state wrongfully causes death or injury or damage to tangible property in Australia, there is no merit in requiring the plaintiff to litigate in the defendant's national courts when Australian courts can provide the obvious and convenient 146 See above at [179]. 147 Australian Law Reform Commission, Foreign State Immunity, Report No 24, NettleJ local remedy148. In the case of immovable property in Australia, which is dealt with in s 14, the basis of the exception to immunity is the generally accepted proposition of public international law that there should be no immunity in actions arising out of the ownership by a foreign state of immovable property in the forum149. In the case of intellectual property, notwithstanding that it was recognised that there would be a considerable degree of overlap between s 15 and one or other of the more general provisions, particularly the commercial transaction and property exemptions, s 15 was included to provide specific guidance to courts rather than leaving them to work out solutions on the basis of the more general provisions and because the overlap was not complete150. Similarly, in the case of s 16, although it was recognised that, in many cases concerning disputes which might arise out of a foreign state's participation in a body corporate, unincorporated association or partnership, the foreign state would be denied immunity under the commercial transaction exemption, it was considered preferable to include a specific provision to ensure that all relevant matters were covered and to provide greater precision151. Taken together, ss 12-16 thus reflect the idea that, although a foreign state is, generally speaking, immune to the jurisdiction of Australian courts, there are some acts and omissions and some forms of property which are so closely connected to Australia that it is appropriate that a foreign state be amenable to the jurisdiction of Australian courts in proceedings concerning such matters. It is true that, if a proceeding concerning one or other of the matters the subject of ss 12-16 is taken to include a proceeding to register a foreign judgment concerning one or other of those matters, the basis on which the foreign court assumes jurisdiction to render the foreign judgment will very likely be something other than that the proceeding concerns an act or omission or some form of property which is so closely connected to Australia that it is appropriate that the foreign state be amenable to the jurisdiction of Australian courts. 148 Australian Law Reform Commission, Foreign State Immunity, Report No 24, 149 Australian Law Reform Commission, Foreign State Immunity, Report No 24, 150 Australian Law Reform Commission, Foreign State Immunity, Report No 24, 151 Australian Law Reform Commission, Foreign State Immunity, Report No 24, NettleJ It is, however, not the function of the Immunities Act to regulate the susceptibility of a foreign state to the jurisdiction of the foreign court. As is recognised in s 7(4)(c) of the Foreign Judgments Act, Australian courts are concerned with whether the foreign state would have immunity according to the rules of public international law. And, if the foreign state is amenable to the jurisdiction of the foreign court according to the rules of public international law, it is then both logical and appropriate that the foreign state be amenable to the jurisdiction of an Australian court in a proceeding under the Foreign Judgments Act to enforce the foreign judgment, provided the judgment concerns one of the exceptions to immunity contemplated by ss 12-16 of the Immunities Act. The same holds true for s 11(1). The exception to immunity provided for in s 11(1) in relation to a proceeding which concerns a commercial transaction rests on the basic principle that a foreign state should not be immune from the jurisdiction of Australian courts in a commercial matter within the ordinary jurisdiction of Australian courts. Logic dictates a similar approach in relation to a proceeding to register a foreign judgment concerning a commercial transaction. A judgment of a foreign court against a foreign state in a proceeding which concerns a commercial transaction may not be registered in Australia under the Foreign Judgments Act if the foreign state is immune under the rules of public international law from the jurisdiction of the foreign court152. But, if the foreign state is not immune from the jurisdiction of the foreign court under the rules of public international law, it is both logical and appropriate that the foreign state be amenable to the jurisdiction of an Australian court in a proceeding under the Foreign Judgments Act to register the foreign judgment, if the judgment concerns a commercial transaction within the meaning of s 11(1). The Solicitor-General of the Commonwealth highlighted the fact that, under s 17(2)(a) of the Immunities Act, if a foreign state has contracted out of the s 11(1) exemption from immunity in relation to proceedings which concern a commercial transaction but has agreed to submit a dispute about the commercial transaction to arbitration, the foreign state is not immune from the jurisdiction of an Australian court in a proceeding for the enforcement of the arbitral award. The Solicitor-General submitted that that was inconsistent with interpreting s 11(1) such that a proceeding under the Foreign Judgments Act to register a foreign judgment concerning the commercial transaction is a proceeding which concerns a commercial transaction. He argued that, if a proceeding for the registration of a foreign judgment which concerns a commercial transaction is a proceeding to which s 11(1) applies, a proceeding for the enforcement of an arbitral award which concerns a commercial transaction would also be a 152 Foreign Judgments Act, s 7(4)(c). NettleJ proceeding to which s 11(1) applies and, therefore, that there would be no need for the special provision for the enforcement of an arbitral award under s 17(2). That argument should also be rejected. Plainly enough, if a proceeding to register a foreign judgment which concerns a commercial transaction is properly described as a proceeding to which s 11(1) applies, a proceeding for the enforcement of an arbitral award about a dispute which concerns a commercial transaction might properly be described as a proceeding to which s 11(1) applies. Non constat, however, that there is no need for s 17(2) in order to render such an award enforceable. In terms, s 17(2) operates only where a foreign state has contracted out of the operation of s 11(1) pursuant to s 11(2)(a)(ii) (with the consequence that the arbitral award cannot be enforced pursuant to s 11(1)). Were it not for s 17(2), there would be no means of enforcing the award. It is also to be observed that, as appears from the ALRC report153, s 17(1) was intended to reflect the wider view that, where a foreign state agrees to arbitration, it should be amenable to the supervisory jurisdiction of the court whether or not it would have been immune from the jurisdiction of the court in a proceeding concerning the underlying transaction; whereas s 17(2) is intended to reflect the idea that, in the case of a proceeding to enforce a foreign arbitral award, a foreign state should be immune notwithstanding that it agreed to the arbitration unless the foreign state would not be immune in a proceeding concerning the underlying transaction or event the subject of the award. In point of principle, that accords with the way that s 11(1) applies to a proceeding to enforce a foreign judgment where the foreign state would not be immune from the jurisdiction of an Australian court in a proceeding directly concerning the underlying transaction. Nauru drew attention to s 21 of the Immunities Act, which provides that, if a foreign state is not immune in so far as a proceeding concerns a matter, the foreign state is not immune in any other proceeding arising out of or relating to the first-mentioned proceeding. Nauru contended that, if a proceeding to register a foreign judgment which concerns a commercial transaction fell within the meaning of s 11(1), it would follow more generally that any proceeding to enforce a judgment was a proceeding concerning the underlying transaction the subject of the judgment. Thus, it was submitted, s 21 would have no work to do. That argument should similarly be rejected. Section 21 is directed generally to proceedings arising out of other proceedings from which a foreign state is not immune. The absence of immunity from the other proceedings will in 153 Australian Law Reform Commission, Foreign State Immunity, Report No 24, NettleJ each case depend on the nature of the other proceedings. For example, in the case of a proceeding for the enforcement of a foreign judgment which concerns a commercial transaction, the absence of immunity will be because the proceeding concerns a commercial transaction. By contrast, in the case of a proceeding to enforce a foreign arbitral award, where s 11(1) has been excluded by agreement under s 11(2)(a)(ii), the absence of immunity under s 17(2) will be because the foreign state agreed to submit the underlying dispute to arbitration. More precisely, lack of immunity under a provision like s 11(1) will rest on the fact that a proceeding concerns a matter but lack of immunity under a provision like s 17(2) will rest on agreement. Accordingly, while it may not have been necessary to have a provision like s 21 in cases arising under provisions like s 11(1), it plainly was necessary, or at least highly desirable, to have a provision like s 21 in cases arising under provisions like s 17(2). This being so, it would be drawing a very long bow to accept that the fact that s 21 applies generally to all cases implies that s 11(1) should not be construed according to its natural and ordinary meaning. Next, with respect to the construction of s 11(1), it is to be recalled that, in following the reasoning of a majority in NML, the Court of Appeal took the view that s 11(1), as enacted, excludes registration of a foreign judgment from the scope of the exception and it does not have an ambulatory or "updated" operation sufficient to import subsequent public international law developments in the doctrine of foreign state immunity154. As will be apparent from the reasons already given, however, the text of s 11(1) should not be construed as excluding proceedings for the registration of foreign judgments under the Foreign Judgments Act. Hence, for present purposes, it is unnecessary to consider whether the provision has an ambulatory or "updated" operation sufficient to accommodate developments in the public international law doctrine of foreign state immunity from time to time. Finally on this aspect of the matter, because the Immunities Act is capable of operating harmoniously with the Foreign Judgments Act155, Firebird's the that submission Immunities Act must be rejected. the Foreign Judgments Act impliedly repealed 154 See, eg, Jurisdictional Immunities of the State (Germany v Italy: Greece intervening) [2012] ICJ Reports 99. 155 Ferdinands v Commissioner for Public Employment (2006) 225 CLR 130 at 137- 138 [18]; [2006] HCA 5. NettleJ The need for service in accordance with the Immunities Act As was earlier recorded, the Court of Appeal held that Firebird was required to serve Nauru before applying to register the Japanese judgment under the Foreign Judgments Act156. Firebird challenged that conclusion on the basis that the only obligations of service imposed by the Immunities Act are under s 27 in relation to judgments in default of appearance and under s 28 in relation to the enforcement of default judgments. It was submitted that registration of a judgment under the Foreign Judgments Act should not be conceived of as a default judgment or a judgment entered in default of appearance within the meaning of Pt III of the Immunities Act. Firebird submitted that, apart from ss 27 and 28, the only function of Pt III is to provide an exclusive means of service in cases where service is required by some other statutory provision or rule of court dehors Pt III; and, it was said, that view of the matter is supported by parts of the ALRC report which show that the aim of Pt III was to provide a means of service which would eliminate the uncertainties and other problems which, until then, had attended other forms of service on foreign states157 There is force in those contentions. According to ordinary conceptions, an order for the registration of a foreign judgment under the Foreign Judgments Act is not a judgment in default of appearance or a default judgment. As was held in Hunt v BP Exploration Co (Libya) Ltd158 with respect to the Queensland predecessor of the Foreign Judgments Act, an application for registration of a foreign judgment does not involve an action in personam or, therefore, necessitate service of the initiating process in or outside the jurisdiction. Instead, the Foreign Judgments Act contemplates that an application for registration of a foreign judgment will be made ex parte and that notice of registration will be given to the judgment debtor, who may then apply to set aside the registration under s 7. The argument to the contrary, which found favour with the Court of Appeal, is based on s 3(1) of the Immunities Act, which defines "initiating process" as "an instrument (including a statement of claim, application, 156 Firebird Global Master Fund II Ltd v Republic of Nauru (2014) 316 ALR 497 at 509 [57] per Bathurst CJ, 529 [210] per Beazley P, 542-543 [269]-[270] per Basten JA. 157 Australian Law Reform Commission, Foreign State Immunity, Report No 24, 158 (1980) 144 CLR 565 at 573 per Stephen, Mason and Wilson JJ; [1980] HCA 7. NettleJ summons, writ, order or third party notice) by reference to which a person becomes a party to a proceeding", and s 3(6), which provides that "[a] reference in this Act to the entering of appearance or to the entry of judgment in default of appearance includes a reference to any like procedure". Rule 53.2 of the UCPR provides that proceedings for registration of a judgment under Pt 2 of the Foreign Judgments Act are to be commenced in the Supreme Court by summons and that, in any such proceedings, the judgment creditor is to be the plaintiff and the judgment debtor is to be the defendant. Thus, it was said, although the UCPR contemplate that an application for registration of a foreign judgment will ordinarily proceed ex parte, the summons by which the proceeding for the registration of a foreign judgment is commenced in accordance with r 53.2 is an "initiating process" within the meaning of s 3(1) of the Immunities Act and, because registration of a foreign judgment gives the foreign judgment the same effect as a judgment of the registering court entered on the date of registration159, the process for registration is sufficiently akin to a default judgment to be classed as a "like procedure" within the meaning of s 3(6). That argument should be rejected for at least three reasons. First, there is no default involved in the registration of a foreign judgment. As was noted in BP Exploration, it is a designedly ex parte procedure. Secondly, s 6(4) of the Foreign Judgments Act provides that the Australian court must specify a period in which the judgment debtor may apply to set aside the order for registration, and, as was also noted in BP Exploration160, it is implicit in s 6(4) that the Australian court will require service of the notice of the registration of judgment on the judgment debtor within that period. Thirdly, s 7(2) allows the judgment debtor to apply to set aside the order for registration on the ground that it is not a judgment to which Pt 2 of the Foreign Judgments Act applies, which among other things would include a case in which the judgment debtor is immune from the jurisdiction of the Australian court. Taking those considerations together, the scheme of the Foreign Judgments Act in its intersection with the Immunities Act presents as being that, despite any possibility of a judgment debtor being immune to the jurisdiction of an Australian court, the application for registration of a foreign judgment may proceed ex parte β as it would in the case of a judgment debtor who was not immune to the jurisdiction of the Australian court β with the issue of immunity being determined when and if the judgment debtor seeks to set aside the order for registration on the ground of immunity to the jurisdiction of the Australian court. Accordingly, the judgment the subject of registration would not be one to which the Foreign Judgments Act applies. 159 Foreign Judgments Act, s 6(7). 160 (1980) 144 CLR 565 at 573-575 per Stephen, Mason and Wilson JJ. NettleJ Of course, that does not mean that an Australian court cannot require service of the summons before proceeding to registration where that is considered to be expedient. The UCPR allow for that possibility161 and, in any event, a court may so require if in doubt about the amenability of a judgment debtor to the court's jurisdiction. There may also be practical difficulties associated with some foreign states responding to a notice of the registration of a foreign judgment within the minimum 14-day requirement for such an application under the UCPR162. Thus, where a foreign state is a judgment debtor, a court would usually set a longer period for an application to be made to set aside the registration under s 6(4) of the Foreign Judgments Act and, similarly, there may be good reason to extend that period following an application under s 6(5) by a foreign state. The point remains, however, that the rules in this respect are facultative. They enable appropriate orders for service to be made according to the facts and circumstances of each case, rather than imposing an inevitable and ineluctable service requirement regardless of the facts and circumstances of the case. Immunity from execution against property of foreign states Part IV of the Immunities Act provides separately for immunity of the property of a foreign state from execution of a judgment, order or arbitral award. As appears from the ALRC report, that is so because, although the restrictive doctrine of immunity from jurisdiction reflects a plurality of principles embodied in the general exception to immunity concerning commercial transactions and the specific exceptions to immunity provided for in ss 12-17, the sole criterion of what property of a foreign state remains immune from execution is the distinction between property used for governmental, public or "sovereign" purposes and property used for private or commercial purposes163. As is also highlighted in the ALRC report, the criteria of commerciality for the purposes of the exception to immunity from jurisdiction differ from those of commerciality for the purposes of the exception to immunity from execution164. In the case of the exception to immunity from jurisdiction, the sense of what is "commercial" is to be discerned from the nature of the specific 161 UCPR, r 53.2(3). 162 UCPR, r 53.5. 163 Australian Law Reform Commission, Foreign State Immunity, Report No 24, 164 Australian Law Reform Commission, Foreign State Immunity, Report No 24, NettleJ transaction165, with the consequence that "purpose" or "motive" are largely beside the point. By contrast, in the case of the exception to immunity from execution, "purpose" is the principal consideration and "commercial purpose" is defined in s 3(5) as including "a trading, a business, a professional and an industrial purpose" (emphasis added). Pursuant to s 30 of the Immunities Act, the property of a foreign state is immune from any process or order of an Australian court for the satisfaction or enforcement of a judgment "[e]xcept as provided by this Part". Section 32(1) creates a general exception to this immunity in relation to "commercial property" and s 32(3) provides that for the purposes of the section: commercial property is property, other than diplomatic property or military property, that is in use by the foreign State concerned substantially for commercial purposes; and property that is apparently vacant or apparently not in use shall be taken to be being used for commercial purposes unless the court is satisfied that it has been set aside otherwise than for commercial purposes." Section 41 of the Immunities Act states that "a certificate in writing given by the person for the time being performing the functions of the head of a foreign State's diplomatic mission in Australia to the effect that property specified in the certificate ... is or was at a specified time in use for purposes specified in the certificate is admissible as evidence of the facts stated in the certificate". In this matter, such a certificate was given by the Consul-General for Nauru, Mrs Chitra Jeremiah ("the s 41 certificate"). the Honourable David Adeang MP, Minister of Finance and Minister of Justice for Nauru swore an affidavit and gave oral evidence about the purposes of Nauru's bank accounts. Additionally, Comparison between the Immunities Act and the US, UK and Canadian approaches In the United States, the Foreign Sovereign Immunities Act of 1976166 allows for the execution of a judgment against foreign state property which "is or was used for the commercial activity upon which the claim is based"167 and provides that the commercial character of an activity is to be determined by 165 Immunities Act, s 11. 166 28 USC §§1602-1611. 167 28 USC Β§1610(a)(2). NettleJ reference to its "nature" rather than its "purpose"168. By contrast, under Pt IV of the Immunities Act, a foreign state's property is immune from execution unless it is used "substantially for commercial purposes"169. In so providing, Pt IV of the Immunities Act is designedly different from the way in which, in the United Kingdom, the SIA links the test for the immunity of a foreign state's property from enforcement to the definition of "commercial transaction" that applies to the immunity of a foreign state from jurisdiction170. As was emphasised in the ALRC report171, Pt IV is thereby calculated to avoid the result in Alcom Ltd v Republic of Colombia172, in which the English Court of Appeal held that, since all contracts for goods and services and all financial transactions, irrespective of purpose, were defined as commercial transactions, money held in a bank account to pay the running expenses of an embassy was money used for commercial purposes rather than for the governmental purpose of running the embassy. Admittedly, that decision was subsequently overturned by the House of Lords on the basis that, under the SIA, it was incumbent on the judgment creditor to prove that all of the moneys standing to the credit of the account were earmarked by the foreign state solely for being drawn upon to settle liabilities incurred in commercial transactions (subject only to de minimis exceptions)173. But the House of Lords did not demur to the proposition that moneys drawn to pay for the supply of goods and services to the mission would otherwise be used for commercial purposes. It is different under the purpose-based approach which applies under Pt IV of the Immunities Act. In determining whether property is held by a foreign state for a commercial purpose, it is necessary to bear in mind the individual circumstances of the foreign state. What may properly be regarded as a commercial purpose in the context of one foreign state's circumstances may well 168 28 USC Β§1603(d). See also Republic of Argentina v Weltover Inc 504 US 607 at 614 (1992); Connecticut Bank of Commerce v Republic of Congo 309 F 3d 240 at 169 Immunities Act, s 32(3)(a). 170 SIA, ss 3(3), 17(1) (emphasis added). 171 Australian Law Reform Commission, Foreign State Immunity, Report No 24, 172 [1983] 3 WLR 906 at 912-913 per Sir John Donaldson MR; [1984] 1 All ER 1 at 5- 173 Alcom Ltd v Republic of Colombia [1984] AC 580 at 604 per Lord Diplock. NettleJ be considered a governmental purpose in the context of another state's circumstances. That point was made by Steele J in Carrato v United States of America174 in relation to the Canadian approach to the commercial activity exception to immunity from jurisdiction (which requires the court to consider both the nature of the act and also its purpose). As Steele J said: "acts that some persons might normally consider to be commercial are not so when they are done in the performance of a sovereign act of State"175. An activity can also be multi- faceted and so, for the purposes of the commercial activity test of immunity from jurisdiction, "it is necessary to consider which aspect of that activity is most relevant to the proceedings"176. Parity of reasoning dictates that the same is true of purpose. turn on "whether In Canada, where the assessment of whether a transaction comes within the commercial transaction exception to immunity depends on purpose as well as the nature of the transaction, it is considered that, if a sovereign state employs a state-owned corporation to regulate or control a market, the question of immunity will the government shareholder/creator are ordinary aspects of its role"177. Likewise, under Pt IV of the Immunities Act, where immunity from execution turns on whether property is used for a commercial purpose, the question of immunity will depend on whether the activities for which the property is used are ordinary aspects of the governmental functions of the sovereign state. the particular activities by The bank accounts of Nauru The Court of Appeal held that all of the bank accounts which had been garnisheed were exempt from execution because they were either used for governmental purposes or not used but set aside for a non-commercial purpose, 174 (1982) 141 DLR (3d) 456. 175 (1982) 141 DLR (3d) 456 at 459, applying Democratic Republic of Congo v Venne [1971] SCR 997. See also Lorac Transport v The Ship "Atra" (1984) 9 DLR (4th) 176 Dorais v Saudi Arabian General Investment Authority 2013 QCCS 4498 at [31] per Collier JSC, referring to Re Canada Labour Code [1992] 2 SCR 50. 177 Bombardier Inc v AS Estonian Air (2013) 115 OR (3d) 183 at 195 [57] per EM Morgan J. See also the decision of the Ontario Court of Appeal which affirmed that decision: Bombardier Inc v AS Estonian Air (2014) 118 OR (3d) 702 NettleJ and therefore not used substantially for commercial purposes178. In many cases, Firebird does not now dispute that conclusion. Firebird does contend, however, that there are seven classes of accounts in relation to which the Court of Appeal was in error. Those accounts are described in the Notice of Appeal as: (1) the Airline Leasing Accounts, (2) the Phosphate Compensation Account, (3) the Fuel Accounts, (4) the Utilities Account, (5) the Loan Account, (6) the Residual Accounts, and (7) the Term Deposit. It is convenient to take them in turn. The Airline Leasing Accounts There are three Airline Leasing Accounts. They were described in the s 41 certificate as follows: "[Account number] 034702 422780 (Yaren Aircraft Leasing Co) The funds in this account were used by [the Nauru] Government to provide government loans to Nauru Airlines for the procurement and maintenance of its aircraft. The government loans were provided on a non interest/non-profit basis and have been repaid. [Account number] 034002 858233 (Pacific Aircraft Leasing Company) The funds in this account are used for the same purpose as the Yaren Aircraft Leasing Co Account ... [Account number] 034002 858356 β Yaren Aircraft Leasing Co This account is used for the same purpose as [Account 034702 422780]." Mr Adeang gave oral evidence in chief that Nauru provided air services for Nauru through its wholly owned government corporation, Nauru Airlines, because no other operator was interested in providing air services to a country of only 10,000 people. He said that Nauru did not make money out of the airline, although ideally Nauru would like that to happen. He also said that "what moneys we do make we turn to the provision of the air services to make it a sustainable venture". In cross-examination, Mr Adeang added that the airline did not confine its activities to Nauru. It also engaged in chartering, had in the past entered into commercial contracts described as Norfolk Air and Heavy Lift 178 Firebird Global Master Fund II Ltd v Republic of Nauru (2014) 316 ALR 497 at 515-529 [91]-[206] per Bathurst CJ, Beazley P agreeing at 529 [210]. Basten JA preferred not to decide the issue: at 552 [316]. NettleJ contracts, and, at least as far as its charter business was concerned, was operating in a competitive market place. The Court of Appeal concluded that the funds in the Airline Leasing Accounts were not in use for a commercial purpose. Bathurst CJ began with the observation that "commercial purposes" are not defined. In fact, as will be recalled, "commercial purpose" is defined in s 3(5) of the Immunities Act as including "a trading, a business, a professional and an industrial purpose". His Honour nevertheless reasoned, based on what was said by the Supreme Court of Canada in Kuwait Airways Corp v Iraq179 and the Superior Court of Justice of Ontario in Bombardier Inc v AS Estonian Air180, which concerned whether the Republic of Estonia's ownership of shares in AS Estonian Air was a "commercial activity", that the fact that money is expended or proposed to be expended on "what might be described as commercial transactions" is not necessarily determinative of its use for commercial purposes181. Hence, as his Honour said, where funds are to be used for the purpose of government administration, performance of a government's civic duties and functions to its citizens or the advancement of the community, "the fact that that object is achieved by entering into commercial transactions [does not mean] that the funds are used for commercial purposes"182. On that basis, Bathurst CJ concluded that, although Nauru Airlines engages in some commercial activities including flights on a charter basis, the funds in the Airline Leasing Accounts were not used for commercial purposes, because183: "[T]he primary purpose of the investment in Nauru was to provide aircraft services to what would otherwise have been an isolated community. In these circumstances it does not seem to me that the moneys in the bank account [are] used for purposes which, whether by loans or other investment, could be said to be for commercial purposes." 179 [2010] 2 SCR 571. 180 (2013) 115 OR (3d) 183 at 193 [49]. 181 Firebird Global Master Fund II Ltd v Republic of Nauru (2014) 316 ALR 497 at 182 Firebird Global Master Fund II Ltd v Republic of Nauru (2014) 316 ALR 497 at 522-523 [172]; Carrato (1982) 141 DLR (3d) 456 at 459 per Steele J. 183 Firebird Global Master Fund II Ltd v Republic of Nauru (2014) 316 ALR 497 at NettleJ With respect, that conclusion was correct. As Bathurst CJ deduced, funding Nauru Airlines was part of Nauru's ordinary governmental functions of providing an otherwise isolated Nauruan community with aircraft services. The fact that the airline, as opposed to Nauru, may have engaged in commercial activities was beside the point. The purpose of the loans was not to generate profits but to ensure that the people of Nauru were provided with air transportation. The Phosphate Compensation Account There was only one Phosphate Compensation Account, which was described in the s 41 certificate as follows: "[Account number] 034001 110549 β Rehabilitation Funds A The funds in this account are derived from [Nauru] Government royalties received from the sale of phosphate mined on [Nauru]. The funds in this accounts [sic] are used for the purposes of: paying compensation to landowners for the leasing of land to conduct the phosphate mining operations; and environmental rehabilitation programs to restore land used for phosphate mining on [Nauru] and payment of salaries of those government employees involved in the rehabilitation programs." Mr Adeang was not cross-examined on that aspect of the certificate. As Bathurst CJ observed, bank account statements which were in evidence showed that from 25 August 2014 no withdrawals or deposits had been made from or into the account, other than interest. But that was hardly significant given that the accounts were frozen by order of the court for the bulk of that period. Bathurst CJ reasoned, however, that although the use of funds to conduct phosphate mining operations on Nauru might be conceived of as substantially for commercial purposes, the funds in this account were not used to facilitate phosphate mining but rather as part of a government policy to compensate landowners on whose land mining operations were conducted. In his Honour's view, that objective, combined with the fact that the programme was carried out by government employees rather than a commercial entity, was a sufficient basis to conclude that the account was not used for commercial purposes but rather for sovereign purposes consistent with the current government policy of Nauru. With respect, there is no reason to doubt that conclusion either. In the absence of cross-examination or other contrary evidence, it was open to find that NettleJ the compensation of landowners for damage done to their lands by phosphate mining operations from which Nauru derived royalties was well within the ordinary governmental functions of Nauru; and, therefore, that funds used for that purpose were used for a substantially governmental as opposed to commercial purpose. The Fuel Accounts There were two Fuel Accounts, which were described in the s 41 certificate as follows: "[Account number] 034702 355848 (USD Ron Treasury Account) The funds in this accounts [sic] are derived predominately from the issuing of fishing licences by [the Nauru] Fisheries and Marine Authority, a department of [the Nauru] Government. The fishing licences are paid for by licensees in USD. The funds are used by [the Nauru] Government to purchase fuel to supply to the population of [Nauru] and business[es] located on [Nauru]. The main customers for the fuel are the Nauru Utilit[ies] Corporation, a government ow[n]ed corporation, which operates the sole power plant on the island and Nauru Airlines, [Nauru's] national airline which is also a government ow[n]ed corporation and Transfield Services, the contractor who operates the Regional Processing Centres. The revenue derived by the government from the sale of the fuel does not cover the cost of the purchase of the fuel by the government. [Account number] 034002 858305 (Japan NPGA) The funds in this account are derived from funds provided by the Japanese Government by way of foreign aid and used by [Nauru] for the purpose of providing budget support to the [Nauru] Treasury in order to purchase fuel." It may be noted that, in contradistinction to the airline operations, which were carried on by a wholly owned corporation of the Nauru Government, the evidence was that the fuel transactions were undertaken by the Nauru Government itself. In cross-examination, Mr Adeang said that the government purchased all of the fuel on the island and sold it at a commercial price calculated to cover the costs of providing the fuel. Nauru's customers included the Nauru Utilities Corporation, Nauru Airlines, and a number of petrol stations on the island, which bought fuel from the Nauru Government at a price which the Nauru Government calculated to cover its costs of purchasing and distributing the fuel. NettleJ Other things being equal, that might have made a difference. As defined, a "commercial purpose" includes both a "trading purpose" and a "business purpose"; and, based on some of Mr Adeang's evidence, it might be said that the Nauru Government was in the business of trading in petrol. To some extent at least, its activities were analogous to those of various Australian State-owned power corporations which used to, and in some cases still do, conduct the generation, distribution and sale of electricity as a monopoly supplier of electricity within the State. And it could hardly be doubted that such a State- owned power corporation carries on a business of trading in electricity, even if it does so ultimately on a not-for-profit basis of charging no more than is required to cover its costs and provide for necessary capital reinvestment. As has been seen, however, in this area of the law it is necessary to bear in mind that what may properly be regarded as a commercial purpose in the context of one foreign state's circumstances may well be considered a governmental function in the context of another. And, as appears from Mr Adeang's evidence, and would seem likely in any event, the circumstances which apply in Nauru are in relevant respects very different from any Australian State. Governments of less developed countries are often involved in fuel subsidisation programmes. Critically, as the evidence established, Nauru is an island country of only 10,000 people, which no established or other oil company is prepared to service, and which therefore is dependent on its government to make the arrangements necessary to provide it with petroleum. Without the government's involvement, there would be no petroleum on Nauru and therefore no way of sustaining the nation's aviation and road transport, agriculture and basic electric power generation requirements. In those circumstances, Bathurst CJ was correct to conclude that Nauru's activities in buying and selling petroleum were governmental activities and thus that the Fuel Accounts were for governmental functions as opposed to commercial purposes. It might have been different if there had been any evidence of availability of petroleum supplies from other sources. For example, if there had been evidence of willingness on the part of oil companies to supply fuel in Nauru and of them being kept out of the market by the state-owned monopoly, one might suppose that Nauru's fuel supply activities would properly be viewed as commercial activities and that funds for those activities would properly be characterised as funds for commercial purposes. But there was no suggestion of that kind, and still less any evidence. NettleJ The Utilities Account The Utilities Account was described in the s 41 certificate as follows: "[Account number] 034002 858276 β RON Utilities Authority The funds in this account are derived from revenue received from the [Nauru] Utilities Corporation, a government corporation [which is] used by [the Nauru] Government for the purpose of supplying electricity and water to the population of Nauru." When cross-examined, Mr Adeang said that "the Government", by which in this case he evidently meant the Nauru Utilities Corporation, supplied electricity and water and charged for it, but that it did not necessarily cover its costs. Mr Adeang was not asked about the form in which the Nauru Government used funds in the account for the purposes of supplying electricity and water but, in the absence of evidence to the contrary, it should be inferred that it did so either by making loans to or by subscribing further capital in the Nauru Utilities Corporation. Bathurst CJ stated that, for the same reasons as applied to the Fuel Accounts, he considered that the Utilities Account was not used for commercial purposes. With respect, that conclusion is correct. There is, however, a further reason in support of that conclusion. In contrast to the position which applied to fuel, where the Nauru Government was directly involved in the buying and selling of petrol, in the case of the Utilities Account the evidence was that the Nauru Government's only function was as shareholder or otherwise owner of the Nauru Utilities Corporation. It follows that, whether or not it could be said that the Nauru Utilities Corporation was carrying on business or trade, the position in relation to the Utilities Account was on all fours with the position in relation to the Airline Leasing Accounts. In short, so far as can be told from the evidence, the only purpose for which the funds in the Utilities Account were used was to fund the Nauru Utilities Corporation, either by way of loan or by injection of capital. The purpose of the loans was not to generate profits but to ensure that the people of Nauru were provided with utilities. And, given the nature of Nauru and its system of government, the infusing of a state-owned not-for-profit utilities corporation with funds sufficient to provide power and water to the Nauruan NettleJ people may properly be regarded as a governmental function as opposed to a commercial activity184. The Loan Account The Loan Account was described in the s 41 certificate as follows: "[Account number] 034002 124483 (CIE β Nauru GEF Small GRA) The funds in this account are derived from [Nauru] Government revenue and foreign state donors (predominantly Taiwan) and used by the [Nauru] Department of Commerce, Industry and Environment and used by the [Nauru] Government for the purpose of providing government loans to small business to assist in setting up businesses." Mr Adeang deposed in his evidence in chief that Nauru did not make a profit out of the small business loans and that they were not a commercial venture: "It ... provides small micro-loans ... for those aspiring businessmen in the provision of growing backyard ... food crops, barbecue stalls [and other] small micro-businesses. We receive funds from ... Taiwan in particular but other aid donors as they arise." Bathurst CJ concluded that, having regard to the particular circumstances of Nauru, the funds for the business loans did not have a commercial purpose. They were paid in pursuit of a governmental purpose of strengthening the economy. With respect, there is no reason to doubt that conclusion either. The payments appear to have been essentially in the nature of social or economic advancement payments or allowances, for the purposes of advancing the recipients in business in a manner which is perceived to be for the improvement of Nauru generally. To draw a parallel with the Australian context, they present as no different in principle from sums which the Commonwealth Government may set aside to pay as Newstart allowance or one or other business incentive allowances which are available to promote and advance particular Australian industries. 184 Bombardier Inc v AS Estonian Air (2014) 118 OR (3d) 702; Kuwait Airways Corp v Iraq [2010] 2 SCR 571. NettleJ The Residual Accounts There are four Residual Accounts, described in the s 41 certificate as follows: "[Account number] 034002 858364 (BusinessOne Account) This account is used as the primary operating account for [Nauru]. Funds from the accounts are transferred into this account as required and then those funds are used by [the Nauru] Government to pay for: the salaries of 1,200 public servants employed by [the Nauru] Government; and services, equipment and supplies provided by the departments of [the Nauru] Government. [Account number] 034001 189410 (Nauru Fisheries Saving) The funds in this account are derived from [Nauru] Government revenue and used by [the Nauru] Government to fund the operations of the Nauru Fisheries and Marine Resources Authority, a governmental department. [Account number] 034002 858268 β RON Fuel Account The funds in this account are derived from payments received from customers purchasing fuel from the [Nauru] Government. The funds in this account are used by [the Nauru] Government predominantly for the purpose of providing Government Services. [Account number] 034002 858073 β RON Treasury Account The funds in this account are derived from [Nauru] Government revenue and are used by the [Nauru] Government for the provision of Government Services and the payment of salaries of [Nauru] Government employees." Bathurst CJ concluded that the funds in the Nauru Fisheries Saving account were used to fund the operations of the Nauru Fisheries and Marine Resources Authority and that there was no evidence to suggest that the Authority, which was a Nauru government department, was engaged substantially in a NettleJ commercial venture; and that the same applied to the RON Fuel Account and the RON Treasury Account. His Honour further observed with respect to the BusinessOne Account that it appeared to be a clear example of funds being used by a sovereign state to perform its sovereign duty to its citizens, and that although a fee was paid for some government services, that did not lead to the loss of immunity. There is no reason to doubt that reasoning or those conclusions. On the evidence, each of those accounts presents as a clear example of funds which were held for governmental non-commercial purposes. The Term Deposit The Term Deposit (also known as "the Trust Account") was described in the s 41 certificate as follows: "[Account Number 034001 305071] Trust Account The funds in this account are derived from [Nauru] Government Revenue and are held by [the Nauru] Government treasury as cash reserves to provide future Government Services." Mr Adeang was not cross-examined on this account. Bathurst CJ noted that, in contrast to the other accounts, the moneys in the Term Deposit were not in use and, accordingly, that it was necessary for the court to be satisfied that the funds had been set aside for a non-commercial purpose within the meaning of s 32(3)(b) of the Immunities Act. But, as his Honour said, there was no reason not to accept the correctness of the statement in the s 41 certificate that the funds were held as cash reserves to provide future government services and in that sense had been set aside so that the Nauru Government could perform its functions as they arise. Thus, in the absence of any evidence that the Nauru Government carried on any commercial activities with the cash reserves in the Term Deposit, it was to be concluded that the government services for which the funds were set aside were not commercial. Counsel for Firebird attacked that part of his Honour's reasoning as in effect reversing the onus of proof. It was submitted that, because it appeared that the funds in the Term Deposit were not in use, it was incumbent on Nauru to adduce evidence sufficient to establish that the money was set aside otherwise than for commercial purposes within the meaning of s 32(3)(b); and that, by referring to the absence of evidence that the Nauru Government carried on any commercial activities with those moneys, Bathurst CJ had approached the provision as if it were incumbent on Firebird to prove that the moneys were set aside for commercial purposes. NettleJ That submission should be rejected. As has been seen, Bathurst CJ based his conclusion as to the nature of the funds in the Term Deposit on the evidence from the s 41 certificate that the funds were held ready for government purposes and in that sense were set aside for non-commercial purposes. Significantly, as was earlier noticed, Mr Adeang was not cross-examined on that evidence. In those circumstances, it was both logical and appropriate for Bathurst CJ to reason that, in the absence of any evidence that contradicted the certificate, it could be concluded that the funds were set aside in the way explained in the certificate. There was no reversal of the onus of proof in that approach. Nauru adduced evidence sufficient to establish that the funds were set aside in the relevant sense and, as Bathurst CJ said, in the absence of evidence to contradict the evidence adduced by Nauru, there was no reason not to accept Nauru's evidence185. Conclusion and order For these reasons, we agree with the orders proposed by French CJ and 185 Cross on Evidence, 9th Aust ed (2013) at 266 [7015]. |
HIGH COURT OF AUSTRALIA SELECTED SEEDS PTY LTD APPELLANT AND QBEMM PTY LIMITED AND ORS RESPONDENTS Selected Seeds Pty Ltd v QBEMM Pty Limited [2010] HCA 37 3 November 2010 ORDER Appeal allowed with costs. Set aside the order of the Court of Appeal of the Supreme Court of Queensland made on 22 September 2009 and, in lieu thereof, order that the appeal to that Court be dismissed with costs. On appeal from the Supreme Court of Queensland Representation B W Walker SC with R S Ashton and L S Reidy for the appellant (instructed by G A Thompson SC with K F Holyoak for the respondents (instructed by Barry & Nilsson) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Selected Seeds Pty Ltd v QBEMM Pty Limited Insurance β Product liability insurance β Insurance policy β Indemnity β Exclusion clause β Appellant seed merchant sold contaminated seed β Planting of seed by third party resulted in damage to property β Exclusion of liability caused by or arising from "the failure of any Product to correctly fulfil its intended use or function" β Proper construction of exclusion clause β Whether liability for damage arose out of failure of product to fulfil its intended use or function β Distinction between product failing to fulfil intended use or function and causing positive harm. Words and phrases β "intended use or function". FRENCH CJ, HAYNE, CRENNAN, KIEFEL AND BELL JJ. The appellant, Selected Seeds Pty Ltd, is a grain and seed merchant carrying on business in Queensland. In December 2002 it purchased seed from a merchant in the Northern Territory, which was represented to be Jarra grass seed. At that time, the seed was substantially Summer grass seed or substantially contaminated with Summer grass seed, but the contamination was not identified in a certificate of analysis issued by an independent laboratory. The appellant sold some of the seed to S and K Gargan and they supplied a portion of the seed to Michael Gargan. With each progressive harvest, the presence of Summer grass seed increased. By the time Michael Gargan sold some of the seed to Landmark Operations Limited ("Landmark"), a farming merchandise supplier, the seed was almost entirely Summer grass seed. Landmark sold a quantity of the seed to R and J Shrimp as Jarra grass seed in about December 2004. They grew only Summer grass. Jarra grass is extremely palatable to all types of stock as green feed, dry feed or hay and is grown for these purposes. It is a perennial grass. Summer grass is fit only as low-quality stock feed and not for the production of commercial grass seed. Although an annual grass, Summer grass may be durable in subsequent seasons. It is regarded as a weed when present in commercial hay and seed crops. The Shrimps brought proceedings claiming damages against Landmark in the Federal Court in April 2006. That part of the Shrimps' claim relevant to the appellant's policy of insurance, here in question, related to the damage to their land caused by planting the Summer grass seed. They claimed the costs of eradicating it from their land and the loss of use of the land during that period. Michael Gargan was joined to the proceedings by Landmark and he, in turn, joined the appellant to the proceedings. The appellant was subsequently given leave to defend the Shrimps' claim. The proceedings were settled in March 2008. The appellant contributed $150,000 to the settlement of the Shrimps' claim. It was not disputed that the settlement was reasonable, but the appellant's insurers, the respondents, refused to indemnify the appellant for that loss. The appellant had a Broadform Liability Policy ("the Policy") of insurance with the respondents, providing indemnity against public liability and product liability. The Policy schedule contained endorsements which formed part of the Policy. Endorsement 3 was an "Efficacy Clause", which had the effect of Hayne Crennan Bell excluding liability arising from particular defined events. It is that clause which is the focus of this appeal. The insuring clause (cl 2.1) relevantly provided that the respondents agreed to pay to the appellant: all sums which You become legally liable to pay by way of compensation; all costs awarded against You; in respect of β¦ Property Damage happening during the Period of Insurance and caused by an Occurrence within the Territorial Limits in connection with Your Business." An "Occurrence" was defined to include an event which results in property damage (cl 1.6) and the definition of "Property Damage" included "physical damage to or loss or destruction of tangible property including any resulting loss of use of that property" (cl 1.11). In the proceedings brought by the appellant in the Supreme Court of Queensland, the respondents argued that the appellant's supply of the seed was too remote from the damage suffered by the Shrimps and so did not come within the insuring clause. That issue was determined against the respondents, the primary judge (McMurdo J) holding that the occurrence which caused the property damage was the planting of the seed on the Shrimps' land1. This aspect of his Honour's judgment was upheld on appeal to the Court of Appeal2. The issue on this appeal concerns the operation of the Efficacy Clause endorsed upon the Policy. Excluding the heading, as the Policy requires, the Clause was in these terms: "The following additional EXCLUSION is added to this Policy:β 1 Selected Seeds Pty Ltd v QBEMM Pty Limited (2009) 15 ANZ Insurance Cases 2 Selected Seeds Pty Ltd v QBEMM Pty Limited (2009) 15 ANZ Insurance Cases Hayne Crennan Bell This Policy does not cover any liability arising directly or indirectly from or caused by, contributed to by or arising from:β the failure of any Product to germinate or grow or meet the level of growth or germination warranted or represented by the Insured; or the failure of any Product to correctly fulfil its intended use or function and/or meet the level of performance, quality, fitness or durability warranted or represented by the Insured." (emphasis added) The respondents have consistently contended that the second limb of the clause was engaged because the appellant's liability arose from the failure of the seed planted by the Shrimps to "fulfil its intended use or function"; namely, to produce Jarra grass and Jarra seed. Strictly speaking, seeds might not be thought to have a "use" or "function"; rather, they may germinate and grow. The failure of a product to germinate and grow is dealt with in the first limb of the Efficacy Clause. The parties, however, accepted that the second limb might apply and that seeds, as a product, have a use or function. The proceedings were conducted on this basis. McMurdo J accepted that the production of Jarra grass and seed could qualify as the intended use or function of the seeds which were planted. The "intended use or function" of the seed being to produce Jarra grass and seed, the product that was sold did not fulfil that use or function. But the product sold not only failed to produce Jarra grass and seed, it produced a weed crop: Summer grass. It was the effect worked on the land by the introduction of the weed which was the property damage of which complaint was made. The effect on the land was not a "failure of [the] Product to correctly fulfil its intended use or function". McMurdo J was not persuaded that the appellant's liability did in fact arise from the failure of the seeds to fulfil that intended use or function. His Honour reasoned that the appellant's legal liability was for property damage, being the damage to the Shrimps' land. That damage resulted from what was done to the land; namely, the planting of the Summer seed and the subsequent growth of the grass3. 3 Selected Seeds Pty Ltd v QBEMM Pty Limited (2009) 15 ANZ Insurance Cases Hayne Crennan Bell In concluding that the Efficacy Clause did not apply, his Honour drew the following distinction between what the clause excluded and how the appellant's liability arose: "The present plaintiff's liability for damages for the losses from what was done to the land arose not from what the product failed to do (grow Jarra grass) but what it did do to the claimants' property."4 A similar distinction, his Honour observed5, had been drawn in John Wyeth & Brothers Ltd v Cigna Insurance Company of Europe SA/NV6. Wyeth claimed indemnity from its insurers for the substantial legal costs it had incurred in unsuccessfully defending claims brought by third parties who had taken the drug "Benzodiazepine", which was manufactured and sold by it. The drug was prescribed for, and intended to alleviate, symptoms of anxiety and insomnia and was promoted by Wyeth as suitable for these purposes7. The loss and damage claimed in the litigation was of harm, in the form of physical injury and mental distress, including the effects of addiction and withdrawal8, as a result of ingesting the drug over time. There were two policies involved in the Wyeth litigation. Each policy had endorsed upon it an "Efficacy Exclusion Clause". One clause provided, in those parts relevant for present purposes: "This policy shall not apply to liability incurred by the Insured in respect of β¦ bodily injury resulting from the failure of the β¦ insured's products 4 Selected Seeds Pty Ltd v QBEMM Pty Limited (2009) 15 ANZ Insurance Cases ΒΆ61-799 at 77,424 at [28]. 5 Selected Seeds Pty Ltd v QBEMM Pty Limited (2009) 15 ANZ Insurance Cases [2001] Lloyd's Rep IR 420. John Wyeth & Brothers Ltd v Cigna Insurance Company of Europe SA/NV [2001] Lloyd's Rep IR 420 at 433. John Wyeth & Brothers Ltd v Cigna Insurance Company of Europe SA/NV [2001] Lloyd's Rep IR 420 at 433, 434. Hayne Crennan Bell β¦ to perform the function or serve the purpose intended by the β¦ insured, if such failure is due to a mistake or deficiency in any design, formula, plan, specification, advertising material or printed instructions prepared or developed by any insured; but this exclusion does not apply to bodily injury β¦ resulting from the active malfunctioning of such products"9. The other clause was in substantially the same terms, although it was expressed to exclude "bodily injury β¦ resulting from the failure of the named Insured's products"10 rather than "liability incurred by the Insured in respect of β¦ bodily injury". The clauses were treated by Langley J as substantially the same11 and were held to have no application to the claims12. Langley J construed the clauses to exclude from cover claims that the drug failed to make a claimant better, or to prevent some condition arising. That was their evident purpose13. But of the claims made in the litigation his Lordship said: "They are not claims for injury because the drugs failed to perform their function or serve their purpose. They are claims for injuries because the drugs caused dependency and injury which either did not pre-exist or did not do so to the same degree."14 John Wyeth & Brothers Ltd v Cigna Insurance Company of Europe SA/NV [2001] Lloyd's Rep IR 420 at 430. 10 John Wyeth & Brothers Ltd v Cigna Insurance Company of Europe SA/NV [2001] Lloyd's Rep IR 420 at 432. 11 John Wyeth & Brothers Ltd v Cigna Insurance Company of Europe SA/NV [2001] Lloyd's Rep IR 420 at 432. 12 John Wyeth & Brothers Ltd v Cigna Insurance Company of Europe SA/NV [2001] Lloyd's Rep IR 420 at 443. 13 John Wyeth & Brothers Ltd v Cigna Insurance Company of Europe SA/NV [2001] Lloyd's Rep IR 420 at 443. 14 John Wyeth & Brothers Ltd v Cigna Insurance Company of Europe SA/NV [2001] Lloyd's Rep IR 420 at 443. Hayne Crennan Bell The Court of Appeal held that construction to be "clearly right"15. The concern of the Efficacy Clause here under consideration is to exclude warranties and representations made by the insured about what their product might do or achieve. It has this much in common with the Efficacy Exclusion Clauses in Wyeth. The Efficacy Clause utilises the language of sale of goods, which is now also to be found in consumer protection legislation16. Some representations need not be express. This may be the case where a product has an obvious use or function. Thus in the present case, the parties were agreed that the appellant could be taken to have represented that the seed sold was Jarra grass seed. More relevantly, the second limb of the Efficacy Clause here in question, like the clauses in Wyeth, intends to exclude liability when a product fails to achieve its intended purpose. In Wyeth that purpose, or use or function, was to benefit persons by alleviating their pre-existing condition. In the present case, the purpose of the seed was simply to become Jarra hay and seed. These purposes may be contrasted with the liabilities which arose. In each case, liability arose because of damage inflicted by the product. As Langley J pointed out in Wyeth, it could not be doubted that the claimants were alleging that the drugs had caused them positive harm17. To illustrate the proper application of the second limb of the Efficacy Clause, McMurdo J gave the example of a claim for loss of profits18. A liability for such a loss may be effectively excluded by an Efficacy Clause. Such liability was not the subject of insurance cover in this case, because an "Occurrence" was not defined so as to include a loss of profits. However, had such liability been included, a liability for loss of profits, on anticipated sales of Jarra grass, hay or 15 John Wyeth & Brothers Ltd v Cigna Insurance Company of Europe SA/NV [2001] Lloyd's Rep IR 420 at 448 per Waller LJ, Dyson LJ and Sir Murray Stuart-Smith agreeing. 16 For example, Trade Practices Act 1974 (Cth), s 71(2). 17 John Wyeth & Brothers Ltd v Cigna Insurance Company of Europe SA/NV [2001] Lloyd's Rep IR 420 at 434. 18 Selected Seeds Pty Ltd v QBEMM Pty Limited (2009) 15 ANZ Insurance Cases Hayne Crennan Bell seed, might have been said to arise out of the failure of the seeds to produce Jarra grass. The causal relationship of which Fraser JA spoke would be present in such a situation19. This example shows how removed a liability for loss of profits may be from one where damage is inflicted upon property. The Court of Appeal of the Supreme Court of Queensland upheld the appeal brought from his Honour's decision in favour of the appellant, on what was said to be a broad, literal construction of an unambiguous clause20. In the judgment of Fraser JA, with whom Holmes JA and White J agreed, the distinction in Wyeth, between causing positive harm and failing to achieve an intended purpose, was regarded as irrelevant to a consideration of the operation of the Efficacy Clause21. This was because of certain perceived textual differences, between the Efficacy Exclusion Clauses in Wyeth and the Efficacy Clause, and because of a difference relating to the respective products22. The respondents had made a submission to the Court of Appeal to the effect that the proper focus of the exclusion in the Efficacy Clause was upon the content of the liability there referred to, not the nature of the damage caused. This submission appears to have been accepted. Fraser JA pointed to the exclusion of liability in the Wyeth clauses as being for liability in respect of "bodily injury", whereas the Efficacy Clause relevantly, and more broadly, excluded liability connected with the failure of the product to fulfil its intended use or function. This was the causal relationship arising from the terms of the Efficacy Clause, read literally, his Honour said23. 19 Selected Seeds Pty Ltd v QBEMM Pty Limited (2009) 15 ANZ Insurance Cases 20 Selected Seeds Pty Ltd v QBEMM Pty Limited (2009) 15 ANZ Insurance Cases 21 Selected Seeds Pty Ltd v QBEMM Pty Limited (2009) 15 ANZ Insurance Cases 22 Selected Seeds Pty Ltd v QBEMM Pty Limited (2009) 15 ANZ Insurance Cases 23 Selected Seeds Pty Ltd v QBEMM Pty Limited (2009) 15 ANZ Insurance Cases Hayne Crennan Bell Fraser JA considered that the opening words of the Efficacy Clause also connoted a broader causal relationship. His Honour contrasted the words which there follow the reference to "liability"; namely, "arising directly or indirectly from or β¦ contributed to by", with the phrase in the Wyeth clause, "resulting from"24. However, the different breadth of these two phrases would not appear to be a difference by which the decision in Wyeth can be distinguished. That decision did not depend upon any notion of proximate cause nor any degree of causal connection. More telling, with respect to his Honour's acceptance of a broad operation of the exclusion effected by the Efficacy Clause, was the comparison drawn by his Honour between that clause and the insuring clause. His Honour contrasted the causal relationship referred to in the Efficacy Clause with the "more narrowly expressed causal relationship in the insuring clause ('Property Damage β¦ caused by an Occurrence') and in the definition of Occurrence ('event which results in β¦ Property Damage')."25 This comparison highlights the difficulty in the approach taken by his Honour to the construction of the Efficacy Clause. In reaching a conclusion that the liability there intended to be excluded is wide, being liability having any connection with the failure of the product to fulfil its use, the Efficacy Clause has been read independently of the balance of the Policy and without regard to the terms of the insuring clause. As a result a wrong causal relationship is identified. According to general rules of construction, whilst regard must be had to the language used in an exclusion clause, such a clause must be read in light of the contract of insurance as a whole, "thereby giving due weight to the context in which the clause appears"26. This is consistent with the statement contained in the Schedule to the Policy, that an endorsement is to both attach to and form part of the Policy. 24 Selected Seeds Pty Ltd v QBEMM Pty Limited (2009) 15 ANZ Insurance Cases 25 Selected Seeds Pty Ltd v QBEMM Pty Limited (2009) 15 ANZ Insurance Cases 26 Darlington Futures Ltd v Delco Australia Pty Ltd (1986) 161 CLR 500 at 510; [1986] HCA 82. Hayne Crennan Bell When regard is had to the Policy as a whole, and the Efficacy Clause is read with the insuring clause, as it should be, it is evident that the liability to which the Efficacy Clause refers is that for which the appellant may become legally liable by way of compensation for property damage. It is not some broader notion of liability which has some connection with the failure of the product to fulfil its use or function. So understood, the perceived textual differences with Wyeth fall away. An argument put by the respondents to the Court of Appeal did attempt to address the relevant liability as the damage to the Shrimps' land, but it did so in a way which inverted the true question posed by the Efficacy Clause, as will shortly be explained. The proposition put by the respondents was: if the seeds had functioned as intended and fulfilled their intended use, there would have been no damage to the land. A similar argument was put in Wyeth. In rejecting it, Langley J said: "However it is presented, this submission in reality amounts to giving to the Efficacy Exclusion the effect of excluding from cover any injury on the basis that the drug has failed to serve its purpose if it should not have caused that injury"27. On the respondents' proposition, a purpose of the seeds appears to have become β that they would not injure. McMurdo J correctly observed that if the exclusion were to apply whenever the appellant's product had some impact upon a person or property, which it would not have had if it had fulfilled its intended use, then the extent of the exclusion would be far-reaching28. Such an effect was evident from the explanation provided by the respondents, in argument on this appeal, of the cover which would remain were that construction to be upheld. It is not necessary to resort to the result of the respondents' construction of the Efficacy Clause upon the extent of the cover which would remain in order to 27 John Wyeth & Brothers Ltd v Cigna Insurance Company of Europe SA/NV [2001] Lloyd's Rep IR 420 at 443. 28 Selected Seeds Pty Ltd v QBEMM Pty Limited (2009) 15 ANZ Insurance Cases Hayne Crennan Bell determine its true construction. Its proper operation and effect may be determined by construing its words according to their natural and ordinary meaning29, read in light of the Policy. The question posed by that part of the Efficacy Clause under consideration is whether the liability of the appellant for the damage to the Shrimps' land arose out of the failure of the seeds to fulfil their use or function. The answer must be "no". That liability was not caused by the failure of the seeds to produce Jarra grass. It arose by reason of the direct effect of the seeds upon the land. The seeds were so contaminated that Summer grass only was produced. The Efficacy Clause does not apply. It remains to mention two further matters. The factual difference with Wyeth, identified by Fraser JA, had to do with the nature of the drug. Since the personal injury claimed involved dependency and associated effects, his Honour considered that allegations must necessarily have been made of the existence of some inherent vice in the drug. Such a circumstance was far removed from injuries resulting from a failure of the drug to fulfil its intended purpose, of curing or preventing illness30. It may be observed that in this respect the proper operation of the Efficacy Exclusion Clause has been identified. His Honour distinguished the present case from Wyeth on the basis that there was nothing inherently harmful in the seeds supplied31. The appellant took issue with this observation, given the extent of the contamination. It is not necessary to resolve that issue, for nothing turns upon it. The reasoning in Wyeth did not depend upon what caused the drug to produce the effects complained of. The point is that the injuries complained of, and Wyeth's liability for them, could not be said to have arisen by reason of the failure of the drug to perform its function or serve the purposes intended. 29 Darlington Futures Ltd v Delco Australia Pty Ltd (1986) 161 CLR 500 at 510. 30 Selected Seeds Pty Ltd v QBEMM Pty Limited (2009) 15 ANZ Insurance Cases 31 Selected Seeds Pty Ltd v QBEMM Pty Limited (2009) 15 ANZ Insurance Cases Hayne Crennan Bell Reference has earlier been made to the representation, which it was agreed had been made by the appellant, that the seed was Jarra grass. It may be taken to incorporate the further representation that Jarra grass and seed would be grown. The respondents sought to characterise the representation as one as to the quality, fitness or performance of the seeds, and so bring it within the latter part of the second limb of the Efficacy Clause. Such a contention had been raised in the Court of Appeal, but the Court, understandably, did not take it up in its reasons. The representation says nothing about specific attributes of the seed, which is what representations as to quality may be taken to convey. It says nothing of the fitness or performance of the seed. Moreover, the Efficacy Clause makes it plain that what it is concerned to exclude are representations which concern "the level" of the product's quality, fitness or performance. No such representation was made. Conclusion and orders McMurdo J was correct to hold that the appellant's liability was for damage to the Shrimps' land by the introduction of the weed, Summer grass. The Policy responds to such a claim. It was not damage caused by the seed sown failing to fulfil its intended use or function. The liability to the Shrimps was for what the seed did; not what it failed to achieve. That is the literal construction to be given to the Efficacy Clause. The appeal should be allowed with costs and the orders of the Court of Appeal should be set aside and in lieu thereof it be ordered that the appeal to that Court be dismissed with costs. |
HIGH COURT OF AUSTRALIA HTW VALUERS (CENTRAL QLD) PTY LTD APPELLANT AND ASTONLAND PTY LTD RESPONDENT HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd [2004] HCA 54 12 November 2004 ORDER Appeal dismissed. Application for special leave to cross-appeal dismissed. Appellant to pay the costs of the respondent. On appeal from the Supreme Court of Queensland Representation: P A Keane QC with L F Kelly for the appellant (instructed by Thynne & J C Bell QC with G D O'Sullivan and D H Katter for the respondent (instructed by Russell Hanley & Johnson) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd Damages β Contract β Tort β Trade practices β Breach of contract and negligent provision of advice β Misleading and deceptive conduct β Respondent relied on valuation advice from appellant in purchasing commercial premises β Risk of decline in market value of premises from competing business not taken into account in advice β Whether damages assessed at date of contract to purchase premises or only once risk eventuated β Whether damages based on "true value" or "market value" of premises at date of contract β Whether assessment of "true value" at date of contract includes subsequent events β Purpose of damages under Trade Practices Act 1974 (Cth), s 82. Words and phrases: "true value", "real value", "market value", "contingent loss", "actual loss". Trade Practices Act 1974 (Cth), ss 51A, 52(1), 82. GLEESON CJ, McHUGH, GUMMOW, KIRBY AND HEYDON JJ. On 8 October 2001, Dutney J, sitting in the Supreme Court of Queensland, gave judgment for the plaintiff in the sum of $406,194.601. An appeal to the Court of Appeal (McMurdo P, McPherson JA and Mullins J) challenged one component in that figure, but the appeal was dismissed on 20 August 20022. This appeal, by special leave, from the orders of the Court of Appeal challenges the same component. The appeal should be dismissed, since the conclusions given effect in the orders of the courts below were sound, though for somewhat different reasons from those that were relied on. Background The key events. Astonland Pty Ltd ("the plaintiff") is a company of which Mrs Lyn Foster was the sole director and of which she and her husband, John Foster, were the sole shareholders. She was a chartered accountant working part- time as an employed tax agent. Her husband was an engineer who conducted a building business through a company called John Foster Projects Pty Ltd. At one time they lived in Brisbane. They then moved to Mackay and rented their Brisbane house to tenants. In early 1997, they decided to sell their Brisbane house. They were dissatisfied with its low return and low capital appreciation and wanted to invest in commercial property with a higher rate of return. They began looking for commercial property near Mackay. The plaintiff company was incorporated on 15 April 1997 as the vehicle through which the investment was to be effected. The Fosters wished to invest about $500,000 using in part the proceeds of the Brisbane house and in part borrowed money. They became attracted to a small shopping arcade comprising eight shops in Central Street, Sarina ("the Plaza"). Sarina was a small satellite town with a population of 3,500-5,000, located about 37 kilometres south of Mackay. The Fosters decided to seek advice from Mr Deacon, a director of HTW Valuers (Central Qld) Pty Ltd ("the defendant"). On 17 April 1997, Mr Foster met Mr Deacon and, as a result, on 21 April 1997, Mr Deacon sent a letter to John Foster Projects Pty Ltd, of which Mr Foster was the sole director. The trial judge did not make any finding about 1 Astonland Pty Ltd v HTW Valuers (Central Qld) Pty Ltd [2001] QSC 380. 2 Astonland Pty Ltd v HTW Valuers (Central Qld) Pty Ltd [2002] QCA 302. McHugh Kirby what Mr Deacon's instructions were beyond setting out the letter of 21 April 1997 and beyond preferring the evidence of Mr Deacon about the 17 April 1997 meeting. Mr Deacon's evidence was that Mr Foster provided him with a schedule of tenancies with rents and rates per square metre written down the side, said he was unfamiliar with rents in Sarina, and asked whether Mr Deacon could provide him with rental levels for retail shops in Sarina. Mr Foster then indicated that he needed the information because he wanted to know whether the rentals for the Plaza were right and how they fitted into the Sarina market generally. Mr Foster also asked whether Mr Deacon could advise as to the demand in Sarina for retail tenancies and the availability of tenants. The trial judge set out the material parts of the letter of 21 April 1997 as follows3: "We refer to our meeting of 17 April 1997 wherein you requested advice relating to: Retail rental levels in Sarina Industrial investment premises at Paget Our investigations indicate very limited rental evidence for commercial premises in Sarina. We believe this to be a result of: A relatively high proportion of owner occupation Historically business in Sarina has been fairly stable and little expansion of the retail precinct has happened Where new tenancies have been established, they have been primarily the result of a developer providing space for specific tenants [sic] requirements Within the town at present there are only limited vacancies. Ten (10) specialty shops to be constructed in conjunction with a 1500 square metre new supermarket on Beach Road have attracted reasonably strong interest. Two lease commitments at rents of $220 per square metre have been signed and names have been put on the other shops. Only one of these 3 Astonland Pty Ltd v HTW Valuers (Central Qld) Pty Ltd [2001] QSC 380 at [25]. McHugh Kirby prospective tenants are [sic] currently in business in rental premises in Sarina. The eight (8) supermarket lease before being prepared to commit to the centre. tenants are awaiting finalisation of interested the Other rental evidence includes: Cnr Anzac Street & [Broad] Street This is a one year old, colonial style retail complex with a highway frontage divided into five (5) shops, which are occupied as two tenancies. Sarina Realty occupies 100.3 square metres at a rent of $18,200 per annum ($181/square metre) and the Leisure Time Centre occupies 224 square metres at a rent of $41,600 ($186/square metre). Both tenants pay some outgoings in addition to the rent. Sarina Plaza (Subject) Shops 7 and 8 are new rentals established during 1996 which reflect $117 and $143 gross respectively. β’ We are aware of one vacant shop in [Broad] Street (Police Station side) with an area of approximately 60 square metres, which has a rent of $130 per week ($112/square metre). While the available information is only limited we believe it suggests that the current rental levels are maintainable, and some are at the lower end of the market range. However it may be difficult to increase rental levels to any significant degree without some titivation of the building." For that advice the defendant was paid $250, since Mr Deacon worked for two and a half hours at $100 per hour. On 28 April 1997, the plaintiff entered a contract to buy the Plaza for $485,000. The trial judge found that without Mr Deacon's written advice, Mrs Foster would not have caused the plaintiff to enter that contract4. The plaintiff completed the purchase on 1 July 1997. 4 Astonland Pty Ltd v HTW Valuers (Central Qld) Pty Ltd [2001] QSC 380 at [46]. McHugh Kirby Central to this case are the shops at Beach Road to which the letter referred ("the Beach Road Shopping Centre"). As the letter indicated, the Beach Road Shopping Centre was to comprise a supermarket and ten specialty shops. It was about 400 metres from the Plaza. While the Plaza was part of a "strip commercial district" in the centre of Sarina, the Beach Road Shopping Centre was a detached drive-in neighbourhood shopping centre on the northern edge of the town. It was completed in early 1998 and it opened in mid 1998. The trial judge found that gross rentals for the Plaza "held up reasonably well to about March 1999 and then collapsed"5. The evidence was that in April 1997, the Plaza was fully tenanted, and generated nearly $60,000 per annum in rent. By March 2000, one shop had been vacant for a year, one had been vacant for 9 months, two other shops were vacant, the rent on another shop was substantially in arrears, the rents from two of the shops which were tenanted had fallen sharply, and net rental had fallen to $15,059 per annum. The trial judge found that this collapse in rentals was due in large measure to the opening of the Beach Road Shopping Centre. The trial judge excluded other possible causes, such as poor management of the Plaza, a decline in sugar prices, and a drop in new housing approvals. The trial judge's finding of liability. The trial judge accepted that Mr Deacon's personal view was that the Beach Road Shopping Centre was not likely to affect the Plaza rentals adversely. However, he found that the defendant was in breach of duty to the plaintiff because Mr Deacon "ought β¦ to have qualified his advice by cautioning the reader that the effect [of the Beach Road Shopping Centre] was uncertain."6 The duties so breached were those created by the contract under which the defendant was paid $250, by the law of tort in relation to negligent advice, and by s 52(1) of the Trade Practices Act 1974 (Cth) ("the Act") in relation to misleading and deceptive conduct7. 5 Astonland Pty Ltd v HTW Valuers (Central Qld) Pty Ltd [2001] QSC 380 at [49]. 6 Astonland Pty Ltd v HTW Valuers (Central Qld) Pty Ltd [2001] QSC 380 at [42]. 7 Section 52(1) provided: "A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive." Section 51A provided in part: (Footnote continues on next page) McHugh Kirby The trial judge's findings on damages. There was evidence before the trial judge from Mr Dodds, a valuer retained by the plaintiff, in a valuation dated 28 March 2000, that on 21 April 1997, just before the date of contract, the value of the Plaza was $400,000, that in July 1997, at completion, it was $375,000, and that on 28 March 2000, it was $130,000. Those figures were not significantly challenged in cross-examination, though small adjustments were made. The trial judge found that the relevant measure of damage was the difference between the price paid ($485,000) and the value of the Plaza at the end of 1998 or early 1999, after the Beach Road Shopping Centre had been operating for the better part of one year, which he found to be the same as at 28 March 2000 ($130,000)8. The trial judge gave judgment for the plaintiff in the sum of $406,194.60, made up as follows9: "(1) For the purposes of this Division, where a corporation makes a representation with respect to any future matter (including the doing of, or the refusing to do, any act) and the corporation does not have reasonable grounds for making the representation, the representation shall be taken to be misleading. (2) For the purposes of the application of subsection (1) in relation to a proceeding concerning a representation made by a corporation with respect to any future matter, the corporation shall, unless it adduces evidence to the contrary, be deemed not to have had reasonable grounds for making the representation." The defendant was sued under s 82(1), which provided: "(1) A person who suffers loss or damage by conduct of another person that was done in contravention of a provision of Part β¦ V ... may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention." 8 Astonland Pty Ltd v HTW Valuers (Central Qld) Pty Ltd [2001] QSC 380 at 9 Astonland Pty Ltd v HTW Valuers (Central Qld) Pty Ltd [2001] QSC 380 at McHugh Kirby Difference between price and value in early 1999 Trading losses Additional purchase costs Refurbishment costs Interest on the last three items at 5% from 1 July 1999 Total The defendant's appeal. The defendant appealed to the Queensland Court of Appeal. It challenged only the $355,000 component of the damages award. It contended that in lieu of that figure there should have been substituted the difference between the price of $485,000 and Mr Dodds' valuation as at 21 April 1997 of $400,000 (ie $85,000), or Mr Dodds' valuation as at July 1997 of $375,000 (ie $110,000). The appeal was dismissed, and the defendant advances the same contention in its appeal to this Court. Matters not in controversy Proceedings of the present character are capable of giving rise to several questions to which the parties gave no attention, which the courts below therefore did not have to consider, and which this Court is not required to consider either. It is, however, desirable to note them. The first relates to whether it is possible to sue for damages under s 82 of the Act for a breach of s 52 allegedly found in the failure to perform a contract. There is authority that a breach of warranty of present fact (for example, a warranty that a party is the owner of copyright, has not licensed it, is entitled to assign it, and is not subject to any claim or potential claim for copyright infringement)10 constitutes a breach of s 52. Before the enactment of s 51A in 1986, there was also authority that a breach of promise relating to the future could not be a breach of s 52 unless a misrepresentation of existing fact was made, for example, that the promisor had the capacity or intention to perform the 10 Accounting Systems 2000 (Developments) Pty Ltd v CCH Australia Ltd (1993) 42 FCR 470 at 505-506 per Lockhart and Gummow JJ. McHugh Kirby promise11. Since the enactment of s 51A, there has been authority that a breach of promise may contravene s 52 in its operation with s 51A if there is an implied representation by the promisor of an intention or capacity to perform the promise, and there are no reasonable grounds for making that representation12. However, in some future cases of the present type, where the breach of contract is found in the failure by a professional adviser who has made a representation about future matters (for example, rental levels) to qualify it by a statement about their uncertainty, it may be necessary to give close attention to the question how the breach of contract falls, if at all, within the language of sub-ss 51A(1) and (2). Two other matters to which no attention was directed were whether the criteria of liability in all three causes of action were identical and whether the damages in relation to each would have been identical13. The parties assumed that they were. These assumptions may not always be sound. Analysis of the tests for remoteness of damage in contract, in tort and under s 82 may make a difference on the particular facts of some cases. In this Court, the plaintiff contended that if there were a difference in the measure of damages, it was entitled to the highest measure of damages available on any cause of action, and that it could not do better in contract or tort than it could under s 82 of the Act. The defendant was content to fight the plaintiff on that ground. If damages were to be assessed as at 28 April 1997 or as at 1 July 1997, there was a dispute between the parties as to which of the two dates was to be preferred. The defendant advocated the former, and it is the more orthodox. On that date the plaintiff became obliged to pay the purchase price on completion, the plaintiff was unable to escape that obligation, and the vendor was bound to transfer. But the difference does not matter for the outcome of this appeal. The trial judge's findings on contravention and on reliance, not having been challenged in the Court of Appeal, received no endorsement from it. The same position holds in relation to this Court. Those findings are to be fully 11 Bill Acceptance Corp Ltd v GWA Ltd (1983) 78 FLR 171 at 176-179 per 12 Futuretronics International Pty Ltd v Gadzhis [1992] 2 VR 217 at 238-239 and 13 Astonland Pty Ltd v HTW Valuers (Central Qld) Pty Ltd [2001] QSC 380 at [32] and [47]. McHugh Kirby accepted for the purposes of determining this appeal, though it is conceivable that in other cases persons in the position of the plaintiff might be less successful. The plaintiff's case at trial in relation to the contested damages component The plaintiff's first approach: purchase price minus real value. The Further Amended Statement of Claim alleged that one element in the plaintiff's loss was the "difference between the purchase price and the market price" of the Plaza, namely $355,000. In its written submissions at the end of the trial, the plaintiff took a different approach. It contended that the measure of damages was the difference, not between the purchase price and the market price, but between the purchase price and the real value of the Plaza as at the date of acquisition. It argued that the relevant date was the date of completion (which was 1 July 1997). According to the plaintiff, Mr Dodds' valuation of the Plaza as at July 1997 at $375,000 had two relevant flaws, considered as an assessment of loss. First, it related not to "real value", but "fair market value", ie the price which would be struck between a "willing buyer" and a "willing seller" β the test stated in Spencer v The Commonwealth14 in relation to compensation for the resumption of land. Secondly, Mr Dodds' figure complied with Isaacs J's mandate in that case that the only events to be taken into account were those occurring up to the date on which the land was to be valued: "All circumstances subsequently arising are to be ignored."15 The plaintiff submitted that while the approach set out in Spencer's Case is correct for assessing market value, it is not sound for assessing "real value". In assessing real value, it was submitted that subsequent events may be looked at in so far as they illuminate the value of the things at the relevant date. Mr Dodds considered that a valuation as at April 1997 "should have foreseen or suspected the subsequent fall in values" of commercial property because of the development of the Beach Road Shopping Centre, but the plaintiff argued that in assessing damages, it was necessary to treat the fall in values as more than a risk, and it was necessary to take into account the actual events as known at the time when the court assessed damages. The plaintiff then argued that in the light of actual events, the value in July 1997 was $193,584. The reasons for the selection of that precise figure need not now be explored. 14 (1907) 5 CLR 418 at 431-432 per Griffith CJ, 436-437 per Barton J, 441-442 per 15 Spencer v The Commonwealth (1907) 5 CLR 418 at 440. McHugh Kirby The plaintiff's second approach: purchase price minus benefits gained. Alternatively, the plaintiff contended that the loss should be calculated by deducting the benefits gained from the transaction against the price paid for them. The price of $485,000 paid in July 1997 had generated by 2000 benefits of only $130,000, that being the value of the Plaza at 28 March 2000 as assessed by Mr Dodds. The defendant's case at trial In contrast, the defendant submitted that the correct approach was to calculate the difference between the price paid and market value as at the date of purchase. If 28 April 1997 was the relevant date, $85,000 was the correct figure according to Mr Dodds' valuation. If 1 July 1997 was the relevant date, $110,000 was the correct figure (leaving aside certain adjustments made by Mr Dodds in his oral evidence). The trial judge's approach The trial judge did not adopt either of the approaches advocated by the plaintiff. Nor did he accept the approach advocated by the defendant. He proceeded in an entirely different manner. He said16: "In a valuation case where property would not have been acquired without the intervention of the negligence the conventional measure of damages is to compare the amount paid for the property with its true value at the time. Consequential losses need to be considered separately. This case is different from such a case. In the first place it is not in fact a true valuation case since Mr Deacon did not relevantly value the property. Rather he gave a predictive opinion from which Mrs Foster formed her own opinion as to value. The negligence or breach of contract or misleading conduct was in failing to flag the possible negative impact of the Beach Road shopping centre. In such a case no loss is suffered until it is reasonably ascertainable that the purchaser is in fact worse off as a consequence of the negligence or other breach." The trial judge then stated in a footnote: 16 Astonland Pty Ltd v HTW Valuers (Central Qld) Pty Ltd [2001] QSC 380 at [48]. McHugh Kirby "This is apparent from Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 at 527 and was restated by each member of the court in Kenny & Good Pty Ltd v MGICA (1992) Ltd (1999) 199 CLR 413 by way of distinguishing the standard measure of damages in valuation cases from those where the purpose of the valuation was to achieve a particular result. While factually Kenny & Good differs from the present case the principle is the same." The passage in Wardley Australia Ltd v Western Australia to which the trial judge was referring is from the joint judgment of Mason CJ, Dawson, Gaudron and McHugh JJ in which their Honours said: "The kind of economic loss which is sustained and the time when it is first sustained depend upon the nature of the interest infringed and, perhaps, the nature of the interference to which it is subjected. With economic loss, as with other forms of damage, there has to be some actual damage. Prospective loss is not enough. When a plaintiff is induced by a misrepresentation to enter into an agreement which is, or proves to be, to his or her disadvantage, the plaintiff sustains a detriment in a general sense on entry into the agreement. That is because the agreement subjects the plaintiff to obligations and liabilities which exceed the value or worth of the rights and benefits which it confers upon the plaintiff. But, as will appear shortly, detriment in this general sense has not universally been equated with the legal concept of 'loss or damage'. And that is just as well. In many instances the disadvantageous character or effect of the agreement cannot be ascertained until some future date when its impact upon events as they unfold becomes known or apparent and, by then, the relevant limitation period may have expired." (footnotes omitted) In Kenny & Good Pty Ltd v MGICA (1992) Ltd, Gaudron J quoted the second sentence in that quotation17 and Gummow J quoted the first sentence and referred to the balance18. 17 (1999) 199 CLR 413 at 424 [14]. 18 (1999) 199 CLR 413 at 447 [85]-[86]. See also the judgment of the Court in Murphy v Overton Investments Pty Ltd (2004) 78 ALJR 324 at 333 [55]; 204 ALR McHugh Kirby The trial judge then selected the end of 1998 or early 1999 as the time to assess loss in the light of the value of the Plaza "once the anticipated market factors" (ie the opening of the Beach Road Shopping Centre in mid 1998) had operated19. He said he was entitled to have regard to what in fact happened to the value of the Plaza up until the time when a reasonable person in the plaintiff's position would have sold it. He noted that gross rentals collapsed from March 1999 and he described the plaintiff's unsuccessful attempts to sell the Plaza. He concluded20: "[T]he plaintiff has attempted to sell the property without success despite genuine efforts since 1999. I find that even at that time the value Mr Dodds puts on it in 2000 of $130,000 was probably close to its realistic value." For those reasons he arrived at $355,000 as the figure for the component of damages under challenge. The Court of Appeal's reasoning The Court of Appeal's reasoning largely corresponded with that of the trial judge. The Court did not apply the test for valuation cases β the difference between price paid and actual value β on the ground that Mr Deacon was not liable for negligent valuation, but for a negligent failure to qualify his opinion21. The difference between price and value at the date of acquisition was said to be a "prima facie measure of damages only"22. Mr Dodds' valuations of $400,000 as at 21 April 1997 and $375,000 as at July 1997 "had taken into account the risk of the Beach Road shops being completed in arriving at each of those values."23 The Court of Appeal continued24: 19 Astonland Pty Ltd v HTW Valuers (Central Qld) Pty Ltd [2001] QSC 380 at [48]. 20 Astonland Pty Ltd v HTW Valuers (Central Qld) Pty Ltd [2001] QSC 380 at [49]. 21 Astonland Pty Ltd v HTW Valuers (Central Qld) Pty Ltd [2002] QCA 302 at [18]. 22 Astonland Pty Ltd v HTW Valuers (Central Qld) Pty Ltd [2002] QCA 302 at [19]. 23 Astonland Pty Ltd v HTW Valuers (Central Qld) Pty Ltd [2002] QCA 302 at [20]. 24 Astonland Pty Ltd v HTW Valuers (Central Qld) Pty Ltd [2002] QCA 302 at McHugh Kirby "The task undertaken by Mr Dodds in his valuation is not equivalent to the task undertaken by the court in assessing damages. According to his evidence, what Mr Dodds did in arriving at those respective values for April and July 1997 was factor into account the impact on the market at the relevant time for the risk that the Beach Road shops would be completed. This was consistent with the learned trial judge's finding that is not challenged on the appeal that it could not be reasonably ascertained what effect the Beach Road shops would have until they were constructed and opened. β¦ It was not until the Beach Road shops had been completed and opened that the risk to which the [plaintiff] should have been alerted was realised. That risk became an actuality. That actuality had a dramatic effect on the net rentals generated from the property and thus reduced the value of the property, in contrast to the effect on value of merely taking into account the risk of the nature that was contemplated by Mr Dodds when undertaking the valuations as at April and July 1997. The usual measure of damages, contended for the [defendant], calculated at the date of contract or, alternatively at the date of completion, could not result in full compensation for the [plaintiff's] capital loss, as that compensation could only be calculated when the risk that the Beach Road shops would be completed and have an adverse impact on the value of the property was realised, as a result of the occurrence of those events. The [defendant] argued that the measure of damages adopted by the learned trial judge was equivalent to holding the [defendant] liable for damages for breach of warranty of the maintainability of the rents of the property. It was common ground that there was no such warranty given by Mr Deacon. It does not follow from the fact that the measure of damages adopted by the learned trial judge may have resulted in the same calculation of damages, if the offending conduct had amounted to breach of such a warranty, that there is an error in the measure adopted by the learned trial judge. The issue is whether the capital loss assessed by the learned trial judge was that which was required to put the [plaintiff] in the position it would have been in, had it not purchased the property." The Court of Appeal agreed with the trial judge's selection of early 1999 as the critical date for valuation of the property, and with his conclusion that $130,000 was the true value at that date. McHugh Kirby The defendant's criticisms of the courts below The defendant made many criticisms of the courts below. At this point only two of them need be noted. The first criticism is that it was erroneous to say that the plaintiff had suffered no loss at the outset, and erroneous to say that it only suffered a loss when it was reasonably ascertainable what effect the Beach Road Shopping Centre would have. In truth, the plaintiff had suffered a loss when it contracted to buy the Plaza, being the difference between the price agreed to be paid ($485,000) and the value ($400,000) β $85,000. Secondly, the defendant submitted that loss suffered by the retention of an asset (ie from July 1997 on, as the value of the Plaza steadily fell) was not capable of being compensated for as an aspect of loss suffered as a result of its acquisition. The retention loss was not caused by the acquisition; to impose liability for retention loss would unduly broaden the liability of professional advisers in a way disproportionate to the risks which they assumed vis-Γ -vis persons in the position of the present plaintiff. Defects in the reasoning of the Supreme Court In this Court, the plaintiff attempted to support the reasoning of the courts below; against the possibility of that endeavour failing, it fell back successively on the two arguments it had put to the trial judge. The plaintiff's endeavour to support the reasoning of the courts below must fail, because the first criticism of that reasoning made by the defendant is unquestionably correct and sufficient to undermine it entirely. If the plaintiff had learned the day after entering the contract to buy the Plaza, or the day after completing that contract, that the defendant's conduct had been misleading in the sense ultimately found by the trial judge, it could have started proceedings then and there. There was unchallenged evidence from Mr Dodds that on either of those dates the plaintiff was in fact worse off as a result of the defendant's breach, since the market value was less than the price. It was not necessary to wait for nearly two years to ascertain that some loss had been suffered. The plaintiff could have found out at once that it had bought something which was worth less than that which it had agreed to pay and did pay. It could have McHugh Kirby recovered at least the difference between the price paid for, and the market value of, the Plaza. The limitation period would have begun to run25. It is incorrect to treat this case as being like Wardley Australia Ltd v Western Australia, on which the trial judge relied. That case held that a risk of loss is not itself a category of loss, and that if a plaintiff enters a contract exposing it only to a contingent loss or liability, the plaintiff "sustains no actual damage until the contingency is fulfilled and the loss becomes actual"26. The plaintiff was not exposed to a contingent loss; it had suffered an actual loss. Nor is the present case one like Murphy v Overton Investments Pty Ltd27. There the applicants had been induced to enter into a lease and incur an obligation to pay charges for outgoings. Whether the charges would rise above the level stated before the applicants entered the lease was contingent in the sense that it was not inevitable: the contingency could never eventuate unless the respondent exercised its discretion to increase the charges. There was thus a contingency hidden by the respondent's conduct which might or might not come to pass28. But in this case the risk of the catastrophic effect on rent levels of the Plaza after March 1999, to which the defendant had not alerted the plaintiff, had already had an impact on the value of the Plaza by April 1997. That, on the evidence, was not the case in Murphy v Overton Investments Pty Ltd29. The impact of the Beach Road Shopping Centre, unlike the contingency in Murphy v Overton Investments Pty Ltd, was not hidden and did not rest on any discretionary decision by anyone. Nor is the present case β the purchase of an asset at an over-value β similar to Henville v Walker where "land was purchased for a specific purpose 25 At either of the relevant times, that is, the time when the contract was entered into or the time when it was completed, s 82(2) of the Act provided for a limitation period of 3 years "after the date on which the cause of action accrued." 26 (1992) 175 CLR 514 at 532 per Mason CJ, Dawson, Gaudron and McHugh JJ. 27 (2004) 78 ALJR 324; 204 ALR 26. 28 (2004) 78 ALJR 324 at 333 [55] and 336 [70]; 204 ALR 26 at 39 and 43. 29 (2004) 78 ALJR 324 at 329 [26]; 204 ALR 26 at 32-33. McHugh Kirby and β¦ the development project involved not only the acquisition of the land but also the building and marketing of units"30. On the other hand, the difficulties with damages assessment in the present case cause it to bear some resemblance to cases where a wrong results in the immediate loss of a chance or commercial opportunity which had some value, although the process of measuring the worth of that chance or opportunity depends on estimating the significance of events which are, or may be, yet to come31. There is no doubt, then, that from the moment it contracted to buy the Plaza, the plaintiff suffered a loss, and to that extent the defendant's criticisms of the reasoning below are correct. The central question on this appeal is whether that loss is the only loss (apart from the other four items of loss found by the trial judge, which the defendant did not challenge) that the plaintiff can recover. In substance, the defendant argued that if a plaintiff acquires an asset on the strength of advice from a professional about a contingency, the measure of damages if the professional contravenes s 52 (or does not fulfil duties in tort and contract) is not the loss which the plaintiff suffers when the contingency happens, but the value which the market would place on the risk associated with the contingency. Hence, the defendant argued that while the plaintiff could recover $85,000 if 28 April 1997 were the relevant date, or $110,000 if July 1997 were the relevant date, it could not recover anything for greater losses in value thereafter. The plaintiff's preferred approach: price minus value at acquisition date assessed in the light of subsequent events The applicable principles. The plaintiff's defence of the reasoning in the courts below having failed, it is necessary to turn to the primary argument put by the plaintiff to the trial judge. That argument was that the correct measure of damages, apart from consequential losses, was to deduct the value of the Plaza at the date of acquisition from the purchase price, and in assessing that value to bear in mind post-acquisition events. 30 Henville v Walker (2001) 206 CLR 459 at 471 [22] per Gleeson CJ. 31 Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 at 348 and 355 per Mason CJ, Dawson, Toohey and Gaudron JJ, 364 per Brennan J; Naxakis v Western General Hospital (1999) 197 CLR 269 at 278 [29] per Gaudron J. McHugh Kirby The approach of subtracting value from price is commonly employed where the acquisition of land, chattels, businesses or shares is induced by deceit. It has also been commonly employed under s 82 of the Act32. It is sometimes described as the rule in Potts v Miller33. Even in the areas in which that approach is often applied, and even apart from cases in which consequential losses have been recovered, the "rule" is not universal or inflexible or rigid. This perception is not novel34. It has existed at least since the judgment of Dixon J in Potts v Miller and has been quite plain since that of Gibbs CJ in Gould v Vaggelas35. Even Jordan CJ, who called the rule "well settled", acknowledged that it was only a "rule of practice"36. The flexibility of the rule can be seen by reference to a number of its characteristics. One key qualification of the rule which prevents it from being inflexible is that the test depends not on the difference between price and "market value", but price and "real value"37 or "fair value"38 or "fair or real value"39 or "intrinsic" 32 Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1 at 6-7 per Gibbs CJ, 12 per Mason, Wilson and Dawson JJ; Kizbeau Pty Ltd v W G & B Pty Ltd (1995) 184 CLR 281 at 291 per Brennan, Deane, Dawson, Gaudron and 33 (1940) 64 CLR 282. 34 cf Smith New Court Securities Ltd v Scrimgeour Vickers (Asset Management) Ltd 35 (1985) 157 CLR 215 at 220-221. 36 McAllister v Richmond Brewing Co (NSW) Pty Ltd (1942) 42 SR (NSW) 187 at 37 Twycross v Grant (1877) 2 CPD 469 at 545 per Cockburn CJ; Cackett v Keswick [1902] 2 Ch 456 at 468 per Farwell J; Potts v Miller (1940) 64 CLR 282 at 289 per Starke J; Toteff v Antonas (1952) 87 CLR 647 at 650 per Dixon J; Kizbeau Pty Ltd v W G & B Pty Ltd (1995) 184 CLR 281 at 291 per Brennan, Deane, Dawson, 38 Broome v Speak [1903] 1 Ch 586 at 605 per Buckley J; Ted Brown Quarries Pty Ltd v General Quarries (Gilston) Pty Ltd (1977) 16 ALR 23 at 31 per Gibbs J. 39 Potts v Miller (1940) 64 CLR 282 at 299 per Dixon J. McHugh Kirby value40 or "true value"41 or "actual value"42 or what the asset was "truly worth"43 or "really worth"44 or "what would have been a fair price to be paid β¦ in the circumstances β¦ at the time of the purchase"45. This distinction is sometimes difficult to draw, but it is old46 and fundamental. A second qualification flows from the first. The distinction between a value which answers one of the tests just stated and market values means that market values β the prices actually obtainable in market sales β may be disregarded if they are "delusive or fictitious" because they are the result of "a fraudulent prospectus, manipulation of the market or some other improper practice on the part of the defendant"47. There are other reasons why the law does not limit recovery by reference to market value β the amount for which the plaintiff might have sold the assets acquired. One is that, subject to mitigation issues, the plaintiff is "not bound to sell them"48. Another is that there may not be a market49. Another is that the market is mistaken on some basis other than manipulation. It is common to speak of shares being undervalued (or overvalued) by the market. 40 Potts v Miller (1940) 64 CLR 282 at 300 per Dixon J. 41 McAllister v Richmond Brewing Co (NSW) Pty Ltd (1942) 42 SR (NSW) 187 at 42 Cackett v Keswick [1902] 2 Ch 456 at 468 per Farwell J. 43 Gould v Vaggelas (1985) 157 CLR 215 at 255 per Brennan J. 44 Stevens v Hoare (1904) 20 TLR 407 at 409 per Joyce J. 45 Davidson v Tulloch (1860) 3 Macq 783 at 790 per Lord Campbell LC; quoted in Arkwright v Newbold (1881) 17 Ch D 301 at 312 per Fry J. 46 Peek v Derry (1887) 37 Ch D 541 at 591 per Cotton LJ, 594 per Sir James Hannen, 594 per Lopes LJ. 47 Potts v Miller (1940) 64 CLR 282 at 299 per Dixon J; see also Peek v Derry (1887) 37 Ch D 541 at 591-592 per Cotton LJ. 48 Peek v Derry (1887) 37 Ch D 541 at 594 per Sir James Hannen. 49 Peek v Derry (1887) 37 Ch D 541 at 591 per Cotton LJ. McHugh Kirby The last point is supported by another matter to which Dixon J referred, in the context of shares50: "[T]he real value of what the plaintiff got must be ascertained in the light of the events which afterwards happened, because those events may show, for instance, that what the shares might have sold for was not their true value or that it was a worthless company." He referred to Sir James Hannen's observation in Peek v Derry51: "[S]ubsequent events may shew that what the shares might have been sold for was not their true value, but a mistaken estimate of their value." "[L]ooking back from subsequent events to the earlier state of the company it may appear that at the time the shares were taken the assets of the company did not correspond in value to the money paid." In the same way, in Kizbeau Pty Ltd v W G & B Pty Ltd52 this Court pointed out that, in many fields of law, assessments of compensation or value at one date are commonly made taking account of all matters known by the later date when the court's assessment is being carried out. This has been so in relation to the remarriage of widows53, the termination of a dependency by early death after the date from which damages were to be assessed54, the death of a person having a claim for personal injuries which was unexpectedly early and 50 Potts v Miller (1940) 64 CLR 282 at 299 per Dixon J. 51 (1887) 37 Ch D 541 at 594. See also Gould v Vaggelas (1985) 157 CLR 215 at 52 (1995) 184 CLR 281 at 291-296 per Brennan, Deane, Dawson, Gaudron and 53 Willis v The Commonwealth (1946) 73 CLR 105; cf De Sales v Ingrilli (2002) 212 CLR 338. 54 Williamson v John I Thornycroft & Co Ltd [1940] 2 KB 658. McHugh Kirby life interests which never came unrelated to those injuries55, rises in wage rates56, assessing the value of into possession57, valuing reversionary annuities58, and assessing compensation for the acquisition or destruction of property rights59. The limpid words of Lord Macnaghten about the duty of an arbitrator in determining compensation are far too well known to escape repetition60: "Why should he listen to conjecture on a matter which has become an accomplished fact? Why should he guess when he can calculate? With the light before him, why should he shut his eyes and grope in the dark?" The significance of Kizbeau Pty Ltd v W G & B Pty Ltd is that it endorsed that approach in relation to s 82 of the Act when the court is assessing damages by comparing the price and the real value of the asset at the date of the acquisition. Finally, although the court is entitled to take into account events after the date of acquisition, it must distinguish among possible causes of the decline in value of what has been bought. "If the cause is inherent in the thing itself, then its existence should be taken into account in arriving at the real value of the shares or other things at the time of the purchase. If the cause be 'independent', 55 Jaksic v Cossar [1966] 2 NSWR 581. 56 The "Swynfleet" (1947) 81 Ll L Rep 116. 57 In re West; Denton v West [1921] 1 Ch 533 at 542-543 per Astbury J. 58 In re Bradberry; National Provincial Bank Ltd v Bradberry [1943] Ch 35 at 42 per Uthwatt J ("Why should the court neglect known facts and put itself in the position of a prophet who, when he knows all the facts, projects himself to an earlier date and predicts as the span of life of a person known to be dead the length of life of the hypothetical person who lives his actuarial life?"). 59 Bwllfa & Merthyr Dare Steam Collieries (1891) Ltd v Pontypridd Waterworks Co 60 Bwllfa & Merthyr Dare Steam Collieries (1891) Ltd v Pontypridd Waterworks Co [1903] AC 426 at 431. McHugh Kirby 'extrinsic', 'supervening' or 'accidental', then the additional loss is not the consequence of the inducement."61 Application of the plaintiff's preferred approach. In the light of these principles, the starting point must be Mr Dodds' evidence that the market value of the Plaza fell from $400,000 in April 1997 to $375,000 in July 1997, and to $130,000 in March 2000, considered in the light of the evidence of its letting history. However flawed Mr Dodds' figures as assessments of true value may be, they demonstrate that the cause of the decline in market value was not independent, extrinsic, supervening or accidental. It lay in circumstances crucial to the value of the Plaza at the time when the plaintiff acquired it β the current building, and the impending opening, of the Beach Road Shopping Centre. Indeed, the cause of the decline was what the defendant was found liable for not warning about. While "unexpected competition" has been described as a "supervening" event62, expected competition is not, and competition from the Beach Road Shopping Centre was expected β by Mr Dodds as early as 199663, and by Mr Deacon in April 199764. The "subsequent events" in this case arose from "the nature" of the Plaza and its commercial and geographical environment; they were not events which arose from "sources supervening upon or extraneous to the fraudulent inducement"65. The rental levels (and therefore the value) of the Plaza were doomed from the start β "pregnant with disaster"66 β because so long as the building of the Beach Road Shopping Centre continued, the loss was inevitable. The only way the loss could have been averted would have been if its owner had gone into liquidation, or some physical catastrophe like a fire or a collapse of the 61 Potts v Miller (1940) 64 CLR 282 at 298 per Dixon J; see also Gould v Vaggelas (1985) 157 CLR 215 at 220 per Gibbs CJ. 62 Kizbeau Pty Ltd v W G & B Pty Ltd (1995) 184 CLR 281 at 291 per Brennan, Deane, Dawson, Gaudron and McHugh JJ. 63 Astonland Pty Ltd v HTW Valuers (Central Qld) Pty Ltd [2001] QSC 380 at [35]. 64 Astonland Pty Ltd v HTW Valuers (Central Qld) Pty Ltd [2001] QSC 380 at [25]. 65 See Kizbeau Pty Ltd v W G & B Pty Ltd (1995) 184 CLR 281 at 291. 66 Smith New Court Securities Ltd v Scrimgeour Vickers (Asset Management) Ltd [1997] AC 254 at 267 per Lord Browne-Wilkinson. McHugh Kirby foundations had taken place. The Plaza may be compared to a horse which "dies of some latent disease inherent in its system at the time" of its purchase, as distinct from one which dies of some disease contracted after the purchase67. Although the plaintiff had suffered a loss in April 1997 in that had it sued and gone to court at that time it could have proved a loss of at least $85,000, with the benefit of hindsight operating from the time of the trial in 2001, it can be seen that that loss was much greater. When Mr Dodds, on 28 March 2000, estimated the value of the Plaza on 21 April 1997 as being worth $85,000 less than what the plaintiff had promised on 28 April 1997 to pay for it, he took into account the "serious risk" of the Beach Road Shopping Centre being completed as having an "impact on the market at that time". His estimation of the market value on 28 March 2000 as being $130,000 does not demonstrate that he made some egregious error in his valuation for 21 April 1997, considered strictly as a valuation. In arriving at the valuation for 21 April 1997, on his evidence as accepted by the Court of Appeal, he was ignoring events which had not yet unfolded as at that date, and taking account only of existing facts in the form of the impact on the value of the Plaza presented by the risk of the Beach Road Shopping Centre being completed68. But in arriving at the valuation for the Plaza as at 28 March 2000, he was taking account of events as they had unfolded up to that date. In carrying out valuations, he had to take account of risks so far as the market perceived them to be present realities at the date at which value was to be fixed. The task of valuation is to be conducted without hindsight β that is, without knowledge of events which have not happened by the date at which the value is to be ascribed, though they have happened by the date on which the valuation takes place. That task is different from the task of assessing loss, because the latter task is to be conducted with hindsight. Thus, in assessing damages in this case, the court is not limited to the assessment of risk as at 28 April 1997, but is entitled to take account of how those risks had evolved into certainties at dates after the date on which the comparison of price and true value was being made. The market values Mr Dodds arrived at may well have been entirely accurate; if so, they demonstrated not that he was in error, but that the market assessment of the risk 67 Twycross v Grant (1877) 2 CPD 469 at 544-545 per Cockburn CJ. 68 Astonland Pty Ltd v HTW Valuers (Central Qld) Pty Ltd [2002] QCA 302 at McHugh Kirby was erroneous. In short, the market value in 1997 was not a "true value, but a mistaken estimate of β¦ value"69. Figures worked out by analysing what willing but not anxious buyers and willing but not anxious sellers would agree on, without taking account of subsequent events, may correspond with market value; but they do not necessarily correspond with true value because the market can operate under some material mistakes. In particular, some material factor may not be apparent to it. A mistake of this kind, it seems likely, was present here. Though the market value on 21 April 1997 was $400,000, and in July 1997 it was $375,000, one matter was not apparent then which was apparent later. The trial judge found that $130,000 was "the value of the land more or less since it became apparent that tenants were largely unavailable except at minimal rentals."70 That unavailability was an inevitable consequence of the Beach Road Shopping Centre once it was completed, but the perception of the likely effect of that completion was obscure in 1997, and only became clearer from the latter part of The contrary arguments. The defendant argued that it was not possible to demonstrate a sufficient loss as at the acquisition date in 1997 to render the trial judge's assessment correct. It pointed to a lack of specific evidence on the subject. However, while it is true that there was no direct evidence placing the "true value" in the vicinity of $130,000 on 28 April 1997, there does not have to be. Barwick CJ said that, provided there was some evidence of damage, in the field of assessing damages for fraud, "as in other fields, a tribunal of fact must do the best it can in assessing damages"71. Fry J found no difficulty in assessing the difference between the price paid and "value" in the sense of "real value" or "a fair price to pay β¦ in the real circumstances at the time" of purchase, even though there was no direct evidence on the point72. Here, indirect evidence can be found in the market values at the later dates. While the course of actual events is excluded to a greater degree the further back in time the dates at which values are stated, the later values, being based on fuller experience, and being 69 Peek v Derry (1887) 37 Ch D 541 at 594 per Sir James Hannen. 70 Astonland Pty Ltd v HTW Valuers (Central Qld) Pty Ltd [2001] QSC 380 at [51]. 71 Ted Brown Quarries Pty Ltd v General Quarries (Gilston) Pty Ltd (1977) 16 ALR 72 Arkwright v Newbold (1881) 17 Ch D 301 at 312. McHugh Kirby unaffected by extraneous causes in this case, are capable of pointing to the underlying reality of earlier times. Thus it is likely that the "true value" on 28 April 1997 was much lower than $400,000. But, even with the benefit of hindsight, can it be said to have approached $130,000? The trial judge found no difficulty in concluding that Mr Dodds' valuation of the Plaza in March 2000 at $130,000 justified the view that that figure "was probably close to its realistic value" at the end of 1998 or in early 199973. The unavailing efforts that had been made to sell the property in 1999, which in part led him to that view, were matched by the development of plans to sell the property in 1998 and attempts to place it for sale from 1998 on74. The trial judge thought that an assumption that the Plaza could be fully tenanted seemed over- optimistic, even on 7 October 199875. The trial judge accepted the evidence of Mrs Foster that in the nine months up to April 1998 no inquiries from any potential purchaser had been received; that tenants were slow with the rent; that when the Beach Road Shopping Centre opened it had nine vacancies and the Plaza had three, without any inquiries from prospective tenants; and that tenants were complaining of a lack of customers. This evidence suggests that the woes of 2000 were already developing in the mid 1997 period, and tends to suggest that the true value may have been approaching $130,000 even then. However, it remains possible that the "true value" as at 28 April 1997 may not have been as low as $130,000, if only because at that stage the Plaza was fully tenanted. In theory, any landlord of the Plaza would have had at least the income stream for the duration of the tenancies, and that may have kept the true value above $130,000 in April 1997. But they were only short term tenancies. The value of tenanted premises on 28 April 1997 would be reduced as the events that unfolded after that date revealed that some of the tenants were unable to pay the rent after mid 1998 because of the competition from the Beach Road Shopping Centre, and that to some extent tenants could not be attracted at all, or only at much lower rents than formerly. If the true value in April 1997 was above $130,000, it must certainly have been falling sharply. 73 Astonland Pty Ltd v HTW Valuers (Central Qld) Pty Ltd [2001] QSC 380 at [49]. 74 Astonland Pty Ltd v HTW Valuers (Central Qld) Pty Ltd [2001] QSC 380 at [49]. 75 Astonland Pty Ltd v HTW Valuers (Central Qld) Pty Ltd [2001] QSC 380 at [49]. McHugh Kirby Conclusion: a just assessment. Let it be assumed in favour of the defendant that the true value in April 1997 was above $130,000, and that, to that extent, the plaintiff's preferred approach does not go far enough to support the trial judge's verdict. Just as the estimation of market value must be an inexact process, so must the assessment of damages based on an estimate of true value. The verdict of the trial judge, on the present approach, can only be upheld if the true value in April 1997 was about $130,000. But even if it was above that figure, so that that component in the award was wrong, the total sum for which the trial judge ordered judgment has not been shown to be so wrong as to have caused an injustice to the defendant. That is particularly so when it is remembered that in certain other respects the trial judge appears to have made errors in calculating damages which are adverse to the plaintiff. The first relates to the trial judge's decision to allow interest at 5 percent on $41,791.51 from 1 July 1999. That sum was made up of three components. The first comprised additional purchase costs in the form of stamp duty of $11,600. That was made up of the difference between what was payable on a purchase at $485,000 and what was payable on a purchase at $130,000. The duty to pay the stamp duty on $485,000 was incurred in April 1997, and the stamp duty was actually paid on or about 1 July 1997. The second component was $8,590 for refurbishment costs, paid in July-September 1997. The third component was trading losses of $21,601.51. The trial judge found that these were incurred on various dates from 1 July 1999. The trial judge allowed interest only from 1 July 1999 on all three components, and did so at 5 percent per annum. The trial judge's selection of 1 July 1999 as the date from which interest should run was correct for the trading losses, since they were only incurred from that time. But it was incorrect for the first two components, since in relation to the first the loss was suffered on or about 1 July 1997 and in relation to the second the loss was suffered progressively from July to September 1997. Although at one stage of the trial the plaintiff claimed that the correct rate of interest was 7.5 percent per annum, in final address it claimed 10 percent. At the trial the defendant did not take issue with that claim. On any view a rate of 5 percent appears too low, since the cost of money in 1997-2001 would have been higher. The figure of 5 percent also appears out of line with the practice of the Court. Throughout the period 1 July 1997 to October 2001, the rate of interest prescribed by Practice Directions of the Supreme Court of Queensland for interest on default judgments, for example, was successively 10 percent and then 10.5 percent. The trial judge gave no explicit reason for rejecting the plaintiff's claim for 10 percent. However, he appears to have selected the 5 McHugh Kirby percent interest rate on the trading losses because they were not all incurred on 1 July 1999, but were incurred progressively over the next two years. That approach was justifiable, but it appears to have been extended to the other two components. For them it was wrong, in view of the dates on which the losses were suffered. The result of these errors is that the plaintiff should have received interest on $20,190 at 10 percent from approximately 1 July 1997 for four and a quarter years, not 5 percent for two and a quarter years. The difference is about A further error, also relating to interest, arose from the trial judge's endeavour to avoid double counting. He refused to allow "interest on the funding for the purchase of the Plaza" on the ground that it was included in the trading losses76. This would be correct if the whole of the $485,000 had been borrowed. But the evidence suggests that it was not all borrowed. Mr Foster said that the purchase of the Plaza by the plaintiff was to be funded in part by $140,000 derived from the sale of the Brisbane house. This suggested that approximately $340,000 was borrowed. His evidence was corroborated by Mrs Foster, who said that seventy percent of the funds needed were to be borrowed, and that a contribution to the purchase price to be paid by the plaintiff was to come from the sale proceeds of the Brisbane house. There was documentary evidence that the contribution was $128,791.45. The plaintiff accepted in written submissions to this Court that this was a correct figure. On the trial judge's approach, which was that by early 1999 the land was worth about $130,000, by that date the plaintiff had lost $355,000 (the difference between $130,000 and the purchase price of $485,000). In this Court the defendant accepted that the trial judge was wrong not to award interest at 10 percent in relation to the $128,791.45 but denied that interest should run on the whole sum. It contended that whatever loss was suffered, only 26.55 percent of it should be referable to the component contributed from the sale of the home as distinct from borrowed funds. The figure of 26.55 percent was arrived at by dividing $128,791.45 by $485,000, and multiplying the result by 100. Let it be assumed, without deciding, that the plaintiff is correct in that methodology. If the plaintiff is correct, the trial judge should have awarded additional interest at 10 percent per annum for approximately two and a half years on 26.55 percent of $355,000, ie approximately $25,400. The fact that for additional purchase costs and refurbishment costs the trial judge erroneously selected an interest rate of 5 percent and applied it from too 76 Astonland Pty Ltd v HTW Valuers (Central Qld) Pty Ltd [2001] QSC 380 at [53]. McHugh Kirby late a date, and the fact that he allowed no interest on the component of the purchase price which was not borrowed, deprived the plaintiff of over $30,000 even if the trial judge's basic approach was correct. However, the real issue is whether, on an application of the correct approach, and taking account of the trial judge's errors on interest, the verdict arrived at by the trial judge was unjust. If it were the case that the true value of the land as at 28 April 1997 was more than $130,000, the reasoning above77 suggests that it was not much more than $130,000. If it were as much as $185,000, the plaintiff's primary loss would have been $300,000. The interest at ten percent per annum for nearly four and a half years on 26.55 percent of $300,000 is about $42,700. The component representing the difference between what was actually paid in stamp duty on a purchase of $485,000 and what would have been payable on a purchase of $185,000 would fall, but the interest-related errors of the trial judge mean that even if he gave $55,000 too much by way of primary loss, the plaintiff should recover in excess of $45,000 more in interest than he allowed. The difference between what he did give and what he ought to have given is insufficiently substantial to suggest that the trial judge's verdict was out of line with what the overall justice of the case called for. Conclusion in relation to the plaintiff's preferred approach. Subject to some additional matters dealt with below, this reasoning is sufficient to support the conclusion that the appeal should be dismissed. In all the circumstances, although the reasoning of the courts below is erroneous, the overall judgment figure has not been shown to be unjust to the defendant or unduly generous to the plaintiff. While there may be doubts about whether the true value on 27 April 1997 was as low as $130,000, they are tempered by the excessive generosity shown by the trial judge to the defendant in other respects. It is therefore not necessary to consider the merits of the figure of $193,854 as the true value on 27 April 1997, a figure put to the trial judge and urged on this Court by the plaintiff in its Notice of Contention and Cross-Appeal, but strongly attacked by the defendant. The comparison with damages for breach of warranty Alleged excessive professional liability. Before departing from the preferred approach of the plaintiff, one argument of the defendant remains to be McHugh Kirby dealt with. The defendant submitted that the question of what damages were recoverable by the plaintiff depended on what interest was affected by the misconduct inducing the plaintiff to enter into the transaction complained of. According to the defendant, the interest affected was the interest in getting a valuable acquisition in return for the price paid; there was no promise that there would be no impact on rents from local competition. The defendant contended that the damages were too high, because they corresponded with those recoverable on a breach of warranty; yet the defendant never gave, and the plaintiff never paid for, any warranty78. The defendant also contended that if the decisions below stood, the measure of the loss to be paid by any professional expressing a view on maintainable earnings which contravened s 52 (or which did not fulfil duties in contract and tort) after the existing earnings worsened, would be "the difference between the price paid and the value of the property when the risks come home" β independently of whether the professional's conduct had a continuing effect, and independently of whether the plaintiff acted unreasonably. The argument is rejected. This argument fails, partly because even if the interest affected is defined as the defendant would have it β and not as the interest of the plaintiff in conducting an ongoing investment business through the premises β the figure selected by the trial judge can stand, since the defendant's argument does not give sufficient significance to the court's power to take into account, in assessing "real" or "true" value as at the date of the transaction, events which have taken place after that date up to the time when the assessment is made. That is, the defendant's argument seeks to shift attention to the date "when the risks come home", as distinct from assessing "real" or "true" value at the date of the transaction in the light of the risks as they subsequently eventuated. The argument also fails because its assumption that the damages recovered correspond to damages for breach of warranty is not established: there was no investigation of what damages the plaintiff would recover if there had been a breach of warranty that rents would remain at about $60,000 per annum. Recovery might well have been higher in such a case than what was in fact recovered here. 78 Reference was made to Banque Bruxelles Lambert SA v Eagle Star Insurance Co Ltd [1997] AC 191 at 213-214 per Lord Hoffmann. McHugh Kirby In any event, whatever anomalies in relation to damages may be revealed by comparing liability for negligently supplied information with liability for breach of warranty, no error in assessment is demonstrated by comparing the contractual measure of damages with the s 82 measure of damages. The wide language of s 82 is compatible with a legislative desire to broaden the scope of recovery, not to keep it within the bounds of some comparison with the common law79. The plaintiff's alternative approach: price minus benefits "left in its hands" An alternative approach. The alternative approach of the plaintiff at trial was to contend that it was entitled to recover the purchase price of $485,000 less whatever was "left in its hands". In view of the conclusions reached above, it is unnecessary to rest the determination of the appeal on that approach. However, it may be said that that approach, whether it is viewed as the only acceptable path to damages under s 82 in this case, or whether it is viewed as a means of checking the soundness of results achieved by other possible paths, does not lack merit. In Smith New Court Securities Ltd v Scrimgeour Vickers (Asset Management) Ltd80, a majority of the House of Lords held that "there can be circumstances in which it is proper to require a defendant only to bring into account the actual proceeds of the asset provided that he has acted reasonably in retaining it." And Lord Steyn, who reached the same result, pointed out that the fundamental rule was that the plaintiff should be compensated; that the rule which turns on an assessment of value is only a means of giving effect to the overriding compensatory rule; and that the valuation of assets as at the date of the transaction is "simply a second order rule applicable only where the valuation method is employed."81 He went on: "If that method is inapposite, the court is entitled simply to assess the loss flowing directly from the transaction without any reference to the date of 79 Murphy v Overton Investments Pty Ltd (2004) 78 ALJR 324 at 332 [44]; 204 ALR 80 [1997] AC 254 at 265 (see also 267 (propositions (4) and (5)) per Lord Browne-Wilkinson, Lords Keith of Kinkel, Mustill and Slynn of Hadley concurring. 81 Smith New Court Securities Ltd v Scrimgeour Vickers (Asset Management) Ltd [1997] AC 254 at 284. McHugh Kirby transaction or indeed any particular date. Such a course will be appropriate whenever the overriding compensatory rule requires it." Advantages of the approach. While here the plaintiff cannot bring into account the actual proceeds of sale of the Plaza, because, despite its best efforts, it has not succeeded in effecting a sale, the principle would permit the value of the Plaza at the time of the trial to be the relevant figure. There is certainly no reason why an approach of that kind is not open under s 82 of the Act. The deduction of true value at the acquisition date from the price paid is no more than a guide to the assessment of damages under s 82. Section 82 does not in terms refer to that method, and the width of s 82 permits other approaches to the assessment of damages so long as they work no injustice82. The alternative approach advocated by the plaintiff has particular appropriateness in the present circumstances. That is because a primary reason for the common adoption, in assessing damages in deceit, of the test of comparing the price paid for an asset with its true value when acquired is the desirability of separating out losses resulting from extraneous factors in the later history of the asset83. Here, the trial judge found that the decline in value of the Plaza had no cause other than the completion of the Beach Road Shopping Centre84. The present case is from that point of view an unusually pure one. Since there are no losses resulting from extraneous factors to separate out, there is correspondingly less need to look to a comparison of purchase price and real value on acquisition as the appropriate approach. The House of Lords majority in Smith New Court Securities Ltd v Scrimgeour Vickers (Asset Management) Ltd saw the comparison of price and value at the date of acquisition as a test which may well produce a fair result "if 82 Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494 at 503-504 [17] per Gaudron J, 510 [38] and 512 [41] per McHugh, Hayne and Callinan JJ, 529 [103] per Gummow J and 549 [152] per Kirby J; Henville v Walker (2001) 206 CLR 459 at 470 [18] per Gleeson CJ, 501-502 [130]-[131] per McHugh J; I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109 at 124-125 [42]-[48] per Gaudron, Gummow and Hayne JJ; Murphy v Overton Investments Pty Ltd (2004) 78 ALJR 324 at 329-330 [31] and 332 [44] per Gleeson CJ, McHugh, Gummow, Kirby, Hayne, Callinan and Heydon JJ; 204 ALR 26 at 34 and 37. 83 Henville v Walker (2001) 206 CLR 459 at 471-472 [24]-[25] per Gleeson CJ. 84 Astonland Pty Ltd v HTW Valuers (Central Qld) Pty Ltd [2001] QSC 380 at [38]. McHugh Kirby the asset acquired is a readily marketable asset and there is no special feature (such as a continuing misrepresentation or the purchaser being locked into a business that he has acquired)"85. It also said that that general rule "will normally not apply where either (a) the misrepresentation has continued to operate after the date of the acquisition of the asset so as to induce the plaintiff to retain the asset or (b) the circumstances of the case are such that the plaintiff is, by reason of the fraud, locked into the property."86 In argument before this Court, the defendant contended that the misrepresentation had not continued to operate after the date of the acquisition, or at least after late 1997, when the Fosters were becoming concerned by the departure of tenants and the inability to replace them, and therefore engaged Mr Clacher, a valuer, to prove that a loss had been suffered, which he duly did by valuing the Plaza at $350,000. However, while the defendant was not guilty of fraud, its unlawful conduct had locked the plaintiff into the Plaza. Conclusion: a fairer result. After the Fosters began to become conscious of their difficulties in late 1997, and received Mr Clacher's valuation in early 1998, they began planning methods of selling the Plaza additional to using real estate agents, and began making what the trial judge found to be "genuine efforts" to do so from 199987. The difficulties with the plans and the failure of the efforts demonstrate that the plaintiff's options were confined in the sense that, because of the defendant's conduct, the plaintiff was induced to buy the Plaza at a time when it was perceived to be valuable, and was forced to retain it because it increasingly came to be perceived as being of declining utility and value. In short, the Plaza was not "a readily marketable asset". The alternative contention of the plaintiff produces a fairer result than that urged by the defendant would produce. But, as already indicated, the determination of the appeal does not rest on this alternative contention of the plaintiff. The two loss theory It is not necessary to consider the merits of a further approach briefly alluded to by the plaintiff to the effect that the plaintiff could recover two losses β one being its loss on acquisition of the Plaza created by the risk of the Beach 85 [1997] AC 254 at 266. 86 [1997] AC 254 at 267. 87 Astonland Pty Ltd v HTW Valuers (Central Qld) Pty Ltd [2001] QSC 380 at [49]. McHugh Kirby Road Shopping Centre eventually opening, the other being the additional loss arising when that risk came to fruition88. The application for special leave to cross-appeal The plaintiff applied for special leave to cross-appeal. The application had the goal of persuading this Court to substitute for $130,000 as the true value the figure of $193,854 in the event that this Court thought the figure of $130,000 was wrong. The consequence of dismissing the appeal is that the cross-appeal becomes unnecessary and special leave is therefore refused. Orders The damages recovered by the plaintiff, provided for in the orders of the courts below, have not been shown to be erroneously excessive. The appeal and the application for special leave to cross-appeal should be dismissed. The defendant should pay the costs. 88 Cf Murphy v Overton Investments Pty Ltd (2004) 78 ALJR 324 at 332-333 [47]-[52]; 204 ALR 26 at 38. |
HIGH COURT OF AUSTRALIA Matter No A24/2016 APPELLANT AND THE QUEEN Matter No A26/2016 AND THE QUEEN RESPONDENT APPELLANT RESPONDENT Castle v The Queen Bucca v The Queen [2016] HCA 46 16 November 2016 A24/2016 & A26/2016 ORDER Matter No A24/2016 Appeal allowed. Set aside the order of the Court of Criminal Appeal of the Supreme Court of South Australia made on 3 December 2015, and in its place order that: the appeal be allowed; the appellant's conviction be quashed; and a new trial be had. Matter No A26/2016 Appeal allowed. Set aside the order of the Court of Criminal Appeal of the Supreme Court of South Australia made on 3 December 2015, and in its place order that: the appeal be allowed; the appellant's conviction be quashed; and a new trial be had. On appeal from the Supreme Court of South Australia Representation G O'L Reynolds SC with S G Henchliffe for the appellant in A24/2016 (instructed by Mangan Ey & Associates) M E Shaw QC with B J Doyle for the appellant in A26/2016 (instructed by North East Lawyers) A P Kimber SC with F J McDonald for the respondent in both matters (instructed by Director of Public Prosecutions (SA)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Castle v The Queen Bucca v The Queen Criminal law β Appeal against conviction β Application of proviso β Where appellants convicted of murder arising out of joint criminal enterprise β Where evidence of exculpatory statement by one appellant wrongly left to jury as evidence of admission β Where remaining evidence circumstantial β Whether no substantial miscarriage of justice occurred. Criminal law β Summing-up β Where one appellant gave evidence β Where trial judge referred jury to aspects of appellant's evidence but did not summarise it β Whether appellant's case fairly left to jury. Criminal law β Admissibility of evidence β Where evidence that one appellant possessed handguns months prior to shooting β Whether evidence "discreditable conduct evidence" within meaning of s 34P(1) of Evidence Act 1929 (SA) β Whether open to conclude probative value of evidence substantially outweighed prejudicial effect. Words and phrases β "admissibility", "discreditable conduct evidence", "exculpatory assertion", "proviso", "substantial miscarriage of justice", "summing-up". Criminal Law Consolidation Act 1935 (SA), s 353(1). Evidence Act 1929 (SA), s 34P. KIEFEL, BELL, KEANE AND NETTLE JJ. The appellants were convicted of the murder of Adrian McDonald following a trial in the Supreme Court of South Australia (Peek J and a jury). The deceased was shot at 6:36am at the "Big Bucket Car Wash" in Parafield, a northern suburb of Adelaide. Closed-circuit television camera (CCTV) footage recorded the deceased getting into the front passenger seat of a Ford Futura sedan ("the Ford"). The deceased's former partner, the first appellant, Tristan Castle, was the driver of the vehicle. A few moments later, a shot was fired as the deceased attempted to get out of the vehicle. Two more shots were fired in quick succession. The third shot was fatal. It was an admitted fact that the Ford belonged to Castle's mother and that Castle was driving it at the time of the shooting. It was the prosecution case that Castle lured the deceased to the car wash on the pretext of renewing their sexual relationship and that the second appellant, Jason Bucca, was lying in wait in the boot armed with a handgun. The prosecution argued that Bucca had crawled through to the interior of the Ford by folding down a back seat and then shot the deceased. Castle's liability for the murder was put to the jury on alternative bases: either she was a party to a joint criminal enterprise with Bucca to kill or to inflict grievous bodily harm or she was a party with Bucca to a joint criminal enterprise to assault and detain the deceased and she foresaw that in carrying out that scheme Bucca might shoot the deceased with murderous intention. Bucca did not give evidence. It was his case that he was not the shooter. Castle gave evidence that a man called Wesley Gange was the shooter and that she had not known that Gange was armed or that he planned to harm the deceased. Gange died before the trial. Castle's relationship with the deceased had ended shortly before these events and she had commenced a sexual relationship with Bucca. Bucca and Gange were associates and each entertained hostile feelings towards the deceased arising from the belief that he had broken into the premises in which they had been living and stolen some of their belongings. A matter of hours before the shooting Bucca and Gange were looking for the deceased together. The prosecution case against each appellant was largely circumstantial. The central issue at the trial was whether the prosecution had excluded the reasonable possibility that Gange was the shooter. In the event that it had, a further issue in Castle's case was the capacity of the evidence to prove her agreement to the intentional killing or infliction of grievous bodily harm on the deceased or, at the least, her contemplation that Bucca might do so in carrying out an agreement to assault and detain the deceased. The prosecution case Bell Nettle against Castle, in either of the ways it was put to the jury, depended upon proof that she knew Bucca was armed with a handgun. In evidence were charts containing telecommunications data, which showed the probable location of the mobile telephones known to be used by the appellants and by Gange ("the telephone records"). A mobile telephone with the number 0407114911, which was known to be used by Gange ("the 911 telephone"), was not in the vicinity of the Big Bucket Car Wash at the time the deceased was killed. At that time the 911 telephone was in a location that was consistent with it being in the premises at which Gange was staying. Those premises were 12.4 kilometres away from the Big Bucket Car Wash. Proof that the 911 telephone was not at the scene of the killing could not, without more, support a finding that Gange was not there. Proof that Gange was not there depended upon inferences from the probable location of the 911 telephone and Gange's known movements in the hours before and after the killing. It also depended on the evidence of Gange's partner, M, that Gange was at home with her at the time of the shooting. The procedural history M's and Castle's evidence could not stand together. In summing-up, the trial judge reminded the jury of M's evidence in terms which were said by Bucca and Castle to be unduly favourable to the prosecution. His Honour did not remind the jury of any of the salient parts of Castle's evidence. The appellants appealed against their convictions to the Court of Criminal Appeal of the Supreme Court of South Australia (Kourakis CJ, Parker and Lovell JJ) on a variety of grounds. In each appeal, several grounds were particulars of the ground which contended that the summing-up lacked balance. Complaint was also made of the admission of evidence that Bucca was in possession of three handguns some months before the shooting. This evidence was given by Tamara Pascoe, the 18 year old daughter of one of the deceased's associates. Separate complaint was made about the trial judge's directions concerning Pascoe's evidence of a statement made by Bucca shortly after the shooting, which the prosecution relied on as an admission. The Court of Criminal Appeal upheld the trial judge's decision to admit Pascoe's evidence of Bucca's possession of handguns. The Court of Criminal Appeal dismissed, or refused permission to appeal on, the remaining grounds, save in Bucca's case for the ground that complained of the directions concerning Pascoe's evidence of the "admission". The Court of Criminal Appeal held that Pascoe's evidence was not capable of being treated as an admission and it was an Bell Nettle error not to have so directed the jury. The Court of Criminal Appeal upheld Castle's related ground that the trial judge erred by failing to direct the jury that Bucca's "admission" to Pascoe was not evidence in her trial1. Nonetheless, the Court of Criminal Appeal dismissed the appeals under the proviso. On 25 May 2016 Nettle and Gordon JJ granted Bucca and Castle special leave to appeal on grounds that challenge the exercise of the proviso and the admission of Pascoe's evidence of Bucca's possession of handguns. The challenge to dismissal under the proviso is put in two ways. Each appellant contends that the Court of Criminal Appeal erred in concluding that his or her guilt was proved beyond reasonable doubt. In the alternative, each appellant contends that satisfaction that his or her guilt was proved to that standard does not mean that the error did not occasion a substantial miscarriage of justice. Castle maintains her ground that her trial miscarried because of the failure to fairly put her case and to remind the jury of the salient parts of her evidence2. The evidence at trial In considering the first way in which the appellants challenge the dismissal of their appeals under the proviso, it is necessary to refer to the evidence in more detail. The relationships The relationship between Castle and the deceased ended in late 2012 or early 2013, not long after the bank entered into possession of the premises in which they had been living. The deceased moved into premises in Cadell Court, Hope Valley. These premises were occupied by his friend Jim Bristow. Castle and her two youngest children moved to her mother's home in Elizabeth Park. The break-up, which was not of the deceased's choosing, proved to be acrimonious. The deceased became aware that Castle was in a sexual relationship with Bucca not later than 26 January 2013. 1 The error in Castle's case included the failure to direct the jury that a statement made by Bucca to Detective Georg at 3:30pm on 3 February 2013, that he had spent 95 per cent of the preceding 24 hours with Castle, was not evidence in Castle's trial. 2 Castle's first ground of appeal (related to extended joint criminal enterprise) was not pressed in light of the decision in Miller v The Queen (2016) 90 ALJR 918; 334 ALR 1; [2016] HCA 30. Bell Nettle Bucca and Gange shared rented premises in Sapphire Crescent, Highbury during 2012. The lease on these premises expired in February 2013 and they were in the process of moving out at the date of the shooting. On 31 January 2013, the Sapphire Crescent premises were broken into and a fridge, laptop, boxing bag and weights were stolen. Shortly before the discovery of the break- in, Castle had seen the deceased driving in the vicinity of Sapphire Crescent towing a trailer. She told Bucca of this sighting. Bucca and Gange each believed the deceased was responsible for the break-in. In the 48 hours before the shooting, each sent the deceased abusive text messages about the theft of their property. Bucca, Castle, Gange and M were all regular users of methamphetamine in the form colloquially known as "ice". M and Gange were using between $2,000 and $5,000 worth of "ice" each week. Gange was a supplier of the drug. By February 2013, Gange and M had moved into Matthew Grace's premises in Gosfield Crescent, Hampstead Gardens where Grace, who was an associate of Gange, his partner, Tammy, and her children were living. Gange was easily roused to anger, particularly when using "ice". He was familiar with handguns. He had traded handguns for drugs, although the evidence did not establish whether this had taken place before or after the shooting. In 2009, Gange suffered severe burns in an accident. As a result his right arm was fused at the elbow at an angle of 90 degrees. On some days his pain restricted his mobility and on other days it did not. M's evidence M gave evidence of a conversation between Castle and Bucca that took place on the evening of Saturday 2 February 2013. She and Gange had been present but neither of them had taken part in the conversation. Bucca had referred to the deceased as a "dog" and Castle had spoken of arranging a baby-sitter so that she and Bucca could meet him. M's understanding of the plan was that Castle "was going to pretend like she wanted to get back with him" and that Bucca was going to be there. According to M, Gange left Gosfield Crescent between midnight and 2:00am on 3 February 2013 and returned between 5:30 and 6:30am. At the date of giving evidence M was unable to remember the exact time. She disagreed with the suggestion that he might have returned as late as 7:00am because she remembered that Tammy's children were up and getting ready for school. In cross-examination she acknowledged that her evidence in this respect could not have been correct because 3 February was a Sunday. M gave another reason for knowing that Gange had returned home before the shooting: when she learned of Bell Nettle the time of the killing she remembered saying to Gange "thank fuck you were home by that time". M's veracity and reliability were both the subject of challenge. She acknowledged that she had been drinking heavily on the evening of 2 February and that she may have consumed drugs. She acknowledged that her drug and alcohol abuse had resulted in psychotic episodes and auditory hallucinations, and more generally impaired her ability to reason. The telephone records The telephone records contained data relating to the mobile telephones used by Castle, Bucca, Gange, M and the deceased in the period between 7 January and 3 February 2013. They included the content of text messages, the duration of telephone calls, the identity of the assumed recipient of the call and the telephone tower through which the caller's signal was relayed. The Klemzig, Greenacres and Hampstead Gardens telephone towers were roughly equidistant from the Gosfield Crescent premises, at which Gange and M were staying, and calls made from those premises would be expected to be relayed by one of these towers. Mobile telephone calls made from the Cadell Court premises, at which the deceased was staying, were likely to be relayed through the Hope Valley, Hope Valley East or Hope Valley Reservoir towers. The Sapphire Crescent premises, from which Gange and Bucca were moving out, is close to Cadell Court and calls made from the Sapphire Crescent premises were also likely to be relayed through one of those towers. Mobile telephone calls made from the Big Bucket Car Wash were likely to be relayed through the Modbury, Para Vista South or Para Hills West towers. The prosecution sought to demonstrate that, on the morning of 3 February, the 911 telephone, known to be used by Gange, was at a location consistent with it being at the Gosfield Crescent premises at 2:42am. At this time, a message was transmitted from Bucca's telephone to the 911 telephone reading "[s]weet cu soon bro". At 3:30am, a call made on the 911 telephone was relayed through the Hope Valley tower. This was consistent with the 911 telephone having moved to the vicinity of the Cadell Court premises. At 3:33am, a call from Bucca's telephone was relayed through the Hope Valley tower, which was consistent with that telephone being in the vicinity of the Cadell Court premises. The presence of Bucca and Gange at the Cadell Court premises was recorded by CCTV at 3:50am. The two men were seen leaving those premises at 4:50am. At 5:05am on 3 February, the 911 telephone was still relaying calls through the Hope Valley tower. By 5:14 that morning, the 911 telephone was relaying calls through the Klemzig tower. This was consistent with the 911 Bell Nettle telephone having been taken from the Cadell Court premises to the Gosfield Crescent premises. Between that time and 8:10 that morning, the 911 telephone relayed calls through the Klemzig, Greenacres and Hampstead Gardens towers, consistent with it being located at the Gosfield Crescent premises. M said that she and Gange had gone to the Cadell Court premises some time after 8:00am on Sunday 3 February. Consistent with that account, at 8:47am a call from the 911 telephone was relayed through the Hope Valley Reservoir tower. Calls made from Castle's telephone between 5:21am and 6:00am on 3 February were relayed through towers which were consistent with the prosecution case that she was in the vicinity of the Big Bucket Car Wash. Calls made by Bucca's telephone at 5:34am and at 5:49am were relayed through towers which were consistent with the prosecution case that he was with her. CCTV footage recorded at the Big Bucket Car Wash showed the Ford parked in a bay at 6:20am. The driver alighted from it on three occasions. Twice the driver moved to the boot area of the vehicle. On at least one occasion the driver opened the boot. At 6:25am, two short calls were made from Bucca's telephone to the 911 telephone. These were relayed through the Para Hills West tower, which was consistent with Bucca's telephone being at the Big Bucket Car Wash. At 6:30am, the deceased's vehicle arrived at the car wash. At 6:32am, the deceased sent Castle a text reading "I'm next to you". Castle replied, "Im not getting out [of] the car its cold". At 6:33am, a call was made from the 911 telephone to the deceased. CCTV footage showed the deceased's phone light up but the deceased did not answer the call. At 6:34am, a call was made from the 911 telephone to the Castle telephone. In each case the call was relayed through the Klemzig tower, consistent with the 911 telephone being at the Gosfield Crescent premises. The deceased walked to the front of the Ford and looked through the windows. At 6:36am, he got into the front passenger side of the car. He was in the car for 30 seconds before it drove off, stopped and the three shots were fired. At 6:40am, a phone call was made from Castle's telephone. At 6:44am, a text message was sent from Castle's telephone to the deceased's telephone reading "[h]ad to leave the kids got up i wil call you later on n we can meet up to talk". Bell Nettle The prosecution relied on the pattern of calls and probable location of the telephones as powerful support for its case that Bucca was with Castle at the Big Bucket Car Wash and Gange was at home in Gosfield Crescent. The prosecution argued that Castle's text message to the deceased that said she was not getting out of the car because it was too cold, was a device to have him get into the Ford β she had not been reluctant to get out of the Ford before the deceased arrived. Her trips to the boot were suggested to be to check on Bucca. Other evidence to which it is not necessary to refer pointed to the deceased being wary of an encounter with either Bucca or Gange. His conduct in examining the interior of the Ford before getting into it was said to be consistent with the shooter being concealed in the boot and inconsistent with Gange being seated inside the vehicle. Castle's 6:44am text message was said to be an evident attempt to set up an alibi. On any view, at 6:44am Castle well knew the deceased had been shot. Castle's evidence Castle said that, on the evening of 2 February, Gange had asked her to contact the deceased and to act as a mediator to assist him in recovering his property. She denied that Bucca or anyone else had referred to the deceased as a "dog" or that she had said anything to suggest that she was going to arrange a meeting with the deceased on the pretext of resuming their sexual relationship. She arranged to meet the deceased to sort out their furniture, which included arranging for him to collect a lounge and other belongings from her mother's house. She had borrowed the Ford to collect the last of Bucca's belongings from the Sapphire Crescent house as her own car was already full. She arrived at Sapphire Crescent some time before 4:37am. She sat waiting for just over half an hour until Bucca and Gange turned up. The three went inside and collected Bucca's belongings and put them in the boot of the Ford. While loading the car she told Bucca and Gange about her arrangement to meet the deceased. She had spoken to the deceased shortly after 6:00am and arranged to meet him at the Big Bucket Car Wash. She did not ask either Bucca or Gange to accompany her. Castle said that Gange had wanted to come with her because he wanted to get back his computer, fridge and the other things that the deceased had taken. Castle said that she drove the Ford to the Big Bucket Car Wash with Gange in the front passenger seat. She had got out of the car and opened the boot to look for cigarettes. When the deceased arrived, Gange climbed over the centre console into the back seat and the deceased got into the front passenger seat. The three of them started talking and Gange brought up the subject of the break-in. The deceased denied any part in it. Gange got angry and started yelling. Castle said that she was going to drive to a nearby service station to buy some Bell Nettle cigarettes. As the car started to move, the deceased went to open the door. She slammed on the brakes and the first shot was fired. The deceased was partly out of the door at this time. Then two more shots were fired. She looked over her shoulder and saw a gun in Gange's hand. She yelled at him that they needed to call an ambulance and she went to pick up her telephone. Gange took the telephone off her, pointed the gun at her and told her to drive. He had sent the text message to the deceased's telephone. Castle said that she had not known that Gange had a gun until the first shot was fired. She had not intended any harm to the deceased. She said that her mobile telephone was with her at all times. Bucca's mobile telephone was also in the Ford with her. Initially she said that Bucca had left it there. Later she said that Bucca had not been inside the Ford and that she had picked up her own and Bucca's telephones before driving to the car wash. She had no explanation for calls from these telephones being relayed through towers that suggested both telephones were in the vicinity of the Big Bucket Car Wash at a time when she said that she and Bucca were at the Sapphire Crescent premises. Pascoe's evidence of the "admission" Tamara Pascoe and her father had stayed at the deceased's house at a time when the deceased and Castle were living together. They had come to know Bristow and Bucca through their association with the deceased. Pascoe learned of the murder of the deceased from a report on the television that was broadcast a few days after the event. She and her father went to Bristow's house, where the deceased had been living, to pay their condolences. Bucca arrived while they were there and she observed him having a conversation with her father. In evidence in chief she said that she heard Bucca "say that he didn't mean to do it, and everything went sour and he started, was crying". She described Bucca as "distraught" and "devastated". In cross-examination Pascoe twice agreed that Bucca's exact words were "he didn't mean to do it". In an endeavour to resolve any ambiguity, the trial judge asked whether Pascoe heard Bucca say anything about who it was that "didn't mean to do it". Pascoe replied that she had not. His Honour then asked "from what you heard did you form any view as to β¦", and Pascoe interrupted saying "no, I didn't form any view. I didn't know who did it until I saw on the newspaper". In re-examination the prosecutor reminded Pascoe of her evidence that Bucca had told her father "he didn't mean to do it", and he asked: Bell Nettle "Q. When you gave that answer before lunch, when you spoke about 'he' didn't mean to do it, who were you speaking about. That's just what Jason said, I don't know who he was speaking about, but he said that he didn't mean to do it to dad." In his closing address the prosecutor invited the jury to consider that Pascoe had been confused and that it was open to treat Bucca's statement as an admission that he, Bucca, had not meant to do it. Bucca's counsel submitted that it was clear from Pascoe's answers in cross-examination and in re-examination that the statement was exculpatory and consistent with finding that Gange was the shooter. In summing-up, the trial judge reminded the jury of Pascoe's evidence in chief and re-examination on this topic, commenting: "Ladies and gentlemen, that's the state of the evidence on that matter. Obviously [counsel for Bucca] submits that you should take the view that Pascoe was saying, and meant to say, that Bucca was referring to some other person here. It is a matter for you." At the first opportunity Bucca's counsel raised the treatment of Pascoe's evidence of the purported "admission". Counsel submitted that the evidence was of "clear denials", and given the importance of the evidence and "for the sake of balance" he asked the judge to remind the jury of Pascoe's answers in cross-examination. The trial judge declined to do so. Bucca's eighth ground of appeal in the Court of Criminal Appeal complained of the trial judge's failure to remind the jury of Pascoe's answers in cross-examination, and to direct that, contrary to the prosecutor's submission, Pascoe's evidence was not capable of being understood as an admission. Castle particularised a number of features of the summing-up in support of her ground that it was lacking in balance. It is unnecessary to refer to all of them since in this Court her challenge is confined to the asserted failure to fairly put her case by reminding the jury of the salient aspects of her evidence. In order to understand the way the ground is developed it is necessary to refer to some of the respects in which the trial judge dealt with M's evidence in the course of summing-up. The summing-up The trial judge reminded the jury of M's evidence that she remembered saying "[t]hank fuck that you were home before that shooting occurred". His Honour commented: Bell Nettle "You see, she has been criticised uphill and down dale, ... but if you think that is the genuine expression of the feeling of relief that she had that 'At least I haven't got this problem and I have got plenty of problems with Gange', because she seems a fairly decent woman on the outset, but that is a matter for you, 'But at least I haven't got this problem, I know you were home at the time of the shooting', so there you have it." (emphasis added) After summarising the prosecutor's submissions concerning the telephone records and the CCTV footage, his Honour rhetorically asked "what is the answer that the respective accused's make to this fairly detailed analysis". Shortly afterwards, his Honour repeated the question, asking "[w]hat answer from counsel for the defence to this apparently cogent analysis". His Honour contrasted the "skilful" and "cogent" arguments made by Castle's counsel concerning the scope of any joint criminal agreement with counsel's answer to the question of whether it could be shown that Gange was not the shooter. The latter was, his Honour said, "a very brief answer with all respect". Counsel for Bucca applied for the jury to be discharged, submitting that the effect of the trial judge's rhetorical question was to reverse the onus of proof. Counsel raised a number of other matters in support of his application, including that his Honour had endorsed M as a "decent girl" when on the defence case M was a witness whose evidence was to be approached with the utmost caution. Counsel for Castle also expressed concern that his Honour's rhetorical question carried the implicit danger that the jury might consider that there was an onus on her to provide an answer. Counsel asked his Honour to deal with this concern in the balance of the summing-up. He did not join in the application to discharge the jury, which was refused. When the jury returned to court, the trial judge explained that he had been reminding it of the prosecutor's submissions and he directed, "if you were to think that I had some sort of view about it, do not let that influence you at all". Later, his Honour referred to his observation that M seemed to be a "fairly decent woman", and said: "I obviously meant going on initial impressions and subject to deeper consideration, but in fact it probably would be better if I hadn't said anything about my view as to her because, after all, it's entirely for you to form impressions of witnesses and not for me, so just put that to one side. We are all experienced in summing up people. That's your task, not mine." In summing-up Bucca's case, his Honour reminded the jury that it had been submitted that the only concessions that M made were those that she could Bell Nettle not escape and that the rest of her evidence was a construct. His Honour commented "[w]ell, ladies and gentlemen, you take into account what [counsel for Bucca] says. That is a big allegation to make of a witness on oath". And his Honour reminded the jury: "You had the chance of seeing her give lengthy evidence and being cross-examined at length by two counsel, not just one. ... Despite some difficulties with memory and so forth, is she trying to tell the truth and then if she is, what allowances do we have to make for difficulties that might impinge upon reliability?" In summarising the prosecution case the trial judge referred to Castle's evidence that Gange climbed from the front seat over the console to the back seat when the deceased arrived; that she had given two differing accounts of how Bucca's telephone came to be in the Ford; and that after the shooting she had collected Bucca but not told him what had happened. In each case his Honour reminded the jury of the prosecutor's criticisms of the evidence. The only other references that the trial judge made to Castle's evidence were in the course of giving general directions of law. His Honour instructed the jury that her evidence was to be assessed in the same way as the evidence of other witnesses. The direction was completed by stating "[w]hether, of course, you believe it is entirely a different matter". When it came to Castle's case, his Honour directed that if the jury found Castle had lied, as the prosecutor submitted, it did not mean that without more she should be found guilty. The Court of Criminal Appeal The Court of Criminal Appeal rejected the appellants' grounds which challenged the balance of the summing-up. Their Honours concluded3: "Many complaints are made about aspects of the summing up which are claimed to result, cumulatively, in a lack of balance. We have considered those complaints individually and overall. In our view the Judge's observations reflected the strength of the prosecution evidence. The defence case, including Ms Castle's evidence, was little more than a bare denial of that evidence which failed to engage with the probative force of the prosecution case in any meaningful way. The observations of the Judge on the evidence were well within the discretion of a trial judge." 3 R v Castle [2015] SASCFC 180 at [70]. Bell Nettle Their Honours said that greater reference to Castle's evidence would have served only to remind the jury of its improbability because it failed to logically address the Crown case. In the circumstances, the failure to remind the jury of her evidence when "so much of it was inconsistent with the objective and reliable evidence"4 did not occasion a miscarriage of justice. As earlier explained, Bucca's eighth ground and Castle's related ground were upheld. The Court of Criminal Appeal considered that the trial judge's summary of Pascoe's evidence was incomplete: the jury had not been reminded that on three occasions in cross-examination (once in answer to a question by the trial judge) Pascoe agreed that Bucca's statement related to a third person5. These answers and her answer in re-examination "unequivocally" established that Bucca was referring to a third person6. The Court of Criminal Appeal said that the evidence was incapable of being viewed as an admission; its only use was exculpatory and it was an error to fail to so direct the jury7. The Court of Criminal Appeal acknowledged that where an appeal turns on oral evidence ordinarily it will not be appropriate to dismiss the appeal under the proviso. Their Honours considered that these appeals were exceptional because Castle's evidence was not just implausible and inconsistent with the objective evidence, it was "so obviously false that it carries no weight at all"8. The Court of Criminal Appeal was satisfied beyond reasonable doubt that the evidence proved that Bucca shot the deceased. This conclusion was based on six strands of evidence9: The records showing that Bucca's and Castle's mobile telephones were circling the Big Bucket Car Wash early on the morning of 3 February and were in the Ford at the time of the shooting. 4 R v Castle [2015] SASCFC 180 at [66]. 5 R v Castle [2015] SASCFC 180 at [20]. 6 R v Castle [2015] SASCFC 180 at [18]. 7 R v Castle [2015] SASCFC 180 at [18], [21]. 8 R v Castle [2015] SASCFC 180 at [106]. 9 R v Castle [2015] SASCFC 180 at [128]. Bell Nettle The evidence of motive. [3] M's evidence of the plan that Castle was to lure the deceased to a confrontation with Bucca. Castle's text messages to the deceased in apparent execution of that plan. The telephone records and M's evidence which placed Gange at the Gosfield Crescent premises at the time of the shooting. The difficulty that a man with Gange's injuries would have in hiding in the boot of the Ford and moving from that position into the back seat of the car. The Court of Criminal Appeal was satisfied beyond reasonable doubt that the evidence proved that Castle was a party to an agreement with Bucca to detain the deceased at gunpoint and confront him about the break-in and that she foresaw the possibility that in carrying out this agreement Bucca might kill or inflict grievous bodily harm with murderous intent. This conclusion was based The evidence which proved Bucca was the shooter. The inference that Castle either saw the gun or was told of it in the time she and Bucca spent before arriving at the car wash and in light of her movements towards the boot of the car while waiting for the deceased. [3] Her refusal to meet the deceased in his car. The phone call made by Castle after the shooting and the text sent to the deceased's telephone. The Court of Criminal Appeal considered that Pascoe's evidence of the "admission" was "a minor part of the evidence" and was so overwhelmed by the circumstantial case against each appellant that it was unlikely that it had any influence on the verdicts11. It concluded that no substantial miscarriage of justice 10 R v Castle [2015] SASCFC 180 at [129]. 11 R v Castle [2015] SASCFC 180 at [130]. Bell Nettle had been occasioned by the way Pascoe's evidence had been left in each case and it dismissed the appeals12. The submissions Bucca submits that the Court of Criminal Appeal erred by approaching the determination of his appeal by asking whether his guilt had been proved when the admitted error went to the central issue in the trial. The directions left open that his statement to Pascoe's father was a confession that he was the killer. The correct direction would have required the jury to exclude the reasonable possibility that the statement β he (the unnamed third person) didn't mean to do it β was true before it could find him guilty. Regardless of the Court of Criminal Appeal's conclusion that Bucca's guilt was proved beyond reasonable doubt, in his submission the error had occasioned a substantial miscarriage of justice. In the alternative, Bucca submits that the Court of Criminal Appeal's analysis failed to establish his guilt. Castle contests the Court of Criminal Appeal's conclusions that Bucca's "admission" was unlikely to have affected the verdicts and that her guilt was proved beyond reasonable doubt. In the latter respect, she submits that the inference that she knew Bucca was armed did not rise above speculation. Her starting point, as earlier explained, is that her defence was not fairly left for the jury's consideration. The respondent accepts that if Castle succeeds on the last-mentioned ground the irregularity would have occasioned a substantial miscarriage of justice requiring the verdict to be set aside. The fairness of the summing-up of Castle's case The complaint that Castle's case was not fairly left for the jury's consideration was not answered by concluding that the trial judge's observations reflected the strength of the prosecution evidence or that Castle's evidence failed to logically address the prosecution case13. Whatever the shortcomings of Castle's evidence, she was entitled to have the case that she presented fairly put to the jury together with any other matter upon which the jury might properly have returned a verdict in her favour. This is not to say that the omission of a summary of the salient parts of Castle's evidence in summing-up her case to the jury necessarily caused the trial 12 R v Castle [2015] SASCFC 180 at [131]. 13 R v Castle [2015] SASCFC 180 at [66], [70]. Bell Nettle to miscarry. How the judge structures the summing-up and the extent to which the judge reminds the jury of the evidence is a matter for individual judgment and will reflect the complexity of the issues, and the length and conduct of the case14. The essential requirements of the summing-up in a criminal trial were stated in RPS v The Queen and do not need to be restated15. Needless to say, they include that the judge must fairly put the accused's case, an obligation which extends to explaining any basis upon which the jury might properly return a verdict in the accused's favour16. Where, as here, the jury is supplied with a transcript of the evidence the judge may consider that reference to those parts of the evidence that bear on the determination of particular issues does not require reading passages from the transcript or summarising it. Castle's complaint is with the contrast between his Honour's treatment of her evidence and the treatment of the oral evidence in the prosecution case, which was summarised in some detail. This and his Honour's favourable observations with respect to the reliability of M's evidence are said to have conveyed to the jury that Castle's evidence was not worthy of consideration and should be summarily rejected. A trial judge may comment on the evidence provided he or she makes clear that the determination of the facts is entirely within the jury's province. However, unless there is a need for comment β as, for example, in dealing with an extravagant submission by counsel β the wise course will often be not to do so17. Where the judge chooses to comment, the following statement of Brennan J in B v The Queen is to be kept in mind18: "[The comment] must exhibit a judicial balance so that the jury is not deprived 'of an adequate opportunity of understanding and giving effect to 14 Huynh v The Queen (2013) 87 ALJR 434; 295 ALR 624; [2013] HCA 6. 15 (2000) 199 CLR 620 at 637 [41] per Gaudron ACJ, Gummow, Kirby and Hayne JJ; [2000] HCA 3 and see Courtney-Smith (No 2) (1990) 48 A Crim R 49 at 55-56 per Gleeson CJ, Kirby P and Lusher AJ. 16 Pemble v The Queen (1971) 124 CLR 107; [1971] HCA 20. 17 RPS v The Queen (2000) 199 CLR 620 at 637 [42] per Gaudron ACJ, Gummow, 18 (1992) 175 CLR 599 at 605; [1992] HCA 68. Bell Nettle the defence and the matters relied upon in support of the defence'." (footnotes omitted) There were critical differences between M's and Castle's evidence. Regardless of the favourable view his Honour had formed of M's veracity and reliability, her alcohol and drug abuse and her history of mental health difficulties were matters which the defence were entitled to have fairly left for the jury's consideration. So, too, was the circumstance that M's initial account of how she knew that Gange was at home at the time of the shooting was one that could not be true. It would have been preferable for his Honour not to have expressed the view that M was a "fairly decent woman". The submission that the jury would have taken from the tenor of the summing-up that Castle's evidence should be summarily rejected is to be assessed taking into account the summing-up as a whole and the conduct of the parties. Castle was competently represented by counsel. The trial judge reminded the jury of Castle's case by reference to the submissions put by her counsel. The focus of those submissions was not the detail of Castle's evidence but the suggested improbability of features of the prosecution case and the unreliability of M's evidence. His Honour's summary of those submissions was comprehensive. Counsel did not submit that her case had not been fairly left for the jury's consideration or ask the trial judge to remind the jury of any part of her evidence. In the circumstances the Court of Criminal Appeal did not err in holding that Castle's defence was fairly left for the jury's consideration. The proviso The error which the Court of Criminal Appeal identified, that Pascoe's evidence of Bucca's statement was left as an admission when it was in fact exculpatory, gave rise in each case to a perceptible risk of a miscarriage of justice. This required the verdict to be set aside unless the Court of Criminal Appeal was satisfied that no substantial miscarriage of justice actually occurred19. As the Court of Criminal Appeal recognised, in making this determination it was necessary to consider the possible effect of the error on the outcome of the trial20. 19 Criminal Law Consolidation Act 1935 (SA), s 353(1); Weiss v The Queen (2005) 224 CLR 300 at 317 [44]; [2005] HCA 81. 20 R v Castle [2015] SASCFC 180 at [103]-[105] citing Gassy v The Queen (2008) 236 CLR 293 at 301 [18] per Gummow and Hayne JJ, 314-315 [60], [62]-[63] per Kirby J; [2008] HCA 18 and Baiada Poultry Pty Ltd v The Queen (2012) 246 CLR (Footnote continues on next page) Bell Nettle As the Court of Criminal Appeal also recognised, satisfaction that guilt was proved to the criminal standard did not require the conclusion that there had not been a substantial miscarriage of justice21. The Court of Criminal Appeal's conclusion that there was no substantial miscarriage of justice depended upon satisfaction that guilt was established beyond reasonable doubt and that the "admission" was unlikely to have had any influence on the verdicts22. It is a large step to conclude that a confession is unlikely to have influenced a jury's verdict notwithstanding that, apart from the admission, the prosecution presented a powerful circumstantial case. Here, the jury might have convicted on the strength of the admission alone in Bucca's case and largely on the strength of the admission in Castle's case23. The Court of Criminal Appeal's view that the admission was "overwhelmed" by the circumstantial case may be understood as reflecting a conclusion that apart from the admission the other evidence was of such strength that a reasonable jury properly instructed would inevitably have convicted the appellants and accordingly that no substantial miscarriage of justice actually occurred24. But what was left to the jury as an admission was, unequivocally, an exculpatory statement. The question was not whether the circumstantial case was so strong as to overwhelm the weight of an admission, but whether the jury might regard the exculpatory assertion as itself a sufficient basis to entertain a doubt as to the strength of the circumstantial case. The Court of Criminal Appeal considered that the natural limitations that apply to reasoning to guilt on the record in a case which turns on the assessment of oral evidence did not apply here because of the obvious falsity of Castle's evidence25. The Court of Criminal Appeal's view β that Castle's evidence was, in 92 at 104 [27]-[29] per French CJ, Gummow, Hayne and Crennan JJ; [2012] HCA 21 R v Castle [2015] SASCFC 180 at [105] citing Baiada Poultry Pty Ltd v The Queen (2012) 246 CLR 92 at 104 [27]-[29]. 22 R v Castle [2015] SASCFC 180 at [130]. 23 Domican v The Queen (1992) 173 CLR 555 at 565-566 per Mason CJ, Deane, Dawson, Toohey, Gaudron and McHugh JJ; [1992] HCA 13. 24 Weiss v The Queen (2005) 224 CLR 300 at 315 [37] per Gleeson CJ, Gummow, Kirby, Hayne, Callinan and Heydon JJ. 25 R v Castle [2015] SASCFC 180 at [106]. Bell Nettle light of the objective evidence, glaringly improbable β was open26. However, proof of guilt did not turn on the rejection of Castle's oral evidence alone. Proof of guilt, in the Court of Criminal Appeal's analysis at [3] and [5] in Bucca's case and at [1] in Castle's case, relied on M's disputed oral evidence. The telephone records and the CCTV footage from the Cadell Court premises provided a basis for concluding that the 911 telephone was with Gange throughout the course of the morning of 3 February, but they did not compel that conclusion. Gange had access to more than one mobile telephone and on occasions he used prepaid mobile telephones. The inference was open that he had used a telephone other than the 911 telephone to arrange the meeting acknowledged by Bucca in the text that read "[s]weet cu soon bro". Gange was involved in the illegal drug milieu and it was open to consider that he might be astute to ensure that he did not have with him, when engaging in criminal activity, any mobile telephone traceable to him. The reasonable possibility that Gange was the shooter was not excluded by the telephone records alone. It depended upon acceptance of M's evidence. So, too, did proof of Castle's liability on the extended joint criminal enterprise basis, as the Court of Criminal Appeal found, depend on acceptance of M's evidence of the discussion between Castle and Bucca on the evening preceding the killing. Notwithstanding the strength of the prosecution case, the Court of Criminal Appeal erred in determining that, despite the way Pascoe's evidence was left for the jury's consideration, in each case no substantial miscarriage of justice actually occurred. The natural limitations of proceeding on the record precluded a conclusion that guilt was proved beyond reasonable doubt27. The appeals must be allowed and an order for a new trial made. The prospect of a new trial makes it necessary to address Bucca's first ground, which contends that Pascoe's evidence of his possession of handguns was inadmissible. Pascoe's evidence of Bucca's possession of firearms Only a small number of firearms leave rifling marks consistent with those found on the bullets fired at the deceased. These include a Glock 17. M gave evidence, to which there was no objection, that two to three weeks before the shooting, Bucca had shown her and Gange a handgun, which each of them had 26 R v Castle [2015] SASCFC 180 at [107]-[126]. 27 Weiss v The Queen (2005) 224 CLR 300 at 316 [41]; Baini v The Queen (2012) 246 CLR 469 at 480 [29] per French CJ, Hayne, Crennan, Kiefel and Bell JJ; [2012] HCA 59. Bell Nettle handled. She drew a sketch of the firearm and she identified a photograph of a Glock 17 as depicting a firearm that was "very close" to the one that Bucca showed her. The gun that she described was black with a silver top. Pascoe's firearms evidence concerned an incident which occurred some months before the shooting. She was present on an occasion when Bucca showed her father three handguns. One handgun had a "long extension". The only description Pascoe gave of the other two handguns was that they were approximately the same size and black. In November 2014, Pascoe was shown photographs of a number of handguns. She identified one photograph as "similar" to the handgun with the long extension. This make of weapon could not have been the murder weapon. Nor was this weapon consistent with the weapon that M described. Pascoe did not identify any of the other handguns depicted in the photographs as being similar to the other two handguns that Bucca had shown to her father. Among the photographs that she was shown was a photograph of a Glock 17. Bucca objected to Pascoe's evidence, submitting that the occasion she described might have been seven or eight months before the shooting. Trial counsel conceded that either of the two handguns that did not have a long extension could not be excluded as the murder weapon. The trial judge was not asked, and did not give, reasons for admitting the evidence. His Honour merely recorded that he was "very firmly of the view that [Pascoe's evidence of the three handguns] is admissible" and that he did not propose to exclude the evidence in the exercise of discretion. The Court of Criminal Appeal considered that Pascoe's evidence of Bucca's possession of the handguns was "discreditable conduct evidence" within the meaning of s 34P(1) of the Evidence Act 1929 (SA). Evidence tending to suggest that a defendant has engaged in discreditable conduct, whether or not constituting an offence, other than the conduct constituting the offence cannot be used to suggest that the defendant is more likely to have committed the offence because he or she has engaged in discreditable conduct (the "impermissible use"). Discreditable conduct evidence is inadmissible for that purpose and for any purpose other than a permissible use under s 34P(2), which provides: "Discreditable conduct evidence may be admitted for a use (the permissible use) other than the impermissible use if, and only if β the judge is satisfied that the probative value of the evidence admitted for a permissible use substantially outweighs any prejudicial effect it may have on the defendant; and Bell Nettle in the case of evidence admitted for a permissible use that relies on a particular propensity or disposition of the defendant as circumstantial evidence of a fact in issue β the evidence has strong probative value having regard to the particular issue or issues arising at trial." The Court of Criminal Appeal said the evidence was adduced to prove Bucca's access to handguns, one of which might have been the murder weapon28. Its admission was subject to s 34P(2)(a), which required that its probative value for this use substantially outweigh any prejudicial effect it may have on Bucca's case29. In determining whether the evidence should be admitted under sub-s (2)(a) it was necessary to have regard to whether the permissible use could be kept sufficiently separate and distinct from the impermissible use, so as to remove any appreciable risk of it being used for the impermissible use30. The Court of Criminal Appeal considered that in the context of the issues at the trial the possession of a handgun or handguns by either Bucca or Gange was highly relevant31. It considered that Bucca's access to weapons of the same character as the murder weapon some months before the killing had probative value which substantially outweighed any prejudicial effect and it followed that the evidence had been rightly admitted. Bucca submits that the Court of Criminal Appeal erred in its estimate of the probative value of the evidence. The only weapon of which Pascoe was able to give any detail could not have been the murder weapon. Her description of the other two weapons was in such general terms as to be incapable of rationally affecting the probability of the existence of the fact in issue. Bucca also submits that the evidence was adduced to show "a propensity or tendency of some sort, such as a tendency to acquire (other) illegal firearms". The respondent does not concede that the evidence is "discreditable conduct evidence" within s 34P. This is because no evidence was adduced to establish that Bucca's possession of the weapons was unlawful. Otherwise the respondent supports the Court of Criminal Appeal's analysis. 28 R v Castle [2015] SASCFC 180 at [92]. 29 R v Castle [2015] SASCFC 180 at [90]. 30 Evidence Act 1929 (SA), s 34P(3). 31 R v Castle [2015] SASCFC 180 at [87]. Bell Nettle In the context of evidence which revealed that Bucca was associated with the illegal drug milieu, the inference was open that Bucca's possession of three handguns was unlawful. While being in possession of a thing may more aptly be characterised as a state of affairs32, it is not submitted that evidence that Bucca was unlawfully in possession of firearms is not evidence of conduct. The discreditable conduct which Pascoe's evidence tends to suggest Bucca has engaged in is the unlawful possession of firearms. It is not evidence that Bucca had a propensity to discharge firearms or to threaten to do so. The make and model of the handgun used to kill the deceased is unknown. Either of two handguns which Pascoe saw Bucca show to her father might have been the murder weapon. The fact that the prosecution could not prove that either weapon was the murder weapon did not deprive the evidence of probative value. Contrary to Bucca's submission, evidence that a person is in possession of an item that might have been used to commit the offence is relevant33. The central issue in Bucca's trial was proof that he was the shooter. The prosecution case was circumstantial. Handguns are not items that are widely available within the community. Evidence that Bucca had access to a handgun that might have been the murder weapon possessed considerable probative value. Although the issue of admissibility was not argued by reference to s 34P, it was, as the Court of Criminal Appeal held, open to conclude that the probative value of the evidence substantially outweighed any prejudicial effect it might have on the appellants. Orders For these reasons there should be the following orders. Matter No A24/2016 Appeal allowed. Set aside the order of the Court of Criminal Appeal of the Supreme Court of South Australia made on 3 December 2015, and in its place order that: 32 He Kaw Teh v The Queen (1985) 157 CLR 523 at 564 per Brennan J; [1985] HCA 33 Thompson and Wran v The Queen (1968) 117 CLR 313 at 316 per Barwick CJ and Menzies J; [1968] HCA 21. Bell Nettle the appeal be allowed; the appellant's conviction be quashed; and a new trial be had. Matter No A26/2016 Appeal allowed. Set aside the order of the Court of Criminal Appeal of the Supreme Court of South Australia made on 3 December 2015, and in its place order that: the appeal be allowed; the appellant's conviction be quashed; and a new trial be had. GAGELER J. The parties were agreed that the proviso in s 353(1) of the Criminal Law Consolidation Act 1935 (SA) is to be interpreted and applied in accordance with the principles stated in Weiss v The Queen34. They were less than agreed about what those principles are. It is not easy to reconcile all that was said by this Court in Weiss with all that has been said in subsequent cases in this Court about Weiss. This, however, is not the occasion to address that difficulty. The evidence wrongly left to the jury as a confession cannot be dismissed as inconsequential: that evidence was capable of being treated as having significant probative value. The reasoning of the plurality demonstrates that the other evidence properly admitted at the trial was not so strong that an appropriately instructed jury acting reasonably on the evidence properly before it and applying the correct onus and standard of proof would inevitably have convicted the appellants35. What in those circumstances cannot be excluded is a real chance that the confession evidence made the difference between the convictions that were actually recorded and the acquittals that might have occurred. That makes it impossible to conclude that no substantial miscarriage of justice actually occurred by reason of the evidence being left to the jury as a confession. Subject only to that observation, I agree with the reasoning of the plurality and the orders proposed. 34 (2005) 224 CLR 300; [2005] HCA 81. 35 Wilde v The Queen (1988) 164 CLR 365 at 371-372; [1988] HCA 6; Lindsay v The Queen (2015) 255 CLR 272 at 301-302 [86]; [2015] HCA 16. |
HIGH COURT OF AUSTRALIA ATTORNEY-GENERAL FOR THE STATE OF SOUTH AUSTRALIA APPELLANT AND THE CORPORATION OF THE CITY OF ADELAIDE & ORS RESPONDENTS Attorney-General (SA) v Corporation of the City of Adelaide [2013] HCA 3 27 February 2013 ORDER Appeal allowed. Set aside paragraph 1 of the orders of the Full Court of the Supreme Court of South Australia made on 10 August 2011 and, in its place, order that: the appeal to that Court be allowed; and the orders of the District Court of South Australia made on 25 November 2010 be set aside and, in their place, order that: application the 2 November 2009 be dismissed; and dated so much of the appeal of Caleb Corneloup by notice dated 28 July 2010 as sought to challenge the validity of By-law No 4 β Roads made by the Corporation of the City of Adelaide on 10 May 2004 be dismissed. On appeal from the Supreme Court of South Australia Representation M G Hinton QC, Solicitor-General for the State of South Australia with L K Byers for the appellant (instructed by Crown Solicitor (SA)) M J Roder SC with R F Gray for the first respondent (instructed by Norman Waterhouse Lawyers) The second respondent, C Corneloup, appeared in person G O'L Reynolds SC with J C Hewitt and G R Rubagotti for the third respondent (instructed by Banki Haddock Fiora) Interveners T M Howe QC with C D Bleby SC for the Attorney-General of the (instructed by Australian Government Commonwealth, Solicitor) intervening M G Sexton SC, Solicitor-General for the State of New South Wales with A M Mitchelmore for the Attorney-General for the State of New South Wales, intervening (instructed by Crown Solicitor (NSW)) S G E McLeish SC, Solicitor-General for the State of Victoria with A D Pound for the Attorney-General for the State of Victoria, intervening (instructed by Victorian Government Solicitor) G R Donaldson SC, Solicitor-General for the State of Western Australia with R B Phillips for the Attorney-General for the State of Western Australia, intervening (instructed by State Solicitor (WA)) G J D del Villar for the Attorney-General of the State of Queensland, intervening (instructed by Crown Law (Qld)) R Merkel QC with E M Nekvapil and N M Wood for the Human Rights Law Centre, as amicus curiae (instructed by DLA Piper Australia) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Attorney-General (SA) v Corporation of the City of Adelaide Constitutional law β Implied freedom of communication on government and political matters β Where by-law prohibited preaching and distributing printed matter on any road without permission β Whether by-law effectively burdened freedom of political communication β Whether by-law reasonably appropriate and adapted to achieving legitimate end in manner compatible with system of representative and responsible government. Local government β Where power to make by-laws "for the good rule and government of the area, and for the convenience, comfort and safety of its inhabitants" β Whether generally expressed by-law making power must be narrowly or restrictively construed β Whether by-law exceeded limitations on power delegated to local government under Local Government Act 1934 (SA) β Whether by-law complied with limitations and procedures prescribed by Local Government Act 1999 (SA) β Whether by-law was reasonable and proportionate exercise of by-law making power. Words and phrases β "could not reasonably have been adopted", "legitimate end", "licence", "political communication", "principle of legality", "proportionality". Constitution, ss 7, 24, 128. Electronic Transactions Act 2000 (SA), ss 9(1), 10(3). Local Government Act 1934 (SA), ss 667(1) 4 I, 667(1) 9 XVI. Local Government Act 1999 (SA), ss 4(1), 246(1)(a), 246(2), 248(1)(a), 249(4). By-law No 4 β Roads, pars 2.3, 2.8. Introduction Caleb Corneloup, the second respondent, is the President of an incorporated association known as "Street Church". Samuel Corneloup, the third respondent, describes himself as an "expositor of the Gospel". Each has preached his religious beliefs and associated political beliefs in the City of Adelaide ("the City"). Each has done so without permission from the Corporation of the City of Adelaide ("the Council"), which was required by By-law No 4, entitled "Roads". The third respondent was convicted in the Magistrates Court of South Australia on 27 July 20101 and fined $250. His appeal against that conviction is pending in the Supreme Court of South Australia. The second and third respondents, Street Church and a number of other persons are the defendants to an injunction proceeding commenced by the Council in the Supreme Court. The Council sought to restrain those defendants from preaching, canvassing, haranguing or distributing printed material within the area of the City, unless they held a permit to do so as required by pars 2.3 and 2.8 of By-law No 4. The injunction proceeding has also been adjourned, pending the outcome of the proceeding before this Court. On 2 November 2009 and 28 July 2010 respectively, the third respondent and the second respondent filed applications in the Administrative and Disciplinary Division of the District Court of South Australia seeking declaratory relief2. In the District Court they argued that pars 2.3 and 2.8 of By-law No 4 were invalid as they were outside the by-law making power conferred by the Local Government Act 1999 (SA) ("the 1999 Act"). They further argued that the paragraphs were invalid because they infringed the freedom of political communication implied from the Constitution of the Commonwealth of Australia. His Honour Judge Stretton found that those parts of par 2.3 of By-law No 4 which prohibited haranguing, canvassing and preaching on a road without a permit, and the whole of par 2.8, which prohibited distribution of literature, were beyond the by-law making power conferred by s 239 of the 1999 Act and s 667 of the Local Government Act 1934 (SA) ("the 1934 Act")3. His Honour found it 1 Adelaide City Council v Farnden, Bickle, Corneloup & Morrison unreported, Magistrates Court of South Australia, 27 July 2010. 2 The third respondent applied in relation to a differently numbered by-law but, in the event, the applications proceeded in the District Court on the basis that they involved a challenge to the validity of pars 2.3 and 2.8 of By-law No 4. 3 Corneloup v Adelaide City Council (2010) 179 LGERA 1 at 43 [162]β[163]. unnecessary to determine whether, if they were otherwise within power, the provisions of By-law No 4 infringed the implied freedom of political communication4. He made declarations of invalidity. The Council appealed to the Full Court of the Supreme Court. The appeal was dismissed5. Kourakis J, who wrote the judgment of the Court, with which Doyle CJ and White J agreed, held that the impugned provisions were a valid exercise of the power conferred by s 667(1)(9)(XVI) of the 1934 Act to make laws "for the convenience, comfort and safety" of the inhabitants of the City6. However, his Honour went on to hold that par 2.3, by prohibiting preaching, canvassing and haranguing on a road without a permit, infringed the implied freedom of political communication, as did the whole of par 2.87, and that the appeal should be dismissed. On 11 May 2012, this Court granted the Attorney-General for the State of South Australia, who had been a respondent to the proceedings in the Full Court, special leave to appeal against the judgment of the Full Court8. For the reasons that follow the appeal should be allowed. The proceedings in the District Court The jurisdiction of the District Court to hear the applications brought by the second and third respondents derived from s 276 of the 1999 Act9. That section creates a "Special jurisdiction" defined by reference to classes of proceedings which "may be taken before, and determined by, the District Court"10. They include "proceedings to try the validity of a by-law"11. The District Court has power in such proceedings to make an order "declaring a (2010) 179 LGERA 1 at 45β46 [175]β[176]. 5 Corporation of the City of Adelaide v Corneloup (2011) 110 SASR 334. (2011) 110 SASR 334 at 340β341 [22], 365β367 [118]β[129]. (2011) 110 SASR 334 at 373β375 [157]β[164]. [2012] HCATrans 107. 9 District Court Act 1991 (SA), s 8(3) provides that the Court, in its Administrative and Disciplinary Division, has the jurisdiction conferred by statute. 10 1999 Act, s 276(1). 11 1999 Act, s 276(1)(f). by-law to be invalid"12. Such proceedings may be brought by any person "with a material interest in the matter."13 The second and third respondents commenced their proceedings on the basis that each of them had "a material interest in the matter"14. Their standing was not in issue in this appeal. The challenge to the validity of pars 2.3 and 2.8 of By-law No 4 was based in part upon their alleged infringement of the freedom of political communication implied in the Constitution. The District Court was therefore exercising federal jurisdiction in a matter arising under the Constitution or involving its interpretation. That federal jurisdiction is conferred by s 39(2) of the Judiciary Act 1903 (Cth) as jurisdiction in a matter in which the High Court has jurisdiction, or can have jurisdiction conferred upon it pursuant to s 76 of the Constitution. The declaration made by the District Court was in the following terms: The words 'preaching', 'canvassing' and 'haranguing' in paragraph 2.3 of 'By-law No 4 β Roads' of the Corporation of the City of Adelaide are declared to be invalid and are severed from the By-law. Paragraph 2.8 of 'By-law No 4 β Roads' of the Corporation of the City of Adelaide is declared to be invalid and is severed from the By-law." The form of the declaration, which was left in place by the order of the Full Court dismissing the appeal from the District Court, leaves something to be desired. Individual words of a by-law have no legal operation and are not amenable to declarations of invalidity. Severance is not an act of remedial amputation carried out by the court. It is the application of a constructional rule15. The rule derived originally from the common law16. It is now reflected in 12 1999 Act, s 276(5)(e). 13 1999 Act, s 276(2)(d). Such proceedings may also be brought by a council, an elector or the Minister: 1999 Act, s 276(2)(a)β(c). 14 (2010) 179 LGERA 1 at 8 [12]β[14] per Stretton DCJ. 15 Pidoto v Victoria (1943) 68 CLR 87 at 110 per Latham CJ, Rich J agreeing at 115, 118 per Starke J, 125β126 per McTiernan J, 130β131 per Williams J; [1943] HCA 37. See generally Pearce and Argument, Delegated Legislation in Australia, 4th ed (2012), ch 29; cf Gans, "Severability as Judicial Lawmaking", (2008) 76 The George Washington Law Review 639. statutory provisions such as s 13 of the Acts Interpretation Act 1915 (SA)17, which applies to delegated legislation in South Australia. The effect of the declaration made by the District Court was clear enough and no point was taken about its form. It is necessary now to refer to the provisions of the 1934 and 1999 Acts relevant to the by-law making powers of the Council. The statutory frameworkβthe 1934 and 1999 Acts This appeal is concerned with the validity of a by-law made by the Council. The term "by-law" is not defined in either the 1934 Act or the 1999 Act. Lord Russell of Killowen CJ in Kruse v Johnson described a by-law as18: "an ordinance affecting the public, or some portion of the public, imposed by some authority clothed with statutory powers ordering something to be done or not to be done, and accompanied by some sanction or penalty for its non-observance." Today the term is used to describe delegated legislation by bodies having limited geographical jurisdiction and is "the expression most commonly used for the primary legislative instruments made by local government authorities."19 The 1999 Act operates concurrently with provisions of its predecessor, the 1934 Act, which continue in force. When the 1999 Act was enacted, significant portions of the Local Government (Implementation) Act 1999 (SA) ("the Implementation Act")20. Some elements of s 667 of the 1934 Act survived. Today, the section confers by-law making the 1934 Act were repealed by 16 Harrington v Lowe (1996) 190 CLR 311 at 328 per Brennan CJ, Dawson, Toohey, Gaudron, McHugh and Gummow JJ; [1996] HCA 8. 17 Section 13 provides that: "A statutory or other instrument made pursuant to a power conferred by or under an Act will be read and construed so as not to exceed that power, so that, where a provision of the instrument, or the application of a provision of the instrument to any person or circumstances, is in excess of that power, the remainder of the instrument, or the application of the provision to other persons and circumstances, is not affected." 18 [1898] 2 QB 91 at 96. 19 Pearce and Argument, Delegated Legislation in Australia, 4th ed (2012) at 4 [1.7]. 20 Implementation Act, s 6. powers on councils for a number of specific purposes. Relevantly to the present appeal, sub-s (1) provided: "Subject to this Act, a council may make by-laws for all or any of the following purposes: Nuisances and health for the prevention and suppression of nuisances; Miscellaneous XVI generally for the good rule and government of the area, and for the convenience, comfort and safety of its inhabitants." That is a combination of powers which has a mixed ancestry in the United Kingdom and colonial Australia, stretching back to the first half of the 19th century. The Implementation Act also inserted a new section 668 into the 1934 Act21. Section 668 provides that: "The Local Government Act 1999 applies to and in relation to by-laws made under this Act as if they were by-laws made under that Act." The Governor was empowered by the Implementation Act to repeal additional provisions of the 1934 Act, and that Act in its entirety, by proclamation22 and to confer new by-law making powers on local governments23. There has been no exercise of these powers relevant to this appeal. As enacted, the 1934 Act contained extensive provisions in relation to "Streets, Roads, and Public Places"24. They have mostly been repealed save for 21 Implementation Act, s 6(zk). 22 Implementation Act, s 46. 23 Implementation Act, s 35(1)(b)(ii) read with s 45. 24 1934 Act, Pt XVII. s 359 which authorises the council, by resolution, to exclude vehicles generally or vehicles of a particular class from a particular street, road or public place. Part 2 of Ch 11 of the 1999 Act is entitled "Roads". The term "road" is defined as25: "a public or private street, road or thoroughfare to which public access is available on a continuous or substantially continuous basis to vehicles or pedestrians or both and includesβ a bridge, viaduct or subway; or an alley, laneway or walkway". All public roads in the area of a council are vested in the council in fee simple under the Real Property Act 1886 (SA) 26. The 1999 Act prohibits the use of public roads for business purposes unless authorised by a permit27. There is provision for the regulation of moveable signs on roads28, the planting of vegetation29 and the depositing of rubbish or goods or any other substance on roads or in public places30. The provisions of both the 1934 Act and the 1999 Act support the proposition that the regulation of activities on and adjacent to roads and public places within a council area falls within the accepted responsibilities of local government in South Australia. Express power to make by-laws about the use of roads is found in s 239(1) of the 1999 Act. The by-laws made under that sub-section may be about the use of roads for a number of specific purposes including: soliciting for religious or charitable purposes; or 25 1999 Act, s 4(1). 26 1999 Act, s 208(1). 27 1999 Act, s 222(1). Examples of business purposes given in the Act include business activities carried on from kiosks or pie carts on the side of a road or the extension of a restaurant or cafe business to outside tables on a footpath or roadside. 28 1999 Act, ss 226 and 227. 29 1999 Act, s 232. 30 1999 Act, s 235. any other use in relation to which the making of by-laws is authorised by regulation." Section 239(2) of the 1999 Act provides that: "Subject to this Act, a by-law made under subsection (1) can regulate, restrict or prohibit the use of which it relates." Section 246(1)(a) of the 1999 Act provides that subject to that "or another Act" the council may make by-laws that "are within the contemplation of this or another Act". Section 246(2) provides that the council cannot make a by-law that a person "obtain a licence from the council to carry out an activity at a particular place unless the council has express power to do so under an Act." However, s 246(3) provides that subject to the 1999 Act, or another Act, a by-law made by the council may: operate subject to specified conditions; and be of general or limited application, and provide for exemptions". The second respondent, by a notice of contention, asserted that By-law No 4 infringed s 246(2) because the requirement for a "permission" constituted a requirement for a "licence" within the meaning of s 246(2). Absent any express power to license the activities otherwise prohibited by By-law No 4, By-law No 4 was beyond power. That submission should not be accepted. As Kourakis J observed, s 246(2) has to be read with s 246(3) so that the latter provision has work to do31. The ordinary English meaning of the word "licence" extends to a "formal permission" and "exemption"32. However, if extended to permissions and exemptions in this statutory context it would be inconsistent with s 246(3). As Kourakis J said, s 246(2) in its legislative and historical context is directed to controlling the powers of local governments to license business or like activities in particular places33. Provision for that kind of licensing was made in the 1934 Act. As enacted, that Act conferred power on local governments to license a variety of activities, including "noisy trades" (such 31 (2011) 110 SASR 334 at 368 [134]β[135]. 32 The Oxford English Dictionary, 2nd ed (1989), vol 8 at 890, "licence", senses 1a and 2a. 33 (2011) 110 SASR 334 at 368 [133]. as wood-cutting and boiler-making)34, horse bazaars and cattle markets35, chimney-sweeps36, The second respondent's contention that By-law No 4 infringed the limitation on the by-law making power imposed by s 246(2) should be rejected. ice cream carts37 and newsvendors38. The third respondent invoked in his amended notice of contention s 248(1) of the 1999 Act which provides: "A by-law made by a council must notβ exceed the power conferred by the Act under which the by-law purports to be made". That aspect of his notice of contention can also be dealt with immediately. The third respondent argued that compliance with s 248(1)(a) conditions the validity of any by-law. He pointed out, as is the fact, that By-law No 4, as gazetted, purported to be made under the 1999 Act. He submitted that the only by-law making powers conferred by that Act are those in ss 238-240. The appellant did not contend that they were capable of supporting By-law No 4. He relied upon s 667(1)(9)(XVI) of the 1934 Act. The third respondent submitted that as By-law No 4 was not authorised by ss 238-240 it was not supported by any source of power within the 1999 Act. The answer to that submission is found in s 246(1)(a) of the 1999 Act which confers on the Council power to make by-laws that are "within the contemplation of this or another Act" (emphasis added). Assuming that By-law No 4 was able to be authorised by s 667(1)(9)(XVI) of the 1934 Act, the power conferred by that provision was, within the meaning of s 246(1)(a), a power to make by-laws "that are within the contemplation of ... another Act". The third respondent's contention in reliance upon s 248(1) should be rejected. A further provision of the 1999 Act which was relied upon by the second respondent in his notice of contention was s 249(4), which requires certification of a proposed by-law by a legal practitioner before it is made by a council. The 34 1934 Act, ss 569 and 571. 35 1934 Act, s 669(2)(II). 36 1934 Act, s 669(6). 37 1934 Act, s 669(14). 38 1934 Act, s 669(16). second respondent contended that the Full Court erred in holding that the certification requirement had been met. Section 249(4) provides: "A council must not make a by-law unless or until the council has obtained a certificate, in the prescribed form, signed by a legal practitioner certifying that, in the opinion of the legal practitionerβ the council has power to make the by-law by virtue of a statutory power specified in the certificate; and the by-law is not in conflict with this Act." Regulation 19 of the Local Government (General) Regulations 1999 (SA) ("the Regulations") prescribes a form which requires the identification of the certifying practitioner by name and business address and that the practitioner sign the certificate. The by-law to be certified must be described in the body of the certificate. As set out in the judgment of Kourakis J, a legal practitioner engaged by the Council reviewed the proposed By-law No 4 in late April and early May 2004, and formed the opinion that the Council had the statutory power to make it and that it was not in conflict with the 1999 Act. A certificate of validity, which accorded with the prescribed form under the Regulations, was prepared and incorporated in an electronic document which set out the proposed by-law. The document was sent by the legal practitioner to an officer of the Council on 3 May 200439. The prescribed form made provision for the legal practitioner's signature, followed by the words "legal practitioner". The practitioner's signature did not appear in the electronic document, but his name did40. Section 9 of the Electronic Transactions Act 2000 (SA) ("the Electronic Transactions Act") provides that: If, under a law of this jurisdiction, the signature of a person is required, that requirement is taken to have been met in relation to an electronic communication ifβ a method is used to identify the person and to indicate the person's approval of the information communicated; and having regard to all the relevant circumstances at the time the method was used, the method was as reliable as was 39 (2011) 110 SASR 334 at 370 [146]. 40 (2011) 110 SASR 334 at 370 [146]. appropriate for the purposes for which the information was communicated; and the person to whom the signature is required to be given consents to that requirement being met by way of the use of the method mentioned in paragraph (a)." Kourakis J held that the provision of the electronic certificate by the legal practitioner to the Council, together with the statement of his name and accompanying email, sufficiently identified him and made it clear that he expected that the certificate of validity of By-law No 4 could be printed and put before the Council for the purpose of making By-law No 441. His Honour held that the provision of the certificate, albeit unsigned, unequivocally signified that the named legal practitioner held the view that By-law No 4 was valid and subscribed to the opinion required by the certificate although he had not signed In my respectful opinion, his Honour was correct in his application of s 9(1) of the Electronic Transactions Act and his conclusion that the requirements of s 249(4) and the Regulations, read with the Electronic Transactions Act, were met. The second respondent's contention to the contrary fails. The impugned by-law By-law No 4 β Roads was published in the South Australian Government Gazette on 27 May 200443. By-law No 4 was entitled: "CITY OF ADELAIDE BY-LAW MADE UNDER THE LOCAL GOVERNMENT ACT 1999 By-law No 4 β Roads FOR the management of roads vested in or under the control of the Council." Paragraph 2 of By-law No 4, under the heading "Activities Requiring Permission", provided, inter alia: 41 (2011) 110 SASR 334 at 371 [150]. 42 (2011) 110 SASR 334 at 371 [150]. 43 South Australian Government Gazette, No 44, 27 May 2004 at 1384β1385. "No person shall without permission on any road: Preaching and Canvassing preach, canvass, harangue, tout for business or conduct any survey or opinion poll provided that this restriction shall not apply to [a] designated area as resolved by the Council known as a 'Speakers Corner' and any survey or opinion poll conducted by or with the authority of a candidate during the course of a Federal, State or Local Government Election or during the course and for the purpose of a Referendum; 2.8 Distribute give out or distribute to any bystander or passer-by any handbill, book, notice, or other printed matter, provided that this restriction shall not apply to any handbill or leaflet given out or distributed by or with the authority of a candidate during the course of a Federal, State or Local Government Election or to a handbill or leaflet given out or distributed during the course and for the purpose of a Referendum". The term "road" has the same meaning as in the 1999 Act44. The reference to "permission" in par 2 of By-law No 4 must be read in the light of By-law No 1, entitled "Permits and Penalties". That by-law was made under the 1999 Act and provided, inter alia: Permits In any by-law of the Council, unless the contrary intention is the clearly permission of the Council given in writing. 'permission' means the word indicated, The Council may attach such conditions to a grant of permission as it thinks fit, and may vary or revoke such conditions or impose new conditions by notice in writing to the permit holder. 44 By-law No 4, par 1.6. 1.3 Any permit holder shall comply with every such condition. The Council may revoke such grant of permission at any time by notice in writing to the permit holder." Revocation of By-law No 4 By-law No 4 was revoked in 201145 and replaced by a by-law in similar terms in relation to preaching, canvassing and haranguing on roads46. It did not contain any provision equivalent to par 2.8 of By-law No 4 relating to the distribution of written materials. Despite the revocation, the appeal is not moot. There are two reasons for that. The first is that there are proceedings in the Supreme Court of South Australia, the outcome of which may be related to the outcome of this appeal. The third respondent has appealed to the Supreme Court against his conviction in the Magistrates Court of South Australia for breaching By-law No 4. There are also unresolved proceedings for an injunction in the Supreme Court brought by the Council against the second and third respondents and others. Both proceedings have been adjourned pending the outcome of this appeal. Further, a decision of this Court as to whether par 2.3 of By-law No 4 infringes the implied freedom of political communication is likely to be significant, if not determinative, of the question whether the like provision in the 2011 by-law is valid. The by-law making power Paragraphs 2.3 and 2.8 of By-law No 4 were found by the Full Court to be supported by s 667(1)(9)(XVI) of the 1934 Act. In his Honour's reasons for judgment, which included a review of the history of similar by-law making powers, Kourakis J favoured a broad view of s 667(1)(9)(XVI)47. His Honour further held that pars 2.3 and 2.8 were, subject to the implied freedom of political communication, a reasonable and proportional exercise of the by-law making power48. By their notices of contention, the second and third respondents submitted that pars 2.3 and 2.8 of By-law No 4 were not authorised by s 667(1)(9)(XVI). They argued that the specific and limited heads of power in other paragraphs of s 667(1) of the 1934 Act and s 239 of the 1999 Act were inconsistent with the 45 South Australian Government Gazette, No 36, 9 June 2011 at 2028. 46 South Australian Government Gazette, No 36, 9 June 2011 at 2034β2035. 47 (2011) 110 SASR 334 at 361 [98]. 48 (2011) 110 SASR 334 at 340β341 [22]. broad construction of s 667(1)(9)(XVI) found by the Full Court. Those contentions should be rejected. There is nothing novel about the language of s 667(1)(9)(XVI). The terms "good rule and government of the area" and "convenience, comfort and safety of its inhabitants" have a venerable ancestry. In the first Municipal Corporations Act (5 & 6 Wm IV, c 76), enacted in the United Kingdom in 1835, s 90 provided that: "it shall be lawful for the Council of any Borough to make such Bye Laws as to them shall seem meet for the good Rule and Government of the Borough, and for Prevention and Suppression of all such Nuisances as are not already punishable". A similar successor provision, s 23 of the Municipal Corporations Act 1882 (45 & 46 Vict, c 50), was judicially construed in 1896 as disclosing two purposes: that of good government and the suppression of nuisances49. The English courts took a "benevolent" approach to its construction50. It supported by-laws relating to conduct in public places including the use of indecent language or gestures51, singing or playing music52 and gambling53. The terms "good rule and government" and "suppression of nuisances", describing heads of by-law making power, found their way into local government statutes in the Australian colonies in the 19th century and in State statutes after federation. Griffith CJ in President &c of the Shire of Tungamah v Merrett54 said, of "good rule and government"55: "whatever interpretation is put upon it, [it] certainly includes any matter which the legislature have plainly said they think to be for the good rule and government of the municipality." 49 Mantle v Jordan [1897] 1 QB 248. 50 Kruse v Johnson [1898] 2 QB 91 at 99 per Lord Russell CJ; Thomas v Sutters [1900] 1 Ch 10 at 13 per Lindley MR, 16β17 per Sir FH Jeune, 18 per Romer LJ. 51 Mantle v Jordan [1897] 1 QB 248. 52 Kruse v Johnson [1898] 2 QB 91. 53 Thomas v Sutters [1900] 1 Ch 10. 54 (1912) 15 CLR 407 at 415; [1912] HCA 63. 55 As was then provided in s 197(34) of the Local Government Act 1903 (Vic). Speaking of the same head of power56 in Melbourne Corporation v Barry57, "It confers a power, not of extending the other powers, but of aiding them if need be or of making independent ordinances in matters ejusdem generis with the specific powers of the Act". (footnote omitted) That dictum was approved by Starke J in Williams v Melbourne Corporation59 but was not considered in the judgments of the other members of the Court. It was, in effect, applied by the Full Court of the Supreme Court of Victoria in Seeligson v City of Melbourne60. But, as noted in that case, there was no common characteristic to be found in the specific powers which defined the boundaries of the general power61. That is to say, there was no single genus of power. It was, however, legitimate to refer to any of the specific powers for guidance in a like case arising under the general power62. So in Leslie v City of Essendon63, relied upon here by the second and third respondents, a by-law prohibiting any person from singing or haranguing on a street or footway after being required to desist by a police or council officer, was held invalid. O'Bryan J thought that the "good rule and government" power in the Local Government Act 1928 (Vic) could be given no wider scope than indicated by Isaacs J in Barry64. Sholl J took the view that the power authorised by-laws which were machinery provisions for the better implementing of by-laws made under the specific powers and by-laws made on any subject of a character similar and related to that dealt with by a specific power and not by implication excluded 56 Local Government Act 1915 (Vic), s 197(37). 57 (1922) 31 CLR 174; [1922] HCA 56. 58 (1922) 31 CLR 174 at 194. 59 (1933) 49 CLR 142 at 147; [1933] HCA 56. 60 [1935] VLR 365. 61 [1935] VLR 365 at 368. 62 [1935] VLR 365 at 368. 63 [1952] VLR 222. 64 [1952] VLR 222 at 227β228. by its terms or that of other specific powers65. As appears below, that construction does not fit the language of s 667(1)(9)(XVI) of the 1934 Act. The earliest relevant South Australian statute was the Municipal Corporations Act 1861 (SA). It conferred a general power on councils to make "such by-laws as to them shall seem meet for the good rule and government of the city, and for the prevention and suppression of nuisances therein"66. Its successor, the Municipal Corporations Act 1880 (SA), created a power to make by-laws on 146 specific topics67, concluding with: "AND GENERALLY for more effectually regulating, observing, and carrying out all and every the powers and authorities by this Act given to Corporations, and for the good rule and government of the municipalityβ for the convenience, comfort, and safety of the inhabitants thereofβand for the prevention and suppression of nuisances therein." This appears to have been the first use of the term "convenience, comfort, and safety of the inhabitants" as a head of by-law making power in South Australia. The expressions "good rule and government" and "convenience, comfort, and safety" have continued in South Australian local government legislation as heads of by-law making power since then68. Early judicial consideration in South Australia of the "convenience, comfort, and safety" by-law making power in the Municipal Corporations Act 1890 (SA) gave it a broad construction. It was not to be limited to the prevention of common or public nuisances, but might support by-laws with respect to a wider range of conduct in a particular district according to its locality and character, and the occupations of its population69. The concepts at common law of common and public nuisances suffer from difficulties of coherence70. The difficulties are a product of their history. 65 [1952] VLR 222 at 235 and 238, see also at 247 per Coppel AJ. 66 Municipal Corporations Act 1861 (SA), s 146, incorporating by reference Sched K which set out specific matters on which by-laws could be made. 67 Municipal Corporations Act 1880 (SA), s 242. 68 Municipal Corporations Act 1890 (SA), s 314; Municipal Corporations Act 1923 (SA), s 504(1). 69 Bremer v District Council of Echunga [1919] SALR 288. 70 Spencer, "Public NuisanceβA Critical Examination", (1989) 48 Cambridge Law Journal 55. Nevertheless, they incorporate elements of annoyance, inconvenience, or hurt to the public71. By-laws may be made for the "convenience, comfort and safety" of the inhabitants of the City which prohibit or regulate conduct which would or could constitute a public nuisance. Such a by-law would, in any event, fall within the specific head of power to make by-laws for the prevention and suppression of nuisances in s 667(1)(4)(I). On its face the scope of the "good rule and government" power would also authorise by-laws which prohibit or regulate analogous conduct. By-laws to regulate the places, times and manner of conduct which, while not constituting a nuisance, may affect the use and enjoyment of roads and public places by members of the public, would fall within the scope of the subject matter of the power. In Lynch v Brisbane City Council72, Dixon CJ considered the terms "the peace, comfort, β¦ welfare, β¦ convenience β¦ of the City and its inhabitants" and "the general good government of β¦ its inhabitants", which appeared in the City of Brisbane Acts 1924-1958 (Q). He characterised them as "wide and indefinite"73. Referring to a number of decisions of State Supreme Courts, his Honour said74: "they serve to show that a power to make by-laws for the good rule and government of a municipality is capable of a diversity of applications and is an effective power of control by ordinance." He referred with approval to Leslie v City of Essendon as a case in which a general power was preceded by enumerated specific heads of power. In the City of Brisbane Acts, the general good government provision began with the words "Without limiting the generality of its powers". Dixon CJ said of the words of "They give a power to lay down rules in respect of matters of municipal concern, matters that have been reasonably understood to be within the province of municipal government because they affect the welfare and good government of the city and its inhabitants. The words are not to be applied without caution nor read as if they were designed to confide to the 71 R v Rimmington [2006] 1 AC 459 at 467β471 [5]β[12] per Lord Bingham of Cornhill. 72 (1961) 104 CLR 353; [1961] HCA 19. 73 (1961) 104 CLR 353 at 362, McTiernan and Fullagar JJ agreeing at 365. 74 (1961) 104 CLR 353 at 363. 75 (1961) 104 CLR 353 at 364. city more than matters of local government. They express no exact limit of power but, directed as they are to the welfare and good government of a city and its inhabitants, they are not to be read as going beyond the accepted notions of local government." What was said in Lynch by Dixon CJ may have been little more than a particular application of the general proposition that a statutory power must be exercised having regard to the scope, object and subject matter of the Act by which the power is conferred76. The Supreme Court of South Australia in subsequent cases treated Lynch as supporting a more liberal view of the "good rule and government" head of power than had been envisaged by Isaacs J77. In the Full Court in the present proceedings, Kourakis J adopted that wide view. His Honour held that the specific powers conferred by the 1934 Act elucidate and inform the denotation of "the convenience power". His Honour did not think it necessary for the subject matter of a by-law made pursuant to the convenience power to be strictly analogous to the subject matter of one or more of the specific powers. He said78: "The question is whether the by-law made pursuant to the convenience power addresses a municipal purpose having regard to the subject matters of the specific powers." In the event, he held that79: "The convenience power extends to regulating conduct which, having regard to the considerations I have mentioned, is properly a matter of municipal concern and which, if left uncontrolled, will materially interfere with the comfort, convenience and safety of the city's inhabitants." In so holding, his Honour was, with respect, correct. 76 Water Conservation and Irrigation Commission (NSW) v Browning (1947) 74 CLR 492 at 504β505 per Dixon J; [1947] HCA 21; Oshlack v Richmond River Council (1998) 193 CLR 72 at 81 [21]β[22] per Gaudron and Gummow JJ; [1998] HCA 11; WR Carpenter Holdings Pty Ltd v Federal Commissioner of Taxation (2008) 237 CLR 198 at 211 [31]; [2008] HCA 33. 77 Samuels v Hall [1969] SASR 296 at 313β314 per Chamberlain J; Rice v Daire (1982) 30 SASR 560 at 573β574 per Bollen J. 78 (2011) 110 SASR 334 at 360 [96]. 79 (2011) 110 SASR 334 at 361 [98]. The powers conferred upon the Council by s 667(1)(9)(XVI) open with the word "generally" and are not expressed to be incidental or ancillary to specific heads of power. There is no textual warrant for so reading them. Like any wide statutory discretion, however, they must be exercised consistently with the subject matter, scope and purpose of the 1934 and 1999 Acts80. Local government is a creature of statute. The 1934 and 1999 Acts may be consulted to determine what are, in the words of Dixon CJ, "matters of municipal concern"81. There may also be matters which are not expressly mentioned in those Acts but which are within what Dixon CJ called "the accepted notions of local government."82 By-laws made under the general power may of course be ancillary to by-laws made under specific heads of power. They may also deal with related or analogous topics which, because of the relationship or analogy, can be characterised as matters of "municipal concern". Those examples are not intended to describe exhaustively the scope of the general power. They are, however, sufficient for the disposition of this appeal. The conclusion to be drawn from the preceding construction of s 667(1)(9)(XVI) is not difficult. Having regard to the extensive provisions relating to roads previously found in the 1934 Act and their successors in the 1999 Act, a by-law which regulates the conduct, on roads, of public advocacy of commercial or religious or political messages, is a by-law which deals with a matter of municipal concern. It is well within the subject matter covered by the rubrics "good rule and government of the area" and "the convenience, comfort and safety of its inhabitants." However, to say that pars 2.3 and 2.8 of By-law No 4 were within the subject matter of the by-law making power is not to answer the question whether they were a valid exercise of that power. The power and by-laws made under it must be construed by reference to the common law principle of legality, and the requirements of reasonableness and proportionality discussed below. Ultimately, the implied constitutional freedom of political communication imposes limits which affect construction. It is necessary first to consider the application of the principle of legality so far as it concerns the common law freedom of expression. 80 In relation to broad administrative discretions see Water Conservation and Irrigation Commission (NSW) v Browning (1947) 74 CLR 492 at 504β505 per Dixon J; Oshlack v Richmond River Council (1998) 193 CLR 72 at 81 [21]β[22] per Gaudron and Gummow JJ; WR Carpenter Holdings Pty Ltd v Federal Commissioner of Taxation (2008) 237 CLR 198 at 211 [31]. 81 Lynch v Brisbane City Council (1961) 104 CLR 353 at 364. 82 (1961) 104 CLR 353 at 364. The principle of legality Statutes are construed, where constructional choices are open, so that they do not encroach upon fundamental rights and freedoms at common law83. The common law presumption against the parliamentary intention to infringe upon such rights and freedoms has been described as an aspect of a "principle of legality" which governs the relationship between parliament, the executive and the courts84. The presumption is of long standing and has been restated over many years. It can be taken to be a presumption of which those who draft legislation, regulations and by-laws are aware. To apply it is to act conformably with legislative intention as explained by this Court in Lacey v Attorney-General (Qld)85. Relevantly, the construction of s 667(1)(9)(XVI) is informed by the principle of legality in its application to freedom of speech. Freedom of speech is a long-established common law freedom86. It has been linked to the proper functioning of representative democracies and on that basis has informed the application of public to claimed restraints upon publication of information87. It is never more powerful than when it involves the interest considerations 83 Potter v Minahan (1908) 7 CLR 277 at 304 per O'Connor J; [1908] HCA 63; Melbourne Corporation v Barry (1922) 31 CLR 174 at 206 per Higgins J; Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 523 per Brennan J; [1987] HCA 12; Bropho v Western Australia (1990) 171 CLR 1 at 18 per Mason CJ, Deane, Dawson, Toohey, Gaudron and McHugh JJ; [1990] HCA 24; Nationwide News Pty Ltd v Wills (1992) 177 CLR 1 at 43 per Brennan J; [1992] HCA 46; Coco v The Queen (1994) 179 CLR 427 at 436β437 per Mason CJ, Brennan, Gaudron and McHugh JJ; [1994] HCA 15. 84 Electrolux Home Products Pty Ltd v Australian Workers' Union (2004) 221 CLR 309 at 329 [21] per Gleeson CJ; [2004] HCA 40, citing R v Home Secretary; Ex parte Pierson [1998] AC 539 at 587, 589 per Lord Steyn. 85 (2011) 242 CLR 573; [2011] HCA 10. 86 Blackstone, Commentaries on the Laws of England, (1769), bk 4 at 151β152; Bonnard v Perryman [1891] 2 Ch 269 at 284 per Lord Coleridge CJ; R v Council of Metropolitan Police; Ex parte Blackburn (No 2) [1968] 2 QB 150 at 155 per Lord Denning MR; Wheeler v Leicester City Council [1985] AC 1054; Attorney- General v Guardian Newspapers Ltd (No 2) [1990] 1 AC 109 at 203 per Dillon LJ. 87 The Commonwealth v John Fairfax & Sons Ltd (1980) 147 CLR 39 at 52 per Mason J; [1980] HCA 44; Attorney-General v Times Newspapers Ltd [1974] AC 273 at 315 per Lord Simon of Glaisdale; Hector v Attorney-General of Antigua [1990] 2 AC 312 at 318. discussion and criticism of public authorities and institutions, be they legislative, executive or judicial88. An example of its strength in that context is the common law impediment to local authorities and public authorities suing for defamation89. The "paramount importance" accorded to freedom of expression and of criticism of public institutions has also played a part in the development of the principles of the law of contempt90. It played a part in the reasoning of this Court in Davis v The Commonwealth91 in the characterisation, for constitutional purposes, of legislation said to be incidental to a substantive head of power. It was also identified as a material consideration in similar reasoning adopted by Mason CJ in Nationwide News Pty Ltd v Wills92. On the question whether a law could be said to be reasonably proportional and therefore incidental to a head of power, "in determining whether that requirement of reasonable proportionality is satisfied, it is material to ascertain whether, and to what extent, the law goes beyond what is reasonably necessary or conceivably desirable for the achievement of the legitimate object sought to be attained and, in so doing, causes adverse consequences unrelated to the achievement of that object. In particular, it is material to ascertain whether those adverse consequences fundamental values traditionally protected by the common law, such as freedom of expression." (footnote omitted) infringement of in any result As discussed below, analogous reasoning applies to the determination whether a by-law is, or is capable of being, a reasonable and proportionate, and therefore valid, exercise of the by-law making power. Its effect upon the exercise of freedom of expression will be a material consideration. 88 Nationwide News Pty Ltd v Wills (1992) 177 CLR 1 at 79 per Deane and Toohey JJ, 101 per McHugh J. 89 Derbyshire County Council v Times Newspapers Ltd [1993] AC 534; Ballina Shire Council v Ringland (1994) 33 NSWLR 680. 90 Nationwide News Pty Ltd v Wills (1992) 177 CLR 1 at 34 per Mason CJ. 91 (1988) 166 CLR 79; [1988] HCA 63. 92 (1992) 177 CLR 1. 93 (1992) 177 CLR 1 at 30β31. through the principle of The common law freedom of expression does not impose a constraint upon the legislative powers of the Commonwealth or the States or Territories94. legality, and criteria of reasonable However, proportionality, applied to purposive powers, the freedom can inform the construction and characterisation, for constitutional purposes, of Commonwealth statutes. It can also inform the construction of statutes generally and the construction of delegated legislation made in the purported exercise of statutory powers. As a consequence of its effect upon statutory construction, it may affect the scope of discretionary powers which involve the imposition of restrictions upon freedom of speech and expression. The terms "preach", "canvass" and "harangue" used in par 2.3 of By-law No 4 were not defined. There was, however, little controversy about their ordinary meaning. The term "preach" means to advocate or inculcate asserted religious or moral truth and right conduct in speech or in writing95. The term "canvass" refers to the soliciting of votes, subscriptions and opinions from a district or a group of people96. The term "harangue" may refer to "passionate, vehement speech; noisy and intemperate address". It can also refer to "any long, declamatory or pompous speech"97. The appellant contended for the first meaning. That contention should be accepted as it fits more readily with the text and context of By-law No 4. The communications which are covered by By-law No 4 are not private discussions with willing listeners. There is little point in preaching only to the converted. Consistently with the principle of legality, pars 2.3 and 2.8 should be construed as concerned only with communications which are directed, without discrimination, to willing and unwilling recipients. That construction accords with their text. Each category of conduct covered by pars 2.3 and 2.8 of By-law No 4 is a mode of unsolicited public communication in a class of locations vested in the Council and for which the Council has statutory responsibilities. By-law No 4 did not purport to proscribe or regulate the content of any communication. That is not to say that the content of a proposed communication will always be irrelevant to the grant or withholding of permission under By-law No 4. It could, 94 Although as Brennan J observed in Nationwide News, "constitutional questions should be considered and resolved in the context of the whole law, of which the common law ... forms not the least essential part": (1992) 177 CLR 1 at 45, quoting Dixon, "The Common Law as an Ultimate Constitutional Foundation", (1957) 31 Australian Law Journal 240 at 245. 95 Macquarie Dictionary, 3rd ed (1997) at 1683. 96 Macquarie Dictionary, 3rd ed (1997) at 326. 97 Macquarie Dictionary, 3rd ed (1997) at 972. however, never be a relevant consideration that the Council or its officers disagreed with, or disapproved of, that content. As previously observed, the subject matter of By-law No 4 and the discretion which it created to grant permissions to engage in the conduct which it otherwise proscribed, had to fall within the scope of matters of municipal concern or "accepted notions of local government". Control of the expression of religious or political opinions per se is not within that subject matter. According to the circumstances, control sub modo may be within it. By-law No 4, so understood, involved the least interference with freedom of expression that its language could bear. By parity of reasoning, the power conferred by s 667(1)(9)(XVI), construed in accordance with the principle of legality in its application to the common law freedom of expression, was sufficient to support the impugned by-law. That leaves for consideration the question whether pars 2.3 and 2.8 were unreasonable or not reasonably proportional exercises of that power. Those questions were raised by the third respondent's amended notice of contention. It is only after those questions are answered that it is necessary to have regard to whether, as the Full Court found, pars 2.3 and 2.8 infringed the implied freedom of political communication. Reasonableness and reasonable proportionality The third respondent by his amended notice of contention asserted that the impugned provisions of By-law No 4 were "an unreasonable exercise" of the by- law making power and "not a reasonably proportionate or proportionate exercise of the power". Those grounds invoke criteria of invalidity which have overlapping histories and applications. They define limits on the by-law making power. A high threshold test for unreasonableness invalidating delegated legislation was set by the Privy Council in Slattery v Naylor98. Their Lordships spoke of a "merely fantastic and capricious bye-law, such as reasonable men could not make in good faith"99. That criterion did not invite judicial merits review of delegated legislation. Nor has unreasonableness ever been so regarded in this Court. As their Lordships said, a by-law would not be treated as unreasonable "merely because it does not contain qualifications which commend themselves to the minds of judges."100 In Kruse v Johnson101, Lord Russell CJ accorded a particular respect to the authority conferred on public representative 98 (1888) 13 App Cas 446. 99 (1888) 13 App Cas 446 at 452. 100 (1888) 13 App Cas 446 at 453. bodies in making delegated legislation which would not necessarily inform consideration of validity today. However, he did not exclude from review by- laws "partial and unequal in their operation" or "manifestly unjust" or involving "such oppressive or gratuitous interference with the rights of those subject to them as could find no justification in the minds of reasonable men"102. The high threshold approach to invalidating unreasonableness was reflected early in the life of this Court in Widgee Shire Council v Bonney103, where Griffith CJ, after referring to Slattery v Naylor and Kruse v Johnson, said104: "The existence of a power and the expediency of its exercise are quite different matters. The question of the existence of the power can always be determined by a Court of law. But, in my opinion, the expediency of the exercise of a power is not a matter for determination by a Court." The reasoning of Isaacs J was to similar effect, although he specifically referred to the limiting case formulated in Slattery v Naylor105. All the Justices treated unreasonableness, so understood, as going to power. The point was made plainly "Questions as to the validity of by-laws really come under the ordinary principles applicable to powers; and when it is said that a by-law is unreasonable, and therefore invalid, what is really meant is that the provisions in the by-law cannot reasonably be regarded as being within the scope or ambit or purpose of the power. The language used in Courts of equity with regard to powers seems to me to be more appropriate, and to conduce to greater clearness of thought." This Court continued to treat invalidating unreasonableness, in relation to delegated legislation, in a limiting high threshold sense concerned with "the 102 [1898] 2 QB 91 at 99β100, see also at 104 per Sir FH Jeune. 103 (1907) 4 CLR 977; [1907] HCA 11. 104 (1907) 4 CLR 977 at 982β983. 105 (1907) 4 CLR 977 at 986. 106 (1907) 4 CLR 977 at 989. contemplated ambit of power."107 In Williams v Melbourne Corporation, "Although in some jurisdictions the unreasonableness of a by-law made under statutory powers by a local governing body is still considered a separate ground of invalidity, in this Court it is not so treated." (footnotes omitted) In Brunswick Corporation v Stewart109 Starke J adopted the language of the Privy Council in Slattery in distinguishing between a "drastic" provision and one which was "so capricious and oppressive that no reasonable mind can justify it."110 Williams J in the same case adopted the language of Lord Russell CJ in Kruse v Johnson, equating unreasonableness in a by-law with "such oppressive or gratuitous interference with the rights of those who are subject to it as could find no justification in the minds of reasonable men"111. It is logically possible that the limits defined by the content of a general power may intersect with the limits imposed upon it by the requirement that its exercise not be unreasonable. Such an intersection was apparent in Clements v Bull112. A majority of the Court held invalid a regulation purportedly made with respect to "[t]he improvement and management of the port" under s 138(i) of the Melbourne Harbor Trust Act 1928 (Vic)113. The regulation made it an offence to "[h]old any meeting or address any assemblage within the Port without the consent of the Commissioners in writing"114. Fullagar J, with whom Webb J generally agreed115, held the regulation invalid as enacting a prohibition extending to acts or things "which cannot reasonably be regarded as the concern 107 Melbourne Corporation v Barry (1922) 31 CLR 174 at 189 per Isaacs J. 108 (1933) 49 CLR 142 at 154, referring to McCarthy v Madden (1914) 33 NZLR 109 (1941) 65 CLR 88; [1941] HCA 7. 110 (1941) 65 CLR 88 at 98. 111 (1941) 65 CLR 88 at 99. 112 (1953) 88 CLR 572; [1953] HCA 61. 113 (1953) 88 CLR 572 at 576 per Williams ACJ and Kitto J. 114 (1953) 88 CLR 572 at 583 per Taylor J. 115 (1953) 88 CLR 572 at 579. of a corporation charged with the management of a port or harbour."116 His Honour said that "[t]he case, indeed, well illustrates ... the relevance, and the only relevance, of 'unreasonableness' in relation to the validity of a by-law."117 The regulation in that case, because it covered the area of the port, would have extended to meetings and assemblages for any purpose in private homes or buildings or otherwise on private lands within the port118. Williams ACJ and Kitto J, in dissent, found a connection between the regulation and the efficient performance of the functions of the port119. They observed, referring to Brunswick Corporation, that a regulation might be held invalid on the ground that no reasonable mind could justify it by reference to the purposes of the power, but characterised that criterion as "only a way of stating the conclusion that no real connection with the purposes of the power can be seen."120 In Shanahan v Scott121, the Court considered limitations on a very general power to make regulations "providing for all or any purposes ... necessary or expedient for the administration of the Act or for carrying out the objects of the Act."122 Such a power, it was said, would not support "attempts to widen the purposes of the Act, to add new and different means of carrying them out or to depart from or vary the plan which the legislature has adopted to attain its ends."123 In Minister for Resources v Dover Fisheries Pty Ltd124, Gummow J, considering a similarly worded regulation-making power, said of the indicia of invalidity identified in Shanahan v Scott that125: 116 (1953) 88 CLR 572 at 581. 117 (1953) 88 CLR 572 at 582. The reference to a "by-law" should in that case have been a reference to a regulation. 118 (1953) 88 CLR 572 at 580 per Webb J. 119 (1953) 88 CLR 572 at 578β579. 120 (1953) 88 CLR 572 at 577. 121 (1957) 96 CLR 245; [1957] HCA 4. 122 (1957) 96 CLR 245 at 250 per Dixon CJ, Williams, Webb and Fullagar JJ. 123 (1957) 96 CLR 245 at 250 per Dixon CJ, Williams, Webb and Fullagar JJ. 124 (1993) 43 FCR 565. 125 (1993) 43 FCR 565 at 578. "These are indicia which assist in deciding the general question of whether the regulations in question are a reasonable means of attaining the ends of the legislative delegation of power." The text of the regulation-making powers considered in Shanahan v Scott and in Dover Fisheries expressly raised the requirement that regulations made under them have a rational connection to the statutory purpose. Nevertheless, as the approach adopted by Gummow J suggested, the analysis in those cases is applicable to the general question whether a regulation is invalid for unreasonableness. Applying the general approach to "unreasonableness" set out in the preceding cases, and accepting its subsistence as a limit on delegated legislative power, the impugned provisions of By-law No 4 could not be said to have been invalid on that ground. Paragraphs 2.3 and 2.8 provided a rational mechanism for the regulation by proscription, absent permission, of conduct on roads which involves unsolicited communication to members of the public. They were not, on their face, capricious or oppressive. Nor did they represent a gratuitous interference with the rights of those affected by them. They provided a mechanism for protecting members of the public from gratuitous interference with their freedom to choose whether and, if so, when and where they would be the subject of proselytising communications. They were directed to modes and places of communication, rather than content. It was not necessary to the application of the high threshold test of unreasonableness to consider possible alternative modes of regulation. The criterion is not confined to purposive powers. invalid on account of unreasonableness. Paragraphs 2.3 and 2.8 were not the ground of contention asserting The difficulties of making out a challenge to validity on the basis of unreasonableness no doubt explain the focus in the third respondent's written submissions on lack of reasonable proportionality. Proportionality is not a legal doctrine. In Australia it designates a class of criteria used to determine the validity or lawfulness of legislative and administrative action by reference to rational relationships between purpose and means, and the interaction of competing legal rules and principles, including qualifications of freedoms. Proportionality criteria have been applied to purposive and incidental law- making powers derived from the Constitution and from statutes. They have also been applied in determining the validity of laws affecting constitutional guarantees, immunities and freedoms, including the implied freedom of political communication which is considered later in these reasons. constitutional guarantees, immunities or A high threshold test, which falls into the class of proportionality criteria, was applied to determine the validity of delegated legislation by Dixon J in Williams v Melbourne Corporation. His Honour, speaking of unreasonableness in the context of a purposive by-law making power, pointed out that although there might, on the face of it, be a sufficient connection between the subject of the power and that of the by-law126: "the true character of the by-law may then appear to be such that it could not reasonably have been adopted as a means of attaining the ends of the power. In such a case the by-law will be invalid, not because it is inexpedient or misguided, but because it is not a real exercise of the power." (emphasis added) (footnote omitted) Although a high threshold test, that formulation permitted greater judicial scrutiny than the test, approaching a criterion of irrationality, derived from Slattery v Naylor and Kruse v Johnson. It has been suggested that the difference in the result between the majority and the minority in Clements might be attributable to the majority's application of the test adopted by Dixon J in Williams, and the minority's preference for that of Starke J in Brunswick Corporation v Stewart127. In Coulter v The Queen128, which concerned the validity of procedural rules of the Supreme Court of South Australia, Mason CJ, Wilson and Brennan JJ, citing Williams, said129: "The relevant criterion of validity is not the fairness of the rules but whether they are a reasonable means of attaining the ends of the rule- making power". The formulation adopted by their Honours, however, suggests a lower threshold test than that adopted by Dixon J. In the event, as appears below, it is the high threshold test which prevails in the field of purposive delegated legislation. In the Tasmanian Dam Case130, Deane J adopted a high threshold proportionality test, similar to that stated by Dixon J, for a law purportedly made in the exercise of a purposive power under the Constitution. Such a law, he said, "must be capable of being reasonably considered to be appropriate and adapted to 126 (1933) 49 CLR 142 at 155, see also at 150 per Starke J, 158 per Evatt J, 159 per 127 Bayne, "Reasonableness, proportionality and delegated legislation", (1993) 67 Australian Law Journal 448 at 449. 128 (1988) 164 CLR 350; [1988] HCA 3. 129 (1988) 164 CLR 350 at 357. 130 The Commonwealth v Tasmania (1983) 158 CLR 1; [1983] HCA 21. achieving" its constitutional purpose131. His Honour characterised the test as one of "reasonable proportionality between the designated purpose or object and the means which the law embodies for achieving or procuring it."132 Applying the test so framed, the Court was not simply to substitute its view of what was appropriate and adapted to the objects of the law-making power for that of the legislative body. Similar formulations appeared in the judgments of Murphy and Brennan JJ133. Although it is not clear from the text of Mason J's judgment in that case, his Honour later regarded himself as having joined in that formulation134. Deane J explained the significance of the high threshold test in Richardson v Forestry Commission135. His Honour observed that it was not necessary for the Court to be persuaded that the particular provisions were in fact appropriate and adapted to the designated purpose or object. That was a matter for the Parliament. He said136: "it will, in my view, suffice if it appears to the Court that the relevant provisions are capable of being reasonably considered to be so appropriate and adapted". Almost identical formulations were adopted by four other Justices137. 131 (1983) 158 CLR 1 at 259. This imposed a higher threshold test than that expressed by Starke J in R v Poole; Ex parte Henry (No 2) (1939) 61 CLR 634 at 647; [1939] HCA 19. In relation to a regulation purporting to give effect to an international "that all means which are appropriate and are adapted for the enforcement of the Convention and are not prohibited or are not repugnant to or inconsistent with it are within the power." See also Airlines of New South Wales Pty Ltd v New South Wales (No 2) (1965) 113 CLR 54 at 86 per Barwick CJ; [1965] HCA 3. 132 (1983) 158 CLR 1 at 260. 133 (1983) 158 CLR 1 at 172 and 232. 134 Richardson v Forestry Commission (1988) 164 CLR 261 at 289 per Mason CJ and Brennan J; [1988] HCA 10. 135 (1988) 164 CLR 261. 136 (1988) 164 CLR 261 at 312. 137 (1988) 164 CLR 261 at 289 per Mason CJ and Brennan J, 303 per Wilson J, 345 In South Australia v Tanner138, which concerned the validity of delegated legislation, the majority noted, without demur, that the parties had accepted "the reasonable proportionality test of validity ... namely, whether the regulation is capable of being considered to be reasonably proportionate to the pursuit of the enabling purpose."139 Their Honours equated that test with the test enunciated by Dixon J in Williams and added that it was140: "in substance, whether the regulation goes beyond any restraint which could be reasonably adopted for the prescribed purpose." The test sets an appropriate limit on the exercise of purposive powers entrusted to a public authority to make delegated legislation. It gives due respect to the authority entrusted by the parliament in the law-making body. Historically, it can be regarded as a development of the high threshold "unreasonableness" test derived from the 19th century English authorities. It requires a rational relationship between the purpose for which the power is conferred and the laws made in furtherance of that purpose, whether it be widely or narrowly defined. The high threshold test for reasonable proportionality should be accepted as that applicable to delegated legislation made in furtherance of a purposive power. The proportionality test formulated by Dixon J in Williams, adopted by Deane J in the Tasmanian Dam Case, and accepted in Tanner, makes it clear that a reviewing court is not entitled to substitute its own view of what would be a reasonable law for that of the legislature or a body exercising delegated legislative power. So formulated, the criterion of reasonable proportionality can be regarded as an application of the unreasonableness criterion, adapted to a purposive law-making power. Indeed, in Tanner the majority echoed some of the language of Griffith CJ in Widgee Shire Council, when their Honours observed141: "It is not enough that the court itself thinks the regulation inexpedient or misguided. It must be so lacking in reasonable proportionality as not to be a real exercise of power." 138 (1989) 166 CLR 161; [1989] HCA 3. 139 (1989) 166 CLR 161 at 165 per Wilson, Dawson, Toohey and Gaudron JJ (footnote omitted). 140 (1989) 166 CLR 161 at 165 per Wilson, Dawson, Toohey and Gaudron JJ. 141 (1989) 166 CLR 161 at 168 per Wilson, Dawson, Toohey and Gaudron JJ. The use of the term "proportionality" in Tanner did not draw upon any novel or distinct theory of judicial review of delegated legislation. It was used to designate an evolved criterion defining the limits of a particular class of statutory power142. As discussed earlier in these reasons, "proportionality" is a term used to designate criteria, going to validity, of rational law-making and decision- making in the exercise of public power. Kiefel J, writing extra-curially, has referred to its application in such disparate fields as criminal responsibility, sentencing, the permissible scope of qualifications upon human rights and freedoms under constitutional and statutory charters, intrusions upon constitutional guarantees, immunities and freedoms, express and implied, as well as purposive law-making power143. Other fields in which it has been said proportionality operates include apportionment of liability in negligence cases144 and in the application of equitable estoppel against the "disproportionate making good of the relevant assumption"145. Each of its applications has its own history. The focus of these reasons so far has been on reasonable proportionality in its application to the validity of delegated legislation made in the exercise of a purposive power. A separate but related question arises about the proportionality criterion to be applied where, as in this case, it is contended that a law, which may be delegated legislation, impinges upon a constitutional guarantee, 142 In Minister for Resources v Dover Fisheries Pty Ltd (1993) 43 FCR 565 at 577, Gummow J suggested there was a different focus in the approach taken by the Court to proportionality according to whether it was applied to delegated legislation or to a law said to be invalid for constitutional reasons. 143 Kiefel, "Proportionality: A rule of reason", (2012) 23 Public Law Review 85. For an earlier summary of the Australian position see Selway, "The Rise and Rise of the Reasonable Proportionality Test in Public Law", (1996) 7 Public Law Review 144 Burmester and Bezzi, "Proportionality: a fashionable and dangerous doctrine, or an essential safeguard against abuse of power?", in Pearson (ed), Administrative Law: Setting the Pace or being left behind?, (1997) 145 at 156, citing Maranboy Pty Ltd v General Plastics Pty Ltd (1993) 6 BPR 13,253 and Carter Corporation Pty Ltd v Medway (1995) 11 NSWCCR 558. 145 The Commonwealth v Verwayen (1990) 170 CLR 394 at 413 per Mason CJ; [1990] HCA 39, cited in Burmester and Bezzi, "Proportionality: a fashionable and dangerous doctrine, or an essential safeguard against abuse of power?", in Pearson (ed), Administrative Law: Setting the Pace or being left behind?, (1997) 145 at 157. See also Kneebone, "A commentary on proportionality: protection of common law rights or 'chipping away at the Diceyan edifice'", in Pearson (ed), Administrative Law: Setting the Pace or being left behind?, (1997) 168. In Cunliffe v The Commonwealth146, Mason CJ immunity or freedom. distinguished the approach to be taken to the question whether a law falls within a head of constitutional legislative power on the one hand, and the validity of a law affecting the guarantee of a fundamental right or the implied freedom of communication on the other. His Honour said147: "In the case of the implication, as with a constitutional guarantee, this question is simply whether the burden or restriction is reasonably appropriate and adapted, in the court's judgment, to the legitimate end in view. In the context of whether a law is within power, the question is whether the law is capable of being reasonably considered to be appropriate and adapted to the end sought to be achieved." That distinction appears to have been applied, albeit not explicitly, by three Justices of this Court in Coleman v Power148 when they rejected a high threshold proportionality test in relation to laws affecting the implied freedom of political communication. McHugh J observed of the high threshold test149: "Although Justices of this Court have used that formulation on previous occasions, a majority of the Court has not accepted it in any case concerned with the constitutional protection of political communication." The distinction so made does not exclude the practical convergence of the tests in particular cases. A law which fails the high threshold test will necessarily fail the lower threshold test. The application of the proportionality test applicable to the implied freedom of political communication is considered later in these reasons. The third respondent contended that pars 2.3 and 2.8 of By-law No 4 were the power conferred by reasonably proportional exercise of not a s 667(1)(9)(XVI) of the 1934 Act because they: departed from or varied the plan of the enabling Acts; were gravely oppressive in their effect on the distribution of written matter and a large part of "normal speech" and the "ordinary incidents of human intercourse"; 146 (1994) 182 CLR 272; [1994] HCA 44. 147 (1994) 182 CLR 272 at 300, see also at 297. 148 (2004) 220 CLR 1 at 48 [87] per McHugh J, 78 [196] per Gummow and Hayne JJ; [2004] HCA 39. 149 (2004) 220 CLR 1 at 48 [87]. were "fundamentally directed at banning most forms of communication in most public places"; were so widely drawn as to extend to acts and things which could not reasonably be regarded as the concern of local government; had a substantial and unnecessary adverse effect on freedom of expression; and advanced the statutory purpose only marginally. Applying the high threshold test for reasonable proportionality, none of these matters either singly or collectively support a finding that By-law No 4 was not a valid exercise of the by-law making power. Some of the points made by the third respondent have already been considered in determining whether By- law No 4 was invalid for unreasonableness. The roads under the control of the Council, as was said in the Full Court, are a shared public resource150. Regulation of their use is necessary to optimise their benefit. The conduct proscribed, subject to permissions, could, if unregulated, have potentially significant effects upon the ability of people using the roads and public places to go about their business unimpeded and undistracted by preaching, haranguing and canvassing, and the unsolicited tender of literature from strangers. The availability of an alternative mode of regulation may be relevant in cases in which the question of want of reasonable proportionality is raised with respect to delegated legislation. In the constitutional context, the availability of alternative modes of regulation has been used to determine the existence of a prohibited purpose of discriminating against freedom of interstate trade and commerce, contrary to s 92 of the Constitution151, and for the purpose of determining the validity of a legislative burden on the implied freedom of political communication152. It suffices to say that, having regard to the high threshold of reasonable proportionality going to the validity of delegated legislation, this approach requires caution. Counterfactual explorations run the risk of descending to a lower level test and second-guessing the merits of the 150 (2011) 110 SASR 334 at 365 [118] per Kourakis J. 151 Castlemaine Tooheys Ltd v South Australia (1990) 169 CLR 436 at 471β472 per Mason CJ, Brennan, Deane, Dawson and Toohey JJ; [1990] HCA 1. See also North Eastern Dairy Co Ltd v Dairy Industry Authority of NSW (1975) 134 CLR 559 at 616 per Mason J; [1975] HCA 45; Betfair Pty Ltd v Western Australia (2008) 234 CLR 418 at 479 [110] per Gleeson CJ, Gummow, Kirby, Hayne, Crennan and Kiefel JJ; [2008] HCA 11. 152 Coleman v Power (2004) 220 CLR 1 at 53 [100] per McHugh J. delegated legislation. In any event, the utility of the possible alternatives in this case is not obvious, and certainly not obvious enough to support an invalidating characterisation of By-law No 4 as lacking "reasonable proportionality". A hypothetical restriction on preaching, canvassing, haranguing or distributing literature imposed by reference to criteria such as time and place, and/or minimum distances between persons engaging in such activities, would raise questions of administration, enforcement and supervision. Courts are not in a position to make comparative judgments on such issues, particularly where they may involve costs and the allocation of resources upon which there may be competing claims. Paragraphs 2.3 and 2.8 of By-law No 4, on the face of it, served legitimate ends in terms of the regulation of the public use of roads and public places. Having regard to the class of conduct and the class of locations in which they applied, they were capable of being considered reasonably appropriate and adapted to support that end. The contention that pars 2.3 and 2.8 were invalid as not reasonably proportionate exercises of the by-law making power fails. The implied freedom of political communication It is not necessary in order to dispose of this appeal to embark upon any extended exegesis of the implied freedom of political communication. The parties were on common ground as to the test to be applied in determining whether the freedom was infringed by By-law No 4. The test adopted by this Court in Lange v Australian Broadcasting Corporation153, as modified in Coleman v Power154, involves two questions, the terms of which are settled155: Does the law, in its terms, operation or effect, effectively burden freedom of communication about government or political matters? If the law effectively burdens that freedom, is the law nevertheless reasonably appropriate and adapted to serve a legitimate end in a manner which is compatible with the maintenance of the constitutionally prescribed system of representative and responsible government, and the procedure prescribed by s 128 of the Constitution for submitting a proposed amendment of the Constitution to the informed decision of the people? 153 (1997) 189 CLR 520; [1997] HCA 25. 154 (2004) 220 CLR 1. 155 Wotton v Queensland (2012) 246 CLR 1 at 15 [25] per French CJ, Gummow, Hayne, Crennan and Bell JJ; [2012] HCA 2. The answer to the first question in this case is yes. It was not in dispute. The appellant accepted in his written submissions that pars 2.3 and 2.8 of By-law No 4 are capable of effectively burdening communications about political matters in certain circumstances. He accepted that some "religious" speech may also be characterised as "political" communication for the purposes of the freedom. The concession was proper. Plainly enough, preaching, canvassing, haranguing and the distribution of literature are all activities which may be undertaken in order to communicate to members of the public matters which may be directly or indirectly relevant to politics or government at the Commonwealth level. The class of communication protected by the implied freedom in practical terms is wide156. threshold proportionality test for reasons which also satisfy For reasons already expressed, however, the answer to the second question is yes. Paragraphs 2.3 and 2.8 of By-law No 4 are reasonably appropriate and adapted to serve the legitimate end of the by-law making power. They meet the high the proportionality test applicable to laws which burden the implied freedom of political communication. They are confined in their application to particular places. They are directed to unsolicited communications. The granting or withholding of permission to engage in such activities cannot validly be based upon approval or disapproval of their content. The restriction does not apply to a designated area known as "Speakers Corner". Nor does it apply to surveys or opinion polls conducted, or literature distributed, by or with the authority of a candidate during the course of a federal, State or local government election, or during the course and for the purpose of a referendum. In the circumstances, pars 2.3 and 2.8 of By-law No 4 are reasonably adapted to serve a legitimate end in a manner which is compatible with the maintenance of the constitutionally prescribed system of representative and responsible government and the procedure prescribed by s 128 of the Constitution for submitting a proposed amendment to the Constitution to the informed decision of the people. In finding to the contrary, the Full Court was in error and the appeal should be allowed. I agree with the orders proposed by Hayne J. 156 Hogan v Hinch (2011) 243 CLR 506 at 543β544 [49] per French CJ; [2011] HCA 4; see also Theophanous v Herald & Weekly Times Ltd (1994) 182 CLR 104 at 123β125 per Mason CJ, Toohey and Gaudron JJ; [1994] HCA 46; Levy v Victoria (1997) 189 CLR 579 at 594β595 per Brennan CJ, 613β614 per Toohey and Gummow JJ, 622β624 per McHugh J, 638β642 per Kirby J; [1997] HCA 31; cf APLA Ltd v Legal Services Commissioner (NSW) (2005) 224 CLR 322 at 351 [28]β[29] per Gleeson CJ and Heydon J; [2005] HCA 44. Hayne HAYNE J. Caleb and Samuel Corneloup (the second and third respondents) are members of "Street Church", an incorporated association the objects of which include preaching about the Christian religion in the streets of Adelaide. A by-law made by the Corporation of the City of Adelaide ("the Council") prohibited persons preaching on any road and distributing printed matter on any road to any bystander or passer-by without permission. The Corneloups wish to preach and give out printed material in Rundle Mall, a road in the central retail area of Adelaide which, for the most part, is open only to pedestrians. They claim that the by-law which prevented them doing so in Rundle Mall or other roads without permission is invalid. For the reasons that follow, this claim should be rejected. The by-law is valid. The impugned by-law On 10 May 2004 the Council made a by-law which bore the headings: "CITY OF ADELAIDE BY-LAW MADE UNDER THE LOCAL GOVERNMENT ACT 1999 By-law No 4βRoads FOR the management of roads vested in or under the control of the Council." Paragraph 1 of the by-law set out some definitions. The only one of present relevance is the definition of "road": "In this by-law ... 'road' has the same meaning as in the Local Government Act 1999". Section 4(1) of the Local Government Act 1999 (SA) ("the 1999 Act") defined "road" as: "a public or private street, road or thoroughfare to which public access is available on a continuous or substantially continuous basis to vehicles or pedestrians or both and includesβ a bridge, viaduct or subway; or an alley, laneway or walkway". There was no dispute that Rundle Mall falls within this definition of a "road". Paragraph 2 bore the heading "Activities Requiring Permission". So far as presently relevant, it provided that: "No person shall without permission on any road: Hayne Preaching and Canvassing preach, canvass, harangue, tout for business or conduct any survey or opinion poll provided that this restriction shall not apply to designated area as resolved by the Council known as a 'Speakers Corner' and any survey or opinion poll conducted by or with the authority of a candidate during the course of a Federal, State or Local Government Election or during the course and for the purpose of a Referendum; 2.8 Distribute give out or distribute to any bystander or passer-by any handbill, book, notice, or other printed matter, provided that this restriction shall not apply to any handbill or leaflet given out or distributed by or with the authority of a candidate during the course of a Federal, State or Local Government Election or to a handbill or leaflet given out or distributed during the course and for the purpose of a Referendum". It will be convenient to refer to these particular provisions of the by-law, which would have prevented the Corneloups preaching or distributing printed matter in Rundle Mall without permission at the times relevant to this appeal, as "the impugned provisions" and to the whole by-law as either "the impugned by-law" or simply "the by-law". The course of proceedings The Corneloups each brought separate proceedings in the District Court of South Australia, pursuant to s 276 of the 1999 Act, seeking in effect a declaration that the by-law is invalid. In the District Court, Judge Stretton held157 that parts of the impugned provisions exceeded the by-law making powers conferred on the Council by the Local Government Act 1934 (SA) ("the 1934 Act") and the 1999 Act and that the words "preach, canvass, harangue" in par 2.3 and the whole of par 2.8 should be severed158 from the by-law. The Council appealed to the Full Court of the Supreme Court of South Australia. That Court (Doyle CJ, White and Kourakis JJ) dismissed159 the 157 Corneloup v Adelaide City Council (2010) 179 LGERA 1. 158 (2010) 179 LGERA 1 at 44 [168]. 159 Corporation of the City of Adelaide v Corneloup (2011) 110 SASR 334. Hayne appeal. For the reasons given by Kourakis J, the Full Court concluded that the by-law was not invalid160 as beyond the terms of the by-law making power given by s 667(1) 9 XVI of the 1934 Act and was not invalid161 for want of compliance with limitations and by-law making procedures prescribed by the 1999 Act. But the Court held162 that the impugned provisions were inconsistent with the implied constitutional freedom of political communication and struck out163 "preach, canvass, harangue" from par 2.3 and the whole of par 2.8. By special leave, the Attorney-General for South Australia, who had intervened in the proceedings in the District Court and was a party to the appeal to the Full Court, appealed to this Court. In this Court, the Corneloups, between them, advanced three different bases for the invalidity of the impugned provisions. First, they submitted that neither the 1934 Act nor the 1999 Act empowered the Council to make the by-law. Second, Caleb Corneloup submitted that, if the Council had power to make the by-law, the procedural steps necessary to make it validly were not taken. Third, they submitted that, if the Council had power to make the by-law and if the Council took the necessary procedural steps to make it, the by-law infringes the implied constitutional freedom of political communication and for that reason is invalid. These reasons deal with the arguments in this order. The arguments about by-law making power The Corneloups contended that, contrary to the Full Court's decision, the impugned provisions were not a valid exercise of the power set out in s 667(1) 9 XVI of the 1934 Act or any other by-law making power. Four different arguments, advanced by one or both of the Corneloups, were said to lead to that conclusion. First, they submitted that, properly and narrowly construed, s 667(1) 9 XVI did not support the impugned by-law. Second, Samuel Corneloup submitted that the impugned provisions "are an unreasonable exercise of the power" set out in s 667(1) 9 XVI and "are not a reasonably proportionate or proportionate exercise" of that power. Third, the Corneloups submitted that the impugned by-law purported to be made under the 1999 Act and that, since ss 238-240 of the 1999 Act did not give power to make the impugned by-law, the by-law exceeded the power conferred by the Act under which it purported to be made. Fourth, Caleb Corneloup submitted that the 160 (2011) 110 SASR 334 at 361 [98], 367 [129]. 161 (2011) 110 SASR 334 at 368 [136], 371 [152]. 162 (2011) 110 SASR 334 at 375 [164]. 163 (2011) 110 SASR 334 at 376-377 [173]. Hayne impugned by-law required a person to obtain a licence to engage in the activities specified by the impugned provisions contrary to s 246(2) of the 1999 Act. Before examining this group of submissions, it is necessary to identify the provisions of the 1934 Act and the 1999 Act which confer relevant by-law making powers. The powers to make by-laws At the times relevant to this appeal, the Council's powers to make by-laws were found in both the 1934 Act and the 1999 Act. Section 668 of the 1934 Act provided that the 1999 Act "applies to and in relation to by-laws made under this Act as if they were by-laws made under that Act". The 1934 Act Section 667(1) of the 1934 Act gave a council constituted under the 1999 Act power to "make by-laws for all or any" of a list of purposes. The list was set out under five numbered headings: "Uses and licences" (3), "Nuisances and health" (4), "Animals" (5), "Streets, roads and footways" (7) and "Miscellaneous" (9). Under each heading, one or more separate purposes was set out and designated by a roman numeral. Argument in this appeal focused upon the power given by s 667(1) 9 XVI to make by-laws "generally for the good rule and government of the area, and for the convenience, comfort and safety of its inhabitants". This power was referred to by the Full Court and in argument in this Court as "the convenience power" and these reasons adopt that expression. It is also necessary to notice that s 667(1) 4 I gave power to make by-laws "for the prevention and suppression of nuisances". This power was referred to by the Full Court and in argument in this Court as "the nuisance power". The Attorney-General for South Australia submitted that the nuisance power, alone or together with the convenience power, supported the impugned by-law. Indeed, the Attorney-General submitted the Full Court's conclusion164 that the impugned provisions were not supported by the nuisance power, the Full Court did conclude that the impugned provisions were supported by not only the convenience power but also the convenience power operating in aid of the nuisance power. Given the conclusions reached about the convenience power in these reasons, it is unnecessary to pursue further any questions about the nuisance power. that, notwithstanding 164 (2011) 110 SASR 334 at 346 [44]. Hayne The 1999 Act Part 4 of Ch 11 (ss 238-240) of the 1999 Act gave power to a council constituted under that Act to make by-laws on three subjects: the control of access to and use of local government land (s 238), the use of roads (s 239) and the posting of bills (s 240). No party submitted that any of these powers supported the impugned provisions. Part 1 of Ch 12 (ss 246-253) of the 1999 Act provided more generally for the making of by-laws. Section 246 dealt with the power to make by-laws and provided, so far as presently relevant, that: "(1) Subject to this or another Act, a council may make by-lawsβ that are within the contemplation of this or another Act; or that relate to a matter in relation to which the making of by-laws is authorised by the regulations under this or another Act. (2) A council cannot make a by-law that requires that a person obtain a licence from the council to carry out an activity at a particular place unless the council has express power to do so under an Act." Section 246(2) was the foundation for Caleb Corneloup's submission that the impugned by-law impermissibly requires a person to obtain a licence to engage in the activities specified by the impugned provisions. Section 248 set out some rules relating to by-laws. Relevantly, s 248(1)(a) provided that a by-law made by a council must not exceed the power "conferred by the Act under which the by-law purports to be made". Section 248(1)(a) was the foundation for the Corneloups' submission that the impugned by-law is invalid because it purported to be made under an Act (the 1999 Act) which did not in fact support its making. It is convenient to consider, and reject, those submissions that were based on s 246(2) and s 248(1)(a) before turning to the issues on which argument in this Court focused. Challenge to validity based on s 246(2) Caleb Corneloup pressed a submission also made in the Full Court that the by-law required a person to obtain a licence from the Council to carry out the activities regulated by the by-law contrary to s 246(2). As already noted, s 246(2) provided that a council cannot make a by-law that requires a person to "obtain a licence from the council to carry out an activity at a particular place unless the council has express power to do so under an Act". The Full Court Hayne concluded165 that the word "licence" in this provision "does not include the mere grant of permission to do an act or engage in certain conduct" but instead means a licence for a fee to engage in activity at a particular place. In this Court, Caleb Corneloup submitted that the ordinary meaning of "licence" includes the giving of "permission" and for that reason the by-law imposed a licensing requirement. Caleb Corneloup's submission must be rejected. Although the ordinary meaning of "licence" may include the granting of a permission, the Full Court was right to hold166 that the statutory context of s 246(2), and in particular the provisions of s 246(3), demonstrate that "licence" has a more confined meaning in s 246(2). The by-law did not require a person to obtain a "licence" to carry out the activity regulated by the by-law for the purposes of s 246(2) of the 1999 Act. Challenge to validity based on s 248(1)(a) Because s 248(1)(a) of the 1999 Act referred to "the Act under which the by-law purports to be made", some attention was given in argument to whether the impugned provisions were properly to be seen as made under the 1934 Act or the 1999 Act. Samuel Corneloup's submission proceeded in three steps. First, he submitted that the stated source of power in a by-law must support the making of that by-law. No party submitted (and it is not to be supposed) that s 248(1)(a) required enumeration of every power that was or could be relied on as enabling the making of a particular by-law. Second, he observed that the heading to the impugned by-law said it was "made under" the 1999 Act. And third, he submitted that the impugned by-law must be invalid because no party submitted that any of the by-law making powers given by ss 238-240 of the 1999 Act supported the impugned by-law. It is not necessary to decide whether incorrectly identifying a source of power to make a particular by-law would invalidate it. It is not necessary to do so because the impugned by-law rightly recorded that it was made under the 1999 Act. Assuming that the by-law was supported by s 667(1) of the 1934 Act (a proposition which is considered below), the effect of s 246(1)(a) of the 1999 Act is that the by-law is also made under the 1999 Act. Section 246(1)(a) of the 1999 Act gave councils power to make by-laws "within the contemplation of ... another Act". One kind of by-law which s 246(1)(a) thus empowered a council to make was a by-law "within the contemplation of" the 1934 Act (and, more particularly, s 667(1) of that Act). 165 (2011) 110 SASR 334 at 368 [131]-[136]. 166 (2011) 110 SASR 334 at 368 [134]-[135]. Hayne The submission of Samuel Corneloup, that s 246(1)(a) did not confer any by-law making power and should be treated as no more than a preamble or recital to the rules set out in the other sub-sections of s 246, should be rejected. Section 246(1) conferred by-law making power. It used the same language as those other provisions167 of the 1999 Act which it was accepted did confer by-law making power: "a council may make by-laws" on the subjects identified in the provision. And contrary to the submission of Samuel Corneloup, reading s 246(1) as conferring by-law making power does not render s 248(1)(a) nugatory. That provision continues to operate according to its terms. A by-law made under s 246(1)(a) (because it is contemplated by another Act) must, in accordance with s 248(1)(a), not exceed the power conferred by s 246(1)(a) (and through it, the other Act). The challenge to validity based on s 248(1)(a) fails. Assuming that the impugned by-law is supported by the 1934 Act (and in particular the convenience power), it is also a by-law made under the 1999 Act. It is to that question which these reasons now turn. The convenience power A narrow construction? The convenience power is expressed in very wide terms. The thrust of the Corneloups' submissions was that it should be read down and not given effect according to its terms. But what narrower construction could or should be given to the convenience power was never articulated with any specificity. Instead, two arguments were advanced. The first took the form of a negative proposition: the convenience power, read properly, does not support the impugned provisions. The second was that the impugned provisions were either an "unreasonable" exercise of the power, or not a "reasonably proportionate" or "proportionate" exercise of the power. Because this second argument was advanced as a separate ground for invalidity it is better to give it separate consideration below. For the moment, attention will be given to the first of the arguments. Much emphasis was given to two decisions of this Court168 and one of the Supreme Court of Victoria169, all of which considered the reach of generally expressed powers to make by-laws. The proposition that the convenience power should be read narrowly was said to be supported by the reasons of Isaacs J in 168 Melbourne Corporation v Barry (1922) 31 CLR 174; [1922] HCA 56; Lynch v Brisbane City Council (1961) 104 CLR 353; [1961] HCA 19. 169 Leslie v City of Essendon [1952] VLR 222. Hayne Melbourne Corporation v Barry170 and the reasons of Dixon CJ in Lynch v Brisbane City Council171. It is necessary to say something about each. In Barry, this Court considered the validity of a by-law made by the Council of Melbourne prohibiting any "processions of persons or of vehicles ... except for military or funeral purposes" parading or passing through any street unless with the consent of the Council and unless the recipient of the consent had given at least 24 hours' notice to the police. By majority (Isaacs and Higgins JJ, Knox CJ dissenting) the by-law was held not to be authorised by the Local Government Act 1915 (Vic) or by the Police Offences Act 1915 (Vic). The former of those Acts provided that "[s]ubject to the provisions hereinafter contained by-laws may be made for any municipality for the purposes mentioned in this Act and for the purposes following", after which there appeared 37 purposes for which by-laws might be made. One listed purpose was "[r]egulating traffic and processions" and the last listed purpose was "[g]enerally for maintaining the good rule and government of the municipality". Isaacs J and Higgins J each held172 that the express power to make a by-law "regulating" processions did not authorise making a by-law that prohibited processions unless consent was given. Each observed173 that the statute in question distinguished between purposes of "regulating" certain subjects, "regulating or prohibiting" others, and "prohibiting" still other subjects. That being so, it is unsurprising that each concluded that the power to make by-laws "[g]enerally for maintaining the good rule and government of the municipality" could not support the by-law in question. That purpose was properly seen in the context of the whole of the relevant section as a category the content of which was necessarily limited or diminished by the preceding statements of purpose. The statement of Isaacs J so much relied on in the course of argument in this Court β that the good rule and government power "confers a power, not of extending the other powers, but of aiding them if need be or of making independent ordinances in matters ejusdem generis with the specific powers of the Act"174 β must be understood accordingly. It provides no support for a general proposition that a general conferral of by-law making power must be construed narrowly when the Act specifically lists other purposes for which by-laws may be made. 170 (1922) 31 CLR 174. 171 (1961) 104 CLR 353. 172 (1922) 31 CLR 174 at 198-200 per Isaacs J, 209 per Higgins J. 173 (1922) 31 CLR 174 at 193 per Isaacs J, 205-206 per Higgins J. 174 (1922) 31 CLR 174 at 194 (footnote omitted). Hayne In Lynch, this Court again considered the extent of a by-law making power given by what Dixon CJ called175 "the extensive if traditional words 'generally in maintaining the good rule and government of the municipality'". Three points must be made about the decision in Lynch. First, the expression considered in Lynch, like the words of the convenience power in issue in this appeal, was, as Dixon CJ said176, "wide and indefinite". But, as Dixon CJ also said177, the words used "cannot be dismissed for that reason as if they were meaningless or ineffective". Second, how words of generality are to be construed depends upon their statutory context. Hence, in Lynch it was important to observe178 about the statute in question that the listed powers were conferred "[w]ithout limiting the generality" of the relevant council's power to make ordinances for, among other purposes, the convenience of the inhabitants. And, most importantly, the general words conferring the power were "not to be applied without caution nor read as if they were designed to confide to the [relevant council] more than matters of local government" and hence were "not to be read as going beyond the accepted notions of local government"179. The third point to make concerns the references made by Dixon CJ to the decision of the Full Court of the Supreme Court of Victoria in Leslie v City of Essendon180. Although Dixon CJ referred181 with approval to the historical examination undertaken in Leslie, it is evident that Dixon CJ saw the actual decision in Leslie as turning on the statutory context in which the particular "good rule and government" by-law making power sat. Hence, the proposition that Leslie decided that "in that context the power must be construed restrictively"182 cannot be understood as propounding any generally applicable 175 (1961) 104 CLR 353 at 363. 176 (1961) 104 CLR 353 at 362. 177 (1961) 104 CLR 353 at 362. 178 (1961) 104 CLR 353 at 364. 179 (1961) 104 CLR 353 at 364. 180 [1952] VLR 222. 181 (1961) 104 CLR 353 at 363-364. 182 (1961) 104 CLR 353 at 364 (emphasis added). Hayne principle governing the construction of either a "good rule and government" power or the convenience power which is now under consideration. The decisions in Barry, Lynch and Leslie do not require the conclusion that the convenience power must be construed narrowly, let alone that it should be construed so as not to support the making of the impugned by-law. Each case can be seen as adopting a narrower construction of the provision in issue than the words of the provision might possibly have been understood to bear, but in each this construction was required by consideration of the statutory context of the provision. These cases thus demonstrate the need to read a general provision like the convenience power in its statutory context. They demonstrate that particular aspects of statutory context may show that some applications of the provision otherwise available must yield to competing contextual indications (as was the case in Barry). It is not right to say that, together or separately, these cases establish any special rule of construction β whether applicable generally to by-law making powers or only to "good rule and government" or like powers β that a general provision like the convenience power must be read "narrowly" or "restrictively". A rule expressed in those terms would be uninformative. It may divert attention (and did divert attention in this appeal) from the requirement to identify the meaning to be given to the provision which is being construed. Not only that, a rule so expressed may be understood to suggest, wrongly, that a generally expressed by-law making power appearing at the end of a list of more particularly expressed powers can and should be deprived, by being read "narrowly" or "restrictively", of any effective operation. That is not what was established by Barry, Lynch or Leslie. To the extent to which the Corneloups' arguments depended upon such an understanding of those cases, the arguments are ill-founded. The relevant question is not whether s 667(1) 9 XVI should be read "narrowly" or "restrictively". The question is what meaning should be given to its terms. Construction of s 667(1) 9 XVI It is not to be doubted that the meaning given to s 667(1) 9 XVI may be affected by consideration of other provisions of the 1934 Act. The Act must be read as a whole183. And it may readily be accepted that the subject-matter, scope and purpose of the 1934 Act reveal that the words of the convenience power are "not to be applied without caution nor read as if they were designed to confide to the [Council] more than matters of local government" and hence "are not to be 183 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381 [69]; [1998] HCA 28. Hayne read as going beyond the accepted notions of local government"184. But that is to say no more than that the words of the power are to be construed in their statutory context with proper regard to the purposes of the Act. Unless it is shown that the words of s 667(1) 9 XVI are to be limited, whether by reference to the subject-matter or the manner of expression of other by-law making powers or otherwise, the words of the convenience power are well able to support a by-law governing whether and when there may be activities on a road which may diminish the convenience of using the road. Roads are public thoroughfares along which persons may pass and repass, with or without loads, and (according to the type of road in question) with or without the use of some or all kinds of vehicle. The definition of "road" in the 1999 Act is consistent with this general understanding of roads and their purposes. By their very nature, the uses which the impugned provisions prohibit without permission obstruct others who use the road from passing or repassing along it whether on foot or by vehicle. The preacher and the canvasser hope and intend to attract a crowd of people who will stay long enough to listen to a message. And if the message is controversial, the preacher and the canvasser will likely attract others who come to contest the view that is offered. Any crowd of people obstructs the road and obstructs others who would use the road for its intended purpose as a thoroughfare. Likewise, the person who distributes "any handbill, book, notice, or other printed matter" to any bystander or passer-by can do that to those who pass by in vehicles only when the vehicles are stopped. And with the pedestrian bystander or passer-by, the distributor will almost always either stand facing the on-coming pedestrians or move against the flow of that traffic. In any of those cases, the act of distribution will very likely impede the free flow of those who would pass and repass along the thoroughfare. A by-law made to regulate these sorts of activities would readily appear to be "generally for the good rule and government of the area, and for the convenience, comfort and safety of its inhabitants". Is the meaning of those terms to be limited by reference to either the subject-matter or the manner of expression of other by-law making powers or otherwise? It is right to observe, as Samuel Corneloup did, that s 667(1) gave councils a number of by-law making powers for the regulation and licensing of various uses of vehicles on roads185 and the regulation of "the standing of horses and 184 Lynch (1961) 104 CLR 353 at 364 per Dixon CJ. 185 s 667(1) 3 XX-XLI. Hayne other animals in streets, roads and public places"186. It is also right to observe, as again Samuel Corneloup did, that s 239(1) of the 1999 Act gave power to make by-laws about the use of roads for various purposes including "the broadcasting of announcements or advertisements"187 and "soliciting for religious or charitable purposes"188. But neither of these observations supports the conclusion that the convenience power did not authorise the making of the impugned provisions. The subject-matter of the impugned provisions differs markedly from the subject-matters of those other provisions of the 1934 Act mentioned in argument. The first group of provisions of the 1934 Act which were mentioned permitted the making of by-laws regulating how and when vehicles may be used on roads and the second group dealt with the standing of horses and other animals in streets. The impugned provisions were directed to a different form of use of roads. Neither the text of those other provisions of the 1934 Act, nor the context of the 1934 Act more generally, supports the conclusion that the only aspects of road usage which might be regulated by by-laws made under that Act were to be those that were dealt with in the express provisions mentioned in argument. Rather, the convenience power permitted the making of by-laws dealing with the subject-matters with which the impugned provisions dealt. The later enactment of the 1999 Act, with its specific provisions for by-laws about the use of roads, did not confine the ambit of the convenience power by excluding from its operation the power to make the impugned provisions. Section 239(1) authorised the making of by-laws about the use of roads for certain purposes and expressly contemplated189 that the making of by-laws about other uses of roads might be authorised by regulation. Yet it was made plain, by the retention in the 1934 Act of by-law making powers about certain other uses of roads, that s 239(1) was not to be read as an exhaustive statement of by-law making powers about the use of roads. And when it is recalled that s 246(1)(a) of the 1999 Act provided for the making of by-laws "within the contemplation of this or another Act", it is evident that the subsequent enactment of s 239(1) of the 1999 Act did not confine the operation of the convenience power by excluding from it any power to make by-laws relating to the use of roads. It was not shown that the words of s 667(1) 9 XVI were to be limited by reference to the subject-matter or the manner of expression of other by-law 186 s 667(1) 7 II. 187 s 239(1)(b). 188 s 239(1)(d). 189 s 239(1)(g). Hayne making powers or otherwise. Prohibition of the activities described in the impugned provisions without permission is "generally for the good rule and government of the area, and for the convenience, comfort and safety of its inhabitants". Section 667(1) 9 XVI of the 1934 Act, and so s 246(1)(a) of the 1999 Act, supported the impugned provisions. An "unreasonable" exercise of power? It will be recalled that the Corneloups contended that the impugned provisions were not a valid exercise of the Council's by-law making power for any one or more of four reasons. Three of those reasons, based on the construction of the convenience power, s 246(2) and s 248(1)(a) respectively, have already been considered and rejected. The fourth submission about the Council's by-law making powers was that the impugned provisions were not a reasonable and proportionate exercise of the convenience power. They were said not to be reasonable and proportionate having regard to several factors, which included the impugned by-law's restrictive effect on political communication, the availability of less restrictive means to achieve the same objects and the width of the discretion in granting permits and imposing conditions on those permits. These factors were said to demonstrate that the means chosen by the Council to prevent obstruction of roads went beyond what was a reasonable and proportionate means of achieving the by-law's goals and for that reason the impugned provisions are invalid. Consideration of this challenge to the by-law must begin with what was said by Dixon J in Williams v Melbourne Corporation190. Dixon J said191 that "[t]o determine whether a by-law is an exercise of a power, it is not always enough to ascertain the subject matter of the power and consider whether the by-law appears on its face to relate to that subject". Examination of the legal and practical operation of the by-law may reveal that "it could not reasonably have been adopted as a means of attaining the ends of the power"192 (emphasis added). He continued by observing193 that "[i]n such a case the by-law will be invalid, not because it is inexpedient or misguided, but because it is not a real exercise of the power". Two fundamental points follow and must not be obscured. The first is that the relevant question is the character of the relevant provisions and the sufficiency of their connection with the relevant by-law making power. And the 190 (1933) 49 CLR 142; [1933] HCA 56. 191 (1933) 49 CLR 142 at 155. 192 (1933) 49 CLR 142 at 155. 193 (1933) 49 CLR 142 at 155, referring to Widgee Shire Council v Bonney (1907) 4 CLR 977 at 982, 986; [1907] HCA 11. Hayne second is related to the first: the court is concerned not with the expediency of the by-law but with the power to make it. As Fullagar J later pointed out in Clements v Bull194, this Court's decision in Williams discredited the "idea that a by-law could be held invalid because it appeared to a court to be an 'unreasonable' provision". Because the Court is here concerned with the power to make by-laws, attention must be given in the first instance to the terms of the by-law making power conferred by the statute. As Gummow J said in Minister for Resources v Dover Fisheries Pty Ltd195, "[t]he fundamental question is whether the delegated legislation is within the scope of what the Parliament intended when enacting the statute which empowers the subordinate authority to make certain laws". Attention can then turn to the legal and the practical effect of the by-law to determine whether it has a sufficient connection to the by-law making power196. No doubt that involves a question of degree and judgment. But a conclusion is to be reached paying due regard to "accepted notions of local government"197 and the fact that "[m]unicipalities and other representative bodies which are entrusted with power to make by-laws are familiar with the locality in which the by-laws are to operate and are acquainted with the needs of the residents of that locality"198. It is not to be assumed (and no reason was given to the contrary in this appeal) that any more confined understanding of a by-law making power should be preferred. It is against this background that this challenge to validity must be assessed. The legal and practical operation of the impugned provisions, in the circumstances to which they apply, prevents obstruction of roads. Contrary to the submissions of Samuel Corneloup, the impugned provisions are not "fundamentally directed at banning most forms of communication in most public places". Nor are they properly characterised as embracing "a large portion of everyday oral and written communication and much ordinary intercourse". They are directed, and only directed, to the prevention of obstruction in the use of 194 (1953) 88 CLR 572 at 581; [1953] HCA 61 (footnote omitted). 195 (1993) 43 FCR 565 at 577 (footnote omitted). See also Barry (1922) 31 CLR 174 at 209 per Higgins J; Footscray Corporation v Maize Products Pty Ltd (1943) 67 CLR 301 at 308 per Rich J; [1943] HCA 15. 196 See South Australia v Tanner (1989) 166 CLR 161 at 178 per Brennan J; [1989] HCA 3. 197 Lynch (1961) 104 CLR 353 at 364 per Dixon CJ. 198 Footscray Corporation v Maize Products Pty Ltd (1943) 67 CLR 301 at 308 per Hayne roads. And because that is so, the legal and practical effect of the impugned provisions is directly and substantially directed to the object of the relevant statutory head of by-law making power, namely, the convenience power. This challenge to the validity of the impugned provisions fails. Before turning to the other submissions made by the Corneloups, something more needs to be said about the submission that less restrictive means of achieving the same object could have been devised and that, consequently, the by-law was not a reasonable and proportionate exercise of the convenience power. The correctness of the assertion that less restrictive means of achieving the same object could have been devised depends upon what is meant by "less restrictive means". In particular, the assertion provokes two further questions: "less restrictive of what?" and "less than what?" Assuming both of those further questions could be answered satisfactorily (and no answer was proffered in argument), that less restrictive means could be designed to achieve the same object raises the question why that proposition is relevant to the validity of the by-law. It could be relevant to validity only if at least one of the following assumptions is made good. Either the by-law making power is to be construed as conferring only a power to make by-laws which have the least restrictive effect possible on some specific interest while still achieving the same object, or the possibility of less restrictive means suggests that the by-law has an insufficient connection to the by-law making power. The former assumption is not lightly to be made and was not shown to apply to the convenience power in this appeal. The assumption seeks, in another guise, to impose a narrow construction upon the convenience power when, as has already been explained, its terms do not warrant such narrowing. And if selection of less restrictive means is not a condition upon the convenience power, the alleged existence of less restrictive means can only be peripheral at best to determining whether a sufficient connection exists between the by-law and the convenience power. This last point is critically important and is usefully understood by reference to the reasons of Brennan J in South Australia v Tanner199. Brennan J dissented from the orders made in that case but his Honour's statement of applicable principles does not differ in any material respect from those applied by the majority. Brennan J emphasised200 that, where the validity of regulations (or in this appeal a by-law) is concerned, the problem is one of characterisation, which requires ascertainment of the character of the impugned regulation by reference to its operation and legal effect in the circumstances to which it applies. 199 (1989) 166 CLR 161. 200 (1989) 166 CLR 161 at 178. Hayne The court must201 make its "own assessment of the directness and substantiality of the connexion between the likely operation of the regulation and the statutory object to be served". The regulation is invalid if the directness and substantiality of that connection "is so exiguous that the regulation could not reasonably have been adopted as a means of fulfilling the statutory object"202 (emphasis added). The references to "so exiguous" and "could not reasonably have been adopted" demonstrate that the question to be asked and answered is not whether the by-law is a reasonable or a proportionate response to the mischief to which it is directed but whether, in its legal and practical operation, the by-law is authorised by the relevant by-law making power. The question of validity is to be decided by characterising the impugned provisions and assessing the directness and substantiality of the connection between the likely operation of the by-law and the statutory object to be served. Could the by-law, so characterised and assessed, reasonably be adopted as a means of fulfilling that object? No further inquiry into the proportionality of the by-law is permitted or required. The procedural challenge to the by-law The second basis for the invalidity of the by-law was said to be that the Council had failed to take the procedural steps necessary to make the by-law validly. In particular, Caleb Corneloup contended that the Council did not obtain a certificate "signed by a legal practitioner" (emphasis added) as required by s 249(4) of the 1999 Act. That sub-section provided: "A council must not make a by-law unless or until the council has obtained a certificate, in the prescribed form, signed by a legal practitioner certifying that, in the opinion of the legal practitionerβ the council has power to make the by-law by virtue of a statutory power specified in the certificate; and the by-law is not in conflict with this Act." The solicitors retained by the Council sent it a number of by-laws (including the impugned by-law) that the solicitors had drafted together with certificates of the kind required by s 249(4). The solicitors sent these documents to the Council by attaching them to an email sent by the legal practitioner having the immediate carriage of the matter to an employee of the Council. The email asked the recipient to print the documents "and deal with them accordingly". It invited the recipient to call the legal practitioner who had sent the email if the 201 (1989) 166 CLR 161 at 179. 202 (1989) 166 CLR 161 at 179. Hayne recipient had "any queries concerning the process and procedure to make these by-laws". The certificate in respect of the impugned by-law which was attached to the email stated the name and business address of the legal practitioner who sent the email and provided a space in which the practitioner could have subscribed his signature over his printed name and designation as a legal practitioner. The practitioner did not write his signature on the document. Did the Council obtain a certificate "signed by a legal practitioner" in these circumstances, as required by s 249(4) of the 1999 Act? To answer that question, it is necessary to consider s 9(1) of the Electronic Transactions Act 2000 (SA), which provided: "If, under a law of this jurisdiction, the signature of a person is required, that requirement is taken to have been met in relation to an electronic communication ifβ a method is used to identify the person and to indicate the person's approval of the information communicated; and having regard to all the relevant circumstances at the time the method was used, the method was as reliable as was appropriate for the purposes for which the information was communicated; and the person to whom the signature is required to be given consents to that requirement being met by way of the use of the method mentioned in paragraph (a)." When the certificate attached to the email is read with the email, it is evident that the legal practitioner was identified and that he approved of the information communicated in the certificate. The method used to identify the legal practitioner and indicate his approval of the certificate and other documents sent to the Council was, in all the circumstances, as reliable as was appropriate for the purposes for which the information was being communicated to the Council. And it is evident that the Council consented to this method of communication of the relevant material. Section 9(1) of the Electronic Transactions Act was thus engaged. The requirement of s 249(4) of the 1999 Act for a certificate signed by a legal practitioner is to be taken as met. This ground of contention fails. There remains for consideration the constitutional challenge to the validity of the impugned provisions. That challenge also fails. The constitutional challenge to the by-law The Corneloups submitted that the by-law is invalid because it infringes the implied constitutional freedom of communication on matters of government Hayne and politics which is "an indispensable incident of that system of representative government which the Constitution creates"203. It was on this basis that the Full Court held that parts of the impugned provisions are invalid and should be severed. The accepted doctrine of the Court is to be found in the unanimous joint judgment in Lange v Australian Broadcasting Corporation as modified by a majority of the Court in Coleman v Power204. As the plurality in Wotton v Queensland recently observed205, the terms of the questions identified in Lange are settled. The first question is whether the impugned law "effectively burden[s] freedom of communication about government or political matters either in its terms, operation or effect"206. If the effect of the law is to prohibit, or put some limitation on, the making or the content of political communications, then the boundaries of the freedom are marked by two conditions, which together make up the second question identified in Lange. First, is the object or end of the impugned law "compatible with the maintenance of the constitutionally prescribed system of representative and responsible government"207 and second, is the impugned law "reasonably appropriate and adapted to achieving that legitimate object or end" in a manner which is compatible with the maintenance of the constitutionally prescribed system of representative and responsible government208? Those are the established principles which must be applied, and it is to their application to the impugned provisions which these reasons now turn. It will be recalled that the impugned provisions prohibited certain conduct on a road without permission. It may be assumed for the purposes of the present appeal that, because the impugned provisions put this limitation on the making of political (and other) communications, the impugned provisions "effectively burden" freedom of communication about government or political matters. 203 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 559; [1997] HCA 25. 204 (2004) 220 CLR 1 at 50-51 [92]-[96] per McHugh J, 77-78 [196] per Gummow and Hayne JJ, 82 [211] per Kirby J; [2004] HCA 39. 205 (2012) 246 CLR 1 at 15 [25]; [2012] HCA 2. 206 Lange (1997) 189 CLR 520 at 567. 207 Lange (1997) 189 CLR 520 at 561-562. 208 Lange (1997) 189 CLR 520 at 562; Coleman v Power (2004) 220 CLR 1 at 51 [96]. Hayne Attention must therefore turn to the second question identified in Lange, which contains the conditions marking out the boundaries of the freedom. What was the object or end of the impugned provisions? The object or end can best be described as the prevention of obstruction of roads. It is the pursuit of that object or end which brought the impugned provisions within the ambit of the convenience power, and the text, subject-matter and context of the impugned provisions point unequivocally to identifying their object or end in this way. The collocation of "preach, canvass, harangue, tout for business or conduct any survey or opinion poll" used in par 2.3 of the impugned by-law demonstrates its concern with a variety of different activities. The thread which is common to those activities is that each is an occasion for obstruction of the use of the road. The same thread can readily be seen as running through most of the other sub-paragraphs of par 2 of the impugned by-law: notably par 2.1 dealing with repairs to or other work on a vehicle, par 2.2 dealing with collections of money or other things, par 2.5 dealing with livestock on the road, pars 2.6 and 2.7 dealing with camping and tents, par 2.8 dealing with the distribution of printed matter and par 2.10 dealing with the erection of structures on a road. The remaining sub-paragraphs of par 2 (par 2.4 dealing with the use of amplifiers for broadcasting announcements or advertisements and par 2.9 dealing with the placing on vehicles of any handbill dealing with religious or charitable purposes or advertising) may have other and wider objects or ends. It may be that the prevention of obstruction of roads will be conducive to the safe use of those roads and even the keeping of the peace. It might further be said that the prevention of obstruction of roads will balance the competing interests of those who seek to use them. But these descriptions advanced by the Attorney-General for South Australia of the object or end of the impugned provisions are better seen as consequences that may follow from preventing the obstruction of roads rather than as separate or additional objects or ends. And those consequences may then be relevant to whether the object or end of preventing obstruction of roads is legitimate. No party or intervener submitted that the impugned provisions pursued an object or end which is incompatible with the constitutionally prescribed system of representative and responsible government and with the freedom of political communication that is its indispensable incident. It is not to be supposed that preventing the obstruction of roads is incompatible in the relevant sense. Preventing the obstruction of roads is conducive to the maintenance of roads as a means of travel, interaction and association (including political interaction and association) among the people. It ensures that travel can continue along the relevant road unimpeded. In this Court, debate centred upon whether the impugned provisions were reasonably appropriate and adapted to achieving the legitimate object or end of preventing obstruction of roads in a manner which is compatible with the Hayne Contrary the Attorney-General of maintenance of the constitutionally prescribed system of representative and responsible government. the Commonwealth's submissions, the question is not concluded by determining that the by-law is not so unreasonable as to fall outside the by-law making power. The question which arises in considering whether the by-law made was supported by statutory power is not the same as the question which must be answered in considering its constitutional validity. The former is whether the by-law is so unreasonable that it could not fall within the by-law making power. The latter is whether the by-law is reasonably appropriate and adapted to serve a legitimate object or end in a manner compatible with the constitutionally prescribed system of government and the freedom of political communication which is its indispensable incident. Those supporting and those challenging validity emphasised, albeit for different purposes, that the impugned provisions took the form of a general prohibition of specified conduct coupled with a power to grant a consent to engage in that conduct. Those who challenged validity asserted that the general prohibition was a large intrusion upon freedom of political communication which was not ameliorated by the possibility of obtaining consent. Indeed, the power to grant or withhold consent was said to make the intrusion worse by permitting choice (either practically or legally) between the views that might be expressed by preaching or distributing printed material on a road. By contrast, those who sought to uphold validity submitted that the power to grant consent could not lawfully be exercised in a manner antithetical to the implied freedom of political communication and served no more complex purpose than avoiding what Kourakis J referred209 to in the Full Court as "the 'Olympic system' where the fastest, loudest or most numerous prevail". Both sides of the debate proceeded from explicit or implicit assertions about the proper construction of the impugned provisions and, in particular, the power to grant consent for the prohibited activities. The proper construction of the impugned provisions is the point at which consideration of the arguments must begin because it is the legal and practical operation of the impugned by-law which is central. It is necessary to construe the power to give consent in a manner that gives due weight to the text, subject-matter and context of the whole of the provision in which it is found. As has already been explained, those matters show unequivocally that the only purpose of the impugned provisions is to prevent obstruction of roads. It follows that the power to grant or withhold consent to engage in the prohibited activities must be administered by reference to that consideration and none other. On the proper construction of the impugned 209 (2011) 110 SASR 334 at 367 [128]. Hayne by-law, the concern of those who must decide whether to grant or withhold consent is confined to the practical question of whether the grant of permission will likely create an unacceptable obstruction of the road in question. Once that is understood, it is readily evident that the impugned provisions are reasonably appropriate and adapted to prevent obstruction of roads in a manner which is compatible with the maintenance of the constitutionally prescribed system of representative and responsible government. No consent of the Council to engage in the activities regulated by the impugned provisions is needed when the specific exclusions in the impugned provisions about elections and referendums are engaged. And when those exclusions are not engaged, the only burden which the impugned provisions place on the freedom of political communication is to prohibit the use of roads for the purposes of preaching, canvassing or haranguing persons or giving out or distributing printed matter in circumstances where it is judged that to do so would likely create an unacceptable obstruction of a road. Any restriction on political communication is confined to where the communication can be made and is a necessary incident of maintaining unimpeded use of roads. The prohibition without permission which the impugned provisions effect adequately balances the competing interests in political communication and the reasonable use by others of a road. Conclusion and orders For these reasons the challenges which the Corneloups made to the validity of the by-law all fail. The appeal to this Court should be allowed and par 1 of the orders of the Full Court of the Supreme Court of South Australia made on 10 August 2011 should be set aside. In its place there should be an order that the appeal to that Court is allowed, the orders of the District Court of South Australia made on 25 November 2010 are set aside and in their place there should be orders that (a) the application of Samuel Corneloup dated 2 November 2009 is dismissed; and (b) so much of the appeal of Caleb Corneloup by notice dated 28 July 2010 as sought to challenge the validity of By-law No 4 β Roads made by the Corporation of the City of Adelaide on 10 May 2004 is dismissed. Consistent with the terms on which special leave to appeal to this Court was granted, the orders for costs made by the Full Court should not be disturbed and there should be no order for the costs of the proceedings in this Court. 143 HEYDON J. The circumstances of the appeal are fully set out in other judgments. These reasons deal with only two points. By notice of contention, the second and third respondents challenged the validity of pars 2.3 and 2.8 of By-law No 4 β Roads210 ("the challenged clauses"). One question in the appeal is whether their making was a valid exercise of the power conferred by s 667(1) 9 XVI or s 667(1) 4 I of the Local Government Act 1934 (SA) ("the Act"). Section 667(1) 9 XVI gives power to councils to make by-laws "generally for the good rule and government of the area, and for the convenience, comfort and safety of its inhabitants." Section 667(1) 4 I gives power to make by-laws "for the prevention and suppression of nuisances". The principle of legality At common law, citizens are free to behave as they like unless there is a prohibition created by common law rules or by legislation. That freedom need not depend on any express rule. Putting aside the positive grant of rights by the law, the common law recognises a "negative theory of rights". In the words of Glanville Williams, under that theory, rights are marked out by "gaps in the criminal law"211. Similarly, Lord Goff of Chieveley said that under the English common law "everybody is free to do anything, subject only to the provisions of the law"212. In this sense, there are many common law rights of free speech. The third respondent correctly submitted that the challenged clauses created an impact on many common law rights of free speech apart from the common law right to make political communications. He correctly submitted that the rights on which this impact took place were rights to engage in "a very large portion of normal everyday written and oral communication." And he correctly submitted that the proscriptions in the challenged clauses were applicable to the whole of the Adelaide central business district; were not directed to any particular level of noise, time or place; and were not limited to offensive communications. The appellant identified various classes of speech to which the challenged clauses allegedly did not apply β roadside interviews, impromptu press conferences, and communication through the internet, newspapers and signs. But even if that is correct, the third respondent's points remain sound. And they 210 Set out at [26], [74] and [164]. 211 Quoted in Simpson, Human Rights and the End of Empire: Britain and the Genesis of the European Convention, (2001) at 35 n 132. 212 Attorney-General v Guardian Newspapers Ltd (No 2) [1990] 1 AC 109 at 283. totally contradict a Commonwealth submission that the challenged clauses apply only to "very, very precise and limited forms of communication". The "principle of legality" holds that in the absence of clear words or necessary implication the courts will not interpret legislation as abrogating or contracting fundamental rights or freedoms. For that principle there are many authorities, ancient and modern, Australian and non-Australian. The principle exists for good reason. As Lord Hoffmann said213: "the principle of legality means that Parliament must squarely confront what it is doing and accept the political cost. Fundamental rights cannot be overridden by general or ambiguous words. This is because there is too great a risk that the full implications of their unqualified meaning may have passed unnoticed in the democratic process." It may be prudent for a litigant relying on the principle of legality to select a meaning of legislation sufficiently narrow to suit that litigant's interests and defend it. But it is not necessary for that litigant to do so. Rather, it is for the party contending that the legislative language has curtailed fundamental rights or freedoms to show that the language is clear enough to achieve that effect. The principle of legality can apply both to parliamentary legislation creating a power to make delegated legislation, and to the delegated legislation itself. The consequence of applying the principle of legality to a power in parliamentary legislation to make delegated legislation will tend to be a relatively narrow construction of that power. And the consequence of applying the principle of legality to delegated legislation made under that power will tend to be a relatively narrow construction of that delegated legislation. Here, the crucial issue is the impact of the principle of legality on the width of the s 667(1) 9 XVI and s 667(1) 4 I powers to make delegated legislation. That is because though the words of the challenged clauses are wide, and though they create criminal offences, they are on the whole clear enough, at least in their application to the second and third respondents, to prevent the principle of legality from causing difficulty in relation to them. The common law right of free speech is a fundamental right or freedom falling within the principle of legality214. That must be so if there is any shadow of truth in Cardozo J's claim that freedom of speech is "the matrix, the 213 R v Home Secretary; Ex parte Simms [2000] 2 AC 115 at 131. 214 Attorney-General v Guardian Newspapers Ltd (No 2) [1990] 1 AC 109 at 283; Derbyshire County Council v Times Newspapers Ltd [1993] AC 534 at 551; R v Home Secretary; Ex parte Simms [2000] 2 AC 115 at 125-127; Momcilovic v The Queen (2011) 245 CLR 1 at 178 [444]; [2011] HCA 34. indispensable condition, of nearly every other form of freedom."215 It must be so if Lord Steyn's account of the importance of freedom of expression is convincing. He said216: "Freedom of expression is, of course, intrinsically important: it is valued for its own sake. But it is well recognised that it is also instrumentally important. It serves a number of broad objectives. First, it promotes the self-fulfilment of individuals in society. Secondly, in the famous words of Holmes J (echoing John Stuart Mill), 'the best test of truth is the power of the thought to get itself accepted in the competition of the market'217. Thirdly, freedom of speech is the lifeblood of democracy. The free flow of information and ideas informs political debate. It is a safety valve: people are more ready to accept decisions that go against them if they can in principle seek to influence them. It acts as a brake on the abuse of power by public officials. It facilitates the exposure of errors in the governance and administration of justice of the country". And it must also be so if Kommers was correct to say218: "The basic right to freedom of opinion is the most immediate expression of the human personality β¦ in society and, as such, one of the noblest of human rights β¦ It is absolutely basic to a liberal-democratic constitutional order because it alone makes possible the constant intellectual exchange and the contest among opinions that form the lifeblood of such an order". Of course, Cardozo J was dealing with the First and Fourteenth Amendments to the United States Constitution. And Kommers was dealing with Art 5, Section 1, in the German Constitution219: "Every person shall have the right freely to express and disseminate his opinions in speech, writing, and pictures and to inform himself without hindrance from generally accessible sources. Freedom of the press and 215 Palko v Connecticut 302 US 319 at 327 (1937). 216 R v Home Secretary; Ex parte Simms [2000] 2 AC 115 at 126. 217 Abrams v United States 250 US 616 at 630 (1919) per Holmes J (dissenting). 218 The Constitutional Jurisprudence of the Federal Republic of Germany, 2nd ed 219 Quoted in Robertson, The Judge as Political Theorist: Contemporary Constitutional Review, (2010) at 49. freedom of reporting by means of broadcasts and films shall be guaranteed. There shall be no censorship." Constitutional rights of those kinds are different from a common law right capable of modification by statute. But the considerations underlying a constitutional right of free speech, where it exists, are equally strong indications that the right of free speech at common law is sufficiently important to attract the principle of legality. The common law right of free speech which the principle of legality protects is significantly wider, incidentally, than the constitutional limitation on the power to enact laws burdening communications on government and political matters. The powers alleged to support the challenged clauses Section 667(1) 9 XVI. The third respondent drew attention to what O'Bryan J said in Leslie v City of Essendon220: "a power to make by-laws for one purpose only, viz, for the good rule and government of the municipality or practically for that purpose alone will be interpreted in a very different way from a power expressed in like language but which is preceded by a power to make by-laws for thirty-two separate and distinct purposes, all or most of which are concerned with the good rule and government of the municipality. Apart from any authority, I would think that it is impossible as a matter of ordinary interpretation to give to clause (xxxiii) its full and natural meaning as though it appeared in a statute without any specific powers preceding it." O'Bryan J held that the relevant by-law could not be upheld on the basis that the general power corresponding to s 667(1) 9 XVI was an independent power221. The third respondent contended that O'Bryan J's statement was approved by Dixon CJ in Lynch v Brisbane City Council222. Opinions can as readily differ on questions of construing what a judgment means as they can on any question of construction. It is clear, however, with respect, that the third respondent's contention is correct. Dixon CJ did approve what O'Bryan J said in Leslie v City of Essendon, though his Honour saw the different context of the case before him as making it distinguishable. Dixon CJ agreed that the structure of the legislation O'Bryan J considered established a context which suggested that a general power be construed "restrictively". But he saw the context of the legislation before him as not restrictive. He saw the words "without limiting the generality of [the 220 [1952] VLR 222 at 226. 221 Leslie v City of Essendon [1952] VLR 222 at 228. 222 (1961) 104 CLR 353 at 364; [1961] HCA 19. relevant council's] powers" before "a long and jumbled enumeration of subjects"223 as giving power to "lay down rules in respect of matters of municipal concern", but not "as going beyond the accepted notions of local government."224 The challenged clauses are not within the powers conferred by s 667(1) 9 XVI for the following reasons. First, while the outcome in each case must turn on the proper construction of the relevant provision considered in its statutory context, a similar conclusion was reached in Leslie v City of Essendon. There the power was preceded by a power to make by-laws for 32 separate and distinct purposes. Here the specified powers preceding s 667(1) 9 XVI are not few in number. There are 27 of them. And they are not narrow in scope. The specified powers relate to lodging houses; innumerable aspects of vehicles; licences and permits; nuisances; unattended or insecurely fastened animals; and the standing in streets, roads and public places of horses and other animals. Most of them, probably all of them, are concerned with the "good rule and government of the municipality", like the powers in Leslie v City of Essendon. Many of the powers relate to regulation of the use of roads. They have specific requirements and limitations which would be nugatory if s 667(1) 9 XVI were read sufficiently broadly to empower the challenged clauses. Thus s 667(1) 9 XVI does not create an independent power. It cannot be used to extend other powers. Secondly, in contrast to the legislation considered in Lynch v Brisbane City Council225, there is no provision in the legislation stating that the specific powers are to be construed without limiting the generality of the council's powers. the following words preceding s 667(1) 9 XVI, "a council may make by-laws for all or any of the following purposes", were "equally broad". But the appellant did not explain how those words could have the same effect as those which were decisive in Lynch v Brisbane City Council. The appellant submitted that Thirdly, Brennan J held in Foley v Padley226 that in the light of Lynch v Brisbane City Council227 s 667(1) 9 XVI could not by itself authorise a by-law in terms overlapping with but narrower than par 2.8, namely: 223 Lynch v Brisbane City Council (1961) 104 CLR 353 at 361. 224 (1961) 104 CLR 353 at 364. 225 (1961) 104 CLR 353 at 364. 226 (1984) 154 CLR 349 at 373; [1984] HCA 50. 227 (1961) 104 CLR 353. "No person shall give out or distribute anything in the Mall or in any public place adjacent to the Mall to any bystander or passer-by without the permission of the council." The appellant did not seek to demonstrate that Brennan J's conclusion was wrong. Fourthly, even if it is correct to analyse legislation in terms of the mental states of the legislature or its members, it cannot be inferred from the form of s 667(1) 9 XVI that the legislature appreciated the question of free speech, or that the legislature intended s 667(1) 9 XVI to permit by-laws of the kind challenged in this appeal, or that, in Lord Hoffmann's words, the legislature "squarely confront[ed] what it [was] doing and accept[ed] the political cost."228 If it is correct, which it is, to concentrate on the words of s 667(1) 9 XVI, it is clear that they are too general, ambiguous and uncertain to grant a power to make by-laws having the adverse effect on free speech of the challenged clauses. The Full Court of the Supreme Court of South Australia held that s 667(1) 9 XVI gave the first respondent power to regulate conduct which was properly a matter of municipal concern and which, if left uncontrolled, would materially interfere with the comfort, convenience and safety of the city's inhabitants229. On the Full Court's construction, the impact of the challenged clauses on common law rights of free speech is radical. Even assuming that the Full Court's construction is available apart from the principle of legality, the language is insufficiently clear to permit that construction to be adopted in view of its impact on free speech. The first respondent contended that in various cases powers identical or similar to that conferred by s 667(1) 9 XVI had been construed broadly230. This contention was allied with a submission that it was appropriate to give s 667(1) 9 XVI a wide construction because it was an element in a plenary power to regulate the competing interests of urban residents who had to live and work at close quarters in response to changing conditions and circumstances not foreseeable at earlier times. The courts which decided the cases relied on do not appear to have been invited to attach any significance to the principle of legality. And an appeal to the desirability of there being a statutory power to make delegated legislation so wide as to permit the criminalisation of conduct in 228 R v Home Secretary; Ex parte Simms [2000] 2 AC 115 at 131. 229 Corporation of the City of Adelaide v Corneloup (2011) 110 SASR 334 at 361 [98]. 230 Bremer v District Council of Echunga [1919] SALR 288 at 295; Seeligson v City of Melbourne [1935] VLR 365; Rice v Daire (1982) 30 SASR 560. circumstances which were unforeseeable when the statutory power was enacted does not sit well with the principle of legality. Section 667(1) 4 I. The appellant also relied on the s 667(1) 4 I power to make by-laws "for the prevention and suppression of nuisances". The appellant submitted in writing that the challenged clauses "may be supported by the nuisance power, either standing alone or together with the convenience power." The appellant submitted orally that the challenged clauses "are β¦ not directly supported by the nuisance power but they aid the nuisance power in a matter ejusdem generis." This language alluded to what Isaacs J said in Melbourne Corporation v Barry231. These somewhat inconsistent submissions must fail. In Samuels v Hall232, Zelling AJ held that handing out leaflets in urban streets was not a common law nuisance. On appeal in that case, Mitchell J concurred with Zelling AJ233. Chamberlain J234, with whom Walters J agreed235, left that question open. So did the Full Court of the Supreme Court of South Australia in this case236. Zelling AJ's answer to the question, however, was completely correct237. Merely to preach, canvass or harangue on a road is not to commit a public nuisance. Nor is merely distributing printed material to bystanders or passers-by on a road. Conclusion The challenged clauses are invalid. The appeal should be allowed to the extent of making a declaration to that effect. The first respondent contended that the points raised by the second and third respondents in this respect were not capable of being raised by way of notice of contention, or were in the nature of a 231 (1922) 31 CLR 174 at 194; [1922] HCA 56. Counsel for the third respondent repeatedly stated, without contradiction by the appellant, that the appellant was not relying on any ejusdem generis argument. However, the quoted words appear to involve a version of it. 232 [1969] SASR 296 at 304. 233 [1969] SASR 296 at 322. 234 [1969] SASR 296 at 314. 235 [1969] SASR 296 at 329. 236 Corporation of the City of Adelaide v Corneloup (2011) 110 SASR 334 at 345-346 237 See also Cooper v Bormann (1979) 22 SASR 589 at 591-592; Rice v Daire (1982) 30 SASR 560 at 568. cross-appeal for which special leave was required. It is true that the submissions of the second and third respondents which have been accepted may call for an order which is in form different from the order made by the Full Court. But in substance that order has the same effect in its application to the circumstances of the second and third respondents as the Full Court's order. Even if special leave to cross-appeal be necessary, it should be granted. It is not necessary to consider the other issues raised by the parties. The appellant should be ordered to pay the costs, if any, of the third respondent and the costs, if any, of the second respondent. CRENNAN AND KIEFEL JJ. The second and third respondents to this appeal are members of a religious organisation called "Street Church". They wish to preach on the streets of the City of Adelaide. They say that their preaching is political in nature. Under a by-law said to have been made under the Local Government Act 1999 (SA) ("the 1999 Act"), the permission of the Corporation of the City of Adelaide ("the Council") is required for that activity. By-law No 4 β Roads, which was gazetted on 27 May 2004238, was entitled "FOR the management of roads vested in or under the control of the Council" ("the By-law"). Paragraphs 2.3 and 2.8 of the By-law provided at the relevant time239: "Activities Requiring Permission No person shall without permission on any road: Preaching and Canvassing preach, canvass, harangue, tout for business or conduct any survey or opinion poll provided that this restriction shall not apply to [a] designated area as resolved by the Council known as a 'Speakers Corner' and any survey or opinion poll conducted by or with the authority of a candidate during the course of a Federal, State or Local Government Election or during the course and for the purpose of a Referendum; 2.8 Distribute give out or distribute to any bystander or passer-by any handbill, book, notice, or other printed matter, provided that this restriction shall not apply to any handbill or leaflet given out or distributed by or with the authority of a candidate during the course of a Federal, State or Local Government Election or to a handbill or leaflet given 238 South Australian Government Gazette, No 44, 27 May 2004 at 1384-1385. 239 By-law No 4 β Roads which was gazetted on 9 June 2011 is in different terms; but it too requires permission to preach, canvass or harangue on a road, other than a road which the Council has excluded from the restriction: South Australian Government Gazette, No 36, 9 June 2011 at 2034-2035, par 2.7. out or distributed during the course and for the purpose of a Referendum". It is an offence to breach a by-law240. The maximum penalty for such an offence A road is defined in s 4(1) of the 1999 Act as "a public or private street, road or thoroughfare to which public access is available on a continuous or substantially continuous basis to vehicles or pedestrians or both". The definition is wide enough to include pedestrian malls. The second and third respondents have preached in Rundle Mall in the City of Adelaide, which is principally a pedestrian precinct surrounded by retail stores. The consideration given to the operation of the By-law on this appeal is not restricted to that locality. Section 208(1) of the 1999 Act vests all public roads in the area of a council in that council. "Area" is defined to mean the area for which a council is constituted242. The second and third respondents brought proceedings in the District Court of South Australia243 for a declaration that the abovementioned paragraphs of the By-law are invalid. They argued that the paragraphs are invalid because they are ultra vires the power to make by-laws given by the 1999 Act and because they place an unnecessary burden on their freedom of political and religious communication. It may at once be observed that the implied constitutional freedom of communication on political or governmental matters (referred to as "political communication" in these reasons), which has been recognised by this Court244, is not a personal right. It operates as a restriction on 240 By-law No 1 β Permits and Penalties, notified in the South Australian Government Gazette, No 44, 27 May 2004 at 1380, par 2.1. See also its successor, By-law No 1 β Permits and Penalties, notified in the South Australian Government Gazette, No 36, 9 June 2011 at 2028, par 4.1. 241 Local Government Act 1999 (SA), s 246(3)(g). 242 Local Government Act 1999, s 4(1). 243 Local Government Act 1999, ss 276(1)(f), 276(2)(d). 244 Nationwide News Pty Ltd v Wills (1992) 177 CLR 1; [1992] HCA 46; Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106; [1992] HCA 45; Lange v Australian Broadcasting Corporation (1997) 189 CLR 520; [1997] HCA 25. legislative power245 and does so to support the constitutional imperative of the maintenance of representative government. His Honour Judge Stretton of the District Court of South Australia declared the words "preach", "canvass" and "harangue" in par 2.3 and the whole of par 2.8 to be invalid and ordered that they be severed from the By-law on the basis that they exceeded the by-law making power conferred by the Local Government Act 1934 (SA) ("the 1934 Act") and the 1999 Act246. His Honour did not consider questions concerning the implied freedom247. The Full Court of the Supreme Court of South Australia (Kourakis J, Doyle CJ and White J agreeing) held that the By-law was within the power conferred by the 1934 Act, but that pars 2.3 and 2.8 were incompatible with the implied freedom and dismissed the appeal brought by the Council248. In the view of Kourakis J, members of a democratic society do not need advance permission to speak on political matters. The prohibition on disseminating a political message without first obtaining permission is, in his Honour's view, antithetical to the democratic principle underlying the implied freedom249. By a grant of special leave, the Attorney-General for South Australia appeals to this Court. The Council has been joined as first respondent to the appeal. 245 Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 150, 168; Theophanous v Herald & Weekly Times Ltd (1994) 182 CLR 104 at 125, 149, 162, 166; [1994] HCA 46; Cunliffe v The Commonwealth (1994) 182 CLR 272 at 326; [1994] HCA 44; Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 560; Hogan v Hinch (2011) 243 CLR 506 at 554 [92]; [2011] HCA 4. Similarly in relation to the s 92 freedom, see James v The Commonwealth (1939) 62 CLR 339 at 361-362; [1939] HCA 9; Nationwide News Pty Ltd v Wills (1992) 177 CLR 1 at 56, 59, 76. 246 Corneloup v Adelaide City Council (2010) 179 LGERA 1 at 43 [162]-[163], 44 247 Corneloup v Adelaide City Council (2010) 179 LGERA 1 at 45-46 [173]-[176]. 248 Corporation of the City of Adelaide v Corneloup (2011) 110 SASR 334 at 365-366 249 Corporation of the City of Adelaide v Corneloup (2011) 110 SASR 334 at 374 The 1934 Act and the 1999 Act Both the 1934 Act and the 1999 Act deal with the subject of local government and include grants of powers with respect to the making of by-laws for purposes associated with local government. Before considering the nature and extent of those powers, it is necessary to say something about the two Acts and their relationship. The 1934 Act was not completely repealed when the 1999 Act came into effect. The Local Government (Implementation) Act 1999 (SA) repealed many, but not all, of the by-law making powers of the 1934 Act. Section 46 of that Act permits the further repeal of the 1934 Act, and although this power has been exercised250, some by-law making powers under the 1934 Act remain in force. Amongst them is s 667(1) of the 1934 Act, which confers power to make by-laws for the "prevention and suppression of nuisances" (par 4 I), and "generally for the good rule and government of the area, and for the convenience, comfort and safety of its inhabitants" (par 9 XVI). Section 668 of that Act provides that the 1999 Act "applies to and in relation to by-laws made under this Act as if they were by-laws made under [the 1999 Act]." The specific by-law making powers of the 1999 Act are contained in ss 238 to 240. The subjects with which they are concerned are not numerous. They include the power to make by-laws controlling access to and use of local government land (s 238) and by-laws about the use of roads (s 239). Section 246(1)(a) appears in Ch 12 of the 1999 Act, titled "Regulatory functions", and provides more generally that, "[s]ubject to this or another Act, a council may make by-laws β¦ that are within the contemplation of this or another Act". Sub-section (2) provides that a council cannot make a by-law that requires a person to obtain a licence from the council to carry out an activity at a particular place unless the council has express power to do so under an Act. Section 248(1)(a) provides that a by-law made by a council must not exceed the power conferred by the Act "under which the by-law purports to be made". It remains to mention s 249(4) of the 1999 Act, which also features in the second respondent's Notice of Contention. It provides that a council must not make a by-law unless or until it has obtained a certificate signed by a legal practitioner certifying that, in the opinion of the practitioner, the council has the 250 Local Government (Implementation) (Repeal of Certain Provisions) Proclamation 2003, notified in the South Australian Government Gazette, No 94, 2 October 2003 at 3702; Local Government (Implementation) (Repeal of Certain Provisions) Proclamation 2007, notified in the South Australian Government Gazette, No 48, 26 July 2007 at 3207. power to make the by-law by virtue of a statutory power specified in the certificate and that the by-law is not in conflict with the 1999 Act. The Notices of Contention The following issues are raised by the second respondent's Notice of Contention and the third respondent's Amended Notice of Contention concerning the validity of the By-law by reference to the provisions of the 1934 and 1999 Acts relating to by-laws: whether the By-law contravenes s 248(1)(a) of the 1999 Act; (ii) whether the restriction imposed on the making of by-laws by s 246(2) of the 1999 Act applies; (iii) whether s 667(1) 9 XVI of the 1934 Act supports the By-law and whether the power there given to make by-laws should be construed narrowly; (iv) whether there is to be seen as extracted from the power given by s 667(1) 9 XVI, powers to control conduct on roads because of the powers provided by ss 238(2)(a) and 239(1)(g) of the 1999 Act; if s 667(1) 9 XVI supports the By-law, whether the By-law is a reasonable and proportionate exercise of that power; (vi) whether the By-law is valid given that not all of the requirements of s 249(4) of the 1999 Act were met. The second constitutionality of the creation of local government in South Australia. respondent did not pursue a contention concerning the Section 248(1) Section 248(1) of the 1999 Act provides that a by-law must not exceed the power "conferred by the Act under which the by-law purports to be made". The third respondent points to the statement made in the Government Gazette with respect to the By-law, that it is a "By-law Made Under the Local Government Act 1999". The third respondent also points out that the appellant does not rely upon the by-law making powers of ss 238-240 of the 1999 Act as supporting the By-law, but rather relies on s 667 of the 1934 Act. It follows, in his submission, that the By-law is not authorised by the Act under which it purports to be made, the 1999 Act, and is therefore invalid. The issue of the effect, if any, of stated reliance upon a wrong source of power arises most frequently in the area of administrative decision making. There is no reason why the principle relevant to the determination of that issue cannot be applied to the exercise of delegated legislative powers, subject to the terms of the authorising legislation. It is a settled principle that an act purporting to be done under one statutory power may be supported under another statutory power251. A mistake as to the source of power does not render an act or decision invalid252. The words "purports to be made" in s 248(1) should not be read as rendering a statement about the source of the power for a by-law conclusive for the purposes of the sub-section. The words assume that a by-law will identify its legislative source and that it will do so correctly. Neither assumption is necessary for the purposes of the sub-section. Section 248(1) is concerned with the relationship between a by-law and the source of its power. It requires that the by-law be authorised and that its subject matter, scope and operation not extend beyond the limits of that authority. It is, as the first respondent maintains, a statutory expression of the common law principle that a by-law must be within the scope of the legislation which authorises it. The validity of a by-law in this context is to be tested by reference to all the powers given to a council to make a by-law. The third respondent's contention also ignores provisions of the two Acts that connect a by-law made by reference to the 1934 Act with the 1999 Act. Section 668 of the 1934 Act states that the 1999 Act applies to by-laws made under the 1934 Act. Section 246(1)(a) of the 1999 Act empowers a council to make by-laws "within the contemplation of this or another Act" and thereby picks up a by-law contemplated by the 1934 Act. Therefore a by-law made by reference to s 667 of the 1934 Act is also one made under s 246(1)(a) and is one to which the 1999 Act applies. Section 246(2) Section 246(2) of the 1999 Act prohibits the making of a by-law which requires a person to obtain a licence from the council "to carry out an activity at a particular place", unless the council has express power to do so under an Act. 251 Lockwood v The Commonwealth (1954) 90 CLR 177 at 184 per Fullagar J; [1954] HCA 31. 252 Brown v West (1990) 169 CLR 195 at 203 per Mason CJ, Brennan, Deane, Dawson and Toohey JJ; [1990] HCA 7; Newcrest Mining (WA) Ltd v The Commonwealth (1997) 190 CLR 513 at 618 per Gummow J; [1997] HCA 38; Eastman v Director of Public Prosecutions (ACT) (2003) 214 CLR 318 at 362 [124] per Heydon J; [2003] HCA 28; Australian Education Union v Department of Education and Children's Services (2012) 86 ALJR 217 at 225-226 [34] per French CJ, Hayne, Kiefel and Bell JJ; 285 ALR 27 at 37; [2012] HCA 3. The second respondent's reliance upon this prohibition as relevant to the By-law is misplaced. The Full Court considered that s 246(2) pertains to licences to occupy particular places for the purpose of commercial or other business-like activities which are conducted continuously, regularly or frequently from those places253. This suggests that the "activities" to which the sub-section refers are those which may require something in the nature of town planning permission. If that be so, there would be no reason to restrict the range of such activities to those of a business-like nature. Nevertheless, the distinction sought to be drawn between activities contemplated by the sub-section and those to which the By-law refers is well made. The object of s 246(2) is not particularly clear from its terms. It requires that there be an express power if a by-law is to require a person to obtain a licence to carry out an activity at a particular place. "Place" is not defined and may therefore extend to land and premises. It may be said that the purpose of the sub-section is to prevent a general by-law making power from being used for the proscribed purpose. This suggests that some other source of power for licensing is considered to be more appropriate. A power to regulate uses on particular land and in particular premises is one possibility. It is not necessary to identify that power or those powers with any greater precision. It is sufficient to observe from the terms of the sub-section that the connection between the activity and the particular place at which it is to be carried out must be such as to necessitate permission. The same cannot be said of the connection between a person speaking or distributing materials and that person's location on a road. Those activities require permission because they are to be conducted on a roadway, not because they are conducted at a particular location. Further, the activity contemplated by s 246(2) as connected with the land or premises must be something more than the action of a person standing on a street or thoroughfare preaching, canvassing or distributing materials. Section 667(1) 9 XVI One of the second respondent's contentions relating to the by-law making power given by s 667(1) 9 XVI of the 1934 Act relies upon ss 238(2)(a) and 239(1)(b) of the 1999 Act as being in the nature of special powers relating to roads. Section 238(2)(a) is an exception to the power contained in s 238(1), under which a council may make by-laws controlling access to and the use of 253 Corporation of the City of Adelaide v Corneloup (2011) 110 SASR 334 at 341 [26]. local government land. Section 238(2)(a) provides that a by-law cannot be made under that power concerning access to, or the use of, a road. The terms of the provision do not prevent other sources of power authorising by-laws relating to roads, as the second respondent's submissions imply; they merely prevent a power to make by-laws relating to the subject of council lands from being used for the making of a by-law in relation to roads. Section 239(1) provides for the making of by-laws about the use of roads. Paragraph (b) permits the making of such by-laws respecting the broadcasting of announcements or advertisements. Other by-laws concerning roads which are permitted by s 239(1) include those relating to public exhibitions or displays (par (c)); soliciting for religious or charitable purposes (par (d)); the movement of animals (par (f)); and any other use in relation to which the making of by-laws is authorised by regulation (par (g)). The second respondent's point is that because s 239(1) is intended to deal with the subject of roads, s 667(1) 9 XVI of the 1934 Act should be read not to include that subject. However, this contention assumes that s 239 is intended to be the only source of power concerning activities on roads. Such an intention is not evident from the limited topics with which it deals respecting the use of roads. The third respondent also contends for a narrow operation of the power given by s 667(1) 9 XVI, to make by-laws "generally for the good rule and government of the area, and for the convenience, comfort and safety of its inhabitants." It was this provision which the Full Court concluded was the source of the power to make the By-law254. The Full Court rejected the contention that the power there referred to is limited to matters which may be regarded as analogous to the subject matter of the specific by-law making powers provided by the two Acts. The third respondent relies upon what was said by the Full Court of the Supreme Court of Victoria in Leslie v City of Essendon255 respecting a power to make by-laws for the "good rule and government of the municipality". It was said that such a provision could not be regarded as an independent power256 and could not extend the scope of the specific by-law making powers beyond the limits laid down by the legislature257. The contention that the power might be 254 Corporation of the City of Adelaide v Corneloup (2011) 110 SASR 334 at 361 [98], 255 [1952] VLR 222. 256 Leslie v City of Essendon [1952] VLR 222 at 228 per O'Bryan J. 257 Leslie v City of Essendon [1952] VLR 222 at 247 per Coppel AJ. seen to supplement the preceding specific powers was rejected. It was said that, as a matter of ordinary construction, it would not be possible to give the broadly stated power the full and natural meaning that its words would attract if it appeared in a statute without any specific powers preceding it258. But, as the Full Court in this case pointed out259, by the time of the enactment of the Local Government Act 1928 (Vic), in which the provision was contained, there had been extensive enumeration of specific purpose powers. It was for that reason that the Court in Leslie v City of Essendon considered260 that it should apply the reasoning of Isaacs J in Melbourne Corporation v Barry261 and give the broad provision a narrow construction. In Lynch v Brisbane City Council262, Dixon CJ263 gave a wide construction to s 36(3) of the City of Brisbane Act 1924 (Q), which provided that "[w]ithout limiting the generality of its powers, the Council shall have and possess express powers" in relation to all but a few enumerated matters, and then went on to extend those powers to "generally all works, matters, and things in its opinion necessary or conducive to the good government of the City and the wellbeing of its inhabitants." His Honour noted that in In re Municipal Council of Kyneton264, which was decided in 1861, it was said that such a provision should be restrictively construed by reference to the ejusdem generis principle. However, his Honour observed, in s 36 there was no genus beyond that which appeared to belong to local government. And his Honour observed that there were other cases where like words had received a very wide interpretation. The words of s 36 were words traditionally used to characterise the powers of local government265. 258 Leslie v City of Essendon [1952] VLR 222 at 226 per O'Bryan J. 259 Corporation of the City of Adelaide v Corneloup (2011) 110 SASR 334 at 359 [91]. 260 Leslie v City of Essendon [1952] VLR 222 at 226-228 per O'Bryan J, 238 per Sholl J, 247 per Coppel AJ. 261 (1922) 31 CLR 174 at 194; [1922] HCA 56. 262 (1961) 104 CLR 353; [1961] HCA 19. 263 With whom McTiernan and Fullagar JJ agreed. 264 (1861) 1 W & W (L) 11. 265 Lynch v Brisbane City Council (1961) 104 CLR 353 at 362-363, referring to Williamson v City of Melbourne [1932] VLR 444; Ex parte Pritchard (1876) 14 SCR (NSW) 226; Ex parte O'Neill (1892) 13 LR (NSW) (L) 280; Bremer v (Footnote continues on next page) The third respondent submits that Dixon CJ nevertheless approved of the decision in Leslie v City of Essendon. It is not clear that this was the case. His Honour did say266 that, insofar as the judgments provided the history of the use of the formulation, they "will repay study", but he then went on to distinguish the case. His Honour referred to the opening words of s 36(3), which were expressed not to limit the generality of the council's powers. His Honour said that the Court could not read down the words of the sub-section as if they were almost nugatory, and construed them as follows: "They give a power to lay down rules in respect of matters of municipal concern, matters that have been reasonably understood to be within the province of municipal government because they affect the welfare and good government of the city and its inhabitants. The words are not to be applied without caution nor read as if they were designed to confide to the city more than matters of local government. They express no exact limit of power but, directed as they are to the welfare and good government of a city and its inhabitants, they are not to be read as going beyond the accepted notions of local government." In his reasons in the Full Court, Kourakis J surveyed the history of legislation in South Australia dealing with powers to be delegated to local government. His Honour observed that the 1934 Act, like the Municipal Corporations Act 1923 (SA) before it, conferred over 200 specific purpose powers to make by-laws on municipal corporations267. However, the 1999 Act and the Local Government (Implementation) Act contained very few specific powers relating to by-laws268. Those remaining in s 667 of the 1934 Act relate to: the licensing and regulation of hire vehicles and lodging houses; the prevention and suppression of nuisances; the regulation of the standing of horses and other animals in roads and public places and the control of such of them as might endanger persons by bolting; and the aforesaid general power of good rule and government. Those powers conferred by ss 238 to 240 of the 1999 Act concern access to and use of roads and other local government land for announcements, displays, soliciting, vehicle repairs, the movement of animals or the posting of bills or other papers. District Council of Echunga [1919] SALR 288; President &c of the Shire of Tungamah v Merrett (1912) 15 CLR 407; [1912] HCA 63. 266 Lynch v Brisbane City Council (1961) 104 CLR 353 at 364. 267 Corporation of the City of Adelaide v Corneloup (2011) 110 SASR 334 at 353 [71]. 268 Corporation of the City of Adelaide v Corneloup (2011) 110 SASR 334 at 353-354 In contrast to the legislation considered in Leslie v City of Essendon, such a regime, of limited specification of powers, suggests an intention to provide councils with a broad power to make by-laws for the good rule and government of a council's area and for the convenience, comfort and safety of its inhabitants, within the bounds referred to by Dixon CJ in Lynch v Brisbane City Council. Dixon CJ's judgment in that case highlights the importance of the statutory setting in construing a provision of this kind. Here, by comparison with Leslie v City of Essendon, it could hardly be said that the subjects of the by-law making powers could have been intended as a comprehensive list of the powers necessary for effective local government. The general words of s 667(1) 9 XVI could not be said to be restricted by those few which are specified. Section 667(1) commences with the words that a council may make by-laws "for all or any" of the purposes which follow and that stated in par 9 XVI is one such purpose. That purpose is expressed as a general purpose ("generally for the good rule and government of the area, and for the convenience, comfort and safety of its inhabitants") and should be understood to provide all of the powers necessary to local government to which Dixon CJ referred in Lynch v Brisbane City Council. Non-compliance with s 249(4) It is accepted by the appellant that the certificate obtained by the Council in respect of the By-law, as was required by s 249(4), was not signed by the legal practitioner who provided it. The certificate was provided electronically, in the prescribed form269. The Full Court held that the requirement for a certificate under s 249(4) was an essential condition of the validity of a by-law. However, it found that the requirement of the practitioner's signature was satisfied by reason of s 9 of the Electronic Transactions Act 2000 (SA)270. Whilst the practitioner's signature was not given on the electronic form of certificate, the practitioner's name appeared in bold type, accompanied by the words "legal practitioner". Underneath the text comprising the certificate, the text of the By-law was reproduced. On 3 May 2004, before the By-law was gazetted, the practitioner sent the certificate by email transmission to an officer of the Council who was authorised to receive it. Section 9(1) of the Electronic Transactions Act provided, at the relevant time: 269 See Local Government (General) Regulations 1999 (SA), reg 19. 270 Corporation of the City of Adelaide v Corneloup (2011) 110 SASR 334 at 342 [29]. "If, under a law of this jurisdiction, the signature of a person is required, that requirement is taken to have been met in relation to an electronic communication if β a method is used to identify the person and to indicate the person's approval of the information communicated; and having regard to all the relevant circumstances at the time the method was used, the method was as reliable as was appropriate for the purposes for which the information was communicated; and the person to whom the signature is required to be given consents to that requirement being met by way of the use of the method mentioned in paragraph (a)." As the Full Court held271, correctly, the requirements of those provisions were met in this case. The provision of the certificate signified that the named legal practitioner held the view that the By-law was valid and subscribed to the opinion required by the certificate albeit that he had not signed it. The second respondent, however, points to the fact, recorded by his Honour Judge Stretton, that what appeared to be only an unsigned and undated draft of the certificate was provided to the Council amongst the papers relevant to the approval of the By-law. This enabled only a moderate inference that it was a certificate signed by the solicitor, his Honour found272. Section 10(3) of the Electronic Transactions Act provides that the integrity of information contained in a document is maintained if, and only if, the information has remained complete and unaltered. However, s 10(3) is expressed to be for the purposes of s 10. That section is concerned with the situation where a law permits a person to produce a document in electronic form. Sub-section (3) is directed to maintaining the integrity of the information conveyed by the original document. It is not concerned with the conveyance of a signature and does not operate as a qualification of what appears in s 9. The requirements of s 9 were met when the electronic communication of the certificate was made to the authorised person. It matters not, for these purposes, that the Council was later provided with an abridged version of that document. 271 Corporation of the City of Adelaide v Corneloup (2011) 110 SASR 334 at 342 [29], 272 Corneloup v Adelaide City Council (2010) 179 LGERA 1 at 26 [99]. This point of contention fails. The By-law as an exercise of power A test of reasonableness has been applied to the making of by-laws by local authorities under statutory power for a long time. In earlier decisions the test was severely constrained. It was thought that an attack on a by-law on the ground that it was unreasonable was not likely to succeed, because it was assumed that the local authority was to be the sole judge of what was necessary, subject only to the qualification that a by-law might be held invalid if it were such that no reasonable person could pass it273. The approach which is now adopted is that of Dixon J in Williams v Melbourne Corporation274. There, his Honour pointed out that it may not be enough to consider whether, on its face, a by-law appears to be sufficiently connected to the subject matter of the power to make it. The true character of the by-law, its nature and purpose, must be considered in order to determine whether it could not reasonably have been adopted as a means of attaining the purposes of the power. It will often be necessary to examine the operation of the by-law in the area in which it is intended to apply. The by-law there in question regulated the driving of cattle through the streets of the City of Melbourne. The power said to support it was a power for the regulation of traffic. Dixon J said that the ultimate question was whether, when applied to conditions in the city, the by-law involved such an actual suppression of the use of the streets as to go beyond any restraint which could reasonably be adopted for the purpose of preserving the safety and convenience Dixon J's statement of a test of reasonableness bears an obvious affinity with a test of proportionality. So much has been recognised in later cases. In South Australia v Tanner276, Wilson, Dawson, Toohey and Gaudron JJ equated the test with that of reasonable proportionality applied by Deane J in The 273 Kruse v Johnson [1898] 2 QB 91 at 99-100; Widgee Shire Council v Bonney (1907) 4 CLR 977 at 982-983 per Griffith CJ; [1907] HCA 11. 274 (1933) 49 CLR 142 at 155; [1933] HCA 56; South Australia v Tanner (1989) 166 CLR 161 at 175 per Brennan J; [1989] HCA 3. 275 Williams v Melbourne Corporation (1933) 49 CLR 142 at 156. 276 (1989) 166 CLR 161 at 165. Tasmanian Dam Case277. In Coulter v The Queen278 the relevant criterion of validity was said to be whether the impugned rules "are a reasonable means of attaining the ends of the rule-making power", by reference to Williams v Melbourne Corporation. An analysis of the relationship between means and ends necessarily raises questions similar to those considered in the context of the implied freedom of political communication. Proportionality in the Lange test These reasons should be read in conjunction with the reasons of Crennan, Kiefel and Bell JJ in Monis v The Queen279 so far as they concern the Lange280 test. As is there explained281, the first enquiry of the second limb of the Lange test concerns the relationship between a valid legislative object and the means provided for its attainment. The means must be proportionate to that object. If the means employed go further than is reasonably necessary to achieve the legislative object, they will be disproportionate and invalid for that reason. A test of reasonable necessity has been adopted by the Court in relation to the freedoms spoken of in s 92, in Betfair Pty Ltd v Western Australia282. It may consistently be applied with respect to the implied freedom of political communication. The third respondent accepts that the By-law had a legitimate purpose. That purpose is evident. It concerns the safety and convenience of users of roads. As has been pointed out earlier in these reasons, "road" has a wide meaning and extends to any vehicular or pedestrian thoroughfare. The use of a road may involve the passage of vehicles of various kinds and also the passage of pedestrians. The number of activities listed in the By-law as requiring permission is indicative of potential problems which might be created for road users. In addition to preaching and canvassing, such activities include: repairing vehicles; collecting donations; amplifying sound for broadcasting announcements or advertisements; riding, leading or driving livestock; distributing printed matter; and erecting structures such as fences, hoardings, ladders and trestles. 277 The Commonwealth v Tasmania (1983) 158 CLR 1 at 260; [1983] HCA 21. 278 (1988) 164 CLR 350 at 357; [1988] HCA 3; see also Ousley v The Queen (1997) 192 CLR 69 at 114 per McHugh J; [1997] HCA 49. 279 [2013] HCA 4. 280 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520. 281 Monis v The Queen [2013] HCA 4 at [280]. 282 (2008) 234 CLR 418 at 477 [102]-[103], 479 [110]; [2008] HCA 11. The By-law and its requirement of permission recognised a need to regulate these activities in order to accommodate interests which may conflict with the safety, convenience and comfort of road users. The Full Court did not consider the requirement to obtain permission for preaching, canvassing or distributing matter to be a disproportionate response to the issues presented by the activities in question. It was a measure which afforded an orderly system by which the claims of those wishing to disseminate their opinions could be balanced against the impacts upon the comfort, convenience and safety of other road users. It permitted what may be a necessary allocation of time and space between those wishing to express their opinions283. The third respondent points out that the By-law was not couched in terms of regulation but was a prohibition coupled with a discretion to lift the ban, possibly upon conditions. The third respondent is strictly correct, in that the By-law effected a prohibition, relevantly, upon preaching, canvassing and distributing matter absent permission. A distinction is sometimes drawn between prohibition and regulation in the context of limits upon powers to make by-laws284, but here there is no suggestion that the power is limited to regulation. More to the point is whether something less than a prohibition, coupled with a discretion to grant permission, would have been sufficient to achieve the objects of the By-law. In Lange v Australian Broadcasting Corporation285, reference was made to Australian Capital Television Pty Ltd v The Commonwealth286 ("ACTV"), where a law was held to be invalid because there were other, less drastic, means by which the objectives of the law could be achieved287. This accords with the test of reasonable necessity adopted in Betfair Pty Ltd v Western Australia288, by 283 Corporation of the City of Adelaide v Corneloup (2011) 110 SASR 334 at 366-367 284 See, for example, Country Roads Board v Neale Ads Pty Ltd (1930) 43 CLR 126 at 133; [1930] HCA 5; Swan Hill Corporation v Bradbury (1937) 56 CLR 746 at 752, 754-755; [1937] HCA 15; Yanner v Eaton (1999) 201 CLR 351 at 372 [37]; [1999] HCA 53. 285 (1997) 189 CLR 520 at 568. 286 (1992) 177 CLR 106. 287 See also Coleman v Power (2004) 220 CLR 1 at 50 [93] per McHugh J; [2004] HCA 39. 288 (2008) 234 CLR 418 at 477 [102]. reference to North Eastern Dairy Co Ltd v Dairy Industry Authority of NSW289. A necessary qualification to such a test is that the alternative means are equally practicable290. The Full Court in this case was unable to identify any alternative measures which would be equally practicable291. Neither was the third respondent able to do so. The second respondent attempted to draft a suggested by-law by which preaching could otherwise be regulated, but that attempt served only to highlight the general nature of the objectives of the By-law and the difficulty of prescribing, in advance, whether, when and upon what conditions an activity might be conducted. Clearly, so much will depend upon the location of the activity and those who might be affected by it. It is difficult to conceive how the use of roads could be regulated, so as to meet the legitimate objectives of the By-law, other than by a system which requires permission for the activity in question. The third respondent points out that the discretion to grant or refuse permission is very broad and is not limited to specified criteria. The discretion, however, is not at large. It is necessarily limited to the purposes for which the discretion is conferred292. In any event the question of the width of the discretion is more relevant to the question of the extent to which the implied freedom of political communication is likely to be burdened by the operation of the By-law. The By-law and the burden on the implied freedom β the Lange test The real question in this case is as to the extent to which the By-law, in its terms or operation, effects a restriction or burden on the implied freedom. The first limb of the Lange test enquires whether the impugned law or regulation effectively burdens freedom of political communication 293. It is not disputed 289 (1975) 134 CLR 559 at 608; [1975] HCA 45. 290 North Eastern Dairy Co Ltd v Dairy Industry Authority of NSW (1975) 134 CLR 559 at 616; Uebergang v Australian Wheat Board (1980) 145 CLR 266 at 306; [1980] HCA 40; Rowe v Electoral Commissioner (2010) 243 CLR 1 at 134 [438]; [2010] HCA 46. 291 Corporation of the City of Adelaide v Corneloup (2011) 110 SASR 334 at 367 292 Swan Hill Corporation v Bradbury (1937) 56 CLR 746 at 757-758; Wotton v Queensland (2012) 246 CLR 1 at 9-10 [9]-[10]; [2012] HCA 2. 293 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 567; Monis v The Queen [2013] HCA 4 at [276]. the that here requirement of permission effects a burden on some communications of a political kind sought to be made in the process of preaching or canvassing. It is therefore necessary to apply the tests in the second limb. The second limb of the Lange test requires that the By-law be proportionate to its purposes. That question has been dealt with. The second limb of the Lange test also requires that the By-law be proportionate in its effects upon the system of representative government which is the object of the implied freedom. As is explained in Monis v The Queen294, this involves an assessment of the extent to which the law is likely to restrict political communication. This enquiry is evident in the conclusion stated in Lange, that the law there in question did not impose an "undue burden" on the freedom295. The terms of that conclusion recognise that some burden may be lawful296. This follows from an acceptance that the implied freedom is not absolute297. It is necessary to consider a number of matters in connection with this enquiry. The third respondent points to the potential for the By-law to have a wide effect on political communication, by reference to the areas in respect of which permission to preach, canvass or distribute materials is required. Because "road" is defined widely, it includes many places which the public may access, including areas at or near many public buildings where political demonstrations might be expected to be made. This may be accepted. It may also be observed, in this regard, that at the relevant time the area referred to in the By-law as a "Speakers Corner" had not been designated. On the other hand, the By-law is limited to roads and cannot effect any restriction upon political communications in other public places. The discretion on the part of the Council to refuse permission, or to subject a grant to conditions, is wide, as the third respondent points out. It is not, however, at large and is circumscribed by the purposes of the By-law. In 294 [2013] HCA 4 at [281] per Crennan, Kiefel and Bell JJ. 295 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 568-569, 296 Monis v The Queen [2013] HCA 4 at [350]. 297 Nationwide News Pty Ltd v Wills (1992) 177 CLR 1 at 76-77, 94-95; Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 142-144, 159, 169, 217-218; Cunliffe v The Commonwealth (1994) 182 CLR 272 at 299, 336-337, 363, 387; Monis v The Queen [2013] HCA 4 at [267]. addition to any internal review by the Council itself298, the Council's decision is subject to judicial review by the Supreme Court of South Australia, although the costs of and potential delay in such procedures may act as a deterrent for some. In argument, reliance was placed upon the statement in Wotton v Queensland299 that a discretionary power must be exercised in accordance with any applicable law, including the Constitution. In Wotton v Queensland300, reference was made to the judgment of Brennan J in Miller v TCN Channel Nine Pty Ltd301, where his Honour said that a general discretion was not to be exercised in a manner foreign to its purposes or so as to discriminate against interstate trade, contrary to s 92 of the Constitution. It was not suggested by his Honour, nor in Wotton v Queensland, that the existence of the obligation to act in accordance with constitutional requirements created an assumption that a discretionary power will be valid because the obligation would be fulfilled. In the judgment of Brennan J, and in the joint reasons in Wotton v Queensland302, it was recognised that a discretion must be exercised in accordance with the purposes of the power. It follows from Lange that where a purpose of a discretionary power requires some restriction to be placed upon a freedom which the Constitution recognises, the question of its validity falls to be determined by the tests in Lange, and they involve proportionality analysis. More relevant to the legislation in Wotton v Queensland was what Brennan J had to say in Miller v TCN Channel Nine Pty Ltd303 respecting a discretionary power which, in its own terms, is so qualified as to confine the area for its exercise to constitutional requirements. In such a case, his Honour said, the power will be valid. In Wotton v Queensland, one of the statutory provisions conditioned the exercise of the discretion to what was reasonably necessary, 298 Local Government Act 1999, s 270(1) requires councils to establish procedures for the review of council decisions. 299 (2012) 246 CLR 1 at 9 [9], 13-14 [21]-[24]. 300 (2012) 246 CLR 1 at 9-10 [10]. 301 (1986) 161 CLR 556 at 613-614; [1986] HCA 60. 302 (2012) 246 CLR 1 at 9 [9]. 303 (1986) 161 CLR 556 at 613-614, quoting Inglis v Moore (No 2) (1979) 25 ALR thereby importing a requirement of proportionality into the exercise304. This was considered to be an important factor in favour of validity305. There is no similar condition expressed with respect to the discretion conferred by the By-law. It was not suggested in argument that such a condition could be implied from what was said about the limits to the by-law making powers in Williams v Melbourne Corporation306. Paragraphs 2.3 and 2.8 of the By-law are not directed to any restriction upon political communication. To the contrary, they except from its operation any survey or opinion poll conducted by or with the authority of a candidate, and the distribution of any handbill or leaflet by or with the authority of a candidate, during the course of a federal, State or local government election or referendum. And, to the extent that they will burden political communication, they will do so only indirectly307. This is a matter of no small importance, for a law which only incidentally restricts the freedom is more likely to satisfy the Lange test308. The Full Court considered that the By-law could have excluded political communication from its scope, when concluding that the By-law was incompatible with the implied freedom309. This underestimates the difficulty inherent in defining what will qualify as a political communication310. Further, the Full Court did not suggest that the By-law could do so and yet achieve its objects. It could not be seen as equally practicable to allow persons to conduct political speeches and distribute political material without restriction and yet secure the safe and convenient use of roads. 304 Wotton v Queensland (2012) 246 CLR 1 at 16 [32], 34 [91]. 305 Wotton v Queensland (2012) 246 CLR 1 at 16 [33], 34 [92]. 306 (1933) 49 CLR 142. 307 Mulholland v Australian Electoral Commission (2004) 220 CLR 181 at 200 [40]; [2004] HCA 41; Hogan v Hinch (2011) 243 CLR 506 at 555-556 [95]; Wotton v Queensland (2012) 246 CLR 1 at 16 [30], 30 [78]; Monis v The Queen [2013] HCA 4 at [342] per Crennan, Kiefel and Bell JJ. 308 Wotton v Queensland (2012) 246 CLR 1 at 16 [30]. 309 Corporation of the City of Adelaide v Corneloup (2011) 110 SASR 334 at 374-375 310 Monis v The Queen [2013] HCA 4 at [335]. It must be accepted that there will be occasions when the denial of permission to preach, canvass or distribute materials may prevent a political communication. However, the By-law is not directed to such a communication and has this effect only incidentally and only when it is necessary to achieve the object of securing the safe and convenient use of roads. It does not prevent a person speaking at every place to which the public may resort, but rather only those areas which come within the definition of a road. Given that the discretion must be exercised conformably with the purposes of the By-law, it may be assumed that permission will be denied only where the activities in question cannot be accommodated having regard to the safety and convenience of road users. It must be recalled that the extent of the burden imposed by the By-law is not assessed by reference to its effects on the second and third respondents. There is no personal right of political communication. The extent of the burden is assessed by reference to the need to maintain the system of representative government which the Constitution mandates. The freedom requires that political communication not be restricted to such an extent that it is compromised as being free. Some degree of burden is permitted unless it is, as was said in Lange, "undue"311. It cannot be concluded that the operation of the By-law will have such an effect. Incompatibility? The Lange test requires that the object of the By-law and the means that it employs be tested for compatibility with the constitutional imperative of the maintenance of the system of representative government and the freedom which supports it312. The By-law is not directed to communications which the freedom seeks to protect. It concerns a different subject. Its object is to ensure the safety and convenience of road users. Such an object is not incompatible with the freedom; neither are the means by which that object is achieved. The Full Court held that the requirement of permission is incompatible with the freedom313. It is evident from the statement that "[m]embers of a democratic society do not need advance permission to speak on political matters" 311 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 568-569, 575; Monis v The Queen [2013] HCA 4 at [282]. 312 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 567; Monis v The Queen [2013] HCA 4 at [277], [281]. 313 Corporation of the City of Adelaide v Corneloup (2011) 110 SASR 334 at 374 that the Full Court considered that the freedom is in the nature of a personal right and one which is absolute. With respect, this involves a misunderstanding of the freedom. It operates as a restriction upon legislative power, not as a right, and is not absolute. Some restriction upon the freedom may be permissible. Whether legislation exceeds the limits of that constraint, and is therefore invalid, falls to be determined by reference to the test in Lange, as explained in Monis v The Queen. Conclusion and orders The appeal should be allowed and the orders of the Full Court of the Supreme Court and the District Court of South Australia set aside. In lieu thereof there should be orders in the terms proposed by Hayne J. No orders for costs are sought. Bell BELL J. I agree with the orders proposed by Hayne J. I am in substantial agreement with the reasons of Crennan and Kiefel JJ for the making of those orders save with respect to the rejection of the second and third grounds of the third respondent's Amended Notice of Contention. These grounds contended that the impugned provisions are invalid because they are not a reasonable or proportionate exercise of the power under the Local Government Act 1934 (SA). I agree with Hayne J's reasons for rejecting each of these contentions. |
HIGH COURT OF AUSTRALIA APPELLANT AND THE QUEEN RESPONDENT Kamleh v The Queen [2005] HCA 2 3 February 2005 ORDER Appeal dismissed. On appeal from the Supreme Court of South Australia Representation: B J Powell QC with C J Caldicott for the appellant (instructed by Caldicott W J Abraham QC with S McDonald for the respondent (instructed by Director of Public Prosecutions (South Australia)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Criminal law β Evidence β Hearsay β Appellant charged with murder β Alleged accomplice not called as witness β Admissibility of evidence of out-of-court statements to prove relevant facts other than the truth of the representations made in the statements β Whether evidence of out-of-court statements adduced to prove intention is admissible β Walton v The Queen (1989) 166 CLR 283 discussed. Evidence β Hearsay β Criminal law β Admissibility of out-of-court statements to prove relevant facts other than the truth of the representations made in the statements β Walton v The Queen (1989) 166 CLR 283 discussed. GLEESON CJ AND McHUGH J. Following a trial in the Supreme Court of South Australia before Gray J, sitting without a jury, the appellant was convicted of two offences of murder1. He was sentenced to imprisonment for life, and a non-parole period of 27 years was fixed. An appeal against conviction was dismissed by the South Australian Court of Criminal Appeal2. A co-offender, Natale Zappia, was tried separately, and convicted of two offences of manslaughter. Neither the appellant nor Zappia gave evidence at the trial of the appellant. The issue in the present appeal concerns the admissibility at that trial of evidence of certain statements made out of court by Zappia. The case against the appellant The victims were Faraz Rasti and Rhiannon Ellul. Ms Ellul was a prostitute, aged 16. Mr Rasti, aged 22, organised customers, provided security and a driver, and received the proceeds of her prostitution. At the time of their deaths they occupied unit 22 of the Grand Apartments in Melbourne Street, North Adelaide. Their bodies were discovered by cleaners in unit 22 at about 2 pm on 3 April 2000. Mr Rasti died as a result of two gunshots, one to the left eye and one to the throat. Ms Ellul died as a result of a single gunshot to the forehead. Forensic evidence, combined with records of telephone conversations to which Mr Rasti was a party, established that the deaths of both victims occurred at some time between 1.16 am and 4 am on 3 April 2000. The appellant and Mr Rasti were well known to each other. There was evidence that Mr Rasti was a man of volatile personality, and that, on occasion, he behaved offensively and violently towards the appellant, taunting him about being overweight, and sometimes abusing him physically. The appellant and Zappia were close friends and frequent companions. The appellant was aged 23, and Zappia was aged 22. In view of the limited issues the subject of the present appeal, it is unnecessary to set out in full detail the evidence against the appellant. It is sufficient to refer to so much of it as provides the context in which the admissibility of the out-of-court statements by Zappia is to be considered. There was a substantial body of evidence to show that, over the days leading up to 3 April 2000, the appellant and Zappia spent much of their time in each other's company, and that, together, they visited unit 22. Fingerprints of the appellant and Zappia were found on various items in unit 22. Zappia's 1 R v Kamleh [2003] SASC 3. 2 R v Kamleh [2003] SASC 269. McHugh fingerprints were found on a drinking glass which was on a coffee table. DNA samples on the drinking glass also matched Zappia's DNA profile. In addition, there were other samples on the glass which had the same DNA profile as the appellant. In a record of interview with police, the appellant told police that he had lent a mobile telephone to Mr Rasti. The trial judge found that Mr Rasti was using that telephone (and another telephone) on 1 and 2 April 2000. At about 1 am on 2 April 2000, two men, consistent in appearance with the appellant and Zappia, were seen by witnesses to enter the Grand Apartments. At about 1 am on 3 April 2000, one of those witnesses saw what appeared to be the same two men again walking into the Grand Apartments. The witness was not sure about the shorter man, but such description as he was able to give of the man's appearance was consistent with that of the appellant. Another witness, Ms Stewart, received a telephone call from Mr Rasti at about 1 am on 3 April 2000. The call lasted for about 10 to 15 minutes. In the course of the conversation, Mr Rasti passed the telephone to another man. Although the evidence of Ms Stewart was vague, the trial judge was entitled to infer, and inferred, that the other man was described, or described himself, as "Jamie", a name by which the appellant was known. The trial judge summarised the effect of the identification evidence by saying that it "had a tendency to prove that the [appellant] was in the vicinity of the Grand Apartments at 1.00 pm on Saturday 1 April 2000 and at the Grand Apartments at or about 1.00 am on the morning of Sunday 2 April 2000, at or about 6.00 pm on Sunday 2 April 2000 and then at about 1.00 am on Monday 3 April 2000." The defence case, although unsupported by any sworn testimony of the appellant, relied upon an alibi. Both the appellant and Zappia were interviewed by police in April 2000, and they gave substantially similar accounts of their movements on the night in question. Both said they went together to a nightclub called the Q Club at about 11 pm on 2 April 2000 and remained there until about 4 am on 3 April 2000. Much of the trial was taken up with an investigation into that alibi. There was evidence from a number of young people who were at the Q Club. The reasons of the trial judge contain a detailed evaluation of that evidence and its reliability. There was no doubt that the appellant and Zappia were together at the Q Club between about 2.30 am and 4 am on 3 April 2000. There was some evidence, which the trial judge accepted, that they arrived at the club in the early hours of the morning of 3 April 2000, and that a relative of the appellant, in the hearing of the appellant and Zappia, asked other people to vouch for the presence of the appellant and Zappia at the club from an earlier time. The trial judge, relying particularly on the evidence of Ms Mouroufas, concluded that the appellant and Zappia arrived together at the Q Club at some time between 2.30 am and 3 am on 3 April 2000. He found that, in collaboration, they had concocted a false account of the time of their arrival at the club with a view to providing each other with an alibi. This, he held, reflected a consciousness of guilt on the part of the appellant. McHugh A prison informer named Loader gave evidence that the appellant confessed to him that he had shot the two victims. The trial judge examined that evidence with particular care, giving detailed consideration to the dangers involved in accepting it, and ultimately concluded that the evidence should be accepted. That finding was closely scrutinised in the Court of Criminal Appeal, where it was held that the appellant had failed to establish any error in the acceptance of the informer's evidence. That would be an important feature of the case if the appellant were to make good any of his grounds of appeal to this Court, and it became necessary to consider the proviso. For reasons that will appear, that question does not arise. In the Court of Criminal Appeal, certain grounds of appeal (not those with which this Court is concerned) were upheld, and the Court of Criminal Appeal applied the proviso. There is no ground of appeal in this Court relating to that aspect of the reasoning of the Court of Criminal Appeal. The grounds of appeal There are three grounds of appeal in this Court. They are as follows: The Court of Criminal Appeal erred in admitting the evidence of Mr Simoniuk of conversations with Mr Zappia on 3 April 2000. The Court of Criminal Appeal erred in holding that evidence of statements made by Mr Zappia in the absence of the appellant after the police investigation had commenced was admissible. The Court of Criminal Appeal erred in holding that evidence of statements made by Mr Zappia in the absence of the appellant was admissible to prove Mr Zappia's intention. Ground 2 was originally expressed by reference to statements made by Zappia to Mr Simoniuk, but at the commencement of argument counsel for the appellant said that the ground was directed to statements made by Zappia to the police in his record of interview. The third ground of appeal relates to statements made by Zappia to Mr Simoniuk, some days before the killings, at a McDonald's restaurant. All of the evidence the subject of the grounds of appeal was of statements made out of court by Zappia. It is submitted on behalf of the appellant that the reception of that evidence by the trial judge, and the use he made of it, contravened the rule against hearsay. Whether evidence of a statement made out McHugh of court by a person who is not called as a witness at a trial is hearsay depends upon the use that is sought to be made of that evidence3. If what is relevant is the fact that the statement was made, rather than the truth of what was said, so that the statement is not relied upon to prove the facts narrated in the statement, then what is involved is not hearsay. As Ferguson J put it in a note in the first volume of the Australian Law Journal4: "The hearsay rule does not forbid the proof of what somebody said out of Court. What it does forbid is the proof of a fact by telling what somebody said about that fact out of Court, a very different matter. Whether the evidence in any particular instance is admissible or not depends upon the question what fact it tends to prove." Both the trial judge and the Court of Criminal Appeal held that the evidence presently in question was relevant and admissible, not for a hearsay purpose, but for other purposes. It was not received, or considered, as evidence of the facts stated by Zappia. It was the fact that he made the statements that was relevant, not their truth. Indeed, in the case of one of the statements, the prosecution alleged that what Zappia said was substantially untrue. A fact in issue at the trial was whether the appellant was present in unit 22 between 1.16 am and 4 am on 3 April 2000. A fact relevant to that fact in issue was whether Zappia was present in unit 22 between those times. The evidence in question was tendered in support of that second fact. The reason why Zappia's presence in the unit was probative of the appellant's presence was that there was a substantial body of evidence, including statements made by the appellant in his record of interview with the police, which tended to show that the appellant and Zappia were together during the early hours of the morning of 3 April 2000, and had been together for most of the preceding day. The trial judge disbelieved the assertion that the appellant and Zappia were together at the Q Club from 11 pm on 2 April 2000 until 4 am on 3 April 2000, but he did not doubt that they were together. The point of disbelief related to the time at which they arrived together at the Q Club. When the trial judge found that the appellant and Zappia were together when they arrived at the Q Club, and thereafter, he did not mean (as an argument for the appellant appeared to suggest) that they were not out of each other's company even for a moment. He meant that they were substantially in 3 Subramaniam v Public Prosecutor [1956] 1 WLR 965 at 970; Ratten v The Queen [1972] AC 378 at 387; Walton v The Queen (1989) 166 CLR 283 at 301. 4 Ferguson, "Hearsay Evidence", (1927) 1 Australian Law Journal 195 at 196. Ferguson J, who had lectured in evidence for many years at the Sydney University Law School, went on to apologise for the need to write the note. McHugh company over the whole time. Apart from the appellant's assertions about his movements, and those of Zappia, there was other evidence which showed that they were together. Although the eye witness identification evidence was not conclusive, it supported an inference that the appellant and Zappia were seen arriving at the Grand Apartments at about 1 am on 3 April. The evidence of Ms Stewart was capable of supporting an inference that she spoke to the appellant over the telephone, shortly after 1 am, at a time when he was in unit 22. There was evidence, and it was common ground, that the appellant and Zappia arrived together at the Q Club. In those circumstances, if the prosecution could establish, as part of its case against the appellant, that Zappia was present in unit 22 at the time of the shootings, then that fact was inculpatory of the appellant. The conversation between Zappia and the witness Simoniuk the subject of the first ground of appeal took place on 3 April 2000, at some time in the evening. The evidence of the conversation was adduced in a curious form. Defence counsel did not object to counsel for the prosecution leading the witness, or to the witness giving evidence in a rather vague manner. There might have been a tactical reason for that. It is not the point of the ground of appeal. Mr Simoniuk said that Zappia looked nervous and tired. He said that, after having read his statement and refreshed his memory, he believed that Zappia had told him about the shootings. He said that Zappia had told him he had turned up the television set while in the room. That was a significant matter. When the cleaners at the Grand Apartments found the bodies of the victims on 3 April 2000, the television set in unit 22 was turned on at full volume. An available inference was that the television set had been turned up in order to mask the sound of gunshots. However that may be, the fact that the television set had been turned up to full volume was not something that had been made known to the public at the time of the conversation between Zappia and Mr Simoniuk on 3 April 2000. It was referred to by the trial judge as "esoteric knowledge", that is to say, information that was not in the public domain, and that was likely to be available only to somebody who had been present at the shootings. The prosecution tendered the evidence of the conversation for the purpose of showing that, on the evening of 3 April 2000, Zappia knew that the television had been turned up to full volume. In the circumstances, such knowledge was likely to have been available only to somebody who was present in unit 22 at the time the victims met their death. There was no plausible explanation of how Zappia could have come by that knowledge innocently. The fact that he knew something about what went on in unit 22 in the early hours of the morning of 3 April 2000, in the circumstances, was as incriminating as the fact that he was seen entering the Grand Apartments, or the fact that his fingerprints and his DNA were found on objects in the unit. It tended to prove that he was there. That, in turn, tended to prove that the appellant also was there. McHugh Such evidence did not offend against the hearsay rule. The evidence was not tendered or used to prove the truth of what Zappia said to Mr Simoniuk. It was not tendered to prove that the television set had been turned up. Rather, the fact that Zappia said what he did about the television set was relevant because it disclosed a state of knowledge on his part which had a tendency to prove that he was in unit 22 at the time of the killings. Thus, it had a tendency to prove a fact relevant to a fact in issue, because of other evidence which showed that he was in the presence of the appellant at all relevant times. As to the second ground of appeal, the appellant was interviewed by police on 6 April 2000. Although there was some argument in the Court of Criminal Appeal and in this Court about the matter, both the trial judge and the Court of Criminal Appeal correctly found that what the appellant said was unambiguous, and that he claimed to have been at the Q Club, with Zappia, from about 11 pm on 2 April to about 4 am on 3 April. As has been noted above, he did not specifically claim that the two were never separated, but the tenor of what he said was that they arrived, remained at, and left, the Q Club in each other's company. The interview with the appellant ended at 1.50 pm on 6 April. Telephone records showed that four telephone calls were made from the appellant's land line telephone to the telephone at Zappia's residence at 2.53 pm, 5.07 pm, 6.42 pm and 7.15 pm on that day. A mobile phone associated with the appellant was used to ring the Zappia land line at 7.22 pm and 7.52 pm. There was continuing telephone contact between the two men over the next few days. The police intercepted two telephone calls between the appellant and Zappia on 13 April 2000. On 14 April, the police interviewed Zappia. He made no admissions. He gave an account of his movements on 2 and 3 April 2000 which was almost identical to that given by the appellant. The prosecution tendered the record of interview, not to establish the truth of what Zappia said (on the prosecution case much of what he said was false), but for the purpose of showing that he and the appellant had concocted an alibi that was shown by other evidence, and in particular by the evidence of witnesses who had been at the Q Club, to be false. According to the prosecution argument, accepted by the trial judge, this was done by the appellant out of a consciousness of guilt. This, again, was a use of evidence of statements made by Zappia out of court, not to prove that what he said was true, but to prove that, acting in concert with the appellant, he said something that could be shown to be false. The evidence was not led or used for a hearsay purpose. The third ground of appeal is directed specifically to what was called "the McDonald's conversation", although, as a matter of principle, the point raised by it applied equally to another conversation between the same parties (referred to as "the Hectorville conversation"). McHugh Mr Simoniuk gave evidence that, on or about 24 March 2000, he spoke to Zappia in a car outside a McDonald's restaurant while the appellant was in the restaurant. The conversation, therefore, was not in the presence of the appellant. Mr Simoniuk said that Zappia told him that he and the appellant were planning to catch up with Mr Rasti because "[h]e owed them something or they had something to settle with him." The relevance of this evidence, again, is related to the evidence which showed that the appellant was in Zappia's company late on 2 April and in the early hours of 3 April. The Court of Criminal Appeal held that what Zappia said to Mr Simoniuk was evidence of Zappia's intention to "catch up with" Mr Rasti, and was available to be considered together with a larger body of evidence (including identification evidence) which supported the conclusion that Zappia visited Mr Rasti early on 3 April. In Walton v The Queen5, Mason CJ said: "Statements by a person about his intentions or state of mind are often admitted into evidence, whether described as an exception to the hearsay rule or as original evidence ... Wigmore on Evidence, Chadbourn rev (1976), Β§1715, suggests that such statements are an exception to the hearsay rule on the ground that a statement about a person's intentions is direct and testimonial, whereas conduct indicative of such intentions is indirect and circumstantial. But the better view is that evidence of such statements is not merely hearsay. Even when the testimony proffered is not that of the maker of the statement, but that of a person who heard the author make the statement, it is original evidence. It is because the making of the statement has independent evidentiary value in proving the author's intentions, those intentions being a fact in issue or a fact relevant to a fact in issue, that the witness's testimony does not infringe the hearsay rule. It is original evidence rather than an exception to the hearsay rule". It was not argued that Walton was wrongly decided, or that, as an example of the acceptance of evidence of an out-of-court statement of intention, it could be distinguished. In Walton, the evidence in question was that of witnesses who said that the deceased person had told them she intended to meet the accused at a certain time and place. That intention was held to be relevant, and the deceased's statements were held to be probative of that intention. The majority held that the evidence was admissible. The approach of Mason CJ is set out above. Wilson, Dawson and Toohey JJ, on the other hand, acknowledged that "an element of (1989) 166 CLR 283 at 288-289. McHugh hearsay [could] be said to be present"6, but considered that this "need not necessarily preclude evidence of [the] kind being treated as conduct from which an inference can be drawn rather than as an assertion which is put forward to prove the truth of the facts asserted." There being no challenge to Walton, it is unnecessary to pursue the significance, if any, of the difference in the majority reasoning. It may be noted that, in those Australian jurisdictions where the Uniform Evidence Act applies, it is now provided by statute that the hearsay rule does not apply to evidence of a representation made by a person being a contemporaneous representation about the person's intention7. That legislation, however, is not in force in South Australia. The decision of the Court of Criminal Appeal on the point was correct. Conclusion The grounds of appeal all fail. The appeal should be dismissed. (1989) 166 CLR 283 at 302. eg Evidence Act 1995 (Cth), s 72. Kirby KIRBY J. For the reasons given by Gleeson CJ and McHugh J8, the appellant's first two grounds of appeal fail. However, like Heydon J9, I have difficulties with some of the reasoning of Mason CJ in Walton v The Queen10 relied on by Gleeson CJ and McHugh J to sustain their dismissal of the third ground of appeal11. With respect, I find the dissenting reasons of Deane J in Walton compelling as a matter of logic and principle. Although, for the reasons given by Heydon J, the point was not argued, the point is one of law. It is directly applicable to this case. Dissecting the "McDonald's conversation" between Mr Simoniuk and Mr Zappia into (1) a fact that the conversation occurred and (2) a fact that emerged in the conversation, and distinguishing that fact from (3) the inculpating content of the conversation as to intention, requires a feat of mental gymnastics that should be avoided in the highly practical context of a criminal trial. This is especially so because usually (unlike in this case) the permissible process of reasoning must be explained to, and performed by, a jury. Because in this appeal there was no direct challenge to the reasoning of Mason CJ in Walton and because the residual common law rule has been overtaken in four Australian jurisdictions by the Uniform Evidence Acts12, I would not struggle in this instance to resolve the point concerning the statement of intention of Mr Zappia. It is itself a point that is becoming esoteric for most legal and practical purposes. Like Heydon J, I am content to assume that, on the third ground, the appellant might strictly have been able to establish a misdirection of law on the part of the trial judge, if the applicable common law were properly applied. However, for the reasons given by Heydon J13, such an error gives rise to no relief in this case. The third category of challenged evidence is ultimately of minor consequence. The prosecution case against the appellant was compelling. The appellant's conviction was inevitable on the admissible evidence. The 8 Reasons of Gleeson CJ and McHugh J at [12]-[24]. 9 Reasons of Heydon J at [37]-[39]. 10 (1989) 166 CLR 283 at 288-289. 11 Reasons of Gleeson CJ and McHugh J at [22]-[23]. 12 See Evidence Act 1995 (Cth), s 72 (applicable in the ACT by s 4); Evidence Act 1995 (NSW), s 72; Evidence Act 2001 (Tas), s 72. 13 Reasons of Heydon J at [39], referring to the Criminal Law Consolidation Act 1935 (SA), s 353(1). Kirby outcome was in every other way accurately reasoned by the trial judge. The Court of Criminal Appeal would have been bound to apply the proviso14. On the third ground, there has been no substantial miscarriage of justice. I agree, therefore, that the appeal should be dismissed. 14 See Kelly v The Queen (2004) 78 ALJR 538 at 551 [56], 563 [123]; 205 ALR 274 Hayne HAYNE J. I agree that the appeal should be dismissed. For the reasons given by Gleeson CJ and McHugh J, the first two grounds of appeal fail. The third ground of appeal raised more difficult issues. Consistent with what was decided in Walton v The Queen15, the ground must fail. Neither the decision in Walton nor the applicability of principles derived from it was put in issue in this appeal. The fundamental proposition that there is a real and radical distinction between tendering evidence of an out of court assertion as proof of the content of the assertion and tendering proof of an out of court assertion as proof only of the fact that it was made is undoubted. If there is a difficulty about the application of that distinction it lies, at least in part, in identifying why the fact that an out of court assertion was made is relevant to an issue in the case except for the purpose of demonstrating the truth of the content of the assertion. Where an out of court assertion is tendered to demonstrate that the person making the assertion then had a particular intention, the line between proof of the fact asserted and proof of the fact that the assertion was made is difficult to draw. No less importantly, the fact that the person then had a particular intention must often find its relevance to the facts in issue in a chain of reasoning which begins by accepting that the expressed intention not only was truly held but would probably be acted on. In the present case, it is not self-evident how a statement of the co-accused's intention was relevant to any issue in the appellant's trial. It is, however, not necessary to pursue any of these questions. The evidence against the appellant, apart from the conversation the subject of ground 3, was overwhelming. 15 (1989) 166 CLR 283. HEYDON J. I agree with the reasons of Gleeson CJ and McHugh J for rejecting the first two grounds of appeal. The third ground of appeal concerns the reception of Simoniuk's evidence that Zappia had told him at a McDonald's restaurant that he and the appellant were planning to catch up with Rasti. The trial judge admitted the evidence as an act in furtherance of the common purpose of Zappia and the appellant. The Court of Criminal Appeal concluded that it was not an act of that kind, but upheld the reception of the evidence on the basis that it proved Zappia's intention. In this Court the Crown submitted in writing that evidence of Zappia's intention to catch up with Rasti was relevant to a fact in issue, namely whether Zappia committed the murder, and that it was significant because the appellant and Zappia were together at the time when Rasti and Ellul were murdered16. The appellant's argument was that Zappia's intention to catch up with Rasti was irrelevant, for the reason that it had not been shown that Zappia and the appellant were in each other's company on the night of 2-3 April 2000 continuously, and hence no inference could be drawn that if Zappia was carrying out his intention, the appellant was present. This argument fails on the grounds given by Gleeson CJ and McHugh J: there was ample material from which to infer that Zappia and the appellant were in each other's company at all relevant times on the night of 2-3 April 2000. The appellant advanced no other argument to the effect that the words to which Simoniuk testified were not admissible evidence either of Zappia's intention or of the fact that it was carried out. The appellant appeared to accept the applicability of Walton v The Queen17. In that case the four majority Justices held that testimony by certain witnesses that another person, with whose murder the accused was charged, had stated an intention to meet the accused at a particular place β the Town Centre β proved the existence of that intention and was admissible on that basis18. Mason CJ held that the evidence was also admissible on the issue of whether the intention was carried out β to prove both that the deceased went to the Town Centre and that the deceased met the accused there. Wilson, Dawson and Toohey JJ were silent on that issue, beyond saying that the trial judge correctly explained the use to be made of the evidence. The trial judge said that the evidence tended to prove the deceased's state of mind and 16 This was contradicted by an oral argument that evidence of Zappia's intention "does not prove by itself that he did catch up at any stage with β¦ Rasti". If that was so, it is unclear how it would be relevant. 17 (1989) 166 CLR 283. 18 (1989) 166 CLR 283 at 289 per Mason CJ, 305 per Wilson, Dawson and explained why the deceased left the house where the witnesses heard her statements of intention and why she caught a particular bus; but he warned the jury that the evidence must not be treated as evidence that she did in fact meet the accused19. Yet it is hard to see how the intention was relevant unless it was used for that purpose, as Mason CJ did. Deane J dissented: he thought that the evidence was not admissible to prove either that the deceased went to the Town Centre or that she met the accused there, and he thought that the evidence of intention was not otherwise admissible20. As Mason CJ acknowledged, the authorities were "in a state of disarray"21. The decisive factor in Mason CJ's conclusion that the evidence was rightly admitted was that another witness proved an admission by the accused that he had made an arrangement to meet the deceased at the Town Centre22. In the present case, the Court of Criminal Appeal, like Mason CJ in Walton v The Queen, appeared to uphold the admission of the evidence to prove that Zappia's intention was carried out23. As noted above, the Crown contended in this Court that it was admissible on that basis. However, quite apart from the condition of the authorities, the force of Deane J's dissenting judgment, the questionable nature of Mason CJ's reliance on other evidence to lever the evidence as to the deceased's intentions into admissibility and the absence of relevant reasoning in the joint judgment, Walton v The Queen has been attacked to some effect24. The proposition stated in the passage from Walton v The Queen quoted by Gleeson CJ and McHugh J that past statements by a person who is not a party about that person's intentions, which are reported to the court by that person or another witness, are admissible is certainly true in some circumstances. However, it is highly controversial whether those statements are generally admissible to prove that the intention was carried out or that an intention to do an act with a second person is evidence that that act was performed. 19 (1989) 166 CLR 283 at 300. 20 (1989) 166 CLR 283 at 307. 21 (1989) 166 CLR 283 at 289-291. 22 (1989) 166 CLR 283 at 291-292. 23 Lander J said (R v Kamleh [2003] SASC 269 at [244], Debelle and Nyland JJ agreeing): "[The Crown] argued that the statement was admissible to establish β¦ Zappia's intention and his intention was relevant because it was the appellant's case that he and β¦ Zappia were never outside each other's company over the whole of the relevant period. I agree with that submission." 24 Tapper, "Hillmon Rediscovered and Lord St Leonards Resurrected", (1990) 106 Law Quarterly Review 441. The parties did not advance any arguments on these questions. In particular, the appellant advanced no argument challenging Walton v The Queen. From his point of view it stands as a decision of this Court, whatever the merits of its reasoning, and it was no doubt correctly thought better to seek to outflank it than assault it frontally. For its part, the Crown did not seek to explain how Zappia's intention was relevant unless it could be inferred that it was carried out, and did not explain how the reasoning in Walton v The Queen could be applied here. In the absence of any argument on these issues it is undesirable to decide whether the Court of Criminal Appeal's decision to uphold the trial judge's reception of the evidence was open to doubt. In any event, even if the Court of Criminal Appeal erred, no substantial miscarriage of justice occurred within the meaning of s 353(1) of the Criminal Law Consolidation Act 1935 (SA), since the appellant's conviction was inevitable for the following reasons. the first place, the McDonald's restaurant the admission of conversation, which occurred 10 days before the killings, can have had only a marginal impact on the appellant's interests in view of the admission of the Hectorville conversation to the same effect in more menacing circumstances, which included Zappia's request for ammunition, and occurred a few hours before the killings. Secondly, there was very strong direct evidence against the appellant in the form of his confession to Loader that he murdered the victims. Thirdly, there was the strong circumstantial evidence referred to by Gleeson CJ and McHugh J. This included visual and oral identification evidence, fingerprint evidence and DNA evidence suggesting that Zappia was in the flat at the relevant time, and that the appellant was there with him; evidence of conduct suggesting a consciousness of guilt in the attempted procurement of a false alibi by the appellant's cousin, the apparently orchestrated false alibis by Zappia and the appellant in their police interviews, and the appellant's lies to the police about his alibi and about when he last saw Rasti; Simoniuk's evidence about what Zappia said to him on the evening of 3 April 2000, revealing what is in South Australia known as "esoteric knowledge"25; and evidence that a mobile phone which was lent by the appellant to Rasti, and which was used by Rasti up until the time of the killings, could not be found at the scene of the crime or elsewhere. The grounds of appeal fail and the appeal should be dismissed. 25 See In re Van Beelen (1974) 9 SASR 163 at 215-216, 225 per Walters, Wells and Jacobs JJ. See also Wells J's ruling at trial in R v Szach (1980) 23 SASR 504 at 529-530, his summing up quoted at 572, King CJ's approval of Wells J's approach at 572-573, Legoe J's agreement at 588-589, and Mohr J's agreement at 594. |
HIGH COURT OF AUSTRALIA APPELLANT AND THE STATE OF WESTERN AUSTRALIA RESPONDENT Carr v The State of Western Australia [2007] HCA 47 23 October 2007 ORDER Appeal dismissed. On appeal from the Supreme Court of Western Australia Representation N J Mullany with L M Timpano for the appellant (instructed by D G Price & Co) S Vandongen with T B L Scutt for the respondent (instructed by Director of Public Prosecutions (WA)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Carr v The State of Western Australia Criminal law β Evidence β Admissibility of videotape evidence of admissions recorded without suspect's consent β Police videotaped conversation with appellant in the lockup section of the police station β Appellant was unaware lockup conversation was being videotaped β Appellant made certain admissions β Whether lockup conversation was an "interview" within the meaning of s 570(1) of the Criminal Code (WA) ("the Code") β Relevance of formality of the lockup conversation β Whether s 570D(4) of the Code excluded, by implication, admissibility of videotape evidence of admissions recorded without suspect's consent β Relevance of assumption in s 570D(4)(c) of the Code that consent required β Difference between implication and assumption β Whether an "admission" within the meaning of s 570D of the Code included only those admissions capable of being videotaped. Statutes β Interpretation β Purposive interpretation β Where the statutory provision reflects compromise between competing interests β Relevance of purpose or object of statute. Words and phrases β "admissibility", "assumption", "consent", "exceptional circumstances", "formality", "implication", "interview", "right to silence". Criminal Code (WA), Ch LXA, ss 570(1), 570D. Interpretation Act 1984 (WA), s 18. GLEESON CJ. I agree with Gummow, Heydon and Crennan JJ that the appeal should be dismissed. As to what their Honours describe as the second branch of the appellant's submissions, concerning the absence of consent to videotaping, I shall state my own reasons for not accepting those submissions of the appellant. Subject to that, I agree with the joint reasons. One preliminary matter should be noted. It is not a rule of the common law, and it was not suggested in argument, that the trial judge was bound to exclude the evidence in question because the police did not caution the appellant at the commencement of, or during, the events that occurred in the lockup. It is not a principle of the common law that evidence of an admission, or a confession, to a police officer is inadmissible unless a caution is first administered. If that were the common law, then the Judges' Rules of 1912 would have been based upon a misconception1. The true position is that failure to administer a caution may enliven a judicial discretion as to whether to receive or reject the evidence. Thus, in the reasons of Dixon CJ, Webb and Kitto JJ in Stapleton v The Queen2, the following appears: "It was said that the learned judge should have excluded the evidence given by Sergeant Mannion of what the appellant said in answer to his question[s] when the appellant was brought to the police station after his arrest. As has already been said, although the accused was under arrest on a charge of murder, no warning was given before the questions were put. The answers were not, however, inadmissible at common law as involuntary. True it is that Sergeant Mannion was a person in authority within the meaning of that rule. But there was no pressure or insistence, no fear of prejudice raised or hope of advantage held out, no inducement the prisoner's raising a presumption against statements. Counsel for the appellant did not contend to the contrary. What he maintained was that in the exercise of the judge's discretion he ought to have excluded the evidence." the voluntariness of In this case, two of the grounds of appeal to the Western Australian Court of Appeal complained that the evidence in question should have been rejected, on discretionary grounds, because of the absence of a caution in the lockup. Those grounds of appeal were considered and rejected, and are not before this Court. If there were a common law rule of mandatory exclusion because of the failure to administer a caution, arguments about the construction of s 570D of the Criminal Code (WA) ("the Criminal Code") would be otiose. It was (for good reason) not argued that there was a common law principle that obliged the trial judge to 1 See Cross on Evidence, 7th Aust ed (2004) at [33690]. (1952) 86 CLR 358 at 375-376. exclude the evidence. The Court of Appeal ruled that considerations of fairness and public policy did not mean that the trial judge's decision to admit the evidence involved error. It is unnecessary to refer to the reasons of the Court of Appeal on that point, but the fact that discretionary arguments were raised and rejected should not be overlooked. The appeal to this Court turns entirely upon questions of statutory construction. To the extent that s 570D is to be understood and applied in the context of common law principles, one of the relevant common law principles is that there are discretionary grounds, related to considerations of fairness and public policy, upon which a trial judge may reject evidence of admissions made by a person suspected of crime3. Section 570D did not displace that principle, but provided an additional, statutory, ground of mandatory exclusion in specified circumstances. If the facts of a given case do not fall within the specified circumstances, the common law grounds of exclusion, including discretionary grounds relating to fairness and public policy, remain. Another general consideration relevant to statutory construction is one to which I referred in Nicholls v The Queen4. It was also discussed, in relation to a similar legislative scheme, in Kelly v The Queen5. It concerns the matter of purposive construction. In the interpretation of a provision of an Act, a construction that would promote the purpose or object underlying the Act is to be preferred to a construction that would not promote that purpose or object. As to federal legislation, that approach is required by s 15AA of the Acts Interpretation Act 1901 (Cth) ("the Acts Interpretation Act"). It is also required by corresponding State legislation, including, so far as presently relevant, s 18 of the Interpretation Act 1984 (WA). That general rule of interpretation, however, may be of little assistance where a statutory provision strikes a balance between competing interests, and the problem of interpretation is that there is uncertainty as to how far the provision goes in seeking to achieve the underlying purpose or object of the Act. Legislation rarely pursues a single purpose at all costs. Where the problem is one of doubt about the extent to which the legislation pursues a purpose, stating the purpose is unlikely to solve the problem. For a court to construe the legislation as though it pursued the purpose to the fullest possible extent may be contrary to the manifest intention of the legislation and a purported exercise of judicial power for a legislative purpose. 3 See, for example, R v Swaffield (1998) 192 CLR 159. (2005) 219 CLR 196 at 207 [8]. (2004) 218 CLR 216 at 225-232 [22]-[40]. To take an example removed from the present case, it may be said that the underlying purpose of an Income Tax Assessment Act is to raise revenue for government. No one would seriously suggest that s 15AA of the Acts Interpretation Act has the result that all federal income tax legislation is to be construed so as to advance that purpose. Interpretation of income tax legislation commonly raises questions as to how far the legislation goes in pursuit of the purpose of raising revenue. In some cases, there may be found in the text, or in relevant extrinsic materials, an indication of a more specific purpose which helps to answer the question. In other cases, there may be no available indication of a more specific purpose. Ultimately, it is the text, construed according to such principles of interpretation as provide rational assistance in the circumstances of the particular case, that is controlling. As explained in Kelly and Nicholls, the general purpose of legislation of the kind here in issue is reasonably clear; but it reflects a political compromise. The competing interests and forces at work in achieving that compromise are well known. The question then is not: what was the purpose or object underlying the legislation? The question is: how far does the legislation go in pursuit of that purpose or object? Section 570D, which took its place in the context of Ch LXA dealing with "Videotaped interviews", provided, in sub-s (2), that, on the trial of an accused person for a serious offence, evidence of any admission by the accused person should not be admissible unless either the evidence took a certain form (a videotape recording of the admission), or the prosecution proved that there was a reasonable excuse for there not being such a videotape recording, or there were exceptional circumstances which, in the interests of justice, justified the admission of the evidence. The section established a mandatory rule of exclusion of evidence of an admission unless the evidence was in the form of a videotape; but the rule was subject to two qualifications. That was the method chosen by the legislature to pursue the general purpose described in Kelly and in Nicholls. Subject to two qualifications, the section excluded evidence of an admission unless the admission was in a certain form. Other provisions of Ch LXA regulated certain aspects of dealing with videotapes and related matters, but we are concerned only with the statutory rule of exclusion of evidence. If the evidence of the admission was in the form referred to, that is to say, if the evidence was a videotape on which was a recording of the admission, then the statutory rule of exclusion did not apply. The qualifications to the rule did not arise for consideration. As noted earlier, there were and are potentially relevant common law rules that could result in the exclusion of the evidence, but they are not of present concern. Once the appellant's first argument concerning the meaning of "interview" is rejected (as it should be for the reasons given by Gummow, Heydon and Crennan JJ) then it follows that the evidence of the admission by the appellant was in the form of a videotape on which there was a recording of the admissions. According to the express terms of s 570D(2), the statutory rule of exclusion does not apply, and it is therefore unnecessary to consider the statutory qualifications to the rule. The argument that, because the appellant did not consent to the interview in the lockup being videotaped, s 570D (as distinct from some other statutory provision or rule of common law) required exclusion of the videotape depends upon reading s 570D as containing some rule of exclusion wider than that stated in s 570D(2). The express words of s 570D(2) did not require exclusion of the videotape. If, by implication, the exclusion effected by s 570D was wider than appears from its express terms, then it is necessary for the appellant to identify the terms of the implication, and to explain why it should be made, bearing in mind that what is involved is an exercise in construction, not legislation6. The appellant put an argument based on what was said in my reasons in Nicholls7, not about an implication, but about an assumption. I pointed out that s 570D(4)(c) assumed that the consent of a suspected person was necessary if the police were to videotape an interview. That appeared to me to be so because, in elaborating one of the qualifications to the statutory rule of exclusion, the legislation provided that it was, by definition (ie in all circumstances), a reasonable excuse for there not being a recording of an admission on a videotape that the accused person did not consent to the interview being videotaped. Why it would always (rather than sometimes) be a reasonable excuse for not videotaping an interview that the interviewee did not consent to the videotaping is hard to explain unless it is assumed that consent is necessary. I went on immediately to point out that the assumption was not challenged in argument. It should be added, however, that the basis of the assumption was questioned from the Bench. The transcript of argument in Nicholls8 records that counsel for the respondent, having accepted that videotaping required the consent of an interviewee, was asked to explain why that was so. He was asked whether it was because of some other legislation. He said he could not point to any other legislation. Section 570D did not say, and no other provision in Ch LXA said, that videotaping could not occur without consent. By making absence of consent always a reasonable excuse for there being no videotape, the legislation appeared to assume that consent was necessary, but there is a difference between an assumption and an implication. 6 See Wentworth Securities Ltd v Jones [1980] AC 74 at 105-106 per Lord Diplock; Inco Europe Ltd v First Choice Distribution [2000] 1 WLR 586; [2000] 2 All ER 109; Kingston v Keprose Pty Ltd (1987) 11 NSWLR 404 at 423; R v Young (1999) 46 NSWLR 681 at 686-687 [5]-[12]. (2005) 219 CLR 196 at 207-208 [9]. [2004] HCATrans 124 at 84, 90. The difference between an implication and an unexpressed assumption was described as critical by Mason CJ, in a constitutional context, in Australian Capital Television Pty Ltd v The Commonwealth9. He said: "It may not be right to say that no implication will be made unless it is necessary. In cases where the implication is sought to be derived from the actual terms of the Constitution it may be sufficient that the relevant intention is manifested according to the accepted principles of interpretation. However, where the implication is structural rather than textual it is no doubt correct to say that the term sought to be implied must be logically or practically necessary for the preservation of the integrity of that structure. It is essential to keep steadily in mind the critical difference between an implication and an unexpressed assumption upon which the framers proceeded in drafting the Constitution. The former is a term or concept which inheres in the instrument and as such operates as part of the instrument, whereas an assumption stands outside the instrument." The task for the appellant is to show the existence of an implied rule of exclusion of evidence, that is to say, to show that the express statement of the rule of exclusion in s 570D(2) was incomplete, and that, by implication, the section also mandated the exclusion from evidence of a videotape to the making of which the interviewee had not consented. It is unnecessary to pursue the question of what is involved in the expression "did not consent to the interview being videotaped" in s 570D(4)(c). Whether it applied only to a case of refusal, or whether it covered any case of absence of consent, is a problem that does not arise. Here, there was a videotape, and therefore no need to show a reasonable excuse existed. In any event, I am prepared to accept that the appellant did not consent to the videotaping, whatever exactly that means. There may be cases in which one provision in an enactment throws light upon the meaning of another provision by indicating a legislative assumption about that meaning. An example is Meyer Heine Pty Ltd v China Navigation Co Ltd10, where the general words of a statutory prohibition of conduct were silent on the territorial reach of the prohibition (a common circumstance in criminal legislation). There arose a question of construction as to whether the general words of prohibition applied to conduct outside Australia or applied only to (1992) 177 CLR 106 at 135 (reference omitted). 10 (1966) 115 CLR 10. conduct within Australia; that is, whether the prohibition operated extra- territorially. In deciding that the prohibition did not apply to conduct outside Australia, this Court relied strongly upon another provision of the statute, concerning aiding and abetting, which reflected an assumption that conduct which took place outside Australia could not amount to a contravention of the Act. That assumption was consistent with a view about the legislative competence of the Australian Parliament which was widely held at the time of the enactment. General words of prohibition were therefore construed so as to be given a limited territorial operation. That construction was assisted by a manifestation, elsewhere in the Act, of a legislative understanding that the prohibition's reach was limited territorially. Reading down general words in order to give them a limited effect territorially is a commonplace exercise in statutory construction. In this case, however, no such exercise is proposed. There are no words in s 570D whose meaning is said to be made clear by noting the assumption in s 570D(4)(c). What is involved in the appellant's argument is an attempt to elevate the assumption directly into an implied widening of, or addition to, the rule of exclusion stated in s 570D(2), but no process of construction by which that can occur has been shown. The assumption might be explained in a number of ways. It might reflect a view of the law. (This is what was questioned in the course of argument in Nicholls.) It might be the result of an oversight. It may be that the framers of Ch LXA did not advert to circumstances of the kind that arose in the present case. That would not be surprising. Whatever be the true explanation, it is beside the point unless, by some legitimate process of construction, s 570D could be given the meaning that, in addition to the rule of exclusion stated in s 570D(2), a videotape was to be excluded if the interviewee did not consent to the making of the videotape. It cannot be said that the implication for which the appellant contends resolves, consistently with the advancement of the underlying purpose or object of the legislation, some ambiguity in the language of s 570D(2). That is not an end of the matter. Statutory construction is not confined to the resolution of ambiguities in language11. Since the object of the appellant's argument is to add, by implication, a ground of mandatory exclusion of evidence to that stated expressly in s 570D(2), the appellant must show (to adopt the modern test) that to confine the grounds of exclusion to that stated in s 570D(2) would defeat the purpose of the statute12, or (to adopt a test formulated in earlier times) that to read s 570D(2) according to its terms produces a result contrary to the necessary 11 Inco Europe Ltd v First Choice Distribution [2000] 1 WLR 586 at 592 per Lord Nicholls of Birkenhead; [2000] 2 All ER 109 at 115. 12 Wentworth Securities Ltd v Jones [1980] AC 74 at 105-106. intendment of the language of the statute13. In the circumstances of the present case, I see no material difference between these two tests. The essential problem for the appellant is that of which I spoke earlier. Section 570D established a qualified, but otherwise specific, rule of exclusion of evidence of admissions. That, on any view of the matter, was only a limited step in pursuit of the object of protecting citizens against unfair police conduct, and protecting the integrity of the administration of criminal justice. To read s 570D as containing another ground of exclusion of evidence would only be to take a further limited step in pursuit of the same object. The legislation plainly did not attempt to deal with all possible problems of police misconduct or accusations of such misconduct. It cannot be said that the underlying purpose of the statutory provision would be defeated unless there were two limited rules of exclusion rather than one. The ground of exclusion stated in s 570D(2) was complete in itself. No additional ground of exclusion was implied. 13 Worrall v Commercial Banking Co of Sydney Ltd (1917) 24 CLR 28 at 32. Crennan GUMMOW, HEYDON AND CRENNAN JJ. On 25 November 2004, at a trial in the Supreme Court of Western Australia before Jenkins J and a jury, the appellant was convicted of aggravated armed robbery contrary to s 392 of the Criminal Code (WA) ("the Criminal Code"). He was sentenced by Jenkins J on 20 January 2005 to six years' imprisonment without parole. His conviction was in respect of an armed robbery committed at the South Perth branch of the Commonwealth Bank on 8 April 2003. An application for an extension of time to apply for leave to appeal against conviction and sentence was dismissed on 28 June 2006 by the Court of Appeal (Steytler P, McLure and Buss JJA)14. The evidence against the appellant comprised substantially his admissions to police. Those admissions were recorded on videotape, and the issue on the appeal to this Court is whether that videotape was properly received in evidence. The resolution of that question turns on the construction of Ch LXA of the Criminal Code (ss 570-570H) which is headed "Videotaped interviews". The appellant was aged 26 at the time of his sentencing. He was arrested on 30 July 2003 and after a search of the house where he lived with his mother he was taken to the Kensington police station. There he was questioned by police officers. That questioning occurred in an interview room between 6:57 pm and 7:26 pm, and was recorded by videotape. During that questioning, the appellant was told that the interview was being recorded and that its contents could be used in court as evidence against him. He did not make any substantial admissions during the course of that questioning. There were three occasions on which he expressed a desire to have a lawyer present. The first was soon after the interview began, but he consented to answer questions. Later he expressed a desire to speak to his lawyer before providing an alibi. And at the end of the meeting, on being told "If you wish to hold off and talk to your lawyer, please do", he said he did. After the questioning in the interview room, and after an unrecorded cigarette break with the police officers, the appellant was taken to the lockup section of the police station. There the officers undertook various administrative tasks regarding the appellant, such as making entries into police databases, returning the appellant's property, photographing him and taking DNA samples. These activities were routine, and were not contrived. They were undertaken because the appellant was to be returned to prison by reason of his violation of 14 (2006) 166 A Crim R 1. Crennan the terms of his parole relating to a previous conviction. The appellant had not then been charged in relation to the Commonwealth Bank robbery. In the course of undertaking these tasks in the lockup, the discussion between the appellant and the police began in a question-and-answer format in order to elicit the information that was being entered into the police records. It was not idle banter or chit-chat. Shortly into that discussion, the appellant initiated a wider conversation with the police officers, during which he made suggestions indicating his involvement in the bank robbery. The police officers responded to these suggestions by asking questions intended to elicit more information and admissions about the robbery. The conversation resulted in a sequence of substantial admissions by the appellant about the conduct of the robbery which strongly indicated his guilt. The appellant had been cautioned both during the search of his place of residence and during the preceding interrogation in the interview room. No further caution was given by the police officers during the conversation in the lockup. At the time the appellant made his admissions, the officers knew that the lockup was being recorded for security and other purposes by fixed surveillance cameras and microphones. There was thus an accurate video recording of the appellant's admissions, and an edited version of that video was admitted as Ex 17 and shown to the jury at the trial. The camera and microphones were permanently fixed in the lockup. They were not concealed, although there was some doubt as to how readily apparent they were to observers. In any event, the appellant was unaware of their presence. The appellant gave evidence at his trial. Although he did not deny making the admissions, he claimed that they were untrue and that he made them solely to "frustrate", "tease" or "piss off" the police, as he bore the police significant animosity. The appellant contends in this Court that s 570D(2) of the Criminal Code barred the receipt of Ex 17 into evidence and that his conviction should be quashed and an acquittal entered. Chapter LXA of the Criminal Code Chapter LXA commences with a sequence of definitions in s 570(1). These include the following: "'interview' means an interview with a suspect by ... a member of the Police Force; ... 'suspect' means a person suspected of having committed an offence; Crennan 'videotape' means any videotape on which is recorded an interview, whether or not it is the videotape on which the interview was originally recorded." The Chapter contains detailed provisions regarding the possession, broadcast, interviews retention, distribution and use of videotapes of (ss 570A-570H). The determinative provision for this appeal, s 570D, lies in the midst of these. It is headed "[a]ccused's admissions in serious cases inadmissible unless videotaped" and relevantly provides: In this section β 'admission' means an admission made by a suspect to a member of the Police Force β¦ whether the admission is by spoken words or by acts or otherwise; 'serious offence' means an indictable offence of such a nature that ... it can not be dealt with summarily ... (2) On the trial of an accused person for a serious offence, evidence of any admission by the accused person shall not be admissible unless β the evidence is a videotape on which is a recording of the admission; or the prosecution proves, on the balance of probabilities, that there is a reasonable excuse for there not being a recording on videotape of the admission; or the court is satisfied that there are exceptional circumstances which, in the interests of justice, justify the admission of the evidence. Subsection (2) does not apply to an admission by an accused person made before there were reasonable grounds to suspect that he or she had committed the offence. For the purposes of subsection (2), 'reasonable excuse' includes the following β (a) The admission was made when it was not practicable to videotape it. (b) Equipment to videotape the interview could not be obtained while it was reasonable to detain the accused person. Crennan (c) The accused person did not consent to the interview being videotaped. (d) The equipment used to videotape the interview malfunctioned." A number of preliminary points about this legislation should be made. First, Ch LXA of the Criminal Code has been replaced by Pt 11 of the Criminal Investigation Act 2006 (WA) ("the 2006 Act"). While the entry into force of the 2006 Act may resolve some of the difficulties in Ch LXA revealed in the present case, other matters including the definition of "interview" may be of continuing relevance. Secondly, Ch LXA relies upon an interlocking series of definitions. Thus, the criteria for admissibility in sub-s (2) of s 570D turn upon the definition of "videotape" given in s 570(1), and hence upon the meaning of "interview" in that sub-section. This may be contrasted with s 118 of the 2006 Act, which requires an "audiovisual recording" of an "admission", rather than a "videotape" of an "interview". Thirdly, the criteria in s 570D are phrased in the negative. The legislation provides that evidence "shall not be admissible unless" the criteria are fulfilled, rather than providing that evidence "shall" be admissible "if" the criteria are fulfilled. It is accepted that evidence the admissibility of which is not barred by s 570D, nevertheless may be rejected by common law exclusionary principles, and that, conversely, admissions to which no common law objections might properly be taken nevertheless might be barred from receipt into evidence by reason of non-compliance with s 570D. The preliminary ruling In advance of the trial, Wheeler J had dismissed an application by the appellant for a ruling that the videotape of the conversation in the lockup was inadmissible. The appellant had contended that "interview" as defined in s 570(1) of the Criminal Code required a degree of formality lacking in the conversation in the lockup. Wheeler J rejected this submission, saying that s 570D was: "directed to the very real problem of the disputed admissions and of the vulnerability of persons in police custody to what was seen as potential misrepresentations or, indeed, even fabrications of what had been said by them to police officers, so that the mischief at which [the section] was aimed was β¦ any conversation between police officers and a suspect Crennan which could result in an admission, and I for my part would read the reference to an interview with that beneficial purpose in mind." Her Honour also rejected submissions that the evidence nevertheless be excluded in the interests of justice. In particular, she stressed that it was not suggested that the admissions were not made voluntarily or that force, trickery or other improper conduct had been present. The Court of Appeal The leading judgment was given by Buss JA, with whom Steytler P and McLure JA agreed. His Honour set out the relevant legislation and, after referring to the decisions of this Court in Kelly v The Queen15 and Nicholls v The Queen16, concluded as follows17: "The legislative purpose in enacting s 570D was to prohibit, subject to the exceptions in paras (a), (b) and (c) of s 570D(2), the reception at trial of unrecorded admissions by an accused to the police. It is necessary, in order to promote this purpose, that 'interview' be construed broadly. An 'interview' is not confined to a formal interrogation. In my opinion, 'interview', within the definition of 'videotape' and in the context of para (b) of s 570D(2), means any conversation between a member of the Police Force and an accused person in relation to an alleged offence. It includes an informal conversation initiated by the accused person. In Nicholls, Gleeson CJ said18: 'Section 570D(4)(c) assumes that the consent of a suspected person is necessary if the police are to videotape an interview. That assumption was not challenged in argument in this Court.' If, with great respect, s 570D(4)(c) makes that assumption (an issue which is not referred to in the other judgments in Nicholls and which does not require resolution in this appeal), s 570D does not prohibit the reception at trial of admissions by an accused person which are recorded on videotape 15 (2004) 218 CLR 216. 16 (2005) 219 CLR 196. 17 (2006) 166 A Crim R 1 at 17. 18 (2005) 219 CLR 196 at 207 [9]. Crennan in circumstances where the accused did not know that the admissions were being recorded, and therefore was not given the opportunity to consent or refuse to consent to the interview being videotaped. Section 570D does not, however, restrict or otherwise affect the general discretion of a trial Judge to exclude evidence of admissions obtained in those circumstances on the ground of unfairness or public policy." Buss JA rejected the appellant's submission that the evidence of the conversation was inadmissible by reason of its not constituting an "interview". The common law and Ch LXA Before turning to the argument in this Court regarding Ch LXA of the Criminal Code, it is important to note that in this Court the appellant did not challenge the rejection both by Wheeler J and by the Court of Appeal of his submissions respecting the application of the common law exclusionary rules as to involuntariness, unfairness and public policy. There is accordingly no significance from these points of view in the failure of the police officers to repeat, during the conversation in the lockup, the cautions earlier administered (which did not, in any event, refer to any right to a lawyer, and did not have to), or in their failure to supply him with a lawyer during the conversation in the lockup. Nor would a firm basis for construction of any legislative regime be provided by invocation from the common law of "the right to silence". The reason appears from what was said by Gaudron ACJ, Gummow, Kirby and Hayne JJ in RPS v The Queen19: "That expression is a useful shorthand description of a number of different rules that apply in the criminal law20. But referring, without more, to the 'right to silence' is not always a safe basis for reasoning to a conclusion in a particular case; the use of the expression 'right to silence' may obscure the particular rule or principle that is being applied." In the passage from the speech of Lord Mustill in R v Director of Serious Fraud Office; Ex parte Smith21 to which reference was made in RPS, Lord Mustill said 19 (2000) 199 CLR 620 at 630 [22]. 20 R v Director of Serious Fraud Office; Ex parte Smith [1993] AC 1 at 30-31 per Lord Mustill. 21 [1993] AC 1 at 30-31. Crennan of the expression "the right of silence" that it "arouses strong but unfocused feelings" and went on to list six immunities to each of which the expression had been attributed. None of these would have fitted the facts in the present appeal. Something more should be said here respecting the absence from the common law of some general "right to" or "privilege of" silence which is wider than or different from a right or privilege not to answer questions asked by persons in authority22. In particular, the following points should be made. First, there is no principle of the common law that persons suspected by police officers of having committed a crime must be given a caution before interrogation in which they are warned of their right to silence, or that in default of such warning, evidence of any confession is automatically inadmissible. The only relevant common law principle is that a failure of police officers to warn in these circumstances may result in the trial judge exercising a power to exclude the evidence. If there were a common law principle of a type earlier described, it would not have been necessary to promulgate the Judges' Rules 1912, or their many equivalents in Australia. It would not have been necessary to enact legislation providing that evidence obtained after a failure to warn is presumed to have been obtained improperly, and liable to exclusion unless the desirability of admitting it outweighs the undesirability of admitting evidence obtained in that way23. And it would not have been necessary to enact legislation mandating warnings about the right to silence, as have some jurisdictions24. Secondly, there is no principle of the common law that persons suspected by police officers of having committed a crime must be advised that they are entitled to communicate with a legal practitioner before being interrogated, or that in default evidence of any confession is automatically inadmissible. If there 22 See the remarks of Brennan CJ in R v Swaffield (1998) 192 CLR 159 at 184-185 23 See, for example, Evidence Act 1995 (Cth), ss 138 and 139. 24 See, for example, Crimes Act 1914 (Cth), s 23F; Law Enforcement (Powers and Responsibilities) Act 2002 (NSW), s 122(1); Crimes Act 1958 (Vic), s 464A(3); Police Powers and Responsibilities Act 2000 (Q), s 431 and Police Powers and Responsibilities Regulation 2000, Sched 10, s 37; Criminal Investigation Act 2006 (WA), s 138(2)(b) and (3); Police Administration Act (NT), s 140. Crennan were such a principle, it would not have been necessary for those jurisdictions which have done so to have enacted legislation imposing a duty so to advise25. It is with that in mind that attention falls upon the regime established by Ch LXA of the Criminal Code. Counsel for the State was correct to characterise Ch LXA in general, and s 570D in particular, as a preliminary threshold or gateway, and not as an exhaustive criterion of admissibility. As remedial legislation Ch LXA should be given a beneficial interpretation but it should not be read as doing more work than that disclosed by its subject, scope and purpose. The submissions in this Court The appellant made three principal submissions regarding Ch LXA. First, he submitted that the videotape of his admissions was inadmissible as it did not record an "interview". In order to constitute an "interview", the conversation between the appellant and the police officers was said to require a "degree or element of formality", and this in turn was said to require an appreciation on behalf of the appellant that (a) the conversation in the police lockup was being recorded, and (b) what he said could be used in evidence in court against him. Since the conversation in which the appellant made his admissions did not meet this definition of "formality" and thus did not constitute an "interview", the evidence of his admissions was said to be inadmissible. Secondly, the appellant submitted that a videotape of an admission is not admissible unless the suspect consents to the interview being videotaped. The requirement of consent was said to be a "statutory assumption", or more correctly an implication, derived from the wording of par (c) of s 570D(4). Since the appellant did not consent to the videotape of his admissions being made, the videotape was said to be inadmissible on that account as well. This argument had not been put to the Court of Appeal. Thirdly, the appellant submitted that there was no "reasonable excuse" for the absence of a videotape complying with the statutory requirements, and that there were no "exceptional circumstances" justifying the admission of the evidence despite that non-compliance. 25 See, for example, Crimes Act 1914 (Cth), s 23G; Law Enforcement (Powers and Responsibilities) Act 2002 (NSW), s 123; Crimes Act 1958 (Vic), s 464C; Summary Offences Act 1953 (SA), s 79A; Police Powers and Responsibilities Act 2000 (Q), s 431 and Police Powers and Responsibilities Regulation 2000, Sched 10, s 34; Criminal Investigation Act 2006 (WA), s 138(2)(c) and (3); Criminal Law (Detention and Interrogation) Act 1995 (Tas), s 6. Crennan In response, the State submitted, first, that the appellant's construction of the term "interview" was erroneous and that the Court of Appeal had correctly decided that "interview" encompassed an informal conversation, including the one initiated by the appellant. Even if "formality" were required, the State submitted that the appropriate degree of formality was present on the facts. Secondly, the State submitted that there was no implied requirement of consent before a videotape could be admitted into evidence. Finally, the State supported the outcome in the Court of Appeal by a ground now advanced on a notice of contention. The ground is that even if the appellant's submissions as to the meaning of "videotape" and "interview" were correct, the appellant's admissions were properly admitted into evidence as there were "exceptional circumstances" within the meaning of par (c) of s 570D(2) justifying their admission. Those "exceptional circumstances" centred on the existence of an accurate videotape of the appellant's voluntary admissions regarding a serious offence. The meaning of "interview" in Ch LXA Beyond the clarification that "interview" means an "interview with a suspect by β¦ a member of the Police Force", the Criminal Code does not otherwise define the word "interview". The Court was taken to a number of dictionary definitions, none of which provided a clear resolution to the present case26. The appellant contended that "interview" connoted a "formal, unhurried interrogation procedure directed to the investigation of crime", as opposed to a chat, informal banter, or talk carried out in an atmosphere of informality. In part, this proffered definition was derived from dicta in the judgment of Wright J in R v McKenzie27. In that case certain admissions were ruled inadmissible because they were not recorded by videotape, not for the absence of an "interview". The appellant submitted that a mere conversation would not suffice to constitute an "interview". To this end, the appellant pointed to the absence of 26 Namely, those to be found in the Oxford English Dictionary, 2nd ed (1989), vol 8 at 3, and the Macquarie Dictionary, 4th ed (2005) at 743. Nor do those to be found in other dictionaries. One meaning of "interview" involves formality, but that meaning is not the only meaning. 27 [1999] TASSC 36 at [14]. Crennan any definition such as that found in s 74C of the Summary Offences Act 1953 (SA), in which "interview" is defined to include: a conversation; or part of a conversation; or a series of conversations". This comparison of the South Australian and Western Australian provisions is of doubtful utility. The South Australian provisions were inserted in 1995 by s 5 of the Statutes Amendment (Recording of Interviews) Act 1995 (SA), well after the enactment in 1992 of the relevant Western Australian provisions. The most that could be said is that the South Australian provision might tend to highlight an ambiguity in the Western Australian one, but it does nothing to resolve that ambiguity one way or the other. The inclusion of conversations in the South Australian definition says nothing about whether they are to be excluded from the Western Australian provision, which is silent on the matter. The appellant also contended that the "formality" of an interview required a "meeting of minds" about the nature, context and purpose of the discussion. However, that phrase is more likely to mislead than assist. The absence of a "meeting of minds" might indicate that the appellant's admissions were involuntary, or that they were elicited by unfair deception. Such cases can and should be dealt with under the common law exclusionary rules. They are not matters which touch upon the definition of "interview". Even if it be accepted that the term "interview" connotes a degree of formality, it is not apparent where that line is to be drawn. The conversation between the appellant and the police officers in the present case was no mere informal chit-chat: the police officers fell in with the appellant's style of speech, but they structured the relevant part of the conversation as a patient and deliberate sequence of questions and answers designed to elicit admissions. However, there is much force in the observation of Ormiston J in R v Raso that28: "it would be difficult to identify that form of questioning which constitutes an 'interview' and that which constitutes some less formal kind of questioning in circumstances where the questions are being administered by the police". 28 (1993) 115 FLR 319 at 348. Crennan Raso concerned the meaning of s 23V(1) of the Crimes Act 1914 (Cth) which at that time included the phrase "interviewed as a suspect"29. That legislation concerned the tape recording of such interviews, and Ormiston J considered it30: "artificial, and possibly conducive to the abuses which the legislation is trying to avert, to draw distinctions between questioning which takes place on a relatively casual basis and questioning which results from some formal or organised interview". The same is true of the present case. Contrary to the appellant's submissions, neither logic nor the text of Ch LXA justifies the conclusion that "formality" requires that the suspect appreciate that the conversation was being recorded and that its contents could be used as evidence against him. Rather, in an appropriate case these matters may attract the common law exclusionary rules relating to involuntariness, unfairness or public policy. In the absence of textual indicia, the appellant turned to argument based on what was said to be the purpose of Ch LXA. This was said to be "to facilitate formality and propriety throughout the interview ... process" and hence to "serve" the "protection and preservation of the integrity of the interview process generally". The appellant submitted that the "evident policy of the statutory regime" was that evidence of the appellant's admissions be inadmissible, as part of the "broader imperative" of the statute, namely to ensure the "formality" of the interview process and hence its "integrity". The appellant did not otherwise indicate, however, what this formality would require, nor did he indicate how it was to be manifested beyond the suggested requirements that a suspect be cautioned and consent before any interview is videotaped. It is difficult to see how any such policy of "formality" is evident either in the statute itself or in the extrinsic legislative materials. The term "interview" is largely undefined and on its face Ch LXA is unconcerned with the conduct of interviews beyond the requirement that they be videotaped if admissions made during them are to be admissible. Contrary to the appellant's contentions, nothing in the text or structure of the Chapter evinces any broader purpose of regulating the conduct of interviews. The textual indicia of Ch LXA all relate to 29 The sub-section has since been amended to read "questioned as a suspect": Measures to Combat Serious and Organised Crime Act 2001 (Cth), Sched 4, Item 54. 30 (1993) 115 FLR 319 at 348. Crennan the regulation of videotapes β their use, distribution and so forth β but not the regulation of interviews. Moreover, a consideration of the relevant extrinsic materials confirms this textual conclusion. In his second reading speech, the Attorney General stated that the Bill that inserted Ch LXA31: "makes provision with respect to the increasing use of video recordings of police interviews for indictable offences ... [and] will ensure that in serious cases an accused's confession will be inadmissible unless it has been videotaped. Exceptions to this rule will be permitted, subject to the court's discretion, to receive evidence of admissions which have not been videotaped, if this is in the interests of justice." Further, the appellant did not point to any passage in any of the reports32 which led to the enactment of legislation similar to s 570D supportive of his submission that their goal was to ensure the "formality" and "integrity" of the interview process. Even if the appellant were correct about the policy underlying Ch LXA of the Criminal Code, his construction of the term "interview" is inconsistent with his submission as to that underlying statutory purpose. If indeed Ch LXA is aimed at preserving the integrity of police procedure more generally, it seems odd that the requirement of videotaping should apply only to a vaguely defined subset of interactions between police and suspects, namely "formal" interviews. To the contrary, the text of the statute and its legislative history point towards its purpose as being the encouragement of video recording, and the expansion β and not restriction β of the circumstances in which video recording was appropriate. The public benefit in accurate video recordings is not limited to the recording of admissions by suspects. Legislation of the kind contained within Ch LXA of the Criminal Code exists in all Australian States. The broad purpose of such legislation was discussed by Gleeson CJ, Hayne and Heydon JJ in Kelly v The Queen33. In the absence of an accurate record of what occurred during police 31 Acts Amendment (Jurisdiction and Criminal Procedure) Bill 1992 (WA). Western Australia, Legislative Council, Parliamentary Debates (Hansard), 4 June 1992 32 Those reports are listed or referred to in Kelly v The Queen (2004) 218 CLR 216 at 227-228 [28] notes 32 and 33. 33 (2004) 218 CLR 216. Crennan interviews, disputes could readily occur about the authenticity of any admissions said to have been made during such interviews, and about the propriety of the conduct of the police officers in question. Their Honours said34: "The disputes could turn on questions not only of fabrication, but also of misunderstanding, misrecollection, coercion, or oppression in a broad sense. Considerable amounts of court time were taken up, generally in the absence of the jury, in resolving disputes about confessions. Considerable amounts of police time, too, were taken up in interviews slowly recorded by officers operating typewriters or writing in notebooks. Grave allegations were commonly made suggesting police perjury, brutality and pressure. Unfounded though many of these allegations may have been, they were damaging to public confidence in the criminal justice system. Over time the courts, law reform agencies and legislatures began to respond to this state of affairs. In particular, as audio recording became more common in commercial and social life, and as the necessary equipment became more efficient, easier to operate, and cheaper, it was increasingly suggested that, either as a matter of sensible practice or as a precondition to admissibility, police interviews in criminal investigations should be electronically recorded." Gleeson CJ, Hayne and Heydon JJ noted that the utility and desirability of an accurate video recording was not limited to ensuring the accuracy and voluntariness of any admission that was made, adding35: "[I]t came to be viewed as a commonplace, not only in circles favourable to defence interests but also in police circles, that, despite its financial cost, the electronic recording of police interviews, particularly video- recording, would generate real advantages. It would be useful in providing a means of establishing exactly what was said; in proving that requirements for cautioning and other formalities had been complied with; in narrowing the time within which it could be alleged that threats had been made; in helping to estimate the fairness and propriety of the questioning; and in helping to evaluate, by assessment of the demeanour and manner of the interviewee in responding, the reliability of what was said." One textual indicium in Ch LXA of this policy is the very choice of the word "interview", rather than merely "admission", in the definition of 34 (2004) 218 CLR 216 at 225-226 [25]. 35 (2004) 218 CLR 216 at 228 [29]. Crennan "videotape". The statutory definition would not be satisfied, for example, by a videotape that recorded only a string of admissions without the surrounding context of the interview during which they were made. In the present case, however, the jury was presented by the playing of Ex 17 with the near entirety of the appellant's interactions with police. The consequence of acceptance of the appellant's submissions on the meaning of "interview" would not be that no evidence of an admission is admissible unless it be on "videotape". Rather, the consequence would be that the admission might be proved by evidence inferior to and less accurate than a videotape, as long as the prosecution can satisfy the court of the existence of a "reasonable excuse". This result would be to turn the "best evidence rule" on its head36. The vice to which the appellant's construction leads is that police officers could attempt to evade the statute by informal off-camera discussions with suspects during which unrecorded admissions were made, in the belief that the requirement of videotaping did not apply to "informal" discussions and that the circumstances would provide a "reasonable excuse" within the meaning of par (b) of s 570D(2). The appellant's challenge based on the definition of "interview" fails. The Court of Appeal was correct in determining that the meaning of "interview" encompassed any conversation between a member of the Police Force and a suspect, and included an informal conversation initiated by the suspect37. The requirement of consent The second branch of the appellant's submissions concerned the requirement of consent by the suspect when being videotaped. The appellant had consented to be videotaped during his interrogation in the interview room at the police station but he did not consent to the subsequent videotaping in the lockup. At that stage he did not realise he was being filmed at all. The appellant submits that this lack of affirmative consent is another reason leading to the inadmissibility of his admissions. 36 cf Golden Eagle International Trading Pty Ltd v Zhang (2007) 81 ALJR 919 at 921 [4]; 234 ALR 131 at 132-133. 37 (2006) 166 A Crim R 1 at 17. Crennan However, before turning to the substance of that submission, two preliminary points must be made. First, the requirement of "consent" spoken of here relates to the videotaping of the interview, and not to the separate question of whether the interview was itself consensual. The appellant submitted that in the absence of a requirement that suspects consent before they can be videotaped, police duplicity and deception may induce suspects to speak when they do not wish to do so. The answer to that submission is that if a suspect makes admissions during an interview to which the suspect does not otherwise consent, real questions may arise whether the police conduct was sufficiently improper to merit exclusion of the evidence, whether the circumstances made it unfair to receive the evidence, and perhaps, though more rarely, whether the admissions were voluntary. However, that would be a matter for the application of common law exclusionary rules. Secondly, the problem of non-consensual videotaping and other forms of recording or surveillance is the subject of legislation in each Australian State and Territory38. In Western Australia, surveillance of this kind is regulated by the Surveillance Devices Act 1998 (WA) ("the Surveillance Devices Act"). The cameras and microphones in the lockup were "optical surveillance devices" and "listening devices" within the meaning of s 3 of the Act. The Surveillance Devices Act contains prohibitions on the use of listening devices to record a "private conversation" (s 5) and on the use of optical surveillance devices to record "private activity" (s 6). Activities falling within the scope of those prohibitions require a warrant or other lawful justification such as consent: ss 5(2) and (3), 6(2) and (3). Independently of any operation of Ch LXA of the Criminal Code, was the use of the surveillance cameras and microphones in the police lockup lawful in the absence of a warrant or the appellant's consent? In part, the answer to that the definitions of "private activity" and "private question depends on conversation" in s 3 of the Surveillance Devices Act, as these definitions mark out the extent of the prohibitions in ss 5 and 6 of that Act: "'private activity' means any activity carried on in circumstances that may reasonably be taken to indicate that any of the parties to the activity desires it to be observed only by themselves, but does not include an 38 Listening Devices Act 1984 (NSW); Surveillance Devices Act 1999 (Vic); Listening and Surveillance Devices Act 1972 (SA); Invasion of Privacy Act 1971 (Q); Surveillance Devices Act 1998 (WA); Listening Devices Act 1991 (Tas); Surveillance Devices Act 2000 (NT); Listening Devices Act 1992 (ACT). Crennan activity carried on in any circumstances in which the parties to the activity ought reasonably to expect that the activity may be observed; 'private conversation' means any conversation carried on in circumstances that may reasonably be taken to indicate that any of the parties to the conversation desires it to be listened to only by themselves, but does not include a conversation carried on in any circumstances in which the the the conversation ought reasonably parties conversation may be overheard". (emphasis added) to expect that Given the generally public nature of the police lockup, through which police officers (and others) were free to come and go, and given the administrative nature of the tasks with which the appellant and the officers were engaged, it seems highly doubtful that the appellant was engaged in an activity or conversation that he desired to be observed only by himself, or in which he had any reasonable expectation of privacy. Even if the videotape did record "private activity" or a "private conversation", it is likely that ss 5(3)(a) and 6(3)(b) justified the recording as being "carried out in the course of that person's duty as a law enforcement officer" or as being "reasonably necessary for the protection of the lawful interests of that principal party". The precise scope of these provisions was not pressed by either party in this Court. However, as Hayne and Heydon JJ observed in Nicholls, whatever the proper construction of legislation such as the Surveillance Devices Act, it "casts no light on the correct construction of s 570D" of the Criminal Code39. What, then, is the proper construction of s 570D as regards consent? Paragraph (c) of s 570D(4) stipulates as one ground for a "reasonable excuse" for the absence of a videotape, that the accused person "did not consent to the interview being videotaped". The appellant submitted that there was a "statutory assumption" β or perhaps more accurately a statutory implication β not simply that lack of consent was a reasonable excuse for the non-existence of a videotape, but rather that consent was an affirmative prerequisite for admissibility even if a videotape did exist. This submission should be rejected. Nothing in the definitions of "interview", "videotape" or "admission" requires that a suspect consent to being videotaped as a prerequisite for admissibility, nor, more broadly, does anything else in the text and structure of Ch LXA. 39 (2005) 219 CLR 196 at 318 [362]. The Act under consideration in that case was the Listening Devices Act 1978 (WA), which was repealed and replaced with the present statute. Crennan On a sequential reading of Ch LXA, the need to consider the absence of consent arises only if par (a) of s 570D(2) is unfulfilled; that is, when there is no "videotape on which is a recording of the admission". Only in such a state of affairs is it necessary to consider lack of consent as a reasonable excuse within the meaning of par (b) of s 570D(2). Paragraph (b) lifts the ban upon admission of the untaped admission if the prosecution proves, on the balance of probabilities, that there is a "reasonable excuse" for the absence of the videotape. Paragraph (c) also lifts that ban where there are the "exceptional circumstances" of which it speaks. The effect of s 570D(2)(b) and (4)(c) is that oral evidence can be given on an admission made in an interview where the accused person did not consent to the interview being videotaped. But it does not follow that an interview which has been videotaped is inadmissible unless the accused person consented to that videotaping. The facts in the present case may be contrasted with those in Western Australia v Yerkovich40, on which the appellant relied for support. That reliance was, however, misplaced. In Yerkovich, the accused allegedly made unrecorded off-camera admissions, having refused to answer any questions during a videotaped interview. The State argued that the off-camera statements were admissible as there was a "reasonable excuse" for the non-existence of a videotape, namely that the accused "did not consent" to a videotaped interview. However, Roberts-Smith J ruled that the evidence was inadmissible: the exception in par (b) of s 570D(2) did not apply because the accused was never asked whether he did or did not consent to the interview being videotaped41. In this Court, counsel for the State accepted that "did not consent" in s 570D(4)(c) means that an accused "positively did not agree" to being videotaped. This Court does not need to address the correctness of the ruling in Yerkovich or the response to it in this Court by counsel for the State: the essential point the appellant's submissions, that par (b) of s 570D(2) and the question of consent within the meaning of par (c) of s 570D(4) come into play only in the absence of a videotape. So much was also demonstrated by the decision of this Court in Nicholls42. However, as explained above, in the present case there was, in Ex 17, illustrates, contrary that Yerkovich 40 [2004] WASC 62. 41 [2004] WASC 62 at [118]-[120]. 42 (2005) 219 CLR 196 at 258 [155]-[156]. Crennan an admissible "videotape" of an "interview" in which the appellant made an "admission". Thus, par (a) of s 570D(2) was fulfilled and there was no need to turn to the dispensations provided by par (b) ("reasonable excuse") or par (c) ("exceptional circumstances"). Accordingly, there is no occasion to address the submissions on the notice of contention respecting par (c) or on the related issues raised by the third aspect of the appeal. The appellant's lack of consent to the videotaping of his admissions was no bar to their admissibility. The second aspect of the appeal thus also fails. The scope of Ch LXA Section 570D was applicable to the admissions made by the appellant and, common law exclusionary rules not being infringed, the result is that the appellant's admissions were properly admitted. Despite this, the scope of s 570D is not as wide as the parties may have assumed. Although it is not necessary to do so to decide the present appeal, it is appropriate to say something about the limits of the section. In their submissions, both parties to this appeal initially appeared to endorse the proposition that s 570D regulated any and all admissions made by suspects to police officers. The strength of that endorsement was weakened during the course of oral argument. Plainly, what became Ch LXA of the Criminal Code was drawn with attention to the recording of oral confessions of guilt by suspects to police officers. So much is clear, for example, from the use of the phrase "videotaped confessions" in the Attorney General's second reading speech, or from the inclusion of the concept of "interview" within the definition of "videotape"43. However, a confession of guilt is only one type of admission: the genus encompasses many species, not all of which involve oral statements, not all of which are admissions of guilt, and not all of which are capable of being videotaped. As a general proposition, the law of evidence proceeds on the basis put by Parke B that "what a party himself admits to be true, may reasonably be presumed to be so", but there is no limitation as to the manner or form in which such an admission may be made44. For example, a suspect might make admissions to police in a letter, or in a telephone conversation unsolicited by the 43 Western Australia, Legislative Council, Parliamentary Debates (Hansard), 4 June 1992 at 3356 (emphasis added). 44 Slatterie v Pooley (1840) 6 M & W 664 at 669 [151 ER 579 at 581]. Crennan police. In ASP v The Queen, for example, the applicant made a confession in a letter enclosed with a Christmas card he sent to police45. In R v Doherty, an admission contained in a letter to police was probative of the accused's consciousness of guilt despite not being a direct confession46. Other examples can be given47. They include R v Noffke48, a conspiracy case. In oral argument, the appellant submitted that the contents of such a written admission to police would be inadmissible in Western Australia as it would not be contained in a "videotape", but that a videotaped oral recitation of the contents of that document would be admissible. Even assuming that the appellant's premise is correct, namely that the written admission is itself inadmissible, it seems odd that the contents of an inadmissible document can be admitted into evidence simply by reciting its contents orally49, and it is even odder that Ch LXA should be construed so as to require this peculiar and contorted practice. The proper resolution to this apparent difficulty lies in the realisation that the definition of "admission" in s 570D(1) must be read in light of its statutory context, namely its location in a Chapter of the Criminal Code concerning videotaped interviews. The heading to Ch LXA is, by reason of s 32 of the Interpretation Act 1984 (WA), "part of the written law", ie part of the Criminal Code. As with Pt V of the Trade Practices Act 1974 (Cth) considered in Concrete Constructions (NSW) Pty Ltd v Nelson50, the heading to Ch LXA of the Criminal Code is "part of the context within which the substantive provisions of [the Chapter] must be construed and should be taken into consideration in determining the meaning of those provisions in case of ambiguity"51. However, 45 [2007] NSWSC 339 at [69]. 46 (2003) 6 VR 393 at 413-414. 47 In R v Freer and Weekes [2004] QCA 97, the accused addressed his letter of confession to the court and not to the police. 48 [1999] QCA 340 at [10]. 49 cf Dent v Moore (1919) 26 CLR 316. 50 (1990) 169 CLR 594. See also the remarks of Stephen J in Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 at 225. 51 (1990) 169 CLR 594 at 601. Crennan unlike the heading of Pt V considered in Concrete Constructions, the heading of Ch LXA is an accurate reflection of, and not an artificial restriction upon, the substantive provisions of that Chapter. It is true that s 570D(1) defines "admission" in a very broad manner, including admissions "by spoken words or by acts or otherwise". But when viewed in context the definition of "admission" is concerned with those admissions capable of being videotaped. It is for this reason, and not by way of "reasonable excuse", that written admissions or the like would be admissible albeit not embodied in a "videotape". In such cases, the admission would be one that fell outside the scope of Ch LXA. Conclusion The appeal should be dismissed. Kirby KIRBY J. This appeal comes by special leave from the Court of Appeal of the Supreme Court of Western Australia52. It is one of several recent appeals that concern laws enacted to provide for the recording of admissions made to police by suspects under police interrogation53. At the material time the applicable law in Western Australia was found in Ch LXA of The Criminal Code of that State ("the Code")54. Those provisions were inserted in the Code by an amendment enacted in 199255. They came into effect in 1996. Laws for like purposes, but differently expressed, were enacted in other Australian jurisdictions in the 1980s and 1990s56. The laws so enacted followed a long series of decisions of this Court57, reports of law reform agencies58 and comment by scholars59 addressed to problems that had arisen, for the administration of criminal justice, out of earlier police practices. Such problems included so-called police "verbals"60. To 52 Carr v Western Australia (2006) 166 A Crim R 1. 53 cf Em v The Queen [2007] HCA 46. Earlier cases include Kelly v The Queen (2004) 218 CLR 216; Nicholls v The Queen (2005) 219 CLR 196. 54 Notably, the Code, s 570D. 55 Acts Amendment (Jurisdiction and Criminal Procedure) Act 1992 (WA), s 5. 56 See eg Crimes Act 1900 (NSW), s 424A introduced by the Evidence (Consequential and Other Provisions) Act 1995 (NSW), Sched 1, Item 1.5[3]. This provision was later transferred to the Criminal Procedure Act 1986 (NSW), s 108. In 2001 that section was renumbered as s 281. See also Crimes Act 1958 (Vic), s 464H introduced by the Crimes (Custody and Investigation) Act 1988 (Vic); Summary Offences Act 1953 (SA), s 74D; Criminal Law (Detention and Interrogation) Act 1995 (Tas), s 8(2)(a) (now repealed); cf Kelly (2004) 218 CLR 57 Cleland v The Queen (1982) 151 CLR 1; Carr v The Queen (1988) 165 CLR 314; Duke v The Queen (1989) 180 CLR 508; McKinney v The Queen (1991) 171 CLR 58 Australian Law Reform Commission, Criminal Investigation, Report No 2 (Interim), (1975) at 70-72 [154]-[156]; South Australia, Criminal Law and Penal Methods Reform Committee, Criminal Investigation, Second Report, (1974) at 59 eg Campbell and Whitmore, Freedom in Australia, 2nd ed (1973) at 82-83. 60 Kelly (2004) 218 CLR 216 at 262-263 [138]-[139]. Kirby eradicate the problems, changes occurred both in the statutory and common law, designed to address, at once, the integrity and reliability of the record of admissions and the acceptability of the means by which those admissions were procured61. The interpretation of the contested legislation examined in this appeal, adopted by the Court of Appeal62 (and now by the majority in this Court63), addresses the concern about the integrity of the record. However, it does not give effect to the other purpose of the legislation to guarantee the acceptability of the way in which such admissions are obtained. In the Code this was not left to the residual discretion to exclude evidence under the rules governing involuntariness, unfairness or public policy64. It was part and parcel of the scheme of the legislation applicable to the present case. A correct legal analysis of the Code requires that the appeal be upheld. Because the prosecution did not suggest that the conviction below could be sustained without the evidence of admissions, secured in contravention of the statutory provisions applicable to the case, the appellant is entitled to an acquittal. This Court should so order. The facts The background facts: The background facts are stated in the reasons of Gummow, Heydon and Crennan JJ ("the joint reasons")65. Those facts reveal that Mr Michael Carr ("the appellant") was suspected of involvement in an armed robbery of a bank in a Perth suburb. His residence was searched and he was taken to the Kensington Police Station for interview by police officers. The offence of which he was suspected, namely robbery with aggravated 61 See generally Dixon, Interrogating Images: Audio-visually Recorded Police Questioning of Suspects, (2007) at 1-25. 62 (2006) 166 A Crim R 1 at 15-19 [31]-[47]. 63 Reasons of Gleeson CJ at [1] and reasons of Gummow, Heydon and Crennan JJ ("the joint reasons") at [56]. 64 Joint reasons at [64]. 65 Joint reasons at [19]-[26]. Kirby circumstances66, was a "serious offence"67. It therefore attracted the operation of s 570D of the Code, the meaning of which section is in contest in this appeal. As was correctly recognised by Buss JA, who gave the principal reasons in the Court of Appeal68, it is essential to set out more facts than appear in the joint reasons concerning the initial interview of the appellant at the police station and the subsequent conversation in the lockup section of that station ("the lockup"). This may be tedious. However, without such additional facts, the appellant's argument cannot be fully understood. Interview in the interview room: In apparent intended conformity with s 570D of the Code, when the appellant arrived at the police station, he was taken to a place described as "the interview room". He was interviewed there by Detective Senior Constables Richards and Shillingford of the Kensington Detectives Office. As s 570D of the Code provides, the interview was recorded on videotape. the commencement time as being 7 pm and its conclusion as 7.29 pm. The interview room was "fitted with videotape recording equipment including microphones"69. As was explained to the appellant, the interview was the subject both of sound and visual recording. It followed a predictable, familiar and proper course. This included the following questions and answers (emphasis added): Detective Senior Constable Richards noted aloud "Okay. Michael, as I've, um, advised you this interview is going to be recorded on video. There's a camera through the window there, okay, and these two dots are microphones. They'll pick up what we're going to say so when you speak I ask that you just speak up fairly β not loud but nice clear voice for us and don't tap the table. The time by my watch is, um, 7 pm, Wednesday, the 30th of July, 2003. [Detective Senior Constable Richards introduced himself and Detective Senior Constable Shillingford and obtained the name, date of birth and address of the appellant.] Okay. Michael, we're here to interview you in regards to what you know about a bank robbery. Before I go into anything like that 66 The Code, s 392 as it stood at the time of the subject robbery. The provision was later amended by the Criminal Law Amendment (Simple Offences) Act 2004 (WA), s 36(3) but without any material effect. 67 Relevantly, the Code, s 570D(1) defines "serious offence" to mean "an indictable offence of such a nature that β¦ it can not be dealt with summarily". Robbery with aggravation is such an offence. 68 (2006) 166 A Crim R 1 at 6-8 [18]-[20]. 69 (2006) 166 A Crim R 1 at 5 [15]. Kirby there's just a little bit of background that I want to learn from you first of all, okay. First of all, your level of education. Year 11. Yep. Um β and how long ago was that? How long since you've been to school? Okay. β¦ And who do you live β¦ with? Um, I reside β¦ with my mother and my sister. Okay. Um β like I said, I need to β I need to ask you some questions in regards to a β to a bank robbery that we're investigating. Before I ask you any questions in regards to that I'm going to give you a caution and it's important that you understand it, okay, so at the end of it I'm going to ask you to repeat it back to me. In fact, I've already given you the caution before β um β but we'll just go over it once more, okay β β for the purpose of the video and that is you're not obliged to say anything unless you wish to do so. Anything you do say will be recorded on the video and may be used as evidence in court. Can you please explain to me what you think this means? Um β that without my lawyer present β um β it, um β anything that I do say or could say could jeopardize my future β well being. Um β I don't wish to say anything about any bank robbery because I do not do anything like that β¦ I don't wish to say anything without my lawyer present anyway pretty much. No dramas. I was wondering if you'd just persist with me for a minute. Yep. Um β it sounds like you've basically got the gist of what I'm β what I'm talking about. Yep. If I ask you a question do you have to answer it? Kirby Okay. If you want to answer it can you answer it? Um, if I want to I can, yes. Okay. It's your choice, isn't it? Yep. And if you answer it it's going to be recorded on the video. You understand that? Yep. If you're charged this video may be played in court. Do you understand that? Yep. And what β what's that called? [No audible response]. The tape being played? Um β what's it called? Evidence? Evidence, yeah. It's going to be evidence used against you. Yep. Okay. So you understand that? Yep. β¦ Okay. What I'm trying to get at is are you on β are you with us at the moment? You can understand what we're talking about? Yeah. Quite clearly. Okay. And you're quite happy just to continue on with this until I sort of explain to you what it's all about and, um β Yep. Kirby β put a few things to you? Like β like I said, it's up to you whether you want to answer those questions β Yep. Not a problem. β okay, but I'm going to β going to say a few things to you and it's up to you how you want to respond. Are you happy with that? All right, mate. Yep. Okay." Questions ensued, directed to the search conducted at the appellant's residence, pursuant to a search warrant, immediately before he was brought to the police station. Those questions were followed by further questions relating to the appellant's knowledge about the bank robbery. He denied any such knowledge. The appellant was then questioned concerning his mother and his girlfriend. He was asked if he had an alibi for the time of the robbery. He responded: "A: Um β I don't know. I'd have to speak to my lawyer about it. Um β this is getting pretty heavy now. Um β just leave these kinds of questions as I don't have any β I don't have an alibi at this time because I haven't thought about it or, um, anything like that. I'd have to speak to my lawyer as to any relevancies if I was to be put in place of someone that was supposed to be involved in this kind of stuff. Um β" There followed further questions about the appellant's girlfriend, to which he objected, and about his mother. He was shown photographs taken from video security footage of the bank at the time of the robbery. He again denied any involvement. The interview concluded (emphasis added): "Q: Well, at the moment we're on video. I'm giving you the opportunity to speak. Once again, I'll tell you you're under caution. You don't have to talk β Yeah, I know. β but I'm still going to go through with these questions. Yeah, that's fair enough. If you wish to hold off and talk to your lawyer, please do. Yeah, I do. Kirby Okay. Thanks, Michael, for your time in answering your questions. All right, thank you. Q: β¦ Is there anything you wish to add while you've got the chance while the tape's running that we've gone over or, um, we haven't gone over that you wish to talk about now while you have the opportunity? Okay. All right. Well, if that's the case, um, we're going to finish the video. We've obviously got inquiries that still need to be completed. Yes. Um β if any charges happen further on down the track β β a copy of this tape and the tape that was β the interview that was done at the scene at the search warrant will be made available to you or your solicitor. Contact your solicitor, they'll need to contact us and we can provide one for you. All right then. No worries. Okay. If that's all we've got to talk about we'll stop the video now. It's, by my watch, 7.29 pm β¦" Features of the interview: Ten features of the foregoing interview can be noted. First, there was precision as to time, indicating a recognition by the participating police officers of the importance of recording the beginning of the recorded interview. Secondly, care was observed, at the outset, to check the appellant's levels of education and understanding of the caution that was then administered to him. Thirdly, the caution given to the appellant bore a dual aspect, namely advice about the absence of any obligation to say "anything" except voluntarily and a warning that what was said would be recorded and might be used later. Fourthly, the appellant was told that the record would include anything said in the ensuing interview. It would be recorded "on the video"; by implication this was the "video" recorded in the interview room as specifically pointed out and explained to the appellant. This, and this alone, was the recording identified as that which "may be played in court". Kirby Fifthly, the appellant expressed the desire not to say anything "much" without his lawyer present and the interrogating detective expressed his understanding that this was the appellant's intention ("No dramas"). Sixthly, the appellant repeatedly referred to holding off and talking to his lawyer, a privilege the interviewer had offered. Seventhly, the interviewing detective ultimately indicated his intention to "finish the video". Eighthly, in confirmation of this, the detective promised to provide copy of the videotape (including one earlier taken at the search of the appellant's residence) to the appellant or his solicitor. Ninthly, the termination of the interview was noted, again with exactness, not as 7.30 pm, for example, but as 7.29 pm. To the untutored, or even tutored, understanding, this was equivalent to telling the appellant that his "interview" by the police was finished. Tenthly, this conclusion was confirmed by the physical removal of the appellant from the interview room with its indicated cameras and microphones. Videotaped conversation in the lockup: The appellant was then taken to the lockup. Unknown to him, that place was under the surveillance of video cameras and subject to sound recording. It is not quite correct to say that there was no "idle banter or chit-chat"70. Whilst, as soon became obvious, the appellant was unaware of the presence of video and sound recording, the police officers were not only aware of these facilities but quickly realised that the appellant had not appreciated their existence. The detectives immediately resolved to take advantage of that fact. The recording of what ensued included the police reactions to the appellant's statements. The two detectives are seen at the outset to speak in whispered, hushed tones. Whilst it is difficult to understand exactly what is said by them, at one point Detective Senior Constable Richards proceeds into the interview room and looks directly at the camera and a voice is heard saying: "He does not know." Although this was not said at the very outset of the appellant's volunteered statements in the lockup, it preceded inculpating questions asked by the detectives of the appellant, such as whether he had done "jobs" on other banks. It may be true that, in the lockup, the detectives had administrative duties to perform in processing the appellant. However, observation of the surveillance film, and a reading of the transcript taken from it, make it plain that the police officers were using well-known techniques of interrogation, in the hope of procuring more information from the appellant than they had secured in the immediately preceding interview. In the resulting transcript of record, the letter "R" refers to Detective Senior Constable Richards, the letter "S" refers to 70 Joint reasons at [24]. Kirby Detective Senior Constable Shillingford and the letter "C" is a reference to the appellant. The record begins with small talk, by inference intended to put the appellant at ease and loosen his tongue now that (as he thought) his interview with the police was over. Detective Senior Constable Shillingford guessed at the appellant's star sign: "Small talk and obtain personal details (S) Gemini? (C) Gemini. How old are you? I got ten years on you. (C) Your partner's younger. 32, 33, 33. I'm 68, you're 78. (C) Oh yeah. Excellent, year of the horse. Is it? (C) Mine is. I wouldn't have a fucken clue. (C) And how old are you? 30 at the moment. Tape briefly skips forward (C) You don't look that old. Thanks. (C) What did the bank staff reckon when they conducted the interview with them? It was like he was the floor manager, he conducted the interview well. I wasn't very aggressive, was I? Very assertive actually. They would have said a professional, down pat, didn't lose β¦ didn't break stride or a sweat. Hey? (R) That's right mate. Kirby (C) Na, dead set or what. What about the cunt I turned around and caught hitting the buzzer? (S) Did you catch someone? (C) Caught him mate. (S) Caught him. (C) Yeah. He was on the ground going like this (demonstrates trying to activate the alarm by hitting under the lock-up bench). He was on his knees (demonstrates pointing a gun) I said 'what are you doin'?' (S) Did ya swear at them at all? (C) Na, be real, I just said this, this is all I said. It was like this. Hurry up I'm in a fucken hurry, I'm in a bit of a hurry, hurry up!" I will not set out the rest of the conversation. Before long the police officers were engaging in a style of expression identical to the appellant, complete with slang and expletives. The exchange bears quite a contrast to the style, content and expression of the interview recorded earlier in the interview room. In the earlier exchange, the appellant disclosed that he had been a heroin addict in 1996-7 and was on the methadone programme. Having engaged the appellant in informal conversation in this way, the detectives, especially Detective Senior Constable Shillingford, addressed questions not only to the conduct of the subject bank robbery but to the use of stolen cars, "shooters" and the appellant's involvement in "other jobs". Because of the surveillance equipment in the lockup, the integrity and reliability of the boastful, inculpating statements made by the appellant in his lockup conversation appear to be established. The statements were made with the bravado and boastfulness of a person who did not believe that he was under surveillance or that his remarks were being recorded. Admission of evidence, verdict and appeal: In a preliminary ruling in the Supreme Court of Western Australia, before the appellant's trial, Wheeler J overruled the appellant's application that the lockup evidence be ruled inadmissible, because contrary to s 570D of the Code. The trial then proceeded upon that basis before Jenkins J and a jury. Evidence was given and submissions were made in an attempt to explain the lockup admissions. However, the jury were evidently unconvinced that the appellant had only "wanted to tease [the Kirby police] or to piss them off in circumstances where he believed that what he said would not be recorded and therefore could not be used against him"71. The jury's guilty verdict and the appellant's conviction followed. Various grounds of appeal were argued in the Court of Appeal. However, the only ground remaining relates to whether the evidence in the videotape of the lockup conversation was inadmissible on the basis that it did not conform to the requirements of the Code. The legislation and common ground Two basic postulates: The outcome of this appeal will not be decided by whether the appellant was guilty in fact of the offence of robbery with aggravated circumstances, as charged. If that were the question before this Court, there could be little doubt as to what the outcome should be. As Wheeler J remarked, in her preliminary ruling, the conversation in the lockup was "very detailed and one which tallies at very many points with the statements β¦ of a number of witnesses to the offence so that reliability appears to be assured when one looks at the content and compares it with the subject of other depositions"72. If a person who has committed a serious crime makes admissions consistent with his involvement in that crime, and those admissions are accurately recorded, why should the law be concerned to reconsider his conviction? Above all, why should it contemplate an order acquitting such a person of a crime when his guilt is seemingly established reliably, by his own words? The answer to these questions lies in features that are central to the criminal trial process observed in Australia. Specifically, it derives from the requirements established by the Parliament of Western Australia for the conduct of trials of serious offences in that State, where the conviction of an accused person rests on evidence of that person's admissions to police. As is often said, the rule of law is relatively easy to accord to popular people who are, or may be, innocent of a crime. It is tested when its principle is invoked by a prisoner who claims to have been convicted on inadmissible evidence which, it is said, should not have been placed before the jury. In such a case, upholding the law, and the procedures that the law mandates, may be more important for the interests of the community than obtaining, or affirming, the conviction of a person such as the appellant. 71 Directions to the jury by Jenkins J explaining the appellant's case at trial. See Carr (2006) 166 A Crim R 1 at 12 [28]. 72 Ruling by Wheeler J cited in Carr (2006) 166 A Crim R 1 at 10 [25]. Kirby There is a second feature of the Australian criminal justice system that should be mentioned. Trials of serious crimes, such as the present, are accusatorial in character73. Valid legislation apart, it is usually essential to the proper conduct of a criminal trial that the prosecution prove the guilt of the accused and do so by admissible evidence. Ordinarily (as here) the accused does not need to prove his or her innocence74. This second feature of the criminal justice system is not always understood. Yet it is deeply embedded in the procedures of criminal justice in Australia, inherited from England. It may even be implied in the assumption about fair trial in the federal Constitution. It serves as a check on the powers of the state and as an important defence for individual liberty. It is a reason why countries that observe the accusatorial system tend to have a higher quality of liberty than countries that observe different traditions. Sometimes it falls to this Court to defend these basic features of the legal system, invoked by unattractive parties, including prisoners who appear to be, and may indeed be, guilty of the offence charged. In such cases, the observance of legality is even more important than keeping an individual such as the appellant behind bars. To the extent that this Court upholds the rule of law, it offers the protection of the law that is precious for everyone in the Commonwealth. The provisions of s 570D: The provisions of s 570D of the Code are set out in the joint reasons75. I will not repeat the legislation. I incorporate it by reference. The section must be read with certain definitions contained in s 570 of the Code in mind. Relevantly, these provisions state: In this Part, unless the contrary intention appears β 'interview' means an interview with a suspect by β a member of the Police Force; or 73 RPS v The Queen (2000) 199 CLR 620 at 630 [22]; Azzopardi v The Queen (2001) 205 CLR 50 at 64-65 [34]. 74 Environment Protection Authority v Caltex Refining Co Pty Ltd (1993) 178 CLR 75 Joint reasons at [28]-[29]. Kirby 'suspect' means a person suspected of having committed an offence; 'videotape' means any videotape on which is recorded an interview, whether or not it is the videotape on which the interview was originally recorded. In this Part, a reference to part of a videotape includes a reference to the visible part and to the audible part of the recording on the videotape." This Court considered the requirements of s 570D of the Code76 in Nicholls v The Queen77. The view that prevailed in that case laid emphasis on the fact that s 570D was directed to providing a solution to the problem of admissions made to police and the special difficulty presented by police "verbals"78. In this appeal, neither party questioned, or sought qualification of, the holding of the Court in Nicholls. However, the appellant submitted that this appeal presented a new and different question for the elucidation of the application of s 570D. It was not, as such, concerned with the ambit of the concept of "interview", at issue in cases such as Nicholls and Kelly v The Queen79 in respect of unrecorded alleged "admissions" made by accused persons to police whilst in their custody. Here, there was no question but that the appellant's admissions were recorded on a videotape. Accordingly, the issue decided in Nicholls does not provide the answer to the issues argued in this appeal. More elucidation is needed. The 2006 amending Act: The Court was told that, since the appellant's arrest in July 2003, the statutory requirements for the conduct of interviews by police in Western Australia have been altered once again. The Criminal Investigation Act 2006 (WA) ("the 2006 Act") has been enacted. It commenced on 1 July 2007. One feature of the 2006 Act is the replacement of references to 76 As it stood prior to the enactment of the Criminal Code Amendment Act 1999 77 (2005) 219 CLR 196. 78 Nicholls (2005) 219 CLR 196 at 208 [10] per Gleeson CJ, 237-238 [98]-[100] per McHugh J, 257 [150]-[151] per Gummow and Callinan JJ, and at 275-277 [214]- [217] of my own reasons; cf at 309-310 [332]-[335] per Hayne and Heydon JJ. 79 (2004) 218 CLR 216, where the relevant provision referred to "official questioning". Kirby "videotape" (as appearing in s 570D) with "audiovisual recording of an interview"80. Inferentially this change was adopted because of changes in the technology by which recordings are now captured on media other than videotape. The 2006 Act does not apply to the appellant's case. The appeal must be decided within the four walls of s 570D of the Code, as earlier applicable. Nevertheless, some issues presented by the appeal will be of relevance to the interpretation and application of the new legislation. The issues Common ground: A number of features of the case can be put to one side because of matters either agreed between the parties or shown to be immaterial to the outcome of the appeal. It was common ground that, at the time of the lockup conversation between the appellant and police (as of the earlier interview), there were reasonable grounds to suspect the appellant of the "serious offence" of robbery. It was also common ground that the appellant was ignorant of the fact that the lockup conversation was being recorded. Moreover, at no time before or during that second conversation was the appellant re-cautioned. Nor was he immediately or thereafter taken to the interview room to be confronted with the admissions that he had made in the lockup. The parties accepted that legislation, such as s 570D of the Code, was to be construed having regard to its own peculiarities. In each Australian jurisdiction where such legislation had been adopted, it represents something of a compromise between competing interests in society. In Kelly81, this Court emphasised the importance, in each case, of giving effect to the actual language of the legislation, accepting that this varies as between different jurisdictions. In this respect, the Code, applicable in Western Australia, does not lay down specific requirements of police procedure or discipline82. Instead, it is concerned with the admissibility of evidence derived from police investigations. Of necessity, the rules for such admissibility impinge on police conduct. They do so 80 See eg ss 117, 119, 123. Note that the parties agreed that, in fact, despite changing technology, the surveillance in the lockup was captured on "videotape", not on some non-tape recording device: [2007] HCATrans 143 at 75, 2040 and 2150. 81 (2004) 218 CLR 216 at 236 [51]. 82 Contrast, in the United Kingdom, Code C: Code of Practice for the Detention, Treatment and Questioning of Persons by Police Officers: see Police and Criminal Evidence Act 1984 (Code of Practice C and Code of Practice H) Order 2006, made pursuant to s 66(1) of the Police and Criminal Evidence Act 1984 (UK). Kirby both because a provision, such as s 570D, expresses the applicable law of the State and because it sanctions non-complying police conduct in a way inimical to the achievement of police outcomes. Unsurprisingly, the appellant accepted that there were admissions contained in the lockup conversation that could be regarded as probative of his guilt of the offence charged. His counsel apparently accepted that, if the case came down to the residual common law discretion to exclude evidence obtained in a manner that was involuntary, unfair or contrary to public policy, it would not succeed. In advance of the trial, such an argument had been specifically considered and rejected by Wheeler J83. That decision was affirmed by the Court of Appeal84. The argument was not revived in this Court. In this Court, the State advanced a new argument, based on a notice of contention to which reference will be made. However, if the specific legal points were determined against it, the State did not suggest that the appellant's conviction should be maintained on the basis of the "proviso"85. That is, the State would not argue that no substantial injustice had occurred. In this way, the issues to be decided in the appeal were narrowed substantially. The issues for decision: The issues for decision in this appeal are: The "interview" issue: Was the conversation between the appellant and the two police officers, which took place in the lockup, an "interview", as required by s 570D of the Code? Does s 570D contemplate that, to be admissible, the "interview" of a "suspect" by a member of the Police Force in a videotape must possess the type of formality and mutuality that characterised the original interview in the interview room? Or can the informal type of questioning, such as took place in the lockup, amount to an "interview", so as to comply with the requirements of the section? The "consent" issue: Assuming that the informal conversation in the lockup otherwise amounts to an "interview" within the Code, is it a presupposition (or implication) of s 570D of the Code that, however informal the "interview" might be, it must still be carried out with the consent of the suspect? If so, having regard to the absence of a caution (or re-caution) and the other features that marked the shift between the initial 83 (2006) 166 A Crim R 1 at 10 [25]. 84 (2006) 166 A Crim R 1 at 22 [56]. 85 See Criminal Appeals Act 2004 (WA), s 30(4), formerly the Code, s 689(1); cf Nicholls (2005) 219 CLR 196 at 281-282 [235]. Kirby interview and the lockup conversation, did the appellant give the requisite consent? The "exceptional circumstances" issue: In the event that the foregoing issues are decided in favour of the appellant, the State, by its notice of contention, submitted that this Court should affirm the reception of the evidence of the admissions of the appellant in the lockup conversation. It should do so on the ground that it is satisfied that there were "exceptional circumstances", in accordance with s 570D(2)(c), in the interests of justice, to "justify the admission of the evidence". On the assumption that the appellant is entitled to succeed on either of the first two issues, were there such "exceptional circumstances" for the reception of the evidence that would not conflict with the basic purpose and policy of s 570D? Initially, the appellant sought an order for a retrial. On the return of the appeal, his counsel asked this Court to direct a judgment of acquittal, in the event that the foregoing issues were decided in his favour. The lockup conversation was not an "interview" Textual meaning of interview: In an elliptical way, s 570D of the Code makes it a precondition to the reception into evidence of an "admission", made by a suspect to a member of the Police Force, that it should be made during a recorded "interview". This is necessary because s 570D(2) renders such admissions "not β¦ admissible" unless, primarily, "the evidence is a videotape on which is a recording of the admission"86. "Videotape" is defined87 to mean "any videotape on which is recorded an interview". Undoubtedly, the questions and answers between Detective Senior Constable Richards and the appellant, in the interview room, recorded on videotape, amounted to such an "interview". But was the conversation in the lockup properly so described? Obviously, the mere fact that a conversation is recorded on video film cannot alone render it an "interview" for the purpose of the provisions of the Code. An "interview" is a particular type of conversation. The mode of recording, if any, is external to the character of the communication. Many "interviews" are not recorded in such a way. The search is, therefore, for the essential character of an "interview" of the kind that meets the requirements of s 570D. It is not, as such, for the medium in which it is recorded. 86 The Code, s 570D(2)(a). 87 The Code, s 570(1). Kirby In ordinary speech, the word "interview" connotes an exchange between persons that observes some degree of formality or structure and mutuality. The primary definition in the Macquarie Dictionary88 is: "a meeting of persons face to face, especially for formal conference in business, etc, or for radio and television entertainment, etc". Formality is likewise included in the primary definition given in the Oxford English Dictionary89. The Chambers English Dictionary90 describes an "interview" as "a formal meeting". Thus, normally, the word connotes a face to face meeting having features of a formal interchange between participants. A "conversation" need not have these features. But an "interview" does. This Court can, as it pleases, dismiss the argument that "interview" when used in the Code involves an element of formality and structure with mutuality between the participants in the communication in question. However, it must realise that it does so in the face of the unanimous opinion of the great dictionaries of the English language. The word "interview" was used in the equivalent Tasmanian legislation91. Explaining what is involved in that notion, Wright J in R v McKenzie92 observed: "[T]he use of the word 'interview' throughout s 8 is such as to confirm the use of the word in its ordinarily understood sense. It is interesting to note that 'interview' seems to be used in contradistinction to the words 'official questioning' which appear as part of the definition of 'confession or admission' used in s 8(1). β¦ The very requirement that the 'interview' must be videotaped tends to confirm that it is a formal, unhurried 88 4th ed (2005) at 743. 89 The Oxford English Dictionary, 2nd ed (1989), vol 8 at 3 gives the primary meaning as: "A meeting of persons face to face, esp one sought or arranged for the purpose of formal conference on some point." 90 (1988) at 748. See also The Random House Dictionary of the English Language, 2nd ed (1987) at 999 which states as the first definition "a formal meeting in which one or more persons question, consult, or evaluate another person", and Webster's Third New International Dictionary, (1976) at 1183-1184 which gives "a formal meeting for consultation". 91 Criminal Law (Detention and Interrogation) Act 1995 (Tas), s 8(2)(a) (now repealed). 92 [1999] TASSC 36 at [14]. Kirby interrogation procedure, conducted in circumstances in which electronic recording aids are likely to be available, which is the real target of s 8." The meaning of the word "interview" in the context of s 570D of the Code is conveniently illustrated by the formal manner in which the interview preceding the lockup conversation took place. That interchange was specifically recognised by the participants to be an "interview" for the purposes of the Code. It was structured accordingly. Hence its description, as such, in the opening words of the police interviewer explaining its purpose to the appellant. Hence also the precise conclusion at the stated hour and the promise that the "interview", conducted then, and earlier at the scene of the residential search, would be provided on video to the appellant or his solicitor. The "interview" by members of the Police Force observed the ordinary expectations of a measure of formality and mutuality appropriate to a procedure so described. These were not, however, features of the conversation in the lockup. Apart from everything else, the banter, exchange of immaterial personal details and repeated use of the words "fucken", "shit" etc by police officers implied a conversation outside the ambit of the statutory "interview" for which s 570D provides. Certainly, that was the appellant's understanding of it. His belief was entirely understandable and deliberately encouraged. Contextual reinforcement: There are various contextual reinforcements for this view of the type of "interview" that s 570D contemplates. First, there is the fact that the word "interview" in the Western Australian provisions is unelaborated. It therefore attracts its meaning in ordinary speech. The definition provided by s 570(1) of the Code is unhelpful in this respect. By way of contrast, the Summary Offences Act 1953 (SA) recognised that a problem might arise from the ordinary features of the word "interview". Thus, that Act expressly states93 that for the purposes of the Part containing the obligation to record interviews with suspects94 and controlling the admissibility of interviews with a suspect95, the word "interview" is to include: "(a) a conversation; or (b) part of a conversation; or (c) a series of conversations". Whilst the South Australian definition was introduced after the enactment of s 570D of the Code, the latter was not brought into force until after the South Australian law had commenced. In any case, the Western Australian drafters were faced with precisely the same problem as those who drafted the South 93 Summary Offences Act 1953 (SA), s 74C. 94 Summary Offences Act 1953 (SA), s 74D. 95 Summary Offences Act 1953 (SA), s 74E. Kirby Australian law. Moreover, the 2006 Act continues to use the unelaborated word "interview"96. That word did not have to be used by the Parliament of Western Australia. However, when it was used it had to be given effect. This Court should ascribe to the word "interview" in the Code its ordinary, everyday meaning connoting formality and mutuality in the communication. Had some different, wider or looser meaning been intended, in the context of s 570D, this could have been made clear. Secondly, the generally formal character of the police "interview", as envisaged by the Code, secures additional reinforcement from the fact that s 570D appears in an added chapter of the Code (Ch LXA) titled "Videotaped interviews". This introduces a section of the Code addressed to a particular and formal variety of communications between accused persons and officers of police. The special provisions enacted govern not only admissibility of evidence of admissions (s 570D) but also the broadcast of "interviews" (s 570C); their availability to the jury (s 570E); retention of videotapes by police and the Anti- Corruption Commission (ss 570G, 570GA); and the use of videotapes for teaching purposes (s 570H). These provisions reinforce the conclusion that the reference to "interview" in the definition of "videotape" in s 570(1) is a reference to a formal communication between police and suspects having the features of the interview with the appellant that took place in the police interview room. Conversations more generally, such as happen to be videotaped unbeknownst to the accused, do not fit naturally within the language, structure and provisions of Ch LXA of the Code. Thirdly, it is now quite common in Australian legislation, federal and State, to provide for recording of "interviews". Butterworths Australian Legal Dictionary describes a "Record of interview" as: "A written transcript of a formal interrogation of a suspect by police generally created at the time of the interview."97 Once again, the feature of formality is emphasised98. It is true that there might sometimes be a contest about the sufficiency of compliance with this requirement of a degree of formality in the exchange. There could be borderline cases. This was not one of them. Confirmatory purposive construction: In addition to emphasising the importance of deriving meaning for statutory words and phrases from the 96 The 2006 Act, ss 115, 116, 117, 119, 120, 121, 122, 123 and 124. 97 Nygh and Butt (eds), Butterworths Australian Legal Dictionary, (1997) at 991. 98 See also the provisions for an "interview friend" under the Crimes Act 1914 (Cth), ss 23H, 23K in the case of interviews of an Aboriginal or Torres Strait Islander suspect or of a suspect under the age of 18. Kirby surrounding provisions of the statute, this Court has also repeatedly stressed the need to give effect to the purpose of the legislation. What was the purpose of s 570D? Obviously, a purpose was to attempt to end "verballing" by police, attributing unconfirmed admissions to suspects at a disadvantage in denying them. The availability of a reliable recording of the conversation in the lockup adequately meets this objective. However, there was another and different purpose. The object of requiring interviews to be videotaped extended to the purpose described by Lamer J in the Supreme Court of Canada in Rothman v The Queen99. His Lordship explained it as including "the protection of the system itself by ensuring that the repression of crime through the conviction of the guilty is done in a way which reflects our fundamental values as a society". Section 570D of the Code contributed to the control of "abuse of power" by police100. Such abuse of power includes the false attribution to suspects of admissions they have not made. But it also extends to other wrongs. These include taking advantage of suspects in ways contrary to the basic objectives of the criminal justice system. In Pollard v The Queen101, McHugh J elaborated the purposes of the Victorian law reserving to an accused person the opportunity to communicate with a friend, relative or legal practitioner before interrogation102. His Honour explained103: "In pursuance of its objective, the section seeks to neutralize the psychological disadvantage which could otherwise be suffered by a person who is questioned while detained in police custody and isolated from contact with the outside world. It also seeks to ensure that that person will have the opportunity of obtaining legal advice before answering questions, making statements or assisting the police in their investigations." 99 [1981] 1 SCR 640 at 689 (emphasis in original). 100 See Kelly (2004) 218 CLR 216 at 265 [147]-[148]. 101 (1992) 176 CLR 177. 102 Crimes Act 1958 (Vic), s 464C. 103 (1992) 176 CLR 177 at 235. Kirby The potential for abuse of power, inherent in the psychological disadvantage of a suspect undergoing questioning by the police104, suggests the range of possible disadvantages against which requirements for the videotaping of interviews protect. It is not only the false attribution to suspects of admissions they have not made. Construction and the right to silence: I have determined the meaning of "interview" in s 570D on the basis of textual and contextual considerations, and by reference to the purposes of the statute. However, the meaning that I favour is one that is consonant with the right to silence that is afforded to a suspect at common law against the background of which the Code provisions were written. The right to silence has been described105 by four Justices of this Court as "a fundamental rule of the common law" in Australia. There is no doctrine of the common law that explains precisely what the observance of the right to silence entails in the context of the questioning of a suspect by police officers. However, this Court has indicated that the observance of the right might require more from police officers in circumstances where a suspect is uneducated or otherwise disadvantaged, than is necessary where a suspect is intelligent or educated. As Dixon J said in R v Lee106: "The uneducated β perhaps semi-illiterate β man who has a 'record' and is suspected of some offence may be practically helpless in the hands of an over-zealous police officer. β¦ Such persons stand often in grave need of that protection which only an extremely vigilant court can give them. They provide the real justification for the Judges' Rules in England and the Chief Commissioner's Standing Orders in Victoria, and they provide (if we are to assume that the requirement of voluntariness is not enough to ensure justice) a justification for the existence of an ultimate discretion as to the admission of confessional evidence." The question of whether or not the observance of the common law right itself gives rise to a requirement that the police administer a caution to the suspect, alerting the suspect to his or her rights, does not arise for determination in this appeal. I adhere to what I said in R v Swaffield107: "[A]s the Australian 104 See also R v Lee (1950) 82 CLR 133 at 159-160; Dixon, "Regulating police interrogation", in Williamson (ed), Investigative Interviewing, (2006) 318 at 323- 105 Petty v The Queen (1991) 173 CLR 95 at 99 per Mason CJ, Deane, Toohey and 106 (1950) 82 CLR 133 at 159. 107 (1998) 192 CLR 159 at 202 [95]. Kirby authorities stand, the absence of a caution triggers the exercise of a discretion to exclude what was said but does not require exclusion." The appellant declined to agitate any argument based on the judicial discretion. That being so, it is not necessary to determine the exact content of the common law right. It is enough to note that, by providing for such an "interview", with the formality and mutuality that the word entails, Parliament afforded protection to rich and poor, guilty and innocent, educated and uneducated. I cannot share a view of the right to silence that effectively confines its availability to educated and wealthy suspects who know of their rights or who can afford experienced lawyers to advise them108. That is an elitist view of the protections of the common law that is alien to my understanding. It affords a further reason for adopting the construction of the Code that I favour. Conclusion: the "interview" required by s 570D: When the Parliament of Western Australia provided, as it did in s 570D of the Code, restrictions upon the reception of evidence of admissions made by suspects to police officers except (in the normal case) during a videotaped "interview", all of the indications of that section (and in the surrounding provisions) affirm that the Code had in mind an "interview" observing a degree of formality and mutuality β precisely of the type conducted with the appellant in the police interview room109. That was truly an "interview" where the appellant received the caution that was observed by the parties during the interview. The appellant knew that the interview was subject to recording and that the recording was liable to be used against him in any later prosecution. The caution alerted the appellant to his right to silence and to have access to a lawyer before embarking on potentially damaging admissions that would help prove the State's case against him from his own words. Arguably, the provision of a caution was particularly important in the appellant's case. He had a background in heroin use and, at the time the admissions were made, was known by the police to be on a methadone programme. Following the administration of the caution, he limited his answers and requested access to a lawyer. It was a request which the interrogator accepted and ultimately observed. However, when, shortly after the explicit conclusion of the "interview", and following disarming personal banter, the appellant began to make admissions, he was not re-cautioned. The police interrogators acknowledged their awareness that he did not know that his statements were being recorded. Despite that awareness, and despite their awareness of the appellant's earlier demand for prior access to a lawyer, the 108 Joint reasons at [37]-[39]; cf Em [2007] HCA 46 at [227]-[231]. 109 cf reasons of Gleeson CJ at [5], [17]-[18]. Kirby detectives proceeded with questions designed to elicit damaging admissions from him before he had obtained legal advice. In my view, these were not admissions secured during an "interview" of the type for which s 570D provides. Proper application of the Code: This conclusion can be tested thus. If the practice observed in the appellant's case were to become standard, the actual "interview", with cautions and limits observed in accordance with the common law, would become a charade. The accused, having his acknowledged rights respected and being informed that the interview was concluded, could be led into a different area. There, in a completely new and informal setting, admissions might be secured and recorded in circumstances obviously different from the "interview" envisaged by s 570D. If Parliament had intended this to be permissible, it would at least have avoided use of the word "interview" (as other statutes do). Or it might have adopted a special meaning for the word (as the South Australian statute does110). It follows that the better interpretation of "interview" in s 570D is that it requires a degree of formality and mutuality. Not only would this ensure the integrity of the resulting record. It would also serve the purpose of neutralising the psychological disadvantages for the interviewee. With respect, the Court of Appeal and the majority reasons in this Court overlook the dual features that lie behind the requirement for a statutory "interview". They give effect to one only of the purposes for requiring the videotaping of interviews with police. Answering the criticisms: There is no tension between the foregoing conclusion and the insistence, upheld in Nicholls111, that the word "interview" should be given a broad interpretation so that off-camera oral communication is caught by the statutory requirements of videotaping112. The present appeal is concerned not with the when question (about the duration of an "interview") but with the "what" and "how" questions. What form of oral interchange fulfils the statutory requirement reflected in s 570D of the Code in Western Australia? How may admissions be procured during an "interview" that answers to the description of that form of communication in this context? In s 570D, the Code makes it plain that evidence of admissions by a suspect shall not later be received in the trial of that person for a "serious offence" unless it is recorded on videotape and is in the form of an "interview". 110 See above these reasons at [126]-[127]. 111 See eg (2005) 219 CLR 196 at 276 [215]-[216]. 112 cf R v Raso (1993) 115 FLR 319 at 345-348. See joint reasons at [50]. Kirby Subject to exceptional provisions in the section113, an informal blurting out of alleged admissions or questioning in a non-formal interview setting does not fulfil the preconditions laid down by the section. In such cases, the duty of the police officers, where such events occur, is, as quickly as reasonably practicable, to resume the statutory "interview", so as to put the alleged admissions to the accused and to record on videotape any response114. There is no inconsistency between this approach and that adopted by the majority in Nicholls. Each interpretation is designed to fulfil the purposes of s 570D of the Code. Relevantly, that purpose is, as I have demonstrated, not confined to the integrity of the record but extends to the features of the questioning and specifically the expectation that the dual caution will be provided to the suspect and that his or her entitlement of access to a lawyer will be protected before potentially damaging admissions are recorded. Conclusion: conversation not an "interview": It follows that the informal questioning of the appellant, conducted in the lockup, outside the interview room and after the formal interview was stated to have concluded, was not an "interview" conforming with s 570D of the Code. As such, the videotape, retrieved from surveillance devices in the lockup, does not comply with the definition of a "videotape" for the purposes of s 570D(2)(a) of the Code because that definition requires that any admissions must be made in an "interview". Subject to what follows, evidence of the appellant's admissions made during his conversation with police officers in the lockup was not therefore admissible at his trial. It was inadmissible under s 570D(2), whether given in the form of the record of surveillance videotapes or by oral evidence of the officers concerned. The point was argued in the Court of Appeal. It is available to the appellant in this Court. In my view it succeeds. The appellant did not consent to the "interview" Is consent required?: Subject to the State's notice of contention, the foregoing is sufficient to require that the appeal be allowed. However, I will deal briefly with another aspect of the appellant's submissions for I consider that, on a correct construction of s 570D of the Code, it too should be determined in his favour. 113 The Code, s 570D(2)(b) and (c) and s 570D(3). 114 Nicholls (2005) 219 CLR 196 at 277-278 [220]. See also Western Australia v Yerkovich [2004] WASC 62 at [121]. Kirby Section 570D of the Code is written against the long-standing practice that a person, suspected by police officers of having committed a crime, is to be given a caution before interrogation and, if the suspect so decides, must be accorded the privilege of silence and of communication with a lawyer before answering further questions. It is a practice that observes and gives effect to the common law right of silence115. That was the practice which police respected in Western Australia. It was duly observed in the interview first conducted with the appellant. However, it was not observed in the questioning in the lockup that followed. On the face of things, being obviously unaware of the existence of surveillance cameras and microphones in the lockup (a fact fully appreciated by the police and recorded by them at the time), the appellant did not consent to the continuance of the questioning there. He was not re-cautioned. His attitude to any questioning that would be recorded and might be used against him in a prosecution had been made perfectly clear less than an hour earlier during the formal "interview". He had declined to answer questions when they became "heavy". He asked repeatedly for the opportunity to first have the advice of his lawyer. His right to that advice was ultimately acknowledged and respected by the police. It follows that, just as the police officers were alert to the fact that the appellant was unaware that their questions and his answers were being recorded in the lockup (and that he believed, as he had been told, that the police interview had been concluded), they would have been aware that he would not consent to such questioning before having access to his lawyer. They nevertheless proceeded in the lockup with their questioning. In the intervening time, nothing was suggested as indicating a change of mind on the part of the appellant. Overwhelmingly, the evidence suggests that he had not. Requirement of consent is implied: But is consent necessary in law to the admissibility of evidence of admissions by an accused person during police questioning? It is not expressly so stated in s 570D. However, the appellant submitted that consent was implied by the language, context and purpose of the section. It should be noted that this presents a question with distinct statutory significance. As such, it is not precisely the same question as is raised by the common law requirement of voluntariness. In Nicholls116, Gleeson CJ expressed the opinion that s 570D(4)(c) assumed that the consent of a suspected person is necessary if the police are to 115 See above these reasons at [136]-[137]; cf joint reasons at [37]-[39]. 116 (2005) 219 CLR 196 at 207-208 [9]. Kirby videotape an interview. His Honour recorded that this assumption had not been challenged in argument before the Court. He pointed out that, consistently with s 570D, a court might receive evidence of an admission, eg where there is a reasonable excuse for there not being a recording on videotape of the admission. This, he observed, was "the effect of the express language of the statute"117. I agree with Gleeson CJ's analysis in Nicholls in this respect. The specific reference in s 570D(4)(c) to the "reasonable excuse" for there not being a recording on videotape of the admission as including that "[t]he accused person did not consent to the interview being videotaped"118 is conclusive of the assumption (or implication) that consent of the accused person for videotaping such an interview is ordinarily required. If it were not, why, one asks rhetorically, would Parliament provide amongst the "reasonable excuse[s]" the absence of consent? That provision implies that, ordinarily, consent by the accused must be given to the conduct of the "interview"119. And, by definition, evidence of an admission during an interview is not admissible unless it is videotaped120. The hypothesis of consent, as stated by Gleeson CJ in Nicholls, was correct. This conclusion, derived from the language of s 570D, is reinforced by the context and purpose of the provision. The context is an interview which, by the common law, the appellant (like any other suspect) could decline to participate in. The context also includes the conduct of an "interview" which, by definition, the interviewer and implies mutuality between introduction of "recording of the admission" suggests a requirement of consent. This is a standard requirement for invasions of privacy, as by videotaping a person's conversation. the potential consequences are significant, as they are for suspects121. important where is especially interviewee. As well, Whilst it is true that the "consent" referred to in s 570D(4)(c) of the Code is addressed to the interview being "videotaped", the existence of a "videotape on 117 (2005) 219 CLR 196 at 208 [9]. 118 The Code, s 570D(4)(c) read with s 570D(2)(b). 119 cf reasons of Gleeson CJ at [15], [18]. 120 The Code, s 570D(2)(a) read with s 570(1) definition of "interview" and "videotape". 121 cf Organisation for Economic Co-operation and Development, Guidelines on the Protection of Privacy and Transborder Flows of Personal Data, adopted 23 September 1980, Principle 2; Privacy Act 1988 (Cth), Sched 3, "National Privacy Principles". Kirby which is a recording of the admission" is the primary requirement for the reception at the trial of evidence of any admission made by the accused person122. Subsidiary issues may arise for the exercise of a residual discretion to admit or reject admissions obtained involuntarily, unfairly or in a way that is contrary to public policy123. However, the existence of that discretion cannot circumvent the logically anterior questions of whether the recording that is procured is an "interview" and whether consent to obtaining it from an interviewee is implicit in the requirements of the section. Because, in my view, those questions arise first, and must be resolved against the submissions of the State, any subsequent application of the exclusionary rule need not be addressed. Moreover, the appellant did not rely on any exclusionary rule. Conclusion: no consent: Having regard to the terms of the original interview, and the repeated requests by the appellant to have access to a lawyer before answering further police questions about his involvement in the alleged offence, it is clear that he did not consent to the subsequent questioning in the lockup. In the informal, expletive-filled, apparently unofficial conversation that took place there, the only available inference was the one the police officers themselves drew. That is, the appellant believed that his police "interview" was concluded. He did not believe that the subsequent questions and answers were being recorded. Still less did he believe that his answers might be used in evidence against him at a trial for the serious offence of which he was suspected. Because consent was required for an "interview" under s 570D, and was absent from the lockup conversation, this affords a further reason why, although videotaped, the conversation was not an "interview" within the section. It did not meet the dual requirements for such an "interview". Specifically, it did not conform to the implied requirement of the section that such "interviews" would be videotaped only with the consent of the suspect and under circumstances where he or she received the dual caution before such an "interview" was undertaken. On this basis too, the appellant is entitled to succeed in his appeal. "Exceptional circumstances" not shown for admission The State's contention: By a notice of contention, filed at the hearing before this Court, the State argued that it was nonetheless entitled to uphold the appellant's conviction on the basis set out in s 570D(2)(c) of the Code. That paragraph makes admissible, at the trial of a person accused of a serious offence, evidence of an admission made by the accused person where: 122 cf joint reasons at [64]. 123 Joint reasons at [64]. Kirby "the court is satisfied that there are exceptional circumstances which, in the interests of justice, justify the admission of the evidence". In the present case, the "court", being the court of trial, did not reach, or express, any such satisfaction. However, I will assume that this Court, stepping into the shoes of the trial judge, may do so if the circumstances would otherwise support such a conclusion. The State argued that the "exceptional circumstances" included the fact that the appellant himself had initiated the lockup conversation and had there provided compelling evidence of his guilt of the serious offence of which he was suspected and of which he was later charged and convicted. The State said that these circumstances were "exceptional" and justified the admission of the evidence in the "interests of justice". Absence of exceptional circumstances: The phrase "exceptional circumstances" should be given a meaning appropriate to the context in which it appears. That context is a prima facie requirement of the Code that interviews with persons, suspected of having committed serious offences, should be videotaped with the consent of the suspect and that evidence of admissions made during such interviews should not be received at the trial of the suspect unless recorded on videotape. The requirements, imposed by s 570D, entered the law of Western Australia after decades of demonstrated problems for accused persons, police, courts and the community arising from unreliable evidence of alleged admissions to police and allegations of abuse of power in securing such admissions. Provisions such as s 570D therefore reflect a high public purpose addressed both to the integrity and acceptability of the administration of police interrogation. Circumstances are not "exceptional" within s 570D(2)(c) unless they explain and justify a departure from normal requirements, laid down by the section, to submit accused persons to "interview" and to do so under circumstances where their consent to videotaping of the interview has been obtained. In the present case, the posited "exceptional circumstances" did not lead to the departures from the requirement of the section. Thus, they do not help to overcome the fact that what occurred was not an "interview" as contemplated by Parliament; nor was it recorded on videotape with the consent of the appellant. On the contrary, the police officers had obviously concluded their statutory "interview". Yet they quickly realised that the appellant was unaware of the fact that their informal questioning was being recorded. They pressed on, regardless of his earlier demand to have access to legal advice before answering questions and making any admissions. The State's contention can be measured against the possibility that what happened on this occasion might become a common practice. In that event, Kirby police officers, frustrated by the irksome insistence of the suspect on the legal right to silence and the request for access to a lawyer, would simply lead him or her from the formal interview, conducted in the interview room, into the lockup or a tea room or some other facility monitored by surveillance devices, perhaps a bar or a public park124, and there engage in banter, informal conversation and apparently innocent questioning. The psychological dynamic of the "interview", where, by the strictures of law, the power relationship between interviewer and interviewee is to some degree equalised, would be completely changed. The offence to basic principle would not be cured by the mere fact that the conversation was recorded reliably. This is not a discretionary determination. It is concerned with the fundamental character and requirements of the statutory "interview" for which s 570D of the Code provides. Conclusion: contention rejected: The result is that the circumstances are only "exceptional" in that they amounted to a conscious breach by public officials of the expressly stated, or implied, requirements laid down by Parliament in s 570D. The State has failed to enliven s 570D(2)(c) of the Code. Its contention should be rejected. Conclusion: order for acquittal The result is that the appellant is entitled to succeed in this appeal. The revised order, sought on his behalf, was that a judgment of acquittal be entered. It is not appropriate to order a retrial. The error below was not made in the directions to the jury of the trial judge. It lay in the reception into evidence of admissions made in a case where the police had not complied with s 570D of the Code and where there were no "exceptional circumstances" to justify the admission of that evidence. Those admissions would not be available at a retrial. Without them, as was accepted, there would be insufficient evidence to prove the guilt of the appellant beyond reasonable doubt. It is an undeniably uncongenial outcome to discharge a prisoner, evidence of whose guilt is seemingly established by his own words. Such an order is not made with enthusiasm. I can understand the tendency of human minds to resist such an outcome. However, the order is not made only for the appellant but as an assurance of the adherence of our institutions to the rule of law125; to steadfast observance of the requirements of the accusatorial system of criminal justice hitherto followed in Australia; and to the neutral judicial application of the requirements laid down by Parliament in s 570D of the Code. 124 Em [2007] HCA 46 at [146]. 125 cf Blackburn v Alabama 361 US 199 at 207 (1960); R v Oickle [2000] 2 SCR 3 at Kirby Section 570D is a strict and unusual provision. It was enacted to deal with a large and endemic problem. We do the law no service by failing to observe the requirements that appear in the provisions of s 570D of the Code because the appellant, who claims their benefit, becomes their uncongenial beneficiary. This was not a case where a suspect, suddenly apprehended by police, blurted out incriminating evidence. In such a case different considerations would arise126. Instead, this was a case of a suspect in police custody who was properly cautioned, formally interviewed and who then insisted on his right to silence and to consult a lawyer before answering questions. Knowing of that insistence, police proceeded to override his rights and privileges. He was a smart alec for whom it is hard to feel much sympathy. But the police were public officials bound to comply with the law. We should uphold the appellant's rights because doing so is an obligation that is precious for everyone. It is cases like this that test this Court. It is no real test to afford the protection of the law to the clearly innocent, the powerful and the acclaimed127. The "right to silence" may indeed sometimes evoke "strong but unfocused feelings". It is, without doubt, a "shorthand description" of different rules that apply in the criminal law128. But it has not been, at least until now, meaningless and impotent in Australian law. In default of clear and valid legislation authorising a contrary course, this Court should uphold the right to silence in a case such as the present for it is important to the individual's true choice to remain silent in the face of authority and to the proper control of the conduct of the agents of the state. Orders The appeal should be allowed. The judgment of the Court of Appeal of the Supreme Court of Western Australia should be set aside. In place of that judgment, it should be ordered that the appeal to the Court of Appeal against conviction be allowed; the conviction of the appellant be quashed; and, in place of that conviction, a judgment of acquittal should be entered. 126 Em [2007] HCA 46 at [224]. 127 cf Em [2007] HCA 46 at [230]-[231]. 128 Joint reasons at [36]. |
HIGH COURT OF AUSTRALIA GUMMOW ACJ CHURCH ST PETKA INCORPORATED APPELLANT AND HIS EMINENCE PETAR THE DIOCESAN BISHOP OF THE MACEDONIAN ORTHODOX DIOCESE OF AUSTRALIA AND NEW ZEALAND & ANOR RESPONDENTS Macedonian Orthodox Community Church St Petka Incorporated v His Eminence Petar The Diocesan Bishop of The Macedonian Orthodox Diocese of Australia and New Zealand [2008] HCA 42 Date of Order: 7 August 2008 Date of Publication of Reasons: 4 September 2008 ORDER Appeal allowed. Respondents to pay the appellant's costs of the appeal. Set aside order 1 of the orders made by the Court of Appeal of the Supreme Court of New South Wales on 22 June 2007 and, in its place, order that the application for leave to appeal to that Court be dismissed with costs. Application for special leave to cross-appeal dismissed with costs. Set aside orders 1, 2, 3 and 5 of the orders made by the Court of Appeal of the Supreme Court of New South Wales on 23 October 2007 and, in their place, order that the appellant be entitled to be reimbursed out of the Schedule A Property for the balance of its costs, charges and expenses incurred in conducting the proceedings in the Court of Appeal to the extent to which they are not paid by the respondents. Order that the appellant be entitled to be reimbursed out of the Schedule A Property for the balance of its costs, charges and expenses incurred in conducting the proceedings in this Court to the extent to which they are not paid by the respondents. On appeal from the Supreme Court of New South Wales Representation G C Lindsay SC with G O Blake SC for the appellant (instructed by McConnell Jaffray) T G R Parker SC with R E Steele for the respondents (instructed by Sachs Gerace Lawyers) R P L Lancaster with M A Izzo intervening on behalf of the Attorney General for the State of New South Wales as amicus curiae (instructed by Crown Solicitor (NSW)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar, the Diocesan Bishop of the Macedonian Orthodox Diocese of Australia and New Zealand Trusts β Trustees β Judicial advice β Charitable trust β Entitlement of trustee to advice that it would be entitled to defend itself against allegations of breach of trust β Entitlement of trustee to advice that it could fund its defence from trust property. Trusts β Trustees β Judicial advice β Power of Supreme Court β Trustee Act 1925 (NSW), s 63(1) β Limitations on power to give advice β Nature of advice β Power to revoke order providing advice β Effect of revocation. Trusts β Trustees β Judicial advice β Factors relevant to discretion of Supreme Court to give advice under s 63 of Trustee Act 1925 (NSW) β Whether advice in best interests of trust β Whether trusteeβs financial position irrelevant β Whether Court required expressly to undertake exercise balancing advantages to trust in giving advice against disadvantages β Relevance of adversarial character of proceedings. Charities β Trustees β Judicial advice β Relevance of public benefit in giving advice. Practice and Procedure β Appeal from discretionary decision β Necessity of intermediate appellate court identifying particular House v The King (1936) 55 CLR 499 error β Whether error shown where trial judge said not to "expressly" consider particular matters not put at trial. Words and phrases β"all expenses management or administration of the trust property". incurred", "question respecting the Rules of Supreme Court 1883 (UK), O 55 r 3. Trustee Act 1925 (NSW), ss 59(4), 63, 85, 93(3). GUMMOW ACJ, KIRBY, HAYNE AND HEYDON JJ. These reasons for judgment are organised under the following headings. Introduction Background The origins of the Main Proceedings The Association's property The orders of Hamilton J The judicial advice given by Palmer J Palmer J's Judgment No 1 Palmer J's Judgment No 2 Palmer J's Judgment No 3 and Judgment No 4 The Court of Appeal Failure "expressly" to consider adversarial character of proceedings Failure "expressly" to conduct a "balancing exercise" Retroactivity of order 6 Re-exercise of discretion The position of the plaintiffs in this Court The legislation Section 63 Section 85 The origins of s 63 An alternative to s 63 The similarity of the alternatives The Court of Appeal's misapprehension about the similarity In re Dallaway and In re Evans General points about s 63 Implications not to be read in No implied limitations on power to give advice No implied limitations on discretionary factors Summary character of s 63 procedure Private and personal advice Role of context in applying s 63 Relationship of s 63 to rights of indemnity Gummow ACJ Kirby Hayne The Court of Appeal's general principles (a) Was the Association's financial position irrelevant? Lack of factual basis? Irrelevance? Advance costs order? Conclusion (b) Was it wrong, by making order 6, to render the other orders revocable ab initio? (c) Did Palmer J err in failing to take into account the adversarial character of the proceedings? The Court of Appeal's distinction The authorities The New South Wales authorities The Privy Council Other authorities The Court of Appeal's criticisms Was the point not considered by Palmer J put to him? What Palmer J did in Judgment No 3 Hodgson JA's criticisms of Palmer J (d) Did Palmer J conduct the correct "balancing exercise"? "Balancing exercise"? The Court of Appeal's reasoning The Court of Appeal's criticisms: the Association's own costs The Court of Appeal's criticisms: the Association's liability for the plaintiffs' costs The plaintiffs' argument to the Court of Appeal: s 59(4) The Court of Appeal's approach: s 93(3) Further error in the "balancing exercise"? Conclusion respecting "balancing exercise" (e) Did Palmer J deny procedural fairness in relation to privileged material? The plaintiffs' argument The correctness of the earlier decision cannot be raised by way of notice of contention Discretion to permit access? Election between waiving privilege and abandoning the application Did Palmer J deny procedural fairness in dealing with the Association's application before it had filed its defence? The plaintiffs' argument The clarity of the issues Application for special leave to cross-appeal: privileged opinions Application for special leave to cross-appeal: orders of Palmer J in relation to Judgment No 1 and Judgment No 2 Balance of notice of contention and application for special leave to cross-appeal Conclusions and orders Introduction Gummow ACJ Kirby Hayne There are on foot before the Equity Division of the Supreme Court of New South Wales certain proceedings entitled "His Eminence Petar, The Diocesan Bishop of the Macedonian Orthodox Diocese of Australia and New Zealand v Mitreski". The parties to this appeal conveniently refer to those proceedings as "the Main Proceedings". They do so to distinguish them from separately instituted proceedings in the Equity Division entitled "The Application of Macedonian Orthodox Community Church St Petka Inc". Those proceedings were instituted in order to obtain judicial advice as to how one of the defendants to the Main Proceedings should conduct those proceedings. This appeal arises out of the judicial advice proceedings. In the Main Proceedings there are two plaintiffs. The first plaintiff is His Eminence Petar, the Diocesan Bishop of the Macedonian Orthodox Diocese of Australia and New Zealand. The second plaintiff is the Very Reverend Father Mitko Mitrev, a former priest of the St Petka Parish in Rockdale, Sydney. They are respondents in this Court, but for the most part it is convenient to call them "the plaintiffs". Gummow ACJ Kirby Hayne The statement of claim which was extant at the time of the orders which led to this appeal is "Statement of Claim (Version 8)". It alleges that the first five defendants (Lambe Mitreski, Pero Damcevski, Boris Minovski, Eftim Eftimov and Mile Marcevski) were members of the executive committee of the sixth defendant, the Macedonian Orthodox Community Church St Petka Incorporated. The sixth defendant is the appellant in this Court, but for the most part it is convenient to call it "the Association". The Association is the registered proprietor of land previously held upon trust by trustees appointed under a Deed of Trust pursuant to a constitution adopted by the parishioners of the St Petka Parish in 1977. Upon incorporation of the Association in 1992, that land was transferred to it. The Association is alleged to hold that property, and property acquired since 1992, upon trust for the purposes of the Macedonian Orthodox Church. The eighth defendant (Naum Despotoski) is alleged to be acting unlawfully as parish priest of the St Petka Parish in place of the second plaintiff, who, it is alleged, has been wrongly dismissed by the Association. The Attorney-General for the State of New South Wales is the ninth defendant1. It is alleged that the Association has contravened the doctrine and law of the Macedonian Orthodox Church in dismissing the second plaintiff, appointing other persons in his place, making changes to the building used as the parish church and in other ways. It is alleged that the Association has broken its trust in various respects, and ought to be removed as trustee2. This appeal arises out of orders made by Palmer J, sitting in the Equity Division of the Supreme Court of New South Wales, in response to a summons filed by the Association applying for judicial advice under s 63 of the Trustee Act 1925 (NSW) ("the Act"). Those orders were made for reasons stated in what will be called Judgment No 33 and Judgment No 44. The principal orders are as follows: 1 There is no seventh defendant. 2 Some of the allegations are set out in more detail below: [145]-[146]. 3 Application of Macedonian Orthodox Community Church St Petka Inc (No 3) [2006] NSWSC 1247. 4 Application of Macedonian Orthodox Community Church St Petka Inc (No 4) [2007] NSWSC 254. Gummow ACJ Kirby Hayne The Association would be justified in defending the Main Proceedings on the issue of the terms of the trust declared by Hamilton J on 7 February 2007 and without limiting its generality: the allegations in paragraphs 7A and 22 of Statement of Claim (version 8); the allegations that are raised by the plaintiff by way of defence to the allegations in paragraphs 7A and 22 of Statement of Claim (version 8); The Association be entitled to have recourse to the property in Schedule A in the judgment Metropolitan Petar v Mitreski [2003] NSWSC 262, other than the Church Land, for the purpose of paying its reasonable costs of defending the Main Proceedings as to the Schedule A Property Issue as follows: $78,666.01 for the period from 9 July 2004 to 9 February up to $216,295.00 for future costs." It is convenient to refer to the issues identified in order 1 by the expression Palmer J employed β "the Schedule A Property Issue". The meaning of "the Schedule A Property" will be clarified below5. The Court of Appeal of the Supreme Court of New South Wales (Giles, Hodgson and Ipp JJA) upheld an appeal by the plaintiffs against those and related orders, set them aside, and dismissed the Association's summons seeking judicial advice6. The Association appealed against those orders. On 7 August 2008 this Court announced that the appeal was allowed, and the orders of Palmer J restored. 5 See [11]-[13] below. 6 His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc [2007] NSWCA 150. Gummow ACJ Kirby Hayne The Court of Appeal also refused the plaintiffs' application for leave to appeal against directions made as part of two earlier pieces of judicial advice given by Palmer J on 7 May 2004 ("Judgment No 1")7 and 10 June 2005 ("Judgment No 2")8. The plaintiffs made an application for special leave to cross-appeal against that refusal. On 7 August 2008 this Court dismissed that application with costs. It is necessary to explain the reasons for these outcomes in some detail. Background The background to the litigation as a whole is complex. It is desirable to resist any infection from the parties' fascinated obsession with the minutiae of their innumerable litigious battles since 1997, and the prospect of more to come9. The aspects of the background which are relevant to the determination of the present appeal can be summarised as follows. The origins of the Main Proceedings. On 14 July 1997 the Association purported to dismiss the second plaintiff as parish priest of the St Petka Parish. The plaintiffs contended that this was wrongful and commenced the Main Proceedings. Hamilton J later granted leave for the plaintiffs to bring the proceedings pursuant to s 6(1)(b) of the Charitable Trusts Act 1993 (NSW)10. The trial is fixed to commence on 17 November 200811. 7 Application of Macedonian Orthodox Community Church St Petka Inc [2004] NSWSC 388. 8 Application of Macedonian Orthodox Community Church St Petka Inc (No 2) (2005) 63 NSWLR 441. 9 Palmer J compared the litigation to the Sargasso Sea: Application of Macedonian Orthodox Community Church St Petka Inc (No 3) [2006] NSWSC 1247 at [39]. He saw it as characterised by "the constant shifts and manoeuvrings of the parties": Application of Macedonian Orthodox Community Church St Petka Inc (No 4) [2007] NSWSC 254 at [5]. At [7] he spoke of "each twist and turn in the path on the way to a final hearing". At [9] he indicated a fear of "yet another protracted and expensive piece of litigation as a spin-off to the Main Proceedings." 10 Metropolitan Petar v Mitreski [2005] NSWSC 330. Section 6(1), (2) and (2A) of the Charitable Trusts Act provide: "(1) Charitable trust proceedings are not to be commenced in the Court unless: (Footnote continues on next page) Gummow ACJ Kirby Hayne The Association's property. Among other things, the Main Proceedings relate to certain items of property owned by the Association. What the parties call "the Schedule A Property" was acquired before the incorporation of the Association in 1992 and comprises land on which stand the building consecrated and used as the Parish Church of the St Petka Parish, and the Church Hall ("the Church Land"); premises at Arncliffe used as a child care centre; and two home units at Rockdale held as investments. What the parties call "the Non-Schedule A Property", acquired since 1992, comprises three other home units at Rockdale also held as investments; funds held on deposit; and objects of veneration within The orders of Hamilton J. After a trial on separate questions pursuant to Pt 31 of the then Rules of the Supreme Court of New South Wales, Hamilton J on 4 April 2003 decided (and on 7 February 2007 declared) that the Schedule A Property was held by the Association on a charitable trust "to permit [it] to be used by the [Association] as a site for a church of the Macedonian Orthodox Religion and for other buildings and activities concerned with or ancillary to the encouragement, practice and promotion of the Macedonian Orthodox Religion."12 the Attorney General has authorised the bringing of the proceedings, or leave to bring the proceedings is obtained from the Court. (2) The Court is not to give such leave unless satisfied that the Attorney General has been given an opportunity to consider whether to authorise the proceedings or that the referral of the matter to the Attorney General is not appropriate because of the urgency of the matter or other good cause. (2A) Any such authority or leave may also be given after charitable trust proceedings have been brought so as to enable the continuation of those proceedings." 11 Metropolitan Petar v Mitreski [2008] NSWSC 293 at [54]. Lest silence be taken as approval of the delay since the Main Proceedings began, it must be said that it is most unsatisfactory. It was not suggested that any criticism for this delay is to be directed at the courts. 12 Metropolitan Petar v Mitreski [2003] NSWSC 262 at [102]. Gummow ACJ Kirby Hayne This left for future resolution the particular terms of the trust on which the Schedule A Property is held β the Schedule A Property Issue. It also left for future resolution the status of the Non-Schedule A Property. And it left for future resolution the balance of the issues in the proceedings. On 10 March 2004, Hamilton J fixed the trial of all those issues for 9 August 2004. The judicial advice given by Palmer J Palmer J's Judgment No 1. On 16 April 2004 the Association applied to the court under s 63 of the Act for judicial advice. On 7 May 2004, Palmer J delivered Judgment No 1. He held that, in the absence of an opinion from counsel that the Association had sufficient prospects of success in the Main Proceedings to justify it in defending them and to justify it in expending trust funds in defence of them, it would not be right to give the Association advice in unqualified terms that it was so justified. However, he directed that the Association was justified in taking such steps as were necessary to comply with the Court's directions and preparing its case for trial, up to and including 9 July 2004 ("Direction 1"). He also directed that the Association was justified in having recourse to the Schedule A Property (other than the Church Land) for the purpose of paying its reasonable legal costs incurred in two respects: complying with the existing directions of the court and in preparation of its case up to 9 July 2004, when it was expected that the interlocutory applications on foot would have been completed; and procuring an opinion of counsel as to its prospects of success in the Main Proceedings ("Direction 2")13. The significance of Direction 1 and Direction 2 in this Court is that the plaintiffs have filed an application for special leave to cross-appeal against the Court of Appeal's refusal to uphold an application, made well out of time, for leave to appeal against those directions14. Palmer J's Judgment No 2. Palmer J's Judgment No 1 appears to have rested on an expectation that all interlocutory applications would be resolved by 9 July 2004 in readiness for the trial fixed by Hamilton J to commence on 9 August 2004. That expectation was not fulfilled, and further interlocutory 13 Application of Macedonian Orthodox Community Church St Petka Inc [2004] NSWSC 388 at [22], [24] and [27]. 14 The plaintiffs had, within time, filed a notice of appeal; but after a debate which took place when the Court of Appeal drew attention at the hearing on 8 December 2004 to the question of whether the appeal was competent without leave being granted, the plaintiffs ceased to press the appeal, invited the Court of Appeal to dismiss it as incompetent, and did not apply for leave. Gummow ACJ Kirby Hayne applications were made. In response to a further application by the Association for judicial advice, on 10 June 2005 Palmer J directed in Judgment No 2 that for the purpose of paying its further reasonable legal costs and expenses, up to an amount of $60,000, in procuring a preliminary opinion of counsel as to its prospects of success in the Main Proceedings, the Association was justified in having recourse to the Schedule A Property (other than the Church Land)15 ("Direction 3"). The significance of Direction 3 in this Court is that the plaintiffs have filed an application for special leave to cross-appeal from the Court of Appeal's refusal to uphold their application, made years out of time, for leave to appeal against it. Palmer J's Judgment No 3 and Judgment No 4. In 2006 the Association applied for further judicial advice in relation to the Schedule A Property. On 23 November 2006, Palmer J published Judgment No 3, indicating advice favourable to the Association16, and made orders to that effect on 22 March 2007 in Judgment No 417. In understanding the background against which Palmer J had to consider the application, it must be noted that the Association was restrained by an injunction, granted by the Court of Appeal on 6 October 200618, from paying any of the costs of the firstβsixth and eighth defendants incurred in certain proceedings, out of its property except for (inter alia) those authorised pursuant to judicial advice. These proceedings include the Main Proceedings, the first judicial advice proceedings before Palmer J, and the purported appeal from his orders. It must also be noted that in early 2007 the Schedule A Property (excluding the Church Land) was worth on one view $1.75 million and on another, which Palmer J adopted, about $1.3 million; the Non-Schedule A Property was worth about $550,000; the Association owed the National Australia 15 Application of Macedonian Orthodox Community Church St Petka Inc (No 2) (2005) 63 NSWLR 441 at 448 [84]. 16 Application of Macedonian Orthodox Community Church St Petka Inc (No 3) [2006] NSWSC 1247. 17 Application of Macedonian Orthodox Community Church St Petka Inc (No 4) [2007] NSWSC 254. See above at [5]. A slip in the orders was corrected on 4 May 2007. 18 His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc [2006] NSWCA 277. Gummow ACJ Kirby Hayne Bank about $580,000; and other liabilities included actual or possible liabilities to its lawyers for over $1 million. Further, on the Schedule A Property Issue, the Association's liability for past costs was $78,666 and its estimate of the costs to be spent to finalise that issue was approximately $216,295. One other background circumstance is that, in Judgment No 1, Palmer J found "that the Association has endeavoured to raise money for the further conduct of its defence of the Main Proceedings from its supporters in the Parish of St [Petka], and that it has not achieved any significant success." He also found "that without recourse to the trust property the Association will be without the means of conducting its defence in the Main Proceedings."19 In Judgment No 2, he found "that the Association is unable to carry the Main Proceedings much further except by recourse to the [Schedule A Property]."20 That factual assumption, which was at least on some occasions not controverted by the plaintiffs, pervaded Judgment No 3 and was twice explicitly repeated in it21. Palmer J saw the application before him as raising three questions. The first was whether it was in the interests of the trust over the Schedule A Property that the defence, so far as it concerned the Schedule A Property Issue, be funded out of that property. Palmer J answered that question affirmatively. He found a benefit to the trust in that "the terms of that trust will be resolved once and for all and the disputes as to the administration of the trust property will be ended."22 Underlying this conclusion is the analysis Palmer J adopted in Judgment No 223: 19 Application of Macedonian Orthodox Community Church St Petka Inc [2004] NSWSC 388 at [19]. 20 Application of Macedonian Orthodox Community Church St Petka Inc (No 2) [2005] NSWSC 558 at [54]. 21 Application of Macedonian Orthodox Community Church St Petka Inc (No 3) [2006] NSWSC 1247 at [53] and [65]. 22 Application of Macedonian Orthodox Community Church St Petka Inc (No 3) [2006] NSWSC 1247 at [50]. 23 Application of Macedonian Orthodox Community Church St Petka Inc (No 2) [2005] NSWSC 558 at [56]. Gummow ACJ Kirby Hayne "If the terms of the trust are as the [plaintiffs] contend, a necessary precondition will exist for the Court to find that the Association has misappropriated the trust funds and that it ought to be removed as trustee. On the other hand, if the Court finds that the terms of the trust are as the Association contends, it will probably follow that applying the trust funds in the way in which the [plaintiffs] seek would be a misappropriation and that the Association, in defending the Main Proceedings, has been acting properly to preserve the trust fund from such misappropriation." The Schedule A Property Issue was thus pivotal to the determination of numerous disputes between the parties. Palmer J pointed out that the purpose of the trust was not the preservation of wealth for the financial advantage of a class of beneficiaries, but rather a charitable purpose β the promotion of religious worship24. He continued25: "[T]he final settlement of disputes as to how the objects of a charitable trust are to be achieved by use of the trust property is an important benefit of the administration of the trust and the value of that benefit is not measured only according to who pays the costs of the proceedings and whether the assets of the trust are increased by the proceedings". He concluded: "It is in the public interest and for the benefit of the trust estate that there be an end to the disputes as to the terms of the trust under which the Church may be used."26 Neither the Court of Appeal27 nor the plaintiffs, at least in this Court, challenged this reasoning. The second question which Palmer J saw the application as raising was whether the opinions of counsel demonstrated that there were sufficient prospects of success to warrant the Association funding its defence on that issue. Palmer J 24 Application of Macedonian Orthodox Community Church St Petka Inc (No 3) [2006] NSWSC 1247 at [50]. 25 Application of Macedonian Orthodox Community Church St Petka Inc (No 3) [2006] NSWSC 1247 at [51]. 26 Application of Macedonian Orthodox Community Church St Petka Inc (No 3) [2006] NSWSC 1247 at [52]. 27 His Eminence Metropolitan Petar, the Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc [2007] NSWCA 150 at [94] and [116]. Gummow ACJ Kirby Hayne indicated that he could not engage, in his reasons for judgment, in analysis of the opinions of counsel, for they were the subject of client legal privilege, as the Evidence Act 1995 (NSW), Pt 3.10, Div 1, calls it. Nor, he said, could he state what the strength of the Association's case was in relation to the facts which had been assumed in the opinions but which had not yet been established. After describing the substantive opinion of counsel in general terms and considering various factors28, Palmer J concluded by answering the second question affirmatively. It is to be noted that the Court of Appeal did not dispute this aspect of Palmer J's reasoning either. The third question which Palmer J saw the application as raising was whether sufficient money could be realised from recourse to the Schedule A Property to meet all costs necessary to carry the Association's defence on the Schedule A Property Issue to conclusion. In Judgment No 4, Palmer J answered the third question affirmatively for reasons29 which need not now be examined, since neither the Court of Appeal nor the plaintiffs now contest that aspect of Palmer J's reasoning. Judgment No 3 was given on an "overriding proviso" reflected in order 3 in the following words: "[T]he expenditure by recourse to the Schedule A Property is justified only if the Association is reasonably of the opinion at the time of making of the expenditure that, if the expenditure is made the Association will have sufficient funds remaining from which it can properly pay the costs of defending the Schedule A Property Issue to finality." Palmer J's concern was to ensure that "expenditure from trust resources will not be futile"30 or "fruitless", which it would be if all available funds were "exhausted before the Schedule A Property Issue is decided with finality."31 28 The passages are quoted at [162]-[163] below. 29 Application of Macedonian Orthodox Community Church St Petka Inc (No 4) [2007] NSWSC 254 at [9]-[10]. 30 Application of Macedonian Orthodox Community Church St Petka Inc (No 3) [2006] NSWSC 1247 at [40]. 31 Application of Macedonian Orthodox Community Church St Petka Inc (No 4) [2007] NSWSC 254 at [6]. Gummow ACJ Kirby Hayne The Court of Appeal Palmer J's reasons in Judgment No 3 and Judgment No 4 relate to a very difficult problem. The reasons are careful, cautious and detailed. How, then, did the appeal come to be allowed? Despite some apparent indications to the contrary, at least a majority of the Court of Appeal declined to decide that the giving of judicial advice was beyond the power of Palmer J32; indeed the proposition that it was beyond power was not advanced by the plaintiffs either in the Court of Appeal or in this Court. Instead the Court of Appeal held that Palmer J erred in his exercise of the discretion. The Court of Appeal approached the appeal apparently keeping in mind the orthodox analysis of appellate intervention in discretionary decisions explained by this Court in House v The King33. The Court of Appeal found that Palmer J erred in exercising the 32 His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc [2007] NSWCA 150 at [77] per Ipp JA (Hodgson JA agreeing at [5]). The contrary indications are at [63] and [112]: see below at [28] and [75]. Giles JA said (at [3]) that the Association's application was "foreign to the non- this made giving advice adversarial nature of s 63 proceedings" and "inappropriate". Whether he disagreed with the majority depends on the meaning of "foreign" and "inappropriate". 33 (1936) 55 CLR 499 at 504-505; [1936] HCA 40. There Dixon, Evatt and "It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred." See also Avon Downs Pty Ltd v Federal Commissioner of Taxation (1949) 78 CLR 353 at 360; [1949] HCA 26. Gummow ACJ Kirby Hayne discretion in three respects: the first two lay in a failure to take into account material considerations, while the third was an error of law affecting one of Palmer J's orders. Failure "expressly" to consider adversarial character of proceedings. First, the Court of Appeal held that Palmer J erred in failing "expressly" to address the following facts: that the Association was not disinterestedly seeking advice as to whether it should follow one course of conduct or another, but asked the Court to support its views as to religious doctrine and organisation over those of the plaintiffs; that while it was concerned to discover the true terms of the trust, its principal motivation for this concern was to prove it had not breached the terms of the trust and should not be removed as trustee; and that it was generally inappropriate to give judicial advice in adversarial proceedings34. Failure "expressly" to conduct a "balancing exercise". Secondly, the Court of Appeal criticised Palmer J for failing "expressly" to conduct a "balancing exercise" in which the potential benefits to the trust of authorising the Association to defend the Main Proceedings using trust property and of affording it protection under s 63 "should have been weighed" against "the potential disadvantages that, should the Association be unsuccessful, costs would be lost and [the plaintiffs] would seek to recover their costs from the trust."35 Despite the language of "weighing" and "balancing", in substance Palmer J was criticised for failing to take into account a possible reduction of the trust fund to cover not only the Association's costs, but also the plaintiffs' costs if they were successful in the Main Proceedings. Retroactivity of order 6. The third error found by the Court of Appeal related to Palmer J's order 636. The Court of Appeal treated it as an order rendering the other orders revocable ab initio, and said that Palmer J "erred in 34 His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc [2007] NSWCA 150 at [82]-[96]. 35 His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc [2007] NSWCA 150 at [97]. 36 Quoted below at [89]. Gummow ACJ Kirby Hayne holding that he was empowered to make revocable orders in respect of the judicial advice he gave"37. Re-exercise of discretion. Because of these three suggested errors, the Court of Appeal set aside Palmer J's decision. It proceeded to re-exercise the discretion. It did so adversely to the Association. The principal reason for doing so was the "essentially adversarial nature of the dispute"38. The position of the plaintiffs in this Court Apart from defending the Court of Appeal's reasoning, the plaintiffs submitted that there were three additional grounds, identified in their notice of contention, on which the Court of Appeal could have set aside Palmer J's orders, even though it did not deal with these three grounds. It is convenient to deal with the relevant six points β the three grounds on which the plaintiffs won in the Court of Appeal and the three grounds on which they contend that the Court of Appeal's orders can be supported β in the order in which the plaintiffs dealt with them in this Court. They are: (a) Was the Association's financial position irrelevant? (b) Was it wrong, by making order 6, to render the other orders revocable ab initio? (c) Did Palmer J err in failing to take into account the adversarial character of the proceedings? (d) Did Palmer J conduct the correct "balancing exercise"? (e) Did Palmer J deny procedural fairness in relation to privileged material? Did Palmer J deny procedural fairness in dealing with the Association's application before it had filed its defence? 37 His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc [2007] NSWCA 150 at [112]. 38 His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc [2007] NSWCA 150 at [117]. Gummow ACJ Kirby Hayne Points (b)-(d) are points on which the Court of Appeal's reasoning turned. Points (a) and (e)-(f) are notice of contention points. Before examining the submissions of the parties in relation to the six issues which the plaintiffs have raised, it is desirable to make some preliminary points about the Association's application under s 63 and about s 63 itself. The legislation The following legislative provisions are relevant to this appeal. Section 63. Section 63 of the Act provides39: "(1) A trustee may apply to the Court for an opinion advice or direction on any question respecting the management or administration of the trust property, or respecting the interpretation of the trust instrument. If the trustee acts in accordance with the opinion advice or direction, the trustee shall be deemed, so far as regards the trustee's own responsibility, to have discharged the trustee's duty as trustee in the subject matter of the application, provided that the trustee has not been guilty of any fraud or wilful concealment or misrepresentation in obtaining the opinion advice or direction. (3) Rules of court may provide for the use, on an application under this section, of a written statement signed by the trustee or the trustee's counsel or solicitor, or for the use of other material, instead of evidence. (4) Unless the rules of court otherwise provide, or the Court otherwise directs, it shall not be necessary to serve notice of the application on any person, or to adduce evidence by affidavit or otherwise in support of the application. 39 For the purpose of this appeal the question how far there is jurisdiction to give judicial advice by reason of the inherent jurisdiction of a court of equity, or by reason of the Supreme Court Act 1970 (NSW), s 22 or s 23, need not be considered. Gummow ACJ Kirby Hayne (8) Where the question is who are the beneficiaries or what are their rights as between themselves, the trustee before conveying or distributing any property in accordance with the opinion advice or direction shall, unless the Court otherwise directs, give notice to any person whose rights as beneficiary may be prejudiced by the conveyance or distribution. (9) The notice shall state shortly the opinion advice or direction, and the intention of the trustee to convey or distribute in accordance therewith. (10) Any person who claims that the person's rights as beneficiary will be prejudiced by the conveyance or distribution may within such time as may be prescribed by rules of court, or as may be fixed by the Court, apply to the Court for such order or directions as the circumstances may require, and during such time and while the application is pending, the trustee shall abstain from making the conveyance or distribution. (11) Subject to subsection (10), and subject to any appeal, any person on whom notice of any application under this section is served, or to whom notice is given in accordance with subsection (8), shall be bound by any opinion advice direction or order given or made under this section as if the opinion advice direction or order had been given or made in proceedings to which the person was a party."40 Section 85. Section 63 is significant in relation to s 85(1) and (2) of the Act. They provide: 40 Sub-sections (5)-(7) were repealed in 1972. They created restrictions on the powers of Judges and Masters, and powers in relation to costs, which are immaterial to the construction of the remaining parts of s 63. There are provisions similar to s 63 in Queensland (Trusts Act 1973, ss 96 and 97), South Australia (Trustee Act 1936, s 91 and the Administration and Probate Act 1919, s 69), Western Australia (Trustees Act 1962, ss 92 and 95) and the Australian Capital Territory (Trustee Act 1925, s 63). In Victoria the powers given by r 54.02 and r 54.03 of the Supreme Court (General Civil Procedure) Rules 2005 are not derived directly from the United Kingdom source of s 63, but from the Rules of the Supreme Court 1883 (UK) ("RSC"), O 55 r 3, discussed below at [41]-[49]. Gummow ACJ Kirby Hayne "(1) Where a trustee is or may be personally liable for any breach of trust, the Court may relieve the trustee either wholly or partly from personal liability for the breach. (2) The relief may not be given unless it appears to the Court that the trustee has acted honestly and reasonably, and ought fairly to be excused for the breach of trust and for omitting to obtain the direction of the Court in the matter in which the trustee committed the breach." The United Kingdom precursor to s 63 entered the law in 1859 at the instigation of Lord St Leonards. Although in 1857 Lord St Leonards had intended to introduce a provision similar to s 85 contemporaneously with the precursor to s 6341, it was not in fact introduced until 189642. The legislative scheme, then, is that it is desirable that trustees in doubt as to a course of action should not proceed with it and seek relief under s 85 afterwards, but rather seek s 63 advice first. That is because one of the things which a trustee invoking s 85 requires to be excused from is failure to seek s 63 advice. The origins of s 63. Leaving aside the role of the inherent or implied jurisdiction of the Supreme Court, the origins of the first limb of s 63(1), relating to questions respecting the management or administration of the trust property, lie in s 30 of the Law of Property Amendment Act 1859 (UK) ("Lord St Leonards' Act") and s 9 of the Law of Property Amendment Act 1860 (UK)43. Section 30 provided: "Any Trustee, Executor, or Administrator shall be at liberty, without the institution of a Suit, to apply by petition to any Judge of the High Court of Chancery, or by summons upon a written Statement to any such Judge at 41 United Kingdom, House of Lords, Parliamentary Debates (Hansard), series 3, vol 145, 11 June 1857, col 1552; vol 147, 28 July 1857, col 550 and 18 August 1857, col 1774. 42 The origin of s 85 lies in the Judicial Trustees Act 1896 (UK), s 3, enacted in New South Wales in the Trustee Act Amendment Act 1902, s 9. See Maguire v Makaronis (1997) 188 CLR 449 at 473-474; [1997] HCA 23; Youyang Pty Ltd v Minter Ellison Morris Fletcher (2003) 212 CLR 484 at 498 [33]; [2003] HCA 15. 43 See Re G B Nathan & Co Pty Ltd (in liq) (1991) 24 NSWLR 674 at 677-679. Gummow ACJ Kirby Hayne Chambers, for the Opinion, Advice, or Direction of such Judge on any Question respecting the Management or Administration of the Trust Property or the Assets of any Testator or Intestate, such Application to be served upon or the Hearing thereof to be attended by all Persons interested in such Application, or such of them as the said Judge shall think expedient; and the Trustee, Executor, or Administrator acting upon the Opinion, Advice, or Direction given by the said Judge shall be deemed, so far as regards his own Responsibility, to have discharged his Duty as such Trustee, Executor, or Administrator in the Subject Matter of the said Application; provided nevertheless, that this Act shall not extend to indemnify any Trustee, Executor, or Administrator in respect of any Act done in accordance with such Opinion, Advice or Direction as aforesaid, if such Trustee, Executor, or Administrator shall have been guilty of any Fraud or wilful Concealment or Misrepresentation in obtaining such Opinion, Advice, or Direction; and the Costs of such Application as aforesaid shall be in the discretion of the Judge to whom the said Application shall be made." (emphasis added) The emphasised words are significant: they highlighted the summary character of the new procedure44. Section 9 provided: "Where any Trustee, Executor, or Administrator shall apply for the Opinion, Advice, or Direction of a Judge of the Court of Chancery under [s 30 of Lord St Leonards' Act] the Petition or Statement shall be signed by Counsel, and the Judge by whom it is to be answered may require the Petitioner or Applicant to attend him by Counsel either in Chambers or in Court where he deems it necessary to have the Assistance of Counsel." These provisions were enacted in New South Wales as s 30 of the Trust Property Act of 1862, which was replaced by s 20 of the Trustee Act 1898 (NSW). That in turn was replaced in 1925 by s 63, which remains in force. But in 1925 s 63 went beyond merely re-enacting s 20 of the 1898 Act. In addition three major innovations were made. The first was that advice on questions about "the interpretation of the trust instrument" could be given. Secondly, s 63(4) made it plain that it was possible 44 See below at [61]-[63]. Gummow ACJ Kirby Hayne for evidence to be adduced by affidavit or otherwise. Thirdly, s 63(11) recognised that an express right of appeal might be created45. An alternative to s 63. In England another means by which judicial advice could be given to trustees without an administration order was developed. The RSC 1883, O 55 r 3(e)-(g), provided: "The executors or administrators of a deceased person or any of them, and the trustees under any deed or instrument or any of them, and any person claiming to be interested in the relief sought as creditor, devisee, legatee, next of kin, or heir-at-law or customary heir of a deceased person, or as cestui que trust under the trust of any deed or instrument, or as claiming by assignment or otherwise under any such creditor or other person as aforesaid, may take out, as of course, an originating summons returnable in the chambers of a judge of the Chancery Division for such relief of the nature or kind following, as may by the summons be specified and as the circumstances of the case may require, (that is to say,) the determination, without an administration of the estate or trust, of any of the following questions or matters:β directing the executors or administrators or trustees to do or abstain from doing any particular act in their character as such executors or administrators or trustees; the approval of any sale, purchase, compromise, or other transaction; the determination of any question arising in the administration of the estate or trust." This was replaced by RSC 1965, O 85 r 2, which was itself replaced by the Civil Procedure Rules 1998, Pt 64.2. An equivalent to these English rules was enacted in New South Wales in the Supreme Court Procedure Act 1900, ss 10-12 and Sched r 2. That was 45 Harvey J had doubted whether one existed: In re J S Mitchell, dec'd (1913) 30 WN (NSW) 137 at 138. Sir William Page Wood V-C had denied that one did: In re Mockett's Trusts (1860) 6(1) Jur (NS) 142 at 143: see also Daniell, Chancery Practice, 5th ed (1871) vol 2 at 1944. Gummow ACJ Kirby Hayne replaced by the Equity Act 1901 (NSW), s 11 and Fourth Schedule r 1. That in turn was replaced by the Rules of the Supreme Court 1970 (NSW), Pt 68, rr 1, 2 and 8, which now appear in the Uniform Civil Procedure Rules 2005 (NSW), The similarity of the alternatives. The legislative courses taken in England and New South Wales, although superficially they diverged, in substance became very similar. It is this fact that makes it relevant and useful for this Court to consider them for the purpose of understanding and applying in these proceedings the local legislation. The divergence arose when s 30 of Lord St Leonards' Act was repealed by the Trustee Act 1893 (UK). No corresponding step was taken in New South Wales. The substantial similarity derives from the fact that from 1925, when s 63 was introduced, the judicial advice facility and the originating summons facility were treated as serving the same function. Thus in 1926 H S Nicholas and H E Harrington in Trustee Acts of New South Wales treated the two procedures as governed by the same rules when they said in relation to s 6346: "Presumably the Court in dealing with questions of interpretation will follow the same rule as on Originating Summons and will not answer a question which may never arise ... Orders made on applications under this section are as binding on the persons to whom notice has been given as if they had been made on Originating Summons, provided that the requirements of this section have been fulfilled and subject to the right of appeal ..." Another contemporary Australian text cited a case from England on originating summons procedure and a case from New South Wales on s 63 indifferently as authorities on the need for trustees to obtain protection before embarking on litigation47. That these opinions and assumptions should be held was not surprising. The effect of the 1925 changes in New South Wales was to incorporate into the "judicial advice" facility some features of the "originating summons" facility. And the summary character of proceedings by way of 46 Page 100. H S Nicholas served as a judge of the Supreme Court of New South Wales from 1935 to 1946 (in the last 7 years as Chief Judge in Equity) and he was editor of Underhill's Trusts and Trustees: Special Australasian Edition, 7th ed 47 Stuckey and Irwin (eds), Parker's Practice in Equity, 2nd ed (1949) at 757, n 61. See also the first edition of Parker, The Practice in Equity, (1930) at 651. Gummow ACJ Kirby Hayne originating summons is one respect in which that procedure is closely similar to No doubt, as this Court has so often emphasised48, close attention must be paid to the provisions which found the jurisdiction which is invoked49. But divergences between the two legislative schemes must not be permitted to obscure some important and fundamental similarities between the two. In particular, examination of principles governing proceedings instituted under rules of court derived from O 55 r 3, applied in cases such as In re Beddoe; Downes v Cottam50, In re Dallaway, dec'd51 and In re Evans, dec'd52 may provide useful guidance in considering how the powers given by s 63 of the Act should be exercised in a particular case. That there should be such similarities in the effect achieved by the different provisions is hardly surprising when it is recognised that each is directed to the same end. Each provides for a procedure which, if adopted, will not only protect a trustee from later complaint that he or she should have acted otherwise, but also protect the trustee from personal liability for costs incurred. And where the question for the Court is whether the trustee would act properly in instituting or defending litigation, the answer given will necessarily affect the parties to that other litigation. In particular, the judicial advice proceedings may yield an order which will give one party to the litigation (the trustee) power to resort to a fund in order to meet the costs incurred in pursuit or defence of the litigation. 48 See, for example, Weiss v The Queen (2005) 224 CLR 300; [2005] HCA 81. 49 cf His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc [2007] NSWCA 150 at [59]. 51 [1982] 1 WLR 756; [1982] 3 All ER 118. 52 [1986] 1 WLR 101; [1985] 3 All ER 289. Gummow ACJ Kirby Hayne The Court of Appeal's misapprehension about the similarity. The Court of Appeal was under a misapprehension about the two legislative schemes. It said it wanted to emphasise53: "that the provision of judicial advice to a trustee in New South Wales is governed by [the Act]. For this reason, decisions in other jurisdictions, in which different, or even no, legislation applies, are of limited assistance. During the course of argument, there was much reference, for example, to In re Beddoe; Downes v Cottam54..., which is the origin of much English learning on the question of judicial advice to a trustee, and a long line of cases that have followed it. While some of what is said in these cases may be of some relevance, the key to the issues raised in this case is to be found in the New South Wales statute. No legislation was relevant to the Beddoe decision." In fact a legislative enactment was material to the relevant part of In re Beddoe. In that case a tenant for life who desired to exercise her rights under the Settled Land Act 1882 (UK) to sell land held in trust brought a successful action in the Queen's Bench Division in detinue to obtain the title deeds from the trustee. The Commissioner who heard that action ordered the trustee to pay the costs. The trustee then obtained an order from the Chancery Division that the costs which he had been ordered in the common law action to pay and had paid, together with his own solicitor-client costs in that action, be paid out of the trust property. The Court of Appeal set aside that order. It ordered that the trustee ought only to have the costs he would have incurred had he applied for leave to defend at the expense of the trust estate. By that the Court of Appeal meant an application by originating summons under O 55 r 3. This is plain from the following passage in Lindley LJ's reasons for judgment55: "[A] trustee who, without the sanction of the Court, commences an action or defends an action unsuccessfully, does so at his own risk as regards the costs, even if he acts on counsel's opinion; and when the trustee seeks to obtain such costs out of his trust estate, he ought not to be allowed to charge them against his cestui que trust unless under very exceptional 53 His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc [2007] NSWCA 150 at [59]. 54 [1893] 1 Ch 547 (footnote added). 55 [1893] 1 Ch 547 at 557. See also Bowen LJ at 562 and 564. Gummow ACJ Kirby Hayne circumstances. If, indeed, the Judge comes to the conclusion that he would have authorized the action or defence had he been applied to, he might, in the exercise of his discretion, allow the costs incurred by the trustee out of the estate; but I cannot imagine any other circumstances under which the costs of an unauthorized and unsuccessful action brought or defended by a trustee could be properly thrown on the estate." That warning that trustees who become involved, or wish to become involved, in litigation should seek the court's sanction is the significant, and in later years influential, aspect of In re Beddoe. Thus, as the Association pointed out, and the plaintiff did not deny, O 55 r 3 was a piece of legislation β delegated legislation in England β which was central to that aspect, and was later viewed in New South Wales by Nicholas and Harrington as being functionally equivalent to Further, the Court of Appeal said that Palmer J's reliance on In re "[the Act] applies in New South Wales and no legislation of any kind applied to the situation in Re Dallaway and the orders that Megarry VC made in that case. The legal matrix against which Re Dallaway was decided does not exist in New South Wales." Yet In re Dallaway was an application by originating summons (ie under RSC 1965 O 85 r 2, the successor to RSC 1883 O 55 r 3, referred to in In re Beddoe). Sir Robert Megarry V-C called the application "a Beddoe summons in which are sought directions whether [the executor] should continue to defend [an] action, and to counterclaim in it."59 Hence the legal matrix against which In re Dallaway was decided does exist in New South Wales for it was an application made under delegated legislation which was seen in New South Wales as being functionally equivalent to s 63. 56 See [43] above. 57 [1982] 1 WLR 756; [1982] 3 All ER 118. 58 His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc [2007] NSWCA 150 at [107]. 59 [1982] 1 WLR 756 at 758; [1982] 3 All ER 118 at 120. Gummow ACJ Kirby Hayne In re Dallaway and In re Evans. There was a dispute between the parties about In re Dallaway and a later decision of the English Court of Appeal on a Beddoe application in which In re Dallaway was distinguished, namely In re Evans60. The plaintiffs contended that the approach taken in the former, on which Palmer J relied, was wrong, and that the latter, which Palmer J distinguished, supported them61. The Association contended that the former was right, and had been followed in New South Wales62, and that the latter was distinguishable. The primary point made by the plaintiffs was that the application in In re Dallaway was, in truth, an application for a pre-emptive costs order which should have been made to the court hearing the proceedings and not under the guise of an application for judicial advice from the court supervising the administration of the trust, because it deprived the plaintiffs of the protection which the adversarial proceedings of the former type of application would bring. This is not a dispute of any significance in light of the plaintiffs' concession that Palmer J had jurisdiction and the Court of Appeal majority's acceptance of it β in each case correctly, for reasons given below63. That being so, it is the circumstances of a particular application that matter; how other courts were struck by other applications is not decisive. As Nourse LJ said in In re Evans64: "[E]very application of this kind depends on its own facts and is essentially a matter for the discretion of the ... judge who hears it." So far as the plaintiffs are complaining of an inability to take advantage of adversarial procedures, the complaint will be dealt with elsewhere65. All of this said, the ultimate duty of the judges below was to be derived from the applicable legislation of the Parliament of New South Wales. To the 60 [1986] 1 WLR 101; [1985] 3 All ER 289. 61 Application of Macedonian Orthodox Community Church St Petka Inc (No 3) [2006] NSWSC 1247 at [55]-[76]. 62 Metropolitan Local Aboriginal Land Council v Metropolitan Aboriginal Assoc [2003] NSWSC 104. 64 [1986] 1 WLR 101 at 106; [1985] 3 All ER 289 at 292. 65 See [167]-[177]. Gummow ACJ Kirby Hayne extent that the judges in the Court of Appeal insisted upon that point, they were correct for reasons of basic principle repeatedly stated in this Court66. Nevertheless, where, as here, the legislation reflected and even copied laws enacted, or made, for identical or analogous circumstances in England, it was permissible and helpful to construe the New South Wales legislation with the benefit of the experience expressed in judicial observations on the English analogues. General points about s 63 It is proposed to make eight general points about s 63. Implications not to be read in. First, the following much cited statement of this Court in Owners of "Shin Kobe Maru" v Empire Shipping Co Inc67 is relevant to s 63: "It is quite inappropriate to read provisions conferring jurisdiction or granting powers to a court by making implications or imposing limitations which are not found in the express words". No implied limitations on power to give advice. Secondly, although at least Ipp JA and Hodgson JA were not prepared to hold that in the circumstances of this case s 63 gave no power to give judicial advice68 and although the plaintiffs did not argue to the contrary, it is desirable to confirm, with respect, that their Honours were correct. There are no express words in s 63, and no implications from the express words which are used in s 63, that automatically preclude the court from giving the advice which the Association sought. There is nothing in s 63 which limits its application to "non-adversarial" proceedings, or proceedings other than those in which the trustee is being sued for breach of 66 See eg Victorian WorkCover Authority v Esso Australia Ltd (2001) 207 CLR 520 at 526 [11], 545 [63]; [2001] HCA 53; The Commonwealth v Yarmirr (2001) 208 CLR 1 at 37-39 [11]-[15], 111-112 [249]; [2001] HCA 56; Western Australia v Ward (2002) 213 CLR 1 at 60 [2], 65-66 [16], 69 [25], 249-250 [588]; [2002] HCA 28; Weiss v The Queen (2005) 224 CLR 300 at 312-313 [31]. 67 (1994) 181 CLR 404 at 421; [1994] HCA 54: see the cases referred to in Hillpalm Pty Ltd v Heaven's Door Pty Ltd (2004) 220 CLR 472 at 488-489 [47] n 28, cf at 500 [84] n 67; [2004] HCA 59. 68 See above at [25]. Gummow ACJ Kirby Hayne trust, or proceedings other than those in which one remedy sought is the removal of a trustee from office. This conclusion follows the principle referred to in the previous paragraph: from the unqualified words of s 63(1), particularly the words "respecting the interpretation of the trust instrument"; from the contemplation of s 63(4) that affidavit or other evidence may be used and that notice may be given; from the contemplation of s 63(8)-(10) that advice may be given not only where there are controversies among beneficiaries, but where beneficiaries are in dispute with trustees about those controversies; and from the contemplation of s 63(11) that there may be an appeal from the opinion, advice or direction69. Only one jurisdictional bar to s 63 relief exists: the applicant must point to the existence of a question respecting the management or administration of the trust property or a question respecting the interpretation of the trust instrument. The Court of Appeal did not deny that both kinds of question existed in the present case. Hence, as the Court of Appeal recognised and as the plaintiffs accept, the dispute in this appeal relates only to the question whether Palmer J erred in the exercise of his discretion. No implied limitations on discretionary factors. Thirdly, there are no express words in s 63, and no implications from the express words which are used in s 63, making some discretionary factors always more significant or controlling than others. In particular, s 63 does not provide that the adversarial nature of the proceedings about which the advice is sought, the tendency of the advice to foreclose an issue in those proceedings, or the fact that the trustees seeking the advice are being sued for breach of trust are of special significance. Hence the discretion is confined only by the subject-matter, scope and purpose of the legislation70. While it was accepted by the Court of Appeal that the court has power under s 63 to give advice even if the proceedings are "adversarial" in character, their approach was to give that consideration very great significance as pointing to an exercise of the discretion against granting advice. 69 So far as there is authority suggesting that it is beyond the power of the court to give advice to be used for "adversarial purposes" or to decide a matter in issue between parties (eg Re Mary Hooper (1861) 29 Beav 656 [54 ER 782]), it dates from a time before the additional words were inserted into what is now s 63(1) and before s 63(8)-(10) were inserted β in the case of New South Wales, in 1925. 70 Klein v Domus Pty Ltd (1963) 109 CLR 467 at 473; [1963] HCA 54; De L v Director-General, NSW Department of Community Services (1996) 187 CLR 640 at 661; [1996] HCA 5. Gummow ACJ Kirby Hayne The Attorney-General submitted that the fact that a court may rely on a written statement of the trustee or use other material "instead of evidence" by reason of s 63(3) undoubtedly gives rise to discretionary considerations of substantial weight where the question for advice is in form or substance an application which will determine or affect questions that could also be resolved in ordinary adversarial litigation. He also submitted that it may be the case that the court would properly decline judicial advice if, for example, a contested construction suit, constituted by the disputing parties and resolved by a judge acting on evidence, appeared to be more apt to the resolution of a question concerning the interpretation of the trust instrument. He further submitted, however, that the discretion of the court to consider applications brought under s 63 should not be yoked to a general first principle that, where there is a contest or where there are adversaries, it is not appropriate to give advice. Those submissions are correct, and early authorities must be read in their light71. Summary character of s 63 procedure. A fourth noteworthy aspect of s 63 procedure is what Lord St Leonards described as its "summary" character. Before Lord St Leonards' Act, as Palmer J said in Judgment No 272: "[I]f a trustee wished to obtain the direction or opinion of the court on a matter of administration or management or as to a question of construction of the trust instrument, the trustee had to commence an administration suit. The trustee would raise on the pleadings in the suit the particular point upon which the court's advice was sought. Having obtained the court's direction or advice on that point, the trustee would then obtain a stay of all further proceedings in the administration suit. To commence a general administration suit was, however, often a cumbersome and expensive exercise as all persons interested in the estate had to be brought before the court, accounts had to be taken and enquiries had to be ordered, none of which was necessary if all that was in question was a point of construction of the trust instrument or what should be done in the management or administration of the trust assets in a particular situation." 71 See below, n 108. 72 Application of Macedonian Orthodox Community Church St Petka Inc (No 2) (2005) 63 NSWLR 441 at 445 [20]. Gummow ACJ Kirby Hayne On 11 June 1857, in delivering his First Reading Speech on the Trustees Relief Bill, the Bill which when enacted became Lord St Leonards' Act, Lord St Leonards said that he proposed73: "to give trustees a summary right by petition, without rendering it necessary to file bills, to obtain the opinion of the Court of Chancery upon any point which might arise in the administration of the trust estate. This would be a great benefit to trustees, and, by substituting a cheap and simple process of determining questions, prevent the necessity of expensive suits." An element of that objective survives in s 63(3)-(4). Precursors to the summary procedure advocated by Lord St Leonards can be seen in relation to charities in the Charities Procedure Act 1812 (Sir Samuel Romilly's Act) (UK) and the Charitable Trusts Act 1853 (UK), s 16. Various of the plaintiffs' arguments, so far as they assimilated their position before Palmer J to those of litigants in conventional litigation, tended to undercut the summary character of s 63 proceedings. The background described by Palmer J and alluded to by Lord St Leonards also points towards a wider rather than a narrower use of s 63, so as to assist the court's administration of trusts by orders less extreme than a general administration order. Private and personal advice. A fifth matter, closely related to the fourth, is that s 63 operates as "an exception to the Court's ordinary function of deciding disputes between competing litigants"; it affords a facility for giving "private advice"74. It is private advice because its function is to give personal protection to the trustee. Section 63(2) precludes any trustee, who acts in accordance with the private advice, from being held liable for breach of trust in the event that in conventional proceedings it is later held that the legal position does not correspond with the advice given, so long as the proviso to s 63(2) is satisfied. 73 United Kingdom, House of Lords, Parliamentary Debates (Hansard), series 3, vol 145, 11 June 1857, col 1557. 74 Application of Macedonian Orthodox Community Church St Petka Inc (No 2) (2005) 63 NSWLR 441 at 445 [23] per Palmer J, approved in Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar, the Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand (2006) 66 NSWLR 112 at 122 [40] per Beazley and Giles JJA. Gummow ACJ Kirby Hayne The possibility that the rights of beneficiaries under private trusts could be affected by judicial advice led the New South Wales Parliament in 1925 to introduce the protections given by s 63(8)-(11) and in that sense to strike a compromise. However, those protections did not alter the primary function of s 63 as creating a procedure for private advice to trustees. Even if notice of the application for private advice is given to other persons (by reason of rules of court, or a court direction under s 63(4), or by reason of s 63(8)), those persons are not strictly speaking "parties" to "proceedings" by reason of the closing words of s 63(11), although they are able to participate in the proceedings to some extent. Section 63 reflects a compromise between a procedure for affording private advice to trustees and the need for affected persons to be given a hearing in some cases. It was an error on the part of the Court of Appeal to treat the plaintiffs as being in a position of parity with the Association in the judicial advice proceedings. It was an error which may have led the Court of Appeal to treat the plaintiffs as being adversaries of the Association in those proceedings (as distinct from the Main Proceedings) and hence to conclude that in proceedings of the present kind judicial advice should generally not be given. There is no disharmony or lack of realism in treating the plaintiffs and the Association in the Main Proceedings as adversaries but recognising the Association, in the judicial advice proceedings, as trustee (for that it was) seeking judicial advice to which later it would be obliged to adhere. Role of context in applying s 63. Sixthly, the application of s 63 will tend to vary with the type of trust involved. Where there is a non-charitable private trust involving a conflict between beneficiaries, or between beneficiaries alleging a breach of trust out of which a trustee has profited and that trustee, and where the defendants in those proceedings have a personal capacity to fund the defence, it might not be correct to give the trustee an opinion, advice or direction. The position is not necessarily the same where the trust is for a charitable purpose, where the public interest is involved since ex hypothesi the trust is beneficial to the public, where none of the contestants in the litigation about the trust is suing or defending in order to augment, defend or seek the restoration of personal assets, and where a crucial question is the precise terms of the purpose for which the trust exists. Nor is the position necessarily the same where the charitable trust is for religious purposes: since religious controversies do not commonly come before Gummow ACJ Kirby Hayne the courts unless they involve disputes about property rights75 they will often take the form of an allegation of breach of trust and a claim that the trustee be removed. That circumstance may have less weight against the grant of the opinion, advice or direction than it would in disputes about a private trust. Relationship of s 63 to rights of indemnity. Seventhly, Lord St Leonards' Act was enacted in England at a time when the legal and practical burdens on trustees were increasing, and against a background conception which continues to possess vitality. That conception is that the office of trustee is a gratuitous one unless a special arrangement to the contrary is made. Provision was made for procedures of the kind embodied in the two legislative schemes because "[i]t is an inflexible rule of a Court of Equity that a person in a fiduciary position ... is not, unless otherwise expressly provided, entitled to make a profit; he is not allowed to put himself in a position where his interest and duty conflict"76. But "persons who take the onerous and sometimes dangerous duty of being trustees are not expected to do any of the work on their own expense; they are entitled to be indemnified against the costs and expenses which they incur in the course of their office; of course, that necessarily means that such costs and expenses are properly incurred ... The general rule is quite plain; they are entitled to be paid back all that they have had to pay out." While trustees acting gratuitously are entitled both under the general law and s 59(4) of the Act78 to an indemnity out of the trust assets for expenses incurred in administering the trust, it was understandable that the legislature should enact provisions enabling them to take advice before embarking on any course which might carry a risk of incurring costs that might be outside the indemnity. In particular, trustees who are sued, particularly for breach of trust, may sometimes experience uncertainty about whether they will be able to obtain indemnity as to the costs of their defence under s 59(4) in any event. Perhaps 75 Cameron v Hogan (1934) 51 CLR 358 at 370-371 and 377-378; [1934] HCA 24; Ermogenous v Greek Orthodox Community (2002) 209 CLR 95 at 108 [32], 118- 119 [65]; [2002] HCA 8. 76 Bray v Ford [1896] AC 44 at 51 per Lord Herschell. 77 In re Grimthorpe [1958] Ch 615 at 623. 78 See below, n 155. Gummow ACJ Kirby Hayne they will if their breach is excused under s 85(2); but they cannot be sure, in advance, that the court's discretionary power to excuse the breach will be exercised in their favour, and one of the matters to be excused is their failure to obtain the court's direction under s 63 or otherwise. This points strongly to the conclusion that an application under s 63 by a trustee sued for breach of trust (including a breach of trust alleged to arise in the very defence of the proceedings) is not to be seen as one which should rarely if ever succeed. Instead it should be seen as a standard instance to which s 63 can in appropriate circumstances apply. In short, provision is made for a trustee to obtain judicial advice about the prosecution or defence of litigation in recognition of both the fact that the office of trustee is ordinarily a gratuitous office and the fact that a trustee is entitled to an indemnity for all costs and expenses properly incurred in performance of the trustee's duties. Obtaining judicial advice resolves doubt about whether it is proper for a trustee to incur the costs and expenses of prosecuting or defending litigation. No less importantly, however, resolving those doubts means that the interests of the trust will be protected; the interests of the trust will not be subordinated to the trustee's fear of personal liability for costs. It is, therefore, not right to see a trustee's application for judicial advice about whether to sue or defend proceedings as directed only to the personal protection of the trustee. Proceedings for judicial advice have another and no less important purpose of protecting the interests of the trust. The fact that one of the purposes of proceedings for judicial advice is to protect the interests of the trust has particular importance where, as in this case, the trust concerned is a charitable purpose trust. In litigation brought by private persons having a particular view about the terms of a trust, the trustee will ordinarily be joined as a necessary and proper party to the proceedings. Unless some other party will act as contradictor, the burden of defending the suit will fall upon the trustee. If, as will often be the case with a charitable purpose trust, there is no other party that will act as contradictor, the claims made about the terms of the trust will go unanswered unless the trustee can properly resort to the trust funds to meet the costs of defending the litigation. And even if there is another party that will act as contradictor, it is almost always desirable, even necessary, for the trustee to take an active part in the proceedings so that issues are properly ventilated and argued. A necessary consequence of the provisions of s 63 of the Act is that a trustee who is sued should take no step in defence of the suit without first obtaining judicial advice about whether it is proper to defend the proceedings. In deciding that question a judge must determine whether, on the material then Gummow ACJ Kirby Hayne available, it would be proper for the trustee to defend the proceedings. But deciding whether it would be proper for a trustee to defend proceedings instituted about the trust is radically different from deciding the issues that are to be agitated in the principal proceeding. The two steps are not to be elided. In particular, the judicial advice proceedings are not to be treated as a trial of the issues that are to be agitated in the principal proceedings. The Court of Appeal's general principles. Finally, the Court of Appeal stated certain general principles about s 6379. Not all the propositions so stated represent sound guides in relation to applications under s 63. The propositions use expressions like the "proper province" of s 63, what s 63 is "intended to empower" or "does not empower" and what "should not" be done. Since the majority declined to decide that the mere giving of advice by Palmer J was not beyond power, these propositions must be read as going to discretion, not power. And even if the propositions are read, as they must be, as going to the court's discretion only, some of them are expressed more widely than is appropriate, particularly so far as they suggest that it would be rare and difficult for a trustee alleged to have committed a breach of trust to obtain assistance under s 63 in relation to the defence of the proceedings. As the appeal against the Court of Appeal's orders is to be allowed and the orders of Palmer J restored, the propositions in question should not be regarded as expressing the governing law in Australian courts. These eight points suggest that the merits of any particular decision made under s 63 must depend on the particular circumstances of the case in which the decision was made. It is necessary now to examine the six issues posed by the plaintiffs in the light of the circumstances of this case. (a) Was the Association's financial position irrelevant? In Judgment No 3, Palmer J assumed the correctness of, and repeated, what he had found in Judgment No 1 and Judgment No 2: that if the Association were not permitted to fund its defence on the issue isolated by Palmer J out of trust assets, it would not be able to defend the proceedings80. The plaintiffs attacked this aspect of the trial judge's reasoning in three ways. 79 His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc [2007] NSWCA 150 at [63]. 80 See [18] above. Gummow ACJ Kirby Hayne Lack of factual basis? The first criticism of Palmer J's reasoning was that it "rested on factual assertions (as to the [Association's] means and its ability to retain the services of its lawyers) that were themselves in dispute. For this reason alone, it was unsuitable to be taken into account in a judicial advice application where the relevant facts could not be properly explored or tested." It is very common in judicial advice applications for the court to be invited to give advice on the basis of facts, whether proved by affidavit as contemplated by s 63(4) or alleged in a "written statement" or "other material" as contemplated by s 63(3), which are contested and controversial. As Palmer J said, a "judicial advice application ... is founded upon facts stated to the Court by the trustee, untested by adversarial procedure, and assumed by the Court to be true" β although "only for the purpose of the application."81 Palmer J understood that if the challenge made by the plaintiffs were to be fully ventilated, "it would doubtless engender yet another protracted and expensive piece of litigation as a spin-off to the Main Proceedings."82 Palmer J was right not to permit that to happen. Section 63(2) affords a safeguard against the mischief complained of by the plaintiffs: the trustee loses the protection which the "opinion advice or direction" would otherwise have given if, in obtaining it, the trustee has been "guilty of any fraud or wilful concealment or misrepresentation". The plaintiffs cited no authority for this aspect of their submission. It finds no support in the language of the Act and is erroneous in principle. Irrelevance? The plaintiffs submitted: "For the purposes of s 63, the court is concerned only with the interests of the trust estate; it is not concerned with the determination of issues between the parties. If the court concludes that it is in the interests of the trust estate for the proceedings to be defended, then it will authorise the defence. If it does not, it will not. In either situation, the availability or 81 Application of Macedonian Orthodox Community Church St Petka Inc (No 3) [2006] NSWSC 1247 at [69]. 82 Application of Macedonian Orthodox Community Church St Petka Inc (No 4) [2007] NSWSC 254 at [9]. Gummow ACJ Kirby Hayne otherwise to the trustee of other funds to conduct the defence is irrelevant." There might be force in this submission if all that the Association had applied for, and all that Palmer J had given, was advice that it would be justified in defending the Main Proceedings. But the Association applied for, and obtained, an additional direction that it was entitled to have recourse to the trust property to pay its reasonable costs. The question of its financial capacity was relevant to that matter. Palmer J saw the financial capacity of the parties in trust estate litigation as being central to what is practical and fair. He said83: "Where a trustee seeks an order that it is justified in defending a claim against the trust estate by recourse to the trust assets for the costs of the litigation, the question will be whether it is more practical, and fairer, to leave the competing claimants to the beneficial interest in the trust estate to fight the litigation out amongst themselves, at their own risk as to costs and leaving the trustee as a necessary but inactive party in the proceedings, or whether it is more practical, and fairer, that the trustee be the active litigant with recourse to the trust fund for the costs of the litigation. What is 'practical and fair' will depend on the particular circumstances of each case and will include: whether the beneficiaries of the trust estate have a substantial financial interest in defending the claim; what are the financial means of the beneficiaries to fund the defence; the merits and strengths of the claim against the trust estate; the extent to which recourse to the trust estate for defence costs would deprive the successful claimant of the fruits of the litigation; if the trust is a charitable trust rather than a private trust, what, if any, are the considerations of public interest." 83 Application of Macedonian Orthodox Community Church St Petka Inc (No 3) [2006] NSWSC 1247 at [62]. This analysis was cited with approval in Mowbray et al, Lewin on Trusts, 18th ed (2008) at 749-750 [21-115]. Gummow ACJ Kirby Hayne Further, when Palmer J spoke of "fairness" he was not speaking only of fairness to the Association, but also of fairness "to individuals, who are not beneficiaries of the trust and have no financial interest in the trust property" and who, if the trust assets could not be employed, would have to fund the litigation if there were to be litigation84. He also had in mind questions of justice in the public interest. The difficulty with the plaintiffs' submission is that once Palmer J concluded that it was in the best interests of the trust for the proceedings to be defended β a matter on which the Court of Appeal agreed85 and the plaintiffs did not disagree β it would be vacuous to leave the matter there without considering how, in the then circumstances, the proceedings were to be defended as a matter of practicality. Advance costs order? The plaintiffs drew a distinction between an "advance costs order" and an order made as part of judicial advice; submitted that in substance order 2 was an advance costs order, like those made in In re Dallaway86; and contended that it was wrong to have made it without the full range of "usual adversarial procedures" being available. It is not necessary to deal with the plaintiffs' arguments on this matter further, because it was not shown how the "usual adversarial procedures" would have put the plaintiffs in a better position to oppose the advice Palmer J gave. Furthermore, even if the plaintiffs were right in submitting that an advance costs order is only made "in most unusual circumstances", that condition was satisfied in this case. Conclusion. Accordingly the plaintiffs' attack on Palmer J's reasoning in this respect fails. The Court of Appeal's orders cannot be supported by suggesting that there was any error in that reasoning. 84 Application of Macedonian Orthodox Community Church St Petka Inc (No 3) [2006] NSWSC 1247 at [65]. 85 His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc [2007] NSWCA 150 at [116]. 86 [1982] 1 WLR 756; [1982] 3 All ER 118. Gummow ACJ Kirby Hayne (b) Was it wrong, by making order 6, to render the other orders revocable ab initio? Order 6 of Palmer J's orders was: "The foregoing orders are subject to, and may be revoked by, an order of the trial judge in the Main Proceedings, or by a subsequent order in these proceedings." A similar order was made in Judgment No 1 and Judgment No 2. The plaintiffs construed order 6 to mean that, if at a later stage the orders were revoked, the revocation would not operate merely for the future, but would have effect from the time the orders were made, so that any money spent pursuant to order 2 would have to be refunded. Below, that construction will be referred to as "the plaintiffs' construction of order 6". The correctness of the plaintiffs' construction of order 6 was common ground in the Court of Appeal and, not surprisingly, the Court of Appeal therefore assumed its correctness. On that basis, it held that s 63(2) did "not empower" the order87 and that it "was not permitted by s 63"88. That was a conclusion supported not only by the plaintiffs but also by the Attorney-General. There are conflicting indications about what was intended by order 6, as distinct from what it says. On the one hand, while it is not easy to find in the written submissions of the parties either to Palmer J or to the Court of Appeal an explicit indication of what the true construction of order 6 or its predecessors was thought to be, it is clear that, at the oral hearing before the Court of Appeal on 8 December 2004, counsel for the Association contended that the plaintiffs' construction of the equivalent to order 6 made in Judgment No 1 was correct. Until that time the plaintiffs had maintained their position that the opposite construction was correct: that revocation was only possible for the future. In this Court, counsel for the Association initially said that no party contended that the plaintiffs' construction of order 6 was incorrect. After some debate with members of the Court, counsel for the Association indicated preparedness to accept a construction of order 6 as operating only in futuro. 87 His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc [2007] NSWCA 150 at [108]. 88 His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc [2007] NSWCA 150 at [111]. Gummow ACJ Kirby Hayne On the other hand, there are factors suggesting that Palmer J meant order 6 only to permit revocation of the orders so far as their operation in the period after revocation was concerned. First, the primary authority on which Palmer J relied for making similar orders in relation to both Judgment No 1 and Judgment No 2 was In re Dallaway. The order made in that case by Sir Robert Megarry V-C was one permitting only prospective revocation, for he said89: "although as matters stand the [executor] ... is fully justified in defending ..., it is possible that material may emerge subsequently which will make it unreasonable for the [executor] to continue to defend ...; and if, despite that, the [executor] continued with the litigation, no order that I make now ought to protect them in relation to subsequent costs." (emphasis added) Secondly, Palmer J said that the plaintiffs could make an application "for the revocation of the orders which have been made on an interim basis" if they succeeded in the trial of the Main Proceedings on the Schedule A Property Issue and believed "that the facts, as they have emerged, could not reasonably have supported [the opinions of counsel] as to prospects"90. This must be read in context, however. So read, the passage contemplates more than a lack of reasonable support, for the next paragraph sees the key issue as being whether the Association and its lawyers had "been guilty of concealment or misrepresentation in obtaining" the opinions of counsel91. That is the language of s 63(2), which does permit retrospective revocation, and the paragraphs preceding the passage under discussion quote and discuss that subsection. The passage is not discussing order 6. Nevertheless the crucial question is not what the parties believed or Palmer J intended, but what order 6 means. If the plaintiffs' construction of order 6 were correct, orders 1 and 2 would give the Association very little protection because of the insecurity of its position. On the plaintiffs' construction a trustee, after carrying out actions in accordance with those orders, might find those actions later impugned for some reason falling short of the circumstances 89 [1982] 1 WLR 756 at 761-762; [1982] 3 All ER 118 at 123. 90 Application of Macedonian Orthodox Community Church St Petka Inc (No 3) [2006] NSWSC 1247 at [74]. 91 Application of Macedonian Orthodox Community Church St Petka Inc (No 3) [2006] NSWSC 1247 at [75]. Gummow ACJ Kirby Hayne described in s 63(2). That outcome is so remarkable that very specific language would be needed before that construction of the Act could be arrived at. The premise from which the Court of Appeal concluded that order 6 "was not permitted by s 63"92 was the plaintiffs' construction of order 6. Since that construction is not correct, the premise goes. Accordingly, it is not necessary to decide whether the Court of Appeal's conclusion as to what s 63 permits was correct or not. On the assumption that order 6 only allowed revocation in futuro, the plaintiffs did not argue that it was not permissible, and the Attorney-General correctly argued that it was permissible. (c) Did Palmer J err in failing to take into account the adversarial character of the proceedings? The Court of Appeal's distinction. Although in this Court counsel for the plaintiffs said the tag "adversarial" was "perhaps an unfortunate tag" and "not a tag we particularly embrace because of the imprecision associated with it", the majority of the Court of Appeal (Ipp JA, Giles JA concurring) characterised the advice sought as "essentially adversarial"93. The majority of the Court of Appeal drew a distinction between the use of a s 63 application for adversarial purposes and its use for non-adversarial purposes94. According to the Court of Appeal, the existence of an adversarial purpose was an extremely powerful discretionary factor against giving the advice95. 92 His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc [2007] NSWCA 150 at [111]. 93 His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc [2007] NSWCA 150 at [82]. 94 In an earlier decision the Court of Appeal had drawn the same distinction: Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar, the Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand (2006) 66 NSWLR 112. 95 The plaintiffs contended to the Court of Appeal that, in dealing with a judicial advice application, the court should not be drawn into resolving a disputed issue, and in such circumstances may and "should usually" refuse the application. Gummow ACJ Kirby Hayne The authorities. It may be noted in passing that the authorities relied on do not directly support the proposition just stated, nor do they invalidate Palmer J's reasoning. The New South Wales authorities. The Court of Appeal relied on a statement by Beazley and Giles JJA in Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar, the Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand that judicial advice is not "an appropriate vehicle by which to settle disputes between parties to a trust"96. They also cited Hartigan Nominees Pty Ltd v Rydge97, where Sheller JA said less absolutely that this was "generally inappropriate". And they cited Harrison v Mills98 where Needham J said that it was extremely doubtful whether disputes "between trustees" (other than bona fide differences about the construction of a document) "would be entertained by a court under s 63", and also said99 that it is "quite undesirable that the rights of the parties should depend to any degree upon facts which have not been established in the normal manner." One difficulty in applying these statements to the present case is that, strictly speaking, the plaintiffs are not "parties to a trust", nor could they be described as having any "rights". A similar difficulty arises from the statement of Ipp JA (Giles JA concurring) that he agreed with Hodgson JA that Palmer J's advice "would affect the rights of the trustee and the rights of Bishop Petar and Father Mitrev to a very substantial extent"100 (emphasis added). The plaintiffs were not "parties to a trust" β they were not settlors or trustees or beneficiaries. They had no "rights": indeed they had no standing to commence litigation as of 96 (2006) 66 NSWLR 112 at 123 [42]. 97 (1992) 29 NSWLR 405 at 440. Cf at 417-418 (point 5). 98 [1976] 1 NSWLR 42 at 45. 99 [1976] 1 NSWLR 42 at 46. 100 His Eminence Metropolitan Petar, the Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v Macedonian Orthodox Community Church St Petka Inc [2007] NSWCA 150 at [84]. The reference to Hodgson JA is a reference to Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar, the Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand (2006) 66 NSWLR 112 at 128 [67], where Hodgson JA (dissenting) said: "the judicial advice would affect the rights of the trustee and the rights of the plaintiffs to a very substantial degree." Gummow ACJ Kirby Hayne right, but were obliged to seek the leave of the court under s 6(1)(b) of the Charitable Trusts Act 1993 (NSW)101. The most that can be said is that the first plaintiff holds a particular office, and the second plaintiff has held another office: if the Association's contentions about the terms and purposes of the trust affecting the Schedule A Property are erroneous there may be particular outcomes for them in relation to those offices. But even if the plaintiffs were treated as "parties to a trust" in a looser sense, as persons with duties or personal concerns in relation to the broad operation of the trust, it cannot be said that Palmer J endeavoured to settle any disputes. All Palmer J did was advise the Association that it would be justified in defending the main proceedings on the Schedule A Property Issue, and that it could have recourse to certain property to pay the costs of that defence. He left the settlement of the disputes in the Main Proceedings to the trial judge who will hear those proceedings. Palmer J was not primarily concerned to decide any issue on facts not established in the normal manner; rather he was offering a means by which an issue could be established in the normal manner, and if that means continues to be nullified by the dismissal of this appeal, the issue may never be decided in the normal manner. The plaintiffs submitted that order 2102 necessarily pre-empted further debate about the $78,666.01 in costs for the period 9 July 2004 to 9 February 2007 and about the future costs referred to in order 2(b). Subject to the proviso to s 63(2), that is true. If the Association loses the Main Proceedings, order 2 will have affected the "rights" of the Association by legitimating what the plaintiffs allege to be a breach of trust β an application of trust property in support of one aspect of its position in the Main Proceedings β in a manner which will cause recovery of that money to be impossible unless the Association is guilty of fraud, wilful concealment or misrepresentation. However, that is a different thing from settling any major dispute. Order 2 settled only a single relatively small part of the dispute, and the settlement had a satellite or instrumental character: the part "settled" was a necessary step towards the proper resolution of a major element in the dispute. If it were wrong of Palmer J to have made order 2 because it pre-empted any future debate about whether the costs identified were claimable trust property, as the plaintiffs submitted, it would follow that in many circumstances 101 See n 10 above. 102 Set out at [5] above. Gummow ACJ Kirby Hayne trustees could never get protection under s 63 in relation to the costs of defending proceedings. That is inconsistent with the statutory language. It is a construction that would undermine the purpose of Parliament, as expressed in the language of the Act. The Privy Council. The Court of Appeal also referred to Marley v Mutual Security Merchant Bank and Trust Co Ltd103. The Court of Appeal attributed to the Privy Council in that case the proposition that "in exercising its jurisdiction to give directions on a trustee's application, the court is not engaged 'in determining the rights of adversarial parties'."104 What the Privy Council actually said, and this had been quoted by Palmer J105, was: "[I]n exercising its jurisdiction to give directions on a trustee's application the court is essentially engaged solely in determining what ought to be done in the best interests of the trust estate and not in determining the rights of adversarial parties." While accepting that it was not beyond power to give judicial advice that determined substantive rights in contested proceedings, the Court of Appeal appeared to think that it was so powerful a discretionary factor that generally this should not be done, and that this was decisive in the present case. The Attorney- General argued106 that the Privy Council in Marley's case was not establishing a dichotomy, as the Court of Appeal appears to have thought, between ascertaining the best interests of the trust on the one hand and not determining adversarial rights on the other, the former function being permissible and the latter not. Rather the Privy Council was concerned to make the point that the court's sole purpose in giving judicial advice is to determine what ought to be done in the best interests of the trust estate, and that while it was not the court's purpose to determine the rights of adversaries, that could be done as a necessary incident of determining what course ought to be followed in the best interests of the trust estate. 103 [1991] 3 All ER 198 at 201. 104 His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc [2007] NSWCA 150 at [90]. 105 Application of Macedonian Orthodox Community Church St Petka Inc (No 3) [2006] NSWSC 1247 at [41]. 106 Citing MTM Funds Management Ltd v Cavalane Holdings Pty Ltd (2000) 35 ACSR 440 at 445 [17]. Gummow ACJ Kirby Hayne In the present context, that conclusion would appear to be supported by s 63(3)-(4) of the Act, which contemplate the use of evidence in some cases, by the notice procedures in s 63(4) and (8)-(10), and by the possibility of appeal contemplated by s 63(11) β all steps which could be material if there were a risk that the judicial advice given might affect the rights of adversaries. That is, while the time and cost involved in giving judicial advice at an early stage of litigation, when the issues involved in disputes about rights may not be fully sharpened and it may not be possible for the factual position to be as efficiently exposed as in a trial, may be factors relevant to a decision not to grant judicial advice but to let the matter be examined in conventional litigation, they are not factors which either automatically bar judicial advice or are so weighty as generally to compel the court not to grant the advice. If they were, the consequence would be that advice would either never, or only very exceptionally, be given on the issue whether trustees should defend proceedings instituted against them for breach of trust. Nothing in the language of s 63 suggests this outcome. Further, some forms of advice about adversarial cases may be in the best interests of the trust estate. An approach that treats an adversarial character as being always, or at least very often, fatal to the success of a judicial advice application, contradicts what the Privy Council saw as the sole function of the court. That consequence would be the more acute because a plaintiff desiring to prevent a trustee whom that plaintiff is suing from having access to the trust property to fund the defence could effectuate that desire by pleading that to use the trust property for that purpose would be a breach of trust. Other authorities. The Court of Appeal then said: "It is, indeed, well- established that judicial advice is generally an inappropriate mechanism for determining substantive rights in contested proceedings."107 For this proposition six cases were cited. Four do not support it as a proposition about s 63 in its present form108. One case, Neagle v Rimmington109 offers some support for the 107 His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc [2007] NSWCA 150 at [91]. 108 It is true that in the first case, Re the Trusts of the Will of Gilchrist (1867) 6 SCR (NSW) Eq 74 at 78, Hargrave J cited Re Mary Hooper (1861) 29 Beav 656 [54 ER 782] as authority for the proposition that the Trust Property Act of 1862 (NSW), s 30, should not be used to construe trust instruments, but since 1925 the second limb of s 63(1) permits this course. The other cases (Re J S Mitchell, dec'd (1913) (Footnote continues on next page) Gummow ACJ Kirby Hayne proposition asserted, but it relies on and does not add to what is said in Harrison v Mills110 and Marley v Mutual Security Merchant Bank and Trust Co Ltd111, discussed above112. The sixth authority cited by the Court of Appeal is a passage from Re Australian Pipeline Ltd113. Barrett J there said that s 63: "assumes that the matter on which judicial advice is sought will be one that involves some aspect of 'the trustee's duty as trustee' as it relates to future conduct of the trustee. A trustee who is alleged by a beneficiary to have committed a breach of trust or statutory wrong and who defends legal proceedings in which that allegation is advanced does not thereby perform any 'duty as trustee'. A decision by a trustee accused of breach of trust whether to contest the allegation is unrelated to any aspect of 'the trustee's duty as trustee'." In understanding that passage, it must be remembered that Barrett J had earlier said in his reasons114 that a trustee could properly seek judicial advice relating to defending legal proceedings "if the legal proceedings are themselves concerned with the management or administration of the trust property or the interpretation of the trust instrument" (as the Main Proceedings are). It is also necessary to remember that Barrett J found support for that last statement in an 30 WN (NSW) 137, Alcock v The Public Trustee (1936) 53 WN (NSW) 192 and Re Sinnamon [1940] QWN 41) do not support the proposition. 109 [2002] 3 NZLR 826 at 833-835. 110 [1976] 1 NSWLR 42 at 44-45. 111 [1991] 3 All ER 198 at 201. 112 See [104]-[107]. 113 (2006) 60 ACSR 625 at 632 [25]. 114 (2006) 60 ACSR 625 at 631 [23]. Gummow ACJ Kirby Hayne observation by Palmer J in Judgment No 2115, which, in turn, had in part been approved by Beazley and Giles JJA116. The Court of Appeal referred to earlier decisions of that Court117 as establishing that judicial advice proceedings should not be used to settle disputes between parties to a trust. Stated in that way, the proposition is not controversial. It recognises the distinction to which reference is made earlier in these reasons118 between deciding whether it would be proper for a trustee to sue or defend and deciding the issues tendered in the proceedings that it is proposed to institute or defend. But nothing that was said in those earlier cases, and nothing in the relevant provisions of the Act, warrants limiting the powers given to the court by s 63 by reference to a classification of some proceedings as "adversarial proceedings", and others as not. No criterion was identified by the Court of Appeal as marking what are "adversarial proceedings". When it is recalled that the question which a trustee seeking judicial advice under the Act tenders for decision by the court is whether it would be proper for the trustee to defend proceedings that have been instituted against it, thus making those proceedings contested proceedings, it is evident that the word "adversarial" is intended to convey more than joinder of issue between parties. But its content and meaning were not elucidated in the Court of Appeal or in argument in this Court. Much emphasis was given in the Court of Appeal to the fact that, in the Main Proceedings, the plaintiffs claim that the Association had acted in breach of trust and that it should be removed as trustee. But as the primary judge pointed 115 Application of Macedonian Orthodox Community Church St Petka Inc (No 2) (2005) 63 NSWLR 441 at 445-446 [23]. 116 Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar, the Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand (2006) 66 NSWLR 112 at 122 [40]. 117 Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar, the Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand (2006) 66 NSWLR 112 at 122 [40]; Hartigan Nominees Pty Ltd v Rydge (1992) 29 NSWLR 405 at 440. See also Harrison v Mills [1976] 1 NSWLR 42. 118 See [74]. Gummow ACJ Kirby Hayne out, the principal issue between the parties in the Main Proceedings centres upon the terms of the trust on which the property is held, and the primary judge concluded that it was in the interests of the trust that the uncertainty about those terms should be resolved. Where, as here, the trust is a charitable purpose trust, identifying the dispute between the parties as centring upon allegations of breach of trust and claims for removal of a trustee is an incomplete description of the issues that are tendered in the litigation. It is an incomplete description because describing the dispute in this way suggests that the trustee has no more than a personal pecuniary interest in the outcome of the litigation. That may be the case where a trustee of a private trust is sued for breach of trust in managing the trust fund and beneficiaries claim compensation for losses allegedly sustained as a consequence. But in this litigation the interests at stake are larger and more complex than whether a defaulting trustee should make good the financial consequences allegedly flowing from mismanagement of a trust fund. There is a public aspect to those interests because they concern the administration of a charitable purpose trust. If the expression "adversarial proceedings" was intended to refer to the fact that allegations of breach of trust are made in the Main Proceedings and a claim is made for removal of the Association as trustee, it is an expression which provides no assistance in resolving the question tendered by the Association in the judicial advice proceedings. Classification of the proceedings in respect of which a trustee asks advice about the propriety of instituting or defending, as "adversarial proceedings", is not useful in deciding whether advice should be given under s 63 that instituting or defending the proceedings is proper. The Court of Appeal's criticisms. It is not necessary further to discuss the "adversarial" issue at a general level. That is because the Court of Appeal's criticism of Palmer J was narrow. The Court of Appeal did not criticise Palmer J for failing to understand or failing properly to apply the Court of Appeal's distinction. Rather it fastened on two specific aspects of the "adversarial" element in the proceedings. One was that the dispute in the Main Proceedings about the true terms of the charitable trust was intense. The second was that the Main Proceedings involved allegations of breach of trust against the Association (one of the allegations being that the Association was in breach of trust for spending trust funds in defence of a claim that it was in breach of trust in other Gummow ACJ Kirby Hayne respects), and sought the removal of the Association as trustee for that reason119. The Court of Appeal said that Palmer J's error was merely that he "did not expressly address these matters which ... were crucial to the discretion his Honour was required to exercise."120 (emphasis added) Was the point not considered by Palmer J put to him? Before examining the terms of Palmer J's reasons for judgment, it is desirable to note one observation made by Ipp JA (Hodgson JA concurring) in his reasons in relation to the costs of the Court of Appeal proceedings. His Honour said121: "[T]he three grounds on which this Court found that his Honour had erred in exercising his discretion were only articulated with clarity during the course of the hearing on appeal and after intervention from the Bench. It does not seem to me that the case was put before the trial judge in the way it eventually was put on appeal." The correctness of that observation is supported by a comparison between the plaintiffs' written submissions to the Court of Appeal and the transcript of oral argument. It is also supported by the form of Palmer J's reasons for judgment, namely to set out a series of submissions by the plaintiffs and to deal with each one by one. This suggests that any failure by Palmer J to deal with a point is an indication that the point was not put. In these circumstances a measure of benevolence should be employed in reading Palmer J's reasons for judgment, both in relation to this first error detected by the Court of Appeal in relation to the adversarial character of the proceedings, and the second error it detected in relation to the "balancing exercise"122. Counsel for the plaintiffs did not demur from the proposition that 119 His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc [2007] NSWCA 150 at [79]-[96]. 120 His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc [2007] NSWCA 150 at [96]. 121 His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc (No 2) [2007] NSWCA 287 at [38]. 122 See [137]-[166] below. Gummow ACJ Kirby Hayne when a court is invited to make a discretionary decision, to which many factors may be relevant, it is incumbent on parties who contend on appeal that attention was not given to particular matters to demonstrate that the primary judge's attention was drawn to those matters, at least unless they are fundamental and obvious. The alternative approach would permit a party to run one case before the primary judge and different cases on however many levels of appeal were open. Where it is said on appeal that a primary judge was in error in not taking into account a particular consideration "expressly", even though it was not explicitly submitted to the primary judge that it should be, a benevolent construction of the primary judge's reasons will often reveal, by a process of inference and implication, that the relevant consideration was borne in mind, even though it was not stated in as clear-cut a way as an appellate court, dealing with a hostile submission by one party not put nearly as distinctly, or at all, to the primary judge, might prefer. Turning to the particular error under consideration, before Palmer J the plaintiffs submitted that he "should adopt the general principles laid down for judicial advice applications by the Privy Council in Marley v Mutual Security Merchant Bank and Trust Co Ltd"123. The principles referred to included the passage quoted above124, and the plaintiffs' written submissions to Palmer J quoted it. However, the precise way in which the Court of Appeal formulated its criticism of Palmer J's supposed error in relation to the adversarial character of the proceedings is not reflected in the plaintiffs' written submissions to Palmer J. Nor are the authorities on which the Court of Appeal relied125. It is not possible now to know what was put to Palmer J orally. But, in view of Palmer J's silence about those authorities, and in view of the very brief treatment of the adversarial question in the plaintiff's written submissions to the Court of Appeal, it seems unlikely that the deficiency was remedied in oral 123 [1991] 3 All ER 198: the plaintiffs drew particular attention to 201d-h. 124 See [104]. 125 Those discussed above at [99] and [108]-[110], particularly Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar, the Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand (2006) 66 NSWLR 112 at 123 [42] and 127-128 [65]-[68] (a decision admittedly handed down only nine days before the first of the plaintiff's written submissions to Palmer J). Gummow ACJ Kirby Hayne argument before Palmer J. A reading of the transcript of oral argument before the Court of Appeal suggests, as do the words of Ipp JA quoted above126, that the stress laid in the Court of Appeal on the adversarial question was something which arose in argument at the instigation of the Court of Appeal and for that reason played a crucial role in its decision and orders. Counsel for the plaintiffs contended that the point was an issue before the Court of Appeal and before Palmer J. It depends by what is meant by "an issue". If the point was taken as faintly before Palmer J as it was in the written submissions to the Court of Appeal, it would not be culpable for Palmer J to have overlooked it, because in the course of oral argument in the Court of Appeal Hodgson JA said that he had not appreciated the point about the adversarial issue "as being made with any great force" in the written submissions. What Palmer J did in Judgment No 3. Whether or not this point on which the Association lost in the Court of Appeal was clearly taken before Palmer J, he did address the relevant matters in substance. His Honour quoted the words of the Privy Council in Marley v Mutual Security Merchant Bank and Trust Co Ltd127 that, in a judicial advice application, "the court is essentially engaged solely in determining what ought to be done in the best interests of the trust estate and not in determining the rights of adversarial parties" (emphasis added). Palmer J only determined the rights of adversarial parties to the limited extent necessary to ensure the protection of the best interests of the trust estate. Palmer J found that it was in the best interests of the trust on which the Schedule A Property is held, and indeed in the public interest, to secure the "important benefit" of having the precise terms of the trust resolved. Palmer J stressed the fact that the orders he was asked to make related only to that question β not to any of the other issues in the Main Proceedings128. He said that the value of that important benefit "is not measured only according to who pays the costs of the proceedings and whether the assets of the trust are increased by the proceedings"129. That was so, in his opinion, because the 126 See [118]. 127 [1991] 3 All ER 198 at 201. 128 Application of Macedonian Orthodox Community Church St Petka Inc (No 3) [2006] NSWSC 1247 at [27] and [44]. 129 Application of Macedonian Orthodox Community Church St Petka Inc (No 3) [2006] NSWSC 1247 at [51]. Gummow ACJ Kirby Hayne purpose of the trust was charitable, rather than being "the preservation or accumulation of wealth for the financial advantage of a class of beneficiaries"130. Palmer J took into account one risk of making order 2 β namely that under the guise of defending the Main Proceedings on the Schedule A Property Issue, the Association might use Schedule A Property for its defence on other issues. The risk had been identified in submissions advanced to Palmer J by the plaintiffs, and summarised by him, thus131: "it could be difficult in practice to draw the line between costs expended on the Schedule A Property Issue and some other issue. Because of this difficulty ... the advice sought should be refused because otherwise there is a risk that the Schedule A property will be expended on defending an issue in the Main Proceedings not relevant to the administration of the Schedule A property trust." Palmer J formulated that aspect of the problem thus132: "The choice is between, on the one hand, giving advice which would permit the Association to have recourse to Schedule A property to defend the Schedule A Property Issue, with an attendant risk of unauthorised expenditure, and, on the other hand, avoiding that risk by refusing any advice and thereby denying the Association the means of defending the Schedule A Property Issue at all." His Honour resolved the issue, so explained, as follows133: "In my opinion, the choice should be resolved by permitting the Association to defend the Schedule A Property Issue by recourse to the Schedule A property and leaving the risk of unauthorised expenditure on 130 Application of Macedonian Orthodox Community Church St Petka Inc (No 3) [2006] NSWSC 1247 at [50]. 131 Application of Macedonian Orthodox Community Church St Petka Inc (No 3) [2006] NSWSC 1247 at [44]. 132 Application of Macedonian Orthodox Community Church St Petka Inc (No 3) [2006] NSWSC 1247 at [45]. 133 Application of Macedonian Orthodox Community Church St Petka Inc (No 3) [2006] NSWSC 1247 at [46]. Gummow ACJ Kirby Hayne the shoulders of the Association and its legal representatives. If the [first plaintiff] succeeds in the Main Proceedings in his contentions as to what are the precise terms of the trust upon which Schedule A property is held, and if it becomes apparent, on an assessment of costs or the taking of accounts, that the Association and its lawyers have expended Schedule A property on issues clearly not authorised by the Court's judicial advice, then the Association, its responsible officers and its legal representatives will leave themselves open to personal liability to restore the assets of the trust by reason of procuring or participating in a breach of trust or receiving trust property with knowledge of the facts which make the payments a breach of trust. I have little doubt that the Association, its responsible officers and its lawyers will be well aware of their exposure to such personal liability and will act accordingly in the way in which Schedule A property realisations are expended on costs in the Main Proceedings." (emphasis added) This aspect of Palmer J's reasoning shows the close attention his Honour paid to the intensely adversarial character of the dispute between the plaintiffs and the Association, and to the fact that it involved allegations of breach of trust. That characteristic is also revealed in a further passage in which he rejected the plaintiffs' submission that it was in the best interests of the trust that the Association should not defend the Schedule A Property Issue at all, for if it did not, it would be found liable for breach of trust and the trust fund would be considerably augmented. Palmer J said134: "[T]he submission means that if a claim is made against a trustee for breach of trust and for restoration of the trust fund, it is always the duty of the trustee, even though entirely innocent of any wrongdoing, to surrender to the claim without a fight because surrender and a consequent payment to the trust fund will result in an increase in the trust fund. An increase in the trust fund is in the interest of the trust and a trustee who does not act in the interest of the trust is in breach of trust. It follows that an innocent trustee who defends a claim to restore the fund, by that very act becomes a guilty trustee and a claim for breach of trust which should fail if it were not defended will succeed only because it is defended. It is a pretty paradox β but it is not the law". (italic emphasis added) 134 Application of Macedonian Orthodox Community Church St Petka Inc (No 3) [2006] NSWSC 1247 at [49]. Gummow ACJ Kirby Hayne Contrary to the conclusion of the Court of Appeal, the reasoning of Palmer J β to some extent expressly, and to some extent by implication β addresses the difficulties arising from the fact that the Association was seeking judicial advice as to the defence of proceedings in which its conduct was under challenge. The Court of Appeal criticised Palmer J for failing "to take into account the fact that the principal issue on which advice was sought essentially related to an important contested question in the Main Proceedings"135. The "fact" stated was that advice was sought on whether the Association should defend the proceedings on a particular question, and on whether the Schedule A Property could be used to fund that defence. That "fact" was a factor of which the trial judge was well aware. Hodgson JA's criticisms of Palmer J. Hodgson JA agreed with the views of Ipp JA (Giles JA agreeing), but expressed his opinion on the error alleged in his own words. It is desirable to deal with his Honour's analysis separately. He saw the proceedings as being "non-adversarial" but as having "a substantially adversarial character". He said136: "As shown by Ipp JA, the contest in the proceedings before [Palmer J] did have a substantially adversarial character, in the following respects: (a) The trustee was seeking to use trust property to defend itself against allegations of breaches of trust. (b) The trustee was not disinterestedly asking the Court's guidance on what course to take and/or what were the true terms of the trust, but seeking to advance a particular version for the trust that would protect it from findings of breach of trust. (c) The effect of the advice sought by the trustee would be that a very substantial portion of trust assets would be used up, with little if any prospect of recovery if the decision went against the trustee, thereby to a significant extent pre-empting the decision in the substantive litigation." 135 His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc [2007] NSWCA 150 at [79]. 136 His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc [2007] NSWCA 150 at [7]. Gummow ACJ Kirby Hayne His Honour then said137: "I agree with Ipp JA that these considerations were not taken into account by the primary judge; and that, having regard to them, the Court should decline to give judicial advice in non-adversarial proceedings." Considerations (a) and (b) were matters which Ipp JA viewed as part of the first error found against Palmer J, that which is the subject of the present discussion. Consideration (c) on the other hand, was a matter which Ipp JA dealt with as part of the "balancing exercise" error138. Hodgson JA's consideration (a). Palmer J was aware of, and took into account, consideration (a). He certainly knew, because he alluded several times to the fact that the plaintiffs were alleging in the Main Proceedings that the Association had been acting in breach of trust139. Further, submissions by counsel for the plaintiffs stressed that if the Association failed on the Schedule A Property Issue, the Court would have found that the Association had committed breaches of trust. The consideration which Palmer J is said not to have taken into account is implicit in those circumstances: if the Association succeeded on that issue, it would have defended itself successfully against allegations of breaches of trust. Palmer J dealt in detail with these submissions140. And it must be concluded that he took into account the consideration just referred to. Further, it is not right to read Judgment No 3 as self-contained. In dealing with the arguments leading to Judgment No 3, Palmer J was all too familiar with the background from the hearings leading to Judgment No 1 and Judgment No 2. At the start of Judgment No 3 he stated that he would "assume that the reader of this judgment is generally familiar with the history of the matter"141. It is plain 137 His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc [2007] NSWCA 150 at [8]. 138 Discussed below at [137]-[166]. 139 Application of Macedonian Orthodox Community Church St Petka Inc (No 3) [2006] NSWSC 1247 at [4], [6], [17], [22]-[23], [26], [28], [31]-[34], [40] and [65]. 140 Application of Macedonian Orthodox Community Church St Petka Inc (No 3) [2006] NSWSC 1247 at [48]-[49]: see above at [128]. 141 Application of Macedonian Orthodox Community Church St Petka Inc (No 3) [2006] NSWSC 1247 at [2]. Gummow ACJ Kirby Hayne from Judgment No 1 and Judgment No 2142 that Palmer J was fully aware of Hodgson JA's consideration (a), and there is no reason to suppose that he did not take it into account in arriving at orders 1 and 2. Hodgson JA's consideration (b). Palmer J was also aware of, and took into account, Hodgson JA's consideration (b). He did so, for example, when he summarised the Association's position thus143: "The Association denies that its property is held upon trust at all. Alternatively, it says that if the property is held upon trust, the terms of the trust are subject to the terms of the Association's constitution so that the Association may use that property as it has done, without breach of trust." That passage in Palmer J's Judgment No 3 reveals awareness that the Association was not disinterested, but advanced a particular version of the terms of the trust which, if made out, could protect it from allegations of breach of trust. Palmer J had revealed a similar awareness in his earlier two judgments144. (d) Did Palmer J conduct the correct "balancing exercise"? "Balancing exercise"? The orthodox approach to appellate intervention in relation to discretionary decisions145 requires the expression "balancing exercise" to be employed only with care146. The question is what the particular statute or rule of law conferring the discretion contemplates as relevant or irrelevant factors. If it mandates that 142 Application of Macedonian Orthodox Community Church St Petka Inc [2004] NSWSC 388 at [2]-[3], [9], [15] and [20]; Application of Macedonian Orthodox Community Church St Petka Inc (No 2) (2005) 63 NSWLR 441 at 443 [7], 447 [33]-[34] (and [2005] NSWSC 558 at [48], [52], [55] and [56]). 143 Application of Macedonian Orthodox Community Church St Petka Inc (No 3) [2006] NSWSC 1247 at [6]. 144 For example, Application of Macedonian Orthodox Community Church St Petka Inc (No 2) [2005] NSWSC 558 at [55]-[56]. 145 House v The King (1936) 55 CLR 499 at 504-505: quoted above at n 33. 146 See Dwyer v Calco Timbers Pty Ltd (2008) 82 ALJR 669 at 676-677 [37]-[40]; 244 ALR 257 at 266-267; [2008] HCA 13. Gummow ACJ Kirby Hayne particular weight be given to one factor, that mandate must be obeyed. But, in the absence of any such mandate, the question of what weight the relevant factors should be given or what balance should be struck among them is for the person on whom the discretion is conferred, provided no error of law is made, no error of fact is made, all material considerations are taken into account and no irrelevant considerations are taken into account, subject to the possibility of appellate intervention if there is a plain injustice suggesting the existence of one of the four errors just described even though its nature may not be discoverable, to be known as "Wednesbury unreasonableness"147. is present what has come if there The Court of Appeal's reasoning. The Court of Appeal said Palmer J should have "balanced", on the one hand, the potential benefits of authorising the Association to defend the Main Proceedings on the Schedule A Property Issue, and, on the other, the disadvantages that would follow if the Association were unsuccessful. Those disadvantages were two in number. One was that "costs would be lost" β ie, the Association's costs of defending the proceedings. The other was that the plaintiffs "would seek to recover their costs from the trust". The majority of the Court of Appeal (Ipp JA, Giles JA concurring) said that Palmer JA did not refer to the fact that, if the plaintiffs succeeded in the Main Proceedings, order 2 would cause at least one-third of the value of the Schedule A Property (other than the Church Land) to be lost to the trust148. The Court of Appeal's criticisms: the Association's own costs. The Court of Appeal's criticism in relation to the failure to take into the balance the Association's own costs is not correct. Palmer J assumed the value of the Non- Schedule A Property (other than the Church Land) to be about $1.3 million. He also set out in order 2 the amount of costs which the Association was entitled to expend in defence of the proceedings relating to the Schedule A Property Issue as the sum of $78,666.01 for past costs and up to $216,295 for future costs β a total of $294,961.01. The Association's costs were referred to several times in 147 Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 148 His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc [2007] NSWCA 150 at [98]. Hodgson JA applied to the loss the expression "a very substantial proportion": at [7](c) (quoted at [130] above). Gummow ACJ Kirby Hayne Judgment No 3149 and Judgment No 4150. Finally, Palmer J had made it abundantly plain in Judgment No 1, Judgment No 2 and Judgment No 3 that he was fully aware that without recourse to the Schedule A Property the Association could not defend the Main Proceedings151. Thus Palmer J expressed full awareness of the impact of order 2 in reducing the value of the trust property so far as the Association's costs were concerned. The Court of Appeal's criticisms: the Association's liability for the plaintiffs' costs. What of the plaintiffs' costs? The majority's figure of "at least about one-third" of the Schedule A Property (other than the Church Land) appears to rest on the assumption that if the plaintiffs succeed, "it is likely that recourse would be had to the Schedule A [P]roperty in an amount of not less than about $400,000"152. The majority of the Court of Appeal arrived at that fraction, and adopted that assumption, because it took the value of the Schedule A Property other than the Church Land (less a mortgage to the National Australia Bank Ltd) to be $1,175,000; it said there was evidence that the Association's future costs were likely to be $200,000; it inferred that the plaintiffs' costs would be the same153; and it assumed that the plaintiffs would seek those costs out of the trust assets. The Court of Appeal considered that Palmer J erred in failing to take account of the Association's liability for the plaintiffs' costs if it lost, and in failing to appreciate that the plaintiffs' costs would come out of the trust assets. The plaintiffs' argument to the Court of Appeal: s 59(4). The Court of Appeal's approach diverged, however, from that adopted in the plaintiffs' 149 Application of Macedonian Orthodox Community Church St Petka Inc (No 3) [2006] NSWSC 1247 at [34], [37], [40], [88] and [91]. 150 Application of Macedonian Orthodox Community Church St Petka Inc (No 4) [2007] NSWSC 254 at [9]-[10], [13] and [15]. 151 See [18] above. 152 His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc [2007] NSWCA 150 at [98]. 153 His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc [2007] NSWCA 150 at [48]-[53] and [56]. Gummow ACJ Kirby Hayne submissions to the Court of Appeal154. The submissions to that Court contended that the trustee's right of indemnity under s 59(4) of the Act155 applied "not only to the costs which the trustee incurs to his or her own lawyers in conducting the proceedings but also to any costs which may be awarded against the trustee in the proceedings". The plaintiffs' argument made a number of controversial assumptions and begged a number of questions. In particular, it paid no regard to the question of what expenses fall within the statutory phrase "all expenses incurred"156. Does the expression include expenses arising from breaches of trust of the kind alleged? The Statement of Claim (Version 8) alleges that the Association has, inter alia, breached the trust on which the Schedule A and Non-Schedule A Property is held by applying parts of that property for purposes other than those of the trust in the following ways: preventing the first and second plaintiffs from conducting religious services at the St Petka Church; administering parts of the property to the exclusion of the second plaintiff as parish priest by purportedly dismissing him and ceasing to pay him; employing in his place and paying an allegedly disqualified priest banned from performing clerical duties; requiring or permitting another allegedly disqualified priest to conduct purported religious services in breach of church law; dealing with parts of the property without the first plaintiff's authority; permitting another person allegedly banned from performing clerical duties to use the church hall for purported services without the first plaintiff's authority; refusing to accept applications for membership; and using the property to defend the Main Proceedings, conduct the proceedings for 154 Unlike the written submissions, the plaintiffs' notice of appeal to the Court of Appeal did not contain any material specifically directed to a failure to conduct a balancing exercise. 155 It provides: "A trustee may reimburse himself or herself, or pay or discharge out of the trust property all expenses incurred in or about execution of the trustee's trusts or powers." 156 Similar questions have recently caused difficulty, and a measure of disagreement, in relation to s 59(4) and in relation to rights of indemnity of trustees under the general law, which is similar to that under s 59(4), in Gatsios Holdings Pty Ltd v Nick Kritharas Holdings Pty Ltd (In Liq) [2002] ATPR 41-864 and Nolan v Collie Gummow ACJ Kirby Hayne judicial advice, and conduct the appellate judicial advice proceedings and ceasing to remit 5 percent of the income of the St Petka Parish to the first plaintiff. It is also alleged that the Association "has repudiated" the trust, and has continued to do so despite Hamilton J's decision157. It is further alleged that the Association has not complied with its statutory obligations to lodge its accounts, and that it is in a position of conflict between its duty as a trustee and its interest in avoiding liability for the alleged breaches. Depending on what findings of fact are eventually made by the trial judge, it is possible that the Association has committed very serious misconduct. If so, it is highly doubtful that it could employ s 59(4) to protect itself from the consequences of an order that it pay the costs of the plaintiffs. However, the argument based on s 59(4) need not be considered further: for although s 59(4) was referred to in the plaintiffs' argument to this Court, the Court of Appeal did not rely on it. The argument based on s 59(4) is thus irrelevant to any rebuttal of the Association's argument in support of the notice of appeal that the Court of Appeal erred in detecting an error in Palmer J's reasoning based on a failure to conduct a proper "balancing exercise". The argument based on s 59(4) is also irrelevant to the points raised by way of notice of contention, which does not mention s 59(4). The Court of Appeal's approach: s 93(3). Instead of accepting the plaintiffs' s 59(4) argument, the Court of Appeal relied on s 93(3) of the Act158. It cited Perkins v Williams159 and Titterton v Oates160 for the proposition that: "A 157 Metropolitan Petar v Mitreski [2003] NSWSC 262. 158 It provides: "In any proceedings with respect to the management or administration of any property subject to a trust or forming part of the estate of a testator or intestate, or with respect to the interpretation of the trust instrument, the Court may, if it thinks fit, order any costs to be paid out of such part of the property as in the opinion of the Court is the real subject matter of the proceedings." 159 (1905) 22 WN (NSW) 107. 160 (1998) 143 FLR 467 at 483-484. Gummow ACJ Kirby Hayne person interested in the trust fund who successfully institutes proceedings for removal will, ordinarily, be awarded costs from the fund."161 At the outset it must be noted that the cases cited do not support that proposition. In Perkins v Williams, A H Simpson CJ in Eq ordered the two defendant trustees to be removed for breach of trust, ordered them personally to pay the plaintiff's costs, and reserved the question whether any of the plaintiff's costs not recovered from those defendants be paid out of the trust fund. He later answered that question affirmatively and made a corresponding costs order, while reserving the question of which beneficial interests should bear the burden of that order. This outcome raises a factual question which the plaintiffs did not invite the Court of Appeal to consider, and which it did not consider: to what extent could the plaintiffs' costs of the Main Proceedings, if ordered to be paid by the defendants, be met by the defendants (ie not just the Association) before any question of resort to the trust assets had to arise? As for Titterton v Oates, in that case the Supreme Court of the Australian Capital Territory (Crispin J) ordered that the first defendant be removed as trustee and that the costs of the plaintiff and the second defendant (two of the beneficiaries) be paid out of the trust assets, rather than by the first defendant. However, his Honour did so because, although there was some wilfulness and bitterness in the trustee's conduct, the extent of her responsibility for some breaches of trust was mitigated by an episode of a longstanding depressive illness, and the basis for removal was not that there had been breaches of trust but "that the maintenance of the present arrangement would be inimical to the interests of all concerned."162 This asserts no rule as to what "ordinarily" will happen; and it is factually very remote from the present case. Certainly under the general law trustees in breach of trust can be ordered to pay the costs of proceedings to remove them163. Nothing in s 93(3) of the Act prevents such an order being made in a case in which it would be proper to make it. The question is whether a s 93(3) order might also be made in this case in 161 His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc [2007] NSWCA 150 at [54]. 162 (1998) 143 FLR 467 at 484. 163 Attorney-General v Murdoch (1856) 2 K & J 571 [69 ER 910]; Palairet v Carew (1863) 32 Beav 564 [55 ER 222]. Gummow ACJ Kirby Hayne favour of the plaintiffs if the Association were to lose the Main Proceedings. Whether the "costs" referred to in s 93(3) would include the costs of the plaintiffs in this case would depend on the following matters, among others: whether the trial judge makes a costs order against the Association; what the allowable quantum of the Association's costs are (bearing in mind the constant complaints by the plaintiffs that the figures given for the Association's costs are far too high); and whether the trial judge directs that the Association is at liberty to satisfy that costs order out of the trust assets β either at all, or only on the Schedule A Property Issue (that being arguably necessitated by doubts as to the terms of the trust for which none of the parties were responsible). On the last matter, it would be bizarre that a trustee responsible for (and other defendants participating with the trustee in) grave breaches of trust of the kind alleged in the Statement of Claim (Version 8) should not be exposed to personal liability for the costs of proceedings to remedy the breaches, including the costs of the plaintiffs. The plaintiffs instituted the Main Proceedings for various purposes, including to vindicate the authority of the first plaintiff and the position of the second plaintiff. However, amongst the purposes is a desire to preserve the property of the trust alleged. It is difficult to imagine that, if the Main Proceedings succeed and a new trustee is appointed, either the plaintiffs or the new trustee would calmly acquiesce in the Association's relying on s 93(3) of the Act to absolve it of its liability under an order that it pay the plaintiffs' costs, and thereby further destroy the property of the trust which the proceedings were instituted to preserve. Nor is it likely that the Court would exercise its discretion under s 93(3) favourably to the Association if the allegations in the Statement of Claim were fully made out. In particular, it is difficult to imagine that the Court would order that the plaintiffs' costs be paid out of the trust property at least until the plaintiffs had exhausted their rights under costs orders against the defendants. In this respect, the plaintiffs displayed a certain inconsistency in their arguments. Although they often criticised the amount which the Association had spent or wanted to spend on its lawyers, their defence of the Court of Appeal's reasoning about the "balancing exercise" assumes that for them to spend the same amount on the whole case as the Association did on the Schedule A Property Issue would be reasonable. Yet if the plaintiffs' criticism is sound, that assumption might be wrong, and it was otherwise unsupported. Another inconsistency was that, for some purposes, the plaintiffs contended that there was no need for the Association to have access to the trust property to fund the proceedings, since the funds could be raised from other persons, presumably including the other defendants; yet for other purposes the plaintiffs contended that, if the plaintiffs succeeded, the defendants could not pay their costs. These inconsistencies, and the lack of analysis they received from Gummow ACJ Kirby Hayne bar and bench in the courts below, raise a further question over the Court of Appeal's criticism of Palmer J in relation to the "balancing exercise". The Court of Appeal's judgment contains no assessment of the factors just outlined. Doubtless that is because the submissions of the parties to the Court of Appeal, and those of the plaintiffs in particular, contain no assessment of them. If Palmer J failed to assess them, that is because in the six sets of written submissions supplied by the plaintiffs to him the material devoted to the relevance of the risk that the plaintiffs' costs could come out of the trust assets was limited to the following passage: "Judicial advice which authorises the bringing or the defence of proceedings must contemplate the possibility that the trustee will be unsuccessful, and that the trustee's costs, and the other party's costs, will thereby fall upon the trust estate." (emphasis added) The submissions did not refer, in terms, either to s 59(4) or to s 93(3). Thus Palmer J was not favoured with a specific argument corresponding with the Court of Appeal's reasoning. He did not deal with any such point in specific terms, although he did make general references among a list of the relevant factors to "the amounts involved, including likely costs", "the likely costs to be incurred by the trustee" and "the cost of the litigation [being] very great"164. If Palmer J overlooked the very brief submission made, he could be excused for having done so. And if he did not overlook it, but regarded its generality as being so unsatisfactory that it did not call for specific treatment, he could be excused for that too. Appellate interference with discretionary judgments on the ground that a consideration was left out of account depends on into account some material establishing consideration"165 (emphasis added). The error perceived by the Court of Appeal was an error relating to an unspecified and unspecifiable sum of money up to $200,000 in a case in which Palmer J was acutely conscious of the propensity of the parties to fight over issues in a manner wholly disproportionate to what was at stake, and in which he had seen the loss of almost $300,000 to the trust estate as not being disproportionate to the benefits to be gained by the litigation. judge did "not take that the 164 Application of Macedonian Orthodox Community Church St Petka Inc (No 3) [2006] NSWSC 1247 at [80]-[81]. 165 House v The King (1936) 55 CLR 499 at 505 per Dixon, Evatt and McTiernan JJ. Gummow ACJ Kirby Hayne The figure of $200,000 also depended on numerous contingencies which Palmer J had not been asked to analyse. Considerations of a controversial kind in relation to applying s 93(3) to the facts were also material, but not developed before Palmer J. Assuming in favour of the plaintiffs that his Honour in fact failed to take the point into account, in those circumstances the terms in which the point was put to Palmer J, so far as it was put at all, amongst a mass of other submissions of the utmost complexity and detail, preclude it being regarded as a material matter which he ought to have taken into account. For if the plaintiffs did not see it as sufficiently material to merit proper exposition and development, why should he? Further error in the "balancing exercise"? The only flaw identified by the Court of Appeal in the failure of the primary judge to conduct a "balancing exercise" related to the liability of the trust assets for the Association's costs and the plaintiffs' costs. However, in this Court the plaintiffs contended in addition that Palmer J had committed a further error in relation to the balancing exercise by failing to form some view of the strength of the Association's defence, which he could not do until the Schedule A Property Issue had been defined by the filing of the defence to the Statement of Claim (Version 8). The plaintiff submitted that it was not enough for Palmer J to conclude that there were "sufficient prospects of success to warrant the Association defending the Schedule A Property Issue"166, but that he should have formed a view of its "strength", so that that could be weighed in the balance. This submission is hypercritical. In contemporary circumstances where there is an increasing tendency on trial (as on appeal) to commit argument to very detailed and lengthy written submissions, it is undesirable that appellate courts should adopt a hypercritical stance. Doing so tends to encourage further litigation and to cause sight of the substantive merits (including the legal merits) of the case to be lost. This is particularly so where what is at stake is a discretionary decision which can rarely, or never, be explained exhaustively and entirely in the reasons provided by judges for their determinations. 166 Application of Macedonian Orthodox Community Church St Petka Inc (No 3) [2006] NSWSC 1247 at [82]. Gummow ACJ Kirby Hayne Palmer J had great difficulties in dealing with an opinion of counsel which the Court of Appeal had earlier held167 was privileged. That opinion necessarily relied on assumptions of fact which could only be tested at the trial. Even assuming that Palmer J did not state a concluded view about strength, that did not exclude the possibility that he had formed a particular but necessarily tentative view about strength, given the assumptions of fact made in the opinion, because it was not open to him to reveal the contents of the opinion. Although the plaintiffs' submissions take Palmer J to be using the term "sufficient prospects of success" in apposition to an opinion about strength, that is not the way Palmer J used the term. His Honour said168: "In a judicial advice application in which the trustee asks whether it is justified in prosecuting or defending litigation, all the Court does is to reach a view as to whether the Opinion of Counsel satisfies it that there are sufficient prospects of success to warrant the trustee in proceeding with the litigation. Counsel's Opinion must address the facts necessary to support the legal conclusions reached and must demonstrate that the propositions of law relied upon for those conclusions are properly arguable. Whether, in the light of Counsel's Opinion, there are 'sufficient' prospects of success calls for another judgment, founded upon such considerations as: the nature of the case and the issues raised; the amounts involved, including likely costs whether the likely costs to be incurred by the trustee are proportionate to the issues and [the] significance of the case; the consequences of the litigation to the parties concerned; in the case of a charitable trust, any relevant public interest factors". (emphasis added) 167 Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar, the Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand (2006) 66 NSWLR 112. 168 Application of Macedonian Orthodox Community Church St Petka Inc (No 3) [2006] NSWSC 1247 at [80]. Gummow ACJ Kirby Hayne Thus Palmer J distinguished the question of whether propositions were properly arguable from the question whether there were "sufficient" prospects. "[Counsel's opinion] specifically addresses the facts relating to the Schedule A Property Issue, amongst other issues. The propositions of law relied upon are properly arguable. I have considered the factors referred to above. While the cost of the litigation is very great, so also is the importance of the litigation to a section of the community. As I have said, the final settlement of the dispute as to the use of the Church, which has already divided the community so bitterly for such a long time, is in the public interest." Nothing in the foregoing reasoning indicates that Palmer J distinguished between mere "sufficiency" and "strength"; indeed he had earlier stated as a relevant factor "the merits and strengths of the claim against the trust estate"170. Nor does the plaintiffs' submission demonstrate that Palmer J was disabled from reaching the stated assessment by the absence of a defence to the Statement of Claim (Version 8). The contents of counsel's opinion doubtless indicated in general terms what the contents of the defence would in due course be171. Conclusion respecting "balancing exercise". The primary judge was not shown to have erred by failing to have regard to the effect on the trust property of advising the Association that, subject to the limitations fixed by the primary judge, the Association would act properly if it defended the Main Proceedings. What orders for costs should be made at the conclusion of the Main Proceedings will be a matter for the trial judge that is to be decided having regard to the way in which the various issues joined in those proceedings are decided. In the circumstances, it was not necessary for the primary judge to predict what costs orders might be made at the end of the trial of the Main Proceedings. It is, therefore, not now necessary to explore further the various costs orders that might possibly be made beyond noticing that one form of order that may be made in proceedings in which there are allegations of breach of trust and a claim for 169 Application of Macedonian Orthodox Community Church St Petka Inc (No 3) [2006] NSWSC 1247 at [81]. 170 Application of Macedonian Orthodox Community Church St Petka Inc (No 3) [2006] NSWSC 1247 at [62]: see above at [84]. 171 A different complaint about the absence of a defence by the plaintiffs is considered below: [174]-[177]. Gummow ACJ Kirby Hayne removal of a trustee is an order that the defaulting trustee pay the costs of opposite parties without resort to the trust property. Whether, at the conclusion of the Main Proceedings, it would be appropriate to order that the Association should itself pay the costs of the other parties to the proceedings (without resort to the trust property) is a point about which it is not profitable to speculate further. The primary judge's conclusion that it is proper for the Association to defend those proceedings (subject to the various limitations indicated in those orders) should stand. Unless it is later contended that there was "any fraud or wilful concealment or misrepresentation in obtaining the ... advice"172, it follows that, subject to those limitations, the Association may resort to the Schedule A Property to meet its costs and expenses of defending the proceedings. It also follows that, absent a contention of fraud, wilful concealment or misrepresentation, the Association could not later be ordered, in the Main Proceedings, to restore to the trust property the costs that it had thus paid or retained. That inevitable consequence of an order in the nature of order 2 may constitute a powerful reason, if all that were at stake in proceedings were the liability of a trustee personally to make good the consequences of what is alleged to be the trustee's breach of trust, to make no order permitting such a trustee to defend the suit at the expense of the trust fund. But as explained earlier173 that is not this case. (e) Did Palmer J deny procedural fairness in relation to privileged material? The plaintiffs' argument. In support of their notice of contention, the plaintiffs submitted that, once they had been served with the Association's application for judicial advice, it was possible that their "rights" could be affected, because the advice could bind them under s 63(11). The plaintiffs submitted that it followed that, as a matter of procedural fairness, they should have been given the opportunity to participate in as meaningful a way as possible in the proceedings. A key difficulty for the plaintiffs was the existence of the earlier decision in Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar, the Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand174. In that case a majority of the Court of Appeal held that the opinions 172 Trustee Act 1925 (NSW), s 63(2). 173 See [67]-[68] and [73]. 174 (2006) 66 NSWLR 112. Gummow ACJ Kirby Hayne of counsel were the subject of client legal privilege under Pt 3.10, Div 1 of the Evidence Act 1995 (NSW), and that the privilege was not waived by their use in judicial advice proceedings. The plaintiffs accepted that, so long as that earlier decision stood, Palmer J was bound to apply it, as he did175. The plaintiffs formally submitted to Palmer J, and to the Court of Appeal in the appeal from Palmer J, that that earlier decision should not have been followed because it was wrong. The correctness of the earlier decision cannot be raised by way of notice of contention. Contrary to the plaintiffs' submissions, the question of whether the earlier decision was correct was not a question which the Court of Appeal "erroneously decided, or ... failed to decide" within the meaning of r 42.08.5 of the High Court Rules 2004 (Cth). The Court of Appeal was bound to apply its own earlier decision unless the plaintiffs made an application to have the earlier decision overruled. This they did not do. It follows that the Court of Appeal, like Palmer J, was right to follow the earlier decision, and that the formal submission that it was wrong, made only to preserve the plaintiffs' position in this Court, was not a submission which the Court of Appeal was obliged, or permitted, to deal with. Hence the question whether the earlier decision was correct is not something that the plaintiffs can raise in this Court as of right under their notice of contention. It is rather a question which arises only in relation to the application for special leave to cross- appeal against the earlier decision. That question will be discussed below176. Discretion to permit access? The plaintiffs submitted, however, that Palmer J had a discretion to provide them with the relevant parts of counsel's opinions in relation to the strength of the Association's case on the Schedule A Property Issue. The plaintiffs relied on Official Solicitor to the Supreme Court v K177. In that case the court was said to have a discretion to permit a mother to be shown a medical report about her child even though it was confidential. However, that case did not concern a privileged document, simply a confidential one. And once it is accepted that the opinions were the subject of client legal privilege under Pt 3.10, Div 1 of the Evidence Act 1995 (NSW), 175 Application of Macedonian Orthodox Community Church St Petka Inc (No 3) [2006] NSWSC 1247 at [21]. 176 See [178]-[184]. 177 [1965] AC 201 at 219, 234 and 238. Gummow ACJ Kirby Hayne access to them could only be had by invoking some provision of that Part or some other provision of the Evidence Act permitting access. The plaintiffs did not point to any such provision. Election between waiving privilege and abandoning the application. Finally, the plaintiffs suggested that Palmer J ought to have put the Association to an election between waiving privilege in the opinions and abandoning the s 63 application. The plaintiffs did not develop this idea. Nor did they point to any passage in the record in which Palmer J was urged to take this course or in which the Court of Appeal was urged to allow the appeal because of his failure to take it. In these circumstances Palmer J cannot be criticised for failing to take it. It follows that Palmer J did not make any error in refusing the plaintiffs access to the opinions of counsel. The Court of Appeal's orders cannot be supported by contending that there was. Did Palmer J deny procedural fairness in dealing with the Association's application before it had filed its defence? The plaintiffs' argument. The plaintiffs contended in their notice of contention that Palmer J ought to have delayed giving his advice until the Association's defence had been filed. The questions of what the differences between the parties were on the Schedule A Property Issue, how long it would take to resolve them, and what the costs would be necessarily depended on all the parties and Palmer J understanding what the differences were. While Palmer J had some idea of the nature of the defence by reason of his access to the opinions of counsel, the plaintiffs did not. The clarity of the issues. It was for the plaintiffs to make out their case on the Schedule A Property Issue. They put their case in pars 7A and 22 of their Statement of Claim (Version 8). It is possible that parts of these allegations have been admitted in the defence which was not before Palmer J but has since been filed. However, the conduct of these proceedings over more than a decade does not suggest that that is a possibility which will do much to shorten controversy. In the Fourth Amended Statement of Claim there was no par 7A, but par 22 corresponded substantially with its counterpart in the Statement of Claim (Version 8), although the latter contains numerous additional particulars. The defence filed in answer to the Fourth Amended Statement of Claim consisted largely of denials and non-admissions. In the circumstances, Palmer J's identification of the Schedule A Property Issue by reference to pars 7A and 22 was adequate, and sufficient to enable the plaintiffs to debate the merits of granting judicial advice without any breach of procedural fairness. Gummow ACJ Kirby Hayne It follows that the absence of a defence to the Statement of Claim (Version 8) did not mean that Palmer J had denied procedural fairness to the plaintiffs. Application for special leave to cross-appeal: privileged opinions The plaintiffs sought special leave to cross-appeal against the failure of the Court of Appeal, in hearing the appeal from the orders made by Palmer J pursuant to Judgment No 3 and Judgment No 4, "to decide that ... the Association's putting the written opinion of counsel before the Court in support of the Association's application for judicial advice ... amounted to a waiver of legal professional privilege in respect of the legal opinion." There are three difficulties in this application. The first difficulty is technical. A cross-appeal, like an appeal, is against orders, not reasoning or particular decisions leading to an order. The orders made by the Court of Appeal on the appeal from the orders made by Palmer J after Judgment No 4 gave the plaintiffs the amplest success they could have hoped for, except as to costs, because the Court of Appeal set aside Palmer J's orders and dismissed the Association's summons for judicial advice. The plaintiffs were not wholly successful in relation to costs, but the question of whether the privilege in the opinions of counsel had been waived was immaterial to costs. A second, and more substantive, difficulty is that the Court of Appeal, while deciding the appeal against Palmer J's orders, could not have held that privilege had been waived without overruling its own earlier decision the previous year that there had not been waiver178. The plaintiffs did not invite the Court of Appeal to do this, but merely made a formal submission that the earlier decision was wrong. Since the submission was only formal, the Court of Appeal did not err in rejecting it. The third difficulty is that this part of the application for special leave to cross-appeal against the Court of Appeal's orders made on 22 June 2007 is actually, in substance, an application for special leave to appeal against the Court 178 Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar, the Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand (2006) 66 NSWLR 112. Gummow ACJ Kirby Hayne of Appeal's orders made in its decision about waiver the previous year. So viewed, the application is well out of time: it ought to have been made within 28 days of 29 June 2006, but it was not made until 15 April 2008. The plaintiffs submitted that they had been of the view that they did not necessarily have to win on the waiver issue and wanted to get on with the case, but no satisfactory explanation was offered for the delay. They submitted that the waiver decision "was given in an interlocutory appeal and ... the matter has now reached this Court following the making of final orders"; since the plaintiffs had been brought to the High Court by the Association and had raised the point, "the Court ought to deal with it." That call to duty cannot succeed, especially in the context of the enthusiastic course of litigation that marked this case. To hold that the Court of Appeal's decision that there had been no waiver was wrong would not reveal any error by Palmer J, since he was bound by that decision, and would not serve any useful purpose in these proceedings. If events have placed the plaintiffs in difficulty, it is the consequence of their having failed to seek special leave to appeal against the waiver decision within the time provided by the Rules of this Court. Application for special leave to cross-appeal: orders of Palmer J in relation to Judgment No 1 and Judgment No 2 As part of Judgment No 1, Palmer J made two directions, described above as Direction 1 and Direction 2179. Further, as part of Judgment No 2, Palmer J made a direction described above as Direction 3180. During the hearing that led to Judgment No 3, the plaintiffs sought to have Directions 1, 2 and 3 revoked. Palmer J refused that application in Judgment No The plaintiffs sought leave to appeal against Directions 1, 2 and 3 in the course of their appeal against the orders made in consequence of Judgment No 3 179 See [14]. 180 See [15]. 181 Application of Macedonian Orthodox Community Church St Petka Inc (No 4) [2007] NSWSC 254 at [14]. Gummow ACJ Kirby Hayne and Judgment No 4. The Court of Appeal refused that leave. It said that by the time the revocation application was made to Palmer J, "the Association had acted upon those orders and had obtained [counsel's] opinions on the strength thereof." It also said that the Association had not previously sought leave to appeal against the three orders. It concluded that it would be unjust to grant leave to appeal so late in the proceedings β a reference to the fact that lengthy extensions of the periods within which to seek leave to appeal would be called for182. The plaintiffs complain that Palmer J's reasons were "obscure" and that the Court of Appeal's reasons were "irrelevant". The merits of these complaints need not be examined. There would only be utility in the appeal if it could be shown that Non-Schedule A Property had been used in relation to the first two directions. It has not been shown that it has been. The success of the Association's appeal to this Court demonstrates that the cross-appeal would fail, and hence lack utility, in relation to the Schedule A Property. Special leave to cross-appeal should be refused on the grounds that the plaintiffs delayed in approaching both Palmer J and the Court of Appeal, that no point of principle meriting the grant of special leave exists, and that no utility in the cross-appeal has been demonstrated. Balance of notice of contention and application for special leave to cross-appeal Other points were raised in the notice of contention and the draft notice of cross-appeal, but since no argument was advanced in support of them, it is not necessary to deal with them. Some other arguments were advanced, but since they were related to the notice of appeal, the notice of contention or the draft notice of cross-appeal, it is not necessary to deal with them either. Conclusions and orders Upon one view, what was involved in these proceedings was the consideration by this Court of little more than the disturbance of orders made in the exercise of discretionary power by a judge empowered to superintend the conduct of a trustee under provisions afforded to him, in that respect, by the Act. We have dealt with the proceedings at some little length for a number of reasons. 182 His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc [2007] NSWCA 150 at [125]-[126]. Gummow ACJ Kirby Hayne They involved a consideration of powers that, despite their long history, rarely reach the consideration of final appellate courts. Those powers are of frequent practical importance in the administration of the Act which has a distinct provenance in legislation first enacted in England and later in Australia. They also find reflection in statutes operating in Australian jurisdictions other than that to which the Act applies. They arise in bitterly contested proceedings between parties who have asserted, and litigated, their legal rights up to this Court by advancing numerous complex and detailed submissions. And they illustrate the particular care that must be taken by appellate courts, in such circumstances, in disturbing the conclusions of a trial judge in arriving at such decisions, except in the limited circumstances explained by this Court in House v The King183. Unless restraint is employed in cases of the present kind, in disturbing the orders of trial judges, the risk is run that escalating litigation is encouraged; the resolution of the substantive dispute is delayed; legal costs are incurred in disproportion to the value of assets at stake; and other public and private costs are improvidently incurred. Against such outcomes, this Court has frequently expressed, and reasserted, the need for particular appellate restraint184. The orders of the Court of Appeal which should not be interfered with are order 2 made on 22 June 2007 (refusing the plaintiffs leave to appeal against orders of Palmer J made on 7 May 2004 and 10 June 2005) and order 4 made on 23 October 2007 (ordering the plaintiffs to pay the Association's costs of that leave application). In relation to the remaining orders of the Court of Appeal, the following orders were pronounced on 7 August 2008185. Appeal allowed. Respondents to pay the appellant's costs of the appeal. Set aside order 1 of the orders made by the Court of Appeal of the Supreme Court of New South Wales on 22 June 2007 and, in its place, 183 (1936) 55 CLR 499 at 505. 184 cf Singer v Berghouse (1994) 181 CLR 201 at 212 per Mason CJ, Deane and McHugh JJ applying Golosky v Golosky unreported, NSW Court of Appeal, 5 October 1993 at 13-14 per Kirby P; [1994] HCA 40. 185 As to orders 5 and 6, see Nissen v Grunden (1912) 14 CLR 297 at 321; [1912] HCA 35. Gummow ACJ Kirby Hayne order that the application for leave to appeal to that Court be dismissed with costs. Application for special leave to cross-appeal dismissed with costs. Set aside orders 1, 2, 3 and 5 of the orders made by the Court of Appeal of the Supreme Court of New South Wales on 23 October 2007 and, in their place, order that the appellant be entitled to be reimbursed out of the Schedule A Property for the balance of its costs, charges and expenses incurred in conducting the proceedings in the Court of Appeal to the extent to which they are not paid by the respondents. Order that the appellant be entitled to be reimbursed out of the Schedule A Property for the balance of its costs, charges and expenses incurred in conducting the proceedings in this Court to the extent to which they are not paid by the respondents. 192 KIEFEL J. The factors which the Court of Appeal of the Supreme Court of New South Wales186 considered that Palmer J had not taken into account, in deciding to give advice to the Association (the trustee)187, are identified in the judgment of Gummow ACJ, Kirby, Hayne and Heydon JJ188. Principal amongst them is the opinion that it is inappropriate to use proceedings brought under s 63 of the Trustee Act 1925 (NSW) for adversarial purposes. The members of the Court of Appeal accepted that a previous decision of that Court189 holds that an application under s 63 is not to be regarded as adversarial because parties who are served with its process are adversaries and because there is an element of contest concerning the advice sought190. Their Honours considered that proceedings may become adversarial and the advice sought inappropriate to be given and that this had occurred in the present case. Their Honours differed somewhat in their reasoning to this conclusion. Ipp JA191, with whom Giles JA agreed192, was of the view that the proceedings had been used to determine rights as between the parties and this was reflected in the decision of Palmer J. The advice sought by the Association was of an essentially adversarial nature193. The nature of the advice was coloured by the 186 Giles, Hodgson and Ipp JJA in His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc [2007] NSWCA 150. 187 Application of Macedonian Orthodox Community Church St Petka Inc (No 3) [2006] NSWSC 1247; Application of Macedonian Orthodox Community Church St Petka Inc (No 4) [2007] NSWSC 254. 189 Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar, the Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand (2006) 66 NSWLR 112 at 123 [42], 125-126 [54]-[56] per Beazley and Giles JJA. 190 His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc [2007] NSWCA 150 at [2] per Giles JA, [7] per Hodgson JA, [81] per Ipp JA. 191 [2007] NSWCA 150 at [78]. 192 [2007] NSWCA 150 at [2]. 193 [2007] NSWCA 150 at [82]; and see at [2] per Giles JA. issues in the Main Proceedings194, where an important issue is whether the Association has breached the trust195. Hodgson JA was also of the view that the proceedings had been rendered adversarial because the advice concerned the position of the Association as trustee, because it was not disinterested in the advice sought and was seeking to use trust property196. The views expressed by their Honours in the Court of Appeal might be taken to involve a limitation upon the power given by s 63, which is to say the jurisdiction of the Supreme Court to give advice197. However their Honours appear to have dealt with the matter on the basis that Palmer J's discretion miscarried198 rather than by reference to any jurisdictional bar. Proceedings provided for by s 63 do not involve the determination of a controversy, but rather the giving of advice or direction to a trustee with respect to questions of the kind referred to in the section. Section 63 is an exception to a Court's ordinary practice of deciding disputes between competing litigants, as Palmer J observed199. But his Honour's orders were not determinative of the parties' rights. The advice given was as to whether, and upon what terms, proceedings should be pursued in order to finally determine the controversy as to the terms of the trust upon which the Association held property. The advice was advice respecting the interpretation of the trust instrument and was therefore within power. The interests of the parties and the liability of the Association as trustee were to be determined, but in the Main Proceedings. It may be inferred that their Honours in the Court of Appeal considered that the connection of the advice to the pursuit, or defence, of the Main Proceedings to be so important a factor as to foreclose the giving of such advice. I agree with the plurality that the discretion is not to be exercised by reference to some such overriding consideration200. In exercising the discretion the Court 194 The term used in the plurality judgment. 195 [2007] NSWCA 150 at [85]. 196 [2007] NSWCA 150 at [7]; and see at [82] per Ipp JA. 197 See Australian Broadcasting Commission v O'Neill (2006) 227 CLR 57 at 78-81 [54]-[64] per Gummow and Hayne JJ; [2006] HCA 46. 198 [2007] NSWCA 150 at [78] per Ipp JA, [7] per Hodgson JA. 199 Application of Macedonian Orthodox Community Church St Petka Inc (No 2) (2005) 63 NSWLR 441 at 445 [23]. should be guided by the scope and purposes of the section. The principal purpose of the section, and the opinion, advice or direction given under it, is the protection of the interests of the trust. Another purpose is the protection of a trustee who is acting in that regard and upon advice201. Securing the latter purpose may ensure the attainment of the principal purpose, by removing the concern of a trustee about exposure beyond their usual indemnity. It is apparent from the reasons of Palmer J that his Honour considered that it was in the interests of the trust that the uncertainty as to the terms of the trust should be resolved, once and for all202. The correctness of that view cannot be doubted, particularly given that the trust is for a charitable purpose. The issues relating to the trustee in the Main Proceedings should be seen in this perspective. They assume a lesser importance than the attainment of the principal object of the section. His Honour expressed himself as satisfied that opinions of counsel demonstrated that there were sufficient prospects of success to warrant the Association defending the question of construction. The questions that are identified by s 63 as the subject of the advice of the Court may predictably arise in the context of litigation where a trustee is accused of breach of trust. If the litigation may resolve a question to which s 63 refers, and it is in the interests of the trust estate to do so, the trustee should be protected in achieving that resolution. That the trustee may also benefit from a determination, as would here be the case if the Association's version of the terms of the trust were upheld, is not to the point. It may be appropriate that the Court condition the advice or limit the access to the trust estate to the costs of determination of the dispute in question. It was not necessary in this case to altogether refuse to give the advice or direction sought. I agree that, in determining to give the advice sought, Palmer J did not fail to address relevant questions, for the reasons given by the plurality. His Honour was well aware of the issues relating to the Association in the Main Proceedings and of the impact of orders for costs upon the trust estate, to the extent that the parties contended for. His Honour was entitled to determine the application on facts which had not been tested in litigation. The summary nature of the proceedings under s 63 will often require a Court to proceed in this way. The extent of the information available to the Court and its apparent reliability are factors going to the exercise of the discretion to give the advice. I also agree, notwithstanding the plaintiff's contention to the Court of Appeal, that Order 6 of 201 See Trustee Act, s 85(1) and (2). 202 Application of Macedonian Orthodox Community Church St Petka Inc (No 3) [2006] NSWSC 1247 at [50]. Palmer J's orders allows for revocation of his Honour's orders only with respect to their future operation203. There is no substance to the matters raised in the notice of contention. I agree with the reasons of the plurality in this regard. It was for these reasons that I joined in the orders pronounced by the Court on 7 August 2008. 203 Reasons of Gummow ACJ, Kirby, Hayne and Heydon JJ at [89]-[96]. |
HIGH COURT OF AUSTRALIA CMB AND APPELLANT ATTORNEY GENERAL FOR NEW SOUTH WALES RESPONDENT CMB v Attorney General for New South Wales [2015] HCA 9 11 March 2015 ORDER Appeal allowed. Set aside the orders of the Court of Criminal Appeal of the Supreme Court of New South Wales made on 19 March 2014. Remit the matter to the Court of Criminal Appeal of the Supreme Court of New South Wales for determination. On appeal from the Supreme Court of New South Wales Representation C T Loukas SC and G A Bashir SC with B C Dean for the appellant (instructed by Legal Aid NSW) J V Agius SC with B K Baker for the respondent (instructed by Crown Solicitor (NSW)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS CMB v Attorney General for New South Wales Criminal law β Sentencing β Sentence increased on prosecution appeal under s 5D of Criminal Appeal Act 1912 (NSW) β Appellant charged with sexual assault of daughter β Director of Public Prosecutions referred appellant for assessment for pre-trial diversion program β During assessment appellant disclosed further offences committed against daughter β First set of offences dealt with under program β Appellant charged with further offences and sentenced to good behaviour bonds with condition appellant complete program β Attorney General filed notice of appeal β Court of Criminal Appeal allowed appeal and re-sentenced appellant to five years and six months' imprisonment β Whether Court of Criminal Appeal erred in not exercising residual discretion to decline to interfere β Whether Court of Criminal Appeal erred in placing onus upon appellant with regard to exercise of residual discretion to dismiss appeal and limiting purpose of Crown appeals β Whether Court of Criminal Appeal erred in application of s 23 of Crimes (Sentencing Procedure) Act 1999 (NSW) and principles regarding voluntary disclosure of otherwise unknown guilt. Words and phrases β "discretion not to intervene", "leniency", "manifestly inadequate", "onus", "proper sentence", "residual discretion", "restraint", "unreasonably disproportionate". Criminal Appeal Act 1912 (NSW), s 5D. Pre-Trial Diversion of Offenders Act 1985 (NSW). Crimes (Sentencing Procedure) Act 1999 (NSW), s 23. FRENCH CJ AND GAGELER J. The office of the Director of Public Prosecutions ("the DPP") was established by statute in New South Wales in 19861. The DPP is responsible to the Attorney General for the exercise of statutory functions2 which include the institution and conduct, on behalf of the Crown, of prosecutions for indictable offences, relevantly in the District Court3. The statutory functions for which the DPP is responsible to the Attorney General also include the institution and conduct, on behalf of the Crown, of an appeal, relevantly in the Court of Criminal Appeal, in respect of any such prosecution4. Since 1986, s 5D(1) of the Criminal Appeal Act 1912 (NSW) has provided: "The Attorney-General or the Director of Public Prosecutions may appeal to the Court of Criminal Appeal against any sentence pronounced by the court of trial in any proceedings to which the Crown was a party and the Court of Criminal Appeal may in its discretion vary the sentence and impose such sentence as to the said court may seem proper." The present appeal to this Court, by "CMB", is from a decision given by the Court of Criminal Appeal on an appeal by the Attorney General against a sentence pronounced by the District Court for offences prosecuted by the DPP. CMB had confessed to those offences, and pleaded guilty to them. The District Court, at the request of CMB and of the DPP, imposed a non-custodial sentence. The DPP announced that he would not appeal. The Attorney General appealed some weeks later. The Court of Criminal Appeal found the District Court to have proceeded on a legal misunderstanding in sentencing CMB. It found the non-custodial sentence pronounced by the District Court to have been manifestly inadequate. It went on to formulate and explain the custodial sentence which to it seemed proper. As the final step in its reasoning, the Court of Criminal Appeal turned to the discretion conferred by s 5D of the Criminal Appeal Act. It stated that it took the law to be that the respondent to an appeal under that section had the onus of establishing that the discretion should be exercised in his or her favour. It stated 1 Director of Public Prosecutions Act 1986 (NSW). 2 Section 4(3) of the Director of Public Prosecutions Act 1986 (NSW). 3 Section 7(1)(a) of the Director of Public Prosecutions Act 1986 (NSW). 4 Section 7(1)(b) of the Director of Public Prosecutions Act 1986 (NSW). its conclusion in terms which reflected that onus. It said that it was ultimately not satisfied that there was any reason why it should exercise the discretion not to intervene. It then made orders having the effect of varying the sentence pronounced by the District Court by imposing the custodial sentence which to it seemed proper. The Court of Criminal Appeal was wrong in the view it took of the law in that final step in its reasoning. It is the appellant in an appeal under s 5D of the Criminal Appeal Act who throughout has the burden of establishing that the discretion conferred by that section should be exercised to vary the sentence imposed by the court of trial. The Court of Criminal Appeal's erroneous view of the discretion was material to its decision. In light of the peculiarity of the background circumstances and of the conduct of the representative of the DPP in the District Court, it cannot be said that it was not open to the Court of Criminal Appeal in the Attorney General's appeal to it to have exercised the discretion against imposing the custodial sentence. The consequence is that CMB's appeal to this Court must be allowed. The decision of the Court of Criminal Appeal must be set aside, and the Attorney General's appeal against the sentence pronounced by the District Court must be remitted to the Court of Criminal Appeal for reconsideration. To explain that result, it is necessary first to explain the background to the prosecution which the DPP brought against CMB in the District Court. Background The background to the prosecution lay in curial and non-curial procedures for which provision was made in the Pre-Trial Diversion of Offenders Act 1985 (NSW). That Act provided for the protection of children who had been victims of sexual assault by a person who is a parent (or the spouse or de-facto partner of a parent) through the establishment and operation of a program for the treatment of such a person, which was administered by the Department of Health5. The program was known in practice as the Cedar Cottage Program ("the Program"). The Pre-Trial Diversion of Offenders Act allowed the DPP to refer a person charged with a sexual assault offence committed on a child of the person or person's spouse for assessment in relation to the person's suitability to participate in the Program6. If the Director of the Program assessed the person to 5 Sections 2A and 30A of the Pre-Trial Diversion of Offenders Act 1985 (NSW). 6 Sections 3A and 10 of the Pre-Trial Diversion of Offenders Act 1985 (NSW). be suitable, and if the person pleaded guilty to the charge, the person would be invited to give an undertaking to participate in the Program for a period of up to two years7. On that undertaking being given, the person would be convicted, but would not be sentenced or otherwise dealt with in relation to the offence provided the person complied with the undertaking and other statutory requirements8. The procedures for referral of a person and for assessment in relation to that person's suitability to enter into the Program depended on the existence of a regulation made under the Pre-Trial Diversion of Offenders Act9. A regulation which was made in 2005 remained in existence until 31 August 201210. It was repealed on 1 September 201211. There is no dispute that the effect of that repeal was that the procedures for which the Act provided remained available to a person in relation to charges laid before 1 September 201212, but that those procedures were not available to a person in relation to charges laid on or after 1 September 2012. CMB sexually assaulted his daughter on numerous occasions between 2004 and 2006. She was then aged between 10 and 12. Some but not all of the assaults came to light in 2011 when his daughter reported them to police. She was then aged 17. As a result of his daughter's report, CMB was interviewed by police on 27 October 2011. He was on that day charged with 22 sexual offences committed against his daughter between 2004 and 2006. The DPP later reduced those charges to five counts of aggravated sexual assault, two counts of attempted aggravated indecent assault, and three counts of aggravated indecent assault ("the first set of charges"). The DPP referred CMB for assessment in relation to his suitability to participate in the Program in April 2012. In October 2012, in the course of being assessed for participation in the Program, CMB disclosed to Program staff that he 7 Section 23 of the Pre-Trial Diversion of Offenders Act 1985 (NSW). 8 Sections 24 and 30(1) of the Pre-Trial Diversion of Offenders Act 1985 (NSW). 9 Sections 10(a) and 14(1) of the Pre-Trial Diversion of Offenders Act 1985 (NSW). 10 Pre-Trial Diversion of Offenders Regulation 2005 (NSW). 11 Section 10(2) of the Subordinate Legislation Act 1989 (NSW). 12 Section 30 of the Interpretation Act 1987 (NSW). had committed additional sexual assaults against his daughter. Neither he nor she had previously referred to those additional sexual assaults. Like other persons being assessed to participate in the Program, CMB was encouraged by Program staff to make additional disclosures as a sign of a positive commitment to change and was encouraged to make them before entering into the Program so as to avoid later difficulties. That is what he did. Through meeting with Program staff, it became apparent to CMB that the only adequate way for him to show remorse was to disclose the additional sexual assaults to police. At his request, CMB was then interviewed again by police on 2 November 2012. He was cautioned at the beginning of that interview. He explained to police that he was making further disclosures as part of the assessment process for the Program. As a result of those further disclosures, he was on that day charged with nine further sexual offences committed against his daughter in 2005 and 2006. The DPP later reduced those charges to four counts of aggravated sexual assault and one count of aggravated indecent assault ("the second set of charges"). On 23 November 2012, CMB pleaded guilty to both sets of charges and was committed to the District Court for sentence. In the meantime, he had been assessed by the Director of the Program to be suitable to participate in the Program. The procedures for which the Pre-Trial Diversion of Offenders Act provided remained available to CMB in relation to the first set of charges. The repeal of the regulation on 1 September 2012 had the result, however, that those procedures were not available to him in relation to the second set of charges. Each count of aggravated sexual assault carried a maximum penalty of 20 years' imprisonment, with a standard non-parole period of 10 years13. Each count of aggravated indecent assault, and each count of attempted aggravated indecent assault, carried a maximum of seven years' imprisonment, with a standard non-parole period of five years14. The DPP's prosecution Both sets of charges were listed before Ellis DCJ for submissions on sentence on 31 January 2013. With respect to the first set of charges, CMB on that date gave an undertaking to participate in the Program for two years. 13 Section 61J of the Crimes Act 1900 (NSW) and s 54D of the Crimes (Sentencing Procedure) Act 1999 (NSW). 14 Sections 61M and 61P of the Crimes Act 1900 (NSW) and s 54D of the Crimes (Sentencing Procedure) Act 1999 (NSW). With respect to the second set of charges, counsel for CMB initially asked on 31 January 2013 that the sentencing proceedings be adjourned until after CMB's completion of the Program. The representative of the DPP initially agreed to that request. When his Honour indicated that if CMB "was going to get a sentence of imprisonment it ought to be now", the representative of the DPP responded by saying that, although the second set of charges called for a custodial sentence, "the Crown would have to say" that a custodial sentence "would be against the spirit of the [P]rogram". His Honour went on to raise the possibility of giving CMB a good behaviour bond conditional on his completion of the Program. Both representatives then expressed agreement with that suggestion. His Honour adjourned the sentencing hearing on the second set of charges to allow the views of CMB's daughter to be ascertained. When the hearing on sentencing on the second set of charges resumed on 4 April 2013, documents tendered included a report prepared by the Director of the Program, which showed that CMB was making satisfactory progress in the Program. Documents tendered also included a victim impact statement in which CMB's daughter explained that CMB's actions had left her "not ever wanting to be associated" with him and in which she said that "the leniency offered to the offender because of the familiar relationship" caused her to "doubt the effectiveness" of the legal system. The representatives of the DPP and CMB both nevertheless indicated that they were still in agreement that it would not be appropriate for CMB to be sentenced to imprisonment and that it would be appropriate for CMB to be given a good behaviour bond conditional on his completion of the Program. The representative of the DPP specifically reiterated that a custodial sentence would be "against the spirit of the [P]rogram". His Honour proceeded accordingly to sentence CMB to a two year good behaviour bond in respect of the offence of aggravated indecent assault and a three year good behaviour bond in respect of the four offences of aggravated sexual assault, each conditional on CMB completing the Program. His Honour's remarks on sentencing indicated that he mistakenly understood that the second set of charges would not have been laid had the regulation remained in force. The truth was that disclosures made under, or as part of the assessment process for, the Program gave rise to no immunity from prosecution. There was nothing to remove Program staff from the ordinary legal obligation to notify police of offences to which a person confessed. The truth was also that there was no guarantee that the DPP would have referred CMB for assessment in respect of the second set of charges. Whether or not they were conscious of the mistake at the time, neither the representative of the DPP nor the representative of CMB drew the mistake to his Honour's attention. His Honour went on to say that "the only fair and just outcome" in the circumstances was to produce, by means of good behaviour bonds, an outcome which would be "identical to that of all other offenders who have been honest and made admissions of other acts as part of their involvement in the β¦ Program". His Honour specifically referred to the victim impact statement and emphasised that, had it not been for the Program, CMB would "in the normal course of events" have received "a lengthy sentence of imprisonment". The Attorney General's appeal The DPP publicly announced on 17 July 2013 that he had decided not to appeal against the sentence pronounced by Ellis DCJ in light of the "unique history" of the matter "including the fact that the additional charges were only disclosed at the behest of Cedar Cottage staff". The Attorney General gave notice of his intention to appeal on 26 July 2013 and filed a notice of appeal on 6 August 2013. The Court of Criminal Appeal (Ward JA, Harrison and R A Hulme JJ) heard the Attorney General's appeal on 10 December 2013 and delivered its decision on 19 March 2014. It upheld a ground of the Attorney General's appeal framed in terms that Ellis DCJ erroneously took into account how CMB's disclosures of the additional sexual offences committed against his daughter in 2005 and 2006 would have been dealt with had the regulation not been repealed15. It also upheld grounds framed in terms that his Honour gave insufficient weight to the objective seriousness of the offences and that the sentences were manifestly inadequate16. Neither of those holdings is the subject of a ground of appeal to this Court. Turning to what it considered to be the proper sentence, the Court of Criminal Appeal emphasised the objective seriousness of the offences, which in its opinion made a sentence of full-time imprisonment appropriate even after subjective and procedural considerations were taken into account, including, most prominently, the circumstance that the facts underpinning the second set of charges only came to light as the result of CMB's disclosures made during the process of his assessment for the Program. Using language drawn from R v Ellis17 and from the effect of s 23(3) of the Crimes (Sentencing Procedure) Act 1999 (NSW), however, it emphasised that "the significant added element of leniency to which [CMB] is therefore entitled must not lead to a sentence that is unreasonably disproportionate to the nature and circumstances of the offences"18. It added the observation that CMB made those disclosures during the process of 15 R v CMB [2014] NSWCCA 5 at [82]-[84]. 16 R v CMB [2014] NSWCCA 5 at [87]-[89]. 17 (1986) 6 NSWLR 603 at 604. 18 R v CMB [2014] NSWCCA 5 at [93]. assessment for the Program only after the first set of charges were laid, as a result of the police investigation which followed his daughter's report to police, and in circumstances where participation in the Program would allow him to avoid being sentenced for the offences to which the first set of charges related. There was, it opined, a "considerable element of self-interest" in the disclosures, "which were not in those circumstances unambiguously altruistic or purely cathartic"19. In respect of the offence of aggravated indecent assault, the Court of Criminal Appeal considered that CMB should be sentenced to a term of nine months, with a non-parole period of six months. In respect of each of the four offences of aggravated sexual assault, it considered that CMB should be sentenced to a term of three years, with a non-parole period of two years. Allowing for some accumulation of some of the offences to reflect the fact that they concerned discrete incidents, it considered that CMB should be sentenced to an aggregate sentence of five years and six months with a non-parole period of three years20. That was the sentence it went on, in the orders which it made, to impose. Before doing so, however, the Court of Criminal Appeal turned at the end of its reasons for judgment to address what it had earlier described as its "residual discretion to decline to interfere with a sentence even though it is erroneously lenient"21. It noted that, while s 68A of the Crimes (Appeal and Review) Act 2001 (NSW) has the effect that presumed distress or anxiety occasioned by resentencing must be disregarded in the exercise of that discretion, evidence of actual distress or anxiety occasioned to a respondent to an appeal under s 5D of the Criminal Appeal Act must be taken into account22. In that respect, it placed weight on evidence adduced by CMB as to the anxiety and distress he felt since being notified of the Attorney General's decision to appeal and as to his progress in the Program to date, which would be cut short by imprisonment23. Although emphasising that the representative of the DPP had not engaged in conduct which "could be characterised as either inappropriate or unfair", it acknowledged that the representative of the DPP "was largely, if not predominantly, responsible for the way in which his Honour dealt with [CMB] in the first instance"24. It also 19 R v CMB [2014] NSWCCA 5 at [93]. 20 R v CMB [2014] NSWCCA 5 at [101]. 21 R v CMB [2014] NSWCCA 5 at [57]. 22 R v CMB [2014] NSWCCA 5 at [58], [103]. 23 R v CMB [2014] NSWCCA 5 at [94]-[95], [103]-[104], [109]. 24 R v CMB [2014] NSWCCA 5 at [106]-[107]. acknowledged that the repeal and non-replacement of the regulation meant that the circumstances which gave rise to CMB's disclosures were "unlikely ever to arise again" with the result that its decision would be "of no utility in guiding courts or practitioners with respect to the operation of the Pre-Trial Diversion of Offenders Act"25. The joint reasons for judgment of the Court of Criminal Appeal concluded26: "We are ultimately not satisfied that there is any basis upon which, or reason why, this Court should exercise its residual discretion not to intervene. We take the law to be that 'the onus lies upon the respondent to establish that that discretion ought to be exercised in his or her favour'. The respondent in this case has identified and analysed an impressive collection of factors pertinently informing the exercise of that discretion. The identified matters do not satisfy us, however, that his Honour's sentencing discretion did not wholly miscarry in a way that mandates correction in this Court. It is correspondingly wholly inappropriate in this case to exercise the available discretion not to intervene." The words endorsed as a statement of the applicable law were extracted from the earlier decision of the Court of Criminal Appeal in R v Smith27. This appeal The grant of special leave to appeal limits CMB's appeal to this Court to two grounds. The first goes to the Court of Criminal Appeal's approach to the discretion conferred by s 5D of the Criminal Appeal Act. It is that the Court of Criminal Appeal erred by imposing an "onus" on the respondent to such an appeal, and by failing to have regard to its "limiting purpose". The second ground goes to the Court of Criminal Appeal's formulation of the sentence which to it seemed proper. It is that the Court of Criminal Appeal erred in the way it applied R v Ellis and s 23(3) of the Crimes (Sentencing Procedure) Act to the disclosures CMB made during the process of his assessment for the Program. The reduction in sentence to which the Court of Criminal Appeal was prepared to treat CMB as entitled by reason of making the disclosures should have been greater. 25 R v CMB [2014] NSWCCA 5 at [108]. 26 R v CMB [2014] NSWCCA 5 at [110] (internal reference omitted). 27 [2007] NSWCCA 100 at [60]. As to the first of those grounds, the Attorney General confesses error to the extent that he argues that the discretion conferred by s 5D of the Criminal Appeal Act imports no onus one way or the other. But, the Attorney General says, the error was immaterial because imposition of a custodial sentence on CMB was inevitable. As to the second ground, the Attorney General argues that the limited reduction in sentence to which the Court of Criminal Appeal was prepared to treat CMB as entitled by reason of making the disclosures fell within the scope of the discretionary judgment committed to a sentencing court by s 23 of the Crimes (Sentencing Procedure) Act and involved no error of principle. Discretion Section 5D of the Criminal Appeal Act serves the dual function of conferring capacity on the Attorney General or the DPP to appeal against a sentence pronounced by a court of trial in proceedings to which the Crown in right of New South Wales was a party, and of conferring power on the Court of Criminal Appeal in such an appeal to impose a different sentence. That power is conferred by the concluding words of s 5D(1) in terms that "the Court of Criminal Appeal may in its discretion vary the sentence and impose such sentence as to the said court may seem proper". Descriptions of the discretion expressly so conferred on the Court of Criminal Appeal as "residual" ought not to be misunderstood. To enliven the discretion, it is incumbent on the appellant in an appeal under s 5D to demonstrate that the sentence pronounced by the court of trial turned on one or more specific errors of law or of fact, or, in the totality of the circumstances, was unreasonable or plainly unjust28. The discretion is residual only in the sense that its exercise does not fall to be considered unless that threshold is met. Once the discretion is enlivened, it remains incumbent on the appellant in an appeal under s 5D to demonstrate that the discretion should be exercised. Accordingly, as Heydon JA succinctly put it in R v Hernando29: "if [the Court of Criminal Appeal] is to accede to the Crown's desire that the respondent be sentenced more heavily, it must surmount two hurdles. The first is to locate an appellable error in the sentencing judge's discretionary decision. The second is to negate any reason why the 28 Markarian v The Queen (2005) 228 CLR 357 at 371 [28]; [2005] HCA 25; Carroll v The Queen (2009) 83 ALJR 579 at 581 [7]; 254 ALR 379 at 381; [2009] HCA 13, citing House v The King (1936) 55 CLR 499 at 504-505; [1936] HCA 40; Bugmy v The Queen (2013) 249 CLR 571 at 597 [51]; [2013] HCA 37. 29 (2002) 136 A Crim R 451 at 458 [12]. residual discretion of the Court of Criminal Appeal not to interfere should be exercised." The Court of Criminal Appeal, in this case and in R v Smith, was wrong to depart from that statement of the law. The second of the two hurdles to which Heydon JA referred in R v Hernando has a statutory foundation and a systemic significance. Before s 5D of the Criminal Appeal Act was amended to add reference to the DPP, Barwick CJ said in Griffiths v The Queen30: "On my view of the proper meaning of s 5D in the context of the Criminal Appeal Act, an appeal by the Attorney-General should be a rarity, brought only to establish some matter of principle and to afford an opportunity for the Court of Criminal Appeal to perform its proper function in this respect, namely, to lay down principles for the governance and guidance of courts having the duty of sentencing convicted persons." With the clarification that the reference to "matter of principle" by Barwick CJ "must be understood as encompassing what is necessary to avoid β¦ manifest inadequacy or inconsistency in sentencing standards"31, his Honour's explanation of the nature of an appeal under s 5D has since been said to represent "general and authoritative guidance to the Courts of Criminal Appeal of this country"32. It expresses the "limiting purpose" of an appeal under s 5D, and in so doing provides "a framework within which to assess the significance of factors relevant to the exercise of the discretion"33. Having found the sentence pronounced by Ellis DCJ to be manifestly inadequate, the critical error of the Court of Criminal Appeal in the present case was to treat the residual discretion thereby enlivened as a hurdle for CMB to surmount rather than as the second of the hurdles for the Attorney General to surmount. Contrary to the submission of the Attorney General in this Court, it cannot be concluded that the error was immaterial. 30 (1977) 137 CLR 293 at 310; [1977] HCA 44. 31 Everett v The Queen (1994) 181 CLR 295 at 300; [1994] HCA 49. See also Munda v Western Australia (2013) 249 CLR 600 at 623-624 [68]-[69]; [2013] HCA 38. 32 Malvaso v The Queen (1989) 168 CLR 227 at 234; [1989] HCA 58. 33 Green v The Queen (2011) 244 CLR 462 at 477 [36]; [2011] HCA 49. See also Malvaso v The Queen (1989) 168 CLR 227 at 234-235. Within the framework provided by the explanation of the nature of an appeal under s 5D of the Criminal Appeal Act given by Barwick CJ in Griffiths v The Queen, two considerations weighed strongly against interference with the sentence which had been pronounced by Ellis DCJ. One was that highlighted by the DPP in his publicly stated reasons for not appealing: that the peculiarity of the circumstances rendered the decisions of both the District Court and the Court of Criminal Appeal of no precedential value. The case, although one of manifest inadequacy of sentence, was therefore not one in respect of which it could be said that "to decline to intervene would have been to perpetuate a manifest injustice"34. The other important consideration was the role played by the DPP in bringing about the sentence pronounced by Ellis DCJ. The Attorney General and the DPP both having capacity to appeal under s 5D, no distinction can be drawn between them for the purpose of considering, on an appeal, the conduct of the prosecution before the court of trial. The Attorney General in the appeal to the Court of Criminal Appeal, and the DPP in the prosecution in the District Court, were each the representative of the Crown in right of New South Wales. The Crown (by whomever it is represented) has a duty to assist a sentencing court to avoid appealable error. That duty would be hollow were it not to remain rare that an "appellate court would intervene on an appeal against sentence to correct an alleged error by increasing the sentence if the Crown had not done what was reasonably required to assist the sentencing judge to avoid the error"35. This Court, it has repeatedly been said, is not a sentencing court36. The weight to be given to those, and other, considerations in the exercise of the residual discretion in the overall circumstances of this case is not for this Court to determine and was properly a matter for the Court of Criminal Appeal. For CMB's appeal to this Court to be allowed on the first ground, and for the Attorney General's appeal against the sentence pronounced by the District Court to be remitted to the Court of Criminal Appeal for reconsideration, it is unnecessary and inappropriate for this Court to go further than to reject the conclusion that the discretion could only reasonably have been exercised affirmatively to vary the sentence pronounced by Ellis DCJ and to impose the custodial sentence which the Court of Criminal Appeal considered proper. 34 Cf Munda v Western Australia (2013) 249 CLR 600 at 625 [76]. 35 R v Tait (1979) 24 ALR 473 at 477. 36 Johnson v The Queen (2004) 78 ALJR 616 at 626 [35]; 205 ALR 346 at 358; [2004] HCA 15; Markarian v The Queen (2005) 228 CLR 357 at 376 [44]; Bugmy v The Queen (2013) 249 CLR 571 at 596 [49]. Reduction for disclosure In R v Ellis, after stating that "[i]t is part of the policy of the criminal law to encourage a guilty person to come forward and disclose both the fact of an offence having been committed and confession of guilt of that offence", Street CJ said37: "The leniency that follows a confession of guilt in the form of a plea of guilty is a well recognised part of the body of principles that cover sentencing. Although less well recognised, because less frequently encountered, the disclosure of an otherwise unknown guilt of an offence merits a significant added element of leniency, the degree of which will vary according to the degree of likelihood of that guilt being discovered by the law enforcement authorities, as well as guilt being established against the person concerned." The policy of the criminal law to which Street CJ referred now finds statutory expression in the Crimes (Sentencing Procedure) Act, s 22 of which concerns confession of guilt, and s 23 of which encompasses the provision of assistance to law enforcement authorities including by disclosure of the commission of an offence. In each of those circumstances, by operation of ss 22(1) and 23(1) respectively, a sentencing court may impose a lesser penalty than it would otherwise impose. And in each of those circumstances, by operation of ss 22(1A) and 23(3) respectively, the lesser penalty imposed "must not be unreasonably disproportionate to the nature and circumstances of the offence". It has been held that whether or not a lesser penalty is "unreasonably" disproportionate to the nature and circumstances of the offence, within the meaning of s 23(3), turns on an evaluative judgment which itself takes into account the nature and extent of the assistance provided to law enforcement authorities38. There can be no doubt that the Court of Criminal Appeal framed its reasons for decision consistently with R v Ellis when it referred to "the significant added element of leniency to which [CMB] is therefore entitled"39. There can equally be no doubt that the Court of Criminal Appeal framed its reasons for decision consistently with s 23(3) of the Crimes (Sentencing Procedure) Act when it added the qualification that the significant added element of leniency 37 (1986) 6 NSWLR 603 at 604. 38 C (1994) 75 A Crim R 309 at 315. 39 R v CMB [2014] NSWCCA 5 at [93]. "must not lead to a sentence that is unreasonably disproportionate to the nature and circumstances of the offences"40. McHugh J pointed out in Ryan v The Queen41 that the statement in R v Ellis that "the disclosure of an otherwise unknown guilt of an offence merits a significant added element of leniency" "is not the statement of a rule to be quantitatively, rigidly or mechanically applied": "It is an indication that, in determining the appropriate sentence, the disclosure of what was an unknown offence is a significant and not an insubstantial matter to be considered on the credit side of the sentencing process. How significant depends on the facts and circumstances of the case." The extent to which it was appropriate to reduce the sentence otherwise proper to impose on CMB, having regard to the circumstance that the facts underpinning the second set of charges only came to light as the result of his disclosures made during the process of his assessment for the Program, is a topic on which reasonable minds might differ. Neither the emphasis given by the Court of Criminal Appeal to the disclosure having been to the benefit of CMB (given the pendency of the first set of charges), nor that given to the objective seriousness of the offences, is indicative of any error of principle. The second ground of the appeal is not made out. Orders The following orders are to be made: (1) Appeal allowed. Set aside the orders made by the Court of Criminal Appeal on 19 March 2014. Remit the Attorney General's appeal to the Court of Criminal Appeal. 40 R v CMB [2014] NSWCCA 5 at [93]. 41 (2001) 206 CLR 267 at 272-273 [15]; [2001] HCA 21. Bell KIEFEL, BELL AND KEANE JJ. Introduction The facts, the scheme of the Pre-Trial Diversion of Offenders Act 1985 (NSW) ("the Diversion Act") and the procedural history are set out in the reasons of French CJ and For the reasons to be given, we would uphold each of CMB's grounds of appeal. Before turning to those grounds, it is convenient to note some further aspects of the procedural history. As the result of the enactment of the Director of Public Prosecutions Act 1986 (NSW) and cognate legislation42, the Attorney General for the State of New South Wales and the Director of Public Prosecutions ("the DPP") are each authorised to institute and conduct prosecutions on indictment on behalf of the Crown in right of New South Wales. The Attorney General and the DPP acting on behalf of the Crown may each appeal to the Court of Criminal Appeal against any sentence pronounced by the court of trial arising out of such a prosecution. The primacy of the Attorney General as first Law Officer of New South Wales is reflected in statutory provision for the Attorney General to furnish guidelines to the DPP, including with respect to the circumstances in which the Director is to institute and carry on prosecutions for offences43, save that a guideline may not be furnished with respect to a particular case44. No issue as to the regularity of the Attorney General's appeal against the sentences imposed on CMB following a prosecution instituted and conducted by the DPP is presented. The Attorney General's appeal to the Court of Criminal Appeal of the Supreme Court of New South Wales (Ward JA, Harrison and R A Hulme JJ) was on two grounds. The second ground charged manifest inadequacy of sentence. The first ground contended that the sentencing judge's discretion (Ellis DCJ) was vitiated by legal error in three respects. The Court of Criminal Appeal rejected the second of the asserted errors45 and, correctly, identified the third asserted error as a particular of the second ground46. The Court of Criminal Appeal found 42 Criminal Appeal (Amendment) Act 1986 (NSW); Crown Prosecutors Act 1986 (NSW); District Court (Amendment) Act 1986 (NSW); Miscellaneous Acts (Public Prosecutions) Amendment Act 1986 (NSW). 43 Director of Public Prosecutions Act 1986 (NSW), s 26(1)-(2). 44 Director of Public Prosecutions Act 1986 (NSW), s 26(3). 45 R v CMB [2014] NSWCCA 5 at [85]. 46 R v CMB [2014] NSWCCA 5 at [87]. Bell that Ellis DCJ erred in the first respect particularised47. This was the complaint that Ellis DCJ took into account an erroneous consideration, namely, how CMB's disclosure of the offences would have been dealt with when the Pre-Trial Diversion of Offenders Regulation 2005 ("the Regulation") had effect. In the way the ground was developed, the complaint was both that it was an error to structure sentences in an endeavour to reproduce the effect of the Regulation48 and that Ellis DCJ had proceeded upon a mistaken understanding of the effect of the Regulation in any event49. Ellis DCJ sentenced CMB upon the understanding that the Regulation contained a provision which allowed a participant in the Pre-Trial Diversion of Offenders Program50 ("the Program") to make "full disclosure" of further child sexual assault offences and continue in the Program "without further charges or the matter being relayed back to the court"51. The Regulation made no such provision. The Court of Criminal Appeal found that Ellis DCJ's misapprehension was due to the prosecutor's failure to address him on the correct state of the law52. At the hearing before Ellis DCJ on 31 January 2013, the prosecutor stated that she did not object to the second set of charges being adjourned from time to time to permit CMB to complete the Program. She submitted that, in light of the serious nature of the charges, it would be "unfair" and "against the spirit of the program" to proceed immediately to sentence. The prosecutor stated that as CMB had disclosed the offences as part of the Program, had the Regulation not "lapse[d]", the offences would have been incorporated into the Program. The Regulation made provision respecting the referral and assessment of persons to whom the Diversion Act applied53. It is common ground that from 1 September 2012, on which date the Regulation was repealed, no further 47 R v CMB [2014] NSWCCA 5 at [84]. 48 R v CMB [2014] NSWCCA 5 at [29]. 49 R v CMB [2014] NSWCCA 5 at [31]. 50 Diversion Act, s 30A. 51 R v CMB [2014] NSWCCA 5 at [31]. 52 R v CMB [2014] NSWCCA 5 at [83]. 53 Diversion Act, s 3A: "This Act applies to a person who is charged with a child sexual assault offence committed with or upon the person's child or the child of the person's spouse or de facto partner." Bell referrals for assessment of suitability for the Program could be made. The prosecutor's statements at the hearing on 31 January 2013 may be thought to have fairly described the practical operation of the scheme up to 1 September 2012. The former Director of the Program stated in an affidavit that was before the Court of Criminal Appeal that, prior to the repeal of the Regulation, a person in CMB's position could apply to have offences disclosed during the assessment dealt with under the Diversion Act, provided the disclosure was made before the person gave the undertaking to the court, and provided the DPP and the Director of the Program agreed to that course. At the resumed hearing on 4 April 2013, Ellis DCJ asked the prosecutor if a regulation had provided for further offences disclosed during the assessment to be dealt with as "part and parcel of what had brought [the offender] before Cedar Cottage in the first place". The prosecutor confirmed that the Regulation made such provision and said that the disclosure of further offences would not necessarily have generated fresh charges. In each of these respects, the prosecutor's statement was wrong. However, the prosecutor's support for the sentencing order that Ellis DCJ proposed was not based upon a wrong understanding of the Regulation. The prosecutor supported non-custodial sentences because the offences which CMB disclosed were offences that the victim did not recall and CMB made the disclosures because he was required to take responsibility for his conduct and "come clean" as part of his assessment for the Program. The position taken by the prosecution before Ellis DCJ was that CMB's voluntary disclosure of his guilt of offences that would otherwise have been undetected permitted the imposition of non-custodial sentences. Ground One β The exercise of the residual discretion The first ground of appeal in this Court asserts that the Court of Criminal Appeal erred by placing an onus on CMB to demonstrate that the prosecution appeal should be dismissed and by its failure to take into account the "limiting purpose" of prosecution appeals. The law reposes a wide discretion in the sentencing judge as to the determination of the appropriate sentence for the offender and the offence54. 54 Lowndes v The Queen (1999) 195 CLR 665 at 671-672 [15]; [1999] HCA 29; Wong v The Queen (2001) 207 CLR 584 at 612 [77] per Gaudron, Gummow and Hayne JJ; [2001] HCA 64; Markarian v The Queen (2005) 228 CLR 357 at 371 [27] per Gleeson CJ, Gummow, Hayne and Callinan JJ; [2005] HCA 25; Elias v The Queen (2013) 248 CLR 483 at 494-495 [27]; [2013] HCA 31. Bell Appeals against sentence, whether by the offender or the prosecution, require demonstration of error in one or more of the respects identified in House v The King55. Where error of that kind is established in an appeal by the offender, it is the duty of the Court of Criminal Appeal to exercise the sentencing discretion afresh56. Where error of that kind is established in an appeal by the prosecution, the Court of Criminal Appeal may in its discretion dismiss the appeal notwithstanding that the sentence is erroneously lenient57. This is sometimes described as "the residual discretion". As French CJ and Gageler J explain58, the discretion is residual only in that its exercise does not fall to be considered unless House error is established. The joint reasons in Green v The Queen explain the difference in appellate approach to offender and prosecution appeals by reference to the purpose that each serves: offender appeals being concerned with the correction of error in the particular case and prosecution appeals being concerned with laying down principles for the guidance of sentencing courts59. This is the "limiting purpose" which CMB invokes in his first ground. 55 (1936) 55 CLR 499 at 505 per Dixon, Evatt and McTiernan JJ; [1936] HCA 40. 56 Kentwell v The Queen (2014) 88 ALJR 947 at 957-958 [42]-[43] per French CJ, Hayne, Bell and Keane JJ; 313 ALR 451 at 462; [2014] HCA 37. 57 Section 5D(1) of the Criminal Appeal Act 1912 (NSW) provides: "The Attorney-General or the Director of Public Prosecutions may appeal to the Court of Criminal Appeal against any sentence pronounced by the court of trial in any proceedings to which the Crown was a party and the Court of Criminal Appeal may in its discretion vary the sentence and impose such sentence as to the said court may seem proper." (emphasis added) 58 At [33] above. 59 Green v The Queen (2011) 244 CLR 462 at 465-466 [1] per French CJ, Crennan and Kiefel JJ; [2011] HCA 49, citing Griffiths v The Queen (1977) 137 CLR 293 at 310 per Barwick CJ; [1977] HCA 44 and Everett v The Queen (1994) 181 CLR 295 at 300 per Brennan, Deane, Dawson and Gaudron JJ; [1994] HCA 49, noting the discussion in Lacey v Attorney-General (Qld) (2011) 242 CLR 573 at 578-584 [8]-[20] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ; [2011] HCA 10 and also noting R v Borkowski (2009) 195 A Crim R 1 at 18 [70]. Bell In R v Hernando, Heydon JA summarised the Court of Criminal Appeal's approach to the disposition of prosecution appeals against sentence60: "[I]f this Court is to accede to the Crown's desire that the respondent be sentenced more heavily, it must surmount two hurdles. The first is to locate an appellable error in the sentencing judge's discretionary decision. The second is to negate any reason why the residual discretion of the Court of Criminal Appeal not to interfere should be exercised." The second hurdle that his Honour identified reflected the statement in Malvaso v The Queen by Deane and McHugh JJ61, which was adopted in the joint reasons in Everett v The Queen62: "[T]he court entrusted with the jurisdiction to grant or refuse such leave should give careful and distinct consideration to the question whether the Attorney-General has discharged the onus of persuading it that the circumstances are such as to bring the particular case within the rare category in which a grant of leave to the Attorney-General to appeal against sentence is justified." The Court of Criminal Appeal noted that Heydon JA's analysis in Hernando has been cited with approval and applied in a number of cases63. Their Honours also noted the different approach taken in R v Smith, in which it was said that the respondent bears the onus of demonstrating reasons justifying the dismissal of a prosecution appeal in the exercise of discretion64. The Court of Criminal Appeal resolved the apparent conflict in its earlier decisions, stating: "We take the law to be that 'the onus lies upon [CMB] to establish that [the 60 (2002) 136 A Crim R 451 at 458 [12] (Levine J agreeing at 464 [31], Carruthers AJ agreeing at 464 [32]). 61 (1989) 168 CLR 227 at 234-235; [1989] HCA 58. 62 (1994) 181 CLR 295 at 299-300 per Brennan, Deane, Dawson and Gaudron JJ. 63 R v CMB [2014] NSWCCA 5 at [81], citing R v Nguyen [2004] NSWCCA 155 at [39] and R v Assaad [2009] NSWCCA 182 at [46] per McCallum J (McClellan CJ at CL agreeing at [1], Hidden J agreeing at [6]). 64 [2007] NSWCCA 100 at [60] per Simpson J (Howie J agreeing at [70], Hislop J agreeing at [71]). Bell residual discretion] ought to be exercised in his β¦ favour', as indicated by Simpson J in R v Smith at [60]."65 It is to be observed that the residual discretion was not prominent to the argument in Smith. None of the factors that commonly engage it were present and the Court was not referred to Hernando. The Attorney General does not support the Court of Criminal Appeal's statement of the onus. In the Attorney General's submission, the exercise of the residual discretion, much like the sentencing discretion, requires that the court weigh all relevant considerations on the strength of the material that the parties place before it. The introduction of an onus of persuasion on this analysis is misplaced. In the Attorney General's submission, the statement of the onus here did not affect the Court of Criminal Appeal's orders: the Court took into account all of the considerations that were capable of engaging the residual discretion and correctly concluded that none justified dismissal of the appeal. In an alternative submission, the Attorney General argues that if it is right to allocate an onus with respect to the dismissal of a prosecution appeal in the exercise of discretion, it is right to allocate the onus to the respondent to the appeal. In this branch of his argument, the Attorney General submits that Hernando is wrongly decided and that the statements in Malvaso and Everett have no application to the disposition of prosecution appeals in New South Wales: Malvaso and Everett were appeals from jurisdictions that impose a leave requirement on prosecution appeals against sentence. By contrast, under s 5D of the Criminal Appeal Act 1912 (NSW) the Attorney General appeals by right. A second matter that is relied upon to distinguish Malvaso and Everett is s 68A of the Crimes (Appeal and Review) Act 2001 (NSW). Section 68A prevents the Court of Criminal Appeal from dismissing a prosecution appeal against sentence because of any element of double jeopardy involved in re-sentencing the offender. The Attorney General observes that the onus spoken of in Malvaso and Everett is to persuade the appellate court of circumstances bringing the application within the "rare category" in which a grant of leave is justified. The Attorney General, drawing on the analysis in R v JW66, submits that s 68A has done away with appellate consideration of the assumed rarity of prosecution appeals. 65 R v CMB [2014] NSWCCA 5 at [110]. 66 (2010) 77 NSWLR 7 at 30 [121]-[129] per Spigelman CJ (Allsop P agreeing at 41 [205], McClellan CJ at CL, Howie and Johnson JJ agreeing at 41 [206]). Bell Everett affirmed Barwick CJ's statement of the principle of appellate restraint in Griffiths v The Queen67. The latter was an appeal from a decision of the Court of Criminal Appeal of New South Wales in an appeal under s 5D. The statements in Malvaso and Everett have been accepted as applying with equal force in those jurisdictions that do not impose a leave requirement on prosecution appeals68. In Everett, the factor militating against the grant of leave was the failure of prosecuting counsel to submit that the sentence proposed by the sentencing judge was erroneously lenient69. The joint reasons in Everett70 approved King CJ's statement of principle in R v Wilton71. That statement was made in the appeal after leave had been granted72. Relevantly, King CJ said73: "[T]his Court should allow the prosecution to put to it, on an appeal against sentence, contentions which were not put to the sentencing Judge, only in exceptional circumstances which appear to justify that course. ... In particular where a submission is made by counsel for a convicted person that a sentence should be suspended or a possible suspension is mentioned by the judge, and this course is regarded by the prosecution as beyond the proper scope of the judge's discretion, a submission to that effect should be made. Generally speaking, if the submission is not made 67 Everett v The Queen (1994) 181 CLR 295 at 300 per Brennan, Deane, Dawson and Gaudron JJ, citing (1977) 137 CLR 293 at 310 and, to the same effect, 327 per Jacobs J (Stephen J agreeing at 312), 329-330 per Murphy J. 68 Allpass (1993) 72 A Crim R 561 at 562-563; R v Wall (2002) 71 NSWLR 692 at 707 [70] per Wood CJ at CL (Meagher JA agreeing at 694 [1], Bell J agreeing at 713 [93]); R v JW (2010) 77 NSWLR 7 at 27 [105]-[107] per Spigelman CJ (Allsop P agreeing at 41 [205], McClellan CJ at CL, Howie and Johnson JJ agreeing at 41 [206]); Director of Public Prosecutions v Karazisis (2010) 31 VR 69 (1994) 181 CLR 295 at 300 per Brennan, Deane, Dawson and Gaudron JJ. 70 (1994) 181 CLR 295 at 302 per Brennan, Deane, Dawson and Gaudron JJ. 71 (1981) 28 SASR 362 at 367-368 (Mitchell J agreeing at 369, Williams J agreeing at 72 Everett v The Queen (1994) 181 CLR 295 at 303 per Brennan, Deane, Dawson and 73 R v Wilton (1981) 28 SASR 362 at 368 (Mitchell J agreeing at 369, Williams J agreeing at 369). Bell to the sentencing judge the prosecution should not be able to advance that contention successfully on an appeal by the Attorney-General." The determination of the appropriate sentence is one that rests solely with the court74. The public interest in the sentencing of offenders does not permit the parties to bind the court by their agreement. Nonetheless, the prosecutor is under a duty to assist the court to avoid appealable error75. Where the sentencing judge indicates the form of proposed sentencing order and the prosecutor considers that such a penalty would be manifestly inadequate, the prosecutor discharges his or her duty to the court by so submitting. The failure to do so is a material consideration in the exercise by the Court of Criminal Appeal of the residual discretion. The weight of that consideration will depend upon all of the circumstances. A prosecution concession that a non-custodial sentence is an available disposition is a powerful consideration weighing against intervening to impose a sentence of imprisonment on appeal76. Among the reasons for restraint in allowing a prosecution appeal on a ground not taken below is the risk of prejudice to the respondent to the appeal, whose case might have been conducted differently had the prosecution's stance been known77. The sentencing judge's reasons for sentence will commonly reflect the issues that were live at the sentence hearing. Where, as here, there is no issue as to the appropriate sentencing order, the judge's reasons are likely to 74 GAS v The Queen (2004) 217 CLR 198 at 211 [30]; [2004] HCA 22; Barbaro v The Queen (2014) 88 ALJR 372 at 380 [47] per French CJ, Hayne, Kiefel and Bell JJ; 305 ALR 323 at 333; [2014] HCA 2. 75 R v Tait (1979) 24 ALR 473 at 477; Everett v The Queen (1994) 181 CLR 295 at 302-303 per Brennan, Deane, Dawson and Gaudron JJ, citing R v Wilton (1981) 28 SASR 362 at 363-364 per King CJ (Mitchell J agreeing at 369, Williams J agreeing 76 R v Wilton (1981) 28 SASR 362 at 367-368 per King CJ (Mitchell J agreeing at 369, Williams J agreeing at 369); R v Jermyn (1985) 2 NSWLR 194 at 197-198 per Street CJ (Lusher J agreeing at 205), 204 per McHugh JA; Allpass (1993) 72 A Crim R 561 at 565; R v Chad unreported, New South Wales Court of Criminal Appeal, 13 May 1997 at 12 per Hunt CJ at CL (Gleeson CJ agreeing at 14, Sully J agreeing at 14). See also R v Lay [2006] NSWCCA 45 at [32] per Buddin J (James J agreeing at [1], Hall J agreeing at [41]); R v Clifford [2008] NSWCCA 190 at [97] per Price J (Allsop P agreeing at [1], James J agreeing at [2]). 77 See Rahme (1991) 53 A Crim R 8 at 17 per Kirby P (Lee CJ at CL agreeing at 19, Smart J agreeing at 19). Bell be stated with more economy than if the judge is called upon to give reasons for the imposition of a sentence which the prosecutor contends is impermissibly lenient. These are considerations that inhere in adversarial proceedings and are unconnected to any assumption respecting the rarity of prosecution appeals. The purpose of prosecution appeals may explain why they have been characterised as "exceptional"78. The appeal does not provide the occasion for consideration of the correctness of the analysis of the operation of s 68A in R v JW. Heydon JA's statement in Hernando of the twin hurdles that must be surmounted before the Court of Criminal Appeal proceeds to impose a heavier sentence on the respondent to a prosecution appeal accords with authority and the statutory text. The statement to the contrary in Smith is erroneous. The Court of Criminal Appeal was wrong to impose an onus on CMB to establish that the residual discretion should be exercised in his favour. We turn now to the Attorney General's submission that the error did not affect the Court of Criminal Appeal's orders. When it came to consider whether it should dismiss the appeal in the exercise of discretion, the Court of Criminal Appeal confined its consideration of the way the prosecution case was conducted before Ellis DCJ to the prosecutor's erroneous statement of the effect of the Regulation. The Court said that the prosecutor's conduct was neither inappropriate nor unfair79. It went on to take into account the failure of CMB's legal representative to complain about the prosecutor's errors at the time and concluded that CMB's "latter day dissatisfaction with what occurred" was as much the result of his representative's "arguably opportunistic, if understandable, failure to correct the error as it is the result of the error itself"80. It is not apparent that these considerations bore relevantly on whether the non-custodial sentences that were supported by the prosecution before Ellis DCJ should have been set aside at the instance of the prosecution on appeal. The materiality of this latter consideration is captured by McHugh JA in R v Jermyn81: 78 Everett v The Queen (1994) 181 CLR 295 at 299 per Brennan, Deane, Dawson and Gaudron JJ, 306 per McHugh J. 79 R v CMB [2014] NSWCCA 5 at [107]. 80 R v CMB [2014] NSWCCA 5 at [107]. 81 (1985) 2 NSWLR 194 at 204. Bell "Only in the rarest of cases, if at all, would a private litigant be allowed to appeal against the exercise of a discretionary judgment in respect of a ground which he had expressly conceded was open in the court below. No doubt the public interest in having proper sentences imposed upon offenders makes the case of the private appeal an imperfect analogy. But when the Attorney-General on behalf of the Crown asks the court to set aside a sentence on a ground which was conceded in the court below, I think that this Court in the exercise of its undoubted discretion should be slow to interfere." The Court of Criminal Appeal had regard to a number of factors bearing on the exercise of its residual discretion. These included: that, as the Program has been dismantled, the determination of the appeal would not provide guidance to courts or practitioners in the future; that the "significant aspect of [the] case", CMB's disclosure of offences in the course of complying with the entry requirements for the Program, is unlikely to ever arise again82; and CMB's accepted "rehabilitative achievements"83. The Court concluded that it was "ultimately not satisfied that there is any basis upon which, or reason why, [it] should exercise its residual discretion not to intervene"84. It is not possible to conclude that, had the Court of Criminal Appeal applied the correct test and considered whether the Attorney General had negated any reason why it should decline to intervene, it would have arrived at the same decision. Ground Two β CMB's disclosure of otherwise unknown guilt CMB's second ground of appeal contends that the Court of Criminal Appeal misapplied s 23 of the Crimes (Sentencing Procedure) Act 1999 (NSW) ("the Sentencing Act") and the related sentencing principle stated in R v Ellis85. CMB submits that these errors infected the Court of Criminal Appeal's conclusion that the sentences imposed by Ellis DCJ were manifestly inadequate. Section 23 of the Sentencing Act allows the court to impose a lesser penalty than it would otherwise impose taking into account the degree to which the offender has assisted (or undertaken to assist) law enforcement authorities in 82 R v CMB [2014] NSWCCA 5 at [108]. 83 R v CMB [2014] NSWCCA 5 at [109]. 84 R v CMB [2014] NSWCCA 5 at [110]. 85 (1986) 6 NSWLR 603 at 604 per Street CJ (Hunt J agreeing at 606, Allen J agreeing at 606). Bell the prevention, detection or investigation of the offence (or any other offence). Section 23(3) provides that a lesser penalty imposed under the section must not be "unreasonably disproportionate to the nature and circumstances of the offence". The principle stated in Ellis concerns the significant leniency that may be extended to an offender upon a plea of guilty which results from the offender's voluntary disclosure of otherwise unknown guilt. A disclosure of that kind involves assistance to law enforcement authorities in the detection and investigation of the offence and is subject to the stricture of s 23(3). Ellis DCJ's discretion was to be exercised taking into account s 23 and other provisions of the Sentencing Act, including ss 3, 5, 21, 21A and 22, together with any other matter permitted or required to be taken into account by any rule of law86. It was open to Ellis DCJ to impose lesser penalties than would otherwise have been imposed to take into account CMB's assistance to the authorities by his disclosure of his otherwise unknown guilt of the offences. CMB contends that the Court of Criminal Appeal failed to have regard to the leniency that s 23(1) allowed in its determination that the sentences were manifestly inadequate. The Attorney General submits that CMB's challenge misreads the Court of Criminal Appeal's reasons, which, correctly understood, reveal that the complaint is with the weight that the Court of Criminal Appeal allowed on this account. The Court of Criminal Appeal commenced consideration of whether the sentences were manifestly inadequate (ground two in that Court) by setting out the particulars of each offence and the features which demonstrated their objective seriousness: they were not isolated in number; extended over two years; involved "multifaceted" acts; breached the trust between parent and child; and had occasioned substantial emotional harm to CMB's daughter, who was unwilling to engage in the Program87. The Court moved immediately to its "Subject to consideration of whether or not the residual discretion not to intervene should be exercised in this case, we consider that the sentences imposed by his Honour were erroneously lenient and manifestly inadequate. No sentence other than a period of full-time imprisonment is 86 Sentencing Act, s 21A(1). 87 R v CMB [2014] NSWCCA 5 at [88]. 88 R v CMB [2014] NSWCCA 5 at [89]. Bell appropriate. That is so in our opinion even after the subjective and procedural considerations are taken into account. These are considered and evaluated below." The Attorney General relies on the last two sentences in the passage above and contends that the conclusion of manifest inadequacy was arrived at after the Court of Criminal Appeal took into account "the subjective and procedural considerations", which consideration included the leniency permitted under s 23. It is apparent that the Court of Criminal Appeal addressed s 23 in the course of determining the "proper sentence" following its determination of manifest inadequacy. The discussion follows analysis of the reports of Dr Hourigan and Dr Jungfer, which were tendered without objection by the prosecution for the purpose of re-sentencing89. In the exercise of its discretion in re-sentencing, the Court of Criminal Appeal acknowledged that the offences had only come to light as the result of admissions made by CMB and that his entry to the Program had been conditioned upon "full disclosure of all previous offending conduct"90. In an evident reference to the Ellis principle and s 23(3), the Court said that the "significant added element of leniency" to which CMB was entitled must not lead to a sentence that is unreasonably disproportionate to the nature and circumstances of the offence91. The Court of Criminal Appeal determined the extent of the leniency that s 23(1) allowed upon its factual findings, which departed in material respects from those made by Ellis DCJ. The Court of Criminal Appeal found that CMB's disclosures were "clearly prompted by the looming prospect of imprisonment in relation to the first set of charges"92. In the circumstances, CMB's admissions embodied "a considerable element of self-interest", were not "unambiguously altruistic or purely cathartic" and had not been "unconditionally volunteered"93. CMB's disclosures were of offences of a similar character and seriousness to the offences that were the subject of the daughter's complaint and they had been committed over the same period as the offences to which the Diversion Act applied. The objective seriousness of the offences and the fact they extended 89 R v CMB [2014] NSWCCA 5 at [92]. 90 R v CMB [2014] NSWCCA 5 at [93]. 91 R v CMB [2014] NSWCCA 5 at [93]. 92 R v CMB [2014] NSWCCA 5 at [93]. 93 R v CMB [2014] NSWCCA 5 at [93]. Bell that the non-custodial penalties over a lengthy interval and involved a gross breach of trust support the conclusion imposed by Ellis DCJ are disproportionate. However, it was open to Ellis DCJ to impose penalties that were disproportionate to the nature and circumstances of the offences in light of his finding that without CMB's honest compliance with the Program the offences would have remained undetected. The mandate of s 23(3) is that a lesser penalty imposed to take account of the offender's assistance the authorities must not be unreasonably disproportionate to the nature and circumstances of the offence. The term "unreasonably" in this context has been given a wide operation94. Whether a sentence is unreasonably disproportionate necessarily is a judgment about which reasonable minds may differ. In determining whether the sentences imposed by Ellis DCJ were manifestly inadequate, the issue for the Court of Criminal Appeal it regarded non-custodial sentences as unreasonably was not whether disproportionate to the nature and circumstances of the offences but whether, in the exercise of the discretion that the law reposed in Ellis DCJ, it was open to his Honour upon his unchallenged findings95 to determine that they were not. Conclusion and orders Each of CMB's grounds succeeds. The appeal must be allowed and the orders of the Court of Criminal Appeal set aside. The Attorney General submits that in this event his appeal should be remitted to the Court of Criminal Appeal for it to be determined according to law. That submission should be accepted and the orders proposed by French CJ and Gageler J made. 94 See C (1994) 75 A Crim R 309 at 315 per Mahoney JA (Newman J agreeing at 317, James J agreeing at 317), referring to s 442B of the Crimes Act 1900 (NSW), the predecessor to s 23(3), which was relevantly in the same terms. 95 Carroll v The Queen (2009) 83 ALJR 579 at 584 [24]; 254 ALR 379 at 385; [2009] HCA 13. |
HIGH COURT OF AUSTRALIA DEPUTY COMMISSIONER OF TAXATION APPELLANT AND RESPONDENT Deputy Commissioner of Taxation v Shi [2021] HCA 22 Date of Hearing: 14 April 2021 Date of Judgment: 4 August 2021 ORDER Appeal allowed with costs. Set aside the orders made by the Full Court of the Federal Court of Australia on 4 June 2020, and, in their place, order that: the appeal be allowed; order 2 of the orders made by the Federal Court of Australia on 24 July 2019 be set aside; subject to orders (d) and (e) below, the privilege affidavit delivered by Mr Shi pursuant to s 128A(2) of the Evidence Act 1995 (Cth) ("the Privilege Affidavit") be filed and served on the Deputy Commissioner of Taxation; order (c) be stayed pending the hearing and determination by a single judge of the Federal Court of Australia, pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth), whether suppression or non-publication orders should be made in relation to the Privilege Affidavit; there be a hearing before a single judge of the Federal Court of Australia on a date to be fixed in respect of whether suppression or non-publication orders should be made in relation to the Privilege Affidavit pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth); the Court grant a certificate pursuant to s 128A(7) of the Evidence Act 1995 (Cth) in respect of the Privilege Affidavit; and (g) Mr Shi pay the Deputy Commissioner of Taxation's costs of the appeal. On appeal from the Federal Court of Australia Representation S T White SC with T R Epstein for the appellant (instructed by Australian Government Solicitor) T A Game SC with K J Edwards and W R Johnson for the respondent (instructed by Uther Webster & Evans) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Deputy Commissioner of Taxation v Shi Evidence β Privilege against self-incrimination β Where appellant obtained ex parte orders freezing worldwide assets of respondent β Where disclosure orders made in connection with freezing orders required disclosure of worldwide assets β Where respondent objected to disclosure of certain information on basis that it may tend to self-incriminate β Where respondent prepared privilege affidavit under s 128A(2) of Evidence Act 1995 (Cth) β Whether information in privilege affidavit could be disclosed to parties under s 128A(6) β Whether interests of justice required disclosure of information in privilege affidavit. Words and phrases β "certificate", "commission of a foreign offence", "disclosure order", "freezing order", "interests of justice", "may tend to prove", "onus of proof", "privilege affidavit", "privilege against self-incrimination", "reasonable grounds for an objection". Evidence Act 1995 (Cth), ss 128, 128A. Federal Court Rules 2011 (Cth), rr 7.32, 7.33. KIEFEL CJ, GAGELER AND GLEESON JJ. The Deputy Commissioner of Taxation appeals by special leave from a decision of the Full Court of the Federal Court1 dismissing by majority (Lee and Stewart JJ, Davies J dissenting) an appeal by leave from a decision of a primary judge of the Federal Court2 (Steward J) refusing to make an order under s 128A(6) of the Evidence Act 1995 (Cth) that a privilege affidavit be filed and served on the Deputy Commissioner. The privilege affidavit was prepared by Mr Shi in support of an objection to compliance with a disclosure order made by another judge of the Federal Court3 (Yates J) under r 7.33 of the Federal Court Rules 2011 (Cth) ancillary to a freezing order under r 7.32 of the Federal Court Rules in a civil proceeding brought by the Deputy Commissioner against Mr Shi for the recovery of tax. Section 128A of the Evidence Act relevantly provides: If a relevant person [being a person to whom a disclosure order is directed] objects to complying with a disclosure order on the grounds that some or all of the information required to be disclosed may tend to prove that the person: has committed an offence against or arising under an Australian law or a law of a foreign country; or is liable to a civil penalty; the person must: disclose so much of the information required to be disclosed to which no objection is taken; and prepare an affidavit containing so much of the information required to be disclosed to which objection is taken (the privilege affidavit) and deliver it to the court in a sealed envelope; and file and serve on each other party a separate affidavit setting out the basis of the objection. 1 Deputy Commissioner of Taxation v Shi (2020) 277 FCR 1. 2 Deputy Commissioner of Taxation v Shi [No 3] [2019] FCA 945. 3 Deputy Commissioner of Taxation v Shi [2018] FCA 1915. Gleeson The court must determine whether or not there are reasonable grounds for the objection. Subject to subsection (6), if the court finds that there are reasonable grounds for the objection, the court must not require the information contained in the privilege affidavit to be disclosed and must return it to the relevant person. If the court is satisfied that: any information disclosed in the privilege affidavit may tend to prove that the relevant person has committed an offence against or arising under, or is liable to a civil penalty under, an Australian law; and the information does not tend to prove that the relevant person has committed an offence against or arising under, or is liable to a civil penalty under, a law of a foreign country; and the interests of justice require the information to be disclosed; the court may make an order requiring the whole or any part of the privilege affidavit containing information of the kind referred to in paragraph (a) to be filed and served on the parties. If the whole or any part of the privilege affidavit is disclosed (including by order under subsection (6)), the court must cause the relevant person to be given a certificate in respect of the information as referred to in paragraph (6)(a). In any proceeding in an Australian court: evidence of information disclosed by a relevant person in respect of which a certificate has been given under this section; and evidence of any information, document or thing obtained as a direct result or indirect consequence of the relevant person having disclosed that information; cannot be used against the person. However, this does not apply to a criminal proceeding in respect of the falsity of the evidence concerned." Gleeson There is, and was before the Full Court, no dispute that making or refusing to make an order under s 128A(6) is a discretionary decision in respect of which the applicable standard of appellate review is that identified in House v The King4. Within the context of s 128A as a whole, s 128A(5) makes clear that the discretion to make or refuse to make an order under s 128A(6) arises for consideration by a court only where the person to whom a disclosure order is directed has taken an objection to disclosure of information under s 128A(2) and only where the court has found under s 128A(4) that there are reasonable grounds for the objection that has been taken. Section 128A(6) in that context operates to permit the court to make an order requiring information that the court is satisfied under s 128A(6)(a) may tend to prove that the person has committed an offence against Australian law to be filed and served on the parties only if the court is also satisfied that both of the propositions in s 128A(6)(b) and (c) apply to that information. Whether it is open to the court to be satisfied of the negative proposition in s 128A(6)(b) β that the information in the privilege affidavit does not tend to prove that the person has committed an offence against or arising under, or is liable to a civil penalty under, a law of a foreign country β turns on inferences available to be drawn by the court in light of the objection the relevant person has taken under s 128A(2) and in light of the finding the court has made under s 128A(4) that the objection is on reasonable grounds. The method by which the relevant person is required to take an objection to the disclosure of information under s 128A(2) can be seen to have two elements. In accordance with s 128A(2)(d), the person must prepare and deliver to the court in a sealed envelope a privilege affidavit containing the information that is the subject of the objection. In accordance with s 128A(2)(e), the person must file and serve a separate affidavit setting out the basis for the objection. Both elements are important. For the person to comply with the requirement of s 128A(2)(e) that the separate affidavit set out the basis for the objection that is taken, the separate affidavit must indicate, at least in outline, the legal and factual foundation for that objection. For the court then to find under s 128A(4) that there are reasonable grounds for the objection taken, the court must be satisfied on the evidence before it that there is a legal and factual foundation for the objection that is sufficient for the court itself to conclude that the objection is reasonably maintained at the time (1936) 55 CLR 499. Gleeson the court makes its decision5. Only where that conclusion has been reached by the court does the question arise as to whether the court is also to be satisfied of the negative proposition in s 128A(6)(b). Where the person has set out in the separate affidavit filed and served in accordance with s 128A(2)(e) that a basis for the objection is that the information contained in the privilege affidavit may tend to prove that the person has committed an offence against or arising under, or is liable to a civil penalty under, a law of a foreign country, and where the objection that has been made on that basis has been found by the court under s 128A(4) to be on reasonable grounds, the satisfaction of the court that the objection has a sufficient legal and factual foundation to allow the court itself to conclude that the objection is reasonably maintained necessarily means that the court will be unable to be satisfied of the negative proposition in s 128A(6)(b). The court acting rationally could not be satisfied under s 128(4) of the existence of reasonable grounds for the objection identified in accordance with s 128A(2)(e) and simultaneously be satisfied of the negative proposition in s 128A(6)(b). Where the person has not set out in the separate affidavit filed and served in accordance with s 128A(2)(e) that a basis for the objection is that the information contained in the privilege affidavit may tend to prove that the person has committed an offence against or arising under, or is liable to a civil penalty under, a law of a foreign country, the position is the converse. The omission of any such basis for the objection set out in the separate affidavit filed and served in accordance with s 128A(2)(e) is a sufficient evidentiary foundation for the court, in the absence of evidence to the contrary, to be satisfied of the negative proposition in s 128A(6)(b). As Gordon J comprehensively explains, the present case fits within that converse scenario. The separate affidavit sworn by Mr Shi's solicitor for the purpose of s 128A(2)(e) was perfunctory, the legal and factual foundation for his objection being outlined in the document headed "Open Annotation to Privileged Affidavit of [Mr Shi]". Treating the basis of the objection sought to be set out in the separate affidavit as that particularised in that document, it is apparent that Mr Shi made a choice, in setting out the legal and factual foundation of his objection, not to include any tendency of any information in his privilege affidavit to prove that he committed any offence against or arising under, or is liable to a civil penalty under, any Chinese law. Nor did he attempt, in his privilege affidavit or otherwise, to lead evidence capable of establishing that tendency. To the cf McKinnon v Secretary, Department of Treasury (2006) 228 CLR 423 at 445 [59]. Gleeson contrary, as the primary judge found6, the information in his privilege affidavit concerned matters in Australia and "[t]here was nothing to indicate that those Australian matters could give rise to any offence in China". The earlier finding of the primary judge that there existed reasonable grounds for Mr Shi's objection7 must be read in that light as a finding that there existed reasonable grounds for the objection which in fact he took that the information contained in the privilege affidavit may tend to prove that he committed some or all of the offences against Australian law particularised in the document headed "Open Annotation to Privileged Affidavit of [Mr Shi]". We also agree with Gordon J that the majority in the Full Court and the primary judge each took an irrelevant consideration into account in failing to be satisfied for the purpose of s 128A(6)(c) that the interests of justice required disclosure of the information in the privilege affidavit. The inquiry mandated by s 128A(6)(c) as to the interests of justice proceeds on the premise that, as part of or in connection with an extant freezing or search order in a civil proceeding, there is an extant disclosure order operating to require provision of the information. No part of the inquiry is to question whether information required to be provided in compliance with that extant disclosure order would more appropriately be obtained through invocation of some other compulsory process. The majority in the Full Court therefore erred in taking into account the possibility of the Deputy Commissioner obtaining information by conducting an examination under s 108 of the Civil Procedure Act 2005 (NSW) in the same way as the primary judge erred in taking into account the possibility of the Deputy Commissioner obtaining information by serving a notice under s 353-10 of Sch 1 to the Taxation Administration Act 1953 (Cth). Evaluation of the interests of justice for the purpose of s 128A(6)(c) is informed primarily by balancing the public interest in the person to whom the extant disclosure order is directed complying with that disclosure order by disclosing information to the party to the civil proceeding in whose favour the order has been made against the potential detriment to the person that arises from the tendency of the information to prove that the person has committed an offence against or arising under, or is liable to a civil penalty under, an Australian law. A court assessing that potential detriment must obviously take into account the prohibition in s 128A(8) on derivative use of the information disclosed. As recognised by the primary judge, and as explained by Gordon J, a court assessing 6 Deputy Commissioner of Taxation v Shi [No 3] [2019] FCA 945 at [23]-[24]. 7 Deputy Commissioner of Taxation v Shi [No 3] [2019] FCA 945 at [18]. Gleeson that potential detriment must also take account of constraints on the use and dissemination of the disclosed information that arise within the context of the civil proceeding in which the disclosure order has been made. Those constraints include the obligation of the party to whom disclosure is made, and of any other person to whom the disclosed information might be given, not to make any use of the information other than for the purpose of the civil proceeding without leave of the court8. They include too the availability of orders restricting the dissemination of the disclosed information, relevantly under s 37AF of the Federal Court of Australia Act 1976 (Cth). We agree with the orders proposed by Gordon J. The peculiar circumstance of the primary judge having made clear that he would have found that the interests of justice required disclosure of the information in the privilege affidavit but for the irrelevant consideration his Honour took into account makes it appropriate for this Court, standing in the shoes of the Full Court for the purpose of the appeal, to substitute the order under s 128A(6) that the primary judge would have made had the identified error of principle not occurred. See Hearne v Street (2008) 235 CLR 125 at 157-162 [105]-[113], discussing Harman v Secretary of State for the Home Department [1983] 1 AC 280 and Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10. the Deputy Commissioner of Taxation ("the Commissioner"), obtained ex parte orders in the Federal Court of Australia freezing the worldwide assets of the respondent, Mr Zu Neng (Scott) Shi, up to the unencumbered ("the Freezing Orders"). Ancillary orders required Mr Shi to disclose all of his worldwide assets, including their value, location and details, and the extent of his interest in the assets ("the Disclosure Order")9. of A$41,092,548.03 value Where a disclosure order has been made by a federal court in a civil proceeding, as part of, or in connection with, a freezing order, s 128A of the Evidence Act 1995 (Cth) provides for an individual who is the subject of the disclosure order to claim privilege against self-incrimination β to protect the individual from convicting themselves "out of [their] own mouth"10. Section 128A(2) provides that if a person to whom a disclosure order is directed objects to complying with the order on the grounds of self-incrimination, the person must, among other things, prepare an affidavit containing the information to which objection is taken (a "privilege affidavit"). Where the court is satisfied that there are reasonable grounds for such an objection11, s 128A(5) provides that the court must not require the information in the privilege affidavit to be disclosed and must return it to the person. Section 128A(6), however, provides an exception: "If the court is satisfied that: any information disclosed in the privilege affidavit may tend to prove that the relevant person has committed an offence against or arising under, or is liable to a civil penalty under, an Australian law; and the information does not tend to prove that the relevant person has committed an offence against or arising under, or is liable to a civil penalty under, a law of a foreign country; and the interests of justice require the information to be disclosed; 9 Deputy Commissioner of Taxation v Shi [2018] FCA 1915. 10 Hamilton v Oades (1989) 166 CLR 486 at 496. See also Pyneboard Pty Ltd v Trade Practices Commission (1983) 152 CLR 328 at 340; Sorby v The Commonwealth (1983) 152 CLR 281 at 294; Environment Protection Authority v Caltex Refining Co Pty Ltd (1993) 178 CLR 477 at 500. 11 Evidence Act, s 128A(4). the court may make an order requiring the whole or any part of the privilege affidavit containing information of the kind referred to in paragraph (a) to be filed and served on the parties." (emphasis added) Mr Shi objected under s 128A to complying with part of the Disclosure Order on the grounds of self-incrimination. The information he objected to disclosing was set out in a "Privilege Affidavit" provided to the Federal Court but not to the Commissioner. The Federal Court at first instance was satisfied that there were reasonable grounds for Mr Shi's objection on the basis that the information disclosed in the Privilege Affidavit may tend to prove that Mr Shi had committed an offence against or arising under an Australian law but held that because there were other means by which the Commissioner could obtain the information, the interests of justice did not require the Privilege Affidavit to be disclosed. On appeal, the Full Court of the Federal Court, by majority, upheld the primary judge's holding that the interests of justice did not require disclosure, taking into account other available ways that the information in the Privilege Affidavit could be obtained. The Commissioner appeals to this Court on the grounds that the courts below erred in applying the exception in s 128A(6) and, in particular, in deciding that the interests of justice did not require the Privilege Affidavit to be disclosed. By a notice of contention, Mr Shi contends that the courts below should not have been satisfied that the information in the Privilege Affidavit did not tend to prove that Mr Shi had committed an offence against or arising under a law of a foreign country. As these reasons will explain, the appeal should be allowed. In order to address the parties' submissions, it is necessary to consider the legislative framework and the proper construction of s 128A. Before turning to address those issues, it is necessary to say something about the nature and purpose of a freezing order and a disclosure order. Freezing orders and ancillary orders The Federal Court may make a freezing order or an ancillary order, or both, against a judgment debtor or a prospective judgment debtor if the Court is satisfied, having regard to all the circumstances, that there is a danger that a judgment or a prospective judgment will be wholly or partly unsatisfied because the judgment debtor or the prospective judgment debtor might abscond, or because the assets of the judgment debtor or the prospective judgment debtor might be removed from Australia or from a place inside or outside Australia, or disposed of, dealt with or A freezing order, and an asset disclosure order, have the same fundamental purpose: "to prevent the abuse or frustration of [a court's] process in relation to matters coming within its jurisdiction"13. Freezing orders may be made, and may continue to operate, after final judgment to protect the efficacy of the execution14. And for freezing orders to be effective there needs to be timely disclosure of assets15. The utility in both orders lies in ensuring that the court's processes for enforcement of a judgment are not frustrated by assets being spirited away between the time of commencement of the proceedings and eventual enforcement. Legislative framework Section 128A16 deals with self-incrimination privilege in a particular context β compulsory disclosure of information because of an order ancillary to a freezing or search order17. The context is important β the disclosure of the information has been compelled by court order and, except by application to set aside or vary the making of, relevantly, one or both of the freezing order and the disclosure order, the basis for the making of the orders, as well as the reasons for the making of the orders, and the ambit of those orders, have been established. Consideration of any application for a claim of self-incrimination privilege under s 128A must proceed from the premises that the court has ordered disclosure of the 12 Federal Court Rules 2011 (Cth), rr 7.32, 7.33, 7.35(4) and 7.36. There are equivalent provisions in other court rules. 13 Witham v Holloway (1995) 183 CLR 525 at 535, quoting Jackson v Sterling Industries Ltd (1987) 162 CLR 612 at 623. See also Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319 at 321; Federal Court Rules, r 7.32. 14 Federal Court Rules, rr 7.35(1)(b), (3), (4), 7.36; Jackson (1987) 162 CLR 612 15 Bax Global (Australia) Pty Ltd v Evans (1999) 47 NSWLR 538 at 544-545 [23]; Universal Music Australia Pty Ltd v Sharman License Holdings Ltd (2005) 228 ALR 174 at 181-182 [20]. See also A v C [1981] QB 956 at 959-960: "[w]ithout information about the state of each account it is difficult, if not impossible, to operate the Mareva jurisdiction properly". 16 Found in Div 2 of Pt 3.10 of Ch 3 of the Evidence Act, dealing with "Admissibility of evidence". 17 Evidence Act, s 128A(1) definition of "disclosure order". information; the information is relevant to and necessary for the efficacy of the relevant freezing order; and the person subject to the orders has not successfully applied for the setting aside of those orders. The context in which issues of self-incrimination might arise at trial under s 128 of the Evidence Act is necessarily and markedly different. The language used in s 128A is, in large part, the language of the common law18. This is not to say that the construction of s 128A may not develop over time. Section 128A is not frozen by reference to the common law. But the central idea captured in s 128A of the Evidence Act19 β that individuals should not be compelled to incriminate themselves β is for present purposes sufficiently expressed in Rio Tinto Zinc Corporation v Westinghouse Electric Corporation20 and later authorities21. This is not the case to chart the metes and bounds of s 128A. Section 128A provides, however, a framework in many cases, of which this is one, for considering the issues sequentially in the order in which the section is set out. When that is done in this case, the appropriate balance is struck between compliance with the compulsory disclosure order, a claim of self-incrimination privilege and the interests of justice. Section 128A(2) expressly recognises that a person to whom a disclosure order is directed (a "relevant person"22) may object to complying with a disclosure order23 on the grounds that "some or all of the information required to be disclosed" by that order "may tend to prove" that the person "(a) has committed an offence against or arising under an Australian law or a law of a foreign country; or (b) is liable to a civil penalty" (emphasis added). In this case, Mr Shi is the relevant person. 18 See, eg, Rio Tinto Zinc Corporation v Westinghouse Electric Corporation [1978] AC 547 at 647: "[a]ll that is necessary is that it should be reasonable to believe that production would 'tend to expose' (not 'would expose')". 19 And in s 128 of the Evidence Act. 21 See, eg, Rank Film Distributors Ltd v Video Information Centre [1982] AC 380; Pyneboard (1983) 152 CLR 328; Sorby (1983) 152 CLR 281. 22 Evidence Act, s 128A(1) definition of "relevant person". 23 A "disclosure order" is relevantly defined in s 128A(1) to mean "an order made by a federal court in a civil proceeding requiring a person to disclose information, as part of, or in connection with a freezing or search order". If the relevant person objects on any of the grounds identified in s 128A(2)(a) or (b), the sub-section goes on to require that the relevant person do three things: disclose so much of the information required to be disclosed to which no objection is taken; and prepare an affidavit containing so much of the information required to be disclosed to which objection is taken (the privilege affidavit) and deliver it to the court in a sealed envelope; and file and serve on each other party a separate affidavit setting out the basis of the objection." (emphasis added) As is apparent, the basis for the objection must be that some or all of the information required to be disclosed may tend to prove that the person has committed an offence against or arising under an Australian law or a law of a foreign country or that the person is liable to a civil penalty. The person asserting the privilege bears the onus of establishing the factual basis for the privilege24. In its terms, s 128A(2) does not require the relevant person to establish that disclosure of the information will, on the balance of probabilities25, prove that the person has committed an offence. Rather, the standard which the relevant person's objection must reach is that disclosure of the information "may tend to prove" that the person has committed an offence. Evidence "may tend to prove" the commission of an offence where the evidence affords "a link in the chain of evidence" and therefore becomes "a means of bringing home an offence"26. 24 Accident Insurance Mutual Holdings Ltd v McFadden (1993) 31 NSWLR 412 at 422, 430; Sadie Ville Pty Ltd (As Trustee for the Sadie Ville Superannuation Fund) v Deloitte Touche Tohmatsu (A Firm) [No 3] (2018) 357 ALR 695 at 717-718 [99], 720 [113] (approved on appeal in Deloitte Touche Tohmatsu (A Firm) v Sadie Ville Pty Ltd (As Trustee for Sadie Ville Superannuation Fund) (2020) 144 ACSR 1, see especially at 4 [6]). 25 Rio Tinto Zinc Corporation [1978] AC 547 at 647; cf Evidence Act, ss 140-142 and Gedeon v The Queen (2013) 280 FLR 275, where the person asserting the privilege had been charged with an offence, and was awaiting trial, at the time of invoking the privilege in a separate proceeding. 26 Ex parte P; Re Hamilton (1957) 74 WN (NSW) 397 at 399, cited in Application Concerning Section 80 of the Supreme Court Act and Sections 119 and 128 of the Evidence Act [2004] NSWSC 614 at [35]-[36]. See also Rio Tinto Zinc Corporation Information required to be disclosed because of a disclosure order "may tend" to prove the commission of an offence if disclosure of the relevant information might, or is likely to, "set in train a process which may lead to incrimination or may lead to the discovery of real evidence of an incriminating character"27. What will be necessary to establish whether the information may tend to prove the commission of an offence will vary from case to case. The privilege may be claimed without requiring the person to explain fully how disclosure of the information would bring about the incriminating effect. To require the relevant person to go further would in at least some circumstances annihilate the protection that the section is designed to provide28. However, the mere statement by the relevant person that they believe that disclosure of information will tend to incriminate them will rarely be sufficient to protect them from complying with the disclosure order, and it will not do so when other circumstances are such as to induce the court to believe that disclosure of that information will not really have that tendency29. Something further needs to be said about a relevant person objecting to a disclosure order on the grounds that some or all of the information required to be disclosed may tend to prove that the person has committed an offence against or arising under "a law of a foreign country". As was said in Neilson v Overseas Projects Corporation of Victoria Ltd30, "Australian courts know no foreign law". A bare general assertion that disclosure of the information may tend to prove the commission of a foreign offence, as with an offence under Australian law, will not be sufficient to engage s 128A(2). More will be required. That is not a new concept31. The relevant person must point to what foreign law may apply and [1978] AC 547 at 574; Taylor, A Treatise on the Law of Evidence, as Administered in England and Ireland, 8th ed (1885), vol II at 1247-1248. 27 Rank Film Distributors [1982] AC 380 at 443; see also Sorby (1983) 152 CLR 281 28 McFadden (1993) 31 NSWLR 412 at 430. See also Taylor, A Treatise on the Law of Evidence, as Administered in England and Ireland, 8th ed (1885), vol II at 1247. 29 McFadden (1993) 31 NSWLR 412 at 430; Taylor, A Treatise on the Law of Evidence, as Administered in England and Ireland, 8th ed (1885), vol II at (2005) 223 CLR 331 at 370 [115]. 31 See, eg, United States of America v McRae (1867) LR 3 Ch App 79 at 84-86. what offence or class of offences under that law might be relevant32. That task is assisted by s 174 of the Evidence Act, a provision described as permissive and not exhaustive33. Section 174(1) provides, relevantly, that evidence of "a statute, proclamation, treaty or act of state of a foreign country" may be adduced in a proceeding by producing a book, pamphlet or other publication that "purports" to have been printed by the government or official printer of the country; or "appears to the court to be a reliable source of information" (emphasis added); or "would be used in the courts of the country to inform the courts" about the relevant law; or is an "examined copy" of the statute, proclamation, treaty or act of state. Where evidence is adduced which meets one of the conditions in s 174, a court is entitled to ascertain the content of the foreign law by reference to the material before it, in absence of expert evidence34. Of course, where none of the conditions in s 174 are engaged, proof of foreign law, through expert evidence, is required35 unless the foreign laws in question are so well-known that their contents are "notorious"36. In the present case, counsel for Mr Shi contended that Mr Shi's objection to complying with the Disclosure Order was made on grounds that the information may tend to prove the commission of an offence under an Australian law and under a law of a foreign country. But Mr Shi's objection37 did not identify the law of a foreign country, did not seek to rely on s 174 of the Evidence Act and did not lead any expert evidence of any foreign law or the content of any such law. Nor did any of the additional material placed before the Federal Court on the hearing of 32 See, eg, R v Lodhi (2006) 199 FLR 328 at 336-338 [29]-[39]; cf Gedeon (2013) 280 FLR 275 at 328 [310], see also at 316 [233]-[234], 321 [263]-[267]. 33 Mokbel v The Queen (2013) 40 VR 625 at 634 [24]. 34 See, eg, VSAB v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCA 239 at [29]-[30], quoting Applicants in V 722 of 2000 v Minister for Immigration and Multicultural Affairs [2002] FCA 1059 at [33] (approved on appeal in VHAJ v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 131 FCR 80); Re Tang (2017) 52 VR 786 at 803-804 [64]-[65]; Xu v Wang (2019) 58 VR 536 at 554-555 [70]. 35 Mokbel (2013) 40 VR 625 at 633 [22], 634 [24]-[26]. 36 Mokbel (2013) 40 VR 625 at 634 [26], referring to Saxby v Fulton [1909] 2 KB 208. In accordance with s 128A(2)(e), an affidavit was filed by Mr Shi's solicitor on 18 March 2019 setting out the basis of Mr Shi's objection to complying with the Disclosure Order. Mr Shi's s 128A application38. In his written submissions before this Court, Mr Shi submitted that a court determining an objection under s 128A may, in the absence of evidence adduced to the contrary, adopt a rebuttable presumption that foreign law is the same as Australian law39. That submission was properly abandoned during the hearing. This is one instance where the court cannot assume the unproved foreign law is identical with the lex fori40. First, as the primary judge in this case and Bathurst CJ in Gedeon v The Queen41 both observed, it is doubtful, or at least subject to real uncertainty, whether a presumption as to foreign law has any operation in the context of s 128A or s 128. The operation of a presumption would render the separate inquiry under s 128A(6)(a) and (b) redundant in its application to extraterritorial criminal offences. Why? Because the result would always be that information tending to prove the commission of an offence under an Australian law, by the operation of the presumption, would also tend to prove the commission of an offence under a law of a foreign country. To reason in such a way would be text and structure of s 128A. Second, the presumption has limited use in the case of complex and technical issues42 because courts are reluctant to pronounce judgments on hypotheses which are not correct43. And, in this case, as the primary judge observed, it would be inappropriate to make such an assumption about the content of foreign law (which may be wrong) where the issues were complex (and technical) and there was no evidence of the content of the foreign law. inconsistent with the Section 128A(4) then provides that it is for the court to determine whether or not there are reasonable grounds for the objection. The test is objective and 38 Mr Shi prepared a confidential and open "annotation" as a guide to the contents of the Privilege Affidavit. The confidential and open annotations were before the Federal Court, the Full Court and this Court. 39 Neilson (2005) 223 CLR 331 at 370 [116], 372 [125]. 40 Damberg v Damberg (2001) 52 NSWLR 492 at 505-506 [120], 522 [162]. See also, eg, Neilson (2005) 223 CLR 331 at 396 [203]; PCH Offshore Pty Ltd v Dunn [No 2] (2010) 273 ALR 167 at 182 [111]-[112]; Severstal Export GmbH v Bhushan Steel Ltd (2013) 84 NSWLR 141 at 159 [66]-[68]; Benson v Rational Entertainment Enterprises Ltd (2018) 97 NSWLR 798 at 817 [104]. (2013) 280 FLR 275 at 327 [305]. 42 Severstal Export (2013) 84 NSWLR 141 at 159 [66]-[68]. 43 Benson (2018) 97 NSWLR 798 at 817 [104], citing Damberg (2001) 52 NSWLR evaluative44. Once the privilege has been claimed, the question for the court is whether, in all the circumstances, reasonable grounds exist for apprehending danger to the relevant person from being compelled to comply with the disclosure order in relation to some or all of the information in the privilege affidavit. In assessing whether there are reasonable grounds for the objection, the court must assess whether there is a "real and appreciable risk" of prosecution if the relevant information is disclosed45. The gist of the privilege is that disclosure of the information "would tend to expose the claimant to the apprehended consequence"46. The "reasonable grounds" inquiry requires the court to assess, having regard to the circumstances of the case and the nature of the information which the relevant person is required to disclose, whether there are reasonable grounds to apprehend danger to them from being compelled to disclose the information47. This requires consideration of whether information may tend to prove the commission of an offence, as well as the likelihood, or risk, of steps being taken to prosecute that offence. There must be some material upon which the court can be satisfied of these matters48. The court is not limited to information in the privilege affidavit or any other material filed by the relevant person. There can be no real and appreciable risk of prosecution, and accordingly no reasonable grounds for invoking the privilege, where the limitation period for commencing a prosecution has expired49; where the person claiming the privilege has received a pardon or has already been convicted or acquitted of the crime50; 44 See Application Concerning Section 80 of the Supreme Court Act and Sections 119 and 128 of the Evidence Act [2004] NSWSC 614 at [21]. 45 Rio Tinto Zinc Corporation [1978] AC 547 at 574; Sorby (1983) 152 CLR 281 at 290; Sadie Ville (2018) 357 ALR 695 at 717-718 [99]. 46 Sadie Ville (2018) 357 ALR 695 at 717 [98]. 47 Sorby (1983) 152 CLR 281 at 289. It is to be accepted, however, that considerable latitude is to be afforded because information, though at first sight apparently innocent, may afford a link in a chain of evidence and thereby be a means of bringing home the offence to the relevant person. 48 McFadden (1993) 31 NSWLR 412 at 423; Application Concerning Section 80 of the Supreme Court Act and Sections 119 and 128 of the Evidence Act [2004] NSWSC 49 Sorby (1983) 152 CLR 281 at 290; Sadie Ville (2018) 357 ALR 695 at 718 [100]. 50 Sorby (1983) 152 CLR 281 at 290. or where "the taking of the step in question [the disclosure] will not add to the individual's jeopardy"51. Further, where a court determines that the claim is not made bona fide or is made for an ulterior purpose, such as to protect persons other than the applicant, the court would likely determine that there were not reasonable grounds for the objection52. If, however, the court finds that there are reasonable grounds for the objection, then, subject to s 128A(6), the court must not require the information contained in the privilege affidavit to be disclosed and must return the privilege affidavit containing the information to the relevant person53. Section 128A(6) provides the "exception" to a claim of self-incrimination privilege by permitting disclosure of the information. The exception is limited β the court must be satisfied of three matters, namely that: any information disclosed in the privilege affidavit may tend to prove that the relevant person has committed an offence against or arising under, or is liable to a civil penalty under, an Australian law; and the information does not tend to prove that the relevant person has committed an offence against or arising under, or is liable to a civil penalty under, a law of a foreign country; and the interests of justice require the information to be disclosed". (emphasis added) And if the court is satisfied of those three matters, then "the court may make an order requiring the whole or any part of the privilege affidavit containing information of the kind referred to in paragraph (a) to be filed and served on the parties" (emphasis added). Disclosure is not automatic. Particular aspects of s 128A(6) are significant. Its concern is with "any information disclosed the privilege affidavit", being, of course, information disclosed and required to be disclosed by the disclosure order, but information which the relevant person objects to disclosing on any of the grounds identified in s 128A(2)(a) or (b). Absent such objection being raised by the relevant person under s 128A(2), there is nothing to which s 128A(6) can attach. Thus, it is the information (or part of the information) required to be disclosed under the disclosure order which the relevant person has objected to 51 Sadie Ville (2018) 357 ALR 695 at 718 [101]. 52 McFadden (1993) 31 NSWLR 412 at 430. 53 Evidence Act, s 128A(5). disclosing under s 128A(2)(a) or (b), and to which the court has determined that the relevant person has reasonable grounds for objecting under s 128A(4), which the court must then be satisfied should be subject to the exception or carve out from that established claim of self-incrimination privilege. Section 128A(6)(a) and (b) do not impose a standard or burden on the party claiming privilege against self-incrimination additional to or higher than that imposed by s 128A(2) and (4). That conclusion is reinforced by the fact that the statutory phrase in s 128A(6)(b) is "does not tend to prove" (emphasis added). Where, as here, "tend to prove" is used in both ss 128A(6)(b) and 128A(2), which are cognate and related provisions of the Evidence Act 54, that phrase is presumed to have the same meaning in both provisions. The structure and content of s 128A(6) is important. Section 128A(6) presents a particular question which is more narrowly directed than the questions asked in the court's determination of the reasonable grounds inquiry in s 128A(4). Under s 128A(4), there will not be reasonable grounds for the objection if the information in question does not tend to prove commission of a relevant offence or liability to a civil penalty. But under s 128A(6), the more narrowly directed question is whether any information disclosed in the privilege affidavit may tend to prove that the relevant person has committed an offence under an Australian law and that that information does not tend to prove that the relevant person has committed an offence under a foreign law. It is a consequence of s 128A(5) and (6) that information that may tend to prove commission of an offence under foreign law will never be required to be disclosed. As will be explained, this reflects a legislative judgment that, as an Australian court cannot guarantee that a certificate providing derivative use immunity will be respected in a foreign country, a legitimate claim of self-incrimination privilege on grounds of foreign law should not be overruled55. But the inquiry under s 128A(6) also reflects the fact that information which may tend to prove the relevant person has committed an offence under an Australian law may also tend to prove the commission of an offence under a foreign law. Section 128A(6)(a) and (b) are directed at excluding from disclosure information which may tend to prove the commission of an offence under foreign law, regardless that it might also tend to prove the commission of an offence under 54 See, eg, Registrar of Titles (WA) v Franzon (1975) 132 CLR 611 at 618; McGraw-Hinds (Aust) Pty Ltd v Smith (1979) 144 CLR 633 at 643; Federal Commissioner of Taxation v Australian Building Systems Pty Ltd (In liq) (2015) 257 CLR 544 at 560 [27]; Regional Express Holdings Ltd v Australian Federation of Air Pilots (2017) 262 CLR 456 at 466-467 [21]. 55 See Australian Law Reform Commission, New South Wales Law Reform Commission, Victorian Law Reform Commission, Uniform Evidence Law: Report (2005) at 529-530 [15.104], making this point in relation to s 128, which operates in the same way. an Australian law. Of course, it may be only some β a subset β of the information in the privilege affidavit. the that referred satisfied information the court being The separation of s 128A(6)(a) and (b), and the reference in s 128A(6)(b) para (a) β being information that may tend to prove the relevant person has committed an offence against or arising under, or is liable to a civil penalty under, an Australian law β does not tend to prove that the relevant person has committed an offence against or arising under, or is liable to a civil penalty under, a law of a foreign country, is unsurprising. The statutory protection for stripping someone of a claim of privilege against self-incrimination and requiring the whole or any part of the privilege affidavit to be disclosed is that "the court must cause the relevant person to be given a certificate in respect of the information as referred to in paragraph (6)(a)"56 (emphasis added). Such a certificate can have no application, and therefore provides no protection, outside Australia57. To the extent that the court has determined that there are reasonable grounds for the relevant person's information falling within objection para (a) and that that information may also tend to prove that the relevant person has committed an offence against or arising under, or is liable to a civil penalty under, a law of a foreign country, the court cannot strip the relevant person of that self-incrimination claim. to disclosing some or all of the Where there is information of the kind described in s 128A(6)(a) and (b) the court must be satisfied that the interests of justice require that that information be disclosed58. If so satisfied, the court may require the whole or any part of the privilege affidavit containing information of the kind referred to in s 128A(6)(a) to be filed and served on the parties. regard What the interests of justice require in a particular case is to be weighed the question arises59. having Here, the proceeding involves the making of the Freezing Orders and the necessary ancillary relief in the form of the Disclosure Order in seeking to ensure that the Court's processes for enforcement of a judgment for substantial tax debts are not the proceeding in which 56 Evidence Act, s 128A(7). 57 cf Application Concerning Section 80 of the Supreme Court Act and Sections 119 and 128 of the Evidence Act [2004] NSWSC 614 at [37]-[38]. 58 Evidence Act, s 128A(6)(c). 59 See Lodhi (2006) 199 FLR 328 at 338-339 [41]-[46]; Gedeon (2013) 280 FLR 275 at 324 [289]-[290]; Australian Workers' Union v Registered Organisations Commissioner [No 5] [2019] FCA 188 at [16]. frustrated by assets being spirited away before eventual enforcement. The factors to be balanced in determining whether the interests of justice require the information to be disclosed are not and cannot be prescribed but may include the nature of the information, the likelihood of an offence being prosecuted60 and any resulting unfairness to a party. At least in this case, the availability of alternative forms of information gathering is not a consideration of any moment. The information has been gathered. The information was required to be gathered and disclosed by the Disclosure Order, where the basis of, reasons for and extent of the Disclosure Order (and the Freezing Orders) remain extant. Pointing to other available means for gathering the same information suggests that the information both is required and should be made available. It supports, rather than detracts from, requiring disclosure of the material. In this case, the majority in the Full Court of the Federal Court, the primary judge and Mr Shi in this Court referred to other forms of procedure that the Commissioner might be able to use to gather the same information. Reference to those other procedures is both distracting and unhelpful. this appeal β the Freezing Orders and the Disclosure Order β have required the assembly of the relevant information. Asking whether other procedures might allow or require the assembly of the same information again and later is not to the point. Indeed, if some other procedures do allow the Commissioner to have access to the same information (a question that need not be decided), that might suggest that in the context of the extant Freezing Orders and Disclosure Order, the interests of justice require the immediate disclosure of the information to the Commissioner rather than deferring disclosure until those other procedures have been carried out. The possibility of obtaining the same evidence by alternative coercive means is not relevant. the processes which give is distracting because rise On the other hand, the availability of other evidence that may tend to prove, to the same or some other degree, the information contained in the privilege affidavit β "alternative evidence" or an absence of "commonality" of evidence61 β may indicate that it is not in the interests of justice that the information over which privilege is claimed be disclosed. If the information over which the privilege is claimed is common with information already available to the party with the benefit of the disclosure order, or if alternative information relevant to the efficacy of the freezing order is in the possession of the party with the benefit of the disclosure order, the interests of justice may not require the information to be disclosed because the relative importance of the information over 60 cf R v Simmons [No 6] (2015) 250 A Crim R 65 at 70 [18], 74 [40]. 61 Australian Workers' Union v Registered Organisations Commissioner [No 7] [2019] FCA 195 at [26]-[28]. See also, eg, Lunt v Victoria International Container Terminal Ltd [No 1] [2019] FCA 467 at [13]-[14]. which privilege is claimed is diminished. Similarly, if the information is not particularly important to the efficacy of the freezing order, the interests of justice are not advanced by compelling the person claiming the privilege to disclose the information. Section 128A(7) and (8) recognise that there may be resulting unfairness to a party by a court making an order requiring that the whole or any part of the privilege affidavit be filed and served on the parties. As has been explained, where, despite a claim of privilege against self-incrimination having been made and the court being satisfied there are reasonable grounds for the objection, the court requires the whole or any part of the privilege affidavit to be disclosed, then s 128A(7) provides that the court must cause the relevant person to be given a certificate in respect of the information referred to in s 128A(6)(a). The operation of s 128A in this way provides "a procedure by which the evidence [sought by a disclosure order] may be secured without compromising the ability of the deponent to claim the privilege" and to "limit the court's ability to require disclosure to instances where the certificate procedure is able to provide either an absolute or a reasonable degree of protection"62. The effect of the certificate is addressed in s 128A(8), which provides that in any proceeding in an Australian court evidence of information disclosed by a relevant person in respect of which a certificate has been given, and evidence of any information, document or thing obtained as a direct result or indirect consequence of the relevant person having disclosed that information, cannot be used against the person63. The resulting unfairness is also addressed, or at least potentially addressed, by two further matters. First, there is what is commonly described as the "Harman undertaking"64, which is consistent with the statutory protection against derivative use afforded by s 128A(8)65. Contrary to the submissions of Mr Shi, where a person is compelled to disclose information by court order, the party 62 Victorian Law Reform Commission, Implementing the Uniform Evidence Act: Report (2006) at 35 [2.66]. 63 This immunity does not apply to a criminal proceeding in respect of the falsity of the evidence concerned: Evidence Act, s 128A(8). Section 128A(8) has effect despite any challenge, review, quashing or calling into question on any ground of the decision to give, or the validity of, the certificate concerned: Evidence Act, s 128A(10). 64 Named after the case in which the principle was first described: Harman v Secretary of State for the Home Department [1983] 1 AC 280. 65 cf Deputy Commissioner of Taxation v Rennie Produce (Aust) Pty Ltd (In liq) (2018) 260 FCR 272. obtaining disclosure "cannot, without the leave of the court, use it for any purpose other than that for which it was given unless it is received into evidence"66. The underlying principle is that a party who obtains the disclosure of information for a particular purpose cannot use the information for a "purpose different from that which was the only reason why, under a procedure designed to achieve justice in civil actions, [the solicitor or party] was accorded the advantage, which [they] would not otherwise have had, of having in [their] possession [that information]"67. The principle extends to information compelled to be disclosed by a disclosure order and any order made under s 128A(6)68. Unless the privilege affidavit is "read or referred to in open court in a way that discloses its contents"69 the Harman undertaking applies to it and the information contained in it, insofar as the information is sought to be used other than for the freezing orders. The purpose of the disclosure is to identify assets that are subject to or caught by the freezing orders and to permit the party with the benefit of the freezing orders to take steps, if necessary, to attach the freezing orders to the assets which are disclosed in the information and notify any affected third parties70. Counsel for Mr Shi submitted in oral argument that, although a release from the Harman undertaking would be required before the information contained in the Privilege Affidavit could be used in other proceedings, the undertaking would not affect the use of that information as an investigative tool by the Commissioner or the Australian Federal Police ("the AFP") in relation to parallel or related criminal investigations. It was further submitted in oral argument that this was a case where the information contained in the Privilege Affidavit was to be disclosed to the same agency responsible for investigating allegations of criminality. These submissions were made in support of Mr Shi's contention that there is a risk of derivative use of the information and that this is a relevant factor weighing 66 Hearne v Street (2008) 235 CLR 125 at 154-155 [96]. 67 Harman [1983] 1 AC 280 at 302. See also, eg, Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10 at 36. 68 Hearne (2008) 235 CLR 125 at 154-155 [96]. 69 Federal Court Rules, r 20.03(1). 70 A v C [1981] QB 956 at 959-960; Bax Global (1999) 47 NSWLR 538 at 544-545 [23]; Universal Music Australia (2005) 228 ALR 174 at 181 [20]; cf Ballabil Holdings Pty Ltd v Hospital Products Ltd (1985) 1 NSWLR 155 at 164; Jackson (1987) 162 CLR 612 at 622-623. against requiring disclosure. Those submissions should not be accepted. They are contrary to authority. to a Giving in a proceeding information obtained third party, including journalists71 or government officials72, contravenes the undertaking. Disclosing information to the press, even for the purpose of exposing an alleged wrongdoing, contravenes the undertaking, notwithstanding that there may be a strong public interest in disclosure of the information73. Use of information to further a criminal investigation against the party that provided the information contravenes the undertaking74. The information in this case was given for a particular purpose β in answer to a disclosure order as ancillary relief for a freezing order β and for no other purpose. The Harman undertaking, however, is not unqualified. The undertaking does not apply to a document that has been "read or referred to in open court in a way that discloses its contents"75 (emphasis added). The mere filing of an affidavit in the course of a proceeding does not mean that its contents have entered the public domain so as to no longer attract the protection of the Harman undertaking. At a minimum, it is necessary for the affidavit "to have been deployed in open court"76. Often, as in this case, counsel for the relevant person takes specific steps to ensure that an affidavit is not read or referred to in open court in a way that discloses its contents. The undertaking also may be dispensed with or modified by the court in appropriate circumstances, although that dispensing power is "not freely 71 See, eg, Harman [1983] 1 AC 280. 72 See, eg, Hearne (2008) 235 CLR 125. 73 See, eg, Distillers Co (Biochemicals) Ltd v Times Newspapers Ltd [1975] QB 613. 74 See, eg, Bailey v Australian Broadcasting Corporation [1995] 1 Qd R 476; Websyte Corporation Pty Ltd v Alexander (2012) 95 IPR 344; cf Rank Film Distributors [1982] AC 380 at 447. 75 See, eg, Federal Court Rules, r 20.03(1). See also Hearne (2008) 235 CLR 125 at 76 Deputy Commissioner of Taxation v Karas [2012] VSC 143 at [50]. See also Macquarie Radio Network Pty Ltd v Australian Broadcasting Authority [2002] FCA 1408 at [21]; Universal Music Australia Pty Ltd v Sharman License Holdings Ltd; Ex parte Merlin BV (2008) 222 FCR 580 at 587 [43]-[44]. exercised"77. A party may be released from the undertaking with leave of the court provided the party shows "special circumstances"78. Contrary to the submissions made by counsel for Mr Shi, leave of the court is required before a party will be permitted to use material obtained in a civil proceeding in furtherance of a criminal investigation or to provide such material to an investigative agency79. Taking such steps without having sought and obtained leave of the court contravenes the Harman undertaking. In making orders requiring disclosure under s 128A(6), the court also may consider making other orders of the kind made in dealing with confidential information, including by limiting disclosure of that information to identified persons for identified purposes80. Factual background The Disclosure Order in issue in this appeal was ancillary to the Freezing Orders, which were obtained ex parte by the Commissioner in proceedings the Commissioner filed in the Federal Court against Mr Shi, his wife and his son seeking judgment to recover unpaid taxation liabilities, interest and penalties under the Income Tax Assessment Act 1936 (Cth), the Income Tax Assessment Act 1997 (Cth) and the Taxation Administration Act 1953 (Cth). The Federal Court was satisfied on the evidence that there was a real danger that a judgment or prospective judgment obtained against Mr Shi might remain wholly or partly unsatisfied because assets might be removed from Australia or otherwise disposed of to the disadvantage or detriment of the Commonwealth. It is significant that at no time has Mr Shi applied for a discharge of the Freezing Orders or, alternatively, offered unencumbered assets as security for the judgment debt. And at no time has Mr Shi challenged the stated purpose of the Federal Court for making the Freezing Orders or sought to vary any aspect of the orders. 77 Esso Australia Resources (1995) 183 CLR 10 at 37. 78 Esso Australia Resources (1995) 183 CLR 10 at 37; Liberty Funding Pty Ltd v Phoenix Capital Ltd (2005) 218 ALR 283 at 289-290 [31]. 79 Bailey [1995] 1 Qd R 476 at 487; Australian Trade Commission v McMahon (1997) 73 FCR 211 at 217; Websyte Corporation (2012) 95 IPR 344 at 350-351 [17]-[18]; Ashby v Slipper [No 2] (2016) 343 ALR 351 at 355-356 [12]-[13]; Sinnott v Chief of Defence Force [2020] FCA 643 at [23]-[24]. 80 Federal Court of Australia Act 1976 (Cth), s 37AF. See also HT v The Queen (2019) 93 ALJR 1307 at 1323-1324 [76]-[77]; 374 ALR 216 at 236-237. The Disclosure Order relevantly provided that Mr Shi was required: at or before the further hearing on the Return Date (or within such further time as the Court may allow) to the best of your ability inform the [Commissioner] in writing of all your assets world wide, giving their value, location and details (including any mortgages, charges or other encumbrances to which they are subject) and the extent of your interest in the assets; (b) within 14 working days after being served with this order, swear and serve on the [Commissioner] an affidavit setting out the above information." That was subject to a further order which relevantly stated that if Mr Shi wished "to object to complying ... on the grounds that some or all of the information required to be disclosed may tend to prove" that he had "committed an offence against or arising under an Australian law or a law of a foreign country", then Mr Shi had to: disclose so much of the information required to be disclosed to which no objection is taken; and prepare an affidavit containing so much of the information required to be disclosed to which objection is taken, and deliver it to the Court in a sealed envelope; and (iii) file and serve on each other party a separate affidavit setting out the basis of the objection." As is self-evident, the form and content of that order reflected s 128A(2). Mr Shi prepared two affidavits. His first affidavit, in answer to sub-para (i), disclosed assets with an estimated aggregated value of $360,000.00. His second affidavit, in answer to sub-para (ii) β the Privilege Affidavit β set out various other assets not disclosed in the first affidavit. The Privilege Affidavit was delivered to the Court in a sealed envelope; it was not filed or served on the Commissioner. A third affidavit, filed and affirmed by Mr Shi's solicitor in answer to sub-para (iii), relevantly stated Mr Shi objected to disclosure of the Privilege Affidavit "on the ground that it may include material relevant to whether [Mr Shi] has committed an offence under an Australian law or a law of a foreign company [sic], or is liable to a civil penalty". Mr Shi's solicitor's sworn evidence was that, having regard to the Commissioner's evidence in support of his application for the Freezing Orders and the Disclosure Order, a search warrant relating to premises associated with Mr Shi, and the Privilege Affidavit, she believed that the content of the Privilege Affidavit concerned the same subject matter as the search warrant and the Commissioner's evidence. Seven subject matters were then listed including identified investigations relating to Mr Shi, his wife and his son by the AFP, and allegations of asset stripping, phoenix activity and systematic non-payment of taxation liabilities as well as fraud and evasion. On 24 April 2019, judgment, by consent, was entered for the Commissioner against Mr Shi for $42,297,437.65. That judgment debt has not been paid. Before judgment was entered, Mr Shi filed an interlocutory application in the Federal Court seeking one of two orders: that the Privilege Affidavit be returned to him or his legal representative under s 128A(5) of the Evidence Act; alternatively, in the event that the Court made an order under s 128A(6) of the Evidence Act that Mr Shi file and serve the whole or part of the Privilege Affidavit upon the parties, Mr Shi be given a certificate of the kind described in s 128A(7) in respect of the information referred to in s 128A(6)(a). Prior to the hearing of his application under s 128A, Mr Shi filed and served on the Commissioner a document headed "Open Annotation to Privileged Affidavit of [Mr Shi]" which was referred to in, and formed part of, Mr Shi's written submissions before the primary judge81. Under the heading "Introduction to grounds of objection", the document included statements that: "1. Mr Shi is suspected of having committed and conspired to commit tax fraud and related offences in respect of companies within the Shi Group of companies and in respect of his personal tax affairs during the period between 1 January 2010 and the present. The unpaid primary tax liabilities of the Shi Group of companies exceed $121 million. 3. Mr Shi is also suspected of having conspired to commit an offence contrary to sections 11.5(1) and 400.3(1) of the Criminal Code (Cth) which relates to dealing in proceeds of crime, 'by agreeing to use companies and other entities to receive, conceal and dispose of funds that were derived from the taxation fraud offences suspected [in the warrant]'. ... [T]he Commissioner asserts certain companies are, in effect, instruments of largescale tax fraud and evasion. Under these 81 A confidential version of the document was also filed but was not served on the Commissioner. circumstances information would tend to incriminate Mr Shi in the offence of dealing in proceeds of crime contrary to s 400.3(1). ... In addition to the above, the information in the Privileged Affidavit may tend to prove that Mr Shi: Conspired to dishonestly cause a loss to the Commonwealth contrary to s 135.4(3) of the Criminal Code; Conspired to enter arrangements contrary to s 11.5(1) of the Criminal Code and s 5(1) of the Crimes (Taxation Offences) Act 1980; Dishonestly obtained a financial advantage from Commonwealth contrary to s 134.2 of the Criminal Code; the Conspired to deal in proceeds of crime contrary to s 11.5(1) and s 400.3(1) of the Criminal Code; and Conspired to cause another to become a party to 2 or more non-reportable transactions contrary to s 11.5(1) of [the] Criminal Code and s 142(1) of the Anti-Money Laundering Counter-Terrorism Financing Act 2006." (footnotes omitted; emphasis added) The balance of the document summarised aspects of the Privilege Affidavit. By way of example, it described several paragraphs of the Privilege Affidavit as "Mr Shi depos[ing] to circumstances surrounding certain payments which may tend to support an inference that he is the controller of [certain] entities". There was no reference to, or particularisation of, any offence against a law of a foreign country. At the hearing of Mr Shi's interlocutory application under s 128A, the primary judge was satisfied that the Privilege Affidavit (which his Honour had read) disclosed reasonable grounds for the making of the claims against self-incrimination, and, further, that the information disclosed in the Privilege Affidavit may tend to prove that Mr Shi committed an offence against or arising under Australian law for the purposes of s 128A(6)(a) and that the information did not tend to prove that Mr Shi had committed an offence in China for the purposes of s 128A(6)(b). The remaining question for the primary judge was whether, pursuant to s 128A(6)(c) of the Evidence Act, it was in the interests of justice that the Privilege Affidavit be disclosed to the Commissioner. The primary judge held that, subject to one matter, the interests of justice favoured disclosure. The primary judge considered that there was a public interest in ensuring that taxpayers pay the correct amount of tax based upon all relevant facts. But his Honour considered that, when having regard to the interests of justice, he was also entitled to have regard to the consequences of the issue of a s 128A(7) certificate. The difficulty identified by his Honour was that he considered that the "consequence of disclosure with the issue of a certificate would be that much of the information contained in the [Privilege Affidavit] would not be able to be used against Mr Shi in any Australian Court" under s 128A(8), including "evidence of any information, document or thing obtained as a 'direct result or indirect consequence' of the disclosure". The concern of the primary judge was the consequences in any future criminal proceedings as well as any future tax appeal pursued by Mr Shi under Pt IVC of the Taxation Administration Act. The primary judge considered that it was open to the Commissioner to exercise the powers under s 353-10 of Sch 1 to the Taxation Administration Act to obtain the same information without the ability of Mr Shi to refuse production on the grounds of self-incrimination82. The primary judge ordered that the copy of the Privilege Affidavit be returned to Mr Shi. By leave to appeal to the Full Court of the Federal Court, the Commissioner challenged the primary judge's consideration of the Commissioner's information gathering powers under s 353-10 of Sch 1 to the Taxation Administration Act. A majority of the Full Court (Lee and Stewart JJ, Davies J dissenting) dismissed the Commissioner's appeal. The majority considered that the Commissioner bore the onus of establishing all matters within s 128A(6). In relation to s 128A(6)(c), all judges of the Full Court accepted that the primary judge was wrong to take into account the Commissioner's compulsory examination powers under s 353-10 of Sch 1 to the Taxation Administration Act. However, the majority upheld a ground of a notice of contention filed by Mr Shi that the interests of justice did not require disclosure of the Privilege Affidavit to the Commissioner because, as this was a case in which judgment had already been entered for the Commissioner, disclosure of the Privilege Affidavit was solely for the purpose of assisting methods of execution; and if that was so, then it was relevant to consider whether there were other available ways that execution could be assisted, including the Commissioner's ability to examine Mr Shi as a judgment debtor under s 108 of the Civil Procedure Act 2005 (NSW). In addition, Lee J considered that the derivative use immunity in s 128A(8) was very difficult to enforce and a certificate issued under s 128A(7) was not a complete answer to that difficulty. Appeal grounds The Commissioner's grounds of appeal in this Court were directed at the third limb of s 128A(6) (para (c)), namely, whether "the interests of justice require[d] the information to be disclosed" and, in particular, whether the majority in the Full Court erred in considering s 108 of the Civil Procedure Act and the risk of derivative use in that context. 82 See Commissioner of Taxation v De Vonk (1995) 61 FCR 564. By a notice of contention, Mr Shi submitted that the majority in the Full Court, having found for the purposes of s 128A of the Evidence Act that the onus was on the Commissioner (the party seeking disclosure) to satisfy the Court of the matters in s 128A(6), should have found that it was not open for the primary judge to have been satisfied of the negative proposition in s 128A(6)(b) β that the information in the Privilege Affidavit did not tend to prove that Mr Shi has committed an offence against or arising under, or is liable to a civil penalty under, a law of a foreign country. Applying the provisions of s 128A to Mr Shi sequentially, for the purposes of s 128A(2), Mr Shi, as a "relevant person", did object to complying with the Disclosure Order on the grounds that all of the information in the Privilege Affidavit may tend to prove that he has committed an offence against or arising under, or is liable to a civil penalty under, an Australian law, but did not object on the grounds that all or some of the information in the Privilege Affidavit may tend to prove that he has committed an offence against or arising under, or is liable to a civil penalty under, a foreign law. As the primary judge explained: "Other than noting that [Mr Shi, his wife and his son] are Chinese nationals with 'strong ties to China' who had bank accounts in China, no material was specifically identified as tending to show the commission of a Chinese criminal offence. No Chinese criminal offences were ever identified. It was not contended that there were current criminal investigations in China. Mr Shi was not under arrest or facing criminal proceedings in China. ... The information in the [Privilege Affidavit] concerned matters which had taken place in Australia which tended to incriminate Mr Shi. There was nothing to indicate that those Australian matters could give rise to any offence in China." At best, Mr Shi's solicitor made a bare general assertion that disclosure of the information may tend to prove the commission of an offence against a law of a foreign country. That was the position also adopted by counsel for Mr Shi in this Court. Upon the proper construction of s 128A(2), that is not sufficient. Mr Shi's notice of contention must be dismissed. Next, for the purposes of s 128A(4), there was no challenge to the finding of the primary judge (whether on appeal to the Full Court or in this Court) that there were reasonable grounds for Mr Shi's objection that disclosure of the Privilege Affidavit may tend to prove that he has committed an offence against or arising under an Australian law. It followed that, but for s 128A(6), the Court must not require the information in the Privilege Affidavit to be disclosed and must return the Privilege Affidavit to Mr Shi. Here, where there is an unchallenged finding that the information in the Privilege Affidavit may tend to prove that Mr Shi has committed an offence against or arising under an Australian law and Mr Shi has not objected on the grounds that that information may tend to prove that he has committed an offence against a law of a foreign country, the question for the Court under s 128A(6) is whether it is satisfied that the interests of justice require that the Privilege Affidavit be disclosed. A failure to object on the grounds of foreign law means that the question raised by s 128A(6)(b) does not arise. The primary judge was of the "clear view" that, but for one consideration, the interests of justice favoured disclosure of the Privilege Affidavit. The one consideration identified was the availability of alternative mechanisms for gathering the information disclosed in the Privilege Affidavit, so as to avoid the "consequence of disclosure with the issue of a certificate", which his Honour observed would be that much of the information contained in the Privilege Affidavit would not be able to be used against Mr Shi in an Australian court. For the reasons stated earlier, that consideration β as well as the other alternative forms of information gathering identified by the majority in the Full Court β may be put to one side. They were not relevant. the use prescribed s 128A(7); non-derivative The Commissioner's other appeal ground concerned the reliance by Lee J in the Full Court on the risk of derivative use of the information in the Privilege Affidavit. The risk of derivative use identified by Lee J was contrary to the proper construction of s 128A. The resulting unfairness to a relevant person of an order by a court under s 128A(6), including the risk of derivative use, is addressed by a number of measures in the court's determination of whether the interests of justice require the information to be disclosed: the certificate procedure s 128A(8); the Harman undertaking; and the ability of the court to craft the form of the orders made under s 128A(6) including, but not limited to, requiring only the part of the privilege affidavit containing information of the kind referred to in s 128A(6)(a) to be filed and served on the parties, as well as other orders limiting disclosure. In the present case, further orders under s 37AF of the Federal Court of Australia Act 1976 (Cth) may be appropriate requiring that the Privilege Affidavit not be provided or disclosed to any person except the solicitors and counsel engaged by the Commissioner for the purpose of the conduct of the underlying tax debt proceedings and named officers of the Commissioner with responsibility for executing and implementing the Freezing Orders to enforce the judgment debt. The officers, of course, would need to be identified. In the circumstances, the order requiring that the Privilege Affidavit be served on the Commissioner should be stayed pending the Federal Court hearing and determining whether suppression or non-publication orders should be made in relation to the Privilege Affidavit under s 37AF of the Federal Court of Australia Act. Finally, the premise for Mr Shi's notice of contention β that the majority in the Full Court was correct to find that the onus was on the party seeking disclosure to satisfy the court of the matters in s 128A(6)(a) and (b) β is contrary to the proper construction of s 128A. It is for the party making the claim for self-incrimination privilege to make the claim and set out the basis for the objection and, as has been observed, s 128A(6)(a) and (b) do not impose a standard or burden on the party claiming privilege against self-incrimination additional to or higher than that imposed by s 128A(2) and (4). Conclusion and orders In the present case, Mr Shi did not submit that if the appeal was allowed, the matter should be remitted to the court below to be reconsidered. The appeal should be allowed with costs. The orders made by the Full Court of the Federal Court should be set aside and, in their place, there should be the following orders: the appeal be allowed; order 2 of the orders made by the Federal Court of Australia on 24 July 2019 be set aside; subject to orders (d) and (e) below, the privilege affidavit delivered by Mr Shi pursuant to s 128A(2) of the Evidence Act 1995 (Cth) ("the Privilege Affidavit") be filed and served on the Deputy Commissioner of Taxation; order (c) be stayed pending the hearing and determination by a single judge of the Federal Court of Australia, pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth), whether suppression or non-publication orders should be made in relation to the Privilege Affidavit; there be a hearing before a single judge of the Federal Court of Australia on a date to be fixed in respect of whether suppression or non-publication orders should be made in relation to the Privilege Affidavit pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth); the Court grant a certificate pursuant to s 128A(7) of the Evidence Act 1995 (Cth) in respect of the Privilege Affidavit; and g. Mr Shi pay the Deputy Commissioner of Taxation's costs of the appeal. Edelman The extent of the onus to establish a privilege against self-incrimination Suppose a person, who is a witness in civil or criminal proceedings83 or to whom a disclosure order is directed84, objects to giving particular evidence or to complying with the disclosure order on the grounds that the evidence or information may tend to prove that the person has committed an offence under a foreign law. If the person can establish that they have reasonable grounds for that objection then, under ss 128(3) and 128A(5) of the Evidence Act 1995 (Cth), the person has a prima facie privilege against self-incrimination. The onus of proof upon the person to establish the "reasonable grounds for the objection" is a very slight onus assessed at a high level of generality. Once it is established, the prima facie position is that the court "is not to require the witness to give the evidence" and "must not require the information contained in the privilege affidavit to be disclosed"85. This is a statutory instantiation of the fundamental and deeply rooted common law privilege against self-incrimination. The issue raised by Mr Shi's notice of contention, which is anterior to the other issues on this appeal, concerns the statutory exceptions in ss 128(4) and 128A(6) to the privilege against self-incrimination. In particular, the issue is whether ss 128(4)(a) and 128A(6)(b), which express stricter requirements than are required for the prima facie privilege in ss 128(3) and 128A(5), have imposed additional burdens upon a person claiming privilege. The centuries-old common law test is reflected in ss 128(3) and 128A(5) of the Evidence Act, which require a person claiming privilege to establish that (i) reasonable grounds exist, for (ii) an objection, that (iii) evidence or disclosure may tend to prove that the person has committed an offence. A stricter test in ss 128(4)(a) and 128A(6)(b) asks whether the evidence or disclosure of the information relevantly "does not tend to prove" the commission of an offence. There is a distinction experienced by many unsuccessful litigants between, on the one hand, whether a person has reasonable grounds to make a claim and, on the other hand, whether their claim is ultimately accepted. Parliament cannot have intended to create a redundant exception, abolishing this distinction, when it omitted words like "reasonable grounds" or "objection" or "may tend" from ss 128(4)(a) and 128A(6)(b). But it is not merely the established meaning of the words of those paragraphs that requires a stricter test. The existence of a stricter 83 Evidence Act 1995 (Cth), s 128. 84 Evidence Act, s 128A. 85 Evidence Act, ss 128(3), 128A(5). Edelman test in ss 128(4)(a) and 128A(6)(b) is reinforced by the context, policy, and history of those paragraphs. The issue arises on this appeal in the context of Mr Shi's objection to disclosing information on the basis of an asserted privilege, which included asserting reasonable grounds upon which it was said that the information may tend to prove a foreign law offence. At every stage of this litigation, including in this Court, it has been accepted by the parties that Mr Shi had raised such an objection based upon a foreign law offence. No submission was ever made, nor any question ever asked by any judge at any stage of this litigation, to suggest that his affidavit material had not sufficiently raised such an objection. Nor was any submission ever made, nor any question ever asked, to suggest that Mr Shi might have made a choice not to include in his filed material, or not to attempt to spell out in open court, the reasonable grounds for his objection that disclosure may tend to prove that he had committed a foreign offence. Indeed, even on the incomplete record in this Court there was considerable material from which such reasonable grounds were established, particularly in Mr Shi's confidential privilege affidavit. It has long been the case that a person claiming privilege against self-incrimination is not required to spell out to the court the precise nature of the offence that the person might have committed and all the facts upon which that offence depends. To so require could substantially undermine the privilege. Hence, in relation to the privilege to decline to answer a question, a "great latitude" was allowed to a witness "in judging for himself of the effect of any particular question"86. The central dispute between the parties in this Court concerning the onus of proof in relation to s 128A(6)(b) only arose, and only could have arisen, against an assumption that an objection had been sufficiently taken by Mr Shi in relation to foreign law. If it had been submitted that such objection had not been properly taken by Mr Shi because some defect in the open affidavits he filed meant that he did not make it sufficiently clear that his objection related to foreign law or because the material in relation to foreign law had not been spelled out in sufficient detail (although presumably not to require Mr Shi to incriminate himself by chapter and verse) then the Deputy Commissioner of Taxation ("the Deputy Commissioner") could have objected on that basis and it would have been a simple matter for Mr Shi to file further affidavit evidence providing any necessary further information. Mr Shi's submission on his notice of contention in this Court, consistently with his submission in the courts below, was that he had a prima facie entitlement to the privilege based upon his objection. He asserted two grounds for the privilege: the information tended to prove that he had committed both an Australian offence and a foreign offence. On Mr Shi's submission, s 128A(6)(b) 86 R v Boyes (1861) 1 B & S 311 at 330 [121 ER 730 at 738]. Edelman placed the onus upon the Deputy Commissioner to negate his prima facie entitlement to the privilege and the Deputy Commissioner did not do so. Mr Shi's submission should be accepted. Even without the benefit of all the material before the primary judge, the open material that Mr Shi filed, which was disclosed to the Deputy Commissioner, shows that his objection concerning foreign law was based on reasonable grounds; the material undisclosed to the Deputy Commissioner confirms that. Mr Shi satisfied the slight onus that he bore to establish reasonable grounds for his objection that the information may tend to prove a foreign offence. He was prima facie entitled to the privilege. It will often be a difficult task for an opponent, without access to the relevant evidence or information, to negate the prima facie privilege by showing that the information does not tend to prove the commission of an offence. However, Parliament partly ameliorated that difficulty by s 128A(2)(e), which requires the person claiming the privilege to file and serve on the other party an affidavit setting out the basis of the objection. And other provisions of the Evidence Act simplify the process of proof of the facts of foreign law in some respects87. In any event, Mr Shi's privilege could not be negated by mere silence on the part of the Deputy Commissioner. The appeal should be dismissed. Evidence Act, s 128 Although this appeal concerns s 128A, it is necessary to begin with the manner of operation of s 128. Section 128A was modelled upon s 128, replicating it in large part and extending its operation from evidence of a witness to disclosure of information. The first stage: Statutory additions to the privilege against self-incrimination Section 128 of the Evidence Act was introduced to ensure that relevant evidence could be led without stultifying a witness's basic privilege against self-incrimination. In the report which led to the enactment of the Evidence Act, the Australian Law Reform Commission observed that a provision concerning the privilege against self-incrimination could strike the appropriate balance between the rights of the individual and those of the State by a procedure whereby a witness could be encouraged to testify but the State would be prevented from using the evidence against that witness in later proceedings88. 87 See Evidence Act, ss 174, 175. 88 Australian Law Reform Commission, Evidence, Report No 26 (Interim) (1985) at Edelman Sections 128(1), 128(2), and 128(3) followed this approach. They reiterated the core of the long-standing privilege against self-incrimination in two respects. First, subject to s 128(4), the court cannot require a witness to give evidence if the witness objects to giving particular evidence on reasonable grounds that the evidence may tend to prove that the witness either (a) has committed an offence against or arising under an Australian law or a law of a foreign country; or (b) is liable to a civil penalty. Secondly, the court must inform the witness that, unless required to do so by s 128(4), the witness is not required to give the privileged evidence, but that if they do choose to give the evidence then the court will give the witness a certificate which has the effect that, in any proceeding in an Australian court, it is not permissible to use either the evidence which is the subject of the certificate, or evidence of any information, document, or thing obtained as a direct or indirect consequence of the evidence, against that person. Various statutory exceptions can be put to one side89. In replicating the long-established position in relation to the privilege against self-incrimination, s 128(2) did not alter the extent of the onus at common law. The requirement that the grounds for objection be "reasonable" is concerned only with the grounds for the objection made by the party claiming the privilege, not with any ultimate conclusion. In R v Bikic90, Giles JA observed that this onus of proof at common law, and contained in s 128(2), does not require a party asserting the privilege to establish the conclusion that the evidence may tend to prove that the witness has committed an offence. It suffices that there are reasonable grounds for an objection that this may be so. This slight onus, contained in s 128(2), replicated the approach taken by the common law. As mentioned above, at common law, a "great latitude" was allowed to a witness "in judging for himself of the effect of any particular question"91. Hence, reasonable grounds were usually established unless "the Judge is perfectly certain that the witness is trifling with the authority of the Court, and availing himself of the rule of law to keep back the truth, having in reality no ground whatever for claiming the privilege"92. The slight nature of the onus was reinforced at common law and in s 128(2), read with s 128(1), by the doubly tentative language of "may tend to prove". This expression was adopted against a long history at common law. A "cloud of authorities" established that the test was satisfied by "a single remote link in the 89 See Evidence Act, s 128(7), s 128(10), and s 128(11). [2001] NSWCCA 537 at [13]-[15]. 91 R v Boyes (1861) 1 B & S 311 at 330 [121 ER 730 at 738]. 92 Adams v Lloyd (1858) 3 H & N 351 at 362 [157 ER 506 at 510]. Edelman chain of testimony, which may implicate [the witness] in a crime or misdemeanor"93, a link which Wigmore described as a "clue fact"94. The second stage: A radical addition A radical change to the operation of the common law privilege as reflected in s 128 of the Evidence Act is contained in s 128(4). Section 128(4) applies if, and only if, under s 128(2) the witness is entitled to the privilege against self-incrimination on the basis that the court is satisfied of the reasonable grounds for the objection. Section 128(4), which was amended for clarity in 200895, now provides: "The court may require the witness to give the evidence if the court is satisfied that: the evidence does not tend to prove that the witness has committed an offence against or arising under, or is liable to a civil penalty under, a law of a foreign country; and the interests of justice require that the witness give the evidence." If the requirements of s 128(4) are met then the court can require the witness to give evidence, stripping the witness of the long-established, fundamental common law privilege, albeit providing the witness with a certificate under s 128(3). Importantly, the condition in s 128(2) for the privilege to be established is different from the condition in s 128(4) for the privilege to be abrogated. The former is concerned with reasonable grounds for an objection that the evidence may tend to prove that the witness has committed an offence against, or is liable to a civil penalty under, a law of a foreign country. In broad terms, the latter is concerned with negating those reasonable grounds by showing that the evidence does not actually tend to prove (not merely that it may tend to prove) that the witness has committed an offence, or is exposed to a penalty, under foreign law. There is a basic difference between (i) a criterion that requires "reasonable grounds" for an "objection" that "may" achieve a result and (ii) a criterion that 93 Taylor, A Treatise on the Law of Evidence, as Administered in England and Ireland; with Illustrations from the American and other Foreign Laws (1887), vol 2 at 1244 Β§1454 (emphasis in original). 94 Wigmore, Evidence in Trials at Common Law, McNaughton rev (1961), vol 8 at 95 See Evidence Amendment Act 2008 (Cth), Sch 1, item 63. Edelman concerns the result itself. The difference is not drafting jargon to be disregarded as inconvenient surplusage. The choice of words in ss 128 and 128A reflects a very long-established, and fundamental, distinction in law between (i) having reasonable grounds to expect, or reasonable prospects of, a successful claim and (ii) having a successful claim. In Degiorgio v Dunn [No 2]96, Barrett J said that the expression "'without reasonable prospects of success' ... equates its meaning with 'so lacking in merit or substance as to be not fairly arguable'. The concept is one that falls appreciably short of 'likely to succeed'." The expression "reasonable grounds" for an objection in s 128(2) also reflects this entrenched understanding of the approach to privilege at common law where "reasonable ground[s] to apprehend danger to the witness from his being compelled to answer"97 would be established if there was a degree of risk which "cannot be dismissed as tenuous or illusory or so improbable as to be virtually without substance"98 or which could not be dismissed as having "reference to some extraordinary and barely possible contingency, so improbable that no reasonable [person] would suffer it to influence [their] conduct"99. Parliament cannot be treated as having been ignorant of these basic distinctions when it chose to express the qualification upon the established, and now only prima facie, basis for privilege in terms that require the court's satisfaction that "the evidence does not tend to prove". To reiterate: reasonable grounds for an objection on the basis of that tendency is a very different thing from the tendency actually existing. (2005) 62 NSWLR 284 at 293 [28]. See also Lemoto v Able Technical Pty Ltd (2005) 63 NSWLR 300 at 329-331 [131]-[132]; Fowler v Toro Constructions Pty Ltd [2008] NSWCA 178; Keddie v Stacks/Goudkamp Pty Ltd (2012) 293 ALR 764 at 775 [58]; Newell; Muriniti v De Costi (2018) 97 NSWLR 398 at 413 [57]-[58]. 97 R v Boyes (1861) 1 B & S 311 at 330 [121 ER 730 at 738]. See also Ex parte Reynolds; In re Reynolds (1882) 20 Ch D 294; Triplex Safety Glass Co Ltd v Lancegaye Safety Glass (1934) Ltd [1939] 2 KB 395 at 403-404; Rio Tinto Zinc Corporation v Westinghouse Electric Corporation [1978] AC 547 at 581, 612, 627, 647; Sorby v The Commonwealth (1983) 152 CLR 281 at 289; R v Independent Broad-Based Anti-Corruption Commissioner (2016) 256 CLR 459 at 474 [53]. 98 Rio Tinto Zinc Corporation v Westinghouse Electric Corporation [1978] AC 547 at 99 R v Boyes (1861) 1 B & S 311 at 330 [121 ER 730 at 738]. Edelman The extent of the onus under s 128(4) There are some aspects of s 128(4) in which questions of onus do not arise. One circumstance where there is no role for any onus is in decisions concerning s 128(4)(b): "the interests of justice". In those circumstances, the issue will only be one of evaluation of the existing evidence and circumstances100. Another circumstance where there is no role for any onus is where the party claiming the privilege has not shown any reasonable grounds for an objection concerning foreign law, and only has reasonable grounds for an objection concerning Australian law. In those circumstances, a court will invariably be satisfied of the conclusion that the evidence does not tend to prove the commission of a foreign offence for the purposes of s 128(4)(a) and no issue of onus will arise. By contrast, if a court has concluded under s 128(2) that the party claiming the privilege has established reasonable grounds for the objection concerning foreign law then the question is which party bears the onus of satisfying the court as to the matters in s 128(4)(a). There is an onus of persuasion, or "risk of nonpersuasion"101, concerning s 128(4)(a). That onus is a "very different thing[]"102 from an onus to produce evidence. Nevertheless, the onus to produce evidence will commonly, at least initially, follow the onus of persuasion with the extent of that onus to produce evidence usually depending upon the power of the party to do If the onus of persuasion were upon the witness who had established an entitlement to a privilege under s 128(2) then s 128(4)(a) would operate, in effect, to require the witness to satisfy an additional hurdle before the privilege would arise. Hence, a witness who established reasonable grounds for an objection β that the evidence may tend to prove that the witness has committed an offence against 100 Compare BHP Billiton Ltd v Schultz (2004) 221 CLR 400 at 437 [71], citing Bankinvest AG v Seabrook (1988) 14 NSWLR 711 at 727. 101 Wigmore, Evidence in Trials at Common Law, Chadbourn rev (1981), vol 9 at 283-287 Β§2485. See also James, "Burdens of Proof" (1961) 47 Virginia Law Review 102 Central Bridge Corporation v Butler (1854) 2 Gray 130, cited in Thayer, A Preliminary Treatise on Evidence at the Common Law (1898) at 355. See further Thayer, A Preliminary Treatise on Evidence at the Common Law (1898) at 355-359; Malek (ed), Phipson on Evidence, 19th ed (2018) at 159 [6-02]. 103 Blatch v Archer (1774) 1 Cowp 63 at 65 [98 ER 969 at 970]. See Hampton Court Ltd v Crooks (1957) 97 CLR 367 at 371-372; G v H (1994) 181 CLR 387 at 391-392; Russo v Aiello (2003) 215 CLR 643 at 647 [10]-[11]. Edelman a law of a foreign country β would be required also to satisfy the court that the evidence tended to prove that the witness has committed an offence arising under a law of a foreign country. In other words, the witness would be granted a prima facie privilege for no other reason than to require that witness to satisfy a further condition that would wholly subsume the test for the prima facie privilege. By contrast, if the onus is upon the person seeking to abrogate the prima facie privilege then s 128(4)(a) would operate to require that person to negate the reasonable grounds that have been established by satisfying the court that the evidence does not tend to prove that the witness has committed an offence arising under a law of a foreign country. The text of s 128(4) imposes any onus upon the party seeking to abrogate the privilege To the extent that an onus applies in s 128(4)104, the plain text of s 128(4)(a) imposes that onus upon the party seeking to abrogate the prima facie statutory privilege for two reasons. First, the provision is expressed in terms of negating the privilege: "the evidence does not tend to prove ...". Secondly, the provision only applies once the witness has established reasonable grounds for an objection claiming the privilege. That prima facie privilege is preserved, "[s]ubject to"105 the discretion for the court to require the person to give the evidence if the court is "satisfied" of various matters106. The language of "satisfaction" in the Evidence Act is shorthand for "satisfied by the party so asserting". It is the language of onus, just as the expression "if the court finds" in s 128A(5) is well accepted to be the language of onus107. For instance, s 141 of the Evidence Act provides that in a criminal proceeding, the court is not to find the case of the prosecution proved "unless it is satisfied that it has been proved beyond reasonable doubt". The shorthand is for the court to be "satisfied by the argument and evidence led by the prosecution". The same is true of s 142, which provides that except as otherwise provided by the Act, a finding by the court that facts "have been proved" requires the court to be "satisfied that they have been proved on the balance of 104 See [89] above. 105 Evidence Act, s 128(3). 106 Evidence Act, s 128(4). 107 See Accident Insurance Mutual Holdings Ltd v McFadden (1993) 31 NSWLR 412 Edelman probabilities". Again, "satisfied" is the language of the onus of proof108. It is shorthand for "satisfied by the party so asserting". The operation of the onus in s 128(4)(a) requires the person seeking to negate the privilege to bear a persuasive onus to satisfy the court that, despite reasonable grounds for an objection that the evidence may tend to prove that the witness has committed a foreign offence, the evidence does not tend to prove this. Where the basis for the objection has been explained by affidavit to the other party, as was required and occurred in this case109, the person seeking to negate the privilege might lead evidence such as the "fact" of the relevant foreign law (it being well established that the state of foreign law is a fact to be proved110) or other relevant facts such as actual foreign immunity from a civil penalty, to show that despite reasonable grounds for the objection, the foreign law or the immunity of the witness does not tend to show the commission of a foreign offence. The policy of s 128(4) imposes any onus on the party seeking to abrogate the privilege Almost contemporaneously with the introduction of the Evidence Act, including s 128, four members of this Court had said of judicial attempts to ameliorate the privilege against self-incrimination that111: "it is inimical to the administration of justice for a civil court to compel self-incriminatory disclosures, while fashioning orders to prevent the use of the information thus obtained in a court vested with criminal jurisdiction with respect to the matters disclosed. Nor is justice served by the ad hoc modification or abrogation of a right of general application, particularly not the privilege against one as fundamental and as self-incrimination." important as The Australian Law Reform Commission proposal for the provision that became s 128 left to the party protected by the privilege the choice of whether to 108 Gedeon v The Queen (2013) 280 FLR 275 at 323 [285], citing Odgers, Uniform Evidence Law, 10th ed (2012) at [1.3.13060]. 109 Required in relation to s 128A by s 128A(2)(e) read with s 128A(2)(d). 110 Neilson v Overseas Projects Corporation of Victoria Ltd (2005) 223 CLR 331 at 370 [115]. See also 343 [15], 356 [60], 391 [185], 415 [261], 421 [283]; Callwood v Callwood [1960] AC 659 at 681. 111 Reid v Howard (1995) 184 CLR 1 at 17. Edelman abandon the privilege for the limited protection of a certificate112. In its response to the inclusion of a provision by which the court stripped the privilege113, the Commission observed that the "underlying policy of s 128 is that the privilege against self-incrimination should only be overridden when an immunity is available to the witness in relation to other proceedings"114. It is well known that the protection afforded by a certificate granted under s 128(6) and (7) to the person whose privilege has been abrogated is less than absolute115. It would be naΓ―ve to assume that every recipient of the information will know of116, and will always strictly comply with, an obligation not to use the information for any collateral purpose, which includes an obligation not to reveal the information for use by any other person117. If the court requires the evidence to be given, the certificate is limited to any "proceeding in an Australian court". It does not apply to non-court tribunals. It does not apply to administrative enquiries. It does not apply to any foreign proceeding. Further, a Crown Prosecutor or counsel for a co-accused in a criminal proceeding might not always know if information in the brief had been obtained directly or indirectly from a disclosure that had been compelled by s 128(4). And, in a dispute about whether particular evidence had been obtained directly or indirectly as a consequence of the evidence required to be disclosed, it might be extremely difficult for the party objecting to prove that the evidence had been so obtained. Since the protection is less than absolute, it is unsurprising that Parliament imposed conditions upon the discretionary power to abrogate the privilege in s 128(4), which include the court being satisfied of the conclusion that the evidence does not tend to prove the foreign offence. An interpretation of s 128(4)(a) that 112 Australian Law Reform Commission, Evidence, Report No 38 (1987) at 33-34 [55], 241 [290]-[295]. See also Appendix A: Draft legislation, cl 110. 113 That provision being Evidence Act, s 128(4). 114 Australian Law Reform Commission, New South Wales Law Reform Commission, Victorian Law Reform Commission, Uniform Evidence Law, ALRC Report No 102, NSWLRC Report No 112, VLRC Final Report 115 Ross v Internet Wines Pty Ltd (2004) 60 NSWLR 436 at 450-451 [99]; Pathways Employment Services Pty Ltd v West (2004) 212 ALR 140 at 151 [33]. 116 Compare, for instance, Harman v Secretary of State for the Home Department 117 Hearne v Street (2008) 235 CLR 125 at 154-155 [96]. Edelman required the person claiming privilege to overcome a further hurdle would undermine this parliamentary compromise. By contrast, an interpretation that requires the party seeking disclosure to negate a prima facie privilege fits comfortably with the scheme of s 128(4), as it is a safety net before requiring disclosure with less than complete protection. A further reason in support of an interpretation that treats s 128(4)(a) as a provision that must be negated by the party seeking disclosure is the principle of legality. The principle of legality is not a binary rule of interpretation. It is based upon basic and common expectations of justice that the more that an interpretation would result in impairment of rights or freedoms, and the more fundamental those rights or freedoms, the less likely it is that Parliament could have intended such a consequence118. It has been repeatedly acknowledged in this Court that the common law has long regarded as fundamental the privilege that a person has against self-incrimination119. The principle of legality thus provides strong support for an interpretation of s 128(4)(a) which gives the text its natural meaning and requires a person seeking to abrogate the statutory instantiation of this fundamental privilege β leaving the party entitled to the privilege with less than complete protection β to satisfy the court that the evidence does not tend to prove that the witness has committed an offence against or arising under, or is liable to a civil penalty under, a law of a foreign country. It might be difficult for the party seeking to abrogate the privilege to do so, especially armed only with information concerning the basis for the objection. But, the task is not impossible120 and there are good and clear policy reasons for Parliament to have placed a significant obstacle to the abrogation of a fundamental privilege in relation to foreign law offences. Evidence Act, s 128A Prior to the introduction of s 128A, there was uncertainty about whether any procedures analogous to that in s 128 should apply in relation to orders for disclosure in connection with freezing orders or search orders in civil proceedings. A non-statutory procedure was fashioned in an attempt to strike a balance between 118 See Federal Commissioner of Taxation v Tomaras (2018) 265 CLR 434 at 467-468 [101]-[102]; Mann v Paterson Constructions Pty Ltd (2019) 267 CLR 560 at 623 119 Sorby v The Commonwealth (1983) 152 CLR 281 at 289, 309; Pyneboard Pty Ltd v Trade Practices Commission (1983) 152 CLR 328 at 340; Reid v Howard (1995) 184 CLR 1 at 11-12. See also Environment Protection Authority v Caltex Refining Co Pty Ltd (1993) 178 CLR 477 at 527, 543. 120 See [93] above. Edelman the privilege against self-incrimination and the disclosure of information for the purpose of civil proceedings121. This entailed the court conducting a preliminary hearing following the swearing, but before the filing, of an asset disclosure affidavit. If an objection was taken at the preliminary hearing on the basis of privilege against self-incrimination, the parties and the Director of Public Prosecutions were heard on whether a s 128 certificate should be issued. Following disapproval of this procedure122, the Australian Law Reform Commission, the New South Wales Law Reform Commission, and the Victorian Law Reform Commission published a joint discussion paper123 and then a joint report124 proposing legislative reform by introduction of a new s 128A into the Evidence Act. In a later report125, the Victorian Law Reform Commission drafted a refined form of s 128A. The report stated that the draft provision was designed in line with the operation of the privilege at trial under s 128, limiting the court's ability to require disclosure to instances where the certificate procedure is able to provide either an absolute or a reasonable degree of protection126. The Victorian Law Reform Commission noted that it was taking "an admittedly cautious approach to the abrogation of the privilege"127. This report, including the draft form of s 128A, was the basis for the Evidence Amendment Act 2008 (Cth), which repealed s 128 in its previous form and introduced the clarified form of s 128 together with 121 See Bax Global (Australia) Pty Ltd v Evans (1999) 47 NSWLR 538. 122 Ross v Internet Wines Pty Ltd (2004) 60 NSWLR 436. See also Pathways Employment Services Pty Ltd v West (2004) 212 ALR 140 at 148-154 [28]-[40]. 123 Australian Law Reform Commission, New South Wales Law Reform Commission, Victorian Law Reform Commission, Review of the Uniform Evidence Acts, ALRC Discussion Paper No 69, NSWLRC Discussion Paper No 47, VLRC Discussion Paper (2005). 124 Australian Law Reform Commission, New South Wales Law Reform Commission, Victorian Law Reform Commission, Uniform Evidence Law, ALRC Report No 102, NSWLRC Report No 112, VLRC Final Report (2005). 125 Victorian Law Reform Commission, Implementing the Uniform Evidence Act, Report (2006). 126 Victorian Law Reform Commission, Implementing the Uniform Evidence Act, Report (2006) at 35 [2.66]. 127 Victorian Law Reform Commission, Implementing the Uniform Evidence Act, Report (2006) at 35 [2.67]. Edelman s 128A128. The new s 128A "clarifie[d] that the privilege against self-incrimination under the Act applies to disclosure orders"129. In the operation of s 128A to strip a person of an established privilege, the Victorian Law Reform Commission followed the same pattern for disclosure orders, with generally the same wording, as s 128 took to evidence. Section 128A adopted the Commission's proposed definition of disclosure orders as130 "order[s] made by a federal court in a civil proceeding requiring a person to disclose information, as part of, or in connection with a freezing or search order" but excluding orders under the Proceeds of Crime Act 2002 (Cth). In common with the approach taken in s 128, under s 128A a court must not require information in a privilege affidavit to be disclosed if the court finds that there are reasonable grounds for an objection that information in it may tend to prove that the person has committed an offence against or arising under an Australian law or a law of a foreign country, or is liable to a civil penalty131. Again, in common with the approach taken in s 128, if a court makes an order stripping the person of the privilege then the person is to be given a certificate with the same protections against use or derivative use in an Australian court132. And in common with the approach taken in s 128, the court cannot exercise its discretion to permit disclosure unless it is satisfied of the following conditions133: the information does not tend to prove that the person has committed an offence against or arising under, or is liable to a civil penalty under, a law of a foreign country; and the interests of justice require the information to be disclosed. The approach of s 128A to protection of a person's privilege against self-incrimination in relation to disclosure of information that may tend to prove that the person has committed an offence against a law of a foreign country is in substance identical to that of s 128. The court's discretion to strip the person of that privilege requires it to be satisfied by the person seeking to abrogate the privilege 128 Evidence Amendment Act 2008 (Cth), Sch 1, item 63. See Australia, House of Representatives, Evidence Amendment Bill 2008, Explanatory Memorandum at 129 Australia, House of Representatives, Evidence Amendment Bill 2008, Explanatory Memorandum at 32 [191]. 130 Evidence Act, s 128A(1). 131 Evidence Act, ss 128A(2), 128A(4). 132 Evidence Act, ss 128A(7), 128A(8). 133 Evidence Act, s 128A(6)(b), (c). Edelman that, despite reasonable grounds for the objection (the basis of which s 128A(2)(e) requires to be provided to the person seeking to abrogate the privilege in an affidavit), the information does not tend to prove that the person has committed an offence arising under a law of a foreign country. Section 128A imposes no further obligation upon the person who, having established reasonable grounds for their objection, is prima facie entitled to the privilege. The approach taken in this case In this Court, senior counsel for Mr Shi, who also appeared for Mr Shi in the courts below, said that Mr Shi's objection "went to both Australian and foreign law". The twofold nature of this objection, going to both Australian and foreign law, was not disputed at any stage during the hearings before the primary judge or before the Full Court of the Federal Court of Australia. Nor was it suggested at any stage that Mr Shi had failed to file and serve on the Deputy Commissioner an affidavit setting out the basis of his objection134, including an objection as to foreign law. In short, as senior counsel for Mr Shi submitted in this Court, the Deputy Commissioner "could have been in no doubt as to what we were talking about in terms of foreign offences". If the Deputy Commissioner had any doubt, it would have been, and remains, a simple matter for Mr Shi to resolve that doubt and to rectify his claim by filing a fresh affidavit in the Federal Court, which would clarify that he had brought an objection as to foreign law (as well as Australian law). Before the primary judge, Mr Shi relied upon an affidavit filed by his solicitor in which the privilege was asserted by express reliance upon reasonable grounds on the basis of both Australian and foreign offences. The affidavit concluded with the statement below, including an obvious typographical error of a foreign "company" which should have been "country": "By reason of the foregoing, the first respondent claims privilege over the [privilege affidavit] and objects [to] its disclosure; on the ground that it may include material relevant to whether the first respondent has committed an offence under an Australian law or a law of a foreign company, or is liable to a civil penalty." The material upon which Mr Shi relied in support of his foreign law objection included the following: a privilege affidavit, which was not disclosed to the Deputy Commissioner but which Davies J, in the Full Court of the Federal Court, observed had raised an objection on the basis of foreign law135; two affidavits of Aris Zafiriou (which were not before this Court); two exhibits to those 134 See Evidence Act, s 128A(2)(e). 135 Deputy Commissioner of Taxation v Shi (2020) 277 FCR 1 at 3 [2]. Edelman affidavits (which were also not before this Court); and a search warrant for the premises of Mr Shi seeking, amongst many other things, all documents and records relating to numerous individuals and companies, a number of which appear to be based in China, and offences including taxation offences, money laundering offences, secret commission offences, and migration offences. The contents of Mr Shi's privilege affidavit were not disclosed to the Deputy Commissioner. But Mr Shi properly provided an open annotation to the privilege affidavit which explained, among other things under the heading of "Annotated grounds of objection", that: (i) very substantial amounts of money had been transferred to China by various entities within the date range of the suspected offences; (ii) there were circumstances surrounding certain payments which may tend to support an inference that Mr Shi is the controller of those entities; and (iii) payments made within the periods of the suspected offences to a recipient who is incarcerated in China with his assets having been seized by the Chinese government may tend to incriminate Mr Shi in the offence of dealing in proceeds of crime. Although the record in this Court is not complete β including the absence of the transcript of the hearing before the primary judge and the absence of several affidavits that were before the primary judge β and although the point was never put to senior counsel for Mr Shi in this Court, it may be that before the primary judge Mr Shi did not specifically identify any Chinese offence, or class of Chinese offence. But, consistently with the slight nature of the onus in s 128A(2), there was no requirement for him to do so. This is so for three reasons. First, Mr Shi was not required to "go into detail β because that may involve his disclosing the very matter to which he takes objection"136. Secondly, issues of self-incrimination under s 128 (upon which s 128A was modelled) sometimes arise in the course of a fast-moving criminal trial where it could hardly have been the intention of Parliament that a witness would need to descend to the detail of describing the class of offence that might be involved in relation to the evidence to be given. Rather, and consistently with the common law rule, the objection is assessed by the judge in light of all the circumstances and the nature of the information. If reasonable grounds exist for "apprehending danger" based upon those circumstances and upon the nature of that information then objectors are given "considerable latitude" in judging for themselves "the effect of any particular question"137. Thirdly, in many cases it will 136 Rio Tinto Zinc Corporation v Westinghouse Electric Corporation [1978] AC 547 at 574; Accident Insurance Mutual Holdings Ltd v McFadden (1993) 31 NSWLR 412 137 Accident Insurance Mutual Holdings Ltd v McFadden (1993) 31 NSWLR 412 at 430; Taylor, A Treatise on the Law of Evidence as Administered in England and Ireland; with Illustrations from the American and other Foreign Laws (1887), vol 2 Edelman be easy to accept that there are reasonable grounds for an objection that evidence may tend to prove the commission of a foreign offence without knowing the nature or identity of that offence because the circumstances will indicate the general nature of the offence alleged. For instance, the international element of the money laundering offences alleged in the search warrant invited an obvious inference of allegations of possible criminality in China as well as in Australia. In a section of his reasons entitled "Reasonable Grounds for the Objection β s 128A(4)", the primary judge concluded that there were "reasonable grounds for the making of the claims for the privilege against self-incrimination" in relation to the contents of the privilege affidavit138. His Honour did not specify whether the reasonable grounds concerned only offences under Australian law or whether the reasonable grounds concerned offences under both Australian and Chinese law. Although Mr Shi had relied on both grounds in affidavit evidence in support of his objection, it was not necessary for his Honour to descend to these specifics since the parties had agreed that if the primary judge was satisfied that there were reasonable grounds for Mr Shi's objection then it would suffice for his Honour simply to express his conclusion139. Even without any reliance upon information in the privilege affidavit, and in light of the very slight onus upon Mr Shi at this stage of the statutory process, it suffices from the information in the open annotation to conclude that Mr Shi had reasonable grounds for his objection as to foreign law: his objection was not "so improbable as to be virtually without substance"140. Mr Shi's open annotation described payments between Australia and China with which it might be inferred that he was associated. The recipients of those payments included a person who was "incarcerated in China with his assets having been seized by the Chinese government". The open annotation also explained that the confidential privilege affidavit contained a translation of a Chinese criminal indictment against the person who had received the payments. If there were any doubt whether Mr Shi had established reasonable grounds, the material in that privilege affidavit provides further support for the objection, particularly both columns of the first item in the at 1246-1247 Β§1457. See also In Marriage of Atkinson (1997) 136 FLR 347 at 351, but compare at 377. 138 Deputy Commissioner of Taxation v Shi [No 3] [2019] FCA 945 at [18]. 139 [2019] FCA 945 at [21]. 140 Rio Tinto Zinc Corporation v Westinghouse Electric Corporation [1978] AC 547 at Edelman Table at para 12 when read with para "2)" of Annexure B on page 12 (immediately after point "3." on page 12). Although, in light of the agreement between the parties, the primary judge did not set out in his reasons whether he had concluded that there were reasonable grounds for Mr Shi's objection, his Honour must have reached a conclusion that reasonable grounds existed because he went on to consider whether he was satisfied that those reasonable grounds had been negated because the information disclosed in the privilege affidavit did not tend to prove that Mr Shi has committed an offence in China141. For the reasons explained above, reasonable grounds existed in relation to both Australian law and Chinese law. In a section of his reasons entitled "Tendency to Prove an Offence β s 128A(6)(a)" the primary judge said that he was satisfied that Mr Shi had failed to demonstrate that there was information which tended to prove that he had committed an offence under a foreign law and that "no material was specifically identified as tending to show the commission of a Chinese criminal offence"142. His Honour observed that there was nothing to indicate that the Australian matters β founding his Honour's satisfaction as to s 128A(6)(a) β could give rise to any offence in China or that Mr Shi was under investigation or had been charged143. The onus was placed on Mr Shi to establish the test set out in s 128A(6)(b)144. Mr Shi's notice of contention in the Full Court of the Federal Court was on grounds which included that the Deputy Commissioner bore, and did not meet, the onus of satisfying the court as to the matters set out in s 128A(6)(b). A majority of the Full Court decided the appeal on different grounds from those relating to the issue of onus. On the ground concerning onus, Davies J considered that s 128A(6)(b) imposed the same test as the test of "reasonable grounds" in s 128A(4) and, hence, her Honour considered that Mr Shi bore the onus relevant to s 128A(6)(b), since he bore the onus to prove the same matters in relation to s 128A(4)145. By contrast, Lee and Stewart JJ accepted that Mr Shi did not bear the 141 [2019] FCA 945 at [23]-[25]. 142 [2019] FCA 945 at [23]. 143 [2019] FCA 945 at [23]-[24]. 144 [2019] FCA 945 at [23]. 145 Deputy Commissioner of Taxation v Shi (2020) 277 FCR 1 at 19-20 [40]. Edelman onus in relation to s 128A(6)(b)146. But their Honours concluded that the primary judge had been affirmatively satisfied that the information did not tend to prove that Mr Shi committed an offence in China147. For the reasons above, the proper approach to s 128A required the Full Court to recognise that: (i) Mr Shi had reasonable grounds for his objection that the information in his privilege affidavit may tend to prove that he had committed an offence under Chinese law; and (ii) the Deputy Commissioner, who had been passive on this issue, had not negated Mr Shi's prima facie claim to privilege in this respect under s 128A(6)(b). However, since, for different reasons, the Full Court reached the conclusion that Mr Shi's privilege should be maintained, the appeal should be dismissed. Conclusion No person should be compelled to provide information that may tend to expose them to liability arising under foreign criminal or penal laws. Nor should they be required to provide chapter and verse of how they might have offended against a foreign law. Section 128A is carefully designed to avoid these consequences. All that a person is required to do is discharge the slight onus of showing reasonable grounds for an objection that the information may tend to prove an offence under foreign law. The notice of contention in this Court was argued on an all-or-nothing basis. It was not submitted that the matter should be remitted to the Federal Court to consider the extent to which it was possible to separate the information as to which there were, from the information as to which there were not, reasonable grounds that it may tend to prove the commission of a foreign offence by Mr Shi. The submissions on the notice of contention should be accepted. The appeal should be dismissed with costs. 146 (2020) 277 FCR 1 at 31 [91], 36 [115]. 147 (2020) 277 FCR 1 at 32 [93]. |
HIGH COURT OF AUSTRALIA VERA MOMCILOVIC APPELLANT AND THE QUEEN & ORS RESPONDENTS Momcilovic v The Queen [2011] HCA 34 8 September 2011 ORDER 1. Appeal allowed. Set aside paragraphs 1-5 of the order of the Court of Appeal of the Supreme Court of Victoria dated 25 March 2010, and in their place order that: the appellant have leave to appeal against her conviction; the appeal be allowed; the appellant's conviction be quashed and sentence set aside; and a new trial be had. The second respondent pay two-thirds of the costs of the appellant in this Court. On appeal from the Supreme Court of Victoria Representation M J Croucher and K L Walker with C A Boston for the appellant (instructed by Melasecca, Kelly & Zayler) G J C Silbert SC with B L Sonnet and C W Beale for the first respondent (instructed by Solicitor for Public Prosecutions (Vic)) S G E McLeish SC, Solicitor-General for the State of Victoria with J M Davidson and A M Dinelli for the second respondent (instructed by Victorian Government Solicitor) S P Donaghue with E M Nekvapil for the third respondent (instructed by Victorian Equal Opportunity and Human Rights Commission) Interveners S J Gageler SC, Solicitor-General of the Commonwealth with R M Doyle SC and A D Pound intervening on behalf of the Attorney-General of the Commonwealth (instructed by Australian Government Solicitor) at the hearing on 8, 9 and 10 February 2011 H C Burmester QC with R M Doyle SC and A D Pound intervening on behalf of the Attorney-General of (instructed by Australian the Commonwealth Government Solicitor) at the hearing on 7 June 2011 R J Meadows QC, Solicitor-General for the State of Western Australia and R M Mitchell SC with C L Conley intervening on behalf of the Attorney-General for the State of Western Australia (instructed by State Solicitor (WA)) M G Sexton SC, Solicitor-General for the State of New South Wales and K M Richardson intervening on behalf of the Attorney-General for the State of New South Wales (instructed by Crown Solicitor (NSW)) at the hearing on 8, 9 and 10 February 2011 M G Sexton SC, Solicitor-General for the State of New South Wales with M L Rabsch intervening on behalf of the Attorney-General for the State of New South Wales (instructed by Crown Solicitor (NSW)) at the hearing on 7 June G L Sealy SC, Solicitor-General for the State of Tasmania with S Gates intervening on behalf of the Attorney-General for the State of Tasmania (instructed by Crown Solicitor for Tasmania) M G Hinton QC, Solicitor-General for the State of South Australia with C Jacobi intervening on behalf of the Attorney-General for the State of South Australia (instructed by Crown Solicitor (SA)) M A Perry QC with P J F Garrisson and K A Stern intervening on behalf of the Australian Capital Territory Attorney-General (instructed by ACT Government Solicitor) M K Moshinsky SC with C P Young appearing as amicus curiae on behalf of the Human Rights Law Centre Ltd (instructed by Allens Arthur Robinson) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Constitutional law (Cth) β Inconsistency between Commonwealth and State laws β Appellant convicted of trafficking in methylamphetamine contrary to s 71AC of Drugs, Poisons and Controlled Substances Act 1981 (Vic) ("Drugs Act") β Trafficking in methylamphetamine an indictable offence under s 302.4 of Criminal Code (Cth) β Commonwealth offence prescribed lower maximum penalty than State offence and different sentencing regime β Whether State law inconsistent with Commonwealth law and invalid to extent of inconsistency. Constitutional law (Cth) β Judicial power of Commonwealth β Constitution, Ch III β Functions conferred on State courts by State law β Compatibility with role of State courts under Ch III β Section 32(1) of Charter of Human Rights and Responsibilities Act 2006 (Vic) ("Charter") provided "[s]o far as it is possible to do so consistently with their purpose, all statutory provisions must be interpreted in a way that is compatible with human rights" β Section 36(2) of Charter empowered Supreme Court of Victoria to make declaration that statutory provision cannot be interpreted consistently with a human right β Declaration had no effect upon validity of provision or legal rights of any person β Nature of task required by s 32(1) of Charter β Whether s 32(1) reflection of principle of legality β Whether s 32(1) invalid for incompatibility with institutional integrity of Supreme Court β Whether s 36 confers judicial function or function incidental to exercise of judicial power β Whether s 36 invalid for incompatibility with institutional integrity of Supreme Court. Constitutional law (Cth) β High Court β Appellate jurisdiction β Whether declaration made under s 36 of Charter subject to appellate jurisdiction of High Court conferred by s 73 of Constitution. Constitutional law (Cth) β Courts β State courts β Federal jurisdiction β Diversity jurisdiction β Appellant resident of Queensland at time presentment filed for offence under Drugs Act β Whether County Court and Court of Appeal exercising federal jurisdiction β Operation of s 79 of Judiciary Act 1903 (Cth) in respect of Charter and Drugs Act. Criminal law β Particular offences β Drug offences β Trafficking β Possession for sale or supply β Section 5 of Drugs Act provided that any substance shall be deemed to be in possession of a person so long as it is upon any land or premises occupied by him, unless person satisfies court to the contrary β Section 70(1) of Drugs Act defined "traffick" to include "have in possession for sale" β Section 73(2) of Drugs Act provided that unauthorised possession of traffickable quantity of drug of dependence by a person is prima facie evidence of trafficking by that person β Whether s 5 applicable to offence under s 71AC on basis of "possession for sale" β Whether s 5 applicable to s 73(2) β Whether onus on prosecution to prove appellant had knowledge of presence of drugs β Whether onus on appellant to prove not in possession of drugs. Statutes β Validity β Severance β Section 33 of Charter provided for referral to Supreme Court of questions of law relating to application of Charter or interpretation of statutory provisions in accordance with Charter β Section 37 of Charter required Minister administering statutory provision in respect of which declaration made under s 36(2) to prepare written response and cause copies of declaration and response to be laid before Parliament and published in Government Gazette β Whether, if s 36 of Charter invalid, ss 33 and 37, and balance of Charter, severable from s 36. Statutes β Interpretation β Section 7(2) of Charter provided that a human right may be subject under law only to such reasonable limits as can be demonstrably justified in a free and democratic society β Whether s 7(2) relevant to interpretive process under s 32(1) β Whether s 5 of Drugs Act to be construed to impose evidential rather than legal onus on appellant. Procedure β Costs β Criminal appeal β Departing from general rule for costs where appeal raised significant issues of constitutional law β Whether appellant entitled to special costs order. Words and phrases β "declaration", "diversity jurisdiction", "evidential onus", "incompatibility", "institutional integrity", "interpret", "legal onus", "legislative intention", "matter", "possession", "possession for sale", "resident of a State", "right to be presumed innocent". Constitution, Ch III, ss 73, 75(iv), 77(iii), 109. Commonwealth of Australia Constitution Act 1900 (Imp), s 5. Crimes Act 1914 (Cth), s 4C(2). Criminal Code (Cth), ss 13.1, 13.2, 300.4, 302.4, 302.5. Judiciary Act 1903 (Cth), ss 39(2), 79. Charter of Human Rights and Responsibilities Act 2006 (Vic), ss 7(2), 25(1), 32, Drugs, Poisons and Controlled Substances Act 1981 (Vic), ss 5, 70(1), 71AC, Interpretation of Legislation Act 1984 (Vic), s 6(1). Introduction The main purpose of the Charter of Human Rights and Responsibilities Act 2006 (Vic) ("the Charter") is "to protect and promote human rights"1. The mechanisms by which it seeks to achieve that purpose include2: "setting out the human rights that Parliament specifically seeks to protect and promote"; and "ensuring that all statutory provisions, whenever enacted, are interpreted so far as is possible in a way that is compatible with human rights." The rights are set out in Pt 2 of the Charter and include the right of a person charged with a criminal offence to be presumed innocent3. This appeal, from the the Supreme Court of Victoria, was brought by Court of Appeal of Vera Momcilovic against her conviction for trafficking in a drug of dependence contrary to s 71AC of the Drugs, Poisons and Controlled Substances Act 1981 (Vic) ("the Drugs Act"). Section 5 of the Drugs Act provides that a substance on premises occupied by a person is deemed, for the purposes of the Act, to be in the possession of that person unless the person satisfies the Court to the contrary. The appeal raises a number of issues: . Whether s 5 of the Drugs Act should be interpreted, pursuant to the Charter, as placing on a person charged with an offence under the Act involving possession of drugs, only the evidential burden of introducing evidence tending to show that drugs found on premises occupied by that person were not in that person's possession. . Whether s 5 applies to the offence of trafficking in drugs created by s 71AC of the Drugs Act. . Whether s 71AC is invalid by reason of inconsistency with a provision of the Criminal Code (Cth) ("the Code") creating a similar offence with a different penalty. 1 Charter, s 1(2). 2 Charter, s 1(2)(a) and (b). 3 Charter, s 25(1). . Whether s 36(2) of the Charter, which provides that the Supreme Court may make a declaration that a statutory provision cannot be interpreted consistently with a human right, is valid and amenable to the appellate jurisdiction of this Court. . Whether, given that the appellant was a resident of Queensland at the time she was charged in Victoria, the County Court of Victoria and the Court of Appeal were exercising federal jurisdiction and, if so, whether that has any effect on the outcome of this appeal. There are four key provisions of the Charter in issue in this appeal. The first is s 25(1), which provides: "A person charged with a criminal offence has the right to be presumed innocent until proved guilty according to law." Section 25(1) informs the interpretive principle set out in the second key provision, s 32(1): "So far as it is possible to do so consistently with their purpose, all statutory provisions must be interpreted in a way that is compatible with human rights." The third key provision is s 7(2), which provides that a human right may be subject under law to such reasonable limits as can be justified in a free and democratic society based on human dignity, equality and freedom. The fourth key provision, s 36(2) of the Charter, authorises the Supreme Court, when it is of the opinion that a statutory provision cannot be interpreted consistently with a human right, to make a declaration to that effect. The declaration does not have any legal effect on the outcome of any proceedings before the Court nor on the validity of the statutory provision the subject of the declaration4. The appeal was argued in the Court of Appeal as a case primarily concerned with the application of the interpretive rule under s 32(1) of the Charter, and the presumption of innocence under s 25(1) of the Charter, to s 5 of the Drugs Act. The appellant argued in this Court that, contrary to the finding of the Court of Appeal, s 5 should be interpreted as imposing only an evidential burden on an accused person to negative possession. On that interpretation, if the accused person could point to some evidence tending to show that he or she was not in possession of the substance, the legal burden would rest on the prosecution 4 Charter, s 36(5). of proving possession beyond reasonable doubt. The appellant also argued that s 5, properly construed, does not apply to the offence of trafficking in drugs created by s 71AC. For the reasons that follow, the appellant cannot succeed on her first Charter point relating to the burden of proof imposed by s 5. Neither the common law, nor the interpretive rules contained in the Interpretation of Legislation Act 1984 (Vic) ("the Interpretation Act") and in s 32(1) of the Charter, can transform s 5 of the Drugs Act so as to reduce the legal burden which it imposes to an evidential burden. However, properly construed by reference to the Charter, s 5 does not apply to the trafficking offence with which the appellant was charged so as to lift from the prosecution the burden of proving that she knew of the existence of the drugs she was said to be trafficking. On that basis alone, the appellant succeeds in the appeal and is entitled to a retrial. Her further contention, that the provision creating the offence with which the appellant was charged is inconsistent with similar provisions of the Code and thereby invalid by operation of s 109 of the Constitution, should not be accepted. The Court of Appeal made a declaration under s 36 of the Charter that s 5 of the Drugs Act cannot be interpreted consistently with the presumption of innocence under s 25(1) of the Charter. One of the orders sought by the appellant involved setting aside that declaration. The proposition that this Court should make such an order rested upon two premises: That s 5 could be construed, compatibly with the right of a person accused of a criminal offence to be presumed innocent, so as to impose on that person only an evidential burden. That the Court has jurisdiction to entertain an application to set aside a declaration under s 36. Neither of the premises is satisfied. Although, in my opinion, s 36 validly conferred a non-judicial function on the Court of Appeal, it was not incidental to the Court's judicial function and was not, in any event, amenable to the appellate jurisdiction of this Court under s 73 of the Constitution. I agree, for the reasons given by Gummow J5, that the County Court of Victoria and the Court of Appeal were exercising federal jurisdiction in this case. That does not affect the outcome of the appeal or the orders which should be made by this Court. 5 Reasons of Gummow J at [134]-[139]. Factual and procedural background On 23 July 2008, the appellant was convicted in the County Court of Victoria, after a trial before judge and jury, of the offence of trafficking in a drug of dependence, methylamphetamine, contrary to s 71AC of the Drugs Act. She was sentenced on 20 August 2008 to a term of imprisonment of 27 months with a non-parole period of 18 months. On 29 August 2008, the appellant applied for leave to appeal to the Court of Appeal against her conviction and sentence. Her application was heard on 22 and 23 July 2009, and on 17 March 2010 the Court of Appeal delivered judgment, refusing the application for leave to appeal against conviction, allowing the appeal against sentence and substituting a term of imprisonment of 18 months6. It directed that so much of the sentence as had not already been served, be suspended for a period of 16 months7. On 3 September 2010, the appellant was granted special leave to appeal from the judgment and order of the Court of Appeal. Two undisputed facts in the case were: In January 2006, the appellant owned and occupied an apartment in Melbourne. Her partner, Velimir Markovski, for the most part lived with the appellant in her apartment. On 14 January 2006, police found quantities of substances containing methylamphetamine at the appellant's apartment exceeding 719 grams in total. The purity of methylamphetamine in 326 grams of a substance found in a coffee jar was not determined and consequently that substance was disregarded for the purposes of sentence8. Forensic evidence linked the seized drugs to her partner. There was no forensic evidence linking any of the items to her. On 21 July 2008, the Crown Prosecutor for Victoria filed a presentment in the County Court of Victoria, which was in the following terms: "THE Director of Public Prosecutions presents that VERA MOMCILOVIC at Melbourne in the said State on the 14th day of January 2006 trafficked in a drug of dependence namely Methylamphetamine." 6 R v Momcilovic (2010) 25 VR 436. (2010) 25 VR 436 at 487 [200]. (2010) 25 VR 436 at 485 [190]. At the time that the presentment was filed, the appellant was a resident of Queensland. As explained by Gummow J9, her trial, being a proceeding between a State and a resident of a different State, involved the exercise of federal jurisdiction conferred on the County Court of Victoria by virtue of s 39(2) of the Judiciary Act 1903 (Cth) ("the Judiciary Act") read with s 75(iv) of the Constitution. The appellant denied knowledge of the drug and of her partner's involvement in trafficking. Her partner, who had pleaded guilty to charges brought against him in relation to the drug, admitted at the appellant's trial that the drug was in his possession for sale. He denied that the appellant had been aware of its presence or of his drug trafficking activities. The appellant adduced evidence that she had no prior convictions and was of good character. The trial judge's direction to the jury included the following important propositions10: The prosecution must prove beyond reasonable doubt that the appellant intentionally trafficked in a drug of dependence. The act of trafficking alleged was possession of a drug of dependence for sale. By operation of s 5 of the Drugs Act, the jury must find that the appellant was in possession of the drug at her apartment unless she could prove, on the balance of probabilities, that she did not know it was there. If the jury did not accept that the appellant did not know about the drug, the prosecution must still prove beyond reasonable doubt that the substance trafficked was a drug of dependence and that she intended to traffick a drug of dependence. Absent evidence to the contrary, proof that the appellant possessed no less than six grams of methylamphetamine would be sufficient to enable the jury to find that she intentionally committed an act of trafficking and that what she trafficked was a drug of dependence. Although the jury could use the uncontradicted evidence that the appellant possessed the relevant quantity of drugs to convict her, they could only do so if that evidence, either by itself or together with other evidence, satisfied the jury that the appellant was guilty beyond reasonable doubt of trafficking. The jury must look at all the evidence, including the quantity 9 Reasons of Gummow J at [134]-[139]. 10 The propositions are paraphrased for brevity. of drugs possessed by the appellant, and consider whether they were satisfied beyond reasonable doubt that she intentionally had, in her possession for sale, a prohibited drug. Although the trial judge directed the jury that the prosecution must prove that the appellant intended to traffick in a drug of dependence, he did not expressly direct the jury that before they could return a verdict of guilty they would have to be satisfied that the prosecution had proved beyond reasonable doubt that the appellant knew of the presence of the drug on the premises which she occupied. The directions which were given were consistent with the assumption that s 5 applied to the offence of trafficking in a drug of dependence. The Drugs Act Part V of the Drugs Act is entitled "Drugs of Dependence and Related Matters". It covers ss 70 to 80. The offence with which the appellant was charged is created by s 71AC of the Drugs Act, which provides: "Trafficking in a drug of dependence A person who, without being authorized by or licensed under this Act or the regulations to do so, trafficks or attempts to traffick in a drug of dependence is guilty of an indictable offence and liable to level 4 imprisonment (15 years maximum)." The term "drug of dependence" is defined in s 4(1) of the Drugs Act by reference, inter alia, to drugs set out in column 1 of Pt 3 of Sched 11 to the Act. Methylamphetamine is such a drug. The term "traffick", in relation to a drug of dependence, is defined in s 70(1) to include "have in possession for sale, a drug of dependence". Section 73(1) creates the lesser offence of possession of a drug of dependence11. Section 73(2) provides that unauthorised possession by a person of a drug of dependence in a quantity that is not less than the applicable traffickable quantity "is prima facie evidence of trafficking by that person in that drug of dependence." Section 70(1) defines "traffickable quantity" in relation to a drug of dependence by reference to Sched 11 to the Act. The traffickable 11 The maximum penalties for possession of methylamphetamine are greater (400 penalty units and five years imprisonment) or less (30 penalty units and one year imprisonment) according to whether the offence was or was not committed for any purpose relating to trafficking in that drug: s 73(1)(b) and (c). quantity for methylamphetamine in January 2006 was six grams12. On its face, s 73(2) applies to s 71AC in relation to that aspect of trafficking defined as "possession for sale"13. Central to this appeal was the interaction between the above provisions and s 5 of the Drugs Act, which extends the concept of possession to encompass a deemed possession based upon occupancy of premises in which drugs are present: "Meaning of possession Without restricting the meaning of the word possession, any substance shall be deemed for the purposes of this Act to be in the possession of a person so long as it is upon any land or premises occupied by him or is used, enjoyed or controlled by him in any place whatsoever, unless the person satisfies the court to the contrary." The Drugs Act does not otherwise define "possession", which therefore bears its ordinary meaning. To ascertain that meaning, however, is no ordinary task. The word "possession" embodies "a deceptively simple concept"14 which has never been completely logically and exhaustively defined and may vary according to its statutory context15. It has been described as "always giving rise to trouble."16 Nevertheless, there are certain essential elements of the concept. Possession of a thing ordinarily involves physical custody or control of it17. 12 It was subsequently reduced to three grams: Drugs, Poisons and Controlled Substances (Amendment) Act 2006 (Vic), s 20. 13 Section 73(2) also appears to engage with the penalty provisions in s 73(1)(b) and 14 R v Boyesen [1982] AC 768 at 773 per Lord Scarman. 15 Tabe v The Queen (2005) 225 CLR 418 at 423 [7] per Gleeson CJ; [2005] HCA 59, quoting Earl Jowitt in United States v Dollfus Mieg et Cie SA [1952] AC 582 at 605. See generally Warner v Metropolitan Police Commissioner [1969] 2 AC 256 at 280-282 per Lord Reid, 286-289 per Lord Morris of Borth-y-Gest, 298-300 per Lord Guest, 303-306 per Lord Pearce, 309-311 per Lord Wilberforce. 16 Towers & Co Ltd v Gray [1961] 2 QB 351 at 361 per Lord Parker CJ. 17 Hedberg v Woodhall (1913) 15 CLR 531 at 535 per Griffith CJ, Barton J agreeing at 536; [1913] HCA 2; Moors v Burke (1919) 26 CLR 265 at 268-269; [1919] HCA 32; Williams v Douglas (1949) 78 CLR 521 at 526-527 per Latham CJ, Dixon and McTiernan JJ; [1949] HCA 40; Tabe v The Queen (2005) 225 CLR 418 at 423 [7] (Footnote continues on next page) Possession has also long been recognised as importing a requirement, independent of common law mens rea, that the person in possession of something knows that he or she has it in his or her custody or control18. As Gibbs CJ said in He Kaw Teh v The Queen19: "where a statute makes it an offence to have possession of particular goods, knowledge by the accused that those goods are in his custody will, in the absence of a sufficient indication of a contrary intention, be a necessary ingredient of the offence, because the words describing the offence ('in his possession') themselves necessarily import a mental element. In such a case it is unnecessary to rely on the common law presumption that mens rea is required." The extent of the knowledge of a possessor inherent in the term "possession" used in a statutory context is "imprecise"20. It depends upon the statute. It need not be explored here. It is not necessary to consider the circumstances in which the word "possession" used in a statute implies knowledge of the nature of the thing possessed such as the identity of a drug. At the very least the knowledge imported by the use of the word "possession" in s 5 is knowledge of the existence of the substance possessed21. That knowledge is therefore deemed to exist as an incident of the deemed possession. The deemed possession may be negatived by negativing that knowledge. Whether it is necessary for the accused to go that far under s 5, interpreted in the light of the Charter, is one of the issues in this case. Two questions relevant to s 5 arise in this appeal. The first question is whether the section casts a legal onus on an accused person to negative possession of drugs in premises occupied by the accused. That was the view of per Gleeson CJ, citing Director of Public Prosecutions v Brooks [1974] AC 862 at 18 Irving v Nishimura (1907) 5 CLR 233 at 237 per Griffith CJ, Barton J agreeing at 237; [1907] HCA 50. 19 (1985) 157 CLR 523 at 539, Mason J agreeing at 546; [1985] HCA 43. See also at 589 per Brennan J, 599 per Dawson J. 20 Tabe v The Queen (2005) 225 CLR 418 at 423 [7] per Gleeson CJ. 21 This reflects the common law: He Kaw Teh v The Queen (1985) 157 CLR 523 at 599 per Dawson J, citing Griffith CJ in Irving v Nishimura (1907) 5 CLR 233 at 237; Tabe v The Queen (2005) 225 CLR 418 at 446 [100]-[101] per Hayne J, 459 [143] per Callinan and Heydon JJ; Warner v Metropolitan Police Commissioner [1969] 2 AC 256 at 305 per Lord Pearce; HKSAR v Hung Chan Wa (2006) 9 HKCFAR 614 at 642 [65] per Sir Anthony Mason NPJ. is whether the Court of Appeal. The appellant's contention is that s 5, interpreted compatibly with s 25(1) of the Charter, imposes only an evidential burden requiring the accused to do no more than introduce evidence capable of negativing possession22. the deemed The second question "possession" in s 5 can be invoked by the prosecution and linked to the "traffickable quantity" provision in s 73(2) to establish "possession for sale". The term "traffick", as defined in s 70 and as used in s 71AC, includes having a drug of dependence in possession for sale. Both questions are to be answered by reference to common law and statutory rules of interpretation, including the interpretive rule created by s 32(1) of the Charter. Before considering those questions, however, it is necessary to refer to two additional provisions of the Charter: ss 32(2) and 7(2). The first expressly authorises resort to international law and decisions of international and foreign domestic courts relevant to human rights. The second declares that human rights may be subject to reasonable limits and sets out criteria for determining whether a limit on a human right is reasonable. The use of international law and the decisions of international and foreign domestic courts In addition to the interpretive rule created by s 32(1) of the Charter, s 32(2) provides: law and judgments of domestic, foreign and "International international courts and tribunals relevant to a human right may be considered in interpreting a statutory provision." the Section 32(2) does not authorise a court to do anything which it cannot already do. The use of comparative materials in judicial decision-making in Australia is not novel23. Courts may, without express statutory authority, refer to the judgments of international and foreign domestic courts which have logical or analogical relevance to the interpretation of a statutory provision. If such a judgment concerns a term identical to or substantially the same as that in the statutory provision being interpreted, then its potential logical or analogical relevance is apparent. The exercise by a court of its capacity to refer to such 22 Purkess v Crittenden (1965) 114 CLR 164 at 167-168 per Barwick CJ, Kitto and Taylor JJ; [1965] HCA 34; Braysich v The Queen (2011) 85 ALJR 593 at 604-605 [33] per French CJ, Crennan and Kiefel JJ; 276 ALR 451 at 464; [2011] HCA 14. 23 See eg Kiefel, "Comparative Analysis in Judicial Decision-Making: The Australian Experience", (2011) 75(2) The Rabel Journal of Comparative and International Private Law 354; Saunders, The Constitution of Australia: A Contextual Analysis, (2011) at 102-106. material does not require the invocation of principles of interpretation affecting statutes giving effect to international treaties or conventions or specifically adopting their terminology24. Nor does it involve the application of the common law principle that statutes should be interpreted and applied, so far as their language permits, so as not to be inconsistent with international law or conventions to which Australia is a party25. Section 32(2) does not create a mechanism by which international law or interpretive principles affecting international treaties become part of the law of Victoria. On the other hand, it does not exclude the application of common law principles of interpretation relevant to a statute which adopts, as the Charter has, the terminology of an international convention. The "right" declared by s 25(1) of the Charter is expressed in terms found in Art 14(2) of the International Covenant on Civil and Political Rights (1966) ("the ICCPR"), Art 6(2) of the European Convention for the Protection of Human Rights and Fundamental Freedoms (1950) ("the ECHR") and Art 8(2) of the American Convention on Human Rights (1969) ("the ACHR"). It is found in other conventions and foreign domestic laws and constitutions26. Judgments of international and foreign domestic courts may be consulted in determining whether the right to be presumed innocent, declared in s 25(1), should be interpreted as congruent with the common law presumption of innocence or as extending beyond it. The content of a human right will affect the potential application of the interpretive requirement in s 32(1) in relation to that right. 24 eg Applicant A v Minister for Immigration and Ethnic Affairs (1997) 190 CLR 225; [1997] HCA 4 concerning the application of Art 31 of the Vienna Convention on the Law of Treaties (1969); Pearce and Geddes, Statutory Interpretation in Australia, 7th ed (2011) at 43-46 [2.20]-[2.21]. 25 Jumbunna Coal Mine NL v Victorian Coal Miners' Association (1908) 6 CLR 309 at 363 per O'Connor J; [1908] HCA 95; Zachariassen v The Commonwealth (1917) 24 CLR 166 at 181 per Barton, Isaacs and Rich JJ; [1917] HCA 77; Polites v The Commonwealth (1945) 70 CLR 60 at 68-69 per Latham CJ, 77 per Dixon J, 80-81 per Williams J; [1945] HCA 3; Minister for Foreign Affairs and Trade v Magno (1992) 37 FCR 298 at 304-305 per Gummow J. See also Garland v British Rail Engineering Ltd [1983] 2 AC 751 at 771; R v Secretary of State for the Home Department; Ex parte Brind [1991] 1 AC 696 at 747-748 per Lord Bridge of Harwich. 26 African Charter on Human and Peoples' Rights (1981), Art 7(1)(b); Arab Charter on Human Rights (2004), Art 16; Canadian Charter of Rights and Freedoms (1982), s 11(d); New Zealand Bill of Rights Act 1990 (NZ), s 25(c); Constitution of the Republic of South Africa (1996), s 35(3)(h). It is also imported by reference into the Human Rights Act 1998 (UK), discussed later in these reasons. Nevertheless, international and foreign domestic judgments should be consulted with discrimination and care. Such judgments are made in a variety of legal systems and constitutional settings which have to be taken into account when reading them. What McHugh J said in Theophanous v The Herald & Weekly Times Ltd27 is applicable in this context: "The true meaning of a legal text almost always depends on a background of concepts, principles, practices, facts, rights and duties which the authors of the text took for granted or understood, without conscious advertence, by reason of their common language or culture." Despite our common legal heritage, that general proposition is relevant today in reading decisions of the courts of the United Kingdom, especially in relation to the Human Rights Act 1998 (UK) ("the HRA"). It is appropriate to take heed not only of Lord Bingham of Cornhill's remark about the need for caution "in considering different enactments decided under different constitutional arrangements"28, but also his observation that "the United Kingdom courts must take their lead from Strasbourg."29 The same general caution applies to the use of comparative law materials in construing the interpretive principle in s 32(1). In this appeal what was said to be the strong or remedial approach taken by the House of Lords30 to the application of the United Kingdom counterpart to s 32(1) of the Charter, namely s 3 of the HRA, was at the forefront of the appellant's submissions. However, s 3 differs textually from s 32(1) and finds its place in a different constitutional setting. Reasonable limits β s 7 of the Charter Section 7, which appears in Pt 2 of the Charter, recognises the possibility of justifiable limitations upon the enjoyment of the rights declared in the Charter. It provides: "Human rights β what they are and when they may be limited This Part sets out the human rights that Parliament specifically seeks to protect and promote. 27 (1994) 182 CLR 104 at 196; [1994] HCA 46. 28 Sheldrake v Director of Public Prosecutions [2005] 1 AC 264 at 305 [33]. 29 [2005] 1 AC 264 at 305 [33]. 30 Ghaidan v Godin-Mendoza [2004] 2 AC 557. (2) A human right may be subject under law only to such reasonable limits as can be demonstrably justified in a free and democratic society based on human dignity, equality and freedom, and taking into account all relevant factors including β the nature of the right; and the importance of the purpose of the limitation; and the nature and extent of the limitation; and the relationship between the limitation and its purpose; and any less restrictive means reasonably available to achieve the purpose that the limitation seeks to achieve. (3) Nothing in this Charter gives a person, entity or public authority a right to limit (to a greater extent than is provided for in this Charter) or destroy the human rights of any person." One of the issues in this appeal was whether s 7(2) has any part to play in the interpretation of statutes pursuant to s 32(1). On one view, a statutory provision limiting the enjoyment of a human right can nevertheless be compatible with that human right having regard to the criteria set out in s 7(2). Another view, that taken by the Court of Appeal, is that s 7(2) has no part to play in the interpretation of statutes pursuant to s 32(1), but is relevant to the question whether a declaration should be made under s 36(2) that the statute could not be interpreted consistently with a human right. Section 7(2) sets out criteria for determining whether a limit imposed by law on a human right is "reasonable". As was said, in the Second Reading Speech for the Charter, it embodies "what is known as the 'proportionality test'."31 That test is of a kind well known to European jurisdictions and originates in German law and rule of law concepts, and may have application in particular contexts in Australia32. Neither the ICCPR nor the ECHR contains a general 31 Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 4 May 2006 at 32 Reasons of Crennan and Kiefel JJ at [549]-[556]. The application of proportionality in the context of judicial review of legislation for constitutional validity was discussed by Kiefel J in Rowe v Electoral Commissioner (2010) 85 ALJR 213 at 290-297 [424]-[466]; 273 ALR 1 at 103-112; [2010] HCA 46. "reasonable limitations" clause like s 7(2)33. The European Court of Human Rights has implied a similar qualification into Art 6(2) of the ECHR involving the application of a proportionality criterion. It has been described by the Privy Council as an implied "flexibility" in the Article34. The qualification appears to have been based on the reality acknowledged by the European Court of Human Rights that "[p]resumptions of fact or of law operate in every legal system."35 That qualification has been adopted in the United Kingdom in the application of the HRA, which applies to the laws of the United Kingdom the human rights set out in the ECHR36. The decisions of the European Court of Human Rights and the United Kingdom courts may be a source of guidance in determining whether particular limitations on the right to be presumed innocent are reasonable. They are, however, of little assistance in determining the function of s 7(2) in the Charter. The logical structure of s 7(2) presupposes the existence of the human rights protected and promoted by the Charter and declares the kinds of limits to which they may be subjected under the law. On its face it does not affect the content of those rights. They are the subjects of the limits to which it refers. It qualifies the extent of their protection and promotion. It has the appearance of a parliamentary reservation, which may be applied from time to time by leaving unamended existing legislation which encroaches on human rights or by enacting new legislation which does so. By way of example, in 2009 the Statute Law Amendment (Charter of Human Rights and Responsibilities) Act 2009 (Vic) was enacted. Its "main purpose" was "to make amendments to various Acts to ensure compatibility with the Charter of Human Rights and Responsibilities."37 It replaced reverse legal burdens of proof in three statutes with evidential burdens 33 This is by way of contrast with the general limitations in Art 29(2) of the Universal Declaration of Human Rights (1948) and Art 4 of the International Covenant on Economic, Social and Cultural Rights (1966). 34 Attorney-General of Hong Kong v Lee Kwong-kut [1993] AC 951 at 969. 35 Salabiaku v France (1988) 13 EHRR 379 at 388. See also Hoang v France (1992) 16 EHRR 53; Janosevic v Sweden (2002) 38 EHRR 473. 36 Sheldrake v Director of Public Prosecutions [2005] 1 AC 264 at 297 [21] per Lord Bingham. See also, with respect to Art 11(1) of the Hong Kong Bill of Rights Ordinance 1991 (HK), Attorney-General of Hong Kong v Lee Kwong-kut [1993] AC 951 at 969-970. See generally Emmerson, Ashworth and Macdonald (eds), Human Rights and Criminal Justice, 2nd ed (2007), Ch 9. 37 Statute Law Amendment (Charter of Human Rights and Responsibilities) Act 2009 (Vic), s 1. and removed them entirely from offence provisions in another. However, it left the reverse onus provisions of other statutes unamended38. The question is β what operation does s 7(2) have beyond declaring the general character of limits on the Victorian Parliament's commitment to the protection and promotion of human rights set out in the Charter? In the Second Reading Speech for the Charter, Pt 2, which includes s 7, was said to reflect the proposition "that rights should not generally be seen as absolute but must be balanced against each other and against other competing public interests."39 Section 7 was described as "a general limitations clause that lists the factors that need to be taken into account in the balancing process."40 It would "assist courts and government in deciding when a limitation arising under the law is reasonable and demonstrably justified in a free and democratic society."41 Where a right is so limited, "action taken in accordance with that limitation will not be prohibited under the charter, and is not incompatible with the right."42 The Second Reading Speech did not spell out the context in which courts would be called on to make such decisions. The Court of Appeal held that justification of a limit on a human right "becomes relevant only after the meaning of the challenged provision has been established."43 The Court said that44: "the emphatic obligation which s 32(1) imposes β to interpret statutory provisions so far as possible compatibly with Charter rights β is directed at the promotion and protection of those rights as enacted in the Charter." 38 Section 5 of the Drugs Act was not amended. Nor was s 145 of the Firearms Act 1996 (Vic), which is a similar provision relating to the possession of firearms. 39 Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 4 May 2006 at 40 Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 4 May 2006 at 41 Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 4 May 2006 at 42 Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 4 May 2006 at 43 (2010) 25 VR 436 at 465 [105]. 44 (2010) 25 VR 436 at 466 [107]. The Court rejected the possibility that Parliament was to be taken to have intended "that s 32(1) was only to operate where necessary to avoid what would otherwise be an unjustified infringement of a right."45 On the approach taken by the Court of Appeal, s 7(2) is to be considered only after the statutory provision under examination has been interpreted by applying s 32(1) of the Charter in conjunction with common law principles of statutory interpretation and the Interpretation Act46. The constitutions of Canada and South Africa constrain legislative power from infringing specified human rights and freedoms, subject to general provisions authorising the imposition of reasonable limitations on the enjoyment of those rights. In those jurisdictions the first question to be asked about an impugned law is whether it limits one of the protected rights. If the answer is in the affirmative, the second question is whether the law is nevertheless valid because it is justified as a reasonable limitation provision47. Section 7(2) was said, in the Explanatory Memorandum for the Charter, to have been modelled particularly on s 36 of the Constitution of South Africa. One approach to ascertaining the function of s 7(2) is to treat the reference to human rights "compatible" interpretation in s 32(1) as an analogue of the constitutional process for determining infringement. On the Canadian and South African authorities, the proportionality question goes to validity. It has no part to play in interpretation. That approach is consistent with the textual detachment of s 7(2) from the rights set out in the Charter and, thereby, from the interpretive rule in The approach taken in Canada and South Africa has been described as "distinct from the traditional common law approach to rights, which carves out a space for justified interference in fundamental rights by limiting the scope of the 45 (2010) 25 VR 436 at 466 [107]. 46 (2010) 25 VR 436 at 446 [35], 465-466 [106]. 47 This approach was taken in the application of s 1 of the Canadian Charter of Rights and Freedoms: R v Oakes [1986] 1 SCR 103, a decision involving a reverse onus provision in the Narcotic Control Act, which has since been followed in that country. See R v Chaulk [1990] 3 SCR 1303 at 1339-1345 per Lamer CJ, 1372- 1393 per Wilson J. Section 36 of the Bill of Rights of the Constitution of the Republic of South Africa was applied in a similar way in Ex parte Minister of Safety and Security: In re S v Walters 2002 (4) SA 613 at 630-631 [26]-[27]; S v Thebus 2003 (6) SA 505 at 525-526 [29]. See also Currie and de Waal (eds), The New Constitutional and Administrative Law, (2002), vol 1 at 339; van Wyk et al (eds), Rights and Constitutionalism: The New South African Legal Order, (1995) rights themselves and requires those asserting their rights to show that their claims fall within the more limited scope of the relevant fundamental right."48 The New Zealand Bill of Rights Act 1990 (NZ) ("the NZBOR"), like the Charter, sets out rights and freedoms. Section 6, which is analogous to s 32(1) of the Charter, requires that preference be given to a meaning of an enactment "that is consistent with the rights and freedoms contained in this Bill of Rights". Section 5 of the NZBOR, like s 7(2) of the Charter, provides that the rights and freedoms in the Bill may be "subject only to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society." In R v Hansen49, a majority of the Supreme Court of New Zealand held that if the natural meaning of a statutory provision is prima facie inconsistent with a right set out in the NZBOR, the court should apply s 5. If the natural meaning can be justified under that section, there is no inconsistency for the purposes of s 6. If the natural meaning cannot be justified, then the interpretive process under s 6 must be invoked to attempt to identify a preferred alternative meaning consistent with the NZBOR. A premise underlying that approach, articulated by Blanchard J, was that reasonable limitations of the kind justified under s 5 are constraints upon the rights and freedoms in the NZBOR50. Elias CJ, in dissent, applied the approaches adopted by the Supreme Court of Canada and the Constitutional Court of South Africa. Her Honour held that in the context of the NZBOR, s 5 is directed to those making or advising on the making of legal prescriptions potentially limiting the enunciated rights and freedoms51. The appellant submitted that the question whether a statutory provision, interpreted according to its ordinary meaning, imposes a reasonable limit on a human right within the meaning of s 7(2) is an element of the question whether the provision is compatible with that right. If it is not compatible then the interpretive principle in s 32(1) is engaged. This submission was linked to the appellant's contention that s 32 embodies a "strong rule of construction" closely analogous to that found in the HRA. On the appellant's submissions s 32(1) is similar to statutory rules of interpretation which provide for statutory provisions to be read down or severed so as to avoid or minimise invalidity52. It should not, it was said, be seen as merely codifying the principle of legality. 48 Klug, The Constitution of South Africa: A Contextual Analysis, (2010) at 117. 49 [2007] 3 NZLR 1. 50 [2007] 3 NZLR 1 at 27 [59]. See also at 36-37 [88]-[92] per Tipping J, 65-66 [190]-[192] per McGrath J; cf at 83 [266] per Anderson J. 51 [2007] 3 NZLR 1 at 15 [23]. 52 Acts Interpretation Act 1901 (Cth), s 15A; Interpretation Act, s 6. The second respondent, the Attorney-General for Victoria, made a submission similar to that made by the appellant and pointed to the linkage in the Second Reading Speech between s 7(2) and the concept of compatibility. However, the same linkage was not made in the Explanatory Memorandum and, as already noted, is not made in the text of the Charter. Ministerial words in the Second Reading Speech cannot supply that statutory connection53. The third respondent, the Victorian Equal Opportunity and Human Rights Commission, pointed to ss 28 and 38 of the Charter. Section 28 requires that a Member of Parliament introducing a Bill into the Parliament prepare a "statement of compatibility" to be laid before the House of Parliament into which the Bill is introduced. Section 38 makes it unlawful for a public authority to "act in a way that is incompatible with a human right". The third respondent submitted that the term "compatible with human rights" should be given a consistent meaning throughout the Charter. The argument for consistent construction may be accepted, but it does not require the incorporation of s 7(2) into the test for compatibility. Section 28 imposes no such requirement. A s 28 statement disclosing incompatibility between a proposed Bill and human rights may also set out the justification for that incompatibility under s 7(2) or leave that justification for parliamentary debate. And as the Human Rights Law Centre ("the Centre")54 submitted, s 38(2) and (3) delimit the field of unlawfulness in s 38(1). Section 38(1) does not apply "if, as a result of a statutory provision or a provision made by or under an Act of the Commonwealth or otherwise under law, the public authority could not reasonably have acted differently or made a different decision."55 The example given at the foot of s 38(2) is "[w]here the public authority is acting to give effect to a statutory provision that is incompatible with a human right."56 The Centre contended that the provenance and purpose of s 7(2) supported the approach taken by the Court of Appeal. It traced the ancestry of the subsection through s 5 of the NZBOR and s 36 of the Constitution of the Republic of South Africa to the inspiration for those provisions in s 1 of the 53 Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476 at 499 [55] per Gaudron, McHugh, Gummow, Kirby and Hayne JJ; [2003] HCA 2; Saeed v Minister for Immigration and Citizenship (2010) 241 CLR 252 at 264-265 [31] per French CJ, Gummow, Hayne, Crennan and Kiefel JJ; [2010] HCA 23. 54 Intervening as amicus curiae. 55 Charter, s 38(2). 56 An example at the foot of a statutory provision forms part of the Act: Interpretation Act, s 36(3A). Canadian Charter of Rights and Freedoms. The Centre pointed out that in R v Oakes57 the Supreme Court of Canada expressly declined to consider s 1 of the Canadian Charter when interpreting a reverse onus provision. It applied s 1 only when considering whether the impugned law should be upheld. The Centre submitted the reasonableness of legislation is not an interpretive function. Section 7(2) cannot, it was said, form part of the interpretive process because the proportionality assessment that it requires cannot be undertaken until a construction has been reached. These submissions made by the Centre should be accepted. that a proportionality assessment of The logical structure of s 7(2) is such that it cannot be incorporated into the content of the rights and freedoms set out in the Charter. The compatibility which is to be sought in applying s 32(1) is compatibility "with human rights". Section 7(2) cannot inform the interpretive process which s 32(1) mandates. The question whether a relevant human right is subject to a limit which answers the criteria in s 7(2) can only arise if the statutory provision under consideration imposes a limit on its enjoyment. Whether it does so or not will only be determined after the interpretive exercise is completed. As the question of reasonable limitations on rights under the Charter is dealt with by s 7(2), it is neither necessary nor appropriate to find in s 25(1) the implied "flexibility" found by the European Court of Human Rights in the presumption of innocence under Art 6(2) of the ECHR. On the preceding logic, s 7(2) will also be excluded from consideration by the Supreme Court when determining, under s 36(2), whether a statutory provision cannot be interpreted consistently with a human right. Section 7(2) could still have a role to play in informing the discretion of the Court to decline to make a declaration of inconsistent interpretation under s 36(2). There would, after all, be no point in advising the Parliament of an inconsistency founded on a limitation that was "reasonable" according to the criteria in s 7(2). In the event, the justification of limitations on human rights is a matter for the Parliament. That accords with the constitutional relationship between the Parliament and the judiciary which, to the extent that it can validly be disturbed, is not to be so disturbed except by clear words. The Charter does not have that effect. 57 [1986] 1 SCR 103. Section 32(1) β the approach to interpretation Section 32(1) takes its place in a milieu of principles and rules, statutory and non-statutory, relating to the interpretation of statutes. It also takes its place in a constitutional tradition inherited from the United Kingdom in which58: "it has been recognised since the 17th century that it is the task of the judiciary in interpreting an Act to seek to interpret it 'according to the intent of them that made it'." The interpretation of a law of the State of Victoria by the Supreme Court of Victoria is "an expression of the constitutional relationship between the arms of government with respect to the making, interpretation and application of laws."59 In that context "[a]scertainment of legislative intention is asserted as a statement of compliance with the rules of construction, common law and statutory, which have been applied to reach the preferred results and which are known to parliamentary drafters and the courts."60 In that way, the duty of the Court defined in Project Blue Sky Inc v Australian Broadcasting Authority61 is discharged: "to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have." There are different ways of undertaking the interpretive task and, in a particular case, they may yield different answers to the same questions62. But if the words of a statute are clear, so too is the task of the Court in interpreting the statute with fidelity to the Court's constitutional function. The meaning given to the words must be a meaning which they can bear. As Lord Reid said in Jones v Director of Public Prosecutions63: 58 Stock v Frank Jones (Tipton) Ltd [1978] 1 WLR 231 at 234 per Viscount Dilhorne; [1978] 1 All ER 948 at 951, quoting 4 Co Inst 330. 59 Zheng v Cai (2009) 239 CLR 446 at 455 [28]; [2009] HCA 52. 60 Lacey v Attorney-General (Qld) (2011) 85 ALJR 508 at 521 [43] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ; 275 ALR 646 at 661; [2011] HCA 61 (1998) 194 CLR 355 at 384 [78] per McHugh, Gummow, Kirby and Hayne JJ; [1998] HCA 28. 62 Corcoran, "Theories of Statutory Interpretation", in Corcoran and Bottomley (eds), Interpreting Statutes, (2005) 8 at 30. 63 [1962] AC 635 at 662. "It is a cardinal principle applicable to all kinds of statutes that you may not for any reason attach to a statutory provision a meaning which the words of that provision cannot reasonably bear. If they are capable of more than one meaning, then you can choose between those meanings, but beyond that you must not go." In an exceptional case the common law allows a court to depart from grammatical rules and to give an unusual or strained meaning to statutory words where their ordinary meaning and grammatical construction would contradict the apparent purpose of the enactment. The court is not thereby authorised to legislate64. That common law approach is not open in this case as there is no disconformity between the language of s 5 of the Drugs Act and its purpose, or that of the Act as a whole65. Statutory provisions applicable to the interpretation of Victorian statutes are found in the Interpretation Act and include the requirement, in s 35(a), common to all Australian jurisdictions, that a construction that would promote the purpose or object underlying an Act shall be preferred to a construction that would not promote that purpose or object. The Court of Appeal drew a distinction between the application of s 32(1) of the Charter, which requires an interpretation which is consistent with the purpose of the relevant statutory provision, and s 35(a) of the Interpretation Act, which mandates a construction promoting the purpose or object of the Act as a whole66. The Court held that the result of its application of s 32(1) to s 5 of the Drugs Act would not have been different if s 32(1) were constrained only by the underlying purpose of the Act67. In any event, the purpose of a statutory provision, which constrains permissible interpretations under s 32(1), will ordinarily be a purpose that is consistent with and promotes the overall purpose of the Act in which the provision appears. It is not necessary to explore further the interaction between s 32(1) of the Charter and s 35(a) of the Interpretation Act having regard to the operation of s 32(1) in this case. Before turning to that operation it is desirable to consider the common law principle of legality. The common law in its application to the interpretation of statutes helps to define the boundaries between the judicial and legislative functions. That is a 64 Minister for Immigration and Citizenship v SZJGV (2009) 238 CLR 642 at 651-652 [9] per French CJ and Bell J; [2009] HCA 40. 65 See also Reasons of Crennan and Kiefel JJ at [580]-[581]. 66 (2010) 25 VR 436 at 457-458 [75]-[76]. 67 (2010) 25 VR 436 at 467 [114]. reflection of its character as "the ultimate constitutional foundation in Australia"68. It also underpins the attribution of legislative intention on the basis that legislative power in Australia, as in the United Kingdom, is exercised in the setting of a "liberal democracy founded on the principles and traditions of the common law."69 It is in that context that this Court recognises the application to statutory interpretation of the common law principle of legality. The principle of legality has been applied on many occasions by this Court. It is expressed as a presumption that Parliament does not intend to interfere with common law rights and freedoms except by clear and unequivocal language for which Parliament may be accountable to the electorate. It requires that statutes be construed, where constructional choices are open, to avoid or minimise their encroachment upon rights and freedoms at common law70. The range of rights and freedoms covered by the principle has frequently been qualified by the adjective "fundamental". There are difficulties with that designation71. It might be better to discard it altogether in this context. The legislative power72. principle of Nevertheless, the principle is a powerful one. It protects, within constitutional limits, commonly accepted "rights" and "freedoms". It applies to the rules of legality, after all, does not constrain 68 Wik Peoples v Queensland (1996) 187 CLR 1 at 182 per Gummow J; [1996] HCA 69 R v Secretary of State for the Home Department; Ex parte Pierson [1998] AC 539 at 587 per Lord Steyn. 70 Potter v Minahan (1908) 7 CLR 277 at 304 per O'Connor J; [1908] HCA 63; Bropho v Western Australia (1990) 171 CLR 1 at 18 per Mason CJ, Deane, Dawson, Toohey, Gaudron and McHugh JJ; [1990] HCA 24; Coco v The Queen (1994) 179 CLR 427 at 436-437 per Mason CJ, Brennan, Gaudron and McHugh JJ; [1994] HCA 15; Electrolux Home Products Pty Ltd v Australian Workers' Union (2004) 221 CLR 309 at 329 [21] per Gleeson CJ; [2004] HCA 40. 71 Finn, "Statutes and The Common Law: The Continuing Story", in Corcoran and Bottomley (eds), Interpreting Statutes, (2005) 52 at 56-57, citing Malika Holdings Pty Ltd v Stretton (2001) 204 CLR 290 at 298-299 [27]-[29] per McHugh J; [2001] HCA 14. 72 Whether there are certain common law rights and freedoms which constrain legislative power is an unexplored question: South Australia v Totani (2010) 242 CLR 1 at 29 [31] per French CJ; [2010] HCA 39. See also Reasons of Crennan and Kiefel JJ at [562]. For a discussion of common law constraints on the executive power see Harris, "Government 'Third-Source' Action and Common Law Constitutionalism", (2010) 126 Law Quarterly Review 373. procedural fairness in the exercise of statutory powers73. It applies to statutes affecting courts in relation to such matters as procedural fairness and the open court principle, albeit its application in such cases may be subsumed in statutory rules of interpretation which require that, where necessary, a statutory provision be read down so as to bring it within the limits of constitutional power74. It has also been suggested that it may be linked to a presumption of consistency between statute law and international law and obligations75. The common law "presumption of innocence" in criminal proceedings is an important incident of the liberty of the subject. The principle of legality will afford it such protection, in the interpretation of statutes which may affect it, as the language of the statute will allow. A statute, which on one construction would encroach upon the presumption of innocence, is to be construed, if an that alternative construction be available, so as encroachment. On that basis, a statute which could be construed as imposing either a legal burden or an evidential burden upon an accused person in criminal proceedings will ordinarily be construed as imposing the evidential burden. to avoid or mitigate The rights and freedoms of the common law should not be thought to be unduly fragile. They have properly been described as "constitutional rights, even if β¦ not formally entrenched against legislative repeal."76 Nevertheless, statutory language may leave open only an interpretation or interpretations which infringe one or more rights or freedoms. The principle of legality, expressed as it is in terms of presumed legislative intention, is of no avail against such language. The Court of Appeal held, in effect, that s 32(1) does not establish a new paradigm of interpretation. It does not require courts, in the pursuit of human rights compatibility, to depart from the ordinary meaning of the statutory provision and hence from the intention of the parliament which enacted the 73 Saeed v Minister for Immigration and Citizenship (2010) 241 CLR 252 at 258-259 [11]-[15] per French CJ, Gummow, Hayne, Crennan and Kiefel JJ. 74 K-Generation Pty Ltd v Liquor Licensing Court (2009) 237 CLR 501 at 520-521 [47]-[49] per French CJ; [2009] HCA 4, and cases there cited. 75 Lacey, "The Judicial Use of Unincorporated International Conventions in Administrative Law: Charlesworth et al (eds), The Fluid State: International Law and National Legal Systems, (2005) 82 at 84-85. Back-Doors, Platitudes and Window-Dressing", 76 Allan, "The Common Law as Constitution: Fundamental Rights and First Principles", in Saunders (ed), Courts of Final Jurisdiction: The Mason Court in Australia, (1996) 146 at 148. statute77. The Court referred to the Second Reading Speech, in which s 32(1) was described as a provision which "recognises the traditional role for the courts in interpreting legislation"78. The Court emphasised the importance of certainty in the interpretation of legislation pursuant to s 32(1)79. It observed, correctly in my respectful opinion, that if Parliament had intended to make a change in the rules of interpretation accepted by all areas of government in Victoria "its intention to do so would need to have been signalled in the clearest terms."80 This application of the principle of legality, to a propounded disturbance of the established constitutional relationship between the Victorian judiciary and legislature, was an expression of common law constitutionalism. The appellant submitted that s 32 was intended to enact a "strong rule of construction" exemplified in s 3(1) of the HRA81. Section 32, it was said, should not be interpreted as merely codifying the common law principle of legality. The analogical utility of s 3 of the HRA is undercut by its particular constitutional history and by its differing characterisations in the United Kingdom courts. Lord Hoffmann in R v Secretary of State for the Home Department; Ex parte Simms82 characterised s 3 as an express enactment of the principle of legality. In v Godin-Mendoza83, Lord Rodger of Earlsferry Ghaidan adopted Lord Hoffmann's characterisation84. Lord Hoffmann returned to his theme in R (Wilkinson) v Inland Revenue Commissioners85, explaining s 3 of the HRA in the following way: 77 R v Momcilovic (2010) 25 VR 436 at 459 [82]. 78 (2010) 25 VR 436 at 458 [81], citing Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 4 May 2006 at 1293. 79 (2010) 25 VR 436 at 463 [97]. 80 (2010) 25 VR 436 at 464 [100]. 81 That subsection provides: "So far as it is possible to do so, primary legislation and subordinate legislation must be read and given effect in a way which is compatible with the Convention rights." 82 [2000] 2 AC 115 at 132. 84 [2004] 2 AC 557 at 593 [104]. 85 [2005] 1 WLR 1718 at 1723 [17]; [2006] 1 All ER 529 at 535. "The important change in the process of interpretation which was made by section 3 was to deem the Convention to form a significant part of the background against which all statutes, whether passed before or after the 1998 Act came into force, had to be interpreted. Just as the 'principle of legality' meant that statutes were construed against the background of human rights subsisting at common law, so now, section 3 requires them to be construed against the background of Convention rights. There is a strong presumption, arising from the fundamental nature of Convention rights, that Parliament did not intend a statute to mean something which would be incompatible with those rights." (reference omitted) The other Law Lords in Wilkinson agreed with Lord Hoffmann. That approach, however, was not consistent with the majority reasoning in Ghaidan which had supported a view of s 3 as travelling beyond the limits of the principle of legality. The section was described in that earlier decision as "apt to require a court to read in words which change the meaning of the enacted legislation, so as to make it Convention-compliant."86 Lord Steyn described its function as "remedial"87. Metaphors were deployed to patrol these broadly defined boundaries. They required that the application of s 3 be "compatible with the underlying thrust of the legislation"88, that words implied must "go with the grain of the legislation"89 and that the interpretation adopted not remove "the very core and essence, the 'pith and substance'"90 or violate a "cardinal principle"91 of the legislation. The interpretive power, it was said, did not call for "legislative deliberation"92. Notwithstanding the difference in approach between Ghaidan and the later case of Wilkinson, it is Ghaidan which, as the third respondent submitted, is routinely cited and applied93 and treated as authoritative in leading United 86 [2004] 2 AC 557 at 571-572 [32] per Lord Nicholls of Birkenhead. 87 [2004] 2 AC 557 at 577 [49]. 88 [2004] 2 AC 557 at 572 [33] per Lord Nicholls. 89 [2004] 2 AC 557 at 572 [33] per Lord Nicholls, quoting Lord Rodger at 601 [121]. 90 [2004] 2 AC 557 at 597 [111] per Lord Rodger. 91 [2004] 2 AC 557 at 598 [113] per Lord Rodger. 92 [2004] 2 AC 557 at 572 [33] per Lord Nicholls. 93 See eg Sheldrake v Director of Public Prosecutions [2005] 1 AC 264 at 303-304 [28] per Lord Bingham, Lord Steyn and Lord Phillips of Worth Matravers agreeing; Vodafone 2 v Revenue and Customs Commissioners [2010] Ch 77 at 90-92 [37]-[42]; Principal Reporter v K [2011] 1 WLR 18 at 40-41 [60]-[61]; (Footnote continues on next page) Kingdom text books and journals94. In the Supreme Court of the United Kingdom in Ahmed v Her Majesty's Treasury95, Lord Phillips said96: "I believe that the House of Lords has extended the reach of section 3 of the HRA beyond that of the principle of legality." It is not necessary to explore further the general approach of the United Kingdom courts. Section 3 of the HRA has a history and operates in a constitutional setting which is materially different from that which exists in Australia. Before its enactment, United Kingdom courts, which had to give effect to the supremacy of European Community law, lacked domestic legislation providing for the direct application of rights under the ECHR. In the result there was a perception that British judges were denied the responsibility of safeguarding Convention rights and that the European Court of Human Rights had become "in effect a supreme constitutional court of the UK."97 The HRA was enacted under the political rubric of "bringing rights home"98. If it has resulted in a shift in the constitutional relationship of the United Kingdom courts with the Parliament, that shift may at least have been informed by the interaction between those courts and the European Court of Human Rights99. Lord Bingham described the United Kingdom courts as "tak[ing] their lead from Strasbourg."100 Hounslow London Borough Council v Powell [2011] 2 WLR 287 at 309 [62]; [2011] 2 All ER 129 at 152. 94 See eg Clayton and Tomlinson (eds), The Law of Human Rights, 2nd ed (2009), vol 1 at 175-177 [4.01]-[4.08], 190 [4.32], 197-199 [4.44]-[4.45]; Beatson et al, Human Rights: Judicial Protection in the United Kingdom, (2008) at 459. 96 [2010] 2 AC 534 at 646 [112]. 97 Lester, Pannick and Herberg (eds), Human Rights Law and Practice, 3rd ed (2009) 98 Lester, Pannick and Herberg (eds), Human Rights Law and Practice, 3rd ed (2009) 99 For an account of that interaction with the House of Lords see Feldman, "Human Rights", in Blom-Cooper, Dickson and Drewry (eds), The Judicial House of Lords 100 Sheldrake v Director of Public Prosecutions [2005] 1 AC 264 at 305 [33]. In the Countryside Alliance Case in the House of Lords, Baroness Hale of Richmond said in connection with the application of the HRA101: "When we can make a good prediction of how Strasbourg would decide the matter, we cannot avoid doing so on the basis that it is a matter for Parliament. Strasbourg will be largely indifferent to which branch of government was responsible for the state of the domestic law." Section 32(1) exists in a constitutional setting which differs from the setting in which the HRA operates. It mandates an attempt to interpret statutory provisions compatibly with human rights. There is, however, nothing in its text or context to suggest that the interpretation which it requires departs from established understandings of the that process. interpretation which it directs to that which is consistent with the purpose of the statutory provision under consideration. It operates upon constructional choices which the language of the statutory provision permits. Constructional choice subsumes the concept of ambiguity but lacks its negative connotation. It reflects the plasticity and shades of meaning and nuance that are the natural attributes of language and the legal indeterminacy that is avoided only with difficulty in statutory drafting. The subsection limits Section 32(1) does what Lord Hoffmann and the other Law Lords in Wilkinson said s 3 of the HRA does. It requires statutes to be construed against the background of human rights and freedoms set out in the Charter in the same way as the principle of legality requires the same statutes to be construed against the background of common law rights and freedoms. The human rights and freedoms set out in the Charter in significant measure incorporate or enhance rights and freedoms at common law. Section 32(1) applies to the interpretation of statutes in the same way as the principle of legality but with a wider field of application. The Court of Appeal was essentially correct in its treatment of The right to be presumed innocent In this case, it is not necessary to explore the full scope of the right to be presumed innocent under s 25(1). Article 6(2) of the ECHR has been held to extend to prejudicial pre-trial statements and proceedings for the award of costs or compensation for detention on remand following discontinuance of criminal proceedings or acquittal102. It may be that s 25(1) also extends that far. In this 101 R (Countryside Alliance) v Attorney General [2008] AC 719 at 777 [125]. 102 Harris et al, Law of the European Convention on Human Rights, 2nd ed (2009) at 299-306. See also Joseph, Schultz and Castan, The International Covenant on Civil and Political Rights, 2nd ed (2005) at 426-428 [14.70]-[14.73]; Lester, (Footnote continues on next page) case, however, the Court is concerned only with its character as an expression of the requirement that the prosecution in a criminal case has the burden of proving guilt. The concept of the presumption of innocence is part of the common law of Australia, subject to its statutory qualification or displacement in particular cases. It is therefore part of the law of the State of Victoria. Its content, so far as it is relevant to this case, was concisely stated in Howe v The Queen103: "The presumption of innocence in a criminal trial is relevant only in relation to an accused person and finds expression in the direction to the jury of the onus of proof that rests upon the Crown. It is proof beyond a reasonable doubt of every element of an offence as an essential condition precedent to conviction which gives effect to the presumption." Its meaning and operation were described by Sir James Fitzjames Stephen, in words still relevant, as "an emphatic caution against haste in coming to a conclusion adverse to a prisoner."104 The presumption of innocence has not generally been regarded in Australia as logically distinct from the requirement that the prosecution must prove the guilt of an accused person beyond reasonable doubt105. In particular, Australian courts have not taken the view that a trial judge, who has correctly directed the jury as to the burden of proof, should also be required to make express reference to the presumption of innocence106. In the United States Pannick and Herberg (eds), Human Rights Law and Practice, 3rd ed (2009) at 103 (1980) 55 ALJR 5 at 7; 32 ALR 478 at 483. 104 Stephen, A General View of the Criminal Law of England, 2nd ed (1890) at 183, cited in Briginshaw v Briginshaw (1938) 60 CLR 336 at 352 per Starke J; [1938] HCA 34. 105 For an argument that the presumption of innocence was historically more than an instrument of proof and was unduly narrowed by common law scholars see Quintard-MorΓ©nas, "The Presumption of Innocence in the French and Anglo- American Legal Traditions", (2010) 58 American Journal of Comparative Law 107. Its historical application to allegations, in civil proceedings, of criminal conduct was noted in Best, A Treatise on Presumptions of Law and Fact, (1844) at 18 and 29. As to the standard of proof in such cases see Briginshaw v Briginshaw (1938) 60 CLR 336. 106 Palmer (1992) 64 A Crim R 1 at 6-7 per Finlay J, Gleeson CJ and Carruthers J agreeing; Tulic v The Queen (1999) 91 FCR 222 at 225 [13] per Dowsett J, (Footnote continues on next page) Supreme Court in the late 19th century, the presumption of innocence and the prosecutor's burden of proof were held to be logically separate and distinct107. In the face of "sharp scholarly criticism" that distinction was not maintained108. The term "presumption of innocence" was nevertheless regarded as a source of "significant additional guidance" for the ordinary citizen sitting on a jury109. Scholarly criticism has continued110. For present purposes the relevant aspect of the presumption, both at common law and as declared in s 25(1), is that expressed in the imposition on the prosecution of the legal burden of proof of guilt in criminal proceedings. One consequence of that identity of content is that the protective operation of the common law principle of legality with respect to the common law presumption also protects the relevant expression of the Charter right to be presumed innocent. As appears below, however, that protective operation is ineffective against the clear language of s 5. The construction of s 5 The starting point in construing s 5 is the ordinary and grammatical meaning of its words having regard to their context and legislative purpose. According to that ordinary meaning, the operation of the section places upon an occupier of premises, in proceedings in which possession of a substance on the premises is in issue, the legal burden of persuading a court that he or she was not in possession of the substance. On their face the words of the section defeat any attempt by applying common law principles of interpretation to read down the legal burden thus created. Prior to the enactment of the Charter, the received construction of s 5 of the Drugs Act in Victoria was that enunciated by the Full Court of the Supreme Spender and Miles JJ agreeing; Noble v The State of Western Australia [2005] WASCA 33 at [19] per Steytler P, Roberts-Smith and Pullin JJA agreeing. 107 Coffin v United States 156 US 432 (1895). 108 Taylor v Kentucky 436 US 478 at 483 (1978). 109 436 US 478 at 484 (1978). 110 McCormick on Evidence, 5th ed (1999) at 519-520; Laufer, "The Rhetoric of Innocence", (1995) 70 Washington Law Review 329; Laudan, "The Presumption of Innocence: Material or Probatory?", (2005) 11 Legal Theory 333. See also Hamer, "A Dynamic Reconstruction of the Presumption of Innocence", (2011) 31 Oxford Journal of Legal Studies 417. Court in R v Clarke and Johnstone111. It accorded with the ordinary meaning of the words of the section. On that construction, s 5 required that the occupier of the relevant land or premises prove, on the balance of probabilities, that he or she was not in possession of the relevant substance within the common law meaning of the term "possession"112. It was submitted for the first respondent, and was not in dispute, that the decision of the Full Court in R v Clarke and Johnstone has been followed in many hundreds of cases since it was decided113. The appellant submitted, against the received construction, that: Section 5 imposes an onus of disproof on an accused in relation to possession but does not require disproof on the balance of probabilities. A construction of s 5 as imposing only an evidential onus on an accused is consistent with the purpose of that section. The evidential onus would be discharged by the accused raising a reasonable doubt about his or her possession114. The construction adopted by the Court of Appeal would have an anomalous result. The onus on an accused of disproving knowledge of the existence of the relevant drugs would extend to a charge of trafficking under s 71AC involving "possession for sale" but would not apply to trafficking not based upon possession for sale. As appears below, this anomaly does not arise if s 5 does not apply to "possession for sale". The ambiguous language of s 5 does not manifest a clear intention to impose the legal onus of proof on the balance of probabilities on the accused and, according to the principle of legality, s 5 should not be read as imposing that onus. 112 [1986] VR 643 at 647. 113 R v Tragear (2003) 9 VR 107 at 117 [42] per Callaway JA, Batt JA agreeing; R v Hiep Tan Tran [2007] VSCA 19 at [23] per Redlich JA, Nettle and Neave JJA agreeing; R v Georgiou [2009] VSCA 57 at [30] per Robson AJA, Neave and Redlich JJA agreeing. 114 See The People (Director of Public Prosecutions) v Smyth [2010] 3 IR 688, a decision of the Irish Court of Criminal Appeal applying Art 38.1 of the Constitution of Ireland to s 29 of the Irish Misuse of Drugs Act 1977. If s 5 cannot be construed, pursuant to the principle of legality, as imposing only an evidential burden on an accused, such a construction is nevertheless "possible" within the meaning of s 32(1). The appellant invoked s 7(2)(e) of the Charter, which provides that the reasonableness of limits on a human right may be assessed by the existence of "any less restrictive means reasonably available to achieve the purpose that the limitation seeks to achieve." The appellant pointed to a concession by the first respondent that a change from a legal onus to an evidential onus in the application of s 5 would not make any demonstrable difference to trafficking prosecutions. However, for the reasons already explained, the criteria set out in s 7(2) play no part in the interpretation of a law "in a way that is compatible with human rights" pursuant to s 32(1). to decisions of courts The appellant directed attention in other jurisdictions dealing with reverse onus provisions in the light of human rights Perhaps instruments incorporating the right to be presumed innocent. unnecessarily, she called in aid s 32(2) of the Charter to justify the references to those decisions. In R v Lambert115 the House of Lords construed a reverse onus provision116 requiring the accused to "prove" want of knowledge or suspicion of certain matters, as imposing an evidential rather than a legal burden. Its interpretive approach embodied proportionality considerations of the kind that would be relevant under s 7(2) of the Charter. That approach to s 32(1) is not open under the Charter. The distinction is made clear upon a consideration of the way in which the House of Lords in Sheldrake v Director of Public Prosecutions117 applied s 3 of the HRA to interpret a reverse onus provision in s 11(2) of the Terrorism Act 2000 (UK). Section 11(2) began with the words "It is a defence for a person charged with an offence under subsection (1) to prove". Lord Bingham, with whom Lord Steyn and Lord Phillips agreed, found that there was no doubt that Parliament had intended the reverse onus provision to impose a legal burden on the defendant. There was no doubt that the provision was directed to a legitimate end118. The point of difference between s 3 of the HRA and s 32(1) of the Charter is thrown up by the observation of Lord Bingham that119: 116 Misuse of Drugs Act 1971 (UK), s 28. 118 [2005] 1 AC 264 at 312 [50]. 119 [2005] 1 AC 264 at 312-313 [50]. "The crucial question is therefore whether β¦ imposition of a legal burden on a defendant in this particular situation is a proportionate and justifiable legislative response to an undoubted problem. To answer this question the various tests identified in the Strasbourg jurisprudence as interpreted in the United Kingdom authorities fall to be applied." On that approach s 11(2) was read down to impose an evidential instead of a legal burden120. Given the inapplicability of s 7(2) to the interpretive principle enunciated in s 32(1), and the similarity between the interpretive principle in that subsection and the principle of legality, Lambert is of little assistance in this case. Neither is the decision of the Hong Kong Court of Final Appeal in HKSAR v Lam Kwong Wai121. In that case, common law principles of interpretation could not justify the construction of a reverse onus provision as imposing an evidential onus rather than the persuasive onus which was apparent from its language and structure. Sir Anthony Mason NPJ, with whom the other members of the Court agreed, drew a distinction between common law principles of interpretation and what he called "remedial interpretation" pursuant to the Hong Kong Bill of Rights Ordinance122. His Honour described provisions such as s 3 of the HRA and s 6 of the NZBOR as "directed to the situation which arises when a statute on its true interpretation, derogates from an entrenched or statutory human right or fundamental freedom."123 Such provisions would require courts124: "to give the statutory provision an interpretation that is consistent with the protected rights, even an interpretation that is strained in the sense that it was not an interpretation which the statute was capable of bearing as a matter of ordinary common law interpretation." The power of the Hong Kong Court of Final Appeal to effect a remedial interpretation was implied in the Basic Law. Article 39 of the Basic Law gave 120 See also R v Webster [2011] 1 Cr App R 207, cited by the appellant, in which the words "unless the contrary is proved" in the Prevention of Corruption Act 1916 (UK) were construed as imposing an evidential burden. 121 (2006) 9 HKCFAR 574. 122 (2006) 9 HKCFAR 574 at 605 [58], 606-607 [62]-[65]. 123 (2006) 9 HKCFAR 574 at 607 [65] (emphasis added). 124 (2006) 9 HKCFAR 574 at 607 [65]. constitutional force to the provisions of the ICCPR "as applied to Hong Kong" by the Bill of Rights Ordinance and provided that they should "remain in force"125. The interpretive principle in s 32(1) does not require or authorise the interpretation of s 5 in such a way as to transform the legal burden of proof, which it imposes in clear terms, into an evidential burden. The interpretation mandated under s 32(1) must be consistent with the purpose of the statutory provision being interpreted. The purpose of s 5 is apparent from its text. It is to require the accused to negative possession of a substance otherwise deemed to be in his or her possession by operation of the section. On this limb of the appeal, the appellant fails. Whether s 5 applies to the offence of trafficking The trial judge directed the jury in terms which left it open to them to convict the appellant of trafficking even though they were not satisfied beyond reasonable doubt that she knew of the existence of the methylamphetamine in her apartment. The judge's direction rested on the premise that s 5 could be applied to prove possession of a traffickable quantity of the drug and thereby the knowledge of the drug necessary to prove trafficking in the sense of "possession for sale" within the definition of "traffick" in s 70(1). The Court of Appeal said that126: "subject always to the reverse onus β proof merely of occupation of relevant premises operates (by means of s 5 and s 73(2)) to establish a prima facie case of trafficking against an accused." The appellant submitted that despite s 5, a person cannot be found guilty of trafficking in a drug of dependence unless the prosecution proves beyond reasonable doubt that the accused is aware of the existence of the drug. The first respondent submitted that the trial judge was correct to direct the jury as he did. The deemed possession by the appellant of a quantity of drugs exceeding the traffickable quantity was prima facie evidence that she possessed the drugs for sale. It was evidence which, according to the first respondent's submissions, entitled the jury to find that the element of trafficking was proven in the absence of evidence to the contrary. 125 (2006) 9 HKCFAR 574 at 610-611 [78]-[79]. 126 (2010) 25 VR 436 at 473 [135]. The interaction between ss 5 and 73(2) has been considered in a number of decisions of the Supreme Court of Victoria. The Full Court of the Supreme Court held in R v Clarke and Johnstone127 that s 5 could be invoked to establish possession for the purposes of s 73(2)128. In that case, it was common ground that whoever possessed the substance was "obviously growing it for sale."129 The Court of Appeal in R v Tragear130 took the same view as the Full Court. In Tragear, however, the Court held that to prove an offence of trafficking under s 71AC, the prosecution must prove beyond reasonable doubt that the accused knew of the existence of the relevant drug even if possession, for the purposes of s 73(2), had been established by operation of s 5131. In R v Georgiou132, Robson AJA referred to Tragear and said133: "Accordingly, even using s 5 and s 73(2), to establish trafficking beyond reasonable doubt, the Crown would be required to establish the elements of the trafficking alleged such as the accused possessed the drug for sale and the necessary mens rea or intent to do so." His Honour accepted the proposition put by Callaway JA in Tragear that "even if the accused was in possession β¦ of an amount that is prima facie evidence of trafficking, the onus was on the Crown to prove that the accused did know that it was cocaine."134 In Georgiou however, it was held that it was not necessary for the trial judge to direct the jury that the accused had actual knowledge of the drugs because actual knowledge was not a live issue135. The appellant submitted on the basis of Tragear and Georgiou that despite s 5, a person cannot intentionally possess a drug for sale unless he or she is aware of the presence of the drug. The principal issue at trial in this case was whether 128 [1986] VR 643 at 658-660. 129 [1986] VR 643 at 660. 131 (2003) 9 VR 107 at 117 [43] per Callaway JA. 132 [2009] VSCA 57. 133 [2009] VSCA 57 at [51]. 134 [2009] VSCA 57 at [56]. 135 [2009] VSCA 57 at [60]. the appellant knew of the presence of the drugs in her apartment. The appellant submitted that the trial judge had wrongly failed to direct the jury that before they could convict the appellant of an offence against s 71AC, the prosecution had to prove beyond reasonable doubt that she knew of their presence in her apartment. The first respondent, in effect, submitted that the dicta in Tragear and Georgiou relied upon by the appellant were wrong and did not acknowledge the contrary view expressed by the Full Court in R v Clarke and Johnstone. As the first respondent pointed out, the Court of Appeal in the present case did not question the correctness of the observation made by Callaway JA in Tragear. Nevertheless, the Court of Appeal relied upon Georgiou to justify its conclusion that it was not necessary for the trial judge to direct the jury that the prosecution had to prove actual knowledge of the drugs. The first respondent submitted that it was sufficient in this case for the trial judge to direct the jury that possession of a traffickable quantity of drugs did not oblige them to convict the appellant of trafficking, that they had to consider the possession of a traffickable quantity in the light of all the other evidence in the case and that the onus of proof at all times rested on the prosecution to prove possession for sale beyond a reasonable doubt. The extent, if any, to which s 5 can be applied to s 73(2) and the offence of trafficking under s 71AC depends upon the construction of s 5, which is informed by its purposes. They are, according to s 5, "the purposes of [the Drugs Act]". They obviously encompass proof of possession of a substance in contravention of offence-creating provisions of the Act. There are a number of such offences based on possession alone136. The approach taken in Tragear and Georgiou to ss 5 and 73(2) involves the proposition that proof of the following facts: occupation of premises by a person; and the presence on the premises of a quantity of a drug of dependence not less than a traffickable quantity; amounts to prima facie evidence of trafficking by that person in that drug of dependence. Section 70(1) defines "traffick" inclusively. It does so in order to extend the coverage of that term to conduct which is an element of, or incidental to, trafficking but might not amount to trafficking according to the ordinary meaning 136 eg Drugs Act, s 36B(2) β unauthorised possession of poisons or controlled substances; s 71D β possession of precursor chemicals; s 73(1) β possession of a drug of dependence. of that term. The manufacture and preparation of a drug of dependence and possession of such a drug for sale all fall into that category. Section 73(2) is enlivened only by "possession" of a traffickable quantity. It is difficult to see how, as a matter of logic, the trafficking of which such possession is prima facie evidence, could be other than trafficking constituted by "possession for sale". To extend the prima facie effect of possession of a traffickable quantity to support inferences of actual sale or exchange, manufacture or preparation of a drug of dependence is to stray outside the logical framework defined by the factual premise upon which s 73(2) operates. Prima facie evidence of possession for sale may be taken, with other evidence in a trial, to support findings of actual sale or exchange. There is, however, no reasonable basis upon which s 5 can be used, in conjunction with s 73(2), to translate occupation of premises upon which a traffickable quantity of drugs is found into prima facie evidence of trafficking constituted by sale, exchange, preparation or manufacture of a drug of dependence. The question then is whether s 5 can interact with s 73(2) to support a prima facie inference of trafficking constituted by possession for sale. Mens rea is an element of the offence of trafficking under s 71AC. Proof that the accused person knew of the existence of the relevant substance is therefore a necessary part of the prosecution burden of proving mens rea unless that knowledge be admitted. It is a premise of the intention which the prosecution must establish. The application of s 5 to trafficking under s 71AC could have two consequences: deemed knowledge of the existence of the drugs, as a logical incident of deemed possession, could not logically be excluded from the mens rea calculus necessary for trafficking; and the deemed knowledge would not inform other manifestations of trafficking in its ordinary meaning or in its extended meaning under In my opinion, the application of s 5 to establish prima facie evidence of possession for sale constituting trafficking under s 71AC is anomalous and is not a purpose of the Act. As a matter of construction it should not be applied to that offence. The contrary view has the result that occupation of premises, upon which there is a quantity of drugs of or exceeding the traffickable quantity, would be prima facie evidence of trafficking in those drugs in circumstances in which the burden of disproving knowledge of the presence of the drugs on the premises would rest upon the accused. The construction which excludes s 5 from application to an offence against s 71AC is to be preferred to any other construction. There are two very similar grounds for that preference: the principle of legality and s 32(1) of the Charter. The enactment of s 32(1) post-dated the decisions in R v Clarke and Johnstone and Tragear. Both the principle of legality and s 32(1) apply to favour a constructional choice which will minimise the encroachment by s 5 upon the right of an accused person to be presumed innocent of the offence with which he or she is charged. The exclusion of s 5 from the very serious offence of trafficking reflects a proper application of those principles as discussed earlier in these reasons. For the preceding reasons, and having regard to the way in which the case was conducted at first instance, there was a miscarriage of justice by reason of the misapplication of s 5 of the Drugs Act to the charge of trafficking. The various directions that the appellant bore the burden of proving that she did not know of the drugs should not have been made. The trial judge ought to have directed the jury that it was for the Crown to prove beyond reasonable doubt that the appellant was in possession of the methylamphetamine found in her apartment and, as a necessary part of that proof, to show that she knew of its existence. On that basis, the appeal should be allowed. The question then arises as to the disposition of the issues regarding the declaration of inconsistent interpretation made by the Court of Appeal under s 36 of the Charter. The nature and validity of the power to make a declaration of inconsistent interpretation Section 36(2) of the Charter establishes one of the mechanisms foreshadowed in s 1(2) of the Charter for the protection and promotion of human rights. That mechanism is described in s 1(2)(e) as: "conferring jurisdiction on the Supreme Court to declare that a statutory provision cannot be interpreted consistently with a human right and requiring the relevant Minister to respond to that declaration." Section 36(2) relevantly provides: "if in a proceeding the Supreme Court is of the opinion that a statutory provision cannot be interpreted consistently with a human right, the Court may make a declaration to that effect in accordance with this section." The section applies where a question of law involving the application of the Charter or a question with respect to the interpretation of a statutory provision in accordance with the Charter, has arisen in a Supreme Court proceeding, including an appeal before the Court of Appeal137. It also applies to proceedings in which the Supreme Court has had such a question referred to it by another 137 Charter, s 36(1)(a) and (c). court or tribunal, a referral which can be made pursuant to s 33(1) of the Charter138. The Court must not make a declaration of inconsistent interpretation unless it has first ensured that notice has been given to the Attorney-General and the Victorian Equal Opportunity and Human Rights Commission139. It is also required to give them both a reasonable opportunity to "intervene in the proceeding or to make submissions in respect of the proposed declaration"140. Section 36(5) puts into statutory form a statement of the obvious, namely that a declaration of inconsistent interpretation does not: affect in any way the validity, operation or enforcement of the statutory provision in respect of which the declaration was made; or create in any person any legal right or give rise to any civil cause of action." The Supreme Court must cause a copy of a declaration to be given to the Attorney-General141. The Attorney-General must give a copy to the Minister administering the statutory provision in respect of which the declaration is made142. The Minister receiving the declaration is required, within six months of its receipt, to prepare a written response to it and to cause a copy of the declaration and the response to be laid before both Houses of Parliament and published in the Government Gazette143. As appears earlier in these reasons, the conclusion by the Court of Appeal that s 5 of the Drugs Act imposes a legal burden of proof on an accused person was correct. So too was its conclusion that s 5 is not compatible with the human right, declared under s 25(1) of the Charter, of an accused person to be presumed innocent of the offence with which he or she is charged. On the other hand, this appeal is to be allowed on the basis, not reflected in the trial judge's direction to the jury, that s 5 cannot relieve the Crown, in a prosecution for trafficking in a 138 Charter, s 36(1)(b). 139 Charter, s 36(3). 140 Charter, s 36(4). 141 Charter, s 36(6). 142 Charter, s 36(7). 143 Charter, s 37. drug of dependence, from the burden of proving that the accused knew of the drug's existence. The orders sought by the appellant would set aside all orders of the Court of Appeal, including the declaration of inconsistent interpretation. Three questions arise as to the nature and effect of s 36. Those questions are relevant to whether this Court, in the exercise of its appellate jurisdiction, can set aside the declaration: Is the making of a declaration of inconsistent interpretation the exercise of judicial power? If the making of a declaration of inconsistent interpretation is not the exercise of judicial power, is it incidental to the exercise of judicial power? Is s 36 of the Charter, pursuant to which the declaration was made, a valid exercise of the legislative power of the Victorian Parliament? The term "declaration", which appears in different statutory settings, embraces more than one species of administrative and judicial decision-making. A statute may provide for the making of a "declaration" which triggers legal consequences. The declaration may be an administrative act which has no speaking content144. It may be a declaration of some official finding or conclusion145. Declarations of that kind, which are not adjudications of disputes about existing legal rights and obligations but result in the creation of new sets of rights and obligations, when made by a non-judicial body, do not involve the exercise of judicial functions146. 144 Declaration of a service under Pt IIIA of the Competition and Consumer Act 2010 (Cth) results in the application of a statutory access regime to the relevant service. 145 See, by way of example, a declaration of unacceptable circumstances made by the Takeovers Panel pursuant to s 657A of the Corporations Act 2001 (Cth). 146 Precision Data Holdings Ltd v Wills (1991) 173 CLR 167 at 191-192; [1991] HCA 58; Attorney-General (Cth) v Alinta Ltd (2008) 233 CLR 542 at 578-579 [96] per Hayne J; [2008] HCA 2. Judicial declarations which can be made by superior courts in the exercise of their inherent or implied incidental powers are confined by the boundaries of the judicial function147: "Hence, declaratory relief must be directed to the determination of legal controversies and not to answering abstract or hypothetical questions." (footnote omitted) Nevertheless courts have long exercised powers to make orders, declaratory in form, which do not merely declare legal rights and obligations but create new legal relationships. Examples are adoption orders, decrees of divorce or nullity and orders declaring the dissolution of partnerships. Such orders take their place in the long history of powers exercised by courts in England and Australia before and after Federation which do not involve determinations of rights148. These include administrative and investigative functions such as the examination of judgment debtors, bankrupts and officers of failed corporations149. As was pointed out by Dixon CJ and McTiernan J in R v Davison150, the elements of a controversy between subjects and the determination of existing rights and liabilities were "entirely lacking from many proceedings falling within the jurisdiction of various courts of justice in English law." Examples given in that case included opinions, advices and directions as to the administration of trusts151, orders relating to the maintenance and guardianship of infants, the exercise of a power of sale by way of family arrangement and consent to the marriage of a ward of the court. Declarations of legitimacy made by English courts were also cited. 147 Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 581-582 per Mason CJ, Dawson, Toohey and Gaudron JJ; [1992] HCA 10. 148 Historical and traditional factors can be significant in the characterisation of a power as judicial: Cominos v Cominos (1972) 127 CLR 588 at 605 per Stephen J; [1972] HCA 54, citing R v Davison (1954) 90 CLR 353 at 368 per Dixon CJ and McTiernan J; [1954] HCA 46. 149 Dalton v New South Wales Crime Commission (2006) 227 CLR 490 at 507-508 [45] per Gleeson CJ, Gummow, Hayne, Callinan, Heydon and Crennan JJ; [2006] HCA 17. 150 (1954) 90 CLR 353 at 368. 151 See also Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar The Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66 especially at 81-86 [33]-[45] per Gummow ACJ, Kirby, Hayne and Heydon JJ; [2008] HCA 42. A statute may confer upon a court a novel function which is judicial in character. The court may be empowered to make an order designated as a "declaration". The empowering statute may attach a legal consequence to such an order. When conferred by a law of the Commonwealth upon a court exercising federal jurisdiction, the power must necessarily be referable to a "matter" in respect of which federal jurisdiction can be conferred under Ch III of the Constitution. The power purportedly conferred on this Court in 1910152 by s 88 of the Judiciary Act to make, on reference from the Governor-General, a determination of the validity of an Act of Parliament, was held in In re Judiciary and Navigation Acts153 to be "clearly a judicial function"154. This reflected the submission of Owen Dixon, as counsel for Victoria, that "[w]hat Part XII of the Judiciary Act seeks to obtain from the High Court is a judicial decision, and not an advisory opinion."155 The power was not validly conferred because its the exercise was not an exercise of part of Commonwealth156. As Gleeson CJ pointed out in Re Wakim; Ex parte McNally157: judicial power of the "The basis of the decision was that, in the contemplated proceedings, there was no 'matter' within the meaning of Ch III (that is to say, no 'immediate right, duty or liability to be established by the determination of the Court')." (footnote omitted) The understanding of the judicial power of the Commonwealth which informs Ch III of the Constitution and is closely linked to the concept of a "matter" in respect of which such jurisdiction is conferred or invested, does not mark out the bounds of judicial functions able to be exercised by State courts. The distinction between judicial power and the judicial power of the Commonwealth has long been acknowledged, directly and indirectly, in this 152 Judiciary Act 1910 (Cth), s 3. 153 (1921) 29 CLR 257; [1921] HCA 20. 154 (1921) 29 CLR 257 at 264 per Knox CJ, Gavan Duffy, Powers, Rich and Starke JJ. 155 (1921) 29 CLR 257 at 259. 156 (1921) 29 CLR 257 at 264 per Knox CJ, Gavan Duffy, Powers, Rich and Starke JJ. 157 (1999) 198 CLR 511 at 542 [10]; [1999] HCA 27. See also The Commonwealth v Queensland (1975) 134 CLR 298 at 327 per Jacobs J, McTiernan J agreeing at 303; [1975] HCA 43; Gould v Brown (1998) 193 CLR 346 at 421 [118] per McHugh J, 440 [178] per Gummow J; [1998] HCA 6 and generally Zines, "Advisory Opinions and Declaratory Judgments at the Suit of Governments", (2010) 22.3 Bond Law Review 156 especially at 157. Court158. As Gummow J said in Kable v Director of Public Prosecutions (NSW)159: "jurisdiction conferred by a State legislature on the courts of the State may be judicial in character, albeit insusceptible of investment by the Parliament of the Commonwealth as federal jurisdiction pursuant to s 77(iii)." Novelty is no objection to the characterisation of a statutory power conferred upon a court as judicial160. The fact that a court is empowered to make a "declaration" of a kind that does not fit within the developed understanding of declaratory relief, and is entirely a creature of statute, is not determinative of the characterisation of the power. The character of the power must be determined by its content and statutory context and not by any disconformity between its content and that of other powers similarly designated. Where a Court of Appeal or Court of Criminal Appeal is asked, by a case stated or question referred to it, pursuant to statute, to answer questions of law arising in proceedings before a trial court it is asked to undertake a judicial function. That is so whether or not the answers themselves determine the rights of the parties. So much flows from the decisions of this Court in Mellifont v Attorney-General (Q)161 and O'Toole v Charles David Pty Ltd162 and is consistent with In re Judiciary and Navigation Acts. The answers given in such a case are "not given in circumstances divorced from an attempt to administer the law as stated by the answers; they are given as an integral part of the process of 158 In re Judiciary and Navigation Acts (1921) 29 CLR 257 at 271 per Higgins J; The Commonwealth v Queensland (1975) 134 CLR 298 at 325 per Jacobs J; Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 136-137 per Gummow J; [1996] HCA 24; Gould v Brown (1998) 193 CLR 346 at 420-421 [118] per McHugh J; Re Wakim; Ex parte McNally (1999) 198 CLR 511 at 542 159 (1996) 189 CLR 51 at 137. 160 See eg s 81(1A) of the Trade Practices Act 1974 (Cth) considered in WSGAL Pty Ltd v Trade Practices Commission (1994) 51 FCR 115, especially at 131 per Lockhart J and 146-147 per Beaumont J; s 163A of the Trade Practices Act 1974 considered in Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (2000) 200 CLR 591; [2000] HCA 11. 161 (1991) 173 CLR 289; [1991] HCA 53. 162 (1991) 171 CLR 232; [1991] HCA 14. determining the rights and obligations of the parties which are at stake in the proceedings in which the questions are reserved."163 Section 669A of the Criminal Code (Q), considered in Mellifont, provided that the answers to questions of law referred to the Court of Criminal Appeal following the acquittal of an accused in whose trial the questions had arisen could have no effect on the trial or the acquittal. It was "fundamental" to the characterisation of the answers provided by the Court of Criminal Appeal as judicial that the referral process enabled that Court to correct an error of law at trial. As the plurality said in Mellifont164: "It is that characteristic of the proceedings that stamps them as an exercise of judicial power and the decision as a judgment or order within the meaning of s 73." The referral process, like the stated case procedure considered in O'Toole v Charles David Pty Ltd, did not require the consideration of an abstract question of law not involving the rights or duties of any body or person165. The answers given by an appellate court, in the exercise of a statutory jurisdiction, to referred questions arising out of particular proceedings may properly be viewed as an incident of the judicial process even if those answers do not affect the outcome of the proceedings. Where they correct error, they ensure that what has been said at first instance does not influence the outcome of subsequent similar cases. In deciding cases the courts are not discharging private arbitral functions. They are exercising powers conferred by public law and doing so in a way that is calculated166: "to explicate and give force to the values embodied in authoritative texts such as the Constitution and statutes: to interpret those values and to bring reality into accord with them." The condition which enlivens the exercise of the power in s 36(2) is the formation by the Supreme Court, in a proceeding, of an opinion that a statutory provision cannot be interpreted consistently with a human right. The opinion must have been formed by the Court in carrying out its judicial function. By 163 Mellifont v Attorney-General (Q) (1991) 173 CLR 289 at 303 per Mason CJ, Deane, Dawson, Gaudron and McHugh JJ. 164 (1991) 173 CLR 289 at 305. 165 Mellifont v Attorney-General (Q) (1991) 173 CLR 289 at 303. 166 Fiss, "Against Settlement", (1984) 93 Yale Law Journal 1073 at 1085. necessary implication, the opinion must have been part of the reasoning of the Court which led it to adopt an interpretation of the provision in question which was inconsistent with a human right. That interpretation will have affected the resolution of the proceedings before the court in which the rights and liabilities of the parties were determined. The declaration under s 36, however, does not decide or affect those rights or liabilities. Nor does it have any effect upon the operation of the statutory provision. It has only one legal consequence and that is to enliven the obligations imposed upon the Attorney-General and the relevant Minister by s 37 of the Charter. It is not a declaration of a kind that could be made in the exercise by the Supreme Court of its general powers to award declaratory relief. The question is whether it is a declaration which involves the exercise of judicial power. Gaudron J in Truth About Motorways said167: "a declaration cannot be made if it 'will produce no foreseeable consequences for the parties'. That is not simply a matter of discretion. Rather, a declaration that produces no foreseeable consequences is so divorced from the administration of the law as not to involve a matter for the purposes of Ch III of the Constitution. And as it is not a matter for those purposes, the Commonwealth." (footnotes omitted) judicial power of it cannot engage the Although her Honour was speaking in relation to the exercise of Commonwealth judicial power, her observation has a wider significance for the proper subject matter and purposes of declarations in the exercise of judicial power generally and reflects what was said in that wider context in Gardner v Dairy Industry Authority (NSW)168. Despite its form and its connection to the proceedings before the Supreme Court and to the reasoning of the Court leading to the disposition of those proceedings, a declaration of inconsistent interpretation made under s 36 does not involve the exercise of a judicial function. At the point at which such a declaration is made the Court will have decided all matters relevant to the disposition of the proceedings. The power conferred by s 36 plays no part in that process. The declaration sets down no guidance for the disposition of future cases involving similar principles of law. It has no legal effect upon the validity of the statutory provision which is its subject. It has statutory consequences of a procedural character. Those statutory consequences are relevant to the Attorney- General as a member of the Executive and as a member of the Victorian Parliament and to the Parliament itself. The declaration of inconsistent 167 (2000) 200 CLR 591 at 613 [52]. 168 (1977) 52 ALJR 180 at 184 per Barwick CJ, 188 per Mason J, Jacobs and Murphy JJ agreeing, 188-189 per Aickin J; 18 ALR 55 at 60-61, 69, 71. interpretation cannot be regarded as analogous to the judicial function nor to any functions historically exercised by courts and which, for that reason, have been regarded as judicial. The declaration of inconsistent interpretation cannot be described as incidental to judicial power for essentially the same reasons that it cannot be described as an exercise of judicial power. Nevertheless, the distinction in principle between the two questions requires their separate consideration. The concept of a non-judicial function conferred as an incident of judicial power was referred to in the Boilermakers' Case169 in the context of the authority conferred upon the Commonwealth Parliament by s 51(xxxix) of the Constitution to make laws with respect to matters incidental to the execution of any power vested by the Constitution in the federal judicature. There it was said, in the joint judgment of Dixon CJ, McTiernan, Fullagar and Kitto JJ170: "What belongs to the judicial power or is incidental or ancillary to it cannot be determined except by ascertaining if it has a sufficient relation to the principal or judicial function or purpose to which it may be thought to be accessory." The distinction between "a bare administrative function" and a function "appurtenant to the performance of a principal judicial duty to which it is an accessory" was made in Steele v Defence Forces Retirement Benefits Board171. In the context of federal jurisdiction, Deane J observed in Re Tracey; Ex parte "The Executive Government cannot absorb or be amalgamated with the judicature by the conferral of non-ancillary executive functions upon the courts." (emphasis added) A declaration under s 36 does not enable nor support nor facilitate the exercise by the Court of its judicial function. Nor does it have any part to play in giving effect to the disposition of the proceedings by the Court. The declaration 169 R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254; [1956] HCA 10. 170 (1956) 94 CLR 254 at 278. 171 (1955) 92 CLR 177 at 186-187; [1955] HCA 34. See also Victoria v Australian Building Construction Employees' and Builders Labourers' Federation (No 2) (1982) 152 CLR 179 at 186-187 per Brennan J; [1982] HCA 57. 172 (1989) 166 CLR 518 at 580; [1989] HCA 12. of inconsistent interpretation cannot be described as incidental or ancillary to the exercise, by the Supreme Court of Victoria, of its judicial power. The characterisation of the declaration of inconsistent interpretation as a non-judicial function, which is not incidental to the exercise of judicial power by the Supreme Court of Victoria, is not fatal to its validity. The distinction between non-judicial functions which are incidental to the exercise of judicial power and those which are not is relevant in relation to federal courts and courts exercising federal jurisdiction because of the separation of judicial from the legislative and executive powers mandated by Commonwealth. The distinction does not have the same relevance in relation to State courts exercising jurisdiction conferred on them by State laws. In the joint judgment in Mellifont, their Honours said173: the Constitution of "in the absence of a constitutional separation of powers, there has existed the possibility that the Supreme Courts of the States might be entrusted with a jurisdiction that did not involve the exercise of judicial power." Callinan and Heydon JJ made a similar point in Fardon174: "Not everything by way of decision-making denied to a federal judge is denied to a judge of a State." Nevertheless, if a non-judicial function which is not incidental to a judicial function is conferred upon a State court a question may arise whether the non- judicial function is compatible with the institutional integrity of the State court and its status as a repository of federal jurisdiction pursuant to Ch III of the Constitution175. In this case, that question goes to the validity of s 36(2). As explained in this Court in a line of decisions beginning with Kable, the placement of the courts of the States in the integrated national judicial system created by Ch III of the Constitution constrains the range of functions which can be conferred upon those courts. They cannot be authorised or required to do things which substantially impair their institutional integrity and which are 173 (1991) 173 CLR 289 at 300. 174 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 656 [219]; [2004] HCA 46. See also Thomas v Mowbray (2007) 233 CLR 307 at 424 [336] per Kirby J; [2007] HCA 33; South Australia v Totani (2010) 242 CLR 1 at 66 [145] per 175 South Australia v Totani (2010) 242 CLR 1 at 47 [69] per French CJ, 81-82 [201]- [207] per Hayne J; Wainohu v New South Wales (2011) 85 ALJR 746 at 763-764 [44]-[48] per French CJ and Kiefel J; 278 ALR 1 at 19-21; [2011] HCA 24. therefore incompatible with their role as repositories of federal jurisdiction176. Legislation impairs the institutional integrity of a court if it confers upon it a function which is repugnant to or incompatible with the exercise of the judicial power of the Commonwealth177. In particular, a State legislature cannot enact a law conferring upon a State court or a judge of a State court a non-judicial function which is substantially incompatible with the judicial functions of that court178. The constraints which Ch III imposes upon State legislatures in relation to the courts of the States do not have the effect that State legislatures are deprived of power to determine the constitution and organisation of State courts179. Professor Enid Campbell rightly cautioned against overprotective applications of the incompatibility doctrine which pay insufficient attention to "the assessments of elected parliaments about what functions are appropriate for courts to perform."180 The power conferred upon the Supreme Court of Victoria to make a declaration of inconsistent interpretation is, for the reasons already set out, a distinct non-judicial power. It provides a mechanism by which the Court can direct the attention of the legislature, through the Executive Government of Victoria, to disconformity between a law of the State and a human right set out in the Charter181. The making of the declaration does not affect the Court's judicial 176 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 96 per Toohey J, 103 per Gaudron J, 116-119 per McHugh J, 127-128 per Gummow J; Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 591 [15] per Gleeson CJ. 177 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 103 per Gaudron J, 134 per Gummow J; Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 617 [101] per Gummow J, 628 [141] per Kirby J. 178 Wainohu v New South Wales (2011) 85 ALJR 746 at 764 [46]-[47] per French CJ and Kiefel J, 775 [105] per Gummow, Hayne, Crennan and Bell JJ; 278 ALR 1 at 179 South Australia v Totani (2010) 242 CLR 1 at 45-46 [66]-[68] per French CJ and cases there cited. 180 Campbell, "Constitutional Protection of State Courts and Judges", (1997) 23 Monash University Law Review 397 at 421. 181 A mechanism which might be thought to reflect the occasional phenomenon of judges drawing attention in their judgments to anomalies or inefficiencies in the operation of the law: Wilson v Minister for Aboriginal and Torres Strait Islander Affairs (1996) 189 CLR 1 at 20 fn 68 per Brennan CJ, Dawson, Toohey, McHugh and Gummow JJ; [1996] HCA 18. See also Hughes and Vale Pty Ltd v The State (Footnote continues on next page) function. It is consistent with the existing constitutional relationship between the Court, the legislature and the Executive. The metaphor of "dialogue between the three arms of the government" has been used to describe the interaction between the Supreme Court, the Executive and the legislature for which the Charter provides182. The metaphor is inapposite. At best, it distracts from recognition of the subsisting constitutional relationship between the three branches of government. At worst, it points misleadingly in the direction of invalidity. It is true that the Court, in making a declaration under s 36(2), may be seen as announcing that its decision in the proceedings is based upon an interpretation of the law which is inconsistent with a human right. That is a human right which, according to the Charter, Parliament specifically seeks to protect and promote. The making of the declaration, however, does no more than manifest, in a practical way, the constitutional limitations upon the Court's role and the fact that it is Parliament's responsibility ultimately to determine whether the laws it enacts will be consistent or inconsistent with human rights. The Court must decide the cases which come before it according to law. If the Parliament has enacted a valid law which cannot be interpreted consistently with a human right, the Court must nevertheless decide the case according to that law and not according to its view of what the law should be, whether by reference to the protection of human rights or otherwise. There is no distinction in principle to be drawn in this respect between civil and criminal proceedings which would render a declaration of inconsistent interpretation inappropriate in the latter class of case. A declaration of inconsistent interpretation does not infringe upon the constraints derived from Ch III of the Constitution. By exemplifying the proper constitutional limits of the Court's functions it serves to reinforce, rather than impair, the institutional integrity of the Court. Section 36 and federal jurisdiction The next question is whether the Supreme Court of Victoria can make a declaration of inconsistent interpretation relating to a State statute when the proceedings in which the interpretation of the statute arises are proceedings in federal jurisdiction. of New South Wales (No 2) (1955) 93 CLR 127 at 175-176 per Dixon CJ, McTiernan and Webb JJ; [1955] HCA 28; Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468 at 497 per Barwick CJ; [1971] HCA 40 for examples of judicial indications of how a law might be brought within constitutional limits. 182 Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 4 May 2006 at State courts may be invested with federal jurisdiction pursuant to s 77(iii) of the Constitution in matters in which the High Court has original jurisdiction conferred on it by s 75 of the Constitution or can have original jurisdiction conferred on it by the Parliament pursuant to s 76 of the Constitution. The classes of matter in which the High Court has original jurisdiction conferred on it by s 75(iv) include matters "between a State and a resident of another State". By operation of s 39(2) of the Judiciary Act the Supreme Court is "invested with federal jurisdiction" in such matters. As explained by Gummow J183, the County Court and the Court of Appeal were exercising that kind of federal jurisdiction in this case. There is a question, not debated at the hearing of the appeal, whether in the exercise of that jurisdiction the provisions of the Drugs Act applied directly along with the statutory and common law rules affecting their interpretation. Although I would not wish, in the absence of argument on the point, to express a concluded view, there is much to be said for the proposition that they did so apply and not by virtue of s 79 of the Judiciary Act. As Windeyer J said in Felton v Mulligan184, in a passage approved by Mason, Murphy, Brennan and Deane JJ in Fencott v Muller185: "The existence of federal jurisdiction depends upon the grant of an authority to adjudicate rather than upon the law to be applied or the subject of adjudication." A "matter" between a State and a resident of another State is a matter of federal jurisdiction notwithstanding that it arises under a State law or the common law or both. In that event the "matter" may be said to be defined by reference to the rights or liabilities to be determined under the relevant State law and/or the common law. The County Court was exercising federal jurisdiction. The Court of Appeal heard and determined the appeal from the County Court in the exercise of federal jurisdiction. Both Courts carried out their functions pursuant to an authority to adjudicate invested in them by s 39(2) of the Judiciary Act, read with s 75(iv) of the Constitution. The interpretive rule in s 32(1) of the Charter was part of the body of relevant State law defining the rights and liabilities to be determined by the Court of Appeal in the exercise of its jurisdiction. The position of a State court exercising diversity jurisdiction in a matter arising under a State law may be thought, in some respects, to be similar to that of a court exercising federal jurisdiction which is required to deal with a claim under State law forming part of the "matter" in respect of which it exercises 183 Reasons of Gummow J at [134]-[139]. 184 (1971) 124 CLR 367 at 393; [1971] HCA 39. 185 (1983) 152 CLR 570 at 606; [1983] HCA 12. federal jurisdiction. In such a case, where the court is exercising accrued jurisdiction186: "non-federal law is part of the single, composite body of law applicable alike to cases determined in the exercise of federal jurisdiction and to cases determined in the exercise of non-federal jurisdiction." (reference omitted) As Professor Zines has observed187: "In the context of diversity jurisdiction β¦ the content of the jurisdiction of State courts remains the same, but the source is different and the conditions and regulations imposed by s 39(2) are attached." (emphasis in original) The implications of a proposition that the concept of "matter" in s 75(iv) does not extend to encompass rights and liabilities arising under State law may be considerable and were not explored on the appeal. On the "direct application" approach, s 79 of the Judiciary Act would not have to be invoked to "pick up" provisions such as ss 5 and 71AC of the Drugs Act in the determination of the proceedings or, for that matter, to "pick up" s 32(1) of the Charter so as to make them "surrogate federal laws"188. Section 36 could not apply in proceedings in the exercise of federal jurisdiction. Section 79 does not pick up a provision conferring non-judicial functions on a court which are not incidental to its judicial function189. Moreover the jurisdiction conferred upon the County Court and the Supreme Court of Victoria by s 39(2) of the Judiciary Act is limited by the scope of Commonwealth judicial power. The power conferred by s 36(2) lies beyond those limits. 186 Fencott v Muller (1983) 152 CLR 570 at 607. 187 Cowen and Zines's Federal Jurisdiction in Australia, 3rd ed (2002) at 90. 188 Solomons v District Court (NSW) (2002) 211 CLR 119 at 134 [20] per Gleeson CJ, Gaudron, Gummow, Hayne and Callinan JJ; [2002] HCA 47, a case involving the applicability of a State law in the exercise of federal jurisdiction in a matter arising under a law of the Commonwealth. 189 Australian Securities and Investments Commission v Edensor Nominees Pty Ltd (2001) 204 CLR 559 at 593 [72]-[73] per Gleeson CJ, Gaudron and Gummow JJ; [2001] HCA 1; Solomons v District Court (NSW) (2002) 211 CLR 119 at 135 [24] per Gleeson CJ, Gaudron, Gummow, Hayne and Callinan JJ. Section 36 and the appellate jurisdiction of the High Court Accepting the validity of s 36, there is no reason in principle why the Court of Appeal, having exhausted its functions in the exercise of its federal jurisdiction in this case, could not proceed to exercise the distinct non-judicial power, conferred upon it by s 36, to make a declaration of inconsistent interpretation. In any event, in the exercise of appellate jurisdiction, this Court cannot interfere with such a declaration. A declaration of inconsistent interpretation, being non-judicial and not incidental to judicial power, cannot be characterised as a judgment, decree, order or sentence of the Supreme Court falling within the appellate jurisdiction conferred upon this Court by s 73 of the Constitution. As Gaudron, Gummow and Hayne JJ said of the words of s 73 in Mobil Oil Australia Pty Ltd v Victoria190: "It is well established that 'judgments, decrees, orders and sentences' is to be understood as confined to decisions made in the exercise of judicial power." (footnote omitted) This Court has no jurisdiction under s 73 of the Constitution to entertain the appeal so far as it relates to the declaration of inconsistent interpretation made by the Court of Appeal. In allowing the appeal, no order should be made in respect of the declaration. The Drugs Act and the Code The appellant contended that ss 5 and 71AC (read with s 70(1)) of the Drugs Act were, in their application to her, inconsistent with ss 13.1, 13.2 and 302.4 of the Code and therefore invalid by operation of s 109 of the Constitution. This argument was not put in the Court of Appeal. The appellant was permitted to amend her notice of appeal to raise it in this Court. Section 109 of the Constitution provides: "When a law of a State is inconsistent with a law of the Commonwealth, the latter shall prevail, and the former shall, to the extent of the inconsistency, be invalid." It is necessary in considering its application to identify the law of the Commonwealth and the law of the State to which it is said to apply. Section 302.4 of the Code, which creates the offence of trafficking in a controlled drug, is to be found in Pt 9.1 which is entitled "Serious drug 190 (2002) 211 CLR 1 at 38 [63]; [2002] HCA 27. offences"191. Sections 13.1 and 13.2, which appear in Pt 2.6, relate to the burden and standard of proof on the prosecution in criminal proceedings. A number of the offences created by the provisions of Pt 9.1 relate to conduct also covered by offence-creating provisions of the Drugs Act and other State and Territory laws. That congruence raises the possibility of inconsistency attracting the operation of s 109 of the Constitution in the way explained by Dixon J in Ex parte McLean192: "The inconsistency does not lie in the mere coexistence of two laws which are susceptible of simultaneous obedience. It depends upon the intention of the paramount Legislature to express by its enactment, completely, exhaustively, or exclusively, what shall be the law governing the particular conduct or matter to which its attention is directed." Against that possibility, the Parliament of the Commonwealth enacted s 300.4 of the Code. Section 300.4 provides that Pt 9.1 is not intended to exclude or limit the concurrent operation of any law of a State or Territory193, including a law that makes an act or omission that is an offence against a provision of Pt 9.1, or a similar act or omission, an offence against the law of the State or Territory194. That asserted absence of an exclusionary intention applies even if the law of the State or Territory provides for a penalty for the offence that differs from the penalty provided for in Pt 9.1195. It also applies if the State or Territory law provides for a fault element or defence in relation to the offence that differs from those applicable to the offence under Pt 9.1196. The coexistence of Commonwealth and State laws creating offences based upon the same or very similar conduct also raises the logical possibility that a person might be prosecuted and convicted of substantially the same offence under State and Commonwealth laws. Section 4C(2) of the Crimes Act 1914 (Cth) ("the Crimes Act") provides, inter alia, that where an act or omission constitutes an offence under both a law of the Commonwealth and a law of a 191 Section 300.1(1) of the Code states the purpose of Pt 9.1 as being "to create offences relating to drug trafficking and to give effect to the United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, done at Vienna on 20 December 1988." 192 (1930) 43 CLR 472 at 483; [1930] HCA 12. 193 Code, s 300.4(1). 194 Code, s 300.4(2). 195 Code, s 300.4(3)(a). 196 Code, s 300.4(3)(b) and (c). State and an offender has been punished for that offence under the law of the State, the offender shall not be liable to be punished for the offence under the law of the Commonwealth. It is of some importance in the present case. It is one of a class of "roll-back" mechanisms which operate in different ways in a number of Commonwealth laws197. It qualifies, conditionally, the application of all Commonwealth laws creating offences. It is therefore to be read with any such inconsistency of an offence-creating law when Commonwealth law with a law of a State creating the same or a similar offence. That is not to say it is determinative of the question of inconsistency in every case in which it operates. Inconsistency may arise in different ways, some of which may not be amenable to "roll-back" mechanisms. judging any asserted Section 302.4(1) makes it an offence to traffic in a substance which is a controlled drug and provides for a penalty of imprisonment for 10 years or 2,000 penalty units or both. The fault element for the requirement that the substance be a controlled drug is recklessness198. It is not in dispute that methylamphetamine is a controlled drug for the purposes of the Code199. The maximum penalty for the like offence under s 71AC of the Drugs Act is 15 years imprisonment. If a person has possessed a trafficable quantity of a substance, the person is taken, by operation of s 302.5(1) of the Code, to have had the necessary intention or belief concerning the sale of the substance to have been trafficking in the substance. That presumption does not apply if the person "proves that he or she had neither that intention nor belief."200 The trafficable quantity in relation to methamphetamine is two grams. The applicable traffickable quantity for the purposes of s 71AC of the Drugs Act in this case was six grams. Section 73(2) of the Drugs Act makes possession of a traffickable quantity of a relevant drug prima facie evidence of "possession for sale". It is apparent that the terms of s 73(2) impose a lesser burden on an accused person in possession of a traffickable quantity of a drug than that which is imposed by s 302.5 of the Code. No submission was made that the difference gives rise to an inconsistency between s 71AC of the Drugs Act and s 302.4 of the Code which would attract 197 Leeming, Resolving Conflicts of Laws, (2011) at 166-167 and examples there given. 198 Code, s 302.4(2). 199 As noted in the Reasons of Crennan and Kiefel JJ at [614], methylamphetamine is the same substance as methamphetamine. Methamphetamine is listed as a controlled drug: Code, s 314.1(1), item 9. 200 Code, s 302.5(2). the application of s 109. As noted by Gummow J in his reasons201, this difference has the effect that the State law is less stringent in its application than the Code. In Dickson v The Queen202, on the other hand, the relevant provisions of the Code were held to have left at liberty what s 109 would not permit to be "closed up" by State law203. Dickson does not assist the appellant in this case. The term "traffics" is defined in s 302.1 by reference to a number of activities, each of which constitutes trafficking, and includes204: "the person possesses the substance with the intention of selling any of it." This aspect of the definition of "traffics" is similar to the definition of "traffick" in s 70(1) of the Drugs Act. Where possession is an element of an offence against s 302.4 as charged then, pursuant to s 13.1 of the Code, the burden of proving possession rests upon the prosecution. In this respect s 302.4 of the Code and s 71AC of the Drugs Act impose similar requirements, subject to the requirement under the Code to have regard to defined fault elements in relation to offences. There is no equivalent in the Code to s 5 of the Drugs Act relating to possession205. the mode of The appellant relied upon differences trial for Commonwealth offences and offences against the law of Victoria. A verdict of guilty after a trial on indictment for an offence against a law of the Commonwealth must be unanimous. That is a requirement of s 80 of the Constitution as explained by this Court in Cheatle v The Queen206. On the other hand, a verdict after a trial on indictment for an offence against the law of Victoria may be the verdict of a majority of the jury207. Sentencing for an offence against the Code is carried out according to the provisions of Pt IB of the 201 Reasons of Gummow J at [276]. 202 (2010) 241 CLR 491; [2010] HCA 30. 203 Reasons of Gummow J at [276]. 204 Code, s 302.1(1)(e). 205 The Code does, however, define possession to include "receiving or obtaining possession", "having control over the disposition" and "having joint possession" of a thing: Code, s 300.2. 206 (1993) 177 CLR 541; [1993] HCA 44. See also Brownlee v The Queen (2001) 207 CLR 278; [2001] HCA 36. 207 Juries Act 2000 (Vic), s 46. Crimes Act. Sentencing for offences against the laws of Victoria is carried out according to the Sentencing Act 1991 (Vic). A significant element of the appellant's inconsistency argument rested on the premise that s 5 of the Drugs Act could be invoked by the prosecution to prove "possession for sale" of drugs and thereby the commission of an offence against s 71AC of the Act. As explained earlier, that premise is wrong. The appellant's argument that s 71AC is "directly" inconsistent with s 302.4 because it effectively brings within its scope mere occupation of premises where a traffickable quantity of drugs is present, and thereby criminalises conduct not prohibited by s 302.4, does not arise for consideration. As to the modes of trial and the different sentencing regimes applicable to the Commonwealth and State offences, I agree with the views expressed by Gummow J208. That is to say, s 71AC is not to be read with Victorian statutes governing the operation of the system for the adjudication of criminal guilt, and judged for consistency with s 302.4 of the Code read with the requirements for mode of trial and sentencing under Commonwealth law. The appellant pointed to the different maximum penalties applicable to the offence of trafficking under the Drugs Act and under the Code. Her argument about these differences is sufficiently answered by reference to s 4C(2) of the Crimes Act and its "roll-back" of an offence-creating provision of a law of the Commonwealth where a person has been convicted and punished for an offence against State law constituted by the same act or omission. The State law, in substance, prohibits conduct which is prohibited by the Commonwealth law. Section 4C(2) operates notwithstanding that the State law may qualify the incidence and standard of the burden of proof, and attract different modes of trial and different sentencing provisions. In that respect it accommodates federal diversity falling short of invalidating inconsistency. I agree with the reasons given by Gummow J209, in this respect, for rejecting the appellant's argument of inconsistency based on the different maximum penalties applicable under the Commonwealth and State laws. I agree with what Gummow J has said concerning the operation of s 300.4 of the Code210. I also agree with the observation of Hayne J that the relevant "intention" of the Federal Parliament is that which is disclosed by the 208 Reasons of Gummow J at [237]. 209 Reasons of Gummow J at [246]-[257]. 210 Reasons of Gummow J at [266]-[272]. conventional processes of statutory construction211. That general proposition was recently reiterated by six Justices of this Court in Lacey212: "Ascertainment of legislative intention is asserted as a statement of compliance with the rules of construction, common law and statutory, which have been applied to reach the preferred results and which are known to parliamentary drafters and the courts. β¦ The application of the rules will properly involve the identification of a statutory purpose, which may appear from an express statement in the relevant statute, by inference from its terms and by appropriate reference to extrinsic materials. The purpose of a statute is not something which exists outside the statute. It resides in its text and structure, albeit it may be identified by reference to common law and statutory rules of construction." I agree also that any express statement in a federal law of the Federal Parliament's "intention" is relevant to the determination of inconsistency for the purposes of s 109213, but not determinative. Conclusion The appeal should be allowed. In my opinion the following orders should be made: Appeal allowed. Set aside paragraphs 1 to 4 of the Order of the Court of Appeal of the Supreme Court of Victoria dated 25 March 2010 and, in their place, order that: leave to appeal to that Court against conviction be granted; the appeal to that Court be allowed; the appellant's conviction be set aside; and 211 Reasons of Hayne J at [315]. 212 Lacey v Attorney-General (Qld) (2011) 85 ALJR 508 at 521-522 [43]-[44] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ; 275 ALR 646 at 660- 213 Reasons of Hayne J at [316]. the matter be remitted to the County Court of Victoria for retrial. The second respondent pay two thirds of the appellant's costs in this Court. 114 GUMMOW J. This appeal from the Court of Appeal of the Supreme Court of Victoria (Maxwell P, Ashley and Neave JJA)214 raises a plethora of complex issues. The appeal attracted interventions by the Commonwealth, New South Wales, South Australia, Western Australia, Tasmania and the Australian Capital Territory. Submissions, as amicus curiae, were received from the Human Rights Law Centre. As will appear, several of these issues are of major importance in the exercise by this Court of its authority to determine matters arising under the Constitution or involving its interpretation, and the significance of the outcome will extend well beyond the resolution of this appeal. These reasons are organised as follows: [A] THE COURSE OF THE LITIGATION [B] THE OFFICE OF THE DIRECTOR OF PUBLIC PROSECUTIONS FIVE ADDITIONAL MATTERS The Charter and s 5 of the Drugs Act Section 5 and s 71AC of the Drugs Act Section 75(iv) of the Constitution The validity of s 36 of the Charter Section 109 of the Constitution PRIMARY CONCLUSION β STEPS (i)-(xiii) THE RELEVANCE OF OTHER CHARTER SYSTEMS β STEPS (i), (ii) AND (iii) THE RELATIONSHIP BETWEEN PTS 2 (ss 7-27) AND 3 (ss 28-39) OF THE CHARTER β STEPS (iv), (v) AND (vi) [G] VALIDITY OF s 36 AND SEVERANCE β STEPS (vii), (viii) AND (ix) SECTION 5 OF THE DRUGS ACT β STEPS (x) AND (xi) CONCLUSIONS β STEPS (xii) AND (xiii) SECTION 109 OF THE CONSTITUTION The issues The derivation and place of s 109 What comprises "a law of the Commonwealth" and "a law of a State" Inconsistency and federalism Operational inconsistency The importance of statutory construction 214 R v Momcilovic (2010) 25 VR 436. "Covering the field" Statements of legislative intention The position of the appellant [K] RESULT AND ORDERS [A] THE COURSE OF THE LITIGATION On 17 March 2010, the Court of Appeal dismissed the appellant's application for leave to appeal against her conviction of 23 July 2008 in the County Court (Judge Murphy and a jury) on a count of trafficking in a drug of dependence, contrary to s 71AC of the Drugs, Poisons and Controlled Substances Act 1981 (Vic) ("the Drugs Act"). However, the Court of Appeal granted the appellant leave to appeal against her sentence and allowed the appeal. The sentence of two years and three months' imprisonment was set aside and the appellant was resentenced the 16 months not already served; she had been in custody for two months before she was granted bail pending the appeal215. imprisonment, suspending to 18 months' The Court of Appeal also made a "declaration" pursuant to s 36(2) of the Charter of Human Rights and Responsibilities Act 2006 (Vic) ("the Charter"). This was to the effect that the "reverse onus" provision in s 5 of the Drugs Act cannot be interpreted consistently with the human right identified in s 25(1) of the Charter. Section 25(1) provides that "[a] person charged with a criminal offence has the right to be presumed innocent until proved guilty according to law". Section 5 of the Drugs Act states: "Without restricting the meaning of the word possession, any substance shall be deemed for the purposes of this Act to be in the possession of a person so long as it is upon any land or premises occupied by him or is used, enjoyed or controlled by him in any place whatsoever, unless the person satisfies the court to the contrary." (second emphasis added) The count based on s 71AC was contained in a presentment filed in the County Court on 21 July 2008. The Particulars of Offence stated that the offence had been committed several years previously, on 14 January 2006. The trial thereupon proceeded and the jury returned its verdict on 23 July 2008; the verdict was unanimous and there was no occasion for the prosecution to seek the application of the majority verdict provisions in the Juries Act 2000 (Vic)216. 215 (2010) 25 VR 436 at 487 [198]-[200]. 216 cf Re Rozenes; Ex parte Burd (1994) 68 ALJR 372 at 373; 120 ALR 193 at 194-195; [1994] HCA 11. The appellant was born in 1967. In his sentencing remarks the trial judge described her as highly intelligent. She is a law graduate of Monash University and holds multiple undergraduate and postgraduate degrees. The appellant held a practising certificate and was employed in Melbourne as an intellectual property consultant. She owned and occupied an apartment on the 14th floor of a high-rise apartment block in the central business district of Melbourne at 265 Exhibition Street. The appellant had lived with Mr Velimir Markovski in the apartment since about 2002. Markovski gave his occupation as that of motor mechanic and he owned an apartment on the 25th floor of the same apartment block. He had previously been convicted of trafficking in heroin. In about December 2005, Markovski became the subject of a police operation targeting drug trafficking, and telephone interceptions and surveillance footage indicated that he was involved in drug trafficking activities conducted from the 14th floor apartment. On 14 January 2006, police officers entered the apartment under a search warrant, having been let in by the appellant. They found at various locations in the apartment (including the refrigerator and the kitchen cupboard) quantities of methylamphetamine with a wholesale value of about $100,000. Markovski was convicted of trafficking in methylamphetamine and cocaine between 9 December 2005 and 14 January 2006, and on 15 November 2007 he was sentenced to four years' imprisonment. In his evidence at the appellant's trial, Markovski said that the methylamphetamine was in his possession for trafficking and that the appellant had no knowledge of the drugs or of his trafficking operation. The prosecution accepted that there was no evidence of the appellant's active participation in these activities but maintained that she was aware that Markovski was trafficking and storing the methylamphetamine in her apartment. Before proceeding further, it is convenient to consider the position of the Director of Public Prosecutions ("the DPP") in this case and the issues which emerged in argument in this Court respecting the application of the Charter to the institution and conduct of the prosecution. [B] THE OFFICE OF THE DIRECTOR OF PUBLIC PROSECUTIONS The office of the DPP is established by Pt IIIA (ss 87AA-87AF) of the Constitution Act 1975 (Vic) ("the Constitution Act"). The prosecution of the appellant was instituted, prepared and conducted on behalf of the Crown in right of the State of Victoria, but those "functions" of prosecution are conferred on and exercised by the DPP by force of s 22(1)(a) of the Public Prosecutions Act 1994 (Vic) ("the Public Prosecutions Act"). Section 22(1)(a) confers like functions with respect to appeals to the Court of Appeal and to this Court. The Charter is expressed to bind the Crown in right of Victoria (s 6(4)). The Charter also states that "[a]ll persons have the human rights set out in Part 2 [ss 7-27]" (s 6(1)), and that the Charter applies to the Parliament, to courts and tribunals, and also to "public authorities" to the extent that they have functions to which provisions including s 38 apply (s 6(2)). The definition of "public authority" in s 4 includes "an entity established by a statutory provision that has functions of a public nature" (s 4(1)(b)), but does not apply to a court except when it is acting in an administrative capacity (s 4(1)(j)). In general terms, s 38 of the Charter provides that "it is unlawful" for a public authority, in making a decision which is not of "a private nature" (s 38(3)), "to fail to give proper consideration to a relevant human right" (s 38(1)). However, and importantly, s 38(1) does not apply if, as a result of a statutory provision, the public authority "could not reasonably have acted differently or made a different decision" (s 38(2)). No point was sought to be taken at trial or in the Court of Appeal that the DPP had contravened s 38(1) in the institution, preparation and conduct of the prosecution of the appellant. The DPP is the first respondent in this Court. (The Attorney-General for Victoria is the second respondent.) When the matter was raised in this Court, the DPP emphasised that the effect of the Constitution Act and Public Prosecutions Act is that proceedings in respect of indictable offences in the Supreme Court and the County Court are brought on behalf of the Crown. Hence, it was said, the identification of the first respondent to this appeal as the Crown217. Reference was made to the position in Victoria before the creation by statute of the office of the DPP and the discussion by the Full Court of the Supreme Court in R v Parker218. But it may be noted that, in Parker219, Young CJ agreed that making presentment at a court "involved an act of a formal or public or official character such as the filing of it in the Court". The DPP is "an entity established by a statutory provision" with functions which are of a "public nature", within the meaning of s 4(1)(b) of the Charter. Section 38 then is engaged in the manner described above. The effect of s 39(3) is that breach of the Charter does not of itself give rise to entitlement to an award of damages220. But the effect of the balance of s 39 is that the complainant may 217 cf Zecevic v Director of Public Prosecutions (Vict) (1987) 162 CLR 645; [1987] HCA 26. 219 [1977] VR 22 at 25. 220 cf Simpson v Attorney-General (Baigent's Case) [1994] 3 NZLR 667 at 675-678, and Taunoa v Attorney-General [2008] 1 NZLR 429 at 514-518 [231]-[242], with (Footnote continues on next page) seek such other remedy as the complainant may have on a ground of unlawfulness arising because of the Charter. The submissions to this effect by the Victorian Equal Opportunity and Human Rights Commission ("the Commission") should be accepted. (The Commission before the Court of Appeal exercised its right of intervention conferred by s 40 of the Charter and in this Court is the third respondent.) However, the reasons which follow will seek to show that no Charter right of the appellant was contravened in her prosecution, conviction and sentence. The result is that it is unnecessary to enter upon the subject of whether, if the DPP had contravened s 38 of the Charter in the institution, preparation and conduct of the County Court prosecution, the appellant would have had available the common law curial remedy of a stay of the prosecution for abuse of process221, or some other remedy, including the subsequent exercise of clemency by the Executive. FIVE ADDITIONAL MATTERS The Charter and s 5 of the Drugs Act No point was taken at trial concerning the application of the Charter to the construction of s 5 of the Drugs Act. The trial judge had instructed the jury that s 5 imposed on the appellant a legal burden to prove on the balance of probabilities that she had no knowledge of the presence of methylamphetamine in her apartment. It was only in the Court of Appeal that the appellant submitted, albeit unsuccessfully, that the Charter required that s 5 be read, in its application to s 71AC, as imposing upon her no more than an evidentiary burden. The appellant renewed the submission in this Court. The construction of s 5 and its place in the scheme of the Drugs Act are considered in Section [H]. respect to the New Zealand Bill of Rights Act 1990 (NZ), which makes no express provision requiring or permitting damages awards but under which such awards are made; and City of Vancouver v Ward [2010] 2 SCR 28 at 34, with respect to s 24(1) of the Canadian Charter of Rights and Freedoms, which empowers the courts to grant such remedies to individuals for infringement of Charter rights as they consider "appropriate and just in the circumstances", including, as decided in Vancouver, damages. 221 See Barton v The Queen (1980) 147 CLR 75; [1980] HCA 48; Dupas v The Queen (2010) 241 CLR 237; [2010] HCA 20. Section 5 and s 71AC of the Drugs Act The second additional matter is that in construing the Drugs Act, a question is presented whether, whatever may be the effect of the Charter upon s 5 and whatever other operation the phrase in s 5 "for the purposes of this Act" may have, s 5 applies at all to the offence created by s 71AC. Section 71AC appears in Pt V (ss 70-80) of the Drugs Act, which is headed "DRUGS OF DEPENDENCE AND RELATED MATTERS". For that Part, s 70(1) provides its own definitions. These include a definition of "traffick" which includes in par (c) thereof: "sell, exchange, agree to sell, offer for sale or have in possession for sale, a drug of dependence". (emphasis added) Section 71AC then prohibits a person from, without authority, "trafficking" in a drug of dependence, for example, by having it in his or her possession for sale. The appellant submitted in this Court that the words in par (c) of the definition of "traffick" which are emphasised above provide a composite expression from which the words "have in possession" are not to be severed; on the other hand s 5 of the Drugs Act speaks only to "possession" per se and so is not engaged by s 71AC. As will appear from Section [H] of these reasons, these submissions should be accepted. Section 75(iv) of the Constitution The third additional matter is as follows and may be disposed of forthwith. The presentment was filed, as noted above, some years after the date of the offence alleged. At trial the appellant gave unchallenged evidence that she had leased out the apartment in Melbourne and had moved to Queensland, where she now resided at Main Beach and pursued her occupation of a registered trademarks attorney. That meant that, while the appellant had the human rights conferred by the Charter because she was being prosecuted in a Victorian court and giving evidence at her trial, she was a resident of Queensland within the meaning of s 75(iv) of the Constitution222. It was only in this Court that the significance of these facts became apparent from the submissions presented by Western Australia as intervener. Section 75(iv) relevantly provides that this Court shall have original jurisdiction in "all matters ... between a State and a resident of another State". The term "matter" is the "widest term" to denote justiciable controversies and its 222 R v Oregan; Ex parte Oregan (1957) 97 CLR 323 at 332-333; [1957] HCA 18. application to s 75(iv) "falls to be determined by reference to the substantial subject matter of the controversy"223. In Re McBain; Ex parte Australian Catholic Bishops Conference224, in a passage relied upon in the present case by Western Australia, Gaudron and Gummow JJ said: "More broadly, there is no general proposition respecting Ch III that the 'immediate right, duty or liability to be established by the determination of the Court', spoken of in In re Judiciary and Navigation Acts225, must be a right, duty or liability in which the opposing parties have correlative interests. Thus, the prosecutor of an offence against a law of the Commonwealth and the defendant do not have correlative interests. Nevertheless, the proceeding seeks to vindicate and enforce the duty or liability of the to observe Commonwealth." the defendant the criminal law of In that regard, in a statement in R v Kidman226, which is equally applicable to the States of the Commonwealth, Griffith CJ (with the support of Isaacs J227) said: "In my opinion it is a function of the Executive Government of every sovereign State, and therefore of the Government of the Commonwealth, to invoke the aid of the judicial power of the State for any purposes for which it may properly be invoked, which purposes include the punishment of offences committed against its laws. The mode of invoking that aid is by a litigious proceeding which is commonly and properly described in such a context by the word 'matter'." Dr Wynes described the view of Griffith CJ and Isaacs J as appearing "to be plainly correct"228. The submission by the Commonwealth and by Western 223 Crouch v Commissioner for Railways (Q) (1985) 159 CLR 22 at 37; [1985] HCA 69. 224 (2002) 209 CLR 372 at 407 [67]; [2002] HCA 16. See also Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (2000) 200 CLR 591 at 660 [183] per Hayne J; [2000] HCA 11. 225 (1921) 29 CLR 257 at 265; [1921] HCA 20. 226 (1915) 20 CLR 425 at 438; [1915] HCA 58. 227 (1915) 20 CLR 425 at 444. 228 Wynes, Legislative, Executive and Judicial Powers in Australia, 5th ed (1976) Australia that a criminal prosecution by a State of a resident of another State is a "matter" of a kind specified in s 75(iv) should be accepted. The "Crown" on behalf of which the prosecution of the appellant was brought is the Crown in right of the State of Victoria229. The Attorney-General for Victoria referred to decisions of the United States Supreme Court230 which indicated that it was recognised in 1900 that the diversity jurisdiction established by Art III Β§2 of the United States Constitution did not extend to criminal proceedings. But, as Western Australia emphasised in response, the position of the States in the Australian federal structure does not correspond to that of the States in the American federal structure231; further, the term "matter" differs from "controversies", the term used in Art III Β§2232. The significance of the scope of s 75(iv) does not rest upon the unlikely event of a State instituting a prosecution in the original jurisdiction of this Court. Rather, it lies in the conferral in broad terms by the Judiciary Act 1903 (Cth) ("the Judiciary Act") of federal jurisdiction upon State courts and in the avenue of appeal to this Court which s 73(ii) of the Constitution provides in respect of any court of a State exercising federal jurisdiction. Because the prosecution of the appellant was a "matter" which was "between a State and a resident of another State", the County Court was invested with federal jurisdiction by s 77(iii) of the Constitution and s 39(2) of the Judiciary Act, and the judicial power of the Commonwealth was engaged. This is so whether or not that was apparent at the time to the County Court233. The validity of s 36 of the Charter The fourth additional matter is that the submissions to the Court of Appeal presented no opposition to the making of the declaration of inconsistent interpretation under s 36 of the Charter on the grounds that the power conferred upon the Supreme Court is invalid because it engages the Supreme Court in an 229 cf Commonwealth v Westwood (2007) 163 FCR 71 at 80-82 [46]-[54]. 230 Chisholm v Georgia 2 US 419 at 431-432 (1793); Wisconsin v Pelican Insurance Co 127 US 265 at 289-290, 298 (1888). 231 See John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503 at 530 [52]-[53]; [2000] HCA 36. 232 Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (2000) 200 CLR 591 at 603 [21], 610 [42], 650 [156], 670 [213]. 233 Agtrack (NT) Pty Ltd v Hatfield (2005) 223 CLR 251 at 261 [26]; [2005] HCA 38. activity repugnant to the judicial process in a fundamental degree234, and that s 36 is invalid whether or not the Supreme Court in a given case is exercising federal jurisdiction. This contention, if made good in this Court, would present issues of severance of s 36 from the balance of the Charter. The issues of severance also emerged only in this Court. As will appear from Section [G] of these reasons, s 36 of the Charter is invalid, as are ss 33 and 37, but they may be severed. Section 109 of the Constitution The fifth additional matter concerns s 109 of the Constitution. Neither at the trial nor in the Court of Appeal was any point taken referring to the existence of the serious drug offences in Pt 9.1 of Ch 9 of the Criminal Code (Cth) ("the Code"). These offences include that created by s 302.4, which is concerned with trafficking in controlled drugs. No point was taken that, by reason of s 302.4 of the Code, s 109 of the Constitution had rendered inoperative235 the provisions of the Drugs Act under which the appellant had been convicted. For the purposes of Pt 9.1 of the Code, a person "traffics" in a substance if "the person possesses the substance with the intention of selling any of it" (s 302.1(1)(e)). This may be compared with par (c) of the definition of "traffick" in s 70(1) of the Drugs Act, set out above in dealing with the second additional matter236. Section 302.4 of the Code is headed "Trafficking controlled drugs" and states: "(1) A person commits an offence if: the person traffics in a substance; and the substance is a controlled drug. Penalty: Imprisonment for 10 years or 2,000 penalty units, or both. The fault element for paragraph (1)(b) is recklessness." 234 See International Finance Trust Co Ltd v New South Wales Crime Commission (2009) 240 CLR 319; [2009] HCA 49; South Australia v Totani (2010) 242 CLR 1; [2010] HCA 39; Wainohu v New South Wales (2011) 85 ALJR 746 at 775 [105]; 278 ALR 1 at 36; [2011] HCA 24. 235 See Butler v Attorney-General (Vict) (1961) 106 CLR 268; [1961] HCA 32, which indicates that "invalid" in s 109 is better understood as meaning that the State law is "inoperative" while the federal law remains in force. Section 4AA of the Crimes Act 1914 (Cth) ("the Crimes Act") stipulates that a penalty unit is $110. Section 71AC of the Drugs Act states: "A person who, without being authorized by or licensed under this Act or the regulations to do so, trafficks or attempts to traffick in a drug of dependence is guilty of an indictable offence and liable to level 4 imprisonment (15 years maximum)." The greater penalty which may be imposed under the law of the State will be apparent. The federal law also attracts the requirement in s 80 of the Constitution of jury unanimity237 and the particular sentencing regime provided by Pt IB (ss 16-22A) of the Crimes Act. However, the jury was unanimous in finding the appellant guilty and the sentence she received was well under the maximum specified in both the federal and the State law. In this Court, the appellant submitted an alternative argument to her other arguments. They would lead to success on the appeal but would not necessarily avoid a retrial. The alternative argument is that, by operation of s 109 of the Constitution, s 71AC of the Drugs Act was inoperative, with the result that the presentment should be quashed and the sentence set aside. It is convenient to deal first with the issues on the appeal which do not involve alleged inconsistency of State and federal laws. PRIMARY CONCLUSION β STEPS (i)-(xiii) My primary conclusion is that the appeal should be allowed, the orders of the Court of Appeal (including its declaration) set aside, leave to appeal against conviction granted, the appeal allowed and a declaration made of the invalidity of ss 33, 36 and 37 of the Charter. The question then is whether the conviction should be set aside and a new trial ordered, or whether the presentment should be quashed and the conviction set aside. That latter outcome depends upon the operation of s 109 of the Constitution upon the Drugs Act and further consideration of this matter will be deferred to Section [J] of these reasons. The primary conclusion stated above is reached in 13 steps, as follows: The human rights systems established in the United Kingdom, Canada, South Africa, New Zealand and Hong Kong provide only limited assistance in construing the Charter. They present imperfect analogues. None of them involves legislation of a state or provincial legislature in a 237 Cheatle v The Queen (1993) 177 CLR 541; [1993] HCA 44. federal structure with a rigid constitution. The competence of the Parliament of Victoria is constrained by the Constitution (ss 106, 107) and thus, for example, by the operation of federal jurisdiction and by what may be identified as the Kable principle, which is considered in Section [G] of these reasons. The Human Rights Act 2004 (ACT) has a structure which to a greater degree resembles that of the Charter, but there is no identity of expression in the critical provisions of the Territory law respecting the reasonable limits upon human rights (s 28) and the interpretation of laws (s 30) and the respective provisions of the Charter The proposition advanced by Lord Steyn in R (Anderson) v Secretary of State for the Home Department238 that the comparable provision to s 36 of the Charter, which appears as s 4 of the Human Rights Act 1998 (UK) ("the UK Act"), was designed to preserve "Parliamentary sovereignty", speaks to a non-Australian universe of constitutional discourse. (It may be noted that in Anderson239 the provision in s 4(2) of the UK Act that the court "may" make a declaration of incompatibility nevertheless was expressed by Lord Steyn as requiring that the court "must" do so in that case, where it had been impossible to apply s 3 to read and give effect to the relevant legislation in a way compatible with Convention rights.) (iii) References to "dialogue"240, going beyond the interaction between the legislature and the courts described in Zheng v Cai241, which is further discussed below at (v), are apt to mislead. Such references encourage consideration of issues of basic constitutional principle which arise on this appeal at a level of generality, upon false assumptions of homogeneity 238 [2003] 1 AC 837 at 894 [58]. See also R v Lambert [2002] 2 AC 545 at 585 [79] per Lord Hope of Craighead, and Ghaidan v Godin-Mendoza [2004] 2 AC 557 at 583 [57] per Lord Millett. 239 [2003] 1 AC 837 at 894 [60]. 240 See Vriend v Alberta [1998] 1 SCR 493 at 565-566; Hogg and Bushell, "The Charter Dialogue Between Courts and Legislatures", (1997) 35 Osgoode Hall Law Journal 75 at 79-82; Hickman, "Constitutional Dialogue, Constitutional Theories and the Human Rights Act 1998", (2005) Public Law 306 at 311-315, 326-330. See also R (ProLife Alliance) v British Broadcasting Corporation [2004] 1 AC 185 at 240 [74]-[76], 258-259 [143]-[144], and Lord Kerr, "The Conversation Between Strasbourg and National Courts β Dialogue or Dictation?", (2009) 44 The Irish Jurist 1. 241 (2009) 239 CLR 446 at 455-456 [28]; [2009] HCA 52. between disparate constitutional systems, and at the expense of analysis of doctrines well established in this Court. It is Pt 2 (ss 7-27) of the Charter which identifies and defines the human rights conferred upon all persons by s 6(1) and which then operate upon the provisions of Pt 3 Div 1 (ss 28-30) (scrutiny of new legislation), Pt 3 Div 2 (s 31) (override declarations by the Parliament), Pt 3 Div 3 (ss 32-37) (interpretation of laws) and Pt 3 Div 4 (ss 38-39) (obligations on public authorities). Section 32 (which is found in Div 3 of Pt 3 of the Charter) requires of the courts identified in s 6(2)(b) that statutory provisions, so far as it is possible to do so, "be interpreted" in a way which is compatible with the human rights identified and defined in Pt 2. The ordinary understanding of "interpret" when applied to statute law is to ascertain the "intention" of the legislature. The metaphor of "intention" must not be permitted to mislead242; "intention" is used here to direct the courts to the objective criteria of construction243 and thus in the particular sense indicated in an important passage in the joint reasons of five Justices in Zheng v Cai244: "It has been said that to attribute an intention to the legislature is to apply something of a fiction245. However, what is involved here is not the attribution of a collective mental state to legislators. That would be a misleading use of metaphor246. Rather, judicial findings as to legislative intention are an expression of the constitutional relationship between the arms of government with respect to the making, interpretation and application of laws. Immigration and As explained in NAAV v Minister for 242 Pape v Federal Commissioner of Taxation (2009) 238 CLR 1 at 132 [389]; [2009] HCA 23. 243 NAAV v Minister for Immigration and Multicultural and Indigenous Affairs (2002) 123 FCR 298 at 410-413 [430]-[434]. 244 (2009) 239 CLR 446 at 455-456 [28]. See also Wilson v Anderson (2002) 213 CLR 401 at 418 [8]; [2002] HCA 29; Dickson v The Queen (2010) 241 CLR 491 at 506-507 [32]; [2010] HCA 30; and see, further, "The importance of statutory construction" in Section [J] below at [258]-[261]. 245 Mills v Meeking (1990) 169 CLR 214 at 234; [1990] HCA 6; Corporate Affairs Commission (NSW) v Yuill (1991) 172 CLR 319 at 339-340; [1991] HCA 28. 246 Singh v The Commonwealth (2004) 222 CLR 322 at 385 [159]; [2004] HCA 43. Multicultural and Indigenous Affairs247, the preferred construction by the court of the statute in question is reached by the application of rules of interpretation accepted by all arms of government in the system of representative democracy." (vi) Section 32 is addressed by s 6(2)(b) to the courts; it confers an interpretative power which when exercised by courts is not offensive to the Kable principle as applied in recent cases including Wainohu v New South Wales248. In particular, s 32 does not confer upon the courts a law-making function of a character which is repugnant to the exercise of judicial power. One result of this is that, upon any appeal to this Court under s 73 of the Constitution, in litigation in which s 32 has been in Mellifont v engaged, no Attorney-General (Q)249 will emerge. the Commonwealth which drew an analogy with interpretation in Project Blue Sky Inc v Australian Broadcasting Authority250 should be accepted. The submissions by the approach that considered issue similar (vii) However, s 36 of the Charter is offensive to the Kable principle and is invalid. (viii) The declaration by the Court of Appeal should be set aside for want of jurisdiction to make it, given the invalidity of s 36; a consequence is that s 36 is absent from the corpus of State law to be "picked up" in this case by s 79 of the Judiciary Act. (It should be added that, in any event, had s 36 not been invalid as just stated, the present case being one in federal jurisdiction s 36 could not have been "picked up": to exercise the power conferred by s 36 would have been beyond the judicial power of the Commonwealth because the Court would have been authorised thereby "to make a declaration of the law divorced from any attempt to administer that 247 (2002) 123 FCR 298 at 410-412 [430]-[432]. 248 (2011) 85 ALJR 746; 278 ALR 1. 249 (1991) 173 CLR 289 at 299-306; [1991] HCA 53. 250 (1998) 194 CLR 355 at 381-382 [69]-[71]; [1998] HCA 28. 251 In re Judiciary and Navigation Acts (1921) 29 CLR 257 at 265-266; see also the remarks of Gaudron J in Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (2000) 200 CLR 591 at 612 [48]. (ix) Section 36 is inseverable from ss 33 and 37 of the Charter and this Court should make the appropriate declaration of invalidity. However, applying s 6(1) of the Interpretation of Legislation Act 1984 (Vic) ("the Victorian Interpretation Act"), the balance of the Charter, including s 32, remains standing; s 6(1) of the Victorian Interpretation Act so operates that the remainder of the Charter is not affected by the circumstance that ss 33, 36 and 37 of the Charter are in excess of the legislative power of the State of Victoria. Section 5 of the Drugs Act had no application to the operation of s 71AC; the reasoning in decisions which apply s 5 to the "possession" offence created by s 73 and other "possession" offences in Pt V of the Drugs Act does not extend to provisions such as s 71AC where the offence itself is identified as "trafficking". (xi) That being so, there was no denial by s 71AC of the Drugs Act of the right to the presumption of innocence which is recognised by s 25(1) of the Charter. (xii) The foregoing condition of the law of Victoria, with the excision of ss 33, 36 and 37 of the Charter and the proper construction of s 71AC of the Drugs Act as indicated in (x) and (xi), then (subject to any anterior operation upon State law of s 109 of the Constitution as considered in Section [J]) was "picked up" by s 79 of the Judiciary Act252. (xiii) The trial miscarried by reason of the misapplication of s 5 of the Drugs Act; this makes it unnecessary to pursue other grounds of alleged misdirection to the jury. There remains the question whether, in any event, no retrial should be ordered and the presentment should be quashed by reason of the operation of s 109 of the Constitution upon the Drugs Act. I turn to consider the primary conclusion and steps (i)-(xiii). 252 See Solomons v District Court (NSW) (2002) 211 CLR 119 at 134-135 [21]-[24]; [2002] HCA 47; Agtrack (NT) Pty Ltd v Hatfield (2005) 223 CLR 251 at 271 [61]-[63]; APLA Ltd v Legal Services Commissioner (NSW) (2005) 224 CLR 322 at 405-407 [226]-[233]; [2005] HCA 44. THE RELEVANCE OF OTHER CHARTER SYSTEMS β STEPS (i), (ii) AND (iii) The Canadian Charter of Rights and Freedoms ("the Canadian Charter") comprises Pt I (ss 1-34) of the Constitution Act 1982 (Can)253. The question whether a statute is inconsistent, for example, with the Canadian Charter presumption of innocence (s 11) presents a constitutional question; this is because the Canadian Charter is entrenched as part of the supreme law of Canada254. The Bill of Rights which comprises Ch 2 (ss 7-39) of the Constitution of the Republic of South Africa of 1996 is likewise entrenched. Further, s 8(3)(a) thereof requires the courts, in order to give effect to a right in the Bill, to develop the common law, if necessary, to the extent that legislation does not give effect to that right. With respect to the Hong Kong Bill of Rights Ordinance, in the present case the Court of Appeal noted that the Basic Law of Hong Kong had been construed as impliedly conferring a curial power to make "a remedial interpretation" which went beyond ordinary common law interpretation255. In R v Lambert256, Lord Slynn of Hadley declared: "It is clear that the [UK] Act must be given its full import and that long or well entrenched ideas may have to be put aside, sacred cows culled." But the subsequent course of authority in the United Kingdom suggests a reluctance to cull entrenched ideas and a preference for their accommodation to the new statutory regime. In the present case the Court of Appeal made extensive reference to House of Lords decisions construing s 3(1) of the UK Act. This requires legislation to be read and given effect, "[s]o far as it is possible to do so", in a way which is compatible with the rights and freedoms guaranteed under the European Convention on Human Rights 1950 ("the European Convention") as set out in Sched 1 to the UK Act. In the present case the Court of Appeal referred extensively257 to the approach to interpretation taken by Lord Nicholls of 253 Enacted by s 1 of the Canada Act 1982 (Imp). 254 R v Oakes [1986] 1 SCR 103 at 119. 255 (2010) 25 VR 436 at 453 [59]. 256 [2002] 2 AC 545 at 561 [6]. 257 (2010) 25 VR 436 at 448-452 [44]-[57]. Birkenhead and Lord Steyn in Ghaidan v Godin-Mendoza258 and to the apparently contrasting approach by Lord Hoffmann in R (Wilkinson) v Inland Revenue Commissioners259. The Charter is not laid out in a scheme which closely resembles the UK Act. The human rights are set out in Pt 2 of the Charter, not by reference to another source; s 7(2), which provides that in certain circumstances a human right may be subjected to reasonable limits, has no counterpart in the UK Act; and s 32(1) of the Charter uses the term "interpreted" with respect to the statutory provisions engaged by s 32(1), rather than the phrase "read and given effect" in s 3(1) of the UK Act. It is not the task of the Australian courts to attempt any resolution of what to some may appear to be an unsettled confluence of various streams of legal thought apparent in the course of decisions to date upon the UK Act. However, in reading the decisions upon the UK Act, several considerations are apparent. First, there appears to be a desire to observe the doctrine which has come to be identified as the sovereignty of the Parliament at Westminster260; this, in turn, presupposes the continued exclusion of the English judges, fully achieved only in the 19th century, from participation in the other branches of government261. Secondly, however, there is the presence today of the system of adjudication which produces the decisions of the European Court of Human Rights applying the European Convention; s 2(1)(a) of the UK Act requires a court or tribunal which is determining a question which has arisen in connection with a right under the European Convention to "take into account" decisions of the court at Strasbourg. The resulting state of affairs is identified in Lord Rodger of Earlsferry's apothegm "Strasbourg has spoken, the case is closed"262. 258 [2004] 2 AC 557 at 571-572 [29]-[33], 573-574 [40]-[41]. 259 [2005] 1 WLR 1718 at 1723-1724 [17]-[18]; [2006] 1 All ER 529 at 535. 260 See, for example, the caution given by Lord Millett against the adoption of "abnormal" methods of statutory construction which would "trespass upon the prerogative of Parliament": Ghaidan v Godin-Mendoza [2004] 2 AC 557 at 584 261 See Jay, "Servants of Monarchs and Lords: The Advisory Role of Early English Judges", (1994) 38 American Journal of Legal History 118 at 186-193. 262 Secretary of State for the Home Department v AF (No 3) [2010] 2 AC 269 at 366 [98]. See also the remarks of Lord Phillips of Worth Matravers at 355-356 [64]-[65], Lord Hoffmann at 356-357 [70], Lord Carswell at 368-369 [108] and Lord Brown of Eaton-under-Heywood at 370 [114]; and see further Lord Kerr, "The Conversation Between Strasbourg and National Courts β Dialogue or Dictation?", (2009) 44 The Irish Jurist 1. Finally, there is the legacy of the winding-up of the British Empire. Numerous post-colonial constitutions conferred a power of "modification" of existing laws to make them conform to the new constitutional norms263. In Roodal v Trinidad and Tobago264, in their dissenting opinion Lord Millett and Lord Rodger observed: "[The] Parliament [of Trinidad and Tobago] apparently does not envisage that there will be an existing law that is not in conformity with the 1976 Constitution Act and yet cannot be construed in such a way as to bring it into conformity. Rather, existing laws are to survive but to conform to the Constitution β if need be, after the necessary modification. Precisely because of this, as the cases show, the courts have repeatedly felt able to go far beyond mere interpretation and have in effect amended the existing laws where that has been necessary to make them conform to the Constitution. R v Hughes265 and Fox v The Queen266 are only the most recent examples." Sharp differences of opinion have emerged in the Privy Council in these cases, exemplified by Matthew v Trinidad and Tobago267 and Boyce v The Queen268. The point to be made here is that in Roodal269 the majority (Lord Bingham of Cornhill, Lord Steyn and Lord Walker of Gestingthorpe) appear to have treated ss 3 and 4 of the UK Act as "reading down" provisions in pari materia the constitutional provisions before the Privy Council in Roodal and other cases. Australian courts must approach the questions presented by the Charter with a clear recognition of two matters: first, the constitutional framework within which those questions are to be decided, and second, the fact that, unsurprisingly, both the structure and the text of other human rights systems 263 Parkinson, Bills of Rights and Decolonization: The Emergence of Domestic Human Rights Instruments in Britain's Overseas Territories, (2007) at 247-263. 264 [2005] 1 AC 328 at 370 [100]. 269 [2005] 1 AC 328 at 345-346 [27]-[28]; cf at 370 [100]. reflect the different constitutional frameworks within which they operate. In particular, in considering decisions made by the House of Lords about the UK Act, or decisions of the Privy Council about human rights charters in force in nations that were once British colonies, there are important differences of both context and text that must not be ignored. The system of federal government in Australia is constructed upon the recognition that there rests upon the judicature "the ultimate responsibility for the maintenance and enforcement of the boundaries within which governmental power might be exercised"270. Judicial review of both the validity of legislation and the lawfulness of administrative action is thus an accepted part of the Australian legal landscape271. By contrast, in the United Kingdom, as noted above, Diceyan notions of parliamentary sovereignty remain influential. Those notions appear to be treated as compatible with the existence of European structures of law-making and adjudication and with the application of the UK Act as some superior form of law alongside the application of the European Convention by the European Court of Human Rights. In R (Jackson) v Attorney General272, Baroness Hale of Richmond, whilst acknowledging that "Scotland may have taken a different view", observed that "[t]he concept of parliamentary sovereignty", which since the 17th century "has been fundamental to the constitution of England and Wales", means that "Parliament can do anything". To this her Ladyship made several qualifications. Any attempt to subvert the rule of law would be viewed by the courts with particular suspicion, and, "for the time being at least", the Parliament, by the European Communities Act 1972 (UK) and the UK Act, has "limited its own powers". The accommodations reached between these apparently competing considerations necessarily affect the way in which doctrines of separation of powers are shaped and applied. Further, as Lord Hoffmann has explained273, the way in which those doctrines are shaped and applied directly affects the decisions that are reached about the content and application of the UK Act. And former 270 R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254 at 276; [1956] HCA 10. 271 Enfield City Corporation v Development Assessment Commission (2000) 199 CLR 135 at 152-153 [43]; [2000] HCA 5. 272 [2006] 1 AC 262 at 318 [159]. 273 R (ProLife Alliance) v British Broadcasting Corporation [2004] 1 AC 185 at 240 British colonies have their own distinctive histories which similarly bear upon these questions. These differences in context and relevant differences in text should not be cloaked by describing issue as "generally accepted" or "fundamental" human rights. That is, the universality of values reflected in various national or international statements of rights does not diminish the importance of considering the constitutional framework within which the Charter operates and recognising that it is to be construed according to its text. the rights Nevertheless, the House of Lords decisions upon the UK Act exercised a fascination to the point of obsession in the preparation and presentation of much of the submissions in the present appeal. That proved unfortunate, as what has been said above seeks to demonstrate. Of greater comparative utility are the decisions upon the New Zealand Bill of Rights Act 1990 (NZ) ("the NZ Act"), particularly that of the Supreme Court in R v Hansen274. Further reference to Hansen is made below. THE RELATIONSHIP BETWEEN PTS 2 (ss 7-27) AND 3 (ss 28-39) OF THE CHARTER β STEPS (iv), (v) AND (vi) The Charter states that it applies to "courts ... to the extent that they have functions under Part 2 and Division 3 of Part 3" (s 6(2)(b)). A question arises (which need not be answered here) whether s 6(2)(b) imposes an obligation upon a court to apply the Charter even in the absence of a point under the Charter being taken by a party before it. Some of the human rights specifically identified and described in Pt 2 are expressed in absolute terms. Examples are the right to the presumption of innocence (s 25(1)), and the rights of freedom of movement (s 12) and of peaceful assembly (s 16(1)). Others, including the right to freedom of expression (s 15), which was considered in Hogan v Hinch275, are so expressed as to permit qualifications which are "reasonably necessary". Section 7(2) states: "A human right may be subject under law only to such reasonable limits as can be demonstrably justified in a free and democratic society based on 274 [2007] 3 NZLR 1. 275 (2011) 85 ALJR 398; 275 ALR 408; [2011] HCA 4. human dignity, equality and freedom, and taking into account all relevant factors including β the nature of the right; and the importance of the purpose of the limitation; and the nature and extent of the limitation; and the relationship between the limitation and its purpose; and any less restrictive means reasonably available to achieve the purpose that the limitation seeks to achieve." (emphasis added) This text presents several questions of construction which need not be resolved here. One is whether the phrase "subject under law" includes the common law. Another is whether provisions such as s 15, which set out specifically qualified rights, are further qualified by s 7(2). A third is the nature and standard of the evidence or other means by which "reasonable limits" are to be held to be "demonstrably justified". Section 7(2) of the Charter may be compared with s 5 of the NZ Act, which also uses the phrases "reasonable limits" and "demonstrably justified". Section 5 is headed "Justified limitations" and s 6 "Interpretation consistent with Bill of Rights to be preferred". In Hansen276, McGrath J said: "As between ss 5 and 6 it will usually be appropriate for a Court first to consider whether under s 5 there is scope for a justified limitation of the right in issue. The stage is then set for ascertaining if there is scope to read the right, as modified by a justifiable limitation, as consistent with the other enactment." Blanchard J277 and Tipping J278 spoke to similar effect. Section 32(1) of the Charter reads: "So far as it is possible to do so consistently with their purpose, all statutory provisions must be interpreted in a way that is compatible with human rights." 276 [2007] 3 NZLR 1 at 65 [191]. 277 [2007] 3 NZLR 1 at 26-28 [57]-[62]. 278 [2007] 3 NZLR 1 at 36-37 [88]-[92]. Section 32(1) is directed to the interpretation of statutory provisions in a way which is compatible with the human right in question, as identified and described in Pt 2, including, where it has been engaged, s 7(2). This relationship between s 32(1) and s 7(2) is thus similar to that between s 5 and s 6 of the NZ Act. No doubt the Parliament of the Commonwealth cannot delegate to courts exercising the judicial power an authority conferring a discretion or choice as to the content of a federal law279. Further, a law of a State, such as the Charter, is not readily construed as conferring such a power upon State courts280. This is because such a State law would require the State courts to act in a fashion incompatible with the proper discharge of their federal judicial responsibilities and with their institutional integrity. However, the reference to "purpose" in such a provision as s 32(1) is to the legislative "intention" revealed by consideration of the subject and scope of the legislation in accordance with principles of statutory construction and interpretation. There falls within the constitutional limits of that curial process the activity which was identified in the joint reasons in Project Blue Sky281. This is so notwithstanding that their Honours were considering conflicting provisions within the one statute. McHugh, Gummow, Kirby and Hayne JJ, before setting out a lengthy passage from Bennion's work Statutory Interpretation282, said283: "The duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have. Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction284 may require the 279 Western Australia v The Commonwealth (Native Title Act Case) (1995) 183 CLR 373 at 486; [1995] HCA 47. 280 Hogan v Hinch (2011) 85 ALJR 398 at 412-413 [40]-[46], 419 [80]; 275 ALR 408 281 (1998) 194 CLR 355. 282 3rd ed (1997) at 343-344. 283 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 384 [78]. See also Kennon v Spry (2008) 238 CLR 366 at 397 [90]; [2008] HCA 56. 284 For example, the presumption that, in the absence of unmistakable and unambiguous language, the legislature has not intended to interfere with basic (Footnote continues on next page) words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning." That reasoning applies a fortiori where there is a canon of construction mandated, not by the common law, but by a specific provision such as s 32(1). Once the significance of the reasoning in Project Blue Sky is appreciated and s 32(1) is understood in the sense described above, it is apparent that the provision does not confer upon the courts a function of a law-making character which for that reason is repugnant to the exercise of judicial power. Section 32(1) is not invalid. [G] VALIDITY OF s 36 AND SEVERANCE β STEPS (vii), (viii) AND (ix) The chapeau to s 36 of the Charter reads "Declaration of inconsistent interpretation". The use here of the term "declaration" may be thought at first blush to carry the reassurance that what is created by s 36 is no more than a new legislative species of the genus identified and well understood as the declaratory order. Any such reassurance would be misplaced. Section 36 provides for a novel regime which does not withstand constitutional scrutiny. Section 36 applies if any of three circumstances are satisfied. These are set out as follows in s 36(1): in a Supreme Court proceeding a question of law arises that relates to the application of this Charter or a question arises with respect to the interpretation of a statutory provision in accordance with this Charter; or the Supreme Court has had a question referred to it under section 33 [by a court or tribunal]; or an appeal before the Court of Appeal relates to a question of a kind referred to in paragraph (a)." The Supreme Court (including the Court of Appeal) is empowered by s 36(2), if, in a proceeding before it, it "is of the opinion that a statutory provision cannot be interpreted consistently with a human right", to proceed to "make a declaration to that effect in accordance with this section". Section 36(2) uses the expression "may make a declaration" rather than "must make a declaration". It is unnecessary to decide whether, if the Supreme Court is of the opinion identified rights, freedoms or immunities: Coco v The Queen (1994) 179 CLR 427 at 437; [1994] HCA 15. in s 36(2), it nevertheless may decline to make the declaration285. This is because it would be no answer, if the conferral of power otherwise were invalid, that the Court might decline to exercise it. If the provision be otherwise invalid, the Court is not to be put in the position of considering whether to act under it. Before proceeding further, it is convenient to reiterate the appropriate starting point for consideration of the validity of s 36 and cognate provisions. In considering the application of Kable v Director of Public Prosecutions (NSW)286, attention to matters of perception and public confidence as distinct and separately sufficient considerations is apt to mislead; the touchstone concerns the institutional integrity of the courts287. Prior to making a declaration of inconsistent interpretation, notice must first be given to the Attorney-General and the Commission (s 36(3)) and they must have been given a reasonable opportunity to intervene (s 36(4)). The Supreme Court "must" cause a copy of a declaration made under s 36(2) to be given to the Attorney-General (s 36(6)), who "must" give a copy thereof to any other Minister who administers the statutory provision concerned (s 36(7)). Section 37 states: "Within 6 months after inconsistent interpretation, the Minister administering the statutory provision in respect of which the declaration was made must β receiving a declaration of prepare a written response to the declaration; and cause a copy of the declaration and of his or her response to it to laid before each House of Parliament; and published in the Government Gazette." 285 cf Hogan v Australian Crime Commission (2010) 240 CLR 651 at 664 [32]-[33]; [2010] HCA 21; Hogan v Hinch (2011) 85 ALJR 398 at 417 [68]; 275 ALR 408 286 (1996) 189 CLR 51; [1996] HCA 24. 287 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 617-618 [102]; [2004] HCA 46; Wainohu v New South Wales (2011) 85 ALJR 746 at 775 [105]; 278 ALR 1 at 36. The written response to the declaration need not accept the conclusion as to incompatibility which was reached by the Supreme Court and which founded the declaration under s 36(2). Counsel for the Attorney-General for Victoria in oral argument in this Court properly accepted that this was so. The declaration of inconsistent interpretation does not have dispositive effect. It cannot be described as a declaration of right, with the characteristics described in Plaintiff M61/2010E v The Commonwealth288 and earlier authorities. Rather, it operates as a declaration of the absence of right. This appears from s 36(5), which provides: "A declaration of inconsistent interpretation does not β affect in any way the validity, operation or enforcement of the statutory provision in respect of which the declaration was made; or create in any person any legal right or give rise to any civil cause of action." As remarked above, the term "declaration" may have been devised as reassurance that this new remedy in s 36 has the character of the declaration of right as it generally is understood. However, in Ainsworth v Criminal Justice Commission289, Mason CJ, Dawson, Toohey and Gaudron JJ said of declaratory relief: "It is now accepted that superior courts have inherent power to grant declaratory relief. It is a discretionary power which '[i]t is neither possible nor desirable to fetter ... by laying down rules as to the manner of its exercise.'290 However, it is confined by the considerations which mark out the boundaries of judicial power. Hence, declaratory relief must be directed to the determination of legal controversies and not to answering abstract or hypothetical questions291. The person seeking relief must have 'a real interest'292 and relief will not be granted if the question 'is purely 288 (2010) 85 ALJR 133 at 152 [103]; 272 ALR 14 at 38-39; [2010] HCA 41. 289 (1992) 175 CLR 564 at 581-582; [1992] HCA 10. 290 Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421 at 437; [1972] HCA 61. 291 See In re Judiciary and Navigation Acts (1921) 29 CLR 257. 292 Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421 at 437; Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd [1921] 2 AC 438 at 448. hypothetical', if relief is 'claimed in relation to circumstances that [have] not occurred and might never happen'293 or if 'the Court's declaration will produce no foreseeable consequences for the parties'294." Section 36(5), the text of which is set out above, denies to the judicial activity required by s 36(2) the character of declaratory relief as ordinarily understood. In Bass v Permanent Trustee Co Ltd295 it was said in the joint reasons of six Justices: "Because the object of the final the determination of the rights of the parties to an action, courts have traditionally refused to provide answers to hypothetical questions296 or to give advisory opinions. The jurisdiction with respect to declaratory relief has developed with an awareness of that traditional attitude." judicial process The declaration of inconsistent interpretation by the Supreme Court pursuant to s 36(2) provides, in substance, formal advice to the Attorney-General which the Supreme Court tenders by causing a copy of the declaration to be given to the Attorney-General, pursuant to s 36(6). The advice is just that. It does not have the added character given to advice tendered by responsible Ministers to the Crown or its representative; namely because the Minister is not required to act on or in accordance with the advice provided by the Supreme Court. Observations by McGrath J in Hansen297 upon the paradoxical operation of s 4 of the NZ Act are also applicable to s 36 of the Charter. In the present case, upon the construction it gave to s 5 of the Drugs Act, the Court of Appeal was bound to give effect to s 5 in its attachment to the s 71AC prosecution, notwithstanding its conclusion that s 5 was not capable of being read consistently 293 University of New South Wales v Moorhouse (1975) 133 CLR 1 at 10; [1975] HCA 26. 294 Gardner v Dairy Industry Authority (NSW) (1977) 52 ALJR 180 at 188, 189; 18 ALR 55 at 69, 71. 295 (1999) 198 CLR 334 at 355-356 [47]; [1999] HCA 9. 296 Luna Park Ltd v The Commonwealth (1923) 32 CLR 596 at 600; [1923] HCA 49; Australian Commonwealth Shipping Board v Federated Seamen's Union of Australasia (1925) 36 CLR 442 at 451; [1925] HCA 27; University of New South Wales v Moorhouse (1975) 133 CLR 1 at 10. 297 [2007] 3 NZLR 1 at 82 [259]. with the right conferred upon the appellant by ss 6(1) and 25(1) of the Charter; further, notwithstanding the declaration made by the Court of Appeal under s 36, the other branches of government came under no obligation to remedy that inconsistency between s 5 and the Charter. If valid, the creation of the advisory structure in s 36 and associated provisions (ss 33 and 37) attempts a significant change to the constitutional relationship between the arms of government with respect to the interpretation and application of statute law. This relationship is described in Zheng v Cai298 in the passage set out in Section [D] of these reasons. In addition, s 36 has the vice described in Wilson v Minister for Aboriginal and Torres Strait Islander Affairs299, namely the giving to the Executive of an advisory opinion upon a question of law. In Wilson that activity by a federal judge as persona designata was incompatible with the holding of that office; thus a fortiori were the function conferred on a federal court. The decision in Wainohu300 indicates that the Supreme Court is in no relevantly different position. In the division between judicial and legislative functions it is appropriately the responsibility of the legislature to decide whether the existing statute law should be altered or replaced301. It is no part of the judicial power, in exercise of a function sought to be conferred on the courts by statute, formally to set in train a process whereby the executive branch of government may or may not decide to engage legislative processes to change existing legislation. Nor is it an answer to the invalidity of a provision such as s 36 that it may be read as conferring a function which the court may or may not decide to exercise. That proposition would require identification of criteria to be applied in deciding when it was imprudent to make a "declaration of inconsistent interpretation". To fix upon the undesirability of undermining the criminal process as a reason for the Supreme Court to decline to act would be unsatisfactory in several respects. First, there is the well-recognised difficulty in classification of proceedings as either civil or criminal in character302. Secondly, the adoption of 298 (2009) 239 CLR 446 at 455-456 [28]. 299 (1996) 189 CLR 1 at 18-19; [1996] HCA 18. 300 (2011) 85 ALJR 746; 278 ALR 1. 301 State Government Insurance Commission v Trigwell (1979) 142 CLR 617 at 634; [1979] HCA 40. 302 Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd (2003) 216 CLR 161; [2003] HCA 49; Rich v Australian Securities and Investments (Footnote continues on next page) such a criterion for the exercise of the power suggests, albeit perhaps sub silentio, an apprehension of partial invalidity were s 36 read as permitting a "declaration of inconsistent interpretation" which would be liable to undermine the criminal process. Thirdly, this course would be adopted without consideration of what might be other odious exercises of the s 36 function, and without consideration of those operations of s 36 which might be severed and those which may be saved as being valid. Nor may s 36 be assimilated to those judicial functions which are not themselves exclusively judicial, and "which considered independently might belong to an administrator", but which are supported because "they are not independent functions but form incidents in the exercise of strictly judicial powers"303. The very circumstances present in this case demonstrate that the "declaration of inconsistent interpretation" which was made by the Court of Appeal was not "an integral part of the process of determining the rights and obligations of the parties which [were] at stake in the proceedings"304. The practical operation of s 36 as described above is incompatible with the institutional integrity of the Supreme Court and therefore the section is invalid. Sections 33 and 37 are integral to the operation of s 36 and are not saved by s 6(1) of the Victorian Interpretation Act. However, the balance of the Charter is not "so bound up" with these provisions that one can fairly say that the former cannot stand without the continued operation of the latter. This is not a case where the balance of the Charter would operate differently by reason of the absence of the particular remedy created by s 36, or where the scheme of the Charter is such that none of its provisions are to operate unless all do305. Commission (2004) 220 CLR 129 at 145 [32]; [2004] HCA 42; Chief Executive Officer of Customs v El Hajje (2005) 224 CLR 159 at 171 [29]; [2005] HCA 35. 303 Queen Victoria Memorial Hospital v Thornton (1953) 87 CLR 144 at 151; [1953] HCA 11; R v Davison (1954) 90 CLR 353 at 368; [1954] HCA 46. See also R v Murphy (1985) 158 CLR 596; [1985] HCA 50; Vasiljkovic v The Commonwealth (2006) 227 CLR 614 at 647 [104]; [2006] HCA 40. 304 Mellifont v Attorney-General (Q) (1991) 173 CLR 289 at 303. 305 Bank of New South Wales v The Commonwealth (1948) 76 CLR 1 at 371; [1948] HCA 7; Pape v Federal Commissioner of Taxation (2009) 238 CLR 1 at 93 [248]. SECTION 5 OF THE DRUGS ACT β STEPS (x) AND (xi) In Tabe v The Queen306, Gleeson CJ referred to the absence from the common law of a logical and exhaustive definition of "possession", and observed that what constitutes "sufficient knowledge" for possession depends upon the purpose for which, and the context in which, the question is asked. In that regard his Honour went on to consider the construction given to s 233B of the Customs Act 1901 (Cth) in He Kaw Teh v The Queen307. The text of s 5 of the Drugs Act has been set out in Section [A] of these reasons, and s 71AC has been set out in Section [C] under the heading "Section 109 of the Constitution". Section 5 deems, in the circumstances postulated, a substance to be in the possession of a person and leaves it to that person to satisfy the court to the contrary. The section has no independent operation; it is enlivened only by attachment to substantive provisions. That attachment then serves to cast a particular burden on the accused and, for that reason, the existence of the attachment must be clearly demonstrated by the statutory text308. There have been several decisions in Victoria involving the application of s 5 to provisions of Pt V of the Drugs Act other than s 71AC. In particular, s 73(1) proscribes having in one's "possession" a drug of dependence. The penalty is then provided in pars (a), (b) and (c). Penalties at a lower level than the five years' imprisonment maximum penalty (par (c)) are provided for in pars (a) and (b) by criteria which include satisfaction on the balance of probabilities of the absence of a purpose "related to trafficking" or "relating to trafficking". Section 73(2) provides that prima facie evidence of trafficking (and thus for these penalty provisions) is provided by "possession" of not less than a traffickable quantity. The operation of s 5 in this setting was described by the Full Court of the Supreme Court of Victoria in R v Clarke and Johnstone309 as follows: "There is a distinct difference in operation between ss 5 and 73(2). The former section operates so that facts establishing less than the possession of a drug by an accused are deemed to establish possession unless the accused satisfies the jury on the balance of probabilities that he 306 (2005) 225 CLR 418 at 423-425 [7]-[11]; [2005] HCA 59. 307 (1985) 157 CLR 523; [1985] HCA 43. 308 See Tabe v The Queen (2005) 225 CLR 418 at 446 [102]. 309 [1986] VR 643 at 659-660. See also Medici (1989) 40 A Crim R 413 at 414-415. was not in possession of it. The latter sub-section operates so that if the accused has in his possession a traffickable quantity of drugs that is prima facie evidence of trafficking by the accused. However, it does not deem any fact to exist nor reverse an onus of proof. If further evidence is placed before the jury on the issue of trafficking the jury decides on the whole of the evidence whether they are satisfied that the accused trafficked in the drug." (emphasis added) The Full Court, earlier in its reasons310, had set out the definition of "traffick" in However, in R v Tragear311 the Court of Appeal gave to s 73(2) an operation beyond providing for prima facie evidence of trafficking for the purposes of the penalty provisions in s 73(1). The absence from s 73(2) of words such as "for the purposes of this section" was taken as indicative that s 73(2) was not purely ancillary to s 73(1) and that s 73(2): (i) applied to the offence itself of "trafficking", and (ii) brought with it the operation of s 5 relating to the "possession" which was prima facie evidence of "trafficking". More recently, in R v Hiep Tan Tran312 the prosecution appears to have relied on s 5 and s 73(2) in support of a count of trafficking contrary to s 71AC. In this Court, the DPP relied upon this course of authority as representing the well-established and orthodox view in Victoria. However, counsel for the appellant pointed to another provision in Pt V of the Drugs Act313 in addition to s 73(1), in which "possession" per se is an element of the offence. Counsel gave other instances of such provisions outside Pt V314. The submissions for the appellant also emphasised that the definition in s 70(1) of "traffick" includes preparation of a drug of dependence for trafficking (par (a)) and manufacture of a drug of dependence (par (b)), as well as "sell, exchange, agree to sell, [or] offer for sale ... a drug of dependence" (par (c)). Each of these forms of trafficking was correctly said by counsel to connote knowledge but not to attract the reverse onus provision in s 5. This result would preserve, for these species of the offence of trafficking proscribed by s 71AC, the 310 [1986] VR 643 at 659. 311 (2003) 9 VR 107 at 116 [39]. 312 [2007] VSCA 19. 313 Section 71A. 314 Sections 13, 14 and 36B(2). common law requirement respecting onus of proof. But the reverse onus would apply only to one species of trafficking, that of which the appellant was convicted. This was said by the appellant to be a paradoxical result. These submissions should be accepted. They support the reading of the phrase in par (c) of the definition of "traffick", to "have in possession for sale", as a composite expression which does not attract s 5 to s 71AC. Further, ss 5, 70(1) and 71AC are to be read, if it is possible to do so consistently with their purpose, in a way compatible with the right to the presumption of innocence under s 25(1) of the Charter. This method of interpretation is required by s 32(1) of the Charter and it provides additional support for what is the construction of these provisions without the aid of s 32(1). The result is that s 5 was not engaged in this prosecution and there was no displacement of the presumption of innocence recognised by s 25(1) of the Charter. CONCLUSIONS β STEPS (xii) AND (xiii) Section 79 of the Judiciary Act renders binding on all courts exercising federal jurisdiction in the State of Victoria the laws of that State in all cases to which they are applicable; this is so except as otherwise provided by laws of the Commonwealth or by the Constitution itself. As already indicated, by force of the Constitution, s 36 of the Charter is invalid and thus in the Court of Appeal proceedings was not attracted by operation of s 79 of the Judiciary Act. Section 5 of the Drugs Act was not applicable to the prosecution of the appellant and for that reason was not attracted by s 79. The trial miscarried by reason of a wrong decision on a question of law, being the misapplication of the Drugs Act, and a substantial miscarriage of justice ensued315. Independently of the misdirection based upon s 5, it was alleged by the appellant that there were other significant misdirections by the trial judge. However, it is unnecessary to pursue these questions. The Court of Appeal should have granted leave to appeal against conviction, and allowed the appeal. 315 Crimes Act 1958 (Vic), s 568(1). This was repealed with effect 1 January 2010 by the Criminal Procedure Act 2009 (Vic), but not with respect to sentences imposed before that day: Criminal Procedure Amendment (Consequential and Transitional Provisions) Act 2009 (Vic), s 58, which inserted savings and transitional provisions in the principal Act. However, there remain the issues respecting the operation of s 109 of the Constitution, which, were they to be resolved favourably to the appellant, would deny a foundation for the count based on s 71AC of the Drugs Act and require the quashing of the presentment and of the conviction. But, in any event, this Court should make a declaration that ss 33, 36 and 37 of the Charter are invalid. SECTION 109 OF THE CONSTITUTION The issues Several issues of principle respecting s 109 of the Constitution are presented by the submissions made to this Court. The first is whether the alleged inconsistency between s 302.4 of the Code (which is in Pt 9.1) and s 71AC of the Drugs Act is to be determined solely by reference to differences between the elements of the two offences as they appear in s 302.4 and s 71AC. This issue should be answered in the negative. The second issue of principle is whether, even if there were no significant differences between the norms of conduct proscribed by the two laws, inconsistency nevertheless would appear from either or both: (a) the presence of differing penalty provisions, including provisions as to the principles to be applied in fixing the terms of the sentence316; and (b) different methods of determination by jury trial of contravention of those norms, with there being no permissible system of majority verdicts where s 80 of the Constitution operates317. The answer to both (a) and (b) again should be in the negative. The third issue concerns the significance to be attached to both the provision in s 300.4 of the Code (which, like s 302.4, is found in Pt 9.1) in respect to "concurrent operation" of federal and State laws, and the presence of a choice available between federal and State prosecuting authorities to determine in a given case under which law a prosecution is to be brought. With further reference to this third issue, the Attorneys-General of the Commonwealth, New South Wales, Victoria, South Australia, Western Australia, Tasmania and the Australian Capital Territory all join in submitting that "an express statement of Commonwealth legislative intention" is effective "for the purpose[s] of s 109", provided only that the statement be supported by a head of federal legislative 316 In the present case, in accordance with Pt IB of the Crimes Act and the Sentencing Act 1991 (Vic): see Hili v The Queen (2010) 85 ALJR 195; 272 ALR 465; [2010] HCA 45. 317 Cheatle v The Queen (1993) 177 CLR 541. power and by the substantive provisions of the federal law in question. That submission, as explained below under the heading "Statements of legislative intention", is too broadly framed. It is convenient to begin by attending to some basic considerations respecting the derivation of s 109 and its place in the structure of the Constitution. The derivation and place of s 109 Section 109 states: "When a law of a State is inconsistent with a law of the Commonwealth, the latter shall prevail, and the former shall, to the extent of the inconsistency, be invalid." The interaction of federal and state or provincial laws must be a matter of first importance in framing a federal constitution. Covering cl 5318 makes not only federal laws, but also the Constitution itself, binding in the manner it specifies319. As Quick and Garran noted at the time320, covering cl 5 is substantially similar in scope and intention to the Supremacy Clause (Art VI cl 2) of the United States Constitution321. But the framers of the Commonwealth Constitution went further by making the express provisions of Ch V (ss 106-120). Chapter V is headed "The States" and includes s 109. Whatever 318 Constitution, covering cl 5 provides: "This Act, and all laws made by the Parliament of the Commonwealth under the Constitution, shall be binding on the courts, judges, and people of every State and of every part of the Commonwealth, notwithstanding anything in the laws of any State ..." 319 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 102, 143-144; Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82 at 92-93 [20]-[21]; [2000] HCA 57. 320 The Annotated Constitution of the Australian Commonwealth, (1901) at 353. 321 Article VI cl 2 provides: "This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding." may be the relationship between the amendment provision in s 128 of the Constitution and the covering clauses, there could be no doubt that s 128 applies to s 109. The framers had before them s 22 of the Federal Council of Australasia Act 1885 (Imp)322. This stated: "If in any case the provisions of any Act of the Council shall be repugnant to, or inconsistent with, the law of any colony affected thereby, the former shall prevail, and the latter shall, so far as such repugnance or inconsistency extends, have no operation." (emphasis added) The disjunction expressed between "repugnance" and "inconsistency" consistent with an understanding that they were not necessarily synonyms. The references to repugnancy in the drafts of what was to become s 109, which had been prepared by Inglis Clark and Kingston, disappeared in the drafting which took place on the Lucinda in March 1891, and the term "inconsistent" alone was used thereafter323. The Colonial Laws Validity Act 1865 (Imp)324 ("the Colonial Laws Validity Act") used the term "repugnant" as the criterion rendering certain colonial laws "void and inoperative". The term had an extensive and lengthy history, summarised as follows by Justice McPherson in his work The Reception of English Law Abroad325: "A true limitation on colonial legislative power, and one that was incorporated in all colonial charters and later in commissions to royal governors, was that laws made in the colony should not be repugnant to English law. The requirement was stated in various forms, often in different places in the same instrument, but most commonly as a proviso limiting the grant of the power to make laws. It appears to have originated 322 48 & 49 Vict c 60. This Act was repealed by covering cl 7 of the Constitution. 323 Leeming, Resolving Conflicts of Laws, (2011) at 130-133. 324 28 & 29 Vict c 63, ss 2, 3. A precedent for these provisions was supplied by s 3 of the British North America Act 1840 (Imp), 3 & 4 Vict c 35. 325 (2007) at 160-161. See also R (Bancoult) v Secretary of State for Foreign and Commonwealth Affairs (No 2) [2009] AC 453 at 483-484 [36]-[39], 501-502 in letters patent issued to the Muscovy Company (1555)326, which in turn picked up a formula used in the Act for the Submission of the Clergy (1534)327, where a requirement of conformity or non-repugnance to English law was imposed to limit the power of the clergy of making ordinances or canons for the reformed Church of England." Professor Enid Campbell, with reference to the Ipswich Tailors' Case328, also pointed to the long recognition of the principle that regulations or by-laws of corporate bodies which were repugnant to common law or statute were to that extent void ab initio329. The notion of repugnancy as no less than direct opposition or contrariety to English law had been urged by the colonial assembly in Pennsylvania as early as 1716 in the course of disputation with the Deputy Governor of that colony330. The criterion of repugnancy adopted in the Colonial Laws Validity Act applied to deny the competence of subordinate colonial legislatures; this being in the period after the development in the Australian colonies of representative and responsible government in the second half of the 19th century. Given the weakening in control by the Imperial authorities which had preceded the implementation of the Colonial Laws Validity Act, particular caution became appropriate when considering the strength of the repugnancy criterion, lest the position of the Parliament at Westminster be overstated. In Attorney-General for Queensland v Attorney-General for the Commonwealth331, Isaacs J said that it was not sufficient that in its "practical operation" the colonial law "detracted from" that of an Imperial law; and Higgins J declared332: 326 Madden and Fieldhouse (eds), Select Documents on the Constitutional History of the British Empire and Commonwealth, (1985), vol 1 at 231; Smith, Cases and Materials on the Development of Legal Institutions, (1965) at 428. 327 25 Hen VIII c 19, ss 1, 2 (not "contrarient or repugnant to ... the customs, laws or statutes of this realm"). 328 (1614) 11 Co Rep 53a at 54a [77 ER 1218 at 1220]. 329 Campbell, "Colonial Legislation and the Laws of England", (1965) 2 University of Tasmania Law Review 148 at 149-150. See also Goebel, Antecedents and Beginnings to 1801, (1971) at 57-60, being vol 1 of the History of the Supreme Court of the United States. 330 Smith, "Administrative Control of the Courts of the American Plantations", (1961) 61 Columbia Law Review 1210 at 1243-1244. 331 (1915) 20 CLR 148 at 167; [1915] HCA 39. 332 (1915) 20 CLR 148 at 178. "I am strongly inclined to think that no colonial Act can be repugnant to an Act of the Parliament of Great Britain unless it involve, either directly or ultimately, a contradictory proposition β probably, contradictory duties or contradictory rights." However, as Sir Owen Dixon later emphasised in his address given at the Harvard Law School in 1955 and titled "Marshall and the Australian Constitution"333, the position of the Parliament of the Commonwealth as "the paramount legislature" and "essential conceptions of federalism" required that fuller scope be given to the term "inconsistent" in s 109. Further reference to that address by Sir Owen Dixon is made later in these reasons under the heading "Inconsistency and federalism". What, then, of the United States Constitution? Harrison Moore, writing in the early years of federation on the operation of s 109, referred to decisions of the United States Supreme Court upon the Supremacy Clause334. These he saw as the source of that treatment of the inter-State commerce power which has come to be known as the "Dormant Commerce Clause": the foundation of the exclusive legislative power of Congress with respect to inter-State commerce. As Harrison Moore put it335, "the silence of Congress on the particular subject is treated as an expression of the will of Congress that commerce should be free", and thereby an implicit restraint is placed upon State power. This doctrine has not been adopted with respect to s 51(i) of the Constitution. What, however, has to some degree been adopted from the United States decisions on the extent of the power of the Congress with respect to inter-State commerce, beginning with Southern Railway Co v Reid336, the Second Employers' Liability Cases337 and Chicago, Rock Island & Pacific Railway Co v Hardwick Farmers Elevator Co338, is the expression "covering the field". To the significance and utility of the expression in applying s 109 of the Constitution, attention is given later in these reasons under the heading "'Covering the field'". 333 (1955) 29 Australian Law Journal 420 at 427. 334 The Constitution of the Commonwealth of Australia, 2nd ed (1910) at 408-410. 335 The Constitution of the Commonwealth of Australia, 2nd ed (1910) at 410, fn 2. 336 222 US 424 at 437 (1912). 337 223 US 1 at 55 (1912). 338 226 US 426 at 435 (1913). The decisions of the United States Supreme Court speak of the power of the Congress to "pre-empt" State law rather than of the consequences of "inconsistency". When delivering the Opinion of the Court, in which six other Justices joined, Souter J in Crosby v National Foreign Trade Council339 said that "[e]ven without an express provision for preemption", State law must yield to an Act of the Congress both where "Congress intends federal law to 'occupy the field'" and where "state law is naturally preempted to the extent of any conflict with a federal statute", even though "Congress has not occupied the field". His Honour added that the categories of pre-emption were not rigidly distinct and also said340: "We will find preemption where it is impossible for a private party to comply with both state and federal law, ... and where 'under the circumstances of [a] particular case, [the challenged state law] stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.' ... What is a sufficient obstacle is a matter of judgment, to be informed by examining the federal statute as a whole and identifying its purpose and intended effects". (emphasis added) Section 109 appears immediately after sections which, subject to the Constitution, save the State Constitutions (s 106), the powers of the State Parliaments (s 107), and pre-federation laws (s 108). Section 109 looks ahead to the operation of the federal system, under which some of the legislative powers of the Parliament of the Commonwealth are exclusive of and others are concurrent with those of the State legislatures. The meaning and operation of s 109 has been revealed by the development of the body of case law in this Court. In understanding that development, the following remarks by Dixon J in Melbourne Corporation v The Commonwealth341 are pertinent here: "The framers of the Constitution do not appear to have considered that power itself forms part of the conception of a government. They appear rather to have conceived the States as bodies politic whose existence and nature are independent of the powers allocated to them. The Constitution on this footing proceeds to distribute the power between State and Commonwealth and to provide for their inter-relation, tasks performed with reference to the legislative powers chiefly by ss 51, 52, 107, 108 and 339 530 US 363 at 372 (2000). 340 530 US 363 at 372-373 (2000). 341 (1947) 74 CLR 31 at 82; [1947] HCA 26. The "law of the Commonwealth" of which s 109 speaks is a reference to those enacted by the Parliament in the exercise of the power to make "laws". The "law of a State" refers to those pre-federation laws saved by s 108 as well as to laws thereafter enacted by the Parliaments of the States pursuant to the powers conferred by their Constitutions, which are recognised and preserved by s 106 and s 107 of the Constitution. Section 109 assumes that, were it not for the inconsistency, each law would be effective in its terms. Thus, unlike s 5 of the Colonial Laws Validity Act, s 109 is addressed not to questions between law-making powers, but to the consequences of the exercise of concurrent law-making powers342. The phrases in s 109 "shall prevail" and "to the extent of the inconsistency" have been revealed by the course of decision in this Court to be important in various respects. First, s 109 has a temporal operation, as indicated by the following: (i) in 1961 Butler v Attorney-General (Vict)343 decided that, on repeal of the federal law in question, the State law previously rendered inoperative by s 109 resumed operation; (ii) as indicated in 1984 by the Court in University of Wollongong v Metwally344, the statement in s 51 of the Constitution that the powers conferred in pars (i)-(xxxix) thereof are subject to the Constitution has the consequence that the Parliament cannot reverse a past operation of s 109 which rendered inoperative the provisions of a State law so as retrospectively to impose as the law of a State that State law rendered inoperative for inconsistency with a federal law; to hold otherwise, as Deane J put it in Metwally345, would be to fail "to take proper account of the temporal operation of the provisions of s 109"; and (iii) the notion of "operational inconsistency", referred to below346, means that the occasion for the operation of s 109 may be deferred until the particular exercise of powers conferred by the laws in question; this temporal aspect of s 109 is important when dealing with the powers of sentencing conferred on the courts by the legislation at issue in this appeal. Secondly, the phrase "to the extent of the inconsistency" indicates that something less than the whole of the State or federal statute in question may be 342 O'Sullivan v Noarlunga Meat Ltd (1956) 95 CLR 177 at 182-183; [1957] AC 1 343 (1961) 106 CLR 268. 344 (1984) 158 CLR 447; [1984] HCA 74. 345 (1984) 158 CLR 447 at 478. the relevant "law"; the issue is whether any provisions of the two laws conflict347. Thirdly, if less than the whole of a State statute is to be "invalid" for "inconsistency", this will be the result of the application to the balance of the State statute of the principles of severance most recently discussed in Pape v Federal Commissioner of Taxation348. With that understanding of s 109, one then asks what is it that gives to particular terms of a statute the character of a "law" with which a comparison with another "law" is to be made in applying s 109. This inquiry involves a process of abstraction and characterisation. What comprises "a law of the Commonwealth" and "a law of a State" In various provisions the Constitution speaks of a "law" or "laws"349 and of a "proposed law" or "proposed laws"350. By "law", it is meant, at least as regards s 109, something more than a text. The point was made by Isaacs J in Clyde Engineering Co Ltd v Cowburn351 when he said: "[T]he 'law' is not the piece of parchment or paper, nor is it the letters and words and figures printed upon the material. It consists of the 'rule' resolved upon and adopted by the legislative organ of the community as that which is to be observed, positively and negatively, by action or inaction according to the tenor of the rule adopted." Of s 109, Taylor J remarked in Butler352 that it deals not "merely with instruments as such" but with instruments designed during the period of their operation "to create rights and duties and to impose obligations according to their tenor". 347 Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (1920) 28 CLR 129 at 155; [1920] HCA 54. See also Heli-Aust Pty Ltd v Cahill (2011) 277 ALR 332 at 370-371 [112]. 348 (2009) 238 CLR 1 at 92-94 [246]-[252], 131-133 [389]-[393]. 349 Sections 7, 9, 10, 25, 27, 29, 31, 34, 41, 44, 45, 51, 52, 55, 59, 61, 74, 76, 77, 78, 80, 83, 84, 85, 98, 99, 100, 101, 102, 105A, 108, 109, 113, 116, 118, 120 and 122. 350 Sections 53, 54, 56, 57, 58, 60 and 128. 351 (1926) 37 CLR 466 at 497; [1926] HCA 6. 352 (1961) 106 CLR 268 at 283. The authority of a legislature to enact "laws" ordinarily is understood as exercised by the making of statutes. However, as suggested by the above remarks of Isaacs J in Clyde Engineering, and Taylor J in Butler, this does not mean that s 109 operates only upon a comparison between two statutes, each taken as a unit. The Constitution was framed, at least so far as s 109 is concerned, during the currency of doctrines which have been described as legal positivism and are associated with the writings of Jeremy Bentham and John Austin353. With the writings of Austin, Sir Isaac Isaacs, at least, was familiar354. The passage set out above from his reasons in Clyde Engineering355 is expressive of positivist doctrine. The terms "command", "duty" and "sanction" were used in this discourse each to denote an inseparable element of the notion of a "law" imposed by a sovereign authority. More recent scholarship has tended to concentrate on the deficiencies of positivist doctrine for an understanding of the case law system356; this is at the expense of concentration upon its continuing significance for the study of statute law. In dealing with statute law, further analysis may be required of what is involved in a "command". A repealing statute is creative in the sense that its command removes the requirement for further compliance with the anterior law. An amending statute of itself might have no operation beyond changing the requirements of that anterior law357. As Mason J observed in Victoria v The Commonwealth and Hayden358, a law which neither creates rights nor imposes duties is "something of a rara avis in the world of statutes". His Honour instanced the limited operation of an appropriation Act, which is a "law" spoken of in s 83 of the Constitution. To that may be added laws which comply with s 55 of the Constitution by dealing "only with the imposition of taxation", and not with the assessment and collection of the tax. 353 See Lobban, "Theories of Law and Government", in The Oxford History of the Laws of England, Volume XI: 1820-1914 β English Legal System, (2010) 72 354 See Australian Boot Trade Employes Federation v Whybrow & Co (1910) 10 CLR 266 at 329; [1910] HCA 8. 355 (1926) 37 CLR 466 at 497. 356 Halpin, "Austin's Methodology? His Bequest to Jurisprudence", (2011) 70 Cambridge Law Journal 175. 357 Kartinyeri v The Commonwealth (1998) 195 CLR 337 at 375-376 [66]-[70]; [1998] HCA 22. 358 (1975) 134 CLR 338 at 393; [1975] HCA 52. Many statutory provisions are expressed to create rights rather than to impose duties. But a "duty" nevertheless may be implicit in the presence of a sanction against third parties for invasion of the right so created. The notion of "sanction" is most readily understood in the sense of a penalty or punishment upon adjudication of guilt. But the sanction also may be understood as a civil remedy conferred by the law in question and may include notions of "voidness", "unenforceability" and "illegality" with respect to what otherwise are associated common law rights359. Each separate provision enacted by a statute as a section or sub-section will not necessarily answer these criteria of "a law". The phrase "duty of imperfect obligation"360 may illustrate the point. So also, for example, a provision such as s 52 of the Trade Practices Act 1974 (Cth), which establishes a norm of conduct but which leaves to later provisions of the statute the sanctions and remedies for non-observance of that norm361. Each law of the Commonwealth and law of a State which are said to engage s 109 will comprise both the norm or rule of conduct each lays down and the attached sanctions and remedies. To consider these as discrete matters and to treat the first as conceptually distinct from the second may engender confusion. An example is given by the provisions considered in Hume v Palmer362. As Knox CJ363 and Starke J364 indicated, both the federal and State regulations365 359 See Brooks v Burns Philp Trustee Co Ltd (1969) 121 CLR 432 at 458; [1969] HCA 4; Hollis v Vabu Pty Ltd (2001) 207 CLR 21 at 38 [37]; [2001] HCA 44. 360 See Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Palme (2003) 216 CLR 212 at 224 [40]-[41]; [2003] HCA 56; Aktas v Westpac Banking Corporation (2010) 241 CLR 79 at 101 [68], 105 [78]; [2010] HCA 25. 361 Master Education Services Pty Ltd v Ketchell (2008) 236 CLR 101 at 114 [31]; [2008] HCA 38. 362 (1926) 38 CLR 441; [1926] HCA 50. 363 (1926) 38 CLR 441 at 446. 364 (1926) 38 CLR 441 at 461. 365 Navigation (Collision) Regulations 1923 (Cth), Schedule, Art 19; Regulations for Preventing Collisions at Sea 1911 (NSW), Art 19. Both provisions had a precedent in Art 19 of Sched I to the Prevention of Accidents (Collisions and Signals of (Footnote continues on next page) required of two steam vessels which were so crossing as to involve risk of collision, that the vessel which had the other on the starboard side keep out of the way of the other; and the appellant, the steamship's master, had disobeyed this rule. The State law366 under which the appellant was convicted and fined by a magistrate provided for the penalty to be imposed only in the case of wilful default. But the federal law367 provided that a contravention caused by wilful default was an indictable offence while, for a contravention not so caused, a fine might be imposed in a summary proceeding. Thus, wilful default was required for the State offence but not necessarily for the federal offence. The appeal against the conviction under the State law was allowed and the conviction quashed. Knox CJ said368 that while "the rules" prescribed by the two laws were substantially identical, "the penalties imposed for their contravention differ". But, more accurately, one should have thought the position was that, for the purposes of s 109, the two "laws" differed. Hence, perhaps, the statement by Dixon J in Ex parte McLean369 that the "rule of conduct" prescribed by inconsistent "laws" might be identical, "at least when the sanctions they impose are diverse", and the citation of Hume v Palmer in support of this statement. Hence also, perhaps, the observation by Mason J in R v Winneke; Ex parte Gallagher370 that it was a commonplace that the doing of a single act may involve the actor in the commission of more than one criminal offence, against both federal and State law. Both s 71AC of the Drugs Act and s 302.4 of the Code state the elements of the offence and the maximum penalty. Section 71AC acquires content from the definition of "traffick" in s 70(1). Section 302.4 does so by means of the definition of "traffics" in s 302.1 and the provisions of Pt 2.2 of the Code respecting the physical elements and fault elements of the offence. It is these respective conceptual and linguistic composites, not merely the texts of s 71AC and s 302.4, which provide the content of "a law of a State" and "a law of the Commonwealth" within the meaning of s 109 of the Constitution. The first of the Distress) Regulations 1910 (Imp), made pursuant to s 434 of the Merchant Shipping Act 1894 (Imp). 366 Navigation Act 1901 (NSW), s 115(2). 367 Navigation Act 1912 (Cth), s 258. 368 (1926) 38 CLR 441 at 448. 369 (1930) 43 CLR 472 at 483; [1930] HCA 12. 370 (1982) 152 CLR 211 at 224; [1982] HCA 77. issues of principle respecting s 109 identified above at [206] under the heading "The issues" should be answered accordingly. However, the process of abstraction and characterisation which yields that result does not have the consequence that each law with which the appellant seeks to engage s 109, that of the State and that of the Commonwealth, includes the general provisions at federal and State level for the trial by jury of indictable offences. The steps in the prosecution, conviction and punishment of the appellant were taken in the general milieu of the system for adjudication of criminal guilt. The body of legislative provisions for the operation of that system is not part of the "law of a State" which may be rendered inoperative by reason of inconsistency with the federal laws upon which the appellant relied. It is on this ground that sub-issue (b) of the second issue of principle371 should be decided adversely to the appellant. What of sub-issue (a), the significance of differing penalty provisions? This will be considered under the heading "Operational inconsistency" and after consideration of more general questions of inconsistency and federalism. Inconsistency and federalism Austin recognised that for his analysis, a federal system of government such as that in the United States presented the particular problem of commands by more than one sovereign authority372. In the United States373, and then in Canada374, the answer was found by the decisions of the courts which emphasised the paramount position of the central government. In Australia, the answer was supplied by the express terms of s 109. Thereafter, express provision, in terms with some affinity to those of s 109, was made by s 107(1) of the Government of India Act 1935 (Imp), and this provision was largely carried forward as Art 254(1) of the Constitution of India adopted on 26 November 1949375. In all 372 Austin, The Province of Jurisprudence Determined, (1832) at 261-264. 373 See the discussion of the Supremacy Clause in the United States Constitution, 374 Hogg, Constitutional Law of Canada, 5th ed (2007), vol 1 at 483-485. 375 The chapeau to Art 254 reads "Inconsistency between laws made by Parliament and laws made by the Legislatures of States". The text of Art 254(1) resembles that of s 109 in stating that the Union law "shall prevail", and provides that the State law shall, "to the extent of the repugnancy, be void". Article 254(2), unlike s 109, provides for the prevalence of State over Union law if the State law has been reserved for consideration by, and has received the assent of, the head of state (the President of India); but this is subject to the power of the Parliament to override the (Footnote continues on next page) four federations, the problem posed had been the production, by the co-existence of two sets of laws, of what Dixon J was to identify as "an antinomy inadmissible in any coherent system of law"376. That s 109 is susceptible of varied constructions became apparent in the early years of this Court. The term "inconsistent" is the negation of "consistent" and thus, as a matter of etymology, perhaps would indicate that the federal and State laws could not stand together because to obey one was to disobey the other. But the course of interpretation of s 109 has gone further. This has reflected an understanding of the nature of the federal structure of the Constitution, which emphasises the paramount position of the Commonwealth. This may be seen in the well-known statement by Dixon J in Melbourne Corporation377: "The position of the federal government is necessarily stronger than that of the States. The Commonwealth is a government to which enumerated powers have been affirmatively granted. The grant carries all that is proper for its full effectuation. Then supremacy is given to the legislative powers of the Commonwealth." His Honour saw as "protected by s 109 of the Constitution" those "legal rights which are the immediate product of federal statute"378. In the submissions in Australian Boot Trade Employes Federation v Whybrow & Co379, Mitchell KC and Starke, for the respondents, drew upon their understanding of the contemporary state of authority respecting the Supremacy Clause of the United States Constitution, to submit that s 109 applied to three classes of cases: "(1) Where two conflicting duties are imposed by the two legislatures; (2) Where there is something in the nature of a right or privilege conferred by the paramount legislature, and the other legislature seeks to impose some additional restrictions on the exercise of that right or privilege; and (3) Where the Court forms the view from the language of the paramount State law by adding to, altering or repealing it. See Seervai, Constitutional Law of India, 4th ed (1996), vol 1 at 165-166; vol 3 at 2544-2545. 376 Ffrost v Stevenson (1937) 58 CLR 528 at 572; [1937] HCA 41. 377 (1947) 74 CLR 31 at 82-83. 378 The Commonwealth v Cigamatic Pty Ltd (In Liq) (1962) 108 CLR 372 at 378 per Dixon CJ; [1962] HCA 40. 379 (1910) 10 CLR 266 at 272. legislature that they intended their law to be the only law upon the particular point." Class (2) might have been supplemented to include cases where it is the State law which confers a right or privilege and it is the federal law that modifies or restricts it. The view of Griffith CJ that the "test of inconsistency" was "whether a proposed act is consistent with obedience to both directions"380 may be seen both as a translation into the Constitution of the understanding of "repugnancy" as a limitation upon the legislative powers of the colonies, and as an expression of Austinian positivism. This focus upon conflicting duties, if accepted, would have meant that class (1) conveyed exhaustively what was meant by "inconsistent" in s 109. But as is well known, the view of Griffith CJ has not prevailed. Speaking extrajudicially381, Sir Owen Dixon said of the Griffith view of s 109 that: "For a moment it looked as if the word 'inconsistent' might receive a pedantic construction drawn rather from a verbal formalism than essential conceptions of federalism. In the end however the Court did not forget that it was a constitution it was expounding." Whilst conflicting duties do attract s 109, it is no sufficient answer in construing s 109 that it is possible to obey the commands of both the federal and State laws. With class (2), the inconsistency does not arise from the impossibility of obedience to both laws; abstention from the exercise of the right or privilege conferred by one law may be accompanied by exercise of the right or privilege under the other law. But the operation of the State law (in the phrase of Dixon J to which further reference will be made), to "alter, impair or detract from" that of the federal law, may enliven s 109. Likewise, class (3), which might be thought to be a precursor of what came to be identified with the metaphor of "covering the field", on reflection is but an instance of alteration, impairment and detraction. And the starting point in all cases must be an analysis of the laws in question and of their true construction. In both classes (1) and (2), it is the comparison between the texts of the two laws as properly construed which is the focus of attention; hence in both 380 Federated Saw Mill &c Employes of Australasia v James Moore & Son Pty Ltd (1909) 8 CLR 465 at 500; [1909] HCA 43; Australian Boot Trade Employes Federation v Whybrow & Co (1910) 10 CLR 266 at 286. 381 "Marshall and the Australian Constitution", (1955) 29 Australian Law Journal instances the use of the expression "direct inconsistency"382. But what is the situation where each law prescribes the same rule of conduct or confers a right or privilege in like terms so that the State law does not appear immediately to alter, impair or detract from the federal law? This situation is addressed by class (3), which has come to be known as "indirect inconsistency". Here, the essential notion is that, upon its true construction, the federal law contains an implicit negative proposition that nothing other than what the federal law provides upon a particular subject-matter is to be the subject of legislation; a State law which impairs or detracts from that negative proposition will enliven s 109. This is an example of the proposition expressed with reference to Ch III of the Constitution by Dixon CJ, McTiernan, Fullagar and Kitto JJ in the Boilermakers' Case383 as follows: "The fact that affirmative words appointing or limiting an order or form of things may have also a negative force and forbid the doing of the thing otherwise was noted very early in the development of the principles of interpretation. In Chap III we have a notable but very evident example." (footnote omitted) There is, thus, as these reasons will seek further to demonstrate, the need for caution in speaking of different species or classes of "inconsistency". Such usage tends to obscure the task always at hand in cases where reliance is placed upon s 109, namely to apply that provision only after careful analysis of the particular laws in question to discern their true construction. These matters are considered further at [258]-[261] under the heading "The importance of statutory construction". Operational inconsistency Something further should be said respecting this temporal element in the operation of s 109 of the Constitution. First, various statutes confer authority to create delegated legislation and it will be upon the exercise of that authority that claimed inconsistency may 382 Wallis v Downard-Pickford (North Queensland) Pty Ltd (1994) 179 CLR 388 at 396-397; [1994] HCA 17. See also the remarks of Mason J in Ansett Transport Industries (Operations) Pty Ltd v Wardley (1980) 142 CLR 237 at 260-261; [1980] HCA 8. 383 R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254 at 270. See also APLA Ltd v Legal Services Commissioner (NSW) (2005) 224 CLR 322 arise384. Further, many of the decisions concerning s 109 have turned upon the operation of awards made by tribunals operating from time to time within the federal industrial relations system as ordained by statute; the legislation and the authorities are collected and discussed in Jemena Asset Management (3) Pty Ltd v Coinvest Ltd385. More generally, what in Flaherty v Girgis386 Brennan J called "[a] facultative law of a State" and "a facultative law of the Commonwealth", which deal with the same subject-matter, are "not necessarily inconsistent". Thus a statute may invest a power in a body without any issue of inconsistency arising in advance of a particular exercise of the power. In instances where each law confers a power with respect to the same subject-matter, a conflict is created if and when each authority decides that it should exercise its powers387. But before that state of affairs arises, the federal law is not, as Dixon J put it in Stock Motor Ploughs Ltd v Forsyth388, "directly impaired by State law" (emphasis added). In the first of the major decisions in this area, that given in 1937 in Victoria v The Commonwealth ("The Kakariki")389, this Court held that the Victorian authority might proceed to exercise its statutory authority to remove the wreck of the steamship Kakariki in the absence of any intervention by the federal authority to exercise the power conferred by the Navigation Act 1912 (Cth) for the removal of wrecks. In advance of the exercise of the statutory power by the Commonwealth, the "practical operation" of the federal law was not impaired by the State law390. The important temporal distinction, for the operation of s 109, between a law which is self-executing and operates immediately upon a subject-matter, and one which does so only at the point of exercise of a power conferred by that law, 384 Heli-Aust Pty Ltd v Cahill (2011) 277 ALR 332 at 354 [56]. 385 [2011] HCA 33 at [11]-[16]. 386 (1987) 162 CLR 574 at 602; [1987] HCA 17. 387 Carter v Egg and Egg Pulp Marketing Board (Vict) (1942) 66 CLR 557 at 574-575, 584, 590, 598-599; [1942] HCA 30. 388 (1932) 48 CLR 128 at 137; [1932] HCA 40. 389 (1937) 58 CLR 618; [1937] HCA 82. 390 APLA Ltd v Legal Services Commissioner (NSW) (2005) 224 CLR 322 at 399 was explained, with reference to powers conferred on courts, by Gaudron J in Re Macks; Ex parte Saint391 as follows: "In the case of a Federal Court order made within jurisdiction, a State law providing that the rights and liabilities of the parties were other than as contained in that order or permitting a State court to provide in a manner contrary to it would be inconsistent with a law of the Commonwealth conferring jurisdiction on the Federal Court in the matter in which the order was made. A State law of the former kind would be invalid for direct inconsistency because it would 'alter, impair or detract from' the operation of the law conferring jurisdiction on the Federal Court. A State law of the latter kind would be invalid for what is usually referred to as 'operational inconsistency'." (footnotes omitted) In Gallagher, Gibbs CJ392 and Wilson J393 considered The Kakariki as an instance where it was only upon the actual exercise of federal executive authority conferred by a law of the Commonwealth that there could arise a conflict to be resolved by the operation of s 109. With reference to what had been said by Latham CJ in Carter v Egg and Egg Pulp Marketing Board (Vict)394, Gibbs CJ added395: "[T]he fact that a Commonwealth statute and a State statute both authorized the acquisition of eggs would not necessarily mean that the Commonwealth statute excluded the operation of the State power, but if both the Commonwealth and the State sought to acquire the same eggs, there would be a conflict in the operation of the power, and in that case s 109 would give paramountcy to the Commonwealth statute which would, no doubt, be construed as meaning that the Commonwealth power of acquisition was to supersede any attempted acquisition by the State authority". 391 (2000) 204 CLR 158 at 186 [54]; [2000] HCA 62. See also R v Winneke; Ex parte Gallagher (1982) 152 CLR 211 at 217, 221; Flaherty v Girgis (1987) 162 CLR 574 at 588, 602; The Commonwealth v Western Australia (Mining Act Case) (1999) 196 CLR 392 at 417 [62], 439-441 [138]-[145], 478 [258]; [1999] HCA 5. 392 (1982) 152 CLR 211 at 216-217. 393 (1982) 152 CLR 211 at 233. 394 (1942) 66 CLR 557 at 574-576. 395 (1982) 152 CLR 211 at 217. Carter concerned the Egg Control Regulations 1939 (Cth), which provided for the expropriation of eggs by the taking of possession thereof (reg 14), under authority of the Egg Supervision Committee. Failure to comply with the requirements of that Committee was made an offence by s 10 of the National Security Act 1939 (Cth). The reasoning in these decisions as to the time of the engagement of s 109 is applicable where the executive power in question is one of institution and conduct of prosecution for offences, or the power is a judicial power exercisable at the stage of sentencing after conviction. At common law there is a practice, "if not a rule of law, that a person should not be twice punished for what is substantially the same act [or omission]"396. Where the same act or omission is punishable under both federal and State law an added dimension is supplied. If, as in the present case, the federal and State penalty provisions each specify a maximum penalty, and that maximum differs, the provisions thereby confer a judicial discretion or power to be exercised within those respective limits and in the circumstances of the particular case. Conflict may arise, but only upon the exercise of those powers. However, the Crimes Act diminishes the occasions for that conflict. Where "an act or omission" constitutes an offence under both a federal law and that of a State, and "the offender has been punished for that offence under [State law]", the offender "shall not be liable to be punished for the offence under [federal law]". Section 4C(2) of the Crimes Act so provides. It was added to the Crimes Act by s 11 of the Crimes Legislation Amendment Act 1987 (Cth), which, in Sched 5, repealed what had been s 30(2) of the Acts Interpretation Act 1901 (Cth). Section 30(2) had been added, after the decision in Hume v Palmer397, by s 11 of the Acts Interpretation Act 1937 (Cth). Section 4C(2) of the Crimes Act is designed to avoid the injustice of exposure to double punishment in cases where the doing of a single act may involve the actor in the commission of an offence against federal and State law398. Its effect, when the occasion for its operation arrives, is to achieve what 396 R v Hoar (1981) 148 CLR 32 at 38; [1981] HCA 67. 397 (1926) 38 CLR 441. 398 R v Winneke; Ex parte Gallagher (1982) 152 CLR 211 at 218-219, 232-233. has been called a "roll-back" of the federal criminal law399, or its "withdraw[al] pro tanto"400. With respect to the appellant in this case, there has been no prosecution of the federal offence and no occasion of operational inconsistency has arisen with respect to the application of the penalty provisions of the federal and State laws. If the occasion had arisen, s 4C(2) would have removed the occasion for any "direct" inconsistency. Were a federal prosecution now to be commenced, with no prospect of punishment by reason of the operation of s 4C(2), a question would arise whether the prosecution might be stayed as an abuse of process, even if a plea in bar was not available401. That these outcomes are the consequence of decisions taken, or not taken, by the federal and State prosecution authorities has obvious significance for the citizen and for the place of s 109 in adjusting the relationship between the citizen on the one hand and the exercise of concurrent powers of federal and State legislatures on the other402. However, this state of affairs is to be accepted as a product of the accommodations required by the federal system. The result is that what is identified at [207] as sub-issue (a) (the difference between the penalty provisions) also should be decided adversely to the appellant. The importance of statutory construction The frequently used phrases "upon its true construction" and "having regard to subject, scope and purpose" carry a weighty body of doctrine built up by curial decision-making. The first task in any application of s 109 is to construe the federal law in question in accordance with that body of doctrine. Only when that has been done is it appropriate to consider whether upon its proper construction the State law is "inconsistent" with the federal law. 399 See Saunders, "A New Direction for Intergovernmental Arrangements", (2001) 12 Public Law Review 274 at 284; Leeming, Resolving Conflicts of Laws, (2011) 400 Native Title Act Case (1995) 183 CLR 373 at 473. See also Port MacDonnell Professional Fishermen's Association Inc v South Australia (1989) 168 CLR 340 at 373; [1989] HCA 49. 401 Pearce v The Queen (1998) 194 CLR 610 at 620 [29], 629 [67]; [1998] HCA 57. 402 Dickson v The Queen (2010) 241 CLR 491 at 503-504 [19]. The distillation of the scope and purpose of the federal law was of decisive importance in Commercial Radio Coffs Harbour Ltd v Fuller403. The provisions of the federal law for the licensing of radio transmitters were held to be cumulative upon those of State environmental protection laws; the conclusion was found "in the nature and purpose" of the federal law404. Similarly, the Bills of Exchange Act 1909 (Cth), considered in Stock Motor Ploughs405, codified the law respecting negotiable instruments but did so in the general milieu of contract law, including modifications thereto by State moratorium legislation enacted during the Great Depression. On the other hand, the head of legislative power supporting the federal law may, by express words, be exercised to exclude the rights or duties which the federal law creates from qualification, wholly or partly, by State laws of a particular description406. The authorities upholding the effectiveness of federal legislation of this kind, beginning with The Commonwealth v State of Queensland407, and including Australian Coastal Shipping Commission v O'Reilly408 and Botany Municipal Council v Federal Airports Authority409, were considered and applied in Bayside City Council v Telstra Corporation Ltd410, the Work Choices Case411 and John Holland Pty Ltd v Victorian Workcover 403 (1986) 161 CLR 47; [1986] HCA 42. 404 (1986) 161 CLR 47 at 49. See also McWaters v Day (1989) 168 CLR 289 at 298; [1989] HCA 59; Dickson v The Queen (2010) 241 CLR 491 at 506 [29]. 405 (1932) 48 CLR 128 at 137-138. See also Re Residential Tenancies Tribunal (NSW); Ex parte Defence Housing Authority (1997) 190 CLR 410 at 433, 460, 462; [1997] HCA 36; Attorney-General (Vic) v Andrews (2007) 230 CLR 369 at 401-402 [54]; [2007] HCA 9. 406 The distinction between express exclusion wholly from State regulation and only partly therefrom is drawn, with examples from the decided cases, in Leeming, Resolving Conflicts of Laws, (2011) at 154. 407 (1920) 29 CLR 1; [1920] HCA 79. 408 (1962) 107 CLR 46; [1962] HCA 8. 409 (1992) 175 CLR 453; [1992] HCA 52. 410 (2004) 216 CLR 595 at 627-629 [34]-[39]; [2004] HCA 19. 411 New South Wales v The Commonwealth (2006) 229 CLR 1 at 166-169 [370]-[372]; [2006] HCA 52. Authority412. Again, the federal law may state that certain conduct is not to be subject to proscription by any State criminal law. Croome v Tasmania413 was such a case. Further, even in the absence of an express indication to that effect, the detailed character of the federal law may evince a legislative "intention", in the sense given to that term in the passage from Zheng v Cai414 set out at [146] of these reasons, to deal completely and thus exclusively with the law governing a particular subject-matter. That proposition, which is drawn from what was said by Dixon J in Ex parte McLean415, Stock Motor Ploughs416 and The Kakariki417, may be treated as presenting a "negative implication" criterion and has been discussed when dealing with class (3) as identified in the submissions in Whybrow418. The question then is whether the State law is upon the same subject-matter as the federal law and, if so, whether the State law is inconsistent with it because it detracts from or impairs that negative implication419. But the first question, and what Aickin J called "the central question"420, always is one of statutory interpretation to discern legislative "intent" or "intention"421. 412 (2009) 239 CLR 518 at 526-527 [18], 528 [23]; [2009] HCA 45. 413 (1997) 191 CLR 119; [1997] HCA 5. 414 (2009) 239 CLR 446 at 455-456 [28]. 415 (1930) 43 CLR 472 at 483. 416 (1932) 48 CLR 128 at 136-137. 417 (1937) 58 CLR 618 at 630. 419 Professor Hogg explains that, while Ex parte McLean has not been adopted in Canada, a Canadian federal law will be interpreted to discover its purpose and a provincial law which frustrates that purpose will fail for inconsistency: Hogg, Constitutional Law of Canada, 5th ed (2007), vol 1 at 491-496. 420 Ansett Transport Industries (Operations) Pty Ltd v Wardley (1980) 142 CLR 237 421 P v P (1994) 181 CLR 583 at 602-603; [1994] HCA 20; Native Title Act Case (1995) 183 CLR 373 at 466; Mining Act Case (1999) 196 CLR 392 at 415-416 [55], 439 [138]. See also Lindell, "Grappling with Inconsistency between Commonwealth and State Legislation and the Link with Statutory Interpretation", (2005) 8 Constitutional Law and Policy Review 25 at 30-34; Rumble, (Footnote continues on next page) "Covering the field" It is significant that in none of the classical formulations by Dixon J of the operation of s 109, those in Ex parte McLean422, Stock Motor Ploughs423 and The Kakariki424, does the phrase "covering the field" appear. The passage in The Kakariki is set out below. That in Ex parte McLean reads: "When the Parliament of the Commonwealth and the Parliament of a State each legislate upon the same subject and prescribe what the rule of conduct shall be, they make laws which are inconsistent, notwithstanding that the rule of conduct is identical which each prescribes, and sec 109 applies. That this is so is settled, at least when the sanctions they impose are diverse (Hume v Palmer425). But the reason is that, by prescribing the rule to be observed, the Federal statute shows an intention to cover the subject matter and provide what the law upon it shall be. If it appeared that the Federal law was intended to be supplementary to or cumulative upon State law, then no inconsistency would be exhibited in imposing the same duties or in inflicting different penalties. The inconsistency does not lie in the mere coexistence of two laws which are susceptible of simultaneous obedience. It depends upon the intention of the paramount Legislature to express by its enactment, completely, exhaustively, or exclusively, what shall be the law governing the particular conduct or matter to which its attention is directed. When a Federal statute discloses such an intention, it is inconsistent with it for the law of a State to govern the same conduct or matter." The passage in Stock Motor Ploughs states: "In this Court an interpretation of sec 109 of the Constitution has been adopted which invalidates a law of a State in so far as it would vary, detract from, or impair the operation of a law of the Commonwealth. Further, when the Parliament appears to have intended that the Federal law shall be a complete statement of the law governing a particular "Manufacturing and Avoiding Constitution Section 109 Inconsistency: Law and Practice", (2010) 38 Federal Law Review 445 at 457-459. 422 (1930) 43 CLR 472 at 483. 423 (1932) 48 CLR 128 at 136-137. 424 (1937) 58 CLR 618 at 630. 425 (1926) 38 CLR 441. relation or thing, it is considered that the operation of the Federal law would be impaired if the State law were allowed to affect the matter at all (Clyde Engineering Co v Cowburn426; H V McKay Pty Ltd v Hunt427; Hume v Palmer428; Ex parte McLean429). Such an interpretation requires the consequence that, except in so far as the law of the Commonwealth appears otherwise to intend, enjoyment of a right arising under it may not be directly impaired by State law." The use by Isaacs J in Clyde Engineering430 of the metaphor "cover the whole field" to identify the consequence of an imputed legislative intention has served only to confuse what is a matter of statutory interpretation. Isaacs J had previously used the expression "occupy the field" in Whybrow431. Neither, to adapt what Dixon CJ said432 of the use by Isaacs J of the phrase "corpuscular wealth", was a happy choice to convey his meaning. This is because the metaphors used by Isaacs J are apt to distract attention from the task of constitutional interpretation by reference to the text and structure of the Constitution and for that reason are to be discouraged. In Stock Motor Ploughs433, Evatt J said of the expression "cover the field": "This is a very ambiguous phrase, because subject matters of legislation bear little resemblance to geographical areas. It is no more than a clichΓ© for expressing the fact that, by reason of the subject matter dealt with, and the method of dealing with it, and the nature and multiplicity of the regulations prescribed, the Federal authority has adopted a plan or scheme which will be hindered and obstructed if any additional regulations whatever are prescribed upon the subject by any other authority; if, in 426 (1926) 37 CLR 466. 427 (1926) 38 CLR 308; [1926] HCA 36. 428 (1926) 38 CLR 441. 429 (1930) 43 CLR 472. 430 (1926) 37 CLR 466 at 489. 431 (1910) 10 CLR 266 at 330. 432 Ex parte Professional Engineers' Association (1959) 107 CLR 208 at 235; [1959] HCA 47. 433 (1932) 48 CLR 128 at 147. other words, the subject is either touched or trenched upon by State authority." His Honour added, in The Kakariki434, that little assistance was to be derived from an analogy between the picture of a two-dimensional field and "legislation with its infinite complexities and varieties". In the same case, more obliquely, Dixon J made the same point when he said435: "When a State law, if valid, would alter, impair or detract from the operation of a law of the Commonwealth Parliament, then to that extent it is invalid. Moreover, if it appears from the terms, the nature or the subject matter of a Federal enactment that it was intended as a complete statement of the law governing a particular matter or set of rights and duties, then for a State law to regulate or apply to the same matter or relation is regarded as a detraction from the full operation of the Commonwealth law and so as inconsistent." (emphasis added) As noted above436, there has developed in the United States, from the Supremacy Clause, a doctrine of "field pre-emption". This expression is associated with remarks of Brandeis J in his dissenting reasons in New York Central Railroad Co v Winfield437. Comprehensive federal regulation may be so pervasive as to support a reasonable inference that Congress left no room for the States to supplement it438. So stated, this doctrine may be thought to describe the operation of s 109 as described by Dixon J in Ex parte McLean and The Kakariki. However, as Professor Tribe notes439, the field pre-emption doctrine may be criticised with justification as being "at times divorced from fair statutory interpretation". 434 (1937) 58 CLR 618 at 634. See also the remarks of McPherson JA in R v Morris [2004] QCA 408 at [4]. 435 (1937) 58 CLR 618 at 630. See also Ex parte McLean (1930) 43 CLR 472 at 483; Telstra Corporation Ltd v Worthing (1999) 197 CLR 61 at 76-77 [28]; [1999] HCA 12; Dickson v The Queen (2010) 241 CLR 491 at 502 [13]. 437 244 US 147 at 169 (1917). See Epstein and Greve, "Introduction: Preemption in Context", in Federal Preemption: States' Powers, National Interests, (2007) 438 Rice v Santa Fe Elevator Corp 331 US 218 at 230 (1947). See Chemerinsky, Constitutional Law: Principles and Policies, 3rd ed (2006) at 401-409. 439 American Constitutional Law, 3rd ed (2000), vol 1 at 1205, fn 2. Statements of legislative intention There remains the third issue of principle identified at [208]. The joint submissions by the Commonwealth, New South Wales, Victoria, South Australia, Western Australia, Tasmania and the Australian Capital Territory seek to address the significance of statements of legislative intention. They do so, at least in what has been identified at [240] as class (2) and class (3), by treating as determinative an "express statement" of the legislative intention of the Commonwealth Parliament which either accepts or rejects what would be an alteration, impairment or detraction otherwise effected by the State law in question (class (2)), or expresses or denies what otherwise would be an implicit negative proposition founding a case of "indirect" inconsistency (class (3)). The joint submissions rely in particular upon s 300.4 of the Code. Section 300.4 appears in Pt 9.1 (ss 300.1-314.6), which is headed "Serious drug offences". It states: "(1) This Part is not intended to exclude or limit the concurrent operation of any law of a State or Territory. (2) Without limiting subsection (1), this Part is not intended to exclude or limit the concurrent operation of a law of a State or Territory that makes: an act or omission that is an offence against a provision of this Part; or a similar act or omission; an offence against the law of the State or Territory." Section 4C(2) of the Crimes Act has further significance here, by supplementing s 300.4 of the Code. Section 4C(2) applies where the offender has been punished under s 71AC of the Drugs Act and then denies what otherwise would be liability to punishment for the federal offence of trafficking created by s 302.4 of the Code. Section 4C(2) thus assumes that despite the existence of the federal offence, including its penalty provision, the State law, including its different penalty provision, did have a concurrent operation. However, that concurrent operation ceases, upon punishment under the State law, by the withdrawal of the federal law. The result is that upon its proper construction Pt 9.1 of the Code evinces no intention to deal exclusively and exhaustively with the prosecution and punishment of the acts proscribed by the trafficking provision in s 302.4440. 440 cf R v Winneke; Ex parte Gallagher (1982) 152 CLR 211 at 224. It should, however, be added that s 300.4 of the Code does not have the general significance which the Commonwealth and its supporters apparently seek to give it in their joint submissions. Rather, this provision is best understood in light of various drafting devices which have been used by the Parliament from time to time to convey the notion that a federal law is to be construed so as to accommodate or not exclude the operation of State laws in specified respects. Various examples may be given in which the Parliament has achieved this result by provisions which do not use the slippery term "intention" or the cognate "is not intended" which appears in s 300.4 of the Code. Section 41 of the Copyright Act 1912 (Cth) provided that nothing in the provision in s 40 for delivery of newly published books to the Parliamentary Library "shall be deemed to affect" the existing provisions in State laws requiring delivery to State libraries441. Section 9(1) of the Copyright Act 1968 (Cth) states that the statute, inter alia, "does not affect" the right of a person deriving title from a State to deal with articles forfeited under a State law. Section 5A of the Fisheries Act 1952 (Cth) stated that no federal law was to be taken to exclude the operation of State laws licensing the use of premises for the preparation, processing, storage or examination of fish. The Bankruptcy Act 1966 (Cth) "does not affect" a State law relating to matters with which that Act does not deal "expressly or by necessary implication" (s 9(1)). The Marriage Act 1961 (Cth) "shall not be taken to exclude the operation" of a State law relating to the registration of marriages (s 6). Certain provisions of the Protection of the Sea (Prevention of Pollution from Ships) Act 1983 (Cth) "shall be read and construed as being in addition to, and not in derogation of or in substitution for any law of a State" (s 5(2)). Perhaps the first forerunner of s 300.4 appeared in s 150 of the Petroleum (Submerged Lands) Act 1967 (Cth), which stated: "It is the intention of this Act not to affect the operation of any law of a State or Territory in the adjacent area" (emphasis added). Thereafter, s 75(1) of the Trade Practices Act 1974 (Cth) used the words "is not intended to exclude or limit the concurrent operation of any law of a State" (emphasis added). In R v Credit Tribunal; Ex parte General Motors Acceptance Corporation442, McLelland QC submitted that such a provision had a limited function of assisting in the construction of the operative provisions of the statute, but no more; the provision would be invalid if it attempted to override s 109 by rendering consistent laws that were inconsistent, or rendering inconsistent laws that were consistent, merely by stipulating this as the "intention" of the Parliament. The frequently cited443 passage in the reasons 441 See now Copyright Act 1968 (Cth), s 201(4). 442 (1977) 137 CLR 545 at 548-549; [1977] HCA 34. 443 See, most recently, Dickson v The Queen (2010) 241 CLR 491 at 507 [33]. of Mason J in General Motors444 is consistent with those submissions, particularly when the term "intention" is understood to be used there in the sense described in these reasons at [146]. The result is that a provision such as s 300.4 of the Code requires the federal law in question to be read and construed in a particular fashion, namely as not disclosing a subject-matter or purpose with which it deals exhaustively and exclusively, and as not immunising the rule of conduct it creates from qualification by State law. To the federal law so read and construed, s 109 then applies and operates to render inoperative any State law inconsistent with it. But by reason of the construction to be given to the federal law, there will be greater likelihood of a concurrent operation of the two laws in question. The position of the appellant It had been open to the appellant to observe both the federal and State criminal laws and to commit no offence. Thus, no case of inconsistency in the limited sense accepted by Griffith CJ in the early years of the Court was open to her. But she relied upon inconsistency in the sense given to s 109 by Dixon J in Ex parte McLean and The Kakariki. The gravamen of the appellant's submissions respecting s 109 was that s 71AC of the Drugs Act, read with the special provision in s 5 which placed upon her the burden of displacing her deemed possession, imposed upon her a standard of criminal liability which rendered her liable to conviction, in circumstances where she would not be liable to conviction for the offence created by s 302.4 of the Code. The failure to include in the trafficking provisions of the Code an equivalent of s 5 of the Drugs Act was said to reflect a considered federal legislative choice from which the State law could not detract without engaging s 109. The appellant submitted that her case and Dickson v The Queen445 were in pari materia. But it should be noted that the law of Victoria creating the crime of conspiracy which was at stake in Dickson rendered criminal conduct deliberately excluded from the federal offence446; in particular, the federal offence required the commission of an overt act pursuant to the agreement by at least one party to it before the offence was complete, and permitted withdrawal from the agreement before commission of an overt act447. 444 (1977) 137 CLR 545 at 563. 445 (2010) 241 CLR 491. 446 (2010) 241 CLR 491 at 504 [22]. 447 (2010) 241 CLR 491 at 505-506 [26]-[28]. With the conclusion reached in Section [H] of these reasons that s 5 of the Drugs Act has no linkage to s 71AC, there is removed the ground for the submissions by the appellant based upon Dickson. However, it should be added that the premise upon which the appellant's argument was based gave insufficient attention to the significance of the presumption against her which would have been presented by s 302.5 of the Code. This would have operated for the purpose of proving an offence against s 302.4 ("Trafficking controlled drugs") so that, if the appellant had possessed a traffickable quantity of a substance, she would be taken to have had the necessary intention of selling it to have been trafficking in the substance; this would be so unless she proved she did not have that intention. By reason of the inapplicability of s 5 to s 71AC of the Drugs Act, there is no comparable provision in the State law to the presumption created by s 302.5 of the Code. The result is that the situation disclosed by the present case is the reverse of that considered in Dickson; there the federal law, s 11.5 of the Code, excluded from the rule of conduct it prescribed significant elements to which the State law attached criminal liability. Section 11.5 of the Code, like the federal law considered in R v Loewenthal; Ex parte Blacklock448, upon its true construction may be seen to have contained an implicit negative; this denied the concurrent operation of the State law in respect of the acts the subject of the federal offence449. Here, absent the attachment of s 5 of the Drugs Act, s 71AC is less stringent than the provisions of the Code; the federal law cannot be said upon its proper construction designedly to have left a liberty which the operation of s 109 does not permit by the State law to be "closed up"450. Further, it is significant that to s 11.5 of the Code there was applicable no provision with respect to "intention", such as there is in s 300.4 of the Code451. The appellant then is left to emphasise differences in the maximum sanctions created by the two laws (15 years maximum for the State offence and 10 years maximum and 2,000 penalty units for the federal offence), and the possibility of a less than unanimous jury verdict at a State trial, as indicative of a legislative intention that the Code deal completely and exclusively with trafficking in proscribed substances. The appellant then submits that these differences so detract from the treatment of trafficking in the Code as to attract the operation of s 109. For the reasons given at [257] and [237] respectively in dealing with sub-issues (a) and (b) of the second issue of principle stated under 448 (1974) 131 CLR 338; [1974] HCA 36. 449 See, further, the discussion in Leeming, Resolving Conflicts of Laws, (2011) 450 Wenn v Attorney-General (Vict) (1948) 77 CLR 84 at 120; [1948] HCA 13. 451 Dickson v The Queen (2010) 241 CLR 491 at 508 [36]-[37]. the heading "The issues", these considerations cannot supply a case which impugns by force of s 109 the appellant's conviction and sentence under the State law. [K] RESULT AND ORDERS The appellant has succeeded in establishing that the Court of Appeal should have granted her leave to appeal against conviction and allowed her appeal. The orders of the Court of Appeal, including the declaration in order 5, should be set aside. In place thereof, there should be an order granting leave to appeal against conviction, allowing the appeal, setting aside the conviction and sentence, and ordering a new trial. There should also be a declaration that ss 33, 36 and 37 of the Charter are invalid. The appellant seeks a special costs order in her favour, at least with respect to the appeal to this Court. The Court undoubtedly has the power to make such an order452 although it would be unusual to exercise it in what was purely a "criminal case"453. But this appeal has been argued as a major constitutional case, including issues, such as the validity of s 36 of the Charter and the interpretation of s 75(iv) of the Constitution, in which the appellant had no immediate interest. In these special circumstances she should have an order against the second respondent for two-thirds of her costs in this Court. 452 Judiciary Act, ss 26, 32; High Court Rules 2004, r 50.01. 453 R v Whitworth (1988) 164 CLR 500; [1988] HCA 20. Hayne 280 HAYNE J. I agree with Sections [A] to [I] of the reasons of Gummow J. I disagree about the engagement of s 109 in this matter. For the reasons that follow, s 71AC of the Drugs, Poisons and Controlled Substances Act 1981 (Vic) ("the Drugs Act") is inconsistent with s 302.4 of the Criminal Code (Cth) ("the Code") and is thus invalidated by s 109 of the Constitution. Instead of ordering a new trial, the presentment filed against the appellant should be quashed and a declaration made that s 71AC of the Drugs Act is inconsistent with s 302.4 of the Code and invalid. The appellant should have two-thirds of her costs in this Court. The application of s 109 in this case raises an issue of fundamental constitutional importance. There can be no doubt that the federal Parliament sought to avoid inconsistency. Section 300.4(1) of the Code states, in terms, that Pt 9.1 of the Code (which includes s 302.4) "is not intended to exclude or limit the concurrent operation of any law of a State or Territory" (emphasis added). And the Attorneys-General for the Commonwealth, New South Wales, Victoria, South Australia, Western Australia, Tasmania and the Australian Capital Territory all joined in submitting that there is no inconsistency between the two provisions. The question for this Court is whether the result that the political branches of government seek to achieve is constitutionally permitted. The question must be answered by the application of fundamental constitutional principles. Those principles are founded in, and require an understanding of, the consequences that follow from there being in Australia a federal system of government in which there are "independent governments existing in the one area and exercising powers in different fields of action carefully defined by law"454. In particular, the principles that are to be applied recognise two unavoidable consequences455 of federation. First, the Constitution is and must be rigid. Second, within its powers, the federal Parliament is and must be paramount, but it is and must be incompetent to go beyond those powers. It is s 109 of the Constitution that expresses the principle of paramountcy. Questions of legislative inconsistency and paramountcy must be decided recognising one other and equally fundamental principle that is common to all developed legal systems456. The law does not admit of contradiction. The law may say many different things. In a federation there may be more than one 454 R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254 at 267-268; [1956] HCA 10. 455 Boilermakers (1956) 94 CLR 254 at 267. 456 Ffrost v Stevenson (1937) 58 CLR 528 at 572 per Dixon J; [1937] HCA 41. Hayne legislative voice. But in the end there is and can be only one body of law. There cannot be contrariety; there cannot be contradiction. The rules that make up the law, regardless of their origin as federal, State or Territorial, must speak as a single and coherent whole to those to whom they are addressed. Contradiction or contrariety may take various forms. The most obvious is where those to whom the laws are directed cannot obey both simultaneously. But there is also contradiction or contrariety when conflicting consequences are attached to breach of the one norm of conduct. The conflict in such a case can be seen by asking, before a contravention has occurred, what will be the consequences of doing the prohibited act. The answer "it depends" (upon which law is applied to the particular case) shows that there is contradiction or contrariety. The federal Parliament's statement that the law which it makes is "intended" to operate "concurrently" with State and Territory laws does not conclude an inquiry about the application of s 109. Just as the ultimate responsibility of deciding upon the limits of the respective powers of the integers of the federation is placed in the federal judicature457, so too the determination of whether there is inconsistency between federal and State laws rests with the judicial branch of government, not the legislative branch. What the political branches of the governments of the several integers of the federation want to achieve is bounded by what the Constitution permits. The issues that must be considered in this case are novel. Because the issues are novel they require much more than the consideration of extracts from reasons in past cases about the application of s 109, coupled with the assertion that those passages in the decided cases require the conclusion that the relevant laws of the Commonwealth constitute a concurrent scheme operating in parallel to State offences in respect of the same subject matter and are not inconsistent. Approaching the issue in that way, as so much of the argument in this matter has, does not recognise the novelty of the issues. More importantly, it does not address the relevant question: constitutionally, can the two laws constitute a concurrent scheme of that kind? To answer that question there must be a much deeper examination of the relevant principles. The issues that must be considered in this case are presented by a combination of two relatively recent developments. First, the federal Parliament, in exercise of the external affairs power, has enacted criminal laws dealing directly with subject matters (in this case the possession and supply of and trafficking in certain drugs) that for many years were dealt with only by State and Territory criminal laws. Second, the parliaments of the Commonwealth, the 457 Boilermakers (1956) 94 CLR 254 at 267-268. Hayne States and the Territories have all enacted458 their own distinctive sentencing legislation, the application of which will yield different outcomes in cases that are in all other relevant respects identical. So, for example, some States provide for fixing non-parole periods of imprisonment more or less mathematically; others do not. And of most immediate significance, with the enactment of the Crimes Legislation Amendment Act (No 2) 1989 (Cth), which introduced Pt IB into the Crimes Act 1914 (Cth), the Commonwealth ceased to pick up and apply459 State sentencing laws to federal offenders. Section 109 is engaged "[w]hen a law of a State is inconsistent with a law of the Commonwealth". Section 71AC of the Drugs Act and s 302.4 of the Code each provide a norm of conduct. The norm that each establishes may be assumed to be identical, but the consequences for contravention which the two sections prescribe are different. Each prescribes a different maximum penalty for contravention. Not only that, each section, by engaging other legislation of the relevant polity, prescribes, and will yield, different sentences for any contravention. The laws are inconsistent. Identifying the relevant question The question at the root of this case is how to identify the laws that are said to be inconsistent. Is it enough to notice that each provides for what may be assumed to be generally similar, even substantially identical, norms of conduct? Or does the different specification of penalty matter? Neither s 71AC of the Drugs Act nor s 302.4 of the Code is sufficiently identified by describing only the norm of conduct that it creates. To identify the relevant "law of a State" and the relevant "law of the Commonwealth" it is necessary to identify what each establishes more fully than by stating what it prohibits: whether only at the very general level of saying that each proscribes trafficking in certain drugs, or at some more specific level. The purpose of each law is more than just to announce to society that certain actions are not to be taken; each law seeks to secure that fewer of the prohibited actions are done and 458 Crimes Act 1914 (Cth), Pt IB (ss 16-22A); Crimes (Sentencing Procedure) Act 1999 (NSW); Sentencing Act 1991 (Vic); Criminal Law (Sentencing) Act 1988 (SA); Penalties and Sentences Act 1992 (Q); Sentencing Act 1995 (WA); Sentencing Act 1997 (Tas); Sentencing Act (NT); Crimes (Sentencing) Act 2005 (ACT). 459 Judiciary Act 1903 (Cth), s 68(1). Hayne to do that by providing for the punishment of those who do the acts that are prohibited460. This Court has recognised461 that the litigious world cannot be divided into only two parts, one marked "civil" and the other "criminal". But it remains useful, and in this case necessary, to acknowledge that the laws in question in this case each create a crime, and that a crime cannot sufficiently be described without reference to both the act or omission which is proscribed and the penal consequences that follow from contravention. So much has been accepted for centuries. Blackstone recognised it in his Commentaries on the Laws of England when he wrote462 that: "Upon the whole we may observe, that in taking cognizance of all wrongs, or unlawful acts, the law has a double view: viz. not only to redress the party injured β¦ but also to secure to the public the benefit of society, by preventing or punishing every breach and violation of those laws, which the sovereign power has thought proper to establish, for the government and tranquillity of the whole." John Austin, in The Province of Jurisprudence Determined, identified463 the essential elements of a positive law or rule as "command", "duty" and "sanction". Hence the definition of "crime" adopted by James Fitzjames Stephen464: "an act or omission in respect of which legal punishment may be inflicted on the person who is in default either by acting or omitting to act". And hence also the definition465 by Sir Samuel Griffith, in 1899 in the Criminal Code (Q), of an "offence" as "[a]n act or omission which renders the person doing the act or making the omission liable to punishment". It follows that, in this case, the identification of the laws to which s 109 refers as "a law of a State" and "a law of the Commonwealth" cannot stop at describing only those parts of the relevant sections of the Drugs Act and the 460 H L A Hart, Punishment and Responsibility: Essays in the Philosophy of Law, 461 Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd (2003) 216 CLR 161; [2003] HCA 49. 462 (1769), bk 4, c 1 at 7. 464 A History of the Criminal Law of England, (1883), vol 1 at 1. Hayne Code that prescribe the content of the norm of conduct which is enacted. In each case the description of the relevant law must include the consequences of contravention that are prescribed by the section's specification of the maximum penalty that may be imposed. The better view is that the prescription of consequences cannot be described sufficiently accurately without reference also to the way in which the prescription of a maximum penalty (within the four corners of the provision which is in issue) is elaborated by other legislation. It is the applicable sentencing legislation which gives content to the otherwise bald statement of a maximum penalty for the offence. But for immediate purposes what is critical to the proper application of s 109 is recognition that the relevant law of a State and the relevant law of the Commonwealth are each to be identified as both a statement of a norm of conduct and a prescription of penalty. Each of those parts of the relevant laws is equally important to the application of In the end this proposition was not challenged by any party or intervener. The appellant and the first and second respondents and interveners differed as to the consequences that followed once the relevant laws were identified in the manner described. The prescription of penalty in each law cannot be treated as some secondary or lesser element in the description of the laws in question. More particularly, specification of penalty is not to be treated as no more than a statement of the powers that are available upon proof of contravention. As Dixon J explained466 in Ffrost v Stevenson, a judge is not at liberty to disregard legislative commands once an accused has been presented. Upon conviction, a judge must act in accordance with the statute, and any applicable sentencing legislation, and make orders accordingly. Specification of penalty (both the type of penalty and its quantum) is a defining and thus an essential element of any crime. The specification of penalty is the means by which the legislation seeks to secure that fewer of the prohibited actions are done as well as to provide for punishment of those who contravene. That is why the consequences of contravention of s 71AC of the Drugs Act and s 302.4 of the Code cannot be dismissed from consideration in the application of s 109. As the plurality pointed out in Markarian v The Queen467: "Legislatures do not enact maximum available sentences as mere formalities. Judges need sentencing yardsticks. It is well accepted that 466 (1937) 58 CLR 528 at 572. 467 (2005) 228 CLR 357 at 372 [30]-[31]; [2005] HCA 25. Hayne the maximum sentence available may in some cases be a matter of great relevance. β¦ [C]areful attention to maximum penalties will almost always be required, first because the legislature has legislated for them; secondly, because they invite comparison between the worst possible case and the case before the court at the time; and thirdly, because in that regard they do provide, taken and balanced with all of the other relevant factors, a yardstick." Inconsistency of laws, at least in this case, depends upon difference between the relevant laws. It is therefore convenient to begin the more particular consideration of the application of s 109 in this case by identifying features of the laws in question that were or might be said to be relevant differences between them. It will then be appropriate to identify the argument against inconsistency, next to amplify what has been said about the constitutional purposes of s 109, and only then to examine the relevant principles that have been developed and should now be applied in the resolution of this case. Differences between the two laws First, much of the argument in this matter centred upon whether or how s 5 of the Drugs Act intersected with s 71AC, in a case where, as here, a person was accused of trafficking drugs by having a trafficable quantity of the drug in possession for sale. As is explained in the reasons of Gummow J, that dispute is to be resolved by concluding that s 5 of the Drugs Act does not speak to the compound expression "possession for sale" when it is used in s 70(1), which defines "traffick" for the purposes of s 71AC, and that, accordingly, s 5 of the Drugs Act provides no relevant point of difference between the elements of the offences created by s 71AC of the Drugs Act and s 302.4 of the Code. Second, it may be observed that the Drugs Act and the Code make different provisions with respect to the significance that is to be given to proof of possession of a certain quantity of prohibited drugs by an accused person. Section 73(2) of the Drugs Act provided that possession of a drug of dependence "in a quantity that is not less than the traffickable quantity applicable to that drug of dependence ... is prima facie evidence of trafficking by that person in that drug of dependence". By contrast, s 302.5 of the Code provided that: "(1) For the purposes of proving an offence against this Division, if a person has: possessed a trafficable quantity of a substance; Hayne the person is taken to have had the necessary intention or belief concerning the sale of the substance to have been trafficking in the substance. Subsection (1) does not apply if the person proves that he or she had neither that intention nor belief." Neither the parties, nor any of the interveners, emphasised this difference between the two provisions and, for the purposes of considering the engagement of s 109 in this case, it is convenient to assume, without deciding, that nothing turns on it. Third, at the relevant time, the two Acts prescribed a different weight of methylamphetamine as the relevant trafficable quantity for the purposes of the Act in question. For the purposes of s 302.4 of the Code, two grams was a trafficable quantity468. Under the Drugs Act, six grams was prescribed as a trafficable quantity469. Again, it was not submitted that anything turned, in this case, upon this difference and it, too, may be put aside from consideration. Fourth, because s 302.4 of the Code makes an offence against that section punishable by a term of imprisonment exceeding 12 months, s 4G of the Crimes Act 1914 provides that the offence is an indictable offence. That being so, s 80 of the Constitution is engaged and the trial must be by jury. It follows, from this Court's decision in Cheatle v The Queen470, that a verdict of guilt of an offence against s 302.4 of the Code cannot be returned otherwise than by unanimous verdict. By contrast, a verdict of guilt of an offence against s 71AC of the Drugs Act can, in certain circumstances, be returned by a majority verdict471. Contravention of the two provisions is thus to be determined by different modes of trial. Fifth, s 302.4 of the Code and s 71AC of the Drugs Act prescribe different punishments. The maximum penalty for contravention of s 302.4 of the Code is imprisonment for 10 years or 2,000 penalty units, or both. The maximum 468 Criminal Code (Cth), s 314.1(1). The relevant quantity was the weight of pure drug. 469 Drugs, Poisons and Controlled Substances Act 1981 (Vic), s 70 and Sched 11, Pt 3. The definition of "traffickable quantity" in s 70(1) treated the relevant quantity as "including any other substance in which [the drug] is contained or with which it is mixed". 470 (1993) 177 CLR 541; [1993] HCA 44. 471 Juries Act 2000 (Vic), s 46(2). Hayne penalty for contravention of s 71AC of the Drugs Act is "level 4 imprisonment", that is to say 15 years' imprisonment472. Sixth, not only are different maximum punishments prescribed by the two laws, different statutory provisions concerning the fixing of a sentence in any particular case will be engaged. A person convicted of an offence under s 302.4 of the Code is to be sentenced according to the provisions of Pt IB of the Crimes Act 1914. A person convicted of an offence under s 71AC of the Drugs Act is to be sentenced according to the provisions of applicable Victorian sentencing legislation, in particular the Sentencing Act 1991 (Vic). As cases like Hili v The Queen473 show, the provisions of federal and State legislation concerning sentencing differ in important respects and their application will yield different results in cases otherwise identical. It is the last two features of the two laws (the differences in maximum penalties and statutory sentencing provisions) that are most important in considering whether s 109 is engaged in this case. As already noted, whether the different prescription of what is a trafficable quantity, and whether the different statutory expression of the consequences at trial of proof of possession of a trafficable quantity, is or are important was not examined in argument and can conveniently be put aside from consideration. It will be sufficient for the purposes of this case to consider the application of s 109 of the Constitution on the footing that the two laws prescribe offences having identical elements, the punishment for which differs, both as to the maximum that may be imposed and as to the provisions that are engaged in fixing the sentence in any particular case. Although reference will be made, from time to time, to the fact that contravention of each offence will be determined according to different modes of trial, it will be unnecessary to determine whether this difference requires the conclusion that the two laws are inconsistent. That is a large question. Although it has been said more than once in cases concerning the application of s 109474 that the requirement of s 80 of the Constitution β that the trial of a federal indictable offence be by jury β is a consideration that bears upon the question of 472 Section 49 of the Sentencing Act 1991 (Vic) permitted a sentencing court to impose a fine in addition to, or instead of, a sentence of imprisonment. The maximum fine for an offence for which a maximum sentence of 15 years' imprisonment might be imposed was fixed by s 109(2) of the Sentencing Act as 1,800 penalty units. 473 (2010) 85 ALJR 195; 272 ALR 465; [2010] HCA 45. 474 See, for example, Hume v Palmer (1926) 38 CLR 441 at 450-451 per Isaacs J; [1926] HCA 50; Dickson v The Queen (2010) 241 CLR 491 at 504 [20]; [2010] HCA 30. Hayne inconsistency, it is better to leave for another day whether that requirement alone leads to the conclusion that two laws of the kind now in issue are inconsistent. The argument against inconsistency Despite the differences between the two laws, the first respondent (the prosecution at trial), the Attorney-General of the Commonwealth and the Attorneys-General for those States that intervened and the Australian Capital Territory all submitted that there is no inconsistency between them. Central to the argument against inconsistency was the provision made by s 300.4 of the Code. That section provides: "Concurrent operation intended This Part is not intended to exclude or limit the concurrent operation of any law of a State or Territory. (2) Without limiting subsection (1), this Part is not intended to exclude or limit the concurrent operation of a law of a State or Territory that makes: an act or omission that is an offence against a provision of this Part; or a similar act or omission; an offence against the law of the State or Territory. Subsection (2) applies even if the law of the State or Territory does any one or more of the following: provides for a penalty for the offence that differs from the penalty provided for in this Part; provides for a fault element in relation to the offence that differs from the fault elements applicable to the offence under this Part; provides for a defence in relation to the offence that differs from the defences applicable to the offence under this Part." Section 300.4 of the Code was said to have determinative significance because, so it was submitted, "[t]he test for inconsistency always turns on Hayne Commonwealth legislative intention" (emphasis added). This was said to be supported by the statement by Dixon J in Ex parte McLean475 that: "The inconsistency does not lie in the mere coexistence of two laws which are susceptible of simultaneous obedience. It depends upon the intention of the paramount Legislature to express by its enactment, completely, exhaustively, or exclusively, what shall be the law governing the particular conduct or matter to which its attention is directed." Support was also said to be found in the many decided cases476 in which this passage from the reasons of Dixon J in Ex parte McLean has been referred to or cited with approval. the that The proposition inconsistency always turns on test for Commonwealth legislative intention, if taken literally, would commit the application of s 109 to the Parliament. In terms the proposition is one which would always give determinative significance to a statement in federal legislation of what the Parliament intended as to the operation of State legislation. A proposition of that kind is not supported by any authority and should not be accepted. the Before considering whether some narrower understanding of proposition can be accepted, it is essential to begin by recognising that s 109 of the Constitution fulfils particular constitutional purposes. It is necessary to consider what has been said in cases that have been decided about s 109 with those constitutional purposes at the forefront of consideration. The constitutional purposes of s 109 The constitutional purposes of s 109 are identified by considering fundamental features of the Australian constitutional structure. As was pointed out in R v Kirby; Ex parte Boilermakers' Society of Australia477, a federal constitution must be rigid. The government that the Constitution establishes "must be one of defined powers; within those powers it must be paramount, but it must be incompetent to go beyond them"478 (emphasis added). As Joseph Story 475 (1930) 43 CLR 472 at 483; [1930] HCA 12. 476 For example, O'Sullivan v Noarlunga Meat Ltd (1956) 95 CLR 177 at 182; [1957] AC 1 at 24; Robinson v Western Australian Museum (1977) 138 CLR 283 at 311; [1977] HCA 46; Viskauskas v Niland (1983) 153 CLR 280; [1983] HCA 15; McWaters v Day (1989) 168 CLR 289 at 296; [1989] HCA 59. 477 (1956) 94 CLR 254 at 267. 478 Boilermakers (1956) 94 CLR 254 at 267. Hayne wrote in the nineteenth century, in his Commentaries on the Constitution of the United States479: "It would be a perfect solecism to affirm, that a national government should exist with certain powers; and yet, that in the exercise of those powers it should not be supreme." Story went on to say480: "If individuals enter into a state of society, the laws of that society must be the supreme regulator of their conduct. If a number of political societies enter into a larger political society, the laws, which the latter may enact, pursuant to the powers entrusted to it by its constitution, must necessarily be supreme over those societies, and the individuals, of whom they are composed. It would otherwise be a mere treaty, dependent upon the good faith of the parties, and not a government, which is only another name for political power and supremacy. ... Hence we perceive, that the above clause [the supremacy clause481] only declares a truth, which flows immediately and necessarily institution of a national from government.[482]" the The points made by Story were made with respect to the United States Constitution. But, despite the differences between the two systems, these particular observations apply with equal force to the Commonwealth Constitution and serve to explain why laws of the Commonwealth, validly made, are and must be paramount. The points made by Story are given textual expression in the Commonwealth Constitution in covering cl 5 and the provisions of Ch V, particularly ss 106-109. The provision, by s 109, that "[w]hen a law of a State is inconsistent with a law of the Commonwealth, the latter shall prevail, and the former shall, to the extent of the inconsistency, be invalid" must be understood as a necessary consequence of federation: a consequence expressed in covering cl 5 and its provision that "all laws made by the Parliament of the Commonwealth under the Constitution, shall be binding on the courts, judges, and people of every State 479 (1833), vol 3 at 693 Β§1831. 481 Article VI of the United States Constitution provides, in part: "This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding." 482 The Federalist No 33. See Gibbons v Ogden 9 US 1 at 210, 211 (1824); McCulloch v Maryland 17 US 316 at 405, 406 (1819). Hayne and of every part of the Commonwealth, notwithstanding anything in the laws of any State". As Mason J pointed out in University of Wollongong v Metwally483, "[i]nconsistency or repugnancy is a long-standing concept in the field of statutory law". It is a concept that is engaged "[w]here the provisions of two statutes are in conflict, so much so that they cannot be reconciled one with the other"484. And the concept of inconsistency or repugnancy is engaged in such a case because, as Mason J said485, "there is a consequential need to resolve the problem created by the conflict". If there is conflict between two statutes, and reconciliation is not possible, the law does not countenance simultaneous operation of the conflicting provisions. Doctrines of implied repeal resolve conflicts between legislation enacted by the one legislature. Conflicts between Imperial and colonial legislation were resolved in favour of the Imperial legislation. And in a federal system, the federal law prevails. The way in which the consequences of the exercise of legislative power by both the Commonwealth and a State with respect to a particular subject matter which results in inconsistency are worked out through the application of s 109 is of equal importance to the Commonwealth and to the States486. Likewise, the result of that working out (of whether a State law is invalid because inconsistent with a law of the Commonwealth) is of equal importance to both the Commonwealth and the States. But whether, and to what extent, s 109 applies to invalidate a State law is also of fundamental importance to those to whom the federal and State laws are, or but for s 109 would be, directed. This being so, it is evidently wrong to consider any question about the application of s 109 by disregarding the effect of the decision upon those to whom the laws in question are directed. And it would be, as Story put it, "a perfect solecism" to conclude that it is for the federal legislature to determine for itself whether or to what extent s 109 is engaged with respect to any particular law of the Commonwealth. Resolution of the question must rest with the judicial branch by its application of accepted principles. 483 (1984) 158 CLR 447 at 463; [1984] HCA 74. 484 (1984) 158 CLR 447 at 463. 485 (1984) 158 CLR 447 at 463. 486 cf Boilermakers (1956) 94 CLR 254 at 268 concerning the equal importance to the Commonwealth and the States of the demarcation of the powers of the judicature. Hayne Principles Examination of the cases decided about s 109 will reveal six points of present relevance. First, application of s 109 requires determination of the valid reach and operation of the federal law in question. (Here, no question of the validity of s 302.4 of the Code was agitated; argument centred upon the reach and operation of that section.) Second, the reach and operation of the federal law is to be determined by construing that law; that is, by reference to the language, purpose and scope of the law, viewed as a whole within its context, as well as by reference to considerations of consistency and fairness487. More particularly, if the metaphor of "intention" is employed (and it now seems ineradicable), the relevant "intention" of the federal Parliament is revealed by construction of the federal law in question. Use of the metaphor of "intention" or "will" must not be understood as inviting attention to the wishes or hopes of those who promoted the legislation in question. What matters is the reach and operation of the law in question as that reach and operation are ascertained by the conventional processes of statutory construction. The metaphor of intention must not obscure the centrality of construing the laws in question. Third, it must be accepted that any express statement in the federal law of the federal Parliament's "intention" will be relevant to the determination of whether s 109 is engaged. But such a statement does not, of itself and in every case, provide the answer to that question. In particular, a statement by the federal Parliament that an Act is not intended to cover a particular field, or that it is intended that federal and State law should operate "concurrently", does not conclude any issue about inconsistency of a State law with the relevant federal law. Fourth, one law is "inconsistent" with another where they "are in conflict, so much so that they cannot be reconciled one with the other"488. Laws cannot be reconciled if to give effect to one would alter, impair or detract from the other. Fifth, care must be exercised lest the classification of some examples of inconsistency as "direct", and others as "indirect", mask the central importance of deciding whether there is conflict by diverting attention to the attempt to classify what species of conflict is encountered. 487 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381-382 [69]-[70]; [1998] HCA 28. 488 University of Wollongong v Metwally (1984) 158 CLR 447 at 463. Hayne Sixth, care must also be taken lest the use of the metaphor of "intention" or "will" mask one or both of two logical fallacies that permeated much of the argument against inconsistency. The first of those fallacies is to treat a sufficient condition for concluding that two laws are inconsistent as a condition necessary to that conclusion. Recognising that a federal law is "intended" to be an exhaustive statement of the law on a particular subject matter (that is, that the federal law "covers the field") is undoubtedly sufficient reason to conclude that a State law on the same subject matter is inconsistent with the federal law. It by no means follows, however, that a conclusion that the federal law exhaustively states the law on a particular subject matter or covers a relevant field is a necessary condition for finding inconsistency. Section 300.4 is determinative of the present question only if intention is a necessary condition. The second fallacy is closely related. It confuses premise with conclusion. More specifically, the proposition that a federal law is an exhaustive and exclusive statement of the rules that govern a particular subject matter may be no more than an expression, in other words, of a conclusion that s 109 applies to invalidate inconsistent State laws. If the proposition is taken, not as a conclusion, but as a premise for argument about the application of s 109, error beckons. First, there is the confusion just mentioned between what is necessary and what is sufficient to establish inconsistency. Second, the metaphor of intention is used to obscure not only the centrality of determining, by an orthodox process of construction, the reach and operation of the two laws but also the necessity to determine whether the State law alters, impairs or detracts from the federal law. The conclusion that the federal law is or is not paramount must not be taken as the premise for argument. The development of accepted doctrine in argument by As was mentioned the Solicitor-General of the Commonwealth, there was a time, early in the life of the federation, when s 109 was understood as requiring consideration of no more than whether it was possible to obey both the relevant federal and State laws. But so to understand s 109 was rightly seen, by at least the decision in 1926 in Clyde Engineering Co Ltd v Cowburn489, as too narrow a view. In argument in Clyde Engineering, Owen Dixon KC described490 the question as being whether "there is a conflict between the wills of the two Legislatures". But the use of the metaphor of "will" (like that of "legislative intention") is apt to mislead if it is taken as the starting point of the relevant inquiry. It will mislead if it distracts attention from the need 489 (1926) 37 CLR 466; [1926] HCA 6. 490 (1926) 37 CLR 466 at 471. Hayne to construe the legislation in question. It is only by construction of the legislation that its reach and operation can be determined. That the construction of the legislation is the proper starting point for an inquiry about the application of s 109 is made plain by consideration of the whole of what was said by Dixon J not only in Ex parte McLean but also in Stock Motor Ploughs Ltd v Forsyth491 and Victoria v The Commonwealth ("The It is commonplace to begin examination of the application of s 109 by quoting, or at least citing, that part of the reasons of Dixon J in Ex parte McLean in which a distinction was drawn493 between a case in which "the Federal statute shows an intention to cover the subject matter and provide what the law upon it shall be" and a case where "the Federal law was intended to be supplementary to or cumulative upon State law". And frequent reference is made to this passage from the reasons of Dixon J with particular reference to the metaphor of "covering the field", an expression derived, at least immediately, from the reasons of Isaacs J in Clyde Engineering494. It is to be recalled that those who opposed inconsistency placed emphasis upon the statement of Dixon J, in Ex parte McLean, that inconsistency does not lie in the mere coexistence of two laws susceptible of simultaneous obedience but depends upon the intention of the paramount legislature to express by its enactment the law governing the particular conduct or matter completely. That proposition must be read in the light of all that Dixon J said in Ex parte McLean and in the light of the result to which he came. As to context, it is important to recognise the acceptance495 by Dixon J, as settled principle, that when the Parliament of the Commonwealth and the 491 (1932) 48 CLR 128; [1932] HCA 40. 492 (1937) 58 CLR 618; [1937] HCA 82. 493 (1930) 43 CLR 472 at 483. 494 (1926) 37 CLR 466 at 489: "If, however, a competent legislature expressly or impliedly evinces its intention to cover the whole field, that is a conclusive test of inconsistency where another legislature assumes to enter to any extent upon the same field." Very similar metaphors had been used previously in this connection in the arguments of counsel in Australian Boot Trade Employes Federation v Whybrow & Co (1910) 10 CLR 266 at 272; [1910] HCA 8 and The Commonwealth v Queensland (1920) 29 CLR 1 at 5; [1920] HCA 79, but had not been taken up in the decisions of the Court. 495 (1930) 43 CLR 472 at 483. Hayne Parliament of a State each legislate upon the same subject matter and prescribe what the rule of conduct should be, they make inconsistent laws, even if the rule of conduct is identical, at least if the sanctions differ. For this proposition Dixon J cited Hume v Palmer496. The principle applied in Hume v Palmer was identified497 by Dixon J as the federal statute showing "an intention to cover the subject matter" and provide exhaustively what the law upon that subject should be. And Dixon J drew a contrast with the case where "it appeared that the Federal law was intended to be supplementary to or cumulative upon State law". The repeated references by Dixon J to "intention" must not be misunderstood. As he later demonstrated in Stock Motor Ploughs Ltd498, the task is one of construing the relevant Act, not some exercise in divining the intention (expressed or unexpressed) of those who propounded or drafted the Act. And the point is put beyond doubt by the decision of Dixon J in Wenn v Attorney-General (Vict)499 and the reference there made to "the intention of the State legislation [in that case], ascertained by interpreting the statute" (emphasis added). The intention of which Dixon J spoke in Ex parte McLean was the objective intention of the legislation as revealed by its proper construction. So much is also revealed, in Ex parte McLean, by the application by Dixon J of the principle established in Hume v Palmer. It was that principle that dictated the outcome in Ex parte McLean. The State law in question in Ex parte McLean (s 4 of the Masters and Servants Act 1902 (NSW)) prescribed penal consequences for a worker who "neglects to fulfil" a contract of service. The federal law (s 44 of the Commonwealth Conciliation and Arbitration Act 1904 (Cth)) penalised the breach of an industrial award and the award in question required performance of the relevant contract of service. The State law dealing "directly with the relation of employer and employed, and in virtue of that industrial relation [making] penal the very default which the Federal law punishes somewhat differently in the regulation of the same relation"500, was held to be inconsistent with the federal law. The Parliament of the Commonwealth and the Parliament of New South Wales had each legislated upon the same subject matter and had each prescribed what the rule of conduct should be; the penalties for contravention differed; the laws were inconsistent. The federal "intention" to legislate on the subject matter exhaustively was identified from its 496 (1926) 38 CLR 441. 497 (1930) 43 CLR 472 at 483. 498 (1932) 48 CLR 128 at 136-140. 499 (1948) 77 CLR 84 at 122; [1948] HCA 13. See also at 119-120. 500 (1930) 43 CLR 472 at 486. Hayne having legislated on subject matter which included the subject matter to which the State law was addressed. The fact of its having legislated on the same subject matter demonstrated the relevant intention. The reference to the identity of the subject matter of the legislation is important. Laws directed to different subject matters More recent decisions show the importance of identifying whether a federal and a State law which are said to be inconsistent are directed to the same subject matter. Particular reference should be made to two of those cases: R v Winneke; Ex parte Gallagher501 and McWaters v Day502. Some emphasis was given in argument of the present appeal to the statement by Gibbs CJ in Gallagher503 that "the fact that a Commonwealth Act and a State Act impose different penalties for the same conduct does not necessarily mean that the laws are inconsistent". At times during the argument of this appeal, this proposition was treated as absolute and denying any relevance, in an inquiry about the application of s 109, to the observation that State and federal laws prescribe different penalties for the same conduct. But that is not what was said in Gallagher. The proposition was a more limited one, the exact content of which turns on the significance given to the limitation "necessarily". What was said by Gibbs CJ about difference in penalties must be read in the context of the whole of his Honour's reasons and the context of the issues presented in that case. Those matters of context will be examined next. When the sentence is read in its context, it is plain that Gibbs CJ did not advance, and cannot be understood as advancing, some general, let alone universal, proposition that State and Commonwealth laws making "the same conduct" subject to "different penalties" are not, or cannot be, inconsistent. At the time of the events the subject of consideration in Gallagher, s 6 of the Royal Commissions Act 1902 (Cth) made it an offence for a person appearing as a witness before a Royal Commission appointed by the federal Executive to refuse to answer any relevant question. A penalty of $1,000 was fixed. Section 19 of the Evidence Act 1958 (Vic), which applied to Royal Commissions established by the Victorian Executive, made it an offence for a person, without 501 (1982) 152 CLR 211; [1982] HCA 77. 502 (1989) 168 CLR 289. 503 (1982) 152 CLR 211 at 218. Hayne lawful excuse, to refuse or fail to answer any question touching the subject matter of the inquiry. The penalty fixed under s 20 of the Evidence Act was $1,500 or imprisonment for a term of not more than three months. Royal Commissions had been established by both the Commonwealth and the Victorian Governments to inquire into subjects that were related and to some extent overlapped. The one person was appointed Commissioner to conduct both inquiries. A number of persons called to give evidence to the Commissioner refused to answer questions touching the subject matter of both inquiries. They were prosecuted for and convicted of offences under the Evidence Act. It was submitted that s 6 of the Royal Commissions Act and ss 19 and 20 of the Evidence Act were inconsistent because "witnesses are exposed to different penalties under the Commonwealth and the State provisions"504. This was advanced as some species of operational inconsistency505 though, as Mason J said506, the case alleging inconsistency was "somewhat elusive". The Court held, by majority, that there was no inconsistency. For present purposes, it is convenient to focus chiefly upon the reasons of Gibbs CJ, which in relevant respects were adopted and applied in Viskauskas v Niland507. As Gibbs CJ said508, the Commissioner was conducting two inquiries: one under Commonwealth authority for Commonwealth purposes, the other under State authority for State purposes. Had the inquiries been conducted separately, a refusal to answer questions at each inquiry would have constituted two separate offences. The inquiries being held together, the refusal to answer a question constituted contravention of both Acts and the offender could be prosecuted and convicted under either Act. And, as Gibbs CJ pointed out509, the injustice of double punishment for what was a single act or omission was avoided by the provision of s 30(2) of the Acts Interpretation Act 1901 (Cth) then in force510. But as Gibbs CJ went on to say511: 504 (1982) 152 CLR 211 at 213. 505 (1982) 152 CLR 211 at 231-232 per Wilson J. 506 (1982) 152 CLR 211 at 220. 507 (1983) 153 CLR 280 at 295. 508 (1982) 152 CLR 211 at 218-219. 509 (1982) 152 CLR 211 at 219. 510 Section 30(2) provided that where an act or omission constituted an offence under a federal Act and a State Act, and the offender had been punished under the State (Footnote continues on next page) Hayne "The different penalties provided by the two Acts [the Royal Commissions Act and the Evidence Act] are in respect of what are in truth independent offences which are created by law to serve different purposes. It is not right to say that the Acts provide different penalties for the one offence. There is no inconsistency between Acts which prescribe different penalties for offences which, albeit constituted by the same conduct, are in substance different from one another." (emphasis added) By contrast, as Gibbs CJ had said earlier in his reasons512: "If the two laws are made for the same purpose β e.g. if they prescribe substantially identical rules on a particular subject but with different penalties for contravention β it will be easy to conclude that the Commonwealth law covers the whole subject-matter, and that there is an inconsistency: see Hume v Palmer513 and R v Loewenthal; Ex parte Blacklock514." (emphasis added) In McWaters v Day, the Court held that a provision of the Defence Force Discipline Act 1982 (Cth) making it an offence for "a defence member or a defence civilian" to drive a vehicle on service land while intoxicated to such an extent as to be incapable of having proper control of the vehicle was not inconsistent with a provision of a State Act (the Traffic Act 1949 (Q)) which made it an offence to drive a motor vehicle whilst under the influence of liquor. The Court held515 that the federal Act contemplated "parallel systems of military and ordinary criminal law and [did] not evince any intention that defence force members enjoy an absolute immunity from liability under the ordinary criminal law". The Defence Force Discipline Act was held516 not "to do other than enact a system of military law in accordance with the traditional and constitutional view of the supplementary function of such law". The Court thus held517 that the Act, the offender was not liable to be punished for the offence under the federal Act. 511 (1982) 152 CLR 211 at 219. 512 (1982) 152 CLR 211 at 218. 513 (1926) 38 CLR 441. 514 (1974) 131 CLR 338; [1974] HCA 36. 515 (1989) 168 CLR 289 at 298. 516 (1989) 168 CLR 289 at 298. Hayne federal Act was "supplementary to, and not exclusive of, the ordinary criminal law" and that it did "not deal with the same subject-matter or serve the same purpose as laws forming part of the ordinary criminal law". The laws now in question are, of course, evidently not directed to different subject matters. In the words of Gibbs CJ in Gallagher518, they are "made for the same purpose". Each of s 71AC of the Drugs Act and s 302.4 of the Code forms a part of what was called519, in McWaters v Day, "the ordinary criminal law": in the one case State criminal law and in the other federal criminal law. This is not a case like Gallagher where independent offences are created by law to serve different purposes. This is not a case like McWaters v Day where provisions made for the discipline of the defence forces stand in addition to, and not in substitution for, the ordinary criminal law. This is not a case like that postulated by Dixon J in Ex parte McLean520 where one law (a federal industrial award forbidding shearers to injure sheep when shearing) can be described as directed to one subject matter (industrial relations) and the other (a State law proscribing the unlawful and malicious wounding of an animal) as directed to a different subject matter (animal cruelty). "Direct" and "indirect" inconsistency From time to time, argument in the present matter proceeded on a footing that appeared to assume some rigid distinction between cases in which s 109 is engaged because the State law would alter, impair or detract from the federal law (so-called direct inconsistency) and cases in which s 109 is engaged because the federal law covers the field (so-called indirect inconsistency). No distinction of that kind can be made. So much is made plain by the decisions of Dixon J in Stock Motor Ploughs Ltd and The Kakariki. In Stock Motor Ploughs Ltd, "In this Court an interpretation of s 109 of the Constitution has been adopted which invalidates a law of a State in so far as it would vary, detract from, or impair the operation of a law of the Commonwealth. Further, when the Parliament appears to have intended that the Federal law shall be a complete statement of the law governing a particular 517 (1989) 168 CLR 289 at 299. 518 (1982) 152 CLR 211 at 218. 519 (1989) 168 CLR 289 at 299. 520 (1930) 43 CLR 472 at 485-486. 521 (1932) 48 CLR 128 at 136-137. Hayne relation or thing, it is considered that the operation of the Federal law would be impaired if the State law were allowed to affect the matter at all (Clyde Engineering Co v Cowburn522; H V McKay Pty Ltd v Hunt523; Hume v Palmer524; Ex parte McLean525)." That is, the case in which a federal law "covers the field" is a particular example of the more general proposition that there is inconsistency, and consequent invalidity, when to give effect to the State law would impair the operation of the federal law. Dixon J reiterated that principle in The Kakariki526 when he said: "When a State law, if valid, would alter, impair or detract from the operation of a law of the Commonwealth Parliament, then to that extent it is invalid. Moreover, if it appears from the terms, the nature or the subject matter of a Federal enactment that it was intended as a complete statement of the law governing a particular matter or set of rights and duties, then for a State law to regulate or apply to the same matter or relation is regarded as a detraction from the full operation of the Commonwealth law and so as inconsistent." Two features of this statement of relevant principles must be observed. First, the consequence of a conclusion that the federal law "covers the field" is that to give effect to the State law would detract from the full operation of the federal law, and it is on that account that inconsistency arises. That is, the case in which it is concluded that a federal law covers the relevant field is a particular example of a more general principle of inconsistency: that there is inconsistency whenever a State law alters, impairs or detracts from the operation of federal law. While it may sometimes be a useful tool of thought to seek to apply s 109 by reference to classifications of past instances of inconsistency (for example, by reference to whether the State and Commonwealth laws cannot both be obeyed, the Commonwealth law confers rights, privileges or immunities that the State law removes or the Commonwealth law by its provisions is a complete statement 522 (1926) 37 CLR 466. 523 (1926) 38 CLR 308; [1926] HCA 36. 524 (1926) 38 CLR 441. 525 (1930) 43 CLR 472. 526 (1937) 58 CLR 618 at 630. Hayne of the law on a certain subject matter527), such classes are not closed and must not be treated as stating exhaustively the operation of s 109. The fundamental question remains whether the State law alters, impairs or detracts from the Commonwealth law528. The second, and no less important, point to observe about what was said by Dixon J in The Kakariki is that whether a federal law is intended "as a complete statement of the law governing a particular matter or set of rights and duties" is a matter that is to be determined "from the terms, the nature or the subject matter" of the relevant federal law. Or as Dixon J later put the same point in Wenn v Attorney-General (Vict)529, the intention of legislation (there State legislation) is to be "ascertained by interpreting the statute". "Intention" is a conclusion reached about the proper construction of the law in question and nothing more. The conclusion that, on its proper construction, a federal law is a complete statement of the law governing a particular matter or set of rights and duties is more easily reached if, in its terms, that law states that that is the intended result. That is, whatever may be the nature or the subject matter of the federal law, the inclusion, in terms, of such a statement will point plainly (but because the question is one of construction of the whole Act, not always irresistibly) to the conclusion that a State law that regulates or applies to the same matter or relation would detract from the operation of the federal law and thus be inconsistent with Statements of negative intention The statement in a federal law of a negative intention (that the law is not intended to be a complete and exhaustive statement of the law governing a particular matter or set of rights and duties) necessarily presents more difficult issues. Instead of the paramount legislature marking out a field in which its law (by force of s 109) will take effect to the exclusion of other laws, the paramount legislature asserts that its law should be construed in a way that permits concurrent operation of State law. 527 This classification of inconsistency, based on American cases, was suggested by Mitchell KC and Starke as counsel in Australian Boot Trade Employes Federation v Whybrow & Co (1910) 10 CLR 266 at 272. 528 See, for example, Telstra Corporation Ltd v Worthing (1999) 197 CLR 61 at 76-77 [28]; [1999] HCA 12; Dickson v The Queen (2010) 241 CLR 491 at 502 [13]. 529 (1948) 77 CLR 84 at 122. Hayne That assertion of intended construction of the federal law cannot conclude the question whether any particular State law alters, impairs or detracts from the provisions of the federal law. As Mason J said in R v Credit Tribunal; Ex parte General Motors Acceptance Corporation530, with the concurrence of Barwick CJ, Gibbs, Stephen and Jacobs JJ, a statement in a Commonwealth law of a negative intention cannot displace the operation of s 109 in rendering the State law inoperative when there is "direct inconsistency or collision"531. As Mason J went on to say532: "All that it does is to make it clear that the Commonwealth law is not intended to cover the field, thereby leaving room for the operation of such State laws as do not conflict with Commonwealth law" (emphasis added). And it is to be recalled that a paradigm example of direct inconsistency identified by the Commonwealth and the Parliament of a State each legislate upon the same subject and prescribe what the rule of conduct shall be, they make laws which are inconsistent, notwithstanding that the rule of conduct is identical which each prescribes", at least where different penalties are fixed. in Ex parte McLean533 was: the Parliament of "When Deciding whether the provisions made by the laws in question are inconsistent despite a legislative statement of negative intention directs attention to what is meant when it is said that the two laws are to operate "concurrently". Something more must be said about that question. "Concurrent" operation The notion of "concurrent" operation of two laws may evoke more than one description of the way in which the laws operate. In some cases, the description "simultaneous operation" may be apt; in others, "parallel operation" would be better. But whatever explanation is given of the notion of "concurrent" operation of two laws, being forced, by the very terms in which each law is cast, to choose between the engagement in any particular case of one rather than the other is the antithesis of concurrent operation. The need to make a choice between the laws bespeaks antinomy: contradiction or contrariety. Reference is made to the necessity to make a choice in any particular case between the two laws. It was not suggested by any party or intervener that the two laws at issue in this case could be applied simultaneously. Those opposing 530 (1977) 137 CLR 545 at 563; [1977] HCA 34. 531 See also R v Loewenthal; Ex parte Blacklock (1974) 131 CLR 338 at 346-347 per 532 (1977) 137 CLR 545 at 563. 533 (1930) 43 CLR 472 at 483. Hayne inconsistency were at some pains to point out that prosecution under one law would preclude prosecution under the other534. But because there cannot be simultaneous engagement or even sequential engagement of the two laws, it follows that in every case in which it is said that the norm of conduct for which each provides has been contravened, a choice must be made between the laws: one law is applied to the exclusion of the other. And the choice that is made matters. It matters because different consequences of contravention are prescribed in an area of law where the Court has repeatedly stressed535 the importance of s 109 "not only for the adjustment of the relations between the legislatures of the Commonwealth and States, but also for the citizen upon whom concurrent and cumulative duties and liabilities may be imposed by laws made by those bodies". To apply one law rather than the other, where the outcome of applying one differs from the outcome of applying the other, does not give concurrent operation to both. Crimes Act 1914, s 4C(2) The provision by the federal Parliament, in s 4C(2) of the Crimes Act 1914, that punishment for an act or omission that constitutes a State offence shall be an answer to punishment for the same act or omission as a federal offence does not bear upon whether the laws in question in this matter are inconsistent. This Court has held536 more than once that s 4C(2) (or its legislative predecessor, s 30(2) of the Acts Interpretation Act 1901 (Cth)) can be engaged only if the relevant federal and State laws are both valid. Section 4C(2) is not to be engaged except in respect of a conviction for a State offence that has been duly entered. And of course there could not be a conviction for a State offence duly entered if the State law is invalidated by operation of s 109. This understanding of s 4C(2) is plainly right and should not be discarded. The provision operates on "a law of a State". If s 109 is engaged, there is no operative law of a State. Section 4C(2) thus does not speak at all to whether there is or is not concurrent operation of State and federal legislation that makes particular acts or omissions an offence against each. The Commonwealth submission to the contrary should be rejected. Inconsistency in this case 534 Crimes Act 1914 (Cth), s 4C(2). 535 Dickson v The Queen (2010) 241 CLR 491 at 503-504 [19]; see also University of Wollongong v Metwally (1984) 158 CLR 447 at 457-458, 476-477; Croome v Tasmania (1997) 191 CLR 119 at 129-130; [1997] HCA 5. 536 R v Loewenthal; Ex parte Blacklock (1974) 131 CLR 338 at 347; Dickson v The Queen (2010) 241 CLR 491 at 504 [21]. Hayne In the present case the Parliament of the Commonwealth, in enacting s 302.4 of the Code, and the Parliament of Victoria, in enacting s 71AC of the Drugs Act, have each legislated upon the same subject. Each has prescribed what the rule of conduct shall be. The rule of conduct which each prescribes can be assumed to be identical. But the maximum penalties prescribed by the two provisions differ. The mode of trial of a prosecution for each offence differs by the engagement in respect of the federal offence of s 80 of the Constitution. The fixing of punishment upon conviction for the offences differs because of the engagement of Pt IB of the Crimes Act 1914 in respect of a conviction for the federal offence but the engagement of the State sentencing statutes in respect of a conviction for the State offence. The State law alters, impairs or detracts from the federal law. The laws are inconsistent. The question presented by s 109 is not whether the State law alleged to be inconsistent with a law of the Commonwealth has limited or restricted some aspect of the Commonwealth's powers. That is, it is irrelevant, and wrong, to ask whether the Commonwealth's legislative power to create drug offences, or its executive power to prosecute offences against a law of the Commonwealth, is detracted from, altered or impaired by a State law that deals with that subject. As the plurality pointed out in O'Sullivan v Noarlunga Meat Ltd [No 2]537, "[i]n this Court it [the application of s 109] has always been regarded as a question, not between powers, but between laws made under powers" (emphasis added). less Further, and no importantly, principles about operational inconsistency considered in The Kakariki do not answer the question of inconsistency that arises here. No doubt it is right to say that the provisions of s 302.4 of the Code engage with other laws of the Commonwealth that provide a power to prosecute for an offence against a law of the Commonwealth. But whether the relevant power to prosecute is "or is intended to be" exclusive is wholly beside the point. The question is whether the two laws (as they have been identified earlier in these reasons) are inconsistent. That is a question about the coexistence of different criminal liabilities. To treat that question as answered by whether there is an exclusive power to prosecute is wrong as a matter of constitutional principle. Not least is that so because it is logically flawed. It assumes that there are two offences: one under State law and the other under Commonwealth law. It thus assumes the answer to the very question that is at issue. Asking whether powers to prosecute are concurrent is irrelevant. As noted earlier, the submission advanced on behalf of those who opposed inconsistency was that what would otherwise be a clear case of inconsistency of laws must in this case yield to the federal legislature's statement of intention in 537 (1956) 94 CLR 367 at 374 per Dixon CJ, Williams, Webb and Fullagar JJ; [1956] HCA 9. Hayne s 300.4 of the Code. That submission should be rejected. There are at least three reasons to do so. First, no reason was offered for taking what would be a radical step away from what for so long has been the accepted doctrine of the Court. Hitherto, the "covering the field" test for inconsistency, with its associated inquiry about whether a federal law is a complete statement of the law governing a particular matter or set of rights and duties, has been seen as a particular species of the genus of inconsistency538. The submissions on behalf of those opposing inconsistency sought to promote what was described as the search for legislative intention to the position of constituting an exhaustive statement of the operation of s 109. That is, inconsistency would be determined according only to whether the federal Parliament asserted that there should or should not be inconsistency. Yet hitherto, accepted doctrine has been, as stated by Mason J in the General Motors Acceptance Corporation case539, that "a provision in a Commonwealth statute evincing an intention that the statute is not intended to cover the field cannot avoid or eliminate a case of direct inconsistency or collision, of the kind which arises, for example, when Commonwealth and State laws make contradictory provision upon the same topic, making it impossible for both laws to be obeyed." Of course, an individual can obey both of the laws that are now in question. So much follows from the laws' prescription of prohibited conduct. Obedience is achieved by abstaining from the conduct in question. Hence the observation by Mason J that impossibility of dual obedience is but an example of direct inconsistency is important. The possibility of dual obedience does not conclude the inquiry about inconsistency. The second reason to reject the submission that what would otherwise be a clear case of inconsistency must yield to the statement of intention in s 300.4 is this. Two laws creating an identical norm of conduct, contravention of which is punishable as crime, where the provisions governing not only the maximum sentence but also the determination of the proper sentence differ, simply cannot operate "concurrently". The notion of "concurrent" operation, as that expression is used in s 300.4 of the Code, masks more than it reveals. To the extent to which s 300.4 suggests that there can be simultaneous application of the two laws, it is only if attention 538 See, for example, Telstra Corporation Ltd v Worthing (1999) 197 CLR 61 at 76-77 539 (1977) 137 CLR 545 at 563. Hayne is confined to the possibility of simultaneous obedience to both laws (by abstention from the prohibited conduct) that simultaneous application of the laws is possible. And as has already been seen, the possibility of simultaneous obedience does not, without more, answer the question presented by s 109. In this case, two "independent governments" existing in the one area have exercised powers in the same field of operation: the prohibition of trafficking in certain drugs. An essential premise for much, if not the whole, of the argument against inconsistency was that, although both the federal and State laws had the same field of operation, the federal law was not to be an exhaustive statement of rights and obligations in that field of operation. But the validity of that premise depends upon it being possible for the two laws to operate together. As the General Motors Acceptance Corporation case demonstrates, that is a result that can be achieved where the two laws in question imply terms of different content in the one contract. But in this case there can be no simultaneous application of both laws, only simultaneous obedience. Only one of the laws could be engaged in any particular case. Prosecution of one, whether to conviction or acquittal, would be a plea in bar to prosecution for the other. But more fundamentally than those considerations, at least in this case, where the punishments to be exacted are to be fixed according to different provisions of differing content, it is a legal nonsense (a perfect solecism) to say that two laws directed to the same subject matter which each create a crime (with identical elements but different modes of trial and punishment) can coexist. A choice must be made between them in any case in which it is alleged that a person has done what each prohibits. Inconsistency between the two laws is not avoided by treating the federal Parliament as having by s 300.4 enacted that, despite their inconsistency, either law may be engaged according to the choice made by a prosecuting authority. The logical and constitutional infirmity of the proposition is self-evident. The proposition is logically infirm because it presupposes the availability of choice when that is the question for decision. The constitutional infirmity lies in the implicit assumption that the Parliament can decide whether or when s 109 is engaged regardless of whether the relevant law of the State is inconsistent with the relevant law of the Commonwealth. The fundamental nature of the difficulty presented by the proposition that the separate administration of each law can somehow avoid inconsistency is further elucidated by asking: by what criteria is the choice between laws to be made by prosecuting authorities? Is the choice to be made according to whim or fancy? Surely not. Is it to be made according to a prosecutor's estimation of the likelihood of obtaining a unanimous jury verdict or the prosecutor's view of which system of fixing punishment is the more desirable? Again, surely not. Is it to be made, as was said to be the case, according to which police force investigated the crime? Why should the accident of the application of police resources alter the penalty to which an offender is to be exposed? Hayne If criteria are to be identified for a choice of this kind they must be found in the structure, scope and content of one or more of the Acts. But which Act? Neither the proper source of any relevant criteria nor their content is apparent. And if the relevant criteria were thought to include the existence of differences between mode of trial and punishment, those differences bespeak inconsistency. They do not provide any logical or otherwise sound basis in principle for choosing prosecution for one offence rather than the other. The difficulties attending such a choice point to the existence of a more fundamental difficulty. A choice is available only if the two laws are not inconsistent. The two laws are not inconsistent only if the penalties prescribed by each are treated as no more than powers available to a sentencing court upon conviction. But that is to deny the fundamental premise for consideration of the application of s 109 in this case: that the laws in issue must be identified as both norm and sanction. Of course it must be recognised that it is a commonplace of the criminal law that the conduct of an alleged offender may constitute more than one different crime. Prosecuting authorities must and regularly do choose what charge or charges will be preferred against such an offender. But reference to prosecutorial discretion in the present context is at best a distraction. It provides no answer to the issue that arises in this matter. The question at issue is whether the State law is valid. If it is not, no question of discretion arises. Asserting that there is a discretion assumes validity; it provides no argument in favour of that conclusion. Moreover, it is to be observed that there is a real and radical difference between observing that one course of conduct may constitute several different crimes and this case. An offender's conduct will often constitute more than one crime. But that is because different aspects of a single course of conduct can be isolated as satisfying the elements of offences that are defined differently and attract distinct punishments. Here it is said that an alleged offender's conduct constitutes two crimes whose elements are identical. The third reason to reject the submission that s 300.4 avoids what would otherwise be inconsistency is no less fundamental than the two that have already been considered. As already noted, the argument against inconsistency depended in large part upon converting what has hitherto been well recognised as a sufficient basis for identifying inconsistency (the federal law reveals an intention to cover the area exhaustively) into a necessary condition for inconsistency. That step must not be taken. Even as the argument was advanced, the generality of the proposition that "the test for inconsistency always turns on Commonwealth legislative intention" was acknowledged to require qualification for cases where dual obedience was not possible or where a right or privilege given by one law was taken away or qualified by the other. And a further telling qualification was accepted in the course of argument. It was accepted that there could be cases Hayne where the penalties prescribed by the State and federal law could be so different that the State law would alter, impair or detract from the federal law. That is, it was accepted that if one law treated breach of a norm as warranting relatively modest punishment but the other treated breach of the same norm as attracting condign punishment, one law altered, impaired or detracted from the other. Which law was the more stringent does not matter. The concession that difference in punishment alters, impairs or detracts from the federal law demonstrates the infirmity of the proposition that lay at the centre of the argument against inconsistency. The acceptance of any qualification to the proposition advanced by those who asserted there was no inconsistency between the laws denies its validity as a proposition of universal application. As has also been pointed out earlier, the argument against inconsistency confused premise with conclusion by converting a statement of conclusion into a premise for an argument that s 109 is not engaged. On the assumption identified at the outset of these reasons (that the two laws prescribe offences having identical elements) the two laws prescribe different punishments and are inconsistent. Which is the more lenient is irrelevant. The other differences between the laws identified at the outset of these reasons do not point away from that conclusion. Those differences do not deny that the laws are directed to the same subject matter. Their existence is further demonstration that the laws cannot be applied together. The differences not being addressed in argument they need not be considered further. Nor was it suggested that, if there were inconsistency between the two laws, the inconsistency would invalidate s 71AC of the Drugs Act only as to part. Correctly, no question of severance or reading down was said to arise. Consequences To hold that s 71AC of the Drugs Act is inconsistent with s 302.4 of the Code and invalid will contradict the evident and expressed wish of those who framed the Code. It is a conclusion that will likely affect the validity of other provisions of State law. It may be said that so to hold will lead to disruption to the administration of the criminal law because it will cast doubt on the validity of the convictions of offenders who were prosecuted under State laws. Whether or not that fear would come to pass would require close examination of whether and how a conviction recorded would be set aside when the time for appeal has expired or an appeal has already been heard and determined. Whatever the outcome of that analysis in any particular case, it is to be borne at the forefront of consideration that the issue of inconsistency of laws is fundamental to the framework of the system of government for which the Constitution provides. Proper formulation and application of constitutional Hayne principle cannot yield to considerations of what may be temporarily expedient or convenient. Nor can the wishes of those who promote or support particular legislation be given precedence over the proper application of the Constitution. 370 HEYDON J. Was the jury direction adequate? That turns on the correct interpretation of the Drugs, Poisons and Controlled Substances Act 1981 (Vic) ("the Act"). The interpretation of the Act is relevant to two issues. The first is whether the operation of the Act is different from that assumed by the parties, the trial judge and the Court of Appeal. The second is whether s 109 of the Constitution renders the Act partly inoperative because of inconsistencies with provisions of the Criminal Code (Cth) ("the Code"); if so, the appellant was convicted of an offence not known to the law. In turn the interpretation of the Act may depend on the Charter of Human Rights and Responsibilities Act 2006 (Vic) ("the Charter"). It is necessary, then, to ask the following questions: "Is any part of the Charter valid?" The answer is "No"540. "Does s 5 of the Act apply to s 71AC?" The answer is "Yes"541. "Did the Court of Appeal interpret s 5 of the Act correctly?" The answer is "Yes"542. "Are ss 5 and 71AC of the Act inconsistent with ss 13.1, 13.2 and 302.4 of the Code and therefore inoperative?" The answer is "No"543. "Has the appellant any valid complaint about the adequacy of the directions to the jury?" The answer is "No"544. Hence the appeal must be dismissed. The facts On 14 January 2006, the appellant, Vera Momcilovic, owned and occupied apartment 1409 at Regency Towers, 265 Exhibition Street, Melbourne. It was a three bedroom apartment. She resided there with Velimir Markovski. On 14 January 2006, two men, Anthony Sheen and David Moir, were observed by police officers to enter the building and to meet Mr Markovski, who escorted 540 See below at [379]-[457]. 541 See below at [458]-[463]. 542 See below at [464]-[469]. 543 See below at [470]-[486]. 544 See below at [487]-[499]. them to the 14th floor. Messrs Sheen and Moir were followed from the building by police officers who found them to be in possession of 28 grams of methylamphetamine in packages of 14 grams each. As a result, police officers executed a search warrant at apartment 1409 that afternoon. In the course of the search, they found in the freezer compartment of a bar-size refrigerator in the kitchen a plastic bag containing 64.6 grams of 50 percent pure methylamphetamine. In the crisper section of the refrigerator they found a plastic Tupperware container containing 20 smaller plastic bags containing various amounts of methylamphetamine from 0.9 grams to 98.6 grams with purities ranging from 16 percent to 50 percent with a total weight of 394.2 grams. In the kitchen cupboard above the sink they found a Moccona coffee jar containing 325.8 grams of a substance that included an indeterminate amount of methylamphetamine. In addition, they located two sets of electronic scales, a further bag of an undefined crystalline material, a smaller container of a white crystalline material described by Mr Markovski in evidence as "artificial sugar" to be added to the methylamphetamine, another coffee jar containing a white powder, a number of smaller plastic bags similar to those found in the crisper, and a spatula. In the rubbish bin they found remnants of plastic bags that matched those found in the possession of Messrs Sheen and Moir. And they located the sum of $165,900 in cash in a shoe box on a shelf in a "walk-in robe" off the master bedroom which the appellant shared with Mr Markovski. Mr Markovski's DNA was discovered on the plastic bag that contained the Tupperware container in the crisper. Neither the appellant's DNA nor her fingerprints were found on any of the items seized. Mr Markovski pleaded guilty to trafficking in methylamphetamine and cocaine. The prosecution case was that the appellant's apartment was operating as a minor amphetamine factory in which Mr Markovski was conducting a business of diluting amphetamine and selling it. The prosecution alleged that the appellant was providing the facility from which the operation took place. The prosecution alleged that the appellant was aware that Mr Markovski was trafficking in methylamphetamine from her apartment and storing it there. The appellant's difficulty was that the incriminating items were large in number and were found all over the small apartment. They were items not normally found in apartments. The appellant invited the jury to believe that she was unaware of any of them β that she had never noticed the plastic bag containing drugs in the freezer compartment, or the plastic bags in the crisper section, or the Moccona coffee jar containing drugs, or the other items capable of use in the manufacture of drugs, or the large amount of cash. She said that she hardly used the refrigerator and that other items were found in cupboards that were not easy to gain access to. In a most courteous cross-examination, counsel for the prosecution asked some simple questions about the customary course of domestic life and the improbabilities of her evidence in view of it. The jury evidently did not think she dealt with these questions convincingly. The trial judge considered that the appellant was closely pressed as to her knowledge of the prior drug convictions of Mr Markovski and that she dissembled in her evidence before admitting awareness of them. It is plain that the jury rejected the appellant's invitations and disbelieved the exculpatory evidence of Mr Markovski as well. The charge The charge was: "The Director of Public Prosecutions presents that Vera Momcilovic at Melbourne β¦ on the 14th day of January 2006 trafficked in a drug of dependence namely Methylamphetamine." The provisions of the Act The conduct charged was contrary to s 71AC of the Act. It provides: "A person who, without being authorized by or licensed under this Act or the regulations to do so, trafficks or attempts to traffick in a drug of dependence is guilty of an indictable offence and liable to level 4 imprisonment (15 years maximum)." The expression "traffick" in relation to a drug of dependence is defined in s 70(1) as including: sell, exchange, agree to sell, offer for sale or have in possession for sale, a drug of dependence". The prosecution relied on the words "have in possession for sale". Section 5 of the Act provides: "Without restricting the meaning of the word possession, any substance shall be deemed for the purposes of this Act to be in the possession of a person so long as it is upon any land or premises occupied by him or is used, enjoyed or controlled by him in any place whatsoever, unless the person satisfies the court to the contrary." Issue (a): Is any part of the Charter valid? No contradictor. Two notable features of the case created some difficulties. It is notable for the number of points which either were raised for the first time in this Court and not raised in the Victorian courts, or were not raised by the parties in this Court but were raised by members of the Court. It is also notable for the fact that on a key point β the constitutional validity of the Charter as a whole β there was no contradictor, although the question was occasionally alluded to in oral argument. Naturally the appellant supported the validity of the Charter, for it was a key element in her arguments. Naturally the first respondent and the Attorney-General for the State of Victoria, who was the second respondent, supported the validity of the legislation enacted by the Victorian legislature, for they were organs of the Victorian Government. Naturally the Victorian Equal Opportunity and Human Rights Commission, the third respondent, argued for the validity of the Charter. Naturally the Australian Capital Territory Attorney-General did so, for it has legislation similar to the Charter. Naturally the Human Rights Law Centre Ltd ("the Centre") did so. And, whether naturally or not, all the other interveners did so, although the Attorney-General for the State of Western Australia, and to a lesser extent the Attorney-General of the Commonwealth, seemed to hover on the brink of attack. Two characteristics of the Charter. The Charter may reflect much of what is best and most enlightened in the human spirit. But there are some virtues that cannot be claimed for it. One is originality. For a great many of the rights it describes already exist at common law or under statute. In that form, the rights are worked out in a detailed, coherent and mutually consistent way. Thus the very general rights to liberty and security in s 21 may be compared with the incomparably more specific and detailed rules of criminal procedure which exist under the general law. Those rules are tough law. Infringement can lead to criminal punishment, damages in tort and evidentiary inadmissibility. They were worked out over a very long time by judges and legislators who thought deeply about the colliding interests and values involved in the light of practical experience. Then there has been introduced in recent decades a mass of detailed anti-discrimination and other human rights legislation, both State and federal. And there are the roles of State, federal and other ombudsmen. As a former Commonwealth Ombudsman has remarked545: is upon bills of rights, courts and "The metres of books about human rights on law library shelves rarely mention the Ombudsman as a human rights agency. The focus overwhelmingly international instruments. Yet β¦ complaint investigation by the Ombudsman is directly concerned with human rights issues, in areas as diverse as law enforcement, withdrawal of social security benefits, detention of immigrants, treatment of young children, imposition of taxation penalties, and the exercise of government coercive power." 545 McMillan, "The Ombudsman and the Rule of Law", paper delivered at the Public Law Weekend, 5-6 November 2004 at 15. Another virtue which the Charter lacks is adherence to key values associated with the rule of law β and the protection of human rights is commonly, though not universally546, thought to be closely connected to the rule of law. One value associated with the rule of law from which the Charter departs is certainty, particularly in s 7(2)547. Application of the Charter is very unlikely to make legislation more certain than it would have been without it. A further value associated with non-retrospectivity. Section 49(1) provides: the Charter departs law from which the rule of "This Charter extends and applies to all Acts, whether passed before or after the commencement of Part 2, and to all subordinate instruments, whether made before or after that commencement." Thus the Charter applies to the very numerous enactments existing before it came into force. The Charter can also affect conduct carried out under those enactments before that time, because conduct carried out in reliance on a pre-Charter interpretation of legislation, and lawful if that interpretation is correct, may retrospectively be rendered unlawful by a new interpretation now compelled by the Charter. The correct interpretation of the Charter is thus a matter of fundamental importance, for past as well as future legislation. Approaching the interpretation of the Charter. There are several reasons for not interpreting the Charter narrowly. First, if ever there were legislation which is on its face reforming and remedial in character, it is the Charter. Its very name is significant, with its echoes of Magna Carta, of the French Charter of 1814 and of the People's Charter of 1838. Reforming and remedial legislation, particularly human rights legislation, is to be interpreted amply, not narrowly548. As Cooke P said549: 546 Raz, "The Rule of Law and Its Virtue", (1977) 93 Law Quarterly Review 195. 547 Discussed below at [408]-[439]. 548 Examples where the principle has been applied to human rights legislation in specific fields include R v Kearney; Ex parte Jurlama (1984) 158 CLR 426 at 433; [1984] HCA 14 (Aboriginal land rights); Waters v Public Transport Corporation (1991) 173 CLR 349 at 372; [1991] HCA 49 (anti-discrimination legislation); IW v City of Perth (1997) 191 CLR 1 at 12; [1997] HCA 30 (equal opportunity legislation). 549 R v Butcher [1992] 2 NZLR 257 at 264. "What can and should now be said unequivocally is that a parliamentary declaration of human rights and individual freedoms, intended partly to affirm β¦ commitment to internationally proclaimed standards, is not to be construed narrowly or technically." Secondly, s 32 of the Charter, which relates to the interpretation of statutory provisions in a way that is compatible with human rights, being a statutory provision, must itself be interpreted in a way that is compatible with human rights β that is, amply. Thirdly, the more narrowly the Charter is interpreted, the more it will come to correspond only with various rules which can only be overturned by clear legislative words pursuant to what is sometimes called the "principle of legality"550, and hence the less point it will have. Fourthly, the Preamble is relevant: "On behalf of the people of Victoria the Parliament enacts this Charter, recognising that all people are born free and equal in dignity and rights. This Charter is founded on the following principles β human rights are essential in a democratic and inclusive society that respects the rule of law, human dignity, equality and freedom; human rights belong to all people without discrimination, and the diversity of the people of Victoria enhances our community; human rights come with responsibilities and must be exercised in a way that respects the human rights of others; human rights have a special importance for the Aboriginal people of Victoria, as descendants of Australia's first people, with their diverse spiritual, social, cultural and economic relationship with their traditional lands and waters." These are wide and important principles. Legislation which is founded on them cannot be interpreted in any restrictive fashion. Fifthly, although normally recourse to travaux prΓ©paratoires is barren and useless, the generality and obscurity of the Charter551 requires them to be 550 See below at [444]. 551 These and similar descriptions below of the statutory language are not criticisms of those who drafted the Charter. The drafting is in large measure based on (Footnote continues on next page) considered, both for the present purpose and for other purposes552. For example, the Attorney-General in his Second Reading Speech said553: "Australia is the last major common law-based country that does not have a comprehensive human rights instrument that ensures that fundamental human rights are observed and that the corresponding obligations and responsibilities are recognised." (emphasis added) legislation in other jurisdictions. The language was carefully chosen for particular purposes. 552 The Interpretation of Legislation Act 1984 (Vic), s 35, provides: "In the interpretation of a provision of an Act or subordinate instrument β a construction that would promote the purpose or object underlying the Act or subordinate instrument (whether or not that purpose or object is expressly stated in the Act or subordinate instrument) shall be preferred to a construction that would not promote that purpose or object; and (b) consideration may be given to any matter or document that is relevant including but not limited to β reports of proceedings in any House of the Parliament; (iii) explanatory memoranda or other documents laid before or otherwise presented to any House of the Parliament; and Parliamentary reports of Royal Commissions, Committees, Law Reform Commissioners and Commissions, Boards of Inquiry or other similar bodies." Section 35(b)(ii) permits recourse to the Second Reading Speech, s 35(b)(iii) to the Explanatory Memorandum, and s 35(b)(iv) to the Human Rights Consultation Committee, Rights, Responsibilities and Respect: The Report of the Human Rights Consultation Committee (2005). It is noteworthy that s 35 does not contain restrictions of the kind imposed by s 15AB(1) and (3) of the Acts Interpretation Act 1901 (Cth). 553 Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 4 May 2006 at "Speak for England!" cried out Leo Amery, and the Attorney-General for the State of Victoria seems to have decided to speak not just for Victoria, but for all Australia. The emphasised words are strong words. They send the message that Australia's benighted isolation on a lonely island lost in the middle of a foggy sea must be terminated. And if the Charter is to be comprehensive, and is to ensure both observance and recognition of fundamental human rights, it must be interpreted with some amplitude. In addition, the Attorney-General said554: "This bill further strengthens our democratic institutions and the protections that currently exist for those human rights that have a strong measure of acceptance in the community β civil and political rights. We must always remember that the principles and values which underlie our democratic and civic institutions are both precious and fragile." The precious and fragile nature of these principles and values points to the view that the Charter will have to be interpreted so as to remove the fragility and the preserve Attorney-General's statement that the Bill "will be a powerful tool"555. The same conclusion the preciousness. follows from If the choice is between reading a statutory provision in a way that will invalidate it and reading it in a way that will not, a court must always choose the latter course when it is reasonably open556. One question here is whether the course of reading the Charter so as to validate it is reasonably open. 554 Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 4 May 2006 at 555 Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 4 May 2006 at 556 Residual Assco Group Ltd v Spalvins (2000) 202 CLR 629 at 644 [28]; [2000] HCA 33. See also Davies and Jones v The State of Western Australia (1904) 2 CLR 29 at 43; [1904] HCA 46; Ex parte Walsh and Johnson; In re Yates (1925) 37 CLR 36 at 127 and 138; [1925] HCA 53; Federal Commissioner of Taxation v Munro (1926) 38 CLR 153 at 180; [1926] HCA 58; Attorney-General (Vict) v The Commonwealth (1945) 71 CLR 237 at 267; [1945] HCA 30; R v Director-General of Social Welfare (Vict); Ex parte Henry (1975) 133 CLR 369 at 374; [1975] HCA 62; Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1 at 14; [1992] HCA 64; Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476 at 504 [71]; [2003] HCA 2; New South Wales v The Commonwealth (Work Choices Case) (2006) 229 CLR 1 at 161 [355]; [2006] HCA 52; Gypsy Jokers Motorcycle Club Inc v Commissioner of Police (2008) 234 CLR 532 at 553 [11]; [2008] HCA 4. The nature of judicial power in relation to the common law. William Paley said557: "The first maxim of a free state is, that the laws be made by one set of men, and administered by another". Legislators make the laws. Judges administer them. Thus in Osborn v Bank of the United States, Marshall CJ said, speaking of statute law558: "Judicial power, as contradistinguished from the power of the laws, has no existence. Courts are the mere instruments of the law, and can will nothing. When they are said to exercise a discretion, it is a mere legal discretion, a discretion to be exercised in discerning the course prescribed by law; and, when that is discerned, it is the duty of the court to follow it. Judicial power is never exercised for the purpose of giving effect to the will of the judge; always for the purpose of giving effect to the will of the legislature; or, in other words, to the will of the law." And in Wayman v Southard he said559: "The difference between the departments undoubtedly is, that the legislature makes, the executive executes, and the judiciary construes the law; but the maker of the law may commit something to the discretion of the other departments, and the precise boundary of this power is a subject of delicate and difficult inquiry, into which a court will not enter unnecessarily." It is necessary to do so in this appeal. In contrast, outside the field of statute law, there is a judicial power to change common law and equitable rules. The courts are entitled to fulfil the "purposes of developing the law, maintaining its continuity and preserving its coherence."560 To that end, they may "seek to extend the application of accepted principles to new cases or to reason from the more fundamental of settled legal principles to new conclusions or to decide that a category is not closed against [unforeseen] instances which in reason might be subsumed thereunder."561 557 The Principles of Moral and Political Philosophy, 10th American ed (1821) at 389. 558 22 US 738 at 866 (1824). 559 23 US 1 at 46 (1825). The first 20 words were quoted with approval by Isaacs J in New South Wales v The Commonwealth (1915) 20 CLR 54 at 90; [1915] HCA 17. 560 Dixon, "Concerning Judicial Method", (1956) 29 Australian Law Journal 468 at 561 Dixon, "Concerning Judicial Method", (1956) 29 Australian Law Journal 468 at However, there are limits on the judicial power to change common law and equitable rules. In Breen v Williams562, Gaudron and McHugh JJ said: "Advances in the common law must begin from a baseline of accepted principle and proceed by conventional methods of legal reasoning. Judges have no authority to invent legal doctrine that distorts or does not extend or modify accepted legal rules and principles. Any changes in legal doctrine, brought about by judicial creativity, must 'fit' within the body of accepted rules and principles. The judges of Australia cannot, so to speak, 'make it up' as they go along. It is a serious constitutional mistake to think that the common law courts have authority to 'provide a solvent'563 for every social, political or economic problem. The role of the common law courts is a far more modest one. In a democratic society, changes in the law that cannot logically or analogically be related to existing common law rules and principles are the province of the legislature. From time to time it is necessary for the common law courts to re-formulate existing legal rules and principles to take account of changing social conditions. Less frequently, the courts may even reject the continuing operation of an established rule or principle. But such steps can be taken only when it can be seen that the 'new' rule or principle that has been created has been derived logically or analogically from other legal principles, rules and institutions." In Mabo v Queensland (No 2)564, Brennan J employed a colourful metaphor: "In discharging its duty to declare the common law of Australia, this Court is not free to adopt rules that accord with contemporary notions of justice and human rights if their adoption would fracture the skeleton of principle which gives the body of our law its shape and internal consistency. Australian law is not only the historical successor of, but is an organic development from, the law of England." 562 (1996) 186 CLR 71 at 115; [1996] HCA 57. See also at 99 per Dawson and 563 Tucker v United States Department of Commerce 958 F 2d 1411 at 1413 (7th Cir, 564 (1992) 175 CLR 1 at 29; [1992] HCA 23. "We appreciate the ease with which, if we were careless or ignorant of precedent, we might deem it enlightened to assume [the power in dispute]. We do not forget the continuous process of developing the law that goes on through the courts, in the form of deduction, or deny that in a clear case it might be possible even to break away from a line of decisions in favor of some rule generally admitted to be based upon a deeper insight into the present wants of society. But the improvements made by the courts are made, almost invariably, by very slow degrees and by very short steps. Their general duty is not to change, but to work out, the principles already sanctioned by the practice of the past." Thus the courts seek not to "overstep the boundary which we traditionally set for ourselves, separating the legitimate development of the law by the judges from legislation."566 There are "limits to permissible creativity for judges" and there is "forbidden territory"567. The following are among the factors relevant to marking the limits between what is permitted and what is forbidden: whether the rule being changed is seen as dealing with "[f]undamental legal doctrine", for that "should not be lightly set aside"568; whether the "solution is doubtful", in which case the matter is best left to the legislature569; whether the change is large or small, radical or insignificant; whether the courts have particular expertise in assessing the merits of the change and the methods by which it is to be effectuated; whether the Executive and the legislature have superior methods of investigating the need for change570, and of persuading the public to support it or at least accept it; whether the change deals with controversial moral issues571, or "[d]isputed matters of social policy", rather than "purely legal problems"572; 565 Stack v New York, NH & HR Co 58 NE 686 at 687 (Mass, 1900). 566 Woolwich Equitable Building Society v Inland Revenue Commissioners [1993] AC 70 at 173 per Lord Goff of Chieveley. 567 Rees v Darlington Memorial Hospital NHS Trust [2004] 1 AC 309 at 328 [46] per Lord Steyn. 568 C (A Minor) v Director of Public Prosecutions [1996] AC 1 at 28 per Lord Lowry. 569 C (A Minor) v Director of Public Prosecutions [1996] AC 1 at 28 per Lord Lowry. 570 Rees v Darlington Memorial Hospital NHS Trust [2004] 1 AC 309 at 335 [77]. 571 Rees v Darlington Memorial Hospital NHS Trust [2004] 1 AC 309 at 328 [46]. 572 C (A Minor) v Director of Public Prosecutions [1996] AC 1 at 28 per Lord Lowry. whether the change will fail to produce "finality or certainty"573; whether the change will destabilise or render unclear or incoherent other parts of the law574; whether the field is one in which the legislature has been active575, or one in which the legislature "has rejected opportunities of clearing up a known difficulty or has legislated, while leaving the difficulty untouched"576; whether the change will have "enormous consequences" for important institutions like "insurance companies and the National Health Service"577; and whether argument in favour of the change has been cursory or not578. It is very hard to predict how these factors will operate in a given case. Different minds give them different weight. Thus in 1992 Lord Keith of Kinkel said579: "the rule that money paid under a mistake of law is not recoverable β¦ is β¦ too deeply embedded β¦ to be uprooted judicially." Yet six years later the House of Lords decided, by bare majority, to uproot it, because that majority took "a more robust view of judicial development" than Lord Keith580. Judicial power and statutes. The extent of judicial power to change the common law and equitable rules may be limited, and controversial at the margin, but it exists. In contrast, at common law judicial power to change the meaning of valid statutes does not exist. There is only power to ascertain that meaning by interpretation. That inevitably flows from the duty to resolve controversies about statutory meaning. But interpretation is distinct from amendment. "Amendment is a legislative act. It is an exercise which must be reserved to Parliament."581 It does not extend to the performance of a legislative function. The "rewriting of 573 Myers v Director of Public Prosecutions [1965] AC 1001 at 1021 per Lord Reid. 574 Gregg v Scott [2005] 2 AC 176 at 221 [172]. 575 C (A Minor) v Director of Public Prosecutions [1996] AC 1 at 24-26 and 40-41. 576 C (A Minor) v Director of Public Prosecutions [1996] AC 1 at 28 per Lord Lowry. 577 Gregg v Scott [2005] 2 AC 176 at 198 [90] per Lord Hoffmann. 578 Rees v Darlington Memorial Hospital NHS Trust [2004] 1 AC 309 at 327 [43]-[44] and 334 [74]. 579 Woolwich Equitable Building Society v Inland Revenue Commissioners [1993] AC 580 Kleinwort Benson Ltd v Lincoln City Council [1999] 2 AC 349 at 375 per Lord Goff of Chieveley. 581 R v Lambert [2002] 2 AC 545 at 586 [81] per Lord Hope of Craighead. β¦ statute[s]" is "the function of the Parliament, not a Ch III court"582. A federal statute which purports to delegate a legislative function like rewriting statutes to a court is invalid583. These principles have important consequences. One example relates to s 12 of the Native Title Act 1993 (Cth), which gave "the common law of Australia in respect of native title" the force of the law of the Commonwealth. Section 12 was held invalid584. The common law is the body of law which the courts create and define. Section 12 thus delegated to the judicial branch of government a legislative power to make law. Another example is s 15A of the Acts Interpretation Act 1901 (Cth), which is similar to s 6 of the Interpretation of Legislation Act 1984 (Vic), and which provides: "Every Act shall be read and construed subject to the Constitution, and so as not to exceed the legislative power of the Commonwealth, to the intent that where any enactment thereof would, but for this section, have been construed as being in excess of that power, it shall nevertheless be a valid enactment to the extent to which it is not in excess of that power." Section 15A cannot give power to a court to hold valid the provisions of an enactment from which void provisions have been severed, unless the enactment "itself indicates a standard or test which may be applied for the purpose of limiting, and thereby preserving the validity of, the law"585 and "the operation of the law upon the subjects within power is not changed by placing a limited construction upon the law"586. This is because, as Rich and Williams JJ 582 Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476 at 513 [102] per Gaudron, McHugh, Gummow, Kirby and Hayne JJ. 583 Victorian Stevedoring and General Contracting Co Pty Ltd and Meakes v Dignan (1931) 46 CLR 73 at 93; [1931] HCA 34; The Commonwealth v Grunseit (1943) 67 CLR 58 at 66; [1943] HCA 47; Re Dingjan; Ex parte Wagner (1995) 183 CLR 323 at 349; [1995] HCA 16. 584 Western Australia v The Commonwealth (Native Title Act Case) (1995) 183 CLR 373; [1995] HCA 47. 585 Pidoto v Victoria (1943) 68 CLR 87 at 109 per Latham CJ; [1943] HCA 37. See also Re Nolan; Ex parte Young (1991) 172 CLR 460 at 485; [1991] HCA 29; Re Dingjan; Ex parte Wagner (1995) 183 CLR 323 at 339, 349, 355 and 372. 586 Re Dingjan; Ex parte Wagner (1995) 183 CLR 323 at 339, applying Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468 at 493; [1971] HCA 40. See also Re Nolan; Ex parte Young (1991) 172 CLR 460 at 486; Victoria v The Commonwealth (Industrial Relations Act Case) (1996) 187 CLR 416 at 501-503; [1996] HCA 56. said587: "the Court is not a legislative but a judicial body. It cannot legislate; that is the function of Parliament." In Latham CJ's words588: "The Court cannot re- write a statute and so assume the functions of the legislature." And, said Dixon J, federal legislation cannot "attempt an inadmissible delegation to the Court of the legislative task of making a new law from the constitutionally unobjectionable parts of the old."589 Hence if jurisdiction is conferred on a court, it must be governed by "legal standards or criteria": it is insufficient if there is "an attempt to delegate to the β¦ courts the essentially legislative task of determining 'the content of a law as a rule of conduct or a declaration as to power, right or duty'."590 The definition of "judicial power". In R v Kirby; Ex parte Boilermakers' Society of Australia591 this Court held that it was not possible for the legislature either to confer the judicial power of the Commonwealth on a non-judicial body or to add "to the judicial powers of a court set up as part of the national judicature some non-judicial powers that are not ancillary but are directed to a non-judicial purpose."592 A celebrated example of legislation conferring non-judicial powers of that type arose in R v Spicer; Ex parte Australian Builders' Labourers' Federation593. Dixon CJ, McTiernan, Kitto and Taylor JJ (Williams and Webb JJ dissenting) held that the power conferred by s 140 of the Conciliation and Arbitration Act 587 Bank of New South Wales v The Commonwealth (1948) 76 CLR 1 at 252; [1948] HCA 7. 588 Bank of New South Wales v The Commonwealth (1948) 76 CLR 1 at 164. 589 Bank of New South Wales v The Commonwealth (1948) 76 CLR 1 at 372. 590 Thomas v Mowbray (2007) 233 CLR 307 at 344-345 [71] per Gummow and Crennan JJ; [2007] HCA 33, quoting The Commonwealth v Grunseit (1943) 67 CLR 58 at 82. See also Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 591 (1956) 94 CLR 254; [1956] HCA 10. 592 (1956) 94 CLR 254 at 271 per Dixon CJ, McTiernan, Fullagar and Kitto JJ; see also at 289. 593 (1957) 100 CLR 277; [1957] HCA 81. Other examples include Queen Victoria Memorial Hospital v Thornton (1953) 87 CLR 144; [1953] HCA 11; R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361; [1970] HCA 8. 1904 (Cth) was not part of the judicial power of the Commonwealth, and was invalid because it was conferred on a federal court. Section 140(1) provided that the Commonwealth Industrial Court might disallow any rule of an organisation which in the opinion of the Court: is contrary to law, or to an order or award; is tyrannical or oppressive; prevents or hinders members of the organization from observing the law or the provisions of an order or award; or imposes unreasonable conditions upon the membership of any member or upon any applicant for membership". Kitto J said that one indicium of non-judicial power arose where it was to be exercised "upon considerations of general policy and expediency alien to the judicial method."594 He went on to set out subtle reasoning. Its subtlety ought not to be damaged by summary or undue truncation595: "Section 140 seems to me an example of a provision which, though it empowers a court to do an act β the disallowing of a rule β which is not insusceptible of a judicial performance, nevertheless is found to mean, on a clear preponderance of considerations, that the function for which it provides is to be performed as an administrative function, with a more elastic technique, and more of an eye to consequences and industrial policy generally, than could properly be expected of a court. β¦ The kinds of rules which may be disallowed are described as possessing any of several qualities which are indicated in terms so broad as to be more appropriate for conveying general conceptions to a person engaged administratively in performing a function conceived of as part of a system of industrial regulation than for stating, to a body acting judicially, grounds of jurisdiction which it is to interpret and apply with precision. β¦ Moreover β and this is the most important consideration of all β s 140 belongs to a group of provisions, comprising all those which deal with the registration and regulation of industrial organisations, which as a group are characterised by the purpose of facilitating the prevention and settlement of inter-State industrial disputes by conciliation and arbitration under the Act. It is difficult to think that s 140 intends a consideration of an organisation's rules to be undertaken otherwise than with a view to the improvement of the organisation as an instrument for the representation of 594 (1957) 100 CLR 277 at 305. 595 (1957) 100 CLR 277 at 305-306. employees in everything connected with the maintenance and restoration of industrial harmony. To read the section as creating a jurisdiction to apply fixed standards to particular situations, and to make decrees with a judicial disregard of consequences, would be plainly incongruous with the scheme of the Act and the terms of the section. In particular, it seems to me to be required, as a matter of practical good sense, that in forming an opinion as to whether a rule of an organisation is 'tyrannical' or 'oppressive', or imposes 'unreasonable' conditions upon the membership of a member or upon an applicant for membership, the repository of the power should look to the effect which the existence or non-existence of the rule will be likely to have upon the working of the machinery of conciliation and arbitration under the Act; and this points unmistakably to an intention that the performance of the function provided for by the section is to be approached in a manner incompatible with the restraints peculiar to judicial power." In the same case Dixon CJ said596: "the criteria set by pars (b), (c) and (d) are vague and general and give much more the impression of an attempt to afford some guidance in the exercise of what one may call an industrial discretion than to provide a legal standard governing a judicial decision. Parenthetically, it may be remarked that the meaning is by no means self-evident of the expression 'impose unreasonable conditions upon the membership of any member'." In Attorney-General (Cth) v Alinta Ltd Gleeson CJ said597: "[T]here are features of the judicial process, fundamental to its nature, that make it ill-suited to the application of certain kinds of policy and the exercise of certain kinds of power. Judges are appointed on the basis of their legal knowledge and experience. Individual judges may have other talents or interests, but what these might be is usually unknown, and is not the subject of any process of assessment, formal or informal. The material on which they base their decisions is provided, and tested, in accordance with rules of procedure and evidence. The decisions of the parties and their lawyers, made in an adversarial setting, impose limitations upon the information according to which a court legitimately may proceed. The parties to litigation, acting within the limits set by the law, define the issues to be resolved and the courses open to be followed by way of judicial order. These constraints, although not absolute or inflexible, influence the nature of the judicial process, and affect the suitability of 596 (1957) 100 CLR 277 at 290. 597 (2008) 233 CLR 542 at 551 [5]; [2008] HCA 2. that process for the exercise of certain forms of governmental power. It is to be expected that the Parliament, in deciding whether a certain kind of authority should be exercised judicially, or otherwise, would take account of the characteristics, and of the strengths, and the limitations, of the judicial method." In contrast to R v Spicer, in R v Commonwealth Industrial Court; Ex parte The Amalgamated Engineering Union, Australian Section598 a prohibition of "oppressive, unreasonable or unjust" rules was upheld. These authorities reveal that the courts have difficult judgments to make in assessing whether they have been given tasks outside judicial power. Key provisions of the Charter. Section 32(1) of the Charter provides: "So far as it is possible to do so consistently with their purpose, all statutory provisions must be interpreted in a way that is compatible with human rights." Section 32(2) provides: law and "International judgments of domestic, foreign and international courts and tribunals relevant to a human right may be considered in interpreting a statutory provision." the The expression "human rights" is defined in s 3(1) as meaning "the civil and political rights set out in Part 2". The first provision in Pt 2 is s 7. It provides: "(1) This Part sets out the human rights that Parliament specifically seeks to protect and promote. "(2) A human right may be subject under law only to such reasonable limits as can be demonstrably justified in a free and democratic society based on human dignity, equality and freedom, and taking into account all relevant factors including β the nature of the right; and 598 (1960) 103 CLR 368; [1960] HCA 46. For examples of other holdings that judicial power existed, see Peacock v Newtown Marrickville and General Co-operative Building Society No 4 Ltd (1943) 67 CLR 25; [1943] HCA 13; R v Joske; Ex parte Australian Building Construction Employees and Builders' Labourers' Federation (1974) 130 CLR 87; [1974] HCA 8; R v Joske; Ex parte Shop Distributive and Allied Employees' Association (1976) 135 CLR 194; [1976] HCA 48. the importance of the purpose of the limitation; and the nature and extent of the limitation; and the relationship between the limitation and its purpose; and any less restrictive means reasonably available to achieve the purpose that the limitation seeks to achieve. (3) Nothing in this Charter gives a person, entity or public authority a right to limit (to a greater extent than is provided for in this Charter) or destroy the human rights of any person." Section 5 provides: the Constitution of "A right or freedom not included in this Charter that arises or is recognised under any other law (including international law, the common the law, Commonwealth) must not be taken to be abrogated or limited only because the right or freedom is not included in this Charter or is only partly included." the Commonwealth and a law of It is also relevant to set out some provisions in Pt 3 of the Charter. Section 28(1) provides: "A member of Parliament who proposes to introduce a Bill into a House of Parliament must cause a statement of compatibility to be prepared in respect of that Bill." Section 28(2) provides for the "statement of compatibility" to be laid before the House before the Second Reading Speech. Section 28(3) deals with the contents of the statement of compatibility. It requires a statement whether, in the member's opinion, the Bill is "compatible with human rights" and, if so, how it is compatible. It also requires the statement to state, if, in the member's opinion, any part of the Bill is "incompatible with human rights, the nature and extent of the incompatibility." Section 38(1) provides: "Subject to this section, it is unlawful for a public authority to act in a way that is incompatible with a human right or, in making a decision, to fail to give proper consideration to a relevant human right." Section 38(2) provides: "Subsection (1) does not apply if, as a result of a statutory provision or a provision made by or under an Act of the Commonwealth or otherwise under law, the public authority could not reasonably have acted differently or made a different decision." Outline of conclusion on validity of s 7(2). Section 7(2) is invalid. It is convenient at this point to outline why. In carrying out the task imposed by s 32(1) of considering whether a statutory provision is compatible with human rights, a court must ask what, relevantly, a human right is, and how far it can be subject to limits. Section 7(1) provides that Pt 2 sets out the human rights that Parliament specifically seeks to protect and promote. Sections 8-27 contain a long list of rights in very general form, in contrast with their detailed statement in common law and statutory rules. Further, individual rights β both the rights appearing in ss 8-27 and other rights referred to in s 5 β tend to collide with each other when stated in the abstract. The need for rights to be reconciled and collisions to be avoided is recognised in the third point in the Preamble599, in s 5, and in s 7(3). And behind s 7(2) there is an assumption that just as human rights may be recognised and vindicated by common law and statutory rules, so they may be limited by them β for various reasons, one of which is to avoid collisions between them. The rights which the Charter describes in ss 8-27 and refers to in s 5 are rights subject under law to the limits described in s 7(2). In assessing under s 32(1) whether a particular interpretation of a statutory provision is compatible with a human right, it is necessary to decide what a reasonable limit to that right is according to s 7(2) criteria. The criteria by which the limit is to be decided are so vague that s 7(2) is an impermissible delegation to the judiciary of power to make legislation. Before developing that reasoning, it is desirable to state the submissions in this Court. Submissions on the relevance of s 7(2) to s 32(1). The appellant submitted that the Court of Appeal erred in holding, first, that s 7(2) is "not to be taken into account in the interpretive exercise required by s 32(1) of the Charter" and, secondly, that "under s 32, when determining what is 'possible' consistently with the purpose of the provision in question, the court is constrained by the ordinary principles of statutory construction." The appellant criticised the Court of Appeal for adopting an unduly restricted interpretation of s 32(1) as merely codifying the common law principle of legality. This was a correct submission, but also a dangerous one: for if s 32(1) only does that, it would probably not be invalid, but the more it does, the greater the risk to its validity. The appellant submitted that s 7(2) was relevant to the s 32(1) process in requiring the following steps. The first step was to ascertain the meaning of the statute in accordance with ordinary principles of statutory interpretation: she called that "the ordinary meaning". The second step was to ascertain whether the ordinary meaning was apparently incompatible with a relevant right or freedom. If so, the 599 Set out at [388] above. third step was to ascertain whether that incompatibility was nevertheless a justified limit on the right in the light of s 7(2). If the apparent incompatibility was a justified limit, then the legislation was not incompatible with human rights and the ordinary meaning, ascertained in the first step, would prevail. The fourth step must be taken if the ordinary meaning involves an unjustified limit on the right. In that event the court, pursuant to s 32(1), must strive to interpret the legislation in a way that is compatible, or less incompatible, with the right in question if it is reasonably possible, consistently with the purpose of the legislation, to do so. The fifth step arises if it is not reasonably possible to find a compatible (or less incompatible) meaning: in that event the ordinary meaning must be adopted and the Supreme Court may make a declaration of inconsistent operation under s 36. Subject to differences which it is not necessary to resolve, the appellant's submission that s 7(2) forms part of the "interpretive exercise" under s 32(1) was supported by the Attorney-General for the State of Victoria, the Victorian Equal Opportunity and Human Rights Commission, and the Australian Capital Territory Attorney-General. On that submission, the command in s 32(1) to interpret statutory provisions in a way compatible with human rights refers to human rights, not in the absolute senses described in ss 8-27, but within reasonable limits after s 7(2) scrutiny. The Centre, on the other hand, submitted to the Court of Appeal that s 7(2) plays no role in the process of statutory interpretation required by s 32(1). The Court of Appeal agreed600. The Centre repeated the submissions in this Court601. The submissions considered. The appellant's submission is supported by the following considerations. The first consideration springs from the Centre's argument that s 32(1) required statutory provisions to be interpreted in a way that is "compatible with human rights", not "compatible with human rights as reasonably limited in accordance with s 7(2)". What is a "human right"? The expression is defined in s 3(1) as meaning not merely something listed in ss 8-27, but the civil and political rights set out in Pt 2, namely ss 7-27, including s 7(2). That is, in assessing what human rights exist before the s 32(1) process of interpretation is completed, it is necessary to apply s 7(2) to ss 8-27. Where a statutory provision 600 R v Momcilovic (2010) 25 VR 436 at 446 [35] (2) and 465-467 [105]-[110]. The difficulties of interpreting s 7 in relation to s 32 are discussed by Allan, "The Victorian Charter of Human Rights and Responsibilities: Exegesis and Criticism", (2006) 30 Melbourne University Law Review 906 at 917-920. 601 See below at [415]-[426]. imposes limits on human rights, those limits are scrutinised under s 7(2). The relevant rights are not those which correspond to the full statements in ss 8-27, but those which have limits justified in the light of s 7(2). The next consideration is that ss 28(1), 32(1) and 38(1) are fundamental operative provisions. They reflect the "main purposes" expressly enacted in, respectively, ss 1(2)(d), 1(2)(b) and 1(2)(c). They reveal "compatibility" as a central conception of the Charter. The function of s 28(1) is to ensure that all provisions proposed for enactment are compatible with human rights; the function of s 32(1) is to ensure that all statutory provisions are interpreted in a way that is compatible with human rights; and the function of s 38(1) is to ensure that public authorities act compatibly with human rights. The concept of "compatibility" is also referred to in ss 28(3), 30 and 31(1). As the Victorian Equal Opportunity and Human Rights Commission submitted, the close association of "compatibility" with s 7(2) analysis is supported by ss 28 and 38. The "statement of compatibility" required by s 28(1) must, by reason of s 28(3)(a), state whether the Bill is "compatible with human rights". That must refer to human rights as reasonably limited by s 7(2). Otherwise a member of Parliament who introduced a Bill limiting human rights, but only in a way that was demonstrably justified in the light of s 7(2), would be required by s 28(3)(b) to state that the Bill was "incompatible with human rights". That would be an untruthful statement, since the Bill actually was compatible with them. It is absurd to interpret the Charter as compelling untruthful statements by members of the legislature to one of its houses. And if in s 38(1) "incompatible with a human right" meant "incompatible with a human right in its absolute form, even if reasonable limits were imposed on it pursuant to s 7(2)", then a public authority would act unlawfully if it acted incompatibly with the absolute human right notwithstanding that it acted compatibly with the right limited in the light of s 7(2). This would be a harsh result. It would be particularly harsh because many "public authorities" falling within the definition in s 4(1) will be quite junior officials like police officers who have to act on short notice without legal guidance by reference to the apparent meaning of legislation, not a different s 32(1) meaning. The Centre answered by pointing to s 38(2). But that only applies where the public authority could not reasonably have acted differently or made a different decision. It does not apply where the public authority has choices. Hence if the appellant's submission were not sound, s 7(2) would have no application to the principal operative provisions of the Charter. That would be a peculiar result in the light of its location in the Act in Pt 2, the first Part of the Charter containing substantive provisions, and in the first substantive provision, just before the list in ss 8-27 of what s 7(1) describes as "the human rights that Parliament specifically seeks to protect and promote." The appellant's submission is supported by the Explanatory Memorandum. Not surprisingly, it described s 7(2) as one of the "key provisions" that "recognises that no right is absolute and that there may be various limitations imposed on any right."602 The Explanatory Memorandum also said that s 7(2)603: "reflects Parliament's intention that human rights are, in general, not absolute rights, but must be balanced against each other and against other competing public interests. The operation of this clause envisages a balancing exercise between Parliament's desire to protect and promote human rights and the need to limit human rights in some circumstances." And the Explanatory Memorandum additionally said that s 32(2) will operate as a guide to the nature and meaning of the human rights listed in Pt 2604. Section 32(2) appears immediately after the command in s 32(1) that all statutory provisions be interpreted in a way compatible with human rights. The Explanatory Memorandum thus contemplates a linkage between s 32 and s 7(2). The appellant's submission is also supported by the Second Reading Speech delivered by the Attorney-General605: "Part 2 reflects that rights should not generally be seen as absolute but must be balanced against each other and against other competing public interests. Clause 7 is a general limitations clause that lists the factors that need to be taken into account in the balancing process. It will assist courts and government in deciding when a limitation arising under the law is reasonable and demonstrably justified in a free and democratic society. Where a right is so limited, then action taken in accordance with that limitation will not be prohibited under the charter, and is not incompatible with the right." The tendency of rights to collide, their need to be "balanced" against each other and the importance of their co-existence with each other are also recognised in s 7(3), s 5 and the third point of the Preamble. The Attorney-General's speech perceives the human right against which something else is being tested β a clause in a Bill pursuant to s 28(1), a statutory provision pursuant to s 32(1) or an action 602 Victoria, Legislative Assembly, Charter of Human Rights and Responsibilities Bill 2006, Explanatory Memorandum at 7. 603 Victoria, Legislative Assembly, Charter of Human Rights and Responsibilities Bill 2006, Explanatory Memorandum at 9. 604 Victoria, Legislative Assembly, Charter of Human Rights and Responsibilities Bill 2006, Explanatory Memorandum at 8. 605 Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 4 May 2006 at taken pursuant to s 38(1) β as a right considered in the light of s 7(2), not independently of it. The same perception appears in the report which led to the legislation606. The Court of Appeal said that if s 7(2) were employed in interpreting legislation, "[j]udges and tribunal members, as well as public officials, would have to determine whether the relevant provision imposed a justifiable limit before determining finally how the provision was to be interpreted." This, it was said, "would inevitably [result in] inconsistencies in [the] application [of s 7(2)] and uncertainties in interpretation."607 The force of this point is diminished by the fact that whatever approach is taken to s 32(1) and s 7(2), the difficulties in the field with which the Charter is dealing will mean that the Charter, perhaps inevitably, will lead to inconsistencies in application and uncertainties in interpretation. The Court of Appeal considered that the approach it was rejecting would lead to a particular statutory provision having a different meaning depending on the offence charged. That is not so. Avoidance of that outcome would be a matter to be taken into account under both s 7(2) and s 32(1). The Court of Appeal saw it as "fundamental" that s 32(1) was promoting and protecting the human rights enacted in the Charter. Their Honours said it was not the case "that s 32(1) was only to operate where necessary to avoid what would otherwise be an unjustified infringement of a right."608 This assumes the answer to the question raised. It also gives no significance to s 1(2)(b), which provides: "The main purpose of this Charter is to protect and promote human rights ensuring that all statutory provisions, whenever enacted, are interpreted so far as is possible in a way that is compatible with human rights". That refers to what is "compatible with human rights", not one particular human right considered absolutely and in isolation. 606 Human Rights Consultation Committee, Rights, Responsibilities and Respect: The Report of the Human Rights Consultation Committee (2005) at 118. 607 R v Momcilovic (2010) 25 VR 436 at 467 [110]. 608 R v Momcilovic (2010) 25 VR 436 at 466 [107]. The approach of the Centre would lead to the courts finding more legislation to be incompatible with human rights, or to be something which "breaches"609 human rights, even though the incompatibility was minor and even though its existence flowed only from the need to establish a reasonable and justified limit β thereby, for example, operating to protect some other right. The Centre said its approach protected human rights better because it protected an absolute form of them. If the Centre's approach were correct, what is the significance of s 7(2)? "[I]t being improbable that the framers of legislation could have intended to insert a provision which has virtually no practical effect, one should look to see whether any other meaning produces a more reasonable result."610 The Centre recognised and endeavoured to meet the difficulty. It submitted that while s 7(2) had nothing to do with s 32(1), it had three possible fields of work. One related to judicial review of a provision. The flaw in this submission is that the Charter does not provide for judicial review: ss 32(3) and 36(5). The Court of Appeal quoted from Elias CJ's dissenting judgment in R v Hansen611, which referred to "a soft form of judicial review". But Elias CJ said that that was inconsistent with the New Zealand Bill of Rights Act 1990 (NZ), s 4, which does not provide for judicial review either. The second possible field of work for s 7(2) was said to be its relevance when the Supreme Court was deciding whether to exercise its discretion to make a declaration of inconsistent interpretation under s 36(2) that the Court was of the opinion that a statutory provision cannot be interpreted consistently with a human right (ie compatibly pursuant to s 32(1)). There is no indication in s 36 that s 7(2) is relevant in this way. On the Centre's approach s 7(2) is not material in relation to the s 32(1) conclusion that there was incompatibility with a human right, and, if that is so, it is difficult to see why it would be material at the s 36 discretion stage. The third possible field of work was to operate as a reminder "to those making or advising on legislative measures potentially limiting of human rights." That renders s 7(2) only a precatory provision with no practical effect. Section 7(2) would appear to have a much greater significance than that. 609 R v Momcilovic (2010) 25 VR 436 at 446 [35] (2). 610 Minister of State for Resources v Dover Fisheries Pty Ltd (1993) 43 FCR 565 at 574 per Gummow J, a passage which paraphrased what Lord Reid said in AMP Inc v Utilux Pty Ltd [1972] RPC 103 at 109, and which was approved in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 382 [70]; [1998] HCA 28. See also The Commonwealth v Baume (1905) 2 CLR 405 at 414 and 419; [1905] HCA 11. 611 [2007] 3 NZLR 1 at 9 [6]. The Centre submitted that the origins of s 7(2) lay in s 1 of the Canadian Charter of Rights and Freedoms (which is part of the Constitution Act 1982 (Can)), s 36 of the Constitution of the Republic of South Africa, and s 5 of the New Zealand Bill of Rights Act. The Centre submitted that this "provenance" supported the Court of Appeal's approach. That cannot be so: for in Canada and South Africa there is judicial review of legislative validity, but not in Victoria or New Zealand. The Centre advanced the proposition that a limitation on a human right could not be "demonstrably justifiable" under s 7(2) without evidence. If that proposition is correct, it contradicts the limited role which other submissions of the Centre give to s 7(2). For example, how would the deliberations of legislators and those advising them tie in with the reception of evidence and other material on the topics identified in s 7(2) with a view to demonstrating justification? If the Centre's proposition is correct, it is certainly true, as the Centre said, that it is difficult to reconcile the appellant's approach with the view that a court's role under s 32(1) is only its traditional role of interpreting legislation. But that is not the only reason for doubting that view612. The Centre contended that its opponents had not explained how s 7(2) could be applied as part of the interpretative process. In assessing whether "limits" on a human right imposed by a "law" are "reasonable", a court had to interpret the law. Hence, said the Centre, s 7(2) "cannot form part of the interpretive process because the proportionality assessment that it requires cannot be undertaken until a construction has been reached." One answer is that while the need for a particular type of s 7(2) analysis may be prompted by the particular field in which a statutory provision, whatever its precise meaning, is operating, it was not necessary for the s 7(2) analysis itself to be carried out with close reference to the terms of the statutory provision after arriving at a conclusion as to what they mean. Another answer to it lies in the appellant's contention that her five step process, or something functionally similar, must be employed. Hence the appellant was correct to submit that s 7(2) is central to the interpretation process to be carried out under s 32(1). That conclusion requires attention to be given to the detail of s 7(2). The language of s 7(2). In Precision Data Holdings Ltd v Wills Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ said613: 612 See below at [440]-[455]. 613 (1991) 173 CLR 167 at 189; [1991] HCA 58. "if the object of the adjudication is not to resolve a dispute about the existing rights and obligations of the parties by determining what those rights and obligations are but to determine what legal rights and obligations should be created, then the function stands outside the realm of judicial power." Section 7(2) gives a court power to "determine what legal rights and obligations should be created" by giving it the power to decide the legal extent of the limit to a human right. The limit is then the criterion against which a particular statutory provision is measured under s 32(1) to determine whether it can be interpreted "in a way that is compatible with human rights." The limit to a human right must be "reasonable". What is the relevant criterion of reason? What can be "justified" β and not only justified, but "demonstrably" justified. What is the difference between that which is "justified" and that which is "demonstrably justified"? The shrill, intensifying adverb merely highlights the vacuity of the verb. The next question asks what can be demonstrably justified in a "free and democratic society" β and not just any free and democratic society, but one "based on human dignity, equality and freedom". Section 7(2) then calls for the "taking into account [of] all relevant factors". The criteria for identifying the relevance of a particular factor are not defined. But a non-exhaustive list of five relevant factors then appears. The first (s 7(2)(a)) is the "nature of the right" (but not its "purpose" (cf s 7(2)(b)) or its "extent" (cf s 7(2)(c)). The second (s 7(2)(b)) is the importance "of the purpose of the limitation" β not the importance of the limitation itself. The third (s 7(2)(c)) is the "nature and extent of the limitation". The fourth (s 7(2)(d)) is the "relationship between the limitation and its purpose". The fifth (s 7(2)(e)) is "any less restrictive means reasonably available to achieve the purpose that the limitation seeks to achieve." The origins of s 7(2) may be illustrious. But its language is highly general, indeterminate, lofty, aspirational and abstract. It is nebulous, turbid and cloudy. In R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd614 Windeyer J discussed the phrase "contrary to the public interest" as follows: "The public interest is a concept which attracts indefinite considerations of policy that are more appropriate to law-making than to adjudication according to existing law. The Act directs the Tribunal as to matters it is to 'take into account' in considering what the public interest requires. The their providing objectively generality of determinable criteria. In the result the jurisdiction of the Tribunal to make determinations and orders depending upon its view of where the public interest lies and what the public interest requires seems to be an exercise these matters prevents 614 (1970) 123 CLR 361 at 399-400. of a legislative or administrative function of government rather than of the judicial power." And in the same case Kitto J said "contrary to the public interest" was not "an ascertained standard" but "a description the content of which has no fixity [and] which refers the Tribunal ultimately to its own idiosyncratic conceptions and modes of thought."615 So here, the generality of the words "all relevant factors including" the factors listed in s 7(2)(a)-(e) prevents them providing "objectively determinable criteria" and leaves the courts to their own "idiosyncratic conceptions and modes of thought." The opening words of s 7(2) have those characteristics even more markedly. Section 7(2) depends in a number of respects on analysis by reference to "purpose" (s 7(2)(b), (d) and (e)). Does "purpose" refer only to the purpose revealed in the language, or something wider616? Section 7(2) depends in two respects on an appeal to reasonableness (the opening words of s 7(2) and s 7(2)(e)). Although s 7(2) does not talk of "balancing", as the Explanatory Memorandum and the Second Reading Speech did617, that is the process it involves. But the things to be balanced or weighed are not readily comparable β the nature of a right and various aspects of a limitation on it, the nature of a right and other rights, the nature of a right and "all relevant factors", which could include many matters of practical expediency of which courts know nothing, social interests about which it is dangerous for courts to speculate and considerations of morality on which the opinions of the governed may sharply differ from those of the courts. It is for legislatures to decide what is expedient in practice, what social claims must be accepted, and what moral outcomes are to be favoured β not courts. The characteristically penetrating and valuable submissions of the Solicitor-General of the Commonwealth included an argument that the "actual criteria set out in s 7(2) are readily capable of judicial evaluation." In some contexts that may be so, but not in the context of the Charter. He gave examples of loose criteria having been accepted as within judicial power in the past618, but s 7(2) goes well beyond those instances. 615 (1970) 123 CLR 361 at 376. 616 See below at [441]-[444] and [446]-[454]. 617 Quoted above at [418]-[419]. 618 Baker v The Queen (2004) 223 CLR 513 at 532 [42]; [2004] HCA 45; Thomas v Mowbray (2007) 233 CLR 307 at 331-334 [20]-[28], 344-348 [71]-[82], 350-351 [88]-[92] and 507-508 [596]; Attorney-General (Cth) v Alinta Ltd (2008) 233 CLR 542 at 553-554 [14] and 597 [168]-[169]. The submissions then invited a contrast with Fardon v Attorney-General (Q) (2004) 223 CLR 575 at 592-593 [21]; [2004] HCA 46. Thus s 7(2) creates difficult tasks. It imposes them on judges. But they are not tasks for judges. They are tasks for a legislature. Section 7(2) reveals that the Victorian legislature has failed to carry out for itself the tasks it describes. Instead of doing that, it has delegated them to the judiciary. Because the delegation is in language so vague that it is essentially untrammelled, it is invalid. It contemplates the making of laws by the judiciary, not the legislature. It will lead to debates in which many different positions could be taken up. They may be debates on points about which reasonable minds may differ. They may be debates in which very unreasonable minds may agree. They are debates that call for resolution by legislative decision. An example is the debate which took place before the Court of Appeal in this case about whether the infringement of the presumption of innocence by s 5 of the Act was justifiable. The Court of Appeal said it was not justifiable. Many would agree. Those who move in prosecuting circles might take a different view. Many others would agree with them. But fundamental disputes of this kind β turning on questions of expediency, social policy and morality β call for legislative resolution, not judicial. The Court of Appeal called for evidence β that is, evidence or material of a "legislative fact" kind. But s 7(2) contemplates evidence or material of a kind going far beyond the evidence or material ordinarily considered by courts as going to "legislative facts". Is this evidence or material to be tendered or offered to trial judges so that they will arrive at the correct interpretation of the relevant statutory provision before directing the jury, or, if they are sitting without a jury, deciding the case? If so, how is this tender or offer to be accommodated with the need for trials, especially jury trials, to be conducted expeditiously and smoothly? Section 7(2) creates a kind of "proportionality" regime without comprehensible criteria. The regime operates as a method of determining what the formulation of the law is to be β ie the precise form a legislatively recognised human right is to take, which in turn is used as a factor relevant to determining the interpretation of other statutes. But it creates a type of proportionality which "is plastic and can in principle be applied almost infinitely forcefully or infinitely cautiously, producing an area of discretionary judgement that can be massively broad or incredibly narrow β and anything else between."619 In particular, at least in the non-constitutional context of s 7 and s 32(1), a consideration pursuant to s 7(2)(e) of whether there are less restrictive legislative means available to achieve a statutory purpose is a matter for a legislature, not a court. Courts decide what the language chosen by the legislature means. They do not decide on the meaning, operation and utility of language which the 619 Poole, "The Reformation of English Administrative Law", (2009) 68 Cambridge Law Journal 142 at 146. legislature might have chosen. The Attorney-General for the State of Victoria pointed to various supposed constitutional doctrines of proportionality. Constitutional doctrines are different from doctrines applicable to statutory interpretation. The insertion of a bill of rights into the Commonwealth Constitution by an amendment supported by the necessary popular majorities under s 128 could give the courts a role in interpreting statutes which departed from the separation of powers. But as the Constitution stands that is impermissible. It does not follow from the employment of "proportionality" techniques in applying the Constitution that they can be conferred by statute in relation to statutory interpretation. Assume that a statutory provision which limits a human right has two possible meanings, meaning A and meaning B. Assume each is consistent with the "purpose" of the statutory provision. Assume the court would, but for s 32(1), favour meaning A. It is necessary to see whether meaning A is compatible with human rights. Assume that the relevant human right is absolute β ie falls within ss 8-27 without alteration pursuant to s 7(2) β and that meaning A would be found incompatible with the relevant human right. In that event meaning B would have to be adopted. But if the limit on the human right created by meaning A is found reasonable after applying s 7(2), then meaning A will be adopted. Section 7(2) requires the court to carry out the function which the legislature failed to carry out β refashioning the ss 8-27 human rights by working out what reasonable limits exist. The court is thus legislating through s 7(2) by giving a meaning to a particular "human right" which Parliament did not give. The legislature, instead of deciding for itself which rights are limited and in which circumstances, has delegated those tasks to the courts. As Griffith said of a similar, though more precise, provision, namely Art 10 par 2 of the European Convention on Human Rights, Pt 2 of the Charter is "the statement of a political conflict pretending to be a resolution of it."620 The Attorney-General in his Second Reading Speech described s 7 as "a general limitations clause"621. It has been said that provisions similar to s 7(2) in other bills of rights have operated "to signal, explicitly, that the relationship between the bill of rights and contested claims of rights remained unresolved in law. They did so primarily by way of (one or more) limitation clauses."622 So does s 7(2). It is a statement623: 620 Griffith, "The Political Constitution", (1979) 42 Modern Law Review 1 at 14. 621 See above at [419]. 622 Webber, "Legal Reasoning and Bills of Rights" in Ekins (ed), Modern Challenges to the Rule of Law, (2011) 143 at 149. 623 Webber, "Legal Reasoning and Bills of Rights" in Ekins (ed), Modern Challenges to the Rule of Law, (2011) 143 at 149. "that the law-makers of the bill of rights have delegated to others the resolution of political conflict surrounding which among the possible moral and legal meanings of 'P has the right to x' will be favoured in law. In this way, the lawmakers responsible for the bill of rights signal that this difficult work remains to be completed by subsequent lawmakers." In relation to the Charter, those "subsequent lawmakers" are judges. The handing over of this type of work may be possible under some constitutions. It is not possible under the Australian Constitution. The following warning of Brennan J is relevant to s 7(2)624: "[W]hen one comes to a court of law it is necessary always to ensure that lofty aspirations are not mistaken for the rules of law which courts are capable [of enforcing] and fitted to enforce. β¦ [C]ourts perform one function and the political branches of government perform another. β¦ Unless one observes the separation of powers and unless the courts are restricted to the application of the domestic law of this country, there would be a state of confusion and chaos which would be antipathetic β¦ to the aspirations of the enforcement of any human rights." For those reasons s 7(2) confers functions on the Victorian courts which could not be conferred on a court. As the Solicitor-General of the Commonwealth submitted, a legislative function conferred on a State court would, leaving aside legislative activity when the court is not carrying out a judicial role, like making rules of court625, be so intertwined with the judicial functions of the court as to alter the nature of those judicial functions and the character of the court as an institution. In Kable v Director of Public Prosecutions (NSW)626 Gaudron J said that it followed from Ch III of the Constitution: "that, although it is for the States to determine the organisation and structure of their court systems, they must each maintain courts, or, at least, a court for the exercise of the judicial power of the Commonwealth. Were they free to abolish their courts, the autochthonous expedient, more precisely, the provisions of Ch III which postulate an integrated judicial system would be frustrated in their entirety. β¦ 624 Re Limbo (1989) 64 ALJR 241 at 242; 92 ALR 81 at 82-83. 625 R v Davison (1954) 90 CLR 353 at 369; [1954] HCA 46. 626 (1996) 189 CLR 51 at 103; [1996] HCA 24. [T]he consideration that State courts have a role and existence transcending their status as State courts directs the conclusion that Ch III requires that the Parliaments of the States not legislate to confer powers on State courts which are repugnant to or incompatible with their exercise of the judicial power of the Commonwealth." The conferral on the Supreme Court of Victoria, for example, of legislative power means that it is not a "Supreme Court" or a "court of [a] State" within the meaning of s 73 of the Constitution. In 1900 the expression "court" meant a body which exercised judicial power, and the expression excluded bodies having "some non-judicial powers that are not ancillary but are directed to a non-judicial purpose."627 The expression still has that meaning. In Kirk v Industrial Court (NSW)628 this Court held that the legislation of a State which removed from its Supreme Court power to grant relief for jurisdictional error was beyond power. A fortiori, legislation of a State conferring legislative power on its Supreme Court is beyond power. Section 7(2) is thus invalid. Since s 7(2) is part of the process contemplated by s 32(1), so is s 32(1). That renders the whole Charter invalid, for the main operative provisions are connected with both ss 7(2) and 32(1). It is not possible to apply s 6(1) of the Interpretation of Legislation Act 1984 (Vic) to save the balance of the Charter, for its operation without s 7(2) would be relevantly different629. The validity of s 32(1). Even if s 7(2) were valid, is s 32(1) valid? Pursuant to the principle of legality, the common law of statutory interpretation requires a court to bear in mind an assumption about the need for clarity if certain results are to be achieved630, and then to search, not for the intention of the legislature, but for the meaning of the language it used631, 627 R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254 at 271 per Dixon CJ, McTiernan, Fullagar and Kitto JJ. 628 (2010) 239 CLR 531 at 581 [100] and 585 [113]; [2010] HCA 1. 629 See above at [399]-[400]. 630 See below at [444]. 631 Black-Clawson International Ltd v Papierwerke Waldhof-Aschaffenburg AG [1975] AC 591 at 613. See also Wik Peoples v Queensland (1996) 187 CLR 1 at 168-169; [1996] HCA 40; R v Secretary of State for the Environment, Transport and the Regions; Ex parte Spath Holme Ltd [2001] 2 AC 349 at 396-397; Byrnes v Kendle (2011) 85 ALJR 798 at 819 [97]; 279 ALR 212 at 236; [2011] HCA 26. (Footnote continues on next page) interpreted in the context of that language. The context lies partly in the rest of the statute (which calls for interpretation of its language), partly in the pre-existing state of the law, partly in the mischief being dealt with and partly in the state of the surrounding law in which the statute is to operate. The search for "intention" is only a search for the intention revealed by the meaning of the language. It is not a search for something outside its meaning and anterior to it which may be used to control it. The same is true of another anthropomorphic reference to something which is also described as a mental state but in this field is not β "purpose". And it is also true of the search for "policy". Thus in Project Blue Sky Inc v Australian Broadcasting Authority McHugh, Gummow, Kirby and Hayne JJ said of the common law rules of statutory interpretation632: "The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined 'by reference to the language of the instrument viewed as a whole'. In Commissioner for Railways (NSW) v Agalianos633, Dixon CJ pointed out that 'the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed'. Thus, the process of construction must always begin by examining the context of the provision that is being construed." What their Honours meant by "purpose" is what Dixon CJ meant by "purpose". What he meant by "purpose" may be inferred from his earlier analysis of a statutory discretion634: "it is incumbent upon the public authority in whom the discretion is vested β¦ to decide β¦ bona fide and not with a view of achieving ends or objects outside the purpose for which the discretion is conferred. β¦ But courts of law have no source whence they may ascertain what is the purpose of The reasons why these principles exist are discussed in Radin, "Statutory Interpretation", (1930) 43 Harvard Law Review 863; Waldron, Law and Disagreement, (1999), Ch 6. 632 (1998) 194 CLR 355 at 381 [69] (three footnotes omitted). 633 (1955) 92 CLR 390 at 397; [1955] HCA 27. 634 Swan Hill Corporation v Bradbury (1937) 56 CLR 746 at 757-758; [1937] HCA 15 (emphasis added). the discretion except the terms and subject matter of the statutory instrument." The subject-matter of an enactment, and its scope635, like its purpose, can only be gauged from its language. And light is cast on what "policy" means by the statement of Mason and Wilson JJ that a court could decline to adopt a literal interpretation where this did not conform to the legislative intent, meaning "the legislative intent as ascertained from the provisions of the statute, including the policy which may be discerned from those provisions."636 In legislation like s 35(a) of the Interpretation of Legislation Act 1984 (Vic)637 and s 15AA of the Acts Interpretation Act 1901 (Cth) as at common law, "purpose" means only the purpose as revealed in the statutory language. Thus in Trevisan v Commissioner of Taxation638 Burchett J said, speaking of s 15AA: "The section is not a warrant for redrafting legislation nearer to an assumed desire of the legislature. It is not for the courts to legislate; a meaning, though illuminated by the statutory injunction to promote the purpose or object underlying the Act, must be found in the words of Parliament." If the word "purpose" in s 32(1) means the purpose found in the statutory language, as is the case with the common law rule and s 15AA of the Acts Interpretation Act 1901 (Cth), there is force in the view advocated by the Attorney-General for the State of Western Australia, for example, that, apart from any s 7(2) problem, s 32(1) is valid, because it does not give the court power to depart from the objectively determined meaning of legislation; it only gives power to ascertain that meaning. Section 32(1), he said, was analogous to the common law principle of legality. That principle rests on an assumption that, unless clear words are used, the courts will not interpret legislation as abrogating or contracting fundamental rights or freedoms639. The fundamental rights or 635 Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 40 and 42 per Mason J; [1986] HCA 40. 636 Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 321; [1981] HCA 26 (emphasis added). 637 Quoted above at [389] n 552. 638 (1991) 29 FCR 157 at 162, approved in R v L (1994) 49 FCR 534 at 538 and Comcare v Thompson (2000) 100 FCR 375 at 382 [40]. 639 Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476 at 492 [30]. For the principle of legality, see Spigelman, Statutory Interpretation and Human (Footnote continues on next page) freedoms often relate to human rights and are sometimes described as having a constitutional character. He gave illustrations: freedom from trespass by police officers on private property640; procedural fairness641; the conferral of jurisdiction on a court642; and vested property interests643. To these may be added others: rights of access to the courts644; rights to a fair trial645; the writ of habeas corpus646; open justice647; the non-retrospectivity of statutes extending the criminal law648; the non-retrospectivity of changes in rights or obligations generally649; mens rea as an element of legislatively-created crimes650; freedom Rights, (2008) at 22-39. The "principle of legality" might have been better named, for it is to be hoped that everything a court does rests on legality. 640 Coco v The Queen (1994) 179 CLR 427 at 436-437; [1994] HCA 15. 641 Plaintiff M61/2010E v The Commonwealth (2010) 85 ALJR 133 at 147-148 [74]; 272 ALR 14 at 32; [2010] HCA 41. 642 Shergold v Tanner (2002) 209 CLR 126 at 136-137 [34]; [2002] HCA 19. 643 Clissold v Perry (1904) 1 CLR 363 at 373; [1904] HCA 12. 644 Pyx Granite Co Ltd v Ministry of Housing and Local Government [1960] AC 260 at 286; Bremer Vulkan Schiffbau und Maschinenfabrik v South India Shipping Corporation Ltd [1981] AC 909 at 977; R v Secretary of State for the Home Department; Ex parte Leech [1994] QB 198 at 210; R v Lord Chancellor; Ex parte Witham [1998] QB 575 at 585; Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476 at 492-493 [32]. 645 R v Macfarlane; Ex parte O'Flanagan and O'Kelly (1923) 32 CLR 518 at 541-542; [1923] HCA 39; R v Lord Chancellor; Ex parte Witham [1998] QB 575 at 585; Malika Holdings Pty Ltd v Stretton (2001) 204 CLR 290 at 298 [28]; [2001] HCA 646 Cox v Hakes (1890) 15 App Cas 506 at 527-530; Ex parte Walsh and Johnson; In re Yates (1925) 37 CLR 36 at 91; Wall v The King; Ex parte King Won and Wah On [No 1] (1927) 39 CLR 245 at 250; [1927] HCA 4. 647 Scott v Scott [1913] AC 417 at 473-477. 648 R v Reah [1968] 1 WLR 1508; [1968] 3 All ER 269; Malika Holdings Pty Ltd v Stretton (2001) 204 CLR 290 at 298 [28]. 649 Maxwell v Murphy (1957) 96 CLR 261 at 267; [1957] HCA 7; Fisher v Hebburn Ltd (1960) 105 CLR 188 at 194; [1960] HCA 80. 650 Sweet v Parsley [1970] AC 132 at 148 and 152. from arbitrary arrest or search651; the criminal standard of proof652; the liberty of the individual653; the freedom of individuals to depart from and re-enter their country654; the freedom of individuals to trade as they wish655; the liberty of individuals to use the highways656; freedom of speech657; legal professional privilege658; the privilege against self-incrimination659; the non-existence of an appeal from an acquittal660; and the jurisdiction of superior courts to prevent acts by inferior courts and tribunals in excess of jurisdiction661. Similarly, the appellant submitted that s 32(1) bears an analogy with s 15A of the Acts Interpretation Act 1901 (Cth) and s 6 of the Interpretation of Legislation Act 1984 (Vic)662. 651 Bowditch v Balchin (1850) 5 Exch 378 at 381 [155 ER 165 at 166]; Malika Holdings Pty Ltd v Stretton (2001) 204 CLR 290 at 298 [28]. 652 Malika Holdings Pty Ltd v Stretton (2001) 204 CLR 290 at 298 [28]. 653 Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 520, 523 and 532; [1987] HCA 654 Potter v Minahan (1908) 7 CLR 277 at 305-306; [1908] HCA 63. 655 The Commonwealth and the Postmaster-General v The Progress Advertising and Press Agency Co Pty Ltd (1910) 10 CLR 457 at 464; [1910] HCA 28. 656 Melbourne Corporation v Barry (1922) 31 CLR 174 at 206; [1922] HCA 56. 657 R v Secretary of State for the Home Department; Ex parte Simms [2000] 2 AC 115 658 Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543 at 553 [11]; [2002] HCA 49. 659 Hamilton v Oades (1989) 166 CLR 486 at 495; [1989] HCA 21. 660 Davern v Messel (1984) 155 CLR 21 at 31, 48, 63 and 66; [1984] HCA 34. 661 Wentworth v New South Wales Bar Association (1992) 176 CLR 239 at 252; [1992] HCA 24; Malika Holdings Pty Ltd v Stretton (2001) 204 CLR 290 at 298 [28]; Mitchforce Pty Ltd v Industrial Relations Commission of New South Wales (2003) 57 NSWLR 212 at 237-238 [124]. 662 See above at [399]. In his Second Reading Speech, the Attorney-General said663: "Clause 32 of the bill recognises the traditional role for the courts in interpreting legislation passed by Parliament. While this bill will not allow courts to invalidate or strike down legislation, it does provide for courts to interpret statutory provisions in a way which is compatible with the human rights contained in the charter, so far as it is possible to do so consistently with their purpose and meaning." The words "traditional role for the courts in interpreting legislation" are Delphic. Of course courts have a traditional role in interpreting legislation. Theirs, at the end of the day, is the only relevant role. Its interpretation is what they find it to be. If members of the public or officials or legislators dislike that finding, they have no recourse but to procure the enactment of different legislation. The Attorney-General was certainly saying that that traditional role is to continue under s 32(1). To deny it would be constitutionally revolutionary. But what rules of interpretation did the Attorney-General have in mind as those which the court would employ in carrying out its "traditional role"? On that specific topic he was silent. The difficulty is that s 32(1) refers to "purpose" but not "meaning". The Explanatory Memorandum suggested that s 32(1) prevented the courts from relying on "meaning" at the expense of "purpose" or "object". Speaking of cl 32(1), which became s 32(1), it said664: "Sub-clause (1) establishes the requirement that courts and tribunals must interpret all statutory provisions in a way that is compatible with human rights, so far as it is possible to do so consistently with the purpose of the statutory provision. The object of this sub-clause is to ensure that courts and tribunals interpret legislation to give effect to human rights. The reference to statutory purpose is to ensure that in doing so courts do not strain the interpretation of legislation so as to displace Parliament's intended purpose or interpret legislation in a manner which avoids achieving the object of the legislation." 663 Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 4 May 2006 at 664 Victoria, Legislative Assembly, Charter of Human Rights and Responsibilities Bill 2006, Explanatory Memorandum at 23. And the Human Rights Consultation Committee also revealed that its desire was to depart from a "meaning" based provision like s 30 of the Human Rights Act 2004 (ACT) in its original form665: "Section 30 of the ACT Human Rights Act 2004 states: 'In working out the meaning of a Territory law, an interpretation that is consistent with human rights is as far as possible to be preferred.' The ACT model also indicates that the courts are to take account, at the same time, of the purpose of the law. The phrase 'working out the meaning of a Territory law' means: resolving an ambiguous or obscure provision of the law; or confirming or displacing the apparent meaning of the law; or finding the meaning of the law when its apparent meaning leads to a result that is manifestly absurd or is unreasonable; or finding the meaning of the law in any other case. Section 3 of the United Kingdom Human Rights Act 1998 states: 'So far as it is possible to do so, primary legislation and subordinate legislation must be read and given effect in a way which is compatible with the Convention rights.' The Charter Group suggested that, in defining the phrase 'working out the meaning of a law', a similar provision to that in the ACT should be adopted. The Committee supports the ACT approach[.] However, the Committee also believes that the provision could be worded more simply so that it would read: 'So far as it is possible to do so, consistently with its purpose, a Victorian law must be read and given effect to in a way that is compatible with human rights.' By making this plain, the courts would be provided with clear guidance to interpret legislation to give effect to a right so long as that interpretation is not so strained as to disturb the purpose of the legislation in question. This is consistent with some of the more recent cases in the United Kingdom, where a more purposive approach to interpretation was favoured." 665 Human Rights Consultation Committee, Rights, Responsibilities and Respect: The Report of the Human Rights Consultation Committee (2005) at 82-83 (footnote omitted). Importantly, the Human Rights Consultation Committee then referred to Ghaidan v Godin-Mendoza666. That case concerned legislation permitting a spouse surviving a co-spouse who was a protected tenant to succeed to the protected tenancy. It was interpreted to extend to persons living with the deceased protected tenant "as if" or "as though" they were spouses, even though they were not. Lord Nicholls of Birkenhead said that s 3 "is β¦ apt to require a court to read in words which change the meaning of the enacted legislation"667. Thus the Human Rights Consultation Committee proposed s 32(1) because it would require the courts to adopt a "purposive" approach requiring the courts to read words into and change the meaning of enacted legislation. There is a further significance in that passage from the Report of the Human Rights Consultation Committee. In 2003 the ACT Bill of Rights Consultative Committee recommended a provision said to be based on the approaches adopted in New Zealand and the United Kingdom668: "(1) A court or tribunal must interpret a law of the Territory to be compatible with human rights and must ensure that the law is given effect to in a way that is compatible with human rights, as far as it is possible to do so." That sub-clause contained no reference to meaning or to purpose. However, the recommendation was not adopted. The provision actually adopted in the first instance was s 30 of the Human Rights Act 2004 (ACT). The Human Rights Consultation Committee quoted s 30(1) in the passage set out above. The chair of the ACT Bill of Rights Consultative Committee was a person whose interests and experience render her extremely knowledgeable in the field. In her opinion, s 30(1) as originally enacted could be read as: "a codification of the 'principle of legality' by which Parliament is assumed not to intend to impinge on basic rights, unless it uses clear words to do so. This may suggest that s 30 is weaker than both its New Zealand and United Kingdom counterparts"669. 667 [2004] 2 AC 557 at 571-572 [32] (emphasis added). 668 ACT Bill of Rights Consultative Committee, Towards an ACT Human Rights Act, (2003), App 4: Human Rights Bill 2003, cl 3. 669 Charlesworth, "Human Rights and Statutory Interpretation", in Corcoran and Bottomley (eds), Interpreting Statutes, (2005) 100 at 115 (footnote omitted). She (Footnote continues on next page) The Human Rights Consultation Committee thus appears to have wished to move away from the ACT model originally adopted in s 30(1) towards the United Kingdom model. Since the enactment of s 32(1), s 30(1) of the ACT legislation has been amended to correspond with it. The Explanatory Statement to the Human Rights Amendment Bill 2007 contended that it drew on such United Kingdom cases as Ghaidan's case. This too confirms that s 32(1) is to be read as creating a "purposive" approach requiring the courts to read words into and change the meaning of enacted legislation. The adoption of the Human Rights Consultation Committee's approach in s 32(1) means that s 32(1) goes well beyond the common law and beyond s 15AA. Section 32(1) must, like the Charter as a whole, be interpreted amply, not restrictively. Section 32(1) does not say "consistently with their language" or "consistently with their meaning", but "consistently with their purpose" β a much wider expression. Further, there would be no point in s 32(1) unless its function was to go further than the common law principle of legality by which legislation is assumed not to affect human rights unless clear words are used670. The function of s 32(1) evidently is to make up for the putative failure of the common law rules by legitimising reliance on a much broader kind of "purposive" interpretation going beyond the traditional search for "purpose" as revealed in the statutory words. The Australian Capital Territory experience β first a recommendation for a wide provision, followed by its non-acceptance in 2004, followed by a change in s 30(1) as originally enacted in imitation of the Victorian model, coupled with an expression of admiration for the United Kingdom approach in Ghaidan's case in the Australian Capital Territory Explanatory Statement in 2007671 β suggests that those expert in the field see s 32(1) as being much wider than the principle of legality. The language of s 32(1) thus suggests that there is some gap between "purpose" and "interpretative meaning", by which "purpose" controls "interpretation" rather than merely being a reflection of it. In effect s 32(1) permits the court to "disregard the express language of a statute when something not contained in the statute itself, called its 'purpose', can be employed to justify the result the court considers proper."672 The wider the gap, the more "purpose" is an empty vessel into which particular judges can unrestrainedly pour their own wishes. Judges, having found a mischief, or did note the view stated in the Explanatory Statement that s 30(1) went further than codifying the principle of legality. 670 See above at [444]. 671 As already noted, it is an admiration also expressed by the Human Rights Consultation Committee in Victoria: see [447] above. 672 Fuller, "The Case of the Speluncean Explorers", (1949) 62 Harvard Law Review redefined it to suit their own perceptions, can decide that the words used by the legislature have not caused it to be remedied well, can formulate their own view of what a satisfactory remedy would be, and can decide that the statutory purpose is to supply that remedy673. Ordinary statutory interpretation does not depend on the "purpose" of the statute, but its "scope"674. But s 32(1) calls for a different task, for "you simply cannot apply a statute as it is written and remake it to meet your own wishes at the same time."675 Section 32(1) commands the courts not to apply statutory provisions but to remake them β an act of legislation. Indeed, the inclusion of a reference to "purpose" in s 32(1) suggests that it is even wider than s 3(1) of the Human Rights Act 1998 (UK), on which the Human Rights Consultation Committee was avowedly relying. It provides: "So far as it is possible to do so, primary legislation and subordinate legislation must be read and given effect in a way which is compatible with the Convention rights." In form it is narrower than s 32(1). It does not contain the words "consistently with their purpose". It is therefore open to interpret it as conveying the idea: "so far as it is possible to do so consistently with the language". That is not how it has been interpreted in practice. There are not a few instances where a reading of legislation in the light of s 3(1) is different from its objectively determined meaning. As already noted, a leading example is Ghaidan's case676, on which the Human Rights Consultation Committee in Victoria relied in recommending s 32(1), and on which the ACT Explanatory Statement relied in explaining why s 30(1) of the ACT legislation was amended to conform with s 32(1). In that case Lord Nicholls said that s 3 was apt to require a court to read in words which changed the meaning of the legislation. There are other cases resting on that view. A legislative provision requiring a court to impose a life sentence in certain circumstances had added to it the rider "unless the offender does not constitute a significant risk to the public"677. A legislative provision that certain offenders be released unless it was 673 Fuller, "The Case of the Speluncean Explorers", (1949) 62 Harvard Law Review 674 Fuller, "The Case of the Speluncean Explorers", (1949) 62 Harvard Law Review 616 at 636 (emphasis in original). 675 Fuller, "The Case of the Speluncean Explorers", (1949) 62 Harvard Law Review 676 See above at [447]. 677 See R v Offen [2001] 1 WLR 253 at 277; [2001] 2 All ER 154 at 175. no longer necessary for the protection of the public that they be confined was interpreted as meaning that there was a duty to release the offenders unless the public interest required their confinement to continue678. And, of immediate present relevance, in Sheldrake v Director of Public Prosecutions679 a provision creating a legal burden of proof on the accused was read as imposing only an evidential burden even though this was not "the intention" of the legislature. The House of Lords thus applied s 3(1) to arrive at a meaning not otherwise open on the language. That is quite different from applying the principle of legality. It is instead an exercise in judicial legislation. Should reference be made to "human rights" materials in foreign countries? There is little to be learned from African or Arab Charters, for example, for in 2006 Africa contained very few countries answering the description "liberal democracy", and the Arab world contained none. There is reason in answering the question "No", but for two factors. One is that the travaux prΓ©paratoires, by referring to Ghaidan's case, may make that case relevant to the meaning of s 32(1). The other is that, pursuant to s 32(2)680, the courts have power to consider Ghaidan's case and others in its line in interpreting statutory provisions681. If this does not increase the power, whatever it is, of Victorian courts to examine comparative materials, what was its point? The effect is, as it has been said, to "ratchet-up" s 32(1) by reference to the most extreme foreign decisions682. The odour of human rights sanctity is sweet and addictive. It is a comforting drug stronger than poppy or mandragora or all the drowsy syrups of the world. But the effect can only be maintained over time by increasing the strength of the dose. In human rights circles there are no enemies on the left, so to speak. Because s 32(2) only permits consideration of foreign decisions, but does not compel it, the Victorian courts are empowered to consider those decisions they favour and decide not to consider those they dislike. "To invoke alien law when it agrees with one's own thinking, and ignore it otherwise, is not reasoned decisionmaking, but sophistry."683 But that will not stop it being 678 R (Sim) v Parole Board [2004] QB 1288. 679 [2005] 1 AC 264. See also R v Lambert [2002] 2 AC 545, a case which was discussed in Sheldrake's case and on which the appellant relied. 680 See above at [407]. 681 See Allan, "The Victorian Charter of Human Rights and Responsibilities: Exegesis and Criticism", (2006) 30 Melbourne University Law Review 906 at 911-912. 682 Allan and Huscroft, "Constitutional Rights Coming Home to Roost? Rights Internationalism in American Courts", (2006) 43 San Diego Law Review 1 at 683 Roper v Simmons 543 US 551 at 627 (2005) per Scalia J dissenting. done, relentlessly and irreversibly β a factor which reinforces the invalidity of It might be though that the appellant's position was greatly damaged by the Ghaidan-Sheldrake line of cases β that it was a shirt of Nessus which she could not throw off, try as she might. But she did not try to throw it off. She swathed herself in it. She asked the Court of Appeal in this case to act as a legislature by reasoning as the House of Lords did in Sheldrake's case. She submitted that even if in its ordinary meaning s 5 imposed a legal burden on the accused on the balance of probabilities, s 32(1) required that ordinary meaning to be departed from. The ordinary meaning of the expression "satisfies the court to the contrary" in s 5 is "persuade the court to the contrary on the balance of probabilities". The recognition, by reason of s 25(1), of a right to be presumed innocent until proved guilty cannot change that meaning. Nor can it support some other available meaning as the correct meaning, for there is no other available meaning. The appellant's submission to the contrary concentrates on what the legislature might have chosen as the desirable meaning for s 5, not on what it actually means. To interpret legislation as having a meaning which is in truth not the actual meaning, but a desired modification of it, is to legislate. The appellant's submission was correct to interpret s 32(1) widely. But on that interpretation it is invalid because the conferral of legislative functions on the courts alters their character. The futility of orthodoxy. The parties and interveners in these proceedings were concerned on the whole to give the Charter a narrow interpretation. From their point of view, there were sound tactical reasons for this. There were things to be said to the contrary, mais pas devant les juges. It was important not to scare the horses if a finding of partial or total invalidity was to be avoided. However, an air of futility pervaded the interpretational debate. The adoption by a majority of this Court of a narrow interpretation of s 32(1) ensures validity. But future generations of barristers will be tempted to invite future generations of judges to depart from the narrow interpretation. They may even see it as their duty to yield to temptation. Because of the profound influence which barristers have on the judicial statement of the law, it is likely that those invitations will be accepted, expressly or silently. The judges of this country assert and apply the doctrine of precedent with a stern and unbending rigidity β except so far as it may affect their own conduct. The function of ordinary judicial work is to protect the rule of law. But, though vital, the task can be dreary and mundane. Often interest can only be found in rearranging the conventional order of legal clichΓ©s, or tinkering with the tired language of legal tests, or trying to avoid the sterile conflict of stale metaphors. Judicial fires which have sunk low may burn more brightly in response to a call to adventure. Where judicial appetites have been jaded or lost, the call may stimulate and freshen them to grow with what they feed on. In future the decision that s 32(1) is valid will be remembered. Not so the narrow interpretation on which the conclusion of validity rests. In numerous minds forensic oblivion will be its portion. Most of those who will remember it will silently suppress it. Any protest about this will be silenced by a reference to the blessed vagueness of the word "purpose" in s 32(1). Validity of ss 33, 36 and 37. Thus the whole Charter is invalid, either because of s 7(2) or because of s 32(1) or both. The effect of s 7(2) is to permit and compel a considerable redefinition of rights. The effect of s 32(1) is to cause statutes to be changed radically. infrequently, and "In order to maintain a coherent system of rules, they must be made legislating must be kept sharply slowly and distinguished from adjudicating. For unless laws are stable, they cannot be known; and if they cannot be known, they can neither be subscribed to nor enforced."684 Section 7(2) operates neither clearly nor infrequently. The same is true of Alternatively, ss 33, 36 and 37 are invalid. While s 37 creates duties on the Minister administering the relevant statutory provision, they are created only by s 37. They are not created by the court in deciding the controversy between the parties685. When the court makes a s 36 declaration it is not making a "declaration of right". It is not exercising judicial power. A s 36 declaration is merely advisory in character. It does not declare any rights of the parties. It decides nothing. And it does not affect their rights: s 36(5)(b). This is illustrated by one of the appellant's arguments for a special costs order in these proceedings. She submitted that debate about s 36 was a matter of complete irrelevance to her rights and duties. In this respect her submission was entirely correct. A s 36 declaration does not involve the exercise of a judicial function and it is not an incident of the judicial process. The work of the Supreme Court of Victoria, sitting as such, is limited to the judicial process. The power to make a s 36 declaration takes the Supreme Court of Victoria outside the constitutional conception of a "court". Issue (b): Does s 5 of the Act apply to s 71AC? The prosecution case was that the appellant was guilty of an offence against s 71AC of trafficking in a drug of dependence. She was alleged to have had a drug of dependence "in [her] possession for sale". It was contended that 684 Letwin, "On Conservative Individualism" in Cowling (ed), Conservative Essays, 685 McHugh, "A Human Rights Act, the courts and the Constitution", paper delivered at the Australian Human Rights Commission, 5 March 2009 at 44. this fell within par (c) of the definition of "traffick" in s 70(1). The trial judge directed the jury on the assumption that the definition of "possession" in s 5 applies to s 71AC via the definition of "traffick" in s 70(1) and reverses the legal burden of proof. Although the appellant submitted to the Court of Appeal that s 5 reverses only the evidential burden of proof, she did not contend that s 5 does not apply to s 71AC at all. And she did not so contend in this Court either until a doubt was raised by the bench. The appellant's argument is that the meaning of "possession" given in s 5 does not apply to the word "possession" in the definition of "traffick" in s 70(1). This raises an important question about how the statutory criminal law of Victoria is to be interpreted. It is not satisfactory for the appellant to invite this Court to change the received interpretation in circumstances where the submission was not put, formally or otherwise, to the trial judge, was not put to the Court of Appeal, and was only advanced in a developed form in the course of counsel's oral address in reply. That is partly because the Court of Appeal has much wider and more intense experience of Victorian criminal law than this Court. And it is partly because the first and second respondents, who had an interest in maintaining the appellant's conviction and their Government's view of Victorian criminal law, lacked the normal opportunity to consider the problem at a little leisure. However, belatedly pursued though the argument was, there is no alternative but to deal with it. Section 4(1) of the Act sets out numerous definitions which are to be applied in interpreting the Act unless "inconsistent with the context or subject-matter". Section 5 is a definitional provision, but it contains no equivalent words. the context or It applies automatically, whatever subject-matter. Section 70(1) resembles s 4(1) in containing definitions, one of which is the definition of "traffick", which do not apply if "inconsistent with the context or subject-matter". The present question is not whether the definition of "traffick" in s 70(1) should not be applied in a particular context or to a particular subject-matter, but whether the definition of "possession" in s 5 should not be applied to the definition of "traffick". The appellant submitted that in the definition of "traffick" the word "possession" does not appear separately. It appears only as part of a larger expression β "have in possession for sale". In a sense it is a composite expression, but that is not in itself a reason to abstain from ascertaining the meaning of a particular component of the expression which is capable of separate analysis, by reference to a definition of that component which is not prevented from applying by reason of a particular context or subject-matter. The appellant also submitted that if s 5 applies to the definition of "traffick", it would be paradoxical that some forms of trafficking would turn on proof of knowledge that it is a drug which is being prepared, manufactured, sold, exchanged, agreed to be sold or offered for sale, while no such proof of knowledge was needed for the form of trafficking involved in having possession for sale. This contradicted another part of the appellant's argument in which she criticised the trial judge for allegedly not telling the jury that proof of knowledge that the substance in question is a drug is needed for the form of trafficking involved in having possession for sale notwithstanding the terms of s 5686. It also rests on the fallacy that the much-amended provisions of this area of the Act reflect a statutory scheme which has complete internal consistency and freedom from paradox. The application of s 5 to s 71AC is not affected by the Charter, if only because the Charter is invalid. Issue (c): Did the Court of Appeal interpret s 5 of the Act correctly? Independently of the Charter, the Court of Appeal interpreted s 5 as imposing on accused persons the burden of satisfying the court that they were not in possession of a substance687. That was consistent with the earlier holding that "satisfies the court to the contrary" in s 5 means "persuades the court to the contrary on the balance of probabilities"688. To tender some evidence of non-possession is a quite different thing from satisfying triers of fact of non-possession. The appellant attacked this in three ways. First, the appellant submitted that the failure of s 5 to refer to the standard of proof was significant because it would have been easy to insert words referring to the standard of proof if the legislative scheme was to require that the accused meet a legal burden of proof on the balance of probabilities. She contrasted s 5 with s 72C and s 73(1) of the Act, which did refer to satisfaction on the balance of probabilities. She submitted that the legislation should be interpreted so as not to abrogate a fundamental common law right by reversing the legal burden of proof in the absence of clear words, and s 5 was not clear in the absence of any reference to the balance of probabilities. The answer to this argument is that even if the Act β a much-amended statute β exhibits untidiness, there is no reason to treat the explicit references in sections other than s 5 to the standard of proof as proceeding from anything other than an abundance of 686 See below at [487]-[499]. 687 R v Momcilovic (2010) 25 VR 436 at 467-468 [113]-[114]. 688 R v Clarke and Johnstone [1986] VR 643 at 647-648 and 658-659 per Crockett, caution. There is no difference between "satisfies" and "satisfies on the balance of probabilities". Secondly, the appellant submitted that an evidential burden would amply fulfil the statutory goal of facilitating proof of possession while preventing accused persons being convicted where they had, in discharging the evidential burden, raised a reasonable doubt about possession. But unpalatable though a reverse legal burden of proof in criminal trials may be, particularly where as here it calls for proof of a negative, it does facilitate proof of possession much more than a simple placement of the evidential burden on the accused would. It increases the likelihood of the accused entering the witness box more than a reverse evidential burden would. That is because there is a radical difference between the two burdens. A legal burden of proof on the accused requires the accused to disprove possession on a preponderance of probabilities. An evidential burden of proof on the accused requires only a showing that there is sufficient evidence to raise an issue as to the non-existence of possession. The legal burden of proving something which the accused is best placed to prove like non-possession is much more likely to influence the accused to testify than an evidential burden, capable of being met by pointing to some piece of evidence tendered by other means and perhaps by the prosecution. Thirdly, the appellant submitted that if s 5 cast a legal burden on the accused, anomalies would arise. Some crimes of trafficking would require proof by the prosecution beyond reasonable doubt that the accused was aware that the substance was a drug, while the crime of trafficking based on "having in possession for sale" would not. She said it was contradictory that while some drug offences required proof beyond reasonable doubt that the accused intended to traffick in an amount of the drug above a prohibited threshold, and hence created a requirement that the accused be aware of it, the creation by s 5 of a legal burden of proof on accused persons meant that accused persons had an onus to disprove awareness. Again, these submissions contradict the appellant's submission on jury direction. And the submissions assume, but do not establish, symmetry and internal consistency in the provisions. Hence the Court of Appeal interpreted s 5 correctly. Issue (d): Are ss 5 and 71AC of the Act inconsistent with ss 13.1, 13.2 and 302.4 of the Code and therefore inoperative? In this Court, for the first time, the appellant contended that ss 5 and 71AC of the Act were inconsistent with s 302.4 of the Code, and were therefore inoperative pursuant to s 109 of the Constitution. The appellant said that the point was only suggested by Dickson v The Queen689, a decision of this Court handed down after the grant of special leave in the present appeal. Section 300.4 of the Code provides: "(1) This Part is not intended to exclude or limit the concurrent operation of any law of a State or Territory. (2) Without limiting subsection (1), this Part is not intended to exclude or limit the concurrent operation of a law of a State or Territory that makes: an act or omission that is an offence against a provision of this Part; or a similar act or omission; an offence against the law of the State or Territory. Subsection (2) applies even if the law of the State or Territory does any one or more of the following: provides for a penalty for the offence that differs from the penalty provided for in this Part; provides for a fault element in relation to the offence that differs from the fault elements applicable to the offence under this Part; provides for a defence in relation to the offence that differs from the defences applicable to the offence under this Part." Section 302.4 is in the same Part as s 300.4. In R v Credit Tribunal; Ex parte General Motors Acceptance Corporation, Australia this Court considered similar words in s 75(1) of the Trade Practices Act 1974 (Cth): "this Part [ie Pt V] is not intended to exclude or limit the concurrent operation of any law of a State or Territory." 689 (2010) 241 CLR 491; [2010] HCA 30. Mason J (with whom Barwick CJ, Gibbs, Stephen and Jacobs JJ, and perhaps Murphy J, agreed) held that690: "where there is no direct inconsistency, where inconsistency can only arise if the Commonwealth law is intended to be an exhaustive and exclusive law, a provision of the kind under consideration will be effective to avoid inconsistency by making it clear that the law is not intended to be exhaustive or exclusive." "It is perhaps possible to imagine a case in which a Commonwealth Act did it dealt, notwithstanding that it said that it was not intended to do so, but such a case may be left for consideration until it arises." the whole field with which truth fully cover The present case is not a case of that kind. There has been dissatisfaction about the formula approved in the Credit Tribunal case. It centres on "intention". In this it corresponds with the usage of innumerable statutes, eg the Acts Interpretation Act 1901 (Cth), s 8. Section 109 of the Constitution, however, does not talk of "intention". It relevantly provides: "When a law of a State is inconsistent with a law of the Commonwealth, the latter shall prevail". There is a constant and perhaps ineradicable habit of referring to the intention of the Federal Parliament in enacting a law of the Commonwealth said to be inconsistent with a law of a State. But in this usage "intention" can mean only the intention as revealed in the words of the law. That is because s 109 does not provide: "When what a law of a State was intended to say is inconsistent with what a law of the Commonwealth was intended to say, the latter shall prevail". The distinction drawn in many cases between direct inconsistency and the "covering the field" inconsistency which arises where the Commonwealth law is an "exhaustive and exclusive law" has also stimulated dissatisfaction. But its validity was accepted by the Court in the Credit Tribunal case. Applying that 690 (1977) 137 CLR 545 at 563-564; [1977] HCA 34. As to the constitutional validity and utility of the reverse formula, to the effect that federal provisions apply to the exclusion of State provisions, see New South Wales v The Commonwealth (Work Choices Case) (2006) 229 CLR 1 at 166-169 [370]-[372]. 691 University of Wollongong v Metwally (1984) 158 CLR 447 at 456; [1984] HCA 74. See also Majik Markets Pty Ltd v Brake and Service Centre Drummoyne Pty Ltd (1991) 28 NSWLR 443 at 460. On s 109 problems generally, see Leeming, Resolving Conflicts of Laws, (2011), Ch 5. distinction, it cannot be said that there is inconsistency of the former kind in the present case. The appellant advanced the following arguments in support of her claim that there was direct inconsistency. The first related to s 5 of the Act. The appellant said it placed an evidential burden on her. It is in fact a legal burden of disproving possession β a circumstance which improves the appellant's argument as far as it goes. The appellant pointed out that the burden of proof of possession in the Code there lies on the prosecution beyond reasonable doubt. She submitted that in relation to the mere occupation of premises on which drugs are found, the Code preserved an "area of liberty designedly left"692. Secondly, the appellant submitted that the possible methods of trial were different. In a prosecution for contravention of the Act, the jury would not have to be unanimous: Juries Act 2000 (Vic), s 46. In a prosecution under s 302.4, since the crime is triable on indictment under s 4G of the Crimes Act 1914 (Cth), trial would be by jury, and the verdict would have to be unanimous by reason of s 80 of the Constitution. The answer to these first two arguments is that they mischaracterise the legislation. Putting on one side a small difference in the prohibited quantity, on which the appellant did not rely, both the Act and the Code render the possession of drugs criminal by reference to the same substantive criteria of guilt. They forbid the same conduct and leave unforbidden the same conduct. The area of liberty each leaves is the same. In Dickson v The Queen693 there was direct inconsistency between the laws because the Victorian law as a substantive matter rendered criminal that which the Commonwealth law did not, and the Commonwealth law was thus seen as preserving "areas of liberty designedly left" which should not be closed up by Victorian law. That is not the case here. The appellant relied on the following passage from Dickson v The Queen694: "In the absence of the operation of s 109 β¦ the [State legislation] will alter, impair or detract from the operation of the federal law by proscribing conduct of the appellant which is left untouched by the federal law. The State legislation, in its application to the presentment upon which the appellant was convicted, would undermine and, to a significant 692 See Wenn v Attorney-General (Vict) (1948) 77 CLR 84 at 120; [1948] HCA 13. 693 (2010) 241 CLR 491. 694 (2010) 241 CLR 491 at 504 [22]. extent, negate the criteria for the existence and adjudication of criminal liability adopted by the federal law. No room is left for the State law to attach to the crime of conspiracy to steal property in the possession of the Commonwealth more stringent criteria and a different mode of trial by jury." But the Court went on to "explain why this is so"695. It was so because of differences, not in procedural respects like burdens of proof and jury trial, but in three points of substantive law696. Dickson v The Queen is thus against the appellant's argument. It is the substantive criminal law which determines what areas of liberty are left, not procedural law. The appellant's third argument was that the maximum penalty under s 71AC of the Act was greater than the maximum penalty imposed by s 302.4 of the Code and (belatedly) that the applicable sentencing principles differed. The appellant submitted that while the difference in maximum penalty was not determinative, it could be taken into account in deciding whether there was a direct inconsistency. Subject to the merits of this third argument, the present circumstances do not raise any direct inconsistency. In one of the few authorities in which a difference in penalty has aided in a conclusion of direct inconsistency, the difference was seen as only significant in covering the field inconsistency697. It was not submitted that there was covering the field inconsistency here. The appellant said nothing about how sentencing principles differed. If there are material differences, there was no demonstration of whether and how they were significant. Commonwealth legislation often has the result that, depending on the place of trial, different outcomes may arise under Commonwealth, State and Territory provisions in relation to the sentencing of an offender for a Commonwealth offence, and the Commonwealth legislation in relation to sentencing principles has been held not to cover the field and not to invalidate State legislation containing different principles698. The appellant submitted only 695 (2010) 241 CLR 491 at 504 [23]. 696 Dickson v The Queen (2010) 241 CLR 491 at 505-506 [26]-[28]. 697 R v Loewenthal; Ex parte Blacklock (1974) 131 CLR 338 at 346-347; [1974] HCA 36 ("at least when it appears that the Commonwealth statute by prescribing the rule to be observed evinces an intention to cover the subject matter to the exclusion of any other law" β per Mason J). See also at 339, 342-343 and 347-348; and see Hume v Palmer (1926) 38 CLR 441 at 447, 450-451 and 462; [1926] HCA 50; Ex parte McLean (1930) 43 CLR 472 at 479, 480-481 and 483-484; [1930] HCA 12; Grace Bros Pty Ltd v Magistrates, Local Courts of New South Wales (1988) 84 ALR 492 at 503-507. 698 Putland v The Queen (2004) 218 CLR 174 at 185 [23] and [25], 192-193 [51]-[52] and 215 [121]-[122]; [2004] HCA 8. that persons convicted of an offence against a law of the Commonwealth had a "right" to have their sentences determined in accordance with Commonwealth sentencing principles, and that this "right" had been taken away by State law. This is not a "right" in the sense of a right conferred by the Commonwealth law which the State law can be said to have altered, impaired or detracted from. Hence the present case is not one of direct inconsistency. In that event, since it was not submitted that there was covering the field inconsistency, if the Credit Tribunal case is good law, the Act must be valid. To depart from the distinction between direct inconsistency and covering the field inconsistency, and to hold that the form of words approved in the Credit Tribunal case as a means of avoiding the application of s 109 where covering the field issues may arise was not an effective method of doing so, would involve overruling that case. Like this case, the Credit Tribunal case had a criminal context. In the Trade Practices Act as it stood at the relevant time, Pt V, to which s 75(1) referred, included provisions establishing norms of conduct (ss 53-65) breach of which s 79 rendered criminal. The Credit Tribunal case was a decision supported by all but one, or all, depending on the correct reading of Murphy J's reasons, of the Justices. It was a decision delivered after hearing argument over two days from very able counsel β three future Justices of this Court, three future State Supreme Court judges and M H Byers QC β and after a substantial period of reservation. It has often been followed699, most recently by seven Justices in John Holland Pty Ltd v Victorian WorkCover Authority700 and Dickson v The Queen701. If leave to argue that it should be overruled be necessary, it was not sought by the appellant. And the appellant did not argue that it should be overruled. In John v Federal Commissioner of Taxation702 Mason CJ, Wilson, Dawson, Toohey and Gaudron JJ approved an earlier statement703 that four 699 Palmdale-AGCI Ltd v Workers' Compensation Commission (NSW) (1977) 140 CLR 236; [1977] HCA 69; University of Wollongong v Metwally (1984) 158 CLR 447 at 456; Western Australia v The Commonwealth (Native Title Act Case) (1995) 183 CLR 373 at 466; Houghton v Arms (2006) 225 CLR 553 at 563 [22]; [2006] HCA 59. 700 (2009) 239 CLR 518 at 527-528 [21]; [2009] HCA 45. 701 (2010) 241 CLR 491 at 507 [33]. 702 (1989) 166 CLR 417 at 438-439; [1989] HCA 5. 703 By Gibbs CJ (with whom Stephen and Aickin JJ agreed) in The Commonwealth v Hospital Contribution Fund (1982) 150 CLR 49 at 56-58; [1982] HCA 13. matters were relevant to whether this Court should depart from one of its own earlier decisions. "The first was that the earlier decisions did not rest upon a principle carefully worked out in a significant succession of cases. The second was a difference between the reasons of the justices constituting the majority in one of the earlier decisions. The third was that the earlier decisions had achieved no useful result but on the contrary had led to considerable inconvenience. The fourth was that the earlier decisions had not been in a manner which militated against independently acted on reconsideration". None of the first three factors applies. So far as the fourth is concerned, the Credit Tribunal case has been relied on by the Commonwealth in many statutes. This reliance suggests that there is State legislation existing in the same areas as at least some of those statutes. Persons other than the Commonwealth may have relied on the validity of the formula approved in the Credit Tribunal case as efficacious to ensure the validity of the State legislation, and may then have ordered their affairs in accordance with that legislation. Overruling the Credit Tribunal case may disturb reasonable expectations. As W P Deane QC, counsel for the Attorney-General for the State of New South Wales, pointed out in argument in the Credit Tribunal case, the formula approved in that case already appeared in four Commonwealth statutes apart from the Trade Practices Act704. The formula has been used many times in the Code705, although, as pointed out in Dickson v The Queen706, to some provisions it is not applied. The formula has been used in the provision which has replaced s 75 of the now renamed and radically altered Trade Practices Act, namely s 131C of the Competition and Consumer Act 2010 (Cth). The formula has been used in Commonwealth statutes which have been repealed707. And it has been 704 Petroleum (Submerged Lands) Act 1967, s 150; Pollution of Sea by Oil Act 1960, s 4; Family Law Act 1975, s 10(2); and Fisheries Act 1952, s 5A. 705 Sections 70.6, 71.19, 72.5, 72.32, 100.6, 115.5, 261.1, 268.120, 270.12, 271.12, 272.7, 273.4, 274.6, 360.4, 400.16, 472.1, 475.1 and 476.4. 706 (2010) 241 CLR 491 at 508 [37]. 707 Australian Protective Service Act 1987, s 21(4), (4A) and (5); Crimes (Protection of Aircraft) Act 1973, s 20; Crimes (Torture) Act 1988, s 5; Environment Protection (Nuclear Codes) Act 1978, s 12(6)(b); Federal Airports Corporation Act 1986, s 73; Financial Corporations Act 1974, s 19; Interactive Gambling (Moratorium) Act 2000, s 14; National Parks and Wildlife Conservation Act 1975, s 19(3); and Year 2000 Information Disclosure Act 1999, s 18. used in numerous unrepealed Commonwealth statutes708. Variants on the formula, too, have often been employed in Commonwealth statutes709. 708 Aboriginal and Torres Strait Islander Heritage Protection Act 1984, s 7; Age Discrimination Act 2004, s 12; Anti-Money Laundering and Counter-Terrorism Financing Act 2006, s 240; Atomic Energy Act 1953, s 41(4); Australian Astronomical Observatory Act 2010, s 25; Australian Crime Commission Act 2002, s 55A(8); Australian Federal Police Act 1979, ss 14G(4), (5), 14N; Australian Human Rights Commission Act 1986, s 4; Australian Securities and Investments Commission Act 2001, s 12AE; Civil Dispute Resolution Act 2011, s 17A; Classification (Publications, Films and Computer Games) Act 1995, s 100; Copyright Act 1968, s 201(4); Corporations Act 2001, s 5E; Crimes Act 1914, ss 3UH, 15YZF, 23A; Crimes (Aviation) Act 1991, s 50; Crimes (Hostages) Act 1989, s 6; Crimes (Internationally Protected Persons) Act 1976, s 6(1); Crimes (Ships and Fixed Platforms) Act 1992, s 6; Crimes (Traffic in Narcotic Drugs and Psychotropic Substances) Act 1990, s 5; Cybercrime Act 2001, s 476.4; Defence Act 1903, s 116ZC; Defence Force Discipline Act 1982, s 3(18); Defence Service Homes Act 1918, s 4D; Disability Discrimination Act 1992, s 13; Do Not Call Register Act 2006, s 42; Environment Protection and Biodiversity Conservation Act 1999, ss 10, 300A, 402(8); Family Law Act 1975, s 114AB; Financial Sector (Collection of Data) Act 2001, s 26; Fisheries Management Act 1991, s 10; Foreign Evidence Act 1994, s 18; Interactive Gambling Act 2001, s 69; Maritime Transport and Offshore Facilities Security Act 2003, s 8; Meat Inspection Act 1983, s 7; Medical Indemnity (Prudential Supervision and Product Standards) Act 2003, s 32; National Consumer Credit Protection Act 2009, s 23; National Consumer Credit Protection (Transitional and Consequential Provisions) Act 2009, Sched 1, Pt 2, item 6; National Health and Hospitals Network Act 2011, s 59; National Measurement Act 1960, s 4A(2); National Vocational Education and Training Regulator Act 2011, s 192(4); Personal Property Securities Act 2009, ss 253, 254; Protection of the Sea (Civil Liability) Act 1981, s 15(6); Protection of the Sea (Civil Liability for Bunker Oil Pollution Damage) Act 2008, s 14; Protection of the Sea (Powers of Intervention) Act 1981, s 5; Public Order (Protection of Persons and Property) Act 1971, s 11(3A); Racial Discrimination Act 1975, ss 6A, 18F; Radiocommunications Act 1992, s 201; Research Involving Human Embryos Act 2002, s 43(4); Same-Sex Relationships (Equal Treatment in Commonwealth Laws β General Law Reform) Act 2008, s 11A(3); Sex Discrimination Act 1984, ss 10, 11; Shipping Registration Act 1981, s 79; Telecommunications (Consumer Protection and Service Standards) Act 1999, ss 121, 158M; Telecommunications (Interception and Access) Act 1979, ss 107D, 168; Therapeutic Goods Act 1989, ss 6AAA, 42X; Tobacco Advertising Prohibition Act 1992, s 6; Water Act 2007, ss 40, 250B; Water Efficiency Labelling and Standards Act 2005, s 11. See also a similar formula: Seas and Submerged Lands Act 1973, s 16; Proceeds of Crime Act 2002, 709 For example, Insurance Contracts Act 1984, s 7. Our law knows nothing of prospective overruling710. Lord Devlin once remarked that "[a] judge-made change in the law rarely comes out of a blue sky. Rumblings β¦ will give warning of unsettled weather."711 There have been no rumblings before the arguments in this appeal giving warnings to any States which have enacted legislation in the same areas as the Commonwealth legislation. The overruling of the Credit Tribunal case would come as a complete surprise. "Nullification of enactments and confusion of public business are not lightly to be introduced."712 To describe the effect of reversing the Credit Tribunal case on the "public business" of the States as "confusion" could be to speak very euphemistically. In all the circumstances the Credit Tribunal case must be followed. There is no s 109 inconsistency. Issue (e): Has the appellant any valid complaint about the adequacy of the directions to the jury? Ground 2 of the appellant's Amended Notice of Appeal in this Court was: "The Court of Appeal erred in concluding that there was no error in the trial judge's failure to direct that the appellant could not have the drugs in her possession for sale, and therefore could not be guilty of trafficking, unless the prosecution proved beyond reasonable doubt that she knew of the presence of the drugs." The appellant's first submission on ground 2 was that whatever the burden of proof cast by s 5 in relation to the issue of possession of the drugs, she could not be guilty unless, in relation to the issue of trafficking, the prosecution proved beyond reasonable doubt that she was aware of the existence of the drugs713. The first respondent disputed that submission; for present purposes the correctness of the appellant's submission can be accepted without being decided. The appellant then submitted that the jury were not told that the prosecution had to prove 710 Ha v New South Wales (1997) 189 CLR 465 at 503-504; [1997] HCA 34. 711 "Judges and Lawmakers", (1976) 39 Modern Law Review 1 at 10. 712 Federal Commissioner of Taxation v Munro (1926) 38 CLR 153 at 180 per 713 She cited R v Medici (1989) 40 A Crim R 413 at 415; R v Tragear (2003) 9 VR 107 at 117 [43]-[44]; R v Georgiou [2009] VSCA 57 at [6]-[10], [48], [51] and [55]-[61]. In contrast, the first respondent relied on R v Clarke and Johnstone [1986] VR 643 at 660. beyond reasonable doubt that the appellant knew of the existence of the methylamphetamine in her apartment. Finally, the appellant submitted that the summing up contained a specific deficiency in the italicised words of the following passage: "To summarise, before you can find her guilty of trafficking in a drug of dependence, the prosecution must prove to you beyond reasonable doubt: She intentionally committed an act of trafficking, being in the possession of a prohibited drug for the purposes of sale. That she intentionally trafficked in a drug of dependence. possessed was That methylamphetamine and that she intended to [traffick] in a prohibited drug. substance she the The Crown must prove both of those elements beyond reasonable doubt. The accused must satisfy you on the balance of probabilities, that she did not know that she was in possession of the methylamphetamine. If you find that any of these elements have not been proved beyond reasonable doubt, then you must find her not guilty of trafficking in a drug of dependence." (emphasis added) The appellant submitted that the jurors would have had the italicised words "ringing in their ears". The appellant submitted: "[T]he trial was conducted on that issue and the jury were told over and over again that that is how it was to be determined and β¦ they were never told that if the Crown failed to prove beyond reasonable doubt that she knew of the drugs β¦ she had to be acquitted." This complaint must fail. It is true that at times the trial judge said the burden of proving that the appellant did not know of the drugs lay on her on the balance of probabilities. But those references related to the burden of proof on the issue of possession under s 5. After the bulk of those references, the trial judge then made it plain that he was turning from s 5 to a new issue, on which there was a different burden of proof. He said: "If you accept, on the balance of probabilities, that the accused did not know of the methylamphetamine in the apartment, then that is the end of the case. You must bring in a verdict of not guilty. If you do not accept the defence case, that she did not know of the drugs, then you must consider the second element of the charge of trafficking. That is the two competing cases on whether she knew or not and the defence must prove, on the balance of probabilities, that she was not aware that there [were] these illegal drugs in that apartment. If you do not accept, on the balance of probabilities, that she was not aware, then you must consider the second element of the charge of trafficking. The second element that the prosecution must prove beyond reasonable doubt, is that the accused intentionally trafficked, in a drug of dependence. There are two parts of this element. The prosecution must prove that the substance, allegedly trafficked by the accused, was a drug of dependence and also prove that the accused intended to [traffick] in a drug of dependence." (emphasis added) The trial judge also said: "[T]he prosecution must β¦ prove beyond reasonable doubt that the accused intended to [traffick] in a drug of [dependence]. That is, the accused deliberately possessed for sale a prohibited drug." (emphasis added) Thereafter the trial judge made numerous references to the standard of proof in relation to intention as being beyond reasonable doubt, and he made a further 13 references to intention. To act "intentionally" is to act with intention or on purpose714. To "intend" is to "have in the mind as a fixed purpose"715. So, in ordinary speech, to say of the appellant that she "intentionally trafficked in" or "intended to traffick in" a drug of dependence is to say that she had in her mind as a fixed purpose the trafficking of the drug, and that cannot be done unless she knew that that which was trafficked or to be trafficked was a drug of dependence. To act "deliberately" is to act with set purpose716. So, in ordinary speech, to say of the appellant that she "deliberately possessed for sale" a drug of dependence is to say that she possessed it with set purpose, and that cannot be done unless she knew that what she possessed was a drug of dependence. These meanings correspond with the ordinary usage of the English language. Juries understand the ordinary usages of the English language. It is necessary to return to ground 2 of the Amended Notice of Appeal. It complains that the trial judge did not tell the jury that the prosecution had to prove beyond reasonable doubt that the appellant "knew of the presence of the 714 The Oxford English Dictionary, 2nd ed (1989), vol VII at 1080, meaning c. 715 The Oxford English Dictionary, 2nd ed (1989), vol VII at 1073, meaning 18 (described as the "chief current sense"). 716 The Oxford English Dictionary, 2nd ed (1989), vol IV at 414, meaning 1. drugs." There are two reasons for concluding that the trial judge did tell the jury that. First, in the circumstances of this case, for the reasons just given, it was not possible to conclude that the appellant "intentionally trafficked" or "intended to traffick" in or "deliberately possessed for sale" a drug of dependence unless she knew that the substance in question was a drug of dependence. Secondly, the trial judge expressly told the jury four times that an issue relevant to intention to traffick in a drug of dependence was whether the appellant had knowledge or awareness of the drugs, and that on that issue the jury had to be satisfied beyond reasonable doubt. He said: "The defence denied Vera Momcilovic had any intention to traffick in a drug of dependence, alleged that she did not know that she was in possession of a prohibited drug. The defence case here was the same as on the question of possession. The accused just did not know of the drugs and, therefore, could not have possessed them for the purpose of sale. It is important to remember that it is the prosecution who must prove beyond reasonable doubt, that the accused had the relevant intention. If you are not satisfied that the accused knew that it was a drug she was trafficking and there was no other basis from which you can infer that the accused intended to [traffick in] a drug of dependence, then this second element will not be met. The defence submitted you couldn't be satisfied that the accused was aware of the presence of drugs in the premises. You must decide, based on all the evidence, whether the substance trafficked by the accused was a drug of dependence, that's not in doubt, and that the accused intended to [traffick in] such a drug. It is only if you are satisfied of both of these elements beyond reasonable doubt that this second element is met." (emphasis added) In view of that passage, it cannot be said, as the appellant submitted, that the jury "were never told that if the Crown failed to prove beyond reasonable doubt that she knew of the drugs β¦ she had to be acquitted". And it cannot be said, as ground 2 alleges, that the trial judge failed to direct the jury that the appellant could not be convicted "unless the prosecution proved beyond reasonable doubt that she knew of the presence of the drugs." The appellant submitted that the trial judge should have directed the jury that if some aspect of the evidence raised a doubt in their mind about her awareness of the drugs they should acquit. But that is merely another way of saying that he should have directed them that they had to be satisfied beyond a reasonable doubt that she knew of the drugs. He repeatedly did that. The appellant also submitted that the parties conducted the case on the erroneous assumption that once the jury found that the appellant had not discharged on the balance of probabilities the burden of establishing that she did not have possession (and did not know of the drugs for that purpose), there was no need to go further and consider whether the prosecution had established her knowledge of the drugs beyond reasonable doubt in relation to trafficking. Whether or not the parties conducted the case on that assumption, it was not an assumption shared by the trial judge and it was not reflected in his summing up. In other words, if the appellant's first submission on ground 2 is correct, the direction was adequate; if it is not correct, the direction was unduly favourable to the appellant. Either way the ground of complaint is not made out. Orders The appeal must be dismissed. The appellant sought an order that if she were unsuccessful in the appeal the Court should order the first and second respondents to pay a proportion of her costs. The attractively presented argument turned on two points. One was that the case had caused argument to develop on issues which were irrelevant to the appellant's rights and duties: constitutional issues relating to s 36 of the Charter and issues in relation to whether the matter was heard in federal jurisdiction. The other was that there were constitutional issues in relation to s 109 of the Constitution and issues of the interpretation of the Charter which were of great public importance beyond the appellant's individual position. The issues to which the argument in relation to the first point referred took up some time, but relatively little time. There is reason, however, to have sympathy with the appellant in relation to the issues connected with the second point. Those issues did indeed generate a lot of paper and take up a great deal of time once four parties and six interveners had been heard. But both the Charter issues and the s 109 issues were not forced on the appellant. They were raised by her in an attempt to have her conviction set aside. In the circumstances there should not be an order as to costs. CRENNAN AND KIEFEL JJ. Following a trial by a jury in the County Court of Victoria, the appellant was convicted of the offence of trafficking in a drug of dependence, namely methylamphetamine, on 14 January 2006. She was sentenced to two years and three months' imprisonment with a non-parole period of 18 months717. The prosecution case against the appellant was based upon the presence of drugs in an apartment in Melbourne which she owned and which she shared with her partner of some years, Velimir Markovski. A search of the apartment was executed under warrant after surveillance of Markovski. In the course of the search the police found a plastic bag containing 64.6 grams of the drug methylamphetamine in the freezer of a small refrigerator; a plastic container which held 20 smaller plastic bags of the drug, containing a total weight of 394.2 grams of the drug; and a jar in the kitchen cupboard containing 325.8 grams of a substance indeterminate amount of methylamphetamine. They also found other materials and equipment usually associated with the preparation of drugs for sale and they found $165,900 in cash in a shoe box in a walk-in wardrobe off the master bedroom. The prosecution alleged that the apartment was used as a minor amphetamine factory. included an that In a separate trial, Markovski was convicted of methylamphetamine and cocaine in the period from 9 December 2005 to 14 January 2006. The appellant, a legal practitioner and an intellectual property consultant, denied any knowledge of the drugs. Markovski gave evidence at the appellant's trial that she had no knowledge of, or involvement in, the drug trafficking undertaken by him and was not aware of the money he kept in the wardrobe. The only DNA material which was present on any of the items located in the search was attributed to Markovski. trafficking The appellant was charged with an offence under s 71AC of the Drugs, Poisons and Controlled Substances Act 1981 (Vic) ("the Drugs Act"), which, in relevant part, provides that a person is guilty of an indictable offence if they traffick or attempt to traffick in a drug of dependence. The word "traffick" is defined by s 70(1) to include to "have in possession for sale, a drug of dependence". Section 73(2) is also relevant to a charge of trafficking in a drug of dependence. It provides that the possession by a person of a drug of dependence in a quantity not less than the traffickable quantity applicable to that drug of dependence, is prima facie evidence of trafficking by that person in that drug. That is to say, it is prima facie evidence of possession for sale. The traffickable 717 R v Momcilovic unreported, County Court of Victoria, 20 August 2008. quantity for methylamphetamine was six grams at the relevant time718. The possession relevant to the charge against the appellant was, by reference to s 70, "possession for sale", not possession simpliciter, which is made an offence by s 73(1) of the Drugs Act. The prosecution relied upon a deeming provision, s 5 of the Drugs Act, to establish that the appellant was in possession of the drugs found in her apartment. That deeming provision was then linked to the quantity of drugs in her apartment to establish that her possession of the drugs was possession for sale. Section 5 provides: "Meaning of possession Without restricting the meaning of the word possession, any substance shall be deemed for the purposes of this Act to be in the possession of a person so long as it is upon any land or premises occupied by him or is used, enjoyed or controlled by him in any place whatsoever, unless the person satisfies the court to the contrary." (emphasis in original) It appears to have been assumed at trial and in the Court of Appeal of the Supreme Court of Victoria719 that s 5 could be invoked, as it was at trial, to establish the appellant's possession of a quantity of drugs exceeding the traffickable quantity and thus the possession for sale relied upon as constituting trafficking in the drugs. The correctness of that assumption depends upon the proper construction of the provisions of the Drugs Act. If the assumption was not correct, then the appellant was convicted upon the basis of a reversal of the onus of proof applied to a critical issue in the case and the appeal should be allowed. The trial judge directed the jury that once it was proved that the appellant was in occupation of the premises the appellant would be in possession of the drugs unless she satisfied them, on the balance of probabilities, that she did not know of the presence of the drugs in her apartment. In its terms s 5 places a legal, not merely an evidentiary, onus on a person accused of an offence involving the possession of drugs to rebut the presumption there created, that the drugs found on land or premises occupied by him or her were in his or her possession. This is apparent from the requirement that the 718 Drugs, Poisons and Controlled Substances Act 1981 (Vic), Sched 11, Pt 3, col 3. It is presently three grams, this change having been effected by s 20 of the Drugs, Poisons and Controlled Substances (Amendment) Act 2006 (Vic). 719 R v Momcilovic (2010) 25 VR 436. person satisfy the court to the contrary. The words "to the contrary" convey that it is proof of a state of affairs such as would overcome the presumption which is required. To "satisfy" a court requires that the court be persuaded and this is consistent with a legal onus720. Section 5 of the Drugs Act denies the operation of the common law rule that the prosecution prove the guilt of an accused person by proof, beyond reasonable doubt, of both negative and positive elements of an offence721. The rule reflects the common law concept of the presumption of a person's innocence722. The principle of legality at common law would require that a statutory provision affecting the presumption of innocence be construed, so far as the language of the provision allows, to minimise or avoid the displacement of the presumption. But, for the reasons which follow, its application to s 5 cannot yield a construction other than that required by the clear language of that section, which places the legal burden of proof on the accused. In Victoria, the Charter of Human Rights and Responsibilities Act 2006 (Vic) ("the Charter") sets out "the human rights that Parliament specifically seeks to protect and promote."723 Section 25, "Rights in criminal proceedings", provides one of those rights by sub-s (1): 720 HKSAR v Lam Kwong Wai (2006) 9 HKCFAR 574 at 597 [34] per Sir Anthony Mason NPJ. 721 Referred to as the "golden thread": see Woolmington v The Director of Public Prosecutions [1935] AC 462 at 481 per Viscount Sankey LC; and see Phipson on Evidence, 17th ed (2010) at 154 [6-09]. The rule is now embodied in s 141 of the Evidence Act 2008 (Vic) albeit, by s 8 of that Act, it does not affect the operation of any other Act. 722 A concept which has been criticised as an "inaccurate, shorthand description of the right of the accused to 'remain inactive and secure, until the prosecution has taken up its burden and produced evidence and effected persuasion'": Taylor v Kentucky 436 US 478 at 484 fn 12 (1978). The right to a presumption of innocence, to which s 25(1) of the Charter of Human Rights and Responsibilities Act 2006 (Vic) refers, may have a larger content: see Quintard-MorΓ©nas, "The Presumption of Innocence in the French and Anglo-American Legal Traditions", (2010) 58 American Journal of Comparative Law 107. 723 Charter of Human Rights and Responsibilities Act 2006 (Vic), s 7(1). "A person charged with a criminal offence has the right to be presumed innocent until proved guilty according to law." It is not necessary for present purposes to consider whether the right so protected is limited to the common law concept of the presumption of innocence. It clearly incorporates it. Following her conviction the appellant sought leave to appeal against conviction and sentence to the Court of Appeal. The appellant argued that as a matter of ordinary construction, s 5 required the discharge of only an evidentiary onus of proof. That contention was correctly rejected by the Court of Appeal. The alternative argument advanced by the appellant was that the same conclusion is reached by the particular construction required of statutes by the Charter in order that, so far as possible, they be compatible with the human rights recognised by the Charter. The Court of Appeal rejected that contention and refused leave to appeal against conviction. It granted leave to appeal against sentence, allowed the appeal and substituted a sentence of 18 months' imprisonment. Those decisions of the Court were dated 17 March 2010. At the conclusion of orders made with respect to the applications for leave to appeal and the appeal, the Court of Appeal further stated: "And, on 25 March 2010, the Court of Appeal has further decided:β It is declared pursuant to subsection 36(2) of the Charter of Human Rights and Responsibilities Act 2006 (Vic) ('Charter') that section 5 of the Drugs, Poisons and Controlled Substances Act 1981 (Vic) cannot be interpreted consistently with the presumption of innocence under s 25(1) of the Charter." The principal issues on the appeal The appellant challenges the construction which the Court of Appeal gave to s 5, by reference to certain provisions of the Charter which are said to be relevant to its interpretation. The essential question raised by those Charter provisions724 is whether they alter the approach to statutory construction which is ordinarily undertaken by the courts. In the event that the construction given to s 5 of the Drugs Act by the Court of Appeal, which was reached by reference to accepted principles of construction, is confirmed, it will be necessary to consider the provision made by s 36(2) of the Charter for the making of a "declaration of inconsistent interpretation". In that regard it will be necessary to consider 724 Charter of Human Rights and Responsibilities Act 2006, ss 7(2) and 32. whether such a function is one compatible with the role of the Supreme Court as a repository of the judicial power of the Commonwealth725. There are two further substantial questions on this appeal concerning the provisions of the Drugs Act. The first is whether s 5 engages with s 71AC for the purpose of establishing "possession for sale". The second question is whether, properly construed, ss 5 and 71AC of the Drugs Act are inconsistent with provisions of the Criminal Code (Cth) ("the Commonwealth Code") within the meaning of s 109 of the Constitution. If the first question is answered in favour of the appellant, the appeal must be allowed and a new trial ordered. If the constitutional question in relation to s 109 were to be answered in favour of the appellant, the indictment would have charged an offence not known to the law and should be quashed and the sentence set aside. Because the approach to the construction of the provisions of the Drugs Act is logically anterior to these questions, it is necessary to first consider how the Charter is applied to that process of construction. The Charter and its operation The objects of the Charter The Charter is said to be founded upon certain principles, the first of which is that "human rights are essential in a democratic and inclusive society that respects the rule of law, human dignity, equality and freedom"726. The main purpose of the Charter is the protection and promotion of human rights. It seeks to do this by identifying those human rights which are subject to its protection727, by ensuring statutory provisions, whenever enacted, "are interpreted so far as is possible in a way that is compatible with human rights"728 and, where that cannot be achieved, by empowering729 the Supreme Court to "declare that a statutory provision cannot be interpreted consistently with a human right"730. Its purpose 725 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51; [1996] HCA 726 Charter of Human Rights and Responsibilities Act 2006, Preamble. 727 Charter of Human Rights and Responsibilities Act 2006, s 1(2)(a). 728 Charter of Human Rights and Responsibilities Act 2006, s 1(2)(b). 729 The section says "conferring jurisdiction" but for the reasons later given, in connection with s 36(2), that is incorrect. 730 Charter of Human Rights and Responsibilities Act 2006, s 1(2)(e). is further said to be achieved by requiring public authorities to act in a way that is compatible with the human rights set out in the Charter731 and requiring Bills introduced into Parliament to have a statement of compatibility with the rights732. However, the Charter allows the Parliament to override the application of the Charter "in exceptional circumstances"733. The Charter rights Section 6(1) provides that "[a]ll persons have the human rights set out in Part 2."734 The civil and political rights identified in Pt 2 are derived principally from the International Covenant on Civil and Political Rights (1966) ("the ICCPR")735. The ICCPR was opened for signature on 16 December 1966 and entered into force pursuant to Art 49(1) on 23 March 1976736. Australia signed the ICCPR on 18 December 1972 and ratified it on 13 August 1980737. The ICCPR entered into force for Australia pursuant to Art 49(2) on 13 November 1980738. The text of the ICCPR appears in Sched 2 to the Australian Human Rights 731 Charter of Human Rights and Responsibilities Act 2006, s 1(2)(c). 732 Charter of Human Rights and Responsibilities Act 2006, s 1(2)(d). 733 Charter of Human Rights and Responsibilities Act 2006, s 1(3)(a). 734 "Human rights" are also defined in s 3(1) by reference to the civil and political rights set out in Pt 2. 735 Victoria, Legislative Assembly, Charter of Human Rights and Responsibilities Bill 2006, Explanatory Memorandum at 1 and 8, referring to the International Covenant on Civil and Political Rights. 736 With the exception of Art 41, which entered into force on 28 March 1979 pursuant to the requirement for the Article's entry into force outlined in par (2) of Art 41. 737 Australia's Instrument of Ratification of the International Covenant on Civil and Political Rights (1980) 1197 UNTS 411. 738 Owing to the requirements in Art 41(2), Art 41 did not enter into force for Australia until 28 January 1993. Commission Act 1986 (Cth) (formerly known as the Human Rights and Equal Opportunity Commission Act 1986 (Cth))739. In Pt 2 of the Charter ss 8 to 27 identify certain rights, freedoms and protections. Some of them are fundamental freedoms which have for some time been recognised and protected by the principle of legality at common law. The rights identified include recognition and equality before the law (s 8), the right to life (s 9), protection from torture and cruel, inhuman or degrading treatment (s 10), freedom from forced work (s 11), freedom of movement (s 12), freedom of thought, conscience, religion and belief (s 14740), freedom of expression (s 15), privacy and reputation (s 13) and peaceful assembly and association (s 16). Section 25(1), which states the presumption of innocence to be a right, is set out above. Sub-section (2) of that section provides that a person charged with a criminal offence is entitled to certain minimum guarantees in connection with his or her trial. It is worth noting that as long ago as 1923 Isaacs J referred to "the elementary right of every accused person to a fair and impartial trial" in R v Macfarlane; Ex parte O'Flanagan and O'Kelly741 and said: "Every conviction set aside, every new criminal trial ordered, are mere exemplifications of this fundamental principle." Since that case there have been many developments in Australia's common law in this regard. Part 2 of the Charter commences with s 7, which is entitled "Human rights β what they are and when they may be limited". A question on this appeal is what part, if any, s 7 plays in the construction to be given by the courts to a statute. It relevantly provides: "(1) This Part sets out the human rights that Parliament specifically seeks to protect and promote. (2) A human right may be subject under law only to such reasonable limits as can be demonstrably justified in a free and democratic society based on human dignity, equality and freedom, and taking into account all relevant factors including β the nature of the right; and 739 This change in name was effected by the commencement, on 5 August 2009, of Item 35 of Sched 3 to the Disability Discrimination and Other Human Rights Legislation Amendment Act 2009 (Cth). 740 Freedom of religion is also protected under s 116 of the Constitution. 741 (1923) 32 CLR 518 at 541-542; [1923] HCA 39. the importance of the purpose of the limitation; and the nature and extent of the limitation; and the relationship between the limitation and its purpose; and any less restrictive means reasonably available to achieve the purpose that the limitation seeks to achieve." The application of the Charter The Charter is expressed to apply to particular functions of the Parliament, of courts and tribunals, and of public authorities742. It applies to Parliament to the extent that Parliament has the functions of scrutiny of new legislation or of deciding whether to override the Charter. It applies to public authorities to the extent that s 38(1) provides that it is unlawful for a public authority to act in a way that is incompatible with a human right or, in making a decision, to fail to give proper consideration to a relevant human right. A "public authority" is defined in wide terms, to include any entity that has functions of a public nature, whether it is established by a statutory provision or exercises its functions on behalf of the State or a public authority743. The Charter applies to "courts and tribunals, to the extent that they have functions under Part 2 and Division 3 of Part 3"744. Some of the rights identified and described in Pt 2 may require courts or tribunals to ensure that processes are complied with, for example to ensure a fair hearing745, and that the matters guaranteed by the Charter with respect to a criminal trial are provided746. And the Charter contains, in s 32, a general injunction concerning the interpretation of statutes by reference to the Charter. The provisions concerning the role of the Supreme Court Section 32, which appears in Div 3 of Pt 3 of the Charter, is entitled "Interpretation". It provides: 742 Charter of Human Rights and Responsibilities Act 2006, s 6(2). 743 Charter of Human Rights and Responsibilities Act 2006, s 4. 744 Charter of Human Rights and Responsibilities Act 2006, s 6(2)(b). 745 Charter of Human Rights and Responsibilities Act 2006, s 24. 746 Charter of Human Rights and Responsibilities Act 2006, s 25. "(1) So far as it is possible to do so consistently with their purpose, all statutory provisions must be interpreted in a way that is compatible with human rights. International law and the judgments of domestic, foreign and international courts and tribunals relevant to a human right may be considered in interpreting a statutory provision. This section does not affect the validity of β an Act or provision of an Act that is incompatible with a human right; or a subordinate instrument or provision of a subordinate instrument that is incompatible with a human right and is empowered to be so by the Act under which it is made." Where a question of law arises which concerns the application of the Charter or the interpretation of a statute in accordance with the Charter, notice is required to be given to the Attorney-General and the Victorian Equal Opportunity and Human Rights Commission747 ("the Commission"), unless they are already parties to the proceedings748. The Attorney-General has the right to intervene, in which case he or she is taken to be a party to the proceeding for the purpose of an appeal, and may be joined as a party where questions of the kind mentioned arise749. Where a question of the kind mentioned concerning the Charter arises in a proceeding before a court or a tribunal, the question may be referred to the Supreme Court750 if the court or tribunal, on application by a party, considers that it is appropriate for determination by that Court751. Where a court or tribunal has referred a question it must not make a determination to which the question is relevant while the referral is pending or proceed in a manner, or make a 747 Under the Equal Opportunity Act 1995 (Vic). 748 Charter of Human Rights and Responsibilities Act 2006, s 35. 749 Charter of Human Rights and Responsibilities Act 2006, s 34. 750 When the court is the Trial Division of the Supreme Court or the County Court, it is to refer the matter to the Court of Appeal: Charter of Human Rights and Responsibilities Act 2006, s 33(3). 751 Charter of Human Rights and Responsibilities Act 2006, s 33(1). determination, which is inconsistent with the opinion of the Supreme Court on the question752. Where a question of the kind mentioned arises in a proceeding in the Supreme Court, or is referred to it, or in an appeal to the Court of Appeal753, s 36(2) provides for the making of a "declaration of inconsistent interpretation" (referred to as a "declaration" in the balance of these reasons, although, as will be explained, it cannot have the status of a declaratory order granting relief754 in respect of law): "Subject to any relevant override declaration, if in a proceeding the Supreme Court is of the opinion that a statutory provision cannot be interpreted consistently with a human right, the Court may make a declaration to that effect in accordance with this section." It may be observed that the Supreme Court is not obliged to make a declaration. The Supreme Court must ensure notice is given to the Attorney-General and the Commission if it is considering making a declaration755, and must not proceed to make a declaration unless it is satisfied that notice has been given and the Attorney-General and the Commission have had a reasonable opportunity to intervene in the proceedings or make submissions with respect to the proposed declaration756. The limited character and effect of such a declaration is spelled out by s 36(5), which provides: "A declaration of inconsistent interpretation does not β affect in any way the validity, operation or enforcement of the statutory provision in respect of which the declaration was made; or create in any person any legal right or give rise to any civil cause of action." 752 Charter of Human Rights and Responsibilities Act 2006, s 33(2). 753 Charter of Human Rights and Responsibilities Act 2006, s 36(1). 754 Such as a declaration of right or a declaration as to the rights of parties to litigation. 755 Charter of Human Rights and Responsibilities Act 2006, s 36(3). 756 Charter of Human Rights and Responsibilities Act 2006, s 36(4). Whether any action is to be taken consequent upon the making of the declaration depends upon the response of the relevant Minister and Parliament. Section 36(6) requires the Supreme Court to cause a copy of the declaration to be given to the Attorney-General, within a specified period which relates to the conclusion of appeal rights. The Minister administering the statute in question is required, by s 37, to prepare a written response to the declaration, and cause the declaration and the response to be laid before each House of Parliament and be published in the Government Gazette. Such a procedure was not undertaken in this case following the making of the declaration by the Court of Appeal. It was said that this step was not undertaken because of the appeal pending in this Court. Nothing in the Charter requires the Attorney-General or the relevant Minister to take any action to rectify the inconsistency which is the subject of the declaration. In the Second Reading Speech757 it was said that the Charter sought to address human rights issues through "a formal dialogue between the three branches of government while recognising the ultimate sovereignty of Parliament to make laws for the good government of the people of Victoria." In the Report of the Human Rights Consultation Committee, which recommended the adoption of the Charter, the dialogue was said to be as between the community and different arms of government758 and as between the courts, Parliament and the executive759. And it was said that declarations are a "channel through which the dialogue" takes place between the courts and the Parliament760. Questions as to ss 7(2), 32(1) and 36(2) A "dialogue" is an inappropriate description of the relations between the Parliament and the courts and it is inaccurate to describe the process suggested by s 36(2) as involving a dialogue, just as the reference to the making of a "declaration" in that sub-section is inaccurate. The reference to a dialogue does, however, serve to highlight the novel aspect of s 36(2). Section 36(2) effects a novel alteration to the customary interchange between courts and Parliament 757 Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 4 May 2006 at 758 Victoria, Human Rights Consultation Committee, Rights, Responsibilities and Respect, (2005) at 67. 759 Victoria, Human Rights Consultation Committee, Rights, Responsibilities and Respect, (2005) at 85. 760 Victoria, Human Rights Consultation Committee, Rights, Responsibilities and Respect, (2005) at 86. which occurs under well-established principles of statutory construction and interpretation of legislation. But to say that it is novel that a court may, where appropriate, identify an inconsistency between legislation and a Charter right does not mean it impermissibly alters the relationship between the arms of government spoken of in Zheng v Cai761 or compromises the institutional integrity of that court. It is necessary to analyse what is actually involved in the court making such a declaration. The question presented by s 36(2) is whether the provision offends against the Constitution by bestowing a power on the Supreme Court, incompatible with its position as a repository of the judicial power of the Commonwealth. Courts exercise judicial power through their orders and judgments. Orders and judgments are respectively pronounced and published in response to questions raised in matters before a court, and are determinative of rights and interests. The use of the term "declaration" in s 36(2) is ambiguous because it evokes the familiar remedy of a declaratory order, yet s 36(5) makes it plain that the declaration has no dispositive effect. A declaration of inconsistency is not an order of the Supreme Court of Victoria762. As will be explained in these reasons, it is no more than a statement by the Supreme Court that, following upon its interpretation of a statutory provision in the context of the Charter, it has found the provision to be inconsistent with one or more Charter rights. Conscious of the position of the Supreme Court of Victoria in the system of courts which exercise federal jurisdiction under the Constitution, the Attorney- General for Victoria submitted that the conferral of the power under s 36(2) to make a declaration does not contravene Ch III of the Constitution. It was submitted that it is not repugnant to, or incompatible with, the institutional integrity of the Supreme Court763. It was likewise submitted that nothing required of the Supreme Court in the process of its interpretation of statutes, by s 32(1), is incompatible with its role as a court to which Ch III is relevant. In that regard the central submission for the Attorney-General was that s 32(1) does not permit the Supreme Court to assume a legislative role. But the approach to construction under s 32(1) for 761 (2009) 239 CLR 446; [2009] HCA 52. 762 This also appears to be the position in respect of s 4(6)(a) of the Human Rights Act 1998 (UK): see Lester, Pannick and Herberg, Human Rights Law and Practice, 3rd ed (2009) at 51 [2.4.5]. 763 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 96, 103, 116-119 and 127-128. which the appellant contends may come much closer to a legislative function. Given the ordinary meaning of the words of s 5 of the Drugs Act, a conclusion that the presumption to be rebutted was only an evidentiary one would seem to require the words of the section to be altered. Section 7(2) of the Charter assumes relevance to the appellant's argument on construction. The appellant suggested a four-step approach, as follows. After an initial conclusion is reached, that s 5 of the Drugs Act places a legal burden of displacing the presumption on the accused, the second step is to conclude, on its ordinary construction, that s 5 limits the presumption of innocence protected by s 25(1) of the Charter, as the Court of Appeal held764. The third step is to determine, in accordance with s 7(2), that s 5 does not place a reasonable limit on that right, or as the Court held, there was no "reasonable" or "demonstrable" justification for the restriction imposed by s 5 on the right765. The fourth and last step proposed by the appellant requires the Court to turn to s 32(1) of the Charter. The Court must, in accordance with the terms of s 32(1), strive to construe s 5 so that it is compatible with, or less incompatible with, the presumption of innocence. It is possible to construe s 5 as requiring only an evidentiary onus consistently with its purpose, the appellant contends. Section 32 therefore requires that construction to be adopted, it is submitted. The Court of Appeal did not approach the operation of the Charter provisions in this way766. It considered that it was necessary to construe s 5 of the Drugs Act in a final way before turning to s 7(2). In the view of the Court, the question of whether the limit imposed on the right by s 5 was justified, pursuant to s 7(2), only becomes relevant after the meaning of s 5 is established. Section 32(1) was not seen to require any special rule of interpretation. Even if s 32(1) intended a departure from the usual approach to interpretation, the Court said that it was not possible to construe s 5 of the Drugs Act as requiring only an evidentiary onus, for to do so would be to "cross the line from interpretation to legislation"767. The Court applied s 7(2). It concluded that there "is no reasonable justification, let alone any 'demonstrable' justification", for reversing the onus of proof in connection with the offence and that "[i]t follows that s 5 cannot be interpreted consistently with s 25(1) of the Charter, although this does not affect the validity of s 5."768 It was on that basis that the Court made the 764 R v Momcilovic (2010) 25 VR 436 at 470-473 [122]-[136]. 765 R v Momcilovic (2010) 25 VR 436 at 477 [152]. 766 R v Momcilovic (2010) 25 VR 436 at 446 [35], 465-467 [105]-[110]. 767 R v Momcilovic (2010) 25 VR 436 at 446 [35]. 768 R v Momcilovic (2010) 25 VR 436 at 477 [152]-[154]. declaration of inconsistent interpretation. It did not return to further construe s 5 of the Drugs Act after applying s 7(2), as the appellant had submitted was necessary. On the Court's approach s 7(2) was not relevant to the question of interpretation, but it was a step preparatory to the making of a declaration under The intended operation of s 7(2) in connection with the construction of a statute, to which s 32(1) refers, and the connection s 7(2) has to the making of a declaration under s 36(2), are not spelled out in the Charter. It may briefly be said that differing views of the operation of these provisions were proffered by the parties and some of the interveners on the appeal to this Court. These are matters to be determined by reference to the construction of the Charter in its own terms. Sections 7(2) and 32(1): sources and comparisons The Report of the Human Rights Consultation Committee and the Explanatory Memorandum make it plain that the Charter was drafted with an eye to legislative and constitutional instruments in other countries which have the general object of protection and promotion of human rights. They include the Canadian Charter of Rights and Freedoms ("the Canadian Charter"), which was enacted as a Schedule to the Canada Act 1982 (UK); the New Zealand Bill of Rights Act 1990 (NZ); the Bill of Rights which appears as Ch 2 of the Constitution of the Republic of South Africa769; and the Human Rights Act 1998 (UK) ("the HRA"). It should be added that the Charter was also drafted to acknowledge the operation of the rule of law in a democratic society. So much appears from the principles expressed in the Preamble and from the test provided in s 7(2), that of proportionality. In argument on this appeal attention was directed to s 3 of the HRA in aid of a much broader interpretive power than might be achieved by the application of ordinary rules of construction. Section 3 relevantly provides: 769 The final South African Constitution of 1996, to which reference is made, replaced the 1993 Interim Constitution, which outlined a number of "Fundamental rights" in Ch 3 and formed the basis of what became the Bill of Rights in the final South African Constitution. "(1) So far as it is possible to do so, primary legislation and subordinate legislation must be read and given effect in a way which is compatible with the Convention[770] rights." In Ghaidan v Godin-Mendoza771, s 3 was taken to permit, if not to require, a court to modify or alter the words of a statute in order to eliminate a discriminatory effect on a person. At issue was whether the long-standing same- sex partner of the original, protected, tenant of a flat could succeed to the tenancy as a member of the tenant's family. The term "spouse" was defined by the legislation to mean persons living with a tenant as "his or her wife or husband". Compatibility with the Convention was achieved by reading the provision as extending to a person living with the original tenant "as if" they were his or her husband or wife. Ghaidan produces an outcome of compatibility with Convention rights which might follow upon compliance with the rather emphatically expressed direction in s 3(1) that a statute "must be read and given effect" to that end. Such an approach pays insufficient attention to the opening words of the sub-section, "So far as it is possible to do so", and whether they are directed to compliance with the usual rules of statutory interpretation in the context of the Charter. That question is answered in large part by s 32(1) of the Charter. It too opens with the words "So far as it is possible to do so" but continues "consistently with their purpose". The reference to statutory purpose points clearly to the task ordinarily undertaken by courts in construing legislation. In Project Blue Sky Inc v Australian Broadcasting Authority772 it was explained that the court's task is to construe the relevant provision in order to achieve consistency with the language and the purpose of the statute. In the light of the Report of the Human Rights Consultation Committee and the Explanatory Memorandum to the Charter, s 32(1) must be taken to have been drafted with an awareness of s 3(1) of the HRA and the decisions in Ghaidan and later cases, to which reference will shortly be made. Section 32(1) does not direct, as s 3(1) does, that a statutory provision must be "read and given effect in a way which is compatible with [human] rights." It simply requires that, so far as it is possible to do so consistently with their purpose, all statutory provisions "must be interpreted" in a way which is compatible with Charter 770 Convention for the Protection of Human Rights and Fundamental Freedoms (1950) ("the Convention"), which is set out in Sched 1 to the Human Rights Act 1998 772 (1998) 194 CLR 355 at 381 [69]; [1998] HCA 28. rights. This is a firm statement and one which, it may be inferred, was intended to overcome any misapprehension about the role of the courts in construing legislation. The reference to interpretation must be taken to be a reference to that process of construction as understood and ordinarily applied by courts, a process which is to be taken as accepted by the other arms of government in a system of representative democracy773. The important differences in the terms of the sections are themselves sufficient to distinguish s 32(1) of the Charter from s 3(1) of the HRA. It is not necessary to go further and consider other factors which might explain the approach taken in Ghaidan, factors which may have to do with alterations to parliamentary and judicial sovereignty and power which have been taking place since the United Kingdom joined the European Community, the status which has been accorded to the Convention in the United Kingdom774 and the role of the European Court of Human Rights in respect of the law of the United Kingdom775. It may be observed that Ghaidan was followed in Sheldrake v Director of Public Prosecutions776, where Lord Bingham of Cornhill observed the "interpretative obligation" under s 3 "may require the court to depart from the legislative intention of Parliament."777 The later decision in R (Wilkinson) v Inland Revenue Commissioners778 exemplifies a more orthodox approach to construction in the application of s 3(1) of the HRA. There the term "widow" was held not to include a surviving spouse of male gender. Lord Hoffmann that 773 Zheng v Cai (2009) 239 CLR 446 at 455-456 [28]. 774 See R v Director of Public Prosecutions; Ex parte Kebilene [2000] 2 AC 326 at 380-381; McCartan Turkington Breen v Times Newspapers Ltd [2001] 2 AC 277 at 297; Brown v Stott [2003] 1 AC 681 at 703; Wilson v First County Trust Ltd (No 2) [2004] 1 AC 816 at 875 [180]. 775 Lord Rodger of Earlsferry observed in Secretary of State for the Home Department v AF (No 3) [2010] 2 AC 269 at 366 [98]: "Even though we are dealing with rights under a United Kingdom statute, in reality, we have no choice β¦ Strasbourg has spoken, the case is closed." See also Gillan and Quinton v United Kingdom (2010) 50 EHRR 45. 777 Sheldrake v Director of Public Prosecutions [2005] 1 AC 264 at 303 [28], Lord Steyn and Lord Phillips of Worth Matravers MR agreeing at 314 [55]-[56]. See also A v HM Treasury [2010] 2 AC 534 at 647 [115] per Lord Phillips. 778 [2005] 1 WLR 1718; [2006] 1 All ER 529. explained that, whilst the Convention forms part of the background against which a statute is to be construed, the question remains one of interpretation779. So far as concerns the use to be made of s 7(2) of the Charter, attention is directed, by the Explanatory Memorandum to the Charter780, to s 5 of the New Zealand Bill of Rights Act and to s 36 of the Bill of Rights which appears as Ch 2 of the Constitution of the Republic of South Africa. It is these provisions, it is said, upon which s 7(2) was modelled. The New Zealand Bill of Rights Act and the South African Bill of Rights have in common that they both propound a test of proportionality for a law which purports to limit a right or freedom which is sought to be protected. The provision in the New Zealand Bill of Rights Act which corresponds to s 7(2) is s 5. It is entitled "Justified limitations" and provides that the rights and freedoms referred to in the Act "may be subject only to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society." Section 5 of the New Zealand Bill of Rights Act does not provide tests of the principle of proportionality as s 7(2) does, but in R v Hansen781 s 5 was taken to incorporate a test of proportionality, albeit differing in some respects from those listed in s 7(2). Proportionality as a principle may generally be said to require that any statutory limitation or restriction upon a right or freedom having a particular status be proportionate to the object or purpose which it seeks to achieve. Proportionality is also stated to be a test, and in the sense just described it is, but the term does not itself explain how the conclusion whether a statutory measure is proportionate or disproportionate is to be reached. The tests for proportionality are not universal, although they may have some features in common. Some constitutional documents or statutes state the tests to be applied, others leave it to the courts to formulate tests directed to the more general question of whether a statutory measure is proportionate and therefore justified. Such is the case with the Canadian Charter, which may be contrasted with the tests which have been employed by the German courts and courts of the European Community, which are more structured in their approach. 779 R (Wilkinson) v Inland Revenue Commissioners [2005] 1 WLR 1718 at 1723 [17]; [2006] 1 All ER 529 at 535. 780 Victoria, Legislative Assembly, Charter of Human Rights and Responsibilities Bill 2006, Explanatory Memorandum at 9. 781 [2007] 3 NZLR 1. The terms of the New Zealand provision, and the words with which s 7(2) of the Charter commences, follow those of s 1 of the Canadian Charter, which guarantees the rights and freedoms set out in it "subject only to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society." In Hansen the test propounded by the Canadian Supreme Court in R v Oakes782 was followed in the context of what constitutes a "justified limitation"783. The test was later summarised784 as: The objective of the impugned provision must be of sufficient importance to warrant overriding a constitutionally protected right or freedom; it must relate to concerns which are pressing and substantial in a free and democratic society before it can be characterized as sufficiently important. that a sufficiently Assuming important objective has been established, the means chosen to achieve the objective must pass a proportionality test; that is to say they must: be 'rationally connected' to the objective and not be arbitrary, unfair or based on irrational considerations; impair the right or freedom in question as 'little as possible'; and be such that their effects on the limitation of rights and freedoms are proportional to the objective." Section 7(2) of the Charter commences, in terms similar to s 1 of the Canadian Charter, "A human right may be subject under law only to such reasonable limits as can be demonstrably justified in a free and democratic society based on human dignity, equality and freedom" but then goes on to provide "and taking into account all relevant factors including" and then lists the five factors set out above785. 782 [1986] 1 SCR 103. 783 See R v Hansen [2007] 3 NZLR 1 at 28 [64] per Blanchard J, 40 [103] per Tipping J, 69 [203]-[205] per McGrath J and 84-85 [271]-[272] per Anderson J (referring to R v Chaulk [1990] 3 SCR 1303). 784 R v Chaulk [1990] 3 SCR 1303 at 1335-1336. 785 See [523] of these reasons. A detailed comparison of these provisions against the test applied with respect to the general Canadian Charter provision, s 1, is not warranted in this case. It is sufficient to observe that there are some obvious differences which suggest that the test here to be applied is best understood within the confines of what is provided in s 7(2). By way of example, s 7(2) does not speak of a requirement that the right or freedom be impaired "as little as possible". It directs attention in par (e) to whether there are any less restrictive means reasonably available which might meet the statutory objective to which the limiting provision is directed. Paragraphs (a) to (d) of s 7(2), taken together, may comprise another test, or at least the framework for a test, which has regard to the nature (and inferentially the importance) of the right affected on the one hand, and the importance and purpose of the limitation and the extent to which it operates as a limitation of the right. Depending upon the importance attributed to the right, the implication in a test structured this way is that a statutory provision may go too far, much more than is necessary to meet its objective. Whilst the Canadian test might involve some such test in par 2(c) above, it is expressed in a more open- ended way. As will shortly be discussed in connection with the South African Bill of Rights, the tests which are provided in s 7(2) bear a closer resemblance to those already employed by this Court and may have a closer affinity to tests employed in some European jurisdictions. And, whilst s 7(2) does not purport to exclude other tests, there would appear to be real questions about the extent to which other tests would be consistent with it, given the specific test in s 7(2)(e) and the framework provided in the other paragraphs of the sub-section. Likewise there would be a real question about the consistency of s 7(2) with tests utilised in jurisdictions such as Canada. Section 7 of the Charter follows the tests for proportionality set out in the South African Bill of Rights. Section 36(1) of the Bill of Rights provides that the rights to which it refers may be limited by general laws only to the extent that the limitation is "reasonable and justifiable in an open and democratic society based on human dignity, equality and freedom, taking into account all relevant factors". The factors there listed correspond to those in s 7(2) of the Charter. The tests stated in s 7(2) for proportionality are not novel. They are well known to European jurisdictions and have their origin in German law and rule of law concepts786. Kiefel J discussed the principle of proportionality and its 786 Schwarze, European Administrative Law, rev ed (2006) at 710-717. application by this Court in Rowe v Electoral Commissioner787. One test of proportionality is that of "reasonable necessity". It asks whether there are less restrictive statutory measures available to achieve the purpose that is sought to be achieved. This test is stated in s 7(2)(e). It has been applied by this Court principally in cases concerning s 92 of the Constitution, such as North Eastern Dairy Co Ltd v Dairy Industry Authority of NSW788 and more recently Betfair Pty Ltd v Western Australia789. It requires that the alternative, less restrictive, measure which could have been employed is as effective to achieve the statutory purpose in question790. If there are such measures available, it would follow that the measure chosen is excessive and therefore disproportionate. Paragraphs (a) to (d) of s 7(2) together are structured so as to permit another test of proportionality, which is sometimes called "proportionality in the strict sense"791. It too tests whether a legislative restriction is excessive and therefore disproportionate, but it does so by reference to the nature and importance of the right or interest sought to be protected and what is sought to be achieved. Cases involving the implied freedom of communication concerning government and political matters test whether a statutory restriction is excessive, not only by reference to what it seeks to achieve (which necessarily must be within legislative power), but also by reference to the freedom. Thus in Australian Capital Television Pty Ltd v The Commonwealth792 Mason CJ said that only a "compelling justification" would warrant the imposition of a burden on the freedom. In Lange v Australian Broadcasting Corporation793 it was said that the freedom cannot be absolute, but is limited to what is necessary for the effective operation of representative and responsible government. 787 (2010) 85 ALJR 213 at 291-297 [431]-[466]; 273 ALR 1 at 105-112; [2010] HCA 788 (1975) 134 CLR 559 at 616; [1975] HCA 45. 789 (2008) 234 CLR 418 at 477 [102]-[103]; [2008] HCA 11. 790 Uebergang v Australian Wheat Board (1980) 145 CLR 266 at 306; [1980] HCA 40; Rowe v Electoral Commissioner (2010) 85 ALJR 213 at 292 [438] and 296-297 [463]; 273 ALR 1 at 106 and 112. 791 Rowe v Electoral Commissioner (2010) 85 ALJR 213 at 296 [460]; 273 ALR 1 at 792 (1992) 177 CLR 106 at 143; [1992] HCA 45. 793 (1997) 189 CLR 520 at 561; [1997] HCA 25. A statutory object may be important, to the public interest or to the maintenance of the Constitution itself. An assessment of whether a statutory restriction is disproportionate would therefore seem to require both the statutory object and the aspect of the freedom in question to be taken into account in determining whether the restriction is excessive. Indeed it may be that some such approach has informed judgments in this area, without the test of proportionality in the strict sense being expressly stated794. In each of the cases mentioned above795 the requirement of proportionality was applied to a freedom which is the subject of a constitutional guarantee. The rights referred to in the South African Bill of Rights are entrenched within it. The Bill of Rights forms part of the South African Constitution, s 7(3) whereof provides that the rights in the Bill of Rights are subject to the limitations contained or referred to in s 36. Section 36(2) proclaims that no law may limit any such right, except as provided in sub-s (1) or some other provision of the Constitution. Any law which is not so justified is to be the subject of a declaration made by a court796. It is of interest to observe that the courts of South Africa may suspend a declaration for a period "to allow the competent authority to correct the defect."797 The idea of a declaration made under s 36(2) of the Charter and notified to the Attorney-General and thence the relevant Minister may have been drawn from this provision, but the Attorney-General and the Minister are not subject to constitutional obligations such as those provided in the South African Constitution. It may be seen that aspects of the South African Bill of Rights have been influential in the drafting of the Charter, but the South African provisions have not been translated to the Charter. The Charter is not a constitutional document. 794 See Nationwide News Pty Ltd v Wills (1992) 177 CLR 1 at 34 per Mason CJ, 57 per Brennan J, 78-79 per Deane and Toohey JJ and 101 per McHugh J; [1992] HCA 46; Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 143-144 per Mason CJ, 167 per Brennan J and 174 per Deane and 795 See [556] of these reasons. 796 Constitution of the Republic of South Africa, s 172(1)(a). An order of constitutional invalidity (as distinct from a declaration under s 172(1)) made by a court authorised to do so under s 172(2)(a) requires confirmation by the Constitutional Court: s 172(2)(b). 797 Constitution of the Republic of South Africa, s 172(1)(b)(ii). The Victorian Parliament has not purported to bind its successors in relation to the enactment of legislation consistent with the Charter. Indeed, the provisions of the Charter itself relating to legislation incompatible with its terms indicate a contrary intention. The rights contained within it are not given constitutional status and the Supreme Court is not given the power to declare invalid legislation which is inconsistent with a Charter right. The authorities to date do not suggest that the Supreme Court itself has the power to declare legislation invalid for excess of power in the sense that it is manifestly disproportionate to its purpose. In Australia the States are regarded as having the legislative powers that the Parliament of the United Kingdom might have exercised798. In Union Steamship Co of Australia Pty Ltd v King799 it was said of the power to make laws for the peace, welfare and good government of a territory800 that, just as is the case in the United Kingdom, the exercise of the legislative power of the New South Wales Parliament is not subject to review on the ground that a law does not secure the welfare and the public interest. It has been suggested that some common law rights might be "so deep" that Parliament cannot override them801. This question was "identified but not explored" in Union Steamship802. The Charter draws attention to another question. It is whether the rule of law, upon which the principle of proportionality is founded, may itself imply a limitation. This is a large question concerning the limits, if any, which the rule may effect upon the grant of legislative power to State parliaments. It may also involve consideration of the Australian Constitution. The Constitution does not contain express guarantees to establish individual rights of the kind set out in the Fourteenth Amendment to the United States Constitution, which guarantees would have restricted State legislatures803. That was left to the rule of 798 Australia Act 1986 (Cth), s 2(2); Australia Act 1986 (UK), s 2(2); see also Powell v Apollo Candle Company (1885) 10 App Cas 282. 799 (1988) 166 CLR 1 at 10; [1988] HCA 55. 800 Section 16 of the Constitution Act 1975 (Vic) refers to "power to make laws in and for Victoria in all cases whatsoever." 801 Fraser v State Services Commission [1984] 1 NZLR 116 at 121; Taylor v New Zealand Poultry Board [1984] 1 NZLR 394 at 398. 802 Durham Holdings Pty Ltd v New South Wales (2001) 205 CLR 399 at 410 [14]; [2001] HCA 7. 803 Kruger v The Commonwealth (1997) 190 CLR 1 at 61 per Dawson J; [1997] HCA law804, which Dixon J said, in Australian Communist Party v The Commonwealth, is an assumption in accordance with which the Constitution is framed805. These were not matters which were ventilated on this appeal and it is not appropriate to further consider them. Whilst the terms of s 7(2) suggest that some consequence will follow a finding of an excessive limitation of a Charter right, that is not the case. The Supreme Court is not able to enforce a Charter right in the face of a statute which disproportionately limits or restricts the right and may not declare such a statute invalid in support of such a right. The power of the Supreme Court is limited to the interpretation of the statute in light of the Charter and to the making of a declaration β that is, a statement β of inconsistent interpretation which is not legally binding, where a provision cannot be construed consistently with a Charter right. The question is whether s 7(2) is part of that process, or has some other part to play in the framework of the Charter. In this regard the Charter must be construed on the basis that its provisions are intended to give effect to harmonious goals806. The key questions then are whether and how ss 7(2), 32(1) and 36(2) are intended to operate together. The operation of ss 7(2), 32(1) and 36(2) Section 32 does not state a test of construction which differs from the approach ordinarily undertaken by courts towards statutes. Its terms identify an approach of interpretation which has regard to the terms and to the purpose of the statutory provision in question, as previously discussed807. The statutory direction in s 32(1), that statutory provisions "must be interpreted in a way that is compatible with human rights", is qualified by the recognition that such an interpretation is to be effected only "[s]o far as it is possible to do so consistently with their purpose". This statutory direction seeks to ensure that Charter rights 804 Official Record of the Debates of the Australasian Federal Convention, (Melbourne), 8 February 1898 at 664-691. 805 (1951) 83 CLR 1 at 193; [1951] HCA 5; see also Dixon, "The Common Law as an Ultimate Constitutional Foundation", in Jesting Pilate, (1965) 203. See also Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476 at 492 [31] per Gleeson CJ and 513 [103] per Gaudron, McHugh, Gummow, Kirby and Hayne JJ; [2003] HCA 2; South Australia v Totani (2010) 242 CLR 1 at 155-156 [423] per Crennan and Bell JJ; [2010] HCA 39. 806 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 807 See [540] of these reasons. are kept in mind when a statute is construed. The direction is not, strictly speaking, necessary. In the ordinary course of construction regard should be had to other existing laws808. The Charter forms part of the context in which a statute is to be construed. It will be recalled that Lord Hoffmann viewed the Convention in a similar way in Wilkinson809. The process of construction commences with an essential examination of the context of the provisions being construed810. Where it is possible, consistently with a statute's purpose, s 32(1) requires that all statutory provisions are to be read conformably with Charter rights. Section 32(3)(a) acknowledges that this may not be possible in all cases, by providing that s 32(1) does not affect the validity of an Act or a provision of an Act which is incompatible with a human right. It cannot therefore be said that s 32(1) requires the language of a section to be strained to effect consistency with the Charter. When a provision cannot be construed consistently with the Charter, the provision stands. McGrath J's observations in Hansen811, in connection with s 4 of the New Zealand Bill of Rights Act812, are apposite to s 32(3)(a). They are that the effect of such a provision is that any inconsistent legislation prevails over a Bill of Rights document. Such a provision reaffirms the role of the legislature and makes clear that a court's role in ascertaining the meaning of the legislation remains one of interpretation. Under s 36(1), where the Supreme Court has determined the question of the interpretation of a statutory provision in the context of the Charter, it will be in a position, at the conclusion of that process, to determine whether the 808 CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408; [1997] HCA 2. 809 [2005] 1 WLR 1718 at 1723 [17]; [2006] 1 All ER 529 at 535. 810 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 811 [2007] 3 NZLR 1 at 62 [179]. 812 "No court shall, in relation to any enactment β¦ hold any provision of the enactment to be impliedly repealed or revoked, or to be in any way invalid or ineffective; or decline to apply any provision of the enactment β by reason only that the provision is inconsistent with any provision of this Bill of Rights." provision is inconsistent with a Charter right. It will be in a position to determine the effect of the statutory provision on the Charter right and whether it limits or restricts it such as to be inconsistent with the existence of the right. At this point the Supreme Court is therefore in a position to make a declaration under s 36(2), should it choose to do so. It is notable that the declaration is described in s 36 as one of "inconsistent interpretation" to be made where a statutory provision cannot be interpreted consistently with a human right. This description is no doubt intended to tie the declaration to the process of interpretation to which s 32(1) refers. However, such a description cannot be allowed to mask the true nature of any enquiry which precedes a declaration. The approach of the Court of Appeal raises the question whether obtaining an answer to the question posed by s 7(2) is an essential step before the making of a declaration. It is therefore necessary to consider what is involved under s 7(2) in order to determine its connection, if any, to the interpretation task to which s 32(1) refers and to the making of a declaration under s 36(2). The foundations for the enquiry under s 7(2) are an identified inconsistency between a statutory provision and a Charter right and an understanding of the extent of the restriction or limit giving rise to the inconsistency. Section 7(2) then enquires whether these restrictions or limits are justified as reasonable, having regard to the tests of proportionality there provided. Thus, an understanding of the extent of the effects of the statutory provision is essential to the enquiry under s 7(2). However, that enquiry involves much more, as will be explained. Moreover the question to which s 7(2) is directed, namely, whether a reasonable legislative limitation upon a Charter right is demonstrably justified, is a distinct and separate question from one as to the meaning of a provision, which is ascertained by a process of statutory construction. Paragraph (e) of s 7(2) looks to the effect of a statutory limitation on a Charter right and enquires whether there is a reasonably available alternative, inferentially one which would be less restrictive in its effect. The other paragraphs of the sub-section are also directed to the effect of the statutory provision on a Charter right. The framework there provided suggests an enquiry as to whether, having regard to the nature of the right, the extent of the limitation is necessary in order to achieve the statutory purpose or objective. In this process the importance of that purpose may also be taken into account, although it may in some cases prove a task of some difficulty for a court. On this test, purpose assumes importance, not as part of a process of construing the statutory provision, but as part of an enquiry as to whether there is a justification for the limitation it effects on a Charter right having regard to the statutory purpose. If it is concluded, after the application of the tests in s 7(2), that there are no other reasonably available alternative measures or that the statutory provision effecting the limitation cannot be said to be excessive or disproportionate, having regard to the nature of the right and the importance of the statutory purpose, then the limits imposed by the statutory provision in question will be justified. What then follows from such a conclusion, or the alternative conclusion that the provision is not justified? Section 7(2) is an acknowledgement that Charter rights are not absolute or always completely consistent with each other. So much is confirmed by the Explanatory Memorandum to the Bill which introduced the Charter813. It would appear to follow that if a limitation or restriction effected by a statutory provision is demonstrably justified, a Charter right is to be read and understood as subject to such a limitation or restriction. Section 7(2) may therefore be said to have something of an interpretive effect directed to the content of the Charter right rather than the statutory provision in question, which remains unchanged. Section 7(2) has no bearing upon the meaning and effect of a statutory provision, which are derived by a process of construction, not any enquiry as to justification. However, s 7(2) may produce a conclusion that a statutory provision restricts or limits a Charter right but is nevertheless compatible with it because the Charter allows the right to be viewed as reduced in a case where the limitation is justified. It may be said that the Charter right has been rendered compatible with the statutory provision following this adjustment. It is possible that a conclusion is reached that a statutory provision operates inconsistently with a Charter right. By the process undertaken pursuant to s 7(2) it might then be concluded that there may nevertheless be compatibility between the provision and the Charter right. But it will readily be apparent that nothing follows from such a conclusion so far as concerns the interpretation of the statutory provision. Likewise nothing follows if a conclusion of incompatibility is reached under s 7(2). It cannot spell the invalidity of the provision in question, for the reasons earlier given. And it cannot affect the interpretive process mandated under s 32(1). Despite the word "compatible" appearing in s 32(1) (and "incompatible" in s 32(3)) it cannot be concluded that the enquiry and conclusion reached in s 7(2) informs the process to be undertaken by the courts under s 32(1). If some link between s 7(2) and s 32(1) were thought to be created by the use of such terms in s 32, such a result has not been achieved: (a) because the process referred to in s 32(1) is clearly one of interpretation in the ordinary way; and (b) because s 7(2) contains no method appropriate to the ascertainment of the meaning and effect of a statutory provision. The notion of incompatibility 813 Victoria, Legislative Assembly, Charter of Human Rights and Responsibilities Bill 2006, Explanatory Memorandum at 7 and 9. inherent in s 32(1) can only refer to an inconsistency found by a process of interpretation and no more. And so far as concerns the Supreme Court's role under s 36(2), its terms confirm that the concern of the Court is only with the question of whether a provision cannot be "interpreted consistently" with a human right. There is no suggestion in s 36(2) that the test provided by s 7(2) is to play any part in the making of a declaration. No attempt is made to link it with s 7(2), no doubt for good reason. It is not possible to read s 7(2) so that it operates with s 32(1) or s 36(2). It is not necessary to determine whether it has any other consequences, although it is difficult to discern that it might. It might operate as a statement of principle directed to the legislature, but it forms no part of the role of the courts in interpreting a statutory provision in connection with the Charter or the making of a declaration by the Supreme Court. It follows that neither the appellant's methodology nor that of the Court of Appeal was correct in their application of s 7(2). The appellant's method required s 32(1) to be applied after consideration of s 7(2)814. However, such an approach is not warranted given the terms of the Charter815. The Court of Appeal clearly considered that it was necessary to determine the question under s 7(2) and to determine if s 5 of the Drugs Act was incompatible before determining whether a declaration should be made. It correctly identified that s 7(2) might give an answer to a question of compatibility, but s 36(2) does not require that question to be addressed. By s 36(2) a declaration, if it is to be made, follows upon a conclusion by a court that a statutory provision cannot be interpreted consistently with a human right. The fact that s 7(2) is divorced from the process of determining inconsistency is a factor in favour of the validity of s 36(2), as will be discussed later in these reasons. The construction of s 5 of the Drugs Act The purpose of s 5 of the Drugs Act is to facilitate the prosecution of certain drug offences. It seeks to achieve that purpose by creating the presumption of possession which an accused person is required to rebut to a legal standard of proof. The appellant submitted that that purpose can be achieved by reading s 5 as requiring only the discharge of an evidentiary onus in order to rebut the presumption. It may be observed that that result would not completely remove all limitations upon, or inconsistency with, the right in s 25(1) of the Charter. It would serve only to reduce them. 814 Following the approach in R v Hansen [2007] 3 NZLR 1 at 65 [189]. 815 See [550]-[554] of these reasons. Reliance was placed by the appellant, in this regard, upon a concession made in argument in the Court of Appeal by the Chief Crown Prosecutor, who appeared for the Crown, that "a change from a persuasive onus to an evidentiary onus would make little difference" to successfully prosecuting drug trafficking offences816. On this appeal the Chief Crown Prosecutor informed the Court that the practical effect of s 5 is to force an accused person to give evidence. Clearly that result could be achieved regardless of the degree of proof required to rebut the presumption. The prospect that a statutory purpose may be achieved by other means, which may have a less restrictive effect upon the right in s 25(1) of the Charter, is clearly relevant to the test of proportionality under s 7(2)(e). It is not apposite to a process of construction, which is concerned with the ascertainment of the meaning of a statute. The ascertainment of meaning does not involve the substitution of statutory provisions which are unambiguously expressed. In Wentworth Securities Ltd v Jones817 Lord Diplock stated certain conditions as necessary to be fulfilled before a court, construing legislation, could read words into the text818. However, they were directed to correcting a defect or omission which had been overlooked by Parliament. Moreover, as Kirby J pointed out in James Hardie & Coy Pty Ltd v Seltsam Pty Ltd819, his Lordship made it plain that that possibility only arises "if the application of the literal or grammatical meaning would lead to a result which would defeat the clear purpose of a statute". It could not be suggested that the purpose of s 5 of the Drugs Act is not achieved by imposing a legal onus. It certainly could not be said that the method of disproving the fact of possession as stated was the result of any inadvertence on the part of Parliament. The approach suggested by the appellant is simply to alter the words to achieve a different outcome. Such an approach is not warranted by the requirements of the process of construction. The Court of Appeal was correct to observe that to do so would involve something approaching a legislative function. It is not possible to read s 5 of the Drugs Act consistently with s 25(1) of the Charter. 816 R v Momcilovic (2010) 25 VR 436 at 475-476 [145]. 817 [1980] AC 74 at 105. 818 Followed in Australia: see Newcastle City Council v GIO General Ltd (1997) 191 CLR 85 at 113 per McHugh J; [1997] HCA 53. 819 (1998) 196 CLR 53 at 81 [73]; [1998] HCA 78. The making of a declaration of inconsistency It has earlier been observed that the declaration, for which s 36(2) of the Charter provides, is not a declaratory order granting relief820. Insofar as s 36(2) suggests a declaratory order, the word "declaration" is a misdescription, as is the statement of the object in s 1(2)(e), namely, "conferring jurisdiction" upon the Supreme Court to make a declaration of inconsistency. When the whole of s 36 is considered it is clear that the Supreme Court does not have jurisdiction to determine the question of inconsistency. Rather, the Supreme Court is empowered to make a declaration consequent upon exercising jurisdiction otherwise conferred, in this case, in respect of s 32. The discretionary power to make a declaratory order was described by this Court in Ainsworth v Criminal Justice Commission821 as "confined by the considerations which mark out the boundaries of judicial power." A declaration under s 36(2) is not directed to the determination of a legal controversy and has no binding effect. It is not an exercise of judicial power. The declaration of inconsistency for which s 36(2) provides is in the nature of a statement, made by the Supreme Court following upon its interpretation of a statutory provision in the context of the Charter, that an inconsistency between the two statutes is evident, and of which the Attorney-General is notified822. In that sense it constitutes a conclusion but not an advisory opinion of the kind with which this Court was concerned in In re Judiciary and Navigation Acts823 and which the Court was required by those Acts to give. It is a formal conclusion arising out of the exercise undertaken by the Supreme Court in respect of s 32(1). That exercise under s 32(1) is integral to the resolution of the "matter" between the appellant and the first respondent. Standing alone, s 36 could not give rise to any "matter" within the meaning of Ch III of the Constitution. The Attorney-General relied upon the fact that, pursuant to the Charter, a declaration is to be made in the course of proceedings where a question of interpretation concerning the Charter is raised, the resolution of which might affect an accused's rights or liabilities. But neither the placement by the legislature of the declaration within the course of the proceedings, nor the joinder 820 See [529] and [535] of these reasons. 821 (1992) 175 CLR 564 at 582; [1992] HCA 10. 822 Charter of Human Rights and Responsibilities Act 2006, s 36(6). 823 (1921) 29 CLR 257 at 266-267; [1921] HCA 20. of the Attorney-General and the Commission to the proceedings, can clothe the declaration made by the Court of Appeal with the qualities of a declaratory order made in connection with the "matter" which was the subject of the trial of the appellant. The interpretation of s 5 of the Drugs Act formed part of that matter, for it concerned questions as to the essential elements of the offence with which the appellant was charged and the obligations of the parties to prove those elements. It concerned the right of the appellant to require the Crown to prove her possession of the drugs for the purpose of sale. The declaration involves a separate question, as to whether s 5 of the Drugs Act is compatible with s 25(1) of the Charter. It may be said that the enquiry into that question has a connection to the matter the subject of the appellant's trial, or that it is incidental or ancillary to it. The determination of the question of inconsistency with the Charter and a declaration giving expression to that determination does not establish any right, duty or liability824. The purposes of a declaration do not involve the administration of the law, but rather its possible alteration. A statement or conclusion, made incidentally to the exercise of judicial power, which induces a change in legislation, is not a judicial decision825. The consequences which are produced by the declaration are largely steps which the Charter requires the Attorney-General or the relevant Minister to take, once the inconsistency has been notified. It is not necessary to determine the extent of those obligations and whether they are of such a nature as to be enforceable. For present purposes it may be observed that they are not consequences which follow from the determination of the matter involving the appellant. This is not to say that it may not be possible for a law to be framed in such a way that a "matter" could arise for which a declaration was the legal consequence: for example, if it were binding between the parties. But that position does not pertain with respect to the Charter. The discussion in Mellifont v Attorney-General (Q)826 provides assistance. There, provision was made for the referral by the Attorney-General of the State of Queensland of a point of law arising in a criminal trial to the Court of Criminal Appeal for determination and opinion, even though the proceedings had resulted in an acquittal. But as this Court explained, the answer given was not 824 In re Judiciary and Navigation Acts (1921) 29 CLR 257 at 265. 825 R v Davison (1954) 90 CLR 353 at 369-370; [1954] HCA 46. 826 (1991) 173 CLR 289; [1991] HCA 53. divorced from an attempt to administer the law827. The answers provided by the Court of Criminal Appeal constituted an important step in the judicial determination of the rights and liabilities of the parties in the trial of the accused828. The effect of the decision on the reference was to correct an error of law in the trial judge's ruling in those proceedings829. The exercise of judicial power by the Court of Appeal in proceedings concerning the interpretation of s 5 of the Drugs Act placed that Court in a position to identify any inconsistency between s 5 of the Drugs Act and s 25(1) of the Charter, and to draw a conclusion in respect of that inconsistency. That connection is not sufficient to render the power to make a declaration an exercise of judicial power, but it serves to show that the making of a declaration is a function incidental to an exercise of judicial power. This distinguishes such a function from the act of making a declaratory order about a hypothetical matter, which has been observed to be beyond the boundaries of judicial power830. In this regard it is important to recall that the declaration under s 36(2) does not require more than a statement or conclusion as to the interpretation of the Charter and the statutory provision in question. In particular the Supreme Court is not required, preparatory to a declaration, to undertake the tests under s 7(2). If that process had been required it may well have been said that the Court was being asked to consider an abstract question of law831, as to the justification of s 5 of the Drugs Act tested by reference to its proportionality pursuant to s 7(2), which has no legal consequence. However, such a question is divorced from the question of statutory construction to which s 32 refers and which the declaration under s 36(2) is intended to follow. In re Judiciary and Navigation Acts832 did not hold that functions which are merely incidental to an exercise of judicial power cannot be given to a court 827 Mellifont v Attorney-General (Q) (1991) 173 CLR 289 at 303, referring to In re Judiciary and Navigation Acts (1921) 29 CLR 257 at 266-267. 828 Mellifont v Attorney-General (Q) (1991) 173 CLR 289 at 303. 829 Mellifont v Attorney-General (Q) (1991) 173 CLR 289 at 305. 830 Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 582. 831 In re Judiciary and Navigation Acts (1921) 29 CLR 257 at 267. 832 (1921) 29 CLR 257. under federal law833. In that case the function in question was arguably of a judicial character, but could not be exercised because it was not part of the judicial power of the Commonwealth. In R v Davison, Dixon CJ and McTiernan J observed that there are many functions or duties that are not necessarily of a judicial character but which may nevertheless be performed judicially "whether because they are incidental to the exercise of judicial power or because they are proper subjects of its exercise"834. The description of a function as incidental to the exercise of judicial power may be thought largely to answer any question as to its compatibility with the role of the judge or the court undertaking the function. Nevertheless, questions were raised in argument as to the application of the principle identified in Kable v Director of Public Prosecutions (NSW)835 to the declaration and it is necessary to turn to them. The power of State legislatures to make law has been discussed earlier in these reasons. Kable holds that there are limits to that power respecting State courts. In Thomas v Mowbray, Gummow and Crennan JJ said that Ch III of the Constitution "gives practical effect to the assumption of the rule of law upon which the Constitution depends for its efficacy"836. It is not within the power of a State legislature to enact a law conferring upon a State court, which may exercise federal jurisdiction, functions incompatible with the State court's role as a repository of that jurisdiction. In particular, a State legislature cannot confer on a State court a function which substantially impairs its institutional integrity837. The prosecution of the appellant in the County Court had an additional federal element, arising from her status as a resident of Queensland at the time of 833 As observed by Latham CJ in R v Federal Court of Bankruptcy; Ex parte Lowenstein (1938) 59 CLR 556 at 565-566; [1938] HCA 10. 834 (1954) 90 CLR 353 at 369-370; see also Queen Victoria Memorial Hospital v Thornton (1953) 87 CLR 144 at 151; [1953] HCA 11; R v Joske; Ex parte Shop Distributive and Allied Employees' Association (1976) 135 CLR 194 at 216; [1976] HCA 48. 835 (1996) 189 CLR 51. 836 (2007) 233 CLR 307 at 342 [61]; [2007] HCA 33. 837 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 96, 103, 116-119 and 127-128. her trial. The "matter" involving the appellant was between a State and a resident of another State, and the County Court therefore exercised federal jurisdiction838. In Kable it was said that the nature of some functions may be such as to be so incompatible with the exercise of the judicial power of the Commonwealth that the integrity of the judiciary may thereby be diminished839. State courts have a role and existence as part of the integrated judicial system under the Constitution840 which transcends their status as State courts841. Whilst the limitation on State legislative power respecting courts which exercise federal jurisdiction, discussed in Kable, derives from a source different from that limitation discussed in R v Kirby; Ex parte Boilermakers' Society of Australia842, in both cases the limitation is derived from the necessity to ensure the integrity of the judicial process and the integrity of the courts. The requirement of incompatibility in both areas of this constitutional discourse was discussed in Wainohu v New South Wales843. At issue in Kable was legislation which required the making of a preventive order directed to a named individual. In South Australia v Totani844 the legislation required the Magistrates Court of South Australia on application by the Commissioner of Police to make a control order regarding an individual if the State Attorney-General had made a declaration in respect of an organisation of which he or she was a member. The legislation was held to be invalid because the legislature could not, consistently with Ch III, enlist the Court to give effect to legislative and executive policy. Section 36(2) of the Charter does not oblige the Supreme Court to make a declaration. Whether it does so is a discretionary matter for the decision of the 838 Sections 75(iv) and 77(iii) of the Constitution; Judiciary Act 1903 (Cth), s 68(1). 839 (1996) 189 CLR 51 at 98 per Toohey J, 103 per Gaudron J and 116 per McHugh J. 840 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 102-103 per Gaudron J, 110 per McHugh J and 139-140 per Gummow J. 841 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 103 per 842 (1956) 94 CLR 254; [1956] HCA 10. 843 (2011) 85 ALJR 746 at 763-766 [44]-[53] per French CJ and Kiefel J; 278 ALR 1 at 19-23; [2011] HCA 24. 844 (2010) 242 CLR 1. Court. The only requirement imposed on the Court is to ensure notice is given if a declaration is in contemplation845 and, if one is made, to cause a copy of the declaration to be given to the Attorney-General846. But this is not to enlist the Court to give effect to any pre-determined conclusion on the part of the legislature or the executive, as was the case in Totani. The making of a declaration is not a function having a close connection with the executive or the legislature. It is made independently of any "instruction, advice or wish of the Legislature or the Executive Government"847. The declaration here was made by the Court of Appeal (albeit erroneously as will shortly be explained), as the result of its own, independent, assessment of s 5 of the Drugs Act, read with the Charter. The independence of that assessment, as relevant to the making of the declaration, is not affected by the Court having undertaken the unnecessary enquiry under s 7(2) of the Charter. Independence of the courts is integral to their institutional integrity. Judgments of this Court confirm the importance of the perception of a judge's role in this regard. In connection with functions which do not involve exercising judicial power, it was held in Wilson v Minister for Aboriginal and Torres Strait Islander Affairs that legislation which required a federal judge, appointed by the Minister, to report to the Minister was invalid. Gaudron J there said that "impartiality and the appearance of impartiality are defining features of judicial power."848 Her Honour went on to observe that a court exercising judicial power must "be and be seen to be completely independent" of the legislative and executive branches of government849. The need for independence and impartiality, and the separation of the judiciary and the other arms of government, also underlie the requirement of a "matter" in s 76 of the Constitution which operates to limit the circumstances in which judicial power 845 Charter of Human Rights and Responsibilities Act 2006, s 36(3) and (4). 846 Charter of Human Rights and Responsibilities Act 2006, s 36(6). 847 Wilson v Minister for Aboriginal and Torres Strait Islander Affairs (1996) 189 CLR 1 at 17; [1996] HCA 18. 848 Wilson v Minister for Aboriginal and Torres Strait Islander Affairs (1996) 189 CLR 1 at 25. 849 Wilson v Minister for Aboriginal and Torres Strait Islander Affairs (1996) 189 CLR 1 at 25; see also Hilton v Wells (1985) 157 CLR 57 at 83-84 per Mason and Deane JJ; [1985] HCA 16; Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 591 [16] per Gleeson CJ and 597 [34] and 601-602 [43]-[44] per McHugh J; [2004] HCA 46. can be exercised850. Closer to the subject at hand, and in connection with the application of Kable, Gummow J in Fardon v Attorney-General (Qld) stated that it was preferable to view a perception which may undermine public confidence as an indicator, but not the touchstone, of invalidity. The touchstone, his Honour said, is the institutional integrity of the court851. In some cases it may be difficult to view the way a court is perceived as unconnected to its integrity as an institution. Whilst the judgments in Totani confirmed that the practical operation of the legislation there was to enlist a judge to effect executive and legislative policy, the legislation also, and misleadingly, gave the appearance of the Magistrates Court participating in the pursuit of the objectives of the Act in question, whilst giving effect to that executive and legislative policy852. Problems created by the appearance of a want of independence were evident in Wainohu, where the statute denied the duty of a judge to give reasons, but at the same time created an apparent connection between the non-judicial function conferred and the exercise of jurisdiction by a Supreme Court judge. It was there said that853: "The appearance of a judge making a declaration is thereby created while the giving of reasons, a hallmark of that office, is denied. These features cannot but affect perceptions of the role of a judge of the court". The process by which the Court of Appeal here reached its conclusion of inconsistency cannot be said to involve functions which are incompatible with, or antithetical to, judicial power. The process involves an ordinary interpretive task. The content of the declaration cannot be a cause for concern. It merely records a finding of inconsistency between s 5 of the Drugs Act and s 25(1) of the Charter. It does not answer a question directed to the Court, as to the validity of legislation, as was the case in In re Judiciary and Navigation Acts. The Court does not purport to advise as to law reform. It is not unknown for judges to incidentally pass comments upon conclusions they have reached about defects in legislation in the course of their reasons854. Doing so in the course of a 850 Stellios, The Federal Judicature: Chapter III of the Constitution, (2010) at 124 851 (2004) 223 CLR 575 at 618 [102]. 852 South Australia v Totani (2010) 242 CLR 1 at 172-173 [480] per Kiefel J; see also at 52 [82] per French CJ. 853 Wainohu v New South Wales (2011) 85 ALJR 746 at 769 [68]; 278 ALR 1 at 28. 854 See for example Cunliffe v The Commonwealth (1994) 182 CLR 272 at 304-305 per Mason CJ; [1994] HCA 44; Georgiadis v Australian and Overseas (Footnote continues on next page) permissible exercise of judicial power is "a function properly regarded as incidental to the exercise of the power."855 However, that function is not a function which, if it were undertaken independently of the exercise of "a principal judicial duty"856, might be said to "belong to an administrator."857 The form of the process under s 36(2) does not alter that analysis. The argument for the invalidity of s 36 is about perceptions. The matters in this case which are relevant to the appearance of the Supreme Court as independent of the executive and legislative branches of the Victorian State Government are (a) that the non-judicial function of making a declaration is embellished by being styled a "declaration" to give the appearance of an order of the Court; and (b) that the legislation requires a copy of the declaration to be given to the Attorney-General. The first-mentioned feature calls to mind what was said in Mistretta v United States858, namely, that the reputation of the judicial branch may not be borrowed by the legislative and executive branches "to cloak their work in the neutral colors of judicial action."859 But that statement was directed to a legislative or executive function which was disguised by use of a court's processes. Here the declaration, whilst not dispositive because it is made only incidentally with respect to a matter, does not implement any policy or action of the executive or the legislature. Putting to one side the description given to it as a "declaration", it is readily apparent that it is no more than a statement made by the Supreme Court as to an apparent inconsistency. So far as it concerns the executive and the legislature, the statement serves only to draw attention to that Telecommunications Corporation (1994) 179 CLR 297 at 308 per Mason CJ, Deane and Gaudron JJ; [1994] HCA 6; Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476 at 538 [176] per Callinan J. 855 Wilson v Minister for Aboriginal and Torres Strait Islander Affairs (1996) 189 CLR 1 at 20, fn 68. 856 Steele v Defence Forces Retirement Benefits Board (1955) 92 CLR 177 at 187; [1955] HCA 34. 857 Queen Victoria Memorial Hospital v Thornton (1953) 87 CLR 144 at 151; see also R v Davison (1954) 90 CLR 353 at 368. 858 488 US 361 at 407 (1989) referred to in Grollo v Palmer (1995) 184 CLR 348 at 366, 377 and 392; [1995] HCA 26; Wilson v Minister for Aboriginal and Torres Strait Islander Affairs (1996) 189 CLR 1 at 9; and Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 615 [91]. 859 See also South Australia v Totani (2010) 242 CLR 1 at 172 [479] per Kiefel J. effect. The steps, if any, which are proposed by the relevant Minister to change the law do not involve the Court. The requirements of notification are the only mandatory aspects of the declaration process. Too much should not be read into these obligations, given that it is the Court which decides, in the first place, whether to make a declaration. In doing so it is not responsive to any legislative command. These requirements and the declaration itself are largely innocuous so far as concerns the Supreme Court. Their principal purpose is to set in train a process whereby the relevant Minister considers what should be done by way of legislative change. No incompatibility with the institutional integrity of the Supreme Court is disclosed by reference to these matters. Of greater concern regarding the making of a declaration is the role of the County Court and the Supreme Court with respect to the appellant's trial. The concern arises in this way. There is little doubt that the Charter may serve to raise the expectations of an accused as to the recognition and enforcement of the rights to which it refers. The reality is otherwise. The trial judge in the County Court was, as the Court of Appeal held, obliged to give effect to s 5 of the Drugs Act if s 5 applied to s 71AC, under which the appellant was charged. If it did apply neither the County Court nor the Supreme Court had the power to give primacy and effect to a Charter right. The making of a declaration placed the Court of Appeal in a position where it acknowledged that the trial process conducted by the County Court involved a denial of the appellant's Charter rights even though it upheld the validity of the conviction. In such a circumstance not only does a declaration serve no useful purpose to the appellant, it is not appropriate that it be made. It may be that, in the context of a criminal trial proceeding, a declaration of inconsistency will rarely be appropriate. Undermining a conviction is a serious consideration. This does not, however, mean that the declaration will have no utility in other spheres. More importantly, it does not require a conclusion that the making of a declaration will impair the institutional integrity of the courts. Rather, in the sphere of criminal law, prudence dictates that a declaration be withheld. Putting aside the prospect of undermining a conviction in this case, there is another, more fundamental, reason why the declaration should not have been made. The reason is that s 5 does not apply to s 71AC of the Drugs Act, with the result that the trial miscarried. Sections 5 and 71AC of the Drugs Act The direction given by the trial judge on the appellant's trial with respect to proof of possession applied what was said by the Full Court in R v Clarke and Johnstone860. The Court considered the requirements of s 5 of the Drugs Act as a separate question arising in connection with the offence of trafficking in a large commercial quantity of a drug of dependence under s 71. It held that s 5 requires the prosecution to prove occupation of the land on which cannabis was grown or the other indicia referred to in s 5. Section 5 then operated to deem the accused in possession of the drugs unless he proved he was not in possession of them. He could do so only by proving that he had no knowledge of the drugs, on the balance of probabilities861. The opinion of the Full Court as to the extent of the onus does not accord with the terms of s 5, but this aspect of the decision in Clarke and Johnstone does not assume importance for present purposes. More to the point is the approach of the Court, in failing first to consider the terms of the offence charged and the evidentiary provisions which were provided with respect to it. Had it done so it would have been evident that s 5 could not be applied to the offence of trafficking. The offence under s 71AC, read with that part of the definition of "traffick" in s 70(1) presently relevant, is trafficking in a drug of dependence by having that drug in "possession for sale". The expression "possession for sale" is a compound one, requiring proof of possession together with the intention or purpose to sell. Section 73(2) may facilitate the prosecution's proof of trafficking. It provides that where a traffickable quantity of a drug is found in a person's possession, the possession of that drug is prima facie evidence of trafficking by that person in the drug. The possession to which s 73(2) is directed, consistent with the statement of offence, is possession for sale. As Callaway JA observed in R v Tragear862, s 73(2) is only prima facie evidence of mens rea. The burden of proving the requirements of an accused's possession of a drug of dependence for the purpose of sale remains on the prosecution. In Clarke and Johnstone there may have been undue focus upon s 5, and less attention directed to the composite nature of the offence of trafficking, because it was common ground at trial that whoever possessed the cannabis growing on the property was obviously growing it for sale. In those circumstances it was not considered necessary for the trial judge to "explain the 861 R v Clarke and Johnstone [1986] VR 643 at 648-649 and 659. 862 (2003) 9 VR 107 at 117 [43]-[44]. evidentiary effect of s 73(2) where no evidence suggested that the cannabis was possessed other than for sale"863. The requirement of proof by the prosecution of "possession for sale" cannot be met by treating possession as separated from its purpose, and then as subject to the deeming provision in s 5 of the Drugs Act. Section 5 is clearly applicable to the offence of possession simpliciter, which is dealt with in s 73(1), and to other offences in the Drugs Act. However, it cannot apply to the offence of trafficking presently under consideration, which is expressed as a compound notion. The only evidentiary provision which may apply is in s 73(2). This construction denies the operation of the presumption of possession in s 5 as limiting the right to which s 25(1) of the Charter refers and therefore achieves consistency with the Charter. However, it is a construction which is arrived at by the application of the ordinary rules of construction. The conclusion reached by the process of construction, that s 5 does not apply to an offence of trafficking, means that the direction given by the trial judge to the jury was in error. It follows that the Court of Appeal should have granted the appellant leave to appeal from conviction on this ground and allowed the appeal. Section 109 of the Constitution As explained at the outset of these reasons, the appellant was found guilty of one count of trafficking in a drug of dependence, namely methylamphetamine, contrary to s 71AC of the Drugs Act. As the verdict was unanimous, the provisions of s 46 of the Juries Act 2000 (Vic), permitting a majority verdict, were not invoked. Possession of methamphetamine, which is the same substance as methylamphetamine, is also regulated under Pt 9.1 of the Commonwealth Code (ss 300.1-314.6), headed "Serious drug offences". A person who "traffics" in a substance which is a controlled drug, such as methamphetamine864, commits an offence under s 302.4. No issue was raised by the appellant at trial or in the Court of Appeal that, by reason of the provisions of the Commonwealth Code, s 109 of the 863 R v Clarke and Johnstone [1986] VR 643 at 660. 864 The Commonwealth Code, ss 300.2 (par (a) of definition of "controlled drug") and Constitution made inoperative865 the State law under which the appellant was convicted. The appellant was granted leave to amend her notice of appeal to include an attack on the validity of that State law based on the operation of s 109 of the Constitution. As explained earlier866, that additional ground of appeal was critical in respect of the remedies sought by the appellant. Part 9.1 was inserted into the Commonwealth Code by the Law and Justice Legislation Amendment (Serious Drug Offences and Other Measures) Act 2005 (Cth) in the exercise of the external affairs power under the Constitution. Section 300.1(1) of the Commonwealth Code states that the purpose of Pt 9.1 "is to create offences relating to drug trafficking and to give effect to the United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, done at Vienna on 20 December 1988[867]." Section 302.4, headed "Trafficking controlled drugs", provides: "(1) A person commits an offence if: the person traffics in a substance; and the substance is a controlled drug. Penalty: Imprisonment for 10 years or 2,000 penalty units, or both. The fault element for paragraph (1)(b) is recklessness." For the purposes of Pt 9.1 the word "traffic" has the meaning given by s 302.1. Section 302.1(1)(e) provides that a person "traffics" in a substance if "the person possesses the substance with the intention of selling any of it." Further, Pt 2.2 of the Commonwealth Code deals with the fault elements of the offence. 865 Butler v Attorney-General (Vict) (1961) 106 CLR 268 at 286 per Windeyer J; [1961] HCA 32; Western Australia v The Commonwealth (Native Title Act Case) (1995) 183 CLR 373 at 464-465 per Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ; [1995] HCA 47; see also Wenn v Attorney-General (Vict) (1948) 77 CLR 84 at 122 per Dixon J; [1948] HCA 13. 866 See [517] of these reasons. 867 1582 UNTS 95; [1993] ATS 4. Section 300.4(1) of the Commonwealth Code provides that Pt 9.1 "is not intended to exclude or limit the concurrent operation of any law of a State", which includes a law of a State which makes an act that is an offence against a provision of Pt 9.1 an offence against the law of the State (s 300.4(2)), even if different penalties are provided (s 300.4(3)(a)). In the context of s 300.4, s 4C(2) of the Crimes Act 1914 (Cth) ("the Crimes Act") provides that, where an act or omission constitutes an offence under both a Commonwealth law and a State law "and the offender has been punished for that offence under the law of the State β¦ the offender shall not be liable to be punished for the offence under the law of the Commonwealth." Part V of the Drugs Act (ss 70-80) is headed "Drugs of Dependence and Related Matters". Section 71AC provides: "A person who, without being authorized by or licensed under this Act or the regulations to do so, trafficks or attempts to traffick in a drug of dependence is guilty of an indictable offence and liable to level 4 imprisonment (15 years maximum)." As already mentioned868, for the purposes of Pt V, the word "traffick" is defined by s 70(1) to include to "have in possession for sale, a drug of dependence". It can be seen that both ss 302.4 and 71AC state the elements of the offence and the maximum penalties (which are different), and each section depends for its construction on other parts of the legislation of which it forms a part. In each case, these components taken together constitute the "law" for the purposes of the comparison required by s 109. The "paramountcy"869 or "supremacy"870 of the Parliament of the Commonwealth under the Constitution resolves any conflict between a 868 See [506] of these reasons. 869 Ex parte McLean (1930) 43 CLR 472 at 485 per Dixon J; [1930] HCA 12. 870 Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (1920) 28 CLR 129 at 154-155 per Knox CJ, Isaacs, Rich and Starke JJ; [1920] HCA 54; Melbourne Corporation v The Commonwealth (1947) 74 CLR 31 at 83 per Dixon J; [1947] HCA 26; R v Winneke; Ex parte Gallagher (1982) 152 CLR 211 at 216 per Gibbs CJ; [1982] HCA 77. Commonwealth law and a State law as set out in covering cl 5871 and s 109 of the Constitution. Section 109 provides: "When a law of a State is inconsistent with a law of the Commonwealth, the latter shall prevail, and the former shall, to the extent of the inconsistency, be invalid." In its terms, s 109 is directed to laws made under the concurrent law-making powers of the Commonwealth and the States rather than to the limits inter se of their constitutional powers872. In the context of concurrent Commonwealth and State powers to legislate in respect of a particular subject matter, s 109 resolves conflict, if any exists, in favour of the Commonwealth. The principles to be applied have been restated in the joint reasons of the whole Court in Dickson v The Queen873 and in Jemena Asset Management (3) Pty Ltd v Coinvest Ltd874. In particular, the Court in each case referred to the statement of principle made by Dixon J in Victoria v The Commonwealth ("The Kakariki")875, taken up in the joint reasons of the whole Court in Telstra Corporation Ltd v Worthing876. It is worth repeating the two propositions which informed Dixon J's statement of principle. The first proposition, associated often with the expression "direct inconsistency", is: 871 Covering cl 5 relevantly provides: "This Act, and all laws made by the Parliament of the Commonwealth under the Constitution, shall be binding on the courts, judges, and people of every State and of every part of the Commonwealth, notwithstanding anything in the laws of any State". 872 Ex parte McLean (1930) 43 CLR 472 at 482 per Dixon J; O'Sullivan v Noarlunga Meat Ltd (1956) 95 CLR 177 at 182-183; [1957] AC 1 at 24-25; see also R v Winneke; Ex parte Gallagher (1982) 152 CLR 211 at 216 per Gibbs CJ. 873 (2010) 241 CLR 491 at 502 [13]-[14]; [2010] HCA 30. 874 [2011] HCA 33 at [39]-[41]. 875 (1937) 58 CLR 618 at 630; [1937] HCA 82. 876 (1999) 197 CLR 61 at 76 [28]; [1999] HCA 12. "When a State law, if valid, would alter, impair or detract from the operation of a law of the Commonwealth Parliament, then to that extent it is invalid." The second proposition, associated often with the expressions "indirect inconsistency" and "covering the field", immediately followed: "Moreover, if it appears from the terms, the nature or the subject matter of a Federal enactment that it was intended as a complete statement of the law governing a particular matter or set of rights and duties, then for a State law to regulate or apply to the same matter or relation is regarded as a detraction from the full operation of the Commonwealth law and so as inconsistent." The utility of recognising different approaches to inconsistency for the purposes of s 109 emerges from cases resolved by reference to the expressions "direct inconsistency" or "direct collision"877 on the one hand, or by reference to the expressions "indirect inconsistency" or "covering the field"878 on the other. However, as was recognised by Mason J in Ansett Transport Industries (Operations) Pty Ltd v Wardley879, different approaches to inconsistency all directed to the same end are inevitably interrelated. That end is to determine whether there is a "real conflict"880 between the laws under consideration. Utility has also been established in distinguishing different kinds of "direct inconsistency". Direct inconsistency can arise where one law commands what the other forbids or where one law compels disobedience to the other law881. 877 See for example Blackley v Devondale Cream (Vic) Pty Ltd (1968) 117 CLR 253 at 258 per Barwick CJ; [1968] HCA 2; Telstra Corporation Ltd v Worthing (1999) 197 CLR 61 at 76 [27]; Dickson v The Queen (2010) 241 CLR 491 at 504 [22]. 878 See for example Clyde Engineering Co Ltd v Cowburn (1926) 37 CLR 466 at 489, 491 and 499 per Isaacs J; [1926] HCA 6; Wenn v Attorney-General (Vict) (1948) 77 CLR 84 at 108-109 per Latham CJ. The metaphor "covering the field" has not escaped criticism: see Stock Motor Ploughs Ltd v Forsyth (1932) 48 CLR 128 at 147 per Evatt J; [1932] HCA 40; Victoria v The Commonwealth ("The Kakariki") (1937) 58 CLR 618 at 633-634 per Evatt J. 879 (1980) 142 CLR 237 at 260; [1980] HCA 8. 880 Jemena Asset Management (3) Pty Ltd v Coinvest Ltd [2011] HCA 33 at [42]. 881 R v Brisbane Licensing Court; Ex parte Daniell (1920) 28 CLR 23 at 29; [1920] HCA 24; University of Wollongong v Metwally (1984) 158 CLR 447 at 455-456; [1984] HCA 74. Because there is no impossibility of simultaneous obedience in respect of both s 302.4 of the Commonwealth Code and s 71AC of the Drugs Act, the appellant did not invoke this type of direct inconsistency, dealt with in Australian Boot Trade Employes Federation v Whybrow & Co882. Accordingly, nothing more needs to be said about this. Direct inconsistency can also arise where there is a direct conflict or collision between a Commonwealth law and a State law, each of which creates rights and duties883 or imposes obligations by stating a rule or norm of conduct and a sanction for a breach of that rule or norm. The appellant's submissions, in respect of s 109, were framed in terms of the first proposition of Dixon J in The Kakariki set out above. The direct inconsistency complained of was said to arise out of the differences between the Commonwealth law and the State law. First, in reliance on Dickson884, it was contended for the appellant that because of the interaction between ss 5 and 71AC of the Drugs Act the respective "criteria of adjudication" were different under s 302.4 of the Commonwealth Code (read with ss 13.1 and 13.2) and s 71AC of the Drugs Act "by reason of the different burdens and standards of proof". Thus, citing Wenn v Attorney-General (Vict)885, it was said the State law closed up "areas of liberty designedly left" by the Commonwealth law. Secondly, the appellant relied on the different methods of trial stipulated for the two offences. A prosecution under s 302.4, which by reason of s 4G of the Crimes Act is triable on indictment, requires a unanimous verdict under s 80 of the Constitution886 whereas s 46 of the Juries Act 2000 (Vic) permits a majority verdict for a prosecution under s 71AC, although no resort was made to s 46 in this case. 882 (1910) 10 CLR 266 at 286, 289 and 299; [1910] HCA 8. 883 See Clyde Engineering Co Ltd v Cowburn (1926) 37 CLR 466 at 478 per Knox CJ and Gavan Duffy J; University of Wollongong v Metwally (1984) 158 CLR 447 at 455-456 per Gibbs CJ; The Commonwealth v Western Australia (Mining Act Case) (1999) 196 CLR 392 at 415 [54] per Gleeson CJ and Gaudron J and 450 [171] per Kirby J; [1999] HCA 5. 884 (2010) 241 CLR 491 at 504 [22]. 885 (1948) 77 CLR 84 at 120 per Dixon J. 886 Cheatle v The Queen (1993) 177 CLR 541; [1993] HCA 44. Thirdly, the appellant relied on the different maximum penalties for the offences (ten years' imprisonment for the Commonwealth offence887 and 15 years' imprisonment for the State offence) and the different sentencing regimes relevant to ss 302.4 and 71AC. As part of their response, the second respondent (the Attorney-General for Victoria), and the Attorneys-General for New South Wales, South Australia, Western Australia, Tasmania and the Australian Capital Territory, intervening, all relied on s 300.4 of the Commonwealth Code. the Attorney-General of the Commonwealth and Inconsistency in the relevant sense does not arise merely because of the co-existence of two laws capable of simultaneous obedience888 or because of the existence of differences between them889. Further, the fact that a Commonwealth law and a State law "impose different penalties for the same conduct does not necessarily mean that the laws are inconsistent."890 What is required in every case is that the two laws being compared be construed so as to determine their operation, as a matter of construction, and, in particular, so as to determine whether the Commonwealth's coverage of the subject matter is complete, exhaustive or exclusive. As explained by Dixon J in Ex parte McLean891: "The inconsistency does not lie in the mere coexistence of two laws which are susceptible of simultaneous obedience. It depends upon the intention of the paramount Legislature to express by its enactment, completely, exhaustively, or exclusively, what shall be the law governing the particular conduct or matter to which its attention is directed. When a Federal statute discloses such an intention, it is inconsistent with it for the law of a State to govern the same conduct or matter." To the extent that this involves ascertaining the intention of the Commonwealth Parliament, that exercise requires an objective determination 887 See the Crimes Act, s 4D(1) and (1A). 888 Ex parte McLean (1930) 43 CLR 472 at 483 per Dixon J. 889 McWaters v Day (1989) 168 CLR 289 at 296; [1989] HCA 59. 890 R v Winneke; Ex parte Gallagher (1982) 152 CLR 211 at 218 per Gibbs CJ. 891 (1930) 43 CLR 472 at 483. See subsequently McWaters v Day (1989) 168 CLR achieved by "the application of rules of interpretation accepted by all arms of government in the system of representative democracy."892 Having regard to the finding set out above that s 5 of the Drugs Act has no application to the compound expression "possession for sale" contained in s 70(1), which defines "traffick" for the purposes of s 71AC, the first matter relied on by the appellant as evidencing inconsistency, namely differences in methods of proof, falls away893. This also has the result that the Commonwealth law and the State law can be compared for the purposes of s 109 on the basis that they proscribe the same conduct by reference to the same elements. That leaves for resolution the allegations of inconsistency which depend on different modes of trial, and different penalties and sentencing regimes, which will include consideration of the effect of s 300.4 of the Commonwealth Code. It is convenient to deal with the question of different penalties first. Different penalties A difference in penalties prescribed for breach of a rule of conduct which is the subject of both a Commonwealth law and a State law has been held to give rise to a relevant inconsistency in Hume v Palmer894, Ex parte McLean895 and R v Loewenthal; Ex parte Blacklock896. However, as Mason J stated in the last- mentioned case897, this conclusion was arrived at where it appeared that the Commonwealth statute "evince[d] an intention to cover the subject matter to the exclusion of any other law." That remains the question here. It may first be observed that s 4C(2) of the Crimes Act reflects the common law principle that an offender should not be prosecuted or punished twice for offending conduct and is directed to the exercise of both the power to 892 Zheng v Cai (2009) 239 CLR 446 at 456 [28], affirmed in Dickson v The Queen (2010) 241 CLR 491 at 507 [32]. 893 This renders it unnecessary to consider the interaction between ss 13.1 and 13.2 of the Commonwealth Code, concerning the legal burden and standard of proof, and 894 (1926) 38 CLR 441 at 448, 450-451 and 462; [1926] HCA 50. 895 (1930) 43 CLR 472 at 479 and 486-487. 896 (1974) 131 CLR 338 at 346-347; [1974] HCA 36. 897 R v Loewenthal; Ex parte Blacklock (1974) 131 CLR 338 at 347. institute and conduct a prosecution and the judicial power to punish by imposing a sentence after conviction. Mason J observed in R v Loewenthal; Ex parte Blacklock898 of the predecessors to s 4C(2)899, that they "plainly speak[] to a situation in which the State law is not inoperative under s 109, as for example when there is an absence of conflict between the provisions of the two laws and the Commonwealth law is not intended to be exclusive and exhaustive." Further, in R v Winneke; Ex parte Gallagher900 his Honour said of the predecessor provisions that they "proceed in accordance with the principle that there is no prima facie presumption that a Commonwealth statute, by making it an offence to do a particular act, evinces an intention to deal with that act to the exclusion of any other law." In McWaters v Day, the Court considered different penalties in respect of substantially the same conduct under the Traffic Act 1949 (Q) and the Defence Force Discipline Act 1982 (Cth). The Court found that, "[v]iewed in their context", the provisions of the Commonwealth Act did not suggest the Act intended to exclude the operation of State criminal law901. The Commonwealth Act did not "serve the same purpose as laws forming part of the ordinary criminal law."902 Where a Commonwealth law and a State law impose different penalties in respect of essentially the same conduct but are not relevantly inconsistent903, a person who has engaged in the prescribed conduct cannot be punished under both laws904; however, the maximum penalty applicable to the conduct will not be 898 (1974) 131 CLR 338 at 347. 899 The Crimes Act, s 11 and Acts Interpretation Act 1901 (Cth), s 30(2) as they stood at the date of that judgment. 900 (1982) 152 CLR 211 at 224. 901 McWaters v Day (1989) 168 CLR 289 at 299. 902 McWaters v Day (1989) 168 CLR 289 at 299. 903 As in R v Winneke; Ex parte Gallagher (1982) 152 CLR 211 and McWaters v Day (1989) 168 CLR 289. 904 The Crimes Act, s 4C(2)(a). known until there is reliance on one or other of the laws for the purposes of punishing that person's conduct. The Kakariki905 was concerned with a Commonwealth law and a Victorian law which both provided power to Commonwealth and State authorities respectively to secure the removal of shipwrecks likely to obstruct or hinder navigation. Dixon J, taking up and applying what he had said in Ex parte McLean, observed that there was "nothing in the language of [the Commonwealth provision] and certainly nothing in its nature or subject matter suggesting that, if a wreck fell within the description to which the section relates, the Commonwealth authority should have the exclusive power of determining whether or not the owner ought to remove it."906 Dixon J observed that there was the potential for conflict between the two laws if there were attempts by Commonwealth and State authorities to exercise their respective powers simultaneously. In such a case, the Commonwealth law would prevail. But, his Honour said, that meant only that the Commonwealth law conferred a power to remove wrecks, the exercise of which was exclusive, but not that the Commonwealth law was an exclusive statement of the existence of a power to compel the removal of wrecks907. Section 302.4 of the Commonwealth Code creates a Commonwealth offence of drug trafficking which Commonwealth prosecuting authorities are empowered to prosecute908. There is nothing in the terms in which the offence is created suggesting that the authorities are under a duty to do so in every case or that the power to prosecute the offence is intended to be exclusive. Moreover, there is nothing in the nature of the offence which suggests this to be necessary, such as would support the implication of an intention that the prosecution of trafficking offences be the exclusive preserve of the Commonwealth. In The Kakariki, Dixon J said that the purpose of the Commonwealth legislation was "not only compatible with, but β¦ aided by, the co-existence of other powers for securing the removal of wrecks."909 The same observation may 905 (1937) 58 CLR 618. 906 (1937) 58 CLR 618 at 630-631. 907 Victoria v The Commonwealth ("The Kakariki") (1937) 58 CLR 618 at 631. 908 Director of Public Prosecutions Act 1983 (Cth), ss 5, 6 and 10. 909 (1937) 58 CLR 618 at 630. be made respecting the purpose of the Commonwealth Code, having regard to the nature of the offence of drug trafficking. As stated above, the purposes of Pt 9.1 of the Commonwealth Code include giving effect to the United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances910. Article 3 of that Convention provides for the establishment of criminal offences under the domestic law of each party. Those offences include "possession β¦ of any narcotic drug or psychotropic substance" for relevant purposes including for sale (Art 3(1)(a)(iii)). Article 4 provides that each party shall establish jurisdiction over the offences referred to in Art 3, when the offence "is committed in its territory" (Art 4(1)(a)(i)) or "on board a vessel flying its flag or an aircraft which is registered under its laws at the time the offence is committed" (Art 4(1)(a)(ii)). Such purposes are distinguishable from, and both overlap with and supplement, the purpose of State laws in respect of drug trafficking. In urging a uniform drug trafficking Act, the Report of the Australian Royal Commission of Inquiry into Drugs911, commissioned by the Governments of the Commonwealth, Victoria, Queensland, Western Australia and Tasmania, described the reach of drug trafficking: "The prime target in a strategy to reduce the quantity of illegal drugs available in Australia should be the drug trafficker. There is abundant evidence to prove that groups engaged in drug trafficking do not respect Australia's State or national boundaries." The context in which the Commonwealth offence was created does not support an inference of intended exclusivity; rather it supports the contrary inference. The aim of prosecuting drug trafficking offences in Australia can only be aided by concurrent and parallel Commonwealth and State laws for that purpose. The Commonwealth law enabling the prosecution of a drug trafficking offence is not detracted from, or impaired by, the concurrent State law which permits the same. The first respondent and the Attorney-General of the Commonwealth and the Attorney-General for South Australia intervening referred to co-operative arrangements facilitating the exercise of concurrent laws and powers in respect of drug trafficking. This is an example of "the extent to which law enforcement and 910 The Commonwealth Code, s 300.1(1). 911 Report of the Australian Royal Commission of Inquiry into Drugs, (1980), Book D, Pt XIV, Ch 3 at D29. policing in Australia depends both practically, and structurally (through bodies like the Australian Crime Commission) upon close co-operation of federal, State and Territory police forces"912. Such considerations cannot determine a question of inconsistency, if a real conflict between two laws exists; however, the arrangements confirm the pragmatism of current, concurrent and parallel systems in respect of drug trafficking offences. Section 300.4 of the Commonwealth Code Following R v Credit Tribunal; Ex parte General Motors Acceptance Corporation913 (dealing with a provision similar to s 300.4 of the Commonwealth Code914), whilst the expression of intention in s 300.4 will not avoid direct inconsistency if such inconsistency exists, taken in its entirety it is a very clear indication that Pt 9.1 is not exhaustive or exclusive in respect of drug trafficking and is not intended to exclude the operation of the Drugs Act where the Drugs Act deals with the same subject matter but contains different penalties. Although not determinative of relevant inconsistency for the purposes of s 109, such an expression of intention assists in resolving, as a matter of statutory construction, whether the Commonwealth law covers the subject matter exhaustively or exclusively915. In the present case the statements of intention found in s 300.4 accord with the intention of Pt 9.1 ascertained by a process of construction. There is no reason why effect should not be given to these statements. Different modes of trial and different sentencing regimes Finally, different modes of trial and different sentencing regimes are part of the legal and constitutional landscape in respect of the administration of criminal justice in Australia. They are a product of constitutional arrangements which permit both the Commonwealth (pursuant to s 51 of the Constitution) and the State of Victoria (pursuant to s 16 of the Constitution Act 1975 (Vic)) to legislate in respect of the administration of their respective criminal justice 912 Coleman v Power (2004) 220 CLR 1 at 78 [197]; [2004] HCA 39. 913 (1977) 137 CLR 545 at 552 per Barwick CJ and 563-564 per Mason J; [1977] HCA 914 Section 75(1) of the Trade Practices Act 1974 (Cth). Section 75(1) provided: "Except as provided by sub-section (2), this Part is not intended to exclude or limit the concurrent operation of any law of a State or Territory." 915 John Holland Pty Ltd v Victorian Workcover Authority (2009) 239 CLR 518 at 527-528 [21]; [2009] HCA 45; Dickson v The Queen (2010) 241 CLR 491 at 507 systems, and also of the circumstance that s 80 of the Constitution applies only in relation to offences against some Commonwealth laws. Such considerations cannot give rise to relevant inconsistency for the purpose of s 109. Conclusions in respect of s 109 It can be accepted that differences between a Commonwealth law creating an offence and a State law creating an offence, including a difference in penalty, might imply that the Commonwealth law is exhaustive or exclusive of State law in respect of the subject matter covered916. However, there is nothing in the nature or subject matter of drug trafficking or in the express terms of Pt 9.1, including the terms of s 302.4, which implies or supports the conclusion that the purpose of s 302.4 is to exhaustively cover the subject matter of the offence of drug trafficking. Section 300.4 expressly counters such an implication. Moreover, the wider context of the introduction of Pt 9.1 into the Commonwealth Code supports the conclusion that Pt 9.1 is a concurrent scheme in respect of drug trafficking offences, operating in parallel to State offences in respect of the same subject matter917. In all the circumstances of this case, no inconsistency in the relevant sense has been established. The appellant's application to have the presentment quashed and her sentence set aside on that basis must be rejected. Orders The Court of Appeal should have granted the appellant leave to appeal and set aside her conviction. As explained in these reasons, the declaration purporting to be order 5 of the Court of Appeal should not have been made. In place of the orders of the Court of Appeal, there should be orders granting leave 916 R v Winneke; Ex parte Gallagher (1982) 152 CLR 211 at 218 per Gibbs CJ, referring to Hume v Palmer (1926) 38 CLR 441 and R v Loewenthal; Ex parte Blacklock (1974) 131 CLR 338. 917 See the Second Reading Speech for the Law and Justice Legislation Amendment (Serious Drug Offences and Other Measures) Bill 2005: Australia, House of Representatives, Parliamentary Debates (Hansard), 26 May 2005 at 6, where reference is made to the fact that insofar as Pt 9.1 includes offences applying to drug dealings in Australia, the provisions will "operate alongside" State offences. See also the Explanatory Memorandum (Australia, House of Representatives, Law and Justice Legislation Amendment (Serious Drug Offences and Other Measures) Bill 2005) at 2, where it is stated that "[o]verlapping State β¦ drug offences will β¦ operate alongside the offences in Part 9.1 of the Criminal Code." to appeal, allowing the appeal, quashing the conviction, setting aside the sentence, and ordering a new trial. We agree that in the special circumstances of this appeal, which has been argued as a major constitutional case, the appellant should have an order against the second respondent for two-thirds of her costs in this Court. Bell BELL J. The facts and the procedural history are set out in the reasons of the other members of the Court and it is not necessary to repeat them. For the reasons that follow, I consider that, in the prosecution of any offence under the Drugs, Poisons and Controlled Substances Act 1981 (Vic) ("the Drugs Act"), whenever the conditions for its engagement are established, s 5 imposes a legal burden on the accused. This is so notwithstanding that the provision of a reverse onus of proof with respect to an element of a criminal offence is incompatible with the right to be presumed innocent until proved guilty according to law that is set out in the Charter of Human Rights and Responsibilities Act 2006 (Vic) ("the Charter")918. Section 5 was engaged in the prosecution of the appellant for the offence of trafficking. It remained incumbent on the prosecution to prove that the appellant intended to traffick in the drug. Proof of that intent required satisfaction beyond reasonable doubt that the appellant was aware of the presence of the drug in her apartment. The trial judge's directions to the jury did not serve to make this clear. This deficiency caused the trial to miscarry. The appeal should be allowed919. Consideration of the consequential order requires that the appellant's challenge to the validity of the law under which she was prosecuted be addressed. If s 71AC of the Drugs Act is inoperative because it is inconsistent with the Criminal Code (Cth) ("the Code"), the appellant's conviction is a nullity and the appropriate consequential order is to quash the presentment. Among the appellant's submissions supporting her constitutional challenge is the contention that under Commonwealth law an area of liberty has been "designedly left", which area of liberty is closed up by operation of ss 5 and 71AC. The inconsistency is said to be of the same kind as in Dickson v The Queen920. The area of liberty on which the submission depends is the "mere occupation of premises on which drugs are found". The appellant characterises the conduct giving rise to her conviction as "her occupation of premises upon which the drugs were found". The conduct giving rise to the appellant's conviction was trafficking in methylamphetamine. The same conduct is proscribed under the Code921. State law makes different provision respecting proof of the offence. It does not trench on an area of liberty that the Commonwealth has chosen to leave open. I agree with Gummow J's reasons for concluding that the appellant's challenge to her presentment for the State offence should be rejected. Her conviction should be quashed and a new trial ordered. 918 Charter, s 25(1). 919 Crimes Act 1958 (Vic), s 568(1). 920 (2010) 241 CLR 491 at 505 [25]; [2010] HCA 30, citing Wenn v Attorney-General (Vict) (1948) 77 CLR 84 at 120 per Dixon J; [1948] HCA 13. 921 Code, s 302.4. Bell The declaration of inconsistent interpretation made by the Court of Appeal following the disposition of the appellant's appeal does not affect her rights or duties and she makes no submissions about it. The Attorney-General for Victoria invited the Court to set aside the declaration in the event that the appellant's challenge to the construction of s 5 succeeds. He did not submit that the declaration should be disturbed in the event that it does not. However, his submission raises an issue concerning the validity of s 36 of the Charter. That section confers power on the Supreme Court of Victoria to make a "declaration of inconsistent interpretation". I agree with French CJ's reasons for concluding that the power so conferred is a non-judicial power. I also agree with his Honour's reasons for concluding that the conferral of the power does not offend the Kable principle922. Section 5 and deemed possession under the Drugs Act At the appellant's trial, the jury were directed that, if they were satisfied beyond reasonable doubt that the appellant was in occupation of the apartment and that the methylamphetamine was present in the apartment, she would have been in possession of it, subject to proof by her that she was not. The direction was consistent with decisions of the Victorian Supreme Court holding that s 5 of the Drugs Act places a legal burden of proof on an accused where the preconditions for its engagement are established923. There was no application for redirection924. Section 5 provides: "Meaning of possession Without restricting the meaning of the word possession, any substance shall be deemed for the purposes of this Act to be in the possession of a person so long as it is upon any land or premises occupied by him or is used, enjoyed or controlled by him in any place whatsoever, unless the person satisfies the court to the contrary." In the Court of Appeal and in this Court the appellant submitted that the authorities holding that s 5 imposes a legal burden were wrongly decided and that 922 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51; [1996] HCA 923 R v Clarke and Johnstone [1986] VR 643; R v Tragear (2003) 9 VR 107; R v Hiep Tan Tran [2007] VSCA 19. 924 R v Momcilovic (2010) 25 VR 436 at 441 [13]. Bell on ordinary principles of statutory interpretation the provision imposes "an evidential onus of disproof" on the accused925. This, it was said, was an available interpretation that would bring the provision into line with a cardinal principle of the criminal law926 and still achieve the evident purpose of the provision to facilitate proof of the fact of possession. It would do so by requiring the accused "to adduce evidence that he or she was not in possession" before requiring that the prosecution prove the contrary. The submission relied in part on the Chief Crown Prosecutor's submission in the Court of Appeal that the change from a legal to an evidential onus would make "little difference"927. An evidential burden is not an "onus of disproof"928. An evidential burden does no more than oblige a party to show that there is sufficient evidence to raise an issue as to the existence (or non-existence) of a fact929. Discharge of an evidential burden may require that an accused lead evidence in a defence case. It may be discharged by evidence adduced in cross-examination of witnesses in the prosecution case. In rare cases it may be discharged by reference to evidence adduced by the prosecution in chief930. It is not evident that reading the requirement of s 5 that the accused "satisf[y] the court to the contrary" as an evidential and not a legal burden would accord with the purpose of the provision. The common law requires more in order to prove that an accused is in possession of a thing than establishing that the thing is in premises occupied by the accused931. The accused must have actual or constructive control of the thing and intend to exercise that control to the exclusion of those not acting in concert with him or her932. Proof of the intention requires that the accused know of the 925 R v Momcilovic (2010) 25 VR 436 at 442 [16]. 926 Woolmington v Director of Public Prosecutions [1935] AC 462. 927 R v Momcilovic (2010) 25 VR 436 at 475-476 [145]. 928 See Jayasena v The Queen [1970] AC 618. 929 Cross on Evidence, 8th Aust ed (2010) at 282 [7015]. 930 Cross on Evidence, 5th ed (1979) at 88. 931 R v Cavendish [1961] 1 WLR 1083 at 1085; [1961] 2 All ER 856 at 858; Brook v Whitbread [1966] SASR 310 at 313-315. 932 Moors v Burke (1919) 26 CLR 265 at 274 per Isaacs, Gavan Duffy and Rich JJ; [1919] HCA 32 as to the expression "actual possession" in s 40 of the Police Offences Act 1915 (Vic). See also Tabe v The Queen (2005) 225 CLR 418; [2005] HCA 59. Bell existence of the thing. However, knowledge alone may not establish the intention. An occupier of premises may have knowledge of the presence of a prohibited drug in the premises and yet not be in possession of the drug933. The prosecution of an accused who is in joint occupation of premises for an offence arising out of the seizure of drugs in the premises will commonly present the difficulty of excluding the reasonable possibility that the drugs were in the possession of another of the occupants934. The evident purpose of s 5 is to overcome difficulties of this kind. Reading the provision as imposing a mere evidential burden would not achieve that purpose. An evidential burden would be discharged by reference to evidence of the access of other occupants to the premises and the drugs. It would have been discharged in this case by the evidence in the prosecution case of Velimir Markovski's joint occupation of the apartment and exercise of control over the drug. The Chief Crown Prosecutor's submission, earlier noted, was made with respect to the prosecution of trafficking offences. Proof of the mens rea for those offences requires that the prosecution exclude the reasonable possibility that the accused either did not know of the existence of the drug or did not intend alone or jointly to exercise control over it. Recognition of the practical effect of the discharge of this obligation may explain the submission. The appellant and the Victorian Equal Opportunity and Human Rights Commission ("the Commission") pointed to the wording of s 5, noting that it does not provide in terms that the standard of satisfaction is upon the balance of probabilities. Those words are found in ss 72C and 73(1), which are provisions that are also directed to the need to satisfy the court of some matter. The Commission submitted that the silence of s 5 in this respect requires the court to "identify" an appropriate standard by reference to considerations standing outside the Act. The submission is misconceived. The standard of proof is either upon the balance of probabilities or beyond reasonable doubt, depending upon the identity of the party bearing the burden and the matter to be proved. Where the burden is placed upon the accused it is always discharged by proof on the balance of probabilities935. To allocate the legal burden of proof to the accused is to state the standard of proof. 933 A sailor who was aware that shipmates had hidden illicit drugs in the cabin of which he was an occupant was held not to be in possession of the drugs in R v Hussain [1969] 2 QB 567. 934 Filippetti (1978) 13 A Crim R 335. 935 Sodeman v The King (1936) 55 CLR 192; [1936] HCA 75. Bell The appellant submitted that the imposition of a legal burden on the accused under s 5 is inconsistent with the statutory scheme for the prosecution of drugs offences. She contended that it does not sit with the requirement, in a prosecution for trafficking in a commercial quantity (or a large commercial quantity), of proof of the intention to traffick in an amount exceeding the threshold quantity. Similar inconsistency is suggested to arise from the requirement of proof of the requisite intention to traffick in the various ways other than by having the drug in "possession for sale"936. The submissions assume, contrary to those relied on in support of the appellant's second ground937, that the prosecution is not required to prove the accused's awareness of the existence of the drug in a prosecution for a trafficking offence in which ss 5 and 73(2) are engaged. That assumption is wrong, as consideration of the appellant's second ground will show. The courts of Victoria have for many years interpreted s 5 as imposing a legal burden of proof on the accused. It is an interpretation that accords with the ordinary grammatical meaning of the provision and with its evident purpose. Section 5 operates to deem or adjudge the occupier of premises in which a drug is found to be in possession of the drug unless he or she satisfies the court to the contrary. One does not satisfy a court that one is not in possession of a thing by pointing to evidence from which it would be open to draw that conclusion as a matter of possibility. The Charter The appellant and the Commission submitted that, if s 5 is correctly understood as placing a legal burden upon the accused at the time the provision was enacted938, that interpretation has not survived the Charter. The Charter requires that statutory provisions, whenever enacted939, are to be interpreted so far as it is possible to do so in a human rights compatible way940. The Charter the does not affect any proceedings commenced or concluded before 936 Drugs Act, s 70(1), definition of "traffick". 937 "The Court of Appeal erred in concluding that there was no error in the trial judge's failure to direct that the appellant could not have the drugs in her possession for sale, and therefore could not be guilty of trafficking, unless the prosecution proved beyond reasonable doubt that she knew of the presence of the drugs." 938 The Drugs Act was assented to on 12 January 1982. Section 5 was based on s 28 of the Poisons Act 1962 (Vic), which the Drugs Act replaced. 939 Charter, ss 1(2)(b) and 49(1). 940 Charter, s 32(1). Bell commencement of Pt 2, which commenced on 1 January 2007941. The appellant's trial began on 21 July 2008. At that date it is submitted that the Charter required s 5 to be read as placing an evidential and not a legal burden upon an accused. The human rights that the Parliament of Victoria seeks to protect and promote are set out in Pt 2 of the Charter. They are primarily derived from the International Covenant on Civil and Political Rights ("the ICCPR")942. The drafting conventions adopted in the two instruments differ. The ICCPR makes provision in the statement of the right for any circumstances in which the right may be limited. The Charter adopts this convention in the statement of some rights, for example, the right to privacy943 and the right to freedom of expression944. A number of the rights which the ICCPR recognises as being subject to limitation are set out in the Charter without reference to the circumstances of limitation. These include the right to freedom of thought, conscience, religion and belief945 and the right of peaceful assembly and freedom of association946. However, the rights in the Charter are subject to the general limitation provision of s 7, which is the first provision of Pt 2. Section 7 provides: "Human rights β what they are and when they may be limited This Part sets out the human rights that Parliament specifically seeks to protect and promote. 941 Charter, ss 2(1) and 49(2). 942 Victoria, Legislative Assembly, Charter of Human Rights and Responsibilities Bill 2006, Explanatory Memorandum at 1. 943 Charter, s 13. 944 Charter, s 15. 945 Charter, s 14. By contrast, Art 18 of the ICCPR, dealing with the right to freedom of thought, conscience and religion, is expressed to be subject only to such limitations as are prescribed by law and are necessary to protect public safety, order, health or morals or the fundamental rights and freedoms of others. 946 Charter, s 16. By contrast, Art 21 of the ICCPR, setting out the right to peaceful assembly, provides that no restrictions may be placed on the exercise of the right other than those imposed in conformity with the law and which are necessary in a democratic society in the interests of national security or public safety, public order, the protection of public health or morals or the protection of the rights and freedoms of others. Bell (2) A human right may be subject under law only to such reasonable limits as can be demonstrably justified in a free and democratic society based on human dignity, equality and freedom, and taking into account all relevant factors including β the nature of the right; and the importance of the purpose of the limitation; and the nature and extent of the limitation; and the relationship between the limitation and its purpose; and any less restrictive means reasonably available to achieve the purpose that the limitation seeks to achieve. (3) Nothing in this Charter gives a person, entity or public authority a right to limit (to a greater extent than is provided for in this Charter) or destroy the human rights of any person." Among the rights protected and promoted by the Charter is the right to be presumed innocent of an offence until proved guilty according to law, which is set out in s 25(1). The provision of a reverse onus of proof of a fact that is an element of an offence is inconsistent with the right. The reason why that is so is illustrated by consideration of the offence of possession of a drug of dependence under s 73(1). The offence is a serious one punishable by a maximum of five years' imprisonment947. Where the conditions for its engagement are proved, the effect of s 5 is that the jury are required to convict in circumstances in which they consider it equally probable that the accused was not in possession of the drug. The Court of Appeal found that the imposition of a reverse onus by s 5 is inconsistent with the right conferred by s 25(1) of the Charter948. That finding is not challenged in this appeal. The prosecution was not required to prove that the appellant was not authorised by or licensed under the Drugs Act to traffick in methylamphetamine. Proof of such authorisation or licence would have excepted the appellant from criminal liability. The Drugs Act places proof of matters of exception 947 Drugs Act, s 73(1)(c). Under s 73(1)(b) of the Drugs Act, a lesser maximum penalty applies where the court is satisfied on the balance of probabilities that the offence was not committed for any purpose related to trafficking in the drug of dependence. 948 R v Momcilovic (2010) 25 VR 436 at 473 [135]. Bell qualification and defence on the accused949. Whether allocating the burden of proving matters of exception or qualification to the accused impinges on the right to be presumed innocent of an offence until proved guilty according to law and, if it does, whether it is a demonstrably justified limitation on the right, were not in issue on the appeal. One of the main ways in which the Charter seeks to protect and promote the rights that are set out in Pt 2 is by s 32(1), which provides: "So far as it is possible to do so consistently with their purpose, all statutory provisions must be interpreted in a way that is compatible with human rights." The Court of Appeal rejected the submission that s 32(1) creates a "special" rule allowing a "remedial" interpretation of a statutory provision in order to render the provision rights compatible950. It said that s 32(1) requires the court to explore all possible interpretations of a provision and to adopt the interpretation which least infringes Charter rights951. It was necessary for the Court of Appeal to consider the relationship between ss 7(2) and 32(1) because the Attorney-General for Victoria submitted that s 5 was a demonstrably justified limitation on the right to be presumed innocent. The Court of Appeal concluded that the interpretive rule in s 32(1) is addressed to compatibility with the rights as stated in ss 8 to 27 and not as reasonably limited under s 7(2)952. The Court of Appeal said that the Parliament is not to be taken to have intended that s 32(1) was only to operate to avoid what would otherwise be an unjustified infringement of a right953. Its analysis of the relationship between s 7(2) and s 32(1) is consistent with the reasoning of Elias CJ in her dissenting judgment addressing the same issue under the New Zealand Bill of Rights Act 1990 (NZ) in R v Hansen954. The Court of Appeal concluded that, applying the interpretive rule of s 32(1) of the Charter, it is not possible to read s 5 other than as imposing a legal 949 Drugs Act, s 104. 950 R v Momcilovic (2010) 25 VR 436 at 456 [69], 462 [92]. 951 R v Momcilovic (2010) 25 VR 436 at 464 [103]. 952 R v Momcilovic (2010) 25 VR 436 at 465-466 [105]-[106]. 953 R v Momcilovic (2010) 25 VR 436 at 466 [107]. 954 R v Momcilovic (2010) 25 VR 436 at 466 [108], citing R v Hansen [2007] 3 NZLR Bell burden on the accused955. The Attorney-General for Victoria seeks to uphold the finding, although he contends that in arriving at it the Court of Appeal misapplied s 32(1). The Attorney-General for Victoria contends that the Court of Appeal should have held that the question of justification under s 7(2) is part of and inseparable from the task of statutory interpretation required by s 32(1). In this Court, the Attorney-General for Victoria did not maintain that the provision of a reverse onus in s 5, if construed as imposing a legal burden, is a demonstrably justified limitation on the Charter right. No party and no intervener put such a submission. Nonetheless a principal focus of the parties' submissions was on the relationship between s 7(2) and s 32(1). The parties were at one in submitting that the mandate of s 32(1) is to interpret statutory provisions in a way that is compatible with Charter rights as reasonably limited under s 7(2). Their submissions drew on the reasoning of the majority in Hansen. The Human Rights Law Centre ("the Centre"), appearing as amicus curiae, alone supported the Court of Appeal's interpretation of s 32(1) and the place of s 7(2) in the statutory scheme. I consider that the Court of Appeal's construction pays insufficient regard to the place of s 7 in the scheme of the Charter956. The human rights that the Charter protects and promotes are the civil and political rights in Pt 2957. That Part commences with s 7, which is headed "Human rights β what they are and when they may be limited"958. The rights set out in the succeeding sections of Pt 2 are subject to demonstrably justified limits. This is consistent with the statement in the Preamble that human rights come with responsibilities and must be exercised in a way that respects the human rights of others. It accords with the extrinsic material to which the Court was referred959. The Charter's 955 R v Momcilovic (2010) 25 VR 436 at 469 [119]. 956 Section 7 was described in the Explanatory Memorandum as one of the "key provisions" of the Charter: Victoria, Legislative Assembly, Charter of Human Rights and Responsibilities Bill 2006, Explanatory Memorandum at 7. 957 Charter, s 3(1), definition of "human rights". 958 Section 36(2A) of the Interpretation of Legislation Act 1984 (Vic) provides that headings to sections form part of Acts passed on or after 1 January 2001. 959 The Explanatory Memorandum stated that s 7(2) reflects "Parliament's intention that human rights are, in general, not absolute rights, but must be balanced against each other and against other competing public interests": Victoria, Legislative Assembly, Charter of Human Rights and Responsibilities Bill 2006, Explanatory Memorandum at 9. The Attorney-General's second reading speech recorded that the Bill provides that "rights should not generally be seen as absolute but must be balanced against each other and against other competing public interests": Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 4 May 2006 at (Footnote continues on next page) Bell recognition that rights may be reasonably limited and that their exercise may require consideration of the rights of others informs the concept of compatibility with human rights. That concept is central to the ways in which the Charter applies to the Parliament, to courts and tribunals and to public authorities960. The Charter requires statements of compatibility to be prepared by the Member introducing a Bill into a House of Parliament961. The statement must state whether, in the Member's opinion, the Bill is compatible with human rights962. The Scrutiny of Acts and Regulations Committee ("the Committee") is under a duty to consider any Bill introduced into Parliament and to report to the Parliament as to whether the Bill is incompatible with human rights963. The Committee has a similar obligation to review all statutory rules964. The Centre submitted that these provisions are to be understood as requiring a Member introducing a Bill that contains a minor demonstrably justified limitation on a Charter right to inform the Parliament that the Bill is incompatible with human rights. In this way, it was said that the purpose of the Charter is vindicated by ensuring parliamentary scrutiny of any limitation on the human rights that it seeks to protect and promote. The submission tends to overlook the potential scope of some of the broadly stated rights. It is possible that the right to move freely within Victoria965 has been reasonably limited by statute and regulations in a variety of ways including those regulating traffic. It is a questionable proposition that informed debate concerning the human rights implications of proposed legislation is advanced by a construction of the Charter that would require statements of incompatibility for every demonstrably justified limitation of a Charter right. The Charter applies to public authorities by obliging them to act in a way that is compatible with human rights. Section 38 relevantly provides: 1291. See also Victoria, Human Rights Consultation Committee, Rights, Responsibilities and Respect, (2005). 960 Charter, s 1(2)(b), (c) and (d). 961 Charter, s 28(2). 962 Charter, s 28(3). 963 Charter, s 30. 964 Subordinate Legislation Act 1994 (Vic), s 21. 965 Charter, s 12. Bell "(1) Subject to this section, it is unlawful for a public authority to act in a way that is incompatible with a human right or, in making a decision, to fail to give proper consideration to a relevant human right. Subsection (1) does not apply if, as a result of a statutory provision or a provision made by or under an Act of the Commonwealth or otherwise under law, the public authority could not reasonably have acted differently or made a different decision. Example Where the public authority is acting to give effect to a statutory provision that is incompatible with a human right. One reason for concluding that compatibility with human rights for the purposes of the Charter is to be understood as compatibility with the rights as reasonably limited under s 7(2) is the improbability that the Parliament intended to make unlawful the demonstrably justified acts of public authorities which happen to reasonably limit a Charter right. Contrary to the Centre's submission, s 38(2) will not always be engaged to protect a public authority in such a case. The Centre supported the Court of Appeal's construction of ss 7(2) and 32(1) by a textual consideration. Section 32(1) does not say that statutory provisions are to be interpreted in a way that is "compatible with human rights as reasonably limited". One answer is to observe that the human rights of which s 32(1) speaks are the rights in Pt 2 as reasonably limited by s 7(2). However, it was said that this ignores that s 7(2) assumes the existence of a "law" that limits human rights and requires an assessment of the limitation including its purpose and extent. The "proportionality assessment" which s 7(2) requires is submitted to be inconsistent with a process of interpretation. The Centre acknowledged in its written submissions that "[n]one of this is to say that the rights are absolute; the scope of some of the rights is expressly limited and they must, in any event, be read together". However, if s 7(2) does not inform the interpretive function, there is no mechanism for the court in interpreting statutory provisions in a rights compatible way to recognise the need for rights to be read together. As the Centre's submission noted, some Charter rights are subject to express limitations. Consideration of whether a statutory provision is compatible with the right of freedom of expression must require determination of whether any apparent limitation is a reasonably necessary limitation within s 15(3) of the Charter. It is a task that may be thought to be of the same character as the determination of whether an apparent limitation on the right of peaceful assembly is demonstrably justified within s 7(2). Bell The Victorian Attorney-General's submission that the question of justification in s 7(2) is part of, and inseparable from, the process of determining whether a possible interpretation of a statutory provision is compatible with human rights should be accepted. It is a construction that recognises the central place of s 7 in the statutory scheme and requires the court to give effect to the Charter's recognition that rights are not absolute and may need to be balanced against one another. The point is made by Blanchard J in Hansen966: "It would surely be difficult to argue that many, if any, statutes can be read completely consistently with the full breadth of each and every right and freedom in the Bill of Rights. Accordingly, it is only those meanings that unjustifiably limit guaranteed rights or freedoms that s 6 requires the Court to discard, if the statutory language so permits." (emphasis in original) If the literal or grammatical meaning of a provision appears to limit a Charter right, the court must consider whether the limitation is demonstrably justified by reference to the s 7(2) criteria. As the Commonwealth submitted, these are criteria of a kind that are readily capable of judicial evaluation967. Consideration of the purpose of the limitation, its nature and extent, and the question of less restrictive means reasonably available to achieve the purpose are matters that commonly will be evident from the legislation. If the ordinary meaning of the provision would place an unjustified limitation on a human right, the court is required to seek to resolve the apparent conflict between the language of the provision and the mandate of the Charter by giving the provision a meaning that is compatible with the human right if it is possible to do so consistently with the purpose of the provision. Provisions enacted before the Charter may yield different, human rights compatible, meanings in consequence of s 32(1). However, the scope for this to occur is confined by the requirement of consistency with purpose. This directs attention to the intention, objectively ascertained, of the enacting Parliament. The task imposed by s 32(1) is one of interpretation and not of legislation. It does not admit of "remedial interpretation" of the type undertaken by the Hong Kong Court of Final Appeal as a means of avoiding invalidity968. 966 [2007] 3 NZLR 1 at 27 [59]. 967 Thomas v Mowbray (2007) 233 CLR 307 at 331-334 [20]-[28] per Gleeson CJ, 344-348 [71]-[82], 350-351 [88]-[92] per Gummow and Crennan JJ, 507 [596] per Callinan J; [2007] HCA 33; Attorney-General (Cth) v Alinta Ltd (2008) 233 CLR 542 at 553-554 [14] per Gummow J, 597 [168]-[169] per Crennan and Kiefel JJ; [2008] HCA 2. 968 HKSAR v Lam Kwong Wai (2006) 9 HKCFAR 574 at 604-608 [57]-[66]. Bell The appellant's and the Commission's submissions assume that an evidential burden respecting disproof of the fact of possession in the prosecution of drugs offences is a demonstrably justified limitation on the right to be presumed innocent. That assumption was not called into question and may be accepted for present purposes. The difficulty in acceding to the appellant's and the Commission's rights compatible interpretation of s 5 is its plain language and its purpose. The Court of Appeal was right to conclude that it is not possible, applying the interpretive rule of s 32(1), to interpret s 5 as placing a mere evidential burden upon an accused969. Possession for sale On the appeal in this Court, the appellant relied on an alternative submission respecting the construction of s 5. She contended that the provision is not engaged in a prosecution for the offence of trafficking in a drug of dependence under s 71AC. Section 71AC is in Pt V, which contains the offences of possession of, and trafficking in, drugs of dependence. Section 71AC provides: "Trafficking in a drug of dependence A person who, without being authorized by or licensed under this Act or the regulations to do so, trafficks or attempts to traffick in a drug of dependence is guilty of an indictable offence and liable to level 4 imprisonment (15 years maximum)." Section 70 defines a number of words and expressions for the purposes of the offences contained in Pt V. Section 70(1) contains an inclusive definition of traffick: "traffick in relation to a drug of dependence includes β prepare a drug of dependence for trafficking; (b) manufacture a drug of dependence; or sell, exchange, agree to sell, offer for sale or have in possession for sale, a drug of dependence". The prosecution of the appellant engaged s 73(2), which should also be noted: 969 R v Momcilovic (2010) 25 VR 436 at 469 [119]. Bell "Where a person has in his possession, without being authorized by or licensed under this Act or the regulations to do so, a drug of dependence in a quantity that is not less than the traffickable quantity applicable to that drug of dependence, the possession of that drug of dependence in that quantity is prima facie evidence of trafficking by that person in that drug of dependence." The appellant's deemed possession of a quantity of methylamphetamine exceeding the traffickable quantity970 was relied upon at the trial as prima facie evidence of trafficking by way of her "possession for sale" of the drug. Section 5 is set out earlier in these reasons. It is in Pt I of the Drugs Act, which deals with introductory and transitional matters. In the appellant's submission, s 5 does not speak to the composite expression "possession for sale" in the definition of trafficking. Section 5 does not define possession; it deems a person to be in possession of a substance when the conditions for its engagement are met and it does so for "the purposes of [the] Act". A prosecution for an offence of trafficking based on the accused's possession of a quantity of a drug in excess of the traffickable quantity requires proof of the fact of possession. At the appellant's trial, s 5 was engaged once the prosecution established her occupation of the premises in which the methylamphetamine was located to prove the fact of possession. Nothing connected the appellant to the drugs save the fact of her occupancy of the apartment in which they were found. While occupancy of premises in which illicit drugs are present may support an inference of possession, in this case there was no basis for excluding that the drugs were possessed by Velimir Markovski and no evidence to support an inference that the appellant was in joint possession with him. It was only by proof of the conditions for the engagement of s 5 that the prosecution established a prima facie case against the appellant. It is not possible, consistently with the purpose of the provision, to interpret s 5 as not engaged in a prosecution for the offence of trafficking contrary to s 71AC. Proof of the mental element of the trafficking offence The sufficiency of the trial judge's directions was attacked on five sub- grounds before the Court of Appeal971. In this Court, the challenge is confined to 970 At the material time, the traffickable quantity for methylamphetamine was six grams: Drugs Act, Pt 3 of Sched 11. 971 "The learned judge erred in his directions on possession and trafficking; and in particular he erred: (Footnote continues on next page) Bell two of those complaints. Together they amount to the contention, summarised by the Court of Appeal, that the trial judge ought to have directed the jury that972: "[T]he applicant could not have the drug in her possession for sale, and therefore could not be guilty of trafficking, unless the prosecution proved beyond reasonable doubt that she knew of the presence of the drug." The Court of Appeal dealt with this complaint shortly, saying that the identical submission had been made and rejected in R v Georgiou973. The Court of Appeal observed that the defence case had not been conducted on the footing that, should the appellant fail to prove that she was not in possession of the drugs, the jury might find that she nevertheless lacked the intent to possess the drugs for sale974. in directing that, if the applicant failed to prove lack of knowledge of the drug on the balance of probabilities, 'then you must find that [she] was in possession of the drug'; in failing to direct that, even if the applicant failed to prove that she did not know of the presence of the drug, she would not be in possession if she proved that she did not intend to possess the drug to the exclusion of others not acting in concert with her; in failing to direct on the meaning of possession at common law; in failing to direct that the applicant could not have the drug in her possession for sale, and therefore could not be guilty of trafficking, unless the prosecution proved beyond reasonable doubt that she knew of the presence of the drug; in failing to direct adequately on the 'prima facie' provision in s 73(2) of the Drugs, Poisons and Controlled Substances Act 1981 (Vic); in directing in a manner that suggested that there was uncontradicted evidence of possession of six grams of the drug; in failing to instruct that there was evidence to the contrary; and in failing to identify that evidence." 972 R v Momcilovic (2010) 25 VR 436 at 480 [164]. 973 R v Momcilovic (2010) 25 VR 436 at 481 [165], citing R v Georgiou [2009] VSCA 974 R v Momcilovic (2010) 25 VR 436 at 481 [166]. Bell On the appeal in this Court it was not in issue that the Court of Appeal misconstrued Georgiou. That case held that, in a prosecution for trafficking based upon the engagement of ss 5 and 73(2), it is necessary for the Crown to prove the intention to possess the drug for sale975. The Court of Appeal in Georgiou approved Callaway JA's observations in R v Tragear976: "[E]ven if the Crown successfully invokes s 5 in relation to counts 1 [trafficking] and 2 [possession] to establish possession, it will still have to prove beyond reasonable doubt that the applicant knew of the cocaine in the knapsack in order to secure a conviction on count 1 [trafficking]. Otherwise he would lack the requisite mens rea, of which s 73(2) is only prima facie evidence." The Director of Public Prosecutions maintained that the Court of Appeal's rejection of the appellant's complaint accords with the decision in R v Clarke and Johnstone977. He submitted that Clarke and Johnstone is an authority of long standing to which the courts in Tragear and Georgiou did not refer. The prosecution case against Johnstone at trial was put on alternative bases: he was the occupier of the farm on which cannabis was located or he was aiding and abetting the owner of the farm in trafficking in the plant. The jury were directed of the necessity that the prosecution prove beyond reasonable doubt that Johnstone was aware of the existence of the cannabis. The Full Court commented that the direction was too favourable respecting the deemed possession case but necessary in the aiding and abetting case978. The issue here raised was not live in Clarke and Johnstone. The Full Court in Clarke and Johnstone correctly noted the differing operation of s 5 and s 73(2), observing that the latter does not deem any fact to exist nor reverse an onus of proof979. A prima facie case against an accused admits of a conviction in the absence of further evidence but it does not require that result. Possession of a quantity of a drug exceeding the traffickable quantity is prima facie evidence of trafficking because such a quantity is taken to support the inference that the drug is possessed for sale. The offence of trafficking requires proof of the intention to traffick in the drug. A prosecution for trafficking that engages ss 5 and 73(2) to establish trafficking by way of possession of a quantity of a drug for sale requires proof that the accused had that intention. 975 R v Georgiou [2009] VSCA 57 at [6], [51]. 976 R v Georgiou [2009] VSCA 57 at [48], citing R v Tragear (2003) 9 VR 107 at 978 R v Clarke and Johnstone [1986] VR 643 at 660. 979 R v Clarke and Johnstone [1986] VR 643 at 659. Bell The trial judge's directions to the jury The trial was conducted on the footing that it was for the appellant to satisfy the jury on the balance of probabilities that she did not know of the existence of the drugs980. The Court of Appeal considered this to be a correct analysis and rejected the submission that it was necessary for the jury to be instructed that the appellant could not have been in possession of the drugs for sale unless the prosecution proved that she knew of the existence of them981. Nonetheless, the Director of Public Prosecutions submits that an analysis of the directions reveals that the jury were informed of the need for the prosecution to prove that the appellant intentionally trafficked in the drugs. The submission should be rejected. In the opening section of the charge, the trial judge directed the jury that: "In this case the Crown must prove all the elements of the offence, which I will come back to in a moment, beyond reasonable doubt, however, as both counsel have said, the accused must satisfy you that she did not know of the existence of the drugs on the balance of probability." The trial judge went on to explain that, in the event the appellant failed to prove that she was not in possession of the drug, it would be necessary to consider the second element of the offence, which required the prosecution to prove that she intentionally trafficked in the drug. The directions respecting this element included that the prosecution must prove that the appellant "deliberately possessed for sale a prohibited drug". In the concluding part of the charge his Honour said this: "You must look at all the evidence, including the quantity of drugs possessed by Vera Momcilovic and consider whether you are satisfied beyond reasonable doubt that she intentionally had, in her possession for sale, a prohibited drug. If you don't accept, on the balance of probabilities that she didn't know about the drugs, then you must consider this second element, whether she possessed them for sale and what the law says, as I have just said to you, is if you possess more than six grams of methylamphetamine in a sufficient β for you to find that she was possessing it for sale, for trafficking." (emphasis added) 980 R v Momcilovic (2010) 25 VR 436 at 479-480 [161]-[162]. 981 R v Momcilovic (2010) 25 VR 436 at 480-481 [164]-[166]. Bell The directions on proof of intention focussed on whether in the circumstances, including the quantity of the drug possessed by the appellant, the inference to be drawn was that her intention was to possess the drug for sale. The quantity of the drug made that inference well nigh irresistible. The central issue at the trial was the appellant's knowledge (or lack of knowledge) of the drug. On this issue the only direction was that it was upon the appellant to prove her lack of knowledge. What the directions concerning the intention to possess the drug for sale failed to tell the jury was that, if they considered it probable that the appellant knew of the drugs but they entertained a doubt about that matter, it was their duty to acquit. There was evidence that the appellant was a person of good character and other evidence that was capable of raising the reasonable possibility that she was not aware of the existence of the drugs. This included her evidence of working long hours and of rarely cooking meals at home. The failure to direct the jury that the appellant could not be convicted of trafficking in the drug unless the prosecution proved her knowledge of its existence, in the circumstances of the trial, was productive of a substantial miscarriage of justice. The appellant submitted that this Court should enter a verdict of acquittal. She advanced three reasons in support of the making of that order. First, she will by now have served the term of her sentence982. Secondly, she submitted that it is unlikely that she would be convicted at a trial at which the prosecution is required to prove her knowledge of the drug beyond reasonable doubt. Thirdly, it is more than five years since the events giving rise to the charge. It is not suggested that any delay associated with the proceedings has been brought about by the prosecution and nothing in the conduct of the prosecution at the trial militates against an order for a new trial. The charge involves an allegation of serious criminal conduct. The appropriate order is for a new trial. I agree with the orders proposed by French CJ. 982 The Court of Appeal allowed the appellant's appeal against the severity of sentence. The appellant was resentenced to a term of 18 months' imprisonment. All save the 52 days that the appellant had served was suspended for 16 months. |
HIGH COURT OF AUSTRALIA QUEANBEYAN CITY COUNCIL APPELLANT AND ACTEW CORPORATION LTD & ANOR RESPONDENTS Queanbeyan City Council v ACTEW Corporation Ltd [2011] HCA 40 5 October 2011 C2/2011 & C3/2011 Matter No C2/2011 ORDER Set aside sub-paragraphs 8(a) and 8(b) of the Order of the Full Court of the Federal Court of Australia made on 29 October 2010 and, in their place, order that each party bear its own costs of the appeal and the cross-appeal to that Court. 2. Otherwise, appeal dismissed. Matter No C3/2011 Set aside sub-paragraphs 8(a) and 8(b) of the Order of the Full Court of the Federal Court of Australia made on 29 October 2010 and, in their place, order that each party bear its own costs of the appeal to that Court. 2. Otherwise, appeal dismissed. On appeal from the Federal Court of Australia Representation P J Hanks QC with J K Kirk and P D Keyzer for the appellant in both matters (instructed by Williams Love & Nicol) B W Walker SC with C L Lenehan for the first respondent in both matters (instructed by HWL Ebsworth Lawyers) J T Gleeson SC with C C Spruce for the second respondent in both matters (instructed by ACT Government Solicitor) Interveners R G Orr QC, Acting Solicitor-General of the Commonwealth with S P Donaghue and C G Button intervening on behalf of the Attorney-General of the Commonwealth (instructed by Australian Government Solicitor) R J Meadows QC, Solicitor-General for the State of Western Australia with A J Sefton intervening on behalf of the Attorney-General for the State of Western Australia (instructed by State Solicitor (WA)) M G Sexton SC, Solicitor-General for the State of New South Wales with J G Renwick intervening on behalf of the Attorney-General for the State of New South Wales (instructed by Crown Solicitor (NSW)) W Sofronoff QC, Solicitor-General of the State of Queensland with G J D del Villar intervening on behalf of the Attorney-General of the State of Queensland (instructed by Crown Law (Qld)) M G Hinton QC, Solicitor-General for the State of South Australia with E F Handshin intervening on behalf of the Attorney-General for the State of South Australia (instructed by Crown Solicitor (SA)) M G Hinton QC, Solicitor-General for the State of South Australia with S D Gates intervening on behalf of the Attorney-General of the State of Tasmania (instructed by Crown Law (Tas)) S G E McLeish SC, Solicitor-General for the State of Victoria with K L Walker intervening on behalf of the Attorney-General for the State of Victoria (instructed by Victorian Government Solicitor) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Queanbeyan City Council v ACTEW Corporation Ltd Constitutional law (Cth) β Duties of excise β Water Resources Act 1998 (ACT) and Water Resources Act 2007 (ACT) imposed licence fees upon first respondent for extracting water from Australian Capital Territory water catchments, and Utilities (Network Facilities Tax) Act 2006 (ACT) imposed charge upon first respondent calculated by reference to route length of its water infrastructure network β First respondent passed on cost of imposts to appellant β Territory- owned Corporations Act 1990 (ACT) provided that first respondent was a "territory-owned corporation" and regulated share ownership, corporate decision- making and corporate borrowing of first respondent β Section 8(1) also provided that first respondent is not "the Territory" only because of its status as a "territory-owned corporation" β Whether first respondent identified with government of Australian Capital Territory β Whether imposts are duties of excise β Whether imposts are financial arrangements internal to government of Australian Capital Territory. Words and phrases β "compulsory exaction", "duties of excise", "extensive control", "identified with the Territory", "tax". Constitution, ss 90, 122. Australian Capital Territory (Self-Government) Act 1988 (Cth), Pts III, IV, VII. Territory-owned Corporations Act 1990 (ACT), Pts 2, 3, 4, ss 6-8, Sched 4. FRENCH CJ, GUMMOW, HAYNE, CRENNAN, KIEFEL AND BELL JJ. These appeals from the Full Court of the Federal Court (Keane CJ, Stone and Perram JJ)1 were heard together. They involve matters of constitutional law, but, as is often the case in such litigation, close attention first is required to the terms of the legislation to which the relevant constitutional law principles are to be applied. Queanbeyan City Council By force of s 220 of the Local Government Act 1993 (NSW) ("the Local Government Act"), the appellant ("Queanbeyan") is a body politic of the State of New South Wales with perpetual succession and the legal capacity and powers of an individual. Pursuant to s 219 of the Local Government Act, Queanbeyan is constituted as the council for the area of the City of Queanbeyan. This area adjoins that of the Australian Capital Territory ("the Territory"), the second respondent. Section 24 of the Local Government Act empowers Queanbeyan to provide goods, services and facilities to the local community. To that end, Queanbeyan obtains water supplies from the first respondent ("ACTEW"). Queanbeyan contends that by its laws the Territory has invalidly imposed on ACTEW charges which answer the description of duties of excise within the meaning of s 90 of the Constitution, and that these charges have been wrongly passed on by ACTEW to Queanbeyan. The occasion for the litigation thus is presented by the interaction between s 90 of the Constitution and the position of the Territory, for which provision is made in s 122 of the Constitution. The Self-Government Act In Berwick Ltd v Gray2 Mason J, with whom Barwick CJ, McTiernan J and Murphy J agreed, said of the power conferred upon the Parliament by s 122 that it was wide enough to enable the Parliament "to endow a [t]erritory with separate political, representative and administrative institutions, having control of the Australian Capital Territory its own fiscus." (Self-Government) Act 1988 (Cth) ("the Self-Government Act") established the Thereafter, s 7 of 1 Australian Capital Territory v Queanbeyan City Council (2010) 188 FCR 541. (1976) 133 CLR 603 at 607; [1976] HCA 12. Crennan Bell Territory "as a body politic under the Crown". The term "Territory" is used in the Self-Government Act sometimes to mean that body politic and on other occasions is used in a geographic sense (s 3). Part III (ss 8-21) of the Self-Government Act established the Legislative Assembly of the Territory, and Pt IV (ss 22-35) provided for its powers. Pt V (ss 36-48) established the "Australian Capital Territory Executive" (s 36). This has the responsibilities of executing and maintaining enactments and subordinate laws, of exercising powers vested in the Executive (including those vested by or under an agreement or arrangement with the Commonwealth), and of governing the Territory with respect to matters in Sched 4 (s 37). Among the matters listed in Sched 4 is "Water resources". Part VII (ss 57-65) is headed "Finance". With respect to the Territory fiscus, Pt VII does not create a "Consolidated Revenue Fund" in terms corresponding to ss 81 and 82 of the Constitution. However, the effect of ss 57 and 58 of the Self-Government Act is that revenue, loans and other monies received by the Territory may be invested as provided by an enactment, and are not to be issued or spent except as authorised by an enactment. The Commonwealth is to conduct its financial relations with the Territory by treating it on the same basis as the States and the Northern Territory, but having regard to "the special circumstances" arising from the existence in the Territory of the national capital and the seat of government of the Commonwealth (s 59). Sections 90 and 122 of the Constitution In Berwick Ltd v Gray3, the power conferred upon the Parliament by s 122 of the Constitution, later exercised in enacting the Self-Government Act, had been described as a "plenary power". That expression appears to have its origin in 19th century Privy Council decisions which rejected submissions that certain colonial legislatures, being "delegates" of the Imperial Parliament, were incompetent to pass what would now be identified as delegated legislation4. The expression is apt to mislead, or at least to confuse, when applied to the structure (1976) 133 CLR 603 at 607. 4 Newcrest Mining (WA) Ltd v The Commonwealth (1997) 190 CLR 513 at 604-605; [1997] HCA 38. Crennan Bell created for Australia by the Constitution5. So it proved to be the case when in Berwick it was applied to s 122. For it is established by subsequent authorities, the most recent of which is Wurridjal v The Commonwealth6, that s 122 is not disjoined from the body of the Constitution. The genesis of the present dispute is a proposition founded in another of these authorities, Capital Duplicators Pty Ltd v Australian Capital Territory7. This decision established that, while the endowment upon the Legislative Assembly of the Territory by s 22 of the Self-Government Act of the power to make laws for its peace, order and good government is supported by s 122 of the Constitution, s 122 is constrained so as to preclude conferral by the Parliament of power upon the Legislative Assembly to impose duties of excise within the meaning of s 90 of the Constitution8. The Territory water supply Something now should be said respecting the Territory water supply. At the time of the Seat of Government Acceptance Act 1909 (Cth) ("the Acceptance Act"), s 4 of the Water Rights Act 1902 (NSW) vested in the Crown the right to the use and flow and to the control of the water in all rivers and lakes flowing through or past or situated within the land of two or more occupiers. The effect of s 6 of the Acceptance Act was that the New South Wales law continued in force in the Territory until other provision was made. Section 13 of the Water Resources Act 1998 (ACT) ("the 1998 Water Act") vested in the Territory the rights to the "use, flow and control" of all water of the Territory, subject to an exception not here relevant. The 1998 Water Act was replaced by the Water Resources Act 2007 (ACT) ("the 2007 Water Act"), which, in s 7, makes similar provision. The rights vested in the Territory by these statutes are exercisable by the responsible Minister on behalf of the Territory. 5 New South Wales v The Commonwealth (Work Choices Case) (2006) 229 CLR 1 at 117 [186]; [2006] HCA 52. (2009) 237 CLR 309; [2009] HCA 2. (1992) 177 CLR 248; [1992] HCA 51. (1992) 177 CLR 248 at 277-279, 289-290. Crennan Bell The primary judge (Buchanan J) said9 of the present situation that all of the water abstracted by ACTEW lies or flows in areas under the direct control of the Territory, and continued: "The [Territory] controls two water catchment areas, one in the [Territory], known as the Cotter Catchment, and one in New South Wales. The New South Wales catchment is the Googong Dam Area which was acquired by the Commonwealth in October 1973 for the purpose of the provision of facilities for the storage of water and its supply for use in the [Territory]. The Canberra Water Supply (Googong Dam) Act 1974 (Cth) vested the rights to use and dispose of all waters in the Googong Dam Area in [the Commonwealth] but gave the [Territory] Executive the power to exercise such rights (s 11(2)). Recently the [Territory] has been granted a 150 year lease by the Commonwealth over the Googong Dam Area. Water is also taken from the Murrumbidgee River within the [Territory]." Nothing in this litigation involves the use and flow of the water in Lake Burley Griffin. ACTEW Something now should be said of the provenance of ACTEW. The Electricity and Water Ordinance 1988 was made under s 12 of the Seat of Government (Administration) Act 1910 (Cth), and established as a body corporate the Australian Capital Territory Electricity and Water Authority ("the Authority") (s 4). The functions of the Authority included the supply of electricity and water (s 5). The capital of the Authority was payable to the Commonwealth in accordance with s 39(2), and provision was made by s 41 for the payment of dividends to the Commonwealth. Thereafter, s 4 of the Electricity and Water (Corporatisation) (Consequential Provisions) Act 1995 (ACT) vested the rights and liabilities of the Authority primarily in ACTEW. On 30 May 1995, the Australian Securities Commission issued a certificate of registration of ACTEW under the provisions of Pt 2.2, Div 1 of the Corporations Act 1989 (Cth), providing for its incorporation by registration as a public company limited by shares. Section 6(1) 9 Queanbeyan City Council v ACTEW Corporation Ltd (2009) 178 FCR 510 at 514 Crennan Bell of the Territory-owned Corporations Act 1990 (ACT) ("the Territory-owned Corporations Act") provides that, as a corporation identified in Sched 1, ACTEW is a Territory-owned corporation. It will be necessary to refer later in these reasons to additional provisions of this statute. These have a particular significance for the outcome of the present appeals. The 1998 Water Act made it an offence for a person to take water without a licence (s 33(1)). Similar provision is made under the 2007 Water Act (s 77A). ACTEW has held a licence under the 1998 Water Act and presently holds a licence under the 2007 Water Act. The current licence authorises ACTEW to provide water services and sewerage services and to take water which lies in or flows in the areas described above as being under the control of the Territory. The 1998 Water Act provided that the licence might be granted subject to conditions (s 35), and s 78 conferred upon the responsible Minister power by determination to set fees payable by licensees. Similar provision is made respectively by ss 31 and 107 of the 2007 Water Act. ACTEW supplies water not only to residents and businesses within the Territory but also to those within the City of Queanbeyan. ACTEW charges Queanbeyan for that water pursuant to a set of principles agreed between them and based in part upon the premise that ACTEW will recover from Queanbeyan its costs of supplying that water. The costs to ACTEW include imposts placed upon it by Territory legislation. The water licence fees and the utilities tax Argument in the litigation has fixed upon two determinations, the first made by the responsible Minister under s 78 of the 1998 Water Act on 18 December 2003, and the second made by the responsible Minister on 31 July 2007 under s 107 of the 2007 Water Act. The significant provision in each determination is the fixing of the fee for what is identified as a licence to take water "for the purposes of urban water supply". It is not suggested that there is any urban water supplier in addition to ACTEW. These fees ("the water licence fees") previously were calculated on the basis of water charged to users per kilolitre, but are now calculated by reference to the amount of water extracted from the Territory catchments. Water licence fees were charged from 1 January 2000, with the fee imposed on ACTEW fixed at a level of 10 cents per kilolitre. The determinations the focus of this litigation had the effect of increasing that fee to 55 cents per kilolitre. Queanbeyan did not contend that the water licence fees set at the initial level of 10 cents per kilolitre were invalid. Crennan Bell Commencing on 1 January 2007, the Territory also imposed upon ACTEW a liability to pay a charge imposed by reference to the route length of the infrastructure network for the supply and delivery of water to its customers. Section 8(1) of the Utilities (Network Facilities Tax) Act 2006 (ACT) imposes what it describes as a tax on the owner of each "network facility" on land in the Territory. This term is expressed to include the network consisting of the infrastructure used in relation to the collection and treatment of water (ss 6(1), 7(a)), and thus the ACTEW infrastructure. The rate is determined by the responsible Minister under s 139 of the Taxation Administration Act 1999 (ACT). This charge may be described as the "utilities tax". In deciding whether the utilities tax is an excise, it is not to the point that it also may be imposed upon the owners of other network facilities as well as ACTEW10, and that these other owners may not be identified with "the Territory". The litigation Buchanan J held11 that the utilities tax was a duty of excise within the meaning of s 90 of the Constitution. The Full Court12 decided that, whether or not the utilities tax was a tax in the sense of the Constitution, it was not a duty of excise. With respect to the water licence fees, the primary judge held13 that these were not taxes, and the majority of the Full Court (Keane CJ and Stone J)14 agreed. Perram J15 would have remitted the matter to the primary judge for consideration of what was said to be expert evidence bearing upon the relationship between the fee and the value of that which was acquired by the licensee. Queanbeyan appeals against both holdings by the Full Court. There were interventions by the Commonwealth, Western Australia, New South Wales, Queensland, South Australia, Tasmania and Victoria. 10 Logan Downs Pty Ltd v Queensland (1977) 137 CLR 59 at 78; [1977] HCA 3. 11 (2009) 178 FCR 510 at 543-544 [160]-[164]. 12 (2010) 188 FCR 541 at 579 [152], 580 [160], 584 [180]. 13 (2009) 178 FCR 510 at 536 [126]. 14 (2010) 188 FCR 541 at 564-565 [81]-[83], 583 [177]. 15 (2010) 188 FCR 541 at 588-589 [197]-[198]. Crennan Bell By its Notices of Contention, ACTEW supports the outcome in the Full Court on an additional ground. This is that the imposts were but an aspect of the internal financial arrangements between ACTEW and the Territory. At the hearing of the appeals, Queanbeyan dealt first with this submission. The submission then was elaborated by ACTEW in its oral submissions, with the support of the Territory. Among the interveners, the principal support for ACTEW came from Queensland. Financial arrangements internal to the Territory government? The description by Latham CJ16 of a tax as a compulsory exaction of money by a public authority for public purposes, enforceable by law, which is not a payment for services rendered, in some respects requires further analysis17. But it may be accepted for present purposes. Here, the relevant "public authority" is the Territory. In the Full Court, Keane CJ observed18: "When it is said that a tax is a compulsory exaction by a public authority for public purposes, what is in contemplation is an exercise of the power of the government lawfully to take from the governed, as opposed to the internal financial arrangements of the government. On this view, the imposition of the [water licence fees] upon ACTEW is not a tax because it is a governmental financial arrangement." In this Court, Queensland submits, with respect particularly to the Territory, that, of its nature, the exaction of money by a polity for receipt into its fisc cannot be a tax if the exaction is imposed upon an entity which, properly characterised, is indistinct from the polity itself. Further, Queensland submits that ACTEW is so closely identified with the Territory that the exaction of money from ACTEW by the water licence fees and the utilities tax cannot be of the character of taxes as understood in the Constitution and thus these imposts cannot amount to duties of excise within the meaning of s 90. 16 Matthews v Chicory Marketing Board (Vict) (1938) 60 CLR 263 at 276; [1938] HCA 38. 17 Roy Morgan Research Pty Ltd v Commissioner of Taxation [2011] HCA 35 at [36]. 18 (2010) 188 FCR 541 at 554 [51]. Crennan Bell The result is said to be that there is no constraint placed by s 90 upon what otherwise are the powers conferred upon the Territory pursuant to the Self-Government Act to legislate for the imposition of the water licence fees and the utilities tax. It then would follow that Queanbeyan cannot recover its payments to ACTEW representing the passing on to it by ACTEW of burdens illegally imposed upon ACTEW by the Territory laws19. Nor could Queanbeyan resist the cross-claim against it by ACTEW to recover unpaid amounts in respect of the utilities tax. For the reasons which follow, these submissions upon what might be called the threshold issue should be accepted. On that ground, the appeals should be dismissed. Previous authorities In The Federated Amalgamated Government Railway and Tramway Service Association v The New South Wales Railway Traffic Employes Association20, when delivering the judgment of the Court, Griffith CJ said: "[T]he ability of the Colonies to meet their financial obligations in respect of loans was largely dependent upon the successful and profitable employment of the railways. It cannot, in our opinion, be disputed that the State railways were in their inception instrumentalities of the Colonial Governments, and we do not know of any authority for saying that this position was affected by the incorporation of the Railway Commissioners, which, in our opinion, was a matter of purely domestic legislation for the convenience as well of management as of the assertion and enforcement of contractual rights in respect of the commercial transactions involved in the transport of goods and passengers". 19 cf Roxborough v Rothmans of Pall Mall Australia Ltd (2001) 208 CLR 516; [2001] HCA 68. 20 (1906) 4 CLR 488 at 535; [1906] HCA 94. See also General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 131-134; [1964] HCA Crennan Bell More generally, in Deputy Commissioner of Taxation v State Bank (NSW)21, the whole Court observed: that "Once is accepted the Constitution refers the Commonwealth and the States as organizations or institutions of government in accordance with the conceptions of ordinary life, it must follow that these references are wide enough to denote a corporation which is an agency or instrumentality of the Commonwealth or a State as the case may be. The activities of government are carried on not only through the departments of government but also through corporations which are agencies or instrumentalities of government. Such activities have, since the nineteenth century, included the supply on commercial terms of certain types of goods and services by government owned and controlled instrumentalities with independent corporate personalities." Further consideration of the submissions which seek to identify ACTEW with the Territory is assisted by regard to what was held in several recent decisions of the Court. They are SGH Ltd v Federal Commissioner of Taxation22, NT Power Generation Pty Ltd v Power and Water Authority23, and McNamara v Consumer Trader and Tenancy Tribunal24. These authorities indicate that much depends upon the particular issue to which the matter of identity between the polity and an instrumentality is directed, and upon the terms by which their alleged identity is expressed by the legislation in question. McNamara concerned the position of the Roads and Traffic Authority of New South Wales ("the RTA"). This was constituted as a corporation by a statute which also stated that for the purpose of any other statute it was "a statutory body representing the Crown". The RTA was the landlord of certain leased premises to which the tenant contended there applied the protective provisions of the Landlord and Tenant (Amendment) Act 1948 (NSW); that statute stated that it did not bind "the Crown" in right of New South Wales. It was held that the mere statement that the RTA was a statutory body representing 21 (1992) 174 CLR 219 at 230-231; [1992] HCA 6. 22 (2002) 210 CLR 51; [2002] HCA 18. 23 (2004) 219 CLR 90; [2004] HCA 48. 24 (2005) 221 CLR 646; [2005] HCA 55. Crennan Bell the Crown did not have the effect of attracting rights and privileges otherwise conferred upon the executive branch of government identified as "the Crown"25. Further, the Court emphasised, with respect to the notion of "representation" of the Crown, that this required close attention to the functions of the body in question and the degree of control exercisable over it by the executive government; "control" was used to identify the control and direction of the activities of the body in question26. Further, a statutory body might be given the privileges and immunity of the Crown for one purpose and not another27. An issue in NT Power Generation was whether Gasgo Pty Ltd, in which the Power and Water Authority ("PAWA") (a body corporate constituted under a statute of the Northern Territory) beneficially owned all the shares, was not bound by s 46 of the Trade Practices Act 1974 (Cth) because it was "an emanation of the Crown in right of the Northern Territory"28. Critical to the holding that the company was not such an emanation was the consideration that there was nothing in the evidence to indicate that its directors were under any duty to obey directions from PAWA or the Government of the Northern Territory29. SGH concerned the application of that branch of s 114 of the Constitution which forbids the imposition by the Commonwealth of any tax on property of any kind belonging to a State. It was accepted that the term "a State" in s 114 is wide enough to denote a corporation which is an agency or instrumentality of the State30. SGH Ltd ("SGH") was formed under a Queensland statute which provided generally for building societies. There were two classes of shares. "A" class shares were held by depositors and "B" class shares by the State Government Insurance Office ("Suncorp"). This was established as a statutory corporation and said by its statute to represent the Crown. 25 (2005) 221 CLR 646 at 665-666 [53]-[54]. 26 (2005) 221 CLR 646 at 656 [26]-[27], 665 [53]. 27 (2005) 221 CLR 646 at 669 [65]. 28 (2004) 219 CLR 90 at 148-151 [161]-[165]. 29 (2004) 219 CLR 90 at 150 [164]. 30 (2002) 210 CLR 51 at 80 [57], 102-103 [130]. Crennan Bell Gleeson CJ, Gaudron, McHugh and Hayne JJ31 and Gummow J32 emphasised that while it was right to say that Suncorp controlled SGH, that control was not absolute because Suncorp could not lawfully require SGH or its Board to act in disregard of the interests of the "A" class shareholders. Nor could it control general meetings of members in disregard of the interests of those shareholders. In that way, the control which could be exercised by Suncorp over the affairs of SGH was hedged about by the obligation not to disregard the interests of persons other than the State. It followed that SGH was not "the State" for the purposes of s 114 of the Constitution. Callinan J33 identified the following matters as relevant, and noted that only the last, the auditing of accounts by the Auditor-General, favoured the characterisation of SGH as the State of Queensland for the purposes of s 114 of the Constitution; the matters were: "the absence or otherwise of corporators; an explicit obligation of the corporation to conduct its affairs to the greatest advantage of the relevant polity; the participation of the executive government in the process of formulating policy and making decisions; the right or otherwise of the government to appoint directors, and the source of, and responsibility for their remuneration; the destination of profits; and, the obligation or otherwise of the Auditor-General to audit the accounts of the corporation." The Territory-owned Corporations Act What was said in these decisions assists in the characterisation of ACTEW. The Territory-owned Corporations Act applies to ACTEW, subject to the modifications specified in Sched 4 (s 4(1)). The effect of Sched 4 is to remove ACTEW from the prohibition imposed by s 14(1) against the acquisition of partly owned subsidiaries. In other respects the statute applies unamended to ACTEW. 31 (2002) 210 CLR 51 at 71 [26], 73 [32]. 32 (2002) 210 CLR 51 at 85 [70]. 33 (2002) 210 CLR 51 at 103 [131]. Crennan Bell The main objectives of ACTEW are spelled out in s 7. As matters of equal importance, they include: operation at least as efficiently as any comparable business; the maximisation of the sustainable return to the Territory of its investment in ACTEW; the display of a sense of social responsibility; and the conduct of its operations in accordance with the object of ecologically sustainable development. the Territory-owned Corporations Act are additional to obligations imposed by any other law or by the constitution of ACTEW (s 10). Obligations imposed by Shares in ACTEW are held on trust for the Territory (s 13(5)), and voting shares can only be held by a Minister authorised to do so by the Chief Minister (s 13(2), (4)). The powers of the voting shareholders are enhanced by provisions in s 17. Where the voting shareholders request ACTEW to act in a way which differs from that favoured by the directors, and the directors have advised the voting shareholders that it would not be in the best commercial interest of ACTEW to act as the voting shareholders wished, nevertheless the voting shareholders may require ACTEW to comply with their wishes (s 17(1)). ACTEW then must comply with that direction and the directors are not taken to be in breach of any duty under a law or the constitution of ACTEW only because of that compliance (s 17(2), (3)). The Auditor-General must be appointed auditor of ACTEW (s 18(1)). Section 27(1) stipulates that ACTEW must not borrow or raise money except in accordance with Pt 4 (ss 24-28A). In particular, the Treasurer, on behalf of the Territory, may lend money to ACTEW on the terms and conditions determined by the Treasurer (s 24), but ACTEW otherwise may borrow money and raise money by other means only within borrowing limits approved by the Treasurer (s 25(1)), and the Treasurer must not delegate that function of approval (s 25(5)). Section 31 imposes what is described as a "borrowing levy" upon ACTEW; it must pay to the Territory amounts determined by the Treasurer in respect of monies it has borrowed from the Territory or otherwise. ACTEW is obliged to pay a dividend only out of profits lawfully available for the purpose ACTEW is relieved by s 29 from payment of duties, fees, levies and charges payable under Territory statutes in respect of various activities, including the transfer of assets from the Territory to ACTEW (s 29(5)(d)) and the assumption of responsibility by ACTEW for any liability of the Territory (s 29(5)(e)). Crennan Bell Taken together, these provisions of the Territory-owned Corporations Act indicate the extensive control exercised by the Territory executive, and in particular by the Chief Minister, over the conduct of the affairs of ACTEW, and closely identify it with the Territory, being the body politic established by s 7 of the Self-Government Act. In response, Queanbeyan submitted that these considerations, drawn from the range of provisions in the Territory-owned Corporations Act, were outweighed by the significance to be attached to s 8 of that statute. The effect of par (a) of s 8(1) is that ACTEW "is not, only because of its status as a [T]erritory-owned corporation ... the Territory". Section 8(2) is introduced by the word "Accordingly", indicating that what follows does so by reason of the operation of s 8(1) denying to ACTEW the character of "the Territory" where otherwise that would be so only because ACTEW had the "status" of a Territory-owned corporation. Paragraph (a) of s 8(2) then denies entitlement to "any immunity or privilege of the Territory". Paragraph (b) denies that ACTEW is "exempt from a tax, duty, fee or charge payable under an Act"34. Section 8 is said by sub-s (4) to have its effect despite s 121 of the Legislation Act 2001 (ACT). This appears to be a provision for abundant caution, given the statement in s 121(1) that a statute "binds everyone, including all governments". The following points are to be made concerning the significance of s 8. First, the reference to "status as a [T]erritory-owned corporation" is a reference to the identification of ACTEW (and ACTTAB Limited) as a Territory-owned corporation by force of the specification as such by s 6(1) and Sched 1. It is upon this identification or status that there depends the attachment of the whole structure of the statute. Secondly, that acknowledgement of the status of ACTEW does not deny the consequences which flow from the substantive provisions of the Territory-owned Corporations Act for determination of ACTEW as having the identity of the Territory for the purposes of the Constitution. That is to say, s 8 does not deny that which is otherwise evident from a consideration of the statute as a whole. Finally, the circumstance that, by reason of par (b) of s 8(2), ACTEW is not exempt from imposts payable under laws of the Territory provides the occasion for the very question in issue, namely, 34 However, s 8(2)(b) must be read with the relief given ACTEW by s 29 from the imposts identified in s 29. Crennan Bell whether the liability for the payment of these imposts is not more than an intramural financial arrangement. Orders The result is that the threshold issue should be answered adversely to Queanbeyan and each appeal should be dismissed. Upon that contingency, Queanbeyan submitted that there should be no order for costs of the appeals in this Court and that the costs orders in the Full Court should be varied. The Full Court ordered that Queanbeyan pay the costs of the proceeding before the primary judge. Queanbeyan does not seek a change to that order. However, the Full Court also ordered that the costs of the two appeals before it, including a cross-appeal by ACTEW in the appeal concerning the utilities tax, be borne by Queanbeyan. Queanbeyan now seeks a variation so that there be no Full Court costs order in that regard. The result would be that Queanbeyan, ACTEW and the Territory bear their costs of the appeals to this Court and of the proceedings in the Full Court. There was some debate as to whether the issue upon which the respondents have now succeeded had been before the Full Court. An extract from lengthy written submissions by ACTEW to the Full Court was provided to this Court in the course of argument. The extract appears not to be directed squarely to what has become the decisive issue. Further, both Keane CJ35 and Perram J36, while alive to the issue, regarded it as not having been argued before the Full Court. In all the circumstances, the position as to costs should be that sought by Queanbeyan. 35 (2010) 188 FCR 541 at 554 [51]. 36 (2010) 188 FCR 541 at 590 [202]. HEYDON J. This appeal37 turns on what may be called the "water licence fees" and "utilities taxes" which the Government of the Australian Capital Territory requires ACTEW Corporation Limited ("ACTEW") to pay. Are they taxes in the nature of excises? The ensuing discussion concentrates on the water licence fees, but the legal position is the same for the utilities taxes. The case against Queanbeyan City Council case made The primary against Queanbeyan City Council the ("Queanbeyan"), highlighted particularly by Attorney-General of the State of Queensland, was that a charge imposed by one organ of government upon another organ of government is not a tax and hence not an excise. A tax involves a government taking money from the governed, as distinct from merely being an incident of the internal financial arrangements of submissions of the regulated by The structure of ACTEW the Territory-owned Corporations Act 1990 (ACT) ("the Act"). That is because it is a "territory-owned corporation": s 6(1) and Sched 1 of the Act. The Attorney-General of the State of Queensland pointed out the following features of ACTEW. Its voting shareholders are appointed by the Chief Minister of the Australian Capital Territory: s 13(2) of the Act. The voting shareholders must be Ministers of the Australian Capital Territory Government: s 13(4)(a) of the Act. They hold their shares in trust for the Australian Capital Territory: s 13(5) of the Act. The voting shareholders may require the directors to act in a manner different from that in which the directors intend to act, even if the directors think this is not in the best commercial interests of ACTEW: s 17 of the Act. The directors of ACTEW are under a duty, as far as practicable, to comply with the general government policies the voting shareholders tell them are to apply to ACTEW: s 17A of the Act. Whenever ACTEW borrows money, it is obliged to pay to the Australian Capital Territory whatever amount the Australian Capital Territory Treasurer determines: s 31 of the Act. ACTEW's main objectives include objectives which are public in character, for not only must it operate at least as efficiently as comparable businesses and maximise the sustainable return to the Australian Capital Territory on its investment, but it must show a sense of social responsibility by having regard to the interests of the community in which 37 The circumstances are described in the plurality judgment. 38 The following authorities were referred to: Cooley, A Treatise on the Law of Taxation, including the Law of Local Assessments, (1881) at 1; Quick and Garran, The Annotated Constitution of the Australian Commonwealth, (1901) at 550; People v McCreery 34 Cal Rptr 432 at 456 (1868); People v Austin 47 Cal Rptr 353 at 361 (1874); Van Brocklin v Tennessee 117 US 151 at 166 (1886). it operates, and by trying to accommodate or encourage those interests, and, if its activities affect the environment, it must operate in accordance with the objectives of ecologically sustainable development: s 7(1) of the Act. Hence the Attorney-General of the State of Queensland submitted that ACTEW is intimately connected to the Australian Capital Territory and cannot properly be described as independent of it. In similar fashion ACTEW argued that, while the Australian Capital Territory had legal personality distinct from that of ACTEW, the will of the Australian Capital Territory was the will of ACTEW. It argued that if ACTEW acted within the authority created by the provisions of the Act it could not avoid acting in accordance with the will of the Australian Capital Territory Government. It argued that a water licence fee was "not a tax on the creature of government [ie ACTEW] the will of which is the same as the will of the government because there is no compulsion involved in the payment by an entity which is subject to and directed by the same will as the entity purporting to impose the tax." To the provisions assembled by the Attorney-General of the State of Queensland may be added several others. Sub-sections (1) and (2) of s 11 compel the voting shareholders of ACTEW to ensure that its constitution contains provisions to the effect of those required by Scheds 2 and 3. Schedule 2 requires the constitution of ACTEW to contain provisions forbidding alteration of the constitution of ACTEW in a manner inconsistent with Sched 2 unless a resolution approving the alteration or addition has been passed by the Legislative Assembly. Schedule 3, broadly speaking, requires the constitution of ACTEW to contain provisions ensuring compliance with the Act. Further, ss 25(1) and 27(1) restrict the power of ACTEW to borrow, from lenders which are not the Territory, within limits approved by the Australian Capital Territory Treasurer. Section 28A provides that ACTEW must not give a guarantee without the consent of the Treasurer of the Australian Capital Territory. The provisions referred to by the Attorney-General of the State of Queensland and other provisions of a similar kind, referred to above, will be collectively referred to below as "the subordinating provisions". Central to Queanbeyan's submissions was s 8 of the Act. It relevantly provides: "(1) A territory-owned corporation or subsidiary is not, only because of its status as a territory-owned corporation or subsidiary β the Territory; or a representative of the Territory; or a government entity under the Legislation Act, section 121 (Binding effect of Acts). (2) Accordingly, a territory-owned corporation or subsidiary is not, only because of its status as a territory-owned corporation or subsidiary β entitled to any immunity or privilege of the Territory; or exempt from a tax, duty, fee or charge payable under an Act." Queanbeyan accepted the Attorney-General of the State of Queensland. But it advanced numerous submissions seeking to bypass that analysis. the Act made by the analysis of First, Queanbeyan submitted that since s 8(2) made it plain that ACTEW did not enjoy any immunity that might attach to the Australian Capital Territory, it was subject to the constraints created under the Water Resources Act 2007 (ACT), s 30 (and its predecessor, the Water Resources Act 1998 (ACT), s 35). By those provisions ACTEW could be prohibited from taking water without a licence, and it was a condition of the licence that a water licence fee be paid. Section 8(2) of the Act made it clear that ACTEW did not enjoy any immunity that might attach to the Australian Capital Territory, and was not exempt from the water abstraction charge. By deciding to take water for urban water supply, ACTEW had subjected itself to the legal consequences of lawfully engaging in that activity, namely the need to obtain a licence and pay the water licence fees. The water licence fees applied "directly, as law β not as some internal financial adjustment". This did not answer the submission of the Attorney-General of the State of Queensland that the water licence fees were no more than the removal of money from one of the pockets of the Australian Capital Territory to another. It does not establish any independence of will. Then Queanbeyan in effect submitted that in enacting the Water Resources Act 2007 (ACT) the Territory had shown an intention to impose on ACTEW a liability to pay a tax because it was a member of a class that engaged in a particular activity. In similar fashion the Attorney-General of the Commonwealth, who supported Queanbeyan's position, also argued that the water licence fees were taxes because they were of general application. Even if they are, which is questionable, that means only that qua natural persons, or corporations which are not creatures of the Australian Capital Territory, the fees may be taxes; it does not follow that qua corporations which are its creatures they are taxes. Queanbeyan then submitted that if a tax was something taken by a government from the governed, s 8(2) of the Act revealed that the Australian Capital Territory Government had decided to place ACTEW in the position of the governed. While other provisions in the Act might reveal an intention on the part of the Australian Capital Territory Government to act through ACTEW in relation to the supply of water, s 8 denied that intention and revealed an intention that ACTEW need not be part of itself, but separate from it and subordinate to it so far as taxation obligations were concerned. Section 8 directed ACTEW to be as subject to taxation obligations as anyone else, and the direction could not be ignored. Putting aside the perhaps misleading reliance on "intention", this submission exposes a tension between s 8 and the subordinating provisions. If s 8 stood alone, Queanbeyan's argument would have force. But it does not stand alone. Which provisions, then, prevail? The subordinating provisions are not subject to s 8, and s 8 does not compel them to be read down. They are detailed. There is no reason not to give them full force. They support the conclusion that ACTEW has no will the Australian Capital Territory Government's. independent of Queanbeyan submitted that if the argument of the Attorney-General of the State of Queensland succeeded, governments across Australia would not be able to subject their "corporatised" entities to taxation. But they would be able to subject them to charges having the same financial effect. Indeed Queanbeyan accepted that this would be "a bit of bookkeeping β compulsory bookkeeping, but that is what it would be." The water licence fees are in truth a matter of bookkeeping internal to the Australian Capital Territory Government. Queanbeyan argued that there was a legally enforceable obligation on ACTEW, if it took water, to pay licence fees for it. That was said to demonstrate that the will of the Australian Capital Territory was not identical with the will of ACTEW. This second step does not follow. The existence of a legally enforceable obligation resting on a corporation and the existence of a corresponding right in favour of a government are consistent with distinct legal personality, but do not by themselves demonstrate any independence of will in the corporation. It may be assumed for the sake of considering ACTEW's argument that the Australian Capital Territory Government has created a legal obligation on ACTEW to pay the water licence fees, even though the precise source of the legal obligation was never clearly demonstrated, and if there were no legal obligation, there could be no legal compulsion, and the water licence fees could not be taxes. A further difficulty in the argument that ACTEW is independent from the Australian Capital Territory Government flows from the assumption that ACTEW had a legal obligation to pay the water licence fees. It was submitted that s 106 of the Water Resources Act 2007 (ACT) assumes that there may be a fee in the nature of the water licence fee in relation to a licence to take water, and s 107(1) permits the Minister to determine fees. The difficulty is that if ACTEW failed to pay the fees, two powers would be available to the Australian Capital Territory Government. One is the power to suspend the entitlement of ACTEW to take water until the water licence fees are paid, or to cancel the licence: s 106. The second is power to sue for the fees. The proposition that the first power would be exercised β leaving the citizens of the Australian Capital Territory and Queanbeyan without water β is beyond the frontiers of reality. Exercise of the second power is almost equally improbable, for the voting shareholders β Ministers of the Australian Capital Territory Government β could simply issue a direction for payment under s 17 of the Act, and that negates independence of will. But whether payment of the water licence fees is legally binding, or is required by direction from the Australian Capital Territory, is immaterial to the question of whether they are taxes. Queanbeyan argued that s 8(2)(b) was critical in providing that ACTEW is not, only because of its status as a territory-owned corporation, entitled to any immunity of the Australian Capital Territory. But the absence of immunity from having to pay the water licence fees says nothing about whether those fees are taxes, and it does not demonstrate any separation of wills between the Australian Capital Territory Government and ACTEW. Section 8(1)(a) provides that a territory-owned corporation "is not, only because of its status as a territory-owned corporation", the Territory. ACTEW has the status of a territory-owned corporation. It has that status not only because of the subordinating provisions of the Act. Indeed it does not have that status because of the subordinating provisions of the Act at all. It has that status for one reason only. That reason is s 6(1): a company specified in Sched 1 is a territory-owned corporation, and ACTEW is a company specified in Sched 1. Hence the effect of s 8(1)(a) is that ACTEW is not the Australian Capital Territory only because of its status as a territory-owned corporation. It is, however, the Australian Capital Territory by reason of the subordinating provisions of the Act. Section 8(2)(b) provides that ACTEW is "not, only because of its status as a territory-owned corporation", exempt from "a tax, duty, fee or charge payable under an Act." There is no other provision exempting ACTEW from the water licence fees. But the current issue is not whether ACTEW is exempt from a charge: it is whether the charge from which it may or may not be exempt is a tax. Nothing in s 8 immunises or exempts the water licence fees from being characterised as something other than taxes. The subordinating provisions do have the consequence that they are not to be characterised as taxes. Queanbeyan submitted that acceptance of the Attorney-General of the State of Queensland's argument would lead to evasion of s 55 of the Constitution, which requires laws imposing taxation to deal only with the imposition of taxation. it wholly controls, This is not so. If the Commonwealth chooses to bring into being a creature which the Commonwealth money might be outside s 55, but there would be nothing evasive or undesirable about that if in truth the money payments were not taxes. In that example, as the Australian Capital Territory (the second respondent) submitted, there would be lacking "the necessary element of compulsory exaction by public authority on a relevant other." legislation obliging to pay A Commonwealth argument The Attorney-General of the Commonwealth argued that the water licence fees were not taxes because ACTEW was a corporation created under the general law. That argument has already been put to and rejected by this Court39. The criminal liability of ACTEW Some arguments were put in relation to the potential criminal liability of ACTEW in the event that it took water without a licence. The Australian Capital Territory specifically requested that these arguments not be dealt with in view of the fact that the legislation had changed and in view of the fact that they were not decisive arguments in the present controversy either way. In truth they are not decisive, and for that reason it is not necessary and not desirable to deal with them. Orders For those reasons the appeals should be dismissed. In all the circumstances, it is just that the costs orders sought by Queanbeyan be made. 39 SGH Ltd v Federal Commissioner of Taxation (2002) 210 CLR 51; [2002] HCA 18. The argument was put at 62 and rejected at 66-68 [12]-[16] and 75-80 |
HIGH COURT OF AUSTRALIA WORK HEALTH AUTHORITY APPELLANT AND OUTBACK BALLOONING PTY LTD & ANOR RESPONDENTS Work Health Authority v Outback Ballooning Pty Ltd [2019] HCA 2 6 February 2019 ORDER Appeal allowed. Set aside the order made in paragraph 1 of the order of the Court of Appeal of the Supreme Court of the Northern Territory made on 19 October 2017 and the order made in paragraph 1 of the order made on 28 March 2018 and, in their place, order that the appeal to that Court be dismissed with costs. The first respondent pay the appellant's costs of the appeal to this Court. On appeal from the Supreme Court of the Northern Territory Representation S L Brownhill SC, Solicitor-General for the Northern Territory, and T Moses for the appellant (instructed by Solicitor for the Northern Territory) J T Gleeson SC with T J Brennan for the first respondent (instructed by Submitting appearance for the second respondent S P Donaghue QC, Solicitor-General of the Commonwealth, with Z C Heger and T M Wood for the Attorney-General of the Commonwealth, intervening (instructed by Australian Government Solicitor) P J Dunning QC, Solicitor-General of the State of Queensland, with F J Nagorcka for the Attorney-General of the State of Queensland, intervening (instructed by Crown Law Queensland) M E O'Farrell SC, Solicitor-General for the State of Tasmania, with S Elankovan for the State of Tasmania, intervening (instructed by Office of the Solicitor-General β Tasmania) the Attorney-General for K L Walker QC, Solicitor-General for the State of Victoria, with F I Gordon for the Attorney-General for the State of Victoria, intervening (instructed by Victorian Government Solicitor) G T W Tannin SC with J A Godfrey for the Attorney-General for the State of Western Australia, intervening (instructed by State Solicitor's Office Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Work Health Authority v Outback Ballooning Pty Ltd law regulates matters preparatory Constitutional law (Cth) β Powers of Commonwealth Parliament β Territories β laws β Where Inconsistency between Commonwealth and Territory to and Commonwealth civil aviation subsequent to aircraft flight including embarkation and disembarkation of passengers β Where Commonwealth law implements and extends international obligations designed to achieve uniformity in regulation of civil aviation β Where Territory law regulates work health and safety β Whether Commonwealth law designed framework of other State, Territory and Commonwealth laws β Whether Commonwealth law contains implicit negative proposition that it is only law with respect to safety of persons affected by operations of aircraft including embarkation β Whether Territory law inconsistent with Commonwealth law. to operate within Words and phrases β "alter, impair or detract from", "anti-exclusivity clause", "Chicago Convention", "civil aviation", "cover the field", "embarkation", "implicit negative proposition", "indirect inconsistency", "intention to deal completely, exhaustively or exclusively", "legislative intention", "nationally harmonised laws", "operations associated with aircraft", "rule of conduct", "safety standards", "subject matter". Constitution, ss 109, 122. Air Navigation Act 1920 (Cth). Civil Aviation Act 1988 (Cth), ss 3, 3A, 9, 11, 20A, 27, 28BA, 28BD, 28BE, 29, Civil Aviation Regulations 1988 (Cth), regs 2, 215, 235. Crimes Act 1914 (Cth), s 4C. Northern Territory (Self-Government) Act 1978 (Cth), s 6. Work Health and Safety Act 2011 (Cth). Work Health and Safety (National Uniform Legislation) Act 2011 (NT), ss 19, KIEFEL CJ, BELL, KEANE, NETTLE AND GORDON JJ. Outback Ballooning Pty Ltd, the first respondent to this appeal, operates a business in Alice Springs which provides rides in hot air balloons to passengers. On 13 July 2013 a group of persons were taken to a location some distance from Alice Springs airport for that purpose. On their arrival the basket which would hold them was laid on its side pointing towards the balloon, which was spread out on the ground preparatory to its inflation. The intended passengers were given a short briefing during which they were told to avoid the inflation fan. The fan was a stand-alone piece of equipment driven by a motor with a metal guard around its blades. The fan was started. Three passengers boarded. The fourth, Ms Stephanie Bernoth, approached the basket and as she did so the scarf she was wearing was sucked into the inflation fan causing her to be dragged towards the metal guard. Ms Bernoth later died from the injuries she sustained. The NT WHS Act complaint Section 19(2) of the Work Health and Safety (National Uniform Legislation) Act 2011 (NT) ("the NT WHS Act") requires that a person conducting a business or undertaking must ensure, so far as is reasonably practicable, that the health and safety of persons "is not put at risk from work carried out as part of the conduct of the business or undertaking". Section 19(3) provides that, without limiting sub-ss (1) and (2), a person conducting a business or undertaking must ensure, so far as is reasonably practicable, a number of things which are directed to the protection of all persons from risks to their health and safety from work carried out as part of the conduct of the business or undertaking. The NT WHS Act also creates a number of duties which apply to conduct at a "workplace", which is defined as a place where work is carried out for a business or undertaking, and includes an aircraft1. Section 32 of the NT WHS Act provides that if a person who has a health and safety duty fails to comply with that duty, and that failure exposes an individual to a risk of death or serious injury or illness, that person commits a Category 2 offence for which substantial penalties may be imposed2. The Work Health Authority ("the WHA"), the appellant in these proceedings, filed a complaint against the first respondent under s 32 of the NT 1 NT WHS Act, ss 4, 8. 2 $150,000 for an individual, $300,000 for the person conducting the business or undertaking or that person's officer and $1,500,000 in the case of a body corporate. Bell Nettle Gordon WHS Act in which it was alleged that the first respondent failed to comply with the duty imposed by s 19(2) of that Act. The breach of duty referred to in the complaint was identified as a failure to eliminate or minimise risks3 to embarking passengers that arose from the use of a fan to inflate the hot air balloon. The decisions below The complaint was dismissed by the Northern Territory Court of Summary Jurisdiction as invalid because the subject matter of it was within the field covered by the Commonwealth regulatory scheme with respect to aviation. That scheme, Magistrate Bamber considered, extended to pre-flight operations affecting the safety of passengers on the ground. The WHA sought an order in the nature of certiorari from the Supreme Court of the Northern Territory to quash that decision. Barr J held that the Court of Summary Jurisdiction was wrong to hold that it lacked jurisdiction to hear the the complaint, and made Commonwealth regime regulates aviation operations which affect the safety of aviation and passengers in flight but does not extend to all operations. His Honour did not consider that the embarkation procedure, the subject of the complaint, was so closely connected with safety in flight as to be regulated by an In his Honour's view, the order sought4. The Court of Appeal of the Northern Territory allowed the first respondent's appeal from his Honour's decision6. Southwood J (with whom Blokland J agreed)7 and Riley J8 concluded that the Commonwealth aviation law 3 NT WHS Act, s 27(1). 4 Work Health Authority v Outback Ballooning Pty Ltd (2017) 318 FLR 294 at 306 5 Work Health Authority v Outback Ballooning Pty Ltd (2017) 318 FLR 294 at 301 6 Outback Ballooning Pty Ltd v Work Health Authority (2017) 326 FLR 1. 7 Outback Ballooning Pty Ltd v Work Health Authority (2017) 326 FLR 1 at 11-12 8 Outback Ballooning Pty Ltd v Work Health Authority (2017) 326 FLR 1 at 19 [99]. Bell Nettle Gordon was a complete statement of the relevant law and that there was an indirect inconsistency between the Northern Territory law and the Commonwealth aviation law, which extended to the embarkation of passengers. Riley J was of the view that the Commonwealth aviation law was intended to cover the field and was not intended to operate in conjunction with any State or Territory scheme directed to the same end. In reaching these conclusions their Honours followed the decision of a Full Court of the Federal Court in Heli-Aust Pty Ltd v Cahill9. Following a grant of special leave, the WHA appeals to this Court. In this Court, Outback Ballooning contends that the Commonwealth aviation law, as defined below, deals completely, exhaustively or exclusively with the "prescription and enforcement of the standards of safety in the conduct of air navigation or air operations" in Australia. For the reasons that follow, that contention should be rejected. In rejecting that contention, it is important to recognise that there is no dispute that there are aspects of matters preparatory to and subsequent to an aircraft flying, including embarkation and disembarkation of passengers, that are completely, exhaustively or exclusively dealt with by the Commonwealth aviation law. The Commonwealth aviation law The body of law referred to by the Court of Appeal as the Commonwealth civil aviation law comprises the Air Navigation Act 1920 (Cth) ("the ANA"), the Civil Aviation Act 1988 (Cth) ("the CA Act"), the Civil Aviation Regulations 1988 (Cth) ("the CARs") and some Civil Aviation Orders ("CAOs"). These will be referred to as "the Commonwealth aviation law" in the balance of these reasons. Some reference was made in submissions to the Civil Aviation Safety Regulations 1988 (Cth), but they assume no importance in the reasons below. The ANA initially provided for the making of regulations to give effect to the Paris Convention for the Regulation of Aerial Navigation (1919) for the purpose of providing for the regulation of air navigation in Australia. It later approved the ratification of the Chicago Convention on International Civil Aviation (1944) and subsequent Protocols10. It deals with matters such as freedom of the air and the regulation of international airlines, aircraft, airports and flights. It is mentioned only in passing in the reasons of the Court of Appeal. (2011) 194 FCR 502. 10 ANA, s 3A. Bell Nettle Gordon The focus of the reasons in the Court of Appeal is the CA Act and the CARs and CAOs made under it. The CA Act has as its main object the establishment of a "regulatory framework for maintaining, enhancing and promoting the safety of civil aviation, with particular emphasis on preventing aviation accidents and incidents"11. Subject to certain provisions concerning its extra-territorial application12 and mutual recognition13, the CA Act applies to civil aviation in Australian territory. The CA Act establishes the Civil Aviation Safety Authority ("CASA")14. Its function is the conduct of safety regulation including that of civil air operations in Australia15. The means by which it is to do so include developing and promulgating aviation safety standards, developing strategies to secure compliance with them and issuing certificates, licences, registrations and permits16. The definition of "aviation safety standards" includes standards relating to flight crews engaged in operations of aircraft, the design, construction, maintenance, operation and use of aircraft and related equipment, similar activities in relation to aerodromes, and personnel involved in these activities17. CASA also has what are termed "safety-related functions", such as encouraging acceptance by the aviation industry of obligations to maintain high standards of aviation safety through safety education and training programmes, aviation safety advice and fostering an awareness of the importance of aviation 11 CA Act, s 3A. 12 CA Act, s 7. 13 CA Act, s 26A. 14 CA Act, s 8. 15 CA Act, s 9. 16 CA Act, s 9(1). 17 CA Act, s 3. Bell Nettle Gordon safety, amongst other things18. CASA is required to promote the development of Australia's civil aviation safety capabilities, skills and services19. In the exercise of its powers, CASA is required to regard the safety of air navigation as the most important consideration20. Its functions are to be performed in a manner consistent with Australia's obligations under the Chicago Convention and any other international agreements entered into by Australia relating to the safety of air navigation21. Section 27(2) prohibits the flying of an aircraft into or out of Australia, and the operation of an aircraft in Australia, except as authorised by an Air Operator's Certificate ("an AOC") issued by CASA. "Flight" is defined, in the case of lighter-than-air aircraft22, to refer to the operation of an aircraft when it is detached from the earth's surface or a fixed object on it. The first respondent's AOC authorised it to operate four classes of balloon for passenger charters in Australia. It is necessary for an applicant for an AOC to lodge manuals, including an operations manual, for which the CARs provide23, with CASA24. CASA may require information and inspections in connection with an application for an AOC25 and may issue an AOC only if it is satisfied about certain matters26. An AOC has effect subject to certain general conditions which are set out in s 28BA of the CA Act. Those conditions include compliance with ss 28BD 18 CA Act, s 9(2). 19 CA Act, s 9(3)(e). 20 CA Act, s 9A(1). 21 CA Act, s 11. 22 See CARs, reg 2(1), which so defines a balloon. 23 CARs, reg 215. 24 CA Act, s 27AB(2). 25 CA Act, s 27AC. 26 CA Act, s 28. Bell Nettle Gordon and 28BE. An AOC is also subject to conditions imposed by CASA and conditions specified in the CARs or CAOs27. CASA may suspend or cancel an AOC for breach of a condition28. Section 28BD requires the holder of an AOC to comply with all the requirements of the CA Act and the CARs and CAOs that apply to the holder of the AOC. Section 28BE is in the following terms: "(1) The holder of an AOC must at all times take all reasonable steps to ensure that every activity covered by the AOC, and everything done in connection with such an activity, is done with a reasonable degree of care and diligence. If the holder is a body having legal personality, each of its directors must also take the steps specified in subsection (1). It is evidence of a failure by a body and its directors to comply with this section if an act covered by this section is done without a reasonable degree of care and diligence mainly because of: inadequate corporate management, control or supervision of the conduct of any of the body's directors, servants or agents; or failure to provide adequate systems for communicating relevant information to relevant people in the body. (4) No action lies, for damages or compensation, in respect of a contravention of this section. This section does not affect any duty imposed by, or under, any other law of the Commonwealth, or of a State or Territory, or under the common law." 27 CA Act, s 28BA(1). 28 CA Act, s 28BA(3). Bell Nettle Gordon The effect of s 28BA, which is referred to above, is that in the event of a breach of s 28BE, an AOC may be suspended or cancelled. Section 29(1) provides that an offence is committed if an owner, operator or hirer operates an aircraft or permits an aircraft to be operated in contravention of a provision of Pt III, or of a direction given or condition imposed under such a provision. Each of ss 28BA, 28BD and 28BE appears in Pt III. The offence is punishable by imprisonment for two years. Section 29(3) provides for an offence, punishable by imprisonment for five years, where an owner, operator or hirer operates an aircraft or permits it to be operated in contravention of s 20A(1). Section 20A(1) provides that a person must not be reckless as to whether the manner of operation of an aircraft could endanger the life of another person. Other provisions of Pt III create offences, punishable by imprisonment, of flying without satisfying safety requirements in relation to an aircraft29, or where provisions respecting the carriage of dangerous goods are not complied with30. Section 98 contains the regulation-making powers of the CA Act. Section 98(7) provides that a law of a Territory shall not be taken to be inconsistent with a provision of the regulations having effect in the Territory to the extent that it is capable of operating concurrently with those regulations. Regulation 215 of the CARs provides that a commercial aircraft operator is to provide an operations manual for the use and guidance of the operations personnel of the operator31. The manual is to contain such "information, procedures and instructions with respect to the flight operations of all types of aircraft operated by the operator as are necessary to ensure the safe conduct of the flight operations"32. CASA may give a direction requiring particular information, procedures and instructions to be included in the manual or for it to be revised or varied33. An operator is to revise the operations manual from time 29 CA Act, s 20AA(4). 30 CA Act, ss 23, 29(5). 31 CARs, reg 215(1). 32 CARs, reg 215(2). 33 CARs, reg 215(3). Bell Nettle Gordon to time as a result of changes in operations, aircraft or equipment, or in the light of experience34. All personnel are required to comply with instructions in the operations manual35. A breach of reg 215 may result in the imposition of a penalty. Regulation 235(7) provides CASA with the power to give "directions with respect to the method of loading of persons and goods (including fuel) on aircraft" for the purpose of ensuring the safety of air navigation. The regulations make it clear that a balloon is a lighter-than-air aircraft36. A contravention of a direction under reg 235(7) exposes a person to a penalty37. No such directions were given. CAOs are made under s 98(4A) or under the regulations38 and have the status of legislative instruments39. CASA has made CAO 20.16.3, which identifies, in relation to "manned balloons", the number of ground crew members required for "passenger loading and launching operations". CAO 20.9 directs that refuelling not take place while "passengers are on board, or entering or leaving, the aircraft". It gives further directions with respect to the safety of embarking or disembarking of passengers whilst an aircraft's engine is operating. The first respondent's operations manual contained requirements with respect to passengers in connection with the operation of the inflation fan. It is accepted by the first respondent that the content of the manual is not a Commonwealth law although the Court of Appeal appears to have considered that federal law operates upon it "to create a norm"40. 34 CARs, reg 215(5). 35 CARs, reg 215(9). 36 CARs, reg 2(1); see also CA Act, s 3. 37 CARs, reg 235(7A). 38 CA Act, s 98(5). 39 CA Act, ss 98(4B), 98(5AAA). 40 Outback Ballooning Pty Ltd v Work Health Authority (2017) 326 FLR 1 at 17 [90]. Bell Nettle Gordon Approaches to inconsistency When a law of a State is inconsistent with a law of the Commonwealth, s 109 of the Constitution resolves the conflict by giving the Commonwealth law paramountcy and rendering the State law invalid41 to the extent of the inconsistency. The NT WHS Act is a law of the Northern Territory Legislative Assembly. The Legislative Assembly derives its legislative power from s 6 of the Northern Territory (Self-Government) Act 1978 (Cth), which is enacted under s 122 of the Constitution. The terms of s 109 of the Constitution are not addressed to the relationship between laws of the Commonwealth and those enacted by the legislatures of the Territories42. The subordinate status of a Territory law has the result that where it is inconsistent with a Commonwealth law the Commonwealth law will prevail. It is not necessary in this case to further consider the effect of the inconsistency on a Territory law. There is no dispute that cases concerning s 109 inconsistency may be applied by analogy to a case involving a Territory law. In Victoria v The Commonwealth ("The Kakariki")43, Dixon J referred to two approaches which might be taken to the question whether an inconsistency might be said to arise between State and Commonwealth laws. They were subsequently adopted by the Court in Telstra Corporation Ltd v Worthing44, Dickson v The Queen45 and Jemena Asset Management (3) Pty Ltd v Coinvest Ltd46. The first approach has regard to when a State law would "alter, impair or detract from" the operation of the Commonwealth law. This effect is often 41 Or "inoperative": see Carter v Egg and Egg Pulp Marketing Board (Vict) (1942) 66 CLR 557; [1942] HCA 30. 42 Northern Territory v GPAO (1999) 196 CLR 553 at 580 [53]; [1999] HCA 8. 43 (1937) 58 CLR 618 at 630; [1937] HCA 82. 44 (1999) 197 CLR 61 at 76-77 [28]; [1999] HCA 12. 45 (2010) 241 CLR 491 at 502 [13]-[14]; [2010] HCA 30. 46 (2011) 244 CLR 508 at 524 [39]; [2011] HCA 33. Bell Nettle Gordon referred to as a "direct inconsistency"47. Notions of "altering", "impairing" or "detracting from" the operation of a Commonwealth law have in common the idea that a State law may be said to conflict with a Commonwealth law if the State law in its operation and effect would undermine the Commonwealth law48. The second approach is to consider whether a law of the Commonwealth is to be read as expressing an intention to say "completely, exhaustively, or exclusively, what shall be the law governing the particular conduct or matter to which its attention is directed"49. This is usually referred to as an "indirect inconsistency". A Commonwealth law which expresses an intention of this kind is said to "cover the field" or, perhaps more accurately, to "cover the subject matter" with which it deals50. A Commonwealth law of this kind leaves no room for the operation of a State or Territory law dealing with the same subject matter. There can be no question of those laws having a concurrent operation with the Commonwealth law51. The question whether a State or Territory law is inconsistent with a Commonwealth law is to be determined as a matter of construction. In a case where it is alleged that a State or Territory law is directly inconsistent with a Commonwealth law it will be necessary to have regard to both laws and their operation. Where an indirect inconsistency is said to arise, the primary focus will be on the Commonwealth law in order to determine whether it is intended to be exhaustive or exclusive with respect to an identified subject matter. It is not to be expected that a Commonwealth law will usually declare that it has this effect. In some cases the detailed nature or scheme of the law may 47 Dickson v The Queen (2010) 241 CLR 491 at 504 [22]; Jemena Asset Management (3) Pty Ltd v Coinvest Ltd (2011) 244 CLR 508 at 524 [39]. 48 Jemena Asset Management (3) Pty Ltd v Coinvest Ltd (2011) 244 CLR 508 at 525 49 Ex parte McLean (1930) 43 CLR 472 at 483; [1930] HCA 12. 50 Ex parte McLean (1930) 43 CLR 472 at 483; Jemena Asset Management (3) Pty Ltd v Coinvest Ltd (2011) 244 CLR 508 at 524 [40]; see also The Commonwealth v Australian Capital Territory (2013) 250 CLR 441; [2013] HCA 55. 51 The Commonwealth v Australian Capital Territory (2013) 250 CLR 441 at 467 Bell Nettle Gordon evince an intention to deal completely and therefore exclusively with the law governing a subject matter52. It may state a rule of conduct to be observed, from which the relevant intention may be discerned53. Any provision which throws light on the intention to make exhaustive or exclusive provision on the subject matter with which it deals is to be considered54. A provision which, expressly or impliedly, allows for the operation of other laws may be a strong indication that it is not so intended55. The essential notion of indirect inconsistency is that the Commonwealth law contains an implicit negative proposition that nothing other than what it provides with respect to a particular subject matter is to be the subject of legislation56. Whether the laws are inconsistent The first respondent submits that, properly construed, the Commonwealth aviation law discloses an intention exhaustively and exclusively to deal with the subject matter which it describes as "the prescription and enforcement of the standards of safety in the conduct of air navigation or air operations" in Australia. These are very broad descriptions. Nonetheless it is common ground that the aircraft operations regulated by the Commonwealth law in question encompass all matters preparatory to and subsequent to an aircraft flying and include the embarkation and disembarkation of passengers. The first respondent had contended before the Court of Appeal that there were direct inconsistencies in the operation of the Commonwealth aviation law and the NT WHS Act. The Court of Appeal did not consider it necessary to address the Commonwealth aviation law covered the field. In this Court the first respondent, by Notice of Contention, sought to contend that the Court of Appeal should also the conclusion that argument in view of it reached that 52 Momcilovic v The Queen (2011) 245 CLR 1 at 116 [261]; [2011] HCA 34. 53 Ex parte McLean (1930) 43 CLR 472 at 483-484. 54 R v Credit Tribunal; Ex parte General Motors Acceptance Corporation (1977) 137 CLR 545 at 563-564; [1977] HCA 34. 55 See for example R v Credit Tribunal; Ex parte General Motors Acceptance Corporation (1977) 137 CLR 545; New South Wales v The Commonwealth and Carlton ("the Hospital Benefits Case") (1983) 151 CLR 302; [1983] HCA 8. 56 Momcilovic v The Queen (2011) 245 CLR 1 at 111 [244] per Gummow J. Bell Nettle Gordon have found that the NT WHS Act alters, impairs or detracts from the operation of ss 28BD and 29(1) of the CA Act, reg 215 of the CARs and CAO 82.7. During the course of argument on the hearing of this appeal that course was abandoned. The only questions which remain are whether the Commonwealth aviation law can be construed as dealing exclusively with the subject matter identified, or whether it is to be read as permitting other laws including the NT WHS Act to operate, as the WHA contends. It is not contended that the Commonwealth aviation law should be construed as dealing exclusively with some more limited aspect of the embarkation and disembarkation of passengers so as impliedly to exclude the operation of the NT WHS Act in relation to that particular aspect of air navigation. In argument on the appeal the first respondent went to some lengths to chart the historical development of Commonwealth aviation law in its implementation of the Chicago Convention and its later Protocols. No doubt what was sought to be conveyed is that Commonwealth aviation law expanded to become a regulatory scheme with respect to the safety of aviation. But even accepting that there may be aspects of the CA Act which could be so described, it could hardly be said that it purports to lay down an entire legislative framework covering all aspects of the safety of persons who might be affected by operations associated with aircraft, including on-ground operations. In many areas the CA Act must operate within the setting of other laws with which aircraft operators and their staff are obliged to comply57. Adapting what Dixon J said in Ex parte McLean58, the CA Act was intended to be "supplementary to or cumulative upon" State or Territory law. The example his Honour gave in that case59 was of a Commonwealth award which expressly prohibited shearers from injuring sheep whilst shearing. It would not reasonably follow, his Honour said, that a shearer who unlawfully and maliciously wounded a sheep that he was shearing could not be prosecuted under the State criminal law. The fact that a Commonwealth statute makes certain conduct an offence is not conclusive of exclusivity. There is no presumption that a Commonwealth 57 Commercial Radio Coffs Harbour v Fuller (1986) 161 CLR 47 at 57-58; [1986] HCA 42. 58 (1930) 43 CLR 472 at 483. 59 Ex parte McLean (1930) 43 CLR 472 at 485-486. Bell Nettle Gordon offence excludes the operation of other laws60. The Crimes Act 1914 (Cth)61, in providing that a person cannot be punished twice, recognises this. If there were a rule or standard of conduct imposed by the CA Act directed at the safety of persons affected by aircraft operations, gross breach of it could result in a conviction for manslaughter. The first respondent concedes as much and accepts that offences of this kind cannot be said to be within the exclusive preserve of the CA Act. The first respondent suggests that the CA Act might be seen to leave the proscription and punishment of conduct which negligently and intentionally endangers life as a separate matter for the operation of other Commonwealth, State and Territory laws. It points to the Crimes (Aviation) Act 1991 (Cth), which creates offences relating to aviation terrorism or security, as indicative of this. But the submission simply confirms what is otherwise evident, namely that the CA Act is intended to operate within the setting of other laws. One such law is the Work Health and Safety Act 2011 (Cth), which was enacted to promote the system of nationally harmonised laws of which the NT WHS Act is a part. It imposes the same duty as the NT WHS Act with respect to the risk to persons from the conduct of businesses or undertakings, albeit those conducted by a public authority, and creates an offence for breach of that duty. The place where a business or undertaking is conducted includes an aircraft62. It could hardly be suggested that when this statute was enacted the legislature intended that it would be read down to accommodate the CA Act. The first respondent also accepts that the CA Act is not concerned with civil liability for death, personal injury or damage to cargo arising out of air operations associated with aircraft. These are the subject of the Civil Aviation (Carriers' Liability) Act 1959 (Cth). The first respondent points to ss 28BD and 29 of the CA Act as the key provisions which would be attracted if there were to be a Commonwealth prosecution arising out of the events in question. Section 28BD, it will be 60 R v Winneke; Ex parte Gallagher (1982) 152 CLR 211 at 224; [1982] HCA 77; McWaters v Day (1989) 168 CLR 289 at 296; [1989] HCA 59. 61 Section 4C. 62 Work Health and Safety Act 2011 (Cth), s 8. Bell Nettle Gordon recalled, requires the holder of an AOC to comply with all the requirements of the CA Act, the CARs and any CAOs which are applicable. In Ex parte McLean63, Dixon J explained that when the Commonwealth and State Parliaments each legislate on the same subject matter "and prescribe what the rule of conduct shall be", they make laws which are inconsistent and s 109 applies. That is so because, by providing a rule to be observed, the Commonwealth statute evinces an intention to cover the subject matter and provide exclusively what the law upon that subject matter should be. When a Commonwealth law discloses such an intention, it is inconsistent with that law for the State law to govern the same subject matter. In Ex parte McLean an award made by the Commonwealth Court of Conciliation and Arbitration required the applicant, a shearer, to abide by the terms and conditions of an employment agreement between him and his employer. Non-fulfilment of the terms of the agreement would result in a penalty under the Commonwealth Conciliation and Arbitration Act 1904 (Cth) for breach of the award. A State Act contained somewhat different penal sanctions for the same conduct. An information was brought under it alleging that the applicant neglected to fulfil the contract in the manner of his shearing. The Commonwealth Parliament was held to have given awards made by the arbitrator under the Commonwealth Act exclusive authority. That Act gave the arbitrator power by the award to prescribe completely and exclusively what are the industrial relations between employer and employee. It commanded performance of the contract as an industrial duty according to the sanctions it imposed64. The difficulty with the first respondent's argument is that neither s 28BD nor any other section of the CA Act referred to above prescribes a rule of conduct to be adhered to in carrying out aircraft operations of the kind here in question. Section 20A(1) imposes only a general duty on a person not to be reckless so as not to endanger the life of another person and that duty arises only in the context of operating an aircraft. Section 28BE(1) also imposes a general duty on a person to carry out activities with a reasonable degree of care and diligence. The scheme of the CA Act permits CASA to set standards or give directions through the CARs and CAOs with respect to matters of safety. But 63 (1930) 43 CLR 472 at 483. 64 Ex parte McLean (1930) 43 CLR 472 at 484, 486-487. Bell Nettle Gordon even when it does so, s 98(7) states that the CARs are not to be taken to be inconsistent with a Territory law to the extent that that law is capable of operating concurrently with the regulations. A provision of this kind is effective to avoid inconsistency by making it clear that the law which is the source of the standards or directions is not intended to be exhaustive or exclusive of State or Territory laws. It makes clear that it is not intended to cover subjects dealt with by the regulations and that it leaves room for the operation of other laws65. The only qualification is that the other laws do not operate so as to conflict directly with the Commonwealth law. The foregoing may be sufficient for a conclusion that, properly construed, the CA Act does not contain the negative proposition that it alone is intended to state the law relating to the conduct of aircraft operations which may put the health and safety of persons at risk, for which the NT WHS Act also provides. In particular, the CA Act does not convey an intention to state exhaustively the extent of care to be taken by the holder of an AOC, for the health and safety of those who are at risk by reason of the conduct of aviation operations. Section 28BE(5) puts this beyond doubt. It will be recalled that s 28BE(1) requires the holder of an AOC to take all reasonable steps to ensure that "every activity covered by the AOC, and everything done in connection with such an activity, is done with a reasonable degree of care and diligence". Sub-section (2) extends that duty to company directors and sub-s (3) provides for what evidence may amount to non- compliance by directors with that duty. Sub-section (4) says that no action for damages or compensation lies for contravention of the section. Section 28BE(5) provides that the section does not affect any duty imposed by, or under, any other Commonwealth, State or Territory law, or under the common law. It operates in a way similar to s 98(7), which has been discussed above. In its terms s 28BE(5) recognises the continuing operation of other laws concerned with the taking of care in the conduct of activities by the holder of an AOC66. The recognition is subject to the necessary qualification that a Commonwealth law might be paramount in cases of direct inconsistency in the operation of the respective laws. 65 R v Credit Tribunal; Ex parte General Motors Acceptance Corporation (1977) 137 CLR 545 at 563-564. 66 Hospital Benefits Case (1983) 151 CLR 302; Commercial Radio Coffs Harbour v Fuller (1986) 161 CLR 47. Bell Nettle Gordon The first respondent substantially adopts the approach taken by the Full Court of the Federal Court (Moore, Stone and Flick JJ) in Heli-Aust, which was to read s 28BE(5) as having a narrow operation. Section 28BE(1) was seen to apply only to AOC holders and in that capacity. Moore and Stone JJ considered that s 28BE(5) is therefore to be understood to recognise that an AOC holder may have a duty when acting in some other capacity, such as when driving a car67. An AOC holder might come under a common law duty of care in that capacity just as she or he might be subject to statutory regulation as a director. Their Honours said that "[t]he subsection clearly has work to do in fields removed, and potentially far removed, from the maintenance of safety in civil aviation"68. The joint judgment in Heli-Aust misapprehended the scope of s 28BE(1)'s operation. An AOC permits aircraft flights with passengers. The duty imposed by the sub-section is expressed to apply to every activity covered by the AOC and anything done in connection with it. It would extend to conduct in carrying out almost every task associated with aircraft operations including what is undertaken pre- and post-flight. It imposes on a holder of an AOC a duty additional to what is otherwise required by the CA Act, the CARs and CAOs. But s 28BE(5) makes plain that that further duty does not exclude other laws concerned to require the taking of care by the holder of an AOC in the conduct of air operations. The Court in Heli-Aust regarded it as significant that s 28BE does not purport to confine the operation of any other aspect of the CA Act69. The first respondent likewise submits that whilst s 28BE(5) is a statutory indication that s 28BE(1) is not to be construed as exclusive, it says nothing about the scheme of the CA Act. The opening words of sub-s (5) refer only to what "[t]his section" does not affect. On the first respondent's case, it cannot be inferred from sub-s (5) that the balance of the statutory scheme is intended to operate exclusively of other laws. The Court in Heli-Aust and the first respondent approach s 28BE(5) on the basis of an assumption β that the CA Act can otherwise be read as exhaustive or exclusive on the topic of the safety of aircraft operations. The joint judgment 67 Heli-Aust Pty Ltd v Cahill (2011) 194 FCR 502 at 531 [72]. 68 Heli-Aust Pty Ltd v Cahill (2011) 194 FCR 502 at 531 [72]. 69 Heli-Aust Pty Ltd v Cahill (2011) 194 FCR 502 at 531 [71], 557 [174]. Bell Nettle Gordon expressed the view that not only is the regulatory regime of the CA Act a comprehensive one, but "the safety of civil aviation is, by its very nature one that would seem to cry out for one comprehensive regulatory regime"70. The first respondent points to what s 28BE(5) does not say, namely that "the entirety of what otherwise appears to be the most comprehensive exclusive scheme is simply to operate [supplementarily] upon State or Territory law". But in relevant respects, that is how the CA Act operates. For the reasons given above, the CA Act does not evince an intention to operate exclusively of other laws. True it is that s 28BE(1) provides the occasion for what appears in s 28BE(5). Without the imposition of the additional duty by s 28BE(1), no question would arise about the operation of other laws imposing similar duties. Having added that duty it was necessary to confirm, consistently with the balance of the CA Act, that other State and Territory laws and the common law were to continue to operate. The drafting technique employed in s 28BE(5) has an effect similar to that of s 98(7). The breadth of operation of s 28BE(5) is confirmed by the Explanatory Memorandum to the Bill which introduced s 28BE71. Relevantly it explains that whilst the section does not create a new cause of action, it does not affect any common law duty of care or any other statutory duty "under which a person may be able to bring an action in negligence or other legal proceedings against the AOC holder". As the Explanatory Memorandum shows, s 28BE(5) reflects the fact that the CA Act is intended to operate within the framework of other laws, including the common law of negligence. Conclusion and orders The CA Act in relevant respects is designed to operate within the framework of other State, Territory and Commonwealth laws. The NT WHS Act is one such law. And it has not been suggested that the CA Act contains an implicit negative proposition that it is to be the only law with respect to some particular aspect or aspects of the embarkation of passengers. It cannot be said that the CA Act contains an implicit negative proposition that it is to be the only law with respect to the safety of persons who might be affected by operations associated with aircraft, including the embarkation of passengers. The appeal 70 Heli-Aust Pty Ltd v Cahill (2011) 194 FCR 502 at 530-531 [68]. 71 Australia, House of Representatives, Civil Aviation Legislation Amendment Bill 1995, Explanatory Memorandum at 26-27. Bell Nettle Gordon should be allowed with costs, the orders of the Court of Appeal of the Supreme Court of the Northern Territory set aside and in lieu thereof it be ordered that the appeal to that Court be dismissed with costs. The legislative power conferred on the Legislative Assembly of the Northern Territory by s 6 of the Northern Territory (Self-Government) Act 1978 (Cth), which "gives life to and sustains"72 laws enacted for the peace, order and good government of the Territory, is insufficient to sustain the operation of a Northern Territory law to the extent that the law is inconsistent with or repugnant to a Commonwealth law. The test of inconsistency or repugnancy for the purpose of that implicit limitation is the same as the test of inconsistency between a State law and a Commonwealth law for the purpose of s 109 of the Constitution73. Of little more than historical interest in light of the Statute of Westminster Adoption Act 1942 (Cth) and the Australia Act 1986 (Cth), and unnecessary to consider for present purposes, is the unresolved question of whether the same test of inconsistency or repugnancy applied to the determination of repugnancy between a colonial law and an imperial law for the purpose of ss 2 and 3 of the Colonial Laws Validity Act 1865 (Imp) (28 & 29 Vict c 63)74. Of potential contemporary significance, but likewise unnecessary to consider for present purposes, is the unresolved question of whether the consequence of inconsistency or repugnancy between a Northern Territory law and a Commonwealth law is that the Territory law is beyond the legislative power of the Legislative Assembly of the Northern Territory, or, as with the consequence of inconsistency for a State law under s 109 of the Constitution75, that the Territory law is rendered inoperative to the extent of the inconsistency76. 72 Northern Territory v GPAO (1999) 196 CLR 553 at 580 [54]; [1999] HCA 8. 73 University of Wollongong v Metwally (1984) 158 CLR 447 at 464; [1984] HCA 74, citing Federal Capital Commission v Laristan Building and Investment Co Pty Ltd (1929) 42 CLR 582 at 588; [1929] HCA 36, Webster v McIntosh (1980) 32 ALR 603 at 605-606, and R v Kearney; Ex parte Japanangka (1984) 158 CLR 395 at 418-419; [1984] HCA 13. See also P v P (1994) 181 CLR 583 at 602-603; [1994] HCA 20. 74 cf Yougarla v Western Australia (2001) 207 CLR 344 at 354-355 [17]; [2001] HCA 47, referring to Ffrost v Stevenson (1937) 58 CLR 528 at 572; [1937] HCA 41; Union Steamship Co of New Zealand Ltd v The Commonwealth (1925) 36 CLR 130 at 148; [1925] HCA 23, referring to Attorney-General (Qld) v Attorney- General (Cth) (1915) 20 CLR 148 at 166-168; [1915] HCA 39. 75 Butler v Attorney-General (Vict) (1961) 106 CLR 268 at 285-286; [1961] HCA 32; Western Australia v The Commonwealth (Native Title Act Case) (1995) 183 CLR 373 at 464-465; [1995] HCA 47. 76 Webster v McIntosh (1980) 32 ALR 603 at 605-606. Cf Attorney-General (NT) v Hand (1989) 25 FCR 345 at 366-367, 402-403. Together with Kiefel CJ, Bell, Keane, Nettle and Gordon JJ, I conclude that there is no inconsistency or repugnancy between ss 19 and 32 of the Work Health and Safety (National Uniform Legislation) Act 2011 (NT) ("the NT WHS Act") and the Civil Aviation Act 1988 (Cth) ("the CA Act") insofar as those sections of the NT WHS Act operate to impose on, and to enforce against, the holder of an air operator's certificate ("AOC") issued under the CA Act an obligation to ensure, so far as is reasonably practicable, that the health and safety of other persons is not put at risk in the course of air operations covered by the AOC. The path of reasoning by which I reach that conclusion is in summary as follows. My reasoning proceeds on an acceptance of the view taken by the Full Court of the Federal Court in Heli-Aust Pty Ltd v Cahill77, which was followed by the Court of Appeal of the Northern Territory in the decision under appeal78, that there is a large area within which the CA Act operates to the exclusion of State and Territory laws. The area of exclusive operation of the CA Act can be sufficiently described as encompassing the prescription and enforcement of standards for the safe operation of aircraft. My principal disagreement with the Full Court in Heli-Aust, and consequently with the conclusion reached in the Court of Appeal, is with the Full Court's view that the subject-matter of the exercise of reasonable care and diligence in the operation of an aircraft falls within the area of exclusive operation of the CA Act. My own view is that s 28BE(5) of the CA Act makes plain that this subject-matter does not fall within that area of exclusive operation. The more detailed reasons set out below need to be read with the description of the CA Act and the Civil Aviation Regulations 1988 (Cth) ("the CA Regulations") in the reasons for judgment of Kiefel CJ, Bell, Keane, Nettle and Gordon JJ. They also need to be read with the description of the legislative history of the CA Act and the history of the Convention on International Civil Aviation (1944) ("the Chicago Convention") in the reasons for judgment of Edelman J. I am grateful to their Honours for not having to repeat those descriptions or to recite the facts and procedural history of this matter. The test of inconsistency Matters involving s 109 of the Constitution have been described as the "running-down jurisdiction of the High Court"79. The suggestion implicit in that 77 (2011) 194 FCR 502. 78 Outback Ballooning Pty Ltd v Work Health Authority (2017) 326 FLR 1. 79 See Gummow, "Foreword" (2010) 38 Federal Law Review 311 at 315. description is that issues raised in determining whether a State law, or by analogy a Territory law, is inconsistent with a Commonwealth law are easily resolved in the application of well-understood principles. There is an element of truth in that suggestion. The basic test of inconsistency has been repeated and applied too often to be doubted. The canonical exposition is that "inconsistency does not lie in the mere coexistence of two laws which are susceptible of simultaneous obedience" but "depends upon the intention of the paramount Legislature to express by its enactment, completely, exhaustively, or exclusively, what shall be the law governing the particular conduct or matter to which its attention is directed"80. A State or Territory law is inconsistent with a Commonwealth law to the extent that the State or Territory law, if operative, would "alter, impair or detract from the operation" of the Commonwealth law. If the Commonwealth law "was intended as a complete statement of the law governing a particular matter or set of rights and duties, then for a State [or Territory] law to regulate or apply to the same matter or relation is regarded as a detraction from the full operation of the Commonwealth law and so as inconsistent"81. However, as illustrated by the difficulties encountered in decisions on fairly straightforward questions of whether a State law creating one criminal offence is inconsistent with a Commonwealth law creating another criminal offence82, the suggestion that questions of inconsistency are easily resolved has not been borne out by experience. A recurring source of difficulty has been a conceptually problematic but stubbornly persistent perception of the need to classify some State or Territory law detractions from, or impairments of, a Commonwealth law as "direct" inconsistency, and to classify other State or Territory law detractions from, or impairments of, a Commonwealth law as "indirect" inconsistency. That perception has been accompanied at times by a corresponding perception of the need to classify a Commonwealth law either as operating "cumulatively" upon the corpus of State and Territory laws (so as to admit of only "direct" inconsistency) or as "covering a field" (so as to admit also of "indirect" 80 Ex parte McLean (1930) 43 CLR 472 at 483; [1930] HCA 12. 81 Victoria v The Commonwealth ("The Kakariki") (1937) 58 CLR 618 at 630; [1937] HCA 82, echoing Stock Motor Ploughs Ltd v Forsyth (1932) 48 CLR 128 at 136; [1932] HCA 40. 82 Hume v Palmer (1926) 38 CLR 441; [1926] HCA 50; R v Loewenthal; Ex parte Blacklock (1974) 131 CLR 338; [1974] HCA 36; R v Winneke; Ex parte Gallagher (1982) 152 CLR 211; [1982] HCA 77; Dickson v The Queen (2010) 241 CLR 491; [2010] HCA 30; Momcilovic v The Queen (2011) 245 CLR 1; [2011] HCA 34. inconsistency). At times, where a particular Commonwealth law could not be fitted neatly into either classification, an obviously conflicting State law has been said to be inconsistent with the Commonwealth law "on both grounds"83. The reality of Commonwealth legislation is more complex than this conceptual dichotomy admits. Few Commonwealth laws are framed to operate cumulatively upon the entire corpus of State and Territory laws. Most Commonwealth laws will have a definite area of affirmative operation which will admit of the concurrent operation of some, but not all, State and Territory laws. The analysis of Dixon J (albeit in dissent) in Stock Motor Ploughs Ltd v Forsyth84 provides a useful illustration. Having reiterated the basic test of inconsistency, Dixon J there stated a consequence of that basic test to be that "except in so far as the law of the Commonwealth appears otherwise to intend, enjoyment of a right arising under it may not be directly impaired by State law"85. Applying that approach to hold the Moratorium Act 1930 (NSW) inconsistent with the Bills of Exchange Act 1909 (Cth), Dixon J first identified the intention informing the enactment of the Bills of Exchange Act. The identified intention was to undertake: "the definition of what shall be bills of exchange, promissory notes and cheques, the statement of what special properties they shall possess, and the description of some of the consequences which ensue from their use, yet [to leave] generally to State law authority to prescribe when and under what conditions, by what persons and subject to what qualifications they may be employed"86. Despite the extensive room which it left for the operation of State laws, his Honour's opinion was that the Bills of Exchange Act "does not contemplate the legislative extinguishment [or] suspension of a right to enforce payment which has been obtained under [it]"87. The Moratorium Act, if operative, would have done just that. 83 eg, Commercial Radio Coffs Harbour v Fuller (1986) 161 CLR 47 at 56; [1986] HCA 42, quoting Ansett Transport Industries (Operations) Pty Ltd v Wardley (1980) 142 CLR 237 at 260; [1980] HCA 8. 84 (1932) 48 CLR 128. 85 (1932) 48 CLR 128 at 137. 86 (1932) 48 CLR 128 at 139. 87 (1932) 48 CLR 128 at 141. Australian Mutual Provident Society v Goulden88 provides another illustration. There the Court held that the Life Insurance Act 1945 (Cth), although "framed on the basis that it will operate in the context of local laws of the various States and Territories of the Commonwealth"89, "should be understood as giving expression to a legislative policy that the protection of the interests of policy holders is to be achieved by allowing a registered life insurance company to classify risks and fix rates of premium in its life insurance business in accordance with its own judgment founded upon the advice of actuaries and the practice of prudent insurers"90. In its application to regulate the life insurance business of a registered life insurance company, the prohibition in the Anti-Discrimination Act 1977 (NSW) of "discrimination against a physically handicapped person on the ground of his physical impairment in the terms or conditions appertaining to a superannuation or provident fund or scheme" was held to be inconsistent with the Life Insurance Act because the prohibition would "effectively preclude such companies from taking account of physical impairment in classifying risks and rates of premium and other terms and conditions of insurance in the course of their life insurance business in New South Wales" and would thereby "qualify, impair and, in a significant respect, negate the essential legislative scheme of the Commonwealth Life Insurance Act for ensuring the financial stability of registered life insurance companies and their statutory funds and the financial viability of the rates of premium and other terms and conditions of the policies of insurance which they write in the course of their life insurance business"91. References to "direct" and "indirect" inconsistency have been described as "tests for discerning whether a 'real conflict' exists between a Commonwealth law and a State law"92. Notably, however, "direct" inconsistency and "indirect" inconsistency do not appear as distinct concepts in the canonical formulation of the basic test. Rather, on the premise that a State or Territory law is inconsistent with a Commonwealth law if it would "alter, impair or detract from the operation" of the Commonwealth law, the case of a State law which would regulate or apply to a matter on which a Commonwealth law was "intended as a 88 (1986) 160 CLR 330; [1986] HCA 24. 89 (1986) 160 CLR 330 at 335. 90 (1986) 160 CLR 330 at 337. 91 (1986) 160 CLR 330 at 339. 92 Jemena Asset Management (3) Pty Ltd v Coinvest Ltd (2011) 244 CLR 508 at 525 [42]; [2011] HCA 33, quoting Collins v Charles Marshall Pty Ltd (1955) 92 CLR 529 at 553; [1955] HCA 44. complete statement" is an instance of a State or Territory law that is "regarded as a detraction from the full operation of the Commonwealth law". The more complete explanation93 is that offered by Aickin J in Ansett Transport Industries (Operations) Pty Ltd v Wardley94: "The two different aspects of inconsistency [ie direct and indirect inconsistency] are no more than a reflection of different ways in which the Parliament may manifest its intention that the federal law, whether wide or narrow in its operation, should be the exclusive regulation of the relevant conduct. Whether it be right or not to say that there are two kinds of inconsistency, the central question is the intention of a particular federal law." To adopt the language of Mason J in New South Wales v The Commonwealth and Carlton95, no matter how wide or narrow the operation of the Commonwealth law, "the more general test" of inconsistency is: "Does the State the [or Territory] Commonwealth law?" Using "object" or "purpose" in the commonly employed sense explained in subsequent cases to refer to the intended practical operation of the law or to what the law is designed to achieve in fact96, his Honour went on in that case to explain97: impair or detract from the operation of law alter, "That test may be applied so as to produce inconsistency in two ways. It may appear that the legal operation of the two laws is such that the State law alters, impairs or detracts from rights and obligations created by the Commonwealth law. Or it may appear that the State law alters, impairs or detracts from the object or purpose sought to be achieved by the Commonwealth law. In each situation there is a case for saying that the intention underlying the Commonwealth law was that it should operate to the exclusion of any State law having that effect." 93 See Rumble, "The Nature of Inconsistency under Section 109 of the Constitution" (1980) 11 Federal Law Review 40 at 72-77, 81-83. 94 (1980) 142 CLR 237 at 280. 95 (1983) 151 CLR 302 at 330; [1983] HCA 8. 96 APLA Ltd v Legal Services Commissioner (NSW) (2005) 224 CLR 322 at 394 [178]; [2005] HCA 44; McCloy v New South Wales (2015) 257 CLR 178 at 232 [132]; [2015] HCA 34. 97 (1983) 151 CLR 302 at 330. Associated with the persistent perception of some distinction between "direct" and "indirect" inconsistency, another longstanding source of difficulty in inconsistent with a determining whether a State or Territory Commonwealth law has been a tendency to overlook the need to determine at the first stage of analysis the extent, if any, to which the Commonwealth law is intended to operate as a complete or exhaustive statement of the law on a subject- Only once the intended legal and practical operation of the matter. Commonwealth law is determined can the extent, if any, to which the other law, if operative, would alter, impair or detract from that operation be determined. That point was made strongly by Gummow J in APLA Ltd v Legal Services Commissioner (NSW)98 and in Momcilovic v The Queen99. law Contributing to the overall difficulty in more recent times has been a tendency to downplay the centrality of legislative intention to the determination of the operation of the Commonwealth law100. The tendency can be seen to have been the outworking of emergent scepticism about the very existence of legislative intention101. That scepticism cannot be allowed to distort the understanding or application of established constitutional doctrine. "Those who regard the search for 'intention' as fictitious must content themselves with an acceptance that it is the function of the courts, ultimately this Court, to specify what the purpose and effect (and hence the imputed intention) of the competing legislation is."102 Groups acting deliberatively according to established procedures can meaningfully be seen to have intentions, distinct from the subjective intentions of their constituent individuals, both as to what collectively they seek to achieve and as to how collectively they seek to achieve it103. Legislative assemblies in representative democracies are the paradigm of groups acting deliberatively, as 98 (2005) 224 CLR 322 at 400-401 [204]-[208]. 99 (2011) 245 CLR 1 at 115-116 [258]-[261]. 100 eg, Dickson v The Queen (2010) 241 CLR 491 at 506-507 [32]; Momcilovic v The Queen (2011) 245 CLR 1 at 141 [341]. 101 eg, Zheng v Cai (2009) 239 CLR 446 at 455 [28]; [2009] HCA 52; Certain Lloyd's Underwriters v Cross (2012) 248 CLR 378 at 389-390 [25]; [2012] HCA 56. 102 Re Residential Tenancies Tribunal (NSW); Ex parte Defence Housing Authority (1997) 190 CLR 410 at 497; [1997] HCA 36. 103 See generally List and Pettit, Group Agency: The Possibility, Design, and Status of Corporate Agents (2011). courts in representative democracies have for the most part done well to recognise when construing legislative output. "[O]ne of the surest indexes of a mature and developed jurisprudence" is "to remember that statutes always have some purpose or object to accomplish, whose sympathetic and imaginative discovery is the surest guide to their meaning"104. The responsibility of a court performing its constitutionally mandated function of authoritatively attributing meaning to a legislated text, to the extent necessary to resolve a dispute as to legal rights or legal obligations, is correspondingly "to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have"105. That a finding of purpose can involve a "contestable judgment"106 only heightens that responsibility. "The words 'intention', 'contemplation', 'purpose', and 'design' are used routinely by courts in relation to the meaning of legislation" and "are orthodox and legitimate terms of legal analysis, provided their objectivity is not overlooked"107. Each is appropriate to be used by a court to acknowledge the indisputable and foundational fact that legislated text is the product of deliberative choice on the part of democratically elected representatives to pursue collectively chosen ends by collectively chosen means. To reduce legislative intention to a label for the outcome of a constructional choice made by the court itself, is to miss the point of the traditional terminology. It is to ignore that the responsibility of the court, in making a constructional choice, is to adopt an authoritative construction of legislated text which accords with the imputed intention of the enacting legislature. Worse, it is to use a constructional methodology which fails to give full expression to "the constitutional relationship between courts and the legislature"108. The extent, if any, to which the Commonwealth Parliament intends a law enacted in an area of concurrent legislative power to operate as a complete or exhaustive statement of the law on a subject-matter is often left by the 104 Cabell v Markham (1945) 148 F 2d 737 at 739, quoted in Residual Assco Group Ltd v Spalvins (2000) 202 CLR 629 at 644 [27]; [2000] HCA 33 and in Thiess v Collector of Customs (2014) 250 CLR 664 at 672 [23]; [2014] HCA 12. 105 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 384 [78]; [1998] HCA 28. 106 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 107 Singh v The Commonwealth (2004) 222 CLR 322 at 336 [19]; [2004] HCA 43. 108 Singh v The Commonwealth (2004) 222 CLR 322 at 336 [19]. Commonwealth Parliament to emerge inferentially by reference to the nature of the subject-matter and the express or apparent purpose of the Commonwealth law. However, the Commonwealth Parliament can, and not infrequently does, make the intended operation of the law express, either by stating that the law is to operate on a subject-matter to the exclusion of State or Territory laws or a category of State or Territory laws109, or by stating that the law is to operate on a subject-matter concurrently with State or Territory laws or a category of State or Territory laws110. True it is that any such statement of legislative intention must be construed in context, and that the generality of the language in which such a statement is cast might, on a proper construction, be qualified by some contraindication in the legislative scheme of which it forms part111. But once the statement of legislative intention has been properly construed, fidelity to the constitutional relationship between courts and the legislature requires that the statement be given effect in determining the scope of the operation of the Commonwealth law112. The test of inconsistency applied Having regard to the expression of the main object of the CA Act as being "to establish a regulatory framework for maintaining, enhancing and promoting the safety of civil aviation"113, having regard to its evident purpose of facilitating implementation of Australia's obligation under Art 37 of the Chicago Convention to "collaborate in securing the highest practicable degree of uniformity in regulations, standards, procedures, and organization in relation to aircraft, personnel, airways and auxiliary services in all matters in which such uniformity will facilitate and improve air navigation", and having regard to the obvious impracticality in the modern world of attempting to separate the regulation of domestic aviation from the regulation of international aviation, I see no reason to 109 New South Wales v The Commonwealth (Work Choices Case) (2006) 229 CLR 1 at 166-169 [370]-[372]; [2006] HCA 52, applying Wenn v Attorney-General (Vict) (1948) 77 CLR 84 especially at 109; [1948] HCA 13. 110 Western Australia v The Commonwealth (Native Title Act Case) (1995) 183 CLR 373 at 466, applying R v Credit Tribunal; Ex parte General Motors Acceptance Corporation (1977) 137 CLR 545 at 563; [1977] HCA 34. See also Palmdale- AGCI Ltd v Workers' Compensation Commission (NSW) (1977) 140 CLR 236 at 243; [1977] HCA 69. 111 John Holland Pty Ltd v Victorian Workcover Authority (2009) 239 CLR 518 at 527 [20]; [2009] HCA 45; Dickson v The Queen (2010) 241 CLR 491 at 508 [36]-[37]. 112 Momcilovic v The Queen (2011) 245 CLR 1 at 121 [272]. 113 Section 3A of the CA Act. gainsay the view taken in Heli-Aust that the CA Act has an operation as an exhaustive statement of the law in Australia on a subject-matter there described as "the safety of civil aviation in Australia"114 or "the safety of air operations in Australia"115. The subject-matter can be described with more precision for present purposes, in language drawn from Annex 6 to the Chicago Convention, as encompassing the prescription and enforcement of standards for the safe operation of aircraft in, to and from Australia, noting that a "standard" for the purpose of for physical characteristics, configuration, matΓ©riel, performance, personnel or procedure, the uniform application of which is recognized as necessary for the safety or regularity of international air navigation and to which Contracting States will conform in accordance with the Convention"116. the Chicago Convention is a "specification Confirming the ambition of the CA Act to provide a single regulatory framework for the prescription and enforcement of standards for the safe operation of aircraft in, to and from Australia is the regulation-making power conferred by the CA Act. The power is expressed to allow for the making of regulations "for the purpose of carrying out and giving effect to the provisions of the Chicago Convention relating to safety", the making of regulations in relation to safety of air navigation in, to and from a Territory, and the making of regulations in relation to safety of air navigation, where the regulations are with respect to interstate and international trade and commerce or with respect to any other matter with respect to which the Commonwealth Parliament has power to make laws117. The evident intention is that the regulations made under the CA Act are to operate as comprehensively as the legislative power of the Commonwealth Parliament permits. There is no reason to consider the reach of the CA Regulations to be less ambitious than is permitted under the CA Act. To the contrary, the CA Regulations are expressed at the outset to have comprehensive application in relation to air navigation throughout Australia and to and from Australia118. The CA Regulations are then structured to make detailed prescription in relation to subject-matters relevantly identified to include qualifications of flight crew (the subject-matter of Annex 1 to the Chicago Convention)119, rules of the air (the 114 (2011) 194 FCR 502 at 530 [67], 534 [83]. 115 (2011) 194 FCR 502 at 554 [159]-[161], 555-556 [164]. 116 Annex 6 to the Chicago Convention, Pt I at (xxi). 117 Section 98(1)(c)-(f) of the CA Act. 118 Regulation 3(1) of the CA Regulations. 119 Part 5 of the CA Regulations. subject-matter of Annex 2 to the Chicago Convention)120, airworthiness of aircraft (the subject-matter of Annex 8 to the Chicago Convention)121 and air operations (the subject-matter of Annex 6 to the Chicago Convention)122. Whilst there may be exceptions, each regulation should be read as intended to lay down the sole rule to the precise topic with which it deals. Take, for example, the regulation which sets at 500 feet the minimum height at which aircraft can be flown over areas other than cities, towns or populous areas123. Accepting that the CA Act and the CA Regulations accommodate the prospect of a State or Territory law penalising the dangerous operation of an aircraft124, it is impossible to see how the CA Act and the CA Regulations can be interpreted as accommodating the prospect of a State or Territory law setting a different minimum height of say 700 feet. That is so even though it would obviously be possible for the pilot of an aircraft to comply with the minimum height set under the CA Act by flying at or above the height set by the State or Territory law. The point is that, in setting the minimum height at which aircraft can be flown, the CA Regulations are specifying a physical requirement for the operation of aircraft the uniform application of which the CA Act treats as necessary for the safety and regularity of international air navigation. Section 98(7) of the CA Act does not, in my opinion, indicate that regulations made under the CA Act are to have some less pervasive application. In providing that a "law of a Territory (not being a law of the Commonwealth) does not have effect to the extent to which it is inconsistent with a provision of the regulations having effect in that Territory", s 98(7), in my opinion, does no more than to provide for the consequence of inconsistency between a Territory law and a provision of the regulations to be that the Territory law is inoperative to the extent of the inconsistency125. And in going on to provide that "such a law shall not be taken to be inconsistent with such a provision to the extent that it is capable of operating concurrently with that provision", s 98(7), in my opinion, does no more than to confirm that the test of inconsistency between a law of a 120 Parts 11 and 12 of the CA Regulations. 121 Part 4 of the CA Regulations. 122 Part 14 of the CA Regulations. 123 Regulation 157(1)(b) of the CA Regulations. 124 cf R v Morris [2004] QCA 408 at [4]-[7], [38]-[40], [51]. 125 cf The Commonwealth v Australian Capital Territory (2013) 250 CLR 441 at 466 [52]; [2013] HCA 55, citing Re Governor, Goulburn Correctional Centre; Ex parte Eastman (1999) 200 CLR 322 at 351 [75]; [1999] HCA 44. Territory (not being a law of the Commonwealth) and a provision of the regulations is whether the Territory law, if operative, would "alter, impair or detract from" the operation of the regulation126. Section 98(7) has nothing to say about the extent to which the CA Regulations are intended to operate as a complete or exhaustive statement of the law on any subject-matter. Moreover, the section has nothing to say about the relationship between the CA Regulations and any State law. The section is rather framed to leave no doubt that a Territory law is either to stand with or yield to a regulation in precisely the same way as would a State law by force of s 109 of the Constitution. To resolve the question of inconsistency in the present case, I do not think it is necessary to attempt to describe the area of operation of the CA Act with any greater precision than the prescription and enforcement of standards for the safe operation of aircraft. That is because, contrary to the ultimate holding in Heli-Aust, I am unable to construe the CA Act as including the subject-matter of s 28BE within the area in which that operation is exhaustive in light of the statement in s 28BE(5) that s 28BE "does not affect any duty imposed by, or under, any other law of the Commonwealth, or of a State or Territory, or under the common law". Section 28BE(5) makes plain that, irrespective of precisely how the area of operation of the CA Act might be described, the particular subject-matter of s 28BE is not within its exclusive operation. The subject- matter of s 28BE can be sufficiently described as the general requirement to exercise reasonable care and diligence in the operation of an aircraft. Of course, the CA Act itself prescribes, and permits the prescription of, standards for the safe operation of aircraft which incorporate some requirement for the exercise of some measure of care and diligence. An example is the requirement in reg 215(2) of the CA Regulations that an operator ensure that an operations manual contains "such information, procedures and instructions with respect to the flight operations of all types of aircraft operated by the operator as are necessary to ensure the safe conduct of the flight operations". The regulation must be taken to be a definitive statement of all that an operator has an obligation to include in an operations manual. The standard which reg 215(2) prescribes nevertheless coexists within the scheme of the CA Act with the obligation imposed on the operator by s 28BE(1) to exercise reasonable care and diligence in the operation of an aircraft, and the standard can also coexist with a similar obligation imposed on the operator by a State or Territory law. Some degree of overlap between a specifically prescribed standard and the general obligation imposed on the operator by s 28BE(1) accordingly does nothing to detract from the operation of s 28BE(5), which enables a State or Territory law to impose an enforceable obligation on the operator of an aircraft to exercise reasonable care 126 cf The Commonwealth v Australian Capital Territory (2013) 250 CLR 441 at 468 and diligence in the operation of an aircraft β an obligation which is cumulative upon all of the obligations that the operator has as the holder of an AOC under the CA Act. To construe s 28BE(5) as an express acknowledgement of the cumulative or concurrent operation of State and Territory laws requiring the exercise of reasonable care and diligence in the operation of an aircraft is not to overlook the point made in Heli-Aust that s 28BE(5) is addressed in terms only to the non- exclusive operation of s 28BE itself127. What is important to recognise is that s 27(2) prohibits the operation of an aircraft in Australia except, relevantly, by the holder of an AOC and that the obligation imposed on the holder of an AOC by s 28BE(1) to "take all reasonable steps to ensure that every activity covered by the AOC, and everything done in connection with such an activity, is done with a reasonable degree of care and diligence" is necessarily cumulative upon the obligation imposed on the holder of an AOC by s 28BD(1) to "comply with all requirements of [the CA Act], the [CA Regulations] and the Civil Aviation Orders that apply to the holder". By making clear that a State or Territory law can impose a duty which coexists with the obligation imposed on the holder of an AOC by s 28BE(1), s 28BE(5) makes equally clear that a State or Territory law can impose a duty on the holder of an AOC which exists cumulatively upon the obligation imposed on the holder of an AOC by s 28BD(1) to comply with the other requirements of the Act, with the CA Regulations and with applicable Civil Aviation Orders. Nor is to construe s 28BE(5) as an express acknowledgement of the cumulative or concurrent operation of State and Territory laws requiring the exercise of reasonable care and diligence in the operation of an aircraft to overlook another point made in Heli-Aust128, that s 28BE(5) "has work to do in fields removed, and potentially far removed, from the maintenance of safety in civil aviation". That point may be accepted, but it does not mandate a construction of s 28BE(5) which would confine the section's operation to duties other than duties to exercise reasonable care or diligence in the operation of an aircraft. Such a construction does not sit comfortably with either s 28BE(5)'s reference to "[t]his section" or the generality of its references to "any other law" and "any duty". Such a construction, moreover, runs counter to the stated legislative purpose of inserting s 28BE(5) into s 28BE. The purpose recorded in the Explanatory Memorandum accompanying the Bill for the amending Act was to clarify that although s 28BE imposes by s 28BE(1) an obligation on the holder of an AOC to exercise reasonable care or diligence in the operation of an aircraft, a contravention of this obligation will not, by reason of s 28BE(4), give rise to an 127 (2011) 194 FCR 502 at 531 [71]. 128 (2011) 194 FCR 502 at 531 [72]. action for damages or compensation. The Explanatory Memorandum notes that s 28BE does not "affect any common law duty of care or any other statutory duty under which a person may be able to bring an action in negligence or other legal proceedings against the AOC holder"129. The potential scope of the "other legal proceedings against the AOC holder" to which reference was made in the Explanatory Memorandum is worth noting. The Chicago Convention has taken its place in international law alongside first the Warsaw Convention130 and then the Montreal Convention131, each of which has regulated the civil liability of international carriers. In the same way, the CA Act has taken its place within the Commonwealth statute book alongside the Civil Aviation (Carriers' Liability) Act 1959 (Cth), which regulates the civil liability of international carriers. The CA Act has done so against the background of complementary State statutes132 and of the common law, which together regulate the civil liability of domestic carriers. And just as the CA Act now sits within the Commonwealth statute book alongside the Work Health and Safety Act 2011 (Cth), so the latter Act has come to be mirrored in complementary legislation in each State (other than Victoria and Western Australia) and Territory, of which the NT WHS Act is an example, imposing general obligations on persons conducting businesses or undertakings to "ensure, so far as is reasonably practicable", that health and safety is not put at risk133. Provided the qualification "so far as is reasonably practicable" takes as given the obligation to comply with the standards imposed by or under the CA Act, the application of those general statutory obligations to air operations conducted by the holder of an AOC creates no legal impediment and no obvious practical 129 Australia, Senate, Civil Aviation Legislation Amendment Bill 1995, Explanatory Memorandum at 26. 130 Convention for the Unification of Certain Rules relating to International Carriage by Air (1929). 131 Convention for the Unification of Certain Rules for International Carriage by Air 132 See Civil Aviation (Carriers' Liability) Act 1961 (Vic); Civil Aviation (Carriers' Liability) Act 1961 (WA); Civil Aviation (Carriers' Liability) Act 1962 (SA); Civil Aviation (Carriers' Liability) Act 1963 (Tas); Civil Aviation (Carriers' Liability) Act 1964 (Qld); Civil Aviation (Carriers' Liability) Act 1967 (NSW). 133 See Work Health and Safety Act 2011 (Cth), s 19(2); Work Health and Safety (National Uniform Legislation) Act 2011 (NT), s 19(2); Work Health and Safety Act 2011 (ACT), s 19(2); Work Health and Safety Act 2011 (NSW), s 19(2); Work Health and Safety Act 2011 (Qld), s 19(2); Work Health and Safety Act 2012 (SA), s 19(2); Work Health and Safety Act 2012 (Tas), s 19(2). impediment to the prescription or enforcement of standards for the safe operation of aircraft within the framework established by the CA Act. To draw a mundane terrestrial analogy, the relevant distinction between the exclusive and non-exclusive areas of operation of the CA Act is akin to the distinction between, on the one hand, the statutory duties of the driver of a motor vehicle to be licensed and to obey the rules of the road, and, on the other hand, the common law and statutory duties of the driver of a motor vehicle to exercise reasonable care for the safety of other persons in the operation of the motor vehicle. Far from being in conflict, the two sets of duties are complementary. There is nothing in the argument that the CA Act does not contemplate the intrusion into aircraft operations of a regulator other than the Civil Aviation Safety Authority ("CASA") and therefore does not accommodate investigative or enforcement action by the Work Health Authority under the NT WHS Act. Section 28BE(5)'s acknowledgement that the holder of an AOC can be subject to a duty imposed by or under another law carries with it an acknowledgement that the holder can become subject to investigative and enforcement action by a regulatory authority having responsibility for the administration of that other law. To the extent that particular administrative action taken by such a regulator might have the potential to impair or detract from the operation of the CA Act or action taken by CASA under the CA Act, the question of whether the action of the regulator might give rise to "operational" inconsistency would appropriately be addressed if and when the question arose. There is no such question in this case. The mere potential for inconsistency to arise in practice as a consequence of the exercise of one or more statutory powers is no reason for holding the statutes conferring those powers to be inconsistent in all of their potential applications134. For these reasons, I would allow the appeal and make the consequential orders proposed by Kiefel CJ, Bell, Keane, Nettle and Gordon JJ. 134 Victoria v The Commonwealth (1937) 58 CLR 618 at 631-632; Carter v Egg and Egg Pulp Marketing Board (Vict) (1942) 66 CLR 557 at 574-576; [1942] HCA 30; The Commonwealth v Western Australia (1999) 196 CLR 392 at 417 [62], 441 [145]; [1999] HCA 5. Edelman Every day, aircraft pilots in Australia operate flights consistently with the rules of the air, making decisions that could affect the safety of themselves and Those decisions must be made consistently with their passengers. Commonwealth legislation and legislative instruments, collectively described on this appeal as the Civil Aviation Law. The Civil Aviation Law provides a comprehensive, uniform scheme for regulating safety of air navigation. It gives effect the Convention on International Civil Aviation (1944) ("the Chicago Convention"), the "highest obligation"135 of which was to secure uniformity of aviation practices with the object of safety and orderly growth of civil aviation136. Does the Civil Aviation Law contemplate that its scheme, including duties concerning aviation safety, could be fragmented by the concurrent application of a different safety regime in the States and Territories? It is plain that the answer to this question in relation to the rules of the air is "no"137. The Civil Aviation Law operates exclusively to cover a subject matter that includes at least the rules of the air. The Attorney-General of the Commonwealth gave this answer "without hesitation". The first respondent, Outback Ballooning Pty Ltd, described it as "self-evident". The appellant Work Health Authority and the Attorney-General for the State of Western Australia described that circumstance as one that might "cry out for one comprehensive regulatory regime". As an example, it would be surprising, confusing, and potentially dangerous if the Civil Aviation Law were to have the effect that the rules of the air on a flight from Darwin to Melbourne, via Sydney, could be regulated not merely by the comprehensive and uniform rules policed by the Commonwealth Civil Aviation Safety Authority ("CASA"), but also, depending upon the airspace, by separate and different rules policed by the Work Health Authority and its inspectors in the Northern Territory, or regulators in New South Wales and Victoria. In order to avoid jeopardy to safety, since aircraft cross State and Territory boundaries, there must be "uniform standards for personnel training and licensing, rules of the air, units of measurement, certification of airworthiness, aeronautical communications, characteristics of airports, aircraft operation and many other aspects"138. 135 Airlines of NSW Pty Ltd v New South Wales [No 2] ("Airlines No 2") (1965) 113 CLR 54 at 87; [1965] HCA 3. 136 Airlines No 2 (1965) 113 CLR 54 at 86, see also at 152. 137 Airlines No 2 (1965) 113 CLR 54 at 151. 138 Milde, International Air Law and ICAO, 2nd ed (2012) at 167. Edelman The essential issue on this appeal is whether this zone of exclusivity of the Civil Aviation Law includes standards concerning safety in the process of boarding an aircraft in s 19(2) of the Work Health and Safety (National Uniform Legislation) Act 2011 (NT) ("the WHS Act"). The Court of Appeal of the Northern Territory held that it does. To determine whether that conclusion is correct requires characterisation of the zone of exclusivity. The Work Health Authority submitted that the Court of Appeal erred because the Civil Aviation Law was exclusive only with respect to "safety in civil aviation or air navigation in flight, including ground operations which affect the safety of aviation and passengers in flight". The Work Health Authority submitted that this did not apply to safety in the course of boarding an aircraft. If the Work Health Authority's submission were correct, the result in this appeal would differ depending upon whether the breach of a safety standard occurred in the moments immediately before take-off or the moments immediately after it. That submission should not be accepted. The Court of Appeal was correct to conclude that the zone of exclusivity extended to the circumstances of this case. The exclusive subject matter of the Civil Aviation Law extends to the prescription and enforcement of standards of safety in the conduct of air navigation in, or from, Australia. That subject matter is not limited to the period commencing when an aircraft leaves the ground. It includes, at least, the period before flight when passengers are boarding, especially if an aeroplane engine or hot air balloon inflation fan is running. There are, of course, some subject matters which are outside the exclusive regime of air safety. These include the general criminal law, air security, and torts to individuals. No party to this appeal submitted that any of these matters was the subject matter of s 19(2) of the WHS Act. No party supported, and the Commonwealth denied, any analogy with the law of torts, which falls outside the exclusive regime, that the subject matter of s 19(2) was the protection of individual rights. That approach was correct. There is a fundamental conceptual gulf between the protection of individual rights by the law of torts and laws concerning the general regulation of safety of the community. The subject matter of the WHS Act concerns the prescription and enforcement of standards of safety of all persons in a business. None of the parties to this appeal submitted that the WHS Act could be construed to exclude from its application the safety of air navigation. Hence, the exclusivity of the Civil Aviation Law over the same subject matter where the business involves air navigation has the effect that s 19(2) of the WHS Act is invalid insofar as its terms purport to establish concurrent regulation over the safety of air navigation, including the process of boarding an aircraft. The appeal should be dismissed. Edelman B. The context of the issue on this appeal Outback Ballooning provides hot air balloon flights to the public. On 13 July 2013, the pilot in command was supervising the boarding of a balloon by passengers. The inflation fan, a standalone piece of equipment used to inflate the balloon, had been started. A passenger, Ms Bernoth, was directed to board the balloon from the side where the inflation fan was operating. Ms Bernoth was wearing a scarf around her neck. As she boarded the balloon, her scarf was sucked into the fan. She was severely injured and later died in hospital. Outback Ballooning was charged by the Work Health Authority under s 32 of the WHS Act for failing to comply with its duty under s 19(2) to ensure, so far as is reasonably practicable, that the health and safety of other persons is not put at risk from work carried out as part of the conduct of its business. The complaint issued against Outback Ballooning in essence alleges that Outback Ballooning failed to eliminate or minimise risks to the health and safety of persons as far as was reasonably practicable because it would have been reasonably practicable to take the following steps: (i) warn passengers about the danger of having loose clothing around the inflation fan, and check passengers while giving such a warning; (ii) set up an exclusion zone and physical barrier around the fan; and (iii) direct passengers not to walk past the fan while in operation or supervise passengers to ensure they kept a safe distance if there was a need to walk past the fan. The Court of Appeal, following the decision of the Full Court of the Federal Court of Australia in Heli-Aust Pty Ltd v Cahill139, held that the Civil Aviation Law exclusively regulated the subject matter of the safety of civil aviation in Australia and that this extended to the boarding or loading of passengers onto the balloon in the circumstances of this case140. The Court of Appeal therefore concluded that s 19(2) did not operate in relation to the boarding of a balloon by passengers. That conclusion was correct. 139 (2011) 194 FCR 502. 140 Outback Ballooning Pty Ltd v Work Health Authority (2017) 326 FLR 1 at 11-12 C. The structure of these reasons The remainder of these reasons is structured as follows: Edelman D. The concept of inconsistency E. The subject matter exclusively covered by the Civil Aviation Law (i) The dispute about the extent of exclusivity (ii) The consistent international goal of uniform safety rules for air navigation (iii) The international goal was a basis for the Civil Aviation Law (iv) The textual basis for exclusivity of safety of air navigation in the Civil Aviation Act (v) Territorial self-government provisions do not detract from exclusivity (vi) The 1995 amendments to the Civil Aviation Act did not alter its exclusivity F. Subject matters not exclusively covered by the Civil Aviation Law (i) Workplace health and safety unconnected with safety standards for air navigation (ii) The general law duty of care and torts generally (iii) The general criminal law and air security G. The WHS Act and the subject matter of s 19(2) H. Section 19(2) of the WHS Act is inconsistent with the Civil Aviation Law in its application to air navigation I. Conclusion D. The concept of inconsistency The concept of inconsistency between a Commonwealth law and a Northern Territory law involves the same test as, although not identical Edelman consequences to141, the concept, recognised in s 109 of the Constitution, of inconsistency between a Commonwealth law and a State law142. The different consequences are that inconsistency leads to a State law being inoperative, capable of later revival, but it leads to the Territory law being invalid and beyond power due to either an express limit on Territory law-making power for inconsistencies with earlier Commonwealth laws143 or a necessarily implied limitation for inconsistencies with later Commonwealth laws144. The early view of s 109, expounded by Griffith CJ, was that inconsistency was limited to circumstances where obedience to both laws was impossible145. But, as Gummow J and Hayne J observed, that view did not prevail146. Inconsistency arises whenever there is a "real conflict" between two laws147. Real conflict occurs whenever a State or Territory law "would alter, impair or detract from"148 the Commonwealth law. This verbal formula concerning altering, impairing, or detracting has sometimes been limited to instances 141 See R v Kearney; Ex parte Japanangka (1984) 158 CLR 395 at 418-419; [1984] HCA 13; Attorney-General (NT) v Hand (1989) 25 FCR 345 at 366-367, and the discussion in Twomey, "Inconsistency Between Commonwealth and Territory Laws" (2014) 42 Federal Law Review 421 at 422-423, 426. See also University of Wollongong v Metwally (1984) 158 CLR 447 at 464; [1984] HCA 74. 142 Northern Territory v GPAO (1999) 196 CLR 553 at 581-582 [57], 630 [202], 636 [219]; [1999] HCA 8. 143 Northern Territory (Self-Government) Act 1978 (Cth), s 57; Northern Territory v GPAO (1999) 196 CLR 553 at 578-579 [46]-[49]. 144 Twomey, "Inconsistency Between Commonwealth and Territory Laws" (2014) 42 Federal Law Review 421 at 426; Leeming, Resolving Conflicts of Laws (2011) 145 Federated Saw Mill &c Employes of Australasia v James Moore & Son Pty Ltd (1909) 8 CLR 465 at 500; [1909] HCA 43; Australian Boot Trade Employes Federation v Whybrow & Co (1910) 10 CLR 266 at 286; [1910] HCA 8. 146 Momcilovic v The Queen (2011) 245 CLR 1 at 110-111 [241], 135 [322]; [2011] HCA 34. 147 Jemena Asset Management (3) Pty Ltd v Coinvest Ltd (2011) 244 CLR 508 at 525 [42]; [2011] HCA 33. 148 Victoria v The Commonwealth (1937) 58 CLR 618 at 630; [1937] HCA 82. See also Stock Motor Ploughs Ltd v Forsyth (1932) 48 CLR 128 at 136-137; [1932] HCA 40. Edelman described as "direct inconsistency", with a different category of conflict said to be one of "indirect inconsistency". This distinction can mislead149, especially in this context. A better approach, without attempting to abolish concepts that have a long-established usage in both case law and legislation, is to accept that both direct and indirect inconsistency involve the State or Territory law altering, impairing, or detracting from the Commonwealth law but to acknowledge that the descriptions of direct and indirect inconsistency are simply attempts to describe different ways that this can occur. The category sometimes described as indirect inconsistency arises where the State, or Territory150, law purports to address a subject matter despite an expression or an implication that the Commonwealth law is exhaustive, "covering"151 a "subject matter" or a "matter"152. In other words, indirect inconsistency usually describes an implication where the Commonwealth law "contains an implicit negative proposition that nothing other than what the [Commonwealth] law provides upon a particular subject matter is to be the subject of legislation"153. The existence of such an implication, and the characterisation of the subject matter, is determined by interpretation of the Commonwealth law154. It will usually be a logically anterior issue to that of "direct" inconsistency. 149 See Ansett Transport Industries (Operations) Pty Ltd v Wardley (1980) 142 CLR 237 at 280; [1980] HCA 8; Momcilovic v The Queen (2011) 245 CLR 1 at 112 150 See The Commonwealth v Australian Capital Territory (2013) 250 CLR 441 at 466 [52]; [2013] HCA 55; cf Civil Aviation Act 1988 (Cth), s 98(7). 151 Ex parte McLean (1930) 43 CLR 472 at 483; [1930] HCA 12. 152 Ex parte McLean (1930) 43 CLR 472 at 483; Victoria v The Commonwealth (1937) 58 CLR 618 at 630, 634; Telstra Corporation Ltd v Worthing (1999) 197 CLR 61 at 76 [28]; [1999] HCA 12; Dickson v The Queen (2010) 241 CLR 491 at 502 [13]; [2010] HCA 30; Momcilovic v The Queen (2011) 245 CLR 1 at 118 [264]. 153 Momcilovic v The Queen (2011) 245 CLR 1 at 111 [244]. See also The Commonwealth v Australian Capital Territory (2013) 250 CLR 441 at 468 154 Jemena Asset Management (3) Pty Ltd v Coinvest Ltd (2011) 244 CLR 508 at 526 [45]; Momcilovic v The Queen (2011) 245 CLR 1 at 111 [242], 135 [323]; Bell Group NV (In liq) v Western Australia (2016) 260 CLR 500 at 521-522 [52]; [2016] HCA 21. Edelman In contrast, the description "direct inconsistency" is usually applied where the State or Territory law alters, impairs, or detracts from the Commonwealth law either despite the two laws operating on different subject matters or despite the Commonwealth law not excluding concurrent operation on the same subject matter. Following a concession by Outback Ballooning in oral submissions, this appeal is not concerned with so-called direct inconsistency. It is concerned only with indirect inconsistency. E. The subject matter exclusively covered by the Civil Aviation Law The starting point for an assessment of inconsistency is the interpretation of the Commonwealth law155. The relevant Commonwealth law on this appeal is comprised in the suite of laws, described on this appeal as the Civil Aviation Law, that give effect to Australia's obligations under the Chicago Convention. The Civil Aviation Law includes the remaining provisions of the Air Navigation Act 1920 (Cth), s 3A of which approves Australia's ratification of the Chicago Convention. However, the Civil Aviation Law primarily comprises the Civil Aviation Act 1988 (Cth), which repealed and substantially re-enacted parts of the Air Navigation Act. The Civil Aviation Law also includes instruments made under the Civil Aviation Act, namely, the Civil Aviation Regulations 1988 (Cth), the Civil Aviation Safety Regulations 1998 (Cth), and Civil Aviation Orders. In 1960, one reason given by the Minister for Defence for not restricting the Civil Aviation Law to a single instrument, including "many of the regulations [that] relate to detailed safety standards", was the frequency with which, and extent to which, the Annexes to the Chicago Convention were amended156. (i) The dispute about the extent of exclusivity There can be little doubt that the Civil Aviation Law contains the implicit negative proposition that nothing other than what the Commonwealth law provides upon a particular subject matter is to be the subject of legislation. The existence of a core of exclusivity in the Civil Aviation Law is clear from the background, context, and text of the Civil Aviation Law. Each of the background, context, and text of the Civil Aviation Law supports an implication, in terms expressed by Outback Ballooning, that the law exclusively covers at least the subject matter of the prescription and enforcement of standards of safety in the conduct of civil air navigation in, to or from Australia. Expressed in short, the exclusive subject matter is standards of safety in air navigation. 155 Momcilovic v The Queen (2011) 245 CLR 1 at 115 [258]. 156 Australia, House of Representatives, Parliamentary Debates (Hansard), 17 May Edelman that For instance, the parties the exclusivity. Although none of this appeal disputed the scope or boundaries of the Commonwealth Parliament intended the Civil Aviation Law to be exclusive as to some subject matter, none of the parties other than Outback Ballooning focused upon the Attorney-General of the Commonwealth conceded in oral reply that there was a "subject that the Commonwealth has comprehensively regulated" and a "comprehensive Commonwealth sphere", but did not seek to define that sphere or to explain its boundaries. The Work Health Authority accepted that the Civil Aviation Law had exclusive coverage over some subject matter but only in oral reply did it submit that, if pressed to formulate the subject matter of exclusivity, it would adopt the formulation of Barr J in the Supreme Court of the Northern Territory157 that the Civil Aviation Law was "exclusive on the subject matter of safety in civil aviation or air navigation in flight, including ground operations which affect the safety of aviation and passengers in flight". The Work Health Authority submitted that "ground operations" affecting "the safety of aviation and passengers in flight" did not include the embarkation of passengers. No party contended that a hot air balloon was exempted from the exclusivity of the Civil Aviation Law. Such a submission could not have succeeded in light of (i) the width of the current definition of aircraft in the Civil Aviation Law, and its background and context, which specifically included hot air balloons158, and (ii) the detail of regulations and orders in the Civil Aviation Law dealing specifically with hot air balloons159. (ii) The consistent international goal of uniform safety rules for air navigation The first multilateral attempt at uniformity of regulation of air safety was the Convention relating to the Regulation of Aerial Navigation (1919) ("the Paris Convention"). The Paris Convention was ratified by over 30 states, including Australia. In Art 2, each contracting state undertook in times of peace to accord freedom of innocent passage above its territory to the aircraft of other contracting states, provided that the conditions under the Paris Convention were 157 Work Health Authority v Outback Ballooning Pty Ltd (2017) 318 FLR 294 at 301 158 Civil Aviation Act, s 3. See also Laroche v Spirit of Adventure (UK) Ltd [2009] QB 778 at 789 [45]; Air Navigation Regulations 1921 (Cth) Statutory Rule No 33 of 1921, reg 3(1). 159 Civil Aviation Regulations 1988 (Cth), Pt 5, regs 58(1), 59(3), 60, 162(1), 259, Sch 7 Pt 5; Civil Aviation Safety Regulations 1998 (Cth), regs 21.021, 21.184(4)(a), 21.820(4)(a), 21.825, 21.830, Pt 31; Civil Aviation Orders 20.16.3, 40.7, 82.7, Edelman observed. Those included conditions in its Annexes which set uniform standards with respect to airworthiness for airlines and certificates of competency for pilots, and established an independent body whose purposes included the harmonisation of standards in technical matters160. In 1944, the Chicago Convention "supersede[d]"161 the Paris Convention. The need for uniformity is central to the Chicago Convention. Part II of the Chicago Convention establishes the International Civil Aviation Organization ("the ICAO"), of which Australia is one of the 192 member states. The objectives of the ICAO are stated in Art 44 and include the promotion of "safety of flight in international air navigation". One of the mandatory functions of the Council of the ICAO is to adopt "international standards and recommended practices", which are promulgated as Annexes to the Chicago Convention162. Article 12 of the Chicago Convention provides that contracting states undertake to keep uniform, "to the greatest possible extent", the Convention rules and regulations relating to the flight and manoeuvre of aircraft. Article 37 provides for contracting states to "collaborate in securing the highest practicable degree of uniformity in regulations, standards, procedures, and organization in relation to aircraft, personnel, airways and auxiliary services in all matters in improve air navigation". which In Airlines No 2163, Barwick CJ described Art 37 as an obligation "to secure in Australia uniformity of standards, practices, procedures and organization to the extent mentioned in art 37, and where annexes have been relevantly adopted to achieve uniformity according to the standards, practices and procedures which they do adopt". such uniformity will facilitate and Annex 6 to the Chicago Convention, entitled "Operation of Aircraft"164, has the purpose of contributing to "the safety of international air navigation by providing criteria of safe operating practice", and contains "the minimum Standards applicable to the operation of aeroplanes". It defines a "Standard" in terms that relate to safety and uniformity165: 160 Bartsch, Aviation Law in Australia, 4th ed (2013) at 5 [1.10]; Havel and Sanchez, The Principles and Practice of International Aviation Law (2014) at 31. 161 Chicago Convention, Art 80. 162 Chicago Convention, Art 54(l). 163 (1965) 113 CLR 54 at 87, see also at 138 per Menzies J and at 152 per Windeyer J. 164 Annex 6 to the Chicago Convention, 9th ed (2010), Pt I at (xviii). 165 Annex 6 to the Chicago Convention, 9th ed (2010), Pt I at (xxi). Edelman "Standard: Any specification for physical characteristics, configuration, matΓ©riel, performance, personnel or procedure, the uniform application of which is recognized as necessary for the safety or regularity of international air navigation and to which Contracting States will conform in accordance with the Convention; in the event of impossibility of compliance, notification to the Council is compulsory under Article 38." Annex 6 provides for state parties to "establish a State safety programme in order to achieve an acceptable level of safety in civil aviation"166 and to "require, as part of their State safety programme, that an operator implement a safety management safety requirements167. fulfils various minimum system" which to notify the ICAO The general provision in Annex 6 for the implementation of minimum safety requirements is not one that invites a number of different standards within a single contracting state. It strives towards a goal of uniformity, by providing for a single international standard imposing a duty upon operators to achieve a required minimum level of safety. For this reason, Art 38 requires a contracting state the ICAO's standards. The notification must be given where the domestic regulations or practices differ "in any particular respect" from the international standard168. The notification must be given immediately. The Council of the ICAO is then obliged to make immediate notification of that difference to all other contracting states. The rationale for this strict requirement to notify any differences is the need for full transparency so that all contracting states are "aware, in the interest of safety of air navigation, that in a particular place the standard procedures, facilities or services are not available"169. it deviates from (iii) The international goal was a basis for the Civil Aviation Law The legislation comprising the Civil Aviation Law was enacted and amended against the background of these efforts, now over nearly a century, to create uniformity in air navigation laws and consequent safety. As Barwick CJ 166 Annex 6 to the Chicago Convention, 9th ed (2010), Pt I, Ch 3, cl 3.3.1. 167 Annex 6 to the Chicago Convention, 9th ed (2010), Pt I, Ch 3, cl 3.3.3. 168 Chicago Convention, Art 38. 169 Milde, "Enforcement of Aviation Safety Standards: Problems of Safety Oversight" (1996) 45 German Journal of Air and Space Law 3 at 6. See also Milde, International Air Law and ICAO, 2nd ed (2012) at 171. Edelman said in Airlines No 2170, the object of uniformity is "the safety and orderly growth of civil aviation throughout the world". The Paris Convention and its Annexes were described by Latham CJ, quoting the Privy Council, as covering "almost every conceivable matter relating to aerial navigation"171. In 1937, following an unsuccessful attempt to confer power on the Commonwealth to make laws with respect to air navigation and aircraft, which failed at a referendum172, the Commonwealth and State governments agreed that each State would enact legislation which, as recited in the preambles to the Acts, applied the Commonwealth Air Navigation Regulations within each State to provide for "uniform rules throughout the Commonwealth" on matters including air navigation and aircraft173. The Chicago Convention, which Australia ratified in 1947, was likewise described by Owen J as covering "almost every conceivable matter relating to aerial navigation"174. The Air Navigation Act 1947 (Cth) and the Air Navigation Act (No 2) 1947 (Cth) amended the Air Navigation Act to approve of Australia's ratification of the Chicago Convention and to confer power, on the "widest possible basis", to make regulations for the purpose of carrying out and giving effect to the Chicago Convention175. In 1960176, when significant amendments were made to the Air Navigation Act, the Chicago Convention was included as a Schedule. And in 1964177, the Commonwealth, relying in part upon an expanded view of s 51(i) of the Constitution, extended the Air Navigation Regulations 170 (1965) 113 CLR 54 at 86, see also at 151-152 per Windeyer J. 171 R v Burgess; Ex parte Henry (1936) 55 CLR 608 at 634; [1936] HCA 52, quoting In re The Regulation and Control of Aeronautics in Canada [1932] AC 54 at 77. 172 And again in 1944: see Airlines of NSW Pty Ltd v New South Wales ("Airlines No 1") (1964) 113 CLR 1 at 37; [1964] HCA 2. 173 Air Navigation Act 1938 (NSW); Air Navigation Act 1937 (Vic); Air Navigation Act 1937 (SA); Air Navigation Act 1937 (Qld); Air Navigation Act 1937 (WA); Air Navigation Act 1937 (Tas). See also Airlines No 1 (1964) 113 CLR 1 at 35; Richardson, "Aviation Law in Australia" (1965) 1 Federal Law Review 242 at 252. 174 Airlines No 2 (1965) 113 CLR 54 at 159. 175 Airlines No 1 (1964) 113 CLR 1 at 37. 176 Air Navigation Act 1960 (Cth). 177 Air Navigation Regulations (Amendment) (Cth) Statutory Rule No 128 of 1964, reg 3(c). See Airlines No 2 (1965) 113 CLR 54 at 96, 111, 123, 153. Edelman (Cth), which Taylor J had earlier described as a "studied and careful attempt to devise general and comprehensive rules for securing safety in and in relation to the operation of aircraft"178, to all civil air navigation in Australia, domestic or international. Similarly, s 98(1) of the Civil Aviation Act provides for a purpose of making regulations to be "carrying out and giving effect to the provisions of the Chicago Convention relating to safety"179 and "in relation to safety of air navigation" within the limits of the powers of the Commonwealth Parliament180. Like the Air Navigation Regulations, the Civil Aviation Regulations are expressed to apply to all civil air navigation within Australian territory181. (iv) The textual basis for exclusivity of safety of air navigation in the Civil Aviation Act The long title of the Civil Aviation Act is "An Act to establish a Civil Aviation Safety Authority with functions relating to civil aviation, in particular the safety of civil aviation, and for related purposes". Together with the provisions in Pt 14 of the Civil Aviation Regulations and certain Civil Aviation Orders, the Civil Aviation Act implements and extends the safety requirements in Annex 6 in a consistent regime of standards of safety of air navigation in Australia, domestic or international. The careful and detailed text of the Civil Aviation Law prescribes a regime for safety of air navigation that requires an exclusive and unitary, uniform approach because every person involved in an air operation must be able to identify the set of rules governing the safety of that operation, and must be able to identify the person with whose directions he or she is required to comply182. That can become impracticable or impossible if there are two or more safety regimes, involving instructions from two or more safety regulators, even if those regimes and instructions impose identical obligations. Indeed, one of the matters about which CASA must be satisfied before issuing an Air Operator's Certificate ("AOC") is that "the organisation's chain of command is appropriate to ensure that the AOC operations can be conducted or carried out safely"183. 178 Airlines No 1 (1964) 113 CLR 1 at 39. 179 Civil Aviation Act, s 98(1)(c). 180 Civil Aviation Act, s 98(1)(d)-(f). 181 Civil Aviation Regulations, reg 3(1)(a)-(e), (g). 182 See Bartsch, Aviation Law in Australia, 4th ed (2013) at 471 [12.130]. 183 Civil Aviation Act, s 28(1)(b)(ii). Edelman CASA is established by s 8 of the Civil Aviation Act. By s 9, CASA's functions include conducting the safety regulation of civil air operations in Australian territory by means that include developing and promulgating appropriate, clear and concise aviation safety standards. In exercising its powers and performing its functions, CASA must regard the safety of air navigation as the most important consideration184 and act consistently with Australia's obligations under the Chicago Convention185, including Annex 6186. Section 27(2)(b) provides relevantly that an aircraft shall not operate in Australian territory except as authorised by an AOC. An AOC is issued by CASA on an application made in accordance with Pt III, Div 2, Subdiv B. CASA must issue an AOC if, and only if, the criteria in s 28 are satisfied, most of which are concerned with safety. The first of these is that CASA is satisfied that the applicant has complied with, or is capable of complying with, the "safety rules"187. The safety rules are, in effect, all the provisions of the Civil Aviation Law that relate to safety188. And, as explained above, most are contained in the Civil Aviation Regulations due to the frequency with which, and extent to which, the Chicago Convention is amended. A central manner in which the Civil Aviation Regulations have regulated safety is by imposing a duty upon operators to create an operations manual that contains all matters necessary to ensure safe flight operations. This implements cl 4.2.3 of Pt I of Annex 6 to the Chicago Convention. An applicant for an AOC is required to lodge the current or proposed version of the operations manual with CASA189. The regulations, as supplemented by directions given by CASA in the form of Civil Aviation Orders, are highly prescriptive of the content of the operations manual and the consequences for failing to comply with it. Of particular note is reg 215 of the Civil Aviation Regulations. An obligation in this form has existed since its predecessor, reg 212 of the Air Navigation Regulations, was amended in 1971190. Regulation 215(1) requires 184 Civil Aviation Act, s 9A(1). 185 Civil Aviation Act, s 11. 186 Civil Aviation Act, s 3 (definition of "Chicago Convention"). 187 Civil Aviation Act, s 28(1)(a). 188 Civil Aviation Act, s 3 (definition of "safety rules"). 189 Civil Aviation Act, s 27AB(2)(a). 190 Air Navigation Regulations (Amendment) (Cth) Statutory Rule No 31 of 1971, reg 31. Edelman an operator to provide an operations manual for the use and guidance of the operations personnel of the operator. The operator must ensure that the operations manual contains "such information, procedures and instructions with respect to the flight operations of all types of aircraft operated by the operator as are necessary to ensure the safe conduct of the flight operations"191. The operator must revise the operations manual from time to time where necessary192, and CASA may give a direction requiring that the operator include particular content or revise the operations manual193. Each member of the operations personnel of an operator must comply with all applicable instructions contained in the operations manual194. Offences under reg 215 are strict liability offences195. Section 29(1) of the Civil Aviation Act creates an offence where the owner, operator, hirer, or pilot of an aircraft operates the aircraft or permits the aircraft to be operated in contravention of a provision of Pt III of the Civil Aviation Act or a direction given or condition imposed under such a provision. When read with s 28BD(1), which requires the holder of an AOC to comply with all applicable requirements of the Civil Aviation Law, s 29(1) has the effect of criminalising a breach of any of the requirements of the Civil Aviation Law if the holder of the AOC is the owner, operator, hirer, or pilot of the aircraft. An offence is also committed under s 29(3) if the owner, operator, hirer, or pilot of an aircraft operates the aircraft being reckless as to whether the manner of operation could endanger the life of another person. The textual detail of the regime of safety of air navigation is particularly prominent in the provisions of the Civil Aviation Law that concern the authority of the pilot in command. Under reg 224(2) of the Civil Aviation Regulations, the pilot in command is responsible for: (a) the start, continuation, diversion and end of a flight by the aircraft; (b) the operation and safety of the aircraft during flight time; (c) the safety of persons and cargo carried on the aircraft; and (d) the conduct and safety of members of the crew on the aircraft. The pilot in command must discharge these responsibilities in accordance with the Civil Aviation Law and, if applicable, the operations manual196. The pilot in command's 191 Civil Aviation Regulations, reg 215(2). 192 Civil Aviation Regulations, reg 215(5). 193 Civil Aviation Regulations, reg 215(3). 194 Civil Aviation Regulations, reg 215(9). 195 Civil Aviation Regulations, reg 215(11). 196 Civil Aviation Regulations, reg 224(2A). Edelman responsibility for maintaining discipline of all persons on board creates a correlative duty on the part of those persons to obey the pilot in command197. (v) Territorial self-government provisions do not detract from exclusivity Some Commonwealth laws and regulations contain a provision which evinces "an intention that the statute is not intended to cover the field", for example by providing that the law is "not intended to exclude or limit" the concurrent operation of any State and Territory laws198, or by referring to the "concurrent operation" of laws of both States and Territories in the absence of "direct inconsistency"199. Provisions of this type that militate against an implication of exclusivity might be described as "anti-exclusivity" clauses. Section 98(7) of the Civil Aviation Act provides as follows: "A law of a Territory (not being a law of the Commonwealth) does not have effect to the extent to which it is inconsistent with a provision of the regulations having effect in that Territory, but such a law shall not be taken to be inconsistent with such a provision to the extent that it is capable of operating concurrently with that provision." This sub-section is not an "anti-exclusivity" clause for four reasons. First, it is directed to the laws of a Territory, not the laws of the Commonwealth. It is concerned with the effect of inconsistent laws of a Territory. It is not concerned with whether regulations made under Commonwealth legislation are intended to exclude or limit Territory laws200. In The Commonwealth v Australian Capital Territory201, this Court said of the similar terms of s 28 of the Australian Capital Territory (Self-Government) Act 1988 (Cth): 197 Bartsch, Aviation Law in Australia, 4th ed (2013) at 465-466 [12.95]. 198 R v Credit Tribunal; Ex parte General Motors Acceptance Corporation (1977) 137 CLR 545 at 563-564; [1977] HCA 34; Palmdale-AGCI Ltd v Workers' Compensation Commission (NSW) (1977) 140 CLR 236 at 243; [1977] HCA 69; Momcilovic v The Queen (2011) 245 CLR 1 at 121 [272]. See also Momcilovic v The Queen (2011) 245 CLR 1 at 120-121 [271], referring to s 150 of the Petroleum (Submerged Lands) Act 1967 (Cth). 199 See, eg, Corporations Act 2001 (Cth), s 5E(1), (4); Personal Property Securities Act 2009 (Cth), s 254. 200 Compare Competition and Consumer Act 2010 (Cth), s 51AAA. 201 (2013) 250 CLR 441 at 466 [53]. Edelman "The text of s 28 thus makes plain that the section is directed to the effect which is to be given to an enactment of the Assembly; it is not directed to the effect which is to be given to a federal law. That is, s 28 is a constraint upon the operation of the enactment of the Territory Assembly. It does not say, and it is not to be understood as providing, that laws of the federal Parliament are to be read down or construed in a way which would permit concurrent operation of Territory enactments." (emphasis in original) Secondly, s 98(7) is an example of a provision concerning only the Territories that commonly appears in Commonwealth legislation202. The common form of such a provision, in the Northern Territory and the Australian Capital Territory, employs a post-self-government drafting technique intended to reflect the general principle of s 109 of the Constitution. The classic example of this technique is in s 28 of the Australian Capital Territory (Self-Government) Act, which is entitled "Inconsistency with other laws". That section provides that a provision of an enactment has no effect to the extent that it is inconsistent with a law in force in the Australian Capital Territory, but that "such a provision shall be taken to be consistent with such a law to the extent that it is capable of operating concurrently with that law". In other words, the Commonwealth Parliament, recognising that s 109 of the Constitution has no direct application to the Australian Capital Territory, provided a rule of inconsistency drawing upon s 109 concepts to be applied to conflicts between a Commonwealth law and a law of the Australian Capital Territory203. Thirdly, that s 98(7) should have this interpretation, creating a rule of interpretation with similar effect to s 109 of the Constitution as a response to Territorial self-government, is also supported by the history and context of the sub-section. As to history, the predecessor to the provision was s 26(5) of the Air Navigation Act. That provision was inserted by s 5 of the Air Navigation Amendment Act 1980 (Cth), after the Northern Territory was granted self-government, in order to "put the Northern Territory in the same position as the States in regard to the control of air services within the Territory's boundaries"204. The amendments also included a new s 2A, which provided that 202 See, eg, Cocos (Keeling) Islands Act 1955 (Cth), s 8A; Christmas Island Act 1958 (Cth), s 8A; Norfolk Island Act 1979 (Cth), s 18A; Antarctic Marine Living Resources Conservation Act 1981 (Cth), s 6; Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (Cth), s 7(2); Australian Capital Territory (Planning and Land Management) Act 1988 (Cth), s 11. 203 Twomey, "Inconsistency Between Commonwealth and Territory Laws" (2014) 42 Federal Law Review 421 at 438. 204 Australia, House of Representatives, Parliamentary Debates (Hansard), 20 March Edelman the Act also bound the Northern Territory, and s 26(4), which was the predecessor to s 98(6) of the Civil Aviation Act. As to context, s 98(6) is further evidence of the focus of s 98(7) upon Territory self-government, as s 98(6) provides that the preceding provisions of s 98 "have effect as if the Northern Territory were a State". if a Commonwealth provision like s 98(7) were an Fourthly, anti-exclusivity clause, that uniform Commonwealth legislation otherwise exclusively covering a subject matter in the States would not do so in the Territories. That would be a very surprising result which must militate against such an interpretation205. it would have the effect then (vi) The 1995 amendments to the Civil Aviation Act did not alter its exclusivity The Work Health Authority and the interveners placed considerable emphasis on s 28BE(5) of the Civil Aviation Act manifesting a lack of parliamentary intention for the subject matter of safety of air navigation to be exclusive. There are two fundamental points about s 28BE(5) that combine to show that the sub-section did not affect the scope of exclusivity of the regime of standards of safety in air navigation. The first is that s 28BE was not inserted into the Civil Aviation Act until 1995 by the Civil Aviation Legislation Amendment Act 1995 (Cth). The second is that s 28BE(1) is not a tortious duty. There is a vast conceptual gap between a duty that regulates safety and one that protects rights. Section 28BE(5) was therefore a precautionary clause that provided that previous laws both within and outside the exclusive regime were unaffected. The 1995 amendments included s 28BE(1), which requires the holder of an AOC to "take all reasonable steps to ensure that every activity covered by the AOC, and everything done in connection with such an activity, is done with a reasonable degree of care and diligence". The amendments also included s 28BE(4), which provides that no action lies, for damages or compensation, in respect of a contravention of the section. And they included s 28BE(5), which provides that s 28BE "does not affect any duty imposed by, or under, any other law of the Commonwealth, or of a State or Territory, or under the common law". The use of the words "does not affect" is important. Section 28BE(5) does not say that other State or Territory, Commonwealth, or common law duties are preserved. It merely says that the section does not affect them. If the duties had been excluded because they fall within the area of exclusivity then s 28BE(5) does not reinstate them. If the duties had not previously been excluded then they are not excluded by s 28BE. 205 Northern Territory v GPAO (1999) 196 CLR 553 at 581-582 [57]. Edelman Although the Work Health Authority and all the interveners on this appeal relied upon s 28BE(5) of the Civil Aviation Act, only the Commonwealth Attorney-General acknowledged the timing of its introduction in 1995, saying in oral reply that s 28BE(5) "reflects an acknowledgement" that the Civil Aviation Law did not exclusively cover the subject matter of the safety of air navigation (emphasis added). However, this submission involves the logical fallacy of assuming that which is sought to be proved. Section 28BE(5) could only confirm or acknowledge a lack of exclusivity if such a lack of exclusivity preceded the provision. The operation of s 28BE(5) must be understood in the context of the effect that it had, and was intended to have, upon the pre-existing terms of the Civil Aviation Act. Those terms had established a legislative intention to cover exhaustively the subject matter of the safety of air navigation. The Civil Aviation Legislation Amendment Act involved amendments to establish CASA as the organisation with responsibility for the safety regulation of civil aviation in Australia. The Explanatory Memorandum explained that many of the provisions in the Civil Aviation Act "remain wholly or largely unchanged because they provide appropriately for the aviation safety regulation activities which CASA will take over when it commences operations"206. The introduction of CASA could hardly be interpreted as manifesting a parliamentary intention that the regulation of safety of air navigation not be exclusive. On the contrary, as the Explanatory Memorandum said, CASA was intended the to be a body with enhanced implementation of aviation safety standards207. independence to oversee There is no need to interpret the provision in s 28BE(5) as unwinding the pre-existing exclusivity of the regime of safety of air navigation. Rather, taken as a whole, and in the context of the pre-existing exclusive subject matter of safety of air navigation in the Civil Aviation Law, sub-ss (4) and (5) of s 28BE are provisions designed to ensure that none of the pre-existing law is altered. As the Explanatory Memorandum explained, the section "makes it clear that a breach of this statutory duty does not create a new cause of action; nor does it affect any common law duty of care or any other statutory duty under which a person may be able to bring an action in negligence or other legal proceedings against the AOC holder"208. 206 Australia, Senate, Civil Aviation Legislation Amendment Bill 1995, Explanatory Memorandum at 4. 207 Australia, Senate, Civil Aviation Legislation Amendment Bill 1995, Explanatory Memorandum at 2. 208 Australia, Senate, Civil Aviation Legislation Amendment Bill 1995, Explanatory Memorandum at 26. Edelman The specific reference to negligence in the Explanatory Memorandum is telling. The pre-existing duties described by the Explanatory Memorandum as giving rise to an action for negligence that, by s 28BE(5), the duty in s 28BE(1) "does not affect" include the common law tortious duty of care and the equitable duty of care. Those duties are outside the exclusive subject matter of the safety of air navigation. By providing in s 28BE(5) that they were not affected, the sub- section confirms the continuing applicability of these existing duties. The reason s 28BE(1) does not affect those duties is that it is not analogous to a general law duty of care. It applies to regulate safety concerns including, but not limited to, those within the exclusive regime of the regulation of safety, and irrespective of whether the rights of any individual are infringed. As I explain below, this is quite different from the general law duty of care, which is concerned with the protection of individual rights. There are other examples of pre-existing duties that might fall within the general duty in s 28BE(1) but which that duty "does not affect" because those pre-existing duties were, and are, outside the exclusive regime of enforcing the standards relating to safety of air navigation either because they are concerned with individual rights or because the duties regulate only the subject matter of matters connected with air navigation. Simply by reference to hot air balloons, a number of examples given by Outback Ballooning can illustrate the breadth of these concurrent, non-excluded duties. One example is where a balloon operator operated the flight safely but carelessly allowed the balloon to land on privately held land, committing the tort of trespass. Another is where a balloon operator made careless misrepresentations or engaged in misleading or deceptive conduct in the course of selling tickets for a balloon flight. Another might be a lack of care causing injury in the course of transporting passengers to the site of departure. F. Subject matters not exclusively covered by the Civil Aviation Law Even if it were possible, it would not be necessary or appropriate to attempt to delineate and enumerate all subject matters that do not fall within the exclusive coverage of standards of safety in air navigation in the Civil Aviation Law. However, in oral argument, some subject matters were raised by the Work Health Authority and the Attorney-General of the Commonwealth in the course of submitting that Outback Ballooning's characterisation of the subject matter of the Civil Aviation Law was too broad. It is necessary to explain why those subject matters are not covered by the Civil Aviation Law, and why they do not militate against recognising the Civil Aviation Law's exclusive coverage of standards of safety of air navigation. The Civil Aviation Law operates concurrently with these other laws because they are laws on a different subject matter. The co-existence of laws on a different subject matter naturally does not detract from the exclusivity of the Civil Aviation Law on the different subject matter of standards of safety of air navigation. Edelman (i) Workplace health and safety unconnected with safety standards for air navigation The Work Health Authority relied upon the Work Health and Safety Act 2011 (Cth), and particularly the duty in s 19(2) to ensure that the health and safety of other persons is not put at risk from the conduct of the business. The Work Health Authority submitted that the existence of this workplace health and safety duty, read with s 12(9), which accepts the concurrent application to a worker or a workplace of a "corresponding WHS law" (defined in s 4 to include the WHS Act), was evidence that the Civil Aviation Law was not intended to be exclusive at least in relation to that duty. That submission misunderstands the operation of the Commonwealth Work Health and Safety Act. The contrast, and area of overlap, between the subject matter of State and Territory workplace health and safety laws, concerned with health and safety in a business, and the subject matter of the Civil Aviation Law, safety of air navigation, is addressed in detail below in Section G. It suffices here to address that issue only in the context of the Commonwealth workplace health and safety legislation. Laws concerning occupational health and safety contrast with the longstanding legislation concerning air navigation that, since 1920, has contained some undisputed core, exclusive, uniform regulation over safety. As late as 2005 there was no single national approach to occupational health and safety legislation209. It would be a curious result if the enactment of the Commonwealth Work Health and Safety Act in 2011, or the non-uniform legislation that it replaced, the Occupational Health and Safety Act 1991 (Cth), were interpreted to manifest an intention by Parliament to alter the longstanding approach to exclusivity and uniformity under the Civil Aviation Law. In order to determine whether the Work Health and Safety Act did so in 2011, the proper approach to the interpretation of the Work Health and Safety Act is to interpret it together with the Civil Aviation Law "in a way which best achieves a harmonious result"210, including a construction that would treat each as operating "within its respective field"211. 209 Australia, House of Representatives, Parliamentary Debates (Hansard), 11 August 210 Commissioner of Police (NSW) v Eaton (2013) 252 CLR 1 at 28 [78], see also at 33 [98]; [2013] HCA 2. 211 Commissioner of Police (NSW) v Eaton (2013) 252 CLR 1 at 19 [45], quoting Associated Minerals Consolidated Ltd v Wyong Shire Council [1975] AC 538 at Edelman The duty in s 19 of the Work Health and Safety Act applies, by s 8, where the workplace is an aircraft, although only to the Commonwealth or to a "public authority" established under a law of the Commonwealth or of a Territory other than the Australian Capital Territory, the Northern Territory or Norfolk Island212. Section 19 cannot be construed without regard to its context and the history of regulation of air navigation. To do so would mean that it would apply even to failures by the Commonwealth or by a public authority to take reasonable care for persons on aircraft when making safety decisions concerning flight paths or rules of the air. Every active party to this appeal disclaimed such a result, which would detract from the exclusivity in that area of the Civil Aviation Law. The proper approach to the text of the generalised duty in s 19 of the Work Health and Safety Act is for it to be construed in its context including its concern with a different subject matter from the existing exclusive regime of the safety of air navigation. There remain numerous examples where a public authority, if responsible for workplace health and safety on an aircraft, could contravene the general duty under s 19 within the general subject matter of workplace health and safety rather than the safety of air navigation. These could include situations unconnected with safety of air navigation as varied as unsafe meals provided to passengers on a flight, bullying conduct between employees on an aircraft, or the provision of health services or support to cabin crew. In a different legislative context, Canadian provincial labour laws have been held applicable in circumstances including213: (i) building airports; (ii) transporting passengers to and from airports; (iii) operating retail services for passengers at airports; (iv) operating an airport parking lot; (v) providing baggage porter services; (vi) providing maintenance services to an air traffic control training school; (vii) repairing certain objects used by airlines; (viii) providing food to airlines; and (ix) providing airline booking and ticketing functions. Although many more examples might be given of work health and safety matters that are unconnected with the specific, and pre-existing, exclusive regime of safety standards in air navigation, it suffices to say that the Work Health and Safety Act does not extend to matters directly involving standards of safety in air navigation that have long been covered by the different subject matter of the exclusive regime in the Civil Aviation Law, such as safety of the flight itself. 212 Work Health and Safety Act 2011 (Cth), ss 4 (definition of "public authority"), 213 See Bur, Law of the Constitution: The Distribution of Powers (2016) at 1594 [4.1424]. See also Construction Montcalm Inc v Minimum Wage Commission [1979] 1 SCR 754 at 770-771; Air Canada v Ontario (Liquor Control Board) [1997] 2 SCR 581 at 609-611 [72]-[74]. Edelman (ii) The general law duty of care and torts generally The rules of the law of negligence might have the effect of promoting safety, but that is not their object. A person who digs a pit knowing that another may fall into it creates a grave risk to safety. But the person infringes no-one's rights, and therefore commits no tortious act, unless someone falls in it214. A driver who grossly exceeds the speed limit may create serious risks to safety and will contravene laws designed to ensure safety, but no-one's rights are infringed, and no tort is committed, if no-one is injured and no property is damaged. The driver has not violated the rights of all those persons he or she might have injured215. Not only is a threat to safety insufficient to establish negligence, it is also unnecessary. A surgeon who fails in his or her assumed responsibility to warn an individual of a remote risk of complications from surgery can commit the tort of negligence even if no risk to safety is created by that failure216. The law of negligence, and indeed the law of torts generally, is not the judicial regulation of safety. Torts are concerned with the protection of the rights of individuals. That is why it is sometimes said that there is no negligence in the air217. A regime that is concerned with safety has a different purpose and regulates a different subject matter from one that is concerned with the violation of individual rights. The subject matter of individual rights was not part of the intended uniform regime of the Chicago Convention. Rather, it was covered by the Warsaw Convention for the Unification of Certain Rules relating to International Carriage by Air (1929) and the Montreal Convention for the Unification of Certain Rules for International Carriage by Air (1999), which were enacted, respectively, into domestic law in Australia by the Civil Aviation (Carriers' Liability) Act 1959 (Cth) complemented by uniform State legislation, and the 214 Turner v General Motors (Australia) Pty Ltd (1929) 42 CLR 352 at 364; [1929] HCA 22. 215 Nolan, "Deconstructing the Duty of Care" (2013) 129 Law Quarterly Review 559 at 216 Chappel v Hart (1998) 195 CLR 232; [1998] HCA 55; Rosenberg v Percival (2001) 205 CLR 434 at 465 [96]-[97]; [2001] HCA 18. 217 See Martin v Herzog (1920) 126 NE 814 at 816; Palsgraf v Long Island Railroad Co (1928) 162 NE 99 at 101; Chester v Waverley Corporation (1939) 62 CLR 1 at 12; [1939] HCA 25; Bourhill v Young [1943] AC 92 at 101-102, 108, 116-117; Seltsam Pty Ltd v McNeill (2006) 4 DDCR 1 at 4 [4]. See also Landon, Pollock's Law of Torts, 15th ed (1951) at 345; Stevens, Torts and Rights (2007) at 2, 95. Edelman Civil Aviation Legislation Amendment (1999 Montreal Convention and Other Measures) Act 2008 (Cth). In general terms, and without descending into the boundaries of its exclusivity, the Civil Aviation (Carriers' Liability) Act has been described as imposing liability on air carriers but exempting them from "what would otherwise have been their ordinary liability for negligence at common law"218. (iii) The general criminal law and air security In a commonly repeated example219 from Ex parte McLean220, Dixon J described an award made under a Commonwealth Act that exclusively covered the subject matter of industrial relations that are in dispute. He hypothesised that the award expressly forbade shearers from injuring sheep while shearing. His Honour then said that this duty under the award would not necessarily be inconsistent with a State criminal law that prohibited unlawfully and maliciously wounding an animal. The reason is that the purpose of the two laws, which informs the characterisation of their subject matters221, might be different. The purpose of the former might be the narrow purpose of regulating industrial disputes. But the purpose of the latter might be the maintenance of social norms of behaviour in the treatment of animals. Numerous examples can be given of criminal law proscriptions that have a different purpose from the enforcement of safety in air navigation, even though they might operate upon the same facts as those involved in the violations of Simple examples concern criminal safety standards in air navigation. proscriptions that are concerned with conduct that violates individual and social rights. Assault, false imprisonment, manslaughter, or murder on a plane can all compromise safety in the course of air navigation, but the criminal proscriptions, when they apply during the course of air navigation, do not have the purpose of facilitating the safety of air navigation. More closely related, but nevertheless upon a different subject matter from safety of air navigation, is security concerned with air travel. Although overlapping, in that both are designed to avoid injuries, the regulation of safety of 218 Povey v Qantas Airways Ltd (2005) 223 CLR 189 at 225 [109]; [2005] HCA 33. 219 R v Winneke; Ex parte Gallagher (1982) 152 CLR 211 at 218; [1982] HCA 77; Viskauskas v Niland (1983) 153 CLR 280 at 295; [1983] HCA 15. 220 (1930) 43 CLR 472 at 485-486. 221 See R v Winneke; Ex parte Gallagher (1982) 152 CLR 211 at 218-219; McWaters v Day (1989) 168 CLR 289 at 298-299; [1989] HCA 59. Edelman air navigation has been described as "quite different"222 and a "separate issue[]"223 from regulation of security. The former involves regulation to ensure safety of aircraft by requiring strict compliance with a regime of standards of conduct, even where conduct is accidental. The latter, aviation security, proscribes intentional acts that threaten the security of individuals; it is defined separately in the Civil Aviation Act as "a combination of measures and human and material resources intended to safeguard civil aviation against acts of unlawful interference"224. Havel and Sanchez have argued that "[u]nlike in the sphere of technical cooperation on aircraft safety, the international response to the contemporary threat to aviation security has lacked purposiveness"225. Aviation security issues were not contemplated at the time of the Chicago Convention in 1944226. The subsequent international response has included the Tokyo Convention on Offences and certain other Acts committed on board Aircraft (1963), the Hague Convention for the Suppression of Unlawful Seizure of Aircraft (1970), and the Montreal Convention for the Suppression of Unlawful Acts against the Safety of Civil Aviation (1971) with its Protocol227. These security conventions were implemented in Australia by the Civil Aviation (Offenders on International Aircraft) Act 1970 (Cth), the Crimes (Hijacking of Aircraft) Act 1972 (Cth) and the Crimes (Protection of Aircraft) Act 1973 (Cth)228. Together with the Crimes (Aircraft) Act 1963 (Cth), the three security Acts described above were consolidated in the Crimes (Aviation) Act 222 Dempsey, "Compliance & Enforcement in International Law: Achieving Global Uniformity in Aviation Safety" (2004) 30 North Carolina Journal of International Law and Commercial Regulation 1 at 4. 223 Bartsch, Aviation Law in Australia, 4th ed (2013) at 556 [15.95]. 224 Civil Aviation Act, s 3. 225 Havel and Sanchez, The Principles and Practice of International Aviation Law 226 Milde, International Air Law and ICAO, 2nd ed (2012) at 219; Bartsch, Aviation Law in Australia, 4th ed (2013) at 547 [15.15]. But see, now, Annex 17, adopted by the ICAO Council in 1974. 227 Australia, House of Representatives, Crimes (Aviation) Bill 1991, Explanatory Memorandum at 1. 228 Australia, House of Representatives, Crimes (Aviation) Bill 1991, Explanatory Memorandum at 1. Edelman 1991 (Cth). But unlike the provisions of the Civil Aviation Law, which create the regime of regulation of the safety of air navigation, s 50(1) of the security-related Crimes (Aviation) Act provides that the Act, ie in its entirety, "does not exclude or limit the operation of any other law of the Commonwealth, or of a State or Territory". G. The WHS Act and the subject matter of s 19(2) The WHS Act creates a wide-reaching, general regime for workplace health and safety in the Northern Territory. The focus of this appeal was upon the obligations it creates. But it is pertinent to its wide scope, and its potential to cut across the exclusive Civil Aviation Law regime of safety of air navigation, that the WHS Act also confers broad powers on persons to do things in workplaces (defined in s 8 to include an aircraft). For instance, a person who holds a WHS entry permit may enter a workplace to inquire into a suspected contravention of the WHS Act229. Inspectors may enter a workplace at any time with or without consent230 and without notice231, examine anything at a workplace232, seize evidence233, and seize a workplace or part of the workplace, or plant, a substance or a structure at the workplace, which the inspector reasonably believes is defective or hazardous to a degree likely to cause serious injury or illness or a dangerous incident to occur234. A health and safety representative has power in some circumstances to direct a worker to cease work if the representative has a reasonable concern that the worker would be exposed to a serious risk to the worker's health and safety, emanating from an immediate or imminent exposure to a hazard235. The Work Health Authority alleged various failures by Outback Ballooning to eliminate or minimise risks posed to persons in the vicinity of the balloon's inflation fan. The provision under which Outback Ballooning was charged, s 32 of the WHS Act, creates an offence where a person fails to comply with a health and safety duty and the failure exposes an individual to a risk of 229 WHS Act, s 117. 230 WHS Act, s 163. 231 WHS Act, s 164. 232 WHS Act, s 165. 233 WHS Act, s 175. 234 WHS Act, s 176. 235 WHS Act, s 85. Edelman death or serious injury or illness. The maximum penalty for a corporation is $1,500,000. The health and safety duty that the Work Health Authority alleged that Outback Ballooning breached is s 19(2) of the WHS Act. Section 19 of the WHS Act relevantly provides: "(1) A person conducting a business or undertaking must ensure, so far as is reasonably practicable, the health and safety of: (a) workers engaged, or caused to be engaged, by the person; and (b) workers whose activities in carrying out work are influenced or directed by the person; while the workers are at work in the business or undertaking. (2) A person conducting a business or undertaking must ensure, so far as is reasonably practicable, that the health and safety of other persons is not put at risk from work carried out as part of the conduct of the business or undertaking. (3) Without limiting subsections (1) and (2), a person conducting a business or undertaking must ensure, so far as is reasonably practicable: the provision and maintenance of a work environment without risks to health and safety; and the provision and maintenance of safe plant and structures; and the provision and maintenance of safe systems of work; and the safe use, handling and storage of plant, structures and substances; and the provision of adequate facilities for the welfare at work of workers the business or undertaking, including ensuring access to those facilities; and in carrying out work for the provision of any information, training, instruction or supervision that is necessary to protect all persons from risks to their health and safety arising from work carried out as part of the conduct of the business or undertaking; and Edelman that the health of workers and the conditions at the workplace are monitored for the purpose of preventing illness or injury of workers arising from the conduct of the business or undertaking." What is "reasonably practicable" in ensuring health and safety is defined in s 18: "reasonably practicable, in relation to a duty to ensure health and safety, means that which is, or was at a particular time, reasonably able to be done in relation to ensuring health and safety, taking into account and weighing up all relevant matters including: the likelihood of the hazard or the risk concerned occurring; and the degree of harm that might result from the hazard or the risk; and (c) what the person concerned knows, or ought reasonably to know, about: the hazard or the risk; and (ii) ways of eliminating or minimising the risk; and the availability and suitability of ways to eliminate or minimise the risk; and after assessing the extent of the risk and the available ways of eliminating or minimising the risk, the cost associated with available ways of eliminating or minimising the risk, including whether the cost is grossly disproportionate to the risk." Although the requirement of reasonable practicability in s 19(2) is formulated in similar terms to a standard of care in the tort of negligence236, it is a 236 See Wyong Shire Council v Shirt (1980) 146 CLR 40 at 47-48; [1980] HCA 12; Vairy v Wyong Shire Council (2005) 223 CLR 422 at 433 [27], 456 [105], 480-481 [213]; [2005] HCA 62. Edelman higher duty than the common law237. An attempt to draw elements from the common law tort is "not ... helpful"238. Section 19(2) is part of a strict liability239 duty to "ensure" a result. The offence is based upon risk, not outcome240. Hence, no individual rights need be violated before the duty is breached241. The duty is a general one concerned with regulating safety in the workplace. That general regulation is consistent with the 1972 recommendations of the committee chaired by Lord Robens242 to move away from a "haphazard mass of ill-assorted and intricate detail partly as a result of concentration upon one particular type of target". The WHS Act, and s 19 in particular, thus follows the recommended model of imposing general duties, supported by regulations and codes of practice, requiring employers to participate in the making and monitoring of arrangements for health and safety in the workplace243. As s 19(2) and other general duties in the WHS Act are designed to ensure safety, the s 19(2) duty is designed to be supplemented by regulations made by the Administrator under s 276. Detailed regulations have been proclaimed in the Work Health and Safety (National Uniform Legislation) Regulations (NT), which, amongst other things, impose a hierarchy of risk control measures for the elimination or minimisation of risks to health and safety244. The general duty in s 19 is also supplemented by codes of practice approved by the Minister under 237 Slivak v Lurgi (Australia) Pty Ltd (2001) 205 CLR 304 at 322 [51], 332 [87]; [2001] HCA 6. 238 Slivak v Lurgi (Australia) Pty Ltd (2001) 205 CLR 304 at 333 [89], citing Marshall v Gotham Co Ltd [1954] AC 360 at 373. See also Nimmo v Alexander Cowan & Sons Ltd [1968] AC 107 at 122; Dinko Tuna Farmers Pty Ltd v Markos (2007) 98 SASR 96 at 109 [42]-[43]. 239 WHS Act, s 12B. 240 Director of Public Prosecutions v Vibro-Pile (Aust) Pty Ltd (2016) 49 VR 676 at 241 Kirk v Industrial Court (NSW) (2010) 239 CLR 531 at 553 [13]; [2010] HCA 1. 242 United Kingdom, Safety and Health at Work: Report of the Committee 1970-72 (1972) Cmnd 5034 at 8 [30]. 243 United Kingdom, Safety and Health at Work: Report of the Committee 1970-72 (1972) Cmnd 5034 at 152 [459], 153 [469]-[471]. 244 Work Health and Safety (National Uniform Legislation) Regulations (NT), reg 36. Edelman s 274, which are admissible as evidence of whether or not there has been compliance with a duty under the WHS Act245. H. Section 19(2) of the WHS Act is inconsistent with the Civil Aviation Law in its application to air navigation The Attorney-General of the State of Queensland broadly, and succinctly, identified the subject matters of the Civil Aviation Law and the WHS Act as, respectively, the safety of air navigation and the safety of the conduct of a business. That characterisation is correct. So stated, there are areas where the subject matter of the safety of the conduct of a business will not intrude into the subject matter of the safety of air navigation. But where the business relevant to the WHS Act involves air navigation, and on the assumption of the parties that the WHS Act should be construed as extending to that subject matter, there will be precise co-existence of the subject matter of the regulation of safety and, therefore, inconsistency because the Civil Aviation Law exclusively covers the subject matter of safety of air navigation. When the business conducted involves air navigation, the subject matter of the WHS Act will purportedly be the safety of air navigation. No party disputed that the purpose of s 19(2) of the WHS Act was the prescription and enforcement of standards of safety. The parties were correct not to characterise the subject matter of s 19(2) of the WHS Act in any other way, such as general criminal law norms or the protection of individual rights. Section 19(2) regulates conduct in order to ensure safety, irrespective of whether any individual is affected and irrespective of the norms that underlie general criminal prohibitions. Where the workplace is an aircraft, then, to the extent that s 19(2) as a general standard of workplace safety applies to air navigation, s 19(2) is inconsistent with the specific, exclusive subject matter of the Civil Aviation Law. An illustration of that inconsistency in the particular circumstances of this appeal is discussed in the next, concluding, section of these reasons, Section I. Another illustration of the inconsistency arising due to the implied exclusivity of the Civil Aviation Law can be seen in the role of the regulator. In comparison with the general powers of the Work Health Authority and its inspectors in the Northern Territory, CASA has many specific powers, including, relevantly in the circumstances of this appeal, "for the purpose of ensuring the safety of air navigation, [to] give directions with respect to the method of loading of persons and goods (including fuel) on aircraft"246. The pilot 245 WHS Act, s 275. 246 Civil Aviation Regulations, reg 235(7). Edelman in command commits an offence of strict liability if he or she allows the aircraft to take off or land without complying with a direction given by CASA about the loading of the aircraft247. In Airlines No 1248, Windeyer J said that the "proper regulation in the interests of safety ... and the due execution by Australia of the international obligations it has accepted, may well make it desirable that the one authority should exercise sole control of all movement of aircraft in the air and of matters connected with such movement, that is to say of all matters connected with how aircraft may be used". The ultimate issue on this appeal is whether preparation for a balloon take-off, including embarkation of passengers, falls within the specific, exclusive subject matter of the Civil Aviation Law, being the prescription and enforcement of standards of safety in the conduct of air navigation. The Work Health Authority's submission that the exclusive subject matter of the Civil Aviation Law did not extend to embarkation of passengers requires a distinction to be drawn between (i) safety in air navigation while all parts of an aircraft have left the ground, and (ii) safety during boarding, take-off, landing and disembarking. The Work Health Authority was correct to insist that the subject matter of the Civil Aviation Law be limited to safety of air navigation rather than all aspects of safety generally. For instance, as Martland, Ritchie, Pigeon, Dickson, Beetz, Estey and Pratte JJ said in Construction Montcalm Inc v Minimum Wage Commission249, "the requirement that workers wear a protective helmet on all construction sites including the construction site of a new airport has everything to do with construction and with provincial safety regulations and nothing to do with aeronautics". However, the subject matter of air navigation is not limited to the events that actually occur in the air. It involves a "broad conception going far beyond what might be called 'aeronautics'"250 and extends to "all the matters preparatory to flying by air, incidental thereto or consequent thereon"251. This is consistent with the definition of "[o]perational control" in Ch 1 of Pt I of Annex 6 to the Chicago Convention as "[t]he exercise of authority over the 247 Civil Aviation Regulations, reg 235(8), (12). 248 (1964) 113 CLR 1 at 51. See also Airlines No 2 (1965) 113 CLR 54 at 151. 249 [1979] 1 SCR 754 at 771. 250 Airlines No 2 (1965) 113 CLR 54 at 136. 251 R v Burgess; Ex parte Henry (1936) 55 CLR 608 at 670; Airlines No 2 (1965) 113 CLR 54 at 160. Edelman initiation, continuation, diversion or termination of a flight in the interest of the safety of the aircraft and the regularity and efficiency of the flight". An essential matter that is preparatory to the safety of air navigation is the process of boarding the aircraft. As Taschereau and Estey JJ said in the context of considering the scope of Canadian Parliament's exclusive legislative power in Johannesson v Rural Municipality of West St Paul252, "aeronautics" "contemplates the operation of the aeroplane from the moment it leaves the earth until it again returns thereto. This, it seems, in itself makes the aerodrome, as the place of taking off and landing, an essential part of aeronautics and aerial navigation. Indeed, in any practical consideration it is impossible to separate the flying in the air from the taking off and landing on the ground and it is, therefore, wholly impractical, particularly when considering the matter of jurisdiction, to treat them as independent one from the other. ... Legislation which in pith and substance is in relation to the aerodrome is legislation in relation to the larger subject of aeronautics and is, therefore, beyond the competence of the Provincial Legislatures." Similarly, as Jackson J said in the United States Supreme Court, from "[t]he moment [an aircraft] taxis onto a runway it is caught up in an elaborate and detailed system of controls"253. In the same way, the exclusive regulation of the safety of a balloon operation includes the moment when, with the inflation fan started, passengers begin boarding the balloon. I. Conclusion Outback Ballooning has not been charged with any offence under the Civil Aviation Law. But that does not mean that no relevant provision creating a safety offence exists under the Civil Aviation Law. To the contrary, the Civil Aviation Law contains a detailed scheme of regulation of the safety of air navigation but does so by a different approach and with different consequences. For instance, the Civil Aviation Regulations required Outback Ballooning to keep an operations manual, made available for use by all members of operations personnel254, containing all information, procedures and instructions 252 [1952] 1 SCR 292 at 319. See also Quebec (Attorney General) v Lacombe [2010] 2 SCR 453 at 472 [27], 513 [135]; Quebec (Attorney General) v Canadian Owners and Pilots Association [2010] 2 SCR 536 at 551 [33]. 253 Northwest Airlines Inc v Minnesota (1944) 322 US 292 at 303. See also City of Burbank v Lockheed Air Terminal Inc (1973) 411 US 624 at 633-634. 254 Civil Aviation Regulations, reg 215(1), (6), (7). Edelman necessary to ensure the safe conduct of the flight operations255. The breach of these regulations is an offence. Failing to comply with these regulations could also put the operator in breach of the duty in s 28BD of the Civil Aviation Act, and make it liable for the commission of an offence256. Further, Outback Ballooning's operations manual that "[p]assengers, particularly children, will be kept well clear of the inflation fan whilst it is operating". A failure to comply with all instructions in the operations manual is an offence257. If that failure involves reckless operation of an aircraft then the pilot may be liable for operating the aircraft, or permitting it to be operated, recklessly258. required Apart from questions of sovereign authority over airspace, safety has been the issue most responsible for the existence and evolution of an international aviation law regime259. Since World War I, the international community has been moving towards a consistent, uniform regulation of air safety. Australia has been a central participant in that process. The circumstances of this case are just a snapshot of how, for the reasons explained above, the general provision in s 19(2) of the WHS Act could cut across the specific, exclusive regime of regulation of the safety of air navigation. The subject matter of s 19(2), include safety of workplace safety, was assumed air navigation where the workplace is an aircraft. To that extent, it is inconsistent with the detailed, specific and exclusive approach taken to the safety of air navigation in the Civil Aviation Law. litigation this The appeal should be dismissed. 255 Civil Aviation Regulations, reg 215(2). 256 Civil Aviation Act, s 29. 257 Civil Aviation Regulations, reg 215(9). 258 Civil Aviation Act, ss 20A, 29(3). 259 Havel and Sanchez, The Principles and Practice of International Aviation Law |
HIGH COURT OF AUSTRALIA STATE OF QUEENSLAND APPELLANT AND State of Queensland v Stephenson [2006] HCA 20 17 May 2006 ORDER Appeal dismissed with costs. On appeal from the Supreme Court of Queensland Representation: D O J North SC with D J Campbell SC for the appellant (instructed by Crown Solicitor for the State of Queensland) D B Fraser QC with G R Mullins for the respondent (instructed by Gilshenan & Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. HIGH COURT OF AUSTRALIA GUMMOW, KIRBY, HAYNE, HEYDON AND CRENNAN JJ AND STATE OF QUEENSLAND RESPONDENT Reeman v State of Queensland ORDER Appeal allowed with costs. Set aside the orders of the Court of Appeal of the Supreme Court of Queensland made on 17 December 2004 and, in lieu thereof, order that: the appeal to that Court be allowed; the orders made by Holmes J on 9 September 2004 be set aside and, in lieu thereof, it be ordered that the period of limitation for the action commenced by the appellant on 22 July 2002 be extended so that it expired on 22 July 2002; and the respondent pay the appellant's costs of the applications before Holmes J and of the appeal. On appeal from the Supreme Court of Queensland Representation: D B Fraser QC with G R Mullins for the appellant (instructed by Gilshenan & Luton Lawyers) D O J North SC with D J Campbell SC for the respondent (instructed by Crown Solicitor for the State of Queensland) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. HIGH COURT OF AUSTRALIA GUMMOW, KIRBY, HAYNE, HEYDON AND CRENNAN JJ STATE OF QUEENSLAND APPLICANT AND RESPONDENT State of Queensland v Wrightson ORDER Application for special leave to appeal dismissed with costs. On appeal from the Supreme Court of Queensland Representation: D O J North SC with J B Rolls for the applicant (instructed by Crown Solicitor for the State of Queensland) D B Fraser QC with G R Mullins for the respondent (instructed by Gilshenan & Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS State of Queensland v Stephenson Reeman v State of Queensland State of Queensland v Wrightson Limitation of actions β Proceedings instituted after expiry of limitation period β Application for extension of limitation period β Under s 31(2)(a) of the Limitation of Actions Act 1974 (Q) ("the Act") a court may extend a limitation period if "a material fact of a decisive character relating to the right of action" was not within the applicant's means of knowledge until a date after the commencement of the year last preceding the expiration of the limitation period ("the relevant date") β Where the Act separately defines "material fact[s] relating to a right of action" and when those material facts are of a "decisive character" β Where material fact was within each applicant's means of knowledge before the relevant date but only attained a decisive character after that date β Whether par (a) of s 31(2) of the Act was satisfied, such that the court had power to extend the limitation period in respect of each applicant. Statutory interpretation β Remedial legislation β Purposive approach β Limitation of Actions Act 1974 (Q), s 31(2)(a). Words and phrases β "material fact of a decisive character relating to the right of action". Limitation of Actions Act 1974 (Q), ss 30, 31. GUMMOW, HAYNE AND CRENNAN JJ. These appeals1 and application for special leave2 are brought from the Queensland Court of Appeal and involve common issues. These turn upon a close consideration of the text and structure of Pt 3 (ss 29-40) of the Limitation of Actions Act 1974 (Q) ("the Limitation Act"). Of the British ancestor of Pt 33, Lord Reid observed that it had a strong claim to the distinction of being the worst drafted Act on the statute book4. The three cases now before this Court in turn reflect divergences of views in the Supreme Court of Queensland, both at first instance and in the Court of Appeal, on fundamental matters of construction of the Queensland statute. The plaintiff in each proceeding is a former member of the Queensland Police Service ("the Service") who had performed duties in the investigation of drug dealing which involved him in undercover or covert activities. There were dramatic and life-threatening events and each plaintiff claims that, after return to his ordinary duties, he developed a psychiatric condition and attempted unsuccessfully to persevere with his Service career. After the end of his employment in the Service, each plaintiff sued the employer, the State of Queensland ("the State"), in negligence for damages for personal injury. The Police Service Administration Act 1990 (Q) ("the PSA Act") provided for retirement on medical grounds. It was more financially advantageous to the plaintiffs for them to retire on medical grounds rather than resign from the Service. However, the procedures for retirement on medical grounds include5 the 1 State of Queensland v Stephenson, an appeal from the decision of Davies and Williams JJA; Chesterman J dissenting [2004] QCA 483; Reeman v State of Queensland, an appeal from the decision of Williams JA and Chesterman J; Davies JA dissenting [2004] QCA 484. In Stephenson, the Court of Appeal allowed an appeal by Mr Stephenson against the dismissal of his extension of time application by McMurdo J. In Reeman, the Court of Appeal dismissed an appeal by Mr Reeman against the dismissal by Holmes J of his extension of time application. 2 State of Queensland v Wrightson, an application for special leave to appeal from the decision of McMurdo P, Williams and Jerrard JJA [2005] QCA 367. The Court of Appeal dismissed an appeal by the State against the grant by Helman J of the extension of time application by Mr Wrightson. 3 Limitation Act 1963 (UK). 4 Central Asbestos Co Ltd v Dodd [1973] AC 518 at 529. 5 PSA Act, s 8.3(3). Crennan satisfaction of the Commissioner, on the basis of medical opinion, that the officer in question should not continue to be required to perform duties as an officer and also is insufficiently fit to perform duties in alternate employment. By the time these procedures had been completed and the plaintiffs had retired on medical grounds (23 February 2001 in the case of Mr Stephenson, 10 August 2001 in the case of Mr Reeman and 9 March 2001 in the case of Mr Wrightson) more than three years had elapsed since the accrual of their causes of action. Accordingly, the time bar imposed by s 11 of the Limitation Act had operated. Section 11 of the Limitation Act is found in Pt 2 (ss 9-28). Part 2 is headed "PERIODS OF LIMITATION FOR DIFFERENT CLASSES OF ACTIONS". In respect of actions for personal injury in tort, s 11 fixes a general limitation period of three years from the date on which the cause of action arose. Each of the proceedings against the State was instituted in the Supreme Court after the expiry of the three year limitation period fixed by s 11. Proceedings were instituted on 20 December 2001 by Mr Stephenson, 22 July 2002 by Mr Reeman and 20 December 2001 by Mr Wrightson. The actions were statute-barred unless there was some additional statutory provision for relaxation of that time bar imposed by s 11. The State pleaded the time bar in each case and applied for summary judgment. Each plaintiff responded with an extension of time application under s 31 of the Limitation Act. If the extension of time were granted, this would answer the summary judgment application. Part 3 of the Limitation Act (ss 29-40) is headed "EXTENSION OF PERIODS OF LIMITATION". Section 33 states: "Where after the expiration of a period of limitation to which this Part applies, the period of limitation is extended by order under this Part, the prior expiration of the period of limitation has no effect for the purposes of this Act." Section 29 deals with extension in cases of disability, s 32 with survival of actions and s 31, upon which the present cases turn, with what is identified as "ordinary actions". Section 31(1) provides that the section applies to a range of actions for damages, including those relied upon by the plaintiffs, Messrs Stephenson, Reeman and Wrightson. The critical provision is s 31(2). It provides for the extension of the period of limitation by force of a court order. The application may be made ex parte but the court may require that notice of the application be given to other parties (s 34(1)). The State appeared and was heard on the applications by the plaintiffs. Crennan The text of s 31(2) should now be set out. It states: "Where on application to a court by a person claiming to have a right of action to which this section applies, it appears to the court β that a material fact of a decisive character relating to the right of action was not within the means of knowledge of the applicant until a date after the commencement of the year last preceding the expiration of the period of limitation for the action; and that there is evidence to establish the right of action apart from a defence founded on the expiration of a period of limitation; the court may order that the period of limitation for the action be extended so that it expires at the end of 1 year after that date and thereupon, for the purposes of the action brought by the applicant in that court, the period of limitation is extended accordingly." (emphasis added) It will be apparent that s 31(2) both creates a new subject-matter for adjudication and invests jurisdiction to determine applications made thereunder. The section thus is an example of the double function discussed in R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett6 and in later authorities concerning State legislation including James Hardie & Coy Pty Ltd v Seltsam Pty Ltd7. The jurisdictional threshold requires that the applicant claim to have a right of action to which the description in s 31(1) applies. That requirement, as has been indicated, was met by all the plaintiffs in these cases. Further, it must appear to the court that, limitation questions aside, there is evidence to establish the right of action in question. The satisfaction of that requirement also is not in dispute. The provision states that the court "may" make an order. It is accepted by the State that, if the criteria specified in s 31 otherwise are satisfied, the discretion indicated by the use of that term should be exercised in favour of the plaintiffs for extension of the time bar. The exercise of the jurisdiction created by s 31(2) operates upon the period of limitation otherwise applicable, here the three year period prescribed by (1945) 70 CLR 141. (1998) 196 CLR 53 at 64-65 [22]-[24]. Crennan s 11. The court may make an order which has the effect of altering the prescribed period so that it expires at the end of one year after a date which is ascertained in accordance with par (a) of s 31(2). On its face, s 31 authorises the obtaining of an extension before the institution of the action within the period so extended. However, s 31 may also be utilised where an action already has been instituted (s 31(3)). That was the state of affairs with which all three cases were concerned. As remarked above, in each instance, an action had been instituted out of time and an application under s 31 was made subsequently. An appreciation of the operation of the critical provision made by s 31(2) is assisted by reference to the chronology of the Stephenson litigation. During mid-1997, Mr Stephenson commenced to suffer from symptoms of increasingly severe depression and he developed a paranoid reaction to the Service. The limitation period fixed by s 11 thus expired by mid-2000. He retired on medical grounds on 23 February 2001. Thereafter, on 20 December 2001, Mr Stephenson instituted an action in the Supreme Court. The State pleaded the time bar imposed by s 11 and applied for summary judgment. In response, on 14 October 2003, Mr Stephenson made an application, under s 31 and in the action which was on foot, for an extension, as it were nunc pro tunc, of the time for the commencement of that action to 20 December 2001. If the terms of s 31(2) be read against that sequence of events in Stephenson, the following appears. The commencement of the last year preceding the expiration of the three year s 11 period was mid-1999; until a date ("the relevant date") occurring after mid-1999, a material fact of a decisive character relating to the right of action must not have been within the means of knowledge of Mr Stephenson; the court then might order an extension to expire on a date ("the expiry date") being at the end of one year after the relevant date. But, in the events that had happened, the expiry date could be no later than 20 December 2001. This was when the action had been instituted, and it was that action which Mr Stephenson sought to keep on foot, so that, in turn, "the relevant date" could be no later than 20 December 2000. Mr Stephenson thus had to show that until after 20 December 2000 a material fact of a decisive character relating to the right of action was not within his means of knowledge. This conjunction of circumstances attracted the description by the primary judge (McMurdo J) of 20 December 2000 as the "critical date". However, it is to be observed that what made 20 December 2000 of critical importance, rather than any other date after mid-1999, was the date of the institution of the action, out of time, on 20 December 2001. That narrowed the selection of the relevant date, in a fashion that would not necessarily have obtained, for example, if the extension Crennan application had been made in advance of the institution of an action, so that the action was to be commenced within the extended period8. Hence, in construing the legislation, reference will be made to the two temporal points fixed in s 31(2) as "the expiry date" and "the relevant date". The determinative issue of construction concerns the phrase in par (a) of s 31(2) "a material fact of a decisive character relating to the right of action"; it is this which "was not within the means of knowledge of the applicant" until the relevant date. Counsel for the State interprets the critical expression as involving two key conceptions. One is "a material fact ... relating to the right of action" and the other is the possession by that material fact of "a decisive character". The consequence is said to be that an applicant must fail if reliance is placed on a material fact which, although it did not assume a decisive character until after the relevant date, was within the means of knowledge of the applicant before the relevant date. On the other hand, counsel for Messrs Stephenson, Reeman and Wrightson submit that the critical phrase in par (a) of s 31(2) is a composite term which is not to be dissected in the fashion urged by the State. In that regard, counsel rely upon the reasoning of Davies JA in his judgment in Stephenson9. His Honour said: "It may be accepted that there is but one point when a fact comes within the applicant's means of knowledge. But to say that assumes that the subject of the verb 'was' or, more completely, 'was not within the means of knowledge of the applicant', in s 31(2)(a), is 'fact' or possibly 'material fact'. That assumption was expressed as an explicit proposition by Holmes J in her reasons for judgment in Reeman v State of Queensland, the appeal against which was heard together with this appeal and the judgment in which is being delivered immediately after this judgment. In that case Holmes J said: 'To succeed, Mr Reeman must be able to point to a material fact which was not within his means of knowledge at the critical date; that is to say, a material fact which came within his means of 8 The "critical date" in respect of Mr Reeman was 22 July 2001, and in respect of Mr Wrightson was 20 December 2000, their actions having been instituted on 22 July 2002 and 20 December 2001 respectively. [2004] QCA 483 at [12]-[13]. Crennan knowledge after that date; and he must be able to demonstrate its decisive character. To read s 31(2)(a) otherwise, as if what is determinative is the point at which existing material facts become decisive, is to do violence to ordinary grammar. The verb "was" (as in "was not within the means of knowledge of the applicant") must have a subject. That subject can only be a noun: in this case, "fact". Plainly it is the "material fact" which, it must be shown, "was not within the means of knowledge"; not the adjectival phrase, "of a decisive character", which describes the noun.' With great respect to her Honour I disagree. The subject of the verb 'was' in that paragraph of s 31, in my opinion, is the compound phrase 'material fact of a decisive character relating to the right of action'. Thus the question is not when all material facts came within the means of knowledge of the applicant. It is when all material facts of a decisive character relating to the right of action came within his means of knowledge." (original emphasis) Davies JA added10: "One cannot have the means of knowledge of material facts of a decisive character at a time when those material facts do not have that character. If the correct question is as I have stated it then the answer is that it was after the critical date because the material facts did not acquire a decisive character until after that date." That construction should be accepted. To what his Honour said, we would add the following. The text of par (a) of s 31(2) suggests further questions for the elaboration of its terms in at least three respects. First, what is conveyed by the expression "within the means of knowledge of the applicant"? To this, par (c) of s 30(1) is addressed11. Secondly, what is "a material fact"? Paragraph (a) of s 30(1) 10 [2004] QCA 483 at [14]. 11 Paragraph (c) states: "a fact is not within the means of knowledge of a person at a particular time if, but only if β the person does not know the fact at that time; and (ii) as far as the fact is able to be found out by the person β the person has taken all reasonable steps to find out the fact before that time". Crennan supplies content to that expression12. Thirdly, what gives to a material fact "a decisive character"? This is explained by par (b) of s 30(1)13. At what the particular applicant puts forward as the relevant date, a certain fact must not have been "within the means of knowledge of the applicant" (s 31(2)(a)). A fact is not within the means of knowledge of the applicant if ("but only if") the applicant did not know it and in so far as the fact was "able to be found out" by the applicant, the applicant had taken all reasonable steps to find it out. This reading of par (a) of s 31(2) follows from the exegesis provided in par (c) of s 30(1). The fact which is identified must answer the description in par (a) of s 31(2) "a material fact of a decisive character relating to the right of action". It is a fact of this particular quality which, until the relevant date, must not have been within the means of knowledge of the applicant. What must not have been within the means of knowledge of the applicant until the relevant date 12 Paragraph (a) states: "the material facts relating to a right of action include the following β the fact of the occurrence of negligence, trespass, nuisance or breach of duty on which the right of action is founded; (ii) the identity of the person against whom the right of action lies; (iii) the fact that the negligence, trespass, nuisance or breach of duty causes personal injury; (iv) the nature and extent of the personal injury so caused; (v) the extent to which the personal injury is caused by the negligence, trespass, nuisance or breach of duty". 13 Paragraph (b) states: "material facts relating to a right of action are of a decisive character if but only if a reasonable person knowing those facts and having taken the appropriate advice on those facts, would regard those facts as showing β that an action on the right of action would (apart from the effect of the expiration of a period of limitation) have a reasonable prospect of success and of resulting in an award of damages sufficient to justify the bringing of an action on the right of action; and (ii) that the person whose means of knowledge is in question ought in the person's own interests and taking the person's circumstances into account to bring an action on the right of action". Crennan is not merely a material fact relating to the right of action in question. The material fact must be "of a decisive character". The provision is so drawn as to assume that there may be material facts which are not of a decisive character. Awareness before the relevant date of a material fact, of itself, will be of no significance for the operation of par (a) of s 31(2). However, awareness of a material fact of a decisive character before that date will be fatal to an application to the court if that is what is relied upon to satisfy par (a). These cases turn upon neither of those circumstances. The State points to findings of the awareness by the plaintiffs of a material fact before what was the critical date (the relevant date dictated by the particular circumstances) as sufficient to disqualify the plaintiffs. It is said to be beside the point that there were also findings that the material fact had not assumed a decisive character before the critical date. The additional provisions made in s 30(1) do not assist the submission of the State. The phrase "a material fact of a decisive character relating to the right of action was not within the means of knowledge of the applicant" has elements which suggest both objectively ascertainable criteria and also a response to the existence of those criteria. The objectively ascertainable criteria include those facts and circumstances included by par (a) of s 30(1) in the expression "the material facts relating to a right of action". Paragraph (a) states that the material facts relating to the right of action "include" certain matters. These include the fact of the occurrence of the acts or omissions upon which the right of action is founded, the identity of the tortfeasor, the fact that the breach has caused personal injury, the nature and extent of the personal injury and the extent to which it was caused by the tortious act or omission. The ascription to material facts of the character of "decisive" looks to the response of an actor. It is here that the exegesis supplied by par (b) of s 30(1) comes into play. The court is to consider the response of "a reasonable person" in the manner explained in that paragraph. The particular claimant is to enjoy the advantage conferred by the provision in s 30(1) for the making of an extension order only by satisfaction of criteria which look to the response of a reasonable person. In this way, s 30(1) assists and controls an understanding of the compound conception in s 31(2). This understanding of the significance of the explanatory provisions in pars (a), (b) and (c) of s 30(1) assists rather than weakens the construction which favours Messrs Stephenson, Reeman and Wrightson. The relevant provisions of ss 30 and 31, read together, indicate what it is that, if not within the means of knowledge of the applicant until a date after the relevant date, provides the necessary step for a successful application for extension. Crennan Read in this way, s 31 addresses the injustice which would arise if a plaintiff were to be met with the immovable barrier raised by the expiration of the limitation period where the plaintiff neither would nor should have sued in time because of the lack of the means of knowledge of a material fact of a decisive character which related to the right of action. The effect of the construction urged by the State is to destroy the composite nature of the expression "a material fact of a decisive character relating to the right of action" and also to sever the temporal nexus between the material facts and the "decisive character" which they must bear. An applicant might yet be precluded from obtaining an extension of time even though a reasonable person would not and could not form the view mandated by par (b) of s 30(1) that allows material facts to be regarded as having "a decisive character". On the construction favoured by the State, par (b) of s 30(1) only assumes significance once an applicant has established that a material fact came within the means of knowledge of the applicant after the relevant date. The better view is that the means of knowledge (in the sense given by par (c) of s 30(1)) of a material fact is insufficient of itself to propel the applicant outside s 31(2)(a). For circumstances to run against the making of a successful extension application, the material fact must have "a decisive character". Whether the decisive character is achieved by the applicant becoming aware of some new material fact, or whether the circumstances develop such that facts already known acquire a decisive character, is immaterial. It is true to say, as the plaintiffs submit in their written submissions, that in a sense none of the material facts relating to the applicant's right of action is of a decisive character until a reasonable person "knowing those facts and having taken the appropriate advice on those facts, would regard those facts as showing" the features described in sub-pars (i) and (ii) of s 30(1)(b). Whether that test has been satisfied at a particular point in time is a question for the court. The practical result of this construction is that an applicant always has at least one year to commence proceedings from the time when his or her knowledge of material facts (as defined in s 30(1)(a)) coincides with the circumstance that a reasonable person with the applicant's knowledge would regard the facts as justifying and mandating that an action be brought in the applicant's own interests (as in s 30(1)(b)). If this conjunction of circumstances first occurs before the commencement of the last year of the limitation period, no application for an extension can be brought; the applicant has the benefit of at least one year before the limitation period expires and is required to act within that time. If the conjunction occurs after the commencement of that last year, the court is empowered, if the other criteria in s 31 are satisfied, to extend time for one year from the date of that conjunction of circumstances. Crennan If the question of statutory construction be resolved in this way and if it be accepted that in each case a material fact did not assume its decisive character until after the critical date, then the applications for extension should have succeeded. Upon that basis, it would be unnecessary to consider the plaintiffs' alternative submissions that a "new" material fact (and so a new relevant date) emerged after the critical date. The question then becomes whether the primary judges concluded in each case that the element that a material fact be "of a decisive character" had not been satisfied before the critical date and, if so, whether those conclusions are challenged. We turn to consider the situation in each of the three cases. McMurdo J found that "the material facts which were within the plaintiff's means of knowledge at the critical date were not, at that date, of a 'decisive character'". That finding was not challenged on appeal. (It is important to recall that, although whether or not the relevant date occurs after the critical date in general does not govern s 31(2)(a), it is vital for success on Mr Stephenson's application for the reasons explained earlier.) It follows that McMurdo J erred in refusing the application for extension of time. The Court of Appeal was correct to allow Mr Stephenson's appeal and the appeal by the State to this Court must fail. Davies JA noted the findings by McMurdo J: that by November 2000 Mr Stephenson knew that he was permanently incapacitated for police work; that the material facts relating to his right of action against the State which were within his means of knowledge would have shown to a reasonable person, having taken the appropriate advice on those facts, that an action would have a reasonable prospect of success resulting in an award of damages sufficient to justify it; and that these findings were accepted by the State. Davies JA went on to explain that it was now common ground that, because of two circumstances, the facts above described, although constituting all material facts relating to the right of action, were not of a decisive character until after the critical date. The first circumstance was that earlier commencement of the Supreme Court action would have exacerbated Mr Stephenson's psychiatric disability; the second was that earlier commencement might have put at risk his attempt to retire on medical grounds with consequent loss of $267,000 retirement benefits. Crennan Reeman In Mr Reeman's case, Holmes J found that "the material facts known to Mr Reeman were not, at the critical date, of a decisive character, in the sense that it was not then in his interests, given his circumstances, to proceed; thus he did not at the critical date have within his means of knowledge all material facts of a decisive character". This finding was not challenged on appeal. However, Holmes J had gone on to say that, while the prospect of retirement was a material fact known to Mr Reeman before the critical date, the question was whether he failed because that fact had assumed a decisive quality only after the critical date. In that respect, her Honour followed the construction of s 31(2)(a) adopted by McMurdo J in Stephenson. The majority of the Court of Appeal (Davies JA dissenting) affirmed the decision of Holmes J. In the light of the construction of s 31(2)(a) set out previously, the majority erred and the judgment of Davies JA should be preferred. Accordingly, the appeal by Mr Reeman to this Court must be allowed. In reasons for judgment delivered earlier than those of McMurdo J in Stephenson and of Holmes J in Reeman, Helman J granted the plaintiff's application. His Honour found that it was only when Mr Wrightson's application to retire on medical grounds was accepted that sub-par (ii) of s 30(1)(b) was satisfied. This finding has not been challenged. In the course of his reasons, Helman J spoke of this provision as having a purpose of providing considerations justifying delay in bringing an action. He also said: "The plaintiff's case on this application was then that it was only when his application [to accept his resignation on medical grounds] was granted that all of the requirements of a material fact of a decisive character had been satisfied. ... It means that even if a claimant could have instituted a claim earlier than the time when a reasonable person would have regarded the facts as showing that he ought to do so, it is only when the reasonable person would regard the facts as showing that he ought to do so that time begins to run under s 31(2)." (original emphasis) That analysis is consistent with the reasoning of Davies JA and should be accepted as correct. The Court of Appeal affirmed the decision of Helman J, for reasons which are more fully explored in the judgment of Heydon J. Two members of the Court Crennan (McMurdo P and Jerrard JA) may be said to have preferred the reasoning of Davies JA set out earlier in these reasons. However, the decision of McMurdo P and Williams JA turned upon the view that Mr Wrightson had shown that a new material fact of a decisive character had come within the means of his knowledge after the critical date, namely his retirement from the Service. We agree with Heydon J that this conclusion was flawed. However, on the construction of the legislation favoured in these reasons, the orders of the Court of Appeal were correct, and there is no warrant for a grant of special leave to the State. Orders In Stephenson, the appeal should be dismissed with costs. In Reeman, the appeal should be allowed with costs, and the orders of the Court of Appeal set aside. In lieu thereof it should be ordered that: (1) the appeal to that Court be allowed; (2) the orders made by Holmes J be set aside and in lieu thereof it be ordered that the period of limitation for the action commenced by the appellant on 22 July 2002 be extended so that it expired on 22 July 2002; (3) the respondent pay the appellant's costs of the applications before Holmes J and of the appeal. In Wrightson, the application for special leave to appeal should be dismissed with costs. Kirby KIRBY J. In Ditchburn v Seltsam Ltd14, I suggested that an encounter with statutory provisions similar to those under consideration in this appeal15 was liable to confuse judges and lawyers causing them to emerge "on the other side dazed, bruised and not entirely certain of their whereabouts"16. The passage of 17 years, and many more cases struggling with the meaning of the statutory language, has not removed the sense of disorientation. In a competition involving many worthy candidates, Lord Reid's prize17 remains in place. This is so although, as Rehnquist J noted in Chardon v Fumoro Solo18, "[f]ew laws stand in greater need of firmly defined, easily applied rules than does the subject of periods of limitation". This desirable goal has not been attained in Australia19. This appeal affords the latest illustration of that fact. In 1986, a law reform commission report was delivered proposing changes to the then template of Australian laws. It suggested a simplified approach to applications for extension of time for commencement of actions20. However, amendments were not enacted in Queensland applicable to these proceedings, despite judicial endorsement elsewhere of the need for reform21. The result is that, in the present cases, the Queensland courts were obliged to struggle with the complex and obscure statutory language borrowed originally from a deficient English model. 14 (1989) 17 NSWLR 697. 15 In that case the Limitation Act 1969 (NSW), ss 57 and 58. 16 (1989) 17 NSWLR 697 at 698. 17 Central Asbestos Co Ltd v Dodd [1973] AC 518 at 529. See reasons of Gummow, Hayne and Crennan JJ at [1] ("the joint reasons"). See also Do Carmo v Ford Excavations Pty Ltd (1984) 154 CLR 234 at 238 per Murphy ACJ, 250 per Deane J, 253 per Dawson J (with whom Brennan J agreed). 18 462 US 650 at 667 (1983). 19 Cf Morabito, "Statutory limitation periods and the traditional representative action procedure", (2005) 5 Oxford University Commonwealth Law Journal 113 at 137. 20 New South Wales Law Reform Commission, Limitation of Actions for Personal Injury Claims, Report No 50, (1986) at [6.24]. The original provisions were introduced in New South Wales following an earlier report of the New South Wales Law Reform Commission: Limitation of Actions, Report No 3, (1967). Cf Royal North Shore Hospital v Henderson (1986) 7 NSWLR 283 at 294-295. 21 Briggs v James Hardie & Co Pty Ltd (1989) 16 NSWLR 549 at 565. Kirby As a consequence of this history, there are unsurprising differences of judicial opinion over the meaning of the enacted preconditions to the courts' making orders22 that a period of limitation be extended to expire at a later date and thereby to lift a limitation bar that would otherwise apply against the bringing of the proceeding23. Relevant to the present proceedings, three approaches to the uncertain language of the Limitations Act have arisen in the Supreme Court of Queensland. As explained in the joint reasons24 and in the reasons of Heydon J25, the several approaches may be classified as those respectively taken by Davies JA in the Court of Appeal or by McMurdo J and Holmes J in the Supreme Court, with a variation of the latter expressed in the Supreme Court by Chesterman J26. These appeals afford this Court the opportunity of resolving these differences of interpretation. The joint reasons prefer the interpretation favoured by Davies JA27. Heydon J prefers the approach favoured by McMurdo J and Holmes J28. Heydon J finds it unnecessary in this case to resolve the variant proposed by Chesterman J29. With inevitable hesitations, I join in the joint reasons in preferring the analysis of Davies JA30. My reasons for doing so are essentially twofold. First, I consider that Davies JA's approach is more faithful to the entirety of the language of s 31. Secondly, I consider that it more accurately upholds the remedial purpose of the legislation. Attention to the language of the statute As to the reason founded in the statutory language, I agree with Davies JA's observation31 that the subject of the verb "was", appearing in 22 Limitation of Actions Act 1974 (Q), s 31(2) ("the Limitations Act"). 23 Limitations Act, s 11. 24 Joint reasons at [18]-[32]. 25 Reasons of Heydon J at [91]. 26 Reasons of Heydon J at [124]-[125]. 27 Joint reasons at [19]. 28 Reasons of Heydon J at [104]. 29 Reasons of Heydon J at [125]. 30 Stephenson v State of Queensland [2004] QCA 483 at [13]-[14]. 31 [2004] QCA 483 at [12]-[13]. See reasons of Heydon J at [95]. Kirby s 31(2)(a) of the Limitations Act, is the entire preceding compound phrase "material fact of a decisive character relating to the right of action". Once this construction is accepted, the question becomes not "when all material facts", viewed generally, came within the means of knowledge of the applicant. It is when "all material facts of a decisive character relating to the right of action" came within such means of knowledge. Although the operation of the critical paragraph is not entirely clear, the approach of Davies JA has the merit of adhering more closely to the preconditions expressed in the statute. In this, I agree with the joint reasons32. A beneficial approach to remedial provisions There is an additional consideration. It is one that Heydon J, in his reasons, disputes. His Honour33 rejects the appellants' submission that the extension of time provisions in the Limitations Act, being remedial, should be given the widest interpretation which the language will permit34. In Heydon J's reasons, his Honour states that this approach is unsupported by the authorities cited and fails to take into account the subsequent cautionary words, and analysis, of McHugh J in Brisbane South Regional Health Authority v Taylor35. In his reasons in Taylor, McHugh J correctly drew attention to the burden, and potential for injustice for defendants, that extensions of the limitation period may involve, including for a defendant otherwise entitled to regard itself as free from unsettling, expensive and much delayed claims. Thus, McHugh J said36: "To subject a defendant once again to a potential liability that has expired may often be a lesser evil than to deprive the plaintiff of the right to reinstate the lost action. This will often be the case where the plaintiff is without fault and no actual prejudice to the defendant is readily apparent. But the justice of a plaintiff's claim is seldom likely to be strong enough to warrant a court reinstating a right of action against a defendant who, by reason of delay in commencing the action, is unable to fairly defend itself or is otherwise prejudiced in fact and who is not guilty of fraud, deception or concealment in respect of the existence of the action." 32 Joint reasons at [19]. 33 Reasons of Heydon J at [97]. 34 This, as Heydon J notes, was the approach favoured in Wrightson v State of Queensland [2005] QCA 367 at [10]. 35 (1996) 186 CLR 541 at 553. 36 (1996) 186 CLR 541 at 555. Kirby These and other considerations in Taylor establish that a plaintiff who comes within the provisions of s 31(2) of the Limitations Act has no presumptive right to an order. The plaintiff must still justify the exercise of a discretion in favour of an extension order. However, such considerations do not alter the character of the extension provisions in the Limitations Act as beneficial or remedial. Nor do they resolve the differences that have arisen over the meaning of such statutory language. The provenance of the statutory provisions, their purpose and the authorities cited by the appellants all support the proposition that the provisions are beneficial and remedial and thus to be read literally so as to achieve their protective objects. Historically, they came about in response to the apparently unjust decision in England in Cartledge v E Jopling & Sons Ltd37. The House of Lords had there held that a plaintiff in a personal injury action was statute-barred, even before the existence of the action became discoverable by him by any reasonable means. The consequence of the disquiet that followed the decision in Cartledge was the establishment of the Committee on Limitation of Actions in Personal Injury, the presentation by that Committee of its report and the enactment by the United Kingdom Parliament in 1963 of reforms to the Limitations Act designed to respond to the Committee's recommendations38. Against the background of this legislative history, it cannot be doubted that the amendments, reflected in Queensland in s 31 of the Limitations Act, were intended to be remedial and, to the full extent that the enacted language permitted it, beneficial and reformatory. They were beneficial because, in the circumstances specified, they permitted plaintiffs, otherwise statute-barred, to bring proceedings. As this Court explained in Sola Optical Australia Pty Ltd v Mills39, "the broad purpose of the Act was β¦ to eliminate the injustice a prospective plaintiff might suffer by reason of the imposition of a rigid time limit within which an action was to be commenced". Other courts have also recognised the remedial character of provisions, similar to those in issue in this appeal, allowing an extension of the limitation 37 [1963] AC 758. See reasons of Heydon J at [83]; Hawkins v Clayton (1988) 165 CLR 539 at 560; Kamloops v Nielsen [1984] 2 SCR 2 at 40. 38 McGee and Scanlan, "Judicial attitudes to limitation", (2005) 24 Civil Justice Quarterly 460 at 470. 39 (1987) 163 CLR 628 at 635. See Taylor (1996) 186 CLR 541 at 565. Kirby period. Thus in Briggs, Hope JA, struggling with the meaning of the New South Wales equivalent to s 31(2)(a) of the Limitations Act40, said41: "The section is a remedial provision, designed to give relief against what otherwise might be, and has been established in many cases to be, the harshness of the operation of the general limitation provisions. It calls for a liberal construction. In Broken Hill Pty Co Ltd v Waugh42 it was held by this Court43 that this principle is to be applied to applications under s 58. Leave to re-argue this decision (which was brought to the attention of the parties after the hearing of the appeal) was neither sought nor given, although it was submitted that it was wrong." In reaching his conclusion in that case, Hope JA proceeded to apply the stated approach to the meaning of the provisions. In the same decision, a similar approach was taken by Rogers AJA44: "The starting point is the general rule that, on the elapse of the general period of limitation, a person is safe from becoming embroiled in litigation. However, the general rule may occasion gross injustice, for example, in cases where the damage or injury may not become manifest for many years after the wrongful act. Asbestosis is a very good illustration. Therefore, there is a discretion to extend the time for commencement of actions." Similar differences have arisen in England over the meaning and application of like limitation extension provisions45. It cannot be denied that competing considerations of legal policy inform the approach that judges take to the meaning and application of provisions such as s 31(2) of the Limitations Act. 40 Limitation Act 1969 (NSW), s 58(2). There are similar provisions in other State and Territory Limitation Acts: Limitation of Actions Act 1958 (Vic), s 27K; Limitation of Actions Act 1936 (SA), s 48; Limitation Act 1935 (WA), s 38A; Limitation Act 1974 (Tas), s 5(3); Limitation Act 1985 (ACT), s 36; Limitation Act (NT), s 44. 41 (1989) 16 NSWLR 549 at 554. 42 (1988) 14 NSWLR 360 at 371-372. 43 Clarke JA; Hope JA and myself concurring. 44 (1989) 16 NSWLR 549 at 564. 45 See, eg, Adams v Bracknell Forest BC [2005] 1 AC 76 at 100 per Baroness Hale of Richmond. Kirby It is important to be alert to such considerations. However, it does not assist their accurate resolution to deny that the general purpose of the contested provisions was beneficial for plaintiffs (otherwise out of time) and remedial (of the unjust outcomes that earlier limitations law had produced). Conclusions: the preferable construction When, therefore, there are alternative interpretations that may be adopted, as demonstrated in this case, it is more consistent with the reformatory purposes of s 31 in the Limitations Act to adopt the "beneficial" or "liberal" approach, to the full extent that doing so is consistent with the statutory language. The interpretation favoured by Davies JA in the Court of Appeal is more consistent with that approach. This conclusion does not mean that an applicant will necessarily secure an order for extension of the period of limitation for the action. The making of such an order is still dependent on the applicant's demonstrating that the justice of the case requires that the discretion be exercised favourably46. That is the point at which the concerns voiced by McHugh J in Taylor may be given weight to the extent that the discretion allows that to happen47. However, the considerations of statutory language and interpretative approach support the analysis of the contested provision favoured by Davies JA and preferred by the joint reasons. Orders I therefore agree in the orders proposed by the joint reasons. 46 Taylor (1996) 186 CLR 541 at 544 per Dawson J, 550 per Toohey and Gummow JJ, 556 per McHugh J, 567 my own reasons. 47 See above these reasons at [50]. HEYDON J. This judgment concerns two appeals and one application for special leave to appeal which was argued as an appeal. The three appeals, as they are henceforth described, were heard together. They are attended by a degree of factual, legal and procedural complexity which may be explained as follows. Factual background The plaintiff in the first proceeding is Peter Robert Stephenson. The plaintiff in the second proceeding is Scott Walter Reeman. The plaintiff in the third proceeding is Timothy James Wrightson. There is evidence that each plaintiff is a former police officer who had carried out undercover or covert duties investigating drug dealing; each had experienced traumatic and life threatening events, and was exposed to peril; after returning to ordinary duties, each developed a psychiatric condition; each sought medical treatment; and each attempted to persevere with his police career, but unsuccessfully. Following the termination of his employment in the Queensland Police Service ("QPS"), each sued his employer, the State of Queensland, in negligence for damages for personal injury. Each of the proceedings was instituted more than three years after the cause of action accrued. The legislation Section 11 of the Limitation of Actions Act 1974 (Q) ("the Act") provides that "an action for damages for negligence ... in which damages claimed by the plaintiff consist of or include damages in respect of personal injury ... shall not be brought after the expiration of 3 years from the date on which the cause of action arose." It followed that the claims were statute-barred. However, the Act permits this limitation period to be extended, and each plaintiff applied for it to be extended. Section 31(2) provides: "(2) Where on application to a court by a person claiming to have a right of action to which this section applies, it appears to the court β that a material fact of a decisive character relating to the right of action was not within the means of knowledge of the applicant until a date after the commencement of the year last preceding the expiration of the period of limitation for the action; and that there is evidence to establish the right of action apart from a defence founded on the expiration of a period of limitation; the court may order that the period of limitation for the action be extended so that it expires at the end of 1 year after that date and thereupon, for the purposes of the action brought by the applicant in that court, the period of limitation is extended accordingly." Various key expressions in s 31(2) are defined in s 30(1), which provides: "(1) For the purposes of this section and sections 31, 32, 33 and 34 β the material facts relating to a right of action include the following β (iii) the fact of the occurrence of negligence, trespass, nuisance or breach of duty on which the right of action is founded; the identity of the person against whom the right of action lies; the fact that the negligence, trespass, nuisance or breach of duty causes personal injury; the nature and extent of the personal injury so caused; the extent to which the personal injury is caused by the negligence, trespass, nuisance or breach of duty; (b) material facts relating to a right of action are of a decisive character if but only if a reasonable person knowing those facts and having taken the appropriate advice on those facts, would regard those facts as showing β that an action on the right of action would (apart from the effect of the expiration of a period of limitation) have a reasonable prospect of success and of resulting in an award of damages sufficient to justify the bringing of an action on the right of action; and that the person whose means of knowledge is in question ought in the person's own interests and taking the person's circumstances into account to bring an action on the right of action; a fact is not within the means of knowledge of a person at a particular time if, but only if β the person does not know the fact at that time; and as far as the fact is able to be found out by the person β the person has taken all reasonable steps to find out the fact before that time." The parties followed ordinary and conventional usage in describing the date 12 months before each set of proceedings was commenced as "the critical date". The usage arises in this way. Section 31(2) grants a limited power to the court to extend a limitation period for no more than one year. Leaving aside s 31(2)(b), it operates in two stages. The first is dealt with in s 31(2)(a). Section 31(2)(a) requires identification of a date on which a material fact comes within the plaintiff's means of knowledge. That date must occur "after the commencement of the year last preceding the expiration of the period of limitation", that is, it must occur within the last year of a three year limitation period. The tailpiece to s 31(2) provides that the limitation period may only be extended for one year after that date. It follows that the relevant date must be located within one year of proceedings being commenced: if it were earlier, the power to extend the limitation period for one year from that date would still leave the proceedings statute-barred. The issues It was common ground that there was evidence to establish the right of action of each plaintiff apart from any limitation defence; hence s 31(2)(b) was satisfied. It was also common ground that the defendant in each proceeding, the State of Queensland, would not suffer prejudice if the extensions were granted under s 31(2). And it was common ground that if s 31(2)(a) were satisfied, the discretion to extend time should be exercised in favour of each plaintiff. In other respects, too, there turned out to be common ground. Before the critical date each plaintiff had instituted or participated in processes designed to bring about his departure from the QPS. Each knew or, on taking all reasonable steps, could have found out that if that happened, a considerable loss of income would be suffered, either because of a total incapacity for work or because it would be necessary to seek work in the general labour market as a very ill man. Each knew all of the material facts described in s 30(1)(a)(i)-(v) with respect to his claim. In each case a reasonable person would have regarded those facts as showing that an action by each plaintiff had a reasonable prospect of success and of resulting in an award of damages sufficient to justify the bringing of an action, within the meaning of s 30(1)(b)(i). Each primary judge so found. However, each primary judge also found that it was not in the plaintiff's interest to bring an action before the critical date so that the material facts were not of a decisive character and s 30(1)(b)(ii) was not satisfied. These findings have not been challenged. The primary issue of law is whether, where it is established that a material fact relating to a right of action is within an applicant's means of knowledge before the critical date, but it only becomes of a decisive character after the critical date, the applicant satisfies s 31(2)(a). That issue generated considerable diversity of judicial opinion in the courts below. Mr Stephenson began proceedings on 20 December 2001. For him the critical date was thus 20 December 2000. As just indicated, McMurdo J at first instance48 found that as at the critical date s 30(1)(b)(i) was satisfied. He also found, however, that s 30(1)(b)(ii) was not satisfied, because had Mr Stephenson commenced proceedings before 20 December 2000 he would have exacerbated the mental illnesses from which he was suffering and put at risk his chance of being allowed to take a medical retirement on favourable terms, since it might cause the QPS to take a less sympathetic approach to that course. Prior to 20 December 2000, the material facts were not, therefore, of a decisive character. Mr Stephenson then advanced two arguments to bring himself within s 31(2)(a). The first was that changes in his circumstances after the critical date caused already known material facts to take on a decisive character. The changes were that his health improved, and an application to retire on medical grounds succeeded, taking effect on 23 February 2001. McMurdo J rejected this argument on the ground that it followed from s 31(2)(a) that there was only one date on which a fact entered an applicant's means of knowledge: if it did so before the critical date, s 31(2)(a) was not satisfied, even if its character changed after that date from being non-decisive to decisive. As was just noted, the correctness of this conclusion is the primary issue of law in these appeals. The second argument was that a new material fact of a decisive character had come into existence after the material date β Mr Stephenson's employment had ceased. McMurdo J rejected this argument on the ground that while the fact was a material fact relating to the cause of action, because it was relevant to Mr Stephenson's claim for economic loss, it was not of a decisive character. A fact could only have a decisive character if it satisfied both sub-pars (i) and (ii) of s 30(1)(b). While the termination of employment was relevant to the decision to sue (a s 30(1)(b)(ii) matter), it did not affect the prospect of success of the action or the recovery of sufficient damages within the meaning of s 30(1)(b)(i). 48 Stephenson v State of Queensland [2004] QSC 226. Accordingly, McMurdo J concluded that Mr Stephenson failed to establish what s 31(2)(a) required. In the Court of Appeal49, Chesterman J concluded that McMurdo J was correct to dismiss Mr Stephenson's application, but essentially on a different ground. On the other hand, Davies and Williams JJA allowed the appeal. Davies JA's reasons for judgment, in particular, developed a construction of s 31(2)(a) which has attracted later support. It led him to disagree with McMurdo J's reasons for rejecting Mr Stephenson's first argument on s 31(2)(b). He said: "the question is not when all material facts came within the means of knowledge of the applicant. It is when all material facts of a decisive character relating to the right of action came within his means of knowledge."50 Mr Reeman's case Mr Reeman instituted proceedings on 22 July 2002. For him the critical date was thus 22 July 2001. Like Mr Stephenson, before the critical date he knew facts which satisfied s 30(1)(a) and (b)(i), but not s 30(1)(b)(ii). Mr Reeman relied on three material facts of a decisive character as not being known to him until after 22 July 2001. The first was the fact that his prospects of continuing in the QPS were poor: he discovered this as a material fact in early 2001, but it did not assume a decisive character until after the critical date. The second was his retirement on 10 August 2001. The third was an improvement in his health in February 2002. The primary judge, Holmes J, held51, as McMurdo J had held in relation to Mr Stephenson, that while the prospect of not continuing in the QPS was a material fact relating to the right of action, and was known before the critical date, because s 30(1)(b)(ii) was not satisfied, that fact was not then decisive, and only became decisive after that date when his health improved. In her Honour's judgment that did not satisfy the requirements of s 31(2)(a). She concurred in McMurdo J's reasons. As to the second material fact relied on, Holmes J held that Mr Reeman's actual retirement was not a material fact of a decisive character which only entered his means of knowledge after the critical date, because he had known before that date that his career with the QPS was over. In relation to the third alleged material fact, his supposed improvement in health, her Honour held that it did not exist, and, even if it did, that it was not a material fact "relating to 49 Stephenson v State of Queensland [2004] QCA 483. 50 [2004] QCA 483 at [13]. 51 Reeman v State of Queensland [2004] QSC 285. the right of action" but, at most, a matter relevant to determining whether an existing material fact was decisive. The Court of Appeal dismissed Mr Reeman's appeal52. Chesterman J did so for the reasons he gave in Mr Stephenson's case. Williams JA agreed in substance with Holmes J. Davies JA, on the other hand, allowed the appeal, because he applied the construction of s 31(2)(a) he had propounded in Stephenson v State of Queensland, and rejected that of Holmes J. Mr Wrightson commenced proceedings on 20 December 2001. The critical date in his case was thus 20 December 2000. The primary judge, Helman J (who heard Mr Wrightson's application at a date earlier than the dates on which McMurdo J and Holmes J decided those of Mr Stephenson and Mr Reeman respectively), granted Mr Wrightson's application53. It was accepted that sub-par (i) of the definition in s 30(1)(b) of "material facts ... of a decisive character" was satisfied by 4 October 2000 when, having been told by his treating psychiatrist that he was unfit for duty, Mr Wrightson applied for retirement from the QPS. Helman J approached the question as being whether Mr Wrightson ought, in his own interests and taking his own circumstances into account, to have brought an action before 20 December 2000. In particular, should he have brought the action before 20 December 2000, or early in 2001, after being told on 22 February 2001 that his application to retire on medical grounds had been accepted with effect from 9 March 2001? Helman J held that a reasonable person would not have regarded the facts as showing that Mr Wrightson ought to have brought an action before 20 December 2000 principally because the pressure of instituting proceedings against an employer from whose employment he had not been released would have caused a further deterioration in his mental health. An appeal to the Court of Appeal by the State of Queensland failed54. Judgment was delivered after the decisions in the appeals of Mr Stephenson and Mr Reeman, and after special leave to appeal to this Court against the orders in the Court of Appeal in those cases had been granted. McMurdo P preferred the approach of Davies JA in Stephenson v State of Queensland to the approaches of McMurdo J and Chesterman J in that case, but this approach was not decisive for her Honour's reasoning. She agreed with Helman J's reasons for concluding that 52 Reeman v State of Queensland [2004] QCA 484. 53 Wrightson v State of Queensland [2004] QSC 218. 54 Wrightson v State of Queensland [2005] QCA 367. when Mr Wrightson learned that his resignation had been accepted he had learned a fact "of a decisive character". Her Honour said the fact was "material" because it went to the nature and extent of the personal injury caused to Mr Wrightson: the decision by his employer that he was medically unfit for work bore on the extent of its economic effects. Williams JA based his decision to dismiss the appeal on his reasoning in Stephenson v State of Queensland. Jerrard JA agreed with the approach of Davies JA, and with the reasons of History of the legislation In Cartledge v E Jopling & Sons Ltd55, the English Court of Appeal upheld the finding of Glyn-Jones J that a limitation period began to run against a plaintiff from the moment the defendant employer injured the plaintiff's lungs by exposing him to noxious dust and causing him to suffer from pneumoconiosis, and expired before he realised, or could have realised, that he was suffering from the disease. In response to the decision of Glyn-Jones J, the Edmund Davies Committee was appointed to report on limitation of actions in personal injury cases. The English Court of Appeal affirmed Glyn-Jones J's decision before the Committee reported, and the House of Lords dismissed an appeal after the Committee had reported56. The Edmund Davies Committee "found it necessary to propose a rather elaborate scheme"57. Its Report58, which contained no draft Bill, did not employ the key expressions used in ss 30 and 31 of the Queensland Act. Some of them are first to be found in the Limitation Act 1963 (UK) which was enacted in response to the Report. Section 1, which related to actions in negligence, nuisance or breach of duties for damages for personal injury, provided in part: "(1) Section 2 (1) of the Limitation Act 1939 (which, in the case of certain actions, imposes a time-limit of three years for bringing the action) shall not afford any defence to an action to which this section applies, in so far as the action relates to any cause of action in respect of which β the court has, whether before or after the commencement of the action, granted leave for the purposes of this section, and 55 Cartledge v E Jopling & Sons Ltd [1962] 1 QB 189. 56 Cartledge v E Jopling & Sons Ltd [1963] AC 758. 57 Cartledge v E Jopling & Sons Ltd [1963] AC 758 at 773 per Lord Reid. 58 Great Britain, Report of the Committee on Limitation of Actions in Cases of Personal Injury, (1962) Cmnd 1829. the requirements of subsection (3) of this section are fulfilled. The requirements of this subsection are fulfilled in relation to a cause of action if it is proved that the material facts relating to that cause of action were or included facts of a decisive character which were at all times outside the knowledge (actual or constructive) of the plaintiff until a date which β either was after the end of the three-year period relating to that cause of action or was not earlier than twelve months before the end of that period, and in either case, was a date not earlier than twelve months before the date on which the action was brought." Section 7(3) and (4) provided: In this Part of this Act any reference to the material facts relating to a cause of action is a reference to any one or more of the following, that is to say β the fact that personal injuries resulted from the negligence, nuisance or breach of duty constituting that cause of action; the nature or extent of the personal injuries resulting from that negligence, nuisance or breach of duty; the fact that the personal injuries so resulting were attributable to that negligence, nuisance or breach of duty, or the extent to which any of those personal injuries were so attributable. For the purposes of this Part of this Act any of the material facts relating to a cause of action shall be taken, at any particular time, to have been facts of a decisive character if they were facts which a reasonable person, knowing those facts and having obtained appropriate advice with respect to them, would have regarded at that time as determining, in relation to that cause of action, that (apart from any defence under section 2(1) of the Limitation Act 1939) an action would have a reasonable prospect of succeeding and of resulting in the award of damages sufficient to justify the bringing of the action." (emphasis added) In its first Report on the Limitation of Actions, the New South Wales Law Reform Commission proposed legislation embodying the English legislation in a modified form59. It was enacted as ss 57 and 58 of the Limitation Act 1969 (NSW). These sections correspond substantially with ss 30 and 31 of the Limitation of Actions Act 1974 (Q) which are under consideration in this appeal. In argument, and in some of the judgments leading to these appeals, the following passages from the Report of the New South Wales Law Reform Commission were referred to. The Commission wrote of the proposed provision which became s 57(1)(c)(ii) in the New South Wales Act (ie s 30(1)(b)(ii) of the "Section 57 (1) (c) (ii) is new: it requires consideration of matters peculiar to the person whose means of knowledge is in question. Cases may arise where the prospective damages are sufficient in amount to justify bringing the action but the injured person would be obliged to pay to someone else the whole or a large part of the damages so that what would be left for the injured party would not be enough to outweigh the hazards of litigation. An example is the case where the only known heads of damage are medical expenses and loss of wages for a relatively short period. If the injured person has received workers' compensation, the bringing of an action might in substance (after allowance for solicitor and client costs) result only in a benefit to the workers' compensation insurer. The injured person may, acting reasonably in his own interests, refrain from suing in such a case but he should not, we think, be deprived on that account of the possibility of getting an extension of time in case the injuries later turn out to be much more serious." "Then again, there may be personal reasons for not suing when the apparent injury is small. An injured employee may, for example, reasonably take the view that an action against his employer may jeopardize the future course of his employment to an extent which outweighs the prospective damages for the injuries at first apparent. 59 New South Wales Law Reform Commission, Report of the Law Reform Commission being the first report on the limitation of actions, Report No 3, (1967). 60 New South Wales Law Reform Commission, Report of the Law Reform Commission being the first report on the limitation of actions, Report No 3, (1967), at par 296. 61 New South Wales Law Reform Commission, Report of the Law Reform Commission being the first report on the limitation of actions, Report No 3, (1967), at par 297. Section 57 (1) (c) (ii) would allow circumstances such as these to be taken into account." In 1972, the Queensland Law Reform Commission recommended the enactment of legislation substantially equivalent to the Limitation Act 1969 (NSW), ss 57 and 5862. The Limitation of Actions Act 1974 (Q), ss 30 and 31, followed the draft which the Commission had recommended. No material changes have been made to this day63. Issues on the appeal The issues in this appeal are of two kinds. The first relates to the question whether, where it is established that a material fact is within an applicant's means of knowledge before the critical date, but it only becomes of a decisive character after the critical date, the applicant satisfies s 31(2)(a). In the courts below, McMurdo J and Holmes J were the principal advocates of the view that the applicant did not; Davies JA was the principal advocate of the view that the applicant did. The second group of issues, to be dealt with later, turn not on questions of statutory construction but on whether or not particular facts that came into existence after the critical date were material facts. Section 31(2)(a): the issues of construction Arguments of the defendant. The principal arguments advanced by the defendant were those employed by McMurdo J and Holmes J. They may be summarised as follows. There is only one point of time when a fact comes within the applicant's means of knowledge. 62 Queensland Law Reform Commission, A Report of the Law Reform Commission on a Bill to amend and consolidate the law relating to limitation of actions, Report No 14, (1972), at 6-8. 63 In Wrightson v State of Queensland [2005] QCA 367 at [42]-[43] Jerrard JA, after noting that s 58(2)(a) of the New South Wales Act refers to "any of the material facts of a decisive character", while s 31(2)(a) refers to "a material fact of a decisive character", concluded by saying that the Queensland alteration was unnecessary and that s 31(2)(a) meant the same thing as s 58(2)(a). (b) A fact of which the applicant was already aware before the critical date which was not of a decisive character at that time does not come within the applicant's means of knowledge at a subsequent point when, having regard to the applicant's then interests and circumstances, it can be said to be decisive within the meaning of sub-par (ii) of s 30(1)(b). If s 31(2)(a) had been intended to mandate a search, as a possible application of the provision, for a material fact which was within the applicant's means of knowledge before the critical date, but the decisive character of which did not arise until after the critical date, it would have had to have been worded very differently. Various authorities were relied on, the only authority of this Court being Do Carmo v Ford Excavations Pty Ltd64. Arguments for the plaintiffs' construction. The plaintiffs relied principally on the reasoning of Davies JA and other judges following his point of view: (a) The first step of the reasoning of McMurdo J and Holmes J is correct: "It may be accepted that there is but one point when a fact comes within the applicant's means of knowledge."65 (b) However, the relevant "fact" is not simply a "fact" or "material fact". The subject of the verb "was" in s 31(2)(a) is not "material fact" but "material fact of a decisive character relating to the right of action". This is the ordinary meaning of the language. That meaning is supported by the New South Wales Law Reform Commission Report66. It was submitted that this construction is supported by the "decision" in Wrightson v State of Queensland67, "[d]icta and the decision" in Royal North 64 (1984) 154 CLR 234 at 256 per Dawson J. 65 Stephenson v State of Queensland [2004] QCA 483 at [12] per Davies JA. 66 New South Wales Law Reform Commission, Report of the Law Reform Commission being the first report on the limitation of actions, Report No 3, (1967), at par 297 quoted in Stephenson v State of Queensland [2004] QCA 483 at [18] per Davies JA. 67 [2004] QSC 218. Shore Hospital v Henderson68, the "decision and reasoning" in Tiernan v Tiernan69 and "a dictum" in Broken Hill Pty Co Ltd v Waugh70. Remedial legislation? It is desirable to deal at the outset with a number of preliminary matters said to be relevant to construction. Counsel for the plaintiffs submitted that legislation permitting the extension of limitation periods should be seen as remedial legislation, to be given the widest interpretation which the language will permit71. Of the authorities cited, one did not relate to the legislation72, one did not support the submission73, and some preceded74 or did not take account of75 what McHugh J said (Dawson J concurring) in Brisbane South Regional Health Authority v Taylor76: " ... I do not see any warrant for treating provisions that provide for an extension of time for commencing an action as having a standing equal to or greater than those provisions that enact limitation periods. A limitation provision is the general rule; an extension provision is the exception to it." That is, with respect, the correct approach. Utility of the New South Wales Law Reform Commission Report. The New South Wales Law Reform Commission was not directing itself to the 68 (1986) 7 NSWLR 283. 69 [1993] QSC 110. 70 (1988) 14 NSWLR 360 at 368-369, per Clarke JA, Kirby P and Hope JA concurring. 71 In Wrightson v State of Queensland [2005] QCA 367 at [10] McMurdo P preferred this approach. 72 Bridge Shipping Pty Ltd v Grand Shipping SA (1991) 173 CLR 231 at 260-261 per McHugh J, Brennan and Deane JJ concurring. 73 Ditchburn v Seltsam Ltd (1989) 17 NSWLR 697 at 703-704, where Kirby P did not advocate the widest interpretation, but merely said it was inappropriate to give the legislation a "strict" interpretation. 74 Briggs v James Hardie & Co Pty Ltd (1989) 16 NSWLR 549. 75 Watters v Queensland Rail [2001] 1 Qd R 448 at 457 per Thomas JA, McPherson J 76 (1996) 186 CLR 541 at 553. present issue in the passages relied on by the plaintiffs. Those passages bear on the construction of s 30(1)(b)(ii) but not s 31(2)(a). In consequence, it is not surprising that the language of the Commission does not assist in resolving the present problem. The authorities: general. The same is true of the authorities relied on by either side. The factual circumstances to which the language of ss 30 and 31 is to be applied can be very diverse. There was a tendency in argument before this Court to over-emphasise, and seek to apply to the present appeals, the particular phrases which were used in past cases not concerned with the precise problems raised by the facts of these appeals and which were directed to particular features of those cases. That is an undesirable approach. Rather, it is appropriate in each individual case to apply to the specific facts of that case the words of the legislation. In particular, some of the cases cited dealt with the emergence of wholly new facts, and inquired about their materiality or decisiveness. None deals with the fact which is known and the materiality of which is clear before the relevant period, but which only becomes decisive during that period. Wrightson v State of Queensland. In Wrightson v State of Queensland, Helman J did not employ the specific reasoning which Davies JA adopted, although his conclusion is consistent with it. Royal North Shore Hospital v Henderson. In Royal North Shore Hospital v Henderson77 a material fact was discovered two months before the applicant commenced the action β namely, that the excess radiation which the applicant had received, initially causing him scarring and stiffness but much later giving him radicular myelopathy, an extremely grave disease, was the result of a lack of proper care. Any observations favourable to the plaintiffs' submissions here were dicta only, not directed to the present problem. Tiernan v Tiernan. In Tiernan v Tiernan78 a material fact was discovered less than 12 months before proceedings began: a causal relationship between the applicant's psychiatric condition and the abuse to which she had been subjected by her adoptive father. In Stephenson v State of Queensland79, Davies JA quoted some passages from Byrne J's reasons for judgment in Tiernan v Tiernan, and said that Byrne J "adopted the construction of ... s 31(2)(a) which I have adopted". However, those passages only discussed s 30(b)(ii), the equivalent to the present s 30(1)(b)(ii), and said nothing about s 31(2)(a). 77 (1986) 7 NSWLR 283 at 297 per Mahoney JA. 78 [1993] QSC 110. 79 [2004] QCA 483 at [24]. Broken Hill Pty Co Ltd v Waugh. In Broken Hill Pty Co Ltd v Waugh80 the outcome turned on: (i) the holding that less than 12 months before the proceedings began, the applicant had learned of a material fact β that he had an asbestos related lung disease; and (ii) the conclusion that his earlier suspicions about it, amounting to a perception of a possibility, were not equivalent to a material fact. Davies JA quoted a passage from Clarke JA's reasons for judgment81, but it cannot be said to support Davies JA's reasoning because it was not written with the present problem in mind. Conclusion. Like many questions of statutory construction, the question of which view is correct is finely balanced, and explanation of the reasons for a particular conclusion is not susceptible of much elaboration. The opinion of McMurdo J and Holmes J is to be preferred. The definitions to be found in ss 30(1)(a) and 30(1)(b) suggest that one key conception in s 31(2) is "material facts relating to a right of action" and another is the possession by those facts of a "decisive character". Section 30(1)(c) in turn suggests that yet another key conception in relation to what is within a person's means of knowledge as described in s 31(2)(a) is whether it is a "fact" which is not known, despite all reasonable steps having been taken to find it out. Section 30(1)(c) identifies as the crucial integer the "fact", not its character as a material fact relating to the right of action, and not its decisive character. Section 30(1)(c) suggests that the inquiry under s 31(2)(a) into the date when a material fact of a decisive character relating to the right of action is within the applicant's means of knowledge is an inquiry centring on knowledge of the fact by itself, independently of whether the fact is a material fact relating to the right of action or whether the fact is of a decisive character. That view is also supported by a comparison of the terms of pars (a), (b) and (c) of s 30(1). The "materiality" of a fact is to be judged by reference to the factors in s 30(1)(a): these are impersonal factors, not related to the perceptions of the applicant. The "decisive character" of a fact is to be judged by the criteria in s 30(1)(b): these too are impersonal, and in addition they are to be based on the assessment of a reasonable person. In contrast, the inquiries on which s 30(1)(c) turns, whether the applicant knew the fact or took all reasonable steps to find it out, are limited to the actual mental state β what did the applicant know? β and the actual behaviour β what steps did the applicant take? β of the applicant in relation to the 80 (1988) 14 NSWLR 360 per Clarke JA. 81 (1988) 14 NSWLR 360 at 368-369: see Stephenson v State of Queensland [2004] QCA 483 at [25]. existence of a fact. The inquiries on which s 30(1)(c) turns are not related to the character of the fact as one which is material to the right of action, or one which is of a decisive character. Where, as here, a material fact relating to the cause of action was known before the critical date but its decisive character was not known until after the critical date, it is awkward, to the point of being misleading and false, to speak of it as a fact which was not within the applicant's means of knowledge until after the critical date. If it is a fact which was not within the applicant's means of knowledge at the critical date, by definition it is a fact which the applicant did not know at that time, and which the applicant had taken all reasonable steps to find out before that time. Yet, where, as in the circumstances postulated, the applicant did know the fact at the critical date, the applicant's mental state is not one of a lack of knowledge of the fact, but rather a lack of appreciation of one of its characteristics. Here, for each plaintiff, the relevant fact was that for all practical purposes his career with the QPS was over in the sense that the formalities necessary to achieve that result would shortly take place. Each plaintiff knew that fact before the critical date, or should have known it if he had taken all reasonable steps. In each case that fact was a material fact relating to the right of action and in each case the courts below held or assumed that the plaintiff knew or had access to information which should reasonably have caused him to know that the end of his career with the QPS would have adverse financial effects. In each case the fact did not take on a decisive character until after the critical date. In those circumstances it cannot be said of the fact that it was a material fact of a decisive character relating to the right of action which was not within the means of knowledge of each plaintiff before the critical date: the truth is that the fact was within the means of knowledge of each plaintiff before the critical date. The plaintiffs advanced the general argument that what ss 30 and 31 required was demonstration of a reason why proceedings were not brought within the limitation period of a kind showing that an applicant was not at fault or blameworthy. For ss 30 and 31 to have achieved either that general outcome, or the more specific outcome favoured by the judges who have applied Davies JA's reasoning, it would have been necessary for quite different language to have been employed. It follows that the arguments of each plaintiff fail so far as each relies on a material fact which, though known before the critical date, was not of a decisive character until after that date. Additional material facts It is necessary to turn to the plaintiffs' contentions that there were facts not within their means of knowledge until after the critical date, being material facts which related to the right of action and which were of a decisive character. Before the respective primary judges, each plaintiff relied on the actual cessation of his employment. In addition Mr Reeman and Mr Wrightson, directly, and Mr Stephenson, indirectly, relied on an improvement in their health. Improvement in health. In all three cases there was in fact no improvement in health. In the case of Mr Stephenson, McMurdo J was not directly invited to find one and did not find one. The evidence relied on in this Court did not establish anything more than a favourable fluctuation likely to be followed by a fluctuation in the opposite direction. In the case of Mr Reeman, Holmes J found that the evidence indicated no significant recovery in health. Williams JA said, and Davies JA and Chesterman J did not disagree, that no basis had been established in the argument before the Court of Appeal for setting that finding aside. The same is true of the argument in this Court. In the case of Mr Wrightson, Helman J made no finding of an improvement in health β all he stated was that if Mr Wrightson brought his action after his retirement he would not further injure his health. The reason assigned for substituting for that finding the finding which counsel for Mr Wrightson urged in this Court is that Mr Wrightson obtained a job after leaving the QPS. That is not sufficient. Even if the evidence had established an improvement in health, that is incapable, as Holmes J said, of being a material fact relating to a right of action, as distinct from a matter relevant to determining whether a material fact relating to a right of action was of a decisive character. Termination of employment: the argument for the plaintiffs. The argument for the proposition that the retirement of each plaintiff from the QPS was a material fact of a decisive character relating to the right of action which was not within the means of knowledge of each plaintiff until it actually happened, in each case after the critical date, was put most clearly by Jerrard JA82: "Mr Wrightson's prospect of success in a claim for future economic loss considerably brightened when he was directed to retire on the ground that he was unfit for any duty within the [QPS], even of a staff nature. Before that direction was given he had a good arguable prospect of success in obtaining an award of damages sufficient to justify the bringing of an action, but he had a much more reasonable prospect of success in achieving an award of that sort once it was rendered almost impossible to challenge the claim that he had been deprived of the prospect of future service as a police officer." 82 Wrightson v State of Queensland [2005] QCA 367 at [50]. See also at [13] per Termination of employment: the crucial issue. It is true that a fact tending to increase damages significantly, while not mentioned in the five sub- pars of the definition of "material fact" in s 30(1)(a), may be a material fact taken up by the word "include". However, where a tort causing personal injury to the victim and impairing the victim's capacity for work is committed, it is necessary to remember the basis on which that element of damages compensating for that impaired capacity is calculated. Damages calculated by reference to that element, both in the period from injury to trial and in the post-trial period, are damages to compensate for that loss of capacity, not to compensate for loss of earnings simpliciter. But since damages for lost earning capacity are awardable only to the extent that the lost earning capacity has been or may be productive of financial loss, it is necessary to consider what monies could have been produced by the exercise of the former earning capacity83. Sometimes those damages are calculated by reference to the rate of earnings being paid to the victim by an employer before the injury and the rate which the victim might earn from that employer in the future. In the present circumstances it would be likely that each plaintiff would have claimed the difference between what he would have earned in the QPS had his employment not been terminated and what lesser figure he would be likely to earn in the open market otherwise than as a police officer. If, after the injury had been inflicted and developed in the period up to the critical date, it became inevitable that each plaintiff would have to leave the QPS, the precise date of departure was immaterial. The injury to capacity, which on each plaintiff's case was severe, was the same whatever the date. The facts relevant to computing the monetary sum needed to compensate the plaintiff for that injury, which on each plaintiff's case was large, were the same whatever the date. The only thing that could differ by reason of the date would be the precise amount actually recovered as damages, for the longer each plaintiff was employed by the QPS on full pay, the lower that precise amount. On each of the plaintiffs' cases, what the tort did to each plaintiff was to damage his capacity to work: it annihilated his capacity to work as a police officer, and significantly impaired his capacity to work in other respects. Each plaintiff submitted that he had suffered no economic loss until he left the QPS, but the timing of the departure was immaterial both to him and to the QPS. The earlier he went, the less he would receive in ordinary pay or sick pay, but the more he would receive in damages. The receipt of ordinary pay or sick pay merely mitigated the loss he suffered. The crucial issue, then, was whether before the critical date each plaintiff did not know, despite taking all reasonable steps to find out, a fact which he learned after that date β that his departure from the QPS was inevitable because 83 See the cases discussed in CSR Ltd v Eddy (2005) 80 ALJR 59 at 69 [30] per Gleeson CJ, Gummow and Heydon JJ; 222 ALR 1 at 10. of having been permanently incapacitated for police work. If that fact was within a plaintiff's knowledge before the critical date, it would be impossible to contend that it was a fact satisfying s 31(2)(a). In each case the fact was within the plaintiff's knowledge. Termination of employment: Mr Stephenson. At the material time, the process by which police officers left the QPS on medical grounds depended on the officer applying to retire or on the QPS serving a notice on the officer. On 26 October 2000, before the critical date of 20 December 2000, Mr Stephenson signed an application to retire on grounds of post traumatic stress syndrome, and that application was supported by a psychiatrist and three police officers. This was formally submitted that in November 2000. Mr Stephenson knew by the end of November 2000 that he was permanently incapacitated for police work. He found that from that date Mr Stephenson knew, or should have known, that he would have to leave the QPS. Those conclusions were not criticised in the Court of Appeal. Nor were they successfully attacked in this Court. Accordingly, the fact that on 16 February 2001 Mr Stephenson was advised that his application for retirement on medical grounds had been accepted and would be effective from 23 February 2001 made no difference to his prospects of success in litigation and did not satisfy s 31(2)(a). Termination of employment: Mr Reeman. Mr Reeman's critical date was 22 July 2001. On 16 August 2000, he went on sick leave. In March 2001, he told a representative of the QPS that while he was not prepared to seek retirement on medical grounds of his own accord, he would not oppose it. On 15 March 2001, the notes of his treating psychiatrist described him as "agreeable" to retirement on medical grounds. On 19 April 2001, he reported that he had started telling people he would not be returning to the police force. On 10 May 2001, the QPS wrote to him indicating that it suspected he was unfit for duty and that he was required to attend for psychiatric examination. On 6 June 2001, he signed an authority to release medical information to the QPS in that regard. On 11 July 2001, the QPS psychiatrist gave an opinion that he was permanently unfit for duty. Holmes J concluded that Mr Reeman had known for some months before his retirement on medical grounds in August 2001 that his career in the police force was at an end. Her Honour said: "... it would be an absurdity to say that the material fact β the unlikelihood of his remaining in the police force β was not known to Mr Reeman before the critical date; indeed it is conceded that it was." No judge in the Court of Appeal disagreed with the reasoning leading to that conclusion, which, with respect, is correct. Termination of employment: Mr Wrightson. On 4 October 2000, before the critical date of 20 December 2000, Mr Wrightson signed a similar application traumatic stress disorder to that which Mr Stephenson signed, and it was similarly supported. He had been diagnosed as suffering from post September 1997, and from a major depressive disorder in February 1999. He was treated with medication and psychotherapy, but contrary to expectations, he did not recover, and from late 1999 to April 2000 his condition deteriorated. From 29 April 2000 to 9 March 2001, he was on continuous sick leave as unfit for duty. His treating psychiatrist had been advising him to apply for retirement on medical grounds since mid-2000, and eventually he accepted the psychiatrist's advice that despite his eagerness to remain the QPS, it was in his best interests to retire. Helman J's acceptance of the "possibility β admittedly faint β that [Mr Wrightson] might be able to continue his police career" is negated by his Honour's findings in relation to the evidence about Mr Wrightson's health and circumstances. Helman J accepted that "a very large majority" of applications to retire on medical grounds from the QPS are successful. It does not take much knowledge of the world to understand why those which fail are made and why they fail. But whatever the reason for Mr Wrightson's application, his conduct could not, on his case, be described as that of a malingerer seeking an unmerited advantage from retirement. His departure from the QPS, while regrettable, was inevitable. It was a fact which was either known to him or could have been found out by taking reasonable steps. Accordingly, s 31(2)(a) was not satisfied Chesterman J's construction of s 30(1)(b)(ii) Chesterman J argued that s 30(1)(b)(ii) did not call for an examination of an applicant's personal circumstances beyond those affecting the economic consequences for an applicant of commencing an action. On this view it is irrelevant whether starting an action would be injurious to an applicant's health, and the reliance of all three primary judges on the risk to the health of each plaintiff of suing before the critical date would have been erroneous84. It is not necessary to decide the question whether that view is correct. There is something to be said on either side of the question. However, it has not been critically considered by the other judges. Nor was it specifically advocated in these appeals by the defendant (which did not challenge the conclusions of the three primary judges that s 30(1)(b)(ii) had not been satisfied before each critical date), or made the subject of specific argument by the plaintiffs in these appeals. In these circumstances, and in view of the reasoning adverse to the plaintiffs set out above, since it is not necessary to decide the point, it is desirable not to do so. 84 Stephenson v State of Queensland [2004] QCA 483 at [92]-[123]. Orders The following orders should be made. State of Queensland v Stephenson (B59 of 2005) The appeal be allowed with costs. The orders of the Court of Appeal be set aside and in lieu thereof it be ordered that the appeal to that Court be dismissed with costs. Reeman v State of Queensland (B60 of 2005). That the appeal be dismissed with costs. State of Queensland v Wrightson (B91 of 2005). That special leave be granted to the applicant to appeal from the whole of the judgment and order of the Court of Appeal. That the appeal be allowed with costs. That the orders of the Supreme Court and of the Court of Appeal be set aside and in lieu thereof it be ordered that : the plaintiff's application and action be dismissed and that there be judgment for the defendant in the action; the plaintiff pay the defendant's costs of the action and of the appeal to the Court of Appeal. |
HIGH COURT OF AUSTRALIA Matter No M74/2014 to M79/2014 COMMISSIONER OF STATE REVENUE APPELLANT AND LEND LEASE DEVELOPMENT PTY LTD RESPONDENT Matter No M80/2014 COMMISSIONER OF STATE REVENUE APPELLANT AND LEND LEASE IMT 2 (HP) PTY LTD RESPONDENT Matter No M81/2014 COMMISSIONER OF STATE REVENUE APPELLANT AND LEND LEASE REAL ESTATE INVESTMENTS LIMITED RESPONDENT Commissioner of State Revenue v Lend Lease Development Pty Ltd Commissioner of State Revenue v Lend Lease IMT 2 (HP) Pty Ltd Commissioner of State Revenue v Lend Lease Real Estate Investments Limited [2014] HCA 51 10 December 2014 M74/2014 to M79/2014, M80/2014 & M81/2014 ORDER In Matter Nos M74-M77/2014, M79/2014 and M80/2014 Appeal allowed with costs. Set aside the order of the Court of Appeal of the Supreme Court of Victoria made on 15 August 2013 and, in its place, order that the appeal be dismissed with costs. In Matter Nos M78/2014 and M81/2014 Appeal allowed with costs. Set aside the order of the Court of Appeal of the Supreme Court of Victoria made on 15 August 2013 and, in its place, order that: the appeal be allowed in part; the assessment be remitted to the Commissioner of State Revenue to reassess the duty by excluding the amount described as referable to "Grand Plaza Retention Amount", and otherwise in accordance with the reasons of this Court; and the appeal be otherwise dismissed with costs. On appeal from the Supreme Court of Victoria Representation P H Solomon QC with C G Button and D C Morgan for the appellant in all matters (instructed by Solicitor for the Commissioner of State Revenue) N J Young QC with C J Horan for the respondents (instructed by Herbert Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Commissioner of State Revenue v Lend Lease Development Pty Ltd Commissioner of State Revenue v Lend Lease IMT 2 (HP) Pty Ltd Commissioner of State Revenue v Lend Lease Real Estate Investments Limited Stamp duty β Duties Act 2000 (Vic) charged duty on dutiable value of dutiable property that is subject of dutiable transaction β Section 20 provided that dutiable value was greater of "consideration ... for the dutiable transaction" and unencumbered value of dutiable property β Land transfers part of larger, single, integrated and indivisible transaction β Whether "consideration ... for the dutiable transaction" included amounts payable under larger transaction. Words and phrases β "consideration for", "dutiable transaction", "single, integrated and indivisible transaction". Duties Act 2000 (Vic), ss 20, 261. FRENCH CJ, HAYNE, KIEFEL, BELL AND KEANE JJ. Chapter 2 of the Duties Act 2000 (Vic) ("the Duties Act") charges1 duty on certain transactions. One form of dutiable transaction2 is a transfer of dutiable property3. Dutiable property includes4 an estate in fee simple in land in Victoria. Liability for duty arises5 when a dutiable transaction occurs. Duty is charged6 on the dutiable value of the dutiable property. Section 20(1) of the Duties Act provides that the dutiable value of dutiable property that is the subject of a dutiable transaction is the greater of: the consideration (if any) for the dutiable transaction (being the amount of a monetary consideration or the value of a non-monetary consideration); and the unencumbered value of the dutiable property". Between October 2006 and June 2010, the Victorian Urban Development Authority ("VicUrban") transferred to one or other of the respondents (together "Lend Lease") an estate in fee simple in seven parcels of land in the Docklands area of Melbourne. It is sufficient to refer in these reasons to "Lend Lease" without distinguishing between the several respondents. Doing that will simplify the description of transactions and events. The Commissioner of State Revenue ("the Commissioner") assessed duty to be charged on each transfer by reference to the amount the Commissioner determined to be the consideration for the dutiable transaction. Lend Lease objected to the assessments. The Commissioner disallowed the objections. Lend s 7(1)(a). s 10(1)(a)(i). Hayne Bell Lease requested7 the Commissioner to treat the objections as appeals to the Supreme Court of Victoria. At first instance, the primary judge (Pagone J) dismissed8 the appeals. Lend Lease appealed to the Court of Appeal of the Supreme Court of Victoria. That Court (Warren CJ, Tate JA and Kyrou AJA) allowed9 each appeal. By special leave, the Commissioner appeals to this Court. The appeals to this Court should be allowed. The central issue in this Court, as it was before the primary judge and in the Court of Appeal, is what is the consideration (being the amount of a monetary consideration or the value of a non-monetary consideration) for each of the dutiable transactions. To explain that issue further it is necessary to begin in the agreements between Lend Lease and VicUrban which lie behind the relevant dutiable transactions. Development agreements VicUrban is successor10 to the Docklands Authority, an authority established by the Docklands Authority Act 1991 (Vic) to promote, encourage and facilitate development of the Docklands area of Melbourne11. In 2001, VicUrban (then called the Docklands Authority) and Lend Lease made a development agreement ("the 2001 DA"). The 2001 DA was varied and 7 Taxation Administration Act 1997 (Vic), s 106. 8 Lend Lease Development Pty Ltd v Commissioner of State Revenue (Vic) 2012 ATC ΒΆ20-311; (2012) 87 ATR 504. 9 Lend Lease Development Pty Ltd v Commissioner of State Revenue (Vic) 2013 ATC ΒΆ20-410. 10 Victorian Urban Development Authority Act 2003 (Vic), s 81. This Act was later amended by the Victorian Urban Development Authority Amendment (Urban Renewal Authority Victoria) Act 2011 (Vic), changing its title to Urban Renewal Authority Victoria Act 2003 and establishing Urban Renewal Authority Victoria as successor to VicUrban. Nothing turns on these amendments. It is convenient to refer to the relevant authority as "VicUrban". 11 Docklands Authority Act 1991 (Vic), s 9(1). Hayne Bell restated in 2006 and 2008 and, in some respects, supplemented by further agreements. It will be necessary to refer to some aspects of the 2001 DA as later varied and supplemented but the issues which arise in the appeals, and their resolution, can be sufficiently explained by reference to the 2001 DA. A recital to the 2001 DA recorded that Lend Lease had submitted a bid proposal to VicUrban for the development of what the agreement referred to as the "Land". The Land was defined as the whole or any part of the land contained in a specified certificate of title and known as Victoria Harbour Precinct, Docklands Area. It included part of an area on which there had been a gasworks. The development to be undertaken was large and complicated. In the Commissioner's written submissions in this Court, the 2001 DA was described as providing "for an interlocking set of rights and obligations by which the Victoria Harbour Precinct of the Docklands was to be transformed from a polluted, disused industrial area, cut off from the Melbourne CBD to an area in which people would live, find recreation and work" (footnote omitted). Lend Lease agreed to buy the Land from VicUrban and design, construct and sell large residential and commercial buildings. VicUrban was to share in the gross revenue Lend Lease would receive from sale of the residences, offices and other parts of the buildings which Lend Lease was to design and construct. The 2001 DA required VicUrban to bring the whole of the land on which the gasworks had operated to a state in which it could be used for parkland and open space as well as for high density residential and commercial use. (It will be recalled that the Land the subject of the 2001 DA included only part of the gasworks site.) The 2001 DA obliged Lend Lease to spend set amounts of money on works of art which were to be installed in public spaces. The agreement further obliged each of VicUrban and Lend Lease to build various forms of infrastructure for the development, including a major road extension, a bridge, a park and other public areas. Some of the infrastructure was to be on the Land (as defined); some was not. Given the size and complexity of the proposed development, it is unsurprising that the 2001 DA provided for the development to proceed by stages. The 2001 DA identified 35 "Stages". The number and names of those Stages were later varied but those details do not presently matter. The 2001 DA set out a table of the "Base Amounts" for each Stage on "Stage Release", the time when Lend Lease took title to the Stage. Those amounts were subject to escalation and adjustment but for present purposes it is enough to record that the total of the Base Amounts to be paid by Lend Lease to VicUrban in respect of the (then) 35 Stages was $100.3 million. The total was made up of three separate Hayne Bell "Stage Land Payment", "Minimum External elements: Infrastructure Contribution" and "Minimum Gasworks Site Remediation Contribution". The table in the 2001 DA which set out the Base Amounts that Lend Lease was to pay VicUrban also set out the "Projected Gross Revenue on Sale" by Lend Lease of the developed Stages. The Projected Gross Revenue on Sale was more than $1,811.7 million. A recital to the 2001 DA recorded that VicUrban had agreed to sell to Lend Lease "the Land on the terms and conditions contained in the Land Sale Contract and this Agreement". (It will be recalled that the "Land" was defined, in effect, as the whole of the land known as the Victoria Harbour Precinct or any part of it.) "Land Sale Contract" was defined as "any contract of sale between [VicUrban] and [Lend Lease] for a Stage, or the Land, substantially in the form" of a contract set out in a schedule to the 2001 DA. Subject to a qualification that is not relevant, cl 4.1 of the 2001 DA obliged VicUrban and Lend Lease to "enter into and settle a Land Sale Contract for the purchase by [Lend Lease] of each Stage for the Stage Land Payment on or before the Stage Release Date for that Stage". The "Stage Release Date" for a Stage was defined as the date specified in a "Staging Plan" as the date for release of a Stage. A Staging Plan was a plan, acceptable to VicUrban, "detailing the physical and geographical evolution" of the project from its commencement to its practical completion. The "Stage Land Payment" was defined as Lend Lease's "contribution for each Stage" as specified in the table of payments already mentioned. Clause 4.7 of the 2001 DA obliged Lend Lease to make certain payments to VicUrban. Payments were to be made by reference to four different times. The first payments were due on or before what the agreement called the "Actual Stage Release Date": the date Lend Lease took title to a Stage. The second payments were due on or before the "Initial Reconciliation Date": the date 28 days after first receipt of the total of all money and the market value of all non-monetary consideration received in respect of the sale or other dealing with a Stage. The third payments were due after the Initial Reconciliation Date and were to be made on or about 30 June and 31 December for two years after "Stage Practical Completion". The final payments were due two years after Stage Practical Completion. The first payments to be made by Lend Lease (on or before it took title to a Stage) had five components: the Stage Land Payment, the Minimum External Infrastructure Contribution, the Minimum Gasworks Site Remediation Contribution, the "Stage Integrated Public Art Contribution" and any other Hayne Bell amounts due and payable by Lend Lease to VicUrban under the agreement. Leaving aside the last of these components, each of the other amounts was fixed by the agreement. The two "Minimum" payments were described as being "on account" of "project contributions": in the one case the "Project External Infrastructure Contribution" and in the other, the "Project Gasworks Site Remediation Contribution". Each of those items was defined as Lend Lease's "contribution" to the cost, in the first case, of "External Infrastructure" (being infrastructure that would deliver specified services, transport connections and utilities) and in the other, of remediation of the gasworks site. The 2001 DA fixed the maximum amount of Lend Lease's contributions (subject to variation and escalation) as $23.6 million and $27 million respectively. The Stage Integrated Public Art Contribution was fixed as a percentage of the "Stage Development Cost", which, in effect, was the estimated total cost of design and construction of the work necessary to bring the Stage to practical completion. The several payments that were to be made after Lend Lease took title to the Stage (that is, after the Actual Stage Release Date) were payments which, together with the payments already made by Lend Lease to VicUrban, took the Stage Land Payment to an amount equal to 2.74 per cent of the "Actual Gross Proceeds of Sale" of the Stage, took the Minimum External Infrastructure Contribution to an amount equal to 1.35 per cent of the Actual Gross Proceeds of Sale, and took the Minimum Gasworks Site Remediation Contribution to an amount equal to 1.55 per cent of the Actual Gross Proceeds of Sale. As already noted, the contribution amounts for External Infrastructure and Gasworks Site Remediation were capped. The statutory question The appeals to this Court turn on one statutory question posed by s 20(1)(a) of the Duties Act: what was "the consideration ... for the dutiable transaction (being the amount of a monetary consideration or the value of a non-monetary consideration)"? Although some reference was made in argument to the second limb of the definition of "dutiable value" ("the unencumbered value of the dutiable property"), it was not disputed that the relevant statutory question is the question that has been identified. Nor was it disputed that "the Hayne Bell consideration ... for the dutiable transaction" is "the money or value passing which moves the conveyance or transfer"12. The central difference It is useful to attempt to identify the central point of difference between the parties. Although the 2001 DA was later varied and supplemented in ways which bear upon the particular assessments which are in issue, what has been said about the 2001 DA is sufficient to identify that point. Lend Lease submitted that the only amount properly brought to duty as consideration for transfer of the Land was in each case the amount of the Stage Land Payment. (It will be recalled that cl 4.1 of the 2001 DA required the parties to enter into and settle a Land Sale Contract "for the purchase ... of each Stage for the Stage Land Payment" (emphasis added). The amended agreements of 2006 and 2008 did not alter this provision.) The Commissioner submitted that the consideration for the transfer of the Land was in each case more than the Stage Land Payment stated in the relevant Land Sale Contract. The Commissioner submitted that the consideration for the transfer was the total of the several sums which cl 4.7 of the 2001 DA obliged Lend Lease to pay to VicUrban or, in cases governed by that agreement as varied or supplemented, the equivalent amounts. The payments required by cl 4.7 of the 2001 DA have been described earlier in these reasons. The Court of Appeal The reasons of the Court of Appeal were given by Tate JA. Her Honour made extensive reference to a number of decisions of this Court and other courts about the application of instruments based stamp duty legislation. Particular emphasis was given to the decision of the Full Court of the Supreme Court of New South Wales in Bambro (No 2) Pty Ltd v Commissioner of Stamp Duties13. 12 Archibald Howie Pty Ltd v Commissioner of Stamp Duties (NSW) (1948) 77 CLR 143 at 152 per Dixon J; [1948] HCA 28; Commissioner of State Revenue (NSW) v Dick Smith Electronics Holdings Pty Ltd (2005) 221 CLR 496 at 518 [71] per Gummow, Kirby and Hayne JJ; [2005] HCA 3. 13 (1963) 63 SR (NSW) 522. Hayne Bell It is desirable to approach the reasoning adopted by the Court of Appeal in the present cases by first examining what was decided in Bambro. The decision turned upon the proper construction and application of legislation imposing duties on instruments. Hence, whether the instrument contained or related to several distinct "matters"14 was at the forefront of consideration. The instrument in issue in Bambro provided for the vendor of land to transfer the land to the purchaser and for the vendor then to build a shopping centre on the land. Separate prices were agreed for the transfer and for the building works. The Full Court held15 that the agreement to transfer and the agreement to build were separate "matters" and that ad valorem duty (chargeable on the amount or value of the consideration for the sale of property) was to be charged by reference only to the price for the land, not the total of the price for the land and the price for the building works. The obligation to build the shopping centre was held to be a separate matter bearing duty, but only at the fixed amount due on "an agreement ... not otherwise specifically charged with any duty". It will be observed that, in the present cases, the parties stood in a relationship different from that considered in Bambro. Here, it was the purchaser of the land (Lend Lease), not the vendor (VicUrban), which was to undertake the bulk of the development work to be carried out on the land being transferred. And, after that work was finished, and the resulting premises were sold, Lend Lease was bound to pay VicUrban amounts calculated by reference to the gross revenue received on its sale of what was built. Further, the particular transfers in issue took their place in a larger series of transactions regulated by the 2001 DA (or that agreement as later varied and supplemented). The rights and obligations of both Lend Lease and VicUrban under the 2001 DA (and the subsequent agreements) were interconnected in many more ways than their having been negotiated at the one time and recorded in the one document. The Court of Appeal's reasoning proceeded in the following steps. 14 Stamp Duties Act 1920 (NSW), s 17(1). 15 (1963) 63 SR (NSW) 522 at 529. Hayne Bell First, Tate JA said that it is important to keep in mind the nature of the interest16 in land which is transferred and the condition17 of the dutiable property at the time of transfer. Second, her Honour described18 what Lend Lease had submitted were ten errors made by the primary judge. These errors were said19 to stem from a "failure to adopt the correct conception of the complex arrangement between the parties and its distinct parts" (emphasis added). Having recorded20 the Commissioner's arguments, Tate JA returned to the nature and condition of the dutiable property and emphasised21 that the Land which was transferred was undeveloped land. The primary judge's conclusion was said22 to have treated the Land, at the time of its transfer, as having been developed. Or, as Tate JA said23 of all of the payments other than the Stage Land Payment: "By taking into account the totality of [those other] payments, regardless of when the works were performed and regardless of any connection between the works and the land other than general 'enhancement' of the Precinct, the [primary] judge looked to the enhanced value the land was to achieve by reason of the development as though the development was complete and the enhanced value had been realised." (footnote omitted) 16 Lend Lease Development Pty Ltd v Commissioner of State Revenue (Vic) 2013 ATC ΒΆ20-410 at 15,351 [135], referring to Commissioner of State Revenue (Vict) v Pioneer Concrete (Vic) Pty Ltd (2002) 209 CLR 651 at 664 [38]; [2002] HCA 43. 17 2013 ATC ΒΆ20-410 at 15,354 [148], referring to Bambro (1963) 63 SR (NSW) 522. 18 2013 ATC ΒΆ20-410 at 15,363-15,366 [174]-[189]. 19 2013 ATC ΒΆ20-410 at 15,363 [174]. 20 2013 ATC ΒΆ20-410 at 15,366-15,371 [190]-[201]. 21 2013 ATC ΒΆ20-410 at 15,372 [208], 15,372-15,373 [211], 15,373-15,374 [216]-[217], again referring to Bambro (1963) 63 SR (NSW) 522. 22 2013 ATC ΒΆ20-410 at 15,372 [208]. 23 2013 ATC ΒΆ20-410 at 15,373 [211]. Hayne Bell These first two steps in reasoning were said to follow from principles derived from Bambro. In particular, Tate JA said24 that: "An agreement to purchase land and to engage in construction on that land does not entail that duty ought [to] be assessed on the land as improved, even where there is but one transaction and one bargain, the whole object of which is for the purchaser to acquire the development on the site". Rather, her Honour continued25, "[t]he single, integrated and indivisible character of a transaction does not preclude the transaction from containing or relating to several distinct 'matters' only one of which may attract duty" (emphasis added). "[T]he focus must be on that which is to be transferred or vested or accrued by force of the conveyance β what is the value of the consideration for its sale"26. The steps which have been described lay at the heart of the reasoning of the Court of Appeal. That is, it was said to be necessary to recognise that the land being transferred was undeveloped. And it was said to be both possible and necessary in these cases to divide a "single, integrated and indivisible" transaction into separate matters. The balance of the reasons of the Court of Appeal was largely directed to demonstrating that matters said to have been taken into account by the primary judge did not support the conclusion that the consideration for the transfers of Land included any sum other than the Stage Land Payment stated in the relevant contract of sale. Tate JA rejected27 what she held to be undue weight given by the primary judge to the interdependence of the obligations assumed by the parties under the 2001 DA and the Land Sale Contracts. There was said28 to be: 24 2013 ATC ΒΆ20-410 at 15,354 [145(1)]. 25 2013 ATC ΒΆ20-410 at 15,354 [145(2)]. 26 2013 ATC ΒΆ20-410 at 15,354 [145(7)]. 27 2013 ATC ΒΆ20-410 at 15,375-15,377 [222]-[231]. 28 2013 ATC ΒΆ20-410 at 15,376 [226]. Hayne Bell "a failure [by the primary judge] to appreciate that an interdependence of mutual promises is not sufficient to determine whether a payment was made 'for' a dutiable transaction; that the single, integrated and indivisible character of a transaction is not decisive and does not preclude the transaction from containing or relating to several distinct matters only one of which may attract duty; and that an agreement to purchase land to engage in construction does not entail that the duty ought to be assessed on the land as part of the development even where there is but one transaction and but one bargain, the whole object of which is for the purchaser to acquire the development". But neither in this passage, nor elsewhere in the reasons, was any criterion stated by which the obligations undertaken in a "single, integrated and indivisible" transaction were to be divided or by which it might be determined which promises were properly to be treated as consideration moving the transfer by VicUrban to Lend Lease. Nor was it explained what was meant by saying that the primary judge gave undue weight to the interdependence of the relevant obligations. Next, Tate JA held29 that consideration "for" the transfers cannot be identified by applying a "but for" test of causation and that whether payments were made, or were to be made, before or after transfer was30 not decisive of whether the payment was a part of the consideration for the transfer. Lastly, the executory promises (for Lend Lease to pay VicUrban, after transfer, amounts calculated by reference to gross revenue received) were said31 to be not consideration for the transfer but rather payments made "as part of the interchange of rights and obligations that constituted the development [to] enhance the realisable profit on the sale of the development". On these bases, Tate JA concluded32 that the consideration for each transfer of Land was the Stage Land Payment specified in the relevant Land Sale 29 2013 ATC ΒΆ20-410 at 15,377-15,378 [232]-[235]. 30 2013 ATC ΒΆ20-410 at 15,378 [238]. 31 2013 ATC ΒΆ20-410 at 15,380 [248]. 32 2013 ATC ΒΆ20-410 at 15,382 [258]. Hayne Bell Contract. Her Honour found33 that the primary judge "was wrong in failing to recognise that the contribution payments were for matters that were separate and distinct from the transfer of the land" and that each of the payments other than the Stage Land Payment "was 'for' something other than the transfer of the land". Lend Lease's argument Lend Lease's argument in this Court followed a substantially similar path to the reasoning of the Court of Appeal and began by emphasising that the Land which was transferred was undeveloped land when it was transferred. Lend Lease accepted that the statutory question could not be answered by looking only at the Land Sale Contracts and that regard must also be had to the overarching agreement pursuant to which each Land Sale Contract was made: the 2001 DA or that agreement as varied and restated in 2006 or 2008. Lend Lease submitted that the 2001 DA (and that agreement as varied and supplemented) contained "multiple interrelated obligations dealing not only with the sale and transfer of the Land to the Developer, but also with the ongoing development and ultimate realisation of the Land as part of the wider Docklands area". Because the agreement thus provided for "multiple exchanges of value", it was necessary, so the argument continued, to identify the "nature and purpose" of the several payments for which the agreement provided. And, so the argument concluded, only the Stage Land Payment was consideration moving the transfer of the relevant Land, which, at the time of imposition of the duty, was undeveloped land. All other payments were in the nature of, and had as their purpose, payment for development work (much of which was to be done on land other than the transferred Land) or payment of a share of revenue from the sale of the developed Land resulting from the execution of what was a joint development project between Lend Lease and VicUrban. Lend Lease's argument about dividing its payments proceeded from two premises. One was particular to the circumstances of these cases; the other was a general legal proposition. The particular premise was that the rights and obligations created by the 2001 DA (and the later agreements) can, and should, be divided between those relating to the transfers of Land and those relating to other subjects variously described as (among other things) "other investments made by [VicUrban]", "profit sharing between joint developers", "authority to 33 2013 ATC ΒΆ20-410 at 15,382 [258]. Hayne Bell engage in developmental works" and "development works". The general legal premise on which the particular premise depended was that in identifying the consideration for the transfers in these cases it is necessary (or at least relevant) to ask whether the relevant agreements contained or related to several distinct matters or transactions. The general premise Acts providing for stamp duties on instruments have long made provision34 that an instrument containing or relating to several distinct matters is to be separately and distinctly charged, as if it were a separate instrument, with duty in respect of each of the matters. For the most part, the Duties Act imposes duty on transactions rather than instruments, but it does contain some residual provisions which are instruments based. That being so, it is unsurprising that s 261 of the Duties Act provides that: "An instrument that contains, gives effect to, or relates to, two or more distinct matters or transactions is to be separately and distinctly charged with duty in respect of each such matter or transaction, as if each matter was expressed in a separate instrument." The Court of Appeal assumed that principles which it derived from Bambro were to be applied in the present cases. As already explained, one of those principles was that it was necessary to determine whether the 2001 DA (and that agreement as later varied and supplemented) contained or gave effect to two or more distinct matters35. But Bambro turned on the application of the relevant provisions of the Stamp Duties Act 1920 (NSW), an Act which provided for the charging of duty on instruments, not transactions. And the Court of Appeal did not examine whether, or how, s 261 of the Duties Act would apply when the Commissioner was required (as in these cases) to assess the duty to be charged in respect of a dutiable transaction, as distinct from a dutiable instrument. In these cases, however, there is little, if anything, to be gained by deciding whether there was more than one "matter" or "transaction". A conclusion that there was more than one "matter" or "transaction" is no more than 34 See, for example, Stamp Act 1891 (UK), s 4; Stamp Duties Act 1920 (NSW), s 17(1); Stamps Act 1958 (Vic), s 22(a). 35 2013 ATC ΒΆ20-410 at 15,354 [145(2)]. Hayne Bell a statement, in other words, of the answer that is to be given to the statutory question identified earlier: what was the consideration "for" the transfers, in the sense of what was "the money or value passing which move[d] the conveyance or transfer"36. It is not necessary to decide, therefore, whether the Court of Appeal was right to conclude, as it must be taken to have concluded, that s 261 can apply when duty is to be assessed on a dutiable transaction. Rather, chief attention must be given to Lend Lease's submission, and the Court of Appeal's conclusion, that the consideration for the transfers was only the Stage Land Payment. The state of the Land Contrary to the holding of the Court of Appeal, and to Lend Lease's argument in this Court, it is not relevant to observe that the Land was undeveloped when it was transferred to Lend Lease. Identifying what was the consideration "for" the transfer does not depend upon the state or condition of the Land at that time. The premise for Lend Lease's argument, and the Court of Appeal's holding, was that the condition of the Land, and thus its "value" (presumably market value37), could assist in deciding what was the consideration for its transfer. But whether the Land was developed or undeveloped when it was transferred neither helps identify nor establishes what was the consideration for its transfer. Its state or condition when transferred would, of course, be directly relevant to its market value under s 20(1)(b) of the Duties Act. That was not the basis of the assessments in issue in these cases. The Commissioner relied on s 20(1)(a) on the basis that, in these cases, the consideration "for" the transfer was greater than the market value of the Land in its then condition. Because that is so, the condition of the Land when it was transferred is not to the point. Once it is decided that nothing turns on whether the Land was developed or undeveloped when it was transferred, the reasoning followed in the Court of Appeal, and adopted by Lend Lease in its argument in this Court, can be seen to depend upon the premise that the "single, integrated and indivisible" transaction between VicUrban and Lend Lease could be and should be divided between transfers of land and other matters or transactions. The Court of Appeal did not expressly identify what criterion it used to make the division it did. No clearer definition of a criterion was proffered by Lend Lease in argument in this Court. 36 Archibald Howie (1948) 77 CLR 143 at 152 per Dixon J; Dick Smith Electronics (2005) 221 CLR 496 at 518 [71] per Gummow, Kirby and Hayne JJ. 37 Spencer v The Commonwealth (1907) 5 CLR 418; [1907] HCA 82. Hayne Bell Dividing the payments Determining whether the consideration for the transfers was only so much of the payments made by Lend Lease as constituted the Stage Land Payment is not assisted by presupposing, as much of Lend Lease's argument in this Court did, that the "multiple interrelated obligations" in the 2001 DA not only can, but must, be divided between "sale and transfer of the Land", on the one hand, and other obligations described as "the ongoing development" of the Land and its "ultimate realisation" on the other. First, any presupposition of this kind denies that all of the obligations which the parties to the 2001 DA undertook were "interrelated". That would be reason enough to hesitate before making any presupposition that those obligations can or should be divided. But second, and more fundamentally, any presupposition of the kind described assumes the answer to the ultimate statutory question. It assumes that the obligations relating to payments for "the ongoing development" of the Land and payments calculated by reference to its "ultimate realisation" formed no part of the consideration moving the transfers. But what was the consideration moving the transfers is the very question for decision. In this Court, Lend Lease submitted only that there are several matters relevant to whether one or more payments, or one or more parts of a total payment, was or were "for" the transfers of the Land. Those matters included (but appeared not to be limited to) the state of the Land at the time of transfer, how the amount of the payment was calculated, whether the contract was subject to any conditions precedent, whether and how the failure to perform obligations following transfer engaged default provisions, whether there was an agreement about how VicUrban would apply the sum paid, whether the payment was to recover an outlay already made, or later to be made, by VicUrban, whether the payment related to work done on land that was or would be the subject of transfer to Lend Lease and whether the payment was a share of amounts to be received on realisation of the developed Land. At the risk of undue abbreviation, Lend Lease's submission was that sums that could be said to be paid as Lend Lease's contribution to the cost of development work which VicUrban had done or would do, and sums that were to be paid as a share of amounts Lend Lease would realise on its sale of the Land, did not form a part of the consideration for the transfer. And once those payments were identified as relating only to development obligations or "revenue" or "profit" sharing, all that remained as consideration for the transfer of the Land was the Stage Land Payment. Hayne Bell Consideration "for" the transfers As the majority in this Court's decision in Commissioner of State Revenue (NSW) v Dick Smith Electronics Holdings Pty Ltd pointed out38, the statutory criterion of consideration "for" the transaction "looks to what was received by the Vendors so as to move the transfers to the Purchaser as stipulated in the Agreement" (emphasis added). In Dick Smith Electronics, the majority held39 that: "The consideration which moved the transfer by the Vendors to the Purchaser of the Shares which they owned in the Company was the performance by the Purchaser of the several promises recorded in the Agreement in consequence of which the Vendors received the sum of $114,139,649. It was only in return for that total sum (paid by the various steps and in the various forms required by the Agreement) that the Vendors were willing to transfer to the Purchaser the bundle of rights which their shareholding in the Company represented." (emphasis added) In these cases, the consideration which moved the transfer by VicUrban to Lend Lease of each Stage was the performance, by Lend Lease, of the several promises recorded in the 2001 DA (or that agreement as later varied and supplemented), in consequence of which VicUrban would receive the total of the several amounts set out in the applicable agreement. It was only in return for the promised payment of that total sum, by the various steps recorded in the applicable agreement, that VicUrban was willing to transfer to Lend Lease the Land comprising the relevant Stage. Identifying the consideration The conclusion just described is reached after an inquiry that begins in the agreements the parties made. The search is for "what was received by the [vendor] so as to move the transfers to the [purchaser] as stipulated in the Agreement"40 (emphasis added). 38 (2005) 221 CLR 496 at 518 [72] per Gummow, Kirby and Hayne JJ. 39 (2005) 221 CLR 496 at 519 [75] per Gummow, Kirby and Hayne JJ. 40 Dick Smith Electronics (2005) 221 CLR 496 at 518 [72]. Hayne Bell Lend Lease accepted that attention cannot be confined to the Land Sale Contracts. It accepted that it is necessary to consider the agreement pursuant to which the relevant Land Sale Contracts were made (the 2001 DA or that agreement as later varied and supplemented). It is then to be observed that cl 4 of that agreement provided not only for the making of a contract for the sale of a Stage for the Stage Land Payment but also for Lend Lease to pay VicUrban the several sums described in cl 4.7. The Stage Land Payment was only one of the sums which cl 4.7(a)(i) obliged Lend Lease to pay VicUrban on or before Lend Lease took title to a Stage. And as has been explained, the amounts under cl 4.7(a)(ii), (b) and (c) which Lend Lease was bound to pay (after it took title to a Stage) adjusted the payments made before Lend Lease took title so as to provide VicUrban with amounts equal to specified percentages of the Actual Gross Proceeds of Sale of the developed Land, including amounts (up to identified caps) as contributions towards the cost VicUrban incurred for External Infrastructure and Gasworks Site Remediation. The Court of Appeal was right to describe41 the transaction that VicUrban and Lend Lease made as "single, integrated and indivisible". The transaction recorded in the 2001 DA had that character not just because it was recorded in a single set of transaction documents but because the rights and obligations provided for in those documents were interlocked. The interlocking nature of the obligations is demonstrated by reference to the provisions made by the 2001 DA in respect of default. And those provisions show that performance of all of the stipulations about payments connected with a Stage moved the transfer of the relevant Land to Lend Lease. First, each Land Sale Contract provided (in effect) that a "Material Default"42 by the purchaser of the Land under the 2001 DA would entitle VicUrban to terminate the contract for the sale of the Land. Second, under the 2001 DA, any failure to comply with a provision of the development agreement, a Land Sale Contract or any other "Project Document"43 was a "Default Event". The 2001 DA did not differentiate between the 41 2013 ATC ΒΆ20-410 at 15,376 [226]. 42 As defined in the 2001 DA. 43 Defined in a way that included not only the 2001 DA and Land Sale Contract, but also a number of other documents recording or relating to aspects of the overall project of developing the Victoria Harbour Precinct, Docklands Area. Hayne Bell consequences which were to follow from the occurrence of a Default Event constituted by a breach of a Land Sale Contract and the occurrence of a Default Event constituted by any other breach. Rather, a distinction was drawn between a Material Default and other forms of default. And any failure by Lend Lease to pay money to VicUrban, whether under the 2001 DA or under a Land Sale Contract, was a "Financial Default" and, by definition, a Material Default. If, on account of Lend Lease's breach, VicUrban became entitled to terminate the development agreement, VicUrban was entitled to terminate the agreement in relation to all future Stages and any Stage which had been transferred to Lend Lease but on which "Commencement of Development"44 had not occurred. A Stage of the latter kind had to be retransferred to VicUrban. VicUrban was then bound to resell the forfeited Stages. The amounts VicUrban received on resale were to be applied first in meeting VicUrban's "[l]oss, cost or damage" suffered directly or indirectly in respect of the termination of the agreement, and second in reimbursing Lend Lease "the aggregate of all sums the Forfeited actually Stages ... including any amounts paid on account of the Project External Infrastructure Contribution and the Project Gasworks Site Remediation Contribution in respect to the Forfeited Stages" (emphasis added) together with the assessed increase in market value of the forfeited Land resulting from the works which Lend Lease had done under the agreement (whether on the forfeited Land or elsewhere). [Lend Lease] on purchasing [outlaid] by The default provisions of the 2001 DA as varied and restated in 2006 and 2008 were not materially different. These provisions about default demonstrate that there was only one bargain between the parties, not two or more bargains45. More than that, the provisions made for the consequences of default show that the promised performance of all of the stipulations for payment occasioned by the transfer of a Stage was what moved that transfer. Noticing that some of the amounts which Lend Lease was to pay were described as its "contribution" to Integrated Public Art or the cost of External Infrastructure or the cost of the Gasworks Site Remediation may invite attention 44 Defined as completion of remediation of the Land, foundations and footings. 45 cf Prudential Assurance Co Ltd v Inland Revenue Commissioners [1993] 1 WLR 211 at 219-220 per Sir Donald Nicholls VC; Paul v Inland Revenue [1936] SC 443. Hayne Bell to whether those sums were consideration moving the transfer of the Stage. But a number of points may be made about the use of the word "contribution". First, the 2001 DA defined "Stage Land Payment" as Lend Lease's "contribution" for each Stage and the total of the Stage Land Payments (the "Total Land Price") as Lend Lease's "contribution for the cost of the Land". Second, recognising that, as Lend Lease emphasised, VicUrban and Lend Lease were each obliged to do work that was necessary to the overall success of the venture points firmly towards the conclusion that all of the various "contribution" payments which Lend Lease was obliged to make in connection with each Stage (some before transfer and some after transfer) formed a part of the consideration moving the transfer of the Stage. It was only in return for the performance of not only the obligation to make the "contribution" fixed as the Stage Land Payment but also the obligations to make all the other forms of "contribution" that VicUrban was willing to transfer the Land to Lend Lease. Two other points should be made about the payments which Lend Lease was obliged to make. Neither the manner of calculation of the amounts that were to be paid as contributions, nor the connection which the 2001 DA expressly drew between some of those payments and work undertaken by VicUrban (on External Infrastructure or Gasworks Site Remediation), denies the conclusion that VicUrban was willing to transfer the Land only in consideration of Lend Lease making all of the payments for which the 2001 DA (and that agreement as later varied and supplemented) provided. Observing that much of the work identified as the reason or occasion for a payment (provision of Integrated Public Art, External Infrastructure and Gasworks Site Remediation) would be undertaken on or in respect of land which was not the subject of the transfer in issue does not point against the conclusion that payment of all of the relevant sums was a part of the consideration for the transfer. Providing for an allowance to be made to Lend Lease, out of the proceeds of resale after default, in respect of the increase in the market value of forfeited Land brought about by the works which Lend Lease did outside that land reinforces the conclusion that the obligations which Lend Lease assumed under the 2001 DA (and that agreement as later varied and supplemented), and, in particular, its payment obligations, cannot be divided in the manner asserted by Lend Lease. The performance of the several promises of payment for which the 2001 DA stipulated was the consideration which moved each transfer of Land. Each transaction of transfer was a "single, integrated and indivisible" transaction. It was not to be divided as it was by the Court of Appeal. It remains to deal with the particular assessments. Hayne Bell The particular assessments These appeals relate to the transfer of the Land in seven Stages: Dock 5, Mosaic, C3/C4 (63-93 Merchant Street), C9 (Myer), C10 (Montage), V4 (MKWH) and V5 (Convesso). Lend Lease objected to the Commissioner's inclusion in the consideration for the transfer of each of these Stages of the amounts paid for Integrated Public Art Contribution, and for each Stage except C3/C4 the amounts paid for External Infrastructure Contribution (or Base External Infrastructure Contribution) and Gasworks Site Remediation Contribution (or Base Gasworks Site Remediation Contribution)46. The amounts of some of those payments in respect of some of the seven Stages in issue were fixed by variations made to the 2001 DA or supplementary agreements (described as "Stage Deeds"). The Commissioner rightly submitted that those subsequent agreements did not alter the character of the payments in any relevant respect. Lend Lease did not contend to the contrary. Enough has been said earlier in these reasons to explain why Lend Lease's objection to the inclusion of these amounts in the consideration for each transfer fails. In respect of the C9 and C10 Stages the Commissioner did not seek to support, in this Court, so much of the assessments as related to an item called "Grand Plaza Retention Amount". The assessments issued in respect of these Stages will accordingly require adjustment to reflect this concession. Otherwise, however, nothing more need be said about this item in the two assessments (which are the assessments in issue in matter numbers M81 of 2014 and M78 of 2014 respectively). But particular reference must be made to some other kinds of payment. Grand Plaza payments Under the 2001 DA, Lend Lease was bound to construct the "Grand Plaza Works". As the name suggests, the works would provide a large space for public recreation. By the variation agreement made in 2008, the obligation to procure construction of the Grand Plaza was shifted to VicUrban. Under the agreement as so varied, Lend Lease was bound, with effect from 10 May 2007, on or before it took title to a Stage (the Actual Stage Release Date) and until a set amount was paid, to pay VicUrban a "Grand Plaza Contribution". The amount of the 46 The change in terminology was not said to be significant. Hayne Bell contribution was fixed as 1.3 per cent of the Projected Gross Revenue on Sale of the Stage. The Grand Plaza Contribution is relevant to the assessments made in respect of the V4 and V5 Stages. The 2008 variation and restatement of the 2001 DA also provided for payment of a "Grand Plaza Additional Payment", on or before the Actual Stage Release Date, in respect of the C9 Stage. The amount to be paid was calculated as half of the difference between an agreed percentage of Projected Gross Revenue on Sale and the "Projected Stage Infrastructure Cost". When actual revenue and cost were known, an adjustment payment was to be made to bring the amount paid to half of the difference between the agreed percentage of Actual Gross Proceeds of Sale and the "Actual Stage Infrastructure Cost". No relevant distinction can be drawn between these payments or between either of them and the payments relating to Integrated Public Art, External Infrastructure and Gasworks Site Remediation. The payments were stated to be "in addition to any other amounts payable by [Lend Lease]" under the 2008 variation and restatement and the 2008 variation and restatement made no distinction between the Grand Plaza payments and any other payments for the purposes of determining what was a Financial Default (and thus a Material Default) under the agreement. The Commissioner was right to include them in determining the amount of consideration for the transfer of the relevant Stages. Additional Authority Payments The 2006 variations to the 2001 DA added a new element to the payments that were to be made under cl 4.7. In addition to the Stage Land Payment and contributions to Integrated Public Art, External Infrastructure and Gasworks Site Remediation, an amount was to be paid as an "Additional Authority Payment". On or before taking title to a Stage, Lend Lease was obliged to pay an Additional Authority Payment calculated by reference to the extent to which the projected gross revenue on sale would be larger because the development would be larger than anticipated. The amount paid on this account on or before transfer was subject to later adjustment by reference to actual gross proceeds of sale received. The 2008 variations did not affect these aspects of the agreement. The payments are relevant to the assessments made in respect of the C3/C4 and C9 Stages. Although cl 11.13 of the 2006 variation and restatement of the 2001 DA provided that VicUrban may elect to allocate all or part of the sums paid as an Additional Authority Payment to public infrastructure, neither this provision, nor any other aspect of the provisions made for the Additional Authority Payments, permits any relevant distinction between those payments and the payments Hayne Bell relating to Integrated Public Art, External Infrastructure and Gasworks Site Remediation. The Commissioner was right to include the amounts paid as Additional Authority Payments in determining the amount of consideration for the transfer of the relevant Stages. Final and Additional Land Payments It will be recalled that cl 4.7 of the 2001 DA provided, among other things, for certain adjusting payments to be made on or before the Initial Reconciliation Date and then after Stage Practical Completion. One class of adjusting payments was calculated to bring one element of the amounts paid to 2.74 per cent of the Actual Gross Proceeds of Sale. This adjustment became known as the "Final Land Payment" in respect of the Dock 5 Stage and the "Additional Land Payment" in respect of the C3/C4 Stage. The Commissioner's assessments of the consideration for the transfer of the Dock 5 Stage and the C3/C4 Stage included the Final Land Payment and Additional Land Payment respectively. For the reasons that have been given the Commissioner was right to do so. Estimate of future contributions In respect of both the C3/C4 Stage and the C10 Stage, the Commissioner also included in the amount assessed to be the consideration for the transfer his estimate of the amount of the various contributions which would fall due for payment under the adjusting provisions which have been described (the "Estimate of Outstanding Amounts"). In respect of the C9 Stage, the Commissioner included in the amount assessed to be consideration for the transfer his estimate of future contributions that he called the "Estimated Land Payment", the "Estimated Gas Site Remediation". Again, for the reasons which have been given, the Commissioner was right to conclude that the promise to pay those further amounts was a part of the consideration for the transfer of the relevant Land. the "Estimated External Infrastructure Contribution" and Non-monetary consideration For the C9 and C10 Stages the Commissioner included amounts for non-monetary consideration. The Land Sale Contract for the C10 Stage expressly provided that "for GST purposes" the consideration which Lend Lease would provide to VicUrban for the Land included, but was not limited to, "the Price" stated in the contract (the Stage Land Payment) and certain identified Hayne Bell works for providing roads and infrastructure "with a GST exclusive market value" of a specified sum. The C9 Stage Deed similarly provided that certain works would be provided as consideration for the Land. Although both were stipulations said to be "for GST purposes", and the identification of what is a consideration for a supply under the relevant GST legislation differs from the inquiry demanded by s 20(1)(a) of the Duties Act, the parties' agreements recorded, accurately, what Lend Lease was providing in return for the transfers. Lend Lease was providing the performance of other promises it had made under the applicable development agreements. The Commissioner was right to include the non-monetary consideration in the assessments made in respect of both Stages C9 and C10. Conclusion and orders For these reasons, each appeal to this Court should be allowed with costs and the orders of the Court of Appeal set aside. In each matter, other than matters M78 of 2014 and M81 of 2014, there should be consequential orders that the appeal to the Court of Appeal is dismissed with costs. In matters M78 of 2014 and M81 of 2014 there should be consequential orders that the appeal to the Court of Appeal is allowed in part and the assessment remitted to the Commissioner to reassess the duty by excluding the amount described as referable to "Grand Plaza Retention Amount", and otherwise in accordance with the reasons of this Court. The appeal to the Court of Appeal should otherwise be dismissed with costs. |
HIGH COURT OF AUSTRALIA Matter No M160/2019 MONDELEZ AUSTRALIA PTY LTD APPELLANT AND AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION KNOWN AS THE AUSTRALIAN MANUFACTURING WORKERS UNION (AMWU) & ORS RESPONDENTS Matter No M165/2019 MINISTER FOR JOBS AND INDUSTRIAL RELATIONS APPELLANT AND AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION KNOWN AS THE AUSTRALIAN MANUFACTURING WORKERS UNION (AMWU) & ORS RESPONDENTS Mondelez Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union Minister for Jobs and Industrial Relations v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2020] HCA 29 Date of Hearing: 7 July 2020 Date of Judgment: 13 August 2020 M160/2019 & M165/2019 ORDER In each matter: Appeal allowed. Set aside order 1 made by the Full Court of the Federal Court of Australia on 21 August 2019 and in its place declare that: "The expression '10 days' in s 96(1) of the Fair Work Act 2009 (Cth) means an amount of paid personal/carer's leave accruing for every year of service equivalent to an employee's ordinary hours of work in a week over a two-week (fortnightly) period, or 1/26 of the employee's ordinary hours of work in a year. A 'day' for the purposes of s 96(1) refers to a 'notional day', consisting of one-tenth of the equivalent of an employee's ordinary hours of work in a two-week (fortnightly) period." On appeal from the Federal Court of Australia Representation S J Wood QC with D Ternovski for the appellant in M160/2019 and the fourth respondent in M165/2019 (instructed by Ai Group Workplace Lawyers) T M Howe QC with I M Sekler for the fourth respondent in M160/2019 and the appellant in M165/2019 (instructed by Australian Government Solicitor) I Taylor SC with C G Winnett and L Saunders for the first to third respondents in both appeals (instructed by Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Mondelez Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union Minister for Jobs and Industrial Relations v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union Industrial law (Cth) β Where Fair Work Act 2009 (Cth) contains National Employment Standards ("NES") β Where NES are minimum terms and conditions that apply to all national system employees β Where NES address paid personal/carer's leave β Where s 96(1) of Fair Work Act provides that employees entitled to "10 days" paid personal/carer's leave per year of service β Where s 96(2) provides that paid personal/carer's leave accrues progressively according to employees' ordinary hours of work β Where s 55(4) provides that enterprise agreement may only include terms not detrimental to employee when compared to NES β Where enterprise agreement provides that ordinary hours of work for employees are 36 hours per week β Where enterprise agreement provides that employees working 12-hour shifts entitled to 96 hours paid personal/carer's leave per annum β Whether "day" in s 96(1) of Fair Work Act refers to one-tenth of equivalent of employee's ordinary hours of work two-week period ("notional day") or portion of 24-hour period otherwise allotted to working ("working day"). Words and phrases β "10 days", "day", "enterprise agreement", "fairness", "income protection", "minimum terms and conditions", "modern award", "National Employment Standards", "notional day", "ordinary hours of work", "paid personal/carer's leave", "working day", "working patterns", "working week". Fair Work Act 2009 (Cth), ss 3, 55, 85, 87, 96, 97, 99, 100, 101, 102, 104, 106A, Workplace Relations Act 1996 (Cth), ss 246, 247, 249. KIEFEL CJ, NETTLE AND GORDON JJ. These appeals are concerned with how the entitlement to paid personal/carer's leave is calculated under s 96(1) of the Fair Work Act 2009 (Cth). That sub-section provides that "[f]or each year of service with his or her employer, an employee is entitled to 10 days of paid personal/carer's leave". The issue is whether "day" in "10 days" in s 96(1) refers to (i) a "notional day", consisting of one-tenth of the equivalent of an employee's ordinary hours of work in a two-week period, or (ii) a "working day", consisting of the portion of a 24-hour period that would otherwise be allotted to working and thereby authorising an employee to be absent without loss of pay on ten working days per year. For the reasons that follow, the answer is the former. Section 96 confers a progressively accruing entitlement to paid personal/carer's leave equivalent to an employee's ordinary hours of work in a two-week period, for each year of service. "10 days" is two standard five-day working weeks. One "day" refers to a notional day consisting of one-tenth of the equivalent of an employee's ordinary hours of work in a two-week period. To account for the fact that patterns of work or distribution of hours do not always follow two-week cycles, the entitlement can also be calculated as 1/26 of an employee's ordinary hours of work in a year. That construction of s 96 ("the 'notional day' construction") is consistent with the legislative purposes of the Fair Work Act, the extrinsic materials and the legislative history. The alternative construction is that the reference to "10 days" entitles every employee, regardless of their pattern of work or distribution of hours, to be absent without loss of pay on ten working days per year ("the 'working day' construction"). That construction is rejected. It would give rise to absurd results and inequitable outcomes, and would be contrary to the legislative purposes of fairness and flexibility in the Fair Work Act, the extrinsic materials and the legislative history. The appeals should be allowed. Facts and background The facts were agreed. Mondelez Australia Pty Ltd ("Mondelez"), a national system employer1, operates four food manufacturing plants in Australia, including a Cadbury plant at Claremont in Tasmania. Mondelez is a party to the Mondelez Australia Pty Ltd, Claremont Operations (Confectioners & Stores) Enterprise Agreement 2017 ("the EBA"). See Fair Work Act, s 14. Nettle Gordon The EBA came into effect on 11 May 2018 and applies to Mondelez, to the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers Union ("the Union"), to Ms Triffitt2 and to Mr McCormack3. Ms Triffitt and Mr McCormack are members of the Union and are national system employees4 who work full-time at the Claremont plant. Clause 32 of the EBA provides that the ordinary hours of work are 36 hours per week and that shift lengths may be eight or 12 hours. Ms Triffitt and Mr McCormack each work 36 hours per week averaged over a four-week cycle and work these ordinary hours in 12-hour shifts. The appeals proceeded on an assumption that they worked an average of three shifts per week. Clause 24 of the EBA, headed "Personal / Carer's Leave", provides, relevantly, as follows: "24.1 Employees (other than employees on 12 hour shifts) Personal/Carer's Leave including sick leave consists of 80 hours of paid personal leave per annum. This will be available to the employee on their anniversary date. Unused leave is cumulative (with no cap). Accrued leave can be used for carer's leave. 24.2 Employees working on 12 hour shifts On the introduction of the new payroll system in 2011 the entitlement to Personal/Carer's Leave (including sick leave) for employees working on 12 hour shifts will be 96 hours of paid personal leave per annum. This will be available to the employee on their anniversary date and any unused leave is cumulative (with no cap). Accrued leave can 2 Ms Triffitt, the second respondent in both appeals, has been an employee at the Claremont plant since 6 August 2007. 3 Mr McCormack, the third respondent in both appeals, has been an employee at the Claremont plant since 11 April 1994. See Fair Work Act, s 60, read with ss 13 and 14. Nettle Gordon be used for carer's leave. A pro rata adjustment will occur for the period between the introduction of this arrangement and the employees [sic] next anniversary date." In accordance with cl 24.2, Mondelez credits Ms Triffitt and Mr McCormack with 96 hours of paid personal/carer's leave per year of service. When Ms Triffitt or Mr McCormack takes paid personal/carer's leave for a single 12-hour shift, Mondelez deducts 12 hours from their accrued balance. Thus, over the course of one year of service, Ms Triffitt and Mr McCormack accrue a quantum of paid personal/carer's leave that is sufficient to cover eight 12-hour shifts. Mondelez sought the following declarations in the original jurisdiction of the Federal Court of Australia: "1. On proper construction of the [EBA]: a. When [Ms Triffitt] is absent for a 12-hour shift on paid personal/carer's leave, 12 hours is to be deducted from her accrued paid personal/carer's leave balance. b. When [Mr McCormack] is absent for a 12-hour shift on paid personal/carer's leave, 12 hours is to be deducted from his accrued paid personal/carer's leave balance. On proper construction of the [EBA] and of ss 96 and 99 of the Fair Work Act ...: [Ms Triffitt's] entitlement to paid personal/carer's leave under cl 24 of the [EBA] is more beneficial to her than her entitlement to paid personal/carer's leave under the National Employment Standards. [Mr McCormack's] entitlement to paid personal/carer's leave under cl 24 of the [EBA] is more beneficial to him than his entitlement to paid personal/carer's leave under the National Employment Standards." In the Full Court, Mondelez submitted that the word "day" in s 96(1) of the Fair Work Act consists of an employee's average daily ordinary hours of work based on an assumed five-day working week β that is, average weekly ordinary Nettle Gordon hours divided by five. The Minister5 intervened to support that construction6. Mondelez's construction gives the same result as the "notional day" construction described above. An employee's average weekly ordinary hours of work divided by five is the same as one-tenth of the equivalent of an employee's ordinary hours of work in a two-week period. The Union, Ms Triffitt and Mr McCormack ("the Union parties") proposed a different construction. They submitted that a "day" in s 96(1) means a "24 hour period". The majority (Bromberg and Rangiah JJ) refused to make the declarations sought by Mondelez. Their Honours rejected Mondelez's construction and instead held that "day" in s 96(1) refers to "the portion of a 24 hour period that would otherwise be allotted to work". O'Callaghan J dissented. His Honour adopted Mondelez's construction of s 96(1) and would have declared that Ms Triffitt and Mr McCormack's entitlement to paid personal/carer's leave under the EBA is more beneficial than that under the National Employment Standards ("the NES"). Mondelez and the Minister both appeal on the ground that the majority erred in construing "day" in s 96(1) as a "working day". Fair Work Act It is necessary to construe the expression "10 days" in s 96(1) in the context of the Fair Work Act as a whole and, in particular, by reference to the provisions described below. It is necessary to construe the expression also in light of the relevant extrinsic materials and the legislative history7. Those materials, and that history, show not only continuity between the Workplace Relations Act 1996 (Cth) and the Fair Work Act but also that the provision in issue is to be understood as 5 At the time of the Federal Court proceedings, that was the Minister for Small and Family Business, the Workplace and Deregulation. The appellant in Matter No M165 of 2019 and the fourth respondent in Matter No M160 of 2019 is his successor, the Minister for Jobs and Industrial Relations. See Fair Work Act, s 569. 7 Acts Interpretation Act 1901 (Cth), s 15AB. See also CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381 [69]; R v A2 (2019) 93 ALJR 1106 at 1117 [33], 1117-1118 [37], 1131 [124]; 373 ALR 214 at 223-224, Nettle Gordon a restatement, in simpler terms8, of long-standing provisions of industrial relations law containing minimum employment conditions. It is necessary to start with the statute9. The object of the Fair Work Act is to "provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians"10. That object is sought to be achieved, in part, by11: providing workplace relations laws that are fair to working Australians, are flexible for businesses, promote productivity and economic growth for Australia's future economic prosperity ...; and ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through the [NES], modern awards and national minimum wage orders; and assisting employees to balance their work and family responsibilities by providing for flexible working arrangements". The stated objects show that the Act is intended to provide fairness, flexibility, certainty and stability for employers and their employees12. "Fairness" necessarily 8 Acts Interpretation Act, s 15AC. 9 Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at 31 [4]; Saeed v Minister for Immigration and Citizenship (2010) 241 CLR 252 at 265 [34]; Baini v The Queen (2012) 246 CLR 469 at 476 [14]; Australian Education Union v Department of Education and Children's Services (2012) 248 CLR 1 at 14 [28]; Thiess v Collector of Customs (2014) 250 CLR 664 at 671 [22], quoting Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503 at 519 [39]; SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362 at 368 [14]; A2 (2019) 93 ALJR 1106 at 1117 [32], 1131 [124], 1136 [152]; 373 ALR 214 at 223, 242-243, 250. 10 Fair Work Act, s 3. 11 Fair Work Act, s 3. 12 See also Australia, House of Representatives, Fair Work Bill 2008, Explanatory Memorandum at i, iv [r 5], v-vi [r 11]. Nettle Gordon has a number of aspects: fairness to employees, fairness between employees, fairness to employers, fairness between employers, and fairness between employees and employers. The NES are in Pt 2-2 of the Act. The NES are "minimum terms and conditions that apply to all national system employees"13. The NES recognise that employees have different patterns of work14 and use the concept of "ordinary hours of work"15, which can readily be applied to different patterns of work, so employees are treated fairly. The terms and conditions of the employment of national system employees may also be governed by a "modern award"16 or an "enterprise agreement"17. A modern award or an enterprise agreement may include terms that are ancillary or incidental to an employee's entitlement under the NES or that supplement the NES18. However, it may contain those terms "only to the extent that the effect of those terms is not detrimental to an employee in any respect, when compared to the [NES]"19. The Fair Work Commission must approve an enterprise agreement if, among other things, the employee would be "better off overall" if the enterprise agreement applied to the employee than if the relevant modern award applied to the employee20. 13 Fair Work Act, s 5(3). See also s 61(1). 14 See, eg, Fair Work Act, ss 62(3)(g), 63, 64, 65. 15 Fair Work Act, ss 62(1)(b)(ii), 63(1)(b)(ii), 64(1)(b)(ii), 81(3)(a), 81A(2), 87(2), 90(1), 96(2), 99, 106, 106B(1)(c), 111(2), 116, 119(2). 16 Fair Work Act, Pt 2-3. A modern award does not apply to an employee when an enterprise agreement applies to the employee in relation to that employment: Fair Work Act, s 57. 17 Fair Work Act, Pt 2-4. 18 Fair Work Act, s 55(4). 19 Fair Work Act, s 55(4). 20 Fair Work Act, ss 186(1), (2)(c), (2)(d), 193. See also ALDI Foods Pty Ltd v Shop, Distributive and Allied Employees Association (2017) 262 CLR 593 at 619 [92]. Nettle Gordon Section 147 provides that a modern award must include terms specifying, or providing for the determination of, an employee's "ordinary hours of work". The note to s 147 provides that "[a]n employee's ordinary hours of work are significant in determining the employee's entitlements under the [NES]"21. If there is an enterprise agreement, it is to be expected that it would state an employee's ordinary hours of work. Here, under the EBA, it was agreed that the ordinary hours of work were 36 hours per week. The "ordinary hours of work" for a national system employee to whom neither a modern award nor an enterprise agreement applies22 is addressed in s 20 of the Fair Work Act. For these employees, "ordinary hours of work" is defined to mean "the hours agreed by the employee and his or her national system employer as the employee's ordinary hours of work"23 or, if there is no agreement, 38 hours for a full-time employee or, for an employee who is not full-time, the lesser of 38 hours and the employee's usual weekly hours of work24. One matter addressed by the NES is the entitlement of national system employees to paid personal/carer's leave25. Section 96 establishes the entitlement of these employees to paid personal/carer's leave and the rate at which it accrues. It provides: "Amount of leave For each year of service with his or her employer, an employee is entitled to 10 days of paid personal/carer's leave. 21 The note is not part of the Act, pursuant to the Acts Interpretation Act as in force on 25 June 2009: Fair Work Act, s 40A; Acts Interpretation Act, s 13(3). However, matters not forming part of an Act may be taken into account when interpreting it: see, eg, Acts Interpretation Act, s 15AB(2)(a); X v Australian Prudential Regulation Authority (2007) 226 CLR 630 at 641 [35]-[38], 663 [114]. 22 Fair Work Act, s 12 definition of "award/agreement free employee". 23 Fair Work Act, s 20(1). 24 Fair Work Act, s 20(2). 25 Fair Work Act, Pt 2-2, Div 7, Subdiv A. Nettle Gordon Accrual of leave (2) An employee's entitlement to paid personal/carer's leave accrues progressively during a year of service according to the employee's ordinary hours of work, and accumulates from year to year." (emphasis added) Consistent with the stated objects of the Fair Work Act26, s 96(1) (as part of the NES) is intended to provide fair, relevant and enforceable minimum terms and conditions. Payment of the leave is addressed in s 99. It provides: "If, in accordance with this Subdivision, an employee takes a period of paid personal/carer's the employee at the employee's base rate of pay for the employee's ordinary hours of work in the period." (emphasis added) the employer must pay leave, That section provides the rate at which the leave is paid: it is the employee's base rate of pay for their ordinary hours of work in the period. The term "base rate of pay" is relevantly defined in s 16 to be "the rate of pay payable to the employee for his or her ordinary hours of work". Thus, both ss 96 and 99 compel the conclusion that it is necessary to ascertain an employee's ordinary hours of work and the rate of pay payable for that work in order for the employee to be paid for that leave. Moreover, regardless of the period of leave taken β hours or days β employees will be paid at that rate for the hours that they are absent from work. Other provisions of the Fair Work Act are relevant to the construction of s 96(1). Sections 100 and 101 address "cashing out" paid personal/carer's leave. Section 100 states that "[p]aid personal/carer's leave must not be cashed out, except in accordance with cashing out terms included in a modern award or enterprise agreement under section 101". Section 101(1) provides that "[a] modern award or enterprise agreement may include terms providing for the cashing out of paid personal/carer's leave by an employee". Section 101(2) sets out the required terms, which relevantly include that: the employee must be paid at least the full amount that would have been payable to the employee had the employee taken the leave that the employee has forgone." 26 Fair Work Act, s 3(b). Nettle Gordon Like ss 96 and 99, the "cashing out" provisions convey that it is necessary to ascertain an employee's ordinary hours of work and the rate of pay payable for that work. As s 96(2) states, an entitlement to paid personal/carer's leave accrues progressively in the course of a year of service, for all employees, by reference to ordinary hours worked and not by reference to days or working patterns. All employees working the same number of ordinary hours accrue paid personal/carer's leave at the same rate and, after working the same number of ordinary hours, are entitled under s 99 to be paid for the same number of ordinary hours, regardless of whether their ordinary hours over a two-week period are worked across ten, six, or five days in that period. Under ss 96, 97 and 99, the taking of accrued paid personal/carer's leave is calculated in the same manner. For each hour of accrued paid personal/carer's leave which is taken, the accrued entitlement is reduced by the actual number of hours taken, regardless of the employee's pattern of work. Therefore, in s 96(1), read in its statutory context, what is meant by a "day" or "10 days" must be calculated by reference to an employee's ordinary hours of work. However, the text of the Fair Work Act does not describe how a "day" or "10 days" is calculated by reference to an employee's ordinary hours of work. In an employment context, it is to be expected that "10 days" might refer to two standard five-day working weeks27. That accommodates, as it must, that employees' working patterns are not uniform. Construing the expression "10 days" as referring to the equivalent of an employee's ordinary hours of work in a two-week period, or 1/26 of their ordinary hours of work in a year, is consistent with the purpose of the paid personal/carer's leave scheme and, in particular, that of s 96, which is aimed at protecting employees against loss of earnings when they are unable to work for one of the reasons set out in s 97. And it is for those reasons that the scheme confers leave entitlements by reference to an employee's ordinary hours of work, rather than the number of days worked by an employee. The purpose of s 96 is to protect employees against loss of earnings, and it does that by reference to their ordinary hours of work. As a result, the amount of leave accrued does not vary according to their pattern of hours of work. The Union parties submitted that the role of "ordinary hours of work" in the paid personal/carer's leave scheme is limited: first, to identifying the type of 27 See, eg, In the matter of Applications by Organizations of Employees for Awards and Variations of Certain Awards with respect to Rates of Pay for Work Performed on Saturdays and Sundays (1947) 58 CAR 610 at 623, quoting Applications by Organizations of Employees for Variation of Awards with respect to a Five-Day Working Week (1945) 54 CAR 34 at 36. Nettle Gordon work by which an employee accrues paid personal/carer's leave under s 96(2), that is, an employee's "ordinary hours of work" as opposed to unpaid leave or overtime; and, second, to explaining how an employee is to be paid for a period of paid personal/carer's leave under s 99. That submission is rejected. The expression "ordinary hours of work" is significant not only in those two respects but also in calculating the amount of an employee's entitlement to paid personal/carer's leave. It is necessary to address other aspects of the Fair Work Act. As explained above, its objects include "providing workplace relations laws that are fair to working Australians, [and] are flexible for businesses"28, and "ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through the [NES]"29. Neither of those objects detracts from the significance of an employee's ordinary hours of work as the mechanism for determining the loss of earnings that the employee is protected against. The notion of fairness encompasses fair treatment as between employees according to their ordinary hours of work, regardless of the pattern in which those hours are worked. Fairness and enforceability may both be served by employers and employees both being able to know, at any point in time, precisely how much paid personal/carer's leave an employee has accrued. The "notional day" construction also conforms with the Fair Work Act more broadly. First, the similarity of language and concepts in the paid personal/carer's leave scheme in Subdiv A of Div 7 of Pt 2-2 and the paid annual leave scheme in Div 6 reflects that "10 days" (in s 96(1) in respect of paid personal/carer's leave) and "4 weeks" or "5 weeks" (in s 87(1) in respect of paid annual leave) progressively accrue according to an employee's "ordinary hours of work"30 and are cashed out in the same way31. Second, within Subdiv CA of Div 7 of Pt 2-2, which addresses unpaid family and domestic violence leave, s 106E states that "[w]hat constitutes a day of leave for the purposes of this Subdivision is taken to be the same as what constitutes a day of leave for the purposes of section 85 and Subdivisions B and C". Section 106E recognises that "day" has a different meaning in Subdiv A of Div 7 (which addresses paid personal/carer's leave) from those provisions dealing with 28 Fair Work Act, s 3(a). 29 Fair Work Act, s 3(b). 30 See Fair Work Act, s 87(2) in relation to accrual of paid annual leave. 31 See Fair Work Act, ss 92-94 in relation to the cashing out of paid annual leave. Nettle Gordon unpaid pre-adoption leave32, unpaid carer's leave33, compassionate leave34, and unpaid family and domestic violence leave35. In those provisions referred to in s 106E36, a "day" is not calculated according to an employee's ordinary hours of work. Rather, they authorise an absence for the portion of the 24-hour period that would otherwise be allocated to working. That is unsurprising. Unlike paid personal/carer's leave, none of the types of leave mentioned in s 106E accrues according to an employee's ordinary hours of work. And unlike paid personal/carer's leave, none of the types of leave mentioned in s 106E is paid (except compassionate leave). Third, the definition of "working day" in the Fair Work Act as "a day that is not a Saturday, a Sunday or a public holiday"37 recognises the weekend, consistent with the concept of a five-day working week, but also reinforces the conclusion that where "day" is used in the Act, it takes its meaning from the context. The "notional day" construction adopted is further reinforced by the Explanatory Memorandum to the Fair Work Bill 2008 (Cth). After stating that the objectives of the Bill were, among others, to "provide flexibility and stability for employers and their employees" through modern awards38 and to "promote[] productivity and fairness through enterprise agreements that are tailored to suit the needs of businesses and the needs of employees"39, the Explanatory Memorandum addressed paid personal/carer's leave. It stated that under the NES "[t]he minimum entitlement to paid personal/carer's leave is ten days for each year of service"; 32 Fair Work Act, s 85. 33 Fair Work Act, Pt 2-2, Div 7, Subdiv B. 34 Fair Work Act, Pt 2-2, Div 7, Subdiv C. 35 Fair Work Act, Pt 2-2, Div 7, Subdiv CA. 36 Fair Work Act, s 85 and Pt 2-2, Div 7, Subdivs B, C and CA. 37 Fair Work Act, s 12. See also ss 414, 427, 428, 430, 441, 443, 454, 536. 38 Australia, House of Representatives, Fair Work Bill 2008, Explanatory Memorandum at i. See also at iv [r 5]. 39 Australia, House of Representatives, Fair Work Bill 2008, Explanatory Memorandum at ii. Nettle Gordon "[l]eave accrues progressively according to an employee's ordinary hours of work and is cumulative"; and in relation to payment, "[i]f an employee takes a period of paid personal/carer's leave, the employer must pay the employee at the employee's base rate of pay for the employee's ordinary hours of work in the period", unless more generous payment terms are agreed40. The Explanatory Memorandum described the operation of the scheme in "The concept of an employee's ordinary hours of work is central to the paid personal/carer's leave entitlement as it determines the rate at which the entitlement accrues and also the entitlement to payment when leave is taken. General principles Leave accrues according to an employee's ordinary hours of work (which may be set out in a modern award or enterprise agreement, or are calculated in the manner set out in clause 20). Such hours are often expressed as a number of hours per week. In effect, therefore, the Bill ensures an employee will accrue the equivalent of two weeks' paid personal/carer's leave over the course of a year of service. Although this is expressed as an entitlement to 10 days (reflecting a 'standard' 5 day work pattern), by relying on an employee's ordinary hours of work, the Bill ensures that the amount of leave accrued over a period is not affected by differences in the actual spread of an employee's ordinary hours of work in a week. Therefore, a full-time employee who works 38 hours a week over five days (Monday to Friday) will accrue the same amount of leave as a full-time employee who works 38 ordinary hours over four days per week. Over a year of service both employees would accrue 76 hours of paid personal/carer's leave[.] 40 Australia, House of Representatives, Fair Work Bill 2008, Explanatory Memorandum at 63. 41 Australia, House of Representatives, Fair Work Bill 2008, Explanatory Memorandum at 64. Nettle Gordon Similarly, the requirement to pay an employee for their absence on the basis of their ordinary hours of work for the period of the absence means that the employee is entitled to be paid for his or her ordinary hours of work on the days in the week they would have worked but for being absent from (ie, excluding overtime)." work on paid personal/carer's (emphasis added) leave That description records that the Bill was to "ensure[] that the amount of leave accrued over a period [was] not affected by differences in the actual spread of an employee's ordinary hours of work in a week"42. The three examples set out under the description just quoted "illustrate the intended operation of the accrual Tulah is a full-time employee whose ordinary hours of work are 38 per week. On average, she also works an additional two hours of overtime per week. Tulah will accrue ten days' personal/carer's leave based on her ordinary hours of work (76 hours) over a year of service. If she takes a week's personal/carer's leave because she is sick or to care for a member of her immediate family who is sick, she will be entitled to be paid for 38 ordinary hours at her base rate of pay. Brendan is a part-time employee whose ordinary hours of work are 19 per week. He will accrue half the amount of paid personal/carer's leave over a year of service as Tulah (38 hours), reflecting the lower number of ordinary hours that he works. This is also reflected in how much he is entitled to be paid if he takes a week's paid personal/carer's leave. If he takes a week's personal/carer's leave, he will be entitled to be paid for 19 ordinary hours at his base rate of pay. Sudhakar is a full time employee who has entered into a permissible averaging arrangement under the NES and works an average of 152 hours every four weeks (based on 38 ordinary hours per week). The number of ordinary hours that Sudhakar works on any given day may vary according to the averaging arrangement. However, over a year he accrues ten days (76 hours) of paid personal/carer's leave. 42 Australia, House of Representatives, Fair Work Bill 2008, Explanatory Memorandum at 64. 43 Australia, House of Representatives, Fair Work Bill 2008, Explanatory Memorandum at 65. Nettle Gordon If he is sick and takes leave for a day, he will be entitled to be paid for the number of ordinary hours he was rostered to work on that day (but not for any additional overtime hours that he was to work). If an employee changes the basis of their employment (eg, if the employee changes from a full-time employee to a part-time employee), they would not lose accrued leave, although the future rate of accrual will be different (based on the employee's new ordinary hours of work)." (emphasis added) Each example is consistent with the "notional day" construction: each example explains that the number of ordinary hours an employee works per week determines the amount of paid personal/carer's leave, measured in hours, that the employee accrues over a year of service (regardless of the number of days in a week that the employee works). The third example is consistent with the expression "10 days" reflecting two standard five-day working weeks when it states that for an employee working an average of 152 hours every four weeks, "over a year he accrues ten days (76 hours) of paid personal/carer's leave"44. And, as the Union parties properly conceded, the third example in the Explanatory Memorandum cannot be reconciled with the "working day" construction adopted by the majority in the Full Court below and advanced by the Union parties in this Court. The "notional day" construction is also consistent with the legislative history. The Workplace Relations Act was the predecessor to the Fair Work Act. As the Explanatory Memorandum to the Fair Work Bill stated, the operation of the relevant provisions of the Workplace Relations Act was as follows45: "Personal leave (includes sick leave, carer's leave and compassionate leave): an employee is entitled to ten days of paid personal leave per annum after 12 months of service for an employee who works 38 hours per week. This entitlement is pro-rated for employees who have not completed 12 months service." 44 Australia, House of Representatives, Fair Work Bill 2008, Explanatory Memorandum at 65. 45 Australia, House of Representatives, Fair Work Bill 2008, Explanatory Memorandum at ix [r 22]. Nettle Gordon The proposed changes to personal/carer's leave (as compared to the Workplace Relations Act) were limited46: "Personal/carer's leave and compassionate leave: the NES will not change the quantum of the entitlement to personal/carer's leave and compassionate leave but will extend unpaid compassionate leave to casual employees. In addition, the number of paid carer's leave days which can be used is no longer capped at 10 days per year." That statement in the Explanatory Memorandum was accurate. The paid personal/carer's leave provision in the Workplace Relations Act, originally enacted as s 93F(2)47, provided as follows: "Accrual (2) An employee is entitled to accrue an amount of paid personal/carer's leave, for each completed 4 week period of continuous service with an employer, of 1/26 of the number of nominal hours worked by the employee for the employer during that 4 week period. Example: An employee whose nominal hours worked for an employer each week over a 12 month period are 38 hours would be entitled to accrue 76 hours paid personal/carer's leave (which would amount to 10 days of paid personal/carer's leave for that employee) over the period." (emphasis added) The Explanatory Memorandum to the Bill that introduced s 93F(2) stated48: "This is equivalent to two weeks of personal leave for employees whose hours do not change over the course of a 12 month period β for example, an employee whose nominal hours worked for a 12 month period were 46 Australia, House of Representatives, Fair Work Bill 2008, Explanatory Memorandum at xi [r 26]. 47 See Workplace Relations Amendment (Work Choices) Act 2005 (Cth), Sch 1, item 71. The provision was later renumbered as s 246(2): Workplace Relations Amendment (Work Choices) Act, Sch 5. 48 Australia, House of Representatives, Workplace Relations Amendment (Work Choices) Bill 2005, Explanatory Memorandum at 115 [556]. Nettle Gordon 38 hours per week would be entitled to 76 hours of personal leave (which is two weeks of 38 hours each). However, the formula also ensures that employees whose hours vary accrue appropriate amounts of personal leave." (emphasis added) Similarly, s 93I(2)49 set an annual limit on paid carer's leave. It contained the following example: "Example: An employee whose nominal hours worked for an employer each week were 38 hours during a 12 month period of continuous service with the employer would not be entitled to take any paid carer's leave from his or her employment with the employer if the employee had, during the period, already taken 76 hours paid carer's leave (which amounted to 10 days paid carer's leave for that employee) from that employment." (emphasis added) Section 247, which addressed payment for the leave, provided as follows: "If an employee takes paid personal/carer's leave during a period, the employee must be paid a rate for each hour (pro-rated for part hours) of paid personal/carer's leave taken that is no less than the rate that, immediately before the period begins, is the employee's basic periodic rate of pay (expressed as an hourly rate)." (emphasis added) The Explanatory Memorandum to the Fair Work Bill shows the continuity between the Workplace Relations Act and the Fair Work Act, consistently with a comparison of the two sets of provisions. Under the Workplace Relations Act, each year an employee was entitled to paid personal/carer's leave of 1/26 of the number of nominal hours worked over a year, which amounted to "10 days" or "two weeks" of paid personal/carer's leave. Under the Fair Work Act, each year an employee is similarly entitled to paid personal/carer's leave equivalent to an employee's ordinary hours of work in "10 days" or "two weeks", being 1/26 of the employee's nominal hours worked over a year. Further, the Workplace Relations Act used "10 days" and "two weeks" as a shorthand for the amount of leave an employee accrues over a year, by reference to the nominal hours worked in a period, and that concept is retained in the Fair Work Act50. 49 The provision was later renumbered as s 249(2): Workplace Relations Amendment (Work Choices) Act, Sch 5. 50 Acts Interpretation Act, s 15AC. Nettle Gordon The Union parties submitted that there was one anomalous consequence of the "notional day" construction, namely that an employee who takes paid personal/carer's leave on a particular day may nonetheless be required to work overtime on that day. The anomaly does not arise. Subdivision A of Div 7 of Pt 2-2 is concerned with protecting employees against loss of pay for ordinary hours of work. Section 99, for example, makes clear that pay for ordinary hours of work is protected. On any view, absence for rostered overtime is unpaid. While Subdiv A of Div 7 of Pt 2-2 does not specifically refer to absence from work during overtime hours51, an employee taking leave under that Subdivision must give notice of taking leave and the period, or expected period, of leave52. It cannot be lawful and reasonable53 for an employer to require an employee to attend work for rostered overtime during a period where an employee has given notice of leave for that period, whether under the Act or, here, under cl 24.3 of the EBA, where employees absent from work because of illness or other unplanned reason "are required to notify [Mondelez] of their absence within 24 hours of their shift commencing, and if reasonably practicable, prior to their shift commencement time" by specific times. Rejection of the "working day" construction The "working day" construction adopted by the majority in the Full Court (and urged by the Union parties in this Court) is not consistent with the purpose of s 96 or the stated objectives of the Fair Work Act of fairness, flexibility, certainty and stability. The "working day" construction would lead to inequalities between employees with different work patterns, and so would be unfair. An employee whose hours are spread over fewer days with longer shifts would be entitled to more paid personal/carer's leave than an employee working the same number of hours per week spread over more days. Thus, on the construction adopted by the majority in the Full Court, an employee working 36 ordinary hours in a week in three shifts of 12 hours (as Ms Triffitt and Mr McCormack do) would be entitled to ten 12-hour days of paid personal/carer's leave per annum, or 120 hours, whereas an employee working 36 ordinary hours in a week in five days of 7.2 hours would be entitled to ten 7.2-hour days of paid personal/carer's leave per annum, or 72 hours. And, as Mondelez submitted, it may be expected that the employee working 12-hour shifts three times a week takes fewer days of paid personal/carer's leave given they work on fewer days than the employee working 7.2 hours, 51 cf Fair Work Act, s 22. 52 Fair Work Act, s 107. 53 See Fair Work Act, ss 62, 63. Nettle Gordon five days a week, and is therefore less likely to need to take paid personal/carer's leave on a working day. Similarly, on the "working day" construction, part-time employees would be entitled to the same amount of leave as, or more leave than, full-time employees. For example, a part-time employee working one day per week for 7.6 hours would be entitled to ten days of paid personal/carer's leave per annum (the same as an employee working 7.6 hours five days a week) and would accrue the leave at five times the rate of a full-time employee. And a part-time employee who works 12 ordinary hours per week as a single shift would accrue 120 hours of leave (ten absences of 12 hours) β almost double the 72 hours of leave a full-time employee working 36 ordinary hours per week over five 7.2-hour days would accrue in a year. Additionally, a person who was employed one day per week by a number of employers would be entitled to ten days of paid personal/carer's leave from each employer. Such results would be directly contrary to a stated object of the Fair Work Act of "providing workplace relations laws that are fair to working Australians, are flexible for businesses, [and] promote productivity and economic growth"54. Moreover, the "working day" construction would not encourage "flexible working arrangements", another object of the Fair Work Act55. It would discourage an employer from employing anyone other than one person working a five-day working week, rather than employing a number of people over the course of that week, thereby avoiding employing a number of employees each being entitled to ten days of paid personal/carer's leave per annum. And, of course, it would not be consistent with assisting employees to balance their work and family responsibilities if the only working arrangement on offer was a five-day working week56. Further, the "working day" construction would create not only unfairness but also uncertainty. For example, if an employee takes a part day of paid personal/carer's leave, then on the "working day" construction, the Union parties submitted that an employee could take two hours' leave which would be measured as a fraction of a day, not necessarily in hours, though it could be measured in hours. The unfairness and uncertainty created would be that employees who take the same number of hours of paid personal/carer's leave, but who are working shifts 54 Fair Work Act, s 3(a). See also Australia, House of Representatives, Fair Work Bill 2008, Explanatory Memorandum at i, iv [r 5], v-vi [r 11]. 55 Fair Work Act, ss 3(d), 65. See also s 3(a). 56 Fair Work Act, ss 3(d), 65. Nettle Gordon of different hours, will have different portions of the day deducted from their accrued leave. For all those reasons, the submission of the Union parties that the Fair Work Act effected a change to ensure that each employee could have ten absences from work per year from each employer, regardless of the hours worked, is rejected. Conclusion The appeals should be allowed. Order 1 made by the Full Court of the Federal Court of Australia should be set aside and in its place it be declared that: "The expression '10 days' in s 96(1) of the Fair Work Act 2009 (Cth) means an amount of paid personal/carer's leave accruing for every year of service equivalent to an employee's ordinary hours of work in a week over a two-week (fortnightly) period, or 1/26 of the employee's ordinary hours of work in a year. A 'day' for the purposes of s 96(1) refers to a 'notional day', consisting of one-tenth of the equivalent of an employee's ordinary hours of work in a two-week (fortnightly) period." There will be no order as to costs. Purposive contextual construction of the text of s 96(1) of the Fair Work Act 2009 (Cth) cannot let me construe "10 days" to mean 10 average working days calculated as "the employee's average daily ordinary hours of work based on a standard five-day working week" (Mondelez's construction) or "an employee's usual weekly hours of work over a 2 week (fortnightly) period" (the Minister's construction) or "equivalent to an employee's ordinary hours of work in a week over a two-week (fortnightly) period, or 1/26 of the employee's ordinary hours of work in a year" (the construction to which the majority is persuaded). "10 days", in my opinion, means 10 periods each of 24 hours. "Leave", in an employment context, means authorised absence from work. A "day" of leave, in the context of the National Employment Standards in Pt 2-2 of the Fair Work Act, means an authorised absence from all work that would otherwise be performed in a period of 24 hours. A fraction of a day of leave corresponds to an authorised absence from the same fraction of the work that would otherwise be performed in a period of 24 hours. That is the uncomplicated sense in which Pt 2-2 of the Fair Work Act consistently refers to "days" of "leave" in conferring entitlements on a national system employee, other than a casual employee, to "2 days of unpaid pre-adoption leave"57, "2 days of unpaid carer's leave"58, "2 days of compassionate leave"59 and "5 days of unpaid family and domestic violence leave"60. Acknowledging that s 106E (enacted during the course of the proceedings giving rise to these appeals) scrupulously avoids foreclosing the possibility that s 96(1) might refer to "days" of "leave" in some other sense in conferring an entitlement on an employee to "10 days of paid personal/carer's leave", I see no justification for construing s 96(1) as uniquely departing from the standard pattern of specifying the number of 24-hour periods in which absence from work is authorised. Construing "10 days" as a shorthand reference to an unspecified number of ordinary hours of work calculated according to an unexpressed mathematical formula overstrains the minimalist statutory text. Conjuring a formula does not advance the purpose of the conferral of the entitlement. Anomalies and inequities conjectured to arise if "10 days" means 10 periods each of 24 hours are not anomalies or inequities when the nature of the entitlement as a form of statutory income protection is properly understood. 57 Section 85 of the Fair Work Act. 58 Section 102 of the Fair Work Act. 59 Section 104 of the Fair Work Act. 60 Section 106A of the Fair Work Act. Legislative history inserted as s 93F(2) by True it is that s 96(1)'s reference to "10 days" was drawn directly from the text of the statutory example enacted to illustrate the operation of s 246(2) of the Workplace Relations Act 1996 the (Cth), Workplace Relations Amendment (Work Choices) Act 2005 (Cth). Section 246(2) set out a statutory formula expressed to entitle an employee to accrue an amount of paid personal/carer's leave in the amount of 1/26 of the number of nominal hours worked by the employee during a completed four-week period of continuous service. Section 246(4) went on to require an employer to credit the amount accrued according to that formula incrementally each month. Section 246(1) expressed the total amount of paid personal/carer's leave to which an employee was from time to time entitled in terms of the total credited amount. Not true is that the reference to "10 days" appeared in the statutory example as a shorthand expression of the statutory formula expressed in s 246(2) of the Workplace Relations Act. The statutory example, which s 15AD(a) of the Acts Interpretation Act 1901 (Cth) required not to be taken to be exhaustive, was as follows: "An employee whose nominal hours worked for an employer each week over a 12 month period are 38 hours would be entitled to accrue 76 hours paid personal/carer's leave (which would amount to 10 days of paid personal/carer's leave for that employee) over the period." Doing the math, the statutory example can be seen to have implicitly assumed that the employee worked the 38 nominal hours each week over the 12-month period at the regular rate of 7.6 hours each day for five days each week. Only on that assumption could the 76 hours of paid personal/carer's leave produced through the application of the statutory formula set out in s 246(2) be said parenthetically to "amount to 10 days of paid personal/carer's leave for that employee". Far from being a shorthand expression of the formula in s 246(2), the "10 days of paid personal/carer's leave for that employee" was presented in the example as another way of expressing the 76 hours of paid personal/carer's leave resulting from the application of the formula in s 246(2) on the assumptions made in the example. The reference to "10 days" in that context was to 10 periods each of 24 hours, in each of which the nominal hours of work of the employee was assumed to be 7.6 hours. The same assumption, that an employee worked at a regular rate of 7.6 hours each day for five days each week, underlay the explanation in the Explanatory Memorandum to the Bill for the Fair Work Act that the Workplace Relations Act entitled an employee "to ten days of paid personal leave per annum after 12 months of service for an employee who works 38 hours per week"61. The same assumption then flowed through to the explanation that the National Employment Standards "will not change the quantum of the entitlement to personal/carer's leave"62. For an employee working 38 nominal or ordinary hours each week at the regular rate of 7.6 hours each day for five days of the week, the quantum of the entitlement to paid personal/carer's leave after 12 months of service would remain exactly the same: the annual entitlement to "10 days of paid personal/carer's leave" to be conferred by s 96(1) of the Fair Work Act would equate to the entitlement to 76 hours of paid personal/carer's leave to which that employee would have been entitled under s 246(1) of the Workplace Relations Act after 12 months of credits under s 246(4) calculated in accordance with the formula set out in s 246(2). The further explanation in the Explanatory Memorandum to the Bill for the Fair Work Act that the National Employment Standards "will ... replace complex rules about the accrual and crediting of paid personal/carer's leave with a single, simple rule"63 holds the key to the true import of the legislative change then proposed to be enacted. The single, simple rule proposed to be enacted in s 96 of the Fair Work Act was not some variation of the mathematical formula set out in s 246(2) of the Workplace Relations Act. The single, simple rule to be enacted was rather the annual entitlement to "10 days", which was the outcome of applying that formula to the paradigm case of a full-time employee whose nominal hours of work were worked at a regular daily rate over five days each week. The standard annual entitlement of an employee to "10 days" of leave was to accrue progressively proportionately to the employee's ordinary hours of work. Under the single, simple rule then proposed to be enacted in s 96 of the Fair Work Act, s 96(1) would entitle all employees to "10 days" of leave for each year of service and s 96(2) would go on to provide for that standard entitlement to "10 days" of leave to accrue over the course of a year of service in proportion to an employee's ordinary hours of work for the year to date expressed as a fraction of the employee's projected ordinary hours of work for the year as a whole. Entitlement to paid personal/carer's leave would henceforth be measured in days and fractions of days, not hours and fractions of hours. Accrual of leave in 61 Australia, House of Representatives, Fair Work Bill 2008, Explanatory Memorandum at ix. 62 Australia, House of Representatives, Fair Work Bill 2008, Explanatory Memorandum at xi. 63 Australia, House of Representatives, Fair Work Bill 2008, Explanatory Memorandum at xi. days and fractions of days would henceforth be determined simply by applying the ratio indicated in s 96(2) to the standard annual entitlement indicated in s 96(1). Importantly, "10 days" in s 96(1) of the Fair Work Act would have precisely the same meaning as "10 days" had in the statutory example enacted to illustrate the operation of s 246(2) of the Workplace Relations Act. "10 days" would mean nothing more or less than 10 periods, each of 24 hours, in which work would have been performed if leave had not been taken. Because the measure of the entitlement to paid personal/carer's leave would be changed to days, there would be no need for the Fair Work Act to contain any provision along the lines of s 247A of the Workplace Relations Act, which made elaborate provision for the taking of additional hours of unpaid leave by a full-time employee whose specified hours of work on a particular day exceeded the nominal hours of work for which the employee was entitled to paid personal/carer's leave. By s 247A, the employer was "taken to have authorised the employee to be absent from work for any other hours (or part hours) on that day that the employee would otherwise have worked". Henceforth, with the enactment of s 96(1) of the Fair Work Act, precisely how many hours of work β whether ordinary hours of work or other hours of work β a particular employee would be entitled to be absent from work on a particular day on which leave might be taken would depend simply on how many hours the employee would otherwise have worked on that day. For an employee who always worked 38 hours at a regular daily rate over five days each week, a day of leave would always translate to an authorised absence from 7.6 ordinary hours of work. For part-time employees, and for full-time employees working concentrated or irregular hours, the number of hours of authorised absence from work on a day of leave might be more or less and might vary from day to day. Turning to the detail of how personal/carer's leave would accrue and be paid in accordance with the Fair Work Act, the Explanatory Memorandum to the Bill went on to state that "[t]he concept of an employee's ordinary hours of work is central to the paid personal/carer's leave entitlement as it determines the rate at which the entitlement accrues and also the entitlement to payment when leave is taken"64. In so stating, the Explanatory Memorandum was highlighting the centrality of the concept of an employee's ordinary hours of work to the operation of s 96(2), which expressly ties the rate of accrual of the annual entitlement conferred by s 96(1) to ordinary hours of work, and of s 99, which expressly obliges the employer to pay the employee at the employee's base rate of pay for 64 Australia, House of Representatives, Fair Work Bill 2008, Explanatory Memorandum at 64. the employee's ordinary hours of work for such period of leave as the employee might take. The Explanatory Memorandum contained nothing to suggest that the concept of an employee's ordinary hours of work needed to be deployed to understand the annual entitlement to "10 days" leave conferred by s 96(1), save that it parenthetically referred to "10 days" as "reflecting a 'standard' 5 day work pattern"65. To allude in that way to the derivation of the entitlement expressed as "10 days" is a long way from indicating that the expression was a shorthand reference to an unspecified number of ordinary hours of work calculated according to some unspecified adaptation of the mathematical formula set out in s 246(2) of the Workplace Relations Act. Where the Explanatory Memorandum might on a close reading be thought to provide traction for the notion that "10 days" in s 96(1) of the Fair Work Act imports some adaptation of the mathematical formula set out in s 246(2) of the Workplace Relations Act is in some details of the explanation it went on to give of the outworking of ss 96 and 99. The Explanatory Memorandum stated that "a full-time employee who works 38 hours a week over five days" and "a full-time employee who works 38 ordinary hours over four days per week" would both accrue "76 hours of paid personal/carer's leave" over a year of service66. The Explanatory Memorandum then gave three "examples [to] illustrate the intended operation of the accrual and payment provisions", two of which were expressed in relevantly neutral terms but in the third of which the "10 days" of personal/carer's leave accrued over a year of service by a full-time employee named Sudhakar who worked variable hours was parenthetically equated to "76 hours"67. If, on the one hand, those details of the explanation of the outworking of ss 96 and 99 were meant to provide a precise and comprehensive explanation of the outworking of s 96(1) as well as of ss 96(2) and 99, the two references to "76 hours" are problematic in that they cannot be reconciled with "10 days" in s 96(1) meaning 10 periods each of 24 hours. The correct explanation would have been that the full-time employee who worked 38 hours over five days each week and the full-time employee who worked 38 ordinary hours over four days each week would both accrue 10 days of leave. The 10 days would translate to a leave 65 Australia, House of Representatives, Fair Work Bill 2008, Explanatory Memorandum at 64. 66 Australia, House of Representatives, Fair Work Bill 2008, Explanatory Memorandum at 64. 67 Australia, House of Representatives, Fair Work Bill 2008, Explanatory Memorandum at 65. entitlement equivalent to 76 ordinary hours of work in the case of the employee who worked five days a week and to 95 ordinary hours of work in the case of the employee who worked four days a week. In the third illustrative example, the length of Sudhakar's authorised absences from work over 10 days of leave would have depended on how many hours he would otherwise have worked on the days which he took as leave. The annual total might translate to 76 hours or to more or less than 76 hours. If, on the other hand, those details of the explanation of the outworking of ss 96 and 99 were focused on explaining the outworking of s 96(2) and s 99, the two references to "76 hours" appear less problematic. The particular point of comparing the two full-time employees working 38 hours each week, in the language of the Explanatory Memorandum itself, was to emphasise that, "[a]lthough [the entitlement in s 96(1)] is expressed as an entitlement to 10 days (reflecting a 'standard' 5 day work pattern), by relying on an employee's ordinary hours of work, [s 96(2)] ensures that the amount of leave accrued over a period is not affected by differences in the actual spread of an employee's ordinary hours of work in a week"68. The point was not to translate the standard entitlement of "10 days" in s 96(1) into an entitlement expressed in a standard number of hours. The particular point of the third illustrative example was that by operation of s 96(2) Sudhakar would accrue the same standard entitlement of "10 days" over the course of a year notwithstanding that he worked variable hours with overtime with the result that "[i]f he [was] sick and [took] leave for a day, he [would] be entitled [by operation of s 99] to be paid for the number of ordinary hours he was rostered to work on that day (but not for any additional overtime hours that he was to work)"69. The point was not that his "10 days" would necessarily translate to an entitlement of 76 hours. What, if anything, should then be made of the Explanatory Memorandum's two references to "76 hours" in considering the meaning of "10 days" in s 96(1) of the Fair Work Act? Not nothing, but not much. The pronouncement of five members of the High Court in 2010 that "it is erroneous to look at extrinsic materials before exhausting the application of the ordinary rules of statutory construction"70 cannot be understood to have meant 68 Australia, House of Representatives, Fair Work Bill 2008, Explanatory Memorandum at 64. 69 Australia, House of Representatives, Fair Work Bill 2008, Explanatory Memorandum at 65. 70 Saeed v Minister for Immigration and Citizenship (2010) 241 CLR 252 at 265 [33]. See also at 264-265 [31]. more than to stress that statements of legislative intention made in extrinsic materials do not "overcome the need to consider the text of a statute to ascertain its meaning"71. The "modern approach to statutory interpretation", which was well-established before the pronouncement and which has continued in practice afterwards, "(a) insists that the context be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise, and (b) uses 'context' in its widest sense to include such things as the existing state of the law and the mischief which ... one may discern the statute was intended to remedy"72. Applying the modern approach to statutory interpretation, consideration of context, including consideration of legislative history and extrinsic materials, "has utility if, and in so far as, it assists in fixing the meaning of the statutory text"73. The quality and extent of the assistance extrinsic materials provide in fixing the meaning of statutory text is not uniform. The quality and extent of the assistance varies in practice in ways unable to be fully appreciated without regard to the provenance and conditions of creation of the extrinsic materials74. Explanatory memoranda for all Government Bills other than appropriation and supply Bills introduced into the Commonwealth Parliament have long been required by the practice of the Senate and the standing orders of the House of Representatives75. The Department of the Prime Minister and Cabinet has long published a Legislation Handbook for the guidance of officers of the Executive Government76 the current edition of which describes an explanatory memorandum for a Government Bill as "a companion document to a bill, to assist members of 71 Jemena Asset Management (3) Pty Ltd v Coinvest Ltd (2011) 244 CLR 508 at 527 72 CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408. 73 Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503 at 519 [39]. 74 See Dharmananda, "Using Parliamentary Materials in Interpretation: Insights from Parliamentary Process" (2018) 41 University of New South Wales Law Journal 4. 75 Australia, House of Representatives, Standing Orders, standing order 141(b); Elder (ed), House of Representatives Practice, 7th ed (2018) at 349-350; Meiklejohn, Fitting the Bill: A History of Commonwealth Parliamentary Drafting (2012) at 204-205; Australian Government, Department of the Prime Minister and Cabinet, Legislation Handbook (2017) at [13.10]. 76 Meiklejohn, Fitting the Bill: A History of Commonwealth Parliamentary Drafting the Parliament, officials and the public to understand the objectives and detailed operation of the clauses of the bill"77. Typically, an explanatory memorandum for a Government Bill is written by officers of the Department whose Minister has portfolio responsibility for the Bill and who have given drafting instructions for the Bill to the Office of Parliamentary Counsel, the principal function of which is "the drafting of proposed laws for introduction into either House of the Parliament"78. Explanatory memoranda for Government Bills introduced into the Commonwealth Parliament are written against the background of the Parliament's commitment to the governance of the enacted statutory text accentuated in the constrained language used by the Parliament in s 15AB of the Acts Interpretation Act to acknowledge how consideration of an explanatory memorandum or other extrinsic material might be "capable of assisting in the ascertainment of the meaning" of a provision of an Act. Section 15AB acknowledges that consideration of an explanatory memorandum might assist "to confirm that the meaning of the provision is the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act". Or consideration of the explanatory memorandum might assist "to determine the meaning of the provision" if it "is ambiguous or obscure" or if "the ordinary meaning conveyed by the text of the provision ... is manifestly absurd or is unreasonable". Made clear by omission from s 15AB is that the Commonwealth Parliament does not contemplate that explanatory memoranda might be used by officers of the Executive Government writing them, or by courts considering them, to add to or detract from the text of an enacted provision. Axiomatically, an explanatory memorandum "cannot displace the meaning of the statutory text"79 and cannot be "substituted for the text"80. Having regard to their provenance and to the circumstances of their creation, explanatory memoranda for Government Bills introduced into the Commonwealth Parliament can ordinarily be taken by courts to be reliable guides to the policy intentions underlying Government sponsored legislation. They can 77 Australian Government, Department of the Prime Minister and Cabinet, Legislation Handbook (2017) at [7.1]. 78 Section 3(1)(a) of the Parliamentary Counsel Act 1970 (Cth). 79 Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503 at 519 [39]. 80 Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 518. ordinarily be relied on by courts to explain the overall legislative design and the intended practical operation of provisions and combinations of provisions. Their use of examples of the contemplated operation of provisions can inform in both those respects81. They can sometimes even yield insight into the precise grammatical sense in which words appear in the texts of provisions82. Lacking both the force of law and the precision of parliamentary drafting, however, an explanatory memorandum cannot be taken to be an infallible and exhaustive guide to the legal operation of a provision. Notoriously, explanatory memoranda sometimes get the law wrong83. The potential for error in examples of the contemplated operation of provisions set out in explanatory memoranda is highlighted by the acknowledgement of the Parliament in s 15AD(b) of the Acts Interpretation Act that even an enacted example of the operation of a provision might get the legal operation of the provision wrong: "if the example is inconsistent with the provision, the provision prevails". Here, consideration of the Explanatory Memorandum to the Bill for the Fair Work Act leads me to conclude that it did not capture with precision the full implications of the single, simple rule of "10 days" proposed to be enacted in s 96(1) in its two obscure references to "76 hours" to which I have drawn attention. The tail would wag the dog were those obscure and debatable references reverse engineered to attribute a complicated and contestable and ungrammatical meaning to the uncomplicated and grammatically meaningful text. Nature of the entitlement Construing "10 days" to mean 10 periods each of 24 hours is wholly consistent with the nature of the entitlement to paid personal/carer's leave for which s 96(1) of the Fair Work Act provides. 81 Bayside City Council v Telstra Corporation Ltd (2004) 216 CLR 595 at 630-631 82 See eg Mills v Federal Commissioner of Taxation (2012) 250 CLR 171 at 187-188 83 eg Brooks v Commissioner of Taxation (2000) 100 FCR 117 at 136 [68], referring to Hepples v Federal Commissioner of Taxation (1992) 173 CLR 492. Yes, the entitlement accumulates from year to year84. Yes, although the entitlement cannot otherwise be cashed out85, the terms of a modern award or enterprise agreement can allow for an employee to cash it out86 if those terms require that the employee must be paid the "full amount" (an expression I interpret to mean the maximum potential amount) that would have been payable to the employee had he or she taken the leave forgone87. But the nature of the entitlement cannot be understood except by reference to the circumstances in which paid personal/carer's leave can be taken and by reference to the quantification of the payment which the employer must make to the employee when it is taken. By operation of s 97(a) of the Fair Work Act, paid personal/carer's leave can be taken "because the employee is not fit for work because of a personal illness, or personal injury, affecting the employee". In that respect, paid personal/carer's leave is the modern equivalent of what used to be known as "sick pay" or paid "sick leave": "the right of an employee to receive his ordinary wages in respect of a period during which he is unable, by reason of sickness or accident, to perform his duties"88. Sickness being "a misfortune to which all are subject"89, sick leave protects employees against the hardship associated with the loss of earnings they would have expected to earn had they been well90. By operation of s 97(b), paid personal/carer's leave can only otherwise be taken "to provide care or support to a member of the employee's immediate family, or a member of the employee's household, who requires care or support because of ... a personal illness, or personal injury ... or ... an unexpected emergency affecting the member". In that 84 Section 96(2) of the Fair Work Act. 85 Section 100 of the Fair Work Act. 86 Section 101(1) of the Fair Work Act. 87 Section 101(2)(c) of the Fair Work Act. 88 Graham v Baker (1961) 106 CLR 340 at 346. 89 Australasian Meat Industry Employees Union v Metropolitan and Export Abattoirs Board (1944) 53 CAR 19 at 21. 90 Sick Leave Case (Qld) (1972) 14 AILR 414. respect, paid personal/carer's leave is an extension of sick leave designed to assist employees in reconciling their employment and family responsibilities91. Procedural rules safeguard against "sickies". An employee taking paid personal/carer's leave must give the employer notice of the period or the expected period of the leave92 and, if required by the employer, must give the employer evidence that would satisfy a reasonable person that the leave is taken for a reason specified in s 97(a) or (b)93. By operation of s 99, "the employer must pay the employee at the employee's base rate of pay for the employee's ordinary hours of work" during whatever period the employee takes paid personal/carer's leave within the scope of the employee's accrued entitlement. The nature of the entitlement that appears when s 96(1) is read in combination with ss 97(a) and (b) and 99 was well-stated by Bromberg and Rangiah JJ in the decision under appeal. They described paid personal/carer's leave as "a statutory form of income protection ... provided by authorising employees to be absent from work during periods of illness or injury and requiring employers to pay employees as if they had not been absent"94. Illness and injury, it need hardly be said, tend to be random in their occurrence as, by definition, do unexpected emergencies. Effects of those contingencies on fitness for work tend in human experience to be felt more in days or parts of days than in hours or parts of hours. The entitlement to paid personal/carer's leave ensures that, if, when, and for so long as, illness, injury or unexpected emergency results in unfitness of an employee for work, the employee continues to receive the base rate of pay that the employee would have received had the contingency not occurred. Quantification of an entitlement of that nature in "days" not "hours" continues the practice of expressing entitlements to sick leave in terms of a specified number of "sick days" each year established with the first prescription of paid sick leave in an industrial award in 192295. In the century since then, as the 91 Family Leave Test Case (1994) 57 IR 121 at 145-147. 92 Section 107(2)(b) of the Fair Work Act. 93 Section 107(3)(a) of the Fair Work Act. 94 Mondelez Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2019) 270 FCR 513 at 540 [148] (original emphasis). 95 Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (1922) 16 CAR Full Bench of the Fair Work Commission observed in 2015, expressions of entitlements to sick leave have become "somewhat diverse"96. Expressing an entitlement in hours provides greater budgetary certainty for the employer. Budgetary certainty for the employer, however, corresponds to income insecurity for the employee. The choice between the two metrics is one of balance. The Workplace Relations Act as amended by the Workplace Relations Amendment (Work Choices) Act stated its principal object as being "to provide a framework for cooperative workplace relations which promotes the economic prosperity and welfare of the people of Australia" by means which included "ensuring compliance with minimum standards ... of ... employee entitlements"97. The Fair Work Act stated its object as being "to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians" by means which include "ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through the National Employment Standards"98. The difference is significant. The balance shifted. No reason has been shown to suppose that the change in the measure of the entitlement of an employee to paid personal/carer's leave from "hours" to "days" of leave was other than an advertent part of the rebalancing of interests that occurred upon the transition from "work choices" to "fair work". Of the choice between "days" and "hours", "days" fits more comfortably with the entitlement constituting a statutory form of income protection forming part of the "guaranteed safety net" created through the National Employment Standards. Fairness of the entitlement Recognition that paid personal/carer's leave protects an employee's receipt of a base rate of pay if, when, and for so long as the employee might happen to be unfit for work because of illness, injury or unexpected emergency also provides the answer to the suggestion that construing "10 days" to mean 10 periods each of 24 hours fails to meet the stated statutory objective of the National Employment Standards of ensuring "fair" conditions of employment because it leads to anomalies and inequities between employees. 96 RACV Road Service Pty Ltd v Australian Municipal, Administrative, Clerical and Services Union (2015) 249 IR 150 at 179 [81]. 97 Section 3(f)(i) of the Workplace Relations Act. 98 Section 3(b) of the Fair Work Act. The Minister seeks to highlight anomalies and inequities by positing hypothetical examples. Perhaps the most telling is that of a part-time employee who works five 7.6-hour days each week for five different employers. The employee would be able to take up to 76 hours of paid leave from each employer (amounting to 380 hours in aggregate) were the employee to suffer a long-term debilitating illness having worked in that pattern for more than a year. The example shows how an unvarying rule applicable in varying situations can have extreme applications, especially if the rule is stated in one metric and if its applications are measured in another metric. Construction is rarely advanced by reference to "distorting possibilities"99. The suggestion of anomalies and inequities is sufficiently illustrated by Mondelez's comparison of one of its actual employees who works 36 ordinary hours each week as five 7.2-hour days with another of its actual employees who works 36 ordinary hours each week compressed into three 12-hour shifts. The first employee's annual entitlement of 10 periods each of 24 hours amounts to 10 authorised absences each of 7.2 hours, equating to a total of 72 hours. The second employee's annual entitlement amounts to 10 authorised absences each of 12 hours, equating to a total of 120 hours. One employer. Two employees. Equal hours of work. Unequal hours of paid leave. What is fair about that? The answer is that to focus on the relative number of hours of paid leave is to miss the point of the entitlement. So is to focus on the relative lengths of the potential authorised absences from work or on the relative dollar values of the potential payments. Each employee has the same entitlement to receive that employee's base rate of pay for all work the employee is unfit to perform over the same number of days because of illness, injury or unexpected emergency. The income of each is equally protected. Conclusion For these reasons, I would dismiss each appeal. 99 cf Shaw v Minister for Immigration and Multicultural Affairs (2003) 218 CLR 28 at Edelman Introduction Ms Triffitt and Mr McCormack work for Mondelez Australia Pty Ltd, the appellant in the first mentioned appeal. They each work, on average, 36 hours a week in shifts of 12 hours. In simple terms, they are "shift workers" with their 36 hours of work performed in three shifts over three days. There are also "day workers" at Mondelez. Those day workers also work for 36 hours a week but if their hours are spread over five weekdays they will work for 7.2 hours each weekday. The Fair Work Act 2009 (Cth) provides that Ms Triffitt and Mr McCormack are entitled to up to two days of unpaid pre-adoption leave100. It provides that they are entitled to two days of unpaid carer's leave on permissible occasions101. It provides that they are entitled to two days of compassionate leave on permissible occasions102. It provides that they are entitled to five days of unpaid family and domestic violence leave in a 12 month period103. And in the provision with which these appeals are concerned, s 96(1), it provides that they are entitled to "10 days" of paid personal/carer's leave for each year of service with their employer. There was no dispute on these appeals that all of Mondelez's employees are entitled to each of the periods of leave of two days, two days, two days, and five days of work respectively. Mondelez also accepts that day workers with the hours described above are entitled to 10 days of paid personal/carer's leave for each year of service. But Mondelez submits that when the Fair Work Act provides for "10 days" of paid personal/carer's leave for shift workers with the hours of Ms Triffitt and Mr McCormack, it has the effect that they have a leave entitlement of the same number of hours as day workers (72 hours) but that given the length of their shifts this equates to a leave entitlement of only six days of work. At first blush, this appears to be a curious effect of the provision in s 96(1) that: "For each year of service with his or her employer, an employee is entitled to 10 days of paid personal/carer's leave." The effect of Mondelez's interpretation is that if a day worker or their child falls ill or needs care on 10 rostered days of work then the day worker is entitled to take paid personal/carer's leave for all of those 10 days. But if a shift worker like Ms Triffitt or Mr McCormack, or one of their children, falls ill or needs care on 100 Fair Work Act 2009 (Cth), s 85. 101 Fair Work Act, s 102. 102 Fair Work Act, s 104. 103 Fair Work Act, s 106A. Edelman 10 rostered days of work then they are entitled to take paid personal/carer's leave only for six of those days of shift work. Given the ordinary meaning of "days" it is unsurprising that the majority of the Full Court of the Federal Court of Australia baulked at the submission that "10 days" of leave entitlement for Ms Triffitt and Mr McCormack provided them with, in effect, an entitlement of only six days of leave. Without careful consideration of the operation of the paid personal/carer's leave scheme and without a close examination of the background context to the Fair Work Act, such a conclusion might come as a surprise to a reasonable reader of the Act in the position of Ms Triffitt and Mr McCormack or the Union which represents them. The apparent anomaly of Mondelez's interpretation, with 10 days of paid personal/carer's leave for day workers but only six days of paid personal/carer's leave for some shift workers, is lessened once it is appreciated that a shift worker like Ms Triffitt or Mr McCormack, with compressed hours of work and fewer days of work, will be less likely to fall ill and less likely to need to provide care on a day of work, although if they do need to do so then they will need to take more hours of leave on that day of work. Hence a shift worker with the same ordinary hours of work will need fewer days of leave but the same number of hours of leave to ensure the same "safety net" protection of income as a day worker. The anomaly then disappears when the full context of s 96(1) is considered, especially with its different history from the provisions for unpaid pre-adoption leave, unpaid carer's leave, and compassionate leave. When the words of s 96(1) of the Fair Work Act are examined in their full context, it becomes apparent that Mondelez's interpretation was that which was intended by Parliament. The duty of courts in the exercise of statutory interpretation The duty of courts is to give effect to the meaning of statutory words as intended by Parliament. In common with how all speech acts are understood, the meaning is that which a reasonable person would understand to have been intended by the words used in their context. One presumption, or inference based on common experience of legislative acts104, is that when Parliament uses words with a common or ordinary meaning then the words are intended to bear that ordinary meaning105. That presumption also reflects the expressed goal of parliamentary 104 Federal Commissioner of Taxation v Tomaras (2018) 265 CLR 434 at 466-468 105 Masson v Parsons (2019) 93 ALJR 848 at 856 [26]; 368 ALR 583 at 591, citing Cody v J H Nelson Pty Ltd (1947) 74 CLR 629 at 647, Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 305, 310, 321, 335, Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at 31 [4], 46-47 [47], Esso Australia Pty Ltd v Edelman drafting for clarity and familiarity in order to ensure the transparency and intelligibility of statute law106. That presumption can be further reinforced by another presumption, that words repeated in a statute are used with the same meaning107. Nevertheless, even when Parliament does not provide a specific definition of particular statutory words there are instances where Parliament will be understood not to have intended that those undefined statutory words should bear their ordinary meaning. For instance, the more that the ordinary meaning of the words would impair common law rights, and the more fundamental are those rights, the less likely it is that the words will be understood to have been intended to bear their ordinary meaning and the more unusual the meaning of the words that can be countenanced as having been intended108. More unusual meanings of words can also be countenanced in a range of more common circumstances, and will be likely to be so countenanced where several of these circumstances exist in combination: where the ordinary meaning of the words is contrary to the scheme of the legislation; where the ordinary meaning of the words runs contrary to the legislative history; and where the ordinary meaning of the words is inconsistent with the expressed understanding of the legislative operation in extrinsic materials. None of these matters of context has any greater a priori weight than any other. Consistently with this approach, courts have sometimes interpreted statutory words in a manner contrary to their ordinary meaning in order to give effect to parliamentary intention. For instance, the Privy Council, dismissing an appeal from this Court, held that the word "arrangement" in the former s 260 of the Income Tax and Social Services Contribution Assessment Act 1936 (Cth) does Australian Workers' Union (2017) 263 CLR 551 at 582 [52] and Maunsell v Olins [1975] AC 373 at 382. 106 Office of Parliamentary Counsel, Plain English Manual (2016) at 17 [66]. 107 Tabcorp Holdings Ltd v Victoria (2016) 90 ALJR 376 at 387 [65]; 328 ALR 375 at 389, citing Registrar of Titles (WA) v Franzon (1975) 132 CLR 611 at 618, Kline v Official Secretary to the Governor-General (2013) 249 CLR 645 at 660 [32] and Selig v Wealthsure Pty Ltd (2015) 255 CLR 661 at 673 [29]. 108 See Mann v Paterson Constructions Pty Ltd (2019) 93 ALJR 1164 at 1200 [159]; 373 ALR 1 at 41-42, citing Bropho v Western Australia (1990) 171 CLR 1 at 18, Coco v The Queen (1994) 179 CLR 427 at 437, Oates v Attorney-General (Cth) (2003) 214 CLR 496 at 513 [45], Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543 at 553 [11] and Lee v New South Wales Crime Commission (2013) 251 CLR 196 at 217-218 Edelman not bear the ordinary meaning of an initial plan but includes "all the transactions by which [the plan] is carried into effect"109. This Court held that the word "interview" in former s 570D of the Criminal Code (WA) does not bear the ordinary meaning of a formal or structured meeting110 but means "any conversation between a member of the Police Force and a suspect", including an informal conversation initiated by the suspect111. And this Court held that the words "otherwise mutilates" in s 45(1)(a) of the Crimes Act 1900 (NSW) do not bear the ordinary meaning of injury or damage that is more than superficial112 but instead have an open-textured meaning of engaging, otherwise, in the undefined practice of female genital mutilation113. The ultimate question in every case is the meaning of the words, in all their context, as they were intended by Parliament. Of course, the prolific references by courts to parliamentary intention are not to a subjective intention of any or all of the members of Parliament. Rather, they are shorthand to describe the same general approach that people take to the understanding of language. Words of a statute are not a secret code for lawyers. They are enacted to be read and understood by reasonable, informed people using their everyday tools of language. This involves considering what was intended by the speaker, here the construct of Parliament. Consideration of a speaker's intention requires the speaker's purpose and the context of the spoken words to be considered at the same time as their "ordinary meaning". So too with the interpretation of words enacted by a Parliament114. Ordinary meaning, and usage of words in the legislation with consistent meaning, are therefore only two indicia, albeit usually very powerful indicia, of the intention of the Parliament. The interpretation of "10 days" in s 96(1) The approach of the majority of the Full Court of the Federal Court has considerable force because the same word ("days") is used in the Fair Work Act in provisions that appear before and after the relevant provision (s 96(1)) with its ordinary meaning. The ordinary meaning of a "day" for a worker is a day of work. 109 Newton v Federal Commissioner of Taxation (1958) 98 CLR 1 at 7-8; [1958] AC 110 Carr v Western Australia (2007) 232 CLR 138 at 176 [120]-[121]. 111 Carr v Western Australia (2007) 232 CLR 138 at 158 [62]. 112 R v A2 (2019) 93 ALJR 1106 at 1130-1131 [123]; 373 ALR 214 at 242, referring to A2 v The Queen [2018] NSWCCA 174 at [521]. 113 R v A2 (2019) 93 ALJR 1106 at 1139 [165]; 373 ALR 214 at 254. 114 CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408. Edelman However, the ordinary meaning of "days" for a worker, namely "days of work", even combined with the usage of "days" with its ordinary meaning in other provisions of the Fair Work Act, does not reflect the intention of Parliament in its use of "10 days" in s 96(1). Rather, a reasonable reader, informed by the full context and history of s 96(1), would conclude that the expression was intended to have a less ordinary meaning, aligning the meaning of s 96(1) with the meaning of its predecessor provision in s 246 of the Workplace Relations Act 1996 (Cth). The immediate legislative context of s 96(1) is the first significant indicator that the expression "10 days" does not bear its ordinary meaning. The ordinary meaning of "10 days" in the leave entitlement in s 96(1) is not consistent with the scheme of: (i) the manner in which the entitlement accrues (s 96(2)); (ii) the payment for the entitlement (s 99); and (iii) the cashing out of the entitlement The provisions concerning accrual, payment, and cashing out of the leave entitlement are part of the same scheme of implementing the entitlement. They must all have the same operation. Each of these provisions is dependent upon calculations based upon an employee's ordinary hours of work, not upon days of work with potentially variable shift lengths. These provisions could not have a harmonious operation if the overall value of the leave entitlement were dependent upon the length of the shifts on discrete (unknown) days upon which it might be or might have been taken. For instance, s 101(2)(c), which depends upon "leave that the employee has forgone", can only sensibly be calculated by reference to ordinary hours of work for employees with variable shifts. The alternative suggested by the first to third respondents to each appeal, namely that the employee can choose the days of work containing the most hours worked as the days in which leave is to be treated as forgone, has no support in s 101. Indeed, an employer could equally assert that the days of work in which leave is to be treated as forgone are those containing the least hours worked. It is, to say the least, extremely artificial to treat the scheme of Subdiv A of Div 7 of Pt 2-2 as requiring the entitlement to leave to be premised on a different unit of time from the accrual, payment, or cashing out of that leave. This artificiality points to the strong likelihood that Parliament did not intend to depart from the scheme adopted in the predecessor Workplace Relations Act, where the entitlement to paid personal/carer's leave was expressly dependent upon calculations based upon leave which accrued and was paid or cashed out according to an employee's ordinary hours of work. The legislative history of, and extrinsic materials to, the Fair Work Act make it even clearer that the provision for paid personal/carer's leave in s 96(1) of the Fair Work Act was intended to be a simplification of, rather than a substantial departure from the operation of, the predecessor provision in s 246 of the Workplace Relations Act. For a start, the high level expression of the objects of each Act is similar. No party to these appeals suggested that the object of the Edelman Workplace Relations Act, including "compliance with minimum standards ... [of] employee entitlements"115, differed in any relevant respect from the object of the Fair Work Act, including "ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through the National Employment Standards"116. Further, the Explanatory Memorandum to the Fair Work Bill 2008 (Cth) confirmed that the National Employment Standards "will not change the quantum of the entitlement to personal/carer's leave" from that provided in the Workplace Relations Act117. This is also reinforced by the statutory illustration of the operation of s 246(2) of the Workplace Relations Act: in the example, an employee whose nominal hours are 38 hours per week accrues 76 hours of paid leave annually. The example focuses upon 38 hours worked over a week rather than the spread of those hours on days of the week. The example thus equates "10 days" (being equivalent to an average fortnight) to "76 hours" irrespective of the actual spread of the hours worked by the employee in a week. By contrast, if the words of s 96(1) of the Fair Work Act were given their ordinary meaning there would be a substantial change in the operation of the provision according to the spread of hours worked during a week by an employee. This change would include new, increased entitlements to paid personal/carer's leave for employees with multiple employers. Compared with a person who works the same hours for one employer, the part-time worker in the common circumstance of having two employers would now have double the entitlements, or triple the entitlements when working for three employers. The ordinary meaning would also provide new entitlements for employees who work part-time for one day a week to be absent for up to two and a half months annually on paid personal/carer's leave. If the words "[f]or each year of service ... 10 days of paid personal/carer's leave" in s 96(1) are given the same meaning as the predecessor provision, s 246 of the Workplace Relations Act, then they mean "[f]or each year of service ... 1/26 of the employee's ordinary hours of work over that year of service as paid personal/carer's leave". The provision for an entitlement of "10 days" with progressive accrual "according to the employee's ordinary hours of work" is merely a simpler way of expressing the effective equivalent in the predecessor provision, 1/26 of a year, which accrued in four week periods in that earlier provision. Although rostered overtime outside an employee's "ordinary hours of 115 Workplace Relations Act 1996 (Cth), s 3(f)(i). 116 Fair Work Act, s 3(b). 117 Australia, House of Representatives, Fair Work Bill 2008, Explanatory Memorandum at xi. Edelman work"118 would not be included in paid personal/carer's leave, the employee would usually be able to refuse to work overtime on a day of paid personal/carer's leave, for a reason such as illness, where overtime is scheduled. For instance, s 62(1) prohibits an employer from requiring a full-time employee to work more than 38 hours, with hours of leave counted towards that total119, unless the additional hours are reasonable. The Explanatory Memorandum is also inconsistent with the ordinary meaning of "10 days", which ordinary meaning would result in a different entitlement to paid personal/carer's leave when measured in terms of hours when day workers are compared with shift workers. The Explanatory Memorandum provided that the Act would ensure "that the amount of leave accrued over a period is not affected by differences in the actual spread of an employee's ordinary hours of work in a week" and continued as follows120: "Therefore, a full-time employee who works 38 hours a week over five days (Monday to Friday) will accrue the same amount of leave as a full-time employee who works 38 ordinary hours over four days per week. Over a year of service both employees would accrue 76 hours of paid personal/carer's leave." In view of the full context of s 96(1), the different meaning of the word "days" in s 96(1) from the provisions in the Fair Work Act concerning unpaid pre-adoption leave, unpaid carer's leave, and compassionate leave is readily explicable as a simplification of the formula of 1/26 of the ordinary hours of work over a year. That formula differed in the Workplace Relations Act from the use of "days" in the Workplace Relations Act in relation to unpaid pre-adoption leave121, unpaid carer's leave122, and compassionate leave123. The only leave provision in Div 7 of Pt 2-2 of the Fair Work Act which refers to "days" which was not present in the Workplace Relations Act is the 118 As defined in Fair Work Act, s 20. 119 Fair Work Act, s 62(4). 120 Australia, House of Representatives, Fair Work Bill 2008, Explanatory Memorandum at 64. 121 Workplace Relations Act, s 299. 122 Workplace Relations Act, s 250. 123 Workplace Relations Act, s 257. Edelman entitlement to five days of unpaid family and domestic violence leave in a 12 month period124. When the entitlement to five "days" of unpaid family and domestic violence leave was introduced into the Fair Work Act, subsequent to the existence of s 96(1), s 106E was also inserted125 as a provision that "makes clear" that a "day of leave" for the reasons of family or domestic violence "is designed to be the same as what constitutes a day of leave for the purposes of pre-adoption leave (in section 85), unpaid carer's leave (in Subdivision B of Division 7) and compassionate leave (in Subdivision C of Division 7)"126. Whilst it is highly unlikely that s 106E could have been intended to have the effect of changing the meaning of "day" in s 96(1), the lack of any suggestion in s 106E that a "day of leave" was the same as that which constituted a day of paid personal/carer's leave militates against any suggestion that a "day" in s 106A was intended to have the same meaning as a "day" in s 96(1). Conclusion The conclusion, therefore, which appears counter-intuitive from the ordinary meaning and impression that a reasonable reader might reach from first reading the legislation, and which is contrary to my initial view prior to examination of the full context of s 96(1), is that the provision of a "10 day" entitlement for Ms Triffitt and Mr McCormack permits only the same six day entitlement for the shift hours that they work to which they were entitled under the Workplace Relations Act. That is the only conclusion that can give effect to the meaning that a reasonable, informed reader would understand Parliament to have intended by the words used in their context. The appeals should be allowed. I would have made orders setting aside order 1 made by the Full Court of the Federal Court of Australia and in its place declaring that: "The expression '10 days' in s 96(1) of the Fair Work Act 2009 (Cth) means 1/26 of the employee's ordinary hours of work in the year of service with their employer." The effect of this declaration is that for every year of service an employee is entitled to an amount of paid personal/carer's leave equivalent to 1/26 of that employee's ordinary hours of work over the year, which is the same as their ordinary hours of work in an average fortnight or a 10 standard working day period. The focus upon the period of a year in the declared meaning, consistently with the opening words of s 96(1), accommodates employees who have different hours of work from fortnight to fortnight. Since the declaration proposed by Kiefel CJ, 124 Fair Work Act, s 106A. 125 By the Fair Work Amendment (Family and Domestic Violence Leave) Act 2018 (Cth). 126 Australia, House of Representatives, Fair Work Amendment (Family and Domestic Violence Leave) Bill 2018, Explanatory Memorandum at 6 [41]. Edelman Nettle and Gordon JJ will have the same legal effect in practice, I agree with the orders proposed by their Honours. |
HIGH COURT OF AUSTRALIA ROBYN VANESSA LAYBUTT APPELLANT AND GLOVER GIBBS PTY LIMITED T/AS BALFOURS NSW PTY LIMITED RESPONDENT Laybutt v Glover Gibbs Pty Ltd t/as Balfours NSW Pty Ltd [2005] HCA 56 29 September 2005 ORDER Appeal allowed. Set aside the judgment and orders of the Court of Appeal of the Supreme Court of New South Wales dated 3 March 2004 and in place thereof order that the appeal to that Court be dismissed. The respondents to pay the costs of the appeal to the Court of Appeal of the Supreme Court of New South Wales and of the appeal to this Court. On appeal from the Supreme Court of New South Wales Representation: M J Neil QC with R I Goodridge for the appellant (instructed by Firths βThe Compensation Lawyers) B W Walker SC with R C Beasley for the respondent (instructed by Leigh Virtue & Associates) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Laybutt v Glover Gibbs Pty Limited t/as Balfours NSW Pty Limited Negligence β Duty of care β Employer and employee β Breach β Where employee requests instructions β Employer's duty to provide instructions. Practice and procedure β Civil trial by jury β Whether trial judge should have entered a directed verdict β Sufficiency of evidence to sustain verdict β Application of common knowledge and experience by jury to question of negligence β Circumstances justifying reversal of a jury's verdict by appellate court. GLEESON CJ. I agree that the appeal should be allowed for the reasons given by Gummow, Callinan and Heydon JJ, and that consequential orders should be made as they propose. A question for judgment at the trial was the reasonableness of the response, by the representative of her employer, to the appellant's requests for information as to how to carry out a particular procedure. The response was, in effect, that she should work it out for herself. She suffered an injury in the process of trying. There might be some workplace procedures for which that could be an adequate response. There are others for which it clearly would not. In the present case, the jury heard evidence of the nature of the task, which involved assembling an item of equipment. Having been told what the task was, the jury were well able to decide whether it was reasonable of an employer to leave an employee to work out for herself how to perform it. That is what juries are for. McHugh McHUGH J. The only issue in this appeal is whether there was evidence upon which a jury could reasonably find that the appellant suffered injury as the result of the respondent's negligence. The respondent had employed the appellant as a pastry cook for about six weeks when her "team leader" told her to reassemble a machine used to make doughnuts. Some parts of the machine had just been washed. The machine was several feet high and had five cylinders in a line. Inside each of these cylinders was a smaller cylinder. Behind the top of each inner cylinder were two lugs. When fitted into grooves on the outer cylinder, the lugs joined the inner and outer cylinders together. The outer cylinder had sharp edges and, as a result of washing, was slippery. The appellant told the team leader that she did not know how to reassemble the machine. The team leader replied: "Just give it a go." The appellant received no further help from the team leader or any other employee of the respondent. She received no oral instructions, no instruction manual and no demonstration as to how to perform the task. The production manager of the respondent testified that the response of the team leader was not a "proper or appropriate induction1 β proper appropriate task specific training". After the team leader's direction, the appellant commenced to reassemble the machine. In the course of doing so, she suffered injury to her finger and arm when an outer cylinder slipped and fell on her right hand. In the District Court of New South Wales, a jury found that the appellant had been injured as the result of the negligence of the respondent. The jury assessed her damages at $471,201 plus costs. However, the Court of Appeal of the Supreme Court of New South Wales set aside the appellant's verdict and entered a verdict for the respondent. The Court of Appeal held that there was no evidence of negligence upon which a jury could reasonably find for the appellant. The Court of Appeal held that there was no evidence that the respondent should have given the appellant instructions or what they should have been or whether, if given, the appellant would have followed them and, if she had followed them, whether they would have avoided her injury. In my opinion, it was open for the jury, acting reasonably, to find that the appellant sustained injury as a result of the respondent's negligence. With great respect to the learned judges of the Court of Appeal, the jury's verdict for the appellant was hardly surprising. Indeed, special leave to appeal was granted β although the case turned on its own facts β because it was strongly arguable that In the context, "induction" may mean "instruction". McHugh the setting aside of the appellant's verdict constituted a miscarriage of justice in the particular circumstances of the case. A reasonable jury could find that the size of the machine, the sharp edges and slipperiness of the outer cylinders, the appellant's inexperience, and her request for guidance convincingly established that the injury she suffered was reasonably foreseeable. Nearly 50 years ago, this Court pointed out that, in a negligence action, a jury does not have to determine whether the defendant should reasonably have foreseen "the precise manner" in which an injury occurred. The jury "ha[s] to consider only whether it was reasonable to foresee in a general way the kind of thing that occurred"2. However, as I pointed out in Swain v Waverley Council3, to succeed in a negligence action, the plaintiff must do more than prove a reasonably foreseeable risk of injury. To succeed, the plaintiff must also show that the exercise of reasonable care by the defendant would have avoided, or reduced the extent of, the injury. In cases concerned with operations, processes, systems and machinery that are complex, the jury will seldom be able to find for the plaintiff unless the plaintiff tenders evidence as to the precautions that were reasonably available to the defendant and which would have avoided the plaintiff's injury. As Barwick CJ pointed out in Maloney v Commissioner for Railways (NSW)4, evidence of the practicability of a proposed alternative course or safeguard "is essential except to the extent that [it is] within the common knowledge of the ordinary man." The slipperiness and sharp edges of the outer cylinder made it a potential source of danger unless the assembler knew of the danger and acted carefully in assembling the machine. But, despite the danger, reassembling the machine was not a complex process or operation. It could be done safely if the assembler, being conscious of the risk, held the cylinders firmly enough to prevent them slipping. respondent's cross-examination of the appellant. It was put to her that "it was just simply a situation where you just didn't hold [the cylinder] tight enough"? If the team leader had pointed out the danger and told her to hold the cylinders firmly or given her a demonstration as to the correct way of doing it, it seems unlikely that her injury would have occurred. At all events, a reasonable jury, using its experience and knowledge of the world, could find that a reasonable employer implicitly conceded by So much was the 2 Caledonian Collieries Ltd v Speirs (1957) 97 CLR 202 at 222. (2005) 79 ALJR 565; 213 ALR 249. (1978) 52 ALJR 292 at 293; 18 ALR 147 at 148. McHugh would have given such instructions and, if they had been given, the injury would not have occurred. The production manager had no doubt that the team leader's response was plainly inadequate. The jury could reasonably interpret his evidence as implying that instructions must be given to one of the respondent's workers who tells a supervisor that she does not know how to assemble this particular machine. His evidence denies any suggestion that the task was so simple that even an inexperienced worker needed no instruction. Hence the present case cannot be equated with Electric Power Transmission Pty Ltd v Cuiuli5, where this Court held that an employer was not negligent in failing to instruct the caretaker of a construction camp how to use a tomahawk to cut up pieces of light bush timber for use in a fuel stove. The failure of the appellant to tender evidence of the precautions that, if taken, would probably have avoided her injury was a surprising and, by any standard, a risky course of forensic conduct. But despite that failure, it was open to the jury, exercising its commonsense and knowledge of the world, to find that the respondent was guilty of negligence in failing to give the appellant instructions or a demonstration concerning the reassembly of the machine. Order The appeal should be allowed. The judgment and orders of the Court of Appeal should be set aside. In their place should be an order that the appeal to that Court be dismissed. The respondent should pay the appellant's costs in this Court and in the Court of Appeal. (1961) 104 CLR 177. Callinan GUMMOW, CALLINAN AND HEYDON JJ. Issue The question that this appeal raises is whether, in circumstances in which an employee vainly sought instructions from her employer how to perform an apparently simple task, there was sufficient evidence to sustain a verdict by a jury of negligence against the employer. The facts The appellant is a pastry cook. She was 30 years of age in September 1999 when she was employed by the respondent at its factory in Sydney. She had been employed there for about six weeks. On 12 September 1999 she was required, for the first time, to reassemble a machine used to make doughnuts after some parts of it had been washed. She had seen other employees doing this but there had been no occasion for her to note how the work should be done. She told the "team leader" who asked her to undertake the reassembly that she did not know how it was to be done. His response was: "Just give it a go". She was provided with neither supervision, gloves, a manufacturer's manual of instructions for the reassembly of the machine, nor, as might perhaps have sufficed, a practical demonstration of a safe way of carrying out the work. It is unnecessary to describe the machine in any greater detail than this. Part of it consisted of a line of five cylinders. There was a smaller cylinder inside each of these. There was a "U" piece behind the top of each inner piece which had two bolts or lugs protruding from it. These lugs had to be manoeuvred into grooves on the outer cylinder in order to join the two cylinders together. The larger, outer one had sharp edges. Because they had recently been washed the cylinders were slippery. As the appellant was attempting to set up one of the sets of two cylinders, the large, outer one slipped and fell upon the small finger of her right hand. It is at least possible that she had already safely set-up one or more of the sets on the machine safely immediately before this happened. She suffered injury affecting not only her finger but also her arm. On subsequent occasions she was able to reassemble the machine without mishap. The trial The appellant sued the respondent in negligence in the District Court of New South Wales. She alleged that the respondent was negligent, in failing: to advise, adopt, implement and enforce a safe system of work; to provide adequate instructions and training; properly to supervise the appellant in the performance Callinan of her work; properly to clean and dry the parts to be reassembled; to heed the appellant's warnings that she was unskilled in the task required of her; to provide manufacturer's instructions for the safe cleaning and reassembly of the machine; and, to provide protective gloves so as to reduce the risk of injury. It was implicit in the respondent's pleading of contributory negligence that instructions, and possibly the provision of gloves were called for: "The [appellant] was negligent in that she: failed to carry out her duties in accordance with instructions; failed to carry out her duties in a safe manner; (iii) failed to have any or any proper regard for her own safety; failed to wear gloves in accordance with instructions." The action came on for hearing before Phegan DCJ and a jury. The appellant's account of the events leading up to the suffering of injury was substantially unchallenged. Indeed it is not entirely clear what the respondent's defence, other than to deny any need for instructions, was, particularly as it chose, or was unable to call little relevant evidence on this issue. One witness whom it did call however was its production manager who gave these answers in cross-examination: "Q. On no occasion prior to this accident did you personally direct the [appellant] in using any sort of gloves one way or the other, when assembling or disassembling machinery, did you? Q. Mrs Brown, I'm sorry to interrupt again, but I just want to be sure I understand, you did instruct Mrs Laybutt to wear gloves after this happened? Yes, I spoke, yes. But you have now explained that the main purpose of the gloves that you had available were for personal hygiene; is that right? Yes. Callinan I don't quite understand the connection between having to wear gloves after the accident and the gloves having their main purpose as hygiene, what was the connection? For probably to have that little bit of protection. If you assume that when Mrs Laybutt said to the supervisor 'I don't know how to assemble the doughnut machine', the response was words 'just try and work it out for yourself', you wouldn't consider that as proper or appropriate induction β proper appropriate task specific training, would you? Definitely not." At its highest the respondent's case at the trial on contributory negligence seems to have been that the appellant was maladroit in carrying out the task; as it was put in cross-examination, that "... it was just simply a situation where you just didn't hold [the cylinder] tight enough ...?" The application for a directed verdict The respondent applied for a verdict by direction at the close of the evidence. The trial judge summarized the respondent's submission on that application as follows: "The basis of this application is that, as [Counsel for the respondent] submitted, there is no evidence forthcoming from either the [appellant] herself or from any other independent source as to what the instructions should have been in terms of what the [appellant] should have been warned against. That, along with other matters, [Counsel for the respondent] submitted, was a serious and indeed fatal flaw in the [appellant's] case. Further, it was submitted, equally fatal was the absence of any evidence as to whether the instructions, whatever they may have been, would have made any difference. In this regard [Counsel for the respondent] referred in particular to the evidence from the [appellant] herself that she was able to return to work shortly after the injury, and continue to carry out this particular job, including the reassembly of the doughnut machine, without any further adverse incident. In those circumstances it was submitted there was proof from the [appellant's] own actions that no instructions of any particular kind were necessary in order to establish a safe system of work in the required sense." Callinan His Honour correctly directed himself as to the way in which he was bound to deal with the application: "There is no doubt whatsoever that the [appellant's] case would have been greatly assisted and indeed strengthened by evidence of the sort to which [Counsel for the respondent] referred, for example, evidence that such incidents had occurred on earlier occasions and the [respondent] had done nothing to appropriately respond to them; evidence that others who assembled the machine, were aware of the dangers of doing it in the manner in which the [appellant] appears to have done it, and I underline the word 'appears', because that is another aspect of the [appellant's] evidence which is far from clear. Evidence of that kind would, without any doubt, have added greatly to the [appellant's] case and indeed I have no doubt if there had been evidence of that kind, this application would not have been made." In rejecting the application his Honour said this: "What the jury are entitled also to infer and this, in my view, does not take them into the realm of conjecture in any sense of that term, is that if the [appellant's] evidence is accepted, and I am entitled to assume that for the purpose of this application, certainly insofar as it does not conflict with any evidence from the [respondent], that this machinery had been in place for a number of years, that it had been used extensively by other employees, and indeed Mr Spackman [the "team leader"] in particular was very familiar with the way in which this machinery worked and with its process of assembly and disassembly. In other words, the [respondent] certainly was in a position to know at least as much about this equipment as the jury know. And they, therefore, have at their disposal a level of knowledge which enables them to make a judgment about what the defendant might have properly done by way of instructions given the sharp edge of the bottom of the outer cylinder and the fact that the assembly did involve the use of both hands at the same time, one holding one part, one holding the other. There is a basis on which it might reasonably be inferred that a person, either inexperienced or inadequately instructed in the process of assembly, might lose hold of one or other of the parts and that the consequence of that was a foreseeable risk that the hand of the person attempting to assemble the equipment, might be caught in the very place it was caught." Callinan The questions left to, and the answers relevantly given by, the jury were as follows: In respect of liability how do you find, for the [appellant] or for the [respondent]? For the [appellant]. Did the [appellant] cause or contribute to her injury through her failure to take reasonable care for her own safety? No." Subject to some statutory adjustments his Honour pronounced judgment for the appellant in accordance with the jury's verdict and assessment of damages, in the sum of $471,201.00 plus costs. The appeal to the Court of Appeal The respondent successfully appealed to the Court of Appeal of New South Wales (Meagher and Ipp JJA and Palmer J). The principal judgment was given by Meagher JA with whom the other members of the Court substantially agreed. His Honour said that the central difficulty for the appellant was her inability to prove the instructions that she claimed should have been given. Meagher JA said this6: "In other words, at the end of the day, his Honour left to the jury to decide: (a) whether the [respondent] should have given the [appellant] instructions, if so, what those instructions should have been, (c) whether those instructions, if given, have been followed, and (d) whether those instructions, if given and followed, would have averted an unexplained event. Not one word of evidence was given on any of these questions. No doubt, there are cases in which it is clear that some industrial malfunction has occurred, although the [appellant] cannot state precisely what it was. But the law has not, in any opinion, yet descended to the 6 Glover Gibbs Pty Ltd t/as Balfours NSW Pty Ltd v Laybutt [2004] NSWCA 45 at Callinan state where a judge may legitimately leave it to the jury to guess what the [appellant's] case should be. In my view the application for a verdict by direction should have been given." (Emphasis in original) The appeal to this Court Some observations of Gleeson CJ in the most recent civil jury case in this Court, Swain v Waverley Municipal Council7 are relevant to this appeal: "The resolution of disputed issues of fact, including issues as to whether a defendant's conduct conforms to a requirement of reasonable care, by the verdict of a jury involves committing a decision to the collective and inscrutable judgment of a group of citizens, chosen randomly. The alternative is to commit the decision to a professional judge, who is obliged to give reasons for the decision. In one process the acceptability of the decision is based on the assumed collective wisdom of a number of representatives of the community, properly instructed as to their duties, deciding the facts, on the evidence, as a group. In the other process, the acceptability of the decision is based on the assumed professional knowledge and experience of the judge, and the cogency of the reasons given. In the administration of criminal justice in Australia, the former process is normal, at least in the case of serious offences. In the administration of civil justice, in New South Wales and some other jurisdictions, in recent years there has been a strong trend towards the latter process. Originally, there were no procedures for appealing against the verdict of a jury, reflecting what Barwick CJ described as 'the basic inclination of the law towards early finality in litigation'8. He referred, in another case, to the move towards trial by judge alone in civil cases as an abandonment of 'the singular advantage of the complete finality of the verdict of a properly instructed jury'9. In many areas, the law seeks to strike a balance between the interest of finality and the interest of exposing and correcting error. In a rights-conscious and litigious society, in which people are apt to demand reasons for any decision by which their rights are affected, the trend away from jury trial may be consistent with (2005) 79 ALJR 565 at 567 [7]; 213 ALR 249 at 251. 8 Buckley v Bennell Design & Constructions Pty Ltd (1978) 140 CLR 1 at 8. 9 Edwards v Noble (1971) 125 CLR 296 at 302. Callinan public sentiment. Even so, decision-making by the collective verdict of a group of citizens, rather than by the reasoned judgment of a professional judge, is a time-honoured and important part of our justice system. It also has the important collateral advantages of involving the public in the administration of justice, and of keeping the law in touch with community standards." Nothing that his Honour said would justify a verdict unsupported by relevant evidence, or a perverse one, but his words do serve to emphasize that the system of trial by jury contemplates the use by its members of their knowledge and experience, including their knowledge of the workplace and what might reasonably be expected of employers and employees in it. The appellant's submissions in this Court may be shortly stated: that this was a case in which, as the trial judge held, there was sufficient evidence to go to the jury of a failure to give appropriate instructions. We would accept that submission. The evidence in question included that the appellant, a novice in the assembly of the machine, having asked how to do the work, was given neither instructions nor a demonstration of how it should be done but was simply told to "give it a go". The evidence also consisted of the production supervisor's emphatic opinion that the team leader's instruction to "give it a go" was inappropriate. Having regard to the slipperiness and sharp edges of the cylinders and the appellant's ignorance of how to do the work, the jury were entitled to find on that evidence that instructions should, in the circumstances have been given. It is unnecessary for this Court to identify any particular instructions that should have been given but it is likely that a demonstration, or an instruction to ensure that each cylinder was tightly gripped as it was moved into position would significantly have reduced the risk that was realized. Meagher JA in the Court of Appeal criticized an absence of evidence on the issue whether the respondent should have given the appellant instructions. The evidence of a vain request for them and the appellant's unfamiliarity with the task meet that criticism. They also meet the criticism that there was no evidence that instructions would, if given, have been followed. That a person expressly sought instructions is indicative of a real disposition to follow them if they were given. Such a request will often be more persuasive than an assertion, after the event, that the plaintiff would or would not have taken a particular course if he or she had known a certain fact or facts10. Furthermore, the event, the cutting of the 10 See Rosenberg v Percival (2001) 205 CLR 434 at 501-502 [214]. Callinan appellant's finger, was not an unexplained event. We are unable to accept that, armed with the instructions that she sought, the risk of injury to the appellant would not have been reduced. It may have been better for the appellant, but it was not necessary in this case, to formulate a precise form of instructions. As the trial judge said, it was the respondent who possessed the knowledge necessary for the safe assembly of the machine. Based on that it was for it to devise an appropriate form of instructions for an inexperienced employee explicitly asking for them. It could not satisfy that obligation by directing the appellant simply to "give it a go". These are the sorts of matters that are within the common knowledge and experience of jurors11. Jurors may not speculate. They may act only on evidence. But as members of the public, bringing with them a special awareness of such matters as the exigencies and demands of the workplace, their verdict may on occasions, be reached and justified on less evidence than might persuade a judge to reach the same conclusion. The respondent argued that the fact that the appellant had probably set up one or more of the cylinders immediately before she was injured, and had reassembled the machine on subsequent occasions without mishap proved that instructions were unnecessary. That was an argument that could be, and no doubt was forcefully put to the jury, but it is no more than an argument. That this may have happened did not necessarily mean that instructions could be dispensed with, particularly when, as here, the appellant had actually sought them. The repetition of the particular task, of putting two cylinders together, which the appellant may have done once or more, immediately before she was injured, is a factor capable of weighing as much in her favour as against it. The jury is likely to have treated it as the former. The subsequent safe performance of the work is of even less significance. Having injured herself once in doing the work, the appellant had had an opportunity to identify fully its complexities and risks and to be wary of them. It could not be suggested that she could only succeed if subsequently she suffered another similar injury in carrying out the work. It is true, as the respondent submits, that the onus lay upon the appellant throughout the trial. That does not mean however that the jury could not take into account in assessing the evidence upon which they were to reach their verdict, the sources from which each piece of it came and the capacity of those to adduce it, and further evidence12. The relevant knowledge, of the machine, and 11 See, for example, Hamilton v Nuroof (WA) Pty Ltd (1956) 96 CLR 18 and Nelson v John Lysaght (Australia) Ltd (1975) 132 CLR 201. 12 Vetter v Lake Macquarie City Council (2001) 202 CLR 439 at 454 [36]. Callinan the safe way to reassemble it before the appellant was injured, was entirely the knowledge of the respondent. One of its own witnesses, the production manager was critical of the response given on behalf of the respondent by the team leader to the appellant's request for instructions. Even if the case were equally balanced, or tilted in favour of the respondent until that point, that evidence, particularly in the absence of other evidence that instructions would have made no difference, or that this was a commonplace machine which anyone could reasonably assemble without instructions, taken with the appellant's evidence and the photographs of the machine and its parts, constituted a case sufficient to go to the jury. Indeed, on one view of the evidence, this was not a case of an absence of instruction accompanied by an appropriate warning by the "team leader", but rather a case of an instruction to the appellant to learn the new task by trial and error. Viewed in that way, the instruction to "give it a go" was negligent. This case can be compared with one in which a worker has complained of an unsafe system of work and suffered injury as a result of it. Such a complaint may be a decisive matter in a negligence case, whether heard by a judge alone or, as in this case, a judge and jury13. The denial of instructions specifically sought may constitute no less a failure on the part of an employer whose duty it is to provide a safe system of work than a failure to act on a complaint about a defective system by an employee. We would allow the appeal. The orders of the Court should be: Appeal allowed. Set aside the judgment and orders of the Court of Appeal of New South Wales dated 3 March 2004 and in place thereof order that the appeal to that Court be dismissed. The respondent to pay the costs of the appeal to the Court of Appeal of New South Wales and the appeal to this Court. 13 See the discussion of the relevance of complaints by employees in negligence claims in Glass, McHugh and Douglas, The Liability of Employers in Damages for Personal Injury, 2nd ed (1979) at 31. |
HIGH COURT OF AUSTRALIA ELECNET (AUST) PTY LTD (AS TRUSTEE FOR THE ELECTRICAL INDUSTRY SEVERANCE SCHEME) APPELLANT AND COMMISSIONER OF TAXATION RESPONDENT ElecNet (Aust) Pty Ltd v Commissioner of Taxation [2016] HCA 51 21 December 2016 ORDER Appeal dismissed with costs. On appeal from the Federal Court of Australia Representation A H Slater QC with B L Jones for the appellant (instructed by Mills Oakley) G J Davies QC with S J Sharpley QC and A T Broadfoot for the respondent (instructed by Australian Government Solicitor) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS ElecNet (Aust) Pty Ltd v Commissioner of Taxation Taxation β Unit trusts β Public trading trust β Where trust settled by deed β Where employers become members of industry severance scheme created by trust β Where members of scheme obliged to make payments to trustee β Where trustee credits payments to accounts in name of individual employees β Where trustee makes payment to employee upon termination of employment β Whether unit trust within meaning of Div 6C of Pt III of the Income Tax Assessment Act 1936 (Cth). Words and phrases β "beneficial interest", "ordinary acceptation", "prescribed trust estate", "public trading trust", "unit", "unit trust". Income Tax Assessment Act 1936 (Cth), ss 102M, 102P, 102R, 102S, 102T. KIEFEL, GAGELER, KEANE AND GORDON JJ. The appellant ("ElecNet") is the trustee of a trust known as the Electrical Industry Severance Scheme ("the EISS"). The trust was settled by deed in 1997 ("the Deed"). The parties to the the Deed are Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia ("the Sponsors"), and ElecNet. the National Electrical Contractors Association and Under the EISS, employers within the electrical contracting industry may become members of the scheme and, upon doing so, become obliged to make payments to ElecNet. These payments are credited by ElecNet to accounts in the name of each of the employees in respect of whom a payment is made. The Deed contemplates that, at such time as an employee's employment is terminated, ElecNet is to make a severance or redundancy payment to that employee. In this way, the EISS serves to protect, and allow the portability of, benefits payable to employees upon termination of employment. On 10 December 2012, ElecNet requested a private ruling from the respondent ("the Commissioner") as to whether the EISS is a public trading trust for the purposes of Div 6C of Pt III of the Income Tax Assessment Act 1936 (Cth) ("the ITAA"). A ruling that ElecNet is a public trading trust within Div 6C would afford ElecNet a fiscal advantage, in that, where Div 6C applies, s 102S provides that ElecNet is to pay tax on its net income, not at the rate otherwise applicable under the general provisions in Div 6 of Pt III of the ITAA relating to trusts (and in particular s 99A)1, but at a lower rate declared by Parliament2, being the same as the rate of tax payable by a company3. Income Tax Rates Act 1986 (Cth), s 12(9), which provides: "The rate of tax payable by a trustee in respect of the net income of a trust estate in respect of which the trustee is liable, under section 99A of [the ITAA], to be assessed and to pay tax is 45%." Income Tax Rates Act 1986 (Cth), s 25, which at the time of the ruling provided: "The rate of tax payable by a trustee of a public trading trust in respect of the net income of the public trading trust in respect of which the trustee is liable, under section 102S of [the ITAA], to be assessed and to pay tax is Income Tax Rates Act 1986 (Cth), s 23. On 20 December 2013, the Commissioner ruled that the EISS is not a public trading trust for the purposes of Div 6C, on the ground, among others, that the EISS is not a unit trust within the meaning of Div 6C. ElecNet objected to the ruling; the objection was disallowed by the Commissioner on 10 September ElecNet appealed to the Federal Court of Australia. The primary judge (Davies J) allowed the appeal, holding that the EISS was a unit trust for the purposes of Div 6C4. The Commissioner appealed to the Full Court of the Federal Court of Australia. The Full Court (Jessup, Pagone and Edelman JJ) allowed the Commissioner's appeal, holding that the EISS was not a unit trust for the purposes of Div 6C5. The only issue before this Court is whether the EISS is a unit trust for the purposes of Div 6C. ElecNet undertook no modest endeavour in seeking to argue that the rights created by the Deed in favour of employees are such as to give the EISS the character of a unit trust for the purposes of Div 6C. For the reasons which follow, ElecNet failed in its endeavour. The Full Court was right to conclude that the EISS is not a unit trust for the purposes of Div 6C. Division 6C Within Div 6C, the operative provision is s 102S. It provides: "The trustee of a unit trust that is a public trading trust in relation to a relevant year of income shall be assessed and is liable to pay tax on the net income of the public trading trust of the relevant year of income at the rate declared by the Parliament for the purposes of this section." Section 102M defines terms used in Div 6C. The expression "unit trust" is not defined, but the section provides: "unit, in relation to a prescribed trust estate, includes a beneficial interest, however described, in any of the income or property of the trust estate." 4 ElecNet (Aust) Pty Ltd (as Trustee for the Electrical Industry Severance Scheme) v Federal Commissioner of Taxation 2015 ATC ΒΆ20-507 at 17,124 [55]. 5 Federal Commissioner of Taxation v Elecnet (Aust) Pty Ltd (2015) 239 FCR 359 at The term "unitholder" is defined "in relation to a prescribed trust estate" to mean "the holder of a unit or units in the prescribed trust estate." The expression "prescribed trust estate" is defined to mean a "trust estate that is, or has been, a public trading trust in relation to any year of income." From these interrelated definitions, it is apparent that the trust estate of a unit trust is a prescribed trust estate if it is or has been a public trading trust in relation to a year of income. Section 102R states the requirements for a unit trust to be a public trading trust in relation to a year of income for the purposes of s 102S. These requirements are not in controversy in this appeal, but it is convenient to note here the requirement of s 102R that "the unit trust is a public unit trust in relation to the relevant year of income"6. This requirement directs attention to statutory context that bears significantly upon the meaning of the expression "unit trust" within Div 6C. In this regard, s 102P(1) provides that, for the purposes of Div 6C, a unit trust is a public unit trust in relation to a year of income if, at any time during the year of income: any of the units in the unit trust were listed for quotation in the official list of a stock exchange in Australia or elsewhere; any of the units in the unit trust were offered to the public; or the units in the unit trust were held by not fewer than 50 persons." In addition, s 102P(2) expands the scope of the concept of a public unit trust to include cases where the holder (or holders) of units holds a certain proportion of the beneficial rights in respect of the trust estate7. The provisions of s 102P are significant because they refer to units in a unit trust within Div 6C as items of commerce capable of being offered to, and acquired by, unitholders, whether by subscription or purchase. Further, these units are such as to entitle the holder to a beneficial interest in the income or property of a prescribed trust estate which is capable of being measured as a percentage of the beneficial entitlement to the income or property of the prescribed trust estate relative to the extent of the interests of other unitholders. These provisions support the view of the Administrative Appeals Tribunal in Re BERT Pty Ltd (As Trustee for the BERT Fund No 2) and Federal Commissioner Income Tax Assessment Act 1936 (Cth), s 102R(1)(a)(ii). Income Tax Assessment Act 1936 (Cth), s 102P(2)(a), (c). of Taxation8 that the expression "unit" in this context is speaking of the beneficial interest divided into "discrete parcels of rights." The argument advanced by ElecNet, both in this Court and below, fixes upon the inclusive definition of "unit" in s 102M. ElecNet's argument was, ultimately, that the credit for each dollar received from an employer by ElecNet and held by it in respect of an employee is a "unit", being that employee's beneficial interest in the trust estate of which ElecNet is trustee. A consideration of the material terms of the Deed provides no support for this argument. The terms of the Deed Recital A provides: "The Sponsors have agreed to establish a scheme to be known as the Electrical Industry Severance Scheme (the Scheme) to provide benefits to Workers who leave or change their employment in circumstances set out in this Deed." The relevant definitions are set out in cl 1 of the Deed. "Worker" is defined to mean: an Active Worker; an Inactive Worker; and an employee whose employer, being a Member, has agreed that the employee be treated as a worker for the purposes of this Deed by notifying [ElecNet] in such manner and form as may be prescribed by [ElecNet] from time to time, but does not include an Apprentice." "Active Worker" and "Inactive Worker" are defined in turn as having "the meaning determined by [ElecNet] for the purposes of this Deed." It is not apparent from the material in the record whether ElecNet has exercised its discretion to make determinations about the meanings of the terms "Active Worker" and "Inactive Worker" and, if determinations have been made, what meanings have been determined. (2013) 95 ATR 457 at 466 [23]. The term "Member β¦ in relation to a Worker" is defined to mean "the person employing him or her and in relation to a former Worker means the person or persons by which the former Worker was last employed." Clause 3 provides for employers to become Members of the Scheme, and cl 4 obliges Members to make contributions to the Scheme: "4.1 Each Member shall make Contributions to the Scheme in respect of each of the Member's Workers of such amount, or at such rate and on such basis: applicable from time to time under, or for the purpose of, the Agreement; or as may be agreed from time to time between the Member, [ElecNet] and the Sponsors (whether in relation to the Member's Worker generally or in relation to any particular category or class of the Member's Workers). 4.2 All Contributions made by a Member to the Scheme become part of the Trust Fund." The term "Trust Fund" is defined to mean "all moneys and other assets held by, or on account of, [ElecNet] under this Deed." Clause 6.1(a) of the Deed provides: "[ElecNet] shall credit to the Worker's Account of each Worker ... each Contribution made in respect of him or her pursuant to this Deed". The term "Worker's Account" is defined to mean, in respect of a Worker, the account established and maintained by ElecNet in its books of account under Clause 7.1 authorises ElecNet to debit from the Worker's Account of each Worker β in addition to any "Severance Payment" or other benefit β taxes, costs and expenses associated with the Scheme. Clause 7.1(e) provides that ElecNet may debit "such other amounts (if any) which [ElecNet] determines is appropriate or equitable to debit to the Worker's Account of the Worker." Clause 11 of the Deed provides for the application of the Trust Fund. Under cl 11.1, the Trust Fund shall, subject to the provisions of the Deed, be maintained exclusively for making Severance Payments to Workers under cl 8. Clause 11.2 requires ElecNet to establish a Worker's Account in its books of account in respect of each Worker and provides that each Worker's Account is to be debited and credited in accordance with cll 6, 7 and 8. Under cl 11.3, where a Worker "becomes entitled to a Severance Payment" ElecNet is obliged to deal with that entitlement in accordance with cl 8. Clause 8 provides for the payment of benefits to Workers. Clause 8.1 provides: "This Clause 8 only applies to a Worker who is an Active Worker." Clause 8.2 provides that ElecNet "shall pay" to a Worker a Severance Payment calculated in accordance with cl 8.3 upon the occurrence of one of the "Severance Events" set out in cl 8.2, namely termination of the Worker's employment, or the Worker's retirement or death. Clause 8.3 provides for "the Severance Payment payable to a Worker, or a person claiming through or under a Worker", of the amount standing to the credit of the Worker's Account. The timing of the payment depends upon the amount of the credit in the account and whether the Worker remains unemployed. Upon the making of the payment, a corresponding debit is to be made in the Worker's Account. Clause 12 provides that, where no contribution has been made in respect of a Worker for two years and ElecNet is unable to locate the Worker or his or her legal representative or dependants, the balance of the Worker's Account is "forfeited to the Scheme" and applied to the discharge of the reasonable administrative expenses of the Scheme. Clause 14 provides for the application of the income of the Trust Fund. Clause 14.1 sets out an exhaustive list of purposes for which ElecNet may make payments from the income of the Trust Fund. These purposes include the making of investments and payment of the reasonable expenses of administering the Trust Fund. Clause 14.1A sets out a list of payments that can be made by ElecNet to "other persons". Clause 14.2 provides for the capitalisation of income earned by investment. Amounts so capitalised may be distributed to Workers. Clause 23 provides for the winding up of the Scheme. Clause 23.4 contemplates the making of a distribution to Workers of an amount by reference to each Worker's Account, after payment of the expenses of winding up and "debts owing β¦ to the Sponsors, Members or Apprentices". Clause 9 contains the declaration of trust: "[ElecNet] declares that it will hold the Trust Fund on the trusts, and with and subject to, the powers and provisions contained in this Deed." Clause 17 provides in relation to the discretion vested in ElecNet: "Subject to any express provision to the contrary, every discretion vested in [ElecNet] shall be absolute and uncontrolled and may be exercised without [ElecNet] assigning any reason for its exercise and every power vested in it shall be exercisable in its absolute discretion and [ElecNet] shall have the like discretion in deciding whether or not to exercise any such power." The primary judge The primary judge held that Div 6C of Pt III of the ITAA9: "applies to trusts in which the beneficial interest in property or income of the trust is widely held, whether those beneficial interests be described as units or the trust described as a unit trust." Her Honour's conclusion was driven by her Honour's view of the significance of the inclusive definition of "unit" in s 102M. In this regard, her Honour said10: "Having regard to the definition of 'unit' in s 102M, it is not a complete answer for Division 6C purposes that the trust deed does not formally divide the beneficial interest in the trust fund into units. Nor, in light of the definition of 'unit', must 'unitholders' have a proportionate interest in the whole of the income or property of the trust estate." The primary judge held that the interest of each Worker under the EISS may be described as a beneficial interest in any property of the EISS. Her Honour said11: "It is unnecessary to give any definitive meaning to the expression 'beneficial interest' in Division 6C for present purposes because, in the 9 ElecNet (Aust) Pty Ltd (as Trustee for the Electrical Industry Severance Scheme) v Federal Commissioner of Taxation 2015 ATC ΒΆ20-507 at 17,122 [49]. 10 ElecNet (Aust) Pty Ltd (as Trustee for the Electrical Industry Severance Scheme) v Federal Commissioner of Taxation 2015 ATC ΒΆ20-507 at 17,122 [49]. 11 ElecNet (Aust) Pty Ltd (as Trustee for the Electrical Industry Severance Scheme) v Federal Commissioner of Taxation 2015 ATC ΒΆ20-507 at 17,124 [54]. present case, as the analysis of the Deed shows, the trust fund (ie the 'property of the trust') is held for the benefit of the persons in respect of whom the contributions are made by the employers and each worker has a discrete proprietary interest in the contributions paid in respect of them into the trust fund and standing to their worker's account, although not a present right to immediate payment. The proprietary nature of their interests is sufficient to give rise to 'beneficial interests in any property of the trust estate' within the meaning of 'unit' in s 102M." The Full Court In the Full Court, Jessup J held that the primary judge erred in treating the definition of "unit" in s 102M of the ITAA as expanding the scope of the expression "unit trust" in Div 6C12. Jessup J noted that the definition of "unit" in s 102M is confined to the case of "a prescribed trust estate"13, which is, in turn, associated exclusively with a "unit trust". In his Honour's view, the inclusive definition of "unit" does not expand the scope of a "unit trust", because the context in which the defined term "unit" is used in Div 6C confines the scope of the defined term. His Honour said that it was not "[a]s a matter of grammatical construction ... defensible" to accept that a trust which may not otherwise be a unit trust for the purposes of Div 6C could become one because of the definition, whether or not it related to a prescribed trust estate14. In an incisive observation, Jessup J said15: "There is no indication in [the ITAA] that Div 6C, or that s 102S in particular, uses the term 'unit trust' in anything other than its ordinary meaning. Central to that meaning is the requirement that the interests in the trust, whatever other characteristics they might have, be divided into units β or 'unitized'. There needs to be an irreducible, discrete, 'unit' or, as 12 Federal Commissioner of Taxation v Elecnet (Aust) Pty Ltd (2015) 239 FCR 359 at 13 Federal Commissioner of Taxation v Elecnet (Aust) Pty Ltd (2015) 239 FCR 359 at 14 Federal Commissioner of Taxation v Elecnet (Aust) Pty Ltd (2015) 239 FCR 359 at 15 Federal Commissioner of Taxation v Elecnet (Aust) Pty Ltd (2015) 239 FCR 359 at the Administrative Appeals Tribunal said in BERT, parcel of rights, by reference to which those interests are held, such that every person or entity with an interest in the trust will have one or more such units." In a joint judgment, Pagone and Edelman JJ held that, while a "unit" includes "a core concept of persons entitled to a beneficial interest in any of the income or property of the trust estate"16, this "significant indicator" must be "considered together with an assessment of whether the trust fits the functional description of a 'unit trust'."17 In this regard, Pagone and Edelman JJ focused upon the discretionary powers conferred on ElecNet under the Deed. Their Honours referred first to cl 8.1 of the Deed, which provides for payment upon a Severance Event only to a Worker who is an Active Worker. Their Honours said of this qualification18: "even if [ElecNet's] power in clause 8.1 were a fiduciary power, to be exercised honestly and in accordance with the purposes of the Trust Deed, it remains a power of appointment. [ElecNet], as Trustee, has the power to determine a criterion which would entitle a Worker to a contingent distribution. As Senior Counsel for [ElecNet] quite properly conceded, there must be content to the concept of an 'Inactive Worker'". Their Honours also noted that, under the Deed, "there is the discretion of [ElecNet] to vary the amount standing to the credit of a Worker's account." This is because cl 7.1(e) provides ElecNet with a power to debit "such other amount(s) (if any) which [ElecNet] determines is appropriate or equitable to debit to the 16 Federal Commissioner of Taxation v Elecnet (Aust) Pty Ltd (2015) 239 FCR 359 at 17 Federal Commissioner of Taxation v Elecnet (Aust) Pty Ltd (2015) 239 FCR 359 at 18 Federal Commissioner of Taxation v Elecnet (Aust) Pty Ltd (2015) 239 FCR 359 at Worker's Account"19. Finally, their Honours observed that cl 8.3 vests a discretion in ElecNet to determine the relevant amount of the payment20. Of these three discretions, their Honours said21: "[W]hen considered together, [they] have the effect that any interest that a Worker has under the EISS Deed is not capable of being described functionally as a unitised interest under a unit trust. The terms of the EISS Deed therefore depart so far from the functional concept of a unit trust, as reflected in the context and background to Div 6C, that the trust cannot be described as a 'unit trust' within Div 6C. The trust would not be a unit trust whether or not it is correct to describe the Worker's interest as a beneficial interest in the property of the trust estate." Their Honours' conclusion was framed in terms of a "functional understanding" of the nature of a unit trust. Their Honours said22: "Ultimately, it is neither necessary nor appropriate to attempt a conclusive definition of a 'unit trust' in this appeal for the purposes of Div 6C. It is sufficient to say that whether a trust is a 'unit trust' within the undefined meaning of that term in Div 6C requires the text of that Division (including its definitions) to be construed in light of a functional and descriptive understanding of the nature of a unit trust. It also requires a close examination of the particular trust deed in order to determine whether the functional nature of the trust operates as a unit trust. The text, context, and purpose of Div 6C illustrates that this examination will be assisted by consideration of the core concept of whether persons have (i) a beneficial interest in the income or property of the trust estate, which is (ii) capable of being functionally described as involving units. But even the absence of (i) will not necessarily be determinative." 19 Federal Commissioner of Taxation v Elecnet (Aust) Pty Ltd (2015) 239 FCR 359 at 20 Federal Commissioner of Taxation v Elecnet (Aust) Pty Ltd (2015) 239 FCR 359 at 21 Federal Commissioner of Taxation v Elecnet (Aust) Pty Ltd (2015) 239 FCR 359 at 22 Federal Commissioner of Taxation v Elecnet (Aust) Pty Ltd (2015) 239 FCR 359 at ElecNet's submissions ElecNet submitted that Pagone and Edelman JJ erred in proceeding upon a "functional" conception of a unit trust, rather than an understanding determined by the terms of Div 6C. The definition of "unit" in Div 6C is, it was said, inclusive and should not be constrained by "a priori" assumptions about the nature of a unit trust. ElecNet argued that Jessup J made the same error, and also that his Honour misunderstood the relevance of the concept of "prescribed trust estate" in Div 6C. ElecNet argued that the Full Court should have, first, identified the relevant terms of the Deed and their effect, and then construed the provisions of Div 6C, having regard to their text, context and purpose, to ascertain whether the trust estate falls within their operation. In this regard, ElecNet invoked the support of observations made by this Court in CPT Custodian Pty Ltd v Commissioner of State Revenue (Vic)23. ElecNet argued that, under the ITAA, between the categories of a "fixed trust" and a "discretionary trust" is a range of trusts under which beneficiaries have entitlements which are capable of delineation in numerical or proportional terms, or "units", and which either are contingent on the happening of a stipulated event or are accrued but liable to be defeated by event, circumstance or authorised act of a trustee. ElecNet argued that the EISS is neither a "discretionary trust" nor a "fixed trust", but falls within this undefined category of "unit trust". The Commissioner's submissions The Commissioner submitted that, as a matter of common usage, and having regard to the text and purpose of Div 6C, the expression "unit trust" refers to a recognised category of trust relationships developed as an alternative to a company as a structure for investors to pool their resources for investment or trading purposes24. It was said that the purpose of Div 6C is to treat unit trusts engaged in trading activities as if they were companies for the purposes of 23 (2005) 224 CLR 98 at 109-110 [15]; [2005] HCA 53. 24 Elders Trustee and Executor Co Ltd v E G Reeves Pty Ltd (1987) 78 ALR 193 at income tax. This treatment was said to accord with the common understanding of a unit trust as resembling "companies in function"25. The Commissioner submitted that the EISS is not a unit trust within the meaning of Div 6C for several reasons. First, the beneficial interest in the Trust Fund is not divided into units (however described). Secondly, the various rights and entitlements created in Workers by the Deed are disparate in nature and quantity: for the most part they are dependent upon the exercise of a discretion by ElecNet in favour of a particular identified individual Worker. Thus, the rights of Active Workers under cl 8 of the Deed are not the same as, or even analogous to, the rights of the holder of units in a unit trust, because the designation of a person as an Active Worker for the purposes of cl 8 depends on ElecNet's determination of the meaning of Active Worker in respect of each individual who is a candidate for a Severance Payment; and further, the quantum of a Worker's payment under cl 8 depends upon matters peculiar to that person (for example, the amount of contributions paid on the person's behalf). Finally, the rights dealt with by cl 8 do not relate to the whole of the Trust Fund; ElecNet's power to make distributions out of the Trust Fund is dealt with by various clauses (including cll 13.4, 14.1, 14.1A, 14.2 and 23.4) which authorise the disbursement of the trust estate otherwise than by way of a Severance Payment to a Worker. There is force in these submissions. The Commissioner also submitted that, by reason of the broad discretions conferred upon ElecNet by the Deed, any given Worker does not have a beneficial interest in any of the income or property of the trust estate within the meaning of the definition of "unit" in s 102M. The Commissioner argued that the primary judge erred in holding that the Workers have a "discrete proprietary interest in the contributions paid in respect of them"26, because unless and until the matters required for an entitlement under cl 8 of the Deed have occurred, including the exercise of discretions by ElecNet, the Worker does not have a beneficial interest "in" any item of income or property of the EISS. It was said that any entitlement to a Severance Payment that may arise under cl 8 is not an entitlement to the contributions paid in respect of the Worker or any part of them, but to an amount payable out of the capital of the Trust Fund calculated by 25 Austin and Ramsay, Ford, Austin and Ramsay's Principles of Corporations Law, 16th ed (2015) at 21 [1.360]. 26 ElecNet (Aust) Pty Ltd (as Trustee for the Electrical Industry Severance Scheme) v Federal Commissioner of Taxation 2015 ATC ΒΆ20-507 at 17,124 [54]. reference to, among other things, an amount standing to the credit of the Worker's Account and the exercise of ElecNet's discretion to make that payment. ElecNet countered this latter submission, arguing that the discretion conferred on it as trustee of the EISS is fiduciary and cannot be exercised capriciously so as to defeat a Worker's interest in the Trust Fund27. Any discretion conferred on ElecNet by the Deed would have to be exercised for the proper purposes of the trust, and not arbitrarily. Accordingly, with respect to cl 8.1 of the Deed, there is no basis on which ElecNet could properly decline to classify the employee as an Active Worker entitled to benefits unless the Worker is unidentifiable, as contemplated by cl 12. Further, ElecNet argued that cl 7.1(e) of the Deed is a direction to allocate the burden of expenses, and not a power to vary the entitlements of a Worker adventitiously. The appeal may be determined in the Commissioner's favour without coming to a concluded view upon this argument. On any view of the interest created by the Deed in favour of a Worker, the effect of the Deed is such that the interest so created is not cognisable as a unit in a unit trust for the purposes of Div 6C. The effect of the Deed In CPT Custodian28, upon which ElecNet relied, it was said that: "a priori assumptions as to the nature of unit trusts under the general law and principles of equity would not assist and would be apt to mislead. All depends, as Tamberlin and Hely JJ put it in Kent v SS Maria Luisa [No 2]29, upon the terms of the particular trust. The term 'unit trust' is the subject of much exegesis by commentators30. However, 'unit trust', like 27 Portland v Topham (1864) 11 HL Cas 32 at 54 [11 ER 1242 at 1251]; Vatcher v Paull [1915] AC 372 at 378; Redman v Permanent Trustee Co of New South Wales Ltd (1916) 22 CLR 84; [1916] HCA 47; Re Burton; Wily v Burton (1994) 126 ALR 557 at 559-560; Finch v Telstra Super Pty Ltd (2010) 242 CLR 254 at 270 [30], 271 [33]; [2010] HCA 36. 28 (2005) 224 CLR 98 at 109-110 [15]. 29 (2003) 130 FCR 12 at 33 [60]. 30 See Ford, "Unit Trusts", (1960) 23 Modern Law Review 129; Ford, "Public Unit Trusts", in Austin and Vann (eds), The Law of Public Company Finance, (1986) (Footnote continues on next page) 'discretionary trust'31, in the absence of an applicable statutory definition, does not have a constant, fixed normative meaning which can dictate the application to particular facts of the definition in s 3(a) of the [Land Tax Act 1958 (Vic)]". It may readily be accepted that the question as to whether the EISS is a unit trust within Div 6C cannot be resolved by reference to "a priori assumptions as to the nature of unit trusts". The answer to the question depends upon the effect of the terms of the Deed and the construction of the terms of the provisions of Div 6C by reference to their text, context and purpose. It must be understood, however, that, in CPT Custodian, this Court was concerned with a question as to the ownership of the assets of a trust estate of a unit trust. That question could not be answered by reference to the characteristics of a "unit trust" considered in the abstract. Rather, in order to determine the nature of the interests of unitholders, "it was necessary to begin with the terms of the relevant trust deeds and the rights, powers, and restrictions for which they provided."32 It was held that the nature of a beneficiary's rights under what was described as a "unit trust" was not determined by that general designation, but by the operative terms of the instrument. The question in this case is whether or not the EISS is a unit trust for the purposes of Div 6C, having regard to the rights created by the Deed and the meaning of the language of the statute. The broad discretions conferred upon ElecNet to determine which Workers should benefit under the Scheme, and the extent of any such benefit, afford some support for the Commissioner's contention that no Worker has a beneficial interest in any of the income or property of the trust estate. However, it may be assumed for the sake of argument that, although the quantum of any Worker's beneficial interest is contingent upon the exercise of ElecNet's discretions in light of events, each Worker does enjoy a beneficial interest in the trust estate33. Even if that assumption is made, it cannot be said that the 397; Sin, The Legal Nature of the Unit Trust, (1997); Thomas and Hudson, The Law of Trusts, (2003), Ch 51. 31 Chief Commissioner of Stamp Duties (NSW) v Buckle (1998) 192 CLR 226 at 234 [8]; [1998] HCA 4. 32 CPT Custodian Pty Ltd v Commissioner of State Revenue (Vic) (2005) 224 CLR 98 at 108 [10] (footnote omitted). 33 Finch v Telstra Super Pty Ltd (2010) 242 CLR 254 at 269-270 [28]-[30]. beneficial interests of Workers have been divided into units which are created under the Deed, and then issued to and held by the Workers. Under the terms of the Deed, the making of a Severance Payment or other payment to a Worker, and the determination of the quantum of that payment, do not operate by reference to the Worker's ownership of units, but by reference to the contributions which happen to have been paid over time into that Worker's Account with ElecNet, and the determination by ElecNet to regard the Worker as an Active Worker. The extent of the entitlement of any Worker is not measurable as a percentage of the prescribed trust estate by reference to the terms of the Deed; rather, it depends upon the course of contributions paid on behalf of that Worker over time and the Worker's circumstances. In addition, it is to strain language too far to say that the Worker "holds" the entry in his or her account as a unit. Each Worker can no more be said to be a unitholder in respect of the amounts credited to him or her in ElecNet's books of account than a beneficiary of the estate of a deceased person could be described as a unitholder in respect of the moneys held on that person's behalf in the trust account of the estate's solicitor. On behalf of ElecNet, it was argued that the beneficial interest of each Worker, while not divided into equal units, was measurable by reference to the number of dollars credited to each Worker's Account so that the units are the number of dollars so credited. On this view, the units were said to be $1 units, so that each unit entitles the holder to receive a return of $1 and no present income but a future contingent and defeasible right to share in any surplus under cl 23. But one can say that the units are $1 units only because of the absence from the Deed of any provision on the topic. One might as well speak of one cent units because the Worker is entitled to be paid every cent that is due. The problem for ElecNet's argument is not that the beneficial interest of each Worker is not described as a "unit" but that it is not "described" by the Deed at all. That is simply a reflection of the circumstance that the Deed does not concern itself with the creation of discrete parcels of rights which might be dealt with as items of commerce analogously with shares in a company. Division 6C: textual considerations The inclusive definition of "unit" in s 102M is expressed to relate only to beneficial interests in income or property of a prescribed trust estate. By definition, a prescribed trust estate must be (or have been) a trust estate that is a public trading trust the interests in which are held by unitholders. Jessup J was right to hold that the inclusive definition of "unit" does not expand the meaning of "unit trust" for the purposes of Div 6C. The term "unit" is defined specifically "in relation to a prescribed trust estate", which, as has been seen, is linked with the defined term "unitholder". As has been noted above, Div 6C, and s 102P in particular, is cast in terms that are apposite to a species of trust in which the beneficial interest in the trust fund is divided into units as discrete parcels of rights themselves capable of being dealt with, like shares in a company, as items of commerce. The inclusive definition of "unit" does not encompass an interest that would not otherwise be identifiable as a unit in relation to a prescribed trust estate merely because it is a beneficial interest in any of the income or property of the trust estate. Rather, the inclusive definition of "unit" ensures that a beneficial interest is a "unit" for the purposes of Div 6C, however it might be so described, and even if it is limited to only part of the property or income of the trust estate. There is no reason in the text or context of Div 6C to attribute to the undefined expression "unit trust" any meaning other than the meaning evident from the language of Div 6C. That meaning accords with the common usage of the expression "unit trust". As the Commissioner rightly observed, there is no reported case, in Australia or elsewhere, in which the expression "unit trust" has been applied other than in circumstances where, under the applicable trust deed, the beneficial interest in the trust fund is divided into units, which when created or issued are to be held by the persons for whom the trustee maintains and administers the trust estate. In addition, contrary to the argument advanced by ElecNet, Div 6C does not speak of a unit trust in contradistinction to a "fixed trust" or a "discretionary trust"; there is no textual basis for a suggestion that the term "unit trust" was adopted as a description of a trust relationship falling somewhere between the ends of a spectrum not mentioned by the statute. The purpose of Div 6C With all respect to Pagone and Edelman JJ, it may be doubted whether anything useful is added to the analysis of Div 6C by the pursuit of a "functional description" of a unit trust beyond the understanding which may be gleaned from a consideration of the text and purpose of Div 6C. In this regard, a consideration of the purpose of Div 6C is not at odds with, but confirmatory of, the conclusion suggested by the text of the statute. In the 1970s, public unit trusts became an attractive structure for investment because income tax legislation treated income distributions from trusts more favourably than income distributed by companies by way of dividends to shareholders. The net income of a trading company attracted income tax at the prescribed rate for companies and, in addition, shareholders were taxed on their dividends. Under the income tax law then applicable to trusts, only the beneficiaries were liable to pay tax on trust income to which they were presently entitled. Division 6B was introduced into Pt III of the ITAA in 198134 to provide for the taxation of certain corporate unit trusts as if they were companies. In the Second Reading Speech of the legislation that introduced Div 6B, the Minister for Business and Consumer Affairs, Mr Moore, said that the legislation was being introduced35: "to deal with the threat to company tax revenues posed by the growing practice of public company groups reorganising their affairs so as to eliminate company tax on some of their income. The practice involves the transfer of profitable assets, particularly investment in property, to unit trusts. ... The main concern of the Government in this respect is to prevent ad hoc erosion of the so-called classical system of company taxation through the use of unit trusts by public companies. Accordingly, the broad thrust of the amendments is to remove the taxation advantage sought by companies from placing income producing property in the hands of unit trusts. This is to be achieved basically by treating unit trusts evolving from the practice as if they were companies for tax purposes." In 1985, Div 6C was introduced into the ITAA36. In the Explanatory Memorandum, it was said that Div 6C "will tax as a company the trustee of a public unit trust carrying on a trade or business (to be known as a 'public trading 34 Income Tax Laws Amendment Act (No 3) 1981 (Cth). 35 Australia, House of Representatives, Parliamentary Debates (Hansard), 23 September 1981 at 1682. 36 Taxation Laws Amendment Act (No 4) 1985 (Cth). trust')."37 In the Second Reading Speech, the Minister Assisting the Treasurer, "The Government β¦ decided β¦ that company tax arrangements should be extended to public unit trusts that operate a trade or business. In announcing that decision, it was also indicated that private trusts and public unit trusts of the more traditional kind that do no more than invest in property, equities or securities would not be affected." The purpose of Div 6C is to treat unit trusts for tax purposes as analogous to the relationship between companies and shareholders. The relationship established by the Deed between ElecNet and a Worker is not analogous to that between a company and a shareholder. To observe, as Jessup J did, that the entitlement of any Worker under the EISS is not "unitised" is to note an important respect in which an entitlement under the EISS cannot be regarded as analogous to a share in a company. The making of a contribution by a Member to ElecNet is not analogous to a subscription to the capital of an enterprise which is to generate income from which profits may be distributed to the subscribers. Further, a payment to a Worker by ElecNet under cl 8 of the Deed is not even tenuously analogous to a dividend paid to a shareholder in a company, because both the making of a payment to a Worker, and the quantum of any such payment, depend on the exercise of a discretion by the trustee having regard to circumstances personal to the potential recipient. In this latter regard, it is also a matter of some concern that to characterise the EISS as a unit trust for the purposes of Div 6C may have the unintended and, from the perspective of the recipients, unattractive consequence that Severance Payments made to Workers under the Scheme may be taxable in the hands of the recipients as unit trust dividends. Section 102T(19) of the ITAA provides that s 44(1), which deals with taxation of dividends paid to a shareholder in a company, applies to unit trust dividends paid by a trustee of a "prescribed trust estate" to a unitholder. Section 44(1) of the ITAA includes in the assessable income of a shareholder in a company dividends paid to the shareholder by the company out of profits derived by it. By virtue of s 102T(14), a reference in 37 Australia, House of Representatives, Taxation Laws Amendment Bill (No 4) 1985 and Income Tax (Companies, Corporate Unit Trusts and Superannuation Funds) Amendment Bill 1985, Explanatory Memorandum at 75. 38 Australia, House of Representatives, Parliamentary Debates (Hansard), 15 November 1985 at 2958. s 44(1) to a shareholder in relation to a company is to be read as a reference to a unitholder in a prescribed trust estate; and by virtue of s 102T(19), for the purposes of s 44(1), a unit trust dividend paid by a trustee of a prescribed trust estate out of the corpus of the trust estate shall, to the extent to which the unit trust dividend is attributable to profits derived by the trustee, be taken to be paid out of those profits. In this way, the provisions of cl 14 of the Deed give rise to the possibility that a payment to a Worker may include an amount attributable to the profits generated from the investments made by ElecNet. Counsel for ElecNet sought to allay the doubts which contemplation of these possible disadvantages for Workers was apt to cast upon their argument by contending that distributions to Workers by ElecNet cannot be unit trust dividends within the meaning of that expression in Div 6C. Section 102M defines the expression "unit trust dividend" relevantly to mean: any distribution made by the trustee of a prescribed trust estate, whether in money or in other property, to a unitholder; β¦ but does not include: (d) money paid β¦ by the trustee of a prescribed trust estate in respect of the cancellation, extinguishment or redemption of a unit to the extent to which: the money paid β¦ represents money paid to β¦ the trustee for the purpose of the creation or issue of that unit; and the amount of the money paid β¦ does not exceed the amount of the money paid to the trustee β¦ for the purpose of the creation or issue of that unit." In particular, counsel for ElecNet argued that a distribution to a Worker by ElecNet would properly be characterised as "money paid β¦ by the trustee of a prescribed trust estate in respect of the cancellation, extinguishment or redemption of a unit" because the money would represent money paid to ElecNet for the purpose of the creation or issue of the unit, and the amount of the money distributed would not exceed the money paid to ElecNet for the purpose of the creation or issue of the unit. This aspect of ElecNet's argument cannot be accepted. The natural description of what occurs when a payment is made to a Worker is that ElecNet's obligation under cl 8 of the Deed is satisfied. Once again, it is to strain the language to describe what has occurred upon payment under cl 8 as the cancellation, extinguishment or redemption of an interest in a prescribed trust estate. No right is "held" by a Worker to be cancelled, extinguished or redeemed: the Worker who receives payment engages in no act or process that might be described as cancellation, extinguishment or redemption. The concept of redemption, for example, is derived from the Latin "redimere" β to buy back: when used of a share or other form of commercial security, it involves reacquisition by the issuer. Nothing of the sort occurs when a payment is made under cl 8 of the Deed. In addition, payments to Active Workers under cl 8 are, if Div 6C does not apply, taxable as employment termination payments under Div 82 of the Income Tax Assessment Act 1997 (Cth) or redundancy payments or similar under Div 83 of that Act, which are apt to be less burdensome to the recipients. It would be of grave concern to Workers if, by reason of the application of Div 6C, payments to them were treated as unit trust dividends rather than being subject to tax under the specific provisions of Div 82 or Div 83. Conclusion and orders The rights conferred on Workers by the Deed were not such as to support the conclusion that the EISS is a unit trust for the purposes of Div 6C of Pt III of the ITAA. The appeal should be dismissed. ElecNet should pay the costs of the appeal. Nettle NETTLE J. This is an appeal from orders of the Full Court of the Federal Court of Australia (Jessup, Pagone and Edelman JJ)39 which, in effect, upheld a ruling by the respondent ("the Commissioner") that the trust of which the appellant ("ElecNet") is trustee is not a unit trust for the purposes of Div 6C of Pt III of the Income Tax Assessment Act 1936 (Cth) ("the 1936 Act"). The relevant facts and the parties' contentions are set out in the plurality's reasons. For the reasons which follow, the Electrical Industry Severance Scheme ("the EISS") is not a unit trust in the sense required by Div 6C and the appeal to this Court should be dismissed. Relevant statutory provisions Division 6C was modelled on provisions of Div 6B of Pt III of the 1936 Act40, which, in turn, needs to be understood in light of Div 6 in the same Part. Thus, to place Div 6C in context, it is first necessary to refer briefly to Divs 6 and 6B. Division 6 Division 6 provides generally for the taxation of trust income. The basic principle of the Division, which emerges from ss 96 and 97, is that a trustee is not liable to pay income tax on the income of the trust estate, but a beneficiary who is presently entitled to a share of the income of the trust estate will have that share included in his or her assessable income. That is the position unless one of the other provisions applies. For example, s 98 makes a trustee liable to pay tax in respect of the share of the income of the trust estate to which a beneficiary who is under a legal disability is presently entitled. Special provision is made for discretionary trusts in s 101 and for revocable trusts in s 102. Division 6B Division 6B was introduced in 198141 to provide for the taxation of "corporate unit trusts". "Unit trust" was not specifically defined42. Its meaning 39 Federal Commissioner of Taxation v Elecnet (Aust) Pty Ltd (2015) 239 FCR 359. 40 Australia, House of Representatives, Taxation Laws Amendment Bill (No 4) 1985 and Income Tax (Companies, Corporate Unit Trusts and Superannuation Funds) Amendment Bill 1985, Explanatory Memorandum at 10. 41 Income Tax Laws Amendment Act (No 3) 1981 (Cth), s 10. Division 6B has since been repealed by the Tax Laws Amendment (New Tax System for Managed Investment Trusts) Act 2016 (Cth), Sched 5, Pt 2. 42 Section 102D provided definitions of "unit", "unitholder" and "unit trust dividend". Nettle was apparent, however, from the operative provisions of the Division and, in particular, from the concern to tax corporate unit trusts as close substitutes for public companies. Section 102K provided in substance that a trustee of a "corporate unit trust" was to be assessed and was liable to pay tax on the net income of the trust at the rate declared by Parliament. Section 102J(1)(b) provided that a unit trust was a "corporate unit trust" in relation to a year of income commencing on or after 1 July 1983 if: the unit trust is an eligible unit trust in relation to the relevant year of income; the unit trust is a public unit trust in relation to the relevant year of income; and (iii) either of the following conditions is satisfied: the unit trust is a resident unit trust in relation to the relevant year of income; the unit trust was a corporate unit trust in relation to a year income." (emphasis added) the relevant year of income preceding Section 102F provided in substance that, for the purposes of Div 6B, an "eligible unit trust" in relation to a year of income was a unit trust which acquired property during the year of income or a preceding year pursuant to a "prescribed arrangement" in relation to a company whose property it was formerly, or pursuant to a "prescribed arrangement" in relation to a company that had carried on a business that the trustee of the unit trust carried on at any time during the year of income or a preceding year of income. A "prescribed arrangement"43 in relation to a company was one under which a shareholder in the company was, by reason of being a shareholder, granted a right or an option to acquire units in the unit trust and the units in the unit trust were to be held or dealt with, or the income or property of the unit trust was to be applied, in such a way that in the opinion of the Commissioner the unit trust would be a public unit trust in relation to the relevant year of income if s 102G were applied. Section 102G provided in substance that, for the purposes of Div 6B, a unit trust was a "public unit trust" in relation to a year of income if, at any time during that year, any of the units in the unit trust were offered to the public or listed for quotation in the official list of a stock exchange in Australia or elsewhere, or the units were held by not fewer than 50 persons. 43 Income Tax Assessment Act 1936 (Cth), s 102E. Nettle Section 102H provided that, for the purposes of Div 6B, a unit trust was a "resident unit trust" in relation to a year of income if any property of the unit trust were situated in Australia or the trustee of the unit trust carried on business in Australia, and either the central management and control of the unit trust was situated in Australia or residents of Australia held more than 50 per cent of the beneficial interest in the income or property of the unit trust. As appears from those provisions, "unit" and "unit trust" were used in Div 6B in a manner that accords to the generally accepted conception of a unit trust as one in which the beneficial interest in the property and income is divided into units analogous to shares in a company44. Division 6C: Scope of "public trading trust" Division 6C was introduced in 198545 to counter a practice of public companies transferring income earning assets to publicly listed or widely held unit trusts ο "public trading trusts" ο in order to avoid company tax on income derived from those assets46. As was the case in Div 6B, "unit trust" is not defined in Div 6C. "Unit" is defined in s 102M in relation to a "prescribed trust estate", meaning a public trading trust in relation to any year of income, to include "a beneficial interest, however described, in any of the income or property of the trust estate". Section 102R(1)(b)47 provides in substance that a unit trust is a "public trading trust" in relation to a year of income commencing on or after 1 July 1988 the unit trust is a public unit trust in relation to the relevant year of income; the unit trust is a trading trust in relation to the relevant year of income; (iii) either of the following conditions is satisfied: 44 Meagher and Gummow, Jacobs' Law of Trusts in Australia, 5th ed (1986) at 59-60 [312]-[314]. See and compare Heydon and Leeming, Jacobs' Law of Trusts in Australia, 8th ed (2016) at 40 [3-10]. 45 Taxation Laws Amendment Act (No 4) 1985 (Cth), s 16. 46 Australia, House of Representatives, Parliamentary Debates (Hansard), 15 November 1985 at 2958. 47 Section 102R(1)(b)(iv) was repealed consequent to the repeal of Div 6B: Tax Laws Amendment (New Tax System for Managed Investment Trusts) Act, Sched 5, Pt 3. Nettle the unit trust is a resident unit trust in relation to the relevant year of income; the unit trust was a public trading trust in relation to a year of income preceding the relevant year of income; and the unit trust is not a corporate unit trust within the meaning of Division 6B in relation to the relevant year of income." (emphasis added) For the purposes of Div 6C, s 102P(1) provides, in substance and subject to some qualifications of no present relevance, that a unit trust is a "public unit trust" if, during the relevant year of income, any of the units in the unit trust were offered to the public or listed for quotation in the official list of a stock exchange in Australia or elsewhere, or the units were held by not fewer than 50 persons. Section 102N(1) provides, in substance and again subject to some qualifications of no present relevance, that a unit trust is a "trading trust" in relation to a year of income if at any time during that year the trustee carried on a trading business or controlled, or was able to control, the affairs of another person in respect of the carrying on by that person of a trading business. Section 102Q provides the same definition of "resident unit trust" as was found in s 102H for the purposes of In addition to the definitions of "prescribed trust estate" and "unit", s 102M defines unit holder "in relation to a prescribed trust estate" to mean the "holder of a unit or units in the prescribed trust estate", and defines "unit trust dividend" to mean any distribution by the trustee of a prescribed trust estate to a unit holder, whether in money or other property, or any amount credited by the trustee to a unit holder as such. Division 6C: Tax consequences for "public trading trusts" The operative provisions of Div 6C are found in ss 102S and 102T. Section 102S provides that the trustee of a public trading trust in a relevant year of income shall be assessed and is liable to pay tax on the net income of the public trading trust at the rate declared by Parliament for the purposes of the section49. Section 102T provides for a modified application of the 1936 Act in relation to the imposition, assessment and collection of tax in respect of the net 48 See [77] above. 49 Section 25 of the Income Tax Rates Act 1986 (Cth) imposes the same rate of taxation for public trading trusts as for companies under s 23(2). Nettle income of a public trading trust and the assessable income of a unit holder in a prescribed trust estate. Sub-sections (6) and (7) provide that, for the purposes of the 1936 Act, references to "company" in relation to a "year of income" and in the definition of "person" shall be taken to include references to a "public trading trust" or, if the context requires, the trustee of a public trading trust. Sub-section (16) provides, inter alia, that a reference in Div 6 to a trust estate or trustee shall be read as not including a reference to a public trading trust or to the trustee of a public trading trust. Sub-section (2), which was repealed with effect from 200850, made tax rebates available in respect of unit trust dividends. Sub-section (3) provides for the application of dividend stripping provisions51 to such unit trust dividends if, in effect, the Commissioner is satisfied that, had the unit trust dividend been a dividend paid by a company, it would have been similar to a dividend stripping operation. Those provisions make clear that the tax treatment of a public trading trust under Div 6C was and is akin to that of a company, rather than to that of a trust caught in the general terms of Div 6. Section 102T(14) provides that a reference to a "shareholder" in s 44(1) of the 1936 Act, which provides for the assessment of dividends paid by companies as part of the income of shareholders, "shall be read as including a reference to a unitholder in a prescribed trust estate". Sub-sections (19) and (20) respectively provide that, where a unit trust dividend is paid by a trustee to a unit holder in a prescribed trust estate, that dividend is taken to be paid out of the profits derived by the trustee as such (to the extent the dividend is attributable to those profits) for the purpose of s 44(1) and deemed to be income derived by the unit holder at the time the unit trust dividend is paid for the purpose of withholding tax. Collectively, those provisions serve to include unit trust dividends in the assessable income of a unit holder, just as company dividends are assessed to shareholders. The meaning of "unit trust" The Full Court were correct to construe the term "unit trust" in Div 6C by reference to its ordinary acceptation. As Windeyer J observed in Scott v Federal Commissioner of Taxation, where an expression in an Act is undefined, the connotation of the phrase must be determined by one's general knowledge of the extent of the denotation of the phrase in common parlance52. In common 50 Tax Laws Amendment (Repeal of Inoperative Provisions) Act 2006 (Cth), Sched 3, item 8. 51 Income Tax Assessment Act, s 177E. 52 (1966) 117 CLR 514 at 524; [1966] HCA 48. See also Attorney-General for NSW v Brewery Employes Union of NSW (1908) 6 CLR 469 at 531 per O'Connor J; [1908] HCA 94; Mahony v Commissioner of Taxation (Cth) (1967) 41 ALJR 232 at (Footnote continues on next page) Nettle parlance, a unit trust is a trust in which the beneficial interest in the trust estate is divided into fractions, ordinarily called units. It is an express trust of which all the beneficiaries (the unit holders) are ascertainable at any given time. The division of the trust estate into units is the defining feature of a unit trust Contrary to ElecNet's submissions, nothing said in CPT Custodian Pty Ltd v Commissioner of State Revenue (Vic)54 implies that "unit trust" where it appears in Div 6C is or may be used in any different sense. CPT Custodian did not gainsay that the notion of a unit trust necessitates the division of the beneficial interest in the trust estate into units. The observations in CPT Custodian on which ElecNet relied were directed to the nature of the beneficial interests of unit holders. Semasiologically, they assumed a meaning of "unit trust" predicated on a division of the trust estate into units. The point made in CPT Custodian55 was not that a priori conceptions of unit trusts are irrelevant to the recognition of what may constitute a unit trust, but rather that, although the trust estate of a unit trust is divided into units, the rights conferred by a unit may, and usually will, fall short of a proprietary interest in the assets of the trust that would be sufficient to constitute the holder of a unit an "owner" of trust property within the meaning of s 3(1) of the Land Tax Act 1958 (Vic). Following the remarks of this Court in CPT Custodian, it may be accepted that the notion of a unit trust is sufficiently broad to encompass a range of so-called unit trusts, and thus that a unit in one unit trust may comprise a beneficial interest in the trust estate of that trust that is different in kind from the beneficial interest comprised of a unit in another. But to observe the broad nature of beneficial interests that may be comprised of the units in different unit trusts does not detract from the understanding that a unit trust is one in which the beneficial interest in the trust estate is divided into units. 232 per Kitto J, 237 per Windeyer J; Federal Commissioner of Taxation v Bamford (2010) 240 CLR 481 at 501 [17], 505 [36]; [2010] HCA 10. 53 Ford, "Unit Trusts", (1960) 23 Modern Law Review 129 at 129-130; Gower et al, Gower's Principles of Modern Company Law, 4th ed (1979) at 266-267 (see and compare Gower, The Principles of Modern Company Law, (1954) at 229-233); Austin and Vann (eds), The Law of Public Company Finance, (1986) at 399-400; Butterworths Australian Legal Dictionary, (1997) at 1215-1216; Thomas and Hudson, The Law of Trusts, 2nd ed (2010) at 1403-1405 [53.04]-[53.10]; CPT Custodian Pty Ltd v Commissioner of State Revenue (Vic) (2005) 224 CLR 98 at 109-110 [15]; [2005] HCA 53. 54 (2005) 224 CLR 98. 55 (2005) 224 CLR 98 at 109-110 [15]. Nettle It is true that, in CPT Custodian56 and also in Chief Commissioner of Stamp Duties (NSW) v Buckle57, it was observed that the expressions "fixed trust", "unit trust" and "discretionary trust" are not normative and so are not in themselves determinative of the interests created by trusts of those kinds. But the expressions "fixed trust", "unit trust" and "discretionary trust" are descriptive of the particular features of those kinds of trusts. It is also true that in CPT Custodian it was accepted that, of itself, the fact that rights conferred under a trust deed are conditional does not dictate that they may not aptly be described as conferring a beneficial interest in property58. Consequently, it was not in dispute before this Court that a contingent interest may suffice to constitute a beneficial interest. Whether it is sufficient depends on whether the trustee's powers are powers in the nature of a trust59. Hence, it is conceivable that there may be a unit trust in which each unit holder's beneficial interest in the trust estate is contingent rather than vested. But so to observe in no way implies that a discretionary trust which is not unitised in the plain and ordinary sense of that term is properly to be regarded as a unit trust for the purposes of Div 6C. "Unit trust" in Div 6C Counsel for ElecNet submitted that, even if "unit trust" in Div 6C connotes the common understanding of a unit trust, the plain effect of the definition of "unit" in relation to a prescribed trust estate in s 102M is to extend the meaning of "unit trust" for the purposes of Div 6C beyond the sense of a trust in which the beneficial interest in the trust estate is divided into fractions or units. In counsel's submission, "unit trust" in Div 6C thus refers to any trust that confers beneficial interests that are: capable of being "held" by a beneficiary in accordance with the definition of "unitholder" in s 102M; capable of being held by not fewer than 50 unrelated people, or of being listed on a stock exchange or offered to the public, thus satisfying the requirements of s 102P(1); and 56 (2005) 224 CLR 98 at 109-110 [15]. 57 (1998) 192 CLR 226 at 234 [8]; [1998] HCA 4. 58 CPT Custodian (2005) 224 CLR 98 at 110 [17]. Cf Caboche v Ramsay (1993) 119 ALR 215 at 230-231 per Gummow J. 59 See In re Baden's Deed Trusts [1971] AC 424 at 449 per Lord Wilberforce. Nettle (iii) capable of measurement such that it can be seen whether an exempt beneficiary is entitled to 20 per cent or more of the beneficial interests in the income or property of the unit trust, thus satisfying the test in s 102P(2), in circumstances where the terms of the deed establishing the unit trust are such that the trustee is able to: (iii) make distributions to each beneficiary in a fashion that enables it to be determined, for the purpose of s 102P(2), whether 20 per cent of the distributions accrue to an exempt beneficiary; invest in the assets listed in the definition of "eligible investment business" in s 102M; carry on a trading business, or control the conduct by another of a trading business, within the meaning of s 102N; and conduct the trust in such a way that the trust constitutes a resident unit trust within the meaning of s 102Q. In counsel's submission, the evident purpose of so extending the meaning of "unit trust" in Div 6C is to impose the taxation regime ordained by that Division on any trust which has the essential characteristics of carrying on a trading business and being constituted of beneficial interests that are widely held or held by an exempt body to a material extent. On the terms of s 102M, no more is required of a "unit" than that it be a "beneficial interest, however described, in any of the income or property of the trust estate", and no more is required of a "unitholder" than that it be "the holder of a unit or units in the ... trust estate". Those arguments should be rejected. Putting aside for the moment what ElecNet submitted is the plain effect of the definition of "unit" in s 102M, the text, context and purpose of Div 6C all point to a meaning of "unit trust" throughout the Division which accords to ordinary acceptation, and, therefore, requires the division of the trust estate, or perhaps the relevant part of the trust estate, into units. The language of Div 6C is replete with references to units and with terms apposite to a trust in which the beneficial interest is divided into units. Both par (d) of the definition of "unit trust dividend" in s 102M and s 102P(2)(c)(i) refer to the "cancellation, extinguishment or redemption" of a unit. That implies a conception of units sufficiently analogous to shares in a company that a unit may be cancelled, extinguished or redeemed by mechanisms Nettle akin to the cancellation, extinguishment or redemption of a share in a company60. Contrary to ElecNet's submissions, the fact that a unit in a unit trust comprises a beneficial interest in the trust estate, whereas a share does not confer a beneficial interest in the assets of the company61, is beside the point. Units in unit trusts as ordinarily understood are, in reality, regularly cancelled, extinguished and redeemed by processes akin to the cancellation, extinguishment or redemption of shares in a company. By contrast, a beneficial interest in a trust estate which is not divided into units is not and cannot be so cancelled, extinguished or redeemed. Paragraphs (a) and (b) of s 102P(1) refer to the listing of units for quotation in the official list of a stock exchange and the offer of units to the public. Both the listing of units for quotation and the offering of units to the public require that each unit, or at least each unit in a particular class of units, be the same as each other unit, or each other unit in that class. Contrary to ElecNet's submissions, the fact that s 102P(1)(c) provides, in the alternative, that units in a qualifying unit trust may be held by not fewer than 50 persons does not imply that the same assumption is absent from s 102P(1)(c). The alternative exists to provide for the division of the beneficial interest in a unit trust into units that are not listed or offered to the public but are widely held. Section 102P(2)(c)(ii) refers to the acquisition of units in a manner which necessarily assumes the assignability of units, and s 102P(9) refers to subscription for and purchase of units; again implying for the reasons already given that each unit, or each unit of a particular class, is both the same and assignable. The context of Div 6C leads to the same conclusion. It followed directly from Div 6B, both within the structure of the 1936 Act and in terms of the date on which it was introduced into the Act. As has been observed, the context and evident purpose of Div 6B demonstrate that the Division was directed towards the treatment of corporate unit trusts as analogous to companies distributing share dividends. Correspondingly, the context and purpose of Div 6C, broadly stated, demonstrate that the Division is directed towards subjecting public trading trusts comprised of units analogous to shares, and their unit holders, to a taxation regime in Div 6C that is similar to the taxation regime that was applicable to corporate unit trusts and their unit holders under Div 6B, and that is applicable to companies and their shareholders. 60 See MSP Nominees Pty Ltd v Commissioner of Stamps (SA) (1999) 198 CLR 494 at 507 [26]; [1999] HCA 51. See generally Heydon and Leeming, Jacobs' Law of Trusts in Australia, 8th ed (2016) at 40 [3-10]. 61 Charles v Federal Commissioner of Taxation (1954) 90 CLR 598 at 608-609; [1954] HCA 16; Macaura v Northern Assurance Co Ltd [1925] AC 619 at 626-627 per Lord Buckmaster. Nettle The extrinsic materials confirm that view. As was observed in the second reading speech in support of the introduction of Div 6C62: "Measures contained in this Bill ... in many respects mirror the present corporate unit trust provisions. ... Provisions in the Bill, like those in the present income tax law relating to corporate unit trusts, will ensure that distributions made by public trading trusts are treated for all practical purposes in the same way as dividends paid by a company. ... Distributions made by a public trading trust to a resident individual will be included in assessable income in the same way as company dividends." The improbability of the term "unit trust" having the meaning contended for by ElecNet is further illustrated by the fact that such an understanding would allow payment to an "Active Worker" under cl 8 of the deed of the EISS, which otherwise would be taxable as an employment termination payment under the Income Tax Assessment Act 1997 (Cth) ("the 1997 Act"), to be treated as a unit trust dividend by reason of Div 6C of Pt III of the 1936 Act and therefore as not subject to taxation under the more specific provisions of Div 82 or Div 83 of the 1997 Act. To accept that as the effect of Div 6C would be inconsistent with the purpose of that Division in seeking to subject publicly listed and widely held trading trusts to taxation as if they were companies, and contrary to the ostensible purpose of Divs 82 and 83 of the 1997 Act in seeking to provide a specific taxation regime in respect of payments to employees upon termination. The relevance of the definition of "unit" in s 102M It remains to deal with the definition of "unit" in s 102M. Once s 102M is seen in the context of the other provisions of Div 6C which have been referred to, it is apparent that the purpose and effect of the definition is not to expand the conception of "unit" to include beneficial interests which do not accord with the ordinary acceptation of a unit in a unit trust. Rather, it is to ensure that, where a trust is divided into units, as units are ordinarily understood, each unit will be a unit for the purposes of Div 6C regardless of the nature of the beneficial interest in the trust estate comprised of that unit, and regardless of whether it be an interest in the income or property of the trust estate. Possibly, in view of this Court's decision in CPT Custodian, that would have been so in any event. But, presumably, when the provision was enacted, there was some concern that a unit in a unit trust might not otherwise be taken to constitute a unit for the purposes of 62 Australia, House of Representatives, Parliamentary Debates (Hansard), 15 November 1985 at 2958. Nettle Div 6C unless it conferred a proprietary interest in the assets of the trust fund63. Defining "unit" to include "a beneficial interest, however described, in any of the income or property of the trust estate" foreclosed that possibility. But it did not and does not suggest a purpose of discarding the ordinary understanding of "unit" for the purposes of Div 6C. The EISS is not a unit trust As the above analysis of Div 6C and the ordinary acceptation of the expression "unit trust" reveals, a "unit trust" is a trust in which the beneficial interest is divided into units analogous to shares in a company such that each unit, or each unit in a class of units, is the same as each other unit, or unit in the same class, and each such unit is capable of cancellation, extinguishment or redemption by processes akin to the cancellation, extinguishment or redemption of shares in a company. The beneficial interest of each worker in the EISS, as reflected by the amount standing to the credit of the worker's account, is in no way comparable to units of that kind. Each worker's account is likely to be of a different amount. The rights of each worker vary according to his or her circumstances, including whether the worker is recognised by ElecNet as an "Active Worker" and whether the worker is entitled to receive payment on account of retrenchment or retirement. It is also difficult to conceive of the satisfaction of a worker's entitlement, or anything else that might lawfully be done by ElecNet as trustee in relation to a worker's entitlement, as analogous to the cancellation, extinguishment or redemption of shares in a company. It appears that it was uncontroversial before the Full Court of the Federal Court that the EISS was not a unit trust according to ordinary acceptation and that the beneficial interests of workers in the EISS were thus not divided into units as ordinarily understood64. Before this Court, however, it was contended that there is no one kind of unit trust but rather a range of different unit trusts and that, although the EISS is hardly within the range of typical unit trusts, it is nonetheless within the "penumbral area between the simple case and the boundary" of what may properly be conceived of as unit trusts. In the submission of ElecNet's counsel, the EISS is a unit trust because the beneficial interest of each worker in the trust estate is capable of measurement in terms of the amount standing to the credit of each worker's account, and capable of expression as a fraction of the totality of the trust estate. 63 Charles (1954) 90 CLR 598 at 609; Costa & Duppe Properties Pty Ltd v Duppe [1986] VR 90 at 92-93, 95-96. Cf CPT Custodian (2005) 224 CLR 98 at 110 64 Elecnet (2015) 239 FCR 359 at 361 [6] per Jessup J. Nettle That contention should be rejected. Its consequences bespeak its speciousness. If accepted, it would mean that any form of trust, whether a fixed, unit or discretionary trust as ordinarily understood, would qualify as a unit trust within the meaning of Div 6C provided it were possible to measure the value of each beneficiary's beneficial interest in the trust estate and express that value as a fraction or percentage of the total value of the trust estate. Any fixed trust of which the trustee carries on a trading business and in which there are at least 50 beneficiaries would be a public trading trust for the purposes of Div 6C, and subject to the particular taxation regime of that Division, regardless of any and all of the differences between the nature and value of each beneficiary's beneficial interest in the trust estate. The improbability of that being the purpose and effect of Div 6C renders it untenable. Faced with those difficulties, counsel for ElecNet submitted in oral argument that the EISS trust estate could be conceived of as comprised of the number of units of one dollar equal to the number of whole dollars comprising the total trust estate, and that each worker held a number of units in the trust estate equal to the number of whole dollars standing to the credit of that worker's account. Asked why it should be supposed that each unit was comprised of a dollar rather than, say, 50 cents or even one cent, counsel submitted that it did not matter which unit of currency was adopted, the principle would be the same. That submission should also be rejected. The trust estate is not divided into units; the terms of the deed of the EISS provide, in effect, for the opposite. And even if it were sensible to speak of each worker as having a number of units in the trust estate equal to the number of whole dollars, or increments of 50 cents or one cent, standing to the credit of that worker's account, the rights and entitlements of one worker would still be different from those of each other worker according to the circumstances already explained, and the workers would remain incapable of dealing with or satisfying the entitlements conferred by such units in a manner analogous to the cancellation, extinguishment or redemption of shares in a company. Conclusion As Jessup J concluded, what is determinative in this case is that the beneficial interest in the EISS is not divided into units. For that reason, the EISS lacks the defining feature of unitisation which characterises a trust as a unit trust. The EISS provides instead for different amounts of the trust estate to be credited to each individual worker's account, which are then held on trust to make payments to that worker upon the occurrence of a severance event, in an amount to be determined by ElecNet up to the amount standing to the credit of that worker's account. In effect, it creates a series of individual trusts ο one for each worker ο with capacity in the trustee to treat each of the individual funds as comprising one fund for the purposes of administration and investment. In essential respects, it is more akin to a defined benefits superannuation scheme Nettle fund which is held on trust for the payment of retirement, death or total disability benefits to members or their dependants. But, be that as it may, it is not a unit trust within the meaning of Div 6C. |
HIGH COURT OF AUSTRALIA AND APPELLANT RESPONDENT [2017] HCA 10 8 March 2017 ORDER Appeal dismissed. On appeal from the Supreme Court of the Northern Territory Representation B E Walters QC with E M Nekvapil and F L Batten for the appellant (instructed by North Australian Aboriginal Justice Agency) S L Brownhill SC, Solicitor-General for the Northern Territory with T J Moses for the respondent (instructed by Solicitor for the Northern Territory) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Criminal law β Procedure β Apprehension and detention β Reasonable grounds β Where appellant drinking alcohol in public place near shops selling alcohol β Where appellant intoxicated and behaving belligerently towards police β Where appellant apprehended on basis of police officer's belief that appellant would commit offence of drinking liquor in regulated place β Whether belief held on reasonable grounds β Whether policing experience valid basis for reasonable grounds for forming belief. Criminal law β Procedure β Apprehension and detention β Statutory powers of apprehension β Where appellant apprehended on basis of police officer's belief that appellant would commit offence of drinking liquor in regulated place β Where maximum penalty for offence forfeiture of liquor and issue of contravention notice β Whether decision to apprehend exceeded limits of apprehension power. Words and phrases β "likely to commit an offence", "policing experience", "reasonable grounds". Liquor Act (NT), s 101U(1). Police Administration Act (NT), s 128(1). KIEFEL AND BELL JJ. Section 128(1) of the Police Administration Act (NT) ("the PAA") confers power on a member of the Police Force of the Northern Territory to apprehend without warrant a person who the member has reasonable grounds for believing is intoxicated (s 128(1)(a)) and is either in a public place or trespassing on private property (s 128(1)(b)). The power is further conditioned on the member having reasonable grounds for believing that because of the person's intoxication the person: is unable to adequately care for himself or herself and it is not practicable at that time for the person to be cared for by someone else (s 128(1)(c)(i)); or may cause harm to himself or herself or someone else (s 128(1)(c)(ii)); or may intimidate, alarm or cause substantial annoyance to people (s 128(1)(c)(iii)); or is likely to commit an offence (s 128(1)(c)(iv)). A person who is apprehended under s 128 is to be held in the custody of a member of the Police Force but only for so long as it reasonably appears to the member that the person remains intoxicated1. In the mid-afternoon on New Year's Eve 2013, Mr Prior was apprehended under s 128(1) of the PAA by Constable Blansjaar on the footpath outside the Westralia Street shops, in Stuart Park. Constable Blansjaar believed that Mr Prior was intoxicated in a public place and, because of his intoxication, that Mr Prior might intimidate, alarm or cause substantial annoyance to people and that it was likely that he would commit an offence. The offences that Constable Blansjaar believed it was likely that Mr Prior would commit involved drinking in a regulated place or disorderly behaviour. In the Supreme Court of the Northern Territory, Southwood J found that Constable Blansjaar had reasonable grounds for his belief that Mr Prior was likely to commit the offence of drinking at a regulated place contrary to s 101U(1) of the Liquor Act (NT) ("the Liquor Act offence")2. The Court of Appeal of the Supreme Court of the Northern Territory (Riley CJ, Kelly and 1 PAA, s 129(1). In the case of a person who has been taken into custody under s 128 and who is in custody after midnight and before half past 7 o'clock in the morning on that day, s 129(3) provides that the person may be held in custody until half past 7 o'clock in the morning of that day notwithstanding that the person is no longer intoxicated. Section 131(1) authorises the member of the Police Force in whose custody a person is held under s 128 to release the person at any time into the care of a person who the member reasonably believes is a person capable of taking adequate care of the person. 2 Prior v Mole [2015] NTSC 65 at [36]. Bell Hiley JJ) upheld that finding3. By grant of special leave, Mr Prior appeals to this Court. The principles governing the exercise of a power that is conditioned on the existence of reasonable grounds for belief are not in question4. The lawful exercise of the power conferred by s 128(1) required that Constable Blansjaar in fact hold each of the beliefs referred to in sub-s (1)(a) and (b) and one or more of the beliefs referred to in sub-s (1)(c) and that the facts and circumstances known to Constable Blansjaar constituted objectively reasonable grounds for those beliefs. Proof of the latter requires that those facts and circumstances be sufficient to induce in the mind of a reasonable person a positive inclination towards acceptance of the subject matter of the belief. This is not to say that it requires proof on the civil standard of the existence of that matter. Facts and circumstances that suffice to establish the reasonable grounds for a belief may include some degree of conjecture5. It is common ground that Constable Blansjaar in fact held each belief and that there existed reasonable grounds for his belief that Mr Prior was intoxicated and that Mr Prior was in a public place. Mr Prior contends that the Court of Appeal erred in holding that Constable Blansjaar had reasonable grounds for his belief that, because of his intoxication, Mr Prior was likely to commit the Liquor Act offence in circumstances in which Constable Blansjaar knew nothing of Mr Prior's background and based his belief at least in part on his policing experience. For the reasons to be given, we consider that it was open in law to find that Constable Blansjaar had reasonable grounds for his belief. Procedural history The lawfulness of Mr Prior's apprehension arises in circumstances in which, after being taken into custody as an intoxicated person pursuant to s 128(1) of the PAA, Mr Prior engaged in conduct which led to him being arrested and charged with three criminal offences: behave in a disorderly manner in a public place (offence (i))6; unlawfully assault a police officer, Sergeant O'Donnell, whilst in the execution of his duty (offence (ii))7; and 3 Mole v Prior (2016) 304 FLR 418 at 433-434 [69]-[70]. 4 George v Rockett (1990) 170 CLR 104; [1990] HCA 26. 5 George v Rockett (1990) 170 CLR 104 at 116. 6 Summary Offences Act (NT), s 47(a). 7 Criminal Code (NT), s 189A. Bell behave in an indecent manner in a public place (offence (iii))8. All three offences were tried before the Court of Summary Jurisdiction in Darwin (Cavanagh SM). Proof of offence (ii) required the prosecution to establish beyond reasonable doubt that Sergeant O'Donnell was acting in the execution of his duty at the time of the assault. At that time, Sergeant O'Donnell was placing Mr Prior in the rear of a police vehicle following Constable Blansjaar's decision to take Mr Prior into custody under s 128 of the PAA. Mr Prior argued that the prosecution had not proved that his apprehension was lawful. Relying on the same claimed illegality, Mr Prior submitted that evidence of the conduct charged in offences (i) and (iii) should be excluded in the exercise of the discretion conferred by s 138 of the Evidence (National Uniform Legislation) Act (NT) ("the Evidence Act")9. Cavanagh SM found that Mr Prior had been lawfully apprehended under s 128 of the PAA. Mr Prior was convicted of offences (ii) and (iii). Cavanagh SM was not satisfied that the prosecution had proved that Mr Prior behaved in a disorderly manner and he was acquitted of offence (i). On appeal in the Supreme Court10, Southwood J was satisfied beyond reasonable doubt that there were reasonable grounds for Constable Blansjaar's belief that, because of his intoxication, Mr Prior was likely to commit the Liquor Act offence. Proof of the belief sufficed to establish the lawfulness of Mr Prior's apprehension and to remove any doubt that Sergeant O'Donnell was acting in the execution of his duty at the time of the assault charged as offence (ii). His Honour was not satisfied on the criminal standard that there were reasonable grounds for Constable Blansjaar's belief that because of his intoxication Mr Prior might intimidate, alarm or cause substantial annoyance to people11. Mr Prior relied on a new argument for discretionary exclusion of evidence before Southwood J. Mr Prior argued that even if his apprehension was lawful 8 Summary Offences Act (NT), s 47(a). 9 Section 138(1) of the Evidence Act provides that evidence that was obtained (a) improperly or in contravention of an Australian law; or (b) in consequence of an impropriety or of a contravention of an Australian law, is not to be admitted unless the desirability of admitting the evidence outweighs the undesirability of admitting evidence that has been obtained in the way in which the evidence was obtained. 10 Prior v Mole [2015] NTSC 65 at [36]. The appeal was brought under s 163(1)(b) of the Justices Act (NT), which confers a right of appeal on a matter or question of fact, law or both fact and law. The Justices Act has since been renamed by s 5 of the Local Court (Repeals and Related Amendments) Act 2016 (NT) as the Local Court (Criminal Procedure) Act (NT). 11 Prior v Mole [2015] NTSC 65 at [37]. Bell and the evidence of the conduct charged as offences (ii) and (iii) was not obtained in consequence of a contravention of Australian law it should nonetheless be excluded under s 138 of the Evidence Act because it had been obtained in consequence of an impropriety. The action of the police in taking Mr Prior into custody was said to have been unnecessary and to fall below the minimum standard of conduct required of those charged with enforcing the law12. This argument succeeded before Southwood J13. That acceptance was the subject of the prosecution's successful appeal to the Court of Appeal14. The Court of Appeal's conclusion that evidence of the conduct charged in offences (ii) and (iii) should not have been excluded on the ground that it was obtained in consequence of an impropriety is not the subject of this appeal. This appeal is from the Court of Appeal's dismissal of Mr Prior's amended notice of contention, which sought to support Southwood J's orders acquitting him of both offences on two additional grounds. The first ground contended that the evidence did not establish on the criminal standard that there were reasonable grounds for Constable Blansjaar's belief that Mr Prior was likely to commit the Liquor Act offence15. The second ground was directed to the discretionary exclusion of the evidence of each offence as having been obtained in consequence of a contravention of Australian law. Mr Prior contended that he had discharged that Constable Blansjaar did not have reasonable grounds for his belief under s 128(1)(c)(iii) or s 128(1)(c)(iv)16. the onus of proving, on the civil standard, The Court of Appeal considered that it was clearly established on the civil standard that Constable Blansjaar had reasonable grounds for his belief under s 128(1)(c)(iii) that because of his intoxication Mr Prior may intimidate, alarm or cause substantial annoyance to people17. It did not determine whether the prosecution had proved the existence of reasonable grounds for that belief on the criminal standard for the purposes of proof of offence (ii). The Court of Appeal was satisfied that Southwood J had been right to hold that the prosecution had proved on the criminal standard that Constable Blansjaar had reasonable grounds 12 Prior v Mole [2015] NTSC 65 at [45]. 13 Prior v Mole [2015] NTSC 65 at [70]-[72]. 14 Mole v Prior (2016) 304 FLR 418 at 421 [14]. 15 Mole v Prior (2016) 304 FLR 418 at 432-433 [64]. 16 Mole v Prior (2016) 304 FLR 418 at 432-433 [64]. 17 Mole v Prior (2016) 304 FLR 418 at 432 [62]. Bell for belief in the likely commission of the Liquor Act offence18. The question that is determinative of the appeal in this Court is whether, in law, it was open to the Court of Appeal Constable Blansjaar provided reasonable grounds for his belief that because of Mr Prior's state of intoxication it was likely that Mr Prior would continue drinking alcohol in the street outside the Westralia Street shops, thereby committing the Liquor Act offence. the facts and circumstances known to find that Evidence of the facts and circumstances leading up to the decision to apprehend Mr Prior was given by Constable Fuss and Constable Blansjaar. Cavanagh SM found both officers to be credible and reliable witnesses. Cavanagh SM's reasons were brief and did not include findings as to the precise sequence of events. The appeal to the Supreme Court, by way of rehearing, was conducted on the transcript of the proceedings and the exhibits admitted into evidence in the Court of Summary Jurisdiction19. Southwood J made detailed factual findings which were accepted by the Court of Appeal. Those findings are set out in Gordon J's reasons and need not be repeated here. Some of Mr Prior's submissions in this Court amounted to an invitation to depart from the concurrent findings below, as with the submission that Mr Prior was apprehended before the incident involving children being placed in a car occurred. That invitation should be resisted and the question of principle determined on the basis of Southwood J's factual findings. that Southwood J's conclusion there were reasonable grounds for Constable Blansjaar's belief that, because of his state of intoxication, Mr Prior would commit the Liquor Act offence took into account that alcohol was readily available for purchase at the Westralia Street location and that Mr Prior had been drinking alcohol in company with others in that location before the arrival of the police20. In particular, it took into account that the arrival of the police did not cause Mr Prior to change his behaviour. Mr Prior behaved in a belligerent and defiant manner towards the police and in their presence sat back on a ledge outside the shops and picked up a container of red wine21. The Court of Appeal upheld Southwood J's finding largely on the strength of his Honour's analysis. In this Court Mr Prior repeats a criticism of that analysis which was rejected by the Court of Appeal. He points to the lack of 18 Mole v Prior (2016) 304 FLR 418 at 435 [75]. 19 Prior v Mole [2015] NTSC 65 at [5]. 20 Prior v Mole [2015] NTSC 65 at [26]. 21 Prior v Mole [2015] NTSC 65 at [26]. Bell evidence that he had the means to purchase more alcohol and he submits that his evident state of intoxication made it less likely that he would continue drinking alcohol following the confiscation of his wine. It is said to have been less likely because the Liquor Act (NT) makes it an offence for a licensee or the employee of a licensee to supply liquor to a person who is intoxicated22. The Court of Appeal rejected these arguments, observing that it should not be assumed that Mr Prior would have had to purchase alcohol himself23. Their Honours considered that Constable Blansjaar had reasonable grounds for believing that Mr Prior would continue to drink on the footpath outside the Westralia Street shops irrespective of how he obtained the alcohol24. Reliance on policing experience The error which Mr Prior contends vitiates the Court of Appeal's finding "Constable Blansjaar was also entitled to, and did, rely upon his experience of more than 12 years as a police officer and his dealings with people displaying similar behaviour to that displayed by [Mr Prior]." The Court of Appeal's reference was to an answer given by Constable Blansjaar in cross-examination. It was put to Constable Blansjaar that he had no reason to think that it would not have been effective to tell Mr Prior to stop drinking and that he was not allowed to drink alcohol on the footpath outside the Westralia Street shops. Constable Blansjaar rejected this proposition, saying "[m]y experience as a police officer tells me that there's a good chance if we left he would simply purchase more alcohol at the bottle shop 20 metres away and continue drinking." Constable Blansjaar stated that his belief in this respect also took into account Mr Prior's "general demeanour" and his behaviour, which was "very telling". There the matter was left. Both Constable Fuss and Constable Blansjaar had earlier given evidence of Mr Prior's demeanour and behaviour. Mr Prior's argument is that an "undifferentiated pool of experience" about other people cannot provide a reasonable ground for a belief about how a person, of whom the police officer has no knowledge, is likely to behave. There are two 22 Liquor Act (NT), s 102. 23 Mole v Prior (2016) 304 FLR 418 at 434 [70]. 24 Mole v Prior (2016) 304 FLR 418 at 434 [70]. 25 Mole v Prior (2016) 304 FLR 418 at 435 [74]. Bell strands to the argument. The broad strand asserts that a police officer's experience of others cannot rationally bear on whether a particular individual, because of his or her intoxication, is likely to commit an offence. The narrower strand accepts that a police officer's experience may inform his or her belief but contends that the court cannot assess the reasonableness of the grounds for the It is said that, absent belief unless the experience is particularised. particularisation, the court cannot exclude the possibility that "arbitrary assumptions" are at play. The submission is apt to suggest that the experience on which Constable Blansjaar relied may have been based upon arbitrary assumptions about the behaviour of Aboriginal persons. That submission does not take account of the conduct of the proceedings below. The cross-examiner did not raise with Constable Blansjaar the features of his policing experience or Mr Prior's general demeanour or behaviour on which Constable Blansjaar's belief in the likely commission of the Liquor Act offence was based. It was not put to Constable Blansjaar that he acted on the basis of assumptions about the conduct of Aboriginal persons. It was not put to Constable Blansjaar that the decision to apprehend Mr Prior was a reaction to his offensive gesture or abuse of the police. The evidence that the initial response of the police to Mr Prior's conduct in drinking alcohol in a regulated place and making the offensive gesture was to issue him with an infringement notice was unchallenged. Any invitation to infer that Constable Blansjaar's reliance on his policing experience may have cloaked racial or other prejudice should not be accepted. likely to behave was Mr Prior is right to submit that Constable Blansjaar's belief about how he, in part by Mr Prior, was Constable Blansjaar's experience of other people. This is not to accept that it is irrational to take into account observed patterns of human behaviour in predicting the likely behaviour of an individual. In the circumstances of this case, we do not consider that the lack of particulars of Constable Blansjaar's experience can be said to have deprived the Court of Appeal of the capacity to assess the reasonableness of the grounds of his belief. informed at least The Court of Appeal drew the inference from Constable Blansjaar's evidence that the experience of which he spoke was of dealing with intoxicated people who were, for that reason, behaving in the aggressive, abusive way in which Mr Prior was behaving26. This was a fair inference to draw. The Court of Appeal accepted that Mr Prior's judgment was impaired by his intoxication27. 26 Mole v Prior (2016) 304 FLR 418 at 435 [74]. 27 Mole v Prior (2016) 304 FLR 418 at 434 [72]. Bell The Court of Appeal considered that it was reasonable, based on his experience in dealing with people whose judgment is impaired by intoxication, for Constable Blansjaar to believe that informing Mr Prior that he was not allowed to drink alcohol in that location was unlikely to achieve the desired result. The Court of Appeal considered that it was reasonable, based on his experience in intoxication, for dealing with people whose Constable Blansjaar to believe that Mr Prior's likely reaction in his intoxicated condition to having his alcohol confiscated would be to procure more alcohol and to continue drinking where he was. The Court of Appeal's capacity to assess the reasonableness of these conclusions did not depend upon, and was unlikely to be advanced by, an account of Constable Blansjaar's history of dealing with intoxicated persons. The assessment is one about which reasonable minds may differ, but in our view the Court of Appeal's finding was open to it. impaired by judgment The alternative ground Mr Prior relies on an alternative ground which accepts that the preconditions for the exercise of the s 128 power were met but contends that the decision to apprehend him nonetheless exceeded the limits of the power. To apprehend Mr Prior and take him into custody based on a belief that he was likely to commit an offence which is punishable by no more than forfeiture of the alcohol and the issue of a contravention notice is challenged as having been out of all proportion to the protective purposes for which the power is conferred. No basis apart from the nature of the offence that it was believed Mr Prior was likely to commit is identified in support of the contention that the decision to apprehend him was taken for a "disproportionate and illegitimate purpose", a contention which was not put below. The purposes of the power include protection of the intoxicated person and other persons and the prevention of the commission of offences by intoxicated persons. Section 128(1) in its current form was inserted with the object among other objects of preventing the commission of alcohol-related offences28. This object is not confined to the prevention of offences punishable by imprisonment29. It was within the scope of the power to take Mr Prior into custody in circumstances in which Constable Blansjaar had reasonable grounds for believing that because of Mr Prior's intoxication he was likely to continue drinking alcohol at a regulated place. For these reasons, we would dismiss the appeal. 28 Alcohol Reform (Prevention of Alcohol-related Crime and Substance Misuse) Act 2011 (NT), ss 3, 84. 29 Section 116(6) of the PAA defines "offence" for the purposes of Pt VII, which includes s 128, to include any offence triable summarily. Principle Personal liberty is "the most elementary and important of all common law rights"30. Critical to its preservation is that "the circumstances in which a police officer may, without judicial warrant, arrest or detain an individual should be strictly confined, plainly stated and readily ascertainable"31. Section 128(1) of the Police Administration Act (NT) adheres to that precept. The provision does so in the precondition it imposes for the exercise of the power it confers on a member of the Police Force, without warrant, to apprehend a person and to take that person into what can be described as "protective" custody32. The power is expressed to arise only "if the member has reasonable grounds for believing" the matters specified in each of the three lettered paragraphs of that provision. What is required to satisfy a precondition expressed in those "widely used"33 terms was spelt out in George v Rockett34. First, the member must have an actual subjective belief in the existence of each of the specified matters. Belief is more than "suspicion"; it is not merely an "apprehension" or even a "fear"; it is an actual "inclination of the mind"35. Second, the subjective belief of the member must be a belief that is formed by the member by reference to objective circumstances. The relevant objective circumstances are those known to and taken into account by the member in forming the belief. That is not to say that those circumstances might not include information provided to the member by someone else36. Nor is it to say that the formation of the belief by reference to those circumstances might not involve an 30 Trobridge v Hardy (1955) 94 CLR 147 at 152; [1955] HCA 68; Williams v The Queen (1986) 161 CLR 278 at 292; [1986] HCA 88. 31 Donaldson v Broomby (1982) 40 ALR 525 at 526. 32 Cf North Australian Aboriginal Justice Agency Ltd v Northern Territory (2015) 256 CLR 569 at 602-603 [69]; [2015] HCA 41. 33 Cf McKinnon v Secretary, Department of Treasury (2006) 228 CLR 423 at 429 [10]; [2006] HCA 45. 34 (1990) 170 CLR 104; [1990] HCA 26. 35 George v Rockett (1990) 170 CLR 104 at 115-116. 36 Cf Liversidge v Anderson [1942] AC 206 at 242; O'Hara v Chief Constable of the Royal Ulster Constabulary [1997] AC 286 at 298. element of surmise or conjecture on the part of the member37. Third, the objective circumstances by reference to which the belief is formed must be such as can be determined by a court to be "sufficient to induce that state of mind in a reasonable person"38. Even if the formation of the belief might involve an element of surmise or conjecture on the part of the member, the sufficiency of the objective circumstances to induce that belief in a reasonable person must be capable of appearing to the satisfaction of a court. For a court to resolve a controversy as to whether the precondition was met in a case where a member of the Police Force, without warrant, has in fact apprehended a person and taken that person into custody, the court must look in the first instance into the mind of the member of the Police Force who purported to exercise the power. Two initial questions arise. What was his belief? What were the objective circumstances by reference to which he formed that belief? Other evidence might shed light on the objective circumstances. Only his evidence can identify them directly. Having identified the objective circumstances by reference to which the member of the Police Force who purported to exercise the power formed his subjective belief, and assuming that subjective belief to be in the existence of matters specified in each of the three lettered paragraphs of s 128(1), the court must then ask and answer the third and critical question. Did those objective circumstances provide a sufficient foundation for a reasonable person to form the requisite state of mind, being a belief in (and not merely a suspicion of) the existence of the matters in s 128(1)(a) and (b) and of one or more of the matters in s 128(1)(c)(i) to (iv)? The manner in which the court answers the third of those questions is central to realisation of the legislative purpose of the precondition of guarding against an arbitrary deprivation of liberty. To answer that third question, the court must assess the identified circumstances for itself. Reference to the member's actual process of reasoning might assist that assessment. But this is not an occasion on which a court can be justified in giving weight to the opinion of the repository whose exercise of power is the subject of judicial review39. The whole point of requiring "reasonable grounds" for the requisite belief is to ensure that the reasonableness of the belief appear to a court and not merely to the 37 George v Rockett (1990) 170 CLR 104 at 116. 38 George v Rockett (1990) 170 CLR 104 at 112. 39 Cf R v Williams; Ex parte Australian Building Construction Employees' and Builders Labourers' Federation (1982) 153 CLR 402 at 411; [1982] HCA 68. member40. That the member, as an experienced member of the Police Force, might have thought that his belief was reasonable is not to the point41. The member's belief in the reasonableness of his own belief is not relevant to the task of the court. The court must arrive at its own independent answer through its own independent assessment of the objective circumstances which the member took into account. Application The member of the Police Force who purported to exercise the power conferred by s 128(1) of the Police Administration Act to apprehend Mr Prior and take him into custody was Constable Blansjaar. Analysis must in the first instance be directed to his state of mind. Constable Blansjaar believed that Mr Prior was intoxicated and in a public place. His belief was in those respects objectively based and unquestionably objectively correct. There is no issue that Constable Blansjaar had reasonable grounds for believing the matters specified in s 128(1)(a) and (b). Constable Blansjaar also believed that Mr Prior, because of his intoxication, might intimidate or alarm or cause substantial annoyance to members of the public, and was likely to continue to consume liquor where he was, a public place within 2 km of licensed premises, in contravention of s 101U(1) of the Liquor Act (NT). That belief, in the existence of matters specified in the Police Administration Act in s 128(1)(c)(iii) or (iv) respectively, is more problematic. The principal issue confronting this Court, putting itself for the purposes of this appeal in the position of the Court of Appeal of the Supreme Court of the Northern Territory, is whether the objective circumstances which Constable Blansjaar identified in his evidence as the foundation for his belief in the existence of those matters were sufficient to lead a reasonable person to form that belief. Constable Blansjaar did not know Mr Prior. He had not been told anything about Mr Prior. What Constable Blansjaar believed about Mr Prior was based solely on his observation of Mr Prior in the few minutes before he 40 Cf George v Rockett (1990) 170 CLR 104 at 112-113; Liversidge v Anderson [1942] AC 206 at 237. 41 Bradley v The Commonwealth (1973) 128 CLR 557 at 574-575; [1973] HCA 34; McKinnon v Secretary, Department of Treasury (2006) 228 CLR 423 at 429 [10]; Liversidge v Anderson [1942] AC 206 at 239, 243. apprehended Mr Prior near the shops in Westralia Street in Darwin shortly after 3.30pm on 31 December 2013. What Constable Blansjaar observed of Mr Prior in those few minutes is not very complicated and can be summed up quite shortly. Mr Prior was standing, and his two companions were sitting, on the pavement only 20 metres from a bottle shop. They were in possession of alcohol. Mr Prior was obviously intoxicated. Mr Prior was angry and abusive towards Constable Blansjaar and Constable Fuss. Constable Blansjaar's brief observations, in my opinion, were insufficient to lead a reasonable person to form the belief that Mr Prior might intimidate or alarm or cause substantial annoyance to any member of the public. Constable Blansjaar's observations, in my opinion, were also insufficient to lead a reasonable person to form the belief that Mr Prior was likely to continue to consume liquor, if left where he was, in contravention of s 101U(1) of the Liquor Act. To explain why I consider Constable Blansjaar's observations to have been insufficient to lead a reasonable person to form the requisite belief, I need to refer in more detail to the objective circumstances. Doing so, it is best that I address each of the two problematic aspects of Constable Blansjaar's belief separately. Constable Blansjaar formed his belief that Mr Prior might cause alarm to members of the public, if left where he was, by reference to Mr Prior's anger and abuse. Important to recognise in assessing the reasonableness of that belief is that, from the beginning to the end of Constable Blansjaar's observations of him, Mr Prior's anger and abuse were directed solely towards Constable Blansjaar and Constable Fuss. Mr Prior's gesturing and shouting to them as they drove by on patrol caused Constable Blansjaar and Constable Fuss to turn their police car around and come back to him. The long and the short of what then happened, as recorded in a written statement made by Constable Blansjaar, which he agreed in cross-examination was substantially correct, was as follows: "Fuss and I immediately approached the defendant. Whilst speaking to him in relation to his behaviour it was apparent to me that he had been drinking alcohol and was affected by liquor. The defendant's breath smelled strongly of liquor and his general appearance was dishevelled. His eyes were bloodshot and he was very belligerent to Fuss and I. When Fuss ... asked the defendant why he was making insulting hand gestures towards us the defendant stated: 'Because youse are just cunts and last week you gave me the finger'. I immediately informed the defendant I was now taking him into protective custody." Constable Blansjaar gave evidence that he was not himself intimidated or alarmed by Mr Prior's conduct. Never has it been suggested that Constable Fuss was intimidated or alarmed or that Mr Prior caused annoyance to Constable Blansjaar or Constable Fuss. There were members of the public in the vicinity who evidently saw the encounter unfold between Mr Prior and the two constables. The only evidence of any of them reacting to the encounter was evidence about a young family whose car was parked close by. Constable Blansjaar described them as having showed signs of alarm. He referred to the parents grabbing their children, putting them in the car and driving off. He said that they drove off shortly after Mr Prior had been taken into custody and "while we were placing him in the cage". The inference is at least equally available that their alarm was caused by Mr Prior's apprehension as it was by his behaviour. The primary judge thought, as did the Court of Appeal, that Mr Prior's behaviour towards the two constables "showed that his judgment was noticeably impaired and that he did not appreciate the effect that his behaviour was having on others"42. That may be accepted. But his behaviour was not suggestive of a disposition to try to annoy anyone other than a member of the Police Force. Mr Prior's anger and abuse, directed as it was solely towards Constable Blansjaar and Constable Fuss, was not enough to lead a reasonable person to form the belief that he might intimidate or alarm or cause substantial annoyance to any member of the public. Constable Blansjaar and Constable Fuss poured out all of the alcohol which Mr Prior and his two companions had in their possession. The foundation for Constable Blansjaar's belief, that Mr Prior was nevertheless likely to continue to consume liquor in contravention of s 101U(1) of the Liquor Act, was explored in the cross-examination of Constable Blansjaar as follows: "You knew nothing about his background?---Knew nothing about him or his history. You therefore had no reason to think that a direction to simply stop drinking would have been ineffective, did you?---Well he's drinking in a public place, he's already committing an offence. What I'm asking you is you had no reason to think that if you just said look, can you stop drinking, ... you're not allowed to drink here, that would have been effective?---Just his general demeanour. My experience as a police officer tells me that there's a good chance if we left he would 42 Prior v Mole [2015] NTSC 65 at [24]; Mole v Prior (2016) 304 FLR 418 at 434 simply purchase more alcohol at the bottle shop 20 metres away and continue drinking. But this wasn't a person that you know had done that before, was it?---No, That was just an assumption that you made, wasn't it?---Well the assumption was based on a very short dealing but his behaviour during that was very telling. But you would agree, wouldn't you, that it was an assumption?---If you're referring to knowledge of his history, I guess you could say an assumption but it's an educated assumption made on the circumstances right down there and my experience." Behind the "educated assumption", which Constable Blansjaar referred to himself as having made, might well be observed patterns of behaviour. Understanding those observed patterns of behaviour might well lead a reasonable person observing the behaviour of Mr Prior to conclude that he would simply purchase more alcohol at the bottle shop 20 metres away and continue drinking. The problem is that no relevant patterns of behaviour were disclosed by the evidence of Constable Blansjaar. Unless disclosed, they are not available to be taken into account in undertaking an independent assessment of the objective circumstances which Constable Blansjaar took into account as the foundation for his belief about Mr Prior. The Court of Appeal referred to Constable Blansjaar being entitled to take into account "experience over many years of the patterns of behaviour of people found intoxicated, drinking in the daytime in public areas close to liquor outlets"43. So he was. But Constable Blansjaar's experience cannot assist an independent determination of the critical question of whether his observation of Mr Prior provided a sufficient foundation for a reasonable person to form the belief that Constable Blansjaar in fact formed unless Constable Blansjaar's experience was explained by him. That explanation was wholly lacking. Without further explanation of the experience to which he was referring, for Constable Blansjaar to say, in effect, "I formed my belief as an experienced policeman" is no more helpful to a court undertaking its own assessment of whether the objective circumstances which Constable Blansjaar observed and which he took into account in forming his belief about Mr Prior were sufficient to induce that state of mind in a reasonable person than if he had simply said "I formed my belief as a policeman". 43 Mole v Prior (2016) 304 FLR 418 at 430 [53]. The Court of Appeal noted evidence of Constable Fuss, based on his own experience as a police officer, to the effect that a person who is intoxicated in a public place near a liquor outlet is likely to continue drinking "if they've still got money on them"44. Even if Constable Fuss's experience could be attributed to Constable Blansjaar, there are difficulties with it. Taken at face value, without qualification as to the time, the place and the current and antecedent behaviour of the person in question, Constable Fuss's experience gives rise to a generalisation that is too broad to allow a reasonable person comfortably to predict the future behaviour of a particular person. There might have been more to Constable Fuss's experience, but what more there might be was also unexplained. Even if Constable Fuss's experience, were it to be adequately explained, might be sufficient to allow a prediction about the likelihood of a person who is intoxicated in a public place near a liquor outlet continuing to drink if he has money on him, there would remain difficulties about extrapolating from that experience to predict such a likelihood in the particular circumstances of Mr Prior. One of them is that no consideration appears to have been given to whether Mr Prior in fact had money on him. Another is that any objective assessment of the likelihood of Mr Prior purchasing more alcohol needed to take account of the prohibition imposed by s 102 of the Liquor Act on the sale of alcohol to a person who is drunk. There was no evidence to suggest that anyone working at the nearby bottle shop might disregard that prohibition. Without being so naΓ―ve as to think that a person intoxicated in a public place in the middle of the afternoon on New Year's Eve might not continue drinking, I am also not so naΓ―ve as to think that a member of the Police Force on patrol in the middle of the afternoon on New Year's Eve finding himself abused by an intoxicated person in a public place might not be inclined to nip a possible crime in the bud rather than to wait around to see if the possibility ripened into a likelihood. The facts of the case illustrate the importance of the independent curial assessment that is statutorily required. Making my own independent assessment, I consider there to have been an insufficient basis in the objective circumstances as disclosed by evidence to found a reasonable belief (as distinct from a reasonable suspicion) that Mr Prior was likely to have continued to consume liquor in contravention of s 101U(1) of the Liquor Act at the time Constable Blansjaar took him into custody. That Mr Prior had most likely already been consuming liquor in contravention of that provision before his encounter with Constable Blansjaar and Constable Fuss, that he was obviously intoxicated, and that he was angry and abusive towards the 44 Mole v Prior (2016) 304 FLR 418 at 430 [53]. constables do not alone or in combination make it reasonable to conclude that the likelihood was that Mr Prior would somehow have obtained more alcohol and would have continued to consume it in a public place within 2 km of licensed premises β in contravention of that prohibition β if he had not been apprehended. Conclusion The result is that I would allow the appeal and set aside the order of the Court of Appeal. That would have the effect of reinstating the order of Southwood J, which quashed Mr Prior's convictions for offences he is alleged to have committed while in custody and acquitted him of those offences. Nettle NETTLE J. In the middle of the afternoon on New Year's Eve in 2013, Mr Prior ("the appellant"), an Aboriginal man, and two other men of Aboriginal descent were drinking liquor in front of the Westralia Street shops in Darwin, Northern Territory. The appellant was situated on the footpath between two licensed premises which sold liquor. By consuming liquor in that place45, the appellant was committing an offence against s 101U(1) of the Liquor Act (NT). The following description of the events that ensued emerges from the judgments of the courts below46. Constables Fuss and Blansjaar of the Northern Territory Police Force drove past the Westralia Street shops in a marked police car. As they did, the appellant gestured at them with the middle finger of his right hand, while shouting at them in an angry, abusive and defiant manner. Constable Fuss, who was driving the police car, made a U-turn so as to park the car in front of where the appellant was standing. As Constable Fuss parked the car, the appellant sat down on a window ledge and picked up a large plastic bottle containing red wine. Constable Blansjaar observed several bottles of beer in the area where the three men were sitting. Constable Blansjaar got out of the police car and approached the appellant. He had a brief conversation with him and inspected the contents of the plastic bottle. Section 101Y of the Liquor Act empowered Constable Blansjaar, if he believed on reasonable grounds that the appellant was committing an offence under s 101U(1), to seize any open or unopened container, which there was reason to believe contained liquor, in the appellant's possession or immediate vicinity and empty or destroy the container. Having determined that the plastic bottle contained red wine, Constable Blansjaar poured out the contents and put the bottle into a nearby rubbish bin. Constable Fuss then began writing out an infringement notice pursuant to s 101V of the Liquor Act. The penalty attaching to an offence of consuming liquor in a regulated place contrary to s 101U(1) was the forfeiture of the seized liquor. An offence of causing nuisance while consuming liquor in a regulated place contrary to s 101V carried a maximum penalty of five penalty units47. Constable Blansjaar asked the appellant to speak with him at the police car. The appellant complied. He was unsteady on his feet, although not staggering, and he smelled strongly of liquor. His eyes were bloodshot and his appearance dishevelled. Constable Fuss asked the appellant why he had gestured 45 Liquor Act (NT), s 101T(1)(a). 46 Mole v Prior (2016) 304 FLR 418 at 419-420 [1]-[8]; Prior v Mole [2015] NTSC 47 Liquor Act, ss 101U(2), 101V(1). Nettle at and abused them. The appellant replied: "because you are all cunts and you gave me the finger last week". The police officers also asked the appellant why he was consuming liquor in a regulated place. His response was belligerent and aggressive, and he was slurring his words. The appellant's behaviour and judgment were noticeably impaired and he did not appear to appreciate the effect of his behaviour on members of the public who were present. The parents of two children who were nearby appeared alarmed and placed their children quickly into their car. They told Constable Fuss that what they were hearing was "not nice". After observing and speaking to the appellant, Constable Blansjaar determined to place the appellant into protective custody under s 128(1) of the Police Administration Act (NT), which provides that: "A member may, without warrant, apprehend a person and take the person into custody if the member has reasonable grounds for believing: the person is intoxicated; and the person is in a public place or trespassing on private property; and because of the person's intoxication, the person: is unable to adequately care for himself or herself and it is not practicable at that time for the person to be cared for by someone else; or (ii) may cause harm to himself or herself or someone else; or (iii) may intimidate, alarm or cause substantial annoyance to people; or is likely to commit an offence." Constable Blansjaar's evidence was that he placed the appellant into protective custody because the appellant was intoxicated (s 128(1)(a)); was in a public place (s 128(1)(b)); had already committed an offence by consuming liquor in a regulated place contrary to s 101U(1) of the Liquor Act; would have defied any direction by the police officers to stop consuming liquor in that place; therefore, was likely to have continued to commit an offence under s 101U(1) (s 128(1)(c)(iv)); and might also have intimidated, alarmed or caused substantial annoyance to other people (s 128(1)(c)(iii)). After the appellant was told that he was being taken into protective custody, he became more abusive. Constable Blansjaar called for an additional police unit equipped with a car with a "cage on the back" to transport the Nettle appellant to the police station. Constable Mole and Sergeant O'Donnell answered the call. After they arrived, Constable Blansjaar told the appellant that he would be conveyed to the police station in the cage. The appellant picked up his backpack and walked to the rear of the vehicle. At that point, Constable Blansjaar took the backpack from the appellant. Sergeant O'Donnell asked the appellant to hand over the mobile phone in his possession. The appellant refused, saying that he wanted to call his wife. He was told he would have an opportunity to call a sober adult when they arrived at the police station. The appellant became angry and more aggressive, and repeatedly called Sergeant O'Donnell a "dog cunt". Sergeant O'Donnell then forcibly removed the mobile phone from the appellant's hand. As the appellant was being placed in the cage, he hawked back as if to spit at the police officers and, as the officers moved back to close the door, the appellant spat in Sergeant O'Donnell's face and on his shirt. The appellant was placed under arrest for assaulting Sergeant O'Donnell in the course of his duty. Sergeant O'Donnell and Constable Mole drove in the vehicle transporting the appellant, while Constables Blansjaar and Fuss followed behind in the police car. As both vehicles stopped at traffic lights at the intersection of Westralia Street and Stuart Highway, the appellant continued to shout abuse and to spit. He stood up in the cage, undid his zipper, withdrew his penis and attempted to urinate on the police car occupied by Constables Blansjaar and Fuss. The proceedings before the Supreme Court of the Northern Territory The appellant was convicted in the Court of Summary Jurisdiction of unlawfully assaulting a police officer (Count 2) and of behaving in an indecent manner in a public place (Count 3)48. He was acquitted of behaving in a disorderly manner in a public place (Count 1)49. The appellant appealed to the Supreme Court against conviction on grounds that the Magistrate had erred in finding his apprehension under s 128 of the Police Administration Act to be lawful and that the evidence going to Counts 2 and 3 should have been excluded in a proper exercise of the discretion under s 138 of the Evidence (National Uniform Legislation) Act (NT). Southwood J ("the primary judge") rejected the first of those grounds of appeal. His Honour was not satisfied that the prosecution had proved that there were reasonable grounds for Constable Blansjaar to believe, for the purpose of s 128(1)(c)(iii), that the appellant would intimidate, alarm or substantially annoy 48 Count 3 (behaving in an indecent manner contrary to s 47(a) of the Summary Offences Act (NT)) related to the appellant's attempt to urinate on the police car. 49 Count 1 (behaving in a disorderly manner contrary to s 47(a) of the Summary Offences Act) related to the appellant's behaviour at the Westralia Street shops. Nettle other people50. But his Honour was satisfied that the prosecution had proved beyond reasonable doubt that: (1) the appellant was intoxicated within the meaning of s 127A of the Police Administration Act51; (2) there were reasonable grounds for Constable Blansjaar to believe that the appellant was intoxicated and that, if he were not apprehended, he may continue to consume liquor in a regulated place contrary to s 101U(1) of the Liquor Act52; and (3) Constable Blansjaar held the belief required by s 128 of the Police Administration Act to justify the appellant's apprehension. Consequently, the primary judge held that Constable Blansjaar had lawfully apprehended the appellant53. Despite that, however, the primary judge allowed the appeal on the ground that, although intoxicated for the purpose of s 127A of the Police Administration Act, the appellant was "not seriously affected by alcohol" and, although it was likely the appellant would have continued to consume liquor in the same place had he not been apprehended, it was unlikely that he would have engaged in any other offending54. It followed, the primary judge held, that, although lawful under s 128 of the Police Administration Act, the appellant's apprehension was unnecessary and, as such, inconsistent with the minimum standards of acceptable police conduct55. Therefore, the Magistrate should have excluded the evidence of the appellant's assault on Sergeant O'Donnell and his conduct said to constitute indecent behaviour, pursuant to s 138 of the Evidence (National Uniform Legislation) Act, as evidence which had been improperly obtained or obtained in consequence of an impropriety56. The proceedings before the Court of Appeal There were two principal issues in the Court of Appeal. The first was whether the appellant was lawfully apprehended under s 128 of the Police Administration Act. The second was whether, if the appellant were lawfully apprehended, the evidence concerning Counts 2 and 3 should have been excluded under s 138 of the Evidence (National Uniform Legislation) Act on the basis that 50 Prior v Mole [2015] NTSC 65 at [37]. 51 Prior v Mole [2015] NTSC 65 at [43]. 52 Prior v Mole [2015] NTSC 65 at [36]. 53 Prior v Mole [2015] NTSC 65 at [36], [44]. 54 Prior v Mole [2015] NTSC 65 at [70]. 55 Prior v Mole [2015] NTSC 65 at [50], [70]-[71]. 56 Prior v Mole [2015] NTSC 65 at [71]. Nettle his apprehension was unnecessary and that Constable Blansjaar's conduct in apprehending him thereby failed to comply with the minimum standards of acceptable police conduct. The Court of Appeal held unanimously that the apprehension of the appellant under s 128 was lawful57. Their Honours found no error in the primary judge's conclusion that it was established beyond reasonable doubt that there were reasonable grounds for Constable Blansjaar's belief that the appellant was intoxicated and was likely to commit a further offence of consuming liquor in a regulated place contrary to s 101U(1) of the Liquor Act58. In contrast to the primary judge, however, the Court of Appeal held that there was also a rational basis for Constable Blansjaar to believe that, if the appellant were permitted to remain at the Westralia Street shops, he may intimidate, alarm or cause substantial annoyance to other people59. In the result, the Court of Appeal held that the primary judge was in error in ruling that the evidence concerning Counts 2 and 3 should have been excluded under s 138 of the Evidence (National Uniform Legislation) Act60. Their Honours accepted that a police officer contemplating placing an individual into protective custody must keep in mind that protective custody should only be used as a last resort61, and that it is desirable, where it is practicable to do so, for police officers actively to consider alternative courses and to ask relevant questions in order to assess the situation62. But their Honours held that it is not a pre- condition of the exercise of the power under s 128 of the Police Administration Act that a police officer must in every case turn his or her mind to such "The circumstances are almost infinitely variable and sometimes an experienced police officer will know from the person's behaviour and 57 Mole v Prior (2016) 304 FLR 418 at 435 [75], [77]. 58 Mole v Prior (2016) 304 FLR 418 at 434-435 [72]-[75]. 59 Mole v Prior (2016) 304 FLR 418 at 432 [62]. 60 Mole v Prior (2016) 304 FLR 418 at 431 [56]. 61 Mole v Prior (2016) 304 FLR 418 at 428 [42], [43]. 62 Mole v Prior (2016) 304 FLR 418 at 429-430 [51]-[52]. 63 Mole v Prior (2016) 304 FLR 418 at 429-430 [51], 430-431 [55]. 64 Mole v Prior (2016) 304 FLR 418 at 429-430 [51]. Nettle other surrounding circumstances, that protective custody is the only available option." The Court of Appeal added that the police officers in this case appeared to have "acted to a certain degree on stereotyping the [appellant]"65. But, apart from observing that stereotyping is "highly undesirable", their Honours did not go on to explain what they meant by that description. The appellant's contentions Before this Court, the appellant contended that the Court of Appeal erred in holding that there were reasonable grounds for Constable Blansjaar's asserted belief that the appellant's intoxication would have led him to continue consuming liquor in the same regulated place, or to intimidate, alarm or cause substantial annoyance to other people. In particular, it was submitted that the Court of Appeal erred in holding that Constable Blansjaar was entitled to act on the basis of his experience with other offenders. Counsel for the appellant argued that a police officer's previous experience of other persons, as opposed to his or her experience of the particular person to be apprehended, cannot rationally bear on the question whether the particular person is likely to commit an offence. Consequently, it was not enough, for the purpose of identifying reasonable grounds for his belief under s 128 of the Police Administration Act, for Constable Blansjaar to rely upon the appellant's "general demeanour" or "behaviour"; "the circumstances" surrounding the appellant's apprehension; his "experience as a police officer"; or an "educated assumption" based on that experience. Alternatively, it was said that, in any event, the fact that Constable Blansjaar had observed the appellant consuming liquor and behaving in a belligerent and abusive manner was insufficient basis to found a reasonable belief that the appellant would continue to consume liquor in the same way. The evidence was clear that Constable Blansjaar had poured out the appellant's wine. There was no evidence that the appellant had means to purchase any more alcohol. And, since the appellant was intoxicated, it would have been an offence for the proprietor of either of the licensed premises to sell the appellant alcohol. It was further contended that, apart from the appellant's intoxication ο which of itself did not provide reasonable grounds to place the appellant into protective custody ο there was no basis from which to infer that the appellant might intimidate, alarm or cause substantial annoyance to other people, or commit any further offence. In particular, there was no evidence that the appellant had intimidated, alarmed or caused substantial annoyance to other people prior to his apprehension. The most the evidence showed was that the 65 Mole v Prior (2016) 304 FLR 418 at 430 [53]. Nettle appellant had behaved towards the police officers in a disorderly and offensive manner. And, in the absence of admissible evidence that the appellant had intimidated, alarmed or caused substantial annoyance to others, there was not a rational basis to suppose that he may continue to do so. Lastly, in the appellant's contention, it was apparent that what the Court of Appeal meant by its reference to "stereotyping the [appellant]" was that Constable Blansjaar's actions had been influenced by a prejudice against Aboriginal persons, and it was submitted that prejudice of that kind could not ever be regarded as a reasonable basis for placing an offender into protective custody under s 128 of the Police Administration Act. The appellant's behaviour and the circumstances surrounding his apprehension The appellant's contentions as to the relevance of Constable Blansjaar's previous experience as a police officer should be rejected. A police officer may, and ordinarily is expected to, bring to bear his or her previous experience as an aid in the detection and policing of past and anticipated offending. Where past experience has taught that identified circumstances coincide with particular kinds of offending, it is logical and reasonable to infer that the occurrence of similar circumstances entails a possibility of coincident similar offending. The appellant's submission that the Court of Appeal suggested that Constable Blansjaar acted on the basis of racial stereotypes, and that such improper reasoning could not be excised from the belief upon which Constable Blansjaar acted, should also be rejected. The appellant did not contend before the Magistrate or the primary judge that Constable Blansjaar was prejudiced against Aboriginal persons. Nor did the appellant's counsel cross-examine Constable Blansjaar to the effect that his decision to apprehend the appellant was the product of such prejudice. In those circumstances, it was not open to the appellant to allege racial prejudice for the first time on appeal. Furthermore, whatever the Court of Appeal may have meant by "stereotyping", it does not appear to have involved prejudice. As has been seen, their Honours concluded that the belief Constable Blansjaar acted upon in apprehending the appellant was justified on the basis of the appellant's behaviour and Constable Blansjaar's experience, over a significant number of years, of similar offending66. Granted, experience may sometimes breed prejudice, which is regrettable. Prejudice is irrational and does not afford reasonable grounds for decision- making, and in the case of a police officer it is unacceptable. But knowledge born of experience is not irrational ο it is empirical ο and, depending on the experience of a police officer, may properly comprise a significant part of the 66 Mole v Prior (2016) 304 FLR 418 at 430 [53]. Nettle officer's crime detection and prevention armoury. For example, a police officer might use knowledge based on previous experience to identify particular circumstances and behaviour that support a belief on reasonable grounds that observed individuals have engaged in a drug transaction67. A further example was posed by counsel for the appellant in oral argument: it might be open to a police officer to believe on reasonable grounds that a visibly intoxicated person walking towards a car holding what appear to be keys to a car might be about to commit an offence of driving under the influence of alcohol68. Accordingly, where a police officer encounters circumstances of a kind which, by reason of his or her previous experience, he or she rationally associates with an identified class of committed or anticipated offending, the occurrence of those circumstances may reasonably lead the officer to conclude that there is a significant probability of that identified class of offending taking place. As was observed by the United States Supreme Court in Terry v Ohio69, although little weight can be given to an officer's "inchoate and unparticularized suspicion or 'hunch'"70, due weight must be given to the specific reasonable inferences which a police officer is entitled to draw from the facts in light of his or her experience71. Contrary to the appellant's submissions, therefore, it is not correct that the only experience that could logically be regarded as indicative of how the appellant might behave was experience of how the appellant himself had behaved in the past. Nor was it necessary for Constable Blansjaar to identify precisely each fact and circumstance that he took into account, by inference or deduction, in forming the view that the appellant should be placed into protective custody. It was sufficient, for the purpose of the court's assessment of his evidence, for Constable Blansjaar to outline, as he did, his past experience and his pertinent observations of the appellant and the surrounding circumstances. As he deposed, he had 12 years of experience of the patterns of behaviour of people found drinking liquor in public places in close proximity to licensed premises, displaying aggressive and abusive behaviour indicative of intoxication and a consequent lack of judgment. His experience was that, despite being directed to 67 See and compare, for example, Azar v Director of Public Prosecutions (NSW) (2014) 239 A Crim R 75 at 83-84 [38]-[39]; R v Dam (2015) 123 SASR 511 at 521 68 See and compare Davies v Waldron [1989] VR 449; Macdonald v Bain 1954 SLT (Sh Ct) 30. 70 392 US 1 at 27 (1968) per Warren CJ (delivering the opinion of the Court). 71 See also United States v Cortez 449 US 411 at 418 (1981); Illinois v Wardlow 528 US 119 at 122-125 (2000). Nettle stop, such persons would continue to consume liquor. In essential respects, the appellant was no different from those other offenders upon whom Constable Blansjaar's experience was based. The appellant was drunk, disinhibited, abusive and blatantly consuming liquor in a conspicuous public place in close proximity to licensed premises. Additionally, that particular place was known to Constable Blansjaar, from his experience as a police officer, as a site where liquor was consumed illegally. On those bases, Constable Blansjaar came to the view that the appellant would have continued to drink and behave as he had unless taken into protective custody. It is true that there was no direct evidence that the appellant had sufficient money to purchase more alcohol, or that one of the two licensed premises would have been prepared to sell it to him. But, even if he did not, and they would not, there was reason to suspect that the men with whom the appellant was sitting might keep him supplied. Granted, the test of reasonable grounds for a belief is objective72. But, depending on the circumstances, belief may leave "something to surmise or conjecture"73. And, as was stated in George v Rockett74, while the objective circumstances necessary to found reasonable grounds to believe must point sufficiently to the subject matter of that belief, they need not be established on the balance of probabilities. Although it is unnecessary to decide, it may be that it was less likely the appellant would intimidate, alarm or cause substantial annoyance to others if he was not apprehended, than it was that he would continue to consume liquor in a regulated place. The only direct evidence that any person had been alarmed by the appellant's conduct up to the point of his apprehension was the evidence that two parents, appearing alarmed and concerned for their children, reacted to the way in which the appellant spoke to the police officers. Seemingly, that was more a reaction to what happened after the officers informed the appellant that he would be taken to the police station than to anything which the appellant had said or done before that point and, necessarily, before the point at which Constable Blansjaar formed the view that the appellant should be taken into protective custody. It is possible that, if the police had given the appellant an infringement notice and departed the scene, he would have continued to consume liquor in the same place but without causing further alarm or annoyance. But, at the same time, it would hardly be surprising or unreasonable to think that at least some 72 McKinnon v Secretary, Department of Treasury (2006) 228 CLR 423 at 429 [10] per Gleeson CJ and Kirby J; [2006] HCA 45. 73 George v Rockett (1990) 170 CLR 104 at 116; [1990] HCA 26. 74 (1990) 170 CLR 104 at 116. Nettle members of the public, particularly the elderly or children, may be alarmed by an intoxicated person drinking in a public place on the footpath between licensed premises in a strip of shops in the middle of the afternoon, or that other members of the public may be substantially annoyed that such behaviour is permitted to continue after the intoxicated person has been expressly directed by police officers to cease and desist. That may be so regardless of whether the intoxicated person is aggressive or belligerent towards those members of the public directly. Police officers in Constable Blansjaar's position are warranted to take account of that possibility and to act accordingly. Excess of power Counsel for the appellant argued in the alternative that, if Constable Blansjaar had power under s 128 of the Police Administration Act to take the appellant into protective custody, the most likely anticipated further offence of continuing to consume liquor in a regulated place was of such a minor nature that taking the appellant into custody on that basis was a disproportionate exercise of the power and, as such, an abuse of power. That argument should also be rejected. No doubt, where it is necessary for a police officer to deal with an offender in respect of a minor offence, a question will arise as to whether it is unreasonable for the police officer to arrest the offender rather than to proceed by way of summons. Several members of this Court made mention of that in North Australian Aboriginal Justice Agency Ltd v Northern Territory75 in relation to the power of detention under Div 4AA of Pt VII of the Police Administration Act. But, unlike Div 4AA of Pt VII, protective custody under s 128 is not directed to dealing with an offender in respect of offending which has already been committed. Section 128(1) was inserted, in its present form, into the Police Administration Act by the Alcohol Reform (Prevention of Alcohol-related Crime and Substance Misuse) Act 2011 (NT) with the express object of preventing the commission of alcohol-related offences, preventing the misuse of alcohol and protecting people from harm or nuisance resulting from the misuse of alcohol by others76. It is consistent with the object of that legislation, and not excessive or unreasonable, that, where a police officer finds an offender in a drunk, disorderly and abusive state, drinking in a regulated place in contravention of the Liquor Act, in such circumstances that it appears on reasonable grounds that, unless the offender is taken into protective custody, he or she may continue to drink there, a police officer is 75 (2015) 256 CLR 569 at 612 [99] per Gageler J, 652-653 [241] per Nettle and Gordon JJ; [2015] HCA 41. 76 Alcohol Reform (Prevention of Alcohol-related Crime and Substance Misuse) Act 2011 (NT), ss 3, 84. Nettle justified in taking the offender into protective custody for the protection of the offender and for the protection of others. Conclusion and orders For these reasons, the appeal should be dismissed. GORDON J. Anthony Prior was in a public place β on the footpath in front of the Westralia Street shops in Darwin and between two shops that sold alcohol β drinking red wine. He was with two other Aboriginal men. He was intoxicated. As a police car drove past, he gestured to the police officers with the middle finger of his right hand (that is, he gave them "the bird") and shouted abuse at them. Constables Blansjaar and Fuss parked the car in front of the men and got out. Constable Blansjaar poured out the contents of the bottles of alcohol. Constable Fuss began writing out an infringement notice for Mr Prior for drinking alcohol in a regulated place and causing a nuisance contrary to s 101V of the Liquor Act (NT). The police asked Mr Prior to speak to them at their car and he walked to the police car. He was a bit unsteady on his feet but not staggering, smelled strongly of liquor, had bloodshot eyes and was dishevelled. In response to questions from the police about why he had given them "the bird" and abused them, Mr Prior was belligerent and aggressive, swore and slurred his words. Two parents nearby with their children told Constable Fuss that what they were hearing was not nice. Constable Blansjaar ("the Apprehending Officer") apprehended Mr Prior and took him into custody under s 128(1) of the Police Administration Act (NT) ("the PA Act"), which provides: "A member [of the Police Force77] may, without warrant, apprehend a person and take the person into custody if the member has reasonable grounds for believing: the person is intoxicated; and the person is in a public place or trespassing on private property; and because of the person's intoxication, the person: is unable to adequately care for himself or herself and it is not practicable at that time for the person to be cared for by someone else; or (ii) may cause harm to himself or herself or someone else; or (iii) may intimidate, alarm or cause substantial annoyance to people; or 77 See s 4(1) of the PA Act. is likely to commit an offence." Mr Prior was charged with three offences for conduct that occurred following his apprehension. It was alleged that he unlawfully assaulted a police officer in the execution of the officer's duty contrary to s 189A of the Criminal Code (NT) when he spat twice on a sergeant whilst he was being placed in a caged vehicle ("count 2"). It was also alleged that he behaved in a disorderly manner in a public place contrary to s 47(a) of the Summary Offences Act (NT) ("count 1"), and that he behaved in an indecent manner in a public place contrary to s 47(a) of the Summary Offences Act ("count 3") when he stood up in the back of the caged vehicle, unzipped his jeans, withdrew his penis and attempted to urinate on the police car occupied by the Apprehending Officer and Constable Fuss. It was not contested that the elements of s 128(1)(a) and (b) of the PA Act were satisfied β Mr Prior was intoxicated in a public place. The central issue on appeal to this Court was whether, at the time of Mr Prior's apprehension under s 128(1) of the PA Act, the Apprehending Officer had reasonable grounds for believing intoxication, Mr Prior may have "intimidate[d], alarm[ed] or cause[d] substantial annoyance to people" or was "likely to commit an offence" within the meaning of s 128(1)(c)(iii) or (iv) of the PA Act. that, because of Mr Prior's If the Apprehending Officer did not have that subjective belief and did not hold that subjective belief on reasonable grounds at the time he apprehended Mr Prior, Mr Prior's apprehension would not have been lawful. And if Mr Prior's apprehension was not lawful, then the respondent accepted both that the assaulted police officer would not have been acting in the execution of his duty when he was spat on78, and that it was open for the evidence of all the charged conduct to be found inadmissible under s 138(1) of the Evidence (National Uniform Legislation) Act (NT) ("the Evidence Act")79. For the reasons that follow, the appeal to this Court should be dismissed. The apprehension of Mr Prior was lawful. Decisions below In the Court of Summary Jurisdiction, Mr Prior was acquitted of count 1 but convicted of counts 2 and 3. Mr Prior appealed against his convictions to the Supreme Court of the Northern Territory. That appeal was by way of rehearing. 78 See Coleman v Power (2004) 220 CLR 1 at 57-58 [118]-[121]; [2004] HCA 39. 79 cf Parker v Comptroller-General of Customs (2009) 83 ALJR 494 at 501 [30]; 252 ALR 619 at 627; [2009] HCA 7. Southwood J held that Mr Prior's apprehension under s 128(1) was lawful80. His Honour was not satisfied that the prosecution had proved that there were reasonable grounds for the Apprehending Officer to have formed the opinion that Mr Prior's behaviour at the time would intimidate, alarm or cause substantial annoyance to any other person81. His Honour did make a finding that the prosecution had proved (a) that Mr Prior was intoxicated within the meaning of s 127A of the PA Act; (b) that there were reasonable grounds for the Apprehending Officer to believe that Mr Prior was intoxicated and, if the police left Mr Prior at the shops, he would likely commit an offence under s 101U of the Liquor Act for drinking in a regulated place; and (c) that the Apprehending Officer held the requisite belief82. However, Southwood J also held that the apprehension, while lawful, was ill-advised and unnecessary when regard was had to General Orders issued by the Commissioner of the Northern Territory Police, which provided that arrest was an "action of last resort"83. His Honour held that evidence of the charged conduct was therefore obtained in consequence of an impropriety, and that it should have been excluded under s 138(1) of the Evidence Act84. Accordingly, Southwood J allowed the appeal, set aside Mr Prior's convictions on counts 2 and 3 and acquitted him of those counts. The prosecution appealed to the Court of Appeal of the Northern Territory. The Court of Appeal (Riley CJ, Kelly and Hiley JJ) allowed the appeal and reinstated the findings of guilt and the entry of conviction on counts 2 and 3. Among other findings, the Court of Appeal rejected Southwood J's conclusion in respect of impropriety under s 138(1)85. That issue was not the subject of a grant of special leave to appeal to this Court. The ground of appeal in this Court in relation to the Evidence Act is limited to whether the apprehension was unlawful and therefore "in contravention of an Australian law" within the meaning of s 138(1) of the Evidence Act. 80 Prior v Mole [2015] NTSC 65 at [36]. 81 Prior v Mole [2015] NTSC 65 at [37]. 82 Prior v Mole [2015] NTSC 65 at [28], [36]. 83 Prior v Mole [2015] NTSC 65 at [48], [70]-[71]. 84 Prior v Mole [2015] NTSC 65 at [70]-[71]. 85 Mole v Prior (2016) 304 FLR 418 at 430-431 [54]-[56]. Statutory framework Section 128 is in Pt VII of the PA Act, which deals with police powers. Division 3 of that Part is titled "Arrest", while Div 4 β which contains s 128 β is titled "Apprehension without arrest". The text of s 128(1) has been set out earlier. For the purposes of Div 4 of Pt VII, s 127A provides that "a person is intoxicated if: (a) the person's speech, balance, coordination or behaviour appears to be noticeably impaired; and (b) it is reasonable in the circumstances to believe the impairment results from the consumption or use of alcohol or a drug". As stated earlier, there is no dispute that s 128(1)(a) was satisfied. There is also no dispute that Mr Prior was in a "public place" and that s 128(1)(b) was satisfied. That leaves s 128(1)(c). If s 128(1)(a) and (b) are satisfied, a member of the Police Force may apprehend a person and take the person into custody if the member has reasonable grounds for believing, because of the person's intoxication, the person satisfies one of the criteria in s 128(1)(c)(i) to (iv). At the time of the apprehension, the member must hold a relevant subjective belief and that subjective belief must be based on identifiable grounds and those grounds must be reasonable86. It is necessary to say something further about each of these matters. Subjective belief As already noted, the member must hold a relevant subjective belief. But it is important to stress that the belief held by the member must be that, because of the person's intoxication, one of the matters set out in s 128(1)(c) is engaged. It is not enough that a member have the belief that a person "may intimidate, alarm or cause substantial annoyance to people" or "is likely to commit an offence". The belief held by the member must be that, because of the person's intoxication, the person "may intimidate, alarm or cause substantial annoyance to people" or "is likely to commit an offence". The importance of the link between the person's intoxication and the matters in s 128(1)(c) is reinforced by s 129. Subject to the other provisions in Div 4 of Pt VII, s 129 limits the period of detention for a person apprehended and taken into custody under s 128(1). The person can be held in custody "only for so long as it reasonably appears to the member of the Police Force in whose 86 See Stuart v Kirkland-Veenstra (2009) 237 CLR 215 at 240 [56]; [2009] HCA 15. custody [they are] held that the person remains intoxicated"87. Once it "reasonably appears ... that the person is no longer intoxicated", the person must be released from custody88. Section 129, together with s 130 β which prohibits a person from being charged with an offence or questioned in relation to an offence while in custody after apprehension under s 128(1) β reflects the "evident protective function served by Div 4"89: the evident function being both the protection of an intoxicated person from themselves and the protection of other people; the protection being necessary because of certain things the intoxicated person is unable to or might do as a result of their intoxication. Reasonable grounds Next, for the member to have the power to apprehend a person under s 128(1), the member must have "reasonable grounds" for holding the requisite belief. When a statute prescribes that there must be "reasonable grounds" for a state of mind, it requires the existence of facts sufficient to induce that state of mind in a reasonable person90. It is an objective test91. The question is not whether the relevant person thinks they have reasonable grounds92. In explaining the connection between the "reasonable grounds" and the requisite "belief", this Court in George v Rockett stated93: "The objective circumstances sufficient to show a reason to believe something need to point more clearly to the subject matter of the belief, but that is not to say that the objective circumstances must establish on the balance of probabilities that the subject matter in fact occurred or exists: the assent of belief is given on more slender evidence than proof." 87 s 129(1) of the PA Act. 88 s 129(2) of the PA Act. 89 North Australian Aboriginal Justice Agency Ltd v Northern Territory (2015) 256 CLR 569 at 602 [69]; [2015] HCA 41. 90 George v Rockett (1990) 170 CLR 104 at 112; [1990] HCA 26. 91 McKinnon v Secretary, Department of Treasury (2006) 228 CLR 423 at 429 [10]; [2006] HCA 45. 92 McKinnon (2006) 228 CLR 423 at 429 [10]. 93 (1990) 170 CLR 104 at 116. Belief is not certainty. "Belief is an inclination of the mind towards assenting to, rather than rejecting, a proposition and the grounds which can reasonably induce that inclination of the mind may, depending on the circumstances, leave something to surmise or conjecture"94. Those considerations are important in this appeal. The matters set out in s 128(1)(c)(iii) and (iv) are the "subject matter" of the belief. That subject matter necessarily involves an element of opinion and judgment95 β a predictive opinion and judgment about what the person (here, Mr Prior) may or is likely to do in the future. That opinion and judgment is related to, but separate from, the objective facts and circumstances. Together, they constitute all of the relevant circumstances for assessing the reasonableness of the grounds. Accordingly, when considering whether there were reasonable grounds for the relevant belief for the purposes of s 128(1)(c)(iii) and (iv), matters of both fact and opinion must be considered96. Apprehending Officer's decision That the Apprehending Officer had formed a subjective belief, and the content of that subjective belief, were not in dispute. The subjective belief has been set out earlier in these reasons97. Further, there was no dispute that the Apprehending Officer's decision to apprehend Mr Prior under s 128(1) of the PA Act was based on three circumstances: the behaviour of Mr Prior at the relevant time, which was aggressive, abusive and indicative of intoxication, displayed a lack of judgment and included drinking in a public place in the presence of police98; the Apprehending Officer's experience over many years of the patterns of behaviour of people found intoxicated, drinking in the daytime in public 94 George v Rockett (1990) 170 CLR 104 at 116. 95 See McKinnon (2006) 228 CLR 423 at 430 [12]. 96 See McKinnon (2006) 228 CLR 423 at 430 [12]. 97 See [87] above. 98 Mole v Prior (2016) 304 FLR 418 at 430 [53], 432 [62], 434 [72]. areas close to liquor outlets, and displaying similar behaviour to that of the presence of members of the public who appeared to be alarmed by Mr Prior's actions100. Against that background, it is necessary to turn to consider s 128(1)(c)(iii) and (iv) separately. It is appropriate to consider sub-par (iv) before sub-par (iii). "Likely to commit an offence" β s 128(1)(c)(iv) Were there reasonable grounds for the Apprehending Officer to form the belief that Mr Prior, because of his intoxication, was likely to commit an offence? First, it is necessary to identify the offence. For the purpose of s 128(1)(c)(iv), "offence" is relevantly defined to include "a crime, a felony, a misdemeanour and any offence triable summarily" and includes "an offence against a law ... of the Territory"101. The offence relied on in this appeal was that provided by s 101U(1) of the Liquor Act. Under s 101U(1) of the Liquor Act, "[a] person commits an offence if the person consumes liquor at a regulated place". A "regulated place" relevantly includes a place that is within 2km of licensed premises and is in a public place102. The circumstances and matters on which the Apprehending Officer relied in forming the subjective belief that Mr Prior, because of his intoxication, was likely to commit an offence against s 101U(1) of the Liquor Act have been set out earlier103. Those circumstances and matters must be considered together104. Mr Prior submitted that the Apprehending Officer's reference to, and reliance on, Mr Prior's "behaviour" and "the circumstances" were not sufficiently particularised to rationally bear upon "general demeanour", his 99 Mole v Prior (2016) 304 FLR 418 at 430 [53], 435 [74]. 100 Prior v Mole [2015] NTSC 65 at [27]. See also Mole v Prior (2016) 304 FLR 418 101 s 116(6) of the PA Act. 102 s 101T(1)(a) of the Liquor Act. 103 See [103] above. 104 McKinnon (2006) 228 CLR 423 at 430 [12]. the matters in s 128(1)(c)(iii) or (iv). That submission should be rejected. The circumstances and matters identified by the Apprehending Officer would induce a reasonable person to be inclined to accept, rather than reject, the proposition that Mr Prior, because of his intoxication, was likely to commit an offence of drinking alcohol in a regulated place contrary to s 101U(1) of the Liquor Act. First, there were the observations that the Apprehending Officer made of Mr Prior. Mr Prior was intoxicated. He was aggressive and abusive. He swore at the police. His judgment was impaired. There is no dispute that, prior to his apprehension, Mr Prior was drinking liquor in a regulated place and that he was committing an offence against s 101U(1) of the Liquor Act. Even though it is an offence to sell liquor to a person who is drunk105, there were two bottle shops nearby where liquor was available to be purchased. But, of course, that was not all. The Apprehending Officer relied upon his 12 or 13 years' experience as a police officer to predict that there was a good chance that if the police left, Mr Prior would simply purchase more alcohol at the bottle shop 20 metres away and continue drinking. The Apprehending Officer did not know Mr Prior before the incident, but made an "educated assumption", based on Mr Prior's behaviour, the circumstances and his own experience, that it was "most likely" that Mr Prior would have purchased more alcohol when the police left. The Apprehending Officer's prior policing experience was a, not the, basis for his belief. Moreover, the Apprehending Officer's prior policing experience was not relied upon in a vacuum. It was experience relied upon in the context and "the circumstances". of Mr Prior's demeanour", "behaviour" "general his And it must be recalled that the Apprehending Officer's reference to and reliance on Mr Prior's "general demeanour", his "behaviour" and "the circumstances" occurred in the context of the Apprehending Officer considering what activities Mr Prior "may" or was "likely to" engage in within a relatively short space of time after police left the scene. It was a predictive judgment. It was dealing with what might happen, not what would certainly happen. The behaviour that the Apprehending Officer predicted β drinking alcohol in a regulated place β was what Mr Prior had been doing. Mr Prior was intoxicated and his judgment was noticeably impaired. As the Court of Appeal found, an absence of evidence that Mr Prior had the means to purchase more alcohol, or that it would be sold to him despite his intoxication, did not deny the 105 See s 102 of the Liquor Act. "[D]runk" is defined in s 7 of the Liquor Act relevantly identically to "intoxicated" in s 127A of the PA Act. existence of the relevant belief106 or suggest that the grounds relied on by the Apprehending Officer were not sufficient to induce that state of mind in a reasonable person. Mr Prior submitted that the inclusion in the "reasonable grounds" for the relevant belief of the Apprehending Officer's prior policing experience of persons who "exhibited similar characteristics" to Mr Prior was impermissible on two bases. First, it was an irrelevant and improper consideration because, given the very short period of contact between the Apprehending Officer and Mr Prior, there was an inference open to be drawn that the Apprehending Officer had "stereotyped" Mr Prior; and, second, there was an absence of particulars of the Apprehending Officer's experience to provide any basis for relying on that experience. In respect of the second basis of his submission, Mr Prior accepted that an apprehending officer could rely upon their experience but submitted that the experience might not assist in establishing that the grounds were reasonable. Both of those contentions should be rejected. Mr Prior did not contend at trial that the Apprehending Officer "stereotyped" Mr Prior, and did not cross-examine the Apprehending Officer about Mr Prior's "characteristics" or how they were relevant to or affected the Apprehending Officer's belief. In particular, it was not contended at trial, and it was not put to the Apprehending Officer in cross-examination, that Mr Prior was apprehended, or treated in a particular manner, because he was an Aboriginal person. Questions about Mr Prior's characteristics and how they were relevant to or affected the Apprehending Officer's belief (if at all) should have been addressed and considered at trial. The same is true for issues of whether the Apprehending Officer than apprehending Mr Prior, such as asking Mr Prior about his personal circumstances β for example, where he lived and whether someone was able to collect him; those being issues that are said to be relevant to Mr Prior's submission that his apprehension was a disproportionate exercise of the power under s 128(1). That submission is considered below. to consider options other turned his mind Put another way, the power of the police to apprehend a person under s 128(1) is only to be exercised for the purposes for which the power is granted and, therefore, only for a legitimate reason107. If the apprehension is unlawful, then actions in assault, trespass and false imprisonment may lie108. 106 Mole v Prior (2016) 304 FLR 418 at 434 [69]-[70]. 107 cf NAAJA (2015) 256 CLR 569 at 652-653 [241]. 108 cf NAAJA (2015) 256 CLR 569 at 653 [241]. These kinds of facts and matters may be relevant in assessing whether an apprehension under s 128(1) was lawful and, in particular, in identifying an apprehending officer's subjective belief, the grounds on which that belief was held and whether those grounds were reasonable. And if these kinds of facts and matters are considered relevant, then they should be raised at trial and the apprehending officer should be cross-examined about them. The matter may be tested this way. If a police officer sees a person who is drinking alcohol in public, apparently intoxicated, aggressive and abusive and displaying the lack of judgment associated with being intoxicated, and, having poured that person's alcohol down the gutter, that officer concludes that it is likely that the intoxicated person will endeavour to obtain more alcohol to keep drinking, that may be described as a predictive opinion and judgment based on the police officer's own observations and some assumptions about the human behaviour of intoxicated persons. That was what occurred here. The decision of the Apprehending Officer to place Mr Prior in custody under s 128(1) was based on Mr Prior's behaviour at the time, described above. That behaviour not only was observed by the Apprehending Officer but was directed at him and the other police officer. Then, the Apprehending Officer's prior policing experience, by reference the Apprehending Officer predicted what a person exhibiting that kind of behaviour may do, or was likely to do, in the near future. The contention that there was an absence of particulars of the Apprehending Officer's experience to provide any basis for relying on that experience should be rejected109. Mr Prior's apprehension was lawful. His appeal should be dismissed. intimidate, alarm or cause substantial annoyance "May s 128(1)(c)(iii) to people" β Although it is strictly unnecessary to consider whether there were reasonable grounds for the Apprehending Officer to form the further belief that Mr Prior, because of his intoxication, might intimidate, alarm or cause substantial annoyance to people, it is appropriate to make the following observations. In the Supreme Court, Southwood J referred to the fact that the Apprehending Officer's evidence was that he had formed the opinion that Mr Prior's behaviour at the time would intimidate, alarm or cause substantial annoyance to any other person and there were members of the public present110. The behaviour referred to and relied upon by the Apprehending Officer was that, 109 See [110] above. 110 Prior v Mole [2015] NTSC 65 at [28], [36]. in response to questions from the police about why Mr Prior had given them "the bird", he abused them, was belligerent and aggressive, swore and slurred his words. However, Southwood J went on to note that Mr Prior's behaviour "seem[ed] to have been solely directed at the police who were not alarmed or intimidated"111. The facts suggest that his behaviour was a direct consequence of being questioned by the police. Indeed, one of the key reasons the officers stopped him initially was that Mr Prior gave them "the bird" and abused them as they drove past. Before the arrival of the police, there had been no complaints or reports about the behaviour of Mr Prior. The Court of Appeal noted that the initial abuse and gesture to the police car was "unprovoked"112. The Court of Appeal considered that this was a basis on which the relevant belief could be formed because Mr Prior might "similarly confront others passing by or entering and leaving the shops"113. But the evidence was that, when asked by the police why he gave them "the bird", Mr Prior swore at them and said it was because "you gave me the finger last week"114. Mr Prior's behaviour was directed towards the police. He had done nothing to indicate that he would engage in similar behaviour with people who were not the police. There was no evidence upon which a reasonable person would be induced to be inclined to accept, rather than reject, the proposition that Mr Prior may intimidate, alarm or cause substantial annoyance to others because of his intoxication. There was no evidence upon which the condition in s 128(1)(c)(iii) could have been satisfied. But for the reliance on s 128(1)(c)(iv), Mr Prior's apprehension would have been unlawful. Exercise of s 128(1) power did not exceed limits of power Mr Prior submitted that, even if the pre-conditions to the exercise of the power of apprehension under s 128(1)(c)(iii) or (iv) were satisfied, his apprehension under s 128(1) of the PA Act was a disproportionate exercise of power that exceeded the purpose for which the statutory power was conferred, 111 Prior v Mole [2015] NTSC 65 at [27]. 112 Mole v Prior (2016) 304 FLR 418 at 432 [62]. 113 Mole v Prior (2016) 304 FLR 418 at 432 [62]. 114 Prior v Mole [2015] NTSC 65 at [20]. and was therefore unreasonable, an abuse of power and not a proper exercise of that power. That submission should also be rejected. The Apprehending Officer was required to, and did, identify his subjective belief. That belief was required to be held on "reasonable grounds". The requirement that there be "reasonable grounds" opens "many administrative decisions to judicial review and precludes the arbitrary exercise of many statutory powers"115. The legal standard of reasonableness is the standard indicated by the proper construction of the statute in issue116. Put another way, "[e]very statutory discretion is confined by the subject matter, scope and purpose of the legislation under which it is conferred"117. And, of course, an inference of unreasonableness may be objectively drawn even where a particular error in reasoning cannot be But judicial review for unreasonableness is not a vehicle for challenging a decision on the basis that the decision-maker has given insufficient or excessive consideration to some matters or has made an evaluative judgment with which a court disagrees even though that judgment was rationally open to the decision- maker119. And it does not provide a mechanism for later seeking to challenge a decision that, for whatever reason, was not challenged on particular grounds at trial. Unlike the "ill-defined" discretion considered by this Court in Minister for Immigration and Citizenship v Li120, s 128(1) of the PA Act specifies mandatory pre-conditions for the exercise of the power. Those mandatory pre-conditions do not include the seriousness of the likely future offence or an officer's options to address a person's past behaviour. That is not surprising. The purpose of the apprehension power in s 128(1) is to prevent the commission of alcohol-related offences and the misuse of alcohol, and to protect people from harm or nuisance 115 George v Rockett (1990) 170 CLR 104 at 112 citing Attorney-General v Reynolds 116 Minister for Immigration and Citizenship v Li (2013) 249 CLR 332 at 364 [67]; [2013] HCA 18. 117 Li (2013) 249 CLR 332 at 348 [23]; see also at 363-364 [67], 370-371 [90]. 118 Li (2013) 249 CLR 332 at 364 [68]. 119 Li (2013) 249 CLR 332 at 351 [30]. 120 (2013) 249 CLR 332 at 363 [67]. resulting from misuse of alcohol121. The power has both a protective and a preventative function. An exercise of the power for the purpose of preventing an intoxicated person, because of their intoxication, from possibly intimidating, alarming or causing substantial annoyance to people or from likely future consumption of alcohol in a regulated place is, upon the true construction of s 128(1) of the PA Act, within the bounds of legal reasonableness and a proper exercise of the power. That is what occurred here. Conclusion and order For those reasons, the appeal should be dismissed. 121 See s 3(1)(a), (b) and (d) of the Alcohol Reform (Prevention of Alcohol-related Crime and Substance Misuse) Act 2011 (NT). Section 128(1) of the PA Act in its current form was inserted by s 84 of the 2011 Act as a "consequential amendment" to the reforms introduced by that Act. See also Northern Territory, Legislative Assembly, Parliamentary Debates (Hansard), 30 March 2011. |
HIGH COURT OF AUSTRALIA COMMISSIONER OF POLICE APPELLANT AND DAVID GRANT EATON & ANOR RESPONDENTS Commissioner of Police v Eaton [2013] HCA 2 8 February 2013 ORDER Appeal allowed. Set aside orders (a), (b) and (c) of the Court of Appeal of the Supreme Court of New South Wales made on 6 March 2012 and, in their place, order that the appeal to the Court of Appeal be dismissed. Set aside the orders of the Full Bench of the Industrial Relations Commission of New South Wales made on 24 March 2012. The appellant pay the first respondent's costs of the proceedings in this Court. On appeal from the Supreme Court of New South Wales Representation M J Leeming SC with M C L Seck for the appellant (instructed by Bartier Perry) S Crawshaw SC with P F Lowson and A L Howell for the first respondent (instructed by Walter Madden Jenkins) Submitting appearance for the second respondent Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Commissioner of Police v Eaton Jurisdiction β Subject matter jurisdiction β Industrial Relations Commission of New South Wales ("IR Commission") β Probationary police officer dismissed by Commissioner of Police under s 80(3) of the Police Act 1990 (NSW) β Probationary police officer applied to IR Commission under s 84(1) of the Industrial Relations Act 1996 (NSW) claiming dismissal was harsh, unreasonable or unjust β Whether IR Commission has jurisdiction under Pt 6 of Ch 2 of the Industrial Relations Act to determine unfair dismissal claim regarding dismissal under s 80(3) of the Police Act. Statutes β Statutory interpretation β Implied repeal β Part 6 of Ch 2 of the Industrial Relations Act 1996 (NSW) allows public sector employees to challenge dismissal as harsh, unreasonable or unjust β Section 80(3) of the Police Act 1990 (NSW) permits Commissioner of Police to dismiss probationary police officers from the New South Wales Police Force at any time and without reason β Inconsistency and incoherence between provisions of the Industrial Relations Act and the Police Act β Whether Parliament intended the general provisions of the Industrial Relations Act to affect the operation of the earlier specific provisions of the Police Act. Words and phrases β "generalia specialibus non derogant", "harsh, unreasonable or unjust", "implied repeal", "legislative intention", "probationary police officer", "unfair dismissal". Industrial Relations Act 1996 (NSW), Ch 2 Pt 6, s 84(1). Police Act 1990 (NSW), Pt 9 Div 1C, ss 80(3), 218. HEYDON J. This is an appeal from a decision of the Court of Appeal of the Supreme Court of New South Wales ("the Court of Appeal"). The appellant is the Commissioner of Police ("the Commissioner"). David Grant Eaton ("the first respondent") is a probationary constable whom the Commissioner purportedly dismissed. The second respondent is the Industrial Relations Commission of New South Wales the interrelationship between two statutes. One is the Industrial Relations Act 1996 (NSW) ("the IR Act"). The other is the Police Act 1990 (NSW) ("the Police Act"). The appeal concerns ("the Commission"). Section 84(1) of the IR Act provides: "If an employer dismisses an employee and the employee claims that the dismissal is harsh, unreasonable or unjust, the employee may apply to the Commission for the claim to be dealt with under this Part [ie Ch 2 Pt 6]." Section 80 of the Police Act relevantly provides: "(1) The Commissioner may, subject to this Act and the regulations, appoint any person of good character and with satisfactory educational qualifications as a police officer of the rank of constable. (2) A person when first appointed as such a police officer is to be appointed on probation in accordance with the regulations. The Commissioner may dismiss any such probationary police officer from the NSW Police Force at any time and without giving any reason." Section 80 may be compared with another provision in the Police Act, s 181D. The parties correctly agreed that that section does not apply to remove probationary constables. non-probationary police officers. The s 80(3) power to dismiss probationary constables is much less restricted than the s 181D power to remove non-probationary police officers. Section 181D provides in part: Section 181D creates a power "(1) The Commissioner may, by order in writing, remove a police officer from the NSW Police Force if the Commissioner does not have confidence in the police officer's suitability to continue as a police officer, having regard to the police officer's competence, integrity, performance or conduct. Before making an order under this section, the Commissioner: (a) must give the police officer a notice setting out the grounds on which the Commissioner does not have confidence in the officer's suitability to continue as a police officer, and (b) must give the police officer at least 21 days within which to make written submissions to the Commissioner in relation to the proposed action, and (c) must take into consideration any written submissions received from the police officer during that period. The order must set out the reasons for which the Commissioner has decided to remove the police officer from the NSW Police Force." The s 80(3) power of dismissal can be exercised "at any time". The s 181D power of removal can be exercised only after notice has been given, an opportunity to make written submissions has been supplied, and the duty to take them into consideration has been carried out. The s 80(3) power can be exercised "without giving any reason." A notice issued under s 181D must set out the grounds on which the Commissioner proposes to remove the police officer. And if a police officer removed by a s 181D order applies to the Commission for a review of the order under s 181E(1) on the ground that the removal is harsh, unreasonable or unjust, the Commission's first duty is to consider those reasons. In contrast, s 88(b) of the IR Act creates only a power to consider the reasons for the dismissal of an employee which is the subject of a claim under s 84(1). The facts On 11 May 2007, the first respondent was appointed as a constable of police on probation in the NSW Police Force. From about April 2008, there were disputes between the first respondent and his superiors about his conduct. On 4 February 2009, Assistant Commissioner Corboy issued a notice foreshadowing the first respondent's dismissal from the Force pursuant to s 80(3) of the Police Act. On 22 July 2009, Assistant Commissioner Corboy, as the delegate of the Commissioner, dismissed the first respondent. The legal issue It was common ground that the power to dismiss probationary constables under s 80(3) of the Police Act and the power to remove non-probationary officers under s 181D are distinct. The former power cannot be employed in relation to non-probationary officers, and the latter power cannot be employed in relation to probationary constables. It was also common ground that the capacity of a removed non-probationary officer to obtain a review of the removal under s 181E did not apply to a dismissed probationary officer. And it was common ground that a decision to dismiss a probationary constable under s 80(3) is reviewable for jurisdictional error. In the Court of Appeal, that proposition was incorrectly treated as an answer to the Commissioner's case1. But the question is not whether a s 80(3) decision is reviewable in that sense. The question is whether, in addition, a s 80(3) decision can be challenged under s 84(1) of the IR Act. That legal issue arises in the following way. Sections 83 and 84(1) of the IR Act are in Ch 2 Pt 6. Section 83 provides that Pt 6 applies to the dismissal of any public sector employee. The Dictionary of the IR Act provides that "public sector employee" includes a member of the NSW Police Force. the A probationary constable NSW Police Force. Hence, if ss 83 and 84(1) of the IR Act are read in isolation, dismissed probationary constables would have a right to apply to the Commission for a claim that the dismissal was harsh, unreasonable or unjust to be dealt with under Ch 2 Pt 6 of the IR Act. But does the broad power which s 80(3) of the Police Act affords the Commissioner to dismiss probationary police officers like the first respondent mandate a different conclusion? is a member of The procedural background The first respondent's claim was upheld by the Commission. On appeal by the Commissioner, a Full Bench of the Commission (Walton VP, Marks and Kavanagh JJ) found that the Commission lacked jurisdiction. The first respondent sought judicial review pursuant to s 69 of the Supreme Court Act 1970 (NSW). The Court of Appeal quashed the decision and orders of the Full Bench and remitted the matter. The Full Bench then dismissed the Commissioner's appeal. The Commissioner appeals by special leave to this Court. The outcome The appeal turns on two main issues. One is the interaction between s 80(3) of the Police Act and Ch 2 Pt 6 of the IR Act. The other is the effect of s 218 of the Police Act. The Commissioner's appeal should be allowed. There is no jurisdiction in the Commission under s 84(1) of the IR Act to hear applications by persons dismissed under s 80(3) of the Police Act. That is so for the following four reasons. The terms of s 80(3) First, the language of s 80(3) points against the conferral of any jurisdiction on the Commission to deal with claims that a s 80(3) dismissal is 1 Eaton v Industrial Relations Commission of New South Wales [2012] NSWCA 30 harsh, unreasonable or unjust within the meaning of s 84(1) of the IR Act. Three key aspects of the language have this effect β "at any time", "without giving any reason" and "probationary". "At any time". The words "at any time" point against any examination of whether the selection of a time for dismissal was harsh, unreasonable or unjust. That is because dismissal can take place at any time. If the Police Act gives the Commissioner power to dismiss a probationary constable at any time there is no room for complaint that dismissal should not have taken place at a harsh, unreasonable or unjust time. The words "at any time" did not appear in the precursor to s 80(3), namely r 11(b) of the Police Rules 1977. The words are the same as those in s 9(1) of the Police Regulation Act 1958 (Vic), which Gibbs CJ described in 1985 as giving "an unfettered power to dismiss"2. The adoption by the New South Wales legislature of those words in 1990 suggests that they bear the meaning given to them by Gibbs CJ. "Without giving any reason". The next key expression is "without giving any reason". It is often impossible to assess whether a dismissal was harsh, unreasonable or unjust without examining the reasons for it. And in many instances it is impossible to assess what the reasons for a dismissal were unless the person who made the decision to dismiss states the reasons. The capacity of the Commissioner to dismiss probationary constables "without giving any reason" suggests that there is to be no examination of whatever the Commissioner's reasons were. Hence the light cast by them on the harshness, unreasonableness or injustice of the decision is unavailable. In turn, the harshness, unreasonableness or injustice must be immaterial to the lawfulness of the decision. Review of the dismissal is not available on one of those grounds. The first respondent submitted that the absence of an obligation to give reasons in s 80(3) was not significant. This was because there was no duty at common law to give reasons. But this case does not concern the common law. It concerns statutory construction. The lack of any duty to give reasons affects how the statutory scheme is to be construed. The relevant comparison is not between s 80(3) and the common law. It is between s 80(3) and the duty to give reasons under s 181D(4) of the Police Act. As the Full Bench pointed out, determining whether or not a dismissal from employment is harsh, unreasonable or unjust must involve an examination of the circumstances in which the dismissal occurred, including the reasons for and the timing of the dismissal. And as the Full Bench also pointed out, when an application under s 84(1) of the IR Act is heard, the Commission may, by reason of s 88(a) and (b) of the IR Act, take into account whether a reason was given for the dismissal, and, if so, whether that reason had a basis in fact. This task is difficult to carry out where the 2 O'Rourke v Miller (1985) 156 CLR 342 at 349; [1985] HCA 24. Commissioner has dismissed a probationary police officer under s 80(3) of the Police Act, for that provision permits dismissal without any reason3. The difficulty of carrying out that task suggests that it does not arise in relation to s 80(3) dismissals. The "Probationary". third key expression is "probationary". Section 80(2) of the Police Act provides that a person when first appointed as a constable is to be appointed on probation in accordance with the regulations. That is a reference to cll 12-14 of the Police Regulation 2008 (NSW). Clause 12 provides that the duration of the probationary period shall be one year, or such longer or shorter period as the Commissioner may direct, not being less than six months. Clause 13 provides: "Confirmation of appointment in the rank of constable is subject to: the successful completion of initial basic training, as determined by the Commissioner, and the completion of the period of probation, and a satisfactory fitness report, and the other requirements of this Division." Clause 14 provides in part: "(1) The appointment of a probationary constable is not to be confirmed unless a police officer designated by the Commissioner has reported that the probationary constable is fit to discharge satisfactorily the duties of constable. (2) Any such fitness report is to deal with the probationary constable's: (a) medical fitness β¦, and aptitude for the discharge of the duties of constable, and competence, integrity, performance and conduct." There are many occupations which attract the interest of young people but for which some young people turn out to be unsuitable because of some factor not readily identifiable in advance. One of those occupations is the occupation of police officer. Police officers have heavy responsibilities. They sometimes work 3 Commissioner of Police v Eaton (2011) 207 IR 209 at 219 [32] and [34]-[35]. under grave pressures. How satisfactorily particular individuals bear those responsibilities and stand up to those pressures can only be learned by experience. Hence most New South Wales police officers commence their careers by being probationary constables. Probation involves a process of putting to proof. It is a process of investigation and examination. A probationary period is a "period of testing or trial for the purpose of ascertaining whether [a person] has the necessary qualifications for a permanent appointment, and the word 'probation' itself involves the idea of something in the nature of trial and experiment with a view to determining whether an applicant is to be appointed."4 A probationary constable is one whose qualifications for non-probationary status are put to proof, investigated, examined, tested or tried. Those qualifications include aptitude, competence, integrity, performance and conduct. The probationary status of probationary constables is another factor pointing to the conclusion that s 84(1) of the IR Act does not extend to conferring on probationary constables a right to claim that a dismissal is harsh, unreasonable or unjust. The first respondent submitted that these arguments based on the language of s 80(3) of the Police Act were beside the point. He submitted that the Commission's power to review a dismissal should not be restricted by the nature of the power to dismiss. That is not so. The freedom with which an employer may dismiss can affect the capacity of an employee to challenge the dismissal. If, as Gibbs CJ said, a power to dismiss like s 80(3) of the Police Act is unfettered, then its exercise is necessarily immune from challenge on the ground of harshness, unreasonableness or unfairness. The first respondent also submitted that the power conferred by s 80(3) of the Police Act was similar to the power of dismissal held by employers at common law. That is not so either. At common law, depending on the terms of the contract of employment, there is a duty to give notice or pay damages in lieu. Remedies under s 89 of the IR Act A second reason for concluding that a dismissal under s 80(3) of the Police Act does not permit the dismissed probationary constable to make an application under s 84(1) of the IR Act stems from the remedies available if a s 84(1) claim is made out. Those remedies include an order for reinstatement under s 89(1) of the IR Act, for re-employment under s 89(2), for payment for lost remuneration under s 89(3), and for continuity of employment under s 89(4). As the Full Bench said, these remedies are "clearly inconsistent" with the Commissioner's powers under s 80(3). Section 80(3) "is clearly indicative of an 4 Ex parte Wurth; Re Tully (1954) 55 SR (NSW) 47 at 49 per Street CJ (Roper CJ in Eq concurring). authority that reposes in the Commissioner to dismiss a probationary police officer without interference of any kind."5 For the two reasons given so far, it is necessary to reject the first respondent's submission that there is no inconsistency between s 80(3) of the Police Act and Ch 2 Pt 6 of the IR Act. The generality of s 84(1) of the IR Act and the particularity of s 80(3) of the Police Act There is a third reason why the Commission has no jurisdiction under s 84(1) of the IR Act to hear applications by persons dismissed under s 80(3) of the Police Act. Section 80(3) of the Police Act deals with the specific and relatively narrow subject of dismissing probationary constables. Section 84(1) of the IR Act deals with the general subject of the remedies open to a broad range of employees dismissed harshly, unreasonably or unjustly. The general provision must give way to the particular provision. Section 80(3) of the Police Act compared with s 181D of the Police Act Fourthly, the Commissioner's powers under s 80(3) of the Police Act in relation to probationary constables stand in contrast with the Commissioner's powers under s 181D of the Police Act in relation to police officers. Section 181E of the Police Act provides that a non-probationary police officer who is removed from the NSW Police Force by an order under s 181D of the Police Act may apply to the Commission for a "review" of the order on the ground that the removal is harsh, unreasonable or unjust. That is a process which is distinct from the process of having a "claim" dealt with under s 84(1) of the IR Act. respects, In some the process under s 181E removed non-probationary police officer is superior to the process under s 84(1) for a dismissed employee. For example, s 181E(3) imposes a duty on the Commissioner to make available to the applicant all the documents and other material on which the Commissioner relied in deciding under s 181D(1) that the Commissioner did not have confidence in the applicant's suitability to continue as a police officer. The Commissioner is subject to no equivalent duty in relation to s 84(1) of the IR Act. for a In other respects the processes, whether superior or inferior from the point of view of the removed non-probationary police officer or the dismissed employee, are different. Thus s 181F(1) requires the Commission to proceed on 5 Commissioner of Police v Eaton (2011) 207 IR 209 at 219 [36] per Walton VP, a "review" in the following way. First, it must consider the Commissioner's reasons for the decision to remove the non-probationary police officer from the NSW Police Force. Secondly, it must consider the case presented by the applicant for the view that the removal was harsh, unreasonable or unjust. Thirdly, it must consider the case presented by the Commissioner in answer to the applicant's case. This stands in contrast with the procedure in relation to s 84(1) applications. Section 88 of the IR Act provides that the Commission "may, if appropriate", take into account six factors, the last of which is "such other matters as the Commission considers relevant." Liberty not to take account of a relevant matter gives the Commission fluidity. Its role, as the Commissioner submitted, is "very free flowing". If a probationary constable dismissed under s 80(3) of the Police Act could apply to the Commission under s 84(1) of the IR Act, that probationary constable would enjoy a right of review superior to that of a confirmed constable. Indeed, that probationary constable would enjoy a right of review superior to that of any police officer of higher rank. That would, in turn, produce remarkable anomalies. in a better position One anomaly is that if dismissed probationary constables could make than they would be applications under s 84(1) non-probationary officers. The rights of review s 181E gives to the latter in relation to s 181D removals would be more qualified than those s 84(1) gives to the former in relation to s 80(3) dismissals. In proceedings under s 84(1), where the dismissal has taken place because of alleged criminal activity, the employer bears the burden of proving that the crime was committed6. But in proceedings under s 181E for review on the ground that removal was harsh, unreasonable or unjust, the applicant bears the burden of proving that the crime was not committed. That is because the applicant has, under s 181F(2), the burden of establishing that the applicant's removal from the NSW Police Force was harsh, unreasonable or unjust. The consequences of s 181F(2) are not narrow or trivial. They are significant in view of the fact that s 201 of the Police Act renders it a criminal offence for a police officer to neglect or refuse to obey any lawful order or carry out any lawful duty as a police officer. The scope for criminal offences by police officers, and for removal because of them, is thus wide. Another anomaly stems from the fact that s 181F(3)(b) of the Police Act operates adversely to the applicant under s 181E reviews. Section 181F(3)(b) provides: 6 Wang v Crestell Industries Pty Ltd (1997) 73 IR 454 at 463. "Without limiting the matters to which the Commission is otherwise required or permitted to have regard in making its decision, the Commission must have regard to: the public interest (which is taken to include the interest of maintaining the integrity of the NSW Police Force, and the fact that the Commissioner made the order pursuant to section 181D(1))." This is a reference to the "public interest" in a different sense from the "public interest" referred to in s 146(2) of the IR Act. Section 146(2) requires the Commission to: "take into account the public interest in the exercise of its functions and, for that purpose, [the Commission] must have regard to: the objects of this Act, and the state of the economy of New South Wales and the likely effect of its decisions on that economy." The objects of the IR Act are stated in s 3. They are broad, but they relate essentially to industrial relations. The matters referred to in s 181F(3)(b) of the Police Act stand outside s 146(2) of the IR Act. The Commission's duty to have regard to the public interest as defined in s 181F(3)(b) is adverse to the interests of applicants seeking reviews under s 181E of orders made under s 181D. An applicant for a remedy under s 84(1) of the IR Act does not face that obstacle. Another relevant provision is s 181G of the Police Act. Sub-section (1) commences with the words: "The provisions of the [IR Act] apply to an application for a review under this Division in the same way as they apply to an application under Part 6 (Unfair dismissals) of Chapter 2 of that Act, subject to this Division and to the following modifications". Section 181G(1) is significant in two respects. One is that pars (a)-(f) of s 181G(1) apply six provisions of the IR Act in modified form to applications for review by non-probationary police officers. The other is that some of these modifications are adverse to the applicant seeking review under s 181E. For example, s 181G(1)(b) gives the applicant only 14 days within which to apply for review under s 181E, compared to the 21 days within which a claimant under s 84(1) of the IR Act can apply to have a claim dealt with. As the Full Bench said, on the first respondent's construction of the than IR Act, probationary constables "effectively [have] greater rights" non-probationary officers in the above respects7. The first respondent submitted that the practical consequences of the differences between the beneficial way that probationary constables would be treated on his case when compared to non-probationary police officers are not large. In a sense that may be true. But the differences do reveal a different statutory scheme and structure applying to s 84(1) applicants. That statutory scheme and structure creates a regime which in some respects is less beneficial to s 181E applicants than the Ch 2 Pt 6 scheme is to s 84(1) applicants. In view of the generally fragile position of probationary constables and the more secure position of other police officers, that is a significant anomaly. Probationary constables have relatively slight expectations, for they may not survive the probationary period of testing. Non-probationary police officers have relatively greater expectations, for the simple reason that they are not on probation. On the first respondent's case, those with slight expectations are given better means of protecting them than the means given to those with firmer expectations. The first respondent's construction of s 84(1) of the IR Act, which leads to this outcome, is extremely suspect for that reason. Instead of a coherent and harmonious scheme, it produces a self-contradictory scheme. A statutory scheme by which it is easier for the Commissioner to part with those endeavouring to show themselves fit for non-probationary office than it is for the Commissioner to part with those who once showed themselves fit but may have now become unfit is intelligible. The reverse scheme is not. The first respondent submitted that no provision in the Police Act expressly excluded merits review under Ch 2 Pt 6 of the IR Act by the Commission of a decision to dismiss a probationary police officer. The necessary implications of the two Acts read together, however, have that effect. Section 218 Section 218 of the Police Act provides: "(1) The [IR Act] is not affected by anything in this Act. Subsection (1) does not limit section 44 or 89 or any provision of the [IR Act]." This is a very difficult section. The parties agreed that the reference in s 218(2) to "89" must in fact be read as a reference to "88". So s 218(2) in effect provides 7 Commissioner of Police v Eaton (2011) 207 IR 209 at 225 [55] per Walton VP, in part that ss 44 and 88 of the Police Act can affect the IR Act. That is not the only problem with s 218. In view of s 218(1), which provides that the Police Act does not affect any provision in the IR Act, it is supererogatory for s 218(2) to provide that s 218(1) of the Police Act does not limit "any provision" of the IR Act. Perhaps more importantly, as the Full Bench correctly held, s 218(1) cannot mean what it says. There are specific provisions in the Police Act apart from s 44 and s 88 that have a direct impact on certain provisions of the IR Act. One example is s 179(1) of the Police Act. It provides: "In the application of Part 5 of Chapter 4 of the [IR Act] to proceedings under this Division, the provisions of sections 163, 167, 169(4), 172, 181 and 184 of that Act do not have effect." As the Full Bench said8: "In these circumstances, it cannot be said that the [IR] Act is not affected by anything in the [Police Act]. It is clearly affected. It is erroneous to argue that the provisions of s 179 of the [Police Act] have no effect because of the application of s 218 of the [Police] Act." The appellant gave numerous other examples, of which a few may be referred to. Section 181D(7) of the Police Act provides in part: "Except as provided by Division 1C: no tribunal has jurisdiction or power to review or consider any decision or order of the Commissioner under this section, and no appeal lies to any tribunal in connection with any decision or order of the Commissioner under this section." Section 181D(7) goes on to provide that the word "tribunal" includes the Commission. Other examples may be found in the modifications made by s 181G to the provisions of the IR Act in relation to reviews of decisions to remove non-probationary officers from the NSW Police Force. Because of provisions of this kind, the Full Bench reached the following conclusions, correctly, with respect9: 8 Commissioner of Police v Eaton (2011) 207 IR 209 at 226 [61] per Walton VP, 9 Commissioner of Police v Eaton (2011) 207 IR 209 at 226 [62]-[63] per Walton VP, Marks and Kavanagh JJ. "Accordingly, s 218 must have some β¦ meaning [other than its apparent meaning]. Its construction must be approached in the same manner adopted by the Court of Appeal in [Public Service Association (NSW) v Industrial Commission (NSW)10]. That is, positive statements about certain matters will have the necessary effect of negativing the jurisdiction and powers created by the [IR] Act. We would construe [s 218] as leaving intact the power of the Commission to deal with industrial matters covering police officers unless especially restricted by some provision of the [Police Act]." For the first respondent, s 218 presented no problem. He saw s 218 as giving the IR Act primacy over the Police Act in the event of inconsistency. But he contended that there was no inconsistency. For the reasons given above11, this denial of inconsistency is not correct. Hence the first respondent's approach to s 218 lacks any foundation. Section 405(3) The first respondent relied on s 405(3) of the IR Act. Section 405(1)(b) provides: "Any award or order of the Commission does not have effect to the extent that it is inconsistent with: a function under the [Police Act] with respect to the discipline, promotion or transfer of a police officer, or with respect to police officers who are hurt on duty." Section 405(3) provides: "This section does not affect any decision of the Commission under Part 6 of Chapter 2 (Unfair dismissals)." The appellant submitted that s 405 did not bestow unfair dismissal rights and was irrelevant to the appeal. The first respondent submitted: "While s 405(3) does not bestow unfair dismissal rights on probationary police officers, it avoids any argument that a decision of the [Commission] 10 (1985) 1 NSWLR 627. 11 See above at [32]-[34]. under Pt 6 of Ch 2 is inconsistent with a function under the Police Act with respect to the discipline of a police officer and thus may not be made because of the provisions of s 405(1)." The reasoning set out above does not rest on any argument of the kind that the first respondent described. Orders The appeal should be allowed. Orders (a), (b) and (c) made by the Court of Appeal of the Supreme Court of New South Wales on 6 March 2012 should be set aside and in lieu thereof the appeal should be dismissed and the orders made on 24 March 2012 by the Full Bench of the Industrial Relations Commission of New South Wales pursuant to the Court of Appeal's orders should be set aside. In accordance with the terms on which special leave was granted, the appellant is to pay the first respondent's costs in this Court and it should be noted that order (d) made by the Court of Appeal is not disturbed. CRENNAN, KIEFEL AND BELL JJ. The first respondent was attested as a constable on probation on 7 May 2007. He was still a probationary constable, his appointment not having been confirmed, when, on 22 July 2009, a delegate of the appellant, the Commissioner of Police ("the Commissioner"), dismissed him from the New South Wales Police Force12. An investigation which preceded his dismissal identified issues arising from the first respondent's concealment from his superiors of information relevant to his ability to cope with his policing workload. In the notice foreshadowing his dismissal, he was advised that his continued employment with the NSW Police Force was "inimical to the standards expected of police officers by the Parliament, the Commissioner and the community." In dismissing the first respondent, the Commissioner's delegate was exercising the power given by s 80(3) of the Police Act 1990 (NSW). The first respondent applied to the Industrial Relations Commission of New South Wales ("the IR Commission"), which is the second respondent in this appeal, under s 84(1) of the Industrial Relations Act 1996 (NSW) ("the IR Act") for a remedy on the basis that his dismissal was harsh, unreasonable or unjust. His claim was upheld and reinstatement ordered13. On the appeal brought by the Commissioner, a Full Bench of the IR Commission held that the IR Commission lacked jurisdiction and dismissed the first respondent's application14. The first respondent sought judicial review pursuant to s 69 of the Supreme Court Act 1970 (NSW). The Court of Appeal quashed the decision of the Full Bench, holding that the IR Commission had jurisdiction, and remitted the matter to the Full Bench of the IR Commission to be determined according to law15. By a grant of special leave, the Commissioner appeals to this Court. The issue The IR Act deals with industrial matters affecting employers and employees. The term "employee" is broadly defined16. Part 6 of Ch 2 (hereafter "Part 6") of the IR Act is titled "Unfair dismissals". It expressly applies to any 12 Referred to in the Police Act 1990 (NSW) and in these reasons as "the NSW Police Force". 13 David Eaton and Commissioner of Police [2010] NSWIRComm 1035 at [609]. 14 Commissioner of Police v Eaton (2011) 207 IR 209 at 224 [52], 227 [67]. 15 Eaton v Industrial Relations Commission of New South Wales [2012] NSWCA 30 16 Industrial Relations Act 1996 (NSW), s 5. "public sector employee"17, which term is defined to include a member of the NSW Police Force18. Section 84(1) provides: "If an employer dismisses an employee and the employee claims that the dismissal is harsh, unreasonable or unjust, the employee may apply to the Commission for the claim to be dealt with under this Part." On an application under s 84(1), the IR Commission may make orders for reinstatement, re-employment, remuneration or compensation19. Section 80 of the Police Act provides for the appointment, promotion and dismissal of constables. Sub-section (1) provides that the Commissioner may appoint any person of good character, and suitably qualified, as a police officer with the rank of constable. Sub-section (2) provides that, when first appointed, a police officer is to be appointed on probation in accordance with the regulations. Sub-section (3) provides: "The Commissioner may dismiss any such probationary police officer from the NSW Police Force at any time and without giving any reason." The Commissioner contends that the express terms of s 80(3) leave no doubt that the power given by s 80(3) is unfettered in respect of both reasons and timing. They are an immediate indication that the exercise of that power is not to be reviewed by reference to the harshness, unreasonableness or unjustness of the decision, which s 84(1) of the IR Act would allow. The Commissioner does not contend that a decision to dismiss a probationary constable under s 80(3) is exempt from all review and accepts that it is subject to judicial review. The Commissioner's argument is that the terms of the power to dismiss are incompatible with a decision made pursuant to it being subjected to review by the IR Commission under Pt 6 of the IR Act. 17 Industrial Relations Act 1996, s 83(1)(a). 18 Industrial Relations Act 1996, s 4, Dictionary. However, Pt 6 does not apply to a person who is an executive officer under Pt 5 of the Police Act 1990: Industrial Relations Act 1996, s 83(3). 19 Industrial Relations Act 1996, s 89. Approach to construction Some observations may first be made concerning the nature and the objects of the two statutes here in question as relevant to their construction. The IR Act is, as previously mentioned, a general statute applying to industrial relations between employers and employees. It may be accepted that, in many respects, it applies to the conditions of employment of police officers. Its objects include the promotion of efficiency and productivity in the economy of the State of New South Wales and provision for the resolution of industrial disputes20. The Police Act is concerned with the NSW Police Force, which it establishes21. Some of its provisions concern the maintenance of the integrity22 and discipline of the NSW Police Force23. To these observations it may be added that the Police Act was the earlier Act. The Police Act was enacted in 1990; the IR Act in 1996, although it had predecessors. Some provisions of the Police Act relating to review by the IR Commission were introduced consequent upon the coming into effect of Pt 6 of the IR Act in 199624. Argument on the appeal proceeded upon the basis that the two statutes should be read together25, in order to determine whether there is any relevant inconsistency in their respective operation. The question of the relationship between the two statutes is one of legislative intention. In Associated Minerals Consolidated Ltd v Wyong Shire Council26, Lord Wilberforce pointed to several possible interpretations where the field of application of two related statutes is 20 Industrial Relations Act 1996, s 3(b), (g). 21 Police Act 1990, s 4. 22 A stated value of the NSW Police Force: Police Act 1990, s 7. 23 See, for instance, Police Act 1990, ss 71, 82G, 97, 207A. 24 The Industrial Relations Act 1996 commenced on 2 September 1996; s 181D in Div 1B of Pt 9 of the Police Act 1990 commenced on 16 December 1996 and ss 181E-181J in Div 1C of Pt 9 commenced on 27 June 1997. 25 Sweeney v Fitzhardinge (1906) 4 CLR 716 at 726; [1906] HCA 73; Commissioner of Stamps (SA) v Telegraph Investment Co Pty Ltd (1995) 184 CLR 453 at 463; [1995] HCA 44. 26 [1975] AC 538 at 553. different, but where the later statute does not expressly repeal or override the earlier: "The problem is one of ascertaining the legislative intention: is it to leave the earlier statute intact, with autonomous application to its own subject matter; is it to override the earlier statute in case of any inconsistency between the two; is it to add an additional layer of legislation on top of the pre-existing legislation, so that each may operate within its respective field?" In the Court of Appeal, Handley AJA concluded, by reference to the above passage, that Pt 6 of the IR Act added another layer of legislation to the Police Lord Wilberforce went on to observe that discussion of these matters commonly involves consideration of the rule of construction28 which presumes that a later, general enactment is not intended to interfere with an earlier, special provision unless it manifests that intention very clearly. Even so, the question as to the operation of the statutes remains a matter to be gleaned by reference to legislative intention. That intention is to be extracted "from all available indications"29. In Ferdinands v Commissioner for Public Employment30 ("Ferdinands"), an indication of legislative intention was present in the extent to which the Police Act 1998 (SA) dealt with the topic of dismissal. That Act dealt exhaustively with the dismissal of police officers and therefore impliedly repealed the earlier Industrial and Employee Relations Act 1994 (SA). The legislation in Ferdinands differs from that presently under consideration. Nevertheless, statements respecting statutory construction made in that case are relevant to this appeal. 27 Eaton v Industrial Relations Commission of New South Wales [2012] NSWCA 30 at [45], Bathurst CJ agreeing at [1]. 28 Expressed in the maxim "generalia specialibus non derogant". 29 Associated Minerals Consolidated Ltd v Wyong Shire Council [1975] AC 538 at 30 (2006) 225 CLR 130; [2006] HCA 5. In Ferdinands, Gummow and Hayne JJ pointed out that inconsistency was at the root of the principle of implied repeal31. This is true also where the question is one of possible amendment where a later statute is said to operate upon an earlier statute. However, as their Honours observed, the law presumes that statutes do not contradict one another. The question is not whether one law prevails, but whether that presumption is displaced32. Their Honours considered that the two statutes in question in that case could be accommodated by reading into the Industrial and Employee Relations Act 1994 the matters that the Police Commissioner of the South Australian Police would take into account in exercising the power of dismissal; but there were other features of the statutes which were also important33. Their Honours said that deciding whether the two statutes could not "stand or live together" in the relevant respect "requires the construction of, and close attention to, the particular provisions in question"34. Before turning to the provisions in question in their statutory context35, it is necessary to say something about the utility of recourse to the history of the two statutes. In the Court of Appeal, Tobias AJA attempted to chart the course of the two statutes36, but their histories and any interrelationship between them does not appear to offer any real guidance on the matters in question. It may be said that the Commissioner has long had the power to dismiss or remove police officers. The antecedent provision to s 80(3) was r 11(b) of the Police Rules 1977, made under the Police Regulation Act 1899 (NSW), which 31 Ferdinands v Commissioner for Public Employment (2006) 225 CLR 130 at 137- 32 Ferdinands v Commissioner for Public Employment (2006) 225 CLR 130 at 146 33 Ferdinands v Commissioner for Public Employment (2006) 225 CLR 130 at 148 34 Ferdinands v Commissioner for Public Employment (2006) 225 CLR 130 at 138 35 Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 304 per Gibbs CJ, 320 per Mason and Wilson JJ; [1981] HCA 26; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381 [69]; [1998] HCA 28. 36 Eaton v Industrial Relations Commission of New South Wales [2012] NSWCA 30 provided that a probationary member of the NSW Police Force could be discharged or dismissed by the Commissioner "without any reason being assigned". On the other hand, an unfair dismissal regime has operated in New South Wales since at least 199137. The possibility that it may have operated earlier was addressed in submissions filed subsequent to the hearing of the appeal, but this need not be gone into. Under the Industrial Relations Act 1991 (NSW), the regime was expressed to apply "despite β¦ any other Act"38, but that provision was not re-enacted in the IR Act in 1996. The operation of the IR Act by reference to the Police Act is the subject of express provision, s 218 of the Police Act, which will require consideration later in these reasons. The structure and operation of the Police Act The NSW Police Force established by the Police Act is comprised principally of the Commissioner, the Senior Executive Service and other police officers39. The Senior Executive Service is comprised of executive officers40. Aside from those officers and the Commissioner, all other police officers are referred to as non-executive officers41. The Commissioner has responsibility for the management and control of the NSW Police Force, subject to the direction of Non-executive police officers include probationary constables. As the term suggests, such constables are on probation until they are confirmed as officers of the NSW Police Force. In O'Rourke v Miller43, Gibbs CJ said that "probation is a time of testing or trial and a probationer whose conduct, character 37 The Industrial Arbitration (Unfair Dismissal) Amendment Act 1991 (NSW), Sched 1 inserted such a regime into the Industrial Arbitration Act 1940 (NSW). The Industrial Relations Act 1991 (NSW), s 750(1) repealed the 1940 Act and, by Pt 8 of Ch 3, re-enacted an unfair dismissal regime. 38 Industrial Relations Act 1991, s 255(1)(a). 39 Police Act 1990, s 5. 40 Police Act 1990, ss 32(1) (definition of "executive officer"), 33(1). 41 Police Act 1990, ss 62, 63. 42 Police Act 1990, s 8(1). 43 (1985) 156 CLR 342 at 350; [1985] HCA 24. or qualifications fail to meet the test need not be confirmed in the office to which he was provisionally appointed." Clauses 13 and 14 of the Police Regulation 200844 deal with the process of confirmation of appointment as a constable. In addition to completion of initial basic training and a period of probation, cl 13 requires a satisfactory fitness report concerning the probationer before an appointment can be confirmed. Amongst the matters which the fitness report is to address pursuant to cl 14 are the probationary constable's integrity and conduct. Integrity is a value of the NSW Police Force; so much is stated in the Police Act45. It is against this background that ss 80(1) and 80(3) respectively provide that, subject to the Act and its attendant regulations, the Commissioner may appoint a person as a police constable and may dismiss a probationary police constable at any time and without giving any reason. Jarratt v Commissioner of Police (NSW)46 holds that the power of dismissal conferred by s 51(1) of the Police Act47, which is in terms similar to s 80(3), is conditioned upon procedural fairness being afforded. However, procedural fairness does not in every circumstance require the giving of reasons48. The terms of s 80(3) β that the Commissioner is not obliged to give any reasons β also have the effect that the validity of a dismissal does not depend upon the existence of any particular cause for dismissal49. Section 51(1) applies to an executive officer, who may be removed from office "at any time for any or no reason and without notice", by the Governor on the recommendation of the Commissioner, in the case of the removal of a Deputy Commissioner or Assistant Commissioner, and in any other case, by the Commissioner alone. Executive officers are not subject to the application of Pt 6 44 Made pursuant to Police Act 1990, s 219. 45 Police Act 1990, s 7. 46 (2005) 224 CLR 44; [2005] HCA 50; see also Ferdinands v Commissioner for Public Employment (2006) 225 CLR 130 at 135 [8], 143 [36], 148 [57]. 47 Which was at the time known as the Police Service Act 1990 (NSW). 48 Public Service Board of NSW v Osmond (1986) 159 CLR 656 at 662-663, 667; [1986] HCA 7. 49 Jarratt v Commissioner of Police (NSW) (2005) 224 CLR 44 at 55 [22] per of the IR Act. By s 44(2) of the Police Act, their employment is not an industrial matter for the purposes of the IR Act and by s 44(2A), Pt 6 of the IR Act does not apply. The IR Act itself confirms that Pt 6 does not apply to an executive officer of the NSW Police Force50. Part 9 of the Police Act is entitled "Management of conduct within NSW Police Force". It provides the Commissioner with powers to make orders respecting police officers, including for their removal, and it permits review of those orders by reference to a process which is adapted from and different in some respects from that which is provided for under Pt 6 of the IR Act. It is evident from the terms of Pt 9 of the Police Act that it applies to confirmed police officers and not probationary constables. Thus the only statutory mechanism of review which might apply to probationary constables subject to an order of dismissal under s 80(3) is that provided by Pt 6 of the IR Act. Section 181D(1) in Div 1B of Pt 9 of the Police Act provides that the Commissioner may remove a police officer if the Commissioner does not have confidence in the officer's suitability to continue as a police officer, having regard to the officer's competence, integrity, performance or conduct. By contrast with s 80(3), an order made under s 181D(1), with respect to a confirmed police officer, must set out the reasons for which the Commissioner has decided to remove the police officer from the NSW Police Force51. Clearly enough, the provision of reasons is in aid of the review that is permitted. By s 181E(1), a police officer who is removed from the NSW Police Force under s 181D may apply to the IR Commission for a review of the order on the ground that the removal is harsh, unreasonable or unjust. Division 1 of Pt 9 also provides that the Commissioner may take action with respect to a police officer's misconduct or unsatisfactory performance by ordering, inter alia, a reduction in the police officer's rank, grade or seniority; an action other than dismissal52. Certain actions ordered by the Commissioner are subject to review under s 174(1), which provides that a police officer may apply to the IR Commission for a review of the order, on the ground that it is beyond power or is harsh, unreasonable or unjust. Proceedings on applications for review under s 181E(1) are subject to detailed provisions in Div 1C of Pt 9 of the Police Act, which are expressed so as 50 Industrial Relations Act 1996, s 83(3). 51 Police Act 1990, s 181D(4). 52 Police Act 1990, s 173(2). to omit or modify, directly or indirectly, provisions of the IR Act which would otherwise govern the process by which a claim of unfair dismissal is determined. Similar changes are effected to the process which is to attend applications under s 174(1). The provisions of Div 1C respecting the review process are self- contained and reference to the IR Act is not necessary. The Police Act makes it clear that the IR Act is not to apply to these applications. Section 181D(7) provides that, except as provided by Div 1C, no tribunal has jurisdiction or power to review or consider any decision or order of the Commissioner under s 181D and no appeal lies to any tribunal in connection with any such decision or order. "[T]ribunal" is defined to include the IR Commission. It will be necessary at a later point in these reasons to identify some of the more substantial changes effected by the Police Act to the review process that is to be undertaken by the IR Commission with respect to claims of unfair dismissal brought by police officers, and to compare that process with the processes under the IR Act. At this point it is convenient to turn to the provisions of the IR Act respecting the application of Pt 6 and the matters relevant to determinations of claims of unfair dismissal. Part 6 of the IR Act Section 83(1)(a) in Pt 6 of the IR Act, by its terms and the definition of a public sector employee, is apt to apply to police officers. Section 83(3) restricts the application of Pt 6 to non-executive police officers, which term includes probationary constables. Section 83(2)(b) of the IR Act provides that regulations made under the Act can exempt employees who are serving a period of probation or a qualifying period. However, the relevant regulation53 exempts only a class of employees who are serving a probationary or qualifying period, the duration of which is determined in advance. Probationary constables under the Police Act do not come within the regulation. Clause 12(1) of the Police Regulation 2008 provides that the Commissioner may determine the period of probation. In Ferraris v Commissioner of Police54, the Full Bench of the IR Commission held that the effect of a similar clause was that the Commissioner could increase the period of probation at any time. It follows that the requirement of the regulation cannot be met. 53 Industrial Relations (General) Regulation 2001 (NSW), cl 6(1)(c). 54 [2006] NSWIRComm 243 at [51]. On an application under s 84(1), the IR Commission may make an order for reinstatement, re-employment, remuneration or compensation55. It may do so if it is satisfied that the dismissal was harsh, unreasonable or unjust. In so determining, the IR Commission may have regard to the conduct of the employee and whether the employer acted reasonably in all the circumstances, as the Full Bench in this case observed56. A general provision for an enquiry into the reasonableness of the conduct of an employer might not be thought suitable to a decision of the Commissioner to dismiss a police officer on the basis of misconduct. Further, as the Full Bench observed in this case, the relief which may be provided by the IR Commission is at odds with the prima facie right of the Commissioner under s 80(3) to dismiss57. There are other matters which the IR Commission may take into account under s 88 of the IR Act in connection with a claim for unfair dismissal. They include, most relevantly, whether a reason for the dismissal was given and, if so, its nature and its substance58. The fact that reasons were given, or not, may be relevant to an assessment of the reasonableness of the employer. It will be recalled that s 80(3) of the Police Act does not oblige the Commissioner to give reasons. The IR Commission may also take into account whether a warning of unsatisfactory performance was given59 and whether or not the applicant requested reinstatement60. A warning may not be practicable where issues of the integrity of a police officer are involved. By its nature, s 80(3) would not permit a request for reinstatement. Of course, these are matters which may or may not be taken into account as relevant by the IR Commission to a case before it. But they serve to highlight the fact that the unfair dismissal regime of the IR Act was not framed with something like the Police Force in mind. It is a general statute. And they raise the question of how, and by reference to what matters, the IR Commission would approach the task of reviewing a dismissal by the Commissioner under s 80(3). 55 Industrial Relations Act 1996, s 89. 56 Commissioner of Police v Eaton (2011) 207 IR 209 at 219 [34]. 57 Commissioner of Police v Eaton (2011) 207 IR 209 at 219-220 [36]. 58 Industrial Relations Act 1996, ss 88(a), 88(b). 59 Industrial Relations Act 1996, s 88(c). 60 Industrial Relations Act 1996, s 88(e). Unfair dismissal claims β the Police Act Consideration was given in Pt 9 of the Police Act to the means by which claims of unfair dismissal made by confirmed police officers are to be determined by the IR Commission. It was evidently not considered appropriate to apply the processes provided in the IR Act which apply to claims of unfair dismissal under that Act. In what follows, attention is directed to the provisions of Div 1C of Pt 9 of the Police Act, which concern applications under s 181E(1) respecting orders for removal made by the Commissioner. It is not necessary to survey the processes in Div 1A of Pt 9, concerning applications under s 174(1). The Court of Appeal does not appear to have given any weight to the changes to the unfair dismissal regime brought about by the operation of Div 1C. The Full Bench, however, detailed some of the provisions of Div 1C, commented upon the limitation of IR Commission procedures they effected61, and concluded that if a probationary constable were able to pursue a claim under Pt 6 of the IR Act, he or she would have greater procedural rights than a confirmed officer would have62. In these observations the Full Bench was plainly correct. It may first be observed that, under the IR Act, the IR Commission has power to order an employer not to dismiss an employee where a threat to do so has been made63. The Police Act provides that an application under s 181E does not effect a stay of the operation of an order for removal of a police officer64. There are also differences regarding the bringing of applications. The Police Act excludes the ability of the IR Commission to accept an application made out of time65. The Police Act requires a hearing to be commenced within four weeks of an application being made under s 181E66. No such strictures are placed on the IR Commission under the IR Act67. 61 Commissioner of Police v Eaton (2011) 207 IR 209 at 223-224 [48]. 62 Commissioner of Police v Eaton (2011) 207 IR 209 at 225 [55]. 63 Industrial Relations Act 1996, s 89(7). 64 Police Act 1990, s 181E(2). 65 Police Act 1990, s 181G(1)(b)(ii); contrast Industrial Relations Act 1996, s 85(3). 66 Police Act 1990, s 181G(1)(e). 67 Industrial Relations Act 1996, s 162(2)(a). A claimant under s 181E of the Police Act bears the onus of proving that a dismissal was harsh, unreasonable or unjust68. There is no equivalent provision in the IR Act, which in general terms empowers the IR Commission to determine its own procedures69. In the Court of Appeal, Tobias AJA observed70 that in practice the IR Commission usually places the onus of proof on the applicant for relief, although the Full Bench has held that the employer must establish misconduct, where this is alleged in a case of dismissal. Dismissals under s 80(3) of the Police Act may well involve questions of integrity and misconduct. in a particular order, commencing with There are two provisions in Div 1C of Pt 9 of the Police Act which are significant for the focus which they bring to bear upon the IR Commission's decision, a focus which is not possible under the IR Act regime. The first provision requires the IR Commission to consider the material relating to an unfair dismissal claim the Commissioner's reasons71. The second provision requires the IR Commission to consider the "public interest"72. The IR Act has as its objects matters of public interest, such as the promotion of efficiency and productivity in the New South Wales economy73. Section 146(2) requires the IR Commission to take into account the public interest in the exercise of its functions and, for that purpose, to have regard to the objects of the IR Act, and the state of the economy of New South Wales and the likely effect of its decisions on that economy. The matters of public interest to which the Police Act directs attention are different. The Police Act requires, for the purposes of Div 1C of Pt 9, that the public interest be taken to include maintaining the integrity of the NSW Police Force and the fact that the Commissioner made an order for removal. Matters pertaining to evidence are touched upon in the Police Act. New evidence cannot be admitted before the IR Commission in review proceedings 68 Police Act 1990, s 181F(2). 69 Industrial Relations Act 1996, s 162(1). 70 Eaton v Industrial Relations Commission of New South Wales [2012] NSWCA 30 at [150]-[152], referring to Wang v Crestell Industries Pty Ltd (1997) 73 IR 454 at 71 Police Act 1990, s 181F(1). 72 Police Act 1990, s 181F(3)(b). 73 Industrial Relations Act 1996, s 3(b). under Div 1C, except upon notice and by leave74. Under the IR Act75, the IR Commission may compel the attendance of witnesses. But under Div 1C of Pt 9 of the Police Act, neither the Commissioner, nor any member of the Commissioner's Advisory Panel, is a compellable witness without leave of the IR Commission, which can be granted only if extraordinary grounds exist76. Presumption of non-contradiction displaced? The indications in the Police Act point towards a legislative intention that a decision made under s 80(3) to dismiss a probationary constable is not to be subject to merits review by the IR Commission under Pt 6 of the IR Act. The starting point is the terms of s 80(3) in the context of the status of a probationary constable and the responsibilities vested in the Commissioner. A probationary constable is seeking to achieve confirmation. During this period, the probationary constable's conduct is monitored and subject to report, so that the Commissioner may determine whether the person is suitable for the role of a police officer within the NSW Police Force. The position of a probationary constable may be contrasted with that of a police officer who has achieved confirmation and whose history in the Police Force may need to be taken into account by way of review of a dismissal. The terms of s 80(3), as the Commissioner argues, are strongly suggestive of an unfettered power to dismiss. The fact that the Commissioner is not obliged to give any reasons, whilst not conclusive of an intention that there be no merits review of a decision to dismiss, implies an unfettered power. It stands in contrast with the requirement for reasons, imposed by Pt 9 of the Police Act, where a confirmed police officer is dismissed. The lack of a requirement for reasons also points to some incoherence with the provisions of Pt 6 of the IR Act concerning the matters to be taken into account by the IR Commission in determining whether a dismissal is harsh, unreasonable or unjust. The terms of s 80(3) suggest that such considerations are not to be in question. The intended legal effect of the Commissioner not being required to give reasons is that the Commissioner's decision cannot be impugned on account of any particular reason. 74 Police Act 1990, s 181G(1)(f). 75 Industrial Relations Act 1996, s 164(1)(a). 76 Police Act 1990, s 181H. The regime provided for in Pt 9 of the Police Act for the claims of confirmed police officers evidences a concern that the processes of Pt 6 of the IR Act are not in all respects appropriate to be applied to decisions of the Commissioner to dismiss or make other like orders. Part 9 maintains a focus on the Commissioner's decision, a focus which is not provided by the general provisions of the IR Act. Part 9 elevates the Commissioner's decision to one of public interest, in the context of the maintenance of the integrity and discipline of the NSW Police Force. The placing of the burden of proof upon the police officer dismissed is consistent with the weight to be given to the Commissioner's decision, as is the provision which prevents a review of that decision by reference to additional material. These are not insignificant matters. They raise important questions concerning the interaction between Pt 6 of the IR Act and the Police Act and as to the internal consistency of the Police Act. If Pt 6 applied to probationary constables, confirmed police officers' claims of unfair dismissal would be dealt with under the particular provisions of Pt 9 of the Police Act, while probationary constables' claims would be dealt with under the general provisions of the IR Act, which were not considered by the legislature in enacting the Police Act to be suited to the same topic. An anomalous position would result whereby probationary constables would enjoy greater procedural rights than confirmed police officers, as the Full Bench correctly observed77. In accordance with ordinary rules of construction concerning the internal operation of a statute, the Police Act should be construed in a way which best achieves a harmonious result78. The same principle of consistency informs the construction of two statutes which may share a field of operation. It was pointed out by the Court of Appeal that s 80(3) could have been excluded by a regulation made under s 83(2) of the IR Act, and that the Parliament had given its attention to the relationship between the Police Act and the IR Act (or its predecessors) in successive industrial relations statutes without expressly excluding probationary constables from the unfair dismissal regime in the industrial relations statutes79. Provision could also have been made in the Police Act to exclude probationary constables from the operation of Pt 6 of the 77 See [67]. 78 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 79 Eaton v Industrial Relations Commission of New South Wales [2012] NSWCA 30 IR Act, as was done with respect to executive officers80. So much may be accepted. It may be that a conscious decision was made not to exclude probationary constables, as the reasons of the Court of Appeal imply. It may also be observed that the terms of s 80(3) have never been substantively altered. They may have been thought to be a sufficient indicator that review by the IR Commission was not intended. These are matters of speculation. No proper inferences helpful to the process of construction are available. Mention was also made in the Court of Appeal81 of s 405 of the IR Act, which provided at the relevant time and in relevant part: "Statutory provisions relating to public sector employees (1) Any award or order of the Commission does not have effect to the extent that it is inconsistent with: a function under the Police Service Act 1990 with respect to the discipline, promotion or transfer of a police officer β¦ This section does not affect any decision of the Commission under Part 6 of Chapter 2 (Unfair dismissals)." Whilst the IR Act has application to other industrial matters involving police officers, as discussed earlier in these reasons82, by operation of s 405(1)(b) the IR Commission cannot, by its orders, interfere with matters of discipline, which are dealt with under the Police Act. Insofar as an order made on an unfair dismissal claim might be said to cut across disciplinary functions, sub-s (3) confirms that a decision made under Pt 6 of the IR Act is unaffected. In that sense Pt 6 may prevail to the extent of any inconsistency, as Handley AJA observed. However, the provision assumes that the decision is made within the jurisdiction of the IR Commission pursuant to the power given by Pt 6. It is not helpful in answering the question whether Pt 6 applies to a probationary constable. 80 Eaton v Industrial Relations Commission of New South Wales [2012] NSWCA 30 81 Eaton v Industrial Relations Commission of New South Wales [2012] NSWCA 30 Handley AJA also considered that s 218 of the Police Act has the effect that, in the absence of an appropriate exemption by regulation, the unfair dismissal regime of the IR Act applies to probationary constables83. Section 218 of the Police Act is troublesome. It was regarded by the Court of Appeal as possibly determinative of the question whether s 80(3) of the Police Act affects the application of the IR Act's unfair dismissal regime, at least if read literally84. There is a difficulty with doing so, as will be explained. Section 218 of the Police Act provides: "(1) The Industrial Relations Act 1996 is not affected by anything in this Act. Subsection (1) does not limit section 44 or 89 or any provision of the Industrial Relations Act 1996." The predecessor to s 218 was s 117 of the Police Act, as enacted. At that time the statute in force dealing with industrial matters in New South Wales was the Industrial Arbitration Act 1940 (NSW). The reference in s 117(1) to the Industrial Arbitration Act 1940 not being "affected by anything in this Act" may have been explicable on the basis that it made plain that the Police Act did not, in any relevant respect, repeal the 1940 Act. The words "is not affected by" were apt to preserve the 1940 Act85. Section 117 was subsequently amended in 1993 to refer to the Industrial Relations Act 1991 (NSW), when it was renumbered s 21886. It was again amended in 1997 to refer to the IR Act87, at around the same time amendments were made to insert Div 1B88 and Div 1C89 of Pt 9 into the Police Act. It appears 83 Eaton v Industrial Relations Commission of New South Wales [2012] NSWCA 30 84 Eaton v Industrial Relations Commission of New South Wales [2012] NSWCA 30 at [27], [46] per Handley AJA (Bathurst CJ agreeing), [182] per Tobias AJA. 85 Walsh v Law Society (NSW) (1999) 198 CLR 73 at 93-94 [59]; [1999] HCA 33. 86 Police Service (Complaints, Discipline and Appeals) Amendment Act 1993 (NSW), Sched 3, items (5), (10). 87 Statute Law (Miscellaneous Provisions) Act (No 2) 1996 (NSW), Sched 4.40 [1]. 88 Police Legislation Further Amendment Act 1996 (NSW), Sched 1 [60]. to have been updated at these points in time by reference to the industrial relations statutes then in force, but apparently without consideration having been given to its new context and its continuing purpose. This lack of consideration is evident from the terminology of the provision, which has remained unchanged. As enacted, s 117(2) referred to ss 44 and 89 of the Police Act. As enacted, s 44(2) relevantly provided that the employment of an executive officer was not an industrial matter for the purposes of the Industrial Arbitration Act 1940. Section 89(1) provided that the appointment of or failure to appoint a person to the position of administrative officer was not an industrial matter for the purposes of the 1940 Act. Thus, by s 117(2), s 44 continued to operate to exclude executive officers altogether from the IR Act and s 89 continued to make some exclusion with respect to administrative officers. Section 44(2) remains in the Police Act. However, s 89 was repealed in 2006 and re-enacted as s 8890, which is in substantially the same terms. Resort is necessary to s 68(3) of the Interpretation Act 1987 (NSW) so that the reference to s 89 in s 218(2) can be read as a reference to s 88. More significantly, sub-s (1) of s 218 is now patently erroneous. The IR Act is affected by Pt 9 of the Police Act, as has been pointed out. Part 6 of the IR Act does not automatically apply to claims by police officers for unfair dismissal. Section 181E in Pt 9 of the Police Act permits the making of such a claim, but with the modified processes which Pt 9 provides. Another example of a provision of the Police Act which affects the IR Act is s 179(1), which particularises certain provisions of the IR Act which do not have effect, as the The Court of Appeal's interpretation of s 218(2) assumes that it operates so that unless expressly provided by the Police Act, the IR Act is to apply. The terms of s 218(2), and the omission of such words, do not readily lend themselves to this construction. Even if one were to proceed from that assumption, the general provision of s 218 would yield to what is implied by s 80(3) of the Police Act. 89 Police Service Amendment Act 1997 (NSW), Sched 1 [4]. 90 Police Amendment (Police Promotions) Act 2006 (NSW), Sched 1 [5]. 91 Commissioner of Police v Eaton (2011) 207 IR 209 at 226 [61]. It was pointed out in Rose v Hvric92 that the word "expressly" only emphasises the generality of such a provision. It makes clear that no case is outside the provision unless that is the necessary result of the operation of another enactment according to the intention that it manifests93. It follows that an implication of inconsistency with the general provision will suffice to oust its application. Such an implication arises where the other provision concerned can be seen to mean more than it actually says; it may be contrasted with an inference94. The provisions of Pt 9 of the Police Act provide an example of inconsistency with provisions of the IR Act relating to unfair dismissal. The level of inconsistency is such that s 218(1) does not operate in its terms. Section 80(3) is impliedly inconsistent with s 218. It conveys more than that the Commissioner may dismiss without giving reasons. It implies an unfettered power and therefore that the decision is not to be subjected to a review on the merits. That implication is supported by other aspects of the construction of the Police Act, to which reference has been made. Thus if the general jurisdiction of the IR Act is recognised by s 218, it is withdrawn by s 80(3)95 insofar as decisions under that provision are concerned. The conclusion reached by the Full Bench is, with respect, correct. The Full Bench construed s 218 as leaving intact the power of the IR Commission to deal with industrial matters concerning police officers, unless especially restricted by a provision of the Police Act96. Conclusion and orders The IR Act may apply generally to the Police Act, but not where the operation of the former produces an internal inconsistency in the latter. Such an effect, which would be reached if a decision under s 80(3) of the Police Act were 92 (1963) 108 CLR 353 at 358; [1963] HCA 13. 93 Rose v Hvric (1963) 108 CLR 353 at 358; see also Public Service Association of New South Wales v Industrial Commission of New South Wales (1985) 1 NSWLR 627 at 634 per Street CJ. 94 Rose v Hvric (1963) 108 CLR 353 at 358. 95 Public Service Association of New South Wales v Industrial Commission of New South Wales (1985) 1 NSWLR 627 at 635. 96 Commissioner of Police v Eaton (2011) 207 IR 209 at 226 [63]. subject to review under Pt 6 of the IR Act, cannot be taken as intended. The conclusion reached concerning the non-application of Pt 6 of the IR Act to a decision made under s 80(3) may further be tested by reference to s 218 of the Police Act and the rule of construction mentioned at the outset of these reasons97. In each case, the general provisions of the IR Act do not apply in the face of the special, and inconsistent, terms of s 80(3) of the Police Act. The appeal should be allowed and the orders proposed by Heydon J made. GAGELER J. The question in this appeal is whether Pt 6 of Ch 2 of the Industrial Relations Act 1996 (NSW) ("the IR Act") applies to the dismissal by the Commissioner of Police of a probationary police officer under s 80(3) of the Police Act 1990 (NSW) ("the Police Act"). The Court of Appeal of the Supreme Court of New South Wales (Bathurst CJ, Handley and Tobias AJJA) concluded unanimously that it does98. I agree with that conclusion and would dismiss the appeal. Principles The question is wholly one of statutory construction: to be determined through the attribution of legal meaning β and consequently legal operation β to the text of the two statutes in a context which includes their mutual referencing and the history of their amendment. The resolution of the question is guided by common law principles which reflect and inform conventional legislative practice and thereby form part of the "rules of interpretation accepted by all arms of government in the system of representative democracy"99. One principle (reflecting an approach to legislative drafting of very long standing) is that the text of a statute is ordinarily to be read as speaking continuously in the present100. A corollary of that principle is that, where a statute is amended, the statute and the amending statute are "to be read together as a combined statement of the will of the legislature"101. Another principle (reflecting at root no more than a convention of language) is that the legal meaning of a statutory text ordinarily corresponds with the textual meaning most appropriate to its context102. 98 Eaton v Industrial Relations Commission of New South Wales [2012] NSWCA 30. 99 Zheng v Cai (2009) 239 CLR 446 at 456 [28]; [2009] HCA 52 quoted in Lacey v Attorney-General (Qld) (2011) 242 CLR 573 at 592 [43]; [2011] HCA 10. 100 Muin v Refugee Review Tribunal (2002) 76 ALJR 966 at 986 [104]; 190 ALR 601 at 626-627; [2002] HCA 30; R v Ireland [1998] AC 147 at 158. See eg Attorney- General for Queensland v Attorney-General for the Commonwealth (1915) 20 CLR 148 at 174; [1915] HCA 39; Paliflex Pty Ltd v Chief Commissioner of State Revenue (NSW) (2003) 219 CLR 325 at 337-338 [9]; [2003] HCA 65. 101 Commissioner of Stamps (SA) v Telegraph Investment Co Pty Ltd (1995) 184 CLR 453 at 463; [1995] HCA 44. 102 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 384 [78]; [1998] HCA 28 quoted in Australian Securities and Investments (Footnote continues on next page) The particular question of statutory construction in the appeal attracts a further and more specific common law principle of construction. Stated at its highest level of generality, it is that statutory texts enacted by the same legislature are to be construed so far as possible to operate in harmony and not in conflict. That principle of harmonious construction applies to the construction of provisions within different statutes of the same legislature to create "a very strong presumption that the β¦ legislature did not intend to contradict itself, but intended that both β¦ should operate"103. The principle applies also to the construction of multiple provisions within a single statute to the effect that "[w]here conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions"104. In undertaking that adjustment, "such a sense is to be made upon the whole as that no clause, sentence, or word shall prove superfluous, void, or insignificant, if by any other construction they may all be made useful and pertinent"105. Application of the construction of provisions within different statutes can be difficult where a legislature does not "state an intention either that the two statutory regimes the principle of harmonious construction Commission v DB Management Pty Ltd (2000) 199 CLR 321 at 338 [34]; [2000] HCA 7; Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at 46-47 [47]; [2009] HCA 41. 103 Butler v Attorney-General (Vict) (1961) 106 CLR 268 at 276; [1961] HCA 32 cited in Saraswati v The Queen (1991) 172 CLR 1 at 17; [1991] HCA 21. See also Ferdinands v Commissioner for Public Employment (2006) 225 CLR 130 at 133- 134 [4], 138 [18]; [2006] HCA 5. 104 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 382 [70]. See also South-Eastern Drainage Board (SA) v Savings Bank of South Australia (1939) 62 CLR 603 at 626-627; [1939] HCA 40; R v Hickman; Ex parte Fox and Clinton (1945) 70 CLR 598 at 617; [1945] HCA 53. 105 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 382 [71] quoting The Commonwealth v Baume (1905) 2 CLR 405 at 414; [1905] HCA 11. See also Plaintiff M47/2012 v Director-General of Security (2012) 86 ALJR 1372 at 1391 [41], 1412-1413 [172], 1464 [450]; 292 ALR 243 at 259, 289- 290, 360; [2012] HCA 46. should both apply ... or that [one] regime should apply to the exclusion of the [other]"106. Application of the principle of harmonious construction the construction of provisions within different statutes is much more straightforward where it is the stated intention of the legislature that the two statutory regimes should both apply. The two statutory regimes might be "so plainly repugnant" that "effect cannot be given to both at the same time"107. The result produced by giving effect to the statement of intention might be so improbable or inconvenient in light of a policy inhering in one or other of the statutory regimes as to require the statement of intention to be read as implicitly qualified in a way that conforms to that policy108. But if that is not so, the stated intention of the legislature is the beginning and end of the matter109. Both statutory regimes apply. Application Applied to the construction of the IR Act and the Police Act, the first two of those common law principles of construction operate to satisfy the third. The detail of the IR Act and the Police Act is sufficiently set out in reasons for judgment of the majority. Only the critical provisions are usefully repeated. Although frequent amendments have left them untidy, the IR Act and the Police Act are for relevant purposes consistent and mutually reinforcing. Part 6 of Ch 2 of the IR Act is expressed in terms that make it applicable to the dismissal of a probationary constable under the Police Act. The Part is expressed to apply to the "dismissal" of "any public sector employee"110. The expression "public sector employee" is defined to include "a member of β¦ the 106 Ferdinands v Commissioner for Public Employment (2006) 225 CLR 130 at 134 107 Kutner v Phillips [1891] 2 QB 267 at 272 quoted in part in Rose v Hvric (1963) 108 CLR 353 at 360; [1963] HCA 13. 108 Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 320-321; [1981] HCA 26; CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408; [1997] HCA 2. 109 Rose v Hvric (1963) 108 CLR 353 at 358. See also Public Service Association of New South Wales v Industrial Commission of New South Wales (1985) 1 NSWLR 110 Section 83(1). NSW Police Force"111. The term "dismissal" is defined to include, in the case of a public sector employee, "dispensing with the services of the employee, dismissing the employee as a consequence of disciplinary proceedings against, or the commission of an offence by, the employee or annulling the appointment of the employee"112. The Part is expressed not to apply to an employee within a class of "employees serving a period of probation" if exempted from the Part by regulation113. The Part is also expressed not to apply to an employee who is an executive officer to whom Pt 5 of the Police Act applies114. The net effect is that (in the absence of a regulation excluding the application of the Part to them and save only to the extent that it might be displaced by something in the Police Act) Pt 6 of Ch 2 of the IR Act on its face applies to the dismissal of probationary members of the NSW Police Force including where dismissal occurs as a consequence of disciplinary proceedings or the commission of an offence. The Police Act is in turn expressed not to affect anything in the IR Act. Critically, the Police Act expressly provides that "[t]he [IR Act] is not affected by anything in this Act"115. The Court of Appeal was right to treat that statement as determinative of the conclusion that there is nothing in the Police Act that displaces the operation of the provisions of the IR Act that are themselves expressed to make Pt 6 of Ch 2 of that Act applicable to the dismissal of a probationary police officer116. The arguments of the Commissioner in the appeal that the statement is either "spent" or "cannot mean what it says" should be rejected. The statement is expressed continuously in the present. It is addressed to the ongoing relationship between the IR Act and the Police Act. Its unqualified declaration is that the IR Act is not affected by anything in the Police Act. The statement must be qualified as a matter of construction to render it harmonious with other provisions of the IR Act: it is expressly qualified by the immediately following statement that it "does not limit" specified provisions of the Police Act or any provision of the IR Act117; and it is impliedly qualified by other provisions of the Police Act which are not so specified but which 111 Section 4, Dictionary. 112 Section 83(5)(b). 113 Section 83(2)(b). 114 Section 83(3). 115 Section 218(1) of the Police Act. 116 Eaton v Industrial Relations Commission of New South Wales [2012] NSWCA 30 117 Section 218(2) of the Police Act. themselves operate to the exclusion of the IR Act118. The qualification is in each case by way of exception to the generality of the statement: each exception narrows the scope of the statement to the extent of the ground covered by that exception. Outside those exceptions, the meaning and legal effect of the statement is that no provision of the Police Act is to be construed as operating to alter the legal operation of any provision of the IR Act. The express statement that the IR Act is not affected by anything in the Police Act obviously could not prevail were the power of the Commissioner to dismiss a probationary police officer under the Police Act so plainly repugnant to the jurisdiction of the Industrial Relations Commission of New South Wales under Pt 6 of Ch 2 of the IR Act to conciliate or determine a claim that the dismissal is harsh, unreasonable or unjust that effect could not be given to both at the same time. There is nothing in the nature of the power conferred on the Commissioner by the Police Act to dismiss a probationary police officer at any time and without the necessity for giving a reason that renders an exercise of that power incapable of independent assessment by the Commission under Pt 6 of Ch 2 of the IR Act to determine whether it is harsh, unreasonable or unjust or that is inconsistent with the ability of the Commission to order reinstatement if the Commission finds that standard to be breached. The respective powers of the Commissioner and the Commission can each be given their full legal operation. The role of the Commissioner is to decide whether or not to exercise the power to dismiss and to do so, for the most part, unconstrained by legal limitations breach of which would render a purported exercise of power to dismiss invalid. The role of the Commission is to assess the decision actually made by the Commissioner by reference to the standard of harshness, unjustness or unreasonableness. The role of the Commission is not to stand in the shoes of the Commissioner so as to re-exercise the power to decide whether or not to dismiss. Nor is the role of the Commission to enforce express or implied limitations on the power to dismiss. The requirement of Pt 6 of Ch 2 of the IR Act that the Commission, "if appropriate", take into account factors which include "whether a reason for the dismissal was given to the applicant" in assessing whether a dismissal was harsh, unreasonable or unjust119 presupposes neither that those factors will always exist nor that their presence or absence will always be appropriate to be taken into account. The general requirement of the IR Act that the Commission take the "public interest" into account in the exercise of all of its functions120 is sufficient to oblige the Commission in conciliating or determining a claim by a dismissed member of the NSW Police Force to take account of the public interest inherent 118 Sections 173(9) and 181D(7) of the Police Act. 119 Section 88(a) of the IR Act. 120 Section 146(2) of the IR Act. in the purpose of the Police Act to establish and maintain "an hierarchical and disciplined force"121. Nor is the subjection of a decision of the Commissioner to dismiss a probationary police officer to independent assessment by the Commission so improbable or inconvenient in light of a policy inhering in one or other of the Police Act or the IR Act as to call the textual meaning into question. Views may well differ as to whether independent assessment of decisions of the Commissioner by reference to the standard of harshness, unreasonableness or unjustness impedes or enhances the discipline and integrity of the NSW Police Force. It is no part of the process of construction to choose between those differing views. Divisions 1A and 1C of Pt 9 of the Police Act manifest a contemporary legislative judgment that independent assessment of decisions of the Commissioner concerning the discipline and dismissal of permanent members of the NSW Police Force by reference to that standard is both possible and appropriate. Those Divisions, in tailoring the procedures set out in Pt 6 of Ch 2 of the IR Act to the discipline and dismissal of permanent members of the NSW Police Force, do nothing to demonstrate improbability or inconvenience in the generic provisions of that Part of the IR Act applying to the dismissal of probationary police officers. They cannot be read as manifesting by implication a legislative choice that the dismissal of probationary police officers is to be wholly excluded from the jurisdiction of the Commission. They do not by implication create another exception to the statement in the Police Act that the IR Act is not affected by anything in that Act. They do not by implication contradict the provisions of Pt 6 of Ch 2 of the IR Act by which the dismissal of probationary police officers is expressly included in that jurisdiction, subject to exclusion by regulation made under the IR Act. 121 New South Wales v Fahy (2007) 232 CLR 486 at 495 [21]; [2007] HCA 20. |
HIGH COURT OF AUSTRALIA UNIONS NSW & ORS PLAINTIFFS AND STATE OF NEW SOUTH WALES DEFENDANT Unions NSW v New South Wales [2019] HCA 1 29 January 2019 ORDER The questions stated by the parties for the consideration of the Full Court be answered as follows: Is s 29(10) of the Electoral Funding Act 2018 (NSW) invalid because it impermissibly burdens the implied freedom of communication on governmental and political matters, contrary to the Commonwealth Constitution? Answer Yes. Is s 35 of the Electoral Funding Act 2018 (NSW) invalid (in whole or in part and, if in part, to what extent), because it impermissibly burdens the implied freedom of communication on governmental and political matters, contrary to the Commonwealth Constitution? Answer Unnecessary to answer. Who should pay the costs of the special case? Answer The defendant. Representation J T Gleeson SC with N J Owens SC and C G Winnett for the plaintiffs (instructed by Holding Redlich Lawyers) M G Sexton SC, Solicitor-General for the State of New South Wales, and J K Kirk SC with B K Lim for the defendant (instructed by Crown Solicitor's Office (NSW)) S P Donaghue QC, Solicitor-General of the Commonwealth, with C L Lenehan and C J Tran for the Attorney-General of the Commonwealth, intervening (instructed by Australian Government Solicitor) P J Dunning QC, Solicitor-General of the State of Queensland, with F J Nagorcka for the Attorney-General of the State of Queensland, intervening (instructed by Crown Solicitor (Qld)) J A Thomson SC, Solicitor-General for the State of Western Australia, with G J Stockton for the Attorney-General for the State of Western Australia, intervening (instructed by State Solicitor's Office (WA)) M J Wait SC with K M Scott for the Attorney-General for the State of South Australia, intervening (instructed by Crown Solicitor's Office (SA)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Unions NSW v New South Wales Constitutional law (Cth) β Implied freedom of communication on governmental and political matters β Where s 29(10) of Electoral Funding Act 2018 (NSW) ("EF Act") substantially reduced cap on electoral expenditure applicable to third-party campaigners from cap applicable under previous legislation β Where third-party campaigners subject to substantially lower cap than political parties β Where s 35 of EF Act prohibits third-party campaigner from acting in concert with another person to incur electoral expenditure exceeding cap β Where preparatory materials to EF Act recommended reduction in cap for various reasons, including that third parties should not be able to "drown out" political parties, which should have a "privileged position" in election campaigns β Where subsequent parliamentary committee report recommended that, before reducing cap, government consider whether proposed reduced cap would enable third-party campaigners reasonably to present their case β Where no evidence that such consideration was undertaken β Whether s 29(10) enacted for purpose compatible with maintenance of constitutionally prescribed system of representative government β Whether s 29(10) necessary to achieve that purpose β Whether necessary to decide validity of s 35. Words and phrases β "capped expenditure period", "compatible with the constitutionally prescribed system of representative maintenance of government", "deference to Parliament", "domain of selections", "domain of the legislative discretion", "effect of the law", "electoral expenditure", "expenditure cap", "justified", "legislative purpose", "legitimate purpose", "level playing field", "marginalise", "margin of appreciation", "necessity", "reasonably appropriate and adapted", "third-party campaigner". Constitution, ss 7, 24. Electoral Funding Act 2018 (NSW), ss 3, 29, 33, 35. Election Funding, Expenditure and Disclosures Act 1981 (NSW), ss 4, 4A, 95F. KIEFEL CJ, BELL AND KEANE JJ. In Unions NSW v New South Wales1 ("Unions NSW [No 1]") and in McCloy v New South Wales2 consideration was given by this Court to the general structure, key provisions and purposes of the Election Funding, Expenditure and Disclosures Act 1981 (NSW) ("the EFED Act"). The Electoral Funding Act 2018 (NSW) ("the EF Act") replaced the EFED Act although it generally retains the scheme of the EFED Act with respect to caps on political donations and electoral expenditure. The questions stated in the parties' special case concern certain changes effected by the EF Act. The first involves the reduction in the amount that third-party campaigners, such as the plaintiffs, are permitted to spend on electoral campaigning3. The second is a prohibition on third-party campaigners acting in concert with others so that the cap applicable to the third-party campaigners is exceeded4. The plaintiffs contend that each of the provisions effecting these changes is invalid because it impermissibly burdens the implied freedom of communication on matters of politics and government which is protected by the Constitution. The EFED Act The general scheme of the EFED Act was to limit the amount or value of political donations to, and the amounts which could be expended in campaigning by, parties, candidates, elected members and others such as third-party campaigners. These amounts were capped by provisions in Pt 6 of the EFED Act5. The effect of these limitations was ameliorated to some extent by provisions made for public funding of State election campaigns6. The caps on "electoral communication expenditure" β which was defined to include expenditure on advertisements, the production and distribution of election material, the internet and telecommunications7 β were introduced in (2013) 252 CLR 530; [2013] HCA 58. (2015) 257 CLR 178; [2015] HCA 34. 3 EF Act, s 29(10); cf EFED Act, s 95F(10). 4 EF Act, s 35. 5 EFED Act, Pt 6, Div 2A and Div 2B. 6 EFED Act, Pt 5. 7 EFED Act, s 87. Bell 20118. A party, group, candidate or third-party campaigner was prohibited from incurring electoral communication expenditure for a State election campaign during the "capped State expenditure period"9 for an election if it exceeded the cap on electoral communication expenditure. The base caps imposed by the EFED Act (not taking account of the effects of provisions for indexation at any particular point) with respect to general elections differed as between political parties and others. A party which endorsed more than ten candidates for election to the Legislative Assembly was subject to a cap of $100,000 multiplied by the number of electoral districts in which a candidate was endorsed10. "Third-party campaigners", which were defined to mean any person or entity, not being a registered party, elected member, group or candidate, who than $2,000 electoral communication expenditure during the capped State expenditure period11, were subject to a total cap of $1,050,000 if registered before the commencement of the capped State expenditure period for the election and $525,000 in any other case12. This was the same cap which applied to both a party which endorsed candidates for election to the Legislative Council but endorsed ten or fewer candidates for election to the Legislative Assembly13 and a group of independent candidates for election to the Legislative Council14. Individual or non-grouped candidates were subject to a cap of $150,00015. incurs more The amount of money available for campaign expenditure is linked with what is received by way of political donations. In Unions NSW [No 1] the general purpose of the provisions of the EFED Act which imposed caps on that receipt and expenditure was not in issue. The purpose was to secure the integrity of the legislature and government in New South Wales, which was at risk from 8 Election Funding and Disclosures Amendment Act 2010 (NSW), Sch 1. 9 As defined by EFED Act, s 95H. 10 EFED Act, s 95F(2). 11 EFED Act, s 4(1). 12 EFED Act, s 95F(10). 13 EFED Act, s 95F(3), (4). 14 EFED Act, s 95F(5). 15 EFED Act, s 95F(7), (8). Bell corrupt and hidden influences of money16. In McCloy it was also accepted that a purpose of capping donations was to ensure that wealth does not create an obstacle to equal participation in the electoral process by allowing the drowning out of the voices of others. In that sense the provisions seek to create a "level playing field" for those who wish to participate17. The EF Act In the period between the decisions in Unions NSW [No 1] and McCloy the EFED Act was amended to include a statement of its objects18. The objects of the EF Act, stated in s 3, are in similar terms: to establish a fair and transparent electoral funding, expenditure and disclosure scheme, to facilitate public awareness of political donations, to help prevent corruption and undue influence in the government of the State or in local government, to provide for the effective administration of public funding of elections, recognising the importance of the appropriate use of public revenue for that purpose, to promote compliance by parties, elected members, candidates, groups, agents, associated entities, third-party campaigners and donors with the requirements of the electoral funding, expenditure and disclosure scheme." In the Second Reading Speech to the Bill which became the EF Act19 it was said that the EF Act is designed to "preserve[] the key pillars of [the EFED Act], namely, disclosure, caps on donations, limits on expenditure and public funding". Accordingly, the EF Act generally retains, with some amendments, the 16 Unions NSW [No 1] (2013) 252 CLR 530 at 545 [8]. 17 McCloy v New South Wales (2015) 257 CLR 178 at 206-208 [43]-[47]. 18 EFED Act, s 4A. 19 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 17 May 2018 at 2. Bell scheme that applied under the EFED Act, including with respect to caps on political donations20 and caps on electoral expenditure21. the same22. The applicable caps for "electoral expenditure" in respect of parties, groups, candidates and third-party campaigners are provided for in s 29. The definition of "third-party campaigner" remains "Electoral expenditure" is defined to mean expenditure on specific items such as advertising and staff "for or in connection with ... influencing, directly or indirectly, the voting at an election"23. It is unlawful for a party, group, candidate or third-party campaigner to incur electoral expenditure for a State election campaign during the capped State expenditure period if it exceeds the applicable cap24. That period is defined in similar terms to the definition in the EFED Act, namely, in the case of a general election held at the expiry of the Legislative Assembly's fixed term, the period from and including 1 October the year prior to the election until the end of the election day25. Some public funding of election campaigns is provided for26. third-party campaigners Although the scheme remains largely the same as the EFED Act, the EF Act introduced some changes and in particular those referred to at the outset of these reasons. Section 29(10) provides that the cap on electoral expenditure which now applies the commencement of Section 35(1) makes it unlawful for a third-party campaigner to act in concert with another person or persons to incur electoral expenditure during the capped expenditure period that exceeds the cap applicable to the third-party campaigner. Section 35(2) provides that a person "acts in concert" with another person if the person "acts under an agreement (whether formal or informal) with the other person to campaign with the object, or principal object, of: (a) having a the capped State expenditure period registered before 20 EF Act, Pt 3, Div 3. 21 EF Act, Pt 3, Div 4. 22 EF Act, s 4. 23 EF Act, s 7. 24 EF Act, s 33(1). 25 EF Act, s 27; cf EFED Act, s 95H. 26 EF Act, Pt 4. Bell particular party, elected member or candidate elected, or (b) opposing the election of a particular party, elected member or candidate". The plaintiffs The plaintiffs are a collection of trade union bodies. The first plaintiff, Unions NSW, is a peak body consisting of certain unions or branches of unions with members in New South Wales and is the "State peak council" for employees for the purposes of the Industrial Relations Act 1996 (NSW) ("the IR Act"). Each of the second, third, fifth and sixth plaintiffs are organisations of employees formed for the purposes of the IR Act. The fourth plaintiff is a federally the Fair Work (Registered registered association of employees under Organisations) Act 2009 (Cth), with a State branch registered under Ch 5, Pt 3, Div 1 of the IR Act. With the exception of the sixth plaintiff, each plaintiff has registered as a third-party campaigner under the EF Act for the New South Wales State election scheduled for March 2019. With respect to that election the capped State expenditure period commenced on 1 October 2018. The sixth plaintiff, although it was registered under the EFED Act as a third-party campaigner for the State elections in 2011 and 2015, has not registered under the EF Act in respect of the March 2019 election, although it asserts an intention to do so in respect of future elections. Each plaintiff also asserts an intention to incur electoral expenditure during the capped State expenditure period in connection with future New South Wales State elections and to coordinate its campaigns with other trade unions or entities where sufficient common interest exists. In the March 2015 election campaign, which was regulated by the EFED Act, three of the plaintiffs spent more on electoral communication expenditure than would now be permissible under the EF Act. The first plaintiff spent $719,802.81 in electoral communication expenditure. The second plaintiff, the New South Wales Nurses and Midwives' Association, spent $907,831.22. The third plaintiff, the Electrical Trades Union of Australia, New South Wales Branch, spent $793,713.14. The questions The following questions have been stated by the parties for the opinion of the Full Court: Is section 29(10) of [the EF Act] invalid because it impermissibly burdens the implied freedom of communication on governmental and political matters, contrary to the Commonwealth Constitution? Bell Is section 35 of [the EF Act] invalid (in whole or in part and, if in part, to what extent), because it impermissibly burdens the implied freedom of communication on governmental and political matters, contrary to the Commonwealth Constitution? 3. Who should pay the costs of the special case?" Question 1 The issues In Lange v Australian Broadcasting Corporation27 it was declared that "each member of the Australian community has an interest in disseminating and receiving information, opinions and arguments concerning government and political matters". That freedom is implied by the provision the Commonwealth Constitution makes for representative government and the choice to be made by the people. The validity of a statutory provision which restricts or burdens that freedom depends upon the answers to questions posed in Lange28. There can be no doubt about the answer to the first enquiry so far as concerns the capping provisions of the EF Act. The capping of both political donations and electoral expenditure restricts the ability of a person or body to communicate to others, to an extent. In Unions NSW [No 1] and in McCloy there was no dispute about the burden effected by the EFED Act on the implied freedom and no party contends to the contrary so far as concerns the EF Act. It may also be observed that a cap on electoral expenditure is a more direct burden on political communication than one on political donations29 and that the reduction of the cap applicable to third-party campaigners by half effects a greater burden than the previous cap. The plaintiffs' arguments are directed to the second and third questions of the test which was identified in Lange and, with some modifications, confirmed in later decisions of this Court30. 27 (1997) 189 CLR 520 at 571; [1997] HCA 25. 28 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 567. 29 McCloy v New South Wales (2015) 257 CLR 178 at 220-221 [93], 294-295 [367]. 30 Coleman v Power (2004) 220 CLR 1; [2004] HCA 39; Monis v The Queen (2013) 249 CLR 92; [2013] HCA 4; Unions NSW [No 1] (2013) 252 CLR 530; McCloy v (Footnote continues on next page) Bell So far as concerns the second question, the plaintiffs submit that the purpose of s 29(10) is not legitimate, in the sense that it is not compatible with the maintenance of the constitutionally prescribed system of representative government. This has been referred to as "compatibility testing"31. The plaintiffs submit that the purpose of s 29(10) is essentially discriminatory. It aims to privilege the voices of political parties in State election campaigns over the voices of persons who do not stand or field candidates, by preventing third-party campaigners from campaigning on a basis equal to parties or groups of independent candidates. This submission is subject to two important qualifications. The plaintiffs do not dispute that the wider purposes of the EFED Act were legitimate in the sense discussed in Lange. They accept as accurate the summary of the purposes given for the capping provisions when they were introduced in 2011, namely that they would produce a more level playing field, limit the "political arms race" and prevent the "drowning out" of other voices. The plaintiffs also accept that the EF Act builds upon the EFED Act. It can therefore be inferred that the plaintiffs accept that the EF Act has these wider purposes, but say that s 29(10) does not. The plaintiffs' alternative argument relies upon the requirements of the third Lange question. That question assumes that the statutory provision has a legitimate purpose and enquires whether the burden which the statute imposes is justified32. A provision may be justified if it is "reasonably appropriate and adapted" or proportionate in the means chosen to advance that purpose33. The plaintiffs' principal contention in this regard is that it cannot be said that a halving of the cap on third-party campaigners' electoral expenditure is necessary and the burden cannot therefore be justified. There is no historical or factual basis shown for the reduction, nor can there be. By contrast, the figure of $1,050,000 provided for in the EFED Act was not "plucked out of the air"34 and had regard to the relativities established by that Act. It is not shown that the level New South Wales (2015) 257 CLR 178; Brown v Tasmania (2017) 261 CLR 328; [2017] HCA 43. 31 McCloy v New South Wales (2015) 257 CLR 178 at 194 [2(B)]. 32 McCloy v New South Wales (2015) 257 CLR 178 at 194 [2(B)], 231 [131]. 33 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520. 34 See Schott, Tink and Watkins, Political Donations: Final Report (2014), vol 1 at Bell of expenditure there provided for was not effective for the purpose of preventing wealthy voices drowning out others. Nothing in the reports35 which preceded the adoption of the sum in s 29(10) and which form part of the special case agreed by the parties explains the need for the reduction. The Expert Panel Report In May 2014 the New South Wales Government appointed an independent expert panel to consider and report on options for long-term reform of the State's electoral funding laws. The panel delivered a report to government in December 2014 ("the Expert Panel Report"). The Expert Panel Report generally endorsed the key components of the EFED Act, but noted that "it ha[d] become a complicated and unwieldy piece of legislation and this impedes compliance". It recommended the EFED Act be completely rewritten. the regulation of The Expert Panel Report described third-party campaigners as "a challenge". It stated a belief that third-party campaigners "should be free to participate in election campaigns but they should not be able to drown out the voices of parties and candidates who are the direct electoral contestants". It noted a long-standing concern of the conservative side of politics in Australia that trade unions provide an unfair advantage to the Labor Party and referred to a high level of concern about the possible emergence of political action committees ("PACs") modelled upon those in the United States of America, which incur very large expenditure and have the potential to undermine the role of parties and candidates in election campaigns. The Expert Panel Report accepted that there is widespread support for third-party participation in elections "within limits". It supported an approach which caps their expenditure in the same way as for parties and candidates, but was of the view that the current cap is "too high" and suggested it be halved to $500,000 "to guard against third parties coming to dominate election campaigns". It observed that third-party campaigners had spent far less than the $1 million allowance under their spending cap for the 2011 election. Whilst the spending cap "should not be set so low as to prevent third parties from having a genuine voice in debate", the report considered $500,000 to be well above the highest sum spent by third-party campaigners in the 2011 election and said that it believed it to be "a sufficient amount that strikes the right balance between the 35 Schott, Tink and Watkins, Political Donations: Final Report (2014), vol 1; New South Wales, Joint Standing Committee on Electoral Matters, Inquiry into the Final Report of the Expert Panel β Political Donations and the Government's Response (2016). Bell rights of third parties and those of parties and candidates". Perhaps assuming that its recommendations would be implemented by the 2015 election, the panel further recommended that the level of third-party spending caps be reviewed after that date "if it becomes apparent that they are causing concern". In fact, the caps remained the same for the capped expenditure period relevant to that election and the expenditure of third-party campaigners such as the plaintiffs rose, as outlined earlier in these reasons. There is a statement in the Expert Panel Report which the plaintiffs rely upon as disclosing the real purpose of s 29(10): "[t]he [p]anel strongly agrees that political parties and candidates should have a privileged position in election campaigns [because they] are directly engaged in the electoral [contest] and are the only ones able to form government and be elected to Parliament". It should be added that the report then went on to say: "That said, we also strongly support the principle that third parties should be treated as recognised participants in the electoral process. Third parties have a right to have a voice and attempt to influence voting at elections β¦ However, third parties should not be able to drown out the voice of the political parties." The Joint Standing Committee on Electoral Matters report Following the release of the Expert Panel Report, the New South Wales Government indicated its in-principle support for all but one of the Expert Panel Report's 50 final recommendations. It referred the report and the Government's response to it to the Joint Standing Committee on Electoral Matters ("the JSCEM"), which published a report in June 2016 entitled Inquiry into the Final Report of the Expert Panel β Political Donations and the Government's Response ("the JSCEM Report"). The JSCEM Report noted that three unions had spent considerably more than the proposed cap in the period 1 July 2014 to 30 June 2015. The JSCEM Report endorsed the Expert Panel Report's conclusion that third parties should not be able to run campaigns to the same extent as candidates and parties. However, noting submissions from constitutional lawyers that the cap must not be set so low that a third-party campaigner cannot reasonably present its case, the JSCEM recommended that before decreasing the cap to $500,000, the New South Wales Government consider whether there was sufficient evidence that a third- party campaigner could reasonably present its case within that expenditure limit. No material has been placed before the Court which suggests that such an analysis was undertaken. Bell The Electoral Funding Bill 2018 Speaking of the cap on electoral expenditure applying to third-party campaigners in the Electoral Funding Bill 2018, the relevant Minister advised the New South Wales Legislative Assembly that "[t]he expert panel considered that third party campaigners should have sufficient scope to run campaigns to influence voting at an election β just not to the same extent as parties or candidates. The proposed caps will allow third party campaigners to reasonably present their case while ensuring that the caps are in proportion to those of parties and candidates who directly contest elections."36 The Minister later said37 that the panel had recommended the reduction in the cap to $500,000 "to guard against third parties dominating election campaigns". He said that the JSCEM considered the panel's recommendation and supported reducing the amount of the cap. He made no reference to the caveat of the JSCEM, namely that enquiries should be made as to what was reasonably required by way of expenditure before the cap was decreased. The real issue? The defendant submits that the real point in dispute between the parties is the amount of the cap which applies to third-party campaigners. So much may be inferred from the fact that the plaintiffs do not contend that there should be no differentiation as between parties, candidates and third-party campaigners so far as concerns capping of electoral expenditure. The scheme of the EFED Act was to differentiate and the plaintiffs accept this as appropriate. The difference in those relativities can be explained on the basis that parties must incur the expenses of mounting a campaign in every electorate on all issues, so their expenditure is much greater than third-party campaigners, who may pick and choose who, what, where and how they seek to influence election outcomes. The Commonwealth, intervening, points to what it describes as an obvious tension between the plaintiffs' argument that the purpose of s 29(10) is illegitimate and their acceptance that the purposes of the EFED Act were not. It is accepted by the plaintiffs that a purpose of the EFED Act was to prevent the drowning out of voices by the distorting influence of money and that it did so in relevant part by differentiating between political parties, candidates and third- 36 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 17 May 2018 at 4. 37 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 23 May 2018 at 63. Bell party campaigners. That purpose and that treatment has not altered. That differential treatment is properly to be seen as an effect of the pursuit of that purpose. The real issue, the Commonwealth says, is one of justification of the extent of the effect of s 29(10) on the implied freedom, which falls to be determined at step 3 of the approach mandated by Lange. It is correct to observe that the plaintiffs accept as legitimate the purposes of the capping provisions of the EFED Act. The plaintiffs accept that those purposes include ensuring that wealthy voices do not drown out others. They do so by providing something of a level playing field38. In McCloy it was held that these purposes not only do not impede the system of representative government provided for by the Constitution; they enhance it39. The plaintiffs do not suggest that these purposes are not also those of the EF Act generally. But they argue that s 29(10) has a different or further purpose, namely, to privilege the voices of political parties in State election campaigns over those of third-party campaigners. However, the purposes of s 29(10) of the EF Act must be considered in context. That context includes the scheme and purposes of the EF Act as a whole and it includes the legislative history of the capping provisions, which is to say the EFED Act and its purposes. So understood there may be a real question about whether, as the Commonwealth contends, s 29(10) simply seeks to further those purposes but, in doing so, effects a greater burden on the freedom. There may also be a question whether a new and different purpose for s 29(10) can properly be discerned from opinions stated in the reports to government which preceded it. There may be such a question even though s 34(1) of the Interpretation Act 1987 (NSW) permits "any material not forming part of the Act β¦ [which] is capable of assisting in the ascertainment of the meaning of the provision" to be considered. The statements in the Expert Panel Report must be read in the context of the report as a whole. It is difficult to read the report as directed to suppressing third-party speech, given its recognition of the importance of it in the electoral process. The concerns expressed in the report were directed to what might occur in the future, particularly the possibility that US-style PACs might come to dominate campaigns. It may further be observed that if any differential treatment is an illegitimate purpose in respect of caps on donations or electoral expenditure, 38 Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 146, 175, 239; [1992] HCA 45 ("ACTV"). 39 McCloy v New South Wales (2015) 257 CLR 178 at 196 [5]. Bell the legislature would never be in a position to address the risk to the electoral process posed by such groups, as the Commonwealth points out. These questions concerning the plaintiffs' argument as to the purpose of s 29(10) may be put to one side. The legitimacy of the purpose of s 29(10) may be assumed and attention directed immediately to the issue which is clearly determinative of question 1 of the special case, namely whether the further restrictions which s 29(10) places on the freedom can be said to be reasonably necessary and for that reason justified. Taking an approach of this kind is not to deny that Lange and the cases which followed it require that the issue of compatibility of purpose be addressed before proceeding to determine whether a statutory provision is justified in the burden it places on the freedom40. But where a compatible purpose is identified by those contending for the validity of the statutory provision, the Court may proceed upon the assumption that it is the relevant purpose and then consider the issue upon which validity will nevertheless depend. This was the approach taken in ACTV41. In Unions NSW [No 1]42 it was noted that members of the Court in ACTV were prepared to assume that the purposes of the provisions in question were as stated by those contending that the legislative provisions burdening the freedom were justified. The purposes there contended for were purposes which were legitimate, in the sense later discussed in Lange. So too are the purposes for which the defendant here contends, namely those purposes which had applied to the provisions of the EFED Act. Nothing said in Lange precludes the approach taken in ACTV. It is a well- recognised aspect of judicial method to take an argument at its highest where it provides a path to a more efficient resolution of a matter. It may be otherwise with respect to the implied freedom where no legitimate purpose can be identified, but then that would be the issue most obviously determinative of the case and there would be no need to proceed further. These reasons therefore proceed on the assumption, favourable to the defendant, that the purpose of the law is to prevent the drowning out of voices by the distorting influence of money. 40 Unions NSW [No 1] (2013) 252 CLR 530 at 556 [46]; McCloy v New South Wales (2015) 257 CLR 178 at 203 [31], 231 [130], 284 [320]. 41 (1992) 177 CLR 106 at 144, 156-157, 188-189. 42 (2013) 252 CLR 530 at 557 [49]. Bell Justification β a privileged position? The defendant submits that candidates and political parties occupy a constitutionally distinct position which legitimises the preferential treatment of candidates and political parties relative to others who are not directly seeking to determine who shall be elected to Parliament or form government. The defendant argues that the foundation of the implied freedom is ss 7 and 24 of the Constitution, which require that the Senate and House of Representatives be composed of persons "directly chosen by the people". It is said that the choice that is protected by the implied freedom is not a choice between ideas, policies, views or beliefs except insofar as such choice may be reflected in the electoral choice between candidates. Further in this regard, it is said that the "processes of choice by electors to which ss 7 and 24 allude ... encompass legislated processes which facilitate and translate electoral choice in order to determine who is or is not elected as a senator or member of the House of Representatives"43. On that basis, the defendant argues that candidates and political parties enjoy special significance as the subjects of the protected electoral choice, which itself justifies their differential treatment. Those submissions should not be accepted. The requirement of ss 7 and 24 of the Constitution that the representatives be "directly chosen by the people" in no way implies that a candidate in the political process occupies some privileged position in the competition to sway the people's vote simply by reason of the fact that he or she seeks to be elected. Indeed, to the contrary, ss 7 and 24 of the Constitution guarantee the political sovereignty of the people of the Commonwealth by ensuring that their choice of elected representatives is a real choice, that is, a choice that is free and well-informed44. Because the implied freedom ensures that the people of the Commonwealth enjoy equal participation in the exercise of political sovereignty45, it is not surprising that there is nothing in the authorities which supports the submission that the Constitution impliedly privileges candidates and parties over the electors as sources of political speech. Indeed, in ACTV, Deane and Toohey JJ observed that the implied freedom46: 43 Re Nash [No 2] (2017) 92 ALJR 23 at 30 [35]; 350 ALR 204 at 212; [2017] HCA 44 ACTV (1992) 177 CLR 106 at 138-139; Brown v Tasmania (2017) 261 CLR 328 at 45 Unions NSW [No 1] (2013) 252 CLR 530 at 578 [135]. 46 ACTV (1992) 177 CLR 106 at 174. Bell "extends not only to communications by representatives and potential representatives to the people whom they represent. It extends also to communications from the represented to the representatives and between the represented." Justification β a reasonable necessity? The provisions in question in ACTV prohibited the broadcasting of political advertisements or information during an election period. They were held to infringe the implied freedom and to be invalid. Invalidity resulted because the nature or extent of the restrictions could not be justified47. In Lange48 it was observed that the provisions in question in ACTV were held to be invalid because there were other, less drastic, means by which the objects of the law could have been achieved. This passage in Lange was referred to in the joint judgment in McCloy49, where it was explained that if there are other equally effective means available to achieve the statute's legitimate purpose but which impose a lesser burden on the implied freedom, it cannot be said that one which is more restrictive of the freedom is reasonably necessary to achieve that purpose. It is well understood that an enquiry as to the necessity of a provision which effectively burdens the implied freedom is one of the tests of structured proportionality analysis. If the provision fails the necessity test, then, on that approach, it will be held invalid50. Such a test also mirrors to an extent the enquiry which has been applied to test the validity of legislation which restricts the freedom guaranteed by s 92 of the Constitution, as was observed in McCloy51. In Unions NSW [No 1]52, reference was made to the most recent of these cases: Betfair Pty Ltd v Western Australia53. In that case it was not doubted that the provisions in question, which restricted interstate betting on horse races, 47 ACTV (1992) 177 CLR 106 at 147, 175, 235. 48 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 568. 49 McCloy v New South Wales (2015) 257 CLR 178 at 210 [57]. 50 McCloy v New South Wales (2015) 257 CLR 178 at 194 [2(B)]. 51 McCloy v New South Wales (2015) 257 CLR 178 at 210 [57]. 52 (2013) 252 CLR 530 at 556-557 [48]. 53 (2008) 234 CLR 418; [2008] HCA 11. Bell addressed perceived problems relating to the integrity of the racing industry in Western Australia. The legislation was held to be invalid because a complete prohibition was not necessary to achieve its objects. This was made evident by legislation adopted in another State which was directed to achieving the same purpose but effected a much lesser burden on the freedom54. A similar approach was taken to existing legislative measures in the joint judgment in Brown v Tasmania55. In an earlier case concerning s 92, North Eastern Dairy Co Ltd v Dairy Industry Authority of NSW56, Mason J said that the regulation of the milk trade was not shown to be the "only practical and reasonable mode" of regulation which could achieve the law's stated objective of ensuring high-quality milk and the protection of public health. In Betfair, that view was accepted as "the doctrine of the Court"57. That doctrine was held to be consistent with the explanation given in Cole v Whitfield58 of the justification of the total prohibition of the sale of undersized crayfish in Tasmania, irrespective of origin, namely that it was a "necessary means" of enforcing the prohibition on catching undersized fish in Tasmania because inspections necessary for that purpose were not practicable. The defendant submits that the sum of $500,000 which may be expended by third parties in campaigning is a substantial sum. Pressed as to how it could be said to be sufficient, given in particular that the further research recommended by the JSCEM as to what is reasonably required by third-party campaigners appears not to have been undertaken, the defendant responded that Parliament does not need to provide evidence for the legislation it enacts. It is entitled to make the choice as to what level of restriction is necessary to meet future problems. It must of course be accepted that Parliament does not generally need to provide evidence to prove the basis for legislation which it enacts. However, its position in respect of legislation which burdens the implied freedom is otherwise. 54 Betfair Pty Ltd v Western Australia (2008) 234 CLR 418 at 468-469 [64], 479 55 (2017) 261 CLR 328. 56 (1975) 134 CLR 559 at 616; [1975] HCA 45. 57 Betfair Pty Ltd v Western Australia (2008) 234 CLR 418 at 477 [103]. 58 (1988) 165 CLR 360; [1988] HCA 18. Bell Lange requires that any effective burden be justified59. As the Commonwealth conceded in argument, the Parliament may have choices but they have to be justifiable choices where the implied freedom is concerned. The defendant seeks to mark out an area within which it might make a choice and which might not be subject to a requirement of justification. It submits that the choice it made, to reduce the third-party campaigners' cap to $500,000, lies within the domain of its choice. The phrase "domain of the legislative discretion" appears in Professor Barak's text60. The joint judgment in McCloy61 referred to this concept as the legislature's "domain of selections", in a discussion of the respective roles of the Court and of the Parliament in the context of the question of necessity. It was there said that that question does not deny that it is the role of the Parliament to select the means by which a legitimate statutory purpose may be achieved. It is the role of the Court to ensure that the freedom is not burdened when it need not be. The domain of selections open to the Parliament was described as comprising those provisions which fulfil the legislative purpose with the least harm to the implied freedom. And as the Commonwealth pointed out in argument, there may be a multitude of options available to the Parliament in selecting the desired means. The defendant's submission that the decision concerning the level of capping of electoral expenditure is reserved to the Parliament and not subject to scrutiny by the Court may be understood to imply a requirement of some kind of deference to Parliament on the part of the Court or a "margin of appreciation". It may derive some support from what was said by the majority in Harper v Canada (Attorney General)62. The legislation in question in Harper contained provisions which imposed caps on spending by third parties on election advertising in a manner similar to the EFED Act and the EF Act. The provisions were very restrictive. Third parties were limited to expenditure of $3,000 in a given electoral district or $150,000 nationally. 59 McCloy v New South Wales (2015) 257 CLR 178 at 213-214 [68]-[69]; Brown v Tasmania (2017) 261 CLR 328 at 359 [88], 361 [92]. 60 Barak, Proportionality: Constitutional Rights and Their Limitations (2012) at 409. 61 McCloy v New South Wales (2015) 257 CLR 178 at 217 [82]. 62 [2004] 1 SCR 827. Bell Neither the majority nor the minority in Harper doubted that the purposes for restricting expenditure of this kind could be legitimate. Statements by the majority as to those proper purposes, such as preventing the drowning out of voices and enhancing the electoral process, were referred to in McCloy63 with respect to the EFED Act. However, no reference was made in McCloy to the decision arrived at by the majority in Harper as to the validity of the provisions, or to the reasons given by McLachlin CJ, Major and Binnie JJ in their Honours' strong dissent. The majority in Harper concluded that the restrictions affecting third parties were valid. At one point in their reasons the majority pointed to a number of contextual factors which, it was said, "favour a deferential approach to Parliament" in determining whether the third-party advertising expense limits were demonstrably justified64. The minority likewise accorded "a healthy measure of deference"65 to Parliament, although their Honours came to a different conclusion. No statements of the kind made in Harper are to be found in decisions of this Court since Lange respecting the implied freedom. Indeed it has been observed that deference would seem not to be appropriate given this Court's role in relation to the freedom and a margin of appreciation therefore cannot apply66. There were other differences of view as between the majority and minority in Harper, including as to whether the effect of the legislation was to prevent effective communication and as to the evidence on that question. The real question in the case, the minority said67, was whether the limits effected by the statute on free political expression go too far. That question was answered in large part by an enquiry as to whether the legislation infringes the right to free expression provided by the Canadian Charter of Rights and Freedoms in a way that is "measured and carefully tailored" to the goals sought to be achieved68. The test of "minimal impairment" established by prior Canadian authority 63 McCloy v New South Wales (2015) 257 CLR 178 at 207 [44]. 64 Harper v Canada (Attorney General) [2004] 1 SCR 827 at 879 [88]. 65 Harper v Canada (Attorney General) [2004] 1 SCR 827 at 849 [39]. 66 Unions NSW [No 1] (2013) 252 CLR 530 at 553 [34], 556 [45]; McCloy v New South Wales (2015) 257 CLR 178 at 220 [90]-[91]. 67 Harper v Canada (Attorney General) [2004] 1 SCR 827 at 846 [31]. 68 Harper v Canada (Attorney General) [2004] 1 SCR 827 at 846 [32]. Bell requires that the rights be impaired no more than is necessary69. An analogy with a requirement of reasonable necessity is evident. The restrictions in Harper were considered by the minority to be severe. Critically, from their Honours' perspective, the Attorney-General had not demonstrated that limits so severe were required to meet perceived dangers such as inequality70. The same conclusion is compelling with respect to s 29(10). As the plaintiffs point out, no basis was given in the Expert Panel Report for a halving of the figure previously allowed for third-party campaigning expenses. It may have been thought to be a reasonable allowance given the level of expenditure by third-party campaigners at the 2011 election. The report recommended that the figure be checked against expenditure for the 2015 election. If that enquiry had been undertaken, a different conclusion might have been reached. And despite the recommendation of the JSCEM, no enquiry as to what in fact is necessary to enable third-party campaigners reasonably to communicate their messages appears to have been undertaken. The defendant has not justified the burden on the implied freedom of halving the cap in s 29(10) as necessary to prevent the drowning out of voices other than those of third-party campaigners. The plaintiffs' submissions in this regard should be accepted. Section 29(10) is invalid. Question 2 Because the answer to question 1 is "yes", there is no cap upon which s 35 of the EF Act operates. The defendant invited the Court nevertheless to answer question 2 because some provision might be made in the remainder of the capped State expenditure period to replace that cap. That is an invitation to speculate. It is not necessary to answer the question. Applications to intervene The University of New South Wales Grand Challenge on Inequality ("the UNSW GCI") sought leave, as amicus curiae, to be heard and to adduce evidence as to constitutional facts. Those facts did not form part of the special case agreed by the parties. The Liberal Party of Australia (NSW Division) ("the NSW Liberal Party") sought leave to intervene in support of the defendant. Both applications were refused by the Court in advance of the hearing. 69 Harper v Canada (Attorney General) [2004] 1 SCR 827 at 846-847 [32]. 70 Harper v Canada (Attorney General) [2004] 1 SCR 827 at 849 [38]. Bell It cannot be doubted that there are occasions when the Court is assisted by the submissions of a person or body not a party to the proceedings or having a right to intervene. It may be assisted most obviously when there is no contradictor or the parties do not present argument on an issue which the Court considers necessary to be determined. It may be otherwise where the parties have fully canvassed all relevant issues. This observation is apposite to the NSW Liberal Party's application for intervention. The issues raised by the special case were comprehensively dealt with by the parties and the Commonwealth and the States which intervened. There was no basis for the NSW Liberal Party's application. So far as concerns the application by the UNSW GCI it is possible that in a particular case additional constitutional facts may provide a wider perspective and facilitate the Court's determination of constitutional issues. It is to be expected that this will occur only rarely and that the Court will be cautious about what would amount to an expansion of a case agreed by the parties by permitting an intrusion of new facts or issues. There was no warrant for adding to the case in the manner suggested by the UNSW GCI. Answers The questions stated by the parties for the opinion of the Full Court should be answered as follows: Question 1: Yes. Question 2: Unnecessary to answer. Question 3: The defendant. GAGELER J. Forty years before the first articulation of the constitutionally implied freedom of political communication in Nationwide News Pty Ltd v Wills71 and Australian Capital Television Pty Ltd v The Commonwealth ("ACTV")72, a law purporting to dissolve the Australian Communist Party and to authorise banning by Commonwealth Executive order of incorporated or unincorporated associations professing similar ideology was held to exceed the legislative power of the Commonwealth Parliament in Australian Communist Party v The Commonwealth ("the Communist Party Case")73. An argument rejected in the Communist Party Case was that the prohibition of any organisation solemnly determined by the Commonwealth Parliament to be subversive of the Constitution is within the power conferred on the Commonwealth Parliament by s 51(xxxix) to make laws with respect to matters incidental to the execution and maintenance of the Constitution vested in the Commonwealth Executive by s 61. The response of Dixon J to that argument was one of theory informed by experience74: "History and not only ancient history, shows that in countries where democratic institutions have been unconstitutionally superseded, it has been done not seldom by those holding the executive power. Forms of government may need protection from dangers likely to arise from within the institutions to be protected. In point of constitutional theory the power to legislate for the protection of an existing form of government ought not to be based on a conception, if otherwise adequate, adequate only to assist those holding power to resist or suppress obstruction or opposition or attempts to displace them or the form of government they defend." Of the limits of the power of the Commonwealth Parliament to make laws with respect to matters incidental to the execution and maintenance of the Constitution, Dixon J went on to say75: "The power is ancillary or incidental to sustaining and carrying on government. Moreover, it is government under the Constitution and that is an instrument framed in accordance with many traditional conceptions, to some of which it gives effect, as, for example, in separating the judicial 71 (1992) 177 CLR 1; [1992] HCA 46. 72 (1992) 177 CLR 106; [1992] HCA 45. 73 (1951) 83 CLR 1; [1951] HCA 5. 74 (1951) 83 CLR 1 at 187-188. 75 (1951) 83 CLR 1 at 193. power from other functions of government, others of which are simply assumed. Among these I think that it may fairly be said that the rule of law forms an assumption. In such a system I think that it would be impossible to say of a law of the character described, which depends for its supposed connection with the power upon the conclusion of the legislature concerning the doings and the designs of the bodies or person to be affected and affords no objective test of the applicability of the power, that it is a law upon a matter incidental to the execution and maintenance of the Constitution and the laws of the Commonwealth." Dixon J's observation that the rule of law was assumed in the framing of the Constitution corresponded with Fullagar J's observation that "in our system the principle of Marbury v Madison is accepted as axiomatic, modified in varying degree in various cases (but never excluded) by the respect which the judicial organ must accord to opinions of the legislative and executive organs"76. Conformably with that principle, which itself is no more than an application of the rule of law to a system in which a written constitution has the status of a higher law, "[i]t is the courts, rather than the legislature itself, which have the function of finally deciding whether an Act is or is not within power"77. The Communist Party Case bears on the implied freedom of political communication in a number of respects relevant to the resolution of issues raised in the present case. First, it provides a stark illustration of a purpose β to "assist those holding power to resist or suppress obstruction or opposition or attempts to displace them or the form of government they defend" β legislative adoption of which is not legitimate in the sense that the purpose is not compatible with maintenance of the constitutionally prescribed system of representative and responsible government. Second, the Communist Party Case forms part of the historical background to the reason given by Mason CJ in ACTV for why the High Court "should be astute not to accept at face value claims by the legislature and the Executive that freedom of communication will, unless curtailed, bring about corruption and distortion of the political process". Mason CJ said78: "Experience has demonstrated on so many occasions in the past that, although freedom of communication may have some detrimental consequences for society, the manifest benefits it brings to an open society 76 (1951) 83 CLR 1 at 262-263 (citation omitted). 77 Attorney-General (WA) v Marquet (2003) 217 CLR 545 at 570 [66]; [2003] HCA 78 (1992) 177 CLR 106 at 145. generally outweigh the detriments. All too often attempts to restrict the freedom in the name of some imagined necessity have tended to stifle public discussion and criticism of government." Mason CJ referred to the need for the Court to "scrutinize with scrupulous care" a legislative restriction on political communication in order to ensure that the restriction is "no more than is reasonably necessary to achieve the protection of the competing public interest which is invoked to justify the burden on communication"79. Gleeson CJ later explained in Mulholland v Australian Electoral Commission ("Mulholland")80 that "reasonably necessary" in that formulation is not to be taken to mean "unavoidable or essential" but "to involve close scrutiny, congruent with a search for 'compelling justification'". That, his Honour held, was the level of scrutiny and the corresponding standard of justification applicable to a Commonwealth legislative restriction on political communication in the conduct of an election for Commonwealth political Contrary to an argument advanced on behalf of the Attorney-General for South Australia intervening in the present case, the level of scrutiny and the corresponding standard of justification applicable to a State legislative restriction on political communication in the conduct of an election for State political office can be no less onerous than those applicable to a Commonwealth legislative restriction on political communication in the conduct of an election for Commonwealth political office. The same level of scrutiny and the same standard of justification are warranted because the risk to maintenance of the system of representative and responsible government established by Chs I and II of the Constitution that inheres in the representative character of a State Parliament is of the same nature as the risk to maintenance of that system that inheres in the representative character of the Commonwealth Parliament. The risk arises from the propensity of an elected majority to undervalue, and, at worst, to seek to protect itself against adverse electoral consequences resulting from, political communication by a dissenting minority82. Third, the Communist Party Case is authority for a specific principle of constitutional adjudication, amounting to an application of the more general 79 (1992) 177 CLR 106 at 143-144. 80 (2004) 220 CLR 181 at 200 [40]; [2004] HCA 41. 81 (2004) 220 CLR 181 at 200-201 [40]-[41]. 82 McCloy v New South Wales (2015) 257 CLR 178 at 227-228 [114]-[117], 265 [245]; [2015] HCA 34. principle in Marbury v Madison83, which bears directly on the Court's determination of whether legislation burdening political communication meets the requisite standard of justification. The specific principle of constitutional adjudication, as expounded by Williams J, is that "it is the duty of the Court in every constitutional case to be satisfied of every fact the existence of which is necessary in law to provide a constitutional basis for the legislation"84. That principle is ultimately determinative in the present case. Agreeing that the questions reserved for the consideration of the Full Court should be answered as proposed by Kiefel CJ, Bell and Keane JJ, I set out my own reasoning on two issues. One concerns the identification and legitimacy of the purposes of s 29(10) of the Electoral Funding Act 2018 (NSW) ("the EF Act"). The other concerns the absence of justification for the amount of the cap which s 29(10) imposes on electoral expenditure incurred by a third-party campaigner during the capped State expenditure period for a State election. Legitimacy of purposes The stated objects of the EF Act are materially identical to those of the Election Funding, Expenditure and Disclosures Act 1981 (NSW) ("the EFED Act"), provisions of which were considered in Unions NSW v New South Wales85 and McCloy v New South Wales ("McCloy")86. The stated objects include "to establish a fair and transparent electoral funding, expenditure and disclosure scheme" and "to help prevent corruption and undue influence in the government of the State"87. The purposes of s 29(10) of the EF Act are argued by the State of New South Wales to fall squarely within those stated objects. The State emphasises that the cap on the electoral expenditure of third-party campaigners is one element of an overall scheme which also provides for caps on electoral 84 (1951) 83 CLR 1 at 222. See Hughes and Vale Pty Ltd v New South Wales [No 2] (1955) 93 CLR 127 at 165; [1955] HCA 28; Commonwealth Freighters Pty Ltd v Sneddon (1959) 102 CLR 280 at 307; [1959] HCA 11. 85 (2013) 232 CLR 530; [2013] HCA 58. 86 (2015) 257 CLR 178. 87 Section 3(a) and (c) of the EF Act. See also s 4A(a) and (c) of the EFED Act. expenditure by candidates for election, groups of candidates and political parties endorsing candidates for election88 as well as for caps on political donations89. Capping electoral expenditure by third-party campaigners, the State argues, serves two complementary purposes. It increases fairness, by preventing a well-funded source of information or opinion from being able to dominate and distort political discourse during an election period90. And it reduces the risk of corruption or undue influence in the government of the State which can arise from elected office holders finding themselves beholden to those whose funding, or whose withholding of funding, contributed to the office holders' electoral The plaintiffs do not dispute that the legislative purposes which the State asserts are compatible with maintenance of the constitutionally prescribed system of representative and responsible government. The plaintiffs do not dispute that a cap on electoral expenditure by third-party campaigners can have those purposes. Indeed, the plaintiffs do not dispute that the cap on electoral expenditure by third-party campaigners formerly imposed under the EFED Act was properly explained as having those purposes and was reasonably appropriate and adapted to advance those purposes in a manner compatible with maintenance of the constitutionally prescribed system of representative and responsible government. The plaintiffs' argument is that in the parliamentary processes which resulted in the replacement of the cap on electoral expenditure by third-party campaigners under the EFED Act with the cap on electoral expenditure by third- party campaigners under the EF Act, an additional and nefarious legislative purpose intruded. The additional and nefarious legislative purpose is said to be that of "marginalising" the contribution of third-party campaigners to political discourse during an election period and correspondingly of "privileging" the contribution of candidates and parties. This purpose is said to inhere in a legislative design which seeks to ensure that the contribution of a third-party campaigner to political discourse will not be so large as to be capable of determining the result of an election. To support the inference of an intrusion of such an additional and nefarious legislative purpose into the design of the EF Act, the plaintiffs point to 88 Division 4 of Pt 3 of the EF Act. 89 Division 3 of Pt 3 of the EF Act. 90 cf McCloy (2015) 257 CLR 178 at 207 [45], 248 [182]. 91 McCloy (2015) 257 CLR 178 at 204-205 [36], 248 [181]. the equation under the EFED Act of the cap on electoral expenditure for a third- party campaigner with the cap on electoral expenditure for both a party endorsing candidates for election to the Legislative Council and a group of candidates not endorsed by any party for election to the Legislative Council92. The plaintiffs point to the relativity under the EFED Act between the amount of those caps on electoral expenditure and the amount of the cap on electoral expenditure for a party endorsing candidates for all electoral districts of the Legislative Assembly. As initially imposed by the EFED Act in 2011, those amounts were, respectively, $1,050,00093 and $9,300,00094, the former amount being a little more than 11 per cent of the latter. The EF Act maintains the same real value of, and essentially the same relativity between, the amounts of the caps on electoral expenditure for a party endorsing candidates only for the Legislative Council and a group of candidates for the Legislative Council, both of which are set at $1,288,50095, and the amount of the cap on electoral expenditure for a party endorsing candidates for all electoral districts of the Legislative Assembly, which is set at $11,429,70096. The plaintiffs contrast the retention of that status quo with the reduction under the EF Act of the cap on electoral expenditure for a third-party campaigner to $500,000 (a reduction in real terms of a little more than 60 per cent from the previous cap of $1,050,000, as adjusted for inflation, under the EFED Act97), the effect of which is to reduce the maximum electoral expenditure available to a third-party campaigner to less than five per cent of the maximum electoral expenditure available to a major party. The plaintiffs also rely on the reasons given in the Final Report of the Panel of Experts on Political Donations in New South Wales in 2014 for the Panel's recommendations that "the cap on electoral expenditure by third-party campaigners be decreased to $500,000"98 and that "a third-party campaigner be 92 Section 95F(4)-(5), (10)(a) of the EFED Act. 93 Section 95F(4)-(5) read with s 95F(14) and Sch 1, cl 3 of the EFED Act. 94 Section 95F(2)-(3) read with s 95F(14) and Sch 1, cl 3 of the EFED Act. 95 Section 29(4)-(5) of the EF Act. 96 Section 29(2)-(3) of the EF Act. 97 See Election Funding, Expenditure and Disclosures (Adjustable Amounts) Amendment Notice 2015 (NSW), Sch 1 [8]. 98 Panel of Experts, Political Donations: Final Report (2014), vol 1 at 14, 113 (Recommendation 31). prohibited from acting in concert with others to incur electoral expenditure that exceeds the third-party campaigner's expenditure cap"99. The plaintiffs point out that the Special Minister of State, when sponsoring the Bill for the EF Act in 2018 in the Legislative Assembly, identified implementation of the first of those recommendations as the sole basis for the choice of the amount which came to be specified in s 29(10)100. The Panel prepared its Final Report following consultations which it described as having revealed "a high level of concern about the increase in third- party campaigning" and alarm at "the prospect of New South Wales following the lead of the United States, where Political Action Committees have come to dominate election campaigns"101. The Panel referred to a recent academic study indicating that in Australia, as elsewhere, "third-party advertising appears to be on the increase, in both the frequency and size of campaigns"102. The Panel agreed with the proposition put to it in submissions by one of the authors of that study to the effect that "political parties and candidates should have a privileged position in election campaigns" for the reason that political parties and candidates alone are directly engaged in the electoral contest and that they alone are able to be elected to Parliament and to form government103. The Panel also agreed with the proposition that third parties "should be treated as recognised participants in the electoral process" but that third parties "should not be able to drown out the voice of the political parties"104. The Panel expressed concern that "a lack of appropriate third-party regulation would work against reformist governments pursuing difficult and controversial issues in the public interest"105. Noting that electoral expenditure by a third party at the then most recent State election, in 2011, had not exceeded $400,000, and recording that it would be appropriate to review the level of third-party expenditure caps after the 2015 State election, the 99 Panel of Experts, Political Donations: Final Report (2014), vol 1 at 14, 116 (Recommendation 32(c)). 100 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 17 May 2018 at 4. 101 Panel of Experts, Political Donations: Final Report (2014), vol 1 at 8, 108. 102 Panel of Experts, Political Donations: Final Report (2014), vol 1 at 108, quoting Orr and Gauja, "Third-Party Campaigning and Issue-Advertising in Australia" (2014) 60 Australian Journal of Politics and History 73 at 74. 103 Panel of Experts, Political Donations: Final Report (2014), vol 1 at 108-109. 104 Panel of Experts, Political Donations: Final Report (2014), vol 1 at 109. 105 Panel of Experts, Political Donations: Final Report (2014), vol 1 at 110. Panel took the view that $500,000 was "a sufficient amount that strikes the right balance between the rights of third parties and those of parties and candidates"106. The Panel also recommended that the aggregation of third-party expenditure be prohibited, by a provision along the lines of that which came to be enacted as s 35 of the EF Act, as a means of preventing third-party campaigners "from launching a coordinated campaign with a combined expenditure cap that would completely overwhelm parties, candidates and other third parties acting alone"107. Finally, the plaintiffs point to the apparent failure of the New South Wales Government, before introduction of the Bill for the EF Act in 2018, to act on the recommendation of the Joint Standing Committee on Electoral Matters in 2016 "that, before decreasing the cap on electoral expenditure by third-party campaigners to $500,000 ... the NSW Government considers whether there is sufficient evidence that a third-party campaigner could reasonably present its case within this expenditure limit"108. That is despite evidence having been publicly available from 2016 of Unions NSW, the Electrical Trades Union of Australia, New South Wales Branch and the New South Wales Nurses and Midwives' Association, as third-party campaigners, each having in fact incurred electoral expenditure in excess of $500,000 during the capped expenditure period for the 2015 State election. Where, as here, legislation includes an express statement of statutory objects, identification of legislative purpose must start with the objects so stated, and as illuminated, to the extent their expression might be obscure or ambiguous, by the statutory context. In the face of an express statement of statutory objects, an additional object that is not only unexpressed but also constitutionally impermissible should not lightly be inferred. In the legislative history on which the plaintiffs rely, there is no smoking gun. The agreement of the Panel of Experts on Political Donations in New South Wales with the proposition that "political parties and candidates should have a privileged position in election campaigns" cannot be divorced from its agreement with the proposition that third parties "should not be able to drown out the voice of the political parties"109. The apparent failure of the New South Wales Government to act on the recommendation of the Joint Standing Committee on 106 Panel of Experts, Political Donations: Final Report (2014), vol 1 at 112. 107 Panel of Experts, Political Donations: Final Report (2014), vol 1 at 116. 108 Joint Standing Committee on Electoral Matters, Inquiry into the Final Report of the Expert Panel β Political Donations and the Government's Response (2016) at ix, 49 (Recommendation 7). 109 Panel of Experts, Political Donations: Final Report (2014), vol 1 at 109. Electoral Matters is as consistent with oversight as it is with deliberate inattention. And the cap on the electoral expenditure of a third-party campaigner imposed by s 29(10) of the EF Act cannot be said to have been set at an amount that is obviously so low in absolute or relative terms that the cap is incapable of being explained as a legislative attempt to promote the statutory objects expressed in the EF Act in the manner propounded by the State. Quite apart from the strength or weakness of the indications on which the plaintiffs rely, however, the plaintiffs' attempt to have the Court take the extraordinary step of accepting that s 29(10) of the EF Act (and, with it, s 35 of the EF Act) has an unexpressed and constitutionally impermissible purpose encounters two interrelated difficulties concerning the manner in which the plaintiffs seek to identify that purpose. One difficulty is that the plaintiffs fail to engage with the substantive and inherently fact-dependent dimension of the stated object of the EF Act to establish a scheme of expenditure that is "fair". The notion of fairness referred to in that statement is that captured in the reference by the majority of the Supreme Court of Canada in Harper v Canada (Attorney General)110 to the creation of a "level playing field for those who wish to engage in the electoral discourse" which in turn "enables voters to be better informed; no one voice is overwhelmed by another". Within a field of institutional design in which metaphors abound and often clash, the notion of fairness is more akin to that of a "public square meeting" in which all points of view get to be aired than that of an unregulated "marketplace of ideas" in which the purveyor who can afford the largest megaphone gets to drown out his or her competitors111. The legislative purpose of promoting such substantive fairness amongst those wishing to engage in the electoral discourse was accepted in McCloy to be compatible with the constitutionally prescribed system of representative and responsible government112. The point, crisply put in the written submissions of the Attorney-General of the Commonwealth, is that it is permissible within our constitutional system "to restrict certain voices β those that may otherwise dominate the debate β to make room for all to be heard and thereby ensure that electoral choice is as fully informed as possible". The more conceptual and more fundamental difficulty is that the illegitimate legislative purpose sought to be identified by the plaintiffs has 110 [2004] 1 SCR 827 at 868 [62]. 111 Tham, Money and Politics: The Democracy We Can't Afford (2010) at 17, referring to Fiss, The Irony of Free Speech (1996) at 4. 112 (2015) 257 CLR 178 at 207-208 [44]-[47]. embedded within it a notion of want of justification. Informing the asserted illegitimacy of the purpose of "privileging" candidates and parties on the one hand and "marginalising" third-party campaigners on the other hand is an implicit assertion that the "privileging" of one voice and "marginalising" of another is incompatible with maintenance of the constitutionally prescribed system of representative and responsible government. Yet, stripped of their pejorative connotations, "privileging" and "marginalising" refer to nothing more than differential treatment and unequal outcomes. Once it is recognised that "differential treatment and unequal outcomes may be the product of a legislative distinction which is appropriate and adapted to the attainment of a proper objective"113, it becomes apparent that the compatibility of the "privileging" and "marginalising" of which the plaintiffs complain with maintenance of the constitutionally prescribed system of representative and responsible government cannot be determined without further analysis. Unlike the Commonwealth electoral legislation held to infringe the implied freedom of political communication in ACTV, there is no suggestion that the EF Act is "weighted in favour of the established political parties represented in the legislature immediately before the election" as against "new and independent candidates"114. There is no suggestion of abuse of incumbency. The differential treatment of which the plaintiffs complain is rather between all "candidates" and "parties" as defined in the EF Act, on the one hand, and all "third-party campaigners" as defined in the EF Act, on the other hand. According to the definitions in the EF Act, a "candidate" is any person who has nominated as a candidate for election to the Legislative Assembly or the Legislative Council, a "party" is "a body or organisation, incorporated or unincorporated, having as one of its objects or activities the promotion of the election to Parliament ... of a candidate or candidates endorsed by it or by a body or organisation of which it forms a part", and a "third-party campaigner" is "a person or another entity (not being an associated entity, party, elected member, group or candidate) who incurs electoral expenditure for a State election during a capped State expenditure period that exceeds $2,000 in total"115. "Electoral expenditure" is "expenditure for or in connection with promoting or opposing, directly or indirectly, a party or the election of a candidate or candidates or for the purpose of influencing, directly or indirectly, the voting at an election"116 but "does not include expenditure incurred by an entity or other person (not being a 113 Mulholland (2004) 220 CLR 181 at 234 [147]. 114 (1992) 177 CLR 106 at 146. 115 Section 4 of the EF Act. 116 Section 7(1) of the EF Act. party, an associated entity, an elected member, a group or a candidate) if the expenditure is not incurred for the dominant purpose of promoting or opposing a party or the election of a candidate or candidates or influencing the voting at an election"117. For a periodic general election, the "capped State expenditure period" is the period from "1 October in the year before which the election is to be held to the end of the election day"118, being the fourth Saturday in March following the expiry of the previous Legislative Assembly119. On no conceivable basis could it be suggested that participation of candidates and political parties in election campaigns and endorsement of candidates by political parties is incompatible with maintenance of the constitutionally prescribed system of representative and responsible government. Candidates for election are integral to the very notion of electoral choice which underlies the very concept of representative government, alignment of candidates for election to political parties has been a feature of the experience of representative and responsible government in Australia from the 1890s to the present120, and the fact that a successful candidate may have been publicly recognised by a particular political party as being an endorsed candidate of that party and may have publicly represented himself or herself to be such a candidate has been expressly recognised in the manner which has been prescribed by s 15 of the Constitution for the filling of casual vacancies in the Senate since 1977121. The reasoning of Gleeson CJ and of Kirby J in Mulholland122 illustrates how differences between candidates who are endorsed by registered political parties and those who are not can justify, consistently with the implied freedom of political communication, differences in the provision of electoral information to voters. Given that the plaintiffs accept the legitimacy of the cap on electoral expenditure by third-party campaigners that was formerly imposed under the EFED Act, it is plain that it is no part of the plaintiffs' argument to dispute that differences between candidates and political parties on the one hand and third- party campaigners on the other hand can legitimately lead to very substantial variations in the caps on electoral expenditure applicable to each. There is a need 117 Section 7(3) of the EF Act. 118 Section 27(a) of the EF Act. 119 Sections 24(1) and 24A(a) of the Constitution Act 1902 (NSW). 120 See Jaensch, Power Politics: Australia's Party System, 3rd ed (1994) at 18-37. 121 Constitution Alteration (Senate Casual Vacancies) 1977 (Cth). 122 (2004) 220 CLR 181 at 201 [41], 271-273 [264]-[267]. to be clear about what those differences are, in order to be clear about how those differences have the potential to explain differential treatment and differential outcomes in the ultimate pursuit of substantive fairness. Professor Crisp long ago explained the "crucial distinction" between political parties and "interest-groups" of the kind which might now meet the definition of third-party campaigners in the EF Act as lying "in the different purpose of their respective commitments to political activity and the different directions that their activities take"123. The functional distinction important for present purposes is that, during a period leading up to an election, a political party which aims to form government must be in a position to communicate on the whole range of issues of potential concern to voters whereas a third-party campaigner can concentrate its resources on a single issue of concern to it. To be equipped not only to communicate on a range of issues but also to respond meaningfully to third-party campaigners, the political party needs to be able to marshal greater resources. Once it is accepted that it is a legitimate legislative purpose to promote a level playing field for all participants in political discourse during an election period, it becomes obvious that the functional distinction between a political party which aims to form government and a third-party campaigner justifies a substantial variation between the amount of the cap imposed on the electoral expenditure of that political party and the amount of the cap imposed on the electoral expenditure of a third-party campaigner. To ensure that the political party is able to communicate on the range of issues of potential concern to voters without being overwhelmed by the targeted campaigns of any number of third- party campaigners acting alone or in concert, the cap on the third-party campaigner must be substantially lower than the cap on the political party. No doubt, it might be said of any substantial variation between the amount of the cap applicable to candidates or political parties and the amount of the cap applicable to third-party campaigners, imposed in the ostensible pursuit of the objective of substantive fairness, that a purpose of the variation is to "privilege" candidates and parties and to "marginalise" third-party campaigners. The point is that those labels have no constitutional significance if the amount of each cap can be justified on the basis that each amount is reasonably appropriate and adapted to advance the objective of substantive fairness in a manner compatible with maintenance of the constitutionally prescribed system of representative and responsible government. Whether the amount of the cap on the electoral expenditure of a third- party campaigner set by s 29(10) of the EF Act is illegitimate on the basis 123 Crisp, Australian National Government, 5th ed (1983) at 163. advanced by the plaintiffs is accordingly indistinguishable from the question of whether the amount is justified on the basis advanced by the State. The latter question is the real question in the present case. Want of justification Having concluded that the provisions of the EFED Act in issue in McCloy burdened political communication, the plurality in that case stated that "[i]t is, then, incumbent upon New South Wales to justify that burden"124. The plurality thereby recognised that a polity asserting a justification for a burden on political communication imposed by its legislation bears the persuasive onus of establishing that justification. Given that other views have been expressed125, it is important to be clear about how that comes to be so. Whether a legislative provision infringes the implied freedom of political communication is a question of law. "Highly inconvenient as it may be", questions of law and especially questions of constitutional law "sometimes depend on facts, facts which somehow must be ascertained by the court responsible for deciding the validity of the law"126. Questions of fact of that nature cannot form issues between parties to be tried like ordinary questions of fact127. They do not lend themselves to notions of proof or of onus of proof128. A court called upon to pronounce on the validity of legislation must ascertain constitutional facts "as best it can"129. If a court cannot be satisfied of a fact the existence of which is necessary in law to provide a constitutional basis for impugned legislation, however, the court has no option but to pronounce the legislation invalid. That is the present significance of the principle in the Communist Party Case. The principle applies 124 (2015) 257 CLR 178 at 201 [24]. 125 See Coleman v Power (2004) 220 CLR 1 at 124 [329]; [2004] HCA 39; Brown v Tasmania (2017) 261 CLR 328 at 421-422 [288]; [2017] HCA 43. 126 Commonwealth Freighters Pty Ltd v Sneddon (1959) 102 CLR 280 at 292. 127 Breen v Sneddon (1961) 106 CLR 406 at 411; [1961] HCA 67; South Australia v Tanner (1989) 166 CLR 161 at 179; [1989] HCA 3; Re Day (2017) 91 ALJR 262 at 268-269 [21]; 340 ALR 368 at 374-375; [2017] HCA 2. 128 Thomas v Mowbray (2007) 233 CLR 307 at 514-522 [620]-[639]; [2007] HCA 33; Maloney v The Queen (2013) 252 CLR 168 at 298-299 [351], 299-300 [355]; [2013] HCA 28. 129 Commonwealth Freighters Pty Ltd v Sneddon (1959) 102 CLR 280 at 292. in the same way to legislation impugned on the basis of infringing a prohibition on legislative power130 as to legislation impugned on the basis of being insufficiently connected to a grant of legislative power131. Applied to the determination of whether impugned legislation infringes the implied freedom of political communication, the principle requires that a court pronounce a burden on political communication imposed by the legislation to be unjustified, unless the court is satisfied that the burden is justified. The result is as Mason CJ stated in Cunliffe v The Commonwealth132: "In the context of an implication of freedom of communication, in order to justify the imposition of some burden or restriction on that right, it is generally not enough simply to assert the existence of facts said to justify the imposition of that burden or restriction. The relevant facts must either be agreed or proved or be such that the Court is prepared to take account of them by judicial notice or otherwise." The State's justification for the burden on political communication imposed by s 29(10) of the EF Act therefore cannot succeed unless the Court can be satisfied of the existence of facts on which that justification depends. In Wilcox Mofflin Ltd v New South Wales133, in which the ultimate question was whether State legislation infringed the express guarantee of freedom of interstate trade in s 92 of the Constitution, the majority remarked that it was unfortunate that the parties had not entered into proof of matters which would have enabled it to obtain a more adequate understanding "of the real significance, effect and operation of the statutes, information of a kind that we have come to think almost indispensable to a satisfactory solution of many of the constitutional problems brought to this Court for decision". The majority added that it was "bound to say that it is not an opinion commanding much respect among the parties to issues of constitutional validity, not even those interested to support legislation, who, strange as it seems to us, usually prefer to submit such an issue in the abstract without providing any background of information in aid 130 eg, Castlemaine Tooheys Ltd v South Australia (1990) 169 CLR 436 at 477; [1990] HCA 1; Betfair Pty Ltd v Western Australia (2008) 234 CLR 418 at 479-480 [109]- [112]; [2008] HCA 11. 131 eg, Andrews v Howell (1941) 65 CLR 255 at 278; [1941] HCA 20; Stenhouse v Coleman (1944) 69 CLR 457 at 470-472; [1944] HCA 36. 132 (1994) 182 CLR 272 at 304; [1994] HCA 44. 133 (1952) 85 CLR 488 at 507; [1952] HCA 17. of the presumption of validity and to confine their cases to dialectical arguments and considerations appearing on the face of the legislation"134. The same criticism cannot be levelled at the parties in the present case. The special case which the parties have agreed and stated for the Court contains a full and succinct account of the practical operation of expenditure caps under the EFED Act and of the legislative history of the EF Act. On the critical question of the justification for the amount of the cap on the electoral expenditure of a third-party campaigner set by s 29(10) of the EF Act, however, the special case exposes a gap in the factual substratum of the justification advanced by the State. The Joint Standing Committee on Electoral Matters recognised in 2016 that there was an unanswered question of fact as to whether a $500,000 cap on electoral expenditure by third-party campaigners would allow a third-party campaigner to be reasonably able to present its case to voters. The special case contains no material which would allow that question to be answered by the Court in the affirmative. On that critical question, the State is accordingly driven to rely on such arguments of principle as are available to it on the face of the EF Act. The amount of the cap, the State argues, is a matter for legislative choice, and the amount that has been chosen, the State argues, is substantial. The principled answer to the State's arguments is that the legislative choice open to the legislature is constrained by the implied freedom of political communication and that the implied freedom constrains the choice of the amount of the cap that is open to the legislature. The choice is limited to an amount that (in the already quoted language of Mason CJ in ACTV135) restricts the ability of a third-party campaigner to engage in political communication "no more than is reasonably necessary to achieve the protection of the competing public interest which is invoked to justify the burden on communication". To be justified as no more than is reasonably necessary to achieve a level playing field for all participants in political discourse during an election period, the amount of the cap must, at the very least, leave a third-party campaigner with an ability meaningfully to compete on the playing field. The third-party campaigner must be left with a reasonable opportunity to present its case to voters. It is not self- evident, and it has not been shown, that the cap set in the amount of $500,000 leaves a third-party campaigner with a reasonable opportunity to present its case. In short, it is not possible to conclude that the $500,000 cap on the electoral expenditure of a third-party campaigner set by s 29(10) of the EF Act is 134 (1952) 85 CLR 488 at 507. 135 (1992) 177 CLR 106 at 143. justified because it is not possible to be satisfied that the cap is sufficient to allow a third-party campaigner to be reasonably able to present its case to voters. Without satisfaction that the amount of the cap is justified, the imposition of the cap in that amount stands unjustified. Nettle 103 NETTLE J. The question for decision in this special case is whether ss 29(10) and 35 of the Electoral Funding Act 2018 (NSW) impose an unjustified burden on the implied freedom of political communication. From 2011136 until it was repealed137 by the Electoral Funding Act, the Election Funding, Expenditure and Disclosures Act 1981 (NSW) ("the Previous Act") imposed a range of caps on expenditure incurred for the dominant purpose of promoting or opposing a party or candidate or influencing the voting at an election during a specified period preceding a State election138. Under that regime, the expenditure cap which applied139 to a "third-party campaigner"140 was the commencement of the capped State expenditure period (or $525,000 in any other case)141. The cap of $1,050,000 was identical to the expenditure cap which applied142 to a "party"143 endorsing candidates for election to the Legislative third-party campaigner was registered before the 136 See Election Funding and Disclosures Amendment Act 2010 (NSW), s 2. 137 Electoral Funding Act, s 157. 138 See Election Funding, Expenditure and Disclosures Act, Pt 6 and especially ss 87(4), 95F, 95H. 139 Election Funding, Expenditure and Disclosures Act, s 95F(10). 140 Defined in s 4(1) of the Election Funding, Expenditure and Disclosures Act to mean, for a State election, "an entity or other person (not being a registered party, elected member, group or candidate) who incurs electoral communication expenditure for a State election during a capped State expenditure period that exceeds $2,000 in total". 141 On 25 November 2011, the caps for the election period beginning 27 March 2011 were increased to account for inflation to $1,166,600 and $583,300 respectively: Election Funding, Expenditure and Disclosures (Adjustable Amounts) Notice (NSW), Sch 1 cl 2(8) (as made). On 19 June 2015, the caps for the election period beginning 29 March 2015 were increased to $1,288,500 and $644,300 respectively: Election Funding, Expenditure and Disclosures (Adjustable Amounts) Amendment Notice 2015 (NSW), Sch 1 [8]. 142 Election Funding, Expenditure and Disclosures Act, s 95F(4). As with the caps for third-party campaigners, the cap was increased for the election period beginning 27 March 2011 to $1,166,600 and for the election period beginning 29 March 2015 to $1,288,500: Election Funding, Expenditure and Disclosures (Adjustable Amounts) Notice, Sch 1 cl 2(2) (as made); Election Funding, Expenditure and Disclosures (Adjustable Amounts) Amendment Notice 2015, Sch 1 [2]. Nettle Council of New South Wales and candidates in up to ten electoral districts for the Legislative Assembly of New South Wales and to the expenditure cap which applied144 to a group of candidates for election to the Legislative Council who were not endorsed by any party. The expenditure cap which applied145 to a party endorsing only candidates for the Legislative Assembly or endorsing candidates for the Legislative Council and candidates in more than ten electoral districts for the Legislative Assembly was the product of $100,000 and the number of electoral districts for which the party was endorsing candidates. By contrast, under the regime imposed by the Electoral Funding Act, the expenditure cap applicable to a party is effectively unchanged at $1,288,500 (having regard to the mandatory increase in the figure under the Previous Act for inflation)146 for a party endorsing candidates for the Legislative Council and candidates in up to ten electoral districts for the Legislative Assembly147, and the product of $122,900 and the number of electoral districts for which a party is endorsing candidates in the case of a party endorsing only candidates for the Legislative Assembly or endorsing candidates for the Legislative Council and candidates in more than ten electoral districts for the Legislative Assembly148 β 143 Defined in s 4(1) of the Election Funding, Expenditure and Disclosures Act to mean "a body or organisation, incorporated or unincorporated, having as one of its objects or activities the promotion of the election to Parliament or a local council of a candidate or candidates endorsed by it or by a body or organisation of which it forms a part". 144 Election Funding, Expenditure and Disclosures Act, s 95F(5). As with the caps for third-party campaigners, the cap was increased for the election period beginning 27 March 2011 to $1,166,600 and for the election period beginning 29 March 2015 to $1,288,500: Election Funding, Expenditure and Disclosures (Adjustable Amounts) Notice, Sch 1 cl 2(3) (as made); Election Funding, Expenditure and Disclosures (Adjustable Amounts) Amendment Notice 2015, Sch 1 [3]. 145 Election Funding, Expenditure and Disclosures Act, s 95F(2), (3). For the election period beginning 27 March 2011, the cap was increased to account for inflation to $111,200, and for the election period beginning 29 March 2015, the cap was increased to $122,900: Election Funding, Expenditure and Disclosures (Adjustable Amounts) Notice, Sch 1 cl 2(1) (as made); Election Funding, Expenditure and Disclosures (Adjustable Amounts) Amendment Notice 2015, Sch 1 [1]. 146 See Election Funding, Expenditure and Disclosures Act, s 95F(14), Sch 1; see above at fnn 142, 144, 145. 147 Electoral Funding Act, s 29(4). 148 Electoral Funding Act, s 29(2), (3). Nettle whereas the expenditure cap applicable149 to third-party campaigners has been reduced by more than 50 per cent to $500,000 if the third-party campaigner was registered before the commencement of the capped State expenditure period (or $250,000 in any other case). The change in relativities between the expenditure caps applicable to parties and third-party campaigners gives effect to recommendations150 of an expert panel that, in order to maintain a level playing field, parties and candidates should be given greater expenditure caps than third-party campaigners: for the reason that only parties and candidates are directly engaged in the electoral contest, they are the only ones able to form government and be elected to represent the people of New South Wales and, as a consequence, they have greater expenditure commitments which must be spread more thinly than third- party campaigners able to concentrate on single issues. The expert panel opined151 that third-party campaigners should be free to participate in election campaigns but should not be able to drown out the voices of parties and candidates. The expert panel were concerned152, however, that while the expenditure cap for third-party campaigners should be set below the expenditure cap for parties, it should not be set so low as to deprive third-party campaigners of the capacity to have a real voice in an election campaign. With that in mind, the expert panel suggested153 the figure of $500,000, being $100,000 more than the greatest expenditure incurred by a single third-party campaigner during the three months preceding the 2011 election, but recommended that the level of third-party campaigner caps be reviewed after the 2015 election. In a report dated June 2016, the Joint Standing Committee on Electoral Matters recorded154 its agreement with the expert panel's recommendation to 149 Electoral Funding Act, s 29(10). 150 Schott, Tink and Watkins, Political Donations: Final Report, December 2014, vol 1 at 8, 109-113. 151 Schott, Tink and Watkins, Political Donations: Final Report, December 2014, vol 1 at 8, 29, 109. 152 Schott, Tink and Watkins, Political Donations: Final Report, December 2014, vol 1 at 112. 153 Schott, Tink and Watkins, Political Donations: Final Report, December 2014, vol 1 at 112-113. 154 Parliament of New South Wales, Joint Standing Committee on Electoral Matters, Inquiry into the Final Report of the Expert Panel β Political Donations and the Government's Response, June 2016 at 49 [7.20]. Nettle reduce the cap on third-party campaigner expenditure but added that before implementing the change, the Government should consider whether there was sufficient evidence that a third-party campaigner could reasonably present its case with an expenditure cap of $500,000. The scheme of the Electoral Funding Act reflected the recommendations in that report155. It is accepted that the change in relativities imposed under the Electoral Funding Act burdens the implied freedom of political communication. The issue, in the plaintiffs' submission, is whether a purpose of privileging parties relative to third-party campaigners is a legitimate purpose consistent with the system of representative and responsible government mandated by the Constitution. The plaintiffs accepted that the creation of a "level playing field"156 is a legitimate purpose. But they contended that the purpose of the change in relativities imposed under the Electoral Funding Act, far from being the creation of a level playing field, is to create an unlevel playing field by privileging parties relative to third-party campaigners. I do not accept the argument. Although an object of s 29(10) of the Electoral Funding Act third-party campaigners, it appears the Parliament's purpose in legislating to achieve that objective157 was to give better effect to the purpose of the Previous Act of to "privilege" parties relative 155 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 23 May 2018 at 64; New South Wales, Electoral Funding Bill 2018, Explanatory Note at 1. 156 See Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 175 per Deane and Toohey JJ; [1992] HCA 45; McCloy v New South Wales (2015) 257 CLR 178 at 265 [245] per Nettle J; [2015] HCA 34. 157 See and compare Levy v Victoria (1997) 189 CLR 579 at 619 per Gaudron J; [1997] HCA 31. Nettle preventing voices being drowned out by the powerful158. So much is apparent from the expert panel's report, which stated159: "The Panel strongly agrees that political parties and candidates should have a privileged position in election campaigns. Parties and candidates are directly engaged in the electoral [contest], and are the only ones able to form government and be elected to Parliament to represent the people of New South Wales. That said, we also strongly support the principle that third parties should be treated as recognised participants in the electoral process. Third parties have a right to have a voice and attempt to influence voting at elections β¦ However, third parties should not be able to drown out the voice of the political parties." (emphasis added) There is no reason to doubt that the purpose of preventing voices being drowned out is legitimate160. The question is whether the means chosen to achieve it are appropriate and adapted to the achievement of that purpose161. And 158 See and compare Electoral Funding Act, s 3; New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 28 October 2010 at 27168; New South Wales, Legislative Council, Parliamentary Debates (Hansard), 10 November 2010 at 27458; New South Wales, Legislative Council, Parliamentary Debates (Hansard), 23 May 2018 at 93, 105. See also Parliament of New South Wales, Joint Standing Committee on Electoral Matters, Inquiry into the Final Report of the Expert Panel β Political Donations and the Government's Response, June 2016 at 49 [7.20]; Parliament of New South Wales, Joint Standing Committee on Electoral Matters, Public Funding of Election Campaigns, March 2010 at 20-21 [1.101], 159 Schott, Tink and Watkins, Political Donations: Final Report, December 2014, vol 1 at 109. 160 See and compare Australian Capital Television (1992) 177 CLR 106 at 144-145 per Mason CJ, 154-156 per Brennan J, 175 per Deane and Toohey JJ, 188-189 per Dawson J, 239 per McHugh J; Unions NSW v New South Wales (2013) 252 CLR 530 at 557 [49] per French CJ, Hayne, Crennan, Kiefel and Bell JJ, 579 [138] per Keane J; [2013] HCA 58; McCloy (2015) 257 CLR 178 at 206-208 [43]-[47] per French CJ, Kiefel, Bell and Keane JJ, 248 [184] per Gageler J, 257-258 [218], 260 161 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 567-568; [1997] HCA 25; McCloy (2015) 257 CLR 178 at 193-195 [2] per French CJ, Kiefel, Bell and Keane JJ, 258 [220] per Nettle J; Brown v Tasmania (2017) 261 CLR 328 at 363-364 [104] per Kiefel CJ, Bell and Keane JJ, 375-376 [155]-[156] per Gageler J, 416 [277] per Nettle J, 478 [481] per Gordon J; [2017] HCA 43. Nettle in my view, that is best assessed by reference to the tests of whether the Electoral Funding Act is suitable, necessary, and, if so, adequate in its balance162. The Electoral Funding Act is evidently suitable for the achievement of the purpose of maintaining a level playing field, because it is rationally connected to preventing third-party campaigners drowning out parties and candidates. The plaintiffs' argument to the contrary, on the basis that the cap was not the most effective means of achieving the purpose, is misplaced. The selection of means goes to the issue of necessity. The plaintiffs contended that the Electoral Funding Act is not necessary, because there is an obvious and compelling alternative capable of achieving the purpose of levelling the playing field, with a substantially lesser burden on the implied freedom: namely, the retention of the expenditure cap for third-party campaigners which applied under the Previous Act. the Inasmuch as that contention suggests that the expenditure cap for third- party campaigners under the Previous Act set a minimum amount for allowable electoral expenditure consistent with implied freedom of political communication, I reject it. It assumes that, once the Parliament has enacted a set of provisions for the achievement of a level playing field, the Parliament is thereafter precluded from enacting further measures for the better achievement of the objective. That is not so. It is open to the Parliament to take different views from time to time according to the circumstances as they evolve or are reasonably anticipated as likely to develop in future163. Nor is the notion of the level playing field susceptible to precise quantification. Views may reasonably differ as to whether the expenditure caps imposed on third-party campaigners should be the same as or different from the caps imposed on parties and candidates. The limits are set by what is reasonable. In effect, the level playing field is comprised of a theoretically unlimited number of combinations and permutations of relativities within the range bordered by points at which the extent of disparity becomes unreasonable. And within that range, it is for the Parliament to make selections164. It is only when and if a selection lies beyond the range of reasonable selection that it is invalid. 162 Brown (2017) 261 CLR 328 at 416-417 [278]-[280] per Nettle J. 163 See McCloy (2015) 257 CLR 178 at 261-262 [233] per Nettle J. 164 Australian Capital Television (1992) 177 CLR 106 at 187-188 per Dawson J; Mulholland v Australian Electoral Commission (2004) 220 CLR 181 at 206-207 [63]-[65] per McHugh J, 236-237 [154]-[155] per Gummow and Hayne JJ; [2004] HCA 41; Rowe v Electoral Commissioner (2010) 243 CLR 1 at 121 [386] per Kiefel J; [2010] HCA 46; McCloy (2015) 257 CLR 178 at 217 [82] per French CJ, Kiefel, Bell and Keane JJ; Murphy v Electoral Commissioner (2016) 261 CLR 28 (Footnote continues on next page) Nettle In this case, the plaintiffs did not essay the task of demonstrating that the selection of relativities under the Electoral Funding Act is beyond the range of reasonable selection. They contended that it was enough to demonstrate that the cap on third-party campaigner expenditure imposed by that Act is an unjustified burden on the implied freedom that it would prevent the plaintiffs from mounting as effective a campaign as occurred in the 2015 election. I do not accept that argument either. The plaintiffs' complaint is, in effect, that any cut in expenditure relative to parties and candidates was too much and would prevent third-party campaigners from having a meaningful voice in the coming election. But logically, that cannot be so. The fact that the Electoral Funding Act prevents the same level of expenditure as was permitted under the Previous Act does not of itself take the Electoral Funding Act outside the range of reasonable measures for the achievement of the legitimate purpose of maintaining a level playing field. It is conceivable that the new cap and its relativities with the caps imposed on parties and candidates is within the range. In the alternative, the plaintiffs invoked the reasoning165 of the minority (McLachlin CJ, Major and Binnie JJ) in Harper v Canada (Attorney General): that limits on electoral expenditure must be supported by a clear and convincing demonstration of why the limits are necessary, do not go too far and enhance more than harm the democratic process. The plaintiffs contended that, in this case, there is not any, let alone clear and convincing, demonstration of why a cut in the third-party campaigner expenditure cap to half of that which applied under the Previous Act is necessary, and thus that it should be concluded that the reduction, or at least the amount of it, is an unjustified burden on the implied freedom. There is more force in those submissions. As the plurality observe166, Lange requires167 that any effective burden on the implied freedom be justified. And what is required to justify an effective burden on the implied freedom depends on the circumstances of the case. Sometimes168, perhaps often, the need at 81 [156], 86-87 [178] per Keane J, 106 [243] per Nettle J, 113-114 [262]-[264] per Gordon J; [2016] HCA 36; Brown (2017) 261 CLR 328 at 420 [286] per 165 [2004] 1 SCR 827 at 843-844 [21]. 166 See reasons of Kiefel CJ, Bell and Keane JJ at [45]. 167 (1997) 189 CLR 520 at 567-568; McCloy (2015) 257 CLR 178 at 193-195 [2] per French CJ, Kiefel, Bell and Keane JJ, 258 [220] per Nettle J. 168 See, eg, Langer v The Commonwealth (1996) 186 CLR 302 at 318 per Brennan CJ, 334 per Toohey and Gaudron JJ; [1996] HCA 43; Muldowney v South Australia (Footnote continues on next page) Nettle for a limit on electoral expenditure or other legislative measure which burdens the implied freedom may be self-evident or appear with relative clarity without the need for extensive if indeed any evidence on the point. Other times169, the need will be apparent from expert reports or commissions of inquiry which precede the enactment of the legislation. And in some circumstances, the fact that a plaintiff is unable to identify any obvious and compelling alternative productive of a significantly lesser burden on the implied freedom may be enough to conclude that the impugned law is needed. But here, although it is apparent from the expert panel's report that the panel considered it to be desirable for the achievement of a level playing field to limit the expenditure of third-party campaigners relative to parties and candidates, it is also clear that the expert panel considered it was necessary to gather evidence to establish the appropriate relativity before the change was enacted. Yet, for reasons which do not appear, that recommendation went unheeded. It is as if Parliament simply went ahead and enacted the Electoral Funding Act without pausing to consider whether a cut of as much as 50 per cent was required. In the result, it is impossible to say whether or not the differential remains within the bounds of what might reasonably be required and, for that reason, impossible for the Court to be persuaded that the extent of the cut in the third- party campaigner expenditure cap is necessary. Therefore, it has not been demonstrated that the extent of the cut is appropriate and adapted to the achievement of the legitimate purpose of maintaining a level playing field. For these reasons, I agree in the answers proposed by the plurality to the questions set out in the special case. (1996) 186 CLR 352 at 366-367 per Brennan CJ, 374-375 per Toohey J, 375-376 per Gaudron J; [1996] HCA 52; Levy (1997) 189 CLR 579 at 597-599 per Brennan CJ, 608-609 per Dawson J, 614-615 per Toohey and Gummow JJ, 619- 620 per Gaudron J, 627-628 per McHugh J, 647-648 per Kirby J. 169 See, eg, McCloy (2015) 257 CLR 178 at 208-209 [49]-[53], 211 [61] per French CJ, Kiefel, Bell and Keane JJ, 250-251 [191]-[196] per Gageler J, cf at 272- 273 [266]-[268] per Nettle J. 120 GORDON J. Unions NSW, together with five other plaintiffs, challenges the validity of two provisions of the Electoral Funding Act 2018 (NSW) ("the EF Act") which affect the extent of electoral expenditure that can be incurred by a third-party campaigner during a set period leading up to New South Wales State elections. The plaintiffs β all but one registered as a third-party campaigner under the EF Act for the March 2019 election and each asserting an intention to incur electoral expenditure in connection with New South Wales State elections β contend that s 29(10) (read with s 33(1)) of the EF Act ("the TPC Expenditure Cap") and s 35(1) of the EF Act each impermissibly burden the implied freedom of political communication. I agree that the questions reserved for the consideration of the Full Court should be answered in the terms proposed by Kiefel CJ, Bell and Keane JJ. However, I wish to set out my reasons for concluding that the TPC Expenditure Cap is invalid. I agree with the reasons of Kiefel CJ, Bell and Keane JJ for the orders made prior to the hearing refusing the applications for leave to intervene or to be heard as amicus curiae. Statutory framework and history The EF Act implements170 a number of reforms to New South Wales electoral funding legislation recommended by an independent panel of experts171 ("the Expert Panel") in December 2014 ("the Expert Panel Report") and by the Joint Standing Committee on Electoral Matters172 ("the JSCEM") in June 2016 ("the JSCEM Report"). In relation to electoral expenditure, the Expert Panel considered the March 2011 election173. The special case recorded that during the capped State expenditure period for the March 2011 election, the most that a registered third-party campaigner spent on "electoral communication expenditure" 170 See New South Wales, Electoral Funding Bill 2018, Explanatory Note at 1; New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 17 May 2018 at 1. 171 Panel of Experts, Political Donations: Final Report (2014). 172 New South Wales, Joint Standing Committee on Electoral Matters, Inquiry into the Final Report of the Expert Panel β Political Donations and the Government's Response, Report No 1/56 (2016). 173 See Panel of Experts, Political Donations: Final Report (2014), vol 1 at 105-106. (as defined under the EF Act's predecessor174) was $358,439.33. For illustrative purposes only, that amount indexed for inflation (that is, in present day terms) would be over $400,000. Indeed, all but four registered third-party campaigners spent less than $100,000 in present day terms during the capped State expenditure period for the March 2011 election. The Expert Panel Report recommended that "the cap on electoral expenditure by third-party campaigners be decreased[175] inflation" ("Recommendation 31")176. to $500,000 and adjusted annually for The Expert Panel Report was considered by the JSCEM, whose final report was delivered in June 2016. Given the passage of time, the JSCEM had before it what had occurred in the March 2015 election. The position during that election was a little different. Twelve of the 36 registered third-party campaigners incurred "electoral communication expenditure"177 greater than $100,000 in present day terms, with six (including a number of the plaintiffs in this special case) incurring expenditure that would have come close to, or exceeded, the $500,000 cap. In ch 7 of the JSCEM Report, titled "Third-party campaigners", the details of third-party expenditure during the financial year in which the March 2015 election took place (that is, not just the capped State expenditure period) were described as follows178: The NSW Electoral Commission has now published third-party campaigners' disclosures for the period 1 July 2014 to 30 June 2015. The third-party campaigners with the largest expenditure during this period are as follows: 174 See Election Funding, Expenditure and Disclosures Act 1981 (NSW), s 87. 175 The cap at the time of the Expert Panel Report was $1,050,000: see Election Funding, Expenditure and Disclosures Act 1981, s 95F(10). 176 Panel of Experts, Political Donations: Final Report (2014), vol 1 at 14; see also at 177 See Election Funding, Expenditure and Disclosures Act 1981, s 87. 178 New South Wales, Joint Standing Committee on Electoral Matters, Inquiry into the Final Report of the Expert Panel β Political Donations and the Government's Response, Report No 1/56 (2016) at 48 [7.17]-[7.18] (footnote omitted). Name of third party campaigner Total expenditure Electrical Trade[s] Union of Australia NSW Branch NSW Nurses and Midwives' Association Unions NSW NSW Business Chamber Limited NSW Minerals Council Limited [The Secretary of Unions NSW] explains that Unions NSW's spending for the 2015 election included: ... $380,000 on advertising expenditure; $264,000 on production and distribution of electoral materials; $15,000 on the internet, telecommunications, stationery and postage; $120,000 on staff costs; $8,000 on travel; and $52,000 on research." The JSCEM addressed the Expert Panel's Recommendation 31 as follows179: "Committee comment The Committee believes that third-party campaigners should be able to spend a reasonable amount of money to run their campaign. However, the Committee agrees with the Panel that this should not be to the same extent as candidates and parties. The Committee acknowledges the third-party campaigner expenditure from the 2015 State Election. 179 New South Wales, Joint Standing Committee on Electoral Matters, Inquiry into the Final Report of the Expert Panel β Political Donations and the Government's Response, Report No 1/56 (2016) at 49 [7.20]-[7.22]. The Committee supports the Panel's recommendation to reduce the cap on expenditure for third-party campaigners. The Committee is of the view that, before implementing this change, the NSW Government should consider whether there is sufficient evidence that a third-party campaigner could reasonably present its case with an expenditure cap of $500,000." (emphasis added) The JSCEM's formal recommendation ("Recommendation 7") addressed the need for the New South Wales Government to consider whether there was sufficient evidence that a third-party campaigner could reasonably present its case with an expenditure cap of $500,000 before decreasing the cap. As is self-evident, the JSCEM had a concern about the level of the cap. There is nothing in the special case to suggest that evidence directed to addressing that concern was obtained and considered, or even sought to be obtained. The EF Act was enacted with effect from 1 July 2018. Like its predecessor β the Election Funding, Expenditure and Disclosures Act 1981 (NSW) ("the EFED Act") β the EF Act creates a comprehensive scheme regulating the extent and sources of funding for elections, and requiring annual disclosure to the Electoral Commission180 of political donations, and of electoral expenditure by parties, elected members, candidates, groups and associated entities181, as well as by third-party campaigners in certain circumstances182. The express objects of the EF Act are183: to establish a fair and transparent electoral funding, expenditure and disclosure scheme, to facilitate public awareness of political donations, to help prevent corruption and undue influence in the government of the State or in local government, to provide for the effective administration of public funding of elections, recognising the importance of the appropriate use of public revenue for that purpose, 180 EF Act, s 17; see generally Div 2 of Pt 3. 181 EF Act, s 12(1), (3). 182 EF Act, s 12(2). 183 EF Act, s 3. to promote compliance by parties, elected members, candidates, groups, agents, associated entities, third-party campaigners and donors with the requirements of the electoral funding, expenditure and disclosure scheme." Division 4 of Pt 3 of the EF Act, headed "Caps on electoral expenditure for election campaigns", contains the two impugned provisions. That Division sets the upper limits of permissible expenditure on election campaigns for various categories of persons and organisations during the "capped State Two definitions, which operate as limits, lie at the core of this part of the scheme: the definitions of "electoral expenditure" and "capped State expenditure period". "Electoral expenditure" is defined exhaustively in s 7 as "expenditure for or in connection with promoting or opposing, directly or indirectly, a party or the election of a candidate or candidates or for the purpose of influencing, directly or indirectly, the voting at an election, and which is expenditure of one of the [kinds set out in s 7(1)]". Sub-sections (2) and (3) of s 7 set out a number of express exclusions from the definition of "electoral expenditure", one of which (in s 7(3)) β applicable to entities or persons other than parties, associated entities, elected members, groups or candidates β is "expenditure β¦ not incurred for the dominant purpose of promoting or opposing a party or the election of a candidate or candidates or influencing the voting at an election". Expenditure is taken to be "incurred" for the purposes of the EF Act "when the services for which the expenditure is incurred are actually provided or the goods for which the expenditure is incurred are actually delivered"185. "Capped State expenditure period" is defined in s 27 by reference to two distinct time periods during which the applicable caps on electoral expenditure apply: in the case of a general election to be held following the expiry of the Assembly by the effluxion of time β the period from and including 1 October in the year before which the election is to be held to the end of the election day for the election, in any other case β the period from and including the day of the issue of the writ or writs for the election to the end of the election day for the election." 184 See EF Act, s 27. 185 EF Act, s 34(1). Section 29 sets out the caps on electoral expenditure for State election campaigns. The caps applicable to third-party campaigners186 are in s 29(10) and (11). Section 29(10) provides: "For a State general election, the applicable cap for a third-party campaigner is: $500,000 if the third-party campaigner was registered under [the EF Act] before the commencement of the capped State expenditure period for the election, or $250,000 in any other case." Section 29(12) provides that the applicable cap for parties and third-party campaigners is subject to an additional cap (within the overall applicable cap) for electoral expenditure incurred substantially for the purposes of the election in a particular electoral district: in respect of each such electoral district, $61,500 in the case of a party and $24,700 in the case of a third-party campaigner. Each cap is to be adjusted for inflation187. Section 33(1) then prohibits parties, groups, candidates, third-party campaigners and associated entities from incurring expenditure that exceeds the applicable cap during the capped State expenditure period. The TPC Expenditure Cap arises from s 29(10) read with s 33(1). The TPC Expenditure Cap is invalid The implied freedom of political communication has been recently explained188. It cannot be understood as being "confined to communications between elected representatives and candidates for election on the one hand and the electorate on the other"189. That is because the "efficacy of representative 186 "Third-party campaigner" is defined, relevantly, in s 4 of the EF Act as: "(a) for a State election β a person or another entity (not being an associated entity, party, elected member, group or candidate) who incurs electoral expenditure for a State election during a capped State expenditure period that exceeds $2,000 in total, β¦ (c) a registered third-party campaigner for an election for which it is registered". 187 EF Act, s 29(14). 188 Brown v Tasmania (2017) 261 CLR 328 at 430 [312]-[313]; [2017] HCA 43. 189 Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 139; [1992] HCA 45, cited in Unions NSW v New South Wales ("Unions No 1") (2013) 252 CLR 530 at 551 [28]; [2013] HCA 58. government depends β¦ upon free communication β¦ between all persons, groups and other bodies in the community"190. Put another way, third-party campaigners have a legitimate interest in governmental action and the direction of policy191. New South Wales concedes that the TPC Expenditure Cap burdens the implied freedom. The validity of the TPC Expenditure Cap therefore turns on whether that burden can be justified. The level of justification required will depend on the nature and extent of the burden that the TPC Expenditure Cap imposes192. The TPC Expenditure Cap's burden on the implied freedom is direct. It effects a restriction on third-party campaigners' "electoral expenditure", thereby limiting the funds that a third-party campaigner may permissibly spend on goods and services such as advertisements193, production and distribution of election material194, internet, telecommunications and postage195, and staffing196. It sets the amount of $500,000 (an adjustable amount that is indexed for inflation197) as the upper limit for such expenditure. That limitation, in turn, directly affects the ability of third-party campaigners to engage in political communication. The restriction applies during a set period β the capped State expenditure period β which runs either from 1 October in the year before an election is to be held to the end of the election day (following the "expiry of the Assembly by the effluxion of time")198 or from the day of the issue of the writ for the election to the end of the election day (in any other case)199. Under the 190 ACTV (1992) 177 CLR 106 at 139, cited in Unions No 1 (2013) 252 CLR 530 at 191 Unions No 1 (2013) 252 CLR 530 at 551 [30]. 192 Brown (2017) 261 CLR 328 at 367 [118], 369 [128], 378-379 [164]-[165], 193 EF Act, s 7(1)(a). 194 EF Act, s 7(1)(b). 195 EF Act, s 7(1)(c). 196 EF Act, s 7(1)(d). 197 EF Act, s 29(14). 198 EF Act, s 27(a). 199 EF Act, s 27(b). third-party campaigners are entitled EF Act, to spend $500,000 on communications that promote or oppose, directly or indirectly, a party or the election of a candidate or are for the purpose of influencing, directly or indirectly, the voting at an election200 during the capped State expenditure period. Of course, they are free to communicate about those matters outside of the capped State expenditure period, without restriction under the EF Act, and are free to communicate about governmental or political matters that fall outside the election campaign. The plaintiffs' complaint is not about the existence of the cap or about the fact that there is a difference between the limits imposed by the various caps201. The imposition of expenditure caps is not new. And differentiation between the caps for the various participants in the electoral process is not new. Rather, the plaintiffs' complaint is directed to the reduction in the cap (from that which existed under the EFED Act) and the relative difference between the caps imposed on third-party campaigners and on political parties. In the EF Act, the statutory purpose of protecting the integrity of the political process is made express by the Act's stated objects. As has been seen, those objects are stated to include establishing a "fair and transparent electoral funding, expenditure and disclosure scheme"202 and helping prevent corruption and undue influence203. The TPC Expenditure Cap is said to advance those objects. Indeed, the idea of fairness was central to the independent inquiries, reports and debates that led to the substantial amendments to electoral funding regulation by the enactment of the EF Act. As the Second Reading Speech for the Electoral Funding Bill 2018 (NSW) ("the EF Bill") records, the Expert Panel Report considered that third-party campaigners "should have sufficient scope to run campaigns to influence voting at an election β just not to the same extent as parties or candidates"204 and that the cap would "allow third party campaigners to 200 See the definition of "electoral expenditure" in s 7 of the EF Act. 201 See generally EF Act, s 29. 202 EF Act, s 3(a). 203 EF Act, s 3(c). 204 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 17 May 2018 at 4. reasonably present their case while ensuring that the caps are in proportion to those of parties and candidates who directly contest elections"205. In reply during the second reading debate, the Special Minister of State responded to concerns raised about the $500,000 cap by noting that it was a specific recommendation of the Expert Panel, who had examined the amount of the cap closely and considered that third-party campaigners should not be able to "drown out the voices of parties and candidates who are the direct electoral contestants"206. That is true. The Expert Panel Report did state that the $500,000 cap was recommended in order to "guard against" third parties dominating election campaigns207. But only part of that recommendation was subsequently supported by the JSCEM. The reduction in the cap was approved subject to the New South Wales Government considering "whether there [was] sufficient evidence that a third-party campaigner could reasonably present its case with an expenditure cap of $500,000"208. And, as noted earlier, there is nothing before the Court to suggest that the New South Wales Government subsequently obtained any evidence addressing third-party expenditure, let alone evidence sufficient to establish that "a third-party campaigner could reasonably present its case with an expenditure cap of $500,000". Thus, to adopt and adapt the reasoning of Mason CJ in Australian Capital Television Pty Ltd v The Commonwealth ("ACTV"), even if it is assumed: that the purpose of the TPC Expenditure Cap is to advance one or more of the objects of the legislation set out in the objects clause; that giving a "privileged position"209 to candidates for election is a purpose consistent with the system of representative and responsible government to which ss 7 and 24 of the Constitution give effect; and that "[t]he enhancement of the political process and 205 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 17 May 2018 at 4. 206 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 23 May 2018 at 62. 207 Panel of Experts, Political Donations: Final Report (2014), vol 1 at 105, cited in New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 23 May 2018 at 63. 208 New South Wales, Joint Standing Committee on Electoral Matters, Inquiry into the Final Report of the Expert Panel β Political Donations and the Government's Response, Report No 1/56 (2016) at 49 [7.22]. 209 See Panel of Experts, Political Donations: Final Report (2014), vol 1 at 109. the integrity of that process are by no means opposing or conflicting interests"210, the Court should, nonetheless, "scrutinize very carefully [the] claim that freedom of communication must be restricted in order to protect the integrity of the political process"211. As Mason CJ explained, "[e]xperience has demonstrated on so many occasions in the past that, although freedom of communication may have some detrimental consequences for society, the manifest benefits it brings to an open society generally outweigh the detriments" and "[a]ll too often attempts to restrict the freedom in the name of some imagined necessity have tended to stifle public discussion and criticism of government"212. Thus, his Honour considered that "[t]he Court should be astute not to accept at face value claims by the legislature and the Executive that freedom of communication will, unless curtailed, bring about corruption and distortion of the political process"213. Just as in ACTV, the Court must, here, be astute not to accept at face value the assertion that freedom of communication will, unless curtailed by a reduction in the cap to $500,000, bring about corruption and distortion of the political process. Here, the need to be astute is heightened by the fact that it is not possible to accept at face value the claims by the legislature and the executive. Given Recommendation 7 of the JSCEM and the content of the special case, it is not clear on what basis (if any) the Special Minister of State was able to observe during the second reading debate for the EF Bill that the $500,000 cap "strikes the right balance"214. It may be accepted that the burden is limited to a particular time period, is limited to particular kinds of political communication, and amounts to a restriction on, rather than exclusion of, third-party campaigners with respect to electoral expenditure required for political communication. However, even if the TPC Expenditure Cap is rationally connected to the legitimate purposes it seeks to serve, the Court is unable to assess whether the burden is justified and is not 210 ACTV (1992) 177 CLR 106 at 145. 211 ACTV (1992) 177 CLR 106 at 145; see also at 144. 212 ACTV (1992) 177 CLR 106 at 145. 213 ACTV (1992) 177 CLR 106 at 145. 214 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 23 May 2018 at 63. "undue"215. That is, the Court cannot answer, one way or another, the final aspect of the Lange questions216: it cannot be satisfied that the level of the expenditure cap is reasonably appropriate and adapted to achieve the asserted constitutionally permissible end. That conclusion proceeds on the premise that it is New South Wales that must demonstrate that the burden on the implied freedom is justified. While issues relating to onus have been the subject of competing views of members of this Court217, it must now be accepted that once it has been demonstrated that a legislative provision burdens the implied freedom, it is for the supporter218 of the legislation to persuade the Court that the burden is justified β including, where necessary, by ensuring sufficient evidence is put on to support its case. third-party campaigners' electoral expenditure; Here, that task fell to New South Wales. New South Wales did not fulfil that task. Even if the Court accepts that it is open for the legislature to impose some cap on that some differentiation between the caps for third-party campaigners, on the one hand, and parties and candidates, on the other, is permissible; and that it is not for this Court to descend into an examination of whether some other figure for the cap should have been selected by the legislature, it is apparent on the face of the record that the JSCEM itself did not, because it could not, determine whether $500,000 was the right level of reduction β with the result that the JSCEM expressed its support for a reduction in the cap without specifying the figure to 215 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 569, 575; [1997] HCA 25. 216 Lange (1997) 189 CLR 520 at 561, 567, as modified by Coleman v Power (2004) 220 CLR 1 at 50 [93], 51 [95]-[96]; [2004] HCA 39. cf McCloy v New South Wales (2015) 257 CLR 178 at 193-195 [2]; [2015] HCA 34, as modified by Brown (2017) 261 CLR 328 at 363-364 [104]; see also at 398 [236], 413 [271], 217 See and compare Cunliffe v The Commonwealth (1994) 182 CLR 272 at 304-305 per Mason CJ; [1994] HCA 44; Levy v Victoria (1997) 189 CLR 579 at 598-599 per Brennan CJ; [1997] HCA 31; Coleman v Power (2004) 220 CLR 1 at 124 [329] per Heydon J; APLA Ltd v Legal Services Commissioner (NSW) (2005) 224 CLR 322 at 362 [69] per McHugh J; [2005] HCA 44; McCloy (2015) 257 CLR 178 at 201 [24] per French CJ, Kiefel, Bell and Keane JJ; Brown (2017) 261 CLR 328 at 370 [131] per Kiefel CJ, Bell and Keane JJ; cf at 421-422 [288] per Nettle J. See generally Rowe v Electoral Commissioner (2010) 243 CLR 1 at 38-39 [78] per French CJ, 120-121 [384] per Crennan J; [2010] HCA 46. 218 McCloy (2015) 257 CLR 178 at 201 [24]; Brown (2017) 261 CLR 328 at which the cap should be reduced219. Given the recommendation of the JSCEM Report, it is not apparent how the legislature could assert that the TPC Expenditure Cap "allows a third-party campaigner to reasonably present its case and have a genuine voice in the debate" or serves to "guard against" third-party campaigners dominating election campaigns220. That s 29(10) responds to concerns identified by the Expert Panel about the risk of third-party campaigners drowning out the voices of those at the core of the electoral process is not in doubt. It is the size of the reduction in the cap that is, and remains, in issue and not justified. That the "balancing of the protection of other interests against the freedom to discuss governments and political matters is, under our Constitution, a matter for the Parliament to determine and for the Courts to supervise"221 is also not in doubt. But, here, the concern of the JSCEM as to whether there is sufficient evidence that a third-party campaigner could reasonably present its case with an expenditure cap of $500,000 was, and remains, unanswered. Given that unaddressed concern, the Court cannot be satisfied that the burden of the TPC Expenditure Cap on the implied freedom is justified. The burden is therefore impermissible, and the TPC Expenditure Cap invalid. As will be observed, the reasons given for reaching those conclusions assume, in favour of New South Wales, that the provisions have purposes consistent with the system of representative and responsible government to which ss 7 and 24 of the Constitution give effect. It is not necessary in this case to consider whether those assumptions are right. It is therefore neither necessary nor desirable to offer any view about either how the relevant purposes can or should be identified or what are to be treated as the relevant elements of the system of representative and responsible government. Both may be very large issues. And, at least in respect of the system of government, that issue would require consideration of whether the system has essential elements beyond those identified in ss 7 and 24 of the Constitution. Indeed, it may be observed that the role of political parties in the Australian political system may have changed since Federation and may continue to change. 219 See New South Wales, Joint Standing Committee on Electoral Matters, Inquiry into the Final Report of the Expert Panel β Political Donations and the Government's Response, Report No 1/56 (2016) at 49 [7.20]-[7.22] and Recommendation 7. 220 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 23 May 2018 at 63. 221 Nationwide News Pty Ltd v Wills (1992) 177 CLR 1 at 50; [1992] HCA 46, quoted in Brown (2017) 261 CLR 328 at 467 [436]. See also Mulholland v Australian Electoral Commission (2004) 220 CLR 181 at 197 [32]; [2004] HCA 41; McCloy (2015) 257 CLR 178 at 229-230 [122]-[123]. Edelman Introduction Absolute freedom for the pike is death for the minnow222. The text and structural design of the Constitution of the Commonwealth of Australia requires a qualified, not an absolute, freedom of political communication. The qualification is that legislative purposes can be pursued even if they burden the freedom of political communication provided that the purposes are legitimate and that the burden is justified. The first limb of that proviso exists because the constitutional freedom of political communication would be stultified by a law that burdens the freedom with the purpose of doing so. The special case and the detail of the parties to it are set out in the joint judgment. The question at the heart of this case is whether it is legitimate for legislation to have a purpose to ensure a greater freedom of political communication of one group, namely candidates and political parties, over another, namely third-party campaigners. The plaintiffs submit that such a purpose is illegitimate. The defendant submits that such a purpose is legitimate and contemplated by ss 7 and 24 of the Constitution. for third-party expenditure" communication Until mid-2018, the Election Funding, Expenditure and Disclosures Act 1981 (NSW) as amended in 2011223 ("the Previous Act") fixed caps on State "electoral campaigners. Section 95F(10) capped third-party campaigner expenditure at $1,050,000 if the third-party campaigner was registered before the commencement of the capped State expenditure period, or $525,000 if not. That Act did so for purposes including: (i) the reduction of the possibility for, or the perception of, corruption; (ii) ensuring equality of opportunity for participation in the political process; and (iii) avoiding the "drowning out" by third parties of the voices of candidates and parties campaigning for election. Those purposes might arguably have justified a much lower cap on expenditure by registered third-party campaigners of $500,000. Indeed, in the election that followed a few months after the amendments took effect, the largest amount of electoral communication expenditure by a third-party campaigner was $358,000, although this was for a truncated capped State expenditure period. On 30 May 2018, the Electoral Funding Act 2018 (NSW) was enacted, It commenced operation on 1 July 2018. the Previous Act. replacing 222 Berlin, "Two Concepts of Liberty", in Hardy and Hausheer (eds), The Proper Study of Mankind: An Anthology of Essays (1998) 191 at 196, quoting Tawney, Equality, 3rd ed (1938) at 208. 223 Election Funding and Disclosures Amendment Act 2010 (NSW), Sch 1. Edelman The Electoral Funding Act increased the electoral expenditure cap for political parties and candidates. But, in s 29(10), it reduced the cap for third-party campaigners by more than half. The general purposes for the caps remained the same as in the Previous Act. Those general, abstract purposes could easily have been seen as exhausting the purposes of s 29(10) if the Previous Act had never existed. They could also have been seen as the purpose for the reduction in the third-party campaigner cap from the Previous Act if there were any rational link between them and a reduction in the cap. But no such link was asserted in any contextual material. None was a matter of submission. Without any additional purpose the significant change effected by s 29(10) is purposeless or random. An identification of legislative purpose proceeds on the basis that the legislature is a body that acts rationally and not without any rhyme or reason. Here, an additional purpose that explains the reduction in the third-party campaigner cap is revealed by the terms, the context, and the legislative history of s 29(10) and was, unsurprisingly, common ground. The additional purpose, as described by the 2014 Expert Panel Report224, was that "political parties and candidates should have a privileged position in election campaigns" because they are "directly engaged in the electoral [contest], and are the only ones able to form government and be elected to Parliament"225. In other words, the additional purpose was to ensure that the voice of third-party campaigners was quieter than that of political parties and candidates. This additional purpose is also reflected in s 35 of the Electoral Funding Act, which prevents only third-party campaigners from acting in concert with others to incur electoral expenditure that exceeds the third-party campaigner's cap. There is no similar restriction for candidates or political parties, or even closely associated political parties. The additional purpose that motivated the introduction of ss 29(10) and 35 of the Electoral Funding Act was to burden the freedom of political communication of third-party campaigners. Such a purpose is incompatible with the maintenance of the constitutionally prescribed system of representative and responsible government. That additional purpose means that both provisions are invalid. It is, therefore, neither necessary nor appropriate to consider whether the lower cap and the "acting in concert" offence could have been justified by other, legitimate, purposes. The three stages of assessing the implied freedom The implied freedom of political communication is not absolute. It exists within a Constitution that is based upon, and respects, the existence of laws 224 Panel of Experts, Political Donations: Final Report (2014). 225 Panel of Experts, Political Donations: Final Report (2014), vol 1 at 109. Edelman affecting a multitude of different rights, privileges, powers, and immunities. Laws that have the purpose of enhancing or burdening some other interest are not invalid merely because they have the effect of burdening the freedom of political communication. The three questions set out in the joint judgment in Brown v Tasmania226 provide a clear and principled way of approaching the issue of whether a law is invalid as contrary to the implied freedom of political communication. Each question must be considered before the next. As to the first question, since the fundamental basis for the implied freedom is to prevent illegitimate burdens on the freedom of political communication, a precondition to the operation of the implied freedom as a constraint on legislative power is that the law must burden the freedom of political communication. That is why the first question to be asked is whether the law, "in its terms, operation or effect" β or, put another way, "in its legal or practical operation" β burdens the freedom of political communication227. This question is not concerned with the extent of the burden228. The point of asking the first question is to ensure that the implication is not applied beyond the circumstances required by its textual and structural foundations in the Constitution. Hence, since the constitutional implication is of a freedom from unjustified legislative burdens on political communication there cannot be a burden is affected but political communication is not229. The meaning of "political", in determining whether a communication is a political communication, is informed by communications if some communication 226 (2017) 261 CLR 328 at 359 [88], 364 [104]; [2017] HCA 43. See also at 375-376 227 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 567; [1997] HCA 25; Unions NSW v New South Wales (2013) 252 CLR 530 at 553 [35], 573 [115]; [2013] HCA 58; McCloy v New South Wales (2015) 257 CLR 178 at 201 [24], 230-231 [126]-[127], 258 [220], 280 [306]; [2015] HCA 34; Brown v Tasmania (2017) 261 CLR 328 at 359 [88], 376 [156], 398 [237], 431 [316]. 228 Monis v The Queen (2013) 249 CLR 92 at 145 [118]-[120], 212-213 [343]; [2013] HCA 4; Unions NSW v New South Wales (2013) 252 CLR 530 at 555 [40]; Tajjour v New South Wales (2014) 254 CLR 508 at 548 [33], 558 [61], 569-570 [106]- [107], 578 [145]; [2014] HCA 35; McCloy v New South Wales (2015) 257 CLR 178 at 218 [83]; Brown v Tasmania (2017) 261 CLR 328 at 360 [90], 382-383 229 Theophanous v Herald & Weekly Times Ltd (1994) 182 CLR 104 at 124-125; [1994] HCA 46; APLA Ltd v Legal Services Commissioner (NSW) (2005) 224 CLR 322 at 351 [28], 362 [70]-[71], 404 [220], 449 [376], 481 [459]-[460]; [2005] HCA 44; Tajjour v New South Wales (2014) 254 CLR 508 at 605 [238]-[241]. Edelman necessary for the effective operation of the system of representative and responsible government230. It must also be a lawful political communication. There can be no burden upon the freedom of political communication by a law that prohibits acts that are independently unlawful231. It is common ground, and rightly so, that ss 29(10) and 35 of the Electoral Funding Act place a burden upon the freedom of political communication. The second question only arises if there is a burden upon the freedom of political communication232. The second question asks: "is the purpose of the law legitimate, in the sense that it is compatible with the maintenance of the constitutionally prescribed responsible government?"233 The second question exists because a law cannot, compatibly with the constitutional freedom, have a purpose to impose a burden upon the freedom that the Constitution protects. The second question does not involve assessing the appropriateness of the law including the extent to which its effect is to burden the freedom. That is the province of the third question. representative system of and The third question can only arise once a legitimate purpose has been identified. It has been expressed in terms that ask: "is the law reasonably appropriate and adapted to advance that legitimate object in a manner that is compatible with the maintenance of the constitutionally prescribed system of representative and responsible government?"234 The third question is concerned with whether the effect of the law in burdening the freedom is justified by its 230 Theophanous v Herald & Weekly Times Ltd (1994) 182 CLR 104 at 124-125; APLA Ltd v Legal Services Commissioner (NSW) (2005) 224 CLR 322 at 350-351 231 Levy v Victoria (1997) 189 CLR 579 at 622, 625-626; [1997] HCA 31; Mulholland v Australian Electoral Commission (2004) 220 CLR 181 at 223-224 [107]-[108], 246 [184], 247 [186]-[187], 298 [337], 303-304 [354]; [2004] HCA 41; Brown v Tasmania (2017) 261 CLR 328 at 502-506 [557]-[563]. 232 See Mulholland v Australian Electoral Commission (2004) 220 CLR 181 at 218 [90], 225 [112], 249 [192]; APLA Ltd v Legal Services Commissioner (NSW) (2005) 224 CLR 322 at 359 [59], 404 [220]; McCloy v New South Wales (2015) 257 CLR 178 at 231 [127]-[128]; Brown v Tasmania (2017) 261 CLR 328 at 506- 233 Brown v Tasmania (2017) 261 CLR 328 at 364 [104]; see also at 376 [156], 416 234 Brown v Tasmania (2017) 261 CLR 328 at 364 [104]; see also at 376 [156], 416 Edelman legitimate purpose or purposes. Because the third question is dependent upon the legitimate purposes, the third question should not be answered without first identifying the legitimate purposes served by the law235. And the question of what legislative purposes the law serves "cannot be answered simply by [reliance upon] what may appear to have been legislative purpose"236 or what one or more parties assert to be the legislative purposes. For the reasons below, this special case should be resolved at the stage of the second question. The third question therefore does not arise. The second question: legitimate purpose The nature of legislative purpose The statutory purpose, or purposes β since a legislature might have multiple purposes237 β are the intended aims of the legislature. In some circumstances, such as this case, the identification of legislative purposes may prove elusive and divisive238. It is necessary to explain what is involved in the search for legislative purpose. A search for the purposes or intended aims of the legislature involves a construct used to determine the meaning of the words used by that legislature. It is not a search for subjectively held purposes of any or all of the members of the Parliament that passed the law. Rather, it is a construct that accords with our conventions for understanding language, which are the techniques by which we understand words239. The same language techniques require a concurrent consideration of the meaning of words used in their context together with the 235 Wotton v Queensland (2012) 246 CLR 1 at 31 [81], 32 [83]; [2012] HCA 2; Monis v The Queen (2013) 249 CLR 92 at 140 [98]; Unions NSW v New South Wales (2013) 252 CLR 530 at 556 [46], 560 [60], 561 [64]; McCloy v New South Wales (2015) 257 CLR 178 at 203 [31], 212-213 [67], 231 [130]. 236 Rowe v Electoral Commissioner (2010) 243 CLR 1 at 61 [166]; [2010] HCA 46; Monis v The Queen (2013) 249 CLR 92 at 147 [125]. 237 See McCloy v New South Wales (2015) 257 CLR 178 at 203-204 [33]-[34]. 238 See, and cf, Coleman v Power (2004) 220 CLR 1 at 32 [32], 53 [102], 54 [104], 78 [198], 98-99 [256], 112 [297], 121-122 [323]-[324]; [2004] HCA 39; Monis v The Queen (2013) 249 CLR 92 at 133-134 [73]-[74], 139-140 [97], 161-163 [175]- 239 See Hoffmann, "Language and Lawyers" (2018) 134 Law Quarterly Review 553 at Edelman purpose for which the words are used, in the sense of their intended aim. Hence, purpose must be identified by the same context, and hence the same extrinsic materials, that elucidate the meaning of the words240. Consistently with the concept of intention in law and language generally241, an intended purpose of a law is different from its foreseeable consequences or effects242. A useful example of the distinction can be seen in a law that places caps on political donations for the purpose of reducing corruption but with the foreseeable effect or consequence of restricting the funds available to political parties and candidates to meet the costs of political communication243. The intended aim of legislation exists at a higher level of generality than the meaning of its words244. The meaning of a provision in its context is informed, at a higher level of generality, by the goal or "mischief"245 to which the law is directed. Identifying that goal, or intended aim, relies upon the same ordinary processes of interpretation, including considering the meanings of statutory words in the provision246, meanings of other provisions in the statute, the historical background to the provision, and any apparent social objective247. 240 Here, the Interpretation Act 1987 (NSW), s 34. 241 SZTAL v Minister for Immigration and Border Protection (2017) 91 ALJR 936 at 943 [27], 955-957 [96]-[101]; 347 ALR 405 at 412-413, 430-432; [2017] HCA 34. 242 McCloy v New South Wales (2015) 257 CLR 178 at 205 [40]; Brown v Tasmania (2017) 261 CLR 328 at 362 [99], 392 [209], 432-433 [322]. 243 Unions NSW v New South Wales (2013) 252 CLR 530 at 555 [41]; McCloy v New South Wales (2015) 257 CLR 178 at 203 [33], 205 [40]. 244 Brown v Tasmania (2017) 261 CLR 328 at 391-392 [208]. 245 APLA Ltd v Legal Services Commissioner (NSW) (2005) 224 CLR 322 at 394 [178]; McCloy v New South Wales (2015) 257 CLR 178 at 232 [132]; Brown v Tasmania (2017) 261 CLR 328 at 363 [101], 391-392 [208]-[209], 432 [321]. See also Jemena Asset Management (3) Pty Ltd v Coinvest Ltd (2011) 244 CLR 508 at 528 [56]; [2011] HCA 33. 246 Monis v The Queen (2013) 249 CLR 92 at 147 [125]; Unions NSW v New South Wales (2013) 252 CLR 530 at 557 [50]; McCloy v New South Wales (2015) 257 CLR 178 at 212 [67]; Brown v Tasmania (2017) 261 CLR 328 at 362 [96]. 247 Monis v The Queen (2013) 249 CLR 92 at 205 [317]. See also Unions NSW v New South Wales (2013) 252 CLR 530 at 557 [50]; Brown v Tasmania (2017) 261 CLR 328 at 432 [321]. Edelman In circumstances where a statute expressly sets out its own objects or purposes, that express statement will almost always be relevant to identifying the objects and purposes of a particular provision. But a court should not blindly accept that the high-level, abstract purposes of the whole Act must be the exhaustive statement of the purposes of a single provision. A generally stated objects clause that applies to the entirety of a statute will, usually of necessity, be stated at a high level of generality that might not touch upon, or might barely touch upon, some provisions. Nor should a court recognise any presumption or strong inference that objects expressly stated are the exclusive, constitutionally valid purposes of every provision, characterised at the appropriate level of generality. The characterisation of the purpose of a provision at the appropriate level of generality, and the adjudication of its legitimacy, are matters for the courts248. Determining when a legislative purpose is legitimate required by The concern of the second question is whether a law, in imposing a burden, has that imposition as one of its purposes. If so, it will be illegitimate. The second question is not concerned with identifying a "reason" why an object or purpose is legitimate249. A purpose will always be illegitimate in the "rare"250 circumstance where it has an aim to impair the freedom of political communication responsible government. Since the implied freedom of political communication is a necessary incident of the system of representative and responsible government required by the Constitution, legislation that has an aim, namely a purpose, to burden that freedom could never be compatible with the constitutionally prescribed system of government, which requires the existence of that freedom. If it is no purpose of the law to burden the freedom then for the assessment of infringement of that implied freedom it will be necessary to ask the third question, namely whether the effect of the law, in imposing the burden, is justified by its purpose. representative and There are some cases where it has been said that the law imposes a burden upon the freedom of political communication but no legislative purpose can be identified separately from the effect of the law. In other words, the law's "purpose is properly described as the prevention of the conduct which it prohibits"251. In such cases, it has been said that the second question and third 248 Australian Communist Party v The Commonwealth (1951) 83 CLR 1; [1951] HCA 249 cf Monis v The Queen (2013) 249 CLR 92 at 164 [185]. 250 Monis v The Queen (2013) 249 CLR 92 at 194 [281]. 251 Monis v The Queen (2013) 249 CLR 92 at 133 [73]. See also Unions NSW v New South Wales (2013) 252 CLR 530 at 557-558 [51]-[52]. Edelman question "collapse into one"252. It is unnecessary in this case to consider whether, or when, the effects of the law, including burdening of political communication, will be treated as its purposes. A purpose is illegitimate as part of the assessment of consistency with the implied freedom of political communication only where the purpose is to impair the freedom of political communication. Such a conclusion of illegitimacy is not a matter of discretion or of giving latitude to Parliament. It is true that, as the Attorney-General of the Commonwealth submitted, the Constitution leaves significant room for legislative choice in the design of an electoral system. Parliament has a wide range of choices over matters such as the type of electoral system and manner of voting, the size of any electoral districts, and whether voting is compulsory. However, the broad range of legislative choice exists only for laws that comply with the "bare foundations"253 of the electoral system required by the Constitution. The Constitution requires laws to comply with those bare foundations. The foundations expressly include the electors' direct choice254, and therefore their freedom to choose. Hence, laws requiring voting to be compulsory255, or requiring full preferential voting256, will be valid only so long as they "preserve[] freedom of choice of possible candidates". The foundations also impliedly include the electors' freedom to receive information on and to comment upon political matters257. As Gummow J said in McGinty v Western Australia258: "It is hardly to be expected that the Constitution was framed so as to present an impermanent or incomplete statement of the incidents of responsible government on the footing that the Parliament which would 252 Monis v The Queen (2013) 249 CLR 92 at 133-134 [73]-[74]. 253 McGinty v Western Australia (1996) 186 CLR 140 at 283; [1996] HCA 48; Rowe v Electoral Commissioner (2010) 243 CLR 1 at 121 [386], quoting Reid and Forrest, Australia's Commonwealth Parliament 1901-1988 (1989) at 86. See also Mulholland v Australian Electoral Commission (2004) 220 CLR 181 at 188 [6], 254 Constitution, ss 7, 24. 255 Judd v McKeon (1926) 38 CLR 380 at 385; [1926] HCA 33. 256 Langer v The Commonwealth (1996) 186 CLR 302 at 315-316; [1996] HCA 43. 257 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 560-561. 258 (1996) 186 CLR 140 at 286. See also McCloy v New South Wales (2015) 257 CLR Edelman make changes and remedy deficiencies perceived from time to time would be composed other than by the representatives of electors who had been free of legislative impediment in informing themselves and in receiving information and comment upon matters of political interest." An example of a purpose that is illegitimate, in the context of inconsistency with electors' express freedom to choose rather than the implied freedom of political communication, can be seen in the dissenting decision of Dawson J in Langer v The Commonwealth259. In that case, one issue was whether s 329A of the Commonwealth Electoral Act 1918 (Cth) was invalid. Dawson J concluded that s 329A was not within the ambit of Commonwealth legislative power. His Honour held that the purpose of s 329A was to prevent voters from becoming aware of the existence of their right to engage in optional preferential voting260. In other words, s 329A had the "intended effect of keeping from voters an alternative method of casting a formal vote which they are entitled to choose"261. Although this characterisation of the purpose of the law was a dissenting view, its acceptance inevitably led to the conclusion that the law was invalid. A law cannot validly have the purpose of undermining the requirement for choice by the people that is expressly required by the Constitution. The same must be true of a law that has a purpose of undermining the implied freedom of electors to engage in political communication. A law with the purpose of silencing or preferring political communication is illegitimate law As I have explained, an implied freedom of political communication cannot co-exist with a the freedom of political communication with a purpose of doing so. But a law will only have a purpose of burdening the freedom of political communication if that is one of its intended aims. That proscribed purpose will not exist simply because the law is with respect to, or even directed at, political communications as a means to achieve some other purpose262. that undermines Nor will a law that has the effect of burdening the freedom of political communication necessarily have that as its purpose even if the effect of 259 (1996) 186 CLR 302. 260 (1996) 186 CLR 302 at 323. 261 (1996) 186 CLR 302 at 326. 262 Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 143, 169, 234-235; [1992] HCA 45; Levy v Victoria (1997) 189 CLR 579 at 618- Edelman burdening the freedom is a necessary step towards or consequence of some other purpose. For instance, a law might aim to increase the overall communicated content of political communication to electors by "silenc[ing] the voices of some in order to hear the voices of the others"263. On a Rawlsian, egalitarian model264, the purpose of increasing communicated content is not a purpose that aims to undermine political communication. Indeed, it is consistent with, and reinforces, political communication with the electorate: it "enables voters to be better informed; no one voice is overwhelmed by another"265. Even though the effect of such a law would be to burden the freedom of political communication for some, the purpose of the law is consistent with the "great underlying principle" of the Constitution that the rights of individuals are "sufficiently secured by ensuring as far as possible to each a share, and an equal share, in political power"266. The purpose of the law would be compatible with the system of representative and responsible government provided for in the Constitution267. There is, however, an essential distinction between a law that has the effect of "different treatment" by the quietening or silencing of some, even an effect that is a necessary step to achieving a legitimate purpose, and a law that has a purpose of the same different treatment by the quietening or silencing of some. Many laws have a justified effect of burdening the freedom of political communication but this does not mean that further analysis is needed before concluding that a law that has the purpose of burdening the freedom is 263 Fiss, The Irony of Free Speech (1996) at 4. (Attorney General) [2004] 1 SCR 827 at 868 [62]. See Harper v Canada 264 Feasby, "Libman v Quebec (AG) and the Administration of the Process of Democracy under the Charter: The Emerging Egalitarian Model" (1999) 44 McGill Law Journal 5; Pasquale, "Reclaiming Egalitarianism in the Political Theory of Campaign Finance Reform" [2008] University of Illinois Law Review 265 Harper v Canada (Attorney General) [2004] 1 SCR 827 at 868 [62]. See also R (Animal Defenders International) v Secretary of State for Culture, Media and Sport [2008] AC 1312 at 1346 [28]. 266 Harrison Moore, The Constitution of the Commonwealth of Australia, 2nd ed (1910) at 616. See Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 139-140; McCloy v New South Wales (2015) 257 CLR 178 at 202 [27]. See also Muldowney v South Australia (1996) 186 CLR 352 at 378; [1996] HCA 52. 267 Unions NSW v New South Wales (2013) 252 CLR 530 at 545-546 [8]-[9], 579 [138]; McCloy v New South Wales (2015) 257 CLR 178 at 207-208 [45]-[47], 248 Edelman illegitimate. In short, it is an error to conflate purpose with effect by reasoning that because an effect of quietening or silencing some might be justified, therefore a purpose of quietening or silencing some can be legitimate. The defendant, with the support of the Attorney-General of the Commonwealth, met this issue head-on. The defendant submitted that a purpose of different treatment could be legitimate, arguing that "the constitutionally distinct position of candidates legitimises the pursuit of legislative objectives that select candidates and political parties for distinctive treatment relative to others who are not directly engaged in the electoral contest and who cannot be elected to Parliament or form government". That submission cannot be accepted. In Australian Capital Television Pty Ltd v The Commonwealth268, Mason CJ said that one reason why freedom of political communication was indispensable to a system of representative and responsible government was that "[o]nly by exercising that freedom can the citizen criticize government decisions and actions, seek to bring about change, call for action where none has been taken and in this way influence the elected representatives". Similarly, Deane communications by candidates and political parties but also to "communications from the represented to the representatives and between the represented"269. A law will have the goal of undermining that freedom if its purpose is to silence the voices of part of the citizenry, not merely as a necessary step towards or consequence of achieving some other purpose, but for the very reason of ensuring that the position of some is suppressed relative to others. implied freedom extends not merely that the Illegitimate purpose revealed by the meaning of ss 29(10) and 35 and the parties' pleadings The meaning of ss 29(10) and 35 Sections 29(10) and 35 of the Electoral Funding Act are part of a scheme that regulates the electoral expenditure of political parties, candidates for election, and third-party campaigners. The core of the definition of "electoral expenditure" in s 7(1), subject to exceptions that can be put to one side, encompasses two limbs: first, expenditure "for or in connection with promoting or opposing, directly or indirectly, a party or the election of a candidate or candidates"; secondly, expenditure "for the purpose of influencing, directly or indirectly, the voting at an election". 268 (1992) 177 CLR 106 at 138. See also Unions NSW v New South Wales (2013) 252 CLR 530 at 548 [17]. 269 (1992) 177 CLR 106 at 174. Edelman The relevant provisions in relation to electoral expenditure of third-party campaigners are as follows: "29 Applicable caps on electoral expenditure for State election campaigns (1) General The applicable caps on electoral expenditure for a State election campaign are as provided by this section, as modified by section 30 (Aggregation of applicable caps β State election campaigns). (10) Third-party campaigners For a State general election, the applicable cap for a third-party campaigner is: $500,000 if the third-party campaigner was registered under this Act before the commencement of the capped State expenditure period for the election, or $250,000 in any other case. Limit on electoral expenditure β third-party campaigner acting in concert with others It is unlawful for a third-party campaigner to act in concert with another person or other persons to incur electoral expenditure in relation to an election campaign during the capped expenditure period for the election that exceeds the applicable cap for the third-party campaigner for the election. In this section, a person acts in concert with another person if the person acts under an agreement (whether formal or informal) with the other person to campaign with the object, or principal object, of: having a particular party, elected member or candidate elected, or Edelman opposing the election of a particular party, elected member or candidate." Section 33(1), read with s 143(1), makes it unlawful for third-party campaigners to exceed the expenditure cap and renders such conduct an offence with a maximum penalty of 400 penalty units or imprisonment for two years or both. As the defendant submitted, s 35(1) does not prohibit all agreements to incur electoral expenditure that exceeds the third-party campaigner's cap during the capped period of the election. This is because the proscribed sole object, or proscribed principal object, does not include the second limb of the definition of electoral expenditure, namely the object of "influencing, directly or indirectly, the voting at an election". Nevertheless, it is likely that there will be few clear cases where a third-party campaigner could be confident that electoral expenditure is (i) incurred for the purpose of influencing voting at an election, but (ii) outside s 35(1) because it is not incurred with a principal object of supporting or opposing the election of a person or party. Contrary to the submissions of the defendant, s 35 is not merely a general anti-avoidance provision. The Electoral Funding Act contains a general anti-avoidance provision in s 144 which includes a prohibition on schemes to circumvent electoral expenditure restrictions. Section 30 is another example of an anti-avoidance provision that strictly proscribes contrivances that would have the effect of circumventing the caps on parties and elected members. For instance, s 30(4) prohibits a party or elected member from incurring electoral expenditure for a State election campaign that exceeds the applicable cap if added to the electoral expenditure of an "associated entity". An associated entity is defined in s 4 as "a corporation or another entity that operates solely for the benefit of one or more registered parties or elected members". Section 30(4) thus prohibits a contrivance by an elected member or registered party to use a corporation that operates solely for its benefit in order to circumvent the cap. Although s 30 is concerned with avoidance of the capped limit on electoral expenditure, it does not preclude two or more political parties, even if they are very closely aligned, from acting in concert to combine their electoral expenditure caps and thereby exceed their individual caps. It does not preclude two or more individual candidates in different electoral districts in the Legislative Assembly, or candidates in the Legislative Council, from acting in concert to combine their electoral expenditure caps and thereby exceed their individual caps. It does not preclude a party from acting in concert with another party or one or more individual candidates in different electoral districts to combine their electoral expenditure caps and thereby exceed their individual caps. Edelman In contrast, s 35 is a provision that prohibits co-ordination by third parties even where the agreement may not result in a third-party campaigner exceeding its individual expenditure cap. For instance, two third-party campaigners could each use $300,000 of electoral expenditure on an advertising campaign on the same subject matter. But they could not spend $600,000 jointly on exactly the same advertising campaign with the purpose of communicating to the public that they were united in a political message. This restriction in s 35 has different purposes from the prohibition in s 144 upon schemes to circumvent a cap. Section 144 would preclude ten third-party campaigners from developing a scheme to run a $5 million campaign in order to circumvent their legislative caps. In contrast, s 35 precludes co-ordination that is not a scheme and might have nothing to do with legislative caps. It prohibits the force of some political communications that reveal that a message is being sent by multiple third parties jointly rather than individually. It reveals not merely a purpose to avoid drowning out the voices of parties and candidates for election but also one to quieten the voices of third parties in contrast with parties or candidates for election. The general and specific purposes of ss 29(10) and 35 and the pleaded purposes Section 3 of the Electoral Funding Act recites five general objects: (a) to establish a fair and transparent electoral funding, expenditure and disclosure scheme; (b) to facilitate public awareness of political donations; (c) to help prevent corruption and undue influence in the government of the State or in local government; (d) to provide for the effective administration of public funding of elections, recognising the importance of the appropriate use of public revenue for that purpose; and (e) to promote compliance by parties, elected members, candidates, groups, agents, associated entities, third-party campaigners and donors with the requirements of the electoral funding, expenditure and disclosure scheme. These objects are expressed at a high level of generality. Plainly, they do not exhaust the objects or purposes of every one of the particular provisions of the Electoral Funding Act. In particular, the provisions that impose caps on electoral expenditure were also based on the same purposes as the Previous Act, which the Electoral Funding Act developed and referred to in Sch 2, cl 2 as a defined term (the "former Act"). The purposes of the expenditure caps in the Previous Act included270 "reducing the advantages of money in dominating political debate", "provid[ing] for a more level playing field for candidates 270 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 10 November 2010 at 27458. See also New South Wales, Joint Standing Committee on Electoral Matters, Public funding of election campaigns, Report No 2/54 (2010) at 20 [1.101]. Edelman seeking election, as well as for third parties who wish to participate in political debate" and "putting a limit on the political 'arms race', under which those with the most money have the loudest voice and can simply drown out the voices of all others". As explained above, those broadly "anti-drowning out" purposes are legitimate. Indeed the legitimacy of the general purposes of the Previous Act was not doubted when different provisions of the Previous Act were challenged in Unions NSW v New South Wales271. If the Previous Act had never been enacted then it might have been easy to see ss 29(10) and 35 as based only upon the anti-drowning out purposes. But that would be to ignore, as senior counsel for the plaintiffs submitted, that ss 29(10) and 35 were effectively amending provisions. Their purpose must be assessed in light of the fact that there had not been, and has not been, any suggestion, either inside or outside Parliament, that there was any inadequacy in the manner in which the previous caps served their purpose. The amendments were not the random acts of Parliament, effecting significant change to the legislative provisions for no additional purpose or reason. Instead, the two provisions contained the additional, illegitimate, purpose to quieten the voices of third-party campaigners in contrast with parties or candidates for election. As explained above, that additional purpose is revealed by the meaning and operation of s 35. It is brought into even sharper focus, as explained below, by the legislative history of those provisions. Unsurprisingly, the additional purpose was effectively common ground in the pleadings. In their statement of claim in this case, the plaintiffs pleaded that one of the purposes of s 29(10), when read with s 33(1) of the Electoral Funding Act, is to "privilege political communication by parties and/or candidates over political communication by third-party campaigners during State general election campaigns". That purpose is additional to the purposes of the Previous Act, which, although treating third-party campaigners differently from parties and candidates, did so for purposes other than privileging parties and candidates. In its defence, the defendant denied this purpose in the terms in which it had been pleaded by the plaintiffs but asserted that the purposes of imposing lower caps on electoral expenditure by third-party campaigners included: 271 (2013) 252 CLR 530 at 545-546 [8]-[9], 557 [49], 579 [138]. Edelman "to accord to candidates and political parties β as those who are directly engaged in the electoral contest and the only ones able to be elected to Parliament to represent the people of New South Wales and to form government β the capacity to spend more than third party campaigners who are not so engaged and who are not able to be elected to Parliament". Although expressed in different words, there is common ground in the pleadings about this additional purpose. It is a purpose of quietening the voices of third-party campaigners relative to political parties or candidates for election. Illegitimate purpose revealed by the history of ss 29(10) and 35 Apart from being common ground in the pleadings and apparent from the meaning and operation of s 35, the additional, illegitimate purpose served by ss 29(10) and 35 is clear from the historical context in which the provisions were enacted. That historical context includes the Previous Act, the 2014 Expert Panel Report272, and a Joint Standing Committee on Electoral Matters report in 2016273, to which the Electoral Funding Bill responded274. The Previous Act As I have mentioned, caps on electoral communication expenditure were first introduced in the Previous Act by amendments which commenced operation on 1 January 2011275. political registered the Legislative Assembly became subject to a cap of $100,000 multiplied by the number of districts in which a candidate was endorsed276, and was subject to an additional cap of $50,000 for expenditure incurred substantially for the purposes of the election in a particular electorate277. An endorsed candidate for the candidates endorsing party for 272 Panel of Experts, Political Donations: Final Report (2014). 273 New South Wales, Joint Standing Committee on Electoral Matters, Inquiry into the Final Report of the Expert Panel β Political Donations and the Government's Response, Report No 1/56 (2016). 274 New South Wales, Electoral Funding Bill 2018, Explanatory Note at 1. 275 Election Funding and Disclosures Amendment Act, Sch 1. 276 Previous Act, s 95F(2). 277 Previous Act, s 95F(12)(a). Edelman Legislative Assembly had a separate cap of $100,000278. An independent candidate for the Legislative Assembly279 and a non-grouped candidate for the Legislative Council280 were each capped at $150,000. A party endorsing candidates for the Legislative Council and no more than ten candidates for the Legislative Assembly281 had a cap of $1,050,000, as did an independent group of candidates for the Legislative Council282. the capped State expenditure period, The electoral expenditure cap on third-party campaigners was derived from the cap on expenditure for an independent group of candidates in the Legislative Council. If the third-party campaigner was registered before the commencement of the cap was $1,050,000283. Otherwise it was $525,000284. The rationale by which this amount was chosen was that if the cap for third-party campaigners was substantially less than the cap for independent groups in the Legislative Council then third-party campaigners could conduct the same campaign by running for election to the Legislative Council285. An additional cap on third-party campaigners was $20,000 per electorate for electoral communication expenditure incurred substantially for the purposes of the election in that electorate286. The 2011 State election A general election for the Parliament of New South Wales was held on 26 March 2011. As the expenditure caps had only been inserted into the Previous Act shortly before the 2011 election, the "capped State expenditure period" was a truncated period from 1 January 2011 to the close of polls287. 278 Previous Act, s 95F(6). 279 Previous Act, s 95F(7). 280 Previous Act, s 95F(8). 281 Previous Act, s 95F(4). 282 Previous Act, s 95F(5). 283 Previous Act, s 95F(10)(a). 284 Previous Act, s 95F(10)(b). 285 See Panel of Experts, Political Donations: Final Report (2014), vol 1 at 110. 286 Previous Act, s 95F(12)(b). 287 Previous Act, s 95H. Edelman In the capped period, five political parties incurred a total combined electoral communication expenditure of approximately $20 million: the Australian Labor Party (NSW Branch) β $8.79 million; the Liberal Party of Australia NSW Division β$7.24 million; the National Party of Australia (NSW) β $1.75 million; the Greens β $1.35 million; and the Country Labor Party β In contrast with the $20 million incurred by the five political parties, the 43 registered third-party campaigners incurred a total combined electoral communication expenditure of $1.51 million. The highest amount was by the National Roads and Motorists Association Ltd β $358,000; followed by the NSW Business Chamber β $354,000; and Unions NSW β $197,000. The Expert Panel Report Following a series of investigations by the Independent Commission Against Corruption into illegal political donations, the New South Wales Government appointed an "Expert Panel" to consider and report on options for long-term reform of political donations in New South Wales288. The Panel was chaired by Dr Kerry Schott. The other members were Mr Andrew Tink AM, the former Liberal Shadow Attorney-General, and the Hon John Watkins, the former Labor Deputy Premier. The Panel delivered its report in December 2014. In relation to the expenditure caps in the Previous Act for political parties and candidates, the Panel concluded that the Election Funding, Expenditure and Disclosures Act "adequately accommodates" the New South Wales electoral system and that "[t]he current caps provide for a fair contest in Legislative Assembly electorates, by seeking to provide equal spending for party and independent candidates"289. However, the Panel was more sceptical about the caps that applied to third-party campaigners. The Panel said that although third-party campaigners "should be free to participate in election campaigns"290, this participation should be more restricted than that of individual candidates or political parties. The Panel might be said to have had two reasons for desiring this restriction. 288 Panel of Experts, Political Donations: Final Report (2014), vol 1 at 24. 289 Panel of Experts, Political Donations: Final Report (2014), vol 1 at 64. 290 Panel of Experts, Political Donations: Final Report (2014), vol 1 at 8. Edelman First, the Panel was concerned about an increase in third-party campaigning291 and the emergence of US-style Political Action Committees292. This concern led the Panel to reiterate that third-party campaigners "should not be able to drown out the voices of parties and candidates who are the direct electoral contestants"293. However, the Panel did not suggest that these concerns, which were also purposes of the Previous Act, required a reduction in the present cap because third-party campaigners were presently drowning out the voices of parties and candidates or because the existing cap was insufficient to guard against potential future increases in third-party campaigns. Nor was it said that a reduction was required for any other arguably legitimate purpose such as preserving public confidence in the conduct of public affairs294. Secondly, the Panel "strongly" agreed that "political parties and candidates should have a privileged position in election campaigns" as they are "directly engaged in the electoral [contest], and are the only ones able to form government and be elected to Parliament"295. In contrast with this reasoning, the third-party campaigner cap in the Previous Act had been derived from the cap on expenditure for an independent group of candidates in the Legislative Council. Separately from its concern about the voices of candidates or parties being "drowned out" and in contrast with the reasons for the previous cap, the Panel regarded political parties and candidates as deserving of a privileged position, with a danger arising from third-party campaigners running single-issue campaigns that were effective296: "The Panel is concerned about the potential for wealthy protagonists motivated by a particular issue to run effective single-issue campaigns. The potential for these sort of campaigns can be seen federally in the well-funded campaigns against the mining tax and WorkChoices. In New South Wales, issues such as coal seam gas or electricity privatisation have the potential to unite opposition and motivate wealthy interests. The 291 Panel of Experts, Political Donations: Final Report (2014), vol 1 at 108, quoting Orr and Gauja, "Third-Party Campaigning and Issue-Advertising in Australia" (2014) 60 Australian Journal of Politics and History 73 at 74, but compare at 82. 292 Panel of Experts, Political Donations: Final Report (2014), vol 1 at 8, 108. 293 Panel of Experts, Political Donations: Final Report (2014), vol 1 at 8. 294 de Freitas v Permanent Secretary of Ministry of Agriculture, Fisheries, Lands and Housing [1999] 1 AC 69 at 75-76. 295 Panel of Experts, Political Donations: Final Report (2014), vol 1 at 109. 296 Panel of Experts, Political Donations: Final Report (2014), vol 1 at 110. Edelman Panel is concerned that a lack of appropriate third-party regulation would work against reformist governments pursuing difficult and controversial issues in the public interest." Notably, the Panel did not suggest that the voices of candidates or political parties at previous elections had been drowned out by campaigns against the mining tax, or against WorkChoices, or, most relevantly to New South Wales, in relation to coal seam gas or electricity privatisation. Indeed, as will be explained below, there was no suggestion of any drowning out caused by a co-ordinated campaign, within the existing caps, against privatisation during the subsequent 2015 election period. The concern was simply that, unlike parties or candidates, third-party campaigners should not have a voice that was significant enough to "work against reformist governments". This second concern echoes the language of the proscribed purpose described by Keane J in Unions NSW v New South Wales297, which is the partial suppression of political communication "by reference to the political agenda". The Panel thus concluded that298: "third-party campaigners should have sufficient scope to run campaigns to influence voting at an election β just not to the same extent as parties or candidates. It is therefore fair for parties and candidates to have higher spending caps than third-party campaigners." The Panel's recommendation (recommendation 31) was to reduce the third-party expenditure cap to $500,000, which "strikes the right balance between the rights of third parties and those of parties and candidates". The Panel said that this was "still well above the approximately $400,000 that the NRMA, the highest spending third party, spent at the 2011 election"299. The Panel also said that it would be appropriate to review the level of the third-party spending caps after the 2015 election300. The reason for review after the 2015 election, explained earlier, was that the period of capped electoral expenditure at the 2011 election had been truncated, precluding meaningful assessment of the effectiveness of the expenditure caps301. The Panel said that 297 (2013) 252 CLR 530 at 581 [146]. 298 Panel of Experts, Political Donations: Final Report (2014), vol 1 at 112. 299 Panel of Experts, Political Donations: Final Report (2014), vol 1 at 112-113. 300 Panel of Experts, Political Donations: Final Report (2014), vol 1 at 112. 301 Panel of Experts, Political Donations: Final Report (2014), vol 1 at 64. Edelman the 2015 election "will be a better test of the level of the caps and the timing of the capped expenditure period"302. The Panel also recommended (recommendation 32) the introduction of a provision "to prevent ... third-party campaigners from acting in concert with others to incur electoral expenditure in excess of the caps on third-party expenditure"303. A legitimate purpose for this "aggregation" provision was to avoid third-party campaigners acting "with a combined expenditure cap that would completely overwhelm parties, candidates and other third parties acting alone"304. However, the Panel did not explain why the provision should go beyond merely schemes to avoid the cap which, by s 144, apply to all persons or why the anti-aggregation provision should extend significantly further than the much lighter restraints on aggregation by parties or candidates. The obvious inference is that the same reasons for different treatment of third-party campaigners required a different, stricter provision for the "new aggregation provision" that the Panel said should "occur along with" the spending cap reduction305. The 2015 State election At the general election for the Parliament of New South Wales on 28 March 2015, the electoral communication expenditure by eight political parties during the capped State expenditure period commencing on 1 October 2014306 amounted to approximately $21.4 million, and included the the Liberal Party of Australia NSW Division β following amounts: $7.05 million; the Australian Labor Party (NSW Branch) β $6.55 million; the Greens β $2.60 million; the Country Labor Party β $2.53 million; the National Party of Australia (NSW) β $1.88 million; and the Shooters, Fishers and Farmers Party β $717,000. In the same period 36 registered third-party campaigners incurred a total combined electoral communication expenditure of $5.04 million. Three of the third-party campaigners incurred expenditure significantly in excess of $500,000: the NSW Nurses and Midwives' Association β $908,000; the Electrical Trades 302 Panel of Experts, Political Donations: Final Report (2014), vol 1 at 64. 303 Panel of Experts, Political Donations: Final Report (2014), vol 1 at 8-9. Based upon what was then s 205H of the Electoral Act 1992 (ACT). 304 Panel of Experts, Political Donations: Final Report (2014), vol 1 at 116. 305 Panel of Experts, Political Donations: Final Report (2014), vol 1 at 8. 306 Previous Act, s 95H. Edelman Union of Australia NSW β $794,000; and Unions NSW β $720,000. Five union third-party campaigners ran a co-ordinated campaign against privatisation, Each including electricity privatisation, entitled "NSW Not For Sale". participating union incurred less electoral communication expenditure on the co-ordinated campaign than their individual caps, with a combined total expenditure of approximately $1.1 million. The Joint Standing Committee reports The New South Wales Government indicated its support in principle for 49 of 50 of the Panel's recommendations and referred both the Expert Panel Report and the Government's Response to the Joint Standing Committee on Electoral Matters to consider together with the administration of the 2015 New South Wales election. The Committee delivered reports in June 2016307 and November 2016308. The November 2016 report can be put to one side as it does not discuss matters relevant to this case. In the June 2016 report, the Joint Standing Committee said that "third-party campaigners should be able to spend a reasonable amount of money to run their campaign" but it agreed with the Panel that "this should not be to the same extent as candidates and parties"309. Hence, the Joint Standing Committee supported in principle the Panel's recommendation that the expenditure cap for third-party campaigners be reduced310. However, in light of the third-party expenditure in relation to the 2015 election, including by the three unions mentioned who spent considerably more than $500,000, the Committee recommended (recommendation 7) that before decreasing the limit to $500,000, the New South Wales Government should consider whether "there is sufficient 307 New South Wales, Joint Standing Committee on Electoral Matters, Inquiry into the Final Report of the Expert Panel β Political Donations and the Government's Response, Report No 1/56 (2016). 308 New South Wales, Joint Standing Committee on Electoral Matters, Administration of the 2015 NSW Election and Related Matters, Report No 2/56 (2016). 309 New South Wales, Joint Standing Committee on Electoral Matters, Inquiry into the Final Report of the Expert Panel β Political Donations and the Government's Response, Report No 1/56 (2016) at 49 [7.20]. 310 New South Wales, Joint Standing Committee on Electoral Matters, Inquiry into the Final Report of the Expert Panel β Political Donations and the Government's Response, Report No 1/56 (2016) at 49 [7.22] and recommendation 7. Edelman evidence that a third-party campaigner could reasonably present its case within this expenditure limit"311. The Joint Standing Committee also supported the Panel's recommendation to enact an "acting in concert" offence, and recommended that the offence be enacted without further suggestions (recommendation 1)312. It supported the Panel's reasoning for recommending the offence be enacted313. The purpose of ss 29(10) and 35 against this history The Explanatory Note to the Electoral Funding Bill explains that the Bill was prepared in response to the reports discussed above314. The caps for parties and candidates for election were substantially increased, consistently with the need acknowledged in the Previous Act, seven years earlier, for the caps to be indexed315. The cap for an independent group of candidates in the Legislative Council, upon which the third-party campaigner cap had previously been based, became $1,288,500316, increased from $1,050,000. However, the cap for third-party campaigners was decreased by more than half. In the second reading speech introducing the Electoral Funding Bill, the Special Minister of State explained the reason for adopting the Expert Panel's recommendation to reduce the cap for third-party campaigners to $500,000317. 311 New South Wales, Joint Standing Committee on Electoral Matters, Inquiry into the Final Report of the Expert Panel β Political Donations and the Government's Response, Report No 1/56 (2016) at viii-ix. 312 New South Wales, Joint Standing Committee on Electoral Matters, Inquiry into the Final Report of the Expert Panel β Political Donations and the Government's Response, Report No 1/56 (2016) at v, viii. 313 New South Wales, Joint Standing Committee on Electoral Matters, Inquiry into the Final Report of the Expert Panel β Political Donations and the Government's Response, Report No 1/56 (2016) at 51. 314 New South Wales, Electoral Funding Bill 2018, Explanatory Note at 1. See also New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 17 May 2018 at 2. 315 Previous Act, s 95F(14), Sch 1. 316 Electoral Funding Act, s 29(5). 317 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 17 May 2018 at 4. Edelman He reiterated that "third party campaigners should have sufficient scope to run campaigns to influence voting at an election β just not to the same extent as parties or candidates"318. Then, after concerns were raised during the second reading debate about the reduction of the cap, the Minister said that the Bill was adopting "a specific recommendation of an independent panel of experts"319. He also reiterated the concerns that had been present in the Previous Act about third-party campaigners "drowning out" candidates and "dominating election campaigns"320. The Special Minister of State also explained that the Electoral Funding Bill implemented the recommendation of the Panel that third-party campaigners be prohibited from acting in concert with others to exceed the expenditure cap321. In his reply speech, the Minister reiterated that the provision implemented the Panel report and said322 that "[t]hird-party campaigners should not be permitted to circumvent the expenditure caps by setting up 'front' organisations" and that it "does not prevent third parties with a common interest from campaigning on the same issue". However, as I have explained, the provision goes further than this and imposes significant constraints on third-party campaigners that are not imposed upon parties or candidates. The close association in the Panel report between this provision and the spending cap reduction invites the inference that the additional purposes for each measure were common. Conclusion The Electoral Funding Act increased the cap of $1,050,000 for an independent group of candidates for the Legislative Council to $1,288,500323. 318 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), See also New South Wales, Legislative Assembly, 17 May 2018 at 4. Parliamentary Debates (Hansard), 23 May 2018 at 75-76. 319 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 23 May 2018 at 62. 320 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 23 May 2018 at 62-63. See also New South Wales, Legislative Council, Parliamentary Debates (Hansard), 23 May 2018 at 67, 79, 93, 105. 321 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 17 May 2018 at 4. 322 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), See also New South Wales, Legislative Council, 23 May 2018 at 63. Parliamentary Debates (Hansard), 23 May 2018 at 67, 93-94. 323 Electoral Funding Act, s 29(5). Edelman But, instead of making the same indexed increase to the previously identical cap for third-party campaigners, the cap for those third parties was decreased by more than half. The new cap for registered third-party campaigners was $500,000324. At the same time a new "acting in concert" offence was created for third-party campaigners only. At the stage of assessing the legitimacy of purpose, the purpose of one cannot be assessed independently of the purpose of the other. the "key pillars" of The Electoral Funding Act preserved the Previous Act325. But in replacing the Previous Act with a "new, modernised Act"326 it implemented an additional purpose. The large reduction of the cap for third-party campaigners and the associated introduction of an "acting in concert" offence were not irrational or random decisions but were the product of a considered legislative decision to adopt a purpose to privilege political parties and candidates. As senior counsel for the plaintiffs submitted, it was clear "what this law is doing" but one simply does not "know why it is doing that other than to shut down that protected speech". That submission should be accepted. The only rational explanation for the reduction in the cap for third-party campaigners and the introduction of the "acting in concert" offence is that in implementing the recommendations and reasoning of the Expert Panel Report, the Parliament of New South Wales acted with the additional purpose, not merely the effect, of quietening the voices of third-party campaigners relative to political parties and candidates. That purpose, which was effectively, and properly, common ground between the plaintiffs and the defendant in this case, cannot co-exist with the implied freedom of political communication. The answers to the questions in the special case should be as follows: Question 1: Is section 29(10) of the Electoral Funding Act 2018 (NSW) invalid because it impermissibly burdens the implied freedom of communication on governmental and political matters, contrary to the Commonwealth Constitution? Answer: Yes. 324 Electoral Funding Act, s 29(10). 325 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 17 May 2018 at 2. 326 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 17 May 2018 at 2. Edelman Question 2: Is section 35 of the Electoral Funding Act 2018 (NSW) invalid (in whole or in part and, if in part, to what extent), because it impermissibly burdens the implied freedom of communication on governmental and political matters, contrary to the Commonwealth Constitution? Answer: Yes, in its entirety. Question 3: Who should pay the costs of the special case? Answer: The defendant. |
HIGH COURT OF AUSTRALIA APPELLANT AND RESPONDENT Stingel v Clark [2006] HCA 37 20 July 2006 ORDER Appeal allowed with costs. Set aside orders 2 and 3 of the Court of Appeal of the Supreme Court of Victoria made on 12 May 2005 (as amended by order made on 8 June 2005) and, in their place, order that the appeal to that Court is dismissed with costs. On appeal from the Supreme Court of Victoria Representation R P Gorton QC with T J Seccull for the appellant (instructed by Maurice Blackburn Cashman) R J Stanley QC with C M O'Neill for the respondent (instructed by Coadys) T J Casey QC with J H L Forrest QC and A J M Moulds seeking leave to intervene on behalf of the Commonwealth of Australia (instructed by Australian Government Solicitor) J H Kennan SC with K D Mueller seeking leave to intervene on behalf of Carl Henning Wright (instructed by Hollows Lawyers) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Limitation of Actions β Appellant alleged respondent had raped and assaulted her in 1971 β Appellant alleged that she suffered post-traumatic stress disorder of delayed onset in 2000 and became aware of the connection between this disorder and the rapes and assaults in the same year β Proceedings were commenced for trespass to the person in 2002 by which time the general limitation period of six years for commencing actions in tort stipulated in s 5(1)(a) of the Limitation of Actions Act 1958 (Vic) ("the Act") had expired β Whether s 5(1A) of the Act applied to extend the limitation period from the date she first knew of those injuries and their causal connection β Whether a trespass to the person is an action for a "breach of duty" β Whether the injury alleged is a "disease or disorder contracted". Words and phrases β "breach of duty", "disease or disorder contracted". Limitation of Actions Act 1958 (Vic), ss 5(1)(a), 5(1A), 23A. GLEESON CJ, CALLINAN, HEYDON AND CRENNAN JJ. The appellant, who was born in 1955, alleges that in 1971 she was assaulted and raped by the respondent. She alleges that, in consequence, she suffered injury, in the form of post-traumatic stress disorder of delayed onset. She also says that she first became aware of the connection between the assaults and rapes, and the injury, in 2000. In August 2002, the appellant brought an action for damages against the respondent in the County Court of Victoria. She claims aggravated, exemplary and punitive damages. Her cause of action is for trespass to the person. The merits of the appellant's case have not been tried. The present appeal concerns the application of the Limitation of Actions Act 1958 (Vic) ("the Act"). For actions founded on tort, s 5(1)(a) of the Act prescribes a general limitation period of six years from the date on which the cause of action accrued (in the case of trespass, from the date of the trespass). If that period applied, it had long since expired in 2002. The general limitation period of six years is subject to certain qualifications, which have varied in a number of respects since 1958. The legislative history is important. In 1955, the Victorian Parliament enacted a general Limitation of Actions Act, which came into effect on 1 January 1956. The topic had been under consideration by the Statute Law Revision Committee for several years. That committee, in turn, had examined the Report of the Tucker Committee in the United Kingdom. It had also received evidence from Mr Justice O'Bryan, in which he expressed his understanding of some aspects of what was intended by the Tucker Committee. The Victorian Parliament followed the precedent set by the United Kingdom and provided, in s 5(1) of the 1955 Act, a general limitation period of six years, which was qualified by s 5(6). The qualification was expressed as follows: "No action for damages for negligence nuisance or breach of duty (whether the duty exists by virtue of a contract or of provision made by or under a statute or independently of any contract or any such provision), where the damages claimed by the plaintiff consist of or include damages in respect of personal injuries to any person, shall be brought after the expiration of three years after the cause of action accrued." Sections 5(1) and 5(6) were reproduced in the 1958 Act, which, in its amended form, is the legislation with which we are concerned. Callinan Crennan Section 23A was introduced into the Act by amendment in 19731. It applied to causes of action in respect of personal injuries. It conferred upon a court a discretionary power to extend the limitation period. The conditions subject to which the power could be exercised were specified. An order under the section could be made on application by a person claiming to have a cause of action for damages for negligence, nuisance or breach of duty (whether the duty existed by virtue of a contract or of a provision made by or under a statute or independently of any contract or any such provision) where the damages claimed consisted of or included damages in respect of personal injuries to any person. Plainly, that part of the language of s 23A mirrored that of s 5(6) which, in turn, followed the language of the United Kingdom legislation enacted in response to the Report of the Tucker Committee. When giving evidence to the Statute Law Revision Committee, Mr Justice O'Bryan had referred to a passage in that Report which said that trespass to the person was not intended to be covered by the language which introduced the stricter three year limitation period as a qualification to the more general six year period. He said that his understanding was that "assault which [causes] gross personal bodily injury would certainly be covered, but a mere trespass ... would not be covered"2. The appellant does not invoke s 23A in this case, but its terms are important to the issues of construction which must be decided. In 1983, s 5(6) was repealed3. Section 23A was amended, in a manner that is not presently material. A new s 5(1A) was inserted, which is of direct relevance. It provided4: "An action for damages for negligence nuisance or breach of duty (whether the duty exists by virtue of a contract or of provision made by or under a statute or independently of any contract or any such provision) where the damages claimed by the plaintiff consist of or include damages in respect of personal injuries consisting of a disease or disorder contracted by any person may be brought not more than six years[5] from the date on which the person first knows β 1 Limitation of Actions (Personal Injuries) Act 1972 (Vic), s 3. 2 Mason v Mason [1997] 1 VR 325 at 328. 3 Limitation of Actions (Personal Injury Claims) Act 1983 (Vic), s 3(c). 4 Limitation of Actions (Personal Injury Claims) Act 1983 (Vic), s 3(b). 5 See now Limitation of Actions (Amendment) Act 2002 (Vic), s 3(3). Callinan Crennan that he has suffered those personal injuries; and that those personal injuries were caused by the act or omission of some person." In 1989, the words "and the cause of action shall be taken to have accrued on" were added after the words "six years from"6. The language of the first part of s 5(1A) mirrored that of the repealed 5(6), and of s 23A. The respondent denies the application of s 5(1A) on two grounds. The first ground, upon which the appellant succeeded in the Court of Appeal of Victoria7, is raised by notice of contention. If upheld, it would require this Court to overrule a line of authority in Victoria, going back to 1963, as to the meaning of the statutory language. The argument is that the appellant's action is not an "action for damages for negligence nuisance or breach of duty". It is said that an action for trespass to the person is not an action for breach of duty. If that is so, the six year limitation period in s 5(1) applies, without qualification by s 5(1A). The second ground, upon which the respondent succeeded in the Court of Appeal of Victoria (Winneke P, Charles and Eames JJA; Warren CJ and Callaway JA dissenting), is that the facts alleged by the appellant do not bring the case within the concept of a "disease or disorder contracted" so as to attract the operation of s 5(1A). That ground is the subject of the appellant's appeal. It is convenient to deal with the grounds in that order. The second point only arises if the notice of contention fails. The notice of contention The Court of Appeal in the present case followed the Victorian authority earlier mentioned. The Victorian decisions were in line with decisions of the English Court of Appeal8 on comparable United Kingdom legislation, but the decisions of the English Court of Appeal were overruled by the House of Lords in Stubbings v Webb9. The decision of the House of Lords was followed by the Supreme Court of Ireland in Devlin v Roche10. The Supreme Court of Ireland, 6 Limitation of Actions (Amendment) Act 1989 (Vic), s 3(a). 7 Clark v Stingel [2005] VSCA 107. 8 Letang v Cooper [1965] 1 QB 232; Stubbings v Webb [1992] QB 197. Callinan Crennan noting that "there are two perfectly legitimate viewpoints on this question"11, decided to follow the House of Lords rather than the Court of Appeal of Victoria. The learned authors of the 19th edition of Clerk & Lindsell on Torts described Stubbings v Webb as controversial12. If the respondent's argument is correct, it produces a surprising result. Although in this case we are concerned directly with s 5(1A), the respondent's argument must apply equally to s 23A. It means that an injured plaintiff who is the victim of an intentional trespass is worse off, under the Act, than a plaintiff who is a victim of negligence. It means that there is a discretionary power to extend the limitation period in favour of a plaintiff who is run down by a negligent driver, but not in favour of a plaintiff who is deliberately assaulted. In the case of injuries of the kind dealt with by s 5(1A), assuming the other conditions are satisfied, the statute extends the limitation period in the case of a person who was neglected as a child, but not one who was sexually abused. It is difficult to understand why the policy of the Act would be to discriminate in that fashion. The Victorian Parliament enacted both ss 23A and 5(1A) after it had been decided in 1963 by Adam J, in Kruber v Grzesiak13, that an action for trespass to the person, at least in a case of unintentional trespass, was included in the meaning of "action for damages for ... breach of duty" in s 5(6) of the Act. Adam J asked the rhetorical question14: "[D]o not all torts arise from breach of duty β the tort of trespass to the person arising from the breach of a general duty not to inflict direct and immediate injury to the person of another either intentionally or negligently in the absence of lawful excuse?" The "valuable judgment" of Adam J was approved by Lord Denning MR 14 months later in Letang v Cooper15. In that case the English Court of Appeal (Lord Denning MR, 11 [2002] 2 IR 360 at 367 per Geoghegan J. 12 (2006) at 2000 [33-39]. See also Oughton, Lowry and Merkin, Limitation of Actions, (1998) at 278-281; McGee, Limitation Periods, 4th ed (2002) at 129-131; McGee, "Trespass and Limitation", (1993) 109 Law Quarterly Review 356; McGee and Scanlan, "Judicial Attitudes to Limitation", (2005) Civil Justice Quarterly 460 14 [1963] VR 621 at 623. 15 [1965] 1 QB 232 at 241. Callinan Crennan Danckwerts and Diplock LJJ), following Billings v Reed16, held that an action for trespass to the person was an action for "breach of duty" within the meaning of the Limitation Act 1939 (UK) as amended following the Report of the Tucker Committee. The case was one of unintentional trespass, but the reasoning of the Court of Appeal covered intentional trespass. Diplock LJ said17: "Counsel for the plaintiff has ... submitted that an action for trespass to the person is not an action for 'breach of duty' at all. It is, he contends, an action for the infringement by the defendant of a general right of the plaintiff; there is no concomitant duty upon the defendant to avoid infringing the plaintiff's general right. This argument or something like it, for I do not find it easy to formulate, found favour with Elwes J. ... In the context of civil actions a duty is merely the obverse of a right recognised by law. The fact that in the earlier cases the emphasis tended to be upon the right and in more modern cases the emphasis tends to be upon the duty merely reflects changing fashions in approach to juristic as to other social problems, and must not be allowed to disguise the fact that right and duty are but two sides of a single medal." In 1965, McInerney AJ, in the Supreme Court of Victoria, followed Kruber v Grzesiak and Letang v Cooper in a case raising assault and battery18. In 1968, Cooke J in the Queen's Bench Division followed Letang v Cooper in a case of intentional trespass to the person19. That was the decisional context in which s 23A, and later s 5(1A), were enacted. The words "breach of duty" in s 5(6) had been held in Victoria, and the corresponding words in the United Kingdom legislation had been held, to cover trespass to the person including intentional trespass. Attributing to Parliament a consciousness of judicial interpretation of some word or phrase is often pure speculation, but in considering legislation upon a matter of legal technicality such as limitation of actions it may be reasonable to infer an awareness of the manner in which technical language has been construed, where a choice is made 16 [1945] KB 11 at 18-19 per Lord Greene MR. 17 [1965] 1 QB 232 at 246-247. 18 Hayward v Georges Ltd [1966] VR 202. 19 Long v Hepworth [1968] 1 WLR 1299; [1968] 3 All ER 248. Callinan Crennan to adopt such language in future legislation20. That is especially so where the amending legislation was the product of the work of an expert committee which would have followed closely the course of judicial interpretation of the legislation in its earlier form. It is at least as reasonable to attribute to the Victorian Parliament, in 1972 and 1983, an awareness of the decisions of Adam J and McInerney AJ as it is to attribute to it an awareness of the Report of the Tucker Committee, especially since the effect of that Report had been interpreted, in a manner consistent with Adam J's later decision, by Mr Justice O'Bryan in his evidence to the Statute Law Revision Committee. The fact that the decision of Adam J had been approved and followed by the English Court of Appeal in relation to the United Kingdom legislation was also a significant part of the context. When s 23A was first enacted, its repetition of the language of s 5(6) made good sense, given the meaning that had previously been attributed to that language. The description of the causes of action to which the provision applied had been treated as language of amplification rather than of restriction. The words were taken to be comprehensive, and were not treated as narrowing the provision by reference to the old forms of action. If "breach of duty" did not cover intentional trespass, the adoption in s 23A of the language of s 5(6) is more difficult to explain. Why would Parliament have restricted the discretionary power conferred by s 23A to cases of negligence as distinct from intentional harm? Such a restriction also would carry its own problems. Trespass to the person might be intentional or unintentional. Would a case of unintentional (or negligent) trespass (leaving aside questions of onus of proof) be treated as a breach of duty? Furthermore, an intentional trespass might be committed by someone (such as a teacher or a nurse) who owes a conventional duty of care to the injured person. Is that duty to be ignored in characterising an action for the purposes of s 23A? The present is not such a case, but such cases are not uncommon, and they have a bearing on the interpretation of s 23A. If the language of the section has the meaning given to it by judicial decisions prior to its enactment, then those problems do not arise. If it has a different meaning, those problems cannot be overlooked. When, in 1983, s 5(6) was repealed, and s 5(1A) was introduced, so as to postpone the time bar in personal injuries actions in certain circumstances, the familiar words were used. Once again, if, as had been held, breach of duty included intentional trespass, the legislation made good sense. If it did not, 20 cf Electrolux Home Products Pty Ltd v Australian Workers' Union (2004) 221 CLR Callinan Crennan anomalies arose. Assuming the requisite latency or delayed onset of the injuries in question, why would the legislature have intended to postpone the bar in the case of negligence but not in the case of intentional conduct? In a context such as that of s 5(1A), why should a victim of an intentional tort be disadvantaged by comparison with a victim of a negligent act or omission? Again, on what was then the accepted construction of the statutory language, the problem did not arise. In 1991, the English Court of Appeal, in Stubbings v Webb21, considered a case of an adult plaintiff alleging sexual abuse during childhood, and the application to that case of a provision of the Limitation Act 1980 (UK), using the same kind of language as that set out above, which postponed the bar in circumstances comparable to those dealt with by s 5(1A) of the Victorian legislation. It was argued that the provision did not apply because the action, being an action based on intentional trespass to the person, was not an action for "breach of duty". The Court of Appeal rejected that submission, applying Letang v Cooper. Bingham LJ said that, in the absence of authority, he would have reached the same conclusion, because he could see no reason why Parliament should have intended to draw a distinction between intentional torts and negligence22. As noted above, the decision of the Court of Appeal was overruled by the House of Lords23. In 1996, in Mason v Mason24, a case not materially different from the present except in that the plaintiff was relying alternatively on s 5(1A) and s 23A, the Court of Appeal of Victoria (Hayne and Callaway JJA and Smith AJA) declined to follow the decision of the House of Lords, and held that the expression "breach of duty" in ss 5(1A) and 23A covered "intentional trespass to the person where the damages claimed consist of or include damages in respect of personal injuries"25. The leading judgment was that of Callaway JA, who based his reasoning substantially on the legislative history of the provisions in question. 22 [1992] QB 197 at 205. 25 [1997] 1 VR 325 at 330 per Callaway JA. Callinan Crennan This Court should uphold the decision in Mason v Mason, which was followed by the Court of Appeal of Victoria in the present case. There are three reasons for this. First, as a matter of principle, for the reasons given by the English Court of Appeal in Letang v Cooper, the words "breach of duty" are capable of covering intentional trespass. In view of the difference of opinion between Diplock LJ in Letang v Cooper and Lord Griffiths in Stubbings v Webb, it is clear that eminent judges may disagree about whether, upon jurisprudential analysis, the expression "breach of duty" is apt in the case of trespass, but statutes of limitation are more concerned with practical justice than with jurisprudential analysis, and, at the very least, the language is ambiguous. Secondly, the legislative history in Victoria is significant, and in some respects different from that in the United Kingdom. The House of Lords, in Stubbings v Webb, considering the same expression in the Law Reform (Limitation of Actions, &c) Act 1954 (UK), attached significance to some remarks in the Report of the Tucker Committee, but in his evidence to the Committee of the Victorian Parliament, Mr Justice O'Bryan had earlier glossed those remarks differently26 in a manner consistent with the approach that later prevailed in Victoria. More significantly, ss 23A and 5(1A), both of which were the product of reviews of the existing law by expert committees, adopted language which, at the time of its adoption, had been construed judicially in a certain fashion. That history of judicial construction was part of the context in which the provisions are to be understood. It would certainly have been known to the committees advising on changes to the Act. We are dealing here with a matter of "lawyers' law"; and considerations of judicial precedent would have been to the forefront of matters taken into account. Thirdly, the alternative construction preferred in Stubbings v Webb results in anomalies27; it attributes to Parliament an intention to draw a distinction which defeats, rather than advances, the purpose of the legislation. The evident purpose of both s 23A and s 5(1A) is to relieve the position of victims of tort: the former by giving a court a discretionary power to extend the time bar; the latter by providing for an automatic extension in cases of injuries of delayed onset. There is no discernible difference, in point of legislative policy, between victims of intentional and unintentional torts. No legislative purpose is served by putting the perpetrators of intentional torts in a better position than the perpetrators of unintentional torts. There being, as the Supreme Court of Ireland said, two constructions reasonably open, that should be preferred which produces a fair result that promotes the purpose of the legislation. The construction of the words "breach of duty" in the Victorian legislation accepted in Mason v Mason 26 Victoria, Report from the Statute Law Revision Committee on Limitation of Actions, (1950) at 47. 27 Exemplified in S v W (Child Abuse: Damages) [1995] 1 FLR 862. Callinan Crennan accords with legislative history, context and purpose. It is, therefore, to be preferred to that advanced by the respondent. The point raised by the respondent's notice of contention should fail. The appeal As has been noted, s 5(1A) was introduced in 1983. By s 11 of the amending Act, it applied to causes of action which arose after 11 May 1977. By virtue of further amendments made in 198928, s 5(1A) as amended by the 1989 Act applies (or potentially applies) to these proceedings. It should also be noted that, in s 3 of the Act, "personal injuries" is defined to include any disease and any impairment of a person's physical or mental condition. Putting to one side the issue the subject of the notice of contention, and assuming that the appellant's action is an action for damages for breach of duty, the provision applies "where the damages claimed by the [appellant] consist of or include damages in respect of personal injuries consisting of a disease or disorder contracted by [the appellant]". In that case, the action may be brought not more than six years from, and the cause of action shall be taken to have accrued on, the date on which the appellant first knew that she had suffered those personal injuries and that those personal injuries were caused by the act of the respondent. The appellant claims, the primary judge found, and the Court of Appeal accepted, that the appellant suffered from post-traumatic stress disorder of delayed onset, that the onset occurred in 2000, and that the appellant first knew of that condition and of its causal connection with the alleged acts of the respondent at some time thereafter. It is unnecessary to go into the detail of the psychiatric evidence on which that finding was based. Accordingly, the primary judge struck out the paragraph of the defence that pleaded that the action was statute-barred. It was against that order that the respondent appealed to the Court of Appeal. The reasons in the Court of Appeal refer to a division of judicial opinion in Victoria as to the application of s 5(1A) to what have been described as "traumatic" or "frank" personal injuries as distinct from what have been described as "insidious" personal injuries. Those expressions are taken from the judgments of Chernov JA in Mazzeo v Caleandro Guastalegname & Co29 and of Eames JA in this case. The three members of the majority, allowing the appeal, assigned the 28 Limitation of Actions (Amendment) Act 1989 (Vic), s 3, which also introduced 5(1B) and 5(1C). 29 (2000) 3 VR 172 at 189 [43]-[45]. Callinan Crennan case to the former category, that is, a case of frank or traumatic personal injury (assault and rape), with psychiatric consequences of late onset, as distinct from an insidiously progressive disease. It is the validity of that distinction, in its application to s 5(1A), that is at the centre of this appeal. The written submissions for the respondent summarise the argument which prevailed in the Court of Appeal as follows: "The words '... damages in respect of personal injuries consisting of a disease or disorder contracted ...' in s 5(1A) of the Act [apply] only in relation to insidious diseases: the contraction of which could not have been known by the victim at the time; which are not productive of symptoms at the time of contraction or within the limitation period prescribed by s 5(1); where the symptoms become manifest at a later time when the disease becomes florid." The leading judgment for the majority in the Court of Appeal was written by Eames JA, with whom Winneke P and Charles JA agreed. Eames JA quoted, and described as "very persuasive"30, the reasons of Chernov JA in the case of Mazzeo. The passage quoted31 (with numbers added by Eames JA for convenience) was as follows32: "There are, in my opinion, sound reasons for favouring the view that s 5(1A) does not operate in relation to traumatic personal injury claims and that the limitation period in respect of them is prescribed by s 5(1)(a). [1] First, although s 5(1)(a) and s 5(1A) are the only provisions in the Act that prescribe the limitation period in respect of personal injury claims, their wording suggests that they are mutually exclusive in that each relates to different categories of personal injury claims so that those falling within s 5(1A), for example, do not also fall within s 5(1)(a) and 30 Clark v Stingel [2005] VSCA 107 at [81]. 31 Clark v Stingel [2005] VSCA 107 at [80]. 32 Mazzeo v Caleandro Guastalegname & Co (2000) 3 VR 172 at 189 [43]-[45] (emphasis in original). Callinan Crennan vice versa. This follows from the definition in s 5(1A) of the personal injury claims to which the provision relates, namely, 'personal injuries consisting of disease or disorder' and from the effective exclusion of those injuries from the operation of s 5(1)(a) by the words '(subject to sub- section (1A))' as they appear in that subsection. [2] Secondly, the terms and the operation of s 5(1A) suggest that it relates only to personal injuries which ordinarily take a considerable period of time to manifest themselves to the injured person, hence the provision that the cause of action shall not be taken to have accrued unless the plaintiff knows 'that he has suffered those personal injuries'. No such postponement of the limitation period is necessary as a matter of fairness in respect of traumatic personal injuries because in nearly all such cases their existence is recognised at or shortly after the happening of the relevant event. It is true that often the full extent of a traumatic injury may not be ascertained until after the lapse of a considerable period of time, but the fact of such an injury would be known almost immediately or shortly after the event in question. Even where, in the relatively unusual case, the fact or the existence of the injury caused by a trauma is not known until after the expiration of six years after the event, the justice of the situation is met by the opportunity to have the limitation period extended pursuant to s 23A. [3] Next, the use of the word 'contracted' in relation to personal injuries consisting of disease or disorder is consistent with such injuries not being the result of a trauma. Ordinarily, traumatic injuries are said to be 'caused' or 'sustained' rather than 'contracted'. [4] Further, if traumatic injuries fell within s 5(1A) much of s 23A would be unnecessary and irrelevant. If s 5(1A) is concerned only with personal injury claims arising out of an insidious disease such as asbestosis, a traumatic personal injury which properly falls within s 5(1)(a) does not become a 'disease or disorder' for the purposes of s 5(1A) merely because the plaintiff has been unaware of its existence or of the relevant causal nexus until after the expiration of six years following the trauma. If it were otherwise, as I have said, s 23A would have very little operation. Such a plaintiff would effectively obtain an extension of the limitation period without having to persuade the court that an extension would be just and reasonable and without having to address the question whether the extension is likely to prejudice the defendant. In my view, that is unlikely to have been contemplated by the legislature. [5] The conclusion that, on its proper construction, s 5(1A) is concerned only with actions arising out of 'insidious' personal injuries (ie, those which have not been caused by trauma), gains support from the extrinsic material relating to the 1983 amending legislation." Callinan Crennan In expressing his conclusions about the present case, and qualifying what was said by Chernov JA in Mazzeo in one respect, Eames JA said33: "Although Chernov JA applied a dichotomy which distinguished between traumatic injuries, on the one hand (which were said not to fall within s 5(1A)) and insidious diseases or disorders, on the other hand (to which, alone, the section did apply), it is my view, for the reasons earlier discussed, that the dichotomy is better expressed as between insidious diseases and disorders, on the one hand, and, on the other hand, frank (ie not disguised) diseases or disorders, the contraction of which are neither unduly delayed nor disguised. Most 'traumatic' injuries (that term including injuries which did not immediately accompany the traumatic event but which developed as an outcome of the trauma, such as epilepsy and osteoarthritis) would fall outside the terms of s 5(1A). In my view, this case is one such instance. A traumatic event might, however, be accompanied by the contraction of a disease or disorder that falls within the terms of s 5(1A). Arguably, that might constitute the disease or disorder a traumatic injury. For that reason, a dichotomy expressed as being between traumatic injuries and insidious diseases or disorders may create confusion as to what it is that the section does and does not cover. The word 'trauma' was never used in the parliamentary debates nor in the committee report, nor does it appear in s 5(1)(a) or s 5(1A). It is not the traumatic nature of the tortious act or omission which matters, so much as the character of the injury that it causes. It is only when the injury is a disease or disorder of an insidious kind, in the sense that it is contracted but not known to exist until much later, with which the section is concerned. I conclude, therefore, that the condition of post-traumatic stress disorder of delayed onset was not a disease or disorder contracted by the [appellant] within the meaning required by s 5(1A). It was a disorder not of an insidious kind to which the section applies, and was suffered at a time later than the act or omission relied on by the [appellant] as the negligent act or breach of duty constituting the cause of action in this case. No application is now brought under s 23A. If the late onset of post- traumatic stress disorder was to be the basis of an action the proceedings in respect of that injury had to be the subject of leave granted under s 23A. 33 Clark v Stingel [2005] VSCA 107 at [88]-[90] (emphasis in original). Callinan Crennan Section 5(1A) does not apply to this case, and subject to any further submissions the proceedings should be dismissed." The minority view, espoused by Warren CJ and Callaway JA, was that the words in question are unambiguous, and that while the expression "insidious disease" might be apt to describe many of the circumstances to which those words apply, they are not limited to such cases, and that there is no reason why, in an appropriate case, the delayed consequence of a physical event might not attract the operation of the provision. That, it seems to us, is the better view. In this Court, counsel for the respondent, supporting the reasoning of the majority in the Court of Appeal, argued that, in the case of post-traumatic stress disorder of delayed onset, there is no injury until what was described as the necessary "constellation of symptoms" occurs; in this case in 2000. There is no insidious progress of a disease contracted many years earlier, such as mesothelioma or lung cancer. There is an occurrence, many years after a traumatic event, of a psychiatric disorder. Where, as here, the traumatic event allegedly constituted a trespass to the person, the cause of action accrued at the time of the event (damage not being a necessary element of the cause of action), the ordinary limitation period of six years applied, and s 5(1A) had nothing to do with the matter. This is not a case of a latent disease manifesting itself after a long period. Post-traumatic stress disorder of a delayed type does not exist until there are symptoms. It was further submitted that s 5(1A) "applies only in relation to insidious diseases the [contracting] of which could not have been known by the victim at the time and which were not productive of symptoms ... within the limitation period". The extrinsic materials referred to by Chernov JA in Mazzeo, by Eames JA in the present case, and by counsel for the respondent, show that, when s 5(1A) was enacted, the focus of concern was insidious disease of the kind just described. It may be accepted that lung disease was the paradigm case to which s 5(1A) was directed. It may also be accepted that the discretionary power conferred by s 23A was regarded as the normal method by which any injustice resulting from the operation of the general limitation period could be remedied. Both considerations are relevant, but neither is conclusive. It is the text of s 5(1A) which is to be applied; not the prevailing opinion as to what was likely to be the most common kind of case in which it would be invoked. The task of a court is to construe the language of the statute. Extrinsic materials may be useful as an aid to deciding the meaning of that language, but the subjective contemplation of the drafters as to the kind of case in which that language would be most likely to be applied is not determinative. Let it be supposed, for example, that it was the problem of progressive lung disease that prompted the enactment of s 5(1A). It does not follow that the language of s 5(1A) should be Callinan Crennan confined to cases of progressive lung disease. That problem may explain why Parliament chose the words it used, but if the meaning of those words has wider application, then a court is bound to give effect to that meaning. To hold that "personal injuries" as used in the section is confined to insidious or indeed any particular form of injury is to foreclose the factual inquiries which the section demands, these being whether the person has suffered "personal injuries" and when she first knows that she has suffered them. The nature of the subject matter of s 5(1A) is a reason for particular caution in treating expressions of subjective understanding of how the provision would operate as controlling the meaning of the statutory language. Medical knowledge develops, sometimes rapidly. When the Victorian Parliament enacted s 5(1A) it cannot have believed that it could foresee all the circumstances in which diseases or disorders might later be found to fall within its terms. No doubt Parliament can keep developments in science, and medical knowledge, under review. In the nature of things, however, Parliament's knowledge, in 1983, of the circumstances in which diseases or disorders may be contracted, or become known, many years after their original causes, cannot reasonably be used, in 2006, to limit the meaning of the words it adopted. That knowledge enabled Parliament to identify the problem, but not to define its metes and bounds. That, no doubt, is why Parliament chose general language. There is no reference in s 5(1A) to insidious disease. That may be an apt description of the paradigm case that prompted Parliament's consideration of the issue, but it is not the language used by Parliament in its response. If post-traumatic stress disorder of delayed onset falls within the language of s 5(1A), the fact that it was not something to which Parliament adverted in 1983 may not be surprising. If changes in medical knowledge reveal that s 5(1A) creates a wider exception to s 5(1) than was originally contemplated, then Parliament may reconsider the language of the exception, but the courts must apply that language. Section 5(1A) follows, and qualifies, s 5(1). The reference in s 5(1A) to a cause of action being taken to have accrued on a certain date is plainly related to the reference in s 5(1) to a limitation period expiring six years from the date on which the cause of action accrued. "Taken to have accrued" means "taken to have accrued for the purposes of determining the limitation period". The damages claimed by the appellant include damages in respect of personal injuries (of a psychiatric nature) consisting of a disorder contracted by the appellant. There is nothing in s 5(1A) that limits its operation to cases in which the disorder was contracted before the expiry of the limitation period identified in s 5(1). Nor is its operation limited to diseases, insidious or otherwise. The expression used is "disease or disorder", not "insidious disease". The provision undoubtedly covers a case where a plaintiff suffered personal injuries before he or she knew of them. Indeed, such a case may be the most common case to which the provision Callinan Crennan applies. There is, however, nothing in the language which denies its application to a case where knowledge of a disorder, and of its cause, occurs at or about the same time as the occurrence of the disorder. The error in the reasoning of the majority in the Court of Appeal is that it applied the language of the statute, not according to its terms, but by reference to an assumption as to the kind of case in which it would be most likely to be invoked. It was pointed out on behalf of the respondent that s 5(1A), unlike s 23A, applies regardless of any prejudice to a defendant. This was put forward as a reason for construing it narrowly, rather than liberally34. That is a weighty consideration, but it assumes the existence of some stable theory according to which s 5(1A) may be confined, consistently with its language. The theory propounded by the respondent does not satisfy that requirement. The differences between Chernov JA and Eames JA on the matter of "trauma" illustrate the difficulty of confining the language so as to limit the operation of s 5(1A) to the case of insidious disease contracted within the general limitation period. Interventions The parties to a pending application for special leave to appeal from a decision of the Court of Appeal of Victoria, Wright v Commonwealth of Australia35, sought leave to intervene, and made submissions to the Court, principally in writing. That also is a case of post-traumatic stress disorder, but there are some differences from the present case. There were sufficient similarities to move the parties to seek to be heard in this case. The Commonwealth argued that s 5(1A) applies only to the contracting of insidious diseases or disorders, and that a disease or disorder is insidious only if it is not productive of symptoms within the limitation period prescribed by s 5(1) but symptoms subsequently emerge due to the progression of the disease or disorder. The section, it was said, was designed to fill a particular gap in the legislation as it existed in 1983, that is to say, the necessity to avoid extension of time applications in cases involving insidious, pernicious, often life-threatening diseases. All other personal injuries claims are covered by ss 5(1) and 23A. The section, according to the Commonwealth, should not be given its literal interpretation. 34 Mazzeo v Caleandro Guastalegname & Co (2000) 3 VR 172 at 178 [9] per 35 [2005] VSCA 309. Callinan Crennan The arguments of the interveners have been taken into account in the foregoing reasoning. They should have leave to intervene, but no further order should be made about their case at this stage. Conclusion and orders The appeal should be allowed with costs. Orders 2 and 3 of the Court of Appeal of Victoria should be set aside and, in their place, it should be ordered that the appeal to that Court be dismissed with costs. GUMMOW J. On 23 August 2002, the plaintiff (the appellant in this Court) commenced an action in the County Court of Victoria claiming damages, including aggravated, exemplary and punitive damages, against the defendant. By her second further amended statement of claim, the plaintiff states that she was born on 9 March 1955 and alleges that she was assaulted and raped by the defendant on two occasions, in March and April 1971. The first occasion was alleged to be at the Warrnambool Municipal Gardens and the second at a beach in the same area. The plaintiff was a minor at the time of the alleged offences. Allowing for that circumstance, nevertheless she commenced her action many years after she had attained her majority. Is that lapse of time fatal to pursuit of her action against the defendant? The answer depends upon the construction of s 5 of the Limitation of Actions Act 1958 (Vic) ("the Act") as it stood when the plaintiff commenced her action on 23 August 200236. The text of s 5 will be set out later in these reasons. It is sufficient to observe here that a critical portion of the text of s 5 of the Victorian legislation has a progenitor in changes made to the Limitation Act 1939 (UK) by the Law Reform (Limitation of Actions, &c) Act 1954 (UK) ("the 1954 UK Act"), that the changes made by the 1954 UK Act were adopted in Ireland37, and that this legislation has been construed by the House of Lords in Stubbings v Webb38 and by the Supreme Court of Ireland in Devlin v Roche39 in a fashion which, if adopted for s 5 of the Victorian legislation, would be fatal to the plaintiff's case. Something more now should be said of the course of litigation leading to the appeal to this Court. The defendant pleaded that the plaintiff's action was statute barred. Paragraph (a) of s 5(1) of the Act provides that "actions founded on tort" are not to be brought "after the expiration of six years from the date on which the cause of action accrued". 36 The Act since has been amended by the Limitation of Actions (Amendment) Act 2002 (Vic), by Pt 3 of the Wrongs and Limitation of Actions Acts (Insurance Reform) Act 2003 (Vic), by the Limitation of Actions (Amendment) Act 2004 (Vic), by the Limitation of Actions (Adverse Possession) Act 2004 (Vic), and by ss 47 and 48 of the Defamation Act 2005 (Vic), but it is not submitted that these changes bear upon the issue on this appeal. 37 Statute of Limitations (Amendment) Act 1991 (Ir), s 3. However, among the particulars of injury given by the plaintiff were "Post-traumatic stress disorder of/with delayed onset" together with an allegation that she did not know until a date subsequent to 26 August 1996 that this was a consequence of the alleged rapes and assault by the defendant. This was said to enliven in her favour s 5(1A) of the Act. Section 5(1A) states: "An action for damages for negligence nuisance or breach of duty (whether the duty exists by virtue of a contract or of provision made by or under a statute or independently of any contract or any such provision) where the damages claimed by the plaintiff consist of or include damages in respect of personal injuries consisting of a disease or disorder contracted by any person may be brought not more than six years from, and the cause of action shall be taken to have accrued on, the date on which the person first knows β that he has suffered those personal injuries; and that those personal injuries were caused by the act or omission of some person." (emphasis added) The term "personal injuries" is defined in s 3(1) as including "any disease and any impairment of a person's physical or mental condition". The emphasised portions of s 5(1A) indicate the two issues which have been argued on this appeal. The first, which arises on the defendant's Notice of Contention, is whether the plaintiff's action is one "for damages for negligence nuisance or breach of duty"; the second, which arises from the Notice of Appeal, is whether, if so, post-traumatic stress disorder of late onset is a "disease or disorder contracted by [the plaintiff]". Further reference to the second issue may be deferred at this stage, and attention now given to the first issue. Section 5(1A) should be read with s 23A. Section 5 is found in Pt I of the Act and s 23A in Pt II. The former Part is headed "PERIODS OF LIMITATION" and the latter "EXTENSION OF LIMITATION PERIODS". The provisions of Pt I have effect subject to Pt II by reason of s 4 of the Act. Section 23A(2) empowers the court, on application and if it be just and reasonable to do so, to extend the period within which an action may be brought on a cause of action enumerated by s 23A(1). On the other hand, s 5(1A) operates of its own force and qualifies the limitation period otherwise applicable under s 5(1). What both s 5(1A) and s 23A(1) share, given the textual relationship described above between Pt I and Pt II of the Act, is the same starting point. From this, each provision then makes its own departure to qualify what otherwise is the general position established by that starting point. This point is located in par (a) of s 5(1) which, as indicated above, fixes a six year limitation period for "actions founded on tort". Both s 5(1A) and s 23A(1) qualify that general provision by using an expression which is narrower in its text and scope than "actions founded on tort". To interpret s 5(1A) (and s 23A(1)) as if they spoke of "actions founded on tort" would deny the evident textual contrast between the starting point in par (a) of s 5(1) and the regimes established by the provisions which follow. Parts I and II of the Act must be read as a whole and by reference to their terms, not upon assumptions as to the kinds of action in tort which its limitation provisions might have applied if different terms had been employed in the statute. The two provisions of s 5(1A) and s 23A(1) have, as a criterion of their several operations, an expression specifying actions "for damages for negligence nuisance or breach of duty (whether the duty exists by virtue of a contract or of [a40] provision made by or under a statute or independently of any contract or any such provision)". The construction of these words is critical for this appeal. The same formula was used in the 1954 UK Act considered in Stubbings v Webb41 and the Irish legislation considered in Devlin v Roche42. Section 23A(1) states: "This section applies to any action for damages for negligence nuisance or breach of duty (whether the duty exists by virtue of a contract or of a provision made by or under a statute or independently of any contract or any such provision) where the damages claimed consist of or include damages in respect of personal injuries to any person." Sections 5 and 23A43 use the expression "cause of action". In Williams v Milotin44, in the course of explaining, in the context of the Limitation of Actions Act 1936 (SA), that the causes of action in negligence for personal injuries and in 40 The word "a" appears in s 23A(1), but not in s 5(1A), but this does not affect the construction of the expression. 41 [1993] AC 498 at 503. 42 [2002] 2 IR 360 at 363. 43 In s 23A(2), (3)(c)-(d), (4). 44 (1957) 97 CLR 465. See also Do Carmo v Ford Excavations Pty Ltd (1984) 154 CLR 234 at 245 per Wilson J. trespass to the person "are not the same now and they never were", Dixon CJ, McTiernan, Williams, Webb and Kitto JJ remarked45: "When you speak of a cause of action you mean the essential ingredients in the title to the right which it is proposed to enforce." Further, in McHale v Watson46, Windeyer J demonstrated that, contrary to the view taken by Diplock J in Fowler v Lanning47, in an action for trespass to the person by a blow or missile it was for the defendant to aver and prove the absence of intent and negligence on the defendant's part, rather than for the plaintiff to aver and prove that the defendant acted either intentionally or negligently48. It would not be accurate to describe negligence as the essence of the plaintiff's cause of action in trespass to the person, or to treat this cause of action, at least as regards "unintentional" infliction of injury, as supplanted by the tort of negligence49. Moreover, in the present case, the plaintiff alleged personal violence by the defendant, not his failure to exercise reasonable care. The result was that on no footing was her cause of action in the tort of negligence. The plaintiff applied for a declaration that s 5(1A) applied to her cause of action and alternatively for an order under s 23A for an extension until 26 August 2003 of the time for the commencement of her action. The application under s 23A was abandoned and Judge Hanlon in the County Court held that s 5(1A) did apply. Accordingly, he struck out par 8 of the Defence which pleaded the Act in bar to the action. The Court of Appeal, by majority (Winneke P, Charles and Eames JJA; Warren CJ and Callaway JA dissenting), allowed an appeal by the defendant50. The Court of Appeal divided in favour of the defendant upon what has been described in these reasons as the second issue, the application of s 5(1A) to the alleged late onset of the plaintiff's post-traumatic stress disorder. As to the first 45 (1957) 97 CLR 465 at 474. 46 (1964) 111 CLR 384; affd (1966) 115 CLR 199. 47 [1959] 1 QB 426. See also Letang v Cooper [1965] 1 QB 232. 48 (1964) 111 CLR 384 at 387-388; cf Hackshaw v Shaw (1984) 155 CLR 614 at 49 See the discussion by Dawson J in Hackshaw v Shaw (1984) 155 CLR 614 at 671 and cf Letang v Cooper [1965] 1 QB 232 at 239-240. 50 Clark v Stingel [2005] VSCA 107. issue, earlier, in Mason v Mason51, the Court of Appeal had declined to apply the reasoning of the House of Lords in Stubbings v Webb52 which would have favoured the defendant. Mason, like the present case, was an action for personal injuries the result of intentional assault. Eames JA, who gave the leading majority judgment in the present case, followed Mason. In this Court, by his Notice of Contention, the defendant submits that the Court of Appeal also should have decided in his favour on the ground that the plaintiff's claim for damages for the alleged intentional assaults was not "[a]n action for damages for negligence nuisance or breach of duty" within the meaning of s 5(1A). For the reasons which follow, this contention should be upheld and the appeal dismissed on that ground. The primary limitation provision applicable in this case is s 5(1)(a) which states: "The following actions shall not be brought after the expiration of six years from the date on which the cause of action accrued β actions founded on simple contract (including contract implied in law) or (subject to sub-section (1A)), actions founded on tort including actions for damages for breach of a statutory duty". There is then, as the reference in the text of s 5(1) to s 5(1A) indicates, a special but limited regime whereby the cause of action is taken to have accrued by reference to a later state of knowledge by the plaintiff. However, that special regime does not apply to the general description in s 5(1)(a) of "actions founded on tort including actions for damages for breach of a statutory duty". What is specified for s 5(1A) to apply is a subset of the actions identified in s 5(1)(a). In order for the tort action brought by the plaintiff to cross the threshold of s 5(1A), it must answer the narrower description of "[a]n action for damages for negligence nuisance or breach of duty". The words which follow in s 5(1A) within the brackets indicate the duty may exist by virtue of a contract or by virtue of a provision made by or under a statute; the duty may also exist "independently" of contract or statute. Hence the text provides a footing for the proposition that at least some actions in tort cross the threshold of s 5(1A) as actions for damages for "breach of duty". But is the action by the plaintiff for damages for assault and rape an action for breach of duty by the defendant? The plaintiff relied for an affirmative answer, as did the Court of Appeal in Mason53, upon the rhetorical question posed by Adam J in Kruber v Grzesiak54: "After all, do not all torts arise from breach of duty β the tort of trespass to the person arising from the breach of a general duty not to inflict direct and immediate injury to the person of another either intentionally or negligently in the absence of lawful excuse?" However, the answers to that question are, first, that it is too widely framed as a statement of universal principle to be of utility in construing s 5(1A) of the Act and, secondly, that it does not accommodate the structure of the Act itself. As to that second matter, if s 5(1A) had the general application which would follow from treating all tort actions as actions for breach of duty, the result would be the frustration of the evident purpose of s 5(1A) to apply its special regime to some and not to all of the general class of tort actions to which s 5(1)(a) applies. Further, there would be rendered superfluous the separate identification in s 5(1A) of actions for damages for negligence and for nuisance. As to the first matter, and the proposed general principle of tort law, the following may be said. At a high level of generality, it may be said that because "duty" means the "prohibition of a certain form of behaviour in a given kind of situation", it follows that "every tort is the breach of some legal duty"55. But against that is the caution administered by Dixon J in Victoria Park Racing and Recreation Grounds Co Ltd v Taylor56: 53 [1997] 1 VR 325 at 329. 54 [1963] VR 621 at 623. See also the statement by Murphy J in Macpherson & Kelley v Kevin J Prunty & Associates [1983] 1 VR 573 at 587 that torts are "breaches of a duty owed generally to one's fellow subjects" and that by Lord Denning MR in Letang v Cooper [1965] 1 QB 232 at 241: "Our whole law of tort today proceeds on the footing that there is a duty owed by every man not to injure his neighbour in a way forbidden by law." 55 Deakin, Johnston and Markesinis, Markesinis and Deakin's Tort Law, 5th ed (2003) at 19. See also Fridman, The Law of Torts in Canada, 2nd ed (2002) at 56 (1937) 58 CLR 479 at 505. Professor Glanville Williams expressed a conclusion to similar effect in "The Foundation of Tortious Liability", (1941) 7 Cambridge Law Journal 111 at 131-132. "There is, in my opinion, little to be gained by inquiring whether in English law the foundation of a delictual liability is unjustifiable damage or breach of specific duty. The law of tort has fallen into great confusion, but, in the main, what acts and omissions result in responsibility and what do not are matters defined by long-established rules of law from which judges ought not wittingly to depart and no light is shed upon a given case by large generalizations about them." With respect to trespass to the person, it may be said that the application of force to another without lawful justification amounts to battery even without the intended or actual occasioning of harm thereby, and that the interests thereby protected include that of personal dignity as well as physical integrity57. But it adds little, even at this level of analysis, to say that the defendant to such an action has broken a duty to the plaintiff not to infringe these interests. If the defendant had invited the plaintiff to his house and committed there the alleged violent acts against her, it might be said that the defendant had owed a duty to take care that the house was safe. But, as has been said in the cases, would one really be thinking of a duty not to assault and rape the plaintiff while The question then becomes whether, in relation to any torts, negligence and nuisance apart, the phrase "breach of duty", when used in s 5(1A), has any content. With respect to the Irish legislation to which reference has been made, in Devlin v Roche Geoghegan J remarked59: "A breach of a duty of care is really the same thing as negligence. But the law of tort traditionally recognised particular breaches of duty which were governed by their own principles rather than by Donoghue v Stevenson60." Reference then was made by Geoghegan J to the duty set out in Fletcher v Rylands61, to the absolute duty in respect of dangerous goods or articles, and to 57 See Williams v Milotin (1957) 97 CLR 465 at 474; Collins v Wilcock [1984] 1 WLR 1172 at 1177; [1984] 3 All ER 374 at 377-378; Heuston and Buckley, Salmond and Heuston on the Law of Torts, 21st ed (1996) at 120-121. 58 See Stubbings v Webb [1993] AC 498 at 508; Devlin v Roche [2002] 2 IR 360 at 59 [2002] 2 IR 360 at 367. 61 (1866) LR 1 Ex 265; affd Rylands v Fletcher (1868) LR 3 HL 330. the common law duty to invitees as examples where breaches of duty would not always accurately be described as breaches of a duty of care and where damages might be sought in respect of personal injuries. To that may be added the branch of the common law of liability for dangerous animals which, independently of questions of trespass and negligence, imposes upon the owner an "absolute duty" to take measures to prevent them from doing damage62. In Australia and as a consequence of decisions of this Court delivered in fairly recent years, some of those examples have been enveloped and absorbed by the tort of negligence63. But that was not the situation when s 5(1A) and s 23A (in its present form) were first introduced into the Act by the Limitation of Actions (Personal Injury Claims) Act 1983 (Vic) ("the 1983 Act"). It certainly was not the case in England at the time of the enactment of the 1954 UK Act64. Something more needs now be said of the provenance of the 1983 Act. The Act, as first enacted as the Limitation of Actions Act 1955 (Vic) ("the 1955 Act"), contained in par (a) of s 5(1) the general six year limitation period for actions "founded on tort". However, s 5(6) imposed a three year limitation period for certain actions and did so in the following terms: "No action for damages for negligence nuisance or breach of duty (whether the duty exists by virtue of a contract or of provision made by or under a statute or independently of any contract or any such provision), where the damages claimed by the plaintiff consist of or include damages in respect of personal injuries to any person, shall be brought after the expiration of three years after the cause of action accrued." The similarity to the opening words of s 5(1A) will be apparent. However, it also is apparent that the sub-sections serve quite different ends. Section 5(1A) operates where it applies to advance what otherwise would be the general 62 Buckle v Holmes [1926] 2 KB 125 at 128; Draper v Hodder [1972] 2 QB 556 at 569; Jones v Linnett [1984] 1 Qd R 570 at 574-575. 63 See, for example, Australian Safeway Stores Pty Ltd v Zaluzna (1987) 162 CLR 479; Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520. 64 See, for example, the treatment of the rule in Indermaur v Dames (1866) LR 1 CP 274; (1867) LR 2 CP 311 by Dr Stallybrass, as editor of the 10th edition of Salmond's Law of Torts, (1945) at 476-481. This was followed by the rebuff in London Graving Dock Co Ltd v Horton [1951] AC 737 to the assimilation of occupiers' duties into the general law of negligence, and then by the Occupiers' Liability Act 1957 (UK). limitation period provided by s 5(1); s 5(6) contracted the six year period to three years. The 1955 Act marked the introduction into Victorian statute law of a limitation statute of general application to replace a large number of enactments touching the subject65. The three year limitation period had been introduced as a quid pro quo for removal of the special protection which had been given to various public authorities66. Section 3 of the 1983 Act repealed s 5(6). It also introduced s 5(1A) and made consequential amendments to s 5(1)67. Section 5 of the 1983 Act introduced the present s 23A. The 1983 Act was described by the Attorney- General in the Second Reading Speech in the Legislative Assembly as introducing a new scheme for limitation of actions in personal injury claims in Victoria which would "be simple and easily understood"68. Of the relationship between s 5(1) and s 5(1A), the Attorney-General said69: "In personal injury claims, other than disease or disorder cases, the injured person may bring his action for damages within six years after the date of the accrual of his cause of action. Normally that would be the date of the injury. In disease cases, such as asbestosis or pneumoconiosis, the injured person may bring his action for damages within six years from the date that he knows he has the disease or disorder and that someone is responsible β that is, when he knows he has a cause of action. That knowledge may not come to the injured person until many years after the disease or disorder starts to develop." No attention appears to have been given in the preparation of the Bill for the 1983 Act to the significance of the carrying over, to a quite different setting, of the form of words used in s 5(6) of the 1955 Act. But this is not a case of the 65 Mason v Mason [1997] 1 VR 325 at 326-327. 66 Mason v Mason [1997] 1 VR 325 at 329. 67 Section 5(1A) took the form critical for this appeal, and set out earlier in these reasons, after amendment by s 3 of the Limitation of Actions (Amendment) Act 1989 (Vic). This also added sub-ss (1B) and (1C) to s 5. Section 5(1C) provides that s 5(1A) applies "despite anything to the contrary in this or any other Act". 68 Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 14 December 69 Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 14 December class considered Commissioner of Taxation, where Gibbs CJ said70: in Cooper Brookes (Wollongong) Pty Ltd v Federal "There are cases where the result of giving words their ordinary meaning may be so irrational that the court is forced to the conclusion that the draftsman has made a mistake, and the canons of construction are not so rigid as to prevent a realistic solution in such a case". Rather, this is a case where the words of s 5(1A) which are in question can be intelligibly applied to the subject-matter with which the sub-section deals71, and the distinction drawn between actions in tort generally (s 5(1)(a)) and those tort actions for negligence, nuisance or breach of duty (s 5(1A)) cannot be put aside as an evident drafting oversight72. The disease cases to which the Attorney- General referred, perhaps not unreasonably, were seen as including only actions lying in contract and those tort actions which lay for negligence, nuisance or breach of duty. It is not for the Court to conjecture that there appears no good reason for the Parliament not speaking in s 5(1A) of any action in tort and then to construe the provision accordingly73. On the appeal to this Court, each side claimed that in construing s 5(1A) controlling significance was to be found in its view of the provenance of s 5(1A) in s 5(6) of the 1955 Act. If regard be had to the origins of s 5(6) as suggested, the result favours the defendant. In Mason74, Callaway JA traced the origins of s 5(6) in the Bills introduced in various forms in 1947, 1948, 1949 and 1950 and in the work of the Statute Law Revision Committee in Victoria. What is apparent is that the presentation to the British Parliament in July 1949 of the Report of the Committee on The Limitation of Actions ("the Tucker Committee")75 had a great impact upon the form taken by the law reform legislation in Victoria. Again, there had been in the United Kingdom the problem of the special position of public authorities. Paragraph 23 of the Report of the Tucker Committee read: 70 (1981) 147 CLR 297 at 304. 71 cf Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 305. 72 Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 323. 73 cf Mason v Mason [1997] 1 VR 325 at 330. 74 [1997] 1 VR 325 at 327-328. 75 Cmd 7740. "We consider that the period of limitation we have recommended should apply to all actions for personal injuries, whether the defendant is a public authority or not. We do not think it is necessary for us to define 'personal injuries', although this may possibly be necessary if legislative effect is given to our recommendations. We wish, however, to make it clear that we do not include in that category actions for trespass to the person, false imprisonment, malicious prosecution, or defamation of character, but we do include such actions as claims for negligence against doctors." The text of s 5(6) of the 1955 Act was drawn from that of s 2(1) of the 1954 UK Act, rather than from previous proposals in Victoria. The view was taken by the Parliamentary draftsman in Victoria that "the Tucker Committee had comprised some of the best known jurists of the day and that it was advantageous to have uniformity in such matters among the different countries of the British Commonwealth"76. The phrase "breach of duty" in s 2(1) of the 1954 UK Act was construed by the House of Lords in Stubbings v Webb as not including a deliberate assault. Lord Griffiths referred to par 23 of the Report of the Tucker Committee77, noting that rape and indecent assault (the subject of the action by the plaintiff in Stubbings) fell within the category of trespass to the person, and concluded78: "The phrase lying in juxtaposition with negligence and nuisance carries with it the implication of a breach of duty of care not to cause personal injury, rather than an obligation not to infringe any legal right of another person." It should be added that the House of Lords had before it not the 1954 UK Act itself, but provisions of the Limitation Act 1980 (UK). These provided for the exercise of a judicial discretion to extend the limitation period in respect of a class of personal injury actions defined in terms drawn from s 2(1) of the 1954 UK Act. There will be apparent some analogy to s 23A of the Victorian legislation. Stubbings has the added significance that the above interpretation was given to the same form of words as had appeared in earlier legislation with a different objective (differential limitation periods). This was carried forward to later legislation with another focus (an extension of time regime). 76 Mason v Mason [1997] 1 VR 325 at 328. 77 [1993] AC 498 at 503, 507. 78 [1993] AC 498 at 508. The Irish legislation considered in Devlin v Roche resembled s 5(6) of the 1955 Act79. It provided for a limitation period of three rather than six years for actions for damages for personal injury "caused by negligence, nuisance or breach of duty (whether the duty exists by virtue of a contract or of a provision made by or under a statute or independently of any contract or any such provision)". The Supreme Court followed the reasoning in Stubbings to conclude that the six rather than the three year period applied to an action for assault and battery at a football ground by members of the Garda. No doubt different conclusions might have been reached in Stubbings and Devlin on the question of construction. No doubt the drafting of s 5(6) of the 1955 Act to adopt the British precedent in the interests of consistency may be seen, with hindsight, to have disappointed some expectations of members of the Statute Law Revision Committee80. But these are considerations of insufficient weight to displace what flowed from the use made in Victoria of the Report of the Tucker Committee and of s 2(1) of the 1954 UK Act. There remains one matter for consideration on this branch of the appeal. It concerns the point made by Eames JA in the Court of Appeal, namely that it would be anomalous if a claim of rape by a father fell outside s 5(1A) whilst a claim against the mother for breach of a duty of parental care fell within it. That some actions in tort, albeit respecting disease cases to which s 5(1A) otherwise may apply, will fall outside the scope of the sub-section follows from the particular terms adopted to mark off s 5(1)(a) from s 5(1A) and to differentiate the two limitation period regimes. Further, the same factual matrix may supply the different (or at least not co-incident) essential ingredients of the rights enforced in several causes of action. One of these causes of action may answer the description in the opening words of s 5(1A), while another may not do so. But to recognise that state of affairs is one thing. It would be another to rely upon such instances to read the expression "negligence nuisance or breach of duty" as encompassing any tort action in a disease case to which s 5(1A) otherwise speaks. Again, it may be said that the bracketed words in s 5(1A) are words of extension rather than limitation81. So much may be agreed. But what the 79 The only material difference was that in the Irish legislation, the limitation period ran from the later of the date when the cause of action accrued and the date of knowledge of the plaintiff, whereas in s 5(6) the limitation period merely ran from when the cause of action accrued. 80 See Mason v Mason [1997] 1 VR 325 at 329-330. 81 cf Mason v Mason [1997] 1 VR 325 at 330. extension does not do is employ language to adopt a general theory of a duty- based law of torts. The conclusion reached above upon the issue raised by the Notice of Contention dictates the dismissal of the appeal. The question whether the Court of Appeal correctly construed the phrase "personal injuries consisting of a disease or disorder contracted by a person" must await an appeal to this Court in a case where the threshold of the opening words of s 5(1A) has been crossed. The applications to intervene in this appeal by the parties to the pending special leave application from the decision of the Court of Appeal of the Supreme Court of Victoria in Wright v Commonwealth of Australia82 should be allowed, but no further costs order should be made about their case at this stage. The appeal should be dismissed with costs. 82 [2005] VSCA 309. Kirby KIRBY J. This is an appeal from a judgment entered by the Court of Appeal of the Supreme Court of Victoria83. For the purposes of the proceedings, that Court was exceptionally constituted by five judges. It was divided as to the outcome84. This Court too is divided over the meaning and application of the provisions of the Victorian statute applicable to the cause of action for which Ms Carol Stingel ("the appellant") sued Mr Geoffrey Clark ("the respondent") for damages. That statute is the Limitation of Actions Act 1958 (Vic) ("the Act") as it stood in 2002, when the proceedings were commenced. Section 5(1A): application and ambit The application issue: The point of construction upon which this Court has divided was not the subject of divided opinions in the Court of Appeal. This is because, upon that point, there was established authority of the Court of Appeal which determined the point in favour of the appellant85. The point was argued in the proceedings below. However, the Court of Appeal adhered to its earlier decision. When the Court of Appeal decided the case adversely to the appellant on another point of construction arising under the Act, the appellant sought special leave to appeal to this Court. In that application, the panel granting such leave indicated that if the matter were to be considered by this Court, it would be preferable for the entire controversy to be submitted to examination86. So it has been. This appeal thus presents two issues arising under the Act. The first, in point of logic, is raised by the respondent's notice of contention. It concerns whether the provision upon which the appellant relied to bring her proceedings, s 5(1A) of the Act, 31 years after she was allegedly sexually assaulted by the respondent, applied to her case. Normally, by s 5(1) of the Act, actions founded on tort shall not be brought after the expiry of six years from the date on which the cause of action accrued. However, to this general provision, s 5(1A) provides an exception87. This presents the "application of the section" issue. It concerns whether s 5(1A) of the Act attached to the circumstances of the appellant's cause 83 Clark v Stingel [2005] VSCA 107. 84 Winneke P, Charles and Eames JJA; Warren CJ and Callaway JA dissenting. 85 Mason v Mason [1997] 1 VR 325 per Callaway JA (Hayne JA and Smith AJA concurring), following Kruber v Grzesiak [1963] VR 621 per Adam J. 86 [2005] HCATrans 969 at 12-13. 87 The provisions of s 5(1A) were introduced into the Act by the Limitation of Actions (Personal Injury Claims) Act 1983 (Vic), s 3. Kirby of action so as to extend the time within which the appellant could bring her proceedings, notwithstanding the delay. The ambit issue: The point of law on which the Court of Appeal divided was different. It concerned the ambit of s 5(1A) of the Act, once it was decided that it attached to the appellant's claim. In effect, by reference to the statutory text, its alleged purposes and extrinsic materials, the respondent suggested that s 5(1A) was confined in its operation to causes of action founded on insidious diseases, such as mesothelioma or asbestosis, the initial acquisition of which was unknown to the person affected. Upon this view, the sub-section was not available for late onset post-traumatic stress disorder such as the appellant alleges has arisen after 26 August 1996 as a consequence of the 1971 rapes and assault pleaded against the respondent. This ambit issue is presented by the appellant's appeal. But logically, it came second because, if s 5(1A) of the Act has no application to a case where the action for damages arises from trespass to the person, no issue is presented for the extension of the limitation period for which s 5(1A) provides. Indeed, no other, exceptional and discretionary provision could be invoked under s 23A of the Act to postpone the descent of the limitation bar88. This is because the formula which creates the suggested impediment for the appellant as to the application of s 5(1A) of the Act also appears in s 23A89. In this Court, the application issue is decided in favour of the appellant by Gleeson CJ, Callinan, Heydon and Crennan JJ ("the joint reasons")90 and by Hayne J91. It is decided adversely to her claim by Gummow J92, who does not therefore have to decide the ambit issue. The joint reasons also decide the ambit issue in favour of the appellant93. I must choose between the competing interpretations and explain why I prefer one over the other. 88 Inserted by the Limitation of Actions (Personal Injuries) Act 1972 (Vic), s 3. The provision commenced operation in 1973. 89 The appellant originally commenced proceedings for an extension of the limitation period under s 23A of the Act. However, this was abandoned, presumably because of recognised difficulties in establishing the preconditions to the application of that section in the circumstances. 90 Joint reasons at [18]. 91 Reasons of Hayne J at [132]-[133]. 92 Reasons of Gummow J at [75]. 93 Joint reasons at [26]-[28]. Kirby Two perfectly legitimate interpretations Two final court decisions: The history of judicial consideration of the same, or similar, statutory language is described in the reasons of other members of this Court. That history shows the division of judicial opinion on the application of the relevant provisions and an acknowledgment that each of the contesting interpretations is well supported and strongly argued by its respective supporters such that the competing arguments produce "two perfectly legitimate The position has now been reached that the two final national courts that have examined counterparts of the contested provisions (the House of Lords95 and the Supreme Court of Ireland96) have concluded that the better view is that the statutory words do not extend to claims founded on intentional trespass. The holdings of these courts are not binding on this Court. Each was aware of the conflicting opinions of other judges. Each referred to the relevant considerations in reaching its preferred conclusion. Each acknowledged the importance of avoiding an overly narrow and purely verbal approach to the problem. By reference to the applicable considerations, each concluded that the better interpretation was that the relevant provisions did not apply to a case such as the present. Material and immaterial conclusions: This is also the conclusion that I have ultimately reached. It leads me to concur in the orders that Gummow J favours. But first, out of respect for the contrary views, I will indicate the main considerations that lead me to this result. No judicial authority dictates the the preponderance of outcome. Australian authority against it must be set aside97. Generalities about the remedial or reformative character of s 5(1A) do not resolve the controversy98. The question remains what precisely was the introduction of s 5(1A) into the Act intended to accomplish? To answer that question it is necessary to turn to the Chauvinistic considerations concerning 94 Devlin v Roche [2002] 2 IR 360 at 367 per Geoghegan J (for the Court). 95 Stubbings v Webb [1993] AC 498. 96 Devlin [2002] 2 IR 360. 97 Such as Kruber [1963] VR 621; Hayward v Georges Ltd [1966] VR 202; Ure v Humes Ltd [1969] QWN 25; Mason [1997] 1 VR 325; Clark [2005] VSCA 107 at [51]-[61]. See also O'Neill v Foster (2004) 61 NSWLR 499 at 510 [42]. 98 cf Queensland v Stephenson [2006] HCA 20 at [49]-[56]; Davison v Queensland [2006] HCA 21 at [41]. Kirby statutory language. That is where the search for the meaning of the legislation must always start99. Ultimately, it is where the solution will be found. As I approach this appeal, four considerations are of assistance in guiding me to my conclusion. These are the text of the Act; the context in which s 5(1A) appears in the Act; the legislative history; and considerations relevant to deriving the legislative purpose and policy of the Act. The provisions of s 5(1A) do not apply The statutory problem: The problem presented by the terms of s 5(1A) of the Act can be simply stated. It is illustrated by the alleged facts that give rise to the appellant's proceedings and the operation of the Act upon those facts. The details are set out in other reasons100. No facts have yet been found. The case has proceeded on the assumption that, in a trial, the appellant could prove the facts that she has alleged in her pleadings. For the first (application) issue, the question is whether the appellant's claim, as pleaded, answers to the description of "[a]n action for damages for β¦ breach of duty" within s 5(1A) of the Act notwithstanding that it is an action based on the alleged acts of assault and rape that the appellant pleads against the respondent in her claim for civil damages. Arguments for application: A number of arguments have been deployed to support the proposition that wrongs comprising intentional trespass involve a "breach of duty", in the sense in which that expression is used in s 5(1A). They are re-expressed in this appeal by the joint reasons. They include scrutiny of the possible purpose that Parliament might have had to exclude intentional trespass from the remedies introduced by the enactment of s 5(1A)101; the apparently anomalous and unjust consequences of that differentiation between particular cases102; that the construction propounded for the respondent would place victims 99 See, eg, Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue (Vict) (2001) 207 CLR 72 at 77 [9], 89 [46]; Neindorf v Junkovic (2005) 80 ALJR 341 at 350-351 [42]; 222 ALR 631 at 641; Weiss v The Queen (2005) 80 ALJR 444 at 452 [31]; 223 ALR 662 at 671. 100 As to the facts see the joint reasons at [1]-[7]; reasons of Gummow J at [34]-[38]. As to the statutory provisions see the joint reasons at [3]-[7]; reasons of Gummow J at [45], [51]; reasons of Hayne J at [124]-[126]. 101 Joint reasons at [12]-[13]. 102 Joint reasons at [13]. Kirby of intentional torts in a less advantageous position than victims of negligence103; the added injustice of excluding the beneficial application of s 23A of the Act because of the use in that section of the same expression104; the difficulty of distinguishing trespass from negligence in particular cases105; and the capacity to dispel the suggested problem by the simple device of treating "breach of duty" as a phrase used in a non-technical sense106. Thus, in the present case, the appellant argued that a person such as the respondent "owed a duty", in a moral, personal and societal sense, not to assault or rape a person such as her. Viewed in this way, and in the overall remedial context of the Act into which ss 5(1A) and 23A were introduced, the supposed problem then disappears. The phrase "breach of duty" is wide enough, on this view, to include cases of intentional trespass. Judicial conclusions to this effect remove what is regarded as an anomalous and harsh outcome for legislation that was generally intended to be remedial and reformatory. I acknowledge the force of these arguments. All limitation statutes involve a compromise between interests favouring the finality of risks of liability and the enforcement of rights of action claimed by a person under the law, despite delay in doing so107. Often, in judging the application and ambit of a limitation provision, it is necessary to weigh the competing textual arguments against the background of the competing policy objectives inherent in such legislation108. The outcome may not be self-evident. The existence of competing arguments is inherent in the ambiguity of language and the conflicting statutory objectives109. The present is a typical instance of this problem. The textual arguments: However, the text of s 5(1A) of the Act is strongly against the construction urged for the appellant. The words "breach of duty" are words of common legal use. A breach of duty is a familiar element of the tort of 103 Joint reasons at [9], [14], [17]. 104 Joint reasons at [13]. 105 Joint reasons at [13]. 106 Joint reasons at [12]. 107 Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 at 552, 108 cf Davison [2006] HCA 21 at [34]. 109 News Ltd v South Sydney District Rugby League Football Club Ltd (2003) 215 CLR 563 at 580 [42]. Kirby negligence. Similarly, a contract and a statute may create a duty. The word "duty" is a common legal expression used in the context of personal injury claims. That is the context in which s 5(1A) was introduced into the Act. In such circumstances, it is not self-evident that the phrase is used here in other than its ordinary meaning. This is: did the person against whom the action for damages is commenced owe a "duty" in law to the person commencing that action? According to its long title, the statute which inserted s 5(1A) into the Act was "[a]n Act to make provision for Extending the Period within which Actions for Damages in respect of Personal Injuries may be brought"110. In such a context, there is no reason to introduce a different, alien, notion of "duty". The Act is addressing legal causes of action, as specified. Why should it be inferred that the Parliament which enacted it intended for this subcategory of action alone to introduce a different, vaguer, social meaning to the word "duty"? Actions of intentional trespass are amongst the most ancient of the causes of action known to English law111. In the absence of strong arguments to the contrary, it is too late to attempt to re-express actions founded on trespass (or to distort their constituent elements) by holding that they include an element of "breach of duty". Section 5(1A), a remedial provision, uses the phrase "breach of duty", but it does not pretend to restate the components of actions of intentional trespass. "Breach of duty" is a notion alien to trespass. The slightest familiarity with the ingredients of intentional trespass demonstrates that this is so. A number of authors have made this point112 and, in doing so, have given the parliamentary language its ordinary legal meaning. The other identified wrongs on which the action for damages may be founded are apparently used in the Act in a conventional legal sense. The imposition on the phrase "breach of duty" of a looser, non-legal meaning, especially with respect to intentional torts, is therefore difficult to justify. 110 Limitation of Actions (Personal Injury Claims) Act 1983 (Vic). 111 Cole v Turner (1704) Holt KB 108 [90 ER 958]; Bunyan v Jordan (1937) 57 CLR 1 at 13; Trindade, "Intentional Torts: Some Thoughts on Assault and Battery", (1982) 2 Oxford Journal of Legal Studies 211; Glazebrook, "Assaults and their consequences", (1986) Cambridge Law Journal 379; Feldthusen, "The Canadian Experiment with the Civil Action for Sexual Battery", in Mullany (ed), Torts in the Nineties, (1997) 274 at 281. No argument was advanced in this appeal as to the existence of a new nominate tort of sexual battery. 112 See, eg, Franks, Limitation of Actions, (1959) at 196-197; cf McGee, Limitation Periods, 4th ed (2002) at 129-131. Kirby In his reasons, Hayne J resolves this issue by reference to the presumed intention of the Victorian Parliament to enact a law applying to all personal injury claims113. However, given the Parliament's use of technical language114, the words contained in the legislation are inapt to apply to a claim in trespass. Nor can it be suggested that such an interpretation is necessary to give the words "breach of duty", in the context of s 5(1A) of the Act, meaningful work to do. The phrase is by no means otiose. It has express application from the words that follow in parenthesis. The "duty" envisaged in s 5(1A) may exist by virtue of a contract or of a provision made by or under a statute. It may exist independently of a contract or a statutory provision. At common law, it may exist outside the identified cases of negligence where a duty is an element of the alleged tort. It follows that the phrase "breach of duty" should be given its ordinary legal meaning. That meaning is not engaged by intentional torts, such as assault and battery. To suggest otherwise is to debase the notion of "breach of duty" and to reduce it to a meaningless expression such as "breaches of a duty owed generally to one's fellow subjects"115. It seems unlikely that this would have been the purpose of Parliament in enacting a limitation statute, a species of so-called "lawyers' law"116. The contextual arguments: The foregoing analysis is reinforced by the statutory context. Had it really been intended that s 5(1A) of the Act should apply to every case of "breach of duty" owed to others in a moral or societal sense, it would have been a simple matter to choose a phrase having that effect. Thus, it would have been possible for the drafter to provide that s 5(1A) applies to "actions founded on β¦ contract or on tort and on statute". Indeed, such a phrase already had a history in limitations law. It appears in s 2 of the Limitation Act 1939 (UK). More to the point, when the Limitation of Actions Act 1955 (Vic) ("the 1955 Act") was enacted, s 5(1) copied the United Kingdom statute in this respect. In the general provision for a six year limitation for specified actions, the United Kingdom provisions were also copied. They 113 Reasons of Hayne J at [130]-[131]. 114 Palgo Holdings Pty Ltd v Gowans (2005) 221 CLR 249 at 257 [16] per McHugh, Gummow, Hayne and Heydon JJ. 115 Macpherson & Kelley v Kevin J Prunty & Associates [1983] 1 VR 573 at 587. 116 Joint reasons at [17]. Kirby included a six year limitation for "[a]ctions founded on simple contract (including contracts implied in law) or founded on tort"117. The fact that this expression appeared in an adjacent provision of the Act shows that, had Parliament intended to adopt, in s 5(1A), a phrase of generality, there was a perfectly satisfactory precedent for it to follow. This would have involved no substantial modification of longstanding legal notions. Indeed, the phrase already appeared in the Act. Moreover, it had appeared in s 5 of the 1955 Act which included, in a later sub-section118, a reference to the alternative formula "No action for damages for negligence nuisance or breach of duty β¦ shall be brought"119. This legislative history therefore contradicts any suggestion that the contested phrase was a mistake or involved an oversight by the drafter. The context in which s 5(1A) appears in the Act also includes s 23A. That was a provision adopted as a special addition to the general provisions in s 23 for the extension of limitation periods in cases of disability. Specifically, s 23A provided for the discretionary extension of limitation periods in specified actions for personal injuries where it appeared to the court that material facts relating to the cause of action were not known to the claimant, where there was evidence to establish the cause of action apart from the limitation defence and where, in the court's discretion, it should order an extension of the limitation period. This discretion, available where the interests of justice in the particular case suggested it, would be left with little work to do if s 5(1A) were given the generalised meaning urged for the appellant, applicable to virtually every cause of action for personal injury. The legislative history: The foregoing conclusions are strongly reinforced when, additionally, the legislative history is taken into account. It is relevant to start by recognising the fact that attempts to reform the Victorian limitations statute began as early as 1947. In 1950, a report by the Victorian Statute Law Revision Committee on Limitation of Actions was presented to the Victorian Parliament120. Appended to the report was a draft Bill. That Bill was intended to 117 The 1955 Act, s 5(1)(a) (emphasis added). 118 Section 5(6). 119 In fact, the phrase "negligence, nuisance or breach of duty" seems to have appeared first in the Personal Injuries (Emergency Provisions) Act 1939 (UK), s 3(1)(b)(i) for the exclusion of entitlements to damages caused by a "war injury". In Billings v Reed [1945] KB 11 at 18-19, the English Court of Appeal held that, in such a context, the words "breach of duty" were wide enough to include trespass. 120 Victoria, Report from the Statute Law Revision Committee on the Limitation of Actions Bill, (1950). Kirby give effect to the Committee's recommendations. In cl 5(6) of that Bill, provision was made for the introduction of a three year limitation period for actions "for defamation of character β¦ physical injuries to the person or damage to property founded on tort or breach of a statutory duty". That Bill was not enacted. Yet it indicates that, before the troublesome phrase in issue in this appeal was introduced into the Act, those who drafted such legislation experienced no difficulty whatever in finding a universal formula (where that reflected their intention) to apply to actions "founded on tort" generally. This fact contradicts the need to twist the language in s 5(1A) to produce such a consequence. In fact, as other reasons show121, the troublesome phrase derives immediately from the report of the English Committee on the Limitation of Actions122 of July 1949, chaired by Lord Justice Tucker (known as the "Tucker Committee"). That report was principally addressed to consolidating and simplifying limitations law in the United Kingdom and replacing various particular limitation provisions applicable to actions for personal injuries against public authorities in that country. However, the price extracted for assimilating the liability of public authorities in "personal accident cases" was to restrict their application and to reduce the period of limitation that had hitherto applied in the general law from six years to three123 in actions for damages "for negligence, nuisance or breach of duty". The Tucker Committee's recommendations in this respect were given effect by the Law Reform (Limitation of Actions, &c) Act 1954 (UK)124. The phrase "negligence, nuisance or breach of duty" was deliberately copied in Victoria. The Attorney-General urged adoption of the United Kingdom limitation scheme, stating (in the manner of those times) that "[t]he Government considers that in this matter it is taking constructive action to bring the Victorian law into line with that which operates in England"125. Beyond this explanation, neither discussion nor elaboration upon the words chosen was advanced either in the Statute Law Revision Committee or in Parliament. It was a simple case of borrowing on English precedent. Where this happens, there would normally be 121 Joint reasons at [10]; reasons of Gummow J at [67]. 122 United Kingdom, Report of the Committee on the Limitation of Actions, (1949) Cmd 7740. 123 Stubbings [1993] AC 498 at 502-503. 124 Section 2(1), inserting a proviso into s 2 of the Limitation Act 1939 (UK). 125 Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 7 September Kirby good reasons for accepting the authoritative interpretation of the borrowed phrase adopted by the final court of the jurisdiction from which the provision was borrowed. Although earlier reasoning of trial and intermediate courts in England reflected the debates that this Court has witnessed in this appeal126, the authoritative, and unanimous, opinion of the House of Lords in Stubbings v Webb127 puts the controversy to rest, so far as the United Kingdom is concerned. That opinion was followed in Ireland, both by the High Court128 and by the Supreme Court129. To the question, asked by the joint reasons130, why Parliament would have made such a distinction in the case of intentional torts, the answer, as was noted in Stubbings131, is provided by the Tucker Committee's report. Lord Griffiths explained: "[T]he intention was to give effect to the Tucker recommendation that the limitation period in respect of trespass to the person was not to be reduced to three years but should remain at six years. The language of section 2(1) of the Act of 1954 is in my view apt to give effect to that intention, and cases of deliberate assault such as we are concerned with in this case are not actions for breach of duty within the meaning of section 2(1) of the Act of 1954." Because of the compromise that was hammered out in the Tucker Committee, a distinction was consciously drawn between accidents and deliberate conduct. This distinction was expressed by use of the discrimen "breach of duty". As a matter of policy, it may have been an imperfect or disputable distinction. In retrospect, we may see injustices in its application. This is always a risk where lines are drawn in the law. But there can be no doubt that the distinction was deliberate. For the Tucker Committee, the three year period was to apply to a number of causes of action loosely described as 126 The broad view was adopted in Letang v Cooper [1965] 1 QB 232 and Long v Hepworth [1968] 1 WLR 1299; [1968] 3 All ER 248. 127 [1993] AC 498 at 502-503. 128 Devlin v Roche unreported, High Court of Ireland (Morris P), 4 April 2001. See [2002] 2 IR 360 at 363. 129 Devlin [2002] 2 IR 360 at 367. 130 Joint reasons at [13]-[14]. 131 [1993] AC 498 at 508. Kirby "personal accident cases". Where the cause of action arose out of deliberate conduct, it fell outside the scope of the intended reforms. Thus, damages for trespass to the person, false imprisonment, malicious prosecution or defamation were intended by the Tucker Committee to remain within the pre-existing limitations regime132. They would enjoy a longer initial period for the commencement of proceedings. However, once that period had expired, there would be no opportunity for postponement of the bar. The thinking behind this was that, in the case of deliberate wrongs, the person injured would ordinarily be well aware that a wrong had occurred to them and that they had suffered some damage, the commencement of proceedings, whereas, in cases of breach of duty, the breach and any damage it may have caused might not be immediately known or appreciated133. The consequences might only be discovered years or decades later. That this was the reasoning behind the legal change can be seen in Lord Griffiths' exclamation in Stubbings134: thereby enlivening consideration of "I have the greatest difficulty in accepting that a woman who knows that she has been raped does not know that she has suffered a significant injury". The appellant complained, with some justification, that psychological reactions to deliberate wrongs, such as rape and assault, could, in exceptional cases, be delayed years or decades, just as for "personal accidents". Contemporary scientific evidence might be capable of proving this. However, this was not the hypothesis upon which the equivalent provisions were enacted in the United Kingdom. Because those provisions were copied in Victoria, the law applicable to this case must be taken to reflect the same thinking. It is subject to the same limitations. It would be completely ahistorical to attempt now to impose on the chosen words a different meaning when language, context and history combine to show that the intention was that the chosen words ("breach of duty") would apply only to some causes of action. Principle and policy: I am conscious that the outcome which I favour involves anomalies and could sometimes work an injustice on persons who claim late onset conditions causing damage years or decades after the initial intentional infliction of injury. I fully accept the purposive approach to the interpretation of 132 Stubbings [1993] AC 498 at 507-508. See also United Kingdom, House of Lords, Parliamentary Debates (Hansard), 20 May 1954 at 825. 133 Law Society v Sephton & Co [2006] 2 WLR 1091 at 1094-1095 [7]-[9], 1102 [41], 134 [1993] AC 498 at 506. Kirby legislation135. I also accept that legislation is not forever trapped in its history or in the intentions of the parliamentarians (in this case, originally, in Britain) who enacted the template statute against the background of the knowledge and objectives that were then known136. I do not approach this appeal on the basis that, because the House of Lords has interpreted the critical provisions one way, we are bound to follow. If, whatever the original intentions of the drafters, the words of s 5(1A) of the Act could fairly be read to respond to the type of claim brought by the appellant, I would do so. I realise that a number of judges in the past have so concluded. But I have endeavoured to show why I regard their conclusions as unpersuasive and wrong. It is true that the provisions of s 5(1A) (and of s 23A which uses the same language) were intended to be beneficial and protective. However, the question remains β how beneficial; and protective for whom? Ultimately, those questions are only answered by addressing the statutory text, read in context and against the background of the admissible materials relied on in this case. Although s 5(1A) of the Act is beneficial, its context is important for ascertaining its meaning. Unlike s 23A of the Act, s 5(1A) does not enliven a discretion to extend time, according to the justice of the circumstances of the particular case. It has a direct application, providing an entitlement to the extension if the preconditions are established. In this respect, it derogates, without any intermediate evaluation of competing justice considerations, from the ordinary entitlement of persons (perhaps very many years or decades later) to be free from the expense, worry and dislocation of claims that ordinarily would have long since been statute barred. For every plaintiff's benefit that is involved in such an extension of the limitation period, a considerable burden is cast on a defendant and the finality of legal rights and obligations generally is undermined. Consistency in statutory interpretation: Upon this first issue (the application of the sub-section) I would therefore apply precisely the same reasoning as the joint reasons have done in resolving the second issue (the ambit of the sub-section). In correcting the majority of the Court of Appeal on that issue137, the joint reasons observe that: "It is the text of s 5(1A) which is to be applied"138. They insist that "[t]he task of a court is to construe the language of 135 Palgo Holdings (2005) 221 CLR 249 at 264 [35]-[36]. 136 Coleman v Power (2004) 220 CLR 1 at 95-96 [245]-[246]; cf Ahmad v Inner London Education Authority [1978] QB 36 at 48 per Scarman LJ. 137 See Clark [2005] VSCA 107 at [80] cited in the joint reasons at [22]. See also Mazzeo v Caleandro Guastalegname & Co (2000) 3 VR 172 at 189 [43]-[44]. 138 Joint reasons at [26]. Kirby the statute"139. They state that extrinsic materials may be useful as an aid but ultimately the duty of a court is to give effect to the meaning of the words that Parliament has chosen to use140. They say that, if those words have an operation different from that which was "originally contemplated, then Parliament may reconsider the language β¦ but the courts must apply that language"141. I agree with each and every one of these observations. It is necessary to apply these criteria to the first, and not just to the second, issue in this appeal. One cannot pick and choose in the application of basic principles of statutory construction142. Consistency in approaches to statutory interpretation is a judicial obligation so as to reduce subjective elements. It is thus an attribute of the rule of law. When the same criteria are applied consistently to the first issue, they produce an outcome adverse to the appellant on that issue. I accept that interpretation of contested legal texts often presents difficult problems and evokes an art, not a mechanical science143. The interpretations of others are not to be criticised simply because, in a particular case, the decision- maker reaches a different conclusion144. It is precisely because the process of interpretation involves intuition145 and broader policy considerations that I have taken the trouble in these reasons to explain why I ultimately reach the same conclusion as Gummow J. It would have been easy for the Victorian Parliament to have provided that s 5(1A) applies to actions founded on tort generally. This is what the appellant seeks to make out of the words used in s 5(1A). But it is not what those words say. 139 Joint reasons at [26]. 140 Joint reasons at [26]. 141 Joint reasons at [27]. 142 R v Lavender (2005) 79 ALJR 1337 at 1350 [69]; 218 ALR 521 at 537-538; Clarke v Bailey (1993) 30 NSWLR 556 at 571. 143 Steyn, "The Intractable Problem of The Interpretation of Legal Texts", (2003) 25 Sydney Law Review 5 at 8. 144 Al-Kateb v Godwin (2004) 219 CLR 562 at 629-630 [191]. 145 Steyn, "The Intractable Problem of The Interpretation of Legal Texts", (2003) 25 Sydney Law Review 5 at 8. Kirby Conclusions, interveners and orders This conclusion relieves me of the necessity to consider the second issue, concerned with the ambit of s 5(1A). The joint reasons decide that issue favourably to the appellant146. Because that conclusion is founded on the "language of the statute β¦ according to its terms β¦ [and not] by reference to an assumption as to the kind of case in which it would be most likely to be invoked"147, it accords with the approach to statutory interpretation that I favour. Had that issue been presented for my decision, I tend to agree in the conclusion on it that the joint reasons have expressed. As explained in those reasons, this Court permitted the parties in a pending application for special leave to appeal against a decision of the Victorian Court of Appeal, Wright v Commonwealth of Australia148, to be heard in argument in the present appeal as to the meaning of s 5(1A) of the Act. The submissions of those parties were addressed to the second (ambit) issue. In any event, there are differences in the facts that make it undesirable to decide the interveners' case without the benefit of full submissions, based now on the reasoning that sustains the outcome of this appeal. I agree in the orders proposed by Gummow J. 146 Joint reasons at [28]. 147 Joint reasons at [29]. 148 [2005] VSCA 309. Hayne 123 HAYNE J. In 2002 the appellant commenced an action against the respondent in the County Court of Victoria. By her action the appellant claimed damages for personal injury allegedly suffered as a result of the respondent's assault upon her on two separate occasions in 1971. She was aged 16 years at the time of the alleged assaults. The appellant alleged that she suffered post-traumatic stress disorder of delayed onset and that she became aware of the connection between the assaults and the disorder only in 2000. Is her action for damages for trespass to the person statute barred? When the appellant commenced her action, the Limitation of Actions Act 1958 (Vic) ("the Act") contained three provisions of particular relevance. First, s 5(1)(a) provided that, subject to s 5(1A), "actions founded on tort including actions for damages for breach of a statutory duty" "shall not be brought after the expiration of six years from the date on which the cause of action accrued". The hinge about which that provision turned was "actions founded on tort". The second relevant provision is s 5(1A) (to which the general provision of s 5(1)(a) was made subject). Section 5(1A) dealt with: "[a]n action for damages for negligence nuisance or breach of duty (whether the duty exists by virtue of a contract or of provision made by or under a statute or independently of any contract or any such provision) where the damages claimed by the plaintiff consist of or include damages in respect of personal injuries consisting of a disease or disorder contracted by any person". The Act then provided that such an action "may be brought not more than six years from, and the cause of action shall be taken to have accrued on, the date on which the person first knows" two matters β (a) "that he has suffered those personal injuries" and (b) "that those personal injuries were caused by the act or omission of some person". The hinge about which s 5(1A) turned was "[a]n action for damages for negligence nuisance or breach of duty ... where the damages claimed by the plaintiff consist of or include damages in respect of personal injuries". The third provision of present relevance is s 23A. It turned about the same hinge as s 5(1A). That is, s 23A applied to "any action for damages for negligence nuisance or breach of duty ... where the damages claimed consist of or include damages in respect of personal injuries to any person". Section 23A permitted a court to extend the period within which an action on such a cause of action might be brought. The issues in this appeal concern the operation of s 5(1A). In particular, is the appellant's action an action of the kind with which that provision dealt: is it "[a]n action for damages for negligence nuisance or breach of duty"? Secondly, is the appellant's claim for damages which "consist of or include damages in Hayne respect of personal injuries consisting of a disease or disorder contracted by any person"? Both questions should be answered in the affirmative. The appeal should be allowed. As the joint reasons of Gleeson CJ, Callinan, Heydon and Crennan JJ record, there is a deal of relevant legislative history which lies behind the three provisions of the Act that have been mentioned: ss 5(1)(a), 5(1A) and 23A. The language used as the hinge in ss 5(1A) and 23A ("[a]n action for damages for negligence nuisance or breach of duty ... where the damages claimed by the plaintiff consist of or include damages in respect of personal injuries") appears in provisions intended to ameliorate the effect of the general bar provided in s 5(1)(a) in respect of "actions founded on tort". But that has not always been so. The language found in ss 5(1A) and 23A was originally used in s 5(6) of the Limitation of Actions Act 1955 (Vic) ("the 1955 Victorian Act"), a provision prescribing a shorter limitation period for the actions with which it dealt than the general limitation period of six years for actions founded on tort. And it was for this same purpose that the language had been used in the analogous English legislation149 considered by the House of Lords in Stubbings v Webb150, and was later to be used in equivalent Irish legislation151 considered by the Supreme Court of Ireland in Devlin v Roche152. The purpose of s 5(6) of the 1955 Victorian Act was to provide a shorter limitation period for some actions than would otherwise have applied. As an exception to a general rule, it may well have been open to argue that it should be narrowly construed. Yet, in the Victorian courts153, the provision was construed as engaged in actions alleging trespass to the person in which damages for personal injury were claimed. That construction of s 5(6) was not inevitable. The contrary conclusion was reached in Stubbings v Webb and Devlin v Roche. The effect of the construction adopted by the Victorian courts was to treat actions for damages for personal injury (however framed) as being subject to an abbreviated, three year, limitation period. Powerful arguments could have been, and can now be, mounted against construing the words "[a]n action for damages for negligence nuisance or breach of duty ... where the damages claimed by the plaintiff consist 149 Limitation Act 1980 (UK), the relevant provision of which derived from the Law Reform (Limitation of Actions, &c) Act 1954 (UK). 151 Statute of Limitations (Amendment) Act 1991 (Ir). 153 Kruber v Grzesiak [1963] VR 621; Hayward v Georges Ltd [1966] VR 202 at 204. Hayne of or include damages in respect of personal injuries" as embracing all forms of claims for damages for personal injuries. It may readily be acknowledged that trespass to the person is not easily accommodated by the expression "negligence nuisance or breach of duty" and that, if it is to be accommodated, the parenthetical amplification of "breach of duty" β "(whether the duty exists by virtue of a contract or of provision made by or under a statute or independently of any contract or any such provision)" β does not assist the construction that was favoured in Victoria, both before154 and after155 the House of Lords had reached the opposing view in Stubbings v Webb156. But for present purposes, the critical fact is that the received understanding in Victoria of the reach of s 5(6) was that it embraced all forms of action for damages for personal injury. It was in that setting that those who drafted what were to become ss 5(1A) and 23A drafted provisions intended to confer advantages on plaintiffs. Those who drafted those provisions used, as the hinge of each of the new provisions, words which had been construed as imposing a shorter limitation period on all those who claimed damages for personal injuries, no matter how they framed their claim. That is, those who drafted ss 5(1A) and 23A sought to make separate provision for personal injury claims. In the present matter, the respondent contended that s 5(1A) applies to only some kinds of claims for damages for personal injuries. On the respondent's construction, the sub-section would apply to claims for damages for personal injury framed as actions in negligence, nuisance, breach of contract or breach of statutory duty, but not if the action was framed as an action for trespass to the person. There is no evident legislative policy for distinguishing between claims in this way. Despite the power of the argument that contrasts "negligence nuisance or breach of duty" with "actions founded on tort including actions for damages for breach of a statutory duty", the better view of s 5(1A), understood in its historical context, is that it embraced all actions for damages for personal injury. For these reasons, and the reasons given by Gleeson CJ, Callinan, Heydon and Crennan JJ, the respondent's contention should be rejected. On the issue of whether the appellant's claim is a claim for damages which "consist of or include damages in respect of personal injuries", I agree with Gleeson CJ, Callinan, Heydon and Crennan JJ. 154 Kruber v Grzesiak [1963] VR 621; Hayward v Georges Ltd [1966] VR 202. 155 Mason v Mason [1997] 1 VR 325. Hayne The appeal should be allowed and the consequential orders made in the form proposed in the joint reasons. |
HIGH COURT OF AUSTRALIA AND PLAINTIFF MINISTER FOR IMMIGRATION AND BORDER PROTECTION DEFENDANT Wei v Minister for Immigration and Border Protection [2015] HCA 51 17 December 2015 ORDER The time for the making of the application be extended to 8 January A writ of certiorari issue quashing the decision made by the delegate of the defendant on 20 March 2014 to cancel the plaintiff's student visa. A writ of prohibition issue preventing the defendant, or his agents, employees or delegates, from acting on or giving effect to or enforcing the decision of the delegate. The defendant pay the plaintiff's costs of the application other than those costs which were the subject of the order for costs made by Gageler J on 20 August 2015. Representation S B Lloyd SC with L J Karp for the plaintiff (instructed by Ren Zhou Lawyers) G R Kennett SC with R S Francois for the defendant (instructed by Clayton Utz Lawyers) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Wei v Minister for Immigration and Border Protection Migration β Visa cancellation β Migration Act 1958 (Cth), s 116(1)(b) provides that Minister may cancel visa if satisfied that visa holder has not complied with condition of visa β Where delegate cancelled plaintiff's visa on satisfaction that plaintiff had breached visa condition β Where delegate's satisfaction formed by process of fact-finding tainted by non-compliance of third party with imperative statutory duty β Whether delegate failed to make obvious inquiry as to critical fact β Whether decision affected by jurisdictional error. Migration β Original jurisdiction of High Court β Where plaintiff's application for remedy made outside time limit in Migration Act 1958 (Cth), s 486A(1) β Operation of s 486A. Words and phrases β "extension of time", "imperative duty", "jurisdictional error". Constitution, s 75(v). Education Services for Overseas Students Act 2000 (Cth), s 19. Migration Act 1958 (Cth), ss 116(1)(b), 119(1), 486A. Introduction This is an application for prohibition and certiorari which has been made in the original jurisdiction of the High Court under s 75(v) of the Constitution by the filing of an application for an order to show cause in accordance with the High Court Rules 2004 (Cth). Following agreement by the parties as to the facts, the application for an order to show cause has been referred for hearing by a Full Court. The application relates to a decision made by a delegate of the Minister for Immigration and Border Protection to cancel the plaintiff's student visa under s 116(1)(b) of the Migration Act 1958 (Cth). The delegate made that decision on the basis that he was satisfied that the plaintiff had not complied with a condition of the visa. The relevant condition was that the plaintiff be enrolled in a course of education provided by an institution registered under the Education Services for Overseas Students Act 2000 (Cth) ("the ESOS Act"). Having been made, or purportedly made, under s 116(1)(b), the decision of the delegate is either a "privative clause decision" or a "purported privative clause decision", and is also a "migration decision", within the meaning of the Migration Act1. The effect of s 474 is that neither prohibition nor certiorari can issue in relation to the decision unless the decision can be shown to have been affected by "jurisdictional error"2. The effect of s 486A is that the application for prohibition and certiorari was required to be made within a specified period of the decision unless this Court makes an order under that section extending that period. The timing of the filing of the application for an order to show cause means that the operation of s 486A will need to be addressed. The operation of s 486A is most conveniently addressed after consideration of the merits of the plaintiff's argument that the decision was affected by jurisdictional error. The merits of that argument are most conveniently addressed after reference first to the statutory scheme and then to the agreed facts. 1 Sections 5(1), 5E and 474(2) of the Migration Act. 2 Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476 at 506 [76]-[77]; [2003] HCA 2. Statutory scheme The Migration Act and the ESOS Act form an integrated statutory scheme. The relevant operation of that scheme cannot adequately be understood by reference solely to the Migration Act and the ESOS Act. It is necessary also to refer to the Migration Regulations 1994 (Cth) and the Education Services for Overseas Students Regulations 2001 (Cth) ("the ESOS Regulations"), made under those Acts. The principal objects of the ESOS Act are expressed to include complementing Australia's migration laws by ensuring that institutions providing courses of education or training to holders of student visas collect and report information relevant to the administration of the law relating to "student visas"3. The expression "student visa", for the purposes of the ESOS Act, has the meaning given in the ESOS Regulations4. The meaning given in the ESOS Regulations, subject to immaterial exceptions, brings within the expression as used in the ESOS Act specified subclasses of student visa described in the Migration Regulations5. The ESOS Act requires institutions which provide courses of education or training to holders of student visas ordinarily to be registered6. The Migration Regulations make it a standard condition of each of the subclasses of student visa specified in the ESOS Regulations that "the holder is enrolled in a registered course"7. The expression "registered course" is defined relevantly to mean a course of education or training provided by an institution registered under the ESOS Act8. Section 19 of the ESOS Act relevantly requires each institution that is a registered provider to give to the Secretary of the Department of Education and Training specified information about each holder of a student visa who is 3 Section 4A(c) of the ESOS Act, read with the definitions of "course", "overseas student" and "provider" in s 5 of the ESOS Act. 4 Section 5 of the ESOS Act. 5 Regulation 1.03 of the ESOS Regulations. 6 Section 8(1)(e) of the ESOS Act. 7 Clause 573.611(a) in Sched 2, and condition 8202(2)(a) in Sched 8, to the Migration Regulations. 8 Regulation 1.03 of the Migration Regulations. enrolled in a course of education or training provided by that registered provider9. The required information relevantly includes information that is to be given within 14 days of enrolment which uniquely identifies the student and the course in which the student is enrolled10. The information which is required to be so given concerning enrolment is referred to in the ESOS Regulations as "confirmation of enrolment"11. The information which each registered provider is required to give to the Secretary under s 19 of the ESOS Act must be given in a form approved by the Secretary, which may be electronic12. The Secretary approved for that purpose an electronic database which was developed by what is now the Department of Education and Training in association with what is now the Department of Immigration and Border Protection. The approved electronic database is known as the Provider Registration and International Student Management System ("PRISMS"). Non-compliance by a registered provider with the requirement of s 19 of the ESOS Act that it upload confirmation of enrolment onto PRISMS is a criminal offence of strict liability13. Non-compliance by a registered provider with that requirement is also capable of resulting in suspension or cancellation of the provider's registration14. Section 175 of the ESOS Act permits the Secretary of the Department of Education and Training, for purposes which include "promoting compliance with the conditions of a particular student visa or visas, or of student visas generally" and "facilitating the monitoring and control of immigration", to give information obtained or received for the purposes of the Act to "an agency of the Commonwealth ... that is responsible for or otherwise concerned with immigration"15. In practice, the Secretary of the Department of Education and 9 Section 19(1) of the ESOS Act. 10 Section 19(1)(a) and (b) of the ESOS Act, read with reg 3.01 of the ESOS Regulations. 11 Regulation 1.03 of the ESOS Regulations. 12 Section 19(3) of the ESOS Act. 13 Section 19(5) and (6) of the ESOS Act. 14 Part 6 of the ESOS Act. 15 Section 175(1)(c), (d) and (e) of the ESOS Act. Training gives information received from registered providers under s 19 of the ESOS Act to officers of the Department of Immigration and Border Protection by allowing those officers access to PRISMS, from which the information can be downloaded. Section 116(1)(b) of the Migration Act provides that, subject to immaterial exceptions, "the Minister may cancel a visa if he or she is satisfied that ... its holder has not complied with a condition of the visa". If the Minister is considering cancelling a visa under s 116(1)(b), the Minister is required by s 119(1) of the Migration Act to notify the holder that there appear to be grounds for cancelling it, giving particulars of those grounds and of the information because of which the grounds appear to exist, and inviting the holder to show within a specified time that those grounds do not exist or there is a reason why the visa should not be cancelled. The visa holder is to be notified in one of the ways prescribed by regulation16, which include notifying the holder in a document sent to the holder's last residential address known to the Minister or in a document transmitted by email to the last email address known to the Minister17. That express requirement for notification and prescription of the means of notification "is taken to be an exhaustive statement of the requirements of the natural justice hearing rule" in relation to the matters with which they deal18. If the visa holder does not respond to the invitation within the specified time, the Minister is permitted to make the decision about cancellation without taking any further action about the information19. A decision by the Minister or his or her delegate to cancel a visa under s 116(1)(b) is reviewable on its merits by the Migration Review Tribunal20, but only on an application lodged with the Tribunal within a specified period21. 16 Section 119(2) of the Migration Act. 17 Regulation 2.55 of the Migration Regulations. 18 Section 118A(1) of the Migration Act. 19 Section 123 of the Migration Act. 20 Section 338(3) of the Migration Act. 21 Section 347(1)(b)(i) of the Migration Act. Facts The plaintiff is a citizen of the People's Republic of China. He is now 22 years old. He first travelled to Australia on a student visa when he was 15 years old. Having completed his secondary schooling in Australia, he went on to enrol in a course of study known as the "Foundation Program" provided by Macquarie University, a registered provider under the ESOS Act. The plaintiff was subsequently granted a Student (Temporary) (Class TU) Higher Education Sector (Subclass 573) visa, a student visa for the purposes of the ESOS Act. The plaintiff was in fact enrolled in the Foundation Program between 24 June 2013 and 13 June 2014. Unfortunately, confirmation of that enrolment was not recorded in PRISMS. It is to be inferred, on the balance of probabilities, that the confirmation of that enrolment was not recorded in PRISMS because Macquarie University failed to perform the obligation imposed on it by s 19 of the ESOS Act to upload the relevant information. On the basis of outdated information which was recorded in PRISMS, officers of the Department of Immigration and Border Protection formed the view in early 2014 that the plaintiff was not then enrolled in a registered course. A letter dated 3 February 2014 was sent by registered post to the plaintiff's last residential address known to the Department notifying him of an intention to consider cancelling his visa because PRISMS indicated that he had not been enrolled in a registered course since 26 July 2013. The letter was returned as unclaimed. A second letter, dated 25 February 2014, was sent to another address, obtained as a result of making a telephone call to Macquarie University. That second letter suffered the same fate. In the period between the sending of the first and second letters, an officer of the Department of Immigration and Border Protection succeeded in telephoning the plaintiff to ask for his then current address. The plaintiff responded "I'm not telling you that" and immediately hung up. According to the plaintiff, that was because he did not believe the caller's statement that he was from the Department. A little later, the same officer attempted to send an email to the plaintiff attaching a further copy of the letter dated 3 February 2014. The officer had the plaintiff's correct email address but, because of a typographical error by the officer, the email was sent to the wrong email address. The upshot was that, despite formal compliance with the requirement for notification under s 119(1) of the Migration Act, the plaintiff never in fact received notice that consideration was being given to cancelling his visa. The time for responding to the notification contained in the letter of 25 February 2014 having expired, a delegate of the Minister made a decision on 20 March 2014 to cancel the plaintiff's visa under s 116(1)(b) of the Migration Act for non-compliance with the condition of the visa that he be enrolled in a registered course. The parties are agreed that the decision was made because the delegate was satisfied, by reference to PRISMS, that the plaintiff had not been enrolled in a registered course since 26 July 2013. Written notice of the decision, and of the reasons for it, was set out in a letter which the delegate sent by registered post to the plaintiff on the same day. That letter too was returned unclaimed. The plaintiff discovered that a decision had been made to cancel his visa only on 2 October 2014. The following day, he lodged an application for review of the decision with the Migration Review Tribunal. The Tribunal decided on 5 December 2014 that it did not have jurisdiction to review the decision, because the application was lodged too late. The plaintiff filed his application for an order to show cause in this Court on 8 January 2015. Jurisdictional error Jurisdictional error, in the sense relevant to the availability of relief under s 75(v) of the Constitution in the light of s 474 of the Migration Act, consists of a material breach of an express or implied condition of the valid exercise of a decision-making power conferred by that Act. There is no reason in principle why jurisdictional error should be confined to error or fault on the part of the decision-maker. Statutory provisions conditioning the validity of exercises of decision- making powers were described by Dixon J in R v Metal Trades Employers' Association; Ex parte Amalgamated Engineering Union, Australian Section as imposing "imperative duties or inviolable limitations or restraints"22. As explained by Gleeson CJ in Plaintiff S157/2002 v The Commonwealth23: "To describe a duty as imperative, or a restraint as inviolable, is to express the result of a process of construction, rather than a reason for adopting a particular construction; but it explains the nature of the judgment to be made." 22 (1951) 82 CLR 208 at 248; [1951] HCA 3. 23 (2003) 211 CLR 476 at 489 [21]. His Honour went on to explain that "[b]ecause what is involved is a process of statutory construction ... the outcome will necessarily be influenced by the particular statutory context"24. The analysis of Gleeson CJ in Plaintiff S157/2002 shows that, notwithstanding the note of caution sounded in Project Blue Sky Inc v Australian Broadcasting Authority25, there remains utility in maintaining the traditional terminological distinction between an "imperative" (or "mandatory") duty on the one hand, and a "directory" duty on the other hand, for the purpose of describing whether or not a material breach of an antecedent statutory duty results in an invalid exercise of a decision-making power. That distinction was explained in Clayton v Heffron when it was said26: "Lawyers speak of statutory provisions as imperative when any want of strict compliance with them means that the resulting act, be it a statute, a contract or what you will, is null and void. They speak of them as directory when they mean that although they are legal requirements which it is unlawful to disregard, yet failure to fulfil them does not mean that the resulting act is wholly ineffective, is null and void." Consistently with Project Blue Sky Inc, what is critical to be borne in mind is that assignation of one or other of those labels to a particular statutory duty imposed by a particular statutory provision marks "the end of the inquiry, not the beginning"27. To label a particular statutory duty either "imperative" or "directory" is to express the conclusion of a process of statutory construction. Central to that process of statutory construction is an inquiry as to whether the statutory purpose of the duty, when considered within the particular statutory scheme of which it forms part, would or would not be advanced by holding an exercise of decision-making power affected by breach of the duty to be invalid28. Considerations bearing on an inquiry of that nature have long been recognised to include the justice and convenience of holding that a breach of the 24 (2003) 211 CLR 476 at 489 [21]. 25 (1998) 194 CLR 355 at 389-391 [92]-[93]; [1998] HCA 28. 26 (1960) 105 CLR 214 at 247; [1960] HCA 92. 27 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 28 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 duty invalidates an exercise of the decision-making power. Thus, in Montreal Street Railway Company v Normandin29, in which the issue was whether the verdict of a civil jury was to be set aside on account of non-compliance by a designated court officer with a statutory duty annually to revise a list of jurors, the Privy Council said: "When the provisions of a statute relate to the performance of a public duty and the case is such that to hold null and void acts done in neglect of this duty would work serious general inconvenience, or injustice to persons who have no control over those entrusted with the duty, and at the same time would not promote the main object of the Legislature, it has been the practice to hold such provisions to be directory only, the neglect of them, though punishable, not affecting the validity of the acts done." The same considerations of justice and convenience tell in favour of the conclusion that a duty is imperative where a material breach would work to the peculiar disadvantage of an individual. The duty with which we are presently concerned is that imposed by s 19 of the ESOS Act on a registered provider to upload onto PRISMS confirmation of enrolment of a person holding a student visa. Within the statutory scheme, there is little difficulty in concluding that the statutory purpose of that duty would be advanced by holding that an exercise of the power to cancel a visa conferred by s 116(1)(b) of the Migration Act that is affected by a breach of that duty is invalid. The statutory scheme establishes PRISMS as a repository of information available to be taken into account in decision-making under the Migration Act, and makes the requirement of s 19 of the ESOS Act for a registered provider to upload information onto PRISMS the means by which the integrity of that information is sought to be ensured. That scheme furthers the express statutory object of the ESOS Act: to complement Australia's migration laws by ensuring that institutions providing courses of education or training to holders of student visas collect and report information relevant to the administration of the law relating to student visas. The injustice to the holder of the student visa of the power to cancel that visa being exercised on the basis of incorrect information downloaded from PRISMS is manifest. The facts of the present case well illustrate that such injustice is not necessarily mitigated by either the requirement to give notice of the decision or the availability of merits review. 29 [1917] AC 170 at 175. The requirement of s 19 of the ESOS Act that a registered provider upload onto PRISMS confirmation of enrolment of a person holding a student visa is therefore properly characterised as an imperative duty, in the sense that material non-compliance with the requirement will result in an invalid exercise of the power to cancel a visa conferred by s 116(1)(b) of the Migration Act. The "satisfaction" required to found a valid exercise of the power to cancel a visa conferred by s 116(1)(b) of the Migration Act is a state of mind. It is a state of mind which must be formed reasonably and on a correct understanding of the law30. Equally, it is a state of mind which must be untainted by a material breach of any other express or implied condition of the valid exercise of that decision-making power. The imperative duty imposed on a registered provider by s 19 of the ESOS Act is such a condition. Here, the delegate's satisfaction that the plaintiff was in breach of the visa condition that he be enrolled in a registered course was formed by a process of fact-finding which was tainted by Macquarie University's antecedent breach of its duty, under s 19 of the ESOS Act, to upload onto PRISMS confirmation of the plaintiff's then current enrolment. The delegate reached that satisfaction because the delegate found as a fact that the plaintiff was not enrolled in a registered course. The delegate found that fact on the basis of information contained in PRISMS. That finding was wrong because the information contained in PRISMS was wrong. The information contained in PRISMS was wrong because of Macquarie University's failure to perform its imperative statutory duty. The case is one of jurisdictional error. Extension of time Section 486A of the Migration Act, as amended after Bodruddaza v Minister for Immigration and Multicultural Affairs31 and as it currently stands, provides in part: "(1) An application to the High Court for a remedy to be granted in exercise of the court's original jurisdiction in relation to a migration decision must be made to the court within 35 days of the date of the migration decision. 30 Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 at 651-654 [130]-[137]; [1999] HCA 21, citing R v Connell; Ex parte The Hetton Bellbird Collieries Ltd (1944) 69 CLR 407 at 430; [1944] HCA 42 and Buck v Bavone (1976) 135 CLR 110 at 118-119; [1976] HCA 24. 31 (2007) 228 CLR 651; [2007] HCA 14. The High Court may, by order, extend that 35 day period as the High Court considers appropriate if: an application for that order has been made in writing to the High Court specifying why the applicant considers that it is necessary in the interests of the administration of justice to make the order; and the High Court is satisfied that it is necessary in the interests of the administration of justice to make the order." The "date of the migration decision" for the purposes of the present case is the date of the written notice of the decision32: 20 March 2014. The plaintiff acknowledges that his application for prohibition and certiorari was made outside the period of 35 days referred to in s 486A(1) and has sought in his application for an order to show cause an order under s 486A(2) extending that period. His written submissions specify why the plaintiff considers that it is necessary in the interests of the administration of justice to make the order. We are satisfied that it is necessary in the interests of the administration of justice to make the order which the plaintiff seeks under s 486A(2) extending the period for the making of the application. We have already concluded that the decision of the delegate of the Minister was affected by jurisdictional error. We are also satisfied that the plaintiff's delay in making the application has been satisfactorily explained. For much of the period of the delay, the plaintiff was simply unaware of the decision. When he did become aware of it, he acted expeditiously in attempting to challenge the decision by immediately seeking to review the decision on its merits in the Migration Review Tribunal. He filed his application for an order to show cause in this Court within 35 days of the decision of the Tribunal that it lacked jurisdiction. The Minister has suffered no prejudice by reason of the delay which has occurred. We therefore consider it appropriate to make an order under s 486A(2). In the course of the hearing, a question was raised as to whether that order should extend the period for the making of the application to the date of the filing of the application for an order to show cause, or instead to the date of that hearing. The appropriate order is one which extends the period for the making of the application to the date on which the application for an order to show cause was filed. 32 Section 486A(3), read with s 477(3)(d) of the Migration Act. That is consistent with the prior practice of single Justices of the High Court33. More importantly, it reflects the nature of s 486A as a procedural provision which regulates the exercise of the original jurisdiction conferred by s 75(v) of the Constitution. Section 486A does not, and could not, impose a condition precedent to the invocation of that jurisdiction. Section 486A does not prevent the making of an application under s 75(v) of the Constitution. The application is made by filing an application for an order to show cause in accordance with the High Court Rules. Section 486A operates rather to regulate the procedure applicable to the exercise of the jurisdiction that has been invoked by the making of such an application where the application has not been made within 35 days of the date of the decision which the plaintiff seeks to challenge. It does so by making the grant of the relief sought in the application conditional on an order extending the period for the making of the application. The period of the extension need only be to the date on which the application for an order to show cause has in fact already been filed. In parlance which derives from the historical practice of the Court of Chancery34, the order is one which can and should be made nunc pro tunc. Orders The following orders should be made: The time for the making of the application be extended to 8 January (2) A writ of certiorari issue quashing the decision made by the delegate of the defendant on 20 March 2014 to cancel the plaintiff's student visa. (3) A writ of prohibition issue preventing the defendant, or his agents, employees or delegates, from acting on or giving effect to or enforcing the decision of the delegate. (4) The defendant pay the plaintiff's costs of the application other than those costs which were the subject of the order for costs made by Gageler J on 20 August 2015. 33 Eg Ahmed v Minister for Immigration and Citizenship [2011] HCATrans 035; SZTVL v Minister for Immigration and Border Protection [2014] HCATrans 010; Zhang v Minister for Immigration and Border Protection [2015] HCATrans 244. 34 See Emanuele v Australian Securities Commission (1997) 188 CLR 114 at 131- 132; [1997] HCA 20. Nettle NETTLE J. I have had the considerable advantage of reading in draft the reasons for judgment of Gageler and Keane JJ, but I am unable to agree with their Honours that, simply because the University failed to provide PRISMS with accurate information concerning the status of the plaintiff's enrolment, the Minister's delegate made a jurisdictional error in basing the decision to cancel the plaintiff's student visa on the consequently inaccurate information in PRISMS. As Gageler and Keane JJ observe, at relevant times the University was under an obligation under s 19 of the ESOS Act to give the Secretary of the Department of Education and Training prescribed information in relation to an accepted student and it was an offence to fail to comply with that obligation. As their Honours also observe, at relevant times s 175 of the ESOS Act empowered the Secretary to share that information with, inter alia, the Department of Immigration and Border Protection. Neither the ESOS Act, however, nor the Migration Act, nor any regulation made under those Acts required the Minister's delegate, when deciding whether to cancel the student visa under s 116(1)(b) of the Migration Act, to have regard to PRISMS alone; still less to base the decision on PRISMS. The legislative scheme did not expressly or impliedly accord any presumptive correctness or weight to information in PRISMS. The scheme of the legislation appears rather to have been that, in the case of a decision under s 116(1)(b), PRISMS was to be available as one of the sources of information to which the Minister's delegate could have regard. The Secretary's sharing of information in PRISMS with the Department of Immigration and Border Protection can be seen as having facilitated administrative convenience and efficiency. But in each case it was up to the Secretary and not a necessary consequence of the duty on registered providers to provide prescribed information to the Secretary. Further, given the nature of the information involved, and the processes by which it may be supposed it would ordinarily be obtained from registered providers and overseas students, it is self-evident that, even with the best will in the world and the most assiduous attention to compliance with s 19 of the ESOS Act, there would be errors made in the compilation of PRISMS from time to time. Hence, the recognition in s 119 of the Migration Act of the need to allow a student in the position of the plaintiff the opportunity to correct such a mistake by appropriate submission to the Minister. There is also a degree of uncertainty about the extent to which a decision to cancel a visa should be conceived of as "tainted" or "affected" by an error in PRISMS. In a case of this kind, where there is only one fact to be determined by a binary process of fact-finding based primarily on PRISMS, it might not appear problematic that an incorrect statement of the fact in PRISMS should be conceived of as so fundamentally tainting or affecting the decision as to afflict it with jurisdictional error. But what of a case where a decision is based on an evaluation of a multitude of facts of which, say, only one is an incorrect entry in PRISMS? If reliance upon any incorrect information in PRISMS constituted a Nettle jurisdictional error it would follow that any decision which took into account any information that was wrongly entered in PRISMS would be vitiated by jurisdictional error, unless, in the circumstances of the particular case, it were clear that taking that information into account could not possibly have made any difference to the decision. According, however, to established principle, an error of fact is ordinarily an error made in the exercise of jurisdiction and is not ultra vires35. And, in this case, because the basis of cancellation was the satisfaction of the Minister's delegate of failure to comply with a condition of the visa, whether the plaintiff was enrolled was a question of fact36. That being so, it should not be accepted that the delegate's taking into account of the wrongly entered information in PRISMS rendered the decision ultra vires. It is more in keeping with principle to treat the fact of some or even total reliance on incorrect information in PRISMS as an error of fact made in the exercise of jurisdiction. Significantly, the statutory scheme accounted for the possibility of such errors, albeit, as this case demonstrates, imperfectly, by requiring the decision-maker to notify the visa- holder of the proposed ground for cancellation and inviting comment37 and by providing for merits review in the Migration Review Tribunal38. It does not follow, however, that there is nothing which can be done for the plaintiff. In Prasad v Minister for Immigration and Ethnic Affairs39, Wilcox J held that, although it is not enough to establish jurisdictional error on the part of an administrative decision-maker that the court may consider that the sounder course for the decision-maker would have been to make further inquiries, where it is obvious that material is readily available which is centrally relevant to the decision to be made, and the decision-maker proceeds to make the decision without obtaining that information, the decision may be regarded as so unreasonable as to be beyond jurisdiction. In Ex parte Helena Valley/Boya Association (Inc)40, Ipp J, sitting as a member of the Full Court of the Supreme 35 Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 355-356 per Mason CJ; [1990] HCA 33. 36 Cf Avon Downs Pty Ltd v Federal Commissioner of Taxation (1949) 78 CLR 353; [1949] HCA 26; Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002 (2003) 77 ALJR 1165 at 1168 [8]-[9] per Gleeson CJ; 198 ALR 59 at 61-62; [2003] HCA 30. 37 Migration Act, ss 119-121. 38 Migration Act, Pt 5, Div 3. 39 (1985) 6 FCR 155 at 169-170. 40 (1990) 2 WAR 422 at 445-446. Nettle Court of Western Australia, applied Wilcox J's reasoning in Prasad in order to conclude that a local council had failed properly to apply its mind to the question which needed to be decided in determining whether to approve a planning application. In Minister for Immigration and Ethnic Affairs v Teoh41, Mason CJ and Deane J expressly approved of Wilcox J's reasoning in Prasad and of its application in appropriate cases. And in Minister for Immigration and Citizenship v Le42, Kenny J surveyed the course of authority following Prasad and held that it was legally unreasonable for the Migration Review Tribunal to fail to make an obvious inquiry. Based on those decisions, in Minister for Immigration and Citizenship v SZIAI43, French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ similarly concluded that there may be circumstances in which a merits reviewer's failure to make an obvious inquiry about a critical fact, the existence of which is easily ascertained, can be seen to supply a sufficient link to the outcome of review to constitute a constructive failure to exercise jurisdiction. In this case, the delegate was put on inquiry. As a result of the return of his letter of 3 February 2014 as "unclaimed", he knew that the address shown in the records of the Department of Immigration and Border Protection as being the plaintiff's address was not the plaintiff's address. As a result of the return of his letter of 25 February 2014, he also knew that the address of the plaintiff supplied by the University was unlikely to be the plaintiff's address. Inasmuch as the delegate knew that none of the communications which he had sent to the plaintiff had reached the plaintiff, the delegate knew that the plaintiff did not know that the Minister proposed to cancel the visa. As a result, the delegate also knew that the plaintiff would not have the opportunity, which ss 119-121 of the Migration Act contemplated that the plaintiff should have, of demonstrating to the Minister why the supposed ground of cancellation did not exist. Thus, until the prescribed time for responding under s 121(2) expired, it would have been apparent to the delegate, or it should have been, that it was more than usually important for the delegate to be as certain as reasonably possible that the proposed ground of cancellation existed, and thus for the delegate to be as certain as reasonably possible that the plaintiff was not in fact enrolled at the University. As already mentioned, there was nothing in the relevant legislation that provided that PRISMS was to be treated as a conclusive record of enrolment. Hence, one obvious way of ensuring, or at least being more certain, that the plaintiff had ceased to be enrolled was to make a telephone inquiry of the University, the direct and authoritative source of confirmation of the plaintiff's enrolment, just as the delegate had done on 20 February 2014 to check the 41 (1995) 183 CLR 273 at 289-290; [1995] HCA 20. 42 (2007) 164 FCR 151 at 174-179 [64]-[79]. 43 (2009) 83 ALJR 1123 at 1129 [25]; 259 ALR 429 at 436; [2009] HCA 39. Nettle plaintiff's address. Given the criticality of the fact that the plaintiff was enrolled at the University, the relative ease with which that fact could have been ascertained, the obviousness of the means of doing so β by picking up the telephone and requesting the University to check whether the plaintiff's enrolment status as shown in PRISMS was in fact correct β and the clear link between the delegate's failure to make that inquiry and the delegate's determination to cancel the visa, I consider this to be a case in which the delegate's failure amounted to a constructive failure to exercise jurisdiction and therefore a jurisdictional error. For those reasons, I agree with Gageler and Keane JJ that the decision to cancel the plaintiff's student visa should be quashed. I also agree with their Honours' reasons and conclusions regarding the operation of s 486A of the Migration Act. Accordingly, I, too, would make orders in the terms which their Honours propose. |
HIGH COURT OF AUSTRALIA MINISTER FOR HOME AFFAIRS APPLICANT AND RESPONDENT Minister for Home Affairs v Benbrika [2021] HCA 4 Date of Hearing: 10 December 2020 Date of Judgment: 10 February 2021 ORDER The question reserved for the consideration of the Court of Appeal of the Supreme Court of Victoria and removed into this Court pursuant to s 40 of the Judiciary Act 1903 (Cth) is answered as follows: Is all or any part of Division 105A of the Criminal Code (Cth) and, if so, which part, invalid because the power to make a continuing detention order under section 105A.7 of the Code is not within the judicial power of the Commonwealth and has been conferred, inter alia, on the Supreme Court of Victoria contrary to Chapter III of the Commonwealth Constitution? The respondent is to pay the applicant's costs. Representation A P Berger QC for the applicant (instructed by Australian Government Solicitor) R Merkel QC and C J Tran with E S Jones for the respondent (instructed by Doogue + George Lawyers) S P Donaghue QC, Solicitor-General of the Commonwealth, with M A Hosking for the Attorney-General of the Commonwealth, intervening (instructed by Australian Government Solicitor) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Minister for Home Affairs v Benbrika Constitutional law (Cth) β Judicial power of Commonwealth β Jurisdiction vested in State courts β Where Div 105A of Criminal Code (Cth) empowered Supreme Court of State or Territory, on application of Minister for Home Affairs, to order that person convicted of terrorist offence be detained in prison for further period after expiration of sentence of imprisonment pursuant to continuing detention order ("CDO") β Whether all or any part of Div 105A of Criminal Code invalid because power to make CDO not within judicial power of Commonwealth having been conferred, inter alia, on Supreme Court of Victoria contrary to Ch III of Constitution β Whether scheme for preventative detention of terrorist offender capable of falling within exception to principle articulated in Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1 that involuntary detention of citizen in custody by the State is penal or punitive in character and exists only as incident of exclusively judicial function of adjudging and punishing criminal guilt β Whether Div 105A of Criminal Code directed to ensuring safety and protection of community from risk of harm posed by threat of terrorism. Words and phrases β "analogy", "apprehended conduct", "Ch III court", "continuing detention order", "exception to the Lim principle", "involuntary detention", "judicial function of adjudging and punishing criminal guilt", "judicial power of the Commonwealth", "less restrictive measure", "non-punitive purpose", the "orthodox community from harm", "protective punishment", "protective purpose", "punitive purpose", "restriction on liberty", "separation of powers", "serious Part 5.3 offence", "Supreme Court of a State or Territory", "terrorism", "terrorist act", "terrorist offence", "terrorist organisation", "unacceptable risk". judicial process", "preventative detention", "protection of Constitution, Ch III. Criminal Code (Cth), Div 105A. KIEFEL CJ, BELL, KEANE AND STEWARD JJ. Division 105A of the Criminal Code (Cth) ("the Code") empowers the Supreme Court of a State or Territory, on the application of the Minister for Home Affairs ("the Minister"), to order that a person who has been convicted of a terrorist offence be detained in prison for a further period after the expiration of his or her sentence of imprisonment. The scheme is comparable to the Dangerous Prisoners (Sexual Offenders) Act 2003 (Qld) ("the Qld Act"), which empowers the Supreme Court of Queensland to order the continuing detention of persons convicted of serious sexual offences. The validity of the Qld Act survived challenge on Kable1 grounds in Fardon v Attorney-General (Qld)2. Fardon allows that, consistently with its position within the integrated Australian court system, the Supreme Court of a State or Territory may commit a person to prison in the exercise of State judicial power after determining, by orthodox judicial process, that the person is a serious danger to the community because there is an unacceptable risk that he or she would commit a serious sexual offence if released from custody. The question in this proceeding is whether the Supreme Court of a State or Territory may commit a person to prison in the exercise of federal judicial power after determining, by orthodox judicial process, that the person presents an unacceptable risk of committing a terrorist offence if released from custody. For the reasons to be given, the answer is that it may. Procedural history On 15 September 2008, the respondent, Mr Benbrika, was convicted by the Supreme Court of Victoria of two terrorist offences. The offences were alleged to have occurred between July 2004 and November 2005. The first offence involved the intentional membership of a terrorist organisation knowing that the organisation was a terrorist organisation3. The offence has a maximum penalty of imprisonment for ten years. The second offence involved intentionally directing the activities of a terrorist organisation knowing the organisation to be a terrorist 1 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51. (2004) 223 CLR 575. 3 Criminal Code (Cth), s 102.3(1). organisation4. This offence has a maximum penalty of imprisonment for 25 years. Each offence is a "serious Part 5.3 offence"5. The Crown case against Mr Benbrika at his trial was that he and others were members of a Melbourne-based terrorist organisation that was fostering or preparing the doing of a terrorist act in Australia or overseas with the intention of causing death or serious physical harm in order to advance the cause β taught by Mr Benbrika and accepted by the other members of the organisation who had taken an oath of allegiance to him β that they were under a religious duty to pursue violent jihad against non-believers6. The Crown case included evidence that, as part of the instruction in violent jihad that Mr Benbrika provided, he had taught other members of the organisation that death in pursuit of "Allah's cause" would result in martyrdom and thus entry into paradise7. Mr Benbrika was sentenced to an effective term of imprisonment of 15 years with a non-parole period of 12 years. Mr Benbrika was not granted parole. His sentence expired on 5 November 2020. On 4 September 2020, the Minister commenced proceedings in the Supreme Court of Victoria, seeking a continuing detention order in respect of Mr Benbrika to be in force from the date of its making until 5 November 2023 and an interim detention order to be in force from 5 November 2020. On 27 October 2020, Tinney J made an interim detention order8. On 24 December 2020, his Honour made an order that Mr Benbrika be subject to a continuing detention order to be in force for a period of three years9. On 2 October 2020, Mr Benbrika applied for an order reserving the following question for the consideration of the Court of Appeal of the Supreme Court of Victoria10: 4 Criminal Code, s 102.2(1). 5 Criminal Code, s 105A.2. 6 Benbrika v The Queen (2010) 29 VR 593 at 601-602 [5]-[6]. 7 Benbrika v The Queen (2010) 29 VR 593 at 604 [16]. 8 Criminal Code, s 105A.9(2). 9 Minister for Home Affairs v Benbrika [2020] VSC 888 at [478]-[480]. 10 Supreme Court Act 1986 (Vic), s 17B(2). "Is all or any part of Division 105A of the Criminal Code (Cth) and, if so, which part, invalid because the power to make a continuing detention order under section 105A.7 of the Code is not within the judicial power of the Commonwealth and has been conferred, inter alia, on the Supreme Court of Victoria contrary to Chapter III of the Commonwealth Constitution?" On 8 October 2020, Tinney J reserved the question for the consideration of the Court of Appeal. On 30 October 2020, on the application of the Attorney- General of the Commonwealth, the question reserved was removed into this Court11. The Attorney-General intervened in support of the Minister on the hearing the Attorney-General's submissions. In these reasons the Minister and the Attorney-General will be referred to collectively as "the Commonwealth". the question reserved. The Minister adopted The scheme of Div 105A of the Code Division 105A was enacted by the Criminal Code Amendment (High Risk Terrorist Offenders) Act 2016 (Cth) and has as its object12: "to ensure the safety and protection of the community by providing for the continuing detention of terrorist offenders who pose an unacceptable risk of committing serious Part 5.3 offences if released into the community." The Minister may apply to the Supreme Court of a State or Territory for a continuing detention order13. A continuing detention order may only be made with respect to a "terrorist offender". Relevantly, there are three attributes of being a "terrorist offender". The first attribute is that the person has been convicted of an offence referred to in s 105A.3(1)(a) (a "terrorist offence"). These comprise those terrorism related offences in Pt 5.3 of the Code that have a maximum penalty of seven years' imprisonment or more ("serious Pt 5.3 offences"), certain offences involving international terrorist activities using explosives or lethal devices and certain terrorism related offences involving foreign incursions and recruitment. The second attribute is that the person is in custody, having been continuously in custody since being convicted of the terrorist offence, or is under a continuing or 11 Judiciary Act 1903 (Cth), s 40. 12 Criminal Code, s 105A.1. 13 Criminal Code, s 105A.5. interim detention order14. The third attribute is that the person will be at least 18 years old at the expiration of the sentence15. The effect of a continuing detention order is to commit the terrorist offender to detention in a prison for the period that the order is in force16. An application for a continuing detention order may only be made within 12 months before the end of the offender's sentence or, if a continuing detention order is in force, the application may not be made more than 12 months before the end of the period for which the order is in force17. The Court may appoint one or more experts to assess the risk of the offender committing a serious Pt 5.3 offence if released into the community18. Sections 105A.7 and 105A.8 should here be set out: Making a continuing detention order (1) A Supreme Court of a State or Territory may make a written order under this subsection if: an application in accordance with section 105A.5 for a continuing detention order in relation to a terrorist offender; and is made after having regard to matters in accordance with section 105A.8, the Court is satisfied to a high degree of probability, on the basis of admissible evidence, that the offender poses an unacceptable risk of committing a serious Part 5.3 offence if the offender is released into the community; and 14 Criminal Code, s 105A.3(1)(b). 15 Criminal Code, s 105A.3(1)(c). 16 Criminal Code, s 105A.3(2). 17 Criminal Code, s 105A.5(2). 18 Criminal Code, s 105A.6(1), (3) and (4). the Court is satisfied that there is no other less restrictive measure preventing the unacceptable risk. that would be effective (2) Otherwise, the Court must dismiss the application. Onus of satisfying Court The AFP Minister bears the onus of satisfying the Court of the matters referred to in paragraphs (1)(b) and (c). Period of order The order must specify the period during which it is in force. The period must be a period of no more than 3 years that the Court is satisfied is reasonably necessary to prevent the unacceptable risk. Court may make successive continuing detention orders To avoid doubt, subsection (5) does not prevent a Supreme Court of a State or Territory making a continuing detention order in relation to a terrorist offender that begins to be in force immediately after a previous continuing detention order in relation to the offender ceases to be in force. Matters a Court must have regard to in making a continuing detention order In deciding whether the Court is satisfied as referred to in paragraph 105A.7(1)(b) in relation to a terrorist offender, a Supreme Court of a State or Territory must have regard to the following matters: the safety and protection of the community; any report received from a relevant expert under section 105A.6 in relation to the offender, and the level of the offender's participation in the assessment by the expert; the results of any other assessment conducted by a relevant expert of the risk of the offender committing a serious Part 5.3 offence, and the level of the offender's participation in any such assessment; any report, relating to the extent to which the offender can reasonably and practicably be managed in the community, that has been prepared by: the relevant State or Territory corrective services; or any other person or body who is competent to assess that extent; any treatment or rehabilitation programs in which the offender has had an opportunity to participate, and the level of the offender's participation in any such programs; the level of the offender's compliance with any obligations to which he or she is or has been subject while: on release on parole for any offence referred to in paragraph 105A.3(1)(a); or subject to a continuing detention order or interim detention order; the offender's history of any prior convictions for, and findings of guilt made in relation to, any offence referred to in paragraph 105A.3(1)(a); the views of the sentencing court at the time any sentence for any offence referred to in paragraph 105A.3(1)(a) was imposed on the offender; any other information as to the risk of the offender committing a serious Part 5.3 offence. Subsection (1) does not prevent the Court from having regard to any other matter the Court considers relevant. To avoid doubt, section 105A.13 (civil evidence and procedure rules in relation to continuing detention order proceedings) applies to the Court's consideration of the matters referred to in subsections (1) and (2) of this section." The power conferred on the Supreme Court of a State or Territory to make a continuing detention order under Div 105A is subject to the ordinary incidents of the exercise of judicial power. A continuing detention order may only be made following an inter partes hearing in open court (subject to the power to close the court under general statutory powers) at which the rules of evidence and procedure apply19. The offender has the opportunity to examine and cross-examine witnesses and to make submissions20. The onus is on the Minister to establish the conditions for the making of the order21. The criterion of "unacceptable risk of committing a serious Part 5.3 offence"22 is capable of judicial application23. The Court has a discretion whether to make the order and as to the terms of the order24. The Court must give reasons for its decision25 and the making of the decision is subject to appeal by way of rehearing as of right26. The power to authorise the continuing detention of an offender in prison after the expiration of his or her sentence is subject to a number of statutory safeguards. The Minister is required to ensure that reasonable inquiries are made to ascertain any facts that would reasonably be regarded as supporting a finding 19 Criminal Code, s 105A.13. 20 Criminal Code, s 105A.14. 21 Criminal Code, s 105A.7(3). 22 Criminal Code, s 105A.7(1)(b). 23 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 593 [22] per Gleeson CJ, 597 [34] per McHugh J, 616-617 [97]-[98] per Gummow J, 657 [225] per Callinan and Heydon JJ; Thomas v Mowbray (2007) 233 CLR 307 at 327-329 [15]-[16], 334 [28] per Gleeson CJ; Vella v Commissioner of Police (NSW) (2019) 93 ALJR 1236 at 1251 [57], 1253-1254 [66]-[68], 1255 [73]-[75], 1258-1259 [84]-[89] per Bell, Keane, Nettle and Edelman JJ; 374 ALR 1 at 17, 20, 22, 26-28. 24 Criminal Code, s 105A.7(1). 25 Criminal Code, s 105A.16. 26 Criminal Code, s 105A.17. that the order should not be made27. Subject to a qualification as to information which the Minister is likely to seek to prevent or control the disclosure of, whether under the National Security Information (Criminal and Civil Proceedings) Act 2004 (Cth) or otherwise28, the application must include a statement of any such facts29. In the event that circumstances beyond the offender's control prevent the offender from engaging a legal representative in relation to the proceeding, the Court may stay the proceeding or order the Commonwealth to pay the offender's reasonable costs and expenses30. Continuing detention orders are subject to annual review31. On the hearing of a review, unless the Court is satisfied of the same conditions specified in s 105A.7(1)(b) and (c) it must revoke the order32. In the event that the Minister fails to apply for a review before the end of the period specified in s 105A.10(1B) β within 12 months after the order began to be in force or since the last review β the order ceases to be in force at the end of such period33. Two arguments as to judicial power In addition to the principal ground of his challenge to the validity of Div 105A, in written submissions Mr Benbrika makes two submissions which challenge the Division on the ground that the power it purports to confer on the Court is not judicial power. Both submissions can be dealt with shortly. First, he contends that the provision for review of the continuing detention order, on the application of the Minister, deprives the order of the conclusiveness that is essential to the exercise of judicial power: whether the order remains binding depends upon administrative action or non-action. The fact that a continuing detention order ceases to have force in the event that the Minister fails to apply for its review does not deprive the order of binding force at the time of its making. 27 Criminal Code, s 105A.5(2A). 28 Criminal Code, s 105A.5(5). 29 Criminal Code, s 105A.5(3)(aa)(ii). 30 Criminal Code, s 105A.15A. 31 Criminal Code, s 105A.10. 32 Criminal Code, s 105A.12(4) and (5). 33 Criminal Code, s 105A.10(4). The order is the authority for the continuing detention of the offender under a statutory scheme which provides for annual curial review. Secondly, Mr Benbrika contends that the making of a continuing detention order does not engage judicial power because it does not determine a controversy as to existing rights and obligations based on past events but rather it determines new rights and obligations34. McHugh J rejected the same argument in Fardon35: "[W]hen determining an application under [the Qld Act], the Supreme Court is exercising judicial power ... It is true that in form the Act does not require the Court to determine 'an actual or potential controversy as to existing rights or obligations'36. But that does not mean that the Court is not exercising judicial power. The exercise of judicial power often involves the making of orders upon determining that a particular fact or status exists. It does so, for example, in the cases of matrimonial causes, bankruptcy, probate and the winding up of companies. The powers exercised and orders made by the Court under [the Qld Act] are of the same jurisprudential character as in those cases." His Honour's statement was adopted by Gleeson CJ in Thomas v Mowbray37 and by six Justices in Attorney-General (NT) v Emmerson38. The argument is in any event foreclosed by the holding in Thomas that the power conferred on a court to make a control order under Div 104 of the Code is within the judicial power of the Commonwealth39. 34 Precision Data Holdings Ltd v Wills (1991) 173 CLR 167 at 188-189. (2004) 223 CLR 575 at 596-597 [34]. 36 R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361 at 375 per Kitto J. (2007) 233 CLR 307 at 328 [15]-[16]. (2014) 253 CLR 393 at 430-431 [57] per French CJ, Hayne, Crennan, Kiefel, Bell and Keane JJ. See also their Honours' discussion at 430-433 [57]-[63]. (2007) 233 CLR 307 at 335 [31]-[32] per Gleeson CJ, 358 [126] per Gummow and Crennan JJ, 507-509 [595]-[600] per Callinan J, 526 [651] per Heydon J. Mr Benbrika's principal argument Mr Benbrika does not invite the Court to re-open Fardon or Thomas. He notes that Thomas was not concerned with the power of a Ch III court to authorise detention in prison based upon apprehended conduct and that the judicial power in Fardon was conferred by a State Act. Apart from its source, the judicial power of the Commonwealth is distinguished from the judicial power of a State by the separation of powers for which the Constitution provides40 and the requirement that its exercise be with respect to a "matter"41. Mr Benbrika takes no point that an application for the making of a continuing detention order is not capable of constituting a "matter"42. It is the separation of powers that is said to explain why an order for continuing detention may be made in the exercise of State judicial power but not in the exercise of federal judicial power. Mr Benbrika points to judicial statements that have acknowledged that the separation of powers in the Australian constitutional setting ensures that Ch III courts serve as a bulwark of liberty43. They do so, he submits, because, as the principle was explained in the joint reasons of Brennan, Deane and Dawson JJ in Chu Kheng Lim v Minister for Immigration, exceptional cases aside, the involuntary detention of a citizen in custody by the State is penal or punitive in character and exists only as an incident of the exclusively judicial function of adjudging and punishing criminal guilt (the "Lim principle")44. Mr Benbrika's challenge depends upon acceptance that a scheme for preventative detention of the kind considered in Fardon is not an exception to the Lim principle and for that reason may not be conferred as federal judicial power. The argument adopts Gummow J's reasons in Fardon. 40 R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254 at 269- 270 per Dixon CJ, McTiernan, Fullagar and Kitto JJ. In re Judiciary and Navigation Acts (1921) 29 CLR 257 at 265-266 per Knox CJ, Gavan Duffy, Powers, Rich and Starke JJ. 42 See Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 596-597 [34] per 43 See R v Quinn; Ex parte Consolidated Foods Corporation (1977) 138 CLR 1 at 11 per Jacobs J; Wilson v Minister for Aboriginal and Torres Strait Islander Affairs (1996) 189 CLR 1 at 11-12 per Brennan CJ, Dawson, Toohey, McHugh and (1992) 176 CLR 1 at 27. The Commonwealth contests that Lim is authority for the proposition that power to order the detention of a person in the custody of the State can only be within the judicial power of the Commonwealth if it is an incident of adjudging and punishing criminal guilt. In the Commonwealth's submission, correctly understood Lim is authority for the principle that the power to detain for a punitive purpose is exclusively judicial. Detention for any non-punitive purpose, in the Commonwealth's submission, may be conferred on the executive or on a Ch III court. Lim The issue in Lim was whether the administrative detention of non-citizens under the Migration Act 1958 (Cth) involved the impermissible conferral of the judicial power of the Commonwealth on the executive. The joint reasons explained that some functions are exclusively judicial in character, of which the most important is the adjudgment and punishment of criminal guilt under a law of the Commonwealth. In this connection, their Honours observed that it would be beyond the power of the Parliament to invest the executive with an arbitrary power of detention even if the power was stated in terms divorced from punishment and criminal guilt. The Lim principle was stated as a reason for that preclusion in these terms45: "[P]utting to one side the exceptional cases to which reference is made below, the involuntary detention of a citizen in custody by the State is penal or punitive in character and, under our system of government, exists only as an incident of the exclusively judicial function of adjudging and punishing criminal guilt." The exceptional cases to which their Honours referred are arrest and detention pending trial and the detention of persons suffering from mental illness or infectious disease. In these cases, their Honours observed, the power to detain can legitimately be seen as non-punitive and as not necessarily involving the exercise of judicial power. Their Honours also referred to exceptions to the requirement that punitive detention follows the judicial function of adjudging and punishing criminal guilt, namely the traditional powers of the Parliament to punish for 45 Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1 at 27 per Brennan, contempt and of military tribunals to punish for breach of military discipline46. All were exceptions to the general proposition ("the Lim general proposition") that47: "[T]he power to order that a citizen be involuntarily confined in custody is, under the doctrine of the separation of judicial from executive and legislative powers enshrined in our Constitution, part of the judicial power of the Commonwealth entrusted exclusively to Ch III courts." The Lim general proposition and the Lim principle have a long pedigree under our inherited common law tradition. Their Honours referenced Blackstone and Coke in support of the Lim general proposition48 and Dicey's celebrated statement that every citizen is "ruled by the law, and by the law alone" and "may with us be punished for a breach of law, but he can be punished for nothing else" in support of the allied Lim principle49. An unexplained aspect of acceptance of the challenge Before turning to the Qld Act considered in Fardon and Gummow J's analysis of federal judicial power on which Mr Benbrika's argument depends, one unexplained aspect of acceptance of his argument may be noted. Chapter III courts serve as the bulwark of liberty by virtue of the qualities of independence and impartiality that are secured by the separation of the judicial function from the other functions of government50. The absence of separation of powers under the Constitutions of the States allows that non-judicial functions may be conferred on the Supreme Courts provided the conferral does not substantially impair the institutional integrity of the Court as one in which federal jurisdiction is invested. 46 Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1 at 28. 47 Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1 at 28. 48 Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1 at 28, citing Blackstone, Commentaries, 17th ed (1830), bk 1, paras 136-137 and Coke, Institutes of the Laws of England (1809), pt 2 at 589. 49 Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1 at 27-28, citing Dicey, Introduction to the Study of the Law of the Constitution, 10th ed (1959) at 202. 50 Wilson v Minister for Aboriginal and Torres Strait Islander Affairs (1996) 189 CLR 1 at 11-13 per Brennan CJ, Dawson, Toohey, McHugh and Gummow JJ. On the authority of Kable v Director of Public Prosecutions (NSW)51, the conferral of a non-judicial function that undermines the appearance of the independence and impartiality of the Court will be beyond legislative power. Informing the Kable doctrine is the recognition that the Constitution does not permit different grades or qualities of justice52. What remains unexplained is why the judicial power to order preventative detention conferred on the Supreme Court by the Qld Act, which does not trench on the Court's independence and impartiality, is not capable of being conferred on the Supreme Court under Commonwealth law. Fardon The Qld Act considered in Fardon makes provision for the Attorney- General of the State of Queensland to apply to the Supreme Court of Queensland for an order that a prisoner serving a sentence of imprisonment for a "serious sexual offence" be detained in custody for an indefinite term if, on the hearing of the application, the Court is satisfied that the prisoner is "a serious danger to the community"53. A prisoner is considered to be a serious danger to the community if, inter alia, there is "an unacceptable risk that the prisoner [would] commit a serious sexual offence" if the prisoner were released from custody54. Any application is required to be made within the last six months of the sentence imposed for the serious sexual offence55. The Court is only to be "satisfied" if (1996) 189 CLR 51. 52 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 103 per Gaudron J; Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 617 [101] per Gummow J; Wainohu v New South Wales (2011) 243 CLR 181 at 209 [45] per French CJ and Kiefel J, 228-229 [105] per Gummow, Hayne, Crennan and Bell JJ; Condon v Pompano Pty Ltd (2013) 252 CLR 38 at 89 [123] per Hayne, Crennan, Kiefel and Bell JJ; Vella v Commissioner of Police (NSW) (2019) 93 ALJR 1236 at 1270 [147] per Gageler J; 374 ALR 1 at 41-42. 53 Dangerous Prisoners (Sexual Offenders) Act 2003 (Qld), ss 5 and 13. 54 Dangerous Prisoners (Sexual Offenders) Act, s 13(2). 55 Dangerous Prisoners (Sexual Offenders) Act, s 5(2)(c). persuaded "by acceptable, cogent evidence" and "to a high degree of probability" that the evidence is sufficient to justify the decision56. It was argued in Fardon that the power to commit a person to prison because he or she poses a risk of re-offending, and not as punishment for past criminal conduct, is repugnant to judicial process such that its conferral on the Supreme Court of Queensland is incompatible with that Court's role as a repository of federal judicial power57. The argument was rejected by six Justices, including Gummow J58. The Attorney-General of the Commonwealth, intervening in support of his Queensland counterpart, submitted that the function conferred on the Supreme Court could not contravene the Kable principle because the same function could validly be conferred on the Supreme Court under Commonwealth law59. Gummow J, with whose reasons in this respect Kirby J agreed60, was the only member of the Court to express a concluded view on the Attorney-General of the Commonwealth's submission. His Honour rejected it, holding, on the authority of Lim, that detention for apprehended conduct is inconsistent with "the central constitutional conception of detention as a consequence of judicial determination of engagement in past conduct"61. Gummow J favoured reformulating the Lim principle by removing reference to whether the detention is "penal or punitive in character", in order to 56 Dangerous Prisoners (Sexual Offenders) Act, s 13(3). 57 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51. 58 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 592 [19] per Gleeson CJ, 594 [25], 598 [35] per McHugh J, 621 [117] per Gummow J (Hayne J agreeing at 647 [196]), 658 [234] per Callinan and Heydon JJ. 59 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 580. 60 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 631 [145]. 61 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 613 [84]. emphasise that the constitutional concern is with the deprivation of liberty without adjudication of guilt. His Honour's statement of the principle was in these terms62: "'[E]xceptional cases' aside, the involuntary detention of a citizen in custody by the State is permissible only as a consequential step in the adjudication of criminal guilt of that citizen for past acts." In his Honour's judgment, the fact that a statutory scheme of preventative detention employs a judicial process of "some refinement" would not save it from invalidity because the vice for a Ch III court in such a scheme inheres in the outcome and not the means by which the outcome is obtained63. The Commonwealth's submission The Commonwealth is critical of Gummow J's formulation, characterising it as a radical reworking that converts a principle which articulates why the executive may not detain a person for a punitive purpose into a principle that precludes any detention for non-punitive purposes under Commonwealth law whether by the executive or by a Ch III court. In the result, the Commonwealth submits, the separation of powers operates to deny to each arm of government the ability to detain a person in the custody of the State for a non-punitive purpose. The Commonwealth invokes Gaudron J's analysis in Kruger v The Commonwealth in support of the contention that the exceptions to the Lim general proposition are so numerous as to belie the claim that the power to authorise detention in the custody of the State is exclusively judicial64. The Commonwealth is also critical of Gummow J's rejection of the utility of the distinction between detention for punitive and non-punitive purposes β a distinction, the Commonwealth submits, that has been endorsed in a line of decisions since Lim65. In the Commonwealth's submission, the principle to be 62 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 612 [80]. 63 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 614 [85]. (1997) 190 CLR 1 at 109-110. See also Behrooz v Secretary, Department of Immigration and Multicultural and Indigenous Affairs (2004) 219 CLR 486 at 498- 499 [20] per Gleeson CJ; Al-Kateb v Godwin (2004) 219 CLR 562 at 648-649 [257]-[258] per Hayne J (Heydon J agreeing at 662-663 [303]). 65 The submission references Al-Kateb v Godwin (2004) 219 CLR 562 at 584 [44]- [45], 586 [49] per McHugh J, 648 [255]-[256], 649-650 [263] per Hayne J distilled from this line of authority is that whether power to order detention in the custody of the State is exclusively entrusted to Ch III courts depends upon whether the detention is imposed as punishment for a breach of the law. The decisions to which the Commonwealth refers involve administrative detention of a kind that is acknowledged to be among the exceptions that qualify the Lim general proposition. The contention that the Parliament may empower the executive or Ch III courts to detain a person in the custody of the State for any purpose other than as punishment for breach of the law may be thought to be a radical reworking of the Lim general proposition66. The exceptions to Lim The answer to the question reserved does not require consideration of the scope of exceptions to the Lim general proposition that the power to order that a person be involuntarily detained in the custody of the State is entrusted exclusively to Ch III courts. Division 105A confers power on a Ch III court. The question reserved is concerned with the allied Lim principle that involuntary detention in the custody of the State under our system of government exists only as an incident of the adjudgment and punishment of criminal guilt. As the joint reasons in Lim acknowledged, there are exceptions to the characterisation of detention by the State as penal or punitive in character. It is (Heydon J agreeing at 662-663 [303]), 657 [287] per Callinan J; Behrooz v Secretary, Department of Immigration and Multicultural and Indigenous Affairs (2004) 219 CLR 486 at 499 [21] per Gleeson CJ, 559 [218] per Callinan J; Re Woolley; Ex parte Applicants M276/2003 (2004) 225 CLR 1 at 12 [17], 13 [19] per Gleeson CJ, 23-27 [53]-[62] per McHugh J, 75 [222], 77 [227] per Hayne J, 85 [261] per Callinan J; North Australian Aboriginal Justice Agency Ltd v Northern Territory (2015) 256 CLR 569 at 592-593 [36]-[37] per French CJ, Kiefel and Bell JJ, 610-612 [94]-[103] per Gageler J; Plaintiff M68/2015 v Minister for Immigration and Border Protection (2016) 257 CLR 42 at 69 [40] per French CJ, Kiefel and Nettle JJ, 86 [98], 87 [100] per Bell J, 111-112 [183]-[185] per Gageler J, 124-125 [238]-[241] per Keane J; Falzon v Minister for Immigration and Border Protection (2018) 262 CLR 333 at 341 [17], 343 [27], 343-344 [29], 344 [33] per Kiefel CJ, Bell, Keane and Edelman JJ, 360 [96] per Nettle J. 66 Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1 at 28 per Brennan, Mr Benbrika's case that the exceptions identified in Lim β committal to custody awaiting trial and detention of the mentally ill or those suffering from infectious disease β all pre-date federation and are to be taken to have been intended to fall within the judicial power of the Commonwealth. The absence of pre-federation precedent for court-ordered committal to prison for apprehended conduct, divorced from any finding of criminal guilt or mental impairment, is submitted to be against finding that the power conferred by Div 105A can fall within an exception to the Lim principle. Acceptance of Mr Benbrika's primary argument would produce the consequence that no arm of the federal government may authorise the detention of a person in custody for the purpose of protecting the community against the unacceptable risk of harm posed by a terrorist offender. Mr Benbrika's alternative, distinctly unattractive67, argument is that the executive may authorise detention in such a case but a Ch III court may not. In Fardon, Gummow J drew a distinction between the Qld Act and earlier schemes for preventative detention68 by pointing out that those schemes were "attached" to, and derived their authority from, the sentencing of the offender for past conduct69. By contrast, the legislative scheme his Honour was considering took as the factum for engagement of the power the status of the person as a prisoner serving a sentence, but the sentencing itself was complete and the making of a continuing detention order could not be said to form part of it. It may be observed that the exceptions to the Lim principle involving the involuntary detention of those suffering from mental illness or infectious disease share a purpose of protection of the community from harm70. His Honour did not explain why an appropriately tailored scheme for the protection of the community 67 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 586 [2] per Gleeson CJ. See also Vella v Commissioner of Police (NSW) (2019) 93 ALJR 1236 at 1260 [90] per Bell, Keane, Nettle and Edelman JJ (quoting Thomas v Mowbray (2007) 233 CLR 307 at 329 [17] per Gleeson CJ), 1272 [158] per Gageler J; 374 ALR 1 at 28, 68 See Habitual Criminals Act 1905 (NSW) and Prevention of Crime Act 1908 (UK), (2004) 223 CLR 575 at 613 [83]. 70 Kruger v The Commonwealth (1997) 190 CLR 1 at 110 per Gaudron J. from the harm that particular forms of criminal activity may pose is incapable of coming within an analogous exception. His Honour noted that71: "It may be accepted that the list of exceptions to which reference was made in Lim is not closed. But it is not suggested that regimes imposing upon the courts functions detached from the sentencing process form a new exceptional class, nor that the detention of the mentally ill for treatment is of the same character as the incarceration of those 'likely to' commit certain classes of offence." (footnote omitted) His Honour's evident concern was with detention for apprehended conduct. Yet, as his Honour acknowledged72, schemes for preventative detention have a long history in common law countries73. The scheme considered in McGarry v The Queen74 empowers a superior court when sentencing a person for an indictable offence, in addition to imposing the appropriate term of imprisonment for the offence ("the nominal sentence"), to order that the offender be imprisoned indefinitely. The making of such an order is conditioned on the court's satisfaction on the balance of probabilities that when the offender would otherwise be released he or she would be a danger to society, or a part of it, because of factors including the risk of the commission of further offences75. The order for indefinite detention under that scheme is to be made at the time of sentencing but the detention for which it provides is not founded on the offender's past criminal conduct: the nominal sentence is imposed for that conduct 71 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 613 [83]. 72 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 613 [83]. 73 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 590 [13] per Gleeson CJ, citing Dershowitz, "The Origins of Preventive Confinement in Anglo-American Law β Part I: The English Experience" (1974) 43 University of Cincinnati Law Review 1. See also Professor Norval Morris' introduction to a number of the McGill Law Journal devoted to issues concerning habitual criminals and preventative detention, (1967) 13(4) McGill Law Journal 534 at 551 and Radzinowicz and Hood, "Incapacitating the Habitual Criminal: The English Experience" (1980) 78 Michigan Law Review 1305. (2001) 207 CLR 121. 75 Sentencing Act 1995 (WA), s 98. and reflects the various purposes of punishment including protection of the community and general deterrence. The order for indefinite detention is founded on the court's assessment, in the exercise of State judicial power, of the danger to society that the offender would present at the completion of the nominal sentence. As Gleeson CJ observed in Fardon, if the lawful exercise of judicial power admits of the judge assessing the danger an offender poses to the community at the time of sentencing it is curious that it does not admit of the judge making such an assessment at or near the time of imminent release when that danger might be assessed more accurately76. The question reserved does not raise consideration of the Kable limitation, if any, on legislative power to confer on the Supreme Court of a State or Territory the function of ordering the detention in custody of a person in circumstances that do not fall within an exception to the Lim principle. For present purposes the conclusion in Fardon that the power conferred by the Qld Act to order the continuing detention of a prisoner who is found to be a danger to society is a judicial power that does not compromise the Supreme Court's institutional integrity as a court that may be invested with federal jurisdiction points powerfully against acceptance of Mr Benbrika's challenge. Terrorism poses a singular threat to civil society77. The contention that the exceptions to the Lim principle are confined by history and are insusceptible of analogical development cannot be accepted. There is no principled reason for distinguishing the power of a Ch III court to order that a mentally ill person be detained in custody for the protection of the community from harm and the power to order that a terrorist offender be detained in custody for the same purpose. It is the protective purpose that qualifies a power as an exception to a principle that is recognised under our system of government as a safeguard on liberty. Demonstration that Div 105A is non-punitive is essential to a conclusion that the regime that it establishes can validly be conferred on a Ch III court, but that conclusion does not suffice. As a matter of substance, the power must have as its object the protection of the community from harm. (2004) 223 CLR 575 at 586 [2]. 77 Thomas v Mowbray (2007) 233 CLR 307 at 490 [544] per Callinan J; Lodhi v The Queen (2007) 179 A Crim R 470 at 490 [86]-[87] per Spigelman CJ, quoting Sakr (1987) 31 A Crim R 444 at 451 per Crockett J. Characterisation of Div 105A as punitive or non-punitive Mr Benbrika submits that the detention authorised by Div 105A is not correctly characterised as non-penal or non-punitive. The fact of detention in custody, in his submission, is prima facie punitive whatever the reason may be for its imposition. He argues that if the overriding object of the scheme were the protection of the community and not any purpose of punishment it is to be expected that the Parliament would provide that any person found to pose an unacceptable risk of committing a serious Pt 5.3 offence, including persons not presently in detention, might be detained under it. Given that the condition for the engagement of the power is that the person is a "terrorist offender", he submits that a purpose of punishment cannot be quarantined from any purpose of protection. He points out that the prevention of future harm is itself an aspect of punishment. Other features of the scheme which he submits do not displace its prima facie characterisation as punitive are that the detention for which it provides is in a prison and no provision is made for the treatment and rehabilitation of detainees. To observe that the protection of the community is a factor that is relevant in sentencing an offender for an offence against Commonwealth law78 says nothing as to the characterisation of the power to make a continuing detention order. A court sentencing an offender for a terrorist offence is required to impose a sentence that is of a severity that is appropriate in all the circumstances of the offence79. The power conferred by s 105A.7 of the Code is an extraordinary power to detain a terrorist offender in prison notwithstanding that the purposes of punishment have been vindicated and the sentence served. The power is conditioned on the status of the offender as a prisoner serving a sentence for a terrorist offence (or having been in custody continuously since having been convicted of such an offence) but its making is divorced from sentencing the offender for the terrorist offence. The requirement that the sentencing court warn the offender that an application for a continuing detention order may be made in the future does not alter that fact80. The object of Div 105A, set out earlier in these reasons, is plainly directed to the protection of the community from harm. The fact that the Parliament has chosen not to pursue this object by a more extreme measure that is not conditioned 78 Bui v Director of Public Prosecutions (Cth) (2012) 244 CLR 638 at 650-651 [18]; Director of Public Prosecutions (Cth) v Said Khodor el Karhani (1990) 21 NSWLR 370 at 377, quoting R v Radich [1954] NZLR 86 at 87. 79 Crimes Act 1914 (Cth), s 16A(1). 80 Criminal Code, s 105A.23(1). on the subject being a "terrorist offender" does not gainsay that the object of the continuing detention order is community protection and not punishment. Nor does the fact that the detention for which Div 105A provides is in a prison detract from the conclusion that its purpose is protective and not punitive. That protection is its purpose is reinforced by the requirement that a person detained under a continuing detention order, as far as reasonably possible, is to be treated in a way that is appropriate to his or her status as a person who is not serving a sentence of imprisonment. Such a detainee is not to be accommodated in the same area of the prison as prisoners serving sentences of imprisonment unless that is necessary, or unless the person elects to be so accommodated81. A detainee under a continuing detention order is not denied access to such treatment and rehabilitation programs as may be available in the prison. The absence of special provision for treatment and rehabilitation of detainees under Div 105A does not deprive the scheme of its character as protective. The power is only enlivened in the last 12 months of the offender's sentence. In determining whether the conditions for the making of a continuing detention order are met the Court is, relevantly, to have regard to expert opinion about the risk of the offender committing a serious Pt 5.3 offence if released into the community82; any report relating to the extent to which the offender can be managed in the community83; and any treatment or rehabilitation programs in which the offender has had the opportunity to participate84. The evident focus is on the assessment of the risk the offender poses of future harm to the community upon release and not on punishing the offender for the offence for which he or she was sentenced. Similarly, the provision for annual reviews85, and the requirement that the Court revoke the continuing detention order unless satisfied: (1) to a high degree of probability, on the basis of admissible evidence, that the offender poses an unacceptable risk of committing a serious Pt 5.3 offence if released into the community; and (2) that there is no other, less restrictive measure that would be 81 Criminal Code, s 105A.4(2). 82 Criminal Code, ss 105A.6(4) and 105A.8(1)(b) and (c). 83 Criminal Code, s 105A.8(1)(d). 84 Criminal Code, s 105A.8(1)(e). 85 Criminal Code, s 105A.10. effective in preventing that unacceptable risk86, bespeak that the regime has as its object the protection of the community rather than punishment. Detention in prison is prima facie penal or punitive; however, that characterisation may be displaced by an evident non-punitive purpose87. Division 105A has an evident non-punitive, protective purpose. This Court has consistently held, and most recently in Fardon, that detention that has as its purpose the protection of the community is not punishment88. As Gummow J explained, the making of a continuing detention order under the Qld Act did not punish Fardon twice, nor did it increase his punishment for the offences of which he had been convicted89. Plainly enough, any suggestion that detention under a scheme such as that considered in Fardon is to supplement punishment for a crime would raise a large question as to double-punishment. It is precisely because a just sentence must be proportionate to the offending being punished that adequate protection for the safety of the community from demonstrable threats cannot be assured under the ordinary criminal law (and sentences imposed thereunder). As Gleeson CJ noted in Fardon90, the statement of Deane J in Veen v The Queen [No 2]91 is necessarily predicated upon a positive view of the legitimacy of preventative detention independently of punishment of crime. Mr Benbrika submits that if it is accepted that Div 105A does not have a punitive purpose, nonetheless it should not come within an exception to the Lim principle because the non-punitive object that it pursues is the prevention of crime 86 Criminal Code, s 105A.12(4) and (5). 87 Falzon v Minister for Immigration and Border Protection (2018) 262 CLR 333 at 342 [24] per Kiefel CJ, Bell, Keane and Edelman JJ; North Australian Aboriginal Justice Agency Ltd v Northern Territory (2015) 256 CLR 569 at 611-612 [98] per (2004) 223 CLR 575 at 592 [20] per Gleeson CJ, 597 [34] per McHugh J, 654 [217] per Callinan and Heydon JJ. See also Vella v Commissioner of Police (NSW) (2019) 93 ALJR 1236 at 1257-1258 [83] per Bell, Keane, Nettle and Edelman JJ; 374 ALR 89 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 610 [74] (Hayne J agreeing at 647 [196]). (2004) 223 CLR 575 at 588 [9]. (1988) 164 CLR 465 at 495. as distinct from the protection of the community from harm. The unacceptable risk of which the Court must be satisfied is the commission of any serious Pt 5.3 offence. Mr Benbrika points out that serious Pt 5.3 offences cover a wide range of conduct including preparatory conduct that would not in other contexts amount to criminal conduct. The submission raises an issue touched on in McGarry. It will be recalled that the regime in that case conditions the making of an indefinite detention order on a court's satisfaction that the offender is a danger to society, or some part of it, by reason of factors that include the risk that the offender would commit further indictable offences if released. As the joint reasons observed, the association between being a "danger to society" and recidivism is not without difficulty given that a fundamental premise of the criminal law is that conduct is regarded as criminal for the very reason that its commission harms society, or some part of it. On that view, the court's satisfaction of the risk of re-offending would suffice to establish that the offender is a danger to society and support the making of an indefinite detention order. However, it was held that correctly understood the power to make the order is only enlivened upon finding that the offender would engage in conduct the consequences of which would be grave or serious for society as a whole, or some part of it; a bare conclusion that it was probable the offender would commit some indictable offence in the future would not suffice92. Part 5.3 enacts offences involving "terrorist acts" and offences involving "terrorist organisations"93. Terrorist acts are actions, or threats to take actions, that cause serious physical harm to a person or serious damage to property or which endanger human life (other than the life of the person taking the action) or which create a serious risk to the health or safety of the public, or a section of the public, or which seriously interfere with, disrupt or destroy various forms of infrastructure. The action or threat of action must be carried out, or threatened, with the intention of advancing a political, religious or ideological cause and coercing or influencing by intimidation a government or intimidating the public or a section of the public94. 92 McGarry v The Queen (2001) 207 CLR 121 at 129-130 [20]-[23] per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ. 93 See Australia, House of Representatives, Security Legislation Amendment (Terrorism) Bill 2002, Explanatory Memorandum at 9-10, noting Security Council of the United Nations, Resolution 1373 (2001), para 2(e). 94 Criminal Code, s 100.1(1), definition of "terrorist act". Serious Pt 5.3 offences involving terrorist acts include engaging in a terrorist act95; providing or receiving training connected with terrorist acts96; possessing things connected with terrorist acts97; collecting or making documents connected with preparation for, the engagement of a person in, or assistance in a terrorist act98; doing an act in preparation for, or planning, a terrorist act99; providing or collecting funds reckless as to whether the funds will be used to facilitate or engage in a terrorist act100; and making funds available to another person or collecting funds for, or on behalf of, another person and being reckless as to whether the other person will use the funds to facilitate or engage in a terrorist act101. A "terrorist organisation" is an organisation that is directly or indirectly engaged in, preparing, planning, assisting in or fostering the doing of a terrorist act or certain organisations that are specified as terrorist organisations in the regulations102. Serious Pt 5.3 offences involving terrorist organisations are directing the activities of a terrorist organisation103; being a member of a terrorist 95 Criminal Code, s 101.1(1). 96 Criminal Code, s 101.2(1) and (2). 97 Criminal Code, s 101.4(1) and (2). 98 Criminal Code, s 101.5(1) and (2). 99 Criminal Code, s 101.6(1). 100 Criminal Code, s 103.1(1). Note that this offence was enacted to implement Australia's international obligations to criminalise the collection and provision of funds for terrorist acts: see Australia, House of Representatives, Suppression of the Financing of Terrorism Bill 2002, Explanatory Memorandum at 5, referring to the International Convention for the Suppression of the Financing of Terrorism (2000) and Security Council of the United Nations, Resolution 1373 (2001), para 1(b). See also Australia, House of Representatives, Security Legislation Amendment (Terrorism) Bill 2002, Explanatory Memorandum at 9-10. 101 Criminal Code, s 103.2(1). 102 Criminal Code, s 102.1(1), definition of "terrorist organisation". 103 Criminal Code, s 102.2. organisation104; recruiting a person to join, or participate in the activities of, a terrorist organisation105; providing or receiving training to or from a terrorist organisation106; receiving funds from, or making funds available to, or collecting funds for, or on behalf of, a terrorist organisation107; and providing support or resources to a terrorist organisation108. As Spigelman CJ has observed of the Pt 5.3 regime109: "Preparatory acts are not often made into criminal offences. The particular nature of terrorism has resulted in a special, and in many ways unique, legislative regime. It was, in my opinion, the clear intention of Parliament to create offences where an offender has not decided precisely what he or she intends to do. A policy judgment has been made that the prevention of terrorism requires criminal responsibility to arise at an earlier stage than is usually the case for other kinds of criminal conduct, eg well before an agreement has been reached for a conspiracy charge." It is difficult to envisage any circumstances in which a continuing detention order would be made to prevent the risk of the commission of a serious Pt 5.3 offence where that offence is of a kind that could not be seen to pose a real threat of harm to the community. Even where the apprehended serious Pt 5.3 offence does not involve as an element the inflicting, or having as an immediate purpose the actual inflicting, of personal injury on a person or persons, the advancement of terrorist ideology can readily be seen to create a milieu which fosters the prospect that personal injury will be suffered by innocent members of the community. A law directed against the implementation of such an ideology (even by preparatory acts) does not lack the character of a law for the protection of the community from harm simply because the law does not include the immediate likelihood or purpose of inflicting personal injury as an element of the offence. It is important that the 104 Criminal Code, s 102.3(1). 105 Criminal Code, s 102.4. 106 Criminal Code, s 102.5(1) and (2). 107 Criminal Code, s 102.6(1) and (2). 108 Criminal Code, s 102.7. 109 Lodhi v The Queen (2006) 199 FLR 303 at 318 [66]. restriction upon individual liberty involved in the making of a continuing detention order is dependent upon the risk of an offence being "unacceptable" to the judge in light of the facts as they appear at the time he or she is asked to make the order. Further, the power to address the risk of harm posed to the community in any particular case by the making of an order less intrusive on personal liberty than a continuing detention order serves to ensure that continuing detention orders are made to secure the protection of the community from unacceptable risks of actual harm. In this respect, it is to be noted that the Court is given wide powers to make control orders under Div 104 imposing restrictions, obligations and prohibitions that fall short of detention in custody110 and that the power to make a continuing detention order is conditioned not only on the risk of the commission of a serious Pt 5.3 offence but on satisfaction that no other, less restrictive measure would be effective in preventing the unacceptable risk111. Correctly understood, a continuing detention order could not properly be made by a Court in the exercise of the discretion conferred by s 105A.7(1) in a case where the only risk of offending identified by the authorities did not carry a threat of harm to members of the community that was sufficiently serious in the assessment of the Court as to make the risk of the commission of the offence "unacceptable" to that Court. Contrary to Mr Benbrika's alternative submission, Div 105A is rightly characterised as directed to ensuring the safety and protection of the community from the risk of harm posed by the threat of terrorism. Division 105A validly confers the judicial power of the Commonwealth on the Supreme Court of a State or Territory. This conclusion makes it unnecessary to consider the Commonwealth's submission that New South Wales v Kable112 is determinative of the capacity of the Parliament to validly empower a court exercising federal judicial power to order the detention of a person after the expiry of his or her sentence based upon an assessment of the risk of future offending by that person. 110 Criminal Code, ss 104.4 and 104.5(3). 111 Criminal Code, s 105A.7(1)(c). 112 (2013) 252 CLR 118. Costs Mr Benbrika seeks an order for his costs whatever the event. The order is sought under s 105A.15A of the Code. The Commonwealth submits that there is no reason why costs should not follow the event. Section 105A.15A applies if a continuing detention order proceeding relating to a terrorist offender is before a Supreme Court of a State or Territory and the offender, due to circumstances beyond the offender's control, is unable to engage legal representation in relation to the proceeding113. In such an event the Court is empowered to stay the proceeding and/or to order the Commonwealth to bear all or part of the reasonable costs and expenses of the offender's legal representation for the proceeding114. On 17 September 2020, Tinney J made orders pursuant to s 105A.15A(2)(b) requiring the Commonwealth to bear Mr Benbrika's reasonable costs and expenses of the proceeding for: a period of three weeks; until Legal Aid funding is granted to him; or until further order, whichever occurs first. It is submitted that in circumstances where the primary judge considered it appropriate to make orders covering Mr Benbrika's costs of defending the Minister's application this Court should make an order that he have his costs of the determination of a question of law that arose in that same proceeding. The proceeding in relation to which Tinney J's order was made is the Minister's application under Div 105A that a continuing detention order be made with respect to Mr Benbrika. The making of the order does not provide a good reason for requiring the Commonwealth to pay Mr Benbrika's costs of his unsuccessful challenge to the validity of Div 105A. Conclusion and orders For these reasons there should be the following orders: The question reserved for the consideration of the Court of Appeal of the Supreme Court of Victoria and removed into this Court pursuant to s 40 of the Judiciary Act 1903 (Cth) is answered as follows: 113 Criminal Code, s 105A.15A(1). 114 Criminal Code, s 105A.15A(2). Is all or any part of Division 105A of the Criminal Code (Cth) and, if so, which part, invalid because the power to make a continuing detention order under section 105A.7 of the Code is not within the judicial power of the Commonwealth and has been conferred, inter alia, on the Supreme Court of Victoria contrary to Chapter III of the Commonwealth Constitution? The respondent is to pay the applicant's costs. Central to the operation of Pt 5.3 of the Criminal Code (Cth) is the notion of a "terrorist act". Engaging in a "terrorist act" involves taking or threatening specified action intending to advance a political, religious or ideological cause and intending either to coerce or intimidate a government or to intimidate the public or a section of the public. The specified action is action that causes death or serious physical harm to another person, that endangers another person's life, that creates a serious risk to the health or safety of the public or a section of the public, that causes serious damage to property, or that seriously interferes with or seriously disrupts or destroys an electronic system such as a telecommunications system or a financial system115. Provisions within Pt 5.3 create offences having some connection to actual or potential terrorist acts. The degree of connection varies from offence to offence. At one end of the spectrum is the offence of engaging in a terrorist act, which carries a maximum penalty of imprisonment for life116. At the other end of the spectrum is the offence of associating with a person who is a member of a "terrorist organisation", which carries a maximum penalty of imprisonment for three years117. The definition of "terrorist organisation" is met by an organisation that is "directly or indirectly engaged in, preparing, planning, assisting in or fostering the doing of a terrorist act"118. Most offences within the spectrum are "prophylactic offences" in the sense that "the risk of harm", relevantly from the commission of a terrorist act, "does not arise straightforwardly from the prohibited act" but "only after, or in conjunction with, further human interventions β either by the original actor or by others"119. An example is the offence of taking steps to become a member of a terrorist organisation, which carries a maximum penalty of imprisonment for ten years120. 115 Section 100.1(1) of the Criminal Code (definition of "terrorist act") read with s 100.1(2) and (3). 116 Section 101.1 of the Criminal Code. 117 Section 102.8 of the Criminal Code read with s 102.1(1) (definition of "member"). 118 Section 102.1(1) of the Criminal Code (definition of "terrorist organisation"). 119 Simester and von Hirsch, Crimes, Harms, and Wrongs: On the Principles of Criminalisation (2011) at 79. See also Lodhi v The Queen (2006) 199 FLR 303 at 120 Section 102.3 of the Criminal Code read with s 102.1(1) (definition of "member"). In R v Abdirahman-Khalif121 the offence was committed by a young Australian woman who attempted to travel from Australia to Turkey in order to "engage" with Islamic State with the intention of becoming a nurse or a bride. Division 104 of Pt 5.3 provides for the making of "control orders", imposing obligations, prohibitions and restrictions stopping short of detention in custody. The Division confers on the Federal Court and the Federal Circuit Court power122, and jurisdiction123, to make a control order on application of the Commissioner or another senior member of the Australian Federal Police. The Federal Court or the Federal Circuit Court can make a control order if, amongst other things, "the court is satisfied on the balance of probabilities that each of the obligations, prohibitions and restrictions to be imposed ... by the order is reasonably necessary, and reasonably appropriate and adapted", for the purpose of "protecting the public from a terrorist act" or "preventing the provision of support for or the facilitation of a terrorist act"124. Division 105A of Pt 5.3 provides for the making of "continuing detention orders", requiring persons convicted of terrorist offences to continue to be detained in custody beyond completion of their sentences. Division 105A confers on the Supreme Court of a State or Territory power125, and jurisdiction126, to make a continuing detention order in relation to a "terrorist offender" on application by the Minister administering the Australian Federal Police Act 1979 (Cth)127. The Supreme Court can make a continuing detention order if "satisfied to a high degree of probability, on the basis of admissible evidence, that the offender poses an unacceptable risk of committing a serious Part 5.3 offence if the offender is released into the community"128 and if "satisfied that there is no other less 121 (2020) 94 ALJR 981; 384 ALR 1. 122 Section 104.4 of the Criminal Code. 123 Section 15C of the Acts Interpretation Act 1901 (Cth). 124 Section 104.4(1)(d)(i) and (ii) of the Criminal Code. 125 Section 105A.7 of the Criminal Code. 126 Section 15C of the Acts Interpretation Act. 127 Section 105A.5 of the Criminal Code. 128 Section 105A.7(1)(b) of the Criminal Code. restrictive measure that would be effective in preventing the unacceptable risk"129. The expression "serious Part 5.3 offence" is defined to mean an offence against Pt 5.3 the maximum penalty for which is seven or more years of imprisonment130. insertion Division 104's Commonwealth legislative practice in that it was the first time that a Commonwealth law made provision for the making by judicial order of "preventative restraints on liberty"132. The Division as inserted was held to be compatible with Ch III of the Constitution in Thomas v Mowbray133. in 2005131 marked a development Division 105A's insertion in 2017134 marked a further development in Commonwealth legislative practice in that it was the first time that a Commonwealth law made provision for a person convicted of an offence to continue to be detained in custody by judicial order after the completion of his or her sentence. The Division was modelled on the Dangerous Prisoners (Sexual Offenders) Act 2003 (Qld), compatibility of which with Ch III had been upheld in The question of Div 105A's compatibility with Ch III arose on an application by the Minister for Home Affairs to the Supreme Court of Victoria for a continuing detention order in relation to Mr Benbrika. The question was formally reserved in the Trial Division of the Supreme Court for the consideration of the Court of Appeal and was removed into this Court by order under s 40 of the Judiciary Act 1903 (Cth). The majority in Thomas v Mowbray held that the power to make a control order was judicial power within the meaning of s 71 of the Constitution. That holding was indispensable to the majority's conclusion that Div 104 was compatible with Ch III because the Commonwealth Parliament cannot confer 129 Section 105A.7(1)(c) of the Criminal Code. 130 Section 105A.2 of the Criminal Code. 131 Anti-Terrorism Act (No 2) 2005 (Cth). 132 Thomas v Mowbray (2007) 233 CLR 307 at 330 [18]. 133 (2007) 233 CLR 307. 134 Item 1 of Sch 1 to the Criminal Code Amendment (High Risk Terrorist Offenders) Act 2016 (Cth), which relevantly commenced in 2017. 135 (2004) 223 CLR 575. anything but judicial power, or a power incidental to judicial power, in defining the jurisdiction of a federal court under s 77(i) of the Constitution136. Division 105A correspondingly can be compatible with Ch III only if, and to the extent that, the power to make a continuing detention order is judicial power within the meaning of s 71 of the Constitution. That is because of a corresponding incapacity of the Commonwealth Parliament to confer anything but judicial power, or a power incidental to judicial power, on a State court through the investiture of federal jurisdiction under s 77(iii)137 or on a Territory court through the investiture of federal jurisdiction under s 122 of the Constitution138. My conclusion is that the power to make a continuing detention order answers the description of judicial power within the meaning of s 71 of the Constitution only to the extent that the "serious Part 5.3 offence" to be prevented by the making of the order involves doing or supporting or facilitating a terrorist act. Explaining how I reach that conclusion, I begin by examining the context and content of the canonical observation in the joint reasons for judgment in Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs that, "exceptional cases" aside, "the involuntary detention of a citizen in custody by the State is penal or punitive in character and, under our system of government, exists only as an incident of the exclusively judicial function of adjudging and punishing criminal guilt"139. I then set out my understanding of the narrow basis on which the power to order continuing detention conferred by the legislation in issue in Fardon fell within the category of an "exceptional case" and contrast that power with the width of the power to order continuing detention conferred by Div 105A. Lim in context Nothing that has a history can be defined. Especially that is so of the concept of judicial power, which has been shown to "defy, perhaps it were better to say 136 R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254, affirmed in Attorney-General (Cth) v The Queen (1957) 95 CLR 529; [1957] AC 288. 137 Queen Victoria Memorial Hospital v Thornton (1953) 87 CLR 144 at 151-152; R v Murphy (1985) 158 CLR 596 at 614-615. 138 North Australian Aboriginal Legal Aid Service Inc v Bradley (2004) 218 CLR 146 at 163 [28]; North Australian Aboriginal Justice Agency Ltd v Northern Territory (2015) 256 CLR 569 at 615 [111]. 139 (1992) 176 CLR 1 at 27. transcend, purely abstract conceptual analysis", to "inevitably attract[] consideration of predominant characteristics" and to "invite[] comparison with the historic functions and processes of courts of law"140. Chapter III's separation of the judicial power of the Commonwealth from the legislative and executive powers of the Commonwealth compels us to recognise "that we have inherited and were intended by our Constitution to live under a system of law and government which has traditionally protected the rights of persons by ensuring that those rights are determined by a judiciary independent of the parliament and the executive"141. The historically observed incidents of those separated powers also compel us to recognise that when the Constitution "prescribes as a safeguard of individual liberty a distribution of the functions of government amongst separate bodies, and does so by requiring a distinction to be maintained between powers described as legislative, executive and judicial, it is using terms which refer, not to fundamental functional differences between powers, but to distinctions generally accepted at the time when the Constitution was framed between classes of powers requiring different 'skills and professional habits' in the authorities entrusted with their exercise"142. The point is not that the judicial power of the Commonwealth is frozen in time. The point is that contemporary exposition of that judicial power is necessarily informed by traditional practices within historical institutional structures143. Our inherited system of law and government has not drawn a rigid distinction between judicial power exercised in a civil proceeding and judicial power exercised in a criminal proceeding144. Traditionally, however, an important distinction has been drawn between other exercises of judicial power and the exercise of judicial power that occurs in a proceeding in respect of a matter in 140 R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361 at 394. 141 R v Quinn; Ex parte Consolidated Foods Corporation (1977) 138 CLR 1 at 11. 142 R v Davison (1954) 90 CLR 353 at 381-382. 143 cf Palmer v Ayres (2017) 259 CLR 478 at 504 [69]; Vella v Commissioner of Police (NSW) (2019) 93 ALJR 1236 at 1268 [141]; 374 ALR 1 at 40. 144 Witham v Holloway (1995) 183 CLR 525 at 534, 549; Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd (2003) 216 CLR 161 at 179 [56], which the life or liberty of an individual is put in jeopardy145. The importance of the distinction is given prominence within Ch III of the Constitution in the prescription of s 80 that "[t]he trial on indictment of any offence against any law of the Commonwealth shall be by jury". Traditionally, a proceeding on indictment is a proceeding in a matter between the State, represented by the executive, and an individual who is a citizen or subject of the State. The proceeding on indictment is "solemnly determined according to a procedure considered appropriate to the highest crimes by which the State may be affected and the gravest liabilities to which a subject may be exposed"146. Trial of an individual for an offence at the instigation of the executive, whether by jury or by judge alone, exhibits features recognised in numerous standard descriptions of judicial power to epitomise judicial power and to define its distinctiveness. The judiciary is called on in the trial to hear and authoritatively determine a controversy about an existing liability of the individual which is claimed by the executive to arise solely from the operation of some positive law on some past event or conduct147. Judicial determination of the controversy, whether by conviction or acquittal, creates a "new charter" by reference to which the controversy as to the existence or non-existence of the claimed liability of the individual is thereafter taken to be resolved between the State and the individual148. Deprivation of the liberty of the individual occurs only if the determination of the controversy is by conviction. Then it occurs only through the judicial pronouncement of a sentence which reflects the penal consequence prescribed by law for the liability determined by the conviction to have arisen from the operation of the positive law on the past event or conduct. 145 The Commonwealth v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482 at 516-518 [90]-[93]. 146 Munday v Gill (1930) 44 CLR 38 at 86. 147 Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330 at 357; R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361 at 374, 396; Re Cram; Ex parte Newcastle Wallsend Coal Co Pty Ltd (1987) 163 CLR 140 at 148-149; Precision Data Holdings Ltd v Wills (1991) 173 CLR 167 at 188; Ha v New South Wales (1997) 189 CLR 465 at 503-504; Vella v Commissioner of Police (NSW) (2019) 93 ALJR 1236 at 1270-1271 [152]; 374 ALR 1 at 43. 148 R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361 at 374. See Victorian Stevedoring and General Contracting Co Pty Ltd and Meakes v Dignan (1931) 46 CLR 73 at 106; New South Wales v Kable (2013) 252 CLR 118 at 139 [53]. Those standard incidents of the exercise of judicial power in the trial of an individual for an offence are "founded on deeply rooted notions of the relationship of the individual to the state going to the character of the national polity created and sustained by the Constitution"149. They render "beyond dispute that the power to determine whether a person has engaged in conduct which is forbidden by law and, if so, to make a binding and enforceable declaration as to the consequences which the law imposes by reason of that conduct lies at the heart of exclusive judicial power"150. The observation in Lim can only be understood in light of those standard incidents of the exclusively judicial function of adjudging and punishing criminal guilt. Although expressed in relation to the position of a "citizen", the observation applies equally to the position of an alien, except perhaps an enemy alien151. The opening part of the observation, that detention in custody is to be characterised as "penal or punitive" other than in "exceptional cases", is inextricably linked to the concluding part of the observation concerning the limited means by which involuntary detention of that character is constitutionally permitted to occur. That the detention is in consequence of an exercise of judicial power is not enough. Necessary, other than in "exceptional cases", is that the detention is in consequence of an exercise of judicial power that amounts to performance of "the exclusively judicial function of adjudging and punishing criminal guilt". The observation is not simply as to a division of power, but as to a limitation on power inherent in that division that is protective of liberty. Constitutional assignment of the function of imposing penal or punitive detention exclusively to the judicial power protects liberty by preventing detention in custody at the initiative of the executive other than through the agency of an independent and impartial tribunal according to a procedure that is fair and transparent. Constitutional assignment of that function exclusively to an exercise of judicial power involving adjudgment and punishment of criminal guilt further protects liberty by preventing detention in custody other than as the penal 149 Magaming v The Queen (2013) 252 CLR 381 at 400 [63]. 150 Re Nolan; Ex parte Young (1991) 172 CLR 460 at 497. See Waterside Workers' Federation of Australia v J W Alexander Ltd (1918) 25 CLR 434 at 444; Federal Commissioner of Taxation v Munro (1926) 38 CLR 153 at 175; Brandy v Human Rights and Equal Opportunity Commission (1995) 183 CLR 245 at 258, 269; Duncan v New South Wales (2015) 255 CLR 388 at 407 [41]. 151 Bradley v The Commonwealth (1973) 128 CLR 557 at 582-583; Re Minister for Immigration and Multicultural Affairs; Ex parte Te (2002) 212 CLR 162 at 197-199 consequence prescribed by law for an existing liability determined to have arisen from the operation of positive law on past events or conduct. Default characterisation of detention in custody as penal or punitive, and therefore as capable of imposition only through judicial pronouncement of a sentence that gives effect to the prescribed penal consequence for a liability determined to have arisen from the operation of positive law on past events or conduct152, underpins the protection of liberty by demanding constitutional justification for any detention in custody to be constitutionally permitted outside that paradigm. Description of cases in which detention in custody outside that paradigm is constitutionally permissible as "exceptional"153 emphasises the stringency of the justification required. The requirement for detention in custody to be justified as exceptional to escape characterisation as penal or punitive operates as a check on legislative and executive power against tendencies long recognised that have been borne out by experience. John Stuart Mill noted that "one of the undisputed functions of government" is "to take precautions against crime before it has been committed, as well as to detect and punish it afterwards". Mill also noted154: "The preventive function of government, however, is far more liable to be abused, to the prejudice of liberty, than the punitory function; for there is hardly any part of the legitimate freedom of action of a human being which would not admit of being represented, and fairly too, as increasing the facilities for some form or other of delinquency." To the same effect, Brandeis J, in a "famous dissent"155, said156: "Experience should teach us to be most on our guard to protect liberty when the Government's purposes are beneficent. Men born to freedom are naturally alert to repel invasion of their liberty by evil-minded rulers. The 152 North Australian Aboriginal Justice Agency Ltd v Northern Territory (2015) 256 CLR 569 at 611-612 [98]. 153 cf Chester v The Queen (1988) 165 CLR 611 at 618. 154 Mill, On Liberty (1859), quoted in Ashworth and Zedner, Preventive Justice (2014) 155 Carpenter v United States (2018) 138 S Ct 2206 at 2223. 156 Olmstead v United States (1928) 277 US 438 at 479. greatest dangers to liberty lurk in insidious encroachment by men of zeal, well-meaning but without understanding." Categories of exceptional cases of non-punitive detention in custody mentioned in Lim included cases of mental illness and infectious disease157. The outcome in Lim, recognising as consistent with Ch III conferral of a statutory power to detain an alien unlawfully in Australia pending either expulsion from Australia or grant of permission to remain in Australia, demonstrates that the categories of exceptional cases are not closed158. Detention might in some exceptional cases be authorised consistently with Ch III by Commonwealth legislation conferring on an executive officer a statutory power to detain159, exercise of which is subject to judicial review for jurisdictional error by this Court under s 75(v) of the Constitution. Detention might in other exceptional cases be authorised consistently with Ch III by Commonwealth legislation conferring on a court the "double function"160 of creating a liability to be detained through an act of adjudication "to be exercised according to legal principle or by reference to an objective standard or test prescribed by the legislature and not by reference to [unspecified] policy considerations"161, exercise of which is subject to appeal to this Court under s 73 of the Constitution. Whether conferral on a court of a function of creating a liability to be detained in custody through an act of adjudication in a novel category of case falls within Lim's reference to "exceptional cases" turns on the constitutional acceptability of the justification for that conferral. Evaluation of a proffered justification must proceed upon an acceptance that the Constitution was framed as "an instrument of government meant to endure and conferring powers expressed 157 (1992) 176 CLR 1 at 28. 158 See also Vasiljkovic v The Commonwealth (2006) 227 CLR 614 at 630-631 [37], 159 North Australian Aboriginal Justice Agency Ltd v Northern Territory (2015) 256 CLR 569 at 611-612 [98]-[99]; Plaintiff M96A/2016 v The Commonwealth (2017) 261 CLR 582 at 593 [21]. 160 R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett (1945) 70 CLR 141 at 165. 161 Re Dingjan; Ex parte Wagner (1995) 183 CLR 323 at 360, quoting Precision Data Holdings Ltd v Wills (1991) 173 CLR 167 at 191. See also Vella v Commissioner of Police (NSW) (2019) 93 ALJR 1236 at 1272-1275 [158]-[172]; 374 ALR 1 at 44- in general propositions wide enough to be capable of flexible application to changing circumstances"162 and must be sensitive to the reality that "the exercise of powers, independently, impartially and judicially, especially when such powers affect the liberty of the individual, would ordinarily be regarded as a good thing, not something to be avoided"163. Essential to acceptance of any proffered justification for any detention in custody otherwise than as a result of adjudgment and punishment of criminal guilt, however, must be that the detention authorised is "reasonably capable of being seen as necessary for a legitimate non-punitive objective"164. Here, as elsewhere in constitutional law, the legislative objective is what the impugned law is designed to achieve in fact165. Here, as elsewhere in constitutional law, the legitimacy of the legislative objective falls to be determined by reference to the compatibility of what the impugned law is designed to achieve in fact with values protected by the constitutional principle to be applied166. And here, as elsewhere in constitutional law, the "concern is with substance and not mere form"167. Prevention of harm is a legitimate non-punitive objective, at least where the harm is grave and specific. Mere prevention of commission of a criminal offence is not. Both of those propositions are illustrated by the reasoning in Fardon, to which I now turn. 162 Australian National Airways Pty Ltd v The Commonwealth (1945) 71 CLR 29 at 81. 163 Thomas v Mowbray (2007) 233 CLR 307 at 329 [17]. See also Vella v Commissioner of Police (NSW) (2019) 93 ALJR 1236 at 1272 [158]; 374 ALR 1 at 44. 164 Kruger v The Commonwealth (1997) 190 CLR 1 at 162, citing Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1 at 33, 46, 56, 65, 71. See also Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 653-654 [215]; Falzon v Minister for Immigration and Border Protection (2018) 262 CLR 333 at 343 [27]. 165 McCloy v New South Wales (2015) 257 CLR 178 at 232 [132]; Brown v Tasmania (2017) 261 CLR 328 at 392 [209]; Spence v Queensland (2019) 93 ALJR 643 at 665 [60]; 367 ALR 587 at 605. 166 cf McCloy v New South Wales (2015) 257 CLR 178 at 231 [130]. 167 Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1 at 27. Fardon Ultimately in issue in Fardon was compatibility with Ch III of conferral on the Supreme Court of Queensland by the Parliament of Queensland of power to order continuing detention of a prisoner who the Supreme Court was satisfied was a "serious danger to the community" by reason of there being "an unacceptable risk" that the prisoner would commit "an offence of a sexual nature ... involving violence [or] against children" if released from custody168. Compatibility with Ch III fell to be determined by reference to the principle in Kable v Director of Public Prosecutions (NSW)169. Stated at its highest level of generality, the Kable principle is that Ch III implies that a "court" of a State or Territory must be and be seen to be an independent and impartial tribunal in order to be an available repository of the judicial power of the Commonwealth170. No part of the principle is to deny the validity of conferral on a State or Territory court by State or Territory legislation of a function merely because performance of that function would involve the court in an exercise of non-judicial power171. The Kable principle is infringed by purported conferral on a State or Territory court or judicial officer by State or Territory legislation of any function β whether judicial172 or non-judicial173 β which "substantially impairs" the "institutional integrity" of the court174. Because the limitation placed by the principle on State and Territory legislative power is less β not greater β than that 168 Section 13 of the Dangerous Prisoners (Sexual Offenders) Act 2003 (Qld) read with the definition of "serious sexual offence" in the Schedule to that Act. 169 (1996) 189 CLR 51. 170 North Australian Aboriginal Legal Aid Service Inc v Bradley (2004) 218 CLR 146 at 163 [29]; Forge v Australian Securities and Investments Commission (2006) 228 CLR 45 at 81 [78]; Vella v Commissioner of Police (NSW) (2019) 93 ALJR 1236 at 1268 [138]-[139]; 374 ALR 1 at 39. 171 K-Generation Pty Ltd v Liquor Licensing Court (2009) 237 CLR 501 at 544 [153]. 172 eg s 5 of the Community Protection Act 1994 (NSW), considered in Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51. 173 eg s 9 of the Crimes (Criminal Organisations Control) Act 2009 (NSW), considered in Wainohu v New South Wales (2011) 243 CLR 181. 174 Attorney-General (NT) v Emmerson (2014) 253 CLR 393 at 424 [40]. placed on Commonwealth legislative power, the principle cannot be infringed by a State or Territory law unless a hypothetical Commonwealth law conferring the same function would also be invalid as incompatible with Ch III175. That was the context in which the Attorney-General of the Commonwealth, intervening in Fardon, advanced the argument that the power to order continuing detention of a prisoner conferred by the State law in issue could have been conferred by a hypothetical Commonwealth law enacted under s 77(iii)176. The argument was squarely addressed only by Gummow J, with whom Kirby J in dissent agreed177. Although Gummow J was part of the majority which held that the conferral of power under the State law in issue did not infringe the Kable principle, his Honour rejected the argument that the power could have been conferred by a hypothetical Commonwealth law. Taking the view that "detention by reason of apprehended conduct, even by judicial determination on a quia timet basis ... is at odds with the central constitutional conception of detention as a consequence of judicial determination of engagement in past conduct"178, his Honour concluded that "[t]he vice for a Ch III court and for the federal laws postulated ... would be in the nature of the outcome, not the means by which it was obtained"179. Gummow J expressed scepticism about the utility of persisting in labelling an unjustified deprivation of liberty without adjudication of criminal guilt as "penal or punitive"180. Because I believe that traditional labels can convey underlying values181, and because I believe that limiting the permissible means of inflicting State-sanctioned punishment underlies the traditional assignment of detention in custody to the exclusive exercise of judicial power involving adjudication and 175 H A Bachrach Pty Ltd v Queensland (1998) 195 CLR 547 at 561-562 [14]; Silbert v Director of Public Prosecutions (WA) (2004) 217 CLR 181 at 186 [9]-[11], 194 [39]; Baker v The Queen (2004) 223 CLR 513 at 526-527 [22]-[24]. 176 (2004) 223 CLR 575 at 580. 177 (2004) 223 CLR 575 at 608-614 [68]-[89], 631 [145]. 178 (2004) 223 CLR 575 at 613 [84]. 179 (2004) 223 CLR 575 at 614 [85]. 180 (2004) 223 CLR 575 at 612-613 [81]. See also Al-Kateb v Godwin (2004) 219 CLR 181 cf Wei v Minister for Immigration and Border Protection (2015) 257 CLR 22 at 32- 33 [24]; Hossain v Minister for Immigration and Border Protection (2018) 264 CLR punishment of criminal guilt, that is not a scepticism I share. Nothing turns on that difference in perspective. Though I consider Gummow J ultimately to have been wrong to reject the argument of the Attorney-General of the Commonwealth, I consider his Honour to have been correct to reject the argument to the extent of the reasons he gave. To admit of the potential for judicial power to be used to detain an individual in custody merely because that individual poses an unacceptable risk of committing a criminal offence in the future would be directly at odds with Ch III's limitation of detention in custody to the penal consequence prescribed by law for an existing liability determined to have arisen from the operation of positive law on past events or conduct. If liberty is protected by a constitutional structure which limits detention in custody to the penal consequence of an offence determined by a court to have been committed in the past, then liberty would be subverted by an exception to the operation of that limitation cast in terms which would authorise detention in custody to prevent commission of an offence determined by a court to be at risk of being committed in the future. For that reason, the objective merely of preventing commission of a criminal offence cannot be legitimate. The basis on which I consider his Honour to have been wrong to reject the argument of the Attorney-General of the Commonwealth is that evaluation of the substantive operation of the hypothesised Commonwealth law necessitated that attention be given to the harm inherent in the criminal conduct which the Supreme Court needed to be satisfied that a prisoner posed an unacceptable risk of committing before subjecting the prisoner to a continuing detention order. Despite the conferral of power to make a continuing detention order being couched in terms of preventing the future commission of an offence, the substance of what a continuing detention order was designed to achieve in fact β and the substance of what a continuing detention order was reasonably capable of being seen as necessary to achieve in fact β was to protect "public safety"182. More specifically, in language adopted by Gleeson CJ, a continuing detention order under the Fardon regime fell within the description of a "preventive restraint to deal with the case of a person who has been convicted of violent crime and who, while not legally insane, might represent a grave threat to the safety of other people by reason of mental abnormality if he were to be released as a matter of course at the end of what represents a proper punitive sentence"183. On that limited basis, I consider that the power to make a continuing detention order under the Fardon regime could have been conferred as part of the 182 (2004) 223 CLR 575 at 654 [217]. 183 (2004) 223 CLR 575 at 588-589 [9], quoting Veen v The Queen [No 2] (1988) 164 CLR 465 at 495. See also (2004) 223 CLR 575 at 592 [20]. judicial power of the Commonwealth by a hypothetical law in the same terms enacted by the Commonwealth Parliament. My conclusion that the power to order continuing detention conferred by the legislation in issue in Fardon could have been conferred as part of the judicial power of the Commonwealth is not assisted by anything in the reasoning in New South Wales v Kable184, despite the attention devoted to that case in the argument of the parties. The result in that case did not turn on the proposition that the power to order the continuing detention of Mr Kable was compatible with Ch III; precisely the opposite had been determined in Kable v Director of Public Prosecutions (NSW)185. The result turned on the order for the continuing detention of Mr Kable being a purported judicial order of the Supreme Court of New South Wales which derived legal force and effect from the time it was made until the time that it was set aside as unconstitutional, not from the unconstitutional legislation pursuant to which the Supreme Court purported to make it but from the constitutional status of the Supreme Court as a superior court of record186. Division 105A The power to make a control order was characterised by members of the majority in Thomas v Mowbray as a form of "preventive justice" permissibly conferred as judicial power187. Consistently with the power to order continuing detention conferred by the legislation in issue in Fardon, what was sought to be prevented by an exercise of the power was not occurrence of an offence but occurrence of an act which of its nature would cause serious harm. As originally inserted and as considered in Thomas v Mowbray, Div 104 identified as its sole object "to allow obligations, prohibitions and restrictions to be imposed on a person by a control order for the purpose of protecting the public from a terrorist act"188. Essential to the making of a control order was that the issuing court be "satisfied on the balance of probabilities that each of the obligations, prohibitions and restrictions to be imposed on the person by the order 184 (2013) 252 CLR 118. 185 (1996) 189 CLR 51. 186 (2013) 252 CLR 118 at 134 [36], 139-140 [53]-[55]. 187 (2007) 233 CLR 307 at 328-330 [16]-[18], 356-357 [114]-[121], 507 [595], 526 188 Section 104.1 of the Criminal Code, as discussed in Thomas v Mowbray (2007) 233 CLR 307 at 337 [43]. is reasonably necessary, and reasonably appropriate and adapted, for the purpose of protecting the public from a terrorist act"189. The object of the Division190, and correspondingly what an issuing court must be satisfied that each obligation, prohibition and restriction to be imposed by a control order is reasonably necessary and reasonably appropriate and adapted to achieve191, has since 2015192 been expressed to include in relevant alternative "preventing the provision of support for or the facilitation of a terrorist act". The legislative identification of what is sought to be prevented by the making of a control order has nevertheless remained prevention of a terrorist act. Division 105A is designedly different. The expressed object of the Division is "to ensure the safety and protection of the community", not by providing for the continuing detention of terrorist offenders who pose an unacceptable risk of engaging in a terrorist act or of providing support for or facilitating a terrorist act, but "by providing for the continuing detention of terrorist offenders who pose an unacceptable risk of committing serious Part 5.3 offences"193. Correspondingly, what a Supreme Court is required to be satisfied of before making a continuing detention order is identified not in terms of an unacceptable risk of a terrorist act but in terms of an unacceptable risk of commission of a serious Pt 5.3 offence194. The difference would be of no constitutional moment if each serious Pt 5.3 offence within the purview of Div 105A, like each serious sexual offence within the purview of the legislation considered in Fardon, involved conduct which of its nature gave rise to the serious harm which the offence was created to avoid. The risk of commission of a serious Pt 5.3 offence could then be treated as a proxy for the risk of a terrorist act just as the risk of commission of a serious sexual offence as defined in the legislation in issue in Fardon was able to be treated as a proxy for the risk of sexual conduct involving violence or against children. Some serious Pt 5.3 offences involve conduct of that nature. Others do not. The prophylactic approach taken to the imposition of criminal liability has the effect already noted 189 Section 104.4(1)(d) of the Criminal Code, as discussed in Thomas v Mowbray (2007) 233 CLR 307 at 342 [64]. 190 Section 104.1(a) and (b) of the Criminal Code. 191 Section 104.4(1)(d)(i) and (ii) of the Criminal Code. 192 Counter-Terrorism Legislation Amendment Act (No 1) 2014 (Cth), which relevantly commenced in 2015. 193 Section 105A.1 of the Criminal Code. 194 Section 105A.7(1)(b) and (c) of the Criminal Code. that a serious Pt 5.3 offence can involve conduct many steps removed from doing or supporting or facilitating any terrorist act. The parliamentary record contains in a revised explanatory memorandum a description of the nature of the regime intended to be established by Div 105A. The terms of the description pointed to a constitutionally legitimate non-punitive objective which aligns with the statutorily expressed object of Div 104. Division 105A was described in the revised explanatory memorandum as a "means to protect the community from the risk of terrorist acts"195. The difficulty in determining whether Div 105A is reasonably capable of being seen as necessary for a legitimate non-punitive objective lies in the lack of close correspondence between the ultimate non-punitive objective of protecting against terrorist acts and the immediate statutory object of preventing serious Pt 5.3 offences. Instead of directly addressing the risk of terrorist acts to be averted in the targeted manner of Div 104, Div 105A overlays a new regime of civil preventive detention onto an existing regime of prophylactic crimes. The scheme of Div 105A was refined in the parliamentary process which resulted in its insertion. One refinement was to remove offences unrelated to terrorism from the range of offences unacceptable risk of occurrence of which might found a continuing detention order196. How the offences that remained came to include all offences carrying a maximum penalty of seven or more years of imprisonment does not emerge from the parliamentary record and is remarkable given that none of the offences created by those provisions is expressed to carry a maximum penalty of seven years. The explanation appears to be that the definition of "serious Part 5.3 offence" was drafted to mirror the definition of "serious sex offence" in some State legislation based on the Fardon model197 without discrimination as to the nature of the conduct involved in each offence. By adapting the model of the legislation considered in Fardon, the Commonwealth Parliament has extrapolated from continuing detention to protect 195 Australia, House of Representatives, Criminal Code Amendment (High Risk Terrorist Offenders) Bill 2016, Revised Explanatory Memorandum at 3. 196 Australia, Senate, Criminal Code Amendment (High Risk Terrorist Offenders) Bill 2016, Supplementary Explanatory Memorandum at 3, 13. 197 See eg s 5(1)(a)(i) of the Crimes (High Risk Offenders) Act 2006 (NSW) (as to the provenance of which see Tulich, "Post-Sentence Preventive Detention and Extended Supervision of High Risk Offenders in New South Wales" (2015) 38 University of New South Wales Law Journal 823 at 829-832) and the definition of "serious sexual offence" in s 106A of the Evidence Act 1906 (WA) adopted in s 3(1) of the Dangerous Sexual Offenders Act 2006 (WA). against a narrow category of inherently harmful criminal conduct to continuing detention to prevent criminal conduct remote from the terrorist acts against which protection is sought to be provided. The exceptional case of detention in custody otherwise than as punishment for a past offence has in the result become unexceptional in relation to offences having some (even very remote) connection to a potential terrorist act. Because the burden of restrictions on liberty imposed in pursuit of national security are likely to fall on a few for the benefit of many, political constraints on the exercise of legislative power cannot be presumed to limit the design of legislation enacted in the interests of national security in a manner that is protective of individual liberty to the extent entailed by the constitutional commitment of separated judicial power to institutions immunised from the political processes. Through the legislative establishment of the Office of the Independent National Security Legislation Monitor, provision has been made for independent review and reporting on the effectiveness and implications of Div 105A, including by reference to its impact on "the rights of individuals"198. The Parliamentary Joint Committee on Intelligence and Security is also required to review Div 105A199. Neither the Independent National Security Legislation Monitor nor the Parliamentary Joint Committee on Intelligence and Security has yet reported on Div 105A. Whether Div 105A complies with the constitutional principle identified by the observation in Lim, however, is a question irrevocably committed to judicial determination. Neither the "respect which the judicial organ must accord to opinions of the legislative and executive organs"200 nor the potential for the outcome to turn on a contestable judgment of degree alleviates the judicial responsibility to undertake the close scrutiny of legislation necessary to provide an answer. Conclusion No part of my reasoning is to suggest that the power to make a continuing detention order is incapable of reasonably being seen to be necessary for the constitutionally legitimate non-punitive objective of protecting against terrorist acts in all its applications. And no part of my reasoning is to suggest that a bright line can be drawn around those Pt 5.3 offences unacceptable risk of commission of which can be taken to indicate an unacceptable risk of the occurrence of a 198 Independent National Security Legislation Monitor Act 2010 (Cth), s 6(1)(a)(ia) and (b)(i). 199 Intelligence Services Act 2001 (Cth), s 29(1)(cb). 200 Australian Communist Party v The Commonwealth (1951) 83 CLR 1 at 263. terrorist act or support for or facilitation of a terrorist act. Compliance with the principle identified by the observation in Lim nevertheless requires that a line be drawn. Without undermining the scheme of Div 105A, the reference in the definition of "serious Part 5.3 offence" to "an offence against" Pt 5.3 can be given a distributive construction to include those offences which fall on one side of the line and exclude those offences which fall on the other side of the line. Because the reference can be so construed, s 15A of the Acts Interpretation Act 1901 (Cth) requires that it be so construed201. However, nothing would be served by embarking on that subsidiary and contingent exercise of construction in dissenting reasons for judgment unassisted by argument and absent material having the potential to reveal relevant statutory and constitutional facts. Enough by way of conclusion is that I indicate that I would answer the question removed to the effect that Div 105A is not wholly compatible with Ch III of the Constitution. I would order the Minister to pay Mr Benbrika's costs. 201 Australian National Airways Pty Ltd v The Commonwealth (1945) 71 CLR 29 at 93; Victoria v The Commonwealth (Industrial Relations Act Case) (1996) 187 CLR 416 103 GORDON J. This case raises issues of "vital constitutional importance"202 being faced by many democratic states in the modern age. Immediately, the issues concern the legislative responses to "terrorism". More fundamentally, they are issues about adherence to the rule of law. In Australia, that includes the maintenance of the system of law and government prescribed by the Constitution of the Commonwealth; with a judiciary, as the "bulwark of freedom", which traditionally and historically adjudges the most basic of rights upon the determination of criminal guilt203. On 15 September 2008, the respondent, Mr Benbrika, was convicted after a trial of having committed two offences between July 2004 and November 2005, namely, intentionally being a member of a terrorist organisation and intentionally directing the activities of a terrorist organisation, in both cases knowing that it was a terrorist organisation, contrary to ss 102.3(1) and 102.2(1) of the Criminal Code (Cth). Each offence is a "serious Part 5.3 offence"204 within the meaning of s 105A.2 of the Criminal Code. The respondent was sentenced to a total effective sentence of 15 years' imprisonment with a non-parole period of 12 years. Parole was never granted. The respondent's sentence was due to expire on 5 November 2020. On 4 September 2020, the Minister for Home Affairs ("the Minister") applied to the Supreme Court of Victoria under s 105A.5 of the Criminal Code, for orders in respect of the respondent that a continuing detention order ("CDO") be made pursuant to s 105A.7(1), and that an interim detention order be made pursuant to s 105A.9(2). On 8 October 2020, Tinney J reserved a question in the proceeding for the consideration of the Court of Appeal pursuant to s 17B(2) of the Supreme Court Act 1986 (Vic), concerning the validity of Div 105A of the Criminal Code. On 27 October 2020, Tinney J made an interim detention order pursuant to s 105A.9 of the Criminal Code. That interim order was in force from 5 November 2020 to 2 December 2020 but was extended by a further interim order to 30 December 2020. On 24 December 2020, after the hearing before this Court, 202 The Commonwealth v Cigamatic Pty Ltd (In liq) (1962) 108 CLR 372 at 389; Queensland v The Commonwealth (1977) 139 CLR 585 at 630. 203 R v Quinn; Ex parte Consolidated Foods Corporation (1977) 138 CLR 1 at 11. See also R v Davison (1954) 90 CLR 353 at 381-382. 204 Defined to mean "an offence against [Pt 5.3], the maximum penalty for which is 7 or more years of imprisonment": Criminal Code, s 105A.2 definition of "serious Part 5.3 offence". Tinney J made a CDO pursuant to s 105A.7(1) of the Criminal Code205. Subject to the outcome of any appeal from that order, the CDO will be in force for a period of three years and the effect of the CDO is to commit the respondent to detention in a prison206. On 1 December 2020, in a separate proceeding brought by the Assistant Commissioner of the Australian Federal Police in the Federal Court of Australia, Besanko J made an interim control order pursuant to s 104.4 of the Criminal Code207. On 30 October 2020, Nettle J ordered that, pursuant to s 40 of the Judiciary Act 1903 (Cth), the question reserved for the consideration of the Court of Appeal be removed into this Court. The question reserved is as follows: "Is all or any part of Division 105A of the Criminal Code (Cth) and, if so, which part, invalid because the power to make a continuing detention order under section 105A.7 of the Code is not within the judicial power of the Commonwealth and has been conferred, inter alia, on the Supreme Court of Victoria contrary to Chapter III of the Commonwealth Constitution?" The respondent submitted that Div 105A is invalid in its entirety. The Attorney-General of the Commonwealth, intervening in support of the Minister, submitted that the question reserved should be answered "No". The Minister adopted the Commonwealth's submissions. For the reasons that follow, I would answer the question reserved as follows: "Division 105A of the Criminal Code (Cth) is wholly invalid because the power to make a continuing detention order under s 105A.7 is not within the judicial power of the Commonwealth and is contrary to Ch III of the Commonwealth Constitution." Security of the Commonwealth and terrorism Chapter 5 of the Commonwealth", comprises six parts: "Treason and related offences"208; the Criminal Code, headed "The security of 205 Minister for Home Affairs v Benbrika [2020] VSC 888 at [478]. 206 Minister for Home Affairs v Benbrika [2020] VSC 888 at [479]-[480]. 207 Lee v Benbrika [2020] FCA 1723. 208 Criminal Code, Ch 5, Pt 5.1. "Espionage and related offences"209; "Terrorism"210; "Harming Australians"211; "Foreign incursions and recruitment"212; and "Secrecy of information"213. This case is concerned with Pt 5.3, headed "Terrorism"214. The constitutional basis for the operation of Pt 5.3 is addressed in ss 100.3 and 100.8 in Pt 5.3: it includes a referral of powers by the States and Territories to the extent that they are not otherwise included in the legislative powers of the Commonwealth Parliament and, relatedly, that no amendment to Pt 5.3 can be made unless it is approved by a majority of the States and Territories (which majority must include at least four States)215. 209 Criminal Code, Ch 5, Pt 5.2. 210 Criminal Code, Ch 5, Pt 5.3. 211 Criminal Code, Ch 5, Pt 5.4. 212 Criminal Code, Ch 5, Pt 5.5. 213 Criminal Code, Ch 5, Pt 5.6. 214 In 2002, as part of a national scheme of anti-terrorism legislation, each State enacted legislation referring certain matters relating to terrorist acts to the Parliament of the Commonwealth for the purposes of s 51(xxxvii) of the Constitution: Terrorism (Commonwealth Powers) Act 2002 (NSW), s 1(2); Terrorism (Commonwealth Powers) Act 2003 (Vic), s 1; Terrorism (Commonwealth Powers) Act 2002 (SA), s 1(2); Terrorism (Commonwealth Powers) Act 2002 (Qld), s 1(2); Terrorism (Commonwealth Powers) Act 2002 (WA), s 1(2); Terrorism (Commonwealth Powers) Act 2002 (Tas), s 3. See also The Commonwealth of Australia, The State of New South Wales, The State of Victoria, The State of Queensland, The State of Western Australia, The State of South Australia, The State of Tasmania, The Australian Capital Territory and The Northern Territory of Australia, Agreement on Counter-terrorism Laws, 25 June 2004. The nature and effect of these referrals were not addressed in argument. 215 See, eg, Terrorism (Commonwealth Powers) Act 2003 (Vic), s 3 definitions of "express amendment" and "terrorism legislation". Divisions 104 and 105 β Control orders, preventative detention orders and "terrorist acts" When Pt 5.3 was inserted into the Criminal Code in 2003216, it did not contain Div 104, 105217 or 105A, which were later inserted218. Division 104 provides for the making of control orders, which impose obligations, prohibitions and restrictions on a person's liberty short of detention in prison, for the purpose, among others, of "protecting the public from a terrorist act" or "preventing the provision of support for or the facilitation of a terrorist act"219. Division 105 provides for the making of preventative detention orders, which allow a person to be taken into custody and detained in a prison for a short period of time in order to "prevent a terrorist act that is capable of being carried out, and could occur, within the next 14 days from occurring" or to "preserve evidence of, or relating to, a recent terrorist act"220. Both Divs 104 and 105 are expressed to be directed at protecting the public from certain kinds of acts β terrorist acts, or, in the case of Div 104, terrorist acts or providing support for or facilitation of a terrorist act. As will later appear, the division in issue in this case, Div 105A, is expressed to be directed at preventing the commission of identified offences. For the purpose of Pt 5.3, a "terrorist act" is defined in s 100.1(1) to mean: "an action or threat of action where: the action falls within subsection (2) and does not fall within subsection (3); and the action is done or the threat is made with the intention of advancing a political, religious or ideological cause; and 216 Criminal Code Amendment (Terrorism) Act 2003 (Cth), Sch 1. 217 Divisions 104 and 105 were inserted into Pt 5.3 by the Anti-Terrorism Act (No 2) 2005 (Cth), Sch 4, item 24. See also Council of Australian Governments, Council of Australian Governments' CommuniquΓ©: Special Meeting on Counter-Terrorism, Canberra, 27 September 2005. 218 Division 105A was inserted into Pt 5.3 by the Criminal Code Amendment (High Risk Terrorist Offenders) Act 2016 (Cth), Sch 1, item 1. See also Australia, Senate, Parliamentary Debates (Hansard), 15 September 2016 at 1035-1036. 219 Criminal Code, s 104.1. See also Thomas v Mowbray (2007) 233 CLR 307 at 325 220 Criminal Code, s 105.1. the action is done or the threat is made with the intention of: coercing, or influencing by intimidation, the government of the Commonwealth or a State, Territory or foreign country, or of part of a State, Territory or foreign country; or intimidating the public or a section of the public." (emphasis added) Sub-section (2) of s 100.1 provides that an "action" can be a terrorist act if it: causes serious harm that is physical harm to a person; or causes serious damage to property; or causes a person's death; or endangers a person's life, other than the life of the person taking the action; or creates a serious risk to the health or safety of the public or a section of the public; or seriously interferes with, seriously disrupts, or destroys, an electronic system including, but not limited to: an information system; or a telecommunications system; or (iii) a financial system; or a system used for the delivery of essential government services; or a system used for, or by, an essential public utility; or a system used for, or by, a transport system." Section 100.1(3) provides further that an "action" that is "advocacy, protest, dissent or industrial action" falls outside the definition of "terrorist act" in sub-s (1) if the advocacy, protest, dissent or industrial action is not intended to: cause serious harm that is physical harm to a person; cause a person's death; endanger the life of a person, other than the person taking the action; or create a serious risk to the health or safety of the public or a section of the public. As is apparent, a wide range of conduct falls within a "terrorist act". It includes an action done or a threat made with the intention of advancing a political, religious or ideological cause where the action is done, or the threat is made, with an intention, among other things, of coercing, or influencing by intimidation, the government of the Commonwealth or a State, Territory or foreign country, or of part of a State, Territory or foreign country, or intimidating the public or a section of the public. A "terrorist act" also includes "all actions or threats of action that constitute terrorist acts (no matter where the action occurs, the threat is made or the action, if carried out, would occur)"221. More generally, Pt 5.3 applies to "preliminary acts", relevantly defined as "all actions ... that relate to terrorist acts but [which] do not themselves constitute terrorist acts (no matter where the preliminary acts occur and no matter where the terrorist acts to which they relate occur or would occur)"222. Division 105A β CDOs and "serious Part 5.3 offences" Division 105A, with which this case is concerned, was inserted into the Criminal Code in 2017223. It establishes a scheme, the object of which is "to ensure the safety and protection of the community by providing for the continuing detention of terrorist offenders who pose an unacceptable risk of committing serious Part 5.3 offences if released into the community"224. It provides for the making of a CDO, which commits a terrorist offender to detention in prison225 while the order is in force226. A "terrorist offender" includes certain persons convicted of a "serious Part 5.3 offence"227. A "serious Part 5.3 offence" is an 221 Criminal Code, s 100.4(1)(a); see also s 101.1(2). 222 Criminal Code, s 100.4(1)(b). 223 Criminal Code Amendment (High Risk Terrorist Offenders) Act 2016 (Cth), Sch 1, item 1. 224 Criminal Code, s 105A.1. 225 Defined to include "any gaol, lock-up or other place of detention": Criminal Code, s 105A.2 definition of "prison". 226 Criminal Code, s 105A.3(2). 227 Criminal Code, ss 105A.3(1)(a)(iii), 105A.3(1)(b), 105A.3(1)(c). offence against Pt 5.3 where the maximum penalty is seven or more years of The scheme established under Div 105A has the following features. Power to make a CDO Section 105A.3(1) provides that a person may be subject to a CDO only if: they have been convicted of one of a number of specific offences which are generally terrorism-related offences committed in Australia or elsewhere229; the person is detained in custody and serving a sentence for that offence, has been continuously in custody since being convicted for that offence or is subject to a CDO or interim detention order that is still in force230; and if in custody serving a sentence, will be at least 18 years old upon the expiry of the sentence231. Only the Minister, or a legal representative of the Minister, may apply to a Supreme Court of a State or Territory for a CDO in relation to a terrorist offender232. The application may not be made more than 12 months before the end of a sentence of imprisonment that the offender is serving, at the end of which the offender would be required to be released into the community233. Under s 105A.7(1), a Supreme Court of a State or Territory may make a CDO. It is necessary to set out its text to understand the structure that has been created. The sub-section provides: "A Supreme Court of a State or Territory may make a written order under this subsection if: an application is made in accordance with section 105A.5 for a [CDO] in relation to a terrorist offender; and after having regard to matters in accordance with section 105A.8, the Court is satisfied to a high degree of probability, on the basis of 228 Criminal Code, s 105A.2 definition of "serious Part 5.3 offence". 229 Criminal Code, s 105A.3(1)(a). 230 Criminal Code, s 105A.3(1)(b). 231 Criminal Code, s 105A.3(1)(c)-(d). 232 Criminal Code, s 105A.5(1). 233 Criminal Code, s 105A.5(2). Section 105A.5 contains other requirements that must be met. They are presently not in issue. admissible evidence, that the offender poses an unacceptable risk of committing a serious Part 5.3 offence if the offender is released into the community; and the Court is satisfied that there is no other less restrictive measure that would be effective in preventing the unacceptable risk. Note 1: An example of a less restrictive measure is a control order. Note 2: The rules of evidence and procedure for civil matters apply when the Court has regard to matters in accordance with section 105A.8, as referred to in paragraph (1)(b) of this section (see subsection 105A.8(3) and section 105A.13)." (emphasis added) The Minister bears the onus of satisfying the Court of the matters in s 105A.7(1)(b) and (c)234. In deciding whether the Court is satisfied that there is an "unacceptable risk" pursuant to s 105A.7(1)(b), the Supreme Court must have regard to the matters set out in s 105A.8(1), which are as follows: the safety and protection of the community; any report received from a relevant expert under section 105A.6 in relation to the offender, and the level of the offender's participation in the assessment by the expert; the results of any other assessment conducted by a relevant expert of the risk of the offender committing a serious Part 5.3 offence, and the level of the offender's participation in any such assessment; any report, relating to the extent to which the offender can reasonably and practicably be managed in the community, that has been prepared by: the relevant State or Territory corrective services; or any other person or body who is competent to assess that extent; any treatment or rehabilitation programs in which the offender has had an opportunity to participate, and the level of the offender's participation in any such programs; 234 Criminal Code, s 105A.7(3). the level of the offender's compliance with any obligations to which he or she is or has been subject while: on release on parole for any offence referred to in paragraph 105A.3(1)(a); or subject to a [CDO] or interim detention order; the offender's history of any prior convictions for, and findings of guilt made paragraph 105A.3(1)(a); to, any offence referred relation the views of the sentencing court at the time any sentence for any offence referred to in paragraph 105A.3(1)(a) was imposed on the offender; any other information as to the risk of the offender committing a serious Part 5.3 offence." The Court, however, is not prevented from having regard to any other matter that the Court considers relevant235. By way of summary, a CDO may be made, relevantly, in relation to a person who has been convicted of one of a number of specific offences which are generally terrorism-related offences committed in Australia or elsewhere, who is detained in custody and serving a sentence of imprisonment or in respect of whom a CDO or interim detention order is in force236. Where an application for a CDO is made in accordance with Div 105A, a Supreme Court of a State or Territory is conferred with a power to make such an order if, having regard to matters set out in s 105A.8, the Court is "satisfied to a high degree of probability, on the basis of admissible evidence, that the offender poses an unacceptable risk of committing a serious Part 5.3 offence if the offender is released into the community" and the Court is "satisfied that there is no other less restrictive measure that would be effective in preventing the unacceptable risk"237 (emphasis added). 235 Criminal Code, s 105A.8(2). 236 Criminal Code, s 105A.3(1). 237 Criminal Code, s 105A.7(1). Conduct of CDO proceedings The conduct of CDO proceedings is specifically addressed in Subdiv E of Div 105A. The Subdivision provides for notice of the proceedings to be given to the terrorist offender and addresses their legal representation238. The rules of evidence and procedure for civil matters apply239. And a party to a CDO proceeding may adduce evidence and make submissions to the Court240. Duration of a CDO and periodic review A CDO commits the offender to detention in prison while the order is in force241. Although s 105A.7(5) provides that the maximum duration of the CDO is no more than three years, s 105A.7(6) provides that a Court may make successive CDOs. Sections 105A.10 and 105A.11 provide for periodic review of CDOs every 12 months, and otherwise on application by an offender if the Court is satisfied either that there are new facts or circumstances justifying a review or that it is in the interests of justice to review the CDO. Reasons and right of appeal A Court that makes a CDO must state the reasons for its decision242. An appeal by way of rehearing of a decision to make a CDO lies as of right to the court of appeal of a State or Territory if the court of appeal has jurisdiction to hear appeals from the Supreme Court in relation to civil matters243. Other features Division 105A provides that a Court that is sentencing a person who is convicted, relevantly, of a serious Part 5.3 offence must warn the person that an application may be made under the Division for a CDO requiring the person to be 238 Criminal Code, ss 105A.15 and 105A.15A; see also s 105A.5(4). 239 Criminal Code, s 105A.13(1). 240 Criminal Code, s 105A.14. 241 Criminal Code, s 105A.3(2). 242 Criminal Code, s 105A.16. 243 Criminal Code, s 105A.17. detained in a prison after the end of the person's sentence244. However, a failure by the Court to give such a warning does not affect the validity of the sentence for the offence or prevent an application for a CDO being made under the Division245. It is, of course, also necessary to notice that Div 105A (except for the warning provision to which reference has just been made) applies retrospectively and thus applies to the respondent because he was a person who, when the Division commenced, was detained in custody and serving a sentence of imprisonment for a serious Part 5.3 offence246. Consideration of the respondent's contention that Div 105A is inconsistent with Ch III of the Constitution requires examination of the legal and practical operation of the structure that has been created247. But it is first necessary to understand why that examination is required. Liberty, punishment and Ch III of the Constitution In Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs248, Brennan, Deane and Dawson JJ held that, subject to certain exceptions, "the involuntary detention of a citizen in custody by the State is penal or punitive in character and, under our system of government, exists only as an incident of the exclusively judicial function of adjudging and punishing criminal guilt". The Commonwealth submitted that if a power to detain a person is conferred on a Ch III court for a purpose other than to punish for a breach of the criminal law, the power "will not intersect with the 'general proposition' from Lim" β that is, Lim is simply not engaged. By contrast, the respondent contended that, notwithstanding judicial recognition that the executive may permissibly detain a person where detention is directed to a protective or non-punitive purpose, 244 Criminal Code, s 105A.23(1). 245 Criminal Code, s 105A.23(2). 246 Criminal Code, s 106.8(7) and (8). 247 Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1 at 27; Ha v New South Wales (1997) 189 CLR 465 at 498; Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 610 [74]. 248 (1992) 176 CLR 1 at 27. the Lim principle applies strictly in relation to Ch III courts exercising the judicial power of the Commonwealth. This Court has never considered whether Commonwealth legislation may empower a Ch III court exercising the judicial power of the Commonwealth to order the imprisonment of a person otherwise than as a consequence or incident of a finding of criminal guilt. The Court has only considered such powers of detention conferred on State Supreme Courts by State legislation249 and Commonwealth legislation authorising Ch III courts exercising the judicial power of the Commonwealth to impose restraints on liberty less than imprisonment250. This observation directs attention to two interrelated issues: what is the principle in Lim and what underpins it; and what is the ambit and content of the "judicial power of the Commonwealth"251. The principle in Lim β that adjudging and punishing criminal guilt is an exclusively judicial function β has been restated by this Court many times in cases dealing with administrative or executive detention252. But for present purposes, the central principle derived from Lim, as reflected in subsequent decisions of this Court, is that involuntary detention in custody by the State is inherently penal or punitive in character, and thus cannot be imposed other than as an incident of adjudging and punishing criminal guilt unless one of the recognised exceptions applies; "[it] exists only as an incident of the exclusively judicial function of adjudging and punishing criminal guilt"253. As Lim recognised, there are some 249 See, eg, Fardon (2004) 223 CLR 575. 250 See, eg, Thomas (2007) 233 CLR 307. 251 Constitution, s 71. 252 Behrooz v Secretary, Department of Immigration and Multicultural and Indigenous Affairs (2004) 219 CLR 486 at 498-499 [20], 527-528 [121]; Re Woolley; Ex parte Applicants M276/2003 (2004) 225 CLR 1 at 11 [14], 12 [16]-[17], 65-66 [182]; Vasiljkovic v The Commonwealth (2006) 227 CLR 614 at 630-631 [37], 642-643 [84], 669 [189]; North Australian Aboriginal Justice Agency Ltd v Northern Territory (2015) 256 CLR 569 at 592-593 [37], 610 [94], 651-652 [236] ("NAAJA"); Plaintiff M68/2015 v Minister for Immigration and Border Protection (2016) 257 CLR 42 at 69-70 [40]; Falzon v Minister for Immigration and Border Protection (2018) 262 CLR 333 at 340-341 [16]. 253 See, eg, Behrooz (2004) 219 CLR 486 at 528 [121]; Re Woolley (2004) 225 CLR 1 at 12 [16]; Vasiljkovic (2006) 227 CLR 614 at 642 [84], 667 [180]; NAAJA (2015) 256 CLR 569 at 592-593 [37]; Plaintiff M68 (2016) 257 CLR 42 at 69-70 [40]; exceptional cases where detention other than as punishment for a breach of the law will be authorised, such as detention in cases of mental illness or infectious disease or to secure attendance at trial for an offence254. In Fardon v Attorney-General (Qld), Gummow J preferred "a formulation of the principle derived from Ch III in terms that, the 'exceptional cases' aside, the involuntary detention of a citizen in custody by the State is permissible only as a consequential step in the adjudication of criminal guilt of that citizen for past acts"255 (emphasis added). The formulation reflects both the strict separation of Commonwealth judicial power from executive and legislative power inherent in the text and structure of the Constitution and the values protected by that separation256. Two key rationales for Ch III's strict separation of federal judicial power are directly raised here: first, the historical judicial protection of liberty against incursions by the legislature or the executive257; and secondly, the protection of the independence and impartiality of the judiciary so as to ensure the judiciary can legislative and executive power258. operate effectively as a check on These rationales β or "constitutional values"259 β underpin the separation of Commonwealth judicial power and the Lim principle. It is also necessary to observe that the strict separation of powers effected by the Constitution does not apply directly to the States. The limitation on State legislative power identified in Kable v Director of Public Prosecutions (NSW) ("Kable [No 1]") prevents the conferral of jurisdiction on State courts which is incompatible with their capacity to exercise federal jurisdiction invested in them Falzon (2018) 262 CLR 333 at 341 [16]; Vella v Commissioner of Police (NSW) (2019) 93 ALJR 1236 at 1270-1271 [152]; 374 ALR 1 at 43. 254 Lim (1992) 176 CLR 1 at 28-29. 255 (2004) 223 CLR 575 at 612 [80]. 256 See Stellios, The Federal Judicature: Chapter III of the Constitution, 2nd ed (2020) at 259-264. See also NAAJA (2015) 256 CLR 569 at 610-611 [94]-[97]. 257 Vella (2019) 93 ALJR 1236 at 1268-1269 [141]-[142]; 374 ALR 1 at 40. 258 See Polyukhovich v The Commonwealth (1991) 172 CLR 501 at 684-685; Wilson v Minister for Aboriginal and Torres Strait Islander Affairs (1996) 189 CLR 1 at 11. 259 Stellios, "Liberty as a Constitutional Value", in Dixon (ed), Australian Constitutional Values (2018) at 177. under Ch III260. That limitation is "more closely confined" than the strict separation of powers261. It is because of Ch III that it is said that the "judicial power of the Commonwealth" involves a "narrowing" of the notion of judicial power262. The judiciary as protector of liberty The first rationale underpinning the separation of Commonwealth judicial power under Ch III is the role of the judiciary as the protector of liberty. As has been repeatedly restated by this Court263, the Blackstonian common law conception of liberty264 lies at the heart of our inherited constitutional tradition. It is the judiciary, the "bulwark of freedom", which traditionally and historically adjudges the most basic of rights upon the determination of criminal guilt265. Sitting at the core of that conception is the notion that the separation of judicial power protects against the unjustified exercise of the power of the State against an individual's liberty. A "safeguard of individual liberty [is] a distribution of the functions of government"266. 260 (1996) 189 CLR 51 at 93-94, 103-104, 109, 137. See also, for example, Fardon (2004) 223 CLR 575 at 591 [15], [18], 598-599 [37], 614 [86], 617-618 [101]-[102], 626-627 [136]-[137], 648 [198], 652-653 [212]-[213]; Baker v The Queen (2004) 223 CLR 513 at 534-535 [51]; Wainohu v New South Wales (2011) 243 CLR 181 at 261 Kable [No 1] (1996) 189 CLR 51 at 104. See also Baker (2004) 223 CLR 513 at 534-535 [51]; Fardon (2004) 223 CLR 575 at 630 [144(5)], 655-656 [219]. 262 Albarran v Companies Auditors and Liquidators Disciplinary Board (2007) 231 CLR 350 at 372 [73]. 263 See, eg, Trobridge v Hardy (1955) 94 CLR 147 at 152; Williams v The Queen (1986) 161 CLR 278 at 292; Magaming v The Queen (2013) 252 CLR 381 at 400-401 [63]-[67]; NAAJA (2015) 256 CLR 569 at 610-611 [94]-[97]; Vella (2019) 93 ALJR 1236 at 1268-1269 [141]-[142]; 374 ALR 1 at 40. 264 Blackstone, Commentaries on the Laws of England (1765), bk I, ch 1 at 130-133. 265 Quinn (1977) 138 CLR 1 at 11. See also Davison (1954) 90 CLR 353 at 381-382. 266 Davison (1954) 90 CLR 353 at 381. As Gageler J said in Vella v Commissioner of Police (NSW)267: "Chapter III's separation of the judicial power of the Commonwealth to be exercisable only by courts 'was not a product of abstract reasoning alone, and was not based upon precise definitions of the terms employed'. Rather, it was 'based upon observation of the experience of democratic states': 'It may accordingly be said that when the Constitution of the Commonwealth prescribes as a safeguard of individual liberty a distribution of the functions of government amongst separate bodies, and does so by requiring a distinction to be maintained between powers described as legislative, executive and judicial, it is using terms which refer, not to fundamental functional differences between powers, but to distinctions generally accepted at the time when the Constitution was framed between classes of powers requiring different "skills and professional habits" in the authorities entrusted with their exercise.' The point is not that the characteristics of judicial power and of institutions qualified to exercise it are frozen in time. They are not. The point is that those characteristics are deeply rooted in a tradition within which judicial protection of individual liberty against legislative or executive incursion has been a core value. Continued reference to an independent judiciary as 'a safeguard of individual liberty', or in language traceable to Blackstone as a 'bulwark of freedom', can too easily be dismissed in contemporary Australia as antiquated hyperbole. That is so if regard is not had to the contemporary experience of once-democratic states, also inheritors of the common law tradition, where judicial independence has fallen into neglect and where the characteristics of institutions entrusted with the exercise of judicial power have been permitted to become less distinctive." It is that value, that fundamental idea, which underlies the principle in Lim, and which sees the involuntary detention of a person by the State as prima facie punitive, and permissible only as an incident of the adjudgment and punishment of criminal guilt (apart from the recognised exceptions)268. But it also must be 267 (2019) 93 ALJR 1236 at 1268-1269 [141]-[142]; 374 ALR 1 at 40, quoting Davison (1954) 90 CLR 353 at 381-382 (footnotes omitted). 268 See Stellios, The Federal Judicature: Chapter III of the Constitution, 2nd ed (2020) at 249-250. See also Witham v Holloway (1995) 183 CLR 525 at 534 ("Punishment acknowledged that the exceptions are "neither clear nor within precise and confined categories"269. Independence and impartiality of the judiciary The second and interrelated rationale underpinning the separation of Commonwealth judicial power under Ch III is the independence and impartiality of the judiciary. In Wilson v Minister for Aboriginal and Torres Strait Islander Affairs, Brennan CJ, Dawson, Toohey, McHugh and Gummow JJ explained270: "The separation of the judicial function from the other functions of government advances two constitutional objectives: the guarantee of liberty and, to that end, the independence of Ch III judges. In R v Davison, Kitto J identified the conceptual basis of the Constitution's division of the functions of government: 'It is well to remember that the framers of the Constitution, in distributing the functions of government amongst separate organs, were giving effect to a doctrine which was not a product of abstract reasoning alone, and was not based upon precise definitions of the terms employed. As an assertion of the two propositions that government is in its nature divisible into law-making, executive action and judicial decision, and that it is necessary for the protection of the individual liberty of the citizen that these three functions should be to some extent dispersed rather than concentrated in one set of hands, the doctrine of the separation of powers as developed in political philosophy was based upon observation of the experience of democratic states, and particularly upon observation of the development and working of the system of government which had grown up in England.' is punishment, whether it is imposed in vindication or for remedial or coercive purposes. And there can be no doubt that imprisonment and the imposition of fines ... constitute punishment"); Gray v Motor Accident Commission (1998) 196 CLR 1 at 16 [54]; Hart, Punishment and Responsibility: Essays in the Philosophy of Law, 2nd ed (2008) at 4-5; Ashworth and Zedner, Preventive Justice (2014) at 14, 20, 269 Kruger v The Commonwealth (1997) 190 CLR 1 at 110. See also Behrooz (2004) 219 CLR 486 at 499 [20]; Al-Kateb v Godwin (2004) 219 CLR 562 at 604-605 [110], 646-647 [251]; Vasiljkovic (2006) 227 CLR 614 at 631 [37]; South Australia v Totani (2010) 242 CLR 1 at 147 [383]. 270 (1996) 189 CLR 1 at 11-12 (footnotes omitted). In R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd, Windeyer J traced back the doctrine of separation of powers to Montesquieu's proposition that 'there is no liberty if the judiciary power be not separated from the legislative and executive power'. Blackstone adapted Montesquieu's proposition to the realities of the British Constitution, especially the law-making function of the [j]udiciary. Blackstone, as Brennan J has noted elsewhere, commended as a protection of liberty 'the separate existence of the judicial power in a peculiar body of men, nominated indeed, but not removable at pleasure, by the crown'." The consequence of the Lim principle is that the power to make a CDO, which is not an incident of adjudging and punishing criminal guilt, cannot be validly conferred on a Ch III court unless an exception to that principle applies. If the power to make a CDO cannot be seen as an exception to the Lim principle, that conferral of power is contrary to Ch III of the Constitution, and Div 105A is invalid. Nature and content of judicial power of the Commonwealth Identification of the rationales underpinning the strict separation of Commonwealth judicial power also directs attention to the nature and content of that power. It leads one to ask, what is within the judicial power of the Commonwealth? Or to put it in negative terms, what is not within the judicial power of the Commonwealth? Two principles should be stated at the outset. First, the judicial power of the Commonwealth can only be exercised by a court referred to in s 71 of the Constitution271 and, second, a court exercising the judicial power of the Commonwealth can only exercise non-judicial power incidental to the exercise of that judicial power272. It is not in issue that the judicial power of the Commonwealth under Ch III requires that there be a "matter" before there can be an exercise of federal judicial power273; and that purely advisory or hypothetical 271 New South Wales v The Commonwealth (1915) 20 CLR 54 at 62, 93, 109; Waterside Workers' Federation of Australia v J W Alexander Ltd (1918) 25 CLR 434 at 441, 450, 465; Brandy v Human Rights and Equal Opportunity Commission (1995) 183 CLR 245 at 258, 267. 272 R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254 at 273 In re Judiciary and Navigation Acts (1921) 29 CLR 257 at 264-267. See also Gould v Brown (1998) 193 CLR 346 at 420-421 [118]; Re Wakim; Ex parte McNally (1999) decision-making by Ch III courts pursuant to federal legislation, participation by Ch III courts in the investigation of crime, and provision of non-binding advice to the executive, are all excluded from the ambit of the "judicial power of the Commonwealth"274. the Criminal Code The question is whether the power conferred on the Supreme Court by the s 105A.7 of is within Commonwealth". If the power to make a CDO is not within the judicial power of the Commonwealth, and is not incidental to the exercise of the judicial power of the Commonwealth, the conferral of that power on the Supreme Court is contrary to Ch III of the Constitution, and Div 105A is invalid. the "judicial power of Although judicial power is not susceptible to an exhaustive or exclusive definition275, it has been referred to as "the power which every sovereign authority must of necessity have to decide controversies between its subjects, or between itself and its subjects, whether the rights relate to life, liberty or property. The exercise of this power does not begin until some tribunal which has power to give a binding and authoritative decision ... is called upon to take action"276. This statement recognises that the core characteristic of judicial power is the determination of controversies about existing rights277. Thus, as Hayne J stated in South Australia v Totani, "[i]t is ... both right and important to observe that the 198 CLR 511 at 574-575 [111]; Momcilovic v The Queen (2011) 245 CLR 1 at 61-62 [82]-[83]; CGU Insurance Ltd v Blakeley (2016) 259 CLR 339 at 349-351 [24]-[26]. 274 South Australia v Victoria (1911) 12 CLR 667 at 674-675; In re Judiciary and Navigation Acts (1921) 29 CLR 257 at 267; Hilton v Wells (1985) 157 CLR 57 at 72-73; Wilson (1996) 189 CLR 1 at 16, 25; Albarran (2007) 231 CLR 350 at 372 275 Precision Data Holdings Ltd v Wills (1991) 173 CLR 167 at 188-189. See also Davison (1954) 90 CLR 353 at 366; R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361 at 373; Brandy (1995) 183 CLR 245 at 267-268; Re Woolley (2004) 225 CLR 1 at 22 [51]; Thomas (2007) 233 CLR 307 at 414 [306]; Attorney-General (Cth) v Alinta Ltd (2008) 233 CLR 542 at 592 276 Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330 at 357 ("Huddart Parker"). 277 This has been consistently recognised since Huddart Parker (1909) 8 CLR 330: Waterside Workers' (1918) 25 CLR 434 at 442-443; Brandy (1995) 183 CLR 245 at 267-268; Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 at 355-359 [45]-[56]; Alinta (2008) 233 CLR 542 at 577 [94], 592-593 [153]-[155]. determination of rights and liabilities lies at the heart of the judicial function, and that the creation of rights and liabilities lies at the heart of the legislative function"278. But, as has been observed, this description of judicial power is not exhaustive. In the past, this Court has on occasion drawn historical analogies to bring certain powers within judicial power despite the absence of a determination of existing rights279. So, for example, it was on the basis of historical analogy that Gummow and Crennan JJ accepted in Thomas v Mowbray that the power to make control orders (a power which their Honours specifically distinguished from the power to detain in custody) was a power that could be conferred on a court and exercised judicially280: "Detention in the custody of the State differs significantly in degree and quality from what may be entailed by observance of an interim control order. Moreover ... some analogy is provided by examples in the English legal tradition of the imposition by curial order of preventative restraints. One such was the power of justices of the peace, on the application of the person threatened to bind over to keep the peace those whose activities threatened to break it, and on the justices' own motion to bind over generally to be of good behaviour. This species of 'preventative justice' to maintain order and preserve the public peace was part of the legal inheritance of the Australian colonies and is discussed with much learning by Bray CJ and by Zelling J in R v Wright; Ex parte Klar." At the same time, however, this Court has warned that "[h]istory alone does not provide a sufficient basis for defining the exercise of a power as judicial power"281. In other cases, in determining whether certain functions may be regarded as judicial, the character of the repository of the grant of power has aided in the 278 (2010) 242 CLR 1 at 86 [220]. 279 See, eg, Davison (1954) 90 CLR 353 at 382; TCL Air Conditioner (Zhongshan) Co Ltd v Judges of the Federal Court of Australia (2013) 251 CLR 533 at 574 [105]. See also Stellios, "Reconceiving the Separation of Judicial Power" (2011) 22 Public Law Review 113 at 121; Stellios, "The Masking of Judicial Power Values: Historical Analogies and Double Function Provisions" (2017) 28 Public Law Review 138. 280 (2007) 233 CLR 307 at 356 [116] (footnote omitted). 281 Palmer v Ayres (2017) 259 CLR 478 at 494 [37], citing Davison (1954) 90 CLR 353 at 366-369, 382 and White v Director of Military Prosecutions (2007) 231 CLR 570 ascertainment of the nature of the power β but even then, this has not been determinative282. And, of course, where a function is entrusted to a court, this may permit an inference to be drawn that the power is to be exercised judicially283. In other decisions of this Court about the nature of judicial power, the Court has recognised that a criterion to assist in the characterisation of a power as judicial is the extent to which the power conferred involves the application of established and ascertainable legal standards284. A decision-making power that depends on the application of policy considerations or involves a substantial discretionary element is less likely to be characterised as judicial than a decision-making power that involves the application of established legal standards285. But the characterisation of the power is not undertaken in a vacuum; it is a process of characterisation where the core values which underpin the separation of powers β the protection of liberty and the independence of the judiciary β underpin the essential characteristic, or what has been described as the general rule286, of judicial power, namely the determination of controversies about existing rights287. That is what is reflected in Lim. Where, as here, there has been a conferral of a power on a court by Commonwealth legislation and, in particular, a conferral of a "power to restrict or 282 Quinn (1977) 138 CLR 1 at 6, 9-10, 18; R v Hegarty; Ex parte City of Salisbury (1981) 147 CLR 617 at 628, 631-632; Pasini v United Mexican States (2002) 209 CLR 246 at 253-254 [12]-[13], 265 [51]-[52]. 283 See, eg, R v Spicer; Ex parte Australian Builders' Labourers' Federation (1957) 100 CLR 277 at 305; Hegarty (1981) 147 CLR 617 at 628; Precision Data (1991) 173 CLR 167 at 190-191. 284 See, eg, R v Spicer; Ex parte Australian Builders' Labourers' Federation (1957) 100 CLR 277 at 291; R v Spicer; Ex parte Waterside Workers' Federation of Australia (1957) 100 CLR 312 at 317; Tasmanian Breweries (1970) 123 CLR 361 at 376-377; Thomas (2007) 233 CLR 307 at 416-419 [312]-[322], 465-466 [468]; cf Cominos v Cominos (1972) 127 CLR 588; R v Joske; Ex parte Shop Distributive and Allied Employees' Association (1976) 135 CLR 194. 285 See, eg, Thomas (2007) 233 CLR 307 at 350-351 [88]-[93]. 286 Vella (2019) 93 ALJR 1236 at 1270 [151]; 374 ALR 1 at 42-43. 287 See, eg, Waterside Workers' (1918) 25 CLR 434 at 442-443; Brandy (1995) 183 CLR 245 at 267-268; Bass (1999) 198 CLR 334 at 355-359 [45]-[56]; Alinta (2008) 233 CLR 542 at 577 [94], 592-593 [153]-[155]. interfere with a person's liberty on the basis of what that person might do in the future"288, there is no dispute that the power can be conferred only if the power is, or is incidental to, a power properly characterised as judicial. The question is, what indicia determine whether it is properly characterised as judicial power? Or, put in different terms, as Gageler J said in Vella289: "Where an exercise of a power conferred on a court settles no question as to the existence of any antecedent right or obligation yet results in an order imposing a new and enduring restriction on liberty, some special and compelling feature ought to be found to exist for its inclusion in the category of judicial power to be justified. Characterisation of the power as judicial ought to require at least that the criteria to be applied by the court in making the order are legislatively tailored to the achievement of a legislatively specified protective outcome. That was the case in Thomas v Mowbray." (emphasis added) The reference to Thomas v Mowbray is important. Not only does it bring into sharp focus the terms of the legislation in issue290, but it recognises that the problem posed by terrorism is "not susceptible of sound solution by the domino method of constitutional adjudication ... wherein every explanatory statement in a previous opinion is made the basis for extension to a wholly different situation"291. That the Commonwealth's submissions invited the Court to take what was said in one case292 and extrapolate from it, failing to recognise first and foremost that doing so would sever the principle from its constitutional root, but also not recognising that what is said in one case is said in the context of that particular case. Put in different the Commonwealth to do. That the Court is what invited 288 Vella (2019) 93 ALJR 1236 at 1270 [150]; 374 ALR 1 at 42. 289 (2019) 93 ALJR 1236 at 1275 [171]; 374 ALR 1 at 48. 290 Fardon (2004) 223 CLR 575 at 648 [197]. See also Condon v Pompano Pty Ltd (2013) 252 CLR 38 at 94 [137]-[138]. 291 Friendly, "The Bill of Rights as a Code of Criminal Procedure" (1965) 53 California Law Review 929 at 950. See also Pompano (2013) 252 CLR 38 at 94 [137]. 292 See Veen v The Queen [No 2] (1988) 164 CLR 465; Chester v The Queen (1988) 165 CLR 611; Kable [No 1] (1996) 189 CLR 51; Fardon (2004) 223 CLR 575; Thomas (2007) 233 CLR 307; New South Wales v Kable ("Kable [No 2]") (2013) 252 CLR 118; Vella (2019) 93 ALJR 1236; 374 ALR 1. terms, the Court is not engaged in statutory construction of some of its reasons for judgment293. Two other cases should be mentioned in this context. The first is Chester v The Queen294. That case concerned s 662(a) of the Criminal Code (WA), under which a direction could be given by a sentencing judge that the convicted person, on the expiration of a finite term of imprisonment to which they were sentenced, be detained during the Governor's pleasure. There, the direction formed part of the sentencing process. This Court held that the exercise of the power in that context should be reserved for very exceptional cases and where the sentencing judge was satisfied by acceptable evidence that the convicted person was "so likely to commit further crimes of violence (including sexual offences) that [the person] constitute[d] a constant danger to the community"295. As Gageler J explained in Yates v The Queen296, Chester reflected the view that the power given to the court could not be used "where there [was] only the probability of the offender re-offending as he must be seen as a constant danger to the community". Second, the decision of this Court in Fardon is instructive. It concerned a State law permitting a State Supreme Court to impose preventative detention where the Court was satisfied to a high degree of probability that the person was a serious danger to the community297. A prisoner could be considered to be a serious danger to the community only if there was an unacceptable risk that the prisoner would commit a serious sexual offence if released from custody298. A "serious 293 See Pompano (2013) 252 CLR 38 at 88-90 [122]-[126], 111 [196]. See also Vella (2019) 93 ALJR 1236 at 1275 [174]; 374 ALR 1 at 49. 294 (1988) 165 CLR 611. 295 Chester (1988) 165 CLR 611 at 619. See also M v Germany (2010) 51 EHRR 41 at 989-990 [49]-[51], where the German Criminal Code provided for the imposition of preventative detention measures in circumstances where the option to make such an order had been preserved by the sentencing court at the initial sentencing stage. 296 (2013) 247 CLR 328 at 343 [43]. 297 Fardon (2004) 223 CLR 575 at 616 [95]-[96]. 298 Fardon (2004) 223 CLR 575 at 616 [96]-[97]. sexual offence" was defined as an offence of a sexual nature involving violence or against children299. The Court did not decide in Fardon whether a law of that kind β permitting a court to make an order for continuing detention β would be valid if made by the Commonwealth Parliament300. The reasoning of the majority did not need to directly address judicial power301. It does not follow from Fardon that a law of the kind considered in that case would be valid if enacted by the Commonwealth Parliament. As explained302, the strict separation of powers effected at the level of the Commonwealth by the Constitution does not apply at the level of the States. Further, in Fardon the "nature of the process for which the Act provide[d] assume[d] particular importance"303. The majority held that the exercise of the power by the State Supreme Court β pursuant to what might be described as a "carefully calculated legislative response"304 β did not impair the institutional integrity of the State Supreme Court in such a fashion as to be incompatible with the Court's constitutional position as a potential receptacle of federal judicial power305. Two additional points should be made about Fardon and its relevance to this case. Division 105A of the Criminal Code is drafted in terms very like those used in the law considered in Fardon306. These textual similarities must not distract attention from important differences in the legal and practical operation of the two laws. Both the law considered in Fardon and Div 105A are expressed as directed 299 Fardon (2004) 223 CLR 575 at 604 [51], 616 [97]. 300 cf (2004) 223 CLR 575 at 619 [106]. 301 Fardon (2004) 223 CLR 575 at 591 [18], 596-597 [34], 613-614 [83]-[87], 647-648 302 See [137] above. See also Fardon (2004) 223 CLR 575 at 614 [86]. 303 (2004) 223 CLR 575 at 614 [90]; see also 602 [44], 631-632 [147]-[148], 648 [198], 304 Kable [No 1] (1996) 189 CLR 51 at 62. See also Fardon (2004) 223 CLR 575 at 615 [91]; Vella (2019) 93 ALJR 1236 at 1275 [171]; 374 ALR 1 at 48. 305 Fardon (2004) 223 CLR 575 at 593 [24], 601-602 [43]-[44], 619 [106]-[107], 648 306 See Dangerous Prisoners (Sexual Offenders) Act 2003 (Qld), ss 5, 8, 13. at preventing the commission of certain kinds of offences β a "serious sexual offence" and a "serious Part 5.3 offence", respectively. But because the kinds and range of conduct which may constitute the identified offences is so different, the legal and practical operation of the two laws is very different. In Fardon, the law was expressed as directed to preventing an offence of a sexual nature involving violence or against children. They are crimes of violence to the personal integrity of the victim β adult or child. As will be seen next, the legal and practical operation of Div 105A differs markedly. The second point to make is fundamental. The decision in Fardon depended upon the principle first identified in Kable [No 1]307. That principle asks whether a task assigned to a State Supreme Court impairs the institutional integrity of that State Supreme Court in such a fashion as to be incompatible with the Court's constitutional position as a potential receptacle of federal judicial power308. That principle will not be engaged if the task assigned to the State court is one that could be given to the High Court or a federal court created by the Parliament under s 71 of the Constitution309. But it is to invert the established doctrine of this Court to contend that a task which would not impair the integrity of a State court can for that reason be given to the High Court or a federal court created by the Parliament. It inverts doctrine because it does not recognise that the principle first identified in Kable [No 1], and subsequently developed and applied, takes as its basic premise that the State courts can be given tasks that the High Court (and federal courts created by the Parliament) cannot. As R v Kirby; Ex parte Boilermakers' Society of Australia shows310, the federal judicature has and must retain a particular place in the constitutional framework. It is the federal judicature that has "the ultimate responsibility for the 307 (1996) 189 CLR 51. 308 See [137] above. 309 Bachrach (HA) Pty Ltd v Queensland (1998) 195 CLR 547 at 561-562 [14]; Silbert v Director of Public Prosecutions (WA) (2004) 217 CLR 181 at 186 [10]; Fardon (2004) 223 CLR 575 at 630 [144(5)], 655-656 [219]; Baker (2004) 223 CLR 513 at 526 [22]; Forge v Australian Securities and Investments Commission (2006) 228 CLR 45 at 122 [194]; Totani (2010) 242 CLR 1 at 129 [339]; Wainohu (2011) 243 CLR 181 at 208 [43]; Pompano (2013) 252 CLR 38 at 90 [126]; Duncan v Independent Commission Against Corruption (2015) 256 CLR 83 at 95-96 [17]; Vella (2019) 93 ALJR 1236 at 1269-1270 [147]; 374 ALR 1 at 41-42. 310 (1956) 94 CLR 254. maintenance and enforcement of the boundaries within which governmental power might be exercised"311. Neither the Commonwealth Parliament nor the executive could order the continued detention of any offender after the conclusion of their sentence. Like the adjudgment and punishment of criminal guilt, it is a task that may be reposed only in the judiciary. If a task of that kind is to be given to the federal judicature, the fact that the power to perform that task raises no question as to the existence of any antecedent right or obligation, yet imposes a restriction on liberty, has the consequence that in order for the power to be characterised as judicial, it would have to be legislatively tailored to the achievement of a sufficiently specified protective outcome312. Separation of judicial and legislative power recognises and reflects the absolute necessity for the federal judicature to be independent of the legislative branch of government. Observing that legislation which is said to infringe the separation of powers was enacted by the legislature to further what is seen as desirable public ends does not answer whether the task given by the legislature to the judiciary is within the judicial power of the Commonwealth. Further, observing that legislation required the judicial branch to inflict individual injustice for what the legislature has determined to be for the greater good of society does not demonstrate that the legislation is valid. Rather, it invites closer attention to whether the judiciary is being used to further a legislative or executive objective or issue of policing and detecting future crime by dressing the objective or issue in the garb of a judicial determination313. Legal and practical operation of Div 105A First, although Div 105A is contained in the Criminal Code, it sets up a civil scheme for the continuing detention in prison of a terrorist offender at the conclusion of their sentence for a serious Part 5.3 offence and it operates by reference to the civil standard of proof314, not the criminal standard. Second, the power conferred on the Supreme Court settles no question as to the existence of any antecedent right or obligation or threatened breach of an antecedent obligation. Yet, it results in an order imposing a new and enduring 311 Boilermakers' (1956) 94 CLR 254 at 276. 312 Vella (2019) 93 ALJR 1236 at 1275 [171]; 374 ALR 1 at 48. 313 See Thomas (2007) 233 CLR 307 at 477-478 [512]; Vella (2019) 93 ALJR 1236 at 1269 [144]-[145]; 374 ALR 1 at 40-41; cf Australian Communist Party v The Commonwealth (1951) 83 CLR 1 at 205-206, 263. 314 Criminal Code, ss 105A.8(3) and 105A.13. restriction on liberty315. It operates by reference to the terrorist offender's status as a convicted offender316. And, in relation to the respondent, it operates retrospectively317. Those considerations are not determinative of validity. It is what follows that is determinative β the CDO regime in Div 105A is not sufficiently tailored to its stated purpose of ensuring the safety and protection of the community318. Unlike Divs 104 and 105319, the relevant criteria in Div 105A are not limited to a "terrorist act" or providing support for or facilitating a terrorist act. Division 105A permits a Court to order the continuing detention of a terrorist offender who poses an unacceptable risk of committing a "serious Part 5.3 offence", an offence against Pt 5.3 where the maximum penalty is seven or more years of imprisonment320. A serious Part 5.3 offence includes engaging in a terrorist act (s 101.1) but it also includes each of the following offences: providing or receiving training connected with terrorist acts possessing things connected with terrorist acts (s 101.4); collecting or making documents likely to facilitate terrorist acts any acts done in preparation for, or planning, a terrorist act (s 101.6); directing the activities of a terrorist organisation (s 102.2); membership of a terrorist organisation (s 102.3); recruiting for a terrorist organisation (s 102.4); training involving a terrorist organisation (s 102.5); getting funds to, from or for a terrorist organisation (s 102.6); providing support to a terrorist organisation (s 102.7); financing terrorism (s 103.1); and financing a terrorist (s 103.2). The only Pt 5.3 offence that is not a serious Part 5.3 offence is "[a]ssociating with terrorist organisations" in s 102.8. The maximum penalty for this offence is three years' imprisonment. Section 102.8 is contravened if: a person, on two or 315 Criminal Code, s 105A.3(2). 316 Criminal Code, s 105A.3(1). 317 Criminal Code, s 106.8(7). 318 Criminal Code, s 105A.1. 319 See Criminal Code, ss 104.4(1)(d) and 105.4(4)-(6). 320 Criminal Code, s 105A.2 definition of "serious Part 5.3 offence". more occasions, intentionally associates with another person who is a member of, or a person who promotes or directs the activities of, an organisation321; the person knows that the organisation is a terrorist organisation; the association provides support to the organisation; the person intends that the support assist the organisation to expand or to continue to exist; and the person knows that the other person is a member of, or a person who promotes or directs the activities of, the organisation. As is readily apparent, a serious Part 5.3 offence covers a broad range of offences with maximum terms of imprisonment ranging from imprisonment for ten years322 to imprisonment for life323. Other offences created by the Criminal Code that carry a maximum term of ten years' imprisonment include the offence of theft of property from the Commonwealth324 and other like offences under Pt 7.2. Not only do serious Part 5.3 offences cover a broad range of offences, they necessarily embrace a wide range of conduct. For example, one serious Part 5.3 offence is the offence committed by a person collecting or making a document in connection with the preparation for, the engagement of a person in, or assistance in a terrorist act325. That offence is committed even if: the person is reckless as to the existence of the connection between the document and the terrorist act; a terrorist act does not occur; or the document is not connected with preparation for, the engagement of a person in, or assistance in a specific terrorist act326. And each of the other offences within the class of serious Part 5.3 offences will themselves be capable of embracing a range, often a very wide range, of conduct. 321 Specified by the regulations as a terrorist organisation: s 102.1(1) definition of "terrorist organisation". 322 See, eg, Criminal Code, ss 101.4(2), 101.5(2), 102.3(1). 323 Criminal Code, ss 101.1, 101.6, 103.1, 103.2. 324 Criminal Code, s 131.1. 325 Criminal Code, s 101.5(1). 326 Criminal Code, s 101.5(2)-(3). Further still, the legal and practical operation of a number of offences can be altered from time to time by the executive passing regulations under the Criminal Code327. And as this Court has recently observed, the offence-creating provisions in Pt 5.3 of the Criminal Code, including those creating serious Part 5.3 offences, extend criminal liability to certain preparatory or anticipatory acts that would not usually fall within the range of conduct generally regarded as criminal328. The premise which underpins making any conduct a crime is that its commission works some harm to society. But the nature and extent of the harm caused will vary widely. The legislature's assessment of possible harm is often reflected in the maximum punishment that is prescribed. By that measure, some serious Part 5.3 offences are treated as equivalent to, and in some cases less serious than, stealing property from the Commonwealth329. The nature and extent of the harm that may be caused to persons or property by commission of a serious Part 5.3 offence will vary widely. Some offences, like the offence under s 101.1 of committing a terrorist act, may (but need not) cause widespread death, injury or destruction. By contrast, committing an offence of possessing documents may work no direct harm at all to any person or any property. Merely describing certain offences as "serious Part 5.3 offences" does not, without more detailed inquiry, identify the kind or extent of the harm to the community caused by the commission of those offences. Parliament cannot draft itself into power by using labels330. Because the range of serious Part 5.3 offences is so broad, the offences and the conduct underlying these offences are not restricted to offences or conduct having an immediate harm to persons or property. If the premise for casting the net so widely is that commission of any of these offences carries with it a high degree of probability of serious harm to persons or property, then, as with Divs 104 and 105, that is the inquiry the Supreme Court should have been directed to 327 A Minister can specify a "terrorist organisation" under a regulation which alters the legal and practical operation of a range of Pt 5.3 offences: Criminal Code Act 1995 (Cth), s 5(2); Criminal Code, ss 102.2-102.7 read with s 102.1(1) definition of "terrorist organisation". See, eg, R v Abdirahman-Khalif (2020) 94 ALJR 981 at 987 [24]; 384 ALR 1 at 8, citing Criminal Code (Terrorist Organisation β Islamic State) Regulation 2014 (Cth), s 4, which relevantly designated Islamic State as a "terrorist organisation". 328 Abdirahman-Khalif (2020) 94 ALJR 981 at 993-994 [44]; 384 ALR 1 at 16. 329 See, eg, Criminal Code, ss 101.5(2) and 131.1. 330 cf Australian Communist Party (1951) 83 CLR 1 at 205-206, 263. perform β that is, whether the commission of the offence carries with it a high degree of probability of serious harm to persons or property. However, as Div 105A is drafted, in making a CDO the Court must be satisfied to a high degree of probability, on the basis of admissible evidence, that the offender poses an unacceptable risk of committing a serious Part 5.3 offence if the offender is released into the community331. The unacceptable risk is not of harm to the community but of the offender committing a serious Part 5.3 offence, which, as has just been explained, concerns a wide range of offences. Although safety and protection of the community is a matter that the Court must consider332, the question for the Court is whether it is satisfied to a high degree of probability that the offender poses an unacceptable risk of committing an offence if the offender is released into the community. The unacceptable risk is that identified in s 105A.7(1)(b), namely, the risk of the offender committing one of the many offences which are caught by the phrase "serious Part 5.3 offence". The concern is not of harm, but of the offender committing an offence regardless of the consequence of that offending for the community. It is in relation to the unacceptable risk that the Court must be satisfied that "there is no other less restrictive measure" that would be "effective in preventing the unacceptable risk"333 (emphasis added). There must be another measure that "prevents" the unacceptable risk, namely the risk of the offender committing a relevant offence. And the fact that the Court must be satisfied that there is no other, less restrictive measure that would be effective in preventing the unacceptable risk is problematic. In the notes to s 105A.7(1), the Criminal Code identifies a control order under Div 104 as "[a]n example of a less restrictive measure". But, as has been seen, Div 104 provides for the making of control orders, which impose obligations, prohibitions and restrictions on a person's liberty short of detention in prison, for the purpose of protecting the public from a terrorist act334. The problem that arises is that, under Div 105A, a Supreme Court is authorised to make a CDO without being satisfied that the person subject to the order poses an unacceptable risk of committing a terrorist act, or that the person will aid, abet, counsel or procure another person to commit a terrorist act. 331 Criminal Code, s 105A.7(1)(b). 332 Criminal Code, s 105A.8(1)(a). 333 Criminal Code, s 105A.7(1)(c). 334 Criminal Code, s 104.1. See Thomas (2007) 233 CLR 307 at 337-338 [43]-[46]. This aspect of a Supreme Court's power to make a CDO is not tailored to the stated purpose of Div 105A. A related problem is that Div 105A does not identify the amount of risk of a terrorist offender committing a serious Part 5.3 offence that would be acceptable. Yet, that question must necessarily be answered before a Court can be satisfied to a high degree of probability that the offender poses an unacceptable risk of committing a serious Part 5.3 offence if released into the community. And whether a terrorist offender poses an unacceptable risk of committing a serious Part 5.3 offence is not directed to the risk of harm to the community. Division 105A, and the criteria for making a CDO, are too broad. The Division refers to a wide range of offences. It permits a Supreme Court to make a CDO even though the conduct anticipated may be less harmful than the conduct necessary to found a control order under Div 104. It is not to the point that, in some cases, preparatory or anticipatory acts might in some way or other advance an ideology that increases the possibility that harm to persons or property will be caused at some time in the future. The relevant inquiry is not how a Supreme Court might reason when applying the criteria set out in s 105A.7(1) in a given case but the proper construction of Div 105A. Section 105A.7(1) states three criteria β one procedural (the making of an application335) and two substantive336. The substantive criteria both turn on an unacceptable risk of committing a serious Part 5.3 offence, not what consequences the commission of the offence might entail. Division 105A is not saved by the so-called "safety valve", the possibility of a less restrictive measure provided for by s 105A.7(1)(c). That is not a valve but a padlock because, unlike the legislation in Fardon337, the focus in Div 105A is on the unacceptable risk of the commission of an offence. It is not focussed upon the unacceptable risk of harm, or potential harm, caused by the possible offending. Once the threshold of the possibility of a less restrictive measure is met, the padlock can be opened only if a less restrictive measure that "prevents" the risk β the commission of the offence β can be identified. It is anything but clear how anything less than exclusion from the community could prevent (as distinct from lessening the probability of, or deterring) the commission of future offences. It follows that the power of a Supreme Court to make a CDO under s 105A.7 is not sufficiently tailored to the stated purpose of Div 105A to be an 335 Criminal Code, s 105A.7(1)(a). 336 Criminal Code, s 105A.7(1)(b) and (c). 337 See Dangerous Prisoners (Sexual Offenders) Act 2003 (Qld), ss 5, 8, 13. exercise of Commonwealth judicial power. It is therefore not necessary to decide whether there is to be a new exception to the principle in Lim for judicially ordered preventative detention to protect the public from serious harm of the kind described in the definition of a "terrorist act". If there were to be such an exception, then Div 105A goes further than necessary to achieve that objective338. It follows from the construction given above that Div 105A, in its practical and legal operation, is not properly characterised or justified as protective. It is not for this Court to identify how legislation is to be drafted but, as presently enacted, Div 105A is not sufficiently tailored339, whether to the achievement of its stated objective or otherwise. Any such new exception would need to reflect the reasons for the separation of Commonwealth judicial power and the Lim principle. Otherwise, the exception would deprive Ch III of its content. Conclusion and orders For those reasons, the reserved question should be answered as set out above. The respondent's costs should be paid by the Commonwealth. 338 See, in the context of executive detention, Lim (1992) 176 CLR 1 at 33, 65-66; Al-Kateb (2004) 219 CLR 562 at 609-611 [128]-[132]. 339 See, by way of contrast, Acts Interpretation Act 1901 (Cth), s 15A; Pidoto v Victoria (1943) 68 CLR 87 at 109-111; Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468 at 518-519; Victoria v The Commonwealth (1996) 187 CLR 416 at 502-503; cf Vella (2019) 93 ALJR 1236 at 1250 [53]; 374 ALR 1 at 16. Edelman Introduction Mr Benbrika is a terrorist offender. He has served a sentence of 15 years in prison after conviction in the Supreme Court of Victoria for intentional membership of a terrorist organisation and for intentionally directing the activities of a terrorist organisation. Division 105A340 of the Criminal Code (Cth) establishes a scheme which empowers the Supreme Court of a State or Territory to make an order for the continuing detention of a terrorist offender. One condition that must be satisfied before a continuing detention order can be made341 is that the Minister must satisfy the court "to a high degree of probability, on the basis of admissible evidence", that the offender poses an "unacceptable risk" of committing one or more terrorism-related offences, examples of which include engaging in a terrorist act342, providing or receiving training connected with terrorist acts343, and directing the activities of a terrorist organisation344. The question reserved which has been removed into this Court is whether all or any part of Div 105A is invalid because the power to make a continuing detention order under s 105A.7 is not within the judicial power of the Commonwealth and has been conferred on courts, including the Supreme Court of Victoria, contrary to Ch III of the Constitution. A central focus of the parties' submissions was the reasoning in the joint judgment of Brennan, Deane and Dawson JJ in Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs345. That reasoning concerned the separation of Commonwealth powers. The essential point made by their Honours was that subject to limited historical exceptions, such as the power of the Commonwealth Parliament to punish for contempt and the power of Commonwealth military tribunals to punish for military discipline, the involuntary detention of a person as an incident of adjudging and punishing criminal guilt is exclusively a judicial power that is subject to Ch III of the Constitution. The power to punish that is generally the exclusive province of the judiciary was expressed, and is to be understood, in a broad sense. 340 Ch 5, Pt 5.3. 341 Criminal Code, s 105A.7. 342 Criminal Code, s 101.1. 343 Criminal Code, s 101.2. 344 Criminal Code, s 102.2. 345 (1992) 176 CLR 1. Edelman The answer to the question reserved is that no part of Div 105A is contrary to Ch III of the Constitution. In answering this question, transparency and constitutional fidelity require the true character of a continuing detention order made under Div 105A to be recognised. Properly characterised, and although not a form of traditional criminal punishment, which primarily looks backwards in responding to commission of past offences, the power to grant a continuing detention order within Div 105A involves notions sufficiently similar to traditional criminal punishment so as also to fall within the sphere of power that is exclusively judicial. Consistently with the broad use of the category of "punishment" by this Court and by many leading writers, the continuing detention order should be described as a form of "protective punishment". Whilst it could equally be given a different description to emphasise that it is not traditional punishment, the benefits of a description such as "protective punishment" are that it avoids drawing an unprincipled line between closely related orders in the application of principles of separation of Commonwealth powers and it avoids the error of treating punishment as always independent of prevention. It is a category error to reason that Div 105A is not punitive because it aims to protect the community by preventing the commission of offences. These categories are not independent: prevention of the commission of offences is one of the goals of punishment β it was even thought by Oliver Wendell Holmes Jr to be the "chief and only universal purpose of punishment"346. As Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ said in Rich v Australian Securities and Investments Commission347 of a similar attempt to distinguish punishment from protection, "[a]t best, the distinction between 'punitive' and 'protective' is elusive". It is equally erroneous to reason that a continuing detention order made under Div 105A cannot be punitive in a broad sense because it is thought to be inconsistent with an a priori conception of proportionality between criminal punishment and the crime committed. A prisoner who was scheduled for execution for the offence of robbery in the 19th century would be unlikely to be persuaded by the suggestion that the execution was not punishment because it was a 346 Holmes, The Common Law (1881) at 46, quoted in Dershowitz, "The Origins of Preventive Confinement in Anglo-American Law β Part I: The English Experience" (1974) 43 University of Cincinnati Law Review 1 at 1. 347 (2004) 220 CLR 129 at 145 [32]. See also Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 613 [82]; Minogue v Victoria (2019) 93 ALJR 1031 at 1042 [47]; 372 ALR 623 at 636-637. Edelman disproportionate order imposed to discourage others on the theory that punishment for a few will deter all348. When a power, such as that in Div 105A, is punitive in the broad sense conveyed in Lim it is a power that can only be conferred upon the judiciary, an exclusively judicial power. It must be conferred upon the judiciary in the form of judicial power. And it must also be "accompanied by the necessary curial and judicial character"349; that is, as a matter of substance it must also be a power that is exercised judicially. An order that imprisons a person for something that they have not done, but might do, has been said to deprive the person "of the rights of a human being"350 and to treat them as "judged to have lost all of their essential humanity"351. To the extent that a continuing detention order is only forward-looking it can be seen to involve individual injustice. But this alone does not make the exercise of such a punitive power unjudicial. Commonwealth judicial power operates also at a social or systemic level. It involves implementing justified legislative policies, even those that might cause individual injustice. Courts should be wary before invalidating, as unjustified, a power that can only be exercised as a last resort in order to implement legislative policy with a fundamental purpose of ensuring the safety and protection of the community. The power contained in Div 105A of the Criminal Code is, in form, a judicial power and in its manner of exercise it is justified and valid. Mr Benbrika's circumstances In 2008, Mr Benbrika was convicted under ss 102.2(1) and 102.3(1) in Pt 5.3 of the Criminal Code of the offences of intentionally directing the activities of a terrorist organisation and intentional membership of a terrorist organisation. His total effective sentence of 15 years' imprisonment was due to expire on 5 November 2020. On 4 September 2020, the Minister applied to the Supreme Court of Victoria under s 105A.5 of the Criminal Code for a continuing detention 348 See Coke, Institutes of the Laws of England (1644), Pt 3 at 6: "ut poena ad paucos, metus ad omnes perveniat"; cf Voltaire, Candide (1759) at 211-212: "Mais dans ce pays-ci il est bon de tuer de tems en tems un Amiral pour encourager les autres." 349 R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254 at 271. 350 Lewis, "The Humanitarian Theory of Punishment" (1953) 6 Res Judicatae 224 at 351 Corrado, "Punishment and the Wild Beast of Prey: The Problem of Preventive Detention" (1996) 86 Journal of Criminal Law and Criminology 778 at 778, adapting Hampton, "The Moral Education Theory of Punishment" (1984) 13 Philosophy and Public Affairs 208 at 223. Edelman order in relation to Mr Benbrika. The Minister asserted that Mr Benbrika poses an terrorism-related offences352. unacceptable risk of committing numerous Following the conclusion of his sentence, Mr Benbrika was the subject of an interim detention order which was due to expire on 30 December 2020. Subsequent to the hearing of the question reserved, this Court was informed by the parties that a continuing detention order was made against Mr Benbrika in the Supreme Court of Victoria on 24 December 2020. The term of that order was the statutory maximum period of three years353. The operation and character of Div 105A of the Criminal Code The operation of Div 105A Any challenge to the validity of a legislative provision requires the provision to be interpreted so that its meaning and scope of application can be ascertained. If necessary to ensure validity the meaning can be read down, severed in part, or disapplied in its application354. Part 5.3 of the Criminal Code is concerned with terrorism. The Pt 5.3 remedial regime includes Divs 104, 105 and 105A. Division 104 creates sweeping powers to restrict a person's liberty through interim control orders, in circumstances which do not require the commission of an offence. The validity of Subdiv B of Div 104 was upheld by this Court in Thomas v Mowbray355. Division 105 creates a power to make preventative detention orders in order to prevent a terrorist act that is capable of being carried out, and could occur, within the next 14 days, or to preserve evidence of, or relating to, a recent terrorist act356. Division 105A was enacted by the Commonwealth Parliament following, and relying in part upon, a reference of power from the Parliaments of the States under 352 Against Criminal Code, ss 101.1, 101.2, 101.4, 101.5, 101.6, 102.2, 102.3, 102.4, 353 Minister for Home Affairs v Benbrika [2020] VSC 888 at [477], [479]. 354 Acts Interpretation Act 1901 (Cth), s 15A. 355 (2007) 233 CLR 307. 356 Criminal Code, s 105.1. Edelman s 51(xxxvii) of the Constitution357. The object of Div 105A is to "ensure the safety and protection of the community by providing for the continuing detention of terrorist offenders who pose an unacceptable risk of committing serious Part 5.3 offences if released into the community"358. It creates a judicial power to make continuing detention orders where a terrorist offender poses an unacceptable risk of committing a terrorism-related offence under Pt 5.3 if released into the community. The range of terrorism-related offences in Pt 5.3 of the Criminal Code is wide. The offences include those that could cause significant and widespread harm to the community such as committing "terrorist acts" which intimidate the public for a political, religious or ideological cause with the intention of causing death to people359. The offences can also be less extreme, extending, for example, to "preliminary acts" which "do not themselves constitute terrorist acts"360 but which are preliminary to causing "serious damage" to property361. But these less extreme actions must still be taken with the intention of: (i) "advancing a political, religious or ideological cause"; and (ii) "coercing, or influencing by intimidation, the government of the Commonwealth or a State, Territory or foreign country, or of part of a State, Territory or foreign country" or "intimidating the public or a section of the public"362. And, even acts with this intention will not constitute terrorist acts if they are for reasons of "advocacy, protest, dissent or industrial action" and are not intended to cause various types of serious harm to people363. There are also offences "connected" with terrorist acts. These include, in broad terms, where a person with the requisite intention or recklessness364 performs actions of 357 Criminal Code, s 100.3. See Criminal Code Amendment (High Risk Terrorist Offenders) Act 2016 (Cth), Sch 1, item 1. No issue was raised by the parties arising from a partial source of power being referred State legislative power. 358 Criminal Code, s 105A.1. 359 See Criminal Code, ss 100.1(1) (definition of "terrorist act"), 101.1. 360 Criminal Code, s 100.4(1)(b). 361 Criminal Code, s 100.1(2)(b). 362 Criminal Code, s 100.1(1) (definition of "terrorist act"). 363 Criminal Code, s 100.1(3). 364 Criminal Code, s 5.6. Edelman preparation for or planning of a terrorist act365, or, knowing of a variously described connection with a terrorist act, or reckless as to the connection, provides or receives training, possesses things, or collects or makes documents366. The pre-conditions to a court making a continuing detention order under s 105A.7(1) include that it must be satisfied: (i) to a high degree of probability, on the basis of admissible evidence, that the offender poses an unacceptable risk of committing an offence against Pt 5.3 for which the maximum imprisonment is seven years or more if the offender is released into the community (a "serious Part 5.3 offence")367; and (ii) that there is no other, less restrictive measure that would be effective in preventing the unacceptable risk. The Australian Federal Police Minister bears the onus of satisfying the court of those matters368. The criterion of an "unacceptable risk" of committing a serious Pt 5.3 offence is an open-textured expression commonly used in bail legislation369. In relation to a consideration of whether to deprive a parent of access to a child, this Court said that "unacceptable risk" requires a balancing of factors370. The same is true of s 105A.7(1)(b). Whether the risk of commission of a Pt 5.3 offence is "unacceptable" is not limited to the likelihood of the commission of the offence. It extends also to the magnitude of harm to the community in light of the interest that the terrorist offender has in their liberty371. Due to the separation of the "less restrictive measure" criterion, which expressly requires minimal intrusion into the liberty of the terrorist offender, the "unacceptable risk" criterion treats the liberty of the terrorist offender only as an "underlying assumption" when determining the likelihood and magnitude of harm that will be tolerable372. The focus is upon the likelihood of the commission of the offence and the magnitude of harm to the community. A level of risk which is not high, concerning an offence that would 365 Criminal Code, s 101.6. 366 Criminal Code, ss 101.2, 101.4, 101.5. 367 Criminal Code, s 105A.2 (definition of "serious Part 5.3 offence"). 368 Criminal Code, s 105A.7(3). 369 Bail Act 2013 (NSW), s 19; Bail Act 1977 (Vic), s 4E; Bail Act 1980 (Qld), s 16. 370 M v M (1988) 166 CLR 69 at 78. 371 See also Vella v Commissioner of Police (NSW) (2019) 93 ALJR 1236 at 1249 [51]; 374 ALR 1 at 15. 372 See Lynn v New South Wales (2016) 91 NSWLR 636 at 660-661 [128]-[129]. Edelman not greatly threaten the safety and protection of the community (and hence might not imperil the object of Div 105A373), might not be unacceptable although the same level of risk for an offence that greatly threatens the safety and protection of the community might be unacceptable. The need to consider both the likelihood of the commission of the offence and the magnitude of possible harm to the community when assessing whether a risk is "unacceptable" is reinforced by the mandatory considerations required when the court exercises the evaluative judgment of "acceptability" of the risk of a terrorist offender committing a serious Pt 5.3 offence. The mandatory considerations are prescribed in s 105A.8(1) in addition to other matters that the court considers relevant374. The first mandatory factor, concerning "the safety and protection of the community", requires the court to consider both the likelihood that a serious Pt 5.3 offence will be committed by the terrorist offender and the magnitude of harm to the community of such an offence. Naturally, the greater the potential harm to the community from commission of the offence and the more likely that harm is to occur, the more likely it is that the court will conclude that the risk is unacceptable. Another open-textured criterion is that the court must be satisfied that there is "no other less restrictive measure" that would be effective in preventing the unacceptable risk375. This does not require the elimination of the risk. It will be sufficient if the less restrictive measures are able to reduce the risk to a level that is not unacceptable. One less restrictive measure is a control order376. The breadth of possible obligations, prohibitions and restrictions that may be imposed on a person by a control order is almost unlimited. For instance, had Mr Benbrika been released from custody and had the control order imposed on him by the Federal Court come into force then he would have been required to do, amongst other things, all of the following377: wear a tracking device at all times or, alternatively, report daily to a police officer; remain at a specified premises between 10 pm and 6 am; avoid entering any prohibited places including exclusion zones at airports or ports and the residences of a long list of persons with whom association is also forbidden; not form, join or affiliate with any group, club or organisation without written permission from an Australian Federal Police Superintendent; not form prayer groups in or out of a Mosque, lead prayers, instruct others on leading 373 Criminal Code, s 105A.1. 374 Criminal Code, s 105A.8(2). 375 Criminal Code, s 105A.7(1)(c). 376 Criminal Code, s 105A.7(1), note 1. 377 See Lee v Benbrika [2020] FCA 1723, Annexure A. Edelman prayers, or influence any other person in relation to religion in any group; and not access, or allow access on his behalf to, any telephone (other than one provided by the Australian Federal Police subject to strict conditions), computer, tablet or device or email without permission from an Australian Federal Police Superintendent and with any use subject to strict conditions. Breach of any of those requirements would render Mr Benbrika liable to imprisonment for contempt. With the extraordinary breadth of possible control order obligations, and assuming the availability of sufficient police resources, it should be possible to reduce to an acceptable level the risk of the commission of many serious Pt 5.3 offences. An exception may be where the risk concerns an offence where the magnitude of harm to the community is great and the person's determination to commit the offence is strong. The possibility of a great magnitude of harm might mean that the risk would remain unacceptable even if extreme control measures and substantial police resourcing meant that the risk had become extremely small. And even if the risk remained unacceptable, a reduction in the extent of the risk by alternative available orders such as a control order upon the conclusion of the continuing detention might lead a court to impose a period of continuing detention that is shorter than would otherwise be imposed378. The punitive nature of an order under Div 105A A vast literature has developed around preventive justice orders. Although doing so for various different reasons, many leading writers recognise that at least some preventive justice orders should be characterised as punitive379. Any denial of the punitive nature of preventive justice orders is usually carefully expressed by reference only to narrow definitions of criminal punishment in traditional terms confined to primarily backwards-looking orders of State retribution upon the adjudication of offences380. For the reasons below, to give "punishment" this narrow meaning in the context of assessing the principles of separation of powers 378 See Criminal Code, s 105A.7(5). 379 See, eg, Hart, Punishment and Responsibility (1968) at 166-167; Husak, "Lifting the Cloak: Preventive Detention as Punishment" (2011) 48 San Diego Law Review 1173; Ferzan, "Beyond Crime and Commitment: Justifying Liberty Deprivations of the Dangerous and Responsible" (2011) 96 Minnesota Law Review 141; Ashworth and Zedner, Preventive Justice (2014) at 14-17; Zedner, "Penal subversions: When is a punishment not punishment, who decides and on what grounds?" (2016) 20 Theoretical Criminology 3; Nathan, "Punishment the Easy Way" (2020) Criminal Law and Philosophy (online, 2 October 2020). 380 See, eg, Robinson, "Punishing Dangerousness: Cloaking Preventive Detention as Criminal Justice" (2001) 114 Harvard Law Review 1429 at 1432. Edelman would create incoherent distinctions based upon a category error that punishment and prevention are separate categories. Such a narrow meaning in this context could also have the potential to permit redefinition of "any measure which is claimed to be punishment as 'regulation,' and, magically, the Constitution no longer prohibits its imposition"381. And such a narrow meaning would not be consistent with the broader approach to punishment taken in the joint judgment in Lim or in the unanimous decision of this Court in Chester v The Queen382. If the category of "punishment" is not strictly confined to its traditional sense, the relationship between preventive justice orders and punishment might best be understood by reference to a spectrum. At one end of the spectrum are orders that are distant from traditional notions of criminal punishment. There, the orders can be characterised as purely protective. An example is orders confining in detention those who, by reason of extreme mental illness, pose a danger to the public: "[i]t was the doctrine of our ancient law, that persons deprived of their reason might be confined till they recovered their senses"383. A more difficult example is orders made historically to "bind over" in order to keep the peace or to ensure good behaviour384. A person who was suspected of future misbehaviour would be required to give an undertaking and security as "full assurance to the public, that such offence as is apprehended shall not happen"385. The suspected behaviour need not have been criminal386. Some have argued that these orders are not equivalent to traditional criminal punishment387. But others have described 381 United States v Salerno (1987) 481 US 739 at 760. 382 (1988) 165 CLR 611. 383 Blackstone, Commentaries on the Laws of England (1769), bk 4, ch 2 at 25. 384 R v Wright (1971) 1 SASR 103 at 106-107. 385 Chu Shao Hung v The Queen (1953) 87 CLR 575 at 590, quoting Blackstone, Commentaries on the Laws of England, 15th ed (1809), bk 4, ch 18 at 251. 386 R v County of London Quarter Sessions Appeals Committee; Ex parte Metropolitan Police Commissioner [1948] 1 KB 670 at 675. 387 R v Rogers (1702) 7 Mod 28 at 29 [87 ER 1074 at 1075]; Ex parte Davis (1871) 35 JP 551 at 551-552. See the concession by counsel in R v County of London Quarter Sessions Appeals Committee; Ex parte Metropolitan Police Commissioner [1948] 1 KB 670 at 672. See also Blackstone, Commentaries on the Laws of England (1769), bk 4, ch 18 at 248-249. Edelman them as "quasi-penal"388. Denning LJ once remarked that the proceedings are analogous to a criminal proceeding since, in substance, they are based not merely on a fear of what the person might do but upon the person's words or conduct giving rise to the apprehension and the failure to provide security could result in imprisonment389. At the other end of the spectrum are orders that are much closer to traditional notions of criminal punishment. These orders might be described as "protective punishment" to recognise both the contrasts and commonalities with traditional criminal punishment. The commonalities, discussed below, are the reason that at this end of the spectrum, as the European Court of Human Rights has observed, the same type of protective punishment order has been described in Italy as preventive and in France as penal390. An example of a protective order that has been recognised by this Court as punitive is that in Chester v The Queen391. There, this Court considered a power of a judge sentencing for an offence to order that a person be detained indefinitely at the Governor's pleasure at the conclusion of a sentence, with release to be in the discretion of the Parole Board. The Court treated this power as one to extend a sentence of imprisonment. In light of the common law principle that a sentence of imprisonment should not be extended beyond what is proportionate to the crime merely for the purpose of protection of society, the Court held that the exercise of the power should be reserved for "exceptional cases"392. The Court concluded that this exceptional power was punitive393: "The stark and extraordinary nature of punishment by way of indeterminate detention, the term of which is terminable by executive, not by judicial, decision, requires that the sentencing judge be clearly satisfied by cogent 388 Feldman, "The King's Peace, the Royal Prerogative and Public Order" (1988) 47 Cambridge Law Journal 101 at 102. See also Power, "'An Honour and Almost a Singular One': A Review of the Justices' Preventive Jurisdiction" (1981) 8 Monash University Law Review 69 at 111. 389 Everett v Ribbands [1952] 2 QB 198 at 206. 390 M v Germany (2010) 51 EHRR 41 at 995 [74]. 391 (1988) 165 CLR 611. 392 (1988) 165 CLR 611 at 618. 393 (1988) 165 CLR 611 at 619. Edelman evidence that the convicted person is a constant danger to the community in the sense already explained." For three reasons, the power to make a continuing detention order, like the power considered in Chester, is sufficiently closely associated with concepts of traditional criminal punishment to attract the description of "protective punishment" when considering whether a continuing detention order under the Criminal Code is an exclusive exercise of the judicial power of the Commonwealth. First, there is a close association between detention and punishment: as one of the strongest forms of hard treatment, detention fulfils a central aspect of punishment. It is generally the "deprivation of liberty involved" in detention of a citizen that is the mark of a punitive power394. Unless some other, independent purpose can be identified, the order is likely to be characterised as punitive395. Protection of the community from crime is not an independent purpose. Indeed, on a consequentialist view, the ultimate focus of punishment is always the end "of preventing future crimes"396. But even on the more widely held view of punishment, as centrally concerned with retribution or moral desert, the goal of prevention remains important. As the Supreme Court of the United States said in United States v Brown397, it would be: "archaic to limit the definition of 'punishment' to 'retribution.' Punishment serves several purposes: retributive, rehabilitative, deterrent β and preventive. One of the reasons society imprisons those convicted of crimes is to keep them from inflicting future harm, but that does not make imprisonment any the less punishment." The close relationship between detention and punishment becomes even closer where the purpose of the detention is prevention of future crime. Whilst traditional criminal punishment is centrally backwards-looking in shaping its response to an offence based on moral desert, the punishment is also usually 394 Behrooz v Secretary, Department of Immigration and Multicultural and Indigenous Affairs (2004) 219 CLR 486 at 499 [20]. See also Falzon v Minister for Immigration and Border Protection (2018) 262 CLR 333 at 342 [24]. 395 Falzon v Minister for Immigration and Border Protection (2018) 262 CLR 333 at 396 Blackstone, Commentaries on the Laws of England (1769), bk 4, ch 1 at 12. See also bk 4, ch 18 at 249. 397 (1965) 381 US 437 at 458. Edelman shaped by forward-looking criteria such as specific and general deterrence of the commission of similar offences in the future. Protective punishment, by continuing detention orders such as those made under Div 105A, is centrally forward-looking but one essential criterion is backwards-looking: the commission of a past offence of the same nature. Traditional criminal punishment and protective punishment both involve backwards-looking and forward-looking criteria although giving different weight to each. Secondly, a continuing detention order under Div 105A is not wholly independent of the sentencing process. Although, unlike the sentencing process in Chester, a continuing detention order in Div 105A can only be made for the first time within the final 12 months of imprisonment398, the separation of powers principles that are affected by a characterisation of an order as punishment are concerned "with substance and not mere form"399. It would elevate form over substance if the mere expedient of having the judge make the order at the conclusion of the sentence rather than at the commencement of the sentence were sufficient for the continuing detention order to be characterised as something wholly different from a punitive regime. Indeed, when sentencing for a terrorism-related offence the court must warn the offender that an application may be made under Div 105A for a continuing detention order400. And during the continuing detention order, the offender will be detained in the same area or unit of a prison as prisoners serving sentences of imprisonment if, for example, that is reasonably necessary for the purposes of rehabilitation, treatment, work, education, general socialisation, or other group activities401. Thirdly, a continuing detention order is, at least, closely analogous to orders that meet the elements of Hart's classic "standard case" of punishment402. The only 398 Criminal Code, ss 105A.5(2)(a), 105A.7(1)(a). 399 Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1 at 27. 400 Criminal Code, s 105A.23(1). 401 Criminal Code, s 105A.4(2). 402 Hart, Punishment and Responsibility (1968) at 4-5: (i) it must involve pain or other consequences normally considered unpleasant; (ii) it must be for an offence against legal rules; (iii) it must be of an actual or supposed offender for their offence; (iv) it must be intentionally administered by human beings other than the offender; and (v) it must be imposed and administered by an authority constituted by a legal system against which the offence is committed. See also Al-Kateb v Godwin (2004) 219 CLR 562 at 650 [265]; Fardon v Attorney-General (Qld) (2004) 223 CLR 575 Edelman submission in this case which could suggest that a continuing detention order was other than a standard case of punishment was the submission by the Attorney-General of the Commonwealth that the order is not made against an offender for a past offence against legal rules. In one sense this submission is correct because the past terrorism-related offence is not sufficient for the imposition of the continuing detention order. But nor was the commission of the offence in Chester. Like the regime in Chester, a necessary condition for a continuing detention order, with a likely motivation of specific deterrence in order to protect the community, is that the person has been convicted of an offence403. Other criteria for a continuing detention order also appear to be based upon notions of specific deterrence including that the offender is detained in custody404 and poses an unacceptable risk of committing a serious Pt 5.3 offence405. These other criteria are insufficient departures from the regime in Chester to warrant removing continuing detention under Div 105A from the category of punishment for the purposes of assessing the boundaries of exclusive judicial power. The principle in Lim It is a sign of difficulty in understanding the rationale for a legal rule when the legal rule is described by reference to the case in which it was recognised. The legal rule usually described by reference to the decision in Lim is one such example. It has been revised and restated. But rarely has its rationale been explained. The issue in Lim concerned the validity of provisions of the Migration Act 1958 (Cth) concerning detention in custody by the Executive of certain non-citizen arrivals in Australia until their removal or grant of an entry permit. The relevant part of the joint judgment comprising the "Lim principle" is contained within a section entitled "Chapter III of the Constitution". That section begins by emphasising the long-established constitutional implication of the principle of separation of Commonwealth powers406. That principle generally requires that the judicial power of the Commonwealth cannot be conferred upon, or exercised by, at 641 [174]; Minogue v Victoria (2019) 93 ALJR 1031 at 1042 [47]; 372 ALR 623 403 Criminal Code, s 105A.3(1)(a). 404 Criminal Code, s 105A.3(1)(b). 405 Criminal Code, s 105A.7(1)(b). 406 (1992) 176 CLR 1 at 26-27. Edelman the Commonwealth Parliament or the Commonwealth Executive407. A closely related principle, as the joint judgment observed, requires that courts in whom the judicial power of the Commonwealth is vested cannot exercise that power in a manner inconsistent with the nature of judicial power408; the judicial power of the Commonwealth must be exercised judicially. Following the enunciation of these principles, in the passage upon which both Mr Benbrika and the Attorney-General of the Commonwealth heavily relied, the joint judgment in Lim explained that one exclusively judicial power is the adjudgment and punishment of criminal guilt under a law of the Commonwealth. Their Honours continued409: "[P]utting to one side the exceptional cases to which reference is made below, the involuntary detention of a citizen in custody by the State is penal or punitive in character and, under our system of government, exists only as an incident of the exclusively judicial function of adjudging and punishing criminal guilt." The exceptional cases were: the executive power of arrest and detention in custody of a person accused of a crime to ensure that the person is available to be dealt with by the courts; and the involuntary detention by the Executive in cases of mental illness or infectious disease410. Other than to say that none of these instances were "punitive", the joint judgment rightly did not suggest that there was any commonality across these instances of executive detention. For instance, they are not united by a principle concerning protection of the community from harm. Rather than protection of the community, the core, and sometimes sole, function of detention of a person in custody pending trial was "for safe custody" to trial411. And when detention of non-citizens is added to the list of "exceptional" cases of detention, an alien might be detained despite posing no threat whatsoever to the community. The central point made by the joint judgment in the discussion in Lim concerning involuntary detention by the State concerned the separation of powers. 407 R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254 at 270. 408 (1992) 176 CLR 1 at 27, citing Polyukhovich v The Commonwealth (1991) 172 CLR 409 (1992) 176 CLR 1 at 27. 410 (1992) 176 CLR 1 at 28. 411 Blackstone, Commentaries on the Laws of England (1769), bk 4, ch 22 at 294. Edelman That point, which was of longstanding authority412 and has been approved on many occasions subsequently413, is that the exercise of a power to detain a citizen in custody as an incident of adjudging and punishing criminal guilt is exclusively judicial. Hence, focusing upon punishment of criminal guilt, the joint judgment in Lim concluded that the only Commonwealth authority to imprison is by "an order by a court in the exercise of the judicial power of the Commonwealth"414. The separation of powers principle embodied in the Commonwealth Constitution is not absolute. As the joint judgment in Lim recognised415, despite the constitutional separation of powers, there are at least two possible exceptions to the principle that, at the level of Commonwealth power, punishment is the sole province of a Ch III court. These exceptions, based upon deep historical roots that were not displaced by Ch III of the Constitution, are the Commonwealth Parliament's power to imprison for contempt416 and the power of military tribunals to punish for breach of military discipline417. But, putting to one side examples of entrenched historical exceptions, a Commonwealth power to detain in custody for reasons incidental to the adjudging and punishing of criminal guilt is the sole province of the judiciary and subject to Ch III of the Constitution. 412 Waterside Workers' Federation of Australia v J W Alexander Ltd (1918) 25 CLR 413 Nicholas v The Queen (1998) 193 CLR 173 at 186 [16]; Magaming v The Queen (2013) 252 CLR 381 at 399-400 [61]-[62]; Duncan v New South Wales (2015) 255 CLR 388 at 407 [41]; Falzon v Minister for Immigration and Border Protection (2018) 262 CLR 333 at 340 [14]-[15], 357 [88]; Minogue v Victoria (2019) 93 ALJR 1031 at 1042 [48]; 372 ALR 623 at 637; Vella v Commissioner of Police (NSW) (2019) 93 ALJR 1236 at 1270-1271 [152]; 374 ALR 1 at 43; Private R v Cowen (2020) 94 ALJR 849 at 888 [168]; 383 ALR 1 at 47. 414 (1992) 176 CLR 1 at 28-29. 415 (1992) 176 CLR 1 at 28-29. 416 Constitution, s 49, discussed in R v Richards; Ex parte Fitzpatrick and Browne (1955) 92 CLR 157 at 167. See also Burdett v Abbot (1811) 14 East 1 at 159-160 [104 ER 501 at 561-562]; Kielley v Carson (1842) 4 Moo PC 63 at 89 [13 ER 225 at 235]; Gordon, "Imprisonment and the Separation of Judicial Power: A Defence of a Categorical Immunity from Non-Criminal Detention" (2012) 36 Melbourne University Law Review 41 at 85-86. 417 Private R v Cowen (2020) 94 ALJR 849 at 887-889 [163]-[170]; 383 ALR 1 at Edelman The scope of the Lim principle: the category of "punishment" No narrow approach was intended in the statement of principle in the joint judgment in Lim that exercise of a power to detain a citizen in custody as an incident of adjudging and punishing criminal guilt is exclusively judicial. As four members of this Court said in Falzon v Minister for Immigration and Border Protection418, it was not disputed in that case that adjudging and punishing a breach of the law are disjunctive. Moreover, the scope of the exclusively judicial category of "punishment" was intended to be broad. The joint judgment in Lim emphasised that involuntary detention in custody is generally penal or punitive. Indeed, the joint judgment held that a law would be punitive if it authorised detention of an alien for a period that was not "limited to what is reasonably capable of being seen as necessary for the purposes of deportation or necessary to enable an application for an entry permit to be made and considered"419. In so reasoning, their Honours did not tie the exclusively judicial category of "punishment" to the traditional conception of criminal punishment involving hard treatment by the State in response to a past offence. The joint judgment in Lim was correct not to take such a narrow approach to punishment in this context. For the reasons explained above, it would be incoherent in this context to treat the standard case of criminal punishment as falling within a different category from that of continuing detention orders. Two points of qualification must, however, be made to the conclusion that both traditional criminal punishment and protective punishment should be characterised as punitive and as generally exclusive to the judicial function. First, although both can be described as punishment in a broad sense for the purpose of assessing the scope of exclusive judicial power, they involve different approaches to criminal justice with different emphases and can therefore be the subject of different regimes. They will not give rise to issues of double punishment in the traditional sense of criminal punishment where the antipathy of the common law to double punishment rests upon the inherent contradiction in treating traditional criminal punishment as based upon moral desert yet imposing it again. A recent example is Vella v Commissioner of Police (NSW)420. In that case, a majority of this Court upheld the validity of a serious crime prevention order which permitted a range of restraints upon a person's liberty including in circumstances 418 (2018) 262 CLR 333 at 340 [15]. See also Waterside Workers' Federation of Australia v J W Alexander Ltd (1918) 25 CLR 434 at 444; Re Tracey; Ex parte Ryan (1989) 166 CLR 518 at 580. 419 (1992) 176 CLR 1 at 33. 420 (2019) 93 ALJR 1236; 374 ALR 1. Edelman where the person had not been charged with, or convicted of, any offence. Bell, Keane, Nettle and Edelman JJ said that the regime was "separate and distinct from traditional criminal justice" and involved "different responses to a different subject matter"421. Secondly, as with traditional criminal punishment, there may be deeply entrenched historical exceptions which, despite the separation of powers at the Commonwealth level, permit powers that might be characterised as protective punishment to be exercised by bodies that are not judicial. For instance, even if some instances of the arrest and detention in custody of persons accused of a crime were to be characterised, albeit with some difficulty, as protective punishment422 then this characterisation would not deprive the Executive of power, by executive warrant, within the scope of its historical exercise423. The conclusion that at least some protective orders for continuing detention will be protective punishment is therefore mandated not merely by principle, by a need for coherence, and by the unanimous judgment in Chester. It also reflects the broad understanding of punishment taken in Lim and cases subsequently. In particular, it is consistent with the reasons of five members of this Court in Fardon v Attorney-General (Qld)424, none of whom separated punishment, in the broad sense expressed in Lim, from protection. In Fardon, Gleeson CJ said nothing to deny the punitive character of the legislation and, suggesting to the contrary, quoted from Chief Judge Haynsworth425 to the effect that the criminal law: existed "for the protection of society"; could eliminate punishment "for punishment's sake"; and could implement "wherever necessary, the ultimate isolation from society" of those who cannot conform their conduct "as active members of a free society to the requirements of the law"426. Gummow J, with whom Hayne J agreed 421 (2019) 93 ALJR 1236 at 1256 [78]; 374 ALR 1 at 24. See also Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 610 [74]. And compare, eg, Gray v Motor Accident Commission (1998) 196 CLR 1 at 14 [42]-[43]. 422 Compare the majority and minority decisions in United States v Salerno (1987) 481 423 Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1 at 28. 424 (2004) 223 CLR 575; cf at 654 [217]. 425 United States v Chandler (1968) 393 F 2d 920 at 929. 426 (2004) 223 CLR 575 at 589 [11]. Edelman on this point427, rejected the submission428 that the continuing detention order imposed double punishment429. But, and to the same effect as explained above430, his Honour was plainly speaking of punishment in the traditional sense rather than the extended sense used in Lim. He therefore did not contradict himself only seven paragraphs later when, considering the broad notion of punishment in the Lim principle, he eschewed characterisation of the deprivation of liberty as either punitive or non-punitive431. Certainly, Gummow J did not make the error of rigidly separating punishment from protection of the community. He observed, in relation to a United States decision that turned upon whether a preventive detention order was punitive432, that this Court has not treated the objectives of criminal punishment so narrowly that they could be contrasted with protection of the community from harm433. Kirby J considered that the continuing detention order was punitive and, despite the absence of a focus on moral desert that is present in traditional punishment, held that it amounted to double punishment434. McHugh J, choosing his words carefully, considered that the legislation was "not designed to punish the prisoner"435. His Honour did not reach any conclusion about whether it should nevertheless be ascribed that character and plainly did not separate punishment and protection. It is very doubtful that McHugh J would have taken any narrow view of punishment and contrasted it with protection of the community. In Kable v Director of Public Prosecutions (NSW)436, which was at the forefront of the submissions in Fardon, his Honour had described the continuing detention legislation in that case as providing for "punishment by way 427 (2004) 223 CLR 575 at 647 [196]. 428 (2004) 223 CLR 575 at 578. 429 (2004) 223 CLR 575 at 610 [74]. 430 See [212] above. 431 (2004) 223 CLR 575 at 611 [77], 612-613 [81]-[82]. 432 Kansas v Hendricks (1997) 521 US 346. 433 (2004) 223 CLR 575 at 612-613 [81]-[82]. 434 (2004) 223 CLR 575 at 631 [147], 644 [185]. 435 (2004) 223 CLR 575 at 597 [34] (emphasis added). See Queensland, Legislative Assembly, Parliamentary Debates (Hansard), 3 June 2003 at 2484. 436 (1996) 189 CLR 51 at 122. Edelman of imprisonment for what the appellant is likely to do as opposed to what he has done". A different principle limiting all governmental power to detain? In Fardon437, Gummow J sought to reformulate the Lim principle as one based on individual liberty in which, subject to exceptions, "the involuntary detention of a citizen in custody by the State is permissible only as a consequential step in the adjudication of criminal guilt of that citizen for past acts". Mr Benbrika relied upon this formulation. There is, however, insufficient constitutional foundation to expand the Lim principle from one which is concerned with the separation of powers to one which is also founded upon the liberty of the individual and is a substantive constraint upon all legislative, executive, and judicial power. For better or for worse, every day every branch of government exercises power which deprives people of their liberty of action. In some circumstances, the deprivation of a person's liberty might be slight. An example is laws that prevent a person driving through a red light at an intersection. In other circumstances, the deprivation might be more substantial. An example is the inability during a pandemic to leave one's premises to engage in many of the usual activities of life. The involuntary detention of a person in custody is one of the most extreme constraints upon liberty but, apart from considerations founded upon separation of powers or pertaining to the nature of judicial power, there has never been any independent constitutional principle of individual liberty that denies to the State the power to implement a policy choice that deprivation of liberty is required for an orderly society. From a libertarian perspective, the creation of new constitutional restraints upon power to detain a person in order to ensure their liberty might be laudable. But constitutional implications to protect liberty must be based upon the text and structure of the Constitution. However desirable such implications might be thought to be, they cannot be superimposed without constitutional foundation438. Moreover, even as a matter of superimposed policy, it is hard to see why such an implication should be limited only to full-time detention in the custody of the State. Why should the same protection of liberty not extend also to a regime of "periodic detention" in the custody of the State? Why should it not extend also to periods of home detention or detention at places outside a custodial institution? And why should the implication be limited to detention when non-custodial measures, such 437 (2004) 223 CLR 575 at 612 [79]-[80]. 438 Gerner v Victoria (2020) 95 ALJR 107 at 111 [14]. Edelman as sweeping control orders, could involve a greater overall restraint upon liberty than a short period of detention? The creation of a new implication that constrains the power of all branches of government to restrict a person's liberty by detention would also be subject to so many exceptions, which are neither "clear nor within precise and confined categories"439, as to deny any coherence to the rule. The exceptions would include disparate circumstances such as the following440: detention to protect the community from threatened harm by persons with contagious diseases or chemical, biological and radiological emergencies; detention of persons with mental illnesses or in need of drug treatment even where those persons pose no threat of harm to anyone other than themselves; the detention of aliens pending deportation where no harm to the community would be involved at all because the detained aliens pose no threat of any harm to anyone; and the refusal of bail for a person who poses no threat of reoffending but who might abscond. Even if the focus of the proposed new implication were confined to judicial power β an implication that, subject to exceptions, detention could only be ordered as a consequential step in the adjudication of criminal guilt of that citizen for past acts β such an implication would likely recognise so many varied and diverse historical exceptions that the implication would lack coherence. The exceptions on historical grounds could include: judicial orders committing a person to an institution to be detained on the ground of insanity or mental illness441; judicial orders for arrest and detention pending extradition442; judicial orders detaining a 439 Kruger v The Commonwealth (1997) 190 CLR 1 at 110. See also Behrooz v Secretary, Department of Immigration and Multicultural and Indigenous Affairs (2004) 219 CLR 486 at 499 [20]. 440 See also the legislation referred to in Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 654 [217]. 441 See Williamson v Brown (1914) 18 CLR 433, considering s 6 of the Lunacy Act 1898 (NSW). See also Lunacy Act 1890 (Vic) (54 Vict No 1113), ss 4, 9; The Lunatics Act 1865-6 (SA) (29 Vict No 19), ss 6, 7; The Lunacy Act 1871 (WA) (34 Vict No 9), ss 11, 12, 38; The Insane Persons' Hospitals Act 1858 (Tas) (22 Vict No 23), s 13. 442 See Extradition Act 1988 (Cth), ss 12, 15. See, earlier, The Extradition Act 1870 (Imp) (33 & 34 Vict c 52), ss 8, 10; Extradition (Foreign States) Act 1966 (Cth), Edelman person by refusal of bail pending trial443; judicial orders detaining particular debtors who were in default444; and judicial orders detaining inebriates445. The boundaries of judicial power The form of judicial power is not limited to adjudication of existing rights and obligations Mr Benbrika submitted that the power to make a continuing detention order is not judicial as it involves the determination of new rights and obligations, as opposed to the determination of existing rights and obligations having regard to past events. The latter is certainly the most common feature of power that is judicial in form. The most famous expression of judicial power, by Griffith CJ, focuses upon a tribunal being called upon to give a decision concerning "controversies between its subjects, or between itself and its subjects"446, which, as Kitto J has explained, generally involve "a question as to the existence of a right or obligation, so that an exercise of the power creates a new charter by reference to which that question is in future to be decided as between those persons or classes of persons"447. But while such statements aim to describe "what lies at the very centre of judicial power"448, they are neither exclusive nor exhaustive statements of judicial power449. It would be a flawed approach to constitutional interpretation to give the fluid concept of judicial power an essential meaning that is "cribbed, cabined and 443 Blackstone, Commentaries on the Laws of England (1769), bk 4, ch 22 at 293-294. 444 Judgment Creditors' Remedies Act 1901 (NSW), ss 19-22; The Debtors Act 1870 (Tas) (34 Vict No 33), s 4. See also R v Wallace; Ex parte O'Keefe [1918] VLR 285, considering the Imprisonment of Fraudulent Debtors Act 1915 (Vic). 445 Inebriates Act 1900 (NSW), s 1; Inebriates Act 1890 (Vic) (54 Vict No 1101), ss 8, 9. See also Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 590 [13]. 446 Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330 at 357. 447 R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361 at 374, quoted in R v Ludeke; Ex parte Australian Building Construction Employees' and Builders Labourers' Federation (1985) 159 CLR 636 at 655. 448 R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254 at 307. 449 R v Davison (1954) 90 CLR 353 at 366-367. See also Precision Data Holdings Ltd v Wills (1991) 173 CLR 167 at 188-189. Edelman confined"450 at a low level of generality closely associated with resolving controversies about rights and obligations. One reason this would be flawed is that this definition would exclude exercises of power, contemporary in 1901, involving the creation of rights and obligations by reference to a status such as in cases of matrimonial causes, bankruptcy, probate, and the winding up of companies451. Another reason is that it would exclude exercises of power, again contemporary in 1901, involving exposure of a party to a new liability such as an order to make discovery or to give an account452. Even more fundamentally, the fluidity of the concept of judicial power requires any attempt at essential meaning to be at a high level of generality. As Sawer wrote453: "[T]he delimitation of the frontiers of judicial power for the purpose of applying Chapter 3 of the Constitution is never likely to be reduced to a deductive system of propositions. Like so many other questions of constitutional law, its solution requires judicial statesmanship in which questions of expediency and the adjustment of governmental methods to the changing needs of a complex society must play a large part." Judicial power must be exercised judicially It is not enough to satisfy the requirements of Ch III of the Constitution that a power conferred upon a court is judicial in form. Apart from matters incidental to the power, it must also only be exercisable judicially. Mr Benbrika submitted that the exercise of judicial power to punish a person by involuntary detention is impermissible where the detention is "divorced from the judgment of guilt because it is prospective". Although Mr Benbrika did not articulate precisely why punishment of a person for something they have not done, but might do, was contrary to the requirements for judicial power, the basis for the submission must lie in the individual injustice that arises from a continuing detention order made under s 105A.7 which, the submission assumed, would require the exercise of that power in an unjudicial manner. The use of a judicial power to impose further 450 Mason, "Foreword", in Lindell, Cowen and Zines's Federal Jurisdiction in Australia, 4th ed (2016) v at vi. See Shakespeare, Macbeth, act III, scene 4. 451 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 597 [34]; Thomas v Mowbray (2007) 233 CLR 307 at 328 [15]-[16]; Attorney-General (NT) v Emmerson (2014) 253 CLR 393 at 430-431 [57]. 452 Bell Lawyers Pty Ltd v Pentelow (2019) 93 ALJR 1007 at 1029 [95]; 372 ALR 555 453 Sawer, "The Judicial Power of the Commonwealth" (1948) 1 University of Western Australia Annual Law Review 29 at 29. Edelman detention as protective punishment beyond that which Parliament has assessed as deserved for the offence is unjust from the perspective of the individual. The individual experiences the order as punishment that they do not deserve for something that they have not done. As Ashworth and Zedner have observed, the logic of protective punishment454 "applies without respect for whether the subject is a responsible agent or not"455. Consistently with the imprecision in any essential meaning of judicial power, the boundary at which the exercise of judicial power becomes unjudicial is also imprecise and elastic. But "[e]lasticity has not meant that what is of the essence of the judicial function may be destroyed"456. In different contexts, such as where judicial power is conferred without a duty to give reasons for decision on important issues457 or arguably some instances where judicial power is to be exercised without key elements of procedural fairness458, the assessment of when judicial power is exercised unjudicially, or contrary to the essence of the judicial function, will involve different considerations. The individual injustice of a continuing detention order is insufficient to make the manner of exercise of the relevant power unjudicial. The manner of exercise of judicial power does not cease to be judicial merely because that exercise would cause injustice from an individual perspective. Judicial power, and justice, also operate at a broader level of giving effect to the policy of Parliament as reflected in legislative purpose. But when considered from the perspective of both the individual and the legislative purpose then, almost by definition, power cannot be exercised judicially if its exercise would always cause injustice and if the power lacks justification. 454 Described by the authors as "punitive-preventive" measures: Ashworth and Zedner, Preventive Justice (2014) at 16. 455 Ashworth and Zedner, Preventive Justice (2014) at 19. 456 In re Richardson (1928) 160 NE 655 at 657. See Hilton v Wells (1985) 157 CLR 57 at 82; Grollo v Palmer (1995) 184 CLR 348 at 364; Wainohu v New South Wales (2011) 243 CLR 181 at 202 [30]. 457 See Wainohu v New South Wales (2011) 243 CLR 181 at 213-215 [54]-[58], 228 458 See Leeth v The Commonwealth (1992) 174 CLR 455 at 469-470; International Finance Trust Co Ltd v New South Wales Crime Commission (2009) 240 CLR 319 Edelman The approach taken in the joint judgment in Lim when considering whether detention of aliens by the Executive was "justified by valid statutory provision"459 was that detention would be punitive and invalid if it was not "limited to what is reasonably capable of being seen as necessary" for the purposes of deportation or processing of an entry permit460. And, as to the exercise of judicial power, as Gummow J observed in Fardon461, the majority judgments in Kable v Director of Public Prosecutions (NSW)462, to varying degrees, accepted the submission that the relevant Act, which was held to be invalid, was "not a carefully calculated legislative response to a general social problem". As an issue separate from the characterisation of the type of power involved463, this "reasonable necessity" or "carefully calculated legislative response" approach to justification of the exercise of judicial power can be expressed with additional transparency by the more common explication of these concepts through a form of structured proportionality analysis. On that approach, protective punishment will be unable to be justified in two circumstances: (i) where the purpose of the protective punishment could easily be met to the same extent by reasonable alternatives, such as less restrictive control orders, which could achieve the statutory purpose without the extreme constraint upon liberty of detention; and (ii) where the purpose for the protective punishment, assessed primarily by reference to the importance placed upon that purpose by Parliament464, is so slight or trivial that it cannot justify detention of an individual. As with other instances where structured proportionality applies, and subject to reading down, severance, or disapplication465, it will only be in extreme cases that justification will fail on this latter basis: the very integrity and impartiality of the courts which the principle protects would be seriously impaired if the judiciary 459 (1992) 176 CLR 1 at 19. 460 (1992) 176 CLR 1 at 33. 461 (2004) 223 CLR 575 at 614-615 [91]. 462 (1996) 189 CLR 51. 463 Falzon v Minister for Immigration and Border Protection (2018) 262 CLR 333 at 464 Compare Clubb v Edwards (2019) 267 CLR 171 at 343-344 [496]. 465 Acts Interpretation Act, s 15A. Edelman could generally refuse to implement statutory provisions on the grounds of an objection to legislative policy466. An example of the first circumstance of lack of justification, in the different context of the fourteenth amendment due process limits to the exercise of judicial power in the United States, is the decision of Stevens J in BMW of North America Inc v Gore467. With the concurrence of four other members of the Supreme Court of the United States, Stevens J denied the power to make judicial awards that are "grossly excessive" in relation to the State's legitimate interests in punishing unlawful conduct and deterring its repetition468. As to the second circumstance where justification will not be established, an extreme example, which has been described as "difficult to defend" in the United States and which might equally face difficulty in Australia, may be life preventive detention, without further review, after a sentence is served for a third minor fraud offence469. Mr Benbrika approached the question of justification by reference to different criteria. In the context of a submission concerning whether s 105A.7 could be justified if it did not have a punitive character, Mr Benbrika submitted that justification required a purpose to prevent harm rather than to prevent crime. This approach to justification should not be accepted. It would depart from longstanding and fundamental premises of our criminal system: "conduct is regarded as criminal for the very reason that its commission harms society, or some part of it"470 and it is rarely the role of a court to second-guess Parliament's decision about the seriousness of the harm that various crimes will have to the community. An example can illustrate the difficulty of Mr Benbrika's approach, which would have the courts reassess Parliament's assumption that a serious Pt 5.3 offence always has the potential to involve harm to the community so as to warrant continuing detention in cases where the likelihood of committing a serious Pt 5.3 offence is sufficiently high and the consequences of the offence involve sufficient threat to "the safety and protection of the community" as to make the risk of 466 Vella v Commissioner of Police (NSW) (2019) 93 ALJR 1236 at 1244-1245 [24]; 374 ALR 1 at 8, quoting Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 468 BMW of North America Inc v Gore (1996) 517 US 559 at 568. 469 See Robinson, "Punishing Dangerousness: Cloaking Preventive Detention as Criminal Justice" (2001) 114 Harvard Law Review 1429 at 1456. 470 McGarry v The Queen (2001) 207 CLR 121 at 129 [20]. Edelman committing the offence "unacceptable". The example is the offence contained in s 101.4(1) in Pt 5.3, punishable by up to 15 years' imprisonment, of possessing a thing connected with preparation for, the engagement of a person in, or assistance in a terrorist act where the person in possession knows of that connection. When that offence was first introduced into Parliament, it was proposed as one of absolute liability with a penalty of a maximum term of life imprisonment471, although the mental element was introduced following a report by the Senate Legal and Constitutional Legislation Committee472. Mr Benbrika's submission effectively invites this Court to conclude that, even when committed with the required mental element of knowledge of the connection with terrorism, Parliament erred by treating such conduct as always having the potential to involve harm to the community so as to empower continuing detention in cases involving relevantly "unacceptable" risk. This is so despite that conduct being connected with action which strikes at the heart of a civilised society, involving advancing a political, religious or ideological cause by intimidation or coercion, and excluding reasons of advocacy, protest, dissent or industrial action unless the action is intended to cause various types of serious harm to people. An approach which asserts that the commission of any serious Pt 5.3 offences is not sufficient to empower a continuing detention order in appropriate cases is also inconsistent with this Court's decision in Fardon, which upheld the validity of the Dangerous Prisoners (Sexual Offenders) Act 2003 (Qld). That regime empowered continuing detention orders to be made against a person serving a term of imprisonment for the commission of a "serious sexual offence", which was defined in the Schedule to the Act in terms which, irrespective of circumstances, extended to all offences of a sexual nature committed involving violence or against children. The definition of "serious sexual offence" contained in the Schedule has since been amended also to include offences of a sexual nature "against a person, including a fictitious person represented to the prisoner as a real person, whom the prisoner believed to be a child under the age of 16 years". Notwithstanding the vast range and "spectrum of conduct"473 involved in the included sexual offences, this Court in Fardon quite rightly did not second-guess Parliament's conclusion that all such offences could potentially involve harm to the community sufficient to permit consideration of a continuing detention order. It is hard to see why such an approach should be apt for sexual offences but not for offences of terrorism. This is particularly so in circumstances where the statutory 471 Security Legislation Amendment (Terrorism) Bill 2002, Sch 1, item 4. 472 Parliament of Australia, Senate Legal and Constitutional Legislation Committee, Consideration of Legislation Referred to the Committee: Security Legislation Amendment (Terrorism) Bill 2002 [No 2], Report (May 2002) at 40-45 473 CTM v The Queen (2008) 236 CLR 440 at 450 [16]. Edelman scheme in Fardon provided for continuing detention orders to be ordered in relation to the risk of the commission of offences that are subject to any term of imprisonment, a power which contrasts with Div 105A, where a continuing detention order can be ordered only in relation to the risk of the commission of offences which carry sentences, none of which any party suggested to be contrived, that must be, at a minimum, seven years' imprisonment. Mr Benbrika's submission that the judiciary should draw a distinction, independently of the purpose of Parliament, between those crimes the commission of which will always involve harm to the community and those crimes which will not always do so has a strong resonance with Blackstone's distinction between those serious crimes and misdemeanours that are naturally wrongful, mala in se, and those that are only wrongful because Parliament has forbidden them, mala prohibita, "for promoting the welfare of the society, and more effectually carrying on the purposes of civil life"474. The classification of those wrongs that are naturally wrongful, causing harm between people, and those that are not, has always been fraught with difficulty. For instance, serious offences such as robbery and burglary for which sentences even at Federation could still deprive people of their lives and not merely their liberty475 were considered at one point by Blackstone not to be "offences against natural, but only against social, rights"476. The distinction was described by Bentham as "being so shrewd and sounding so pretty" but having no meaning477. By 1822, Best J described the distinction as "long since exploded"478 and much later, in this Court, Brennan J described the distinction as "discarded"479. Whatever the merits of the distinction elsewhere, it is not a basis for discerning whether the exercise of the judicial power of the Commonwealth to detain is justified or not. 474 Blackstone, Commentaries on the Laws of England (1765), bk 1, Introduction at 475 Crimes Act 1890 (Vic) (54 Vict No 1079), ss 111, 122; The Criminal Law Consolidation Ordinance 1865 (WA) (29 Vict No 5), s 4. 476 Blackstone, Commentaries on the Laws of England (1769), bk 4, ch 1 at 9. 477 Bentham, A Comment on the Commentaries: A Criticism of William Blackstone's Commentaries on the Laws of England (1928), Section VIII at 80. 478 Bensley v Bignold (1822) 5 B & Ald 335 at 340-341 [106 ER 1214 at 1215-1216]. 479 He Kaw Teh v The Queen (1985) 157 CLR 523 at 579. Edelman Division 105A creates judicial power to be exercised judicially Division 105A involves power that is judicial in form Mr Benbrika pointed to two aspects of the power to make a continuing detention order under Div 105A that, in his submission, supported the conclusion that the form of the power is not judicial: it creates new rights rather than determining existing rights or obligations; and it lacks the conclusiveness that attends an exercise of the judicial power of the Commonwealth because it is subject to continuing review which depends on an application for that review by the Minister480. As explained above, particular indicia such as these are not conclusive. In a different context, the failure of a power to determine existing rights or obligations or the involvement of the Executive might support a conclusion that the power is not, in form, judicial. But other significant aspects of Div 105A point powerfully to the judicial character of the power. First, the conferral on a court of the power to make a continuing detention order founds an inference that the power is a judicial power481. This inference is all the more compelling since the subject matter of the power to detain is analogous to traditional criminal punishment, which has long been accepted to be the exclusive province of the judiciary, and since the power is to be exercised, as described below, with the usual incidents of a judicial exercise of power. Secondly, as was explained in the joint judgment in Vella482, although preventive justice powers might be enacted with considerable judicial latitude to develop governing principles within open-textured criteria, the development of the scope of judicial power in this epexegetical manner is consistent with history, authority, and principle and the approach of balancing matters including magnitude and likelihood of risk is an exercise in which courts engage nearly every day483. Finally, even if there were doubt about whether the making of continuing detention orders by courts involved an exercise of judicial power, historical considerations would provide confirmation484. Since the 14th century, preventive order regimes such as binding over orders, writs of supplicavit, and injunctions to restrain the 480 Criminal Code, s 105A.10(4). 481 R v Spicer; Ex parte Australian Builders' Labourers' Federation (1957) 100 CLR 277 at 305; Thomas v Mowbray (2007) 233 CLR 307 at 341 [59]. 482 (2019) 93 ALJR 1236 at 1257-1260 [82]-[90]; 374 ALR 1 at 25-28. 483 (2019) 93 ALJR 1236 at 1259 [88]; 374 ALR 1 at 27-28. 484 TCL Air Conditioner (Zhongshan) Co Ltd v Judges of the Federal Court of Australia (2013) 251 CLR 533 at 574 [105], quoting R v Davison (1954) 90 CLR 353 at 382. Edelman commission of criminal acts and public wrongs have all been part of the exercise of judicial power485. The judicial power to make a continuing detention order is required by Div 105A to be exercised judicially There are many aspects of Div 105A that require that the judicial power in s 105A.7 be exercised in a judicial manner. The formal hearing is conducted according to established and accepted judicial methods486. Civil rules of evidence and procedure generally apply487; rules of procedural fairness are expressly or impliedly required488; provision is made for financial assistance to obtain legal representation489; reasons are required for decision490; and rights of appeal are created491. However, Mr Benbrika submitted that the power to make a continuing detention order would not be exercised in a judicial manner, and hence could not be conferred by the Commonwealth Parliament consistently with Ch III of the Constitution, because it involves the imposition of criminal punishment but not in the traditional category of a response to an anterior finding of criminal guilt. As explained above, this submission is too blunt. Although the judicial power of the Commonwealth contemplated by Ch III of the Constitution concerns power that must be exercised judicially, this does not preclude a court from making orders that impose an injustice upon an individual where that injustice is justified by the purpose of Parliament. Division 105A of the Criminal Code is not unjustified on the basis that Parliament's purpose in empowering continuing detention orders by s 105A.7 could easily be met to the same extent by reasonable, less restrictive alternatives. The regime of continuing detention of serious sexual offenders that was considered 485 Vella v Commissioner of Police (NSW) (2019) 93 ALJR 1236 at 1257 [83]; 374 ALR 486 See Thomas v Mowbray (2007) 233 CLR 307 at 335 [30], 508 [598]-[599]; New South Wales v Kable (2013) 252 CLR 118 at 132 [27]. 487 Criminal Code, ss 105A.13, 105A.14. 488 See, eg, Criminal Code, s 105A.14. 489 Criminal Code, s 105A.15A. 490 Criminal Code, s 105A.16. See Wainohu v New South Wales (2011) 243 CLR 181 491 Criminal Code, s 105A.17. Edelman in Fardon permitted a "lesser option"492 of conditional release under a "supervision order". The terrorism regime in Div 105A goes further. It expressly requires, before a continuing detention order can be made under s 105A.7(1), that the court is satisfied that there is "no other less restrictive measure that would be effective in preventing the unacceptable risk" of the terrorist offender committing a serious Pt 5.3 offence. Further, as explained above, the proper interpretation of s 105A.7(1) requires the judicial assessment of whether the risk of commission of a serious Pt 5.3 offence is "unacceptable" to take into account both the likelihood of the risk and the magnitude of the harm to the community, including by the mandatory consideration of "the safety and protection of the community"493. The alternative interpretation contemplated by Mr Benbrika, which ignores the magnitude of harm in an attempt to find invalidity, is not reasonably open494. And even if it were open it would be an example of an approach to interpretation deprecated by this Court as one of "mutilating narrowness"495. Nor can it be said that Div 105A is unjustified because the extreme restraint on liberty of a continuing detention order under s 105A.7 could be made for slight or trivial reasons. The legislative purpose, enunciated in s 105A.1, of providing for the possibility of continuing detention for those who pose an unacceptable threat of committing serious Pt 5.3 offences is one which concerns the protection of the community from offences which can be aimed at the very destruction of civilised society. The Commonwealth Parliament treated this as a purpose of great importance and no submission was made to suggest the contrary. Weighed against the importance of this purpose, Div 105A imposes a serious constraint on liberty by protective punishment but Div 105A also places limits upon the protective punishment of the continuing detention order. The maximum term of an initial continuing detention order is three years496. Reviews of the order are required at least on an annual basis497. And the terrorist offender can apply for a review of the 492 (2004) 223 CLR 575 at 619 [109]. 493 Criminal Code, s 105A.8(1)(a). 494 cf Vella v Commissioner of Police (NSW) (2019) 93 ALJR 1236 at 1249 [51]; 374 ALR 1 at 15. 495 Residual Assco Group Ltd v Spalvins (2000) 202 CLR 629 at 644 [28], quoting United States v Hutcheson (1941) 312 US 219 at 235. 496 Criminal Code, s 105A.7(5). 497 Criminal Code, s 105A.10. Edelman order if there are new facts or circumstances which would justify the review or if a review would be in the interests of justice having regard to the purposes of the order and the manner and effect of its implementation498. Finally, it should be noted that Mr Benbrika's submissions were premised upon the assumption that the protective punishment occasioned by a continuing detention order against him would arise from the order of a court. Mr Benbrika made no submission that the retrospective operation of Div 105A upon him, insofar as the regime of continuing detention applied to offenders like him whose offences were committed prior to its enactment, meant that the regime imposed punishment by the Commonwealth Parliament. A significant obstacle to such a submission in this case, as in Fardon, would be that the legislation created only the liability for protective punishment and that the form of protective punishment created was primarily forward-looking to Mr Benbrika's circumstances in the final 12 months of his sentence. Conclusion As these reasons have explained, in answering the question reserved, namely whether all or any part of Div 105A is invalid for the reasons asserted, "deception or false labelling"499 should be avoided and it should be recognised that a continuing detention order under s 105A.7 is within the category of "punishment" in a broad sense as contemplated by the joint judgment in Lim. But, howsoever described, the issues anterior to the question reserved are: (i) is the power in s 105A.7 of a nature that is exclusively judicial? If so, and in order for the conferral of power to be valid, (ii) has the power been conferred only upon the judiciary in the form of judicial power? and (iii) is the power to be exercised only judicially? The answers to these questions are "yes", "yes", and "yes". For these reasons the question reserved should be answered "no". Mr Benbrika sought to make further submissions concerning costs in light of this Court's reasons for decision if the question were answered adversely to him. It appears that he had in mind submissions concerning provisions such as s 105A.15A and protective costs orders that were made in his favour in the Supreme Court of Victoria. I would have granted him that liberty. But in the absence of that liberty, and hence without considered submissions by Mr Benbrika concerning any connection between, on the one hand, the reasons given by this Court and, on the other hand, the issues in the proceedings heard in the Supreme 498 Criminal Code, s 105A.11. 499 Husak, "Preventive Detention as Punishment? Some Possible Obstacles", in Ashworth, Zedner and Tomlin (eds), Prevention and the Limits of the Criminal Law Edelman Court of Victoria and costs orders in that Court, the usual order as to costs should be made requiring Mr Benbrika to pay the costs of the applicant. |
HIGH COURT OF AUSTRALIA THE QUEEN AND APPELLANT RESPONDENT The Queen v Beckett [2015] HCA 38 23 October 2015 ORDER Appeal allowed. Set aside orders 2 and 3 of the Court of Criminal Appeal of the Supreme Court of New South Wales made on 12 December 2014 and, in lieu thereof, dismiss the appeal to that Court. On appeal from the Supreme Court of New South Wales Representation L A Babb SC with S C Dowling SC for the appellant (instructed by Solicitor for Public Prosecutions (NSW)) G O'L Reynolds SC with D P Hume for the respondent (instructed by Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS The Queen v Beckett Criminal law β Attempt to pervert the course of justice β Where respondent questioned in compelled interview about property transfer she stamped for which no duty paid β Where respondent allegedly altered photocopies of cheques β Where respondent allegedly gave false evidence under oath β Where respondent charged with perverting the course of justice under s 319 of Crimes Act 1900 (NSW) β Whether offence of perverting the course of justice only applies to conduct committed after judicial proceedings commence β Whether "course of justice" within meaning of s 319 requires jurisdiction of court or competent judicial tribunal to have been invoked. Words and phrases β "contemplated proceedings", "course of "intention", "judicial proceedings", "pervert the course of justice", "tendency". justice", Crimes Act 1900 (NSW), s 319. Taxation Administration Act 1996 (NSW), Pt 6, Div 2, s 72. FRENCH CJ, KIEFEL, BELL AND KEANE JJ. Section 319 of the Crimes Act 1900 (NSW) ("the Crimes Act") makes it an offence for a person to do any act, or make any omission, intending in any way to pervert the course of justice. The course of justice begins with the filing or issue of process invoking the jurisdiction of a court or judicial tribunal or the taking of a step that marks the commencement of criminal proceedings1. The issue in the appeal is whether liability for the s 319 offence is confined to acts or omissions carried out with the intention of perverting an existing course of justice. Procedural history The respondent was arraigned in the District Court of New South Wales (Sweeney DCJ) on an indictment which charged her with an offence under s 319 ("count one") and, in the alternative, with making a false statement on oath under s 330 of the Crimes Act ("count two"). The conduct giving rise to each offence is alleged to have taken place during the course of a compelled interview conducted under the Taxation Administration Act 1996 (NSW) ("the TA Act") between the respondent and investigators from the Office of State Revenue ("the OSR") ("the interview"). It is alleged that, during the interview, the respondent produced photocopies of two forged bank cheques and made false statements to the investigators, with a view to concealing the true facts and thereby preventing her prosecution for one or more offences under taxation law ("the impugned conduct"). By notice of motion dated 4 December 2013, the respondent demurred and moved to quash the indictment or to permanently stay proceedings on it as an abuse of the process of the court. The notice of motion was listed for hearing on 9 December 2013. On that date, the respondent was arraigned and entered pleas of not guilty to each count in the indictment. Her counsel then moved for the relief claimed in the motion. The regularity of the procedure is not in issue2. 1 R v Rogerson (1992) 174 CLR 268 at 276 per Mason CJ, 283 per Brennan and Toohey JJ, 303-304 per McHugh J; [1992] HCA 25. 2 The demurrer is an antiquated plea that has been largely overtaken by the mechanism of the motion to quash. The demurrer is an allegation in writing identifying an error on the face of the indictment. It is made before the accused is arraigned. The motion to quash should also be taken before arraignment. See Criminal Procedure Act 1986 (NSW), s 17(1); R v Chapple and Bolingbroke (1892) 17 Cox CC 455 at 457 per Hawkins J; R v Inner London Quarter Sessions, Ex parte Metropolitan Police Commissioner [1970] 2 QB 80 at 83-84 per (Footnote continues on next page) Bell Relevantly, the respondent's complaint was with count one. She contended that the prosecution is "foredoomed to fail" because, at the time of the impugned conduct, no "course of justice" was in existence. If the prosecution of the offence charged in count one was inevitably destined to fail, the claim for a permanent stay of proceedings on that count would be good. Sweeney DCJ dismissed the motion. Her Honour held that a prosecution for an offence under s 319 could be maintained notwithstanding that no judicial proceedings had been commenced at the time of the impugned conduct. In this respect, her Honour relied on R v OM3. Her Honour also said that the impugned conduct was "capable of establishing that a course of justice existed". The respondent applied for leave to appeal to the Court of Criminal Appeal of the Supreme Court of New South Wales (Beazley P, R A Hulme and Bellew JJ) under s 5F of the Criminal Appeal Act 1912 (NSW). She contended, inter alia, that Sweeney DCJ erred in finding both that there was a course of justice in existence at the date of the interview (ground three in the Court of Criminal Appeal) and that the prosecution was capable of establishing a prima facie case (ground 13 in the Court of Criminal Appeal). The Court of Criminal Appeal said that Sweeney DCJ was wrong to find that at the time of the interview there was a "course of justice" in existence4. Their Honours held that the impugned conduct was incapable of constituting the s 319 offence because it occurred before the jurisdiction of a court or competent judicial tribunal was invoked5. The respondent was granted leave to appeal, count one on the indictment was permanently stayed and the appeal was otherwise dismissed. On 15 May 2015, Kiefel and Bell JJ granted the Director of Public Prosecutions special leave to appeal. The appellant submits that an act done before the commencement of judicial proceedings may constitute an offence Cantley J; R v Boston (1923) 33 CLR 386 at 396 per Isaacs and Rich JJ; [1923] HCA 59. (2011) 212 A Crim R 293. 4 Beckett v The Queen (2014) 315 ALR 295 at 319 [105] per Beazley P (R A Hulme J agreeing at 335 [189], Bellew J agreeing at 335 [190]). 5 Beckett v The Queen (2014) 315 ALR 295 at 320 [111] per Beazley P (R A Hulme J agreeing at 335 [189], Bellew J agreeing at 335 [190]). Bell contrary to s 319 where it is done with intent to frustrate or deflect the course of judicial proceedings that the accused contemplates may possibly be instituted. For the reasons to be given, that submission must be accepted. The orders of the Court of Criminal Appeal made on 12 December 2014 permanently staying the prosecution of the offence charged in count one must be set aside and, in lieu thereof, the appeal to that Court be dismissed. The factual background On the hearing of the motion before Sweeney DCJ the prosecution tendered the evidence on which it proposed to rely at the respondent's trial. This included the oral evidence of the two OSR officers who conducted the interview. The EDR scheme The respondent is a solicitor. As at June 2010, the respondent was an approved person under the Electronic Duties Returns ("EDR") scheme operated by the OSR under the TA Act6. The EDR scheme permits the Chief Commissioner of State Revenue ("the Commissioner"), by written notice, to give approval for a special arrangement for the lodging of returns and payment of tax to a specified agent on behalf of taxpayers of a specified class (an "approval")7. An approval may authorise the lodging of returns and payments of tax by electronic means8. An approval is subject to conditions specified by the Commissioner in the notice of approval or by subsequent written notice9. The respondent's approval was issued on or about 24 February 2003. She was approved to stamp transfers of real property upon receipt of a notice of assessment using accountable stamps issued by the OSR. The duty was to be paid by "return". The respondent's "return frequency period" was weekly, commencing on each Sunday. She was required to lodge payments of duty on or before the following Thursday of each week. In April 2007, the OSR issued a document titled "Directions for Using Electronic Duties Return" ("the EDR Directions"). The respondent was sent a 6 TA Act, Pt 6, Div 2. 7 TA Act, s 37(1)(b). 8 TA Act, s 37(2)(b). 9 TA Act, s 39(1). Bell copy of the EDR Directions and was asked to complete an "EDR β Application for Approval of Special Tax return Arrangements" form ("the application"). The respondent signed the application on 21 June 2007. The EDR Directions contained a statement of the "Settlement Policy": "An approved person must have the duty payable available to them prior to processing transactions online. This is the case for all EDR transactions except those where the duty payable will be collected at settlement." The Darling Point unit transaction In July 2009, the respondent wrote to the OSR requesting that the transfer of a unit in Darling Point be assessed for nominal duty only. The property was being transferred by the trustee of a family trust to a beneficiary of the trust. It appears the respondent considered the transfer fell within an exemption under the Duties Act 1997 (NSW) ("the Duties Act")10. In March 2010, the respondent was informed that the transfer did not qualify for the exemption and was liable to payment of ad valorem duty. On 11 June 2010, the respondent raised an online assessment of duty payable for the transfer of the Darling Point unit in the amount of $29,240 together with $17,416 by way of penalty interest. The respondent stamped the transfer. The duty and interest were payable to the OSR on or before 17 June 2010. Neither amount was paid. On 10 September 2010, the respondent received a letter from the OSR notifying her of the suspension of her firm's approval by reason of her failure to remit the duty on the transfer of the Darling Point unit. The respondent was advised that her reinstatement as an approved user of the EDR scheme would only be considered once the outstanding payment had been made and she had confirmed her willingness to meet all conditions as an EDR-approved user in the future. By letter dated 17 September 2010, the OSR informed the respondent it would be undertaking a "taxation investigation ('audit')" of her practice. She was advised that prosecution action may be considered should any breach of the TA Act or the Duties Act be detected. 10 s 55(1)(b). Bell On 21 September 2010, David Morse, a Senior Prosecutions Officer at the OSR, had a telephone conversation with the respondent. According to Mr Morse, the respondent told him that the ANZ Bank had lost the bank cheque for the stamp duty on the Darling Point unit. Mr Morse told the respondent that the OSR wished to inspect her conveyancing files for the Darling Point unit transfer. He asked her to attend an interview on 28 September 2010. On 21 September 2010, Mr Morse also issued a notice under s 72(1) of the TA Act requiring the respondent to provide the original vendor's file for the transaction involving the transfer of the Darling Point unit. On the same day, Mr Reid, a Senior Investigator at the OSR, issued a notice under s 72 of the TA Act requiring the respondent to attend and give evidence before him on 28 September 2010. That notice informed the reader that the purpose of the examination was to determine if there had been any breaches of provisions of the Duties Act and the TA Act. On 28 September 2010, the respondent attended the interview. At its commencement she was advised that information or documents obtained during the course of the interview may be referred to the Crown Solicitor. She was informed that it is an offence to make a statement to a taxation officer knowing it to be false or misleading or to fail, without reasonable excuse, to answer questions relevant to an investigation. She was cautioned that she did not have to answer questions if her answers may tend to incriminate her. The respondent produced her file for the transfer of the Darling Point unit at the interview. The file contained photocopies of two bank cheques in favour of the OSR bearing the date 26 September 2009. The respondent acknowledged her liability to pay the stamp duty and penalty interest on the transfer of the Darling Point unit. She made arrangements to pay the same in instalments. It is the appellant's case that the dates on the bank cheques are forged and that each was issued on 26 September 2010. The appellant contends that the respondent made intentionally false statements in the interview conveying that, at the date she stamped the transfer for the Darling Point unit, she had the stamp duty available to her. She is alleged to have produced the photocopies of the cheques and made the false statements with the intention of preventing possible prosecution for offences under the TA Act. Bell Intent to pervert the course of justice Section 319 is in Pt 7 of the Crimes Act and provides: "A person who does any act, or makes any omission, intending in any way to pervert the course of justice, is liable to imprisonment for 14 years." Section 312, which is also in Pt 7, provides: "A reference in this Part to perverting the course of justice is a reference to obstructing, preventing, perverting or defeating the course of justice or the administration of the law." The appellant submits that the offence created by s 319 is complete upon the doing of an act or the making of an omission intending in any way thereby to pervert the course of justice. In the appellant's submission, an act done or an omission made with the proscribed intention in contemplation of the institution of proceedings attracts liability in the same way as an act done with that intention respecting proceedings that are on foot. The appellant acknowledges that the Court of Criminal Appeal was correct to hold that Sweeney DCJ erred in stating that "the Crown can establish a course of justice existed during the interviews with [the respondent] for the purpose of count one". Nonetheless, the appellant submits that Sweeney DCJ was right to reason that, if the prosecution can establish that curial proceedings were in the respondent's contemplation, and that she engaged in the impugned conduct with the intention of preventing a prosecution from being brought or concealing the true facts from the court, it would be open to a jury to convict. The Court of Criminal Appeal The Court of Criminal Appeal identified the question posed by the respondent's motion as "whether there was a 'course of justice' within the meaning of s 319, that [the respondent] intended to pervert by engaging in that conduct"11. The assumption that the offence may only be committed if the accused's conduct is directed to existing proceedings was based upon statements 11 Beckett v The Queen (2014) 315 ALR 295 at 311 [72] per Beazley P (R A Hulme J agreeing at 335 [189], Bellew J agreeing at 335 [190]). 12 (1992) 174 CLR 268. Bell Rogerson concerned the ingredients of the common law offence of conspiring to pervert the course of justice. It was acknowledged that a person may attempt or conspire to pervert the course of justice at a time when no curial proceedings are on foot. However, it was explained that this is not because police investigations form part of "the course of justice". Instead, it is because conduct may have the tendency, and be intended, to frustrate or deflect proceedings that the accused contemplates may possibly be instituted13. In R v OM, the Court of Criminal Appeal considered liability for the s 319 offence in a case in which, as here, the prosecution depended upon proof of the accused's acts done before the institution of proceedings14. Beazley P, giving the leading judgment in the respondent's appeal in this case, set out a passage from the Court's reasons in OM15: "[I]f the Crown β¦ could establish that [the accused's] actions were intended to deflect the police from prosecuting him for the criminal offence that he had allegedly committed, or from adducing evidence of the true facts relating to the alleged offence, the prosecution was clearly capable of being maintained." (emphasis in Beazley P's reasons) Her Honour observed that the language in this passage is taken from the joint reasons of Brennan and Toohey JJ in Rogerson and that their Honours were considering proof of the offence of attempt to pervert the course of justice16. Beazley P took from Rogerson that the substantive offence of perverting the course of justice is "not available" where the conduct occurs before the jurisdiction of a court or competent judicial authority is invoked17. Rogerson was 13 R v Rogerson (1992) 174 CLR 268 at 277 per Mason CJ, 283 per Brennan and Toohey JJ, 304-305 per McHugh J. 14 (2011) 212 A Crim R 293. 15 Beckett v The Queen (2014) 315 ALR 295 at 317-318 [99] per Beazley P (R A Hulme J agreeing at 335 [189], Bellew J agreeing at 335 [190]) citing R v OM (2011) 212 A Crim R 293 at 306 [49] per Whealy JA (McCallum J agreeing at 308 [56], Schmidt J agreeing at 308 [57]). 16 Beckett v The Queen (2014) 315 ALR 295 at 318 [100] per Beazley P (R A Hulme J agreeing at 335 [189], Bellew J agreeing at 335 [190]). 17 Beckett v The Queen (2014) 315 ALR 295 at 318 [100] per Beazley P (R A Hulme J agreeing at 335 [189], Bellew J agreeing at 335 [190]) citing R v Rogerson (1992) 174 CLR 268 at 284 per Brennan and Toohey JJ. Bell said to be authority for the proposition that "[t]he 'course of justice' for the purposes of the substantive offence require[s] that the curial process [has] been commenced"18. Acts done before that time, having the requisite tendency and intent, amounted to the offence of attempt to pervert the course of justice19. On this analysis, Beazley P concluded that OM was wrongly decided and that Sweeney DCJ's reasoning replicated the error20. Her Honour held that the impugned conduct, if proved by admissible evidence, could not constitute the s 319 offence because it occurred before the invocation of the jurisdiction of a court or competent judicial tribunal21. The respondent's submission: "the universal principle" The respondent supports Beazley P's analysis. The respondent relies on an additional argument for the conclusion that liability under s 319 requires that there is a course of justice in existence at the date of the accused's act or omission. Section 319 is in Pt 7 of the Crimes Act, which is headed "Public justice offences". Part 7 was inserted into the Crimes Act by the Crimes (Public Justice) Amendment Act 1990 (NSW). The respondent argues that Pt 7 codifies the law respecting offences against public justice, and that the words "the course of justice" in this connection are to be understood by reference to the technical meaning that the phrase had acquired under the common law22. This meaning is said to embody a "universal principle" adopted by this Court in R v Murphy23. That principle is that liability for the offences of perverting and attempting to 18 Beckett v The Queen (2014) 315 ALR 295 at 318 [103] per Beazley P (R A Hulme J agreeing at 335 [189], Bellew J agreeing at 335 [190]). 19 Beckett v The Queen (2014) 315 ALR 295 at 318 [103] per Beazley P (R A Hulme J agreeing at 335 [189], Bellew J agreeing at 335 [190]). 20 Beckett v The Queen (2014) 315 ALR 295 at 319 [105] per Beazley P (R A Hulme J agreeing at 335 [189], Bellew J agreeing at 335 [190]). 21 Beckett v The Queen (2014) 315 ALR 295 at 320 [111] per Beazley P (R A Hulme J agreeing at 335 [189], Bellew J agreeing at 335 [190]). 22 Sungravure Pty Ltd v Middle East Airlines Airliban SAL (1975) 134 CLR 1 at 22 per Mason J; [1975] HCA 6. 23 (1985) 158 CLR 596 at 610; [1985] HCA 50. Bell pervert the course of justice requires that "a course of justice must have been embarked upon"24. The respondent's argument is constructed on passages from the reasons of Watkins LJ in R v Selvage that are extracted in Murphy25: first, the statement "one of the vital tests or principles which helps to determine whether or not a charge of perverting the course of justice is properly laid" and secondly, the opening words of the next quotation, "[t]his we take to be that a course of justice must have been embarked upon". The respondent acknowledges, as she must, that Murphy proceeded upon acceptance that interference with pre-curial investigations might constitute an attempt to pervert the course of justice. However, she submits that approval of this line of authority was unnecessary to the decision. In 1990, so the argument runs, the phrase "the course of justice" was understood consistently with the adoption of the "universal principle" as confined to a course of justice that has been embarked upon. Whatever may have been the understanding of the scope of activities coming within "the course of justice" at the date of the enactment of that Rogerson has since authoritatively determined that it does not extend to pre-curial investigations. the respondent observes The "universal principle" considered There is a jejune quality to the respondent's "universal principle" submission. The point that was being made in Murphy was that Selvage reaffirmed that a person may be guilty of attempting to pervert the course of justice notwithstanding that no legal proceedings have been instituted. The complete sentence in the passage that the Court extracted with apparent approval "This we take to be that a course of justice must have been embarked upon in the sense that proceedings of some kind are in being or are imminent or investigations which could or might bring proceedings about are in progress in order that the act complained about can be said to be one which has a tendency to pervert the course of justice." (emphasis added) 24 R v Murphy (1985) 158 CLR 596 at 610. 25 (1985) 158 CLR 596 at 610 quoting [1982] QB 372 at 381. 26 R v Selvage [1982] QB 372 at 381 per Watkins LJ. Bell Murphy was concerned with liability for the offence of attempting to pervert the course of justice under s 43 of the Crimes Act 1914 (Cth). The statutory offence mirrors the offence of attempting to pervert the course of justice under the common law27. Its gist was formulated by Pollock B in R v Vreones as "the doing of some act which has a tendency and is intended to pervert the administration of public justice"28. In common with cognate statutory provisions in Queensland, New Zealand and Canada, the offence can be committed at a time when no curial proceedings have been instituted29. Contrary to the respondent's submission, the Court in Murphy was not purporting to enunciate a "universal principle" with respect to the scope of liability for offences involving the perversion of the course of justice30. The s 319 offence The focus of the respondent's submissions on the claimed common law understanding of the phrase "the course of justice" is, in any event, beside the point. The defined phrase for the purpose of liability under s 319 is "perverting the course of justice", the meaning of which includes "preventing ... the course of justice"31. The concept that a person may pervert a course of justice by "preventing it" is eloquent of a legislative intention that liability extend to acts done with the proscribed intention in relation to contemplated proceedings. As the appellant correctly submits, liability for the offence created by s 319 hinges on the intention to pervert the course of justice and not upon the perversion of a course of justice. Once this is acknowledged, there is no reason to confine the provision's reach to conduct that is engaged in with the intention of perverting existing proceedings. Part 7 abolishes a number of common law offences against public justice, including perverting the course of justice and attempting or conspiring to pervert the course of justice32. Perverting the course of justice and attempting to pervert 27 R v Murphy (1985) 158 CLR 596 at 609. 28 R v Vreones [1891] 1 QB 360 at 369. 29 R v Murphy (1985) 158 CLR 596 at 609. 30 [2015] HCATrans 216 at 571-583. 31 Crimes Act, s 312. 32 Crimes Act, s 341. Bell the course of justice are each substantive offences33. Each has in common the doing of an act, or the making of an omission, with the intention of obstructing, preventing, perverting or defeating existing or contemplated curial proceedings. They are distinguished by result. There is nothing in the language of s 319 or the scheme of Pt 7 to suggest that the abolition of the common law offences, and the enactment of a single offence having as its elements the doing of an act or the making of an omission with the intention of obstructing, preventing, perverting or defeating the course of justice, had as its object confining liability to acts done or omissions made with the requisite intention in respect of existing proceedings. It was an error to distinguish the offence created by s 319 from the common law offence of attempting to pervert the course of justice on the basis that s 319 creates a substantive offence34. Contrary to the Court of Criminal Appeal's reasoning, nothing in Rogerson supports a conclusion that the s 319 offence is confined to conduct that is intended to pervert an existing course of justice. The Court of Criminal Appeal erred in concluding that the prosecution case, if established by admissible evidence, is incapable of establishing liability for the offence charged in count one35. Sweeney DCJ was right to dismiss the respondent's notice of motion. A tendency to pervert the course of justice? There should be reference to a further question raised in the appellant's submissions, concerning the elements of the s 319 offence. The question is whether liability for the offence requires proof that the accused's act or omission possesses the tendency to pervert the course of justice. The appellant acknowledges that the offence created by s 43 of the Crimes Act 1914 (Cth) requires proof of the tendency of the act to pervert the course of justice although that requirement is not stated in terms. As Murphy explains, s 43 is modelled on a provision of Sir James Stephen's draft criminal code, which 33 R v Rogerson (1992) 174 CLR 268 at 279 per Brennan and Toohey JJ, 298 per McHugh J; Meissner v The Queen (1995) 184 CLR 132 at 141 per Brennan, Toohey and McHugh JJ, 156 per Dawson J; [1995] HCA 41. 34 Beckett v The Queen (2014) 315 ALR 295 at 313 [81] per Beazley P (R A Hulme J agreeing at 335 [189], Bellew J agreeing at 335 [190]). 35 Beckett v The Queen (2014) 315 ALR 295 at 320 [111] per Beazley P (R A Hulme J agreeing at 335 [189], Bellew J agreeing at 335 [190]). Bell was intended to reflect the common law offence36. The appellant points out that the New South Wales legislature chose not to adopt this model and instead framed the offence on the doing of an act or the making of an omission with the proscribed intention. The appellant observes that courts in New South Wales have proceeded upon the assumption that liability for the s 319 offence incorporates a requirement for proof of the tendency of the act37, notwithstanding that the provision does not, in terms, impose that requirement. In only one instance was the issued raised. This was in Karageorge38, in which the issue was considered by two members of the Court of Criminal Appeal although it was ultimately unnecessary to the decision. Simpson J considered that the s 319 offence does not differ in any material way from the common law offence of attempting to pervert the course of justice39. By contrast Sully J agreed with Professor Gillies' analysis: the scope of s 319 is broader than the common law offence and any act that is intended to pervert the course of justice suffices for liability even if the act does not, on an objective view, possess the tendency to do so40. The appellant submits that if proof of tendency is a requirement, there is a further question of whether the nature of the tendency is an objective quality of the act or a tendency to fulfil the proscribed intention. The latter view was favoured by the Court of Appeal and the Court of Criminal Appeal, constituted in each case by the same five judges, in R v Murphy41. In this context, involving a charge under s 43 of the Crimes Act 1914 (Cth), their Honours rejected the proposition that tendency is to be equated 36 R v Murphy (1985) 158 CLR 596 at 609. 37 R v Charles unreported, New South Wales Court of Criminal Appeal, 23 March 1998 at 5 per Gleeson CJ, 19-20 per James J; Cunneen v Independent Commission Against Corruption [2014] NSWCA 421 at [23] per Bathurst CJ, [195] per Ward JA. 38 (1998) 103 A Crim R 157. 39 Karageorge (1998) 103 A Crim R 157 at 183. 40 Karageorge (1998) 103 A Crim R 157 at 160 citing Gillies, Criminal Law, 3rd ed 41 (1985) 4 NSWLR 42. Bell with the likelihood of, or with creating a possibility or risk of, producing the result42. Their Honours concluded that it is sufficient if the accused's conduct has a tendency to "fulfil the guilty intention" in the sense that it is a step directed to or aimed at fulfilling that intention43. Whether, as the appellant submits, this analysis explains the drafting of s 319, it is clear that, on the trial of a count charging an attempt to pervert the course of justice under the common law or under those statutory provisions which mirror the common law, the prosecution must prove the objective tendency of the accused's conduct to pervert the course of justice44. It is also clear that whether the conduct is successful in this respect is irrelevant to criminal liability45. An act or omission may tend towards perverting the course of justice notwithstanding that, in the event, it would not have achieved that result. Fabricating evidence with a view to averting a contemplated prosecution, as alleged here, may possess the requisite objective tendency even though any prosecution for the predicate offence is doomed to fail for reasons that are unconnected with the accused's act. Commonly, it is the tendency of the accused's conduct to obstruct, prevent or otherwise defeat proceedings, or contemplated proceedings, that is relied upon for the inference that the accused acted with the requisite intention. That is how the prosecution puts its case against the respondent here. For this reason, the appeal does not provide the occasion to consider the appellant's larger proposition, which is that liability under s 319 attaches to any act done or omission made with the proscribed intention even if the act or omission has no rational connection to obstructing, preventing, perverting or defeating proceedings or contemplated proceedings before a judicial tribunal. That issue is better left to an occasion when it is presented in a concrete factual setting. On the trial of a count charging a s 319 offence it suffices for the judge to instruct the jury in the terms of the section: the prosecution must prove that the accused did the act, or made the omission, and that, at the time of so doing, it was 42 R v Murphy (1985) 4 NSWLR 42 at 48. 43 R v Murphy (1985) 4 NSWLR 42 at 51. 44 Meissner v The Queen (1995) 184 CLR 132 at 142-143 per Brennan, Toohey and 45 Meissner v The Queen (1995) 184 CLR 132 at 142-143 per Brennan, Toohey and Bell the accused's intention in any way to obstruct, prevent, pervert, or defeat the course of justice. Orders For these reasons the following orders should be made: Appeal allowed; Set aside orders 2 and 3 of the Court of Criminal Appeal of the Supreme Court of New South Wales made on 12 December 2014 and, in lieu thereof, dismiss the appeal to that Court. Nettle NETTLE J. I have had the advantage of reading in draft the reasons for judgment of the plurality and I agree with their Honours, substantially for the reasons they give, that the appeal should be allowed. My only substantive disagreement is as to the elements of the offence created by s 319 of the Crimes Act 1900 (NSW). Their Honours have concluded that the offence is comprised of but two elements, namely: (1) that the accused did the act or made the omission alleged; and (2) that, at the time of so acting or omitting to act, it was the accused's intention in any way to obstruct, prevent, pervert, or defeat the course of justice. In my view, there is a third element: (3) that the act or omission had a tendency to pervert the course of justice. To explain why that is so, it is necessary to go back to the common law offences from which s 319 is derived. The derivation of s 319 As Mason CJ explained in R v Rogerson, the course of justice "begins with the filing or issue of process invoking the jurisdiction of a court or judicial tribunal or the taking of a step that marks the commencement of criminal proceedings"46. Hence, it will certainly begin when a person is arrested and charged. But a police investigation undertaken before the jurisdiction of the court or tribunal is so invoked is not part of the course of justice. The administration of justice and the detection of crime are separate and different functions47. Consequently, an offence of perverting the course of justice cannot be committed before the jurisdiction of the court or tribunal is so invoked. By contrast, an offence of attempting or conspiring to pervert the course of justice may be committed before the jurisdiction of the court or tribunal is invoked but only by conduct which has a tendency to frustrate or deflect a "because action taken before curial or tribunal proceedings commence may have a tendency and be intended to frustrate or deflect the course of curial or tribunal proceedings which are imminent, probable or even possible. In other words, it is enough that an act has a tendency to frustrate or deflect a prosecution or disciplinary proceeding before a judicial tribunal which the accused contemplates may possibly be 46 (1992) 174 CLR 268 at 276; [1992] HCA 25. 47 (1992) 174 CLR 268 at 276-277. 48 (1992) 174 CLR 268 at 277 (emphasis added); see also at 283-284 per Brennan and Toohey JJ, 304-305 per McHugh J. Nettle instituted, even though the possibility ... has not been considered by the police or the relevant law enforcement agency". Hitherto, the statutory offence created by s 319 has also been seen as requiring proof that conduct which is alleged to have comprised the offence had a tendency to frustrate or deflect a prosecution or disciplinary proceeding. Thus, in R v Charles49, the New South Wales Court of Criminal Appeal (Gleeson CJ, James and Barr JJ) allowed an appeal against a conviction of an offence under s 319 because the trial judge did not leave to the jury the question of whether the alleged act did have that tendency. In that case, the Crown had alleged that the accused asked a prospective witness in a coronial inquiry, Mrs Marshall, to say that she had met the accused on only one occasion. As Gleeson CJ explained, therefore50: "It was necessary for the Crown to establish that the conduct ... was doing an act which had a tendency, and was intended, to pervert the administration of public justice. ... After the Crown had established beyond reasonable doubt the primary facts relied upon concerning the communication between the appellant and Mrs Marshall, there remained substantial room for argument about whether the appellant's conduct had the tendency, and was accompanied by the intention, which the Crown set out to establish." In Karageorge51, each of the members of the New South Wales Court of Criminal Appeal accepted that the statutory offence created by s 319 of the Crimes Act includes what would have amounted to the common law offences of perverting the course of justice and attempting to pervert the course of justice. Only Sully J went further in expressing agreement52 with an argument advanced by Professor Gillies53 that the offence created by s 319 was broader than the common law offences of perverting the course of justice and attempting to pervert the course of justice in that "[i]t does not in its literal terms require the intentional doing of an act which actually perverts justice, or one having this tendency". The other members of the Court did not agree with that proposition. 49 Unreported, 23 March 1998. 50 Unreported, 23 March 1998 at 5. 51 (1998) 103 A Crim R 157. 52 (1998) 103 A Crim R 157 at 159-160. 53 Gillies, Criminal Law, 3rd ed (1993) at 820-821. Nettle Levine J noted that the statutory offence created by s 319 had been enacted as part of an attempt to abolish and replace the common law relating to public justice offences and that two of the common law offences so dealt with were the offence of perverting the course of justice and the offence of attempting to pervert the course of justice54. His Honour stated that it was unnecessary to decide whether it was incumbent on the Crown to prove that the conduct had a tendency to pervert the course of justice β because, on any rational view of the alleged conduct, it could not be regarded as other than having a tendency to pervert the course of justice. But his Honour also observed that55: "In the light of what was said in the judgments in Charles it does seem to me arguable that any 'act' relied upon by the Crown for the purposes of the prosecution of an offence under s 319 will not only have to be established as 'intending in any way to pervert the course of justice' but also to have that requisite tendency." Simpson J considered that the offence created by s 319 was not in any material way different from the common law offence of attempting to pervert the course of justice56. After referring to the elements of the common law offence identified in Meissner v The Queen57, her Honour concluded58: "Precisely the same description can be applied to an offence against s 319. It is the tendency of the act (together with the intention of the actor) that is decisive." Section 312 of the Crimes Act defines "perverting the course of justice" as "obstructing, preventing, perverting or defeating the course of justice or the administration of the law" (emphasis added). In R v Einfeld59, a question arose as to whether the expression "administration of the law" for the purposes of s 319 should be given its literal meaning, as was also argued by Professor Gillies60, and 54 (1998) 103 A Crim R 157 at 172-173. 55 (1998) 103 A Crim R 157 at 173. 56 Karageorge (1998) 103 A Crim R 157 at 183. 57 (1995) 184 CLR 132 at 140-141 per Brennan, Toohey and McHugh JJ; [1995] HCA 41. 58 Karageorge (1998) 103 A Crim R 157 at 183. 59 (2008) 71 NSWLR 31. 60 Einfeld (2008) 71 NSWLR 31 at 49-50 [73], 54 [88] citing Gillies, Criminal Law, 3rd ed (1993) at 820-821. Nettle so be read as including "the exercise by a government body of its functions in applying and enforcing the law of [New South Wales]"61. The Court of Criminal Appeal (Bell JA, Hulme and Latham JJ) held that it should not. Although the meaning of "administration of the law" is not in issue in this case, the reasoning in Einfeld is pertinent in as much as their Honours eschewed attributing a literal meaning to the expression because to do so would have resulted in the criminalisation of conduct which had not previously been criminal and because such a consequence would have ill accorded with the evident statutory purpose of s 319 being among the most serious of the public justice offences62: "[The literal] meaning would result in a very wide range of conduct, including conduct that was not previously unlawful, being criminalised as a perversion of the course of justice. This result is a reason to consider that the literal meaning of the words may not be the ordinary meaning to be given to the expression in this statutory context. The literal meaning of the words in the definition does not fit harmoniously with the scheme of the Crimes Act and Pt 7, in particular. ... The offences in ss 321, 322, 323 and 333(1), which are subject to an increased maximum sentence in the event the conduct was intended to procure the conviction or acquittal of any person for a serious offence, may not be dealt with summarily if that feature of aggravation is alleged. The Parliament reserved the offence of perverting the course of justice in s 319 as among the most serious of the public justice offences. It is not an offence that in any circumstance may be dealt with summarily." Their Honours noted that no argument had been addressed to a further submission by the Crown that the statutory offence under s 319 did not require proof that the alleged conduct possessed the tendency to pervert the course of justice. Nor did they decide the issue. But, in passing, they conjectured that63: "It may be that, as the Crown submitted, it does not. This would point to the correctness of the Crown's submission, that s 319 is not to be understood as simply restating the common law. It would also underline the protean nature of the offence if the definition is given its literal meaning." 61 Einfeld (2008) 71 NSWLR 31 at 56-57 [97]. 62 Einfeld (2008) 71 NSWLR 31 at 57 [97]-[98]. 63 Einfeld (2008) 71 NSWLR 31 at 51 [75]. Nettle So far as appears, however, the issue has not since been reconsidered by either the Court of Criminal Appeal or the Court of Appeal, and recently, in Cunneen v Independent Commission Against Corruption64, the Court of Appeal proceeded, consistently with Charles, on the basis that proof of tendency is required. Section 319: the need for tendency to pervert the course of justice Ultimately, of course, the issue of whether tendency to pervert the course of justice is a necessary element of the offence created by s 319 turns on the words of the section. As appears from the decisions referred to, they are susceptible to more than one possible construction. Nonetheless, as matters stand, s 319 has been interpreted by a powerfully constituted Court of Criminal Appeal in Charles, as part of the ratio of the decision, as requiring the Crown to establish that the alleged conduct have a tendency to pervert the administration of public justice. And, despite desultory obiter dicta in favour of the alternative view, Charles has stood for almost 20 years as determinative of the issue. Moreover, to borrow from the reasoning in Einfeld65, if s 319 were construed literally as excluding the necessity for the Crown to prove that the alleged conduct has a tendency to pervert the course of justice, the provision would potentially result in a very wide range of conduct, including conduct that was not previously unlawful, being criminalised as a perversion of the course of justice. Consistently with the principle of statutory construction that an ambiguous statutory provision which affects the liberty of the subject should not be read as so restricting liberty66, there is not a little in principle in support of the prevailing view. Possibly, as was conjectured in Einfeld, there may be convincing arguments to be made in favour of a more expansive interpretation of the section. But, if there are, they have not been made in this case. The most that the Crown offered was a submission in writing in which it was noticed that the Court of Appeal and the Court of Criminal Appeal, constituted by the same judges, in R v 64 [2014] NSWCA 421 at [23] per Bathurst CJ, [85]-[88] per Basten JA, [195] per Ward JA. 65 (2008) 71 NSWLR 31 at 57 [97]. 66 See, eg, Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1 at 12 per Mason CJ; [1992] HCA 64; Coco v The Queen (1994) 179 CLR 427 at 436-437 per Mason CJ, Brennan, Gaudron and McHugh JJ; [1994] HCA 15; Al-Kateb v Godwin (2004) 219 CLR 562 at 577 [19] per Gleeson CJ; [2004] HCA 37; Momcilovic v The Queen (2011) 245 CLR 1 at 47 [44] per French CJ; [2011] HCA 34. Nettle Murphy67 interpreted tendency for the purposes of the offence created by s 43 of the Crimes Act 1914 (Cth) as a tendency to further or fulfil the purpose or intention of perverting the course of justice, as opposed to a tendency to achieve the end of perverting the course of justice; and a contention, as I understood it, that the offence created by s 319 is consistent with the approach in Murphy because s 319 is couched in terms of "any act". Quite how that conduces to a conclusion that s 319 requires no proof of tendency remains elusive. Conclusion In the result, until and unless this Court has had the benefit of full and convincing argument on the point in a case in which the issue truly arises, I should not be disposed to depart from Charles. I consider that, for the time being, trial judges should continue to charge juries, consistently with Charles, that proof of an offence under s 319 requires proof beyond reasonable doubt that the accused did the act or omission alleged, that the act or omission had a tendency to pervert the course of justice and that the act or omission was intended to pervert the course of justice. 67 (1985) 4 NSWLR 42 at 50-51. |
HIGH COURT OF AUSTRALIA CLAYTON AND BANT APPELLANT RESPONDENT [2020] HCA 44 Date of Hearing: 9 September 2020 Date of Judgment: 2 December 2020 ORDER Appeal allowed with costs. Set aside orders 2, 3 and 4 of the orders made by the Full Court of the Family Court of Australia on 7 November 2019 as amended on 15 May 2020 and, in their place, order that the appeal to that Court be dismissed. On appeal from the Family Court of Australia Representation D F Jackson QC with A-M McDiarmid and S F Gaussen for the appellant (instructed by Ferguson Legal Solicitors) B W Walker SC with M W Todd for the respondent (instructed by Watts McCray Lawyers) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Family law β Foreign divorce β Property settlements β Spousal maintenance β Res judicata β Where appellant wife and respondent husband married in Dubai in 2007 and lived partly in Australia and partly in United Arab Emirates β Where wife and husband separated in 2013 with wife and child remaining in Australia β Where wife commenced proceedings in Family Court of Australia seeking parenting orders under Family Law Act 1975 (Cth) ("Act") β Where proceedings later amended to also seek orders for spousal maintenance and property settlement under ss 74 and 79 of Act β Where husband commenced divorce proceedings in Personal Status Court of Dubai ("Dubai Court") β Where ruling of Dubai Court granted husband "irrevocable fault-based divorce" and ordered wife to repay amount of advanced dowry and costs β Where husband sought permanent stay of property settlement and spousal maintenance proceedings on basis of res judicata, cause of action estoppel and/or principle in Henderson v Henderson (also known as "Anshun estoppel") β Where primary judge dismissed application for stay β Where Full Court of Family Court permanently stayed property settlement and spousal maintenance proceedings β Whether ruling of Dubai Court had effect of precluding wife from pursuing property settlement and spousal maintenance proceedings against husband in Family Court by reason of res judicata, cause of action estoppel and/or Anshun estoppel. Words and phrases β "advanced dowry", "alimony", "Anshun estoppel", "cause of action", "cause of action estoppel", "claim", "claim estoppel", "divorce", "estoppel", "Henderson extension", "irrevocable fault-based divorce", "issue estoppel", "merger", "permanent stay", "Personal Status Court of Dubai", "Personal Status Law", "preclusion", "property settlement", "res judicata", "spousal maintenance". Family Law Act 1975 (Cth), ss 74, 79. KIEFEL CJ, BELL AND GAGELER JJ. The question in this appeal, from a judgment of the Full Court of the Family Court of Australia1 on appeal from a judgment of a single judge of that Court2, is whether a ruling made by the Personal Status Court of Dubai ("the Dubai Court") in divorce proceedings by the respondent husband against the appellant wife ("the Dubai proceedings") has the effect of precluding the wife from pursuing property settlement proceedings and spousal maintenance proceedings against the husband under the Family Law Act 1975 (Cth) ("the Act"). Contrary to the view of the Full Court, the ruling does not have that preclusive effect. Background The wife is a citizen of Australia. The husband is a citizen of the United Arab Emirates ("UAE"). They met and commenced living together in 2006 in Dubai. There they married in 2007 in a Sharia court. Marriage under the Personal Status Law of the UAE is a formal contract in which provision can be made for a husband to pay dowry to a wife. The written contract of marriage between the husband and the wife here provided for the husband to pay "advanced" dowry of AED 100,000 on the formation of the contract and to pay "deferred" dowry of AED 100,000 in the event of death or divorce. Between 2007 and 2013, the husband and wife lived together partly in the UAE and partly in Australia. They travelled extensively. They had a child in 2009. The husband owns real and personal property in the UAE and in many other parts of the world. The wife owns personal property in Dubai. Both own real property in Australia. The husband and wife separated in 2013. Since separation, the wife and child have resided in Australia. In 2013, the wife instituted proceedings against the husband in the Family Court seeking parenting orders in respect of the child. The proceedings were amended to seek orders for property settlement and spousal maintenance. In 2014, the husband instituted the Dubai proceedings against the wife in the Dubai Court seeking divorce from the wife. He also sought in those proceedings the "dropping", in the sense of extinguishment, of "all her marital 1 Bant & Clayton [No 2] (2019) FLC ΒΆ93-925. 2 Clayton & Bant [2018] FamCA 736. Bell rights that are associated with that divorce in terms of all type[s] of alimony, deferred dowry and others as well as compensating him for all material and moral damage at the discretion of the court". The wife was notified of the Dubai proceedings but did not appear. In 2015, the Dubai Court made a ruling in the Dubai proceedings after receiving and adopting a report of two arbitrators. The report of the arbitrators appears to have been based on evidence presented by the husband combined with information voluntarily provided to the arbitrators by the wife outlining events from her perspective. The ruling granted the husband an "irrevocable fault-based divorce", the effect of which was to dissolve the marriage. The ruling went on to order the wife to pay AED 100,000 (corresponding to the amount of the advanced dowry) to the husband and to pay the husband's costs of the proceedings. The Dubai Court's written reasons for the ruling included a statement that has been translated from the original Arabic as follows: "As for his request to drop off her deferred dowry and her alimony, this subject is untimely. On top of that, the other party did not demand them and hence there is no need to make reference to them in the text." The evidence does not address what might have been meant by the word translated as "untimely". The Personal Status Law of the UAE3 makes limited provision in relation to the property of parties to a marriage and in relation to the obligation of a husband to pay alimony and deferred dowry to a wife. In relation to property, the Personal Status Law provides4: "A woman having reached the age of full capacity is free to dispose of her property and the husband may not, without her consent, dispose thereof; each one of them has independent financial assets. If one of the two participates with the other in the development of a property, building a dwelling place or the like, he may claim from the latter his share therein upon divorce or death." Except for the second sentence of that quoted provision, and for the capacity of a wife to be deprived of the deferred dowry if found to be at fault in divorce Federal Law No 28 of 2005 on Personal Status. 4 Article 62.1 of the Personal Status Law. Bell proceedings, the Personal Status Law makes no provision at all for the alteration of property interests of the parties to a marriage in the event of a breakdown of the marriage or divorce. Such provision as is made by the second sentence of the quoted provision is limited to allowing a wife or husband upon divorce to claim a share in real property which she or he has participated with the other in developing. There appears to be no dispute between the parties that a claim to a share in any real property located in Dubai which she had participated with the husband in developing could have been made by the wife in the Dubai proceedings. Whether any such property actually existed in Dubai is not clear from the evidence. What is clear is that property elsewhere lay beyond the scope of the Dubai proceedings. The Dubai Court has no jurisdiction in relation to property located outside the territorial limits of the UAE. In relation to alimony, the Personal Status Law gives a wife an ongoing entitlement to be paid living expenses by her husband during the term of their marriage5. The entitlement is enforceable as a debt for up to three years afterwards6. The ongoing entitlement apparently ceases upon an irrevocable divorce taking effect if the wife is not then pregnant7. There appears again to be no dispute between the parties that the wife could have made a claim to alimony in the Dubai proceedings up to the date of the irrevocable fault-based divorce taking effect. The parties differ as to whether the refusal by the Dubai Court to deal with the husband's request to extinguish the wife's right to alimony left open the possibility of that Court still entertaining an application by the wife for alimony should she choose to make one. Nothing turns on that difference. Permanent stay of the proceedings in the Family Court The husband applied to the Family Court for a permanent stay of the property settlement proceedings and spousal maintenance proceedings on the basis that the ruling of the Dubai Court "operates as a bar" to those proceedings "by virtue of the operation of the principles of res judicata/cause of action estoppel". 5 Articles 55 and 63-65 of the Personal Status Law. 6 Article 67 of the Personal Status Law. 7 Article 69 of the Personal Status Law. Bell At first instance, Hogan J dismissed the application for a permanent stay. In relation to the property settlement proceedings, her Honour dismissed the application on the basis that the Dubai proceedings involved no issue of the wife's right to claim property of the husband given that the law of the UAE does not confer any such right other than "in relation to property within the jurisdiction in which each have invested"8. In relation to the spousal maintenance proceedings, her Honour dismissed the application on the basis that the Dubai proceedings did not in fact deal with any right of the wife to alimony "but, rather, described it as 'untimely'"9. In the Full Court, Strickland, Ainslie-Wallace and Ryan JJ unanimously granted the husband leave to appeal from the decision of Hogan J, allowed his appeal, and went on to order a permanent stay of the property settlement proceedings and of the spousal maintenance proceedings. In relation to the property settlement proceedings, their Honours reasoned that the Dubai proceedings had determined the same "cause of action" as that sought to be pursued in the property settlement proceedings and so gave rise to what their Honours referred to as a "res judicata estoppel"10. Their Honours drew in that respect11 on observations in Henry v Henry12 and In the Marriage of Caddy and Miller13 to identify the common "cause of action" as "the financial consequence to the parties arising from the breakdown of the matrimonial relationship"14. Referring to Henderson v Henderson15, their Honours went on to accept an argument of the husband that the ability of the wife to have claimed in the Dubai proceedings a share in such real property located in Dubai as she may 8 Clayton & Bant [2018] FamCA 736 at [194]. 9 Clayton & Bant [2018] FamCA 736 at [196]. 10 Bant & Clayton [No 2] (2019) FLC ΒΆ93-925 at 79,289 [25]. 11 Bant & Clayton [No 2] (2019) FLC ΒΆ93-925 at 79,288 [20]. (1996) 185 CLR 571 at 591-592. (1986) 84 FLR 169. 14 Bant & Clayton [No 2] (2019) FLC ΒΆ93-925 at 79,289 [25]. (1843) 3 Hare 100 at 115 [67 ER 313 at 319]. Bell have participated with the husband in developing also precluded her pursuit of the property settlement proceedings by operation of the "Henderson extension"16. In relation to the spousal maintenance proceedings, their Honours took the view that the reason the Dubai Court treated the husband's claim for extinguishment of the right of the wife to alimony as "untimely" was that the wife had chosen not to press a claim for alimony that was available to be made by her in the Dubai proceedings17. Implicitly equating spousal maintenance with alimony, and alluding again to Henderson v Henderson, their Honours concluded that the failure of the wife to press the claim for alimony meant that the wife was precluded from pursuing a claim for spousal maintenance by operation of the "Henderson extension"18. Rights in issue in the proceedings in the Family Court Before turning to the identification and operation of potentially applicable principles of preclusion, there is a need to identify with precision the jurisdiction of the Family Court to hear and determine the property settlement proceedings and the spousal maintenance proceedings instituted by the wife against the husband. Precision in that respect is necessary in order to be clear about the source and nature of the rights in issue in those proceedings. The jurisdiction of the Family Court to hear and determine the proceedings is that conferred by ss 31(1)(a) and 39(5)(a) of the Act. The jurisdiction is relevantly with respect to "proceedings between the parties to a marriage with respect to the maintenance of one of the parties to the marriage"19 and with respect to "proceedings between the parties to a marriage with respect to the property of the parties to the marriage or either of them, being proceedings ... arising out of the marital relationship"20. Proceedings of those descriptions can be instituted under the Act if either party to a marriage is an Australian citizen, is ordinarily 16 Bant & Clayton [No 2] (2019) FLC ΒΆ93-925 at 79,289 [24], [29]. 17 Bant & Clayton [No 2] (2019) FLC ΒΆ93-925 at 79,290 [36]-[37]. 18 Bant & Clayton [No 2] (2019) FLC ΒΆ93-925 at 79,290 [37]. 19 Section 4(1) of the Family Law Act (para (c) of the definition of "matrimonial cause"). 20 Section 4(1) of the Family Law Act (para (ca)(i) of the definition of "matrimonial cause"). See Stanford v Stanford (2012) 247 CLR 108 at 118-119 [29]. Bell resident in Australia or is present in Australia at the time of institution21. By force of s 31(2), the jurisdiction of the Family Court extends to persons and things outside Australia. The right in issue in the property settlement proceedings that have been instituted by the wife is the right conferred on the wife, as a party to the marriage, by s 79(1) of the Act. That right is to obtain, in the "wide" though not "unlimited" discretion22 of the Family Court, an order altering the interests of the wife and the husband in all property to which either or both of them are entitled if that Court "is satisfied that, in all the circumstances, it is just and equitable to make the order" under s 79(2) taking into account the matters referred to in s 79(4). Those matters extend beyond any financial or other contribution that either of them may have made to the acquisition, conservation or improvement of property23 to include, amongst other things, the contribution made by the wife to the welfare of the family24 as well as the matters referred to in s 75(2) so far as they are relevant25. The right in issue in the spousal maintenance proceedings that have been instituted by the wife is the right conferred on the wife, as a party to the marriage, by s 74(1) of the Act. That right is to obtain, in the discretion of the Family Court, such order for the provision of maintenance by the husband as that Court considers proper having regard to the matters referred to in s 75(2). Those matters include in the context of the marriage having ended in divorce a standard of living that in all the circumstances is reasonable26, the duration of the marriage and the extent to which the marriage has affected the earning capacity of the wife27, the need to 21 Section 39(4)(a) and (4A) of the Family Law Act. 22 Norbis v Norbis (1986) 161 CLR 513 at 521. 23 Section 79(4)(a) and (b) of the Family Law Act. 24 Section 79(4)(c) of the Family Law Act. 25 Section 79(4)(e) of the Family Law Act. 26 Section 75(2)(g) of the Family Law Act. 27 Section 75(2)(k) of the Family Law Act. Bell protect the wife as a party who wishes to continue her role as a parent28 and the terms of any order made or proposed to be made under s 7929. Thus, the right in issue in each of the property settlement proceedings and the spousal maintenance proceedings is a right that is created by a statutory provision which confers a discretionary power on the Family Court to make an order of the kind that is sought. The justiciable controversy as to whether such an order should be made constitutes the matter defining the jurisdiction of the Family Court30. The principles of preclusion and their application Once it is appreciated that the rights in issue in the property settlement proceedings and in the spousal maintenance proceedings are the statutory rights of the wife to seek orders under ss 79(1) and 74(1) of the Act, it is apparent that the ruling made by the Dubai Court cannot give rise to a res judicata in the strict sense in which that term continues to be used in Australia31. The rights created by ss 79(1) and 74(1) cannot "merge" in any judicial orders other than final orders of a court having jurisdiction under the Act to make orders under those sections. The rights of the wife to seek orders under ss 79(1) and 74(1) continue to have separate existence unless and until the powers to make those orders are exercised on a final basis and thereby exhausted32. For the ruling made by the Dubai Court to preclude the wife from pursuing the property settlement proceedings and the spousal maintenance proceedings, that 28 Section 75(2)(l) of the Family Law Act. 29 Section 75(2)(n) of the Family Law Act. 30 R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett (1945) 70 CLR 141 at 155, 165; Hooper v Hooper (1955) 91 CLR 529 at 538; Vitzdamm- Jones v Vitzdamm-Jones (1981) 148 CLR 383 at 411. 31 Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507 at 516 [20]; Zetta Jet Pte Ltd v The Ship Dragon Pearl [No 2] (2018) 265 FCR 290 at 294 [15]- 32 Mullane v Mullane (1983) 158 CLR 436 at 440; In the Marriage of Florie (1988) 90 FLR 158 at 165-167; Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC ΒΆ93-143 at 78,387-78,388 [44]-[48]; Strahan v Strahan (2009) 241 FLR 1 at 25-28 [106]-[113]. Bell preclusion can occur, if at all, through the operation of the common law doctrine of estoppel. No argument is made that the operation of that common law doctrine is excluded by the scheme of the Act. Two forms of estoppel are potentially applicable. One is that sometimes referred to as "cause of action" estoppel33. The terminology has been recognised as problematic given the range of senses in which the expression "cause of action" tends to be used34. The relevant sense is that of title to the legal right established or claimed35. Especially in a statutory context such as the present, the form of estoppel would be better referred to by the more generic description of "claim" estoppel36. The other form of estoppel is most commonly referred to in Australia as "Anshun estoppel", after Port of Melbourne Authority v Anshun Pty Ltd37, although the Full Court chose to refer to it as the "Henderson extension". Both of those potentially applicable forms of estoppel operate to preclude assertion of rights by parties to proceedings. But they do so in ways not adequately differentiated in the reasoning of the Full Court. In the context of the property settlement proceedings and the spousal maintenance proceedings, claim estoppel would operate to preclude assertion by the wife of any right non-existence of which was asserted by the husband in the Dubai proceedings and finally determined by the ruling of the Dubai Court38. Anshun estoppel would preclude assertion by the wife of any right which she could have asserted in the Dubai proceedings but which 33 Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507 at 517 [22]. 34 See Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 at 610-612; Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502 at 508. 35 Blair v Curran (1939) 62 CLR 464 at 532; Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 at 611. See also Baltimore Steamship Co v Phillips (1927) 274 US 316 at 321, quoted in Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457 at 514. 36 cf Casad and Clermont, Res Judicata: A Handbook on its Theory, Doctrine, and Practice (2001) at 9-10. (1981) 147 CLR 589. 38 Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507 at 517 [22]. Bell she chose to refrain from asserting in circumstances which made that choice unreasonable in the context of the Dubai proceedings39. As the party seeking the permanent stay in the Family Court, the husband bore the onus of establishing a factual foundation for the operation of one or other of those forms of estoppel. That required him to prove that the ruling of the Dubai Court had the meaning and determinative operation for which he contended. For that purpose, it required him to prove the content of applicable UAE law. In the case of Anshun estoppel, establishing a basis for the relief he sought also required him to prove the unreasonableness in all the circumstances of the choice made by the wife to refrain from asserting such rights as were legally available to be asserted by her in the Dubai proceedings40. In the manner in which the application for the permanent stay appears to have been conducted, the husband did not deign to prove the unreasonableness of the choice made by the wife. His case for the existence of Anshun estoppel seems to have been put on the basis that the fact that the wife could have asserted a right in the Dubai proceedings meant that she should have asserted that right in the Dubai proceedings in the sense that it was unreasonable for her not to have done so. That approach to Anshun estoppel has rightly been said to involve "fundamental error"41. As was pointed out in Port of Melbourne Authority v Anshun Pty Ltd, "there are a variety of circumstances ... why a party may justifiably refrain from litigating an issue in one proceeding yet wish to litigate the issue in other proceedings eg expense, importance of the particular issue, motives extraneous to the actual litigation, to mention but a few"42. But the problems with the husband's reliance on estoppel are not confined to his failure to engage with the unreasonableness element of Anshun estoppel. His more fundamental problem lies in his failure to establish the requisite correspondence between the rights asserted by the wife in the property settlement proceedings and the spousal maintenance proceedings and any right the existence or non-existence of which was or might have been both asserted in the Dubai 39 Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507 at 517-518 [22]. 40 Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 at 602-603. 41 Champerslife Pty Ltd v Manojlovski (2010) 75 NSWLR 245 at 247 [4]. (1981) 147 CLR 589 at 603. Bell proceedings and finally determined by the Dubai Court. Absent such a correspondence of rights, neither form of estoppel can have any operation. The Full Court referred in traditional terms to cause of action estoppel as requiring an "identity" of causes of action43. The Full Court nonetheless proceeded on the basis that cause of action estoppel can preclude assertion of a right that is not identical to a right asserted and determined in earlier proceedings. The Full Court also implicitly proceeded on the basis that Anshun estoppel can similarly preclude assertion of a right that is not identical to a right which could have been asserted and determined in earlier proceedings. To that extent, the Full Court was correct. Founded on the twin policies of ensuring finality in litigation (thereby promoting respect for and efficient use of courts as well as avoiding inconsistent judgments) and of ensuring fairness to litigants (by sparing them the stress and expense of duplicative proceedings)44, the focus of the common law doctrine of estoppel is on "substance rather than form"45. The doctrine looks not for absolute identity between the sources and incidents of rights asserted or capable of being asserted in consecutive proceedings. The doctrine looks rather for substantial correspondence between those rights. Enough for its operation is that the rights are of a substantially equivalent nature and cover substantially the same subject matter. A common law right to damages for negligent misstatement has been held to correspond to a statutory right to damages for misleading and deceptive conduct46, 43 Bant & Clayton [No 2] (2019) FLC ΒΆ93-925 at 79,288 [19]. See Handley, Spencer Bower and Handley: Res Judicata, 5th ed (2019) at [7.05]-[7.13], [21.03]-[21.05]. 44 Jackson v Goldsmith (1950) 81 CLR 446 at 466; Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507 at 516-517 [21]. See Vestal, "Rationale of Preclusion" (1964) 9 Saint Louis University Law Journal 29 at 31-35; Campbell, "Res Judicata and Decisions of Foreign Tribunals" (1994) 16 Sydney Law Review 45 Trawl Industries of Australia Pty Ltd (In liq) v Effem Foods Pty Ltd (1992) 36 FCR 406 at 418. See also Champerslife Pty Ltd v Manojlovski (2010) 75 NSWLR 245 at 267 [136], quoting MCC Proceeds Inc v Lehman Bros International (Europe) [1998] 4 All ER 675 at 695; Administration of Papua and New Guinea v Daera Guba (1973) 130 CLR 353 at 454; Republic of India v India Steamship Co Ltd [1993] AC 46 Trawl Industries of Australia Pty Ltd (In liq) v Effem Foods Pty Ltd (1992) 36 FCR 406 at 422, not challenged on appeal (1993) 43 FCR 510 at 520. Bell for example, whereas a common law right to damages for personal injury has been held not to correspond to a common law right to damages for property damage arising from the same negligent conduct given that damage is a necessary element of a cause of action in negligence47. The common law of Australia has not gone down the path that has of late been taken in the United States48, of treating rights precluded from assertion in subsequent proceedings as coterminous with the "transaction" which earlier proceedings concerned. The transactional approach does not so much answer an estoppel problem as reframe the question from "what are the rights?" to "what is the transaction?". "General adoption of a transactional approach", it has been observed, "will neither change resolution of the easy problems nor ease resolution of the difficult problems."49 The transactional approach should not be adopted in Australia. It would blur the carefully hewn distinction between claim estoppel and Anshun estoppel. It would diminish the significance of the unreasonableness element of Anshun estoppel. Our approach demands a more granular analysis. The Full Court was therefore wrong to conclude that the wife was estopped from asserting her right to an order under s 79(1) of the Act in the property settlement proceedings on the basis that the ruling made by the Dubai Court determined "the financial consequence to the parties arising from the breakdown of the matrimonial relationship". The error lay in failing to look to the actual rights existence or non-existence of which were or might have been asserted in the Dubai proceedings and finally determined by the Dubai Court and then to look for correspondence between those rights and the statutory right asserted by the wife in the property settlement proceedings. Henry v Henry does not support the Full Court's broad-brush transactional approach. There separate proceedings had been commenced by a husband in the Family Court and by a wife in the Court of First Instance of Monaco. 47 Jackson v Goldsmith (1950) 81 CLR 446 at 467, explaining Brunsden v Humphrey (1884) 14 QBD 141. 48 eg Lucky Brand Dungarees Inc v Marcel Fashions Group Inc (2020) 140 S Ct 1589 at 1594-1595. See American Law Institute, Restatement of the Law Second: Judgments (1982), Β§24. See Casad and Clermont, Res Judicata: A Handbook on its Theory, Doctrine, and Practice (2001) at 62-82. 49 Wright and Miller, Federal Practice and Procedure, 3rd ed (2016), vol 18, Β§4407. Bell The observation of the plurality in this Court that "disputes with respect to property, maintenance and the custody of children will ordinarily be but aspects of an underlying controversy with respect to the marital relationship" was not made in the context of considering whether the proceedings in the Family Court were estopped by a final judgment of any other court but in the context of considering whether the Family Court was a clearly inappropriate forum given that the proceedings in the Court of First Instance of Monaco were ongoing50. Even in that context, the plurality made clear that "it will be relevant to consider which forum can provide more effectively for complete resolution of the matters involved in the parties' controversy"51. In the Marriage of Caddy and Miller provides even less support for the Full Court's characterisation of the preclusive effect of the ruling made by the Dubai Court. There the Full Court correctly held that a former wife was estopped from asserting a right to an order under s 79(1) of the Act that her former husband transfer to her certain real property in Australia. The foundation for the estoppel was a prior order of the Superior Court of California which had been made in matrimonial proceedings which she herself had instituted and which had finally determined the interests of both parties in real and personal property consequent upon the dissolution of their marriage. The order specifically confirmed their respective interests in real property in Australia, including the real property in respect of which she was seeking the order under s 79(1). Critical to the outcome in that case was that the jurisdiction exercised by the Superior Court in making the order extended to real property in Australia and that the jurisdiction brought with it power on the part of the Superior Court not merely to declare the existing property rights of the parties to a marriage but also to alter interests in property consequent upon dissolution of the marriage in a manner not dissimilar to s 79(1) albeit that Californian law mandated an equal division of property52. The position here is quite different. The property rights legally capable of being put in issue in the Dubai proceedings were limited to the entitlement of the wife to obtain deferred dowry from the husband and the entitlement of either of them to a share in such real property in Dubai as she or he might have participated with the other in developing. Those rights were not in any degree equivalent in nature to the right to seek the discretionary alteration of property interests conferred by s 79(1) of the Act. And those rights were in any event capable of applying to only a fraction of the subject matter of the right conferred by s 79(1), (1996) 185 CLR 571 at 591-592. (1996) 185 CLR 571 at 592. (1986) 84 FLR 169 at 175. Bell which encompasses all real and personal property of either or both parties to the marriage wherever located. For those reasons, the ruling of the Dubai Court would have been incapable of founding a cause of action or claim estoppel operating to preclude the wife from asserting a right to seek an order under s 79(1) of the Act even if the ruling had determined the non-existence of an entitlement to a share in some real property in Dubai, which it plainly did not. For the same reasons, the choice of the wife not to claim a share in such real property as she might have participated with the husband in developing in Dubai would have been incapable of founding an Anshun estoppel even assuming that some such real property existed and even assuming that her choice not to claim it was unreasonable in the context of the Dubai proceedings. Turning to the spousal maintenance proceedings, there is little difficulty in characterising the right of the wife to seek alimony under the Personal Status Law as substantially equivalent in nature to the right which she has under s 74(1) of the Act to seek an order for the provision of maintenance by the husband. The circumstances that the quantum might be different or that it might be informed by different discretionary considerations is neither here nor there. There appears nonetheless to be a substantial difference in the coverage of the two rights: the former not being shown to be available to be claimed beyond the period up to the date when the irrevocable fault-based divorce took effect; the latter being available to be claimed beyond that date. The wife's choice not to claim alimony in the proceedings instituted by the husband in the Dubai Court could in those circumstances provide no foundation for the operation of Anshun estoppel even assuming her choice not to claim alimony to have been unreasonable in the context of the Dubai proceedings. Disposition The appeal must be allowed with costs. The orders of the Full Court other than the order granting leave to appeal from the judgment of Hogan J and those dealing with costs must be set aside. In their place, the appeal from the judgment of Hogan J must be dismissed. The circumstance that the property settlement proceedings and the spousal maintenance proceedings have now been pending for nearly eight years cannot go unremarked. As this Court has had occasion to note in the past53, the Family Court is obliged to ensure that proceedings under the Act are "not protracted"54. 53 See Hall v Hall (2016) 257 CLR 490 at 496 [2]. 54 Section 97(3) of the Family Law Act. Bell The delays that have occurred in the conduct of the proceedings to date, including a delay of over three and a half years between the filing of the stay application and the delivery of judgment at first instance, and a delay of over 12 months between the commencement of the appeal and the delivery of judgment by the Full Court (amounting to over four and a half years for the determination of an application for interim orders), are unacceptable. To be expected is that the proceedings will now be pursued by the parties under the supervision of the Family Court with appropriate expedition. GORDON J. The husband, an Emirati, and the wife, an Australian, married in Dubai and had a child. The husband owns significant real property throughout the world including in the United Arab Emirates ("the UAE"), France, Jordan, Thailand and Australia. The wife owns real property in Australia. After some years, they separated and the wife returned to Australia with the child. After the wife instituted proceedings against the husband in the Family Court of Australia seeking, among others, orders for property settlement and spousal maintenance, the husband instituted proceedings in the Second Personal Status Family Circuit of the Dubai Court ("the Dubai Court") seeking a divorce from the wife as well as extinguishment of "all [of the wife's] marital rights that are associated with that divorce in terms of all type[s] of alimony, deferred dowry and others as well as compensating him for all material and moral damage at the discretion of the Court". The trial judge found that the Federal Law No 28 of 2005 on Personal Status (UAE) ("the PSL") (unlike the Family Law Act 1975 (Cth)55) makes no provision for the alteration of the interests of the parties in real property located outside the UAE56. In relation to alimony, the trial judge found that "the law of Dubai is that a wife is entitled to alimony ... if she is doing her job in the family. ... [T]he circumstances in which the alimony to a wife is forfeited include if she does not travel with her husband, or if she abandons her home"57. The trial judge found that, under Art 69 of the PSL, "the law of Dubai is that, in the case of a non-retractable divorce, only the costs of 'sheltering' (which I interpret to mean accommodation) would be payable by the [husband] to the [wife] during the waiting period ('idda') following the making of the divorce order"58, but her Honour did not make a finding about any entitlement to alimony in a "non-retractable divorce". The trial judge further observed that "the law of Dubai provides for the payment of alimony in certain prescribed circumstances and for certain prescribed periods of time"59. The Dubai Court granted the husband an "irrevocable fault-based divorce" and ordered the wife to pay AED 100,000 (being the amount of an advanced dowry) to the husband and to pay the husband's costs. In relation to the husband's 55 Family Law Act, s 79(1), read with s 31(2). 56 Clayton & Bant [2018] FamCA 736 at [192]. 57 Clayton & Bant [2018] FamCA 736 at [187]. The trial judge found that "[o]n the uncontested evidence, either both or one of these arguably occurred, according to the law of Dubai, at the parties' separation in July 2013 in Australia": at [131]. 58 Clayton & Bant [2018] FamCA 736 at [190]. 59 Clayton & Bant [2018] FamCA 736 at [196]. cf Family Law Act, s 74(1). request to "drop off" the wife's deferred dowry and her alimony, the Dubai Court said that these subjects were "untimely" and that the wife "did not demand them and hence there [was] no need to make reference to them in the text". The Full Court of the Family Court of Australia allowed the husband's appeal from the trial judge, who had refused the husband a permanent stay of the property settlement and spousal maintenance proceedings, on the basis that the ruling of the Dubai Court operates as a bar to the property settlement proceedings because of res judicata and Anshun estoppel and, in relation to the spousal maintenance proceedings, on the basis that, the Dubai Court having finally determined "alimony", the wife could not bring a claim for spousal maintenance because of Anshun estoppel. I agree with Kiefel CJ, Bell and Gageler JJ that the wife's appeal to this Court must be allowed with costs but for different reasons. Other background facts and procedural history, which I gratefully adopt, are set out in the reasons of Kiefel CJ, Bell and Gageler JJ60. The rendering of a final judgment in an adversarial proceeding has consequences61. Those consequences may be recognised as one or more of res judicata, cause of action estoppel, issue estoppel, and Anshun62 estoppel. The principles to be applied are recorded in the reasons of four members of this Court in Tomlinson v Ramsey Food Processing Pty Ltd63. This case calls for no reconsideration of those principles. Although the passage is long, it is as well to set it out fully. Their Honours first explained res judicata as follows64: "An exercise of judicial power ... involves 'as a general rule, a decision settling for the future, as between defined persons or classes of persons, a question as to the existence of a right or obligation, so that an exercise of the power creates a new charter by reference to which that question is in future to be decided as between those persons or classes of persons'65. The rendering of a final judgment in that way 'quells' the 60 Reasons of Kiefel CJ, Bell and Gageler JJ at [2]-[9], [13], [15]-[20]. 61 Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507 at 516 [20]. 62 After Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589. (2015) 256 CLR 507 at 516-518 [20]-[22]. 64 Tomlinson (2015) 256 CLR 507 at 516 [20]. 65 R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361 at 374. controversy between those persons66. The rights and obligations in controversy, as between those persons, cease to have an independent existence: they 'merge' in that final judgment67. That merger has long been treated in Australia as equating to 'res judicata' in the strict sense68." Their Honours then addressed estoppel as a form of preclusion. They explained the common law doctrine and the three forms of estoppel recognised in Australia in these terms69: "Estoppel in relation to judicial determinations is of a different nature. It is a common law doctrine informed, in its relevant application, by similar considerations of finality and fairness70. ... It operates ... as a rule of law, to preclude the assertion of a right or obligation or the raising of an issue of fact or law71. Three forms of estoppel have now been recognised by the common law of Australia as having the potential to result from the rendering of a final judgment in an adversarial proceeding. The first is sometimes referred to as 'cause of action estoppel'72. Estoppel in that form operates to preclude assertion in a subsequent proceeding of a claim to a right or obligation which was asserted in the proceeding and which was determined by the judgment. It is largely redundant where the final judgment was rendered in the exercise of judicial 66 Fencott v Muller (1983) 152 CLR 570 at 608. 67 Victorian Stevedoring and General Contracting Co Pty Ltd v Dignan (1931) 46 CLR 73 at 106; Blair v Curran (1939) 62 CLR 464 at 532; Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502 at 510. 68 Blair (1939) 62 CLR 464 at 532; Jackson v Goldsmith (1950) 81 CLR 446 at 466; cf Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2014] AC 160 at 180 [17]. 69 Tomlinson (2015) 256 CLR 507 at 516-518 [21]-[22]. Paragraph breaks have been added. 70 Dow Jones & Co Inc v Gutnick (2002) 210 CLR 575 at 604 [36]; D'Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at 17 [34]. 71 Jackson (1950) 81 CLR 446 at 466. 72 The expression was coined by Diplock LJ in Thoday v Thoday [1964] P 181 at power, and where res judicata in the strict sense therefore applies to result in the merger of the right or obligation in the judgment. The second form of estoppel is almost always now referred to as 'issue estoppel'73. Estoppel in that form operates to preclude the raising in a subsequent proceeding of an ultimate issue of fact or law which was necessarily resolved as a step in reaching the determination made in the judgment74. The classic expression of the primary consequence of its operation is that a 'judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies'75. The third form of estoppel is now most often referred to as 'Anshun estoppel'76, although it is still sometimes referred to as the 'extended principle' in Henderson v Henderson77. That third form of estoppel is an extension of the first and of the second. Estoppel in that extended form operates to preclude the assertion of a claim78, or the raising of an issue of fact or law79, if that claim or issue was so connected with the subject matter of the first proceeding as to have made it unreasonable in the context of that first proceeding for the claim not to have been made or the issue not to have been raised in that proceeding80. The extended form has been treated in 73 The expression was coined by Higgins J in Hoysted v Federal Commissioner of Taxation (1921) 29 CLR 537 at 560-561. 74 Blair (1939) 62 CLR 464 at 510, 531-533; Jackson (1950) 81 CLR 446 at 466-467. 75 Blair (1939) 62 CLR 464 at 531. See also Kuligowski v Metrobus (2004) 220 CLR 76 After Port of Melbourne Authority (1981) 147 CLR 589. (1843) 3 Hare 100 [67 ER 313]. 78 See, eg, Port of Melbourne Authority (1981) 147 CLR 589; Bryant v Commonwealth Bank of Australia (1995) 57 FCR 287 at 297-298; Ling v The Commonwealth (1996) 68 FCR 180 at 184, 188, 193. 79 Hoysted v Federal Commissioner of Taxation (1925) 37 CLR 290; [1926] AC 155. 80 Port of Melbourne Authority (1981) 147 CLR 589 at 598, 602-603. Australia as a 'true estoppel'81 and not as a form of res judicata in the strict sense82. Considerations similar to those which underpin this form of estoppel may support a preclusive abuse of process argument." (emphasis added) As has been said, these principles are not in dispute and are to be applied. This appeal concerns a foreign judgment. Common to all forms of preclusion concerning a foreign judgment, it is necessary to show that the foreign judgment relied on: (a) was by a court of competent jurisdiction; (b) was final and conclusive; (c) was on the merits83; (d) was between the same parties (or their privies); and (e) either quelled the same controversy (res judicata), determined the same cause of action (cause of action estoppel) or determined an issue that was raised, or that it would have been unreasonable not to have raised, in the proceeding (issue estoppel and Anshun estoppel)84. In this case, attention can be confined to the last requirement85. It is necessary to say something further about res judicata. In a case where there is no foreign element, the application of the doctrine of res judicata hinges on the controversy that has been quelled in the earlier proceeding. That controversy 81 Rogers v The Queen (1994) 181 CLR 251 at 275. See also Port of Melbourne Authority (1981) 147 CLR 589 at 601-602, rejecting the approach in Yat Tung Investment Co Ltd v Dao Heng Bank Ltd [1975] AC 581 at 590. 82 Chamberlain (1988) 164 CLR 502 at 509, 512. 83 "On the merits" in the sense of "presentation of evidence and argument and the application of the law to the facts in a reasoned way" is not necessary for res judicata. Res judicata can arise due to a default judgment or a judgment by consent: see Zetta Jet Pte Ltd v The Ship Dragon Pearl [No 2] (2018) 265 FCR 290 at 300 [51]; see also 296 [27], citing Chamberlain (1988) 164 CLR 502, and 297 [32], citing Blair (1939) 62 CLR 464. 84 Dicey and Morris on the Conflict of Laws, 11th ed (1987), vol 1 at 431-433, citing DSV Silo- und Verwaltungsgesellschaft mbH v Owners of the Sennar (The Sennar (No 2)) [1985] 1 WLR 490 at 499; [1985] 2 All ER 104 at 110; Carl Zeiss Stiftung v Rayner & Keeler Ltd [No 2] [1967] 1 AC 853 at 917, 925, 967; see also 909-910, 935, 942-943. See also Kuligowski (2004) 220 CLR 363 at 373-374 [21]-[22]; Benefit Strategies Group Inc v Prider (2005) 91 SASR 544 at 552 [18]; Zetta Jet Pte Ltd (2018) 265 FCR 290 at 294 [15], 295 [20]. 85 See, eg, Blair (1939) 62 CLR 464 at 531-532; Jackson (1950) 81 CLR 446 at 466-467; Chamberlain (1988) 164 CLR 502 at 510. may or may not be sufficiently identified by looking only to whether the claim was framed by reference to a particular statutory provision86. There will be cases where the quelling of the controversy necessarily determines rights and, in relation to that controversy, "creates a new charter by reference to which that question is in future to be decided"87. Where, as here, the decision of a foreign court is relied on as precluding the prosecution of claims made in an Australian court, it is always necessary for the party asserting preclusion to identify what claim was made in, or issue determined by, the foreign court88. The preclusive effect of a foreign judgment is fixed by what was decided in the foreign court. Only once that is identified does it become necessary or appropriate to consider what claims are made in the Australian court. Thus, as Gibbs CJ, Mason and Aickin JJ said in Port of Melbourne Authority v Anshun Pty Ltd, "res judicata comes into operation whenever a party attempts in a second proceeding to litigate a cause of action which has merged into judgment in a prior proceeding"89. That too is an inquiry about the character of the claim made and decided in the foreign court. Here, the only claim made in, and determined by, the Dubai Court was the divorce of the parties and the return by the wife of the advanced dowry. Neither party to those proceedings could have asked, or did ask, the Dubai Court to alter the property interests which the parties had in property outside the UAE or, subject to a presently irrelevant exception, any property inside the UAE. The fact that issues about altering the interests which the parties had in property outside the UAE could not be, and therefore were not, raised in the Dubai Court means that the ruling of the Dubai Court raised no res judicata or cause of action estoppel. Further, the fact that these issues could not be raised in the Dubai Court, either specifically or as part of a more general question about property settlement, means that no issue estoppel arises. And finally, the fact that neither party could have asked the Dubai Court to alter the interests which the parties had 86 See, eg, Victorian Stevedoring (1931) 46 CLR 73 at 107-108; Chamberlain (1988) 164 CLR 502. 87 Trade Practices Tribunal (1970) 123 CLR 361 at 374. 88 See Black v Yates [1992] QB 526 at 530. cf Jackson (1950) 81 CLR 446 at 465; Chamberlain (1988) 164 CLR 502 at 506; Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491 at 518-519 [71]-[72]. (1981) 147 CLR 589 at 597. in property outside the UAE means it was not unreasonable for the wife not to have made such a claim in the Dubai Court and no Anshun estoppel arises. The wife's claim for spousal maintenance is a claim of a kind that was not made in the Dubai Court. Whether the husband had failed to pay alimony that he should have paid before divorce was not decided by the Dubai Court, but was instead described as "untimely". It follows that the Dubai Court has not decided any controversy between the parties that bears upon spousal maintenance. Again, as with the property settlement proceedings, no res judicata, cause of action estoppel, issue estoppel or Anshun estoppel can arise. Finally, it is necessary to say something about Henry v Henry90. That case was not concerned with preclusion of a kind in issue in these proceedings. It was concerned with whether an Australian court was a clearly inappropriate forum when determining whether a stay of the Australian proceedings should be granted because there were proceedings on foot in Monaco91. It was in that context, where there was no foreign judgment and thus no determination of any controversy or issue92, that the plurality explained that "disputes with respect to property, maintenance and the custody of children will ordinarily be but aspects of an underlying controversy with respect to the marital relationship"93 (emphasis added). That has nothing to say about the way in which an Australian court approaches an application for a stay by reason of the existence of a foreign judgment. Moreover, the observation of their Honours in Henry that "[i]f separate proceedings are commenced between husband and wife in different countries, differences in procedure, in available remedies and in the substantive law with respect to marriage and divorce will ordinarily ensure that the proceedings are different in significant respects"94 was to explain why "it [is] relevant to consider which forum can provide more effectively for complete resolution of the matters involved in the parties' controversy"95. But that is not the relevant inquiry where there has been a foreign judgment and the contention is that the foreign judgment precludes an Australian court hearing and determining the controversy. (1996) 185 CLR 571. 91 See Henry (1996) 185 CLR 571 at 586-588. 92 See Henry (1996) 185 CLR 571 at 593. 93 Henry (1996) 185 CLR 571 at 591-592. (1996) 185 CLR 571 at 591. (1996) 185 CLR 571 at 592. Justice delayed is justice denied; it is an injustice. Why and how these property settlement proceedings and spousal maintenance proceedings remained not finally determined for over seven years was not explored or explained. I agree with Kiefel CJ, Bell and Gageler JJ that it is to be expected that the proceedings will be pursued by the parties under the supervision of the Family Court with appropriate expedition. Edelman Introduction This appeal involves several different legal rules concerned with finality of litigation, variously described as res judicata, cause of action estoppel, issue estoppel, and Anshun estoppel96. The English translations of the Latin "res judicata" ("a thing decided") and the Norman French "estoppel" ("stopper, bung"), and a doctrine named after a case, do not provide much assistance in understanding the different legal rules. But when the dust is cleared from the different legal rules, a single and simple question arises on this appeal. Ms Clayton and Mr Bant (both pseudonyms) were married in Dubai in 2007. Mr Bant owns considerable property in the United Arab Emirates, Paris, Jordan, Thailand and Australia. Ms Clayton owns personal property in Dubai and real property in Australia. They separated in 2013, following which Ms Clayton resided in Australia with their child. In July 2013, Ms Clayton sought property settlement and spousal maintenance orders in Australia as part of an extant application for parenting orders; and in September 2014 she commenced divorce proceedings in Australia. In June 2014, Mr Bant lodged caveats over two properties owned by Ms Clayton in Australia; and in July 2014, Mr Bant commenced divorce proceedings in Dubai. Ms Clayton did not take part in the Dubai proceedings. In February 2015, the Second Personal Status Family Circuit of the Dubai Court delivered judgment and made orders in the Dubai proceedings. Mr Bant was granted an "irrevocable fault-based divorce", with Ms Clayton ordered to pay his costs and to repay an "advanced dowry" which Mr Bant had paid to her on formation of the contract of marriage. Under the Personal Status Law of the United Arab Emirates (Federal Law No 28 of 2005 on Personal Status), the Dubai Court had no jurisdiction with respect to property outside the territory of the Emirate and the Personal Status Law made no provision for the redistribution of any property anywhere in the world. When the different finality doctrines are separated, and their principles understood, the main point in this appeal can be seen to concern whether Ms Clayton's property settlement and spousal maintenance proceedings are barred because they fall within the character of a claim that was pursued and decided by the Dubai Court. That point reduces to a simple question: should Mr Bant's claim, as resolved by the Dubai Court, be characterised as a claim merely for dissolution of the marriage or should it be characterised as a claim for dissolution of the marriage and resolution of all the financial consequences of the marriage including distribution of the property of the parties? The proper characterisation is that the 96 Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589. Edelman claim resolved by the Dubai Court was only for the dissolution of the marriage. Ms Clayton can maintain proceedings in Australia under the Family Law Act 1975 (Cth) for property settlement and spousal maintenance. Four relevant rules of finality Four rules concerning finality are relevant to this appeal97. Although the principle of finality underlies all of them, and although each rule can apply where there is a final judgment on the merits98 by a court of competent jurisdiction, the four rules should be kept separate. Merger or res judicata in the strict sense First, where a cause of action, or "the very right ... claimed"99, has previously been established by a local court then at common law the "merger of the right or obligation in the judgment"100 can be relied upon to preclude re- assertion of the extinguished right. The doctrine of merger is not merely based upon principles of finality. It exists because when a court order "replicates" the prior right101, with added consequences such as enforcement mechanisms, the prior right "has no longer an independent existence"102. No action can be brought upon that extinguished right. The successful plaintiff's only right is a right on the local judgment, which is "of a higher nature"103. Since the expression "res judicata" has also been loosely used to describe all four rules discussed below, each of which is 97 Others, such as abuse of process, are not relevant. 98 Kuligowski v Metrobus (2004) 220 CLR 363 at 375 [25]. 99 Blair v Curran (1939) 62 CLR 464 at 532. 100 Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507 at 517 [22]. See also Thoday v Thoday [1964] P 181 at 197. 101 Zakrzewski, Remedies Reclassified (2005) at 54-55, 108-109. 102 Blair v Curran (1939) 62 CLR 464 at 532. 103 Drake v Mitchell (1803) 3 East 251 at 258 [102 ER 594 at 596]; King v Hoare (1844) 13 M & W 494 at 504 [153 ER 206 at 210]. Edelman underpinned by a policy of finality104, the effect of the doctrine of merger is sometimes described as "res judicata in the strict sense"105. Cause of action or claim estoppel Secondly, if the judgment finally resolved a conflict about the existence or extent of a "cause of action" then the parties to that proceeding, or their privies, will be precluded from relitigating that cause of action. This rule is independent of the doctrine of merger because even if the rights adjudicated upon were determined not to exist in the earlier proceeding, so that there was nothing to merge into the judgment106, "the unsuccessful plaintiff can no longer assert" that a right exists107. The Full Court of the Family Court of Australia in this proceeding described the rule as "res judicata estoppel"108. In Australia, it is usually described as "cause of action estoppel". But, as has been pointed out on a number of occasions, the expression "cause of action" is imprecise and might extend either to the legal right claimed or to the facts that the plaintiff must establish for their claim109. 104 See, eg, Greenhalgh v Mallard [1947] 2 All ER 255 at 257, quoted in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 at 602; Trawl Industries of Australia Pty Ltd (In liq) v Effem Foods Pty Ltd (1992) 36 FCR 406 at 412. See also Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2014] AC 160 at 180 [17]; Test Claimants the Franked Investment Income Group Litigation v Commissioners for Her Majesty's Revenue and Customs [2020] UKSC 47 at [59]- 105 Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507 at 516 [20], 517 106 Thoday v Thoday [1964] P 181 at 197-198; Trawl Industries of Australia Pty Ltd (In liq) v Effem Foods Pty Ltd (1992) 36 FCR 406 at 409. 107 Thoday v Thoday [1964] P 181 at 197-198; Western Australia v Fazeldean [No 2] (2013) 211 FCR 150 at 155 [25], quoted in Zetta Jet Pte Ltd v The Ship Dragon Pearl [No 2] (2018) 265 FCR 290 at 296 [24]. 108 Bant & Clayton [No 2] (2019) FLC ΒΆ93-925 at 79,289 [25]. See also the reference to "estoppel per rem judicatam" in Trawl Industries of Australia Pty Ltd (In liq) v Effem Foods Pty Ltd (1992) 36 FCR 406 at 412. 109 Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 at 610-611; Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502 at 508; Trawl Industries of Australia Pty Ltd (In liq) v Effem Foods Pty Ltd (1992) 36 FCR Edelman The best approach is to recognise that both the legal right claimed and decided and the pleaded or asserted facts are relevant: "cause of action normally means a right alleged to flow from the facts pleaded"110. The focus is upon the whole claim, including the right and the essential facts upon which the right depends111. But much can depend upon the level of generality at which the claim is characterised. As Gummow J said in Trawl Industries of Australia Pty Ltd (In liq) v Effem Foods Pty Ltd112, characterisation must proceed by reference to substance rather than form. Regard can be had to the pleadings, the evidence, and Issue estoppel Thirdly, if a necessary legal foundation for the judgment is the resolution of an ultimate issue of fact or law then the parties or their privies are precluded from alleging or denying a state of fact or law that is inconsistent with that resolution114. This rule is well known by the description "issue estoppel", which was first coined by Higgins J115. The same issues of characterisation arise in respect of an issue for issue estoppel as arise in respect of a claim for cause of action or claim estoppel. Anshun estoppel or the extended principle in Henderson v Henderson Fourthly, there is an extension of the second and third rules116. A party will be precluded from relying upon a cause of action (within the meaning of the second 110 Black-Clawson International Ltd v Papierwerke Waldhof-Aschaffenburg AG [1975] AC 591 at 618. 111 See also Test Claimants in the Franked Investment Income Group Litigation v Commissioners for Her Majesty's Revenue and Customs [2020] UKSC 47 at [63]. 112 (1992) 36 FCR 406 at 418. 113 Compare Jackson v Goldsmith (1950) 81 CLR 446 at 467; Rogers v The Queen (1994) 181 CLR 251 at 263. 114 Blair v Curran (1939) 62 CLR 464 at 531-532; Jackson v Goldsmith (1950) 81 CLR 446 at 466-467; Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507 115 Hoysted v Federal Commissioner of Taxation (1921) 29 CLR 537 at 561. See Jackson v Goldsmith (1950) 81 CLR 446 at 466. 116 Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507 at 517 [22]. Edelman rule) or an issue (within the meaning of the third rule) if it "was so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it"117. This fourth rule, which was recognised in England in Henderson v Henderson118 and in Australia in Port of Melbourne Authority v Anshun Pty Ltd119, is commonly described as the extended principle in Henderson v Henderson or as Anshun estoppel120. Res judicata and "cause of action" or "claim" estoppel in this appeal The first ground of Ms Clayton's appeal to this Court alleged that the Full Court had erred in finding that the claims for property settlement and spousal maintenance had merged in the Dubai decree or that the Dubai decree had finally determined such claims between the parties. Although the Full Court relied upon the "cause of action estoppel" rule rather than the rule of merger, the reliance upon merger in Ms Clayton's ground of appeal might have been due to a view that was taken of remarks in the joint judgment in Tomlinson v Ramsey Food Processing Pty Ltd121 which suggested that a cause of action estoppel is "largely redundant" in the field of exercise of judicial power because the field is covered by res judicata in the strict sense of merger. Those remarks, however, should not be understood as suggesting that cause of action estoppel is co-extensive with the doctrine of merger or that there is not a sphere, perhaps even a significant sphere, of operation for cause of action estoppel. Cause of action estoppel remains important and the two rules must be kept separate in order to avoid "[m]uch confusion"122. The Full Court did not rely upon res judicata in the strict sense of merger of the successful plaintiff's rights into the rights arising on the judgment. It could not have done so. Rights that are recognised in a local jurisdiction, such as Australia, do not merge into the final judgment of a foreign jurisdiction, such as the United Arab Emirates, even where the foreign judgment is based upon the same facts as 117 Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 at 602. 118 (1843) 3 Hare 100 [67 ER 313]. 119 (1981) 147 CLR 589. 120 Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507 at 517 [22]. 121 (2015) 256 CLR 507 at 517 [22]. 122 Handley, Spencer Bower and Handley: Res Judicata, 5th ed (2019) at 2 [1.04]. Edelman those that support the right in Australia123. By contrast, it was common ground that a cause of action estoppel can arise from a foreign judgment124. Ms Clayton's second ground of appeal extended beyond the doctrine of merger and relied also upon "cause of action estoppel" and "the Henderson extension". Ms Clayton's submissions on cause of action or claim estoppel were based upon the assertion that the Full Court erred in holding that the estoppel precluded her from prosecuting her case under s 79 of the Family Law Act. She asserted that cause of action estoppel could not apply because the Dubai Court had no jurisdiction over property outside Dubai and the only extent to which she could have sought an adjustment of property was under Art 62.1 of the Personal Status Law. Mr Bant's claim in the Dubai Court was as follows: "Second: Divorce the plaintiff from the defendant, dropping all her marital rights that are associated with that divorce in terms of all type of alimony, deferred dowry and others as well as compensating him for all material and moral damage at the discretion of the Court and to observe all the plaintiff's other rights". In order to appreciate the nature of this claim, to which the Dubai Court responded with its ruling granting a fault-based divorce and ordering repayment of the dowry, the starting point is the lack of any jurisdiction for the Dubai Court to make orders for redistribution of the parties' property. The only possible candidate for such jurisdiction was Art 62.1. But that provision does not empower any redistribution of property. It provides: "A woman having reached the age of full capacity is free to dispose of her property and the husband may not, without her consent, dispose thereof; each one of them has independent financial assets. If one of the two 123 In re Henderson; Nouvion v Freeman (1887) 37 Ch D 244 at 250; East India Trading Co Inc v Carmel Exporters and Importers Ltd [1952] 2 QB 439 at 442; Black- Clawson International Ltd v Papierwerke Waldhof-Aschaffenburg AG [1975] AC 591 at 618. See also Brali v Hyundai Corporation (1988) 15 NSWLR 734 at 739- 741; Barnett, Res Judicata, Estoppel, and Foreign Judgments (2001) at 22 [1.44], 26 [1.53], 98 [4.28]; Davies et al, Nygh's Conflict of Laws in Australia, 10th ed 124 See Carl Zeiss Stiftung v Rayner & Keeler Ltd [No 2] [1967] 1 AC 853 at 966-967. cf Tanning Research Laboratories Inc v O'Brien (1990) 169 CLR 332 at 346; Handley, Spencer Bower and Handley: Res Judicata, 5th ed (2019) at 284-285 Edelman participates with the other in the development of a property, building a dwelling place or the like, he may claim from the latter his share therein upon divorce or death." Article 62.1 might loosely be described, as the Full Court described it125, as involving an "adjustment of property" or, more accurately, a distribution of rights to existing property. But, as the primary judge correctly concluded, although a party can establish an existing share based upon financial contribution in order to "displace a presumption of joint ownership"126, the law of Dubai does not accord the parties with any rights to redistribution of property that are analogous to s 79 of the Family Law Act. The experts had agreed that there was no provision in Dubai for redistribution of assets as understood in Australia, although one of them had analogised a claim based on financial contribution with rights based on the rules and principles of equity. The application of cause of action or claim estoppel reduces here to the question of characterisation. As explained above, the question of characterisation is one of substance, not form, and much will depend upon the level of generality at which the claim is characterised. For instance, a cause of action or claim estoppel barred a claim for compensation for negligent misrepresentation after an earlier, facially different, misleading or deceptive conduct claim under s 52 of the Trade Practices Act 1974 (Cth) was characterised at a higher level of generality as a claim for recovery of loss flowing from the defendant's acts: "how much worse off is [the plaintiff] as a consequence of the acts and omissions of [the defendant]?"127 Mr Bant's submission was effectively that the orders of the Dubai Court should be characterised as having decided a cause of action, or claim, for dissolution of the marriage and all of its financial consequences. On that submission, the absence of any law in Dubai concerning redistribution of property upon divorce leaves property rights where they lay and is merely a different approach to adjudicating the claim or controversy. By contrast, Ms Clayton's submission was effectively that Mr Bant's cause of action, or claim, should be characterised more narrowly, involving only the dissolution of the marriage and 125 Bant & Clayton [No 2] (2019) FLC ΒΆ93-925 at 79,289 [27]. 126 Clayton & Bant [2018] FamCA 736 at [192]. 127 Trawl Industries of Australia Pty Ltd (In liq) v Effem Foods Pty Ltd (1992) 36 FCR 406 at 422. This was not disputed on appeal: see Effem Foods Pty Ltd v Trawl Industries of Australia Pty Ltd (Receivers and Managers Appointed β In Liquidation) (1993) 43 FCR 510 at 520. Edelman immediately related matters such as repayment of the dowry paid under the marriage contract. In many, possibly most, cases a prior final judicial adjudication upon the dissolution of marriage will be characterised as including all of the consequences, including distribution of property, that flow from the dissolution. As this Court said in Henry v Henry128: "differences in procedure, in available remedies and in the substantive law with respect to marriage and divorce will ordinarily ensure that the proceedings are different in significant respects. However, the proceedings will ordinarily be concerned with the same controversy ... [I]t is the marital relationship itself which is the subject of controversy ... [D]isputes with respect to property, maintenance and the custody of children will ordinarily be but aspects of an underlying controversy with respect to the marital relationship." That characterisation will ordinarily apply even where, as the Full Court correctly held in In the Marriage of Caddy and Miller129, different legal rules in the foreign proceedings might lead to different recovery such as the mandated equal division of property by Californian law in that case. But this is not an ordinary case. Mr Bant's claim in the Dubai Court is best characterised as one for the dissolution of marriage only. The expert evidence was not that the Personal Status Law had adopted a rule requiring maintenance of existing property rights before marriage. Rather, the expert evidence was that the Dubai Court had no jurisdiction with respect to property outside the territory of the Emirate. The lack of any rule for redistribution of assets, within or outside the Emirate, follows naturally from this lack of jurisdiction, since any redistribution of property within the Emirate might be expected to take into account respective foreign property holdings of the parties. No cause of action or claim estoppel can bar Ms Clayton's claim for a redistribution of property rights under s 79 of the Family Law Act. Issue estoppel and Anshun estoppel in this appeal The Full Court also relied upon Anshun estoppel to conclude that Ms Clayton's claim for a redistribution of property rights under s 79 of the Family Law Act was barred. In his oral submissions in this Court, however, senior counsel 128 (1996) 185 CLR 571 at 591-592. 129 (1986) 84 FLR 169 at 177, citing Taylor v Hollard [1902] 1 KB 676. Edelman for Mr Bant properly accepted that an Anshun estoppel could not apply because it could never be unreasonable to fail to claim that which was not available. The remaining matter is the conclusion of the Full Court that Ms Clayton was barred from bringing a claim for spousal maintenance in the Family Court of Australia because "the issue was finally heard and determined" by the Dubai Court and she "cannot now bring a claim for spouse maintenance by operation of the 'Henderson extension'"130. This reasoning requires Mr Bant's claim in the Dubai Court to be characterised as extending beyond the mere dissolution of marriage to include also financial consequences of alimony, on the basis that this is equivalent to maintenance. Although Mr Bant's claim in the Dubai Court included a claim for Ms Clayton "dropping all her marital rights that are associated with that divorce in terms of all type of alimony", the expert opinion concerning the nature and effect of alimony in the Personal Status Law131 was not provided to this Court in the appeal books. It is unclear, for instance, the extent to which alimony can be ordered beyond the time at which a divorce is made final, although one Article132, concerned with the "waiting period" before a "non retractable" divorce, prevents payment of alimony, but not "sheltering", if the divorced woman is not pregnant. Nor is it clear how the provisions for alimony for children should be applied133. In the absence of expert evidence, this Court cannot interpret the Personal Status Law according to its own background understanding or rules of interpretation. The only conclusions that can be drawn about alimony are those unchallenged findings of the primary judge that "alimony to a wife is forfeited ... if she abandons her home"134, as was considered by the Dubai Court to be the case, but that alimony in addition to that payable during the "waiting period" would have been payable to Ms Clayton if Mr Bant had divorced her "on a basis other than that advanced to the Dubai Court"135. The Dubai Court ruled that the subject of Mr Bant's claim to "drop off" all of Ms Clayton's rights to alimony and deferred dowry "is untimely", adding that 130 Bant & Clayton [No 2] (2019) FLC ΒΆ93-925 at 79,290 [37]. 131 See Personal Status Law, Arts 55, 63-77. 132 Personal Status Law, Art 69. 133 Personal Status Law, Arts 78-86. 134 Clayton & Bant [2018] FamCA 736 at [187]. 135 Clayton & Bant [2018] FamCA 736 at [188]. Edelman Ms Clayton "did not demand them and hence there is no need to make reference to them in the text". The natural understanding of this English translation is that the Court considered that Mr Bant's claim to exclude any of Ms Clayton's rights to alimony was premature and would be decided at a future time if there were a need to do so. As the primary judge concluded, the issue was not dealt with by the Dubai Court136. Although the Full Court considered that the issue had been "finally heard and determined", no basis was given for that reasoning, in the expert evidence or otherwise. An issue that has not been considered cannot be the subject of an issue estoppel, nor can it be the subject of an Anshun estoppel if it remains open to be determined at a future time. Conclusion The appeal should be allowed with costs. Orders 2, 3, and 4 of the Full Court of the Family Court should be set aside and in their place it should be ordered that the appeal be dismissed. The appellant did not seek to disturb either the order of the Full Court granting the respondent leave to appeal (order 1) or the costs orders made by the Full Court (orders 5, 6, and 7). Although this stay application has involved expert evidence and legal issues of some complexity, and although all courts have produced carefully reasoned judgments, it is unfortunate that there has been a delay of approximately five years between the hearing of the stay application by the primary judge and its final resolution in this Court. This remark is made to emphasise the need for expedition of this proceeding but not to cast any aspersion upon the thorough and thoughtful judgments, or the time taken to produce them, by all the Family Court judges involved in this proceeding. Although delay usually causes injustice, mere delay does not imply fault or blame on any court or decision maker. Reasons for delay, which were not the subject of question or comment during the hearing of this appeal, can be multifarious. They might include unavoidable personal issues confronted by the decision maker. They might include institutional reasons such as heavy case loads and backlogs. Or they might relate to the manner in which the parties have conducted the litigation in light of the usual processes of the court. Indeed, there was a very similar appellate delay between, on the one hand, the institution of the appeal in the Full Court of the Family Court and the delivery of reasons (during which period the Full Court of the Family Court also heard and resolved other disputes between the same parties) and, on the other hand, the application for special leave in this Court and the delivery of this Court's reasons. 136 Clayton & Bant [2018] FamCA 736 at [196]. |
HIGH COURT OF AUSTRALIA INTERNATIONAL LITIGATION PARTNERS PTE LTD APPELLANT AND CHAMELEON MINING NL (RECEIVERS AND MANAGERS APPOINTED) & ORS RESPONDENTS International Litigation Partners Pte Ltd v Chameleon Mining NL (Receivers and Managers Appointed) [2012] HCA 45 5 October 2012 ORDER Appeal allowed. Set aside orders 2, 3, 6, 7, 9 and 10 of the orders of the Court of Appeal of the Supreme Court of New South Wales made on 3 June 2011, save for so much of order 9 as relates to the costs of the appeal to that Court, and, in their place, order that: judgment in the sum of $8,381,144.30 be entered for the appellant against the first respondent; the first respondent pay interest on the judgment sum of $8,381,144.30 to the appellant as follows: pursuant to s 100 of the Civil Procedure Act 2005 (NSW), the first respondent pay interest on the judgment sum from 10 August 2010, being the date on which the Early Termination Fee became payable, up to the date of entry of judgment; and pursuant to s 101 of the Civil Procedure Act 2005 (NSW), the first respondent pay interest on the judgment sum from the date of entry of judgment up to the date of payment. The first respondent pay the appellant's costs of the appeal to this Court and of the cross-appeal to the Court of Appeal. The security provided by the appellant, as a condition of the grant of special leave to appeal given by this Court on 28 October 2011, be released. On appeal from the Supreme Court of New South Wales Representation B W Walker SC with R C A Higgins for the appellant (instructed by Ashurst Australia) J T Gleeson SC with M A Jones SC and M L Bennett for the first respondent (instructed by Swaab Attorneys) C R C Newlinds SC with J C Giles for the second respondent (instructed by Submitting appearance for the third and fourth respondents Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS International Litigation Partners Pte Ltd v Chameleon Mining NL (Receivers and Managers Appointed) Corporations β Credit facility β Derivative β Financial product β Financial service and markets β Financial service providers β Licensing and regulation β Where litigation funding agreement purportedly rescinded by reason of the lack of a financial services licence β Whether litigation funding agreement a financial product β Whether litigation funding agreement a credit facility. Words and phrases β "credit facility", "financial product", "financial service", "litigation funding agreement". Corporations Act 2001 (Cth), ss 760A, 761A, 761D, 761EA, 762A-762C, 763A, 765A, 766A-766E, 911A, 924A, 925A, 925E. Corporations Regulations 2001 (Cth), reg 7.1.06. FRENCH CJ, GUMMOW, CRENNAN AND BELL JJ. This appeal from the Court of Appeal of the Supreme Court of New South Wales (Giles and Young JJA; Hodgson JA dissenting)1 turns upon the construction of provisions in Ch 7 in the Corporations Act 2001 (Cth) ("the Act") and regulations made thereunder2. Chapter 7 of the Act Chapter 7 is headed "Financial services and markets". The "main object" of Ch 7 is stated in s 760A as the promotion of: confident and informed decision making by consumers of financial products and services while facilitating efficiency, flexibility and innovation in the provision of those products and services; and fairness, honesty and professionalism by those who provide financial services; and fair, orderly and transparent markets for financial products; and the reduction of systemic risk and the provision of fair and effective services by clearing and settlement facilities." Chapter 7, in the form relevant to these proceedings, was included in the Act by Sched 1 to the Financial Services Reform Act 2001 (Cth) ("the Reform Act"). In the second reading speech on the Bill for the Reform Act3, the Minister for Financial Services and Regulation referred to the Financial System Inquiry Report ("the Wallis Report")4 and said that it had "concluded that the complex and fragmented regulatory framework was creating inefficiencies for financial service providers and confusion for consumers". International Litigation Partners Pte Ltd v Chameleon Mining NL (2011) 276 ALR 138. 2 References in these reasons to the Act are to the form taken at the critical date, which, as will appear, was 10 August 2010. 3 Australia, House of Representatives, Parliamentary Debates (Hansard), 5 April 4 Australia, Financial System Inquiry, Financial System Inquiry Final Report, Crennan Bell The Minister went on to say: "[The Wallis Report] recommended the introduction of a single licensing regime for all financial sales, advice and dealing and the creation of a consistent and comparable product disclosure framework. ... [The bill] will create a streamlined regulatory regime for financial markets and clearing and settlement facilities. The bill recognises that it is no longer possible for different financial institutions, services and products to be regulated under separate regulatory frameworks. The bill will ensure that Australia's regulatory framework keeps pace with current developments in the financial services industry. The bill will remove regulatory barriers introduction of technological innovations and assist Australia's financial services industry to meet the technological challenge posed by the spread of e-commerce. the Many financial service providers are already subject to regulatory frameworks governing licensing, disclosure and other conduct obligations. However, these frameworks vary across different industry sectors. This fragmentation increases compliance costs and reduces industry efficiency. The bill seeks to harmonise these diverse requirements within a single overarching framework that will apply to all financial service providers. The bill will replace a substantial amount of existing legislation, hence its size. ... The framework will also be capable of flexible implementation so that it can apply differently to different products where this difference can be justified within the overall objectives of the regulatory framework." The legislative scheme implemented by the Reform Act has two significant characteristics. One is overinclusiveness. Rights and liabilities are drawn in overtly broad terms, on the footing that instances of overreach which become apparent in the administration of the legislation may be remedied by adjustments to the Act made not by remedial legislation but by exercise of powers conferred upon the Executive Government or bodies such as the Australian Securities and Investments Commission. The second characteristic is the creation by the legislation of rights and liabilities by means of criteria which Crennan Bell reflect fluid market and economic usage rather than any ascertainable and stable meaning in the law. Part 7.1 of the Act (which includes s 760A) is headed "Preliminary" and contains complex definitional provisions. These are relevantly supplemented and qualified by Pt 7.1 Div 1 (regs 7.1.02-7.1.10) of the Corporations Regulations 2001 (Cth) ("the Regulations"). Part 7.6 of Ch 7 of the Act (ss 910A-926B) establishes a scheme for the licensing of providers of "financial services". Section 925A is of critical importance. It applies (by dint of s 924A) to an agreement with a client entered into in the course of a "financial services business" by a non-licensee who does not hold a licence and is not exempt from the requirement to do so, where the agreement constitutes or relates to the provision of a financial service by the non-licensee. Section 925A empowers the client to give to the non-licensee a written notice stating that the client wishes to rescind the agreement. This has the effect given by s 925E that the non-licensee is not entitled to enforce the agreement or to rely on it by way of defence or otherwise as against the client. The litigation At stake in this Court is the entitlement of the appellant ("ILP") to recover from the first respondent ("Chameleon") an "Early Termination Fee" pursuant to cl 4.2 of a deed dated 28 October 2008 between Chameleon and ILP ("the Funding Deed")5. Chameleon is a mining company whose shares are listed on the Australian Securities Exchange. ILP is a corporation based in Singapore. It undertook in the Funding Deed to fund litigation which Chameleon had instituted on 26 November 2007 in the Federal Court of Australia against Murchison Metals Ltd and others, claiming compensation for alleged breaches of statutory and fiduciary duties. The obligations owed by Chameleon to ILP under the Funding Deed were secured by a fixed and floating charge dated 28 December 2008 ("the Charge"). While at all material times ILP carried on in Australia what the primary judge (Hammerschlag J) described as the business of funding litigation6, it was not the holder of an Australian financial services licence under Pt 7.6 of the Act. 5 The full text of the Funding Deed is annexed to the reasons of the primary judge: Chameleon Mining NL v International Litigation Partners Pte Ltd (2010) 79 ACSR 462 at 481-491. (2010) 79 ACSR 462 at 475 [77]. Crennan Bell The Federal Court litigation came to a hearing in September and October 2009 and judgment was reserved7. Thereafter there were disagreements between ILP and Chameleon primarily concerning legal representation and settlement negotiations in the Federal Court litigation. On 10 August 2010, Chameleon and the present second respondent ("Cape Lambert") agreed that Cape Lambert would provide to Chameleon a "Standby Facility" of $6.5 million and would be entitled to appoint half of the board of directors of Chameleon. It has not been disputed that this agreement effected a "Change in Control" of Chameleon within the terms of cl 4.1 of the Funding Deed and so triggered the obligation of Chameleon under cl 4.2 to pay the Early Termination Fee. The Early Termination Fee was defined to mean an amount equal to "the Legal Costs (including Security for Costs)" expended by ILP up to the date of termination under cl 4.1 and a further amount being the higher of $9 million or the value of 20 per cent of the share capital of Chameleon at the "strike price" of its shares by the acquirer of the Change in Control8. As a counter-attack, on 10 August 2010, the critical date, Chameleon gave a notice of rescission of the Funding Deed, and relied upon s 925A of the Act as the source of its power to do so. In response, on 11 August 2010, ILP appointed the present third and fourth respondents as receivers to Chameleon in exercise of powers conferred by the Charge. From the litigation which then ensued in the Equity Division of the Supreme Court of New South Wales the appeal to this Court arises. The third to Chameleon, entered submitting and fourth respondents, as receivers appearances. Cape Lambert supported the submissions of Chameleon and added its own submissions. Upon an expedited final hearing in the Equity Division one of the issues concerned the entitlement of ILP to the Early Termination Fee. In his decision delivered on 31 August 2010 the primary judge granted a declaration that ILP was entitled to payment of the Early Termination Fee less any sums previously 7 Comprehensive reasons were delivered on 20 October 2010: Chameleon Mining NL v Murchison Metals Ltd [2010] FCA 1129. Judgment on appeal was given by the Full Court on 21 February 2012: Grimaldi v Chameleon Mining NL [No 2] (2012) 200 FCR 296. 8 Chameleon has taken no point that the Early Termination Fee has the character of a penalty against which equity would grant relief. Nothing in these reasons is to be taken as indicating any view on that subject. Crennan Bell paid to it. The Court of Appeal, however, by majority, disagreed and on cross-appeals by Chameleon and Cape Lambert a declaration was made that ILP was not entitled to payment of the Early Termination Fee. For the reasons which follow, the conclusion reached by Hodgson JA in his dissenting judgment was correct, the appeal by ILP should be allowed and judgment should be entered in its favour for the Early Termination Fee. The issues Section 911A(1) imposes the licensing requirement upon "a person who carries on a financial services business in this jurisdiction". The expression "financial services business" means "a business of providing financial services" (s 761A). The term "financial service" has the meaning given by Pt 7.1 Div 4 (ss 766A-766E). This relevantly includes dealing in a "financial product" (s 766A(1)(b)). Subdivision A Division 3 of Pt 7.1 (ss 762A-765A) is headed "What is a financial product?" "Preliminary". (ss 762A-762C) Section 762B provides that Ch 7 applies to that component of a facility that is a financial product, to the exclusion of any other components of the facility. Section 762A provides an "Overview" of the operation of subdivs B, C and D as follows: is headed "General definition Subdivision B [ss 763A-763E] sets out a general definition of financial product. Subject to subsections (2) and (3), a facility is a financial product if it falls within that definition. Specific inclusions Subdivision C [s 764A] identifies, or provides for the identification of, kinds of facilities that, subject to subsection (3), are financial products (whether or not they are within the general definition). Overriding exclusions Subdivision D [s 765A] identifies, or provides for the identification of, kinds of facilities that are not financial products. These facilities are not financial products: even if they are within the general definition; and Crennan Bell even if they are within a class of facilities identified as mentioned in subsection (2)." Accordingly, subdiv B provides a general definition of "financial product" in s 763A(1); a financial product includes a "facility" (which includes a contract, agreement, understanding or scheme (s 761A, s 762C)) through which a person "makes a financial investment" or "manages financial risk" (s 763A(1)(a) and (b)). However, even if it otherwise falls within the general definition of financial product in s 763A, or subdiv C applies and it is otherwise identified as such by a specific inclusion listed in s 764A, a facility to which subdiv D applies and is within the specific exclusions provided in s 765A is not a financial product for the purposes of Ch 7 of the Act. One such exclusion (identified in s 765A(1)(h)(i)) is "a credit facility within the meaning of the regulations (other than a margin lending facility [as defined in s 761EA(1)])". ILP submits that the Funding Deed answers the statutory description of a "credit facility", with the result that the whole of Ch 7, including the rescission provision in s 925A upon which Chameleon relied to deny any obligation to pay the Early Termination Fee, was not engaged. If that submission respecting the operation of subdiv D is not accepted, alternative submissions are presented by ILP. One is that in any event subdiv B was not satisfied; the Funding Deed was not a "financial product", in particular, because it was an "incidental product" and so excluded by s 763E(1) from the term "financial product". Another submission by ILP fixes upon subdiv C. It is that, contrary to the submission by Cape Lambert on its Notice of Contention, the Funding Deed is not a "derivative". Derivatives are one of the specific things designated by s 764A(1)(c) as "financial products" for the purposes of Ch 7. The term "derivative" is given a lengthy definition by s 761D; this relevantly excludes "a contract for the future provision of services" (s 761D(3)(b)). Credit facility? The reasons of the Court of Appeal, no doubt reflecting the emphasis in submissions made at that stage of the litigation, gave detailed attention to the application to the Funding Deed of subdivs B and C. However, it is convenient first to consider the submission by ILP that subdiv D is engaged as the Funding Deed answers the description of a "credit facility", placing it wholly outside Ch 7. Crennan Bell Under the subheading "Exclusion of credit", the Revised Explanatory Memorandum to the Bill for the Reform Act stated that credit facilities were not covered by the definition of "financial product" and noted that to the extent that they were consumer credit, they would be regulated by the State-based Uniform Consumer Credit Code ("the UCCC")9. Section 5E of the Act is designed to achieve the concurrent operation of State and Territory laws, where there is no direct inconsistency between them. (The UCCC was displaced by the National Consumer Credit Protection Act 2009 (Cth)10.) Paragraph 6.92 of the Revised Explanatory Memorandum read: "Although credit is not specifically included in the regime either by the general definition or the list of specific inclusions, it is possible that certain credit arrangements could have fallen within elements of the general definition. For example, fixed rate loans could have been regarded as a facility for managing a financial risk and credit cards would have been facilities for the making of non-cash payments. For this reason credit facilities are specifically excluded from the definition of financial product (proposed subparagraph 765A(1)(h)(i)). The regulations will define what is a credit facility for the purposes of the provisions. Generally any facility that would be regarded as credit (and not just consumer credit) for the purposes of the UCCC will be prescribed by the regulations." Section 765A(1)(h)(i) excludes from the term "credit facility" a margin lending facility, but it has not been contended that the Funding Deed was of that character. Otherwise, content to the expression "credit facility" is relevantly given by reg 7.1.06 of the Regulations. Subject to exclusions which do not apply, the provision of "credit ... for any period", with or without prior agreement between the credit provider and the debtor and whether or not both credit and debit facilities are available, is a "credit facility" (reg 7.1.06(1)(a)). The term "credit" is defined in reg 7.1.06(3)(a) as meaning a contract, arrangement or understanding under which payment of a debt to the credit provider "is deferred", and as including "any form of financial accommodation" (reg 7.1.06(3)(b)(i)). The use in this way of the concept "means and includes" is to avoid any doubt that what is identified by the inclusion falls 9 Australia, Senate, Financial Services Reform Bill 2001, Revised Explanatory Memorandum at 43 [6.91]-[6.92]. 10 Schedule 1, which is the National Credit Code, commenced on 1 April 2010. Crennan Bell within the scope of the designated meaning of "credit"11. The result is that a contract, arrangement or understanding is any form of financial accommodation is "credit", and its provision "for any period" will be a "credit facility". that The appeal is most readily disposed of by concentration upon the issue whether by the Funding Deed ILP provided to Chameleon any form of financial accommodation in the sense just discussed. The expression "a contract, arrangement or understanding ... [for] any form of financial accommodation" (emphasis added) is of considerable width of denotation. For example, an agreement by a bank to lend its name to a bill of exchange for the accommodation of its customer provides a form of financial accommodation, as is reflected in the expression "accommodation bill"12. The same may be said for the provision of a guarantee of the obligations to the creditor of the principal debtor. The extension by a bank to a customer of an overdraft facility provides a form of financial accommodation in respect of the presently undrawn portion of the overdraft. Further, the inclusion of the words "arrangement or understanding" indicates that regard may be had to matters of substance as well as of form. The Funding Deed The principal obligation undertaken by ILP in the Funding Deed was its agreement in cl 2.1 to pay the "Legal Costs" within 28 days of receipt of written notification requiring payment. "Legal Costs" were defined as all costs associated with procuring the files of Chameleon's previous solicitor in the Federal Court proceedings, and all future agreed legal costs and disbursements incurred by Chameleon and ILP in relation to those proceedings or any appeal (cl 1). Upon resolution of the proceedings in favour of Chameleon, whether by settlement or judgment, ILP would be entitled (cl 3.1(a)) to "Repayment" of the Legal Costs it had paid in accordance with cl 2.1; ILP also would be entitled to payment of the "Funding Fee" (cl 3.1(b)). This was an amount being the higher of three times the costs incurred by ILP under cl 2.1 and the "Percentage Payment" out of the "Resolution Sum", being the gross amount received upon 11 See Zickar v MGH Plastic Industries Pty Ltd (1996) 187 CLR 310 at 329-330; [1996] HCA 31; BHP Billiton Iron Ore Pty Ltd v National Competition Council (2008) 236 CLR 145 at 159 [32]; [2008] HCA 45; Pearce and Geddes, Statutory Interpretation in Australia, 7th ed (2011) at 252 [6.65]. 12 Bills of Exchange Act 1909 (Cth), s 33. Crennan Bell settlement or judgment in the proceedings. The "Resolution Sum" was to be held by Chameleon's solicitors on trust for ILP, as to so much thereof as was due to ILP under the Funding Deed (cl 3.3). Hodgson JA was of the view that what the Funding Deed provided to Chameleon was a form of financial accommodation13. This was so, in our opinion, notwithstanding that ILP was to pay the Legal Costs incurred by Chameleon rather than advancing to it the moneys to enable it to do so. In its submissions, Cape Lambert emphasised that reg 7.1.06(1)(a)(i) defined "credit facility" for s 765A(1)(h)(i) of the Act as "the provision of credit ... for any period". This was said to require identification in the Funding Deed of a period of time when there was money owing by Chameleon but not payable. This reflected too narrow a view of what might amount to the provision for a period of "credit" by a form of financial accommodation. This is true also of the submission made by Chameleon that "financial accommodation" postulated an obligation by Chameleon to pay money which was deferred, the deferral representing the accommodation. A bank overdraft may be subject to a term that it be repayable on demand by the bank, but the facility is one of accommodation for that period which elapses before the demand is made. Clause 2.1 of the Funding Deed contained a present promise by ILP to pay the Legal Costs within 28 days of receipt of written notification. The temporal limitation upon the performance of that promise was that the notification relate to costs in relation to the Federal Court proceedings or any appeal from a judgment or order therein. For its part, Chameleon undertook to make the payments identified in cl 3.1 if the Federal Court proceedings yielded a receipt whether by way of settlement or judgment. Conclusion The Funding Deed was a "credit facility", being for the provision for a period of a form of financial accommodation of Chameleon by ILP. The exclusion provision in s 765A(1)(h)(i) of the Act was satisfied. This makes it unnecessary to consider the alternative submissions by ILP. These are predicated upon the Funding Deed not being a "credit facility". 13 (2011) 276 ALR 138 at 161 [137]. Crennan Bell Orders The appeal should be allowed. The first respondent should pay the appellant's costs of the appeal to this Court and of the cross-appeal to the Court of Appeal. Orders 2, 3, 6, 7, 9 and 10 of the orders of the Court of Appeal made on 3 June 2011 should be set aside (save for so much of order 9 as relates to the costs of the appeal to the Court of Appeal) and in place thereof it should be ordered that: judgment in the sum of $8,381,144.30 be entered for the appellant against the first respondent; the first respondent pay interest on the judgment sum of $8,381,144.30 to the appellant as follows: the first respondent pay interest on the judgment sum, pursuant to s 100 of the Civil Procedure Act 2005 (NSW), from 10 August 2010, being the date on which the Early Termination Fee became payable, up to the date of entry of judgment; and the first respondent pay interest on the judgment sum, pursuant to s 101 of the Civil Procedure Act 2005 (NSW), from the date of entry of judgment up to the date of payment. These orders reflect the short minutes filed by ILP on 25 June 2012, by leave, after the conclusion of the hearing of the appeal. An order also should be made for the release of the security that ILP provided in compliance with the condition attached to the grant by this Court of special leave. HEYDON J. The background and the relevant legislation are set out in the joint judgment. I adopt the abbreviations for the legislation and the agreement between the parties there employed. The facts The appellant, alas, is a litigation funder. It entered a Funding Deed with the first respondent by which it agreed to fund the first respondent's conduct of certain litigation in which the first respondent's solicitors had changed. The appellant agreed in the Funding Deed to pay the "Legal Costs" within 28 days of receiving a written notification demanding payment and substantiating documentation if required (cl 2.1). The "Legal Costs" were costs associated with procuring legal files from the first respondent's previous solicitor as well as certain future agreed legal costs and disbursements (cl 1). Thus the appellant did not supply the first respondent with money for it to pay the "Legal Costs" incurred by the first respondent's lawyers. Instead it paid the money directly to the lawyers. It would not be reimbursed until either the proceedings reached "Resolution" (cl 3.1) or there was a Change in Control of the first respondent (cl 4.1). In the latter event, the appellant was entitled to immediate payment by the first respondent of the Early Termination Fee as defined in cl 1 (cl 4.2). By reason of dealings between the first respondent and the second respondent, there was a Change in Control of the first respondent. The first respondent disputed the appellant's entitlement to the Early Termination Fee, and purported to rescind the Funding Agreement under s 925A of the Act, on the ground that the appellant entered into the Funding Deed in the course of the appellant's "financial services business", which it carried on without a licence (s 911A of the Act). The statutory structure A "financial services business" is a business which provides "financial services" (s 761A of the Act). The expression "financial service" includes dealing in a "financial product" (s 766A(1)(b) of the Act). The appellant denies that it has dealt in a "financial product". A "credit facility" within the meaning of the Regulations is not a "financial product" (s 765A(1)(h)(i) of the Act). Pursuant to reg 7.1.06(1)(a), a "credit facility" includes "the provision of credit" for any period. Regulation 7.1.06(3)(b)(i) provides that "credit" includes "any form of financial accommodation". In ordinary usage, "accommodation" means anything which supplies a want. Conclusion The crucial issue is thus whether the appellant provided the first respondent with any form of financial accommodation. The first respondent needed lawyers to conduct its litigation. Lawyers would not do so unless paid. The first respondent had a want of money to pay them. The appellant supplied that want by paying the first respondent's lawyers directly. The accommodation so supplied extended for the period marked by cl 3.1, unless cl 4.1 came into operation earlier. The second respondent submitted that the definition of "credit facility" in the Act and the Regulations required identification of a period of time when there was money owing but not payable. Clauses 3.1 and 4.2 identified times when the money would be both owing and payable. That is sufficient to satisfy the words "the provision of credit β¦ for any period" (reg 7.1.06(1)(a)(i)). What was given was financial accommodation for the periods defined in cll 3.1 and 4.2. The first respondent submitted that "credit" required an "element of a definite unavoidable obligation but with a concept of deferral". This construction imposes restrictions on the definition of credit considered in the context of a facility for providing credit in the form of "financial accommodation" which are not present in the statutory language. "Accommodation" is a wide expression. As the appellant submitted, the words "any" and "form" in the expression "any form of financial accommodation" indicate that it is an expression to be construed amply. Orders The orders proposed in the joint judgment should be made. |
HIGH COURT OF AUSTRALIA APPELLANT AND AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION RESPONDENT Frugtniet v Australian Securities and Investments Commission [2019] HCA 16 15 May 2019 ORDER Appeal allowed. Set aside orders 2 and 3 of the orders made by the Full Court of the Federal Court of Australia on 12 October 2017 and, in their place, order that: Appeal allowed. Order 1 of the orders made by Bromberg J on 22 August 2016 and the order made by Bromberg J on 15 September 2016 be set aside and, in their place, order that the decision made by the Administrative Appeals Tribunal on 6 March 2015 be set aside and the matter be remitted to the Administrative Appeals Tribunal for reconsideration in accordance with law." The respondent pay the costs of the appellant in this Court. On appeal from the Federal Court of Australia Representation M H O'Bryan QC with J P Wheelahan for the appellant (instructed by SBA Law) S B Lloyd SC with R C Knowles for the respondent (instructed by Australian Securities and Investments Commission) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Frugtniet v Australian Securities and Investments Commission Administrative law (Cth) β Administrative Appeals Tribunal β Nature and scope of review β Where appellant's convictions spent under Pt VIIC of Crimes Act 1914 (Cth) β Where Div 3 of Pt VIIC of Crimes Act prohibited Australian Securities and Investments Commission ("ASIC") from taking into consideration spent convictions in deciding to make banning order β Where review of decision of ASIC by Administrative Appeals Tribunal β Where s 85ZZH(c) of Crimes Act provided that Div 3 of Pt VIIC does not apply to Commonwealth tribunal β Whether Administrative Appeals Tribunal entitled to take into consideration on review spent convictions which ASIC was prohibited from taking into consideration. Words and phrases β "banning order", "fit and proper person", "function of the original decision-maker", "review", "spent conviction", "stand in the shoes of the decision-maker". Administrative Appeals Tribunal Act 1975 (Cth), ss 25, 43. Crimes Act 1914 (Cth), Pt VIIC, ss 85ZM, 85ZV, 85ZW, 85ZZH(c). National Consumer Credit Protection Act 2009 (Cth), ss 80, 327. KIEFEL CJ, KEANE AND NETTLE JJ. Section 80(1)(f) of the National Consumer Credit Protection Act 2009 (Cth) ("the NCCP Act") provides that the Australian Securities and Investments Commission ("ASIC") may make a banning order against a person if ASIC has reason to believe that the person is not a fit and proper person to engage in "credit activities"1. Perforce of s 80(2) of the NCCP Act, and s 85ZW of the Crimes Act 1914 (Cth), ASIC must not take account of "spent convictions" in determining whether it has reason to believe that the person is not fit and proper2. Section 327 of the NCCP Act provides for review by the Administrative Appeals Tribunal ("the AAT") of a decision by ASIC to make a banning order. Section 85ZZH(c) of the Crimes Act provides in effect, and so far as is relevant, that s 85ZW of the Crimes Act does not apply to a tribunal established under Commonwealth law. The AAT is a tribunal established under Commonwealth law. The question for decision in this appeal is whether, on review of a decision of ASIC to impose a banning order, the AAT may take spent convictions into account. For the reasons which follow, the question should be answered, no, and the appeal should be allowed. Relevant legislative provisions Section 80(1)(f) of the NCCP Act provides that ASIC may make a banning order against a person "if ASIC has reason to believe that the person is not a fit and proper person to engage in credit activities". "Credit activity" is defined by s 6 of the NCCP Act in substance as including where the person is carrying on a business of providing or performing the obligations or exercising the rights of a provider of a credit service, consumer leases, or mortgages, or the person is a beneficiary of a guarantee or exercises the rights of a beneficiary of a guarantee, or is a person who engages in prescribed credit activities. Read together, ss 81 and 82 of the NCCP Act provide in substance that the effect of a banning order is that the person against whom it is made must not engage in credit activities for the period of the banning order, subject to any express provision allowing the person to do specified acts that the order would otherwise prohibit. 1 Section 6 of the National Consumer Credit Protection Act 2009 (Cth) sets out when a person engages in a credit activity. In relation to a conviction, the word "spent" has the meaning given in s 85ZM of the Crimes Act 1914 (Cth). Nettle Section 80(2) of the NCCP Act relevantly provides in substance that (subject to Pt VIIC of the Crimes Act), in making a decision whether to impose a banning order, ASIC must have regard to certain considerations including the criminal convictions of the person within ten years before the banning order is proposed to be made and any other matter ASIC considers relevant. Section 85ZW of the Crimes Act (which is in Div 3 of Pt VIIC of that Act) provides in substance and so far as is relevant that, subject to Div 6, but despite any other Commonwealth law, or any State law or Territory law, the fact that a person has been charged with or convicted of an offence that is spent shall not be taken into account by a Commonwealth authority. Section 85ZM provides in substance and so far as is relevant that a "conviction" includes a finding of guilt without entry of conviction and that a conviction is a "spent conviction" if the person was not sentenced to imprisonment for the offence, or was not sentenced to imprisonment for the offence for more than 30 months, and the waiting period for the offence has ended. The "waiting period" is defined in s 85ZL, so far as is relevant, as ten years in the case of a person not dealt with as a minor. Section 85ZZH(c) (which is in Div 6 of Pt VIIC) provides, however, in effect that Div 3 of Pt VIIC does not apply, inter alia, to the taking into account of information by a court or tribunal established under a Commonwealth law, a State law or a Territory law, for the purpose of making a decision, including a decision in relation to sentencing. Section 327 of the NCCP Act provides so far as is relevant that a person affected by a decision made by ASIC under s 80(1)(f) of that Act may make an application to the AAT for review of the decision. Section 43 of the Administrative Appeals Tribunal Act 1975 (Cth) ("the AAT Act") provides so far as is relevant that for the purpose of reviewing a decision, the AAT may exercise all the powers and discretions that are conferred by any relevant enactment on the person who made the decision and shall make a decision in writing affirming, varying, or setting aside the decision under review. If the AAT sets aside the decision under review, it must make a decision in substitution for the decision so set aside or remit the matter for reconsideration in accordance with any directions or recommendations of the AAT. The facts The appellant has a criminal record which includes being convicted in the United Kingdom in 1978 of 15 counts of handling stolen goods, forgery, and obtaining property by deception and theft (for which he was sentenced to a term Nettle of imprisonment and served two years) and by a finding (in Australia) by the Broadmeadows Magistrates' Court in 1997 that he committed an offence of obtaining property by deception in relation to the issue of airline tickets (for which no conviction was entered but he was fined $1,000) ("the spent convictions"). In determining that the appellant was not a fit and proper person to engage in credit activities, ASIC was precluded by s 80(2) of the NCCP Act from having regard to the spent convictions. On application for review of that decision, the AAT approached the review on the basis that it was entitled to, and it did, take the spent convictions into account because the convictions were "evidence of dishonest conduct that [was] relevant under the policy guidelines". Proceedings below On appeal to the Federal Court of Australia on a question of law as to whether the AAT took into account matters it was obliged to ignore, the primary judge (Bromberg J), adopting the reasoning of Middleton J in Toohey v Tax Agents' Board of Victoria3 concerning comparable Victorian legislation, as being, in Bromberg J's view, directly on point and not plainly wrong, held4 that the prohibition in s 85ZW of the Crimes Act against ASIC taking spent convictions into account did not apply to the AAT in the conduct of a merits review of ASIC's decision, by reason of s 85ZZH(c) of that Act. An appeal to the Full Court of the Federal Court (Reeves, Farrell and Gleeson JJ) was dismissed5. In reaching their decision, the Full Court were of the view6 that the reasoning of White J, in dissent, in Kocic v Commissioner of Police, NSW Police Force7, regarding comparable New South Wales legislation, was persuasive and fortified their conclusion that the primary judge did not make any error in concluding that the AAT was entitled to take the spent convictions into account. (2007) 171 FCR 291. 4 Frugtniet v Australian Securities and Investments Commission (2016) 70 AAR 153 5 Frugtniet v Australian Securities and Investments Commission (2017) 255 FCR 96. 6 Frugtniet v Australian Securities and Investments Commission (2017) 255 FCR 96 (2014) 88 NSWLR 159. Nettle The nature of administrative merits review The enactment of the AAT Act established a new and substantially unprecedented8 regime of administrative merits review, distinguished principally by the AAT's jurisdiction to re-exercise the functions of original administrative decision-makers9. The question for determination by the AAT on the review of an administrative decision under s 25 of the AAT Act is thus whether the decision is the correct or preferable decision10. That question is required to be determined on the material before the AAT, not on the material as it was when before the original decision-maker11. As Bowen CJ and Deane J held12 in Drake v Minister for Immigration and Ethnic Affairs, however, and has since been affirmed by this Court in Shi v Migration Agents Registration Authority13, the AAT is not at large. It is subject to the same general constraints as the original decision-maker and should ordinarily approach its task as though it were performing the relevant function of the original decision-maker in accordance 8 Pearce, "The Australian Government Administrative Appeals Tribunal" (1976) 1 University of New South Wales Law Journal 193 at 193. Although some Commonwealth decisions were reviewable by a small number of specialist tribunals prior to 1975, there were considerable differences in the procedures and standard of performance of these bodies: see generally Pearce, Administrative Appeals Tribunal, 4th ed (2015), ch 1. 9 Liedig v Commissioner of Taxation (1994) 50 FCR 461 at 464, adopting and adapting Mobil Oil Australia Pty Ltd v Federal Commissioner of Taxation (1963) 113 CLR 475 at 502; [1963] HCA 41; Shi v Migration Agents Registration Authority (2008) 235 CLR 286 at 315 [100] per Hayne and Heydon JJ, 324-325 [134] per Kiefel J; [2008] HCA 31. See also Brennan, "The Future of Public Law β The Australian Administrative Appeals Tribunal" (1979) 4 Otago Law Review 286 at 288. 10 Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577 at 589 per Bowen CJ and Deane J, 599 per Smithers J; Shi (2008) 235 CLR 286 at 298 [35] per Kirby J, 314 [98] per Hayne and Heydon JJ, 327 [140]-[141] per Kiefel J. 11 Drake (1979) 24 ALR 577 at 589 per Bowen CJ and Deane J; Shi (2008) 235 CLR 286 at 298 [35] per Kirby J, 314 [98] per Hayne and Heydon JJ, 328 [143] per 12 (1979) 24 ALR 577 at 589. 13 (2008) 235 CLR 286. Nettle with the law as it applied to the decision-maker at the time of the original decision14. Depending on the nature of the decision the subject of review, the AAT may sometimes take into account evidence that was not before the original decision-maker, including evidence of events subsequent to the original decision15. But subject to any clearly expressed contrary statutory indication, the AAT may do so only if and to the extent that the evidence is relevant to the question which the original decision-maker was bound to decide; really, as if the original decision-maker were deciding the matter at the time that it is before the AAT. The AAT cannot take into account matters which were not before the original decision-maker where to do so would change the nature of the decision or, put another way, the question before the original decision-maker16. As Kiefel J observed17 in Shi, identifying the question raised by the statute for consideration will usually determine the facts that may be taken into account in connection with the decision. The issue is one of relevance, to be determined by reference to the elements of the question necessary to be addressed in reaching a decision18. Construction of the National Consumer Credit Protection Act 2009 (Cth) In this matter, the question which ASIC was required to decide under s 80(1)(f) of the NCCP Act was whether, having regard to the range of considerations specified in s 80(2), which, perforce of s 85ZW of the Crimes Act, excluded spent convictions, the appellant was not a fit and proper person to engage in credit activities. 14 Minister for Immigration and Ethnic Affairs v Pochi (1980) 31 ALR 666 at 670-671 per Smithers J; Shi (2008) 235 CLR 286 at 325 [134] per Kiefel J; see also Liedig (1994) 50 FCR 461 at 464, adopting and adapting Mobil Oil Australia (1963) 113 CLR 475 at 502. 15 Freeman v Secretary, Department of Social Security (1988) 19 FCR 342 at 344-345; Hospital Benefit Fund of Western Australia Inc v Minister for Health, Housing and Community Services (1992) 39 FCR 225 at 234. 16 Freeman (1988) 19 FCR 342 at 344-345; Hospital Benefit Fund (1992) 39 FCR 225 at 234; Shi (2008) 235 CLR 286 at 327-329 [142]-[145] per Kiefel J. 17 (2008) 235 CLR 286 at 327 [142]. 18 Shi (2008) 235 CLR 286 at 327 [142] per Kiefel J. Nettle Subject, therefore, to any clearly expressed contrary legislative intent, the question which the AAT was required to decide on review of ASIC's decision was whether, having regard to the same specified range of considerations, and thus excluding spent convictions, the appellant was not a fit and proper person to engage in credit activities. Section 80(2) of the NCCP Act does not express a clear contrary legislative intent. The stipulation in s 80(2) that the criteria to which ASIC must have regard is "subject to Part VIIC of the Crimes Act 1914" is, in terms, directed only to ASIC; and so, in effect, says nothing about an AAT merits review of ASIC's decisions. As was earlier noticed, AAT merits review of ASIC's decisions under s 80(1) is separately provided for in s 327 of the NCCP Act; and s 327 also says nothing about the criteria to which the AAT may have regard in the conduct of the review. It is necessarily implicit in the stipulation in s 80(2) of the NCCP Act that the criteria to which ASIC must have regard is subject to Pt VIIC of the Crimes Act only insofar as that Part is capable of application to ASIC. Section 85ZW of the Crimes Act is capable of application to ASIC because it specifies that spent convictions are not to be taken into account by a Commonwealth authority, and ASIC is such an authority. But s 85ZZH(c), which qualifies the operation of s 85ZW in relation to courts and tribunals, is incapable of application to ASIC because ASIC is not a court or tribunal. The respondent contended in effect that it is implicit in the stipulation in s 80(2) of the NCCP Act that the criteria to which ASIC must have regard is "subject to Part VIIC of the Crimes Act 1914", and, since s 85ZW (which is within Pt VIIC) is subject in its application to courts and tribunals to the operation of s 85ZZH(c), that the statutory purpose of s 80(2) is not only to subject ASIC to the requirements of Pt VIIC insofar as they are capable of application to ASIC but also to subject the AAT in conducting a merits review of ASIC's decision to the requirements of Pt VIIC insofar as they are capable of application to the AAT. It followed, it was submitted, that the AAT can have regard to spent convictions when conducting its merits review of ASIC's decision because of the operation of s 85ZZH(c). Arguably, it is possible to read s 80(2) of the NCCP Act together with s 85ZZH(c) of the Crimes Act as having that effect. The implication is obscure but the fact that the Full Court of the Federal Court have so construed the provision, and that other, first instance judges have construed comparable legislation in a similar light, means that it is a possibility which needs to be confronted. The likelihood of that construction, however, needs to be assessed against the background of the long-standing principles concerning the function of the conduct of merits review of an administrative review tribunal Nettle administrative decisions, to which reference has been made. Against that background, it is improbable that Parliament would choose a technique of obscure implication in order fundamentally to alter the nature of administrative merits review of a decision made by ASIC under s 80 of the NCCP Act, or, equally, to alter the nature of merits review of any other administrative decision to which the provisions of Pt VIIC of the Crimes Act apply. A fortiori where, as in the case of s 80(2), there is not a word to suggest in any of the extrinsic materials, including the Explanatory Memorandum and Second Reading Speech, a parliamentary intent to the effect that the AAT was to exercise a function other than the function exercised by ASIC. In light of such a tenuous implication, it is more probable that Parliament did not have an intention of changing the nature of administrative merits review of ASIC's decisions in the way contended for by the respondent. Comparison against other legislation As against that, the respondent submitted that it is apparent from other Commonwealth legislation pertaining to specialist decision-makers that, where there is a legislative intent to exclude the operation of s 85ZZH of the Crimes Act in respect of a (secondary) decision-maker conducting a merits review, the legislation expressly so provides or specifically precludes the consideration of "spent convictions" as opposed to generally subjecting the decision to the whole of Pt VIIC of the Crimes Act. Reference was made in particular to s 290(2) of the Migration Act 1958 (Cth), which provides in substance that, in considering whether a person is a fit and proper person to be registered as a migration agent, the Migration Agents Registration Authority ("MARA") must take account of any relevant conviction "(except a conviction that is spent under Part VIIC of the Crimes Act 1914)"; to s 513 of the Fair Work Act 2009 (Cth), which provides in substance that, in deciding whether an official is a fit and proper person to be issued with an entry permit, the Fair Work Commission ("the FWC") must take into account any conviction of the person of a relevant criminal offence but that "[d]espite paragraph 85ZZH(c) of the Crimes Act 1914, Division 3 of Part VIIC of that Act applies in relation to the disclosure of information to or by, or the taking into account of information by, the FWC for the purpose of making a decision under this Part"; and to s 120(1)(a) of the Superannuation Industry (Supervision) Act 1993 (Cth) ("the Superannuation Industry Act"), which, so far as is relevant, defines a "disqualified person" in substance as one convicted of an offence in respect of dishonest conduct and provides, in s 120(4), that "Division 3 of Part VIIC of the Crimes Act 1914 does not apply in relation to the disclosure of information about a conviction of the kind mentioned in paragraph (1)(a), if the disclosure is for the purposes of this Part". Nettle (i) The Migration Act 1958 (Cth) Like ASIC, MARA is an original decision-maker. Its decisions under s 290(2) of the Migration Act are subject to merits review by the AAT19. As the respondent contended, the mechanism in s 290(2)(c) of the parenthetical phrase "(except a conviction that is spent under Part VIIC of the Crimes Act 1914)" makes plain that MARA may not take spent convictions into account in making such a decision. Contrary to the respondent's submissions, however, the phrase has nothing, other than indirectly, to do with the AAT. Section 279(2) of the Migration Act, to which the respondent did not refer, provides that Div 3 of Pt VIIC of the Crimes Act applies in relation to MARA "as if it were a Commonwealth authority for the purposes of that Division". One effect of that stipulation is to engage the operation of s 85ZZH(g) of the Crimes Act β that being the only explicit exception applicable to Commonwealth authorities β which provides that Div 3 of Pt VIIC of the Crimes Act does not apply to a Commonwealth authority "for the purpose of assessing appointees or prospective appointees to a designated position". It follows that Div 3 of Pt VIIC applies in relation to the exercise of MARA's function under s 290 of the Migration Act (because that is not a function of assessing appointees or prospective appointees to a designated position) and so precludes MARA's consideration of spent convictions. Conceivably, MARA's decisions are also capable of characterisation as those of "a person" for the purpose of s 85ZZH(d) but, even if that were so, s 279(1)20 would operate to suspend that exception and so again preclude MARA's consideration of spent convictions. What then is the purpose of the express provision in s 290(2)(c) for the exclusion from consideration of spent convictions? Given the complexity of the Migration Act, three possibilities present: the express exclusion of consideration of spent convictions is otiose; the express exclusion of spent convictions is included out of an abundance of caution; or the express exclusion of spent convictions is there for another reason. Of those three, the first is not improbable. In light of the previous structure of the legislation and the timing of amendment21, it is possible that a previous, similar form of words was carried 19 Migration Act 1958 (Cth), s 306. 20 Which provides that "[d]espite paragraph 85ZZH(d) of the Crimes Act 1914, Part VIIC of that Act applies to this Part". 21 Section 290(2) was inserted into the Migration Act 1958 (Cth) in close to its present form by the Migration Legislation Amendment (Migration Agents) Act 1997 (Cth). Section 290(2)(c) was identical to s 290(2)(c) of the present provision. The predecessor provisions to s 290(2) of the Migration Act 1958 (Cth), ss 114T (Footnote continues on next page) Nettle over into its present form without reflecting fully on the effect of s 279. The second possibility is also not improbable, in view of the risk that, in the absence of such an express exclusion, the stipulation in s 279(2) (that Div 3 of Pt VIIC of the Crimes Act applies in relation to MARA "as if it were a Commonwealth authority for the purposes of that Division") might be read as meaning that Div 3 of Pt VIIC applies in relation to MARA in the exercise of its functions under s 290 as if MARA were a Commonwealth authority exercising the function of assessing appointees and prospective appointees. The third possibility is far less likely and while it cannot necessarily be excluded, whatever other reason there might be for the express exclusion it surely cannot be to indicate anything about the function of a tribunal exercising merits review of MARA's decision. The legislation is too complex, and in its material respects far too distinct, to bear meaningfully on the construction of s 80(2) of the NCCP Act. (ii) The Fair Work Act 2009 (Cth) The FWC is not directly comparable to ASIC. It is an original administrative decision-maker for the purposes of s 513 of the Fair Work Act whose decisions are subject to appeal to the Full Bench of the FWC on the application of a person aggrieved or the Minister, and subject to merits review by the Full Bench22. But the FWC is also a tribunal established under a law of the Commonwealth and so, but for the express negation of s 85ZZH(c), s 85ZZH(c) would apply to the FWC. The apparent purpose of the express stipulation in s 513(2) of the Fair Work Act that Div 3 of Pt VIIC of the Crimes Act applies in relation to the FWC for the purpose of making a decision "[d]espite paragraph 85ZZH(c) of the Crimes Act 1914" is, therefore, to limit the otherwise untrammelled generality of the express direction in s 513(1) of the Fair Work Act that the FWC must take into account any conviction of a relevant criminal offence. In effect, the same result is achieved in relation to ASIC's function under s 80(2) of the NCCP Act by the express prohibition in s 80(2) against ASIC having regard to spent convictions without need of reference to s 85ZZH(c) (because s 85ZZH(c) does not apply to ASIC). (iii) The Superannuation Industry (Supervision) Act 1993 (Cth) The Regulator under the Superannuation Industry Act is not directly comparable to ASIC either. The Regulator for relevant purposes is the and 114V(2) (which would later become ss 292 and 294(2)), were inserted by the Migration Amendment Act (No 3) 1992 (Cth). At the time of their insertion, the provisions differed substantially from s 290(2) in its present form. 22 Fair Work Act 2009 (Cth), ss 604(1), 605(1), 607, 613 and 614. Nettle Commissioner of Taxation, whose decisions under relevant provisions of the Superannuation Industry Act are subject to review by the AAT pursuant to s 344(8) of that Act. The apparent purpose of the express stipulation in s 120(4) of the Superannuation Industry Act that Div 3 of Pt VIIC of the Crimes Act does not apply to the disclosure of information to the Commissioner of Taxation for the purposes of Pt 15 of that Act is to prevent Div 3 of Pt VIIC of the Crimes Act otherwise operating according to its terms to prevent the disclosure of spent convictions to the Commissioner. It is not to exclude the operation of s 85ZZH(c), albeit that s 85ZZH(c) is within Pt VIIC, because the Commissioner is not a court or tribunal established under a law of the Commonwealth and so s 85ZZH(c) does not apply to the Commissioner. If s 85ZZH(c) did apply to the Commissioner, there would be no need to exclude the operation of Div 3 of Pt VIIC. By contrast, the purpose of s 80(2) of the NCCP Act is to ensure that Div 3 of Pt VIIC does apply, according to its terms, to ASIC in making a decision under s 80(2). In short, none of the legislative provisions contained in other Acts to which the respondent referred suggests that the absence of an express stipulation that s 85ZZH(c) does not apply to the AAT in the conduct of a merits review of ASIC's decision under s 80(2) of the NCCP Act implies a legislative intention that s 85ZZH(c) applies to the AAT in the exercise of that function. Each of the provisions to which the respondent referred is, like s 80(2) of the NCCP Act, silent as to the AAT in the conduct of merits review of administrative decisions and implies nothing about the application of s 85ZZH(c) of the Crimes Act to the AAT in the exercise of that function. The reasoning in Kocic v Commissioner of Police, NSW Police Force It remains to deal with the Full Court's reliance upon the reasoning of White J in Kocic23. In that matter, s 11(3) of the Firearms Act 1996 (NSW) provided in substance that a firearms licence must not be issued to a person unless the Commissioner of Police was satisfied that the person was a fit and proper person and could be trusted to have possession of firearms without danger to public safety or the peace. Section 12(c)(ii) of the Criminal Records Act 1991 (NSW) provided in substance that a reference to a person's character or fitness was not to be interpreted as permitting or requiring account to be taken of spent convictions. Section 16(1) of the Criminal Records Act provided in effect that s 12 did not apply to proceedings before a "court" (including the giving of evidence) or the making of a decision by a "court". Section 4(1) of the Criminal Records Act defined "court" as including a tribunal. Section 75 of the Firearms 23 (2014) 88 NSWLR 159. Nettle Act permitted a review by the Administrative Decisions Tribunal24 of a refusal by the Commissioner to issue a licence. Section 63 of the Administrative Decisions Tribunal Act 1997 (NSW) provided that, in determining an application for review of a reviewable decision, the Tribunal was to decide what the correct and preferable decision was having regard to the material then before it and could exercise all of the functions that were conferred or imposed by any relevant legislation on the administrator who made the decision. So far as is pertinent for present purposes, the question in Kocic was whether, on review of a decision of the Commissioner of Police not to issue a firearms licence, s 16(1) of the Criminal Records Act permitted the Administrative Decisions Tribunal to have regard the the applicant's spent convictions notwithstanding Commissioner had been prevented from doing so by s 12(c)(ii) of the Criminal Records Act. that Basten JA, with whom Leeming JA agreed25 with additional observations, held26 that it did not. As Basten JA observed27, it presented as "counterintuitive" that an applicant for merits review of an administrative decision should be placed in a more disadvantageous position in relation to spent convictions than when before the original decision-maker. In his Honour's view, such an anomaly was to be avoided by treating the Administrative Decisions Tribunal's functions on review as limited to the functions of the original decision-maker β and therefore to be exercised according to the same legal principles β and by conceiving of s 12(c)(ii) of the Criminal Records Act as setting the legal parameters for the Commissioner's powers β and therefore the powers of the Administrative Decisions Tribunal on review of the Commissioner's decision28. On that basis, his Honour concluded that s 16(1) of the Criminal Records Act was not to be understood as changing "the ground rules, as it were by a side wind, without any clear intention that it should have such an operation", but rather as having no application to a tribunal undertaking merits review of an administrative 24 Now the Civil and Administrative Tribunal. 25 Kocic (2014) 88 NSWLR 159 at 177 [82]. 26 Kocic (2014) 88 NSWLR 159 at 177 [76]. 27 Kocic (2014) 88 NSWLR 159 at 176 [73]. 28 Kocic (2014) 88 NSWLR 159 at 176-177 [75]. 29 Kocic (2014) 88 NSWLR 159 at 177 [76]. Nettle White J, in dissent, reasoned to the contrary30 that the notion that an administrative review tribunal's functions are limited to the functions of the original decision-maker requires qualification. His Honour was of the view that, although the function of an administrative review tribunal undertaking merits review of an administrative decision is frequently spoken of as the tribunal stepping into the shoes of the original decision-maker, it is more accurate to say that the function of the administrative review tribunal is to make the correct decision on the material before it31. His Honour observed that the question before the Administrative Decisions Tribunal was not whether the Commissioner made the correct decision on the material before him but that s 16(1) of the Criminal Records Act permitted the Administrative Decisions Tribunal to have recourse to a wider range of materials than was before the Commissioner32. White J reasoned33 that s 16(1) of the Criminal Records Act did not purport to vary the relevant considerations or "legal parameters" to be taken into account but merely the materials that could be taken into account in deciding whether the applicant was a fit and proper person according to those considerations. His Honour also rejected34 the idea that s 16(1) of the Criminal Records Act as so construed would place an applicant for administrative review in an invidious position. In his Honour's view35, since spent convictions could be taken into account only if an applicant sought review of the Commissioner's refusal to issue a licence, the risk of revelation of a non-disclosed history could not worsen the applicant's position by reason of the Administrative Decisions Tribunal taking into account the history of those spent convictions because the applicant was already in the position of the Commissioner having decided to refuse the licence. The reasoning of Basten and Leeming JJA is to be preferred. Under s 11(3) of the Firearms Act, the Commissioner's function was not simply to decide whether an applicant was a fit and proper person but to decide whether the applicant was a fit and proper person having regard to a restricted range of identified considerations which, by reason of s 12(c)(ii) of the Criminal Records Act, expressly excluded spent convictions. Contrary to White J's analysis, the 30 Kocic (2014) 88 NSWLR 159 at 188 [132]. 31 Kocic (2014) 88 NSWLR 159 at 187 [128]. 32 Kocic (2014) 88 NSWLR 159 at 187 [128]. 33 Kocic (2014) 88 NSWLR 159 at 188 [134], 189 [140]. 34 Kocic (2014) 88 NSWLR 159 at 189 [136]. 35 Kocic (2014) 88 NSWLR 159 at 189 [136]. Nettle function of deciding whether a person is a fit and proper person according to a restricted range of considerations is a different function from deciding whether that person is a fit and proper person having regard to a less restricted and thus more expansive range of considerations. If s 16(1) of the Criminal Records Act had applied to the Administrative Decisions Tribunal in the conduct of its merits review of the Commissioner's decision, it would have meant that the Administrative Decisions Tribunal was required to decide whether the applicant was a fit and proper person having regard to a less restricted and, therefore, different range of considerations from those to which the Commissioner was permitted to have regard. That would have meant that the Administrative Decisions Tribunal would have been required to discharge a different function from the Commissioner. Evidence of spent convictions could not be regarded as events occurring between the time of the Commissioner's decision and the time of review, to which the Commissioner could have had regard if they had existed at the time of the Commissioner's decision. The fact that they were spent convictions dictated that they occurred long before the Commissioner's decision was made. They were excluded considerations. And, as Basten JA concluded36, the notion of an administrative review tribunal undertaking merits review of an administrative decision by reference to different considerations from those which the original decision-maker is required to take into account or prohibited from taking the administrative decision-maker, is such a substantial departure from established conceptions of administrative decision merits review that it would require a clearly expressed legislative intent to achieve that result. It followed, as his Honour held, that given that there was no such clearly expressed contrary legislative intent, s 16(1) of the Criminal Records Act was not to be interpreted as applicable to the Administrative Decisions Tribunal in conducting its merits review of the Commissioner's decision. into account, and so exercising a different function from The majority's reasoning in Kocic fortifies the conclusion earlier expressed in these reasons that upon its proper construction s 80(2) of the NCCP Act does not make s 85ZZH(c) of the Crimes Act applicable to the AAT in the review of a decision of ASIC under s 80(1) of the NCCP Act. To adopt and adapt Basten JA's words, it is not to be supposed that Parliament intended to make such a profound change to the nature of merits review by a legislative side-wind. The better view is that s 80(2) does not have that effect. 36 Kocic (2014) 88 NSWLR 159 at 177 [76]. Nettle Conclusion In the result, the appeal should be allowed and orders made in the terms proposed by Bell, Gageler, Gordon and Edelman JJ. Bell BELL, GAGELER, GORDON AND EDELMAN JJ. The question in this appeal is whether a conviction that is spent within the meaning of Pt VIIC of the Crimes Act 1914 (Cth), and which for that reason cannot be taken into the Australian Securities and Investments Commission consideration by ("ASIC") in deciding to make a banning order against a person on the basis that the person is not a fit and proper person to engage in credit activities under the National Consumer Credit Protection Act 2009 (Cth) ("the Credit Protection Act"), can be taken into consideration by the Administrative Appeals Tribunal ("the AAT") on a review of the decision of ASIC under the Administrative Appeals Tribunal Act 1975 (Cth) ("the AAT Act"). The answer is that it cannot. Legislative context Inserted in 198937, Pt VIIC of the Crimes Act is designed "to give people a chance to live down a minor criminal conviction"38. It applies to convictions of offences against Commonwealth, State and Territory laws as well as to convictions of offences against foreign laws39. For the purpose of Pt VIIC, a person is taken to have been convicted of an offence not only if the person has been convicted of the offence, but also if the person has been charged with and found guilty of the offence but discharged without conviction or if the person has not been found guilty of the offence but a court has taken it into account in passing sentence on the person for another offence40. The conviction is taken to be spent if the person has been granted a pardon for a reason other than that the person was wrongly convicted of the offence41. The conviction is also taken to be spent if the person was not sentenced to imprisonment for the offence or if the person was sentenced to imprisonment for the offence for no more than 30 months, provided that in each of those cases a waiting period for the offence has ended42. In the ordinary case 37 Section 10 of the Crimes Legislation Amendment Act 1989 (Cth). 38 Australia, House of Representatives, Parliamentary Debates (Hansard), 11 May 39 See s 85ZV of the Crimes Act. 40 Section 85ZM(1) of the Crimes Act. 41 Section 85ZM(2)(a) of the Crimes Act. 42 Section 85ZM(2)(b) of the Crimes Act. Bell of a person who was tried and convicted as an adult, the waiting period is the period of ten years beginning on the day on which the person was convicted of the offence43. the offence Division 3 of Pt VIIC has the relevant effect that, subject to Div 6 of Pt VIIC and despite any other Commonwealth law, a person whose conviction is spent is not required to disclose the fact that the person has been charged with or to any Commonwealth authority44, and a convicted of Commonwealth authority which knows or could reasonably be expected to know that the person is not required to make that disclosure is prohibited from taking account of the fact that the person was charged with or convicted of the offence45. A Commonwealth authority, for the purpose of Pt VIIC, includes "a body (whether incorporated or not), or a tribunal, established or appointed for a public purpose by or under a Commonwealth law"46, and on that basis includes both ASIC and the AAT. Within Div 6 of Pt VIIC, s 85ZZH(c) provides: "Division 3 does not apply in relation to the disclosure of information to or by, or the taking into account of information by a person or body referred to in one of the following paragraphs for the purpose specified in relation to the person or body: a court or tribunal established under a Commonwealth law, a State law or a Territory law, for the purpose of making a decision, including a decision in relation to sentencing". Chapter 2 of the Credit Protection Act sets out a scheme for the licensing of persons to engage in credit activities. Within Ch 2, Div 2 of Pt 2-4 provides for the making of banning orders prohibiting persons from engaging in credit activities. Section 80(1) provides that ASIC may make a banning order against a person in specified circumstances. Those circumstances include if ASIC has 43 Section 85ZL of the Crimes Act (definition of "waiting period"). 44 Section 85ZV(1) and (2) of the Crimes Act. 45 Section 85ZW(b)(ii) of the Crimes Act. 46 Section 85ZL of the Crimes Act (definition of "Commonwealth authority"). Bell reason to believe that the person is likely to contravene any credit legislation or be involved in a contravention of a provision of any credit legislation by another person (para (e)). They also include if ASIC has reason to believe that the person is not a fit and proper person to engage in credit activities (para (f)). Section 80(2) goes on relevantly to provide: "For the purposes of paragraphs (1)(e) and (f), ASIC must (subject to Part VIIC of the Crimes Act 1914) have regard to the following: any criminal conviction of the person, within 10 years before the banning order is proposed to be made; any other matter ASIC considers relevant; Note: Part VIIC of the Crimes Act 1914 includes provisions that, in certain circumstances, relieve persons from the requirement to disclose spent convictions and require persons aware of such convictions to disregard them." Section 327(1) of the Credit Protection Act makes general provision for an application to be made to the AAT for review of a decision made by ASIC under the Credit Protection Act. That general provision encompasses an application for review of a decision made by ASIC under s 80. By force of s 25(4) of the AAT Act, the AAT has power to review any decision in respect of which an application is made to it under any Commonwealth Act. Section 43(1) of the AAT Act provides that "[f]or the purpose of reviewing a decision, the Tribunal may exercise all the powers and discretions that are conferred by any relevant enactment on the person who made the decision and shall make a decision in writing". The decision of the AAT can be one affirming the decision under review, varying the decision under review, or setting aside the decision under review and either making a decision in substitution for it or remitting the matter for reconsideration in accordance with any directions or recommendations of the AAT. Section 43(6) has the effect that the decision under review as varied by the AAT, or a decision made by the AAT in substitution for the decision under review, is for all purposes (other than the purposes of applications to the AAT for review or of appeals to the Federal Court of Australia in accordance with s 44 of the AAT Act) deemed to be a decision of the primary decision-maker. Bell Factual context and litigious history In 2014, a delegate of ASIC made a banning order against Mr Frugtniet under s 80 of the Credit Protection Act. The delegate made the order having found in terms of s 80(1)(f) that ASIC had reason to believe that Mr Frugtniet was not a fit and proper person to engage in credit activities. Mr Frugtniet applied to the AAT for a review of the delegate's decision. Finding on the material before it that it had reason to believe that Mr Frugtniet was not a fit and proper person to engage in credit activities, the AAT in 2015 made a decision to affirm the decision of the delegate. In reaching that decision, the AAT took into consideration matters of history, two of which involved spent convictions within the meaning of Pt VIIC of the Crimes Act. One was that Mr Frugtniet had in 1978 been convicted in the United Kingdom on numerous counts of handling stolen goods, forgery, obtaining property by deception and theft, in respect of which he had been sentenced to a term of imprisonment and served two years. The other was that Mr Frugtniet had in 1997 been found guilty in the Broadmeadows Magistrates' Court of obtaining property by deception in relation to the issue of airline tickets, in respect of which he had been fined without a conviction being recorded. Mr Frugtniet appealed from the decision of the AAT to the Federal Court in accordance with s 44 of the AAT Act on grounds, amongst others, that the AAT had erred in law in taking the spent convictions into consideration. Mr Frugtniet's appeal to the Federal Court was dismissed at first instance by Bromberg J47, whose judgment was upheld on Mr Frugtniet's subsequent appeal under s 24 of the Federal Court of Australia Act 1976 (Cth) by a Full Court comprised of Reeves, Farrell and Gleeson JJ48. Both Bromberg J and the Full Court framed the relevant question of law in terms of whether s 85ZZH(c) of the Crimes Act operated to preclude the AAT from taking spent convictions into consideration in reviewing the decision of ASIC, and both answered that question in the negative49. Fortified by dissenting 47 Frugtniet v Australian Securities and Investments Commission (2016) 70 AAR 48 Frugtniet v Australian Securities and Investments Commission (2017) 255 FCR 96. 49 Frugtniet v Australian Securities and Investments Commission (2016) 70 AAR 153 at 171-172 [73]-[76]; Frugtniet v Australian Securities and Investments Commission (2017) 255 FCR 96 at 115 [89]. Bell reasons for judgment in the New South Wales Court of Appeal50 in relation to the operation of an equivalent provision in New South Wales legislation51, the Full Court concluded that s 85ZZH(c) of the Crimes Act entitled the AAT to take into consideration material which ASIC was prevented from taking into consideration by Div 3 of Pt VIIC52. On Mr Frugtniet's appeal by special leave to this Court from the judgment of the Full Court, ASIC seeks support for the Full Court's conclusion in the parenthetical language in the chapeau to s 80(2) of the Credit Protection Act. ASIC argues that, by subordinating the considerations to be taken into account for the purposes of s 80(1)(e) and (f) of the Credit Protection Act to Pt VIIC of the Crimes Act, the parenthetical language acknowledges that the effect of s 85ZZH(c) is that Pt VIIC of the Crimes Act has a differential operation between ASIC as the primary decision-maker and the AAT conducting a review. ASIC and the AAT are both permitted by s 80(2)(d) of the Credit Protection Act to take into account any matter they consider relevant, so the argument goes, but only ASIC is constrained by Pt VIIC of the Crimes Act to leave out of account a conviction that is spent within the meaning of that Part. The jurisdiction of the AAT Neither the Full Court's construction of s 85ZZH(c) of the Crimes Act nor ASIC's construction of the parenthetical language in the chapeau to s 80(2) of the Credit Protection Act can be sustained. Section 80 of the Credit Protection Act is directed solely to the power of ASIC to make a banning order. The parenthetical language in the chapeau to s 80(2) must be read in that context. That language, together with the note to s 80(2), acknowledges that the decision-making power of ASIC is constrained by Pt VIIC of the Crimes Act. The parenthetical language says nothing of the decision-making power of the AAT. Section 85ZZH(c) of the Crimes Act says nothing more of present relevance than that Div 3 of Pt VIIC of the Crimes Act has no application to a 50 Kocic v Commissioner of Police, NSW Police Force (2014) 88 NSWLR 159 at 51 Section 16 of the Criminal Records Act 1991 (NSW). 52 Frugtniet v Australian Securities and Investments Commission (2017) 255 FCR 96 Bell tribunal established by statute taking information into account for the purpose of making a decision. The operation of s 85ZZH(c) does not go beyond non- application of Div 3 of Pt VIIC. Section 85ZZH(c) does nothing to alter the statutory jurisdiction of the tribunal. In particular, it does not make a spent conviction relevant to be taken into account in the exercise of that jurisdiction. Understood in this sense, the apparent conflict between s 85ZZH(c) and the AAT's review jurisdiction falls away. The jurisdiction of the AAT, on a review under s 327 of the Credit Protection Act of a decision made by ASIC under s 80 of the Credit Protection Act, is unaffected by s 85ZZH(c) of the Crimes Act. That is because, except where altered by some other statute, which has not occurred here, the jurisdiction conferred on the AAT by ss 25 and 43 of the AAT Act, where application is made to it under an enactment, is to stand in the shoes of the decision-maker whose decision is under review so as to determine for itself on the material before it the decision which can, and which it considers should, be made in the exercise of the power or powers conferred on the primary decision-maker for the purpose of making the decision under review53. The AAT exercises the same power or powers as the primary decision-maker, subject to the same constraints. The primary decision, and the statutory question it answers, marks the boundaries of the AAT's review. The AAT must address the same question the primary decision-maker was required to address, and the question raised by statute for decision by the primary decision-maker determines the considerations that must or must not be taken into account by the AAT in reviewing that decision54. A consideration which the primary decision-maker must take into account in the exercise of statutory power to make the decision under review must be taken into account by the AAT. Conversely, a consideration which the primary decision-maker must not take into account must not be taken into account by the AAT. To accept the argument put forward by ASIC would distort exercise of the powers conferred on the AAT by s 43(1) of the AAT Act for the purpose of reviewing a decision of ASIC under s 80 of the Credit Protection Act: where spent convictions were a relevant factor in the AAT's determination, the AAT could not sensibly remit the matter to ASIC for reconsideration in accordance 53 Shi v Migration Agents Registration Authority (2008) 235 CLR 286 at 299 [40], 315 [100], 324-325 [134]; [2008] HCA 31. 54 Shi v Migration Agents Registration Authority (2008) 235 CLR 286 at 327 [142]. Bell with any directions or recommendations of the AAT because ASIC would then be required to ignore the spent convictions; and any decision by the AAT varying or in substitution of ASIC's decision would be deemed by s 43(6) to be a decision of ASIC, even if that varied or substituted decision took into account spent convictions which ASIC was required to ignore. The AAT and the primary decision-maker exist within an administrative continuum55. The AAT has no jurisdiction to make a decision on the material before it taking into account a consideration which could not have been taken into account by the primary decision-maker in making the decision under review and which could not be taken into account by the primary decision-maker were the AAT to remit the matter to the primary decision-maker for reconsideration. The decision-making power of ASIC under s 80 of the Credit Protection Act is constrained by Pt VIIC of the Crimes Act to preclude ASIC taking spent convictions into account. The decision-making power of the AAT is subject to the same constraint in the exercise of the jurisdiction conferred on it by s 327 of the Credit Protection Act and ss 25 and 43 of the AAT Act. Orders The appeal must be allowed. Orders 2 and 3 of the orders made by the Full Court of the Federal Court on 12 October 2017 must be set aside. In place of those orders, it is to be ordered that the appeal to that Court be allowed and that order 1 made by Bromberg J on 22 August 2016 and the order made by Bromberg J on 15 September 2016 be set aside. In place of the orders made by Bromberg J, it is to be ordered that the decision made by the AAT on 6 March 2015 be set aside and the matter remitted to the AAT for reconsideration in accordance with law. ASIC must pay the costs of Mr Frugtniet in this Court. 55 Shi v Migration Agents Registration Authority (2008) 235 CLR 286 at 300-301 [45], quoting Jebb v Repatriation Commission (1988) 80 ALR 329 at 333-334. |
HIGH COURT OF AUSTRALIA DIRECTOR OF PUBLIC PROSECUTIONS FOR VICTORIA AND PHAN THI LE APPELLANT RESPONDENT Director of Public Prosecutions for Victoria v Le [2007] HCA 52 14 November 2007 ORDER Appeal allowed in respect of grounds (1)-(3) and dismissed in relation to grounds (4)-(7). Set aside Order 1 of the orders made by the Court of Appeal of the Supreme Court of Victoria on 15 February 2007 and, in its place, order that: the appeal be allowed; (b) Order 1 of the orders made by Judge Campbell on 31 March 2006 be varied as follows: Order that the interest as joint proprietor of Phan Thi Le in the property situated at 10/28-30 Ridley Street, Sunshine and more particularly described in Certificate of Title Volume 9604 Folio 908 be excluded from the automatic forfeiture pursuant to s 52(1)(a) of the Confiscation Act 1997; and (ii) Declare that the nature of the interest of Phan Thi Le in the property is that of tenant in common as to a one-half share. The appellant to pay the respondent's costs of the appeal to this Court. On appeal from the Supreme Court of Victoria Representation D F Jackson QC with N J O'Bryan SC for the appellant (instructed by Solicitor for Public Prosecutions) D Grace QC with D C Hallowes and M K Moshinsky for the respondent (instructed by Melinda Walker & Co) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Director of Public Prosecutions for Victoria v Le Criminal Law β Confiscation of Property β Exclusion order β Husband was sole registered proprietor of an apartment ("the property") which was the matrimonial home β Husband charged with trafficking in drug of dependence β Husband subsequently transferred the property to himself and his wife ("the respondent") as joint registered proprietors for consideration of "natural love and affection" β Director of Public Prosecutions for Victoria obtained a restraining order over the property pursuant to the Confiscation Act 1997 (Vic) ("the Act") for the purpose of automatic forfeiture upon conviction β Husband convicted β Respondent applied, pursuant to s 51 of the Act, for exclusion of the property from automatic forfeiture β Whether whole of the property, or only the respondent's joint interest in the property, could be excluded from forfeiture on the satisfaction of certain conditions β Whether respondent satisfied the condition in s 52(1)(a)(iii) of the Act that the circumstances in which she acquired her interest in the property were "such as not to arouse a reasonable suspicion that the property was tainted property" β Whether "reasonable suspicion" to be tested wholly objectively β Whether "natural love and affection" constituted "sufficient consideration" within the meaning of s 52(1)(a)(v) of the Act. Words and phrases β "good consideration", "interest", "natural love and affection", "property", "property in which the applicant claims an interest", "reasonable suspicion", "sufficient consideration", "valuable consideration". Confiscation Act 1997 (Vic), ss 51, 52(1), 52(2). GLEESON CJ. I have had the advantage of reading in draft form the joint reasons for judgment of Kirby and Crennan JJ. I agree with the orders proposed in those reasons. As to the first and third issues with which they deal (the scope of orders excluding property from forfeiture, and the matter of reasonable suspicion), I agree with what their Honours have said and have nothing to add. As to the second issue (sufficient consideration), I would add the following, and make particular reference to the factual basis on which the primary judge and all three members of the Court of Appeal decided the question. The relevant part of the evidence as to the motivation for the transfer, to the respondent, of an interest (as joint tenant) in the matrimonial home was laconic, and barely tested in cross-examination. The respondent was entirely dependent upon her husband. She said that she asked to be made a part owner of the matrimonial home because, if anything happened to her husband, she would have had nowhere to live and believed the property would pass to his children by a former marriage. The primary judge concluded: "Whilst natural love and affection may not be sufficient to justify a commercial contract between people at arm[']s length, it is a common 'consideration' in respect to the alteration of property interests between husband and wife, as is the case here. In any event, it would seem to me to be arguable that what Le was doing in transferring a moiety of his interest in the property was no more than fulfilling a matrimonial obligation. The implication that Mr Le did effect the transfer to avoid the consequences of his wrongdoing rests upon supposition, which supposition might have been more attractive had he sought to transfer the whole of his interest in the property to the Applicant. I am satisfied, in the circumstances, that the Applicant, as his wife, acquired her interests in the property for a sufficient consideration." All three members of the Court of Appeal upheld that conclusion. Maxwell P and Chernov JA, with whom Neave JA agreed on this point, said that "sufficient consideration" included both valuable consideration and good consideration, but added, in a footnote, that it did not encompass nominal consideration. They concluded that "[i]n the circumstances of this case as found by his Honour, 'sufficient love and affection' consideration'". ... constituted 'natural that natural Both the primary judge and the Court of Appeal were careful to relate their conclusion love and affection constituted sufficient consideration to the circumstances of this case. Maxwell P and Chernov JA quoted the passage in the reasoning of the primary judge set out above. The "matrimonial obligation" of Mr Le to the respondent was an important part of the circumstances. There was no detailed investigation of the extent of Mr Le's matrimonial obligations to the respondent. The primary judge, however, recorded a general impression that, in making the respondent a joint tenant, Mr Le was doing no more than fulfilling his obligations. The judge did not go beyond that, presumably because the issue was not the subject of more precise evidence or argument. I do not take the primary judge or the Court of Appeal to have accepted that a transfer of an interest in property in consideration of natural love and affection would always satisfy the requirements of s 52(1)(a)(v) of the Confiscation Act 1997 (Vic); and I would not accept that. There are circumstances in which a transfer in consideration of natural love and affection might reflect no legal or equitable obligation, matrimonial or otherwise. Such a consideration might move a transfer from one wealthy spouse to another who was even wealthier; or from a parent to a financially independent child. A transfer of property in consideration of natural love and affection may be "founded in motives of generosity, prudence, and natural duty"1. Goodwill or generosity towards persons in a certain class may form the basis of what the law regards as good consideration; obligation does not necessarily come into it. In the context of the Confiscation Act and, in particular, s 52, relating the meaning of "sufficient consideration", without further statutory definition, to concepts of "valuable" and "good" consideration as they apply to conveyancing or contract law is not easy. It is common ground that it does not include nominal consideration; yet to restrict it to commercial transactions supported by payment in money or money's worth goes beyond what is required by the legislative text and purpose. On the other hand, it is easy to imagine examples of transfers to near relatives2 which are motivated purely by goodwill or generosity, and reflect no form of obligation. A transfer in consideration of natural love and affection may be for sufficient consideration within the meaning of the Act where it reflects a legal or equitable obligation of the transferor to the transferee. Such an obligation may arise out of a matrimonial relationship, and commonly does so. It is not necessary that it be capable of precise measurement, or that there be a search for exact equivalence between the obligation and the value of the interest transferred. A substantial parity will suffice. It is unnecessary to decide the issue that would arise in a case of a transfer for money or money's worth, but at a substantial undervalue. In the circumstances of the present case, the consideration was sufficient. 1 Blackstone, Commentaries on the Laws of England, 18th ed (1829), vol 2 at 297. 2 The expression "near relatives" is sometimes used to describe the class of persons covered by "good consideration", eg Vaizey on Settlements, (1887), vol 1 at 66; Gibson's Conveyancing, 20th ed (1970) at 198. GUMMOW AND HAYNE JJ. This appeal concerns the transfer to the respondent, Phan Thi Le ("Mrs Le"), by her husband, Roy Le ("Mr Le"), of a half share of his interest in an apartment in the Melbourne suburb of Sunshine, and the consequences for that transfer of the Confiscation Act 1997 (Vic) ("the Act"). While this appeal concerns the meaning of several familiar terms of property and conveyancing law, its resolution does not depend on any abstract consideration of the meaning of "property" or "interests" therein. The resolution of the appeal turns instead on the proper interpretation of s 52 of the Act and the extent of the exclusion from automatic forfeiture effected by that section. However, an understanding of that section must be found in an understanding of an operation of the Act as a whole. The transfer to Mrs Le On 23 June 2003, Mr Le was charged with several offences, including trafficking in not less than a commercial quantity of a drug of dependence. He pleaded guilty and was convicted on 1 February 2005, and was sentenced on 18 February to a term of imprisonment for four years with a two year non-parole period. Until 29 August 2003 and pursuant to the Transfer of Land Act 1958 (Vic), Mr Le was the sole registered proprietor of the apartment in the suburb of Sunshine3, which was the matrimonial home. On that date, Mrs Le was registered as joint proprietor of the apartment. The property was subject to a registered mortgage, and the mortgagee consented to the transfer. Mr Le had conveyed the fee simple to Mrs Le and himself as joint tenants, for a consideration stated in the transfer to be "natural love and affection". Mrs Le explained that she "did not pay any money to my husband for the transfer because I am his wife". Something should be said at the outset respecting the significance of that matrimonial relationship for the issues of construction of the Act upon which the appeal turns. The position at general law, as it stood after the enactment of the Married Women's Property Act 1882 (UK) and cognate legislation elsewhere, 3 The Land Description in Certificate of Title Vol 09604 Folio 908 was "[u]nit 10 on Strata Plan 021815G and an undivided share in the common property for the time being described on the plan". was explained by Lord Wilberforce in National Provincial Bank Ltd v Ainsworth4. His Lordship concluded5: "The wife has no specific right against her husband to be provided with any particular house, nor to remain in any particular house. She has a right to cohabitation and support β¦ [But] the wife's rights, as regards the occupation of her husband's property, are essentially of a personal kind β¦ Before a right or an interest can be admitted into the category of property, or of a right affecting property, it must be definable, identifiable by third parties, capable in its nature of assumption by third parties, and have some degree of permanence or stability. The wife's right has none of these qualities, it is characterised by the reverse of them." (It was not suggested that any other statute was the source of any relevant obligation on Mr Le to create the joint tenancy.) Accordingly, the change in the title to the Sunshine property whereby Mr and Mrs Le became joint tenants was not made in discharge of any matrimonial obligation imposed by law upon Mr Le to create a proprietary interest in favour of his wife. The restraining order After the transfer to Mrs Le and before Mr Le's conviction, the appellant Director of Public Prosecutions ("the DPP") applied pursuant to s 16(2) of the Act to the County Court for a restraining order. That sub-section provides: "The DPP or a prescribed person, or a person belonging to a prescribed class of persons, may apply, without notice, to the Supreme Court or the County Court for a restraining order in respect of property ifβ a person has been charged with a Schedule 2 offence and that person has an interest in the property or the property is tainted property in relation to that offence." The apartment was "tainted property" within the meaning of s 3 of the Act as it was property that "was used β¦ in, or in connection with, the commission of [1965] AC 1175 at 1247-1248. See also the reasons of Mason J in R v Toohey; Ex parte Meneling Station Pty Ltd (1982) 158 CLR 327 at 342. the offence", namely Mr Le's use of it for the storage and preparation of heroin for sale. The property was also "property in which the defendant has an interest" within the meaning of s 10. The effect of a restraining order is explained in s 14(1): "A restraining order is an order that no property or interest in property, that is property or an interest to which the order applies, is to be disposed of, or otherwise dealt with by any person except in the manner and circumstances (if any) specified in the order." What, then, was the property or an interest to which the order applied? So much must be determined from the order itself. The restraining order made by Judge Fagan on 18 September 2003 relevantly specified the property by its street address in Sunshine, and by reference to the identified Certificate of Title. The description of the relevant property in those terms made it clear that the restraint was sought with respect to the property as a whole, and not with respect to any particular interest therein. It may be added that the forfeiture of the property as "tainted property" served to emphasise that the property was being spoken of in the physical sense, as it would be rather artificial to speak of the "use" of an "interest" in property in the commission of an offence. The order could have been, but was not, made with respect to Mr Le's interest alone, and the reason for not doing so is plain. As Philippides J noted in Commonwealth Director of Public Prosecutions v Hart6: "If a restraining order were not to extend to all interests in the property specified in the order, it could be rendered nugatory by the simple expedient of disposing of or otherwise dealing with the equitable interests in the property." For like reasons, the offence in s 29 of the Act of knowingly contravening a restraining order is committed by "disposing of, or otherwise dealing with, an interest in property to which the order applies"; not merely by disposing of the property itself. Section 16(2) makes it clear that "property" can be restrained β and eventually forfeited β on the basis of the defendant's "interest" therein, or on the basis of the property's status as "tainted property". There is therefore no requirement that the defendant's "interest" equate to the entirety of ownership of that property. Plainly, others may have an interest in the restrained property in [2007] QCA 184 at [45]. addition to the defendant whose crime rendered the property "tainted property", or whose interest in the property enlivened the jurisdiction of the court to make the restraining order. So much is recognised by s 19A(1) of the Act which provides that: "a member of the police force must give a notice to each person who the applicant for the restraining order believes has an interest in that property requiring the person to give to the member of the police force a written declaration of property interests". The required content of such a declaration of property interests is set out in s 19B. The order made by Judge Fagan specified that the purpose for which the order was made included automatic forfeiture pursuant to Div 2 of Pt 3 of the Act. That statement of purpose was required by s 15(3), which specifies that: "If a court makes a restraining order in respect of property or an interest in propertyβ the court must state in the order the purpose for which the property or interest is restrained; and if the court excludes property or an interest in property from the order in respect of a purpose, the court must state in the order whether the property or interest remains restrained for any other purpose and, if so, state that other purpose." In the present case, the purpose was automatic forfeiture, and no property or interest was excluded. The forfeiture of the property The property being thus restrained, the effect of s 35 of the Act was that the "restrained property", and not merely the defendant's interest therein, was forfeited to the Minister on the expiry of 60 days after Mr Le's conviction. The effect of that forfeiture is set out in s 41(2) of the Act: "the property vests in the Minister subject to every mortgage, charge or encumbrance to which it was subject immediately before the order was made or the automatic forfeiture occurred (as the case may be) and toβ in the case of land, every interest registered, notified or saved under the Transfer of Land Act 1958 or the Property Law Act 1958". After the transfer to her, Mrs Le was joint registered proprietor of the land, and s 41(2)(c) might be thought to preserve her registered interest. However, sub-s (3) goes on to state that: "If registrable property is forfeited to the Minister under a forfeiture order or a civil forfeiture order or by automatic forfeiture under section 35β the property vests in equity in the Minister but does not vest in the Minister at law until the applicable registration requirements have been complied with; and the Minister is entitled to be registered as owner of the property; and the Minister or a prescribed person authorised by the Minister for the purposes of this sub-section has power to do, or to authorise the the doing of, anything necessary or convenient registration of the Minister as owner, including but not limited to, the execution of any instrument required to be executed by a person transferring an interest in property of that kind." to obtain It may be that the registration of the Minister "as owner" in s 41(3)(b) β that is, as registered proprietor of the fee simple β is apt to exclude Mrs Le's "ownership" as joint registered proprietor. By contrast, the preservation of registered interests not amounting to "ownership", such as the registered mortgage in the present case, might not be inconsistent with the status of the Minister as "owner". However, in light of the preferable construction of s 52, discussed below, it is unnecessary to reach a concluded view on these matters. The significant point for present purposes is that s 41 prescribes the vesting of the property itself and not merely the defendant's interest therein, subject to the automatic preservation of certain specified interests which in the present case would include the registered mortgage. Those interests which are not preserved are also forfeited, subject to the ability of such an interest-holder to apply to "buy back" their interest from the Minister pursuant to s 56 of the Act. The application for exclusion from forfeiture Because of an apparent miscalculation of time by her solicitor, Mrs Le was unable to make an application pursuant to s 20 of the Act for an order pursuant to s 22(b) that the property be excluded from the restraining order before any forfeiture was effected. The property having been forfeited, Mrs Le made an application to the County Court pursuant to s 51(1) for an order under s 52 "excluding property in which the applicant claims an interest from the operation of section 35". Because of the miscalculation, she also required, and was granted pursuant to s 51(3), an extension of time in which to make that application. The primary judge (Judge Campbell) and the majority of the Court of Appeal (Maxwell P and Chernov JA; Neave JA dissenting)7 held that an order under s 52 had the effect of excluding from forfeiture all of the property in which the applicant claimed an interest, and not merely the interest itself. Judge Campbell made an exclusion order to that effect on 31 March 2006, and that determination was affirmed on appeal on 15 February 2007. In grounds 1, 2 and 3 in its Notice of Appeal to this Court, the DPP contends that the majority of the Court of Appeal erred, and that the exclusion from forfeiture operated with respect to the applicant's interest in property, not the property as a whole. Mrs Le submits the converse. For the reasons that follow, her submissions are to be preferred on this point. What was to be excluded from forfeiture? One must return to the statutory text. The relevant terms of s 51(1) of the Act are: "If property is forfeited to the Minister under section 35, a person (other than the defendant) who claims to have had an interest in the property immediately before it was forfeited may β¦ apply to the court that made the relevant restraining order for an order under section 52." (emphasis added) Section 52 should next be set out. "52 Determination of exclusion applicationβautomatic forfeiture (1) On an application made under section 51, the court may make an order excluding property in which the applicant claims an interest from the operation of section 35β if the court is not satisfied that the property in which the applicant claims an interest is not tainted property but is satisfied thatβ the applicant was not, in any way, involved in the commission of the Schedule 2 offence; and (ii) where the applicant acquired the interest before the commission of the Schedule 2 offence, the applicant did not know that the defendant would use, or intended to use, the property in, or in connection with, the commission of the Schedule 2 offence; and (iii) where the applicant acquired the interest at the time of or after the commission of the Schedule 2 offence, the applicant acquired the interest without knowing, and in circumstances such as not to arouse a reasonable suspicion, that the property was tainted property; and the applicant's interest in the property is not subject to the effective control of the defendant; and (v) where the applicant acquired the interest from the defendant, directly or indirectly, that it was acquired for sufficient consideration; or if the court is satisfied that the property is not tainted property and thatβ the applicant's interest in the property is not subject to the effective control of the defendant; and (ii) where the applicant acquired the interest from the defendant, directly or indirectly, that it was acquired for sufficient consideration. If the court makes an order under sub-section (1), the court may also make an order declaring the nature, extent and value of the applicant's interest in the property." (emphasis added) Both ss 51 and 52 therefore explicitly direct attention to the property which has been forfeited to the Minister pursuant to s 35, as it is that property which is retrospectively excluded from forfeiture. In the present case, the property to be forfeited pursuant to s 35 was that specified in the order of Judge Fagan, namely the apartment itself. Mrs Le's interest, which gave her standing to make the s 51 application, was her interest as joint registered proprietor of that property. However, it is the property, not the interest, that is excluded from forfeiture. Maxwell P and Chernov JA correctly observed8: (2007) 15 VR 352 at 365. "the property which is automatically forfeited to the minister is the same property as has been made the subject of the relevant restraining order, and it is equally apparent that it is that property which is to be the subject of any exclusion order, whether made before the property is automatically forfeited or after forfeiture. When ss 22 and 52 of the Act speak respectively of excluding 'the property', or 'property', from the operation of the restraining order or the operation of s 35, they are referring to the property the subject of the restraining order or the automatic forfeiture, as the case may be. In either situation, it is that property which is to be 'saved' from automatic forfeiture. A restraining order can, of course, be made in respect of an interest in property. That follows from the definition of 'property' in s 3. But once the restraining order has been made, that interest is 'the property' to which the later provisions of the Act apply." The difficulty with the construction adopted by Neave JA is that it does not recognise that the property excluded by s 52 from the operation of s 35 is that property previously specified in the restraining order. Where, as here, that order specifies particular property, it is not to the point that the definitional provisions in s 3 might have permitted the restraint of some lesser interest. Conversely, if the order restrains only an interest in property, then only that interest will be excluded by s 52. Either way, the extent of the exclusion is determined not by the definitions of "property" or "interest" in the abstract, but rather by the content of the particular restraining order. Section 55 deals with the return of property by the Minister. When that section speaks of a court making an exclusion order "in respect of an interest in property", this must be understood in light of what was the power of the court to have made a restraining order in respect of such an interest, rather than in respect of the property as a whole. Contrary to the DPP's submissions, there is thus no inconsistency between s 55 and the construction of s 52 favoured by the majority of the Court of Appeal. The legislature could have framed s 52 so as to enable a court to make an order excluding the applicant's interest in property from the operation of s 35. It did not do so9, despite the apparent tenor of the explanatory memorandum, and the plain and unambiguous words of the statute must prevail10. As has been set out above, the Act repeatedly recognises that people other than the defendant 9 Section 52 has since been amended by the Confiscation Amendment Act 2007 (Vic) to enable the court to make an "order excluding the applicant's interest in property from the operation of section 35". (emphasis added) 10 cf Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 518. may have "interests" in the property that is subject to the restraining order and eventual forfeiture. It is thus hardly surprising that s 52 draws a consistent distinction between the forfeited property and the applicant's interest therein. So much can be seen in the nine occasions in which the distinction is drawn in the section itself, namely in the first clause of sub-s (1), in par (a), in sub-pars (ii)- (v), in par (b) sub-pars (i) and (ii), and in sub-s (2), which have been emphasised in the setting out of s 52 earlier in these reasons. In addition, the power conferred in sub-s (2) to declare the "nature, extent and value of the applicant's interest in the property" would be meaningless and redundant if the exclusion brought about by sub-s (1) only operated with respect to that interest; such an order made under that sub-section would in itself require a statement of the nature of the interest claimed, leaving sub-s (2) as mere surplusage. Rather, the utility of sub-s (2) arises because the exclusion brought about by sub-s (1) is not necessarily commensurate with the extent of the applicant's interest in the property. Sub-section (2) therefore provides the opportunity to declare the nature of that interest which enlivens the court's jurisdiction to make the exclusion order. For these reasons, the majority of the Court of Appeal were correct in their construction of s 52(1) of the Act as it relates to the scope of the relevant exclusion order and the meaning of "property" as it appears in that sub-section. Grounds 1, 2 and 3 in the Notice of Appeal fail. The criteria for exclusion On one view, the exclusion of the restrained property, rather than merely the applicant's interest, from the operation of the automatic forfeiture might be thought to be too generous towards the applicant, whose interest in the property may be comparatively minor. Neave JA gave the examples of an applicant having only a restrictive covenant or easement over the land11. Those particular examples may have been inapposite, as interests or encumbrances of that kind (if registered) are preserved by s 41 from the effect of forfeiture, thus making an exclusion order unnecessary. The operation of s 41 in the case of a joint tenant or tenant in common of the fee simple might be different, as mentioned above. In any event, the apparent generosity of the Act towards applicants of that kind is counterbalanced in the statutory scheme by the relatively strict criteria in s 52(1) which an applicant must meet before an exclusion order can be made. In the case of Mrs Le, those criteria were that she "was not, in any way, involved in the commission of the Schedule 2 offence", that she acquired her interest in the 11 (2007) 15 VR 352 at 369. property "without knowing, and in circumstances such as not to arouse a reasonable suspicion, that the property was tainted property"; that her interest "is not subject to the effective control of the defendant"; and that her interest "was acquired for sufficient consideration". Given the effect of an exclusion order β namely, the exclusion of the whole of the property from forfeiture β it is not to be assumed that those criteria will be as easily satisfied as appears to have been assumed in argument in this Court. Of those criteria, the requirement that there be "sufficient consideration" was most open to doubt on the facts of the present case. It is to that criterion which is the subject of grounds 4 and 5 in the Notice of Appeal, and to these we now turn. "Sufficient consideration" Until the transfer in question, Mr Le was the sole registered proprietor of the property the continued ownership or enjoyment of which is at stake in these proceedings. On 29 August 2003 he transferred the property to himself and his wife as joint tenants. The consideration was expressed to be "natural love and affection". The critical question is whether, within the meaning of the Act, the transfer was made for "sufficient consideration". It is convenient to approach that question first by looking to the character given by the general law to a conveyance expressed to be made for a consideration being "natural love and affection". The various senses in which the term "consideration" is used and the adjectives attached to it have been detailed and discussed in this Court in Roxborough v Rothmans of Pall Mall Australia Ltd12 and Commissioner of State Revenue (NSW) v Dick Smith Electronics Holdings Pty Ltd13. The following may be added in elaboration of what was said in those cases and with particular reference to conveyancing law and practice. Equity will not (subject to what appears below) assist what it regards as a volunteer to perfect an otherwise imperfect gift of property. In that regard, it would be insufficient to show "good consideration", being natural affection for family members or moral obligation14. However, "valuable consideration" will 12 (2001) 208 CLR 516 at 556-557 [103]. 13 (2005) 221 CLR 496 at 504-506 [22]-[24]. 14 Underhill and Hayton, Law Relating to Trusts and Trustees, 17th ed (2007) at attract the intervention of equity. Equity regards this as not including a bare covenant under seal but as including not only money or money's worth but a settlement made before and in consideration of marriage or agreed before and executed after the marriage15. There was no marriage consideration in the present case and no "valuable consideration". Nor, given what has been said earlier in these reasons respecting National Provincial Bank16, was the creation of the joint tenancy the discharge of any obligation imposed by law upon the husband to create a proprietary interest in the apartment in favour of his wife. It should be added to what has been said respecting "good consideration" that it may play a part in the operation of limited and specific conveyancing principles, albeit with no reference to the situation in the present case. Of the expression "good consideration" it was said in Elphinstone's work, one of the classic conveyancing treatises17: "By 'good consideration' is meant merely the motive of natural affection towards relations. It has no validity against creditors or purchasers. The only effect of it is to raise the use in covenants to stand seised." Further, Leake wrote that18: "The motive then stood in place of a consideration, and it was said to be made upon a good consideration, as distinguished from a consideration of money or value, which formed the characteristic of a bargain and sale." By way of qualification to the general principle that equity does not lend the assistance of its doctrines and remedies to voluntary undertakings, the presence of motive as "good consideration" has been treated as sufficient to deny the implication of what otherwise would be a resulting trust in favour of the disponor. As was said in the American case of Groff v Rohrer19: 15 Underhill and Hayton, Law Relating to Trusts and Trustees, 17th ed (2007) at 16 [1965] AC 1175 at 1247-1248. 17 Elphinstone's Introduction to Conveyancing, 7th ed (1918) at 81. (footnote omitted) 18 An Elementary Digest of the Law of Property in Land (1874) at 110. 19 35 Md 327 at 336 (1872). See also House v Caffyn [1922] VLR 67 at 79; Wirth v Wirth (1956) 98 CLR 228 at 235-236; Scott on Trusts, 4th ed (1989), vol 5 at Β§405. "The relation of β¦ husband and wife, if there were no proof of a valuable consideration in the deeds, furnished ground of meritorious consideration, to prevent the implication that the husband merely intended that [the wife] should be a trustee of the property conveyed, for his benefit". But what is particularly significant for present purposes is the proposition stated by Elphinstone that the presence of a "good consideration" for a conveyance has no validity against creditors or purchasers. Thus, it would not, for example, found a defence of bona fide purchase of a legal estate for value and without notice of an equitable estate. That understanding of the general law is significant for the question of statutory construction in this case. Here a third party is involved, asserting rights and remedies conferred by the Act. In that setting, and with the limited role of a consideration of natural love and affection even at general law, it is unlikely that the statutory that species of consideration. term "sufficient consideration" includes the general When used elsewhere term "sufficient consideration" imports a notion of tangible benefit or advantage conferred by the promisor upon the promisee, as in the case of a forbearance to sue20, a bona fide compromise of a disputed claim21, or the conferral of some other form of practical benefit22. In these cases, the "threshold of legal recognition" regarding the consideration turns on the existence of such a real benefit23. However, natural love and affection imports no such benefit. law, the At the relevant time, the term "sufficient consideration" was not defined in the Act, but the statutory context in which the phrase appears has been set out 20 Crears v Hunter (1887) 19 QBD 341; Combe v Combe [1951] 2 KB 215. 21 Wigan v Edwards (1973) 47 ALJR 586. 22 Musumeci v Winadell Pty Ltd (1994) 34 NSWLR 723. 23 cf Carter and Harland, Contract Law in Australia, 4th ed (2002) at 112 [323]. above24. Of course, unlike s 121(6)(d) of the Bankruptcy Act 1966 (Cth)25, s 52(1)(a)(v) of the Act did not explicitly exclude "natural love and affection" from the ambit of "sufficient consideration". Conversely, however, the section did not explicitly include that matter, unlike s 172 of the Property Law Act 1958 (Vic)26. In a forfeiture statute in which the effect of an exclusion order is to exclude the entirety of the relevant property from forfeiture, it may very much be doubted that a voluntary transfer for "natural love and affection" would be one made for "sufficient consideration", especially given the limited efficacy of "natural love and affection" as a form of consideration at general law. In light of the operation of s 52, the DPP rightly submits that it would be incongruous if a criminal were able by a voluntary conveyance to a spouse or other relative to put such property beyond the reach of the Act. In the present case, there was no suggestion that the conveyance in question was in any way fraudulent or designed to defeat the operation of the Act. To the contrary, Mrs Le's explanation of the transfer was accepted by the primary judge and Court of Appeal as being reasonable, namely that she was anxious about her future lest anything happen to her husband, and that her husband in turn was doing "no more than fulfilling a matrimonial obligation" by transferring a moiety of his interest in the property to her. The requirement that there be "sufficient consideration" is a criterion distinct from, and in addition to, the requirements that the applicant not be involved in the commission of the relevant offence, and that she acquire her interest "without knowing, and in circumstances such as not to arouse a reasonable suspicion, that the property was tainted property". That the applicant has a plausible explanation for the acquisition of her joint interest does not demonstrate the presence of "sufficient consideration" in the sense required by sub-par (v) of s 52(1)(a) of the Act. In particular, even if the existence of a 24 A definition of "sufficient consideration" has since been inserted into s 3 of the Act by the Confiscation Amendment Act 2007 (Vic). That definition provides that the term means "consideration that reflects the market value of the property". Among other things, "consideration arising from the fact of a family relationship between the transferor and transferee" and "love and affection" are specifically excluded. 25 This provides that "the transferee's love or affection for the transferor" has "no value as consideration". 26 This provides that "[t]his section shall not extend to any estate or interest in property alienated for valuable consideration and in good faith or upon good consideration and in good faith to any person not having, at the time of the alienation, notice of the intent to defraud creditors." "matrimonial obligation" on the part of Mr Le were conceded (contrary to what is said earlier in these reasons) that would say nothing about any consideration flowing from Mrs Le for the acquisition of her interest. Yet that is what the statute requires. Further, in the context of a forfeiture statute of general application, it would be surprising if the efficacy against the DPP of a transfer turned upon the particular matrimonial status or other domestic situation of the applicant. Such an interpretation of the term "sufficient consideration" would not assist the fair and equal operation of the Act, but would rather create exceptions based on the happenstance of the particular legal status given to the relationship between the transferor and transferee. In addition to these general matters, there are two other textual indications in the Act that "natural love and affection" does not amount to "sufficient consideration". First, the definition of "gift" in s 3 of the Act, as it relates to the meaning of "property in which the defendant has an interest" in s 10, includes within that definition a transfer for a consideration significantly less than market value. In order to expand the range of property available for forfeiture, the definition of "gift" (quintessentially a voluntary transfer) is sufficiently wide to include a transfer for what amounted to valuable consideration. Given that the effect of s 52 is to exclude that property from forfeiture, it would be strange if the definition of "sufficient consideration" included voluntary transfers for "natural love and affection". Secondly, the existence of a family or domestic relationship is a factor that can lead to the conclusion that property is property over which a defendant exercises "effective control" within the meaning of s 9 of the Act. Again, the purpose of that expansive definition is to render the property available for forfeiture, and it would be very surprising that the "natural love and affection" generated by those same family or domestic relationships would be a reason for excluding that property from forfeiture under s 52. For each of these further reasons "natural love and affection" did not amount to "sufficient consideration" within the meaning of s 52(1)(a)(v) of the Act. The exclusion order should not have been made as Mrs Le failed to satisfy one of the prerequisite criteria. The appeal should therefore be allowed on grounds 4 and 5. Remaining matters The remaining grounds of appeal that are pressed concern the correctness of the conclusion reached by the primary judge and the Court of Appeal that Mrs Le had satisfied the criterion in s 52(1)(a)(iii) of the Act that her interest was acquired "without knowing, and in circumstances such as not to arouse a reasonable suspicion, that the property was tainted property". In light of the appellant's success on grounds 4 and 5, it is unnecessary to decide the point. However, given that Mrs Le's evidence was uncontradicted and was accepted by both the primary judge and the Court of Appeal, it would be difficult for the DPP now to persuade this Court to overturn the findings made below. Orders The appeal should be allowed, and the orders of the Court of Appeal made on 15 February 2007 should be set aside save as to costs. In their place, it should be ordered that the appeal to the Court of Appeal be allowed and the orders of Judge Campbell made on 31 March 2006 be set aside save as to costs; in their place it should be ordered that the application be dismissed. Pursuant to the undertaking made by the appellant as a condition of the grant of special leave on 25 May 2007, the appellant must pay the respondent's costs in this Court. Kirby Crennan KIRBY AND CRENNAN JJ. This matter concerns the operation of the Confiscation Act 1997 (Vic) ("the Act") as it stood at 11 April 200527. The question is whether the respondent ("the wife") was entitled to an order to exclude from automatic forfeiture under the Act property which she held as a joint tenant with her husband. the wife, On an application by the County Court of Victoria (Judge Campbell) ("the primary judge") made an order excluding the whole of the property from automatic forfeiture under the Act on 31 March 2006. The Court of Appeal (Maxwell P and Chernov JA; Neave JA dissenting) dismissed an appeal by the Director of Public Prosecutions for Victoria ("the DPP") on 15 February 200728. The DPP seeks to have the orders made below set aside and to have the wife's application for an exclusion order dismissed. Upon the grant of special leave to appeal, an undertaking was given by the DPP that he will not seek to disturb the orders as to costs made by the Court of Appeal and he will pay the costs of the wife of the appeal to this Court in any event. The facts The subject of this dispute is a two-bedroom apartment located in Sunshine, Victoria ("the apartment"). It is the matrimonial home of the wife and her husband, Roy Le, whom she married in Vietnam in September 1997. Mr Le purchased the apartment in his own name in December 1998. The wife has lived in the apartment since she came to Australia in July 1999. On 23 June 2003, Mr Le was charged with a number of offences, including trafficking in not less than a commercial quantity of heroin for which he was convicted on 1 February 2005. He was sentenced to a term of imprisonment. On 29 August 2003, the apartment was conveyed into the joint names of the wife and her husband. The consideration for the transfer was expressed to be "natural love and affection". Before the primary judge, the wife gave evidence that she had asked her husband to put her name on the title because she was concerned that if anything happened to him, the apartment would pass to her husband's children from his former marriage and she would have nowhere to live. The wife is not able to speak or write English. She has no driver's licence, no savings and no next of kin in Australia. Since her husband commenced his term of imprisonment, the wife has made mortgage payments from her pension in 27 The application for an exclusion order was initiated on that date. 28 Director of Public Prosecutions v Le (2007) 15 VR 352. Kirby Crennan respect of a mortgage over the property, which at the date of the application for an exclusion order was of the order of $20,000. The relevant legislation Part 2 of the Act deals with restraining orders preventing disposition of, or dealing with, "property" or an "interest in property"29. Section 16 allows the DPP to seek a restraining order in respect of property which is reasonably suspected of being "tainted property". The expression "tainted property" in relation to an offence includes property that "was used, or was intended by the defendant to be used in, or in connection with, the commission of the offence"30. Relevantly, offences in respect of which a restraining order may be sought include those offences specified in Sched 231. Mr Le was convicted of a Sched 2 offence. Part 3 of the Act deals with forfeiture of property, and Div 2 of Pt 3 deals with automatic forfeiture after conviction of a Sched 2 offence. Section 35 relevantly provides: a person is convicted of a Schedule 2 offence; and a restraining order is or was made under Part 2 in respect of property for the purposes of automatic forfeiture in reliance the defendant's conviction of that offence; or (ii) β¦; and the restrained property is not the subject of an exclusion order under section 22β 29 Section 14 (1); cf Proceeds of Crime Act 2002 (Cth), s 17 considered in Director of Public Prosecutions (Cth) v Hart [2007] QCA 184. 30 Section 3(1). 31 The Act distinguishes between Sched 1 offences and the more serious offences specified in Sched 2. If a person is convicted of a Sched 1 offence, the DPP may apply for a forfeiture order in respect of tainted property, whether or not the property has previously been subject to a restraining order (see s 32). The Act provides for the automatic forfeiture of restrained property upon conviction for a Sched 2 offence (see s 35). Kirby Crennan the restrained property is forfeited to the Minister on the expiry of 60 days afterβ the making of the restraining order; or the defendant's convictionβ whichever is later." (footnote omitted) Part 5 deals with the effect of forfeiture and Pt 6 deals with exclusion orders which operate to exclude property the subject of a restraining order from the operation of the automatic forfeiture provisions. If property is forfeited under s 35, s 51 permits a person (other than the defendant) who claims an interest in such property to make an application for an exclusion order within 60 days or otherwise with the leave of the court32. The application is for "an order under section 52" which provides for "an order excluding property in which the applicant claims an interest from the operation of section 35". Section 52 contains the conditions for the grant of such an order: "52 Determination of exclusion applicationβautomatic forfeiture (1) On an application made under section 51, the court may make an order excluding property in which the applicant claims an interest from the operation of section 35β if the court is not satisfied that the property in which the applicant claims an interest is not tainted property but is satisfied thatβ the applicant was not, in any way, involved in the commission of the Schedule 2 offence; and (ii) where the applicant acquired the interest before the commission of the Schedule 2 offence, the applicant did not know that the defendant would use, or intended to use, the property the commission of the Schedule 2 offence; and in connection with, in, or (iii) where the applicant acquired the interest at the time of or after the commission of the 32 Section 51(2) and (3). Kirby Crennan Schedule 2 offence, the applicant acquired the without interest and circumstances such as not to arouse a reasonable suspicion, that the property was tainted property; and knowing, (v) where the applicant acquired the interest from the defendant, directly or indirectly, that it was acquired for sufficient consideration; or If the court makes an order under sub-section (1), the court may also make an order declaring the nature, extent and value of the applicant's interest in the property." (emphasis added) The proceedings below After Mr Le was charged, the DPP made an application under s 16(2)(c) of the Act for a restraining order33. Pursuant to s 1834, on 18 September 2003, a restraining order was made with respect to the apartment in the County Court (Judge Fagan). As required by s 15(3)(a), the Court declared that the property had been restrained for the purpose, amongst others, of satisfying "automatic forfeiture of property that may occur under Division 2 of Part 3". On 1 February 2005, Mr Le pleaded guilty and was convicted of trafficking a drug of dependence in not less than a commercial quantity. As explained above, by virtue of s 35, a consequence of Mr Le's conviction was the automatic forfeiture of the property the subject of the restraining order on the expiry of 60 days after conviction. 33 Section 16(2)(c) provides that a restraining order could be sought if "a person has been charged with a Schedule 2 offence and that person has an interest in the property or the property is tainted property in relation to that offence". 34 The restraining order also applied to a black 1992 Mercedes-Benz sedan, which was not the subject of dispute in these proceedings. Kirby Crennan The application made by the wife under s 51 of the Act was based on her interest as "joint proprietor" of the property35. The primary judge noted that there was no dispute that the property was "tainted property" within the meaning of par (a) of that definition in s 3(1). There was also no dispute that the wife was not in any way involved in the commission of the offence in question36. The primary judge considered that there were two substantive issues: whether the wife had acquired her interest in the property without knowing, and in circumstances such as not to arouse "a reasonable suspicion", that the property was "tainted property"37; and whether her acquisition of her interest in the property was for "sufficient consideration"38. The primary judge found in favour of the wife on both issues. In the course of so doing, his Honour observed that it seemed to him to be arguable that "what [Mr Le] was doing in transferring a moiety of his interest in the property was no more than fulfilling a matrimonial obligation". The DPP sought to have the exclusion order apply only to the wife's "interest in the property" as a joint tenant. However, the primary judge rejected this submission and instead ordered that the exclusion from forfeiture apply to the whole of the property "situate at 10/20-30 Ridley Street, Sunshine"39. The issues Three live issues were pursued on the appeal. The principal issue was the construction of the phrase "property in which the applicant claims an interest" as it occurs in s 52(1). There were two other issues of statutory interpretation. One the expression "sufficient consideration", as was whether it occurs 35 Although the application was made out of time, the primary judge granted leave for the wife to bring her application on the basis that the delay was not due to neglect on her part: see s 51(3). 36 Section 52(1)(a)(i). 37 Section 52(1)(a)(iii). 38 Section 52(1)(a)(v). 39 It can be noted that the description of the property in this order differs from the description in the restraining order, which refers to the property at "10/28-30 Ridley Street, Sunshine". Kirby Crennan s 52(1)(a)(v), includes the consideration of "natural love and affection". The other was whether the "reasonable suspicion" that property is "tainted property", referred to in s 52(1)(a)(iii), is to be tested subjectively or partly or wholly objectively. The Court of Appeal A submission by the DPP that the power to exclude property should be read down to apply to "so much of the property as relates to the [wife's] interest" was rejected by the majority in the Court of Appeal (Maxwell P and Chernov JA)40. The majority considered that while it was the wife's interest in the property which gave the wife standing to seek an exclusion order41, it was nevertheless the whole property which was restrained by the restraining order and therefore any successful application for an exclusion of the restrained property from forfeiture would result in an exclusion of the whole property. In dissent, Neave JA considered that the power conferred on the court by s 52(1) of the Act could "only be exercised so as to exclude the [wife's] interest in the property which is automatically forfeited and not to exclude the whole of the property from forfeiture"42. For the reasons which follow, Neave JA's conclusions on the proper construction of s 52(1) are to be preferred. The Court of Appeal unanimously found that the term "sufficient consideration" in s 52(1)(a)(v) of the Act included both "valuable consideration" and "good consideration" as those terms were understood at common law, and that "natural love and affection" constituted "sufficient consideration" for the purposes of that section43. The Court of Appeal was also united in finding that the wife did not have a reasonable suspicion "that the property was tainted property"44. It was noted that the wife gave evidence about "her state of knowledge and, by necessary implication, her lack of suspicion" and "[t]hat evidence was not challenged in 40 Director of Public Prosecutions v Le (2007) 15 VR 352 at 364-365 [49]-[50]. 41 Director of Public Prosecutions v Le (2007) 15 VR 352 at 365 [50]. 42 Director of Public Prosecutions v Le (2007) 15 VR 352 at 367-368 [64]. 43 Director of Public Prosecutions v Le (2007) 15 VR 352 at 364 [45] per Maxwell P and Chernov JA. 44 Section 52(1)(a)(iii). Kirby Crennan cross examination, or otherwise"45. In adopting that position, the Court of Appeal proceeded on the basis that the appropriate statutory test was objective46. Both of those unanimous findings should be upheld for the reasons which follow. Orders should be made varying the orders for excluding the property from automatic forfeiture, so as to exclude the wife's interest in the property and to declare the nature of her interest as a tenant in common as to a half share47. Scope of orders excluding property from automatic forfeiture β s 52(1) Each party relied on the scheme of the legislation and the text of the Act as supporting the different constructions of s 52(1) set out above. It must be conceded that the detailed provisions of the Act give rise to some awkwardness when the subject matter of a restraining order or a forfeiture order is real property owned jointly by a person convicted of a relevant offence and another. In supporting the construction of s 52(1) preferred by Neave JA, the DPP contended that the power to exclude property from forfeiture was limited to excluding "the applicant's interest" in the property which was "partial". The wife submitted that both the scheme and terms of the Act supported the contrary conclusion. It was submitted that the exclusion order that can be made under s 52(1) can relate only to the "whole" of the property in which the applicant has an interest, rather than to the applicant's interest in the property. In seeking to uphold the decision of the majority in the Court of Appeal that the whole of the property could be excluded48, the wife relied particularly on the opening words of s 52(1), emphasised above, as indicating that the Court's power to exclude was directed to the "property in which the applicant claims an interest" rather than to "the applicant's interest in the property". It was chiefly grammatical emphases, such as those, on subject and object and on definite articles, which were relied on to support the wife's contention that the power to make an exclusion order was expressly directed to things or objects and did not encompass any partial interest in things or objects. 45 Director of Public Prosecutions v Le (2007) 15 VR 352 at 362 [37] per Maxwell P and Chernov JA. 46 Director of Public Prosecutions v Le (2007) 15 VR 352 at 359-360 [24] per Maxwell P and Chernov JA. 47 Section 52(2). 48 Director of Public Prosecutions v Le (2007) 15 VR 352 at 364-367 [49]-[62] per Maxwell P and Chernov JA. Kirby Crennan The purposes of the Act set out in s 1 which were relevant to the restraining and forfeiture orders in this case include providing for "automatic forfeiture of restrained property of persons convicted of certain offences in certain circumstances"49 and "forfeiture by the Supreme Court or the County Court of property restrained on suspicion that it is tainted property in relation to a Schedule 2 offence"50. It was also a purpose of the Act "to provide for the forfeiture of the proceeds of certain offences, whatever the form into which they have been converted"51. Section 51(1) refers to an applicant for an exclusion order as a person "who claims to have had an interest in the property". Section 52(1), set out above, provides that the court "may make an order excluding property in which the applicant claims an interest". Subparagraphs 52(1)(a)(ii), (iii), (iv) and (v) all contain references to the applicant's "interest" in the property. Section 3(1), the definition section of the Act, provides: "'property' means real or personal property of every description, whether situated within or outside Victoria and whether tangible or intangible, and includes any interest in any such real or personal property". Section 3(1) also defines interest in property: "'interest', in relation to property, meansβ a legal or equitable estate or interest in the property; or a right, power or privilege over, or in connection with, the property". Far from distinguishing "property" as signifying only a thing or an object (eg Blackacre) from "property" as signifying a "legal relationship with a thing"52 (eg a joint tenancy), the definitions in s 3(1) indicate that the statutory meaning of property comprehends "property" in both manifestations. 49 Section 1(b). 50 Section 1(c). 51 Section 1(a). 52 Yanner v Eaton (1999) 201 CLR 351 at 365-366 [17] per Gleeson CJ, Gaudron, Kirby Crennan The majority in the Court of Appeal recognised that the definition of "property" in s 3(1) included interests in property53, but took the view that the restraining order in this case was confined to "property which is tainted property", which means the whole of the property used in connection with an offence54. It was this reasoning which led the Court of Appeal to reject the argument that s 52(1) empowered a court to exclude an interest in the property, following a restraining order directed to what the Court of Appeal called "the whole property". If a restraining order directed to the property did not apply to all the interests in the property to which it referred, a question would arise as to whether or not a disposition by the husband of his joint interest in the apartment would contravene the restraining order. As observed by Philippides J in Commonwealth Director of Public Prosecutions v Hart, which concerned cognate federal legislation, if restraining orders do not extend to all the interests in the property specified in an order, the order "could be rendered nugatory by the simple expedient of disposing of or otherwise dealing with the equitable interests in the property"55. Read in the light of the definitions of both "property" and "interest" in s 3(1), and having regard to the Act as whole, s 52(1) empowers a court to make orders in respect of any "real or personal property" and in respect of any interest in such real or personal property in which the applicant claims an interest. Sometimes the two will coincide, such as where a person is the sole owner of Blackacre. Where they do not coincide, the court's powers are to exclude the applicant's "interest" in the object of the restraining order with the result that any interest, other than the applicant's interest, can remain subject to the restraining order. Such a construction is unremarkable given that real property is frequently owned jointly. 53 Cf Director of Public Prosecutions (Cth) v Hart (No 2) [2005] 2 Qd R 246 at 257 [20]: McPherson JA construed similar, but not identical, definitions in the Proceeds of Crime Act 2002 (Cth) as comprehending both meanings of "property" but considered that "the primary meaning of 'property'" in the equivalent section is the thing itself. 54 Director of Public Prosecutions v Le (2007) 15 VR 352 at 365 [51]-[53] per Maxwell P and Chernov JA. 55 Commonwealth Director of Public Prosecutions v Hart [2007] QCA 184 at [45]. Kirby Crennan Support for this construction is to be found in the Explanatory Memorandum56 which can be taken into account57, although words in extrinsic materials cannot be substituted for the words of the legislation58. This construction is also supported by s 41(2) of the Act, which describes the effect of forfeiture: property is forfeited to the Minister by automatic forfeiture under section 35β the property vests in the Minister subject to every mortgage, charge or encumbrance to which it was subject immediately before the order was made or the automatic forfeiture occurred (as the case may be) and toβ in the case of land, every interest registered, notified or saved under the Transfer of Land Act 1958 or the Property Law Act 1958 β¦" Further support for the construction can be found in s 33(2) which applies to forfeiture orders (as distinguished from automatic forfeiture orders) which states that "[a] forfeiture order must specify the interests in property to which it applies" and in s 29(1) which provides that a person who "knowingly contravenes a restraining order by disposing of, or otherwise dealing with, an interest in property to which the order applies is guilty of an indictable offence". It would be difficult to achieve the purposes of the Act and to implement its sanctions if restraining orders and forfeiture orders did not specify the interests in property to which they were directed. Furthermore, the relevant provisions for exclusion orders assume the possibility that a person, other than a person convicted of a Sched 2 offence, has an interest in the property which is restrained or liable to forfeiture. 56 Explanatory Memorandum for the Confiscation Bill 1997 of 14 November 1997, cl 52: "If the applicant is able to prove the matters referred to in paragraphs (d) and (e) [matters going to 'effective control' and 'sufficient consideration'] this will prove that the defendant does not have an interest in the property." (emphasis added) 57 Interpretation of Legislation Act 1984 (Vic), s 35(b)(iii). 58 Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 518 per Mason CJ, Wilson and Kirby Crennan Here, the restraining order restrained the husband "whether by himself or by his servants, agents or otherwise" from disposing of or dealing with "property at 10/28-30 Ridley Street, Sunshine and more particularly described in Certificate of Title Volume 9604 Folio 908". The relevant folio report recorded "Roy Le" and "Phan Thi Le both of 10/30 Ridley Street Sunshine" as the "Joint Proprietors". It also recorded details of a mortgage in favour of Westpac Banking Corporation. In terms of s 3(1) of the Act, the restraining order is directed to real property, 10/28-30 Ridley Street, Sunshine, the particular description of which in the folio report indicates that the legal and equitable interest59 in the real property is held by joint proprietors, the husband and the wife. If one adopted the language of s 41(2)(c)60, the particular description of the real property reveals the wife's "interest registered β¦ under the Transfer of Land Act 1958". It is well established that a joint tenant can dispose of his or her interest in real property (other than by will), as discussed later in these reasons. It should also be noted that, in the context of certain applications for exclusion from restraining orders, the court may declare that the restraining order "shall be disregarded for the purposes of section 35"61, or may make "such orders in relation to the property to which the restraining order relates as it considers just"62, which can include "an order varying the property to which the restraining order relates"63. Had the wife's initial application under s 2064, for an exclusion from the restraining order, not been made out of time, there is no doubt the court had the power to confine the restraining order to the husband's joint interest in the real property, if it took the view that the restraining order was not already so confined. Such an order would have resulted in a severance of the joint tenancy, a topic to which we will return. 59 See s 3(1): definition of "interest" set out above at [80]. 60 Set out above at [86]. 61 Section 23. 62 Section 26(1). 63 Section 26(5)(a). 64 The wife's application under s 20 for exclusion from the restraining order was subsequently amended to include also the application under s 51(1) for exclusion from automatic forfeiture. Kirby Crennan There are numerous other provisions in the Act which also support construing s 52(1) so as not to confine the word "property" where they occur to "real property", in circumstances where a restraining order restrains disposition of real property owned jointly. Section 33(5)(c) provides that a court considering whether to make an order for forfeiture65 in favour of the Minister may take into account the claim of any person to an interest in the property having regard to matters set out in s 50(1)66. Section 51(4) includes a reference to "[a]n application for an order under section 52 in relation to an interest in property" and s 52(2) provides that a court may declare an applicant's interest in property. That is consistent with the legislature's concern to identify the interest which is the subject of a forfeiture order67. When the definition of the word "property" in s 3(1) is read into the introductory words of s 52(1) as it was by Neave JA68, and s 52(1) so construed is applied to the facts of this case, the property in question is the apartment, and the joint proprietorship in the apartment, in which the wife claims an interest. That the construction of s 52(1) set out above avoids incongruous results69 confirms its correctness. The interpretation favoured by Neave JA is also more consonant with the apparent purpose of the Act70. It achieves a more proportionate outcome and one that is harmonious with the apparent objectives of the Act. In the context of the findings that the property was "tainted" (but that the wife was not in any way involved in the husband's criminal conduct and that the circumstances did not arouse a reasonable suspicion on her part) to exempt the entire property 65 As distinguished from automatic forfeiture. 66 Section 50(1) matters include the same matters relevant to s 52(1) set out above. 67 Section 33(2). 68 Director of Public Prosecutions v Le (2007) 15 VR 352 at 368 [67] per Neave JA. 69 Examples of which were given by Neave JA: Director of Public Prosecutions v Le (2007) 15 VR 352 at 369-370 [73]-[77]. 70 Bropho v Western Australia (1990) 171 CLR 1 at 20 per Mason CJ, Deane, Dawson, Toohey, Gaudron and McHugh JJ; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381-382 [69]-[71] per McHugh, Gummow, Kirby and Hayne JJ. Kirby Crennan (including the husband's interest) because she too had an interest, would appear to provide her with a windfall in respect of his interest. Had that been the purpose of the Act, it may be inferred that Parliament would have made that purpose clear. The interest of the wife in the real property was described by the primary judge as "a moiety" of the husband's interest in the real property, the transfer of which "was no more than fulfilling a matrimonial obligation". At a subsequent hearing for the purpose of pronouncing his orders, the primary judge was asked to declare (under s 52(2)) that the wife's interest was "a joint tenant's interest", so as to facilitate a subsequent "partition action", a course his Honour declined to take. A joint tenancy in land has two distinguishing features: the right of survivorship and the unities of title, interest, possession and time71. In Land Law72, Professor Butt describes the possible methods of termination of joint tenancy of land as follows73: "A joint tenancy terminates in one of three ways. The first is by operation of the right of survivorship, when the land vests entirely in the last surviving joint tenant. The second is by sale or partition β¦ The third is by severance ..." (footnote omitted) Professor Butt goes on to recognise that, for the purposes of severance, "a joint tenant is regarded as having a potential share in the land commensurate with that of the other joint tenants"74. Alienation of a joint tenant's interest in land is one method of severance. This can occur as a result of a legal process. For example, taking a joint tenant's interest in land in execution of a judgment will sever a joint tenancy75. With Torrens title land, severance of a joint tenancy occurs once property vests in a trustee in bankruptcy in equity76. To employ a 71 Butt, Land Law, 5th ed (2006) at 214 [1405], 216 [1410]. 72 Butt, Land Law, 5th ed (2006). 73 Butt, Land Law, 5th ed (2006) at 237 [1456]. 74 Butt, Land Law, 5th ed (2006) at 237 [1458]. (original emphasis) 75 Guthrie v Australia and New Zealand Banking Group Ltd (1991) 23 NSWLR 672 at 680 per Meagher JA. See also Mitrovic v Koren [1971] VR 479 at 481 per 76 Bankruptcy Act 1996 (Cth), s 58(2). See also Re Holland; Ex parte Official Trustee in Bankruptcy (1985) 5 FCR 165 at 167 per Fisher J. Kirby Crennan word used of different facts77, but equally applicable here, the joint tenancy "transmogrifies" to a tenancy in common, once a trustee in bankruptcy is registered as proprietor of the bankrupt's interest78. Professor Butt gives other examples of severance of joint tenancy as a result of legal processes79. What the examples have in common is that certain court orders are inconsistent with the continuation of a joint tenancy. It can hardly be doubted that a court is empowered under the Act to make orders which are expressly or impliedly inconsistent with the continuation of the joint tenancy of the husband and the wife. Such powers have some similarity with powers under the Family Law Act 1975 (Cth)80 to make orders in respect of jointly owned property, the effect of which is that the property is to be sold, divided or transferred in a manner inconsistent with the continuation of a joint tenancy. Applying s 52(1) (as construed above) and other relevant sections, the primary judge was empowered to dispose of the wife's application by specifying the interest to which the forfeiture order would thereafter apply, and excluding the wife's joint interest in the apartment from the forfeiture order. At least the unities of interest and time81 would be destroyed, thereby severing the joint tenancy. Sufficient consideration β s 52(1)(v) Because the wife obtained her joint interest in the apartment from her husband, she had to satisfy the court that her interest was acquired for "sufficient consideration". This expression, which occurs in s 52(1)(a)(v) (and also in s 52(1)(b)(ii) and in ss 21, 22, 24, 50 and 54), is not defined in the Act. The DPP submitted that the policy of the Act is to ensure that criminals, their associates and dependants forfeit the proceeds of crime. It was contended that the policy supported the submission that "sufficient consideration" means 77 Peldan v Anderson (2006) 227 CLR 471 at 483 [29] per Gummow ACJ, Kirby, Hayne, Callinan and Crennan JJ. 78 Sistrom v Urh (1992) 40 FCR 550 at 556. 79 See for example Butt, Land Law, 5th ed (2006) at 249-250 [1487]. 80 Section 79. 81 Exceptions to the "unity of time" requirement for wills and conveyances to uses have no application here. Kirby Crennan "adequate consideration", which in turn means money or money's worth. Otherwise, it was contended, criminals could subvert the Act by transferring property to a spouse, partner, child or other relative in order to put the property beyond the reach of the Act. Analogies with bankruptcy legislation and cognate confiscation legislation in other jurisdictions were also relied upon. The wife sought to sustain the conclusion of all members of the Court of Appeal that "sufficient consideration" includes "valuable consideration" and "good consideration" but not "nominal consideration". The general obligations or duties of support owed by married couples to each other82, reaffirmed recently in the United Kingdom83, often entail legal and equitable joint ownership of marital property such as the matrimonial home. This gives rise to a separate point. In finding that the husband's transfer to the wife of a "moiety" of his interest in the real property "was no more than fulfilling a matrimonial obligation", the primary judge treated "natural love and affection" as adequate consideration in all the circumstances of this case. This Court has recognised that consideration may have different meanings in different contexts84, and that it has a wider meaning or operation in conveyancing than it does in simple contracts85. The "wider" meaning is that in conveyancing consideration is not treated as requiring consideration sufficient to support a contract. Speaking generally, and without reference to exceptions, a promise will not be legally binding unless made in a deed or supported by consideration. As 82 Cf the discussion of legal duties arising in marriage in Joske, Matrimonial Causes and Marriage Law and Practice of Australia and New Zealand, 5th ed (1969) at 83 Miller v Miller [2006] 2 AC 618 at 632 [11] and 632-633 [16] per Lord Nicholls of Birkenhead, 655 [123] and 660-661[141] per Baroness Hale of Richmond. 84 Roxborough v Rothmans of Pall Mall Australia Limited (2001) 208 CLR 516 at 556 [103] per Gummow J. 85 Archibald Howie Pty Ltd v Commissioner of Stamp Duties (NSW) (1948) 77 CLR 143 at 152 per Dixon J. 86 Treitel, The Law of Contract, 11th ed (2003) at 67; see also Chitty on Contracts, 29th ed (2004), vol 1 at 216 [3-002]. Kirby Crennan "This doctrine [of consideration] is based on the idea of reciprocity: 'something of value in the eye of the law' must be given for a promise in order to make it enforceable as contract." (footnote omitted) Because consideration of "natural love and affection" is commonly referred to in deeds of gift or voluntary settlements, a reference to the phrase "strongly suggests a gift"87. There are older cases in which it was recognised that "natural love and affection" was not "sufficient consideration" to ground an assumpsit, although it was sufficient to raise a use88. While natural love and affection may not be sufficient consideration to support a contract, it is settled that, at common law, "[a]n antenuptial agreement to settle property in consideration of marriage is backed by good consideration, and may be specifically enforced by the husband, wife and issue of the marriage"89. The situation is more complicated in relation to post-nuptial settlements of property, although some post-nuptial promises have been considered to constitute "valuable consideration"90 or "good consideration"91. Marriage has long been considered "valuable consideration" in the specific context of conveyancing92. The principle has been given statutory 87 Mansukhani v Sharkey [1992] 2 EGLR 105 at 106 per Fox LJ; see also Cattanach v Melchior (2003) 215 CLR 1 at 104 [292] per Callinan J. 88 See, for example, Bret v JS (1600) Cro Eliz 756 [78 ER 987]. See also Tweddle v Atkinson (1861) 1 B & S 393 at 398 per Crompton J, 399 per Blackburn J [121 ER 762 at 764] (which is somewhat differently reported at (1861) 30 LJQB (NS) 265). 89 Meagher, Heydon and Leeming, Meagher, Gummow and Lehane's Equity Doctrines and Remedies, 4th ed (2002) at 654 [20-025] citing Re Cook's Settlement Trusts [1965] Ch 902 at 915-916. See also Attorney-General v Jacobs Smith [1895] 2 QB 341 at 353 per Kay LJ. 90 Green v Paterson (1886) 32 Ch D 95 at 106-108 per Fry LJ. 91 Popiw v Popiw [1959] VR 197 at 199 per Hudson J. 92 Blackstone, Commentaries on the Laws of England (1766), vol 2 at 297. Kirby Crennan force93 and has been reconfirmed on many occasions94. In the factual circumstances of the present case, where Mr Le and the wife were married, it is unnecessary in contemporary social circumstances, that learning applies to other marriage-like relationships95. to explore the extent to which, The phrase "sufficient consideration" generally means legally sufficient to enforce a promise96; it is specifically defined in a number of cognate acts97 to exclude certain forms of consideration which, otherwise, might have been thought sufficient. In the Court of Appeal, Maxwell P and Chernov JA (with whom Neave JA agreed on this point) noted98: "The term 'sufficient consideration' is not defined in the Act, although courts have sometimes used it as a synonym for adequate or 'valuable' consideration. Thus, for example, in describing as 'sufficient' the valuable consideration given by the promisee in Wigan, Mason J meant no 93 Property Law Act 1958 (Vic), s 18(1); Robinson, The Property Law Act Victoria (1992) at 408-409; Conveyancing Act 1919 (NSW), s 7(1); Law of Property Act 1936 (SA), s 7; Property Law Act 1974 (Q), Sched 6; Property Law Act 1969 (WA), s 7; Law of Property Act (NT), s 4. 94 See Chief Commissioner of State Revenue (New South Wales) v Dick Smith Electronics Holdings Pty Ltd (2005) 221 CLR 496 at 505 [24] per Gleeson CJ and Callinan J (in dissent but not on this point) and the references referred to there. See also House v Caffyn [1922] VLR 67 at 75 per Cussen J. 95 cf Garcia v National Australia Bank Limited (1998) 194 CLR 395 at 403 [19]-[20] per Gaudron, McHugh, Gummow and Hayne JJ; cf at 427 [66.5] per Kirby J. 96 Black's Law Dictionary, 8th ed (2004) at 326; Oxford Dictionary of Law (2006) at 117: "sufficient means sufficient in law". 97 Proceeds of Crime Act 2002 (Cth), s 338; Criminal Assets Recovery Act 1990 (NSW), s 4(2); Criminal Assets Confiscation Act 2005 (SA), s 3; Criminal Proceeds Confiscation Act 2002 (Q), Sched 6; Crime (Confiscation of Profits) Act 1993 (Tas), s 4(4); Confiscation of Criminal Assets Act 2003 (ACT), Dictionary; cf Criminal Property Confiscation Act 2000 (WA), Glossary. 98 Director of Public Prosecutions v Le (2007) 15 VR 352 at 362-363 [41] per Maxwell P and Chernov JA citing Wigan v Edwards (1973) 47 ALJR 586; 1 ALR Kirby Crennan more than that the consideration was adequate to impose on the promisor an enforceable obligation." (footnote omitted) While the courts have at times used the terms "valuable consideration" and "sufficient consideration" interchangeably99, it seems well recognised in the context of contract law that the term "sufficient consideration" can be contradistinguished from the term "adequate consideration", as noted by Professors Carter and Harland100: "The rule that consideration must be sufficient requires that what is put forward as consideration reach a threshold of legal recognition. But once this threshold is reached no inquiry is required into how valuable the consideration is. Thus, the rule is frequently expressed in the form 'consideration must be sufficient but need not be adequate'." Similarly, Dr Robinson notes that "valuable consideration" has a particular meaning when used in contradistinction to "good consideration"101: "Formerly no distinction was drawn between 'valuable consideration' and 'valuable 'good consideration' β¦ However when contrasted with consideration', the expression 'good consideration' generally means natural affection towards a member of the settlor's family." (footnote omitted) In support of the submission that "sufficient consideration" in this Act should be construed as "adequate" which would mean money's worth, the DPP submitted that the policy considerations underpinning the Act were more closely aligned with policy considerations relevant to the Bankruptcy Act 1966 (Cth) than they were with policy considerations informing stamp duties and similar legislation. Particular reliance was placed on s 121 of the Bankruptcy Act as it 99 See Wigan v Edwards (1973) 47 ALJR 586 at 594-595 per Mason J; 1 ALR 497 at 512; Barba v Gas & Fuel Corporation (Vict) (1976) 136 CLR 120 at 132 per Gibbs J; McKay v National Australia Bank Ltd [1998] 1 VR 173 at 177 per 100 Carter and Harland, Contract Law in Australia, 4th ed (2002) at 112 [323]. See also Australian Contract Law Reporter, vol 1 at ΒΆ8-080: "Consideration need not be adequate, but must be sufficient β¦ Although the words 'sufficient' and 'adequate' are normally synonymous, a distinct and well recognised meaning is attributed to each word when the above statement is made." 101 Robinson, The Property Law Act Victoria (1992) at 408. Kirby Crennan stood prior to its amendment in 1996102. That provided that a disposition which was not "for valuable consideration" was void against the trustee in bankruptcy. Section 121(1) was construed in Cannane v J Cannane Pty Ltd (in liquidation)103 in the light of the principle that fraudulent dispositions made for the purpose of delaying creditors should be set aside. The principle derived from the Statute of Elizabeth (13 Eliz I c 5), which was enacted in 1570. Bankruptcy provided a special context in which "valuable consideration" was construed as consisting of "real and substantial value, and not [consideration] which is merely nominal or trivial or colourable"104. By way of contrast, the legislation under consideration in this appeal is relatively new. An applicant for an exclusion order must satisfy a court of his or her non-involvement with criminal conduct before an exclusion order will even be considered. Further, like cognate confiscation provisions, s 121(6)(d) of the Bankruptcy Act as it currently stands expressly provides that "love or affection" has no value as consideration105. The DPP also urged that "sufficient consideration" should be construed in conformity with cognate statutes in other jurisdictions, which reflect similar policy considerations106. In New South Wales Crime Commission v Mahoney, Grove J construed the term "sufficient consideration" as it appears in s 9(5) of the Criminal Assets Recovery Act 1990 (NSW)107 as requiring "adequacy β¦, that is to say, something 102 This section was replaced by the Bankruptcy Legislation Amendment Act 1996 (Cth). 103 (1998) 192 CLR 557 at 573 [37] per Gummow J; see also 567 [13] per Brennan CJ 104 Re Abbott [1983] Ch 45 at 57 per Sir Robert Megarry VC; see also Barton v Official Receiver (1986) 161 CLR 75 at 84-85, 86 per Gibbs CJ, Mason, Wilson and Dawson JJ; Official Trustee in Bankruptcy v Mitchell (1992) 38 FCR 364 at 105 This section was inserted into the Bankruptcy Act 1996 (Cth) by the Bankruptcy Legislation Amendment Act 1996 (Cth). 106 See Australian Law Reform Commission, Confiscation that Counts: A Review of the Proceeds of Crime Act 1987, Report No 87, (1999) par 2.61. 107 Section 9(5) provides that: "An interest in property ceases to be serious crime derived property or illegally acquired property: (Footnote continues on next page) Kirby Crennan more than nominal"108. However, it should be noted that that Act expressly provides that109: "A reference in this Act to acquiring an interest in property for sufficient consideration is a reference to acquiring the interest for a consideration that, having regard solely to commercial considerations, reflects the value of the interest." Legislation of the Commonwealth dealing with the proceeds of crime specifically provides that whether or not there has been "sufficient consideration" is to be assessed "having regard solely to commercial considerations"110. The provisions of s 52(1)(a)(i)-(v) inclusive, operating together, support the policy considerations identified by the DPP. They ensure that in circumstances such as those here, an exclusion order will only be made in favour of an applicant found innocent of any involvement in the commission of a Sched 2 offence and found to have no knowledge of circumstances leading to a property being "tainted property". Given that "natural love and affection" is "sufficient consideration" for conveyancing purposes, and given the mutual obligations of support of spouses, if a purpose of the legislation is to provide for the forfeiture of a joint interest in real property of an innocent spouse (who acquired the interest as the wife did here), that would need to be expressly provided. As mentioned above, there are express provisions in cognate legislation, and in s 4(3) of the Confiscation (a) when it is acquired by a person for sufficient consideration without knowing, and in circumstances that would not arouse a reasonable suspicion, that the interest was, at the time of acquisition, serious crime derived property or illegally acquired property β¦" 108 (2003) 142 A Crim R 409 at 419 [52]. 109 Section 4(2). 110 Proceeds of Crime Act 2002 (Cth), s 338. Kirby Crennan Amendment Act 2007 (Vic)111, which define "sufficient consideration" to exclude "love and affection"112. In the absence of an express limitation on the meaning of sufficient consideration, the legislative history of the Act "is of insufficient weight β¦ to displace the considerations of justice and fairness which ordinarily attend the administration of a new remedy"113. The Court of Appeal did not err in construing "sufficient consideration", as it occurred in s 52(1)(a)(v), as encompassing "natural love and affection" in the circumstances of this case114. "Reasonable suspicion" β s 52(1)(a)(iii) Under s 52(1)(a)(iii), a court must be satisfied that "where the applicant acquired the interest at the time of or after the commission of the Schedule 2 offence, circumstances such as not to arouse a reasonable suspicion, that the property was tainted property". interest without knowing, and the applicant acquired the There were concurrent findings of fact by the primary judge and the Court of Appeal that the wife acquired her interest in circumstances such as not to arouse a reasonable suspicion that the property was tainted property115. As the 111 Section 4(3) provides: "sufficient consideration, in relation to property, means consideration that reflects the market value of the property and does not includeβ (d) consideration arising from love and affection". 112 This new definition of "sufficient consideration" will not affect "the rights of the parties" in the present appeal. See s 17 of the Confiscation Amendment Act 2007 (Vic) which inserts s 178(2) into the Act. 113 Mansfield v Director of Public Prosecutions (WA) (2006) 226 CLR 486 at 497 [28] per Gleeson CJ, Gummow, Kirby, Hayne and Crennan JJ. 114 Director of Public Prosecutions v Le (2007) 15 VR 352 at 364 [45] per Maxwell P and Chernov JA. 115 Director of Public Prosecutions v Le (2007) 15 VR 352 at 360-362 [28]-[37] per Maxwell P and Chernov JA, 367-368 [64] per Neave JA. Kirby Crennan concurrent findings were not affected by clear error or injustice, in accordance with principle, this Court should not disturb them116. By reference to, and comparison with, verbal formulae considered in Queensland Bacon Pty Ltd v Rees117 and Australian Securities and Investments Commission v Edwards118, the DPP contended that the Court of Appeal applied the requisite test subjectively by looking only to whether the wife had the requisite state of mind, rather than approaching the matter objectively. The DPP relied on various matters of fact said to support findings contrary to the Court of Appeal's finding, if the test were applied objectively. However, the wife had not been challenged in her evidence on her denial of knowledge of the relevant circumstances. In any event, the majority in the Court of Appeal (with whom Neave JA agreed on this point) stated119: "Plainly, the word 'reasonable' imports an objective test. This means that it will not avail an applicant to say 'I had no suspicion' if a reasonable person in her circumstances, and knowing what she knew, would have formed a suspicion β¦ In the present case, the question is: would a reasonable person in [the wife's] position have had a suspicion?" There was no error in the Court of Appeal's description of the test or in its application. Conclusions The DPP has succeeded on this appeal in relation to the grounds of appeal concerning the proper construction of s 52(1) but the wife has succeeded on the grounds relating to the construction of both s 52(1)(a)(iii) and (v). The result is that the appeal should be allowed in part. The orders of the Court of Appeal should be set aside and the orders made by the primary judge should be varied in accordance with these reasons. 116 Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540 at 567-569 [48]-[54] 117 (1966) 115 CLR 266. 118 (2005) 220 ALR 148 at 205 [249]. 119 Director of Public Prosecutions v Le (2007) 15 VR 352 at 359-360 [24], [27] per Maxwell P and Chernov JA. Kirby Crennan Orders We would order: (1) Appeal allowed in respect of grounds (1)-(3) and dismissed in relation to grounds (4)-(7). (2) Order 1 of the Court of Appeal of 15 February 2007 be set aside, appeal to the Court of Appeal be allowed and order 1 of the orders made by the primary judge on 31 March 2006 be varied as follows: Order that the interest as joint proprietor of Phan Thi Le in the property situated at 10/28-30 Ridley Street, Sunshine and more particularly described in Certificate of Title Volume 9604 Folio 908 be excluded from the automatic forfeiture pursuant to s 52(1)(a) of the Confiscation Act 1997 (Vic). (ii) Declare that the nature of the interest of Phan Thi Le in the property is that of tenant in common as to a one-half share. (3) Order that the DPP pay the costs of Phan Thi Le of the appeal to this Court. |
HIGH COURT OF AUSTRALIA SYDNEY WATER CORPORATION APPELLANT AND MARIA TURANO & ANOR RESPONDENTS Sydney Water Corporation v Turano [2009] HCA 42 13 October 2009 ORDER Leave to file the amended notice of appeal dated 9 July 2009 granted. 2. Appeal allowed. Set aside the following orders of the Court of Appeal of the Supreme Court of New South Wales: (a) orders 4, 6, and 8 of the orders made on 31 October 2008; that part of order 5 of the orders made on 31 October 2008 which set aside orders and declarations stated at [155] of the judgment of Delaney DCJ numbered 2 and 3; and (c) order 1 of the orders made on 2 July 2009. In lieu thereof, order that the cross-appeal to the Court of Appeal be dismissed with costs. 4. First respondent to pay the costs of the appellant in this Court. On appeal from the Supreme Court of New South Wales Representation J T Gleeson SC with N J Owens for the appellant (instructed by DLA Phillips Fox Lawyers) B M Toomey QC with M J McAuley and E G Romaniuk for the first respondent (instructed by Paul A Curtis & Co) Submitting appearance for the second respondent Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Sydney Water Corporation v Turano Negligence β Duty of care β Liability of statutory authority β Water main installed under statutory power β Altered subsoil drainage leading to compromise of root system of roadside tree β Approximately 20 years later tree fell on passing vehicle during storm resulting in death to an occupant and personal injury to other occupants of vehicle β Whether death and injury a reasonably foreseeable consequence of installation of water main β Significance of temporal relation between allegedly negligent conduct and injury occurring β Significance of statutory authority's lack of control over the tree in interval between installation of water main and injury β Section 43A of Civil Liability Act 2002 (NSW) addressing civil liability in tort of public or other authorities exercising a "special statutory power" not relied upon. Words and phrases β "reasonable foreseeability". Civil Liability Act 2002 (NSW), ss 5B, 5C, 43A. Metropolitan Water, Sewerage, and Drainage Act 1924 (NSW), ss 30, 32. FRENCH CJ, GUMMOW, HAYNE, CRENNAN AND BELL JJ. Introduction On 18 November 2001 Mr Napoleone Turano sustained fatal injuries when a eucalyptus tree fell onto the car that he was driving. His wife, Mrs Turano (the first respondent), and their two children were travelling in the car at the time and each sustained injury in the incident. Mrs Turano brought proceedings in negligence in the District Court of New South Wales on her own behalf and on behalf of the two children against the second respondent, the Council of the City of Liverpool ("the Council"), and the appellant, Sydney Water Corporation ("Sydney Water"), claiming damages for physical and psychological injury and for loss of dependency. The liability of the defendants was determined as a separate issue by the primary judge (Delaney DCJ). His Honour found that the Council was liable in negligence, directing a verdict for Mrs Turano, and that Sydney Water was not liable, directing a verdict for Sydney Water. He considered that in the circumstances Sydney Water did not owe a duty of care for the benefit of Mrs Turano. Cross-claims brought by the Council and Sydney Water against each other were dismissed. The Council appealed to the New South Wales Court of Appeal against the primary judge's order and Mrs Turano cross-appealed against the dismissal of her claim against Sydney Water. It was not clear whether the trial of the separate issue had been confined to the determination of the defendants' liability to Mrs Turano only, or to Mrs Turano and the two children. The Council and Sydney Water each stated that it considered itself bound in all three cases by the determination of the separate issue1. In these reasons, a reference to a duty owed to Mrs Turano is to be understood as including a duty owed to the two children. The Court of Appeal (Beazley, Hodgson and McColl JJA) upheld the Council's appeal, set aside the orders made by the primary judge and substituted a verdict for the Council. By majority (Beazley and Hodgson JJA) the Court of Appeal upheld Mrs Turano's cross-appeal. The verdict in favour of Sydney Water was set aside and a verdict for Mrs Turano against Sydney Water on the 1 Liverpool City Council v Turano (2008) 164 LGERA 16 at 21 [4]; [2008] NSWCA Crennan Bell issue of liability was directed. The proceedings against Sydney Water were remitted to the District Court for the assessment of damages. The case against Sydney Water Mrs Turano's case against Sydney Water was that the tree fell because its root system had been compromised by the intermittent water-logging of the surrounding soil over an extended period. This environment created the conditions in which a pathogen entered the root system and flourished. The installation of a water main by Sydney Water was said to have diverted drainage from a nearby culvert causing the periodic water-logging. Sydney Water's negligence was said to lie in its failure to take into account the impact of the installation of the water main on drainage in the area, which required that it depart from its usual method of laying water mains in order to avoid adversely affecting the surrounding vegetation including the tree. The tree was growing on the grassed section of a road reserve. Property in the tree and the road were vested in the Council2. The tree fell approximately 20 years after the installation of the water main. There had been no complaint relating to the water main, or its effect on drainage in the surrounding area, in the intervening years. A concession by Sydney Water? Sydney Water appeals by special leave from the orders of the Court of Appeal. At the hearing of the leave application Sydney Water submitted that Mrs Turano's claim raised consideration of the nature and extent of any duty of care owed to members of the public by a public authority arising out of the impact of infrastructure installed under statutory power on things growing on another's land3. On that occasion Mrs Turano did not submit that Sydney Water was precluded by its conduct of the proceedings below from contending that it did not owe a duty of care to her. In written submissions filed on the appeal Mrs Turano asserted that the existence of a duty of care owed to her by Sydney Water had not been in issue before the Court of Appeal and that Sydney Water ought not to be permitted to depart from that position in this Court. 2 Local Government Act 1919 (NSW), ss 232(1), 233(3). The relevant reprint is as at 15 October 1980. 3 Sydney Water Corporation v Turano [2009] HCATrans 085 at 30-97. Crennan Bell The primary judge said that there had been no dispute that each defendant owed Mrs Turano a duty to take reasonable care4. The making of such a concession was disputed by the Council in the Court of Appeal5 and by Sydney Water in this Court. Sydney Water denied that it owed a duty of care to Mrs Turano in its notice of grounds of defence6. It maintained this position throughout the trial. In closing submissions Sydney Water's counsel addressed the "conceptual difficulty facing the plaintiff β¦ in respect of just the existence of the duty". In the Court of Appeal, Sydney Water submitted that: "[I]t is unrealistic to contend that the duty cast upon Sydney Water surrounding the installation of its mains, is such that in circumstances where there is no failure in a pipe nor leak, Sydney Water ought visit each roadway above where the mains are laid β¦ to see if a tree might have a pathogen infecting it as part of the duties of Sydney Water." Read in context, this submission is not a concession that Sydney Water owed a duty of care to Mrs Turano. 4 Turano v Liverpool City Council unreported, District Court of New South Wales, 2 May 2007 at [113] per Delaney DCJ. 5 Liverpool City Council v Turano (2008) 164 LGERA 16 at 35 [109] per 6 Mrs Turano's claim proceeded on her second amended statement of claim, which was filed in the District Court on 3 October 2006, which was the first day of the trial. Counsel for Sydney Water informed the Court that its amended defence was understood to cover the pleading in the second amended statement of claim but that a further amended defence had been prepared. The materials before this Court do not establish that the further amended defence was filed. However, the pleading of the duty of care in the second amended statement of claim, par 14, that the defendants were under a duty to exercise reasonable care for the safety of the deceased, is in the same terms as par 14 of the amended ordinary statement of claim. By its defence to the amended ordinary statement of claim, Sydney Water denied par 14. Crennan Bell The primary judge found that in the circumstances Sydney Water did not owe a duty of care for the benefit of Mrs Turano7. It was against this determination that Mrs Turano brought her cross-appeal. The conduct of the proceedings below does not preclude Sydney Water from contesting that it owed a duty of care to her. Sydney Water is a corporation established under s 4 of the Sydney Water Act 1994 (NSW)8. It is the successor in liabilities to the Metropolitan Water Sewerage and Drainage Board, which was established under the Metropolitan Water, Sewerage, and Drainage Act 1924 (NSW) ("the MWS&D Act")9. References in these reasons to Sydney Water include reference to its predecessors. Under the MWS&D Act, Sydney Water was at all material times, relevantly, charged with the conservation, preservation and distribution of water for domestic and other uses10, the construction of any new, additional, or supplementary works of water supply11, and the extension of its services to areas or districts not served with its mains12. Sydney Water was given the power to 7 Turano v Liverpool City Council unreported, District Court of New South Wales, 2 May 2007 at [150] per Delaney DCJ. 8 The Sydney Water Act 1994 (NSW) was formerly called the Water Board (Corporatisation) Act 1994 (NSW). 9 The Metropolitan Water Sewerage and Drainage Board was established under s 7 of the Metropolitan Water, Sewerage, and Drainage Act 1924 (NSW). The Water Legislation (Repeal, Amendment and Savings) Act 1987 (NSW) repealed that Act (Sched 1) and provided that the Water Board, as established under s 5(1) of the Water Board Act 1987 (NSW), was a continuation of and the same legal entity as the Metropolitan Water Sewerage and Drainage Board (Sched 3, cl 2(1)). The Water Board (Corporatisation) Act 1994 (NSW) dissolved the Water Board (Sched 9, cl 4(1)) and provided that, on the dissolution of the Water Board, Sydney Water is taken for all purposes to be a continuation of and the same legal entity as the Water Board (Sched 9, cl 6(1)). 10 Metropolitan Water, Sewerage, and Drainage Act 1924 (NSW), s 30(1)(a). 11 Metropolitan Water, Sewerage, and Drainage Act 1924 (NSW), s 30(1)(f). 12 Metropolitan Water, Sewerage, and Drainage Act 1924 (NSW), s 30(1)(g). Crennan Bell enter upon any Crown or private land, public road, or street and lay any water main, pipe or drain therein13. In the exercise of these powers, Sydney Water was subject to the mandate that it inflict as little damage as may be and that it make full compensation for all damage sustained14. The Civil Liability Act Mrs Turano's claim is subject to the provisions of the Civil Liability Act 2002 (NSW) ("the CLA"). Part 1A of the CLA (ss 5-5T) applies to any claim for damages for harm resulting from negligence, regardless of whether the claim is brought in tort, in contract, under statute or otherwise15. Negligence is defined for the purposes of Pt 1A to mean the "failure to exercise reasonable care and skill"16. Section 5B sets out what are described as "[g]eneral principles" and s 5C "[o]ther principles". Part 5 of the CLA (ss 40-46) applies to the civil liability in tort of public and other authorities17. It extends to any such liability even if the damages are sought in an action for breach of contract or any other action18. A public or other authority includes any public or local authority constituted by or under an Act19. Section 43A of the CLA applies to proceedings for civil liability to which Pt 5 applies to the extent that the liability is based on a public or other authority's exercise of, or failure to exercise, a special statutory power20. A "special statutory power" is a power that is conferred by or under a statute and that is of a 13 Metropolitan Water, Sewerage, and Drainage Act 1924 (NSW), s 32(1)(e). 14 Metropolitan Water, Sewerage, and Drainage Act 1924 (NSW), s 32(4). 15 Civil Liability Act 2002 (NSW), s 5A(1). 16 Civil Liability Act 2002 (NSW), s 5. 17 Civil Liability Act 2002 (NSW), s 40(1). 18 Civil Liability Act 2002 (NSW), s 40(2). 19 Civil Liability Act 2002 (NSW), s 41, definition of "public or other authority", par (e). 20 Civil Liability Act 2002 (NSW), s 43A(1). Crennan Bell kind that persons generally are not authorised to exercise without specific statutory authority21. Sub-section (3) provides: "For the purposes of any such proceedings, any act or omission involving an exercise of, or failure to exercise, a special statutory power does not give rise to civil liability unless the act or omission was in the circumstances so unreasonable that no authority having the special statutory power in question could properly consider the act or omission to be a reasonable exercise of, or failure to exercise, its power." Sydney Water did not plead reliance on s 43A in its notice of grounds of defence. No reference was made to the operation of the provision before the primary judge or in the Court of Appeal. At the conclusion of the hearing in this Court, senior counsel for Sydney Water drew attention to the provision and informed the Court that it had not been argued below and that Sydney Water did not invoke it on the appeal. Following the hearing, the Court raised with the parties whether the existence of a duty of care at common law owed by Sydney Water to Mrs Turano is a hypothetical question in light of s 43A, or not one that can properly be decided without regard to the operation of the provision. The parties were invited, in the event that the answer to either question was "yes", to address the further question of whether special leave should be revoked. They were asked to indicate whether it was desired to have the Court hear further oral argument. Neither party sought to take up the latter invitation. On the hearing of the appeal Sydney Water submitted that in an action in tort in New South Wales a plaintiff is required to establish a legal obligation owed to him or her requiring the defendant to exercise reasonable care and skill before Pt 1A of the CLA is engaged. It followed that the existence and extent of any duty of care owed by Sydney Water to Mrs Turano is to be determined by the application of the common law. In the event that a duty is found to exist, Pt 1A is said to govern the determination of whether the defendant is held to have failed to exercise reasonable care and skill. On this analysis the heading of Div 2 of Pt 1A (ss 5B, 5C), "Duty of care", is a misnomer. In Sydney Water's submission, the provisions of Div 2 are a statutory modification of the principles stated by Mason J in Wyong Shire Council v Shirt22 for the determination of the 21 Civil Liability Act 2002 (NSW), s 43A(2). 22 (1980) 146 CLR 40 at 47-48; [1980] HCA 12. Crennan Bell issue of breach. Senior counsel for Mrs Turano adopted this analysis of the relationship between the common law and the CLA on the hearing of the appeal. In its supplementary submissions, in answer to the questions asked by the Court, Sydney Water maintained (consistently with the stance that it had taken on the hearing of the appeal) that s 43A does not speak to whether a legal obligation is imposed on a public authority to exercise reasonable care and skill for the benefit of another. It also submitted that it is unclear that the installation of a water main under statutory power involves the exercise of a "special statutory power" within the meaning of s 43A(2). Mrs Turano submitted that the provisions of s 43A operate to confer immunity on a public authority in relation to the exercise of, or failure to exercise, a special statutory power subject only to the proviso in sub-s (3). In her submission, it is plain that the installation of a water main under statutory power engages the immunity. It followed on this view that the proceedings are singular and do not raise a question of general importance concerning the liability of public authorities in tort in New South Wales. She submitted that the grant of special leave should be revoked. Following the final report of the Ipp Committee23, a number of jurisdictions, including New South Wales, enacted legislation modifying the liability of public authorities in tort24. The approach has not been uniform. In New South Wales, Pt 5, dealing with the liability of public and other authorities, was introduced into the CLA25. Section 43A was introduced into Pt 5 at a later date, apparently as a reaction to a decision at first instance of the New South Wales Supreme Court26. The history of s 43A is referred to in Precision Products (NSW) Pty Ltd v Hawkesbury City Council27. In that case the Court's 23 Australia, Review of the Law of Negligence: Final Report, September 2002. 24 Civil Liability Act 2002 (NSW), Pt 5; Wrongs Act 1958 (Vic), s 84; Civil Liability Act 2003 (Q), s 36; Civil Liability Act 2002 (WA), s 5X; Civil Liability Act 2002 (Tas), Pt 9; Civil Law (Wrongs) Act 2002 (ACT), Ch 8. 25 Civil Liability Amendment (Personal Responsibility) Act 2002 (NSW). 26 Civil Liability Amendment Act 2003 (NSW), Sched 1. 27 [2008] NSWCA 278 at [167] per Allsop P (Beazley and McColl JJA concurring) citing, inter alia, the Second Reading Speech for the Bill for the Civil Liability (Footnote continues on next page) Crennan Bell consideration of the operation of s 43A was undertaken in the context of the analysis of breach of duty in circumstances in which the parties had not addressed full argument on the terms of the section. This Court does not have the benefit of the consideration by the New South Wales Court of Appeal of the correctness of the assumption on which the appeal was argued: that the legal obligation on a defendant to exercise care and skill for the benefit of a plaintiff is to be found outside the framework of the CLA. This appeal does not provide the occasion to consider the operation of s 43A. Mrs Turano's submission that laying a water main pursuant to the power conferred under the MWS&D Act plainly involves the exercise of a "special statutory power" is not one that can be accepted in the absence of full argument. Professor Aronson has written of s 43A28 that it is important to understand "We know from Hansard that the section was intended to apply to doctors performing certification roles under the mental health legislation30. By analogy and equally unfortunately, it may also apply in the context of police watch-houses and prisons, but nothing is certain." Professor Aronson refers to the definition of "special statutory power" in s 43A(2), stating that this talks separately of "power" and "authority". He goes Amendment Act 2003 (NSW): New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 13 November 2003 at 4992-4993. 28 Aronson, "Government Liability in Negligence", (2008) 32 Melbourne University Law Review 44 at 78-79. 29 Aronson, "Government Liability in Negligence", (2008) 32 Melbourne University Law Review 44 at 78. 30 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 13 November 2003 at 4993. 31 Aronson, "Government Liability in Negligence", (2008) 32 Melbourne University Law Review 44 at 78-79. Crennan Bell "The idea appears to have been to distinguish statutory authority per se β¦ from statutes permitting coercive acts or non-consensual rights-depriving acts. If that is correct, then one of the limits to the section's scope is that the defendant must have received statutory authority to act in a way that changes, creates or alters people's legal status or rights or obligations without their consent." In light of the conduct of the proceedings below and the uncertain reach of s 43A, the question upon which special leave was granted should not be seen as hypothetical. It should be added that at the trial Sydney Water did not lead any evidence of its financial or other resources, so as to raise the operation of s 42 of the CLA with respect to its liability to Mrs Turano. Section 42 lays out certain principles respecting resources and responsibilities of public authorities, which apply in determining the existence or breach of a duty of care. The facts of the case The evidence at trial largely comprised expert opinion. The Court of Appeal was critical of the primary judge's failure to analyse aspects of the evidence and to record findings in these respects32. Each of the Justices reviewed the evidence. Justices Beazley and Hodgson were in agreement as to the factual findings and the legal conclusions that flowed from them. Justice McColl came to a different conclusion on critical questions of fact. It is sufficient to refer to the primary judge's unchallenged findings of fact and to the further findings of the majority in the Court of Appeal in order to demonstrate that Sydney Water did not owe a duty of care to Mrs Turano and accordingly that the appeal should be allowed. Edmondson Avenue, Austral, runs in a generally north/south direction. It is located in a semi-rural area. On either side of the sealed road surface is a grassed shoulder forming part of the road reserve. The tree was standing on the western grassed shoulder, about 4 metres from the western outlet of a culvert. The culvert had been installed under Edmondson Avenue in the 1960s and was designed to drain water from east to west. Water flowing from the culvert pipe 32 Liverpool City Council v Turano (2008) 164 LGERA 16 at 52-53 [220] per Beazley JA, 56 [236] per Hodgson JA, 64 [278] per McColl JA. Crennan Bell on the western side drained into an outlet pit and from there it had been designed to drain by means of a scalloped area of excavation (a "tail-out drain") to pasture land lying to the west. In about 1981 Sydney Water laid the water main, a cast iron pipe, 900mm below ground in a trench which ran parallel to Edmondson Avenue, under the western grassed shoulder. The water main transversed the outlet pit of the culvert. It was laid at a higher level than the invert of the culvert pipe and this caused it to obstruct the free flow of water from the culvert pipe. The earth of the outlet pit was impermeable clay. The water main was laid on a bed of sand 300mm deep. The sand that was laid in the trench was much more permeable than the clay of the outlet pit. One consequence of this difference was that the trench acted as a drain for the water that periodically collected in the outlet pit. It was probable that excess water reached the roots of the tree by travelling north along the sand-filled trench33. On the day of the accident there was a strong windstorm, which was the immediate cause of the tree's fall. An underlying cause of the fall was that the tree's root system had been compromised by the presence of phytophthera, a root pathogen. The intermittent water-logging of the root system had facilitated the introduction of the pathogen34. The water main had been laid in accordance with standard engineering practice. A consultant engineer, Mr Burn, gave uncontradicted evidence that a person installing a water main in a bed of sand in this location would have appreciated that the sand-filled trench would probably create a north/south drain. He considered that this result could have been avoided by installing a drain to the west, although this would have required Sydney Water to work on private land. Alternatively, Mr Burn pointed out that the water main could have been laid under the bed of the culvert. 33 Liverpool City Council v Turano (2008) 164 LGERA 16 at 51-52 [214] per 34 Liverpool City Council v Turano (2008) 164 LGERA 16 at 51-52 [214] per Crennan Bell At the time of the accident there were about 64,000 trees planted along roads under the Council's control. The Council's risk management co-ordinator gave evidence that the Council did not carry out routine inspections of trees and culverts located on its land; it would only do so in response to a complaint or report in respect of the condition of a particular asset. The Council was not notified of the installation of the water main and it had no knowledge that the water main was laid in a sand-filled trench. In November 1999 the Council surveyed the area in the course of undertaking preparatory work for a road-widening proposal of Edmondson Avenue. The survey identified the water main and recorded its height relative to the invert of the culvert pipe. The tree had white marks which were on the trunk located about one metre above the ground. These were indicative of the presence of phytophthera, within the trunk or lower root system. The crown of the tree did not show signs of distress. It was not clear that the white marks on the tree would have been visible from a passing car. The primary judge's reasons The primary judge referred to the evidence that the installation of the water main interrupted the flow of water from the culvert, which was likely to lead to water pooling from time to time. His Honour appears to have accepted that it was probable that water which was partly dammed in the outlet pit reached the tree's root system by travelling along the sand-filled trench35. He observed that there was no evidence that Sydney Water had obtained or was required to obtain an arborist's opinion before installing the water main. He found that it was not foreseeable by Sydney Water that water travelling along the sand-filled trench would undermine the tree to such an extent that it would eventually become unstable and fall. It followed that Sydney Water did not owe a duty of care for the benefit of Mrs Turano when it laid the water main36. 35 Turano v Liverpool City Council unreported, District Court of New South Wales, 2 May 2007 at [144] per Delaney DCJ. 36 Turano v Liverpool City Council unreported, District Court of New South Wales, 2 May 2007 at [148]-[150] per Delaney DCJ. Crennan Bell The Court of Appeal's reasons Justice Beazley identified two errors in the primary judge's analysis of Sydney Water's liability. First, her Honour considered that the primary judge had wrongly focussed on foreseeability of the precise sequence of events in determining the question of the duty of care37. She pointed out that it is sufficient that the class of injury, as distinct from the particular injury, be foreseen as a possible consequence of the conduct38. Justice Beazley formulated the question in this way39: "[W]hether it was foreseeable that, by laying the water main in sand which acted as a conduit for water, in circumstances where the water main was installed in a position that both breached the existing drainage system and obstructed the drainage of water from the culvert, that there could be an effect on the surrounding area such as might cause harm." The second error that Beazley JA identified was the primary judge's acceptance that the water main had been laid in accordance with usual practice. This finding overlooked the expert evidence that it was foreseeable that the sand- filled trench would act as a drain. Her Honour considered that it was incumbent upon Sydney Water to have regard to the terrain, including the presence of other installations (the culvert), in which or near which the water main was laid40. The uncontradicted evidence was that the sand would act as a conduit for the water and that by laying the water main at this level water would not drain from the culvert as it had been designed to do. After referring to these matters her Honour addressed Sydney Water's liability to Mrs Turano in this way41: "Given those facts and circumstances, Sydney Water had a duty to install the water main in such a way that the integrity of the culvert drainage system was not compromised. Accordingly, Sydney Water owed Mrs Turano a duty of care of the content or scope that I have described. 37 Liverpool City Council v Turano (2008) 164 LGERA 16 at 50 [201]-[203]. 38 Mount Isa Mines Ltd v Pusey (1970) 125 CLR 383 at 390; [1970] HCA 60. 39 Liverpool City Council v Turano (2008) 164 LGERA 16 at 50 [203]. 40 Liverpool City Council v Turano (2008) 164 LGERA 16 at 50 [205]. 41 Liverpool City Council v Turano (2008) 164 LGERA 16 at 51 [210]-[211]. Crennan Bell In my opinion it is also clear on the evidence that Sydney Water breached that duty in two respects. The first was that by laying the drain at a higher level than the discharge drain from the culvert, it caused periodic damming of the drain. Secondly, by laying the drain in sand, it permitted the water to drain northwards, so as to undermine the roots of the tree." Justice Hodgson did not separately discuss the formulation of the duty of care. His Honour expressed substantial agreement with the reasons of Beazley JA42. He went on to say that the impact on drainage in the surrounding area created by the installation of the water main would have been readily foreseeable by Sydney Water, whose business involved the management of water. He considered that Sydney Water should have carried out the works differently or that it should have investigated the consequences of the periodic saturation of the sand-filled trench43. The latter course should have alerted Sydney Water to the possibility of the roots of the tree being adversely affected. In either case, his Honour concluded Sydney Water should have acted so as to avoid the risk that eventuated44. The parties' submissions Sydney Water submits that the majority in the Court of Appeal imposed on it a duty of care without addressing the question of whether injury to a class of which Mrs Turano was a member was a reasonably foreseeable consequence of its conduct. It complains that the class to whom the duty is owed is not confined within reasonable limits. It contends that the formulation of the scope of the duty reflects reasoning with hindsight from the events that occurred leading to the imposition of a duty of strict liability. Mrs Turano submits that the inferences drawn by the majority in the Court of Appeal were open on the evidence and involved the orthodox performance of its function45. Her claim is for damages for personal injury arising from Sydney 42 Liverpool City Council v Turano (2008) 164 LGERA 16 at 56 [236]. 43 Liverpool City Council v Turano (2008) 164 LGERA 16 at 58 [243]. 44 Liverpool City Council v Turano (2008) 164 LGERA 16 at 58 [243]. 45 Supreme Court Act 1970 (NSW), s 75A; and see Fox v Percy (2003) 214 CLR 118; [2003] HCA 22. Crennan Bell Water's conduct in laying the water main in a manner that created a foreseeable risk of injury to any member of the public present on Edmondson Avenue. In her submission, the lengthy interval between the conduct and the resulting injury does not stand in the way of the imposition of liability. The claim, it is said, is analogous to a claim for the recovery of damages for asbestos-related disease brought many years after the date of exposure to the asbestos fibre. Mrs Turano submits that the conclusion of the majority in the Court of Appeal as to Sydney Water's liability is consistent with the application of settled principle. Discussion The proposition that at common law a public authority may be subject to a general duty of care arising out of its conduct of works pursuant to a statutory power is not in issue46. Sydney Water acknowledged that it may be liable in damages to a person who suffers injury as the result of the rupture of a carelessly installed, defective, water main47. Mrs Turano's claim may be understood as arising from her status as a road user. It is a claim for damages for personal injury. While the class to whom the duty is owed is potentially very large, only those members of it suffering injury as the result of the tree's fall would have a cause of action against Sydney Water. Sydney Water's challenge does not turn on the indeterminacy of the class, defined as road users, so much as on the reasonableness of the conclusion that in 1981 Sydney Water should have had in its contemplation, as persons closely and directly affected by its conduct in laying the water main, persons on or near Edmondson Avenue in 200148. Reasonable foreseeability of the class of injury is an essential condition of the existence of a legal obligation to take care for the benefit of another49. The 46 Geddis v Proprietors of Bann Reservoir (1878) 3 App Cas 430; Caledonian Collieries Ltd v Speirs (1957) 97 CLR 202 at 220 per Dixon CJ, McTiernan, Kitto and Taylor JJ; [1957] HCA 14; Metropolitan Water, Sewerage and Drainage Board v O K Elliott Ltd (1934) 52 CLR 134; [1934] HCA 57. 47 [2009] HCATrans 135 at 149-151. 48 Donoghue v Stevenson [1932] AC 562 at 580 per Lord Atkin; Sullivan v Moody (2001) 207 CLR 562 at 576 [42] per Gleeson CJ, Gaudron, McHugh, Hayne and Callinan JJ; [2001] HCA 59. 49 Sullivan v Moody (2001) 207 CLR 562 at 576 [42] per Gleeson CJ, Gaudron, McHugh, Hayne and Callinan JJ. Crennan Bell concept is relevant at each of the three, related, stages of the analysis of liability in negligence: the existence and scope of a duty of care, breach of the duty, and remoteness of damage. At the first stage, the inquiry has been said to involve the assessment of foreseeability conducted at "a higher level of abstraction"50 than at the subsequent stages. However, to speak of a higher level of abstraction in dealing with that first stage does not support a formulation of duty in terms devoid of meaningful content51. It remains, as Gleeson CJ observed in Tame v New South Wales52, that the concept is to be understood and applied with due regard to the consideration that, in the context of the issue as to duty of care, it is bound up with the question of whether it is reasonable to require a person to have in contemplation the risk of injury that has eventuated. It was not necessary that the precise sequence of events leading to Mrs Turano's injury be foreseen53. However, it was necessary to show that in 1981 it was foreseeable by Sydney Water that laying a water main in a bed of sand in this location involved a risk of injury to road users. The evidence was that in 1981 it was foreseeable that laying a water main in a sand-filled trench transversing the culvert outlet pit would create a drain carrying water that collected in the pit north/south along its length. There was no evidence that it was foreseeable by Sydney Water that altering sub-surface drainage in this way was likely to undermine the integrity of the roots of nearby trees. The primary judge found that it was not foreseeable by Sydney Water that the water travelling along the trench would undermine the tree to such an extent that it would eventually become unstable and fall54. His reasons do not suggest that he misapprehended the nature of the inquiry. The conclusion of the majority in the Court of Appeal, that harm to the tree was a foreseeable consequence of laying 50 Vairy v Wyong Shire Council (2005) 223 CLR 422 at 446-447 [70]-[72] per Gummow J; [2005] HCA 62; Shirt v Wyong Shire Council [1978] 1 NSWLR 631 at 639 per Glass JA. 51 Vairy v Wyong Shire Council (2005) 223 CLR 422 at 447 [73] per Gummow J. 52 (2002) 211 CLR 317 at 331 [12]; [2002] HCA 35. 53 Chapman v Hearse (1961) 106 CLR 112 at 120 per Dixon CJ, Kitto, Taylor, Menzies and Windeyer JJ; [1961] HCA 46; Mount Isa Mines Ltd v Pusey (1970) 125 CLR 383 at 390 per Barwick CJ. 54 Turano v Liverpool City Council unreported, District Court of New South Wales, 2 May 2007 at [150] per Delaney DCJ. Crennan Bell the water main in this location, was an inference drawn from the fact that Sydney Water was an authority involved in the management of water. In the absence of any evidence, the basis for this conclusion may be doubted. However, accepting that the conclusion was open, there remain difficulties with the majority's reasons leading to the finding of liability. In considering the liability of the Council, Beazley JA referred to the observations of Gummow J (with whose reasons in this respect Callinan and Heydon JJ agreed) in Roads and Traffic Authority (NSW) v Dederer55: "First, duties of care are not owed in the abstract. Rather, they are obligations of a particular scope, and that scope may be more or less expansive depending on the relationship in question. Secondly, whatever their scope, all duties of care are to be discharged by the exercise of reasonable care. They do not impose a more stringent or onerous burden." However, when it came to considering the liability of Sydney Water, Beazley JA stated the duty in absolute terms: not to compromise the integrity of the culvert drainage system. It was a duty called into existence because it was foreseeable that laying a water main in a trench that acted as a conduit for water could have "an effect on the surrounding area such as might cause harm"56. Neither the formulation of the duty nor the anterior inquiry as to foreseeability addressed the risk of injury to Mrs Turano or a class of persons of which she was a member. In terms, it was a strict duty requiring that Sydney Water preserve the existing drainage in the vicinity of its installation in order to prevent a foreseeable risk of shortening the life of surrounding vegetation. Stated in this way the force of Sydney Water's complaint, that the scope of the duty was derived by reasoning backwards from the events that occurred, can be seen. It was not a duty requiring Sydney Water to take reasonable care to avoid injury to road users in carrying out its works. The majority's conclusion of breach was inevitable having regard to the formulation of the scope of the duty. Thus, there was no consideration of the general and other principles stated in ss 5B and 5C of the CLA. Consideration of these principles would have directed attention to the question of whether in 1981 a water authority acting reasonably ought to have obtained the advice of an arborist on the impact of its proposed works on vegetation growing in an unpopulated, semi-rural area. 55 (2007) 234 CLR 330 at 345 [43]; [2007] HCA 42. 56 Liverpool City Council v Turano (2008) 164 LGERA 16 at 50 [203]. Crennan Bell The impact of the altered drainage from the outlet pit was such that over a lengthy period the tree's stability was compromised. The conditions that produced its fall in the windstorm took effect after 20 years. It is reasonable to consider that those conditions might have caused the tree to fall in a windstorm after a lesser or greater number of years. The point to be made is that the laying of the water main in this location did not create an immediate risk of harm to road users. The temporal relation between Sydney Water's conduct and Mrs Turano's injury was relevant to the determination of whether the relationship between them gave rise to a duty. A related factor relevant to this inquiry was the circumstance that in the interval between the conduct and the injury the tree was growing on land that was owned by the Council. Sydney Water was empowered to remove trees in the course of carrying out works57. Since the tree was not an obstacle to the installation of the water main and the water main did not create an immediate danger of compromise to the tree, its removal may not have been justified pursuant to the power. (It will be recalled that Sydney Water was required in installing the water main to inflict as little damage as may be58.) Sydney Water had the power to enter upon land in order to carry out an inspection of works59. However, no occasion arose for it to exercise this power in the absence of any report concerning the operation of the water main. On the hearing in the Court of Appeal Mrs Turano did not maintain her case that the Council was negligent by its failure to carry out periodic inspections of roadside trees. This was realistic in light of the evidence to which Beazley JA referred, that Edmondson Avenue is located in a semi-rural area, with no houses or buildings in the immediate vicinity, and that the tree population was sparse60. The evidence of an arborist, Mr Castor, which McColl JA extracted in her reasons, may also be noted61: 57 Metropolitan Water, Sewerage, and Drainage Act 1924 (NSW), s 32(1)(a). 58 See [12]. 59 Metropolitan Water, Sewerage, and Drainage Act 1924 (NSW), s 38(1). 60 Liverpool City Council v Turano (2008) 164 LGERA 16 at 38 [124]. 61 Liverpool City Council v Turano (2008) 164 LGERA 16 at 66-67 [304]. Crennan Bell "Not all tree failure is predictable. Not all tree failures can be explained even after the event. No tree is completely safe. Trees are living organisms which are anchored to the ground and so are subject, in situ, to activities and stresses from man and nature. β¦ For a tree hazard to exist there must be a potential for failure and a potential for injury or damage to result. Dead trees in remote locations are often less hazardous than healthy trees in built-up areas." Nonetheless, it was necessary in considering the liability of Sydney Water to take into account that, in the years between the installation of the water main and Mrs Turano's injury, the risk of the tree's collapse was one over which the Council and not Sydney Water had control. It is true that the Council was not on notice that the water main was laid in a sand-filled trench. However, it would not be right to characterise Sydney Water as having created a hidden danger by the installation of the water main in this location. Its presence transversing the outlet pit was observable. The adverse impact on vegetation brought about by altered drainage might be expected to be apparent to the owner of land. The circumstance that the presence of the pathogen in the tree was not readily observable does not provide a justification for holding Sydney Water liable after an interval of 20 years for the injury occasioned by the tree's failure. Conclusion Sydney Water's conduct in laying the water main in this location in 1981 with the consequential alteration to drainage flows from the culvert and any foreseeable risk to the health of the tree did not impose on it a legal duty of care for Mrs Turano's benefit. The reason for this may be expressed as a conclusion that injury to road users as the result of the tree's eventual collapse was not a reasonably foreseeable consequence of laying the water main, as the primary judge held. Alternatively, it may be expressed as a conclusion that in the absence of control over any risk posed by the tree in the years after the installation of the water main there was not a sufficiently close and direct connection between Sydney Water and Mrs Turano, a person present on Edmondson Avenue in 2001, for her to be a "neighbour" within Lord Atkin's statement of the principle. Orders The appeal should be allowed and the following orders made62: 62 In his judgment, delivered on 2 May 2007, Delaney DCJ set out declarations and orders in numbered sub-paragraphs (par [155]). These orders were entered on (Footnote continues on next page) Crennan Bell Leave to file the amended notice of appeal dated 9 July 2009 granted. Appeal allowed. Set aside the following orders of the Court of Appeal of the Supreme Court of New South Wales: orders 4, 6, and 8 of the orders made on 31 October 2008; that part of order 5 of the orders made on 31 October 2008 which set aside orders and declarations stated at [155] of the judgment of Delaney DCJ numbered 2 and 3; and order 1 of the orders made on 2 July 2009. In lieu thereof, order that the cross-appeal to the Court of Appeal be dismissed with costs. First respondent to pay the costs of the appellant in this Court. 22 May 2007. The numbering of the orders entered on that date differs from the numbering set out in par [155] of the judgment. The orders of the Court of Appeal made on 31 October 2008 are expressed by reference to the "orders and declarations stated at [155] of the judgment of Delaney DCJ". Order 3(b) made by this Court reflects this circumstance. |
HIGH COURT OF AUSTRALIA CTM AND THE QUEEN APPELLANT RESPONDENT CTM v The Queen [2008] HCA 25 11 June 2008 ORDER Appeal dismissed. On appeal from the Supreme Court of New South Wales Representation T A Game SC and A C Haesler SC with J S Manuell for the appellant (instructed by Legal Aid Commission of NSW) D C Frearson SC with J A Girdham for the respondent (instructed by Solicitor for Public Prosecutions (NSW)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS CTM v The Queen Criminal law β Sexual intercourse with child aged between 14 and 16 years β Whether common law ground of exculpation of honest and reasonable mistake of fact applies to offence under s 66C(3) of the Crimes Act 1900 (NSW) β Whether accused entitled to place reliance on honest and reasonable mistake of fact where conduct the subject of charge is denied. Criminal law β Onus and standard of proof β Whether accused obliged to establish honest and reasonable mistake of fact β Whether accused obliged to "enliven" issue of honest and reasonable mistake of fact β Whether accused obliged to adduce evidence in support of contention of honest and reasonable mistake of fact β Whether there was sufficient evidential foundation for contention of honest and reasonable mistake of fact β Whether issue of honest and reasonable mistake of fact sufficiently raised at trial β Whether trial judge obliged to direct jury on issue of honest and reasonable mistake of fact β Adequacy of trial judge's directions to jury. Criminal law β Appeal β Application of "proviso" β Whether there occurred substantial miscarriage of justice β Whether appellate court able to conclude that no substantial miscarriage of justice occurred where misdirection on onus and standard of proof is demonstrated. Words and phrases β "defence", "honest and reasonable mistake of fact", "substantial miscarriage of justice". Crimes Act 1900 (NSW), ss 66C(3), 66E(1A), 77. Criminal Appeal Act 1912 (NSW), s 6(1). GLEESON CJ, GUMMOW, CRENNAN AND KIEFEL JJ. In 1897, Sir Samuel Griffith, then Chief Justice of Queensland, prepared for the Government of Queensland a Draft Code of Criminal Law. In a letter to the Attorney-General, enclosing this monumental work, Sir Samuel wrote1: "Criminal Responsibility. β This most important and difficult branch of the law is dealt with in Chapter V. I have appended to several of the sections Notes to which I invite special attention. No part of the Draft Code has occasioned me more anxiety, but I may add that I regard no part of the work with more satisfaction." Chapter V of the Draft Code dealt, among other things, with the mental element necessary to attract criminal responsibility. It included the following provision: "26. A person who does or omits to do an act under an honest and reasonable, but mistaken, belief in the existence of any state of things is not criminally responsible for the act or omission to any greater extent than if the real state of things had been such as he believed to exist. The operation of this rule may be excluded by the express or implied provisions of the law relating to the subject." In a marginal note against that provision, Sir Samuel wrote: "Common Law"2. The provision was enacted as s 24 of the Criminal Code (Q). In Thomas v The King3, Dixon J said that the language of the Code, which was also taken up in the other Code States of Tasmania and Western Australia, in this respect reflected the common law with complete accuracy4. Clause 26 appears to have been taken substantially from Stephen's Digest of the Criminal Law5, and was in 1 Griffith, Draft of a Code of Criminal Law, (1897) at x. 2 Griffith, Draft of a Code of Criminal Law, (1897) at 13. (1937) 59 CLR 279 at 305-306; [1937] HCA 83. 4 For later acceptance of the common law principle in this Court, see, for example, Proudman v Dayman (1941) 67 CLR 536; [1941] HCA 28; He Kaw Teh v The Queen (1985) 157 CLR 523; [1985] HCA 43; Jiminez v The Queen (1992) 173 CLR 572; [1992] HCA 14; Macleod v The Queen (2003) 214 CLR 230; [2003] HCA 24. 5 Stephen's Digest of the Criminal Law, 3rd ed (1883) at 26. Crennan accordance with what Cave J said in R v Tolson6 (a bigamy case in which the accused, at the time of the second marriage, believed on reasonable grounds that her husband was dead): "At common law an honest and reasonable belief in the existence of circumstances, which, if true, would make the act for which a prisoner is indicted an innocent act has always been held to be a good defence." In the same case, Cave J explained the reason for the principle7: "Now it is undoubtedly within the competence of the legislature to enact that a man shall be branded as a felon and punished for doing an act which he honestly and reasonably believes to be lawful and right; just as the legislature may enact that a child or a lunatic shall be punished criminally for an act which he has been led to commit by the immaturity or perversion of his reasoning faculty. But such a result seems so revolting to the moral sense that we ought to require the clearest and most indisputable evidence that such is the meaning of the Act." What is involved is a basic legal principle of criminal responsibility which informs our understanding, and interpretation, of the criminal law. That law is, to a large extent, although in most Australian jurisdictions not completely, governed by statute. The Crimes Act 1900 (NSW) ("the Crimes Act") is not a code, but it contains provisions dealing with most serious offences against the person. The legal effect of some of those provisions, of which those relating to homicide are a well-known example, can be understood only against a background of common law principle8. Where the problem is one of interpretation of what Parliament has enacted, general principles of criminal responsibility inform such interpretation, but ultimately it is the language of the statute that is controlling. A principle as to criminal responsibility, such as that described above, as is acknowledged, may be excluded by a sufficiently plain manifestation of legislative intention. (1889) 23 QBD 168 at 181. (1889) 23 QBD 168 at 182. 8 See, for example, R v Lavender (2005) 222 CLR 67; [2005] HCA 37. Crennan Cave J's description of a mistaken belief of the kind he was discussing as a "defence", and Sir Samuel Griffith's Draft Code, preceded Woolmington v Director of Public Prosecutions9 by almost 40 years. Questions of onus and standard of proof now need to be considered in the light of later developments in the law. References to arguments raised on behalf of the accused at a criminal trial as a defence, or a ground of exculpation, may be harmless enough if they do not pre-empt questions of onus of proof. People understandably feel the need to call them something, and the adversarial setting of a trial leads judges and practitioners sometimes to refer to any point relied upon by an accused as a defence. So, for example, in the plurality judgment in this Court in Jiminez v The Queen10, honest and reasonable mistake was referred to as an "excuse" and a "defence". By reference to a leading decision of this Court on the subject, it is sometimes called "the Proudman v Dayman defence". Such descriptions have their dangers, but the shorthand may be convenient provided it is understood for what it is. Honest and reasonable mistakes of fact do not cover the whole field of risk of criminal liability to which a person may be exposed by making an error. Mistakes of law are not a ground of exculpation: ignorance of the law is no excuse11. Moreover, the moral sense invoked by Cave J, at least in Australian law, does not extend to cover unreasonable mistakes12. The concept of mistake itself is protean13. The state of mind that, in a given set of circumstances, will qualify as a mistaken belief in a fact or state of affairs may be a matter of difficulty. An honest and reasonable belief in a certain fact or state of affairs may be very different from an absence of concern. Even so, the point made by Cave J at the end of the second passage quoted above continues to be of fundamental importance to the function of courts in seeking to find and give effect to the meaning of criminal legislation. While the strength of the consideration may vary according to the subject matter of the legislation14, when 10 (1992) 173 CLR 572 at 581-582. 11 See, for example, Ostrowski v Palmer (2004) 218 CLR 493; [2004] HCA 30. 12 Thomas v The King (1937) 59 CLR 279; Proudman v Dayman (1941) 67 CLR 536; He Kaw Teh v The Queen (1985) 157 CLR 523. 13 State Rail Authority of NSW v Hunter Water Board (1992) 28 NSWLR 721 at 724. 14 As explained by Dixon J in Proudman v Dayman (1941) 67 CLR 536 at 540. Crennan an offence created by Parliament carries serious penal consequences, the courts look to Parliament to spell out in clear terms any intention to make a person criminally responsible for conduct which is based on an honest and reasonable mistake. This appears to us to be closely related to the principle of statutory interpretation which was discussed v The Commonwealth15, Al-Kateb v Godwin16, and Electrolux Home Products Pty Ltd v Australian Workers' Union17, and which was applied by the whole Court in the several judgments in Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission18. There is no present need to expand upon that discussion. in Plaintiff S157/2002 Where it is a ground of exculpation, the law in Australia requires that the honest and reasonable, but mistaken, belief be in a state of affairs such that, if the belief were correct, the conduct of the accused would be innocent. In that context, the word "innocent" means not guilty of a criminal offence. In the case of an offence, or a series of offences, defined by statute, it means that, if the belief were true, the conduct of the accused would be "outside the operation of the enactment"19. As explained in He Kaw Teh v The Queen20, the evidentiary onus of raising the ground of exculpation is on the accused, but, once that occurs, the ultimate legal onus of displacing the ground lies on the prosecution. The concept of evidentiary onus itself needs to be understood in the light of the subject matter to which it applies; here, honest and reasonable belief, a concept that has a subjective element of a kind that ordinarily is peculiarly within the knowledge of the accused, and an objective element that must be capable of being measured against the evidence by a tribunal of fact. Sir Samuel Griffith's qualification, that the operation of the rule stated in the first paragraph of cl 26 (later s 24) may be excluded by the express or implied provisions of the law relating to the subject, was exemplified by the provisions of 15 (2003) 211 CLR 476 at 492 [30]; [2003] HCA 2. 16 (2004) 219 CLR 562 at 577 [19]; [2004] HCA 37. 17 (2004) 221 CLR 309 at 328-329 [19]-[21]; [2004] HCA 40. 18 (2002) 213 CLR 543 at 553 [11], 562-563 [43], 576 [88], 592-593 [134]; [2002] HCA 49. 19 Proudman v Dayman (1941) 67 CLR 536 at 541. 20 (1985) 157 CLR 523 at 534-535. Crennan his Draft Code concerning the topic with which the present appeal is concerned, a topic which used to be described as carnal knowledge by a male of a female under the age of consent. There is a long history, in Australia, of criminal statutes which punished not only rape, that is, unlawful carnal knowledge of a female of any age without her consent, but also any unlawful carnal knowledge of a female below a certain age. (We are not presently concerned with sexual abuse of infants of tender years, or others for whom the concept of consent may have no practical meaning.) There is an obvious question which arises in the case of any such law: when Parliament specifies an age below which consent is no answer to a charge, what is the position of an accused who honestly and reasonably believed that the female concerned was above that age? In the Draft Code, there were two provisions that illustrate how the problem may be approached. They also exemplify the qualification in the second paragraph of cl 26. Rather than rely on the general operation of the rule in the first paragraph of cl 26, a cognate, but different, provision, more carefully tailored to the particular subject matter, was included. Chapter XXII in Pt IV dealt with "Offences against Morality". Clauses 219, 221 and 222 dealt with certain conduct in relation to girls under 12 and 10, and between the ages of 12 and 14, respectively. Clause 219 provided, relevantly: "Any person who has unlawful carnal knowledge of a girl under the age of twelve years is guilty of a crime, and is liable to imprisonment with hard labour for life, with or without whipping." The clause said nothing about any defence. It did, however, provide a special penalty regime for offenders who were themselves under the age of 16. The court was empowered, instead of sentencing these offenders to any term of imprisonment, and with or without ordering any whipping, to order detention for a period not exceeding three years in an industrial or reformatory school. Clause 221 provided, relevantly: "A person who attempts to have unlawful carnal knowledge of a girl under the age of ten years is guilty of a crime, and is liable to imprisonment with hard labour for fourteen years, with or without whipping, which may be inflicted once, twice or thrice." Clause 222 provided, relevantly: "Any person who β Crennan (1) Has or attempts to have unlawful carnal knowledge of a girl under the age of fourteen years and of or above the age of twelve years β¦ is guilty of a misdemeanour, and is liable to imprisonment with hard labour for two years. It is a defence to a charge of either of [such] offences ... to prove that the accused person believed, on reasonable grounds, that the girl was of or above the age of fourteen years." Those provisions reflected then current United Kingdom legislation. The following comments may be made. First, the penalty provisions of cl 219 referred to the fact that, in the case of consensual sexual activity with under-age females, the male party may be of approximately the same age as the female. Secondly, the defence, based on honest and reasonable mistake as to age, provided by cl 222, was absent from cll 219 and 221: a clear indication of intention that the general exculpatory provisions of cl 26 were not to apply to cl 219 or cl 221, and that there was to be a special regime for offences of this kind. Thirdly, the terms of cl 222 put on the accused the onus of establishing the defence provided. The term "defence" was used with technical accuracy. We have referred to Sir Samuel Griffith's Draft Code as a convenient reference point to illustrate certain considerations that might reasonably be expected to be present in the mind of anyone framing legislation on this topic. Legislation making it an offence for a male to have sexual relations with a female under a certain age commonly has differentiated between females of various ages, ranging through degrees, from infants of tender years, to people who might be mature adolescents. (Concepts of maturity themselves vary over time. There was a time when the age at which a female could marry was 1221; hence the need to distinguish "unlawful" carnal knowledge.) We leave to one side, for the moment, the way in which such laws differentiated between heterosexual and homosexual activity. In dealing with conduct involving sexual relations with a female at the higher end of whatever range is chosen, such legislation typically addressed the possibility of an honest and reasonable mistake as to age. This is a problem inherent in the nature of the issue with which such legislation is concerned. When Parliament stipulates that, regardless of any question of consent, it is a serious crime for a male to have sexual relations with a female under a certain age, it is impossible to ignore the case of an alleged offender who 21 Joske, Matrimonial Causes and Marriage: Law and Practice, 5th ed (1969) at Crennan honestly and reasonably believes that the female is above the specified age. It would be absurd to suggest that honest and reasonable mistakes of that kind are never made. When they occur, how is the law to deal with them? A similar (but not identical) answer was given in almost all examples of legislation on this topic in Australian jurisdictions, and in countries of a similar legal background. A related matter is how the law is to deal with the not uncommon case of the offender who is approximately the same age as the victim. The present appeal provides an example. At the relevant time, the appellant was 17, and the complainant was 15. The term "sexual predator" may be appropriate to describe some people who engage in sexual activity with consenting 15-year old females, but it is hardly of universal application. The present appellant was himself, in the eyes of the law, a child, and this was potentially relevant both to the procedures that governed his prosecution and to questions of penalty. The facts of the present case illustrate a kind of adolescent behaviour that lies within the spectrum of conduct which the New South Wales Parliament must have had in contemplation when it enacted the legislative changes that give rise to the primary issue in this appeal. It is unnecessary to examine the various ways in which Parliaments in comparable jurisdictions have responded to the issues identified above. The history of United Kingdom legislation on the topic was described, without admiration, by Lord Bingham of Cornhill in R v K22. Section 5 of the Criminal Law Amendment Act 1885 (UK) made it an offence to carnally know a girl over 13 years but under 16 years, subject to a proviso that it was a defence if the accused had reasonable cause to believe that the girl was over 16 years. In 1922, the legislation was amended to provide that reasonable cause to believe that a girl was over 16 years should not be a defence. This, however, was subject to the further proviso that, in the case of a man of 23 years or under, reasonable cause to believe that the girl was over 16 years was a valid defence on the first occasion on which he was charged with such an offence. In most common law jurisdictions, homosexual offences involving males were the subject of a different legislative regime. However, in setting the historical context for a consideration of the New South Wales legislation which governs the present appeal, it is important to note a New South Wales decision of which the framers of the legislation must have been aware. In Chard v Wallis23, 22 [2002] 1 AC 462 at 467-469 [4]-[10]. 23 (1988) 12 NSWLR 453. Crennan the accused was charged with a contravention of s 78Q(2) of the Crimes Act. That was one of a series of homosexual offences, the relevant age of consent being 18 years. Although the Crimes Act said nothing on the matter, Roden J, applying the general principle earlier mentioned, held that a mistaken but reasonable belief that the male in question was above the age of 18 years was a ground of exculpation. In the Court of Criminal Appeal in the present case, that decision. Nevertheless it has stood since 1988, and there was nothing said in Parliament when the current legislation was enacted to acknowledge a legislative intention to reverse it. In its application to homosexual acts, that decision had a consequence that was in some respects similar to, and in other respects different from, the statutory provision for a defence in the case of a charge of carnal knowledge of a female. indicated some doubt about the correctness of The New South Wales legislation before 2003 This appeal is concerned with the effect of certain amendments, in 2003, to a number of provisions of the Crimes Act dealing with sexual offences. Those provisions had been the subject of much legislative attention, and alteration, over the years. For purposes directly relevant to the kind of offence of which the appellant was convicted, it is sufficient to note that the Crimes Act, as it stood in 2002, as well as making it an offence to have sexual intercourse with another person without that other person's consent knowing of such absence of consent (s 61I), provided for various offences of carnal knowledge which could be committed in different circumstances. Sexual intercourse with a person under the age of 10 years was one offence (s 66A). Sexual intercourse with a person between the ages of 10 and 16 years was a different offence (s 66C). Section 77 provided: "Consent no defence in certain cases Except as provided by subsection (2), the consent of the child or other person to whom the charge relates shall be no defence to a charge under section 61E(1A), (2) or (2A), 61M(2), 61N(1) or 61O(1) or (2), 66A, 66B, 66C, 66D, 66EA, 66F, 67, 68, 71, 72, 72A, 73, 74 or 76A or, if the child to whom the charge relates was under the age of 16 years at the time the offence is alleged to have been committed, to a charge under section 61E(1), 61L, 61M(1) or It shall be a sufficient defence to a charge which renders a person liable to be found guilty of an offence under section 61E(1A), (2) or (2A), 61N(1), 61O(1) or (2), 66C, 66D, 71, 72 or 76A or, if the Crennan child to whom the charge relates was under the age of 16 years at the time the offence is alleged to have been committed, to a charge under section 61E(1), 61L, 61M(1) or 76 if the person charged and the child to whom the charge relates are not both male and it is made to appear to the court or to the jury before whom the charge is brought that: the child to whom the charge relates was of or above the age of 14 years at the time the offence is alleged to have been committed, the child to whom the charge relates consented to the commission of the offence, and the person so charged had, at the time the offence is alleged to have been committed, reasonable cause to believe, and did in fact believe, that the child to whom the charge relates was of or above the age of 16 years." In the result, sexual intercourse with a child under the age of 10 years was an offence for which the necessary mental element, or intention, was uncomplicated. It was necessary for the prosecution to prove an intentional act of sexual intercourse with a certain person, and to prove that the person was under the age of 10 years. Those were the elements of the offence, proof of which established guilt. For an offence against s 66C (sexual intercourse with a person between the ages of 10 and 16), considered in the light of s 77(2), the position was more complicated. It depended upon whether the conduct was homosexual or heterosexual, whether the alleged victim was 14 years of age or older, and whether the alleged victim consented. If the necessary conditions in those respects were fulfilled, then honest and reasonable mistake as to age, if made to appear, was a defence. Sub-section (2) of s 77, although in a broad sense it dealt with the topic of honest and reasonable mistake, was an elaborate provision, reflecting a number of legislative concerns and, perhaps, compromises. It did not apply where both parties to the conduct in question were male. It placed the onus on the accused relying on the defence it provided. It dealt, not only with both objective and subjective matters as to age (actual age and reasonable and honest belief about age), but also with the matter of consent. In the latter respect, as the opening words of sub-s (1) indicated, it qualified sub-s (1). Although absence of consent was not an element of the offence created by s 66C, the presence of consent was an aspect of the defence provided by s 77(2), or, to put it another way, it was a condition of the (limited) availability of a defence of honest and reasonable mistake as to age. Crennan The 2003 amendments The Crimes Amendment (Sexual Offences) Act 2003 (NSW) made substantial amendments to the sexual offences provisions of the Crimes Act. Of direct relevance to the present case are the amendments made to ss 66C and 77. Of indirect, but substantial, relevance are other amendments designed to give effect to one of the purposes stated in the long title to the Act, "to provide for the equal treatment of sexual offences against males and females". In that respect, it established what the Attorney-General described as "an equal age of consent". "Equalising the age of consent to 16 is just one of the many objectives of the bill β¦ The safeguards now include the removal of the express defence [to a charge] of carnal knowledge based on reasonable mistake of age". said25: In an earlier speech in Parliament on the same Bill, the Attorney-General "The bill eliminates the defence currently available to consensual sexual activity with young people aged between 14 and 16 years, formerly known as carnal knowledge. The bill removes the express statutory defence presently provided in section 77(2)(c) of the Crimes Act that the person charged had reasonable cause to believe, and did in fact believe, that the child was of or above the age of 16 years. As a consequence, it will no longer be possible to argue that a uniform age of consent of 16 years creates an effective age of consent of 14 years." What the Attorney-General did not say was that the "express defence" in s 77(2) was a statutory narrowing of a wider potential ground of exculpation that, according to established principle, would at least arguably have been available 24 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 21 May 2003 at 898-899. 25 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 7 May 2003 at 376. Crennan otherwise and that, in 1988, had been held to be available in the case of certain homosexual offences. The 2003 legislation amended s 66C to make it, as it were, gender neutral, but otherwise retained, in terms of offences, and penalties, the distinction between offences against children under 10, children between 10 and 14, and children between 14 and 16. It also amended s 77 by deleting s 77(2), and the opening words of s 77(1). Section 66C, following amendment, and so far as is presently relevant, dealt, in sub-s (1), with sexual intercourse with a person aged between 10 and 14, in sub-s (2) with sexual intercourse with a person aged between 10 and 14 in (defined) circumstances of aggravation and, in sub-s (3), with sexual intercourse with a person aged between 14 and 16. We are presently concerned directly with s 66C(3), which provided that any person who has sexual intercourse with another person who is of or above the age of 14 years and under the age of 16 years is liable to imprisonment for 10 years. The question arises: what does the law now provide if a person charged with an offence against s 66C(3) honestly believed, on reasonable grounds, that the complainant was aged 16 years or over? It has already been noted with reference to what was said by Dixon J in Proudman v Dayman26 that the potential ground of exculpation requires an honest and reasonable belief in a state of affairs which, had it existed, would be such that the accused's conduct was innocent, in the sense earlier explained. It would therefore not assist an accused to believe that a child was aged between 10 and 14, or between 14 and 16; for if the child were of that age, it would merely take the case out of one prohibition into another. The act of consensual sexual intercourse is not of itself an offence. The offence consists in a particular accompanying state of affairs or circumstance (relevantly, age). An honest mistake about the extent to which a child is under- age would merely be a mistake about the kind of offence that is being committed. That would be legally irrelevant to guilt, although it could possibly have some consequence for sentencing purposes. Furthermore, the belief, to be exculpatory, must be reasonable. The greater the gap between the child's true age and the age of 16 years, the less likely it may be, in practice, that such a belief was reasonable. The Attorney-General's speech in Parliament reveals a concern about an argument that, in the case of homosexual intercourse, to reduce the "age of 26 (1941) 67 CLR 536 at 541. Crennan consent" from 18 years to 16 years was, in practice, to reduce it to 14 years. The problem, however, was more complex than that. In the Court of Criminal Appeal, Howie J said: "It has to be said at the outset that I find it remarkable that a section [s 77(2)] that had existed from time immemorial should be repealed without a clear and uncompromising statement being made, either by the draftsperson or by the Minister responsible for the repeal, as to its intended effect. On the face of it a defence to a number of serious criminal offences, carrying substantial sentences of imprisonment as the maximum penalties, was being repealed and yet nothing is expressly stated to indicate any clear understanding by Parliament of the consequence of that repeal. And this in an area of the criminal law which is of continuing concern to the community and, hence, the Parliament. There is probably no part of the Crimes Act that has been subject to more change in recent years than the provisions dealing with sexual assaults against children, much of those changes intended to increase penalties for the offences and to make it easier for children to give evidence and, thereby, easier to secure convictions." Those sentiments are understandable, although it needs to be remembered that a court, knowing nothing of the political considerations at work, may not be well placed to draw inferences from silence, even on a topic that seems to demand attention27. In politics, compromise is sometimes achieved by reticence. This may create a problem for courts that have to deal with the outcome of the compromise, but that is the way of the democratic process. In the equalisation undertaken in 2003, the New South Wales Parliament regarded the "express defence" in s 77(2) as no longer appropriate. It was a defence that, in its terms, differentiated between homosexual and heterosexual activity, so it at least had to be changed if there were to be the desired equalisation. It could not have been left as it was. Yet the problem to which that provision was addressed did not disappear; and the long-standing and well-understood principle which provided an alternative response to the same problem remained potentially applicable in the absence of "the clearest and most indisputable evidence [concerning] the meaning of the Act."28 27 See Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 459; [1995] HCA 24; Wik Peoples v Queensland (1996) 187 CLR 1 at 168-169; [1996] HCA 40. 28 R v Tolson (1889) 23 QBD 168 at 182. Crennan One of the reasons why, for more than a century, in most common law jurisdictions, including the Australian colonies and, later, States, the problem of mistake in connection with age-related sexual offences was dealt with by a separate and more specific legislative provision was that Parliament was thereby enabled to deal with issues such as onus of proof, consent, and mistake about age in a manner tailored to the particular kind of offence in question. One practical matter, discussed by Howie J in the Court of Criminal Appeal, is exemplified by this case. As often happens, the appellant was charged with sexual intercourse with the complainant, knowing she was not consenting. He was acquitted of that charge. The offence of which he was convicted (sexual intercourse with a person over 14 and under 16, contrary to s 66C(3)) was left to the jury as an alternative verdict. In such a case, where the complainant alleges she was not consenting, the prosecution sets out in support of its primary charge (in the language of former times, rape) to establish absence of consent. For the alternative charge (in the language of former times, carnal knowledge), it did not need to prove lack of consent. By the time the jury came to consider the s 66C issue, the matter of consent had been dealt with. Absence of consent was not an element of the s 66C(3) offence, and s 77(1) declared that presence of consent was no answer. The supposed mistake was about age, not consent. The defence previously provided by s 77(2) made the existence of consent, like the fact of an age in excess of 14 years, a condition of the availability of a defence based on a mistake as to age. The potential Proudman v Dayman ground of exculpation was not so conditioned. thereby abandoned the special defence When, in the context of equalisation of laws relating to heterosexual and homosexual activity, in 2003, the New South Wales Parliament repealed s 77(2), and heterosexual acts with under-age persons, it necessarily raised the problem of the possible application, to the now equalised, age-related, offences, of the Proudman v Dayman ground of exculpation, that is to say, honest and reasonable mistake of fact. Such mistakes were still going to happen. The question that Parliament left for the courts to decide was whether they were to be treated as irrelevant, or whether they would constitute, in accordance with the long- established principle referred to at the commencement of these reasons, a potential answer to a charge. that previously applied "The immediate reaction to the Crown submission is surprise, if not shock, at the suggestion that the Crimes Act can have what are in effect absolute liability offences carrying substantial gaol penalties. Of course that was always so with a child under 14 but there can be no denying that as the Crennan child becomes older the likelihood of an innocent mistake becomes more likely. I also accept that it is notoriously difficult to tell the age of [a] person with such accuracy as an absolute offence would require, and it is not uncommon for children approaching the age of 16 to disguise or lie about their age in order to be treated more favourably as an adult." He could have added that sexual activity with persons under 16 may be engaged in, not by adult sexual predators, but by other persons who themselves are adolescents. (This is not to overlook the possibility that some adolescents are capable of predatory behaviour.) Nevertheless, Howie J, and Hodgson JA and Price J who agreed with him, felt compelled to conclude that there was a legislative intent that, following the repeal of s 77(2), honest and reasonable mistake would be irrelevant to a charge of an offence against s 66C(3). We accept that, in the face of the legislative silence earlier referred to by Howie J, there are powerful arguments in support of that conclusion. There is, however, what appears to us to be a compelling argument to the contrary. It is that foreshadowed by Cave J in R v Tolson, and it concerns the relationship between the courts and Parliament. The common law principle in question reflects fundamental values as to criminal responsibility. The courts should expect that, if Parliament intends to abrogate that principle, it will make its intention plain by express language or necessary implication. We would, therefore, construe the legislation in the light of the principle of criminal responsibility stated at the outset of these reasons. An honest and reasonable belief that the other party to sexual activity is above the age of 16 years is an answer to a charge of a contravention of s 66C(3). The evidential burden of establishing such a belief is in the first place upon an accused. If that evidential burden is satisfied, then ultimately it is for the prosecution to prove beyond reasonable doubt that the accused did not honestly believe, on reasonable grounds, that the other party was above the age of 16 years. The outcome of the present appeal turns upon what is involved in the concept of evidential burden in the context of the particular offence, and the particular ground of exculpation. The present case The facts, and the course of proceedings, appear from the reasons of Hayne J. We agree with Hayne J that the circumstance that, in answer to a police question in the course of an interview, the appellant said that the complainant was 16 and that she had told him that was her age did not, in the light of the course of evidence, and absence of evidence, at trial, discharge the evidentiary burden involved in reliance on honest and reasonable mistake of fact as a ground of exculpation. This was a point that was left unresolved by the Court of Crennan Criminal Appeal. However, it arises once it is decided that what Howie J called "the common law defence" is left open by the statute. In Jiminez v The Queen29, the plurality reasons for judgment examined in some detail the circumstantial evidence in the case which suggested that the driver of a motor car honestly believed on reasonable grounds that it was safe for him to drive. The material referred to was such as to enable a tribunal of fact not only to decide whether such a belief might have been honestly held, but also to evaluate its reasonableness. The reasons did not merely rely on the driver's claim that he had no warning of the onset of sleep. They tested that claim against the facts and circumstances proved in evidence, and the inferences available from the evidence, and concluded that, in the light of the whole of the evidence, there was a serious issue to be decided. Here, the fact that the defence case at trial (unsupported by sworn evidence of the appellant) was that no intercourse occurred did not of itself make the point unavailable, especially where, according to the defence case, the only reason no intercourse occurred was that the appellant's plans in that regard were interrupted. There was, however, nothing to support the honesty and reasonableness of a suggested belief in the truth of his out-of-court assertion that the complainant had told him what would have been a lie about her age. The complainant (who was in fact 15) gave evidence that she was in year 9 at school. The appellant, aged 17, was in year 11. In his record of interview the appellant, when asked by the police how old the complainant was, said "16". When asked how he knew that, he said that the complainant had told him. He also said the complainant was, he thought, in year 10. It was not suggested to the complainant in cross-examination that she had lied to the appellant about her age or, for that matter, that she had discussed it with him. Honesty and reasonableness are essential features of the mistaken belief relied upon as a ground of exculpation. The belief of the appellant was a matter peculiarly within his own knowledge, but he gave no sworn testimony about it. The reasonableness of his belief was based on an out-of-court assertion as to what the complainant allegedly said, but this was not put to her in cross- examination. A tentative out-of-court suggestion by the appellant as to the complainant's class at school, which would have been consistent with his case, was shown by the evidence to be wrong. The evidential burden was not satisfied. 29 (1992) 173 CLR 572 at 583-584. Crennan Conclusion The appeal should be dismissed. Kirby KIRBY J. This appeal, from orders of the Court of Criminal Appeal of New South Wales, arises following the conviction of the appellant, CTM, of an offence against s 66C(3) of the Crimes Act 1900 (NSW) ("the Act"). The majority of this Court, whilst upholding the appellant's complaints of legal error, affirm his conviction for a suggested absence of miscarriage of justice. In my view, if a trial judge misdirects a jury on the legal ingredients of an offence, as well as on the onus and standard of proof to be applied, that constitutes a miscarriage of justice30. Certainly it does so in this case. Conviction of a sexual crime is a very serious outcome for the appellant. He is entitled to a retrial. The decisional history Trial of the accused: The appellant was tried before Garling DCJ and a jury in the District Court of New South Wales upon an indictment containing two counts. The counts alleged offences against s 61J of the Act (sexual intercourse without consent in circumstances of aggravation) and, in the alternative, s 66C(4) (sexual intercourse with a person aged between 14 and 16 years in circumstances of aggravation). The jury found the appellant not guilty of those offences and upon them he was discharged. The jury went on to find the appellant guilty of a statutory alternative to the s 66C(4) offence, being an offence against s 66C(3) of the Act31. This involved a non-aggravated form of the offence of having sexual intercourse with a person between the ages of 14 and 16. The complainant was a female friend of the appellant. She was 15 years of age at the time of the alleged offence. The appellant was then 17 years of age. Inherent in the jury's verdict on the s 66C(3) offence was a conclusion that the appellant and the complainant had engaged in consensual sexual intercourse. The appellant's conduct was not unlawful for want of consent, or aggravated because the complainant had been under the influence of alcohol32, as had been alleged in respect of the offences charged in the indictment. It was unlawful because the complainant was below the age at which the law says a person may consent to sexual intercourse. 30 See Conway v The Queen (2002) 209 CLR 203 at 241 [103]; [2002] HCA 2; Darkan v The Queen (2006) 227 CLR 373 at 413-415 [139]-[142]; [2006] HCA 34. 31 See the Act, s 66E(1A). 32 The Act, s 66C(5)(g). Kirby In the Court of Criminal Appeal, the appellant argued that the jury's verdict was unreasonable. That Court rejected this argument33. It has not been maintained in this Court. Sentencing the prisoner: In sentencing the appellant, the trial judge found no difficulty in reconciling the verdicts returned by the jury. The trial judge described the facts as he took them to be established: "The facts which the jury obviously accepted are that on 24 October 2004 [the complainant], a person of 15 years of age, who knew the prisoner quite well, had rung him and contacted him and had gone to the premises where he and some other boys lived. She was considerably affected by alcohol. During the course of that evening he and [the complainant] had sexual intercourse, and she was under the age of 16, namely 15, and they have obviously accepted that he knew [that fact], and they are the brief facts upon which I sentence him. He knew her, he had been friendly with her over a significant period of time. He was a young lad β¦ 17 years of age at the time, [and] the difference in their age is minimal, but the fact is it is an offence and he has been found guilty of it. β¦ [H]e denied having sexual intercourse, however, the jury was satisfied beyond reasonable doubt to the contrary. There is little else I can say about it. It is one of these very difficult sentences because what you are doing, in effect, is sentencing a person where two people of a similar age agreed obviously to have sexual intercourse, but she is of such an age that Parliament has deemed that it is an offence." In the result, the trial judge sentenced the appellant to a term of eighteen months imprisonment with a non-parole period of nine months. He suspended the custodial sentence on the basis that "special circumstances" warranted that course. In the Court of Criminal Appeal, it was accepted by the prosecution that the sentence imposed had failed to take into account the Children (Criminal Proceedings) Act 1987 (NSW). Provisions of that Act applied to the appellant because, for its purposes, he was himself a child34. Thus, although the Court of Criminal Appeal dismissed the appellant's appeal against conviction, it upheld his application for leave to appeal against sentence. It quashed the sentence and ordered that the matter be remitted to the District Court for the resentencing of the appellant according to law35. 33 CTM v The Queen (2007) 171 A Crim R 371 at 373 [1], 381-385 [48]-[64], 405 34 (2007) 171 A Crim R 371 at 405 [153]. 35 (2007) 171 A Crim R 371 at 405 [156]. Kirby Court of Criminal Appeal: The principal focus of the appellant's conviction appeal in the Court of Criminal Appeal was whether a "common law defence" of honest and reasonable mistake of fact applied to a charge based on s 66C(3) of the Act, such as would exculpate the appellant if he had held a belief, at the time of the sexual intercourse, that the complainant was over the age of 16 years. By reference to decisions of this Court36 and other courts37, to English authority38, and to the legislative history of the relevant provisions of the Act39 (with particular reference to the repeal of s 77(2) of the Act and to extrinsic material explaining the purpose of that repeal40), the Court of Criminal Appeal unanimously concluded that the "common law defence" was not "activated" in respect of s 66C of the Act. There was thus no need for the Court of Criminal Appeal to "go on to determine whether there was evidence to support the common law defence in the present case"41. Whilst the trial judge had given certain directions on the assumption that the "defence" applied, he had not been obliged by law to do so. Despite this, the Court of Criminal Appeal noted an alternative submission advanced for the prosecution to the effect that, even if the "defence" had applied to s 66C(3) of the Act, it amounted, in the present case, to a "contingent defence", and could not be maintained. The prosecution argued that, because the appellant's case at trial had been that he did not have intercourse with the complainant at all, he could not also assert the inconsistent proposition that "if he did, he was mistaken as to her age and the fact that she was not consenting"42. 36 eg Proudman v Dayman (1941) 67 CLR 536; [1941] HCA 28; He Kaw Teh v The Queen (1985) 157 CLR 523; [1985] HCA 43; Jiminez v The Queen (1992) 173 CLR 572; [1992] HCA 14. 37 eg Chard v Wallis (1988) 12 NSWLR 453. 38 eg R v Prince (1875) LR 2 CCR 154; Maughan (1934) 24 Cr App R 130; B (A Minor) v Director of Public Prosecutions [2000] 2 AC 428; R v K [2002] 1 AC 39 See (2007) 171 A Crim R 371 at 391-397 [91]-[113]. 40 See (2007) 171 A Crim R 371 at 397 [114]-[116]; see also at 373-374 [2]-[7] per Hodgson JA. 41 (2007) 171 A Crim R 371 at 405 [151]. 42 (2007) 171 A Crim R 371 at 404 [149]. Kirby The Court of Criminal Appeal rejected this argument as incompatible with the decision of this Court in Pemble v The Queen43. Appeal and contentions in this Court: In this Court, the appellant argues that the Court of Criminal Appeal erred in finding that the "defence" of "honest and reasonable mistake" as to the age of the complainant was not available in respect of s 66(3) of the Act. By a notice of contention, the respondent has submitted that the Court of Criminal Appeal erred in holding that Pemble has the effect that the "common law defence of honest and reasonable mistake applies even though the defence relied upon was not that the appellant, at the time of having intercourse, mistakenly believed that the complainant was over 16, but a denial that intercourse occurred at all". The respondent reiterated its argument that any defence of honest and reasonable mistake as to age "does not apply in a case such as the present where the accused denies committing the act to which the mistaken belief relates". The respondent further contends that the Court of Criminal Appeal erred in holding that the onus of disproving honest and reasonable mistake, where applicable, lies on the prosecution. The respondent argues that "[i]f this Court were to decide that the common law defence was available in this case β¦ the trial judge's direction placing the onus of establishing the defence on the accused on the balance of probabilities was correct". The issues Four issues therefore arise for decision by this Court: The honest and reasonable mistake issue: Does s 66C(3) of the Act create an offence of "absolute liability", such that the suggestion of "honest and reasonable mistake of fact" on the part of the accused as to the age of the complainant is legally immaterial? The trial judge's direction issue: If the first issue is answered in favour of the appellant, was the trial judge correct to direct the jury that an honest and reasonable mistake of fact as to the age of the complainant was a "defence", the onus of establishing which, on the balance of probabilities, was on the accused? 43 (1971) 124 CLR 107; [1971] HCA 20 cited (2007) 171 A Crim R 371 at 404-405 Kirby The inconsistent propositions issue: If both of the foregoing issues are decided in favour of the appellant, was he incapable in law of placing reliance on honest and reasonable mistake as to the age of the complainant because he conducted his case at trial on the basis of a denial that sexual intercourse had taken place at all? and The Pemble issue and the proviso: If all three of the foregoing issues are decided in favour of the appellant, should his appeal to this Court nonetheless be rejected on the basis that: (a) he did not at trial raise a live issue about his belief concerning the complainant's age; (b) the decision of this Court in Pemble44 did not oblige the trial judge to direct the jury upon that issue; and (c) as a result, no miscarriage of justice occurred such as to warrant disturbing the appellant's conviction, despite a demonstrated error of law in the trial45? Honest and reasonable mistake of fact and the offence A finely balanced question: I can abbreviate what I would otherwise have written on this issue because I agree with much of what appears in the reasons of Gleeson CJ, Gummow, Crennan and Kiefel JJ ("the joint reasons"), and in the At the outset, I acknowledge, alike with the joint reasons, that in the face of the silence of s 66C(3) of the Act with respect to honest and reasonable mistake, and given the legislative history, "there are powerful arguments in support of [the] conclusion" stated by Howie J for the Court of Criminal Appeal46. Years ago, sitting in that same Court in the case of Jiminez, I applied what I took to be the holdings of this Court, and concluded that the statutory offence of culpable driving, by its language and purpose, involved only objective considerations, viz "the actual behaviour of the driver", and did "not require any given state of mind as an essential element of the offence"47. 44 See eg (1971) 124 CLR 107 at 118. 45 See Criminal Appeal Act 1912 (NSW), s 6(1). 46 Joint reasons at [34]. 47 (1991) 53 A Crim R 56 at 63 citing R v Coventry (1938) 59 CLR 633 at 637, 638; [1938] HCA 31; McBride v The Queen (1966) 115 CLR 44 at 50, 54; [1966] HCA Kirby In a unanimous decision, this Court reversed the conclusion that I (along with Lee CJ at CL) had reached48. I accept that the reasons of this Court, and not my own earlier opinion, correctly state the approach to be taken on the meaning and content of criminal offences such as those in question there and here. The governing principles: I agree with the following conclusions stated by my colleagues: The starting point for resolving the first issue is an appreciation that what is involved is a question of statutory construction49; The general principles of criminal responsibility necessarily inform the construction of criminal statutes50; (3) Although "honest and reasonable mistake" is sometimes described (as it was in this Court in Jiminez51) as a "common law defence", it is more accurate to characterise it as a circumstance or consideration that may deprive the facts of an ingredient essential to the offence52; There is a strong presumption that the statutory definition of a crime contains an express or implied proposition as to the state of mind required on the part of the accused53. Although Parliament may, by clear provision, render criminal offences carrying serious penal consequences "absolute", courts are entitled to, and do, expect that Parliament will make any such purpose completely clear. Essentially, this is because of the seriousness with which courts view the imposition of criminal punishment (commonly involving loss of liberty and reputation) and the assumption that, absent clear provision, Parliament has meant the usual presumption to apply54; and 48 Jiminez (1992) 173 CLR 572. 49 Joint reasons at [5]; reasons of Hayne J at [138]; see also reasons of Heydon J at 50 Joint reasons at [5]; reasons of Hayne J at [146]. 51 (1992) 173 CLR 572 at 581-582. 52 Joint reasons at [6]; reasons of Hayne J at [138]; see also reasons of Heydon J at 53 Reasons of Hayne J at [159] citing R v Tolson (1889) 23 QBD 168 at 187 per 54 See joint reasons at [7]. Kirby (5) Although there are considerations in the present case that support the Court of Criminal Appeal's construction of s 66C(3) of the Act, the better view is that the "necessary implication"55 required to sustain the reading of the statute for which the respondent contends is missing in this case56. At best, for the respondent, the Act might be said to be unclear, particularly if the Second Reading Speech is given weight. At worst, s 66C(3) of the Act simply creates a new offence, carrying heavy penalties, in a general criminal statute, that is to be construed so as to give effect to the normal presumption. When one reaches this view, the application of the normal presumption in the circumstances of the present case is at once rational and understandable. Other factors favouring appellant's case: Conviction of an offence against s 66C(3) of the Act carries a maximum penalty of ten years imprisonment. It thus has serious penal consequences. This is an important consideration, repeatedly recognised by this Court, favouring the application of the normal presumption57. Apart from the custodial and reputational consequences of conviction of such a serious offence, an offender against s 66C(3) of the Act becomes a "registrable person" under s 3A of the Child Protection (Offenders Registration) Act 2000 (NSW). Such a person is required to comply with a reporting regime, involving the provision of specified personal information to the Commissioner of Police58, ordinarily for a period of 15 years59. Such information is recorded in the Child Protection Register60. I agree with Hayne J that the existence of a general 55 B [2000] 2 AC 428 at 481 per Lord Hutton (Lords Mackay of Clashfern and Steyn agreeing) (emphasis in original); see also at 464 per Lord Nicholls of Birkenhead (Lord Irvine of Lairg LC agreeing) (describing the test as being whether the creation of absolute liability is "compellingly clear"). See Simester and Sullivan, Criminal Law: Theory and Doctrine, 3rd ed (2007) at 169-170. 56 Joint reasons at [35]. 57 See eg He Kaw Teh (1985) 157 CLR 523 at 530 per Gibbs CJ (Mason J agreeing), 567 per Brennan J, 595 per Dawson J. 58 See Child Protection (Offenders Registration) Act 2000 (NSW), Pt 3. 59 Where the offender was a child at the time of the offence, as the appellant was, the length of the reporting period is reduced: see Child Protection (Offenders Registration) Act 2000 (NSW), s 14B. 60 Child Protection (Offenders Registration) Act 2000 (NSW), s 19. Kirby prosecutorial and sentencing discretion does not diminish the gravity of the consequences that can follow from being convicted of such an offence61. In the Court of Criminal Appeal, Howie J acknowledged the difficulties involved in viewing s 66C(3) of the Act as a provision creating "an absolute offence" when the experience of courts suggested that the "likelihood of an innocent mistake" with respect to age increases "as [a] child becomes older"62. He was correct to do so. Conclusion: the Court of Criminal Appeal erred: On the point of difference between the construction of the Act favoured in the joint reasons and by Hayne J, and that favoured by Heydon J, I prefer the former approach. It is more faithful to the presumption, often affirmed by this Court, that serious criminal offences are to be read as subject to a "defence" of honest and reasonable mistake about facts essential to conviction. We should not waver from the Court's previous insistence upon that principle. In this respect I join with the majority. The Court of Criminal Appeal erred in accepting the contrary argument maintained by the respondent. Prima facie, this conclusion entitles the appellant to relief from this Court. The trial judge's directions were erroneous A lively controversy: This is not one of those cases in which the issue before this Court was first conceived at appellate level. As the record of the trial demonstrates, there had, for some time, been debate in the District Court of New South Wales about the relevance of "honest and reasonable mistake of fact" to offences such as that established under s 66C(3) of the Act. Some judges had concluded that the "common law defence" was not available. Others had reached the opposite conclusion63. The ERISP interview: In the present trial, the conflicting decisions were drawn to the notice of the trial judge. The issue had become relevant because the appellant had made statements to police (out of court and not on oath) about his 61 Reasons of Hayne J at [173]. 62 (2007) 171 A Crim R 371 at 402 [137]. 63 The attention of this Court was drawn to the reasons of Goldring DCJ in R v Al- Abodi (2005) 2 DCLR (NSW) 351 and of Knox DCJ in R v Douglass unreported, District Court of New South Wales, 10 August 2005 which substantially reached the conclusion now endorsed by this Court on the first issue. The reasons of Nicholson DCJ in R v Yeo unreported, District Court of New South Wales, 26 July 2005 reached a contrary conclusion. Kirby belief as to the age of the complainant. These formed part of an electronic recording of interview ("ERISP"), which was in evidence. The following is the relevant passage from the interview: "Q53: How long have you known [the complainant] for? A: I think it was the start of the year, I started to go to β¦ and then that's when I met [the complainant]. Q54: Do you know how old [the complainant] is? Q55: How do you know that? A: Well that's how, that's how old she's told me. Q56: When did she tell you that? A: Like when I first met her. I just assume that she's 16 ever since. Q57: Does [the complainant] go to school? A: She didn't for a while but she does now at the moment as far as I know, she's back at school. Q58: O.K. Do you know what year she's in? A: Year 10 I think." In light of this evidence and of the submission for the appellant that the "common law defence" of honest and reasonable mistake was available, the trial judge was required to rule on whether he would, as requested: "remove from the jury's consideration that portion of the charge, which is the aggravating portion, that the complainant was under the age of 16 years, namely 15 years of age, on the basis that there should be available to him a defence that he was not aware that she was under the age of 16 years". Trial judge's ruling: The trial judge declined to do so. However, he proceeded to what he described as "[t]he more difficult problem" arising in relation to the second count of the indictment (and the alternative third charge pursuant to s 66C(3)). He asked himself: "[I]s there a defence available that β¦ the accused reasonably believed that [the complainant] was over the age of 16 years or indeed 16 years of age?" Kirby The trial judge noted the conflicting decisions within the District Court. In brief terms he reviewed the relevant arguments. He then concluded: "[I]t seems to me that if it is a defence, that is, if the onus of proof is upon the accused, then you are not reducing an age of consent of 16 years to 14 years because it all depends upon the accused being able to satisfy, on the balance, a jury of his belief and the reasons for it. β¦ But, secondly, having read those other judgments, I have concluded that the common law defence is still available. β¦ I intend to allow counsel for β¦ the accused to argue that defence [in respect of the charge under s 66C]." Inherent in the foregoing ruling was a conclusion that the ERISP evidence afforded an evidentiary foundation for the proposition that the appellant believed, mistakenly, that the complainant was in fact 16 years of age at the time of the alleged offence. If it had been otherwise, it might have been expected that the trial judge would have said as much, and refused to waste time on an irrelevant and hypothetical issue. Submission of trial counsel: Before the trial judge instructed the jury on the applicable law, the appellant's counsel informed him that "for pretty obvious forensic reasons" he would not be addressing the jury "on the common law defence available" in respect of the charge under s 66C. Nevertheless, counsel made it clear that he was not abandoning that "defence". The following exchange took place: "[COUNSEL]: β¦ The only evidence is that he thought she was 16 so I mean if they apply what they've got before them to the factsββ HIS HONOUR: So you probably won't touch on it but you still want me [COUNSEL]: Absolutely your Honour. Your Honour's obliged to give them the law and all the available defences. I mean I can't say β¦ he didn't touch her but if he did she's the right age. β¦ But I don't want your Honour to think that I'm abandoning that because in my view β¦ the evidence is that there's a complete defence to it." Trial judge's directions to the jury: In due course, the trial judge charged the jury on the relevance of the appellant's belief as to the age of the complainant: "There is, in this case, a defence. The defence is one in which the onus of proof switches slightly. Only in this one small area. The defence is one of having an honest belief that she was not under the age of 16 years. The Crown must prove its case beyond reasonable doubt but where there is a defence such as this the onus switches. There is no onus of proof of any Kirby matter on an accused person except where such a defence as this β¦ [is] raised. The accused needs only to establish what the accused relies on in this regard to a lower standard of proof than beyond reasonable doubt. The accused is required to prove the accused's case in this regard only on the balance of probabilities. That is to say the accused needs only to show that it is more likely than not that what the accused asserts is so." Later in his directions, the judge read the jury questions 54 to 5864 and the appellant's answers to them. He noted that question 54 was "perhaps an important one". However, he gave no further indication to the jury of the consequence of a conclusion, reached on the basis of the recorded interview, that the appellant honestly and reasonably believed the complainant to be 16 years of age or older. Once it was concluded, correctly, that the offence against s 66C(3) of the Act was not an "absolute" one, requiring no more than proof that sexual intercourse had taken place with a person in fact under the age of 16 years, it was essential that the jury be given accurate instructions upon that basis. However, perhaps because of the previous state of the law (where mistake as to the age of a complainant comprised a statutory defence65), possibly misled by the use of the expression "common law defence", the trial judge told the jury that it was for the appellant to establish the foundation for the "defence". Misdirection on burden and standard of proof: During submissions, the trial judge's notice was drawn to a conclusion of Goldring DCJ in a decision which, in large part, the trial judge followed. In that decision, at the end of his ruling, Goldring DCJ had said66: "At this stage I propose to direct the jury, in accordance with Chard v Wallis[67], that when they come to consider the statutory alternative, that it is incumbent on the Crown, if the defence raises that the accused had an honest and reasonable belief, to negative that." The present trial judge could not be persuaded to follow the same course. It was the correct course, consistent with the authority of this Court68. At 64 See above these reasons at [68]. 65 The Act, s 77(2) (repealed). See joint reasons at [19]. 66 Al-Abodi (2005) 2 DCLR (NSW) 351 at 355-356 [21]. 67 (1988) 12 NSWLR 453. 68 He Kaw Teh (1985) 157 CLR 523. Kirby common law, an accused was not obliged to establish an honest and reasonable mistake of fact as to the age of the complainant as a "defence" to a charge such as that based on s 66C(3) of the Act. All the accused had to do was "raise" a suggestion of honest and reasonable belief on his part and identify some supporting evidence which it was open to the jury to accept. Once the suggestion was raised, it was for the prosecution to exclude it. Conclusion: error at trial: I therefore agree with the joint reasons and with Hayne J on the second issue69. The trial judge erred both in assigning the burden of proof to the appellant and in defining the applicable standard of proof. On the face of things, this deprived the appellant of a trial according to law in respect of a matter which his counsel had identified in his submissions at trial. This therefore affords a further ground for providing relief to the appellant. Honest mistake of fact was available at the trial The inconsistent propositions issue: In this Court, as in the Court of Criminal Appeal, the respondent submitted, in effect, that it was impermissible for the appellant's counsel to request a judicial direction premised on a hypothesis inconsistent with the manner in which he had conducted his case at the trial. The prosecution argued that no directions were required concerning the appellant's belief as to the complainant's age, given that the sole defence postulated on his behalf was that no sexual intercourse had taken place between him and the complainant at all. As the trial judge acknowledged in his remarks on sentencing, the jury's verdict on the s 66C(3) offence represented a rejection of that claim. Both the trial judge and Howie J in the Court of Criminal Appeal, each very experienced in the conduct of criminal trials, recognised correctly that it is not at all unusual for accused persons to propound arguments that are difficult or impossible to reconcile. The trial judge acknowledged this by accepting without demur the submission that he was obliged to instruct the jury on the "defence" of honest and reasonable mistake as to the age of the complainant, even though this was obviously inconsistent with the defence that counsel had indicated he planned to advocate. Howie J, for the Court of Criminal Appeal, rejected the respondent's submission on this point in a short passage upon which I cannot improve70: 69 See joint reasons at [35]; reasons of Hayne J at [189]. 70 (2007) 171 A Crim R 371 at 404-405 [149] citing Pemble (1971) 124 CLR 107. Kirby "The Crown's contention is that the appellant could not assert that he did not have intercourse with the complainant yet also assert that, if he did, he was mistaken as to her age and the fact that she was not consenting. The Crown submitted that a 'contingent defence' would be 'offensive to basic principle'. That submission must be rejected. It would be no more offensive than a judge being required to leave the issue of self defence to the jury even though the accused was raising an alibi for the time of the offence". In light of the record, it cannot be doubted that the appellant's counsel made a proper request for an appropriate direction. Repeatedly, he emphasised that, despite the way in which he would be putting the matter to the jury, he was not waiving the alternative case that he asserted arose from the evidence71. He made clear his submission that the trial judge was obliged to give directions in fulfilment of his own responsibility "to secure for the accused a fair trial according to law β¦ [on] any matters on which the jury, upon the evidence, could find for the accused"72. The Pemble requirement: There was nothing odd, or even particularly surprising, in counsel for the appellant pressing the hypothesis that no sexual intercourse at all had taken place, whilst the judge reminded the jury that, if they were to reject that hypothesis, it would not be the end of their consideration of the matter. It does not impose too onerous a burden to require a trial judge to instruct the jury that, in such circumstances, they should proceed to consider whether, at the relevant time, the accused held an honest and reasonable, but mistaken, belief as to the age of the complainant. That course simply "covers all the bases" that logically arise. If necessary and appropriate, the judge could inform the jury that he or she was instructing them in that way because he or she was obliged by law to explain to them all of the legal principles necessary to ensure a fair and accurate trial of the accused. If the jury were told that this course sometimes becomes necessary because counsel may overlook a legal defence or because counsel might elect not to argue a point, they would understand. The judge's duty transcends that of counsel. The judge represents the whole community and the law. And that is what Pemble holds. Conclusion: entitlement to a direction: The trial judge was therefore right to accept an obligation to direct the jury on the relevance of honest and reasonable mistake of fact as to the complainant's age (although, for the reasons explained above, the directions which he gave were incorrect and incomplete). I agree with the joint reasons, and with Hayne J, that no inconsistency was 71 See eg above these reasons at [73]. 72 Pemble (1971) 124 CLR 107 at 117-118. Kirby involved in doing so73. The Court of Criminal Appeal was correct to so conclude. On this issue too, the appellant is entitled to succeed. The inapplicability of the proviso in this case Point reached in the analysis: The appellant is thus successful on the three issues debated below, both at the trial and in the Court of Criminal Appeal. The appellant's submission that the trial judge, in explaining the ingredients of the alleged offence under s 66(3), was required to instruct the jury to consider the suggestion, arising on the evidence, of honest and reasonable mistake as to age on the appellant's part, was correct. The contentions of the respondent to the contrary or, alternatively, to the effect that the directions given by the trial judge on this point were accurate, or that the appellant is unable to place reliance on an argument inconsistent with the presentation of his case at trial, are all rejected. On the face of things, the fact that a verdict and conviction have followed a direction that was erroneous as to the components of the relevant offence, and as to the onus and standard of proof of a so-called "defence" to it, would appear to necessitate a retrial. The postulate of a legally accurate trial, in the sense of one in which the components of each offence alleged are correctly explained and understood, lies deep in our tradition of criminal justice. Its importance is compounded where, as here, significant custodial and other punishments are involved. A new point in this Court: Not for the first time, the point that defeats the appellant in this Court is one that was accepted neither at first instance, nor in the intermediate court. Whilst I acknowledge the duty of this Court, where error on the part of an intermediate court has been shown, to give effect to its own conclusions in disposing of a case, prudence, and a proper discharge of this Court's constitutional functions as a final court of appeal, suggest that the closest attention should be paid to the opinions of decision-makers below on the now determinative point. One may comb the transcript of the trial as closely as one wishes, but one will not find a suggestion on the part of the prosecutor that, even if the circumstance of honest and reasonable mistake of fact as to the complainant's age was relevant to the alleged offence under s 66C(3) of the Act, either: (1) the issue had not been properly raised or adequately reserved; or (2) there was insufficient evidence to afford (if accepted) a factual foundation for such mistake to be propounded. 73 Joint reasons at [38]; reasons of Hayne J at [191]. Kirby The exchange extracted above74 makes it abundantly clear that counsel for the appellant placed explicit reliance on honest and reasonable mistake of fact. He did not waive it by the manner in which he addressed the jury. On the contrary, he submitted that, in accordance with Pemble, the trial judge had his own legal duty to instruct the jury on the point. There can be no suggestion that the trial judge did not accept that the ERISP evidence provided a foundation in fact for this "defence". Further, it is clear that the trial judge accepted, in accordance with Pemble, that he was obliged to give directions to the jury on what followed if they were to accept that evidence. Likewise, there was no indication on the part of the Court of Criminal Appeal that the appellant had no basis for reliance on honest and reasonable mistake of fact. It is true that, in light of their conclusion on the applicable law, the judges of that Court were not required to decide "whether there was evidence to support the common law defence in the present case"75. However, everything that was said by Howie J, giving the principal reasons of the Court, suggests rejection of the narrow view, now favoured in this Court, that the ERISP evidence is insufficient to raise an issue as to the appellant's belief about the complainant's age. Thus, Howie J said76: "It cannot be doubted that, even if an accused does not give evidence, a fact can be proved in the Crown case. For example, in the appellant's trial the assertion that he believed the complainant was over the age of 16 years arose in the record of interview tendered by the Crown. But it could arise in other ways, for example by a witness giving evidence of what the appellant had been told about the complainant's age or what he had said about it at some relevant point of time. It is not unusual for a jury to infer a state of mind of an accused, such as a belief that an object was stolen on a charge of receiving, notwithstanding that there was no direct evidence of that belief and, even if the accused was denying being in possession of the object. It seems to me that whether there is evidence to raise the defence will depend upon the facts of the particular case. Generally a judge must leave a defence to the jury if there is evidence upon which a jury could reasonably find the defence established. That is so for other 'defences' where the ultimate onus is upon the Crown. It 74 See above these reasons at [73]. 75 (2007) 171 A Crim R 371 at 405 [151]. 76 (2007) 171 A Crim R 371 at 405 [150]. Kirby arises in cases of self-defence and provocation and would arise in respect of a common law defence." If the reference to honest and reasonable mistake of fact as to the age of a complainant as a "common law defence" (a common enough description) is deleted from the foregoing passage, the remaining exposition is entirely orthodox. I would endorse it. Evidence is for the jury to evaluate: The question of whether there was evidence sufficient to permit a finding of honest and reasonable mistake of fact as to the complainant's age must be answered in the affirmative. True, the appellant did not himself give sworn evidence. The most direct testimony that could have been provided was therefore not adduced. But, as Howie J pointed out, the situation this created was hardly unique. There remained the next best source of the appellant's version, being the ERISP evidence recorded when the appellant's mind was focussed properly and clearly upon the issues now accepted to be of legal significance. The prosecution tendered that evidence in its case. The ERISP evidence was before the jury. According to the record, it was also available during the jury's private deliberations. It was therefore for the jury to decide whether to accept or reject the relevant statements of the appellant, having regard to their content, his demeanour and other evidence. The jury might have considered that the statements were more believable because of their contemporaneity with the alleged offence, and because the appellant did not disclaim an intention to have sexual intercourse with the complainant. On the contrary, he described his purpose and conduct as consistent with that object until his friends entered the bedroom and insisted on being observers. It was at all times for the jury to decide what they would make of the appellant's statement that the complainant had told him, when he met her, that she was 16 years of age. Certainly, his belief (inaccurate as it turned out) that she was in Year 10 at school would, if accepted, have been consistent with his stated belief about her age. In such circumstances, to say that there was no evidence of honest and reasonable mistake upon which the jury could have acted ignores the clear statements made in the recorded interview. The jury might have rejected the appellant's evidence as, by inference, they did in part, albeit without the benefit of correct instructions on the governing law. But it cannot be said that there was no such evidence upon which the jury could have acted. Just as juries may act upon the evidence of recorded police interviews where such evidence tends to establish the accused's guilt of the crime charged, so the jury may act on such evidence where it tends to exculpate the accused. The trial judge accepted that relevant evidence as to the appellant's belief about the age of the complainant existed and was before the jury. The prosecutor Kirby at the trial did not deny it. The Court of Criminal Appeal did not dispute it. Nor should this Court. Rejecting the majority's disposition: There are three basic reasons of legal principle for my divergence from the joint reasons, and from Hayne J, on the disposition of this appeal, despite otherwise agreeing in their analysis of the applicable law: First, I consider that their disposition is disharmonious with the proper approach to honest and reasonable mistake explained in unchallenged decisions of this Court; Secondly, I regard it as inconsistent with the explanations by this Court of the duty of the trial judge to direct the jury on all possible grounds of exculpation or defence enlivened by the evidence77; and Thirdly, I regard it as inconsistent with the language and purpose of the "proviso" and with this Court's explanations about its application. I will deal with each of these points in turn. The prosecution must dispel honest and reasonable mistake Distinguishing statute and common law: Where (as is the case in most Australian jurisdictions78 and as was formerly the case in New South Wales79) a defence of honest and reasonable mistake as to the age of a complainant exists under statute, the enacted provision must be given effect, including in so far as it deals with the applicable burden and standard of proof. However, where, as here, what is in issue is not a statutory prescription, but a common law principle as to the constituent elements of the crime itself, different rules apply. These rules are a consequence of the fundamental principle that the prosecution must prove beyond reasonable doubt all of the elements of an offence, whether express or implied. Thus, in Proudman v Dayman80, Dixon J explained: 77 Pemble (1971) 124 CLR 107. 78 Crimes Act 1958 (Vic), s 45(4); Criminal Law Consolidation Act 1935 (SA), s 49(4); Criminal Code (Q), s 215(5); Criminal Code (Tas), s 124(2); Criminal Code (NT), s 127(4); Crimes Act 1900 (ACT), s 55(3). 79 The Act, s 77(2) (repealed). 80 (1941) 67 CLR 536 at 541. Kirby "The burden of establishing honest and reasonable mistake is in the first place upon the defendant and he must make it appear that he had reasonable grounds for believing in the existence of a state of facts, which, if true, would take his act outside the operation of the enactment and that on those grounds he did so believe. The burden possibly may not finally rest upon him of satisfying the tribunal in case of doubt." In He Kaw Teh v The Queen81, this Court was required to resolve certain questions arising under the common law of Australia. In his reasons, Gibbs CJ identified these questions as including82: "whether the absence of an honest and reasonable belief in the existence of facts which would have made the act innocent is a form of mens rea or whether, on the other hand, an honest and reasonable mistake affords the accused a defence only when he is charged with an offence of which mens rea is not an element. A second question is whether the accused bears the onus of proving on the balance of probabilities that he acted under an honest and reasonable mistake of fact or whether it is enough if the evidence raises a reasonable doubt." The majority in He Kaw Teh decided that the presumption that the establishment of mens rea is a prerequisite to conviction for a grave criminal offence was not displaced by the statutory provision in issue in that case. In consequence, Gibbs CJ (Mason J agreeing) held that the prosecution bore the onus of proving that the accused knew of the facts that rendered his conduct criminal83. By reference to a great deal of historical and decisional material, Brennan J came to a similar conclusion84. To like effect were the reasons of Dawson J85: "There is β¦ no justification since Woolmington v Director of Public Prosecutions86 for regarding the defence of honest and reasonable mistake as placing any special onus upon an accused who relies upon it. 81 (1985) 157 CLR 523. 82 (1985) 157 CLR 523 at 533. 83 (1985) 157 CLR 523 at 545, 546. 84 (1985) 157 CLR 523 at 582. 85 (1985) 157 CLR 523 at 592-593 (emphasis added). Kirby No doubt the burden of providing the necessary foundation in evidence will in most cases fall upon the accused. But it is not inconceivable that during the case for the prosecution sufficient evidence may be elicited by way of cross-examination or otherwise to establish honest and reasonable mistake or to cast sufficient doubt upon the prosecution case to entitle the accused to an acquittal. The governing principle must be that which applies generally in the criminal law. There is no onus upon the accused to prove honest and reasonable mistake upon the balance of probabilities. The prosecution must prove his guilt and the accused is not bound to establish his innocence. It is sufficient for him to raise a doubt about his guilt and this may be done, if the offence is not one of absolute liability, by raising the question of honest and reasonable mistake. If the prosecution at the end of the case has failed to dispel the doubt then the accused must be acquitted." Raising a doubt based on evidence: In my opinion, this passage from the reasons of Dawson J expresses the common law rule applicable in Australia. The consequence for the present appeal is clear. If an offence is not, by clear statutory provision, rendered one of absolute liability, it is open to an accused to raise a doubt about guilt on the basis of an honest and reasonable mistake about an essential component of the offence. This the present appellant did by the ERISP evidence and by an explicit submission to the trial judge. He was not then obliged to give or adduce further or different evidence to establish his innocence on this basis. In an accusatorial trial, as conducted in Australia, the accused is entitled to put the prosecution to the proof. He or she is entitled to rely, in exculpation, upon evidence that has been adduced in the prosecution case. Inherent in the view that an accused must give or elicit evidence in order to "enliven the issue" of honest and reasonable mistake of fact87 is an erroneous idea that the accused is precluded from relying on evidence favouring him or her adduced in the prosecution case, and could thus be forced to give or adduce exculpatory evidence for him or herself. This does not reflect what the judges of this Court said in He Kaw Teh, and other relevant cases. More importantly, it is inconsistent with the basic principles of accusatorial procedure. Obviously, in declining to give, or call, evidence about the suggested existence of an honest and reasonable mistake of fact, an accused may put him or herself at a serious forensic disadvantage. But if, in a jury trial, there is some evidence, within the prosecution case or otherwise, to raise "the question of honest and reasonable mistake", and thus "raise a doubt about [the accused's] 87 Reasons of Hayne J at [194]; cf joint reasons at [36]. Kirby guilt"88, the judge must direct the jury on the point. The judge must call attention to the relevant evidence and then leave it to the jury, as the constitutional tribunal of fact, to decide whether the prosecution has dispelled any doubt that the accused has raised. If it has not, the accused must be acquitted, and the judge must so direct the jury. The necessity to "enliven the issue": By enlarging the obligation upon the accused to give, or adduce, evidence so as to "enliven the issue", the majority in this Court have departed from the Court's previous statements about the respective roles of the prosecutor and the accused. More fundamentally, they have increased the burden on the accused at the trial in a manner inconsistent with its accusatorial character and with the "golden thread" of which Viscount Sankey LC spoke in Woolmington89. The particular suggestion that the appellant failed to "enliven the issue" because his counsel omitted to question the complainant about her age90 illustrates this basic point. The appellant's counsel was perfectly entitled to present his case in terms of a denial that sexual intercourse took place at all, a course chosen no doubt on instructions and understandable for forensic reasons. He was not obliged to take a different course in order to "enliven an issue" of honest and reasonable mistake. The "issue" had an independent foundation in the evidence on the record. That foundation was adequate to allow counsel to Conclusion: directions erroneous: It follows that, in accordance with He Kaw Teh, there was a sufficient suggestion of honest and reasonable mistake at the appellant's trial to require the trial judge to direct the jury on the point. Directions were indeed given upon this premise. But they were incorrect. I would not qualify the reasoning in He Kaw Teh. In this appeal, that reasoning should simply be applied. Apart from any requirements of Pemble, an issue of honest and reasonable mistake of fact is sufficiently "enlivened" in a trial if there is some evidence before the jury to support it, and the accused has raised it for direction by the trial judge. Both of those preconditions were satisfied in the appellant's trial. 88 He Kaw Teh (1985) 157 CLR 523 at 593 per Dawson J. 89 [1935] AC 462 at 481. 90 Joint reasons at [38]-[39]; reasons of Hayne J at [194]. 91 He Kaw Teh (1985) 157 CLR 523 at 593; cf reasons of Hayne J at [179]. Kirby The judge's directions on grounds of exculpation and defences Rule in Pemble: There is an additional consideration that reinforces the foregoing approach in the present appeal. It arises from the decision of this Court in Pemble. That decision acknowledges that an accused is entitled to have a defence put forward by counsel in the manner judged most likely to secure an acquittal. Often, for forensic reasons, this will involve a single or simple theory of the evidence. However, the decision also recognises that this does not relieve the trial judge of the obligation to explain to the jury any other bases upon which, in law, the accused may be entitled to acquittal upon the evidence adduced. This recognition of the forensic privileges of defence counsel, and the distinct functions of judges, in criminal trials (as distinct from civil trials92) is altogether incompatible with requiring an accused to raise, at trial, all potential lines of defence so as to render them "live" or thereafter to lose the benefit of recourse to them. As the Court of Criminal Appeal pointed out, that has not hitherto been regarded as the obligation of defence counsel in this country. Quite the contrary. Pemble recognises the need for a protective rule precisely because the primary, or only, case advanced by an accused may be inconsistent with another basis for exculpation supported by evidence, upon which counsel may be silent. With respect, the suggestion that to "enliven the issue" of honest and reasonable mistake, an accused is bound to cross-examine a witness in a manner inconsistent with his or her chosen strategy at trial, cuts across the rule explained by this Court in Pemble. History and purpose of Pemble: The holding of this Court in Pemble does not stand alone. It can be traced at least to the opinion of the English Court of Criminal Appeal in 1915 in R v Hopper93. There, Lord Reading CJ said94: "Whatever the line of defence adopted by counsel at the trial of a prisoner, we are of opinion that it is for the judge to put such questions as appear to him properly to arise upon the evidence even although counsel may not have raised some question himself. In this case it may be that the difficulty of presenting the alternative defences of accident and manslaughter may have actuated counsel in saying very little about manslaughter, but if we come to the conclusion, as we do, that there was some evidence β we say no more than that β upon which a question ought 92 Pemble (1971) 124 CLR 107 at 117. 94 [1915] 2 KB 431 at 435. Kirby to have been left to the jury as to the crime being manslaughter only, we think that [the] verdict of murder cannot stand." The approach in Hopper was endorsed by the House of Lords in Mancini v Director of Public Prosecutions95. The influence of Hopper and Mancini was expressly acknowledged by Barwick CJ in Pemble96. The authorities establish a practical rule and one that acknowledges and accommodates the often difficult forensic choices that defence counsel face in conducting a criminal trial, especially before a jury. A new rule, in effect obliging an accused's counsel to embark on a particular line of cross-examination in order to "enliven an issue" which in evidence the accused elects not to pursue97, is fundamentally incompatible with the reasoning behind Hopper, Mancini and Pemble. In the present case, the rule in Pemble not only applied, but it was explicitly drawn to the notice of the trial judge and emphatic reliance was placed upon it. Moreover, the trial judge attempted to observe it; but he erred in doing Difficult questions may sometimes arise when Pemble is considered. As Menzies J remarked in Pemble itself, it is usually undesirable for a trial judge in instructing a jury to go beyond what it is necessary for them to know98. However, what is necessary is not determined exclusively by reference to the issues presented by trial counsel. It is determined by reference to the evidence that is received in the trial, and to any legal principles which that evidence enlivens. Obliging accused to "enliven issues"? Because the evidence as to the appellant's belief about the complainant's age was before the jury, it was for the jury to decide what, if any, weight they would give to it. It is not for judges, least of all judges in this Court and for the first time in the entire proceedings, to substitute their own opinions about such evidence for that of the jury. A correct 95 [1942] AC 1 at 7-8. 96 (1971) 124 CLR 107 at 117. 97 cf reasons of Hayne J at [194]. 98 (1971) 124 CLR 107 at 128. See also Alford v Magee (1952) 85 CLR 437 at 466; [1952] HCA 3; cf De Gruchy v The Queen (2002) 211 CLR 85 at 96 [44]; [2002] HCA 33; Murray v The Queen (2002) 211 CLR 193 at 219 [78(4)]; [2002] HCA Kirby application of the Pemble rule, which has never been doubted and has frequently been confirmed by this Court99, denies that approach. Until now, the rule in Pemble has been engaged where a fair reading of the evidence presents an issue that needs to be considered by the jury in reaching their verdict and deciding any basis on which the accused may be entitled to acquittal100. The danger involved in the approach now adopted by the majority is that, by requiring an accused to "enliven the issue" sufficiently at trial, the need for the rule in Pemble, and the occasions for its exercise, will be inappropriately circumscribed. No one in this appeal argued for that course. I would not adopt The "proviso" does not apply The suggested absence of miscarriage: The ultimate basis of the majority's decision to refuse relief to the appellant, notwithstanding the identification of legal errors in his trial, is that such errors "occasioned no substantial miscarriage of justice"101. This is the language of the "proviso" contained in s 6(1) of the Criminal Appeal Act 1912 (NSW). That provision permits an appellate court, whilst finding (relevantly) "the wrong decision of any question of law" or "on any other ground β¦ a miscarriage of justice", to nonetheless dismiss the appeal, because of the absence of the actual occurrence of a "substantial" miscarriage. In Pemble, Windeyer J observed, correctly, that sometimes "justice may miscarry simply because a trial was not in all respects correctly conducted"102. Another way of expressing the same idea is that "some errors or miscarriages of justice occurring in the course of a criminal trial may amount to such a serious breach of the presuppositions of the trial as to deny the application of the common form criminal appeal provision with its proviso"103. 99 See eg Van Den Hoek v The Queen (1986) 161 CLR 158 at 161-162, 169; [1986] HCA 76; Pantorno v The Queen (1989) 166 CLR 466 at 473; [1989] HCA 18; BRS v The Queen (1997) 191 CLR 275 at 330; [1997] HCA 47; Gipp v The Queen (1998) 194 CLR 106 at 124 [53]; [1998] HCA 21. 100 cf Kwaku Mensah v The King [1946] AC 83; Bullard v The Queen [1957] AC 635. 101 Reasons of Hayne J at [195]; joint reasons agreeing at [36]. 102 (1971) 124 CLR 107 at 138. 103 Weiss v The Queen (2005) 224 CLR 300 at 317 [46]; [2005] HCA 81. Kirby Limitations of appellate review: It is now clearly established that, where the "proviso" is available104, it is for the appellate court itself to review the entire record of the trial, making due allowance for its own limitations, in order to decide whether, to the requisite standard, the accused was proved to be guilty of the offence on which the jury returned their verdict of guilty. In my view, it is impossible to reach an affirmative conclusion that no substantial miscarriage of justice has occurred in the appellant's case. The evidence was ambivalent. Given the respective ages of the appellant and the complainant; the fact of their past relationship; and the circumstances prevailing at the time that sexual intercourse was said to have occurred, it is far from impossible to postulate a conclusion that if (as the jury found) the appellant had sexual intercourse with the complainant, he honestly and reasonably believed her to be over the age of 16 years. Certainly, the prosecution had done little to dispel that suggestion. Legal principle and the proviso: Because of the trial judge's errors, the appellant is primarily entitled to have his appeal allowed and a new trial ordered. He certainly suffered a miscarriage of justice to the extent that his trial did not conform to law. The legal questions in issue concerned the judge's explanation to the jury of: (1) the legal ingredients of the relevant offence; (2) the assignment of the burden of proof of the material facts; and (3) the identification of the standard of proof to be applied. What could be more fundamental in a criminal trial than these three matters? There was a time, not so long ago, when it was possible to say that applications of the "proviso" were becoming less common because of the properly rigorous standards which this Court and intermediate courts in Australia were demanding in the conduct of criminal trials105. The same cannot now be said. Recent authority on the proviso: In a recent decision concerning the application of the "proviso", AK v Western Australia106, it was acknowledged by Gleeson CJ and Kiefel J that "the proviso cannot be applied where the error at trial denies or substantially frustrates the capacity of an appellate court to decide 104 This was not and is not universal: see eg Pemble (1971) 124 CLR 107 at 125; cf Conway (2002) 209 CLR 203 at 207 [4], 228 [68]. 105 See Whittaker (1993) 68 A Crim R 476 at 484 cited Gilbert v The Queen (2000) 201 CLR 414 at 438 [86]; [2000] HCA 15. 106 (2008) 82 ALJR 534; 243 ALR 409; [2008] HCA 8. Kirby whether a conviction is just"107. Here, this Court has no way of knowing whether the jury accepted or rejected the appellant's statement about his mistake as to the complainant's age because the trial judge's directions did not call the jury's attention to the correct considerations. How could this Court possibly decide the point never having seen the witnesses, or heard the ERISP evidence? Similarly, Gummow and Hayne JJ noted in AK that there exists a "class of β¦ circumstances", albeit difficult to describe in the abstract, in which "radical" error at trial renders the application of the proviso all but impossible108. The failure on the part of the trial judge to explain to the jury the legal ingredients of an offence, and to assign correctly the burden and standard of proof in respect of them, seem to me to be "radical" errors, inconsistent with the requirements of the law. It cannot matter that the law in question is common law and not, as in AK109, expressed in a statute. It is still the law. It was also acknowledged in AK that one of the "two principal safeguards for the accused in a criminal trial" is "the criminal burden and standard of proof"110. If this is the case, then surely it must be a grave (or "radical") error for the trial judge to misdirect the jury on each of these considerations, as occurred in the appellant's trial. If this Court is itself to deny relief to an otherwise successful appellant by its own application of the "proviso", it must, in my respectful opinion, be consistent in doing so. The proviso and practicalities: There is one further consideration which this Court should keep in mind in a case such as the present. Discordancy of opinion at trial level, such as existed in respect of the question in this appeal111, creates uncertainty, expense and the potential for injustice. Only a fraction of such questions are ever examined by the intermediate courts. Still fewer are the cases in which special leave to appeal to this Court is sought. Tiny indeed are the number of cases decided by this Court. 107 (2008) 82 ALJR 534 at 540 [23]; 243 ALR 409 at 415-416; cf Nudd v The Queen (2006) 80 ALJR 614 at 618 [7]; 225 ALR 161 at 164; [2006] HCA 9. 108 (2008) 82 ALJR 534 at 545 [54]; 243 ALR 409 at 422 referring to Wilde v The Queen (1988) 164 CLR 365 at 373; [1988] HCA 6. 109 See (2008) 82 ALJR 534 at 545 [55]; 243 ALR 409 at 422-423; cf Gassy v The Queen [2008] HCA 18 at [33]-[34]. 110 (2008) 82 ALJR 534 at 558 [102] per Heydon J; 243 ALR 409 at 440. 111 See above these reasons at [67], fn 63. Kirby An appellant has no special interest, as such, in resolving contested questions of criminal law, such as were at issue in this appeal. If it is thought that an appellant may succeed in substance but will generally fail on the "proviso", an important practical incentive for the bringing of criminal appeals is diminished, if not lost entirely. Yet, when legally justified, the prosecution of such appeals is essential to the proper administration of criminal justice in Australia. Conclusion: order retrial: This is why, in a case such as the present, this Court, having found legal errors concerning jury instructions about the definition of the offence and the onus and standard of proof, should return the matter for retrial according to law. The case is legally important enough for that course to be taken. The conviction and sentence are very significant for the appellant. At the very least, the appellant has suffered a serious legal and procedural miscarriage. If this Court refuses a retrial, all of the learned disquisitions in the opinions of the Justices in this case represent little more than obiter dicta: an elaborate coda to yet another decision that is actually based on the proviso. Orders The appeal should be allowed. The judgment of the Court of Criminal Appeal of New South Wales should be set aside. In place of that judgment, this Court should order that the appeal to that Court be allowed; the conviction and sentence of the appellant be quashed; and a new trial ordered. Hayne 134 HAYNE J. Section 66C(3) of the Crimes Act 1900 (NSW) provides that "[a]ny person who has sexual intercourse with another person who is of or above the age of 14 years and under the age of 16 years is liable to imprisonment for 10 years". What, if any, mental element must be proved to establish commission of that offence? Is a mistaken belief about the age of the other person relevant? To prove commission of an offence against s 66C(3) the prosecution need not establish that the accused knew or believed that the other person was under the age of 16 years. If, however, there is a sufficient foundation in the evidence led at trial for there to be an issue about whether the accused mistakenly believed that the other person was not under the age of 16 years, the prosecution must prove beyond reasonable doubt that the accused did not honestly and reasonably hold that belief. In this matter, no issue of mistaken belief about age was sufficiently raised by the appellant at his trial. The directions given at the appellant's trial about mistake as to age, though wrong, occasioned no substantial miscarriage of justice. His appeal to this Court should be dismissed. It is convenient to deal first with the relevant question of statutory construction, then with some matters of history, including legislative history, and the relevance of that history to the question of mistake as to age, and only then with the course of the appellant's trial, his appeal to the Court of Criminal Appeal of New South Wales, and his appeal to this Court. A question of statutory construction The issue that arises in this matter is an issue about the proper construction of s 66C(3) of the Crimes Act and the state of mind of the accused that the prosecution must prove in order to attach criminal responsibility to proscribed conduct. It is not a question about the availability of any "common law defence" to the offence created by that sub-section. Properly identifying the nature of issue, as one about statutory construction and criminal responsibility, is critical to its proper resolution. In particular, recognising that the issue is not one of defence, excuse or justification bears directly upon what is the mental state of the accused that the prosecution must prove, which party bears the onus of proof, and what standard of proof must be applied in deciding the relevant issue. the More than a century ago, Griffith CJ said, in Hardgrave v The King112: 112 (1906) 4 CLR 232 at 237; [1906] HCA 47. Hayne "The general rule is that a person is not criminally responsible for an act which is done independently of the exercise of his will or by accident. It is also a general rule that a person who does an act under a reasonable misapprehension of fact is not criminally responsible for it even if the facts which he believed did not exist." Questions about an act done independently of the exercise of will, or by accident, may be put aside from consideration in this matter. But what about mistake? What of the case where a person accused of having sexual intercourse with another person, of or above the age of 14 years and under the age of 16 years, mistakenly believed that that other person was not under the age of 16 years? Section 66C(3) contains no words suggesting that proof of the offence requires proof that the accused knew or believed that the other person was under the age of 16 years. The appellant in the present matter rightly disclaimed any argument that proof that the accused knew or believed the other person to be under the relevant age was a necessary step in establishing commission of the offence. It by no means follows, however, that mistake about the age of the other person is irrelevant to the criminal responsibility of a person who has intercourse with another person under the age of 16 years. Mistake about the age of the other person would be irrelevant only if there were "a rigid adherence to the inflexible English principle of literal interpretation of statutory enactments"113 that once held sway. That is, questions of mistake about age would be irrelevant only if the absence of explicit reference to mistake, in the relevant statutory provision, were seen as determinative. It is not. By the late 19th century the English courts had recognised114 not only that statutory silence about mistake was not conclusive of the question about its relevance to a criminal prosecution, but also "that a contrary presumption was applicable alike to offences created by statute and to crimes existing at common law"115 (emphasis added). It was to this presumption that Griffith CJ had adverted, in Hardgrave116, when he spoke of "a general rule that a person who does an act under a reasonable misapprehension of fact is not criminally responsible for it even if the facts which he believed did not exist". In Thomas v The King, Dixon J accepted117 that: 113 Thomas v The King (1937) 59 CLR 279 at 302 per Dixon J; [1937] HCA 83. 114 R v Tolson (1889) 23 QBD 168. 115 Thomas (1937) 59 CLR 279 at 304 per Dixon J. 116 (1906) 4 CLR 232 at 237. 117 (1937) 59 CLR 279 at 305. Hayne "[I]n the application of the principle of interpretation to modern statutes, particularly those dealing with police and social and industrial regulation, a marked tendency has been exhibited to hold that the prima facie rule has been wholly or partly rebutted by indications appearing from the subject matter or character of the legislation." But as Dixon J went on to emphasise118, "the general rule has not been and could not be impaired in its application to the general criminal law". To exclude from consideration a mistaken belief of the accused, held on reasonable grounds, in facts which, if true, would make the accused's conduct innocent was condemned by Dixon J in Thomas. Excluding consideration of such a mistake, where the accused was charged with a statutory offence forming part of the general criminal law, was described by Dixon J as "fundamentally inconsistent with established principle and a reversion to the objective standards of early law"119, as "excluding from inquiry the most fundamental element in a rational and humane criminal code"120 and as "not only ... contrary to principle but ... discreditable to our system of criminal law"121. In Thomas, the question was identified as being whether a mistake of the the existence of kind described ("an honest and reasonable belief circumstances which, if true, would make innocent the act for which [the accused] is charged"122) was a defence to a charge of bigamy. That identification of the issue reflected the procedure that had been followed in the courts below. At the trial of Mr Thomas for the offence of bigamy, contrary to s 61 of the Crimes Act 1928 (Vic), the trial judge stated a case for the opinion of the Full Court of the Supreme Court of Victoria. The question reserved for the opinion of the Full Court was whether it was "a good defence to the charge of bigamy ... that the accused bona fide and on reasonable grounds believed" that a divorce granted to the person with whom he first went through a ceremony of marriage had not been made absolute (with the result that his first "marriage" was void and the second "marriage" the subject of the charge was not bigamous). This being the question reserved, there was no occasion for this Court to consider questions of onus or standard of proof. 118 (1937) 59 CLR 279 at 305. 119 (1937) 59 CLR 279 at 308. 120 (1937) 59 CLR 279 at 309. 121 (1937) 59 CLR 279 at 311. 122 (1937) 59 CLR 279 at 304. Hayne Thomas was decided in 1937, after Woolmington v The Director of Public Prosecutions123 had held that, in a trial for murder, the prosecution must disprove accident beyond reasonable doubt if that issue was raised. And in R v Mullen124, decided in 1938, the High Court considered and applied Woolmington to the offence of wilful murder under the Criminal Code (Q), holding that, if "accident" was raised, it was for the prosecution to prove that the killing was not accidental125. It may be assumed that considerations of the kind that had been decided in Woolmington, and were soon to be considered in Mullen, led Dixon J, in Thomas, to frame his analysis of the issues tendered for consideration by the Court in that case by reference to notions of "criminal responsibility", rather than the availability of a "defence". Subsequently, in the well-known case of Proudman v Dayman126, consideration was given to the significance to be attached to honest and reasonable mistake of fact in relation to summary offences created by statute. Proudman concerned a charge of permitting an unlicensed person to drive a motor vehicle on a road. This Court held that proof that the defendant knew that the driver was unlicensed was not necessary. Dixon J considered127 that "[a]s a general rule an honest and reasonable belief in a state of facts which, if they existed, would make the defendant's act innocent affords an excuse for doing what would otherwise be an offence". But this was identified as a general rule and Dixon J went on to point out128: "[t]he strength of the presumption that the rule applies to a statutory offence newly created varies with the nature of the offence and the scope of the statute. If the purpose of the statute is to add a new crime to the general criminal law, it is natural to suppose that it is to be read subject to the general principles according to which that law is administered. But other considerations arise where in matters of police, of health, of safety or the like the legislature adopts penal measures in order to cast on the individual the responsibility of so conducting his affairs that the general welfare will not be prejudiced. In such cases there is less ground, either in 124 (1938) 59 CLR 124; [1938] HCA 12. 125 Murray v The Queen (2002) 211 CLR 193; [2002] HCA 26; Stevens v The Queen (2005) 227 CLR 319; [2005] HCA 65. 126 (1941) 67 CLR 536; [1941] HCA 28. 127 (1941) 67 CLR 536 at 540. 128 (1941) 67 CLR 536 at 540. Hayne reason or in actual probability, for presuming an intention that the general rule should apply making honest and reasonable mistake a ground of exoneration, and the presumption is but a weak one." (emphasis added) Where, as here, the legislature creates a statutory offence that forms part of the general criminal law, full force must be given to the need to read that provision "subject to the general principles according to which [the criminal law] is administered"129. That is, a person is not to be exposed to liability to imprisonment (in this case for up to 10 years) if that person reasonably and honestly believes in a state of facts that would make his or her conduct innocent, unless the legislature makes it abundantly plain that such a mistake of fact is irrelevant to the determination of criminal responsibility. No doubt, as Dixon J pointed out in Proudman130: "The burden of establishing honest and reasonable mistake is in the first place upon the defendant and he must make it appear that he had reasonable grounds for believing in the existence of a state of facts, which, if true, would take his act outside the operation of the enactment and that on those grounds he did so believe." But as Dixon J suggested in Proudman131, and this Court has later held in He Kaw Teh v The Queen132, the burden of proof of satisfying the tribunal about the asserted mistake of fact does not finally rest upon the accused. If the issue is raised, it is for the prosecution to prove beyond reasonable doubt that the accused did not honestly believe, on reasonable grounds, the existence of circumstances which, if true, would make innocent the act for which the accused is charged. To read a statute which creates a statutory offence that forms part of the general criminal law as subject to the general principles according to which the criminal law is administered does no more than reflect the fact that "[s]ociety and the law have moved away from the primitive response of punishment for the actus reus alone"133. It avoids what has been called "the public scandal of 129 (1941) 67 CLR 536 at 540. 130 (1941) 67 CLR 536 at 541. 131 (1941) 67 CLR 536 at 541. 132 (1985) 157 CLR 523; [1985] HCA 43. 133 Leary v The Queen [1978] 1 SCR 29 at 43 per Dickson J, cited by Stephen J in R v O'Connor (1980) 146 CLR 64 at 96; [1980] HCA 17. See also He Kaw Teh v The Queen (1985) 157 CLR 523 at 565 per Brennan J. Hayne convicting on a serious charge persons who are in no way blameworthy"134. And "[i]t is now firmly established that mens rea is an essential element in every statutory offence unless, having regard to the language of the statute and to its subject-matter, it is excluded expressly or by necessary implication"135. Particular application of these general principles is sometimes attended by difficulties about terminology. So, for example, the exact meaning or content of expressions like mens rea and actus reus, or "general" and "specific" intent, is not always easily identified. And there is no little danger in first seeking to identify a class of offences as ones of "strict liability" and then asking whether the offence under consideration is within or without that class. These difficulties reinforce the need to approach the question as one of construction of the particular statutory provision. In some statutes the language used to describe the offence will readily yield the conclusion that a specific state of mind must be established. He Kaw Teh was such a case. There the relevant statute prohibited "possession" of certain substances. As Brennan J pointed out136, "[h]aving something in possession is not easily seen as an act or omission; it is more easily seen as a state of affairs ... but it is a state of affairs that exists because of what the person who has possession does in relation to the thing possessed". But like the offence of bigamy considered in Thomas, the offence now under consideration contains no language that suggests a specific state of mind must be established to prove commission of the offence. The offence now under consideration is identified by reference only to specified conduct (having sexual intercourse) and the objectively ascertainable fact of the age of the "other person". It is this second, factual, element that must yield to the general principles about mistake that have earlier been described, unless the contrary legislative intent is plainly shown. In that regard, much emphasis was given in argument to the legislative history that lies behind the enactment of what now is s 66C(3) of the Crimes Act. In particular, the respondent submitted that consideration of the history of the provision demonstrates that an accused's mistake as to the age of the other person with whom the intercourse occurred is irrelevant. It is necessary, then, to say something about that history. In the course of dealing with the legislative history, and in order to put that history into its proper context, it will be 134 Sweet v Parsley [1970] AC 132 at 150 per Lord Reid, cited by Brennan J in He Kaw Teh (1985) 157 CLR 523 at 565. 135 He Kaw Teh (1985) 157 CLR 523 at 566 per Brennan J. 136 (1985) 157 CLR 523 at 564. Hayne convenient to notice some aspects of two 19th century English decisions β R v Prince137 and R v Tolson138. Legislative history Statutory provisions making it a crime to have carnal knowledge of a young female have long been part of the criminal law. The origins of the offence of carnal knowledge, and some associated sexual offences, are sometimes traced to ss 50 and 51 of the Offences against the Person Act 1861 (UK) (24 & 25 Vict c 100). It may be noted, however, that similar offences were to be found in s 17 of the Offences against the Person Act 1828 (UK) (9 Geo IV c 31). Both the 1828 and the 1861 Acts made it a felony to have carnal knowledge of a girl aged less than 10 years and a misdemeanour to have carnal knowledge of a girl above the age of 10 years and under the age of 12 years. By s 24 of the Australian Courts Act 1828 (Imp) the Offences against the Person Act 1828 applied in New South Wales. In 1883, the New South Wales Parliament enacted the Criminal Law Amendment Act 1883 (NSW). Section 42 of that Act made it an offence to have carnal knowledge of a girl above the age of 10 years and under the age of 14 years. None of these early provisions about the offence of carnal knowledge (in the Offences against the Person Act 1828, the Offences against the Person Act 1861 or the Criminal Law Amendment Act 1883) said anything about mistakes as to the age of the girl concerned. In Prince139, decided in 1875, 15 of the 16 judges in the Court for Crown Cases Reserved held that a bona fide belief on reasonable grounds that the girl concerned was over the age of 16 years was no defence to a charge of unlawfully taking an unmarried girl under the age of 16 out of the possession and against the will of her father. A critical step in the reasoning of several of the judges in that case was that mistake as to age would afford no answer to a charge of carnal knowledge. Ten years after Prince was decided, s 5 of the Criminal Law Amendment Act 1885 (UK) made it an offence to have unlawful carnal knowledge of any girl being of or above the age of 13 years and under the age of 16 years. But it was expressly provided by the 1885 Act that it should be "a sufficient defence to any 137 (1875) LR 2 CCR 154. 138 (1889) 23 QBD 168. 139 (1875) LR 2 CCR 154. Hayne charge ... if it shall be made to appear to the court or jury before whom the charge shall be brought that the person so charged had reasonable cause to believe that the girl was of or above the age of 16 years". It is to be observed that this provision for a defence to the charge was introduced in connection with the extension of the range of conduct rendered criminal and provided a defence in respect of only that extended range of criminal conduct. It is further to be observed that the provision about a defence of mistake about age was made before the decision in Tolson140. Like Prince, Tolson was a Crown case reserved for the consideration of all the judges. The prisoner had been convicted of bigamy, having gone through a ceremony of marriage with another man at the time when, in fact, her husband was alive. At her trial, the jury had found that at the time of the second marriage she believed, in good faith and on reasonable grounds, that her first husband was dead. By majority, the Court held that the conviction should be quashed. Little is to be gained from a detailed analysis of whether, and how, the decisions in Tolson and Prince may be reconciled. What is presently important is that, in Tolson, that considerable criminal lawyer, Sir James Fitzjames Stephen, then a judge of the Queen's Bench Division, made some important points about criminal responsibility that are of enduring relevance. He deprecated reference to the Latin maxim non est reus, nisi mens sit rea (and its variants). The phrase, though "in common use", was described141 as "most unfortunate, and not only likely to mislead, but actually misleading". It was identified as misleading because142 "[i]t naturally suggests that, apart from all particular definitions of crimes, such a thing exists as a 'mens rea', or 'guilty mind', which is always expressly or by implication involved in every definition" whereas "[t]his is obviously not the case, for the mental elements of different crimes differ widely". Sir James Stephen stated the relevant principles in terms that repay close attention. For present purposes, what is important is his identification of the general presumption that a statutory definition of crime must be read as qualified in such a way that there is no criminal responsibility in an accused who acts under honest and reasonable mistake of fact which, if true, would make the conduct innocent. It is as well, however, to identify the steps that preceded that conclusion. First, "[t]he full definition of every crime contains expressly or by 140 (1889) 23 QBD 168. 141 (1889) 23 QBD 168 at 185. 142 (1889) 23 QBD 168 at 185. Hayne implication a proposition as to a state of mind"143 (emphasis added). Next, while legislation may mark the mental element of a crime by use of a word like "maliciously", "fraudulently", "negligently" or "knowingly", some of the mental elements of crime are usually left unexpressed. They include what Sir James Stephen described144 as "competent age, sanity, and some degree of freedom from some kinds of coercion". He continued145: "With regard to knowledge of fact, the law, perhaps, is not quite so clear, but it may, I think, be maintained that in every case knowledge of fact is to some extent an element of criminality as much as competent age and sanity." (emphasis added) And it was on this footing that he propounded146 "as a general rule that an alleged offender is deemed to have acted under that state of facts which he in good faith and on reasonable grounds believed to exist when he did the act alleged to be an offence" (emphasis added). The decision in Prince was said, by the majority in Tolson, not to deny the general presumption of which Sir James Stephen wrote, but to depend upon the particular construction given to the relevant provision. And while it may be doubted that Prince can so easily be accommodated with the principles described by Sir James Stephen in Tolson, it is not useful to explore that particular question any further. This Court's decision in Thomas resolved any such doubts for Australia by adopting the principles described by Sir James Stephen. It may be noted, however, that any doubts about the application of what was decided in Prince to the offence of carnal knowledge were resolved in Britain by the legislature at Westminster expressly stating its intention in the Criminal Law Amendment Act 1885 about the relevance of mistake as to age. In New South Wales, the Crimes (Girls' Protection) Act 1910 (NSW) ("the 1910 Act") extended what the long title to that Act referred to as "the protection given to girls under the ages of fourteen and sixteen years respectively by certain provisions of the criminal law relating to offences against the person". By the 1910 Act, several provisions of the Crimes Act 1900 were amended to increase the age of girls against whom offences might be committed from 14 to 16 years. And s 2 of the 1910 Act further provided that, if the girl in question 143 (1889) 23 QBD 168 at 187. 144 (1889) 23 QBD 168 at 187. 145 (1889) 23 QBD 168 at 187. 146 (1889) 23 QBD 168 at 188. Hayne was over the age of 14 years, it was a defence to several charges, including a charge of carnal knowledge, "if it shall be made to appear to the court or jury before whom the charge is brought that the girl was at the time of the alleged offence a common prostitute, or an associate of common prostitutes, or that the person so charged had reasonable cause to believe that she was of or above the age of sixteen years". In 1911, the 1910 Act was amended by making plain that the defence to offences (including the offence of carnal knowledge) that the person charged had reasonable cause to believe that the girl was of or above the age of 16 years could be engaged only where the girl in question had "consented to the commission of the alleged offence"147. The provisions of the Crimes Act 1900 dealing with sexual offences against young girls were repealed and re-enacted by the Crimes (Amendment) Act 1924 (NSW). Section 71 of the Crimes Act, as re-enacted by the 1924 amending Act, provided that: "Whosoever unlawfully and carnally knows any girl of or above the age of ten years, and under the age of sixteen years, shall be liable to penal servitude for ten years." Section 77 provided that the consent of the subject of the offence should be no defence to certain charges but that: "[I]t shall be a sufficient defence to any charge which renders a person liable to be found guilty of an offence under [s 71 or s 72] of this Act ... if it be made to appear to the court or jury before whom the charge is brought β that the girl was over the age of fourteen years at the time of the alleged offence; and that she consented to the commission of the offence; and either β that she was at the said time a common prostitute or an associate of common prostitutes; or that the person so charged had at the said time reasonable cause to believe, and did in fact believe, that she was of or above the age of sixteen years." 147 Crimes (Girls' Protection) Amendment Act 1911 (NSW), s 2(b). Hayne The provisions of s 71 (making it an offence to have carnal knowledge of a girl aged of or above 10 years and under 16 years) and s 77 (providing for a defence if the accused reasonably believed the girl to have been of or above the age of 16 years) remained in force, substantially unaltered, for many years. Although the Crimes (Sexual Assault) Amendment Act 1981 (NSW) abolished the common law offences of rape and attempted rape, and created new offences of sexual assault, the provisions of the Crimes Act relating to carnal knowledge remained substantially unchanged. In 1985, s 71 of the Crimes Act was repealed148 and a new provision (s 66C) was made about what until then had been the offence of carnal knowledge. No longer was the offence confined to offences against girls. Section 66C now provided that any person who has sexual intercourse with another person who is of or above the age of 10 years, and under the age of 16 years, was liable to penal servitude for eight years. By the same 1985 Act, s 77 was repealed and re-enacted. For present purposes, it is important to notice that although s 77 continued to provide for a defence of mistake, if the child to whom the offence related was over the age of 14 years but under 16 years, the defence was available149 only "if the person charged and the child to whom the charge relates are not both male". In 2003, substantial amendments were made to the provisions of the Crimes Act dealing with sexual offences. The Crimes Amendment (Sexual Offences) Act 2003 (NSW) ("the 2003 Act") repealed the then provisions of s 66C and re-enacted the provision in terms that created four offences bearing different levels of maximum imprisonment. Section 66C(1) provided that a person having sexual intercourse with another person of or above the age of 10 years and under the age of 14 years was liable to imprisonment for 16 years. A person having intercourse with such a person "in circumstances of aggravation" was liable to imprisonment for 20 years (s 66C(2)). A person who has sexual intercourse with another person who is of or above the age of 14 years and under the age of 16 years was liable to imprisonment for 10 years (s 66C(3)) but if guilty of that offence imprisonment for 12 years (s 66C(4)). in circumstances of aggravation, was liable It is evident from the text of the 2003 Act and from the Second Reading Speech relating to the Bill for that Act that at least one of its purposes was, as the Minister said150, "to provide for the equal treatment of sexual offences 148 Crimes (Child Assault) Amendment Act 1985 (NSW), Sched 2, item 10. 149 s 77(2)(c). 150 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 7 May 2003 at 374. Hayne irrespective of whether the victim or the perpetrator is male or female". The Minister said151 that the Crimes Act, as it then stood, was discriminatory in a number of ways including "in that it provides different ages of consent for heterosexual and homosexual intercourse". The Bill for the 2003 Act was said152 to remove this discrimination and ensure equal treatment before the law. The Minister went on to say153: "The bill rationalises the age of consent in New South Wales to 16 years of age for all persons irrespective of gender or sexual orientation. The lower age limit is absolute β no specific statutory defence is provided for." This last reference reflected the repeal effected by the 2003 Act of what was then s 77(2) of the Crimes Act β the provision dealing with mistake about age. But it is important also to recall that, as s 77(2) stood immediately before the 2003 Act came into effect, it provided for a defence only "if the person charged and the child to whom the charge relates are not both male". And the repeal of s 77(2) by the 2003 Act was, therefore, consistent with the overall purpose of the 2003 Act being to eliminate discrimination between heterosexual and homosexual conduct. Neither the repeal of the provision for a defence of mistake about age, nor what was said in the course of the Second Reading Speech, provides a sufficient basis for concluding that the newly enacted provisions of s 66C(3) created an offence in which a mistake about the age of the person in respect of whom the offence is committed is irrelevant to criminal responsibility. It is important to recall that s 66C(3) may be engaged in a variety of circumstances. In some circumstances description of the conduct as predatory or exploitative will be more apposite than in other circumstances. But it is also important to recognise that s 66C(3) will be engaged in cases in which there is no allegation that the intercourse is not consensual and in cases where there is no circumstance of aggravation. If the conduct is not consensual, an offence under s 61I will have been committed. Section 61I provides that "[a]ny person who has sexual intercourse with another person without the consent of the other person and who knows that 151 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 7 May 2003 at 374. 152 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 7 May 2003 at 374. 153 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 7 May 2003 at 374. Hayne the other person does not consent to the sexual intercourse is liable to imprisonment for 14 years"154. If the intercourse is accompanied by the malicious infliction of actual bodily harm, or a threat to do so, the offence is the aggravated offence proscribed by s 66C(4). Likewise, if the alleged offender is in the company of another person or persons, if the alleged victim is under the authority of the alleged offender, if the alleged victim has a serious physical or intellectual disability or if the alleged offender took advantage of the alleged victim being under the influence of alcohol or a drug in order to commit the offence, it is the aggravated offence under s 66C(4) that is committed, not simply the offence under s 66C(3). Cases of these kinds are, therefore, to be put aside from consideration. They are cases in which more serious offences than the offence now under consideration are committed. Once that step is taken it is more clearly apparent, first, that s 66C(3) deals with consensual sexual conduct, and secondly, that the conduct may take place between persons who are of generally the same age or between persons whose ages are so different as to found the description of the conduct as "predatory" or "exploitative". And it is because the circumstances attending the conduct proscribed do not invariably warrant description as predatory or exploitative that it is not to be supposed that the presumption about the relevance of mistake of fact is excluded. Neither the bare fact of repeal of s 77(2), nor what the Minister said in his Second Reading Speech, suffices to establish that the legislative intention was that regardless of mistake as to age, the act of consensual intercourse with a person aged under 16 years, without more, warrants punishment by up to 10 years' imprisonment. It is no answer to the presumption to say, as was urged on behalf of the respondent in the present matter, that prosecutorial and sentencing discretions could accommodate the fact of mistake as to age. Those discretions provide no answer because the relevant question is one of criminal responsibility. A person should not be held criminally responsible for conduct which would be innocent if the facts were as that person reasonably believed them to be. Three further aspects of the matter merit some further separate examination. First, a deal of reference was made in argument to whether a person should be held criminally responsible under s 66C(1) for having sexual 154 Content was given to the expression "consent" by s 61R. But see now Crimes Amendment (Consent β Sexual Assault Offences) Act 2007 (NSW) inserting s 61HA in the Crimes Act. Hayne intercourse with another person who is of or above the age of 10 years and under the age of 14 years if the person accused held an honest and reasonable belief that the child was of or above the age of 14 years (but under 16 years). The fact that the accused may have reasonably believed that the child was 14 years or above (but under 16 years) would not affect that person's criminal responsibility. It would not affect that person's criminal responsibility under s 66C(1) because the belief, if true, would not make the accused person's conduct innocent. If the accused's belief about the age of the child were true, the accused would nonetheless have committed the offence under s 66C(3), of having intercourse with a person of or above the age of 14 years and under the age of 16 years. The point to be made is well illustrated by the colourful example given by Fullagar J in Bergin v Stack155. A person charged with the offence of burglary (breaking and entering a dwelling-house with intent to commit a felony between the hours of 9.00 pm and 6.00 am) who proved positively that he or she honestly, and on reasonable grounds, believed that the breaking and entering occurred before 9.00 pm would not be entitled to an acquittal on that ground. Even if the belief had been well founded, the conduct was not innocent, an offence had been committed. The second matter concerns consent. Absence of consent to the intercourse is not an element of the offence created by s 66C(3). If a question about mistake as to age arises at the trial of a charge under s 66C(3) that does not then enliven any issue about consent. To the extent to which the reasons of the Court of Criminal Appeal in the present matter156 may be understood as suggesting that it does, that suggestion is wrong. Of course the act of intercourse would not be innocent if the "other person" did not consent to it. But because the absence of consent is not an element of the offence, raising an issue about mistake as to age does not call for the prosecution to prove or the jury to consider any question about consent. The third point to make concerns whether it suffices for the prosecution to demonstrate beyond reasonable doubt that any belief entertained by the accused was not founded on reasonable grounds. It may be accepted that the common law of Australia and the common law of England diverged about whether a mistake of fact must be based on reasonable grounds if it is to be relevant to questions of criminal responsibility when the House of Lords decided R v Morgan157. It is to be noted, however, that in Morgan the House of Lords 155 (1953) 88 CLR 248 at 262-263; [1953] HCA 53. 156 CTM v The Queen (2007) 171 A Crim R 371 at 400 [126]-[127] per Howie J. Hayne distinguished Tolson; the House did not overrule the decision. As Lord Cross of Chelsea said158 in Morgan: "I can see no objection to the inclusion of the element of reasonableness in what I may call a 'Tolson' case. If the words defining an offence provide either expressly or impliedly that a man is not to be guilty of it if he believes something to be true, then he cannot be found guilty if the jury think that he may have believed it to be true, however inadequate were his reasons for doing so. But, if the definition of the offence is on the face of it 'absolute' and the defendant is seeking to escape his prima facie liability by a defence of mistaken belief, I can see no hardship to him in requiring the mistake β if it is to afford him a defence β to be based on reasonable grounds." It is unnecessary to explore here whether the distinction drawn in Morgan is well based. That is, it is unnecessary to examine whether it is important that the subject of the mistake in question in Morgan was the consent of the victim of the alleged assault. Professor Rupert Cross has argued159 that "it is a contradiction in terms to say that someone who believes, however unreasonably, that the woman consents either knows that she does not do so or disregards the question of consent". But, whatever force that particular argument may have160, neither party in the present matter suggested that, if mistake is relevant to criminal responsibility, this Court should now reconsider the long-established Australian common law that the mistake must be founded on reasonable grounds. That approach was reaffirmed in He Kaw Teh and neither party to the present appeal sought any reconsideration of that decision or the earlier decisions reflected in it. It is, therefore, not profitable to examine how what was said by the House of Lords in Morgan was subsequently understood and applied by the Privy Council in Beckford v The Queen161. It suffices to notice that in both B (A Minor) v Director of Public Prosecutions162 and R v K163 the House of Lords accepted the force of the presumption of statutory construction that absence of mistake of fact 158 [1976] AC 182 at 202-203. 159 Cross, "Centenary Reflections on Prince's Case", (1975) 91 Law Quarterly Review 160 Simester, "Mistakes in Defence", (1992) 12 Oxford Journal of Legal Studies 295. Hayne about age must be proved by the prosecution in prosecuting a statutory offence like the offence under consideration in the present matter. Raising the issue Questions of mistake need be considered at a criminal trial only if the issue is alive. As Dawson J pointed out in He Kaw Teh164: "[T]he burden of providing the necessary foundation in evidence will in most cases fall upon the accused. But it is not inconceivable that during the case for the prosecution sufficient evidence may be elicited by way of cross-examination or otherwise to establish honest and reasonable mistake or to cast sufficient doubt upon the prosecution case to entitle the accused to an acquittal. The governing principle must be that which applies generally in the criminal law. There is no onus upon the accused to prove honest and reasonable mistake upon the balance of probabilities. The prosecution must prove his guilt and the accused is not bound to establish his innocence. It is sufficient for him to raise a doubt about his guilt and this may be done, if the offence is not one of absolute liability, by raising the question of honest and reasonable mistake. If the prosecution at the end of the case has failed to dispel the doubt then the accused must be acquitted." As these reasons will later show, no question of mistake was sufficiently raised at the trial of the appellant to require consideration of that issue by the jury. To explain why that is so, it is necessary to say something further about the course of the trial of the appellant. The appellant's trial The appellant was charged in the District Court of New South Wales with one count of sexual intercourse without consent, contrary to s 61J(1) of the Crimes Act, and, as an alternative count, one count of sexual intercourse with a person aged between 14 and 16 years in circumstances of aggravation, contrary to s 66C(4). The circumstance of aggravation relied upon by the prosecution in relation to the charge under s 66C(4) was that the appellant had taken advantage of the complainant being under the influence of alcohol in order to commit the offence. The complainant was aged 15 years at the time of the alleged offence. Although the indictment charged only the two offences (as alternative charges), if the jury was not satisfied that either of those charges was made out, a further alternative had to be considered β the offence of having sexual intercourse 164 (1985) 157 CLR 523 at 592-593. Hayne with another person who is of or above the age of 14 years and under the age of 16 years, contrary to s 66C(3). Section 66E(1A) of the Crimes Act provides that where a jury is not satisfied that an accused is guilty of an offence under s 66C(4) but is satisfied that the accused is guilty of an offence contrary to s 66C(3), the jury may find the accused not guilty of the aggravated form of the offence but guilty of the offence under s 66C(3). The prosecution case was that the appellant had had non-consensual sexual intercourse with the complainant. She gave evidence that she was drunk, had fallen asleep, and that she awoke to find the appellant having intercourse with her. The appellant did not give evidence at his trial. Evidence was led of what he had said to interviewing police officers in his recorded interview. In that interview the appellant denied having intercourse with the complainant, acknowledged that he had wanted to do so, but said that he had left the bedroom in which the complainant was present, before any intercourse took place, because his friends had entered the room and had then refused to leave. The appellant said in the interview that he knew the complainant was 16 years old because she had told him this some months earlier. There was no evidence led at the trial to confirm or contradict what the appellant said in his interview with police about having known that the complainant was aged 16 years or about how he came to know this. Before final addresses to the jury had been completed, trial counsel for the appellant asked the trial judge (Garling DCJ) to instruct the jury about mistake as to the complainant's age. Trial counsel for the appellant submitted that the appellant was in a difficult position, because he was denying sexual intercourse had taken place while at the same time asserting that he had a defence of honest and reasonable mistake of fact about the complainant's age. Trial counsel asked for the defence of mistake to be elucidated to the jury even though he would not address the jury about the issue. The trial judge accepted that the question of mistake should be left to the jury. In his ruling on the topic, the trial judge indicated, in effect, that he proposed to instruct the jury that it would be for the prosecution to prove, beyond reasonable doubt, that the appellant did not have a reasonable and honest mistake about the complainant's age. In his directions to the jury, however, the trial judge gave directions which reflected the position that had obtained when s 77(2) of the Crimes Act provided for a defence of mistake as to the complainant's age. In particular, the trial judge directed the jury that it was for the appellant to prove, on the balance of probabilities, that he held such an honest and reasonable mistake. No objection to the direction was made at trial but in his subsequent appeal to the Court of Criminal Appeal and his appeal to this Court, the appellant submitted that the direction about onus and standard of proof was wrong. Hayne The jury returned verdicts of not guilty to the count of sexual intercourse without consent, and to the alternative count of sexual intercourse with a person between the ages of 14 and 16 years in circumstances of aggravation, but returned a verdict of guilty to the statutory alternative count of an offence under s 66C(3). Appeal to the Court of Criminal Appeal The appellant appealed against his conviction to the Court of Criminal Appeal of the Supreme Court of New South Wales. That Court (Hodgson JA, Howie and Price JJ) dismissed165 the appellant's appeal against conviction. The Court held that "the history and context of the legislation provides a clear and unambiguous inference that Parliament intended that there be no defence available to the newly created offences by way of mistake of age"166. The analysis made by the Court of Criminal Appeal of the relevant statutory provisions was framed in terms of whether there is a defence of mistake about age available to a charge brought under s 66C(3). For the reasons given earlier, that approach to the matter is flawed. The relevant question is not whether there is a defence or excuse available in answer to what otherwise is the imposition of criminal responsibility. The relevant question is, as Sir James Stephen identified in Tolson167: what knowledge of fact is an element of the criminality for which the legislature has provided. And as Dixon J pointed out in Thomas, the presumption that the legislature does not intend to attach criminal responsibility for conduct performed by a person under a mistake of fact reasonably and honestly held, is a presumption not lightly or easily denied. For the reasons given earlier, mistake of fact about the age of the person concerned is relevant to criminal responsibility for the offence created by s 66C(3). And as is also explained earlier, if the issue is raised at trial, it is for the prosecution to prove, beyond reasonable doubt, that the accused did not honestly and reasonably believe the other person to be aged more than 16 years. The directions given by the trial judge on this subject were, therefore, wrong. The appeal to this Court The major premise of the appellant's argument in this Court thus being established, attention must turn to the minor premise: should the issue of mistake 165 (2007) 171 A Crim R 371. 166 (2007) 171 A Crim R 371 at 404 [147] per Howie J. 167 (1889) 23 QBD 168 at 187. Hayne have been left to the jury? What was the evidence that enlivened an issue of mistake at trial? The validity of what has been described as the minor premise of the appellant's argument was put in issue by the respondent's notice of contention. That notice was cast in terms suggesting that no issue about mistake could arise where "the defence relied upon was not that the appellant, at the time of having intercourse, mistakenly believed that the complainant was over 16, but a denial that intercourse occurred at all". This contention may well reflect a serious forensic difficulty facing an accused who seeks to urge alternative answers to a charge of the kind now in question. It may be accepted that it is not always easy to argue that intercourse did not occur but that, if it did, the accused was mistaken about the age of the other person. But whatever may be the forensic difficulties in such an argument it was not shown that there was any legal reason why an accused could not assert both arguments. The proposition advanced by the respondent in the notice of contention is too broad and should not be accepted. Nonetheless, it is important to recognise, as the respondent accepted, that, in instructing the jury in a criminal trial, the trial judge must give such instructions as are necessary to ensure a fair trial of the accused. That is why, in Pemble v The Queen168, this Court held that, whatever course counsel for an accused may take, the trial judge "must be astute to secure for the accused a fair trial according to law"169 and to that end must "put to the jury with adequate assistance any matters on which the jury, upon the evidence, could find for the accused"170 (emphasis added). Trial counsel for the appellant had invoked this principle in asking the trial judge to direct the jury about mistake. In this Court the respondent contended that the principle was not engaged. The respondent's contention made in the notice of contention by reference to Pemble has been rejected, but there remains for consideration whether the principle in Pemble was properly engaged at trial. That turns on whether an issue about mistake was raised at trial. Without more, the fact that the appellant was proved to have made an out-of-court assertion about his belief as to the complainant's age was not sufficient to raise an issue at his trial about mistake. In his interview with police, the appellant had said that he believed the complainant was aged 16 years 168 (1971) 124 CLR 107; [1971] HCA 20. 169 (1971) 124 CLR 107 at 117 per Barwick CJ. 170 (1971) 124 CLR 107 at 118 per Barwick CJ. Hayne because she had told him this. No question about this alleged conversation or about any communication she may have had with the appellant about her age was directed to the complainant in the course of her evidence. Not having raised the matter with the complainant in the course of her evidence, it was not then open to the appellant, relying only on what he had told police, to say that there was a live issue at the trial about his belief about the complainant's age. To enliven the issue it was essential that the complainant be asked whether there had been a conversation of the kind described by the appellant to police. But not having raised the matter with her, it was not open to the appellant to say that the evidence elicited in the course of the prosecution's case sufficed to enliven the issue. It follows that although the directions which the trial judge gave the jury about the question of mistake were wrong, the error occasioned no substantial miscarriage of justice. It occasioned no such miscarriage of justice because the misdirection concerned matters which it was neither necessary nor appropriate for the jury to consider at the appellant's trial. It also follows that the appeal to this Court should be dismissed. 197 HEYDON J. The circumstances behind this appeal are set out in the reasons for The Proudman v Dayman principle The appellant was convicted of contravening s 66C(3) of the Crimes Act 1900 (NSW) as it stood at the date of the alleged offence, 24 October 2004. If the words of that section were considered by themselves, there would be much to be said for the view that they do not exclude the "defence" in Proudman v Dayman171, and that the Court of Criminal Appeal erred in concluding that that "defence" could not apply in this case. However, they must be considered not only by themselves, but also in the context of the provisions of the Crimes Act as they stood at the date of the alleged offence, and in the light of the legislation in its earlier forms. The key question is whether on that approach to the construction of s 66C(3) the Court of Criminal Appeal's conclusion is correct. What is often called the "defence" in Proudman v Dayman may be put thus. Legislation will be construed so as not to render criminally liable an accused person provided that, first, the accused person satisfies an evidential burden of establishing an honest belief on reasonable grounds in the existence of a state of factual affairs which, had it existed, would have made the acts alleged by the prosecution non-criminal, and, secondly, the prosecution fails to discharge a legal burden of establishing beyond reasonable doubt that the accused did not have that honest belief on reasonable grounds172. Below this will be called "the Proudman v Dayman principle". Two points may be briefly amplified. First, the Proudman v Dayman principle does not operate as an absolute rule of substantive law. Rather it is a presumption173 or a "prima facie rule"174 or a "general rule"175 or a rule of construction. Its effect can be negated by appropriate legislative language to the contrary. Secondly, the Proudman v Dayman principle is not a true "defence" at all. Subject to the accused's discharge of the evidential burden, where legislation has not excluded the principle, there is a legal burden of proof on the prosecution, not the accused. 171 (1941) 67 CLR 536 at 539; [1941] HCA 28. 172 In this appeal the prosecution argued strenuously that the legal burden lay on the accused, but the submission cannot stand with the modern authorities, particularly He Kaw Teh v The Queen (1985) 157 CLR 523; [1985] HCA 43. 173 Thomas v The King (1937) 59 CLR 279 at 304 per Dixon J; [1937] HCA 83. 174 Thomas v The King (1937) 59 CLR 279 at 305 per Dixon J. 175 Hardgrave v The King (1906) 4 CLR 232 at 237 per Griffith CJ; [1906] HCA 47. There are authorities176 that hold that there must be "express authorization of an abrogation or curtailment of a fundamental right, freedom or immunity". There must be177: "some manifestation or indication that the legislature has not only directed its attention to the question of the abrogation or curtailment of such basic rights, freedoms or immunities but has also determined upon abrogation or curtailment of them. The courts should not impute to the legislature an intention to interfere with fundamental rights. Such an intention must be clearly manifested by unmistakable and unambiguous language." (emphasis added) The Proudman v Dayman principle is sometimes seen as a "fundamental right" to which these statements apply. Assuming that to be correct178, three points should be made. First, the emphasised parts of the passages quoted reveal that they are couched in terms of a search for subjective legislative intention, as are other passages on which those passages rely or to which they have led. So read, they are not convincing if the correct common law rule of construction is one which calls for an inquiry not into what the legislature meant, but what the legislation 176 Coco v The Queen (1994) 179 CLR 427 at 437 per Mason CJ, Brennan, Gaudron and McHugh JJ; [1994] HCA 15, applied, for example, in Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476 at 494 [37]; [2003] HCA 2; Al-Kateb v Godwin (2004) 219 CLR 562 at 577 [19]; [2004] HCA 37; Electrolux Home Products Pty Ltd v Australian Workers' Union (2004) 221 CLR 309 at 329 [20]-[21]; [2004] HCA 40. 177 Coco v The Queen (1994) 179 CLR 427 at 437 per Mason CJ, Brennan, Gaudron 178 It does not appear, for example, in a list of 21 "fundamental rights" to which Coco v The Queen applies which was compiled by Chief Justice Spigelman in his first lecture in the 2008 McPherson Lectures on "Statutory Interpretation and Human Rights", delivered on 10 March 2008 (at 21-24, especially the text at notes means179, and limits its search for legislative intention to "the intention expressed by the words used"180. Secondly, the requirement for "express" language leaves out of account the possibility of construing legislation so as to exclude the Proudman v Dayman principle by reason of "a necessary implication"181. An implied provision can be as important, even crucial, as an express one, whether the court is considering a contract or a statute. Thirdly, the requirement for "express" or "unmistakable and unambiguous language"182 is not to be read as excluding recourse to conventional methods of statutory construction. One of these is legislative history, for an inquiry into legislative history can reveal a necessary implication. Mason J said: "Resort to the history of a statute all too rarely illuminates the meaning of its current provisions."183 The truth of that statement, whether it is viewed as empirical or normative, may be accepted, but it does concede that, however regrettable it may be that those construing legislation should have to engage in archaeological excavations of its origins, sometimes the history of a statute illuminates its present meaning184. The legislative background to the 2003 amendments Section 66C(3) of the Crimes Act, in its form at the date of the alleged offence, was introduced by the Crimes Amendment (Sexual Offences) Act 2003. What was the legislative background to its introduction and to the simultaneous repeal of s 77(2)? 179 Holmes, "The Theory of Legal Interpretation", (1899) 12 Harvard Law Review 417 180 Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 304 per Gibbs CJ; [1981] HCA 26, quoting River Wear Commissioners v Adamson (1877) 2 App Cas 743 at 763. 181 The Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543 at 553 [11] and 563 [43]; [2002] HCA 49; see also Coco v The Queen (1994) 179 CLR 427 at 438. 182 Coco v The Queen (1994) 179 CLR 427 at 437. 183 Beckwith v The Queen (1976) 135 CLR 569 at 578; [1976] HCA 55. 184 As Mason J himself proceeded to demonstrate in Beckwith v The Queen itself: (1976) 135 CLR 569 at 578-582. The original provisions. The Crimes Act as enacted in 1900 provided in s 67: "Whosoever carnally knows any girl under the age of ten years shall be liable to suffer death." And s 71 provided: "Whosoever unlawfully and carnally knows any girl of or above the age of ten years, and under the age of fourteen years, shall be liable to penal servitude for ten years." The 1910 and 1911 amendments. In 1910, the age range of 10 to 13 years in s 71 was changed to 10 to 15 years by the Crimes (Girls' Protection) Act 1910, s 2. Section 2 also created the first precursor to s 77(2). It provided a defence to the offence of carnal knowledge of a girl aged 10 to 15 years (s 71) where the girl was over 14, "if it shall be made to appear ... that the [accused] had reasonable cause to believe that she was of or above the age of sixteen years". In 1911, s 2 of the Crimes (Girls' Protection) Amendment Act amended s 2 of the Crimes (Girls' Protection) Act 1910 so as to make it a condition of the defence based on the accused's having reasonable cause to believe that the girl was of or over 16 that she consented. After the creation of this new defence, whatever the earlier position was, there was no room for construing ss 67 and 71 by recourse to the Proudman v Dayman principle. The new defence was a true defence: the accused had to satisfy the legal onus of proving on the balance of probabilities the conditions set out. These requirements were harder for the accused to satisfy than the conditions applying if the Proudman v Dayman principle applied. The express enactment of a true defence with these hard requirements excluded the possibility of construing ss 67 and 71 conformably to the Proudman v Dayman principle. It would have been absurd if an accused person who failed to satisfy the legal burden of proving the conditions stipulated on the balance of probabilities in order to obtain the benefit of the expressly granted defence would be able nonetheless to escape conviction by satisfying an evidential burden of holding an honest and reasonable belief that the other participant was at least 16, and successfully contending that the prosecution had failed to satisfy a legal burden of excluding the existence of that honest and reasonable belief beyond reasonable doubt. The legislation prevented application of the Proudman v Dayman principle, because the enactment of the new defence (coupled with the failure of the legislation to make any other true defence of the kind available either to those charged with sexual intercourse with girls aged between 14 and 15 or to persons accused of offences against girls aged less than 14 under s 67 or s 71) excluded any other pathway to acquittal based on the beliefs of the accused about the age of the victim. The 1924 changes. The Crimes (Amendment) Act 1924 made the following changes. Section 71 was repealed and a new s 71 enacted in the following terms: "Whosoever unlawfully and carnally knows any girl of or above the age of ten years, and under the age of sixteen years, shall be liable to penal servitude for ten years." A new s 77 was enacted. So far as relevant, its terms were: "The consent of the ... girl ... shall be no defence to any charge under [section] seventy-one ... Provided that it shall be a sufficient defence to any charge which renders a person liable to be found guilty of an offence under [section] seventy-one ... if it be made to appear to the court or jury before whom the charge is brought β that the girl was over the age of fourteen years at the time of the alleged offence; and that she consented to the commission of the offence; and either β that the person so charged had at the said time reasonable cause to believe, and did in fact believe, that she was of or above the age of sixteen years." Neither that change, nor any other change before 2003, made any difference to the non-availability of the Proudman v Dayman principle. The abolition of the death penalty in 1955. The Crimes (Amendment) Act 1955, s 5(f), amended s 67 by substituting for the words "to suffer death" the words "to penal servitude for life". Changes in 1974 and 1981. In 1974, the Crimes and Other Acts (Amendment) Act made two changes to s 77, neither relevant to the present case. In 1981, although various sexual offences provisions in the Crimes Act were changed by the Crimes (Sexual Assault) Amendment Act 1981, ss 67 and 71 were not changed, and s 77 was changed only in minor and immaterial respects. The 1984 changes. The Crimes (Amendment) Act 1984 introduced various offences of homosexual intercourse. Section 78H corresponded with s 67 and s 78K with s 71 (save that the age range was 10 to 17 years β that is, the age of consent was 18, not 16). The 1985 changes. The Crimes (Child Assault) Amendment Act 1985 repealed ss 67 and 71. Instead of s 67, a new s 66A provided: "Any person who has sexual intercourse with another person who is under the age of 10 years shall be liable to penal servitude for 20 years." And instead of s 71, a new s 66C(1) provided: "Any person who has sexual intercourse with another person who is of or above the age of 10 years, and under the age of 16 years, shall be liable to penal servitude for 8 years." Although the penalty for an offence against the former s 67 was reduced from life imprisonment to 20 years in the new s 66A, a substantial difference was maintained between it and the penalty for an offence against the former s 71 and the new s 66C(1), even though the latter was reduced to 8 years. Further, while ss 67 and 71 rendered criminal only carnal knowledge of girls, ss 66A and 66C(1) rendered criminal sexual intercourse with "another person", whether male or female. Section 77 was also repealed and replaced. The new s 77(1) provided that "[e]xcept as provided by subsection (2)", consent was no defence to various charges including charges under s 66A or s 66C. The new s 77(2) relevantly provided: "It shall be a sufficient defence to a charge which renders a person liable to be found guilty of an offence under section ... 66C ... if the person charged and the child to whom the charge relates are not both male and it is made to appear to the court or to the jury before whom the charge is brought that β the child to whom the charge relates was over the age of 14 years at the time the offence is alleged to have been committed; the child to whom the charge relates consented to the commission of the offence; and the person so charged had, at the time the offence is alleged to have been committed, reasonable cause to believe, and did in fact believe, that the child to whom the charge relates was of or above the age of 16 years." That is, the conferral of that defence on persons alleged to have committed crimes against s 66C(1) did not extend to males who were alleged to have committed offences on males. The introduction of s 66F in 1987. The Crimes (Personal and Family Violence) Amendment Act 1987, although it did not amend s 66A, s 66C(1) or s 77(2), did introduce a crime of having sexual intercourse with a person who had an intellectual disability. Section 66F(5) provided: "A person does not commit an offence under this section unless the person knows that the person concerned has an intellectual disability." That provision has survived the legislative amendments in 2003 which pose the construction issue before the Court. Changes in 1989, 1995, 1999 and 2002. The Crimes (Amendment) Act 1989, the Criminal Legislation Amendment Act 1995 and the Crimes Legislation Amendment Act 1999 made immaterial amendments to s 77(2). The Crimes (Sentencing Procedure) Amendment (Standard Minimum Sentencing) Act 2002, s 3 and Sched 2 item 2, amended s 66A by increasing the penalty for sexual intercourse with a child under 10 from 20 to 25 years. The exclusion of the Proudman v Dayman principle before 2003 Thus from 1910 until just before the time when the Crimes Amendment (Sexual Offences) Act 2003 came into force the position was as follows. Sexual intercourse with a girl (from 1985, another person) under 10 was a crime punishable by death, then by life imprisonment, then by 20 years imprisonment, then by 25 years imprisonment. Sexual intercourse with a girl (from 1985, another person) of or over the age of 10 and under 16 was a crime punishable by 10 years penal servitude, then by 8 years imprisonment. To a charge of the latter offence under s 66C, s 77(2) afforded a defence of consent, provided other conditions were satisfied: from 1985 the other conditions were that the person accused and the other participant were not both male, the other participant was over 14, and the accused reasonably believed that the other participant was 16 years or older. That defence applied not only to s 66C charges, but also to certain charges under ss 61L, 61M(1), 61N(1), 61O(1) and (2) and 66D. The legislation presented the following pattern. When some defence in the strict sense relating to a mental state was created, explicit provision was made for it: one example is the legislation in existence from 1910 that led to s 77(2) in the form it took just before its repeal, and another example is s 78C(1), which created a defence to charges of incest or attempted incest that the accused did not know that he or she was related to the other participant. When some specific mental state had to be proved by the prosecution beyond reasonable doubt, specific provision was made for it, as with s 66F(5). This is a pattern which points strongly towards reading the legislation creating offences of sexual intercourse below specified ages as excluding the Proudman v Dayman principle. Plainly s 66F(2)(a), creating the offence of having sexual intercourse with another person who has an intellectual disability, could not have been given, and cannot now be given, a construction corresponding with the Proudman v Dayman principle in view of s 66F(5). That is because the specific creation of a duty β a rather heavy one β on the prosecution to prove beyond reasonable doubt that the accused knows of the other participant's intellectual disability as a necessary condition for conviction is inconsistent with recognition of a lesser duty on the prosecution to exclude the existence of an honest and reasonable belief by the accused that the other participant had no intellectual disability. While it is true that the offence created by s 66F(2)(a) is not related to the age of the person participating with the accused in the act charged, and while it is true that the offences created by ss 66A and 66C(1) were age-related in that way, many persons of intellectual disability share with many persons aged less than 16, and even more persons aged less than 10, what s 66F(3) describes as a "vulnerability to sexual exploitation". Further, s 66C(1), which created the offence of having sexual intercourse with another person aged between 10 and 15, could not have been given a construction corresponding with the Proudman v Dayman principle, at least in relation to persons accused of sexual intercourse with persons aged 14 or 15 who could satisfy the other conditions of s 77(2)185. It would have been incongruous, in view of the defence of consent available to such persons under s 77(2) (provided they could also prove that they had a reasonable cause to believe, and did believe, that the other participant was 16 or over), to construe s 66C(1) as creating an offence depending on the prosecution's capacity to exclude beyond a reasonable doubt the accused's honest and reasonable belief that the other participant was 16 or over. From the accused's point of view, s 77(2) afforded a path to acquittal, but a difficult one. The existence of that specific aspect of the legislative regime was not reconcilable with the existence of the easier path to acquittal which a Proudman v Dayman construction of s 66C(1) would have afforded, with a more favourable burden and standard of proof. Section 66C(1) could not have been given a construction corresponding with the Proudman v Dayman principle in relation to accused persons who could not take advantage of the s 77(2) defence of consent in relation to sexual intercourse with persons aged 14 or 15 on the ground that both participants in the actus reus were male. To have read s 66C(1) in its application to male persons accused of sexual intercourse with males aged 14 or 15 as attracting the Proudman v Dayman principle, while also reading s 66C(1) in its application to male persons accused of sexual intercourse with females aged 14 or 15, or female persons accused of sexual intercourse with male or female persons aged 14 or 15, as not attracting that principle, would have been incongruous and artificial. Moreover, s 66C(1) could not have been given a construction corresponding with the Proudman v Dayman principle in the case of accused persons charged with the offence of having sexual intercourse with another person aged between 10 and 15, being persons unable to take advantage of the s 77(2) defence because the other person was aged less than 14. Again it would be incongruous to have given s 66C(1) a construction corresponding with the Proudman v Dayman principle for one class of accused persons charged with a particular offence when it did not have that construction in its application to another class of persons charged with the same offence. Finally, s 66A, creating the offence of having sexual intercourse with another person under the age of 10, was not to be construed as corresponding with the Proudman v Dayman principle. If the offence created by s 66C(1) was not to be so construed, but s 66A was to be so construed, the legislative regime would not have been a coherent one. 185 If it matters, according to the Court of Criminal Appeal, the appellant conceded β it is not clear how extensive the concession was β in that Court that the Proudman v Dayman principle did not apply to the offence created by s 66C(1) while s 77(2) was in force: CTM v The Queen (2007) 171 A Crim R 371 at 385 [65]. The language of the 2003 amendments What is there in the language of the 2003 amendments which suggests any change in that state of affairs? What is there to suggest that the Proudman v Dayman principle now applies to offences relating to sexual intercourse with persons below a certain age? The 2003 amendments involved repeal of homosexual offences and assimilation of them with other sexual offences, thus creating a uniform age of consent of 16. Apart from those amendments and apart from other amendments which were formal in character, the 2003 amendments reveal a trend towards extended criminal liability and heavier sanctions. Thus the conduct of an accused person who had sexual intercourse with another person under his or her special care when that other person was above the age of 17 and under the age of 18 was rendered criminal (s 73(2)). The incest provisions were extended to females, and to persons having sexual intercourse with grandparents, half-brothers and half-sisters (s 78A). The penalty for incest was increased from 7 years imprisonment to 8 (s 78A(1)). Of central concern is the repeal of s 66C(1) and s 77(2). In place of s 66C(1), a "new" s 66C(1) and (3) provided: "(1) Any person who has sexual intercourse with another person who is of or above the age of 10 years and under the age of 14 years is liable to imprisonment for 16 years. (3) Any person who has sexual intercourse with another person who is of or above the age of 14 years and under the age of 16 years is liable to imprisonment for 10 years." The repeal of s 77(2) was not accompanied by any replacement or derivative provision. The "new" s 66C differed from the former s 66C(1) in several ways. First, leaving aside offences with aggravating features, dealt with in s 66C(2), (4) and (5), it replaced one offence (sexual intercourse with another person aged 10 to 15 years) with two offences (sexual intercourse with another person aged 10 to 13 years (s 66C(1)) and sexual intercourse with another person aged 14 to 15 years (s 66C(3))). Secondly, it increased penalties markedly: for the offence of sexual intercourse with another person aged 10 to 13 years, instead of 8 years imprisonment the punishment was 16 (s 66C(1)); for the offence of sexual intercourse with another person aged 14 to 15 years, instead of 8 years imprisonment the punishment became 10 (s 66C(3)). These increased penalties are consistent with the increase effected in 2002 in the penalty for the crime created by s 66A of sexual intercourse with a person under 10 from 20 years imprisonment to 25186. Thus the offences created by s 66C(1) and (3) were "new" in form only: in truth the legislation simply preserved the pre-2003 position, while adopting a more discriminating (but more onerous) approach to penalty. Leaving aside s 77(2) and the Proudman v Dayman principle, that which would have been criminal before the 2003 amendments remained criminal after them, but attracted higher penalties. Overall then, the 2003 amendments widened criminal liability (not least by repealing the s 77(2) defence) and increased the severity of criminal sanctions (apart from reductions flowing from the repeal of the provisions relating to homosexual offences). Exclusion of the Proudman v Dayman principle: radical and obscure nature of suggested change The appellant's case is that the inapplicability of the Proudman v Dayman principle before 2003 was reversed by the amendments made in 2003. If so, a very extensive and radical change to a long-standing position would have been effected, because the Proudman v Dayman principle had not existed for at least the previous 93 years in relation to age-related sexual crimes against females, and for the previous 18 years in relation to age-related sexual crimes where it was not the case that both participants were male. And the change would have extended to various other provisions to which s 77(2) provided a defence187. Yet the repeal of the defence conferred by s 77(2) does not suggest that that radical change was made. The repeal of s 77(2) suggests only that an onerous pathway to acquittal was removed. It does not suggest that an easier pathway to acquittal came into existence despite having not existed for a long time. Nothing else in the new statutory language supports the outcome advocated by the appellant. But the change advocated by the appellant is not only radical: it is also obscure. If, in lieu of the inapplicability of the Proudman v Dayman principle relating to honest and reasonable belief to the former s 66C, that principle is to be applied to the new s 66C(1) and (3) in consequence of the repeal of s 77(2), a question arises: how far is that principle to be applicable? 186 See [216] above. 187 See above at [217]. Is it to be applicable only in the precise area to which s 77(2) applied β where the participants were not both male, and the participant other than the accused was 14 or more? (b) Or is it to be applicable where the participants were male, and the participant other than the accused was 14 or more? (c) Or is it also to be applicable where the participant other than the accused was less than 14? (d) Or is it additionally to be applicable where the other participant was less than 10? If all the questions are answered "Yes", the pre-2003 law will have been very extensively altered despite the want of any textual basis for reaching that conclusion, or, as will be seen below188, without any evident consciousness on the part of the responsible Minister that the amendments led to this result or were intended to. If only one, two or three questions are answered "Yes", in the words of Hodgson JA, "there would be the anomalous situation that, in the absence of anything in the legislation as amended to suggest this result, [the] Proudman v Dayman [principle] would apply to some age-related sexual offences and not to others."189 Similar questions, and similar difficulties, arise in relation to other provisions to which s 77(2) applied, such as s 61N(1) (act of indecency with a person under 16), s 61O(1) (act of indecency with a person under 16 in circumstances of aggravation), s 61O(2) (act of indecency with a person under 10) and s 61M (aggravated indecent assault of child under 16). The relevance of s 66F A further factor pointing against the correctness of the appellant's approach to the construction of s 66C(3) can be seen by comparing s 66C with s 66F. The conduct rendered criminal by s 66F(2) of having sexual intercourse with another person who has an intellectual disability, or is under the authority of the accused in connection with any facility or programme providing services to persons who have intellectual disabilities, may be identical with conduct rendered criminal by s 66C(1) and (3) in the circumstances of aggravation referred to in s 66C(5)(f), ie where "the alleged victim has a serious intellectual disability". On the appellant's argument, if the charge were brought under s 66C, the Proudman v Dayman principle would operate; but if the charge were brought under s 66F(2), the Proudman v Dayman principle would not operate because of 189 CTM v The Queen (2007) 171 A Crim R 371 at 374 [7]. s 66F(5). This would create an anomaly. If the appellant's argument were rejected, the anomaly would not exist. The irrelevance of Chard v Wallis The appellant relied on the decision of Roden J, sitting on appeal from the decision of a magistrate, in Chard v Wallis190. He held that the Proudman v Dayman principle applied to the offence created by s 78Q(2) of the Crimes Act. Counsel for the appellant described that provision as creating an offence of "gross indecency by a male upon a male aged under 18 years". In fact the relevant offence was procuring the commission of an act of gross indecency by a male person under the age of 18. That decision seems open to some of the criticisms made by the Court of Criminal Appeal191. But whether or not that is so, the construction of s 78Q(2) is of limited materiality to the construction of the post-2003 version of s 66C(3) in view of the fact that one of the 2003 amendments was the repeal of s 78Q(2)192, which was not absorbed into any successor to the pre-2003 version of s 66C193. The Second Reading Speech Earlier194, it was suggested that under the applicable common law rules of statutory construction, the correct inquiry may not be into what the legislature "intended", "directed its attention to" or "determined", but into the meaning of the words it employed. In the present circumstances, however, statute permits and perhaps mandates attention to what was in the responsible Minister's mind in 190 (1988) 12 NSWLR 453. 191 CTM v The Queen (2007) 171 A Crim R 371 at 396-397 [113] and 400-401 [129]- 192 Crimes Amendment (Sexual Offences) Act 2003, s 3, Sched 1 item [18]. 193 An offence of procurement has now been created by s 66EB introduced in 2007 by the Crimes Amendment (Sexual Procurement or Grooming of Children) Act 2007, s 3, Sched 1 item [1]. Section 66EB(7) creates a specific defence "if the accused reasonably believed that the other person was not a child": this points against reading the post-2003 version of s 66C as conforming to the Proudman v Dayman principle. 194 See [203]. relation to the 2003 amendments as reflected in his Second Reading Speech195. History teaches that recourse to extrinsic material of that kind tends to afford even less illumination than Mason J thought legislative history did. But in the present case the statements of the responsible Minister, the Attorney-General, do cast some illumination. Speaking of the reduction in the age of consent for males from 18 to 16, the age which had applied to females since 1910, he said196: "The bill rationalises the age of consent in New South Wales to 16 years of age for all persons irrespective of gender or sexual orientation. The lower age limit is absolute β no specific statutory defence is provided for." He also said at the end of his speech that the Bill "establishes an absolute uniform minimum age of consent of 16 years. There are no statutory exceptions."197 The "absoluteness" of a lower age limit suggests that not only are no specific 195 The Interpretation Act 1987 (NSW), s 34(1)(b), provides: In the interpretation of a provision of an Act ..., if any material not forming part of the Act ... is capable of assisting in the ascertainment of the meaning of the provision, consideration may be given to that material: to determine the meaning of the provision: if the provision is ambiguous or obscure ..." A difference of opinion as marked as that which exists between a unanimous Court of Criminal Appeal and six Justices in this Court suggests that the relevant provisions are "obscure". Section 34(2)(f) provides: "(2) Without limiting the effect of subsection (1), the material that may be considered in the interpretation of a provision of an Act ... includes: the speech made to a House of Parliament by a Minister ... on the occasion of the moving by that Minister ... of a motion that the Bill for the Act be read a second time in that House ..." 196 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 7 May 2003 at 374. 197 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 7 May 2003 at 377. statutory defences or statutory exceptions provided for, but that no common law principle of construction having a similar effect, like the Proudman v Dayman principle, applies either. He, and the executive of which he was the spokesman, did not mean or intend by his invitation to the legislature to enact amendments excluding any avenue of acquittal by way of "specific statutory defence" to enable it to take the radical and novel step of creating another and easier avenue to acquittal198. The Minister also said199: "The bill now before the House has several crucial differences from the private member's bills previously introduced, as it contains important additional safeguards to protect our young people from sexual exploitation. These further safeguards include the removal of the defence to carnal knowledge based on reasonable mistake of age". If repeal of s 77(2) was thought to be an "important" safeguard against the sexual exploitation of the young, it is unlikely that the Minister intended that the Proudman v Dayman principle, which creates an easier avenue for the accused to escape conviction by reason of claimed reasonable mistake of age, would operate. That is because if it did operate, it would not only nullify the assigned safeguard against sexual exploitation of the young, but also create a greater risk of that exploitation coming to pass. The Minister also said200: "The bill eliminates the defence currently available to consensual sexual activity with young people aged between 14 and 16 years, formerly known as carnal knowledge. The bill removes the express statutory defence presently provided in section 77(2)(c) ... that the person charged had reasonable cause to believe, and did in fact believe, that the child was of or above the age of 16 years. As a consequence, it will no longer be possible to argue that a uniform age of consent of 16 years creates an effective age of consent of 14 years." The last sentence indicates that the Minister's mind was concentrated not only on the repeal of the "express statutory defence" in s 77(2), but on the Proudman v 198 See [229] above. 199 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 7 May 2003 at 374. 200 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 7 May 2003 at 376. Dayman principle. That is because the effect of the Proudman v Dayman principle on s 66C(3), if it were not excluded by the legislation, would be to create an effective age of consent of 14 years in relation to the crime created by s 66C(3) in circumstances where the prosecution cannot negate, beyond reasonable doubt, an honest and reasonable belief on the part of the accused that the other participant was aged 16 or more. It is significant that at no point did the Attorney-General make reference to any avenue being left open, after the repeal of s 77(2), to an accused to escape conviction by reason of a reasonable mistake as to age. If the appellant's construction were correct, a revolution would have been effected by changing the long-established position, and replacing a narrow avenue to acquittal with a broader one201. Nothing in the legislative language suggests that this revolution took place. The remarks of the Attorney-General suggest that he and his colleagues were hostile to any such revolution, and intended that it should not take place. A "Draconian" result The appellant contended that the Court of Criminal Appeal's construction should be rejected because it was "Draconian". It would cause an accused person to be punished even though that accused person was not "morally blameworthy" by reason of an honest and reasonable belief that the person under 16 with whom sexual intercourse had taken place was 16 or over. It would mean that the accused could be convicted because the other participant had lied about his or her age. It is true that the consequences of a particular construction can be taken into account in assessing the likelihood of that construction being correct. But once the conclusion is reached that legislation bears a particular construction, even if a court thinks that legislation may be "uncommonly silly", "unwise, or even asinine"202, that consideration cannot prevail over the legislative language. Order For the reasons given, the order of the Court of Criminal Appeal dismissing the appellant's appeal was correct. The appeal to this Court should be dismissed. 201 See [229] above. 202 Cf, in another context, Griswold v Connecticut 381 US 479 at 527 (1965) per Stewart J; see also at 530-531, and see Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 305 and 310. |
HIGH COURT OF AUSTRALIA APPELLANTS AND CLIVE ROY BROTHERS RESPONDENT Park v Brothers [2005] HCA 73 6 December 2005 ORDER Appeal allowed with costs. Set aside the orders of the Court of Appeal of the Supreme Court of New South Wales dated 23 July 2004 and, in their place, order that the appeal to that Court be dismissed with costs. On appeal from the Supreme Court of New South Wales Representation: I M Barker QC with D H Murr SC for the appellants (instructed by Holman Webb) T E F Hughes QC with T D F Hughes for the respondent (instructed by Lumleys Solicitors) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Vendor and purchaser β Sale of land β Purchasers entitled to possession prior to completion on conditions including requirement of vendor's approval β Vendor wrongly purported to rescind contract β Vendor denied purchasers access to land β Purchasers sued for damages for breach of access provision β Whether necessary for purchasers to seek vendor's approval notwithstanding purported rescission β Whether vendor's conduct waived condition of approval. Contract β Construction of contract β Purchasers to have access to land prior to completion to farm in areas approved by vendor β Whether vendor required to act reasonably in granting or withholding approval. Contract β Construction of contract β Implied duty to co-operate β Limits of operation of implication. Practice and procedure β Appeal β Whether it is open to an appellate court to allow an appeal on a new ground that was not raised at trial and that, if raised, could have been the subject of evidence. GLEESON CJ, GUMMOW, HAYNE, CALLINAN AND HEYDON JJ. On 25 September 2000, the respondent agreed to sell, and the appellants agreed to buy, a rural property of a little less than 25,000 acres, located about 40 km west of Hay. The purchase price was $3,350,000. Although the contract provided for completion on 7 December 2000, disputes and litigation intervened. In the event, completion took place on 24 March 2001. The pre-settlement litigation involved proceedings brought by the appellants in the Equity Division of the Supreme Court of New South Wales, seeking a declaration that a purported rescission of the contract by the respondent was ineffective and, if necessary, an order for specific performance. On 27 February 2001, Young J held in favour of the appellants, but it was unnecessary to make a formal decree for specific performance1. Following completion of the contract, the proceedings remained on foot, to enable the appellants to pursue claims for damages. The proceedings next came before Campbell J, who dealt with various claims by the appellants for damages arising out of certain pre-contractual representations said to have been made in contravention of the Fair Trading Act 1987 (NSW) ("the Fair Trading Act"), and for damages for breach of contract. On 7 October 2003, Campbell J gave judgment in favour of the appellants, upholding most of their claims, and awarding damages in the total amount of $1,512,052 plus interest2. The respondent appealed to the New South Wales Court of Appeal (Giles JA, Ipp JA, Wood CJ at CL). The Court of Appeal upheld the appeal on one ground relating to part of the claim for damages for breach of contract, and reduced the amount of the judgment to $464,641 plus interest3. The present appeal is concerned only with the issue that gave rise to that reduction in damages. We are not concerned with the damages awarded for breaches of the Fair Trading Act, and we are concerned with part only (albeit the larger part) of the damages originally awarded for breach of contract. In order to explain that issue, it is necessary to say something more about the contract, and the litigious history. 1 Park v Brothers (2001) 10 BPR 18,649. 2 Park v Brothers [2003] NSWSC 865. 3 Brothers v Park (2004) 12 BPR 22,501. The contract in growing both rice and wheat. The property, known as "Jellalabad", was a mixed farming property, fronting the Murrumbidgee River. It was originally put on the market for sale by auction in August 2000. The advertising material made reference to extensive areas available for irrigation and for rice production. The first appellant is a farmer experienced In pre-contract conversations with the respondent and the respondent's agent, particular reference was made to the availability of water, and the potential for rice production. Developing land for rice production requires substantial expenditure on infrastructure. Part of the land had already been developed for that purpose. On one inspection of the property the first appellant told the respondent that he wanted to increase the area available for rice production. The respondent said: "There is plenty of land to do that β but there is no infrastructure β that is your job." The rice growing season is such that a crop must be planted by the end of October, or early November, and its growing cycle should be completed by late summer. The first appellant gave evidence that, at a pre-contract inspection, the agent explained that the contract would provide for the purchasers "to immediately take possession of the farm and look after it", because the respondent had been ill and was unable properly to farm the land himself. Rural properties in the area are sometimes sold in the spring, just before the time when rice crops are planted, and it is not uncommon for purchasers to be allowed immediate possession of the property to grow crops. The agent told the first appellant that there would be 1000 acres ploughed ready for a crop. The evidence showed that the parties to the contract contemplated that, after contract, and before completion, the purchasers would plant a rice crop in land that had already been developed for that purpose, for the 2000-2001 growing season. The contract was signed by the appellants on 12 September 2000, although formal exchange of contracts did not take place until 25 September 2000. The appellants went into possession on 12 September 2000 and immediately set about planting a rice crop for the 2000-2001 season. They spent about $225,000 on the necessary work. The contract provided for completion on 7 December 2000, and the terms of payment of the purchase price were $250,000 deposit, $250,000 on completion, and the balance of $2,850,000 secured by mortgage back to the vendor, payable as to $500,000 on 7 July 2001, as to $350,000 on 7 September 2002, and as to $2,000,000 on 7 September 2005. Special condition 22.4 of the contract is not directly relevant to the present appeal, but it was relevant to a dispute that arose between the parties. It required the purchasers, on or before 7 October 2000, to reimburse the vendor in respect of a sum of $150,000 which the vendor was to pay to a certain authority in connection with water supply. This was a topic that was important in the litigation before Young J. For present purposes, it suffices to say that there was conflicting evidence about whether the respondent agreed to postpone that payment until completion; a conflict which Young J found it unnecessary to resolve. Special condition 24 of the contract, which is central to this appeal, provided: "Early occupation by purchaser to do farming work β no reimbursement to purchaser. The purchaser may enter the property and occupy the Manager's Cottage as licensee only at any time after the date of this Contract and payment of the deposit without payment of any occupation fee to work up ground for crops such work to be at his expense and risk and in locations first approved by the vendor. The purchaser agrees in doing such work to adopt the highest farming standards used in the local district and the purchaser's entry shall also be governed by the provisions of special condition 25 hereof. The purchaser acknowledges that 14 days notice given to the vendor will be required prior to occupancy of the cottage, which is presently occupied." Special condition 25 is presently immaterial. The first appellant gave evidence that he attended the property every day between 12 and 21 September 2000. He engaged a contractor to fertilise the area which had been ploughed for rice growing. After that, the fields were progressively flooded, and banks were built up to retain water. In October, a rice crop was sown by contractors. No approval was either sought or obtained under special condition 24, but there was no objection by the respondent. What was done was within the joint contemplation of the parties. The question of prior approval of location was never raised, either at the time or later. Disputes arose between the parties about a number of matters, the most important of which was the payment of the amount of $150,000. Young J held that time for that payment was not of the essence and, further, that in any event, if a right of rescission had arisen, it had been waived by the respondent. However, on 12 December 2000 the respondent purported to rescind the contract, and ordered the appellants to leave the property, as they did. The appellants commenced the present proceedings, which were determined first by Young J on 27 February 2001. The contract was completed on 24 March 2001. The first appellant's evidence was that, in early March 2001, he inspected the rice crop he had previously sown, and engaged someone to look after it. He visited the property twice a week until he had full access from 24 March 2001. The proceedings before Campbell J The claims for damages for breaches of the Fair Trading Act based on alleged pre-contractual misrepresentations are not relevant to this appeal. Of indirect relevance is a claim for damages relating to the 2000-2001 rice crop. The claim that is presently in issue relates to losses in respect of the 2001- 2002 rice crop, but in considering that claim it is relevant to note the claim in respect of the earlier crop. There were no formal pleadings in the proceedings. They were commenced by Summons. Evidence was by way of affidavit, supplemented by some oral evidence. However, Points of Claim were filed, presumably pursuant to a direction, in July 2003, and Points of Defence (which amounted to nothing more than a general denial of each and every allegation including, for example, the allegation that a contract of sale had been entered into) were filed in August 2003. The Points of Claim, relevantly for present purposes, recited special condition 24 and then, under the heading "Repudiation of Contract by Defendant and Exclusion of Plaintiffs From 'Jellalabad'", asserted that, in December 2000, in breach of special condition 24, "the [respondent] wrongfully excluded the [appellants] from 'Jellalabad', so that they were unable to go onto the property to care for the rice crop." This was a reference to the 2000-2001 rice crop. Campbell J upheld this claim. He accepted evidence, including expert evidence, to the effect that the inability of the first appellant to care for the crop, because he had been wrongfully deprived of access to the land from December 2000 until March 2001, resulted in a substantially lower crop yield. He quantified damages at $104,641. That item is not the subject of this appeal. The next heading in the Points of Claim was: "Plaintiffs' Access Restored, Complete Contract But Suffer Damage". Under that heading, the following paragraphs appeared: "22. The [appellants] were allowed access to the rice crop [ie the 2000- 2001 crop] on or shortly after 27 February 2001, following publication of the reasons for judgment of Justice Young on 27 February 2001. 23. The contract for sale was settled on 24 March 2001. 24. As a result of their exclusion from 'Jellalabad' from 19 December 2000 to 27 February 2001, the [appellants] have suffered loss [or] damage. Particulars Loss of profit from reduced yield to the 2000-01 rice crop that they planted; and Loss of profit from further disruption of cropping programme in 2001-02. Further particulars are contained in the affidavits of the first [appellant] and in the experts' reports served by the [appellants]." It is the claim referred to in particular 2 that is directly in issue in this appeal. The affidavit evidence referred to in the particulars was to the following effect. The first appellant said that it was his intention to plant a further 860 ha of rice in the growing season 2001-2002. Of this, some 600 ha was to be planted in an area known as the South Coonoon Paddock and some 246 ha was to be planted in an area known as the Dam Paddock. (The figures of 846 ha and 860 ha appear to have been used interchangeably. The difference is presently immaterial.) The first appellant said: "Had the contract settled in December 2000, I would have had possession of Jellalabad from settlement and would have been able to carry out the necessary steps to landform that area and plant rice in September/October 2001." He then set out the steps in detail. They included providing necessary infrastructure to the area mentioned. He said: "Because the contract was not settled until 24 March 2001, it was not possible to carry out these works so as to have the area available to plant a rice crop in September/October 2001." He went on to give reasons for that, which amounted, in effect, to the proposition that, in order to have a realistic prospect of preparing the South Coonoon Paddock and the Dam Paddock for the 2001-2002 crop, he needed access before March 2001; access which had been denied to him. The evidence of the first appellant was supported by a report of an expert, Mr Sharman, who said that "problems that arose with the purchase agreement resulted in the [appellants] being denied access to [Jellalabad]". He said that the "severe interruption to development, management and cropping plans resulted in substantial financial loss". That loss included losses resulting from the inability to develop the 860 ha in time to sow the proposed 2001-2002 crop. His report explained in detail why that loss was caused by inability to gain access to the property over the period of exclusion between December 2000 and March 2001, and estimated the amount of the loss. It may be observed, both in connection with the main issue argued in this Court, and with a Notice of Contention which the respondent seeks leave to file, that the claim for damages in respect of the 2001-2002 rice crop, as elaborated in the evidence incorporated by reference in the particulars, was put on the basis (accepted by Campbell J) that access to the property between December 2000 and March 2001 was critical to the first appellant's plans (known to the respondent at the time of contract) to increase the acreage that was available for cultivation. The first appellant had assumed he would have such access because he expected the contract to be completed on or about 7 December 2000. Nobody raised, either in the course of evidence, or in argument, any question about whether, if for some reason other than the purported rescission, the contract had remained on foot but uncompleted between December 2000 and March 2001, there would have been any difficulty about gaining approval for access to the 860 ha, and whether, in such a situation, the appellants would have wanted to develop the 860 ha in exercise of their rights under special condition 24. The topic of the need for prior approval under special condition 24 was never mentioned at the trial before Campbell J, just as it had never been the subject of any express communication between the parties before the 2000-2001 crop was sown. A possible explanation for this might be that (apart from his contention that the contract had been rescinded) there was no reason why the respondent would have declined approval for the development of the 860 ha, if the contract had remained on foot but uncompleted. There may have been nothing about the proposed development work, or the proposed locations, to which the respondent could have taken, or would have wanted to take, exception. Campbell J assessed damages under this head at $963,852. The details of that assessment are not presently material. His reasons for finding for the appellants reflect the way in which the case was conducted. He said: "2001/2002 Rice Crop At the time of entering the contract [the first appellant] had formed plans for what would be done with the property, so far as cropping was concerned, after the 2000/2001 rice growing season. He intended to plant 860 hectares of rice in the 2001/2002 rice growing season. Of this, he planned that about 600 hectares was to be in the South Coonoon Paddock, and the remainder in the Dam paddock. The whole of the rice crop to be planted in 2001/2002 was to be planted on newly developed irrigation land. To be able to plant rice on that newly developed land, he would have needed first to obtain Departmental approval to plant the rice to the area in question. He would then have needed to engage a surveyor to survey the area, and mark out blocks and bays, and then to landform the area. It would also be necessary to install two river pumps to pump water from the Murrumbidgee River to the area in the South Coonoon paddock. There was already a water channel available to the area in the Dam Paddock. It would also be necessary to install irrigation stops, and various pipes, in both areas. Only after this preparatory work was done could he commence preparation of the seedbed. To fit in with the growing season for rice, the preparatory work would have to have been finished by, at the latest, September 2001. While the [respondent] was not aware of all the details concerning [the first appellant's] plans for cropping on the property, he was aware before the contract was entered, that [the first appellant] intended to make a significant increase in the area of irrigated land under cultivation, and that effecting that increase in area of irrigated land under cultivation would require the provision of significant infrastructure. [The appellants], as well as carrying on farming activities, also have a landforming business, which owns sufficient machinery and employs sufficient staff and was available, around the time the [appellants] were excluded from the property, to have landformed the area intended to have been planted to rice. The landforming of that area would have taken approximately four or five months. Landforming is a process which is weather dependent. [The first appellant] gives evidence, which I accept, that it is not possible to reliably plan to carry out landforming in the Hay area after about June, because winter rains usually arrive in that month, and landforming is not possible when the earth reaches a certain stage of dampness. When the earth is too wet, it is impossible to work because it sticks to the laser operated machine buckets. In winter, an inch of rain can make ground unsuitable for landforming for some weeks. As it happened, the rain which Jellalabad received in June and July 2001, would have prevented landforming in those months. This is confirmed by Mr Sharman, who gives evidence that: 'Land development operation is best conducted in the summer and early autumn, when soil conditions are generally dry and free flowing. To have attempted to perform this operation during late autumn or winter would have been a high-risk operation because of the incidence of winter rainfall in the [Hay district].' Thus, the exclusion of the [appellants] from the property had the effect that they lost the window of opportunity to enable landforming to be carried out, to enable 860 hectares of rice to be planted in the 2001/2002 season. No other obstacle to the planting of the 860 hectares has been shown to exist." (emphasis added) The Court of Appeal The respondent appealed against various aspects of the decision of Campbell J, on a number of grounds that were ultimately withdrawn, or that failed. When the matter came on for hearing in the Court of Appeal the respondent sought leave to amend his Notice of Appeal by adding the following ground: If the [first appellant] was excluded from the property on 19 December 2000: The right of the [appellants] to enter upon the property was limited to a right of entry to work up ground for crops in locations first approved by the [respondent]. (iii) β¦ [T]here was no evidence that the [respondent] had approved the locations which the [appellants] claimed they had intended to work up and in relation to which [they] claimed to have suffered loss." The application to amend was opposed on the basis that the new ground sought to raise a point that had not been argued at trial and that, if raised, could have been the subject of evidence. The amendment was allowed, and subsequently became the basis of the decision of the Court of Appeal on the issue with which we are presently concerned. Giles JA, with whom Ipp JA and Wood CJ at CL agreed, noted that Campbell J's implicit finding that, if the contract had proceeded to completion in the ordinary course, development of the 860 ha would have commenced prior to 24 March 2001 was not challenged in the appeal. Giles JA said: "His Honour's reasoning was that inability to commence landforming prior to 24 March 2001 meant that the [appellants] reasonably decided not to commence that work, because they could not be sure of completing it by the end of June 2001; but that if they had been allowed access to the property from 19 December 2000 they would have commenced the work and, together with the prior step of survey and the other steps of obtaining Departmental approval, installing pumps and providing irrigation works, would have planted a 2001/2002 rice crop on the newly developed irrigation land ... The [respondent] did not challenge this reasoning, or any other factual findings underpinning it." Giles JA then turned to the new point, which was that it had not been established that the 2001-2002 crop losses were caused by breach of special condition 24, because in the absence of prior approval there was no entitlement to access to the 860 ha prior to 24 March 2001. Without expressing a preference for one view or the other, he said there were two possible views of the vendor's position under special condition 24: either the vendor's capacity to grant or refuse approval to development at a particular location was unfettered or, alternatively, by implication approval could not be withheld unreasonably. Either way, he said, the appellants failed: "The [appellants] could have proposed the locations of the 860 hectares for approval, but that did not mean that the locations would have been approved. Let it be assumed that, but for the [respondent's] purported rescission and denial of entitlement to enter upon the property, they would have proposed the locations, but did not do so because of the [respondent's] stance β [the first appellant] gave no such evidence, but it is a readily available inference ... But the [respondent] may or may not have given approval ... If the [respondent] had an unfettered ability to approve or disapprove, on the facts he would have declined approval, as the [appellants] accepted, and the [appellants] would not have an action for breach of contract. If there was an implication that the [respondent] could not unreasonably withhold approval, the [appellants'] cause of action would be for unreasonably withholding approval, not for simple exclusion: the [appellants] did not present such a case, and it is not self-evident. On the case they presented, it remains that they did not establish an entitlement to access permitting them to do the work for the 2001/2002 rice crop." What is difficult to discern from the reasoning of Giles JA is the hypothesis upon which he was considering the question of the respondent's attitude to a request for approval to develop the 860 ha. In the events that occurred, no question of approval arose. From mid-December 2000, the appellants were excluded from the property altogether by reason of the respondent's purported rescission of the contract and his related refusal to permit them to continue to remain on the land. The appellants were not permitted to care for the 2000-2001 crop, which had been planted with the knowledge and at least tacit approval of the respondent. The respondent had excluded the appellants altogether, and was refusing to complete the contract. Both the exclusion and the refusal to complete were on the basis that the contract had been rescinded. If the hypothesis was no exclusion, but some delay in completion resulting from circumstances not involving breach by either party, then it may have been necessary to call evidence bearing on the question of the likelihood of approval. It could well have been possible to demonstrate that there was no reason why the respondent should not give the necessary approval, and every reason why he should. Giles JA dealt separately with the question whether the present respondent should be permitted to rely on this new point, having regard to the conduct of the trial. He said: "The [appellants] had framed their case as one of breach of the contractual entitlement conferred by special condition 24. Faced with the broad denial in the points of defence, they had full opportunity to put all necessary evidence before the Court. It is clear enough that they could not provide evidence of approval of the locations. I do not think the point is correctly described as a new ground not taken at the trial, or that it is correct to say that the [respondent] is departing from the course that he adopted at the trial. On the ultimate question of whether it is 'expedient and in the interests of justice to entertain the point' ... in my opinion the balance of expediency and justice favours doing so." Giles JA said the circumstances of the case were essentially the same as those in Banque Commerciale SA, en Liquidation v Akhil Holdings Ltd4. In that case the defendant bank pleaded that the proceedings were statute-barred. The (1990) 169 CLR 279. defendant bank did not appear at the hearing. Judgment was given for the defendants at trial, and the plaintiff successfully appealed to the Court of Appeal. The defendant bank then appealed to this Court. On appeal, it was allowed to rely on its plea of the statute of limitations. It was pointed out in this Court that the case was not one that turned on the way a trial was conducted and arguments were presented5. The issues for determination were clearly defined in the pleadings, and they included the limitation point. Here, however, the Points of Defence did not define any issues, and one of the complaints about the new argument was that, if it had been raised at trial, it could have been the subject of further evidence. The reasoning of Giles JA implies, without expressly stating, that, even if an issue about approval had been distinctly raised at trial, it could not have been the subject of any relevant additional evidence. That is disputed. The Notice of Contention In this Court, the respondent seeks further to expand the issues by raising, by way of Notice of Contention, an argument that was not taken either at trial or in the Court of Appeal. The argument is "that on the evidence, the intention of the [a]ppellants to work up [860] hectares for, and to plant, a 2001-2002 rice crop thereon, was conditional upon the completion of the contract of sale dated 25 September 2000 and not upon any application for approval under special condition 24 of the contract." Campbell J found that the appellants would have developed the 860 ha for a 2001-2002 rice crop, and Giles JA recorded that there was no challenge in the Court of Appeal to that finding. Yet, as counsel for the respondent pointed out in this Court, the only direct evidence as to the intention of the appellants reflected their assumption that the contract would have been completed some time in December 2000, and that, in January and February 2001, they would have had access to the land, not in the exercise of their limited rights under special condition 24, but in the exercise of their absolute rights as owners. It is not self-evident that if, for some reason other than the respondent's purported rescission and the consequent litigation, the contract had remained uncompleted in January and February 2001, the appellants would have sought access to the 860 ha under special condition 24, and spent money on infrastructure and other development pursuant to their rights as purchasers, in the expectation that ultimately they would obtain the benefit in the form of the 2001- (1990) 169 CLR 279 at 304 per Toohey J. 2002 rice crop. The argument before Campbell J proceeded upon the assumption, reflected in his reasons, and in the reasons of Giles JA in the Court of Appeal, that if the appellants had the necessary rights of access to the 860 ha, either as owners or at least as purchasers pursuant to special condition 24, they would have exercised those rights for the purpose of preparing for the 2001-2002 rice crop. Giles JA, in a passage quoted above, said that it was a readily available inference that the appellants would have proposed the locations. That may be correct but, because the assumption was not challenged, no evidence was directed to the question. This is a matter that could have been addressed by evidence, had it been raised. Indeed, the respondent's proposed Notice of Contention, in expressing the argument, begins with a reference to such evidence as there was at the trial. The argument is that a certain inference of fact as to the intentions of the appellants (contrary to what Giles JA said) should be drawn. If the argument had been raised at trial, there may well have been relevant evidence that could have been given, either directly as to the intentions of the first appellant, or as to the commercial circumstances surrounding the transaction, that may have answered the inference for which the respondent, now, for the first time, wishes to contend. This was not a case in which there were formal pleadings. Nevertheless, the issues at trial were formulated by Points of Claim and particulars, understood in the light of affidavit evidence to which they referred, and by the conduct of the proceedings on behalf of the parties by their legal representatives. As was pointed out in Whisprun Pty Ltd v Dixon6, even when there are pleadings, to determine whether a party is raising a new point on appeal the actual conduct of the proceedings must be considered. In adversarial litigation, as a general rule, a party is bound by the conduct of his case. There are circumstances in which the interests of justice may lead an appellate court to permit a party to raise a point that was not taken at trial, but where the point is one that could have been met by calling evidence below then it cannot be raised for the first time on appeal7. (2003) 77 ALJR 1598 at 1608 [52]; 200 ALR 447 at 461. 7 Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 at 438; Water Board v Moustakas (1988) 180 CLR 491 at 497; Whisprun Pty Ltd v Dixon (2003) 77 ALJR 1598 at 1608 [51]-[52]; 200 ALR 447 at 461. Leave to file the Notice of Contention should be refused. The issue it seeks to raise is purely an issue of fact, and if it had been raised at the trial it could have been dealt with by evidence. Special condition 24 The decision of Young J, on 27 February 2001, that the contract remained on foot at that date was not challenged in any later part of the proceedings. It is now common ground. As has been noted, the contract was completed on 24 March 2001. It follows that, over the critical period of January and February 2001, the rights of the parties concerning access to the subject land, and the opportunity to develop, or to begin to develop, the 860 ha necessary for the proposed 2001-2002 rice crop, were governed by special condition 24. Over that period, the respondent denied the appellants access to any part of Jellalabad, asserting that the contract had been rescinded and was of no continuing force and effect. That assertion was wrong. The appellants pursued, and Campbell J upheld, their claim for damages on the basis that they were wrongfully denied access to the land. The Court of Appeal rejected the relevant part of that claim on the ground that the appellants never sought, or obtained, the respondent's approval of the particular sites which they proposed to develop for the 2001-2002 rice crop. it unnecessary to decide whether, under special condition 24, the respondent had an unfettered right to refuse to approve a particular location, or whether such right was qualified by a requirement that it must not be withheld unreasonably. Apart from that question of law, there is also a question of fact, which is part of the appellants' complaint about the decision to permit the point to be taken in the Court of Appeal. But for the dispute between the parties about whether the contract had been rescinded, what interest would the respondent have had in refusing approval to development of the 860 ha? So far as appears from the evidence, such development would have improved the value of the subject land, and caused no harm or inconvenience to the respondent. That may also help to explain why the question was never raised at trial. If, for some reason other than the legal dispute about purported rescission, the contract had remained uncompleted in January and February 2001, and (as Giles JA said was a readily available inference) the appellants had sought approval of the 860 ha as locations for development, what interest of the respondent would have been served by refusing approval? None is suggested by the evidence; but if the question had been raised at trial the evidence may well have thrown more light on the matter. The Court of Appeal evidently regarded this question as irrelevant. The fact that no approval was sought, or obtained, was treated as a conclusive answer to the appellants' claim. The nature of the respondent's capacity to withhold approval of particular locations as sites for "work[ing] up ground for crops" pending completion depends upon the true construction of special condition 24. In Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd8, after referring to the general principle of construction according to which parties are taken to agree to do all that is reasonably necessary to secure performance of their contract9, "It is easy to imply a duty to co-operate in the doing of acts which are necessary to the performance by the parties or by one of the parties of fundamental obligations under the contract. It is not quite so easy to make the implication when the acts in question are necessary to entitle the other contracting party to a benefit under the contract but are not essential to the performance of that party's obligations and are not fundamental to the contract. Then the question arises whether the contract imposes a duty to co-operate on the first party or whether it leaves him at liberty to decide for himself whether the acts shall be done, even if the consequence of his decision is to disentitle the other party to a benefit. In such a case, the correct interpretation of the contract depends, as it seems to me, not so much on the application of the general rule of construction as on the intention of the parties as manifested by the contract itself." that whoever bought Special condition 24 must be construed in the light of the circumstances surrounding the contract, and the purpose the condition was intended to serve. The background to special condition 24 was that, the respondent being ill and unable to work the property himself, it was in the mutual contemplation of the into possession parties immediately, and farm the land. The time of year at which the sale took place reinforced the importance of that aspect of the bargain. No doubt the appellants' right of access to the land to grow crops was a factor in the agreed price. At the same time, there could be a number of reasons why the contract might not proceed to completion, and it was reasonable to protect the interests of the respondent by reserving to him the power to approve, or withhold approval of, the locations at which such activity was to occur. Infrastructure, especially the property would enter (1979) 144 CLR 596 at 607-608. 9 Mackay v Dick (1881) 6 App Cas 251 at 263; Butt v M'Donald (1896) 7 QLJ 68 at uncompleted infrastructure, would not necessarily increase the value of the land. It was foreseeable that the respondent could suffer adverse consequences from development activity undertaken prior to completion by the appellants. At the same time, the respondent had told the appellants that there was "plenty of land" available for development for rice growing and, provided the respondent's interests were adequately protected, it is unlikely to have been the intention of the parties that he could obstruct development unreasonably. The respondent was to approve the locations of any development, having regard to what the proposed development involved. The provision should be understood as meaning that the respondent, in granting or withholding approval, was required to act reasonably, having regard to the legitimate interests of the respondent which the requirement of approval was there to protect. If the question of approval had been raised as an issue at the trial, it would have been possible to explore those interests, and to investigate whether there was any possibility that they could have been affected adversely by development of the 860 ha. The appellants' response to the respondent's purported rescission of the contract, and their exclusion from the land, was to affirm the contract by instituting proceedings for specific performance. In those proceedings for specific performance, the appellants, in their evidence, complained about their exclusion from the land. Indeed, the damaging effect on the 2000-2001 rice crop was put forward, and accepted, as a reason why the litigation should be heard and determined urgently. In an affidavit, the first appellant said that it was imperative for him to be restored to immediate possession of the property. Young J decided to deal urgently with the question whether the purported rescission was effective. When that question was decided in favour of the appellants, they were allowed back into possession, and the contract was completed, all within the space of two or three weeks. Involved in the appellants' claim for specific performance was a claim for access to the land under special condition 24. During January and February 2001, the respondent was denying that the contract remained on foot, and excluding the appellants from access to any part of the land. So long as the contract remained on foot and uncompleted, the right of the appellants to "work up ground for crops" was conditional upon the respondent first having approved the locations in which the appellants intended to do that. For present purposes, those are the locations of the 860 ha. In the Court of Appeal, when the respondent, over the objection of the appellants, was permitted to raise for the first time the argument that the condition had not been fulfilled, one response of the appellants was to invoke a principle considered by this Court in Peter Turnbull & Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd10 and Foran v Wight11. In the latter case, the principle was stated by Mason CJ in the following terms12: "A failure by the innocent party to treat an anticipatory breach of an essential term as a repudiation and to terminate the contract has the effect of leaving the contract on foot, in which event it remains in force for the benefit of both parties, just as it would if the anticipatory breach had never occurred, subject to a qualification to which I shall refer in a moment. The parties then remain bound by the contract and the repudiating party may rely on any supervening circumstance which justifies his non-performance of the contract when the time for performance arrives ... The qualification is that, if the repudiating party by his refusal to perform or other conduct intimates to the innocent party that he need not perform an obligation which is a condition precedent to the performance by the repudiating party of his obligation, and does not retract that intimation in time to give the innocent party an opportunity to perform his obligation, that party may be excused from actual performance of the condition precedent. The repudiating party then waives complete performance of the condition precedent and his conditional promise becomes unconditional." In the earlier case, Dixon CJ referred to repudiatory conduct which expressly or implicitly intimates to the innocent party that it is useless to perform a condition, in consequence of which that party is dispensed from performing the condition. This, he said, was "just as effectual as actual prevention."13 Kitto J said14: "The principle, which applies whenever the promise of one party, A, is subject to a condition to be fulfilled by the other party, B, may, I think, be stated as follows. If, although B is ready and willing to perform the 10 (1954) 90 CLR 235. 11 (1989) 168 CLR 385. 12 (1989) 168 CLR 385 at 395-396. 13 (1954) 90 CLR 235 at 246-247. 14 (1954) 90 CLR 235 at 250. contract in all respects on his part, A absolutely refuses to carry out the contract, and persists in the refusal until a time arrives at which performance of his promise would have been due if the condition had been fulfilled by B, A is liable to B in damages for breach of his promise although the condition remains unfulfilled." The application of that principle to a given case may be affected by the nature of the promise, and the nature of the condition. If the conduct of the party in breach of contract prevents the performance by the other party of the condition, then it has been said to be "evident from common sense" that it is "equal to performance" of the condition15. The result has been explained sometimes in terms of waiver16, and sometimes in terms of estoppel17. Lord Mansfield said that "reason" dictated that if one party stops the other offering performance by showing an intention not to perform "it is not necessary for the first to go farther, and do a nugatory act."18 In the circumstances of the present case, however, the position is more complex. The principle justifies a conclusion that the failure of the appellants to seek approval of the locations of the 860 ha did not itself deprive them of their rights under special condition 24. In the light of the respondent's stance that the contract had been rescinded, to seek approval would have been futile. That, however, deals with only one aspect of the condition to which the right of the appellants was subject. The right of the appellants to have access to the 860 ha was conditional, not upon the performance by the appellants of a unilateral act, but upon an act of the respondent (approval of location) in response to an act of the appellants (application for approval). The condition to which the right of access was subject was not simply the making of a request by the appellants; it was the approval of that request by the respondent. It is true that the conduct of the respondent in excluding the appellants altogether from the subject land made it plain that it would be useless for the appellants to seek approval of access to the 860 ha. It does not follow, however, that the respondent, by his conduct, was intimating to the appellants that he was abandoning such control over the 15 Hotham v The East India Co (1787) 1 TR 638 at 645 [99 ER 1295 at 1299]. 16 Foran v Wight (1989) 168 CLR 385 at 396 per Mason CJ. 17 Foran v Wight (1989) 168 CLR 385 at 422 per Brennan J, 434 per Deane J. 18 Jones v Barkley (1781) 2 Dougl 684 at 694 [99 ER 434 at 440], cited by Mason CJ in Foran v Wight (1989) 168 CLR 385 at 397. locations on which further development occurred on his property as was given to him by special condition 24. Neither reason, nor common sense, nor equity, dictates that he, by his conduct, was abandoning his capacity to grant or withhold approval of the locations on which development work was proposed, if that were a matter about which there was, or could have been, a serious question. That consideration underlines the forensic significance of the fact that no question of approval or want of approval of location was raised at the trial. So far as appeared from the evidence before Campbell J, there was nothing about the locations in question that could have given the respondent any reason to withhold, or to want to withhold, approval of them as sites for development of the kind contemplated by the appellants. In the proceedings before Campbell J, the respondent did not seek to raise for consideration the possibility that, acting reasonably, he may have refused such approval. No doubt, as the Court of Appeal said, if, in January or February 2001, the appellants had sought approval in respect of the 860 ha, such approval would have been declined. That, however, would have been because the respondent had purported to rescind the contract. There is nothing to suggest that it would have been for any reason related to the locations of the proposed development, or the nature of the proposed development, or any legitimate interest of the respondent contemplated by special condition 24. The respondent, wrongfully, denied the appellants access to any part of the land, including the land on which the 2000-2001 rice crop was growing. The appellants' right to take advantage of access to the land to develop the 860 ha was conditional upon the respondent's approval of the contemplated locations, but such approval could not be withheld unreasonably. In the events that happened, the respondent's total denial of access to the land meant that no question of approving the particular locations could arise. In considering the amount of the damages that flowed from the wrongful total exclusion, it is relevant to note that the appellants' right to "work up" the 860 ha was not unqualified, but was qualified by the respondent's capacity to withhold approval. The appropriate claim was not, as Giles JA suggested, a claim for damages for wrongful refusal to grant approval. It was a claim for damages for the breach of special condition 24 involved in the total refusal of access. The question was one of quantifying the damages. That could have involved assessing the possibility, if any, that approval of the locations in question could properly have been withheld. If any argument about want of approval had been raised before Campbell J, then it would have been necessary to explore, in evidence, the question whether there was any ground upon which the respondent would, or might reasonably, have withheld approval. Instead the case proceeded as though approval, or absence of approval, of the locations in question was not an issue. The new point should not have been permitted to be raised as an issue in the Court of Appeal because it was, by then, too late to deal with it fairly. Finally, it may be noted that the conclusions reached at trial, and in the appeal to this Court, about the operation of special condition 24 are consistent with a much simpler analysis of the appellants' rights, in the events that happened, that they appear not to have advanced in their Points of Claim, or in argument at trial. That was that the respondent's breach of contract, in failing to complete on the agreed date19, closed the window of opportunity the appellants had to develop the 860 ha, and plant the 2001-2002 rice crop. The failure to complete on time thus caused the appellants the damage which the Court of Appeal held should not be allowed. It is, however, not necessary to consider further this way of analysing the matter. Conclusion The appeal should be allowed with costs. The orders of the Court of Appeal should be set aside and, in their place, it should be ordered that the appeal to that Court be dismissed with costs. 19 Louinder v Leis (1982) 149 CLR 509 at 525-526 per Mason J. |
HIGH COURT OF AUSTRALIA AUSTRALIAN FINANCE DIRECT LIMITED APPELLANT AND DIRECTOR OF CONSUMER AFFAIRS VICTORIA RESPONDENT Australian Finance Direct Limited v Director of Consumer Affairs Victoria [2007] HCA 57 12 December 2007 ORDER Appeal dismissed with costs. On appeal from the Supreme Court of Victoria Representation A C Archibald QC with P W Lithgow for the appellant (instructed by Dibbs D J O'Callaghan SC with J A Redwood for the respondent (instructed by Director of Consumer Affairs Victoria) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Australian Finance Direct Limited v Director of Consumer Affairs Victoria Consumer credit β Precontractual disclosure β Contracts regulated by the Consumer Credit (Victoria) Code ("the Code") β Loans to consumers for payment of seminar fees β "Holdback" arrangement between the credit provider and seminar suppliers by which the credit provider retained for itself a portion of the moneys advanced β Whether, for the purposes of s 15(B)(a)(ii) of the Code, the holdbacks were part of "the amount of credit" and "amounts payable", and whether the credit provider was one of the "persons, bodies or agents (including the credit provider)" to whom the amount of credit was to be paid β Relevance of the legislative purpose of providing information to debtors β Relevance of "truth in lending" considerations. Statutes β Interpretation β Purposive interpretation β Ascertaining legislative purpose. Words and phrases β "amount of credit", "holdback", "precontractual disclosure", "truth in lending". Consumer Credit (Victoria) Code (Vic), s 15. GLEESON CJ, GUMMOW, HAYNE AND CRENNAN JJ. The appellant, Australian Finance Direct Limited ("AFD"), is a credit provider within the meaning of the Consumer Credit (Victoria) Code (Vic) ("the Code"). Following proceedings in the Victorian Civil and Administrative Tribunal1, and an appeal to a single judge (Kaye J) of the Supreme Court of Victoria2, there was a further appeal to the Court of Appeal of the Supreme Court of Victoria. The Court of Appeal, by majority (Ashley and Neave JJA, Maxwell P dissenting), held that a form of credit contract used by AFD in certain transactions contravened the disclosure requirements in s 15(B) of the Code3. In an appeal, by special leave, to this Court, AFD challenges that conclusion. The disclosure requirements Section 5 of the Consumer Credit (Victoria) Act 1995 (Vic) provides that the Consumer Credit Code, set out in the Appendix to the Consumer Credit (Queensland) Act 1994 (Q) as in force for the time being, applies as a law of the State of Victoria, and, as so applying, may be referred to as the Consumer Credit (Victoria) Code. Neave JA described the Code as the culmination of more than 30 years of attempts to reform and modernise consumer credit laws and to apply a uniform approach to credit transactions across Australia. It applies to the provision of credit for "personal, domestic or household purposes"4. Section 12 of the Code provides that a credit contract must be in the form of a written document signed by the debtor and the credit provider or a written contract document signed by the credit provider and accepted according to its terms by the debtor. Section 14 deals with "precontractual disclosure". A credit provider must not enter into a credit contract unless the credit provider has given the debtor a precontractual statement setting out the matters required by s 15 to be included in the contract document and an information statement in a certain form (s 14(1)). The precontractual statement may be the proposed contract document or a separate document or documents (s 14(5)). 1 Director of Consumer Affairs Victoria v Australian Finance Direct Ltd (2004) ASC 2 Australian Finance Direct Ltd v Director of Consumer Affairs Victoria (2005) ASC 3 Australian Finance Direct Ltd v Director of Consumer Affairs Victoria [2006] VSCA 245. 4 The Code, s 6(1)(b). Crennan Section 15 provides: "Matters that must be in contract document The contract document must contain the following matters β (A) Credit provider's name. The credit provider's name. (B) Amount of credit. the amount of credit ascertainable β to be provided that amount; and the persons, bodies or agents (including the credit provider) to whom it is to be paid and the amounts payable to each of them, but only if both the person, body or agent and the amount are ascertainable. If the amount of the credit to be provided is not ascertainable, the maximum amount of credit agreed to be provided, or the credit limit under the contract, if any. If the credit is provided by the supplier for a sale of land or goods by instalments, a description of the land and its price or of the goods and their cash price. (C) Annual percentage rate or rates. The annual percentage rate or rates under the contract. If there is more th[a]n one rate, how each rate applies. If an annual percentage rate under the contract is determined by referring to a reference rate β the name of the rate or a description of it; and Crennan the margin or margins (if any) above or below the reference rate to be applied to determine the annual percentage rate or rates; and (iii) where and when the reference rate is published or, if it is not published, how the debtor may ascertain the rate; and the current annual percentage rate or rates. (D) Calculation of interest charges. The method of calculation of the interest charges payable under the contract and the frequency with which interest charges are to be debited under the contract. (E) Total amount of interest charges payable. The total amount of interest charges payable under the contract, if ascertainable (but only if the contract would, on the assumptions under sections 158 and 160, be paid out within 7 years of the date on which credit is first provided under the contract). (F) Repayments. If more than one repayment is to be made β (iia) the amount of the repayments or the method of calculating the amount; and if ascertainable, the number of the repayments; and if ascertainable, the total amount of the repayments, but only if the contract would, on the assumptions under sections 158 and 160, be paid out within 7 years of the date on which credit is first provided under the contract; and (iii) when the first repayment is to be paid, if ascertainable, and the frequency of payment of repayments. Crennan If the contract provides for a minimum repayment, the amount of that repayment, if ascertainable, but, if not, the method of calculation of the minimum repayment. Paragraph (a) does not apply to minimum repayments under a continuing credit contract. (G) Credit fees and charges. (a) A statement of the credit fees and charges that are, or may become, payable under the contract, and when each such fee or charge is payable, if ascertainable. The amount of any such ascertainable, but, if not, the method of calculation of the fee or charge, if ascertainable. fee or charge The total amount of credit fees and charges payable under the contract to the extent that it is ascertainable. (H) Changes affecting interest and credit fees and charges. If the annual percentage rate or rates or the amount or frequency of payment of a credit fee or charge or instalment payable under the contract may be changed, or a new credit fee or charge may be imposed, a statement or statements to that effect and of the means by which the debtor will be informed of the change or the new fee or charge. Statements of account. The frequency with which statements of account are to be provided to the debtor (except in the case of a credit contract for which the annual percentage rate is fixed for the whole term of the contract and under which there is no provision for varying the rate). Default rate. If the contract is a contract under which a default rate of interest may be charged when payments are in default β a statement to that effect and the default rate and how it is to be applied. Crennan If the default rate under the contract is determined by referring to a reference rate β the name of the rate or a description of it; and the margin or margins (if any) above or below the reference rate to be applied to determine the default rate; and (iii) when and where the reference rate is published or, if it is not published, how the debtor may ascertain the rate; and the current default rate. (K) Enforcement expenses. A statement that enforcement expenses may become payable under the credit contract or mortgage (if any) in the event of a breach. (L) Mortgage or guarantee. If any mortgage or guarantee is to be or has been taken by the credit provider, a statement to that effect. In the case of a mortgage, a description of the property subject to, or proposed to be subject to, the mortgage, to the extent to which it is ascertainable. (M) Commission. If a commission is to be paid by or to the credit provider for the introduction of credit business or business financed by the contract β a statement of that fact; and the person by whom the commission is payable; and the person to whom the commission is payable; and the amount if ascertainable. Crennan Commission does not include fees payable by a supplier under a merchant service agreement with a credit provider, an amount payable in connection with a credit-related insurance contract or commission paid to employees of the credit provider. Insurance financed by contract. If the credit provider knows that the debtor is to enter into a credit-related insurance contract and that the insurance is to be financed under the credit contract β the name of the insurer; and the amount payable to the insurer or, if it is not ascertainable, how it is calculated; and the kind of insurance and any other particulars that may be prescribed by the regulations; and if the credit provider knows of any commission to be paid by the insurer for the introduction of the insurance business β a statement that it is to be paid and, if ascertainable, the amount of the commission expressed either as a monetary amount or as a proportion of the premium. In the case of consumer credit insurance that includes a contract of general insurance within the meaning of the Insurance Contracts Act 1984 (Cwlth) β it is sufficient compliance with paragraphs (a) and (b) if the contract document contains the name of the general insurer and the total amount payable to the insurers (or, if it is not ascertainable, how it is calculated); and it is sufficient compliance with paragraph (d) relating to the amount of commission if the contract document contains the total amount of commission (expressed as a monetary amount or as a proportion of the premium) to be paid by the insurers. Crennan (O) Other information. Any information or warning required by the regulations." It is s 15(B)(a)(ii) that is of present concern. An object of s 15(B)(a) is to ensure that, in a case where the provision of credit takes the form of payment by the credit provider to a supplier of goods or services to the debtor (as commonly occurs), the debtor is fully and accurately informed of the amount of the deferred debt incurred by the debtor, the details of the person or persons to whom the credit provider is to pay the advance, and the amounts payable to each such person. There was some disagreement between the parties as to the reason for that requirement, but for present purposes it is sufficient to note that, where the credit takes the form of a deferred debt incurred in consequence of a payment by the credit provider for goods or services supplied by a third party or third parties to the debtor, the contract document must state the persons to whom the amount of credit is to be paid and the amounts payable to each of them. The question to be decided is whether, in the circumstances outlined below, there was a failure to comply with that requirement. The credit contract The transactions in question concerned loans to people who wished to attend seminars but who did not wish (or were unable) to pay the fees for the seminars in cash. The purpose of the credit was to enable them to defer payment. The seminars were provided by National Investment Institute Pty Ltd ("NII") and two companies related to NII, Capital Holdings Group (NSW) Pty Ltd and Capital Holdings Group (Vic) Pty Ltd, which, for convenience, were together referred to as "Capital". AFD extended credit for the purpose of funding the fees charged by NII and Capital. Where a person wishing to attend such seminars desired funding from AFD, the procedure was as follows. When such a person signed the seminar enrolment form he or she would also sign an AFD loan The contract offer, a documentation was sent to AFD. If the loan was approved, AFD would advise NII or Capital. The amount of the loan, as identified in the credit contract, was the amount of the seminar fee charged by NII or Capital to the borrower together with an establishment fee charged by AFD in the case of credit contracts made after February 2003. The credit contract identified the supplier (of services) as NII or Capital. The credit contract described as the amount payable to the supplier an amount equivalent to the seminar fee charged by NII or Capital. loan application and associated documentation. Included in the evidence was an example of a form of contract from December 2002 used as a precontractual statement which contained, so far as presently relevant, the following information. There was a "Financial Table" Crennan which was said to set out "key financial information which applies to the proposed contract." Under the heading: "Total loan and interest", the amount of the loan was $15,340 (which was NII's published seminar fee). The "[t]otal amount of interest charges payable" was $4781.12. The "[t]otal amount of repayments" was $20,121.12, payable by 48 monthly amounts of $419.19. The annual percentage rate of interest was shown. There then followed: "Who we will pay your loan to: Name of Supplier ... [NII] Amount payable to Supplier The case for the respondent is that the amount payable by AFD to NII was not $15,340; it was that sum less an amount, described as a "holdback", which, under an "arrangement" between AFD and NII, AFD was entitled to retain. The "holdback" was not disclosed to the borrower. According to the respondent, the statement of the amount payable to the supplier was incorrect. The "holdback" It is convenient for present purposes to adopt Maxwell P's description of the "holdback" system. He referred to the supplier of seminar services as N, the person who wanted to attend the seminars as C, and AFD as A. He said (reference omitted): "The facts of the typical case are straightforward. C wished to attend one of N's seminars. C entered an agreement with N (constituted by the seminar enrolment form) under which C promised to pay the fee in return for N's promise to provide the seminar. (This will be referred to as 'the seminar contract'). C was offered a number of alternative methods of paying the seminar fee, including cash, cheque, credit card and loan. C decided to borrow the amount of the seminar fee. At the same time as C signed the seminar enrolment form, he/she also signed a loan application form addressed to A. Acceptance by A created a loan agreement between A and C, under which A agreed to lend to C the amount of the seminar fee. The agreement specified the interest rate (if any), the term of the loan, and the number and amount of the repayments which C undertook to make. (This is referred to as 'the credit contract'). Ordinarily, in circumstances such as these, a credit provider would pay to the supplier the full price of the goods or services acquired by the Crennan consumer. (In the present case, that would have meant A paying N the full amount of the seminar fee.) By this means, the customer's debt to the supplier would be discharged. The customer would instead be indebted to the credit provider. The distinctive feature of the dealings in the present case is that A did not pay N the full amount of the seminar fee. A retained a proportion of the fee for itself. This was known as a 'holdback'. The holdback was retained by A in accordance with 'an arrangement or understanding' which the Tribunal found existed between A and N. The function of the holdback was to enable A to lend on more favourable terms (that is, at a lower rate of interest) than it would otherwise have been prepared to lend and, in some cases, to lend to customers who did not meet the normal credit criteria and would otherwise not have been able to borrow at all. There were two types of holdback. The first was an 'interest free holdback' or 'standard holdback'. In these cases, the arrangement between A and N was that the loan made by [A] to C would either be interest free or at a lower rate of interest than that which would ordinarily be charged by A to a borrower. The second was a 'high risk holdback', which was retained in addition to the standard holdback. In these cases, the arrangement between A and N was that the loan application would be approved even though the loan application would ordinarily have been declined by A because of the higher than usual risk of default. The function of the high risk holdback was to compensate A for the higher risk of default. The standard holdback was typically 10% of the loan amount; the high risk holdback was typically 40% of the loan amount. The holdback was credited by A to an unearned income account and, each month during the term of the loan, a pro rata amount was debited to A's unearned income account and credited to A's income account. C was unaware of the holdback. The credit contract itself did not disclose that A was retaining a proportion of the loan funds." In its written submissions, AFD explained the commercial rationale of the "holdback" as follows: "There were two kinds of holdback: a 'standard holdback' (or 'interest free holdback') and a 'high-risk holdback'. The standard holdback was most commonly 10% of the amount of credit, although it varied throughout the relevant period. It applied where AFD lent (unsecured) to the supplier's customer at a lower rate of interest than it would otherwise Crennan charge for that kind of lending. On occasions, the rate was zero. All of the relevant loans involved a standard holdback. The high-risk holdback (which concerned only transactions with purchasers introduced by NII) was calculated as 40% of the amount of credit after deducting any establishment fee, and was in addition to the standard holdback. It applied where AFD lent to an NII customer who did not meet AFD's normal credit criteria." In the particular example given, if there were both a standard holdback and a high-risk holdback, then the amount received by NII would have been, not $15,340, but $7,670. If there had been only a standard holdback, the amount received by NII would have been $13,806. Two further aspects of these transactions should be mentioned. First, although the Tribunal referred to an "arrangement or understanding" between NII and Capital, on the one hand, and AFD on the other, that seems to be an equivocation. There is no suggestion that AFD was not legally entitled to the holdback, and the plain inference is that its entitlement was contractual. AFD did not appear to contend otherwise. The holdback was for valuable consideration, being AFD's financing of the customer. Secondly, the nature of the credit provision was that the credit was provided for a specific purpose, and the application of the credit amount was controlled by AFD. There was never any question of AFD's providing a cash sum to the borrower, which the borrower would have been able to use as he or she saw fit. In argument, the dealings between AFD and NII or Capital were characterised as discrete from the credit contract. Whether that is true depends on what is meant by discrete. As Maxwell P acknowledged, the dealings between AFD and NII or Capital, and the dealings between AFD and the debtor, were closely related. The provision of credit was for the purpose, and for the purpose only, of the borrower's attendance at seminars, and that purpose was achieved by paying NII or Capital for attendance. The holdback was in consideration for AFD's providing credit to the person who would attend the seminars, that is, NII's or Capital's customer. Section 15(B) of the Code required disclosure, in respect of the amount of credit, of the persons, bodies or agents (including the credit provider) to whom it was to be paid and the amounts payable to each of them. To return to the particular example given above, the case for AFD depends upon the propositions that the amount of credit to be provided was $15,340 (which was true) and that the amount of $15,340 was payable to NII only, and would be paid by AFD to NII (which is in dispute). Crennan The arguments The argument for AFD was that a holdback is not a component of the amount of credit and is not required to be stated in the credit contract. It was contended that the contract between AFD and the debtor, that is, the credit contract, was separate from any contract between AFD and NII or Capital, that the obligation of AFD under the credit contract was to advance the amount of credit to the debtor by paying it to the relevant supplier, and that s 15(B)(a)(ii) operated upon that obligation, to which the holdback was irrelevant. The amount paid to NII or Capital was described in argument as a "net remittance". The Code, it was said, was "not concerned with the transaction between the consumer and the supplier but rather with the provision of information about the terms of the lending transaction ... Still less is the Code concerned with any transaction between the lender and the supplier." The respondent placed much emphasis upon the legislative purpose of securing "truth in lending", but on AFD's argument the question is: truth about what? If, as AFD contends, and Maxwell P held, s 15(B)(a)(ii) is concerned only with the credit contract and if, upon its true construction, in its application to the present case, the full amount of credit provided (eg $15,340) was payable to the service supplier (eg NII), then AFD told the borrower the truth. The inclusion, in s 15(B)(a)(ii), of the credit provider as a possible recipient of "the amount of credit to be provided" was not seen by AFD as an embarrassment. This reference, it was said, covers only such matters as the re- financing of prior debts and the imposition of fees, such as establishment fees. The respondent submits that the argument for AFD proceeds upon too narrow a view of s 15(B)(a), and depends upon reading into the provision words, limiting its operation, which are not there. It is said, in particular, that the statutory reference to "amounts payable" cannot be read, in a case such as the present, so as to confine attention to the obligations of the credit provider and borrower under the credit contract to the exclusion of contractual arrangements between the credit provider and the supplier of services which govern legal entitlements to receive the amount of credit provided. Conclusion The argument for the respondent, which was accepted by the majority in the Court of Appeal, is to be preferred. Section 14 requires precontractual disclosure by a credit provider, and, by virtue of s 14(5), the precontractual statement may be the proposed contract Crennan document itself. The provisions of s 15, which require the contract document to contain certain matters, regulate not only certain aspects of the contract between the credit provider and the debtor but also the information which is to be furnished to the debtor. Much of the argument for AFD appears to ignore what might be described as the informational aspect of s 15(B). Thus, AFD says of the statement in the particular example given above that $15,340 was payable to NII, that this was a stipulation in the credit contract and that, as far as the credit contract went, it was true. There are two reasons why this is incorrect. First, it was not contended that AFD's payment to NII of less than $15,340 (ie either $13,806 or $7,670) was a breach of AFD's contractual obligations to the debtor. Yet this seems to be the corollary of the proposition that the credit contract required payment of the full amount to NII. Secondly, the statement of the amount payable to NII was to fulfil the statutory requirement of providing the debtor with information. The purpose of imposing such a requirement was to enable the debtor to see how the amount of credit was to be disbursed in a case, such as the present, where it was not to be paid by way of loan to a borrower. It is this specific legislative purpose, evident from the text of s 15(B) as well as the wider statutory context, that is of present relevance. Wider considerations of "truth in lending" are not to be disregarded, but they tend to divert the argument into unproductive speculation about the importance, or possible importance, to the debtors of knowledge of the holdback. Whatever use the debtors might have made of information about the holdbacks, it was information AFD and NII and Capital kept to themselves. Whether AFD was merely being economical with the truth, or was in breach of its statutory obligation, is to be decided by applying the terms of s 15(B). AFD's case was that s 15(B) is concerned only with the credit contract; the contract relating to the holdbacks was irrelevant. Yet, to return to the example, AFD did not intend to pay $15,340 to NII; NII never expected to receive that amount; it is not said that the holdback constituted a breach by AFD of the credit contract; and, regarded as factual information, the statement that $15,340 was payable, and was to be paid, to NII was incorrect. Part of the amount was to be paid to NII and part was to be retained by AFD. Maxwell P gave weight to an argument of economic equivalence. The holdback, he said, was equivalent to a payment to AFD at the direction of the seminar provider. It was the same as if the whole amount (eg $15,340) was payable to NII or Capital, and received by NII or Capital, and then the amount of the holdback was then paid to AFD. Three comments may be made. First, the task is to apply the terms of s 15(B) to this case, and not to consider how they would apply to a different case. Secondly, although it is unnecessary to decide the question, it is far from clear that AFD would be in a better position had it contracted, with NII or Capital, for a payment to AFD, rather than a holdback. Crennan Thirdly, Kaye J mentioned in his reasons that NII is in liquidation and that an administrator and receiver was appointed to Capital. The possibility of insolvency dictates the form of many commercial transactions, and for good reason. The risk that NII or Capital might become insolvent may explain why the holdback method was preferred to a different method of securing the intended commercial objective. At least it would highlight the danger of assuming the equivalence postulated. The credit contracts of AFD did not comply with the requirements of s 15(B)(a)(ii). Because of the non-disclosure of the holdbacks, they did not identify the persons (including the credit provider) to whom the amount of credit was to be paid, or the amounts payable to each of them. The appeal should be dismissed with costs. Kirby KIRBY J. This appeal comes from a divided decision of the Court of Appeal of the Supreme Court of Victoria5. It concerns the meaning and application of a disclosure requirement in the Consumer Credit (Victoria) Code (Vic) ("the Code"). The Code represents the adoption in Victoria6 of the Consumer Credit Code7, which was enacted as a template for substantially uniform credit laws throughout the Commonwealth. It gives effect to the Australian Uniform Credit Laws Agreement8. There are precedents for procuring such uniform laws9. The validity of the legislative device was not challenged. It is comparatively rare because of the independent prerogatives of the State Parliaments under the Constitution, the differing legislative settings in which uniform laws must operate, and the cumbersome arrangements that are needed to secure agreement on such laws and to keep them up to date once enacted. Where laws of this kind are enacted and valid, it behoves the courts to give them full force and effect. But the questions remain: What does the law mean? How is it to be applied? The proper approach to resolution of the appeal Truth in lending laws: I agree with the orders proposed in the reasons of Gleeson CJ, Gummow, Hayne and Crennan JJ ("the joint reasons"). The appeal by Australian Finance Direct Limited ("AFD"), challenging the successive decisions of the Victorian Civil and Administrative Tribunal10, the single judge of the Supreme Court of Victoria (Kaye J11) and the Court of Appeal, must fail. 5 Australian Finance Direct Ltd v Director of Consumer Affairs Victoria [2006] VSCA 245. 6 See Consumer Credit (Victoria) Act 1995 (Vic), s 5. 7 The Code comprises an appendix to the Consumer Credit (Queensland) Act 1994 8 Duggan and Lanyon, Consumer Credit Law, (1999) at 22-23. 9 The former Companies Code was an earlier manifestation. See Corporate Affairs Commission (NSW) v Yuill (1991) 172 CLR 319 at 333. 10 Director of Consumer Affairs Victoria v Australian Finance Direct Ltd (2004) ASC 11 Australian Finance Direct Ltd v Director of Consumer Affairs Victoria (2005) ASC Kirby The respondent, the Director of Consumer Affairs Victoria ("the Director"), has advanced the preferable, and thus the correct, interpretation of the Code. Respectfully, however, I disagree with the somewhat narrow basis on which the joint reasons explain their conclusion. Those reasons advert to the "specific legislative purpose" of s 15(B) of the Code, which is stated to be "to enable [a] debtor to see how [an] amount of credit [is] to be disbursed in a case β¦ such as the present"12. This purpose is said to be "evident from the text of s 15(B) as well as the wider statutory context"13. The joint reasons remark that "[w]ider considerations of 'truth in lending' are not to be disregarded", but state that such considerations "tend to divert the argument into unproductive speculation about the importance, or possible importance, to the debtors of knowledge of the holdback" that is in issue14. I see in this approach an unwarranted constriction of the purposive approach to the interpretation of statutes. I do not agree in it. It runs counter to this Court's acceptance, in recent times, that the meaning of contestable legislative language is best resolved through a thorough investigation of the purpose of the provision or provisions concerned. In a case such as this, where the language of a statute is capable of bearing more than one meaning and there has been a legitimate division of opinion on the issue in an intermediate court, it does not suffice to point to the "informational aspect" evident on the face of a provision such as s 15(B)15 as though it supplies the measure of that provision's practical effectiveness. It would be rare, at this level, for the elucidation of the purpose of a law to be so straightforward. Instead, the Court must endeavour to give effect to the principles of purposive construction that it has elaborated in a long series of cases that have gone before. This entails reference to such extrinsic materials as are necessary and available to ensure that the objectives that lie behind a particular piece of legislation are given their full and proper weight. It does not entail dismissing such materials as liable to lead to "unproductive speculation". To confine oneself to the text of a disputed legislative provision to the exclusion of its context is to risk lapsing back into a literalistic approach to the interpretation of statutes16. The purposive approach, properly understood, 12 Joint reasons at [19]. 13 Joint reasons at [19]. 14 Joint reasons at [19]. 15 Joint reasons at [19]. 16 cf Chang v Laidley Shire Council (2007) 81 ALJR 1598 at 1606 [33], 1608 [43]; 237 ALR 482 at 490-491, 493. Kirby supports the conclusion arrived at in the joint reasons. But it affords a more convincing means of reaching that conclusion. It assists judges in performing their function of interpreting statutes in a manner consonant with their constitutional duties. It is to give effect to these differing views on approach, and out of respect for each of the divergent opinions expressed in the Court of Appeal, that I write separately. The facts and legislation: The facts of the dispute17, the disclosure requirements of the Code and other relevant legislative provisions18 and the arguments of the parties19 are all explained in the joint reasons. Purposive interpretation Purposive construction: Isolating the point of difference as to the interpretative task requires an examination of what this Court has said about the proper approach to elucidating the meaning of contested legislative language, such as that of s 15(B)(a)(ii) of the Code. The correct approach demands (as the judges below recognised) an appreciation of relevant historical and other materials that cast light on the purpose of the Victorian Parliament in adopting, and giving effect to, the Code. When this purpose is understood, the resolution of the competing contentions in the appeal becomes relatively simple. Those of the Director are consonant with the statutory language and conform to the central objects of the Code, and should therefore be preferred. Those of AFD, even if arguably compatible with one reading of the words of the Code, would frustrate the attainment of those objects. They should be rejected. Starting with the text: The starting point for statutory interpretation is always the text of the written law20. It is in that text that the legislature expresses its purpose or "intention". It is a mistake for courts to begin their search for the meaning of the law with judicial elaborations, ministerial statements or historical considerations21. Moreover, in performing its functions, a court should never 17 Joint reasons at [6]-[13]. 18 Joint reasons at [2]-[5]. 19 Joint reasons at [14]-[17]. 20 Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 518; Chang (2007) 81 ALJR 1598 at 1611 [59]; 237 ALR 482 at 496-497. 21 See Combet v The Commonwealth (2005) 224 CLR 494 at 567 [135] where relevant authorities are collected. Kirby stray too far from the text, for it constitutes the authentic voice of the constitutionally legitimate lawmaker22. Reasons for purposive interpretation: Nevertheless, especially in recent decades, courts of high authority23, including in Australia24, have moved away from a literal or semantic approach to statutory construction and towards a contextual and purposive approach. The reasons for this development, which has occurred at the same time in many countries of the common law, are several and complex. They include: Judicial recognition of the constitutional advance of universal suffrage and the respect that is therefore to be accorded to the "will" of Parliament, once it is ascertained25; Judicial appreciation of the growing complexities of government in an age of detailed legal regulation26; The growing understanding of the function of context and purpose in all 22 cf Trust Co of Australia Ltd v Commissioner of State Revenue (2003) 77 ALJR 1019 at 1029 [68]-[69]; 197 ALR 297 at 310-311. 23 See eg the House of Lords in Fothergill v Monarch Airlines Ltd [1981] AC 251 at 24 Kingston v Keprose Pty Ltd (1987) 11 NSWLR 404 at 423-424 approved Bropho v Western Australia (1990) 171 CLR 1 at 20; cf Federal Commissioner of Taxation v Ryan (2000) 201 CLR 109 at 144-146 [79]-[82]. 25 R v Lavender (2005) 222 CLR 67 at 97 [94]. 26 cf White v Director of Military Prosecutions (2007) 81 ALJR 1259 at 1273 [48]; 235 ALR 455 at 468-469. 27 Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389 at 396-397 applying R v Brown [1996] AC 543 at 561. Kirby The impetus given by numerous general28 and particular29 statutory provisions requiring courts to prefer a construction that promotes the purpose and object of legislation to one that merely gives effect to its grammatical words; and Judicial recognition of the pragmatic truth that one price of simplification and concision in the enacted law is an increased need for courts to strive to give effect to the purpose of the lawmaker rather than resorting to the judicial lament that "the target of Parliamentary legislation β¦ has been missed"30. The acceptance of the purposive approach to the interpretation of legislation therefore represents one of the most important doctrinal shifts in the reasoning of this Court in recent times. Statutory interpretation is now a principal function of appellate and trial courts around the world31. The decisions of this Court provide guidance for intermediate and trial courts throughout Australia. It must therefore take care to maintain a consistent approach. It would be unfortunate if, by its approach to particular proceedings, this Court were to suggest a return to literalism, or sympathy for the view that considerations of context and purpose are now to have less attention. An important lesson of the past 20 years has been that statutory language better yields its meaning when its purpose is ascertained and taken into account in performing the task of interpretation. Normally, this obliges attention to the statutory context in which the contested "terms" of the legislation appear and some consideration of the objectives that stimulated the making of the contested law. Of course, the purpose to be ascertained is that of the particular provision viewed in the context of the entire statute32. Where the legislature has not spelt 28 Acts Interpretation Act 1901 (Cth), s 15AA; Interpretation of Legislation Act 1984 (Vic), s 35. 29 The Code, Sched 2, cl 7 cited [2006] VSCA 245 at [170]; cf Companies and Securities (Interpretation and Miscellaneous Provisions) (New South Wales) Code, s 5A considered in Yuill (1991) 172 CLR 319 at 343-344, 348. 30 Diplock, "The Courts as Legislators", in Harvey (ed), The Lawyer and Justice, (1978) 263 at 274 cited Kingston (1987) 11 NSWLR 404 at 424. 31 Frickey, "Structuring Purposive Statutory Interpretation β An American Perspective", in Gotsis (ed), Statutory Interpretation: Principles and Pragmatism for a New Age, (2007) 159 at 159. 32 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381 [69]; Stevens v Kabushiki Kaisha Sony Computer Entertainment (2005) 224 (Footnote continues on next page) Kirby out this purpose in unmistakable terms, it is the responsibility of the decision- maker to use all available resources to discover it. Rejection of the former approach: In the past, courts stating the general common law rule proposed that the literal or grammatical construction of words was to be preferred unless it would produce some ambiguity or apparent anomaly or injustice, such as to justify a broader inquiry into the statutory purpose33. This Court has now rejected such preconditions. In CIC Insurance Ltd v Bankstown Football Club Ltd34, four members of the Court said: "[T]he modern approach to statutory interpretation (a) insists that the context be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise, and (b) uses 'context' in its widest sense to include such things as the existing state of the law and the mischief which, by legitimate means β¦ one may discern the statute was intended to remedy35. Instances of general words in a statute being so constrained by their context are numerous. In particular, as McHugh JA pointed out in Isherwood v Butler Pollnow Pty Ltd36, if the apparently plain words of a provision are read in the light of the mischief which the statute was designed to overcome and of the objects of the legislation, they may wear a very different appearance. Further, inconvenience or improbability of result may assist the court in preferring to the literal meaning an alternative construction which, by the steps identified above, is reasonably open and more closely conforms to the legislative intent37." CLR 193 at 206-208 [30]-[34]; Carr v Western Australia (2007) 239 ALR 415 at 33 cf Magor and St Mellons Rural District Council v Newport Corporation [1952] AC 189 at 191; Jones v Director of Public Prosecutions [1962] AC 635 at 662 per Lord Reid; Stock v Frank Jones (Tipton) Ltd [1978] 1 WLR 231 at 234-235, 237, 238; [1978] 1 All ER 948 at 951-952, 954, 955. 34 (1997) 187 CLR 384 at 408 per Brennan CJ, Dawson, Toohey and Gummow JJ. 35 Attorney-General v Prince Ernest Augustus of Hanover [1957] AC 436 at 461 cited in K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd (1985) 157 CLR 309 36 (1986) 6 NSWLR 363 at 388. 37 Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 320-321. Kirby This explanation of the approach to be taken to a problem of construction has been cited, restated and applied in this Court so many times that it should be uncontroversial38. Some judges have not been sympathetic to the purposive approach39. Some have clearly yearned for a return to the perceived simplicities of literalism40, either generally or in particular fields of law. On the whole, however, this Court has adhered to the doctrinal shift with a fair degree of consistency. In my view, there is a need for such consistency. We should avoid opportunistic reversions to the old approach of literalism which the legal mind sometimes finds congenial41. Obviously, a balance must be struck between, on the one hand, an exclusive focus on the text of legislation and, on the other, reference to extrinsic information that assists to explain its purpose. Those bound by the law will often have no access to such information. Cases do arise where the legal prescription is relatively clear on the face of the written law. To the extent that external inquiries are necessary, they obviously add to marginal costs and can sometimes occasion disputes and uncertainty which the words of the law alone would not have produced. Finding the preferable construction: In the present case, the text of the Code was not absolutely clear. So much is demonstrated by the conflicting reasons in the Court of Appeal. If Maxwell P concluded that AFD had not breached the disclosure requirements of the Code, and if special leave was 38 See eg Newcastle City Council v GIO General Ltd (1997) 191 CLR 85 at 112-113; Project Blue Sky (1998) 194 CLR 355 at 381 [69], 384 [78]; Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd (1998) 192 CLR 603 at 620 [47] per Gummow J; James Hardie & Coy Pty Ltd v Seltsam Pty Ltd (1998) 196 CLR 53 at 82 [74]; Wilson v Anderson (2002) 213 CLR 401 at 438 [71] per Gaudron, Gummow and Hayne JJ; Eastman v Director of Public Prosecutions (ACT) (2003) 214 CLR 318 at 328-329 [22] per McHugh J, 368 [140] per Heydon J; Permanent Trustee Australia Ltd v FAI General Insurance Co Ltd (In liq) (2003) 214 CLR 514 at 531-532 [31]-[32] per McHugh, Kirby and Callinan JJ; AssetInsure Pty Ltd v New Cap Reinsurance Corporation Ltd (In liq) (2006) 225 CLR 331 at 361-362 [87] per Kirby and Hayne JJ. 39 Esso Australia Resources Ltd v Federal Commissioner of Taxation (1999) 201 CLR 49 at 99-101 [146]-[149] per Callinan J. 40 As expressed eg in Batagol v Federal Commissioner of Taxation (1963) 109 CLR 243 at 251 per Kitto J. 41 Ryan (2000) 201 CLR 109 at 145-146 [82]; Palgo Holdings Pty Ltd v Gowans (2005) 221 CLR 249 at 285 [113]; Minister for Employment and Workplace Relations v Gribbles Radiology Pty Ltd (2005) 222 CLR 194 at 226-227 [88]-[89]. Kirby granted to permit this Court to resolve the difference that thus arose in the intermediate court, it can scarcely be said that the text is so clear that it was unnecessary to go much beyond "applying the terms of s 15(B)"42. The Director did not go so far as to argue that Maxwell P had embraced an interpretation that was absurd or unavailable on the face of the Code. Instead, it was the Director's submission that the preferable construction of the disputed Code provision was that adopted by the Tribunal, the primary judge and the majority of the Court of Appeal. An important element in this contention was the submission that such an interpretation better carried into effect the Code's ascertained purpose. Disclosure to the borrower of "holdbacks" The issue of disclosure: In the Court of Appeal, Maxwell P took the view that the "holdbacks" were equivalent to a payment to AFD at the direction of NII/Capital43: "More accurately, it [was] equivalent to a payment by [AFD] (in its capacity as lender) to [AFD] (in its own right) at [NII/Capital]'s direction. β¦ [NII/Capital] might have directed [AFD] to pay some proportion of the seminar fee to one or more of [NII/Capital]'s trade creditors. In compliance with that direction, [AFD] would have paid that part of the loan amount not to [NII/Capital] but to the nominated trade creditor(s). This would be an example of funds owing, and payable, to [NII/Capital] being diverted to a third party at [NII/Capital]'s direction." This allowed his Honour to find that the "holdbacks" were nothing more than a "shortcut" for effecting a transaction that was separate from, and extrinsic to, the credit agreement between AFD and individual debtors44: "[T]he critical matter is that the full amount of the seminar fee was payable to [NII/Capital]. [NII/Capital] alone had the power to decide whether any, and if so what, part of the seminar fee would in fact be received by some other person." I accept that, particularly viewed in isolation, this was an available construction of the Code. 42 Joint reasons at [19]. 43 [2006] VSCA 245 at [18] per Maxwell P. 44 [2006] VSCA 245 at [20]. Kirby The majority in the Court of Appeal questioned whether it was open, in an appellate process limited to the correction of errors of law, to make a finding about the nature of the "holdbacks" that differed from that of the Tribunal45. The Deputy President of the Tribunal had specifically concluded46: "that the holdbacks were retained by AFD, not paid by NII or Capital. I am not satisfied that there was any independent clear arrangement applying throughout the relevant period under which NII or Capital incurred an obligation to pay these holdbacks to AFD." Even if the Tribunal's characterisation of the "holdbacks" involved a question of law, the majority in the Court of Appeal disagreed with Maxwell P's analysis of the arrangements and with his characterisation of them. Neave JA pointed out47: "The holdback fee was retained by the credit provider. It was never contemplated by AFD or NII/Capital that the holdback fee should be paid to the latter. There is a clear distinction between this situation and the situation in which the parties make an arrangement under which a credit provider holds an amount on behalf of the supplier of goods and services (in this case NII/Capital), which can then direct disposal of that amount. In my view it is wrong to regard the holdback arrangement as a payment by AFD to itself at NII/Capital's direction, or to equate the arrangement to a situation in which AFD set aside an amount for NII/Capital and then paid part of that amount to NII/Capital's trade creditors." In affirming the characterisation of the "holdbacks" adopted by the Tribunal (and the primary judge) the majority in the Court of Appeal placed considerable emphasis on the stated and apparent purposes of the Code, as well as its background and history. Thus, Neave JA said48: 45 See [2006] VSCA 245 at [77]-[82] per Ashley JA, [143]-[152] per Neave JA; cf at [4]-[5] per Maxwell P. 46 (2004) ASC ΒΆ155-067 at 201,239 [59] per McKenzie DP. See also [2006] VSCA 245 at [83]-[87] per Ashley JA and at [143] per Neave JA. 47 [2006] VSCA 245 at [160]. 48 [2006] VSCA 245 at [164]. See also at [123] per Ashley JA. Kirby "The legislative history and policy goals of the Code49, the text of the provision itself and the legislative context in which it appears50 support an interpretation of s 15(B)(a)(ii) which requires disclosure of the amount of the holdback to the borrower." With respect to those who may think otherwise, it is my opinion that this represented the correct approach. It was one conformable with the authority of this Court. Indeed, although he reached a different conclusion, Maxwell P did not question the need to uphold "the manifest purpose of the Code, being to ensure that there was 'truth in lending'"51. His Honour simply viewed that objective more narrowly, seeing it as giving rise to a requirement of disclosure "relat[ing] to the lending transaction itself"52. His was thus a view of the disclosure objectives of the Code that the majority in the Court of Appeal regarded as too narrow, as inconsistent with the history of the Code and its purpose, and as requiring (as the majority put it) insertion of words in the critical sub-paragraph of the Code that had appeared in the previous legislation but had been omitted from the Code53. Background to the Code: As Neave JA described it54, the Code was "the culmination of more than 30 years of attempts to reform and modernise consumer credit laws and to apply a uniform approach to credit transactions across Australia". Distinctive consumer credit arrangements were developed in the United Kingdom, Australia and elsewhere in the late nineteenth and early twentieth centuries, principally to facilitate the acquisition of consumer durables55. During the twentieth century, developments in the variety and significance of consumer credit contracts led to instances of abuse, obfuscation and unfairness, demands for amendments, public inquiries and reforming legislation. 49 Interpretation of Legislation Act 1984 (Vic), s 35. 50 cf Stingel v Clark (2006) 226 CLR 442 at 473-474 [89]. 51 [2006] VSCA 245 at [42]. 52 [2006] VSCA 245 at [42] (emphasis in original). 53 [2006] VSCA 245 at [179]-[190] per Neave JA; see also at [108]-[109] per 54 [2006] VSCA 245 at [165] (citations omitted). 55 See [2006] VSCA 245 at [171]. Kirby Early hire purchase and money-lenders legislation required disclosure to debtors of the amount of interest and the charges that would be incurred in consequence of such transactions56. Because consumer credit was a transnational phenomenon, it was not surprising that protective legal changes adopted overseas came to influence the law in Australia. In the United States of America, Congress enacted the Truth in Lending Act 1968 (US)57. That Act stimulated the establishment in South Australia of a committee chaired by Professor (later Judge) Arthur Rogerson. That committee reported in 196958. In 1971, the Crowther Committee completed a major review of consumer credit legislation in England59. Its report identified several deficiencies in consumer credit laws as they had developed in the United Kingdom. Some of its criticisms were also apposite in the Australian context. In 1972, a committee of the Law Council of Australia chaired by Mr T Molomby published a report detailing its investigations into the state of the law in Australia, and making recommendations for reform60. The report was formally presented to the Victorian Attorney-General. In 1973, the Standing Committee of Attorneys-General agreed to the formation of a Credit Laws Committee to develop model consumer credit legislation for all jurisdictions in Australia61. The "linchpin" of credit disclosure: The work of the Credit Laws Committee ultimately led to the enactment of the Credit Act 1984 (Vic) and 56 See eg Money-lenders and Infants Loans Act 1941 (NSW), s 22(2). 57 One purpose of that Act is "to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him": 15 USC Β§1601(a). See eg Walker v Wallace Auto Sales Inc 155 F 3d 927 at 930 (7th Cir, 1998). 58 Report to the Standing Committee of State and Commonwealth Attorneys-General on The Law relating to Consumer Credit and Moneylending, (1969) ("the Rogerson Report"); cf White, Fair Dealing with Consumers, (1975). 59 Consumer Credit: Report of the Committee, (1971) Cmnd 4596. 60 Law Council of Australia, Report on Fair Consumer Credit Laws, (1972) ("the Molomby Report"). 61 See Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 22 March 1984 at 3403; New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 3 May 1984 at 171-172. Kirby counterpart legislation in other jurisdictions ("the 1984 Acts")62. Each statute gave effect to the principle of "truth in lending", adapted from United States and British models and accepted as a central policy objective by all of the Australian inquiries. The 1984 Acts came under the attention of the appellate courts of the jurisdictions concerned. Thus, the Credit Act 1984 (NSW) was considered by the New South Wales Court of Appeal in Canham v Australian Guarantee Corporation Ltd63. Expressing the substantially unanimous opinion of that "The philosophy of disclosure β¦ runs through the reports which have accompanied and occasioned the reform of consumer credit legislation in Australia. The obligation of disclosure did not begin with the Truth in Lending Act in the United States. There were provisions in earlier β¦ Acts to require disclosure to debtors of the amount of interest and charges β¦ But disclosure and truth in lending was the very linchpin of the new Credit Act. To discourage non-disclosure, whether deliberate or accidental, drastic consequences were provided by s 42." In Australia and New Zealand Banking Group Ltd v R & D Bollas65, Ormiston JA considered the provision of the Credit Act 1984 (Vic) requiring disclosure of information relevant to the costs and other incidents of the credit transaction to borrowers in a similar manner. His Honour said that the relevant provision should be66: "given an interpretation appropriate to its use in this context and not one which would have enabled credit providers to create artificial transactions in order to deny their obligation to make disclosure". In Canham, I mentioned two extrinsic considerations that tended to support such a purposive construction of the disclosure provisions of the 1984 Acts. One was the report of the Australian Law Reform Commission, published just before the enactment of the 1984 Acts, on an analogous problem that had 62 Counterpart legislation was enacted in New South Wales, Western Australia, the Australian Capital Territory and Queensland: Duggan and Lanyon, Consumer Credit Law, (1999) at 21. 63 (1993) 31 NSWLR 246. 64 (1993) 31 NSWLR 246 at 253 (emphasis added). 65 (1999) ASC ΒΆ155-301 at 200,163 [8]-[9]. 66 (1999) ASC ΒΆ155-301 at 200,163 [8]. Kirby arisen in the context of consumer transactions involving insurance brokers67. The Commission's research had68: "disclosed secret commissions, or payments in the nature of commissions, passing between insurers and such intermediaries β¦ The β¦ Commission report explored various options. It concluded that the best way to prevent secret commissions and to promote informed decisions by consumers was to impose upon brokers the obligation to disclose to their clients, in each case, the amount earned by way of commission and other rewards received from the insurer". The object of truth in lending: The Commission explained the purpose of imposing such obligations in terms which, as I recognised in Canham, also underpinned the analogous disclosure requirements of the 1984 Acts69: "Disclosure would also encourage and promote informed assessment and, perhaps, questioning by the client of the cost of the services of an insurance broker. It might well lead to a client comparing the cost of the services of different brokers. There are limited opportunities for inquiry and comparison when the client is not told of the amount paid to his broker β¦ The market forces which operate in favour of competition can be most effective when the consumer is made aware of the cost of services rendered on his behalf." The second consideration mentioned in Canham was the controversy that had followed the Commission's recommendation for full disclosure to consumers of commissions and other rewards derived by the credit provider from the consumer's payments for the services provided70: "One argument put to the Commission was that a client is no more entitled to that information from a broker than he would be from a salesman if he bought, say, a refrigerator or a pair of shoes. His sole concern, it is said, is with the price charged by the insurer, a price which, it is argued, remains the same whether insurance is bought direct or through a broker." 67 Australian Law Reform Commission, Insurance Agents and Brokers, Report No 16, (1980) ("ALRC 16"). 68 Canham (1993) 31 NSWLR 246 at 252-253. 69 ALRC 16 at 51 [82] cited Canham (1993) 31 NSWLR 246 at 253. 70 ALRC 16 at 51 [83] cited Canham (1993) 31 NSWLR 246 at 253-254. Kirby This argument bears a similarity to the submission that AFD advanced in the present case. As I pointed out in Canham, the argument was rejected by the Law Reform Commission71: "First, there is the world of difference between the position of an insurance broker and a salesman. A salesman is the employee or agent of the seller of goods. β¦ An insurance broker, however, is the agent of the purchaser and is answerable to his client in all respects. He should not be allowed to conceal from his client the remuneration received from a third party. Secondly, the client is not necessarily interested solely in the cost of the insurance. He may also be interested in the broker-related component of that cost. Armed with that knowledge, he might, in appropriate cases, consider whether to: Approach the insurer for direct purchase at a reduced cost Seek rebate from the broker of a part of his commission Seek a total rebate of the commission and either employ the broker on a fee for services basis or (in the case of, eg, a large corporation) employ a risk manager as a salaried officer Employ a different broker or an insurance consultant." All of these considerations apply equally to the "holdbacks" revealed in the evidence in the present case. Adopting a purposive approach: In Canham72, the New South Wales Court of Appeal explained the suitability of adopting a purposive approach to the ascertainment of the meaning of contested provisions of the Credit Act: "The ultimate theory behind the philosophy of truth in lending in our credit legislation is that disclosure of critical elements in the consumer contract will help to ensure honesty and integrity in the relationship (where one party is normally disadvantaged or even vulnerable); promote informed choices by consumers; and allow the market for financial services to operate effectively. β¦ The policy behind the philosophy must be kept in mind in approaching the application of particular provisions in the Act to particular facts. The modern approach to the interpretation of legislation is, so far as the language of the legislation permits, to ensure 71 ALRC 16 at 51-52 [83] cited Canham (1993) 31 NSWLR 246 at 254. 72 (1993) 31 NSWLR 246 at 254. Kirby that it gives effect to, and does not frustrate the achievement of, the apparent purposes of parliament as disclosed in that language". In support of this last proposition, reference was made to Kingston v Keprose Pty Ltd73. As I have shown, reference can now also be made to the repeated holdings of this Court, most notably in Bropho v Western Australia74, CIC Insurance75 and Newcastle City Council v GIO General Ltd 76. Ministerial statements of purpose: When the 1984 Acts were repealed and replaced by the Code, the stated purpose was to enact legislation covering all forms of consumer credit in Australia77. Explaining the proposal to enact the Code in Victoria, the State Attorney-General described the difficulties that had arisen in securing uniformity on the basis of the 1984 Acts78. Relevantly, she "A fundamental principle of the [C]ode is that there should be the least possible restrictions on the nature and amount of fees and charges which can be imposed provided that all such fees and charges are adequately disclosed. β¦ The objective is to ensure that before any contract is entered into, the prime financial information is presented in a simple form so that the borrower can assess the true cost of any proposed credit transaction and make meaningful comparisons with competing products on offer. The principle of full disclosure is carried forward into the contract itself where, again, all fees and charges as well as interest charges must be fully disclosed, if they are to be chargeable at all." 73 (1987) 11 NSWLR 404 at 423 and cases there cited. 74 (1990) 171 CLR 1 at 20. 75 (1997) 187 CLR 384. 76 (1997) 191 CLR 85 at 112-113. 77 Queensland, Legislative Assembly, Parliamentary Debates (Hansard), 4 August 78 Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 4 May 1995 at 79 Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 4 May 1995 at 1234. See [2006] VSCA 245 at [123]. Kirby A like point was made by the Minister introducing the template for the Code into the Queensland Parliament80: "One of the key elements of the Consumer Credit Code is to ensure that there is truth in lending. This means that a consumer can make an informed choice between credit providers as to the nature of the credit being offered, as well as the comparative costs between credit providers. The legislation sets out in some detail the requirements for credit contracts, including such basic matters as precontractual disclosure, the fact that credit contracts must β¦ contain certain key material designed to ensure that truth in lending is given effect to." Against the background of this understanding of the history and purpose of the Code it is easier to understand Neave JA's explanation of the legislative context in which s 15(B)(a)(ii) of the Code must be interpreted81: "[T]he pre-contractual disclosure requirements in the Code are not confined to matters concerning the contractual relationship between the credit provider and the borrower. For example s 15(L) requires the borrower to be given a statement on the terms of any guarantee or mortgage which is to be or has been taken by the credit provider. The parties to the contract of guarantee will often not be parties to the credit contract. Section 15(M) requires disclosure of the fact that a commission is to be paid by or to the credit provider for the introduction of credit business or business financed by the contract; and s 15(N) requires disclosure of the details of any credit-related insurance contract which is to be financed, including any commission which the credit provider is aware is to be paid in relation to the insurance contract. All of these provisions relate to matters which involve a separate contractual relationship between the credit provider and a third party, but which may be relevant to a consumer who is seeking to compare the true costs of different credit arrangements." Such considerations, together with analysis of the language and structure of s 15 and the development of its predecessor provisions and reflection on how the Code was designed to operate so as to achieve its stated purposes, led the majority of the Court of Appeal to their preferred interpretation. 80 Queensland, Legislative Assembly, Parliamentary Debates (Hansard), 4 August 81 [2006] VSCA 245 at [174] (citation omitted; emphasis in original). Kirby Resulting preferred interpretation: The reasons of the majority in the Court of Appeal offer the preferable interpretation of the Code. It is textually supported. It involves an harmonious interpretation of the Code, taking into account its drafting history. It is consistent with the achievement of the general purposes of the Code, as apparent on its face and from parliamentary records. It promotes transparency in the dealings between credit providers and borrowers. It is protective of the interests of credit consumers, consistent with the overall objective of the Code. It thus helps to sustain the object of "truth in lending". To the extent that there is any textual ambiguity, this Court should resolve it by endorsing the interpretation favoured by the majority of the Court of Appeal. It should do so because that is the surest way to give effect to the purpose of Parliament as the legislators have repeatedly expressed that purpose. Provided the chosen language sustains the stated purpose, giving it effect furthers the proper relationship between the courts and the lawmaker82. Conclusion I come to my conclusion in this appeal unconvinced that the correct answer is derived without recourse to considerations external to the text of s 15(B). The advancement of "truth in lending" being the declared objective of the contested provisions of the Code, it constitutes a proper and useful contextual consideration to take into account in performing the interpretative function in this case. Adopting such an approach does not lead to "unproductive speculation". On the contrary, it involves resolving the problem now before the Court in precisely the way that, in recent years, the Court has repeatedly said such problems should be resolved. Ascertaining and giving effect to the meaning of statutory language is rarely, if ever, a mechanical task. It demands analysis of the relevant text and context, informed by a variety of considerations. Amongst these, the ascertained legislative purpose is extremely important. It is so in virtually every case of contested statutory interpretation by the time it reaches this Court. In the present case, the purpose of the Code militates against the construction urged for AFD and in favour of that argued for the Director. In brief, the purpose helps judges to read the statutory language in the correct way and to appreciate fully what the legislature was intending to say on the particular question in hand. The majority of the Court of Appeal were thus correct, not only in their conclusion but also in 82 In the United States, the Truth in Lending Act has also been interpreted stringently in respect of disclosure requirements. For example, the courts have held that such requirements are not to be circumvented by burying the cost of credit in the price of the goods sold. See eg Sampler v City Chevrolet Buick Geo Inc US Dist LEXIS 2322 (ND Ill, 2000) applying Walker 155 F 3d 927 (7th Cir, 1998). Kirby their approach. Unless a consistent approach is taken to statutory construction, outcomes may be haphazard and unpredictable. And judges may be suspected of tailoring their approaches in order to produce a desired outcome. Order The appeal should be dismissed with costs. |
HIGH COURT OF AUSTRALIA AND APPELLANT THE QUEEN RESPONDENT RP v The Queen [2016] HCA 53 21 December 2016 ORDER Appeal allowed. Set aside orders 4, 5 and 6 of the orders of the Court of Criminal Appeal of the Supreme Court of New South Wales made on 26 August 2015 and in their place order that: appeal allowed with respect to counts 2 and 3; and quash the convictions in respect of counts 2 and 3 and enter verdicts of acquittal. On appeal from the Supreme Court of New South Wales Representation H K Dhanji SC with J L Roy for the appellant (instructed by Legal Aid (NSW)) S C Dowling SC with N J Owens SC and B K Baker for the respondent (instructed by Solicitor for Public Prosecutions (NSW)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS RP v The Queen Criminal law β Criminal liability and capacity β Doli incapax β Where appellant convicted of two counts of sexual intercourse with child under 10 years β Where appellant approximately 11 years and six months at time of offending β Where appellant found to be of very low intelligence β Whether presumption of doli incapax rebutted. Words and phrases β "doli incapax", "knowledge of the moral wrongness of the act", "merely naughty or mischievous", "morally wrong", "seriously wrong". Children (Criminal Proceedings) Act 1987 (NSW), s 5. Crimes Act 1900 (NSW), s 66A(1). KIEFEL, BELL, KEANE AND GORDON JJ. In August 2014, the appellant was tried by judge alone in the District Court of New South Wales (Letherbarrow SC DCJ) on an indictment that charged him with two counts of aggravated indecent assault (counts one and four)1 and two counts of sexual intercourse with a child aged under 10 years (counts two and three)2. He was acquitted of the offence charged in count one and convicted of the remaining offences. The complainant in each of the offences is the appellant's younger brother. The offences charged in counts two and three are alleged to have taken place when the complainant was aged six years and nine months. The offence charged in count four is alleged to have occurred when the complainant was aged seven years and five months. The trial judge determined that the appellant was aged approximately 11 and a half years at the time of the offences charged in counts two and the appellant was aged approximately 12 years and three months at the time of the offence charged in count four. His Honour determined three. that The evidence at the trial was wholly documentary. The facts of the offences, contained in an interview between the complainant and the police which took place when the complainant was aged 15 years, were not disputed. The common law presumes that a child under 14 years lacks the capacity to be criminally responsible for his or her acts. The child is said to be doli incapax. The sole issue for the trial judge's determination was whether the prosecution had rebutted the presumption that the appellant was doli incapax. The appellant's counsel conceded that, if the presumption was rebutted in relation to the offence charged in count two, it would follow as a matter of logic that it was also rebutted in relation to the offences charged in counts three and four. The trial judge was satisfied that the circumstances surrounding the commission of the offence charged in count two proved beyond reasonable doubt that the appellant knew his conduct was seriously wrong and therefore that the presumption was rebutted in relation to that offence. His Honour acted on trial counsel's concession in holding that it logically followed that the presumption was rebutted in relation to the offences charged in counts three and four. The appellant was sentenced to an effective sentence of two years and five months' imprisonment with a non-parole period of 10 months. The sentence for 1 Crimes Act 1900 (NSW), s 61M(2). 2 Crimes Act 1900 (NSW), s 66A(1). Bell the offence charged in count four, a fixed term of imprisonment for three months, was made wholly concurrent with the sentence imposed on count three. The appellant appealed against his convictions and sentence to the Court of Criminal Appeal of the Supreme Court of New South Wales (Johnson, Davies and Hamill JJ). The Court of Criminal Appeal was unanimous in concluding that the presumption that the appellant was doli incapax had been rebutted in relation to the offence charged in count two but that it was not rebutted in relation to the offence charged in count four. The appellant's conviction for the latter count was quashed and a verdict of acquittal entered. By majority, the Court of Criminal Appeal held that the trial judge did not err in finding that the presumption that the appellant was doli incapax had been rebutted in relation to the offence charged in count three. The appeal against the appellant's convictions on counts two and three was dismissed. So, too, was the appeal against sentence dismissed. On 21 July 2016, Gageler and Gordon JJ granted the appellant special leave to appeal on two grounds. The first ground contends that the verdicts on counts two and three are unreasonable because the evidence did not establish to the criminal standard that the presumption that the appellant was doli incapax had been rebutted. The second ground contends it was an error for the Court of Criminal Appeal to fail to quash the appellant's conviction for the offence charged in count three on the ground that he had been denied a fair trial. For the reasons to be given, the first ground is made good, which makes it unnecessary to address the second ground. The appeal must be allowed, the convictions quashed and verdicts of acquittal entered. Before turning to the evidence to explain why that is so, it is convenient to say something more about the presumption of doli incapax. Doli incapax The rationale for the presumption of doli incapax is the view that a child aged under 14 years is not sufficiently intellectually and morally developed to appreciate the difference between right and wrong and thus lacks the capacity for mens rea3. The presumption of doli incapax at common law is irrebuttable in the case of a child aged under seven years. From the age of seven years until attaining the age of 14 years it is rebuttable: the prosecution may adduce evidence to prove that the child is doli capax. 3 Hale, The History of the Pleas of the Crown, (1736), vol 1 at 25-28; C (A Minor) v Director of Public Prosecutions [1996] AC 1; R v ALH (2003) 6 VR 276; BP v The Queen [2006] NSWCCA 172. Bell The age at which a child is capable of bearing criminal responsibility for his or her acts has been raised by statute in New South Wales. Under s 5 of the Children (Criminal Proceedings) Act 1987 (NSW) ("the Act"), there is a conclusive presumption that no child under the age of 10 years can be guilty of an offence. The Act does not otherwise affect the operation of the common law presumption of doli incapax. From the age of 10 years until attaining the age of 14 years, the presumption may be rebutted by evidence that the child knew that it was morally wrong to engage in the conduct that constitutes the physical element or elements of the offence. Knowledge of the moral wrongness of an act or omission is to be distinguished from the child's awareness that his or her conduct is merely naughty or mischievous4. This distinction may be captured by stating the requirement in terms of proof that the child knew the conduct was "seriously wrong" or "gravely wrong"5. No matter how obviously wrong the act or acts constituting the offence may be, the presumption cannot be rebutted merely as an inference from the doing of that act or those acts6. To the extent that the decision of the Court of Appeal of the Supreme Court of Victoria in R v ALH7 suggests a contrary approach, it is wrong. The prosecution must point to evidence from which an inference can be drawn beyond reasonable doubt that the child's development is such that he or she knew that it was morally wrong to engage in the conduct. This directs attention to the child's education and the environment in which the child has been raised8. The history of the common law presumption is traced in C (A Minor) v Director of Public Prosecutions9. It appears to have been settled by the first half 4 C (A Minor) v Director of Public Prosecutions [1996] AC 1 at 38; BP v The Queen [2006] NSWCCA 172 at [27]-[28]. 5 R v Gorrie (1918) 83 JP 136; C (A Minor) v Director of Public Prosecutions [1996] AC 1 at 38; Archbold: Criminal Pleading, Evidence & Practice, (1993), vol 1 at 6 R v Smith (Sidney) (1845) 1 Cox CC 260 per Erle J; C (A Minor) v Director of Public Prosecutions [1996] AC 1 at 38; BP v The Queen [2006] NSWCCA 172 at [29]; R v T [2009] AC 1310 at 1331 [16] per Lord Phillips of Worth Matravers. (2003) 6 VR 276 at 298 [86]; see also at 280-281 [19], 281 [24]. 8 B v R (1958) 44 Crim App R 1 at 3-4 per Lord Parker CJ; C (A Minor) v Director of Public Prosecutions [1996] AC 1 at 8 citing F v Padwick [1959] Crim L R 439 Bell Writing the middle of of the 17th century that it applied to children aged under 14 years10. The presumption served to ameliorate the harshness of the criminal law. Its survival in the case of children above the age of criminal responsibility but under 14 years has attracted criticism11. last century, Professor Glanville Williams observed that the paradoxical result of its operation is that "the more warped the child's moral standards, the safer he is from the correctional treatment of the criminal law"12. Putting to one side that the offence under s 66A(1) of the Crimes Act 1900 (NSW) carried a maximum penalty of imprisonment for 25 years, the "correctional treatment" accompanying a conviction for the offence includes registration for a Class 1 offence under the Child Protection (Offenders Registration) Act 2000 (NSW)13. In the case of an accused who is a child at the date of the offending conduct, it is not self-evident that the policy of the law is outmoded in requiring that the prosecution prove the child understood the moral wrongness of the conduct. the In R v M, Bray CJ commenced his analysis of the nature of the knowledge required to rebut the presumption of doli incapax by considering whether it is knowledge that the act is contrary to law, or is wrong judged by the standard of the ordinary person or is wrong according to the child's subjective and perhaps idiosyncratic ethical standards14. His Honour drew an analogy with proof of insanity under the second limb of the M'Naghten Rules, which requires knowledge that the act is wrong according to the principles of reasonable men15. The analogy is apt insofar as the knowledge in each case is of the wrongness of 10 C (A Minor) v Director of Public Prosecutions [1996] AC 1 at 24 citing Sir Edward Coke. 11 The Law Commission, Codification of the Criminal Law: A Report to the Law Commission, Law Com No 143, (1985) at 100 [11.22]; C (A Minor) v Director of Public Prosecutions [1996] AC 1 at 25-26. 12 Williams, "The Criminal Responsibility of Children", [1954] Criminal Law Review 13 Section 14B of the Child Protection (Offenders Registration) Act 2000 (NSW) provides that the reporting period for a child offender is half the period that would otherwise apply. 14 (1977) 16 SASR 589 at 590-591. 15 (1977) 16 SASR 589 at 591 citing Stapleton v The Queen (1952) 86 CLR 358 at 375 per Dixon CJ, Webb and Kitto JJ; [1952] HCA 56. Bell the act as a matter of morality and not law16. There is, however, in the case of the child defendant, the further dimension of proof of knowledge of serious wrongness as distinct from mere naughtiness. What suffices to rebut the presumption that a child defendant is doli incapax will vary according to the nature of the allegation and the child. A child will more readily understand the seriousness of an act if it concerns values of which he or she has direct personal experience. For example, a child is likely better able to understand control of his or her own possessions and the theft of others' property compared to offences such as damaging public property, fare evading, receiving stolen goods, fraud or forgery. Answers given in the course of a police interview may serve to prove the child possessed the requisite knowledge. In other cases, evidence of the child's progress at school and of the child's home life will be required. It has been said that the closer the child defendant is to the age of 10 the stronger must be the evidence to rebut the presumption17. Conversely, the nearer the child is to the age of 14, the less strong need the evidence be to rebut the presumption18. The difficulty with these statements is that they are apt to suggest that children mature at a uniform rate. The only presumption which the law makes in the case of child defendants is that those aged under 14 are doli incapax. Rebutting that presumption directs attention to the intellectual and moral development of the particular child. Some 10-year-old children will possess the capacity to understand the serious wrongness of their acts while other children aged very nearly 14 years old will not. The evidence The offence charged in count two occurred on an occasion when the appellant had been left in charge of the complainant and two other younger siblings while their father was at work. The complainant and another brother were fighting over who could play with the brother's "stuff". The appellant locked the complainant in a room as punishment. The complainant demanded to be let out. The appellant went into the room and said "if you wanna come out, you gotta let me do this to ya". He put a condom on his penis, took hold of the 16 See R v Chaulk [1990] 3 SCR 1303 at 1320. 17 R (A Child) v Whitty (1993) 66 A Crim R 462 at 465; DK v Rooney unreported, Supreme Court of New South Wales, 3 July 1996 per McInerney J. 18 R (A Child) v Whitty (1993) 66 A Crim R 462 at 465; DK v Rooney unreported, Supreme Court of New South Wales, 3 July 1996 per McInerney J. Bell complainant and threw him onto a bed, pulled the complainant's pants and underpants down and inserted his penis into the complainant's anus and commenced intercourse. The complainant was crying and protesting, saying "no, [RP], no". The appellant put his hand over the complainant's mouth. When the appellant heard the sound of an adult returning to the home, he withdrew his penis and said to the complainant "don't say nothin'". The offence charged in count three took place a few weeks later. The appellant and the complainant had been left alone at their father's workplace. The appellant took the complainant to an office where the appellant exposed his penis. The complainant "went to run away" but the appellant was blocking the door. The complainant "went to call out for" his sister, but the appellant took hold of him and put him face down on a pile of clothing on the floor. The appellant then pulled the complainant's pants down and commenced to have anal intercourse with him. This continued for two or three minutes until the appellant heard their father returning to the office. The offence charged in count four occurred on an occasion when the complainant and the appellant were watching a DVD while their father was out of the room. The appellant put his hand on the complainant's penis on the outside of the complainant's clothing and rubbed it for approximately five minutes. The complainant then said that he was "starting to get sick of this" and the appellant stopped. Apart from such inferences as may be drawn from the circumstances of the offences, the only evidence concerning the appellant's intellectual and moral development at the date of the offences was contained in two reports tendered by the prosecution at the request of the appellant's counsel. The first, a Job Capacity Assessment Report, was prepared in connection with the appellant's eligibility for a social security benefit. It was based on an assessment of the appellant conducted when he was 17 years old. The report referred to the results of an IQ test carried out on the appellant by a psychologist. The appellant obtained a score of 70-79, placing him in the "borderline range of intellectual functioning". He was described as having "moderate difficulty in social/occupational functioning" and as requiring supervision in daily activities. The appellant was placed on a disability support pension. The second was a report prepared by Mr Champion, a clinical psychologist, who assessed the appellant when he was aged 18 years. The purpose of the assessment was to determine the appellant's fitness to plead in relation to charges pending against him that are not the subject of these proceedings. Mr Champion also administered an IQ test to the appellant. The appellant achieved an overall score at the top of the borderline disabled range, Bell placing him in the eighth percentile in terms of functioning. There was a fair measure of variation in the appellant's scores on the various sub-scales of the test. Mr Champion was left with the impression that the appellant's educational and social deprivation may have contributed to his low scores, together with his "innate limitation". Mr Champion reported that the appellant's "upbringing appears to have been marked by a measure of turmoil and dysfunction". The appellant had completed primary education and commenced secondary education at a public high school. He was transferred from that school to a special school in or about Year 9 as the result of behavioural difficulties. The appellant repeated Year 9 and commenced Year 10 but did not complete the year. Mr Champion described the appellant at the date of the report as "a fairly naΓ―ve and unsophisticated young man, whose emotional and behavioural control may at times fluctuate, and who may at times tend to be overwhelmed by events". Comments made by the appellant and the appellant's father suggested to Mr Champion "some fairly unsatisfactory aspects of [the appellant's] upbringing (exposure to violence, possibly being a victim of molestation, exposure to family law type disputes etc), which have probably contributed to [the appellant's] difficulties in coping with the vicissitudes of life". The trial judge's reasons At the trial, the parties were agreed that the evidence concerning the appellant's use of the condom was equivocal with respect to his capacity to understand the moral wrongness of his acts. Accordingly, the trial judge put the evidence of the condom to one side in determining whether the presumption that the appellant was doli incapax had been rebutted. His Honour found that the appellant was most likely of "very low intelligence" at the date of the offence charged in count two and, for this reason, to have had a lesser appreciation of the seriousness of his conduct. Nonetheless, his Honour was satisfied that the circumstances surrounding the commission of the offence established beyond reasonable doubt that the appellant knew that what he was doing was seriously wrong. The circumstances to which his Honour referred were: the use of force; the placement of the hand over the complainant's mouth; the complainant's evident distress; the breaking off of the act of intercourse when an adult returned to the home; and the instruction to the complainant to say "nothin'". Bell The Court of Criminal Appeal Each member of the Court of Criminal Appeal rejected the contention that the verdict on count two was unreasonable. Davies J, with whose reasons on this issue Johnson J agreed, considered the distinction between knowledge of the moral wrongness of conduct and an understanding that conduct is simply naughty to be largely a matter of impression19. Contrary to the way the matter had been argued before the trial judge, in the Court of Criminal Appeal both parties invited the Court to take into account the appellant's use of the condom, although they differed in what use should be made of the evidence20. On the appellant's behalf, it was submitted that it indicated sexualised behaviour which was consistent with finding that he may not have realised that his behaviour was wrong21. The prosecution submitted that the use of the condom evidenced the appellant's "preparation for, and knowledge of, wrongdoing"22. Davies J held that the proper approach to assessing whether the trial judge's finding was unreasonable was to disregard the evidence of the condom23. His Honour said the approach might have been different had there been evidence that was simply not mentioned by the trial judge: an inquiry whether, on all of the evidence, the verdict was unreasonable must entail a consideration of all of the evidence that was before the trier of fact24. However, his Honour said, where evidence had been expressly disregarded by the trial judge, the Court of Criminal Appeal would be "substituting its own view for that of the trial judge by considering evidence that he has effectively excluded"25. Davies J considered the act of penile/anal intercourse to be "obviously wrong"26, and this strengthened the conclusion that the presumption had been rebutted. 19 RP v The Queen (2015) 90 NSWLR 234 at 245 [53]. 20 RP v The Queen (2015) 90 NSWLR 234 at 245 [55]. 21 RP v The Queen (2015) 90 NSWLR 234 at 245 [55]. 22 RP v The Queen (2015) 90 NSWLR 234 at 245 [55]. 23 RP v The Queen (2015) 90 NSWLR 234 at 248 [68]. 24 RP v The Queen (2015) 90 NSWLR 234 at 248 [69]. 25 RP v The Queen (2015) 90 NSWLR 234 at 248 [69]. 26 RP v The Queen (2015) 90 NSWLR 234 at 248 [70]. Bell Hamill J considered that the presumption had been rebutted in relation to count two, taking into account circumstances including the use of force, the complainant's evident distress, the covering of the complainant's mouth and the instruction to the complainant not to tell27. The Court of Criminal Appeal was divided on whether the trial judge was right to reason, as a matter of logic, that if the presumption was rebutted in relation to count two it was also rebutted in relation to the remaining counts. Each of their Honours recognised the need to prove the appellant's knowledge of the moral wrongness of his act in relation to each count. Johnson and Davies JJ, in separate reasons, each placed emphasis on the finding that the appellant knew the serious wrongness of the act of intercourse charged in count two. Johnson J explained that this was not to apply "some automatic consequence" but to recognise that the issue is considered in the context of the developing understanding of a child, which takes into account the child's previous acts, knowledge and experience28. Here, the offence charged in count three included evidence of the complainant's clear desire not to participate in intercourse. Davies J considered that it could not rationally be inferred that because the act was carried out less forcefully or with less resistance from the complainant on the occasion charged in count three, the appellant did not believe it was seriously wrong in light of his conduct on the occasion charged in count two29. Hamill J, in dissent, observed that while the act was the same in counts two and three, almost all the features relied on for the conclusion that the appellant knew the act was seriously wrong on the occasion charged in count two were not present on the occasion charged in count three. Hamill J, correctly, held that the concession made on the appellant's behalf, as to the logical consequence of a finding that the presumption was rebutted in relation to count two, should not have been made30. The conviction on count three was tainted by error of law. His Honour was unable to conclude that the appellant's conviction on count three was inevitable31. Indeed, taking into account the appellant's youth and 27 RP v The Queen (2015) 90 NSWLR 234 at 258 [140]. 28 RP v The Queen (2015) 90 NSWLR 234 at 236 [5]. 29 RP v The Queen (2015) 90 NSWLR 234 at 249 [78]. 30 RP v The Queen (2015) 90 NSWLR 234 at 260 [150]. 31 RP v The Queen (2015) 90 NSWLR 234 at 262 [155]. Bell intellectual difficulties, Hamill J was left with a reasonable doubt as to whether the appellant knew that what he was doing was seriously wrong in a moral sense on the occasion charged in count three32. As the evidence at trial was wholly documentary, there was no question of the trial judge having enjoyed an advantage not experienced by the appellate court; Hamill J held that the verdict on count three was unreasonable and his Honour would have quashed the conviction and entered a verdict of acquittal33. The submissions The appellant argues for a requirement of a correlation between the child's knowledge of the moral wrongness of the act and the prohibition that is breached. The offence, contrary to s 66A(1), of which the appellant was convicted was punishable by a maximum sentence of 25 years' imprisonment. The circumstances on which the prosecution relied to establish the appellant's knowledge of the moral wrongness of his act were those tending to establish his knowledge that the complainant was not consenting to the intercourse, which of itself constitutes an offence of lesser objective seriousness34. The concern of the law, so the argument goes, is not with criminal responsibility at large, but with criminal responsibility for particular offences carrying particular penalties. In the case of many offences, the identification of the act to which the child's knowledge must relate may be uncontroversial. However, the position is said to be less clear in the case of sexual offences: sexual intercourse itself not being morally wrong, the appellant submits that it is necessary to identify the feature of the intercourse that is the subject of the proscription. Thus, the appellant maintains that it was incumbent on the prosecution to prove his understanding that it was morally wrong to sexually interfere with a child. The requirement arises, the appellant submits, because at the heart of the attribution of criminal responsibility is a concern with "particular offences that carry particular penalties". There is no incongruity in fastening criminal responsibility on a child for doing an act which the child knows to be morally wrong even though the child 32 RP v The Queen (2015) 90 NSWLR 234 at 263 [162]. 33 RP v The Queen (2015) 90 NSWLR 234 at 262 [155]. 34 The offence of having sexual intercourse with another person without that other person's consent knowing that the other person does not consent is punishable by a maximum sentence of imprisonment of 14 years under s 61I of the Crimes Act 1900 (NSW). Bell does not know that the circumstances in which the act is done enliven liability for one or more than one offence. The prosecution sought to demonstrate, from the circumstances in which the intercourse occurred, the appellant's knowledge that it was morally wrong to have sexual intercourse with the complainant: the complainant did not consent to the intercourse and he made his non-consent evident. The appellant's invocation of the evidence of non-consent in the context of the differing penalties for sexual offences is a distraction. The evidence of the complainant's distress, and other signs of his non-consent, was capable of proving that the appellant knew that engaging in sexual intercourse with the complainant was seriously wrong in a moral sense. There is a deal more force to the appellant's second argument, which is that it is open to doubt, in the absence of evidence to the contrary, the reasoning capacity of an 11-year-old to comprehend not only that another is unwilling to go along with his wishes, but also that it is morally wrong to impose those wishes in violation of the personal autonomy of another. This, it is submitted, is particularly so in respect of another prepubescent child over whom, by virtue of the fraternal relationship, the older child is in a position to exert some physical authority. The respondent supports Davies J's analysis of the rebuttal of the presumption in relation to the offence charged in count two. In addition to the circumstances to which his Honour referred, the respondent points to the trust placed in the appellant by his father in leaving the younger children in his care, and to the fact that the offence was committed in circumstances in which the appellant had sequestered the complainant away from other children and prevented the complainant from calling out to them. While naughty conduct may be carried on away from the gaze of parents, the respondent submits that there will normally be no reason to obscure it from the view of other siblings or playmates. The desire to avoid all witnesses is put forward as a basis for the inference that the appellant appreciated the serious wrongness of his conduct. Reverting to the position adopted at the trial, the respondent submits that the evidence of the use of the condom gives rise to competing inferences and is "incapable of giving rise to a reasonable hypothesis consistent with innocence". Was the presumption rebutted? The starting point, which the respondent's submissions are apt to overlook, is that the appellant is presumed in law to be incapable of bearing criminal responsibility for his acts. The onus was upon the prosecution to adduce evidence to rebut that presumption to the criminal standard. The trial judge found the appellant was of "very low intelligence" and possessed a lesser appreciation of the seriousness of his conduct. The prosecution did not adduce Bell any evidence apart from the circumstances of the offences to establish that, despite these deficits, the appellant's development was such that he understood the moral wrongness of his acts. It is common enough for children to engage in forms of sexual play and to endeavour to keep it secret, since even very young children may appreciate that it is naughty to engage in such play. The appellant's conduct went well beyond ordinary childish sexual experimentation, but this does not carry with it a conclusion that he understood his conduct was seriously wrong in a moral sense, as distinct from it being rude or naughty. The evidence of the appellant's use of the condom is significant. Given the way the appeal was conducted, it was an error for Davies and Johnson JJ to disregard it35 in determining whether, upon the whole of the evidence, it was open to the trial judge to be satisfied that the presumption had been rebutted and the appellant's guilt of the offence charged in count two established beyond reasonable doubt36. The fact that a child of 11 years and six months knew about anal intercourse, and to use a condom when engaging in it, was strongly suggestive of his exposure to inappropriate sexually explicit material or of having been himself the subject of sexual interference. Mr Champion's report did not serve to allay the latter suggestion. Mr Champion referred to comments made by the appellant and the appellant's father which he considered to be indicative of unsatisfactory aspects of the appellant's upbringing. Mr Champion considered it possible that the appellant was the victim of sexual molestation. Despite this possibility, which was plainly pertinent to the only issue at the trial, the prosecution did not call the father or other persons responsible for the appellant's care to give an account of the environment in which he was raised. The conclusion drawn below that the appellant knew his conduct, in having sexual intercourse with his younger sibling, was seriously wrong was largely based on the inferences that he knew his brother was not consenting and that he must have observed his brother's distress. It cannot, however, be assumed that a child of 11 years and six months understands that the infliction of hurt and distress on a younger sibling involves serious wrongdoing. While the evidence of the appellant's intellectual limitations does not preclude a finding that the 35 RP v The Queen (2015) 90 NSWLR 234 at 236 [1] per Johnson J, 248 [69] per 36 M v The Queen (1994) 181 CLR 487 at 493 per Mason CJ, Deane, Dawson and Toohey JJ; [1994] HCA 63. Bell presumption had been rebutted, it does point to the need for clear evidence that, despite those limitations, he possessed the requisite understanding. A statement from the appellant's mother was in evidence in relation to the offence charged in count one, of which the appellant was acquitted. The trial judge did not have regard to that statement in relation to the remaining offences and that ruling was not the subject of contention in the Court of Criminal Appeal. In relation to the offences charged in counts two and three, there was no evidence about the environment in which the appellant had been raised or from which any conclusion could be drawn as to his moral development. The circumstance that at the age of 11 years and six months he was left at home alone in charge of his younger siblings does not so much speak to his asserted maturity as to the inadequacy of the arrangements for the care of the children, including the appellant. No evidence of the appellant's performance at school as an 11-year-old was adduced. In the absence of evidence on these subjects, it was not open to conclude that the appellant, with his intellectual limitations, was proved beyond reasonable doubt to have understood that his conduct, charged in counts two and three, in engaging in sexual intercourse with his younger brother was seriously wrong in a moral sense. Orders For these reasons there should be the following orders: Appeal allowed. Set aside orders 4, 5 and 6 of the orders of the Court of Criminal Appeal of the Supreme Court of New South Wales made on 26 August 2015 and in their place order that: appeal allowed with respect to counts 2 and 3; and quash the convictions on counts 2 and 3 and enter verdicts of acquittal. GAGELER J. Doli incapax β incapacity for crime β is a common law presumption in the same way as innocence is a common law presumption. To establish that a child under the age of 14 years has committed an offence in a jurisdiction in which the common law presumption continues to apply, the prosecution must prove more than the elements of the offence. The prosecution must prove beyond reasonable doubt that the child understood that the child's conduct which constituted the offence was seriously wrong by normal adult standards. That understanding cannot be inferred from the fact that the child engaged in the conduct which constituted the offence; it must be proved by other evidence. That other evidence might be or include evidence of the circumstances or manner of the conduct. That other evidence might also be or include evidence of the development or disposition of the child. Before the trial judge, the prosecution and the defence were agreed that the evidence of RP's use of a condom at the age of 11 years, to have anal intercourse with his younger brother at their home and at the place of their father's work, was equivocal as to whether RP understood that having intercourse with his brother was seriously wrong by normal adult standards. The trial judge and all members of the Court of Criminal Appeal put the evidence to one side. In my opinion, they were correct to do so. Without greater context, I do not think that use of a condom alone suggests that RP had been exposed to influences that impeded the development of his capacity to tell right from wrong. I agree with the prosecution submission in the appeal to this Court that no relevant inference can be drawn from it. Leaving that evidence to one side, I nevertheless agree with the plurality in this Court that the prosecution evidence was insufficient to discharge the onus of proof. That is to say, I am left β after considering the totality of the evidence that was adduced at the trial β with a reasonable doubt about whether RP understood that the sexual intercourse which he had with his brother was seriously wrong by normal adult standards, with the result that I consider that the appeal to the Court of Criminal Appeal should have been allowed on the ground that the trial judge's finding of guilt (which s 133(1) of the Criminal Procedure Act 1986 (NSW) gives the same effect as a verdict of a jury) could not be supported by the evidence within the meaning of s 6(1) of the Criminal Appeal Act 1912 (NSW)37. Both the trial judge and the Court of Criminal Appeal placed considerable weight on the fact that the transcript of a police interview with the brother allowed inferences to be drawn from the circumstances of the first act of sexual intercourse in which RP engaged with his brother at their home. They were that RP: knew that his brother did not want to engage in intercourse, used force on 37 Filippou v The Queen (2015) 256 CLR 47 at 53-54 [12], 75 [82]; [2015] HCA 29. his brother, was aware that his brother was crying and in pain, put his hand over his brother's mouth to stop him calling out so as to avoid detection, persisted knowing that he was causing great distress to his brother, stopped only when an adult returned to the home, and afterwards told his brother not to say anything. Plainly, those inferences were properly drawn. And, plainly, they showed RP's conduct to go beyond anything which might be considered to be within a normal range of childish behaviour and showed RP to have understood that he would be subjected to some form of punishment if he was found out. Whatever conclusion might be drawn from that evidence of the circumstances of RP's conduct about RP's understanding that the sexual intercourse which he then and later had with his brother was seriously wrong by normal adult standards were those circumstances to be considered alone, that evidence must be considered in the context of other evidence bearing on the mental capacity of RP. The report of the clinical psychologist, Mr Champion, prepared in relation to RP's fitness to plead when he was 18 years of age, assessed him as then having an "overall ability at the top of the borderline disabled range". The job capacity assessment report emanating from the Commonwealth Department of Human Services described him at around the same age as having an intellectual disability and as having been assessed as having an IQ which exceeded those of approximately only 4% of adults his age. The information in those reports exposes the existence, and highlights the significance, of a gap in the evidence as to the state of RP's cognitive development some seven years before. Whether he then had the capacity to understand that the conduct to which he subjected his brother was seriously wrong by normal adult standards is a real and unanswered question. |
HIGH COURT OF AUSTRALIA IN THE MATTER OF QUESTIONS REFERRED TO THE COURT OF DISPUTED RETURNS PURSUANT TO SECTION 376 OF THE COMMONWEALTH ELECTORAL ACT 1918 (CTH) CONCERNING SENATOR THE HON MATTHEW CANAVAN IN THE MATTER OF QUESTIONS REFERRED TO THE COURT OF DISPUTED RETURNS PURSUANT TO SECTION 376 OF THE COMMONWEALTH ELECTORAL ACT 1918 (CTH) CONCERNING IN THE MATTER OF QUESTIONS REFERRED TO THE COURT OF DISPUTED RETURNS PURSUANT TO SECTION 376 OF THE COMMONWEALTH ELECTORAL ACT 1918 (CTH) CONCERNING MS LARISSA WATERS IN THE MATTER OF QUESTIONS REFERRED TO THE COURT OF DISPUTED RETURNS PURSUANT TO SECTION 376 OF THE COMMONWEALTH ELECTORAL ACT 1918 (CTH) CONCERNING IN THE MATTER OF QUESTIONS REFERRED TO THE COURT OF DISPUTED RETURNS PURSUANT TO SECTION 376 OF THE COMMONWEALTH ELECTORAL ACT 1918 (CTH) CONCERNING THE HON BARNABY JOYCE MP IN THE MATTER OF QUESTIONS REFERRED TO THE COURT OF DISPUTED RETURNS PURSUANT TO SECTION 376 OF THE COMMONWEALTH ELECTORAL ACT 1918 (CTH) CONCERNING SENATOR THE HON FIONA NASH IN THE MATTER OF QUESTIONS REFERRED TO THE COURT OF DISPUTED RETURNS PURSUANT TO SECTION 376 OF THE COMMONWEALTH ELECTORAL ACT 1918 (CTH) CONCERNING Re Canavan Re Ludlam Re Waters Re Roberts [No 2] Re Nash Re Xenophon [2017] HCA 45 27 October 2017 C11/2017, C12/2017, C13/2017, C14/2017, C15/2017, C17/2017 and ORDER Matter No C11/2017 The questions referred to the Court of Disputed Returns by the President of the Senate in his letter dated 9 August 2017 be answered as follows: Question (a) Whether, by reason of s 44(i) of the Constitution, there is a vacancy in the representation of Queensland in the Senate for the place for which Senator [the Hon] Matthew Canavan was returned? Answer There is no vacancy by reason of s 44(i) of the Constitution in the representation of Queensland in the Senate for the place for which Senator the Hon Matthew Canavan was returned. Question (b) If the answer to Question (a) is "yes", by what means and in what manner that vacancy should be filled? Answer Does not arise. Question (c) What directions and other orders, if any, should the Court make in order to hear and finally dispose of this reference? Answer No further order is required. Question (d) What, if any, orders should be made as to the costs of these proceedings? Answer No further order is required. Matter No C12/2017 The questions referred to the Court of Disputed Returns by the President of the Senate in his letter dated 9 August 2017 be answered as follows: Question (a) Whether by reason of s 44(i) of the Constitution there is a vacancy in the representation of Western Australia in the Senate for the place for which Senator Ludlam was returned? Answer There is a vacancy by reason of s 44(i) of the Constitution in the representation of Western Australia in the Senate for the place for which Mr Scott Ludlam was returned. Question (b) If the answer to Question (a) is "yes", by what means and in what manner that vacancy should be filled? Answer The vacancy should be filled by a special count of the ballot papers. Any directions necessary to give effect to the conduct of the special count should be made by a single Justice. Question (c) If the answer to Question (a) is "no", is there a casual vacancy in the representation of Western Australia in the Senate within the meaning of s 15 of the Constitution? Answer Does not arise. Question (d) What directions and other orders, if any, should the Court make in order to hear and finally dispose of this reference? Answer Unnecessary to answer. Matter No C13/2017 The questions referred to the Court of Disputed Returns by the President of the Senate in his letter dated 9 August 2017 be answered as follows: Question (a) Whether by reason of s 44(i)[] of the Constitution there is a vacancy in the representation of Queensland in the Senate for the place for which Senator Waters was returned? Answer There is a vacancy by reason of s 44(i) of the Constitution in the representation of Queensland in the Senate for the place for which Ms Larissa Waters was returned. Question (b) If the answer to Question (a) is "yes", by what means and in what manner that vacancy should be filled? Answer The vacancy should be filled by a special count of the ballot papers. Any directions necessary to give effect to the conduct of the special count should be made by a single Justice. Question (c) If the answer to Question (a) is "no", is there a casual vacancy in the representation of Queensland in the Senate within the meaning of s 15 of the Constitution? Answer Does not arise. Question (d) What directions and other orders, if any, should the Court make in order to hear and finally dispose of this reference? Answer Unnecessary to answer. Matter No C14/2017 The questions referred to the Court of Disputed Returns by the President of the Senate in his letter dated 10 August 2017 be answered as follows: Question (a) Whether by reason of s 44(i) of the Constitution there is a vacancy in the representation of Queensland in the Senate for the place for which Senator Answer There is a vacancy by reason of s 44(i) of the Constitution in the representation of Queensland in the Senate for the place for which Senator Question (b) If the answer to question (a) is "yes", by what means and in what manner that vacancy should be filled? Answer The vacancy should be filled by a special count of the ballot papers. Any directions necessary to give effect to the conduct of the special count should be made by a single Justice. Question (c) What directions and other orders, if any, should the Court make in order to hear and finally dispose of this reference? Answer Unnecessary to answer. Question (d) What, if any, orders should be made as to the costs of these proceedings? Answer Unnecessary to answer. Matter No C15/2017 The questions referred to the Court of Disputed Returns by the Speaker of the House of Representatives in his letter dated 15 August 2017 be answered as follows: Question (a) Whether, by reason of s 44(i) of the Constitution[,] the place of the Member for New England (Mr Joyce) has become vacant? Answer By reason of s 44(i) of the Constitution, the place of the Member for New England, the Hon Barnaby Joyce MP, is vacant. Question (b) If the answer to Question (a) is "yes", by what means and in what manner that vacancy should be filled? Answer There should be a by-election for the election of the Member for New England. Question (c) What directions and other orders, if any, should the Court make in order to hear and finally dispose of this reference? Answer Unnecessary to answer. Question (d) What, if any, orders should be made as to the costs of these proceedings? Answer Unnecessary to answer. Matter No C17/2017 The questions referred to the Court of Disputed Returns by the President of the Senate in his letter dated 5 September 2017 be answered as follows: Question (a) Whether, by reason of s 44(i) of the Constitution, there is a vacancy in the representation of New South Wales in the Senate for the place for which Senator [the Hon] Fiona Nash was returned? Answer There is a vacancy by reason of s 44(i) of the Constitution in the representation of New South Wales in the Senate for the place for which Senator the Hon Fiona Nash was returned. Question (b) If the answer to question (a) is "yes", by what means and in what manner that vacancy should be filled? Answer The vacancy should be filled by a special count of the ballot papers. Any directions necessary to give effect to the conduct of the special count should be made by a single Justice. Question (c) What directions and other orders, if any, should the Court make in order to hear and finally dispose of this reference? Answer Unnecessary to answer. Question (d) What, if any, orders should be made as to the costs of these proceedings? Answer Unnecessary to answer. Matter No C18/2017 The questions referred to the Court of Disputed Returns by the President of the Senate in his letter dated 5 September 2017 be answered as follows: Question (a) Whether by reason of s 44(i) of the Constitution there is a vacancy in the representation of South Australia in the Senate for the place for which Senator Xenophon was returned? Answer There is no vacancy by reason of s 44(i) of the Constitution in the representation of South Australia in the Senate for the place for which Senator Nick Xenophon was returned. Question (b) If the answer to question (a) is "yes", by what means and in what manner that vacancy should be filled? Answer Does not arise. Question (c) What directions and other orders, if any, should the Court make in order to hear and finally dispose of this reference? Answer No further order is required. Question (d) What, if any, orders should be made as to the costs of these proceedings? Answer No further order is required. Representation S P Donaghue QC, Solicitor-General of the Commonwealth with P D Herzfeld, M P Costello and J D Watson appearing on behalf of the Attorney-General of (instructed by Australian Government Solicitor) the Commonwealth D M J Bennett QC with A L Tokley SC, G J D del Villar and A K Flecknoe-Brown appearing on behalf of Senator Canavan (instructed by Stokes Moore) B E Walters QC with E A Bennett and A N P McBeth appearing on behalf of Mr Ludlam and Ms Waters (instructed by FitzGerald and Browne) C R C Newlinds SC with P Kulevski and R J Scheelings appearing on behalf of Senator Roberts (instructed by Holman Webb Lawyers) B W Walker SC with G E S Ng appearing on behalf of Mr Joyce MP and Senator Nash (instructed by Everingham Solomons Solicitors and A L Tokley SC with H M Heuzenroeder and S A McDonald appearing on behalf of Senator Xenophon (instructed by Nick Xenophon & Co Lawyers) R Merkel QC and J T Gleeson SC with E M Nekvapil and S Zeleznikow appearing on behalf of Mr Windsor the reference concerning Mr Joyce MP (instructed by Quinn Emanuel Urquhart & Sullivan) G R Kennett SC with B K Lim appearing as amicus curiae in the references concerning Senators Canavan, Nash and Xenophon (instructed by Australian Government Solicitor) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Re Canavan Re Ludlam Re Waters Re Roberts [No 2] Re Nash Re Xenophon Constitutional law (Cth) β Parliamentary elections β References to Court of Disputed Returns β Where referred persons elected to Commonwealth Parliament β Where evidence to suggest each held dual citizenship at date of nomination for election β Whether each person incapable of being chosen or of sitting as senator or member of House of Representatives by reason of s 44(i) of Constitution β Proper construction of s 44(i) of Constitution β Whether s 44(i) contains implied mental element in relation to acquisition or retention of foreign citizenship β Whether each person subject or citizen of foreign power or entitled to rights or privileges of subject or citizen of foreign power for purposes of s 44(i). Words and phrases β "a subject or a citizen β¦ of a foreign power", "constitutional imperative", "foreign citizenship", "incapable of being chosen", "knowledge", "natural-born", "naturalised", "reasonable steps", "voluntariness", "voluntary act", "wilful blindness". Constitution, ss 16, 34, 44(i), 45(i). Commonwealth Electoral Act 1918 (Cth), ss 163, 376. KIEFEL CJ, BELL, GAGELER, KEANE, NETTLE, GORDON AND EDELMAN JJ. Section 44 of the Constitution relevantly provides: "Any person who: is under any acknowledgment of allegiance, obedience, or adherence to a foreign power, or is a subject or a citizen or entitled to the rights or privileges of a subject or a citizen of a foreign power; β¦ shall be incapable of being chosen or of sitting as a senator or a member of the House of Representatives." Section 45(i) of the Constitution provides that if a senator or a member of the House of Representatives "becomes subject to any of the disabilities mentioned in the last preceding section", his or her place "shall thereupon become vacant." It is settled by authority, and not disputed by any party, that in s 44 the words "shall be incapable of being chosen" refer to the process of being chosen, of which nomination is an essential part1. Accordingly, the temporal focus for the purposes of s 44(i) is upon the date of nomination as the date on and after which s 44(i) applies until the completion of the electoral process. The proceedings Under the Commonwealth Electoral Act 1918 (Cth) any question respecting the qualifications of a senator or a member of the House of Representatives, or respecting a vacancy in either house of the Parliament, may be referred by resolution to the Court of Disputed Returns by the house in which the question arises2. Questions concerning the qualifications of six persons elected as senators at the general election for the Parliament held on 2 July 2016 have been so referred. In each case the principal question is whether by reason of 1 Sykes v Cleary (1992) 176 CLR 77 at 100-101, 108, 130-131, 132; [1992] HCA 60. 2 Commonwealth Electoral Act 1918 (Cth), s 376. See also In re Wood (1988) 167 CLR 145 at 157-162; [1988] HCA 22. Bell Nettle Gordon Edelman s 44(i) of the Constitution there is a vacancy in the place for which the person was returned. The references concern the qualifications of Senator the Hon Matthew Canavan, Mr Scott Ludlam, Ms Larissa Waters, Senator Malcolm Roberts, Senator the Hon Fiona Nash and Senator Nick Xenophon in circumstances in which there is material to suggest that each held dual citizenship at the date he or she nominated for election as a senator. The House of Representatives has referred the Hon Barnaby Joyce MP in circumstances in which there is material to suggest that he held dual citizenship at the date of his nomination for election for the Electoral Division of New England. like questions respecting the qualifications of The subject of reference and the Attorney-General of the Commonwealth is in each case deemed to be a party to the reference pursuant to orders made by Kiefel CJ3. In each reference, Kiefel CJ ordered that the statement of the questions together with all the attachments to the statement transmitted by the President of the Senate or the Speaker of the House of Representatives (as the case may be)4 is evidence on the hearing of the reference. Mr Kennett SC was appointed amicus curiae to act as contradictor on issues of law in the references concerning Senators Canavan, Nash and Xenophon. Mr Antony Windsor was deemed a party to the reference concerning Mr Joyce MP. Mr Ludlam resigned his seat upon learning that he held dual citizenship. Ms Waters resigned her seat upon learning that she held dual citizenship. They were jointly represented on the hearing of the references. The only reference in which there were any contested issues of fact was that concerning Senator Roberts. Those issues were resolved at a hearing before 3 See Commonwealth Electoral Act 1918 (Cth), s 378. 4 See Commonwealth Electoral Act 1918 (Cth), s 377. 5 Re Roberts [2017] HCA 39. Bell Nettle Gordon Edelman The questions referred to this Court, though directed in substance to the issues, same Senators Canavan, Roberts, Nash and Xenophon were as follows: The questions relating three different forms. took "(a) whether, by reason of s 44(i) of the Constitution, there is a vacancy in the representation of [the Senator's State] in the Senate for the place for which [the Senator] was returned; if the answer to question (a) is 'yes', by what means and in what manner that vacancy should be filled; (c) what directions and other orders, if any, should the Court make in order to hear and finally dispose of this reference; and (d) what, if any, orders should be made as to the costs of these proceedings." The questions relating to Mr Joyce MP, whose reference was the only one to come from the House of Representatives, were nearly identical to those of the four Senators mentioned above, except that question (a) asked "whether, by reason of s 44(i) of the Constitution[,] the place of the Member for New England (Mr Joyce) has become vacant". The questions relating to Mr Ludlam and Ms Waters were in slightly different form, reflecting the circumstance that they both resigned their seats in the Senate prior to the references to this Court concerning them. Those questions were as follows: "(a) whether by reason of s 44(i) of the Constitution there is a vacancy in the representation of [the former Senator's State] in the Senate for the place for which [the Senator] was returned; if the answer to Question (a) is 'yes', by what means and in what manner that vacancy should be filled; if the answer to Question (a) is 'no', is there a casual vacancy in the representation of [the former Senator's State] in the Senate within the meaning of s 15 of the Constitution; and (d) what directions and other orders, if any, should the Court make in order to hear and finally dispose of this reference." Bell Nettle Gordon Edelman The principal question turns upon the proper construction of s 44(i) of the Constitution. The competing approaches to the construction of s 44(i) The approach to construction urged by the amicus and on behalf of Mr Windsor gives s 44(i) its textual meaning, subject only to the implicit qualification in s 44(i) that the foreign law conferring foreign citizenship must be consistent with the constitutional imperative underlying that provision, namely, that an Australian citizen not be prevented by foreign law from participation in representative government where it can be demonstrated that the person has taken all steps that are reasonably required by the foreign law to renounce his or her foreign citizenship. Three alternatives to this approach were proposed. Each of these alternatives involves a construction that departs substantially from the text. The minimum required by all three approaches was, as Deane J said in dissent in Sykes v Cleary6, that s 44(i) be construed as "impliedly containing a ... mental element" which informs the acquisition or retention of foreign citizenship. First, the approach of the Attorney-General, adopted by Senators Canavan, Roberts and Xenophon, was that s 44(i) requires that the foreign citizenship be voluntarily obtained or voluntarily retained. implied element of voluntariness was said to import a requirement that the person know or be wilfully blind about his or her foreign citizenship. At some points in the Attorney-General's submissions that awareness of a "considerable, serious or sizeable prospect" or a "real and substantial prospect" of foreign citizenship would be sufficient. it was submitted The This approach was applied by the Attorney-General in a way that drew a distinction between "natural-born" Australians β that is, those who are Australian citizens by the circumstances of their birth β and naturalised Australians. A natural-born Australian would be disqualified if he or she took active steps to become a foreign citizen or, after obtaining the requisite degree of knowledge, failed to take reasonable steps to renounce that citizenship. On the other hand, a naturalised Australian who had not taken all reasonable steps to renounce a foreign citizenship would be deemed to have voluntarily retained that foreign citizenship even if he or she honestly believed that naturalisation had involved (1992) 176 CLR 77 at 127. Bell Nettle Gordon Edelman renouncing the foreign citizenship. That was said to be because a naturalised Australian citizen could be expected, in the ordinary case, to have the requisite knowledge of his or her pre-existing foreign citizenship. Secondly, the approach urged by Mr Joyce MP and Senator Nash was that s 44(i) requires that foreign citizenship be chosen or maintained. The essence of this approach was knowledge of the foreign citizenship. It was submitted that a person cannot make a choice to retain or renounce any foreign citizenship if he or she has no knowledge of that citizenship. Although the degree of knowledge that was said to apply in this context did not include constructive knowledge, it did include wilful blindness. Thirdly, the approach urged by Mr Ludlam and Ms Waters was that s 44(i) requires that a person be "put on notice". On this approach, the person would be disqualified under s 44(i) if he or she had knowledge of facts that, in the mind of a reasonable person taking a properly diligent approach to compliance with the Constitution, ought to call into question the belief that he or she is not a subject or citizen of a foreign power and prompt proper inquiries. Knowledge would include, at least, knowledge of "primary facts" that would prompt inquiry and, at most, all of the knowledge of the person. By way of a variation on the Attorney-General's principal theme, it was said that s 44(i) applies only to a person who has by voluntary act acquired foreign citizenship, or exercised a right pursuant to the status of foreign citizenship, the latter being a way of describing an overt act of retention of foreign citizenship. The approach urged by the amicus and on behalf of Mr Windsor must be accepted. It adheres most closely to the ordinary and natural meaning of the language of s 44(i). It also accords with the views of a majority of the Justices in Sykes v Cleary, the authority of which was accepted by all parties. A consideration of the drafting history of s 44(i) does not warrant a different conclusion. Further, that approach avoids the uncertainty and instability that attend the competing approaches. The text and structure of s 44(i) As to the text and structure of s 44(i), in Sykes v Cleary Brennan J said that "[p]utting acknowledgment of adherence to a foreign power to one side", Bell Nettle Gordon Edelman s 44(i) consists of three categories of disqualification, each of which describes a source of a duty on the part of a candidate for parliamentary office7: "The first category covers the case where such a duty arises from an acknowledgment of the duty by the candidate, senator or member. The second category covers the case where the duty is reciprocal to the status conferred by the law of a foreign power. The third category covers the case where the duty is reciprocal to the rights or privileges conferred by the law of a foreign power. The second category refers to subjects or citizens of a foreign power β subject being a term appropriate when the foreign power is a monarch of feudal origin; citizen when the foreign power is a republic. β¦ The third category β¦ covers those who, though not foreign nationals, are under the protection of a foreign power as though they were subjects or citizens of a foreign power." The amicus submitted that s 44(i) has two limbs, not three as was suggested by Brennan J. He contended that the first limb disqualifies a person who "is under any acknowledgment" of the stated kind, and the second limb disqualifies a person who "is a subject or a citizen or entitled to the rights or privileges of a subject or a citizen of a foreign power". In the first limb, the words "under any acknowledgment" capture any "person who has formally or informally acknowledged allegiance, obedience or adherence to a foreign power and who has not withdrawn or revoked that acknowledgment"8. Within this limb the word "acknowledgment" connotes an act involving an exercise of the will of the person concerned. In contrast, in the second limb of s 44(i), the words "subject", "citizen" and "entitled to the rights" connote a state of affairs involving the existence of a status or of rights under the law of the foreign power9. There is evident force in the submission of the amicus that s 44(i) consists of only two limbs: the verb "is" is used in s 44(i) only twice, and there is a (1992) 176 CLR 77 at 109-110. 8 Nile v Wood (1987) 167 CLR 133 at 140; [1987] HCA 62. 9 Cf Sykes v Cleary (1992) 176 CLR 77 at 107, 110, 131. Bell Nettle Gordon Edelman comma followed by the disjunctive "or" at the end of the first limb but not within the second limb. For present purposes, however, little turns upon this difference between the analysis of Brennan J in Sykes v Cleary and that of the amicus; indeed, Brennan J dealt with his "second and third categories" together10. Each approach highlights the distinction expressly drawn in s 44(i) between a voluntary act of allegiance on the part of the person concerned on the one hand, and a state of affairs existing under foreign law, being the status of subjecthood or citizenship or the existence of the rights or privileges of subjecthood or citizenship, on the other. For the sake of clarity, these reasons will use the two-limb classification adopted by the amicus. The purpose of s 44(i) In Sykes v Cleary, the plurality, comprising Mason CJ, Toohey and McHugh JJ, said that s 44(i) was adopted to ensure "that members of Parliament did not have a split allegiance"11. Brennan J explained that the purpose of s 44(i) "is to ensure that no candidate, senator or member of the House of Representatives owes allegiance or obedience to a foreign power or adheres to a foreign power."12 Deane J said that the "whole purpose" of s 44(i) is to "prevent persons with foreign loyalties or obligations from being members of the Australian Parliament."13 It is evident that the first limb of s 44(i) pursues this purpose by looking to the conduct of the person concerned. The second limb of s 44(i) does not look to conduct manifesting an actual split in the allegiance of the person concerned or the person's subjective feelings of allegiance. On the contrary, it operates to 10 (1992) 176 CLR 77 at 110. 11 (1992) 176 CLR 77 at 107, quoting Australia, Senate Standing Committee on Constitutional and Legal Affairs, The Constitutional Qualifications of Members of Parliament, (1981) at 10 [2.14]. 12 (1992) 176 CLR 77 at 109. 13 (1992) 176 CLR 77 at 127. Bell Nettle Gordon Edelman disqualify the candidate whether or not the candidate is, in fact, minded to act upon his or her duty of allegiance. In the course of arguing that a candidate cannot be disqualified by the second limb of s 44(i) if he or she does not know that he or she has the status of a foreign citizen, Senior Counsel for Mr Joyce MP and Senator Nash made the rhetorical point that "[y]ou cannot heed a call that you cannot hear and you will not hear the call of another citizenship if you do not know you are a citizen of that other country." The answer to that point is that, as a matter of the ordinary meaning of the second limb of s 44(i), proof of actual allegiance as a state of mind is not required. Rather, as Brennan J explained in Sykes v Cleary, the second limb is concerned with the existence of a duty to a foreign power as an aspect of the status of citizenship14. The drafting history of s 44(i) The drafting history of s 44(i) does not support identification of a narrower purpose sufficient to constrain the ordinary and natural meaning of the language ultimately chosen. The first official draft of the Constitution Bill prepared for the National Australasian Convention in 1891 contained two identical clauses which provided respectively that the place of a senator and a member of the House of Representatives "shall become vacant β¦ [i]f he takes an oath or makes a declaration or acknowledgement of allegiance, obedience, or adherence to a Foreign Power, or does any act whereby he becomes a subject or citizen, or entitled to the rights or privileges of a subject or citizen of a Foreign Power"15. The language was derived from the British North America Act 1840 (Imp)16 as replicated in the New Zealand Constitution Act 1852 (Imp)17 and the 14 (1992) 176 CLR 77 at 109-110. 15 Williams, The Australian Constitution: A Documentary History, (2005) at 139, 16 3 & 4 Vict c 35, s 7. 17 15 & 16 Vict c 72, ss 36, 50. Bell Nettle Gordon Edelman British North America Act 1867 (Imp)18 and as substantially replicated in the constitutions of each of the Australian colonies which were to become States19. Within a week of the first official draft, following the voyage of the Lucinda, the two clauses were recast to take the form in which the predecessors of ss 44(i) and 45(i) came to be adopted without substantial debate in the final draft of the Constitution Bill to emerge from the National Australasian Convention in 1891. The clauses as so recast each applied to both senators and members of the House of Representatives. Departing from the Imperial and colonial precedents, they were no longer confined to vacating places of parliamentarians by reference to acts done by them after election. They extended also to disqualifying for election as parliamentarians persons who had done any of the same acts before election. The first clause, the predecessor of s 44(i), provided20: "Any person ... [w]ho has taken an oath or made a declaration or acknowledgment of allegiance, obedience, or adherence to a Foreign Power, or has done any act whereby he has become a subject or citizen or entitled to the rights or privileges of a subject or a citizen of a Foreign Power ... shall be incapable of being chosen or of sitting as a Senator or Member of the House of Representatives until the disability is removed by a grant of a discharge ... or otherwise." 18 30 Vict c 3, s 31(2). 19 Constitution Act 1854 (Tas) (18 Vict No 17), ss 13, 24; New South Wales Constitution Act 1855 (Imp) (18 & 19 Vict c 54), Sched 1, ss 5, 26; Victoria Constitution Act 1855 (Imp) (18 & 19 Vict c 55), Sched 1, s 24; Constitution Act 1855-6 (SA), ss 12, 25; Constitution Act 1867 (Q) (31 Vict No 38), s 23; Western Australia Constitution Act 1890 (Imp) (53 & 54 Vict c 26), Sched 1, s 29(3). 20 Official Report of the National Australasian Convention Debates, (Sydney), 9 April 1891 at 950, cl 46. Bell Nettle Gordon Edelman The second clause, the predecessor of s 45(i), provided21: "If a Senator or Member of the House of Representatives ... [t]akes an oath or makes a declaration or acknowledgment of allegiance, obedience, or adherence to a Foreign Power, or does any act whereby he becomes a subject or citizen, or entitled to the rights or privileges of a subject or citizen, of a Foreign Power ... his place shall thereupon become vacant." The clauses remained in substantially identical form in the successive drafts of the Constitution Bill prepared for and considered and approved by the National Australasian Convention at its Adelaide session in April 189722 and again by the Australasian Federal Convention at its Sydney session in September 189723 when a motion that the words "until parliament otherwise provides" be inserted at the beginning of the predecessor of s 44 was negatived24. The clauses were then recast to take their final form which became the text of ss 44(i) and 45(i) in the revised version of the Constitution Bill presented soon after the beginning of the Melbourne session of the Australasian Federal Convention in March 189825. That final recasting of the two clauses occurred as part of a large number of amendments prepared by the Convention's drafting committee in the period between the Sydney session and the Melbourne session. Mr Barton, the chairman of the committee, described them as "drafting" amendments not intended to alter the "sense" of the draft as approved by the 21 Official Report of the National Australasian Convention Debates, (Sydney), 9 April 1891 at 950, cl 47. 22 Official Report of the National Australasian Convention Debates, (Adelaide), 15 April 1897 at 736, 23 April 1897 at 1211, 1218 and 1228. 23 Official Record of the Debates of the Australasian Federal Convention, (Sydney), 21 September 1897 at 1022; Williams, The Australian Constitution: A Documentary History, (2005) at 765. 24 Official Record of the Debates of the Australasian Federal Convention, (Sydney), 21 September 1897 at 1014-1015. 25 Williams, The Australian Constitution: A Documentary History, (2005) at 849. Bell Nettle Gordon Edelman Convention at the Sydney session26. The drafting amendments were made after receipt by the drafting committee of confidential memoranda from the Colonial Office commenting on the Constitution Bill in the form approved by the Convention at the Adelaide session. One of those memoranda had raised as a query, in relation to the clause which was the predecessor of s 44(i), "[s]hould not some provision be made for a person who, after he has acknowledged allegiance to a foreign power, has returned to his old allegiance and made himself again a British subject?"27 Whether or not it is appropriate to have regard to the confidential Colonial Office memorandum, the extent of the redrafting of the predecessors of both ss 44(i) and 45(i) which occurred in the period between the Sydney session and the Melbourne session is such that it cannot adequately be explained as doing no more than responding to that query. When, a few days later, the Australasian Federal Convention came to consider the redrafted clauses in committee of the whole, the redraft of the clause that was to become s 44(i) was agreed to without discussion28. Turning to s 45(i), Mr Isaacs relevantly commented only that "[v]ery good work ha[d] been done by the committee in the attainment of brevity"29. The drafting history demonstrates that the adoption of s 44(i) in its final form was uncontroversial and that the differences between the text that emerged from the Convention in 1891 and the text that emerged from the Convention in 1898 cannot be attributed to any articulated difference in the mischief sought to be addressed by the disqualification it introduced. What the drafting history fails to demonstrate is that the mischief was exhaustively identified in the earlier reference to disqualification arising as a result of an "act" done by a person whereby the person became a subject or citizen, or entitled to the rights or privileges of a subject or citizen, of a foreign power. The earlier reference to an 26 Official Record of the Debates of the Australasian Federal Convention, (Melbourne), 4 March 1898 at 1915. 27 Williams, The Australian Constitution: A Documentary History, (2005) at 727. 28 Official Record of the Debates of the Australasian Federal Convention, (Melbourne), 7 March 1898 at 1931-1942. 29 Official Record of the Debates of the Australasian Federal Convention, (Melbourne), 7 March 1898 at 1942. Bell Nettle Gordon Edelman "act" was obviously drawn from the Imperial and colonial precedents. But the drafting history, beginning in 1891, cannot be treated as indicative of an intention on the part of the framers to cleave particularly closely to those precedents. The the place of a parliamentarian. to vacating precedents were confined Disqualification from being chosen as a parliamentarian was an innovation. There is another aspect of the historical context in which the Constitution was drafted which affirmatively supports the wider purpose of s 44(i) which its language suggests. The addition of disqualification under s 44(i) to qualification under s 34 would, at the time of federation, have been redundant unless disqualification under s 44(i) was capable of applying to a person qualified under s 34. Section 34(ii) required, in 1901 and until the Parliament otherwise provided, that a senator or member of the House of Representatives "must be a subject of the Queen". By operation of the Naturalization Act 1870 (Imp), a subject of the Queen who by voluntary act became a subject or citizen of a foreign state automatically ceased to be a subject of the Queen and was "from and after" that time to "be regarded as an alien"30. A person who by voluntary act had become a subject or citizen of a foreign state was therefore not qualified under s 34(ii). For the second limb of s 44(i) to add anything to s 34(ii), that limb needed to extend beyond acquisition of the status of a subject or citizen of a foreign power by some voluntary act. Subject or citizen β the role of foreign law Whether a person has the status of a subject or a citizen of a foreign power necessarily depends upon the law of the foreign power. That is so because it is only the law of the foreign power that can be the source of the status of citizenship or of the rights and duties involved in that status. In Sykes v Cleary, Mason CJ, Toohey and McHugh JJ said that "[a]t common law, the question of whether a person is a citizen or national of a particular foreign State is determined according to the law of that foreign State"31, the common law rule being, in part, a recognition of the principle of international law that "it is for every sovereign State β¦ to settle by its own legislation the rules relating to the 30 33 Vict c 14, s 6. 31 (1992) 176 CLR 77 at 105-106. Bell Nettle Gordon Edelman acquisition of its nationality"32. Statements to similar effect were also made in Sykes v Cleary by Brennan, Deane, Dawson and Gaudron JJ respectively33. In Sue v Hill, Gleeson CJ, Gummow and Hayne JJ referred with approval to the reasoning of Brennan and Gaudron JJ in Sykes v Cleary34 in confirming the proposition that s 44(i) looks to the relevant foreign law to determine whether a candidate is a foreign citizen35. In Sue v Hill, Gaudron J also accepted the proposition that "the question whether a person is a citizen of a foreign country is, as a general rule, answered by reference to the law of that country."36 Thus, the majority of the Court in Sue v Hill adhered to the position taken on this point in Sykes v Cleary. That having been said, all members of the Court in Sykes v Cleary accepted that s 44(i) does not contemplate that foreign law can be determinative of the operation of s 44(i)37. An Australian court will not apply s 44(i) to disqualify by reason of foreign citizenship where to do so would be to undermine the system of representative and responsible government established under the Constitution. In this regard, s 16 of the Constitution provides: "The qualifications of a senator shall be the same as those of a member of the House of Representatives." Section 34 provides: "Until the Parliament otherwise provides, the qualifications of a member of the House of Representatives shall be as follows: 32 Nottebohm Case (Liechtenstein v Guatemala) (Second Phase) [1955] ICJ Rep 4 at 33 (1992) 176 CLR 77 at 109-112, 127-128, 131, 135. 34 (1992) 176 CLR 77 at 112-114, 135-136. 35 (1999) 199 CLR 462 at 486-487 [47]; [1999] HCA 30. 36 (1999) 199 CLR 462 at 529 [175]. 37 (1992) 176 CLR 77 at 107-108, 112-113, 126-127, 131-132, 137. Bell Nettle Gordon Edelman he must be of the full age of twenty-one years, and must be an elector entitled to vote at the election of members of the House of Representatives, or a person qualified to become such elector, and must have been for three years at the least a resident within the limits of the Commonwealth as existing at the time when he is chosen; he must be a subject of the Queen, either natural-born or for at least five years naturalized under a law of the United Kingdom, or of a Colony which has become or becomes a State, or of the Commonwealth, or of a State." Since shortly after federation, Parliament has made provision for the qualification of candidates. Currently, those requirements are set out in s 163 of the Commonwealth Electoral Act, pursuant to which an Australian citizen enrolled to vote is qualified to stand for election. It is the evident intention of the Constitution that those of the people of the Commonwealth who are qualified to become senators or members of the House of Representatives are not, except perhaps in the case of a person "attainted of treason" within the meaning of s 44(ii), to be irremediably disqualified. They have the entitlement to participate in the representative government which the Constitution establishes. the constitutional imperative. The purpose of s 44(i) neither requires nor allows the denial by foreign law of that entitlement. this was described as In oral argument Consistently with that view, the Court in Sykes v Cleary recognised that an Australian citizen who is also a citizen of a foreign power will not be prevented from participating in the representative form of government ordained by the Constitution by reason of a foreign law which would render an Australian citizen irremediably incapable of being elected to either house of the Commonwealth Parliament38. In this regard, Mason CJ, Toohey and McHugh JJ said39: "It would be wrong to interpret the constitutional provision in such a way as to disbar an Australian citizen who had taken all reasonable steps to 38 (1992) 176 CLR 77 at 131. 39 (1992) 176 CLR 77 at 107. See also at 113. Bell Nettle Gordon Edelman divest himself or herself of any conflicting allegiance β¦ [Section 44(i)] β¦ could scarcely have been intended to disqualify an Australian citizen for election to Parliament on account of his or her continuing to possess a foreign nationality, notwithstanding that he or she had taken reasonable steps to renounce that nationality." It is convenient to note here that their Honours were not suggesting that a candidate who could be said to have made a reasonable effort to comply with s 44(i) was thereby exempt from compliance. As Brennan J explained40: "It is not sufficient β¦ for a person holding dual citizenship to make a unilateral declaration renouncing foreign citizenship when some further step can reasonably be taken which will be effective under the relevant foreign law to release that person from the duty of allegiance or obedience. So long as that duty remains under the foreign law, its enforcement β perhaps extending to foreign military service β is a threatened impediment to the giving of unqualified allegiance to Australia. It is only after all reasonable steps have been taken under the relevant foreign law to renounce the status, rights and privileges carrying the duty of allegiance or obedience and to obtain a release from that duty that it is possible to say that the purpose of s 44(i) would not be fulfilled by recognition of the foreign law." The focus of concern of the majority in Sykes v Cleary is upon the impediment posed by foreign law to an Australian citizen securing a release from foreign citizenship notwithstanding reasonable steps on his or her part to sever the foreign attachment. As Dawson J said41: "I agree with Mason CJ, Toohey and McHugh JJ, and with Brennan J, that s 44(i) should not be given a construction that would unreasonably result in some Australian citizens being irremediably incapable of being elected to either House of the Commonwealth Parliament." 40 (1992) 176 CLR 77 at 113-114. 41 (1992) 176 CLR 77 at 131. Bell Nettle Gordon Edelman Knowledge of foreign citizenship as an element of s 44(i) Section 44(i) does not say that it operates only if the candidate knows of the disqualifying circumstance. It is a substantial departure from the ordinary and natural meaning of the text of the second limb to understand it as commencing: "Any person who: (i) β¦ knows that he or she is a subject or a citizen β¦" Further, to accept that proof of knowledge of the foreign citizenship is a condition of the disqualifying effect of s 44(i) would be inimical to the stability of representative government. Stability requires certainty as to whether, as from the date of nomination, a candidate for election is indeed capable of being chosen to serve, and of serving, in the Commonwealth Parliament42. This consideration weighs against an interpretation of s 44(i) which would alter the effect of the ordinary and natural meaning of its text by introducing the need for an investigation into the state of mind of a candidate. The approach urged on behalf of the Attorney-General echoes that of Deane J in Sykes v Cleary. Deane J considered that while only the first limb of s 44(i) expressly requires some form of voluntary manifestation of allegiance, the balance of s 44(i) should also be understood as incorporating a mental element so that the provision in its entirety applies "only to cases where the relevant status, rights or privileges have been sought, accepted, asserted or acquiesced in by the person concerned."43 It had been submitted for Mr Kardamitsis, the third respondent in Sykes v Cleary, that "only a person who is presently subject to a continuing allegiance to a foreign power brought about by some voluntary act, or one whose real and effective nationality is foreign, would be disqualified."44 Deane J accepted the 42 See Re Culleton (No 2) (2017) 91 ALJR 311 at 321-322 [57]; 341 ALR 1 at 13; [2017] HCA 4; Re Day (No 2) (2017) 91 ALJR 518 at 535 [97]; 343 ALR 181 at 201; [2017] HCA 14. 43 (1992) 176 CLR 77 at 127. 44 (1992) 176 CLR 77 at 89. Bell Nettle Gordon Edelman argument that a "qualifying element β¦ must be read into the second limb of s 44(i)"45. His Honour referred to the qualifying element in relation to a "whose origins lay in, or who has had some past association with, some foreign country which asserts an entitlement to refuse to allow or recognize his or her genuine and unconditional renunciation of past allegiance or citizenship. Accordingly β¦ the qualifying element which must be read into the second limb of s 44(i) extends not only to the acquisition of the disqualifying relationship by a person who is already an Australian citizen but also to the retention of that relationship by a person who has subsequently become an Australian citizen. A person who becomes an Australian citizen will not be within the second limb of s 44(i) if he or she has done all that can reasonably be expected of him or her to extinguish any former relationship with a foreign country to the extent that it involves the status, rights or privileges referred to in the sub-section." Deane J concluded that Mr Kardamitsis, who had publicly renounced his allegiance to any country other than Australia, had "done all that he could reasonably be expected to do for the purposes of the Constitution and laws of this country to renounce and extinguish his Greek nationality and any rights or privileges flowing from it."47 The approach taken by Deane J draws no support from the text and structure of s 44(i): indeed, Deane J used the first limb of the provision to alter the ordinary and natural meaning of the second. Not only does that approach alter the plain meaning of the second limb of s 44(i), it renders that limb otiose because, so understood, it adds nothing to the first limb in terms of the practical pursuit of the purpose of s 44(i). In addition, the approach of Deane J places naturalised Australian citizens in a position of disadvantage relative to natural-born Australian citizens. A majority in Sykes v Cleary did not countenance such a distinction. Mason CJ, 45 (1992) 176 CLR 77 at 127-128. 46 (1992) 176 CLR 77 at 127-128. 47 (1992) 176 CLR 77 at 129. Bell Nettle Gordon Edelman Toohey and McHugh JJ expressly adverted to the circumstance that "s 44(i) finds its place in a Constitution which was enacted at a time, like the present, when a high proportion of Australians, though born overseas, had adopted this country as their home" without drawing any distinction between them in terms of the application of s 44(i)48. And neither Brennan J nor Dawson J was disposed to draw any distinction between natural-born Australian citizens and naturalised Australian citizens for the purposes of the application of s 44(i). In this, their Honours were, with respect, clearly correct. The text of s 34 of the Constitution draws a distinction between natural-born and naturalised Australians for the purpose of qualifying to be a candidate for election; in contrast, s 44(i) draws no distinction between foreign citizenship by place of birth, by descent or by naturalisation. The absence from the text of s 44(i) of any such distinction cannot be attributed to inadvertence on the part of the framers, both because the concept of citizenship by descent was commonplace at the time of federation, and because of the express provision in s 3449. It was submitted on behalf of Mr Windsor that the operation of the constitutional guarantee of single-minded loyalty provided by s 44(i) should not be made to depend upon the diligence which a candidate brings to the observance of the provision. There is force in this submission. To introduce an issue as to the extent of the knowledge obtained by a candidate and the extent of the candidate's efforts in that regard is to open up conceptual and practical uncertainties in the application of the provision. These uncertainties are apt to undermine stable representative government. At the conceptual level, questions would necessarily arise as to the nature and extent of the knowledge that is necessary before a candidate, or a sitting member for the purposes of s 45(i), will be held to have failed to take reasonable steps to free himself or herself of foreign citizenship. In this regard, the state of a person's knowledge can be conceived of as a spectrum that ranges from the faintest inkling through to other states of mind such as suspicion, reasonable 48 (1992) 176 CLR 77 at 107. 49 See Singh v The Commonwealth (2004) 222 CLR 322 at 340-341 [30], 359 [81], 392 [179], 413-414 [251]; [2004] HCA 43. Bell Nettle Gordon Edelman belief and moral certainty to absolute certainty50. If one seeks to determine the point on this spectrum at which knowledge is sufficient for the purposes of ss 44(i) and 45(i), one finds that those provisions offer no guidance in fixing this point. That is hardly surprising given that these provisions do not mention the knowledge of a person or the person's ability to obtain knowledge as a criterion of their operation. The conceptual difficulty may be illustrated by considering the following questions. Does a candidate who has been given advice that he or she is "probably" a foreign citizen know that he or she is a foreign citizen for the purposes of s 44(i)? Is the position different if the effect of the advice is that there is "a real and substantial prospect" that the candidate is a foreign citizen? Does a candidate in possession of two conflicting advices on the question know that he or she is a foreign citizen for the purposes of s 44(i) only when the advice that he or she is indeed a foreign citizen is accepted as correct by a court? It may be said that the variation on the principal submission of the Attorney-General, with its focus on voluntary acts, has the virtues of eschewing a distinction in principle between natural-born and naturalised Australians and of avoiding the conceptual difficulties associated with interrogating a candidate's knowledge or state of mind. the Attorney-General's approach depends upon the unstable distinction between overt voluntary acts and conscious omissions. The application of the natural and ordinary meaning of s 44(i) serves to avoid the difficulties which attend this unstable distinction. But ultimately the variation The practical problems involved in applying the standard for which Mr Joyce MP and Senator Nash argue would include the difficulties of proving or disproving a person's state of mind. Not the least of these difficulties would be the regrettable possibility of a want of candour on the part of a candidate or sitting member whose interests are vitally engaged. And during the fact-finding process the entitlement of the member to continue to sit in Parliament would be under a cloud. 50 Cf Baden v SociΓ©tΓ© GΓ©nΓ©rale pour Favoriser le DΓ©veloppement du Commerce et de l'Industrie en France SA [1993] 1 WLR 509 at 575-576; [1992] 4 All ER 161 at Bell Nettle Gordon Edelman In addition, on the approach urged on behalf of Mr Joyce MP and Senator Nash, a person who has been elected to Parliament and then discovers that he or she is a foreign citizen is to be allowed a period in which to take reasonable steps to renounce that citizenship before the disqualifying effect of s 44(i) or s 45(i) bites. During that period the person will have, and may well be seen to have, dual citizenship. That state of affairs cannot be reconciled with the purpose of these constitutional guarantees. Finally, while it may be said that it is harsh to apply s 44(i) to disqualify a candidate born in Australia who has never had occasion to consider himself or herself as other than an Australian citizen and exclusively an Australian citizen, nomination for election is manifestly an occasion for serious reflection on this question; the nomination form for candidates for both the Senate and the House of Representatives requires candidates to declare that they are not rendered ineligible by s 44. It is necessary to bear in mind that the reference by a house of Parliament of a question of disqualification can arise only where the facts which establish the disqualification have been brought forward in Parliament. In the nature of things, those facts must always have been knowable. A candidate need show no greater diligence in relation to the timely discovery of those facts than the person who has successfully, albeit belatedly, brought them to the attention of the Parliament. Reasonable steps Section 44(i) is not concerned with whether the candidate has been negligent in failing to comply with its requirements. Section 44(i) does not disqualify only those who have not made reasonable efforts to conform to its requirements. Section 44(i) is cast in peremptory terms. Where the personal circumstances of a would-be candidate give rise to disqualification under s 44(i), the reasonableness of steps taken by way of inquiry to ascertain whether those circumstances exist is immaterial to the operation of s 44(i). The reasons of the majority in Sykes v Cleary do not support the proposition that a person who is a foreign citizen contravenes the second limb of s 44(i) only if that person actually knows that he or she is a foreign citizen and fails to take reasonable steps available to him or her to divest himself or herself of that status under the foreign law. Nor do the reasons of the majority in Sykes v Cleary support the view that a person who is a foreign citizen is not disqualified if, not knowing of that status, he or she fails to take steps to divest himself or herself of that status. Bell Nettle Gordon Edelman Particular reference may be made here to the decision in Sykes v Cleary in relation to the second and third respondents, Mr Delacretaz and Mr Kardamitsis, respectively. Mr Delacretaz, who had been born in Switzerland and was a Swiss citizen from that time, had lived in Australia for more than 40 years before the date for nomination for election to the House of Representatives, and was naturalised as an Australian citizen nearly 32 years before that date. When he was naturalised he renounced all allegiance to any sovereign or state of whom or of which he was a subject or citizen51. Mr Kardamitsis had been born in Greece and from the time of his birth was a Greek citizen. He had lived in Australia for more than 20 years before the date of nomination and he was naturalised more than 17 years before that date. At his naturalisation, he likewise renounced all A majority (Mason CJ, Brennan, Dawson, Toohey and McHugh JJ) held that Mr Delacretaz was disqualified by s 44(i) because, as the plurality said, he53: "omitted to make a demand for release from Swiss citizenship which would have been granted automatically as he has no residence in Switzerland and has been an Australian citizen for thirty-two years. Because he has failed to make such a demand, it cannot be said that he has taken reasonable steps to divest himself of Swiss citizenship and the rights and privileges of such a citizen." The plurality said that Mr Kardamitsis was disqualified by s 44(i) "in the absence of an application for the exercise of the discretion [of the Greek Minister] in favour of releasing [him] from his Greek citizenship, it cannot be said that he has taken reasonable steps to divest himself of Greek citizenship and the rights and privileges of such a citizen." 51 (1992) 176 CLR 77 at 83. 52 (1992) 176 CLR 77 at 84. 53 (1992) 176 CLR 77 at 108. See also at 114, 132. 54 (1992) 176 CLR 77 at 108. See also at 114, 132. Bell Nettle Gordon Edelman Deane and Gaudron JJ, in separate judgments, would have held that the renunciation of any foreign allegiance at the naturalisation ceremonies of Mr Delacretaz and Mr Kardamitsis was sufficient to take each of them out of the disqualification in s 44(i)55. It is evident that this view did not commend itself to the other five Justices, who proceeded on the basis that a unilateral renunciation was not sufficient to terminate the status of citizenship under the foreign law. No member of the majority in Sykes v Cleary said that a candidate who does not know that he or she is a citizen of a foreign country can be said to take reasonable steps to renounce that citizenship by doing nothing at all in that regard. It is true that Dawson J said that what is reasonable will "depend upon such matters as the requirements of the foreign law for the renunciation of the foreign nationality, the person's knowledge of his foreign nationality and the circumstances in which the foreign nationality was accorded to that person."56 His Honour may be taken, consistently with the views expressed by the plurality and by Brennan J, with whom he agreed, to have had in mind cases where not only the tenacity but also the inaccessibility of the foreign law was apt practically to prevent an Australian citizen from exercising the choice to participate in the system of representative government established by the Constitution. It may be that not all foreign states afford their citizens the levels of assistance in relation to the ascertainment and renunciation of their citizenship that is available from states such as most members of the Commonwealth of Nations. Some foreign states may be unwilling or unable to provide necessary information in relation to the ascertainment and means of renunciation of their citizenship. The plurality in Sykes v Cleary said that the steps reasonably available to a candidate to free himself or herself from the ties of foreign citizenship depend on "the situation of the individual, the requirements of the foreign law and the extent of the connexion between the individual and the foreign State"57. The circumstance that Mr Kardamitsis had participated in a naturalisation ceremony in which he had expressly renounced his foreign allegiance was not sufficient to justify the conclusion that he had taken reasonable steps to divest himself of his foreign citizenship because under the foreign law he could have applied for the 55 (1992) 176 CLR 77 at 128-130, 136-137, 139-140. 56 (1992) 176 CLR 77 at 131. 57 (1992) 176 CLR 77 at 108. Bell Nettle Gordon Edelman favourable exercise of a discretion by the appropriate Minister of the Greek government to release him from his citizenship. The application for the favourable exercise of the discretion was a step reasonably open to him. Such a step may be contrasted, for example, with a requirement of foreign law that the citizens of the foreign country may renounce their citizenship only by acts of renunciation carried out in the territory of the foreign power. Such a requirement could be ignored by an Australian citizen if his or her presence within that territory could involve risks to person or property. It is not necessary to multiply examples of requirements of foreign law that will not impede the effective choice by an Australian citizen to seek election to the Commonwealth Parliament. It is sufficient to say that in none of the references with which the Court is concerned were candidates confronted by such obstacles to freeing themselves of their foreign ties. Summary as to the proper construction of s 44(i) The approaches to the construction of s 44(i) urged on behalf of the Attorney-General, Mr Joyce MP and Senator Nash, and Mr Ludlam and Ms Waters are rejected. Section 44(i) operates to render "incapable of being chosen or of sitting" persons who have the status of subject or citizen of a foreign power. Whether a person has the status of foreign subject or citizen is determined by the law of the foreign power in question. Proof of a candidate's knowledge of his or her foreign citizenship status (or of facts that might put a candidate on inquiry as to the possibility that he or she is a foreign citizen) is not necessary to bring about the disqualifying operation of s 44(i). A person who, at the time that he or she nominates for election, retains the status of subject or citizen of a foreign power will be disqualified by reason of s 44(i), except where the operation of the foreign law is contrary to the constitutional imperative that an Australian citizen not be irremediably prevented by foreign law from participation in representative government. Where it can be demonstrated that the person has taken all steps that are reasonably required by the foreign law to renounce his or her citizenship and within his or her power, the constitutional imperative is engaged. We turn now to consider the application of s 44(i) to the facts of each reference. Bell Nettle Gordon Edelman Senator the Hon Matthew Canavan Senator Canavan nominated for election as a senator at the general election for the Parliament held on 2 July 2016. At the time, Senator Canavan believed that he was a citizen of Australia and of no other country. Senator Canavan was returned on 5 August 2016 as an elected senator for Queensland. In issue is whether at the date of his nomination Senator Canavan was a citizen of Italy by descent. Senator Canavan was born in Southport, Queensland in 1980. His father was born in Toowoomba, Queensland. His mother, Maria Canavan, was born in Ayr, Queensland in October 1955. Senator Canavan's only link to Italy is through his maternal grandparents, Gaetano and Rosalia Zanella, both of whom were born in Lozzo di Cadore, Belluno, Italy. In 1951 Gaetano and Rosalia Zanella migrated to Australia and each later became an Australian citizen: Gaetano was naturalised in September 1955 and Rosalia was naturalised in September 1959. By becoming Australian citizens, and by making Australia their place of residence, under Italian law Gaetano and Rosalia Zanella ceased to When Senator Canavan was born, his parents and be Italian citizens. grandparents were Australian citizens and only Australian citizens. Senator Canavan has never visited Italy and has never taken any steps to acquire Italian citizenship. Before 2006, it had not occurred to Senator Canavan that he or his siblings might be Italian citizens. Sometime during that year, his mother told him that he was eligible to apply for Italian citizenship and she gave him some documents to complete if he wished to pursue the matter. Senator Canavan did not wish to become an Italian citizen and he did not complete the documents. He was aware that his brother had taken steps to become an Italian citizen and to acquire an Italian passport. On 18 July 2017, Senator Canavan's mother told him that he may have been registered as an Italian citizen as a result of steps that she had taken to become an Italian citizen. The following day Senator Canavan set in train inquiries to determine his citizenship status under Italian law. On 24 July 2017, he was informed by an Italian consular official that he had been registered as an Italian citizen in 2006. The following day Senator Canavan received written confirmation from the Italian Embassy that his name was registered with the Italian Consulate in Brisbane, that the registration had been "requested by your Bell Nettle Gordon Edelman mother for yourself and for your brother and sister as well" and that his name also appeared in the list of Italians eligible to vote abroad. Senator Canavan was informed that the registration had been received by the Municipality of Lozzo di Cadore on 18 January 2007. A copy of the request was attached to the letter. It is contained in a pro forma document described as "Form for Registration in Register of Italians Resident Abroad β A.I.R.E.". The form provided for the inclusion of information about adult children residing with the registrant. In this section the names and personal details of Senator Canavan's younger sister and brother were set out. In a further section headed "information about married children or who do not reside with you" Senator Canavan's name and personal details were set out. The form was signed by Senator Canavan's mother and dated 15 June 2006. On 31 July 2017, Senator Canavan wrote to the Italian Consulate in Brisbane stating that he was seeking advice on his status and that "[r]egardless of the legitimacy of my Italian citizenship" he wished to renounce any citizenship or registration he had with On 7 August 2017, Senator Canavan attended the Italian Embassy in Canberra and formally renounced any Italian citizenship. The renunciation took effect from 8 August the Italian government. The evidence of Italian citizenship law is contained in the joint report of Maurizio Delfino and Professor Beniamino Caravita di Toritto ("the joint report"), both of whom are practising Italian lawyers. From the joint report it emerges that Senator Canavan's status, if any, as an Italian citizen does not arise from any step taken by his mother in 2006 but rather from the circumstance that his maternal grandmother had not renounced her Italian citizenship at the date of his mother's birth. At the time of Senator Canavan's mother's birth the fact that her mother was an Italian citizen did not confer Italian citizenship on her. Under a law enacted in 1912 ("the 1912 law") only the child of a father who was an Italian citizen became an Italian citizen by birth. Senator Canavan's mother was born in October 1955, a month after her father was naturalised as an Australian citizen. An Italian citizen who acquired the citizenship of a foreign country and who took up residence in the foreign country automatically lost his or her Italian citizenship. At the time of her birth Senator Canavan's mother was an Australian citizen and only an Australian citizen. When Senator Canavan was born in 1980 he was an Australian citizen and only an Australian citizen. The joint report explains that in 1983 the Italian Constitutional Court declared provisions of the 1912 law unconstitutional to the extent that they Bell Nettle Gordon Edelman operated to deny equal treatment to male and female Italians. From the date of the Constitutional Court's decision and with effect from the date the new Italian Constitution came into force (1 January 1948), Italian citizenship passed to a child either of whose parents was an Italian citizen. The effect of the decision was that Senator Canavan's mother became an Italian citizen by birth and, on one view, Senator Canavan became an Italian citizen "retroactively" to the date of his birth. Senator Canavan's mother's marriage to his father in 1979 did not affect any right of Italian citizenship arising from the Constitutional Court's decision. At the time, Italian law provided that a female citizen lost her Italian citizenship on marriage to a foreign citizen provided the husband's citizenship was transmitted to the wife. The provision did not apply to Senator Canavan's mother because she was already an Australian citizen when she married an Australian husband. Italian citizenship is currently governed under a law enacted in 1992, which provides that the child of a parent who is an Italian citizen is an Italian citizen by birth. As will appear, there is a question as to whether registration is merely declaratory of the status of citizen or a condition of the grant of the status in the case of citizenship by descent. The authors of the joint report explain that where a person files an application with supporting documents with an Italian Consulate for registration with A.I.R.E., the Consulate liaises with the Italian municipality in which the applicant's ancestor lived in order to establish "a continuous chain of ancestry". The Consulate sends the applicant's birth certificate to the Italian municipality, which registers the applicant. Registration as a citizen is described as a "separate and more rigorous process". The authors of the joint report conclude that Senator Canavan's mother applied for registration with A.I.R.E. in her own interest and that the registration of Senator Canavan and his siblings occurred at the initiative of the Consulate in Brisbane. Registration with A.I.R.E. is distinguished in the joint report from a request for the declaration of Italian citizenship, which is required to follow the steps set out in a circular issued by the Italian Ministry of Foreign Affairs in 1991 ("the circolare"). The authors of the joint report state that "[o]nly after the request made by the individual for the recognition iure sanguinis of the Italian citizenship has been ascertained to be well grounded, may the consulate issue the relevant certificate of citizenship". They observe that it is not known if "the investigation and controls" referred to in the circolare have been carried out. They state that the A.I.R.E. certificate issued by the Mayor of the Municipality of Bell Nettle Gordon Edelman Lozzo di Cadore "should not per se be considered a recognition of Italian citizenship": under the circolare only the interested party, who must be of age, can apply for citizenship. In the concluding section of the joint report, the authors consider whether the issue of a certificate of citizenship is merely declaratory. They conclude that the more reasonable interpretation of Italian law, in line with the adoption of the "subjective conception of citizenship" under the Italian Constitution, is that the administrative steps described in the circolare (which are expressed to apply to applicants for Italian citizenship arising from events before the commencement of the law of 1992) are matters of substance, amounting to a prerequisite to the "potential" citizenship right being activated. Senator Canavan has not applied for a declaration of Italian citizenship. On the evidence before the Court, one cannot be satisfied that Senator Canavan was a citizen of Italy. The concluding section of the joint report suggests that he was not. Given the potential for Italian citizenship by descent to extend indefinitely β generation after generation β into the public life of an adopted home, one can readily accept that the reasonable view of Italian law is that it requires the taking of the positive steps referred to in the joint report as conditions precedent to citizenship. For these reasons, the first question, namely, whether, by reason of s 44(i) of the Constitution, there is a vacancy in the representation of Queensland in the Senate for the place for which Senator Canavan was returned, is answered "no". Mr Ludlam lodged his nomination as a candidate for election to the Senate for Western Australia with the Australian Electoral Commission on 18 May 2016. At the time of his nomination, Mr Ludlam was unaware that he held any citizenship other than Australian citizenship. Mr Ludlam was returned on 2 August 2016 as an elected senator for Western Australia at the general election for the Parliament held on 2 July 2016. In July 2017, Mr Ludlam's office was contacted by Mr John Cameron, who stated that he had reason to believe that Mr Ludlam may be a citizen of New Zealand as well as of Australia. In consequence of this contact, Mr Ludlam made inquiries for the first time as to whether he was a dual citizen. His dual citizenship was confirmed by the New Zealand High Commission on 10 July Bell Nettle Gordon Edelman 2017. On 14 July 2017, Mr Ludlam wrote to the President of the Senate resigning his position as a senator for Western Australia. Mr Ludlam does not dispute that his citizenship of New Zealand, although unknown to him, disqualified him from being chosen or sitting as a senator. The circumstances of his New Zealand citizenship can be briefly stated. Mr Ludlam was born in Palmerston North, New Zealand in January 1970. His parents left New Zealand in 1973. In October 1978 the family arrived in Perth, Western Australia. Mr Ludlam, his brother and his parents were naturalised as Australian citizens in April 1989. Mr Ludlam believed that upon his naturalisation as an Australian citizen he was exclusively an Australian citizen and that he held no other citizenship. The evidence of New Zealand citizenship law is contained in the report of Mr David Goddard QC, of the New Zealand bar. In summary, at the date of Mr Ludlam's birth, the British Nationality and New Zealand Citizenship Act 1948 (NZ) ("the 1948 NZ Act") governed citizenship in New Zealand. Subject to exceptions to which it is unnecessary to refer, the 1948 NZ Act provided that every person born in New Zealand after its commencement shall be a citizen of New Zealand by birth. The 1948 NZ Act was repealed by the Citizenship Act 1977 (NZ) ("the 1977 NZ Act"), which remains in force today. Mr Ludlam's New Zealand citizenship under the 1948 NZ Act was preserved by the 1977 NZ Act. Under the 1977 NZ Act a New Zealand citizen may lose his or her citizenship by renouncing it or, in limited circumstances, by ministerial order. It is not in question that Mr Ludlam had not lost his New Zealand citizenship at the date he nominated for election to the Senate. Mr Ludlam was incapable of being chosen or sitting as a senator under s 44(i) of the Constitution and so there is a vacancy in the representation of Western Australia in the Senate for the place for which Mr Ludlam was returned. Ms Larissa Waters Ms Waters nominated with the Australian Electoral Commission for election as a senator for Queensland on 9 June 2016. At the time, Ms Waters believed that she was solely an Australian citizen. Ms Waters was returned on 5 August 2016 as an elected senator for Queensland at the general election for the Parliament held on 2 July 2016. Bell Nettle Gordon Edelman Ms Waters was born in February 1977 in Winnipeg, Canada to Australian parents who were living in Canada at the time for study and work purposes. Neither was a permanent resident of Canada. Ms Waters' birth was registered with the Australian High Commission in Ottawa in June 1977. It was not in doubt that Ms Waters was an Australian citizen by descent. In January 1978, as an infant aged 11 months, Ms Waters left Canada with her parents, who were returning to live in Australia. Ms Waters has never held a Canadian passport. She has not visited Canada since leaving it in January 1978. She has always considered herself to be an Australian and has never understood that she owes allegiance to any other country. She has not sought or received consular assistance or any other kind of government assistance from Canada and she has not exercised any rights as a Canadian citizen. Her mother had given her to understand that she would be eligible to apply for Canadian citizenship when she turned 21. On turning 21 in 1998, Ms Waters considered applying for Canadian citizenship but she decided against it. On 14 July 2017, following Mr Ludlam's resignation from the Senate, Ms Waters' father raised with her a concern that her citizenship status may have been affected by her birth in Canada. Ms Waters sought advice from the Clerk of the Senate and from the Canadian authorities. In light of the advice, Ms Waters concluded that she was a Canadian citizen. On 18 July 2017, Ms Waters wrote to the President of the Senate resigning from the Senate with immediate effect. On 27 July 2017, Ms Waters applied to the High Commission of Canada seeking to renounce her Canadian citizenship. On 7 August 2017, Ms Waters received written confirmation from the High Commission of Canada that she had ceased to be a Canadian citizen with effect from 5 August 2017. The evidence of Canadian citizenship law is contained in the report of Mr Lorne Waldman, a practising Canadian lawyer. In summary, at the time of Ms Waters' birth, Canadian citizenship was governed by the Canadian Citizenship Act, RSC 1970, c C-19, which, relevantly, provided that a person born after 31 December 1946 is a natural-born Canadian citizen if the person is born in Canada. Canadian-born children of parents having certain diplomatic connections are excepted from the conferral of Canadian citizenship at birth. There is no suggestion that Ms Waters' parents came within that exception. The Citizenship Act, SC 1974-75-76, c 108 came into force a week after Ms Waters' Bell Nettle Gordon Edelman birth and does not affect her status as a Canadian citizen. The registration of Ms Waters' birth with the Australian High Commission58 did not affect her acquisition of Canadian citizenship. The sole basis on which Ms Waters could lose her citizenship from the date of her birth until June 2014 was by way of renunciation. For a closed period between June 2014 and June 2017 there were limited circumstances in which the government of Canada was empowered to revoke the citizenship of persons born in Canada. These provisions have since been revoked with retroactive effect. Ms Waters maintained her Canadian citizenship until her renunciation of it. Ms Waters was incapable of being chosen or sitting as a senator under s 44(i) of the Constitution, and so there is a vacancy in the representation of Queensland in the Senate for the place for which Ms Waters was returned. Senator Roberts completed the nomination for election as a senator for Queensland on 3 June 2016. He stated that he was an Australian citizen by naturalisation and that he was not by virtue of s 44 of the Constitution incapable of being chosen as a senator. Senator Roberts was returned on 5 August 2016 as an elected senator for Queensland at the general election for the Parliament held on 2 July 2016. The Senate resolved to refer questions to this Court concerning whether there is a vacancy in the representation of Queensland for the place for which Senator Roberts was returned following the submission of documents to the Senate that suggested that Senator Roberts was a citizen of the United Kingdom at the date of his nomination. The reference gave rise to some disputed questions of fact. These were in reasons delivered on 22 September 201759. His Honour follows. summarised Senator Roberts' father was born in Wales in 1923. His mother was born in Queensland in 1918. Around 1946, his father moved to India to work as the manager of a coal mine. His father travelled to Australia around 1954 where he met and married Senator Roberts' mother. After an Australian passport was issued to the mother in September 1954, she and the father moved to uncontroversial evidence the 58 See Australian Citizenship Act 1948 (Cth), s 11 (as at 8 February 1977). 59 Re Roberts [2017] HCA 39. Bell Nettle Gordon Edelman West Bengal. Senator Roberts was born in Disergarh, West Bengal, India in May 1955 and his name was recorded in the High Commissioner's Record of Citizens of the United Kingdom and Colonies. An entry was made around June 1955 on his mother's passport by the Australian Trade Commissioner in Calcutta to allow Senator Roberts, then a child, to travel with his mother. The entry stated that Senator Roberts "is the child of an Australian citizen but has not acquired Australian citizenship". The Roberts family moved to Australia around 1962. In 1974, Senator Roberts, then a student at the University of Queensland, applied to become an Australian citizen and was naturalised as such on 17 May 1974. Evidence of British citizenship law was given by Mr Laurie Fransman QC, who was called as a witness by the Attorney-General, and by Mr Adrian Berry of Counsel, who was called by Senator Roberts. Each of these barristers practises in the United Kingdom specialising in citizenship law. On the basis of their evidence, Keane J found that Senator Roberts was a citizen of the United Kingdom by descent at the time of his nomination for election as a senator60. By virtue of his father's nationality, Senator Roberts was born a "citizen of the United Kingdom and Colonies", the principal form of British nationality in the period 1 January 1949 to 31 December 1982. On 1 January 1983, the British Nationality Act 1981 (UK) ("the BNA 1981") came into force and Senator Roberts became a British citizen by descent. Keane J found that Senator Roberts knew that he did not become an Australian citizen until May 1974 and at the date of his nomination for the Senate Senator Roberts knew that there was at least a real and substantial prospect that prior to May 1974 he had been and that he remained thereafter a citizen of the United Kingdom61. Senator Roberts ceased to be a citizen of the United Kingdom on 5 December 2016, on the registration of his declaration of renunciation of citizenship. Senator Roberts was incapable of being chosen or sitting as a senator under s 44(i) of the Constitution, and so there is a vacancy in the representation of Queensland in the Senate for the place for which Senator Roberts was returned. 60 Re Roberts [2017] HCA 39 at [73]-[74]. 61 Re Roberts [2017] HCA 39 at [116]. Bell Nettle Gordon Edelman The Hon Barnaby Joyce MP Mr Joyce MP nominated for election to the House of Representatives as the member for the electorate of New England on 2 June 2016. His election as the member for New England in the general election for the Parliament held on 2 July 2016 was declared on 15 July 2016. In issue is whether Mr Joyce MP was incapable of being chosen as a member of the House of Representatives by reason of being a citizen of New Zealand. Mr Joyce MP was born in April 1967 at Tamworth Base Hospital, Tamworth, New South Wales. His father was born in Dunedin, New Zealand in 1924. His mother was born in Gundagai, New South Wales in 1930. Mr Joyce MP's father came to Australia in 1947, and undertook studies in veterinary science at the University of Sydney. While at the University of Sydney, Mr Joyce MP's father met his mother and they were married in April 1956. Mr Joyce Snr was naturalised as an Australian citizen in 1978. At that time, he also renounced his New Zealand citizenship. Mr Joyce MP has always known that his father was born in New Zealand. He understood that his father had become an Australian citizen in 1978 and was solely an Australian citizen. Mr Joyce MP grew up on a property outside Tamworth, New South Wales. He was educated at schools in New South Wales and at the University of New England, Armidale. He was a member of the Australian Army Reserve between October 1996 and September 2001. He was elected as a senator for Queensland in 2004. In 2013 he resigned from the Senate and was elected to the House of Representatives as the member for the electorate of New England at the federal election held that year. When Mr Joyce MP nominated for election to the Senate in 2004, he completed a form which referred to s 44(i) of the Constitution. His belief at that time and at the time of nominating for election at the general election held on 2 July 2016 was that s 44(i) had no application to him because he was a citizen of Australia only. In late July 2017, Mr Joyce MP's office received inquiries from the media asking if he was a dual citizen of Australia and New Zealand. Mr Joyce MP had not been aware of the possibility that he held dual citizenship before these inquiries came to his attention. Mr Joyce MP has never applied to become a New Zealand citizen. He has not sought or accepted any privileges as a citizen of New Zealand. Bell Nettle Gordon Edelman On 10 August 2017, Mr Joyce MP met with the New Zealand High Commissioner, who conveyed to him that in the eyes of the New Zealand government he was a citizen of New Zealand by descent. On 12 August 2017, Mr Joyce MP received a memorandum of advice from Mr David Goddard QC, of the New Zealand bar, confirming that under New Zealand law Mr Joyce MP was a citizen of New Zealand by descent. On that day, Mr Joyce MP attended the New Zealand High Commission and completed a declaration of renunciation of New Zealand citizenship. Mr Goddard's advice concerning New Zealand citizenship law as it applies to Mr Joyce MP is part of the evidence on the reference. So, too, is the opinion of Mr Francis Cooke QC, also of the New Zealand bar, who was retained by the solicitors acting for Mr Windsor. Mr Goddard and Mr Cooke are agreed with respect to Mr Joyce MP's status as a citizen of New Zealand from birth until he renounced his citizenship. In summary, the status of "New Zealand citizen" was first provided under the 1948 NZ Act. Relevantly, persons who were British subjects immediately before its commencement and who were born in New Zealand became New Zealand citizens by birth under the 1948 NZ Act. Mr Joyce MP became a New Zealand citizen by descent by virtue of s 7 of the 1948 NZ Act, which provided that a person born after its commencement is a New Zealand citizen by descent if his father was a New Zealand citizen at the time of his birth. Mr Joyce MP's acquisition of New Zealand citizenship by descent did not depend upon registration or other formality. Mr Joyce Snr's renunciation of his New Zealand citizenship in 1978 operated with prospective effect only and did not affect his son's status as a New Zealand citizen. That status could only be lost by renunciation or, in limited circumstances, by ministerial order. Mr Cooke's report describes the main rights enjoyed by New Zealand citizens under New Zealand law, including to enter and live in New Zealand and to hold a New Zealand passport. He also notes that New Zealand citizens living outside New Zealand are amenable to certain of the offences for which the Crimes Act 1961 (NZ) provides. At the date of his nomination Mr Joyce MP was incapable of being chosen or sitting as a member of the House of Representatives because he was a citizen of New Zealand; and so the place of the member for New England in the House of Representatives is vacant. Bell Nettle Gordon Edelman Senator the Hon Fiona Nash Senator Nash nominated for election to the Senate on 1 June 2016. In completing the nomination form, Senator Nash read the text of s 44(i). At the time, she believed that she was a citizen of Australia and of no other country. Senator Nash was returned on 5 August 2016 as a senator for New South Wales at the general election for the Parliament held on 2 July 2016. in May 1965. Her father, in Sydney Raemond Morton, was born in East Lothian, Scotland in 1927. Her mother, Joy Hird, was born in Sydney, New South Wales in January 1928. Her mother travelled to the United Kingdom to work as a doctor when she was aged in her twenties. She met Senator Nash's father in London and the two were married in April 1956 in Essex, England. Following the marriage, Senator Nash's older sisters were born in England. Sometime between 1960 and 1962, Senator Nash's family moved to Australia. Her parents divorced in 1973 when she was eight years old. Thereafter Senator Nash was raised by her mother and had little contact with her father until the later years of his life. As a child, Senator Nash was aware that her father was born in Scotland. She was also aware that her sisters were British citizens, having been born in England. in New South Wales and following completion of her studies she worked with her husband in a mixed farming business in Crowther, New South Wales. She was sworn in as a senator for New South Wales on 1 July 2005 and has served as a senator since that time. On 14 August 2017, following Mr Joyce MP's statement to the House of Representatives concerning his citizenship status, Senator Nash sought advice from the United Kingdom Home Office concerning her status. On 14 August 2017, Senator Nash was advised by an official of the Home Office of his view that she was a British citizen. On 17 August 2017, Senator Nash received a copy of the opinion of Mr Laurie Fransman QC, that she was a British citizen. Before 14 August 2017 Senator Nash did not know that she was a British citizen. It was her belief that if she wished to become a British citizen she would have to apply to have the status conferred on her. Senator Nash has never visited the United Kingdom, nor has she sought or received any privileges from the United Kingdom by reason of her citizenship. On 18 August 2017, Senator Nash completed a declaration renouncing her British citizenship. On 21 August 2017, Senator Nash received confirmation from the Home Office that she is no longer a British citizen. Bell Nettle Gordon Edelman Mr Fransman's advice concerning the law governing British citizenship in its application to Senator Nash forms part of the evidence on the reference. In summary, before 1949, the primary form of British nationality was British subject status. Under the British Nationality and Status of Aliens Act 1914 (UK)62, any person born within the King's dominions and allegiance was deemed to be a natural-born British subject. Following the unification of England and Scotland, Scotland formed part of the Crown's dominions and, generally, birth within the Crown's dominions entailed allegiance to the Crown. Senator Nash's father was born within the Crown's dominions and allegiance and was a natural-born British subject. The British Nationality Act 1948 (UK)63 ("the BNA 1948") made the primary form of British nationality "citizenship of the United Kingdom and Colonies". On its commencement, Senator Nash's father was reclassified as a citizen of the United Kingdom and colonies. The BNA 1948 distinguished between citizens of the United Kingdom and colonies by descent and otherwise than by descent. Senator Nash's father was a citizen of the United Kingdom and colonies otherwise than by descent. His nationality was unaffected by his marriage to an Australian or his migration to Australia. On 1 January 1973, on the commencement of the Immigration Act 1971 (UK) ("the IA 1971"), Senator Nash's father, having been a citizen of the United Kingdom and colonies otherwise than by descent, acquired a new status called "patriality", otherwise known as the right of abode in the United Kingdom64. On 1 January 1983, on the commencement of the BNA 1981, the primary form of British nationality became "British citizenship". At that moment, Senator Nash's father became a British citizen otherwise than by descent65. As a person who was born a legitimate child outside the United Kingdom and colonies to a father who was a citizen of the United Kingdom and colonies otherwise than by descent, Senator Nash became a citizen of the United Kingdom and colonies by descent at birth66. On 1 January 1973, on the commencement of 62 4 & 5 Geo 5 c 17. 63 11 & 12 Geo 6 c 56. 64 Immigration Act 1971 (UK), s 2(1)(a). 65 See British Nationality Act 1981 (UK), s 14. 66 British Nationality Act 1948 (UK), s 5(1). Bell Nettle Gordon Edelman the IA 1971, Senator Nash acquired the right of abode in the United Kingdom67. On 1 January 1983, on the commencement of the BNA 1981, Senator Nash became a British citizen68. At the date of her nomination as a senator for New South Wales, Senator Nash remained a British citizen, having not renounced that status and not having been deprived of it. Senator Nash was incapable of being chosen or sitting as a senator by reason of s 44(i) of the Constitution, and so there is a vacancy in the representation of New South Wales in the Senate for the place for which Senator Nash was returned. Senator Xenophon was returned on 4 August 2016 as a senator for South Australia at the general election for the Parliament held on 2 July 2016. Senator Xenophon has always considered himself to be an Australian. He was born in January 1959 in Toorak Gardens, South Australia. He has resided all his life in Australia and has always been an Australian citizen. He was brought up in a household in which he describes his cultural heritage as Australian of Hellenic descent. He spoke Greek and English at home. He was baptised in the Greek Orthodox faith and regularly attended the Greek Orthodox Church in Norwood, South Australia. His father was born in Cyprus in July 1931. His father emigrated from Cyprus to Australia in 1951 and was naturalised as an Australian citizen in July 1965. Senator Xenophon's mother was born in Greece in January 1928. She emigrated to Australia in 1956 and was naturalised as an Australian citizen in September 1963. At the time of their naturalisation each of Senator Xenophon's parents renounced allegiance to all other foreign sovereigns. In October 1997, Senator Xenophon was elected as a member of the Legislative Council in South Australia. Prior to his first election to the Australian Senate in November 2007, Senator Xenophon considered it prudent, because of his Hellenic background, to renounce any entitlement that he might have to citizenship of Greece or Cyprus. He wrote to the Greek Embassy and the High Commission of Cyprus, in each case renouncing any right of citizenship. It 67 Immigration Act 1971 (UK), s 2(1)(b)(i). 68 British Nationality Act 1981 (UK), s 11(1). Bell Nettle Gordon Edelman is common ground that Senator Xenophon is not a citizen of either Greece or Cyprus. Senator Xenophon was subsequently re-elected to the Australian Senate on 7 September 2013 and 2 July 2016. At no time prior to either election did it cross his mind that he might have some form of British citizenship arising from the fact that Cyprus was a British possession at the time of his father's birth. On 12 August 2017, one or more journalists made inquiries of Senator Xenophon's office as to whether Senator Xenophon was a British citizen. As will appear, Senator Xenophon was a "British overseas citizen" ("BOC") at the date of his nomination for election as a senator for South Australia. On 25 August 2017, Senator Xenophon signed an application to renounce his British overseas citizenship. On 31 August 2017, the United Kingdom Home Office informed Senator Xenophon that he ceased to be a BOC on 30 August 2017. The issue is whether as a BOC Senator Xenophon was incapable of being chosen as a senator because he was "a subject or a citizen of a foreign power" or a person "entitled to the rights or privileges of a subject or a citizen of a foreign power" for the purposes of s 44(i) of the Constitution. The answer is that Senator Xenophon was not disqualified under s 44(i). To explain why that is so it is necessary to describe the incidents of British overseas citizenship. These incidents, and the circumstances in which Senator Xenophon came to acquire the status of BOC under United Kingdom law, are explained in a further report by As has been noted, before 1949, the principal form of British nationality was British subject status, which generally was acquired by virtue of a sufficiently close connection with the Crown's dominions. In the period 1 January 1949 to 31 December 1982 under the BNA 1948, the principal form of British nationality was citizenship of the United Kingdom and colonies. Generally, this status was acquired by virtue of a sufficiently close connection with the United Kingdom and the remaining British colonies. Citizens of the United Kingdom and colonies were not subject to United Kingdom immigration control at the start of the period, although Mr Fransman explains that some became subject to immigration control from 1962. Under the IA 1971, which came into force on 1 January 1973, only a citizen of the United Kingdom and colonies who had the right of abode in the United Kingdom could continue to enter the United Kingdom freely. Bell Nettle Gordon Edelman From 1 January 1983 to date, British nationality law has been principally governed by the BNA 1981, which created three forms of citizenship: British citizenship; British dependent territories citizenship (later renamed British overseas territories citizenship); and British overseas citizenship. All persons who were citizens of the United Kingdom and colonies were reclassified on the commencement of the BNA 1981 within one of the three categories. Generally, those reclassified as British citizens were persons who immediately prior to the commencement of the BNA 1981 were citizens of the United Kingdom and colonies with the right of abode in the United Kingdom. Citizens of the United Kingdom and colonies without the right of abode became British dependent territories citizens if their citizenship was derived from connection with a place which remained a British dependent territory. Remaining citizens of the United Kingdom and colonies without the right of abode were automatically reclassified as BOCs. BOCs were persons who prior to the BNA 1981 were citizens of the United Kingdom and colonies by virtue of a connection with a place that had been a British colony but which had attained independence. The island of Cyprus was annexed by Britain in 1914 and remained a in 1931 when Senator Xenophon's father was born. British possession Senator Xenophon's father was born within the King's dominions and allegiance and was deemed to be a natural-born British subject69. On commencement of the BNA 1948, Senator Xenophon's father was immediately reclassified as a citizen of the United Kingdom and colonies otherwise than by descent70. The father's status as a citizen of the United Kingdom and colonies without the right of abode was unaffected by his naturalisation as an Australian citizen. Arrangements with respect to nationality were agreed within the framework of the Treaty Concerning the Establishment of the Republic of Cyprus entered on 16 August 1960. Annex D to the treaty, which sets out the arrangements, has the force of law in the United Kingdom by virtue of its inclusion as a Schedule to the British Nationality (Cyprus) Order 196071. Applying father, this Order Mr Fransman advises that the father did not cease to be a citizen of the United the provisions of 69 British Nationality and Status of Aliens Act 1914 (UK), s 1(1)(a). 70 British Nationality Act 1948 (UK), s 12(1)(a). Bell Nettle Gordon Edelman Kingdom and colonies otherwise than by descent when Cyprus became independent because he was not ordinarily resident in Cyprus in the five years prior to 16 August 1960. Senator Xenophon's father did not have the right of abode in the United Kingdom under the IA 1971 or at any time before 1983, when British nationality law was again revised. On the commencement of the BNA 1981, Senator Xenophon's father was automatically reclassified as a BOC. At the time of Senator Xenophon's birth in 1959, for the purposes of British nationality law, Australia was an independent Commonwealth country. Under the BNA 1948, citizenship of the United Kingdom and colonies passed automatically to the legitimate child of a father who was a citizen of the United Kingdom and colonies otherwise than by descent72. Therefore, Senator Xenophon became a citizen of the United Kingdom and colonies by descent at birth. Senator Xenophon did not have the right of abode in the United Kingdom under the IA 1971, when that Act came into force on 1 January 1973, and he did not acquire that right after that date. On 1 January 1983, as a citizen of the United Kingdom and colonies without the right of abode in the United Kingdom and without a specified connection with a territory which on that date remained a colony, Senator Xenophon was automatically reclassified as a BOC. Senator Xenophon has not been issued with a BOC passport and has never received British consular protection or other consular services. There is no question that Senator Xenophon was a BOC at the date he nominated for election as a senator for South Australia. While under domestic law British overseas citizenship is treated as a form of British nationality, Mr Fransman explains that it is a residuary form of nationality that differs from British citizenship in important respects: importantly, a BOC does not have the right of abode in the United Kingdom. The right of abode includes the right to enter and to reside in the country of nationality. As Mr Fransman observes, the right of abode is one of the main characteristics of a national under international law. In this regard, unlike a British citizen, a BOC may only enter the United Kingdom by satisfying the requirements of immigration control. It appears that in 2002 British citizenship was extended to include those BOCs who did not 72 British Nationality Act 1948 (UK), s 5(1). Bell Nettle Gordon Edelman possess other citizenship. The extension did not apply to Senator Xenophon, who has at all times possessed Australian citizenship. Senator Xenophon's status, until he renounced it, was that of a BOC having no right of abode in the United Kingdom. A further respect in which Mr Fransman states that the incidents, privileges and obligations of a BOC differ from those of a British citizen is in the nature of the duty of loyalty: a person who is registered as a BOC is not required to pledge loyalty to the United Kingdom. This is by way of contrast with the pledge that is required of a person who is registered as a British citizen. Mr Fransman considers that a BOC does not owe loyalty to the United Kingdom per se but that he or she does owe loyalty or allegiance to Her Majesty the Queen. He does not express a concluded view on whether the allegiance is owed to Her Majesty at large or to Her Majesty in right of the United Kingdom, although he inclines to the latter view. The position with respect to Senator Xenophon is less clear in light of a change in practice. Mr Fransman assumes that the duty of loyalty of a person who became a BOC by reclassification on 1 January 1983, as Senator Xenophon did, is the same as the duty of loyalty of a person who registered as a BOC under the BNA 1981. Mr Fransman considers that, while today an Australian citizen registering as a BOC would be required to take an oath to Her Majesty in right of the United Kingdom, under previous practice this would not have been required because an Australian was already a citizen of a country of which the Queen was Head of State. While the date of the change in practice is not stated, as at the date Senator Xenophon was reclassified it appears that had he applied to be registered as a BOC he would not have been required to take an oath of allegiance to Her Majesty the Queen in right of the United Kingdom. In the event, Senator Xenophon has never applied to be registered as a BOC, nor has he sworn any oath of loyalty or allegiance as a BOC. To observe that British overseas citizenship is a juridical relationship between the individual and the United Kingdom, as Mr Fransman describes it, is not to conclude that it is a relationship which for the purposes of s 44(i) renders the BOC a citizen of a foreign power. No party contended that the fact that the foreign power designates a status as that of "citizen" is determinative without consideration of the rights, privileges and obligations conferred under the law of the foreign power. The status of BOC distinctly does not confer the rights or privileges of a citizen as that term is generally understood: a BOC does not have the right to enter or reside in the United Kingdom. Critically, taking into account the purpose of s 44(i), which is to ensure that members of the Parliament do not Bell Nettle Gordon Edelman have split allegiance, it does not appear that Senator Xenophon's status as a BOC entailed any reciprocal obligation of allegiance to the United Kingdom per se or to Her Majesty the Queen in right of the United Kingdom. For the purposes of s 44(i), Senator Xenophon was not a subject or a citizen of the United Kingdom at the date of his nomination and election as a senator. Nor was he entitled to the rights and privileges of a subject or citizen of the United Kingdom. Accordingly, there is no vacancy in the representation of South Australia in the Senate for the place for which Senator Xenophon was returned. Filling the vacancies On the proper construction of s 44(i), it operated to render Senator Nash, Senator Roberts, Mr Ludlam, Ms Waters and Mr Joyce MP incapable of being chosen at the 2016 election. In each of the references concerning Senators Nash and Roberts, and Ms Waters and Mr Ludlam, the question arises as to the order that should be made to fill the resulting vacancy in the Senate. In this regard, it was not suggested that the taking of a further poll was necessary; and there is no reason to suppose that a special count of the ballots would "result in a distortion of the voters' real intentions"73 rather than a reflection of "the true legal intent of the voters so far as it is consistent with the Constitution and the [Commonwealth Electoral Act]"74. Accordingly, in each of those cases, votes cast "above the line" in favour of the party that nominated the candidate should be counted in favour of the next candidate on that party's list. In the reference concerning Mr Joyce MP, it was common ground, and consistent with authority75, that in the event that Mr Joyce MP was incapable of 73 Sykes v Cleary (1992) 176 CLR 77 at 102. See also Free v Kelly (1996) 185 CLR 296 at 302-304; [1996] HCA 42. 74 In re Wood (1988) 167 CLR 145 at 166. 75 Sykes v Cleary (1992) 176 CLR 77 at 102, 108, 130-131, 132; Free v Kelly (1996) 185 CLR 296 at 303-304. Cf In re Wood (1988) 167 CLR 145 at 165-166. Bell Nettle Gordon Edelman being chosen as a member of the House of Representatives, the election of Mr Joyce MP was void, and a by-election must be held in order to elect the member for New England. Conclusions In the reference concerning Senator Canavan, the questions should be answered as follows: There is no vacancy by reason of s 44(i) of the Constitution in the representation of Queensland in the Senate for the place for which Senator the Hon Matthew Canavan was returned. (b) Does not arise. (c) No further order is required. (d) No further order is required. In the reference concerning Mr Ludlam, the questions should be answered as follows: There is a vacancy by reason of s 44(i) of the Constitution in the representation of Western Australia in the Senate for the place for which Mr Scott Ludlam was returned. The vacancy should be filled by a special count of the ballot papers. Any directions necessary to give effect to the conduct of the special count should be made by a single Justice. (c) Does not arise. (d) Unnecessary to answer. In the reference concerning Ms Waters, the questions should be answered as follows: There is a vacancy by reason of s 44(i) of the Constitution in the representation of Queensland in the Senate for the place for which Ms Larissa Waters was returned. Bell Nettle Gordon Edelman The vacancy should be filled by a special count of the ballot papers. Any directions necessary to give effect to the conduct of the special count should be made by a single Justice. (c) Does not arise. (d) Unnecessary to answer. In the reference concerning Senator Roberts, the questions should be answered as follows: There is a vacancy by reason of s 44(i) of the Constitution in the representation of Queensland in the Senate for the place for which Senator The vacancy should be filled by a special count of the ballot papers. Any directions necessary to give effect to the conduct of the special count should be made by a single Justice. (c) Unnecessary to answer. (d) Unnecessary to answer. In the reference concerning Mr Joyce MP, the questions should be answered as follows: By reason of s 44(i) of the Constitution, the place of the Member for New England, the Hon Barnaby Joyce MP, is vacant. There should be a by-election for the election of the Member for New England. (c) Unnecessary to answer. (d) Unnecessary to answer. In the reference concerning Senator Nash, the questions should be answered as follows: Bell Nettle Gordon Edelman There is a vacancy by reason of s 44(i) of the Constitution in the representation of New South Wales in the Senate for the place for which Senator the Hon Fiona Nash was returned. The vacancy should be filled by a special count of the ballot papers. Any directions necessary to give effect to the conduct of the special count should be made by a single Justice. (c) Unnecessary to answer. (d) Unnecessary to answer. In the reference concerning Senator Xenophon, the questions should be answered as follows: There is no vacancy by reason of s 44(i) of the Constitution in the representation of South Australia in the Senate for the place for which Senator Nick Xenophon was returned. (b) Does not arise. (c) No further order is required. (d) No further order is required. |
HIGH COURT OF AUSTRALIA APPELLANT AND THE QUEEN RESPONDENT [2013] HCA 28 19 June 2013 ORDER Appeal dismissed. On appeal from the Supreme Court of Queensland Representation C A Ronalds SC and J K Kirk SC with S E Pritchard SC and A L McAvoy for the appellant (instructed by Aboriginal & Torres Strait Islander Legal Service (Qld)) W Sofronoff QC, Solicitor-General of the State of Queensland with S A McLeod and A D Scott for the respondent (instructed by Crown Solicitor (Qld)) Interveners J T Gleeson SC, Acting Solicitor-General of the Commonwealth with C L Lenehan and F T Roughley for the Attorney-General of the Commonwealth, (instructed by Australian Government Solicitor) intervening M G Hinton QC, Solicitor-General for the State of South Australia with M J Wait for the Attorney-General for the State of South Australia, intervening (instructed by Crown Solicitor (SA)) G R Donaldson SC, Solicitor-General for the State of Western Australia with C S Bydder for the Attorney-General for the State of Western Australia, intervening (instructed by State Solicitor (WA)) K L Eastman SC for the Australian Human Rights Commission, intervening (instructed by Australian Human Rights Commission) M J Richards with S M Fitzgerald for the National Congress of Australia's First Peoples Limited, appearing as amicus curiae (instructed by Human Rights Law Resource Centre Ltd) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Discrimination law β Racial discrimination β Certain geographical areas on Palm Island subject to restrictions as to nature and quantity of liquor which may be possessed β Palm Island population overwhelmingly Aboriginal β Appellant, an Indigenous member of Palm Island community, convicted of possessing liquor in restricted area on Palm Island β Whether restrictions affected enjoyment of right to equal treatment before tribunals protected by Art 5(a) of International Convention on the Elimination of All Forms of Racial Discrimination ("Convention") β Whether restrictions affected enjoyment of right to own property protected by Art 5(d)(v) of Convention β Whether restrictions affected enjoyment of right of access to places or services for use by general public protected by Art 5(f) of Convention β Whether restrictions engaged s 10 of Racial Discrimination Act 1975 (Cth) β Whether restrictions valid as special measure within meaning of s 8 of Racial Discrimination Act. Constitutional law (Cth) β Inconsistency between Commonwealth and State laws β Whether State law inconsistent with Commonwealth law and invalid to extent of inconsistency pursuant to s 109 of Constitution. Words and phrases β "human rights or fundamental freedoms", "racial discrimination", "right of access to any place or service intended for use by the general public", "right to equal treatment before the tribunals and all other organs administering justice", "right to own property", "special measure". Constitution, s 109. Liquor Act 1992 (Q), ss 168B, 173G, 173H. Racial Discrimination Act 1975 (Cth), ss 8, 10. Liquor Regulation 2002 (Q), ss 37A, 37B, Sched 1R. Introduction The appellant, who is an Indigenous resident of Palm Island in Queensland, was charged on 31 May 2008 in the Magistrates Court for the District of Townsville with possession of more than a prescribed quantity of liquor in a restricted area on Palm Island contrary to s 168B of the Liquor Act 1992 (Q) ("Liquor Act"). Palm Island is a "community government area" within the meaning of the Aboriginal and Torres Strait Islander Communities (Justice, Land and Other Matters) Act 1984 (Q)1. It is subject to regulations made under ss 173G and 173H of the Liquor Act declaring it a restricted area and restricting the nature and quantity of liquor which people may have in their possession in the community area on the Island2. The community itself is composed almost entirely of Indigenous people. The appellant did not appear before the Magistrates Court. She entered no plea to the charge. The magistrate proceeded on the basis of facts agreed between the parties. It was agreed that the police had intercepted a motor vehicle on Park Road, Palm Island and that the appellant was an occupant of that vehicle. A black backpack in the boot of the vehicle was found to contain one 1125 ml bottle of Jim Beam bourbon and one 1125 ml bottle of Bundaberg Rum which was three-quarters full. The appellant admitted to being the owner of the liquor. A fine of $150 was imposed, to be paid within two months with one day imprisonment in default of payment. The appellant appealed against the conviction to the District Court of Queensland3 contending, inter alia, that s 168B of the Liquor Act, regulations made under the Act and the restrictions which they imposed relating to possession of alcohol on Palm Island were invalid by reason of inconsistency with s 10 of the Racial Discrimination Act 1975 (Cth) ("RDA"). Section 10 relevantly provides that if a State law has the effect that persons of a particular race do not enjoy a right enjoyed by persons of another race or enjoy it to a more 1 Aboriginal and Torres Strait Islander Communities (Justice, Land and Other Matters) Act 1984 (Q), s 4. 2 Liquor Regulation 2002 (Q), ss 37A, 37B, Sched 1R, s 1(a) ("Liquor Regulation"). The restriction extends to the foreshore and the jetty, effectively preventing any alcohol except of that nature and quantity from being brought onto the Island: Sched 1R, s 1(b) and (c). 3 Pursuant to the Justices Act 1886 (Q), s 222. limited extent, the person adversely affected shall, by force of s 10, enjoy that right to the same extent as the persons of that other race. The appellant's appeal to the District Court4 and a subsequent application for leave to appeal to the Court of Appeal of the Supreme Court of Queensland5 were dismissed6. The Court of Appeal held, by majority, that s 10 did not apply, but in any event, unanimously, that the impugned legislation was a "special measure" taken for the sole purpose of securing the adequate advancement of the Indigenous people of Palm Island and that by force of s 8 of the RDA s 10 did not apply to that legislation. On 5 October 2012, this Court (French CJ and Crennan J) granted special leave to the appellant to appeal against the decision of the Court of Appeal7. The appeal should be dismissed on the basis that the impugned provisions were a special measure within the meaning of s 8 of the RDA. The appeal requires an examination of the interaction between ss 8 and 10 of the RDA, which are of general application, and the specific provisions of the Liquor Act and regulations made under it, which underpin the charge brought against the appellant. It is convenient to begin by consideration of the relevant provisions of the RDA. The statutory framework β the RDA The purpose of the RDA, as appears from its Preamble, is to provide for the prohibition of racial discrimination and certain other forms of discrimination and to give effect to the International Convention on the Elimination of All Forms of Racial Discrimination ("ICERD"). The term "racial discrimination" is defined in Art 1(1) of the ICERD to mean: "any distinction, exclusion, restriction or preference based on race, colour, descent, or national or ethnic origin which has the purpose or effect of nullifying or impairing the recognition, enjoyment or exercise, on an equal footing, of human rights and fundamental freedoms in the political, economic, social, cultural or any other field of public life." By Art 2 of the ICERD the parties to it "undertake to pursue by all appropriate means ... a policy of eliminating racial discrimination in all its 4 Maloney v Queensland Police Service [2011] QDC 139. 5 Pursuant to the District Court of Queensland Act 1967 (Q), s 118(3). 6 R v Maloney [2013] 1 Qd R 32. [2012] HCATrans 243. forms". By Art 2(1)(c) each State Party must take effective measures "to amend, rescind or nullify any laws and regulations which have the effect of creating or perpetuating racial discrimination wherever it exists". Each State Party is also required, by Art 2(1)(d), to "prohibit ... by all appropriate means, including legislation as required by circumstances, racial discrimination by any persons, group or organization". Part II of the RDA, comprising ss 8 to 18A, is entitled "Prohibition of racial discrimination". Section 9(1), which is not directly in issue in this case, makes it unlawful to do any act which involves racial discrimination within the meaning of that term in the ICERD as defined by Art 1(1)8. Other provisions of Pt II prohibit specific kinds of racial discrimination9. Section 10 of the RDA, entitled "Rights to equality before the law", relevantly provides10: If, by reason of, or of a provision of, a law of the Commonwealth or of a State or Territory, persons of a particular race, colour or national or ethnic origin do not enjoy a right that is enjoyed by persons of another race, colour or national or ethnic origin, or enjoy a right to a more limited extent than persons of another race, colour or national or ethnic origin, then, notwithstanding anything in that law, persons of the first-mentioned race, colour or national or ethnic origin shall, by force of this section, enjoy that right to the same extent as persons of that other race, colour or national or ethnic origin. (2) A reference in subsection (1) to a right includes a reference to a right of a kind referred to in Article 5 of the Convention." The non-exhaustive definition of "right" in s 10(2) picks up the enumerated rights in Art 5 of the ICERD and the larger class referred to in Art 1(1)11, namely: "human rights and fundamental freedoms in the political, economic, social, cultural or any other field of public life." 8 Koowarta v Bjelke-Petersen (1982) 153 CLR 168 at 264 per Brennan J; [1982] HCA 27. 9 RDA, ss 14-16. 10 Section 10(3) brings within the scope of s 10(1) laws providing for non-consensual management of the property of Aboriginal and Torres Strait Islander persons but is not directly relevant for present purposes. 11 Gerhardy v Brown (1985) 159 CLR 70 at 85-86 per Gibbs CJ, 101 per Mason J; [1985] HCA 11. That class of rights is not limited to legal rights enforceable under municipal law12. In the event, the appellant relied only upon enumerated rights in Art 5 in her invocation of s 1013. Section 10 was evidently inserted in the RDA to give effect to Art 2(1)(c) of the ICERD14. It is said to have been designed to bring about equality before the law15. It might more modestly be described as designed to overcome inequality before the law based on race, colour or national or ethnic origin. Two important applications of s 10(1) were identified by Mason J in Gerhardy v Brown16 in reasoning approved by the plurality in Western Australia v Ward17: If a State law creates a right which is not universal because it is not conferred on people of a particular race, then s 10 will supply the right the subject of that omission and confer that right upon persons of that race. The right conferred by s 10 will be complementary to the rights conferred by the State law and the Commonwealth and State laws can stand together. If a State law prohibits persons of a particular race from enjoying a human right or fundamental freedom enjoyed by persons of another race, s 10 will confer that right upon the persons the subject of the prohibition. In that application, s 10 permits that which the State law prohibits and so will be inconsistent with the State law and, by reason of s 109 of the 12 Mabo v Queensland (No 1) (1988) 166 CLR 186 at 217 per Brennan, Toohey and Gaudron JJ; [1988] HCA 69. 13 ICERD, Arts 5(a), 5(d)(v) and 5(f), which are set out later in these reasons. 14 Viskauskas v Niland (1983) 153 CLR 280 at 294; [1983] HCA 15. 15 Gerhardy v Brown (1985) 159 CLR 70 at 94 per Mason J; Mabo v Queensland (No 1) (1988) 166 CLR 186 at 198 per Mason CJ, 205 per Wilson J. 16 (1985) 159 CLR 70 at 98-99. 17 (2002) 213 CLR 1 at 99-100 [106]-[107]; [2002] HCA 28. 18 See for example Miller v Miller (1978) 141 CLR 269; [1978] HCA 44 (prohibition in State law on obtaining evidence by listening through extension telephone inconsistent with Commonwealth law permitting such conduct); Yanner v Eaton (1999) 201 CLR 351; [1999] HCA 53 (prohibition on taking and keeping fauna in Fauna Conservation Act 1974 (Q) directly inconsistent with rights conferred by s 211 of Native Title Act 1993 (Cth)). The plurality in Ward also included in the second category a State law which deprives persons of a particular race of a human right or fundamental freedom otherwise enjoyed by all regardless of race19. An example of such a deprivation was the Queensland Coast Islands Declaratory Act 1985 (Q), s 3 of which purported to extinguish native title on all islands within a defined area in the Torres Strait. It was held in Mabo v Queensland (No 1)20 to be inconsistent with s 10(1) of the RDA, which had the effect that the Miriam People, who sought recognition of their traditional native title, could enjoy their purportedly extinguished rights. The State Act was invalid to the extent of that inconsistency21. An important feature of s 10 is that it does not require that the law to which it applies make a distinction expressly based on race. The section is directed to the discriminatory operation and effect of the legislation22. It provides a mechanism to overcome the effects of Commonwealth, State or Territory legislation to which it applies. The appellant's first line of argument in this Court was that the impugned provisions of the Liquor Act and the Liquor Regulation imposing the restrictions which gave rise to charges against her affected her rights under Arts 5(a), 5(d)(v) and 5(f) of the ICERD in a racially discriminatory way and, being inconsistent with s 10, were invalid. She then had to meet the argument that, even if one or more of her rights were so affected, the impugned provisions were a "special measure" within the meaning of s 8 of the RDA and s 10 did not apply to them. That line of argument requires consideration of s 8. Section 8(1) of the RDA provides that Pt II does not apply to, or in relation to the application of, "special measures to which paragraph 4 of Article 1 of the [ICERD] applies"23. Article 1(4) excludes "special measures" from the definition of "racial discrimination" in Art 1(1): 19 (2002) 213 CLR 1 at 100 [107]. 20 (1988) 166 CLR 186. 21 See also Western Australia v Ward (2002) 213 CLR 1 at 101-102 [111]. 22 Gerhardy v Brown (1985) 159 CLR 70 at 97, 99 per Mason J; Mabo v Queensland (No 1) (1988) 166 CLR 186 at 198-199 per Mason CJ, 216-219 per Brennan, Toohey and Gaudron JJ, 231-232 per Deane J; Western Australia v Ward (2002) 213 CLR 1 at 103 [115]. 23 It excepts measures in relation to which s 10(1) applies by virtue of s 10(3), which are not material for present purposes. "Special measures taken for the sole purpose of securing adequate advancement of certain racial or ethnic groups or individuals requiring such protection as may be necessary in order to ensure such groups or individuals equal enjoyment or exercise of human rights and fundamental freedoms shall not be deemed racial discrimination, provided, however, that such measures do not, as a consequence, lead to the maintenance of separate rights for different racial groups and that they shall not be continued after the objectives for which they were taken have been achieved." Article 1(4) should be read with Art 2(2), which, subject to a proviso similar to that appearing in Art 1(4), obliges States Parties, when circumstances so warrant, to take "special and concrete measures" broadly of the kind referred to in Art 1(4)24. The term "special measures", as used in the ICERD, is the criterion for the qualification, created by s 8 of the RDA, upon the prohibitions imposed in Pt II of that Act and the remedial operation of s 10. It is to be construed according to its meaning in the ICERD and therefore according to the rules of construction applicable to the ICERD by Art 31(1) of the Vienna Convention on the Law of Treaties (1969) ("Vienna Convention")25: "A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose." 24 "Special measure" provisions also appear in Art 5 of the Discrimination (Employment and Occupation) Convention of International Labour Organisation (1958) and in Art 4 of the Convention on the Elimination of All Forms of Discrimination against Women (1979); see generally Freeman, Chinkin and Rudolf (eds), The UN Convention on the Elimination of All Forms of Discrimination against Women: A Commentary, (2012) at 124-129. the 25 Koowarta v Bjelke-Petersen (1982) 153 CLR 168 at 265 per Brennan J, who applied that interpretive approach to the RDA generally. See also The Commonwealth v Tasmania (The Tasmanian Dam Case) (1983) 158 CLR 1 at 177 per Murphy J; [1983] HCA 21; Applicant A v Minister for Immigration and Ethnic Affairs (1997) 190 CLR 225 at 230 per Brennan CJ, 240 per Dawson J, 251-253 per McHugh J, 277 per Gummow J; [1997] HCA 4; Minister for Immigration and Multicultural Affairs v Respondents S152/2003 (2004) 222 CLR 1 at 24-25 [67] per McHugh J; [2004] HCA 18; TCL Air Conditioner (Zhongshan) Co Ltd v Judges of the Federal Court of Australia (2013) 87 ALJR 410 at 415 [8] per French CJ and Gageler J; 295 ALR 596 at 599; [2013] HCA 5. Also relevant to interpretation is Art 31(3) of the Vienna Convention, which provides: "There shall be taken into account, together with the context: any subsequent agreement between the parties regarding the interpretation of the treaty or the application of its provisions; any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation; any relevant rules of international law applicable in the relations between the parties." Difficulties can follow from the incorporation into a domestic law of criteria designed for an international instrument when those criteria have to be applied to the determination of rights and liabilities in a matter arising under that law in a municipal court. As Gummow J said in Applicant A v Minister for Immigration and Ethnic Affairs26: "The text of the international instrument may lack precision and clarity and may have been expressed in attractive but loose terms with a view to attracting the maximum number of ratifications. The terms of the criteria therein ... may be difficult of comprehension and application in domestic law. Moreover, their application in domestic law falls to administrators whose decisions, under the Australian structure of government, are, in the absence of an excess of constitutional authority, subject to curial involvement only by the limited processes of judicial review." (footnotes omitted) The application in a court of criteria derived from an international instrument may require consideration by the court of whether it is constitutionally competent to apply the criteria and, if so, to what extent. Obligations imposed by international instruments on States do not necessarily take account of the division of functions between their branches of government. The difficulty is compounded when the interpretation of the international instrument is said to have been subject to change by reference to practices occurring since the enactment of legislative provisions implementing it into domestic law. Such practices may, by operation of Art 31(3) of the Vienna Convention, be taken into account in interpretation of the treaty or convention for the purposes of 26 (1997) 190 CLR 225 at 275. international law27. They may lead to its informal modification28. However, they cannot be invoked, in this country, so as to authorise a court to alter the meaning of a domestic law implementing a provision of a treaty or convention29. The word "measure" in Art 1(4) necessarily includes action by States Parties and therefore action taken by the legislative and executive branches of government30. Any legislative "measure" is likely to be linked, as it is in this case, to executive and judicial action implementing or enforcing the measure. In this case, enforcement of the impugned law was effected by way of prosecution, adjudication, and the imposition of a penalty. The term "special" in Art 1(4) may be taken, in context, to describe measures whose purposes, in their formal application or in their practical operation and effect, are directed to particular groups and/or individuals. Article 1(4) is concerned with a species of the genus special measure whose attributes are not easily extracted from the difficult wording of the Article. That difficulty, as Deane J pointed out in Gerhardy, "go[es] beyond the possibly unavoidable vagueness of words such as 'adequate' and concepts such as 'human rights' and 'fundamental freedoms'."31 Nevertheless, Deane J read the "general 27 See eg, Minister for Home Affairs (Cth) v Zentai (2012) 246 CLR 213 at 229-230 [36] per French CJ, 238-239 [65] per Gummow, Crennan, Kiefel and Bell JJ; [2012] HCA 28. 28 Waldock, "Third report on the law of treaties", (1964) 2 Yearbook of the International Law Commission 5 at 60. 29 As to the use of subsequent practice in the "evolutive interpretation" of treaties, see generally Arato, "Subsequent Practice and Evolutive Interpretation: Techniques of Treaty Interpretation over Time and Their Diverse Consequences", (2010) 9 The Law and Practice of International Courts and Tribunals 443; Feldman, "Evolving Treaty Obligations: A Proposal for Analyzing Subsequent Practice Derived from WTO Dispute Settlement", (2009) 41 New York University Journal of International Law and Politics 655 at 695-703; McLachlan, "The Principle of Systemic Integration and Article 31(3)(c) of 54 International and Comparative Law Quarterly 279 at 282-284. the Vienna Convention", 30 This is not to exclude the possibility that some kinds of judicial function may constitute a "special measure", nor the possibility that non-State action within a State and permitted by the State may constitute a "special measure". 31 (1985) 159 CLR 70 at 148. purport" of Art 1(4), subject to the proviso contained in that Article, as excluding from the ambit of racial discrimination32: "'special measures taken for the sole purpose' of securing the development and protection of disadvantaged racial or ethnic groups or individuals belonging to them to the extent necessary to ensure to such groups or individuals equal enjoyment or exercise of human rights and fundamental freedoms." Beyond identification of the general purport of Art 1(4), it is necessary to distinguish those things which define the content of the "sole purpose" of the "special measures" referred to in the Article from the factual circumstances in which that purpose is engaged. Taking that approach, the circumstances required for a "special measure" to be taken are: the existence within a State Party of certain racial or ethnic groups or individuals; the existence of a requirement for the protection of those groups or individuals in order to ensure their equal enjoyment or exercise of human rights and fundamental freedoms. The sole purpose of a "special measure" in those circumstances must be to secure the adequate advancement of those racial or ethnic groups or individuals to ensure their equal enjoyment or exercise of human rights and fundamental freedoms. The circumstances and the purpose so identified direct attention to the proper function of a court in responding to a claim that a particular law is or is not a special measure for the purposes of s 8(1) of the RDA. There are limits to the constitutional functions and competencies of courts in making evaluative judgments about the existence of a necessity for protection of a racial or ethnic group or individual and, if such necessity exists, what constitutes "adequate advancement" towards their equal enjoyment or exercise of human rights and fundamental freedoms. Brennan and Deane JJ in Gerhardy delineated the respective functions of the political branch of government and the courts in determining whether a law is a special measure. In summary, Brennan J made the following observations: When the legal rights and liabilities of individuals turn on the character of a law as a special measure, the court which has to determine those rights 32 (1985) 159 CLR 70 at 148. or liabilities is bound to decide, for the purposes of municipal law, whether it bears that character33. When the character of a special measure depends in part upon a political assessment about the need for advancement of a racial group and the measure that is likely to secure the advancement necessary, the court must accept the assessment made by the political branch of government34. The court can determine whether the political branch acted reasonably in making the assessment which it did35. That is to say, the court can determine whether the assessment made by the political branch could Deane J took a similar approach to the question whether laws had been made for the "sole purpose" referred to in Art 1(4). His Honour said37: "They will not be properly so characterized unless their provisions are capable of being reasonably considered to be appropriate and adapted to achieving that purpose." That was not a prescription for merits review of legislation38: "Beyond that, the Court is not concerned to determine whether the provisions are the appropriate ones to achieve, or whether they will in fact achieve, the particular purpose." (emphasis in original) Consistently with the approach adopted by their Honours and the identification in these reasons of the circumstances in which a special measure may be taken and the sole purpose for which it may be taken, the court, in proceedings which turn upon the characterisation of a law as a special measure, may: 33 (1985) 159 CLR 70 at 138. 34 (1985) 159 CLR 70 at 138. 35 (1985) 159 CLR 70 at 138. 36 (1985) 159 CLR 70 at 139. 37 (1985) 159 CLR 70 at 149. 38 (1985) 159 CLR 70 at 149. determine whether the law evidences or rests upon a legislative finding that there is a requirement for the protection of a racial or ethnic group or individuals in order to ensure their equal enjoyment or exercise of human rights and fundamental freedoms; determine whether that finding was reasonably open; determine whether the sole purpose of the law is to secure the adequate advancement of the relevant racial or ethnic group or individuals to ensure their equal enjoyment or exercise of human rights and fundamental freedoms; and determine whether the law is reasonably capable of being appropriate and adapted to that sole purpose. If a court is called upon to make a finding of fact relevant to the characterisation of a law as a "special measure", it is likely to be analogous to a judgment about constitutional facts. It may require the court to take judicial notice of notorious facts and otherwise rely upon material placed before it. Fact-finding of this kind is not like finding facts in an issue between parties39. Special measures and the consultation requirement As discussed above, the interpretation of the ICERD, by reference to international practice in its application since it came into effect, is contemplated by Art 31(3) of the Vienna Convention. The transposition of that approach to interpretation of a domestic statute giving effect to the ICERD and using its language is limited in Australia by the limits of the judicial function. An interpretation of a treaty provision adopted in international practice, by the decisions of international courts or tribunals, or by foreign municipal courts may illuminate the interpretation of that provision where it has been incorporated into the domestic law of Australia. That does not mean that Australian courts can adopt "interpretations" which rewrite the incorporated text or burden it with glosses which its language will not bear. that since Gerhardy The appellant submitted there have been developments in international jurisprudence and standard setting in relation to the concept of "special measures" and, in particular, the need for consultation and free and informed consent before their implementation. The appellant referred to General Recommendation No 32 adopted in 2009 by the Committee on the Elimination of Racial Discrimination, established pursuant to Art 8(1) of the 39 Gerhardy v Brown (1985) 159 CLR 70 at 88-89 per Gibbs CJ, 105 per Mason J, ICERD. The relevant part of the recommendation was that "States parties should ensure that special measures are designed and implemented on the basis of prior consultation with affected communities and the active participation of such communities." The appellant also relied upon advice to the like effect, adopted in 2011, by a body called "the Expert Mechanism on the Rights of Indigenous Peoples", established by the United Nations Human Rights Council. She submitted that the recommendation of the Committee and the advice of the Expert Mechanism bore upon the meaning to be given to "special measure" in s 8 of the RDA. That submission should not be accepted. The text of Art 1(4) of the ICERD, as imported by the RDA, did not bring with it consultation as a definitional element of a "special measure". Nor can such a requirement be imported into a text which will not bear it by the subsequent opinions of expert bodies, however distinguished. That being said, it should be accepted, as a matter of common sense, that prior consultation with an affected community and its substantial acceptance of a proposed special measure is likely to be essential to the practical implementation of that measure. That is particularly so where, as in this case, the measure said to be a "special measure" involves the imposition on the affected community of a restriction on some aspect of the freedoms otherwise enjoyed by its members. It can also be accepted, as the appellant submitted, that in the absence of genuine consultation with those to be affected by a special measure, it may be open to a court to conclude that the measure is not reasonably capable of being appropriate and adapted for the sole purpose it purports to serve. As appears below, the impugned legislation had built into it a consultation requirement, and a consultation process was undertaken, although its coverage and adequacy were challenged by a number of deponents in affidavits filed in the District Court appeal. It is also clear enough from the Explanatory Notes to the relevant regulation under the Liquor Act that there was a division of opinion within the Palm Island community about what, if any, measures should be undertaken to restrict the use of alcohol within the community. Against that background, it is necessary to consider the impugned provisions of the Liquor Act and regulations made under it. Statutory framework β Liquor Act and Liquor Regulation Section 168B(1) of the Liquor Act provided at the relevant time40: 40 In circumstances specified in s 168B(2) and (3) the subsection does not apply to possession of liquor in the ordinary course of lawful business by a licensee or carrier. "A person must not, in a public place in a restricted area to which this section applies because of a declaration under section 173H, have in possession more than the prescribed quantity of liquor for the area, other than under the authority of a restricted area permit." That provision must be read, with Pt 6A of the Liquor Act, at the relevant time comprising ss 173F to 173J, which provides for the making of regulations embodying declarations of the kind referred to in s 168B(1). Section 168B and Pt 6A were introduced into the Liquor Act by the Indigenous Communities Liquor Licences Act 2002 (Q) as part of a government response to the Cape York Justice Study Report prepared by the Hon Tony Fitzgerald. As recorded in the Explanatory Notes to the 2002 Bill, that Report said of Indigenous communities in North Queensland41: "Alcohol abuse and associated violence are so prevalent and damaging that their they development." the communities' existence and obstruct threaten Consistently with its presentation to the Parliament as a response to the findings of the Cape York Justice Study, the purpose of Pt 6A, as stated in s 173F, is to minimise harm caused by alcohol abuse and misuse and associated violence42 and alcohol-related disturbances or public disorder43. The declaration process under Pt 6A, relevant to s 168B, involves two steps: the making of a regulation under s 173G(1) declaring an area to be a restricted area β which may encompass a community area or part of a community area44; and 41 Queensland, Legislative Assembly, Indigenous Communities Liquor Licences Bill 2002 (Q), Explanatory Notes at 2. 42 Liquor Act, s 173F(a). 43 Liquor Act, s 173F(b). 44 Liquor Act, s 173G(2). "Community area" is defined in s 4 of the Liquor Act with reference to the Aboriginal and Torres Strait Islander Communities (Justice, Land and Other Matters) Act 1984 (Q), s 4 of which defines it to include a "community government area", which at the relevant time was defined in that section by reference to the Local Government (Community Government Areas) Act 2004 (Q), Sched 4. The definition of that term in that Schedule included Palm Island. the making of a regulation under s 173H(1) declaring that a restricted area is an area to which s 168B applies and prescribing a quantity of liquor that a person may have in possession in a public place in that restricted area without a restricted area permit45. Before recommending to the Governor in Council the making of a regulation declaring a community area to be a restricted area, the Minister must be satisfied the declaration is necessary to advance the purpose of Pt 6A46. He or she must also have consulted with the community justice group for the the declaration or must have considered a community area about recommendation about the declaration from the group, if it has made one47. Failure to comply with those requirements does not affect the validity of a regulation to which they applied48. Nevertheless, the question whether there had been consultation in relation to the regulation affecting Palm Island was in issue in the District Court49. A mechanism for the declaration by regulation of areas pursuant to s 173G and the application to them of s 168B pursuant to s 173H was created by the Liquor Regulation. Schedules to that regulation define community areas to which the relevant declarations were applied50. Schedule 1R, which was added to the Liquor Regulation by the Liquor Amendment Regulation (No 4) 2006 (Q), defined each of the following areas to be a restricted area and thereby an area to which s 168B applied: the community area of the Palm Island Shire Council; any foreshore of the community area of the Palm Island Shire Council; the jetty on Greater Palm Island known as Palm Island jetty." 45 Liquor Act, s 173H(2). 46 Liquor Act, s 173G(3). 47 Liquor Act, s 173I(2). 48 Liquor Act, s 173I(4). 49 A non-statutory community justice group was in existence on Palm Island before 21 April 2006 as appears from affidavit evidence in the District Court. A statutory community justice group was created by regulation on and from 21 April 2006. 50 Liquor Regulation, ss 37A and 37B. The prescribed quantity of liquor permitted in the restricted areas so defined, other than in the canteen, was 11.25 litres of beer for which the concentration of alcohol is less than four per cent. The prescribed quantity of any other liquor was zero. The Explanatory Notes to the Liquor Amendment Regulation (No 4) 2006 (Q) state that the Palm Island Community Justice Group and the Palm Island Shire Council had recommended limits on the use of alcohol as part of a community alcohol management strategy. However, the restrictions imposed differed from those recommendations. The Explanatory Notes record that there was ongoing division within the Community Justice Group and between the Community Justice Group and the Council which inhibited community agreement about an alcohol management plan. The plan eventually adopted was said to be based on a compromise between four separate alcohol management plans previously presented to government by the Community Justice Group and the Council51. There was said to be agreement across the community that unrestricted alcohol was a major concern that needed to be addressed52. The Notes state that the restrictions proposed were "necessary for Palm Island to effectively address its alcohol related issues" and that, in the government's experience, "in other Indigenous communities where similar alcohol related issues were present and an [alcohol management plan] was implemented, the quality of life has generally improved."53 The District Court decision In the District Court, the appellant argued, on the basis of affidavit evidence adduced in that Court, that the consultation requirements imposed by the Liquor Act with respect to the restricted area declaration had not been complied with. Durward DCJ held that consultation was "not required as a matter of law"54, by which his Honour may be taken to have meant that the lack of consultation did not vitiate the making of a regulation declaring a restricted area. So much would seem to flow from s 173I(4). His Honour also held that, in any event, the evidence which had been adduced was insufficient to displace a 51 Queensland, Legislative Assembly, Liquor Amendment Regulation (No 4) 2006, Explanatory Notes at 2. 52 Queensland, Legislative Assembly, Liquor Amendment Regulation (No 4) 2006, Explanatory Notes at 3. 53 Queensland, Legislative Assembly, Liquor Amendment Regulation (No 4) 2006, Explanatory Notes at 3. 54 [2011] QDC 139 at [59]. strong inference open from the Explanatory Notes to the amendment regulation that a consultation process did occur as a matter of fact55. His Honour went on to hold, in effect, that the question whether the provisions of the Liquor Act and of the Liquor Regulation imposing the restrictions were a special measure was not justiciable. It was a matter for the legislature56. The decision of the Court of Appeal dismissing the appellant's appeal must be read in light of its prior decision, concerning the validity of the same restrictions, in Morton v Queensland Police Service57. That was another case concerning possession of alcohol on Palm Island. The Court of Appeal in s 168B in its application to Palm Island by operation of ss 173G and 173H and the Liquor Regulation are discriminatory on the grounds of race58; the practical effect of the legislation is to restrict possession of alcohol by members of a group who are overwhelmingly Aboriginal persons59; the impugned provisions were a special measure within the meaning of s 8 of the RDA60; the residents of Palm Island had been adequately consulted61. By majority (Chesterman and Holmes JJA), the Court of Appeal further held that, contrary to the submissions on behalf of the appellant, the rights referred to 55 [2011] QDC 139 at [59]. 56 [2011] QDC 139 at [69]. 57 (2010) 271 ALR 112. 58 (2010) 271 ALR 112 at 114 [5] per McMurdo P, 129 [54] per Chesterman JA (Holmes JA agreeing with the reasoning of Chesterman JA at 125 [39]). 59 (2010) 271 ALR 112 at 114 [5] per McMurdo P, 129 [54] per Chesterman JA. 60 (2010) 271 ALR 112 at 125 [36]-[37] per McMurdo P, 139 [109]-[110] per 61 (2010) 271 ALR 112 at 125 [36] per McMurdo P, 139-140 [111]-[114] per in s 10 are limited to those defined or described by Art 1(1) of the ICERD as "human rights and fundamental freedoms"62. The application of s 10 The majority view in Morton of the class of rights protected by s 10 was accepted by the appellant for the purposes of her appeal to the Court of Appeal63. She argued that the impugned legislation deprived her of human rights set out in Arts 5(a), 5(d)(v) and 5(f) of the ICERD. Those rights are: the right to equal treatment before the tribunals and all other organs administering justice64; the right to own property alone as well as in association with others65; the right of access to any place or service intended for use by the general public, such as transport, hotels, restaurants, cafes, theatres and parks66. The appellant's reliance upon the equal treatment right was not well-founded. Her complaint, as a majority (Chesterman JA and Daubney J) of the Court of Appeal characterised it, was not that the Magistrates Court discriminated against her on the basis of race, but that the law pursuant to which she was prosecuted had a discriminatory operation67. In this Court the appellant did not argue that she had been treated in the courts of Queensland any differently in matters of procedure from the way in which a non-Aboriginal person would have been treated. She submitted, in effect, that her unequal treatment was constituted by her being charged and convicted for an offence against a law which, in its practical operation and effect, was directed to persons of a particular race. That complaint, however, was not one about equal treatment before the courts. As the respondent submitted, the Liquor Act and the Liquor Regulation did not require any court to apply the law to the appellant in a manner that was different from the way in which the law was applied to non-Aboriginal persons. 62 (2010) 271 ALR 112 at 129 [58] and 133 [75], cf 118-119 [18] per McMurdo P. 63 [2013] 1 Qd R 32 at 59 [87]. 64 ICERD, Art 5(a). 65 ICERD, Art 5(d)(v). 66 ICERD, Art 5(f). 67 [2013] 1 Qd R 32 at 60 [90], cf 36-37 [9]-[15] per McMurdo P. As to the right to own property, referred to in Art 5(d)(v), the Court of Appeal accepted that the impugned law interfered with the appellant's right to possession of a particular kind of liquor in a particular location. However, the right to own property was not absolute, but subject to regulation in the public interest68. The right to possess liquor was regulated by different legal systems in many different ways, all reflecting local rather than universal policies and values69. Having regard to the objects of Pt 6A of the Liquor Act, the impugned provisions imposed restrictions which were reasonable and legitimate to achieve those stated objectives. They did not have the effect that the human right and fundamental freedom to own property had been infringed70. With respect to the Court of Appeal, its analysis in relation to the right to own property should not be accepted. The impugned provisions were directed at an Indigenous community. It is not a sufficient answer to the appellant's complaint about those provisions that she was not deprived of her property and that property rights are frequently qualified by regulation, especially in the case of alcohol. In this case, the impugned provisions had the effect that Indigenous persons who were the Palm Island community, including the appellant, could not enjoy a right of ownership of property, namely alcohol, to the same extent as non-Indigenous people outside that community. The impugned provisions effected an operational discrimination notwithstanding the race-neutral language of s 168B of the Liquor Act, under which the appellant was charged. The rights protected by Art 5 are not so weak that their limits can be defined by reference to regulations, however reasonable, which effect operational discrimination by way of restrictions imposed on the people of a particular racial group. Such an argument diminishes, if it does not render otiose, the particular and limited exemption for operational discrimination provided by the special measures provisions of the ICERD. Subject to the application of s 8, s 10 would have applied to invalidate the impugned provisions on the basis of their discriminatory effects on the appellant's right to own property within the meaning of Art 5(d)(v) of the ICERD. As to the appellant's contention that the impugned provisions infringed her right of access to services intended for the general public, a majority of the Court of Appeal (Chesterman JA and Daubney J) accepted the respondent's submission that the right described in Art 5(f) of the ICERD was concerned with discrimination based on race among the occupants of places or the patrons of services. The right did not dictate what services must be supplied. The right was 68 [2013] 1 Qd R 32 at 41 [30] per McMurdo P, 60 [94] per Chesterman JA. 69 [2013] 1 Qd R 32 at 61 [96] per Chesterman JA. 70 [2013] 1 Qd R 32 at 41 [30] per McMurdo P, 62 [97]-[99] per Chesterman JA. not infringed by the supply to an outlet's patrons, regardless of their race, of the limited range of goods available for sale71. The appellant submitted that the impugned provisions denied her the right of access to a service at the Palm Island canteen, being a service intended for use by the general public, namely the ability to purchase and consume alcohol other than light or mid-strength beer. It was submitted for the respondent that the Liquor Act and the Liquor Regulation did not affect the appellant's enjoyment of her right under Art 5(f). The only effect of the impugned provisions was to restrict possession of liquor in public places. It did not affect access to any place or service. That submission should be accepted. The impugned legislation did not affect the appellant's right of access to any place or service intended for use by the general public. The "special measure" question Although the majority of the Court of Appeal found against the appellant in relation to the operation of s 10, their Honours went on to consider in any event whether the impugned provisions constituted a special measure attracting the application of s 8 as the Court had found in Morton. As the Court of Appeal pointed out, the appellant did not seek to challenge the correctness of Morton, but to distinguish it on the basis of the affidavit evidence which was said to establish error in the facts underpinning the finding in Morton72. The affidavit evidence, however, went only to the issue of consultation. The Court of Appeal rejected submissions put by the appellant that, absent the agreement of a substantial majority of the inhabitants or their prior informed and free consent, the impugned provisions could not constitute a special measure. Chesterman JA, with whom Daubney J agreed, held that nothing in Art 1(4) or Art 2(2) rendered prior consent necessary to the validity of a special measure, although it might be relevant for that characterisation73. For reasons already given, their Honours were correct in so holding. Their Honours also rejected a contention that a measure could only be special if it were expressed to be temporary. In so doing, their Honours applied Gerhardy74. 71 [2013] 1 Qd R 32 at 62 [101] per Chesterman JA, cf 41 [27]-[29] per McMurdo P. 72 [2013] 1 Qd R 32 at 41 [32], 49-50 [47] per McMurdo P, 62-63 [102] per 73 [2013] 1 Qd R 32 at 69 [118] per Chesterman JA, cf 51 [52] per McMurdo P. 74 [2013] 1 Qd R 32 at 70 [120]-[122] per Chesterman JA, cf 52 [57] per McMurdo P. In addition to her arguments based upon consultation and the requirement for prior informed and free consent, the appellant challenged the characterisation of the impugned provisions as a special measure on the following bases: the absence of any or any sufficient evidence to establish the existence of the requisite circumstances, the necessity for the restriction and its purpose; want of proportionality the criminalisation, within the declared restricted areas, of conduct which would be lawful outside those areas; the measure, which involved the absence of a temporal limit in the regulation. As to the last of these points, s 54 of the Statutory Instruments Act 1992 (Q) relevantly provides that subordinate legislation expires on 1 September first occurring after the day of its making unless its operation is extended. The appellant's submissions should be considered in light of the task of the court, discussed earlier in these reasons, in determining whether an impugned law is a "special measure" for the purposes of s 8(1) of the RDA. That task is to be undertaken having regard to the respective functions of the legislature, the executive and the court. To the extent it involves any fact-finding in aid of characterisation, that fact-finding is analogous to constitutional fact-finding and is not governed by the rules of evidence applicable to findings of fact on an issue between parties. The characterisation of a law as a "special measure" is, in the end, an answer to a legal question. There is no question of an onus of proof involved in relation to that process of characterisation. Applying the preceding approach, a number of conclusions follow which lead to the dismissal of the appeal: Section 168B and Pt 6A of the Liquor Act, read with ss 37A and 37B and Sched 1R of the Liquor Regulation, rest upon legislative findings that there is a requirement for the protection of a number of Indigenous communities in North Queensland from the effects of prevalent alcohol abuse and misuse and associated violence. That finding was supported by the Cape York Justice Study Report, which observed that the level of such abuse threatens the existence and obstructs the development of Indigenous communities in which it occurs. There was a judgment made by the Executive Government that the Palm Island community was affected by the problem of alcohol abuse and a finding, reflected in the Explanatory Notes to the Liquor Amendment Regulation (No 4) 2006 (Q), that this was recognised in that community. There was no evidence to suggest that that finding was wrong. The evidence of internal debate on Palm Island, to the extent it was disclosed in the Explanatory Notes and the affidavit material, was directed to the appropriate response and whether there had been adequate consultation. The requisite legislative findings can be inferred from the Explanatory Notes for the impugned provisions of the Liquor Act and the Liquor Regulation, the stated purpose of Pt 6A and the nature of the mechanisms created by the impugned provisions to control alcohol abuse. There was nothing to suggest that the findings, both general and specific, were not open to the Parliament and to the Minister when he recommended the amendment regulation and the application of the restrictions imposed by Sched 1R. The sole purpose of the impugned provisions, reflected in their stated purpose and the circumstances which brought them about, was the adequate advancement of the Palm Island community to ensure their equal enjoyment or existence of human rights and fundamental freedoms. While there might be debate about alternative and perhaps less restrictive mechanisms that could have been adopted, it cannot be said that the impugned provisions were not reasonably capable of being appropriate and adapted to their purpose. The criminalisation of the conduct prohibited by s 168B does not take the law out of the category of "special measure" as defined in Art 1(4) of the ICERD and incorporated in s 8 of the RDA. Such a provision is not in terms excluded by the text or by implication from the scope of special measures, which must be capable of application to a wide variety of circumstances. In so saying, it may be accepted that "special measures" are ordinarily measures of the kind generally covered by the rubric "affirmative action". The Liquor Act, the Liquor Regulation and Sched 1R to the Liquor Regulation were respectively enacted and proclaimed to deal with a serious social problem affecting Indigenous communities in North Queensland, including the Palm Island community. There were difficult judgments to be made about what was necessary to address that problem. Within the boundaries set by the provisions of the RDA, those judgments were a matter, in this case, for the Parliament and the Executive Government of Queensland. The impugned provisions were properly characterised as a special measure for the purposes of s 8(1) of the RDA. Conclusion For the preceding reasons, the appeal should be dismissed. Hayne HAYNE J. The appellant, an Aboriginal woman resident on Palm Island, Queensland, was charged with having in her possession, on 31 May 2008, in a public place in a restricted area on Palm Island, a bottle of bourbon whiskey and a bottle of rum. She alleged that the provisions of the Liquor Act 1992 (Q) ("the Liquor Act") and the Liquor Regulation 2002 (Q) ("the Liquor Regulation") which made it an offence to have particular kinds and quantities of liquor in the possession Racial Discrimination Act 1975 (Cth) ("the RDA") and consequently invalid by operation of s 109 of the Constitution. Although the appellant directed her argument in this Court chiefly (perhaps even entirely) to the validity of the relevant provisions of the Liquor Regulation, it is necessary to consider the relevant provisions of both the Liquor Act and the Liquor Regulation. (It is convenient to refer to them together as "the impugned provisions".) inconsistent with place were that The appellant did not appear in the Magistrates Court of Queensland and, on appeal to the District Court of Queensland and on application for leave to appeal to the Court of Appeal of the Supreme Court of Queensland75, she failed in her challenge to the validity of the impugned provisions. By special leave she appealed to this Court. The appeal raises two principal questions. The RDA provides that the persons of one race shall enjoy rights to the same extent as persons of another race unless the difference in enjoyment is by reason of what are called "special measures". The residents of Palm Island, who were all affected by the impugned provisions, are overwhelmingly Aboriginal persons. The first question is: did the impugned provisions have the effect that Aboriginal persons enjoy a right to a more limited extent than non-Aboriginal persons so as to engage s 10 of the RDA? The second question is: were the impugned provisions a "special measure" within s 8(1) of the RDA with the consequence that s 10 does not apply? In the Court of Appeal, McMurdo P and Chesterman JA (with whom Daubney J agreed) expressed76 differing opinions about the first question. All members of the Court of Appeal held77 that the impugned provisions constituted a "special measure". 75 R v Maloney [2013] 1 Qd R 32. 76 [2013] 1 Qd R 32 at 41 [30] per McMurdo P, 62-63 [102] per Chesterman JA 77 [2013] 1 Qd R 32 at 53 [64] per McMurdo P, 71 [126] per Chesterman JA Hayne In this Court, the appellant submitted that the first question should be answered "Yes" and the second "No". These reasons will demonstrate that both questions should be answered "Yes". By reason of the impugned provisions, Aboriginal persons did enjoy a right to a more limited extent than non-Aboriginal persons. But the impugned provisions constituted a "special measure". Accordingly, s 10 of the RDA does not apply to the impugned provisions. To explain and justify these answers, it is necessary to examine the impugned provisions and the relevant provisions of the RDA in some detail. The Liquor Act and the Liquor Regulation Part 6A (ss 173F-173J) of the Liquor Act provided for the declaration of an area as a "restricted area"78 and for the declaration of a prohibition on possession of liquor in a public place in a restricted area79. Section 168B(1) made it an offence to have in possession, in a public place in a restricted area, more than the prescribed quantity of liquor for the area, other than under the authority of a "restricted area permit"80. At the time relevant to this appeal, 31 May 2008, the Liquor Regulation declared81 each of the areas stated in 18 schedules to be a restricted area. The Explanatory Notes for the regulations which inserted these schedules suggest82 strongly that each of the areas stated in the schedules is associated in some way with an Indigenous community. The details of those associations were not identified or examined in argument. Instead, attention was confined to Sched 1R, which related to Palm Island. The Court of Appeal found83, and there was no dispute in this Court, that the residents of Palm Island are "overwhelmingly" Aboriginal people. 78 s 173G. 79 s 173H. 80 See s 103L. No party or intervener submitted that the provision for restricted area permits bore upon the issues arising in the appeal. 81 s 37A. 82 See, for example, Queensland, Legislative Assembly, Liquor Amendment Regulation (No 3) 2006, Explanatory Notes at 1. 83 [2013] 1 Qd R 32 at 38 [18], 58 [84]. Hayne Schedule 1R declared each of three areas84 of Palm Island to be a restricted area and stated85 the prescribed quantity of liquor for each of those areas (other than the licensed premises known as the Palm Island Canteen) to be 11.25 litres of beer in which the concentration of alcohol is less than four per cent86. The prescribed quantity of liquor for the canteen was stated87 to be any quantity of beer in which the concentration of alcohol is less than four per cent. The effect of these provisions was that no person could have any other form of liquor in possession in a public place in a restricted area on Palm Island. Although Pt 6A of the Liquor Act was cast in terms that did not confine its operation to Indigenous communities, there can be no doubt that the mischief to which its provisions were immediately directed was the evil of alcohol-fuelled violence and disturbance in those communities. The purpose of Pt 6A was said, in s 173F, to be to provide for the declaration of areas for minimising "harm caused by alcohol abuse and misuse and associated violence" and "alcohol related disturbances, or public disorder, in a locality". Under s 173G(3), the Minister "must be satisfied the declaration is necessary to achieve the purpose of this part" before recommending the Governor in Council make the declaration. (The declaration was to be made by regulation88.) The Bill for the Act89 which inserted Pt 6A into the Liquor Act was described90 as "part of a package of reforms to address the prevalence of alcohol abuse and violence in Indigenous communities in Cape York and other parts of Queensland". The stated purpose91 of that Act was "to prevent harm in community areas caused by alcohol abuse and misuse and associated violence". Subsequent Explanatory Notes for 84 The community area of the Palm Island Shire Council, any foreshore of that community area and the jetty on Greater Palm Island known as Palm Island Jetty. 85 Sched 1R, s 2(1). 86 A quantity equivalent to one case of "mid-strength" or "light" beer. 87 Sched 1R, s 2(2). 88 s 173G(1). 89 Indigenous Communities Liquor Licences Act 2002 (Q). 90 Queensland, Legislative Assembly, Indigenous Communities Liquor Licences Bill 2002, Explanatory Notes at 1. 91 Indigenous Communities Liquor Licences Act, s 3(1). Hayne regulations made to declare restricted areas described92 the objective of Pt 6A as being: "to minimise harm caused by alcohol abuse and misuse and associated violence, and alcohol related disturbances or public disorder in Indigenous communities". (emphasis added) The RDA The objects of the RDA are, and in both its long title93 and its preamble94 are expressed as being, the prohibition and elimination of racial discrimination. These are large objects. This appeal directed particular attention to two provisions of Pt II of the RDA: s 10 and s 8(1). Part II (ss 8-18A) is entitled "Prohibition of racial discrimination". Section 10 bears the heading "Rights to equality before the law". It provides (in part): If, by reason of, or of a provision of, a law of the Commonwealth or of a State or Territory, persons of a particular race, colour or national or ethnic origin do not enjoy a right that is enjoyed by persons of another race, colour or national or ethnic origin, or enjoy a right to a more limited extent than persons of another race, colour or national or ethnic origin, then, notwithstanding anything in that law, persons of the first-mentioned race, colour or national or ethnic origin shall, by force of this section, enjoy that right to the same extent as persons of that other race, colour or national or ethnic origin. (2) A reference in subsection (1) to a right includes a reference to a right of a kind referred to in Article 5 of the Convention." Section 8(1) provides that, subject to a qualification that is not relevant to this appeal, Pt II of the RDA "does not apply to, or in relation to the application of, special measures to which paragraph 4 of Article 1 of the Convention applies". 92 See, for example, Queensland, Legislative Assembly, Liquor Amendment Regulation (No 3) 2006, Explanatory Notes at 1; Queensland, Legislative Assembly, Liquor Amendment Regulation (No 4) 2006, Explanatory Notes at 1. 93 "An Act relating to the Elimination of Racial and other Discrimination" (emphasis added). 94 "[I]t is desirable ... to make the provisions contained in this Act for the prohibition of racial discrimination" (emphasis added). Hayne The Convention to which these provisions refer is the International Convention on the Elimination of All Forms of Racial Discrimination, which was opened for signature on 21 December 1965 and entered into force on 2 January 1969 ("the Convention"). The preamble to the RDA recites that the RDA "make[s] provision for giving effect to the Convention" and this Court has held95 that the RDA is a valid enactment of the Parliament because it implements Australia's obligations under the Convention. Of course, resort may be had to the Convention in interpreting provisions of the RDA96. But, because an Act like the RDA is to be interpreted "by the application of ordinary principles of statutory interpretation"97, the only extrinsic materials that may bear upon that task are materials of a relevant kind that existed at the time the RDA was enacted. Material published later, such as subsequent reports of United Nations Committees, may usefully direct attention to possible arguments about how the RDA should be construed but any debate about its construction is not concluded by reference to or reliance upon material of that kind98. Section 10(1) of the RDA The text of s 10(1) of the RDA shows that its application requires consideration of five questions. First, who are the persons of a particular race, colour or national or ethnic origin whose enjoyment of rights is to be considered? Second, how is it said that those persons do not enjoy, or enjoy to a more limited extent, a right? Third, what is the right that (i) is enjoyed by persons of another race, colour or national or ethnic origin, but which (ii) is not enjoyed (or is enjoyed to a more limited extent) by the persons identified in answer to the first question? Fourth, who are the persons of another race, colour or national or ethnic origin? Fifth, is the absence of enjoyment (or enjoyment to a more limited extent) of that right "by reason of, or of a provision of, a law of the Commonwealth or of a State or Territory"? The order in which the issues raised by these questions should be considered may differ from case to case. 95 Koowarta v Bjelke-Petersen (1982) 153 CLR 168; [1982] HCA 27. 96 Acts Interpretation Act 1901 (Cth), s 15AB(2)(d); Yager v The Queen (1977) 139 CLR 28 at 43-44 per Mason J; [1977] HCA 10. 97 Minister for Home Affairs (Cth) v Zentai (2012) 246 CLR 213 at 238 [65] per Gummow, Crennan, Kiefel and Bell JJ; [2012] HCA 28, citing Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381 [69]; [1998] HCA 28 and Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at 46-47 [47]; [2009] HCA 41. 98 cf Coleman v Power (2004) 220 CLR 1 at 27-30 [17]-[24] per Gleeson CJ; [2004] HCA 39. Hayne As to the third question (what is the right), s 10(2) provides that a reference in s 10(1) to a right includes a reference to a right of a kind referred to in Art 5 of the Convention. Article 5 records the undertaking of States Parties "to prohibit and to eliminate racial discrimination in all its forms and to guarantee the right of everyone, without distinction as to race, colour, or national or ethnic origin, to equality before the law, notably in the enjoyment of" the rights set out in the balance of the Article. Those rights include: "(a) The right to equal treatment before the tribunals and all other organs administering justice; The right to security of person and protection by the State against violence or bodily harm ...; Political rights, in particular the rights to participate in elections ... to take part in the Government ... and to have equal access to public service; (d) Other civil rights, in particular: The right to own property alone as well as in association with others; Economic, social and cultural rights ...; The right of access to any place or service intended for use by the general public, such as transport, hotels, restaurants, cafΓ©s, theatres and parks." The operation of s 10(1) has been examined in a number of previous decisions of this Court including, in particular, Western Australia v Ward99. The plurality in that case took up and developed a number of propositions that had been made in Gerhardy v Brown, especially in the reasons of Mason J100. Two of those propositions101 are of particular relevance to the issues in this appeal. 99 (2002) 213 CLR 1 at 99-109 [104]-[134]; [2002] HCA 28. 100 (1985) 159 CLR 70 at 97-99; [1985] HCA 11. 101 See Ward (2002) 213 CLR 1 at 99-100 [105]-[107]. Hayne First, s 10(1) does not use the word "discriminatory" or any cognate expression, yet the language of discrimination is used throughout the authorities in which s 10(1) has been considered. That use of language follows from the sub-section's focus on the enjoyment of rights by some but not by others or to a more limited extent by others but it must always be kept at the forefront of consideration that it is the statutory text which is controlling. Questions about the enjoyment of rights do not necessarily require consideration of the concepts that are often associated with "discrimination". Something more will be said about "discrimination" later in these reasons but it is enough for the moment to notice that questions about the enjoyment of rights require consideration of more than the purpose of the relevant law. So much is also made clear by the opening words of s 10(1): "If, by reason of"102. It follows that the operation of s 10(1) is not confined to laws the purpose of which can be described as "discriminatory". Second, s 10(1) may be engaged in two different kinds of case. If a relevant law omits to make enjoyment of a right universal, by failing to confer that right on persons of a particular race, s 10(1) operates to confer that right on persons of that race103. This may be contrasted with the operation of s 10(1) when a relevant law imposes a discriminatory burden or prohibition. As Mason J said in Gerhardy104: "When racial discrimination proceeds from a prohibition in a State law directed to persons of a particular race, forbidding them from enjoying a human right or fundamental freedom enjoyed by persons of another race, by virtue of that State law, s 10 confers a right on the persons prohibited by State law to enjoy the human right or fundamental freedom enjoyed by persons of that other race. This necessarily results in an inconsistency between s 10 and the prohibition contained in the State law." And as the plurality added in Ward105: "The same is true of a State law that deprives persons of a particular race of a right or freedom previously enjoyed by all regardless of race." 102 Mabo v Queensland (1988) 166 CLR 186 at 230; [1988] HCA 69; Western Australia v The Commonwealth (Native Title Act Case) (1995) 183 CLR 373 at 437; [1995] HCA 47. 103 Ward (2002) 213 CLR 1 at 99-100 [106], quoting Gerhardy (1985) 159 CLR 70 at 104 (1985) 159 CLR 70 at 98-99, quoted in Ward (2002) 213 CLR 1 at 100 [107]. 105 (2002) 213 CLR 1 at 100 [107]. Hayne To these two points it is necessary to add a third and more fundamental consideration. It will be recalled that the RDA is directed to the prohibition and elimination of racial discrimination. These are very general objects and the relevant provisions of the RDA are expressed in very general terms. Section 10 is especially broad. It is directed to the operation of the laws of the Commonwealth and of the States and Territories. It may be contrasted with s 9(1), which makes it unlawful, but not an offence106, for a person "to do any act involving a distinction, exclusion, restriction or preference based on race, colour, descent or national or ethnic origin which has the purpose or effect of nullifying or impairing the recognition, enjoyment or exercise, on an equal footing, of any human right or fundamental freedom in the political, economic, social, cultural or any other field of public life". Whatever the scope of s 9(1), it is sufficient to notice that it contains elements which s 10(1) does not107. In many, perhaps most, cases it will be accurate to describe a law which is found to engage s 10 as a racially discriminatory law. Given the objects of the RDA, that is unsurprising. Care is needed, however, to ensure that this statement of conclusion is not used in a way that inadvertently narrows or confines the operation of s 10. To do so would be contrary to the large objects which the RDA evidently pursues and the generality of the words which it uses. Reference to "discrimination" is apt to bring with it conceptual baggage which has been developed in other contexts108 but which finds no reflection in the text of s 10. One understanding of "discrimination" is that differential treatment does not amount to discrimination if that treatment is justifiable. Transplanting this understanding to s 10109 would cut down the section's operation. Section 10 does not say that persons of a particular race may enjoy a right to a more limited extent than persons of another race by reason of a Commonwealth, State or Territory law if that difference is justifiable or proportionate to a legitimate end110. If the law is not a special measure within the meaning of s 8(1), the 106 Re East; Ex parte Nguyen (1998) 196 CLR 354 at 364-365 [25]-[26]; [1998] HCA 73; Ward (2002) 213 CLR 1 at 97-98 [102]; cf Gerhardy (1985) 159 CLR 70 at 93 per Mason J. 107 See Gerhardy (1985) 159 CLR 70 at 97 per Mason J; Mabo (1988) 166 CLR 186 at 108 See, for example, Purvis v New South Wales (2003) 217 CLR 92; [2003] HCA 62. 109 cf Bropho v Western Australia (2008) 169 FCR 59 at 83-84 [83]; Aurukun Shire Council v Chief Executive Officer, Office of Liquor Gaming and Racing in the Department of Treasury [2012] 1 Qd R 1 at 46-47 [64]-[65], 71 [163], 73 [169], 103 [266]; Maloney [2013] 1 Qd R 32 at 39-40 [24], 40 [26], 62 [97], [99]. 110 cf Committee on the Elimination of Racial Discrimination, "General Recommendation XIV (42) on article 1, paragraph 1, of the Convention", in Report (Footnote continues on next page) Hayne conclusion that persons of a particular race enjoy a right to a more limited extent than persons of another race is necessary and sufficient to engage s 10. Section 10 should not, as the appellant suggested, be "read ... down" by "read[ing] in" notions of discrimination111. The arguments advanced in this appeal must be considered against the background of these fundamental propositions. The arguments about s 10 The appellant, with the general support of the Australian Human Rights Commission (intervening) and the National Congress of Australia's First Peoples Ltd (as amicus curiae), submitted that, by declaring a restricted area and subjecting those in that area to special restrictions, the effect of the impugned provisions was to treat the exercise by some Aboriginal persons (the Aboriginal persons on Palm Island) of their right to own property differently from the exercise by persons of another race (non-Aboriginal persons elsewhere in Queensland) of their right to own property. By contrast, the respondent submitted that s 10 is not engaged because the impugned provisions applied equally to persons of every race on Palm Island. And the Commonwealth, intervening generally in the interests of the respondent, submitted that s 10 is not engaged because, even comparing persons on Palm Island with persons elsewhere in Queensland, it was open to the Minister to have other areas in Queensland declared as "restricted areas" if those places met the statutory requirements for a declaration to be made. There was no dispute that the persons who it was alleged did not enjoy the relevant right or rights were Aboriginal persons on Palm Island. The submissions that have just been described focused upon two issues. What is the right which it is said that those Aboriginal persons did not enjoy to the same extent as persons of another race? How should the persons of that other race be of the Committee on the Elimination of Racial Discrimination, UN GAOR, 48th sess, Supp No 18, UN Doc A/48/18 (1993) 115 at 115 [2]; Committee on the Elimination of Racial Discrimination, "General recommendation XXX on discrimination against non-citizens", in Report of the Committee on the Elimination of Racial Discrimination, UN GAOR, 59th sess, Supp No 18, UN Doc A/59/18 (2004) 93 at 94 [4]; Committee on the Elimination of Racial Discrimination, "General recommendation No 32 (2009): The meaning and scope of special measures the Elimination of Racial Discrimination", in Report of the Committee on the Elimination of Racial Discrimination, UN GAOR, 64th sess, Supp No 18, UN Doc A/64/18 (2009) 152 at the International Convention on 111 cf Gerhardy (1985) 159 CLR 70 at 99 per Mason J. Hayne identified: as persons (Aboriginal persons or non-Aboriginal persons) in places other than Palm Island, or as non-Aboriginal persons on Palm Island? The relevant right The appellant referred to three rights set out in Art 5 of the Convention as relevant to the application of s 10(1) in this appeal: Art 5(a) (the right to equal treatment before courts and tribunals), (d)(v) (the right to own property) and (f) (the right of access to places and services). Because these rights are specifically listed in Art 5, and thus within the meaning of the term "right" in s 10(1), it is not necessary to explore what other rights, beyond those listed in Art 5, might fall within s 10(1)112. In particular, it is not necessary to consider whether, as the Australian Human Rights Commission and the National Congress suggested, there is a right to be free from racial discrimination. It may be doubted that by reason of the impugned provisions Aboriginal persons (whether those who reside on Palm Island or some wider class) do not enjoy the same rights to equal treatment before the courts and the same rights of access to any place or service as persons of any other race. It is not necessary, however, to decide these issues. It is sufficient in this appeal to consider only the right to own property. The right to own property The ambiguity and looseness with which the word "property" can be used is notorious113. Particularly when speaking of a human right to own property, it is necessary to identify the level of generality or abstraction at which that right is being considered. The right to own property might be spoken of in terms of a freedom: the right to own (or perhaps possess or use) property without any (arbitrary, disproportionate or unwarranted) interference114. But adopting this framework for analysis would inevitably shift debate to when and in what circumstances an interference with ownership of property is unacceptable. In relation to liquor, the production and sale of which has long been regulated, the debate may well centre upon whether the particular form of regulation was necessary or desirable. There is no textual or other footing for an analysis of that kind to be undertaken in 112 See generally Native Title Act Case (1995) 183 CLR 373 at 436. 113 Yanner v Eaton (1999) 201 CLR 351 at 366-367 [18]-[19], 388-389 [85]-[86]; [1999] HCA 53; Hohfeld, "Some Fundamental Legal Conceptions as Applied in Judicial Reasoning", (1913) 23 Yale Law Journal 16 at 21-22. 114 cf, for example, Aurukun [2012] 1 Qd R 1 at 103 [266]. Hayne applying s 10. Indeed, this framework for analysis would appear to be little more than another species of those arguments about "discrimination" which would restrict impermissibly the operation of s 10. At its most abstract, reference might be made to the right to own property without attempting to elucidate what is meant by "own" or to connect the right with any particular object of tangible or intangible property. Approaching the matter in this way will often, perhaps usually, be unhelpful. It is an approach which does not focus attention sufficiently upon how the impugned provisions intersect with the right. And it is an approach which tends to assume either that the relevant right is absolute or that s 10 applies only where persons of one race do not enjoy a right enjoyed by persons of another race. That is, this form of analysis tends to obscure the operation of s 10 in cases, like the present, where it is said that persons of one race enjoy a right "to a more limited extent" than persons of another race. Consideration of that issue requires close attention to the legal and practical operation of the legislation to which it is alleged s 10 applies in order to identify with some specificity what right is enjoyed by persons of one race and how that right is not enjoyed, or is enjoyed to a more limited extent, by persons of another. Enjoyment of the right to own property to a more limited extent Because argument proceeded by reference It will be recalled that one of the central disputes in this Court was whether the groups of persons for consideration should be identified by reference to concepts of to place. "discrimination", the issue was treated as depending upon selecting an appropriate comparator to decide whether there was racial discrimination. Was the relevant comparator a non-Aboriginal person on Palm Island (as the respondent submitted) or was the relevant difference in enjoyment of rights to be discerned (as the appellant submitted) by comparing the rights of an Aboriginal person on Palm Island with the rights of a non-Aboriginal person not in a restricted area? Neither argument can be accepted in its entirety because both arguments were framed largely by reference to the conceptual apparatus of discrimination rather than the statutory inquiry about different enjoyment of rights. But the respondent's argument must be wholly rejected. Observing, as the respondent did, that non-Aboriginal persons on Palm Island are subject to the same restrictions as Aboriginal persons demonstrates only that the impugned provisions do not take race as a criterion for their operation. That is a necessary but not a sufficient condition for a law to be consistent with s 10. Section 10 is not confined to laws the purpose of which can be described as discriminatory and is not confined in its application to laws which expressly use race as a criterion of operation. Hayne Implicit in the respondent's argument was the proposition that the fact that the impugned provisions applied to some (if relatively few) non-Aboriginal persons on Palm Island denied the application of s 10. That proposition cannot stand with the text of s 10(1). Section 10(1) applies where, by reason of a relevant law, some persons of one race do not enjoy a right to the same extent as persons who are not of that race. Section 10(1) neither expressly nor impliedly requires demonstration that all persons of a particular race do not enjoy a particular right to the same extent as members of another race. If it had been intended to confine the operation of s 10(1) to laws which applied generally to all members of one race, that might have been done by expressing the condition as "if the (or all) persons of a particular race". But that was not done. There is no foundation in the text and purpose of s 10 or the RDA more generally for concluding that s 10(1) deals only with laws which affect all members of one race. It will be recalled that the Commonwealth submitted that s 10 is not engaged because any place in Queensland, regardless of the race of those who reside or are present there, could be declared a "restricted area". This submission sought to compare the rights enjoyed by persons on Palm Island with the rights that would be enjoyed by persons elsewhere in Queensland if provisions like the impugned provisions were to be applied in areas in which the latter group of persons resided or were present. The utility of making such a hypothetical comparison was not demonstrated. It should be put aside as irrelevant. The Liquor Act regulates the acquisition and disposition of rights in respect of particular forms of chattel. It prescribes who may buy and who may sell liquor and where those transactions may occur. It regulates where liquor may be consumed115 and, in some cases, forbids116 having liquor in possession for consumption outside a specified area. In its critical operation, the Liquor Act (with the Liquor Regulation) regulates possession of liquor in public in certain places. That is, the impugned provisions prohibit the exercise of one of the bundle of rights which together make up that legally recognised and enforced relationship between a person and a chattel described as "ownership" of the chattel. The prohibition operates only in some places. Outside those places, a legally competent person may have in possession in a public place any liquor which he or she owns or has the right to possess. The Liquor Act and the Liquor Regulation, together, treat the exercise 115 See, for example, ss 100 and 101 dealing with the consumption of liquor sold under the authority of a "general purpose permit". 116 See s 101(1)(b). Hayne by persons of their rights of ownership of particular chattels differently according to the place of exercise. It is important to recognise that, even though the impugned provisions take geographical place as the criterion for their operation, they deal with the rights of persons. When it is said, correctly, that the impugned provisions apply equally according only to whether a person is in a restricted area on Palm Island, it remains of the very first importance to the application of the RDA to recognise that the effect of the impugned provisions is on the rights of those who live on Palm Island (and any other person who is visiting Palm Island). Those who live on Palm Island are overwhelmingly Aboriginal persons. The extent to which the residents of Palm Island enjoy the right to own property differs from the extent to which persons resident elsewhere in Queensland enjoy that right, and argument in this Court proceeded on the implicit footing that those who are resident elsewhere are predominantly non-Aboriginal persons. Unless s 8(1) of the RDA applies, s 10 is engaged. This conclusion neither proceeds from the premise nor entails the conclusion that the appellant has a universal right to possess or consume liquor. The appellant rightly disclaimed any right of that kind. Section 10 does not entail that those affected by the impugned provisions, who are predominantly Aboriginal persons, have any absolute right to possess or consume liquor. Rather, unless s 8(1) applies, those Aboriginal persons are entitled to enjoy the right to possess or consume liquor to the same extent as non-Aboriginal persons. Section 8(1) of the RDA and Art 1(4) of the Convention In so far as presently relevant, s 8(1) of the RDA provides that "[t]his Part [which includes s 10] does not apply to, or in relation to the application of, special measures to which paragraph 4 of Article 1 of the Convention applies". Paragraph 4 of Art 1 provides: "Special measures taken for the sole purpose of securing adequate advancement of certain racial or ethnic groups or individuals requiring such protection as may be necessary in order to ensure such groups or individuals equal enjoyment or exercise of human rights and fundamental freedoms shall not be deemed racial discrimination, provided, however, that such measures do not, as a consequence, lead to the maintenance of separate rights for different racial groups and that they shall not be continued after the objectives for which they were taken have been achieved." The provisos within Art 1(4) deal with the maintenance of separate rights for different racial groups and with how long special measures may be maintained. It was not suggested that either of these provisos had to be considered in this appeal and they may be put aside from consideration. Hayne It is also useful to notice Art 2(2) of the Convention, which imposes an obligation on States Parties to take special measures in the following terms: "States Parties shall, when the circumstances so warrant, take, in the social, economic, cultural and other fields, special and concrete measures to ensure the adequate development and protection of certain racial groups or individuals belonging to them, for the purpose of guaranteeing them the full and equal enjoyment of human rights and fundamental freedoms. These measures shall in no case entail as a consequence the maintenance of unequal or separate rights for different racial groups after the objectives for which they were taken have been achieved." Section 8(1) and Art 1(4) (together with Art 2(2)) were examined by this Court in Gerhardy but no settled interpretation of these provisions emerges from that case. Brennan J, who considered the provisions in the most detail, said117 that four indicia of a "special measure" emerge from Arts 1(4) and 2(2): "A special measure (1) confers a benefit on some or all members of a class, (2) the membership of which is based on race, colour, descent, or national or ethnic origin, (3) for the sole purpose of securing adequate advancement of the beneficiaries in order that they may enjoy and exercise equally with others human rights and fundamental freedoms, (4) in circumstances where the protection given to the beneficiaries by the special measure is necessary in order that they may enjoy and exercise equally with others human rights and fundamental freedoms." The indicia which Brennan J identified do not refer to that part of Art 1(4) which speaks of the group in question "requiring such protection as may be necessary in order to ensure such groups or individuals equal enjoyment or exercise of human rights and fundamental freedoms". Gibbs CJ118 and Dawson J119, and perhaps Mason J120, treated these words in Art 1(4) as providing a requirement that must be met if a particular measure is to be a "special measure". Other members of the Court did not advert to this issue. The text of Art 1(4) suggests that a "special measure" has two characteristics. First, the measure must be for a group described in the Article in the following way: "racial or ethnic groups or individuals requiring such 117 (1985) 159 CLR 70 at 133. 118 (1985) 159 CLR 70 at 88. 119 (1985) 159 CLR 70 at 161-162. 120 (1985) 159 CLR 70 at 105; but see at 99-100. Hayne protection as may be necessary in order to ensure such groups or individuals equal enjoyment or exercise of human rights and fundamental freedoms". Second, the measure must be one "taken for the sole purpose of securing adequate advancement" of those groups. What is "adequate advancement" can sensibly be understood only in the sense of "ensur[ing] such groups or individuals equal enjoyment or exercise of human rights and fundamental freedoms". This understanding is reinforced by reference to Art 2(2), which refers to "measures to ensure the adequate development and protection of [the relevant group] for the purpose of guaranteeing [the relevant group] the full and equal enjoyment of human rights and fundamental freedoms" (emphasis added). Two further points must then be made about "special measures". First, the text of Arts 1(4) and 2(2) does not require that the racial or ethnic groups or individuals whose interests are said to be advanced be consulted by government before the measure in question is enacted. Contrary to the National Congress' submissions, government consultation is not a legal requirement for a measure to be characterised as a "special measure" under s 8(1) of the RDA. There is no textual or other basis in the RDA or the Convention for imposing such a requirement. And contrary to the appellant's submissions, lack of consultation does not have the consequence that a "compelling justification" will be required before a law will be characterised as a "special measure". That too has no foundation in the statutory text. At most, the fact that consultation has taken place may assist, in some cases, in determining whether a particular law meets the statutory criteria for a "special measure". Second, the respondent and the Commonwealth were right to submit that the reference in Art 1(4) to such protection "as may be necessary in order to ensure" qualifies the category of persons for whom special measures may be taken. The expression does not qualify, and become a condition for, the measure itself. This conclusion follows from the English text of the Convention set out in the schedule to the RDA. It may also be noted, however, that it is a conclusion which follows even more clearly from the French text of the Convention, where the words "ayant besoin de la protection qui peut Γͺtre nΓ©cessaire" attach to "certains groupes raciaux ou ethniques ou d'individus" and not to "[l]es mesures spΓ©ciales". Each of those asserting that the impugned provisions were not a "special measure" submitted that, to be a "special measure", the relevant law must be "proportionate" to a legitimate end. Expressly or implicitly, proportionality analysis was said to enter into the debate through the term "necessary" in Art 1(4). Once it is understood, however, that the idea introduced by the word "necessary" qualifies the group affected by the purported "special measure", and not the measure itself, its use provides no foundation for proportionality analysis. These submissions pointed to larger questions about s 8(1). How does the Court decide whether a law is a "special measure"? Is the Court to decide what is Hayne "adequate advancement"? On what materials is that decision to be made? No comprehensive answer to these questions need be given in this appeal. It is enough for present purposes to consider only some aspects of them. In Gerhardy, there was some discussion121 about whether, and to what extent, questions of need for advancement and suitability of the chosen legislative means for achieving that advancement could be the subject of evidence and controversy in deciding whether a challenged law was a special measure. Brennan J referred122 to these issues as being "at least in some respects, a political question". The utility of that particular description need not be examined in this appeal and it is neither necessary nor desirable to embark upon any general consideration of whether facts relevant to these issues are to be treated as facts which "cannot and do not form issues between parties to be tried"123 in the ordinary manner. In Gerhardy, some members of the Court identified the relevant question as whether the law in question is "capable of being reasonably considered to be appropriate and adapted to achieving"124 the sole purpose described in Art 1(4). That formulation would appear not to admit of any proportionality analysis. It might be said, however, that framing the question in this way may not sufficiently direct attention to the possibility that what is said to be a "special measure" is in truth the maintenance of separate rights for different racial groups and that this possibility can only be revealed by considering questions of proportionality. But what is the relevant question to ask to determine whether the relevant law is "proportionate" and what is the textual basis for asking it? It might be said that "necessary" in Art 1(4) means "proportionate" with the result that that Article should be read as postulating a group of persons who require "proportionate" protection to ensure their enjoyment and exercise of human rights and fundamental freedoms. It might then be said that a measure will only secure "adequate advancement" within the meaning of Art 1(4) if the 121 (1985) 159 CLR 70 at 87-88 per Gibbs CJ, 105 per Mason J, 107-108 per Murphy J, 113 per Wilson J, 137-139, 141-143 per Brennan J, 152-153 per Deane J, 161-162 per Dawson J. 122 (1985) 159 CLR 70 at 138. 123 (1985) 159 CLR 70 at 87-88 per Gibbs CJ, 141-142 per Brennan J, both by reference to Breen v Sneddon (1961) 106 CLR 406 at 411 per Dixon CJ; [1961] HCA 67 and Commonwealth Freighters Pty Ltd v Sneddon (1959) 102 CLR 280 at 292 per Dixon CJ; [1959] HCA 11. 124 (1985) 159 CLR 70 at 149 per Deane J; see also at 113 per Wilson J, 137-139 per Brennan J, 161-162 per Dawson J; cf at 105 per Mason J. Hayne measure is proportionate. To adapt one formulation put forward by the Commonwealth in oral argument, the measure must be taken for the sole purpose of ameliorating a group's more limited enjoyment of rights in a manner which is proportionate to the extent and nature of that limited enjoyment. Little attention was given in argument to what precisely might be involved in this kind of proportionality analysis beyond making passing reference to Castlemaine Tooheys Ltd v South Australia125, Betfair Pty Ltd v Western Australia126 and other decisions of this Court about the operation of the Constitution. Those cases were decided in contexts far removed from the RDA and, more particularly, the text of s 8(1). Section 8(1), by reference to Art 1(4), sets out the statutory criteria for a "special measure". In applying s 8(1), what the Court is engaged in is an exercise in characterisation. Does a particular law meet those statutory criteria? The first criterion directs attention to the existence of a racial or ethnic group (or individuals of a group of those kinds) members of which are not enjoying or exercising human rights or fundamental freedoms to the same extent as persons of another racial or ethnic group. In cases where s 8(1) is in issue because s 10 will otherwise be engaged, this question can often, perhaps usually, be answered by reference to the particular group (or individuals) which is (or who are) enjoying or exercising human rights or fundamental freedoms to a more limited extent than another group (or other individuals). The second criterion directs attention to the connection between the measure and its sole purpose, which must be the advancement of the particular racial or ethnic group (or individuals) in need of that protection. No doubt that connection must be discerned by reference to the legal and practical operation of the measure in question. But, as has already been explained, it is to be doubted whether s 8(1) requires any proportionality analysis of the kind that has found favour in certain other jurisdictions. The text of s 8(1) (and through it Art 1(4)) provides more specific guidance about the content of the connection which is required. It will be recalled that the definition of "special measures" in Art 1(4) provides that the measure must be taken for the sole purpose of "securing adequate advancement" of the relevant group or individuals, which must be understood in the sense of "ensur[ing] such groups or individuals equal enjoyment or exercise of human rights and fundamental freedoms". Some content to the relevant connection to be considered can be derived from the term "securing". That term suggests that a court applying s 8(1) must consider 125 (1990) 169 CLR 436; [1990] HCA 1. 126 (2008) 234 CLR 418; [2008] HCA 11. Hayne whether the relevant law is conducive to ensuring the relevant groups or individuals equal enjoyment or exercise of their rights and freedoms. The same idea is captured in the first element of a special measure identified by Brennan J, which was127 that it confer "a benefit on some or all members of a class". Further, and much more substantial, content can be derived from the term "adequate". The term "adequate" does not direct a court to consider whether a goal could be achieved in any better way. What the term "adequate" naturally directs attention to is whether the same goal can be achieved to the same extent by an alternative that would restrict the rights and freedoms of the relevant group or individuals to a lesser extent. If an alternative of that kind exists, it could readily be concluded that the law said to be a special measure is not "adequate". It would not be adequate because the same result could be achieved in a way that is less restrictive of the rights and freedoms of the group or individuals in question. It is in this way, and to this extent, that proportionality analysis is relevant to s 8(1)128. That the existence of less restrictive alternatives for achieving the same goal to the same extent is relevant to the application of s 8(1) is not to suggest that a parliament cannot create a norm of conduct and provide that contravention of the norm is a crime. Much more often than not, this will be the only effective way of ensuring, as far as possible, compliance with the norm. The National Congress' submission that a law which makes it a criminal offence to engage in certain conduct "is not capable of being characterised as a special measure" must therefore be rejected. And the Australian Human Rights Commission's submission that "an exceptional circumstance" would be required to justify the making of criminal offences as a special measure must also be rejected. Against this background, it is possible to summarise the questions that are presented by s 8(1) in this appeal as follows. First, is there a racial group members of which are not enjoying or exercising human rights or fundamental freedoms to the same extent as persons of another race? Second, do the impugned provisions have a sole purpose which is conducive to the equal enjoyment and exercise of rights and freedoms by the relevant racial group and could the same goals be achieved to the same extent by some alternative means? The balance of these reasons will show that the impugned provisions are a "special measure". 127 Gerhardy (1985) 159 CLR 70 at 133. 128 See Rowe v Electoral Commissioner (2010) 243 CLR 1 at 133-142 [431]-[466] per Kiefel J; [2010] HCA 46; Momcilovic v The Queen (2011) 245 CLR 1 at 214 [556] per Crennan and Kiefel JJ; [2011] HCA 34. Hayne Application of s 8(1) to the impugned provisions It is of the very first importance to notice that, under s 173G(3) of the Liquor Act, the Minister may recommend a regulation declaring a place to be a "restricted area" only if satisfied that the declaration "is necessary to achieve the purpose of this part". And, as noted earlier in these reasons, the purpose of Pt 6A, expressed in s 173F, is "minimising ... harm caused by alcohol abuse and misuse and associated violence; and ... alcohol related disturbances, or public disorder, in a locality". The appellant did not submit that the declaration of areas on Palm Island as restricted areas was made beyond power. It must be assumed, therefore, that the areas of Palm Island were declared to be restricted areas for the purpose of "minimising ... harm caused by alcohol abuse and misuse and associated violence; and ... alcohol related disturbances, or public disorder" (emphasis added) on Palm Island, the residents of which are overwhelmingly Aboriginal persons. And it must be assumed that the Minister was satisfied that a declaration was necessary for the purpose of Pt 6A. The impugned provisions affected the enjoyment of rights by Aboriginal persons. The impugned provisions themselves, and the extrinsic materials relating to them, demonstrate that they related to persons within a racial group. They related to Aboriginal persons resident on Palm Island. Alcohol abuse and misuse, and the violence, disturbances and public disorder associated with those evils, all detract from the equal enjoyment and exercise of human rights and fundamental freedoms. Minimising those evils and their consequences, particularly the incidence of alcohol-fuelled violence, is essential to equal enjoyment and exercise of rights and freedoms. Those who live in fear of violence cannot exercise their rights. They are not free. And when the violence is spread through a community, the members of that community cannot exercise their rights and freedoms. The condition for declaring areas of Palm Island to be restricted areas and the extrinsic materials relating to the impugned provisions demonstrate that Aboriginal persons on Palm Island constituted a group who required protection as may be necessary to ensure their equal enjoyment and exercise of rights and freedoms. They also demonstrate that the impugned provisions were directed solely to the purpose of minimising both the causes and the consequences of abuse and misuse of alcohol in the areas declared as restricted areas. Indeed, the appellant expressly accepted that "some form of alcohol management plan is appropriate for Palm Island". It follows that the impugned provisions must be taken to have been framed with an intention that would meet the definition of a special measure. That is, these matters demonstrate that the impugned provisions were directed solely to the adequate advancement of the community of Palm Island in the sense of ensuring members of that community the equal enjoyment or exercise of their human rights and fundamental freedoms. Hayne There was limited debate in this Court about the availability of less restrictive means to achieve the goals sought by the Queensland Parliament and Executive. In argument, there was a faint suggestion that the Queensland Parliament could, and thus should, have provided "better support services for those who drink excessively" or provided for "restricted hours of sale". Assuming that these measures could have been implemented, they would not have achieved the same goals to the same extent as the impugned provisions. If either or both of these measures could have been implemented, their availability would not demonstrate that the impugned provisions were not enacted for the sole purpose of securing the adequate advancement of Aboriginal persons on Palm Island. The impugned provisions are a "special measure" within s 8(1). Because that is so, s 10 does not apply to the impugned provisions. Conclusion and orders For these reasons, the appeal should be dismissed. The respondent did not seek costs. Crennan CRENNAN J. The issues, the facts and the legislation are set out in the reasons of Hayne J, and the same definitions as used by his Honour are employed in these reasons. For the reasons given by his Honour, I agree that unless s 8(1) of the RDA applies, s 10 of the RDA is engaged in respect of the impugned provisions. I also agree that the appeal should be dismissed as proposed by his Honour. What follow are my reasons for concluding that the impugned provisions fit the character of "special measures", as defined by Art 1(4) of the Convention, and given effect by s 8(1) of the RDA. In question was, principally, whether the characterisation of a law as a "special measure" within the meaning of Art 1(4) depends on whether the government implementing that law engages in consultation with its beneficiaries, or their representative bodies, in order to obtain their consent to that law. It was also contended that the impugned provisions, which prohibited and penalised certain conduct, and which contained no limitation, were a disproportionate means of achieving their stated purpose. temporal Submissions on consultation The appellant accepted that there is no universal human right to possess or consume alcohol. Further, the appellant accepted that "some form of alcohol management plan is appropriate for Palm Island". It became clear in oral argument that such a plan would have as an element the reduction of the consumption of alcohol on Palm Island, in order to reduce alcohol-related problems, the existence of which was not disputed. The appellant contended, however, that a law made in the absence of consultation directed to obtaining the consent of those affected by it, and which would otherwise engage s 10 of the RDA, would require a "compelling justification", and, as a correlative, a high level of judicial scrutiny, to determine whether it fell within the terms of s 8(1) of the RDA. Consultation of the kind mentioned was said to be a factor of "significant importance" in applying s 8(1). The National Congress, appearing as amicus, went further, and contended that in the absence of consent from at least a representative body of beneficiaries, a law could not be characterised as a "special measure" intended to benefit indigenous peoples. The arguments in support of the proposition that the degree or type of consultation with beneficiaries prior to enactment affects whether a law can be characterised as a "special measure" within the meaning of Art 1(4) of the Convention were based on a number of considerations. Recitals in the Preamble to the Convention, which identify its objects and purposes, refer to securing understanding of and respect for "the dignity and equality inherent in all human beings", and the necessity of eliminating racial discrimination. The dignity and equality of beneficiaries were said to underpin Crennan the idea that, in the absence of consultation, a "compelling justification" (or a higher degree of persuasion) was needed for a measure to qualify as a "special measure". As well, reliance was placed on what was said by Brennan J in Gerhardy v Brown129 referring to Arts 1(4) and 2(2) of the Convention. In discussing the third of four identified indicia for determining whether a measure is a special measure, namely, that a special measure must be "for the sole purpose of securing adequate advancement of the beneficiaries in order that they may enjoy and exercise equally with others human rights and fundamental freedoms"130, his Honour said131: "The wishes of the beneficiaries for the measure are of great importance (perhaps essential) in determining whether a measure is taken for the purpose of securing their advancement." Reliance was also placed on materials extraneous to the Convention, described as evidencing developments in the international understanding of the meaning of "special measures" as defined in Art 1(4) of the Convention. Article 2(2) imposes a positive obligation on States Parties to take special measures "to ensure the adequate development and protection of certain racial groups or individuals belonging to them, for the purpose of guaranteeing them the full and equal enjoyment of human rights and fundamental freedoms". Under Art 5, States Parties undertake "to prohibit and to eliminate racial discrimination in all its forms" and to guarantee the right of everyone to equality before the law in the enjoyment of identified human rights, which include "[t]he right to security of person and protection by the State against violence or bodily harm"132. Under Art 9, States Parties undertake to submit regular reports on measures which they have adopted and which give effect to the provisions of the Convention, for consideration by the Committee on the Elimination of Racial Discrimination, instituted under Art 8 of the Convention ("the Committee"). The Committee "may make suggestions and general recommendations based on the examination of the reports and information received from the States Parties" to 129 (1985) 159 CLR 70; [1985] HCA 11. 130 (1985) 159 CLR 70 at 133. 131 (1985) 159 CLR 70 at 135. 132 International Convention on the Elimination of All Forms of Racial Discrimination, Art 5(b). Crennan interests are taken without the General Assembly of the United Nations133. A general recommendation made by the Committee in 1997 noted that indigenous peoples have been and are discriminated against and "in particular ... they have lost their land and resources to colonists, commercial companies and State enterprises" and that indigenous peoples' culture and historical identity require recognition and respect in order to be preserved. In that context, States Parties were called upon to "ensure that members of indigenous peoples have equal rights in respect of effective participation in public life and that no decisions directly relating to their rights and their General Recommendation 32, made by the Committee in 2009, dealt in some detail with "special measures" in Art 1(4) and "special and concrete measures" in Art 2(2), and the relationship between Arts 1(4), 2(2) and 1(1) (which defines "racial discrimination")135. The Committee stated that its purpose was to assist States Parties in discharging their obligations under the Convention, including reporting obligations. The Committee noted that the Convention is "based on the principles of the dignity and equality of all human beings"136. The Committee then stated that "[s]pecial measures should be appropriate to the situation to be remedied, be legitimate, necessary in a democratic society, respect the principles of fairness and proportionality" and "should be designed and implemented on the basis of need, grounded in a realistic appraisal of the current situation of the individuals and communities concerned"137. In that context, the Committee then informed consent"134. 133 International Convention on the Elimination of All Forms of Racial Discrimination, Art 9(2). 134 Committee the Elimination "General Recommendation on the rights of indigenous peoples", recorded in the Report of the Committee on the Elimination of Racial Discrimination, UN GAOR, 52nd sess, Supp No 18, UN Doc A/52/18 (1997) 122 at 122. of Racial Discrimination, 135 Committee on the Elimination of Racial Discrimination, "General recommendation No 32 (2009): The meaning and scope of special measures in the International Convention on the Elimination of Racial Discrimination", recorded in the Report of the Committee on the Elimination of Racial Discrimination, UN GAOR, 64th sess, Supp No 18, UN Doc A/64/18 (2009) 152 at 152-153 [4]. 136 Committee on the Elimination of Racial Discrimination, "General recommendation No 32 (2009): The meaning and scope of special measures in the International Convention on the Elimination of Racial Discrimination", recorded in the Report of the Committee on the Elimination of Racial Discrimination, UN GAOR, 64th sess, Supp No 18, UN Doc A/64/18 (2009) 152 at 153 [6]. 137 Committee on the Elimination of Racial Discrimination, "General recommendation No 32 (2009): The meaning and scope of special measures in the International Convention on the Elimination of Racial Discrimination", recorded in the Report of (Footnote continues on next page) Crennan stated that States Parties "should ensure that special measures are designed and implemented on the basis of prior consultation with affected communities and the active participation of such communities"138. Statements to similar effect in the United Nations Declaration on the Rights of Indigenous Peoples139, and an advice adopted by the United Nations Human Rights Council Expert Mechanism on the Rights of Indigenous Peoples140, were also relied upon. Each of those latter materials referred to a duty on States to obtain the "free, prior and informed consent" of indigenous peoples before adopting legislation affecting them141. The statutory scheme and consultation Before turning to consider the above submissions, it is convenient to consider briefly the statutory scheme at issue in this case and the manner in which it provides for consultation. The scheme for declaring, by regulation, an area as a "restricted area" and for regulating the quantity and type of liquor a person may have in his or her possession, in a public place, in a restricted area (s 168B and Pt 6A (ss 173F-173J)) was inserted into the Liquor Act by the Indigenous Communities Liquor Licences Act 2002 (Q). An area so declared might be a "community area", or part of a community area, under the Aboriginal and Torres Strait Islander Communities (Justice, Land and Other Matters) Act 1984 (Q)142. Under regulations made pursuant to that Act, a "community justice group" could be established for a community area143. The stated purpose of Pt 6A of the Liquor Act, in providing for the declaration of areas, is to minimise the Committee on the Elimination of Racial Discrimination, UN GAOR, 64th sess, Supp No 18, UN Doc A/64/18 (2009) 152 at 155 [16]. 138 Committee on the Elimination of Racial Discrimination, "General recommendation No 32 (2009): The meaning and scope of special measures in the International Convention on the Elimination of Racial Discrimination", recorded in the Report of the Committee on the Elimination of Racial Discrimination, UN GAOR, 64th sess, Supp No 18, UN Doc A/64/18 (2009) 152 at 155 [18]. 139 Adopted by the General Assembly of the United Nations on 13 September 2007. 140 Expert Mechanism Advice No 2 (2011): Indigenous peoples and the right to participate in decision-making. 141 United Nations Declaration on the Rights of Indigenous Peoples, Art 19; Expert Mechanism Advice No 2 (2011): Indigenous peoples and the right to participate in decision-making, par 21. 142 Liquor Act 1992 (Q), s 173G(2). 143 Aboriginal and Torres Strait Islander Communities (Justice, Land and Other Matters) Act 1984 (Q), s 18(1). Crennan "harm caused by alcohol abuse and misuse and associated violence" and "alcohol related disturbances, or public disorder, in a locality"144. Section 173G(3) of the Liquor Act provides that in recommending the Governor in Council make a regulation, the Minister administering the Act "must be satisfied the declaration is necessary to achieve the purpose of [Pt 6A]". Section 173I applies to consultation with community justice groups for community areas affected by declarations, and relevantly provides: "(2) The Minister may recommend the Governor in Council make the regulation only if the Minister has consulted with the community justice group for the community area about the declaration or, if the group made a recommendation about the declaration, the Minister has considered the recommendation. (4) However, failure to comply with subsection (2) ... does not affect the validity of a regulation made for the subsection." Where subordinate legislation follows consultation, an explanatory note is required to accompany the tabling of the legislation in the Queensland Parliament, where that legislation is subject to disallowance145. In the explanatory note accompanying the subordinate legislation which declared the relevant parts of Palm Island to be restricted areas146 it was explained that there was a division of opinion about proposed alcohol restrictions on Palm Island, which division it was said "inhibited community agreement on an Alcohol Management Plan"147. The Court of Appeal found that that statement about the division of opinion on Palm Island was not contradicted by affidavits tendered in the Townsville District Court148. In a subsequent explanatory note, it was stated that alcohol-related harm levels in communities subject to regulation 144 Liquor Act 1992, s 173F. See also Indigenous Communities Liquor Licences Act 2002 (Q), s 3(1). 145 Statutory Instruments Act 1992 (Q), ss 49 and 50; Legislative Standards Act 1992 (Q), s 24(1). 146 Liquor Amendment Regulation (No 4) 2006 (Q). 147 Queensland, Legislative Assembly, Liquor Amendment Regulation (No 4) 2006, Explanatory Notes at 2 [9]. 148 R v Maloney [2013] 1 Qd R 32 at 68 [112]. Crennan of the possession of liquor (which included Palm Island) "range from 7.5 times to 13.6 times Queensland's expected number of hospital admissions for assault; and from 11.2 times to 24.6 times the expected number of reported offences against the person"149. Section 8(1) of the RDA and the Convention It was observed by Mason J in Gerhardy v Brown that the text of s 10(1), which concerns a law's differential effect on the enjoyment of rights, is focused on adverse discrimination against, rather than positive discrimination in favour of, a particular race150. For that reason, a measure which effects a differential restriction on a right identified in Art 5, albeit in order to achieve protection of the kind identified in Arts 1(4) and 2(2) in respect of another right identified in Art 5, will inevitably fall to be considered under s 8(1). In Gerhardy v Brown, Brennan J identified four indicia about which a court would need to be satisfied before characterising a measure as a special measure151. The appellant's arguments involved particularly the third and fourth indicia, which together raise questions of the proportionality of a measure involving a restriction on a right or freedom such as would otherwise engage Liquor restrictions and dignity and equality The appellant's argument that the dignity and equality of the beneficiaries of a measure are necessarily compromised in the absence of consultation about the measure must be rejected. Laws regulating the liquor industry and the consumption of liquor are legion, and commonly involve restrictions on the availability of liquor, expressed most obviously in licensing regimes. Such laws have long been premised on the straightforward assumption that alcohol is susceptible to misuse, and that restrictions on the availability of liquor reduce consumption, which in turn reduces the extent and frequency of social problems associated with excessive consumption of alcohol, such as violence and public disorder. The Liquor Act is no exception, although it must be acknowledged that the restrictions on the possession of liquor in a public place which apply on Palm Island, the residents of which are overwhelmingly Aboriginal people, go further than restrictions on other persons in Queensland and in Australia more broadly. 149 Queensland, Legislative Assembly, Liquor Amendment Regulation (No 3) 2008, Explanatory Notes at 2. 150 Gerhardy v Brown (1985) 159 CLR 70 at 100-101. 151 (1985) 159 CLR 70 at 133. Crennan In the general context of liquor regulation, and in the specific context of protecting a community against alcohol-related violence and public disorder, infringement of the dignity and equality of some members of a racial or ethnic group or individuals is not demonstrated by the enactment of a law, containing a prohibition and a penalty in relation to the possession of liquor, without consultation with, or the prior agreement of, persons affected by the prohibition. "such protection as may be necessary" The test of whether a law is a "special measure" as posited by Art 1(4) of the Convention directs attention to the expression "such protection as may be necessary", which was dealt with most explicitly in Gerhardy v Brown by Brennan J, in his fourth indicium152. That language in the text of Art 1(4), to which effect is given in domestic law by s 8(1) of the RDA, directs attention to the test of reasonable necessity, which has been identified and explained by this Court as a test of the legitimacy and proportionality of a legislative restriction of a freedom or right which is constitutionally, or ordinarily, protected153. In this regard, Art 1(4) does not express or imply a test by reference either to unanimity of views among members of the relevant group or, in the absence of consultation or consent, to a legislative purpose, or justification, which is "compelling". The question of whether or not members of a particular group have been consulted does not bear on the assessment whether the protection given to the beneficiaries by the relevant measure is "necessary in order to ensure [the beneficiaries] equal enjoyment or exercise of human rights and fundamental freedoms"154. The notions of a need for a "compelling justification" or purpose of a law, and of differing levels of judicial scrutiny, seem to owe something to the principles developed in the United States of America in relation to the equal protection clause of the Fourteenth Amendment to the United States Constitution, as explained in Regents of the University of California v Bakke155, cited by Brennan J in Gerhardy v Brown156. There, legislative restrictions employing "[r]acial and ethnic distinctions of any sort are inherently suspect and thus call their for examination" the most determine exacting judicial 152 (1985) 159 CLR 70 at 133. 153 Betfair Pty Ltd v Western Australia (2008) 234 CLR 418 at 477 [102]-[103]; [2008] HCA 11. See also Thomas v Mowbray (2007) 233 CLR 307 at 331-333 [20]-[26] per Gleeson CJ; [2007] HCA 33. 154 See Gerhardy v Brown (1985) 159 CLR 70 at 133 per Brennan J. 155 438 US 265 at 290-291 (1978). 156 (1985) 159 CLR 70 at 130-131. See also Grutter v Bollinger 539 US 306 (2003). Crennan constitutionality157. Such a law can only be justified if it furthers "a compelling ... purpose" and, even then, only if no less restrictive alternative is available158. Notwithstanding distinct echoes in the appellant's submissions, the language of "compelling justification" was stated by the appellant to have been drawn from Mason CJ in Australian Capital Television Pty Ltd v The Commonwealth159. The idea of "compelling justification" underpinned the appellant's use of the acknowledged distinction between direct and incidental burdens on a constitutionally guaranteed freedom160. The appellant deployed that distinction to contend that a law involving a prohibition and a penalty should be seen as analogous to a direct, rather than an incidental, burden on a constitutionally guaranteed freedom. Continuing the analogy, the appellant contended "more rigorous" assessment is required when the issue is whether a law involving a restriction on a right or freedom is a proportionate means to the end of protecting a group, or individuals, in respect of another right or freedom if, in its implementation, no consultation with beneficiaries has occurred. However, nothing in the text of Art 1(4) or Art 2(2), or in the balance of the Convention, supports these propositions. Protective measures in respect of one right or freedom, which achieve their purpose by effecting restrictions on another right or freedom, may not necessarily command consent from those affected. The appellant acknowledged that the consent of beneficiaries to a restrictive, albeit protective, measure might be elusive, but still pressed the arguments regarding consultation. "sole purpose of securing adequate advancement" When Brennan J spoke of "the wishes of beneficiaries" in Gerhardy v Brown161, it was clear from the context that his Honour was making the point that a legislature's conception of "adequate advancement" might be tendentious. This was made plain by his Honour's immediate contrast of an advancement, by a grant of land rights leaving intact the human right of the beneficiaries to freedom of movement, with a purported advancement, by a grant of land rights conditioned on the asserted beneficiaries being confined to that land against their wishes. In the former case, it will be clear that the advancement is capable of 157 Regents of the University of California v Bakke 438 US 265 at 290-291 (1978). 158 Regents of the University of California v Bakke 438 US 265 at 356-357 (1978). 159 (1992) 177 CLR 106 at 143; [1992] HCA 45. 160 Hogan v Hinch (2011) 243 CLR 506 at 555-556 [95]-[99]; [2011] HCA 4; Wotton v Queensland (2012) 246 CLR 1 at 16 [30]; [2012] HCA 2. 161 (1985) 159 CLR 70 at 135, 139. Crennan ensuring that the beneficiaries exercise and enjoy equally with others their human rights and fundamental freedoms; in the latter, not so. His Honour appears to have been saying no more than that the wishes of the beneficiaries may be relevant evidence when determining whether a measure is established to be, as distinct from asserted to be, for the sole purpose of securing an "adequate advancement". Developments in international understanding and the Convention Finally, however generously canons of construction may be applied to the text of an international convention, which often reflects long negotiation and compromise162, the text of Art 1(4) (and Art 2(2)) cannot be amended except by the subsequent agreement of States Parties. The ordinary canons of statutory construction apply to a domestic statute which incorporates an international treaty or convention163. The principle that a statute is to be interpreted and applied, so far as language permits, so that it is in conformity, and not in conflict, with established rules of is a canon of statutory construction165 which does not elevate non-binding extraneous materials over the language of the text of an international convention to which States Parties have agreed. To the extent that extraneous materials were relied upon as support for arguments about the need for consultation, they do not alter the text of the Convention as incorporated into domestic law or import rights or obligations beyond those stated in the Convention, even though they guide States Parties in respect of the reporting obligations to which States Parties have agreed. international law164 162 Adan v Secretary of State for the Home Department [1999] 1 AC 293 at 305. See also Gerhardy v Brown (1985) 159 CLR 70 at 86 per Gibbs CJ; Applicant A v Minister for Immigration and Ethnic Affairs (1997) 190 CLR 225 at 255-256 per McHugh J, 275 per Gummow J; [1997] HCA 4. 163 Minister for Home Affairs (Cth) v Zentai (2012) 246 CLR 213 at 238 [65]; [2012] HCA 28. 164 Polites v The Commonwealth (1945) 70 CLR 60 at 68-69 per Latham CJ (citing Maxwell, The Interpretation of Statutes, 8th ed (1937) at 130), 77 per Dixon J, 81 per Williams J; [1945] HCA 3. 165 Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273 at 287- 288; [1995] HCA 20; Kartinyeri v The Commonwealth (1998) 195 CLR 337 at 384 [97] per Gummow and Hayne JJ; [1998] HCA 22; Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476 at 492 [29] per Gleeson CJ; [2003] HCA 2; Coleman v Power (2004) 220 CLR 1 at 27-28 [19] per Gleeson CJ; [2004] HCA 39; Plaintiff M70/2011 v Minister for Immigration and Citizenship (2011) 244 CLR 144 at 234 [247] per Kiefel J; [2011] HCA 32. Crennan In any event, and just as importantly, those materials take democratic society as their background, which includes democratic mechanisms by which representative governments resolve contested policy. Those mechanisms include free, informed public debate, a free press and regular elections. Because of those mechanisms, however precautionary or desirable in some sense consultation with constituents may be (and even if a legislature encourages consultation, as here), ordinarily neither consultation with constituents nor their consent to a law is a precondition to the legality of a statute, particularly a protective measure, passed in Australia by an elected Parliament. Once it is accepted that neither consultation with beneficiaries, nor their consent, nor, in the absence of either, a "compelling justification", are legal prerequisites of a "special measure" within the meaning of Art 1(4) of the Convention, the appellant's main argument in respect of s 8(1) of the RDA falls away. Disproportionate means in respect of purpose? the The discrete contentions impugned provisions were that disproportionate to the need to have some alcohol management plan for Palm Island (as conceded), because they penalised certain conduct and contained no temporal limitations, must be rejected. This is because there was no material before the Court which would permit the Court to doubt that the means were directed to the purpose explained in the extrinsic materials. Nor was there a basis put forward for assessing the capacity of alternative and less restrictive means to effect an equivalent protection of the Palm Island community, and its individual members, from violence and public disorder associated with the misuse of alcohol. This bears on the issue of proportionality and the application of the test of reasonable necessity166. A special measure? In the context of this case, it was not suggested by any party, or intervener, that the legislative purpose of protecting a community, and all individuals within that community, against alcohol-related violence and public disorder was an illegitimate or tendentious legislative purpose, or that it failed to qualify as a purpose capable of securing "the adequate development and protection" (Art 2(2)) or the community, and its individuals, in relation to security of the person and freedom the "adequate advancement" (Art 1(4)) of 166 As to which, see Attorney-General (SA) v Corporation of the City of Adelaide (2013) 87 ALJR 289 at 335-336 [206]; 295 ALR 197 at 254; [2013] HCA 3; Monis v The Queen (2013) 87 ALJR 340 at 396 [280]; 295 ALR 259 at 330; [2013] HCA Crennan from violence. As already mentioned, the weight of the appellant's arguments rested on contentions about the need for consultation, and subsidiary arguments that the impugned provisions were a disproportionate means of achieving an admittedly legitimate end. The materials before the Court conveyed the background to the impugned provisions, namely, the existence of violence and public disorder in certain communities caused by the misuse of alcohol. Relevant decisions taken, and explained in the extrinsic materials by the responsible arms of government, in respect of the need to protect communities, including Palm Island, from such violence and public disorder were also before the Court. As has been noted above, the appellant accepted the need for an alcohol management plan for Palm Island, the details of which divided the community. Those materials justify the conclusion that the Aboriginal people of the Palm Island community require the protection afforded by the impugned provisions, and that those provisions are reasonably necessary to achieve that protection. The sole purpose of the impugned provisions is the adequate development or advancement of the community of Palm Island, and the individuals within it, and their protection from alcohol-related violence and public disorder. That protection is integral to the rights of all members of the group to personal security and freedom from violence and bodily harm. Accordingly, those provisions are a special measure within Art 1(4) of the Convention. 140 KIEFEL J. The appellant is an Aboriginal woman who resides on Palm Island, which lies off the coast of North Queensland. All but some three per cent of the residents of Palm Island are Aboriginal persons. The appellant was convicted in the Magistrates Court of Queensland of the offence, under s 168B(1) of the Liquor Act 1992 (Q), of being in possession of more than a prescribed quantity of liquor in a public place within a restricted area declared under s 173H of the Liquor Act, namely Palm Island. Sections 173G and 173H, which appear in Pt 6A of the Liquor Act, provide for the declaration, by regulation, of an area as a restricted area and require the regulation to state the quantity of a type of liquor that a person may have in his or her possession in the restricted area. The community area of the Palm Island Shire Council, its foreshore and the Palm Island jetty were declared restricted areas in s 1 of Sched 1R to the Liquor Regulation 2002 (Q). The "prescribed quantity" of liquor for each of these restricted areas is, by s 2, 11.25 litres for beer in which the concentration of alcohol is less than four per cent, and zero for any other type of alcohol. The effect of the provisions of Sched 1R is to make it an offence to possess more than one carton of mid- strength or light beer in any public place on Palm Island and to prohibit the possession of any other form of alcohol. The operation of Sched 1R has the practical effect that whether a resident of Palm Island is able to purchase alcohol (other than beer of the strength and quantity permitted)167 on the island or elsewhere, that person will not be able to transport the alcohol through a public place on Palm Island without committing an offence. Consequently, the possession of other alcohol is effectively prohibited anywhere on Palm Island. Part 6A was inserted into the Liquor Act in 2002 by s 66 of the Indigenous Communities Liquor Licences Act 2002 (Q). That amending Act formed part of a legislative scheme168 that was said to address problems associated with the use of alcohol in indigenous communities, which had been identified in the Cape York Justice Study169. The purpose of declaring areas to be restricted was said to be to minimise: harm caused by alcohol abuse and misuse and associated violence; and 167 In these reasons, the alcohol that is prohibited by Sched 1R will be referred to as "other alcohol". 168 See also Community Services Legislation Amendment Act 2002 (Q): Queensland, Legislative Assembly, Indigenous Communities Liquor Licences Bill 2002, Explanatory Notes at 1. 169 Fitzgerald, Cape York Justice Study, (2001). alcohol related disturbances, or public disorder, in a locality"170. The appellant challenges the validity of Sched 1R. It is her contention that s 10 of the Racial Discrimination Act 1975 (Cth) ("the RDA") applies to the provisions of Sched 1R and renders them inconsistent such that they are invalid by reason of s 109 of the Constitution. The threshold issue which her argument raises is whether there may be identified a "right" which Sched 1R affects and to which s 10 refers. If there is such a right, the respondent contends, and the Court of Appeal of the Supreme Court of Queensland held171, that the laws in question are "special measures" within the meaning of s 8 of the RDA, so that s 10 does not apply. Section 10, entitled "Rights to equality before the law", relevantly provides: If, by reason of, or of a provision of, a law of the Commonwealth or of a State or Territory, persons of a particular race, colour or national or ethnic origin do not enjoy a right that is enjoyed by persons of another race, colour or national or ethnic origin, or enjoy a right to a more limited extent than persons of another race, colour or national or ethnic origin, then, notwithstanding anything in that law, persons of the first-mentioned race, colour or national or ethnic origin shall, by force of this section, enjoy that right to the same extent as persons of that other race, colour or national or ethnic origin. (2) A reference in subsection (1) to a right includes a reference to a right of a kind referred to in Article 5 of the Convention." Section 8, entitled "Exceptions", relevantly provides: "(1) This Part does not apply to, or in relation to the application of, special measures to which paragraph 4 of Article 1 of the Convention applies". The RDA is a Commonwealth law, which, as its preamble explains, is intended to make provision for giving effect to the International Convention on the Elimination of All Forms of Racial Discrimination (1965)172 ("the Convention"). Sections 10 and 8 are to be understood accordingly. 170 Liquor Act 1992 (Q), s 173F. 171 R v Maloney [2013] 1 Qd R 32. 172 Opened for signature and ratification on 21 December 1965; signed by Australia on 13 October 1966; ratified on 30 September 1975 and entered into force in Australia (Footnote continues on next page) Section 10 The concern of s 10 is expressed, by sub-s (1), to be whether persons of one race173 enjoy the same right that is enjoyed by persons of another race, or enjoy it only to a lesser extent. The focus is upon a "right" of the kind to which the Convention refers. This follows from the fact that the RDA was enacted to give effect to the Convention and that the provisions in question, ss 10 and 8, expressly refer to the Convention. Article 1(1) of the Convention refers to "human rights and fundamental freedoms" which may apply in "the political, economic, social, cultural or any other field of public life". Article 5 lists certain specific civil rights which are human rights or fundamental freedoms. Section 10(2) ensures that the rights which may be considered human rights for the purposes of s 10(1) are not limited to those listed in Art 5, but requires that they be of that kind. Decisions of this Court confirm that the rights to which s 10 refers are human rights or fundamental freedoms174. The concept of human rights and fundamental freedoms is much broader than rights or freedoms which are recognised within a particular society. The term "human rights" evokes some universal value common to all societies, even though there may not be agreement between the States Parties to the Convention as to the content of those rights175. In Western Australia v Ward176, it was said that some care is required in identifying the respective "rights" involved in the comparison which s 10 requires. The proper identification of the right or freedom here contended for and the question which follows, whether that right or freedom amounts to a human right or a fundamental freedom, are matters which assume particular importance in this case. The comparison which is undertaken, when it is contended that s 10 should apply to a law, is between persons of one race who enjoy a right and on 30 October 1975: International Convention on the Elimination of all forms of Racial Discrimination [1975] ATS 40. 173 For brevity, that term should be taken in these reasons to include reference to colour, or national or ethnic origin. 174 Gerhardy v Brown (1985) 159 CLR 70 at 86, 101; [1985] HCA 11; Mabo v Queensland (1988) 166 CLR 186 at 229; [1988] HCA 69; Western Australia v The Commonwealth (Native Title Act Case) (1995) 183 CLR 373 at 437; [1995] HCA 175 Gerhardy v Brown (1985) 159 CLR 70 at 102 per Mason J. 176 (2002) 213 CLR 1 at 103 [116]; [2002] HCA 28. persons of another race who do not, or do so only to a more limited extent. Clearly there are non-Aboriginal persons in Queensland and in Australia who are not subject to the restrictions imposed by Sched 1R on their enjoyment of relevant rights or freedoms relating to alcohol. A discrimination by reference to race may be effected by a law, but s 10 is not expressed to refer to racial discrimination or to require an approach which is informed by a legislative purpose to discriminate on account of race. Section 10(1) enquires whether persons of a particular race enjoy the same right as others by reason of the law. "By reason of" directs attention to the operation and effect of the law in question. This is consistent with the Convention, which speaks of laws having the effect of creating discrimination177. Therefore it would be incorrect to confine the operation of s 10 to laws the purpose of which can be identified as a discriminatory purpose178. Where s 10(1) is engaged, it operates on Commonwealth, State and Territory laws such that if the relevant law does not make enjoyment of a human right universal, s 10 confers that right upon persons of the race that has been so deprived. Where a State law contains a prohibition on a particular racial or other group enjoying a human right or fundamental freedom, s 10 confers that right. In the latter case, an inconsistency will arise between s 10 and the impugned law to which s 109 of the Constitution will apply179. It may be expected that the inconsistency will be resolved in favour of s 10. A human right or fundamental freedom? The appellant contends that there are three rights which are denied Aboriginal persons on Palm Island but which are enjoyed by others. The first right to which the appellant refers is that listed in Art 5(a) of the Convention, namely the "right to equal treatment before the tribunals and all other organs administering justice". The appellant says that the laws in question deny that right because they criminalise conduct and prevent her180 from enjoying equal protection of the law without discrimination. In so saying, the appellant identifies the right in Art 5(a) as equated to a right to equality by reference to the substantive provisions of the law. 177 International Convention on the Elimination of All Forms of Racial Discrimination (1965), Arts 1, 2(1)(c). 178 Western Australia v Ward (2002) 213 CLR 1 at 99 [105]. 179 Gerhardy v Brown (1985) 159 CLR 70 at 98-99. 180 Necessarily, with other Aboriginal persons on Palm Island. Section 10(1) of the Racial Discrimination Act 1975 (Cth) does not refer to individuals. The terms of Art 5(a) are apt to refer to a right of a person to be treated by a tribunal or other adjudicative body, which is dealing with a matter affecting that person, as that body would treat any other person. Article 5(a) concerns a guarantee of procedural equality and gives effect to the principle of equality in legal proceedings181. Procedural equality, as the respondent submits, may be taken to extend to equality in the application of the law. Article 5(a) is not apposite to the right or freedom here in question. The second right referred to by the appellant, that in Art 5(f) of the Convention, may be dealt with shortly. Article 5(f) refers to the right of access to a place or service intended for use by the general public such as hotels, restaurants and cafes. Argument concerning the effect that the provisions of Sched 1R have upon such a right was not really developed. Whatever be the relevant right or freedom, the enjoyment of which is affected by Sched 1R, it is not the right referred to in Art 5(f). Schedule 1R does not restrict access to licensed premises on Palm Island or the right to be served as would be enjoyed by any other member of the public. The appellant's claim is really of a right of access to other alcohol. This is not the subject addressed by Art 5(f). The appellant also places reliance upon the civil right listed in Art 5(d)(v): the "right to own property alone as well as in association with others". This brings to mind the right referred to in Mabo v Queensland182 ("Mabo [No 1]"), namely the "human right to own and inherit property"183. Article 5(d)(vi) contains a reference to the right to inherit. In this context, a reference to property may be taken to extend to chattels184. However, it is difficult to conceive of the relevant right or freedom, the enjoyment of which is restricted by Sched 1R, as a right of ownership. Before turning to that question, it is necessary to deal with a further qualification the respondent places upon the description of the relevant right or freedom. The respondent identifies the relevant right or freedom which Sched 1R affects as the possession of other alcohol in a public place. Limiting the possession of alcohol to a public place would enable a comparison to be 181 Nowak, UN Covenant on Civil and Political Rights: CCPR Commentary, (1993) at 182 (1988) 166 CLR 186. 183 Mabo v Queensland (1988) 166 CLR 186 at 217; Western Australia v Ward (2002) 213 CLR 1 at 103-104 [116]. 184 Western Australia v Ward (2002) 213 CLR 1 at 103-104 [116], citing Western Australia v The Commonwealth (Native Title Act Case) (1995) 183 CLR 373 at made with other rights which are subject to similar legislative restriction in Queensland. In addition to the restrictions challenged in this appeal, other provisions of the Liquor Act185 prohibit the consumption of liquor in a public place, which term is defined to include roads and land owned or controlled by a local government186 and includes parks. But the provisions of Sched 1R have a more far-reaching effect. As has been noted187, they effectively prohibit the possession of other alcohol anywhere on Palm Island. It is therefore not correct to describe the relevant right or freedom as that to possess other alcohol in a public place. It is also unrealistic to speak of the freedom in question as the ability to own or to possess other alcohol. Article 5(d)(v) is concerned with denying the possibility of owning property, but Sched 1R is not directed to that right. It neither expresses nor effects a prohibition or restriction on a right to own alcohol. A person can possess alcohol and offend against the provisions of Sched 1R without owning the alcohol. Possession is of course an incident of ownership, but that connection seems an artificial basis upon which to construct the relevant right or freedom. It is not the enjoyment of the ownership of other alcohol which is the right or freedom restricted by Sched 1R but enjoyed by non-Aboriginal persons not resident on Palm Island. Likewise, the possession of other alcohol is not sufficient to describe the content of the relevant right or freedom. It is not sensible to speak of the freedom to possess alcohol without connecting the possession to a purpose. People do not possess alcohol for the enjoyment of its possession. Those collecting it do so to benefit from its accretion in value or quality. The freedom which the provisions of Sched 1R restrict is the freedom to possess other alcohol for the purpose of its consumption, whether by the person who possesses it or others. The possession spoken of in Sched 1R is that which is necessary, however briefly, antecedent to consumption. It is the freedom to possess alcohol for consumption which is enjoyed by groups elsewhere in Queensland and which is denied the residents of Palm Island. In any event, whether it is understood as a bare freedom to possess other alcohol or to possess it for consumption, the relevant freedom cannot be said to evoke some value common to all societies and therefore to qualify as a human right188. No value fundamental to the life of a human, of the kind to which the 185 Liquor Act 1992, Pt 6, Div 4. 186 Liquor Act 1992, s 173B(1). 187 See [141] above. 188 See Gerhardy v Brown (1985) 159 CLR 70 at 102. Convention refers, inheres in the freedom to possess alcohol for consumption. Many countries do not permit the consumption of alcohol. Even in countries where it is permitted, it cannot be equated with a freedom which, in any real sense, can be said to be guaranteed. In our society, where the freedom to purchase and consume alcohol is taken for granted, the freedom has been subject to regulation and restriction by government measures since colonial days. Laws typically may regulate the quantity of alcohol that may be consumed, as is demonstrated by laws which prohibit the sale of alcohol to intoxicated persons. Laws impose minimum age requirements for the purchase and consumption of alcohol. They restrict the times of day when alcohol can be consumed. Some laws affect the price at which certain types of alcohol are sold. They prohibit persons, such as offenders in rehabilitation programmes, from consuming alcohol at all. The designation of alcohol free zones and the prohibition on the consumption of alcohol in public places are common. Some western societies, in certain periods, have effected a total prohibition on the consumption of alcohol. An understanding of the level of restriction that may be applied does not suggest that the freedom can be regarded as certain in some societies. It provides no basis for a view of the freedom as something upon which the community of nations would place a value attributable to a human right or fundamental freedom. Notwithstanding that the freedom to possess alcohol for consumption does not amount to a fundamental freedom of the kind to which the Convention is addressed, it must be acknowledged that many other persons in Queensland and in Australia enjoy a freedom to possess and consume alcohol to a greater extent than that enjoyed by Aboriginal persons on Palm Island. The submissions of the Australian Human Rights Commission ("the AHRC"), which was given leave to intervene as a party, respond to this differentiation. It submits that the relevant right is the right to be protected against discrimination from the practical effect of any substantive law189. The submission is similar to that made by the appellant in connection with Art 5(a). The source of this right is said to be Art 26 of the International Covenant on Civil and Political Rights (1966) ("the ICCPR") (the right to equality before the law) and the right is said to have been interpreted by the United Nations Human Rights Committee ("the UNHRC") as referable to the content of legislation190. 189 By reference to Morton v Queensland Police Service (2010) 271 ALR 112 at 119 [20] per McMurdo P. 190 Human Rights Committee, CCPR General Comment No 18: Non-discrimination, Something more will be said, in the section which follows in these reasons, concerning the use of such opinions in the construction of a statute such as the RDA. It is sufficient for present purposes to observe that what the AHRC speaks of is not a right or freedom upon which s 10 can operate. Rather, what is spoken of is the broader objective to which the Convention and the RDA are addressed. That objective, the elimination of racial discrimination, cannot itself be a right for the purposes of ss 10 and 8. A right not to be discriminated against in any way by a law would render ss 10 and 8, and much of the Convention, unnecessary. Sections 10 and 8 are legislative measures implemented by Australia, in accordance with its obligations under Art 2(1)(c) of the Convention, "to amend, rescind or nullify any laws and regulations which have the effect of creating or perpetuating racial discrimination wherever it exists". Section 10 does so by operating on a law which denies or restricts the enjoyment of an identifiable human right or fundamental freedom by a race, so that that right or freedom is provided. Section 10 cannot operate in the manner intended with respect to a broad right not to be discriminated against. In its operation, s 10 is not directly informed by the purpose of a law, but rather by the differential effect that a law has upon the enjoyment of a human right or fundamental freedom. If s 10 was to be understood to refer only to one right, which clearly it does not, and then to equate that right with the broader objective of the RDA and the Convention, it would be expected that a law made in contravention of the protection so provided would be invalid outright, rather than remaining valid but being modified by s 10. Section 10 cannot be taken as intended to refer to such a broadly framed right. Further, to identify a right in the way contended for is to deny the possibility that a law may nevertheless be a special measure under s 8 and therefore a law to which s 10 does not apply. Proportionality and s 10 Because I have concluded that the relevant right is not a human right or fundamental freedom, it is not strictly necessary for me to deal with the other aspect of the AHRC's submissions concerning s 10, nor with submissions on the issue whether the provisions of Sched 1R are a special measure in accordance with s 8. Nevertheless, these submissions concern important questions as to the place of proportionality analysis in ss 10 and 8 of the RDA and the source of such an analysis and therefore some consideration is warranted. The AHRC refers to the decision of the Full Court of the Federal Court191 in Bropho v Western Australia192, which holds that an interference with the enjoyment of a right to which s 10 of the RDA refers will not be inconsistent with s 10 provided that it is effected in accordance with a legitimate public interest193. In the Court of Appeal in this case, McMurdo P considered that she was bound to follow that decision194. Chesterman JA, with whom Daubney J agreed, also referred195 to Bropho v Western Australia, and held that s 10 was not engaged because the restrictions imposed by Sched 1R are reasonable and legitimate to achieve the stated purpose of reducing alcohol-related violence196. The AHRC submits that Bropho v Western Australia is correct, as far as it goes, but that more is required in applying the decision. The "more" is to be found in proportionality analysis. Certainly the reasons in Bropho v Western Australia do not employ proportionality analysis, although the premises stated for the approach taken in that case might suggest it was applicable. The case concerned the human right to own property, which, as the Full Court observed, is not an absolute right. The Full Court reasoned from that premise that the human right must accommodate legitimate laws in the public interest197. If a law satisfies that requirement, s 10 is not engaged. The rationale for proportionality analysis is that no freedom, even a constitutionally guaranteed freedom, can be regarded as absolute198. While some legislative restriction is permissible, a test of the limits of legislative power is necessary in order to ensure that the freedom is not so limited as to be lost. Proportionality analysis is the obvious candidate. Proportionality analysis tests a law imposing restrictions upon a guaranteed freedom by determining the 191 Ryan, Moore and Tamberlin JJ. 192 (2008) 169 FCR 59. 193 Bropho v Western Australia (2008) 169 FCR 59 at 83 [83]. 194 R v Maloney [2013] 1 Qd R 32 at 39 [22]-[23]. 195 R v Maloney [2013] 1 Qd R 32 at 61 [95]. 196 R v Maloney [2013] 1 Qd R 32 at 62 [99]. 197 Bropho v Western Australia (2008) 169 FCR 59 at 83 [81], 83-84 [83]. 198 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 561; [1997] HCA 25; Rowe v Electoral Commissioner (2010) 243 CLR 1 at 136 [444]; [2010] HCA 46; Momcilovic v The Queen (2011) 245 CLR 1 at 214 [557], 249 [683]; [2011] HCA 34. reasonableness of the means employed by the statute to achieve its legitimate statutory objective. It may be observed that Bropho v Western Australia required that there be a legitimate purpose to a law if s 10 is not to apply to it, but that decision did not further test the legislative restriction. That is the AHRC's criticism of it. However, neither the test applied in Bropho v Western Australia nor a test of proportionality applies to s 10. It will be explained in these reasons that there is a proper foundation for proportionality analysis of a law as a special measure. It is provided by Art 1(4) of the Convention, to which s 8 refers. No such foundation is evident in the terms of s 10 and the aspects of the Convention to which it refers. Nothing in s 10 requires or permits a justification for a legal restriction on a human right or fundamental freedom. As has been mentioned, when such a right or freedom is identified and the required comparison evidences a denial or restriction of the enjoyment of it by a racial or other group, s 10(1) supplies the right to that group. By this means, the differentiation or discrimination is corrected. Such an approach leaves no room for a law, which denies or restricts a human right or fundamental freedom, to be exempt from the operation of s 10. It is left to s 8 to test whether a law is a special measure to which s 10 does not apply. Yet the AHRC's submission suggests that there may be no inconsistency with s 10, or no relevant discrimination, if a law satisfies the test applied in proportionality analysis. The AHRC's approach to the operation of s 10 requires the implication of words which are referable to proportionality analysis, for none are evident in the section's express terms. The only textual basis the AHRC gives for its approach is the words "enjoy a right" in s 10(1). It submits that those words must encompass a qualification of the right. So much may be accepted. For the purpose of the comparison required by s 10(1), the reference to a right or freedom said to be enjoyed by others must take account of any lawful restrictions on that enjoyment. More to the point, there is nothing in the terms of s 10 which permits the legislative restriction or prohibition complained of to be justified. That would be inconsistent with its operation and with that of s 8. It is notable that the appellant does not support the AHRC's submission that proportionality analysis should be applied to s 10. Indeed, it might be thought curious why the AHRC would wish such an analysis to apply, given that the consequence would be that the operation of s 10 would be reduced because laws which satisfy the test would not be subject to it. The reason may be that the AHRC, having identified a broad general right to be free of discrimination as the relevant right, was obliged to find a delimiting test. The basis for the AHRC's submission on proportionality is the views expressed in a general recommendation of the United Nations Committee on the Elimination of Racial Discrimination ("the CERD Committee") in 2005199 and a general comment of the UNHRC concerning Art 26 of the ICCPR200. The AHRC says these views are to the effect that laws which meet the requirements of proportionality may not contravene the Convention and may not amount to discrimination. There are other recommendations of the CERD Committee to similar effect201. The CERD Committee was established pursuant to Art 8 of the Convention. By Art 9(1), States Parties to the Convention undertake to submit, for the consideration of the CERD Committee, reports on the legislative and other measures which they have adopted to give effect to the provisions of the Convention. By Art 9(2), the CERD Committee has the function of reporting annually and may make suggestions and general recommendations based on its examination of the reports received. The abovementioned general recommendation of the CERD Committee202 suggests that States Parties "respect the principle of proportionality in its 199 Committee on the Elimination of Racial Discrimination, "General recommendation XXXI on the prevention of racial discrimination in the administration and functioning of the criminal justice system", recorded in the Report of the Committee on the Elimination of Racial Discrimination, UN GAOR, 60th sess, Supp No 18, UN Doc A/60/18 (2005) 98. 200 Human Rights Committee, CCPR General Comment No 18: Non-discrimination, 201 Committee the Elimination of Racial Discrimination, "General Recommendation XIV (42) on article 1, paragraph 1, of the Convention", recorded in the Report of the Committee on the Elimination of Racial Discrimination, UN GAOR, 48th sess, Supp No 18, UN Doc A/48/18 (1993) 115 at 115 [2]; Committee on the Elimination of Racial Discrimination, "General recommendation XXX on discrimination against non-citizens", recorded in the Report of the Committee on the Elimination of Racial Discrimination, UN GAOR, 59th sess, Supp No 18, UN Doc A/59/18 (2004) 93 at 94 [4]; Committee on the Elimination of Racial Discrimination, "General Recommendation No 32 (2009): The meaning and scope of special measures in the International Convention on the Elimination of Racial Discrimination", recorded in the Report of the Committee on the Elimination of Racial Discrimination, UN GAOR, 64th sess, Supp No 18, UN Doc A/64/18 (2009) 152 at 153-154 [8]. 202 Committee on the Elimination of Racial Discrimination, "General recommendation XXXI on the prevention of racial discrimination in the administration and functioning of the criminal justice system", recorded in the Report of the Committee on the Elimination of Racial Discrimination, UN GAOR, 60th sess, Supp No 18, UN Doc A/60/18 (2005) 98 at 101 [4(b)]. application to persons belonging to the groups referred to in the last paragraph of the preamble" to the recommendation. The preamble refers to particular racial groups and expands upon the persons to whom the Convention refers. The UNHRC's General Comment No 18, referred to above, contains the observation, with respect to Art 2 of the Convention, that "not every differentiation of treatment will constitute discrimination, if the criteria β¦ are reasonable and objective and if the aim is to achieve a purpose which is legitimate under the [ICCPR]"203. The Convention does not contain a test of proportionality save in Art 1(4) with respect to special measures, which are dealt with in the RDA by s 8. Article 2(1)(c), which imposes the obligation on States Parties to prohibit racial discrimination including by taking legislative measures, and Art 1(1), in its definition of the term of "racial discrimination", do not mention a proportionality test. There is no suggestion that the CERD Committee's views in question reflect an agreement between Australia and other States Parties concerning an addition to the text of the Convention or as to how it is to be understood to operate. In Salomon v Commissioners of Customs and Excise204, Lord Diplock discussed the relevance of a treaty or convention to the task of a domestic court in construing legislation which was passed to implement that treaty or convention. The starting point is that the task of the court is to construe the legislation, for that is what the court has to apply. The ordinary rules of statutory construction apply where a domestic statute incorporates provisions of a convention or treaty205 or when resort is necessary to them because the terms of the legislation are ambiguous206. When resort is had to a convention or treaty, an Australian court may have regard to views expressed in extraneous materials as to the meaning of its terms, provided that they are well founded and can be accommodated in the process of construing the domestic statute, which is the task at hand. The court could also have regard to any subsequent terms affecting the international instrument that 203 Human Rights Committee, CCPR General Comment No 18: Non-discrimination, 204 [1967] 2 QB 116 at 143. 205 Minister for Home Affairs (Cth) v Zentai (2012) 246 CLR 213 at 238 [65]; [2012] HCA 28. 206 Salomon v Commissioners of Customs and Excise [1967] 2 QB 116 at 143-144; Yager v The Queen (1977) 139 CLR 28 at 43-44; [1977] HCA 10; Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273 at 287; [1995] HCA are agreed upon by the States Parties, including Australia. But the parties to an international instrument cannot be taken to have agreed that which they have not207. The views of the committees travel beyond the international obligations that Australia has agreed to and the terms of the Convention they recommend, in effect, are implications. This Court cannot apply views which would have the effect of altering the text of the Convention to which Australia has agreed and which has formed the basis for the relevant measures provided by the RDA, which the Court is required to construe. Special measures Proportionality analysis is engaged by s 8 in the consideration of whether a law is a special measure. It is engaged because s 8 applies Art 1(4) of the Convention, the terms of which refer, in relevant part, to: "Special measures taken / for the sole purpose of securing adequate advancement of certain racial or ethnic groups or individuals requiring such protection / as may be necessary in order to ensure such groups or individuals equal enjoyment or exercise of human rights and fundamental freedoms". I have added the emphasis and the separation marks to better identify what the word "necessary" qualifies. It seems to me that it refers to special measures as are necessary to advance or protect the exercise of a human right or fundamental freedom by a group. That is the legitimate end ("the sole purpose") to which a special measure may be directed. The human right or fundamental freedom sought to be protected by Sched 1R, and which is the subject of that purpose, is the right of Aboriginal persons on Palm Island, in particular women and children, to a life free of violence, harm and social disorder brought about by alcohol abuse. It is not an uncommon experience with treaties or international conventions that their drafting is not as clear as it could be. Sometimes that is the result of a conscious choice made by those drafting. Nevertheless, I do not consider that the words "as may be necessary" in Art 1(4) of the Convention are intended to qualify, or at least to qualify only, the word "protection". I confess to reading the Article with the possibility in mind that some kind of proportionality test was intended. Certainly the indicia are present in the words of Art 1(4) and a principle of proportionality, involving a test of necessity, was well known in 207 See Januzi v Secretary of State for the Home Department [2006] 2 AC 426 at 439 [4] per Lord Bingham of Cornhill. Europe before the Convention was opened for signature and had been utilised by the European Court of Justice208. The test implied by the reference in Art 1(4) to measures "as may be necessary" for the permitted purpose is that of reasonable necessity. The test was accepted as a doctrine of this Court in Betfair Pty Ltd v Western Australia209 and has subsequently been discussed and applied in judgments of members of the Court210. The test as expounded is not inconsistent with the test of proportionality to which the Convention refers. No party to the appeal suggested otherwise. The test is applied by the Court to determine the limits of legislative power exercised to effect a prohibition or restriction of a freedom which is made the subject of protection by the Constitution or, as here, by statute. The role of the Court in determining these limits is to ensure that the freedom sought to be protected is not effectively lost. The test of reasonable necessity does not permit a court to consider whether, in its view, the measure was necessary in accordance with its views of social policy. Proportionality analysis, as has been applied in this Court, is not generally concerned with how the objectives of the law may otherwise be fulfilled. It requires that objective standards be applied if the Court is not to intrude into areas of policy. The inquiry undertaken to determine whether a law is proportionate is directed to the relationship between a valid legislative object and the means adopted for its attainment. To be proportionate, a law must go no further than necessary having regard to that object211. Lange v Australian Broadcasting Corporation212 explained the basis of the earlier decision in 208 See Schwarze, European Administrative Law, rev ed (2006) at 677; FΓ©dΓ©ration CharbonniΓ¨re de Belgique v High Authority of the European Coal and Steel Community [1956] ECR 292 at 299; Mannesmann AG v High Authority of the European Coal and Steel Community [1962] ECR 357 at 370-371. 209 (2008) 234 CLR 418 at 477 [102]-[103]; [2008] HCA 11. 210 Rowe v Electoral Commissioner (2010) 243 CLR 1 at 134 [436], 135 [440] per Kiefel J; Momcilovic v The Queen (2011) 245 CLR 1 at 214 [556] per Crennan and Kiefel JJ; Monis v The Queen (2013) 87 ALJR 340 at 394 [268], 396 [280] per Crennan, Kiefel and Bell JJ; 295 ALR 259 at 327, 330; [2013] HCA 4. 211 Monis v The Queen (2013) 87 ALJR 340 at 396 [280], 408 [347]; 295 ALR 259 at 212 (1997) 189 CLR 520 at 568. Australian Capital Television Pty Ltd v The Commonwealth213, which concerned legislative restrictions on the implied freedom of political communication, as being that "there were other less drastic means by which the objectives of the law could be achieved". The conclusion reached in Betfair Pty Ltd v Western Australia214 can also be explained on this basis. The test of reasonable necessity looks to whether there are reasonable practicable alternative measures available which are less restrictive in their effect than the measures in question215. If there are such alternatives, a law cannot be said to be reasonably necessary. The existence of any possible alternative is not sufficient to show that the measure chosen was not reasonably necessary according to the test. An alternative measure needs to be equally as effective, before a court can conclude that the measure is a disproportionate response216. Moreover, in Monis v The Queen217, Crennan and Bell JJ and I said that the alternative means must be obvious and compelling, having regard to the role of the courts in undertaking proportionality analysis. It is not necessary to traverse the reports and other extrinsic materials which provided the impetus for Sched 1R. It is not disputed that there were problems on Palm Island with alcohol and violence. Prior to the enactment of the Liquor Act, it had been recognised that residents of Palm Island, in particular women, were regularly exposed to violence and that children were abused and neglected because of alcohol abuse218. It cannot be disputed that those people require the protection of the law and that Sched 1R is a means of achieving that 213 (1992) 177 CLR 106; [1992] HCA 45. 214 (2008) 234 CLR 418. 215 Rowe v Electoral Commissioner (2010) 243 CLR 1 at 134-135 [438]-[439], 135 [442], 136 [444]; Momcilovic v The Queen (2011) 245 CLR 1 at 214 [556]; Attorney-General (SA) v Corporation of the City of Adelaide (2013) 87 ALJR 289 at 335-336 [206]; 295 ALR 197 at 254; [2013] HCA 3; Monis v The Queen (2013) 87 ALJR 340 at 396 [280]; 295 ALR 259 at 330. 216 North Eastern Dairy Co Ltd v Dairy Industry Authority of NSW (1975) 134 CLR 559 at 616; [1975] HCA 45; Rowe v Electoral Commissioner (2010) 243 CLR 1 at 134 [438], referring to Uebergang v Australian Wheat Board (1980) 145 CLR 266 at 306; [1980] HCA 40. 217 (2013) 87 ALJR 340 at 408 [347]; 295 ALR 259 at 346. 218 Queensland, Legislative Assembly, Parliamentary Debates (Hansard), 17 September 2002 at 3595. end. In terms of Art 1(4), some such action was necessary in order that they enjoy the human right219 to a life free from violence220. The appellant submits that the measures taken in Sched 1R are not proportionate to that legislative objective because: (1) they involve the criminalisation of personal conduct; (2) they were opposed by representatives of institutions on the island, which I take to be a reference to the Palm Island Aboriginal Shire Council; (3) there is no "compelling justification" for dispensing with the requirement of consultation, which was not adequately undertaken; and (4) the measures have no temporal limitation. It is further asserted that the respondent has a legal onus of proof, although how this is intended to apply was not made clear. It may be accepted that this Court must be satisfied that Sched 1R is a measure that is reasonably necessary in the sense described. No temporal limitation is required for a measure to be special. Article 1(4) of the Convention requires only that a measure not continue after its objectives have been achieved. This is consistent with the requirement of reasonable necessity. It cannot be said that consultation to a particular level is required for a measure to be special. The reference made by Brennan J in Gerhardy v Brown221 to the importance of consultation cannot be taken to have elevated consultation to a condition of a special measure. The Court's assessment of a law as a special measure cannot be conditioned upon the occurrence of consultation to a particular level or the obtaining of consent of all, or most, persons affected. The law is judged according to its operation and effect and the legitimacy of the objective to which it is directed. The fact that the measure prescribes an offence is taken into account in the test of reasonable necessity. The appellant's submissions rely upon the severity of the measures in Sched 1R, but these must be understood by reference to the objective to which they are directed222. The examples given by the appellant in argument of other 219 International Convention on the Elimination of All Forms of Racial Discrimination (1965), Art 5(b). 220 An analogy with these measures may be drawn with a case decided by the German Federal Constitutional Court concerning a statute which criminalised the use of cannabis. The Court held that the prohibition on the use of certain drugs was not disproportionate to the aim of the protection of others: the "Hashish Drug Case" 90 BVerfGE 145 (1994), cited in Kommers and Miller, The Constitutional Jurisprudence of the Federal Republic of Germany, 3rd ed (2012) at 399-400. 221 (1985) 159 CLR 70 at 135. 222 Davis v The Commonwealth (1988) 166 CLR 79 at 100; [1988] HCA 63. measures which could have been taken include better enforcement of existing laws; better support services for those who drink excessively and are detrimentally affected by alcohol; and restricted hours of sale of alcohol. But these examples do not identify alternatives which are equally practicable and which would provide the extent of protection which Sched 1R seeks to achieve. The result is that Sched 1R does not interfere with a right referred to by s 10. And, although not strictly necessary therefore to consider, s 8 would protect its provisions. The measures Sched 1R provides cannot be said to be disproportionate to the aim of affording the residents of Palm Island the human right to a life free of alcohol-related violence and strife. The appeal should be dismissed. Bell BELL J. The facts and the provisions of the Liquor Act 1992 (Q) ("the Liquor Act") and the Liquor Regulation 2002 (Q) ("the Liquor Regulation") giving rise to the appeal (collectively, "the liquor restrictions") are detailed in the reasons of other members of the Court and need not be repeated save to the extent that is necessary to explain my reasons. The Court of Appeal of the Supreme Court of Queensland (McMurdo P, Chesterman JA and Daubney J) rejected Ms Maloney's challenge to the validity of the liquor restrictions under s 10(1) of the Racial Discrimination Act 1975 (Cth) ("the RDA")223. The Court of Appeal was unanimous in considering that the liquor restrictions discriminate on the ground of race224. However, the majority (Chesterman JA and Daubney J) concluded that the liquor restrictions do not engage s 10(1) because the rights that the RDA protects are the human rights and fundamental freedoms referred to in the International Convention on the Elimination of All Forms of Racial Discrimination ("the Convention"). The right to possess liquor of any type and in any quantity was said not to be such a right225. McMurdo P, in dissent on this issue, considered that the liquor restrictions contravened Ms Maloney's rights to equality before the law and access to services226. The Court of Appeal was unanimous in holding that the liquor restrictions do not engage the prohibition on racial discrimination in Pt II of the RDA because they qualify as "special measures" within the exception in Ms Maloney appeals by special leave from the dismissal of the challenge to her conviction. The respondent by notice of contention submits that the Court of Appeal should have held that the liquor restrictions do not affect the enjoyment of a right of persons of a particular race, colour or national or ethnic origin (collectively, "race") for the purposes of s 10(1). The Attorneys-General of the Commonwealth, South Australia and Western Australia intervened in support of the respondent. The Australian Human Rights Commission ("the AHRC") was also granted leave to intervene. Its submissions, directed to the construction of ss 8 and 10 of the RDA, are not made in support of either party. 223 R v Maloney [2013] 1 Qd R 32. 224 R v Maloney [2013] 1 Qd R 32 at 38 [18] per McMurdo P, 58 [84] per Chesterman JA, 71 [127] per Daubney J. 225 R v Maloney [2013] 1 Qd R 32 at 61 [96]. 226 R v Maloney [2013] 1 Qd R 32 at 36 [9], 41 [28]-[30]. 227 R v Maloney [2013] 1 Qd R 32 at 54 [65] per McMurdo P, 71 [126] per Chesterman JA, 71 [127] per Daubney J. Bell The National Congress of Australia's First Peoples Limited ("the National Congress") was granted leave to appear as amicus curiae. The stated legislative purpose of Pt 6A, which was inserted into the Liquor Act by the Indigenous Communities Liquor Licences Act 2002 (Q) ("the 2002 Amendment Act"), is the minimisation of harm caused by alcohol abuse and misuse and associated violence, and of alcohol related disturbances or public disorder in a locality228. than The link between the excessive consumption of alcohol and violence is notorious. It is equally notorious that alcohol related violence is not confined to Aboriginal communities. In 1995, the Race Discrimination Commissioner ("the Commissioner") reported that nationally the abstinence rate among Aboriginal the abstinence rate among non-Aboriginal Australians was higher Australians229. The Commissioner went on to observe that the impact of alcohol use is worse on Aboriginal people who drink than on non-Aboriginal people who drink because of the degree of harmful consumption by indigenous drinkers230. The Commissioner's report contains a summary of authoritative statements of the historical reasons which are considered to explain the devastating impact of alcohol on Aboriginal society231. The Commissioner concluded that alcohol poses "a major threat to the survival of Aboriginal culture and to the achievement of self-determination by Aboriginal and Torres Strait Islander peoples"232. Ms Maloney does not challenge the Commissioner's conclusion. Ms Maloney does not dispute that a valid law may impose restrictions on the availability of alcohol in an indigenous community area including Palm Island without engaging the prohibition on racial discrimination in Pt II of the RDA. A 228 Liquor Act, s 173F. 229 Commonwealth of Australia, Race Discrimination Commissioner, Race Discrimination, Human Rights and the Distribution of Alcohol, (1995) at 15. See also Australian Institute of Health and Welfare, 2010 National Drug Strategy Household Survey Report, (2011) at 60. 230 Commonwealth of Australia, Race Discrimination Commissioner, Race Discrimination, Human Rights and the Distribution of Alcohol, (1995) at 15. See also Australian Institute of Health and Welfare, 2010 National Drug Strategy Household Survey Report, (2011) at 60. 231 Commonwealth of Australia, Race Discrimination Commissioner, Race Discrimination, Human Rights and the Distribution of Alcohol, (1995) at 16-18. 232 Commonwealth of Australia, Race Discrimination Commissioner, Race Discrimination, Human Rights and the Distribution of Alcohol, (1995) at 4. Bell law may do so provided the law meets the criterion of being a special measure within s 8(1). Her submission is that in the absence of compelling justification a law will not qualify as a special measure unless its introduction has been preceded by a process of genuine consultation with its intended beneficiaries and it is manifest that it is a law of temporary duration. The liquor restrictions are challenged in each of these respects. Ms Maloney also asserts that they are disproportionate to the attainment of their object. The respondent submits that in the event it fails on its notice of contention, the liquor restrictions are nonetheless outside the reach of s 10(1). It asserts that no invalid diminution in the enjoyment of a right occurs where the State enacts a law to achieve "a legitimate and non-discriminatory public goal". The Commonwealth, South Australia and the AHRC each support the respondent's law not effect a analysis subject disproportionate limitation on rights in the attainment of its legitimate object. The respondent and the Attorneys-General submit that the liquor restrictions do not limit the enjoyment of a right of a kind that is protected by s 10(1). In the event they do limit a right of that kind, the respondent and the Attorneys-General submit that the liquor restrictions are special measures under s 8(1) to which s 10(1) does not apply. the further requirement that the For the reasons that follow, I consider that the Court of Appeal was right to find that the liquor restrictions are racially discriminatory. In my opinion, Aboriginal persons on Palm Island enjoy rights recognised by the RDA to a more limited extent than non-Aboriginal persons by reason of the liquor restrictions. I do not consider the application of s 10(1) to be subject to a test of proportionality. It follows that Sched 1R to the Liquor Regulation will be inconsistent with s 10(1) unless it is a special measure under s 8(1). The characterisation of a law as a special measure does not, in my opinion, import a test of reasonable necessity. I consider that the liquor restrictions are special measures within s 8(1). It follows that the appeal must be dismissed. Do the liquor restrictions apply with relevantly differential effect on the basis of race? The first issue is raised by the respondent's notice of contention. The respondent contends that the liquor restrictions do not engage s 10(1) because they apply generally to all persons present on Palm Island and do not limit the freedom of the residents of Palm Island to possess liquor elsewhere in Queensland, whatever their race. The discriminant for the operation of the liquor restrictions is place. A comparison between Ms Maloney, an Aboriginal person in a public place on Palm Island, and a person of any other race in a public place on Palm Island is sufficient, in the respondent's submission, to demonstrate the irrelevance of race to their operation. On this analysis, a State law that does not directly or indirectly use race as the discriminant in denying or limiting the Bell enjoyment of rights of persons of a particular race is immune from the operation of the RDA. Section 10(1) provides: "If, by reason of, or of a provision of, a law of the Commonwealth or of a State or Territory, persons of a particular race, colour or national or ethnic origin do not enjoy a right that is enjoyed by persons of another race, colour or national or ethnic origin, or enjoy a right to a more limited extent than persons of another race, colour or national or ethnic origin, then, notwithstanding anything in that law, persons of the first-mentioned race, colour or national or ethnic origin shall, by force of this section, enjoy that right to the same extent as persons of that other race, colour or national or ethnic origin." As explained by Mason J in Gerhardy v Brown233, in an analysis taken up in the joint reasons in Western Australia v Ward234, s 10(1) does not refer to discrimination or to the concepts associated with discrimination. The provision is directed to "the enjoyment of rights by some but not by others or to a more limited extent by others"235. The fact that Aboriginal persons may possess alcohol in public places elsewhere in Queensland is not relevant to the engagement of s 10(1). The provision does not require that the limitation on the enjoyment of rights apply to all persons of a particular race. Nor does the fact that the law applies to the small minority of non-Aboriginal persons present on Palm Island take the law outside the protection of the RDA. Were it otherwise, s 10(1) might be readily circumvented. implements Section 10(1) The purpose of the RDA is to implement Australia's Convention obligations. the obligations assumed under Arts 2(1)(c) and 5 of the Convention236. In summary, these are the obligations to nullify laws having the effect of creating or perpetuating racial discrimination and to guarantee equality before the law. Equality before the law is the counterpart of the elimination of racial discrimination. Section 10(1) is to be interpreted in the light of these related purposes. A law creates or perpetuates racial discrimination when it applies any distinction, exclusion, restriction or 233 (1985) 159 CLR 70 at 99; [1985] HCA 11. 234 (2002) 213 CLR 1 at 99 [105] per Gleeson CJ, Gaudron, Gummow and Hayne JJ; [2002] HCA 28. 235 Western Australia v Ward (2002) 213 CLR 1 at 99 [105] per Gleeson CJ, Gaudron, Gummow and Hayne JJ (emphasis in original). 236 Gerhardy v Brown (1985) 159 CLR 70 at 95 per Mason J. Bell preference based on race which has the purpose or effect of nullifying or impairing the enjoyment or exercise, on an equal footing, of human rights and fundamental freedoms in the political, economic, social, cultural or any other field of public life237. The purpose of enacting Pt 6A of the Liquor Act, which provides for the declaration of restricted areas, was stated to be the need to address the problem of the abuse of alcohol and alcohol related violence in remote indigenous communities238. Explicit provision is made for the declaration of a "community area" or part of a community area as a restricted area239, and for consultation with the "community justice group" of a community area before a declaration is made240. "Community area" means a community area under the Aboriginal and Torres Strait Islander Communities (Justice, Land and Other Matters) Act 1984 (Q)241. "Community justice group" means a group established under the same Act242. As at 31 May 2008, each of the 18 areas declared to be "restricted areas" under the Liquor Act, including Palm Island, were "community areas"243. The overwhelming majority of persons resident on Palm Island are Aboriginal persons. The purpose and practical operation and effect of the liquor restrictions are to target the Aboriginal community of Palm Island and limit the right of its members to possess alcohol. To the extent that the possession of alcohol by adult members of the Australian community is a right recognised by s 10(1), the enjoyment of the right by Aboriginal persons on Palm Island is limited in 237 Convention, Art 1(1). 238 2002 Amendment Act, long title and s 3(1). Section 66 of the 2002 Amendment Act introduced Pt 6A, which provides for the declaration of "restricted areas", into the Liquor Act. Section 173F of the Liquor Act states that the purpose of Pt 6A is to provide for the declaration of areas for minimising (a) harm caused by alcohol abuse and misuse and associated violence; and (b) alcohol related disturbances, or public disorder, in a locality. See also the second reading speech to the Bill that became Queensland, Legislative Assembly, Parliamentary Debates (Hansard), 6 August 2002 at 2631-2634. the 2002 Amendment Act: 239 Liquor Act, s 173G(2). 240 Liquor Act, s 173I. 241 Liquor Act, s 4, definition of "community area". 242 Liquor Act, s 4, definition of "community justice group". 243 Liquor Regulation, Scheds 1A-1R read with Aboriginal and Torres Strait Islander Communities (Justice, Land and Other Matters) Act 1984 (Q), s 4, definition of "community area". Bell comparison with the enjoyment of the right by persons elsewhere in Queensland, the vast majority of whom are non-Aboriginal. The respondent and the Commonwealth submit that if s 10(1) is applied without regard to whether the purpose of the impugned law is a legitimate non- discriminatory purpose, unintended and anomalous results are likely to occur. The Commonwealth instances a planning law requiring buildings in a coastal locality to meet specifications suitable for withstanding extreme weather events. What if the overwhelming majority of building owners affected by the law are persons of a particular race? Arguably the planning law limits the enjoyment of the right to own property. Does s 10(1) invalidate the law? In Western Australia v Ward, the joint reasons explained that as the obligations undertaken under the Convention include nullifying laws having the effect of creating or perpetuating racial discrimination, s 10(1) cannot be confined to laws whose purpose can be shown to be discriminatory244. Their Honours went on to say, respecting the determination of whether a law is in breach of s 10(1), that the provision does not require "that the law, in terms, makes a distinction based on race"245. Section 10(1) must be interpreted consistently with the purpose of the Convention as being directed to the lack of enjoyment of a right by reason of a law whose purpose or effect is to create racial discrimination246. In determining whether a law has that purpose or effect the court looks to the "practical operation and effect" of the law and is "concerned not merely with matters of form but with matters of substance"247. It may be that the hypothesised planning law would not engage s 10(1) because, construed in its context, any limitation on the enjoyment of the right of the building owners would have no connection to race. The appeal does not raise a question of the kind raised by the hypothesised planning law because the liquor restrictions unarguably target Aboriginal persons. In the circumstances it is not appropriate to determine the extent of the connection with race that is required to validly 244 (2002) 213 CLR 1 at 99 [105] per Gleeson CJ, Gaudron, Gummow and Hayne JJ. 245 Western Australia v Ward (2002) 213 CLR 1 at 103 [115] per Gleeson CJ, Gaudron, Gummow and Hayne JJ (emphasis added). 246 Gerhardy v Brown (1985) 159 CLR 70 at 99 per Mason J. 247 Western Australia v Ward (2002) 213 CLR 1 at 103 [115] per Gleeson CJ, Gaudron, Gummow and Hayne JJ citing Mabo v Queensland (1988) 166 CLR 186 at 230 per Deane J; [1988] HCA 69. Bell Do the liquor restrictions limit the enjoyment of a right of a kind protected by The first question in the appeal is whether the liquor restrictions engage a right that is protected by s 10(1). The rights to which s 10(1) applies include any right of a kind referred to in Art 5 of the Convention248. Relevantly, Art 5 provides: "In compliance with the fundamental obligations laid down in article 2 of this Convention, States Parties undertake to prohibit and to eliminate racial discrimination in all its forms and to guarantee the right of everyone, without distinction as to race, colour, or national or ethnic origin, to equality before the law, notably in the enjoyment of the following rights: The right to equal treatment before the tribunals and all other organs administering justice; The right to security of person and protection by the State against violence or bodily harm, whether inflicted by government officials or by any individual, group or institution; (d) Other civil rights, in particular: The right to own property alone as well as in association with others; The right of access to any place or service intended for use by the general public such as transport, hotels, restaurants, cafes, theatres and parks." The rights on which Ms Maloney bases her challenge are those described in Arts 5(a), 5(d)(v) and 5(f). The focus of her submissions is upon the limitation of the right to own property. The majority in the Court of Appeal reasoned that the right in question is not an "abstract right to own property" but rather a right to 248 RDA, s 10(2). Bell "ownership or possession of a particular kind of liquor in a particular location"249. Such a right, it was said, did not evoke a universally recognised and observed right that is common to all societies250. The majority also said, by reference to the decision of the Full Federal Court in Bropho v Western Australia251, that to the extent that the liquor restrictions interfere with the right of possession of liquor, they have been imposed for a "legitimate reason"252. Had the matter been free of authority, McMurdo P would have concluded that the liquor restrictions limited Ms Maloney's enjoyment of the right to own property. Her Honour doubted that any balancing of rights is involved in the determination of whether s 10(1) is infringed, observing that the approach adopted in Bropho seemed to "merge s 8 and s 10"253. Bropho concerned a challenge to restrictions on entry to a reserve designated for the use of Aboriginal persons. The Full Federal Court (Ryan, Moore and Tamberlin JJ) had regard to the recognition in human rights jurisprudence that rights in a democratic society must be balanced against competing rights and values254. To the extent that the rights engaged in Bropho were property rights, the Full Federal Court said that they were not absolute given the State's right to control uses of property in the general interest. Interference with the enjoyment of those rights effected in accordance with a legitimate public interest was said not to be inconsistent with s 10(1)255. To the extent that the restrictions in Bropho interfered with the rights of the indigenous residents of the reserve, they did so for the purpose of protecting the residents, particularly the women and children256. 249 R v Maloney [2013] 1 Qd R 32 at 62 [97]. 250 R v Maloney [2013] 1 Qd R 32 at 61 [96]. 251 (2008) 169 FCR 59. 252 R v Maloney [2013] 1 Qd R 32 at 62 [97]. 253 R v Maloney [2013] 1 Qd R 32 at 39 [22]. 254 Bropho v Western Australia (2008) 169 FCR 59 at 83 [81]. 255 Bropho v Western Australia (2008) 169 FCR 59 at 83 [83]. 256 Bropho v Western Australia (2008) 169 FCR 59 at 83 [82]. Bell The Full Federal Court concluded257: "although the authorities on s 10 of the [RDA] recognise that there is no basis for distinguishing between different species of ownership of property, no property right, regardless of its source or genesis, is absolute in nature, and no invalid diminution of property rights occurs where the State acts in order to achieve a legitimate and non-discriminatory public goal." The Commonwealth, South Australia and the AHRC each support the approach adopted by the Full Federal Court, and would not limit the approach to the right to own property. They each submit that, in addition to the law pursuing a legitimate and non-discriminatory goal, the means adopted by the law must be proportionate to the attainment of that goal. In contrast, the respondent adopts the Bropho test and submits that there is no requirement to import considerations of proportionality. in s 10 for textual footing the AHRC's submission the the proportionality analysis is the words "enjoy a right". The concept, it is said, must take account of any limitation on the enjoyment of the right that is recognised in human rights jurisprudence. The Committee on the Elimination of Racial Discrimination ("the CERD Committee") established under Art 8 of the Convention, in its general recommendation on the functioning of the criminal justice system, appears to accept that laws having a legitimate objective and the which respect Convention258. In a similar vein, the United Nations Human Rights Committee, speaking of Art 26 of the International Covenant on Civil and Political Rights ("the ICCPR")259, states that if the criteria for differentiation are reasonable and objective, and if the aim of differentiation is to achieve a purpose which is the differentiation will not constitute legitimate under the principle of proportionality will not contravene ICCPR, the 257 Bropho v Western Australia (2008) 169 FCR 59 at 83-84 [83]. 258 CERD Committee, "General recommendation XXXI on the prevention of racial discrimination in the administration and functioning of the criminal justice system", recorded in the Report of the Committee on the Elimination of Racial Discrimination, UN GAOR, 60th sess, Supp No 18, UN Doc A/60/18 (2005) 98. 259 Article 26 states: "All persons are equal before the law and are entitled without any discrimination to the equal protection of the law. In this respect, the law shall prohibit any discrimination and guarantee to all persons equal and effective protection against discrimination on any ground such as race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status." Bell discrimination260. Drawing on these statements, the AHRC submits that a law imposing a limitation on a right for a legitimate purpose will not engage s 10(1) if its effect on the enjoyment of rights is not disproportionate to the claimed purpose or benefit of the law. The starting point in the Commonwealth's analysis is the recognition that the Convention is directed to securing substantive equality in the enjoyment of rights. The principle of equality is discussed by Brennan J in Gerhardy261. As his Honour observes, the recognition that "formal equality" is insufficient to eliminate all forms of racial discrimination is of long standing262. In this context, the Commonwealth submits that a law which results in the differential enjoyment of rights does not infringe the protection of s 10(1) if it serves a purpose that may be regarded as legitimate in the context of the overriding norm of equality enshrined in the Convention. The RDA allows that the enjoyment of Convention rights may be denied or limited by a law of a State that has a legitimate object consistent with the attainment of substantive equality for persons of a particular race. Section 8(1) excludes such a law from the operation of Pt II of the RDA (which includes ss 9 and 10 and the prohibition on racial discrimination in the respects identified in ss 11-17) provided the law meets the criterion of being a "special measure" to which Art 1(4) of the Convention applies. Where it is engaged, s 8(1) also provides an answer to any claim of unlawful discrimination under Pt II263. The provision in s 8(1) for the exclusion of a law which has as its sole purpose the attainment of substantive equality in the enjoyment of Convention rights argues against confining the protection of s 10(1) by considerations of the same character. Nothing in the text of s 10 interpreted in its statutory context warrants reading the provision as engaged only by a law that limits the enjoyment of rights for a purpose that is not "legitimate" or in a manner that is disproportionate to the achievement of a "legitimate" purpose. Section 8(1) is the means by which laws 260 United Nations Human Rights Committee, CCPR General Comment No 18: Non- discrimination, (1989) at [13]. 261 (1985) 159 CLR 70 at 128-131. 262 Gerhardy v Brown (1985) 159 CLR 70 at 128 citing Advisory Opinion on Minority Schools in Albania (1935) Ser A/B No 64 at 19; and see McKean, Equality and Discrimination under International Law, (1983) at 285-288. 263 Meron, "The Meaning and Reach of the International Convention on the Elimination of All Forms of Racial Discrimination", (1985) 79 American Journal of International Law 283 at 305. Bell may validly provide for the differential enjoyment of Convention rights based on race in order to secure substantive equality. The first right which Ms Maloney submits the liquor restrictions limit is the right to equal treatment before the tribunals and all other organs administering justice recognised by Art 5(a). Ms Maloney does not complain that she was treated differently from the way non-Aboriginal accused persons are treated before the courts in Queensland. Her contention is that the right to equality of treatment extends to the substantive provisions of the law. She complains that she has been convicted of an offence against a law that in its practical operation and effect is directed to Aboriginal persons. Those submissions should be rejected. The right in Art 5(a) is akin to the right declared in Art 14 of the ICCPR and is to be understood as a right to equality of access to courts and other adjudicative bodies and in the application of the law by them264. Ms Maloney's submission that there is a human right not to be discriminated against in the substantive provisions of the law is supported by the AHRC. In the AHRC's submission, the right is sourced in the guarantee of equality before the law expressed in the opening words of Art 5. The identification of human rights, it submits, is not to be treated as a selection of discrete items from "a shopping catalogue of rights". The right of equality before the law, the AHRC submits, is recognised in Gerhardy in Mason J's statement that "[t]he expression [human rights] includes claims of individuals as members of a racial or ethnic group to equal treatment of the members of that group in common with other persons"265. In the same case, Brennan J said266: "The conception of human rights and fundamental freedoms in the Convention definition of racial discrimination describes that complex of rights and freedoms the enjoyment of which permits each member of a society equally with all other members of that society to live in full dignity, to engage freely in any public activity and to enjoy the public benefits of that society. If it appears that a racially classified group or one of its members is unable to live in the same dignity as other people who are not members of the group, or to engage in a public activity as freely as others can engage in such an activity in similar circumstances, or to enjoy the public benefits of that society to the same extent as others may do, and 264 Nowak, UN Covenant on Civil and Political Rights: CCPR Commentary, (1993) at 466; United Nations Human Rights Committee, General Comment No 32 β Article 14: Right to equality before courts and tribunals and to a fair trial, UN Doc CCPR/C/GC/32 (2007) at [8], [12], [13]. 265 Gerhardy v Brown (1985) 159 CLR 70 at 101-102. 266 Gerhardy v Brown (1985) 159 CLR 70 at 126-127. Bell that the disability exists because of the racial classification, there is a prima facie nullification or impairment of human rights and fundamental freedoms." The guarantee of equality before the law stated in Art 5 is said to embrace the concept of the equal protection of the law that is recognised in Art 7 of the Universal Declaration of Human Rights ("the UDHR"), which provides: "All are equal before the law and are entitled without any discrimination to equal protection of the law. All are entitled to equal protection against any discrimination in violation of this Declaration and against any incitement to such discrimination." So, too, Art 26 of the ICCPR recognises a right of equality before the law and to the equal protection of the law. On the AHRC's analysis, s 10(1) invalidates a law that creates or results in "adverse distinctions because of race". A "right" engaging s 10(1) thus becomes the freedom to engage in conduct that is not otherwise prohibited by law. The enjoyment of the rights which engage s 10(1) is the enjoyment of "human rights and fundamental freedoms in the political, economic, social, cultural or any other field of public life"267. Neither the Charter of the United Nations, Art 55(c) of which commits the member States to universal respect for and observance of "human rights and fundamental freedoms", nor the Convention essays a definition of what those rights and freedoms are. Whatever their scope, they are protected by the Convention, which unlike the ICCPR is not confined to the particular rights stated in it268. The rights and freedoms protected by the Convention should be interpreted widely, in accord with the Convention's beneficial purpose. The right stated in Art 7 of the UDHR and its analogue in Art 26 of the ICCPR may now form part of the customary law of nations269. The right should be accepted to be a human right of a kind that is within the scope of the Convention and s 10(1). The difficulty lies in ascertaining the content of the right. 267 Convention, Art 1(1), definition of "racial discrimination". 268 Meron, "The Meaning and Reach of the International Convention on the Elimination of All Forms of Racial Discrimination", (1985) 79 American Journal of International Law 283 at 286. 269 Humphrey, "The Implementation of International Human Rights Law", (1978) 24 New York Law School Law Review 31 at 32-33; Lillich, "Civil Rights", in Meron (ed), Human Rights in International Law, (1984), vol 1 at 116. Bell The AHRC's contention that the right is one not to be discriminated against in the provisions of a law is illustrated by Professor Nowak's statement of the scope of Art 26 of the ICCPR270: "The [ICCPR] contains no provision granting a right to sit on a park bench. But when a State Party enacts a law forbidding Jews or blacks from sitting on public park benches, then this law violates Art 26." The power of the illustration is reflected by the respondent's submissions on its notice of contention. In this part of its argument, the respondent accepted that had the liquor restrictions prohibited the possession of alcohol on Palm Island only by Aboriginal persons, they would have engaged s 10(1). It was said: "That result would have followed because the comparator, a non- Aboriginal person in a public place on Palm Island, would have enjoyed a right, the freedom from a legal prohibition against the possession of alcohol on Palm Island, which was not enjoyed by Aboriginal persons." (emphasis added) The United Nations Human Rights Committee distinguishes the right stated in Art 14 of the ICCPR, of equality before courts and tribunals, from Art 26. The latter, in the Committee's view, is "an autonomous right" prohibiting discrimination in law in any field regulated and protected by public authorities271. However, as Professor Nowak's Commentary makes plain, the content of the right is controversial272. Indeed, Australia's acceptance of Art 26 was "on the basis that the object of the provision is to confirm the right of each person to equal treatment in the application of the law"273, an understanding that Australia's 270 Nowak, UN Covenant on Civil and Political Rights: CCPR Commentary, (1993) at 271 United Nations Human Rights Committee, CCPR General Comment No 18: Non- discrimination, (1989) at [12]. 272 Nowak, UN Covenant on Civil and Political Rights: CCPR Commentary, (1993) at 458-475; Meron, "The Meaning and Reach of the International Convention on the Elimination of All Forms of Racial Discrimination", (1985) 79 American Journal of International Law 283 at 291-293; Lillich, "Civil Rights", in Meron (ed), Human Rights in International Law, (1984), vol 1 at 132-133; Schwelb, "The International Convention on the Elimination of All Forms of Racial Discrimination", (1966) 15 International and Comparative Law Quarterly 996 at 1018-1019. 273 Meron, "The Meaning and Reach of the International Convention on the Elimination of All Forms of Racial Discrimination", (1985) 79 American Journal of International Law 283 at 292 fn 49 citing Multilateral Treaties Deposited with (Footnote continues on next page) Bell representative suggested was more in keeping with the original intention of the framers of the ICCPR274. In circumstances in which, as will be explained, Ms Maloney's submission that her rights under Arts 5(d)(v) and 5(f) are impaired by the liquor restrictions should be accepted, it is unnecessary and for that reason inappropriate to determine whether s 10(1) protects a right to equality before the law of the breadth for which the AHRC contends. As earlier noted, the right that forms the principal focus of Ms Maloney's challenge is the right to own property recognised in Art 5(d)(v). It is not an answer to Ms Maloney's claim to observe that the right to the ownership and possession of alcohol does not enjoy universal recognition or that one incident of the right β possession in a public place β is commonly subject to legal restriction. The civil, economic, social and cultural rights and the right of access recognised in Art 5 may all be the subject of lawful non-discriminatory regulation. The content of a number of the rights recognised in Art 5 is likely to vary between nations. The Convention requires States Parties to nullify laws that create distinctions based on race which have the purpose or effect of impairing equality in the enjoyment of the rights to which it refers. In Australian society, competent adults may own alcohol. Aboriginal persons on Palm Island enjoy that right to a more limited extent than persons elsewhere in Queensland (the vast majority of whom are not Aboriginal) by reason of the liquor restrictions. McMurdo P, correctly, said that "[t]he right is not the right to own rum or bourbon, but the right to own rum or bourbon in the same way and to the same extent as non- Indigenous Australians"275. Article 5(f) recognises a right of access not only to any place intended for use by the general public but also to any service intended for public use. The right of access to places and services recognised by the Convention is not found in other international human rights instruments. The right of all persons of access without distinction based on race to places and services intended for use the Secretary-General: Status as at 31 December 1981, UN Doc ST/LEG/Ser.E/1 274 Meron, "The Meaning and Reach of the International Convention on the Elimination of All Forms of Racial Discrimination", (1985) 79 American Journal of International Law 283 at 292-293 fn 49 citing Report of the Human Rights Committee, UN GAOR, 38th sess, Supp No 40, UN Doc A/38/40 (1983), pars 155, 275 R v Maloney [2013] 1 Qd R 32 at 38 [18]. Bell by the public is an important aspect of the ability to live in full dignity and enjoy the public benefits of the society276. The majority in the Court of Appeal rejected Ms Maloney's contention that the liquor restrictions impair her right of access to a service under Art 5(f) on the ground that the right is not concerned with the nature of the services provided. The right, it was said, is for all persons, regardless of race, to have access to the services which the premises in fact supply277. It is uncontroversial that the Art 5(f) right is not a right to require the proprietor of licensed premises to supply a particular service. Ms Maloney does not make such a claim. Her submission is that adult patrons of licensed premises elsewhere in Queensland are at liberty to order a range of alcoholic beverages including full strength beer, wine and spirits. The liquor restrictions make it unlawful for the licensed premises on Palm Island to supply its adult patrons with any form of alcohol apart from mid-strength or low alcohol beer278. Access to a service of the kind that is available to non-Aboriginal members of the general public elsewhere in Queensland β the supply at licensed premises of wine, spirits and full strength beer β is denied to the Aboriginal community of Palm Island by reason of the liquor restrictions. By reason of the liquor restrictions, Aboriginal persons on Palm Island enjoy the rights under Art 5(d)(v) and (f) to a more limited extent than persons of another race present elsewhere in Queensland. It follows that s 10(1) is engaged subject to consideration of whether the liquor restrictions qualify as special measures under s 8(1). If they do not, they will be invalidated because they impose a discriminatory burden279. Are the liquor restrictions "special measures"? Section 8(1) excludes from Pt II of the RDA "special measures" to which Art 1(4) of the Convention applies280. Article 1(4) states: 276 Gerhardy v Brown (1985) 159 CLR 70 at 126 per Brennan J. 277 R v Maloney [2013] 1 Qd R 32 at 62 [101]. 278 Liquor Act, s 168B(1) and Liquor Regulation, Sched 1R, s 2. 279 Western Australia v Ward (2002) 213 CLR 1 at 100 [107]-[108] per Gleeson CJ, Gaudron, Gummow and Hayne JJ citing Gerhardy v Brown (1985) 159 CLR 70 at 280 The exception under s 8(1) respecting special measures does not apply to measures in relation to which s 10(1) applies by virtue of s 10(3). Section 10(3) is not relevant to the appeal. Bell "Special measures taken for the sole purpose of securing adequate advancement of certain racial or ethnic groups or individuals requiring such protection as may be necessary in order to ensure such groups or individuals equal enjoyment or exercise of human rights and fundamental freedoms shall not be deemed racial discrimination, provided, however, that such measures do not, as a consequence, lead to the maintenance of separate rights for different racial groups and that they shall not be continued after the objectives for which they were taken have been achieved." The declaration of Palm Island as a restricted area for the purposes of Pt 6A of the Liquor Act was made by the Liquor Amendment Regulation (No 4) 2006 (Q) ("the Amendment Regulation"). There is no challenge to the making of the Amendment Regulation and it may be taken that the Minister was satisfied that the declaration was necessary to achieve the purposes of Pt 6A281. The Explanatory Notes to the Amendment Regulation included the following information282: Reasons for the subordinate legislation The Amendment Regulation will declare a restricted area for the community of Palm Island. The Amendment Regulation is based on the recommendations of the Palm Island Community Justice Group (CJG) and Palm Island Shire Council (Council). Consultation (a) Community The CJG and Council for the Indigenous community of Palm Island have recommended alcohol limits as part of their community alcohol management strategies. 281 Liquor Act, s 173G(3). 282 Queensland, Legislative Assembly, Liquor Amendment Regulation (No 4) 2006, Explanatory Notes at 1-3. Bell Results of consultation The proposed alcohol restrictions do differ from the recommendations of the CJG and Council. There is ongoing division within the CJG and between the CJG and the Council. This division has inhibited community agreement on an Alcohol Management Plan (AMP). Subsequently, the Government developed an AMP based on a compromise between the four separate AMPs that have previously been presented to Government by the CJG and the Council. On 19 January 2005, the Government presented a draft AMP to the Council and CJG for consideration and comment by 7 February 2005. On 3 February 2005, Government received correspondence from the Mayor of the Council accompanied by 22 completed survey forms. The Council feedback did not comment on the detail of the proposed AMP. However the Council did state that the AMP would not be successful without appropriate support structures. No other formal feedback has been received from the community β¦ Extensive consultation has been undertaken with the community. The final round of consultation occurred in February 2006. Across the community there was common agreement that unrestricted alcohol was a major concern that needed to be addressed." Ms Maloney was convicted in her absence before the Magistrates Court at Palm Island. On her appeal to the District Court of Queensland (Durward DCJ) against her conviction she was given leave to adduce new or further evidence. She tendered the affidavits of 14 residents of Palm Island. The deponents comprised members of the Palm Island Aboriginal Shire Council, the statutory community justice group, the former non-statutory community justice group and community elders. None were required for cross-examination. The purpose of the tender was to demonstrate the absence of a sufficient process of consultation with the community prior to the introduction of the liquor restrictions. Chesterman JA found the affidavit evidence established the deponents' opposition to the liquor restrictions and the existence of a division of opinion within the Palm Island community about their desirability or efficacy283. Ms Maloney submits that the Court of Appeal adopted an "unduly permissive" approach in characterising the liquor restrictions as a special measure, at odds with contemporary international jurisprudence. The concept of special measures, she submits, should be given a meaning that is consistent with 283 R v Maloney [2013] 1 Qd R 32 at 68 [112]. Bell principles of international law. The requirement that a special measure be taken for the sole purpose of securing adequate advancement of the group, and that such protection be necessary to achieve equality, are indicia that are said to invite "characterisation of the measure as judged against the need and purported end". Ms Maloney here draws an analogy with the characterisation of a law that is challenged as a burden on interstate trade or on the implied freedom of communication on governmental and political matters284. Ms Maloney acknowledges that it is for the political branch of government to determine whether the occasion exists for taking a particular measure. In determining the limits within which that assessment is made, she contends for "a significant role for the courts in evaluating the political judgment of the legislature and in declining to give effect to a putative special measure". Evidence of a process of genuine consultation in order to obtain the consent of the affected group permits the court to more readily accept that a measure is a special measure. In the absence of evidence of such a process, Ms Maloney submits that compelling justification is required for a measure to be held to be a special measure. The National Congress argues for a more stringent test conditioning special measures on the consent of the beneficiaries. In support of her submissions on the importance of consultation, Ms Maloney referred the Court to "general recommendations" issued by the CERD Committee as part of its functions under the Convention. The Committee recommends that communities should be consulted prior to the implementation of special measures or other actions affecting their rights285. Ms Maloney also referred to the United Nations Declaration on the Rights of Indigenous Peoples ("the UNDRIP"), Art 19 of which declares that States shall consult with 284 Castlemaine Tooheys Ltd v South Australia (1990) 169 CLR 436 at 472 per Mason CJ, Brennan, Deane, Dawson and Toohey JJ; [1990] HCA 1; Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 561-562; [1997] HCA 25; Betfair Pty Ltd v Western Australia (2008) 234 CLR 418 at 477 [102]- [103] per Gleeson CJ, Gummow, Kirby, Hayne, Crennan and Kiefel JJ; [2008] HCA 11. 285 CERD Committee, "General Recommendation on the rights of indigenous peoples", recorded in the Report of the Committee on the Elimination of Racial Discrimination, UN GAOR, 52nd sess, Supp No 18, UN Doc A/52/18 (1997) 122 at 122 [4(d)]; CERD Committee, "General recommendation No 32 (2009): The meaning and scope of special measures in the International Convention on the Elimination of Racial Discrimination", recorded in the Report of the Committee on the Elimination of Racial Discrimination, UN GAOR, 64th sess, Supp No 18, UN Doc A/64/18 (2009) 152 at 155 [16], [18]. Bell indigenous communities to obtain their consent before adopting measures that may affect them286. The text of Art 1(4) is transposed into s 8(1) of the RDA. The legislative intention to be discerned is that the expression "special measures" in s 8(1) bear the same meaning as in the treaty287. That meaning is ascertained by reference to the ordinary meaning of the words in their context and in the light of the object and purpose of the Convention288, and by reference to the materials comprising context and referred to in Art 31(2) and (3) of the Vienna Convention. Neither the recommendations of the CERD Committee nor the provisions of the UNDRIP are extrinsic materials of that kind (or of the kind mentioned in s 15AB(2) of the Acts Interpretation Act 1901 (Cth)). The criteria stated in Art 1(4) cannot be supplemented by additional criteria reflecting the non-binding recommendations of the CERD Committee. It may be accepted in light of the RDA's object that it is appropriate to give weight to the construction that the international community places upon the Convention289. This approach is evident in Brennan J's recognition in Gerhardy that the rights embraced by the Convention may come to be identified with more precision under international law290. Clarification of the content of the "human rights and fundamental freedoms" referred to in Art 1(1) under international law may result in s 10(1) engaging a greater or lesser number of rights than might have been understood in 1975. To acknowledge this is not to alter the meaning of s 10(1)291. Section 10(1) continues to operate, as the legislature intended, to protect equality of enjoyment of the rights recognised to be human rights and fundamental freedoms. 286 The Declaration was adopted on 13 September 2007, with Australia voting against its adoption. On 3 April 2009, the Australian Government announced that Australia had reversed its position and gave its support to the Declaration. 287 Applicant A v Minister for Immigration and Ethnic Affairs (1997) 190 CLR 225 at 230-231 per Brennan CJ, 239-240 per Dawson J, 251-252 per McHugh J, 272 per Gummow J, 292 per Kirby J; [1997] HCA 4. 288 Vienna Convention on the Law of Treaties, Art 31 ("the Vienna Convention"). 289 Queensland v The Commonwealth (1989) 167 CLR 232 at 240 per Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ; [1989] HCA 36. 290 Gerhardy v Brown (1985) 159 CLR 70 at 126. 291 Minister for Home Affairs (Cth) v Zentai (2012) 246 CLR 213 at 238-239 [65] per Gummow, Crennan, Kiefel and Bell JJ; [2012] HCA 28. Bell Advancement has as its object the enablement of the members of a disadvantaged racial group to live in full and equal dignity with other members of the community. Foisting a perceived benefit on a group that neither seeks nor wants the benefit does not sit well with respect for the autonomy and dignity of the members of the group. It was in this context that Brennan J observed that the wishes of the beneficiaries of a special measure "are of great importance (perhaps essential)"292. As the Commonwealth submits, there are difficulties in drawing a parallel between the consideration of special measures in the context in which the issue arose in Gerhardy and in the present appeal. The measure in Gerhardy conferred a benefit on one racial group over other racial groups taking into account the disadvantage of the former. The measure challenged in this appeal imposes a burden on members of a group for the protection of members of the same group. In this context, Western Australia challenges Ms Maloney's submissions respecting genuine consultation as patently vague. How, it asks, is the consent of adults who are addicted to alcohol to be obtained? The Commonwealth points to the obligation Australia has undertaken under the Convention to take special and concrete measures to ensure the adequate development and protection of racial groups, the Aboriginal community of Palm Island, so that the members of those groups enjoy rights, including the protection of the State from violence, on an equal footing293. Is it to be prevented from discharging the obligation because the community is divided on the issue? including Ms Maloney acknowledges that some form of alcohol management plan is appropriate for Palm Island. The acknowledgement does not deny her contention that the imposition of discriminatory restrictions on a community for the community's protection in the absence of adequate consultation evinces the same outdated paternalism as in the Aboriginals Protection and Restriction of the Sale of Opium Act 1897 (Q). Her submissions proceed upon the footing that with more time and engagement with the Aboriginal community of Palm Island a consensus might have emerged respecting an alcohol management plan that would have commanded broad community support. 292 Gerhardy v Brown (1985) 159 CLR 70 at 135. 293 Convention, Art 2(2): "States Parties shall, when the circumstances so warrant, take, in the social, economic, cultural and other fields, special and concrete measures to ensure the adequate development and protection of certain racial groups or individuals belonging to them, for the purpose of guaranteeing them the full and equal enjoyment of human rights and fundamental freedoms. These measures shall in no case entail as a consequence the maintenance of unequal or separate rights for different racial groups after the objectives for which they were taken have been achieved." Bell The CERD Committee's recommendations are directed to the executive and legislative organs of States Parties. It may be assumed that they are taken into account when those organs give effect to the obligation to take special and concrete measures of the kind envisaged by Art 2(2). It is evident that a process of consultation with the community of Palm Island was undertaken before the liquor restrictions were imposed. A political judgment was made that the divisions within the Palm Island community were inhibiting agreement on an alcohol management plan and that the declaration of Palm Island as a restricted area was necessary to achieve the purpose of Pt 6A of the Liquor Act. The validity of the liquor restrictions as special measures does not turn on the rightness of the judgment that the community was divided or the adequacy of the consultation which preceded the declaration. A measure is a special measure if it meets the indicia set out in Art 1(4). Nothing in Art 1(4) conditions a special measure on consultation with the affected group or on the community's consent. Ms Maloney's submission that a criterion of validity is that the restrictions imposed by the measure are proportionate to the attainment of its end depends on the use of the word "necessary" in Art 1(4). The Article is awkwardly expressed. In my opinion, the respondent's and the Commonwealth's analysis of its grammatical construction should be accepted. The expression "special measures" is qualified by the adjectival clause "taken for the sole purpose of securing adequate advancement". The adequate advancement is of "certain racial or ethnic groups or individuals". The groups or individuals require "such protection as may be necessary in order to ensure [their] equal enjoyment or exercise of human rights and fundamental freedoms". The phrase "as may be necessary" forms part of the clause that qualifies the "groups or individuals". It does not qualify the measure. Article 1(4) does not require that the special measure be necessary. It requires that the adequate advancement of the group or individuals is the sole purpose of the special measure. In this context, adequate advancement is to be understood as advancement directed to the attainment of substantive (as distinct from formal) equality in the enjoyment of human rights. The qualifier "adequate" makes clear that the advancement is to attain equality, as distinct from superiority, in the enjoyment or exercise of human rights and fundamental freedoms. Ms Maloney's submission that a test of reasonable necessity applies to the determination of whether a measure is a special measure is suggested to have support in the statements of some Justices in Gerhardy. She notes that Mason J spoke of the measure as being one that was "appropriate and adapted to a regime of the kind which is necessary"294. Deane J asked whether the measure is 294 Gerhardy v Brown (1985) 159 CLR 70 at 105. Bell "capable of being reasonably considered to be appropriate and adapted to achieving that purpose"295. Brennan J asked "could the political assessment inherent in the measure reasonably be made?"296 She submits that each formulation is directed to considerations of proportionality of the kind later to be applied in Castlemaine Tooheys Ltd v South Australia297 and Betfair Pty Ltd v Western Australia298. With the possible exception of Mason J, none of the members of the Court approached the characterisation of the impugned law by reference to a test of proportionality of the kind that Ms Maloney proposes. In my opinion, the determination of whether a law is within the statutory criteria of special measures does not import such a test. Subject to the application of the two provisos in Art 1(4), a law is a special measure if: (i) it applies to a racial or ethnic group or individuals; (ii) who are in need of protection in order to ensure their equal enjoyment or exercise of human rights and fundamental freedoms; and (iii) the sole purpose of the measure is the attainment of the object stated in (ii). The question of the capacity of the measure to be reasonably considered as appropriate and adapted is directed to (iii). Deane J explained it in this way in Gerhardy299: "What is necessary for characterization of legislative provisions as having been 'taken' for a 'sole purpose' is that they can be seen, in the factual context, to be really and not colourably or fancifully referable to and explicable by the sole purpose which is said to provide their character. They will not be properly so characterized unless their provisions are capable of being reasonably considered to be appropriate and adapted to achieving that purpose." As Deane J went on to say, the court is not concerned to determine whether the legislative provisions are the appropriate ones to achieve the purpose300. The use of the expression "reasonably appropriate and adapted" has been criticised as cumbersome and lacking in clarity. The criticism is in the context of 295 Gerhardy v Brown (1985) 159 CLR 70 at 149. 296 Gerhardy v Brown (1985) 159 CLR 70 at 139. 297 (1990) 169 CLR 436. 298 (2008) 234 CLR 418. 299 (1985) 159 CLR 70 at 149. 300 Gerhardy v Brown (1985) 159 CLR 70 at 149. Bell its use when applied to the determination of the validity of a law which imposes a burden on a freedom for which the Constitution expressly or impliedly provides301. It is accepted doctrine in that context that the validity of the law depends upon a criterion of reasonable necessity302. The application of that criterion requires consideration of whether the law is proportionate to the legitimate end it seeks to serve. In the statutory context of this case, attention is upon the criteria stated in Art 1(4). Those criteria do not require the court to consider, as Ms Maloney submits, whether there are "reasonably available alternatives to respond to the problem which are less restrictive of the protected interest". Provided that a measure can be characterised as having as its sole purpose the adequate advancement of a racial group or individuals who are in need of protection in order to attain equality in the enjoyment of rights, the measure will qualify as a special measure (subject to the provisos in Art 1(4)). The determination of whether the measure can be characterised as having that sole purpose does not import a test of reasonable necessity. The nature and extent of the burden imposed by the law and the adequacy of the consultation with those who are to be affected by it are matters that may be relevant to the determination of whether it is a special measure. This is because a law limiting the enjoyment of the rights of a group enacted without adequate consultation with the group may not be capable of being reasonably considered to be appropriate and adapted to the sole purpose of securing the group's adequate advancement. To the extent that the characterisation of a measure as a special measure depends upon matters of fact the court is to ascertain the facts "as best it can"303. It may invite and receive assistance from the parties and, subject to the obligations of procedural fairness, is free to inform itself from other public, authoritative sources304. Ms Maloney submits that the Cape York Justice Study305 is not relevant to the determination because the focus of the study was 301 Monis v The Queen (2013) 87 ALJR 340 at 408 [345] per Crennan, Kiefel and Bell JJ; 295 ALR 259 at 345; [2013] HCA 4. 302 Betfair Pty Ltd v Western Australia (2008) 234 CLR 418 at 477 [102]-[103] per Gleeson CJ, Gummow, Kirby, Hayne, Crennan and Kiefel JJ. 303 Commonwealth Freighters Pty Ltd v Sneddon (1959) 102 CLR 280 at 292 per Dixon CJ; [1959] HCA 11; Gerhardy v Brown (1985) 159 CLR 70 at 141-143 per 304 Gerhardy v Brown (1985) 159 CLR 70 at 142; Thomas v Mowbray (2007) 233 CLR 307 at 512-522 [613]-[639] per Heydon J; [2007] HCA 33. 305 Fitzgerald, Cape York Justice Study, (2001). Bell not on the Aboriginal community of Palm Island. However, it is sufficient to observe that the Cape York Justice Study, when read with the Explanatory Notes to the Amendment Regulation, supports the conclusion that it was reasonably open to the Queensland legislature to find that the Aboriginal community of Palm Island is a group in need of protection to ensure its equal enjoyment of the human right to security of the person and protection by the State from violence. It is material which the court may take into account together with the Explanatory Notes and the affidavit evidence in determining whether the liquor restrictions are capable of being reasonably considered to be appropriate and adapted to the achievement of the adequate advancement of the Aboriginal community of Palm Island such that the attainment of that object may be accepted to be their sole purpose. Are the liquor restrictions special measures? They apply to a racial group: the Aboriginal community of Palm Island. It is accepted that an alcohol management plan is appropriate for the Aboriginal community of Palm Island. That acceptance carries with it, to use the words of Art 1(4), acceptance that the community "requir[es] such protection as may be necessary in order to ensure [the community's] equal enjoyment or exercise of human rights", including, relevantly, the right to security of the person and State protection from violence. The violence of which members of the community of Palm Island are at risk is associated with excessive consumption of alcohol. Neither the absence of a more extensive process of consultation, nor the circumstance that the liquor restrictions criminalise personal conduct that is lawful elsewhere, leads to the conclusion that they are not capable of being reasonably considered to be appropriate and adapted to the achievement of their purpose. The purpose of Pt 6A is stated to be the minimisation of alcohol related violence, disturbances and public disorder. Alcohol fuelled disturbances and public disorder are not unconnected to alcohol related violence. It is a judgment of excessive refinement to say, as Ms Maloney does, that because the liquor restrictions have as their purpose minimising alcohol related disturbances on Palm Island, they do not have the sole purpose of securing equality of enjoyment of security of the person and State protection from violence. A special measure must not lead to the maintenance of separate rights for different racial groups and must not be continued after the objectives for which it was taken have been achieved. No submissions were directed to the first proviso and no occasion arises to consider its scope. With respect to the second proviso, contrary to Ms Maloney's submission, a measure is not required to provide for its terminus to qualify as a special Bell measure306. As special measures are not to continue after their objectives have been achieved, it may be expected that some mechanism for review of the operation of the measure will be provided. Reports have been tabled in the Parliament recording what are considered to be the effects of the liquor restrictions by reference to key indicators. Amendments to the liquor restrictions and to similar restrictions in other restricted areas have been made that appear to take the findings of those reports into account307. The introduction of amendments to the liquor restrictions and other similar restrictions in 2008 weighs against the conclusion that the objectives of the liquor restrictions had been achieved as at 31 May 2008 when Ms Maloney was charged with the offence under s 168B. The liquor restrictions are within the indicia stated in Art 1(4) and are not excluded under either proviso. It follows that the Court of Appeal was correct to find that they are special measures for the purposes of s 8(1) to which Pt II of the RDA does not apply. The appeal should be dismissed. 306 Gerhardy v Brown (1985) 159 CLR 70 at 88-89 per Gibbs CJ, 106 per Mason J, 113 per Wilson J, 140-141 per Brennan J, 154 per Deane J. 307 See, for example, the Liquor Amendment Regulation (No 3) 2008 (Q). Introduction Palm Island comprises a group of ten islands forming part of Queensland situated about 70 kilometres north of Townsville. Palm Island was established as an Aboriginal reserve under Queensland legislation308 in 1914 and retained that or a similar status under subsequent Queensland legislation309 until 1986310. Title to Palm Island was then granted in trust under the Land Act 1962 (Q) to the Palm Island Aboriginal Council, an Aboriginal council under the Community Services (Aborigines) Act 1984 (Q) ("the Aboriginal Communities Act")311, and Palm Island became a "trust area" (subsequently redesignated a "community area") within the jurisdiction of the Palm Island Aboriginal Council under the Aboriginal Communities Act312. In 2004, by force of the Local Government (Community Government Areas) Act 2004 (Q) ("the Community Government Areas Act"), as well as being continued as a community area within the meaning of the Aboriginal Communities Act as then amended, Palm Island was declared to be a "local government area" and by virtue of that also became a "community government area" to which provisions of the Local Government Act 1993 (Q) thereafter applied and the Palm Island Aboriginal Council was continued in existence as the Palm Island Shire Council313. 308 The Aboriginals Protection and Restriction of the Sale of Opium Act 1897 (Q). 309 The Aboriginals Preservation and Protection Act 1939 (Q); The Aborigines' and Torres Strait Islanders' Affairs Act 1965 (Q); Aborigines Act 1971 (Q). 310 See generally Clumpoint v Director of Public Prosecutions (Qld) [2005] QCA 43 311 Renamed in 2004 as the Aboriginal Communities (Justice and Land Matters) Act 1984 (Q) and in 2007 as the Aboriginal and Torres Strait Islander Communities (Justice, Land and Other Matters) Act 1984 (Q). 312 Sections 6(2) and 14 of the Aboriginal Communities Act as at 27 October 1986, the date of the grant. 313 Sections 3, 7 (read with Sched 2) and 11 (read with Sched 4 ("community government area")) and s 70(1) (read with Sched 3) of the Community Government Areas Act. According to the results of the 2006 census as published by the Australian Bureau of Statistics, Palm Island then had about 2000 residents, of whom over 90 per cent were Aboriginal314. Ms Maloney is an Aboriginal woman who was born on Palm Island and who remains a resident of Palm Island. On 31 May 2008, she was an occupant of a motor vehicle intercepted by Queensland Police on a public road on Palm Island. She admitted to owning a 1.125 litre bottle of Jim Beam Bourbon and a three-quarter full 1.125 litre bottle of Bundaberg Rum found to be contained in a backpack in the boot of the vehicle. Ms Maloney was charged with an offence against s 168B of the Liquor Act 1992 (Q) ("the Liquor Act"). The particulars of the charge were that "in a public place namely Palm Island within a restricted area declared under section 173H of the [Liquor Act] namely Palm Island" she "did have in her possession a quantity of liquor namely Rum and Bourbon being more than the prescribed quantity of liquor for the area other than under the authority of a restricted area permit". Ms Maloney was convicted of that offence in the Magistrates Court at Palm Island. She was ordered to pay a $150 fine, and to spend one day in prison in default of payment. The liquor she owned was forfeited. She appealed unsuccessfully against her conviction to the Townsville District Court and was refused leave to appeal to the Court of Appeal of the Supreme Court of Queensland. The argument of Ms Maloney, unsuccessful in the Townsville District Court and in the Queensland Court of Appeal, was that s 168B of the Liquor Act, in its application to Aboriginal persons on Palm Island, was inconsistent with s 10 of the Racial Discrimination Act 1975 (Cth) ("the RDA") and was to that extent invalid under s 109 of the Constitution. Ms Maloney repeats and elaborates on that argument in her appeal, by special leave, to the High Court. She does so with the support of the National Congress of Australia's First Peoples Ltd ("the National Congress"), which was granted leave to appear in the appeal. The Crown in right of the State of Queensland ("Queensland"), as respondent to the appeal, does not dispute that s 168B of the Liquor Act would be invalid under s 109 of the Constitution if and to the extent s 10 of the RDA has application. Queensland argues that s 10 of the RDA has no application. Queensland argues that is because s 10 is not engaged in its own terms and, in the 314 Australian Bureau of Statistics, "Palm Island (Palm Island Shire), Basic Community Profile", in 2006 Census of Population and Housing, (2007) B01. alternative, because s 10 is excluded by s 8 of the RDA. Queensland argues with the support of the Attorneys-General of the Commonwealth, South Australia and Western Australia, who intervene as of right. The Australian Human Rights Commission, intervening by leave, makes submissions about ss 8 and 10 of the RDA without supporting either party. The appeal gives rise to novel and important issues concerning the meaning and application of ss 8 and 10 of the RDA. The resolution of those issues requires close attention to underlying provisions of the International Convention on the Elimination of All Forms of Racial Discrimination (1965) ("the Convention") and to prior authority of the High Court and is assisted by a consideration of earlier decisions of the Queensland Court of Appeal and the Full Court of the Federal Court. They are best addressed after explaining first the scheme and relevant application of the Liquor Act. The Liquor Act The Liquor Act defines liquor to mean "a spiritous or fermented fluid of an intoxicating nature intended for human consumption"315. The principal focus of the Liquor Act is on the regulation of the liquor industry in Queensland. That regulation is achieved, for the most part, by restricting the sale and supply of liquor to sale or supply by licensed persons conducting businesses on licensed premises. The Liquor Act also contains, within Pt 6, a number of general prohibitions. Those general prohibitions have long included a prohibition against the consumption of liquor in a public place that is a road or that is land owned or under the control of a local government316. One exception to that prohibition is if the consumption of liquor in the place is authorised or permitted under a licence or permit317. Another is if the place is at the relevant time designated by the local government to be a place where liquor may be consumed318. The Liquor Act has always empowered the Governor in Council to make regulations under the Liquor Act, including with respect to the consumption or possession of liquor in a public place and including by creating offences and fixing penalties for those offences319. 315 Section 4B(1). 316 Section 173B(1)(a), inserted by the Liquor Amendment Act 1992 (Q). 317 Section 173B(2)(a). 318 Sections 173B(2)(b) and 173C. 319 Sections 235(1), 235(2)(e) and 235(3). Section 168B is an addition to these long-standing prohibitions within Pt 6 of the Liquor Act. Section 168B and associated provisions in Pt 6A and in Div 13B of Pt 4 were inserted into the Liquor Act as part of a range of amendments effected by the Indigenous Communities Liquor Licences Act 2002 (Q) ("the 2002 Act"). The legislatively expressed purpose of the 2002 Act was to "prevent harm in community areas caused by alcohol abuse and misuse and associated violence"320. The "community areas" that were the focus of the 2002 Act were defined to encompass community areas within the jurisdiction of Aboriginal councils under the Aboriginal Communities Act and community areas within the jurisdiction of Island councils under the similarly structured Community Services (Torres Strait) Act 1984 (Q)321. Those community areas later became local government areas and community government areas by operation of the Community Government Areas Act as well as community areas under the Aboriginal Communities Act as amended in 2004. The 2002 Act was explained at the time of its enactment as a partial response to a report to the Queensland Government of an investigation into indigenous communities in Cape York published in 2001 ("the Cape York Justice Study")322. The Cape York Justice Study had found alcohol abuse and associated violence in indigenous communities in Cape York to be "so prevalent and damaging that they threaten the communities' existence and obstruct their development" and had recommended immediate intervention323. As inserted in 2002 and as in force as at 31 May 2008, s 168B of the Liquor Act provided in part324: "A person must not, in a public place in a restricted area to which this section applies because of a declaration under section 173H, have in possession more than the prescribed quantity of liquor for the area, other than under the authority of a restricted area permit." 320 Section 3(1). 321 Section 4 and the Schedule ("community area" and "indigenous council"). 322 Queensland, Legislative Assembly, Parliamentary Debates (Hansard), 6 August 2002 at 2631-2634; Queensland, Legislative Assembly, Indigenous Communities Liquor Licences Bill 2002, Explanatory Notes at 1-2, 8, referring to the Queensland Department of Premier and Cabinet, Cape York Justice Study, (2001). 323 Quoted in Queensland, Legislative Assembly, Indigenous Communities Liquor Licences Bill 2002, Explanatory Notes at 2. 324 Section 168B(1). Section 173H, to which reference was made in s 168B, was within Pt 6A of the Liquor Act. As inserted in 2002 and as in force as at 31 May 2008, Pt 6A commenced with s 173F, which provided: "The purpose of this part is to provide for the declaration of areas for minimisingβ harm caused by alcohol abuse and misuse and associated violence; and alcohol related disturbances, or public disorder, in a locality." Within Pt 6A of the Liquor Act, s 173G provided that "[a] regulation may declare an area to be a restricted area"325, and that an area so declared to be a restricted area might be a community area or part of a community area under the Aboriginal Communities Act326. Section 173G provided that, in recommending the Governor in Council make the regulation, the Minister administering the Act "must be satisfied the declaration is necessary to achieve the purpose of this part"327. Section 173H went on to provide that "[a] regulation may declare that a restricted area is an area to which section 168B applies"328 and that such a regulation must state the quantity of liquor (to be referred to as "the prescribed quantity") that a person may have in possession in a public place in the restricted area without a "restricted area permit"329. Section 173I applied if a community area or part of a community area was in an area to be declared under s 173G to be a restricted area or to be declared under s 173H to be an area to which s 168B applied330. Section 173I provided that the Minister could recommend that the Governor in Council make the regulation only if the Minister had consulted with, or considered any recommendation that had been made by, the "community 325 Section 173G(1). 326 Section 173G(2). 327 Section 173G(3). 328 Section 173H(1). 329 Section 173H(2). 330 Section 173I(1). justice group for the community area"331, but went on to provide that failure to comply did not affect the validity of a regulation332. Regulations made under the Liquor Act for the purposes of ss 173G and 173H, like other subordinate legislation in Queensland, were required to be tabled in the Queensland Parliament, where they were subject to disallowance333. If the regulations were likely to impose appreciable costs on the community or part of the community, they were required to be accompanied as tabled by an explanatory note prepared under the authority of the responsible Minister334. An explanatory note was required to include, amongst other things, a brief statement of the policy objectives of the subordinate legislation, a brief statement of the reasons for those policy objectives, and a brief statement of "the way [those] policy objectives will be achieved by the legislation and why this way of achieving them is reasonable and appropriate"335. Where the subordinate legislation was preceded by consultation, an explanatory note was also required to include a brief statement of the way the consultation was carried out and of the results of the consultation together with a brief explanation of any changes made to the subordinate legislation because of the consultation336. A restricted area permit, to which reference was made in ss 168B and 173H of the Liquor Act, was a permit granted under Div 13B of Pt 4 of the Liquor Act. A restricted area permit could be granted, on application, by the chief executive of the department of the Minister administering the Liquor Act and could be subject to conditions imposed by the chief executive337. However, it could not be granted unless the chief executive was satisfied that the amount of liquor that the applicant had applied to have in possession was reasonable for the purpose stated in the application338. The permit authorised the permittee to have 331 Section 173I(2). 332 Section 173I(4). 333 Sections 49 and 50 of the Statutory Instruments Act 1992 (Q). 334 Section 22(2) of the Legislative Standards Act 1992 (Q) ("the Legislative Standards Act"). See also s 2 ("significant subordinate legislation") of the Legislative Standards Act and s 43 of the Statutory Instruments Act 1992 (Q). 335 Sections 24(1)(c) and 24(1)(d) of the Legislative Standards Act. 336 Section 24(2) of the Legislative Standards Act. 337 Sections 97(f), 103L(2) and 105(1)(a) of the Liquor Act; ss 33(10) and 33(11) of the Acts Interpretation Act 1954 (Q). 338 Section 103M. in possession in a public place in a restricted area more than the prescribed quantity of alcohol for the area only at the times or during the period, and only for the purpose, stated in the permit339. The community justice group for a community area, to which reference was made in s 173I of the Liquor Act, was a body established under regulations made under the Aboriginal Communities Act340, as amended contemporaneously with the 2002 Act341. The community justice group for a community area was required to comprise, to the greatest practicable extent, representatives of the main indigenous social groupings in the area342. As amended shortly after being made under the Liquor Act in 2002343, and as in force as at 31 May 2008, the Liquor Regulation 2002 (Q) ("the Liquor Regulation") declared for the purpose of s 173G of the Liquor Act that "[a]n area stated in a relevant schedule is a restricted area"344. It also declared that "[e]ach restricted area is an area to which section 168B of the Act applies"345 and that "[t]he prescribed quantity for a restricted area is the quantity stated for the area in a relevant schedule"346. Schedule 1R, the last of 18 relevant schedules to the Liquor Regulation, was headed "Palm Island". Schedule 1R to the Liquor Regulation was inserted by the Liquor Amendment Regulation (No 4) 2006 (Q) ("the Amendment Regulation"). As inserted by the Amendment Regulation in 2006 and as in force as at 31 May 2008, it stated that "the community area of the Palm Island Shire Council" was a restricted area, as was the foreshore of that community area and the Palm Island jetty347. It stated the prescribed quantity for each of those restricted areas to be 11.25 litres for beer with an alcohol concentration of less than 4 per cent and zero 339 Section 103L(1). 340 Section 18(1). 341 Section 10 of the Community Services Legislation Amendment Act 2002 (Q). 342 Section 20(3). 343 Liquor Amendment Regulation (No 2) 2002 (Q). 344 Section 37A. 345 Section 37B(1). 346 Section 37B(2). 347 Section 1 of Sched 1R. for any other liquor, save only that for particular licensed premises (identified as the "Palm Island Canteen") the prescribed quantity for beer with an alcohol concentration of less than 4 per cent was to be "any quantity"348. The explanatory note for the Amendment Regulation explained it to be "based on the recommendations of the Palm Island Community Justice Group (CJG) and Palm Island Shire Council (Council)", each of which had "recommended alcohol limits as part of their community alcohol management strategies"349. The explanatory note went on to explain350: "The proposed alcohol restrictions do differ from the recommendations of the CJG and Council. There is ongoing division within the CJG and between the CJG and the Council. This division has inhibited community agreement on an Alcohol Management Plan (AMP). Subsequently, the Government developed an AMP based on a compromise between the four separate AMPs that have previously been presented to Government by the CJG and the Council. On 19 January 2005, the Government presented a draft AMP to the Council and CJG for consideration and comment by 7 February 2005. On 3 February 2005, Government received correspondence from the Mayor of the Council accompanied by 22 completed survey forms. The Council feedback did not comment on the detail of the proposed AMP. However the Council did state that the AMP would not be successful without appropriate support structures. No other formal feedback has been received from the community. The restricted area for the community will comprise the whole of the Palm Island Shire including all ten islands, the Palm Island jetty located on Greater Palm Island and all the island foreshores. It is proposed that the possession of liquor in the community will be restricted to one carton (11.25 litres) of light or mid strength beer. Extensive consultation has been undertaken with the community. The final round of consultation occurred in February 2006. Across the community there was common agreement that unrestricted alcohol was a major concern that needed to be addressed. 348 Section 2 of Sched 1R. 349 Queensland, Legislative Assembly, Liquor Amendment Regulation (No 4) 2006, Explanatory Notes at 1 [4] and 2 [8(a)]. 350 Queensland, Legislative Assembly, Liquor Amendment Regulation (No 4) 2006, Explanatory Notes at 2-3 [9]. The AMP is necessary for Palm Island to effectively address its alcohol related issues. It is the Government's experience that in other Indigenous communities where similar alcohol related issues were present and an AMP was implemented, the quality of life has generally improved." A somewhat more extensive explanation of the history of the Liquor Regulation, and of the policy objectives underlying the Liquor Regulation, was set out in an explanatory note accompanying the Liquor Amendment Regulation (No 3) 2008 (Q) ("the Further Amendment Regulation"). The Further Amendment Regulation amended statements of prescribed quantity in a number of schedules to the Liquor Regulation with effect from 2 January 2009 but left the statement of prescribed quantity in Sched 1R substantially unchanged. The Further Amendment Regulation and its accompanying explanatory note were tabled in the Queensland Parliament on 11 November 2008351, slightly less than six months after the events giving rise to the offence of which Ms Maloney was convicted. Under the heading "Reasons for the subordinate legislation", the explanatory note stated352: "Between 2002 and 2006, alcohol restrictions have been implemented in 18 Indigenous communities. Alcohol restrictions are declared under part 6A of the Liquor Act by way of regulation and prescribe the amount of alcohol that can be in a person's possession or in a vehicle (carriage limit). In 2007, the Office for Aboriginal and Torres Strait Islander Partnerships, Department of Communities conducted a whole-of-government review of alcohol restrictions, programs and services. The review showed that despite existing restrictions, in many remote Indigenous communities alcohol-related harm and violence remain significantly higher, and school attendance significantly below, average Queensland standards. In February 2008, the Premier met with Indigenous community mayors and announced an reform package whereby communities were urged to go 'as dry as possible' with government to provide improved alcohol-related support services. Part of the reforms included a review of all carriage limits in the communities. Indigenous alcohol The review of carriage limits assessed the levels of harm occurring in communities and consultation was undertaken with community and other 351 Queensland, Legislative Assembly, Parliamentary Debates (Hansard), 11 November 2008 at 3335. 352 Queensland, Legislative Assembly, Liquor Amendment Regulation (No 3) 2008, Explanatory Notes at 1-2. stakeholders. The Strong Indigenous Communities, Chief Executive Officers' Committee β¦ has overseen the review. Where alcohol-related harm is high, tighter restrictions on the quantity and strength of alcohol are required. Harm levels in the communities subject to regulatory amendment range from 7.5 times to 13.6 times Queensland's expected number of hospital admissions for assault; and from 11.2 times to 24.6 times the expected number of reported offences against the person." The Convention The preamble to the RDA recites the purpose of the RDA as being "to make the provisions contained in [the RDA] for the prohibition of racial discrimination β¦ and, in particular, to make provision for giving effect to the Convention". In light of that stated purpose, it is appropriate at the outset to note not only the relevant text of the Convention as set out in the Schedule to the RDA but also the context of the Convention, which includes its relationship to other international human rights instruments. The Convention had its origin in the Charter of the United Nations (1945), which states amongst its purposes "[t]o achieve international cooperation β¦ in promoting and encouraging respect for human rights and for fundamental freedoms for all without distinction as to race β¦"353, and in the Universal Declaration of Human Rights354 ("the Universal Declaration"), adopted by resolution of the General Assembly of the United Nations in 1948, the first recital of which was that "recognition of the inherent dignity and of the equal and inalienable rights of all members of the human family is the foundation of freedom, justice and peace in the world". The Universal Declaration declared, amongst other things, by Art 1 that "[a]ll human beings are born free and equal in dignity and rights", by Art 2 that "[e]veryone is entitled to all the rights and freedoms set forth in this Declaration, without distinction of any kind, such as race β¦", and by Art 7 that "[a]ll are equal before the law and are entitled without any discrimination to equal protection of the law". Article 2 of the Universal Declaration, as distinct from Art 7, was soon after reflected in the Convention for the Protection of Human Rights and Fundamental Freedoms, adopted by members of the Council of Europe in 1950 ("the European Convention"), Art 14 of which provided that "[t]he enjoyment of the rights and freedoms set forth in [that] Convention shall be secured without discrimination on any ground such as β¦ race β¦". 353 Article 1(3) of the Charter of the United Nations. 354 Universal Declaration of Human Rights (1948). In opening for signature in December 1965 and entering into force in 1969, the Convention pre-dated the International Covenant on Economic, Social and Cultural Rights (1966) ("the ICESCR"), under Art 2 of which States Parties "undertake to guarantee that the rights enunciated in the [ICESCR] will be exercised without discrimination of any kind as to race β¦", and the International Covenant on Civil and Political Rights (1966) ("the ICCPR"), under Art 2 of which each State Party similarly "undertakes to respect and to ensure to all individuals within its territory and subject to its jurisdiction the rights recognized in the [ICCPR], without distinction of any kind, such as race β¦" but which goes on to recognise rights which include those in Art 14, that "[a]ll persons shall be equal before the courts and tribunals", and in Art 26, that "[a]ll persons are equal before the law and are entitled without any discrimination to the equal protection of the law". Although the ICESCR and the ICCPR did not open for signature until December 1966 and did not enter into force until 1976, they had each existed in draft since 1954355. As explained in annotations to the texts of the 1954 drafts, Art 2 of the ICESCR and Art 2 of ICCPR reflected "the prevalence of the view that, whatever the level reached in the realization of rights in a country at any given time, the benefits thereof would be accorded to all equally"356. That was in contrast to Art 26 of the ICCPR, the underlying principle of which was explained in the same annotations as being to establish "freedom from discrimination" as a free-standing right and not merely as a general principle governing the enjoyment of other rights recognised in the ICCPR357. The Convention was preceded in 1963 by a resolution of the General Assembly of the United Nations known as the "United Nations Declaration on the Elimination of All Forms of Racial Discrimination"358 ("the Racial Discrimination Declaration"). The Racial Discrimination Declaration affirmed both "the necessity of speedily eliminating racial discrimination throughout the world, in all its forms and manifestations, and of securing understanding of and respect for the dignity of the human person" and "the necessity of adopting national and international measures to that end" in order to secure the universal 355 Nowak, UN Covenant on Civil and Political Rights: CCPR Commentary, (1993) at xix-xxi. 356 Secretary-General, Annotations on the text of the draft International Covenants on Human Rights, UN GAOR, 10th sess, annexes, Agenda Item 28 (Pt II), UN Doc A/2929 (1 July 1955) at 20 [27]. 358 United Nations Declaration on the Elimination of All Forms of Racial Discrimination, GA Res 1904 (XVIII), UN GAOR, 18th sess, 1261st plen mtg, Agenda Item 43, UN Doc A/RES/18/1904 (20 November 1963). and effective recognition and observance of principles it went on to proclaim359. At the forefront of those principles were that "[d]iscrimination between human beings on the ground of race β¦ is an offence to human dignity"360 and that "[n]o State β¦ shall make any discrimination whatsoever in matters of human rights and fundamental freedoms in the treatment of persons β¦ on the ground of race β¦"361. For the purpose, as explained at the time, of achieving "true equality" for racial groups in positions of inferiority362, the Racial Discrimination Declaration went on to proclaim by Art 2(3) that "[s]pecial concrete measures shall be taken in appropriate circumstances in order to secure adequate development or protection of individuals belonging to certain racial groups with the object of ensuring the full enjoyment by such individuals of human rights and fundamental freedoms" but that those measures "shall in no circumstances have as a consequence the maintenance of unequal or separate rights for different racial groups". It proclaimed by Art 3 that "[p]articular efforts shall be made to prevent discrimination based on race β¦ especially in the fields of civil rights, access to citizenship, education, religion, employment, occupation and housing" and that "[e]veryone shall have equal access to any place or facility intended for use by the general public, without distinction as to race β¦". The preamble to the Convention records the consideration of States Parties, amongst other things, "that the Charter of the United Nations is based on the principles of the dignity and equality inherent in all human beings", that the Universal Declaration "proclaims that all human beings are born free and equal in dignity and rights and that everyone is entitled to all the rights and freedoms set out therein, without distinction of any kind, in particular as to race β¦" and that the Racial Discrimination Declaration "solemnly affirms the necessity of speedily eliminating racial discrimination throughout the world in all its forms and manifestations and of securing understanding of and respect for the dignity of the human person". The preamble concludes by recording the desire of States Parties "to implement the principles embodied in the [Racial Discrimination Declaration] and to secure the earliest adoption of practical measures to that end". Article 1 of the Convention is definitional. It provides in part: In this Convention, the term 'racial discrimination' shall mean any distinction, exclusion, restriction or preference based on race, 359 Paragraphs 1-2. 360 Article 1. 361 Article 2(1). 362 McKean, Equality and Discrimination Under International Law, (1983) at 153. colour, descent, or national or ethnic origin which has the purpose or effect of nullifying or impairing the recognition, enjoyment or exercise, on an equal footing, of human rights and fundamental freedoms in the political, economic, social, cultural or any other field of public life. Special measures taken for the sole purpose of securing adequate advancement of certain racial or ethnic groups or individuals requiring such protection as may be necessary in order to ensure such groups or individuals equal enjoyment or exercise of human rights and fundamental freedoms shall not be deemed racial discrimination, provided, however, that such measures do not, as a consequence, lead to the maintenance of separate rights for different racial groups and that they shall not be continued after the objectives for which they were taken have been achieved." Article 2 of the Convention lays down what Art 5 goes on to refer to as "fundamental obligations". It provides in part: States Parties condemn racial discrimination and undertake to pursue by all appropriate means and without delay a policy of eliminating racial discrimination in all its forms and promoting understanding among all races, and, to this end: Each State Party shall take effective measures to review governmental, national and local policies, and to amend, rescind or nullify any laws and regulations which have the effect of creating or perpetuating racial discrimination wherever it exists; States Parties shall, when the circumstances so warrant, take, in the social, economic, cultural and other fields, special and concrete measures to ensure the adequate development and protection of certain racial groups or individuals belonging to them, for the purpose of guaranteeing them the full and equal enjoyment of human rights and fundamental freedoms. These measures shall in no case entail as a consequence the maintenance of unequal or separate rights for different racial groups after the objectives for which they were taken have been achieved." Article 5 provides: "In compliance with the fundamental obligations laid down in article 2 of this Convention, States Parties undertake to prohibit and to eliminate racial discrimination in all its forms and to guarantee the right of everyone, without distinction as to race, colour, or national or ethnic origin, to equality before the law, notably in the enjoyment of the following rights: The right to equal treatment before the tribunals and all other organs administering justice; The right to security of person and protection by the State against violence or bodily harm, whether inflicted by government officials or by any individual, group or institution; Political rights, in particular the rights to participate in electionsβ to vote and to stand for electionβon the basis of universal and equal suffrage, to take part in the Government as well as in the conduct of public affairs at any level and to have equal access to public service; (d) Other civil rights, in particular: The right to freedom of movement and residence within the border of the State; The right to leave any country, including one's own, and to return to one's country; (iii) The right to nationality; (iv) The right to marriage and choice of spouse; The right to own property alone as well as in association with others; (vi) The right to inherit; (vii) The right to freedom of thought, conscience and religion; (viii) The right to freedom of opinion and expression; (ix) The right to freedom of peaceful assembly and association; Economic, social and cultural rights, in particular: The rights to work, to free choice of employment, to just and favourable conditions of work, to protection against unemployment, to equal pay for equal work, to just and favourable remuneration; The right to form and join trade unions; (iii) The right to housing; (iv) The right to public health, medical care, social security and social services; The right to education and training; (vi) The right to equal participation in cultural activities; The right of access to any place or service intended for use by the general public such as transport, hotels, restaurants, cafes, theatres and parks." Article 5 has been explained to require adherence by States Parties to a single principle expressed in different ways: the requirement for a State Party "to guarantee the right of everyone, without distinction as to race β¦ to equality before the law, notably in the enjoyment of the [listed] rights" is no more than an expression in different words of the requirement for a State Party "to eliminate racial discrimination" as defined in Art 1 "in all its forms"363. Consistent with that explanation, it appears always to have been accepted that the rights listed in Art 5 are non-exhaustive examples of "human rights and fundamental freedoms" within the meaning and scope of Art 1(1)364. The rights listed in Art 5 differ in some respects from those set out in the Universal Declaration and in the ICCPR and the ICESCR. Of those argued to be relevant in this case, only that referred to in Art 5(d)(v) ("to own property alone as well as in association with others") is identical to a right listed in the Universal 363 Ramcharan, "Equality and Nondiscrimination", in Henkin (ed), The International Bill of Rights: The Covenant on Civil and Political Rights, (1981) 246 at 252; McKean, Equality and Discrimination Under International Law, (1983) at 162. 364 Schwelb, "The International Convention on the Elimination of All Forms of Racial Discrimination", (1966) 15 International and Comparative Law Quarterly 996 at Declaration365, although not reflected in either the ICCPR or the ICESCR. The right referred to in Art 5(a) ("to equal treatment before the tribunals and all other organs administering justice") is narrower in expression than the right to equality before the law and to equal protection of the law referred to in Art 7 of the Universal Declaration and in Art 26 of the ICCPR and is closer in expression to the right to equality before courts and tribunals referred to in Art 14 of the ICCPR. The right referred to in Art 5(f) ("access to any place or service intended for use by the general public") does not appear at all amongst the rights listed in the Universal Declaration, the ICCPR or the ICESCR and rather reflects the particular concern expressed in Art 3(2) of the Racial Discrimination Declaration that everyone should have equal access to any place or facility intended for use by the general public, without distinction as to race. Article 8 of the Convention provides for the establishment of a Committee on the Elimination of Racial Discrimination ("the Racial Discrimination Committee"), consisting of experts elected to serve in a personal capacity. Article 9 confers functions on the Committee which include making "suggestions and general recommendations", based on the examination of the reports and information received from the States Parties, which are to be reported to the General Assembly of the United Nations. The Racial Discrimination Committee "general recommendations" which are not binding on States Parties but which provide guidance to States Parties on the interpretation of the Convention366. General recommendations of the Committee over the last two decades have elaborated a coherent understanding of the meaning and interrelationship of Arts 1(1), 1(4), 2(2) and 5 of the Convention. They have contributed to, and are indicative of, a "normative development"367. No party or intervener suggested the understanding they reveal not generally to be accepted amongst States Parties. has made The Racial Discrimination Committee addressed the definition of "discrimination" in Art 1(1) of the Convention in 1993 in its General Recommendation 14368. The Committee noted that "[n]on-discrimination, 365 Article 17(1). 366 Boyle and Baldaccini, "A Critical Evaluation of International Human Rights Approaches to Racism", in Fredman (ed), Discrimination and Human Rights: The Case of Racism, (2001) 135 at 171-172. 367 Young, Constituting Economic and Social Rights, (2012) at 53. 368 Committee the Elimination "General Recommendation XIV (42) on article 1, paragraph 1, of the Convention", recorded in the Report of the Committee on the Elimination of Racial Discrimination, UN GAOR, 48th sess, Supp No 18, UN Doc A/48/18 (1993) 115. of Racial Discrimination, together with equality before the law and equal protection of the law without any discrimination, constitutes a basic principle in the protection of human rights". The Committee stated that "[a] distinction is contrary to the Convention if it has either the purpose or the effect of impairing particular rights and freedoms"369. The Committee went on to state that "a differentiation of treatment will not constitute discrimination if the criteria for such differentiation, judged against the objectives and purposes of the Convention, are legitimate or fall within the scope of [Art 1(4)] of the Convention". The Committee added that "[i]n seeking to determine whether an action has an effect contrary to the Convention, it will look to see whether that action has an unjustifiable disparate impact upon a group distinguished by race β¦"370. The Committee continued in the same vein in General Recommendation 30 in 2004 where, in the context of addressing the topic of "differential treatment based on citizenship or immigration status", it stated that differential treatment "will constitute discrimination if the criteria for such differentiation, judged in the light of the objectives and purposes of the Convention, are not applied pursuant to a legitimate aim, and are not proportional to the achievement of this aim"371. The Racial Discrimination Committee's suggestion that "discrimination" within the meaning of Art 1(1) of the Convention encompasses action that has "an unjustifiable disparate impact" on a racial group reflects the reference in Art 1(1) of the Convention to distinctions which have the "effect" of impairing the recognition, enjoyment or exercise of human rights or fundamental freedoms "on an equal footing". That suggestion, as well as the Committee's further suggestion that justification for different treatment requires demonstration of the proportional pursuit of a in keeping with accepted understandings of the undefined references to "discrimination" in Art 3 of the ICESCR and Art 2 of the ICCPR and to "equality before the law" in Art 26 of the ICCPR. legitimate aim, The Racial Discrimination Committee addressed the operation of Art 5 of the Convention in 1996 in its General Recommendation 20372. The Committee 369 Paragraph 1. 370 Paragraph 2. 371 Paragraph 4 of the Committee on the Elimination of Racial Discrimination, "General recommendation XXX on discrimination against non-citizens", recorded in the Report of the Committee on the Elimination of Racial Discrimination, UN GAOR, 59th sess, Supp No 18, UN Doc A/59/18 (2004) 93. 372 Committee the Elimination "General Recommendation XX (48)", recorded in the Report of the Committee on the Elimination of Racial Discrimination, UN GAOR, 51st sess, Supp No 18, UN Doc of Racial Discrimination, there noted that Art 5, "apart from requiring a guarantee that the exercise of human rights shall be free from racial discrimination, does not of itself create civil, political, economic, social or cultural rights, but assumes the existence and recognition of these rights" and that the Convention "obliges States to prohibit and eliminate racial discrimination in the enjoyment of such human rights"373. The Committee added that "[w]henever a State imposes a restriction upon one of the rights listed in [Art 5] which applies ostensibly to all within its jurisdiction, it must ensure that neither in purpose nor effect is the restriction incompatible with [Art 1] as an integral part of international human rights standards"374. Much more recently, in its General Recommendation 32 in 2009, the Racial Discrimination Committee addressed the nature of "special measures" in Art 1(4) and "special and concrete measures" in Art 2(2) and their relationship with the definition of "racial discrimination" in Art 1(1)375. The Committee commenced by noting that the Convention "is based on the principles of the dignity and equality of all human beings", that "[t]he principle of equality underpinned by the Convention combines formal equality before the law with equal protection of the law" and that "substantive or de facto equality in the enjoyment and exercise of human rights [is] the aim to be achieved by the faithful implementation of its principles"376. The Committee reiterated that intentional discrimination under discrimination" as well as "discrimination in effect"377 and further reiterated that the "core notion", as articulated in General Recommendations 14 and 30, lay in differential treatment where the criteria for differentiation, judged in the light of the objectives and purposes of the Convention, are not applied in pursuit of a legitimate aim, and are not proportional to the achievement of that aim378. The Committee went on to explain the expression "special and concrete measures" in Art 2(2) as "synonymous" with "special measures" in Art 1(4)379 and to explain the Convention "includes purposive or 373 Paragraph 1. 374 Paragraph 2. 375 Committee the Elimination "General Recommendation No 32 (2009): The meaning and scope of special measures in the International Convention on the Elimination of Racial Discrimination", recorded in the Report of the Committee on the Elimination of Racial Discrimination, UN GAOR, 64th sess, Supp No 18, UN Doc A/64/18 (2009) 152. of Racial Discrimination, 376 Paragraph 6. 377 Paragraph 7. 378 Paragraph 8. 379 Paragraph 32. Arts 1(4) and 2(2) as having an "essential unity of concept and purpose", Art 1(4) being essentially a clarification of the meaning of discrimination when applied to special measures and Art 2(2) carrying forward the same special measures concept into the realm of obligations of States Parties380. The Committee emphasised in particular that "special measures are not an exception to the principle of non-discrimination but are integral to its meaning and essential to the Convention project of eliminating racial discrimination and advancing human dignity and effective equality"381 and are not to be confused with specific and permanent rights pertaining to categories of person (an example of which is the rights of indigenous peoples to lands traditionally occupied by them)382. the reference to "sole purpose" "limits In relation to the content of the expressions used to define special measures in Art 1(4), the Racial Discrimination Committee relevantly stated: the scope of acceptable that motivations"383; that "adequate advancement" "implies goal-directed programmes which have the objective of alleviating and remedying disparities in the enjoyment of human rights and fundamental freedoms affecting particular groups and individuals"384; that "protection" "indicates that special measures may have preventive (of human rights violations) as well as corrective functions"385; and that the limitation that "they shall not be continued after the objectives for which they have been taken have been achieved" "is essentially functional and goal- related: the measures should cease to be applied when the objectives for which they were employed β the equality goals β have been sustainably achieved"386. In relation to the conditions for the adoption and implementation of special measures, the Racial Discrimination Committee relevantly stated that special measures "should be appropriate to the situation to be remedied, be legitimate, necessary in a democratic society, respect the principles of fairness and proportionality, and be temporary" and "should be designed and implemented on the basis of need, grounded in a realistic appraisal of the current 380 Paragraph 29. 381 Paragraph 20. 382 Paragraph 15. 383 Paragraph 21. 384 Paragraph 22. 385 Paragraph 23. 386 Paragraph 27. situation of the individuals and communities concerned"387. The Committee added that States Parties "should ensure that special measures are designed and implemented on the basis of prior consultation with affected communities and the active participation of such communities"388. That statement as to consultation and participation with affected communities does not go quite as far as the more general and aspirational statement in a General Recommendation in 1997389 by which the Committee called upon States Parties to "ensure that members of indigenous peoples have equal rights in respect of effective participation in public life and that no decisions directly relating to their rights and interests are taken without their informed consent"390. The RDA and its prior interpretation Sections 8 and 10 are within Pt II of the RDA. Section 8(1) of the RDA provides: "This Part does not apply to, or in relation to the application of, special measures to which paragraph 4 of Article 1 of the Convention applies except measures in relation to which subsection 10(1) applies by virtue of subsection 10(3)." Section 10(3) of the RDA is not relevant. The remainder of s 10 provides: If, by reason of, or of a provision of, a law of the Commonwealth or of a State or Territory, persons of a particular race, colour or national or ethnic origin do not enjoy a right that is enjoyed by persons of another race, colour or national or ethnic origin, or enjoy a right to a more limited extent than persons of another race, colour or national or ethnic origin, then, notwithstanding anything in that law, persons of the first-mentioned race, colour or national or ethnic origin shall, by force of this section, enjoy that right to the same extent as persons of that other race, colour or national or ethnic origin. 387 Paragraph 16. 388 Paragraph 18. 389 Committee the Elimination "General Recommendation on the rights of indigenous peoples", recorded in the Report of the Committee on the Elimination of Racial Discrimination, UN GAOR, 52nd sess, Supp No 18, UN Doc A/52/18 (1997) 122. of Racial Discrimination, 390 Paragraph 4(d). (2) A reference in subsection (1) to a right includes a reference to a right of a kind referred to in Article 5 of the Convention." Section 10 of the RDA, alone or with s 8 of the RDA, has been the subject of close consideration by the High Court in a series of cases beginning with Gerhardy v Brown ("Gerhardy")391 and including Mabo v Queensland ("Mabo [No 1]")392, Western Australia v The Commonwealth (Native Title Act Case)393 and Western Australia v Ward ("Ward")394. It is appropriate to review those cases with a view to identifying the propositions for which they are collectively authority. It was uncontroversial in each of those cases, as it is uncontroversial in this case, that s 10 of the RDA gives effect to Australia's obligations under Arts 2(1)(c) and 5 of the Convention. It was, and is, equally uncontroversial that s 8 of the RDA gives effect to the limitation on the scope of "racial discrimination" that is expressed in Art 1(4) of the Convention and that also underlies the obligation in Art 2(2) of the Convention. It was also uncontroversial in each of those cases, as it is uncontroversial in this case, that the reference to "rights" in s 10 of the RDA has the same meaning as "human rights and fundamental freedoms" in Art 1(1) of the Convention, of which the rights listed in Art 5 of the Convention are particular examples. They are conveniently referred to as "human rights". Human rights are distinct in concept from specific legal rights protected or enforced under domestic law. They are "moral entitlement[s]"395. At issue in Gerhardy was the consistency with s 10 of the RDA of a provision of a South Australian law which imposed a criminal prohibition on non-Pitjantjatjara persons entering Pitjantjatjara land without prior permission granted on application in writing396. The unanimous holding was that the provision was a special measure within Art 1(4) of the Convention in respect of which the application of s 10 was excluded by s 8 of the RDA. That was so 391 (1985) 159 CLR 70; [1985] HCA 11. 392 (1988) 166 CLR 186; [1988] HCA 69. 393 (1995) 183 CLR 373; [1995] HCA 47. 394 (2002) 213 CLR 1; [2002] HCA 28. 395 Mabo [No 1] (1988) 166 CLR 186 at 229. See also Gerhardy (1985) 159 CLR 70 396 Section 19 of the Pitjantjatjara Land Rights Act 1981 (SA). notwithstanding that the provision resulted in the unequal enjoyment, as between Pitjantjatjara and non-Pitjantjatjara persons, of the human right "to freedom of movement" referred to in Art 5(d)(i) of the Convention. The Court was unanimous in holding that it was not essential to the characterisation of a law as a special measure within Art 1(4) of the Convention that the law be temporally limited on its face: it was sufficient that the law meet the indicia of a special measure at the time its character is called into question397. As to the criteria by reference to which the existence of a special measure within Art 1(4) of the Convention was to be determined, Brennan J said398: "A special measure (1) confers a benefit on some or all members of a class, (2) the membership of which is based on race, colour, descent, or national or ethnic origin, (3) for the sole purpose of securing adequate advancement of the beneficiaries in order that they may enjoy and exercise equally with others human rights and fundamental freedoms, (4) in circumstances where the protection given to the beneficiaries by the special measure is necessary in order that they may enjoy and exercise equally with others human rights and fundamental freedoms." In the context of discussing the third of those criteria, his Honour said399: "'Advancement' is not necessarily what the person who takes the measure regards as a benefit for the beneficiaries. The purpose of securing advancement for a racial group is not established by showing that the branch of government or the person who takes the measure does so for the purpose of conferring what it or he regards as a benefit for the group if the group does not seek or wish to have the benefit. The wishes of the beneficiaries for the measure are of great importance (perhaps essential) in determining whether a measure is taken for the purpose of securing their advancement. The dignity of the beneficiaries is impaired and they are not advanced by having an unwanted material benefit foisted on them." His Honour nevertheless went on to emphasise that both the third and the fourth criteria involved questions of fact and degree the determination of which was in the first instance for a political branch of government in performance of the obligation imposed by Art 2(2) of the Convention400. To conclude that a measure 397 Gerhardy (1985) 159 CLR 70 at 88-89, 106, 108, 113, 140, 154, 161. 398 (1985) 159 CLR 70 at 133. 399 (1985) 159 CLR 70 at 135. 400 (1985) 159 CLR 70 at 137-138. in fact taken by a political branch of government was a special measure within Art 1(4) of the Convention and s 8 of the RDA, it was enough that a court determine that the political assessment inherent in the measure could reasonably be made401, ascertaining the facts relevant to the making of that judicial determination "as best it can"402. Gibbs CJ403 and Mason J404 adopted a similar approach, as did Deane J, who said that a finding that a provision embodying a measure was "taken" for a "sole purpose" of a kind referred to in Art 1(4) "will not be precluded unless it appears that the provision is not capable of being reasonably considered to be appropriate and adapted to achieving that purpose"405. As to the legal operation of s 10 of the RDA where the condition for its application is fulfilled, Mason J pointed out that s 10 implements Arts 2(1)(c) and 5 of the Convention by operating "to confer on the persons discriminated against the enjoyment of a relevant right to the same extent as it is enjoyed by persons of another race" and went on to distinguish the effect of s 10 under s 109 of the Constitution on two categories of State law406. Expressed at the level of generality with which his Honour's analysis came later to be endorsed and applied in the Native Title Act Case407 and in Ward408, those categories can be stated as follows. In the case of a State law which results in the unequal enjoyment of a human right by failing to confer a legal right on persons of a particular race, s 10 operates to give that legal right to persons of that race in a manner that is complementary to the State law. In the case of a State law which results in the unequal enjoyment of a human right by positively impeding the enjoyment of that right by persons of a particular race (for example, by imposing a legal prohibition or by extinguishing a legal right), s 10 operates to remove that impediment. In the first case, the State law is consistent with the operation of 401 (1985) 159 CLR 70 at 138-139. 402 (1985) 159 CLR 70 at 142, quoting Commonwealth Freighters Pty Ltd v Sneddon (1959) 102 CLR 280 at 292; [1959] HCA 11. 403 (1985) 159 CLR 70 at 87-88. 404 (1985) 159 CLR 70 at 104-105. 405 (1985) 159 CLR 70 at 153. 406 (1985) 159 CLR 70 at 98-99. 407 (1995) 183 CLR 373 at 438. 408 (2002) 213 CLR 1 at 99-101 [106]-[109]. s 10 and is valid. In the second case, the State law is inconsistent with the operation of s 10 and is to that extent invalid under s 109 of the Constitution. Members of the Court in Gerhardy variously expressed views to the effect that s 10 of the RDA would have been engaged either by the prohibition on non- Pitjantjatjara persons entering Pitjantjatjara land or by the conferral of title to Pitjantjatjara land on Pitjantjatjara persons had the application of s 10 not been excluded by s 8409. It was suggested in that context that special measures in Art 1(4) constitute an exception to discrimination as defined in Art 1(1) of the Convention410 and that s 8 correspondingly operates to exclude a category of discriminatory laws to which s 10 of the RDA would otherwise apply. Those views were not necessary to the outcome in Gerhardy and ought not to be treated now as having the weight of authority. Academic criticism soon showed them to be out of step with the developing international understanding of the Convention411. The force of that criticism was subsequently acknowledged in the Native Title Act Case where it was said that the Native Title Act 1993 (Cth) "can be regarded either as a special measure under s 8 β¦ or as a law which, though it makes racial distinctions, is not racially discriminatory so as to offend the [RDA] or the [Convention]"412. its substantive practical operation uniquely At issue in Mabo [No 1] was the consistency with s 10 of the RDA of a Queensland law which, in providing retrospectively that the Murray Islands were vested in the Crown in right of Queensland freed from all other rights, purported to extinguish without compensation the native title of the Miriam people413. In a similar vein, amongst the issues in the Native Title Act Case was the consistency with s 10 of the RDA of a Western Australian law, which purported without compensation prospectively to extinguish native title and to replace it with statutory rights inferior to those of the holders of interests arising from Crown grants414. Each of those State laws was held to be inconsistent with s 10 of the RDA so as to be 409 (1985) 159 CLR 70 at 87, 103-104, 107, 132. 410 See also Koowarta v Bjelke-Petersen (1982) 153 CLR 168 at 262; [1982] HCA 27. 411 Brownlie, "The Rights of Peoples in Modern International Law", in Crawford (ed), The Rights of Peoples, (1988) 1 at 9-10; Sadurski, "Gerhardy v Brown v The Concept of Discrimination: Reflections on the Landmark Case That Wasn't", (1986) 11 Sydney Law Review 5. 412 (1995) 183 CLR 373 at 483-484. 413 (1988) 166 CLR 186 at 212. 414 (1995) 183 CLR 373 at 434-435. invalid under s 109 of the Constitution. In so holding, the Court in the Native Title Act Case unanimously endorsed the explanation of the meaning and application of s 10 given by Deane J in Mabo [No 1] 415: "As its opening words ('If, by reason of β¦') make clear, it is concerned with the operation and effect of laws. In the context of the nature of the rights which it protects and of the provisions of the β¦ Convention which it exists to implement, the section is to be construed as concerned not merely with matters of form but with matters of substance, that is to say, with the practical operation and effect of an impugned law." (emphasis in original) Having identified the rights protected by s 10 of the RDA to include (by reference to Art 5(d)(v) and Art 5(d)(vi) of the Convention) a "right to own or to inherit property", and having identified "'[p]roperty' in the context of [those] human rights" to include land and chattels as well as interests in land and chattels416, the joint judgment in the Native Title Act Case went on to identify the "security of enjoyment" of interests arising from a Crown grant as "the benchmark by which to determine whether β¦ the Aborigines who hold native title enjoy their human rights in relation to land to a more limited extent than do persons of other races"417. The joint judgment of four members of the Court in Ward built on the reasoning in Mabo [No 1] and the Native Title Act Case in emphasising that s 10 of the RDA is not confined to laws whose purpose can be identified as discriminatory nor to laws that can be said to be aimed at a racial characteristic or to make a distinction based on race and that fulfilment of the condition for the application of s 10 turns rather on the effect of a law on the relative "enjoyment" of a "right" by persons of different races418. It was said419: "That to which [s 10(1)] in terms is directed is the enjoyment of rights by some but not by others or to a more limited extent by others; there is an unequal enjoyment of rights that are or should be conferred irrespective of race, colour or national or ethnic origin. 'Enjoyment' of rights directs 415 (1988) 166 CLR 186 at 230, quoted in Native Title Act Case (1995) 183 CLR 373 416 (1995) 183 CLR 373 at 437. 417 (1995) 183 CLR 373 at 438. 418 (2002) 213 CLR 1 at 103 [115]. 419 (2002) 213 CLR 1 at 99 [105]. attention to much more than what might be thought to be the purpose of the law in question. Given the terms of the Convention β¦ that is not surprising. The Convention's definition of racial discrimination refers to any distinction, exclusion, restriction or preference based (among other things) on race which has the purpose or effect of nullifying or impairing (again among other things) the enjoyment of certain rights. Further, the basic obligations undertaken by States party to the Convention include taking effective measures to nullify laws which have the effect of creating or perpetuating racial discrimination". (emphasis in original) After pointing out that "care is required in identifying and making the comparison between the respective 'rights' involved"420, the joint judgment went on to emphasise that the holdings in Mabo [No 1] and the Native Title Act Case both involved the rejection of the argument that native title can "legitimately be treated differently from β¦ other forms of title"421 for the purposes of s 10. The joint judgment suggested that the rejection of that argument was best seen as being for the reason that to deprive people of a particular race of a particular species of property not enjoyed by persons of another race finds "no basis" in the Convention or the RDA and involves differential treatment by reference to a characteristic implicitly declared by the RDA to be "irrelevant" 422. Despite the emphasis given in Mabo [No 1], the Native Title Act Case and Ward to s 10 of the RDA being directed to the practical operation and effect of laws on the enjoyment of human rights, the laws impugned in those cases each had a legal operation that uniquely extinguished or impaired legal rights (to native title as recognised at common law) essential to the continuing enjoyment by persons of a particular race (Aboriginal persons) of human rights (to own or to inherit property). The law earlier impugned in Gerhardy drew a racial distinction on its face. No previous case in the High Court has addressed whether, and if so how, s 10 of the RDA might apply to an impugned law that operates to impose the same legal burden on persons of all races but that so operates practically to burden the enjoyment of a human right by persons of a particular race to a greater extent than it burdens the enjoyment of a human right by persons of other races. That is to say, no previous case in the High Court has addressed the application of s 10 to what the Racial Discrimination Committee has referred to as "an 420 (2002) 213 CLR 1 at 103 [116]. 421 (2002) 213 CLR 1 at 104 [117]. 422 (2002) 213 CLR 1 at 104-106 [117]-[122]. impact upon a group distinguished by race"423, unjustifiable disparate encompassing what is sometimes referred to as "adverse impact discrimination": where "treatment is on its face neutral but the impact of the treatment on one person when compared with another is less favourable"424. Prior to three cases recently to have come before the Queensland Court of Appeal, of which this case is one, an issue of that kind had been addressed at the level of an intermediate appellate court only obliquely by the Full Court of the Federal Court in Bropho v Western Australia425 ("Bropho"). The Full Court in that case held s 10 of the RDA not to be engaged by an exercise of statutory discretion under a Western Australian statute which had the effect of excluding certain persons from an Aboriginal reserve in order to obviate risks to the safety and welfare of women and children residing on the reserve. The excluded persons were all Aboriginal. The Full Court noted426: "It has long been recognised in human rights jurisprudence that all rights in a democratic society must be balanced against other competing rights and values, and the precise content of the relevant right or freedom must accommodate legitimate laws of, and rights recognised by, the society in which the human right is said to arise." The reasoning of the Full Court was then expressed in the following passage427: "In the present case it is undesirable to explore, to the point of conclusion, what might be the content of the rights or freedoms asserted by the appellant concerning the occupation and management of the reserve land having regard to legitimate laws and rights recognised in Australia. To the extent that the rights in question (which were derived from a mix of statutory instruments) were property rights, such rights were not absolute in nature given the general recognition that a State has a right to enforce such laws as it deems necessary to control the use of property in 423 Paragraph 2 of the Committee on the Elimination of Racial Discrimination, "General Recommendation XIV (42) on article 1, paragraph 1, of the Convention", recorded in the Report of the Committee on the Elimination of Racial Discrimination, UN GAOR, 48th sess, Supp No 18, UN Doc A/48/18 (1993) 115. 424 Waters v Public Transport Corporation (1991) 173 CLR 349 at 392; [1991] HCA 425 (2008) 169 FCR 59. 426 (2008) 169 FCR 59 at 83 [81]. 427 (2008) 169 FCR 59 at 83-84 [83]. accordance with the general interest. It follows that any interference with the enjoyment of the right, provided that such interference is effected in accordance with the legitimate public interest (in this case to protect the safety and welfare of inhabitants [of the reserve]), will not be inconsistent with s 10 of the [RDA]. Indeed, although the authorities on s 10 of the [RDA] recognise that there is no basis for distinguishing between different species of ownership of property, no property right, regardless of its source or genesis, is absolute in nature, and no invalid diminution of property rights occurs where the State acts in order to achieve a legitimate and non-discriminatory public goal." It will be seen that the proposition for which Bropho is appropriately to be treated as authority later divided the Queensland Court of Appeal. A narrow understanding (favoured by McMurdo P) is that a legal limit on a legal right to own property imposed in pursuit of a legitimate public interest will not affect the enjoyment of the human right to own property referred to in Art 5(d)(v) of the Convention so as to engage s 10 of the RDA. A wider understanding (favoured by Keane JA and by Chesterman JA) is that pursuit of any legitimate public interest is a sufficient answer to any claim that a law results in the unequal enjoyment of any human right protected by s 10 of the RDA provided only that the means adopted by the law are not demonstrably unreasonable. For reasons which will appear, I cannot accept either of those understandings. The earlier Queensland cases The Queensland Court of Appeal grappled with whether, and if so how, s 10 of the RDA might apply to a case of adverse impact discrimination in two earlier cases. In both cases, it rejected an argument that s 10 was engaged by provisions of the Liquor Act or of the Liquor Regulation operating to impose a disparate practical burden on the enjoyment of human rights by Aboriginal persons living in community areas. In each case, it was unanimous in finding the provisions to be special measures excluded from the application of s 10 by s 8 of the RDA. In each case, it was divided as to whether the condition for the application of s 10 would otherwise have been fulfilled. Its reasoning in those cases provides the immediate context for its reasoning in this case. The first case, Aurukun Shire Council v Chief Executive Officer, Office of Liquor Gaming and Racing in the Department of Treasury428 ("Aurukun"), involved a challenge to amendments to the Liquor Act by which all local government authorities in Queensland were prohibited from applying for or holding a liquor licence. The State-wide prohibition was designed to give effect to a principal recommendation of the Cape York Justice Study, that local 428 [2012] 1 Qd R 1. ineffective. councils no longer operate canteens in community areas, and was introduced only in 2008 after legislative amendments in 2002 aimed at facilitating The Queensland Court of Appeal divestiture had proved (McMurdo P, Keane JA and Philippides J) unanimously found the prohibition to constitute a special measure directed to securing the advancement of women and children in Aboriginal communities, by protecting them from alcohol-fuelled violence and abuse. In so holding, it unanimously rejected an argument that it is essential to the existence of a special measure that the intended beneficiaries be consulted and have given informed consent429. McMurdo P would otherwise have held that the amendments fulfilled the condition for the application of s 10 by stopping Aboriginal persons in indigenous communities from enjoying the same access as non-indigenous Queenslanders to equal protection of the law or "equal treatment before the law". She identified that right as being recognised in Art 5(a) of the Convention (referring to "equal treatment before the tribunals β¦ administering justice") as well as in Art 26 of the ICCPR430. Bropho, she said, was to be confined to property rights431. Philippides J would also have accepted s 10 to encompass a right to equal protection of the law but considered that the State-wide prohibition did not "in substance or practical effect impose a different liquor licensing regime in indigenous communities" with the consequence that Bropho had no relevance432. Keane JA took a different approach. He said that equal protection of the law in this context is no more than a paraphrase of the purpose of s 10. It does not identify the content of a right protected by s 10433. His primary position was that there was no unequal enjoyment of rights. While he was prepared to accept that the liberties of adult persons to drink alcohol and to buy alcohol from licensed premises were human rights within the protection of s 10434, those rights were unaffected by the amending legislation. The mere opportunity to buy alcohol from a local council was not a human right435. His secondary position, 429 [2012] 1 Qd R 1 at 51 [81], 79-80 [193]-[194], 100 [249]. 430 [2012] 1 Qd R 1 at 40 [44], 48 [70]-[71]. 431 [2012] 1 Qd R 1 at 48 [70]. 432 [2012] 1 Qd R 1 at 102-103 [259]-[263]. 433 [2012] 1 Qd R 1 at 67 [147]. 434 [2012] 1 Qd R 1 at 65 [141]. 435 [2012] 1 Qd R 1 at 68-69 [155]. for which he invoked Bropho, was that the case was at most one of competing human rights because the amendments gave legislative expression to the right "to security of person and protection β¦ against violence or bodily harm" referred to in Art 5(b) of the Convention436. He said that the striking of a legislative balance between competing human rights was incapable of engaging s 10 unless the balance struck was demonstrably unreasonable437. The second case was Morton v Queensland Police Service ("Morton")438. Like this case, Morton was a challenge to the application of the criminal prohibition in s 168B of the Liquor Act to the possession of alcohol by Aboriginal persons on Palm Island brought about by insertion of Sched 1R into the Liquor Regulation by the Amendment Regulation. Finding Sched 1R to be a special measure, the Queensland Court of Appeal (McMurdo P, Holmes and Chesterman JJA) relied on the explanatory note to the Amendment Regulation to demonstrate satisfaction of each of the criteria identified by Brennan J in Gerhardy, including, in relation to the third criterion, the existence of consultation. McMurdo P would otherwise have applied her reasoning in Aurukun to hold s 10 to be engaged, if not excluded by s 8, on the basis that Sched 1R had the practical effect of denying to Aboriginal persons on Palm Island the same access as non-indigenous Queenslanders to equal protection of the law439. Chesterman JA (with whose reasons Holmes JA agreed) accepted Sched 1R to be "discriminatory on the ground of race" in that its "legal and practical effect" was to "restrict the possession of alcohol by the members of a group which are identified, by the fact of their residence [on Palm Island], as Aboriginal"440. With similar effect to Keane JA in Aurukun, he said that the right to equality before the law was outside the protection of s 10441. He said that the right to possess liquor was not a human right442, and that the right of access to a public place referred to in Art 5(f) of the Convention was not "infringed" by a restriction on the amount 436 [2012] 1 Qd R 1 at 70 [160]. 437 [2012] 1 Qd R 1 at 70-73 [162]-[169]. 438 (2010) 271 ALR 112. 439 (2010) 271 ALR 112 at 120-121 [24]. 440 (2010) 271 ALR 112 at 129 [54]. 441 (2010) 271 ALR 112 at 135-137 [84]-[93]. 442 (2010) 271 ALR 112 at 137 [94]. of alcohol able to be taken to that public place443. His position was that the absence of infringement of a human right meant that s 10 was not engaged. For reasons which will appear, I would reject for the purpose of s 10 of the RDA the utility of equality of enjoyment of a right to equal protection of the law. To that extent, I prefer the approach of Keane JA and of Chesterman JA to that of McMurdo P and Philippides J. I would also accept the primary position of Keane JA in Aurukun (that there was no unequal enjoyment of human rights in that case). However, I cannot accept the secondary position of Keane JA in Aurukun (that s 10 cannot be engaged by the striking of a not-unreasonable legislative balance between competing human rights). Nor can I accept the position of Chesterman JA in Morton (that s 10 cannot be engaged without infringement of a human right). This case It was against the immediate background of the fate of the challenge in Morton that Ms Maloney mounted her challenge to Sched 1R to the Liquor Regulation in this case. Her argument to the Queensland Court of Appeal was put on a wider basis than the argument that had been put in Morton. She argued that Sched 1R resulted in her unequal enjoyment, as an Aboriginal person living on Palm Island, relative to non-indigenous persons living elsewhere in Queensland, of the human rights referred to in Art 5(a), Art 5(d)(v) and Art 5(f) of the Convention. She relied on affidavits of 14 senior members of the Palm Island community read in the Townsville District Court to argue for a finding that, contrary to what was said in the explanatory note for the Amendment Regulation, there had been no real consultation and that the prohibition on the possession of alcohol had been forced on the Palm Island community. She argued that, contrary to Aurukun, consent of an affected community is essential to the existence of a special measure. The Queensland Court of Appeal (McMurdo P, Chesterman JA and Daubney J), as in Morton, was unanimous in finding Sched 1R to constitute a special measure. As to the effect of the affidavits, the Court of Appeal in essence adopted the finding of the District Court that it was "open to infer that there was a consultation process that did take into account the views [of] the community the deponents"444. despite Chesterman JA (with whose reasons Daubney J agreed) stated the short point to be drawn from the evidence in this way: there had been consultation; the community was divided as to whether alcohol restrictions should be imposed and the personal experience or expectation of 443 (2010) 271 ALR 112 at 138 [99]. 444 Maloney v Queensland Police Service [2011] QDC 139 at [45]; R v Maloney [2013] 1 Qd R 32 at 49-50 [47]. as to what form any restrictions should take; and there was no prospect of agreement. As to the argument about consent, Chesterman JA said445: "The short answer β¦ is that nothing in Arts 1(4) or 2(2) makes consent necessary to the validity of a special measure although consent, or its lack, may be relevant in determining whether a provision is a special measure. If consent were an essential pre-condition to the validity of a special measure the utility of s 8 of the [RDA] and Art 1(4) would be denied to communities, such as Palm Island, which were divided in opinion about the measures. A small minority could deprive the majority of a valuable protective measure." As in Morton, McMurdo P would otherwise have applied her reasoning in Aurukun to hold s 10 engaged, if not excluded by s 8, on the basis that Sched 1R had the practical effect of denying to Aboriginal persons on Palm Island the same access as non-indigenous Queenslanders to equal protection of the law referred to in Art 5(a) of the Convention446. She would also have held, in respect of the right referred to in Art 5(f), that Ms Maloney was denied "the same access to the service of liquor in licensed premises in her community on Palm Island which is enjoyed by non-Indigenous Queenslanders in their communities", pointing out that "[t]he relevant provisions do not apply to dysfunctional non-Indigenous communities with problems of alcohol-related violence"447. However, she felt compelled by Bropho to hold that the pursuit by Sched 1R of a legitimate public interest was sufficient to exclude the engagement of s 10 in respect of the right to own property listed in Art 5(d)(v)448. Chesterman JA said that Art 5(a) did not refer to a right not to be prosecuted under a discriminatory law and therefore could have no application449. Consistent with the position he had taken in Morton, he would have held s 10 not to be engaged in respect of the human rights referred to in Art 5(d)(v) or Art 5(f) for the reason that the pursuit by Sched 1R of a those rights being "infringed"450. interest prevented either of legitimate public 445 [2013] 1 Qd R 32 at 69 [118]. 446 [2013] 1 Qd R 32 at 36-37 [9]-[15]. 447 [2013] 1 Qd R 32 at 41 [28]. 448 [2013] 1 Qd R 32 at 38-40 [20]-[26]. 449 [2013] 1 Qd R 32 at 60 [90]. 450 [2013] 1 Qd R 32 at 62-63 [99]-[102]. In her appeal to the High Court, Ms Maloney essentially repeats the argument she made to the Court of Appeal as to the engagement of s 10 of the RDA. But the argument she now puts about s 8 is more nuanced. She says that Queensland has the burden of proving that Sched 1R has the character of a special measure. She says that, in the absence of consultation being shown to have led to informed consent, a law criminalising conduct of members of a racial group can be justified as a special measure only where there is evidence that shows a compelling need for the measure in order to advance the enjoyment of rights by members of that group. She says that evidence is lacking. The National Congress alone argues that the informed consent of an affected community is essential to the existence of a special measure. The National Congress goes further to argue that a law criminalising the conduct of members of a group identified as the beneficiaries of the measure is not capable of being characterised as a special measure at all. For its part, Queensland says that the appeal should be dismissed on the basis that the condition for the application of s 10 was not fulfilled, without this Court needing to address whether Sched 1R constituted a special measure. It argues that Ms Maloney's choice of comparator is wrong: the appropriate comparison is between indigenous and non-indigenous persons on Palm Island, all of whom are subject to the prohibition in s 168B of the Liquor Act brought about by Sched 1R to the Liquor Regulation in exactly the same way to exactly the same degree. If it is necessary to reach s 8, says Queensland, the compliance of Sched 1R with Pt 6A of the Liquor Act, unchallenged by Ms Maloney, is enough to show Sched 1R to be a special measure. In the final alternative, argues Queensland, a sufficient factual basis is established by the Cape York Justice Study and the explanatory note for the Amendment Regulation. For reasons which follow, I consider that the final alternative argument of Queensland alone should be accepted: at the time of the offence of which Ms Maloney was convicted, s 10 had no application to Sched 1R only because Sched 1R was then a special measure. Section 10 of the RDA: equality before the law Whether or not the condition for the application of s 10 of the RDA is fulfilled turns on the construction of s 10. The construction of a statutory provision begins and ends with its text β read always in context. The context of s 10 critically includes its legislative purpose. The purpose of the RDA, as has already been noted, is to give effect to the Convention. The more particular purpose of s 10 of the RDA, as has also already been noted, is to give effect to Australia's obligations under Arts 2(1)(c) and 5 of the Convention. The first of those obligations is to "take effective measures β¦ to amend, rescind or nullify any laws β¦ which have the effect of creating or perpetuating racial discrimination wherever it exists". The second is expressed compositely and by reference to the first. It is, in pursuit of the first, "to eliminate racial discrimination in all its forms" and "to guarantee the right of everyone, without distinction as to race β¦ to equality before the law" in the "enjoyment" of human rights including but not limited to those listed in Art 5(a)- (f) of the Convention. Section 10 of the RDA is to be construed to give effect to those obligations under Arts 2(1)(c) and 5 of the Convention to the maximum extent that its terms permit. What is required by those obligations turns on the content attributed to them by the community of nations451. the repeated pronouncements of The Convention is, and always has been, firmly understood to be based on the principles of the dignity and equality of all human beings and to have as its objective the securing of equality in fact in the enjoyment of human rights by persons of all races. The international understanding of its content has nevertheless evolved. Whatever uncertainty may have existed at the time the Racial Gerhardy was decided, Discrimination Committee in its recommendations to the General Assembly of the United Nations can be taken to reflect what is now a clear and consistent international understanding of what is required to eliminate racial discrimination and to guarantee racial equality before the law in the enjoyment of human rights. What is required is the removal of all differential treatment that impacts on the equality of enjoyment of a human right by persons of different races save for differential treatment that can be judged, in light of the Convention principles of dignity and equality and in light of the Convention objective of securing substantive racial equality in the enjoyment of human rights, to result from the application of criteria that are both applied in pursuit of a legitimate aim and proportionate to the achievement of that aim. The Committee's characterisation of special measures not as an exception to the principle of non-discrimination but as "integral to its meaning" and "essential to the β¦ project of eliminating racial discrimination and advancing human dignity and effective equality" underlines an international understanding that the range of differential treatment that is capable of justification is closely circumscribed. The purpose of s 10 would not be achieved were constructional choices now presented by its text not to be made consistently with that contemporary international understanding. Section 10 of the RDA expresses a condition for its application that can be seen to have two textual components. The first is that there exists (or would exist but for s 10) a state of affairs in which persons of one race either do not enjoy a human right that is enjoyed by persons of another race or enjoy a human right "to 451 Queensland v The Commonwealth (1989) 167 CLR 232 at 240; [1989] HCA 36. a more limited extent" than persons of another race. The second is that that state of affairs is (or would be but for s 10) "by reason of" a Commonwealth, State or Territory law. The first textual component is expressed to require no more than that "persons" of one race enjoy a human right "to a more limited extent" than "persons" of another race. The word "persons" connotes groups not individuals. The reference to persons of one or another race does not, however, connote a group that comprises all persons of one or another race. It is not necessary to the application of s 10 of the RDA that all persons of one race enjoy a human right to a more limited extent than all persons of another race. Nor is it necessary that all persons of all other races enjoy the human right to the same extent. The words "to a more limited extent" reflect the point that452 "discrimination and non-discrimination are relational terms, so that whether we speak of disadvantage, equality, or advantage, we are speaking of treatment of one person or group as measured by the treatment, or the standard of treatment, of another person or group". Persons of one race can enjoy a human right "to a more limited extent" than persons of another race without suffering impairment or infringement of that human right. That proposition can be illustrated by an example adapted from one given by the European Court of Human Rights concerning the requirement of Art 14 of the European Convention that "enjoyment" of the rights and freedoms set forth in that Convention be secured "without discrimination"453. A State may well not infringe the human right "to education and training" referred to in Art 5(e)(v) of the Convention by failing to establish a particular kind of educational institution. But if a State establishes an educational institution of a particular kind, the State must ensure that the education the institution provides is available equally to persons of all races. A State law cannot, consistently with s 10 of the RDA, arbitrarily bar the admission of persons of a particular race. The extent of enjoyment of a human right is a question of degree. The mere limitation of a legal right created or recognised by the common law or statute does not necessarily impact on the extent of enjoyment of a human right. Bropho, which concerned an exercise of statutory discretion to limit statutory 452 Fawcett, The Application of the European Convention on Human Rights, 2nd ed (1987) at 299 (footnote omitted). 453 Case Relating to Certain Aspects of the Laws on the Use of Languages in Education in Belgium (Merits) (1968) 1 EHRR 252. rights to enter a particular area of land where that area was not generally open to the public and where those statutory rights were qualified from their inception by the contingency of being so limited, decided no more. Bropho should not be treated as authority for any broader proposition. A difference in the extent of enjoyment of a human right is similarly a question of degree. In the context of s 10 of the RDA, it is a question of degree to be answered in light of the principles and objectives of the Convention. Construed against the background of those principles and objectives, persons of one race will enjoy a human right "to a more limited extent" than persons of another race where a difference in their relative enjoyment of a human right is of such a degree as to be inconsistent with persons of those two races being afforded equal dignity and respect. The relevant indignity or want of respect lies in the difference in the levels of enjoyment of a human right by persons of the two races rather than in the absolute level of enjoyment by persons of the disadvantaged race. The significance of a difference can be affected by contextual factors, which may include racial targeting or presumptions about the characteristics of racial groups just as they may include ignorance or lack of consideration of the characteristics of racial groups. Human rights within the scope of s 10 of the RDA, not being limited to those listed in Art 5 of the Convention, may be accepted to encompass the full gamut of the civil, political, economic and social rights recognised in the Universal Declaration and in the ICESCR and the ICCPR. However, the analysis required to determine whether or not the first component of the condition for the application of s 10 is satisfied is not readily assisted by focussing on the free- standing right to equality before the law or equal protection of the law expressed in Art 7 of the Universal Declaration and Art 26 of the ICCPR. That is because it is in the nature of such a right that a question about its enjoyment requires the undertaking of an analysis that mirrors the very analysis that s 10 requires to be undertaken with respect to the human rights to which it refers. To inquire for the purposes of s 10 into whether there is by reason of a law unequal enjoyment of a human right to equality before the law or equal protection of the law is to become mired in unproductive circularity. The right referred to in Art 5(a) of the Convention ("to equal treatment before the tribunals and all other organs administering justice") is not properly equated to a right to equal protection of the law in Art 7 of the Universal Declaration and Art 26 of the ICCPR. Like Art 14 of the ICCPR, Art 5(a) of the Convention is more narrowly focussed: on the administration and enforcement of laws by courts and tribunals rather than on the content of laws more generally. The second textual component of the condition for the application of s 10 of the RDA is expressed to require that the difference in the relative enjoyment of a human right be "by reason of" a relevant law. The words "by reason of" in s 10 connote a causal nexus. The nature of that causal nexus is to reflect the principles and objectives of the Convention. That is because "notions of 'cause' as involved in a particular statutory regime are to be understood by reference to the statutory subject, scope and purpose"454. One aspect of the causal nexus is captured in the observation of Deane J in Mabo [No 1], endorsed in the Native Title Act Case, that s 10 is to be construed as concerned with the practical operation and effect of the relevant law. That focus on practical operation and effect is inconsistent with the drawing of a distinction between the law itself and the facts in relation to which the law operates. The focus on practical operation is not, however, inconsistent with recognition that causation in fact is itself a question of degree. What is required is a direct relationship between the practical operation of the law and the differential enjoyment of human rights. Differential enjoyment of human rights that is the direct result of the practical operation of a law fulfils the first of the two conditions for the existence of discrimination within the meaning of the Convention: different treatment. the the second of two conditions for Another aspect of the causal nexus connoted by the words "by reason of" accommodates the existence of discrimination within the meaning of the Convention: absence of justification for different treatment. Acknowledgement of that further aspect is consistent with the suggestion in the joint judgment in Ward that, where s 10 has operated to protect native title, the section has applied to redress differential treatment that has occurred by reference to a characteristic implicitly declared by the RDA to be irrelevant. In his famous dissenting judgment in the International Court of Justice in the South West Africa Cases (Second Phase)455, quoted in relevant part by Brennan J in Gerhardy456, Judge Tanaka expressed the concept of equality before the law or absence of discrimination as then understood in international law in terms that "a different treatment is permitted [only] when it can be justified by the criterion of justice", to which he added that "[o]ne may replace justice by the concept of reasonableness generally referred to by the Anglo-American school of law". Usage has moved on. It is now common in international law to express the same concept in terms of a difference in treatment that can be justified by a criterion of proportionality. Proportionality cannot readily be replaced by reasonableness unless reasonableness is acknowledged to permit of gradations and is not limited to mere rationality. The concept of proportionality is now equated for some purposes in Australian law to the narrower and more focussed 454 Allianz Australia Insurance Ltd v GSF Australia Pty Ltd (2005) 221 CLR 568 at 597 [99]; [2005] HCA 26. 455 [1966] ICJ Reports 6 at 306. 456 (1985) 159 CLR 70 at 129. concept of "reasonable necessity"457. Equation of proportionality to reasonable necessity should be acknowledged to be similarly appropriate for the particular purpose of Australia's implementation of the Convention. The Convention principles of dignity and equality and the Convention objective of securing substantive racial equality in the enjoyment of human rights necessarily inform the application of the criterion for determining whether differential treatment of racial groups is justified for the purpose of the implementation of the Convention irrespective of the form in which the criterion is expressed. Those principles and that objective also dictate that any justification for different treatment of racial groups be affirmatively established. It is not enough that different treatment of racial groups could or might be justified. It must be shown to be justified. Accordingly, s 10 of the RDA is properly construed to admit of circumstances in which persons of one race enjoy a human right to a more limited extent than persons of another race as a result of the direct practical operation of a law without that different enjoyment of rights being "by reason of" the law. But those circumstances are closely confined. It is not enough that the law be shown to strike a reasonable balance between human rights. The principles and objective of the Convention demand proportionality. The law must be shown, in light of the Convention principles of dignity and equality and in light of the Convention objective of securing substantive racial equality in the enjoyment of human rights, to adopt criteria that are both (i) applied in pursuit of a legitimate aim and (ii) reasonably necessary to the achievement of that aim. The features of a law that meets the condition for the application of s 10 of the RDA can now be stated with as much precision as fidelity to the purpose of s 10 permits. The condition is satisfied by a law that: gives rise to different treatment of racial groups, in that the law has the direct practical effect that the enjoyment of a human right by persons of one race is more limited than the enjoyment of that human right by persons of another race to a degree that is inconsistent with persons of those two races being afforded equal dignity and respect; and is not justified in so far as it gives rise to that different treatment of racial groups, in that the law is not shown, in light of the Convention principles of dignity and equality and in light of the Convention objective of securing substantive racial equality in the enjoyment of human rights, to 457 Thomas v Mowbray (2007) 233 CLR 307 at 331 [19]; [2007] HCA 33; Betfair Pty Ltd v Western Australia (2008) 234 CLR 418 at 477 [102]; [2008] HCA 11. adopt criteria that are both (i) applied in pursuit of a legitimate aim and (ii) reasonably necessary to the achievement of that aim. Where that condition is satisfied, s 10 operates to bridge the gap in the enjoyment of the human right that occurs (or would occur) as the direct practical effect of the law in question by adjusting the legal rights of persons of the disadvantaged race to the point where those persons enjoy the human right in question "to the same extent" as persons of the other race. The measure of the differential enjoyment of human rights, by reference to which s 10 is triggered, in this way provides the measure of the adjustment of legal rights that s 10 produces. The nature of the factual inquiry to be undertaken by a court in determining the legitimacy of a legislative aim and proportionality of the legislative criteria adopted in pursuit of that aim is best left to be addressed in the context of special measures. The critical point for present purposes is that consistency with the principles and objective of the Convention limits those legislative aims that can be regarded as legitimate and limits those legislative criteria that can be regarded as proportionate. In particular, the range of legitimate aims and the range of proportionate criteria are limited by the integration of the concept of special measures within the broader concept of equality in the enjoyment of human rights. Within the scheme of the Convention, a measure that operates in fact to result in persons of one race enjoying a human right to a more limited extent than persons of another race may be justified as adopting proportionate criteria in pursuit of an aim of redressing some other imbalance in the enjoyment of human rights by persons of a particular race. But such a measure can only be so justified if it meets the requirements of a special measure as expressed in Arts 1(4) and 2(2) of the Convention. If justified as a special measure, it is not discrimination within the meaning of the Convention. If not justified as a special measure, it is discrimination and a denial of equal protection. Within the scheme of Pt II of the RDA, a law that operates directly in fact to result in persons of one race enjoying a human right to a more limited extent than persons of another race, and that meets the requirements of a special measure, is excluded from the application of s 10 by s 8 of the RDA. The application of s 10 to a law that operates directly in fact to result in persons of one race enjoying a human right to a more limited extent than persons of another race, but that does not meet the requirements of a special measure, cannot be avoided by showing that the criteria the law adopts are nevertheless proportionate or reasonably necessary to the pursuit of a legitimate aim where the substance of the aim is redressing some other imbalance in the enjoyment of human rights by persons of a particular race. Otherwise, the carefully tailored regime for permissible special measures would be undermined. Unless it is a special measure excluded by s 8, the law is one to which s 10 applies. Section 8 of the RDA: special measures In providing that Pt II "does not apply to, or in relation to the application of, special measures", s 8 of the RDA might well be argued to express a "justification" or "ground of defeasance or exclusion" which in at least some of its application "assumes the existence of the general or primary grounds" on which a right or liability might arise under another provision of Pt II but which "denies the right or liability in a particular case by reason of additional or special facts"458. The text of s 8, and its context within the scheme of Pt II, might be argued thereby to supply "considerations of substance for placing the burden of proof on the party seeking to rely upon the additional or special matter"459. The broader context of the place of special measures within the scheme of the Convention might be said textual and contextual reinforce considerations. those Were facts relevant to the existence of a special measure of the same nature as ordinary facts in issue between parties, there would be little difficulty in accepting such an argument so as to construe s 8 of the RDA as placing a burden of proof on a party arguing that an impugned law is a special measure. But they are not. A distinction has long been drawn between "ordinary questions of fact", which arise between parties and which are determined in accordance with the ordinary rules of evidence, and "matters of fact upon which β¦ the constitutional validity of some general law may depend", which "cannot and do not form issues between parties to be tried like the former questions" and which fall to be ascertained by a court "as best it can"460. A court finding constitutional facts is not constrained by the rules of evidence. The court "reaches the necessary conclusions of fact largely on the basis of its knowledge of the society of which it is a part", "supplementing β¦ that knowledge [by processes] which [do] not readily lend [themselves] to the normal procedures for the reception of evidence"461. 458 Vines v Djordjevitch (1955) 91 CLR 512 at 519; [1955] HCA 19. 459 (1955) 91 CLR 512 at 519-520. 460 Breen v Sneddon (1961) 106 CLR 406 at 411-412; [1961] HCA 67, quoting Commonwealth Freighters Pty Ltd v Sneddon (1959) 102 CLR 280 at 292. 461 North Eastern Dairy Co Ltd v Dairy Industry Authority of NSW (1975) 134 CLR 559 at 622; [1975] HCA 45. Gerhardy illustrates that "constitutional facts" form part of a larger genus. That larger genus has long been referred to in the United States as "legislative facts"462. It is appropriate to adopt that terminology in Australia. The nature of legislative facts and the nature of the duty of a court to ascertain them tell against any a priori constraint on the sources from which the court may inform itself463. The sources may, but need not, be "official"464. It is desirable, but not inevitable, that they be "public or authoritative"465. They can include "inferences β¦ drawn from the regulations and statutes themselves" and "statements made at the bar"466. Subject to the requirements of procedural fairness inherent in the judicial process, the ultimate criterion governing the use of information from any source is that a court is able to consider the material sufficiently probative of the legislative fact to be found467. Facts relevant to the characterisation of an impugned law as a special measure are legislative facts, as are facts relevant to fulfilment of the condition for the application of s 10. The nature of those legislative facts, and the nature of the duty of a court to ascertain them, tell against a construction of s 8 of the RDA that places a burden of proof on a party arguing that an impugned law is a special measure. That is not to say that a party arguing that an impugned law is a special measure may not assume what is in practical terms a persuasive burden. It just does not bear a legal burden of proof. The same is true of a party arguing for the purpose of s 10 that an impugned law adopts reasonably necessary criteria in pursuit of a legitimate aim. To conclude that a law is a special measure, a court β informing itself as best it can with the assistance of the parties and on material it finds sufficiently convincing β must be satisfied of the existence of the four criteria of a special 462 Davis, "An Approach to Problems of Evidence in the Administrative Process", (1942) 55 Harvard Law Review 364 at 402-403; Davis, "Judicial Notice", (1955) 55 Columbia Law Review 945 at 952-953. 463 Gerhardy (1985) 159 CLR 70 at 142. 464 Thomas v Mowbray (2007) 233 CLR 307 at 482-483 [526]. 465 Gerhardy (1985) 159 CLR 70 at 142. 466 Wilcox Mofflin Ltd v State of NSW (1952) 85 CLR 488 at 507; [1952] HCA 17. 467 Thomas v Mowbray (2007) 233 CLR 307 at 482-483 [526], 512-522 [613]-[639]. measure identified by Brennan J in Gerhardy. It is necessary to revisit aspects of his Honour's explanations of the third and fourth of those criteria. The third criterion identified by Brennan J is about the aim of the law. Shortly stated, it is that the law have the sole purpose of securing adequate advancement of its beneficiaries in order for them to enjoy and exercise human rights equally with others. His Honour's reference to the "wishes" of the beneficiaries being "of great importance (perhaps essential)" was in the context only of discussing the curial determination of the existence of a purpose of that nature. His Honour cannot be taken to have implied that a special measure cannot exist without the informed consent of the beneficiaries or without some measure of consultation with them. Nor can the Racial Discrimination Committee be taken to have adopted such a rigid approach in relation to Art 1(4) of the Convention. Its statement in General Recommendation 32 that States Parties "should ensure that special measures are designed and implemented on the basis of prior consultation with affected communities and the active participation of such communities"468, assuming it to go beyond exhortation, is to be read in context with its subsequent statement that "special measures may have preventive (of human rights violations) as well as corrective functions"469. In light of the Convention principles of dignity and equality and the Convention objective of securing substantive racial equality in the enjoyment of human rights, the inherent complexity of human relations, the infinite variety of human need and the beneficial objective of the obligation in Art 2(2) to take special measures "when the circumstances so warrant" all tell strongly against the taking of special measures being the subject of a priori procedural constraint. That is especially so in relation to those measures that might need to be taken to prevent human rights violations. The same considerations tell strongly against the argument that a special measure can never criminalise conduct of beneficiaries. 468 Paragraph 18 of the Committee on the Elimination of Racial Discrimination, "General Recommendation No 32 (2009): The meaning and scope of special the Elimination of Racial measures Discrimination", recorded in the Report of the Committee on the Elimination of Racial Discrimination, UN GAOR, 64th sess, Supp No 18, UN Doc A/64/18 the International Convention on 469 Paragraph 23 of the Committee on the Elimination of Racial Discrimination, "General Recommendation No 32 (2009): The meaning and scope of special measures the Elimination of Racial Discrimination", recorded in the Report of the Committee on the Elimination of Racial Discrimination, UN GAOR, 64th sess, Supp No 18, UN Doc A/64/18 the International Convention on The fourth criterion identified by Brennan J is about the necessity for the criteria adopted by the law in pursuit of its aim. Shortly stated, it is that the protection the law gives to the beneficiaries be necessary in order that they may enjoy and exercise a human right equally with persons of other races. Consistent with the general concept of absence of discrimination or equality before the law as understood in international law, the Racial Discrimination Committee explains special measures in terms of proportionality. The explanation by members of the Court in Gerhardy in terms of reasonableness reflected the then prevailing usage within what Judge Tanaka in the South West Africa Cases (Second Phase) had referred to as "the Anglo-American school of law". Special measures are now better explained for the purposes of Australian law in terms of reasonable necessity. Different treatment in this case Once it is recognised that satisfaction of the first element of the condition for the application of s 10 of the RDA requires no more than that persons of one race enjoy a human right "to a more limited extent" than persons of another race, many of the conceptual impediments to the condition being fulfilled put in argument by Queensland can be seen to fall away. The simple fact was that, on 31 May 2008, Aboriginal persons living within the community government area of Palm Island were wholly prohibited from possessing alcohol in any public place within the community government area in which they lived unless they had applied in writing for a permit to do so and, having been granted that permit, possessed the alcohol only for a purpose authorised by the permit. Non-indigenous persons living in local government areas elsewhere in Queensland ordinarily had unrestricted freedom to possess alcohol in public places within the local government areas in which they lived. The enjoyment by Aboriginal persons living on Palm Island of the human rights "to own property" (listed in Art 5(d)(v) of the Convention) and "of access to any place β¦ intended for use by the general public" (listed in Art 5(f) of the Convention) was thereby more limited than the enjoyment of those same human rights by non-indigenous persons living in local government areas elsewhere in Queensland. That disparity in the enjoyment of human rights was inconsistent with persons of those two races being afforded equal dignity and respect. It is not necessary to the analysis to consider whether Aboriginal persons living on Palm Island thereby also suffered a diminution in their relative enjoyment of the human right to equal protection of the law and it is unnecessary to the analysis to consider whether Aboriginal persons living on Palm Island were thereby subjected also to a diminution in their relative enjoyment of some other human right. Nor is it necessary to inquire whether the differential enjoyment of the identified human rights by Aboriginal persons living within the community government area of Palm Island was so extreme as to amount to an impairment or infringement of those human rights. The direct cause of that differential enjoyment of human rights by Aboriginal persons living on Palm Island on 31 May 2008 was the existence in force on that date of Sched 1R to the Liquor Regulation. The Schedule was geographically targeted to affect only a single community government area, the population of which was overwhelmingly Aboriginal. Its practical impact on that population was neither accidental nor incidental. The Liquor Regulation was brought into existence in an attempt to prevent harm arising from alcohol-related conditions and behaviours perceived generally to exist within indigenous communities but not perceived generally to exist elsewhere in Queensland. Schedule 1R was inserted and tailored specifically to address conditions and behaviours perceived to exist within the indigenous community on Palm Island. Geography was used as a proxy for race. It is not to the point that the small percentage of non-Aboriginal persons living within the community government area of Palm Island were subjected by Sched 1R to the same restriction and were therefore subjected to the same diminution in their enjoyment of human rights relative to non-indigenous persons living in local government areas elsewhere in Queensland. Racial targeting is not negated by some persons of other races being caught in the net. The real issue is whether the differential treatment of Aboriginal persons living on Palm Island brought about by Sched 1R was, as at 31 May 2008, justified in light of the underlying principles and objectives of the Convention. The resolution of that issue turns wholly on whether Sched 1R was, at the time, a special measure. Justification in this case To ask whether Sched 1R to the Liquor Regulation was, as at 31 May 2008, a special measure within the meaning of Art 1(4) of the Convention is to ask a different question from whether the Amendment Regulation inserting Sched 1R two years earlier was within the powers conferred by Pt 6A of the Liquor Act. The questions have a different temporal focus. Their determination requires reference to different legal criteria. Part 6A was not framed in terms of the Convention. The purpose of Pt 6A, as set out in s 173F, did not correspond exactly with the purpose of a special measure. The requirement of s 173G that the Minister be "satisfied" that declaration of a restricted area was "necessary" to achieve the purpose of Pt 6A when recommending making the Amendment Regulation to insert Sched 1R required the Minister to act reasonably in reaching that satisfaction470. But it did 470 Enfield City Corporation v Development Assessment Commission (2000) 199 CLR 135 at 150 [34]; [2000] HCA 5. not correspond to a requirement that the alcohol limits prescribed by Sched 1R satisfy a test of reasonable necessity as a condition of validity under Pt 6A. Moreover, nothing in Pt 6A made the continuing operation of Sched 1R contingent on the Minister's continuing satisfaction that its declaration of Palm Island as a restricted area was "necessary" to achieve the purpose of Pt 6A. Ms Maloney's failure to challenge the compliance of Sched 1R with Pt 6A of the Liquor Act therefore cannot be decisive. Compliance of Sched 1R with Pt 6A of the Liquor Act at the time it was inserted by the Amendment Regulation would not alone show Sched 1R to have been a special measure as at 31 May That is not to say that the unchallenged compliance of Sched 1R with Pt 6A of the Liquor Act is irrelevant. To ask whether Sched 1R to the Liquor Regulation was, as at 31 May 2008, a special measure within the meaning of Art 1(4) of the Convention is necessarily to engage in an inquiry of legislative fact. In the absence of challenge, a court engaging in such an inquiry is entitled to assume the validity of Sched 1R and to draw inferences from the fact of the making of the Liquor Regulation and of amendments to the Liquor Regulation, including the Amendment Regulation and the Further Amendment Regulation. Those inferences include, but are not limited to, compliance with Pt 6A of the Liquor Act. Beyond inferences of that nature, no party or intervener put to the Queensland Court of Appeal or to this Court that the inquiry of legislative fact in this case might be assisted by reference to material beyond that to be found in the affidavits tendered to the Townsville District Court, in the Cape York Justice Study and in the explanatory notes to the Amendment Regulation and the Further Amendment Regulation. The Cape York Justice Study (as a published report to the Executive Government of Queensland) and the explanatory notes for the Amendment Regulation and the Further Amendment Regulation (as material placed before the Queensland Parliament by a responsible Minister in the exercise of a statutory duty) constitute material of the kind on which a court may feel justified basing a conclusion of legislative fact. The Queensland Court of Appeal was correct to find that material not to be contradicted by anything in the affidavits tendered to the Townsville District Court. The material reveals a pattern of alcohol abuse and associated violence in the indigenous communities targeted by the Liquor Regulation that has existed historically and that existed in 2008 at a level that can readily be characterised as impairing the equal enjoyment of members of those communities of the human right "to security of person and protection β¦ against violence or bodily harm" listed in Art 5(b) of the Convention as well as the human right "to public health" recognised in Art 5(e)(iv) of the Convention. The material reveals a considered judgment by the Queensland Parliament and the Queensland Executive, re- examined by the Queensland Executive in 2008, that the management of alcohol consumption within those communities was critical to the reduction of alcohol abuse and associated violence, and that imposition of restrictions on the possession of alcohol in those communities in consultation with their members was necessary to manage that consumption where other means had failed. In relation to Palm Island, in particular, it reveals a community divided as to the appropriate form of management of alcohol consumption without apparent prospect of agreement. The extent of that division is only reinforced by the affidavits tendered to the Townsville District Court. The material readily supports the conclusion that the sole purpose of Sched 1R was the adequate advancement of the indigenous members of the Palm Island community in order for them to enjoy human rights to security of person and protection against violence or bodily harm and to public health equally with other Queenslanders. Was the protection Sched 1R gave to members of the Palm Island community necessary to ensure their enjoyment and exercise of their human rights to security of person and protection against violence or bodily harm and to public health equally with other Queenslanders? Was the total prohibition on the possession of alcohol without a permit in any public place on Palm Island that Sched 1R operated to impose as at 31 May 2008 proportionate or reasonably necessary to redress that imbalance? Answering that question is not assisted by the brevity of the explanatory notes or by the lack of any real explanation in the explanatory notes of the alternatives considered. It is at this point that, in the absence of challenge to its validity under the Liquor Act and in the absence of material indicative of the contrary, inferences drawn from the making and maintenance of Sched 1R itself assume some significance. The inference to be drawn from the making of the Amendment Regulation to insert Sched 1R is that, barely two years before 31 May 2008, the Minister as the responsible member of the Queensland Executive considered on reasonable grounds that the imposition of alcohol restrictions on Palm Island was necessary to minimise harm caused by alcohol abuse and misuse and associated violence on Palm Island. A further inference is to be drawn from the making of the Further Amendment Regulation, which left Sched 1R substantially unchanged while adjusting other schedules of the Liquor Regulation as a result of what is described in the explanatory note to the Further Amendment Regulation as "a whole-of-government review of alcohol restrictions, programs and services". The inference is that, not long after 31 May 2008, the Minister gave consideration both to the imposition of alcohol restrictions and to the particular level of alcohol restrictions imposed by Sched 1R, and considered on reasonable grounds that those restrictions, at that time, continued to be necessary to minimise harm caused by alcohol abuse and misuse and associated violence on Palm Island. Implicit in the Minister having considered on reasonable grounds that the particular restrictions were necessary to achieve that purpose is that the Minister took less restrictive means of achieving the same purpose into account and rejected them on reasonable grounds as either not practically available or unlikely to be efficacious. The inference therefore to be drawn is that the total prohibition of the possession of alcohol without a permit in any public place on Palm Island that Sched 1R operated to impose as at 31 May 2008 was a measure considered by the responsible member of the Queensland Executive, on reasonable grounds, then to remain necessary for the advancement of the indigenous members of the Palm Island community in order for them to enjoy human rights to security of person and protection against violence or bodily harm and to public health equally with other Queenslanders. That is sufficient in the circumstances of this case to establish reasonable necessity. On the basis of those inferences of legislative fact, it can and should be concluded that Sched 1R was, as at 31 May 2008, a special measure within the meaning of Art 1(4) of the Convention. Conclusion Schedule 1R to the Liquor Regulation operated to produce the result that Ms Maloney committed an offence against s 168B of the Liquor Act on 31 May 2008 by reason only of being the owner of a bottle of bourbon and a partly full bottle of rum contained in a backpack in the boot of a vehicle on a public road in the local government area in which she lived. Schedule 1R was at that date properly characterised as a special measure within the meaning of Art 1(4) of the Convention because its sole purpose was the adequate advancement of the indigenous members of the Palm Island community and because the prohibition it brought into effect remained reasonably necessary in order for them to enjoy human rights to security of person and protection against violence or bodily harm and to public health equally with other Queenslanders. The application of s 10 of the RDA to Sched 1R was for that reason excluded by s 8 of the RDA. For that reason alone, s 10 of the RDA had no application to Sched 1R. The Queensland Court of Appeal was therefore correct to conclude that Sched 1R was valid and that Ms Maloney was validly convicted of the offence against s 168B of the Liquor Act. The appeal must be dismissed. |
HIGH COURT OF AUSTRALIA PLAINTIFFS AND THE COMMONWEALTH OF AUSTRALIA DEFENDANT Austin v The Commonwealth of Australia [2003] HCA 3 5 February 2003 ORDER Answer questions in Stated Case as follows: Question 1 On their true construction, do the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Imposition Act 1997 (Cth) and the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Act 1997 (Cth): (a) make the First Plaintiff liable to pay superannuation contributions surcharge in respect of surchargeable contributions reported for the financial years ending 30 June 1999 and 30 June 2000? (b) make the Second Plaintiff liable to pay superannuation contributions surcharge in respect of surchargeable contributions reported for the financial years ending 30 June 1997, 30 June 1998, 30 June 1999 and 30 June 2000? Answer (a) Yes. (b) No. Question 2 If so, are the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Imposition Act 1997 (Cth) and/or the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Act 1997 (Cth) invalid in their application to the First Plaintiff and/or the Second Plaintiff: (a) on the ground that they so discriminate against the States of the Commonwealth, or so place a particular disability or burden upon the operations and activities of the States, as to be beyond the legislative power of the Commonwealth; (b) on the ground that the first-named Act imposes a liability to pay superannuation contributions surcharge: by reference to criteria which are so incapable of ascertainment or lacking in general application; as a result of administrative decision based upon individual preference which is not sufficiently related to any test laid down by legislation; or (iii) which is so arbitrary and capricious, so that they are not laws with respect to taxation or otherwise are beyond the legislative power of the Commonwealth; (c) on the ground that the first-named Act deals with more than one subject of taxation contrary to section 55 of the Commonwealth Constitution; (d) on the ground that the first-named Act imposes a tax on property belonging to a State contrary to section 114 of the Commonwealth Constitution; or (e) otherwise? Answer (a) Yes. The legislation referred to is invalid in its application to the first plaintiff on the ground that it places a particular disability or burden upon the operations or activities of the State of New South Wales so as to be beyond the legislative power of the Commonwealth. Question 3 Save for those otherwise dealt with by order, who should pay the costs of the Stated Case and of the hearing of the Stated Case before the Full High Court? Answer The defendant should pay the costs of the plaintiffs. Representation: G A A Nettle QC and M K Moshinsky for the plaintiffs (instructed by Allens D M J Bennett QC, Solicitor-General of the Commonwealth of Australia and M Sloss with G A Hill for the defendant (instructed by Australian Government Solicitor) Interveners: R J Meadows QC, Solicitor-General for the State of Western Australia with J C Pritchard intervening on behalf of the Attorney-General for the State of Western Australia (instructed by the Crown Solicitor for the State of Western Australia) B M Selway QC, Solicitor-General for the State of South Australia with R L Goldsmith and B D Allgrove intervening on behalf of the Attorney-General for the State of South Australia (instructed by the Crown Solicitor for the State of South Australia) J W Shaw QC with M J Leeming intervening on behalf of the Attorney-General for the State of New South Wales (instructed by the Crown Solicitor for the State of New South Wales) M A Dreyfus QC with K L Emerton intervening on behalf of the Attorney- General for the State of Victoria (instructed by the Victorian Government Solicitor) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Austin & Anor v Commonwealth Constitutional law - Legislative power of Commonwealth - Implied limitation - Interference with governmental functions of States - Superannuation - Taxation - Statute - Validity - Whether liability of State judicial officers to pay Commonwealth superannuation contributions surcharge valid. - Taxation Constitutional Law imposing superannuation contributions surcharge - Whether criteria for liability so incapable of ascertainment or lacking in general application as to deny legislation quality of law with respect to taxation. - Commonwealth legislation Constitutional Law - Taxation - Section 55 of the Constitution - Whether legislation deals with more than one subject of taxation. Constitutional Law - Legislative power of Commonwealth - Federal law requires State Government Actuary to supply information and perform calculations for the purpose of imposition of federal tax upon State employees and officeholders - Whether obligation amounts to conscription of State officers and institutions - Whether impermissible federal intrusion upon the employment authority of the State - Whether, if impermissible, provisions severable from law imposing federal tax. - Taxation - Superannuation contributions surcharge Superannuation Legislation - Construction - Whether State judge liable to pay - Whether State judge a member of a constitutionally protected fund - Whether State judge has a surchargeable contribution - Whether State judge a defined benefit member - Whether State judge has an accrued benefit. Court and Judges - Statutes - Interpretation - Whether Master of Victorian Supreme Court a judge of that Court. Words and phrases: "discrimination", "discriminate between", "subject of taxation", "surcharge", "surchargeable contributions", "constitutionally protected superannuation fund", "defined benefit member". Commonwealth Constitution, ss 51(ii), 55, 114 Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Imposition Act 1997 (Cth) Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Act 1997 (Cth) Judges' Pensions Act 1953 (NSW) Constitution Act 1975 (Vic) s 75(2) Supreme Court Act 1986 (Vic) GLEESON CJ. The plaintiffs, who are serving State judicial officers, have commenced proceedings to test their liability to pay a Federal tax, described as a superannuation contributions surcharge. The first plaintiff is a judge of the Supreme Court of New South Wales. The second plaintiff is a Master of the Supreme Court of Victoria. The tax is the subject of the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Imposition Act 1997 (Cth) and the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Act 1997 (Cth) ("the Acts"). The plaintiffs are not members of any superannuation fund as that expression is ordinarily understood; and no contributions are made to any such fund for their benefit. By State legislation, they are conditionally entitled to pension and related benefits, which are paid out of Consolidated Revenue. However, the Acts construct a notional scheme by reference to which they are taxed as if such contributions were made. This is part of a wider legislative scheme imposing a tax that was described in argument, by the Commonwealth, as a tax on the value (ie quantum) of the annual increase in the liability of an employer with respect to superannuation benefits payable to an employee. Two questions have been reserved for the consideration of a Full Court. Question (1) asks whether the Acts, on their true construction, make each plaintiff liable to pay the tax for certain years. That question raises a number of issues as to the meaning and effect of the legislation. Question (2), which only arises if question (1) is answered affirmatively in respect of at least one of the plaintiffs, asks whether the Acts are invalid in respect of their application to that plaintiff. A number of possible grounds of alleged invalidity are set out in the question. The facts, the legislation in issue, and the wider legislative scheme of which it is a part, appear from the reasons for judgment of Gaudron, Gummow and Hayne JJ ("the joint judgment"). I agree with the answers to question (1) proposed in the joint judgment, and with the reasons given. I also agree with what is said in the joint judgment concerning the grounds of potential invalidity raised by pars (b), (c), (d) and (e) of question (2). Because of the answer proposed in relation to question (1)(b) it is unnecessary to make further reference to the second plaintiff when discussing the operation of the Acts. Paragraph (a) of question (2) asks whether the Acts are invalid in their application to the first plaintiff: "on the ground that they so discriminate against the States of the Commonwealth, or so place a particular disability or burden upon the operations and activities of the States, as to be beyond the legislative power of the Commonwealth." The question raises an issue of federalism. It concerns the relationship between the constituent political entities of the federal union, and limitations on the legislative power of the Parliament of the Commonwealth that flow from that relationship. The laws in question are laws with respect to taxation, within the meaning of s 51(ii) of the Constitution. It is not suggested that they discriminate between States or parts of States. They do not infringe s 114 by imposing a tax on property belonging to a State. No other express limitation on the legislative power of Parliament is invoked. What is relied upon is an implied limitation on power, the nature of which is reflected in the language of (a), said to result from the federal nature of the Constitution as a matter of necessary implication. In the course of argument, reference was made to various aspects of the legal effect of the tax as it operates in relation to judicial pensions. The primary matters to which the plaintiffs drew attention were the nature of judicial pension entitlements, and the differences between such entitlements and those of members of ordinary superannuation funds; the fact that (subject to a qualification arising from State legislation enacted following, and in consequence of, the Acts) such pensions cannot be commuted in whole or in part; the fact that the pensions are non-contributory and unfunded; the fictional nature of the notional contributions upon which the tax is based; the circumstance that the notional contributions are calculated by reference to actuarial assumptions that may have no relationship to the personal situation of a particular taxpayer; and the principal difference between the operation of the Acts and that of the wider legislative scheme in relation to the superannuation contributions surcharge, which is that the tax presently in question is imposed directly upon "members" of the notional "funds", rather than upon a superannuation provider. Some actuarial calculations were included in the case stated. Bearing in mind that the projected figures are expressed in dollars of the time to which they relate, and are based on assumptions as to inflation, they show that, at the time when the first plaintiff will have served 10 years and attained an age of not less than 60 (in his case, 62), his accumulated superannuation surcharge debt will be $310,885. If he retires, at that time, he will commence to receive a pension which in the first year will amount to $179,957, on which he will be liable to income tax at the marginal rate. If he remains in office until the age of compulsory retirement, 72, his accumulated superannuation surcharge debt will be $550,780, and he will be entitled to a gross annual pension of $267,433. Allowing for income tax on the pension, it will take approximately four years before his net pension receipts equal his surcharge liability; a liability he will have to discharge at the time he commences to receive the pension. And, depending upon when he dies, whether he is survived by a widow, and when she dies, total pension receipts could amount to a smaller sum than the total surcharge liability. These matters are of relevance only to the extent to which they bear upon the ground of invalidity asserted in (a). Whether the tax might operate in a harsh and unreasonable manner in its incidence upon the first plaintiff is beside the point1. Unreasonableness is not a ground of invalidity of a tax. Some reference was made in argument to an explanation given to Parliament by the responsible Minister concerning the reason for the introduction of a superannuation contributions surcharge; a reason that does not appear to have anything to do with judicial pension arrangements. That also is a matter of no legal consequence. The considerations advanced for or against a taxation measure in the course of political debate do not give rise to a justiciable issue. I would assume that the principal object of the superannuation contributions surcharge is the same as the principal object of most taxes: to raise revenue for government. Taxation involves an exercise of power, by which the burden of compulsory contribution to the revenue is distributed, often unequally, amongst taxpayers. The pattern of distribution is determined by the political process. Subject to one overriding qualification, it is for Parliament to decide what form of distribution is expedient. The qualification is that, although Parliament has power to make laws with respect to taxation, its power is not unlimited. It is for this Court to decide whether, in a given case, the limits have been exceeded. That is the context in which it becomes necessary to consider the legal nature and effect of the tax. It is contended that the tax is discriminatory. Since what is involved is a Federal tax upon a member of the Supreme Court of New South Wales, bearing the character of a tax on the value of the annual increase in the liability of the State for pension benefits payable to judges, the contention raises a potential constitutional issue. It will be necessary to examine more closely what the concept of discrimination involves, and to consider the place of discrimination in the wider principle invoked by the first plaintiff. That the Acts treat the first plaintiff, and other State judges, differently from the manner in which other "high-income earners" generally are treated for the purpose of taxing the value of the annual increases in the liability of their superannuation providers, and differently again from the manner in which Federal judges are treated, is not in dispute. There is a question whether the differences involve relevant and impermissible discrimination. Federal judges in respect of whom the surcharge applies have their pensions, when they ultimately become payable, reduced, at the time of each pension payment, by a certain amount. No personal liability is incurred; no accumulated debt is payable by the judge; and there is no possibility that surcharge liability could exceed benefits. As to other high income earners, in their case the tax is imposed on the superannuation provider, no doubt in the 1 Deputy Commissioner of Taxation v Truhold Benefit Pty Ltd (1985) 158 CLR 678 expectation that it will be passed on to the member in the form of reduced benefits. Paradoxically, the explanation for the difference in treatment of taxpayers in the position of the first plaintiff is what is described in the titles of the Acts as a constitutional protection. The Commonwealth, acknowledging the differences in the manner in which State judges, and some other State office holders, are treated, as compared with members of superannuation funds generally, asserts that "(t)he differences in application are dictated by constitutional limitations and by the design of the superannuation schemes". As to the design of superannuation schemes, the New South Wales Parliament, after the enactment of the Acts, altered the design of that State's judicial pension scheme in one significant respect. Before the alteration, and at the time the Acts came into force, the principal characteristics of the scheme were as follows. The primary benefits were periodical pension payments commencing upon retirement and ceasing on death. The payments were fixed by reference to judicial salaries at the time of payment. The schemes were unfunded and non-contributory. Entitlements could not be commuted, either in whole or in part. Qualification for pension entitlement required a minimum of 10 years service, and the attainment of the age of 60. After satisfaction of those requirements, continuation in judicial office brought no increase in benefits. On the contrary, it necessarily resulted in a decrease of the period during which a pension would be payable. The scheme also involved other entitlements, including a right in certain circumstances to a modest lump sum payment, disability benefits, and benefits for a surviving spouse and eligible children. However, the most significant component in the value of a judge's entitlements was the periodical pension payable between retirement and death. The change made in response to the Acts was that judges became entitled, on retirement, to commute their entitlements to the extent necessary to provide them with an amount equal to their superannuation contributions surcharge debt, with, of course, a corresponding reduction in pension payments. As is explained in the joint judgment, under the Acts, the first plaintiff will have the option, while in office, of paying the amount of his annual surcharge, or leaving the debt to accumulate, with compound interest, until his retirement, when benefits first become payable. This will give a judge in the position of the first plaintiff an added reason to leave office upon becoming entitled to a pension rather than to serve out his or her full term. The Commonwealth points out that the design of the judges' pension scheme already provided a reason for leaving office sooner rather than later, if pension benefits were a major factor in such a decision. Judges' pension schemes, State or Federal, are not designed to reward long service, except to the extent that there is a minimum qualifying period. Remaining in office after that period diminishes pension benefits. This was already an aspect of the New South Wales scheme. It is difficult to measure the practical significance of this aspect of the Acts, and it probably varies in individual cases. The feature of the Acts which is of greatest significance to a judge in the position of the first plaintiff is the incurring and accumulation of a liability to pay in discharge of an accrued a substantial capital sum, on retirement, superannuation contributions surcharge debt, at a time when payment of the pension is commencing. The relationship between the debt, and the amount of the pension payments, has been referred to above. The difference between the position of State judges, and that of Federal judges, who face a reduction in the amount of their periodical pension payments, or that of other high income earners, who incur no personal liability, and who may be entitled to lump sum benefits, or who may be able to commute their entitlements in whole or in part, is obvious. To ameliorate that difference, the New South Wales Parliament altered the pension scheme. The first plaintiff submits that this is evidence of the interference with State governmental functions constituted by the Federal tax; the imposition of the tax forced the State to make a significant amendment to its pension arrangements for judges. The Commonwealth submits that the fact that the tax imposed no substantial burden on the State is demonstrated by the State's ability to mitigate the problem by appropriate legislation. The constitutional limitations said to have dictated the differences in application between the surcharge as it applies to State judges, and the surcharge as it applies to others entitled to superannuation benefits, are those found in s 114 of the Constitution. Section 114 prohibits a State from imposing any tax on property of any kind belonging to the Commonwealth, and it also prohibits the Commonwealth from imposing any tax on property of any kind belonging to a State. The latter prohibition is the constitutional protection referred to in the title to the Acts, and is said to have dictated the differential treatment of certain people, including State judges. Although, in the course of argument, there were references to the possibility that there were other means by which the Parliament could have imposed a tax in respect of annual increases in the value of a State's liability to pay pension benefits to judges, without the need to resort to the fiscal regime involved in the Acts, with the implication that the assertion that the regime was dictated by s 114 was at least an exaggeration, there was no explanation of exactly why s 114 had the effect claimed for it. It is not self-evident that, subject to the argument in ground (a), the State of New South Wales could not be taxed as a superannuation provider in the case of unfunded pension schemes. The Commonwealth submitted that the legislation "makes the member him or herself liable to pay the tax, because the superannuation provider of the scheme is 'the State' for the purposes of s 114 of the Constitution". However, s 114 only prohibits a tax on property. The Commonwealth validly imposed pay-roll tax2, 2 Victoria v The Commonwealth (1971) 122 CLR 353. and fringe benefits tax3, on the States. The New South Wales judges' pension scheme is unfunded. The submissions of South Australia, which was one of a number of States intervening in support of the plaintiffs to challenge the validity of the legislation, outlined a history of inter-governmental negotiations in the course of which the implications of the decision in South Australia v The Commonwealth4 were considered. The facts of that case show that the South Australian government conducts a funded superannuation scheme for the payment of superannuation benefits to statutory officers and public sector employees. It was held that a tax on the net capital gain derived on the disposal of an asset of the fund was a tax on property within s 114. It is far from clear what that has to do with the arrangements relating to pensions for New South Wales judges. However, reg 177 of the Income Tax Regulations 1936 lists the Judges' Pension Act 1953 (NSW) among constitutionally protected funds, the income of which is, by s 271A of the Income Tax Assessment Act 1936 (Cth), exempt from tax. It is one thing to say that some apprehension as to the possible effect of s 114 at least partly explains the Acts. It is another thing to say that the differential treatment of the first plaintiff and others was "dictated" by s 114. And, even if that were the case, the circumstance that the Commonwealth is constitutionally prohibited from taxing the State of New South Wales as a superannuation provider, for regarded as discrimination, discrimination. Whether it is properly so regarded is a question which needs to be considered in the light of the wider constitutional principle upon which the first plaintiff's argument depends. first sight, a curious if such differential is properly justification treatment is, at The federal system involves the co-existence of national and state or provincial governments, with an established division of governmental powers; legislative, executive and judicial. As in the United States, the national government was given limited, specified powers. An approach to constitutional interpretation which stressed a reservation of State powers flourished for a time after federation, but was reversed by the Engineers' Case in 19205. Even so, as in the United States, the federal nature of the Commonwealth has been held to limit the capacity of the Federal Parliament to legislate in a manner inconsistent 3 State Chamber of Commerce and Industry v The Commonwealth (The Second Fringe Benefits Tax Case) (1987) 163 CLR 329. (1992) 174 CLR 235. 5 Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (1920) 28 CLR with the constitutional role of the States.6 In both countries, the taxation power has provided a battleground upon which contests as to the nature and extent of that limitation have been fought. Here, as in the United States, a concept of immunity of governments and government instrumentalities from taxation has waxed and waned. In both countries, significance has been attached to a characterisation of a tax as either discriminatory or non-discriminatory. In New York v United States7, Rutledge J said that he took the limitation against discrimination "to mean that state functions may not be singled out for taxation when others performing them are not taxed or for special burdens when they are". In the same case, but with reference to a different power, Frankfurter J said that "discrimination" was "not a code of specifics but a continuous process of application"8. Non-discriminatory taxes were described by Stone CJ as taxes "laid on a like subject matter, without regard to the personality of the taxpayer, whether a State, a corporation or a private individual" 9. That was said in the course of acknowledging that there may be non-discriminatory taxes which, when laid on a State, would impair its constitutional status.10 The Engineers' Case marked a turning point in Australian constitutional interpretation. The decision involved a rejection of some previously understood implications, including what was described in the leading judgment as "the doctrine of mutual non-interference".11 However, when, in 1930, Dixon J expressed his understanding of the rule established by that case, he added an important qualification. He said12: "This rule I understand to be that, unless, and save in so far as, the contrary appears from some other provision of the Constitution or from the nature or the subject matter of the power or from the terms in which it 6 For recent United States examples of the issues generated by such a principle, see New York v United States 505 US 144 (1992); Printz v United States 521 US 898 7 326 US 572 (1946) at 584-585. 8 326 US 572 (1946) at 583. 9 326 US 572 (1946) at 587. 10 326 US 572 (1946) at 587. 11 (1920) 28 CLR 129 at 145. 12 Australian Railways Union v Victorian Railways Commissioners (1930) 44 CLR 319 at 390. See also West v Commissioner of Taxation (NSW) (1937) 56 CLR 657 at 681-682; Essendon Corporation v Criterion Theatres Ltd (1947) 74 CLR 1 at 23. is conferred, every grant of legislative power to the Commonwealth should be interpreted as authorizing the Parliament to make laws affecting the operations of the States and their agencies, at any rate if the State is not acting in the exercise of the Crown's prerogative and if the Parliament confines itself to laws which do not discriminate against the States or their agencies." The qualification was developed and applied in Melbourne Corporation v The Commonwealth13. One of the most striking differences between that case, decided in 1947, and the Engineers' Case, is the approach to United States authority. In the joint judgment of Knox CJ, Isaacs, Rich and Starke JJ in the Engineers' Case there was an emphatic and, it might be thought, extravagant rejection of the possibility of guidance from that source14. Yet in Melbourne Corporation all the judgments paid careful attention to United States authority. Both nations have what Latham CJ described as "a constitution establishing not only a federal Government with specified and limited powers, but also State Governments which, in respect of such powers as they possess under the Constitution, are not subordinate to the federal Parliament or Government"15. Such a constitution necessarily gives rise to a problem as to whether, and to what extent, a federal law, which on its face is a law with respect to a subject of federal legislative power, may burden or affect a State government. In Melbourne Corporation the Court held invalid a law of the Parliament, enacted pursuant to its power to make laws with respect to banking, which prohibited banks, without the consent of the Federal Treasurer, from conducting banking business for a State or a State agency. The reasons of the Justices were expressed in various ways. Latham CJ examined the meaning of the concept of discrimination, and concluded that it meant "singling out another government and specifically legislating about it"16. Presumably the reference to government included a government agency. Laws of that kind may be held to be invalid; as may laws which "unduly interfere" with State functions of government, although he had reservations about the vagueness of the content of such a test17. Dixon J elaborated upon what he had earlier said as to the qualification to the rule established by the Engineers' Case. He said18: 13 (1947) 74 CLR 31. 14 (1920) 28 CLR 129 at 147. 15 (1947) 74 CLR 31 at 50. 16 (1947) 74 CLR 31 at 61. 17 (1947) 74 CLR 31 at 60-62. 18 (1947) 74 CLR 31 at 78-79. "This Court has adopted a rule of construction with reference to the application to the States of the specific powers conferred by the Constitution upon the Parliament of the Commonwealth. It is a prima- facie rule of construction and its operation may be displaced by sufficient indications of a contrary intention whether found in the nature or subject matter of the power, in the manner in which it is expressed, in the context or elsewhere in the Constitution. The prima-facie rule is that a power to legislate with respect to a given subject enables the Parliament to make laws which, upon that subject, affect the operations of the States and their agencies. That, as I have pointed out more than once, is the effect of the Engineers' Case stripped of embellishment and reduced to the form of a legal proposition. It is subject, however, to certain reservations and this also I have repeatedly said. Two reservations, that relating to the prerogative and that relating to the taxation power, do not enter into the determination of this case and nothing need be said about them. It is, however, upon the third that, in my opinion, this case turns. The reservation relates to the use of federal legislative power to make, not a general law which governs all alike who come within the area of its operation whether they are subjects of the Crown or the agents of the Crown in right of a State, but a law which discriminates against States, or a law which places a particular disability or burden upon an operation or activity of a State, and more especially upon the execution of its constitutional powers. In support of such a use of power the Engineers' Case has nothing to say. Legislation of that nature discloses an immediate object of controlling the State in the course which otherwise the Executive Government of the State might adopt, if that Government were left free to exercise its authority. The control may be attempted in connection with a matter falling within the enumerated subjects of federal legislative power. But it does not follow that the connection with the matter brings a law aimed at controlling in some particular the State's exercise of its executive power within the true ambit of the Commonwealth legislative power. Such a law wears two aspects. In one aspect the matter with respect to which it is enacted is the restriction of State action, the prescribing of the course which the Executive Government of the State must take or the limiting of the courses available to it. As the operation of such a law is to place a particular burden or disability upon the State in that aspect it may correctly be described as a law for the restriction of State action in the field chosen. That is a direct operation of the law. In the other aspect, the law is connected with a subject of Commonwealth power. Conceivably that connection may be made so insubstantial, tenuous or distant by the character of the control or restriction the law seeks to impose upon State action that it ought not to be regarded as enacted with respect to the specified matter falling within the Commonwealth power. If so, the law fails simply because it cannot be described as made with respect to the requisite subject matter. But, if in its second aspect the law operates directly upon a matter forming an actual part of a subject enumerated among the federal legislative powers, its validity could hardly be denied on the simple ground of irrelevance to a head of power. Speaking generally, once it appears that a federal law has an actual and immediate operation within a field assigned to the Commonwealth as a subject of legislative power, that is enough. It will be held to fall within the power unless some further reason appears for excluding it. That it discloses another purpose and that the purpose lies outside the area of federal power are considerations which will not in such a case suffice to invalidate the law." Dixon J discussed the special problem of a federal tax falling on State operations and, in particular, a tax which is discriminatory in the sense that a State is singled out for taxation or for a special burden of taxation in respect of acts or things when others are not taxed or not so burdened in respect of the same act or things. After noting that this may not exhaust the range of potential problems involved in the taxation power, he went on:19 "What is important is the firm adherence to the principle that the federal power of taxation will not support a law which places a special burden on the States. They cannot be singled out and taxed as States in respect of some exercise of their functions. Such a tax is aimed at the States and is an attempt to use federal power to burden or, may be, to control State action. The objection to the use of federal power to single out States and place upon them special burdens or disabilities does not spring from the nature of the power of taxation. The character of the power lends point to the objection but it does not give rise to it. The federal system itself is the foundation of the restraint upon the use of the power to control the States." Non-discriminatory federal taxes which applied to the States in their capacity as employers were held valid in Victoria v The Commonwealth20 (pay- roll tax) and State Chamber of Commerce and Industry v The Commonwealth21 (fringe benefits tax). In the first of those cases, Windeyer J added to the lexicography by defining discrimination as "an adverse distinction with regard to something or somebody" 22. The pay-roll tax was not discriminatory, and, to use 19 (1947) 74 CLR 31 at 81. 20 (1971) 122 CLR 353. 21 (1987) 163 CLR 329. 22 (1971) 122 CLR 353 at 404. the words of Menzies J, did not "operate to interfere with a State carrying out its constitutional functions of government"23. That being so, there was no occasion for the Justices to state more precisely what might constitute impermissible interference. A majority of the Court accepted the principles stated by Dixon J in Melbourne Corporation but found it unnecessary further to refine or elaborate them. Gibbs J said that the source of the implication is "what is required to preserve and protect the position of the States as independent members of the federation"24. In the second case, the argument that the fringe benefits tax was invalid was advanced under rubrics corresponding to those that appear in ground (a) in the present case25. First, it was said the legislation singled the States out for special treatment. It required them to pay tax in respect of benefits paid to people such as Ministers, parliamentarians and judges, who were not employees. In that respect the obligation was peculiar to States and had no counterpart in relation to non-government employers. This argument was answered by reference to the nature of the tax. It was not a tax on benefits paid to people who were in a master-servant relationship. It was a tax on benefits paid in addition to salary or wages, whether or not there was a strict relationship of employment. In order words, a decision as to whether the tax was discriminatory involved an examination of the wider scheme of which it was part, and an exercise in characterisation. Secondly, it was said that the legislation interfered with, impaired or curtailed the States or the exercise of their functions of government. This argument was answered by the observation that the imposition of a general income tax on the salaries or wages of State officials or employees is valid, and familiar, and the fringe benefits tax was no different in its effect on the States26. The concept of discrimination was also developed in the judgments of Brennan J and Deane J in Queensland Electricity Commission v The Commonwealth27. In that case a Commonwealth law, enacted pursuant to the conciliation and arbitration power, singled out, for the imposition of special and disadvantageous treatment, an agency of the Queensland government. It was held invalid on the basis of the Melbourne Corporation principle. Brennan J28 said that if a law discriminates against a State in that it imposes some special burden or disability, there may be no real, as distinct from formal, discrimination 23 (1971) 122 CLR 353 at 392. 24 (1971) 122 CLR 353 at 423. 25 (1987) 163 CLR 329 at 355-356. 26 (1987) 163 CLR 329 at 356. 27 (1985) 159 CLR 192. 28 (1985) 159 CLR 192 at 240. if the law is calculated to provide for particular circumstances affecting the State. Some forms of discrimination may be justified by circumstances. Special circumstances may require special treatment and, in such cases, it is for the legislation to decide what special treatment is appropriate. Deane J29 referred to circumstances where a head of power authorises the singling out of a particular object or situation for special legislative treatment and a State or State agency is affected by reason of its particular involvement in an activity or situation. He gave as an example the involvement of a State or State agency in a particular industrial dispute where the power to legislate with respect to conciliation and arbitration for the purposes of that dispute might be seen to authorise special treatment of the State or State agency. Discrimination is an aspect of a wider principle; and what constitutes relevant and impermissible discrimination is determined by that wider principle. In Queensland Electricity Commission30, Mason J, in the course of explaining why the implied limitation on Commonwealth powers applies in relation to State agencies as well as States, said that the foundation for the implication is "the constitutional conception of the Commonwealth and the States as constituent entities of the federal compact having a continuing existence reflected in a central government and separately organized State governments". Federal legislation that would be inconsistent with that conception includes, but is not limited to, legislation aimed at the destruction of the States or State agencies, or of one or more of their governmental attributes or capacity. Dawson J expressed the general proposition that arises by implication from the federal structure of the Constitution as being that "the Commonwealth Parliament cannot impair the capacity of the States ... to function effectually as independent units"31. He regarded discrimination, and the placing of a special burden on the States by a law of general application, as two examples of potential contravention of that limitation on power. A law which singles out a State or State agency may have as its object to restrict, burden or control State activity32. Or a law of general application may so interfere with or impede State activity as to impose an impermissible burden on the exercise of its functions. It is not possible to state exhaustively every form of exercise of Commonwealth legislative power that might be contrary to the general proposition stated above. Just as the concept of discrimination needs to be understood in the light of the general principle, so also does the concept of burden. The adverse financial impact on the States of the pay-roll tax, or the fringe benefits tax, both of which were held valid, far 29 (1985) 159 CLR 192 at 251. 30 (1985) 159 CLR 192 at 218. 31 (1985) 159 CLR 192 at 260. 32 (1985) 159 CLR 192 at 207 per Gibbs CJ. exceeded the financial consequences of the laws held invalid in Melbourne Corporation or Queensland Electricity Commission. It was the disabling effect on State authority that was the essence of the invalidity in those cases. It is the impairment of constitutional status, and interference with capacity to function as a government, rather than the imposition of a financial burden, that is at the heart of the matter, although there may be cases where the imposition of a financial burden has a broader significance. Putting discrimination aside, an illustration of a Commonwealth law of general application which operated to impair the capacity of the States to function as governments, was the federal law, enacted pursuant to the conciliation and arbitration power, empowering the Industrial Relations Commission to make awards in relation to terms and conditions of employment, considered in Re Australian Education Union; Ex parte Victoria33. The law was held invalid in its application to the States and their agencies in relation to certain, although not all, aspects of the terms and conditions of employment of public servants, including redundancy. It was also held that it did not empower the Commission to make awards in relation to the terms and conditions of employment of such persons as Ministers, ministerial assistants and advisers, heads of department, senior office holders, parliamentary officers and judges. Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ said34: "In our view, ... critical to a State's capacity to function as a government is its ability, not only to determine the number and identity of those whom it wishes to engage at the higher levels of government, but also to determine the terms and conditions on which those persons shall be engaged. Hence, Ministers, ministerial assistants and advisers, heads of departments and high level statutory office holders, parliamentary officers and judges would clearly fall within this group. The implied limitation would protect the States from the exercise by the Commission of power to fix minimum wages and working conditions in respect of such persons and possibly others as well. And, in any event, Ministers and judges are not employees of a State." To a substantial extent, these principles were expressed in summary form by Starke J in his statement of the grounds of his decision in Melbourne Corporation35: 33 (1995) 184 CLR 188. 34 (1995) 184 CLR 188 at 233. 35 (1947) 74 CLR 31 at 75. "It is a practical question, whether legislation ... on the part of [the] Commonwealth ... destroys, curtails or interferes with the operations of [a State], depending upon the character and operation of the legislation ... No doubt the nature and extent of the activity affected must be considered and also whether the interference is or is not discriminatory but in the end the question must be whether the legislation ... curtails or interferes in a substantial manner with the exercise of constitutional power by [the State]. The management and control by the States and by local governing authorities of their revenues and funds is a constitutional power of vital importance to them. Their operations depend upon the control of those revenues and funds. And to curtail or interfere with the management of them interferes with their constitutional power." Legislating to deprive States and State agencies of the capacity to bank with any bank other than the Commonwealth Bank might or might not have been to their financial disadvantage. That was not the point. The point was that it substantially impaired their capacity to decide where to place their funds and, in that respect, it impaired their capacity to act as governments. As was pointed out in the opinion of the Supreme Court of the United States in Printz v United States36, in a case where it is claimed that the incidental application to the States of a federal law of general application excessively interferes with the function of state governments, it may be material to measure the burden imposed. But where the argument is that a federal law compromises the structural framework of the federal system, in such a way that the principle of federalism is offended, then the outcome of that argument cannot depend upon a comparative assessment of the governmental interests that are advanced or affected. It is plain, and was accepted in the Australian Education Union Case, that quite apart from the consideration that they are not employees, the conciliation and arbitration power does not extend to enable the Parliament directly or indirectly to dictate to the States the terms and conditions of engagement of judges. An attempt to do so would be an impermissible interference with the capacity of States to function as governments. For the same reason, the Parliament's power to make laws with respect to taxation does not extend to enable it to legislate to single out State judges for the imposition of a special fiscal burden. Judges, like other citizens, are subject to general, non- discriminatory taxation, and the mere fact that the incidence of taxation has a bearing upon the amount and form of remuneration they receive does not mean that federal taxation of State judges is an interference with State governmental functions. It is otherwise when, as here, a federal law with respect to taxation treats State judges differently from the general run of high income earners and federal judges, and to their practical disadvantage. That differential treatment is 36 521 US 898 (1997) at 931-932. constitutionally impermissible, not because of any financial burden it imposes upon the States, but because of its interference with arrangements made by States for the remuneration of their judges. The practical manifestation of that interference is in its capacity to affect recruitment and retention of judges to perform an essential constitutional function of the State. Evidence of that capacity is to be found in the legislative response which the State of New South Wales was, in effect, forced to make. The Parliament could never have compelled the State of New South Wales to alter the design of its judicial pension scheme. Indeed, at the time of the Acts, the State judicial pension scheme was not materially different from the federal judicial pension scheme. But the State scheme was substantially altered as a result of the practical necessity that followed from the subjection of State judges to a discriminatory federal tax. The validity of the Acts is to be determined as at the time of their enactment. They were not rendered valid by subsequent State legislative action. However, the Commonwealth argues that any burden on the State of New South Wales, in consequence of the fiscal imposition on its judges, could be, and was, ameliorated by legislation of the kind that was subsequently enacted by the State. For the reasons already given, it is not a question of any financial burden on the States. Judges are relatively few in number, and the arrangements made for their remuneration are not of major significance in any government budget. The issue is one of interference; of impairment of the constitutional integrity of a State government. Such interference is not denied by pointing out that a State could and did make a substantial alteration to the design of its judicial pension scheme; on the contrary, the need to make such alteration demonstrates the interference. The wider fiscal regime, of which the Acts form part, imposes what the Commonwealth has characterised as a tax on increases in the amount of the liability of superannuation providers to pay superannuation benefits. In its operation in relation to most high income earners, it is imposed on the superannuation providers. The sole justification advanced for its imposition directly on State judges is that s 114 of the Constitution is said to prevent the imposition of such a tax on States in their capacity as providers of superannuation benefits to judges. As noted above, that proposition has not been demonstrated to be correct. However, let it be assumed in favour of the Commonwealth's argument that it is correct. It means that the explanation for creating the fiction of contributions to a notional fund, and imposing directly upon State judges the liability that, in the ordinary incidence of the tax, would be imposed upon the State, is that to impose the tax upon the State would be unconstitutional. The assumed constitutional prohibition upon taxing the States in the same way as other superannuation providers is said to justify taxing State judges differently from other recipients of superannuation benefits. Section 114 is a particular instance, covered by express prohibition, of federal taxation inconsistent with the federal nature of the Constitution. What would otherwise be covered by the implied prohibition recognised in Melbourne Corporation and other cases cannot be justified on the ground that it is an indirect means of achieving that which is prohibited by s 114. Brief reference was made in argument to some relatively recent North American decisions dealing with an argument that certain legislation affecting judges violated constitutional imperatives of judicial independence. Because no argument about judicial independence was raised in this case, those decisions were rightly regarded by the parties as being of only marginal relevance. However, if only to make it clear that they were about a different issue, they should be mentioned. The Queen v Beauregard37 concerned legislation enacted by the Federal Parliament in Canada altering the pension arrangements that applied to federally appointed judges. In Canada, judges of superior Provincial courts, as well as federal judges, are appointed by the federal government, and their remuneration is fixed by the Federal Parliament. There was no limitation on the Federal Parliament's law-making capacity, based on federalism, of the kind invoked in the present case. However, it was argued that it was inconsistent with judicial independence that federal judicial pensions, which had previously been non- contributory, should, in relation to judges appointed after a certain date, be made contributory. That argument was rejected by the Supreme Court of Canada. No similar argument is involved in the present case; rather, the issue here is one of federalism. It is unnecessary to examine the detail of the legal arguments based on the claimed interference with judicial independence. It may be noted, however, that Dickson CJ said38: "The power of Parliament to fix salaries and pensions of superior court judges is not unlimited. If there were any hint that a federal law dealing with these matters was enacted for an improper or colourable purpose, or if there was discriminatory treatment of judges vis-a-vis other citizens, then serious issues relating to judicial independence would arise and the law might well be held to be ultra vires s 100 of the Constitution Act, Issues of judicial independence, and the arrangements for fixing and altering judicial remuneration that might be established consistently with such independence, were again examined by the Supreme Court of Canada in Re Provincial Court Judges39. Once again, that was not a case that raised issues of federalism of the kind with which we are presently concerned; and it is not 37 [1986] 2 SCR 56. 38 [1986] 2 SCR 56 at 77. 39 [1997] 3 SCR 3. argued that the federal legislation under challenge in the present case threatens the independence of State judges. to violate The Supreme Court of the United States, in United States v Hatter40 also considered the application of federal laws to federal judges. The laws were claimed the United States Constitution's prohibition against diminishing the remuneration of federal judges during their term of office. No such issue is involved in the present case. Our Constitution, in s 72, contains a similar prohibition, but it has nothing to do with the effect of federal laws on State judges. In Hatter, some of the laws under challenge were held valid, and some were held invalid. The valid laws imposed non-discriminatory taxes upon judges and other citizens. The invalid laws were discriminatory, singling out federal judges for unfavourable treatment. The Court held that the Constitution did not forbid Congress to enact a law imposing a non-discriminatory tax on judges. The invalid taxes were discriminatory. It is of interest to note the attempted justification advanced for the discrimination, and rejected by the Court. The supposed justification was that the singling out of judges for disadvantageous treatment was "necessary to offset advantages related to constitutionally protected features of the judicial office"41. It was pointed out by Breyer J that, if such a justification were accepted, it would authorise the legislature to "equalize away"42 the very protection given by the Constitution. To the extent that Hatter has similarities to the present case, they appear to me to be to the disadvantage of the Commonwealth's argument. The challenge to the validity of the Acts on the ground stated in par (a) of Question 2 has been made out. I would answer the questions in the case stated as follows: (a) Yes (b) No (a) Yes. The defendant should pay the costs of the plaintiffs. 41 532 US 557 (2001) at 576. 42 532 US 557 (2001) at 576. GAUDRON, GUMMOW AND HAYNE JJ. The case stated The occasion for this litigation is provided by the impact of federal revenue laws upon the "non-contributory" and "unfunded" pension arrangements provided by State laws for the plaintiffs as State judicial officers. Constitutional issues respecting the impact of revenue legislation upon such judicial pension schemes have been considered in recent times by the Supreme Court of Canada43 and the Supreme Court of the United States44. In the present litigation, the Attorneys-General for New South Wales, Victoria, South Australia and Western Australia intervened to support the submissions by the plaintiffs and, in certain respects, to supplement those submissions. Before the Full Court is a case stated under s 18 of the Judiciary Act 1903 (Cth) ("the Judiciary Act") asking certain questions. The first is whether on the true construction of two laws of the Commonwealth the plaintiffs are liable to pay "superannuation contributions surcharge" in respect of "surchargeable contributions" reported for several financial years. The two laws are the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Imposition Act 1997 (Cth) ("the Protected Funds Imposition Act") and the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Act 1997 (Cth) ("the Protected Funds Assessment Act"). These statutes commenced on 7 December 1997. The Protected Funds Assessment Act has been amended several times, in particular by Sched 2 to the Superannuation Contributions and Termination Payments Taxes Legislation Amendment Act 1999 (Cth) ("the 1999 Amendment Act"). The second question assumes an affirmative answer to the first. It asks whether on one or more identified grounds the legislation is invalid in its application to the plaintiffs. One objection to validity, shortly put, is that the Protected Funds Imposition Act imposes a liability upon the plaintiffs by reference to criteria which are so incapable of ascertainment or lacking in general application as to deny to both statutes the description of "laws β¦ with respect to β¦ Taxation", within the meaning of s 51(ii) of the Constitution. In seeking an affirmative answer to that question, the plaintiffs pray in aid passages in the joint 43 R v Beauregard [1986] 2 SCR 56. 44 United States v Hatter 532 US 557 (2001). judgments in MacCormick v Federal Commissioner of Taxation45 and Deputy Commissioner of Taxation v Truhold Benefit Pty Ltd46. A further objection to validity is that the Protected Funds Imposition Act deals with more than one subject of taxation, contrary to s 55 of the Constitution. Here the plaintiffs rely particularly upon Mutual Pools & Staff Pty Ltd v Federal Commissioner of Taxation47. Other objections to validity are formulated in various ways but, in essence, invite attention to fundamental constitutional considerations, invoking that implied limitation upon the legislative powers of the Commonwealth which is associated with Melbourne Corporation v The Commonwealth48 and recently was further expounded in the Native Title Act Case49, Re Australian Education Union; Ex parte Victoria50 and the Industrial Relations Act Case51. In submissions, no direct reliance was placed upon the specific but limited prohibition imposed upon the federal taxation power by s 114 of the Constitution52, but some reference will be necessary to decisions construing It should be emphasised that, contrary to what at times in the argument appeared to be some colour given by the Commonwealth to its submissions, the issues identified above are not to be approached with some broad view which takes as dispositive in this Court the economic results sought to be obtained by 45 (1984) 158 CLR 622 at 640-641. 46 (1985) 158 CLR 678 at 684. 47 (1992) 173 CLR 450 at 469. 48 (1947) 74 CLR 31. 49 Western Australia v The Commonwealth (1995) 183 CLR 373. 50 (1995) 184 CLR 188. 51 Victoria v The Commonwealth (1996) 187 CLR 416 at 497-503. 52 Section 114 states: "A State shall not, without the consent of the Parliament of the Commonwealth, raise or maintain any naval or military force, or impose any tax on property of any kind belonging to the Commonwealth, nor shall the Commonwealth impose any tax on property of any kind belonging to a State." the legislation in question53. It is the character in constitutional law of what was done, as it bears upon the plaintiffs and the States of whose courts they are members, which is in issue. What resort to arguments of economic equivalence does reveal is that the impugned legislation is legally different from other, generally applicable legislation providing for the taxation of other pension and superannuation entitlements. That is, the impugned legislation subjects the plaintiffs, as State judicial officers, to special and legally different taxation arrangements from those generally applicable to persons eligible for, or in receipt of, pensions or superannuation. For the reasons that follow, the first question (about construction) should be answered differently in relation to each plaintiff β "Yes" in the case of the first plaintiff, "No" in the case of the second plaintiff. The second question (about validity) should be answered "Yes". The legislation is invalid. It exceeds that limitation on the legislative powers of the Commonwealth which flows from the very nature of the federal structure established by the Constitution. The judgment is divided as follows: The plaintiffs' pension entitlements Federal superannuation legislation The SASFIT litigation and s 114 The superannuation guarantee legislation The SIS Act The surcharge legislation The protected funds legislation Federal unfunded schemes The liabilities of the plaintiffs The position of the second plaintiff The position of the first plaintiff Construction issues Constitutional implications Melbourne Corporation and discrimination The scope of the doctrine The United States decisions The judgments in Melbourne Corporation Taxation Queensland Electricity The later decisions 53 cf Europa Oil (NZ) Ltd v Inland Revenue Commissioner [1976] 1 WLR 464 at 471-472; [1976] 1 All ER 503 at 508-509; [1976] 1 NZLR 546 at 552-553. Conclusion respecting Melbourne Corporation doctrine Other immunity issues Arbitrary exactions? Section 55 of the Constitution Conclusions The plaintiffs' pension entitlements The first plaintiff was appointed after and the second plaintiff before the commencement of the legislation on 7 December 1997. The first plaintiff is a judge of the Supreme Court of New South Wales and was appointed to that office on 31 August 1998 at the age of 52 years. He must retire from office no later than 15 June 2018 when he attains the age of 72 years. Section 25 of the Supreme Court Act 1970 (NSW) ("the NSW Supreme Court Act") provides that the Supreme Court is composed of the judges thereof. The second plaintiff was appointed to the office of Master of the Supreme Court of Victoria on 20 July 1993 when aged 42 years. She must retire from office no later than when she attains the age of 70 years in 2021. Section 75(2) of the Constitution Act 1975 (Vic) ("the Victorian Constitution") states that the Supreme Court of the State of Victoria consists of the judges and the Masters of that Court. It is accepted by the Commonwealth that the courts of the States are an essential branch of State governments. It should be added that the State courts, as contemplated by s 71 of the Constitution, exercise in substantial measure the judicial power of the Commonwealth. They do so pursuant to the investment of federal jurisdiction by laws such as s 39(2) and s 68(2) of the Judiciary Act, supported by s 77(iii) of the Constitution. The pension provisions in relation to the offices held by the plaintiffs are made respectively by the Judges' Pensions Act 1953 (NSW) ("the NSW Pensions Act") and Pt 7 of the Supreme Court Act 1986 (Vic) ("the Victorian Supreme Court Act"). There are considerable differences in matter of detail, but the statutes share significant characteristics. No provision is made for contributions by the plaintiffs. Pensions are payable to the plaintiffs54 upon satisfaction of statutory criteria and out of the Consolidated Fund of the State of New South 54 See the NSW Pensions Act, s 10; Victorian Supreme Court Act, s 104A(11). Wales, established by the Constitution Act 1902 (NSW)55, and the Consolidated Revenue established by the Victorian Constitution56. in Australia of Consolidated Funds modelled upon In Northern Suburbs General Cemetery Reserve Trust v The Commonwealth57, Dawson J pointed out that one of the purposes served by the establishment the Consolidated Fund first established in the United Kingdom by statute in 1787 is a blending of all public moneys received so that they become available for appropriation by the legislature. Consistently with that system, provision for payment of the pensions in question is not made by the setting aside for investment of specific moneys or assets; in particular, legislation of neither State provides for the establishment of a fund whereby property is set aside for investment, with capitalisation of the yield from investment; nor is provision made for the funding of pensions by or with the assistance of contributions by prospective pensioners or others. The result is that neither legislative scheme answers the general description of a superannuation fund given by Windeyer J Commissioner of Taxation of the Commonwealth (No 2)58. His Honour referred to the setting aside of money or other property for investment with the yield therefrom to be capitalised, and the fund thus created being subjected to appropriate trusts for the provision to participants of monetary benefits upon their reaching a prescribed age. Federal superannuation legislation In order to appreciate the issues respecting construction and validity of the Protected Funds Imposition Act and the Protected Funds Assessment Act, it is necessary first to consider in a little detail the impact upon superannuation arrangements of federal revenue law. In this field, a range of policy considerations are presented. One concerns the deductions, if any, to be allowed to those making contributions to superannuation arrangements; another the tax, if any, to be imposed upon the yields from the investment of those contributions; and a third, the tax treatment of the payments made to those having the benefit of the superannuation provisions. The responses by the Parliament, particularly 55 Part 5 (ss 39-46). 56 Part V, Div 1 (ss 89-93). 57 (1993) 176 CLR 555 at 591. 58 (1966) 40 ALJR 265 at 278. over the past 20 years, have produced a complex and shifting legislative pattern formed by a number of federal statutes of which those immediately in dispute are but two. The general position as it previously obtained has been described by one commentator as follows59: "Prior to 1983, if an employer contributed money to an approved employee superannuation fund, the contribution was tax deductible, the income of the fund was tax free and only 5% of any lump sum paid to an employee on retirement was included in assessable income, to be taxed at the employee's marginal rates. Pensions were treated separately. Because they were regular receipts and displayed some of the common indicia of income on ordinary concepts, they were taxed in full. This merely encouraged most superannuation benefits to be paid out as lump sums. Eventually governmental advisors and commentators sought to value this tax expenditure. Estimates were in the order of billions of dollars per annum in foregone revenue." To that it may be added, as the submissions for South Australia emphasised: "In general terms these arrangements did not apply to public sector superannuation. Such schemes were usually unfunded, defined benefits pension schemes which were taxed as ordinary income upon receipt by the beneficiary." The terms of the New South Wales and Victorian laws providing pensions to judicial officeholders, particularly the absence of contributions and of any segregated fund, have rendered inapplicable certain concessional taxation treatment provided for many years by the Income Tax Assessment Act 1936 (Cth) ("the ITAA"). That concessional treatment includes provision now made by subdivs AA and AB60 of Div 3 of Pt III of the ITAA. Division 3 deals generally with deductions. Subdivision AA is headed "Contribution to Superannuation Funds for Benefit of Employees" and s 82AAC provides allowable deductions for contributions to a fund which is an "eligible superannuation fund". Subdivision AB is headed "Contributions to Superannuation Funds by Eligible Section 82AAT provides an allowable deduction for certain Persons". contributions to a "complying superannuation fund". The terms "eligible superannuation fund" and "complying superannuation fund" have the meaning 59 Waincymer, Australian Income Tax β Principles and Policy, (1991) at 119. 60 Sections 82AAA-82AAR and ss 82AAS-82AAT respectively. is headed "TAXATION OF Part IX given by Pt IX SUPERANNUATION BUSINESS AND RELATED BUSINESS". Part IX was added to the ITAA in 198961. (ss 267-315F). Pursuant to Pt IX, liability for taxes was imposed upon certain income, receipts and net capital gains by superannuation funds. One significant change made by Pt IX was to add to the assessable income of funds the deductible contributions made by employers; this attracted full tax in respect of those contributions earlier in what might be called the investment cycle. The SASFIT litigation and s 114 The South Australian Superannuation Fund Investment Trust ("the SASFIT") was incorporated by s 6 of the Superannuation Act 1988 (SA) which made provision for the payment of superannuation benefits to South Australian statutory officers and public sector employees; the statutory scheme established the South Australian Superannuation Fund into which the contributions of contributors were paid either directly or indirectly. In South Australia v The Commonwealth62, it was accepted that, for the purposes of s 114 of the Constitution, SASFIT was relevantly the State of South Australia and that the assets of the Fund were property "belonging to" the State. The Commissioner of Taxation claimed that the Fund was a superannuation fund to which Pt IX applied and that, as a consequence, SASFIT was liable to pay tax on the taxable income of the Fund. It was held that SASFIT was not exempt from paying income tax on interest derived by the Fund; the exemption was limited to income tax on net capital gains. Section 267, the first provision in Pt IX, contained various definitions for the purposes of that Part. SASFIT had accepted that it was a "complying superannuation fund" within the definition in that provision. In the joint judgment of Mason CJ, Deane, Toohey and Gaudron JJ in South Australia v The Commonwealth, their Honours, after referring to that definition, continued63: 61 By the Taxation Laws Amendment Act (No 2) 1989 (Cth) and amended by the Taxation Laws Amendment (Superannuation) Act 1989 (Cth) which commenced immediately after the former Act; see s 2(1) of the Taxation Laws Amendment (Superannuation) Act. 62 (1992) 174 CLR 235. 63 (1992) 174 CLR 235 at 246. "The trustee of a complying superannuation fund is liable to pay tax on the taxable income of the fund of the year of income (s 278(1)). A complying superannuation fund is an 'eligible superannuation fund' as defined by s 267(1) and is therefore an 'eligible entity' as defined by that sub-section. The taxable income of an eligible entity shall be calculated as if the trustee were a taxpayer and a resident (s 272). A reference in Pt IX to a fund includes a reference to a fund established by (a) a law of a State or (b) a public authority constituted by or under a law of a State (s 270). The provisions of Pt IX were drafted with an eye to the possibility that the provisions of the Part might infringe the prohibition in s 114 of the Constitution by imposing a tax on property of a State. Section 271 deals with that situation. Sub-section (1) provides: 'It is the intention of the Parliament that if, but for this section, this Part would have the effect that a law imposing taxation would impose tax on property of any kind belonging to a State within the meaning of section 114 of the Constitution, this Part shall not have that effect.'" Section 271(2), as the legislation stood at the time of the High Court litigation, read: "For the purposes of this Part, a fund is a constitutionally protected fund in relation to a year of income if subsection (1) applies to the fund in relation to any tax in relation to the year of income." Thereafter64, s 271(2) was omitted, a definition of "constitutionally protected fund" as meaning a fund declared by the regulations to be a constitutionally protected fund was inserted in s 267, and s 271A was added. This provided: "Despite any other provision of this Part, income derived by a constitutionally protected fund is exempt from tax." Section 266 of the ITAA conferred a regulation-making power to prescribe all matters which by the statute were required or permitted to be prescribed. The purpose of the declaration by regulations that a fund was a constitutionally protected fund was to enliven s 271A and the exemption from tax of income derived by those funds. 64 Sections 100-102 of the Taxation Laws Amendment Act (No 2) 1994 (Cth). At the time of the commencement of the Protected Funds Assessment Act and the Protected Funds Imposition Act, reg 177 of the Income Tax Regulations 193665 declared certain funds (principally identified by Sched 14) to be a "constitutionally protected fund" for the definition of that term in s 267 of the ITAA. Schedule 14 listed 31 statutes enacted by the six States. Included in the list were the NSW Pensions Act, the Victorian Constitution and the Victorian Supreme Court Act. The NSW Pensions Act was the only statute of that State listed. The superannuation guarantee legislation In the meantime, there had come into force legislation implementing three significant policies adopted by the Commonwealth. They were concerned with the making of stipulated contributions by employers, the prudential management of superannuation funds, and the imposition of the "surcharge". The first policy was implemented by the Superannuation Guarantee Charge Act 1992 (Cth), the Superannuation Guarantee (Administration) Act 1992 (Cth) ("the Guarantee Act") and the Superannuation Guarantee (Consequential Amendments) Act 1992 (Cth). Section 12(9) of the Guarantee Act expands the ordinary meaning of the term "employee" and, in particular, it classifies a person holding office under a law of a State as an employee of that State. Section 16 obliges employers to pay that employer's the "superannuation guarantee shortfall". "superannuation guarantee charge" imposed on The effect of the legislation is to require employers to pay stipulated contributions to a "complying superannuation fund", an expression adopted from Pt IX of the ITAA66; in the absence of those payments, the employer is liable to the superannuation guarantee charge of approximately twice the amount otherwise to be contributed. The charge is a debt due to the Commonwealth67. Approximately half of the charge is to be passed on to the complying superannuation fund for the benefit of the employee. The case stated is silent as to whether New South Wales or Victoria have had any superannuation guarantee shortfalls in respect of the plaintiffs. 65 Inserted by SR No 191 of 1997, effective from 4 July 1997. 66 See s 7 of the Guarantee Act. 67 Guarantee Act, s 50. The SIS Act The second development involved the introduction of new prudential arrangements for superannuation funds. The policy given effect by the Superannuation Industry (Supervision) Act 1993 (Cth) ("the SIS Act") was identified in sub-ss (1) and (2) of s 3. These stated: "(1) The object of this Act is to make provision for the prudent management of certain superannuation funds, approved deposit funds and pooled superannuation trusts and for their supervision by the Insurance and Superannuation Commissioner. The basis for supervision is that those funds and trusts are subject to regulation under the Commonwealth's powers with respect to corporations or pensions (for example, because the trustee is a corporation). In return, the supervised funds and trusts may become eligible for concessional taxation treatment." The scheme of the SIS Act was considered in Attorney-General (Cth) v Breckler68. A "regulated superannuation fund" was a fund in respect of which there had been an election that the SIS Act apply to it. If this fund was a resident superannuation fund and if there was compliance with the SIS Act and the regulations thereunder, the fund would obtain the status of a "complying superannuation fund" within the meaning of s 45 of the SIS Act. In respect of such a compliant fund, s 278 of the ITAA produced the beneficial result that the trustee would be liable to pay tax on the taxable income of the fund as provided in Pt IX of the ITAA and not otherwise. The only complying superannuation funds within the meaning of s 45 of the SIS Act that are unfunded are public sector superannuation schemes69. In the past a number of Australian public companies entered into agreements, which are still on foot, with officers or employees to pay them upon or after retirement an annuity or, more recently, a lump sum, in circumstances where the payments are made out of the resources of the company in question and no fund is set aside for the purposes of making the payments. The taxation treatment of moneys paid under these agreements will vary according to the terms and conditions on which 68 (1999) 197 CLR 83 at 100-103. See also O'Connell, "Superannuation and Tax β Some Equity Issues", (2000) 28 Federal Law Review 477 at 480-483. 69 Case Stated, par 108B. they are paid; there is no "complying superannuation fund" within the meaning of s 45 of the SIS Act70. Difficulties were encountered in applying the new prudential regime to State superannuation funds; in particular, as was emphasised in the submissions for South Australia, the prudential requirements relating to the maintenance of minimum assets could not be complied with in respect of those funds which were unfunded. Neither scheme established by the NSW Pensions Act or by s 104A of the Victorian Supreme Court Act, being the schemes affecting the plaintiffs, was a regulated superannuation fund for the purposes of the SIS Act; nor were the requirements of the definition in s 45(1) of "complying superannuation fund" met. However, s 45(6) of the SIS Act provided: "Despite subsection(1), if, at all times during a year of income when a fund was in existence, the fund was, or was part of, an exempt public sector superannuation scheme, the fund is a complying superannuation fund in relation to the year of income for the purposes of Part IX of the [ITAA]." The effect of the definition in s 10(1) of "exempt public sector superannuation scheme" was to identify its content as that specified in regulations. The effect of reg 1.04(4A) of the Superannuation Industry (Supervision) Regulations 1994 ("the SIS Regulations") has been that, at all material times, what were identified therein as "Schemes established by or operated under β¦ [the NSW Pensions Act and the Victorian Supreme Court Act]" were exempt public sector superannuation schemes. The surcharge legislation It is with the implementation by the Commonwealth of its third policy that this litigation is more immediately concerned. In introducing the Budget, the Commonwealth Treasurer on 20 August 1996 announced a range of measures which, it was said, were designed to make superannuation arrangements fairer, more flexible and better suited to the needs of the modern workforce. In particular, it was announced that tax deductible contributions made to superannuation funds by or on behalf of "high income earners" were to be subject to a surcharge of up to 15 per cent "payable by the funds". Further, it was said that, with respect to service before the Budget announcement, the new measure would not affect "benefits paid under an unfunded or Constitutionally protected scheme". The apparent incongruity in singling out for the same impost, dubbed a 70 Case Stated, par 108A. "surcharge", those "high income earners" who had had the benefit of concessional deductions for contributions and those in the public sector who had non-contributory arrangements was not addressed in the announcement. Subsequently, in the Second Reading Speech for the bills for what became the Superannuation Contributions Tax Imposition Act 1997 (Cth) ("the Surcharge Imposition Act") and the Superannuation Contributions Tax (Assessment and Collection) Act 1997 (Cth) ("the Surcharge Assessment Act"), the responsible "The superannuation system has been inequitably biased in favour of high income earners. Those high income earners have been benefiting from the concessional taxation treatment of superannuation to a much greater extent than low income earners. The introduction of the superannuation contributions surcharge for high income earners is this government's response to ensure that the superannuation system is more equitable for all Australians, while also ensuring that superannuation remains an attractive savings option." The term "surcharge" has been used to describe a penalty imposed for late returns to revenue authorities and a sum not passed on an audit and required to be refunded by the person responsible. The Minister appears to have had in mind some other meaning to identify a new subject of taxation without using that word. At all events, counsel for the plaintiffs emphasised that persons in their position had not participated in this announced mischief; the non-funded tax deductible pensions schemes for contributions. judicial officers had attracted no The oddly drawn s 34 of the Surcharge Assessment Act stated that the statute did not apply in any circumstance where its application would "or might" result in a constitutional contravention. Section 10 imposed liability to pay the surcharge not upon members but upon the superannuation provider, if that entity was the "holder" of the contributions. The arrangements in the private sector referred to at [60] for non-contributory unfunded benefits to which the SIS Act does not apply will not be "unfunded defined benefits superannuation schemes" (within the meaning of s 43 of the Surcharge Assessment Act) which attract the surcharge72. The Surcharge Assessment Act has been amended on various 71 Australia, House of Representatives, Parliamentary Debates (Hansard), 13 February 1997 at 887. 72 Case Stated, par 108A. occasions. Section 7(4) now provides73 that the surcharge is not payable under the Surcharge Assessment Act if, under the Protected Funds Assessment Act, it is payable on the contributions in question. Section 4 of the Surcharge Imposition Act imposed by force of that provision the surcharges identified by the Surcharge Assessment Act. Section 9 stated that the Surcharge Imposition Act did not impose a tax on property of any kind belonging to a State, within the meaning of s 114 of the Constitution. Further, s 8, to the extent necessary, read down s 4 so as to save it from imposing in relation to a State or an authority or officer of a State a surcharge the imposition of which would exceed the legislative power of the Commonwealth. No such provision is found in the Protected Funds Imposition Act; as will appear, that legislation is drawn so as to avoid any operation of s 114 by imposing liability for the impost not upon the States but the plaintiffs themselves. It is convenient now to return to the particular legislation with which this litigation is concerned, the Protected Funds Assessment Act and the Protected Funds Imposition Act. The protected funds legislation In the Second Reading Speech on the bill for the Protected Funds Assessment Act, the responsible Minister said74 that the bill would ensure that the superannuation contributions surcharge announced by the Treasurer on 20 August 1996 would apply "to members of constitutionally protected superannuation funds". The Minister continued75: "This bill complements the surcharge legislation already passed by the parliament. The existing superannuation contribution[s] surcharge The legislation legislation cannot apply to certain state superannuation funds because they are protected from revenue measures under the constitution. imposes surcharge on superannuation providers. 73 As a result of the amendment made by Sched 4 to the Superannuation Contributions and Termination Payments Taxes Legislation Amendment Act 1997 (Cth). 74 Australia, House of Representatives, Parliamentary Debates (Hansard), 2 October 75 Australia, House of Representatives, Parliamentary Debates (Hansard), 2 October This bill strengthens the equity of the surcharge measure by ensuring that the surcharge will apply to all high income earners. β¦ The collection mechanism under the bill is similar to that which applies to members of unfunded defined benefits superannuation funds under the [Surcharge Assessment Act]. The only difference is that the liability to pay the surcharge will rest with the member rather than the superannuation fund. The surcharge liability for a member for a year will be accumulated in a surcharge debt account, maintained by the Commissioner of Taxation, for the member and will be payable by the member when the member's superannuation benefit becomes payable. The member will have the option of paying off the debt as it arises once an amount of surcharge has been assessed." The emphasis upon strengthening the equity of the surcharge measure is indicative of a reluctance to admit of exceptions or qualifications to a particular revenue-raising policy. But the Constitution itself may require the allowance of exceptions. In that respect, attention was paid by the legislature to what was seen as the requirements of s 114. The plaintiffs submit that, as a result, the protected funds legislation implemented a different scheme from that in the Surcharge Imposition Act and the Surcharge Assessment Act. In particular, they point to the imposition of a surcharge not upon the superannuation provider, as with the general legislation, but upon members and to the apparent reason for this in a view taken as to the operation of s 114 of the Constitution. Whether that view, apparent from the Second Reading Speech, was soundly based may be open to question but should be acknowledged to the extent that it helps disclose the legislative purpose of the impugned statutes. However, what is at the heart of the present litigation is whether, in framing the laws in this form, there was a failure to have sufficient regard to another constitutional imperative, that expressed in the Melbourne Corporation doctrine. The plaintiffs further contend that, as it applies to them (even if not to all persons taxed by this legislation), the essence of the legislative scheme is a fiction. The State is treated as having made actuarially determined contributions into a superannuation fund on behalf of the plaintiffs and those "contributions" are treated as if held in the fund on trust for them; in respect of that non-existent state of affairs, the legislation purports to impose a tax as if those notional contributions existed and were held for or otherwise available to the plaintiffs. The plaintiffs do not contend that the statutes in question operate solely by resort to the fictions they identify. Rather, they submit, with particular support from New South Wales, that tax is imposed by two distinct criteria of liability which are to be seen from s 9 of the Protected Funds Assessment Act. The first is identified as the settlement of funds in what might be described as ordinary superannuation funds which are "constitutionally protected superannuation funds", where the tax is on actual contributions; the second, which applies to the plaintiffs, is the derivation of income at a rate determined by the "notional surchargeable contributions factor". It will be necessary to return to these submissions when considering the further ground of alleged invalidity, that based in the operation of s 55 of the Constitution. Federal unfunded schemes Reference also should be made to the position respecting benefits payable to members of unfunded non-contributory Commonwealth superannuation schemes. There is no challenge made to the scheme adopted here76. It differs to that in the legislation of which the plaintiffs complain. In particular, with respect to members of this Court and of the other courts created by the Commonwealth Parliament, the legislation provides for the reduction in benefits paid under the Judges' Pensions Act 1968 (Cth). The changes to that statute do not apply in respect of a Ch III Justice or judge appointed before the commencement of the changes to the latter statute77. This accurately reflects an understanding, common to Art III of the United States Constitution, that the "remuneration", which s 72(iii) of the Constitution states shall not be diminished during continuance in office, includes non-contributory pension plan entitlements which are accruing under the federal judicial pensions statute78. The liabilities of the plaintiffs Both the Protected Funds Imposition Act and the Protected Funds Assessment Act came into force on 7 December 1997. Section 7 of the latter Act states: "This Act does not apply to a person who is a member [of a constitutionally protected superannuation fund] because he or she is a judge of a court of a State at the commencement of this Act." 76 By the Superannuation Contributions Tax (Application to the Commonwealth) Act the Commonwealth β Reduction of Benefits) Act 1997 (Cth) and the Superannuation Legislation Amendment (Superannuation Contributions Tax) Act 1997 (Cth). the Superannuation Contributions Tax (Application (Cth), 77 Superannuation Legislation Amendment (Superannuation Contributions Tax) Act 1997 (Cth), Sched 5, Item 21. 78 United States v Hatter 532 US 557 at 574, 583 (2001). The expression "constitutionally protected superannuation fund" is given by s 38 of the Protected Funds Assessment Act "the same meaning" as has the expression "constitutionally protected fund" in Pt IX of the ITAA. It will be recalled that the definition in Pt IX operates by reference to reg 177 (including Sched 14) of the Income Tax Regulations. This yoking of reg 177, through the medium of Pt IX, to a pivotal provision of the Protected Funds Assessment Act is a significant matter for present and later purposes. The Commissioner of Taxation has the general administration of the Protected Funds Assessment Act. The Commissioner contends and the plaintiffs dispute that the first plaintiff is liable to pay superannuation contribution surcharge for the financial years 1998-1999 and 1999-2000 and that the second plaintiff is liable as well for the financial years 1996-1997 and 1997-1998. The alleged liability arises by virtue of accruing pension entitlements under the NSW Pensions Act and the Victorian Supreme Court Act. The position of the second plaintiff As has been indicated at [44], the first plaintiff was appointed a judge of the New South Wales Supreme Court after 7 December 1997, but the second plaintiff was appointed a Master of the Supreme Court of Victoria before that date. The application to her of the Protected Funds Assessment Act depends upon the view that, although a Master, she was not, within the meaning of s 7 of that statute, "a judge of a court of a State" at its commencement. Section 75(2) of the Victorian Constitution states: "The [Supreme] Court consists of the Judges of the Court and the Masters of the Court." On the other hand, s 25 of the NSW Supreme Court Act reads: "The [Supreme] Court shall be composed of a Chief Justice, a President of the Court of Appeal and such other Judges of Appeal and Judges as the Governor may from time to time appoint." Upon the proper construction of s 7 of the Protected Funds Assessment Act, the second plaintiff was "a judge of a court of a State" at the relevant time and the legislation under which she has been assessed has no application to her. Provisions with respect to pensions for Supreme Court Masters are made by the Victorian Supreme Court Act; those for judges of the Supreme Court by Pt III of the Victorian Constitution. Section 7 of the Protected Funds Assessment Act is so drawn as to exclude certain persons to whom the statute otherwise would apply because they are members of a "constitutionally protected fund". Schedule 14, to which reference has been made, lists both the Victorian Supreme Court Act and the Victorian Constitution. The only "fund" established by the former statute is to be seen in the pension entitlement provisions for Masters. The inclusion in the Schedule of the Victorian Supreme Court Act can serve no other purpose. This supports the construction of the phrase "a judge of a court of a State" to include the second plaintiff. To that may be added the specification, in s 75(2) of the Victorian Constitution, of the Supreme Court as a court consisting both of judges and Masters. Reference to the significance of s 75(2) was made in Harris v Caladine79 by several members of the Court. Mason CJ and Deane J said80: "[T]he ways in which a court may be organized or structured for the purpose of exercising its jurisdiction, powers and functions admit of considerable variation. As Windeyer J noted in Kotsis [v Kotsis], '[a]ccording to the tradition of the common law, a superior court of record is a court sitting in banc for the administration of justice'81. However, as his Honour went on to point out: 'In the course of time it became settled that, for some purposes, the jurisdiction of a superior court of common law could be exercised by a single judge. For the due administration of justice courts had officers who in some cases were, and are, empowered to perform specified functions on behalf of the courts to which they belonged.'" Their Honours went on to describe s 75(2) of the Victorian Constitution as "a further stage in the process of evolutionary development in the constitution of courts for purposes connected with the exercise of their jurisdiction. Although they are developments which have taken place since 1900, they serve to confirm what we have already said, namely, that a court may be organized or structured in a wide variety of ways for the purpose of exercising its jurisdiction." 79 (1991) 172 CLR 84. 80 (1991) 172 CLR 84 at 91. See also per Dawson J at 117-118. 81 (1970) 122 CLR 69 at 91. 82 (1991) 172 CLR 84 at 91. The conclusion that, in respect of the Supreme Court of Victoria, the term "judge" in s 7 of the Protected Funds Assessment Act includes both Masters and judges is not determinative of the position of officeholders in other State courts. The answer in each case will turn upon the relevant State legislation and the contents of Sched 14 to the Income Tax Regulations. However, with respect to the second plaintiff, question 1(b) of the case stated should be answered "No" and question 2 does not arise. The second plaintiff may be dismissed from further consideration in these reasons; they will bear upon the position of the first plaintiff. It is convenient to return to consideration of the provisions under which the first plaintiff has been assessed. The position of the first plaintiff Section 5 of the Protected Funds Assessment Act states: "The object of this Act is to provide for the assessment and collection of the superannuation contributions surcharge payable on surchargeable contributions for high-income members of constitutionally protected superannuation funds." Section 4 of the Protected Funds the superannuation contributions surcharge that is payable for each financial year on the surchargeable contributions of a member as computed under the Protected Funds Assessment Act. The rate of the surcharge is fixed by s 5 of the Protected Funds Imposition Act. Imposition Act imposes The surcharge is payable on the member's surchargeable contributions for the financial year that began on 1 July 1996 or a later financial year (Protected Funds Assessment Act, s 8(1)). However, no surcharge is payable for a financial year unless the member's adjusted taxable income for the financial year is greater than the surcharge threshold for the financial year (s 8(2)). The adjusted taxable income of the first plaintiff for the financial years in question was in each case greater than the surcharge threshold for that financial year. The effect of definitions in s 38 of the Protected Funds Assessment Act is that a scheme for the payment of superannuation, retirement or death benefits established by or under a law of a State is a "public sector superannuation scheme"; a "defined benefits superannuation scheme" includes a public sector superannuation scheme which is, within the meaning of the SIS Act, an "exempt public sector superannuation scheme". As already indicated, at [61], the effect of reg 1.04(4A) of the SIS Regulations is that schemes established by or operated under the NSW Pensions Act are exempt public sector superannuation schemes. This definitional chain leads to the result that the State statutory scheme for the provision of benefits to the first plaintiff is a "defined benefits superannuation scheme". This is significant for the operation of s 9 of the Protected Funds Assessment Act. This sets out to explain what are the surchargeable contributions of a member for a financial year. A definition of "surchargeable contributions" is provided by s 9. As indicated at [71], it falls into two halves. The first deals, in broad terms, with "contributed amounts" paid by the trustee of a constitutionally protected superannuation fund (s 9(2), (3)). The second deals (s 9(4)-(7)) with defined benefits superannuation schemes where there are no actual contributions and the statutory fictions of which the first plaintiff complains are employed. In both categories, the surcharge for each financial year is payable not by the superannuation provider, but by the member (s 11). In the latter category, that in which the first plaintiff finds himself, the "surchargeable contributions" are identified in s 9(4) as: "the amounts that constitute the actuarial value of the benefits that accrued to, and the value of the administration expenses and risk benefits provided in respect of, the member for the financial year". A component in the formula set out in s 9(5) for the identification of that "actuarial value" is identified as the "notional surchargeable contributions factor". That is specified in s 9(5) as meaning the factor applying to the member for the financial year worked out by an eligible actuary in accordance with "the method set out in Superannuation Contributions Ruling SCR 97/1". That ruling ("SCR 97/1") was issued by the Commissioner of Taxation on 13 August 1997 to provide actuaries with a standard to follow when providing certificates which deal with the "notional surchargeable contributions factor" as defined in s 43 of the Surcharge Assessment Act. The effect of s 12 of the Protected Funds Assessment Act is to require New South Wales as a "superannuation provider" of the benefits of the first plaintiff to engage an actuary to make the calculations of "surchargeable contributions" required under s 9. Section 12(2) requires each "superannuation provider" the Commissioner of Taxation surchargeable contributions which have been computed in the required way. to report The first plaintiff emphasises that the actuary is obliged to undertake the calculation by reference to the amount of contributions which would have actually to be made to a fund, if one existed, in order to produce the pension benefits that it is supposed the judicial officer might receive upon retirement; further, for the purposes of that supposition, the actuary is required to assume that the judicial officer will qualify for a pension at an actuarially determined average age for judicial retirement, will have a spouse and dependants of number and circumstances corresponding to an actuarially determined mean, and will survive retirement for a period corresponding to an actuarially determined age of death for retired judicial officers. Thus the calculations incorporate assumptions for groups of people on matters such as matrimonial status, age of retirement and mortality, with the result that in many cases the pension benefits actually received will be significantly less than that assumed in the calculation of the notional surcharge contributions factor for s 9(5) of the Protected Funds Assessment Act. Further, and it would appear inevitably, the "surchargeable contributions" calculated in this fashion are high proportions of the salary of the judicial officers. The first plaintiff has been assessed to surcharge for the years 1998-1999 and 1999-2000 on surchargeable contributions fixed at more than 61 per cent of his annual remuneration. If he were to pay the contributions surcharge which had been assessed, he would be doing so in respect of potential benefits under the State legislation which might never be received. In the event, there may be failure to comply with one or other of the statutory preconditions for receipt of those benefits under the State laws. There is a dispute between the parties as to whether, if events so transpired, the amounts paid to the Commonwealth would be refundable under the provisions of the Taxation Administration Act 1953 (Cth). Section 15 of the Protected Funds Assessment Act makes provision for deferment of liability to pay the surcharge and for interest to accrue on the deferred amount in the "surcharge debt account" to be kept by the Commissioner for each member of a constitutionally protected superannuation fund. Interest is charged annually on the balance and added to the amount by which the surcharge debt account is in debit. The result is that that debit, which includes interest on interest, will continue to grow whilst the judicial officer remains in service after reaching that age at which, under the relevant State law, there has fully accrued the right to retire with a pension; this increase in the debit will continue even though the worth of the pension is diminishing because it would be payable for a shorter period of time. Tables accompanying the case stated provide examples where the amount payable by a judicial officer upon retirement to discharge the debit in the surcharge debt account can exceed the amount which would be payable under the State scheme in the first year of retirement. For example, if the first plaintiff lived and served until the statutory retirement age for those in his office, his surcharge and interest liability would be in the order of $550,000. That sum would be more than double the gross annual pension (before income tax) to which, as now estimated, he would be entitled at that time. Construction issues It is convenient to turn to the questions of construction which, if resolved by acceptance of the first plaintiff's submissions, would deny the application to him of the provisions respecting the surcharge. Section 3 of the Protected Funds Imposition Act gives to those expressions used therein which are defined in the Protected Funds Assessment Act the same meaning as in that statute. The first point turns upon the definition in s 38 of the Protected Funds Assessment Act of "constitutionally protected superannuation fund". It is there said that this "has the same meaning" as another term, namely "constitutionally protected fund", "has in Pt IX of the [ITAA]". Liability for the surcharge is imposed by s 11 upon those who are "members" of a constitutionally protected superannuation fund. The first plaintiff denies that, upon the proper construction of the legislation, he is a member of such a fund. The reference to Pt IX of the ITAA directs the reader to s 271A of that statute. That has the purpose of limiting the reach of the revenue law by exempting from tax income derived from a "constitutionally protected fund". The definition of that term in s 267(1) identifies "a fund" declared by reg 177 of the Income Tax Regulations (which incorporates by reference Sched 14) to be a constitutionally protected fund. The range of State legislation listed in Sched 14 establishes schemes which provide a variety of benefits, including pensions and lump sum payments; some of the schemes are funded wholly or in part by contributions made by or on behalf of members, others are not; there are funds the assets of which belong to the State and others where benefits are paid directly from the State consolidated revenue fund. In addition to the NSW Pensions Act, Sched 14 identifies a number of non-contributory schemes with payments to be made out of the Consolidated Revenue83. Also included are contributory arrangements under a range of public sector legislation84. Hence, some schemes will fall into the first half of the definition of surchargeable contributions in s 9 of the Protected Funds Assessment Act and others, of which the NSW Pensions Act is one, will fall into the second as defined benefits superannuation schemes. 83 This includes the Attorney-General and Solicitor-General Act 1972 (Vic), the Coal Mines (Pensions) Act 1958 (Vic), the Mint Act 1958 (Vic) and the Public Prosecutions Act 1994 (Vic). 84 This includes the Government Employees Superannuation Act 1987 (WA), the Parliamentary Superannuation Act 1974 (SA), the Police Superannuation Act 1990 (SA), the Southern State Superannuation Act 1994 (SA), the Superannuation Act 1988 (SA), the Judges' Contributory Pensions Act 1968 (Tas) and the Solicitor- General Act 1983 (Tas). The statutes listed for South Australia display perhaps the greatest diversity. There are several species of public sector "constitutionally protected" superannuation schemes. They include: (i) those where employee contributions are paid into a fund which is the property of the State; entitlements are paid from the Consolidated Account which is reimbursed from the fund; (ii) schemes in which both employer and employee contributions are paid into such a fund; (iii) schemes where employer and employee contributions are paid into a fund vested in a trustee and entitlements are paid from that fund; and (iv) schemes where there are no contributions by employees or officers, no fund, and entitlements are paid from the Consolidated Account. Thus, in South Australia, in some cases entitlements in respect of contributory schemes (as well as non-contributory schemes) will be received by payments from the Consolidated Account. In the case of such legislative arrangements for contributory schemes, it is easy to speak of a fund which derives income, so that the exemption conferred by s 271A of the ITAA applies. That does not so readily appear where the State legislation both establishes non-contributory schemes and provides for payments secured upon the Consolidated Revenue. Those non-contributory schemes identified in Sched 14 are not limited to those respecting judicial officers, the law officers and vice-regal representatives. However, they are so limited in the case in New South Wales and Victoria, save for the schemes established by the Coal Mines (Pensions) Act 1958 (Vic) and the Mint Act 1958 (Vic). But the pensioners under these latter two statutes represented a closed class (of about 91 persons in all) when the protected funds legislation began its operation; the result is that, despite the terms of Sched 14, the legislation has no impact upon them. This incongruity is a consequence of the direct translation of the whole of Sched 14 from its earlier purpose to that of the later legislation. It is against that background that reg 177 falls for consideration. The text is as follows: "For the definition of section 267 of the [ITAA], each of the following funds is declared to be a constitutionally protected fund: 'constitutionally protected fund' a fund of the kind to which, in the absence of section 271A of the [ITAA], Part IX of the [ITAA] would apply, established by: a State Act specified in Schedule 14; or a specified provision of a State Act specified in Schedule 14; the fund known as the Police Occupational Superannuation Scheme, established in South Australia under Trust Deed." Paragraph (a) of the regulation is to be understood as presenting two criteria, the first of which is broader than the second, and both of which are to be satisfied. The first criterion is the identification of a fund established by State legislation specified in Sched 14. The second requires identification, from among that list, of a fund of a kind to which, in the absence of the exemption conferred by s 271A, Pt IX of the ITAA would apply. The result is that, for more abundant caution, there have been included in Sched 14 some statutes which make arrangements not involving the establishment of funds deriving income. Nevertheless, in such cases, there is no "constitutionally protected fund" because there is no fund of a kind to which, in the absence of s 271A, Pt IX would apply. In this way, the legislative purpose of conferring an exemption from what otherwise would be the scope of Pt IX is satisfied. The legislative purpose in the Protected Funds Assessment Act is quite different. The objective here is to create, or at least to identify, by the notion of a member of a constitutionally protected superannuation fund, a class of taxpayers and a "subject of taxation" within the meaning of s 55 of the Constitution. References already made to the provisions in the second half of s 9 dealing with the "notional surchargeable contributions factor" indicate that the legislature had in mind the imposition of taxation partly by reference to notional or fictional constructs. In that setting, the construction of the definition of "constitutionally protected superannuation fund" in s 38 of the Protected Funds Assessment Act turns in large degree upon the statement that it "has the same meaning" as does the phrase just considered in Pt IX of the ITAA. Taken at one level, the phrase cannot have the same meaning in the ITAA as it has in the Protected Funds Assessment Act. That which is identified or indicated by the first use is the existence of an exemption to a certain species of revenue liability; that which is identified or indicated by the second use is the incurring of another species of revenue liability. However, the phrase "the same meaning" is to be taken as used at the semantic level appropriate to the respective subject-matters of the two statutes85. 85 cf Maunsell v Olins [1975] AC 373 at 391; Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389 at 398, 400-401. To read the definition as excluding non-contributory arrangements under a range of particular State laws would not conform to the scheme of the Protected Funds Assessment Act86. The definition is not to be given the same literal application as it has in Pt IX of the ITAA if to do so would cause to miscarry the hypothesis upon which it is adopted by the other statute87. Further, in Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation, Mason and Wilson JJ remarked88: "The fact that the Act is a taxing statute does not make it immune to the general principles governing the interpretation of statutes. The courts are as much concerned in the interpretation of revenue statutes as in the case of other statutes to ascertain the legislative intention from the terms of the instrument viewed as a whole." The definition in s 267(1) of the ITAA identifies "a fund" declared by the regulations to be a constitutionally protected fund; the only such regulation is reg 177. That regulation itself has difficulties of construction to which reference has been made and to these the requirement of the "same meaning" in s 38 of the Protected Funds Assessment Act is to be accommodated. Whether or not, given s 114 of the Constitution, Pt IX of the ITAA would apply in the absence of the exemption conferred in s 271A thereof for that purpose is not significant. What is significant for the purposes of the definition in the Protected Funds Assessment Act is the treatment as "funds" of the arrangements established by the State legislation listed in Sched 14. This includes the New South Wales legislation upon which the first plaintiff relies for his pension entitlements. The first construction point fails. Next, the first plaintiff submits that, even if he is a "member" for the purposes of the definition because he is a member of a constitutionally protected superannuation fund, nevertheless ss 8(1) and 9(4) of the Protected Funds Assessment Act do not apply. This is said to be because, contrary to the requirement in the definition of "surchargeable contributions" in s 9(4), he is not "a member of a defined benefits superannuation scheme". The reason given is that the first plaintiff is not a "defined benefit member" of a "public sector 86 cf Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 321-322. 87 cf the treatment by Mason J of s 79 of the Judiciary Act in John Robertson & Co Ltd v Ferguson Transformers Pty Ltd (1973) 129 CLR 65 at 95. 88 (1981) 147 CLR 297 at 323. superannuation scheme". The expression "defined benefit member" is defined in s 38 of the Protected Funds Assessment Act as meaning: "a member entitled, on retirement or termination of his or her employment, to be paid a benefit defined, wholly or in part, by reference to either or both of the following: the amount of: the member's salary at a particular date, being the date of the termination of the member's employment or of the member's retirement or an earlier date; or the member's salary averaged over a period before retirement; a stated amount." (emphasis added) The first plaintiff holds a statutory office and, in the common law sense of the term, is not an employee. However, the term "employee" and cognate expressions may take further colour from particular statutory contexts89. At the time of the commencement of the Protected Funds Assessment Act, the list of statutes in Sched 14 brought within the scope of the statute a range of officeholders who would not be treated as employees of any State. The reference in the definition of "defined benefit member" to "employment" is to be read accordingly. The third construction point fixes upon the requirement in the definition of "defined benefit member" that there be an entitlement on retirement or termination of employment to be paid a benefit which "wholly or in part" is defined "by reference to" the salary of the member at the date of the termination or retirement. It is said that the pension that would be payable to the first plaintiff under the NSW Pensions Act is referable to the salary from time to time of current officeholders; it is not frozen by reference to the particular officeholder's remuneration at the date of retirement or termination. The first plaintiff is entitled under s 29 of the NSW Supreme Court Act to be paid remuneration in accordance with the Statutory and Other Offices Remuneration Act 1975 (NSW). The effect of s 21(1) and Sched 1 of that statute is to forbid the reduction of this remuneration. Remuneration at the time of retirement or termination of service of the first plaintiff will form a basal 89 Holly v Director of Public Works (1988) 14 NSWLR 140 at 150-151. component of what thereafter becomes the pension sums paid from time to time. Pensions are calculated as percentages of the "notional judicial salary" from time to time of the retired or deceased judge. Section 2(2) of the NSW Pensions Act identifies this by reference to the salary payable from time to time to the holder of a judicial office of equivalent status to that held at the death or retirement of the judge in question. In that way, the first plaintiff is entitled after retirement or termination to be paid a benefit "in part" defined "by reference" to a salary at the date of termination or retirement. In that way the definition of "defined benefit member" is satisfied. Further, the provisions in ss 13-15 of the NSW Pensions Act with respect to lump sum benefits provide for the calculation of lump sums immediately by reference to final salary and years of service. The satisfaction in this way of the criteria in par (a) of the definition of "defined benefit member" makes it unnecessary to consider the submissions with reference to par (b), the specification of "a stated amount". Finally, the first plaintiff fixes upon the specification in the definition of "surchargeable contributions" in s 9(4) of the Protected Funds Assessment Act of "amounts that constitute the actuarial value of the benefits that accrued to ... the member for the financial year". It is submitted that no "benefit" can be said to "accrue" to him in respect of any financial year before his retirement or termination of service. However, the content of the expression in question in s 9(4) is found in succeeding provisions of that section. The phrase "the benefits that accrued to β¦ the member for the financial year" has no independent operation. Rather, there is in s 9(4) a composite expression "actuarial value of the benefits that accrued to, and the value of the administration expenses and risk benefits provided in respect of, the member for the financial year". The content of that composite expression is detailed in s 9(5) in such a fashion as to bring into operation the method stipulated in SCR 97/1. It may be, as the first plaintiff contends, that the application of this method involves notional or fictional elements. But this circumstance does not make good the construction point respecting s 9(4). For these reasons, in the case of the first plaintiff, question 1(a) of the case stated should be answered "Yes". It then becomes necessary to answer question 2 which poses the various contentions respecting invalidity. Constitutional implications The plaintiffs rely in several ways upon principles derived from Melbourne Corporation v The Commonwealth90, in particular, to restrain what 90 (1947) 74 CLR 31. otherwise would be the reach of the power of the Parliament to make laws under s 51(ii) of the Constitution with respect to: "Taxation; but so as not to discriminate between States or parts of States". The relevant fundamental constitutional conception represents what, after the rejection in the Engineers' Case91 of the earlier doctrine, remained as an implication necessarily to be derived from the federal structure established by the Constitution and consistent with its express terms. In Australian Capital Television Pty Ltd v The Commonwealth92, in a passage later adopted by Brennan CJ in McGinty v Western Australia93, "[W]here the implication is structural rather than textual it is no doubt correct to say that the term sought to be implied must be logically or practically necessary for the preservation of the integrity of that [constitutional] structure". Thereafter, in Kruger v The Commonwealth94, Dawson J said that: "[t]he limitation upon the powers of the Commonwealth Parliament which prevent it from discriminating against the States is derived from β¦ considerations β¦ articulated by Dixon J in Melbourne Corporation v The Commonwealth95 when he said: 'The foundation of the Constitution is the conception of a central government and a number of State governments separately organised. The Constitution predicates their continued existence as independent entities.'" 91 Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (1920) 28 CLR 92 (1992) 177 CLR 106 at 135. 93 (1996) 186 CLR 140 at 168-169; see also at 188, 230-232, 291. 94 (1997) 190 CLR 1 at 64. See also his Honour's observations in Queensland Electricity Commission v The Commonwealth (1985) 159 CLR 192 at 260. 95 (1947) 74 CLR 31 at 82. legislating for the other"96. Sir Owen Dixon, shortly after Melbourne Corporation, said that in a dual political system, such as a federal system, one did not "expect to find either government Nevertheless, the Constitution contemplates federal laws directed in terms to the States. By a law with respect to trade and commerce the Parliament may forbid, as to railways, certain preferences or discrimination by any State (s 102). The Parliament may prescribe the number of judges of a State court to exercise federal jurisdiction (s 79), having conscripted State courts for the investing of federal jurisdiction (s 77(iii)). The Parliament may annul certain State inspection laws (s 112), consent to the raising of any naval or military force (s 114), and oblige States to make provision for the detention in their prisons of those accused or convicted of Commonwealth offences (s 120). Most significantly, it may, on terms, grant financial assistance to any State (s 96) and, on just terms, acquire State property (s 51(xxxi)). In a sense, these laws "single out" the States but would not necessarily do so in the manner or to the degree with which the Melbourne Corporation doctrine is concerned. Because the limitation on power is derived from the federal structure, it is difficult, if not impossible, to articulate it except in negative terms which are cast at a high level of abstraction β that the Commonwealth's legislative powers do not extend to making a law which denies one of the fundamental premises of the Constitution, namely, that there will continue to be State governments separately organised. In the cases which have considered this implication, including Melbourne Corporation, it is sought to give the proposition more precise content by referring to "discrimination". Melbourne Corporation and discrimination It is important for an evaluation of the first plaintiff's submissions to examine what is involved in the notion of "discrimination" said to be drawn from Melbourne Corporation and succeeding decisions respecting intergovernmental immunities. The notion of "immunity" here is concerned with freedom from legislative affectation97. In Re State Public Services Federation; Ex parte 96 In re Foreman & Sons Pty Ltd; Uther v Federal Commissioner of Taxation (1947) 74 CLR 508 at 529. 97 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 560. Attorney-General (WA)98, Toohey J identified a debate underlying Queensland Electricity Commission v The Commonwealth99: "as to whether discrimination against a State is but an illustration of a law impairing the capacity of a State to govern or whether it has a standing of its own". It is necessary also to distinguish the specific reference in s 51(ii) to discrimination. A law with respect to taxation, in general, does not discriminate in the sense spoken of in s 51(ii) if its operation is general throughout the Commonwealth even though, by reason of circumstances existing in one or more of the States, it may not operate uniformly100. It is for that reason that if, as appears to be the case, the Judges' Contributory Pensions Act 1968 (Tas) establishes a contributory scheme in contrast to the New South Wales and Victorian legislation which makes provision for the plaintiffs, that circumstance does not render the Protected Funds Imposition Act or Protected Funds Assessment Act laws which in their application to judicial officers discriminate between States. The phrase in s 51(ii) is "discriminate between". Likewise, in other provisions of the Constitution where "discrimination" is used expressly, notably ss 102 and 117, and in judicial interpretation of the Constitution, notably that of s 92, the primary sense is of "discrimination between"101. The essence of the notion of discrimination is said to lie in the unequal treatment of equals or the equal treatment of those who are not equals102, where the differential treatment 98 (1993) 178 CLR 249 at 296. 99 (1985) 159 CLR 192. 100 Deputy Federal Commissioner of Taxation (NSW) v W R Moran Pty Ltd (1939) 61 CLR 735 at 764; affd W R Moran Pty Ltd v Deputy Federal Commissioner of Taxation (NSW) (1940) 63 CLR 338 at 349; [1940] AC 838 at 857; Conroy v Carter (1968) 118 CLR 90 at 101. 101 I W v City of Perth (1997) 191 CLR 1 at 36-37. 102 Queensland Electricity Commission v The Commonwealth (1985) 159 CLR 192 at 240; Castlemaine Tooheys Ltd v South Australia (1990) 169 CLR 436 at 480; Cameron v The Queen (2002) 76 ALJR 382 at 385 [15]; 187 ALR 65 at 68. and unequal outcome is not the product of a distinction which is appropriate and adapted to the attainment of a proper objective103. litigation the present The submission respecting Melbourne Corporation is that, at least in their application to the first plaintiff, the laws in question are beyond the taxation power because they discriminate against New South Wales by singling it out to place upon it special burdens or disabilities, the attainment of a constitutionally improper objective. But, even if that be so, where is the first step, the unequal treatment of equals or equal treatment of the unequal? In Melbourne Corporation itself, in speaking of laws said "discriminate" against the States, Latham CJ said104: "I have some difficulty in understanding how 'discrimination' in a precise sense can be shown in a law applying only to one person or class of persons in respect of a particular subject matter. Discrimination appears to me to involve differences in the treatment of two or more persons or subjects. Legislation with respect only to one or more persons or with respect only to one or more subjects is not, I suggest with respect, properly described as discriminating against other persons or other subjects simply because it leaves them alone. β¦ In New York v United States105 and the other cases to which I have referred in which it has been held that a law may be invalid on the ground of 'discrimination,' the word 'discrimination' is, I think, really used in the sense explained by Douglas J in New York v United States106 β that is, singling out another government and specifically legislating about it." To similar effect is the more recent statement by Professor Tribe, with reference to the apparent paradox in the United States decisions treating "discrimination" as the trigger for principles of intergovernmental immunity. He said107: 103 Street v Queensland Bar Association (1989) 168 CLR 461 at 510-511; 548, 571-573, 582; Cameron v The Queen (2002) 76 ALJR 382 at 385 [15]; 187 ALR 104 (1947) 74 CLR 31 at 60-61. 107 Tribe, American Constitutional Law, 3rd ed (2000), vol 1 at 1233. "[T]he very concept of an immunity (as reflected in the intergovernmental immunity doctrine) is more than a claim to equal treatment; indeed, it is a claim to special treatment beyond that to which otherwise similarly situated parties are entitled." (original emphasis) In the joint judgment of six members of the Court in Australian Education Union, after discussing the judgment of Dixon J in Melbourne Corporation, their Honours continued108: "Although the comments of Dixon J were couched principally in terms of discrimination against States and the imposition of a particular disability or burden upon an operation or activity of a State or the execution of its constitutional powers, his Honour clearly had in mind, as did Latham CJ, Rich and Starke JJ, that the legislative powers of the Commonwealth cannot be exercised to destroy or curtail the existence of the States or their continuing to function as such109. Whether this means that there are two implied limitations, two elements or branches of one limitation, or simply one limitation is a question which does not need to be decided in this case." At some stages in the argument in the present case it was suggested to be sufficient to render the legislation invalid in its application to the first plaintiff and other State judicial officers that the legislation treated them differently to beneficiaries under the unfunded private sector schemes to which reference is made at [60] and [65], and differently to Ch III judges, by imposing the taxation liability upon them rather than the provider of the benefits. This differential treatment was said, without more, to attract the Melbourne Corporation doctrine; the like was treated as the unalike and thereby the States were burdened in a "special way". That would appear to give "discrimination" a standing on its own which in this field of discourse it does not have. There is, in our view, but one limitation, though the apparent expression of it varies with the form of the legislation under consideration. The question presented by the doctrine in any given case requires assessment of the impact of particular laws by such criteria as "special burden" and "curtailment" of "capacity" of the States "to function as governments". These criteria are to be 108 (1995) 184 CLR 188 at 227. 109 Melbourne Corporation v The Commonwealth (1947) 74 CLR 31 at 56, 60 per Latham CJ, 66 per Rich J, 74 per Starke J, 82 per Dixon J; see also Bank of NSW v The Commonwealth (1948) 76 CLR 1 at 337-338 per Dixon J. applied by consideration not only of the form but also "the substance and actual operation" of the federal law110. Further, this inquiry inevitably turns upon matters of evaluation and degree and of "constitutional facts" which are not readily established by objective methods in curial proceedings. The cautionary remarks by Frankfurter J in New York v United States111 respecting the judgment of issues of legislative validity by such criteria and methods of reasoning remain in point. The scope of the doctrine In Queensland Electricity112, in a passage with which we respectfully agree, Dawson J referred to these difficulties as inherent in any attempt to formalise the Melbourne Corporation doctrine and added: "These difficulties explain why there has been a preference to speak in terms of those aspects of legislation which may evidence breach of the doctrine rather than to generalize in terms of the doctrine itself. Discrimination against the States or their agencies may point to breach as may a special burden placed upon the States by a law of general application." The reasoning in the foundation decisions, and that in the contemporary United States cases, bears out the view later taken by Dawson J in this passage. In Essendon Corporation v Criterion Theatres Ltd113, decided six weeks before the argument in Melbourne Corporation, Dixon J had said114: "It is, perhaps, desirable to add that this case cannot be considered as one in which the Commonwealth comes in to avail itself of privileges, facilities or a course of business established by or under State law to 110 Re Australian Education Union; Ex parte Victoria (1995) 184 CLR 188 at 240; Queensland Electricity Commission v The Commonwealth (1985) 159 CLR 192 at 249-250; Industrial Relations Act Case (1996) 187 CLR 416 at 500. 111 326 US 572 at 581 (1946). See also the discussion by Brennan J in The Second Fringe Benefits Tax Case (1987) 163 CLR 329 at 359-360. 112 (1985) 159 CLR 192 at 260. 113 (1947) 74 CLR 1. 114 (1947) 74 CLR 1 at 24. which a charge or even a tax is incident. In the Panhandle Oil Co's Case115 the United States as a purchaser suffered the increase in price which resulted from the sales tax on the vendor, and Holmes J in reference to this said of the Federal Government, 'It avails itself of the machinery furnished by the State and I do not see why it should not contribute in the same proportion that every other purchaser contributes for the privileges that it uses. It has no better or other right to use them than any one else. The cost of maintaining the State that makes the business possible is just as necessary an element in the cost of production as labor or coal'116." Section 48 of the Banking Act 1945 (Cth) ("the Banking Act"), the provision held invalid in Melbourne Corporation, was addressed to banks but impacted upon the States. It stated: "Except with the consent in writing of the Treasurer, a bank shall not conduct any banking business for a State or for any authority of a State, including a local governing authority." Dixon J repeated the proposition that the States must accept the general legal system as it is established when they availed themselves "of any part of the established organization of the Australian community"117. However, s 48 attempted "to isolate the State from the general system" by denying it "the choice of the machinery the system provides"118. Williams J spoke of the deprivation by s 48 of "the use of banking facilities available to the general public"119. Both judges, in this context, spoke of discrimination against the States120. But they did so in response to the Commonwealth submission that the States, as well as private individuals, must accept the consequences that attend federal control of the banking system121. The course taken by Dixon J perhaps anticipated and responded to the apparent paradox later detected by Professor Tribe and noted at 115 [Panhandle Oil Co v Mississippi ex rel Knox] 277 US 218 (1928). 116 277 US 218 at 224 (1928). 117 (1947) 74 CLR 31 at 84. 118 (1947) 74 CLR 31 at 84. 119 (1947) 74 CLR 31 at 100. 120 (1947) 74 CLR 31 at 84, 99-100 respectively. 121 (1947) 74 CLR 31 at 40-41. [121]. It also reflected his Honour's position that, whilst generally expressed principles applied, as the first part of his judgment indicated122, nevertheless123: "[t]he actual decision in the present case can be no wider than the constituent factors contained in s 48 require, however widely the principles which lead to it may be stated." On the other hand, Rich J124 and Starke J125 both stressed the use by the States of banking facilities as essential to the efficient discharge by the States of their constitutional functions rather than the general milieu in which the States must operate. Thereafter, in Bank of NSW v The Commonwealth ("the Banking Case")126, Dixon J distinguished between (a) a federal law of general application which the States must take as they find it as part of the system enjoyed by the whole community, if they wish to avail themselves of the services or facilities regulated or determined by that federal law127; (b) a law which discriminates against the States and in that way singles them out in order to curtail their freedom in the execution of their constitutional powers; and (c) laws which, without discriminating against the States and singling them out, nevertheless operate against them in such a way as to be beyond federal power. The Banking Case fell in category (a); Melbourne Corporation in category (b); and, with respect to category (c), Dixon J referred to the discussion in New York v United States128. 122 (1947) 74 CLR 31 at 78-83. 123 (1947) 74 CLR 31 at 83. 124 (1947) 74 CLR 31 at 67. 125 (1947) 74 CLR 31 at 75. 126 (1948) 76 CLR 1 at 337-338. 127 Later, in The Commonwealth v Cigamatic Pty Ltd (In Liquidation) (1962) 108 CLR 372 at 378, Dixon CJ made the corresponding point respecting the choice by the executive arm of the Commonwealth to enter into sale of goods transactions, a field where the States had enacted laws of general application. In Melbourne Corporation itself, Dixon J129 had referred to New York v United States as a decision "the various opinions in which will repay study". Reference to it was made also in the judgments of Latham CJ130, Rich J131 and Starke J132. In his extrajudicial writing, Sir Owen Dixon stressed the importance of the timely development of federalism doctrine in the United States at this period133. Accordingly, it is appropriate to look more closely at that decision and other American cases of the period in which Melbourne Corporation was decided, particularly those in which federal taxation laws were in question. What is said in those cases may well not represent the current state of authority in the United States134, but an examination of them supports the tripartite analysis in the Banking Case; that is their significance for present purposes. The United States decisions In Helvering v Gerhardt135, the Supreme Court held that the salaries of employees of the Port of New York Authority, a corporation created by compact between the States of New York and New Jersey, were not immune to the imposition of taxation by a federal law of general application. The Court referred to McCulloch v Maryland136, saying that the State law there held invalid "was aimed specifically at national banks and thus operated to discriminate against the 129 (1947) 74 CLR 31 at 81. 130 (1947) 74 CLR 31 at 47, 58-61. 131 (1947) 74 CLR 31 at 67. 132 (1947) 74 CLR 31 at 71-72. 133 Dixon, "Marshall and the Australian Constitution", (1955) 29 Australian Law Journal 420 at 423-424; Dixon, "Mr Justice Frankfurter: A Tribute from Australia", (1957) 67 Yale Law Journal 179 at 183-184. See also Sawer, Australian Federal Politics and Law 1929-1949, (1963) at 210-212; Johnston, The Effect of Judicial Review on Federal-State Relations in Australia, Canada, and the United States, (1969) at 73-79. 134 See, for example, as the "anti-discrimination rule", Tribe, American Constitutional Law, 3rd ed (2000), vol 1 at 914-916, 1233-1237. 135 304 US 405 (1938). The Opinion of the Court was delivered by Stone J. 136 4 Wheat 316 (1819) [17 US 159]. exercise by the Congress of a national power"137. The Court continued by saying that such discrimination later had been "recognized to be in itself a sufficient ground for holding invalid any form of state taxation adversely affecting the use or enjoyment of federal instrumentalities had been held immune even from "non-discriminatory state taxation"138. instrumentalities", and, further, federal that The Court in Helvering went on to refer to the application after 1870 of the governmental immunity doctrine in favour of the States. In particular, in Collector v Day139, the salary of the respondent, a judge of a Massachusetts State court whose salary was fixed by law and payable out of the treasury of that State, had been held by the Supreme Court to be immune from federal income tax. In Helvering, the Supreme Court pointed out that the implied limitation upon federal power necessarily proceeded upon a broader basis than that which had founded the implied restriction upon State power. Referring to Collector v Day, the Court in Helvering said140: "In recognizing that implication for the first time, the Court was concerned with the continued existence of the states as governmental entities, and their preservation from destruction by the national taxing power. The immunity which it implied was sustained only because it was one deemed necessary to protect the states from destruction by the federal taxation of those governmental functions which they were exercising when the Constitution was adopted and which were essential to their continued existence." Their Honours continued141: "We need not stop to inquire how far, as indicated in McCulloch v Marylandβ¦, the immunity of federal instrumentalities from state taxation rests on a different basis from that of state instrumentalities; or whether or to what degree it is more extensive. As to those questions, other considerations may be controlling which are not pertinent here. It is 137 304 US 405 at 413 (1938). 138 304 US 405 at 413 (1938). 139 11 Wall 113 (1870) [78 US 113]. 140 304 US 405 at 414 (1938). 141 304 US 405 at 415 (1938). enough for present purposes that the state immunity from the national taxing power, when recognized in Collector v Dayβ¦, was narrowly limited to a state judicial officer engaged in the performance of a function which pertained to state governments at the time the Constitution was adopted, without which no state 'could long preserve its existence.'" Then, in Graves v New York; Ex rel O'Keefe142, Collector v Day was overruled in so far as it recognised an implied constitutional immunity from federal income taxation of the salaries of officers or employees of a State government or its instrumentalities. In his concurring reasons, Frankfurter J referred143 to the earlier inclination of this Court to follow the United States doctrines regarding intergovernmental immunity, and to change that had taken place with the Engineers' Case144. Frankfurter J referred also to West v Commissioner of Taxation (NSW)145. There, Dixon J had distilled from the Engineers' Case a principle146: "that whenever the Constitution confers a power to make laws in respect of a specific subject matter, prima facie it is to be understood as enabling the Parliament to make laws affecting the operations of the States and their agencies". But this was subject to a reservation that the Engineers' Case147: "does not appear to deal with or affect the question whether the Parliament is authorized to enact legislation discriminating against the States or their agencies". It was against that background that New York v United States was decided in 1946. The Supreme Court determined that the State of New York, in selling 142 306 US 466 at 486 (1939). 143 306 US 466 at 490-491 (1939). 144 Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (1920) 28 CLR 145 (1937) 56 CLR 657. 146 (1937) 56 CLR 657 at 682. 147 (1937) 56 CLR 657 at 682. See also the remarks of Evatt J at 698-699, 701-702. concerned mineral waters taken from Saratoga Springs, owned and operated by that State, was not immune from federal sales tax imposed on such waters. The Supreme Court was "non-discriminatory tax" of general application, such as the federal sales tax laid on a particular subject-matter without regard to the personality of a taxpayer, might nevertheless be an unconstitutional exertion of federal power on the States. The concurring judgment of four members of the Court, delivered by Stone CJ, said148: circumstances in which explain the "The tax reaches the State because of the Congressional purpose to lay the tax on the subject matter chosen, regardless of who pays it. To say that the tax fails because the State happens to be the taxpayer is only to say that the State, to some extent undefined, is constitutionally immune from federal taxation. Only when and because the subject of taxation is State property or a State activity must we consider whether such a non-discriminatory tax unduly interferes with the performance of the State's functions of government. If it does, then the fact that the tax is non-discriminatory does not save it. If we are to treat as invalid, because discriminatory, a tax on 'State activities and State-owned property that partake of uniqueness from the point of view of intergovernmental relations,' it is plain that the invalidity is due wholly to the fact that it is a State which is being taxed so as unduly to infringe, in some manner, the performance of its functions as a government which the Constitution recognizes as sovereign." Earlier in his judgment, Stone CJ had observed149 that a federal tax which was non-discriminatory as to its subject-matter, might nevertheless affect a State "as to interfere unduly with the State's performance of its sovereign functions of government". The judgments in Melbourne Corporation In Melbourne Corporation, Starke J150 cited Graves v New York and Helvering and set out with approval the passage from New York v United States referred to immediately above. He went on151 to pose the "practical question", 148 326 US 572 at 588 (1946). 149 326 US 572 at 587 (1946). 150 (1947) 74 CLR 31 at 74-75. 151 (1947) 74 CLR 31 at 75. which arose whether or not the alleged interference was discriminatory, and in the end was whether the legislation or executive action in question "curtails or interferes in a substantial manner" with the exercise of constitutional power. Rich J spoke to similar effect, saying152: "Such action on the part of the Commonwealth may be invalid in two classes of case, one, where the Commonwealth singles out the States or agencies to which they have delegated some of the normal and essential functions of government, and imposes on them restrictions which prevent them from performing those functions or impede them in doing so; another, where, although the States or their essential agencies are not singled out, they are subjected to some provision of general application, which, in its application to them, would so prevent or impede them." Latham CJ referred at length to New York v United States, the reasoning in which he said corresponded to that in the Engineers' Case153. Latham CJ concluded that the American decisions supported what he understood to be the position in Australia, namely154: "Laws 'discriminate' against the States if they single out the States for taxation or some other form of control and they will also be invalid if they 'unduly interfere' with the performance of what are clearly State functions of government." Dixon J155 referred to the use in the United States of the interstate commerce power and the postal power. He compared this to the doctrine accepted in Australia that it is enough for validity that a federal law has an actual and immediate operation within a field assigned to the Commonwealth, notwithstanding that the law has a purpose of achieving some result lying within the undefined area of power reserved to the States. However, he continued156: "It is altogether another thing to apply the same doctrine to a use of federal power for a purpose of restricting or burdening the State in the 152 (1947) 74 CLR 31 at 66. 153 (1947) 74 CLR 31 at 58. 154 (1947) 74 CLR 31 at 60. 155 (1947) 74 CLR 31 at 79-80. 156 (1947) 74 CLR 31 at 80. exercise of its constitutional powers. The one involves no more than a distinction between the subject of a power and the policy which causes its exercise. The other brings into question the independence from federal control of the State in the discharge of its functions." Dixon J then said that157: "to attempt to burden the exercise of State functions by means of the power to tax needs no ingenuity, and that, no doubt, is why that power occupies such a conspicuous place in the long history both in the United States and here of the question how far federal power may be used to interfere with the States in the exercise of their powers". After referring to the demise in the United States, as in Australia, of the intergovernmental immunity doctrine, Dixon J observed158 that the Supreme Court had encountered some difficulty in formulating a test "by which the validity of a federal tax falling upon operations of the States may be determined". Dixon J considered New York v United States and said159: "What is important is the firm adherence to the principle that the federal power of taxation will not support a law which places a special burden upon the States. They cannot be singled out and taxed as States in respect of some exercise of their functions. Such a tax is aimed at the States and is an attempt to use federal power to burden or, may be, to control State action. The objection to the use of federal power to single out States and place upon them special burdens or disabilities does not spring from the nature of the power of taxation. The character of the power lends point to the objection but it does not give rise to it. The federal system itself is the foundation of the restraint upon the use of the power to control the States. The same constitutional objection applies to other powers, if under them the States are made the objects of special burdens or disabilities." It follows from the reasoning in these judgments in Melbourne Corporation that invalidity does not necessarily attend any federal law which requires a State in the performance of its functions to bear a burden or to suffer a disability to which others are not subject. That was the conclusion reached by 157 (1947) 74 CLR 31 at 80. 158 (1947) 74 CLR 31 at 80-81. 159 (1947) 74 CLR 31 at 81. Brennan J in Queensland Electricity160 after consideration of what had been said, not only by Sir Owen Dixon in Melbourne Corporation and in Victoria v The Commonwealth161, but by Williams J in the latter case162 and by Barwick CJ and Gibbs J in the Pay-roll Tax Case163. Taxation Special considerations arise where it is the reach of the federal legislative power with respect to taxation that is in question. The statement by Marshall CJ in McCulloch v Maryland164 that "the power to tax involves the power to destroy" was uttered in connection with a tax directed against the use by the United States of the Bank of the United States as one of its instruments of government. Later, speaking of the uses to which this statement had been put, Frankfurter J dubbed it a "seductive clichΓ©"165, uttered "at a time when social complexities did not so clearly reveal as now the practical limitations of a rhetorical absolute"166. So it is that, following the Pay-roll Tax Case and The Second Fringe Benefits Tax Case167, it cannot be said that the imposition upon the States of a tax of general application necessarily imposes some special burden or disability upon them so that the law may be described as one aimed at the restriction or control of the States. In the Pay-roll Tax Case, the point was explained as follows by Gibbs J168: 160 (1985) 159 CLR 192 at 233. 161 (1957) 99 CLR 575 at 609. 162 (1957) 99 CLR 575 at 638. 163 Victoria v The Commonwealth (1971) 122 CLR 353 at 375, 426 respectively. 164 4 Wheat 316 at 431 (1819) [17 US 159 at 210]. Daniel Webster had submitted in argument that "[a]n unlimited power to tax involves, necessarily, a power to destroy; because there is a limit beyond which no institution and no property can bear taxation": 4 Wheat 316 at 327 (1819) [17 US 159 at 164]. 165 Graves v New York; Ex rel O'Keefe 306 US 466 at 489 (1939). 166 New York v United States 326 US 572 at 576 (1946). 167 State Chamber of Commerce and Industry v The Commonwealth (1987) 163 CLR 168 (1971) 122 CLR 353 at 425. "Although in some cases it may be possible to show that the nature of a tax on a particular activity, such as the employment of servants, renders the continuance of that activity practically impossible, it has not been shown that the tax in the present case prevents the States from employing civil servants or operates as a substantial impediment to their employment. The tax has now been imposed upon and paid by the States for nearly thirty years, and it has not been shown to have prevented the States from discharging their functions or to have impeded them in so doing. They may have less money available for public purposes because they have to pay the tax, but that could be said in every case in which a tax is imposed on the States, and in itself it cannot amount to an impediment against State activity sufficient to invalidate the tax." It might have been thought that the constitutional text itself, particularly in s 114, dealt exhaustively with that measure of immunity conferred with respect to federal taxation. Indeed, in some respects, s 114 would protect the States against imposts in circumstances which attract the operation of the Melbourne Corporation doctrine169. Nevertheless, the emphasis by Dixon J in Melbourne Corporation170 respecting the lack of ingenuity needed to burden the exercise of State functions by use of the taxation power has led to a general acceptance that, while the States enjoy no general immunity from the exercise of that power, federal laws which do not fall within the prohibition in s 114 nevertheless may fall foul of the Melbourne Corporation doctrine. Queensland Electricity To fix separately upon laws addressed to one or more of the States and upon laws of so-called "general application", and to present the inquiry as differing in nature dependent upon the form taken by laws enacted under the one head of power, tends to favour form over substance. The substance is provided by considerations which arise from the constitutional text and structure pertaining to the continued existence and operation of the States. Further, to treat as the decisive criterion of validity the form of an impugned law with respect to taxation is to distract attention from the generality of the terms in which in s 51(ii) the power is expressed (save for the specific reference to discrimination). It is to attend insufficiently to what in this realm of discourse is the essential 169 SGH Ltd v Commissioner of Taxation (2002) 76 ALJR 780 at 789-791 [45]-[55]; 188 ALR 241 at 253-256. 170 (1947) 74 CLR 31 at 80. question in all cases. This is whether the law restricts or burdens one or more of the States in the exercise of their constitutional powers. The form taken by a particular law may, as Dawson J explained in the passage from Queensland Electricity set out at [125], assist more readily in answering that question, but in all cases the question must be addressed. In Queensland Electricity171, Mason J may have taken a contrary view. His Honour said that the principle applied in Melbourne Corporation was then well settled and that it consists of two elements: "(1) the prohibition against discrimination which involves the placing on the States of special burdens or disabilities; and (2) the prohibition against laws of general application which operate to destroy or curtail the continued existence of the States or their capacity to function as governments: Victoria v Australian Building Construction Employees' and Builders Labourers' Federation172. The second element of the prohibition is necessarily less precise than the first; it protects the States against laws which, complying with the first element because they have a general application, may nevertheless produce the effect which it is the object of the principle to prevent." However, that is to be read with an earlier passage in that judgment. Mason J, with reference to what had been said by Dixon J in the Banking Case173 concerning laws of general application, there said174: "Plainly, his Honour was speaking of a law which, though referable to a head of legislative power, is, by reason of its impact on the States and their fundamental constitutional conception which underlies the prohibition against discrimination." inconsistent with functions, the That "fundamental constitutional conception" has proved insusceptible of precise formulation. Nevertheless, an understanding of it is essential lest propositions such as those expressed by Mason J in Queensland Electricity take on, by further judicial exegesis, a life of their own which is removed from the constitutional fundamentals which must sustain them. 171 (1985) 159 CLR 192 at 217. 172 (1982) 152 CLR 25 at 93. 173 (1948) 76 CLR 1 at 338. 174 (1982) 159 CLR 192 at 216. The later decisions Some guidance as to the content of the limited State immunity is provided by the later decisions in this Court. In The Tasmanian Dam Case175, Mason J and Brennan J pointed out that the concern was with the capacity of a State to function as a government rather than interference with or impairment of any function which a State government may happen to undertake. Later, in the Native Title Act Case176, it was said in the joint judgment of six members of the Court that the relevant question for the application of the Melbourne Corporation doctrine was not whether Commonwealth law effectively restricted State powers or made their exercise more complex or subjected them to delaying procedures. Their Honours continued177: "The relevant question is whether the Commonwealth law affects what Dixon J called the 'existence and nature' of the State body politic. As the Melbourne Corporation Case illustrates, this conception relates to the machinery of government and to the capacity of its respective organs to exercise such powers as are conferred upon them by the general law which includes the Constitution and the laws of the Commonwealth178. A Commonwealth law cannot deprive the State of the personnel, property, goods and services which the State requires to exercise its powers and cannot impede or burden the State in the acquisition of what it so requires." Later in that judgment179, their Honours distinguished between a federal law which impaired capacity to exercise constitutional functions and one which merely affected "the ease with which those functions are exercised". 175 The Commonwealth v Tasmania (1983) 158 CLR 1 at 140, 213-215. See also the in Queensland Electricity Commission v The Commonwealth (1985) 159 CLR 192 at 216-217. 176 (1995) 183 CLR 373 at 480. 177 (1995) 183 CLR 373 at 480. 178 Constitution, Covering Clause V. 179 (1995) 183 CLR 373 at 481. In Melbourne Corporation180, Dixon J spoke of the "restriction or control of the State β¦ in respect of the working of the judiciary", and Williams J of laws seeking to direct the States as to the manner of exercise of judicial governmental functions. Later, in Australian Education Union181, the joint judgment identified the State courts as an essential branch of the government of the State. In the present case, the question thus becomes whether the two laws with respect to taxation, the Protected Funds Imposition Act and the Protected Funds Assessment Act, restrict or control the States, in particular New South Wales and Victoria, in respect of the working of the judicial branch of the State government. Unlike the situation in the Pay-roll Tax Case and The Second Fringe Benefits Tax Case, these laws do not impose a taxation liability upon the States themselves. It is the plaintiffs who are taxed. In Registrar of the Accident Compensation Tribunal v Federal Commissioner of Taxation182, Mason CJ, Deane, Toohey and Gaudron JJ distinguished, for the application of the Melbourne Corporation doctrine, a federal taxation law which, whilst it imposed tax upon a State officer, did not "affect any interest or purpose of the State". In that case this was because the Registrar was taxed in his capacity as trustee for private citizens. Similar considerations, where the tax is imposed not upon the State itself but upon officers or employees thereof, were considered in the United States in the period when Melbourne Corporation was decided. In Helvering183, the Supreme Court spoke of a State function which was important enough to demand immunity from a tax upon the State itself but which did not extend to a tax which might well be substantially entirely absorbed by private persons; there, the burden on the State was "so speculative and uncertain" as not to warrant restriction upon the federal taxing power. 180 (1947) 74 CLR 31 at 80, 99-100 respectively. See, as to the State courts in the United States, Gregory v Ashcroft 501 US 452 (1991). 181 (1995) 184 CLR 188 at 229. 182 (1993) 178 CLR 145 at 172-173. 183 304 US 405 at 419-420 (1938). See also Wilmette Park District v Campbell 338 US 411 at 420 (1949); United States v City of Detroit 355 US 466 at 469 (1958); South Carolina v Baker 485 US 505 at 523, 532 (1988); Davis v Michigan Department of Treasury 489 US 803 at 811-812 (1989); Barker v Kansas 503 US 594 at 597-598, 605-606 (1992); Jefferson County v Acker 527 US 423 at 436-439, However, as Dixon CJ pointed out in the Second Uniform Tax Case184, Melbourne Corporation itself was an instance where a restriction was imposed not on the State or its servants but on others, yet the federal law impermissibly interfered with the governmental functions of a State. Section 48 of the Banking Act imposed a prohibition upon banks but was effectual to deny to the States the use of the banks and that was the object of the law185. The joint judgment of six members of the Court in Australian Education Union186 is of central importance for the present case, in particular for two propositions. They are that (a) it is "critical to a State's capacity to function as a government" that it retain ability to determine "the terms and conditions" on which it engages employees and officers "at the higher levels of government", and (b) "Ministers, ministerial assistants and advisers, heads of departments and high level statutory office holders, parliamentary officers and judges would clearly fall within this group". One result, with which Australian Education Union was immediately concerned, would protect the States to some degree from the exercise by the Commonwealth Industrial Relations Commission of power under federal law to fix minimum wages and working conditions in respect of persons to whom the federal law otherwise would extend. Another result is to support the foundation for the case made by the first plaintiff. Conclusion respecting Melbourne Corporation doctrine The Protected Funds Imposition Act and the Protected Funds Assessment Act are invalid in their application to the first plaintiff. The NSW Pensions Act is the only law of that State listed in Sched 14 to the Income Tax Regulations. With respect to that State, the issue for decision here fixes upon that statute as an exercise by the legislature of its functions respecting the judicial branch of its government. It may be added that the States, with the exception of Tasmania, have non-contributory judicial pension schemes under legislation listed in Sched 14. 184 The State of Victoria v The Commonwealth (1957) 99 CLR 575 at 610. 185 (1947) 74 CLR 31 at 62, 66-67, 75, 84, 100-101. 186 (1995) 184 CLR 188 at 233. See also the Industrial Relations Act Case (1996) 187 CLR 416 at 498. As a general proposition, it is for the State of New South Wales, as for the other States, to determine the terms and conditions upon which it appoints and remunerates the judges of its courts. The concept of remuneration includes provision of retirement and like benefits to judges, spouses and other dependants. There is, as the Supreme Court of Canada pointed out in R v Beauregard187, "a close relationship between salaries and pensions", both being "remunerative benefits". The State of New South Wales chose to discharge its responsibilities for the establishment and maintenance of its judicial branch by providing the unfunded and non-contributory scheme in the NSW Pensions Act. In R v Beauregard, the Supreme Court of Canada, speaking of the Parliament of Canada which has responsibilities in respect of both federal and Provincial superior court judges, said188: "In fulfilling its constitutional obligation to establish salaries and pensions for superior court judges, it is reasonable that Parliament would ask: what is an appropriate total benefit package and what components should constitute the package? Salary and pension must be two of the components and Parliament must consider the relationship between them." Other methods for the provision of such remuneration might have been chosen by the New South Wales legislature. Beauregard found valid a choice by the Parliament of Canada to change the basis of superior court judges' pensions from non-contributory to contributory. New South Wales might have chosen a funded scheme which would generate State property on which the Commonwealth was forbidden by s 114 of the Constitution to impose any tax. Rather than pursue that or some other course, the legislature made provision for a non-contributory scheme with payment of benefits out of the Consolidated Fund of the State. The method so selected by the State legislature affected the terms and conditions for the engagement by the executive branch of judges and the organisation and working of the third branch of government of the State. In respect of that State legislative choice, the federal laws in contention impose no fiscal burden directly upon the State. It is the first plaintiff, not the State, who is the taxpayer. Does the absence of that immediate fiscal burden upon the State compel the conclusion that there has been but a "speculative and uncertain"189 impairment by the federal law of the exercise by the State of its 187 [1986] 2 SCR 56 at 83. 188 [1986] 2 SCR 56 at 83-84. 189 cf Helvering v Gerhardt 304 US 405 at 420 (1938). freedom to discharge as it decides its constitutional functions respecting the remuneration of the judicial branch? Does the federal law merely affect the ease of the working of the judicial branch?190 The provision of secure judicial remuneration at significant levels serves to advantage and protect the interest of the body politic in several ways. Secure judicial remuneration at significant levels assists, as the United States Supreme Court has emphasised191, to encourage persons learned in the law, in the words of Chancellor Kent written in 1826192, "to quit the lucrative pursuits of private business, for the duties of that important station". It also, as the Victorian Attorney-General indicated when introducing legislation193 to provide some relief against the effects of the surcharge legislation, assists the attraction to office of persons without independent wealth and those who have practised in less well paid areas194. Further, the Supreme Court of the United States has stressed195 that such provision helps "to secure an independence of mind and spirit necessary if judges are 'to maintain that nice adjustment between individual rights and governmental powers which constitutes political liberty'196". The Supreme Court went on197 to refer to the statement by Chief Justice John Marshall that an ignorant or dependent judiciary would be the "greatest scourge β¦ ever inflicted". Views may vary from time to time as to the relevant importance of these considerations and the measures to give effect to them. But in the constitutional framework in this country these are matters, respecting State judges, for That constitutional framework also determination by State legislatures. 190 cf Native Title Act Case (1995) 183 CLR 373 at 481. 191 United States v Hatter 532 US 557 at 568 (2001). 192 Commentaries on American Law, (1826), vol 1, Lecture XIV at 276. 193 Judicial and Other Pensions Legislation (Amendment) Act 2001 (Vic). 194 Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 3 May 2001 at 195 United States v Hatter 532 US 557 at 568 (2001). 196 Wilson, Constitutional Government in the United States, (1911) at 143. 197 United States v Hatter 532 US 557 at 569 (2001). constrains those legislatures, in particular, by requiring them to take as they find federal laws of "general application" as part of the system enjoyed by the whole community198. in O'Malley v Woodrough199: the statement by Frankfurter J Hence "To subject them to a general tax is merely to recognize that judges are also citizens, and that their particular function in government does not generate an immunity from sharing with their fellow citizens the material burden of the government whose Constitution and laws they are charged with administering." identified at However, that is not the present case. Section 5 of the Protected Funds Assessment Act speaks of "high-income members of constitutionally protected superannuation funds". They are taxed in a fashion which differs from that required by the Surcharge Imposition Act and the Surcharge Assessment Act. A law taxing them is not in the sense of the authorities a law of "general application" which, with reference to the classification by Dixon J, falls into category (a) Those persons whose surchargeable contributions in respect of a "defined benefit superannuation scheme" are worked out by reference to the notional surchargeable contributions factor and other elements specified in the second half of s 9, are a particular group of State employees and officers. Their selection for attention by the federal legislature as "high-income members" of the non-contributory unfunded schemes in question suggests that, for the purposes of the Melbourne Corporation doctrine, they are those employees and officers "at the higher levels of government" spoken of in Australian Education Union200. At all events, there is no doubt that the first plaintiff is such an individual. The Commonwealth suggests that the treatment in special legislation of constitutionally protected funds, both funded and unfunded, as appear respectively in the first and second half of the definition in s 9 of the Protected Funds Assessment Act, was dictated by the operation of the Constitution itself. It is said that to treat members of constitutionally protected superannuation funds differently to members of non-constitutionally protected superannuation funds by reference to a relevant distinction, the operation of s 114 of the Constitution, is not an impermissible discrimination. It further is submitted that, to the extent that a member of a constitutionally protected fund does not receive from the State 198 Bank of NSW v The Commonwealth (1948) 76 CLR 1 at 337. 199 307 US 277 at 282 (1939). 200 (1995) 184 CLR 188 at 233. concerned a lump sum from which the surcharge may be deducted, this is but a consequence of the way in which the benefits of members are designed under State law. These submissions are not determinative of the application of the Melbourne Corporation doctrine. It may be conceded, as indicated earlier at [123]-[124], that, though differential treatment may be indicative of infringement of the limitation upon legislative power with which the doctrine is concerned, it is not, of itself, sufficient to imperil validity. What is more important for present purposes is that it is no answer to a case of alleged invalidity to assert that the federal law in question takes its form from a perceived need to escape the peril of invalidity presented by another constitutional restraint upon federal legislative power. In its application to the first plaintiff, question 2(a) of the case stated asks whether either or both the Protected Funds Imposition Act and the Protected Funds Assessment Act are invalid on the ground that they so discriminate against New South Wales or so impose a particular disability or burden upon the operations and activity of that State as to be beyond the legislative power of the Commonwealth. That issue may be narrowed by asking whether that result comes about by a sufficiently significant impairment of the exercise by the State of its freedom to select the manner and method for discharge of its constitutional functions respecting the remuneration of the judges of the courts of the State. That requires consideration of the significance for the government of the State of its legislative choice for the making of provision for judicial remuneration. Having regard to what is said earlier in these reasons, particularly with reference to decisions of the Supreme Court of the United States and the Supreme Court of Canada, jurisdictions which share a common constitutional tradition with this country, that significance is to be taken as considerable. In The Second Fringe Benefits Tax Case201, in a passage which is no less significant for its presence in a dissenting judgment, given the later statement in Australian Education Union202 referred to at [152], Brennan J observed: "The essential organs of government β the Parliament, the Ministry and the Supreme Court β are the organs on which the 'existence and nature' of the body politic depends. (I mention only the Supreme Court, for that is the court of general jurisdiction in which, the Governor, 201 (1987) 163 CLR 329 at 362-363. 202 (1995) 184 CLR 188 at 233. subject to the jurisdiction of this Court, the laws of the State are finally interpreted and the constitutional and administrative law of the State is applied.) The existence and nature of the body politic depends on the attendance to their duties of the officers of the essential organs of The government and their capacity to exercise their functions. emoluments which a State provides to the officers of the essential organs of government ensure or facilitate the performance by those organs of their respective functions". The circumstances that judicial pensions do not require contributions but are fixed as a proportion of the remuneration of a serving judge and are to be paid at the full rate only upon a substantial period of service as well as attainment of a minimum age, indicates the importance attached by legislatures to such schemes in the remuneration of the judicial branch. There then is posed the "practical question" identified by Starke J in Melbourne Corporation203. This, in the end, is whether, looking to the substance and operation of the federal laws, there has been, in a significant manner, a curtailment or interference with the exercise of State constitutional power. The first plaintiff has been assessed to surcharge on surchargeable contributions fixed at more than 61 per cent of his annual remuneration. If the first plaintiff were to meet such imposts as they are imposed year by year during the tenure of his office, he would be chancing fortune to the degree indicated earlier in these reasons. More immediately to the point, to a significant degree, the interest of the State in providing an adequate level of remuneration would have been denied. Further, the provisions for accumulation of indebtedness supply a disincentive to the first plaintiff to meet the public interest of the State in retaining his judicial services for the maximum possible term. This is because the "notional surchargeable contributions factor" is zero for each year after the earliest retirement date, but upon the surcharge debt interest will continue to accrue until retirement and receipt of the pension. If the first plaintiff does serve the public interest in this way by remaining in office until final retirement age, then the interest of the State in providing remuneration at what it regards as an appropriate level is again undermined, here by the imposition of a very large lump sum debt. The Commonwealth, in its submissions, urges against speculation upon what it says are the indirect effects of its laws upon the government of the State. However, one tendency of the federal laws readily apparent from their legal 203 (1947) 74 CLR 31 at 75. operation is to induce the State to vary the method of its judicial remuneration. The liberty of action of the State in these matters, that being an element of the working of its governmental structure, thereby is impaired. No doubt there is no direct legal obligation imposed by the federal laws requiring such action by the State. But those laws are effectual to do so, as was the Banking Act. The Commonwealth referred to the well-known judgment of Kitto J in Fairfax v Federal Commissioner of Taxation204. His Honour pointed out, with reference to Melbourne Corporation, that the taxation power is susceptible to employment to achieve an end other than the immediate recovery of revenue and that such an end might otherwise lie outside the area of federal power. That may readily be conceded. Breckler205, to which reference has been made at [59], is a recent illustration of such a use of the taxation power. However, the passage in the judgment of Dixon J in Melbourne Corporation to which Kitto J referred in the critical portion of his judgment in Fairfax, did not stand alone. Dixon J went on immediately thereafter to say that it was206: "altogether another thing to apply the same doctrine to a use of federal power for a purpose of restricting or burdening the State in the exercise of its constitutional powers". Earlier in these reasons at [141], there is set out a passage from the judgment of Gibbs J in the Pay-roll Tax Case207. His Honour referred to the absence over many years of indications that the States had been impeded by the pay-roll tax in the discharge of their functions. The present case stands differently. It discloses a state of affairs well beyond the speculative and the uncertain208. In New South Wales there is now the Judges' Pensions Amendment Act 1998 (NSW) ("the 1998 Act"). As the long title to that statute discloses, it was enacted to amend the NSW Pensions Act so as to provide for the commutation of pensions under that statute for a particular purpose. That purpose was the payment of the superannuation contributions surcharge. 204 (1965) 114 CLR 1 at 11-13. 205 (1999) 197 CLR 83. 206 (1947) 74 CLR 31 at 80. 207 (1971) 122 CLR 353 at 425. 208 cf Helvering v Gerhardt 304 US 405 at 420 (1938). In the Second Reading Speech in the Legislative Council on the bill for the 1998 Act, the Attorney-General said209: "The bill will enable a retired judge or other person entitled to be paid a pension to elect to have part of the pension commuted for the purpose of payment of the superannuation contributions surcharge. A spouse or eligible child, who is entitled to a reversionary pension under the Act, may also make an election in respect of a liability of a judge who has died in office or a retired judge who died before the original time for making an election ended. The bill provides that an election may relate to the whole or part of any such liability and must be made not later than two months after the liability arises, or within such further period as the Minister may allow. The bill also provides that a pension may be commuted only to the extent necessary to meet the liability for the superannuation contributions surcharge. β¦ If a lump sum is paid, the bill provides for the pension and any reversionary pensions payable to a spouse or eligible child under the Act to be reduced." The Attorney-General concluded210: "The amendments proposed are essential to provide judges and other persons entitled to a pension or reversionary pension under the Act with a mechanism to pay the superannuation contributions surcharge from the benefit they are entitled to receive." The occasion for the provision of that mechanism thus was supplied solely by the operation of the federal legislation; the provision of the mechanism was a response which changed what had been the legislative scheme respecting the terms and conditions for the remuneration of State judges, in particular as indicated in the NSW Pensions Act. The Court was referred to legislation in other States responding in a similar fashion to the same stimulus, in particular the Judicial and Other Pensions Legislation (Amendment) Act 2001 (Vic). The conclusion reached is that, in its application to the first plaintiff, the Protected Funds Imposition Act and the Protected Funds Assessment Act are 209 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 2 June 210 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 2 June invalid on the ground of the particular disability or burden placed upon the operations and activities of New South Wales. The reasoning for that conclusion would apply also to the application of the legislation to the judges of other State courts as members of unfunded non-contributory pension schemes resembling that provided by the NSW Pensions Act. Nothing said in these reasons indicates any conclusion respecting the position of other members of constitutionally protected superannuation funds to which the federal legislation applies. Other immunity issues It is unnecessary to decide the case upon the other submissions in which in varying formulations reliance was placed upon what was said to flow from Melbourne Corporation and later decisions of this Court. The first of these has been identified at [123]. The position of the first plaintiff may be compared with and contrasted to that of an officer or employee of a private sector corporation with an agreement for an unfunded annuity or lump sum on retirement where the SIS Act, the Surcharge Assessment Act and the Surcharge Imposition Act do not apply. The taxation treatment of moneys so paid will attract no special taxation regime such as that to which the first plaintiff is subjected. In making provision for its officers and employees, the States must take the federal taxation system as it finds it. But does the legislation here in question isolate the States from that general system and, for that reason alone, so place them under a particular disability, discriminatory in this special sense, sufficient to attract the operation of the Melbourne Corporation doctrine? However, as was indicated at [139], invalidity does not necessarily attend a federal law which requires a State to bear a burden or suffer a disability to which others are not subject. It is unnecessary to determine whether any different outcome would follow if the appropriate comparator was taken not from the private sector but by looking to the position of the federal judges described at Secondly, Western Australia and South Australia emphasised the requirements of the Protected Funds Assessment Act and Regulations thereunder ("SR 371 of 1997")211 for the performance by an "eligible actuary" of certain functions in the calculation of the "notional surchargeable contributions factor" for s 9(5) thereof; where the "superannuation (unfunded defined benefits) provider" is a State, that actuary necessarily will be an officer or employee of the 211 Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Regulations 1997. State or one engaged by the State for the purpose. That was said to be an interference of the kind considered in Australian Education Union212. Further, South Australia emphasised that the actuarial calculations served only the purposes of federal law. Reference was made to narrowly divided decisions of the United States Supreme Court213 supporting an implication in the United States Constitution which would restrain the unilateral imposition by a federal law upon State officials of functions under that federal law. A contrast was drawn with the express provisions of Art 258 of the Indian Constitution for the making of such laws by the Union Parliament214. In Australia, there are a number of express provisions imposing various federal duties and functions upon State officers and institutions, including Governors (ss 7, 12, 15), Parliaments (ss 9, 15) and courts (s 77(iii)). Section 120, to which reference has been made at [114], obliges the States to receive and hold federal prisoners. 212 (1995) 184 CLR 188 at 232-233. 213 New York v United States 505 US 144 (1992); Printz v United States 521 US 898 (1997); Reno v Condon 528 US 141 (2000); Tribe, American Constitutional Law, 3rd ed (2000), vol 1 at 878-894. 214 Article 258 states: "(1) Notwithstanding anything in this Constitution, the President may, with the consent of the Government of a State, entrust either conditionally or unconditionally to that Government or to its officers functions in relation to any matter to which the executive power of the Union extends. (2) A law made by Parliament which applies in any State may, notwithstanding that it relates to a matter with respect to which the Legislature of the State has no power to make laws, confer powers and impose duties, or authorise the conferring of powers and the imposition of duties, upon the State or officers and authorities thereof. (3) Where by virtue of this article powers and duties have been conferred or imposed upon a State or officers or authorities thereof, there shall be paid by the Government of India to the State such sum as may be agreed, or, in default of agreement, as may be determined by an arbitrator appointed by the Chief Justice of India, in respect of any extra costs of administration incurred by the State in connection with the exercise of those powers and duties." The exercise of Commonwealth legislative power validly may burden the States in similar fashion. The upholding in the First Uniform Tax Case215 of the validity of the conscription of State public servants by the Income Tax (War- Time Arrangements) Act 1942 (Cth) provides a striking illustration of the use of the defence power. On the other hand, it was decided in The Commonwealth v New South Wales216 that the power in s 51(xxxi) did not support a law requiring registration under State law of land compulsorily acquired by the Commonwealth without compliance by it with the conditions imposed by State law. That reasoning is consistent with that of Dixon J in the Banking Case217, to which reference is made at [130]. In the end, the complaint here is that consistently with, and perhaps in development of, the reasoning in Australian Education Union, it is critical to the constitutional integrity of the States that they alone have the capacity to give directions to their officials and determine what duties they perform. That is a large proposition and best left for another day. Arbitrary exactions? It may well be said of the federal laws respecting superannuation enacted over the last 20 years that collectively and individually they fall well short of the Benthamite ideal referred to in Byrnes v The Queen218. This advocates the drafting of laws which mark out the line of the citizen's conduct by visible directions rather than turn the citizen loose "into the wilds of perpetual conjecture". Further, the plaintiffs gave colour to their submissions by emphasising what they saw as the harsh or unreasonable incidence of the tax imposed upon them by reference both to its subject-matter and its objects. But, as the plaintiffs recognised, with reference to Truhold219, such matters do not go to validity. However, in MacCormick220, one of the characteristics which were said by the majority to bring the impost there in question within the description of a tax 215 South Australia v The Commonwealth (1942) 65 CLR 373. 216 (1923) 33 CLR 1 at 28, 54. 217 (1948) 76 CLR 1 at 337. 218 (1999) 199 CLR 1 at 13 [11]. 219 (1985) 158 CLR 678 at 684. 220 (1984) 158 CLR 622 at 639. for the purposes of s 51(ii) of the Constitution was that it was "not arbitrary". In apparent elaboration, their Honours continued221: "Liability is imposed by reference to criteria which are sufficiently general in their application and which mark out the objects and subject-matter of the tax: see Federal Commissioner of Taxation v Hipsleys Ltd222." Further explanation of this passage was given in the joint judgment in Truhold223. The notion of "arbitrary" imposts was said there to be: "a reference to the fact that liability can only be imposed by reference to ascertainable criteria with a sufficiently general application and that the tax cannot lawfully be imposed as a result of some administrative decision based upon individual preference unrelated to any test laid down by the legislation". However, in Truhold, the Court went on to reject a submission that the formulation by the Commissioner of an opinion respecting the criteria of liability rendered the imposition an arbitrary one. So much already followed from what had been said in Giris Pty Ltd v Federal Commissioner of Taxation224. The notions involved here are linked with the impermissibility of an "incontestable tax"225. In that regard, s 20 of the Protected Funds Assessment Act deals with objections against assessment and picks up the general provisions of Pt IVC (ss 14ZL-14ZZS) of the Taxation Administration Act 1953 (Cth). Division 5 thereof (ss 14ZZN-14ZZS) leads to the Federal Court. The plaintiffs complain that different actuaries, all applying SCR 97/1 and SR 371 of 1997, can reasonably differ in working out the amount of their surchargeable contributions under s 9 of the Protected Funds Assessment Act. That is because the "eligible actuary" identified in s 9(5) will be making assumptions and judgments on such variables as mortality rates, retirement age, 221 (1984) 158 CLR 622 at 639. 222 (1926) 38 CLR 219 at 236. 223 (1985) 158 CLR 678 at 684. 224 (1969) 119 CLR 365 at 372-373, 379, 380-381, 383-385. 225 MacCormick v Federal Commissioner of Taxation (1984) 158 CLR 622 at marital status, age differences between spouses and the like. However, the various actuarial assumptions selected by SCR 97/1 supply "the method" mandated by s 9(5). The submissions by the plaintiffs are foreclosed by what was said by "There is no need to cite authority for the general proposition that the operation of a law with respect to taxation may validly be made to depend upon the formation of an administrative opinion or satisfaction upon a question, eg, as to the existence of a fact or circumstance, or as to the quality (eg, the reasonableness) of a person's conduct, or even as to the likelihood of a consequence of the operation of the law in an individual case, as in s 265 [of the ITAA] where the question is whether the exaction of an amount of tax will entail hardship." In such situations there has been no "abdication" of legislative authority227. This objection to validity fails. Section 55 of the Constitution The first paragraph of s 55 states: "Laws imposing taxation shall deal only with the imposition of taxation, and any provision therein dealing with any other matter shall be of no effect." It was this provision which, in Australian Tape Manufacturers Association Ltd v The Commonwealth228, brought down the blank tape levy imposed by the Copyright Amendment Act 1989 (Cth). It is the stricture imposed by the first limb of the second paragraph of s 55 which is invoked by the plaintiffs here. The second paragraph states: "Laws imposing taxation, except laws imposing duties of customs or of excise, shall deal with one subject of taxation only; but laws 226 (1969) 119 CLR 365 at 379. 227 cf Sawer, "The Separation of Powers in Australian Federalism", (1961) 35 Australian Law Journal 177 at 186-187. 228 (1993) 176 CLR 480. imposing duties of customs shall deal with duties of customs only, and laws imposing duties of excise shall deal with duties of excise only." (emphasis added) It was with the requirement of the second limb that laws imposing duties of excise deal with duties of excise only that the Court was concerned in Mutual Pools & Staff Pty Ltd v Federal Commissioner of Taxation229. That decision was relied upon in particular to support the attack in this case but the decision was concerned with the second, not the first, limb. As indicated at [83], s 4 of the Protected Funds Imposition Act imposes that tax identified as the superannuation contributions surcharge and s 5 prescribes the rates. However, in accordance with what was said in The Second Fringe Benefits Tax Case230 to be long-standing Parliamentary practice, it is the Protected Funds Assessment Act, not the other statute, which specifies those who are liable to pay the tax and defines the circumstances in which liability to pay it arises. For this reason, s 3 of the Protected Funds Imposition Act states that expressions used in that statute which are defined by the Protected Funds Assessment Act have the same meanings. In considering the present matter, reference should be made to the 1999 Amendment Act. Schedule 2 thereof amended, with effect from 7 December 1997231, s 9 of the Protected Funds Assessment Act to take the form considered throughout this judgment. In The Second Fringe Benefits Tax Case, reference was made in the joint judgment232 to statements by Isaacs J in Harding v Federal Commissioner of Taxation233 and by Dixon J in Resch v Federal Commissioner of Taxation234 for several propositions. They are: in construing the expression "subject of taxation" in s 55 it is not to be supposed that there exists some recognised classification of taxes according to subject-matter; 229 (1992) 173 CLR 450. 230 (1987) 163 CLR 329 at 344. 231 Section 2(3) of the 1999 Amendment Act so provided. 232 (1987) 163 CLR 329 at 343-344. 233 (1917) 23 CLR 119 at 135. 234 (1942) 66 CLR 198 at 223. (iii) s 55 is not directed to categories concerned with economic consequences or operation upon the creation, transfer and devolution of legal rights; rather, s 55 is concerned with political relations and contemplates "broad distinctions between possible subjects of taxation based on common understanding and general conceptions, rather than on any analytical or logical classification"235; it is for the legislature to choose its own subjects of taxation unfettered by existing nomenclature or by categories adopted for other purposes; and the test is whether, looking at the subject of taxation selected by the Parliament, it can fairly be regarded as a unit rather than a collection of matters necessarily distinct and separate. It was with these matters in mind, that it was said in the joint judgment in The Second Fringe Benefits Tax Case236: "Although the Court is bound to insist on compliance with the requirements of s 55 so that the section achieves its purpose of enabling the Senate to confine its consideration in each case to a taxing statute dealing with a single subject of taxation, in applying the test stated above, the Court will naturally give weight to the Parliament's understanding that its Tax Act deals with one subject of taxation only. This is because the application of the test involves what is in substance a question of fact or value judgment. The Court should not resolve such a question against the Parliament's understanding with the consequence that the statute is constitutionally invalid, unless the answer is clear: see National Trustees, Executors & Agency Co of Australasia Ltd v Federal Commissioner of Taxation237; Harding238; Resch239." 235 Resch v Federal Commissioner of Taxation (1942) 66 CLR 198 at 223. 236 (1987) 163 CLR 329 at 344. 237 (1916) 22 CLR 367 at 378-379. 238 (1917) 23 CLR 119 at 134-136. 239 (1942) 66 CLR 198 at 211. The conclusion the Court reached with respect to the legislation at stake in The Second Fringe Benefits Tax Case is instructive. The Court rejected the submission that the principal subject of the tax imposed was fringe benefits provided by private employers to employees so that in imposing a liability in respect of benefits otherwise provided the statute dealt with more than one subject of taxation. After considering the framework of the legislation, Mason CJ, Wilson, Dawson, Toohey and Gaudron JJ concluded240: "Clearly enough the legislation has been framed on the footing that there is but a single subject of taxation, formulated according to a broad conception of what constitutes fringe benefits. That conception embraces benefits, not being salary or wages, referable to the employment relationship, whether provided by the employer or not and whether received by the employee or not. So understood the legislation presented for the consideration of each House of the Parliament a 'unity of subject matter' rather than distinct and separate subjects of taxation." The Attorney-General for New South Wales, in submissions supporting the plaintiffs on these issues, pointed out that s 4 of the Protected Funds Imposition Act was expressed to impose the "superannuation contributions surcharge" upon "a member's surchargeable contributions", terms for the meaning of which it was necessary to turn to the Protected Funds Assessment Act, and in particular to the detailed treatment of "surchargeable contributions" in It was emphasised that the definition has two halves. In relation to contributory funded schemes, the surchargeable contributions are identified in terms reflecting amounts paid for or by a member to or otherwise credited or attributed to an account for the member by a superannuation provider. The other half of the definition deals with unfunded non-contributory arrangements identified as defined benefits superannuation schemes. Here there are no "contributed amounts", no fund into which contributions might be made and rather than rights of due administration of a fund there is a statutory entitlement, in the case of the first plaintiff, to the benefits provided by the NSW Pensions Act out of Consolidated Revenue. The submissions proceeded by saying that the Parliament has sought to unite these two different arrangements by employment of the "statutory fiction" of the "notional surchargeable contributions factor" and that there has been an attempt to impose tax upon two distinct activities. The first is the settlement of 240 (1987) 163 CLR 329 at 349. funds by contributions in what might be called ordinary superannuation funds. The second is a tax on the derivation of income by persons who are entitled under certain non-contributory schemes, the rate of tax being determined by the "notional surchargeable contributions factor". Something plainly not a contribution to a superannuation fund, namely a percentage of deemed remuneration, is classified as a surchargeable contribution. In Resch, Dixon J had said that the practice, among other bodies, of colonial legislatures might serve as a guide in the determination of whether a provision of a given kind was to be regarded as falling within a particular subject-matter241. With that in mind, New South Wales referred to the distinct treatment in colonial taxing legislation of income on the one hand and gifts and settlements on the other. What, however, perhaps is of more significance for present purposes is the wide scope, given by the Court in Harding242, with reference to the long history in imperial and colonial legislation, to "income" as a subject of taxation. The incidence and rate of the surcharge is conditioned by the quantum of the adjusted taxable income of the member for any financial year in question. If the relevant condition as to quantum be satisfied, then the surcharge applies at a particular percentage of the surchargeable contributions for the member. In working out those surchargeable contributions, s 9 of the Protected Funds Assessment Act applies with the sharp distinctions to which the first plaintiff and his supporters point. However, the operation of these provisions is premised upon the taxpayer answering the description of a "member". That is defined in s 38 of the statute to identify members of "a constitutionally protected superannuation fund". This, as indicated earlier in these reasons, directs the reader to the State legislation listed in Sched 14. That legislation embraces a range of schemes in the public sector. The object of the Protected Funds Assessment Act, as indicated in s 5 thereof, was to collect an impost imposed upon those members of "constitutionally protected superannuation funds" who were "high-income members". The statutory notion of "contributions" reflected the range of the schemes provided for in the State legislation. In the case of non-contributory schemes, it was found in the benefit measured by contributed amounts. In the case of other schemes, being defined benefits superannuation schemes, it was found in a notional benefit 241 (1942) 66 CLR 198 at 223. 242 (1917) 23 CLR 119. identified in part by the actuarial computations to which reference has been made. The legislation has been framed on the footing that there is but a single subject of taxation, formulated by reference to the quantum of adjusted taxable income and the value to be attributed to benefits accruing or deemed to accrue to the member in each financial year. That is sufficient for the first limb of the second paragraph of s 55. Has it been established, against the Commonwealth, that the question, whether there are necessarily distinct and separate subjects of taxation, should receive a clear and negative answer243? Those challenging validity on this ground have not made out their case. The distinction upon which they rely to delineate two subjects of taxation is an example of the identification of categories by legal criteria concerned closely with the administration of legal rights; to such considerations, Dixon J said in Resch244, s 55 is not directed. Reliance upon Mutual Pools was misplaced. It was the second limb of the second paragraph of s 55 which was considered in Mutual Pools. This presents issues of greater specificity. The decision in Mutual Pools turned upon whether a tax imposed in relation to something other than goods might ever constitute a duty of excise. The duty in question was imposed upon something which formed part of the realty, namely a constructed swimming pool. It was pointed out in the joint judgment245 that, upon it being accepted that a tax on land or something forming part of it could not be an excise, the outcome was obvious. The argument for invalidity by reason of non-compliance with s 55 of the Constitution should not be accepted. Conclusions Question 1(a) should be answered "Yes", and question 1(b) should be answered "No". Question 2 should be answered by stating that the legislation referred to is invalid in its application to the first plaintiff on the ground that it places a particular disability or burden upon the operations or activities of the State of 243 The Second Fringe Benefits Tax Case (1987) 163 CLR 329 at 344, 350. 244 (1942) 66 CLR 198 at 223. 245 (1992) 173 CLR 450 at 454. New South Wales so as Commonwealth. to be beyond the legislative power of the Question 3 should be answered that the costs of the plaintiffs, save for those otherwise dealt with by order, should be borne by the Commonwealth. McHugh 205 McHUGH J. The first issue in this case stated under s 18 of the Judiciary Act 1903 (Cth) is whether the plaintiffs are liable under two federal laws to pay a respect of "surchargeable surcharge" "superannuation contributions contributions". If they do, a further question arises as to whether those laws validly apply to the plaintiffs. The joint judgment of Gaudron, Gummow and Hayne JJ states the material facts and summarises the relevant legislation. It is unnecessary for me to repeat them. I agree with their Honours that the federal laws, properly construed, apply to the first plaintiff but not the second plaintiff. But, for slightly different reasons, in my opinion those laws cannot validly apply to the first plaintiff. That is because he is a judge of the Supreme Court of New South Wales and the federal laws burden the constitutional functions of the State of New South Wales, a burden that the Commonwealth Constitution prohibits. Federalism A federal system of government involves a distribution of legislative power between a central and regional governments with the result that no government has the same legislative authority as a government in a unitary system of government246. The sovereignty of a federated nation "is divided on a territorial basis"247. What a legislature can do under a unitary system of government may be denied to either the central or regional governments and, sometimes as s 92 of our Constitution shows, to both the central and regional governments. As Dicey pointed out248: "The object for which a federal state is formed involves a division of authority between the national government and the separate States. The powers given to the nation form in effect so many limitations upon the authority of the separate States, and as it is not intended that the central 246 Dicey, Introduction to the Study of the Law of the Constitution, 10th ed (1959) at 171-172 cited in Blackshield and Williams, Australian Constitutional Law and Theory, 3rd ed (2002) at 245-246. 247 Gillespie, "New Federalisms", in Brett, Gillespie and Goot (eds), Developments in Australian Politics, (1994) at 60 cited in Blackshield and Williams, Australian Constitutional Law and Theory, 3rd ed (2002) at 241. 248 Introduction to the Study of the Law of the Constitution, 10th ed (1959) at 151 cited in Blackshield and Williams, Australian Constitutional Law and Theory, 3rd ed McHugh government should have the opportunity of encroaching upon the rights retained by the States, its sphere of action necessarily becomes the object of rigorous definition." Thus, each legislative authority "is merely a subordinate law-making body, whose laws are of the nature of by-laws, valid whilst within the authority conferred upon it by the constitution, but invalid or unconstitutional if they go beyond the limits of such authority"249. This distribution of functions and powers is an essential element of federalism. But the system is unlikely to work well β or perhaps at all β unless somebody has the power to define the functions and powers belonging to the central and regional governments respectively. The general terms of the constating document of the federation are never clear enough to avoid disputes concerning the limits of their functions and powers. As a result most federal systems β including Australia β have an ultimate judicial "umpire" whose interpretations of the constating document bind the central and regional governments and define the boundaries of their powers and functions. As the Constitutional Commission pointed out250: "It would seem that the minimal essential features of a federal system as it has come to be understood in Australia are a high degree of autonomy for the governmental institutions of the Commonwealth and the States, a division of power between these organisations, and a judicial 'umpire'." In Australia, the ultimate judicial umpire is this Court. Its judgments ultimately define the powers and functions of the federal and State governments. So in this case, it is for this Court to decide whether expressly or by necessary implication, the Constitution prohibits the Parliament of the Commonwealth from imposing the superannuation contributions surcharge on State judicial officers. The Parliament accepts or assumes that it could not require the States to pay the surcharge in respect of State judicial pensions. And in my opinion, it cannot impose the surcharge by requiring State judges rather than the States to pay it. 249 Dicey, Introduction to the Study of the Law of the Constitution, 10th ed (1959) at 150 cited in Blackshield and Williams, Australian Constitutional Law and Theory, 3rd ed (2002) at 245. 250 Australia, Constitutional Commission, Final Report of the Constitutional Commission, (1988) vol 1 at 53 [2.16] cited in Blackshield and Williams, Australian Constitutional Law and Theory, 3rd ed (2002) at 248. McHugh Most commentators agree that the decision of this Court in Amalgamated Society of Engineers v Adelaide Steamship Co Ltd ("the Engineers' Case")251 dramatically extended the powers of the federal Parliament. First, the Engineers' Case held252 that the "one clear line of judicial inquiry as to the meaning of the Constitution must be to read it naturally in the light of the circumstances in which it was made, with knowledge of the combined fabric of the common law, and the statute law which preceded it". Second, the Engineers' Case rejected the doctrine of the immunity of governmental instrumentalities that had prevailed up to that time. Under that doctrine, the federal and State governments were seen as sovereign within their respective spheres of power and entitled to carry out their operations without legislative or executive interference from each other. Given that premise, the immunity was seen as arising from a necessary implication of the Constitution that prohibited the State and the federal governments from controlling the activities of each other. The genesis of the rule was a dictum of Marshall CJ, delivering the opinion of the United States Supreme Court, in McCulloch v Maryland253. There, the Chief Justice said that "the States have no power, by taxation or otherwise, to retard, impede, burden, or in any manner control, the operations of the constitutional laws enacted by congress to carry into execution the powers vested in the general government". Marshall CJ saw the rule as a necessity in a federal system. Nineteenth century United States cases held that the prohibition was reciprocal. One year after the setting up of this Court in 1903, it applied the prohibition in favour of the Commonwealth in Deakin v Webb254 and in favour of the States in The Federated Amalgamated Government Railway and Tramway Service Association v The New South Wales Railway Traffic EmployΓ©s Association255. However, the Engineers' Case rejected the doctrine of immunity of instrumentalities and held that, with limited exceptions, every grant of power to the federal Parliament authorised laws affecting the operations of the States and their agencies. The exceptions concerned the taxation power and powers affecting the prerogatives of the Crown. Thus, the emphasis on the text of the Constitution and the rejection of the principles of implied prohibition and immunity of instrumentalities enlarged the power of the federal government to deal with matters affecting the States as well as enlarging its power generally. 251 (1920) 28 CLR 129. 252 (1920) 28 CLR 129 at 152 per Knox CJ, Isaacs, Rich and Starke JJ. 253 4 Wheat 316 at 436 (1819) [17 US 159 at 213]. 254 (1904) 1 CLR 585. 255 (1906) 4 CLR 488. McHugh Despite this change, it soon became apparent that the Engineers' Case did not preclude the drawing of constitutional implications concerning the power of the States and the Commonwealth to bind each other. Isaacs J was the principal author of the judgment in the Engineers' Case. Yet not long after the decision in that case, his Honour pointed out β although in a dissenting judgment β in Pirrie v McFarlane256 that a fundamental principle of federalism was that, "where by the one Constitution separate and exclusive governmental powers have been allotted to two distinct organisms, neither is intended, in the absence of distinct provision to the contrary, to destroy or weaken the capacity or functions expressly conferred on the other". Five years later, in Australian Railways Union v Victorian Railways Commissioners257, Dixon J declared: "[U]nless, and save in so far as, the contrary appears from some other provisions of the Constitution or from the nature or the subject matter of the power or from the terms in which it is conferred, every grant of legislative power to the Commonwealth should be interpreted as authorizing the Parliament to make laws affecting the operations of the States and their agencies, at any rate if the State is not acting in the exercise of the Crown's prerogative and if the Parliament confines itself to laws which do not discriminate against the States or their agencies." (emphasis added) In Melbourne Corporation v The Commonwealth258, this Court held that the Commonwealth's power with respect to banking did not authorise a discriminatory law prohibiting a bank from conducting any banking business for a State or for any authority of the State unless the Treasurer of the Commonwealth had consented in writing to the conduct of the business. Although the law was directed to the private banks, the Court unanimously held that it burdened the functions of the States in a constitutionally impermissible way. In a much cited passage, Dixon J said259: "The prima-facie rule is that a power to legislate with respect to a given subject enables the Parliament to make laws which, upon that subject, affect the operations of the States and their agencies. That, as I have pointed out more than once, is the effect of the Engineers' Case stripped of embellishment and reduced to the form of a legal proposition. It is subject, however, to certain reservations and this also I have 256 (1925) 36 CLR 170 at 191. (original emphasis) 257 (1930) 44 CLR 319 at 390. 258 (1947) 74 CLR 31. 259 (1947) 74 CLR 31 at 78-79. McHugh repeatedly said. Two reservations, that relating to the prerogative and that relating to the taxation power, do not enter into the determination of this case and nothing need be said about them. It is, however, upon the third that, in my opinion, this case turns. The reservation relates to the use of federal legislative power to make, not a general law which governs all alike who come within the area of its operation whether they are subjects of the Crown or the agents of the Crown in right of a State, but a law which discriminates against States, or a law which places a particular disability or burden upon an operation or activity of a State, and more especially upon the execution of its constitutional powers." However, this celebrated passage does not represent the ratio decidendi of the case. Latham CJ and Williams J saw the case as turning on the proper characterisation of the section which they thought was not a law "with respect to" banking. Latham CJ said260 that "the invalidity of a federal law which seeks to control a State governmental function is brought about by the fact that it is in substance a law with respect to a subject as to which the Commonwealth Parliament has no power to make laws". Starke J said261 "in the end the question must be whether the legislation or the executive action curtails or interferes in a substantial manner with the exercise of constitutional power by the other". Rich J said262 that a federal law: "may be invalid in two classes of case, one, where the Commonwealth singles out the States or agencies to which they have delegated some of the normal and essential functions of government, and imposes on them restrictions which prevent them from performing those functions or impede them in doing so; another, where, although the States or their essential agencies are not singled out, they are subjected to some provision of general application, which, in its application to them, would so prevent or impede them." The issue of the Parliament's power to bind the States in respect of their functions arose again in Victoria v The Commonwealth ("the Payroll Tax Case")263. Barwick CJ, with whose judgment Owen J agreed, saw the issue as turning on the characterisation of the federal law. In his view264 when a law is 260 (1947) 74 CLR 31 at 62. 261 (1947) 74 CLR 31 at 75. 262 (1947) 74 CLR 31 at 66. 263 (1971) 122 CLR 353. 264 (1971) 122 CLR 353 at 373. McHugh invalid because it interferes with the powers or functions of a State, it is because of "lack of an appropriate subject matter". the characterisation approach. He said265 that the validity of such laws were to be decided by implications arising from the existence of the States as part of the Commonwealth. Those implications "relate to the use of a power not to the inherent nature of the subject matter of the law". His Honour said that a law, although made with respect to a designated subject matter, was not valid "if it be directed to the States to prevent their carrying out their functions as parts of the Commonwealth". Gibbs J266adopted the view of Sir Owen Dixon, that "a Commonwealth law is bad if it discriminates against States, in the sense that it imposes some special burden or disability upon them, so that it may be described as a law aimed at their restriction or control". However, his Honour went on to say that he was not disposed to agree that "a law which is not discriminatory in this sense is necessarily valid if made within one of the enumerated powers of the Commonwealth". He said that "[a] general law that would prevent a State from continuing to exist and function as such would in my opinion be invalid". In The Commonwealth v Tasmania ("the Tasmanian Dam Case")267, Mason J accepted the formulation of the principles expounded by Dixon J in Melbourne Corporation. His Honour said268: "The only relevant implication that can be gleaned from the Constitution ... is that the Commonwealth cannot, in the exercise of its legislative powers, enact a law which discriminates against or 'singles out' a State or imposes some special burden or disability upon a State or inhibits or impairs the continued existence of a State or its capacity to function." His Honour held that the principle arose from an implied prohibition in the Constitution. He specifically rejected the view of Barwick CJ in the Payroll Tax Case269 that the invalidity of federal laws that interfered with State functions or discriminated against the State was the result of the characterisation of the relevant Commonwealth power. 265 (1971) 122 CLR 353 at 403. 266 (1971) 122 CLR 353 at 424. 267 (1983) 158 CLR 1. 268 (1983) 158 CLR 1 at 128. 269 (1971) 122 CLR 353 at 372-373. McHugh The view expounded by Mason J in the Tasmanian Dam Case prevailed in Queensland Electricity Commission v The Commonwealth270. Mason J said271: "This review of the authorities shows that the principle is now well established and that it consists of two elements: (1) the prohibition against discrimination which involves the placing on the States of special burdens or disabilities; and (2) the prohibition against laws of general application which operate to destroy or curtail the continued existence of the States or their capacity to function as governments". Gibbs CJ272, Wilson J273, Deane J274 and Dawson J275 also took the view that the principle had two elements β discrimination and preventing or impeding essential functions. In Australian Capital Television Pty Ltd v The Commonwealth276 Dawson J again accepted that the principle had two elements β discrimination in the sense of subjecting the States to a special burden or disability not imposed on persons generally and undue interference with the capacity of the States to perform their constitutional functions. In Victoria v The Commonwealth ("the Industrial Relations Act Case")277, five members of this Court again recognised278 that the Melbourne Corporation principle had two elements. Given this long line of judicial exposition of the principle, I am unable to agree with that part of the reasons of the joint judgment279 that the Melbourne 270 (1985) 159 CLR 192. 271 (1985) 159 CLR 192 at 217. 272 (1985) 159 CLR 192 at 206-207. 273 (1985) 159 CLR 192 at 222. 274 (1985) 159 CLR 192 at 247-248. 275 (1985) 159 CLR 192 at 260-262. 276 (1992) 177 CLR 106 at 199, 202. 277 (1996) 187 CLR 416. 278 (1996) 187 CLR 416 at 500, 541-542 per Brennan CJ, Toohey, Gaudron, McHugh McHugh Corporation principle involves only "one limitation, though the apparent expression of it varies with the form of the legislation under consideration". With respect, since Queensland Electricity Commission it has been settled doctrine that there are two rules arising from the necessary constitutional implication. It is true that the joint judgment of six members of this Court, including myself, in Re Australian Education Union; Ex parte Victoria280 said that it was unnecessary in that case to decide whether "there are two implied limitations, two elements or branches of one limitation, or simply one limitation". But that statement provides no basis for rejecting the statement of Mason J in Queensland Electricity Commission281 that "the principle is now well established and that it consists of two elements". Nor does it provide any basis for rejecting the statement of Gibbs CJ in the same case282 that "it is clear, however, that there are two distinct rules, each based on the same principle, but dealing separately with general and discriminatory laws". Perhaps nothing of substance turns on the difference between holding that there are two rules and holding that there is one limitation that must be applied by reference to "such criteria as 'special burden' and 'curtailment' of 'capacity' of the States 'to function as governments'".283 If there is a difference in content or application, it may lead to unforeseen problems in an area that is vague and difficult to apply. If there are no differences, no advantage is to be gained by jettisoning the formulation of Mason J in Queensland Electricity Commission. As the present case is concerned with legislation imposing burdens on State judicial officers, the federal legislation is not directed at the States themselves. But that fact does not prevent the application of the Melbourne Corporation principle. In Melbourne Corporation itself, the legislation was directed at the private banks. But it was invalid because it restricted the banking choices open to State governments and their authorities. It prevented them β because it prevented the private banks β from entering into relationships concerning the use and placement of State government funds and borrowings. 279 Reasons of Gaudron, Gummow and Hayne JJ at [124]. 280 (1995) 184 CLR 188 at 227 per Mason CJ, Brennan, Deane, Toohey, Gaudron and 281 (1985) 159 CLR 192 at 217. 282 (1985) 159 CLR 192 at 206. 283 Reasons of Gaudron, Gummow and Hayne JJ at [124]. McHugh In Queensland Electricity Commission, after referring to the principle of Melbourne Corporation, Mason J said284: "The object of the implied prohibition is to protect the State in the exercise of its functions from the operation of discriminatory laws whether the functions are discharged by the executive government or by an authority brought into existence by the State to carry out public functions even if the authority acts independently and is not subject to government direction and even if its assets and income are not property of the State." Similarly in Re Australian Education Union, this Court held certain awards in relation to the terms and conditions of employment of certain public servants invalid. This Court held that the federal arbitration power did not authorise the Commission to make awards concerning the terms and conditions of employment of high level office holders and senior public servants. The Court said285: "In our view ... critical to a State's capacity to function as a government is its ability, not only to determine the number and identity of those whom it wishes to engage at the higher levels of government, but also to determine the terms and conditions on which those persons shall be engaged. Hence, Ministers, ministerial assistants and advisers, heads of departments and high level statutory office holders, parliamentary officers and judges would clearly fall within this group. The implied limitation would protect the States from the exercise by the Commission of power to fix minimum wages and working conditions in respect of such persons and possibly others as well". The federal legislation in the present case is concerned with a superannuation contributions surcharge β taxation β and not directly with the terms and conditions of employment of State judicial officers. But that is a difference without relevant constitutional meaning. Nothing in the Constitution or in the principle of Melbourne Corporation prevents the federal Parliament from subjecting State judicial officers to general taxation, provided that it does not discriminate against them as State judicial officers. But the matter is constitutionally different when federal legislation taxes State judicial officers in a way that differs from other income earners. Such a law will be invalid unless the discrimination is such that it has no practical impact on the relationship between the State and the judicial officer. The matter may be one of degree. Drawing the line between a law that treats State judicial officers differently from other income 284 (1985) 159 CLR 192 at 218. 285 (1995) 184 CLR 188 at 233 per Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh earners and is valid and a law that disadvantages them in a real sense and is invalid may not always be easy. But it must be drawn if the States are to be free from federal laws that impose special burdens or disabilities on their constitutional arrangements relating to the administration of justice. Here the federal law discriminates against State judicial officers in a way that interferes in a significant respect with the States' relationships with their judges. It interferes with the financial arrangements that govern the terms of their offices, not as an incidence of a general tax applicable to all but as a special measure designed to single them out and place a financial burden on them that no one else in the community incurs. The Commonwealth does not dispute that the relevant federal legislation treats the first plaintiff and other State judicial officers differently from the way federal laws concerned with the superannuation contributions surcharge deal with other "high income earners". Private "high income earners" do not have the surcharge imposed on them. In their case, the surcharge is imposed on their superannuation provider. The federal legislation assumes β no doubt with good reason β that the surcharge will be passed on to the high income earner in his or her capacity as a member of the superannuation scheme in the form of reduced benefits. But in so far as the federal legislation deals with these private "high income earners", it does not impose any surcharge on them personally. It does not make them liable to pay a debt of hundreds of thousands of dollars, as these federal laws make State judicial officers liable to pay. Similarly, federal judges β as "high income earners" β are treated differently by the federal legislation from State judicial officers. Federal judges incur no personal liability. When they leave office they do not have the burden of an accumulated debt arising from the imposition of the surcharge. Federal judges who are subjected to the surcharge merely have their pensions reduced at the time of each payment by a specified amount. Their position is very different from State judicial officers who are subjected to the surcharge. The evidence in this case shows, for example, that, when the first plaintiff turns 62 and can retire with a judicial pension, he will have an accumulated superannuation contributions surcharge debt of over $300,000. He will receive a pension on retirement at 62 of about $180,000. The pension will be taxed at the marginal rate. If, instead of retiring at 62, he remains in office until he is required to retire at 72, he will have accumulated a superannuation contributions surcharge debt to the Commonwealth of over $550,000. At age 72, the actuarial evidence indicates that he will have a pension of about $267,000. After paying income tax on his annual pension, four years will pass before his pension receipts match his surcharge debt. If he should die within that four-year period or earlier and is survived by a widow, the pension receipts will be even smaller but the debt owed by the first plaintiff's estate will remain the same. McHugh Thus, if the first plaintiff were to serve beyond the age of 62, when he can retire with a judicial pension, it will result in him incurring a debt of an additional $240,000 if he should remain until he is 72. Hence, the federal legislation operates to provide a strong incentive for the first plaintiff and other State judicial officers to retire as soon as they are entitled to a pension. It is true that, independently of the federal legislation, the value of a judge's pension decreases with each day the judge stays in office after becoming eligible to retire with a pension. In that respect, the pension scheme, by entitling a judge to retire after turning 60 and serving for 10 years, has an inherent incentive for retirement on entitlement to the pension. But the legislation in issue in this case provides an additional and greater incentive for the judge to retire early. Thus, the legislation operates so as to hamper the capacity of State governments to retain the services of their judicial officers. More than that, it must also hamper the ability of the States to get suitable persons to take appointments to State judicial offices. Any person approached for appointment to State judicial office knows that under this legislation he or she will incur a significant and increasing financial debt to the Commonwealth upon taking office. So serious was the likely effect on the relationship between State judicial officers and the State of New South Wales that the State felt compelled to enact the Judges' Pensions Amendment Act 1998 (NSW). That Act amended the Judges' Pensions Act 1953 (NSW) to provide for the commutation of pensions to enable the payment of the superannuation contributions surcharge. As the New South Wales Attorney-General pointed out in his Second Reading Speech in the Legislative Council286, the amendments were "essential to provide judges and other persons entitled to a pension or reversionary pension under the Act with a mechanism to pay the superannuation contributions surcharge from the benefit they are entitled to receive". Thus, the result of the present federal legislation concerning superannuation contributions surcharges is that the State of New South Wales and other States have been forced for practical reasons to a enact legislation to pay a lump sum to their judges who retire so that they can if they wish commute part of their benefits to pay the surcharge debt. Thus, the practical effect of the federal legislation is to require the States to pay a sum of money to a retiring State judge to be paid to the Commonwealth, a payment that the Commonwealth accepts or assumes it could not directly require the States to pay. The federal legislation in question in this case violates the principles enshrined in Melbourne Corporation. It is invalid in so far as it applies to the first plaintiff. I agree with the answers to the questions proposed by Gaudron, 286 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 2 June Kirby 235 KIRBY J. This Court has before it questions reserved on a case stated287. As explained in the reasons of Gaudron, Gummow and Hayne JJ ("the joint reasons"), the questions for decision present two issues288. The first is a construction issue concerned with whether, pursuant to federal legislation, the two plaintiffs are liable to pay a superannuation contributions surcharge ("the surcharge"). The second issue involves the alternative attack that the plaintiffs have mounted on the legislation, suggesting that, if it applies to them or either of them, it exceeds the constitutional powers of the Federal Parliament. Background facts, history and context The facts and legislation: The facts are set out in the stated case. Most of them necessary for my opinion are explained in the joint reasons. The first plaintiff (Justice Robert Austin) was appointed a judge of the Supreme Court of New South Wales on 31 August 1998. The second plaintiff (Master Kathryn Kings) was appointed the Listing Master of the Supreme Court of Victoria on 23 March 1993. On 20 July 1993 she was appointed a Master of that Court. Each of the plaintiffs has been supported in this Court by submissions of the Attorney-General for his or her State and by Attorneys- General of other States, intervening. The Commonwealth has disputed the plaintiffs' arguments. It submits that the legislation is valid and applicable to each of them. Because the joint reasons set out a description of the federal legislation (both that impugned and other laws relevant to the issues)289, it is unnecessary for me to repeat that detail. The unpleasant complexity of federal superannuation law has already been the subject of attention in this Court290. I shall adopt the description of the legislation, federal and State, used by my colleagues. Historical setting: The sources of the plaintiffs' arguments do not lie only in the text of the Constitution and the detail of the impugned legislation. They lie deep in constitutional history and in issues of basic principle. So far as history is concerned, the plaintiffs submitted that their arguments could be understood only if this Court recalled the long struggle for the integrity of the judicial institution to which the Australian judiciary is heir. 287 The case was stated by Hayne J pursuant to the Judiciary Act 1903 (Cth), s 18. 288 See the joint reasons at [38]-[39]. 289 Joint reasons at [49]-[69]. 290 Attorney-General (Cth) v Breckler (1999) 197 CLR 83. Kirby In the time of the Norman Kings of England, the judicial power (at least in non-ecclesiastical matters) reposed in the hands of the King personally and his immediate entourage (the Curia Regis)291. Royal participation in the judicial function diminished over ensuing centuries in favour of professional judges. However, those judges were, at first, dependant for their offices and remuneration upon the King's pleasure. The abuse of that power by the Stuart Kings contributed to the revolution of 1688 and The Act of Settlement of 1700292. By that law, confirmed by George I in 1714293, it was enacted that the judges of the Kingdom should hold office during good behaviour and that their salaries should be "ascertained and established" by law294. In 1760, by an Act relating to the "Commissions and Salaries of Judges"295, another cause weakening the position of judges was removed. It was provided that Royal appointees, including judges, would no longer vacate their offices, and lose their salaries, upon the demise of the Crown296. These constitutional advances, won in England, were not initially observed in England's colonies. One of the complaints made by the American colonists in the Declaration of Independence was that the King had "made Judges dependent on his Will alone, for the tenure of their offices, and the amount and payment of their salaries"297. It was this defect in government that led, among other things, to the "Compensation Clause" in the United States Constitution298, guaranteeing federal judges a "Compensation, which shall not be diminished during their Continuance in Office". Australian judicial pensions: The first provisions for judicial pensions in the Australian colonies were introduced by the New South Wales and Victorian 291 Re Provincial Court Judges [1997] 3 SCR 3 at 176 [305]; see also Lederman, "The Independence of the Judiciary", (1956) 34 Canadian Bar Review 769. 292 12 and 13 Will 3 c 2. 293 1 Geo 1 c 4. 294 s 3. See Re Provincial Court Judges [1997] 3 SCR 3 at 177 [306]. 295 1 Geo 3 c 23. 296 cf Re Provincial Court Judges [1997] 3 SCR 3 at 177 [306]. 297 Β§11. See United States v Hatter 532 US 557 at 568 (2001). 298 Art III s 1. Kirby Constitution Acts299. Such provisions were confirmed, and formalised, by later colonial300 and State301 statutes. In respect of federal judges, provision for pensions was made in the first draft of the Judiciary Bill302. However, that provision was deleted when the Judiciary Act 1903 (Cth) was passed. In 1918, a special measure was enacted for the entitlements of Griffith CJ, who had enjoyed pension rights as Chief Justice of Queensland which he lost upon his federal appointment303. A general provision for pensions for federal judges was not enacted until 1926304. Judicial pensions were introduced over time in the Australian colonies305. In Queensland and South Australia the pension provisions so introduced were abolished but later restored306. The common feature of most of the Australian judicial pension statutes was that they provided a "non-contributory" pension (that is, one to which the judge did not directly contribute financially) paid to the 299 New South Wales Constitution Act 1853, s 59 (17 Vict No 41); Victoria Constitution Act 1855, Sched 1 cl 49 (18 & 19 Vict c 55). 300 Judges' Pensions Act of 1859 (NSW) (23 Vict No 2) and Supreme Court and Circuit Courts Act, 1900 (NSW). 301 eg Judges Retirement Act 1918 (NSW) and Supreme Court (Judges Retirement) Act 1936 (Vic). The present source of the judicial pension for judges and Masters of the Supreme Court of New South Wales is the Judges' Pensions Act 1953 (NSW). The present source of the judicial pension for Masters of the Supreme Court of Victoria is the Supreme Court Act 1986 (Vic), Pt 7. See the joint reasons at [46]. 302 Australia, House of Representatives, Parliamentary Debates (Hansard), 18 March 303 Chief Justice's Pension Act 1918 (Cth). 304 Judiciary Act 1926 (Cth). This was later amended by the Judges' Pensions Act 1948 (Cth). The present source of judicial pensions for federal judges is the Judges' Pensions Act 1968 (Cth). 305 Queensland: Supreme Court Constitution Amendment Act of 1861 (Q), s 8 (25 Vict No 13); Tasmania: Supreme Court Judges' Retiring Allowances Act 1880 (Tas) (44 Vict No 28); Western Australia: Judges' Pensions Act 1896 (WA) (60 Vict No 24). 306 Queensland: Judges' Retirement Act 1921 (Q) (12 Geo 5 No 14). Pensions were reintroduced by the Judges' Pensions Act of 1957 (Q) (6 Eliz 2 No 38). South Australia: An Act to repeal an Act No 186 of 1880 1886 (SA) (49 & 50 Vict No 381). Pensions were reintroduced by the Supreme Court Act Amendment Act 1944 Kirby judge upon qualifying retirement or, upon death, to the judge's legal personal representative or specified family members. Only in two States was provision made for contributions by a judge to such pension entitlements. In South Australia, when pensions were restored after an interval of fifty-eight years, they were at first contributory307. The present non-contributory scheme in that State only commenced in 1971308. The Judges' Contributory Pensions Act 1968 (Tas) provides, as its short title suggests, for judicial contributions to the benefits payable under that Act. All other judicial pension schemes in Australia, federal and State, are non-contributory and "unfunded" (that is, paid out of consolidated revenue rather than from a specific fund established for the purpose). Australian taxation: South Australia was the first Australian jurisdiction to introduce income tax, in 1884309. Like taxes were introduced in New South Wales and Victoria in 1895310. The other colonies and States introduced that form of taxation at the same time or soon after311. The Federal Parliament first enacted taxes upon incomes in 1915312. Despite objections of the Privy Council313, this Court initially embraced a view of the Constitution forbidding the imposition of taxation by one polity of the Commonwealth upon an instrumentality or officer of another, where such taxation would "fetter, control, or interfere with, the free exercise of the legislative or executive power" of the other314. This principle was held to be reciprocal315. It therefore prohibited the interference of federal law with State 307 Supreme Court Act Amendment Act 1944 (SA). 308 Judges' Pensions Act 1971 (SA). 309 Taxation Act 1884 (SA) (47 & 48 Vict No 323). 310 Land and Income Tax Assessment Act of 1895 (NSW) (59 Vict No 15) and Income Tax Act 1895 (NSW) (59 Vict No 17); Income Tax Act 1895 (Vic) (58 Vict No 311 Income Tax Act 1894 (Tas) (58 Vict No 16); Income Tax Act of 1902 (Q) (2 Edw VII No 10); Land Tax and Income Tax Act 1907 (WA) (7 Edw 7 No 16). 312 Income Tax Act 1915 (Cth). 313 Webb v Outrim [1907] AC 81. 314 See D'Emden v Pedder (1904) 1 CLR 91 at 111. (emphasis added) Affirmed in Deakin v Webb (1904) 1 CLR 585. 315 Baxter v Commissioners of Taxation (NSW) (1907) 4 CLR 1087 at 1132-1133. Kirby governmental instrumentalities and officeholders316. However, the doctrine of intergovernmental immunities, which was the foundation for these rulings, was overthrown in 1920 by the decision of this Court in Amalgamated Society of Engineers v Adelaide Steamship Co Ltd ("the Engineers' Case")317. At least after the Engineers' Case, there was no question that a State judge in Australia was obliged, like any other citizen, to pay taxes imposed by legislation enacted by the Federal Parliament under its constitutional power to make laws with respect to taxation318. Nor was it suggested that federal judges were wholly immune from such laws. This was so although, in the case of federal judges, a relevant express provision is made in s 72 of the Constitution: "The Justices of the High Court and of the other courts created by the Parliament: (iii) shall receive such remuneration as the Parliament may fix; but the remuneration shall not be diminished during their continuance in office." The provision of s 72 is similar to the "Compensation Clause" in the United States Constitution. In that country it was originally held that the power of the Congress to "lay and collect Taxes"319 did not extend to imposing federal taxation on State judges320. Similarly, it was held that, under the "Compensation Clause", federal judges were immune from liability to pay federal taxes321. 316 The Federated Amalgamated Government Railway and Tramway Service Association v The New South Wales Railway Traffic EmployΓ©s Association (1906) 4 CLR 488. 317 (1920) 28 CLR 129. See the reasons of McHugh J at [212] and the remarks of Chief Justice Sir Garfield Barwick on his retirement (1981) 148 CLR v at ix-x; cf SGH Ltd v Commissioner of Taxation (2002) 76 ALJR 780 at 790 [50], 797 [85]; 188 ALR 241 at 255, 264. 318 Constitution, s 51(ii). 319 United States Constitution, Art I s 8. 320 Collector v Day 78 US 113 (1870); cf Pollock v Farmers' Loan and Trust Company 321 Evans v Gore 253 US 245 (1920). See also Miles v Graham 268 US 501 at 509 (1925). During the Civil War an attempt by federal law to impose income tax on the Justices of the Supreme Court led to a communication to the Government by (Footnote continues on next page) Kirby However, in 1939, each of these immunities was overruled by the Supreme Court. That Court held that judges in the United States were liable to pay non- discriminatory federal taxes imposed by reference to their salaries322. A little earlier, a similar decision had been reached in respect of the judges of Canada323. Exempting current officeholders from the new tax: A final contextual consideration must be mentioned before I turn to the plaintiffs' legal challenges. The last time an Australian judge contested the applicability of taxes to his judicial income, as a matter of general principle, was in 1907. Sir Pope Cooper, Chief Justice of Queensland, disputed the application of State income tax law to judicial salaries324. This Court dismissed the challenge. One reason for the absence of judicial proceedings questioning the applicability to judges of Australian taxation laws may have been the care which Australian governments and parliaments have normally observed to respect the principle that judges should only be rendered liable to taxation laws of general application and to respect the convention otherwise protecting the remuneration of serving judges from effective diminution. There is no express equivalent in the Australian Constitution, similar to s 72(iii), protecting the remuneration of State judges. There are relevant State laws to restrain the reduction of the salaries and allowances payable to judges of State Supreme Courts325. However, such laws are obviously addressed only to State reductions. They could not prevent the operation of a valid federal law having that effect. It may be argued that there is a convention, and possibly an implication in Ch III of the Constitution, protecting the remuneration of appointed State judges. Whatever might be said as to the existence, or scope, of any such protection (a matter that might consume much time to clarify) in this case a decision was made by the Federal Parliament to draw no distinctions between Australia's judges already in office who were entitled to a judicial pension. Relevantly, by s 7 of the Superannuation Contributions Tax (Members Taney CJ on behalf of the Court and to a subsequent refund to the Justices of the tax paid by them "under protest". See Miller, Lectures on the Constitution of the United States, (1893) at 247-248 cited in Cooper v Commissioner of Income Tax for the State of Queensland (1907) 4 CLR 1304 at 1316 per Griffith CJ. 322 O'Malley v Woodrough 307 US 277 (1939); cf United States v Hatter 532 US 577 323 Judges v Attorney-General of Saskatchewan [1937] 2 DLR 209 (PC). 324 Cooper v Commissioner of Income Tax for the State of Queensland (1907) 4 CLR 325 eg Constitution Act 1975 (Vic), s 82(6B). Kirby of Constitutionally Protected Superannuation Funds) Assessment and Collection Act 1997 (Cth) ("the Protected Funds Assessment Act"), it is provided that the Act "does not apply to a person who is a member because he or she is a judge of a court of a State at the commencement of this Act". Application of interpretative principles No issue is raised in these proceedings concerning the taxation obligations of federal judges. This case is concerned only with the application of the impugned laws with respect to the two plaintiffs who are State judicial officers. The outcome thus depends upon the construction of the laws in question and, should either or both of the plaintiffs fall within their operation, whether such laws are constitutionally valid. In the performance of the function of statutory construction a court must conform to applicable statutory and common law rules devised to facilitate that task and to ensure that it is carried out in a consistent manner. One such rule is the "plain meaning" principle. Another is that commonly described as the "purposive" principle326. In the case of federal legislation, the latter principle is supported by provisions of the Acts Interpretation Act 1901 (Cth)327. It is also supported by the common law as elaborated by this Court328. In earlier times it used to be said that legislation imposing taxation was subject to a strict construction, in favour of the taxpayer. However, in more recent times, this Court has departed from the narrow and literal interpretation of words appearing in legislation, including that imposing taxation, in favour of an interpretation that seeks to achieve the apparent purposes or objects of the enactment as expressed in its terms329. There is another principle of interpretation important for this case. It affects my approach both to the suggested ambiguities of the federal legislation (relevant to the applicability issue) and to the meaning and operation of the Constitution (relevant to the validity issue). In the task of construction it is permissible to have regard to any applicable principles of international human 326 cf Kingston v Keprose Pty Ltd (1987) 11 NSWLR 404 at 423-424 per McHugh JA. 327 s 15AA. 328 See eg Bropho v Western Australia (1990) 171 CLR 1 at 16-17; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381-382 [69]-[70]. 329 Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 307 per Gibbs CJ, 310 and 313 per Stephen J, 323 per Mason and Wilson JJ; cf joint reasons in this case at [102]. See also Newton v Federal Commissioner of Taxation (1958) 98 CLR 1 at 7-9; [1958] AC 450 at 465-466. Kirby rights law that throw light upon the point in controversy. To do this is not to introduce into the interpretation, by the backdoor, provisions in international human rights treaties to which Australia is a party but which have not been incorporated as part of this country's domestic law330. That would be an impermissible course. Instead, it involves a different, and permissible course. Faced with a choice between competing concepts of the common law or ambiguous Australian statutes, a decision-maker may take into account, as relevant, the international law of human rights and another will not331. interpretation will conform the consideration that one The international law of human rights represents a large and growing body of jurisprudence, developed by courts and expert bodies throughout the world, based upon the texts of international instruments that have come into force. It provides a legal resource of great utility from which this country is not disconnected. It is at least as useful in considering questions of basic legal principle concerning the content of Australian law to have regard to this source as it is to examine the non-binding expositions of the law appearing in English cases of centuries ago, often dealing with problems in a context quite different from that of the contemporary world332. Australia is a party to the International Covenant on Civil and Political Rights ("the ICCPR")333. It is also a signatory to the First Optional Protocol to the ICCPR. That Protocol renders the law of Australia (including as expounded by this Court) accountable to the treaty body established under the ICCPR for dealing with communications alleging derogations from that Covenant's requirements. The ICCPR provides that "everyone shall be entitled to a fair and public hearing by a competent, independent and impartial tribunal established by law"334. These tripartite characteristics of courts and tribunals are fundamental rights belonging not to the judges or other members of such bodies, as such, but 330 cf Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273 at 288. 331 cf Mabo v Queensland [No 2] (1992) 175 CLR 1 at 42. See also Dietrich v The Queen (1992) 177 CLR 292 at 305-306, 360-361, 373; Re Minister for Immigration and Multicultural Affairs; Ex parte Epeabaka (2001) 206 CLR 128 at 151-152 332 cf Commonwealth v Yarmirr (2001) 208 CLR 1 at 132-133 [297]-[298]. 333 Done at New York on 19 December 1966, ATS 1980 No 23. 334 Art 14.1; cf Re Minister for Immigration and Multicultural Affairs; Ex parte Epeabaka (2001) 206 CLR 128 at 151-152 [69]. Kirby to all persons in society. The entitlement to a manifestly competent, independent and impartial decision-maker in a court or tribunal established by law, is the clear requirement of international human rights law335. The more general proposition of judicial independence is also supported by Australian domestic law336. It may be implied in the Australian Constitution, including in the case of State courts337. So far as the interpretation of the Constitution by reference to developments of international law, it is to be noted that the approach that I have mentioned, often favoured by judges of other Commonwealth countries338, has recently gathered some support in the Supreme Court of the United States. In ruling that the carrying into effect of a sentence of death upon a prisoner who was severely mentally handicapped would constitute "cruel and unusual punishment", contrary to that country's Constitution, Stevens J, for the majority of the Court, called in aid opinions concerning the requirements of international human rights law339. For reasons that I have expressed in other decisions340, it is my view that this Court may also interpret the Australian Constitution so as to ensure that the development of constitutional doctrine, relating to matters of fundamental 335 Karttunen v Finland, United Nations Human Rights Committee, 23 October 1992 extracted in Martin et al, International Human Rights Law and Practice, (1997), vol 1 at 527. 336 Johnson v Johnson (2000) 201 CLR 488; Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337. 337 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51; Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 at 363-364 [83]-[84] per Gaudron J; 372-373 [115]-[116] of my own reasons; cf Roberts v Bass (2002) 194 ALR 161 at 199-200 [145]. 338 eg Tavita v Minister of Immigration [1994] 2 NZLR 257 at 266; R v Oakes [1986] 1 SCR 103 at 120-121; Claydon, "International Human Rights Law and the Interpretation of the Canadian Charter of Rights and Freedoms", (1982) 4 Supreme Court Law Review 287. 339 Atkins v Virginia 70 USLW 4585 at 4589, fn 21 (2002) per Stevens J, with whom O'Connor, Kennedy, Souter, Ginsburg and Breyer JJ joined. That approach produced a strong dissent from Rehnquist CJ at 4591 and Scalia J at 4598 (with 340 eg Newcrest Mining (WA) Ltd v The Commonwealth (1997) 190 CLR 513 at 657- 659; Kartinyeri v The Commonwealth (1998) 195 CLR 337 at 417-419 [166]-[167]; cf Commonwealth v Yarmirr (2001) 208 CLR 1 at 130-131 [292]-[293]. Kirby principle, conforms, so far as the text and other considerations allow, to the principles of the law of universal human rights. In the present case, this includes the right of access to judges who are competent, independent and impartial in the full sense of those words. Many international statements concerning the features essential to the judicial branch of government recognise the importance of providing adequate remuneration for the judiciary and protection of such remuneration against its effective reduction whilst in office341. Where there is an ambiguity in the applicable legislation or an uncertainty in the meaning and application of the Constitution, I will prefer the construction that upholds these basic principles and applies them to the problem in hand in preference to a construction that does not. I take such notions to be inherent in the type of judiciary for which the Australian Constitution provides or which it recognises. Construction arguments Application to the first plaintiff: The construction arguments advanced by the first plaintiff are described in the joint reasons342. For the reasons there stated, each of the arguments fails. Nothing in the interpretative principles to which I have referred assists the first plaintiff on the applicability issue. The plain meaning and purposive principles stand against his arguments. There is no relevant uncertainty or ambiguity in the legislation. The construction arguments must be rejected in his case. This conclusion requires consideration of the first plaintiff's objections to the constitutional validity of the federal law that, in its terms, applies to him. Application to the second plaintiff: The case of the second plaintiff is more difficult. The issue is whether, before the applicable date, 7 December 1997, the second plaintiff was a "judge of a court of a State" for the purposes of the Protected Funds Assessment Act. There is no definition of the word "judge" in that Act. Therefore, the issue becomes, what does that phrase "judge of a court of a State" mean in the context of that Act? Upon one view, the second plaintiff is not a "judge". She is not so designated by title. Within the judiciary and legal profession she would not ordinarily be described as a "judge". In this regard, her position is different from 341 United Nations, Basic Principles on the Independence of the Judiciary, endorsed by the General Assembly, A/Res/40/32, 29 November 1985, A/Res/40/146, 13 December 1985 at par 11; Draft Principles on the Independence of the Judiciary ("Siracusa Principles"); International Association of Judges, The Universal Charter of the Judge (2000), at Art 13 ("The judge must receive sufficient remuneration to secure true economic independence"). 342 Joint reasons at [92]-[110]. Kirby that of a Master in the State of South Australia where a Master of the Supreme Court is designated a judge because so commissioned in the District Court of that State343. In the case of the second plaintiff, the same position did not obtain when she was appointed to her present office. It did not exist on 7 December 1997. Nor has it existed at any time since. It is not to be supposed that the Federal Parliament was ignorant of the distinction, observed in most Australian States, between judges and Masters. The precise functions performed by Masters in the several States differ. Although this is also true of judicial officers designated as "judges", the differentiation there is less marked. One view of the legislation, in effect exempting serving State "judges" from the new federal surcharge, is that the exemption was an exceptional measure, arguably unnecessary by the the to an established convention, which Constitution but conformable Government proposing the Bill, and the Parliament enacting it, felt should be confined to "judges" strictly so described. The Commonwealth conceded that, in particular cases, a differentiation between judges and Masters might put some Masters in an anomalous position. However, it submitted that the adoption of a functional analysis would introduce other and still more difficult problems caused by any departure from observing the plain meaning of the word used by the Parliament. Thus, judicial registrars of the Federal Court of Australia344 and of the Family Court of Australia345 perform functions that are in some ways similar to the functions of judges and Masters. However, they are not exempted by federal law from the application of the surcharge. The Commonwealth argued that it would be surprising if a federal law, using the word "judge", were to be construed as covering officers such as Masters only because of functional similarity of their work to the work of judges. If that were the case, questions could arise as to how "magistrates, registrars or people with the status of a judge" could be so distinguished. There is much force in these submissions. They accord with the common sense and ordinary meaning of the word "Master", as distinct from "judge". Upon one view, that distinction is reinforced by the Victorian Constitution, which states that both judges and Masters are part of the Supreme Court of that State346. The joint reasons invoke this provision as support for their conclusion 343 Supreme Court Act 1935 (SA), s 7(4). 344 Federal Court of Australia Act 1976 (Cth), ss 18AA-18AM; Federal Court Rules O 78 r 38. 345 Family Law Act 1975 (Cth), s 26B; Family Law Rules O 36A. Kirby that "a judge of a court of a state" includes Masters in the case of that Court347. However, it is equally arguable that the distinction is antagonistic to that conclusion. On this view, it only adds force to the understanding of the word "judge", as ordinarily excluding a Master. The phrase in the Protected Funds Assessment Act does not refer to the Supreme Court and its members, but only to "judges". The joint reasons refer to the fact that the Supreme Court Act 1986 (Vic) is one of the Acts listed in Sched 14 of the Income Tax Regulations 1936, which establishes the "protected" funds. They reason that, as the Masters' fund is the only "fund" established by that Victorian Act, it must have been intended that Masters would be considered "judges" for the purpose of s 7, or else listing that Act in Sched 14 would have no function348. However, this possible anomaly is no different in kind from that produced by also listing the Coal Mines (Pension) Act 1958 (Vic) and the Mint Act 1958 (Vic), to which the legislation has no operation. The joint reasons suggest that this "incongruity" was created by the direct transfer of the contents of Sched 14 from its position in earlier legislation349. If such explanation can be used for those Acts, the question is posed why not for the Victorian Supreme Court Act? The task of construing legislation is not a mechanical one. In deriving meaning courts will be guided by the apparent purpose which the chosen language was enacted to perform. In the present case, part of that purpose was to protect the pensions of the specified persons already in judicial office in certain courts and to do so out of respect for the convention long observed in relation to the remuneration of judges of superior courts. It is questionable whether, without express provision, Masters are members of the courts to which that convention applies. In such a finely balanced issue, the second plaintiff's arguments receive some support from the interpretive principle based on international human rights law. Thus, with some hesitation, I have concluded that it would not be stretching the definition of "judge" too far in this instance to include within its ambit appointed Masters of the Supreme Court of Victoria for the purpose of s 7 of the Protected Funds Assessment Act. I will not press the hesitation that I feel in embracing this conclusion to a dissent from the opinion of the other members of this Court on the issue of construction. A larger difference lies between us involving the Constitution. 347 Joint reasons at [76]. 348 Joint reasons at [56], [77]. 349 Joint reasons at [96]. Kirby I agree with the joint reasons350 that the position of Masters in other Australian Supreme Courts depends upon an analysis of the legislation (and functions) applicable in their cases. My conclusion of the construction issue in favour of the second plaintiff would not necessarily require the same outcome in the case of Masters in other States, appointed under relevantly different legislation. Conclusions: The result is therefore that the construction question in respect of the first plaintiff must be answered "yes". In respect of the second plaintiff the answer must be "no". It follows that, in respect of the second plaintiff, the issue of constitutional validity does not arise. However, that issue must be addressed in the case of the first plaintiff. Unavailing constitutional arguments A number of arguments were advanced, contesting the constitutional validity of the federal laws subjecting the first plaintiff to the surcharge. I can dispose briefly of most of those arguments because I agree with the joint reasons that they should be rejected351. Specifically, I agree with what is stated in the joint reasons in respect of the submissions that the legislation constituted an arbitrary exaction, not taxation352; involved an abdication of legislative authority353; and constituted a breach of s 55 of the Constitution which mandates but one subject matter in laws imposing taxation354. I also agree with what is said in the joint reasons concerning the alleged invalidity of the suggested conscription of State officers and institutions (including State Government Actuaries) to perform functions in the calculation of the "notional surchargeable contributions factor", as contemplated by the federal legislation355. 350 Joint reasons at [79]. 351 Joint reasons at [175]-[201]. 352 Joint reasons at [182]-[183]. 353 Joint reasons at [184]-[186]; cf Gould v Brown (1998) 193 CLR 346 at 485-487 [284]-[287]; Byrnes v The Queen (1999) 199 CLR 1 at 10-11 [4]; R v Hughes (200) 202 CLR 535 at 574-575 [94]. 354 Joint reasons at [187]-[201]; cf Luton v Lessels (2002) 76 ALJR 635 at 655 [122]; 187 ALR 529 at 558. 355 See joint reasons at [177]-[181] referring to the requirements of the Protected Funds Assessment Act, s 9(5) and Regulations thereunder. Kirby The joint reasons do not finally resolve this last-mentioned objection356. However, to reach my answers, I must do so. In my view, nothing in the applicable federal law subjects the State Actuary (or a fund manager) to duties that are constitutionally impermissible. It is not uncommon for federal laws, in their operation, to have consequences for State officials. Thus, the constitutional power to vest federal jurisdiction in State courts357 necessarily has many consequences for State officials, quite apart from State judicial officers. For example, such consequences affect the duties of court reporters, sheriffs' officers, registry staff, administrative personnel of the State Attorney-General's office and so on. If there be federal power (as in this case is propounded by reference to the power to make laws with respect to taxation) incidental duties will commonly be cast on many persons, including State public servants. What is impermissible, under the implication derived from the Constitution, is interference in358: "the [State] government's right to determine the number and identity of the persons whom it wishes to employ, the term of appointment of such persons and, as well, the number and identity of the persons whom it wishes to dismiss with or without notice from its employment on redundancy grounds". In relation to the "higher levels of government", the Federal Parliament may not interfere with the State's capacity to determine the persons it employs, their terms and conditions of employment and the normal duties they are required to perform359. However, these principles have no application to the limited burden imposed on the State as a notional "superannuation provider"360 to 356 Joint reasons at [181]. 357 Constitution, s 77(iii); cf Solomons v District Court of New South Wales (2002) 76 ALJR 1601 at 1625 [132]; 192 ALR 217 at 250. The vesting of federal jurisdiction in State courts is a special case because of the constitutional power to do so without State agreement or authority. However, the point of incidental obligations inherent in obedience to valid federal law remains true in other cases: Re Residential Tenancies Tribunal (NSW); Ex parte Defence Housing Authority (1997) 190 CLR 358 Re Australian Education Union; Ex parte Victoria (1995) 184 CLR 188 at 232; cf SGH Ltd v Commissioner of Taxation (2002) 76 ALJR 780 at 790 [51]; 188 ALR 359 Re Australian Education Union; Ex parte Victoria (1995) 184 CLR 188 at 233. 360 In the case of the first plaintiff, the Attorney-General's Department of New South Wales. Kirby provide information essential to the accurate calculation of a federal tax (if so it proves) applicable to the State judge concerned. A similar objection might be voiced in relation to the duty of State government departments, agencies and officeholders to provide details for present income tax laws of the income paid to State officials, including those, like judges, in the "higher levels of government" of the State. Yet for decades "employers" (including State government "employers") have been obliged by federal law to provide such information361. Such duties obviously impose burdens on the State and on its employees and officers. They involve costs to the State. But they are relatively minor and strictly incidental to the operation of valid federal taxation laws. The claim that the imposition of the duty provided in this case is constitutionally impermissible, as an invasion of the employment autonomy of a State as a constituent part of the Commonwealth, is unconvincing. So is the contention that susceptibility to federal judicial review (if such be the case) would be impermissible without express consent of State law in the case of a State officeholder such as the State Government Actuary362. In Re Australian Education Union; Ex parte Victoria363, this Court emphasised the need to respect the integrity and autonomy of the States in the context of the operation of s 109 of the Constitution364. That section presents difficulties for the attempted imposition on federal officers of duties imposed by State law without the express and valid agreement of a law of the Federal Parliament. However, the same problem is not presented by the incidental imposition upon State officers of relatively limited obligations inherent in the carrying into effect of valid federal laws. The extreme argument of autonomy advanced for the first plaintiff would deny the integrated character of the Australian federation365. It would forbid the Federal Parliament not only from enacting laws obliging the States to provide information on the remuneration paid to State employees. It would also forbid the imposition of obligations to deduct, and remit, taxation at source. Yet for decades, these have been accepted and sensible features of the Australian taxation system. They are laws of broad 361 cf Income Tax Assessment Act 1936 (Cth), ss 221C, 221EAA (but see s 221DA). 362 cf Re Cram; Ex parte NSW Colliery Proprietors' Association Ltd (1987) 163 CLR 363 (1995) 184 CLR 188. 364 (1995) 184 CLR 188 at 229-230. See also R v Hughes (2000) 202 CLR 535 at 553 365 R v Duncan; Ex parte Australian Iron and Steel Pty Ltd (1983) 158 CLR 535 at 560; R v Hughes (2000) 202 CLR 535 at 566-568 [67]-[73]. Kirby application, affecting employees and high officeholders of the States alike. I am unconvinced that the imposition of such incidental burdens on State officials is constitutionally forbidden366. It falls far short of the "conscription" of State officials that (except perhaps in wartime or like emergency under the defence power) would be forbidden to federal law367. It follows that the objections368 to the statutory duty to perform actuarial calculations do not avail the first plaintiff. Even if those arguments were made good, they would at most be a reason for severing the offending provisions, leaving the remainder of the legislation in tact. The Commissioner of Taxation would simply have to obtain the necessary raw information from the State369 and perform the calculation for himself. In all other respects I agree with what is said in the joint reasons concerning the heads of challenge mentioned above. This conclusion confines the point of divergence in my reasons to the last remaining argument about constitutional validity. It involves the claimed infringement of the implied limitation on the legislative powers of the Commonwealth, derived from the character of a State as an organ of government and the federal character of the Constitution370. The implied federal limitation The federalism limitation: The joint reasons express the opinion that the first plaintiff succeeds upon the remaining constitutional argument. This involves the contention that the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Imposition Act 1997 (Cth) and the Protected Funds Assessment Act are invalid wholly, or at least in respect of their application to the first plaintiff, because they infringe limitations on the legislative power of the Federal Parliament arising from "the very frame of the Constitution" as stated in Melbourne Corporation v The Commonwealth ("Melbourne Corporation")371. That decision represented something of a retreat 366 cf Re Wakim; Ex parte McNally (1999) 198 CLR 511 at 601 [190]-[191]. See also R v Duncan; Ex parte Australian Iron and Steel Pty Ltd (1983) 158 CLR 535 at 560, 563, 589; cf The Commonwealth v New South Wales (1923) 33 CLR 1 at 27- 367 cf Printz v United States 521 US 898 (1997); Reno v Condon 528 US 141 (2000). 368 Chiefly advanced by the Attorneys-General for South Australia and Western Australia, intervening. 369 Protected Funds Assessment Act, s 33(1). 370 Melbourne Corporation v The Commonwealth (1947) 74 CLR 31. 371 (1947) 74 CLR 31 at 83 per Dixon J. Kirby from the high water mark of this Court's approach to the exposition of the scope of federal legislative powers following the Engineers' Case372. Although, in the end, I have reached a conclusion on this argument different from that stated in the joint reasons, I agree with much of the analysis appearing there. Ample federal legislative power: The Commonwealth supported the constitutional validity of its legislation on the basis of the Federal Parliament's constitutional power to make laws with respect to taxation. That power is conferred in very large terms. The only relevant express restriction, stated in the grant, forbids discrimination "between States or parts of States". That restriction is not applicable in this case. The mere fact that, because a federal law has differential consequences for different States, as a result of factual or legal distinctions between them, is not sufficient to infringe the express constitutional The first plaintiff did not contest that employees or officers of a State are normally subject to federal taxation law. He did not argue for a restoration of the strict notion of intergovernmental immunity. It may be accepted that the express limitation stated in s 51(ii) itself, or the restriction expressed in s 114 of the Constitution, do not constitute an exhaustive statement of the restrictions on the federal legislative power with respect to taxation as that power impinges on the States. So far as s 114 is concerned, the relatively narrow approach of this Court to the institutions that may be viewed as the "State" for the purposes of that section374, suggests that it falls short of expressing the entire zone of immunity of the property and activities of the State envisaged by the Constitution375. In the light of experience and governmental realities, it is wrong to take at face value the mantra that "the power to tax involves the power to destroy"376. Nevertheless, it remains true that the federal power over taxation, as interpreted over many decades, affords a substantial explanation of the growth of the 372 (1920) 28 CLR 129; cf Hill, "Revisiting Wakim and Hughes: The Distinct Demands of Federalism", (2002) 13 Public Law Review 205 at 227 citing Sawer, "Implication and the Constitution", (1948) 4 Res Judicatae 15 and 85. 373 See joint reasons at [117]-[118]. An example of this form of difference would be that created by the contributory judicial pension in Tasmania compared to the other States' schemes being non-contributory. 374 SGH Ltd v Commissioner of Taxation (2002) 76 ALJR 780; 188 ALR 241. 375 cf joint reasons at [142]. 376 Joint reasons at [140] citing McCulloch v Maryland 17 US 159 at 210 (1819); cf joint reasons at [133]. Kirby legislative and economic powers of the Commonwealth, often at the expense of the States. The mere fact that a taxation measure may have purposes beyond the raising of revenue and that it may impose on the States various burdens and disadvantages is not a reason for holding a law to be beyond the Federal Parliament's power with respect to taxation or contrary to implied federal limitations upon that power377. For invalidity, much more is required. In this way I arrive at the implied limitation expressed in Melbourne Corporation. Defining the implied federal limitation in precise terms presents a difficulty that has been acknowledged by this Court in many cases378. Everyone may accept the existence of some such limitation and the need to discover its operation by reference to matters of substance rather than form379. Everyone may agree that a federal law on taxation, or anything else, that threatens the continued the States as separate governmental entities would be existence of constitutionally invalid. Yet, in the nature of things, it is unlikely that a frontal attack upon the existence of the States would arise in the form of federal law. In the world of practicalities, the problems are typically ones of degree, presented at the margins of constitutional power. So far, this Court has identified two features of laws that are impermissible in this respect. The first is a law that "involves the placing on the States of special burdens or disabilities"380. Such a discriminatory law is "directed against", "singles out", or is "aimed at" the restriction or control of the States381. The second is a generally applicable law that operates to reduce the capacity of the States to function as governments within the federation established by the Constitution. In the latter case, although there is no "discrimination" and although the law is one of general application, it may be invalid if it diminishes, to an impermissible degree, the capacity of the States to function as the Constitution contemplates382. 377 Joint reasons at [139]. 378 Joint reasons at [145]-[146]. 379 cf joint reasons at [124]. 380 Queensland Electricity Commission v The Commonwealth (1985) 159 CLR 192 at 217; cf Re Residential Tenancies Tribunal (NSW); Ex parte Defence Housing Authority (1997) 190 CLR 410 at 507. 381 Queensland Electricity Commission v The Commonwealth (1985) 159 CLR 192 at 206, 217; joint reasons at [119]. 382 Queensland Electricity Commission v The Commonwealth (1985) 159 CLR 192 at Kirby In so far as a difference has emerged in this case between the joint reasons and the reasons of McHugh J, I agree with the former that the two aspects of the implied limitation upon federal legislative power, noted in past decisions, are essentially manifestations of the one constitutional implication. Both are referable to the underlying conception concerning the nature of the Australian federation. I share the view that each identified defect is to be determined by reference to the effect of the impugned legislation on the continuing existence of the States, and whether there is an impermissible degree of impairment of the State's constitutional functions. The presence of discrimination against a State may be an indication of an attempted impairment of its functions as the Constitution envisaged them. But any discrimination against States must be measured against that underlying criterion. It affords the touchstone of the implied limitation explained in the Court's decision in Melbourne Corporation. It has been described as the "firm ground" upon which the reasoning in that case stands383. Impairment of State polities: This said, it is not any impairment that is sufficient to establish invalidity of a federal statute384. This Court should resist arguments that represent a disguised attempt to resuscitate the implied its immunities doctrine whereby any encroachment upon a State, instrumentalities, officers or employees is considered impermissible for federal legislation385. Federalism in Australia, as it has been given shape by statute law and decisions of this Court, has evolved into a high degree of cooperation and of federal leadership in matters lying within the powers of the Commonwealth. That is not to deny that a tension exists between the Federal and State Parliaments, especially in a setting such as the present, where the general power of the Federal Parliament over taxation effectively gives the Commonwealth primary access to large economic resources. However, the mere encroachment of legislation, fiscal or otherwise, upon a State, does not amount to an impermissible impairment sufficient to render the federal legislation invalid. Were it so, a vast amount of federal legislation upheld by this Court, having direct and indirect consequences for the States, their functions and officeholders, would have to be struck down as invalid to the great damage of the integrated features of the Australian Commonwealth. 383 Victoria v The Commonwealth (1971) 122 CLR 353 at 402. 384 cf Re Australian Education Union; Ex parte Victoria (1995) 184 CLR 188 at 228- 385 The Federated Amalgamated Government Railway and Tramway Service Association v The New South Wales Railway Traffic EmployΓ©s Association (1906) 4 CLR 488. Kirby In every case in which the Melbourne Corporation implication is invoked the issue for decision is one of degree. There is no exact formula to determine the extent to which legislation must burden a State before it will be found invalid. However, some guidance may be sought from earlier statements of members of this Court. For example, as Windeyer J put it, a federal law will be invalid where the subject State is "sterilized" or "its status and essential capacities" are "impaired in a substantial degree"386. The language of "control"387 and "impact" are unhelpful. It is the capacity of a State to function, rather than the mere ease with which its constitutional functions can be exercised, that is determinative388. In order to come to a conclusion on this issue, it is the operation and effect of the federal legislation that must be analysed. The protection of the continuing existence of the States as political entities is not an abstract notion. It is a concept that addresses the sum of the executive, legislative and judicial arms of government that together constitute the State as a polity. It is unnecessary in this case to consider the outer limits of what represents "the State"389 for the purposes of the constitutional implication. The agency in question in the first plaintiff's case is the Supreme Court of New South Wales. It was not contested that such a court represents an essential branch of the government of the State390. It follows that a substantial impairment of the functions of the Supreme Court or the ability of the State to determine its composition would certainly constitute an impermissible encroachment by the Federal Parliament upon an essential component part of the government of a State. Such an impairment would render invalid any such federal legislation. The issue in these proceedings therefore becomes whether such an impermissible encroachment has been demonstrated. The difference between my reasoning and that of the majority involves my analysis of the effect of the surcharge legislation upon the State and its judicial institution. In my opinion, 386 Victoria v The Commonwealth (1971) 122 CLR 353 at 398, citing Attorney- General for Ontario v Israel Winner [1954] AC 541 at 578. 387 eg Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 388 The Commonwealth v Tasmania (The Tasmanian Dam Case) (1983) 158 CLR 1 at 139-140; Western Australia v The Commonwealth (Native Title Act Case) (1995) 183 CLR 373 at 481; cf joint reasons at [146]. 389 cf Queensland Electricity Commission v The Commonwealth (1985) 159 CLR 192 at 218 per Mason J. 390 Joint reasons at [147]. Kirby there is no encroachment by the federal law such as attracts the implied constitutional prohibition. Selection and retention of State judges: To ensure the integrity of the judicial arm of a State and the autonomy of the State more generally, the State must have power over the selection and retention of the members of its courts, especially the Supreme Court391. This assertion can be supported by earlier statements of this Court, holding that the States must have control over the terms and conditions of the employment of its officeholders, especially those in "high" office, of which judicial office is clearly one392. Specifically in relation to judges, this power is necessary to ensure the continued recruitment to, and retention within, State courts of competent persons with an "independence of mind and spirit"393. This is how the level of remuneration of State judges is functionally relevant to the implied constitutional limitation which the first plaintiff invokes in this Court. Remuneration is not pertinent because it is important to the comfort and lifestyle of the judge and the judge's family. Its governmental importance lies in its function in attracting and retaining as judges officeholders worthy of that name. This means officeholders in the government of the State who exhibit the characteristics essential for the judicial office that the Australian Constitution contemplates for importantly competence, independence and impartiality. In this sense, the independence of the State judiciary, although not a separate ground of attack on the validity of the impugned federal laws, lies at the heart of the first plaintiff's contentions that the impact of the challenged surcharge on the State judicial institution undermines its essential governmental features. the States β most I do not agree with Brennan J's statements in Re Australian Education Union; Ex parte Victoria394, in dissent, so far as they imply that any burden on the "emoluments" provided by the State to its judicial officers constitutes an impermissible burden, rendering the legislation invalid. Were this the test, federal taxes upon such State "judges" would be prohibited. This is not the law and has not been so in this country since at least 1920. It could not be disputed that the judicial pension entitlements of the first plaintiff constitute an important part of his "remuneration". Obviously, there is a 391 Joint reasons at [165]; cf reasons of Gleeson CJ at [28]. 392 Re Australian Education Union; Ex parte Victoria (1995) 184 CLR 188 at 233; Victoria v The Commonwealth (Industrial Relations Act Case) (1996) 187 CLR 393 Joint reasons at [160] citing United States v Hatter 532 US 557 at 568 (2001). 394 (1995) 184 CLR 188 at 233; cf joint reasons at [166]. Kirby close relationship between the aggregate benefits of salary, allowances and pension rights395. Nor could it be disputed that such pension rights amount to an attractive entitlement of office, playing a part in the recruitment to judicial office, whether from private legal practice, or elsewhere. Such entitlements would also represent an inducement relevant to the retention in office of judges of appropriate skill and experience396. The majority in this Court has concluded that the imposition of federal taxation in the form of the surcharge upon judges based on the notional contributions for pension entitlements and the mechanisms provided for its collection, infringe the States' control over the terms and conditions of the engagement of judges, impairing the ability of the States to recruit, and retain, appropriate officers in their judiciary and in this way infringe the implied federal limitation invoked by the first plaintiff. I disagree. I contest the proposition that imposition of such a tax has a significant and detrimental effect on the power of a State to determine the terms and conditions affecting the remuneration of its judges. This Court has repeatedly upheld the broad power of the Federal Parliament to make laws with respect to taxation in the most ample terms. A wide power is essential for the effective discharge by the Commonwealth of all of its national responsibilities, as envisaged by the Constitution397. Self-evidently, taxation laws of general application have long had important consequences for the States, their instrumentalities, employees and officers, including those holding high positions in the government of the States such as judges. Yet this Court has repeatedly resisted attempts by the States to narrow the federal taxation power, or to secure immunity from federal taxes, by reference to implied limitations on the Commonwealth's law-making capacity to affect the States. It did so most recently in the challenges to the federal payroll tax398 and to the fringe benefits tax399. As a matter of constitutional principle, no different approach should be adopted with respect to the laws here in question. 395 Joint reasons at [155]. 396 Joint reasons at [159]. 397 cf Luton v Lessels (2002) 76 ALJR 635 at 654 [117]; 187 ALR 529 at 557 citing United States v Butler 297 US 1 at 61 (1936). 398 Victoria v The Commonwealth (1971) 122 CLR 353. 399 State Chamber of Commerce and Industry v The Commonwealth (The Second Fringe Benefits Tax Case) (1987) 163 CLR 329; cf Queensland v The Commonwealth (The First Fringe Benefits Tax Case) (1987) 162 CLR 74. Kirby Nor does the evidence support the argument of the first plaintiff that "not many Judges should be prepared to continue to serve after the first opportunity for retirement". A review, conducted by the New South Wales Government Actuary's Office on the judges' pension scheme of that State400, received without objection, noted that "[j]udges who retire at older ages have always received a lower value of benefit since payments will on average be paid for shorter periods". Whilst commenting, fairly, that "[t]he effect of the surcharge is that in future [judges] will also receive lower amounts of pension payments, which is a perverse outcome for longer service", the data produced suggests that, despite financial disincentives, many judges in the past have continued to serve until the statutory retiring age401: "Seven judges, who had completed 10 years service, retired within 12 months of reaching age 60, twelve judges who completed 10 years after attaining age 60 retired within 3 months of qualifying for a pension, and seventeen judges retired at or near age 72." The evidence before this Court does not establish the proposition β nor is it open to reasonable inference β that the established pattern of judicial service would alter significantly following the introduction of the surcharge. There is every reason to believe that it would not. Despite financial disadvantages, appropriate appointees will continue to be attracted to, and elect to remain within, judicial office, federal and State. They will do so because of the non-financial features of judicial office. The submission that the new federal surcharge would alter this, in ways seriously damaging to the government of the States, is speculative, hypothetical and unproved. It should be rejected. Whatever arguments exist for improving the general level of judicial remuneration in Australia, having regard to its relative decline in recent decades402, they have no bearing upon the constitutional validity of the federal law challenged in this case. I would infer that some potential appointees, suitable for appointment as State judges, might now reject the offer of judicial appointment because of the comparative decline of the financial rewards in consequence of the surcharge. Yet given the general applicability of the surcharge in some form upon high income earners, most potential appointees would be likely to face a decline in 400 New South Wales Government Actuary's Office, Judges' Pension Scheme (NSW), Actuarial Review as at 30 June 2001. 401 New South Wales Government Actuary's Office, Judges' Pension Scheme (NSW), Actuarial Review as at 30 June 2001 at 7. 402 cf Atkins v United States 556 F 2d 1028 (1977). Kirby post-retirement income even if they were to remain in their alternative employment. Some, who are appointed, might now elect to leave office earlier than they otherwise would have done. But there have always been injustices and anomalies in laws imposing taxation, as in the judicial pension scheme itself. The surcharge has now been in operation for five years whilst this case was being conceived, argued and decided. I would reject any suggestion that, in that time, there has been a fall off in the number and quality of judicial appointments, State or federal, in this country. In the future, as in the past, most persons attracted to judicial office are unlikely to nominate remuneration as one of the chief attractions of appointment. The inducements typically lie elsewhere β in the interest and responsibility of the work; the status and public respect for the judicial office; the opportunity for a change of direction involving broader public service; and the respite from the intense pressures of other legal employment. Such inducements remain unchanged. Unfairness and discrimination: The first plaintiff argued that the mechanism by which the surcharge was imposed, upon the superannuation member rather than the provider, constituted an impermissible discrimination against State judges, rendering the legislation invalid. However, mere discrimination does not amount to impermissible interference by the Federal Parliament in the basic constitutional functions of a State. As the joint reasons point out, discrimination does not have an independent operation in this context403. It is only if the discrimination has the effect of impairing the constitutional functions of the State that the federal prohibition implied from the Constitution is enlivened. Various incidents of the surcharge upon judicial incomes were cited by the first plaintiff to establish the financial burden that the surcharge will impose upon the first plaintiff and the disincentive that it may occasion to his continuing to serve in judicial office after the first moment at which he becomes entitled to retire on a pension404. From such features of the operation of such laws, the other members of this Court reach the conclusion that they constitute an impermissible disability or burden imposed upon the operations and activities of the State which, for that reason, are constitutionally invalid. I do not agree. The legislation may indeed be viewed as unfair to those in the position of the first plaintiff. Indeed, he argued that its operation was "grossly unfair and irrational". Other recipients of superannuation benefits do not become personally liable for the surcharge amount, unless the superannuation provider "passes on" that liability to them. However, this Court has repeatedly recognised that it is for 403 Joint reasons at [123]. 404 Joint reasons at [169]. Kirby the Parliament to select the subjects of taxation. It is not the role of this Court to invalidate a new federal tax simply because it regards some aspects of the tax unfair405, unwise, oppressive, discriminatory as between taxpayers or based upon disputable fictions. By the Constitution, such considerations are reserved to the Parliament accountable to the electors β not to this Court. The fact that the first plaintiff is a judicial officer whose complaints of unfairness may resonate in judicial ears is no reason to depart from the limited role enjoyed by this Court under the Constitution. Many tax laws (especially when new) may be subject to criticisms similar to those voiced by the first plaintiff. Many provisions of existing tax law are founded on fictional hypotheses and some on contestable administrative calculations. Yet if the constitutional power exists for the legislation, it is not lost because the tax imposed is inconvenient to the States or even arguably unfair to some of their senior employees and officeholders. Much more is required to demonstrate a loss of the federal power with respect to taxation. The law reports are full of cases, and not only in wartime406, in which this Court has upheld the constitutional validity of federal taxing statutes imposing extremely burdensome obligations upon the taxpayer. The introduction of liability to provisional tax407, obliging advance payment of taxation in respect of a future year's income at the same time as paying the taxes levied in the current year, is a clear case in point. In particular circumstances such a tax might be much more onerous on a taxpayer than the legislation whose constitutionality is attacked in this case. Yet after the overthrow of the doctrine of implied immunities408, the validity of such measures409. It has eschewed the temptation to turn criticism of the burdens of the mechanics of collecting the tax into defects of constitutional validity. Once begun, in respect of a burden upon judges, there is no way of knowing where such legal alchemy might finish in response to the complaints of other taxpayers. this Court has consistently upheld 405 Cape Brandy Syndicate v Inland Revenue Commissioners [1921] 1 KB 64 at 71 where Rowlatt J pointed out "[t]here is no equity about a tax". 406 South Australia v The Commonwealth (1942) 65 CLR 373; cf The State of Victoria v The Commonwealth (1957) 99 CLR 575. 407 Income Tax and Social Services Contribution Assessment Act 1936-1956 (Cth), ss 221YA. 408 cf The Municipal Council of Sydney v The Commonwealth (1904) 1 CLR 208 at 409 Moore v The Commonwealth (1951) 82 CLR 547; Commissioner of Taxation v Clyne (1958) 100 CLR 246. cf Wynes, Legislative, Executive and Judicial Powers in Australia, 5th ed (1976) at 181-184. Kirby In my view, the effect410 of the federal legislation impugned in these proceedings does not even come close to jeopardising the selection and retention of State Supreme Court judges. It falls far short of impairing, in a substantial degree, the State's capacity to function as an independent constitutional entity. The decision of this Court to the contrary pushes the implied constitutional prohibition to a new and radical application that has no foundation in the Constitution. Since the impugned federal laws were enacted, the New South Wales Parliament has demonstrated the capacity of that State to adapt the pension arrangements for its judges, including the first plaintiff, to the new federal legislation, in order to ameliorate any hardships to retired judges or other beneficiaries under the judicial pension scheme411. No doubt similar or other provisions could be implemented by the States if they really felt that their court system or the judicial office were endangered by the federal law. Such measures contradict the suggestion of a relevant constitutional impairment. The surcharge, applying as it does directly to judges in the position of the first plaintiff, imposes a financial burden upon them. That is true. But it is a burden that is imposed by a valid federal taxation law, and, as such, has to be borne by those subject to it. Compared with some other lawyers and certain other income earners, judicial officers in Australia may not be particularly well remunerated. Yet, compared to the great mass of the population β including many of those subject to the superannuation contributions surcharge, they are very well remunerated indeed. It is unconvincing to suggest that the burden exacted by the impugned law could affect the proper discharge of the judicial role of persons such as the first plaintiff, their determination of matters coming before them in their judicial capacity or their integrity in carrying out their respective functions. In these circumstances I am unconvinced by the argument that the State judicial institution is damaged or weakened in a way that substantially impairs the capacity of the States to function as the Constitution envisaged that they would. The invocation of the implied constitutional limitation, defensive of the capacity of the State to function as such, fails. Approaches in other jurisdictions Final courts and judicial remuneration: I turn finally to a number of overseas decisions to which some reference was made by the parties during argument. In particular, these were decisions from Canada and the United States 410 Commonwealth v Tasmania (The Tasmanian Dam Case) (1983) 158 CLR 1 at 214 per Brennan J, where his Honour stated that the consideration which determines the invalidity is "the actual operation" of the legislative measures. 411 Judges' Pensions Amendment Act 1998 (NSW). See the joint reasons [172]-[173]. Kirby in which issues relating to the liability of judges to pay various taxes on different aspects of their remuneration (including pensions) were considered. Care must be taken in making a comparison with overseas decisions because of differences in the constitutional provisions and in the development of constitutional doctrine. However, in my view the principles upon which those decisions were based support the Commonwealth's submissions and the conclusions that I have reached. Canadian cases: In Canada, until 1975, the judges of federally appointed superior courts were, like judges in most parts of Australia, entitled to non- contributory pensions under the Judges Act 1970 (Can)412. By the Statute Law (Superannuation) Amendment Act 1975 (Can), it was provided that judges appointed before a specified date in 1975 would contribute 1.5% of their salary towards the cost of their pensions (intended to be a contribution towards improved pensions for spouses and children of judges). Judges appointed after that date would contribute 6% of their salaries towards the cost of pensions, with a provision for further contribution for future inflation. This legislation was later followed by a significant increase in the salaries and pensions of all such judges. In R v Beauregard413, a superior court judge challenged the constitutional validity and application of the amending law. It is unnecessary to notice the detail of his arguments. The Supreme Court of Canada dismissed his challenge. The majority held that there was no relevant "federalism" limitation on the power of the Canadian Parliament to legislate for the impugned contributions by superior court judges'414. This was despite the shared responsibilities for the administration of superior provincial courts between the federal and provincial polities. Section 92 of the Canadian Constitution gives the provincial parliaments legislative power with respect to the administration of justice and the constitution, maintenance and organisation of provincial courts415. Critically, however, s 100 of that Constitution assigns to the federal parliament the power to enact provisions for the remuneration (including pensions) of such judges. Dickson CJ, writing for the majority, noted that, like other citizens, judges were obliged to "bear their fair share of the financial burden of administering the country"416. They were liable to pay the "general taxes of the land"417. The 412 R v Beauregard [1986] 2 SCR 56 at 62-63. See also Valente v The Queen [1985] 2 SCR 673. 413 [1986] 2 SCR 56. 414 [1986] 2 SCR 56 at 80-81. 415 [1986] 2 SCR 56 at 79-80. 416 With whom Estey and Lamer JJ agreed: [1986] 2 SCR 56 at 76. Kirby Court made it clear that Parliament's powers were not unlimited. If it had been shown that the impugned federal law was enacted for "improper or colourable" purposes, or if there were discriminatory treatment of judges when compared to other citizens418, issues might arise that could demand a conclusion that the law was beyond power as contrary to the Canadian Constitution419. A challenge by reference to the Canadian Bill of Rights was also rejected. Addressing the arguments pointing to the fact that the measures and mechanisms applied specially and differentially only to judges, Dickson CJ420 acknowledged that this was so. However, he went on421: "Conceding the factual difference that s 29.1 of the Judges Act is directed only at judges, I fail to see that this difference translates into any legal consequence. β¦ At the end of the day, all s 29.1 of the Judges Act does, pursuant to the constitutional obligation imposed by s 100 of the Constitution Act, 1867, is treat judges in accordance with standard, widely used and generally accepted pension schemes in Canada." To the same effect are the later remarks of the Supreme Court of Canada in Re Provincial Court Judges422. That case involved four appeals raising common issues concerning whether provincial governments and legislatures in Canada could reduce the salaries of already appointed provincial court judges (as part of budget tightening measures aimed at reducing salaries in the public sector). Lamer CJ, for the majority, made it plain that Beauregard stood for the proposition that the Canadian Parliament could effectively reduce the salaries of superior court judges to the extent of imposing new income tax and other financial burdens on them423. He pointed out that "the contributory pension scheme for superior court judges at issue [in Beauregard] was not part of a scheme for the public at large, and in this sense had discriminated against the judiciary vis-Γ -vis other citizens". Yet that fact had not been regarded as 417 [1986] 2 SCR 56 at 76 applying Judges v Attorney-General of Saskatchewan [1937] 2 DLR 209 (PC). 418 [1986] 2 SCR 56 at 77. 419 s 100. See [1986] 2 SCR 56 at 83. 420 [1986] 2 SCR 56 at 61. 421 [1986] 2 SCR 56 at 77. 422 [1997] 3 SCR 3. 423 [1997] 3 SCR 3 at 95-96 [150]. Kirby "constitutionally significant"424. Likewise, a salary cut for judges in company with other public employees and officeholders did not involve singling them out for differential treatment425. On the other hand, "if superior court judges alone had their salaries reduced, one could conclude that Parliament was somehow meting out punishment against the judiciary for adjudicating cases in a particular way"426. It is unnecessary to consider the applicability of these conclusions in an Australian context. Australian doctrine, derived from the implications within Ch III of the Constitution concerning the integrated Judicature and from the "very frame of the Constitution" and the nature of federation it creates, is more elaborate than that so far expounded in Canada. However, it is sufficient to notice the extent to which the Canadian Supreme Court treated as permissible in a federal context measures that have the practical purpose and effect of assimilating judges with other citizens (or only those receiving remuneration from the public purse) so far as laws involving taxation upon their remuneration (including pensions) are concerned. United States cases: In the United States, the Supreme Court has adopted a similar approach. Despite the Compensation Clause, federal judges in that country have gradually lost the immunity from universal taxation laws. This has been so although such laws necessarily have the effect of reducing a judge's take- home pay427. State judges have also lost that immunity428. In United States v Hatter429, the majority of the Supreme Court430 concluded that there was no offence to the Compensation Clause in the extension of generally applicable Medicare taxes to current as well as newly appointed federal judges together with federal employees. The Compensation Clause of the US Constitution was held to prohibit taxation that singled out judges for especially unfavourable treatment. According to the Supreme Court majority, it 424 [1997] 3 SCR 3 at 97 [153]. 425 [1997] 3 SCR 3 at 97-98 [154]. 426 [1997] 3 SCR 3 at 99 [156]. 427 cf United States v Hatter 532 US 557 at 583-585 (2001) per Scalia J. 428 See these reasons at [247]. 430 Rehnquist CJ, Kennedy, Souter, Ginsburg and Breyer JJ; Scalia and Thomas JJ dissenting in part. Kirby did not forbid Congress enacting a law imposing non-discriminatory taxes (including an increase in rates or a change in conditions) upon judges, as on other taxpayers431. The majority in Hatter432 endorsed the opinion of Holmes J (with whom Brandeis J had agreed), dissenting in Evans v Gore433, to the effect that the Compensation Clause offers "no reason for exonerating [a judge] from the ordinary duties of a citizen, which he shares with all others. To require a man to pay the taxes that all other men have to pay cannot possibly be made an instrument to attack his independence as a judge." In like language in Hatter, Breyer J, for the majority, remarked434: "There is no good reason why a judge should not share the tax burdens borne by all citizens." His Honour went on to say that even the constitutional judicial compensation guarantee could not justify a "special judicial exemption from a commonly shared tax"435. Whilst other taxing provisions were struck down in Hatter, as involving discrimination against judges, this was done on the basis that the statute did not "equalize with any precision" judges and other federal employees to which the impugned Social Security tax was extended436. It was held that the statutory amendments discriminated against the judges. They were said to single out sitting federal judges for unfavourable treatment because the law, as it applied, had effectively imposed upon them a new financial obligation which was not imposed on other federal employees437. It seems clear that, in the United States, as in Canada, the discriminatory and unfavourable treatment of judges has been 431 532 US 557 at 567 (2001). 432 532 US 557 at 570 (2001). 433 253 US 245 at 265 (1920). 434 532 US 557 at 571 (2001). 435 532 US 557 at 571 (2001). 436 532 US 557 at 574 (2001). 437 532 US 557 at 572 (2001). Kirby treated as the critical criterion for the constitutional validity of taxing laws having an impact upon judicial remuneration. Applicability to the present case: Before this Court the first plaintiff did not submit that the new federal laws were a direct attack by the Commonwealth on the independence of the State judiciary. As I have pointed out, it is not clear that such an argument would have succeeded given the absence of an explicit provision in our Constitution covering State judges, as well as the limited application of the legislation to newly appointed judges only. Instead, the first plaintiff submitted that the legislation "undermines the judicial pension arrangements β¦ enacted by the States which have as their object the recruitment of appropriately qualified candidates for judicial office and ensuring the independence of the judiciary" and thus "would detract from the integrity and independence" of the State judicature. The very nature of a federal system of government imposes a special role on the judiciary. This makes the preservation of the competence, independence and impartiality of the judiciary a consideration important for the protection of the governmental functions of the component parts of the federation, including the States. At least in a federation such as Australia, where the State judiciary may be, and commonly is, vested with federal jurisdiction, it can be said that these features of the integrated judicature are part of the federal hypothesis which the Melbourne Corporation doctrine defends. Similar criteria have been expressed in relation to the implied federal limitation upon the taxation power as it impinges upon the States. The issue is thus whether the tax impermissibly singles out the States and their high government officeholders for special discriminatory treatment438. In the present case it could not be suggested that judges of the States had been singled out for unfavourable attention, in the form of the surcharge, in order to punish or disadvantage them for the performance of their judicial duties. Any such suggestion would be fanciful. Upon my analysis of the federal law impugned in the first plaintiff's case, there is no significant impairment of the States in the carrying out of their governmental functions. Nor is there any relevant discrimination against the judges of the States. Unequal treatment of judges in a like position is not established. In so far as there are particular laws that fall differentially upon the judges of the States when compared to other taxpayers they can be explained as they were in Beauregard. They are referable to the different nature of the post-retirement income arrangements of judges compared to other taxpayers, as well as the excessive caution on the part of the 438 Payroll Tax Case (1971) 122 CLR 353; Queensland Electricity Commission v The Commonwealth (1985) 159 CLR 192; cf joint reasons at [119]-[122]. Kirby Commonwealth regarding the requirements of s 114 of the Constitution439. The differentiation can be justified either as specifically favourable to the judges (as in the exclusion from the new tax of State judges already appointed) or as within the scope of the measures open to the Parliament to treat the notional value of entitlements derived from a non-contributory, unfunded pension as equivalent to contributory superannuation. I see no reason why this Court should now adopt an approach to the constitutional validity of a federal taxation law that is more protective of newly appointed judges in Australia than the approach followed by the Supreme Courts of Canada and the United States when confronted with taxing provisions having an impact on judicial remuneration. Nothing in the text of the Australian Constitution justifies a different approach. The decisional history in this Court suggests a contrary conclusion. The notion that the judges themselves would regard their offices as compromised by the surcharge is unpersuasive. The idea that reasonable members of the Australian public might come to such a conclusion, on the basis of the new federal surcharge on the superannuation entitlements or their equivalents in the case of high income earners, including judges, must be rejected. The public and the judges themselves, as La Forest J of the Supreme Court of Canada said, regard the judiciary as made of sturdier stuff440. Conclusions and disposition It is therefore "far too long a stretch"441 to hold that the imposition of a federal tax, payable by persons such as the first plaintiff on notional contributions for their pensions, imperils the State judicial institution. I do not accept that the federal taxing laws challenged in these proceedings affect the selection and retention of State judicial officers to such a degree that the State judiciary is placed in jeopardy of not fulfilling its constitutional functions. Only if that were shown would the essential governmental activities of a State be impaired and the continued existence and integrity of a State threatened, contrary to the constitutional implication invoked by the first plaintiff. The evidence in this case falls far short of such a gloomy estimate of the resilience of State governmental institutions in Australia β and the State judiciary in particular. The tax neither impedes the functioning of the States nor the independence of the judicature implicit in the Constitution. Other taxpayers 439 cf reasons of Gleeson CJ at [16]. I share the Chief Justice's doubts on this point. 440 Re Provincial Court Judges [1997] 3 SCR 3 at 192 [337]. See also at 197 [346]. 441 R v Beauregard [1986] 2 SCR 56 at 77 per Dickson CJ. Kirby cannot escape the burden of the surcharge. Their complaints of unfairness, if any, must be addressed to the Parliament and the Government, not the courts. In the past, Australian judges have shared equally prospective taxes of general application imposed on them without relevant discrimination. This case represents the first departure from that principle. In my view the departure has no constitutional or other legal validity. It appears to be contrary to the approaches taken by the final courts of Canada and the United States in analogous circumstances. I do not deny the premise that the Constitution is based on certain assumptions and contains implications442. But, with all respect, I find the invocation of the federal implication in this case unconvincing. When expressly stated constitutional guarantees443, and particular words in the Australian Constitution444, are read in ways that confine the rights of individuals, and when implied constitutional rights of persons arguably more vulnerable and needy are rejected445, it is singularly unconvincing to say that an unwritten implication can be invoked to protect from a federal taxing law the value of judicial pensions. Such an implication is unconvincing when virtually all other Australian taxpayers in receipt of equivalent remuneration have been subjected to a surcharge upon that element of their receipts. Least of all is such a conclusion convincing when the legal foundation of the implication is said to arise from the suggestion that the tax impairs, in a substantial degree, the very capacity of the States to operate as the Constitution envisaged for them. I would reject all of the first plaintiff's constitutional challenges. I agree in the conclusions and answers proposed in the joint reasons in respect of questions 1(a) and (b). 442 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520; Roberts v Bass (2002) 194 ALR 161 at 199-200 [145]-[146]. 443 eg under s 80 of the Constitution: Re Colina; Ex parte Torney (1999) 200 CLR 386; Cheng v The Queen (2000) 203 CLR 248; Brownlee v The Queen (2001) 207 CLR 278. 444 eg the word "appeals" in s 73 of the Constitution: Eastman v The Queen (2000) 203 CLR 1 at 79-89 [240]-[266]; Crampton v The Queen (2000) 206 CLR 161 at 445 eg the claims of Aboriginal plaintiffs to a constitutional implication of equality before the law: Kruger v The Commonwealth (1997) 190 CLR 1 at 45, 63-68, 142- 144, 153-157. See also Leeth v The Commonwealth (1992) 174 CLR 455 at 466- Kirby In relation to question 2, the question should be answered by stating that the federal legislation is valid. The first plaintiff should pay the costs of the Commonwealth. The Commonwealth should pay the costs of the second plaintiff. |
HIGH COURT OF AUSTRALIA Matter No S99/2015 MOUNT BRUCE MINING PTY LIMITED APPELLANT AND WRIGHT PROSPECTING PTY LIMITED & ANOR RESPONDENTS Matter No S102/2015 WRIGHT PROSPECTING PTY LIMITED APPELLANT AND MOUNT BRUCE MINING PTY LIMITED & ANOR RESPONDENTS Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited Wright Prospecting Pty Limited v Mount Bruce Mining Pty Limited [2015] HCA 37 14 October 2015 S99/2015 & S102/2015 ORDER Matter No S99/2015 Appeal dismissed with costs. Matter No S102/2015 Appeal and cross-appeal allowed. Set aside paragraphs 1β6 of the order of the Court of Appeal of the Supreme Court of New South Wales made on 9 December 2014 and, in their place, order that the appeal to that Court be dismissed with costs. The first respondent pay the appellant's and the second respondent's costs in this Court. On appeal from the Supreme Court of New South Wales Representation A J Myers QC with K A Stern SC and R J Hardcastle for the appellant in S102/2015 and the first respondent in S99/2015 (instructed by Clayton Utz Lawyers) N J Young QC with M J Darke SC and M A Izzo for the appellant in S99/2015 and the first respondent in S102/2015 (instructed by Allens) N C Hutley SC with J C Giles for the second respondent in both matters (instructed by Horton Rhodes) Intervener A C Archibald QC with M P Costello for Perron Iron Ore Pty Ltd, intervening (instructed by King & Wood Mallesons) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited Wright Prospecting Pty Limited v Mount Bruce Mining Pty Limited Contract β Construction of terms β Where contract concerned acquisition of rights in relation to temporary reserves and payment of royalties in respect of iron ore mined β Where royalty payable in respect of iron ore mined from "MBM area" β Whether "MBM area" refers to physical area of land or rights in relation to that land β Meaning of phrase "deriving title through or under". Contract β Construction of terms β Recourse to background or surrounding circumstances. High Court β Appellate jurisdiction of High Court β Precedential value of special leave reasons. Words and phrases β "commercial purpose", "deriving title through or under", "MBM area", "surrounding circumstances", "temporary reserves". Mining Act 1904 (WA), ss 48, 50, 53, 276, 277. FRENCH CJ, NETTLE AND GORDON JJ. Introduction Wright Prospecting Pty Limited ("WPPL"), Hancock Prospecting Pty Limited ("HPPL") (together "Hanwright"), Hamersley Iron Pty Limited ("Hamersley Iron") and Mount Bruce Mining Pty Limited ("MBM") entered into an agreement dated 5 May 1970 ("the 1970 Agreement"). These appeals arise out of a dispute about the construction of a provision of the 1970 Agreement concerning the payment of royalties by MBM in relation to ore mined from areas of land the subject of the Agreement. Under cl 2.2 of the 1970 Agreement, MBM acquired from Hanwright the entire rights in relation to the "MBM area", a term defined by reference to "temporary reserves" granted under the Mining Act 1904 (WA) ("the Mining Act"). Under cl 3.1 of the 1970 Agreement, royalties were payable to Hanwright on "[o]re won by MBM from the MBM area". The obligation to pay royalties extended to "all persons or corporations deriving title through or under" MBM to the MBM area. Hanwright commenced proceedings against Hamersley Iron and MBM in the Supreme Court of New South Wales, claiming that royalties were payable by MBM in respect of iron ore won from two areas known as "Eastern Range" and "Channar". The trial judge upheld Hanwright's claim against MBM1 and entered judgment for Hanwright against MBM in the amount of $130,816,256.832. The Court of Appeal of the Supreme Court of New South Wales allowed the appeal, in part3. Relevantly, the Court of Appeal agreed with the trial judge that "MBM area" referred to an area of land to which rights of occupancy had been transferred to MBM (rather than to the rights themselves) and that all of Eastern Range and part of Channar, referred to as "Channar A", are in the MBM area. However, the Court of Appeal also held that Hanwright was not entitled to royalties in respect of ore being won from Channar A because the ore was not being won or mined in that area by entities deriving title to that land "through or under" MBM. 1 Wright Prospecting Pty Ltd v Hamersley Iron Pty Ltd [2013] NSWSC 536. 2 Wright Prospecting Pty Ltd v Hamersley Iron Pty Ltd [No 2] [2013] NSWSC 709. 3 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2014] NSWCA 323. Nettle Gordon There are two questions on appeal to this Court. The first question is whether Eastern Range and Channar A are within the MBM area. The answer to that question turns on whether the term "MBM area" as defined in the 1970 Agreement refers to an area of land to which rights of occupancy had been transferred to MBM, or whether it refers to the rights themselves. That question is raised in S99 of 2015. If the answer to the first question is yes, the second question arises: whether the ore that has been mined in those parts of the MBM area was mined by entities "deriving title through or under" MBM. That question is raised in S102 of 2015. The appeal by WPPL in that matter is supported by the cross-appeal by HPPL in the same matter. It was accepted at trial, and was common ground before this Court, that if Eastern Range is within the MBM area then a royalty is payable because it is not disputed that ore is being won there by entities deriving title "through or under" MBM. The second question therefore relates only to Channar A. It is for this reason that the factual analysis at times focuses on Channar A. For the reasons that follow, the "MBM area" in cll 2.2 and 3.1 of the 1970 Agreement is the physical area indicated on the map attached to the 1970 Agreement as numbered blocks 4937H to 4946H and 4963H to 4967H. Ore has been mined in the MBM area (which includes Eastern Range and Channar A) by entities deriving title through or under MBM. MBM is therefore obliged, under cl 3.1 of the 1970 Agreement, to pay Hanwright a royalty on the ore being won from the MBM area. These reasons will address the relevant provisions of the Mining Act and the factual history including the sequence of private and State Agreements of which the 1970 Agreement is part. They will also refer to the relevant principles of construction and the two constructional questions raised by these appeals. The Mining Act β temporary reserves and mining leases Section 276 of the Mining Act permitted the relevant Minister to temporarily reserve any Crown land from occupation and to authorise any person to temporarily occupy it on such terms as the Minister thought fit. The marginal note in the Mining Act referred to these reserves as "[t]emporary reserves". The authorisation of temporary occupancy of Crown land was granted in respect of areas or blocks of land identified by numbers and described as temporary reserves. Often, for ease of reference, a temporary reserve was referred to by the prefix "TR" followed by the block number. The terms and conditions of any Nettle Gordon right of occupancy that exceeded 12 months and the terms and conditions of any renewal of that right of occupancy had to be tabled in Parliament4. Relevantly, s 48 of the Mining Act authorised the Governor to grant a lease of any Crown land for purposes including mining and all purposes necessary to effectively carry on mining operations for any mineral other than gold5. The area of land comprising the mining lease was to be "such as may be prescribed" but could not exceed 300 acres6. The term could not exceed 21 years from 1 January preceding the approval with a right to renew for 21 years7. There was no connection made in the Mining Act between the grant of a temporary reserve and the grant of a mining lease. Relevantly for present purposes, however, the grant of a mining lease over an area covered by a temporary reserve was only made following expiry or surrender of the temporary reserve8. The grants of temporary reserves and mining leases relevant to these appeals take their place within the framework of agreements made between the State and the grantees. Each agreement was approved or ratified by an Act of Parliament enacted for that purpose. The factual history, including reference to relevant State Agreements, follows. The 1962 Agreement and the 1963 Hamersley State Agreement During the 1950s and the 1960s, Hanwright identified bodies of iron ore in the Pilbara in Western Australia. In October 1962, Hamersley Holdings Pty Ltd ("Hamersley Holdings") and Hamersley Iron were formed. Hamersley Iron and MBM are both wholly owned subsidiaries of Hamersley Holdings. Hamersley Holdings is a subsidiary of Rio Tinto Ltd ("Rio Tinto"). Hamersley Iron was the operative company for what became known, within the Rio Tinto group, as the Hamersley project. s 50(1)(b). 8 Nicholas v Western Australia [1972] WAR 168 at 171. See also Delhi International Oil Corporation v Olive [1973] WAR 52 at 54; Lang and Crommelin, Australian Mining and Petroleum Laws, (1979) at [807.5]. Nettle Gordon Prior to December 1962, Hanwright was granted rights of occupancy over certain temporary reserves ("the 1962 Hanwright TRs"). These reserves became the subject of an agreement on 12 December 1962 between Lang Hancock (owner of HPPL), Ernest Wright (owner of WPPL) and Hanwright (as Vendors) and Hamersley Iron (as Purchaser) ("the 1962 Agreement") whereby the Vendors sold to Hamersley Iron all their right, title and interest in and to certain temporary reserves, the land comprised therein and all rights to prospect or mine granted thereby or flowing therefrom. The 1962 Hanwright TRs are unrelated to the temporary reserves the subject of these appeals. The 1962 Agreement provided for a royalty to be payable to Hanwright if ore was won from the area of the 1962 Hanwright TRs or from additional identified areas of land over which, at that time, Hanwright did not hold any rights of occupancy. Clause 24(iii) provided that, except where the context otherwise required: "The expression 'the Purchaser' shall β¦ include its successors and assigns and all persons or corporations deriving title through or under the Purchaser to any areas of land in respect of which an obligation to pay any amount has arisen or may arise". (emphasis added) That clause is at the heart of the second construction question identified earlier and is considered later in these reasons. Pursuant to a State Agreement approved9 on 13 November 1963 ("the 1963 Hamersley State Agreement"), Hamersley Iron acquired significant temporary reserves over the areas covered by the 1962 Agreement. The 1967 Hanwright State Agreement By a further State Agreement approved10 on 23 October 1967 ("the 1967 Hanwright State Agreement"), Hanwright was granted temporary reserves over areas which came to be numbered as blocks 4937H to 4967H (inclusive) ("the Temporary Reserves") for a period expiring on 31 December 1968, with successive renewals for a period of 12 months. The last renewal would expire on the earliest of a number of events. One event was the date Hanwright applied for a mining lease. Clause 8(1) of the 1967 Hanwright State Agreement permitted Hanwright to apply for a mining lease of part or parts of the total area of the Temporary Reserves not exceeding 300 square miles for a period of 21 years. Iron Ore (Hamersley Range) Agreement Act 1963 (WA). 10 Iron Ore (Hanwright) Agreement Act 1967 (WA). Nettle Gordon Eastern Range lies wholly within TR 4967H and Channar lies wholly within TR 4965H and TR 4966H. Accordingly, Eastern Range and Channar lie wholly within the Temporary Reserves. The 1968 Agreement On 31 January 1968, Hanwright and Hamersley Iron entered into an agreement ("the 1968 Agreement"). Under the 1968 Agreement, Hamersley Iron was to form a new company, MBM, of which Hamersley Iron would hold 75 per cent and Hanwright would hold 25 per cent. The 1968 Agreement also dealt with temporary reserves held by Hanwright, described as the "Mount Bruce Reserves", which included Eastern Range and Channar A. Ore won by MBM from the Mount Bruce Reserves would be subject to payment by MBM to Hanwright of a royalty. Importantly, if Hamersley Iron gave Hanwright written notice, certain temporary reserves held by Hanwright (including the Mount Bruce Reserves) were to be transferred to MBM. The 1968 Hanwright State Amendment Agreement The 1967 Hanwright State Agreement was amended by a further State Agreement ("the 1968 Hanwright State Amendment Agreement"), approved11 on 12 November 1968. Temporary reserves earlier issued to Hanwright were cancelled and the Temporary Reserves, which included TR 4965H, TR 4966H and TR 4967H, were issued to Hanwright. The 1970 Agreement and its implementation Hanwright, Hamersley Iron and MBM entered into the 1970 Agreement on 5 May 1970. The preamble records that: "1.1 Hanwright hold[s] Temporary Reserves in respect of areas indicated on the attached map (Appendix A) as the following numbered blocks: 4937H to 4967H inclusive and that these blocks (hereinafter referred to as 'Mount Bruce Temporary Reserves') are subject to the exercise of an option by [MBM]. 11 Iron Ore (Hanwright) Agreement Act Amendment Act 1968 (WA). Nettle Gordon There exists an agreement dated 31st January, 1968 between Hanwright and Hamersley [Iron] whereby Hamersley [Iron] may exercise an option over the Temporary Reserves. 1.4 All references to blocks or reserves include all present and future rights of Hanwright in relation to the above blocks and reserves including any extensions of the ore bodies located therein or any adjustments of the present indicated boundaries of the above Temporary Reserves arranged with the Western Australian Government." The 1970 Agreement recorded that Hamersley Iron relinquished its option under the 1968 Agreement12. Clause 2.2 provided that, in consideration of that relinquishment and the payment of $5 million by MBM to Hanwright, the Mount Bruce Temporary Reserves were divided between Hanwright and MBM so that in respect of: "temporary reserves 4947H to 4962H inclusive (hereinafter called 'Hanwright area') the entire rights thereto are restored to Hanwright and in respect to temporary reserves 4937H to 4946H inclusive and 4963H to 4967H inclusive (together hereinafter called 'MBM area'), MBM acquires the entire rights thereto." As is evident, as part of that division MBM acquired from Hanwright "the entire rights" to "temporary reserves 4937H to 4946H inclusive and 4963H to 4967H inclusive", which were collectively defined as the "MBM area". Channar A is wholly within the area that was covered by TR 4965H and TR 4966H. Eastern Range is wholly within the area that was covered by TR 4967H. Royalties were addressed in cl 3.1 of the 1970 Agreement, which relevantly provided that: "Ore won by MBM from the MBM area will be subject to the payment to Hanwright of a base Royalty of 2.5% on the same conditions as apply to the existing Agreement between Hanwright and Hamersley [Iron]". (emphasis added) Nettle Gordon The "existing Agreement between Hanwright and Hamersley [Iron]" was a reference to the 1962 Agreement. It was common ground that the obligation to pay royalties extended to "all persons or corporations deriving title through or under" MBM because cl 3.1 of the 1970 Agreement incorporated, by reference, cl 24(iii) of the 1962 Agreement. Under cl 3.1 of the 1970 Agreement, a royalty on ore won was therefore payable to Hanwright if two conditions were satisfied: (1) the ore was won from the MBM area; and (2) the ore was won by MBM or by an entity captured by the extended definition in cl 24(iii), which included the successors and assigns of MBM and all persons or corporations deriving title through or under MBM to any areas of land in respect of which an obligation to pay a royalty had arisen or may arise. Implementation of the arrangements in the 1970 Agreement required governmental approval13. The 1972 Mount Bruce State Agreement and what followed On 10 March 1972, a State Agreement was executed between the State of Western Australia and MBM ("the 1972 Mount Bruce State Agreement"). It was approved14 by an Act of Parliament on 16 June 1972. Under the 1972 Mount Bruce State Agreement, MBM was entitled to apply for a mining lease over the MBM area to a maximum area of 300 square miles. On 30 August 1972 Hanwright surrendered its rights of occupancy over the MBM area and on 18 April 1973 MBM was granted rights of occupancy over land covered by the MBM area (expressed to be retrospective to 30 August On 17 October 1974, a mining lease, ML 252SA, was granted by the State of Western Australia to MBM. This was for an area of 210.91 square miles, less than the 300 square miles maximum area that had been agreed in the 1972 Mount Bruce State Agreement. Upon the grant of ML 252SA, the rights of occupancy held by MBM over what remained of TR 4965H, TR 4966H and TR 4967H (within the MBM area) expired and were cancelled. 13 cl 10 of the 1970 Agreement. 14 Iron Ore (Mount Bruce) Agreement Act 1972 (WA). Nettle Gordon Eastern Range and secs 236 and 237 of ML 4SA From 17 October 1974 until 26 August 1977, there were no temporary reserves or mining leases over what remained of the former TR 4967H. It was unoccupied and unreserved land. However, on 26 August 1977, MBM was granted TR 6603H, which provided rights of occupancy over an area which covered a large part (if not the whole) of what remained of the former TR 4967H. Under a State Agreement approved15 on 27 May 1982, Hamersley Iron obtained the right to apply for a mining lease over the area covered by TR 6603H, subject to MBM surrendering TR 6603H. On 19 April 1982, MBM surrendered that temporary reserve. Accordingly, on 8 December 1982, Hamersley Iron was granted new sections of an existing mining lease, ML 4SA, which included part of the area covered by TR 6603H. Sections 236 and 237, included in the expanded ML 4SA, are Eastern Range. Hamersley Iron has held secs 236 and 237 of ML 4SA from grant onwards. As noted earlier, the only question regarding Eastern Range for resolution in these appeals is whether Eastern Range was in the MBM area, because it was common ground at trial, on appeal and before this Court that Hamersley Iron derived title to Eastern Range through or under MBM. Accordingly, if Eastern Range is in the MBM area, then a royalty is due to Hanwright for ore won from Eastern Range. Channar Channar, which was wholly within the MBM area, was not consistently treated. Part of it (referred to as Channar B) was included in secs 18 and 19 of ML 252SA. MBM pays royalties to Hanwright in respect of ore won from that area. There is no dispute as to Hanwright's entitlement to royalties over Channar B. The balance of Channar (referred to as Channar A) was not covered by ML 252SA. MBM's rights in respect of Channar A expired. From 17 October 1974 until 26 August 1977 (when MBM was granted TR 6603H), there were no temporary reserves or mining leases over what remained of the former TR 4965H and TR 4966H. It was unoccupied and unreserved land. 15 Iron Ore (Hamersley Range) Agreement Amendment Act 1982 (WA). Nettle Gordon Hamersley Exploration and ML 4SA On 21 April 1978, Hamersley Exploration Pty Limited ("Hamex"), a subsidiary of Hamersley Holdings and part of the Hamersley group, was granted rights of occupancy over TR 6663H, which covered a large part (if not the whole) of the reduced vacant area remaining of the former TR 4966H after the grant of ML 252SA. TR 4966H covered part of Channar A and was within the MBM area. On 2 May 1979, Hamex was granted rights of occupancy over TR 6982H and TR 6983H, parts of which covered what had been TR 4965H and TR 4966H (and which also covered part of Channar A). TR 6663H, TR 6982H and TR 6983H together covered the whole of Channar A. The applications by Hamex for TR 6663H, TR 6982H and TR 6983H identified that the area was on the boundary of ML 252SA, that the proposed work was (among other things) to continue structural and stratigraphic studies on existing data, that Hamex was a wholly owned subsidiary of Hamersley Holdings and that adequate funds were available for the programme. By the applications for, and granting of, ML 252SA and TR 6663H, TR 6982H and TR 6983H, the Hamersley group held (through a mining lease or right of occupancy over a temporary reserve) the entirety of the Channar area. In 1982, the 1963 Hamersley State Agreement was varied to provide that Hamersley Iron (and its successors and permitted assigns and appointees) could vary an existing mining lease (ML 4SA) to cover a number of new areas, subject to relevant rights of occupancy being surrendered16. On 19 April 1982, Hamex surrendered its rights of occupancy over TR 6663H, TR 6982H and TR 6983H. On 8 December 1982, Hamersley Iron was granted new sections of ML 4SA, including sec 238, which covered Channar A. Channar Joint Venture On 16 November 1987, CMIEC (Channar) Pty Ltd and Channar Mining Pty Limited ("the Channar Joint Venturers") entered into a joint venture agreement. Channar Mining Pty Limited is a wholly owned subsidiary of Hamersley Holdings and part of the Hamersley group. In 1987, the Channar Joint Venturers and Hamersley Iron entered into a State Agreement with the State of Western Australia ("the 1987 Channar State Agreement")17. Clause 15 of the 1987 Channar State Agreement provided that 16 That amendment agreement was approved by the Iron Ore (Hamersley Range) Agreement Amendment Act 1982 (WA). 17 Approved by the Iron Ore (Channar Joint Venture) Agreement Act 1987 (WA). Nettle Gordon the State would grant the Channar Joint Venturers a mining lease over both Channar A and Channar B on condition that Hamersley Iron surrender sec 238 of ML 4SA (Channar A) and MBM surrender secs 18 and 19 of ML 252SA (Channar B). On 22 March 1988, Hamersley Iron surrendered sec 238 of ML 4SA and MBM surrendered secs 18 and 19 of ML 252SA. The trial judge made two relevant and unchallenged findings: first, that "it may safely be inferred that MBM's surrender of secs 18 and 19 of ML 252SA and Hamersley Iron's surrender of sec 238 of ML 4SA β¦ were by arrangement between themselves and the Channar Joint Venturers" and, second, that those surrenders were both necessary for the grant of ML 265SA18. On 8 May 1988, the Channar Joint Venturers were granted ML 265SA for a term of 30 years over the combined areas of Channar A and Channar B. Applicable legal principles in these appeals The rights and liabilities of parties under a provision of a contract are determined objectively19, by reference to its text, context (the entire text of the contract as well as any contract, document or statutory provision referred to in the text of the contract) and purpose20. In determining the meaning of the terms of a commercial contract, it is necessary to ask what a reasonable businessperson would have understood those terms to mean21. That enquiry will require consideration of the language used by 18 Wright Prospecting Pty Ltd v Hamersley Iron Pty Ltd [2013] NSWSC 536 at [128]. 19 Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 at 656 [35]; [2014] HCA 7. 20 Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 at 350 (citing Reardon Smith Line Ltd v Yngvar Hansen-Tangen [1976] 1 WLR 989 at 995-996; [1976] 3 All ER 570 at 574), 352; [1982] HCA 24. See also Sir Anthony Mason, "Opening Address", (2009) 25 Journal of Contract Law 1 at 3. 21 Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 at Nettle Gordon the parties in the contract, the circumstances addressed by the contract and the commercial purpose or objects to be secured by the contract22. Ordinarily, this process of construction is possible by reference to the contract alone. Indeed, if an expression in a contract is unambiguous or susceptible of only one meaning, evidence of surrounding circumstances (events, circumstances and things external to the contract) cannot be adduced to However, sometimes, recourse to events, circumstances and things external to the contract is necessary. It may be necessary in identifying the commercial purpose or objects of the contract where that task is facilitated by an understanding "of the genesis of the transaction, the background, the context [and] the market in which the parties are operating"24. It may be necessary in determining the proper construction where there is a constructional choice. The question whether events, circumstances and things external to the contract may be resorted to, in order to identify the existence of a constructional choice, does not arise in these appeals. Each of the events, circumstances and things external to the contract to which recourse may be had is objective. What may be referred to are events, circumstances and things external to the contract which are known to the parties or which assist in identifying the purpose or object of the transaction, which may include its history, background and context and the market in which the parties were operating. What is inadmissible is evidence of the parties' statements and actions reflecting their actual intentions and expectations25. 22 Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 at 23 Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 at 352. See also Sir Anthony Mason, "Opening Address", (2009) 25 Journal of Contract Law 1 at 3. 24 Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 at 657 [35], citing Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 at 350, in turn citing Reardon Smith Line Ltd v Yngvar Hansen-Tangen [1976] 1 WLR 989 at 995-996; [1976] 3 All ER 570 at 574. 25 Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 at 352; Reardon Smith Line Ltd v Yngvar Hansen-Tangen [1976] 1 WLR 989 at 995-996; [1976] 3 All ER 570 at 574. Nettle Gordon Other principles are relevant in the construction of commercial contracts. Unless a contrary intention is indicated in the contract, a court is entitled to approach the task of giving a commercial contract an interpretation on the assumption "that the parties ... intended to produce a commercial result"26. Put another way, a commercial contract should be construed so as to avoid it "making commercial nonsense or working commercial inconvenience"27. These observations are not intended to state any departure from the law as set out in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales28and Electricity Generation Corporation v Woodside Energy Ltd29. We agree with the observations of Kiefel and Keane JJ with respect to Western Export Services Inc v Jireh International Pty Ltd30. It is appropriate to consider each construction issue in turn. MBM area β S99 of 2015 The first question is about the proper construction of the phrase "MBM area" in the 1970 Agreement. It concerns the first condition for the payment of royalties to Hanwright pursuant to cl 3.1 of the 1970 Agreement, namely from where must the ore be won for a royalty to be payable? The question is β does the phrase "MBM area" refer to an area of land fixed by the then existing boundaries of identified temporary reserves or is it a reference to Hanwright's present and future rights in relation to those temporary reserves, being the rights which MBM acquired from Hanwright? That question may be resolved upon a consideration of the text, context and purpose of the 1970 Agreement. It involves an application of the ordinary and unambiguous meaning of the relevant words of the definition of "MBM area". 26 Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 at 657 [35], citing Re Golden Key Ltd [2009] EWCA Civ 636 at [28]. 27 Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 at 657 [35], citing Zhu v Treasurer of New South Wales (2004) 218 CLR 530 at 559 [82]; [2004] HCA 56. 28 (1982) 149 CLR 337. 29 (2014) 251 CLR 640. 30 (2011) 86 ALJR 1; 282 ALR 604; [2011] HCA 45. Nettle Gordon The Court of Appeal construed the term "MBM area" in cl 3.1 of the 1970 Agreement to refer to an area of land identified in two ways: by being the subject of specific temporary reserves and by being marked on a map attached to the 1970 Agreement31. MBM submitted, however, that on a careful contextual reading of cll 1.1, 1.4 and 2.2 of the 1970 Agreement, "MBM area" in cl 2.2 refers to and includes "Hanwright's present and future rights in relation to temporary reserves 4937H to 4946H and 4963H to 4967H, being the rights which MBM acquired" under cl 2.2. MBM submitted that a royalty is only payable under cl 3.1 on ore won from the exercise of rights it obtained from Hanwright. Hanwright submitted that a royalty is payable on ore won by MBM from the fixed area of land referred to in the 1970 Agreement. MBM's construction should be rejected. For the reasons that follow, "MBM area" refers to the area of land fixed by the then existing boundaries of temporary reserves numbered 4937H to 4946H inclusive and 4963H to 4967H inclusive. That is the natural and ordinary understanding of the language used and is consistent with the commercial circumstances which the 1970 Agreement addressed and the purpose or object of the transaction it was intended to secure. The starting point is the language used by the parties in the 1970 Agreement. First, cl 1.1 of the 1970 Agreement records that temporary reserves known as the "Mount Bruce Temporary Reserves" were areas indicated on a map appended to the 1970 Agreement and numbered as blocks 4937H to 4967H (inclusive). The reference to "temporary reserves" was a reference to the rights of occupancy granted pursuant to s 276 of the Mining Act in respect of Crown land reserved by the Minister under that section. As is apparent, the phrase "Mount Bruce Temporary Reserves" was intended to refer to areas of land identified in two ways β by reference to specific areas marked on the map and by being the subject of TR 4937H to TR 4967H (inclusive). By cl 2.2 of the 1970 Agreement, those Mount Bruce Temporary Reserves were divided between MBM and Hanwright. The Mount Bruce Temporary Reserves numbered 4937H to 4946H and 4963H to 4967H inclusive were labelled the "MBM area" and MBM acquired the entire rights to those temporary reserves. The remaining identified temporary reserves (identified by block 31 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2014] NSWCA 323 at Nettle Gordon numbers on the map) were labelled the "Hanwright area". The entire rights to the Hanwright area were restored to Hanwright. Clause 2.2 maintains the distinction between rights and the areas of land in respect of which those rights are held. The MBM area was and remained defined by reference to identified temporary reserves (by block numbers) which were indicated on the map appended to the 1970 Agreement. That construction of "MBM area" is consistent with a (if not the) principal purpose or object of the 1970 Agreement, namely to effect a division of the Mount Bruce Temporary Reserves between Hanwright and MBM. The lines of division were drawn by reference to physical areas or blocks on a map and not by reference to any other indicia. Other clauses of the 1970 Agreement support this construction and treat the MBM area as a physical area. In cl 3.1, the obligation to pay royalties is for "[o]re won by MBM from the MBM area". Clause 12 refers to the fact that the Hamersley commencement of mining of the MBM area". finance Hanwright "until Iron agrees to continue Similarly, other clauses of the 1970 Agreement also deal with the parties' respective obligations and rights by reference to physical areas and not any other indicia. For example, cl 2.3 refers to the reduction of the Mount Bruce Temporary Reserves to a mining lease or leases and provides that the "total area of such lease or leases will be divided between MBM and Hanwright" (emphasis added) in the proportion of 75 per cent to MBM and 25 per cent to Hanwright. It further provides that Hamersley Iron will use its best endeavours to ensure that Hanwright is granted tenure over certain "additional areas" indicated by Hanwright in the areas around Mount Bruce. Clause 6.12 refers to accepting "ore from the Hanwright area blended with ore produced by Hamersley [Iron] from its areas" and cl 9 refers to permission being granted to a party to represent Hanwright "for sale of ore mined from the Hanwright area". MBM placed considerable reliance on cl 1.4 of the 1970 Agreement. That provision does not support its construction. Clause 1.4 comprises two parts. The first three lines provide that "[a]ll references to blocks or reserves include all present and future rights of Hanwright in relation to the above blocks and reserves". The identifying indicia are the blocks and reserves divided by reference to physical areas. What is divided between Hanwright and MBM are Hanwright's current and future rights to those physical blocks and reserves. The need for the clause to pick up Hanwright's "future rights" arose because rights might come into existence between the date of the 1970 Agreement and the date of the division of the Temporary Reserves provided for by cl 2.2. That Hanwright's rights in relation to the MBM area might change between those two Nettle Gordon dates was made clear by a number of clauses in the 1970 Agreement32 including, in particular, cl 10, which provided: "The implementation of these arrangements and the obligations involved by them on the part of Hanwright and on the part of Hamersley [Iron] and MBM are all subject to and conditional upon the necessary Governmental approvals and implementations being effected." The second part of cl 1.4 reinforces that the MBM area is defined by reference to areas of land. It provides that "[a]ll references to blocks or reserves" include "any extensions of the ore bodies located therein or any adjustments of the present indicated boundaries of the [Mount Bruce] Temporary Reserves arranged with the Western Australian Government". The physical ore bodies are located in areas of land. The boundaries of the temporary reserves are defined by reference to areas of land. That cl 1.4 extends the physical boundaries of the blocks or reserves in these two ways is unsurprising. First, a grantee of a temporary reserve is granted rights of exclusive occupation for mineral exploration purposes for a limited time. As a result of that mineral exploration it is possible that ore bodies identified within the temporary reserve may be identified as physically extending into areas outside the area of land comprising the temporary reserve. Second, the boundaries of temporary reserves might be adjusted, or the rights in relation to particular areas might be cancelled and new rights created by reference to the same or different block numbers referring to the same or different areas. That reflects the nature of temporary reserves, the nature of mineral exploration and the power to obtain a mining lease under the Mining Act. For example, cancellation of rights and the creation of new rights in relation to the same land occurred between the making of the 1967 Hanwright State Agreement and the making of the 1970 Agreement33. MBM had the right to occupy and prospect over the whole of the MBM area through the division of the Mount Bruce Temporary Reserves. MBM 32 See, also, cl 2.3 (which contemplated a new State Agreement to amend the 1967 Hanwright State Agreement) and cl 4 (under which Hanwright and MBM agreed to seek the Minister's consent to vary the Iron Ore (Hanwright) Agreement Act Amendment Act 1968 (WA) so that MBM's right to give notice under that agreement to take the place of the joint venturers would be limited to the blocks of the MBM area and MBM would take over secondary processing obligations under the Iron Ore (Hanwright) Agreement Act 1967 (WA) and the Iron Ore (Hanwright) Agreement Act Amendment Act 1968 (WA)). 33 See [20] above. Nettle Gordon obtained those rights to the MBM area from Hanwright under the 1970 Agreement. What MBM did with those rights and how it won ore from the MBM area was a matter for it. The commercial arrangement that was struck was that MBM would pay Hanwright a royalty based on the amount of ore won by it and all persons and corporations deriving title through or under it from any part of the MBM area, which had been held by Hanwright but transferred to MBM. There is nothing in the text of the 1970 Agreement or the purpose or object of the transaction it was intended to secure34 to suggest that the parties intended that Hanwright's entitlement to a royalty was conditional upon ore being won from the exercise of rights which Hanwright held at the time of the 1970 Agreement. The appeal in S99 of 2015 should be dismissed with costs. "Through or under" β S102 of 2015 As has been seen, Hanwright surrendered a defined area35 β the MBM area β in exchange for a royalty for ore won from that area36. The commercial opportunity which MBM, a member of the Hamersley group, obtained was not limited to the rights Hanwright held when the 1970 Agreement was executed. The royalty obligation in cl 3.1 of the 1970 Agreement was that "[o]re won by MBM from the MBM area will be subject to the payment to Hanwright of a base Royalty of 2.5% on the same conditions as apply to the existing Agreement between Hanwright and Hamersley [Iron]" (emphasis added). The "existing Agreement between Hanwright and Hamersley [Iron]" was a reference to the 1962 Agreement. It was common ground that the phrase "same conditions" extended the obligation to pay royalties to "all persons or corporations deriving title through or under" MBM because cl 3.1 incorporated, by reference, cl 24(iii) of the 1962 Agreement, which included the following: "The expression [MBM] shall β¦ include its successors and assigns and all persons or corporations deriving title through or under [MBM] to any areas of land in respect of which an obligation to pay any amount has arisen or may arise". 34 Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 at 35 cl 2.2 of the 1970 Agreement. 36 cl 3.1 of the 1970 Agreement. Nettle Gordon Ore is now being won from Channar A pursuant to ML 265SA. ML 265SA is a 30-year mining lease granted to the Channar Joint Venturers37 on 8 May 1988 with effect from 22 February 1988. A prerequisite to the Channar Joint Venturers obtaining ML 265SA from the State was that MBM surrender secs 18 and 19 of ML 252SA and Hamersley Iron surrender sec 238 of ML 4SA. Sections 18 and 19 of ML 252SA were Channar B and were held by MBM. Section 238 of ML 4SA was Channar A and was held by Hamersley Iron. This is the second construction issue. Are the Channar Joint Venturers "persons or corporations deriving title through or under [MBM] to [Channar A]"? That question raises a constructional choice. Is the phrase "persons or corporations deriving title through or under" MBM limited to succession, assignment or conveyance or is it sufficiently broad to cover a close practical or causal connection between the rights exercised by the Channar Joint Venturers and the rights which MBM obtained from Hanwright under the 1970 Agreement? The Court of Appeal adopted the former, narrow construction and held that the Channar Joint Venturers' rights in respect of Channar A could not be traced back to any "title" of MBM to the land38. The text of the 1970 Agreement itself provides indications that the phrase "through or under" is broader than formal succession, assignment or conveyance. First, cl 3.1 of the 1970 Agreement read with cl 24(iii) of the 1962 Agreement extends the royalty obligation. It is a royalty obligation of MBM which was and remains tied to identified areas of land β the MBM area. But, as has been seen, that area of land was accepted to be likely to be subject to some adjustment and change39. Second, cl 3.1 does not refer to deriving title "from" MBM but rather it refers to deriving title "through or under" MBM. The expression "through or under" has been acknowledged to be a relatively flexible one40. 37 Under s 71 of the Mining Act 1978 (WA). 38 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2014] NSWCA 323 at 39 See [65]-[66] above. 40 See, eg, albeit in the different context of legislation governing commercial arbitration, Tanning Research Laboratories Inc v O'Brien (1990) 169 CLR 332 at 341-342; [1990] HCA 8; Flint Ink NZ Ltd v Huhtamaki Australia Pty Ltd (2014) 289 FLR 30 at 45 [57], 47 [63]-[64], 50 [72]. Nettle Gordon The surrounding circumstances further support that wider construction. At the time the 1970 Agreement was executed, the MBM area was defined by reference to temporary reserves β reserves which the parties knew, because of s 276 of the Mining Act, were of a particular nature (temporary occupancy for mineral exploration purposes). The obligation to pay the royalty arose when ore was won from that area. A mining lease was necessary for that purpose and necessarily attached to a smaller area of land than the temporary reserves. In other words, the 1970 Agreement was drafted on the basis that it was unlikely that title, in a legal sense, to the temporary reserves included in the MBM area would remain static. Second, it was the surrender of secs 18 and 19 of ML 252SA (held by MBM) as well as the surrender of sec 238 of ML 4SA (held by Hamersley Iron) which were preconditions to the grant of ML 265SA (held by the Channar Joint Venturers). As the trial judge found, "it may safely be inferred that MBM's surrender of secs 18 and 19 of ML 252SA and Hamersley Iron's surrender of sec 238 of ML 4SA, both of which were necessary for the grant of ML 265SA, were by arrangement between themselves and the Channar Joint Venturers"41. That finding was not challenged on appeal. That is unsurprising. Each of MBM, Hamersley Iron and Channar Mining Pty Limited (one of the Channar Joint Venturers) is part of the Hamersley group. Third, the wider construction accords with commercial reality. The extent of an ore body is unknown and work on one area is often dependent on work undertaken on an area adjacent to or near another area the subject of current exploration. This is demonstrated by what happened when Hamex was granted rights of occupancy over TR 6663H, TR 6982H and TR 6983H, which together covered the whole of Channar A. As we have seen, Hamex identified that the area (Channar A) was on the boundary of secs 18 and 19 of ML 252SA (Channar B) and that the proposed work was to continue structural and stratigraphic studies on existing data. Of course, Hamex was not the member of the Hamersley group that held the temporary reserves which were included in ML 252SA or expired on the grant of ML 252SA. Those temporary reserves were held by MBM as part of the MBM area. These facts are referred to not as subsequent conduct, but as facts which demonstrate the nature of mineral exploration. These circumstances make clear that the wider construction is consistent with the purpose or object of cl 3.1 of the 1970 Agreement (incorporating cl 24(iii) of the 1962 Agreement) and commercial reality, namely that after the 41 Wright Prospecting Pty Ltd v Hamersley Iron Pty Ltd [2013] NSWSC 536 at [128]. Nettle Gordon division of the Mount Bruce Temporary Reserves and the allocation of the MBM area to MBM, it was the Hamersley group that had control over by whom, where and when the MBM area was developed. The price to be paid was that when ore was won from the MBM area "through or under" MBM, a royalty was payable to Hanwright. For those reasons, the Court of Appeal erred in adopting a narrow construction of the phrase "through or under". The Court of Appeal correctly identified that it was faced with a constructional choice that had to be resolved not by reference to authority but by reference to the text and context of the 1970 Agreement42. However, the Court took as its starting point its decision in Sahab Holdings Pty Ltd v Registrar-General (No 2)43, which concerned the statutory phrase "any person claiming through or under that person" in the Real Property Act 1900 (NSW). It did not follow from Sahab that continuity of a chain of title is always invoked by the phrase any person "deriving title through or under"44. Having regard to the proper construction of "through or under" in the context of the 1970 Agreement, the want of unbroken chain of "title" which the Court of Appeal relied upon was not determinative. The Court's reasoning would have had more force if cl 3.1 of the 1970 Agreement (incorporating cl 24(iii) of the 1962 Agreement) had referred to deriving title "from" MBM45. That was not the language of the clause. Orders in S102 of 2015 The appeal and cross-appeal in S102 of 2015 should be allowed. Paragraphs 1-6 of the order made by the New South Wales Court of Appeal on 9 December 2014 should be set aside and in lieu thereof the appeal to that Court should be dismissed with costs. MBM should pay WPPL's and HPPL's costs in this Court. 42 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2014] NSWCA 323 at [55]. See also at [87], [104]. 43 (2012) 16 BPR 30,353 at 30,360 [28]. 44 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2014] NSWCA 323 at [55]-[56]. See also at [87], [104]. 45 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2014] NSWCA 323 at [67], [70]. See also at [87], [104]. KIEFEL AND KEANE JJ. The material provisions of the agreements between the parties, the legislative background to those agreements, and the issues in dispute between the parties are stated in the reasons of French CJ, Nettle and Gordon JJ. We gratefully adopt their Honours' summary, and proceed to state our reasons for concluding that, in both appeals, the arguments advanced on behalf of MBM should be rejected. We turn first to the issue concerning the "MBM area". The "MBM area" The thrust of the case advanced by MBM under this heading was that Hanwright's entitlement to royalties in respect of iron ore won from the MBM area was confined to iron ore won by the exercise of rights under the tenements held by Hanwright at the time of the 1970 Agreement. Hanwright's position was that the 1970 Agreement allocated to MBM the exclusive right to pursue the recovery of iron ore from the MBM area in return for the payment of royalties in respect of iron ore won from that land. The primary judge (Hammerschlag J) held46 that "the MBM area is the physical area indicated on the map attached to the 1970 Agreement as numbered blocks 4937H to 4946H and 4963H to 4967H." His Honour held47 that the rights conferred by Hanwright upon MBM under the 1970 Agreement "pertained to the entire expanse of land covered by TRs 4937H to 4946H and 4963H to 4967H." His Honour took48 this to be the "commercially rational and sensible" outcome, based on an objective construction of the 1970 Agreement, incorporating cll 9 and 24(iii) of the 1962 Agreement. The Court of Appeal agreed that the parties to the 1970 Agreement adopted a geographically based conception of the MBM area. In particular, cl 1.1 refers to the "Mount Bruce Temporary Reserves" as "these blocks"49; and cl 1.4 provides that "[a]ll references to blocks or reserves include all present and 46 Wright Prospecting Pty Ltd v Hamersley Iron Pty Ltd [2013] NSWSC 536 at [98]. 47 Wright Prospecting Pty Ltd v Hamersley Iron Pty Ltd [2013] NSWSC 536 at [105]. 48 Wright Prospecting Pty Ltd v Hamersley Iron Pty Ltd [2013] NSWSC 536 at [107]. See also at [89], [99], [102]-[104]. 49 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2014] NSWCA 323 at future rights of Hanwright"50. It was held51 that cl 1.4 expands the meaning of "blocks" but does not displace its primary signification of areas of land. In addition, cl 2.2 provides for the division of the rights conferred by the TRs to identified areas of land52. And, importantly, cl 3, the provision which actually creates Hanwright's entitlement to the payment of royalties on iron ore, operates by reference to the area of land from which that iron ore may be won53. As Macfarlan JA noted54, "it is a more natural use of English to speak of ore 'won ... from' an area of land than of ore 'won ... from' a right". MBM's principal submission challenging these conclusions was that the phrase "[o]re won ... from the MBM area" in cl 3.1 of the 1970 Agreement means "[o]re won from the exercise of the rights acquired from Hanwright in relation to temporary reserves 4937H to 4946H and 4963H to 4967H, or rights deriving therefrom", so that MBM's liability to pay royalties to Hanwright was confined to such ore. This meaning was said to be gleaned from a reading of the phrase "MBM area" in cl 2.2, with the instruction provided by cll 1.1 and 1.4. MBM submitted that the Court of Appeal erred in relying on the ordinary meaning of the word "area" given that it forms part of what was said to be a specifically defined expression. MBM argued that cl 1.1, in stating that Hanwright "hold Temporary Reserves in respect of areas indicated on the attached map" (emphasis added by MBM), implies that the TRs are referred to as bundles of rights in respect of areas of land. MBM argued that the "point of reference" for understanding the phrase "these blocks" is not the land but the rights in respect of it. Further, cl 1.4, which provides that all references to blocks or reserves "include all present and future rights of Hanwright in relation to [them]", was said to indicate that the Court of Appeal erred in concluding that the word "blocks" in cl 1.1 refers to areas of land. It was argued that cl 1.4 ensures that all references to blocks be 50 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2014] NSWCA 323 at [43]. See also at [95], [97]. 51 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2014] NSWCA 323 at [43]. See also at [44], [97]. 52 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2014] NSWCA 323 at 53 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2014] NSWCA 323 at 54 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2014] NSWCA 323 at read as including present and future rights, and that there is no "primary signification" apart from that. In argument in this Court, MBM put heavy emphasis on cl 1.4 as an "interpretative provision" of overriding significance in relation to the meaning of the words "blocks" and "reserves", so that the expression "MBM area", defined in cl 2.2 as "temporary reserves 4937H to 4946H inclusive and 4963H to 4967H inclusive", signifies the rights which MBM is to acquire in respect of those reserves. It was said to follow that the words in cl 2.2 "MBM acquires the entire rights thereto" mean that the rights being acquired are confined to the present and future rights described in cl 1.4 so that the phrase "MBM area" must be taken to refer exclusively to those rights. MBM's emphasis on cl 1.4 as determinative of the scope of MBM's royalty obligations fails to recognise that cl 1.4 is not definitive of the "MBM area". It is expressed so as to include "all present and future rights" in the 1970 Agreement's references to "blocks and reserves". The words of cl 1.4 are not words of definition; they are words of extension, distinctly apt to ensure that references to "blocks and reserves" are understood to comprehend, not only areas of land affected by the tenements in question, but also all rights to explore and exploit those tenements which might be presently available to Hanwright or acquired by it in the future. And the inclusory reference in cl 1.4 to "extensions of the ore bodies located therein" is a reference to a physical phenomenon included in "blocks and reserves"; which tends to confirm that the blocks and reserves are themselves understood as physical phenomena. The 1970 Agreement allocated to MBM the opportunity, exercisable over an indefinite period of time, to win iron ore from areas of land affected by the existing tenements. But the Agreement did not confine MBM's opportunity to the exercise of rights under the tenements which affected the land and provided a convenient description of it. The stance taken in this litigation by MBM fails to recognise that the 1970 Agreement was concerned with "rights" conferred by tenements granted by the State only insofar as rights were necessary to the realisation of the opportunity to explore and exploit the areas of land allocated for that purpose by the agreement between Hanwright and MBM. The TRs themselves were rights of temporary occupancy; the right to extract iron ore depended on the terms to be agreed with the State55. The essential postulate of cl 3.1 of the 1970 Agreement was that iron ore would be extracted from the area allocated to MBM. It would have been obvious to the parties that the TRs would be replaced by other tenements, such as mining leases, 55 Mining Act 1904 (WA), ss 276, 277(3) and 277(4). if MBM's operations on the areas in question led to the recovery of iron ore, on which royalties would be payable. It follows that the details of the arrangements which might be made from time to time between MBM and the State over the course of exploring and exploiting the MBM area were of no moment to the parties to the 1970 Agreement. The 1970 Agreement allocated to MBM the opportunity to pursue the exploitation of the MBM area in return for its promise of royalties upon iron ore being won from the realisation of that opportunity. Both the opportunity and the obligation were to continue indefinitely. The pursuit by MBM of that opportunity upon the lands allocated to it by Hanwright might be effected under various tenements granted by the State. The circumstance that these tenements were not previously held by Hanwright could not, of itself, defeat Hanwright's entitlement to royalty payments. "Persons β¦ deriving title through or under" MBM Hanwright's ongoing entitlement to royalties did not depend upon the exploitation of the tenements allocated by it to MBM; but by cl 24(iii) of the 1962 Agreement that entitlement did depend upon the recovery of iron ore under a title deriving "through or under" MBM. A number of points may be made in relation to cl 24(iii) and its operation as part of the 1970 Agreement. First, the protean quality of the phrase "through or under" must be acknowledged56. The nature and extent of the connections between things comprehended by a prepositional phrase of this kind depend on the context in which, and the purpose for which, the phrase is used57. As Brennan and Dawson JJ said in Tanning Research Laboratories Inc v O'Brien58, "[t]he meaning of the phrase 'through or under a party' must be ascertained not by reference to authority but by reference to the text and context of" the provision in which the phrase appears. The Court of Appeal drew support for its view of the scope of the phrase, "deriving title through or under" MBM, from Sahab Holdings Pty Ltd v Registrar-General (No 2)59. That case concerned the application of the phrase 56 Flint Ink NZ Ltd v Huhtamaki Australia Pty Ltd (2014) 289 FLR 30 at 45 [57]. 57 Cf Tooheys Ltd v Commissioner of Stamp Duties (NSW) (1961) 105 CLR 602 at 620-621; [1961] HCA 35. 58 (1990) 169 CLR 332 at 342; [1990] HCA 8. 59 (2012) 16 BPR 30,353. "any person claiming through or under that person" in s 12A(3) of the Real Property Act 1900 (NSW). The Court of Appeal in this case placed reliance60 on the following passage from the reasons of the court in Sahab Holdings61: "β¦ A claims 'through' B if A has acquired title or rights from B, or from someone who has acquired rights from B, and so on through howsoever many intermediary titleholders or holders of rights there might be between A and B. One is looking at the history through which A's rights have been acquired". At issue in Sahab Holdings was whether title to land acquired by registration of a transfer, within a system of title by registration as distinct from registration of title, could be said to be claimed through or under the previous holder of the title to the same parcel of land. The decision in Sahab Holdings did not in any way purport to essay the full extent of the scope of the phrase "through or under". Such an exercise was not necessary to resolve the issue addressed by the court; it was enough to hold that an unbroken chain of title was a sufficient connection for the purposes of the statutory provision in question62. And it is hardly conceivable that a different conclusion would have been reached given that the particular statutory provision in question assumed the possibility of succession to title between registered owners. In the present case, the Court of Appeal framed the issue as whether "the Joint Venturers acquired title to the subject land (Channar A) from MBM" (emphasis added)63. Given the considerations of text and context which are material here, it is tolerably clear that the reference in cl 24(iii) to title derived "through or under" MBM cannot be taken to require a title acquired from MBM via an "unbroken chain of 'title' over Channar A linking the present owners β¦ to MBM."64 Clause 24(iii) expressly includes in the meaning of the phrase "the Purchaser" two categories of persons. It speaks, first, of the "successors and 60 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2014] NSWCA 323 at 61 (2012) 16 BPR 30,353 at 30,360 [28]. 62 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2014] NSWCA 323 at 63 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2014] NSWCA 323 at 64 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2014] NSWCA 323 at assigns" of MBM, and, secondly, of other persons, being "all persons" who derive "title through or under" MBM. The second category cannot sensibly be confined to those persons who derive their title by succession or assignment from MBM: the words creating the second category of "Purchaser" are not to be disregarded as being otiose. As the primary judge rightly observed, the expression in question "clearly goes beyond formal succession, assignment or conveyance."65 The reference in cl 24(iii) to "areas of land" is to land affected by a current mining tenement pursuant to which iron ore is being won. It does not invite an inquiry into whether parts of that land were, historically, included in a differently designated tenement or part thereof. The Court of Appeal's focus upon Channar A as if it were itself an "area" of the kind referred to in cl 24(iii) was a distraction from the real issue, which led that Court to address the wrong question in proceeding to the conclusion that MBM's surrender of secs 18 and 19 of ML 252SA "did not result in the [joint venturers] acquiring Channar A from [MBM]."66 Quite apart from the point that the issue is not whether the joint venturers acquired their title from MBM, the Court of Appeal proceeded on the erroneous basis that the connection required by cl 24(iii) could be satisfied only if the land described as Channar A was itself specifically acquired from MBM. The relevant "area" for present purposes is the land covered by ML 265SA, granted to the joint venturers by the State in May 1988; it is not the parcels of land previously covered by part of ML 4SA (ie the land designated as Channar A) and secs 18 and 19 of ML 252SA (ie the land designated as Channar B). It is evident from the context in which cl 24(iii) appears, both in the 1962 Agreement, and in the 1970 Agreement, into which it was imported (in particular cll 1.1, 2.2 and 3.1 of the 1970 Agreement), that when cl 24(iii) speaks of "areas" it is not speaking, as MBM contended, of the precise physical location of a given body of iron ore which happens to have become the subject of a dispute between the parties. Clause 24(iii) is speaking of the area of land affected by the tenement which identifies it and pursuant to which iron ore is being won when the question of the entitlement to royalties in respect of that ore arises. As it happens, the parties chose, for the purposes of litigating their dispute, to speak of Channar A to refer to land previously designated as part of ML 4SA, and of Channar B to refer to land previously designated as secs 18 and 19 of ML 252SA. But that 65 Wright Prospecting Pty Ltd v Hamersley Iron Pty Ltd [2013] NSWSC 536 at [125]. 66 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2014] NSWCA 323 at choice could not and did not alter the effect of the 1970 Agreement; it certainly did not modify the meaning of "areas" in cl 24(iii). The question is not whether "the Joint Venturers acquired title to the subject land (Channar A) from MBM"67. The real question is whether ML 265SA affects an area of land title to which was a title deriving "through or under" MBM. Given that, under an agreement to which approval was given by the Iron Ore (Channar Joint Venture) Agreement Act 1987 (WA), pursuant to which the State agreed to grant ML 265SA, it was a condition of the grant of ML 265SA that MBM surrender secs 18 and 19 of ML 252SA, it is correct, as a matter of ordinary language, to say that the joint venturers' title to ML 265SA was derived through or under MBM. Indeed, given that the surrender by MBM of its title to secs 18 and 19 was a condition of the grant of ML 265SA to the joint venturers by the State, it would be a distinctly odd use of language to say that the joint venturers' title to ML 265SA was not a title deriving through or under MBM. Further, and as already noted, the 1970 Agreement was of indefinite duration. Its terms reflect the indifference of the parties to changes in the particular rights of exploration and exploitation that different mining tenements, as granted from time to time by the State, might confer on those actually winning ore from the land. The exigencies of exploration and mining over the long term meant that the opportunity of exploring and exploiting the areas of land conferred by the agreed allocation of areas between MBM and Hanwright would be exercisable under a variety of tenements granted by the State. These observations direct attention to matters which may be taken to be known by each of the parties to the 1970 Agreement and which form part of the circumstances in which it was made. The parties may be taken to be aware that temporary reserves themselves provided only a right to occupation of lands which enabled further exploration. Mining leases and agreements with the State were necessary to undertake exploitation. They knew that tenements would be surrendered and regranted, sometimes as amalgamations of former tenements to the same or different tenement holders, while MBM pursued the opportunity afforded it by Hanwright with respect to the lands which MBM had identified as having potential for exploitation. They knew that once Hanwright had divested itself of the temporary reserves and MBM had acquired them, MBM could deal with them as it chose in the pursuit of its objectives in the MBM area. It could 67 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2014] NSWCA 323 do so itself or in conjunction with any other entity which was then or might come to be part of the Hamersley group. It could do so with a third party. A construction of the words "deriving title" in cl 24(iii) as meaning a chain of title analogous to that in systems of land registration could only be arrived at by placing undue emphasis upon those words to the exclusion of other words. In any event the possibility that such a meaning could have been intended is negated by reference to the circumstances surrounding the meaning of the 1970 Agreement and in particular the facts known to the parties. To the extent that there is any ambiguity arising from these words it is resolved in favour of the construction referred to above. That regard may be had to the mutual knowledge of the parties to an agreement in the process of construing it is evident from Codelfa Construction Pty Ltd v State Rail Authority of New South Wales68. Mason J, with whom Stephen and Wilson JJ agreed, accepted that there may be a need to have regard to the circumstances surrounding a commercial contract in order to construe its terms or to imply a further term. In the passages preceding what his Honour described as the "true rule" of construction69, his Honour identified "mutually known facts" which may assist in understanding the meaning of a descriptive term or the "genesis" or "aim" of the transaction. His Honour had earlier referred70 to the judgment of Lord Wilberforce in Prenn v Simmonds71, where it was said that: "[t]he time has long passed when agreements β¦ were isolated from the matrix of facts in which they were set and interpreted purely on internal linguistic considerations." In a passage from DTR Nominees Pty Ltd v Mona Homes Pty Ltd72, to which Mason J referred73, it was said that the object of the exercise was to show that "the attribution of a strict legal meaning would 'make the transaction futile'". 68 (1982) 149 CLR 337; [1982] HCA 24. 69 (1982) 149 CLR 337 at 351-352. 70 (1982) 149 CLR 337 at 348-349. 71 [1971] 1 WLR 1381 at 1383-1384; [1971] 3 All ER 237 at 239. 72 (1978) 138 CLR 423 at 429; [1978] HCA 12, referring to Prenn v Simmonds [1971] 1 WLR 1381 at 1384; [1971] 3 All ER 237 at 240. 73 (1982) 149 CLR 337 at 351. In Electricity Generation Corporation v Woodside Energy Ltd74, French CJ, Hayne, Crennan and Kiefel JJ explained that a commercial contract should be construed by reference to the surrounding circumstances known to the parties and the commercial purpose or objects to be secured by the contract in order to avoid a result that could not have been intended. The "ambiguity" which Mason J said may need to be resolved arises when the words are "susceptible of more than one meaning."75 His Honour did not say how such an ambiguity might be identified. His Honour's reasons in Codelfa are directed to how an ambiguity might be resolved. In reasons for the refusal of special leave to appeal given in Western Export Services Inc v Jireh International Pty Ltd76, reference was made to a requirement that it is essential to identify ambiguity in the language of the contract before the court may have regard to the surrounding circumstances and the object of the transaction. There may be differences of views about whether this requirement arises from what was said in Codelfa. This is not the occasion to resolve that question. It should, however, be observed that statements made in the course of reasons for refusing an application for special leave create no precedent and are binding on no one. An application for special leave is merely an application to commence proceedings in the Court77. Until the grant of special leave there are no proceedings inter partes before the Court78. The question whether an ambiguity in the meaning of terms in a commercial contract may be identified by reference to matters external to the contract does not arise in this case and the issue identified in Jireh has not been the subject of submissions before this Court. To the extent that there is any possible ambiguity as to the meaning of the words "deriving title through or under", it arises from the terms of cl 24(iii) itself. 74 (2014) 251 CLR 640 at 656-657 [35]; [2014] HCA 7. 75 Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 at 352. 76 (2011) 86 ALJR 1 at 2 [2]; 282 ALR 604 at 605; [2011] HCA 45. 77 North Ganalanja Aboriginal Corporation v Queensland (1996) 185 CLR 595 at 643 per McHugh J; [1996] HCA 2. 78 Collins v The Queen (1975) 133 CLR 120 at 122; [1975] HCA 60. As between the parties to the 1970 Agreement, MBM was assured exclusive enjoyment of the opportunity to exploit an area of land allocated to it irrespective of the nature or terms of the tenement by which such activities were authorised by the State. And in return for that opportunity, Hanwright was assured of the payment of royalties upon the proceeds of that exploitation. In this context, and given this purpose, to speak of title derived "through or under" MBM was to speak of a title to win iron ore from land where MBM had deployed its own title in order to facilitate the acquisition of any title pursuant to which that exploitation might be pursued. Under the Iron Ore (Channar Joint Venture) Agreement Act 1987, MBM's surrender of its title to secs 18 and 19 of ML 252SA facilitated the acquisition by the joint venturers of the title to ML 265SA. The evident purpose of cl 24(iii) was to ensure that royalties would be payable to Hanwright in respect of iron ore won by anyone from land in the MBM area so long as the exploitation of the land was carried on under a title the derivation of which was facilitated by the deployment by MBM of any title obtained by it in the course of its pursuit of the opportunity afforded by Hanwright. Finally, it should also be said that a title so derived would not cease to be properly so described because its derivation was also effected by other means. Clause 24(iii) does not invite an inquiry as to the sole or predominant source from which the title of the Purchaser was derived79; and given the evident purpose of cl 24(iii), one would not be disposed to read it to mean that MBM's facilitation of the new derivation of title must be the sole and exclusive source of that title. Accordingly, the primary judge was right to conclude that the joint venturers' title to exploit the area affected by ML 265SA was title derived "through or under" MBM. Conclusion We agree with the orders proposed by French CJ, Nettle and Gordon JJ. 79 Actors and Announcers Equity Association v Fontana Films Pty Ltd (1982) 150 CLR 169 at 193; [1982] HCA 23. Bell BELL AND GAGELER JJ. These appeals do not raise an important question on which intermediate courts of appeal are currently divided. That question is whether ambiguity must be shown before a court interpreting a written contract can have regard to background circumstances. Until that question is squarely raised in and determined by this Court, the question remains for other Australian courts to determine on the basis that Codelfa Construction Pty Ltd v State Rail Authority of New South Wales80 remains binding authority. That point, which of itself says nothing about the scope of the holding in Codelfa, was made in the joint reasons for judgment in Royal Botanic Gardens and Domain Trust v South Sydney City Council81. The point was reiterated, but taken no further, in the joint reasons for refusing special leave to appeal in Western Export Services Inc v Jireh International Pty Ltd82. It should go without saying that reasons for refusing special leave to appeal in a civil proceeding are not themselves binding authority. The question whether ambiguity must be shown before a court interpreting a written contract may have regard to background circumstances does not arise for determination in these appeals because the parties agree that the terms "MBM area" in cl 2.2 and "through or under" in cl 3.1 of the 1970 Agreement are ambiguous. The parties also agree, consistently with numerous recent statements of principle in this Court83, that the proper interpretation of each of those terms is to be determined by reference to what reasonable businesspersons having all the background knowledge then reasonably available to the parties would have understood those terms to have meant as at 5 May 1970. To the extent that there is any issue of interpretative principle which divides the parties, that issue is limited to whether the meaning of the defined term "MBM area" can be informed by the defined term itself. The issue is not to be resolved by invocation of the strictures of logic presumptively applicable to 80 (1982) 149 CLR 337; [1982] HCA 24. 81 (2002) 240 CLR 45 at 63 [39]; [2002] HCA 5. 82 (2011) 86 ALJR 1 at 2-3 [3]-[4]; 282 ALR 604 at 605; [2011] HCA 45. 83 See Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 at 656-657 [35] (and the cases there cited), 662 [53]; [2014] HCA 7. See also Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR 181 at 188 [11]; [2001] HCA 70. Bell the interpretation of a defined expression within a complex statutory scheme84. It is to be resolved instead by reference to the overriding criterion of how reasonable businesspersons can be taken to have understood the term. In the absence of the background circumstances indicating some reason to think otherwise, it is therefore appropriate to proceed on the assumption that the words chosen as the label for the defined term were not chosen arbitrarily but as "a distillation of ... a concept intended to be more precisely stated in the definition"85. No other issue of interpretative principle falls for determination in these appeals. Indeed, no other issue has been argued. Save that we see no occasion to address the "true rule" stated by Mason J in Codelfa, we agree with the reasons given by Kiefel and Keane JJ for concluding that Hanwright's interpretation of each of the disputed terms is to be preferred. For those reasons, we agree with the orders proposed by French CJ, 84 Cf Wacal Developments Pty Ltd v Realty Developments Pty Ltd (1978) 140 CLR 503 at 507; [1978] HCA 30. See also Commissioner for Railways (NSW) v Agalianos (1955) 92 CLR 390 at 397; [1955] HCA 27. 85 Chartbrook Ltd v Persimmon Homes Ltd [2009] AC 1101 at 1112-1113 [17]. |
HIGH COURT OF AUSTRALIA IMM AND APPELLANT THE QUEEN RESPONDENT IMM v The Queen [2016] HCA 14 14 April 2016 ORDER Appeal allowed. Set aside the order of the Court of Criminal Appeal of the Northern Territory made on 19 December 2014 and, in its place, order that: the appeal be allowed; the appellant's conviction on counts 2, 3 and 4 of the indictment be quashed; and a new trial be had on counts 2, 3 and 4 of the indictment. On appeal from the Supreme Court of the Northern Territory Representation S J Odgers SC with K J Edwards for the appellant (instructed by Northern Territory Legal Aid Commission) B W Walker SC with M W Nathan SC for the respondent (instructed by Director of Public Prosecutions (NT)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS IMM v The Queen Evidence β Admissibility and relevance β Evidence (National Uniform Legislation) Act (NT), ss 97(1)(b), 137 β Where appellant charged with indecent dealing with child and sexual intercourse with child β Where tendency evidence given by complainant that appellant ran his hand up complainant's leg β Where evidence tendered of complaints made by complainant concerning appellant β Whether probative value of evidence assessed on assumption that jury would accept evidence β Whether trial judge should have regard to credibility of witness or reliability of evidence in assessing probative value of evidence β Whether evidence from complainant adduced to show accused's sexual interest can have significant probative value. Words and phrases β "complaint evidence", "credibility", "danger of unfair prejudice", "probative value", "relevance", "reliability", "significant probative value", "tendency evidence". Evidence (National Uniform Legislation) Act (NT), ss 55, 56, 65, 66, 97(1)(b), the age of 16 years. FRENCH CJ, KIEFEL, BELL AND KEANE JJ. After a trial in the Supreme Court of the Northern Territory, the appellant was found guilty of two counts of indecent dealing with a child and one count of sexual intercourse with a child the appellant's under step-granddaughter. She alleged a course of sexual abuse which commenced when she was about four years old and continued until her grandmother and her step-grandfather separated in late 2010, when the complainant was 12 years old. The complainant's was the only direct evidence of the commission of the offences. Over objection from the defence, the prosecution was permitted to adduce certain "tendency evidence" and "complaint evidence". The complainant was The tendency evidence was given by the complainant and was that while the complainant and another girl were giving the appellant a back massage, he ran his hand up the complainant's leg. The trial judge (Blokland J) considered that the evidence was capable of showing that the appellant had a sexual interest in the complainant, and that there was a strong temporal nexus between this incident and the charged acts1. The trial judge ruled that the evidence had "significant probative value". Section 97(1)(b) of the Evidence (National Uniform Legislation) Act (NT) ("the Evidence Act") provides for evidence of this kind to be excepted from the "tendency rule", which would otherwise render the evidence inadmissible. Accordingly, the evidence was admitted. The jury were directed that if they found, on the basis of the tendency evidence, that the appellant had a sexual interest in the complainant and was willing to act on that sexual interest, that finding could be used in determining whether the appellant committed the offences charged. The trial judge approached the task of assessing the probative value of the tendency evidence on the assumption that the jury would accept the evidence. In so doing, the trial judge did not have regard to factors such as the credibility of the complainant or the reliability of the evidence. The complaint evidence was evidence of complaints made by the complainant concerning the appellant and was given by a friend of the complainant, and the complainant's aunt, grandmother and mother. There was an issue as to when the complaint was made by the complainant to her friend. 1 R v IMM (No 3) [2013] NTSC 45 at [10]. Bell The trial judge applied2 the exception to the hearsay rule, provided by s 66 of the Evidence Act, to this evidence. The appellant sought, unsuccessfully, to have the evidence excluded under s 137 of the Evidence Act, on the ground that its probative value was outweighed by the danger of unfair prejudice to him. The jury were directed that if they accepted the evidence of the complaints they could use the evidence of what was said in the complaints "as some evidence that an offence did occur". They were given certain other warnings. The trial judge approached the question of the probative value of this evidence for the purposes of s 137 in the same way as she had for the purposes of s 97(1)(b). Her Honour assumed that the jury would accept the evidence and did not take into account factors such as credibility or reliability. Her Honour held that the evidence had probative value and did not create the prejudice to which s 137 refers3. An appeal from the appellant's conviction was dismissed by the Court of Criminal Appeal of the Northern Territory4. The Evidence Act The Evidence Act is in substantially the same terms as legislation adopted by the Commonwealth5 and by other States and Territories6, and to that extent may be said to be uniform. The structure of the Act generally follows the order in which issues as to evidence arise at trial. Chapter 3, which deals with the admissibility of evidence, commences in Pt 3.1 with the question of the relevance of evidence. Section 55(1) provides: 2 R v IMM (No 2) (2013) 234 A Crim R 225 at 231 [24]. 3 R v IMM (No 2) (2013) 234 A Crim R 225 at 231-232 [27]-[31]. IMM v The Queen [2014] NTCCA 20 (Riley CJ, Kelly and Hiley JJ). 5 Evidence Act 1995 (Cth). 6 Evidence Act 1995 (NSW); Evidence Act 2001 (Tas); Evidence Act 2008 (Vic); and Evidence Act 2011 (ACT). Bell "The evidence that is relevant in a proceeding is evidence that, if it were accepted, could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceeding." Section 56(1) provides that: "Except as otherwise provided by this Act, evidence that is relevant in a proceeding is admissible in the proceeding." Certain exclusionary rules are stated in the Parts that follow, by which relevant evidence is rendered inadmissible. Part 3.2 deals with the hearsay rule, Pt 3.3 with the opinion rule, Pt 3.6 with the tendency and coincidence rules and Pt 3.7 with the credibility rule. Exceptions to the exclusionary rules are then provided. Section 97(1) states the tendency rule and par (b) of sub-s (1) the exception to that rule: "Evidence of the character, reputation or conduct of a person, or a tendency that a person has or had, is not admissible to prove that a person has or had a tendency (whether because of the person's character or otherwise) to act in a particular way, or to have a particular state of mind unless: the court thinks that the evidence will, either by itself or having regard to other evidence adduced or to be adduced by the party seeking to adduce the evidence, have significant probative value." The "probative value" of evidence is defined in the Dictionary to the Evidence Act to mean: "the extent to which the evidence could rationally affect the assessment of the probability of the existence of a fact in issue." A further restriction on the admissibility of tendency evidence is provided by s 101, which expressly applies to criminal proceedings and in addition to s 97. Section 101(2) provides that tendency evidence that is adduced by the prosecution cannot be used against the defendant "unless the probative value of the evidence substantially outweighs any prejudicial effect it may have on the defendant." For reasons which will later be explained, s 101(2) is not in issue on this appeal. Bell The Evidence Act makes provision7 for the discretionary exclusion by the court of evidence in certain circumstances. For example, s 135, which applies to both civil and criminal proceedings, provides a discretion to exclude evidence if its probative value is outweighed by certain dangers that the evidence might present. Section 137, which applies to criminal proceedings, is expressed in terms of an evaluative judgment mandating exclusion8: "In a criminal proceeding, the court must refuse to admit evidence adduced by the prosecutor if its probative value is outweighed by the danger of unfair prejudice to the defendant." Only limited provision is made in the Evidence Act for a court to take into account the reliability of evidence in connection with its admissibility. One of the matters to be taken into account by a trial judge under s 65(2)(c) and (d), in determining whether the hearsay rule is not to apply in the circumstance where the maker of the statement is not available to give evidence, is whether the representation in question was made in circumstances that make it highly probable (in the case of par (c)) or likely (in the case of par (d)) that "the representation is reliable". Similarly, s 85(2) requires consideration to be given as to whether the circumstances in which an admission was made were such as to "make it unlikely" that the truth of the admission was adversely affected. Section 165, which appears in Ch 4 of the Evidence Act, is concerned with evidence which "may be unreliable". A non-exhaustive list is provided of evidence of this kind, including: hearsay evidence and admissions; identification evidence; evidence the reliability of which may be affected by factors such as ill-health; evidence from witnesses who are criminally concerned in the events giving informers. Section 165(2) provides that, on the request of a party, a judge is to warn the jury that such evidence may be unreliable and warn the jury of the need for caution in determining whether to accept it and the weight to be given to it. the proceeding; and evidence from prison rise The issues on the appeal The arguments raised by the appellant on this appeal are directed principally to the exercise to be undertaken by a trial judge in determining the "probative value" of the evidence for the purposes of each of ss 97(1)(b) and 137. 7 Evidence (National Uniform Legislation) Act (NT), ss 90, 135, 136. 8 Section 138 of the Evidence (National Uniform Legislation) Act (NT) has a similar operation in relation to improperly or illegally obtained evidence. Bell The appellant contends that the trial judge ought not to have proceeded upon the assumption that the jury would accept the evidence in question when her Honour applied s 97(1)(b) to the tendency evidence and s 137 to the complaint evidence. The appellant submits that that assumption may be appropriate to the test of relevance for the purposes of s 55, but that is because the words "if it were accepted" appear there. Those words are omitted from the Dictionary definition of "probative value" and it is to be inferred that that omission was deliberate. The appellant submits that, for the purposes of determining "probative value", an assessment of the "extent" to which evidence "could rationally affect the assessment of the probability of the existence of a fact in issue" must require the court to consider all matters that would rationally bear upon such an assessment by the tribunal of fact, here the jury. The court cannot be constrained in that assessment by assuming that the jury will assess the evidence in a particular way, which is to say, that the jury will accept it. Particularly is this so where there are reasons to doubt the credibility of a witness or the reliability of the evidence. The appellant's argument in respect of the tendency evidence concerns only s 97(1)(b). No reliance is placed upon the further restriction found in s 101 on the admissibility of tendency evidence. That restriction does not appear to have been discussed at trial and counsel for the appellant conceded that it was not relied upon in argument before the Court of Criminal Appeal. Accordingly, s 101 is relevant on this appeal only as part of the scheme of the Act. The appellant's argument is that the tendency evidence does not pass the different, and perhaps somewhat less stringent, test of s 97(1)(b). The appellant's argument proceeds that if the trial judge was wrong to apply the assumption that the jury would accept the tendency evidence, it would have been open for the court to conclude that the evidence did not have significant probative value, for the reason that the evidence was derived solely from the complainant, whose credibility was generally in issue. It follows that the application of the s 97(1)(b) test miscarried. The appellant submits that the assessment of the probative value of the complaint evidence for the purposes of s 137 miscarried for the same reasons. If it is not assumed that the complaint evidence would be accepted by the jury, it would be open to a court, in assessing the extent of its probative value, to conclude that its value is low. Given the direct evidence from the complainant of the history of sexual abuse, which was admitted as "context evidence", the hearsay complaint evidence added little or nothing to this context. The general nature of the complaints means that, at its highest, the complaint evidence could only support the credibility of the complainant. It follows from the limited Bell purpose to which such evidence could be put that the evidence has limited probative value. The low probative value of the evidence is outweighed by a risk of unfair prejudice to the appellant, the appellant submits, because the jury might use the complaint evidence to show that the appellant had a tendency to engage in sexual abuse. The appellant's submissions in this regard identify for the first time a danger of unfair prejudice. It was conceded that no argument of this kind was raised in the courts below. The question whether the reliability of the evidence should be taken into account when assessing its probative value is also said by the appellant to reflect a policy concern which guided the formulation of the proposals of the Australian Law Reform Commission regarding evidence in criminal trials9. The appellant submits that s 137 provides a final, critical "safeguard" which is to be applied by a trial judge to minimise the risk of wrongful conviction. This was the view expressed by the Court of Appeal of the Supreme Court of Victoria in Dupas v The Queen10, albeit by reference to the common law. Decisions of intermediate appellate courts In R v Shamouil11, the Court of Criminal Appeal of the Supreme Court of New South Wales (Spigelman CJ, Simpson and Adams JJ) held that a trial judge, in determining the probative value of evidence according to the definition in the Evidence Act 1995 (NSW) ("the NSW Evidence Act") for the purposes of s 137 of that Act, should do so on the assumption that the jury will accept the evidence. A trial judge should not have regard to questions as to the credibility or reliability of the evidence. The Court of Criminal Appeal of the Northern Territory in this case agreed with this approach12. 9 Australian Law Reform Commission, Evidence, Report No 26 (Interim), (1985), vol 1 at 30-32 [58]-[60]. 10 (2012) 40 VR 182 at 242 [226]. 11 (2006) 66 NSWLR 228. IMM v The Queen [2014] NTCCA 20 at [48]. Bell In R v Shamouil, Spigelman CJ adopted13 what was said by Gaudron J in Adam v The Queen14. Her Honour considered15 that the definition of "probative value" in the Dictionary to the NSW Evidence Act must have read into it an assumption that a jury will accept the evidence in question because, as a practical matter, "evidence can rationally affect the assessment of the probability of a fact in issue only if it is accepted." Spigelman CJ observed16 that this approach is consistent with the common law approach to exclusion of evidence under the "Christie discretion"17. A trial judge exercising that discretion did not, in assessing whether the probative value of the evidence is outweighed by its prejudicial effect, determine whether the jury should, or should not, accept the evidence. A trial judge did not consider the reliability of the evidence. Spigelman CJ considered18 that the words used in the definition of "probative value" in the NSW Evidence Act strongly indicated that the same approach was to be taken. The word "could" focused on the capability of the evidence to rationally affect the assessment of the probability of the existence of a fact. This involves what is open for the jury to conclude, not what they are likely to conclude. The test of "rationality" also directs attention to capability, rather than the weight to be given to the evidence. In Dupas v The Queen, an enlarged Court of Appeal of the Supreme Court of Victoria (Warren CJ, Maxwell P, Nettle, Redlich and Bongiorno JJA) declined to follow R v Shamouil. Subsequently, in R v XY19 an enlarged Court of Criminal Appeal of the Supreme Court of New South Wales (Basten JA, Hoeben CJ at CL, Simpson, Blanch and Price JJ) maintained the approach adopted in R v Shamouil. 13 R v Shamouil (2006) 66 NSWLR 228 at 236 [53]. 14 (2001) 207 CLR 96; [2001] HCA 57. 15 Adam v The Queen (2001) 207 CLR 96 at 115 [60]. 16 R v Shamouil (2006) 66 NSWLR 228 at 236 [49]-[50]. 17 As enunciated in R v Christie [1914] AC 545. 18 R v Shamouil (2006) 66 NSWLR 228 at 237 [60]-[62]. 19 (2013) 84 NSWLR 363. Bell In R v XY, Basten JA added20 that an assessment of the extent to which evidence could rationally affect the probability of the existence of a fact in issue, whilst being an evaluative judgment, is not a forecast of the weight that the jury are likely to give the evidence. Simpson J observed21 that it is not ordinarily possible to determine the actual probative value of any piece of evidence until the trial is complete. Probative value is not used in that sense in the NSW Evidence Act, but rather in the sense of the potential of the evidence to have the relevant quality. It is predictive, as to what the jury could rationally make of it, when all the evidence is in. Whilst the Court of Appeal in Dupas v The Queen did not follow R v Shamouil in one fundamental respect, it did agree22 with Spigelman CJ's construction of the word "could" within the definition of "probative value"23 and did not disagree with the assumption upon which an assessment of the probative value of evidence is to be undertaken, to the extent that the assumption concerns credibility. It observed24 that, as was the case with the Christie discretion under the common law, the trial judge must assume that the jury will accept the witness as truthful. The point of difference between R v Shamouil and Dupas v The Queen concerned whether a trial judge could take into account the reliability of the evidence in assessing its probative value. In Dupas v The Queen it was said "The trial judge undertaking the balancing task [of s 137] is only obliged to assume that the jury will accept the evidence to be truthful but is not required to make an assumption that its reliability will be accepted." 20 R v XY (2013) 84 NSWLR 363 at 376 [44]. 21 R v XY (2013) 84 NSWLR 363 at 400 [167]. 22 Dupas v The Queen (2012) 40 VR 182 at 224 [163]. 23 R v Shamouil (2006) 66 NSWLR 228 at 237 [61]. 24 Dupas v The Queen (2012) 40 VR 182 at 224 [162], 230 [184]. 25 Dupas v The Queen (2012) 40 VR 182 at 196 [63(c)]. Bell The Court in Dupas v The Queen considered26 that, under the Christie discretion, questions of reliability would be taken into account by the trial judge in determining what weight the jury could reasonably assign to the evidence, which the Court took to equate to what was "open to the jury to decide". The Court considered27 that R v Shamouil misconceived the role of the judge under the common law test. In Dupas v The Queen extensive reference was made to cases concerning the role of the judge exercising the common law Christie discretion in order to show that its exercise involved the judge considering the reliability of the evidence. This analysis has been criticised28 on the basis that many of the cases referred to contain general statements which are ambiguous as to the sense in which "probative value" is used. It may be that the analysis pays insufficient regard to the statement in Phillips v The Queen29 with respect to the admission of similar fact evidence under the common law. The Court observed that because the test is one of admissibility it is to be applied on the assumption that the proffered evidence would be accepted as true and the prosecution case (as revealed in the evidence given or in the depositions of witnesses to be called) may be accepted by the jury. In the event, it is not necessary to reconcile the statements in R v Shamouil and Dupas v The Queen respecting the role of the judge in applying common law discretions and exclusionary rules. The "probative value" of evidence under the Evidence Act The issue here concerning a trial judge's assessment of the probative value of the evidence in question arises in the context of a statute that was intended to make substantial changes to the common law rules of evidence. The statute's language is the primary source30, not the pre-existing common law. 26 Dupas v The Queen (2012) 40 VR 182 at 224 [162]. 27 Dupas v The Queen (2012) 40 VR 182 at 198 [68], 230 [185]. 28 Heydon, "Is the Weight of Evidence Material to Its Admissibility?", (2014) 26 Current Issues in Criminal Justice 219 at 235. 29 (2006) 225 CLR 303 at 323-324 [63]; [2006] HCA 4. 30 Papakosmas v The Queen (1999) 196 CLR 297 at 302 [10]; [1999] HCA 37; R v Ellis (2003) 58 NSWLR 700 at 716-717 [78]. Bell Mention has been made earlier in these reasons of the structure of the Evidence Act and the fact that Ch 3, in dealing with the admissibility of evidence, follows the steps that are usually undertaken in the course of a trial. Questions that arise in connection with admissibility arise at the point when a piece of evidence is tendered, which is normally before all of the evidence is admitted and the witnesses examined, and therefore before the full picture has emerged. In a practical sense, a trial judge's ability to assess the place and weight of the evidence in question when a ruling on its admissibility is made will usually be limited. For the reasons which follow, it is to be inferred that the tests in question with respect to the admissibility of evidence under the Evidence Act acknowledge these limitations. The first question, posed by Pt 3.1, is a threshold one for all evidence β whether it is relevant. Before that question may be answered, it is necessary to identify the purpose or purposes for which the evidence is tendered. The identification of its purpose may have important consequences, especially in areas such as opinion evidence31 and tendency evidence. By s 55, evidence is relevant if it "could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceeding." There can be no doubt that the reference to the effect that the evidence "could" have on proof of a fact is a reference to the capability of the evidence to do so. The reference to its "rational" effect does not invite consideration of its veracity or the weight which might be accorded to it when findings come to be made by the ultimate finder of fact. The question as to the capability of the evidence to rationally affect the assessment of the probability of the existence of a fact in issue is to be determined by a trial judge on the assumption that the jury will accept the evidence. This follows from the words "if it were accepted", which are expressed to qualify the assessment of the relevance of the evidence. This assumption necessarily denies to the trial judge any consideration as to whether the evidence is credible. Nor will it be necessary for a trial judge to determine whether the evidence is reliable, because the only question is whether it has the capability, rationally, to affect findings of fact. There may of course be a limiting case in which the evidence is so inherently incredible, fanciful or preposterous that it could not be accepted by a rational jury. In such a case its effect on the probability of the existence of a fact in issue would be nil and it would not meet the criterion of relevance. 31 Evidence (National Uniform Legislation) Act (NT), s 77. Bell Because evidence which is relevant has the capability to affect the assessment of the probability of the existence of a fact in issue, it is "probative". Therefore, evidence which is relevant according to s 55 and admissible under s 56 is, by definition, "probative". But neither s 55 nor s 56 requires that evidence be probative to a particular degree for it to be admissible. Evidence that is of only some, even slight, probative value will be prima facie admissible, just as it is at common law32. Relevant evidence is admissible under s 56 unless an exclusionary rule operates, the court is required to exclude evidence by a provision such as s 137, or a discretion provided by the Evidence Act to exclude evidence is exercised. The exceptions provided with respect to the exclusionary rules of the Evidence Act have the effect that if relevant evidence liable to be excluded comes within an exception, it may nevertheless retain its character as admissible. The condition to be met for the exception in s 97(1)(b) to apply is that the court must think that the evidence will "have significant probative value". Both s 97(1)(b) and s 137 require an assessment of the probative value of the evidence tendered. As mentioned, the Dictionary definition of the "probative value" of evidence describes evidence which is probative in the same terms as how relevant evidence is described in s 55, namely evidence which "could rationally affect [...33] the assessment of the probability of the existence of a fact in issue". The enquiry for the purposes of s 55 is whether the evidence is capable of the effect described at all. The enquiry for the purposes of determining the probative value of evidence is as to the extent of that possible effect. But the point is that in both cases the enquiry is essentially the same; it is as to how the evidence might affect findings of fact. An assessment of the extent of the probative value of the evidence takes that enquiry further, but it remains an enquiry as to the probative nature of the evidence. The assessment of "the extent to which the evidence could rationally affect the assessment of the probability of the existence of a fact in issue" requires that the possible use to which the evidence might be put, which is to say how it might be used, be taken at its highest. The definition must be read in the 32 Festa v The Queen (2001) 208 CLR 593 at 599 [14]; [2001] HCA 72. 33 In s 55 the words "directly or indirectly" expressly qualify the words "could rationally affect", whereas these words are not included in the definition of "probative value". This is, for present purposes, of no significance. Bell context of the provision to which it is applied. For the purposes of s 97(1)(b), the enquiry is whether the probative value of the evidence may be regarded as "significant". The use of the term "probative value" and the word "extent" in its definition rest upon the premise that relevant evidence can rationally affect the assessment of the probability of the existence of a fact in issue to different degrees. Taken by itself, the evidence may, if accepted, support an inference to a high degree of probability that the fact in issue exists. On the other hand, it may only, as in the case of circumstantial evidence, strengthen that inference, when considered in conjunction with other evidence. The evidence, if accepted, may establish a sufficient condition for the existence of the fact in issue or only a necessary condition. The ways in which evidence, if accepted, could affect the assessment of the probability of the existence of a fact in issue are various. Within the framework imposed by the statute and, in particular, the assumption that the evidence is accepted, the determination of probative value is a matter for the judge. Cross on Evidence suggests34 that a "significant" probative value is a probative value which is "important" or "of consequence". The significance of the probative value of the tendency evidence under s 97(1)(b) must depend on the nature of the facts in issue to which the evidence is relevant and the significance or importance which that evidence may have in establishing those facts. So understood, the evidence must be influential in the context of fact-finding. In comparison, the requisite probative value of the evidence is not spelled out in s 137. It requires the "probative value" of the evidence to be weighed against the danger of unfair prejudice to the defendant. This again requires that the evidence be taken at its highest in the effect it could achieve on the assessment of the probability of the existence of the facts in issue. It has been explained that the basic enquiry as to whether evidence "could rationally affect [...] the assessment of the probability of the existence of a fact in issue", which appears in both s 55 and the definition of "probative value" of evidence, is not altered by the further enquiry required by the definition as to the extent to which the evidence could have the effect stated. The assessment of extent does not import new and different considerations, such as might affect whether the evidence is accepted as credible or reliable. 34 Cross on Evidence, 10th Aust ed (2015) at 763 [21252]. Bell The same construction must be given to the words "could rationally affect [...] the assessment of the probability of the existence of a fact in issue" where they appear in the definition of "probative value" as is given to those words in s 55. This requires an assessment of the capability of the evidence to have the stated effect. And because the question to which those words give rise remains the same for the passages of the definition of "probative value", that enquiry must be approached in the same way as s 55 requires: on the assumption that the jury will accept the evidence. The words "if it were accepted", which appear in s 55, should be understood also to qualify the evidence to which the Dictionary definition refers. It is an approach dictated by the language of the provisions and the nature of the task to be undertaken. At a level of logic it is difficult to see how a trial judge could approach the question as to what the probative value of the evidence could be in any other way, for the reasons alluded to by Gaudron J in Adam v The Queen35. It must also be understood that the basis upon which a trial judge proceeds, that the jury will accept the evidence taken at its highest, does not distort a finding as to the real probative value of the evidence. The circumstances surrounding the evidence may indicate that its highest level is not very high at all. The example given by J D Heydon QC36 was of an identification made very briefly in foggy conditions and in bad light by a witness who did not know the person identified. As he points out, on one approach it is possible to say that taken at its highest it is as high as any other identification, and then look for particular weaknesses in the evidence (which would include reliability). On another approach, it is an identification, but a weak one because it is simply unconvincing. The former is the approach undertaken by the Victorian Court of Appeal; the latter by the New South Wales Court of Criminal Appeal. The point presently to be made is that it is the latter approach which the statute requires. This is the assessment undertaken by the trial judge of the probative value of the evidence. At a practical level, it could not be intended that a trial judge undertake an assessment of the actual probative value of the evidence at the point of admissibility. As Simpson J pointed out in R v XY37, the evidence will usually be tendered before the full picture can be seen. A determination of the weight to be given to the evidence, such as by reference to its credibility or reliability, will 35 (2001) 207 CLR 96 at 115 [60]. 36 Heydon, "Is the Weight of Evidence Material to Its Admissibility?", (2014) 26 Current Issues in Criminal Justice 219 at 234. 37 (2013) 84 NSWLR 363 at 400 [167], [170]. Bell depend not only on its place in the evidence as a whole, but on an assessment of witnesses after examination and cross-examination and after weighing the account of each witness against each other. Once it is understood that an assumption as to the jury's acceptance of the evidence must be made, it follows that no question as to credibility of the evidence, or the witness giving it, can arise. For the same reason, no question as to the reliability of the evidence can arise. If the jury are to be taken to accept the evidence, they will be taken to accept it completely in proof of the facts stated. There can be no disaggregation of the two β reliability and credibility β as Dupas v The Queen may imply. They are both subsumed in the jury's acceptance of the evidence. The Evidence Act itself creates a difficulty in separating reliability from credibility. The definition of "credibility", which concerns both a person who has made a representation that has been admitted into evidence and a witness, includes the person's or witness's "ability to observe or remember facts and events" relevant to the representation or their evidence. These are matters which go to the reliability of the evidence. The view expressed in Dupas v The Queen, which reserved a particular role for the trial judge with respect to the reliability of evidence, did not have its foundations in textual considerations of the Evidence Act, but rather in a policy attributed to the common law. The Evidence Act contains no warrant for the application of tests of reliability or credibility in connection with ss 97(1)(b) and 137. The only occasion for a trial judge to consider the reliability of evidence, in connection with the admissibility of evidence, is provided by s 65(2)(c) and (d) and s 85. It is the evident policy of the Act that, generally speaking, questions as to the reliability or otherwise of evidence are matters for a jury, albeit that a jury would need to be warned by the trial judge about evidence which may be unreliable pursuant to s 165. In arguing that a trial judge should nevertheless consider the reliability of evidence for himself or herself, the appellant placed reliance on what was said by the Australian Law Reform Commission in its report on the proposed Evidence Bill 1987 (Cth)38. In that report the Commission expressed the view that "[t]he reliability of the evidence is an important consideration in assessing its probative value." This view was volunteered somewhat out of the context of the issues with which the Commission was there dealing, which concerned the use of 38 Australian Law Reform Commission, Evidence, Report No 38, (1987) at 81 [146]. Bell exclusionary discretions. Neither s 97(1)(b) nor s 137 fall into this category. In any event, a view of the Commission could hardly prevail over the language of the definition of "probative value" and the way in which it must be taken as intended to apply. The appellant also placed weight on a statement made by McHugh J in Papakosmas v The Queen39. After referring to the definition of "probative value", his Honour said "[t]hat assessment, of course, would necessarily involve considerations of reliability." This appears to have been a comment in passing when dealing with a different issue β whether reliability played any part in the test of relevance40. It is not further explained. It is to be observed that the comment is made with reference to the importance of the probative value of the evidence to the exercise of the powers conferred in ss 135 and 137. In R v XY, Basten JA spoke41 of reliability being taken into account, but this was in the context of an assessment of the risk of prejudice under s 137, not as part of the assessment of the probative value of the evidence, which is the other side of the "weighing" exercise. In R v Shamouil, Spigelman CJ ventured42 that there may be some limited circumstances in which credibility and reliability will be taken into account in determining probative value. His Honour referred in this regard to what had been said by Simpson J in R v Cook43. Her Honour there suggested that evidence that was obviously "preposterous" might be withheld from the jury. It would not seem to be necessary to resort to an assessment of the reliability of evidence of this quality for it to be excluded under s 137. For the reasons already given, evidence which is inherently incredible or fanciful or preposterous would not appear to meet the threshold requirement of relevance. If it were necessary, the court could also resort to the general discretion under which evidence which would cause or result in an undue waste of time may be rejected. 39 (1999) 196 CLR 297 at 323 [86]. 40 See also Papakosmas v The Queen (1999) 196 CLR 297 at 323 [87]. 41 R v XY (2013) 84 NSWLR 363 at 376-377 [48]. 42 R v Shamouil (2006) 66 NSWLR 228 at 236 [56]. 43 [2004] NSWCCA 52 at [43]. Bell Before turning to the application of ss 97(1) and 137 to the facts in this case, there should be reference to the appellant's submission concerning the risk of joint concoction to the determination of admissibility of coincidence evidence. The premise for the appellant's submission β that it is "well-established" that under the identical test in s 98(1)(b) the possibility of joint concoction may deprive evidence of probative value consistently with the approach to similar fact in Hoch v The Queen44 β should not be accepted45. evidence stated Section 101(2) places a further restriction on the admission of tendency and coincidence evidence. That restriction does not import the "rational view ... inconsistent with the guilt of the accused" test found in Hoch v The Queen46. The significance of the risk of joint concoction to the application of the s 101(2) test should be left to an occasion when it is raised in a concrete factual setting. The extent of the probative value of the evidence The tendency evidence The complainant gave evidence of an occasion which occurred shortly before the appellant and the complainant's grandmother separated. There is no suggestion that there was anything untoward about the activity being undertaken at the time. The complainant and a granddaughter of the appellant were giving the appellant a back massage, as he had requested. The appellant was lying face down on a bed. The complainant was standing next to the bed. The complainant said that the appellant "ran his hand up my leg". She was wearing shorts at the time, so his hand did not contact her skin. She said that she moved away. It may be accepted for present purposes that the evidence was relevant as it was capable of showing that the appellant had a sexual interest in the complainant, as the trial judge ruled. This is not put in issue by the appellant. But s 97(1)(b) requires more. It requires that the evidence have significant probative value. In a case of this kind, the probative value of this evidence lies in its capacity to support the credibility of a complainant's account. In cases where 44 (1988) 165 CLR 292 at 296 per Mason CJ, Wilson and Gaudron JJ; [1988] HCA 45 See the discussion in McIntosh v The Queen [2015] NSWCCA 184 at [42]-[48] per Basten JA, [172] per Hidden J agreeing, [176] per Wilson J agreeing. 46 See R v Ellis (2003) 58 NSWLR 700 at 714-718 [65]-[95]. Bell there is evidence from a source independent of the complainant, the requisite degree of probative value is more likely to be met. That is not to say that a complainant's unsupported evidence can never meet that test. It is possible that there may be some special features of a complainant's account of an uncharged incident which give it significant probative value. But without more, it is difficult to see how a complainant's evidence of conduct of a sexual kind from an occasion other than the charged acts can be regarded as having the requisite degree of probative value. Evidence from a complainant adduced to show an accused's sexual interest can generally have limited, if any, capacity to rationally affect the probability that the complainant's account of the charged offences is true. It is difficult to see that one might reason rationally to conclude that X's account of charged acts of sexual misconduct is truthful because X gives an account that on another occasion the accused exhibited sexual interest in him or her. For these reasons the tendency evidence given by the complainant did not qualify as having significant probative value and was not admissible under s 97(1)(b). The complaint evidence SS was a friend of the complainant. She gave evidence that the complainant rang her and told her that the complainant's grandparents had separated. The complainant was upset and crying and told SS that her step-grandfather had "touched me", which SS took to mean in the area of the complainant's vagina. The principal issue concerning the probative value of this complaint concerned the time at which it was made. The prosecution case was that it was made in late 2010 or early 2011. The defence case was that it was made much later, after the complainant spoke to her mother about the appellant, which occurred in August 2011. It was accepted that the probative value of this evidence was affected by the time when it was made. It is not necessary to go into the reasons for that. There does not seem to be any reason to doubt the view of the Court of Criminal Appeal, that the preponderance of the evidence points to the complaint having been made at the earlier time, as the complainant suggested47. In 47 IMM v The Queen [2014] NTCCA 20 at [5]-[6]. Bell particular, evidence of events which occurred when the conversation took place enabled it to be placed in time. the complainant about The complaints to the complainant's family all occurred in August 2011. They commenced with a statement made to the complainant's aunt. The aunt had challenged recent conduct. The complainant responded by saying: "[t]he things you are trying to protect me from have already happened". When the complainant would not further expand upon this, the aunt asked "[w]as it [the appellant]?", to which the complainant replied "[y]es". the complainant's The complainant's grandmother was present when the conversation with the aunt took place. The grandmother said in evidence that the complainant, after answering the aunt's enquiry, said "that it had been happening since she [the complainant] was little". The mother was not present when these discussions took place. The aunt rang her to advise what the complainant had been saying about the appellant. The mother spoke to the complainant when she returned home the next day. The mother asked "[h]ow long has this been going on for?" and the complainant replied "from when I was little, about four". The mother asked "[h]ow often did this go on?" and the complainant replied "every day". The complainant said "I was naked β¦ he was naked" and "[h]e used to lay on top of me and squash me". The appellant submitted that an assessment of the probative value of the evidence should have been restricted to its effect upon the complainant's credibility, which is to say by treating it as relevant to context, rather than as evidence that the offences took place. The appellant's submission is reminiscent of the view of the common law that, because of the hearsay rule, evidence of recent complaint could only be used for a purpose relating to the credibility of the complainant. It was pointed out in Papakosmas v The Queen48 that the Evidence Act has changed that. The Australian Law Reform Commission recommended that complaint evidence be received as evidence of the facts in issue49 in certain circumstances. The concern of the common law with respect to hearsay evidence of this kind was its potential to be unreliable. Section 65 addresses this by requiring a judge 48 (1999) 196 CLR 297 at 309 [33]. 49 Australian Law Reform Commission, Evidence, Report No 26 (Interim), (1985), vol 1 at 383 [693]. Bell to consider the reliability of evidence, when the maker is not called. When the maker is called, as in this case, s 66 requires that the act complained of be fresh in the memory of the maker of the statement. The complaint evidence was tendered for the purpose of proving the acts charged. Given the content of the evidence, the evident distress of the complainant in making the complaint and the timing of the earlier complaint, it cannot be said that its probative value was low. It was potentially significant. The trial judge held that the evidence did not create the prejudice to which s 137 referred50. Neither at trial nor in the Court of Criminal Appeal did the appellant suggest that there was a risk of the jury misusing the evidence or giving it more weight than it deserved, as he now seeks to do. In any event, it is difficult to see how the jury could misunderstand the use to which this evidence could be put. There is no reason to think that the jury would apply it as tendency evidence, when they have been directed that they may use it more directly. Conclusion and orders The grounds of appeal respecting the complaint evidence are not made out, but the ground alleging error in assessing the tendency evidence for probative value is. The result is that inadmissible tendency evidence was admitted. The trial miscarried. The appeal should be allowed and the order of the Court of Criminal Appeal of the Northern Territory dismissing the appeal should be set aside. In lieu it should be ordered that the appeal against conviction be allowed, that the appellant's conviction be quashed, and that there be a new trial of the offences of which he was convicted. 50 R v IMM (No 2) (2013) 234 A Crim R 225 at 232 [30]. The relationship between relevance and admissibility in the law of evidence, Sir Richard Eggleston wrote, is a subject which "abounds in ambiguities"51. The Uniform Evidence Acts have removed some of the ambiguities inherent in the common law's treatment of the subject. Some of those ambiguities have been replaced by statutory ambiguities. Conundrums of logic and experience have become conundrums of statutory construction. Within the scheme of the Evidence Act52, all evidence must be "relevant" in order to be admissible but not all evidence that is relevant is admissible53. Evidence is not admissible if it is excluded by or under a provision of the Evidence Act. Numerous provisions of the Evidence Act require or permit the exclusion of evidence, or limit its use, by reference to its "probative value"54. The conundrum of statutory construction at the heart of this appeal concerns the content of the definition of probative value in the dictionary of the Evidence Act, and the relationship between the statutory conception of probative value and the statutory conception of relevance. Within the scheme of the Evidence Act, relevant evidence is "evidence that, if it were accepted, could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceeding"55. According to the definition in the dictionary of the Evidence Act, the probative value of evidence "means the extent to which the evidence could rationally affect the assessment of the probability of the existence of a fact in issue"56. The statutory assumption required by the words "if it were accepted" has the result that evidence must be assumed to be trustworthy for the purpose of determining whether or not the evidence is relevant according to the statutory definition in the dictionary of the Evidence Act. That is because, within the 51 Eggleston, "The Relationship between Relevance and Admissibility in the Law of Evidence", in Glass (ed), Seminars on Evidence, (1970) 53 at 54. 52 Evidence (National Uniform Legislation) Act (NT), materially identical to the Evidence Act 1995 (Cth); Evidence Act 1995 (NSW); Evidence Act 2001 (Tas); Evidence Act 2008 (Vic); and Evidence Act 2011 (ACT). 53 Section 56. 54 Eg ss 97, 98, 101, 135, 137 and 138. 55 Section 55(1). 56 Dictionary, "probative value". scheme of the Evidence Act, evidence that is "accepted"57 is evidence which the tribunal of fact finds to be trustworthy. Within the scheme of the Evidence Act, evidence that is trustworthy is evidence that is "reliable"58, and an aspect of the reliability of all or part of the testimony of a witness is its "credibility". The latter term is defined in the dictionary of the Evidence Act so as to encompass not only the witness's truthfulness but also "the witness's ability to observe or remember facts and events"59. The statutory assumption required by the words "if it were accepted" therefore has the result that, where the tribunal of fact is a jury, a judge determining whether evidence is relevant is "neither required nor permitted ... to make some assessment of whether the jury would or might accept it"60. The judge is required instead to assume that the jury would find the evidence to be credible and otherwise reliable and to ask, on that assumption, whether the jury could rationally infer from the evidence that the existence of a fact in issue is more or less probable. The particular conundrum of statutory construction at the heart of this appeal is whether the same assumption must be made for the purpose of determining probative value. Where the tribunal of fact is a jury, is a judge determining probative value required to assume that the jury would find the evidence to be credible and otherwise reliable and to assess, on that assumption, the extent to which the jury could rationally infer from the evidence that a fact in issue is more or less probable? Alternatively, is the judge required to examine whether the jury could rationally find evidence to be credible and otherwise reliable as a step in determining the extent to which the jury could rationally infer from the evidence that the fact in issue is more or less probable? The underlying statutory ambiguity lies in the absence from the dictionary definition of probative value of an equivalent of the requirement contained in the statutory explanation of relevance that evidence must be assumed to be accepted. The ambiguity was shown up by countervailing statements of McHugh J in 1999 and Gaudron J in 2001. McHugh J thought that the omission was significant. He saw it as confirming that, within the scheme of the Uniform Evidence Acts, an involve[s] considerations of assessment of probative value "necessarily 57 Eg ss 111(2), 165(2)(c). 58 Eg ss 165, 174(1)(b). 59 Dictionary, "credibility". 60 Adam v The Queen (2001) 207 CLR 96 at 105 [22]; [2001] HCA 57. reliability"61. Gaudron J thought that the omission was of no significance. Her view was that because "[a]s a practical matter, evidence can rationally affect the assessment of the probability of a fact in issue only if it is accepted", "the assumption that it will be accepted must be read into the dictionary definition"62. The ambiguity was noted but not resolved by the Australian Law Reform Commission, the New South Wales Law Reform Commission and the Victorian Law Reform Commission in their joint review of the Evidence Act in 200563. It was not addressed in subsequent extensive amendments64. Different approaches have since been taken by the New South Wales Court of Criminal Appeal and by the Victorian Court of Appeal. The approach of the New South Wales Court of Criminal Appeal has developed along lines broadly consistent with the view of Gaudron J that an assessment of the probative value of evidence must be made on the assumption that the evidence is reliable65. The approach of the Victorian Court of Appeal is broadly consistent with the view of McHugh J that an assessment of probative value necessarily involves considerations of reliability66. The Tasmanian Court of Criminal Appeal has adopted the approach of the New South Wales Court of Criminal Appeal67. The Northern Territory Court of Criminal Appeal in the decision now under appeal, although it questioned whether the two approaches are truly irreconcilable68, 61 Papakosmas v The Queen (1999) 196 CLR 297 at 323 [86]; [1999] HCA 37. 62 Adam v The Queen (2001) 207 CLR 96 at 115 [60]. 63 Australian Law Reform Commission, Report No 102, New South Wales Law Reform Commission, Report No 112, Victorian Law Reform Commission, Final Report, Uniform Evidence Law, (2005) at 557-558 [16.16]-[16.22]. 64 Evidence Amendment Act 2007 (NSW); Evidence Amendment Act 2008 (Cth). 65 R v Shamouil (2006) 66 NSWLR 228 at 237 [62]; R v Mundine (2008) 182 A Crim R 302 at 308-309 [32]-[33]; DSJ v The Queen (2012) 84 NSWLR 758 at 66 Dupas v The Queen (2012) 40 VR 182 at 222 [155]; Velkoski v The Queen (2014) 242 A Crim R 222 at 269 [179]. 67 KMJ v Tasmania (2011) 20 Tas R 425 at 441 [34], 444 [42]. 68 IMM v The Queen [2014] NTCCA 20 at [50]. found no error in the adoption by the trial judge of the approach of the New South Wales Court of Criminal Appeal69. While the difference between the two approaches is important, the extent of the difference should not be overstated. On neither approach is the judge in a jury trial required or even permitted to assess the weight which the jury can be expected ultimately to attach to the evidence. The judge does not usurp the fact- finding role of the jury. The judge does not anticipate how the jury is likely to perform that fact-finding role. On neither approach is the judge required to do more than make an assessment of the extent to which the jury "could" rationally infer from the evidence that a fact in issue was more or less probable70. The word "could" in the dictionary definition of probative value is extremely important. What it indicates is that the judge has to make an assessment of the highest use to which the evidence is rationally capable of being put by the jury. The judge's assessment of probative value is an assessment of the maximum potential for the evidence rationally to affect the jury's assessment of the probability of the existence of a fact in issue. The judge has to ask: how much is the evidence rationally capable of contributing to the jury's assessment that the existence of that fact is more or less probable? The difference between the two approaches concerns what is or can be involved in assessing the highest use to which the evidence is rationally capable of being put by the jury. On one approach, the reliability of the evidence must be taken as given. On the other approach, the reliability of the evidence forms part of the assessment. But on either approach, the assessment to be made by the judge remains an assessment of how much the evidence is rationally capable of contributing to the jury's assessment that the existence of a fact in issue is more or less probable. The difference between the two approaches, and the narrowness of the difference between them, can be illuminated by considering an example used by the parties to the appeal to illustrate their competing arguments. The example was of identification evidence given by a witness whose observation was made very briefly in foggy conditions and in bad light. The parties agreed that the probative value of the identification evidence would be high if assessed on the assumption that the evidence would be accepted. It was submitted for the 69 R v IMM (No 2) (2013) 234 A Crim R 225 at 231-232 [29]; R v IMM (No 3) [2013] NTSC 45 at [10]. 70 R v Shamouil (2006) 66 NSWLR 228 at 237 [61]; Dupas v The Queen (2012) 40 VR 182 at 224 [163]. appellant, however, that the probative value of the identification evidence would be low if that assumption were not made. I cannot agree. The question on which the judge's assessment of the probative value of the identification evidence would turn in the example in the absence of the assumption would be whether the jury could rationally find the identification evidence to be reliable. If not, the evidence would be of no probative value. If so, the evidence would remain of high probative value. It would not matter that the obvious weaknesses in the evidence gave rise to a real prospect that the jury would ultimately not accept the witness's identification. Short of being so extreme as to allow the judge to determine at the time that the evidence was sought to be adduced that it would be irrational for the jury to accept the evidence, the weaknesses would not bear on its probative value. Once it is borne in mind that the judge's assessment concerns the highest use to which the evidence is capable of being put by the jury, it is difficult to see significance in the difference between the two approaches other than in an extreme case where the judge is able to determine at the time evidence is sought to be adduced that it would not be open to the jury rationally to find that evidence to be reliable. In most cases, including the leading cases in which the different approaches have been explained in New South Wales71 and Victoria72, the outcome would be the same on either approach. That was the burden of the comments made by Basten JA in R v XY73, in which there is much force. Having laboured the point that the difference between the competing approaches is not often likely to be of great consequence, I turn squarely to address the underlying issue of statutory construction. My conclusion, like that of Nettle and Gordon JJ, is that the view of McHugh J is to be preferred to the Unlike Nettle and Gordon JJ, I gain no assistance in reaching that conclusion from construing the Evidence Act against the background of the common law. As Spigelman CJ observed in R v Ellis74 in a passage which was 71 R v Shamouil (2006) 66 NSWLR 228 at 229-230 [2]-[4], 238 [66]-[67]. 72 Dupas v The Queen (2012) 40 VR 182 at 242-249 [229]-[241]. 73 (2013) 84 NSWLR 363 at 375-381 [41]-[65]. 74 (2003) 58 NSWLR 700 at 716-717 [78]. given prominence in the report of the joint review of the Uniform Evidence Acts "It is ... noteworthy that the Act provides a definition of 'probative value' ... Although the definition could well have been the same as at common law, the fact that such a term was defined at all suggests an intention to ensure consistency for purposes of the Evidence Act for the words, which appear in a number of different sections ... This suggests that the Act, even if substantially based on the common law, was intended to operate in accordance with its own terms." The common law did not employ the concept of probative value with statutory precision, and the common law developed no general rule to the effect that reliability (in the sense now used in the Evidence Act) was or was not to be assumed in assessing probative value for all purposes of determining admissibility. For some purposes, such as determining the admissibility of tendency evidence or of coincidence evidence, it came to be established that the assessment of probative value was required to proceed on the assumption that the truth of the evidence would be accepted76. For other purposes, such as considering the discretion to exclude prosecution evidence, the probative value of which was outweighed by the risk of unfair prejudice to the accused, it has been acknowledged that considerations indicating evidence to be unreliable might on occasions be sufficient to deprive the evidence of probative value77. Together with Nettle and Gordon JJ, I consider the view of McHugh J β that an assessment of probative value necessarily involves considerations of reliability β to be a view that is compelled by the language, structure and evident design of the Evidence Act. To think of evidence that is relevant as evidence that has some probative value and to go on to think of probative value as a measure of the degree to which evidence is relevant is intuitively appealing. It is elegant; it has the attraction of symmetry. For many purposes, it may not be inaccurate. But it is not an exact fit for the conceptual framework which the statutory language erects. The statutory description of relevance requires making an assumption that evidence is reliable; the statutory definition of probative value does not provide for making that assumption. The conceptual framework which 75 Australian Law Reform Commission, Report No 102, New South Wales Law Reform Commission, Report No 112, Victorian Law Reform Commission, Final Report, Uniform Evidence Law, (2005) at 86 [3.30]. 76 Phillips v The Queen (2006) 225 CLR 303 at 323 [63]; [2006] HCA 4 (explaining Pfennig v The Queen (1995) 182 CLR 461 at 485; [1995] HCA 7). 77 Eg Alexander v The Queen (1981) 145 CLR 395 at 433; [1981] HCA 17. the statutory language erects therefore admits of the possibility that relevant evidence will lack probative value because it is not reliable. The statutory language cannot be explained away as lacking in precision. The detailed reports of the Australian Law Reform Commission which laid out the Evidence Act's basic design recommended drawing a conceptual distinction between relevance and probative value. Those reports make clear that the statutory language chosen to explain those distinct concepts of relevance and probative value was chosen to implement a deliberate legislative design. The legislative design was that probative value would involve an assessment of reliability78 and that relevance would not79. The foundation for the view of Gaudron J was the practical observation that evidence can rationally affect the probability of a fact in issue only if it is accepted. Although not universally correct (false denials, for example, can have probative value), the observation is generally correct. But it does not follow from the general correctness of the observation that the assumption that evidence will be accepted must be read into the dictionary definition of probative value. What the observation confirms is that an assessment of whether the evidence could be accepted must be treated as forming part of an assessment of the extent to which the jury could rationally infer from the evidence that a fact in issue was more or less probable. The true import of the observation is to reinforce the view Conscious that the statement I am about to make involves repetition, a judge assessing the probative value of testimony in a jury trial is always required to ask: how much is that testimony rationally capable of contributing to the jury's assessment that the existence of a fact in issue is more or less probable? Performance of that assessment necessitates identification of the fact in issue and of the steps by which it would be open to the jury to reason from the testimony to a conclusion that the existence of that fact is more or less probable. The result of the construction I prefer is that, where credibility of the testimony is raised as an issue going to the probative value of the testimony, the judge will have to ask as part of that assessment: would it be open to the jury, as a step in reasoning from the testimony to the conclusion that the existence of the fact in issue is more or less probable, rationally to find that the testimony is credible? If the answer to that question is that the jury could not rationally find that the testimony is 78 Australian Law Reform Commission, Evidence, Report No 38, (1987) at 80-81 79 Australian Law Reform Commission, Evidence, Report No 26, (1985), vol 1 at 350-351 [641], vol 2 at 131-132 [58]; Australian Law Reform Commission, Evidence, Report No 38, (1987) at 70 [122], 71 [125]. credible, the testimony has no probative value. If the answer is that the jury could rationally find that the testimony is credible, the probative value of the testimony (like the probative value of testimony about which there is no issue of credibility) falls to be measured by reference to the highest use to which the jury could rationally put the testimony having found it to be credible. It follows from my conclusion on the main issue of principle in the appeal that the trial judge and the Northern Territory Court of Criminal Appeal adopted the wrong approach to the assessment of probative value. It is necessary now to consider whether the application of the correct test could have resulted in the trial judge properly concluding that the tendency evidence and complaint evidence in the present case were inadmissible. My resolution of that subsidiary issue differs from its resolution by Nettle and Gordon JJ, and leads me to agree with French CJ, Kiefel, Bell and Keane JJ that the tendency evidence was improperly admitted and that the complaint evidence was properly admitted. Whether or not the tendency evidence was inadmissible turns on whether the condition of admissibility set out in s 97(1)(b) of the Evidence Act could be met. Adopting the correct approach to the assessment of probative value, was it open to the trial judge to think "that the evidence will, either by itself or having regard to other evidence adduced or to be adduced by the party seeking to adduce the evidence, have significant probative value"? To warrant the description of having "significant probative value", the capacity of the evidence to contribute to the proof or disproof of the existence of a fact in issue must be more than simply the capacity to make the existence of that fact more or less probable. To the extent that similes can help elucidate the statutory measure of "significant", the capacity of the evidence to contribute to the proof or disproof of the existence of the fact in issue does not need to be "substantial" but does need to be "important" or "of consequence"80. The significance of the probative value of the evidence falls to be gauged having regard to the issues which would arise for the consideration of the jury in reasoning that the evidence made a fact in issue more or less probable and having regard to other evidence bearing on the existence of that fact adduced or to be adduced by the party seeking to adduce the evidence. The nature of tendency evidence adduced by the prosecution in a criminal trial is that it is evidence of another occasion or occasions on which the accused acted in a particular way. The evidence is adduced in order to provide a 80 Lockyer (1996) 89 A Crim R 457 at 459; DSJ v The Queen (2012) 84 NSWLR 758 foundation for an inference that the accused has or had a tendency to act in that way or to have a particular state of mind, the existence of which tendency makes it more probable that the accused acted in a particular way or had a particular state of mind at the time or in the circumstances of the alleged offence81. Tendency evidence is thus evidence the relevance of which lies in its capacity indirectly to affect the assessment of the probability of the existence of the fact in issue of the accused's action or state of mind at the time or in the circumstances of the alleged offence. The tendency evidence in question in the present case β the testimony of the complainant about the "massage incident" β was evidence of that nature. The prosecution sought to adduce it in order to provide a foundation for an inference that the appellant had a sexual interest in the complainant on the basis that the existence of that sexual interest increased the probability that the appellant committed one or more of the sexual offences against the complainant with which he was charged. The Northern Territory Court of Criminal Appeal was undoubtedly correct to proceed on the basis that there is no general rule that the uncorroborated tendency evidence of a complainant is inadmissible and to state that lack of corroboration is a matter of weight for the jury82. Provided the jury could rationally find the complainant to be credible, her tendency evidence was of some probative value: if the jury were to find the complainant to be credible, the evidence provided a basis on which the jury could go on rationally and indirectly to infer that there was an increased probability that the appellant committed one or more of the sexual offences against the complainant with which he was charged. The real question is whether that probative value was capable of warranting the label of significant. The difficulty of concluding that the complainant's testimony about the massage incident was capable of having significant probative value was not just that the testimony was uncorroborated. Her testimony about the massage incident was uncorroborated within a context in which the credibility of the whole of her testimony was in issue. There was nothing to make her than her uncorroborated uncorroborated testimony about the occasions of the offences charged. There was no rational basis for the jury to accept one part of the complainant's testimony but to reject the other. The increased probability of the appellant having committed the offences which would follow from the jury accepting that part of the complainant's testimony which constituted tendency evidence could in incident more credible testimony about that 81 Elomar v The Queen (2014) 316 ALR 206 at 260 [253], 278 [360]. 82 IMM v The Queen [2014] NTCCA 20 at [43]-[44]. those circumstances add nothing of consequence to the jury's assessment of that probability based on its consideration of that part of the complainant's testimony which constituted direct testimony about what the appellant in fact did on the occasions of the offences. The probative value of the tendency evidence could not be regarded as significant. For that reason, in my view, the tendency evidence was improperly admitted in the present case, and application of the correct test of probative value could not have resulted in the tendency evidence having been properly admitted. Whether or not the complaint evidence was properly admitted turns on the correctness of the result of the trial judge's application of the general rule in s 137 that "[i]n a criminal proceeding, the court must refuse to admit evidence adduced by the prosecutor if its probative value is outweighed by the danger of unfair prejudice to the defendant". The rule requires the judge in a jury trial to ask: (1) How much does this evidence contribute to the prosecution case that the existence of a fact in issue is more or less probable? (2) How much does the same evidence give rise to a danger of unfair prejudice to the accused? (3) Does (1) outweigh (2)? Unless application of s 137 is to be a zero sum game, the danger to the accused measured in (2) must lie in something other than the contribution to the prosecution case measured in (1)83. The conclusion that the application of the correct test of probative value could have resulted in the complaint evidence in the present case not being admitted, in my view, faces two insurmountable difficulties. The first is that the trial judge's exclusion of considerations of credibility could only have made a difference to the trial judge's evaluation of probative value in the extreme case of the trial judge concluding that the complaint evidence was so incredible that it could not be accepted by the jury. The appellant made no submission that this was such a case. The second is that the assessment of both probative value and unfair prejudice was necessarily performed by the trial judge at the time the evidence was sought to be adduced by the prosecution on the basis of the material then available to the judge and having regard to the submissions then made to the judge. There was simply nothing before the trial judge to indicate that the complaint evidence gave rise to a danger of unfair prejudice. The trial judge found that there was none. Any error of the trial judge in her evaluation of the probative value of the evidence could therefore have made no difference to the correctness of her decision not to exclude the evidence. I agree with the orders proposed by French CJ, Kiefel, Bell and Keane JJ. 83 Cf Festa v The Queen (2001) 208 CLR 593 at 603 [22]; [2001] HCA 72. NettleJ 113 NETTLE AND GORDON JJ. This appeal concerns the admissibility of evidence as tendency evidence under s 97 of the Evidence (National Uniform Legislation) Act (NT) ("the Act") and the exclusion of evidence under s 137 of the Act. It raises the question of whether a judge should have regard to the credibility and reliability of evidence in determining its probative value for the purposes of ss 97 and 137 of the Act. For the reasons which follow, that question should be answered yes. Before proceeding further, it is important to be clear about what is meant by "credibility" and "reliability" in this context. At common law, a distinction was ordinarily drawn between the two concepts84. The credibility of a witness was commonly understood as meaning the "truthfulness" of the witness β whether the witness genuinely believed that he or she was telling the truth. Reliability, on the other hand, referred to the ability of the witness accurately to discern and relay the truth as to an event, including the witness's ability to observe and remember facts. For example, if an event occurred a long time ago, that might affect the reliability of the witness because it is generally accepted that memory is prone to fade over time. Credibility and reliability are used in those senses throughout these reasons. The facts The appellant was charged with the following four offences which it was alleged he committed on his step-granddaughter ("the complainant"): (1) On or about 12 June 2002, indecent dealing with a child under 16 (touching the child's vagina while the child was in the bath, when the child was aged about four); Between 1 January 2004 and 13 June 2004, indecent dealing with a child under 16 (rubbing his penis on the outside of the child's vagina, when the child was aged about five); Between 1 December 2004 and 31 January 2005, sexual intercourse with a child under 16 (performing cunnilingus on the child, when the child was aged about six); (4) On 2 November 2009, indecent dealing with a child under 16 (rubbing his penis on the outside of the child's vagina, when the child was aged about 11). 84 See Dupas v The Queen (2012) 40 VR 182 at 253-255 [260]-[266]; R v XY (2013) 84 NSWLR 363 at 377 [49] per Basten JA. NettleJ Following a trial in the Supreme Court of the Northern Territory, the appellant was found not guilty of count 1 but guilty of the other counts. Context evidence The events leading up to the trial began when the complainant made a complaint to family members in August 2011 and the police were informed. The police conducted interviews with the complainant on 31 August 2011, 3 September 2011 and 27 January 2012. The first two interviews were admitted as part of the complainant's evidence at the trial. The Crown alleged that the charged acts occurred during a continuing course of sexual abuse (during occasions when the appellant had access to the complainant) beginning when the complainant was about four years old and continuing until the end of the relationship between the appellant and the complainant's grandmother, when the complainant was 12 years old. The complainant's evidence of that history of sexual abuse was admitted, without objection, as "context evidence" and the jury were directed as to the limited way that context evidence might be used. Tendency evidence In the police interview conducted on 31 August 2011, the complainant stated that, sometime after the last of the charged incidents, she and another girl were giving the appellant a back massage and "[the appellant] ran his hand up my leg" ("the massage incident"). The massage incident evidence was admitted, over objection, as tendency evidence under s 97 of the Act, to establish that the appellant had a sexual interest in the complainant and was prepared to act on it. In making the determination to admit the evidence of the massage incident as tendency evidence under s 97 of the Act, the judge considered that she was bound to assume that the evidence would be accepted. Her Honour ruled that, if accepted, it was capable of showing the appellant's inappropriate sexual interest in, and lack of inhibition regarding sexual conduct with, the complainant which had a strong temporal nexus to the charged acts. The judge also ruled that, assuming the evidence were accepted, its probative value would not be unfairly prejudicial and, consequently, that it should not be excluded under s 135; and that, assuming the evidence were accepted, its probative value would outweigh the risk of unfair prejudice and, consequently, that it should not be excluded under s 13785. 85 R v IMM (No 3) [2013] NTSC 45 at [10]. NettleJ The judge explained to the jury that the Crown's purpose in leading the massage incident evidence was to prove that the appellant had a sexual interest in the complainant. She directed the jury that, if they accepted beyond reasonable doubt that the massage incident occurred and that it showed that the appellant was sexually interested in and attracted to the complainant, and was willing to act on that attraction, they could use that finding in determining whether the appellant committed the offences charged. The judge also warned the jury that the massage incident evidence could not alone prove guilt, that they could not substitute the massage incident evidence for the evidence of the offences charged, and that they must not allow the massage incident evidence to close their minds against the appellant or to cause them to pay less attention to the other evidence. On appeal, the Court of Criminal Appeal of the Northern Territory86 affirmed the judge's ruling that the massage incident evidence possessed the capacity to demonstrate that the appellant had a sexual interest in the complainant, and that it had a strong temporal nexus with the charged acts. Their Honours rejected the appellant's contention that, because the massage incident evidence was uncorroborated, it lacked sufficient probative value to be admissible under s 97. The Court of Criminal Appeal stated that there is no general rule that evidence which comes solely from a complainant lacks sufficient probative value to be admitted under s 97, and that the lack of corroboration was a matter of weight for the jury and not of admissibility. The Court of Criminal Appeal also endorsed the approach taken in R v Shamouil87 to the interpretation of s 97. Their Honours rejected the appellant's contention that, because it is established that a judge must not admit evidence as coincidence evidence under s 98 where there is a real possibility of mutual concoction, it is apparent that s 97 equally requires a judge to consider the credibility and reliability of evidence sought to be adduced under s 97 of the Act. The Court of Criminal Appeal stated that, although the Shamouil interpretation of s 97 allows for circumstances where the credibility or reliability of evidence is such that a judge can determine it would not be open to a jury to regard the evidence as having any probative value, the exclusion of evidence on that basis is distinct from the question of whether evidence sought to be adduced as coincidence evidence is affected by a real possibility of mutual concoction. And that was so, it was said, even though a risk of mutual concoction necessarily affects the probative value of the evidence. Their Honours further observed that, in any event, there were no credibility issues affecting the probative value of the 86 IMM v The Queen [2014] NTCCA 20. 87 (2006) 66 NSWLR 228. NettleJ massage incident evidence, for the reason that the appellant had not advanced any basis to suppose that the complainant's evidence concerning the massage incident was any less credible than the remainder of her evidence. Their Honours also affirmed that the admission of the massage incident evidence under s 97 did not involve any danger of unfair prejudice so as to warrant exclusion under s 137. Complaint evidence In addition to the evidence admitted as tendency evidence, the Crown adduced "complaint evidence" from several witnesses: SS (the complainant's friend): the complainant told her that the appellant "touched me"; SW (the complainant's aunt): the complainant told her "The things you are trying to protect me from have already happened"; when the SW asked complainant replied "Yes"; the complainant "Was it [the appellant]?", SC (the complainant's grandmother): when SW asked if "[the appellant] had been touching her, this is when ... [the complainant] told [SW] that it had been happening since she was little"; (4) KW (the complainant's mother): when KW asked the complainant "How long has this been going on for?", the complainant replied "from when I was little, about four"; when KW asked the complainant "How often did this go on?", the complainant replied "every day"; the complainant said "I was naked ... he was naked" and "He used to lay on top of me and squash me". The complaint evidence was admitted, over objection, under s 66 of the Act. The judge held that the complaints made to SS and KW and the complainant's distressed demeanour described by those witnesses qualified for admission under s 66 of the Act on the basis that the subject of the complaints was likely to be clear in the complainant's memory at the time the complaints were made. Her Honour ruled that the complaint to KW was to be viewed in the context of what was said to SW and SC the night before. The judge also ruled that the complaint evidence was not misleading or confusing and therefore should not be excluded under s 135. The judge further ruled that, assuming the complaint evidence were accepted, as was mandated by Shamouil, it would not be productive of the kind of prejudice to which s 137 is directed, namely, a real risk that the evidence would be misused or divert jurors from their task in spite of directions. No application was made for the judge to limit the use of the complaint evidence pursuant to s 136 of the Act. NettleJ The judge directed the jury that it was a matter for them whether a complaint was made, when it was made and what its contents were. Her Honour told them that, if they were satisfied that the complaint evidence was substantially to the effect that the appellant had engaged in sexual misconduct with the complainant, they were entitled to use the complaint evidence as some evidence that the offences occurred; and, if they did use it as evidence of the offences charged, the weight they gave it was a matter for them. The judge directed the jury that they were also entitled to consider the distress of the complainant but that they should bear in mind the possibility that it could have been caused by some other factor. In accordance with s 165, the judge also gave the jury a reliability warning. On appeal, the Court of Criminal Appeal affirmed the judge's ruling that the prejudicial effect of the complaint evidence could not have outweighed its probative value. The Court of Criminal Appeal was of the view that the preponderance of evidence supported the complaint to SS being made first, and that the complaint evidence had significant probative value. Their Honours said that the disclosures to KW were referable to the counts on the indictment, both as general disclosures of sexual misconduct and as including details consistent with individual charges. Their Honours stated that the complaint to KW had further significant probative value in view of the detail of the complaint and KW's evidence of the complainant's significant distress at the time of the complaint. The Court of Criminal Appeal further held that the judge made no error in not limiting the use of the complaint evidence, because the use of complaint evidence under s 66 is not contingent on specificity. Any lack of specificity is a matter of weight for the jury. The Court of Criminal Appeal considered that, although it was possible that complaints of a general nature were referable to uncharged acts as opposed to charged acts, that did not prevent the jury from using those complaints as "some evidence"88 that the charged offences occurred. The Court of Criminal Appeal rejected the appellant's contention that there was a danger that the jury would use the complaint evidence as tendency evidence, and thus that the judge should have directed the jury: that they could not use the complaint evidence in that fashion unless satisfied beyond reasonable doubt that it showed that the appellant was sexually interested in and attracted to the complainant, and was willing to act on that attraction; that it could not alone prove guilt; that it was not permissible to substitute it for the evidence of the offences charged; and that the jury must not allow it to close their minds against the appellant or to cause them to pay less attention to the other evidence. The Court of Criminal Appeal considered that it would have been apparent to the jury 88 IMM v The Queen [2014] NTCCA 20 at [35] per Kelly J (Riley CJ agreeing at [1], Hiley J agreeing at [54]). NettleJ that the tendency evidence directions which the judge gave them concerning the massage incident evidence applied equally to the complaint evidence. Relevant provisions Section 56 of the Act provides that, except as otherwise provided by the Act, evidence that is relevant in a proceeding is admissible in the proceeding and evidence that is not relevant in a proceeding is inadmissible. Section 55(1) provides that evidence that is relevant in a proceeding is: "evidence that, if it were accepted, could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceeding." (emphasis added) The tendency rule is set out in s 97 of the Act. Section 97(1) provides that: "Evidence of the character, reputation or conduct of a person, or a tendency that a person has or had, is not admissible to prove that a person has or had a tendency (whether because of the person's character or otherwise) to act in a particular way, or to have a particular state of mind unless: the party seeking to adduce the evidence gave reasonable notice in writing to each other party of the party's intention to adduce the evidence; and the court thinks that the evidence will, either by itself or having regard to other evidence adduced or to be adduced by the party seeking to adduce the evidence, have significant probative value." (emphasis added) "Probative value" of evidence is defined in the Dictionary to the Act as meaning: "the extent to which the evidence could rationally affect the assessment of the probability of the existence of a fact in issue." Section 101 provides, inter alia, that in a criminal proceeding, tendency or coincidence evidence about a defendant that is adduced by the prosecution cannot be used against the defendant unless: "the probative value of the evidence substantially outweighs any prejudicial effect it may have on the defendant." (emphasis added) NettleJ Section 135 relevantly provides that the court may refuse to admit evidence: "if its probative value is substantially outweighed by the danger that the evidence might: be unfairly prejudicial to a party". (emphasis added) Section 137 provides that in a criminal proceeding the court must refuse to admit evidence adduced by the prosecutor: "if its probative value is outweighed by the danger of unfair prejudice to the defendant." (emphasis added) Relevance and probative value As will be apparent from the provisions just referred to, the definition of "evidence that is relevant" in s 55 of the Act is expressly premised on the assumption that the evidence will be accepted. Consequently, the question which s 55 poses is whether, assuming the evidence is accepted, it could rationally affect the assessment of the probability of the existence of a fact in issue; or more precisely, whether, assuming the evidence is accepted, it would have the capacity rationally to affect the assessment of the probability of the existence of a fact in issue. By contrast, the test of admissibility in s 97 is not expressly premised on any such assumption. In terms, the question which it poses is whether the court thinks that the evidence will have significant "probative value" or, more precisely, whether the court thinks that the evidence will to a significant extent have the capacity rationally to affect the assessment of the probability of the existence of a fact in issue. Since s 55 is expressly premised on the assumption that the evidence will be accepted, it is plain that the determination of the relevance of evidence in accordance with s 55 does not involve any assessment of whether a jury would or might accept the evidence89. By contrast, unless such an assumption is to be read into s 97, the plain and ordinary meaning of the words of s 97 is that s 97 does not assume that the evidence will be accepted. If so, the determination of whether the court thinks that the evidence will have the capacity rationally to affect the assessment of the probability of the existence of a fact in issue to a significant extent is a determination that must be made without making any 89 Adam v The Queen (2001) 207 CLR 96 at 105 [22] per Gleeson CJ, McHugh, Kirby and Hayne JJ; [2001] HCA 57. NettleJ assumptions about whether the evidence will be accepted, and, therefore, it is a determination that logically depends, among other things, on the court's assessment of the reliability of the evidence or, more accurately in the case of trial by jury, the court's assessment of the degree of reliability which it would be open to the jury rationally to attribute to the evidence. In Papakosmas v The Queen90 McHugh J observed that, for the purposes of s 137, the definition of "probative value" would "necessarily involve considerations of reliability". In contrast, in Adam v The Queen91, Gaudron J postulated (without reference to Papakosmas) that it was necessary to read the definition of "probative value" as if it included an assumption that the evidence would be accepted: "As a practical matter, evidence can rationally affect the assessment of the probability of a fact in issue only if it is accepted. Accordingly, the assumption that it will be accepted must be read into the dictionary definition." With respect, the view expressed by McHugh J in Papakosmas is logically to be preferred. Evidence cannot affect the assessment of the probability of the existence of a fact in issue unless the evidence is rationally capable of being accepted. Hence, to determine whether evidence has the capacity rationally to affect the assessment of the probability of the existence of a fact in issue requires a determination of whether the evidence is rationally capable of acceptance. And for the court to determine whether it thinks that evidence is rationally capable of acceptance requires the court, among other things, to determine whether it thinks that the degree of reliability which it would be open to the jury rationally to attribute to the evidence is such that it will be open to the jury rationally to accept the evidence. It follows that, according to ordinary principles of statutory construction, there is no warrant for reading s 97 or the definition of "probative value" in the Dictionary to the Act as involving an assumption that evidence will be accepted92. 90 (1999) 196 CLR 297 at 323 [86]; [1999] HCA 37. 91 (2001) 207 CLR 96 at 115 [60]. 92 Taylor v Owners β Strata Plan No 11564 (2014) 253 CLR 531 at 548-549 [37]- [40] per French CJ, Crennan and Bell JJ; [2014] HCA 9. NettleJ The Australian Law Reform Commission reports That conclusion is fortified by reference to the Australian Law Reform Commission ("the Commission") reports preceding the enactment of the Act93. The Commission proposed the definition of "probative value" in the form in which it was finally enacted94 and emphasised that reliability is an important consideration in assessing probative value95: "The Commission remains of the view that the court can and should consider the reliability of the evidence concerned in applying those discretions. The Bill does not refer to the 'unreliability of the evidence' but it refers to the probative value of the evidence. ... [T]he judge can take account of the fact that the plaintiff's evidence is hearsay as that will go to the probative value of the plaintiff's evidence. The judge can also look to the surrounding circumstances in which the statement was made to the plaintiff and other matters going to the reliability of the evidence, such as how recently after the event the statement was made, whether the person who made the statement had an interest or not in the matters referred to and whether the circumstances placed some obligation on the person who made the statement to tell the truth. The reliability of the evidence is an important consideration in assessing its probative value." (emphasis added) That passage of the Commission's report is illuminating because it was written in response to a private submission that suggested that the discretionary 93 Australian Law Reform Commission, Evidence, Report No 26 (Interim), (1985); Australian Law Reform Commission, Evidence, Report No 38, (1987); Interpretation Act (NT), s 62B(1), (2)(b). 94 Australian Law Reform Commission, Evidence, Report No 26 (Interim), (1985), vol 2, Appendix A, cl 3. 95 Australian Law Reform Commission, Evidence, Report No 38, (1987) at 80-81 [146]. See also Australian Law Reform Commission, Evidence, Report No 26 (Interim), (1985), vol 1 at 217 [395] where the Commission discussed factors rendering reputation evidence of "doubtful probative value" and referred to the possibility that that might be so because of hearsay, rumour or a source of uncertain trustworthiness (none of which would be relevant if the credibility and reliability of the evidence were assumed); Australian Law Reform Commission, Evidence, Report No 26 (Interim), (1985), vol 2, Appendix C at 207 [143] where the Commission said in respect of evidence alleged to have been fabricated: "Reliability goes to weight, but an unreliable confession is of low probative value, which may be outweighed by 'prejudice'." NettleJ the published draft exclusions legislation could not accommodate considerations of reliability96. The fact that the Commission considered that the draft definition of "probative value" made clear that the assessment of probative value involves questions of reliability in a sense that includes both reliability and credibility is a significant indicator that the definition was enacted in that form to achieve what the Commission considered to be its effect97. It may be noted that the Commission was there referring to the meaning of "probative value" in the context of discretionary exclusions which were later enacted in the form of ss 135 and 137. There was no reference in that passage of the Commission's report to s 97. But "probative value" has the same meaning in s 97 as it does in ss 135 and 137 (and ss 98, 101, 138 and 190). In addition to the general precept that, in the absence of contrary intention, it is assumed that words are used consistently throughout a statute98, the Act expressly provides that the definitions contained in the Dictionary to the Act apply throughout the Act99. It is unlikely that the omission from the definition of "probative value" of the assumption that evidence would be accepted was a drafting oversight or otherwise than calculated to ensure that, in assessing probative value, the court would have regard to reliability. The plain and ordinary meaning of the definition is that no such assumption is to be made, and the Commission's report confirms that. The common law background That construction of "probative value" also derives support from the common law background against which the Act was enacted100. Although the 96 Australian Law Reform Commission, Evidence, Report No 38, (1987) at 80 [146] 97 Black-Clawson International Ltd v Papierwerke Waldhof-Aschaffenburg AG [1975] AC 591 at 622-623 per Viscount Dilhorne. 98 Registrar of Titles (WA) v Franzon (1975) 132 CLR 611 at 618 per Mason J; [1975] HCA 41; Pearce and Geddes, Statutory Interpretation in Australia, 8th ed (2014) at 150 [4.6]; BD (1997) 94 A Crim R 131 at 139 per Hunt CJ at CL; R v Ellis (2003) 58 NSWLR 700 at 716-717 [78] per Spigelman CJ (Sully J agreeing at 719 [101], O'Keefe J agreeing at 719 [102], Hidden and Buddin JJ agreeing at 719 99 Evidence (National Uniform Legislation) Act (NT), s 3(1). 100 See Pfennig v The Queen (1995) 182 CLR 461 at 475-485 per Mason CJ, Deane and Dawson JJ; [1995] HCA 7; Dupas (2012) 40 VR 182 at 198-219 [69]-[142]. NettleJ Act was designed to make substantial changes to the common law of evidence101, s 9 of the Act expressly provides that the Act does not affect the common law of evidence except so far as the Act provides otherwise expressly or by necessary intendment. Consequently, members of this Court have accepted that the common law may provide guidance in the interpretation of the Act102. To the extent that there is any ambiguity in the definition of "probative value" in the Act103, the common law background points in favour of an interpretation of "probative value" which allows for considerations of credibility and reliability to be taken into account. The phrase "probative value" appears to have entered the judicial lexicon during the mid-twentieth century104 and, although at first used only sparingly, was thereafter increasingly deployed in contexts which connoted a holistic assessment of the character or quality of the evidence, unrestrained by any assumption that the evidence was reliable or credible. For instance, in Myers v Director of Public Prosecutions105, members of the House of Lords described the "probative value" of a document as dependent, to a large degree, on the likelihood of its contents being correct, accurate and true. In Jackson v The Queen106, this Court held that in determining the "probative value" of an admission, it was necessary to look at "all the 101 Evidence (National Uniform Legislation) Act (NT), s 2A; Papakosmas (1999) 196 CLR 297 at 302 [10], 310 [38]-[40] per Gleeson CJ and Hayne J, 312 [46] per Gaudron and Kirby JJ, 324 [88] per McHugh J. 102 Papakosmas (1999) 196 CLR 297 at 313 [51] per Gaudron and Kirby JJ. 103 Cf Ellis (2003) 58 NSWLR 700 at 716-717 [78] per Spigelman CJ (Sully J agreeing at 719 [101], O'Keefe J agreeing at 719 [102], Hidden and Buddin JJ agreeing at 719 [103]). 104 There are, however, rare examples of earlier usage of the phrase. See, eg, Pickup v Thames Insurance Co (1878) 3 QBD 594 at 598; Muse v Arlington Hotel Co 68 F 637 at 645 (1895); Golden Reward Min Co v Buxton Min Co 97 F 413 at 417 (8th Cir 1899); In re Joseph (1927) 8 CBR 187 at 187; Wilkie v Wilkie [1928] NZLR 406 at 407; McKay v The King (1935) 54 CLR 1 at 7 per Starke J; [1935] HCA 70; Walker v Walker (1937) 57 CLR 630 at 635 per Starke J, 638 per Evatt J; [1937] HCA 44. 105 [1965] AC 1001 at 1027 per Lord Morris of Borth-y-Gest; see also at 1022 per Lord Reid. 106 (1962) 108 CLR 591 at 596; [1962] HCA 49. NettleJ circumstances surrounding the making of it which tend to show either that it can safely be relied upon or that it would be unwise to do so" (emphasis added). The Court remarked107: "It would for example be clearly permissible to show that, at the time a person confessed to the commission of a crime, he was drunk or insane or had made it as the result of fear or under some other form of pressure and to base upon that evidence an argument that the confession had little or no probative value." Similarly, in R v Swaffield108, Brennan CJ and Kirby J made clear that considerations of the reliability of a confession or admission were paramount to assessing its "probative force". Reliability and credibility were also relevant to assessing the probative value of identification evidence at common law. In Alexander v The Queen109, Mason J considered the operation of the Christie discretion110 in relation to identification evidence. His Honour referred to evidence of an initial identification that was later retracted as an example of identification evidence of which "its probative value is so slight as to make it valueless"111. That observation bespeaks the lack of credibility and reliability resulting from retraction. A similar assessment was undertaken by Kirby J in Festa v The Queen112, where his Honour observed that unreliable identification evidence was "'virtually valueless' in terms of probative weight". Most significantly for present purposes, the assessment of the probative value of similar fact evidence at common law plainly involved considerations of reliability and credibility. In Hoch v The Queen113, this Court assessed 107 (1962) 108 CLR 591 at 596. 108 (1998) 192 CLR 159 at 167-170 [10]-[11] per Brennan CJ, 209-210 [124]-[127] per Kirby J; [1998] HCA 1. 109 (1981) 145 CLR 395; [1981] HCA 17. 110 See R v Christie [1914] AC 545. 111 (1981) 145 CLR 395 at 433. 112 (2001) 208 CLR 593 at 644 [169]; [2001] HCA 72. 113 (1988) 165 CLR 292 at 295 per Mason CJ, Wilson and Gaudron JJ, 303 per Brennan and Dawson JJ; [1988] HCA 50. NettleJ "probative value" as turning on an assessment of whether it was likely that the witnesses were telling the truth. To the same effect, in Pfennig v The Queen114 the plurality observed that, in the context of the judge's exercise of the exclusionary discretion to reject evidence where its prejudicial effect outweighs its probative value, the probative value of evidence is lower where the evidence was disputed or where other evidence did not corroborate the witness's assertion that a particular event occurred. In the Canadian case of R v B (CR)115, which was discussed with approval in Pfennig116, the trial judge's task in assessing probative value was described by the Supreme Court of Canada as follows117: "First [the trial judge] has to assess not only the relevance but also the weight of the disputed evidence, although the latter task is normally one for the jury. Second, [the trial judge] must somehow amalgamate relevance and weight to arrive at 'probative value'." (emphasis added) Shamouil, Dupas and XY In this case, a considerable part of the argument was directed to perceived differences of opinion between intermediate appellate courts as to whether reliability and credibility are relevant to the assessment of probative value under the uniform evidence legislation. In Shamouil118, the Court of Criminal Appeal of the Supreme Court of New South Wales held in favour of what has been described as a "restrictive" approach to the circumstances in which issues of reliability and credibility may be taken into account under s 137 of the Evidence Act 1995 (NSW). Spigelman CJ, who delivered the leading judgment, stated that, ordinarily, questions of credibility and reliability are questions for the jury and so may not be taken into account for the purposes of s 137119. He added that there are circumstances where issues of credibility and reliability are such that 114 (1995) 182 CLR 461 at 482 per Mason CJ, Deane and Dawson JJ. 115 [1990] 1 SCR 717. 116 (1995) 182 CLR 461 at 485 per Mason CJ, Deane and Dawson JJ. 117 [1990] 1 SCR 717 at 733-734 per Dickson CJ, Wilson, L'Heureux-DubΓ©, Gonthier 118 (2006) 66 NSWLR 228 at 237 [60] per Spigelman CJ (Simpson J agreeing at 240 [81], Adams J agreeing at 240 [82]). See also XY (2013) 84 NSWLR 363 at 371 [25], 375 [44] per Basten JA; R v IMM (No 2) (2013) 234 A Crim R 225 at 232 119 (2006) 66 NSWLR 228 at 237-238 [63]-[64]. NettleJ the court may say that it would not be open to the jury to conclude that the evidence could rationally affect the assessment of the probability of the existence of a fact in issue; and, in that limited sense, considerations of reliability are involved120. But, his Honour said, it was only in that limited sense that McHugh J's observations in Papakosmas121 about considerations of reliability have any application122. In Dupas v The Queen123, the Court of Appeal of the Supreme Court of Victoria interpreted Spigelman CJ's construction of s 137 as meaning that, in determining whether evidence should be excluded under s 137, a judge is bound to assume that evidence will be accepted. The Victorian Court of Appeal criticised that construction as based upon a misapprehension of the role of the judge under the common law test from which s 137 is derived124 and, consequently, as being too restrictive. It held that upon a proper construction of s 137, although a judge is to assume that the truthfulness of evidence would be accepted, the judge need not assume that the evidence would be regarded as reliable125. Rather, the judge is required to make some assessment of the reliability of the evidence in order to determine the weight which the jury, acting reasonably, could give to the evidence, and then to balance that against the risk that the jury may give the evidence disproportionate weight126. Subsequent to Dupas, the Court of Criminal Appeal of the Supreme Court of New South Wales revisited the construction of s 137 in R v XY127. According to the headnote to the authorised report of that case, the Court of Criminal Appeal held by majority that s 137 of the Evidence Act 1995 (NSW) does not require an assessment of the credibility, reliability or weight of evidence; those 120 (2006) 66 NSWLR 228 at 237-238 [63]. 121 (1999) 196 CLR 297 at 323 [86]. 122 (2006) 66 NSWLR 228 at 237-238 [63]. 123 (2012) 40 VR 182 at 234 [196]. 124 (2012) 40 VR 182 at 230 [185]. 125 (2012) 40 VR 182 at 196 [63(c)], 230 [184]. 126 (2012) 40 VR 182 at 197 [63(d)]. 127 (2013) 84 NSWLR 363. NettleJ being matters to be left to the jury if the evidence is admitted128. It is apparent from the body of the report, however, that that is not what was held. Basten JA, who delivered the leading judgment, posited that Dupas had misinterpreted Shamouil as concluding, inflexibly and without qualification, that the weight of evidence is irrelevant to its exclusion under s 137. As his Honour observed, the statutory definition of "credibility" when applied to a witness includes both credibility in the common law sense of truthfulness (which is to say whether the witness genuinely believes that he or she is telling the truth) and reliability (which includes the witness's ability to observe and remember facts). It was, however, possible, Basten JA said, that, when Spigelman CJ referred to "credibility" in Shamouil, his Honour was referring to credibility only in the more limited common law sense of truthfulness, and thus should not be taken as stating that a judge must assume that the evidence is reliable. Further, as Basten JA observed, to suggest that Spigelman CJ rejected as inappropriate any reference to the weight of evidence would be to mischaracterise the weighing exercise in which Spigelman CJ in fact engaged129. The other members of the Court in XY were Hoeben CJ at CL, Simpson, Blanch and Price JJ. Blanch and Price JJ did not find it necessary to decide whether credibility and reliability should be taken into account under s 137. In passing, Blanch J recorded his interpretation of Shamouil as being that it is "not desirable" for the court to undertake an investigation into the weight of evidence based on credibility or reliability, because to do so would usurp the function of the jury130. Price J, however, stated that enabling a judge to consider questions of credibility, reliability and weight would be likely to enhance the prospects of a fair trial131. Only Hoeben CJ at CL and Simpson J concluded that questions of credibility, reliability and weight play no part in the assessment of probative value with respect to s 137132. Even then, Hoeben CJ at CL also said that he agreed with part of what Basten JA had said about s 137133. 128 (2013) 84 NSWLR 363 at 364. 129 (2013) 84 NSWLR 363 at 377 [49]. 130 (2013) 84 NSWLR 363 at 405 [197]. 131 (2013) 84 NSWLR 363 at 408 [224]. 132 (2013) 84 NSWLR 363 at 385 [86] per Hoeben CJ at CL, 401 [175] per Simpson J. 133 (2013) 84 NSWLR 363 at 385 [86]. NettleJ Whether Shamouil had the effect attributed to it in Dupas is debatable. As Basten JA suggested in XY, it may be that the differences between Shamouil and Dupas are essentially only semantic. Shamouil defined the relevance of reliability to the decision to exclude evidence under s 137 in terms of whether evidence is so unreliable that it would not be open to the jury to conclude that it could rationally affect the assessment of the probability of the existence of the fact in issue134. Dupas answered the question in functionally not dissimilar terms of the weight which the jury, acting reasonably, could give to the evidence (as opposed to the weight which the jury would or will give to the evidence)135. With respect, there is force in Basten JA's observation in XY136 that the results under either formulation may be much the same. Even so, however, it now remains for this Court to decide the point of whether a judge should have regard to the reliability of evidence for the purposes of s 137 of the Act. Assessment of reliability under s 137 For the reasons earlier set out, although the evident purpose of s 137 is to replace the common law Christie discretion with a statutory exclusion of evidence of which the probative value is outweighed by unfair prejudice, there is little reason to suppose that the provision has the purpose of excluding consideration of the reliability of the evidence in the determination of its weight in comparison to its prejudicial effect. In XY137, Simpson J referred to difficulties which she feared would attend the assessment of reliability under s 137 because the decision whether to admit or exclude evidence under that provision must sometimes be made at a point in the trial at which the judge has an incomplete or imperfect understanding of the evidence to be led. Similar concerns were later echoed in a learned article on the subject by the Hon J D Heydon AC QC138. But, as Price J knowingly observed in XY139, more often than not the assessment of probative value is made on the basis of depositions without the need to call witnesses and, where the depositions are 134 (2006) 66 NSWLR 228 at 237 [61]. 135 (2012) 40 VR 182 at 197 [63(d)]. 136 (2013) 84 NSWLR 363 at 378 [53]. 137 (2013) 84 NSWLR 363 at 400 [170]-[171]. 138 Heydon, "Is the Weight of Evidence Material to its Admissibility?", (2014) 26 Current Issues in Criminal Justice 219 at 227-229. 139 (2013) 84 NSWLR 363 at 408 [224]. NettleJ insufficient to resolve the point, it is possible for a witness to be cross-examined on a voir dire to enable the judge to make an assessment of the probative value of the witness's evidence. As was noted by all members of this Court in Hoch140, such procedures were commonplace under the common law. And, as many trial judges will know, they were not productive of insurmountable or ordinarily undue difficulties. It should not be any different under s 137. Such procedures are provided for in the Act141 and the Act envisages that the admissibility of evidence may need to be determined proleptically with reference to evidence yet to be adduced142. In view of the critical importance of s 137 in ensuring that an accused receives a fair trial143, such difficulties as might attend those procedures are insufficient to adopt a construction of s 137 that excludes consideration of the reliability of evidence. In XY144 Simpson J reasoned that for a judge to take the reliability of evidence into account for the purposes of s 137 would be to usurp the function of the jury to determine the reliability of evidence. In this case, counsel for the respondent pressed that reasoning in support of the respondent's contention that s 137 excludes judicial consideration of reliability. But, with respect, it is a misconception of the traditional division between the functions of judge and jury to suppose that it denies the judge any role in the assessment of reliability. Common law rules of evidence developed out of a desire to keep from the jury that which a preliminary judicial assessment may determine to be so unreliable or lacking in credibility that it has minimal capacity to bear on the facts in issue145. Most of the common law rules of admissibility and discretionary exclusion of evidence thus proceed upon the basis that, in determining whether there is "a prima facie reason for admitting the evidence", it is for the judge to make preliminary findings of fact and an assessment of 140 (1988) 165 CLR 292 at 297 per Mason CJ, Wilson and Gaudron JJ, 303-304 per 141 Evidence (National Uniform Legislation) Act (NT), ss 189, 192A. 142 See, eg, Evidence (National Uniform Legislation) Act (NT), ss 57, 98(1)(b). 143 Australian Law Reform Commission, Evidence, Report No 26 (Interim), (1985), vol 1 at 529 [957]. 144 (2013) 84 NSWLR 363 at 400 [167]. 145 See Heydon, "Is the Weight of Evidence Material to its Admissibility?", (2014) 26 Current Issues in Criminal Justice 219 at 221-222. NettleJ reliability and credibility146. This Court has recognised that, under the common law exclusionary discretions, a trial judge's preliminary assessment of reliability can result in the exclusion of evidence from the jury's consideration147. Similarly under the Act, the rules of admissibility and exclusion are based on the understanding that some evidence may be so unreliable as to have minimal capacity to bear on the facts. Just as at common law, so too under the Act it is recognised that particular categories of evidence β including hearsay evidence148, identification evidence149 and evidence of bad character (of an accused or witness)150 β can be and sometimes are so unreliable as to make the evidence unsuitable for the jury's consideration. At common law, the established categories of exclusion are grounded in accrued corporate judicial knowledge and experience of the inherent potential for unreliability of evidence of that kind. Likewise, under the Act, the point of Ch 3 and its structure is to repose responsibility in the judge for enforcing the statutory rules of admissibility and exclusion in a manner calculated to withhold otherwise relevant evidence from the jury's consideration of reliability. That necessitates a judicial preliminary assessment of criteria going to reliability in order to determine whether the evidence has the capacity sufficiently to affect the jury's rational assessment of the probability of the existence of a fact in issue or whether it is so lacking in reliability that it should be excluded. Such an assessment is not in any sense a usurpation of the jury's function. It is the discharge of the long recognised duty of a trial judge to exclude evidence that, because of its nature or inherent frailties, could cause a jury to act irrationally either in the sense of attributing greater weight to the evidence than it 146 Wendo v The Queen (1963) 109 CLR 559 at 573 per Taylor and Owen JJ; [1963] HCA 19. 147 Swaffield (1998) 192 CLR 159 at 167-170 [10]-[11] per Brennan CJ, 209-210 148 Evidence (National Uniform Legislation) Act (NT), s 59. See also Australian Law Reform Commission, Evidence, Report No 26 (Interim), (1985), vol 1 at 370 [675]. 149 Evidence (National Uniform Legislation) Act (NT), ss 114, 115. See also Australian Law Reform Commission, Evidence, Report No 26 (Interim), (1985), vol 1 at 229 [415], 232 [417], 234-240 [421]. 150 Evidence (National Uniform Legislation) Act (NT), ss 97, 98, 104, 112. See also Australian Law Reform Commission, Evidence, Report No 26 (Interim), (1985), vol 1 at 217 [394], 221-224 [403]. NettleJ is rationally capable of bearing or because its admission would otherwise be productive of unfair prejudice which exceeds its probative value. Assessment of reliability under s 97 Inasmuch as s 97 of the Act entails a test of whether the subject evidence would have significant probative value, it involves an assessment of the probative value which is functionally identical to the assessment of probative value required by s 137. As has been noted151, it is to be assumed that the term "probative value" has the same meaning wherever it appears in the Act. Logically, it follows that, just as the assessment of probative value of evidence for the purposes of s 137 entails an assessment of the probative value which it would be open to a jury rationally to attribute to the evidence, so does the assessment of the probative value of evidence for the purposes of s 97. Just as s 137 involves a consideration of the reliability of evidence (in the common law sense of the witness's ability to hear and see the matters the subject of his or her evidence), so does s 97. Assessment of credibility under ss 97 and 137 In Dupas152, the Victorian Court of Appeal held that, upon its proper construction, s 137 did not contemplate a judge undertaking any assessment of a witness's credibility. It reached that view on the basis of a survey of the authorities relating to the common law Christie discretion and a perception that s 137 does not have the purpose of significantly altering the basis of exclusion of evidence of which the probative value is exceeded by unfair prejudice153. The authorities so surveyed included Hunt CJ at CL's influential judgment in Carusi154, in which it was said that the Christie discretion does not permit the judge in assessing the probative value of evidence to determine whether or not the evidence should be accepted, and thus that the judge can only exclude the evidence if, taken at its highest, its probative value is outweighed by its prejudicial effect. Reference was also made to the decision of the Appeal Division of the Supreme Court of Victoria in Rozenes v Beljajev155, in which it was stated that while the reliability of identification evidence was a matter to 151 See above at [143]. 152 (2012) 40 VR 182 at 196 [63(c)], 230 [184]. 153 (2012) 40 VR 182 at 196 [63(a), (b)]. 154 (1997) 92 A Crim R 52 at 65-66 (Newman and Ireland JJ agreeing at 74). 155 [1995] 1 VR 533 at 560. NettleJ which the trial judge might properly have regard, the credibility of a witness was a question solely for the jury. Consistently with the view that s 137 did not relevantly alter that state of affairs, Dupas156 held that in undertaking the balancing exercise ordained by s 137 the trial judge is required to assume that the jury would find the evidence to be truthful. In this case, counsel for the appellant did not seek to gainsay that interpretation of the Christie discretion. He contended, however, that, whatever the position at common law, ultimately the position under ss 97 and 137 must be determined according to the terms of the provisions157. He submitted that, upon their proper construction, each plainly contemplates that the judge should have regard to the credibility of evidence (just as much as to its reliability) in determining the weight it would be open to the jury rationally to give to the evidence, and thus that the judge should have regard to the credibility of evidence (just as much as to its reliability) in determining whether the probative value of it is sufficiently exceeded by unfair prejudicial effect as to warrant exclusion. In counsel's submission, once it is accepted, as he contended it should be, that ss 97 and 137 contemplate that the reliability of evidence is a relevant consideration in the sense already described, there is no logical or other legitimate reason to suppose that each provision does not equally contemplate credibility as a relevant consideration in the sense already described. In short, credibility is just as capable as reliability of bearing on the probative value of evidence and it would impose an artificial, undesirable and ultimately unjust restriction on the exercise of the powers afforded by ss 97 and 137 to read down those provisions so as to exclude the consideration of credibility. That submission should be accepted. As will be explained, both ss 97 and 137 should be construed such that both credibility and reliability are relevant considerations in determining whether evidence is of such probative value as not to be outweighed by the danger of unfair prejudice to the defendant. It is convenient to begin with s 97. At common law, the criterion of admissibility of similar fact coincidence or tendency evidence was that its probative force clearly transcended its prejudicial effect. It was considered that evidence of that kind had probative value only if it bore no rational explanation other than the happening of the 156 (2012) 40 VR 182 at 196 [63(c)]. 157 See also Papakosmas (1999) 196 CLR 297 at 302 [10] per Gleeson CJ and NettleJ events in issue158. Accordingly, its admissibility depended not only on similarity but also on the non-existence of "a cause common to the witnesses"159. It followed that, if there were a real danger that witnesses had combined to concoct the evidence, the probative value of it was regarded as so much depreciated that the jury would be tempted to give it a weight which it did not deserve. Consequently, the possibility of a conspiracy to concoct such evidence was something which a trial judge needed to consider when the admissibility of the evidence fell for determination. The judge was required to make an initial assessment of matters which the jury might ultimately have to decide. It was only when and if the evidence were then admitted that its probative value became a matter for the jury. The test for the admissibility of evidence of that kind under s 97 of the Act is no longer as strict as it was at common law. Subject to s 101, it is enough to render such evidence admissible as tendency evidence that it has significant probative value either by itself or in conjunction with other evidence adduced or to be adduced160. But, at least in the case of similar fact tendency evidence, it is clear that it remains necessary for a trial judge to make an assessment of the possibility of conspiracy to concoct the evidence161 and so for the judge to make an initial assessment of matters which the jury might ultimately have to decide. There is also no logical reason to accept that such an assessment should be confined to the risk of concoction. The probative value of particular evidence may be just as much affected by a lack of credibility arising aliunde. To take an example cited in argument, it may be that for one reason or another it appears to a trial judge that a witness's account is so utterly incredible that it would not be open to the jury, acting rationally, to regard the evidence of it as having 158 Sutton v The Queen (1984) 152 CLR 528 at 563, 564 per Dawson J; [1984] HCA 5; Hoch (1988) 165 CLR 292 at 296 per Mason CJ, Wilson and Gaudron JJ; Harriman v The Queen (1989) 167 CLR 590 at 602 per Dawson J; [1989] HCA 50; Pfennig (1995) 182 CLR 461 at 485 per Mason CJ, Deane and Dawson JJ. 159 Director of Public Prosecutions v Boardman [1975] AC 421 at 444 per Lord Wilberforce. 160 Evidence (National Uniform Legislation) Act (NT), s 97(1)(b). 161 AE v The Queen [2008] NSWCCA 52 at [44]; PNJ v Director of Public Prosecutions (2010) 27 VR 146 at 153 [28]; Murdoch (A Pseudonym) v The Queen (2013) 40 VR 451 at 454 [4] per Redlich and Coghlan JJA, 474 [95] per Priest JA; Velkoski v The Queen (2014) 242 A Crim R 222 at 267 [173(c), (d)]. NettleJ significant probative value. Indeed, that was recognised by Spigelman CJ in Shamouil162, albeit in the context of his Honour's consideration of s 137. As already observed, "probative value" has the same meaning in each provision. If evidence may be excluded under s 137 on the basis that it would not be open to the jury to accord it any probative value, it should follow that evidence may also be excluded under s 97 on the basis that it would not be open to the jury, acting rationally, to regard it as having significant probative value. The objective of ensuring a fair trial is opposed to a construction of s 97 which would arbitrarily limit the process of assessment of probative value by excluding consideration of an aspect of probative value. Given the special dangers which attach to tendency evidence163, logic and fairness dictate a construction of s 97, consistent with the plain and ordinary meaning of the words of the provision, which enables the judge to make a preliminary estimate of all aspects of credibility of evidence sought to be tendered as tendency evidence as part of the process of determining its probative value. Of course, s 137 is not restricted to evidence which would otherwise be admissible under s 97. It applies equally to evidence which would otherwise be admissible under other provisions of the Act; and, because of s 101, it may be that s 137 is more likely to be invoked in relation to evidence admissible under other provisions of the Act164. The notions of probative value and prejudice contemplated in s 137 are protean and apply discriminatingly according to the nature of the evidence in question. So, at one level, it does not necessarily follow from the fact that there are special dangers which dictate a construction of s 97 that requires an assessment of credibility that s 137 necessitates an assessment of credibility in relation to evidence admissible under provisions other than s 97. In truth, however, the special dangers which warrant the exclusion of tendency evidence under s 97 unless it is judged to be of significant probative value are a corollary of the more general statutory precept that warrants the exclusion under s 137 of evidence of which the probative value is judged to be outweighed by the danger of unfair prejudice. In each case, the concern is to ensure that evidence which might induce a jury to reason impermissibly to a conclusion of guilt is excluded unless the evidence is conceived to be of such probative value that, despite its prejudicial effect, it is just to admit it. In each case the assessment of the probative value that it would be open to the jury to 162 (2006) 66 NSWLR 228 at 237-238 [63]. 163 Pfennig (1995) 182 CLR 461 at 536 per McHugh J. 164 Cf R v Dupas (No 2) (2005) 12 VR 601 at 627-628 [83] per Nettle JA; Dupas (2012) 40 VR 182 at 217 [136]. NettleJ attribute to the evidence is the essence of the admissibility or exclusion of the evidence. And thus, in each case, because both credibility and reliability are logically critical to the assessment of the probative value open to be attributed to evidence, logic and fairness dictate a construction of the legislation β consistent with the plain and ordinary meaning of the provisions and the extrinsic materials β which permits of the consideration of both credibility and reliability in the assessment of probative value. There being no compelling reason to depart from the natural and ordinary construction of the words of ss 97 and 137, it should be concluded that, in determining whether evidence is to be admitted or excluded under either provision, a trial judge should have regard to both the reliability of the evidence (in the sense of the witness's ability to hear and see the matters the subject of his or her evidence) and the credibility of the evidence (in the sense of whether the witness is stating what the witness honestly believes to be the truth). In light of that consideration, the judge should determine the weight which a jury, acting rationally, could give to the evidence and, therefore, the extent to which that evidence could rationally affect the assessment of the probability of the existence of a fact in issue. Admission of tendency evidence Given that construction of s 97, it is apparent that the trial judge in this case erred by proceeding upon the assumption that the tendency evidence would be accepted and thus upon the assumption that she should not have regard to the credibility and reliability of the evidence in determining its admissibility under Significantly, however, the appellant's complaint about the judge's approach to s 97 is not that the tendency evidence was so lacking in credibility (in the sense of the witness not telling what she honestly believed to be the truth) or reliability (in the sense which includes the witness's ability to see and hear the matters the subject of the evidence) that it was not open for the jury to regard it as rationally affecting the probability of the commission of the charged offences. Rather, it is that the tendency evidence lacked probative value because it derived solely from the complainant. Counsel for the appellant invoked the observation of Howie J in Qualtieri v The Queen165 that, in order to meet the test of admissibility under s 97, evidence of sexual interest in the complainant will "usually be found outside of the complainant's evidence, such as in a letter written by the accused to the 165 (2006) 171 A Crim R 463 at 494 [118] (Latham J agreeing at 495 [124]). NettleJ complainant or some other act of the accused that shows a sexual interest in the complainant or children generally". In counsel's submission, reliance on the complainant's own evidence of uncharged sexual acts to establish a sexual interest in the complainant which supposedly added to the probability of the truth of the complainant's testimony regarding the charged acts involved "bootstrap reasoning" and so the evidence should have been excluded. That submission should be rejected. As Heydon J demonstrated in HML v The Queen166 with respect to the analogous though not identical considerations which govern the admissibility of evidence of uncharged acts under common law, the combination of such evidence with evidence of charged sexual acts may serve to establish the existence of a sexual attraction and willingness to act upon it which eliminates doubts that might have attended evidence of the charged acts standing alone. What must be considered is the contribution which the evidence of the uncharged sexual acts might make, if accepted, to whether the sexual acts to be proved are rendered more likely to have occurred167. Admittedly, at common law, it was sometimes said that evidence of uncharged acts was not admissible as tendency evidence unless the uncharged acts had "unusual features" or bore "striking similarities" to the charged acts168. But under the Act the evidence need simply have significant probative value169. Thus, under the Act, evidence has been found to have significant probative value despite a lack of striking similarity where, for some other reason, the uncharged acts establish a particular modus operandi or other underlying unity170. Here, on one view of the matter, the uncharged act of the appellant running his hand up the complainant's leg during the course of the massage incident was an essentially different kind of sexual act from each of the charged sexual acts except, perhaps, the first. But evidence of uncharged sexual acts is 166 (2008) 235 CLR 334 at 427 [280]; [2008] HCA 16. 167 JLS v The Queen (2010) 28 VR 328 at 336-337 [24]-[26] per Redlich JA (Mandie JA agreeing at 340 [37], Bongiorno JA agreeing at 340 [38]). 168 Hoch (1988) 165 CLR 292 at 294 per Mason CJ, Wilson and Gaudron JJ; cf Pfennig (1995) 182 CLR 461 at 482 per Mason CJ, Deane and Dawson JJ. 169 Jacara Pty Ltd v Perpetual Trustees WA Ltd (2000) 106 FCR 51 at 70-71 [82] per Sackville J (Whitlam J agreeing at 53 [1], Mansfield J agreeing at 75 [108]); R v Ford (2009) 201 A Crim R 451 at 485 [126] per Campbell JA. 170 See, eg, R v Fletcher (2005) 156 A Crim R 308 at 324 [67] per Simpson J (McClellan CJ at CL agreeing at 310 [1]). NettleJ capable of having significant probative value in the proof of charged sexual acts even where the uncharged sexual acts and the charged sexual acts are of essentially different kinds171. Such may be the nature of one human being's sexual attraction to another, and the likelihood that a sexual attraction is fulfilled or sought to be fulfilled on different occasions by different sexual acts of different kinds, that evidence of uncharged sexual acts, although different from the charged sexual acts, has the capacity to show that the alleged offender had an ongoing sexual attraction to the complainant and endeavoured to gratify it in a variety of ways. And thus where, as here, the evidence of the uncharged acts taken with the evidence of the charged acts is capable of establishing that the accused sought to gratify his sexual attraction to the complainant in a variety of ways on different occasions, in circumstances where he might have been interrupted or detected by others close by, it is capable of having significant probative value172. Granted that the massage incident was alleged to have occurred after the last of the charged offences, it was not too remote in time as to be incapable of supporting the hypothesis that the appellant had a continuing sexual attraction to the complainant which he sought to gratify by a variety of sexual acts on different occasions in circumstances where he might have been interrupted or detected by others close by. It was capable of being regarded as having significant probative value173. As the judge noted, the evidence of the massage incident may have been weakened by the fact that the incident went unobserved by the other person present at the time. But overall, given the incident was alleged to have occurred during the period of the alleged continuing course of sexual abuse, and given that the complainant's evidence of the massage incident was unencumbered by significant questions of credibility or reliability, it would have been open to the judge to find that the evidence was of significant probative value as that phrase is properly to be understood. That is to say that it had a significant capacity rationally to affect a jury's assessment of the appellant's sexual interest in the complainant and his willingness to act on that interest around the very time that it 171 R v Smith (2008) 190 A Crim R 8 at 11-13 [10]-[19] per Blanch J (McClellan CJ at CL agreeing at 9 [1], Hislop J agreeing at 14 [26]). 172 HML (2008) 235 CLR 334 at 430 [287] per Heydon J; cf KRM v The Queen (2001) 206 CLR 221 at 244-245 [66] per Gummow and Callinan JJ; [2001] HCA 11; see also JLS (2010) 28 VR 328 at 338 [30]. 173 R v Hopper [2005] VSCA 214 at [79]-[88]; JLS (2010) 28 VR 328 at 337-338 [29]. NettleJ was alleged that he did act on that interest by committing the final of the charged acts. Assuming, therefore, as this Court must for the purposes of this aspect of the appeal, that there is no issue about the application of ss 101 and 137, it follows that there was no reason to exclude the evidence of the massage incident. That ground of appeal should be rejected. Admission of complaint evidence The admission of the complaint evidence involves different considerations because it was contended that the complaint evidence should have been excluded under s 137. In light of what has been said about the proper construction of s 137, it follows that the judge erred in the application of s 137 by assuming that the complaint evidence would be accepted and, therefore, by failing to have regard to the credibility and reliability of the evidence in determining whether it was of such probative value as not to be outweighed by the danger of unfair prejudice to the appellant. It is also at least possible that, if the judge had taken the credibility and reliability of the evidence into account in determining whether the probative value of it was outweighed by the danger of unfair prejudice to the appellant, her Honour would have come to a different view. Indeed she acknowledged that "there is ample material available to challenge the weight to be attached to the [complaint evidence]"174. Among the considerations which would have been relevant to that assessment were that the initial complaint was not made until after the appellant had separated from the complainant's grandmother in late 2010, the first complaint to SW was made when the complainant was in trouble, and at least some of that complaint was in response to leading questions. On one view of SS's account, the complaint was made after the complainant had complained to her aunt, grandmother and mother in August 2011. Although there was objective evidence which supported the conclusion that the complaint to SS was made before any complaint to family members, SS said that, when the complainant complained to her, the complainant's grandmother and the appellant had already broken up and the complainant told her that she had already told her mother. Evidently, that was contrary to the complainant's version of events, which was that the first complaint she made was to SS, that SS recommended that the complainant tell her mother, and that it was only after that that she first told her aunt and grandmother. 174 IMM (No 2) (2013) 234 A Crim R 225 at 230 [21]. NettleJ Further, the charged offences were alleged to have occurred between 2002 and 2009, and yet the first complaint was said not to have been made until October or November 2010. While it might be that some of the alleged course of sexual offending was still fresh in the mind of the complainant in October or November 2010, it is at least questionable that the specific offences which were alleged to have been committed between 2002 and 2005 were still fresh in the mind of the complainant by that time. The same applies, but possibly with added strength, in relation to the complaints to SW, SC and KW, which were said not to have been made until August 2011. At all events, it cannot be said that the judge's failure to take the credibility and reliability of the complaint evidence into account in assessing its probative value did not result in the appellant thereby being deprived of a chance of acquittal, or thus in a miscarriage of justice175. Given that conclusion, it is unnecessary to consider the ground of appeal regarding the directions attaching to the complaint evidence. Conclusion The appeal should be allowed and the judgment of the Court of Criminal Appeal should be set aside. In lieu, it should be ordered that the appeal to that Court should be allowed, that the conviction on counts 2, 3 and 4 be quashed and that a new trial be had. 175 Stanoevski v The Queen (2001) 202 CLR 115 at 131-132 [67] per Hayne J; [2001] HCA 4. |
HIGH COURT OF AUSTRALIA Matter No B36/2015 COMMONWEALTH OF AUSTRALIA APPELLANT AND DIRECTOR, FAIR WORK BUILDING INDUSTRY INSPECTORATE & ORS RESPONDENTS Matter No B45/2015 CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION & ANOR APPELLANTS AND DIRECTOR, FAIR WORK BUILDING INDUSTRY INSPECTORATE & ANOR RESPONDENTS Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate Construction, Forestry, Mining and Energy Union v Director, Fair Work Building Industry Inspectorate [2015] HCA 46 9 December 2015 B36/2015 & B45/2015 ORDER In each matter, appeal allowed. Set aside paragraph 1 of the order of the Full Court of the Federal Court of Australia made on 1 May 2015. Remit the proceedings to the Federal Court for determination according to law. On appeal from the Federal Court of Australia Representation J T Gleeson SC, Solicitor-General of the Commonwealth with T M Begbie and R C A Higgins for the appellant in B36/2015 and the second respondent in B45/2015 (instructed by Australian Government Solicitor) J K Kirk SC with E P White for the appellants in B45/2015 and the second and third respondents in B36/2015 (instructed by Hall Payne Lawyers) C J Murdoch for the first respondent in both matters (instructed by Norton Rose Fulbright) C A Moore SC with D M Tucker appearing as amici curiae in B36/2015 (instructed by Australian Government Solicitor) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate Construction, Forestry, Mining and Energy Union v Director, Fair Work Building Industry Inspectorate Practice and procedure β Civil penalties β Whether submissions as to agreed penalty permissible β Whether Barbaro v The Queen (2014) 253 CLR 58 applies to civil penalty proceedings. Words and phrases β "agreed penalty", "appropriate penalty", "civil penalty". Building and Construction Industry Improvement Act 2005 (Cth), ss 38, 49. FRENCH CJ, KIEFEL, BELL, NETTLE AND GORDON JJ. These are appeals from an order of the Full Court of the Federal Court of Australia (Dowsett, Greenwood and Wigney JJ)1 adjourning civil penalty proceedings before it under the Building and Construction Industry Improvement Act 2005 (Cth) ("the BCII Act") in which the parties had made submissions to the Court seeking the imposition of agreed penalties. The issue is whether the Full Court erred in adjourning the proceedings on the basis that the decision of this Court in Barbaro v The Queen2 applies to a civil penalty proceeding brought under Pt 1 of Ch 7 of the BCII Act3 and in particular whether Barbaro precludes a court from receiving an agreed or other submission as to the amount of a pecuniary penalty to be imposed under s 49 of the BCII Act. For the reasons which follow, the decision in Barbaro does not apply to civil penalty proceedings and a court is not precluded from receiving and, if appropriate, accepting an agreed or other civil penalty submission. Legislative provisions Section 9 of the BCII Act established the Australian Building and Construction Commissioner ("the Commissioner") and s 10 provided that the functions of the Commissioner included monitoring and promoting compliance with the BCII Act, the investigation of suspected contraventions of the BCII Act, and instituting or intervening in proceedings and making submissions in accordance with the BCII Act. Section 38 of the BCII Act provided that "[a] person must not engage in unlawful industrial action". The section was stipulated to be a "Grade A civil penalty provision"4. "[U]nlawful industrial action" was defined in s 37 of the Act as building industrial action which was industrially-motivated, constitutionally- 1 Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (2015) 229 FCR 331 ("FWBII v CFMEU"). (2014) 253 CLR 58; [2014] HCA 2. 3 Part 1 of Ch 7 of the BCII Act has been replaced by the Fair Work (Building Industry) Act 2012 (Cth), Ch 7, Pt 1: see Building and Construction Industry Improvement Amendment (Transition to Fair Work) Act 2012 (Cth), Sched 1, item 52. 4 See BCII Act, s 4(1), which defined "Grade A civil penalty provision" and "civil penalty provision". Bell Nettle Gordon connected and not excluded action5. "[E]xcluded action" was defined as "protected industrial action", which had the same meaning as in the Fair Work Act 2009 (Cth)6. Section 40 provided that building industrial action in relation to a proposed building enterprise agreement was not protected industrial action if the action was engaged in in concert with one or more persons who were not "protected persons" for the action. The same section provided that the only "protected persons" were an employee organisation that was a bargaining representative for the proposed enterprise agreement, a member of such an organisation, an officer or employee of such an organisation acting in that capacity and an employee who was a bargaining representative for the proposed enterprise agreement. The practical effect of those provisions was that only industrial action engaged in by employees and unions who were involved in bargaining, or would be covered by a proposed building enterprise agreement, would be "protected industrial action". Therefore, industrially-motivated action taken in concert with persons not involved in bargaining or who would not be covered by the proposed building enterprise agreement was "unlawful industrial action" within the meaning of ss 37 and 38 of the BCII Act7. Section 48 provided inter alia that, for the purposes of Pt 1 of Ch 7 of the BCII Act, a "person" in relation to the contravention of a civil penalty provision included an industrial association and that a person who was involved in a contravention of a civil penalty provision was to be treated as having contravened that provision. Section 49(1) provided that, on application by an eligible person, an appropriate court could make one or more of the following orders in relation to a person (the defendant) who had contravened a civil penalty provision: an order imposing a pecuniary penalty on the defendant; 5 BCII Act, s 36(1) defined "building industrial action", "industrially-motivated action", "constitutionally-connected action" and "excluded action". 6 BCII Act, ss 4(1), 36(1). 7 Provided that the requirement that the building industrial action was "constitutionally-connected" in s 37(b) was satisfied. Bell Nettle Gordon an order requiring the defendant to pay a specified amount to another person as compensation for damage suffered by the other person as a result of the contravention; any other order that the court considers appropriate." In the case of a Grade A civil penalty provision, the maximum pecuniary penalty was 1,000 penalty units for a body corporate and 200 penalty units for a person other than a body corporate. Section 49(3) provided that the orders that could be made under s 49(1)(c) included injunctions and any other orders that the court considered necessary to stop the conduct or remedy its effects, including orders for the sequestration of assets. Section 49(5) provided that a pecuniary penalty was payable to the Commonwealth or to some other person if the court so directed, and could be recovered as a debt. Section 49(6)(a) deemed the Commissioner to be an eligible person. Section 75(7) had the effect that the Federal Court was the only eligible court in relation to an act or omission for which an organisation, or a member of an organisation, was liable to be proceeded against for a pecuniary penalty. Amendments and transitional provisions applicable to these appeals By item 1 of Sched 1 to the Building and Construction Industry Improvement Amendment (Transition to Fair Work) Act 2012 (Cth) ("the Transition Act"), the name of the BCII Act was changed to the Fair Work (Building Industry) Act 2012 (Cth) ("the FWBI Act"). Under s 9 of the FWBI Act, there was established the Director of the Fair Work Building Industry Inspectorate ("the Director") and, under s 10, functions broadly similar to those previously performed by the Commissioner were vested in the Director8. At the same time, by item 52 of Sched 1 to the Transition Act, Pt 1 of Ch 7 of the BCII Act was repealed and replaced by Pt 1 of Ch 7 of the FWBI Act with the effect that, thenceforth, all civil penalty provisions were removed from the legislation. Item 1 of Sched 2 to the Transition Act provided, however, for regulations dealing with matters of a transitional, saving or application nature relating to amendments made by that Act; and, by s 2.3 of the Building and Construction Industry Improvement Amendment (Transition to Fair Work) 8 See Transition Act, Sched 1, item 49. Bell Nettle Gordon Regulation 2012 ("the Transition Regulation"), it was provided that, if a proceeding could have been started under the BCII Act in relation to conduct that happened before the commencement of the regulation, the BCII Act (other than Divs 1 and 2 of Pt 2 of Ch 7) would continue in force to the extent necessary to allow the proceeding to be started and dealt with. For the purposes of such proceedings, a reference to the Commissioner in the BCII Act is taken to be a reference to the Director under the FWBI Act9. As will be explained, this proceeding concerns conduct that occurred before the Transition Regulation commenced. The effect of the Transition Act and the Transition Regulation, therefore, is that Pt 1 of Ch 7 of the BCII Act applies to this proceeding unaffected by the subsequent amendments. Procedural history By originating application dated 23 May 2013, the Director brought civil penalty proceedings in the Federal Court against the Construction, Forestry, Mining and Energy Union ("the CFMEU") and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia ("the CEPU") (together, "the Unions") for contraventions of s 38 of the BCII Act alleged to have been committed in May 2011. The Director sought pecuniary penalties and declarations under s 49 of that Act. Subsequently, the parties filed an agreed statement of facts and submissions ("the Agreed Facts") as to the amounts of civil penalty which they agreed should be imposed. It was agreed that the Unions each contravened s 38 of the BCII Act by virtue of their involvement in contraventions by certain of their officers. The Agreed Facts recorded that the Director and the Unions "consent to and agree to seek from the Court" declarations as to the contraventions and pecuniary penalties of $105,000 against the CFMEU and $45,000 against the CEPU. The Agreed Facts also stated that, "subject to the discretion of the Court to fix an appropriate penalty", those penalty amounts are "satisfactory, appropriate and within the permissible range in all the circumstances". At a pre-trial directions hearing, the primary judge expressed concern as to the possible application of Barbaro to the proceedings and, as a result, a direction was made under s 20(1A) of the Federal Court of Australia Act 1976 (Cth) that the issue be referred to a Full Court. The Commonwealth was subsequently Because the Director, the Unions and the given leave to intervene. 9 Transition Regulation, s 2.3(3)(a). Bell Nettle Gordon Commonwealth each supported the making of the orders proposed in the Agreed Facts, the Full Court gave leave for separate counsel to appear as contradictors. On 1 May 2015, the Full Court held that Barbaro does apply to civil penalty proceedings and, consequently, the parties' agreed penalty submissions could not be received. On that basis the Court adjourned the further hearing of the matter to enable the parties to consider their positions. On 18 June 2015, the Commonwealth was granted special leave to appeal to this Court. that The Commonwealth's appeal is B36 of 2015. The Commonwealth's Notice of Appeal contends in substance that the Full Court erred in ruling that Barbaro applies to civil penalty proceedings under the BCII Act. It seeks an order that the proceeding be remitted to the Federal Court to be determined in accordance with the decision of this Court. The Unions also filed a separate application for special leave to appeal from the orders of the Full Court, which this Court granted on 6 August 2015. The Unions' appeal is B45 of 201510. Their Notice of Appeal seeks, as a preferable alternative to a remitter to the Federal Court, that this Court grant the declarations and orders that were sought in the Agreed Facts. Counsel who appeared as contradictor in the Full Court were given leave to appear in this Court as amici curiae. The nature of civil penalty regimes Part 1 of Ch 7 of the BCII Act is typical of civil penalty provisions enacted by the Commonwealth to facilitate the enforcement of various statutory civil regulatory regimes. Section 44 of the Commonwealth Conciliation and Arbitration Act 1904 (Cth) was one of the first such provisions to be enacted. As subsequently re-enacted and amended as s 119 of that Act, it fell for consideration by the Full Court of the Federal Court in Gapes v Commercial Bank of Australia Ltd11. In holding that s 119 created a civil penalty as opposed to criminal liability and, therefore, that the applicable procedure and standard of proof were civil procedure and proof on the balance of probabilities as opposed to criminal procedure and proof beyond reasonable doubt, J B Sweeney J (with whom Smithers, Evatt, Deane and Fisher JJ agreed) observed the clear distinction that 10 The Unions are the second and third respondents in B36 of 2015 and the appellants in B45 of 2015. 11 (1979) 27 ALR 87. Bell Nettle Gordon had been maintained throughout the history of the Conciliation and Arbitration Act between s 119 (and its predecessors) and other provisions of the Act that imposed criminal liability and criminal penalties of lesser amount12. Sweeney J deduced that the legislature had quite consciously adopted the distinction and maintained it for the reason that "[c]onviction always carried a stigma ... [A] conviction and fine even though lesser in amount than a penalty ordered to be paid would be regarded as harsher treatment."13 Section 76 of the Trade Practices Act 1974 (Cth)14, as enacted, was another instance of a civil penalty provision appearing in an Act which maintained a clear distinction between civil penalties and criminal penalties provided for elsewhere in the Act. Section 76 provided inter alia that, if the court were satisfied that a person had contravened or attempted to contravene a provision of Pt IV of the Act (the restrictive trade practices provisions), the court could order the person to pay to the Commonwealth such pecuniary penalty (not exceeding $250,000 for a body corporate or $50,000 for a person not being a body corporate) as the court determined to be appropriate, having regard to all relevant matters, including the nature and extent of the act or omission, any loss or damage suffered as a result of the act or omission, the circumstances in which the act or omission took place and whether the person had previously been found to have engaged in similar conduct. Section 78 added that criminal proceedings did not lie against a person for contravention of Pt IV, but s 79 provided that a person who contravened a provision of Pt V of the Act (the consumer protection provisions) other than s 52 was "guilty of an offence punishable on conviction" by a fine not exceeding $10,000 or imprisonment for six months for a person not being a body corporate and by a fine not exceeding $50,000 for a body corporate. During the Parliamentary debates that preceded the enactment of the Trade Practices Act, the then Attorney-General of the Commonwealth (Senator 12 Gapes (1979) 27 ALR 87 at 111. 13 Gapes (1979) 27 ALR 87 at 111; see also Gillooly and Wallace-Bruce, "Civil Penalties in Australian Legislation", (1994) 13 University of Tasmania Law Review 14 Now s 76 of the Competition and Consumer Act 2010 (Cth). Bell Nettle Gordon Lionel Murphy QC) described the purpose of the Trade Practices Bill 1974 (Cth) in so distinguishing between civil penalties and criminal penalties as follows15: "There is a clear distinction between the trade practices provisions and the consumer protection provisions in the Bill. For the most part, the consumer protection provisions deal with conduct which amounts to a criminal offence. This is in cases where there are false representations or conduct which is obviously of some fraudulent type and which is of a kind ordinarily covered by the criminal law. In the trade practices area, the conduct is more commercial conduct dealing with competitors, driving them out of business and so forth. An endeavour has been made to treat this area in the civil sense. The nature of the penal provisions are such as to create what are called civil offences rather than criminal offences. ... We think it is important not to import into the trade practices area the notion of criminality as such. ... Inevitably, if the Opposition is successful in its bid to include in the clause the phrase 'beyond reasonable doubt', businessmen who are caught up by these provisions will be treated as criminals." As will be appreciated, that explanation resonates with the terms of the Full Court's identification in Gapes of the purpose of the distinction between civil penalties and criminal penalties in the Conciliation and Arbitration Act. It is also to be noted that, as history transpired, the opposition were unsuccessful in their bid to include the phrase "beyond reasonable doubt" in cl 76 of the Trade Practices Bill and that, although s 76 as enacted did not state that either standard of proof was applicable, it was later held that it was the civil standard which Since 1974, the Commonwealth has enacted a considerable number of civil penalty provisions17. Some of those provisions are contained in legislation 15 Australia, Senate, Parliamentary Debates (Hansard), 15 August 1974 at 984-985. 16 See Trade Practices Commission v Nicholas Enterprises Pty Ltd (1979) 26 ALR 609 at 642 per Fisher J. 17 See, eg, Corporations Act 2001 (Cth), Pt 9.4B; Customs Act 1901 (Cth), Pt XIII, Div 3; Environment Protection and Biodiversity Conservation Act 1999 (Cth), Pt 17, Div 15; Space Activities Act 1998 (Cth), Pt 6; Spam Act 2003 (Cth), Pt 4; Superannuation Industry (Supervision) Act 1993 (Cth), Pt 21, Div 2; Sydney (Footnote continues on next page) Bell Nettle Gordon which provides for both civil penalties and criminal penalties, as in the Conciliation and Arbitration Act and the Trade Practices Act previously referred to, while, in other cases, of which the BCII Act was an instance, the legislation provides only for civil penalties18. In each case, however, the form of the civil penalty provisions is essentially similar. In essence, civil penalty provisions are included as part of a statutory regime involving a specialist industry or activity regulator or a department or Minister of State of the Commonwealth ("the regulator") with the statutory function of securing compliance with provisions of the regime that have the statutory purpose of protecting or advancing particular aspects of the public interest. Typically, the legislation provides for a range of enforcement mechanisms, including injunctions, compensation orders, disqualification orders and civil penalties, with or, as in the BCII Act, without criminal offences. That necessitates the regulator choosing the enforcement mechanism or mechanisms which the regulator considers to be most conducive to securing compliance with the regulatory regime. In turn, that requires the regulator to balance the competing considerations of compensation, prevention and deterrence. And, finally, it requires the regulator, having made those choices, to pursue the chosen option or options as a civil litigant in civil proceedings. Civil penalty procedure Until the Full Court's decision in this matter, the practice followed in relation to civil penalty proceedings generally accorded with the decisions of the Full Court (Burchett, Carr and Kiefel JJ) in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission19 and the Full Court Airport Demand Management Act 1997 (Cth), Pt 3, Div 2; Telecommunications Act 1997 (Cth), Pt 31. 18 Except for s 52(6), which created an offence for a failure to respond to a notice from the Commissioner requiring a person to give information, produce a document, or answer questions before the Commissioner; and s 65(2), which prohibited certain officials from making a record of or disclosing protected information. 19 (1996) 71 FCR 285. Bell Nettle Gordon (Branson, Sackville and Gyles JJ) in Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd20 ("Mobil Oil"). NW Frozen Foods was concerned with a civil penalty proceeding brought by the Australian Competition and Consumer Commission ("the ACCC") under s 76 of the Trade Practices Act. As already noted, s 76 provided that, if the court were satisfied that a person had contravened or attempted to contravene a provision in Pt IV of the Act, the court could order the person to pay the Commonwealth a pecuniary penalty not exceeding a specified sum that the court determined to be appropriate having regard to all relevant matters. The provision thus placed responsibility on the shoulders of the court to determine the penalty, having regard to all relevant matters21. The Full Court observed that, because the effects of a contravention on the functioning of markets and other economic consequences were likely to be among the most significant relevant considerations in the determination of penalty, the court would be assisted by the views of the ACCC. Hence, as had earlier been accepted by Sheppard J in Trade Practices Commission v Allied Mills Industries Pty Ltd (No 4)22 ("Allied Mills"), the Full Court held that it was not inappropriate for the parties to present the facts and analysis of market effects in the form of agreed statements and for the ACCC and the contravener to make joint submissions as to the appropriate level of penalty23. The Full Court further observed that, given the public interest in promoting the negotiated resolution of civil penalty proceedings, and that the fixing of the quantum of penalty is not an exact science, the task of a court in setting a pecuniary penalty was not necessarily to ask itself whether it would independently have come to the precise quantum proposed by the parties. Rather, the court should determine whether the parties' proposal could be 20 (2004) ATPR ΒΆ41-993. 21 NW Frozen Foods (1996) 71 FCR 285 at 290 per Burchett and Kiefel JJ, Carr J agreeing at 299. 22 (1981) 37 ALR 256. 23 NW Frozen Foods (1996) 71 FCR 285 at 290. Bell Nettle Gordon accepted as fixing an appropriate penalty24. Burchett and Kiefel JJ explained the reasons for that as follows25: "There is an important public policy involved. When corporations acknowledge contraventions, very lengthy and complex litigation is frequently avoided, freeing the courts to deal with other matters, and investigating officers of the Australian Competition and Consumer Commission to turn to other areas of the economy that await their attention. At the same time, a negotiated resolution in the instant case may be expected to include measures designed to promote, for the future, vigorous competition in the particular market concerned. These beneficial consequences would be jeopardised if corporations were to conclude that proper settlements were clouded by unpredictable risks. A proper figure is one within the permissible range in all the circumstances. The Court will not depart from an agreed figure merely because it might otherwise have been disposed to select some other figure, or except in a clear case." Thereafter, the approach thus sanctioned in NW Frozen Foods was routinely followed until the matter was revisited by the Full Court in Mobil Oil. As appears from the latter decision26, the need for reconsideration of the issue arose from obiter reservations expressed by Finkelstein J and Weinberg J in decisions at first instance. In Australian Competition and Consumer Commission v ABB Transmission and Distribution Ltd27 ("ABB Transmission"), Finkelstein J had observed that consent might be coerced and therefore that the absence of a trial might lead to injustice. He had also posited that, because most matters were resolved without a full hearing on the merits, it was becoming more difficult for a court to determine whether an agreed penalty was appropriate28. In Australian Competition and Consumer Commission v Colgate-Palmolive Pty Ltd29 24 NW Frozen Foods (1996) 71 FCR 285 at 290-291. 25 NW Frozen Foods (1996) 71 FCR 285 at 291. 26 Mobil Oil (2004) ATPR ΒΆ41-993 at 48,628-48,630 [59]-[70]. 27 (2001) ATPR ΒΆ41-815 at 42,936 [5]. 28 ABB Transmission (2001) ATPR ΒΆ41-815 at 42,936 [6]. 29 (2002) ATPR ΒΆ41-880 at 45,064 [32]-[34]. Bell Nettle Gordon ("Colgate"), Weinberg J had stated that agreed submissions as to a specific penalty figure were, in his view, undesirable because he found it difficult to conceive of parties proposing a pecuniary penalty so much beyond the permissible range of penalties that a court would depart from the proposed penalty submission and, hence, that there was a danger of the court being seen to "rubber stamp" decisions taken by the body charged with investigating and prosecuting contraventions. Weinberg J had also suggested that it would be preferable for parties to submit a range of penalties instead of an agreed figure30. In Mobil Oil, the Full Court rejected those concerns as unfounded. Taking them in turn, their Honours observed that when and if a poorly resourced respondent were party to a joint penalty submission, the court should scrutinise the submission and supporting statement of facts with particular care to ensure, so far as possible, that the statement of facts was accurate and the contravener's will had not been overborne31. In reality, there was no particular shortage of reported cases in which the question of penalties had been fully agitated in a contested hearing. In any event, each case depended on its own merits and, as NW Frozen Foods demonstrated, if a judge considered that previous cases provided insufficient guidance for the case to be determined, he or she was free to act on that view32. Contrary to the supposed improbability of a judge departing from an agreed penalty submission, Wilcox J had only recently done just that in Australian Competition and Consumer Commission v FFE Building Services Ltd33: in effect rejecting an agreed penalty submission of $1.5 million and imposing in its place a penalty of more than twice that amount. Contrary, moreover, to the supposed danger of the court being perceived as a "rubber stamp" for agreed penalty submissions, NW Frozen Foods required the court always to form its own view about the appropriate range of penalties34. Finally, there would be little advantage in limiting parties to an agreed range as opposed to an agreed figure. A better way of reinforcing the court's responsibility to determine an appropriate penalty was for the court to scrutinise the material 30 Colgate (2002) ATPR ΒΆ41-880 at 45,064 [35]. 31 Mobil Oil (2004) ATPR ΒΆ41-993 at 48,628-48,629 [63]. 32 Mobil Oil (2004) ATPR ΒΆ41-993 at 48,629 [66]. 33 (2003) ATPR ΒΆ41-969. 34 Mobil Oil (2004) ATPR ΒΆ41-993 at 48,630 [70]. Bell Nettle Gordon presented to it carefully and satisfy itself that it was sufficient to determine whether the agreed penalty was appropriate35. By way of explication, the Full Court added five observations, in (1) As noted in Allied Mills and NW Frozen Foods, the rationale for giving weight to a joint submission on penalty rests on the saving in resources for the regulator and the court, the likelihood that a negotiated resolution will include measures designed to promote competition and the ability of the regulator to use the savings to increase the likelihood of other contraveners being detected and brought before the courts. NW Frozen Foods does not mean that a court must commence its reasoning with the penalty proposed by the parties and then limit itself to a consideration of whether the penalty proposed is within the range of permissible penalties. That is one option, but another is to begin with an independent assessment of the appropriate range of penalties and then compare it with the proposed penalty. The decision in NW Frozen Foods represented a correct application of the approach enunciated by Sheppard J in Allied Mills37. As Sheppard J stated, the court is not bound by the figure suggested by the parties. Rather, the court has to satisfy itself that the submitted penalty is appropriate while acknowledging that, uninformed by the agreed penalty submission, the court might have selected a slightly different figure38. That approach is correct in principle and it has been cited with approval by the High Court of New Zealand in Commerce Commission v New Zealand Milk Corporation Ltd39. 35 Mobil Oil (2004) ATPR ΒΆ41-993 at 48,632 [78]. 36 Mobil Oil (2004) ATPR ΒΆ41-993 at 48,627-48,628 [52]-[58]. 37 Mobil Oil (2004) ATPR ΒΆ41-993 at 48,625 [43]. 38 See Mobil Oil (2004) ATPR ΒΆ41-993 at 48,624 [38] quoting Allied Mills (1981) 37 ALR 256 at 259. 39 [1994] 2 NZLR 730 at 733. Bell Nettle Gordon The decision in NW Frozen Foods is consistent with the imperative recognised in Australian Competition and Consumer Commission v Ithaca Ice Works Pty Ltd40 that the regulator should explain to the court the process of reasoning that justifies a discounted penalty. (5) The decision in NW Frozen Foods allows for the following possibilities: if the court is not satisfied that the evidence or information offered in support of an agreed penalty submission is adequate, it may require the provision of additional evidence, information or verification and, if that is not forthcoming, may decline to accept the agreed penalty; if the absence of a contradictor inhibits the court in the performance of its task of imposing an appropriate penalty, the court may seek the assistance of an amicus curiae or an individual or body prepared to act as an intervener; if the court is not prepared to impose the penalty proposed by the parties, it may be appropriate to allow the parties to withdraw their consent and for the matter to proceed on a contested basis. Subsequent criticism of NW Frozen Foods and Mobil Oil In Australian Securities and Investments Commission v Ingleby41 ("Ingleby"), the Court of Appeal of the Supreme Court of Victoria refused to follow NW Frozen Foods and Mobil Oil. Weinberg JA, who by that stage had resigned from the Federal Court and been appointed to the Victorian Court of Appeal, delivered the leading judgment. His Honour stated that he regarded NW Frozen Foods and Mobil Oil as "bad law" and "wrongly decided"42, because43: "they treat the trial judge, who is to impose the pecuniary penalty, as though he or she is exercising an appellate role. Under the approach 40 (2002) ATPR ΒΆ41-851. 42 (2013) 39 VR 554 at 563 [28]-[29]. 43 (2013) 39 VR 554 at 563 [29] (footnote omitted). Bell Nettle Gordon adopted in those cases, the judge is not independently arriving at the appropriate penalty, but rather asking an entirely different question β whether the agreed figure falls within the range of penalties reasonably available. That is, in substance, an appellate question, and not a first instance question. If the judge is unable to say that the agreed penalty is 'wholly outside' the range, he or she is bound to impose that penalty irrespective of whether it is considered appropriate. That is, in my view, a fundamental departure from the judicial function in relation to sentencing, and one that simply ought not to be countenanced." As will be seen, the Full Court in this case considered that Weinberg JA thereby substantially anticipated the decision in Barbaro. Barbaro v The Queen In Barbaro44, a plurality of this Court held that the Victorian and Queensland practice of criminal prosecutors nominating a quantified range of sentences that the Crown considered as open to be imposed in the circumstances of each case ("a MacNeil-Brown45 range") was wrong in principle and should no longer be followed. As appears from the reasons of the plurality in Barbaro, that holding was principally informed by three considerations. The first was that it is impossible to define the precise limits of the "available range" of terms of imprisonment that may be imposed on a criminal offender. As McHugh J had observed in Everett v The Queen46, the available range is a question on which reasonable minds may differ and therefore it is only when a court of criminal appeal is convinced that a sentence is plainly outside the available range that it is justified in intervening on the ground of manifest excessiveness or manifest inadequacy. It follows that to attempt to predict the "available range" would be to attempt to predict appealable error by means of an impermissible numerical approach to sentencing47. 44 (2014) 253 CLR 58. 45 R v MacNeil-Brown (2008) 20 VR 677. 46 (1994) 181 CLR 295 at 306; [1994] HCA 49; see also Wong v The Queen (2001) 207 CLR 584 at 592 [9] per Gleeson CJ; [2001] HCA 64. 47 Barbaro (2014) 253 CLR 58 at 70-71 [24]-[28], 73-74 [38]-[39], 75 [43] per French CJ, Hayne, Kiefel and Bell JJ. Bell Nettle Gordon The second reason was that, because it is impossible to define the precise limits of the available range, the essentially negative proposition deriving from House v The King48 β that a sentence is so far outside the range that it must be the result of a misapplication of principle β cannot safely be transformed into a positive statement of the upper and lower limits within which a sentence may properly be imposed49. Since reasonable minds may differ as to the available range β not least because reasonable minds may differ as to the relative weights to be attributed to applicable sentencing considerations β a statement as to the available range of sentences can never be more than an expression of opinion50; and, in a criminal proceeding, the Crown's opinion is irrelevant. Thirdly, it was considered that to permit the Crown to state the bounds of the available range could lead to erroneous views about the importance of such a statement in the sentencing process, with consequent blurring of what should be, and be perceived to be, the sharp distinction between the role of the judge and the role of the prosecutor in the criminal trial process51. It was also noted that the supposed usefulness to a sentencing judge of a MacNeil-Brown submission wrongly assumed that the prosecution would act dispassionately in determining Subsequent consideration of the application of Barbaro Several judges at first instance have expressed diverse views as to whether Barbaro applies to civil proceedings. Up to the time of the decision of the Full Court in this case, however, there were only two cases in which judges of the Federal Court undertook a reasoned analysis of the issue. In Australian Competition and Consumer Commission v Energy Australia Pty Ltd53 ("Energy Australia"), Middleton J held that Barbaro does not preclude agreed penalty 48 (1936) 55 CLR 499; [1936] HCA 40; see also Hili v The Queen (2010) 242 CLR 520 at 544 [76] per Heydon J; [2010] HCA 45. 49 Barbaro (2014) 253 CLR 58 at 70 [27]. 50 Barbaro (2014) 253 CLR 58 at 75 [42]. 51 Barbaro (2014) 253 CLR 58 at 72 [33]. 52 Barbaro (2014) 253 CLR 58 at 71 [29]. 53 (2014) ATPR ΒΆ42-469. Bell Nettle Gordon submissions in civil penalty proceedings. His Honour emphasised the utility and desirability of agreed penalty submissions as follows54: "The acceptance of agreed penalty amounts (providing always that the Court undertakes its duty to fix the appropriate penalty) increases the certainty of outcome for regulators and wrongdoers. This increases the predictability of outcomes for regulators and respondents and makes it more likely that proceedings will be resolved by agreement in an appropriate way and under the supervision of the Court. This in turn improves deterrence by encouraging the implementation of corrective measures and freeing up the resources of the regulator." Similarly, in Australian Competition and Consumer Commission v Mandurvit Pty Ltd55 ("Mandurvit"), McKerracher J concluded that, in the context of the plurality's reasoning as a whole, the holding in Barbaro that the prosecution in a criminal sentencing proceeding should not make a submission as to the bounds of the available range was not intended to apply to civil pecuniary penalty cases56. His Honour also endorsed Middleton J's observations as to the utility and propriety of a court receiving and, if appropriate, accepting agreed penalty submissions57. Apart from the Federal Court, the issue also received some reasoned attention in the Victorian Court of Appeal, in Matthews v The Queen58, in which a majority concluded that the reasoning in Barbaro is concerned only with the role of the Crown in the sentencing process and therefore does not apply to civil proceedings. The reasoning in Barbaro was subsequently considered by this Court in CMB v Attorney-General (NSW)59. In that case, it was reaffirmed that in 54 (2014) ATPR ΒΆ42-469 at 44,192 [149]. 55 (2014) ATPR ΒΆ42-471. 56 (2014) ATPR ΒΆ42-471 at 44,236 [48]. 57 Mandurvit (2014) ATPR ΒΆ42-471 at 44,241-44,242 [77]-[79]; see also at 44,238 [59] quoting Australian Competition and Consumer Commission v AGL Sales Pty Ltd (2013) ATPR ΒΆ42-449 at 43,509 [42] per Middleton J. 58 [2014] VSCA 291 at [29] per Warren CJ, Nettle and Redlich JJA. 59 (2015) 89 ALJR 407 at 420-421 [63]-[64] per Kiefel, Bell and Keane JJ; 317 ALR 308 at 323-324; [2015] HCA 9. Bell Nettle Gordon criminal proceedings the determination of the appropriate sentence rests solely with the court, but that the prosecutor remains under a duty to assist the court to avoid appealable error where a sentencing judge indicates the form (as opposed to the duration) of a proposed sentencing order and the prosecutor considers it to be manifestly inadequate. The decision below In this matter, the Full Court began their consideration of the issue with what they conceived to be the ratio decidendi of Barbaro. Their Honours identified it correctly, albeit incompletely, as being that "the prosecution's opinion as to sentencing range is irrelevant to the sentencing process"60. Despite so recognising that Barbaro was confined to criminal proceedings, however, the Full Court also referred to Weinberg JA's criticisms in Ingleby of the approach taken to civil penalty proceedings in NW Frozen Foods and Mobil Oil as having "anticipated at least part of the reasoning of the High Court in Barbaro"61. The Full Court specifically rejected Middleton J's analysis in Energy Australia on the basis that the certainty of outcome for regulators and respondents to which Middleton J referred62: "could only be achieved if there were a very high level of expectation that the Court would adopt the agreed outcome. Such an expectation would belie the pious assertion, frequently made, that it is for the Court to make the final decision. It is not clear to us that it is possible to maintain the public perception that the Court imposes the penalty and, at the same time, lead the parties to believe that their agreement will probably be adopted. With all respect to Middleton J we conclude that his reasons do not offer a viable basis for limiting the applicability of the decision in Barbaro to criminal sentencing." The Full Court rejected McKerracher J's reasoning in Mandurvit on the basis, they said, that they considered that "[his] Honour seems to have accepted 60 FWBII v CFMEU (2015) 229 FCR 331 at 369 [106]. 61 FWBII v CFMEU (2015) 229 FCR 331 at 371 [114]. 62 FWBII v CFMEU (2015) 229 FCR 331 at 375 [133]-[134]. Bell Nettle Gordon that he was effectively bound by the decision in NW Frozen Foods" and had agreed with the observations of Middleton J63. The Full Court acknowledged that there were "various differences" between the role of the prosecution in a criminal proceeding and the role of a regulator in civil penalty proceedings. But their Honours were of opinion that "none offered a principled basis for declining to apply the reasoning in Barbaro to proceedings for the imposition of a pecuniary penalty" and that, although Barbaro "arose in the context of a misguided assertion as to the prosecution's duty", the plurality's rejection of the proposition that the prosecution had a duty to offer a submission as to the available range "was based upon the view that it would, in any event, be inappropriate for the prosecution to do so"64. They added that the role of the regulator "would suggest that any view expressed by a regulator is also unlikely to be dispassionate, in the sense in which the High Court used that term", and that a regulator has "neither the history of independence nor detachment from the investigation which are generally The Full Court thus concluded that66: "the public interest in the imposition of pecuniary penalties ... leads to the conclusion that the fixing of the amount of such a penalty is a matter for the Court, and that the parties cannot, by agreement, bind it." The application of Barbaro The Full Court's reasoning in this matter should be rejected. Middleton J and McKerracher J were correct in their view that there is an important public policy involved in promoting predictability of outcome in civil penalty proceedings and that the practice of receiving and, if appropriate, accepting agreed penalty submissions increases the predictability of outcome for regulators and wrongdoers. As was recognised in Allied Mills and authoritatively determined in NW Frozen Foods, such predictability of outcome encourages 63 FWBII v CFMEU (2015) 229 FCR 331 at 375 [137]. 64 FWBII v CFMEU (2015) 229 FCR 331 at 376-377 [141]. 65 FWBII v CFMEU (2015) 229 FCR 331 at 377 [141]. 66 FWBII v CFMEU (2015) 229 FCR 331 at 378 [145]. Bell Nettle Gordon corporations to acknowledge contraventions, which, in turn, assists in avoiding lengthy and complex litigation and thus tends to free the courts to deal with other matters and to free investigating officers to turn to other areas of investigation that await their attention. Weinberg JA's criticisms in Ingleby of NW Frozen Foods and Mobil Oil did not anticipate the reasoning in Barbaro. As was earlier emphasised, Barbaro was concerned with submissions as to the available range of sentences in criminal proceedings, in the sense described in Everett. That range refers to the spread which notionally separates the indeterminate points beyond which a court of criminal appeal is persuaded that a sentence is so manifestly excessive or inadequate as to be affected by error of principle. In contrast, NW Frozen Foods and Mobil Oil were concerned with the very different conception applicable to civil penalty proceedings that, because fixing the quantum of a civil penalty is not an exact science, there is a permissible range in which "courts have acknowledged that a particular figure cannot necessarily be said to be more appropriate than another"67. It is only in that latter sense and only to that extent that the court will not depart from the submitted figure "merely because it might otherwise have been disposed to select some other figure"68. NW Frozen Foods and Mobil Oil do not suggest that the task of a judge faced with an agreed civil penalty submission is to determine whether the submitted penalty is "wholly outside" the "range of penalties reasonably available" or that the court is "bound to impose [an agreed] penalty irrespective of whether it is considered appropriate"69. To the contrary, as was emphasised in Mobil Oil, those cases make plain that the court is not bound by the figure suggested by the parties. The court asks "whether their proposal can be accepted as fixing an appropriate amount"70 and for that purpose the court must satisfy itself that the submitted penalty is appropriate. Nor is it "pious" to suppose that judges will do their duty, as they have sworn to do, and therefore reject any agreed penalty submission if not satisfied 67 Mobil Oil (2004) ATPR ΒΆ41-993 at 48,626 [51] (emphasis added). See also NW Frozen Foods (1996) 71 FCR 285 at 290-291. 68 NW Frozen Foods (1996) 71 FCR 285 at 291. 69 Cf Ingleby (2013) 39 VR 554 at 563 [29] per Weinberg JA. 70 NW Frozen Foods (1996) 71 FCR 285 at 291 (emphasis added). Bell Nettle Gordon that what is proposed is appropriate. It would be a travesty of justice if that were not the case. It may be presumed that a judge will do his or her duty according to the oath of office. The public may have confidence that it will be so. Middleton J and McKerracher J were also correct in their view that what was said in Barbaro applies only to criminal proceedings and, consequently, that nothing said in Barbaro is antithetical to continuing the practice of agreed penalty submissions in civil penalty proceedings. Contrary to the Full Court's reasoning, there are basic differences between a criminal prosecution and civil penalty proceedings and it is they that provide the "principled basis" for excluding the application of Barbaro from civil penalty proceedings. A criminal prosecution is an accusatorial proceeding which is governed by the fundamental principle that the burden lies in all things upon the Crown to establish the guilt of the accused beyond reasonable doubt and by the companion rule that the accused cannot be required to assist in proof of the offence charged71. Civil penalty proceedings are civil proceedings and therefore an adversarial contest in which the issues and scope of possible relief are largely framed and limited as the parties may choose, the standard of proof is upon the balance of probabilities and the respondent is denied most of the procedural protections of an accused in criminal proceedings72. Granted, both kinds of proceeding are or may be instituted by an agent of the state in order to establish a contravention of the general law and in order to obtain the imposition of an appropriate penalty. But a criminal prosecution is 71 RPS v The Queen (2000) 199 CLR 620 at 630 [22] per Gaudron ACJ, Gummow, Kirby and Hayne JJ; [2000] HCA 3; Azzopardi v The Queen (2001) 205 CLR 50 at 64-65 [34] per Gaudron, Gummow, Kirby and Hayne JJ; [2001] HCA 25; Dyers v The Queen (2002) 210 CLR 285 at 292 [9] per Gaudron and Hayne JJ; [2002] HCA 45; X7 v Australian Crime Commission (2013) 248 CLR 92 at 134-135 [97]- [100] per Hayne and Bell JJ; [2013] HCA 29; Lee v The Queen (2014) 253 CLR 455 at 466-467 [32]-[33]; [2014] HCA 20. 72 See Australian Securities and Investments Commission v Hellicar (2012) 247 CLR 345 at 407-409 [153]-[155] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ, 436-437 [243] per Heydon J; [2012] HCA 17 ("Hellicar"). Bell Nettle Gordon aimed at securing, and may result in, a criminal conviction. By contrast, a civil penalty proceeding is precisely calculated to avoid the notion of criminality as such73. No less importantly, whereas criminal penalties import notions of retribution74 and rehabilitation, the purpose of a civil penalty, as French J explained in Trade Practices Commission v CSR Ltd, is primarily if not wholly protective in promoting the public interest in compliance75: "Punishment for breaches of the criminal law traditionally involves three elements: deterrence, both general and individual, retribution and rehabilitation. Neither retribution nor rehabilitation, within the sense of the Old and New Testament moralities that imbue much of our criminal law, have any part to play in economic regulation of the kind contemplated by Pt IV [of the Trade Practices Act]. ... The principal, and I think probably the only, object of the penalties imposed by s 76 is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene the Act." Moreover, in criminal proceedings the imposition of punishment is a uniquely judicial exercise of intuitive or instinctive synthesis of the sentencing facts as found by the sentencing judge (consistently with the jury's verdict) and relevant sentencing the considerations in accordance with established sentencing principle76. There is no relative weighting and application of judge's 73 Gapes (1979) 27 ALR 87 at 111 per Sweeney J; Hellicar (2012) 247 CLR 345 at 436-437 [243] per Heydon J; cf Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd (2003) 216 CLR 161 at 205-206 [133]-[136] per Hayne J, Gleeson CJ and McHugh J agreeing at 166 [1], [3]; [2003] HCA 49 ("Labrador Liquor"). 74 Gapes (1979) 27 ALR 87 at 90 per Smithers J; cf Ingleby (2013) 39 VR 554 at 565 [44] per Weinberg JA. 75 (1991) ATPR ΒΆ41-076 at 52,152; cf FWBII v CFMEU (2015) 229 FCR 331 at 357- 76 Wong v The Queen (2001) 207 CLR 584 at 611 [75] per Gaudron, Gummow and Hayne JJ; Markarian v The Queen (2005) 228 CLR 357 at 373-375 [35]-[39] per Gleeson CJ, Gummow, Hayne and Callinan JJ; [2005] HCA 25; Hili v The Queen (Footnote continues on next page) Bell Nettle Gordon room in an exercise of that nature for the judge to take account of the Crown's opinion as to an appropriate length of sentence. For the purposes of imposing a criminal sentence, the question is what the judge considers to be the appropriate sentence. Nor can there be any question of a sentencing judge being persuaded by the Crown's opinion as to the range of sentences open to be imposed. As was observed in Barbaro77, apart from the conceptually indeterminate boundaries of the available range of sentences and systemic problems which would likely result from a criminal sentencing judge being seen to be influenced by the Crown's opinion as to the available range of sentences, the Crown's opinion would in all probability be informed by an assessment of the facts and relative weighting of pertinent sentencing considerations different from the judge's assessment. That is why it was held in Barbaro that it is inconsistent with the nature of criminal sentencing proceedings for a sentencing judge to receive a submission from the Crown as to the appropriate sentence or even as to the available range of sentences. In contrast, in civil proceedings there is generally very considerable scope for the parties to agree on the facts and upon consequences. There is also very considerable scope for them to agree upon the appropriate remedy and for the court to be persuaded that it is an appropriate remedy. Accordingly, settlements of civil proceedings are commonplace and orders by consent for the payment of damages and other relief are unremarkable. So are court-approved compromises of proceedings on behalf of infants and persons otherwise lacking capacity, court-approved custody and property settlements, court-approved compromises in group proceedings and court-approved schemes of arrangement. More generally, it is entirely consistent with the nature of civil proceedings for a court to make orders by consent and to approve a compromise of proceedings on terms proposed by the parties, provided the court is persuaded that what is proposed is appropriate. Possibly, there are exceptions to the general rule. There is, however, no reason in principle or practice why civil penalty proceedings should be treated as an exception. Subject to the court being sufficiently persuaded of the accuracy of the parties' agreement as to facts and consequences, and that the penalty which the parties propose is an appropriate remedy in the circumstances thus revealed, (2010) 242 CLR 520 at 538-540 [58]-[62] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ. 77 (2014) 253 CLR 58 at 72-73 [35]-[37]. Bell Nettle Gordon it is consistent with principle and, for the reasons identified in Allied Mills78, highly desirable in practice for the court to accept the parties' proposal and therefore impose the proposed penalty. To do so is no different in principle or practice from approving an infant's compromise, a custody or property compromise, a group proceeding settlement or a scheme of arrangement. It is true that there is a public interest in the imposition of civil penalties as opposed to the purely private interests which are in issue in many civil proceedings. But civil penalty proceedings are by no means the only civil proceedings in which the public interest is involved. Custody disputes involve the public interest. So do group proceedings and schemes of arrangement. So also do taxation, customs and social security appeals, and detention orders; and examples can be multiplied. Yet in each of those cases, it is wholly unexceptionable for a court to accept an agreed submission as to the nature and quantum of relief, provided the court is persuaded that it is an appropriate remedy. Once it is understood that civil penalties are not retributive, but like most other civil remedies essentially deterrent or compensatory and therefore protective, there is nothing odd or exceptionable about a court approving an agreed settlement of a civil proceeding which involves the public interest; provided of course that the court is persuaded that the settlement is appropriate. It is also true, as the Full Court observed, that the regulator in a civil penalty proceeding is not disinterested79. As has been seen, under the BCII Act, the Director's statutory functions include monitoring and promoting appropriate standards of conduct by building industry participants generally. It is, therefore, naturally to be assumed that the Director will fashion penalty submissions with an overall view to achieving that objective and thus perhaps, if not probably, with one eye to considerations beyond the case in hand. That consideration, however, supports, rather than detracts from, the propriety of a court receiving joint (or separate) submissions as to facts and penalty and imposing the proposed penalty if persuaded that it is appropriate. As was emphasised in NW Frozen Foods80, it is the function of the relevant regulator to regulate the industry in order to achieve compliance and, accordingly, it is to be expected that the regulator will 78 (1981) 37 ALR 256 at 259 per Sheppard J. See also NW Frozen Foods (1996) 71 FCR 285 at 291; Mobil Oil (2004) ATPR ΒΆ41-993 at 48,627 [53]. 79 FWBII v CFMEU (2015) 229 FCR 331 at 376 [139]; cf Barbaro (2014) 253 CLR 80 (1996) 71 FCR 285 at 290-295. Bell Nettle Gordon be in a position to offer informed submissions as to the effects of contravention on the industry and the level of penalty necessary to achieve compliance. That being said, the submissions of a regulator will be considered on their merits in the same way as the submissions of a respondent and subject to being supported by findings of fact based upon evidence, agreement or concession. As was also said in NW Frozen Foods81: "Courts have learned to be suspicious of claims of secret knowledge; and justice should be done in the light, with the relevant facts exposed to view. It is the Court which bears the responsibility." But, subject to that imperative, there is no indication in the purpose or text of the BCII Act that the court should be less willing to receive a submission as to the terms and quantum of penalty in a civil penalty proceeding than to receive a submission as to the terms and quantum of relief put up for approval by the court in any other kind of civil proceeding. The BCII Act expressly provides that the Director's functions include intervening in proceedings and making submissions in accordance with the Act82 and it does not impose any express limitation or restriction on the evidence, materials or submissions which may be received from the Director. By providing for civil penalty proceedings, it implicitly assumes the application of the general practice and procedure regarding civil proceedings and eschews the application of criminal practice and procedure83. That impression is fortified by the provision made in s 49 of the BCII Act for civil penalty proceedings to be instituted by a range of eligible persons84, including persons who are affected by a putative contravention, and for a range of remedies, including an order requiring the defendant to pay a specified amount by way of compensation for damage suffered by another person as a result of the contravention. There can be no question that a person affected by a 81 (1996) 71 FCR 285 at 298. 82 BCII Act, ss 10(c), 71. 83 See Hellicar (2012) 247 CLR 345 at 436-437 [243] per Heydon J; cf Labrador Liquor (2003) 216 CLR 161 at 205-206 [135]-[138]. 84 BCII Act, s 49(6). Bell Nettle Gordon contravention who brought a civil penalty proceeding under s 49 would be entitled to make submissions to the court as to the terms and quantum of the relief sought, just as there can be no question that the respondent to such a proceeding would be entitled to make submissions as to the terms and quantum of any relief to be granted. And the legislation draws no distinction between the procedure applicable to such a proceeding and the procedure which is to apply to a proceeding instituted by the Director. Rather, by conditioning the court's power to make a civil penalty order on application by an eligible person in a civil proceeding, s 49 appears to contemplate that whoever be the eligible person will identify the relief which is sought, not only in the initiating process but also in final address. The Full Court considered it to be significant that the BCII Act did not expressly provide for the Director to make submissions as to penalty85. But the absence of any express provision of that kind is unremarkable. It is to be presumed that Parliament intended that the civil penalty provisions of the BCII Act would be applied in accordance with the long-established "general system of law"86. There is nothing in the BCII Act which necessarily implies the exclusion of the prima facie entitlement of the Director as a party to a civil penalty proceeding to make submissions as to the form and quantum of the relief which is sought87 and, contrary to the Full Court's reasoning88, the phenomenon of a regulator making submissions as to the terms and quantum of a civil penalty does not lead to and is not likely to lead to erroneous views about the importance of the regulator's opinion in the setting of appropriate penalties. contradistinction to the role of the Crown in criminal proceedings89, it is consistent with the purposes of civil penalty regimes of which Pt 1 of Ch 7 of the BCII Act is typical, and therefore with the public interest, that the regulator take 85 FWBII v CFMEU (2015) 229 FCR 331 at 388 [179], 391 [190], 401 [226]. 86 Potter v Minahan (1908) 7 CLR 277 at 304 per O'Connor J; [1908] HCA 63; cf Balog v Independent Commission Against Corruption (1990) 169 CLR 625 at 635-636; [1990] HCA 28. 87 Cf Coco v The Queen (1994) 179 CLR 427 at 437 per Mason CJ, Brennan, Gaudron and McHugh JJ; [1994] HCA 15. 88 FWBII v CFMEU (2015) 229 FCR 331 at 385 [171], 403 [234], 404 [239]. 89 See R v Lucas [1973] VR 693 at 705; Subramaniam v The Queen (2004) 79 ALJR 116 at 127-128 [54]; 211 ALR 1 at 16; [2004] HCA 51; R v Livermore (2006) 67 NSWLR 659 at 669 [47]-[48]. Bell Nettle Gordon an active role in attempting to achieve the penalty which the regulator considers to be appropriate and thus that the regulator's submissions as to the terms and quantum of a civil penalty be treated as a relevant consideration. The Unions' further submissions The Unions pressed two submissions which went beyond the Commonwealth's submissions. First, it was submitted that, in the absence of an amendment to the regulator's initiating process, a court which rejects an agreed penalty nonetheless may not impose a penalty greater than that sought in the initiating process. Given that these appeals are from a decision of the Full Court adjourning the penalty proceedings and that no penalty orders have in fact been made, that issue is not within the scope of the matter and is therefore inappropriate to decide. It is sufficient to record that, as was said in Mobil Oil90, if a court is disposed not to impose the agreed penalty, it may be appropriate to give the parties an opportunity to withdraw their consent or otherwise be heard. Secondly, it was submitted that the agreed penalty orders sought in the Full Court should be granted by this Court. That submission must be rejected. As the Director points out, the task of determining an appropriate civil penalty is usually performed by a single judge at first instance. That task has not yet been performed in this proceeding and should not be performed for the first time by this Court on appeal. Conclusion and orders For these reasons, the appeals should be allowed. The order of the Full Court adjourning the further hearing of the matter should be set aside and the matter should be remitted to the Federal Court for determination according to law. 90 (2004) ATPR ΒΆ41-993 at 46,628 [58]. The joint reasons for judgment conclude that the reasoning of the plurality in Barbaro v The Queen91 has no application to a civil penalty proceeding and that the principles applicable to agreed penalty submissions in a civil penalty proceeding remain those articulated in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission92 and Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd93. I agree with that conclusion and join in the proposed orders. The argument in the appeals involved no challenge to the reasoning of the plurality in Barbaro. The only issue agitated was whether what was there said in the context of a criminal proceeding was transferable to the context of a civil penalty proceeding. At the forefront of the argument of the amici curiae, who appeared in support of the judgment under appeal, was the submission that the reasoning of the plurality in Barbaro is transferable to the context of a civil penalty proceeding because it rests on a proposition which applies as much to a civil proceeding as to a criminal proceeding. They submitted that it was essential to the reasoning of the plurality94 that the notion of an "available range" is wrong in principle because it introduces, into the making of a discretionary judgment, considerations relevant only to review of a discretionary judgment in an appeal governed by the principles in House v The King95. Underlying the reasoning of the plurality in Barbaro, according to the amici curiae, is therefore the same proposition as that which underlay the reasoning of Weinberg JA in Australian Securities and Investments Commission v Ingleby96 when he said: "NW Frozen Foods and Mobil Oil were ... wrongly decided because they treat the trial judge, who is to impose the pecuniary penalty, as though he or she is exercising an appellate role. Under the approach adopted in those cases, the judge is not independently arriving at the appropriate penalty, but rather asking an entirely different question β 91 (2014) 253 CLR 58; [2014] HCA 2. 92 (1996) 71 FCR 285. 93 (2004) ATPR ΒΆ41-993. 94 (2014) 253 CLR 58 at 70-71 [24]-[28], 73 [36]-[38], 75 [42]-[43]. 95 (1936) 55 CLR 499 at 505; [1936] HCA 40. 96 (2013) 39 VR 554 at 563. whether the agreed figure falls within the range of penalties reasonably available. That is, in substance, an appellate question, and not a first instance question." Expressed by reference to the language of the statutory provision relevant to the present appeals and the statutory provision relevant to the decision in Barbaro, the substance of the proposition which the amici curiae argued is to be drawn from the reasoning of the plurality in Barbaro is that the notion of an available range can no more inform the making of a discretionary judgment as to the civil penalty that a court "considers appropriate" within the meaning of s 49(1) of the Building and Construction Industry Improvement Act 2005 (Cth) than it can inform the making of a discretionary judgment as to the sentence "that is of a severity appropriate in all the circumstances of the offence" within the meaning of s 16A(1) of the Crimes Act 1914 (Cth). In either case, the court is distracted from its statutory function of exercising its own judgment, arrived at through a process of synthesising potentially competing considerations to produce a single result. Were such a proposition to be drawn from the reasoning of the plurality, I would consider it erroneous for the reasons I have already given in Barbaro97. I do not repeat them. On reflection, I do not think that such a proposition is to be drawn from the reasoning of the plurality. The proposition would apply to prevent a sentencing court receiving any submission as to the appropriate numerical range of sentence from either party to a criminal proceeding. There are statements of the plurality which could be interpreted as going that far. Nevertheless, as the Victorian Court of Appeal noted in Matthews v The Queen98, the holding is best understood as directed only to what could be said to the sentencing court by the prosecution. It follows that what was said by the plurality in Barbaro as to the notion of an available range cannot be read as expressing an independent basis for the holding in that case. The basis for the holding is rather to be found in what was said about the respective roles of the judge and of the prosecution in the overall context of rejecting the holding in R v MacNeil-Brown99 that "the making of submissions on sentencing range is an aspect of the duty of the prosecutor to assist the court". 97 (2014) 253 CLR 58 at 78-80 [59]-[61]. 98 [2014] VSCA 291 at [22]-[25]. 99 (2008) 20 VR 677 at 678 [2]. The view of the prosecution, the plurality said in Barbaro, cannot be "dispassionate"100, and "[t]he statement by the prosecution of the bounds of an available range of sentences may lead to erroneous views about its importance in the process of sentencing with consequential blurring of what should be a sharp distinction between the role of the judge and the role of the prosecution in that process"101. The holding was expressed in terms that "[i]t is neither the role nor the duty of the prosecution to proffer some statement of the specific result which counsel then appearing for the prosecution ... considers should be reached or a statement of the bounds within which that result should fall"102. The reasoning of the plurality in Barbaro is therefore best understood as having gone no further than to recognise a qualification to the common law duty of a prosecutor to assist a criminal court to avoid appealable error, founded on a consideration of legal policy. The qualification is that the prosecutor cannot state that a custodial sentence of a specified numerical length or of a length within a particular numerical range is appropriate. The policy reason is that for the prosecutor to speak of numbers would give rise to what was assessed to be an unacceptable risk of breaking down the sharp distinction which must exist within the criminal justice system between the roles of the prosecution and the court in exercising the coercive power of the state in the punishment of criminal guilt. So understood, Barbaro has nothing to say about the conduct of any party to a civil penalty proceeding. Assuming without deciding, as in Australian Securities and Investments Commission v Hellicar103, that a regulator bringing civil penalty proceedings is "subject to some form of duty ... that can be described as a duty to conduct litigation fairly", the position of the regulator cannot be equated with the position of a prosecutor. The regulator is not bound by the nature of the proceeding to be dispassionate in the relevant sense. Subject to its statutory charter, the regulator is permitted to advocate for a litigious outcome which the regulator considers to be in the public interest. 100 (2014) 253 CLR 58 at 72 [32]. 101 (2014) 253 CLR 58 at 72 [33]. 102 (2014) 253 CLR 58 at 74 [39]. 103 (2012) 247 CLR 345 at 407 [152]; [2012] HCA 17. KEANE J. I agree that these appeals should be allowed for the reasons given by French CJ, Kiefel, Bell, Nettle and Gordon JJ. I seek only to make some additional observations upon the nature of proceedings for the recovery of a civil penalty under s 49 of the BCII Act and the reasons why this Court's decision in Barbaro v The Queen104 does not affect the conduct of such proceedings. The Full Court held that this Court's conclusion in Barbaro that the "prosecution's opinion as to sentencing range is irrelevant to the sentencing process"105 is not appurtenant solely to criminal proceedings, but extends to proceedings for the recovery of a civil penalty under the BCII Act. The Full Court held that submissions as to penalty in such proceedings are an impermissible attempt [notwithstanding that] the judge can only act upon the law and the evidence."106 the evidence by opinions to "supplement The Full Court proceeded on the footing that there is no relevant distinction between proceedings for the recovery of a civil penalty for the contravention of a civil penalty provision and proceedings for the imposition of criminal punishment107. In doing so, the Full Court erred in failing to give effect to the BCII Act. The BCII Act The objects of the BCII Act are set out in s 3: "(1) The main object of this Act is to provide an improved workplace relations framework for building work to ensure that building work is carried out fairly, efficiently and productively for the benefit of all building industry participants and for the benefit of the Australian economy as a whole. This Act aims to achieve its main object by the following means: promoting respect for the rule of law; 104 (2014) 253 CLR 58; [2014] HCA 2. 105 FWBII v CFMEU (2015) 229 FCR 331 at 369 [106]. 106 FWBII v CFMEU (2015) 229 FCR 331 at 388 [180]. 107 FWBII v CFMEU (2015) 229 FCR 331 at 357 [64]-[66]. (d) ensuring that building industry participants are accountable for their unlawful conduct; providing effective means for investigation and enforcement of relevant laws; providing assistance and advice industry participants in connection with their rights and obligations under relevant industrial laws." to building In pursuit of these objects, the Commissioner was established, one of the Commissioner's functions being the pursuit of proceedings for the recovery of civil penalties for contraventions of the BCII Act108. In this regard, s 49 provides relevantly: "(1) An appropriate court, on application by an eligible person, may make one or more of the following orders in relation to a person (the defendant) who has contravened a civil penalty provision: an order imposing a pecuniary penalty on the defendant; an order requiring the defendant to pay a specified amount to another person as compensation for damage suffered by the other person as a result of the contravention; any other order that the court considers appropriate. The maximum pecuniary penalty is: for a Grade A civil penalty provision β 1,000 penalty units if the defendant is a body corporate and otherwise 200 penalty units; and for a Grade B civil penalty provision β 100 penalty units if the defendant is a body corporate and otherwise 20 penalty units. 108 Pursuant to s 2.3(3)(a) of the Building and Construction Industry Improvement Amendment (Transition to Fair Work) Regulation 2012 (Cth), the Director of the Fair Work Building Industry Inspectorate under the Fair Work (Building Industry) Act 2012 (Cth) is taken to be the Commissioner under the BCII Act and is entitled to bring proceedings under the BCII Act. The orders that may be made under paragraph (1)(c) include: injunctions (including interim injunctions); and any other orders that the court considers necessary to stop the conduct or remedy its effects, including orders for the sequestration of assets. (5) A pecuniary penalty is payable to the Commonwealth, or to some other person if the court so directs. It may be recovered as a debt." An "eligible person" for the purposes of s 49(1) is defined by s 49(6) to include the Commissioner and "a person affected by the contravention". It is important for present purposes to note that, under s 49(1), the jurisdiction of an "appropriate court" arises "in relation to a person (the defendant) who has contravened a civil penalty provision". The BCII Act contains provisions each of which specifically notes that it is a "civil penalty provision"109. In contrast, other provisions impose criminal liability which attracts penalties that include imprisonment110. An application under s 49(1) may be initiated under r 8.01 of the Federal Court Rules 2011 (Cth). The Rules require that the application state the relief claimed and the statutory provision under which it is claimed111. Criminal proceedings and civil penalties In Barbaro112, French CJ, Hayne, Kiefel and Bell JJ held that where a court is called upon to pass sentence on an offender in criminal proceedings, "[t]he prosecution's statement of what are the bounds of the available range of sentences is a statement of opinion" which a sentencing judge may not take into account "in finding the relevant facts, deciding the applicable principles of law or applying those principles to the facts to yield the sentence to be imposed." Their Honours concluded that "the prosecution is not required, and should not be permitted, to make such a statement of bounds to a sentencing judge." 109 See ss 28(3), 38, 43(1), 44(1), 44(3), 44(4), 45(1), 46(1), 59(14), 62(14), 63(14). 110 See ss 52(6), 65(2). 111 Rule 8.03(1) of the Federal Court Rules 2011 (Cth). 112 (2014) 253 CLR 58 at 66 [7]. The decision in Barbaro concerned convicted offenders being sentenced to terms of imprisonment by way of punishment for the crime of which they had been convicted after a criminal trial. The proceeding of present concern is for the recovery of what is designated by the BCII Act to be a penalty recoverable for a contravention of a "civil penalty" provision. It must be acknowledged immediately that the distinction between criminal and civil cases does not hold for all purposes113. As Hayne J, with whom Gleeson CJ and McHugh J agreed, said in Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd114, the classification of proceedings as "civil" or "criminal" is: "at best, unstable. It seeks to divide the litigious world into only two parts when, in truth, that world is more complex and varied than such a classification acknowledges. There are proceedings with both civil and criminal characteristics: for example, proceedings for a civil penalty under companies115 and trade practices116 legislation. The purposes of those proceedings include purposes of deterrence, and the consequences can be large and punishing." But distinctions are regularly drawn for particular purposes between criminal proceedings and civil proceedings117; and these distinctions have proved to be sufficiently stable to serve the purposes for which they have been drawn. For example, it is now well understood that the various procedural protections of the position of an accused, developed as aspects of "the accusatorial nature of a criminal trial in our system of criminal justice"118, are not equally applicable in 113 Witham v Holloway (1995) 183 CLR 525 at 534, 549; [1995] HCA 3; Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd (2003) 216 CLR 161 at 172-173 [29]-[30], 180-181 [62]-[63], 195 [107], 198-199 [114], 200 [119]-[121]; [2003] HCA 49; Rich v Australian Securities and Investments Commission (2004) 220 CLR 129 at 141 [22], 144-146 [30]-[35]; [2004] HCA 42. 114 (2003) 216 CLR 161 at 198-199 [114]. 115 Corporations Act 2001 (Cth), Pt 9.4B (ss 1317DA-1317S). 116 Trade Practices Act 1974 (Cth), s 77. 117 Hinch v Attorney-General (Vict) (1987) 164 CLR 15 at 88-89; [1987] HCA 56; Witham v Holloway (1995) 183 CLR 525 at 534, 549; Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd (2015) 89 ALJR 622 at 630-631 [40]-[47]; 320 ALR 448 at 456-457; [2015] HCA 21. 118 Lee v The Queen (2014) 253 CLR 455 at 467 [32]; [2014] HCA 20. See also Mallan v Lee (1949) 80 CLR 198 at 217-218; [1949] HCA 48; Sorby v The (Footnote continues on next page) civil proceedings119. Further, it is not suggested that either the availability or the exercise of the power to award exemplary damages in proceedings for tort for the purpose of punishing the tortfeasor rather than compensating the victim120 alters the civil character of the proceedings. And, more importantly, for a court to ignore the legislature's designation of statutory proscriptions as civil penalty provisions on the basis of the court's view that it is a misleading label is distinctly inconsistent with the deference due by the judicial branch of government to the legislative branch under constitutional arrangements whereby the respective powers of those branches are separated121. Changes in criminal practice and procedure that took place in the common law from the end of the 17th century to the end of the 19th century culminated in the recognition of the special accusatory character of the criminal trial as part of the adversarial system. Rules for the protection of the accused, such as, for example, the requirement that the prosecution prove its case without any assistance from the accused, emerged in the course of the historical evolution towards the recognition of the criminal trial as an essentially accusatory proceeding within the adversarial system122. It is not necessary here to elaborate the detail of these developments123; it is sufficient to note that they reflected the concern of the judiciary that an individual accused of a crime, with life and liberty at stake, could not match the power of the agents of the State responsible for the prosecution. In such cases, the response of the judiciary was that the protection of the individual accused against any possibility of oppressive conduct by those agents required a special Commonwealth (1983) 152 CLR 281 at 294; [1983] HCA 10; Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd (2003) 216 CLR 161 at 166 [2]; X7 v Australian Crime Commission (2013) 248 CLR 92 at 118 [42], 136 [101]-[102], 153 [159]; [2013] HCA 29. 119 Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd (2015) 89 ALJR 622 at 629-630 [36]-[37]; 320 ALR 448 at 455. 120 Lamb v Cotogno (1987) 164 CLR 1; [1987] HCA 47. 121 R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254; [1956] HCA 10. 122 Environment Protection Authority v Caltex Refining Co Pty Ltd (1993) 178 CLR 477 at 497-498; [1993] HCA 74. 123 See Langbein, "The Historical Origins of the Privilege Against Self-Incrimination at Common Law", (1994) 92 Michigan Law Review 1047 at 1083. approach to the administration of criminal justice within the adversarial system. In Lee v The Queen124, this Court said: "Our system of criminal justice reflects a balance struck between the power of the State to prosecute and the position of an individual who stands accused. The principle of the common law125 is that the prosecution is to prove the guilt of an accused person. This was accepted as fundamental in X7126. β¦ The principle is an aspect of the accusatorial nature of a criminal trial in our system of criminal justice127." Judicial insistence upon the accusatorial nature of a criminal trial was accompanied by an insistence that the "adjudgment and punishment of criminal guilt" has "become established as essentially and exclusively judicial in character."128 But the historical concern to control the coercive power of the State exercised in criminal jurisdiction in relation to life and liberty did not extend to that aspect of the power of the State deployed in civil proceedings to vindicate the pecuniary interests of a plaintiff who has invoked that jurisdiction. The initiation and pursuit of criminal proceedings is the exclusive function of the executive government of the State, whereas, for civil proceedings, that is not so. And where, in civil proceedings, the plaintiff does happen to be an agent of the State, that circumstance does not alter the essential nature of the proceedings. In particular, it does not engage the concerns which led, as a matter of history, to the recognition of the special character of criminal proceedings within the adversarial system and the exclusivity of the role of the judiciary in fixing a just punishment for a criminal offence. 124 (2014) 253 CLR 455 at 466-467 [32]. 125 Woolmington v Director of Public Prosecutions [1935] AC 462; Environment Protection Authority v Caltex Refining Co Pty Ltd (1993) 178 CLR 477. 126 (2013) 248 CLR 92 at 119-120 [46], 135-136 [100]-[102], 153 [159]; see also Lee v New South Wales Crime Commission (2013) 251 CLR 196 at 266 [176], 313 [318]; [2013] HCA 39. 127 X7 v Australian Crime Commission (2013) 248 CLR 92 at 119-120 [46], 136 [101]-[102], 142-143 [124], 153 [159]-[160]; Lee v New South Wales Crime Commission (2013) 251 CLR 196 at 261 [159]. 128 Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1 at 27; [1992] HCA 64. The Full Court was persuaded to apply the approach taken in Barbaro to the present case by reason of129: "the similarity between the 'instinctive synthesis' necessarily involved in both the sentencing task and the task [of fixing pecuniary penalties], the fact that each process involves invocation of the coercive power of the State, the associated public interest and public perceptions as to the judicial process." It should be understood, however, that these considerations informed the decision in Barbaro in the light of the development of criminal practice and procedure, and as appurtenances of the exercise of criminal jurisdiction. In Barbaro, the plurality made the point that an opinion proffered by the prosecutor, an officer of the executive government, as to the proper sentence, is an unwarranted intrusion upon the performance of an exclusively judicial task130. Their Honours said131: "It is neither the role nor the duty of the prosecution to proffer some statement of the specific result which counsel then appearing for the prosecution β¦ considers should be reached or a statement of the bounds within which that result should fall." Their Honours also said of the assumption that the prosecution's proffering of a statement of the bounds of the available range of sentences will assist a sentencing judge to come to a just sentence132: "That assumption depends upon the prosecution determining the supposed range dispassionately. It depends upon the prosecution acting not only fairly (as it must) but in the role which Buchanan JA rightly described [in R v MacNeil-Brown]133 as that of 'a surrogate judge'. That is not the role of the prosecution." 129 FWBII v CFMEU (2015) 229 FCR 331 at 335 [3]. 130 (2014) 253 CLR 58 at 70-71 [25]-[28], 72-74 [34]-[41]. 131 (2014) 253 CLR 58 at 74 [39]. 132 (2014) 253 CLR 58 at 71 [29]. 133 (2008) 20 VR 677 at 710 [128]. The plurality emphasised the importance of the strict separation of the functions of the executive and judicial organs of government in relation to the integrity of the sentencing process because134: "[T]he prosecution forms a view which (properly) reflects the interests that the prosecution is bound to advance. But that view is not, and cannot be, dispassionate." Their Honours explained that the associated public interest in, and public perceptions of, the integrity of the judicial process in criminal proceedings were directly connected with the exercise of criminal jurisdiction. Their Honours said135: "The statement by the prosecution of the bounds of an available range of sentences may lead to erroneous views about its importance in the process of sentencing with consequential blurring of what should be a sharp distinction between the role of the judge and the role of the prosecution in that process. If a judge sentences within the range which has been suggested by the prosecution, the statement of that range may well be seen as suggesting that the sentencing judge has been swayed by the prosecution's view of what punishment should be imposed. By contrast, if the sentencing judge fixes a sentence outside the suggested range, appeal against sentence seems well-nigh inevitable." In this case, no party sought to challenge Barbaro, or to suggest that it took an unduly strict view of the special nature of criminal proceedings within the adversarial system. The point to be made here is that the view taken in Barbaro is grounded in the special nature of criminal proceedings as they have developed historically. In contrast, as a matter of legal history, the concept of a "penalty" has long been recognised as describing a sanction for a wrong done to the public interest that was neither entirely criminal nor entirely civil. As Professor Kenneth Mann has noted136, Blackstone "discussed penalty cases in his volume on private wrongs"137. 134 (2014) 253 CLR 58 at 72 [32]. 135 (2014) 253 CLR 58 at 72 [33]. 136 Mann, "Punitive Civil Sanctions: The Middleground Between Criminal and Civil Law", (1992) 101 The Yale Law Journal 1795 at 1820-1821. 137 Blackstone, Commentaries on the Laws of England, (1768), bk 3 at 2. In this case the Full Court observed138 that, in Naismith v McGovern139, the High Court had said of a proceeding for the recovery of penalties for offences relating to the provision of an income tax return: "The most that can be said is that the proceedings being for the recovery of penalties are of a penal nature." But more can be said of the nature of the proceedings here precisely because the legislature has said that the proceedings are for the recovery of a pecuniary penalty for the contravention of a "civil penalty provision". Such a provision is deliberately distinguished by the legislature from provisions which impose criminal sanctions. As has already been noted, the BCII Act maintains a distinction between those provisions. Under the BCII Act, s 49 is apt to pick up the general law regarding civil proceedings but not considerations peculiarly appurtenant to criminal prosecution and sentencing. The Full Court declined to ascribe any significance to the legislative descriptor "civil" in relation to penalty, save to accept a suggestion that it is apt to mislead140 by concealing or misrepresenting the punitive purpose for which a civil penalty may be imposed. But it is well settled that proceedings for the recovery of a civil penalty are civil proceedings even though "[t]he purposes of those proceedings include purposes of deterrence, and the consequences can be large and punishing."141 The legislative choice to designate proceedings for the recovery of a civil penalty may not be ignored by a court. The legislature has explicitly decided that a claim by an eligible person for the recovery of a pecuniary penalty for the contravention of a civil penalty provision is to be brought as a civil proceeding; and within the paradigm of civil proceedings, a regulator who brings such proceedings is to be viewed (like any other eligible person) not as a prosecutor but as a plaintiff142. In proceedings under s 49 of the BCII Act, as indeed in any civil proceedings, it is the right and duty of the plaintiff to mark out the extent of its claim against the defendant. The plaintiff's claim establishes the scope of the controversy to be resolved by the judgment of the court. When a plaintiff asserts a claim to the grant of a particular remedy, it is not proffering an opinion on a 138 FWBII v CFMEU (2015) 229 FCR 331 at 339 [12]. 139 (1953) 90 CLR 336 at 341; [1953] HCA 59. 140 FWBII v CFMEU (2015) 229 FCR 331 at 338-339 [11]-[12]. 141 Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd (2003) 216 CLR 161 at 198-199 [114]. 142 It is convenient to refer to "plaintiffs" and "defendants" to make this general point, even though the Federal Court Rules use the expressions "applicant" and "respondent". matter of fact or law; it is stating the basis on which a controversy between it and the defendant may be quelled by the exercise of judicial power. When a defendant agrees to a civil penalty in a particular amount, it is assenting to the grant of relief to that extent. And an agreement of the parties as to the basis on which they seek to resolve the controversy between them is not merely an opinion proffered by either or both of them as to how the proceedings should justly be resolved: it is a resolution of the controversy between them insofar as the quelling of that controversy is in their power. In addition, as the Full Court rightly appreciated143, a defendant's agreement to meet a plaintiff's claim for a penalty is relevant as an indication of the defendant's acceptance of responsibility, in a way which is meaningful to the fixing of a proper penalty, for its departure from legal norms which gave rise to the claim. It has significance, of such weight as the court considers appropriate, as an assurance that the defendant may be relied upon not to transgress in that way again. It is relevant to the court's assessment of what is required by way of specific deterrence to prevent departures by the defendant from those standards in the future. To accept that this is so, as the Full Court did, is to acknowledge a point of difference between this case and Barbaro. To acknowledge this difference is to acknowledge an indication that the considerations of principle which underpin the reasons in Barbaro do not apply to proceedings under s 49 of the BCII Act. That indication should have been heeded. the passages cited from Barbaro and There are further points of contrast which may be noted between the the considerations discussed considerations which arise under the BCII Act that are material to proceedings for the recovery of a civil penalty under that Act. First, whether the plaintiff in proceedings for the recovery of a civil penalty is an agent of the State or not, a plaintiff in civil proceedings, unlike a prosecutor in a criminal trial, is not expected to be dispassionate in its submissions. Generally speaking, a plaintiff in a civil proceeding has an obvious interest in the outcome of proceedings. More particularly, under the BCII Act it is the Commissioner's direct, immediate and manifestly partisan interest which drives the proceeding as an aspect of the Commissioner's role in relation to the enforcement of the BCII Act in accordance with the objective in s 3(2)(e). Secondly, a plaintiff in proceedings for the recovery of a penalty under the BCII Act may or may not be an agent of the State. Any "eligible person" may make an application under s 49. No distinction is drawn by the BCII Act between "eligible persons" in relation to any constraints to which they might be subjected, in terms of their participation in proceedings under s 49. It would be a distinctly odd state of affairs if the Commissioner were not permitted to make 143 FWBII v CFMEU (2015) 229 FCR 331 at 335 [3], 402 [231]. submissions as to penalty but other eligible persons might do so. That state of affairs seems even more odd when one recalls that the Commissioner's role in the enforcement of the BCII Act includes an entitlement of the Commissioner to intervene, in the public interest, in civil proceedings commenced by others144. An obvious, perhaps the most obvious, reason for an intervention by the Commissioner in the public interest in proceedings commenced by another eligible person would be to make submissions as to the appropriate penalty for a contravention of the Act. It would make little sense to hold that the Commissioner may intervene in proceedings to make submissions which the court is obliged steadfastly to ignore. In addition, recovery of a penalty for breach of a civil penalty provision is only one aspect of the relief which may be granted under s 49145 in relation to a contravention of a civil penalty provision. Submissions as to the various forms of relief sought by a plaintiff are a familiar part of civil proceedings. Nothing in the statute reveals an intention to preclude submissions as to civil penalty orders but not as to other forms of relief. Finally, the view which prevailed in the Full Court would restrict the role of the Commissioner under the BCII Act in a way that cannot have been intended by the legislation. Under the BCII Act, the Commissioner is tasked with the systematic enforcement of the standards of conduct established by the BCII Act. In determining whether to commence, continue or compromise proceedings in pursuit of that task, the Commissioner may be expected to weigh broad considerations of cost and benefit in order to maximise the impact of the performance of the Commissioner's functions given the relative scarcity of resources available for that purpose. In proceedings under s 49 of the BCII Act for the recovery of a civil penalty by the Commissioner, the willingness of the Commissioner to accept a particular sum by way of civil penalty in discharge of the Commissioner's claim against the defendant can be expected to reflect a considered estimation that, given the hazards and expense of litigation, satisfaction of the Commissioner's claim against the defendant on such terms is apt to advance the public interest in the enforcement of the regulatory regime more effectively and efficiently than the continued prosecution of the claim. Those considerations may include the cost of proceeding to a judgment against a defendant who is willing to acknowledge its contravention upon terms, and the risk of failure involved in 144 BCII Act, s 71. 145 Such other forms of relief include compensation orders (s 49(1)(b)), injunctions (s 49(3)(a)), and other orders that the court considers appropriate (ss 49(1)(c), pursuing the case to a successful conclusion if a compromise cannot be reached. Modest successes may be regarded by the Commissioner as of greater value to the public interest in general deterrence of wrongdoing than the exhaustion of its resources upon an egregious but isolated example of wrongdoing. The Commissioner's stance can be expected to reflect a pragmatic assessment by the authority charged by the legislature with the effective investigation and enforcement of the regulatory regime that the public interest is best served by bringing the proceedings to a conclusion on agreed terms as to penalty. That course may be informed by a perceived need to conserve resources for the pursuit of other wrongdoing and wrongdoers, and to avoid the risks and uncertainties usually associated with litigation. It is because the Commissioner may, on occasion, be too pragmatic in taking such a stance that the court must exercise its function to ensure that the penalty imposed is just, bearing in mind competing considerations of principle, including that of equality before the law and the need to maintain effective deterrence to other potential contraveners. In this latter regard, in Australian Competition and Consumer Commission v TPG Internet Pty Ltd146, French CJ, Crennan, Bell and Keane JJ approved the statement by the Full Court of the Federal Court in Singtel Optus Pty Ltd v Australian Competition and Consumer Commission147 that a civil penalty for a contravention of the law: "must be fixed with a view to ensuring that the penalty is not such as to be regarded by [the] offender or others as an acceptable cost of doing business". I agree with the orders proposed by French CJ, Kiefel, Bell, Nettle and 146 (2013) 250 CLR 640 at 659 [66]; [2013] HCA 54. 147 (2012) 287 ALR 249 at 265 [62]-[63]. |
HIGH COURT OF AUSTRALIA APPELLANT AND REGIONAL PUBLISHERS PTY LTD RESPONDENT Keramianakis v Regional Publishers Pty Ltd [2009] HCA 18 29 April 2009 ORDER Appeal allowed with costs. Cross-appeal dismissed. Set aside the orders of the New South Wales Court of Appeal of 21 December 2007. In place thereof order that: first appellant's appeal be allowed with costs; (b) Order 1 and the second sentence of Order 3 of the orders made by the trial judge on 7 August 2006 be set aside; and there be a new trial in relation to the imputations set out in paragraphs (b) and (c) of paragraph 13 of the third amended statement of claim, limited to the issues of whether those imputations are carried by the newspaper article and are defamatory. On appeal from the Supreme Court of New South Wales Representation G O'L Reynolds SC with A A Henskens and R J Anderson for the appellant (instructed by Pryor Tzannes & Wallis) J S Wheelhouse SC with M F Richardson for the respondent (instructed by Johnson Winter & Slattery) S J Gageler SC, Solicitor-General of the Commonwealth with G M Aitken intervening on behalf of the Attorney-General of the Commonwealth (instructed by Australian Government Solicitor) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Keramianakis v Regional Publishers Pty Ltd Practice and procedure β Appeals β Availability of appeal where trial in District Court of New South Wales conducted with jury β Where trial judge entered "verdict" for defendant following jury's answers to questions β Whether appellant a party "dissatisfied with a Judge's β¦ judgment or order in an action" within meaning of District Court Act 1973 (NSW), s 127(1) β Relevance of absence in Supreme Court Act 1970 (NSW) of express provision conferring power on Court of Appeal in relation to appeals from District Court trial with jury. Practice and procedure β Appeals β Where right of appeal exists in respect of "a Judge's β¦ judgment or order in an action" β Relevance of cases dealing with phrase "all judgments, decrees, orders, and sentences" in Constitution, s 73. Words and phrases β "all judgments, decrees, orders, and sentences", "Judge's β¦ judgment or order in an action". Defamation Act 1974 (NSW), s 7A. District Court Act 1973 (NSW), ss 126, 127(1). Supreme Court Act 1970 (NSW), ss 22, 75A. Introduction In August 2006, in the District Court of New South Wales, a jury in a defamation trial gave answers to questions which the trial judge put to them as he was required to do by s 7A of the Defamation Act 1974 (NSW) ("the 1974 Act"). The two plaintiffs, Dr Constantine Keramianakis and Dr Albert Smagarinsky, claimed they had been defamed by a newspaper report about a medical practice they were conducting in Dubbo. The jury's answers, so far as they related to Dr Keramianakis, were to the effect that the report did not convey the defamatory imputations which he alleged it conveyed. The answers were fatal to his case. The trial judge discharged the jury and said that there would be "a verdict" for the newspaper publisher in respect of the claim by Dr Keramianakis. He also ordered the doctor to pay the publisher's costs. Dr Keramianakis appealed to the Court of Appeal of New South Wales. The Court of Appeal decided, by majority, that it did not have jurisdiction to entertain the appeal because the "verdict" pronounced by the trial judge was not a "judgment or order" of the judge within the meaning of s 127(1) of the District Court Act 1973 (NSW)1. That section confers the relevant appeal rights from the District Court to the Supreme Court. The Court of Appeal went on to say that if it had had jurisdiction, it would have found in favour of Dr Keramianakis in relation to two of the three imputations which the jury was asked to consider. That was on the basis that the doctor was entitled, as a matter of law, to a verdict based on affirmative answers to those imputations2. The Court of Appeal did have jurisdiction. What the trial judge did was to make a judgment or order even though he used the word "verdict". The appeal should be allowed. Procedural history Regional Publishers Pty Limited ("Regional Publishers") is the publisher in New South Wales of the Daily Liberal, a newspaper which circulates in Dubbo. On 22 March 2001, the newspaper carried a story about a skin cancer clinic operating in Dubbo under the name "Dubbo Skin Cancer Centre". The article was entitled "Claims skin clinic misleading public". The article included comments attributed to a Dubbo general practitioner, Dr Bruce Wagstaff, critical of the services offered at the clinic and of its fees. 1 Keramianakis v Regional Publishers Pty Ltd (2007) 70 NSWLR 395. (2007) 70 NSWLR 395 at 406-407 [103]-[104]. On 12 October 2001, Drs Keramianakis and Smagarinsky, who had established and were conducting the clinic, commenced proceedings for defamation in the District Court of New South Wales against Regional Publishers and Dr Wagstaff. The proceedings were brought under the 1974 Act, which has since been repealed by the Defamation Act 2005 (NSW). The doctors alleged that the publication gave rise to three imputations against each of them. They were: "(a) That the β¦ plaintiff as a medical practitioner was more concerned with making money than with the well-being of his patients. That the β¦ plaintiff is a medical practitioner who had misled the public. That the β¦ plaintiff as a medical practitioner had charged excessive fees for medical services." The action went to trial before a judge and jury in August 2006. On 7 August 2006, the trial judge posed a number of questions for the jury to answer. The questions were consistent with the division of functions between judge and jury prescribed by s 7A of the 1974 Act which is referred to later in these reasons. As between Dr Keramianakis and Regional Publishers the questions posed and answers given by the jury were as follows: "Q3. Has the first plaintiff established that the article published in the Daily Liberal on or about 22 March 2001 conveyed to the ordinary reasonable reader the following imputations or imputations that do not differ in substance from them: That the first plaintiff as a medical practitioner was more concerned with making money than with the well-being of his patients? FOREPERSON: No. That the first plaintiff is a medical practitioner who had misled the public? FOREPERSON: No. That the first plaintiff as a medical practitioner had charged excessive fees for medical services? FOREPERSON: No." These answers spelt the end of Dr Keramianakis' case against Regional Publishers. Dr Smagarinsky was more successful. The jury held that the Daily Liberal article conveyed imputations (b) and (c) about him to the ordinary reader and that the imputations were defamatory of him. Counsel for Regional Publishers then moved the court for judgment and the following exchange ensued: "[COUNSEL]: Your Honour I ask for judgment for the second defendant in relation to the claim brought by the first plaintiff against it and costs. HIS HONOUR: Here's the file. I have marked the jury's answers to the questions on the documents MFI 10 and 11. Now in relation to those answers you seek a verdict in relation to the second defendant, that is Regional Publishers Pty Limited against the first plaintiff. [COUNSEL]: Dealing with costs and interest. Counsel for Dr Keramianakis said that "in respect of judgment" he could say nothing. His Honour said: "Verdict you mean. There will be a verdict for the second defendant in respect of the claim by the first plaintiff Con Keramianakis." There was debate about costs and in that context the following exchange ensued: "[COUNSEL]: Well your Honour the case is wholly concluded against the second defendant so far as the first plaintiff is concerned. HIS HONOUR: Why? [COUNSEL]: The second defendant has obtained judgment against the first plaintiff in its entirety. HIS HONOUR: That's true." The trial judge, after some debate about the costs orders to be made as between the parties, said: "First plaintiff to pay second defendant's costs, yes." On 30 April 2007, the orders were settled by an Assistant Registrar of the District Court according to Form 33, pursuant to r 36.11 of the Uniform Civil Procedure Rules 2005 (NSW). The document was headed "Judgment/Order". The date that the order was made or given was shown as 7 August 2006 and that date was also shown as the date the order was entered. Under the heading "Terms of Judgment or Order", the following appeared: "1. Verdict for the second defendant, in respect of the claim by the first plaintiff. First plaintiff to pay second defendant's costs. Verdict for the second defendant in relation to the second plaintiff in respect of the imputation pleaded in paragraph 14(a) of the third Further Amended Ordinary Statement of Claim (filed 20 May 2005). Reserve question of costs. Re costs in respect of the 7A trial by the first and second plaintiffs against the first defendant to await determination of the motion. First plaintiff to pay the second defendant's costs as in 1 above. Re second plaintiff v second defendant (7A trial costs) to await determination of the action." Rule 36.11, headed "Entry of judgment and orders" provided, inter alia, that any judgment or order of the court was to be entered. A judgment or order was taken to be entered when recorded in the court's computerised court record system unless the court ordered otherwise3. Drs Keramianakis and Smagarinsky filed a notice of appeal, but only as against Regional Publishers. In their amended notice of appeal they stated: "The Appellants appeal against all of the jury findings that imputations pleaded by the Appellants were not conveyed and the verdicts and the Respondent by judgments with costs entered Puckeridge DCJ on 7 August 2006." in favour of The grounds of appeal included complaints that each of the jury's answers which was adverse to the doctors was "perverse, unreasonable and an answer that no reasonable jury properly directed could have given." The doctors also complained that the trial judge's directions to the jury were inadequate and that his Honour had denied procedural fairness by commencing his summing up to the jury and thereby denying the appellants the opportunity to make a foreshadowed reply submission. On 21 December 2007, the Court of Appeal of New South Wales dismissed the appeal4. The Court (Beazley and Basten JJA and Rothman J) divided. Basten JA, with whom Beazley JA agreed, held that there was no right of appeal to the Court of Appeal from a jury verdict in the District Court. Basten JA said5: 3 Rule 36.11(2). 4 Keramianakis v Regional Publishers Pty Limited (2007) 70 NSWLR 395. (2007) 70 NSWLR 395 at 406 [98]. "In relation to a civil jury trial in the District Court, the right of appeal is now limited to an appeal against the judge's judgment or order." The majority went on to hold that if the Court had jurisdiction to entertain the appeal, the jury's answers, adverse to Dr Keramianakis, concerning imputations (b) and (c) should be set aside and a verdict directed and judgment given accordingly6. There were no relevant points of distinction in relation to those imputations between Dr Keramianakis and Dr Smagarinsky. The jury had been led to a distinction based upon an incorrect understanding of the law. That understanding, it was said, followed from confusing directions in relation to identification and the conveying of imputations7. Rothman J dissented on the availability of the appeal. On 13 June 2008, the doctors were granted special leave to appeal from the judgment and order of the Court of Appeal. Regional Publishers filed a cross-appeal and a notice of contention. The appeal came on for hearing on 23 September 2008. At that time counsel for the doctors indicated that he had lately discerned a line of authority, unfavourable to his case, concerning the term "judgments, decrees, orders, and sentences", in s 73 of the Constitution. These authorities might inform argument by analogy about the construction of s 127(1) of the District Court Act 1973 upon which he relied as the source of jurisdiction for the Court of Appeal. As reference to these authorities might be thought to raise a question involving the interpretation of the Constitution, the hearing of the appeal was adjourned to enable notices to be sent to the Attorneys-General of the Commonwealth and the States under s 78B of the Judiciary Act 1903 (Cth). The Attorney-General of the Commonwealth intervened and the Solicitor-General made submissions on his behalf about the operation of s 73 of the Constitution. When the appeal resumed hearing on 3 March 2009, orders were made by consent dismissing Dr Smagarinsky's appeal. Dr Keramianakis did not press his appeal in relation to imputation (a). Regional Publishers no longer pressed its notice of contention. The contention was that the Court of Appeal had wrongly allowed the appellants to raise on appeal matters not raised at the trial. The cross-appeal could only be entertained if special leave was sought8. Special leave was not sought. In any event the cross-appeal was expressed to be from a "holding" of the Court of Appeal that if, contrary to its conclusion, it had jurisdiction, it would have directed a verdict and entered judgment for Dr Keramianakis. This was not a cross-appeal from "a part of the judgment (2007) 70 NSWLR 395 at 406-407 [101]-[105]. (2007) 70 NSWLR 395 at 407 [104]. 8 High Court Rules 2004, r 42.08.4. below"9. As it turned out, the issue was no longer live at the hearing of the appeal as counsel for Dr Keramianakis handed up a minute of orders proposing that if the appeal were successful there should be a re-trial on imputations (b) and (c). In the result, as counsel for Dr Keramianakis put it, the one issue of substance in the case was the question whether or not the New South Wales Court of Appeal had jurisdiction to entertain the appeal from the District Court. Statutory framework The functions of judge and jury in defamation cases conducted under the 1974 Act were divided by s 7A of that Act. The division underpinned the procedure followed at trial in this case10. It was a matter for the court, not the jury, to determine whether allegedly defamatory matter was reasonably capable of carrying the imputation pleaded by the plaintiff and whether the imputation was reasonably capable of carrying a defamatory meaning11. If the court answered either of those questions in the negative then the court was to "enter a verdict for the defendant in relation to the imputation pleaded"12. If the matter was reasonably capable of bearing a defamatory meaning then the section provided13: "the jury is to determine whether the matter complained of carries the imputation and, if it does, whether the imputation is defamatory." Neither s 7A nor any other provisions of the 1974 Act specified what would happen in the event that the jury found, as it did in this case, that the matter complained of by Dr Keramianakis did not carry the imputations which he alleged. The District Court Act 1973, as it stood in August 2006, allowed a party to apply to the District Court for a new trial in the following terms14: 9 High Court Rules 2004, r 42.08.1. 10 The s 7A procedure has a long history which need not be repeated here. The evolution of the respective functions of judge and jury in civil cases and specifically in defamation cases is set out, inter alia, in Lord Devlin's 1956 Hamlyn Lectures: Devlin, Trial by Jury, (1956) esp 92-99; and generally in Thayer, A Preliminary Treatise on Evidence at the Common Law, (1898) at 241-243. 11 1974 Act, s 7A(1). 12 1974 Act, s 7A(2). 13 1974 Act, s 7A(3). 14 District Court Act 1973, s 126. "(1) The Court in its discretion may, after judgment in an action, order that a new trial of the action be had if: the action is tried with a jury and on the day on which the jury gives its verdict in the action a party to the action: in the presence of the other party, or in the absence of the other party but after such notice as the Court thinks reasonable has been given to the other party, makes application for the order β¦ The Court may, before judgment in an action and if no verdict in the action has been entered, order, on sufficient cause being shown, that the hearing of the action be discontinued and that a new trial be had." Section 127(1) of the Act provided for a right of appeal from the District Court to the Supreme Court in the following terms: "A party who is dissatisfied with a Judge's or a Judicial Registrar's judgment or order in an action may appeal to the Supreme Court." Sub-section (2) specified classes of appeal which would lie only by leave of the Supreme Court. None is relevant to the present case. Sub-section (3) provided: "In any other case, an appeal lies as of right." The term "judgment" was defined in s 4(1) of the Act thus: "judgment, in relation to an action, means judgment given or entered up in the action." The term was further elaborated in s 4(2) which provided: "A reference in this Act: to the giving of a judgment is a reference to the recording and delivering of a judgment, not being a judgment under any provision of the civil procedure rules prescribed for the purposes of this paragraph, and to the entering up of a judgment is a reference to the entering up of a judgment in accordance with any provision of the civil procedure rules so prescribed." Section 75A of the Supreme Court Act 1970 (NSW), as it stood in August 2006, provided that appeals from a non-jury trial, whether the trial had been in the District Court or in the Supreme Court, would be by way of rehearing15. Section 102 concerned jury trials in the Supreme Court. It provided that an application for the setting aside of a verdict or judgment, for a new trial or for a variation of debt or damages was to be by way of appeal to the Court of Appeal16. Powers relevant to such an appeal were found in s 10817. Reference should also be made to ss 101, 105, 106 and 107 of the Supreme Court Act 1970. Section 101 provided that an appeal would lie to the Court of Appeal from: any judgment or order of the Court18 in a Division β¦" It did not in terms apply to appeals from the District Court but, like s 127(1) of the District Court Act 1973, the appeal for which it provided was from a "judgment or order". Section 106(1) of the Supreme Court Act 1970 conferred power on the Court of Appeal to set aside a "verdict, finding, assessment or judgment" and to order a new trial on the issue of damages where, because of matters which have occurred since the trial, the amount of damages awarded at the trial is manifestly too high or too low. This section was expressly applied by s 105 to appeals where the appellant "seeks a new trial or the setting aside of a verdict, finding, assessment or judgment β¦ after a trial β¦ with a jury in an action commenced after the commencement of [s 4 of the District Court (Amendment) Act 1975 (NSW)], in the District Court". Section 107 conferred powers on the Court of Appeal to substitute its own assessment of damages for that awarded in the court below and to give such judgment and make such order as the nature of the case requires. None of these powers is of assistance to the resolution of the present case. 15 Supreme Court Act 1970, s 75A(1) and (5). 16 Supreme Court Act 1970, s 102. 17 Section 108 refers to the power of the Court of Appeal to enter a verdict where there has been a trial in the Court with a jury. The relevant right of appeal derives from s 102 of the Supreme Court Act 1970. 18 Note: "the Court" refers to the Supreme Court: Supreme Court Act 1970, s 19(1). Legislative history This appeal turns on the construction of s 127(1) of the District Court Act 1973 as it stood in August 2006. Regional Publishers relied upon the legislative history lying behind ss 126 and 127(1) in support of its proposition that no appeal lay to the Supreme Court in this case. A starting point in the legislative history is s 14 of the County Courts Act 1850 (UK)19. That section provided for appeals on questions of law or admissibility of evidence to the superior courts of Common Law at Westminster. Those Courts could order a new trial or judgment to be entered for either party. Section 14 was the model for s 94 of the District Courts Act 1858 (NSW). That model was followed in s 107 of the District Courts Act 1901 (NSW) and in ss 142 and 145 of the District Courts Act 1912 (NSW). However the latter Act introduced by its s 98 a mechanism whereby a party could apply to the trial judge for a new trial: "Every judgment of any District Court, except as in this Act provided, shall be final and conclusive between the parties, but the judge may β in any case order a new trial to be had upon such terms as he thinks reasonable, and may in the meantime stay the proceedings β¦" The grant of a new trial could not be made merely because the judge disagreed with the jury's verdict. It could be granted on the ground that the verdict was one which no reasonable jury ought to have come to20. In the Second Reading Speech for the Bill which became the District Court Act 1973, the Minister for Justice said, inter alia21: "The Bill will require most applications for new trial to be made to the Supreme Court by way of appeal, leaving the District Court to consider only applications based on consent of the parties, irregularity, or an obviously untenable verdict of a jury." 19 13 & 14 Vic c 61. See generally Clutha Developments Pty Ltd v Barry (1989) 18 NSWLR 86 at 92-93 per Gleeson CJ. 20 Bonthorne, The Practice of the District Courts of New South Wales, (5th ed) (1927) at 110, citing Murdoch v Durning (1893) 14 LR(NSW) 303 and Ewan v Waddell (1891) 8 WN(NSW) 40. 21 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 7 March 1973 at 3362. The provisions of the Bill relating to appeals to the Supreme Court on points of law were to be modernised but not substantially altered in principle. The "An appeal on questions of fact is provided where an injunction is sought or granted; otherwise, in recognition of the importance of the principle of finality in the judgments of a court, there is no appeal on fact, but the Supreme Court may order a new trial if the decision of the District Court judge on fact is unreasonable." Section 126(1) of the District Court Act 1973, as it stood in August 2006, remained as originally enacted insofar as it conferred power to order a new trial of an action tried with a jury. An amendment made in the interim dealing with actions tried without juries is not material for present purposes. Section 127 as enacted in 1973 provided for an application for a new trial to be made to the Supreme Court after judgment in an action where an order had not been made under s 126(1). Such an application was deemed by s 127(3) to be an appeal to which ss 106 and 107 of the Supreme Court Act 1970 applied. As the Court of Appeal said in Clutha Developments Pty Ltd v Barry23: "As a corollary of the concept of the District Court as a court of confined civil jurisdiction, dealing mainly with limited, and originally relatively small, money claims, at least prior to 1975 the scope for strictly appellate review of District Court decisions was fairly narrowly confined. It was evidently not regarded as being in the public interest, or the interests of litigants, to provide parties to District Court actions, which might involve modest amounts of money, with the fullest possible range of avenues of appeal." In 1975 the District Court Act 1973 was amended and a new sub-s (6) added to s 127 which effectively rendered it inapplicable to non-jury matters. A new sub-s (2A) introduced into s 128 conferred a right of appeal from "any ruling, order, direction or decision of the Judge β¦" and so removed the limitation that appeals would lie only on questions of law. The Courts Legislation Further Amendment Act 1995 (NSW) replaced ss 127 and 128 of the District Court Act 1973 with new provisions. The new s 127(1), headed "Right of appeal to Supreme Court", read: 22 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 7 March 1973 at 3362. 23 (1989) 18 NSWLR 86 at 91 per Gleeson CJ. "A party who is dissatisfied with a decision of a Judge may appeal to the Supreme Court." Section 128 provided for a stay of proceedings pending the appeal. The Courts Legislation Amendment Act 1996 (NSW) amended s 127(1) to its present form substituting for the words "decision of a Judge" the words "Judge's judgment or order in an action". A further amendment was effected by the Courts Legislation Amendment Act 2006 (NSW), which applied the right of appeal under s 127(1) to judgments or orders of judicial registrars as well as judges. Following the decision of the Court of Appeal in these proceedings, a new section, s 127A, was enacted by the Courts and Crimes Legislation Amendment Act 2008 (NSW). The new section provided: "(1) Where, in any proceedings in the Court, there is a trial of the proceedings or of any issue in the proceedings with a jury, an application for: the setting aside of a verdict or judgment, or a new trial, or the alteration of a verdict by increasing or reducing any amount of debt, damages or other money, shall be by appeal to the Supreme Court. (2) An appeal under this section lies as of right." Counsel for Regional Publishers asked this Court to revoke the grant of special leave on the basis that s 127A had overcome any jurisdictional difficulty and the matter was therefore no longer one of general importance. The Court refused that application24. Even if the legal principle in issue in the present case were overtaken by the amendment, the case still involved, if the Court of Appeal were in error as to its jurisdiction, a miscarriage of justice. Dr Keramianakis was denied redress for what the Court of Appeal held to be a verdict pronounced by the trial judge upon the basis of answers given by the jury which would have been set aside under the general law had the Court of Appeal had jurisdiction. 24 cf Australian Airlines Ltd v Commissioner of Stamp Duties (Qld) (1988) 62 ALJR 429 at 431; 79 ALR 425 at 429; [1988] HCA 33 where the Court rescinded special leave after a statutory amendment but was of the "firm view" that the appeal would fail in any event. The reasoning of the Court of Appeal In dealing with the question of jurisdiction Basten JA referred to aspects of the legislative history. His Honour's reasoning involved the following steps: The enactment of the new s 127(1) in 1995 provided for an appeal from "a decision of a Judge" when there had been a trial with a jury25. (ii) A judgment entered on the basis of a jury verdict does not itself fall within the description "a decision of a Judge". (iii) A right of appeal was never available in relation to a jury verdict but only from the ruling, order, direction or decision of the judge in point of law or upon a question of evidence. (iv) A challenge to a jury verdict may be made by way of application for a new trial prior to entry of judgment and was available under s 12626. The leave requirement imposed by s 127(2) in respect of interlocutory and other classes of judgment or order does not suggest that the appeal right extends to an appeal against a jury verdict. (vi) Even if the right of appeal exists, s 75A conferred no power on the Supreme Court with respect to such appeal. If it was not a quantum appeal, no relevant power could be found in ss 105-107. Rothman J dissented on the jurisdictional question. His Honour saw nothing in the history of s 127, nor in the absence of specific remedial powers, to qualify the right of appeal which it granted27. The dichotomy between an application for a new trial on the one hand and an appeal on the other, which preceded the 1995 amendments, did not lead to the conclusion that s 127 was not intended to deal with jury verdicts28. His Honour accepted, as Basten JA had concluded, that there was no specific power in the Supreme Court Act 1970 in relation to appeals from a judgment of a District Court judge sitting with a jury. His Honour, however, referred to general powers conferred on the Supreme 25 (2007) 70 NSWLR 395 at 404 [88]. 26 (2007) 70 NSWLR 395 at 404 [89]. 27 (2007) 70 NSWLR 395 at 408 [111]. 28 (2007) 70 NSWLR 395 at 409 [116]. Court and in particular ss 23, 63 and 91 of the Supreme Court Act 1970 and s 90 of the Civil Procedure Act 2005 (NSW). Whether the right of appeal existed in this case The legislative history to which reference is made above and upon which reliance was placed by the majority in the Court of Appeal and by Regional Publishers ultimately assists little in the resolution of this appeal. The language of s 127(1) following the 1995 amendments was apt to confer a right of appeal against judgments or orders which was unqualified by the existence of a procedure for seeking a new trial under s 126. The absence of any power expressly applicable to the disposition of an appeal under s 127 arising out of a trial with a jury in the District Court does not alter that conclusion. The absence of an express power in relation to a particular subject matter or class of case is not a basis for limiting a grant of jurisdiction which would otherwise apply to that subject matter. The Supreme Court, by virtue of s 22 of the Supreme Court Act 1970, was continued "as formerly established as the superior court of record in New South Wales". As formerly established, it was authorised to do the same things that could be done "by or before Her Majesty's Courts at Westminster or the respective Judges thereof in the administration of justice"29. The grant of jurisdiction to the Court so continued attracts the "inherent jurisdiction", that is to say the inherent power necessary to the effective exercise of the jurisdiction granted. As Dawson J said in Grassby v The Queen30 it is the general responsibility of a superior court of unlimited jurisdiction for the administration of justice which gives rise to that inherent power. The respondent drew attention to Nominal Defendant v Hook31, in which Windeyer J said that the policy of ss 72 and 94 of the District Courts Act 1858 (NSW) and of ss 98 and 142 of the District Courts Act 1912 (NSW) was that applications for new trials and for setting aside judgments were to be made to the District Court, not to a superior court, and were to be disposed of finally in the District Court unless they involved some question of law. Basten JA saw that position as continuing from the District Court Act 1973 onwards. In this Court the respondent seemed to accept that the District Court Act 1973 had altered the 29 Supreme Court and Circuit Courts Act 1900 (NSW), s 16. 30 (1989) 168 CLR 1 at 16-17; [1989] HCA 45; and referred to with approval in Pelechowski v Registrar, Court of Appeal (NSW) (1999) 198 CLR 435 at 451 [50] per Gaudron, Gummow and Callinan JJ; [1999] HCA 19. 31 (1962) 113 CLR 641 at 656; [1962] HCA 50. pre-existing position, but submitted that the position as described by Windeyer J had been reintroduced in 1995. However, the words of s 127(1) are clear. They confer a right of appeal against a judgment or order of a judge made after a trial with a jury in the District Court. Decisions relating to s 73 of the Constitution do not affect this conclusion. In Musgrove v McDonald32 the appeal to this Court from the Supreme Court of South Australia followed a directed verdict for defendants in civil proceedings upon which judgment had been entered by the judge. The Court referred to the settled rule of the Privy Council that an appeal did not lie from a verdict of a jury or from a judgment of the Court founded upon it unless there had been a previous application to the Supreme Court for a new trial and that the provisions of the Constitution conferring appellate jurisdiction upon the High Court should be read in the light of that rule. The Court said33: "[I]f they are so read, an application for a new trial after verdict, upon whatever ground, does not fall within the words 'appeals from all judgments decrees orders and sentences' of Federal Courts or Supreme Courts." However the underlying principle seemed to be reflected in the following passage34: "The verdict in the present case, which was a general verdict for the defendants, must be read as if the specific facts which established their freedom from liability had been found by the jury. By those findings this Court is bound, and, as upon them the judgment is right, the appeal fails." The underlying principle suggests not want of jurisdiction in such a case, but want of power. That view is supported by the observations of Dixon J in McDonnell & East Ltd v McGregor35: "Decisions of this court, which are based upon sec 73 of the Constitution, have established that, although an appeal does lie from every judgment, decree, order, or sentence of a Supreme Court, yet in deciding an appeal from a judgment founded on a jury's verdict or findings this Court stands in the position which the court below stood at the time when it was 32 (1905) 3 CLR 132; [1905] HCA 50. 33 (1905) 3 CLR 132 at 147. 34 (1905) 3 CLR 132 at 149. 35 (1936) 56 CLR 50 at 53-54; [1936] HCA 28. pronounced. If the court below takes a general verdict or findings from a jury and if, after having done so, it has no authority under the law governing its procedure to interfere with the verdict or findings of the jury or to disregard them but is required to give effect to them, then this court stands in a like position and cannot go behind the verdict or findings." The appellate function conferred on this Court by s 73 authorises it to determine the correctness or otherwise of the decision under appeal in the light of the evidence and issues as they were before the court whose decision is in question36. The jurisdiction to hear and determine appeals under s 73 does not exceed the jurisdiction or capacity of the court appealed from37. The cases about the scope of this Court's jurisdiction under s 73 have ultimately nothing to say about the scope of the statutory jurisdiction conferred upon the Court of Appeal by s 127(1) or its powers in the exercise of that jurisdiction. The jury's answers to the questions put to it at trial were fatal to the action brought by Dr Keramianakis. Section 7A of the 1974 Act made no provision for the orders which might be made in such a case. It was not necessary that it should. On the jury's answers, Dr Keramianakis could not succeed in his action. The trial judge pronounced what he called "Verdict for the second defendant β¦ in respect of the claim by the first plaintiff". He also made the order "First plaintiff to pay second defendant's costs". This was not merely a recording of the jury's answers. The answers themselves did not dispose of the action. The "verdict for the second defendant" pronounced by the trial judge was the legal equivalent of the dismissal of Dr Keramianakis' action. Although that "verdict" was an inevitable outcome of the jury's answers, the judge had to make the legal judgment, as he correctly did, that it was the inevitable result. The necessity of the judge making an order or judgment is underlined by s 90(1) of the Civil Procedure Act 2005, which provides that a court is required, "at or after trial or otherwise as the nature of the case requires, to give such judgment or make such order as the nature of the case requires". The order for costs reinforces the characterisation of the "verdict for the second defendant" as a judge's "judgment or order". Conclusion The appeal should be allowed with costs. The costs should include the costs of the first hearing. Regional Publishers submitted that there was no 36 Mickelberg v The Queen (1989) 167 CLR 259 at 274 per Brennan J, 298 per Toohey and Gaudron JJ; [1989] HCA 35. 37 Victorian Stevedoring and General Contracting Co Pty Ltd v Dignan (1931) 46 CLR 73 at 109 per Dixon J; [1931] HCA 34. constitutional question in the appeal warranting the issue of s 78B notices. Nevertheless it responded to the submissions on the s 73 case made on behalf of Dr Keramianakis. It relied upon Musgrove v McDonald38 and McDonnell & East Ltd v McGregor39 as consistent with its general argument. It conceded, however, that they were not determinative. The orders should be in the following terms: Appeal allowed with costs. Cross-appeal dismissed. Set aside the orders of the New South Wales Court of Appeal of 21 December 2007. In place thereof order that: the first appellant's appeal be allowed with costs; (b) Order 1 and the second sentence of Order 3 of the orders made by the trial judge on 7 August 2006 be set aside; there be a new trial in relation to the imputations set out in paragraphs (b) and (c) of paragraph 13 of the third amended statement of claim, limited to the issues of whether those the newspaper article and are imputations are carried by defamatory. 38 (1905) 3 CLR 132. 39 (1936) 56 CLR 50. GUMMOW J. The appeal should be allowed and orders made as proposed by the Chief Justice. I agree with the reasons of the Chief Justice. Hayne HAYNE J. I agree with French CJ. HEYDON J. I agree with French CJ. Crennan CRENNAN J. I have had the advantage of reading in draft the reasons for judgment of the Chief Justice. I agree with the orders proposed by the Chief Justice, for the reasons given by his Honour. KIEFEL J. I agree with French CJ. Bell BELL J. I agree with French CJ. |
HIGH COURT OF AUSTRALIA Matter No M29/2013 AND APPELLANT THE QUEEN & ANOR RESPONDENTS Matter No M25/2013 CHAFIC ISSA AND APPELLANT THE QUEEN & ANOR RESPONDENTS Elias v The Queen [2013] HCA 31 27 June 2013 M29/2013 & M25/2013 ORDER Matter No M29/2013 Appeal dismissed. Matter No M25/2013 Appeal dismissed. On appeal from the Supreme Court of Victoria Representation P F Tehan QC with D D Gurvich for the appellant in M29/2013 (instructed by Emma Turnbull Criminal Law) L C Carter for the appellant in M25/2013 (instructed by C. Marshall & Associates) G J C Silbert SC with B L Sonnet for the first respondent in both matters (instructed by Solicitor for Public Prosecutions (Vic)) Submitting appearance for the second respondent in both matters Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Elias v The Queen Criminal law β Sentence β Where offence carries higher maximum penalty than other offence for which offender could have been prosecuted β Whether sentencing judge required to take lesser maximum penalty for other offence into account as mitigating factor β Whether R v Liang (1995) 124 FLR 350 should be followed. Criminal law β Respective roles of prosecution and sentencing judge β Whether appropriate for sentencing judge to have regard to other offence which judge considers as appropriate or more appropriate to facts of case. Sentencing Act 1991 (Vic), s 5(1), (2). FRENCH CJ, HAYNE, KIEFEL, BELL AND KEANE JJ. These appeals were heard together. They raise for consideration the existence and scope of a claimed common law principle of sentencing. The principle, stated by the Court of Appeal of the Supreme Court of Victoria in R v Liang, requires a sentencing judge to take into account in mitigation of sentence that there is a "less punitive offence" on which the prosecution could have proceeded and which is "as appropriate or even more appropriate" to the facts than the charge for which the offender is being sentenced1. The appellants and a man named Bassillios Pantazis pleaded guilty before the Supreme Court of Victoria to offences which included in each case a count of attempting to pervert the course of justice. This is a common law offence for which the Crimes Act 1958 (Vic) provides a maximum penalty of imprisonment for 25 years2. The appellants and Pantazis were each sentenced to eight years' imprisonment for this offence3. The conduct constituting the attempted perversion of justice consisted of acts of assistance given to a fugitive who had been sentenced for a Commonwealth offence. Under Commonwealth law, an (1995) 124 FLR 350 at 355 per Winneke P, Ormiston JA and Crockett AJA agreeing. 2 Crimes Act 1958 (Vic), s 320. Issa pleaded guilty before King J to counts in a presentment charging him with (i) attempting to pervert the course of justice, (ii) trafficking in a large commercial quantity of a drug of dependence under s 71 of the Drugs, Poisons and Controlled Substances Act 1981 (Vic), (iii) dealing with proceeds of crime contrary to s 194(2) of the Crimes Act 1958 (Vic), and (iv) possession of cannabis under s 73 of the Drugs, Poisons and Controlled Substances Act 1981 (Vic). On 24 November 2009, he was sentenced to an aggregate term of 12 years and six months' imprisonment with a non-parole period of eight years and six months. On 5 September 2011, Elias was sentenced by Whelan J for (i) attempting to pervert the course of justice, (ii) trafficking in a large commercial quantity of a drug of dependence contrary to s 71 of the Drugs, Poisons and Controlled Substances Act 1981 (Vic), (iii) dealing with proceeds of crime contrary to s 194(2) of the Crimes Act 1958 (Vic), (iv) possession of cannabis under s 73 of the Drugs, Poisons and Controlled Substances Act 1981 (Vic), and (v) three counts of possession of an unregistered longarm firearm under s 6A(1) of the Firearms Act 1996 (Vic). Elias was sentenced to an aggregate term of 11 years' imprisonment with a non-parole period of eight years. Hayne Bell attempt to pervert the course of justice in relation to the judicial power of the Commonwealth is an offence which carries a maximum penalty of imprisonment for five years4. The appellants and Pantazis appealed to the Court of Appeal of the Supreme Court of Victoria (Warren CJ, Redlich, Hansen and Osborn JJA and Curtain AJA) against the severity of their sentences. They submitted on the authority of Liang that it was an error not to take into account the lesser maximum penalty for the Commonwealth offence in mitigation of their sentences. The first respondent submitted that the Sentencing Act 1991 (Vic) ("the Sentencing Act") does not permit a judge sentencing for an offence under State law to have regard to some other maximum penalty prescribed for a Commonwealth offence. That submission was accepted. The Court of Appeal rejected the appellants' alternative submission that their sentences should have been mitigated to take into account that they could have been prosecuted as accessories after the fact under State law5. The maximum penalty in that event would also have been five years' imprisonment. The Court of Appeal considered that maximum penalty to be inadequate to punish the appellants for their participation in a sophisticated and prolonged criminal combination which had struck at the heart of the administration of criminal justice6. How the State provisions about accessories after the fact could have been engaged when the alleged acts of assistance were given to a fugitive who not only had been sentenced, but had been sentenced for a Commonwealth offence, was not explored. The appeals were dismissed. The appellants appeal by special leave. Pantazis died before the hearing and his appeal has been discontinued. The appellants rely on a single ground which asserts error in the failure to apply the principle stated in Liang. They contend that the Court of Appeal was wrong to confine the application of the principle to offences within the same jurisdiction. Alternatively, they maintain 4 Crimes Act 1914 (Cth), s 43. Schedule 2, item 15 of the Law and Justice Legislation Amendment (Identity Crimes and Other Measures) Act 2011 (Cth) amended s 43 to increase the maximum penalty to imprisonment for 10 years. 5 Crimes Act 1958 (Vic), s 325. 6 Pantazis v The Queen (2012) 268 FLR 121 at 147 [92]. Hayne Bell that the Court of Appeal was wrong not to have regard to the maximum penalty for the less serious State offence7. The Liang "principle" has been applied by the Court of Appeal of Victoria on a number of occasions. The first respondent's challenge to the principle in the Court of Appeal was confined to its application to Commonwealth offences. By notice of contention in this Court, the first respondent submits that Liang does not state a principle of sentencing known to the law. For the reasons to be given, the first respondent's contention must be accepted and the appeals must be dismissed. Factual background The appellants' offences arose out of their association with a man named Antonios (Tony) Mokbel. Mokbel was the principal of a criminal enterprise known as "The Company", which was engaged in the manufacture and distribution of very large quantities of methylamphetamine. The appellants' convictions for drug trafficking offences related to their activities on behalf of "The Company". In March 2006, Mokbel was on trial in the Supreme Court of Victoria on a presentment that charged him with drug trafficking contrary to s 233B(1)(b) of the Customs Act 1901 (Cth). On 20 March 2006, he failed to appear at his trial and a warrant was issued for his arrest. The trial continued in his absence. On 31 March 2006, Mokbel was convicted and sentenced in his absence. He remained at large until his arrest in Greece on 5 June 2007. Throughout this period Mokbel continued to control his drug manufacturing and distribution business. Mokbel enlisted the assistance of the appellants in his successful attempt to flee the jurisdiction. The appellants jointly owned a property in Bonnie Doon, Victoria which they used to hide Mokbel until October 2006. They facilitated the supply of a substantial quantity of cash to Mokbel. He was then moved to Elphinstone, Victoria before being transported to Fremantle, Western Australia by Pantazis. The appellants met up with Mokbel and Pantazis on the trip. Issa 7 The appellants did not controvert the proposition in the judgment of the Court of Appeal that the sentencing judge was exercising the judicial power of the State. The question whether the sentencing judge was exercising federal jurisdiction or the judicial power of the State was not argued on the appeals to this Court. Hayne Bell booked and paid for their accommodation in South Australia and on arrival in Western Australia. On 11 November 2006, Mokbel left Fremantle on a yacht bound for Greece. Issa was involved in engaging a crew to refit the yacht and sail it to Greece. Elias also procured equipment for the yacht. In February 2007, Issa assisted in the transfer of $120,000 in cash and two passports to Mokbel. A forged passport based on the documents supplied by Issa was found on Mokbel at the time of his arrest in Greece. A submission based on Liang was unsuccessfully advanced at Pantazis' sentencing hearing8. It was submitted that he might have been charged with attempting to pervert the course of justice under the Commonwealth statute9 or with being an accessory after the fact under the State statute10. He asked the sentencing judge to take into account the lesser maximum penalty for those offences as a guide to the appropriate range of sentence. The prosecutor accepted that the offence under the State statute could have been charged but submitted that, having regard to the extent and nature of the offending conduct, the appropriate offence was the one on which the prosecution had proceeded. The prosecutor did not address the submission respecting the Commonwealth offence. A submission based on Liang was also unsuccessfully advanced at Elias' sentencing hearing11. The submission was confined to the Commonwealth offence as a guide to the appropriate range of sentence. A submission based on Liang was not made at Issa's sentencing hearing, but it was made to, and considered on its merits by, the Court of Appeal. Some reference should be made here to Liang and the other cases on which the appellants rely for the existence of the suggested principle. The applicants in Liang were jointly presented before the County Court of Victoria on counts arising out of a scheme of dishonesty against the interests of 8 R v Pantazis [2011] VSC 54 at [27] and fn 2. 9 Crimes Act 1914 (Cth), s 43. 10 Crimes Act 1958 (Vic), s 325. 11 R v Elias [2011] VSC 423 at [27] and fn 5. Hayne Bell Telecom, a Commonwealth authority. Each was charged with dishonestly obtaining a financial advantage under State law12 and with defrauding a carrier of a charge payable for a telecommunications service under Commonwealth law13. The State offence had a maximum penalty of 10 years' imprisonment. The Commonwealth offence had a maximum penalty of five years' imprisonment. The applicants successfully appealed to the Court of Appeal against the severity of the sentence imposed for the State offence in circumstances in which it was held that the sentencing judge had proceeded on a misconceived basis. However, Winneke P, giving the leading judgment, went on to say14: "For my part, I think there is much substance in the argument that the applicants were exposed to an injustice by being charged with the offence created by s 82(1) of the Crimes Act (Vic). This injustice flowed β¦ because that charge (exposing the applicants, as it did, to higher penalties) did not, in my view, appropriately fit the nature of the applicants' conduct." His Honour stated the principle in these terms15: "although it is for the prosecuting authority in its absolute discretion to determine which particular charge it will lay against an accused person, it is nonetheless relevant and proper for the judge on sentence to take into account as a relevant sentencing principle the fact that there was another and less punitive offence which not only could have been charged but indeed was as appropriate or even more appropriate to the facts alleged against the accused." (emphasis added) Winneke P traced the principle to the decision of the South Australian Supreme Court in Scott v Cameron16. The appellant in that case had been sentenced to a term of three months' imprisonment following conviction for social security frauds charged under s 29C of the Crimes Act 1914 (Cth). It was 12 Crimes Act 1958 (Vic), s 82(1). 13 Crimes Act 1914 (Cth), s 85ZF(a). 14 R v Liang (1995) 124 FLR 350 at 354. 15 R v Liang (1995) 124 FLR 350 at 355. 16 (1980) 26 SASR 321. Hayne Bell successfully contended on appeal before White J that the offences should more appropriately have been charged under the Social Services Act 1947 (Cth). White J acknowledged that the prosecution had "an absolute discretion" whether to lay the complaints under the Crimes Act or the Social Services Act. He went on to say that the court's discretion was not to be "fettered" by the prosecutor's choice, at least in a case in which the prosecution could equally appropriately have been brought under the other provision17. Winneke P also took into account the observations made by Drummond J in R v Whitnall18. Drummond J, joining in the making of orders dismissing a Crown appeal against the inadequacy of sentence for a fraud offence under s 29D of the Crimes Act 1914 (Cth), noted that the respondent could have been prosecuted for other offences which might have been dealt with summarily. His Honour acknowledged that the selection of the charge is "solely for the prosecuting authority" but he, too, said that the court was not bound to treat the prosecutor's decision as a "fetter" requiring the court to impose a heavier sentence than the court considered to be appropriate19. The first time the Liang principle was applied by the Victorian Supreme Court appears to have been in R v Young20. The applicant had pleaded guilty to attempted perversion of the course of justice. On appeal against the severity of a sentence of two and a half years' imprisonment, Starke J identified as a "most significant matter"21 the equivalent Commonwealth offence was two years' imprisonment. His Honour said that it was appropriate the Commonwealth offence albeit that in "special circumstances" a judge might impose a sentence greater than two years for the common law offence22. the maximum penalty for the maximum penalty into account take that for 17 Scott v Cameron (1980) 26 SASR 321 at 325. 18 R v Liang (1995) 124 FLR 350 at 354-355, citing (1993) 42 FCR 512 at 520. 19 R v Whitnall (1993) 42 FCR 512 at 520. 20 Unreported, Court of Criminal Appeal of Victoria, 2 December 1982. 21 R v Young unreported, Court of Criminal Appeal of Victoria, 2 December 1982 at 22 R v Young unreported, Court of Criminal Appeal of Victoria, 2 December 1982 at Hayne Bell The Victorian Court of Appeal again considered the Liang principle in R v Vellinos23. Winneke P, again giving the leading judgment, described the Liang principle as a "little-used, but none the less significant, sentencing principle of fairness"24. In that case it was held that the sentencing judge did not err in refusing to take into account the maximum penalty for lesser offences which were not more appropriate to the extent and nature of the offending conduct25. In R v McEachran, Redlich JA was critical of Vellinos for placing a gloss on the Liang principle by requiring that the alternative offence be "more appropriate" than the offence charged26. In R v El Helou, the New South Wales Court of Criminal Appeal rejected a contention that in sentencing for a New South Wales offence the Court should take into account the lesser penalty for a Commonwealth offence for which the appellant could have been, but was not, charged27. The Court did not refer to Liang or the other authorities that have applied the approach in Liang. It rejected the invitation to consider the lesser maximum penalty for the Commonwealth offence as a matter of principle. The New South Wales Court of Criminal Appeal has since followed El Helou28. The Sentencing Act The sentencing of offenders in Victoria is subject to the Sentencing Act. The Sentencing Act contains an exhaustive statement of the purposes for which sentences may be imposed in s 5(1): to punish the offender to an extent and in a manner which is just in all of the circumstances; or 23 [2001] VSCA 131. 24 R v Vellinos [2001] VSCA 131 at [11]. 25 R v Vellinos [2001] VSCA 131 at [11]. 26 R v McEachran (2006) 15 VR 615 at 636 [51]. 27 R v El Helou (2010) 267 ALR 734 at 750 [90] per Allsop P, Grove and Hislop JJ agreeing. 28 Standen v Commonwealth Director of Public Prosecutions (2011) 254 FLR 467 at 478 [29] per Hodgson JA, Adams and Hall JJ agreeing. Hayne Bell to deter the offender or other persons from committing offences of the same or a similar character; or to establish conditions within which it is considered by the court that the rehabilitation of the offender may be facilitated; or to manifest the denunciation by the court of the type of conduct in which the offender engaged; or to protect the community from the offender; or a combination of two or more of those purposes." Section 5(2) contains a non-exhaustive list29 of the matters that a court must have regard to in sentencing an offender. Relevantly, they include: the maximum penalty prescribed for the offence; and current sentencing practices; and the nature and gravity of the offence; and the presence of any aggravating or mitigating factor concerning the offender or of any other relevant circumstances." The Court of Appeal In this case a bench of five judges was constituted to consider the scope and nature of the principle in Liang30. The Court of Appeal said that the principle serves to ensure that the exercise of the prosecutorial discretion does not "constrain the [c]ourt's sentencing discretion" with the result that the court is required "to impose a heavier sentence than it would regard as appropriate"31. 30 Pantazis v The Queen (2012) 268 FLR 121 at 124 [3]. 31 Pantazis v The Queen (2012) 268 FLR 121 at 129-130 [28], citing R v Whitnall (1993) 42 FCR 512 at 520 per Drummond J. Hayne Bell The Court of Appeal approved Redlich JA's statement of the rationale for the principle in McEachran32: "[It is] part of a broader principle requiring fairness in the sentencing process. Consistency in sentencing is a mechanism by which fairness in the sentencing process is to be achieved. It requires that the court should strive to impose similar punishment for similar offences committed by offenders in similar circumstances. Conversely, disparity in sentencing can only be justified if there are acceptable and convincing grounds for differentiating between offences or offenders. Unfairness will arise where there is an inconsistent application of legal principles." The Court of Appeal agreed with the New South Wales Court of Criminal Appeal that it is contrary to principle when sentencing for a State offence to take into account that the Commonwealth Parliament has prescribed a lesser maximum sentence for an offence with which the offender could have been charged33. It considered that the Liang principle should be confined to offences of differing seriousness within the same jurisdiction34. Subject to this confinement, the Court of Appeal said that the Liang principle is consistent with the Sentencing Act. The requirement to have regard to the maximum penalty for the offence (s 5(2)(a)) was said not to be inconsistent with also having regard to the maximum penalty for a "more appropriate less punitive offence"35 as a relevant circumstance (s 5(2)(g))36. This approach was suggested to conform to the requirement under s 5(2)(b) to have regard to current sentencing practice as well as serve the purpose of imposing "just punishment" under s 5(1)(a)37. 32 Pantazis v The Queen (2012) 268 FLR 121 at 130 [28], citing (2006) 15 VR 615 at 33 Pantazis v The Queen (2012) 268 FLR 121 at 138-139 [56]-[58]. 34 Pantazis v The Queen (2012) 268 FLR 121 at 139 [57]. 35 Pantazis v The Queen (2012) 268 FLR 121 at 139-140 [59]. 36 Pantazis v The Queen (2012) 268 FLR 121 at 134 [41]. 37 Pantazis v The Queen (2012) 268 FLR 121 at 139-140 [59]. Hayne Bell The parties' submissions The appellants submit that the principle applied in Liang is one that has been recognised for more than 30 years38 and applied by courts in a number of Australian jurisdictions39. They submit that it is based on considerations of fairness and equal justice of the kind recognised in the joint reasons in Green v The Queen40. They acknowledge that those statements were made in an analysis of the principle of parity in sentencing. However, in their submission, the same considerations are raised by the circumstances of their cases. They say that the course of justice that they attempted to pervert was in relation to the judicial power of the Commonwealth and they ask why their sentences should not be consistent with the sentencing of offenders for the Commonwealth offence. The first respondent contends that it is contrary to principle for a judge to sentence on a view that the prosecutor should have preferred a count for a lesser offence. In this respect, the Liang principle is said to be subversive of prosecutorial independence41. Compliance with the statutory injunction to have regard to the maximum penalty is said to be inconsistent with also having regard to the maximum penalty for a different, less serious, offence. Sentencing under the Sentencing Act Each appellant pleaded guilty to the common law offence of attempting to pervert the course of justice. By that plea, each appellant admitted all of the elements of that offence. It was the duty of the sentencing judge to impose sentence for that offence. The sentencing of offenders in Victoria is subject to the governing principles contained in the Sentencing Act. As earlier noted, the statutory statement of the matters that the court must have regard to in determining the sentence is not exhaustive. It may be accepted that, subject to 38 Scott v Cameron (1980) 26 SASR 321; R v Young unreported, Court of Criminal Appeal of Victoria, 2 December 1982. 39 R v Whitnall (1993) 42 FCR 512; Asfoor v The Queen [2005] WASCA 126; R v Gordon; Ex parte Director of Public Prosecutions (Cth) [2011] 1 Qd R 429. 40 (2011) 244 CLR 462 at 472-473 [28] per French CJ, Crennan and Kiefel JJ; [2011] HCA 49. 41 Likiardopoulos v The Queen (2012) 86 ALJR 1168 at 1177 [37] per Gummow, Hayne, Crennan, Kiefel and Bell JJ; 291 ALR 1 at 11; [2012] HCA 37. Hayne Bell contrary statutory any proportionality42, totality43 and parity44 apply in the sentencing of offenders under Victorian law. However, it should not be accepted that Liang states a principle of that kind. law principles intention, common such A constraint on the sentencing discretion? It will be recalled that the Court of Appeal said that the Liang principle serves to ensure that the prosecutor's selection of the charge does not "constrain the [c]ourt's sentencing discretion" with the result that the court is required to "impose a heavier sentence" than the court considers to be appropriate45. Implicit in that statement is the idea that the court sentences on its assessment of the offending conduct and not for the offence. How else could it be relevant to take into account the maximum penalty for a different offence for which the offender could have been, but was not, convicted? The starting point in any consideration of the imposition of criminal punishment must be that it is imposed for the offence for which the offender has been convicted. If it is right for the judge to take into account the circumstance that the offender's conduct might have resulted in conviction for a less serious offence, it is difficult to see why as a matter of principle the judge should not take into account facts disclosing a circumstance of aggravation that could have been, but was not, charged46. 42 Veen v The Queen [No 2] (1988) 164 CLR 465; [1988] HCA 14. 43 Mill v The Queen (1988) 166 CLR 59; [1988] HCA 70. 44 Lowe v The Queen (1984) 154 CLR 606; [1984] HCA 46; Green v The Queen (2011) 244 CLR 462. 45 Pantazis v The Queen (2012) 268 FLR 121 at 129-130 [28], citing R v Whitnall (1993) 42 FCR 512 at 520 per Drummond J. 46 R v De Simoni (1981) 147 CLR 383; [1981] HCA 31, in which Gibbs CJ said at "the general principle that the sentence imposed on an offender should take account of all the circumstances of the offence is subject to a more fundamental and important principle, that no one should be punished for an offence of which he has not been convicted. β¦ The combined effect of the two principles, so far as it is relevant for present purposes, is that a judge, in imposing sentence, is entitled to consider all the conduct of the accused, including that which would aggravate the offence, but cannot take into (Footnote continues on next page) Hayne Bell Recognition that the court is sentencing the offender for the offence does not mean that the court is engaged in a mechanical exercise with a predetermined range of outcomes47. The suggestion that the court's sentencing discretion is subject to constraint requires examination. Plainly enough, the "constraint" on the court's discretion that is said to arise from the exercise of the prosecutorial discretion is the maximum penalty for the offence charged. The maximum penalty is one of many factors that bear on the ultimate discretionary determination of the sentence for the offence48. It represents the legislature's assessment of the seriousness of the offence49 and for this reason provides a sentencing yardstick. Commonly the maximum penalty invites comparison between the case with which the court is dealing and cases falling within the category of the "worst case"50. As explained in Markarian v The Queen, for these reasons careful attention is almost always required to the maximum penalty51. However, this is not to suggest that consideration of the maximum penalty will necessarily play a decisive role in the final determination. As also explained in Markarian, in some instances β as where the maximum sentence was fixed at a very high level in the 19th century β reference to it may be of little relevance52. As this Court has explained on more than one occasion, the factors bearing on the determination of sentence will account circumstances of aggravation which would have warranted a conviction for a more serious offence." 47 Weininger v The Queen (2003) 212 CLR 629 at 638 [24] per Gleeson CJ, McHugh, Gummow and Hayne JJ; [2003] HCA 14; Engert (1995) 84 A Crim R 67 at 68 per 48 Sentencing Act, s 5(2). 49 Muldrock v The Queen (2011) 244 CLR 120 at 133 [31]; [2011] HCA 39. 50 Ibbs v The Queen (1987) 163 CLR 447 at 451-452; [1987] HCA 46; Markarian v The Queen (2005) 228 CLR 357 at 372 [31] per Gleeson CJ, Gummow, Hayne and Callinan JJ; [2005] HCA 25. 51 (2005) 228 CLR 357 at 372 [31] per Gleeson CJ, Gummow, Hayne and 52 (2005) 228 CLR 357 at 372 [30] per Gleeson CJ, Gummow, Hayne and Callinan JJ, citing Stockdale and Devlin, Sentencing, (1987), pars 1.16-1.18. Hayne Bell frequently pull in different directions53. It is the duty of the judge to balance often incommensurable factors and to arrive at a sentence that is just in all of the circumstances. The administration of the criminal law involves individualised justice, the attainment of which is acknowledged to involve the exercise of a wide sentencing discretion54. It is wrong to suggest that the court is constrained, by reason of the maximum penalty, to impose an inappropriately severe sentence on an offender for the offence for which he or she has been convicted. Consistency and parity In exercising the sentencing discretion, the judge must act in accordance with statutory and any applicable common law principles and in a manner that is consonant with reasonable consistency. The concept of consistency in this context is discussed in Hili v The Queen55. The joint reasons approved Gleeson CJ's statement in Wong v The Queen56: "All discretionary decision-making carries with it the probability of some degree of inconsistency. But there are limits beyond which such inconsistency itself constitutes a form of injustice. The outcome of discretionary decision-making can never be uniform, but it ought to depend as little as possible upon the identity of the judge who happens to hear the case. Like cases should be treated in like manner. The administration of criminal justice works as a system; not merely as a multiplicity of unconnected single instances. It should be systematically 53 Veen v The Queen [No 2] (1988) 164 CLR 465 at 476 per Mason CJ, Brennan, Dawson and Toohey JJ; Pearce v The Queen (1998) 194 CLR 610 at 624 [46] per McHugh, Hayne and Callinan JJ; [1998] HCA 57; AB v The Queen (1999) 198 CLR 111 at 156 [115] per Hayne J; [1999] HCA 46; Ryan v The Queen (2001) 206 CLR 267 at 283-284 [49] per McHugh J, 307 [136] per Hayne J; [2001] HCA 21. 54 House v The King (1936) 55 CLR 499 at 503 per Starke J; [1936] HCA 40; Engert (1995) 84 A Crim R 67 at 68 per Gleeson CJ; Ryan v The Queen (2001) 206 CLR 267 at 283-284 [49] per McHugh J; Wong v The Queen (2001) 207 CLR 584 at 612 [77] per Gaudron, Gummow and Hayne JJ; [2001] HCA 64. 55 (2010) 242 CLR 520; [2010] HCA 45. 56 Hili v The Queen (2010) 242 CLR 520 at 535 [47], citing (2001) 207 CLR 584 at Hayne Bell fair, and that involves, amongst other things, reasonable consistency." (emphasis added in Hili) The consistency of which Gleeson CJ was speaking and which is the subject of Hili is consistency in sentencing for an offence. Offences have differing elements and differing maximum penalties. These differences form part of the constellation of factors taken into account in the determination of the appropriate sentence. As consistency requires that like cases be treated alike and different cases differently, it does not promote consistency to reduce an appropriate sentence for an offence to take into account the lesser maximum penalty for a different offence. The invocation of parity in support of the Liang principle is also misconceived. Parity is concerned with the equal treatment of co-offenders. As Green v The Queen explains, the principle is not confined to co-offenders in the strict sense. It has application in the sentencing of persons involved in the same criminal enterprise57. The norm of equality58 discussed in Green v The Queen is not disturbed by sentencing an offender for the offence for which he or she has been convicted and not by reference to a different, less serious, offence which the court considers to be more appropriate to the offending conduct. Consistency with the mandate of s 5(2)(a) The appellants submit that there is no inconsistency in requiring a sentencing judge to take into account both the maximum penalty for the offence charged and, where appropriate, the maximum penalty for a lesser offence. In such a case the lesser maximum penalty is said to be an additional yardstick. However, if the principle is invoked to prevent the perceived unfairness of prosecuting the offender for an offence having a higher maximum penalty, it must surely follow that in redressing the unfairness the court treats the lesser maximum penalty as the effective maximum. The point is illustrated by the statements in R v Young59 on which the appellants rely. In that case, it will be 57 (2011) 244 CLR 462 at 473-474 [30] per French CJ, Crennan and Kiefel JJ. 58 Green v The Queen (2011) 244 CLR 462 at 472-474 [28]-[30] per French CJ, 59 Unreported, Court of Criminal Appeal of Victoria, 2 December 1982. Hayne Bell recalled, the maximum penalty for the lesser offence was said to apply in all save "special circumstances"60. The fact that it is possible to identify another offence having a lesser maximum penalty which might have been charged does not make the decision to prosecute for the offence charged unjust. Nor is there substance in the appellants' complaint that the sentencing judge in each case was constrained to impose an excessive sentence as the result of the prosecutor's decision to proceed with the common law count. In a case in which an offender's conduct is of a minor character, the sentencing judge is not constrained to impose a lengthy sentence because the common law offence has a high maximum penalty. In the appellants' cases, the sentencing judges determined that the nature and extent of their involvement in a scheme which enabled Mokbel to evade justice for many months called for sentences of considerable severity (albeit less than one third of the maximum). There is no good reason in principle to disturb those sentences in order to take into account as a matter of mitigation that a different offence for which it was open to prosecute the appellants has a lesser maximum penalty. The independence of prosecutorial discretion For the reasons given, the "principle" stated in Liang is without a sound foundation. However, the first respondent's submissions identify a more fundamental reason for rejecting it. There is an undeniable tension between the statement in Liang that it is "relevant and proper" for the judge to take into account the existence of another offence which the judge considers to be "as appropriate or even more appropriate" and the recognition that the selection of the charge is within the "absolute discretion" of the prosecutor61. That the "principle" can be traced to decisions that date to more than 30 years ago62 and that it has been applied (albeit infrequently) in a number of Australian jurisdictions does not mean that it should be accepted as part of the common law of Australia if, as appears, it is inconsistent with recognition of the separation of prosecutorial and judicial functions, which in this country has a constitutional dimension. 60 R v Young unreported, Court of Criminal Appeal of Victoria, 2 December 1982 at 61 R v Liang (1995) 124 FLR 350 at 355. 62 Scott v Cameron (1980) 26 SASR 321; R v Young unreported, Court of Criminal Appeal of Victoria, 2 December 1982. Hayne Bell It may be accepted that the prosecutor's selection of the charge is capable of having a bearing on the sentence. Commonly this will be the case where the prosecution has a discretion in determining whether to proceed summarily or on indictment. However, the separation of functions does not permit the court to canvass the exercise of the prosecutor's discretion in a case in which it considers a less serious offence to be more appropriate any more than when the court considers a more serious charge to be more appropriate. In this context, the observations of Dawson and McHugh JJ in their joint reasons in Maxwell v The "No doubt a court may, if it thinks it desirable to do so, express its view upon the appropriateness of a charge or the acceptance of a plea and no doubt its view will be accorded great weight. But if a court does express such a view, it should recognise that in doing so it is doing no more than attempting to influence the exercise of a discretion which is not any part of its own function and that it may be speaking in ignorance of matters which have properly motivated the decision of the prosecuting authority." Prosecutors are subject to a duty of fairness in the exercise of their important public functions64. In the unlikely event that the discretion to prosecute a particular charge (or at all) was exercised for some improper purpose, the court has the power to relieve against the resulting abuse of its process65. The time for debate as to any claimed abuse arising out of the selection of the charge is before the entry of a plea. After an offender has been convicted of an offence it risks compromising the impartiality and independence of the court to require 63 Maxwell v The Queen (1996) 184 CLR 501 at 514; [1996] HCA 46. 64 Whitehorn v The Queen (1983) 152 CLR 657 at 663-664 per Deane J, 675 per Dawson J; [1983] HCA 42; R v Apostilides (1984) 154 CLR 563 at 575-576; [1984] HCA 38; Libke v The Queen (2007) 230 CLR 559 at 576-577 [34]-[35] per Kirby and Callinan JJ, 586-587 [71]-[72] per Hayne J; [2007] HCA 30. 65 Barton v The Queen (1980) 147 CLR 75 at 95-96 per Gibbs ACJ and Mason J; [1980] HCA 48; Jago v District Court (NSW) (1989) 168 CLR 23 at 28-30 per Mason CJ, 47-48 per Brennan J, 56 per Deane J, 71 per Toohey J; [1989] HCA 46; Williams v Spautz (1992) 174 CLR 509 at 518-519 per Mason CJ, Dawson, Toohey and McHugh JJ; [1992] HCA 34; Maxwell v The Queen (1996) 184 CLR 501 at 514 per Dawson and McHugh JJ, 535 per Gaudron and Gummow JJ. Hayne Bell that it sentence by reference to an offence of which the offender has not been convicted but which it considers the prosecution should have charged66. As has been explained, the appellants' submission that the Liang principle is necessary to enable the court to impose a just sentence is misconceived. Consideration of different offences for which an offender might have been convicted is merely a distraction. Before the Court of Appeal and in this Court there was debate respecting the availability and appropriateness of the lesser Commonwealth and State offences in light of the facts. It is unnecessary to address these questions. However, it should be observed that it will often be possible to conceive of other charges upon which the prosecution might arguably have proceeded. There is force to Callaway JA's observation, in dissent, in McEachran that "[s]entencing is hard enough without requiring a judge or magistrate to consider another offence that, properly, was not charged"67. Conclusion and orders There is no warrant under the common law of sentencing for a judge to take into account the lesser maximum penalty for an offence for which the offender could have been, but has not been, convicted. The appeals should be dismissed. 66 Barton v The Queen (1980) 147 CLR 75 at 94-97 per Gibbs ACJ and Mason J; Maxwell v The Queen (1996) 184 CLR 501 at 534 per Gaudron and Gummow JJ; Island Maritime Ltd v Filipowski (2006) 226 CLR 328 at 355 [81] per Kirby J; [2006] HCA 30. 67 (2006) 15 VR 615 at 619 [15]. |
HIGH COURT OF AUSTRALIA DIMITRIOS LIKIARDOPOULOS APPELLANT AND THE QUEEN RESPONDENT [2012] HCA 37 14 September 2012 ORDER Appeal dismissed. On appeal from the Supreme Court of Victoria Representation M J Croucher SC with L C Carter on behalf of the appellant (instructed by Lewenberg & Lewenberg) G J C Silbert SC with B L Sonnet for the respondent (instructed by Solicitor for Public Prosecutions (Vic)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Criminal law β Murder β Accessorial liability β Appellant convicted of murder β Crown accepted guilty pleas from five other participants to lesser offences β Trial judge left to jury Crown case based on accessorial liability β Whether appellant could be convicted as accessory to murder when Crown had accepted pleas from all other participants to lesser charges β Whether trial judge should have left accessorial case to jury β Whether Crown could lead evidence that other participants murdered the deceased β Whether inconsistency between convictions of other participants and accused β Whether exercise of prosecutorial discretion an abuse of process. Words and phrases β "abuse of process", "accessory", "aiding and abetting", "counselling or procuring", "principal", "prosecutorial discretion". Crimes Act 1958 (Vic), s 323. FRENCH CJ. I agree with the order proposed in the joint judgment and, subject to one reservation, with the reasons which their Honours give for that order. That reservation relates to an observation in the joint judgment concerning the reviewability of prosecutorial discretions. The general unavailability of judicial review in respect of the exercise of prosecutorial discretions rests upon a number of important considerations. One of those considerations, adverted to in the joint judgment, is the importance of maintaining the reality and perception of the impartiality of the judicial process1. A related consideration is the importance of maintaining the separation of the executive power in relation to prosecutorial decisions and the judicial power to hear and determine criminal proceedings2. A further consideration is the width of prosecutorial discretions generally and, related to that width, the variety of factors which may legitimately inform the exercise of those discretions. Those factors include policy and public interest considerations which are not susceptible to judicial review, as it is neither within the constitutional function nor the practical competence of the courts to assess their merits. Moreover, as their Honours point out, trial judges have available to them sanctions to enforce well-established standards of prosecutorial fairness and to prevent abuses of process. The above considerations, reflected in a number of decisions of this Court referred to in the joint judgment of Gaudron and Gummow JJ in Maxwell, support the proposition that in a practical sense prosecutorial decisions are for the most part insusceptible of judicial review. But as Gaudron and Gummow JJ also pointed out, the approach of earlier authorities which treated such decisions as unreviewable because they were seen as part of the prerogative of the Crown "may not pay sufficient regard to the statutory office of Director of Public Prosecutions which now exists in all States and Territories and in the Commonwealth."3 Further as their Honours observed "it may pay insufficient regard to the fact that some discretions are conferred by statute"4. The statutory character of prosecutorial decision-making in Australia today does not lessen the significance of the impediments to judicial review of the constitutional and practical such decisions, which are created by 1 Maxwell v The Queen (1996) 184 CLR 501 at 534 per Gaudron and Gummow JJ; [1996] HCA 46. Jago v District Court (NSW) (1989) 168 CLR 23 at 39 per Brennan J; [1989] HCA 46. (1996) 184 CLR 501 at 534 per Gaudron and Gummow JJ. (1996) 184 CLR 501 at 534 per Gaudron and Gummow JJ. considerations referred to above. However the existence of the jurisdiction conferred upon this Court by s 75(v) of the Constitution in relation to jurisdictional error by Commonwealth officers and the constitutionally-protected supervisory role of the Supreme Courts of the States5 raise the question whether there is any statutory power or discretion of which it can be said that, as a matter of principle, it is insusceptible of judicial review. That question was not argued in this case and does not need to be answered in order to decide this case. It involves a question arising under the Constitution. I would not wish my agreement with the reasons given in the joint judgment to be taken as acceptance of a proposition that the exercise of a statutory power or discretion by a prosecutor is immune from judicial review for jurisdictional error, however limited the scope of such review may be in practice. Subject to the above reservation, I agree with the reasons of their Honours and the order they propose. 5 Kirk v Industrial Court (NSW) (2010) 239 CLR 531; [2010] HCA 1. Crennan Bell GUMMOW, HAYNE, CRENNAN, KIEFEL AND BELL JJ. In early March 2007, a number of people were involved in the sustained, brutal beating of a young, intellectually handicapped man named Christopher O'Brien. Mr O'Brien died of the injuries suffered in the course of the beating. Seven people, including the appellant, were charged with his murder. The charge was withdrawn against one person and the prosecution accepted pleas of guilty to lesser offences from five of the others. The appellant was the only person to be committed to the Supreme Court of Victoria on the charge of murder. On 13 February 2009, the appellant was arraigned in the Supreme Court (Curtain J) on a presentment charging him as a principal with the murder of the deceased. Evidence was given at the trial that the appellant had assaulted the deceased and encouraged others to assault him. It was the Crown case that the appellant was a party to a joint criminal enterprise to inflict really serious injury on the deceased and that, pursuant to the enterprise, one or more of the parties to it had done the act or acts causing death ("the principal case"). An alternative case, that the appellant was guilty of murder because he had directed and encouraged the principal offenders to murder the deceased, was also left for the jury's consideration ("the accessorial case"). The jury returned a verdict of guilty of murder. The appellant appealed against his conviction to the Court of Appeal of the Supreme Court of Victoria (Buchanan, Ashley and Tate JJA). He contended that the trial judge erred in her directions concerning joint criminal enterprise and in leaving the principal case when it was not established that he had been present when the act or acts causing death were carried out. He also contended that the trial judge erred in her directions concerning the accessorial case and in leaving that case in circumstances in which the Crown had accepted pleas of guilty to lesser offences from those whom it alleged had been the principal offenders6. Each of these grounds was rejected and the appeal was dismissed. On 9 March 2012, the appellant was granted special leave to appeal from the order of the Court of Appeal on the sole ground that it was an error to leave the accessorial case. For the reasons to be given, there was no obstacle in law to the appellant's conviction for murder on the accessorial case. Nor was it an abuse of the process of the court for the Crown to prosecute the appellant as an accessory to murder when it had accepted pleas of guilty to lesser offences from 6 Likiardopoulos v The Queen [2010] VSCA 344 at [39]. Crennan Bell those whom it alleged had been the principal offenders. It follows that the appeal must be dismissed. Some account should be given of the evidence at the trial. What follows is a summary of that evidence, largely taken from the judgment of the Court of Appeal. The appellant was aged 47 years at the date of the killing. His 19 year old son, John, was living with him in a house in Noble Park, Melbourne. A man named Hakan Aydin was living in a bungalow at the rear of the premises. Aydin was aged 26 years. The appellant's younger son, Constantine, aged 17 years, was present at the Noble Park home at least during some of the material events. So was his girlfriend, Antoinette. Drugs were readily available at the appellant's home and it was common for people to visit the home to purchase drugs. Among the regular visitors were two men, Shalendra Singh and Darren Summers. Summers was living in a house nearby. The deceased was 22 years old. He had an intellectual age of around 14 years. He had been living in a special care residence in Noble Park. In October 2006, he moved into Summers' house. Several months after moving into the house, Summers accused the deceased of taking a bracelet belonging to his girlfriend. After this confrontation, the bracelet reappeared. Summers told the Likiardopoulos family about the incident. At around this time, one of the appellant's associates complained that his mobile phone had been lost or stolen at the appellant's home. Suspicion initially fell on Singh. Singh was detained at the appellant's home and assaulted by members of the household. He was ultimately successful in persuading them of his innocence. As a recompense for the assault, and to secure his silence, Singh was invited to move into the household. He accepted this offer. Suspicion concerning the missing mobile phone next fell on the deceased, who was summoned to the appellant's home under some pretext. Once inside the home, the deceased was repeatedly assaulted over a period of about two days. The assaults were carried out by persons including the appellant, John Likiardopoulos, Aydin and Singh. They included punches to the head and face, kicks to the body, blows inflicted with ashtrays, sticks and a hammer, and forced drinking of detergent. The appellant's participation in the assaults included that he administered two "king hits" to the deceased which dislodged two of his teeth and that he joined others in punching and kicking him. Towards the end of his ordeal, the deceased lost control of his bowels. The appellant directed others to take him to the bathroom and clean him up. The deceased was unable to walk Crennan Bell unassisted on his return. He was put on a chair from which he fell to the floor, where he lay convulsing until he died. The appellant gave directions for the disposal of the body and the removal of incriminating evidence. The body was dumped in the Dandenong Creek at Bangholme. Skeletal remains were later recovered. These revealed fractures of the vertebrae, shoulders, ribs and nose. Two of the teeth had been knocked out. It was open to conclude that death had been occasioned by the various assaults, although no particular act or acts could be identified as causal. The appellant admitted his involvement in assaulting the deceased to civilian witnesses. The appellant did not give or call evidence at the trial. The pattern over the course of the deceased's ordeal was for his attackers to take breaks from time to time, during which they consumed "ice" and other drugs and rested before returning to the attack. It was not established that any one person had been present throughout the whole of the violence inflicted on the deceased. The prosecution did not contend that the appellant had been present throughout. On one version of the events, the appellant was not at home when the deceased arrived and the violence commenced. It appears that the police received some information about the incident a little over five months later. They interviewed the appellant and his son, John. Three days later, on 14 August 2007, Aydin was interviewed. He admitted his involvement in assaulting the deceased and led the police to the place where the body had been deposited. Following the recovery of the remains, the appellant, his two sons, Antoinette, Aydin, Singh and Summers were charged with the murder of the deceased. The charge against Antoinette was later withdrawn. Aydin and Singh gave evidence for the Crown at the appellant's trial. On the principal case, the appellant was liable for the murder of the deceased under the principle of criminal responsibility variously described as joint criminal enterprise, common purpose or concert7. On this analysis, it was necessary to prove that the appellant was a party to an understanding or arrangement, whether formed expressly or tacitly, with John Likiardopoulos, 7 McAuliffe v The Queen (1995) 183 CLR 108 at 113 per Brennan CJ, Deane, Dawson, Toohey and Gummow JJ; [1995] HCA 37; Gillard v The Queen (2003) 219 CLR 1 at 35 [109] per Hayne J; [2003] HCA 64. Crennan Bell Aydin and Singh, to inflict really serious injury on the deceased and that, while that arrangement was on foot, one or more of the parties to it did the acts which caused death intending thereby to do really serious injury to him8. The appellant's participation in the enterprise while possessed of the requisite intention (here, to inflict really serious injury) operates to fix him with liability for the acts of the other parties carried out in pursuance of it. On the principal case, the appellant's liability is direct and, as his argument acknowledged, his amenability to prosecution for murder is unaffected by the Director of Public Prosecutions' ("the Director") acceptance of pleas to lesser offences from all of the other parties to the joint criminal enterprise. The accessorial case depended upon the same evidence as that relied upon to establish the principal case. This was the evidence of what the appellant said and did at the scene. In particular, the accessorial case relied on evidence that the appellant directed and encouraged others to assault the deceased. On the accessorial case, the appellant's guilt of murder would be established by proof that one or more persons assaulted the deceased intending to do him really serious injury, and that with knowledge of those facts, the appellant intentionally assisted or encouraged that person or those persons in the commission of the fatal assaults9. This Court was informed that the accessorial case had been advanced out of the concern that the principal case might founder on the inability to establish that the appellant had been present throughout the whole of the infliction of violence on the deceased. Counsel for the Crown submitted that this concern stemmed from a mistaken belief as to the essentiality of presence, arising out of Smith J's charge to the jury in R v Lowery and King (No 2)10. Be that as it may, the trial judge entertained no such misapprehension. Her Honour directed the jury that it was not necessary to prove that the appellant had been present throughout the whole of the time during which the assaults took place in order to 8 McAuliffe v The Queen (1995) 183 CLR 108 at 114 per Brennan CJ, Deane, Dawson, Toohey and Gummow JJ; Gillard v The Queen (2003) 219 CLR 1 at 8 [10] per Gleeson CJ and Callinan J, 15 [31] per Gummow J, 35-36 [110] per 9 Giorgianni v The Queen (1985) 156 CLR 473 at 487-488 per Gibbs CJ, at 500 per Wilson, Deane and Dawson JJ; [1985] HCA 29. 10 [1972] VR 560 at 561. Crennan Bell establish his guilt as a party to the joint criminal enterprise. The Court of Appeal correctly rejected the appellant's challenge to that direction. An appreciation of the nature of the challenge in this Court is assisted by reference to basic common law distinctions between categories of participation, namely, those of principals, accessories before the fact, accessories at the fact, and accessories after the fact. In Osland v The Queen11, Callinan J explained: "The distinguishing feature of accessories at the fact was their presence at the commission of the crime. Accessories at the fact were described as 'aiding and abetting' the commission of the crime. Accessories before the fact were referred to as having 'counselled or procured' the crime. Different penalties were typically imposed for the various classifications of participation." In the present case, the trial judge used the language of counselling and procuring in directing the jury respecting accessorial liability. However, as noted above, these are the words used to describe the accessory before the fact who encourages or instigates the offence but who is not present at its commission (the principal in the third degree). The accessory who is present at the scene assisting or encouraging its commission (the principal in the second degree) is said to aid and abet the principal offender12. Her Honour directed that it was the Crown case that the appellant "directed, encouraged and exhorted others present to inflict really serious injury to [the deceased]" and that he knew the essential circumstances of the offence (that they were going to administer a severe beating to the deceased with the requisite intention) "because he was present at the time when that was being done". The appellant submitted that in law he could not be an accessory to murder in circumstances in which the Crown had accepted pleas of guilty to lesser offences from each of the persons said to be principal offenders, because the liability of an accessory is derivative. The appellant's submissions proceeded on the footing that the accessorial case against him was as an accessory before the fact. The submission fastened on the use of the words "counsel and procure" and not on the factual case that was left, which was that the appellant's accessorial liability arose from his conduct at the scene directing and 11 (1998) 197 CLR 316 at 400 [206]; [1998] HCA 75. 12 Giorgianni v The Queen (1985) 156 CLR 473 at 480 per Gibbs CJ, 493 per Crennan Bell encouraging the principal offenders to assault or to renew their assaults on the deceased13. However, as will be explained, nothing turns on this circumstance for the resolution of issues raised by the appeal. In short, the evidence at trial was capable of proving that each of those whom the appellant was said to have directed and encouraged were liable as principals for the murder of the deceased. This renders otiose the reliance by the appellant on what in Osland14 McHugh J said were the common law principles of accessorial liability, but without the occasion to advert to changes in the common law itself and to statutory interventions beginning in England in the first half of the 19th century. The passage in question, omitting footnotes, reads: "Those who aided the commission of a crime but were not present at the scene of the crime were regarded as accessories before the fact or principals in the third degree. Their liability was purely derivative and was dependent upon the guilt of the person who had been aided and abetted in committing the crime. Those who were merely present, encouraging but not participating physically, or whose acts were not a substantial cause of death, were regarded as principals in the second degree. They could only be convicted of the crime of which the principal offender was found guilty. If that person was not guilty, the principal in the second degree could not be guilty. Their liability was, accordingly, also derivative." At common law, the derivative nature of the liability of the accessory required the attainder of the principal offender before the accessory was amenable to justice15. The inconvenience of the rule led to its abandonment in the case of accessories at the fact (aiders and abettors), who came to be treated as principals16. It remained that the accessory before the fact could not be 13 See generally J C Smith, "Aid, Abet, Counsel, or Procure", in Glazebrook (ed), Reshaping the Criminal Law, (1978) 120. 14 (1998) 197 CLR 316 at 341-342 [71]. 15 K J M Smith, A Modern Treatise on the Law of Criminal Complicity, (1991) at 110, citing Thorne (trans), Bracton on the Laws and Customs of England, (1968), vol 2. See also Smith at 22 fn 17. See further Stephen, A History of the Criminal Law of England, (1883), vol 2 at 232. 16 Hale, The History of the Pleas of the Crown, (1736), vol 1 at 623-626; Hawkins, A Treatise of the Pleas of the Crown, 8th ed (1824), vol 2 at 438-439; K J M Smith, A (Footnote continues on next page) Crennan Bell prosecuted before the conviction of the principal offender. Statutory reforms in the 19th century in England removed this procedural bar17. These provisions were re-enacted in the Accessories and Abettors Act 1861 (UK) (24 & 25 Vic c 94) and were copied in Victoria18. The English provisions were held to allow the conviction of the accessory before the fact, despite the acquittal of the principal offender19. In Victoria20, the current provision governing the trial of accessories before the fact and present at the fact is s 323 of the Crimes Act 1958 (Vic), which provided at the relevant time: Modern Treatise on the Law of Criminal Complicity, (1991) at 111. The principal in the second degree was amenable to conviction for an offence of greater seriousness than the principal in the first degree: R v Richards [1974] QB 776; J C Smith, "Aid, Abet, Counsel, or Procure", in Glazebrook (ed), Reshaping the Criminal Law, (1978) 120 at 121. 17 The Criminal Law Act 1826 (UK) (7 Geo 4 c 64), s 9 provided that every accessory before the fact "shall be deemed guilty of Felony, and may be indicted and convicted, either as an Accessory before the Fact to the principal Felony, together with the principal Felon, or after the Conviction of the principal Felon, or may be indicted and convicted of a substantive Felony, whether the principal Felon shall or shall not have been previously convicted, or shall or shall not be amenable to Justice". However, in R v Russell (1832) 1 Mood 356 [168 ER 1302], it was held that the provision did not operate to make the accessory before the fact amenable to justice in circumstances in which the principal offender could never be tried for the offence. The Criminal Procedure Act 1848 (UK) (11 & 12 Vic c 46) was then enacted. It provided in s 1 that "if any Person shall become an Accessory before the Fact to any Felony, whether the same be a Felony at Common Law or by virtue of any Statute or Statutes made or to be made, such Person may be indicted, tried, convicted, and punished in all respects as if he were a principal Felon." 18 Criminal Law and Practice Statute 1864 (Vic), ss 274, 275. 19 R v Hughes (1860) Bell 242 [169 ER 1245]. 20 Equivalent provisions are in force in each State and Territory: Crimes Act 1900 (NSW), ss 345-346; Criminal Code (Q), ss 7-9; Criminal Law Consolidation Act 1935 (SA), s 267; Criminal Code (Tas), ss 3-5; The Criminal Code (WA), ss 7-9; Criminal Code (ACT), s 45; Criminal Code (NT), ss 8-10, 12. Crennan Bell "A person who aids, abets, counsels or procures the commission of an indictable offence may be tried, indicted or presented and punished as a principal offender." In Osland, a case of claimed inconsistency of verdicts, Gaudron and Gummow JJ said that as a result of s 323 it would rarely be necessary to decide whether a person present at the scene of the crime is guilty as principal or accessory21. It is unnecessary to pursue the matter further here. Nor does resolution of the appeal require consideration of the Crown's Notice of Contention, which invited the Court to "sweep away all the outdated distinctions between principals and accessories"22. This is because, accepting that liability on the accessorial case was purely derivative, the evidence in the appellant's trial was capable of proving that those whom the appellant was said to have directed and encouraged to commit the offence had murdered the deceased. The appellant developed his argument by submitting that, for "juristic purposes", there was no murder to which he could be an accessory in circumstances in which those alleged to be principals had been convicted of offences less than murder. The submission was said to be supported by the decision of the Privy Council in Surujpaul v The Queen23 and statements respecting the rationale for it made by Callinan J in Osland24. Surujpaul was jointly tried with four other men on an indictment charging each with murder. At the close of the Crown case, one accused was acquitted by direction. There was uncertainty as to which, if any, of the remaining accused had been present at the scene and which, if any, had been accessories before the 21 (1998) 197 CLR 316 at 329 [26]. 22 The principle for which the respondent contended was stated as follows: "[A] person is criminally responsible for the acts of another when that person can be shown to have either acted as part of a common enterprise (or in concert) [principals in the first degree], or aided and abetted such person [principals in the second degree] or counselled and procured such person [principals in the third degree]; as to what actual crime the person has committed that will be determined by his or her own mens rea and not that of any other actor in the commission of the actus reus." 23 [1958] 1 WLR 1050; [1958] 3 All ER 300. 24 (1998) 197 CLR 316 at 406 [233]. Crennan Bell fact to the murder. The jury were directed in returning their verdicts to state in each case whether the accused was guilty or not guilty of being an accessory before the fact to murder, and guilty or not guilty of murder as principal. Surujpaul was found guilty as an accessory before the fact and not guilty as a principal while each of the remaining accused were acquitted outright. The conviction was set aside on appeal. It was the acquittal of all of the accused of murder as principals which led Callinan J to observe that Surujpaul's conviction as an accessory was "offensive to the law as to logic" and, in the context of a joint trial, to say that "there was, for juristic purposes no murder in respect of which any one of the accused could have been an accessory"25. Like Osland, Surujpaul was concerned with inconsistent verdicts returned by a jury at the joint trial of persons charged with the commission of a single offence. No question of inconsistency of verdicts arises in this appeal. And, as earlier noted, at the appellant's trial, the Crown adduced evidence that was capable of establishing that one or more of those whom the appellant directed or encouraged had murdered the deceased26. The appellant's challenge to the accessorial case was put alternatively as one of abuse of process. Central to this contention was the Director's election to accept pleas of guilty to lesser offences from the principal offenders, while prosecuting the appellant as an accessory to murder. The persons whom the appellant is alleged to have counselled, procured, aided or abetted to murder the possibly, deceased Con Likiardopoulos. and, are The Director is charged with the institution, preparation and conduct on behalf of the Crown of proceedings in the Supreme Court of Victoria in respect of any indictable offence27. If he considers it desirable to do so, he may institute, prepare and conduct any committal proceedings under the Magistrates Court Act 1989 (Vic)28. Aydin and John Likiardopoulos each offered to plead guilty to 25 Osland v The Queen (1998) 197 CLR 316 at 406 [233] per Callinan J. 26 See Remillard v The King (1921) 59 DLR 340 at 342 per Anglin J, 344 per Brodeur J, 349-350 per Mignault J; R v Williams (1932) 32 SR (NSW) 504 at 507-508. See also K J M Smith, A Modern Treatise on the Law of Criminal Complicity, (1991) at 114. 27 Public Prosecutions Act 1994 (Vic), s 22(1)(a). 28 Public Prosecutions Act 1994 (Vic), s 22(1)(b). Crennan Bell manslaughter in the Magistrates Court. Each was committed for sentence for the manslaughter of the deceased. On 30 September 2008, they were sentenced by Lasry J for that offence29. Singh offered to plead guilty to an offence under s 325(1) of the Crimes Act 1958 (Vic), which is similar to the offence of being an accessory after the fact. He was committed for sentence to the Supreme Court of Victoria as an accessory to the manslaughter of the deceased. On 5 August 2008, he was sentenced by Lasry J for this offence. Con Likiardopoulos also offered to plead guilty to being an accessory to the manslaughter of the deceased contrary to s 325(1) and was committed for sentence on that charge30. The appellant submitted that to prosecute him as an accessory to the murder of the deceased when the Crown had accepted pleas to offences less than murder from the alleged principal offenders had a tendency to bring the administration of justice into disrepute. It had that tendency because "there is now, on the record, an acceptance by the court, at the instance of the Crown, that these people are not murderers". Allied to this was the submission that "the Crown cannot be heard to say to a jury that these persons are guilty of murder in circumstances where they have accepted that they are not". The claimed incongruity between the record of convictions for lesser offences and the accessorial case was said to have required the trial judge to refuse to leave the latter case to the jury. The submission did not address the source of the power to withdraw a case that was open on the evidence31. Nor did it engage with the circumstance that no such application was made to the trial judge. Although no point was taken by the Crown in this respect, one strand of the appellant's argument assumed that conviction and sentence for the s 325(1) offence would permit Singh and Con Likiardopoulos to raise a plea in bar to a presentment charging them with the murder of the deceased. In what follows, the appellant's argument will be addressed by reference to the case that he was an accessory to the murder of the deceased by John Likiardopoulos and Aydin since undoubtedly each could successfully raise a plea in bar to arraignment for the murder of the deceased. The second of the appellant's submissions quoted above is grounded in estoppel. Relevantly, it asserts that the Crown was precluded from leading 29 R v Aydin [2008] VSC 388; R v Likiardopoulos [2008] VSC 387. 30 R v Singh [2008] VSC 293. 31 See Hui Chi-ming v The Queen [1992] 1 AC 34 at 57. Crennan Bell evidence to prove that John Likiardopoulos and Aydin murdered the deceased because each had been convicted of his manslaughter. The submission is misconceived. The conviction and sentence of John Likiardopoulos and Aydin for the manslaughter of the deceased was conclusive in proceedings between each man and the Crown. The Crown could not controvert the conviction for manslaughter by leading evidence in subsequent proceedings against either man to establish that he had murdered the deceased32. However, John Likiardopoulos and Aydin were strangers to the proceedings brought against the appellant. Their convictions for manslaughter were not conclusive against the world of the facts on which they were based33. The Crown was not precluded from adducing evidence to establish the fact that John Likiardopoulos and Aydin murdered the deceased. The first of the appellant's submissions quoted above is also misconceived. As earlier explained, there is no inconsistency between the convictions of John Likiardopoulos and Aydin for manslaughter (or the convictions of Singh and Con Likiardopoulos as accessories after the fact to manslaughter) and the appellant's conviction for murder on the accessorial case. The evidence given at the appellant's trial differed from the facts admitted by the pleas of guilty entered by the other four accused. The appellant maintained that it was unfair that the Crown should be permitted to advance a case at his trial that the principal offenders were persons from whom it had chosen to accept pleas of guilty to lesser offences. The Director's acceptance of the proffered pleas of guilty involved an exercise of prosecutorial discretion. As Gaudron and Gummow JJ explained in Maxwell v The Queen, the independence and impartiality of the judicial process would be compromised if courts were perceived to be in any way concerned with who is to 32 Rogers v The Queen (1994) 181 CLR 251 at 273 per Deane and Gaudron JJ; [1994] HCA 42; R v Carroll (2002) 213 CLR 635 at 647-650 [35]-[45] per Gleeson CJ and Hayne J, 663 [93] per Gaudron and Gummow JJ, 673-676 [130]-[138] per McHugh J; [2002] HCA 55; Island Maritime Ltd v Filipowski (2006) 226 CLR 328 at 343-344 [43] per Gummow and Hayne JJ, 357-358 [88]-[89] per Kirby J, 360 [95] per Callinan J; [2006] HCA 30. See also Sambasivam v Public Prosecutor, Federation of Malaya [1950] AC 458 at 479. 33 Cross on Evidence, 8th Aust ed (2010) at [5180]. Crennan Bell be prosecuted and for what34. For this reason, their Honours considered that certain decisions involved in the prosecution process are insusceptible of judicial review. Further, sanctions available to enforce well established standards of prosecutorial fairness are to be found mainly in the powers of a trial judge and are not directly enforceable at the suit of the accused or anyone else by prerogative writ, judicial order or an action for damages35. It is well settled that the circumstances which may amount to an abuse of process are not to be narrowly confined36 and it is possible to envisage cases in which an exercise of prosecutorial discretion may amount to an abuse of the process of the court. However, there is nothing in the conduct of the proceedings arising out of the death of the deceased that has produced unfairness of the kind that would lead a court to intervene to prevent the abuse of its process37. Prominent among the factors bearing on the exercise of the prosecutorial discretion is likely to be consideration of the evidence available to establish guilt of the more serious offence38. The appellant's submission that there was "on the 34 Maxwell v The Queen (1996) 184 CLR 501 at 534; [1996] HCA 46, citing Barton v The Queen (1980) 147 CLR 75 at 94-95; [1980] HCA 48; Jago v District Court of New South Wales (1989) 168 CLR 23 at 38-39, 54 per Brennan J, 77-78 per Gaudron J; [1989] HCA 46; Williams v Spautz (1992) 174 CLR 509 at 548 per Deane J; [1992] HCA 34; Ridgeway v The Queen (1995) 184 CLR 19 at 74-75 per Gaudron J; [1995] HCA 66. 35 Whitehorn v The Queen (1983) 152 CLR 657 at 665 per Deane J; [1983] HCA 42; see also Cannon v Tahche (2002) 5 VR 317. 36 R v Carroll (2002) 213 CLR 635 at 650-651 [47]; Batistatos v Roads and Traffic Authority of New South Wales (2006) 226 CLR 256 at 265-268 [9]-[16] per Gleeson CJ, Gummow, Hayne and Crennan JJ, 299-300 [141]-[142] per Kirby J, 316 [209] and 321 [223] per Callinan J; [2006] HCA 27. 37 Hui Chi-ming v The Queen [1992] 1 AC 34 at 57. 38 See Maxwell v The Queen (1996) 184 CLR 501. It may be noted that the guidelines issued by the Office of Public Prosecutions in Victoria, which appear to have been in force at the date of the proceedings against John Likiardopoulos, Aydin and Singh, included in par 2.6.5: "No plea will be accepted by the Crown unless it reasonably reflects the nature of the criminal conduct of the accused and provides an adequate basis upon which the Court can impose an appropriate sentence. In exercising (Footnote continues on next page) Crennan Bell record" an acceptance by the court at the instance of the Crown "that these people are not murderers" is apt to mislead in this context. Commonly, the factors informing the Director's election to accept pleas to lesser offences will not be known. In this case, the respondent outlined a number of them in written submissions. In summary, the considerations were these. At the time the appellant and the others were charged with the murder of the deceased, the case against each was weak. Aydin had made admissions in his interview with the police but these would not have supported his conviction for murder. The Crown did not have evidence to support the conviction of John Likiardopoulos, Singh or Con Likiardopoulos of murder. The sentencing of Aydin and Singh for manslaughter and as an accessory after the fact to manslaughter respectively enabled the Crown to lead evidence from each at the appellant's trial. This included direct evidence of the appellant's participation in the assaults on the deceased. The evidence from Aydin and Singh was also evidence which, with other evidence, supported, as a step in proof of the appellant's accessorial guilt, the finding that one or more of those whom he had directed or encouraged had assaulted the deceased with the intention which made the act murder. The moral culpability of the accessory will sometimes be greater than that of the principal offender. It was open to consider that to be the case here. The appellant was a man of mature years. His dominance over the other persons in the household does not appear to have been in issue. The evidence of his encouragement of the principal offenders included that he had urged Singh to redouble his assaults on the deceased, saying, "Do you remember how it felt when it was happening to you? Is that all you've got?". And that he had ordered Singh to take a break before telling him to "get back into it". And that he had encouraged John Likiardopoulos and Aydin to "get into" the deceased and to continue beating him after he had been cleaned up and brought back into the kitchen/dining area. There was no unfairness and the administration of justice was not brought into disrepute, by reason of the acceptance of pleas of guilty to lesser offences from the persons whom the Crown alleged had acted at the appellant's urging, in prosecuting the appellant as an accessory to the murder of the deceased. The appeal should be dismissed. this discretion it has to be borne in mind that in a particular case the public interest may be better served by the certainty of a conviction secured by the acceptance of a lesser plea than by the unpredictability inherent in a contested trial." HEYDON J. The questions which arise may be examined in the following order. The respondent's "simple" position First, it is necessary to consider the position advanced by the respondent, which it said was a "simple" one: "[T]his Court should now finally sweep away all the outdated distinctions between principals and accessories in favour of a single coherent principle underlying the law of complicity. Stated succinctly, a person is criminally responsible for the acts of another when that person can be shown to have either acted as part of a common enterprise (or in concert) β¦ or aided and abetted such person β¦ or counselled or procured such person". These three groups of offenders were described in the submission respectively as principals in the first degree, principals in the second degree, and principals in the third degree. The submission continued: "[A]s to what actual crime the person has committed that will be determined by his or her own mens rea and not that of any other actor in the commission of the actus reus." (emphasis in original) The respondent downplayed the radicalism of that submission during oral argument. But it would not be right even to consider the desirability of taking the step suggested by the respondent unless it was necessary to do so. It would not be necessary to do so unless it was impossible to reject the appellant's submissions on some other ground. It is possible to do that, and hence the "simple" position of the respondent need not be examined. One of the issues that would need to be examined if the respondent's position were considered is whether so radical a change would have unintended adverse consequences for accused persons. To alter the criminal law retrospectively and adversely to the interests of accused persons is a course not open to the courts, only to the legislature. The appellant's "derivative liability" submission The appellant submitted: "[L]iability by way of counselling or procuring (or being an accessory before the fact) is derivative. If there is no murder by a principal, there can be no liability for murder as an accessory by way of counselling or procuring." (footnote omitted) The appellant described the case as one of "counselling and procuring others to commit murder". It was a case based on the appellant's conduct in being present for at least part of the long period during which the victim was done to death, and encouraging others present, who allegedly were principal offenders, to attack the victim. Bearing that in mind, the propositions advocated by the appellant are correct. But it does not follow from the fact that none of the alleged principals present had been convicted of murder that they were not in fact guilty of murder as principals. If the appellant's argument were to be accepted, the appellant would have had to analyse the evidence in such a way as to support the conclusion that none of the principals were guilty of murder. This the argument did not do. And the argument could not have done it. Instead the appellant relied on various catch-phrases, emphasised in the following quotations. The appellant said: "there was, for juristic purposes, no murder by any of the persons relied on as potential principals." The appellant put it another way: "there could be, for legal purposes, no murder in circumstances where the Crown had accepted pleas of guilty from those persons upon whom they relied as the principal offenders". The appellant submitted that the prosecution's stance was "not open in law". The "juristic" and "legal" element in the submission was that the prosecution had accepted pleas of guilty from the alleged principal offenders, not to murder, but to manslaughter and to being an accessory after the fact to manslaughter. That "juristic" and "legal" element cloaked the fact that for all practical purposes the alleged principal offenders were guilty of murder. The appellant relied on an analogy with Surujpaul v The Queen 39. That was a joint trial in which all the accused except Surujpaul were acquitted of murder, while he was found guilty as an accessory before the fact to murder. Like Osland v The Queen40, on which the appellant also relied, that case is distinguishable. No analogy may be drawn between cases involving joint trials and the separate proceedings against the alleged principals here, which resulted in convictions for crimes other than murder. There is no inconsistency in the "verdicts". As between the prosecution and an alleged principal offender, that offender is not now to be treated as guilty of murder. But as between the prosecution and the appellant, there is no bar to treating the alleged principal offenders as guilty of murder if the evidence will support that conclusion. The state of the evidence in each of the trials between the prosecution and each alleged principal offender is one thing. The state of the evidence in the trial between the prosecution and the appellant is another. Whether the alleged principal offenders should be treated as guilty of murder in the appellant's trial depended on the evidence in that trial. The key question was thus: was the evidence at the trial of the appellant capable of establishing that the alleged principals committed murder? It was. The appellant did not demonstrate the contrary. Indeed he scarcely tried to. 39 [1958] 1 WLR 1050; [1958] 3 All ER 300. 40 (1998) 197 CLR 316; [1998] HCA 75. Abuse of process Effect on administration of justice. The appellant submitted that the prosecution's approach in seeking a conviction based on what the appellant called "counselling and procuring" brought the administration of justice into disrepute. The appellant also submitted that the prosecution's approach had a tendency to erode public confidence in the administration of justice. If either of these claims mattered41, they invite the retort that to refuse to prosecute the appellant for murder in the manner in which he was prosecuted would have brought the administration of justice into even more disrepute and eroded public confidence in it even more. That is because of the significant role which, according to the evidence in his trial, the appellant played in ensuring that the fatal assaults of the victim continued. The respondent correctly submitted that cases of the present kind would be unprosecutable unless arrangements were made to accept pleas to lesser crimes than those which would otherwise appear in the indictment. When the investigation into the deceased's death began, the detectives necessarily had to behave in the manner of a Maigret without the mist. There was at best only a very weak circumstantial case of murder. Then one of the alleged principals began to negotiate with the police for immunity from a murder charge in return for information and a plea of guilty to manslaughter. People in that position will often not co-operate without some hope of reduced punishment, sometimes to be achieved by a reduction in the charge. The collapse of that principal converted a weak circumstantial case into a stronger direct evidence case. In due course other principals followed suit. From the time before the first plea of manslaughter was accepted until the time when the appellant's trial began, the case against the various accused grew much stronger. That change in strength strongly negates the submission that there was an abuse of process. Inconsistency in prosecution position. The appellant submitted that by accepting the pleas of guilty of the alleged principals, "there is now, on the record, an acceptance by the court, at the instance of the Crown, that these people are not murderers. Yet, at the trial of the appellant the Crown asserts that they were." There is no inconsistency unless the evidence in the cases was identical. It was not shown to be identical. Estoppel. The appellant submitted: "the Crown should be confined to proceeding with murder on the basis of joint criminal enterprise. Further, the Crown should be prevented from asserting that those others engaged in the joint criminal enterprise committed murder or any offence other than the offences 41 Cf Moti v The Queen (2011) 86 ALJR 117 at 141-143 [98]-[102]; 283 ALR 393 at 423-425; [2011] HCA 50. which the Crown has previously accepted they committed." The appellant submitted: "the Crown cannot be heard to say to a jury that these persons are guilty of murder in circumstances where they have accepted that they are not". This appears to be the language of estoppel. But what type of estoppel? It is not any form of estoppel by record. Nor is it any known form of estoppel by representation. If the submission is taken literally, the appellant should have objected at the trial to evidence tending to show that murder had been committed by those who had already been dealt with. If successful, that objection would have completely hamstrung the trial of the appellant on any charge. This demonstrates the absurdity of the appellant's position. The appellant submitted that the way out of the absurdity was for the prosecution to have proceeded against the appellant on the basis of joint criminal enterprise coupled with the appellant's intention to cause really serious injury. But the submission does not explain why the prosecution should be forced to abandon a perfectly legitimate method of demonstrating the appellant's guilt of murder. There was in truth nothing to prevent the prosecution from proceeding against the accused persons one by one and proving to conviction, or accepting pleas of guilt as to, whatever charges it felt proper in the light of the evidence available to it at the time. Unfairness. The appellant put a submission that the "Janus-headed approach" by the prosecution was "an unfair use of the Supreme Court's process." This amounted to no more than a rolled-up way of putting his other abuse of process arguments. It should be rejected for the same reasons. Sense of grievance. It was submitted on behalf of the appellant that he would experience "a particular sense of grievance" because of the prosecution conduct in proceeding against him on the basis that others had committed murder, when they had been convicted of something less. If he really does have a sense of grievance, it is not, in view of the appellant's role in the brutal conduct he superintended, a justified one. Order The appeal must be dismissed. |
HIGH COURT OF AUSTRALIA GUMMOW ACJ, Matter No B10/2008 DEPUTY COMMISSIONER OF TAXATION APPELLANT AND BROADBEACH PROPERTIES PTY LTD RESPONDENT Matter No B11/2008 DEPUTY COMMISSIONER OF TAXATION APPELLANT AND MA HOWARD RACING PTY LTD RESPONDENT Matter No B12/2008 DEPUTY COMMISSIONER OF TAXATION APPELLANT AND NEUTRAL BAY PTY LTD RESPONDENT Deputy Commissioner of Taxation v Broadbeach Properties Pty Ltd Deputy Commissioner of Taxation v MA Howard Racing Pty Ltd Deputy Commissioner of Taxation v Neutral Bay Pty Ltd [2008] HCA 41 3 September 2008 B10/2008, B11/2008 & B12/2008 ORDER Matter No B10/2008 Appeal allowed. Set aside order 1 of the Court of Appeal of the Supreme Court of Queensland made on 28 September 2007, and in place thereof order: appeal to that Court allowed; and set aside order 1 of the Supreme Court of Queensland made on 14 December 2006 and in place thereof order that the application to set aside the statutory demand filed on 6 June 2006 be dismissed. Appellant to pay the respondent's costs in this Court. Matter No B11/2008 Appeal allowed. Set aside order 1 of the Court of Appeal of the Supreme Court of Queensland made on 28 September 2007, and in place thereof order: appeal to that Court allowed; set aside order 1 of the Supreme Court of Queensland made on 14 December 2006; and remit the matter to a Judge of the Supreme Court of Queensland for determination of the appropriate variation of the statutory demand. Appellant to pay the respondent's costs in this Court. Matter No B12/2008 Appeal allowed. Set aside order 1 of the Court of Appeal of the Supreme Court of Queensland made on 28 September 2007, and in place thereof order: appeal to that Court allowed; set aside order 1 of the Supreme Court of Queensland made on 14 December 2006; and remit the matter to a Judge of the Supreme Court of Queensland for determination of the appropriate variation of the statutory demand. Appellant to pay the respondent's costs in this Court. On appeal from the Supreme Court of Queensland Representation N J Williams SC with G R Kennett and P A Looney for the appellant in each appeal (instructed by Australian Government Solicitor) F L Harrison QC with M L Robertson for the respondent in each appeal (instructed by Deacon & Milani Solicitors) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Deputy Commissioner of Taxation v Broadbeach Properties Pty Ltd Deputy Commissioner of Taxation v MA Howard Racing Pty Ltd Deputy Commissioner of Taxation v Neutral Bay Pty Ltd law β Winding up insolvency β Statutory demand β Corporations Corporations Act 2001 (Cth) ("Corporations Act"), s 459H(1) provided for setting aside of statutory demand where genuine dispute about existence or amount of debt β Deputy Commissioner of Taxation served statutory demands on respondent taxpayers in respect of debts β Debts were due and payable for assessments and declarations of goods and services tax, income tax, interest and penalties β Taxpayers review proceedings under Taxation Administration Act 1953 (Cth) ("Administration Act"), Pt IVC and applied to Supreme Court under Corporations Act, s 459G to set aside statutory demands β Whether pending Pt IVC proceedings constituted "genuine dispute β¦ about the existence or amount of a debt" within meaning of s 459H(1)(a) β Whether primary judge erred in setting aside statutory demands. instituted Corporations law β Winding up in insolvency β Statutory demand β Discretion to set aside statutory demand for "some other reason" in Corporations Act, s 459J(1)(b) β Scope of discretion β Whether pendency of Pt IVC proceedings proper basis for exercise of discretion β Whether disruption to taxpayers, creditors and contributories proper basis for exercise of discretion β Relevance of provision in Administration Act for recovery of tax while Pt IVC proceedings pending. Taxation β Recovery of tax β Scope of application of Corporations Act, Pt 5.4 to recovery of tax "debt" β Special character of tax "debts" as creatures of statute β Effect of conclusive evidence provisions in Administration Act, Sched 1, ss 105-100 and 298-30 and Income Tax Assessment Act 1936 (Cth), s 177(1) β Whether position different for "full self-assessment taxpayer" β Concession of Deputy Commissioner that pendency of Pt IVC proceedings relevant to hearing of winding up application. Words and phrases β "assessment", "debt", "full self-assessment taxpayer", "genuine dispute β¦ about the existence or amount of a debt", "some other reason", "tax debt", "tax-related liability". Corporations Act 2001 (Cth), Pt 5.4, ss 459G, 459H, 459J, 459S. Taxation Administration Act 1953 (Cth), ss 14ZZM, 14ZZR, Sched 1 ss 105-100, Income Tax Assessment Act 1936 (Cth), ss 177(1), 208, 209. GUMMOW ACJ, HEYDON, CRENNAN AND KIEFEL JJ. These appeals from the Court of Appeal of the Supreme Court of Queensland (Keane, Holmes and Muir JJA)1 were heard together. Holmes and Muir JJA agreed with the reasons of Keane JA. In reaching its decision the Court of Appeal upheld the decision of the primary judge in the Supreme Court (Philip McMurdo J)2 but differed from the reasoning of the Full Court of the Federal Court (Black CJ, Einfeld and Sackville JJ) in Hoare Bros Pty Ltd v Commissioner of Taxation3. The three respondents are related corporations and are controlled by Mr Mark Howard. They are involved in construction and sale of residential apartments and are part of what is known as the Howard Group4. Advice with respect to the business structure of the Howard Group was provided by Deacon and Milani, solicitors. The issues in the litigation with the appellant ("the Commissioner") which have reached this Court concern the interaction between two statutory regimes established by federal law. The first is that for the winding up of companies in insolvency which is found in Pt 5.4 (ss 459A-459T) of the Corporations Act 2001 (Cth) ("the Corporations Act") and includes provisions for the service of statutory demands on companies for payment of debts. The second regime is established by the provisions for the assessment and collection of income tax and the goods and services tax ("the GST"). The relevant provisions appear primarily in the Income Tax Assessment Act 1936 (Cth) ("the Assessment Act"), the Income Tax Assessment Act 1997 (Cth) ("the 1997 Act"), the A New Tax System (Goods and Services Tax) Act 1999 (Cth) ("the GST Act"), ("the Administration Act") and the Taxation (Interest on Overpayments and Early Payments) Act 1983 (Cth) ("the Overpayments Act"). the Taxation Administration Act 1953 (Cth) 1 Neutral Bay Pty Ltd v Deputy Commissioner of Taxation (2007) 25 ACLC 1341. 2 Neutral Bay Pty Ltd v Commissioner of Taxation (2006) 205 FLR 470; 65 ATR 270. (1996) 62 FCR 302. 4 A fourth member of the Howard Group, Neutral Bay (Sales) Pty Ltd ("Neutral Bay Sales"), was a party to proceedings at an earlier stage, but its dispute with the appellant was settled. Gummow ACJ Crennan It should be added that, with respect both to income tax and to the GST, the Parliament has followed the "tried and venerated procedure"5 of framing those tax regimes so as to separate out taxing statutes dealing specifically with the imposition of liability6 ("the Imposition Acts"). Nothing for the purposes of these appeals immediately turns upon the distinction and the focus will be upon the assessment and supporting legislation listed above rather than upon the Imposition Acts. The course of the proceedings The respondents in the second ("Howard Racing") and third ("Neutral Bay") appeals failed to pay amounts claimed for GST, interest and penalties. On 8 February 2006, Deacon and Milani wrote to the Commissioner indicating that their clients had ordered their affairs in accordance with expert legal advice and added: "You will appreciate that our clients were not prepared to receive any assessments contrary to the advice they had received, let alone the huge penalty and interest imposts, and are unable to pay immediately. Moreover, it is uncommercial for our clients to attempt to source funding from related parties, who could not be adequately compensated even if our clients are successful in their objections." On 24 April 2006 a Deputy Commissioner issued to Howard Racing a statutory demand within the meaning of s 459E of the Corporations Act. This stated that Howard Racing owed a Running Balance Account ("RBA") deficit debt of $6,389,785.75, principally for GST, interest and penalties owing under taxation laws. On the same day a statutory demand was also issued to Neutral Bay for a RBA deficit debt in the sum of $8,433,350.79, again principally for GST, interest and penalties. 5 Moore v The Commonwealth (1951) 82 CLR 547 at 569; [1951] HCA 10. See also Permanent Trustee Australia Ltd v Commissioner of State Revenue (Vict) (2004) 220 CLR 388 at 407-412 [38]-[50]; [2004] HCA 53. 6 See, eg, Income Tax Rates Act 1986 (Cth); A New Tax System (Goods and Services Tax Imposition β General) Act 1999 (Cth); A New Tax System (Goods and Services Tax Imposition β Customs) Act 1999 (Cth); A New Tax System (Goods and Services Tax Imposition β Excise) Act 1999 (Cth). Gummow ACJ Crennan On 17 May 2006 a Deputy Commissioner issued a statutory demand to the respondent in the first appeal ("Broadbeach"). This was in the sum of $1,679,920.24, being the liability of Broadbeach under a default assessment (made under s 167 of the Assessment Act and issued on 18 April 2006) of income tax for the year ended 30 June 2004, together with a general interest charge for late payment. The default assessment was issued whilst, on the affidavit evidence filed on behalf of Broadbeach in the Supreme Court, the lodgement of a return had been deferred on professional advice. they commenced on 18 May 2006 review proceedings After the disallowance of the objections made by Neutral Bay and Howard the Racing, Administrative Appeals Tribunal the Administration Act. These proceedings are still pending. Review proceedings under Pt IVC with respect to the disallowance of the objection by Broadbeach also are pending. ("the AAT") under Pt IVC of One significant issue in the pending proceedings in the AAT is a contention by Howard Racing and Neutral Bay respecting the incidence of GST with respect to the first sales of certain residential apartments. The primary judge explained that (i) some apartments were constructed by Neutral Bay on land it owned, then sold by it to Neutral Bay Sales which sold them to the public and (ii) other apartments were constructed by Howard Racing on land it owned, sold by it to Broadbeach and then sold to the public, and his Honour continued7: "Sales of residential premises do not attract GST except where they are new residential premises, which means premises which have not previously been sold as residential premises8. Ordinarily a supply within a group registered as such for GST purposes does not attract GST. [Neutral Bay] and [Neutral Bay Sales] became registered as a group for GST purposes, the nominated group representative being [Neutral Bay]. [Howard Racing] and [Broadbeach] were registered as another group, the representative being [Howard Racing]. A representative member is liable to pay GST on any taxable supply by a member of the group. The [respondents] say that the sales to [Neutral Bay Sales] and [Broadbeach] were not taxable because they were within a group, and that the sales by those companies to the public were not the first sales, because the first sales were the sales to them." (2006) 205 FLR 470 at 473; 65 ATR 270 at 274. [The GST Act], s 40-75. Gummow ACJ Crennan The respondents applied to the Supreme Court of Queensland for orders that the statutory demands be set aside pursuant to the power to do so conferred by s 459G of the Corporations Act. The applications by Howard Racing and Neutral Bay were filed on 18 May 2006 and by Broadbeach on 6 June 2006. On 14 December 2006, the primary judge delivered detailed reasons for judgment and ordered that the statutory demands be set aside. The Court of Appeal dismissed appeals by the Commissioner and the appeals to this Court are brought against those orders. The appeals are brought under the Commissioner's test case programme and, even if successful, the Commissioner submits to an order that the respondents have their costs in this Court and that they retain the costs orders in their favour made by the primary judge and by the Court of Appeal. For the reasons which follow, the appeals to this Court should be allowed. The sequel will be that if there are failures to comply with the then outstanding statutory demands9, on timely applications by the Commissioner to wind up the respondents in insolvency the court hearing those applications must presume that the respondents are insolvent (s 459C(2)(a)). The position of the Commissioner Notwithstanding the presumption of insolvency that would apply under s 459C(2)(a), in written and oral submissions to this Court the Commissioner made an important concession. This was that upon the hearing of such winding up applications the court might properly have regard to whether the taxpayer had a "reasonably arguable" case in proceedings under Pt IVC of the Administration Act, if those proceedings then still be on foot; questions of the kind canvassed in General Steel Industries Inc v Commissioner for Railways (NSW)10 might arise. The proposition which the Commissioner seeks to have this Court uphold concerns the earlier stage of litigation under the Corporations Act. It is that in the proceedings by the taxpayers to set aside the statutory demands, those proceedings not being Pt IVC proceedings, the taxation legislation has the effect that the amounts and all the particulars of the assessments or declarations leading to the debts stated in those demands are correct. (That formulation allows for the proposition affirmed in Commissioner of Taxation v Futuris Corporation Ltd11 9 The time for compliance ends seven days after the s 459G applications are "finally determined or otherwise disposed of": s 459F(2)(a)(ii). 10 (1964) 112 CLR 125; [1964] HCA 69. 11 [2008] HCA 32. Gummow ACJ Crennan that, in a court exercising jurisdiction derived from s 75(v) of the Constitution, jurisdictional error of the nature identified in Futuris may attract a remedy against the Commissioner.) The statutory demand provisions The antecedents and the scheme of Pt 5.4 of the Corporations Act were considered recently in Aussie Vic Plant Hire Pty Ltd v Esanda Finance Corporation Ltd12 where Gleeson CJ, Hayne, Crennan and Kiefel JJ remarked: "The evident purposes of Pt 5.4 of the [Corporations] Act include speedy resolution of applications to wind up companies in insolvency. One particular feature of the way in which that purpose is carried into effect is to focus principal attention at the hearing of the winding up application upon whether a company is insolvent rather than upon defects in the procedures that precede the institution of the application for winding up." After referring to various provisions in Pt 5.4 their Honours continued13: "The emphasis which these provisions give to the speedy resolution of an application to wind up in insolvency is coupled with provisions which seek to focus attention at the hearing of an application to wind up in insolvency upon whether the company is insolvent rather than upon the formal adequacy of steps which have preceded the institution of the application to wind up. Chief among the provisions intended to focus attention upon solvency is s 459S. That section limits the grounds on which a company may oppose a winding up application which is founded on failure to comply with a statutory demand." Section 459S is in these terms: "Company may not oppose application on certain grounds In so far as an application for a company to be wound up in insolvency relies on a failure by the company to comply with a statutory demand, the company may not, without the leave of the Court, oppose the application on a ground: 12 (2008) 232 CLR 314 at 323 [14]; [2008] HCA 9. 13 (2008) 232 CLR 314 at 324-325 [18]. Gummow ACJ Crennan that the company relied on for the purposes of an application by it for the demand to be set aside; or that the company could have so relied on, but did not so rely on (whether it made such an application or not). The Court is not to grant leave under subsection (1) unless it is satisfied that the ground is material to proving that the company is solvent."14 The reference in s 459S to the grounds that a company relied upon or could have relied upon in an application made by it to set aside a statutory demand is to be read with ss 459E, 459G, 459H and 459J. Section 459E provides for the service on a company of a statutory demand for payment of debts in excess of the statutory minimum. The company may apply for a court order setting aside the statutory demand (s 459G(1)). In so far as relevant s 459H states: "(1) This section applies where, on an application under section 459G, the Court is satisfied of either or both of the following: that there is a genuine dispute between the company and the respondent about the existence or amount of a debt to which the demand relates; that the company has an offsetting claim. If the substantiated amount is less than the statutory minimum, the Court must, by order, set aside the demand. This section has effect subject to section 459J." (emphasis added) 14 The term "Court" is defined in s 58AA of the Corporations Act in terms which include the Federal Court, the State and Territory Supreme Courts and the Family Court of Australia. Gummow ACJ Crennan The relationship between s 459H and s 459J is indicated by the chapeau to s 459J. This states: "Setting aside demand on other grounds". Section 459J states: "(1) On an application under section 459G, the Court may by order set aside the demand if it is satisfied that: because of a defect in the demand, substantial injustice will be caused unless the demand is set aside; or there is some other reason why the demand should be set aside. Except as provided in subsection (1), the Court must not set aside a statutory demand merely because of a defect." (emphasis added) The Court of Appeal decision In Hoare, the Full Court dismissed an appeal by the taxpayer against the refusal by Olney J of an order under s 459G setting aside a statutory demand by the Commissioner15. In deciding not to follow the reasoning of the Full Court in Hoare, the Court of Appeal, after citation of Australian Securities Commission v Marlborough Gold Mines Ltd16, said17: "To the extent that the reasoning in [Hoare] depends upon treating a dispute about whether an assessment has correctly fixed the taxpayer's liability to tax as preventing a court recognising the existence of a dispute about the existence or the amount of the debt for the purposes of s 459H(1), it cannot be justified, either by the language of the taxation legislation, or the language of s 459H(1) of the [Corporations Act]." The Court of Appeal further, and in the alternative, held that the primary judge had been correct in concluding that par (b) of s 459J(1) supported the setting aside of the statutory demands. The Court of Appeal concluded that the existence of a "genuine dispute" as to the underlying tax liability may be taken into account as one factor in exercising the discretionary power to set aside a 15 The decision of Olney J is reported: (1995) 30 ATR 220. 16 (1993) 177 CLR 485 at 492; [1993] HCA 15. 17 (2007) 25 ACLC 1341 at 1359. Gummow ACJ Crennan demand under par (b) of s 459J(1). The Court of Appeal also concluded, without deciding whether the circumstances involved unconscionable conduct or unfairness on the part of the Commissioner, that it was open to the court hearing the application to add as a factor the disruption to the taxpayer and its creditors and contributors which would be involved in a winding up in the absence of any suggestion that the Commissioner would suffer actual prejudice if left to remedies other than a winding up. The Commissioner's submissions In this Court the Commissioner advances two principal grounds in support of the appeals. The first is that, for the purposes of par (a) of s 459H(1), the existence of a proceeding for review by the AAT or an "appeal" to the Federal Court under Pt IVC of the Administration Act respecting the disallowance of an objection, even one in which the taxpayer has a reasonably arguable case, does not give rise to a "genuine dispute" as to the existence or amount of a debt, the subject of a statutory demand, where a notice attracting the conclusive evidence provisions of the taxation legislation is tendered by the Commissioner in the s 459G proceeding to set aside the statutory demand. The second ground is that the existence of such a Pt IVC proceeding, even if reasonably arguable for the taxpayer, is not a proper basis (or alternatively, not a sufficient basis) for the exercise of the power to set aside a statutory demand under par (b) of s 459J(1) for "some other reason". s 459G of In particular, the Commissioner submits that there was no scope in the applications made under the Corporations Act before Philip McMurdo J to consider the existence of a "genuine dispute ... about the existence or amount" of the debts specified in the statutory demands, within the meaning of par (a) of s 459H(1). Nor was there any scope to set aside the statutory demands under par (b) of s 459J(1) of the Corporations Act. This provision, set out earlier, authorises the Court to set aside a statutory demand if it "should be set aside" for "some other reason" than that provided in par (a) of s 459J(1), namely apprehended substantial injustice because of a defect in the demand. The taxation legislation A number of the principal provisions of the Assessment Act and the Administration Act are set out in the joint reasons in Futuris18 and what follows 18 [2008] HCA 32 at [16]-[22]. Gummow ACJ Crennan should be read with both Futuris and WR Carpenter Holdings Pty Ltd v Commissioner of Taxation19. With respect to income tax, the production of a notice of assessment shall be conclusive evidence of the due making of the assessment and, except in Pt IVC proceedings, shall be conclusive evidence "that the amount and all the particulars of the assessment are correct" (Assessment Act, s 177(1)). The income tax to which Broadbeach was assessed under the default assessment issued on 18 April 2006 became due to the Commonwealth and payable to the Commissioner and might be sued for and recovered in any court of competent jurisdiction. The familiar provisions in the Assessment Act which produced results as described in the last sentence, namely s 208 and s 209, were displaced, with respect to income tax deemed payable after 1 July 2000, by amendments made in Sections 208 and 209 then were wholly repealed in 200621. Like provisions now are made as follows in the Administration Act, Sched 1. An amount of a "tax-related liability" that is due and payable as indicated by the tables in s 250-10, is a debt due to the Commonwealth and payable to the Commissioner (s 255-5(1)), and may be sued for recovery in a court of competent jurisdiction (s 255-5(2)). The phrase "tax-related liability" means a pecuniary liability to the Commonwealth "arising directly" under a statute of which the Commissioner has the general administration (s 2(1) of the Administration Act and s 5-1 in Sched 1 of that statute; s 995-1 of the 1997 Act). The consequence is that liabilities for income tax and GST are within the scope of these provisions. The pendency of the Administration Act does not impede recovery in the meantime. Section 14ZZM of the Administration Act provides: the AAT proceedings under Pt IVC of 19 [2008] HCA 33. 20 A New Tax System (Tax Administration) Act 1999 (Cth), Sched 2, Pt 2, Items 25 and 26. 21 By the Tax Laws Amendment (Repeal of Inoperative Provisions) Act 2006 (Cth), Sched 1, Item 160. Gummow ACJ Crennan "The fact that a review [by the AAT] is pending in relation to a taxation decision does not in the meantime interfere with, or affect, the decision and any tax, additional tax or other amount may be recovered as if no review were pending." A "taxation decision" is "the assessment, determination, notice or decision against which a taxation objection may be, or has been, made" (s 14ZQ). Section 14ZZR is a provision with corresponding operation with respect to pending Federal Court "appeals". It will be necessary later in these reasons to say something further as to what litigious activity is encompassed by the phrase in these sections "may be recovered". With respect to GST, further relevant provisions were made in the Administration Act by Pt VI (ss 19-70). Part VI was repealed in 200622 and replaced by provisions in Sched 1 to the Administration Act. At any time the Commissioner may make an assessment of the "net amount" in respect of a taxpayer for a tax period (s 22, now s 105-5 in Sched 1)23. Notice of the assessment must be given (s 25, s 105-20). Further, the GST Act empowers the Commissioner to negate GST schemes by declarations stating an amount as the "net amount" for a specific tax period (s 165-40(a)). Assessments and declarations in respect of the GST were made in respect of Neutral Bay and Howard Racing. The Administration Act (Sched 1, s 105-40, formerly s 62) provides for objections in the manner set out in Pt IVC. Section 105-100 of the Administration Act, Sched 1 (formerly s 59) is a "conclusive evidence" provision which applies both to GST assessments and declarations. It is relevantly indistinguishable from s 177(1) of the Assessment Act. Section 14ZZM of the Administration Act applies to the Pt IVC proceedings in the AAT respecting the GST liabilities of Neutral Bay and With respect to Neutral Bay and Howard Racing, the components of the RBA deficit debts specified in the statutory demands, in addition to the liabilities 22 By the Fuel Tax (Consequential and Transitional Provisions) Act 2006 (Cth). 23 In general terms, the "net amount" for a tax period is derived from the formula "GST - input tax credits": GST Act, s 17-5. Gummow ACJ Crennan flowing from the GST assessments and declarations, included amounts for (i) "failure penalties, (iii) "administrative overpayments", and (iv) "general interest charges". to withhold" penalties, shortfall" (ii) "tax As to (i), these were penalties for failures to withhold amounts from contractors who had not quoted Australian Business Numbers; the penalties are in amounts equal to the amounts not withheld24. The Commissioner partly remitted the penalties25 but the decision to make only that limited remission is challenged in the review proceedings in the AAT under Pt IVC. As to (ii), the "tax shortfall penalties" were assessed under Subdiv 284-B of the Administration Act, Sched 1. With respect to these penalties, s 298-30 states: "(1) The Commissioner must make an assessment of the amount of an administrative penalty under Division 284. (2) An entity that is dissatisfied with such an assessment made about the entity may object against it in the manner set out in Part IVC of [the Administration Act]. The production of a notice of such an assessment, or of a copy of it certified by or on behalf of the Commissioner, is conclusive evidence of the making of the assessment and of the particulars in Subsection (3) does not apply to proceedings under Part IVC of [the Administration Act] on a review or appeal relating to the assessment." These penalties are challenged in the review proceedings in the AAT. As to (iii), the administrative overpayments represent amounts paid by the Commissioner to Neutral Bay and Howard Racing as input tax credits. The Commissioner treats as debts due by the taxpayers and payable under the the Administration Act moneys being in respect of amounts paid by 24 Administration Act, Sched 1, s 16-30. 25 Administration Act, Sched 1, s 16-45. This provision has since been repealed by the Tax Laws Amendment (2006 Measures No 2) Act 2006 (Cth). Gummow ACJ Crennan Commissioner by mistake (s 8AAZN(3)). The mistaken nature of the payments depends upon the correctness of the GST assessments and declarations. The remaining amounts, the "general interest charges", are provided for in the Administration Act26, principally as charges for failing to meet various payment obligations. The charges are "tax-related liabilities"27 and are due to the Commonwealth and payable to the Commissioner under s 255-5 of the Administration Act, Sched 1, to which reference has been made above. They are the product of the other amounts included in the RBA deficit debts of Neutral Bay and Howard Racing which are challenged in the review proceedings in the AAT. The certificates issued by the Commissioner under s 255-45 of the Administration Act, Sched 1, as to the amounts of administrative overpayments and general interest charges are prima facie evidence thereof in recovery proceedings (s 255-45(1)). In the Court of Appeal, the Commissioner accepted that the application of the general interest charges to certain administrative overpayments was open to genuine dispute and that the statutory demands ought to be varied to that extent. This state of affairs will be reflected in the orders to be made in this Court on the Neutral Bay and Howard Racing appeals. The significance of the taxation legislation As indicated above, the familiar "conclusive evidence" provision of s 177(1) of the Assessment Act, significant for Broadbeach, is reflected in the terms of s 105-100 in Sched 1 to the Administration Act (with respect to GST notices of assessment and declarations) and s 298-30 in Sched 1 (with respect to administrative penalties including tax shortfall penalties), which are significant for Neutral Bay and Howard Racing. The apparent asperity with which s 177(1) operates and its impact upon what otherwise may be avenues open to taxpayers when defending recovery proceedings has attracted comment in various decisions, including those of this Court. Section 177 is found in Pt IV of the Assessment Act but was linked to ss 208 and 209 which appeared in Pt VI. In F J Bloemen Pty Ltd v Federal Commissioner of Taxation28, Mason and Wilson JJ remarked: 26 Pt IIA, Div 1 (ss 8AAA-8AAH). 27 Administration Act, Sched 1, s 250-10(2), Item 70. 28 (1981) 147 CLR 360 at 375; [1981] HCA 27. Gummow ACJ Crennan "[The appellants] point to the fact that notwithstanding that the assessment may be under review or appeal β¦ the tax assessed is payable and the Commissioner has access to the extensive powers prescribed in Pt VI ... It is true that Pt VI contains large powers to enable the recovery of tax; powers the exercise of which may make life uncomfortable both for the taxpayer and perhaps others who owe money to the taxpayer. So much may be conceded, but [the Assessment Act] does not proceed upon the hypothesis that the Commissioner will be motivated in the exercise of his powers by improper or collateral purposes." The reference by Mason and Wilson JJ to the position of taxpayers may be thought to extend particularly to the position of directors of a corporate taxpayer which is a trading corporation. At a time when the provision for objections and appeals was found in Pt V of the Assessment Act, Mason ACJ said in Clyne v Deputy Commissioner of "I was informed that it is a somewhat unusual course for the Deputy Commissioner to commence proceedings for recovery in a court relying on a notice of assessment which is under challenge in proceedings under [the Assessment Act]. It is to be hoped that this is so. The institution of proceedings for recovery on a notice of assessment which is challenged in proceedings under [the Assessment Act] may operate oppressively and unfairly to a taxpayer ... In the ultimate analysis the Deputy Commissioner's charter to commence recovery proceedings, notwithstanding a challenge β¦ to the correctness of the assessment, is to be found in s 201 of [the Assessment Act]. It provides: 'The fact that an appeal or reference is pending shall not in the meantime interfere with or affect the assessment the subject of the appeal or reference; and income tax may be recovered on the assessment as if no appeal or reference were pending.' It is a provision which has been stringently criticized. However, it appears to be impervious to criticism for Parliament has not seen fit to amend it." 29 (1982) 56 ALJR 857 at 858-859; 43 ALR 342 at 344. Gummow ACJ Crennan But harsh though the operation of these provisions may be, they implement a long-standing legislative policy to protect the interests of the revenue. In Deputy Commissioner of Taxation v Niblett30, Asprey J struck out pleas of non-liability to a recovery action instituted by the Deputy Commissioner in the Supreme Court of New South Wales while objections were pending under what was then s 185 of the Assessment Act. His Honour observed: "It may be thought to be a hardship that a taxpayer should have to pay the tax assessed when an objection to the assessment has not been decided upon but there are obvious financial considerations of high policy that must be weighed in the balance against cases of individual hardship with which the Commissioner through the appropriate use of his powers under [the Assessment Act] can cope ... Where the meaning of the words of a statute is clear 'it is not open to the Court to narrow or whittle down the operation of the Act by seeming considerations of hardship or of business convenience or the like' β Attorney-General v Carlton Bank31." Thereafter, Bowen CJ in Eq, when dealing with resistance by the taxpayer to the making of a winding up order, said in Deputy Federal Commissioner of Taxation v Roma Industries Pty Ltd32: "The next question which arises is whether the amount claimed by the Commissioner should be treated as a disputed claim, and an order be refused on this ground. In one sense, of course, the Commissioner's claim is disputed, because appeals to the Board of Review have been lodged. However, the provisions of s 201 of [the Assessment Act] require me to treat the debt as in effect undisputed. Such a statutory provision may in some cases lead to hardship on a taxpayer, particularly where he has paid the amount of tax assessed and later wins his appeal, whereupon the money is repaid to him without interest. This led Higgins J in Hickman v Federal Commissioner of Taxation33 to describe it as 'unjust and even 30 (1965) 83 WN (Pt 1) (NSW) 405 at 411. 31 [1899] 2 QB 158 at 164. 32 (1976) 6 ATR 54 at 57. 33 (1922) 31 CLR 232 at 245; [1922] HCA 58. Gummow ACJ Crennan baneful', but it remains in the [Assessment Act][34]. It must be appreciated that from the point of view of the revenue it is a protection against that class of taxpayer who might withhold payment and use the money as the sinews of war to conduct appeals against the Commissioner and who, being finally unsuccessful, was found to be unable to meet his tax liability, having spent his money on the litigation." (emphasis added) With regard to the reasons of Bowen CJ in Eq in Roma Industries (given in 1976) three points should now be made. The first is that the reference to repayment without interest must be treated as displaced by the enactment in 1983 of the Overpayments Act. Part III of that statute provides an interest entitlement where an amount of "relevant tax" (as defined in s 3C) is found to have been overpaid as a result of a decision to which the Overpayments Act applies (as explained in s 3(1))35. This includes successful AAT reviews and Federal Court "appeals" under Pt IVC of the Administration Act. The second point is that s 201 of the Assessment Act was repealed by the Taxation Laws Amendment Act (No 3) 1991 (Cth)36, which inserted the relevantly identical provisions of s 14ZZM and s 14ZZR in the Administration Act by way of replacement. The third point respecting Roma Industries is that the treatment there of disputed claims by the Commissioner indicates the appropriate path to be followed in reading the provisions for the setting aside of statutory demands now found in the Corporations Act. It is true that s 459G provides for curial decisions to set aside statutory demands and that grants of jurisdiction to superior courts such as the Federal Court and the Supreme Courts are not to be construed with limitations without sufficient reason to do so. The many authorities to this effect were collected by Kirby J in Aussie Vic Plant Hire37. But the provisions of the taxation legislation, 34 The comments of Higgins J were made with reference to the absence of any provision in the War-time Profits Tax Assessment Act 1917-1918 (Cth) for repayment of interest. 35 However, it follows from the definition of "relevant tax" that there is presently no interest entitlement in respect of certain penalties, such as tax shortfall penalties payable under Pt 4-25 in Sched 1 to the Administration Act. 36 Sched 4. 37 (2008) 232 CLR 314 at 331 [41]. Gummow ACJ Crennan with an eye to which the statutory demand provisions clearly were drawn38, and, in particular, the antecedents in what was s 201 of the Assessment Act and now s 14ZZM (as to pending AAT reviews) and s 14ZZR (as to pending Federal Court "appeals"), supply sufficient reason for construing the statutory demand provisions as the Commissioner contends. Something should be said here respecting a particular aspect of the approach taken in the reasoning of the Court of Appeal. This to a degree turned upon the characterisation of the RBA deficit debts as "tax debts" which were "disputed" by the companies in question. "Tax debts" which are "disputed" Undoubtedly the tax legislation by force of its provisions creates what it identifies as debts due to the Commonwealth and provides for their recovery by action. But some care is called for here. The legislature may create a duty or obligation to pay money, in particular liquidated amounts, and an action in debt is then the appropriate remedy for which the general law provides39. But in creating such a duty or obligation, the legislature may attach special incidents or characteristics which do not pertain to debts owed by one citizen to another within the sense of the general law. The true construction of the statute determines the degree of the analogy. The point is illustrated by decisions of this Court construing the use in particular statutory regimes of the terms "charge"40, "trust", "lease" and "licence"41, "indemnity"42 and "lease in perpetuity"43. 38 See s 459E(5) which refers to demands relating to income tax liability. 39 The Commonwealth v SCI Operations Pty Ltd (1998) 192 CLR 285 at 312-313 [64]-[65]; [1998] HCA 20. 40 Bailey v New South Wales Medical Defence Union Ltd (1995) 184 CLR 399 at 445-446; [1995] HCA 28. 41 Wik Peoples v Queensland (1996) 187 CLR 1 at 197; [1996] HCA 40. 42 Victorian Workcover Authority v Esso Australia Ltd (2001) 207 CLR 520 at 528-529 [15]-[16], 545 [66]; [2001] HCA 53. 43 Wilson v Anderson (2002) 213 CLR 401 at 422 [21], 434-435 [59]-[61]; [2002] HCA 29. Gummow ACJ Crennan Where statute creates a "debt" special provisions may make inapplicable, for example, pleas that might otherwise tender an issue for trial of an action to recover the debt. The situation may be demonstrated by the decision of Asprey J in Niblett44, to which reference has been made earlier in these reasons. To a recovery action by the Commissioner the taxpayer pleaded (i) "[n]ever indebted as alleged", (ii) a traverse of the allegation in the Commissioner's declaration that the money sued for was due and payable by the taxpayer, (iii) a traverse based upon the pendency of an objection to the assessment lodged with the Commissioner under s 185 of the Assessment Act, and (iv) a traverse with respect to additional tax imposed for late payment to the effect that no primary tax was due and payable. These pleas were struck out, a result which Asprey J saw as required by the provisions of the Assessment Act including ss 177, 201, 208 and 209. The Court of Appeal reasons It is with the above considerations in mind that the Commissioner makes various criticisms of the reasoning of the Court of Appeal. That reasoning is indicated by the following passages in the judgment of Keane JA45: "[T]here is no other indication in [the Assessment Act] or [the Administration Act] that a statutorily permitted challenge to the debt which has been made in conformity with this exception [in Pt IVC] must be ignored for all purposes in all proceedings which arise under all other laws. It is clearly a strong thing to say that when a court is made aware that the lawful processes whereby a tax debt may be disputed have been engaged, and it is accepted that there is an arguable basis for that challenge, nevertheless, for the purposes of s 459H of [the Corporations Act], the court cannot regard the debt as being subject to a genuine dispute, and is obliged to conclude, contrary to the evident truth of the matter, that there is not a genuine dispute as to the existence of the debt. If an intention to bring about such a fictional state of affairs is to be attributed to the legislature, that intention would need to be expressed clearly. There are good reasons to conclude that the legislature has not sought to make the court a slave to such a fiction. 44 (1965) 83 WN (Pt 1) (NSW) 405 at 411. 45 (2007) 25 ACLC 1341 at 1358-1359. Gummow ACJ Crennan In summary, the [Commissioner's] submission requires the Court to ignore the reality that the existence of the debt is being disputed, on a genuine basis, in a forum which is competent to set the assessment, and hence the debt, aside. This requirement is not apparent in the language of the tax legislation or [the Corporations Act]." (emphasis added) There is in these passages, the Commissioner correctly submits, a failure to recognise distinctions, clearly drawn in the legislative scheme, between, on the one hand, the existence of a debt which is due and payable and, on the other, the issues in and outcome of a Pt IVC proceeding. As well, incorrect distinctions also are drawn between the "setting aside" of an assessment and hence the existence of a debt and the denial in a s 459G application of competence to give effect to an "evident truth". The Commissioner's submissions involve no suppression of "truth" or requirement to observe a fictional state of affairs. First, as was explained in Futuris46, the source of the debt is to be located in the statutory consequences given to an assessment (and a GST declaration) formerly by ss 208 and 209 of the Assessment Act, now by s 255-5 in Sched 1 to the Administration Act. Neither the AAT nor the Federal Court is empowered by Pt IVC to vary assessments. That is for the Commissioner who is charged by s 14ZZL and s 14ZZQ respectively to amend assessments (and determinations) to give effect to decisions of the AAT and the Federal Court. Secondly, the relevant "truth" or "reality" is that disclosed by the operation of the taxation laws with respect to the "tax debts". It is the special character thus given to these "debts" to which the statutory demand provisions of the Corporations Act then speak. Nothing turns upon the attribution to a s 459G application of the character of a proceeding in which, as Keane JA said, a tax debt may be disputed by the applicant taxpayer. Section 459G applications by taxpayers are not Pt IVC proceedings and production by the Commissioner of the notices of assessment and of the GST declarations conclusively demonstrates that the amounts and particulars in the assessments and declarations are correct47. That being so, the operation of the provisions in the taxation laws creating the debts and providing 46 [2008] HCA 32 at [20]. 47 Administration Act, Sched 1, s 105-100; Assessment Act, s 177(1). Gummow ACJ Crennan for their recovery by the Commissioner cannot be sidestepped in an application by a taxpayer under s 459G of the Corporations Act to set aside a statutory demand by the Commissioner. The matter was explained, with respect correctly, by Williams J in Bluehaven Transport Pty Ltd v Commissioner of Taxation48. The use by the Commissioner of the statutory demand procedure in aid of a winding up application is in the course of recovery of the relevant indebtedness to the Commonwealth by a permissible legal avenue. The phrase "may be recovered" in ss 14ZZM and 14ZZR of the Administration Act applies to the statutory demand procedure. That state of affairs places the existence and amounts of the "tax debts" outside the area for a "genuine dispute" for the purposes of s 459H(1) of the Corporations Act. Section 459J of the Corporations Act Something should be added respecting the additional alternative ground found in par (b) of s 459J(1) of the Corporations Act. That was that the statutory demands were to be set aside because the Court of Appeal and the primary judge were "satisfied" that, although there were no defects in the demands, there was "some other reason" to set them aside. It first should be observed that the hypothesis in the present appeals must be, in accordance with what has been said above, that there is no "genuine dispute" within the meaning of s 459H(1). Both the primary judge and the Court of Appeal emphasised the importance of the disruption to the taxpayers, their other creditors and contributories that would ensue from a winding up, together with the absence of any suggestion that the revenue would suffer actual prejudice if the Commissioner were left to other remedies to recover the tax debts. But these considerations are ordinary incidents of reliance by the Commissioner upon the statutory demand system. Keane JA, expressing disapproval of what had been said to the opposite effect by Olney J in Kalis Nominees Pty Ltd v Deputy Commissioner of Taxation49, held that the scope of the discretion conferred by par (b) of s 459J(1) should be determined by the subject matter and purposes of the Corporations Act, 48 (2000) 157 FLR 26 at 32. 49 (1995) 31 ATR 188 at 193. Gummow ACJ Crennan to the exclusion of "the tax law"50. But, as remarked earlier in these reasons, Pt 5.4 contemplates that the "debts" in respect of which statutory demands may issue will include "tax debts" in the sense given to that expression in these reasons. The "material considerations"51 which are to be taken into account, on an application to set aside a statutory demand, when determining the existence of the necessary satisfaction for par (b) of s 459J(1) must include the legislative policy, manifested in s 14ZZM and s 14ZZR of the Administration Act, respecting the recovery of tax debts notwithstanding the pendency of Pt IVC proceedings. The result is that the exercise of discretion by the primary judge under s 459J(1)(b) miscarried, and the Court of Appeal erred in upholding and supplementing it. Against the possibility of this Court so concluding, the respondents submitted that the matter should be remitted to the Supreme Court for re-exercise of the discretion under that provision. However, no fresh ground upon which the respondents might then succeed was suggested beyond reference to the time which has elapsed and the progression of the Pt IVC proceedings towards determination. But such a consideration, if it were supported by evidence of the state of progression of the Pt IVC proceedings, would be relevant in the operation of Pt 5.4 of the Corporations Act, if at all, at the later stage of the hearing of any winding up application. There should be no re-exercise of the discretion conferred by s 459J(1)(b). A remaining point The respondents fixed upon the apparent importance given in the scheme of the taxation legislation to the consequences of assessments (and GST declarations), which is indicated by s 177(1) of the Assessment Act and by s 105-100 in Sched 1 to the Administration Act. Reference was then made to the position of Broadbeach as a "full self-assessment taxpayer" to whom s 204(1A) of the Assessment Act applied52. This provision makes special temporal provision for the tax payable by such taxpayers which, at first blush, does not depend upon the giving of a notice 50 (2007) 25 ACLC 1341 at 1361. 51 See House v The King (1936) 55 CLR 499 at 505; [1936] HCA 40. 52 Section 204(1A) was inserted by the A New Tax System (Tax Administration) Act 1999 (Cth), Sched 16, Item 14. Gummow ACJ Crennan of assessment. That may be thought to depart from the scheme of s 204. But s 166A(3) of the Assessment Act deems an assessment to have been made by the Commissioner on the day the return by the self-assessed taxpayer is lodged and the return is then taken to be the notice of assessment. No relevant consequence follows in these appeals from the status of Broadbeach as a full self-assessment taxpayer. Orders The appeals should be allowed. Order 1 of the orders made in each appeal to the Court of Appeal should be set aside. With respect to the Broadbeach appeal, in place of order 1 made by the Court of Appeal, the appeal to that Court should be allowed and order 1 made by the primary judge on the s 459G application filed on 6 June 2006 should be set aside and replaced with an order dismissing that application. With respect to the Neutral Bay and Howard Racing appeals, and as indicated earlier in these reasons53, in place of order 1 made by the Court of Appeal, in each proceeding the appeal to that Court should be allowed, order 1 made by the primary judge on the s 459G application filed on 18 May 2006 should be set aside and the matter remitted to a Judge of the Supreme Court for determination of the appropriate variation of the statutory demand. As already noted, the Commissioner submits to the making of an order in each proceeding for payment of the costs of each respondent in this Court. Kirby KIRBY J. The facts, legislation and issues in these appeals are explained in the reasons of Gummow ACJ, Heydon, Crennan and Kiefel JJ ("the joint reasons"). As there stated, the resolution of the appeals is to be reached bearing in mind the recent decisions of this Court in Commissioner of Taxation v Futuris Corporation Ltd54 and WR Carpenter Holdings Pty Ltd v Commissioner of Taxation55. Moreover, the approach to be taken to the issues arising under the Corporations Act 2001 (Cth) must conform to the views adopted by the majority of this Court in Aussie Vic Plant Hire Pty Ltd v Esanda Finance Corporation Ltd56. I dissented in Aussie Vic. However, I accept that I must now follow the approach adopted in the joint reasons in that decision. I was party to the joint reasons in Carpenter and, in Futuris, I reached the same orders as the other members of the Court but by a different route, avoiding consideration of the operation (and constitutional validity) of s 177(1) of the Income Tax Assessment Act 1936 (Cth) ("the Assessment Act"). Section 177 is specifically relied on by the Deputy Commissioner in these appeals57. As in Futuris, no argument was advanced by the present respondents challenging the constitutional validity of s 177(1) of the Assessment Act. Nor, in these appeals, was there any separate argument based on the discretionary character of the provision of relief because of the availability to the respondents of the proceedings under Pt IVC of the Taxation Administration Act 1953 (Cth). In these circumstances, it is appropriate for me to deal with these appeals within the framework of the arguments advanced by the parties. The heroic task of considering and deciding issues which those parties have elected not to argue is beyond my present inclination (even if, on the record, it would be proper for me to venture upon it)58. Approaching the issues in the appeals in the ways advanced by the parties, as explained in the joint reasons, and applying the relevant intersecting 54 [2008] HCA 32. 55 [2008] HCA 33. 56 (2008) 232 CLR 314 at 322-325 [11]-[18]; [2008] HCA 9. 57 [2008] HCATrans 244 at lines 1653-1655. 58 Australian Competition and Consumer Commission v Baxter Healthcare Pty Ltd (2007) 232 CLR 1 at 13 [2] per Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ, 52 [118], 56 [135] of my own reasons, 62 [154] per Callinan J; [2007] HCA 38. Kirby legislation at face value, I am brought to the same conclusion as in the joint reasons, generally for the same reasons. I therefore agree in the orders proposed in the joint reasons. |
HIGH COURT OF AUSTRALIA APPELLANT AND THE QUEEN RESPONDENT [2022] HCA 25 Date of Hearing: 15 June 2022 Date of Judgment: 10 August 2022 ORDER Appeal allowed. Set aside the order made by the Full Court of the Supreme Court of South Australia on 2 November 2020. Remit the matter to the Court of Appeal of the Supreme Court of South Australia for rehearing. On appeal from the Supreme Court of South Australia Representation T A Game SC with K G Handshin QC and K J Edwards for the appellant (instructed by Nathan White Lawyers) M G Hinton QC with D Petraccaro SC for the respondent (instructed by Office of the Director of Public Prosecutions (SA)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Criminal practice β Appeal β Where appellant tried and convicted of murder of wife by judge alone in Supreme Court of South Australia β Where appellant appealed conviction on ground that verdict unreasonable or could not be supported having regard to whole of evidence β Whether Full Court of Supreme Court of South Australia sitting as Court of Criminal Appeal misapplied test in M v The Queen (1994) 181 CLR 487 β Function of court of criminal appeal determining appeal against conviction on unreasonableness ground following trial by judge alone. Words and phrases β "advantage in seeing and hearing the evidence", "circumstantial case", "function of a court of criminal appeal", "independent assessment of the evidence", "inference of guilt", "jury questions", "pathway to proof of guilt", "unreasonable verdict", "unreasonableness ground". Criminal Procedure Act 1921 (SA), s 158(1)(a). GAGELER, KEANE, GORDON, STEWARD AND GLEESON JJ. The appellant was tried in the Supreme Court of South Australia for the murder of his wife. At his election, the trial proceeded without a jury. The trial judge, Lovell J, found him guilty of murder1. As a consequence, he was convicted and sentenced to life imprisonment with a non-parole period of 25 years. The appellant appealed against his conviction to the Full Court of the Supreme Court of South Australia, sitting as the Court of Criminal Appeal. The grounds of appeal included that the verdict could not be supported having regard to the evidence. The Court of Criminal Appeal, by majority, rejected that ground and dismissed the appeal2. The majority was comprised of Parker and Livesey JJ. By special leave, the appellant now appeals to this Court from the decision of the Court of Criminal Appeal. The sole ground of the appeal to this Court is that the majority in the Court of Criminal Appeal erred in how it approached the ground that the verdict was unreasonable or could not be supported having regard to the evidence. The appellant argues that the majority misinterpreted and misapplied the approach required to be taken to that ground in accordance with M v The Queen3 as applied in Filippou v The Queen4. The appellant's argument is well founded. The appeal must be allowed. The order of the Court of Criminal Appeal dismissing the appeal against the conviction must be set aside, and the matter must be remitted for rehearing. The requisite approach The Juries Act 1927 (SA) makes provision for a criminal trial before the Supreme Court to proceed without a jury at the election of the accused5, in which event "the judge may make any decision that could have been made by a jury and 1 R v Dansie [2019] SASC 215. 2 Dansie v The Queen [2020] SASCFC 103. (1994) 181 CLR 487. (2015) 256 CLR 47. Section 7(1). Gordon Steward Gleeson such a decision will, for all purposes, have the same effect as a verdict of a jury"6. The "decision" of the judge thereby given the same effect as the verdict of a jury is the ultimate finding of the judge that the accused is guilty or not guilty of the offence tried. Not spelt out in any South Australian statute7, but implicit in the conferral of the trial function on a judge alone, is that "a judge returning a verdict following a trial without a jury is obliged to give reasons sufficient to identify the principles of law applied by the judge and the main factual findings on which the judge relied"8. Justifications for recognising that obligation of the trial judge to give reasons include the inability of the Court of Criminal Appeal, in the absence of reasons from the trial judge, to undertake the assessment required of it by s 158(1)(b) and (c) of the Criminal Procedure Act 1921 (SA) when determining on an appeal against conviction "whether the judge has correctly applied the relevant rules of law ... to correct a verdict affected by a wrong decision on any question of law"9 and "whether there has been a miscarriage of justice as a result of the manner in which the conclusion of guilt was reached"10. Nevertheless, as the decision under appeal illustrates, undue attention to the factual findings on which the trial judge relied in returning a verdict of guilty can distract the Court of Criminal Appeal from the proper performance of the assessment required of it by s 158(1)(a) of the Criminal Procedure Act when determining on an appeal against conviction whether the verdict "should be set aside on the ground that it is unreasonable or cannot be supported having regard to the evidence". That is because the function to be performed by the Court of Criminal Appeal when determining an appeal on the unreasonable verdict ground is not to determine whether there was error in the factual findings on which the trial judge relied in ultimately finding the accused guilty of the offence tried. The function to be performed by the Court of Criminal Appeal is to determine for itself Section 7(4). 7 Compare s 133 of the Criminal Procedure Act 1986 (NSW). 8 Douglass v The Queen (2012) 86 ALJR 1086 at 1089 [8]; 290 ALR 699 at 702. See also DL v The Queen (2018) 266 CLR 1 at 26 [80], 45 [132]. 9 R v Keyte (2000) 78 SASR 68 at 76 [38] (cleaned up). See also Douglass v The Queen (2012) 86 ALJR 1086 at 1090 [14]; 209 ALR 699 at 703. 10 R v Keyte (2000) 78 SASR 68 at 76 [38]. Gordon Steward Gleeson whether the evidence was sufficient in nature and quality to eliminate any reasonable doubt that the accused is guilty of that offence. That understanding of the function to be performed by a court of criminal appeal in determining an appeal on the unreasonable verdict ground of a common form criminal appeal statute was settled by this Court in M. The reasoning in the joint judgment in that case establishes that "the question which the court must ask itself" when performing that function is "whether it thinks that upon the whole of the evidence it was open to the jury to be satisfied beyond reasonable doubt that the accused was guilty"11, that question being "one of fact which the court must decide by making its own independent assessment of the evidence"12. The joint judgment in M made clear that "in answering that question the court must not disregard or discount either the consideration that the jury is the body entrusted with the primary responsibility of determining guilt or innocence, or the consideration that the jury has had the benefit of having seen and heard the witnesses"13. The joint judgment equally made clear how those considerations are to impact on the court's independent assessment of the evidence. That was the point of the carefully crafted passage in which their Honours stated14: "It is only where a juryβs advantage in seeing and hearing the evidence is capable of resolving a doubt experienced by a court of criminal appeal that the court may conclude that no miscarriage of justice occurred [on the unreasonable verdict ground]. That is to say, where the evidence lacks credibility for reasons which are not explained by the manner in which it was given, a reasonable doubt experienced by the court is a doubt which a reasonable jury ought to have experienced. If the evidence, upon the record itself, contains discrepancies, displays inadequacies, is tainted or otherwise lacks probative force in such a way as to lead the court of criminal appeal to conclude that, even making full allowance for the advantages enjoyed by a jury, there is a significant possibility that an innocent person has been convicted, then the court is bound to act and to set aside a verdict based upon that evidence. In doing so, the court is not substituting trial by a court (1994) 181 CLR 487 at 493. See also at 508. (1994) 181 CLR 487 at 492. (1994) 181 CLR 487 at 493. (1994) 181 CLR 487 at 494-495 (footnotes omitted). Gordon Steward Gleeson of appeal for trial by jury, for the ultimate question must always be whether the court thinks that upon the whole of the evidence it was open to the jury to be satisfied beyond reasonable doubt that the accused was guilty." That passage was immediately followed in the joint judgment in M with an explanation that "[a]lthough the propositions stated in the four preceding sentences have been variously expressed in judgments of members of the Court in previous cases, we have put aside those differences in expression in order to provide authoritative guidance to courts of criminal appeal by stating the propositions in the form in which they are set out above"15. As a consequence of M, prior formulations of principle to be found in numerous decisions on the unreasonable verdict ground which preceded M must be approached with caution. Indeed, some prior formulations are irreconcilable with the key passages in M and must be understood to have been overtaken by M. One example is to be found in the judgment of Menzies J in Plomp v The Queen16, on which reliance was placed by the majority in the decision under appeal. Menzies J identified the question arising on the unreasonable verdict ground in Plomp as being "not whether this Court [standing in the shoes of the court of criminal appeal] thinks that the only rational hypothesis open upon the evidence was that the applicant [for special leave to appeal] drowned his wife" but "rather whether this Court thinks that upon the evidence it was open to the jury to be satisfied beyond reasonable doubt that the death of the deceased was not accidental but was the work of the applicant"17. Menzies J went on to answer the question so framed by agreeing with the court of criminal appeal below "that there was sufficient evidence upon which the jury, fulfilling their duty not to convict unless the inference of guilt was the only inference which they considered that they could rationally draw from the circumstances, could have convicted the applicant"18. The deference to the inference of guilt inherent in the verdict returned by the jury reflected in those statements does not accord with the approach to the exercise of the appellate function set out in the joint judgment in M. (1994) 181 CLR 487 at 495. (1963) 110 CLR 234. (1963) 110 CLR 234 at 247. (1963) 110 CLR 234 at 252. Contrast Dixon CJ at 244. Gordon Steward Gleeson The authoritative guidance to be gained from the joint judgment in M has not diminished with time. M was unanimously affirmed in MFA v The Queen19 and again in SKA v The Queen20, where it was spelt out that the "test set down in M" required a court of criminal appeal to undertake an "independent assessment of the evidence, both as to its sufficiency and its quality"21 and that consideration of what might be labelled "jury" questions does not lie beyond the scope of that assessment22. Coughlan v The Queen23 illustrates that an independent assessment of the evidence in a case in which the evidence at trial was substantially circumstantial requires the court of criminal appeal itself "to weigh all the circumstances in deciding whether it was open to the jury to draw the ultimate inference that guilt has been proved to the criminal standard" and in so doing to form its own judgment as to whether "the prosecution has failed to exclude an inference consistent with innocence that was reasonably open". Pell v The Queen24 makes clear that nothing said in Libke v The Queen25, to which repeated reference was made in the decision under appeal, should be understood to have departed from M. Pell itself was a case in which discrepancies and inadequacies in the evidence ought to have led a court of criminal appeal to experience a reasonable doubt which was incapable of being resolved by the advantages, which the jury was acknowledged to have had, in assessing the credibility and reliability of testimony available to the court on appeal only in the form of audio-visual recordings26. (2002) 213 CLR 606 at 614-615 [25], 623-624 [55]-[59]. (2011) 243 CLR 400 at 405-406 [11]-[14], 412 [37], 422 [80]. (2011) 243 CLR 400 at 406 [14], quoting Morris v The Queen (1987) 163 CLR 454 (2011) 243 CLR 400 at 407 [18], 409 [23]. (2020) 267 CLR 654 at 674-675 [55]. (2020) 268 CLR 123 at 146-147 [43]-[45]. (2007) 230 CLR 559. 26 See (2020) 268 CLR 123 at 144-145 [37]-[39]. Gordon Steward Gleeson R v Baden-Clay27, on which reliance was also placed by the majority in the decision under appeal, was a case in which the jury had the distinct advantage of having seen and heard the evidence of the accused. The observation in Baden-Clay to the effect that setting aside a conviction on the unreasonableness ground "is a serious step, not to be taken without particular regard to the advantage enjoyed by the jury over a court of appeal which has not seen or heard the witnesses called at trial"28 was made with reference to M and must be understood in that context. Filippou confirmed that the function of a court of criminal appeal determining an appeal on the unreasonable verdict ground is to be performed under the guidance of M in exactly the same way where the trial has been by judge alone as where the trial has been by jury29. In each case, the court must conduct an independent assessment of the whole of the evidence to ask itself the question of fact whether it thinks it was open to the tribunal of fact to be satisfied beyond reasonable doubt that the accused was guilty. In each case, the court "will conclude that it was not open to the tribunal of fact to be satisfied beyond reasonable doubt that the accused was guilty if its own [assessment] of the evidence leads it to have a reasonable doubt that the accused was guilty, unless that tribunal's advantage in seeing and hearing the evidence is capable of resolving that doubt"30. Where the trial has been by judge alone, the reasons of the trial judge must be approached by the court of criminal appeal performing that function with circumspection lest the findings of fact made by the trial judge divert the court from undertaking the requisite independent assessment of the evidence. The court will be required to consider the arguments of the parties in the appeal and will be entitled to treat findings of fact made by the trial judge about which no issue is taken in the appeal as an accurate reflection of so much of the evidence as bore on those findings. But the question for the court in every case will remain whether the court's assessment of the totality of the evidence leaves the court with a reasonable doubt as to guilt which the court cannot assuage by having regard to such (2016) 258 CLR 308. (2016) 258 CLR 308 at 329 [65]. (2015) 256 CLR 47 at 54 [12], 75 [82]. (2015) 256 CLR 47 at 75 [82], citing M v The Queen (1994) 181 CLR 487 at 493-494 and SKA v The Queen (2011) 243 CLR 400 at 405-406 [11]-[14]. See also (2015) 256 CLR 47 at 53-54 [12]. Gordon Steward Gleeson advantage as the trial judge can be taken to have had by reason of having seen and heard the evidence at trial. The advantage that a trial judge might have had over a court of criminal appeal by reason of having seen and heard the evidence at trial will vary from case to case depending on the form in which the evidence was adduced at the trial and depending on the nature of the issues that arose at the trial. In a case such as the present, where the prosecution case was circumstantial, where the evidence adduced by the prosecution was largely uncontested and for the most part in the form of transcripts of unchallenged testimony, and where the appellant did not give evidence, the advantage must be slight. The trial The offence for which the appellant was tried, and of which he was found guilty by Lovell J, was that he murdered his wife on 16 April 2017. The appellant and his wife had then been married for more than 40 years. His wife had long suffered from physical and cognitive disabilities as a result of a stroke in 1995 which had resulted by 2015 in her becoming wheelchair dependent and living permanently in a nursing home. During the afternoon of 16 April 2017, the appellant had taken her by car from the nursing home to the South Parklands in Adelaide. There he had positioned her wheelchair near a pond that was just over a metre deep. The appellant called emergency services on his mobile telephone shortly before 6.30pm. Ambulance officers and police officers arrived minutes later. The body of the appellant's wife was seen by them to be lying face down in the pond. The wheelchair was also in the pond. The appellant was wet to his waist. There were no witnesses to what had occurred at the pond before the officers arrived. The prosecution case was that the appellant had deliberately pushed the wheelchair into the pond with the intention of drowning his wife. The defence case was that she had drowned as a result of the wheelchair accidentally entering the water whilst the appellant was attempting to manoeuvre it away from the pond. Gordon Steward Gleeson The issue at trial was succinctly framed by Lovell J in terms of "whether the prosecution could prove that [the appellant's wife] was murdered thus excluding accidental drowning as a reasonable possibility"31. The prosecution evidence was largely uncontested. For the most part, the evidence was in documentary form. Much of it was adduced in the form of transcripts of unchallenged testimony given by witnesses who had been called at an earlier trial which had been aborted. There was extensive evidence concerning the relationship between the appellant and his wife over many years, their financial circumstances, and the appellant's role in the management of his wife's care. There was evidence concerning his wife's physical and mental condition in the months leading up to her death, concerning her post-mortem examination (which attributed the cause of her death to drowning), and concerning the topography of the pond and its immediate vicinity. There was detailed evidence of the appellant's movements on the day of his wife's death, of his call to emergency services, of his appearance and behaviour when ambulance officers and police officers arrived at the pond, of a number of subsequent interviews which he had with police, of the results of a search conducted by police of his car, which had been parked on South Terrace, of the results of a search later conducted by police of his house involving the seizure of his computer, and of telephone conversations which he later had which were intercepted and recorded. Lovell J noted that there was little dispute as to the primary facts established by the evidence. The critical question at the trial was what inferences could be drawn from those primary facts32. Lovell J drew from the primary facts pertaining to the appellant's interviews with police a number of inferences adverse to the appellant's credit33 to which his Honour then had regard in assessing the account which the appellant had given to police of what had occurred at the pond to be implausible34. In making that assessment, his Honour inferred from the appellant's behaviour during interviews with police that his relationship with his wife had changed since she had been living permanently in the nursing home, such that he had come to see her as "taking [2019] SASC 215 at [3]. [2019] SASC 215 at [25], [369]. [2019] SASC 215 at [370]-[374]. [2019] SASC 215 at [375]-[402]. Gordon Steward Gleeson up his time" and no longer had a caring relationship with her35. His Honour found that the appellant's behaviour during the call to emergency services was "demonstrative of a lack of any genuine intention or desire to help" her36. Lovell J found support for the prosecution case in the primary facts revealed by the police searches that the appellant had left certain items (his watch and wallet and a change of clothes) in his car before his wife's death and had the month before used his computer to conduct internet searches about funerals37. His Honour also found that the prosecution had established that the appellant had two distinct but interconnected motives for killing his wife38. One was a financial motive, being to reduce costs associated with her care, to obtain insurance and pension benefits and to become the sole proprietor of property which he held with his wife as joint tenants. The other was a "relationship" motive, being that he considered his wife a burden and wanted to free himself to pursue a relationship with a woman whom he had previously met on the internet and with whom he was in subsequent telephone contact. Having drawn those inferences and made those findings, his Honour concluded that the only rational inference available on the whole of the evidence was that the appellant deliberately pushed the wheelchair into the pond with intent to kill his wife and that the prosecution had therefore proved beyond a reasonable doubt that the appellant had committed the offence of murder39. The appeal against conviction The Court of Criminal Appeal unanimously rejected grounds of the appellant's appeal against his conviction which the Court interpreted as raising specific challenges to the adequacy and contents of the reasoning of Lovell J within the scope of s 158(1)(b) and (c) of the Criminal Procedure Act40. The Court of Criminal Appeal divided as to the outcome of the appeal on the unreasonableness [2019] SASC 215 at [393]-[397]. [2019] SASC 215 at [400]. [2019] SASC 215 at [403]-[408]. [2019] SASC 215 at [409]-[421]. [2019] SASC 215 at [422]-[425]. [2020] SASCFC 103 at [4], [17], [165]-[289], [408], [507]. Gordon Steward Gleeson ground, which in terms challenged his Honour's finding of guilt as unable to be supported having regard to the evidence, under s 158(1)(a) of the Criminal Procedure Act. The issue in the appeal to this Court is whether the approach to the unreasonableness ground adopted by the majority was in conformity with the test in M. Turning to examine the approach to the unreasonableness ground adopted by the majority, it is sufficient to look to the reasons for judgment of Livesey J, with whose conclusion and mode of analysis Parker J specifically agreed41. The respondent fairly emphasises that the reasons of Livesey J commence with a quotation from Filippou that restates the test in M in terms applicable to the application of the unreasonableness ground to an appeal against conviction following a trial by a judge alone42; state a conclusion in language appropriate to express the result of an orthodox application of that test ("[h]aving reviewed the evidence before [Lovell J], I do not doubt the guilt of the appellant"43); end with a recitation of principle consistent with that test44; and contain numerous references to authority which are not incorrect. The respondent also emphasises that his Honour provided an extensive account of what he understood to be the primary facts established by the evidence as found by Lovell J45 before going on to express his specific agreement with each of the inferences drawn by Lovell J adverse to the credit of the appellant as well as with each of the inferences drawn by Lovell J from the appellant's behaviour and as to the appellant's motive46. From beginning to end, however, his Honour's reasons frame the inquiry in which he saw himself as engaged as one directed to the detection of error in the [2020] SASCFC 103 at [387], [390]. [2020] SASCFC 103 at [413]. [2020] SASCFC 103 at [416]. [2020] SASCFC 103 at [506]. [2020] SASCFC 103 at [473]. [2020] SASCFC 103 at [474]-[488]. Gordon Steward Gleeson decision of the trial judge47, who was to be recognised as having the primary function of determining guilt or innocence through the drawing of inferences from the evidence48. The reasons reveal that his Honour understood that the inquiry needed to be undertaken with deference or restraint in order to give respect to the primacy of that function49. Perhaps because of the similarity of the facts (each appellant having been convicted on circumstantial evidence of the murder of his wife by drowning), his Honour placed particular reliance on the reasoning in Plomp50, and in so doing equated the question before the Court of Criminal Appeal on the unreasonable verdict ground with the question formulated and answered by Menzies J in that case51. His Honour relied on the terms in which that question was formulated and answered by Menzies J for the proposition that "[i]n a case depending on circumstantial evidence, it is not for this Court to determine whether the only rational inference to be drawn from the circumstances was guilt beyond reasonable doubt"52 and to reinforce the proposition that "responsibility for determining guilt beyond reasonable doubt, or innocence, rests with the trier of fact"53. Consistently with that understanding of the question to be answered by the Court of Criminal Appeal, his Honour proceeded on the view that "[i]t is neither necessary nor appropriate for this Court to dwell upon what might be regarded as arguments for the defence about inferences"54. "Whether the inferences tending towards guilt should or should not be drawn, and the weight to be given to each, as well as the whole of the evidence", his Honour said, "were primarily and [2020] SASCFC 103 at [422], [441], [495]. [2020] SASCFC 103 at [415], [419], [422], [426], [427], [441], [456], [472], [495]. [2020] SASCFC 103 at [435], [441]. [2020] SASCFC 103 at [451]-[456]. [2020] SASCFC 103 at [456], quoting Plomp v The Queen (1963) 110 CLR 234 at [2020] SASCFC 103 at [422], citing Plomp v The Queen (1963) 110 CLR 234 at 247. See also [2020] SASCFC 103 at [505]. [2020] SASCFC 103 at [456]. [2020] SASCFC 103 at [495]. Gordon Steward Gleeson classically matters for the trier of fact" so that "even if a piece of evidence is capable of being viewed in a manner consistent with innocence, that will not require that this Court intervene unless, for example, it has been erroneously addressed by the trial judge (so as to lead to error), or its role as part of the whole necessarily raises scope for reasonable doubt"55. Although his Honour expressed views additional to those of Lovell J as to some inferences available to be drawn from the evidence56, he did so only for the purpose of demonstrating that "there was a clear pathway to proof of guilt beyond reasonable doubt"57. What was missing from this analysis, because it had been eschewed as raising "jury" questions58, was any independent consideration of whether the evidence left open reasonable hypotheses consistent with innocence. Conversely, Nicholson J assessed this issue in detail as part of his independent assessment of the whole of the circumstantial case59. His Honour correctly and expressly recognised that this assessment required him to form a view on questions as to the inferences to be drawn notwithstanding that they might be characterised as "jury" questions60. For reasons already explained, the approach adopted by Menzies J in Plomp cannot be reconciled with the approach formulated by the joint judgment in M. The propositions which Livesey J derived from Plomp, and the view of the limited nature of his own fact-finding role on which he proceeded in accordance with those propositions, led him to fail to undertake his own independent assessment of the evidence in the manner and to the extent necessary to apply the test in M. For the Court of Criminal Appeal to be satisfied that the finding of guilt arrived at by Lovell J could be supported having regard to the evidence required more of each of its members than mere satisfaction as to lack of error in each of the findings of fact made by Lovell J in arriving at that finding of guilt. It required [2020] SASCFC 103 at [496]. 56 eg [2020] SASCFC 103 at [491]. [2020] SASCFC 103 at [493]. See also at [429]. [2020] SASCFC 103 at [494]. [2020] SASCFC 103 at [360], [379]. [2020] SASCFC 103 at [380]. Gordon Steward Gleeson more than mere satisfaction as to the existence of a pathway to proof of guilt beyond reasonable doubt61. What each member of the Court of Criminal Appeal needed to do in order to apply the test in M in the circumstances of this case was to ask whether he was independently satisfied as a result of his own assessment of the whole of the evidence adduced at the trial that the only rational inference available on that evidence was that the appellant deliberately pushed the wheelchair into the pond with intent to drown his wife and, if not, whether the satisfaction arrived at by Lovell J could be attributed to some identified advantage which Lovell J had over him in the assessment of the evidence. That is what Nicholson J did in dissent. That is what the majority did not do. Orders The application of the test in M to the evidence adduced at the trial is quintessentially a matter for the Court of Criminal Appeal. Neither party asks this Court to undertake that task. The appellant proposes and the respondent does not dispute that the orders appropriate to be made in the event of this Court finding that the majority in the Court of Criminal Appeal misapplied the test are orders which result in the matter being remitted for rehearing. The appeal is therefore to be allowed. The order of the Court of Criminal Appeal is to be set aside. The matter is to be remitted for rehearing. 61 Coughlan v The Queen (2020) 267 CLR 654 at 674-675 [55]. |
HIGH COURT OF AUSTRALIA DWN027 AND APPELLANT THE REPUBLIC OF NAURU RESPONDENT DWN027 v The Republic of Nauru [2018] HCA 20 16 May 2018 ORDER Leave to adduce the additional document produced by affidavit dated 27 April 2018 refused with costs. Leave to amend the notice of appeal refused with costs. Appeal dismissed with costs. On appeal from the Supreme Court of Nauru Representation C M Harris SC with M L L Albert for the appellant (instructed by Phi G R Kennett SC with A Aleksov for the respondent (instructed by Republic of Nauru) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS DWN027 v The Republic of Nauru Migration β Refugees β Appeal as of right from Supreme Court of Nauru β Where Secretary of Department of Justice and Border Control of Nauru ("Secretary") determined appellant not refugee under Refugees Convention Act 2012 (Nr) β Where Secretary determined Nauru did not owe appellant complementary protection under Refugees Convention Act β Where Refugee Status Review Tribunal ("Tribunal") affirmed Secretary's determinations on basis appellant could reasonably relocate within country of origin β Where Supreme Court of Nauru affirmed Tribunal's decision β Whether appellant's ability reasonably to claim for complementary protection β Whether Tribunal failed to take into account factors relevant to appellant's ability reasonably to relocate β Whether Tribunal required under Convention on the Rights of the Child (1989) to give primary consideration to best interests of appellant's child. to relocate within country of origin relevant Words and phrases β "best interests of children", "best interests of the child", internal "complementary protection", fear of relocation", persecution". "reasonable "well-founded "reasonable relocation", relocation", "refugee", "internal Convention on the Rights of the Child (1989), Arts 2, 3(1). International Covenant on Civil and Political Rights (1966). Nauru (High Court Appeals) Act 1976 (Cth), s 5. Refugees Convention Act 2012 (Nr), ss 4, 43. KIEFEL CJ, GAGELER AND NETTLE JJ. This is an appeal as of right, pursuant to s 5 of the Nauru (High Court Appeals) Act 1976 (Cth), from a judgment of the Supreme Court of Nauru (Khan J). The Supreme Court dismissed the appellant's appeal brought under s 43 of the Refugees Convention Act 2012 (Nr) ("the Refugees Act") against a decision of the Refugee Status Review Tribunal ("the Tribunal"). The Tribunal had affirmed a decision of the Secretary of the Department of Justice and Border Control, made pursuant to s 6 of the Refugees Act, to reject the appellant's application to be recognised as a refugee in accordance with the Act or as a person to whom the Republic of Nauru ("Nauru") owes complementary protection under the Act. The facts As appears from the Tribunal's reasons, at the time of the hearing before the Tribunal the appellant was a 31 year old Sunni Muslim man of Pashtun ethnicity, and the sixth of nine siblings. He was born in the Hashtnagri neighbourhood of Peshawar in the Khyber Pakhtunkhwa (KPK) province of Pakistan and, until leaving on the trip which eventually took him to Nauru, he lived there with his wife, young child, and mother, and one of his younger brothers. Three of the appellant's brothers and two of his sisters resided separately in Pakistan with their own families, while two other brothers resided in the United Arab Emirates. After completing his education, the appellant worked in his father's grocery store, and then took it over when his father retired in 2009. His father died in 2012. The appellant's case before the Tribunal The appellant's case before the Tribunal was that he was a refugee under the Refugees Act or, alternatively, that he was a person to whom Nauru owed complementary protection under the Act because his circumstances engaged Nauru's international obligations under, inter alia, the International Covenant on Civil and Political Rights (1966). The appellant's claim for protection was put on the basis that he had a well-founded fear of being persecuted by the Taliban by reason of, relevantly, his actual or imputed political opinion. He stated that, in or around 2005, one of his older brothers, Abdul Rahim, was kidnapped by the Taliban and badly beaten in an attempt to extort money from him. Abdul Rahim subsequently fled abroad to the United Arab Emirates and remained there at the time of the hearing. In 2010, one of the appellant's younger brothers, Mohammad Bilal, was targeted by the Taliban, when he was in college, in an effort to pressure him to join their cause. He, too, fled abroad and joined Abdul Rahim in the United Arab Emirates. The appellant claimed that, in or around 2009, he was badly injured in a bomb blast close to his father's grocery store which killed some 150 people. He did not Nettle claim to have been specifically targeted in that attack. The appellant said that he was also attacked and robbed in 2012, and was injured in the process, but, although his attackers were bearded and dressed like members of the Taliban, he did not claim that the attack was anything other than a random robbery. The appellant did claim, however, that the risk of being harmed by the Taliban became worse in 2013. He said that, beginning in May 2013, he was targeted in attacks by the Taliban at his business premises in the Minar Bazaar and that the attacks were different, and more significant, because he was targeted personally. He described four incidents. In the first, on 20 May 2013, he said that four Taliban entered his store and demanded that he either join their organisation or pay them 50 lakhs of rupees as "charity". He refused them outright. In the second, which he said occurred on 24 May 2013, some Taliban killed the appellant's friend, Rizwan, the proprietor of a nearby store, who had ignored a similar extortion demand. The appellant took Rizwan to hospital but he died. The appellant said that, on 30 May 2013, he had closed his store for the day and begun making his way home when the four Taliban who had previously threatened him at his store approached with guns and began chasing him. He managed to outrun them and get away. He claimed that, the following day, he locked up his store and thereafter stayed home except when it was necessary to go out for essential supplies. As to the third incident, on 3 June 2013, the appellant said that, while he was out to purchase medicine for his wife, he was fired on from a car in a market called the People Mundai, but that once again he managed to escape. He believed that it was the same Taliban who had previously attacked him who were firing from the car. He added that he had not wanted to return to that area but was unable to find what he needed closer to home. The fourth incident was said to have occurred on 16 June 2013, when the appellant was going out to purchase groceries. He said that he was run down by a car as he attempted to cross a main road, and he believed that those responsible were the same Taliban who had threatened him in his store. Following that incident, he resolved to depart Pakistan for his own safety. On the basis of that evidence, the appellant claimed that his refusal to do the Taliban's bidding gave rise to a well-founded fear of being persecuted for Convention reasons, namely, his actual or imputed political opinion, on the basis that people who do not co-operate with the Taliban are perceived to be their opponents. The Tribunal's decision The Tribunal found that, on balance, the threat of harm facing the appellant was a real one, and accepted that some Taliban in the appellant's local area maintained an adverse interest in him. The Tribunal also accepted that, if the appellant returned to Peshawar, there was a real possibility that he would Nettle once again encounter those Taliban who had threatened him in the past, in which event he would suffer persecution at their hands for the Convention reasons claimed. Thus, the Tribunal concluded that the appellant did have a well- founded fear of being persecuted for Convention reasons in his home area in Pakistan. But the Tribunal also found that the appellant could practically, safely and legally relocate to another area within Pakistan where he would not be exposed to a risk of being persecuted or of other serious harm, and that such a relocation would be reasonable in the sense that the appellant could, if he so relocated, lead a relatively normal life without facing undue hardship in all the circumstances. On that basis, the Tribunal concluded that the appellant was not a refugee. Based on the same analysis of the evidence, the Tribunal further concluded that, although the appellant would be at risk of persecution in his home area, that would not be the case if he were to relocate to another area within Pakistan and, therefore, that the Tribunal was not satisfied that he faced a real possibility of degrading or other treatment such as would enliven Nauru's international obligations to afford him complementary protection. The Supreme Court's decision In dismissing the appellant's appeal to the Supreme Court, Khan J held that the Tribunal had not erred in applying a reasonable internal relocation test to the appellant's claim for complementary protection1 and that the Tribunal had not failed to take into account the interests of the appellant's child in making the finding that the appellant could reasonably relocate within Pakistan2. Grounds of appeal The appellant's grounds of appeal to this Court are as follows: The Supreme Court of Nauru erred by failing to conclude that the Refugee Status Review Tribunal ('the Tribunal') misapplied the Nauruan law of complementary protection by identifying and applying complementary protection, where there is no such test as a matter of law as set out in s 4(2) of the Refugees Convention Act 2012 'reasonable relocation' relation test The Supreme Court of Nauru erred by failing to conclude that the Tribunal erred by failing to consider all of Nauru's international 1 See DWN027 v The Republic [2017] NRSC 77 at [41]. 2 See DWN027 v The Republic [2017] NRSC 77 at [60]. Nettle obligations when it determined whether the Appellant could relocate within Pakistan, namely its obligation to give 'primary consideration' to the best interests of the Appellant's child, in light of the Republic of Nauru's ratification of the Convention on the Rights of the Child 1989. The Tribunal erred by failing to consider an integer of the Appellant's objections to internal relocation, namely that if the Appellant returned to Pakistan other than to Peshawar he would 'be compelled to go back to the original area of persecution'." The appellant sought leave to restate Ground 3 as follows: The Supreme Court erred by failing to conclude that the Tribunal erred by failing to consider all integers of the Appellant's objections to relocation." Relevant statutory and treaty provisions The relevant statutory and treaty provisions are set out in CRI026 v The Republic of Nauru3 and need not be repeated. Ground 1: Relevance of ability reasonably to relocate to entitlement to complementary protection The arguments advanced by the appellant in support of Ground 1 were substantially the same as those advanced in CRI026 v The Republic of Nauru4. For the reasons given in that matter, they are rejected. After the hearing of the appeal, the appellant filed an affidavit providing to the Court an advance unedited version of General Comment No 4 (2017) on the implementation of article 3 of the Convention in the context of article 22, released by the United Nations Committee against Torture, which is said to have replaced CAT General Comment No 1: Implementation of Article 3 of the Convention in the Context of Article 22 (Refoulement and Communications)5. The appellant did not attempt to explain the relevance of this document to the issues that arose in the appeal, and, given its status as an advance, rather than a [2018] HCA 19 at [12]-[15]. [2018] HCA 19 at [16]-[49]. 5 16th sess, UN Doc A/53/44, annex IX, (1997). Nettle final, document, it is not apparent whether it has any force or effect. Accordingly, leave to adduce the document is refused. Ground 2: Failure to take into account Nauru's international obligation to give primary consideration to best interests of children in actions concerning children Section 4(2) of the Refugees Act provides that Nauru must not expel or return any person to the frontiers of territories in breach of Nauru's international obligations. Relevantly, Art 3(1) of the Convention on the Rights of the Child (1989) ("the CRC") provides: "In all actions concerning children, whether undertaken by ... courts of law, administrative authorities or legislative bodies, the best interests of the child shall be a primary consideration." The nub of the appellant's argument in support of Ground 2 was that the Tribunal erred in their determination of the appellant's claim for complementary protection by failing to have regard to the best interests of his child. More specifically, it was submitted that, as a party to the CRC, Nauru is bound by the international obligation in Art 3(1) to make the best interests of the child a primary consideration in all actions concerning children and, therefore, that it would be contrary to s 4(2) of the Refugees Act for Nauru to expel a non-resident contrary to the best interests of his or her children. Accordingly, it was contended, the Tribunal were bound to determine the appellant's claim for complementary protection according to the best interests of his young child, but had failed to do so. The argument raises questions as to the construction of both the CRC and the Refugees Act which it is unnecessary to address. The appellant did not contend before the Tribunal that the Tribunal were bound to decide his claim for complementary protection by reference to the best interests of his child, and, consequently, he did not adduce any persuasive evidence that his child's best interests would be adversely affected by the refusal of his claim. In the circumstances of this case, that must be regarded as determinative of the issue. Although an administrative to some extent inquisitorial and, depending on the nature and circumstances of a given application, a tribunal may be obligated to go beyond the case articulated by the applicant, the obligation to do so is confined to unarticulated claims which are apparent on the face of the material before the tribunal6. As Kirby J emphasised tribunal's process 6 See, in particular, NABE v Minister for Immigration and Multicultural and Indigenous Affairs (No 2) (2004) 144 FCR 1 at 18-19 [58], [60]. Nettle in Dranichnikov v Minister for Immigration and Multicultural Affairs7 in relation to the tribunal in that case: "The Tribunal acts in a generally inquisitorial way. This does not mean that a party before it can simply present the facts and leave it to the Tribunal to search out, and find, any available basis which theoretically the [statute creating the Tribunal] provides for relief. This Court has rejected that approach to the Tribunal's duties. The function of the Tribunal, as of the delegate, is to respond to the case that the applicant advances. A fortiori this is the function of the [appellate court] in determining any application to it for judicial review of a decision of the Tribunal." (footnotes omitted) Counsel for the appellant argued that there was evidence before the Tribunal that the appellant had a family including a young child, who, self- evidently, would need to accompany the appellant if he relocated to another place in Pakistan. In counsel's submission, that was enough to require the Tribunal to consider the best interests of that child in accordance with Arts 2 and 3 of the CRC. That argument should be rejected. The evidence before the Tribunal was that, prior to the appellant's departure from Pakistan, he had resided with his wife, young child and mother and one of his younger brothers in Peshawar. The appellant's case before the Tribunal was that it was not reasonable to expect the appellant to relocate to another place in Pakistan because the appellant's ethnicity, family commitments and lack of resources would prevent him from relocating, even if it were safe to do so. In support of that contention, the appellant gave evidence that he would be subject to racism in the place of relocation because of his ethnicity and that, because he would have to provide a guarantee to lease a house in another area, as opposed to continuing to live in the house which he owned, he would be subjected to an added financial burden. Alternatively, he said that, if he sold his house in order to finance the purchase of another house, it was possible that the Taliban would get wind of the sale and that would expose him to further risk of a Taliban attack. He also claimed that he did not know anyone living in any other cities in Pakistan and that it would be impossible for him, as a Pashtun, to establish himself in a new city without existing support networks. The appellant did not depose, however, that there was any other respect in which the best interests of his child would or could be compromised by accompanying the appellant to the place of relocation. To the (2003) 77 ALJR 1088 at 1100 [78]; 197 ALR 389 at 405; [2003] HCA 26. Nettle contrary, he gave evidence that he regarded it as being undesirable that he should be separated from the child. In the result, the appellant's case as to the unreasonableness of expecting him to relocate within Pakistan went no further than that it would be difficult because of his ethnicity, added financial burdens and the fact that his family, like him, would never be safe from risk of harm from the Taliban. And to that case the Tribunal responded, fully, as follows: "While the Tribunal acknowledges that it might take the [appellant] some time to re-establish himself in a different part of Pakistan before he would be able to have his own family join him, the Tribunal notes that the [appellant] gave evidence that his family own their home as well as the shop underneath, from which they draw rental income, and that his brothers in Peshawar are also assisting them. While the [appellant] objected to the suggestion that he might sell assets such as his shop, claiming that if he did so people would know that he had money and target him, this does not explain how anyone with such ambitions would know how to locate the [appellant], nor why such a transaction could not be carried out through an agent acting on his behalf. The Tribunal notes that the [appellant] has considerable experience as a small trader, and that according to his [refugee status determination] application form, in addition to speaking Pashto he speaks reads and writes Urdu, and also speaks and writes some English, suggesting little practical impediment to the [appellant's] relocation. With respect to the suggestion that a newly arrived Pashtun would face difficulty integrating, the Tribunal notes that Furthermore, [sic] in a recent study entitled Social Adjustment of Pathan migrants with Punjabis in Lahore (Pakistan) ... the authors found that the majority of Pathans (Pashtuns) who had moved to Lahore from KPK: want to remain living in Lahore; have renown for the local people; are satisfied with their social and cultural position; are satisfied with their life in Lahore; have good relations with their Punjabi neighbours; and consider [Punjabis] to be their co-operative friends. For these reasons, the Tribunal concludes that relocation would be reasonable for the [appellant] reasonable in the sense that he could, if he relocated, lead a relatively normal life without facing undue hardship in all the circumstances." Nettle In matters like this, it is important to bear in mind Gleeson CJ's admonishment in Appellant S395/2002 v Minister for Immigration and Multicultural Affairs8 that the system of judicial review of administrative action which operates in matters of this kind means that by the time a case reaches this Court it may be at the fifth level of decision making (or, as in this case, the fourth) after the appellant has failed at each level below. That being so, there is a real danger of an appellant seeking to put his or her case before this Court in a way that it was not put below and of the appellant criticising the reasoning of the decision maker in a manner that overlooks the forensic context in which the reasoning was expressed. For that reason, as Gleeson CJ emphasised9, the position which this Court has taken, and to which it adheres, is that, upon judicial review, the decision of the decision maker must be considered in light of the basis on which the application was put before the decision maker and not upon some entirely different basis that may only occur to the appellant's lawyers at this later stage of the process. Upon that basis, Ground 2 must be rejected. Ground 3: Failure to consider all integers of claim for complementary protection Nauru did not oppose the grant of leave to advance the restated Ground 3, but leave should be refused and Ground 3 should be rejected. The argument advanced in support of Ground 3 was that the Tribunal erred in their consideration of all of the "integers" of the appellant's claim for complementary protection in the following three respects: (1) Having made the "incomplete" statement of "[w]ith respect to the suggestion that a newly arrived Pashtun would face difficulty integrating, the Tribunal notes that Furthermore", the Tribunal then referred with apparent approval to a 2012 study of Pashtuns who had moved to Lahore, which concerned a different point from that raised in the incomplete statement. The Tribunal's acceptance of the 2012 study of Pashtuns was the Tribunal members' apparent inconsistent with one of there was acceptance, discrimination against Pashtuns. the course of the hearing, that (2003) 216 CLR 473 at 478-479 [1]; [2003] HCA 71. 9 Appellant S395/2002 v Minister for Immigration and Multicultural Affairs (2003) 216 CLR 473 at 479 [1]. Nettle The Tribunal's reasons did not refer to any of the appellant's evidence as to why he specifically would face difficulty integrating in another area within Pakistan. None of those points is persuasive, either separately or in combination. The first wrongly equates the typographical error which appears in the quoted section of the Tribunal's reasons to a substantive failure to consider a relevant issue. Reading the subject passage as a whole, there can be no doubt that the Tribunal did not intend to include the word "Furthermore". Plainly, it should have been deleted in final proofing of the reasons. Contrary, too, to the appellant's contention, the words which precede "Furthermore" are not an "incomplete" statement. When "Furthermore" is read as if deleted, as it is apparent it was intended to be, the subject passage presents as a plain statement of the appellant's claim that a newly arrived Pashtun would face difficulty integrating, followed by the Tribunal's rejection of the claim by invocation of the results of the 2012 study of Pashtuns which found that the majority of Pashtuns who moved to Lahore successfully integrated, were satisfied with the social and cultural position, and considered Punjabis to be their co-operative friends. The second point is also misconceived. The observation by the member of the Tribunal that was said to have evidenced an acceptance of the proposition that there was discrimination against Pashtuns was as follows: "And one of the reports suggests that in fact where Pashtuns are targeted, it usually seems to be Turi Shia Pashtuns. So that's relevant to the degree of risk and the probability of them tracking you down and harming you because of what has happened up in Peshawar. The other point I guess about the problems you might face, you know, in terms of discrimination by Punjabis if you were to relocate that may β well, it's not clear that there's any country information suggesting that the level of that would rise above discrimination, whether there would actually be any risk of persecution." As is apparent from the appellant's counsel's final submission to the Tribunal, the appellant accepted before the Tribunal that there was a lack of reports regarding discrimination and relied on what he asserted to be claims made by other applicants before the Tribunal: "Regarding discrimination ..... that the lack of reports regarding this issue [sic], but we believe the [T]ribunal has the experience of listening to a lot of clients and all they suggest is the fact that because of their ethnicity and their religion how they have been discriminated. And that is not something that they chose. It is something that is opposed to them. In our submission we instructed [sic] that the Taliban are able to target our client Nettle whether he relocates within Pakistan and we further instruct [sic] that the Taliban have a sophisticated intelligence network which allows the Taliban to target people who are opposed to them no matter where they are going and relocate within Pakistan. Therefore we submit relocation is not reasonable as an alternative option for our client. Returning our client to the country that he fears a well-founded β he has a fear β a well- founded fear of persecution is breaching the Nauru International Obligations." It should also be observed that members of a tribunal are entitled to make statements in the course of a hearing which might, ultimately, contradict the views to which they finally come after hearing and considering all of the evidence. More often than not (as in this case), such statements are in effect questions designed to elucidate the basis of an applicant's claim in relation to a particular issue10. The third point is wrong in fact. The evidence and submissions which the Tribunal are said to have failed to take into account are: The appellant's child, who was only 18 weeks old when the appellant left Pakistan, his wife and his dependent mother remained in Peshawar. The appellant did not speak Punjabi, the predominant language in Punjab. The appellant would need a guarantor to rent a house. There was an "inconsistency" between the Tribunal's acceptance of the possibility that the appellant's family (who continued to depend upon the house and rented store in Peshawar) might need to remain in Peshawar for some time before moving to another area within Pakistan, and the Tribunal's reasoning that the appellant could sell his house with the store underneath it in order to finance the purchase of a new house in the place of relocation. 10 See and compare Tanner v Hall (1988) 82 ALR 109 at 112-113; Bond v Australian Broadcasting Corporation (1988) 19 FCR 494 at 511; SZRUI v Minister for Immigration, Multicultural Affairs and Citizenship [2013] FCAFC 80 at [4] per Allsop CJ, [27], [33]-[34] per Flick J. See also Johnson v Johnson (2000) 201 CLR 488 at 493 [13] per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ; [2000] HCA 48. Nettle As should be apparent from the discussion of Ground 2 above, the Tribunal dealt comprehensively with the first three of those four concerns. As to the fourth, it is necessary to recall that when the matter was before the Tribunal, the only concerns which the appellant identified regarding moving to another area within Pakistan were his fear of discrimination by reason of his ethnicity; the fact that, unless he purchased a house in the place of relocation, he would have to provide a guarantee to obtain a lease; and that, if he sold his existing house in order to purchase a house in the place of relocation, the Taliban might learn of the sale and somehow trace him. Further, the only evidence which the appellant adduced as to the burden of having to arrange a lease guarantee was the bare assertion that he would have to arrange a lease guarantee. He did not suggest that he would be unable to do so or advance any reason as to why it would be unreasonable to expect him to do so, and even now none has been identified. In those circumstances, there was no inconsistency between the Tribunal's acceptance of the possibility that the appellant's family might need to remain in Peshawar for some time before moving to another area within Pakistan and the Tribunal's reasoning that the appellant could sell his house and the store underneath it to finance the purchase of a new house in another area within Pakistan. The kind of burden which one might expect to be involved in arranging a lease guarantee for single-person accommodation in the place of relocation would hardly make it an unreasonable burden for the appellant to bear. As a matter of ordinary experience, it is the kind of burden which many people are likely to face when selling one house in order to fund the acquisition of another. And if the burden of arranging such a guarantee were greater than what one might naturally expect it to be, or if there were factors which otherwise made it unreasonable to expect the appellant to bear that burden, then, for the reasons already given in relation to Ground 2, it was incumbent on him to identify what they were and to adduce evidence to establish their existence. In the absence of such identification and evidence, the Tribunal were not required to analyse, and in effect they could not have analysed, the issue to any greater extent than they did. Conclusion It follows that the appeal should be dismissed with costs. |
HIGH COURT OF AUSTRALIA AND THE QUEEN APPELLANT RESPONDENT [2016] HCA 25 15 June 2016 ORDER Appeal dismissed. On appeal from the Supreme Court of New South Wales Representation S J Odgers SC with P D Lange for the appellant (instructed by Murphy's Lawyers) L A Babb SC with N L Williams for the respondent (instructed by Solicitor for Public Prosecutions (NSW)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Criminal law β Sentencing β Where appellant appealed against severity of sentences β Where additional material produced by appellant admitted on "usual basis" that it may be taken into account if appellate court came to re-sentence β Where additional material contained evidence inconsistent with appellant's case at sentence hearing β Where appellate court found error, engaged re-sentencing appellant and refused to take into account additional material β Whether miscarriage of justice occasioned. Words and phrases β "fresh evidence", "miscarriage of justice", "power of remittal", "re-sentencing discretion", "supplemental powers", "usual basis". Criminal Appeal Act 1912 (NSW), ss 5(1)(c), 6(3), 12. FRENCH CJ, KIEFEL, BELL, GAGELER AND GORDON JJ. This appeal is concerned with the exercise of the appellate court's sentencing discretion under the common form criminal appeal provisions. Is the appellate court's assessment of whether some other sentence is warranted in law made on the evidence that was before the sentencing court, or does the exercise of the sentencing discretion afresh1 require a hearing de novo at which new evidence of the circumstances of the offence, and the causes of the offending, is to be received? As a general rule, the appellate court's assessment of whether some other sentence is warranted in law is made on the material before the sentencing court and any relevant evidence of the offender's progress towards rehabilitation in the period since the sentence hearing. For the purposes of that assessment, an offender is not permitted to run a new and different case. This general rule does not deny that an appellate court has the flexibility to receive new evidence where it is necessary to do so in order to avoid a miscarriage of justice. In this appeal, the general rule applied because the new evidence sought to be adduced by the appellant was inconsistent with the case that he ran in the sentencing court and its rejection in the circumstances did not cause justice to miscarry. Procedural history The appellant pleaded guilty in the District Court of New South Wales to wounding the complainant with intent to murder2 and detaining the complainant without her consent with intent to obtain a psychological advantage and, immediately before the detaining, occasioning actual bodily harm to her3. On 18 May 2012, the appellant was sentenced to a non-parole period of 11 years' imprisonment with a total sentence of 16 years for the offence of wounding with intent to murder, and to a concurrent fixed term of eight years' imprisonment for the detaining offence. The appellant appealed to the Court of Criminal Appeal of the Supreme Court of New South Wales (Meagher JA, Hidden J and RS Hulme AJ) against the severity of the sentences on grounds which contended error in the application of sentencing principle; none of the grounds challenged Judge Toner's factual 1 Kentwell v The Queen (2014) 252 CLR 601 at 618 [42] per French CJ, Hayne, Bell and Keane JJ; [2014] HCA 37. 2 Crimes Act 1900 (NSW) ("the Crimes Act"), s 27. 3 Crimes Act, s 86(2)(b). Bell Gordon findings. A folder of material was handed up at the commencement of the hearing in the Court of Criminal Appeal on the basis that it would be admissible in the event that the Court came to re-sentence the appellant. The prosecutor did not object to the Court receiving the material "on the usual basis". The material included reports by Dr Nielssen, a psychiatrist, and Mr Roberts, a psychotherapist. The Court of Criminal Appeal upheld two of the grounds of appeal but dismissed the appeal, having determined that no lesser sentence was warranted in law4. The Court of Criminal Appeal declined to take into account the opinions in Dr Nielssen's and Mr Roberts' reports concerning the factors that had caused or contributed to the commission of the offences. The Court held that the sentence hearing had been the occasion to address these matters and the appeal did not provide "an opportunity for a second bite of those issues."5 On 11 December 2015, Kiefel, Bell and Gageler JJ granted the appellant special leave to appeal. The sole ground of appeal is that the Court of Criminal Appeal erred in failing to take into account new evidence bearing on the causes of the appellant's offending in determining whether a less severe sentence was warranted in law6. The appellant's broad case is that the Court of Criminal Appeal wrongly confined its discretion, which he sources in s 12(1) of the Criminal Appeal Act 1912 (NSW) ("the CAA"). He submits that, once error was identified and the Court of Criminal Appeal turned to consider re-sentencing, there was little or no room to apply the restraint that governs the reception of new evidence on the hearing of the leave application or the appeal7. The appellant accepts that, had the Court of Criminal Appeal taken the new evidence to resolve inconsistencies between the opinions expressed therein and the opinions expressed in other evidence on which he relied at the sentence hearing. He submits that the proper exercise of the Court of Criminal Appeal's discretion was it would have been necessary into account, 4 Betts v The Queen [2015] NSWCCA 39 at [48] per RS Hulme AJ (Meagher JA agreeing at [1], Hidden J agreeing at [2]). 5 Betts v The Queen [2015] NSWCCA 39 at [47] per RS Hulme AJ (Meagher JA agreeing at [1], Hidden J agreeing at [2]). 6 Criminal Appeal Act 1912 (NSW), s 6(3). 7 R v Lanham [1970] 2 NSWR 217; R v Cartwright (1989) 17 NSWLR 243 at 257- 258 per Hunt and Badgery-Parker JJ; Goodwin (1990) 51 A Crim R 328 at 329 per Hunt J; Fordham (1997) 98 A Crim R 359 at 377-378 per Howie AJ. Bell Gordon to remit the proceeding to the District Court under s 12(2) of the CAA. He seeks orders in this Court setting aside the orders of the Court of Criminal Appeal, quashing the sentences imposed by Judge Toner and remitting the proceeding to the District Court. The Court of Criminal Appeal was not asked to remit the proceedings to the District Court. For that reason, their Honours were not required to consider whether the general power conferred by s 12(2) applies to the determination of an appeal under s 6(3). For the reasons to be given, the appeal must be dismissed. In this circumstance, and given that the question was not raised below, it is inappropriate to determine whether the Court of Criminal Appeal is empowered to remit the determination of an offender's sentence to the court of trial. The contention that, as a general rule, the appellate court when exercising its sentencing discretion is not confined to the material before the sentencing court is contrary to principle. This conclusion does not dispose of the appellant's narrower case, which is that, in the particular circumstances, the refusal to take into account new evidence casting light on the causes of his singular offending has resulted in a miscarriage of justice. It will be necessary to refer in some detail to the facts and the conduct of the appellant's case below in order to explain why this case must also be rejected. Before doing so, there should be reference to the principles governing the reception of new evidence on the determination of appeals under s 6(3) of the CAA. In light of the parties' submissions, there should also be some reference to the powers of the Court of Criminal Appeal in determining such appeals. The determination of appeals under s 6(3) Section 5(1)(c) of the CAA confers on a person convicted on indictment a right to appeal by leave of the Court of Criminal Appeal against the sentence passed on the person's conviction. Where leave is granted, the determination of an offender's appeal is governed by s 6(3): "[T]he court, if it is of opinion that some other sentence, whether more or less severe is warranted in law and should have been passed, shall quash the sentence and pass such other sentence in substitution therefor, and in any other case shall dismiss the appeal." Notwithstanding its wide terms, it is well settled that the Court of Criminal Appeal's power to intervene is not enlivened unless error in any of the Bell Gordon ways explained in House v The King8 is established9. The identification of error will ordinarily be by reference to the sentencing judge's reasons on the material that was before the court. However, the Court of Criminal Appeal has recognised that there are bases upon which error at first instance may be disclosed by new or fresh evidence10. Generally, the Court of Criminal Appeal insists upon proper grounds being established as a foundation for the exercise of its discretion to receive fresh evidence11. Evidence qualifies as fresh evidence if it could not have been obtained at the time of the sentence hearing by the exercise of reasonable diligence12. None of this is to deny that the Court of Criminal Appeal has the flexibility to receive new evidence where it is necessary to do so in order to avoid a miscarriage of justice13. It is accepted, however, that the appellate court may receive evidence of the offender's progress towards rehabilitation in the period since the sentence hearing14. Evidence of this description is routinely received by the Court of Criminal Appeal on the limited basis that it may be taken into account in the (1936) 55 CLR 499 at 505 per Dixon, Evatt and McTiernan JJ; [1936] HCA 40. 9 Skinner v The King (1913) 16 CLR 336 at 340 per Barton ACJ; [1913] HCA 32; Markarian v The Queen (2005) 228 CLR 357 at 370-371 [25] per Gleeson CJ, Gummow, Hayne and Callinan JJ; [2005] HCA 25; Lacey v Attorney-General (Qld) (2011) 242 CLR 573 at 579-581 [11]-[14] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ; [2011] HCA 10; and see Sidlow (1908) 1 Cr App R 28 at 29 per Lord Alverstone CJ. 10 R v Vachalec [1981] 1 NSWLR 351 at 353 per Street CJ delivering the judgment of the Court. 11 R v Lanham [1970] 2 NSWR 217 at 218. 12 Ratten v The Queen (1974) 131 CLR 510 at 517 per Barwick CJ; [1974] HCA 35. 13 Abbott (1985) 17 A Crim R 355; Goodwin (1990) 51 A Crim R 328; Araya (1992) 63 A Crim R 123 at 129-130 per Gleeson CJ; Fordham (1997) 98 A Crim R 359 at 377-378 per Howie AJ; see also Gallagher v The Queen (1986) 160 CLR 392 at 395 per Gibbs CJ; [1986] HCA 26. 14 Kentwell v The Queen (2014) 252 CLR 601 at 618 [43] per French CJ, Hayne, Bell and Keane JJ, citing Douar v The Queen (2005) 159 A Crim R 154 at 178 [124] per Bell Gordon event the Court comes to re-sentence15. It is evident that the Court of Criminal Appeal treated the material tendered on the appellant's behalf as having been admitted on this limited basis16. The appellant's argument accepts that the restraint exercised by the Court of Criminal Appeal in receiving new evidence on the hearing of a sentence appeal is an aspect of the principled administration of adversarial criminal justice. He contends that the same consideration loses its force once error is shown and the appellate court is itself engaged in the exercise of the sentencing discretion. At this stage, so the argument goes, the issue is simply whether the new evidence is admissible and whether it has the potential to affect the determination of the appropriate sentence. A submission along the same lines was rejected in R v Deng, in which it was held that the principles governing the admission of new evidence on the appeal apply to the re-sentencing discretion17. Contrary to the conclusion in Deng, the appellant submits that, once error below is demonstrated, there can be no justification for the exclusion of evidence that is capable of bearing on the appellate court's determination of the appropriate sentence for an offence. He proposes an analogy with the outcome of a successful appeal against conviction where the consequential order is for a new trial: there is no constraint on the way the accused chooses to conduct the second trial. The analogy is hardly apt. When the Court of Criminal Appeal quashes a conviction and orders a new trial18, the successful appellant is restored to the status of an unconvicted person to whom the presumption of innocence applies. The fact that the accused may choose to adduce evidence at the new trial, on which he or she did not rely at the first trial, does not undermine adversarial criminal justice. Forensic choices are made in the conduct of the offender's case at the sentence hearing. These include the material that is to be relied upon in mitigation of penalty and whether any of the facts are to be contested. The circumstance that the sentencing judge's discretion is vitiated by House error 15 R v Deng (2007) 176 A Crim R 1 at 8 [28] per James J. 16 Betts v The Queen [2015] NSWCCA 39 at [43] per RS Hulme AJ (Meagher JA agreeing at [1], Hidden J agreeing at [2]). 17 (2007) 176 A Crim R 1 at 11 [45] per James J. 18 CAA, s 8(1). Bell Gordon does not, without more, provide a reason for not holding the offender to these forensic choices. Justice does not miscarry by reason of the refusal to allow an appellant to run a new and different case on the question of re-sentence. Exceptional cases apart, the question of whether some other sentence is warranted in law is answered by consideration of the material that was before the sentencing court and any relevant evidence of post-sentence conduct. The Court of Criminal Appeal's supplemental powers Section 12 of the CAA confers wide powers on the Court of Criminal Appeal19. The chapeau to s 12(1) provides that the Court may, if it thinks it necessary or expedient in the interests of justice, have recourse to any of the powers that are set out in pars (a) to (e). Those powers enable the Court of Criminal Appeal to, among other things, order the production of any document, exhibit or other thing connected with the proceedings; compel persons (other than the appellant) to attend and give evidence before the Court of Criminal Appeal or an officer of the Court; refer questions to a commissioner for inquiry and report; and appoint assessors. In addition, the Court may: "exercise in relation to the proceedings of the court any other powers which may for the time being be exercised by the Supreme Court on appeals or applications in civil matters, and issue any warrant or other process necessary for enforcing the orders or sentences of the court: Provided that in no case shall any sentence be increased by reason of, or in consideration of any evidence that was not given at the trial." The appellant relies on the wide discretion conferred by s 12(1) on the Court of Criminal Appeal to exercise any of the powers that the Supreme Court may exercise on appeals or applications in civil matters where the Court thinks it necessary or expedient in the interests of justice. He submits that the power to receive new evidence is such a power. Accepting that is so does not advance the appellant's case. It is not in issue that the Court of Criminal Appeal has the power to receive new evidence in the determination of an appeal under s 6(3). It is unnecessary to consider whether its power to do so is confined to the supplemental powers conferred by s 12(1) or whether the power is incidental to the authority to determine an appeal against sentence under s 6(3). In either case, 19 Section 12(1) is modelled on s 9 of the Criminal Appeal Act 1907 (UK). The traced by history the enactment of Professor Pattenden: English Criminal Appeals: 1844-1994, (1996). latter statute leading the Bell Gordon for the reasons already given, when the Court of Criminal Appeal exercises its sentencing discretion, the interests of justice will not usually be served by the reception of new evidence of matters that are the subject of the sentencing court's unchallenged factual findings. The question of whether the appellate court is empowered to remit the determination of a sentence appeal under the supplemental powers conferred by s 12(1) of the CAA and its analogues is controversial20. A general power of remittal was introduced into the CAA in 198721. It is contained in s 12(2), which provides: "The Court of Criminal Appeal may remit a matter or issue to a court of trial for determination and may, in doing so, give any directions subject to which the determination is to be made." To the extent that the extrinsic material affords any assistance in identifying the object of the inclusion of the general power of remittal, it does not provide support for the conclusion that s 12(2) qualifies the conditional re- sentencing obligation imposed by s 6(3)22. 20 See R v T [1995] 2 Qd R 192; R v Wong (1995) 16 WAR 219; Webber (1996) 86 A Crim R 361 at 365 per Winneke P; R v Ferrari [1997] 2 Qd R 472; R v Palmieri [1998] 1 VR 486 at 501-502 per Charles JA; Thompson (2000) 113 A Crim R 295; R v Kreutzer (2013) 118 SASR 211 at 214 [9] per Kourakis CJ, 227 [55] per Gray 21 Criminal Appeal (Amendment) Act 1987 (NSW), s 3, Sched 1 Item 3. 22 In his speech on the second reading for the Supreme Court (Appeals) Amendment Bill and the Criminal Appeal (Amendment) Bill, the Attorney-General referred to the introduction of the general power of remitter in this way: "This power will be of great assistance in matters where, for example, there are deficiencies in the evidence or where there are further matters to be considered which can be better attended to before a first-instance judge. These bills are a rationalization of existing avenues of appeal from interlocutory applications in criminal proceedings on indictment in the District Court and the Supreme Court, while ensuring that issues can be dealt with which justice requires should be resolved prior to the completion of a trial." (Footnote continues on next page) Bell Gordon As the Court of Criminal Appeal recognised in O'Neil-Shaw v The Queen, there is a tension between the terms of s 6(3) and recourse to the power of remittal23. The utility of a power of remitter in a case such as O'Neil-Shaw, where the sentence hearing has been tainted by procedural irregularity, is evident. The question of whether it is available is not reached in this case. It might be a matter for consideration by the legislature. The Court of Criminal Appeal's refusal to take into account the additional material It remains to consider whether the Court of Criminal Appeal's refusal to take into account the additional material in the exercise of its sentencing discretion occasioned a miscarriage of justice. As earlier explained, this requires reference to the facts and to the conduct of the appellant's case in the District Court and the Court of Criminal Appeal. The conduct of the proceedings in the District Court The offences were committed on 17 April 2010. The appellant was committed for trial to the District Court and the trial was listed to commence on 27 February 2012. On that day, the appellant pleaded guilty to both offences. He was represented on that occasion by the first of the three senior counsel who have appeared for him in the proceedings. The matter was stood over for sentence hearing to 27 April 2012. The hearing was concluded on the basis of agreed facts. What follows is a summary of those facts. The agreed facts The appellant and the complainant commenced an intimate relationship around December 2007. By 5 April 2010, the relationship had broken down and the complainant had moved out of their shared apartment. They had agreed that the complainant would return to the apartment to collect her belongings on the morning of Saturday, 17 April 2010. They had also agreed that the appellant would not be at the apartment. New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 17 November 1987 at 16088-16089. 23 [2010] NSWCCA 42 at [30] per Basten JA, [56] per Johnson J. Bell Gordon The complainant had arranged for her brother, Todd, to meet her at the apartment to help her with the move. The appellant was inside the apartment when she arrived. The appellant said that he had been trying to contact her and that he wanted to talk. The appellant kept saying that there was no reason for them to be apart. The complainant responded that the damage to their relationship had already been done. They talked for over an hour. About an hour and a quarter after her arrival the complainant sent a text message to Todd saying "Give me a couple of minutes. Joel is here. Sorry." Sometime after sending this message, the complainant went to leave the apartment, telling the appellant that she was going to let Todd in. The appellant blocked the front door, took hold of her and stabbed her with a knife repeatedly in the back. There followed a murderous assault on the complainant lasting 40 to 45 minutes, during which she was stabbed many more times to the back, neck and face. In the course of this sustained attack, the appellant also stabbed himself to the chest, neck, leg and wrist. At one point, the complainant attempted to escape through the front door but the appellant took hold of her and continued his assault. She told him "You're going to go to gaol. Todd's downstairs and he will know it was you." He responded, "We will die here together. Then we can be together for eternity." The complainant believed that her only chance of survival was to weaken the appellant. She suggested that if they were going to "do this together" she should have a turn with the knife. The appellant showed her that the knife was broken. The tip was embedded in her back. He picked up another knife from the kitchen and handed it to her. The complainant stabbed him forcefully in the abdomen. Thereafter she stabbed him several more times and he continued to stab her. She again tried to escape through the front door but on this occasion the appellant was lying against it and she was too weak from her injuries to move him. At a point, the complainant's mobile telephone rang or a text alert sounded and the appellant left her to collect the phone. She managed to get out onto the balcony. The appellant pulled her back inside the apartment and she passed out. When she came to, the appellant was standing with his foot on her neck. He suggested that they both have a drink and she agreed. He took hold of a bottle of shochu, a Japanese spirit, and they both drank from it. The complainant asked, "Why did you do it?" He replied, "You kept saying that it was over. That the damage has been done." During the assault, the appellant sent text messages using the complainant's mobile telephone to the complainant's mother and to Todd. In one message, sent to Todd at 1:39pm, he wrote "We're looking like Bell Gordon staying together. For now at least. I'll call you soon. Thanks for coming today bro. X". Ultimately the complainant succeeded in escaping onto the balcony and climbing over it to the one below. From there, she succeeded in attracting the attention of passers-by, who came to her aid. She was taken to hospital where she was treated for a total of 28 stab wounds to her face, neck and back. She had also suffered two collapsed lungs and a fracture of the spinous process of the eighth thoracic vertebra. The appellant was arrested and taken to hospital, where he was treated for multiple stab wounds, including a wound from which his abdominal contents were protruding. He underwent surgery in which a section of his small bowel was removed. Following his initial discharge from hospital on 23 April, he was re-admitted for treatment of complications the following day. The appellant continues to suffer difficulties with his bowel function as a result of the abdominal wound. When the police searched the apartment, they found a piece of paper on which the appellant had written "You know I love you, but I hate you because I know I could never replace you." The appellant's case at the sentence hearing The appellant was aged 30 years at the date of the offences and 32 years at the date of the sentence hearing. He had no criminal convictions. He is a university graduate who had established his own business involving giving promotional support to charitable organisations. In 2002, he was a contestant on a television show called "Australian Survivor". The appellant gave evidence before Judge Toner. He said that he had picked up the knife from the kitchen bench just before attacking the complainant and that the decision to stab her had been a spontaneous one. He said he had written the words "You know I love you, but I hate you because I know I could never replace you" because they are the lyrics of a song that he had been learning. He accepted that the words had "resonated with me in the days following the break up". He gave no evidence of being under the effects of a hallucinogenic drug at the time of the offences. He acknowledged his responsibility for his offending and he expressed his remorse for the ordeal to which he had subjected the complainant. Bell Gordon A number of character witnesses gave evidence on the appellant's behalf attesting to the incongruity of the offending behaviour. Judge Toner accepted this evidence as demonstrating that the appellant was considered a generous, honest, loving and reliable individual. Evidence was also led to establish that, in the appellant's early teenage years and continuing into early adulthood, he had been subjected to sustained physical and emotional abuse by his stepfather. Judge Toner described the latter as a "vicious and calculating brute". His Honour found that the stepfather's behaviour had been designed to humiliate the appellant and his mother and brother and subject them to his will. A report from Dr Lake, a general practitioner, referred to counselling sessions that he had conducted with the appellant on occasions in the years between 2003 and 2008. Dr Lake recorded that the appellant had described feelings of helplessness associated with the emotional and physical abuse inflicted on his mother by his stepfather. Two reports prepared by a psychiatrist, Dr Westmore, were tendered on the appellant's behalf. In the first report, dated 3 January 2011, Dr Westmore set out the "detailed and complex history" that he had obtained from the appellant in an interview in December 2010. This history included the appellant's account that three days before the offences he had taken an illicit hallucinogenic drug known as DMT, which had felt "like a death experience". The appellant told Dr Westmore that he had taken some more DMT earlier on the morning of the offences, with the result that "I felt like I saw eternity, my mind was just overwhelmed, overcome with these things." Other features of the history included an account of the domestic violence to which the appellant and his mother had been subject. Dr Westmore's report was obtained at a time when the appellant was contemplating defending the charge of wounding with intent to murder and it is evident that the possibility of a psychiatric defence was being explored. Dr Westmore concluded that there was no clear evidence or indication to suggest that, at the time of the offences, the appellant had been suffering from a drug- induced psychosis. He considered that the appellant did not have a psychiatric defence but that it was likely that the appellant had been depressed at the time of the offending. In this regard, Dr Westmore noted the appellant had been experiencing financial difficulties, his relationship with the complainant had broken down, he was being evicted from his accommodation and he had felt "generally unsupported" at the time. Bell Gordon In September 2011, Dr Westmore was supplied with a copy of Dr Lake's report and with three pages of instructions written by the appellant concerning his experiences with the drug DMT. He was asked whether this material affected the opinions that he had expressed in his earlier report. In a supplementary report dated 29 September 2011, Dr Westmore noted Dr Lake's account of the appellant's feelings of helplessness over his stepfather's violence and that he had been greatly affected by the abuse of his mother. Dr Westmore also noted the appellant's account of his subjective experience of the drug DMT including that "nothing was really making sense, changes in perceptions of the environment and perhaps frank perceptual disturbances". Dr Westmore considered that, based on the appellant's history, "it is likely he was adversely affected by the drug DMT at the relevant time including perceptual disturbances and an altered perception of his environment." Dr Westmore maintained that he was unable to indicate that the appellant was suffering from a frank drug-induced psychosis that might be relevant to the commission of the offence. Dr Westmore explained that any illicit substance results in altered perceptions. The appellant had described altered experiences arising from the use of DMT but Dr Westmore was unable to confirm that the appellant had developed a psychotic illness as the result of that use or that he might have a psychiatric defence to the charges. He observed that the Court might take into account that the appellant had used DMT and that the drug had had an adverse effect on him. The conduct of the appellant's case In the course of her submissions before Judge Toner, senior counsel for the appellant accepted that the evidence was "effectively silent" on the question of why the appellant acted as he did. Senior counsel invited his Honour to consider, as a possible explanation, that the appellant had been exposed to very serious domestic violence in his youth. Senior counsel also put on the appellant's behalf that "it can take people a long time coming to terms with the violence that they have committed on people β¦ that they have loved" and that the appellant had reached a position of acceptance of responsibility. Judge Toner found that the crimes were planned and that there was nothing "fleeting" about the appellant's intention to kill the complainant. His Honour found that, at least from when the appellant first stabbed the complainant, he was determined that she would die at his hands. The text Bell Gordon message sent to Todd at 1:39pm evidenced the appellant's determination that his intention to kill the complainant should not be thwarted. His Honour concluded that the wounding offence was a "sustained and determined attempt" to kill. Judge Toner rejected that there was a causal link between the appellant's brutal treatment in youth and his commission of the offences. His Honour observed at [54] of his reasons for sentence: "[T]here is nothing from Dr Westmore's report to say that the [appellant's] conduct was driven from some deep well of a psychologically generated motivation for these crimes springing from what had occurred to him in his adolescence, which history he had and no doubt considered." It was not submitted that the appellant's culpability should be mitigated because of the influence of drugs on him. Judge Toner considered that the appellant's conduct had been driven by a profound jealousy in the context of the break-up of his relationship with the complainant. His Honour found that the offences were aggravated under s 21A of the Crimes (Sentencing Procedure) Act 1999 (NSW) ("the Sentencing Act") by reason that the injury or emotional harm done to the complainant was substantial24 and because she was vulnerable because she was alone in the apartment with the appellant and at his mercy25. His Honour did not accept that the appellant's injuries amounted to a form of extra-curial punishment. His Honour accepted that the injuries would make the appellant's custody more burdensome and he took this into account as a special circumstance justifying an alteration in the statutory proportion between the non-parole period and the Proceedings in the Court of Criminal Appeal The appellant sought leave to appeal to the Court of Criminal Appeal against the severity of the sentences on four grounds. The first and second grounds contended that the sentencing judge erred in finding that the offences were aggravated under s 21A(2)(g) and (l) of the Sentencing Act respectively. 24 Sentencing Act, s 21A(2)(g). 25 Sentencing Act, s 21A(2)(l). 26 Sentencing Act, s 44. Bell Gordon The third ground contended that the sentencing judge erred in failing to treat the appellant's injuries as a form of extra-curial punishment. The fourth ground contended that the sentencing judge erred in not having regard to the appellant's injuries in the determination of the overall sentence. The Court of Criminal Appeal upheld the second and fourth grounds of appeal. Their Honours said it was an error to find the complainant was vulnerable for the purposes of s 21A(2)(l) because this statutory circumstance of aggravation looks to the shared characteristic of a class of victims27. Their Honours also found that the sentencing judge erred in limiting his consideration of the effect of the appellant's injuries to the determination of the non-parole period28. Having found error, the Court of Criminal Appeal turned to consider the exercise of its sentencing discretion. The Court referred to the material that had been tendered without objection "on the usual basis". This material included certificates of the completion of courses while the appellant was in custody and a number of references attesting to his efforts to make the most of his custodial situation29. As earlier explained, the Court rejected so much of the reports of Dr Nielssen and Mr Roberts as canvassed factors that were considered to have contributed to the offences30. Mr Roberts' opinion that the appellant had an improved ability to address his "re-development" was acknowledged to be relevant albeit of "limited weight"31. Notwithstanding the appellant's favourable subjective case, the Court of Criminal Appeal concluded that no lesser sentences were warranted in law. That 27 Betts v The Queen [2015] NSWCCA 39 at [29] per RS Hulme AJ (Meagher JA agreeing at [1], Hidden J agreeing at [2]). 28 Betts v The Queen [2015] NSWCCA 39 at [38] per RS Hulme AJ (Meagher JA agreeing at [1], Hidden J agreeing at [2]). 29 Betts v The Queen [2015] NSWCCA 39 at [46] per RS Hulme AJ (Meagher JA agreeing at [1], Hidden J agreeing at [2]). 30 Betts v The Queen [2015] NSWCCA 39 at [47] per RS Hulme AJ (Meagher JA agreeing at [1], Hidden J agreeing at [2]). 31 Betts v The Queen [2015] NSWCCA 39 at [47] per RS Hulme AJ (Meagher JA agreeing at [1], Hidden J agreeing at [2]). Bell Gordon conclusion took into account that the wounding offence was objectively "very high on the scale"32 for such offences and that the sentence imposed by the sentencing judge was only half the maximum penalty33. In this Court, the appellant's complaint is confined to the Court of Criminal Appeal's refusal to take into account Dr Nielssen's opinion. It is convenient at this point to refer to that opinion and to how senior counsel then appearing for the appellant sought to deploy it in the Court of Criminal Appeal. Dr Nielssen's report is dated 3 May 2014. Dr Nielssen was furnished with, among other things, copies of the indictment, the agreed facts, the reasons for sentence, Dr Westmore's first report, various medical records and a handwritten letter from the appellant. Dr Nielssen interviewed the appellant in person and by video link. He diagnosed the appellant as suffering from "[s]ubstance use disorder, in remission" and "[a]nxiety disorder, in remission". He said that, from the appellant's history, "it seems that he was affected by having taken an unknown quantity of the hallucinogenic drug DMT shortly before the offence, in combination with a moderate quantity of alcohol." He said it seemed that the appellant had "a catastrophic alteration in his perception of events and a loss of capacity for logical thinking around the time of the offence." He observed that multiple self-inflicted stab wounds to the neck, chest or abdomen are strongly associated with the presence of a psychotic disorder or an equivalent state induced by an hallucinogenic drug. Dr Nielssen expressed the following opinion: "From the history provided by [the appellant] and the information in the documents provided, I believe his intoxication with a drug with unpredictable mind altering effects, together with an underlying emotional state shaped by violence and sexual abuse, and a pattern of substance use, was a significant contributing factor to his sudden decision to end his life and to his offending behaviour." 32 Betts v The Queen [2015] NSWCCA 39 at [40] per RS Hulme AJ (Meagher JA agreeing at [1], Hidden J agreeing at [2]). 33 Betts v The Queen [2015] NSWCCA 39 at [48] per RS Hulme AJ (Meagher JA agreeing at [1], Hidden J agreeing at [2]). Bell Gordon The conduct of the appeal in the Court of Criminal Appeal Written submissions were filed in the Court of Criminal Appeal on the appellant's behalf. Under the heading "Re-sentencing", reference was made to the additional material. Judge Toner's conclusion, that there was no persuasive material suggesting that the motivation for the crimes was in some way attributable to the history of domestic violence, was suggested to be infirm and it was submitted that Dr Nielssen's opinion "should be reflected in any sentence" imposed upon the appellant. Nonetheless, contrary to the appellant's submission in this Court, it is by no means clear that senior counsel then appearing for him in the Court of Criminal Appeal squarely invited the Court to set aside Judge Toner's finding and to make a different finding based on Dr Nielssen's opinion. The respondent is right to submit that there was ambiguity in the way the matter was developed before the Court of Criminal Appeal. At the commencement of the hearing senior counsel for the appellant referred to his written submissions and Dr Nielssen's report, noting it contained an opinion which differed from Judge Toner's findings. As noted earlier, a folder of material was handed up on the basis that it would be admissible if the Court came to the question of re- sentence. The prosecutor did not object to the Court receiving the material "on the usual basis". She informed the Court that the material had only been served the preceding afternoon and she had not had an opportunity to look at it. In the course of submissions, senior counsel referred to [54] of Judge Toner's reasons and said: "Now it was never our case that the crimes were driven from some deep well of a psychologically generated motivation springing from what had occurred to him in his adolescence. That however is not to disparage the existing state of depression and the childhood abuse which made him the personality that he was, that he was putting in evidence on the subjective material." Referring to Judge Toner's conclusion that the appellant had been driven by a "profound jealousy", senior counsel submitted "[n]ow we have to accept that as going to the culpability and gravity of the crime". Senior counsel referred in his reply submissions to the reference to Dr Nielssen's report in his written submissions and put, "[w]hen it comes to resentencing if it should, we submit these are matters that are properly to be taken into account and that that is a matter that goes into the general matrix." Bell Gordon The significance of Dr Nielssen's opinion Senior counsel for the appellant accepted the finding that the offences were committed in a jealous rage and disavowed that it had ever been the appellant's case that they were the product of deep-seated psychological difficulties stemming from his history of abuse. How, in light of those concessions, it was suggested that, in the event the Court of Criminal Appeal came to exercise its sentencing discretion, it might take into account Dr Nielssen's opinion as part of the "general matrix" was not developed in oral submissions in that Court. In this Court, the appellant relies on Dr Nielssen's opinion that he suffered "a catastrophic alteration in his perception of events and a loss of capacity for logical thinking around the time of the offence" as the result of taking DMT and that he experienced a "psychotic disorder, or an equivalent state induced by an hallucinogenic or dissociative drug". He submits that it is open to find that the effect of the DMT significantly reduced his capacity for self-control and appreciation of the wrongfulness of his conduct, lessening his moral culpability for his offences. He submits that he should be sentenced on the law as it stood at the date of the offences and that the prohibition on self-induced intoxication being taken into account as a mitigating factor when sentencing does not apply in his case34. The correctness of this submission may be accepted for the purpose of the appellant's argument. At points in the appellant's argument, it was suggested he had not sought to run a case on sentence in the Court of Criminal Appeal that was inconsistent with his case before Judge Toner. He submitted that it was merely that Dr Westmore had been "unable" to make a causal link between his drug use (and underlying difficulties associated with adolescent abuse) and the offences, leaving their commission unexplained. In contrast, Dr Nielssen had been able to discern the connection. That submission is disingenuous. Based upon largely the same material, save for any difference in the history supplied by the appellant, Dr Westmore and Dr Nielssen came to different conclusions with respect to the causal relation of the drug use to the offences. Indeed, 34 Section 21A(5AA) of the Sentencing Act, which provides that in determining the appropriate sentence for an offence the court is not to take the self-induced intoxication of the offender into account as a mitigating factor, commenced on 31 January 2014. Bell Gordon Dr Nielssen's opinion that the appellant was in a psychotic state, or its equivalent, would appear to traverse the appellant's pleas. As the respondent submits, Dr Nielssen's opinion is based on a history which would seem to depart from the agreed facts. Dr Nielssen records the appellant's account that the "attack actually lasted for about 45 seconds, and ended when he took the knife and bent it." With respect to the text messages sent from the complainant's mobile telephone during the assault, Dr Nielssen records the appellant's account that "there is a blurred line between what I sent and what she sent". Annexed to the agreed facts was a schedule setting out the terms of the text messages. It recorded that each of the messages transmitted over the period of the assault was composed and sent by the appellant. It may also be observed that Dr Nielssen refers to the effect of the DMT taken in combination with "a moderate quantity of alcohol". This would seem to be a reference to the consumption of the shochu spirit, which occurred well after the assault on the complainant commenced. Conclusion The case that the appellant submits the interests of justice required the Court of Criminal Appeal to take into account in the exercise of its sentencing discretion is inconsistent with the case that was made before Judge Toner. Had the appellant sought to challenge Judge Toner's finding of the cause of his offending on the hearing of his appeal in the Court of Criminal Appeal, it is accepted that Dr Nielssen's evidence may properly have been rejected because it was not fresh evidence. As earlier explained, there is no principled reason for holding that a finding that was not open to challenge on the appeal is susceptible of challenge on new evidence in the event the appellate court comes to consider re-sentencing. The appellant's case before Judge Toner was not that his ingestion of DMT had significantly contributed to his offending. The forensic choice that was made was to accept responsibility for the offences. Nothing in the new evidence supports the submission that the Court of Criminal Appeal's refusal to permit the appellant to run a different case before it has occasioned a miscarriage of justice. For these reasons the appeal must be dismissed. |
HIGH COURT OF AUSTRALIA AND PLAINTIFF MINISTER FOR IMMIGRATION AND BORDER PROTECTION & ANOR DEFENDANTS CPCF v Minister for Immigration and Border Protection [2015] HCA 1 28 January 2015 ORDER The questions asked by the parties in the special case dated 21 August 2014 and referred for consideration by the Full Court be answered as follows: Question 1 Did s 72(4) of the Maritime Powers Act authorise a maritime officer to detain the plaintiff for the purpose of taking him, or causing him to be taken, to a place outside Australia, being India: (a) whether or not the plaintiff would be entitled by the law applicable in India to the benefit of the non-refoulement obligations; in implementation of a decision by the Australian Government that the plaintiff (and others on the Indian vessel) should be taken to India without independent consideration by the maritime officer of whether that should be so; and (c) whether or not, prior to the commencement of the taking of the plaintiff to India, an agreement or arrangement existed between Australia and India concerning the reception of the plaintiff in India? Answer Section 72(4) of the Maritime Powers Act 2013 (Cth) authorised the plaintiff's detention at all times from 1 July 2014 to 27 July 2014. This question is not otherwise answered. (b) Yes. Yes. Question 2 Did s 72(4) of the Maritime Powers Act authorise a maritime officer to: take the steps set out in paragraph 20 in implementing the decision to take the plaintiff to India; detain the plaintiff for the purposes of taking the plaintiff to India? Answer (a) Yes. (b) Yes. Question 3 Did the non-statutory executive power of the Commonwealth authorise an officer of the Commonwealth to: take the steps set out in paragraph 20 for the purpose of preventing the plaintiff from entering Australia; detain the plaintiff for the purposes of taking the plaintiff to India? Answer (a) Unnecessary to answer. (b) Unnecessary to answer. Question 4 Was the power under s 72(4) of the Maritime Powers Act to take the plaintiff to a place outside Australia, being India, subject to an obligation to give the plaintiff an opportunity to be heard about the exercise of that power and, if so, was that obligation breached? Answer Question 5 Was any non-statutory executive power of the Commonwealth to take the plaintiff to a place outside Australia, being India, for the purpose of preventing the plaintiff from entering Australia, subject to an obligation to give the plaintiff an opportunity to be heard about the exercise of that power and, if so, was that obligation breached? Answer Unnecessary to answer. Question 6 Was the detention of the plaintiff unlawful at any, and if so what period, from 1 July 2014 to 27 July 2014 and if so are they entitled to claim damages in respect of that detention? Answer Question 7 Who should pay the costs of this special case? Answer The plaintiff. Question 8 What if any order should be made to dispose of the proceeding or for the conduct of the balance (if any) of the proceeding? Answer The proceeding should be dismissed with consequential orders to be determined by a single Justice of this Court. Representation R Merkel QC and C L Lenehan with J Williams, D P Hume and R Mansted for the plaintiff (instructed by Shine Lawyers) the Commonwealth and J T Gleeson SC, Solicitor-General of S P Donaghue QC with C J Horan and P D Herzfeld for the defendants (instructed by Australian Government Solicitor) Interveners G R Kennett SC for the Australian Human Rights Commission, intervening (instructed by Australian Human Rights Commission) R M Niall QC with N M Wood for the Office of the United Nations High Commissioner for Refugees, as amicus curiae (instructed by Allens Lawyers) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS CPCF v Minister for Immigration and Border Protection Migration β Refugees β Section 72(4) of Maritime Powers Act 2013 (Cth) authorised maritime officer to detain person for purpose of taking person to place outside Australia β Plaintiff on board vessel intercepted by Commonwealth officers in Australia's contiguous zone β Plaintiff detained on Commonwealth vessel which sailed to India in implementation of decision of National Security Committee of Cabinet ("NSC") β Where no agreement existed between Australia and India applicable to reception of plaintiff prior to commencement of taking of plaintiff to India β Where maritime officer implemented decision of NSC without independent consideration of whether plaintiff should be taken to India β Whether decision to detain and take plaintiff lawful β Whether power under s 72(4) subject to obligation to afford procedural fairness β Whether power constrained by Australia's international non-refoulement obligations. Constitutional law (Cth) β Executive power of Commonwealth β Whether Commonwealth has power derived from s 61 of Constitution to authorise maritime officer to detain person for purposes of taking person outside Australia β Whether any such power subject to obligation to afford procedural fairness. Words and phrases β "detain", "maritime officer", "non-refoulement obligations", "procedural fairness", "reasonable time", "take". Constitution, s 61. Maritime Powers Act 2013 (Cth), ss 5, 7, 16, 18, 69, 71, 72, 74, 97, 104(1). Migration Act 1958 (Cth), ss 42, 189(3). Introduction On 29 June 2014, an Indian flagged vessel carrying the plaintiff and 156 other passengers was intercepted by an Australian border protection vessel ("the Commonwealth vessel") in the Indian Ocean about 16 nautical miles from the Australian territory of Christmas Island. The plaintiff is a Sri Lankan national of Tamil ethnicity, who claims to have a well-founded fear of persecution in Sri Lanka on grounds which would qualify him as a refugee under The interception took place within Australia's contiguous zone as declared pursuant to s 13B of the Seas and Submerged Lands Act 1973 (Cth) ("the SSLA")2. The officer in charge of the Commonwealth vessel authorised the interception on the basis of his suspicion, on reasonable grounds, that the Indian vessel was involved in a contravention of the Migration Act 1958 (Cth) ("the Migration Act"). The Indian vessel having become unseaworthy by reason of a fire in the engine house, its passengers were taken on board the Commonwealth vessel. They were detained on the Commonwealth vessel, which began sailing to India at the direction of the Australian Government, reflecting a decision of the National Security Committee of Cabinet ("the NSC") made on 1 July 2014. The detention and the taking of the passengers towards India was done in the purported exercise, by maritime officers, of maritime powers to detain and take persons to a place outside Australia pursuant to the Maritime Powers Act 2013 (Cth) ("the MPA"). The power invoked by the maritime officers was conferred by s 72(4) of that Act, applicable to persons detained in the contiguous zone: "A maritime officer may detain the person and take the person, or cause the person to be taken: to a place in the migration zone; or to a place outside the migration zone, including a place outside Australia."3 1 The Convention relating to the Status of Refugees done at Geneva on 28 July 1951 as amended by the Protocol relating to the Status of Refugees done at New York on 31 January 1967. 2 Seas and Submerged Lands (Limits of Contiguous Zone) Proclamation 1999, notified in the Commonwealth of Australia Gazette, S148, 7 April 1999. 3 The term "migration zone" has the same meaning as in the Migration Act: MPA, s 8, definition of "migration zone". Relevantly, it comprises the areas consisting of (Footnote continues on next page) That subsection has to be read with s 74, which provides: "A maritime officer must not place or keep a person in a place, unless the officer is satisfied, on reasonable grounds, that it is safe for the person to be in that place." Having reached the vicinity of India on about 10 July 2014, the Commonwealth vessel remained there until about 22 July, when it became apparent that Australia would not, within a reasonable time, be able to reach an agreement with India which would permit the discharge of the passengers onto Indian territory. At the direction of the Minister for Immigration and Border Protection ("the Minister"), given for what were described opaquely in these proceedings as "operational and other reasons", the Commonwealth vessel then sailed to the Australian territory of the Cocos (Keeling) Islands. There the passengers, still purportedly detained under the MPA, were taken into immigration detention pursuant to s 189(3) of the Migration Act. Injunctive proceedings had been instituted in this Court on behalf of the passengers while they were still on the high seas. The present proceedings, commenced by CPCF, allege that his detention on the Commonwealth vessel was unlawful and seek damages for wrongful imprisonment. A number of agreed questions, based upon agreed facts, have been referred to the Full Court by way of special case. The central question is whether maritime powers under the MPA, and/or the non-statutory executive power of the Commonwealth derived from s 61 of the Constitution, authorised the detention and taking of the plaintiff from Australia's contiguous zone to India. The particular questions and the answers to them are set out at the end of these reasons and are substantially to the effect that the detention and taking of the plaintiff was lawful pursuant to s 72(4) of the MPA. The plaintiff relied upon Australia's obligations under international law as limiting the scope of the relevant maritime powers under the MPA or affecting their construction. It is necessary in that context to consider the relationship between the MPA and relevant international conventions, in particular the United Nations Convention on the Law of the Sea4 ("UNCLOS") and the Refugees Convention. the States and Territories, land which is part of a State or Territory at mean low water and sea within the limits of both a State or a Territory and a port. It does not include sea within the limits of a State or Territory but not in a port: Migration Act, s 5(1). 4 Done at Montego Bay on 10 December 1982. The Maritime Powers Act and international law The MPA provides "enforcement powers for use in, and in relation to, maritime areas."5 The powers are exercised by maritime officers6. They comprise members of the Australian Defence Force, officers of Customs, members or special members of the Australian Federal Police and persons appointed as maritime officers by the Minister7. The MPA provides for the exercise of powers with respect to vessels and people in Australia's territorial sea and on the high seas in the contiguous zone adjacent to the territorial sea. Section 7, headed "Guide to this Act", states that the powers can be used by maritime officers to give effect to Australian laws, international agreements to which Australia is a party and international decisions. Section 7 also provides that "[i]n accordance with international law, the exercise of powers is limited in places outside Australia." That may be taken as a declaration about substantive provisions of the Act, particularly ss 40β41, which limit the exercise of maritime powers on the high seas between Australia and other countries and in other countries β the term "country" in the MPA encompassing the territorial sea of a coastal State8. Section 7 cannot be elevated to support the plaintiff's contention that powers under the MPA are to be exercised "in accordance with international law". Nor is s 7 necessary to support the proposition that the MPA is to be construed in accordance with Australia's international legal obligations. That is true for any statutory provision able to be construed consistently with international law and international legal obligations existing at the time of its enactment. That proposition, in Australian law, dates back to the observation of O'Connor J in Jumbunna Coal Mine NL v Victorian Coal Miners' Association9 that "every Statute is to be so interpreted and applied as far as its language admits as not to be inconsistent with the comity of nations or with the established rules of international law". It has ample support in subsequent decisions of this 5 MPA, s 7. 6 MPA, s 7. 7 MPA, s 104(1). 8 MPA, s 8, definition of "country". (1908) 6 CLR 309 at 363; [1908] HCA 95. Court10. On the other hand, if the terms of a statutory provision are clear, there may be no available interpretation that is consistent with international law. The plaintiff submitted that the powers conferred on maritime officers by s 72(4) of the MPA to detain and take a person to a place outside Australia are constrained, textually or by application of common law interpretive principles, by Australia's non-refoulement obligations under the Refugees Convention. The non-refoulement obligation in respect of refugees is derived from Art 33(1) of the Convention, which provides that "[n]o Contracting State shall expel or return ('refouler') a refugee in any manner whatsoever to the frontiers of territories where his life or freedom would be threatened on account of his race, religion, nationality, membership of a particular social group or political opinion." The plurality in the Malaysian Declaration Case said of that obligation11: "for Australia to remove a person from its territory, whether to the person's country of nationality or to some third country willing to receive the person, without Australia first having decided whether the person concerned has a well-founded fear of persecution for a Convention reason may put Australia in breach of the obligations it undertook as party to the Refugees Convention and the Refugees Protocol, in particular the non- the Refugees refoulement obligations undertaken Convention." in Art 33(1) of The plaintiff also called in aid an analogous obligation under Art 3(1) of the Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment, which provides that "[n]o State Party shall expel, return 10 See eg Zachariassen v The Commonwealth (1917) 24 CLR 166 at 181 per Barton, Isaacs and Rich JJ; [1917] HCA 77; Polites v The Commonwealth (1945) 70 CLR 60 at 68β69 per Latham CJ, 77 per Dixon J, 80β81 per Williams J; [1945] HCA 3; Koowarta v Bjelke-Petersen (1982) 153 CLR 168 at 204 per Gibbs CJ; [1982] HCA 27; Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1 at 38 per Brennan, Deane and Dawson JJ; [1992] HCA 64; Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273 at 287 per Mason CJ and Deane J; [1995] HCA 20; Kartinyeri v The Commonwealth (1998) 195 CLR 337 at 384 [97] per Gummow and Hayne JJ; [1998] HCA 22; Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476 at 492 [29] per Gleeson CJ; [2003] HCA 2; Coleman v Power (2004) 220 CLR 1 at 27β28 [19] per Gleeson CJ; [2004] HCA 39; Plaintiff M70/2011 v Minister for Immigration and Citizenship (2011) 244 CLR 144 at 234 [247] per Kiefel J; [2011] HCA 32; Momcilovic v The Queen (2011) 245 CLR 1 at 36β37 [18] per French CJ; [2011] HCA 34. 11 Plaintiff M70/2011 v Minister for Immigration and Citizenship (2011) 244 CLR 144 at 191 [94] per Gummow, Hayne, Crennan and Bell JJ. ('refouler') or extradite a person to another State where there are substantial grounds for believing that he would be in danger of being subjected to torture." The defendants argued that the non-refoulement obligation under the Refugees Convention only applied to receiving States in respect of refugees within their territories. There is support for that view in some decisions of this Court, the House of Lords and the Supreme Court of the United States12. The United Nations High Commissioner for Refugees, appearing as amicus curiae in these proceedings, submitted that when a State party to the Refugees Convention exercises effective control over a person who is a refugee outside the territory of the State, it attracts the non-refoulement obligation imposed by both the Refugees Convention and the Convention against Torture. There is no textual basis in s 72(4) itself which would support a construction limiting the power which it confers by reference to Australia's non- refoulement obligations assuming they subsist extra-territorially. There is, however, a broad constraint imposed by s 74 of the MPA which is protective of the safety of persons taken to a place under s 72(4). The defendants contended for a restrictive reading of s 74. They submitted it did not apply to the "place" to which a person might be taken under s 72(4) but was directed to the power conferred on a maritime officer by s 71 to "place or keep a person in a particular place on the vessel". There is no warrant for such a restrictive reading of s 74, which follows both s 71 and s 72. The content of the term "safe for the person to be in that place" in s 74 may be evaluative and involve a risk assessment on the part of those directing or advising the relevant maritime officers. A place which presents a substantial risk that the person, if taken there, will be exposed to persecution or torture would be unlikely to meet the criterion "that it is safe for the person to be in that place". The constraint imposed by s 74 embraces risks of the kind to which the non- refoulement obligations under the Refugees Convention and the Convention against Torture are directed. The existence of such risks may therefore amount to a mandatory relevant consideration in the exercise of the power under s 72(4) because they enliven the limit on that power which is imposed by s 74 at the point of discharge in the country to which the person is taken. However, whether 12 Minister for Immigration and Multicultural Affairs v Haji Ibrahim (2000) 204 CLR 1 at 45 [136] per Gummow J; [2000] HCA 55; Minister for Immigration and Multicultural Affairs v Khawar (2002) 210 CLR 1 at 15 [42] per McHugh and Gummow JJ; [2002] HCA 14; R (European Roma Rights Centre) v Immigration Officer at Prague Airport [2005] 2 AC 1 at 29β30 [17] per Lord Bingham of Cornhill, Lord Hope of Craighead, Baroness Hale of Richmond and Lord Carswell agreeing at 47 [48], 55 [72] and 66 [108] respectively; Sale v Haitian Centers Council Inc 509 US 155 (1993). a person is entitled to the benefit of non-refoulement obligations in the place to which that person is taken does not of itself determine the question whether that is a safe place within the meaning of s 74. I agree, for the reasons given by Hayne and Bell JJ, that given the agreement of the parties to the questions framed in the Special Case, Question 1(a) should not be regarded as hypothetical. There are, however, no facts set out in the Special Case from which it may be inferred that, assuming the plaintiff to be a refugee or otherwise at risk in Sri Lanka, taking him to India would have involved transgressing the limit imposed by s 74. There is no agreed fact in the Special Case to the effect that if the plaintiff had been taken to India and discharged on Indian territory, he would have been at risk of removal from India to a place in which he would not have been safe. That is relevant to the answer to Question 2. There is no basis for a conclusion that the discharge of the plaintiff in India would have contravened s 74. In my opinion, Question 1(a) can be answered in the affirmative. It is sufficient, however, in order to reflect the common position of the majority, that it be answered: "Section 72(4) of the Maritime Powers Act 2013 (Cth) authorised the plaintiff's detention at all times from 1 July 2014 to 27 July 2014. This question is not otherwise answered." Rescue obligations Article 98 of UNCLOS provides that every State shall require the master of a ship flying its flag, in so far as he can do so without serious danger to the ship, the crew or the passengers, to render assistance to any person found at sea in danger of being lost13. Section 181 of the Navigation Act 2012 (Cth) accordingly imposes an obligation on the master of a vessel at sea to cause the vessel to proceed as fast as practicable to the assistance of persons in distress at sea14. The obligation applies to regulated Australian vessels15, which term includes Australian customs vessels16. Australia is also a party to the International Convention on Maritime Search and Rescue ("the SAR Convention"). Parties to that Convention 13 UNCLOS, Art 98(1)(a). 14 Navigation Act, s 181(1)(c). 15 Navigation Act, s 180(a). 16 Navigation Act, s 15(2). undertake to adopt all legislative or other appropriate measures necessary to give full effect to it17. It requires that the State party responsible for the search and rescue region in which assistance is rendered to persons in distress at sea exercise primary responsibility for ensuring that coordination and cooperation occurs so that survivors are disembarked from the assisting ship and delivered to a place of safety, taking into account the particular circumstances of the case and guidelines developed by the International Maritime Organization18. One of those guidelines provides that19: "The need to avoid disembarkation in territories where the lives and freedoms of those alleging a well-founded fear of persecution would be threatened is a consideration in the case of asylum-seekers and refugees recovered at sea." The Indian vessel, after interception by the Commonwealth vessel, became unseaworthy, rescue obligations at thus engaging Australia's international law in respect of its passengers and crew. The defendants did not contend that a characterisation of the interception as a rescue meant that the maritime officers on the Commonwealth vessel were doing other than exercising maritime powers under the MPA in detaining the plaintiff and other passengers and taking them to India. To the extent that the guidelines applicable to rescue operations might be taken to import an extra-territorial non-refoulement obligation in respect of the persons rescued, the consequences of that obligation for the exercise of the statutory power have already been dealt with. It is subsumed by the requirement imposed by s 74. The United Nations Convention on the Law of the Sea UNCLOS developed out of a process of codification of the international law of the sea which can be traced back at least as far as the Hague Codification Conference established by the League of Nations in 1930 to consider, among other things, the legal status of the territorial sea20. Following a study commencing the International Law Commission of the United Nations in 1956, the Geneva Convention on the in 1949 and recommendations by 17 SAR Convention, Art I. 18 SAR Convention, Annex, par 3.1.9. The guidelines are contained in the Annex to the International Maritime Organization, Maritime Safety Committee, Guidelines on the Treatment of Persons Rescued at Sea, Resolution MSC 167(78) ("the International Maritime Organization Guidelines"). 19 International Maritime Organization Guidelines, par 6.17. 20 Caminos, Law of the Sea, (2001) at xiii. Continental Shelf was made in 1957 and was followed in 1958 by the Geneva Convention on the Territorial Sea and Contiguous Zone, which came into force in 1964, and the Geneva Convention on the High Seas, which came into force in 1962. As explained by Professor Shearer, the latter Convention21: "codified customary international law which regarded the high seas as incapable of appropriation by any State and as free for the commerce and navigation of all States. In particular, it is forbidden to States to assert jurisdiction on the high seas against foreign vessels except on suspicion of piracy or engaging in the slave trade." A specified breadth for the territorial sea was not agreed to until the making of UNCLOS. UNCLOS provides that "[t]he sovereignty of a coastal State extends, beyond its land territory and internal waters ... to an adjacent belt of sea, described as the territorial sea"22 and that "[t]he sovereignty over the territorial sea is exercised subject to this Convention and to other rules of international law."23 Every "State has the right to establish the breadth of its territorial sea up to a limit not exceeding 12 nautical miles, measured from baselines determined in accordance with this Convention."24 Beyond the territorial sea there is a contiguous zone, which is explained in Art 3325: "In a zone contiguous to its territorial sea, described as the contiguous zone, the coastal State may exercise the control necessary to: prevent infringement of its customs, fiscal, immigration or sanitary laws and regulations within its territory or territorial sea". The contiguous zone "may not extend beyond 24 nautical miles from the baselines from which the breadth of the territorial sea is measured."26 21 Shearer, "The Limits of Maritime Jurisdiction", in Schofield, Lee and Kwon (eds), The Limits of Maritime Jurisdiction, (2014) 51 at 56. 22 UNCLOS, Art 2(1). 23 UNCLOS, Art 2(3). 24 UNCLOS, Art 3. 25 UNCLOS, Art 33(1)(a). 26 UNCLOS, Art 33(2). UNCLOS also provides that subject to the Convention, ships of all States enjoy the right of innocent passage through the territorial sea of a coastal State27. Passage is innocent so long as it is not prejudicial to the peace, good order or security of the coastal State28, but shall be considered to be prejudicial if, in the territorial sea, the foreign ship engages in the loading or unloading of any person contrary to the immigration laws and regulations of the coastal State29. There is no suggestion that the Indian vessel was intending to engage in innocent passage through Australian territorial waters. It is necessary in considering UNCLOS and any other relevant international conventions or rules of international law to bear in mind that international law and convention or treaty obligations do not have a direct operation under Australian domestic law. Nor does the taxonomy of waters beyond the shoreline necessarily determine questions of the validity of laws extending to the waters, which, in any event, do not arise in these proceedings. Barwick CJ said in New South Wales v The Commonwealth30: "The test of validity of a law having an extra-territorial operation is its relationship to the peace, order and good government of the territory for the government of which the legislature has been constituted. If such a law did not so touch and concern that territory it would not be valid simply because it operated in the marginal seas. It would not achieve validity by its operation in the territorial sea." Consideration of UNCLOS directs attention to the SSLA, which is part of the statutory background relevant to the enactment of the MPA. The Seas and Submerged Lands Act The SSLA, as enacted in 1973, recited that Australia was a party to the Geneva Convention on the Territorial Sea and the Contiguous Zone31 and the Geneva Convention on the Continental Shelf32, copies of which were scheduled to the Act. The validity of the SSLA was upheld in New South Wales v The 27 UNCLOS, Art 17. 28 UNCLOS, Art 19(1). 29 UNCLOS, Art 19(2)(g). 30 (1975) 135 CLR 337 at 361β362; [1975] HCA 58. 31 Done at Geneva on 29 April 1958. 32 Done at Geneva on 29 April 1958. Commonwealth on the basis that its provisions were within the legislative power of the Commonwealth to make laws with respect to external affairs under s 51(xxix) of the Constitution33. The SSLA declared and enacted, inter alia, that "the sovereignty in respect of the territorial sea ... is vested in and exercisable by the Crown in right of the Commonwealth."34 The Governor-General was empowered from time to time by Proclamation to declare, not inconsistently with the Convention on the Territorial Sea and the Contiguous Zone, the limits of the whole or any part of the territorial sea35. The Act was amended by the Maritime Legislation Amendment Act 1994 (Cth) to reflect its reliance upon UNCLOS, in lieu of the two Geneva Conventions of 1958, and the ability which UNCLOS conferred at international law to declare a contiguous zone. The amendments introduced a recital into the Preamble of the Act declaring that Australia, as a coastal State, has the right under international law to exercise control within a contiguous zone to: prevent infringements of customs, fiscal, immigration or sanitary laws within Australia or the territorial sea of Australia; to punish infringements of those laws." The Schedules to the Act setting out the two 1958 Geneva Conventions were repealed and substituted with a Schedule setting out Pts II, V and VI of UNCLOS. A definition of "contiguous zone" was inserted, having the same meaning as in Art 33 of UNCLOS. The 1994 amendments also introduced a new s 13A, which declared and enacted that "Australia has a contiguous zone." The limits of the whole or any part of the contiguous zone may be declared from time to time by the Governor- General, not inconsistently with UNCLOS36 or any relevant international agreement to which Australia is a party37. A note to s 13A states that the rights of control that Australia, as a coastal State, has in respect of the contiguous zone of Australia are exercisable in accordance with applicable Commonwealth, State and Territory laws. The note, being part of the material in the Act, is part of the 33 (1975) 135 CLR 337 at 364β366 per Barwick CJ, 377 per McTiernan J, 388β389 per Gibbs J, 472, 476 per Mason J, 498 per Jacobs J, 504 per Murphy J. 34 SSLA, s 6. 35 SSLA, s 7(1). 36 That is to say, s 4 of Pt II of UNCLOS. 37 SSLA, s 13B. Act38. It has the character of a declaratory statement which directs attention to relevant domestic legislation. The direct relevance of the SSLA in these proceedings is that it declares a contiguous zone for Australia and asserts Australia's rights in that zone, which give content to the geographical qualifications on the exercise of maritime powers under the MPA. Maritime powers β overview For the content of maritime powers it is necessary to look to Pt 3 of the MPA. The Guide to Pt 3, set out in s 50, states that maritime powers include powers to detain vessels, and to place, detain, move and arrest persons39. They may be exercised only in accordance with Pt 240 and are subject to the geographical limits set out in that Part. They are subject to processes set out in Pt 2 for authorising their exercise and can only be exercised by maritime officers who are the repositories of such authority. Maritime powers β the geographical dimension The "maritime areas" referred to in the MPA as areas in which maritime powers can be exercised are not expressly defined in that Act. However, the MPA extends to "every external Territory"41 and to "acts, omissions, matters and things outside Australia."42 The term "Australia", used in a geographical sense, includes "the territorial seas of Australia and the external Territories"43. Division 5 of Pt 2 sets out geographical limits on the exercise of powers under the Act. It contains seven substantive sections which define areas in which the Act does not authorise the exercise of powers unless certain circumstances exist and/or the powers are exercised for a specified purpose44. 38 Acts Interpretation Act 1901 (Cth), s 13(1). 39 MPA, s 50(e) and (f). 40 MPA, s 51. 41 MPA, s 4(1). 42 MPA, s 4(2). 43 MPA, s 8, definition of "Australia", par (b). 44 MPA, ss 40β41, 43β47. The MPA does not authorise the exercise of powers in another country except in certain circumstances, none of which apply in this case45. "Country" is defined in its geographical sense to include "the territorial sea, and any archipelagic waters, of the country"46. Subject to certain exclusions, s 41 provides that the MPA does not authorise the exercise of powers in relation to a foreign vessel at a place between Australia and another country. "Australia" and "country" being defined to include territorial waters, a place "between Australia and another country" would be outside the territorial waters of the other country. It is not asserted that the Commonwealth vessel was at any time within India's territorial waters. The geographical limit imposed by s 41 does not preclude the exercise of maritime powers in the contiguous zone of Australia to investigate or prevent a contravention of a customs or immigration law prescribed by the regulations occurring in Australia47. Nor does it preclude the exercise of powers to administer or ensure compliance with the Migration Act in its application to foreign vessels or persons on foreign vessels at a place between Australia and another country48. Section 41 therefore does not preclude the exercise of a maritime power to take persons detained in the contiguous zone to another country as an incident of preventing a contravention of Australian immigration law. The relevant maritime power derives from s 72(4). Maritime powers β content Maritime powers in relation to vessels are set out in Div 7 of Pt 3 of the MPA. A maritime officer may detain a vessel49 and take it, or cause it to be taken, to a port or other place that the officer considers appropriate50. The officer may remain in control of the vessel or require the person in charge of the vessel to remain in control of it until the vessel is released or disposed of51. 45 MPA, s 40. 46 MPA, s 8, definition of "country", par (a). 47 MPA, s 41(1)(c). 48 MPA, s 41(1)(d) and s 8, definition of "monitoring law", par (c). 49 MPA, s 69(1). 50 MPA, s 69(2)(a). 51 MPA, s 69(2)(b). Maritime powers in relation to persons are set out in Div 8 of Pt 3. A maritime officer may require a person on a detained vessel to remain on the vessel until it is taken to a port or other place, or permitted to depart from the port or other place52. Section 72(4) and s 74, which are of central significance in these proceedings, have been set out in the Introduction to these Reasons. Reference should, however, be made to s 72(5): "For the purposes of taking the person to another place, a maritime officer may within or outside Australia: place the person on a vessel or aircraft; or restrain the person on a vessel or aircraft; or remove the person from a vessel or aircraft." No question has been raised about the validity of the MPA. The Special Case is to be decided on the basis that the powers conferred on maritime officers by s 72(4) are validly conferred and include the power to detain and take a person from Australia's contiguous zone to another place, including to another country. Maritime powers β purposes Maritime powers are exercised within a purposive framework53. A maritime officer may exercise powers in accordance with an authorisation to: investigate a contravention54; and administer or ensure compliance with a monitoring law55. Maritime powers may also be exercised56: to investigate or prevent any contravention of an Australian law that the officer suspects, on reasonable grounds, the vessel ... to be involved in; 52 MPA, s 72(3). 53 MPA, Pt 2, Div 4, subdiv C. 54 MPA, s 31(a). 55 MPA, s 31(b). 56 MPA, s 32(1). to administer or ensure compliance with any monitoring law". A maritime officer, in exercising powers under the MPA, is to use only such force against a person or thing "as is necessary and reasonable in the circumstances."57 In so doing the maritime officer "must not ... subject a person to greater indignity than is necessary and reasonable to exercise the powers"58. Maritime powers β the chain of command Authorising officers may authorise the exercise of maritime powers in relation to a vessel in certain circumstances59. Those officers include the most senior maritime officer and the most senior member or special member of the Australian Federal Police who is in a position to exercise any of the maritime powers in person60. The exercise of maritime powers in relation to a vessel may be authorised if the authorising officer suspects, on reasonable grounds, that the vessel is involved in a contravention of an Australian law61 β ie, if an Australian law has been, is being, or is intended to be, contravened on, or in the vicinity of, the vessel, or if there is some other connection between the vessel and a contravention, or intended contravention, of the law62. A vessel is also involved in a contravention of a law if it has been, is being, or is intended to be, used in contravention of the law63. The exercise of maritime powers in relation to a vessel may also be authorised for the purposes of administering or ensuring compliance with a "monitoring law"64, a term which includes the Migration Act65. 57 MPA, s 37(1). 58 MPA, s 37(2)(a). 59 MPA, ss 17β22. An authorisation remains in force until it is spent or it lapses: MPA, s 23(1). It is spent when the continuous exercise of powers under the authorisation ends: MPA, s 23(2). It need not be in writing and it is not a legislative instrument: MPA, s 25. 60 MPA, s 16(1)(a)β(b). 61 MPA, s 17(1). 62 MPA, s 9(1). 63 MPA, s 9(2). 64 MPA, s 18. 65 MPA, s 8, definition of "monitoring law", par (c). On the agreed facts in the Special Case, maritime officers on navy vessels and Australian customs vessels exercise maritime powers in the context of a chain of command in which they are governed by orders and instructions from superior or senior officers. In taking the plaintiff and other passengers to India, the maritime officers on the Commonwealth vessel were acting in accordance with a specific decision of the NSC and were implementing a general government policy to the effect that anybody seeking to enter Australia by boat without a visa will be intercepted and removed from Australian waters. The plaintiff contended that the maritime officers, acting in accordance with the NSC decision, acted unlawfully because they were acting under the dictation of the NSC and because the government policy applied by the NSC itself admitted of no discretion. The NSC was said not to be an entity which has power under the MPA. It is not an authorising officer, nor a maritime officer. Maritime officers who simply "implemented" the NSC direction were therefore improperly exercising their power. That contention must be considered on the basis that the NSC comprises Ministers of the Executive Government of the Commonwealth with responsibility, among other things, for the implementation of government policy with respect to non-citizens seeking to enter Australia by boat without a visa. The question whether, absent express power to do so, a Minister can direct a public official, for whom he or she is responsible, in the exercise of a statutory discretion has been the subject of different approaches in this Court from time to time66. The answer depends upon a variety of considerations including the particular statutory function, the nature of the question to be decided, the character of the decision-maker and the way in which the statutory provisions may bear upon the relationship between the Minister and the decision-maker67. 66 R v Mahony; Ex parte Johnson (1931) 46 CLR 131 at 145 per Evatt J; [1931] HCA 36; R v Anderson; Ex parte Ipec-Air Pty Ltd (1965) 113 CLR 177 at 192β193 per Kitto J, 200 per Taylor and Owen JJ, 206 per Windeyer J; [1965] HCA 27; Salemi v MacKellar [No 2] (1977) 137 CLR 396; [1977] HCA 26; Ansett Transport Industries (Operations) Pty Ltd v The Commonwealth (1977) 139 CLR 54 at 82β83 per Mason J; [1977] HCA 71; Bread Manufacturers of NSW v Evans (1981) 180 CLR 404 at 429β430 per Mason and Wilson JJ; [1981] HCA 69. See generally O'Connor, "Knowing When to Say 'Yes Minister': Ministerial Control of Discretions Vested in Officials", (1998) 5 Australian Journal of Administrative Law 168. 67 Bread Manufacturers of NSW v Evans (1981) 180 CLR 404 at 430 per Mason and Wilson JJ; Wetzel v District Court of New South Wales (1998) 43 NSWLR 687 at The nature of the power conferred by s 72(4) of the MPA and the subject matter of that power are apt to raise questions of Australia's relationship with other countries. The question whether to take non-citizens detained in the contiguous zone to Australia or to another country is a matter appropriate for decision at the highest levels of government by Ministers of the Executive Government, who are responsible to the Parliament. The power conferred upon maritime officers by s 72(4) is a power in the exercise of which they could properly regard the direction of the NSC as decisive and which, as officers of a disciplined service subject ultimately to civilian control68, they are bound to immediate Whether particular circumstances might prevent implement. compliance with such a direction is not a question which arises in this case. The word "may" in s 72(4) confers a power that can be exercised according to the dictates of the existing structures within which maritime officers operate. Subject to practical constraints, such as weather conditions and the availability of fuel and provisions on a vessel, a maritime officer is not required to consider the exercise of the power as though it were a personal discretion requiring a weighing of relevant factors. When exercising the power under s 72(4) of the MPA in response to a high executive direction in pursuance of government policy, maritime officers do not thereby act under dictation and unlawfully. Question 1(b) in the Special Case should be answered accordingly. The Maritime Powers Act and the executive power Section 5 of the MPA is headed "Effect on executive power" and provides: "This Act does not limit the executive power of the Commonwealth." The defendants submitted that s 5 negatives any implication, otherwise available, that the MPA excludes Commonwealth executive power in relation to the matters to which it applies. The MPA confers a range of powers on officers of the Executive Government of the Commonwealth, including authorising officers and maritime officers as defined in the Act. The exercise of those powers is conditioned by reference to the circumstances and locations in which they may be exercised and the purposes for which they may be exercised. Whatever the proper construction of s 5, it cannot be taken as preserving unconstrained an executive power the 68 See Defence Force Discipline Act 1982 (Cth), s 27 and Haskins v The Commonwealth (2011) 244 CLR 22 at 47 [67] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ; [2011] HCA 28 in relation to members of the Australian Defence Force, and the Australian Federal Police Act 1979 (Cth), s 40 with respect to members of the Australian Federal Police. exercise of which is constrained by the MPA. Considerations of coherence in the legislative scheme point to that conclusion. Any consideration of the non-statutory executive power must bear in mind its character as an element of the grant of executive power contained in s 61 of the Commonwealth Constitution. The history of the prerogative powers in the United Kingdom informs consideration of the content of s 61, but should not be regarded as determinative. The content of the executive power may be said to extend to the prerogative powers, appropriate to the Commonwealth, accorded to the Crown by the common law69. It does not follow that the prerogative content comprehensively defines the limits of the aspects of executive power to which it relates. It is not necessary in these proceedings to resolve the important constitutional question whether there was a power under s 61 which, absent the lawful exercise of power under the MPA, would have authorised the actions taken by the Commonwealth in this case. It follows that the answer to Questions 3 and 5 of the Special Case will be "Not necessary to answer." A speculative taking β whether authorised by s 72(4) Questions 1(c) and 2 raise issues about the construction of s 72(4) and whether the detention of the plaintiff in order to take him to India, in the absence of any consent or agreement by the Indian Government, was lawful. The initial destination of the Indian vessel and its passengers was Christmas Island. None of the passengers had any right to enter Christmas Island. It is a contravention of s 42(1) of the Migration Act for a non-citizen to travel to Australia without a visa that is in effect. If a non-citizen is brought into Australia on a vessel without a relevant visa where the non-citizen is a person to whom s 42(1) applies, then the master, owner, agent, charterer and operator of the vessel are each guilty of an offence against s 229 of the Migration Act. The maritime power conferred by s 72(4) of the MPA may be exercised in the contiguous zone of Australia to investigate or prevent a contravention of the Migration Act occurring in Australia. Circumstances warranting the exercise of the power under s 72(4) for that purpose existed. Detention pursuant to s 72(4) must be incidental to the exercise of the power to take the person detained to a particular place. Being incidental and therefore purposive it must not be obviously disproportionate in duration or 69 Cadia Holdings Pty Ltd v New South Wales (2010) 242 CLR 195 at 226 [86] per Gummow, Hayne, Heydon and Crennan JJ; [2010] HCA 27; see also Williams v The Commonwealth (2012) 248 CLR 156 at 227β228 [123] per Gummow and Bell JJ; [2012] HCA 23. character to the purpose it serves70. It may include, as the plaintiff accepted, detention for a period sufficient to enable reasonable steps to be taken by the relevant maritime officer, or those giving him or her directions, to determine the place to which the detained person is to be taken. The power to detain does not authorise indefinite detention. It can only be exercised for a reasonable time having regard the implementation of a decision to take a person to another country would be unlawful if the taking decision itself were not authorised by law. The decision to take the plaintiff to India was said by the plaintiff to have been unlawful because s 72(4) does not authorise a person to be taken to another country which he or she did not have a right to enter unless an agreement or arrangement existed between Australia and that country permitting discharge of the person there. its statutory purpose. Detention incidental As a matter of the internal logic of the statute, a decision to take a person to another country would not be a valid exercise of the power under s 72(4) if it were known, when the decision was taken, that the country was not one at which the person could be discharged and that there was no reasonable prospect that that circumstance would alter. The position is no different where the taking decision is entirely speculative, that is to say, it is not known at the time the decision is made whether it is capable of being performed and there is no basis for believing that the position would be altered within a reasonable time. The statute should not be taken as authorising a futile or entirely speculative taking and therefore a futile or entirely speculative detention. A decision to take a person to another country may be made in accordance with the MPA when made in the knowledge or reasonably grounded belief that that country will allow the person to enter its territory. The grounds of the knowledge or belief may be based on information about the law and/or administrative practices of that country or upon its express agreement or consent to allow the person to be discharged there. In such cases, the possibility cannot be excluded that the position may alter by a change of law or practice, or by withdrawal of an agreement or consent previously given to permit a person to be discharged in that country. It may be that a particular person will be refused entry for reasons peculiar to that person. The decision to exercise the power to take a person to another country must necessarily be taken on the basis that, as a matter of probability, it will be able to be performed to completion. Where, as in this case, the proposed country of destination has not agreed to receive the person taken but there are negotiations in place with a view to reaching agreement, then the relevant maritime officer or those directing him or her may make a probabilistic assessment and determine that the process of taking a person to that country should commence on the basis that there is a reasonable possibility that 70 Minister for Immigration and Citizenship v Li (2013) 249 CLR 332 at 366 [74] per Hayne, Kiefel and Bell JJ; see also at 351β352 [30] per French CJ; [2013] HCA 18. agreement will be reached or consent received. Assessment of that kind of probability is a matter for the Executive. It does not go to the power conferred by s 72(4) unless the probability is such as to render the taking decision futile or entirely speculative. The plaintiff submitted that at the time the defendants decided to take him to India he was not entitled to enter that country, the Commonwealth had no arrangement with India for him to enter that country, whether lawfully or unlawfully, and it was not practicable for the Commonwealth to effect his discharge there. Those circumstances, it was said, continued between 1 July 2014 and 23 July 2014. On the basis that when the decision to take him to India was made it was not practicable to effect his discharge there, the decision to take was not authorised by s 72(4). On that basis the incidental detention was said not to be authorised. The defendants pointed out that the plaintiff's argument involved an acceptance that the permissible period of detention under s 72(4) included an allowance for time to take reasonable steps to determine whether the person could be discharged at the place to which he might be taken. The defendants submitted that to construe s 72(4) in the limited way for which the plaintiff contended would prolong the detention of persons under that provision by preventing travel to any other country occurring simultaneously with any negotiations with that country. Given the generality with which the power conferred by s 72(4) is expressed, the primary constraint must be that its exercise is consistent with its statutory purpose in the circumstances of the case. Had the taking been deferred while negotiations were pursued, the Commonwealth vessel would have been able, consistently with s 72(4) as the plaintiff construes it, to remain at sea for as long as was reasonably necessary to determine whether negotiations were likely to yield an agreement to receive the plaintiff and other persons on the Commonwealth vessel. In the circumstances described in the Special Case, the exercise of the power under s 72(4), notwithstanding that no agreement had been reached with India as to the discharge of the plaintiff, could not be said to be invalid. It follows that Questions 1(c) and 2 should be answered in the affirmative. The detention and taking and procedural fairness The plaintiff submitted that the power under s 72(4) to detain and take him to India was conditioned upon compliance with an obligation, breached in this case, to give him an opportunity to be heard about the exercise of the power. General principles informing the implication of the requirements of procedural fairness and the exercise of statutory powers adverse to personal rights, freedoms and interests were invoked. Plainly, the exercise of the power under s 72(4) will have an adverse effect upon the liberty of the persons affected by it and, depending upon the destinations to which they are taken, may have the potential to affect their ultimate safety and wellbeing. However, given the nature and purposes of the power and the circumstances in which it is exercised, the plaintiff's submission cannot be accepted. As the defendants submitted, the power under s 72(4) is a power exercised, in this case, for the purpose of preventing a contravention of Australia's migration laws. The maritime officers exercising the power do so in a chain of command. They do so in circumstances contemplated by the MPA in which there is no appropriate administrative framework to afford persons to whom s 72 applies a meaningful opportunity to be heard. Moreover, the exercise of the powers under s 72(4) is to be undertaken for the purposes for which those powers are conferred and within a reasonable time. The ultimate safety of persons taken to a place under s 72(4) is a mandatory relevant consideration by reason of s 74. It does not follow from that that the power conferred under s 72(4) is conditioned by the requirements of procedural fairness. Those exercising or directing the exercise of the power may inform themselves of facts relevant to the question of safety in a variety of ways which may include, or according to the circumstances require, obtaining information from the persons to be detained. It may, for example, be open to the directing authority or those exercising powers under the MPA to act upon information about the origin of the foreign vessel, the ethnicity of its passengers and general information about the country from which they have most recently departed in determining whether it is safe to return them to that place. While the obtaining of basic information from the passengers may be a necessary incident of compliance with the requirement of s 74 in particular circumstances, it is not a matter which goes to power under the rubric of procedural fairness. The answer to Question 4 is "No". The questions and answers on the Special Case The questions stated for the opinion of the Full Court should be answered as follows: (1) Did s 72(4) of the Maritime Powers Act authorise a maritime officer to detain the plaintiff for the purpose of taking him, or causing him to be taken, to a place outside Australia, being India: (a) whether or not the plaintiff would be entitled by the law applicable in India to the benefit of the non-refoulement obligations; Answer: Section 72(4) of the Maritime Powers Act 2013 (Cth) authorised the plaintiff's detention at all times from 1 July 2014 to 27 July 2014. This question is not otherwise answered. in implementation of a decision by the Australian Government that the plaintiff (and others on the Indian vessel) should be taken to India without independent consideration by the maritime officer of whether that should be so; and Answer: Yes. (c) whether or not, prior to the commencement of the taking of the plaintiff to India, an agreement or arrangement existed between Australia and India concerning the reception of the plaintiff in India? Answer: Yes. (2) Did s 72(4) of the Maritime Powers Act authorise a maritime officer to: take the steps set out in paragraph 20 in implementing the decision to take the plaintiff to India; Answer: Yes. detain the plaintiff for the purposes of taking the plaintiff to India? Answer: Yes. (3) Did the non-statutory executive power of the Commonwealth authorise an officer of the Commonwealth to: take the steps set out in paragraph 20 for the purpose of preventing the plaintiff from entering Australia; Answer: Not necessary to answer. detain the plaintiff for the purposes of taking the plaintiff to India? Answer: Not necessary to answer. (4) Was the power under s 72(4) of the Maritime Powers Act to take the plaintiff to a place outside Australia, being India, subject to an obligation to give the plaintiff an opportunity to be heard about the exercise of that power and, if so, was that obligation breached? Answer: (5) Was any non-statutory executive power of the Commonwealth to take the plaintiff to a place outside Australia, being India, for the purpose of preventing the plaintiff from entering Australia, subject to an obligation to give the plaintiff an opportunity to be heard about the exercise of that power and, if so, was that obligation breached? Answer: Not necessary to answer. (6) Was the detention of the plaintiff unlawful at any, and if so what period, from 1 July 2014 to 27 July 2014 and if so are they [sic] entitled to claim damages in respect of that detention? Answer: (7) Who should pay the costs of this special case? Answer: The plaintiff. (8) What if any order should be made to dispose of the proceeding or for the conduct of the balance (if any) of the proceeding? Answer: Proceedings dismissed, consequential orders determined by a single Justice of this Court. to be HAYNE AND BELL JJ. The Maritime Powers Act 2013 (Cth) ("the MP Act") provides for a "maritime officer" to exercise certain powers with respect to vessels in Australia's contiguous zone71 and with respect to persons on those vessels. The Special Case agreed by the parties in this matter asks questions arising out of steps taken by officers of the Commonwealth with respect to the plaintiff, one of a number of persons on an Indian flagged vessel detained by an Australian border protection vessel in Australia's contiguous zone near Christmas Island. The plaintiff and others from the Indian vessel were placed on board the border protection vessel (a "Commonwealth ship"72). The National Security Committee of Cabinet decided that they should be taken to India, which was the place from which the Indian vessel had sailed. The Commonwealth ship took the plaintiff and the others who had been on board the Indian vessel and "arrived near India" about ten days later. The plaintiff and other passengers did not disembark in India. A little over three weeks after the decision to take the plaintiff and others to India, and about 12 days after the Commonwealth ship had "arrived near India", the Minister for Immigration and Border Protection decided that, "for operational and other reasons, it would not be practicable to complete the process of taking the plaintiff and the other persons from the Indian vessel to India within a reasonable period of time, and that those persons should be taken to the Territory of the Cocos (Keeling) Islands". This was done. The plaintiff is a person of Tamil ethnicity and Sri Lankan nationality. At no material time did he have an Australian visa permitting him to travel to or enter Australia. It should be inferred that the plaintiff, and the other passengers, were not put off the Commonwealth ship in India because they had no right to enter India and no permission to do so. The plaintiff alleges that his detention was unlawful for some or all of the time he was on board the Commonwealth ship and claims damages for wrongful imprisonment. The plaintiff puts that argument in several different ways and the Minister and the Commonwealth ("the Commonwealth parties") make a number 71 Section 8 of the MP Act defines "contiguous zone" as having the same meaning as in the United Nations Convention on the Law of the Sea (1982) ("UNCLOS") [1994] ATS 31. Article 33 of UNCLOS describes the contiguous zone as "a zone contiguous to [the coastal State's] territorial sea" not extending beyond 24 nautical miles from the baselines from which the breadth of the territorial sea is measured. 72 Defined in s 8 as "a vessel that is owned by, or in the possession or control of, the Commonwealth or a Commonwealth authority". of separate answers to the claim. But both the claim made by the plaintiff and the answers given by the Commonwealth parties require that there first be an examination of the relevant provisions of the MP Act. Maritime Powers Act 2013 For present purposes, the general scheme of the MP Act can be identified as having the following elements. Part 2 (ss 15-49) provides for the exercise of maritime powers. Relevantly, s 16 prescribes who may authorise the exercise of maritime powers in relation to a vessel. Those persons include73 the person in command of a Commonwealth ship from which the exercise of powers is to be directed or coordinated. Section 17 provides that an authorising officer may authorise the exercise of maritime powers in relation to a vessel if the officer suspects, on reasonable grounds, that the vessel is involved in a contravention of Australian law. A "contravention" of Australian law includes74 an offence against the law. Involvement in a contravention extends75 to an intended contravention of the law. If an authorisation under ss 16 and 17 is in force in relation to a vessel, a maritime officer may exercise maritime powers76 in relation to that vessel in accordance with ss 31 and 32 and within the geographical and other limits specified in Div 5 of Pt 2 of the MP Act (ss 40-49). Section 31 provides, in effect, that the maritime officer may exercise maritime powers to take whichever of a number of steps applies in accordance with the authorisation. Those steps include investigating the suspected contravention and ensuring compliance with a "monitoring law" (an expression which includes77 the Migration Act 1958 (Cth) ("the Migration Act")). Section 32(1)(a) provides that the maritime officer may also exercise maritime powers "to investigate or prevent any contravention of an Australian law that the officer suspects, on reasonable grounds, the vessel ... to be involved in". The limits on the exercise of maritime powers which are relevant to this case were provided by s 41(1)(c). That provision limited the exercise of 73 s 16(1)(d). maritime powers in relation to the Indian vessel (a "foreign vessel"78) in two relevant ways. First, there was a geographical limitation: the powers could be exercised only in the contiguous zone. Second, there was a purposive limitation expressed as disjunctive alternatives: to "investigate a contravention of a customs, fiscal, immigration or sanitary law prescribed by the regulations that occurred in Australia"79 or to "prevent a contravention of such a law occurring in Australia"80. It may be noted that the first purpose (investigating a contravention) uses the phrase "that occurred in Australia". Hence, although a vessel may be involved in a contravention if it is intended to be used in contravention of the law, no contravention (even in that extended sense) had occurred in Australia before the Indian vessel was intercepted and detained. It follows that, even if, as the Commonwealth parties submitted, the relevant provisions of the MP Act may be read as using the word "investigate" with some extended meaning encompassing steps taken to prevent a future contravention, the first of the purposes referred to in s 41(1)(c) was not engaged in this case. Rather, the second purpose (preventing a contravention) was. And s 32(1)(a) provides power for a maritime officer to exercise maritime powers not only to investigate any (intended) contravention of an Australian law that the officer suspects, on reasonable grounds, the vessel to be involved in, but also to prevent that contravention. The relevant contraventions of Australian law which it was sought to prevent by the exercise of maritime powers were contraventions of the Migration Act. In particular, s 42(1) of the Migration Act provided, at the times relevant to this case, that, subject to some presently irrelevant exceptions, "a non-citizen must not travel to Australia without a visa that is in effect". In addition, if the Indian vessel had entered Australian territorial waters, one or more persons on, or associated with, the vessel may have committed an offence against s 229 of the Migration Act (dealing with the carriage of non-citizens to Australia without documentation) or against one of ss 233A and 233C (dealing with people smuggling and aggravated people smuggling). 79 s 41(1)(c)(i). 80 s 41(1)(c)(ii). Part 3 of the MP Act (ss 50-78) identifies "maritime powers". They include the power81 to detain a vessel and powers82 with respect to "placing and moving persons" on a detained vessel. The central focus of debate in this case is upon the latter group of maritime powers: the powers with respect to placing and moving persons on a detained vessel. Section 72 of the MP Act applies83 to a person who is on a detained vessel when it is detained, or is reasonably suspected of having been on a detained vessel when it was detained. Sub-sections (2)-(4) of s 72 give a maritime officer three powers in respect of such a person: power to return the person to the detained vessel84; power to require the person to remain on the detained vessel until it is either taken to a port or other place, or permitted to depart from the port or other place85; and power to detain and take the person, or cause the person to be taken: to a place in the migration zone; or to a place outside the migration zone, including a place outside Australia."86 The last power (to detain and take) is the central focus of this case. Section 72(5) provides that "[f]or the purposes of taking the person to another place" a maritime officer may within or outside Australia place the person on a vessel or an aircraft, restrain the person on a vessel or an aircraft or remove the person from a vessel or an aircraft. Section 74 provides that: "A maritime officer must not place or keep a person in a place, unless the officer is satisfied, on reasonable grounds, that it is safe for the person to be in that place." 82 Div 8 of Pt 3 (ss 71-75). The power to detain and take to a place outside Australia The plaintiff claims that he was unlawfully detained for all or part of the time he was on board the Commonwealth ship. That allegation presents a number of issues about the construction and application of s 72(4) of the MP Act and, in particular, its provision that "[a] maritime officer may detain the person and take the person, or cause the person to be taken ... to a place outside the migration zone, including a place outside Australia". Those issues may be considered by reference to three questions. What is a "place outside Australia"? Once a decision has been taken about the place to which a person is to be taken, can the power be re-exercised and another place chosen? Must the maritime officer be satisfied, on reasonable grounds, that "it is safe for the person to be" in the place to which the person is to be taken? The first two questions (What is a place outside Australia? and Can the power be re-exercised?) both bear upon whether India was a destination to which the plaintiff might be taken. The Commonwealth parties submitted, in effect, that he might be taken towards India in the hope that he might later be given permission to land. And they sought to support that submission by arguing that the power to detain and take may be exercised and re-exercised as occasion requires. These reasons will show why these arguments should be rejected. The place to which a person is to be taken under s 72(4) must be a place which, at the time the destination is chosen, the person taken has a right or permission to enter. The plaintiff had neither the right to enter India nor permission to do so. The journey to India, and the plaintiff's consequential detention, were not done in execution of the statutory power. The third question (about safety) bears upon whether the plaintiff could have been taken to a place where there is a real risk that he would be persecuted, including, in this case, the country of his nationality (Sri Lanka). If, as the Commonwealth parties contended, the plaintiff could have been taken to Sri Lanka, it may be arguable that the power to take given by s 72(4) is a power to take to any place chosen by the maritime officer (with or without direction from superiors). But these reasons will show why this contention should also be rejected. Only once the issues presented by these three questions have been identified and resolved is it useful to consider the more particular questions asked by the parties in their Special Case. All of those more particular questions depend, either directly or indirectly, upon the proper construction of the MP Act. It is necessary to approach the construction of the MP Act bearing in mind some relevant general principles. Applicable general principles Compulsive powers The MP Act gives officers of the Commonwealth compulsive powers over vessels and persons. The powers may be exercised on reasonable suspicion of intention to contravene one or more Australian laws. It is well-established that statutory authority to engage in what would otherwise be tortious conduct (in this case detaining a vessel and then detaining and taking a person to a place chosen by an officer of the Commonwealth) must be clearly expressed in unmistakable and unambiguous language87. The statutory powers at issue in this case are to be construed in accordance with that principle. But in this case there is a further and important consideration. The particular powers were to be exercised outside Australia. Exorbitant powers As has been noted, the power to detain the Indian vessel (a foreign vessel) was exercised in Australia's contiguous zone. The contiguous zone is an area in which, under Art 33 of UNCLOS, the coastal state may "exercise the control necessary to ... prevent infringement of its customs, fiscal, immigration or sanitary laws and regulations within its territory or territorial sea". The contiguous zone is not, in international law, a part of Australia's territorial sea88 or, in Australian domestic law, "part of Australia"89. In international law, the contiguous zone is an area of the high seas in which Australia, as the coastal state, exercises no sovereignty or jurisdiction, only certain rights or powers of enforcement90. It may be accepted that exercising the control necessary to prevent infringement of laws of the kind described in Art 33 of UNCLOS would include a coastal state stopping in its contiguous zone an inward-bound vessel reasonably suspected of being involved in an intended contravention of one of those laws. 87 See, for example, Coco v The Queen (1994) 179 CLR 427 at 436; [1994] HCA 15. 88 UNCLOS, Arts 3, 4 and 33. See also Seas and Submerged Lands Act 1973 (Cth), ss 3(1) (definition of "contiguous zone"), 5, 6, 13A and 13B. 89 Acts Interpretation Act 1901 (Cth), s 15B(1), (2) and (4). 90 O'Connell, The International Law of the Sea, (1984), vol 2 at 1058; Rothwell and Stephens, The International Law of the Sea, (2010) at 78. Because there must be a power to stop the vessel, it may be accepted that there is a power to detain the vessel (at least for the purposes of investigating whether there is a threat of a relevant contravention). But whether, for the purposes of international law, Art 33 permits the coastal state to take persons on the vessel into its custody or to take command of the vessel or tow it out of the contiguous zone remains controversial91. It is not necessary or appropriate to attempt to resolve any controversy about the proper construction of Art 33. The Commonwealth parties did not submit that international law recognises the right of a coastal state to take steps of the kind described with respect to vessels or persons on vessels stopped and detained in the contiguous zone, and they accepted, correctly, that there is controversy about these matters. They did submit that Australia had exclusive jurisdiction over the Commonwealth ship and all persons on it. So much may readily be accepted, but it is a conclusion that is beside the point and it does not deny the exorbitant character of the powers in issue. Recognising that Australia had exclusive the Commonwealth ship and all aboard it is beside the point because the questions about the scope of the power given by the MP Act to detain and take the plaintiff to a place outside Australia remain unanswered. jurisdiction over The Special Case proceeds from the agreed premise that the plaintiff, and others on the Indian vessel, were persons to whom s 72 of the MP Act applied. Even if, contrary to that fact, the plaintiff and others from the Indian vessel were to be treated as having boarded the Commonwealth ship voluntarily (because, as is agreed, the Indian vessel had become unseaworthy), officers of the Commonwealth thereafter sought to exercise the powers given by s 72 of the MP Act. More particularly, in purported execution of those powers, Australian officials alone determined where the plaintiff and others were to be taken and held them aboard the Commonwealth ship for that purpose. Those are powers properly seen as exorbitant powers which "run counter to the normal rules of comity among civilised nations"92. 91 See, for example, Shearer, "Problems of Jurisdiction and Law Enforcement against Delinquent Vessels", (1986) 35 International and Comparative Law Quarterly 320 at 330; Rothwell and Stephens, The International Law of the Sea, (2010) at 80. 92 Siskina (Owners of cargo lately laden on board) v Distos Compania Naviera SA [1979] AC 210 at 254 per Lord Diplock. The exorbitant nature of the powers is further reason to construe93 the provisions strictly. Statutory misfire? The Commonwealth parties submitted that certain constructions of the MP Act would "strangle" the power given by that Act. It may be accepted that the MP Act should not readily be construed in a way which would make it misfire by stripping it of some relevant practical operation. But no consideration of that kind arises in this case. There was, and could be, no dispute that a maritime officer has taken a person to a place outside Australia only when, at that place, the maritime officer ceases94 to detain the person by discharging the person from custody. And a maritime officer cannot discharge the person from custody in a jurisdiction other than Australia without the permission (or at least acquiescence) of that jurisdiction. If the power given by s 72(4) did not permit taking the plaintiff to India (because he had no permission to land there) and did not permit taking him to Sri Lanka (because he asserted a fear of persecution in that country), a maritime officer, nevertheless, could take the plaintiff either to a place in Australia or to a place outside Australia. More particularly, the plaintiff could be taken to any country with which Australia had made an arrangement for reception of such persons. And it is always to be recalled that, at the time of the events giving rise to this case, Australia had made arrangements with both the Republic of Nauru and the Independent State of Papua New Guinea for reception and processing of unauthorised maritime arrivals. (Both Nauru and Papua New Guinea were then designated under s 198AB of the Migration Act as regional processing countries.) Whether the particular arrangements made with Nauru and Papua New Guinea permitted Australian officials to take persons detained in the contiguous zone to those countries was not explored in argument. But of immediate relevance to the issues of construction is the observation that Australia can make, and has made, standing arrangements with other countries which permit Australian authorities to take foreign nationals to those other countries. Hence, submissions that the MP Act would misfire, or that the power given by the Act would be "strangled", if the plaintiff's construction of the Act were adopted are 93 Siskina [1979] AC 210 at 254-255 per Lord Diplock. properly seen as misplaced. They are submissions that ignore the making of standing arrangements of the kind described. Text and context In opening the case for the Commonwealth parties, the Solicitor-General of the Commonwealth submitted95 that this Court should look at the questions which arise in the matter through a "prism" or "framework" in which "the Parliament in the expressed terms it has used and the expressed limitations on power of which there are some, has quite deliberately drawn a careful balance between the needs of law enforcement in a unique maritime environment, the rights and interests of persons and Australia's international obligations". And as developed, the submissions for the Commonwealth parties appeared, at least at times, to approach the issues of construction of the MP Act on the footing that regard should be had only to the text of the MP Act and that its text should be given the fullest and most ample construction possible96. This Court has emphasised many times the need to grapple with the text of a statute. And of course the MP Act must be construed with proper regard for the practical context within which it will operate. As the Replacement Explanatory Memorandum for the Bill which became the MP Act said97, "[e]nforcement operations in maritime areas frequently occur in remote locations, isolated from the support normally available to land-based operations and constrained by the practicalities involved in sea-based work". But no statute can be construed as if it stands isolated from the wider legal context within which it must operate. The MP Act cannot be construed by searching only for the largest meaning its words could bear. The compulsive and exorbitant nature of the powers precludes that approach. A place outside Australia The power given by s 72(4) to detain and take a person to a place outside Australia is understood better as a single composite power than as two separate powers capable of distinct exercise. That is, the power to detain referred to in s 72(4) is better understood as given in aid of the power to take. And together, 95 [2014] HCATrans 227 at 3652-3665. 96 [2014] HCATrans 228 at 4458-4479. 97 Australia, Senate, Maritime Powers Bill 2012, Replacement Explanatory Memorandum at 1. the words "detain" and "take", read in the context provided by s 72(5)98, show that the power is one which may be exercised without the consent of the person concerned. The power to detain and take is to take to "a place". As has been explained, the place to which a person is taken must be a place at which the maritime officer can discharge the person from the detention that has been effected for the purposes of taking. In the words of s 72(5)(c), the place must be one at which the maritime officer may remove the person from the vessel or aircraft by which the person has been taken to that place. At least ordinarily, the "place" would be within the jurisdiction of another state. That would usually be so if the taking is effected by aircraft and it may be doubted that some wider operation should be given to the power when the taking is effected by a vessel. It may be, however, that "a place" would include a vessel subject to the jurisdiction of another state. These questions about the outer limits of the power need not be decided in this case. What is presently important is that the power is to take to "a place", not "any place", outside Australia. The use of the expression "a place" connotes both singularity and identification. That is, the power is to take to one place identified at the time the taking begins, not to whatever place outside Australia seems at the time of discharge to be fit for that purpose. Because the place to which a person may be taken is an identified place at which the person may be discharged from Australian custody, the destination of the taking must be a place which, at the time it is selected, the person has the right or permission to enter. This understanding of the power is required by the text of s 72(4). It is reinforced by recognition of the compulsive and exorbitant nature of the power. It is further reinforced by considering whether the power can be exercised and re-exercised. Successive destinations? If a decision is made to take a person to an identified place outside Australia, can the power be re-exercised and a different place chosen? Is the 98 "For the purposes of taking the person to another place, a maritime officer may within or outside Australia: place the person on a vessel or aircraft; or restrain the person on a vessel or aircraft; or remove the person from a vessel or aircraft." power given by s 72(4) one to be exercised "from time to time as occasion requires"99? The better view may well be that the power given by s 72(4) can be re-exercised "as occasion requires". But that invites close attention to what are the limits on the power itself, and what kind of "occasion" may permit and require its re-exercise. That attention is invited because the possibility of re-exercise of the power "from time to time" provokes consideration of how often the power can be re-exercised and what effect any, let alone repeated, re-exercise of the power would have on the liberty of the person concerned. It was not suggested that the powers given by s 72(4) may be exercised in a manner which would lead to the indefinite detention of a person who was on board a vessel detained in Australia's contiguous zone. The Commonwealth parties rightly accepted that the powers must be exercised within reasonable times. But that does not entail that the person must be taken to the closest available destination. It is important to recognise that, because the power is to take to a place in Australia or to a place outside Australia, the relevant decision-maker must have a reasonable time within which to decide to what place the person is to be taken and then a further reasonable time to take the person to that place. But there are limits to the destination to which a person may be taken. In Plaintiff S4/2014 v Minister for Immigration and Border Protection100, this Court said that: "The duration of any form of detention, and thus its lawfulness, must be capable of being determined at any time and from time to time. Otherwise, the lawfulness of the detention could not be determined and enforced101 by the courts, and, ultimately, by this Court." This principle reinforces the construction of s 72(4) that has already been described. For the purposes of s 72(4) of the MP Act, a place may be chosen as the place to which a person is to be taken only if, at the time the destination is chosen, the person has the right or permission to enter that place. This case shows why Plaintiff S4/2014. the principle described that conclusion follows from 99 Acts Interpretation Act 1901 (Cth), s 33(1). 100 (2014) 88 ALJR 847 at 853 [29]; 312 ALR 537 at 543; [2014] HCA 34. 101 Crowley's Case (1818) 2 Swans 1 at 61 per Lord Eldon LC [36 ER 514 at 531]. The Commonwealth ship took the plaintiff and others from the Indian vessel towards India and "arrived near India" about ten days after the National Security Committee decided that this should be their destination. But, the plaintiff and others not having permission to land in India, they were not discharged in that country, and a further twelve days elapsed before the decision was made to take them to the Territory of the Cocos (Keeling) Islands. If, as the Commonwealth parties submitted, the power to take to a place outside Australia can be re-exercised from time to time, as occasion requires, once negotiations with India were thought not sufficiently likely to allow for landing the plaintiff and others soon enough, a different destination outside Australia could then have been chosen. And a further period would have elapsed while negotiations were had to allow the plaintiff and others to land in that other place. Presumably, if those negotiations did not bear fruit soon enough, the process could be repeated. But what is soon enough? How many attempts can be made? How long can detention be prolonged? This is not to confine the power given by s 72(4) by reference to "extreme examples" or "distorting possibilities"102. Nor is it to assume that the power would be exercised "improperly or venally"103. The facts and circumstances of this case are enough to suggest the real possibility of prolongation of detention while political and diplomatic discussions take place in the course of searching for a willing country of reception. And if the power can be re-exercised as occasion requires, the length of detention will likely be determined by matters peculiar to the particular destination or destinations that is or are chosen. They are matters dependent upon the agreement or acquiescence of another state. They are, therefore, matters outside the control of the Commonwealth or its officers. Hence, the length of detention would depend upon the particular (unconstrained) decision to choose as the destination to which a person subject to s 72 of the MP Act should be taken a place (or succession of places) which that person has no right or permission to enter. That is reason enough to reject a construction of s 72(4) which would permit taking a person to a place which that person has no right or permission to enter. Some emphasis was given in this case to the fact that the plaintiff and others on the Indian vessel had set off from India. And from time to time in argument, it was suggested that the place of departure was "an obvious" (even "the most obvious") place to which they should be taken. But why should that be 102 Kartinyeri v The Commonwealth (1998) 195 CLR 337 at 380-381 [87]-[88]; [1998] HCA 22. 103 Egan v Willis (1998) 195 CLR 424 at 505 [160]; [1998] HCA 71. so? India is not the country of nationality104 of either the plaintiff or the others on the Indian vessel. Departure from India said nothing about whether the plaintiff, or the others, were living lawfully in that country and there is nothing in the Special Case which says anything about the status in that country of the plaintiff or anyone else on the Indian vessel. There is, then, no basis for treating India as an obvious place to which the plaintiff could or should be returned. Further, if the power to take to a place outside Australia permits a maritime officer to take a person to a place where it is hoped that the person might be allowed to land, how would a court (and ultimately this Court) determine whether the person has been detained longer than reasonably necessary to be taken from the contiguous zone to his or her eventual destination? How is a court (and ultimately this Court) to judge whether that hope has been explored with sufficient diligence to make the consequential detention not unduly, and thus not unlawfully, prolonged? If neither a right to land nor an existing permission to do so is required, and hope of landing will do, what level of hope must exist? The Special Case refers to the need, in this case, for "diplomatic negotiations between Australia and India (including the time required to arrange and undertake meetings at a Ministerial level)". Is a court to inquire into the course taken in diplomatic discussions between Australia and the government of a place about whether, or on what terms, that government would grant permission to land to persons whom Australia wishes to leave in that place but who have no right or permission to enter? And if a court cannot or should not do that, how would the lawful duration of the detention be judged? By contrast, if a place may be chosen as the place to which a person is to be taken only if, at the time the destination is chosen, the person has the right or permission to enter that place, the reasonable length of detention is readily capable of being judged by reference to wholly objective considerations like the time necessary to identify a place where the person has the right or permission to enter, travel time to that place, any need for the vessel to be resupplied, the state of weather conditions on the journey and the like105. If, for any reason or no reason, the government of the place to which the person is being taken refuses to allow that person to exercise a right of entry to 104 cf Plaintiff M70/2011 v Minister for Immigration and Citizenship (Malaysian Declaration Case) (2011) 244 CLR 144 at 190 [92]; [2011] HCA 32. 105 cf MP Act, s 96, providing for the matters to be taken into account in determining whether a maritime officer has done something as soon as practicable under Pt 5 of that Act. the country or revokes the permission which existed, there would be an "occasion" on which the power to take to a place could be re-exercised. Subject to that limited qualification, the power to detain and take to a place outside Australia can be exercised to take only to a place which, at the time the destination is chosen, the person has the right or permission to enter. Section 74 and a "safe" place Section 74 provides that "[a] maritime officer must not place ... a person in a place, unless the officer is satisfied, on reasonable grounds, that it is safe for the person to be in that place". When a maritime officer, acting under s 72(4), takes a person to a place outside Australia, must the place to which the person is taken be a place at which the officer is satisfied, on reasonable grounds, it is safe for the person to be? The Commonwealth parties submitted that s 74 deals only with what happens between detention (presumably detention of a vessel) and the discharge from detention. Hence, so the argument ran, a maritime officer may lawfully remove a person from an aircraft or vessel in the place of destination without any regard for what lies at or after the foot of the aircraft's steps or the vessel's gangplank. Such a reading of s 74 is inconsistent with its text, read in the context provided by the MP Act as a whole and s 72 in particular. Section 72(4) and s 74 are both directed to a maritime officer. The former provision gives such an officer power to detain and take a person to "a place". The latter provision forbids the officer placing the person "in a place" unless satisfied that it is safe for the person to be in that place. There is no reason to read the words "a place" in s 74 as if they do not include what s 72(4) refers to as "a place". And to read the provisions of s 74 as not speaking to the officer's conduct in removing a person from an aircraft or vessel would depend upon treating s 74 as ceasing operation before the maritime officer concerned has completed the task required by s 72(4). There is no warrant for doing that. It is, therefore, not necessary to consider106 whether an officer of the Commonwealth could lawfully be authorised to exercise a statutory power of the kind in issue in this case without reasonable care for the safety of the person concerned. Section 74 may be engaged in a very wide variety of circumstances. In this case, the circumstances in which the Indian vessel was intercepted and detained suggested that it was very probable that those on board the vessel would claim to be refugees. The plaintiff was asked questions about his personal and 106 cf The Commonwealth v Mewett (1997) 191 CLR 471; [1997] HCA 29. biographical details and it was known that he was a Sri Lankan national. He was not asked why he had left Sri Lanka or where he wanted to go. The reference in s 74 to a person being "safe" in a place must be read as meaning safe from risk of physical harm. A decision-maker who considers whether he or she is satisfied, on reasonable grounds, that it is safe for a person to be in a place must ask and answer a different question from that inferentially posed by the Refugees Convention107. But there is a very considerable factual overlap between the two inquiries. Many who fear persecution for a Convention reason fear for their personal safety in their country of nationality. If, then, it had been intended to take the plaintiff to Sri Lanka, a maritime officer could not have been satisfied, on reasonable grounds, that it was safe to put him in that place without asking the plaintiff some further questions including, at least, whether he feared for his personal safety in that place. And if, as might be expected, the plaintiff did say that he feared going back to Sri Lanka, and the maritime officer could not decide that the fear was ill-founded, the maritime officer could not be satisfied, on reasonable grounds, that it would be safe to place him there. This conclusion is significant for two reasons. First, it is a conclusion that denies the argument of the Commonwealth parties that a maritime officer could lawfully have decided that the plaintiff should be taken to Sri Lanka, whether or not he claimed to be a refugee. Section 74 precluded taking him to Sri Lanka without asking at least whether he feared for his personal safety in that place. Second, the conclusion obviates the need to consider whether the obligations which Australia has assumed under the Refugees Convention and other international instruments referred to in the Special Case108 are relevant to construing the ambit of the power given by s 72(4). By acceding to the Refugees Convention, Australia has undertaken to other parties to the Convention obligations with respect to certain persons who are unable to seek the diplomatic 107 The Convention relating to the Status of Refugees (1951) as amended by the Protocol relating to the Status of Refugees (1967). See Chan v Minister for Immigration and Ethnic Affairs (1989) 169 CLR 379 at 388-390 per Mason CJ, 399-400 per Dawson J, 406-407 per Toohey J, 429-431 per McHugh J; [1989] HCA 62. 108 The International Covenant on Civil and Political Rights (1966); [1980] ATS 23 ("the ICCPR") and the Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment (1984); [1989] ATS 21 ("the CAT"). or consular protection109 of their country of nationality. It is unnecessary to decide whether these obligations are relevant to the construction of the MP Act. It is unnecessary to decide whether the MP Act should be construed110 as giving an officer of the Commonwealth power to act outside Australia, on the high seas, in a way which would breach the obligations Australia has undertaken under these international instruments. The more particular questions asked by the parties in the Special Case must then be considered in the light of these conclusions about the proper construction of the MP Act. First, the s 72(4) power to detain and take to a place outside Australia permits detention and taking only to a place which the person has, at the time the destination is chosen, a right or permission to enter. Second, s 74 requires that a maritime officer may take a person to a place outside Australia only if satisfied, on reasonable grounds, that the person will be safe in that place. These conclusions about the proper construction of ss 72 and 74 provide the necessary basis for considering the questions stated in the Special Case. Before considering those questions, however, it is convenient to deal with a point which the plaintiff put at the forefront of his written submissions. The plaintiff submitted that "there was an obligation to give the plaintiff an opportunity to be heard prior to any exercise of statutory or (if it exists) non-statutory power to take the plaintiff to a place outside Australia and that obligation was breached". Was the exercise of power under s 72 subject to an obligation to give the plaintiff an opportunity to be heard? Procedural fairness and s 72 As already mentioned, s 72 gives a maritime officer three powers in respect of a person who is on a detained vessel when it is detained, or is reasonably suspected of having been on board a detained vessel when it was detained: to return the person to the vessel; to require the person to remain on the vessel; and to detain and take the person to a place in Australia or a place outside Australia. A maritime officer need not give a person to whom s 72 109 Minister for Immigration and Multicultural Affairs v Khawar (2002) 210 CLR 1 at 21 [62]; [2002] HCA 14; Minister for Immigration and Multicultural Affairs v Respondents S152/2003 (2004) 222 CLR 1 at 8 [19]; [2004] HCA 18. 110 Polites v The Commonwealth (1945) 70 CLR 60 at 68-69 per Latham CJ, 77 per Dixon J, 80-81 per Williams J; [1945] HCA 3; Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273 at 287; [1995] HCA 20; Kartinyeri v The Commonwealth (1998) 195 CLR 337 at 384 [97]. applies any opportunity to be heard about which of those three powers will be exercised or how the power will be exercised. Each of the powers given by s 72 is a compulsive power and each is available111 only because the person concerned is, or is reasonably suspected of having been, on a detained vessel. As has already been seen, a foreign vessel cannot be detained outside Australian territorial waters except in the contiguous zone and only then for the purpose of investigating or preventing actual or intended contravention of Australian law. Section 74 of the MP Act deals expressly with the personal safety of a person who is or was on a detained vessel. But apart from considerations of personal safety, the person from the detained vessel has no relevant right, interest or expectation112 which may be adversely affected by the decision about which of the three powers given by s 72 is to be used in consequence of the vessel's detention, or about how one or other of those powers is to be used. It may be accepted, for the purposes of argument, that the person's rights, interests or expectations are affected by the vessel being detained and, in consequence, he or she becoming subject to s 72. But that affecting of rights, interests and expectations has happened by the time a maritime officer comes to deciding which of the powers given by s 72 is to be used and how it is to be used. So, for example, detention of the vessel, and consequent prevention of the commission of a suspected contravention of the law, may well have defeated some expectation of the persons on the vessel about seeking to enter Australia. But that expectation has already been defeated when the maritime officer is deciding where the person from the detained vessel should be taken or placed. Because s 74 deals expressly with personal safety, s 72's conferral of power on a maritime officer to decide where a person who is or was on a detained vessel should be taken or placed (whether on the detained vessel or elsewhere) should not be read as obliging the maritime officer to give the person a hearing about which of the powers is to be exercised or how it will be exercised. More particularly, in deciding whether to detain and take to a place in Australia or to a place outside Australia a maritime officer is not obliged to ask the person which of those courses should be taken. These conclusions do not detract from the force of s 74, and are not to be understood as doing so. A maritime officer may not place a person in a place 112 Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82 at 100 [39]; [2000] HCA 57; Plaintiff S10/2011 v Minister for Immigration and Citizenship (2012) 246 CLR 636 at 666 [97]; [2012] HCA 31. unless satisfied, on reasonable grounds, that it is safe for the person to be in that place. There will be many circumstances in which a maritime officer will not have reasonable grounds for concluding that it is safe for a person to be in a place if the officer has not asked the person whether he or she has reason to fear for his or her safety there. But, subject to the operation of s 74, the plaintiff's general submission that the exercise of power under s 72 was subject to an obligation to give the plaintiff an opportunity to be heard should not be accepted. The questions in the Special Case Leaving aside questions about the costs of the Special Case and about orders either disposing of the proceeding or providing for its further conduct, the parties asked six questions. Questions 1, 2 and 4 were directed to the power under s 72(4) of the MP Act. Questions 3 and 5 were directed to the "non-statutory executive power of the Commonwealth". Question 6 asked generally whether the detention of the plaintiff was unlawful for any and what part of the time he was on board the Commonwealth ship and, if so, whether he is entitled to claim damages in respect of that detention. It will be convenient to deal with the questions in that order: first the questions about s 72(4), then the questions about non-statutory executive power and finally the question about unlawful detention. One preliminary point must be made. The parties agreed in stating the questions as "the questions of law arising in the proceeding"113. To submit, as the Commonwealth parties did, that one of the agreed questions is hypothetical, or should not be answered for want of sufficient facts, does not sit easily with the agreement that necessarily underpins the parties proceeding by way of special case. The matters advanced in argument as presenting difficulties in answering the question should have been drawn to attention before the Special Case was referred for argument before a Full Court. The s 72(4) questions Question 1 asks whether s 72(4) authorised a maritime officer to detain the plaintiff for the purpose of taking him, or causing him to be taken, to India. The question identifies three different considerations as affecting that general question. They are described as: 113 High Court Rules 2004, r 27.08.1. "(a) whether or not the plaintiff would be entitled by the law applicable in India to the benefit of the non-refoulement obligations[114]; in implementation of a decision by the Australian Government that the plaintiff (and others on the Indian vessel) should be taken to India without independent consideration by the maritime officer of whether that should be so; and (c) whether or not, prior to the commencement of the taking of the plaintiff to India, an agreement or arrangement existed between Australia and India concerning the reception of the plaintiff in India". These three considerations may be referred to respectively as "non-refoulement", "chain of command" and "permission to land". The third of the considerations (permission to land) has been considered. For the reasons that have been given, s 72(4) did not authorise taking the plaintiff to a place where, at the time the destination was chosen, he did not have a right or permission to enter. At no relevant time did the plaintiff have the right or permission to enter India. Further, s 74 prevented a maritime officer "placing" the plaintiff in India unless satisfied, on reasonable grounds, that it was safe for the plaintiff to be in that place. These conclusions require that the question be answered in the plaintiff's favour. But the exact form of answer requires some further examination of the two other considerations to which it refers: non-refoulement and chain of command. Non-refoulement The Special Case states no fact suggesting that the plaintiff would not be "safe" in India and there is, therefore, no basis for assuming that he would not be. Nor does the Special Case state any fact suggesting that in India there was at any relevant time a risk of the kind referred to in the Special Case in defining the "non-refoulement obligations": "a real risk of the plaintiff suffering persecution as defined in the Refugees Convention or significant harm of the kind described in Art 7 of the ICCPR and Art 3 of CAT by being refouled, directly or indirectly, 114 The Special Case described the "non-refoulement obligations" as obligations "under or to the effect of Art 33(1) of the Refugees Convention, Art 7 of the [ICCPR] and Art 3 of the [CAT] ... where there is a real risk of the plaintiff suffering persecution as defined in the Refugees Convention or significant harm of the kind described in Art 7 of the ICCPR and Art 3 of CAT by being refouled, directly or indirectly, to Sri Lanka prior to his protection claims being determined in accordance with law". to Sri Lanka prior to his protection claims being determined in accordance with law". Again, there is no basis for assuming that there was such a risk. Hence, so much of Question 1 as asks about exercise of the s 72(4) power "whether or not the plaintiff would be entitled by the law applicable in India to the benefit of the non-refoulement obligations" must be understood as asking whether the matter described was a mandatory relevant consideration. It may be accepted that, as the Commonwealth parties pointed out, the consideration described in the question invites attention to Indian domestic law and there is no fact agreed in the Special Case about the content of that law. And it may further be accepted that, as the Commonwealth parties also pointed out, assessing the risk of refoulement requires consideration of state practice as well as the domestic law of that state. But if these observations reveal deficiencies in the facts on which the question is based or in the way in which the question is framed, they are deficiencies for which both sides of the litigation must take equal responsibility. Having regard to these observations, and in the light of the conclusion that s 74 requires that a maritime officer be satisfied that it is safe to place a person in the place to which that person is taken, the answer which is given to Question 1 should reflect the conclusion reached about s 74 but otherwise decline to deal with whether, or to what extent, questions of non-refoulement are mandatory relevant considerations or otherwise bear upon the construction of the powers given by s 72(4). Chain of command The plaintiff submitted that the maritime officer who detains and takes a person to a place outside Australia must independently consider where the person is to be taken. That is, the power given by s 72(4) was said to be one which the maritime officer concerned must exercise personally. Section 104(1) of the MP Act provides that each of four classes of person is a maritime officer: a member of the Australian Defence Force, an officer of Customs (within the meaning of the Customs Act 1901 (Cth)), a member or special member of the Australian Federal Police, and any other person appointed as a maritime officer by the Minister. The first three classes of persons are members of disciplined and hierarchical forces. Each member of those forces is subject to the command of superiors and ultimately each force is, and the individual members of the force are, subject to the control of the Executive government. Why, against this background, the disposition of persons taken into Australian custody from a vessel detained on that part of the high seas which is within Australia's contiguous zone should be a matter for the personal decision of a particular maritime officer was not explained. Nor was it explained how the relevant maritime officer was to be identified or how attribution of the power to an individual would fit with the disciplined and hierarchical character of those services whose members are maritime officers. The assumption implicit in the plaintiff's submission was that the decision was to be made by the most senior maritime officer at the scene. But if that is so, why should that officer not be subject to command from higher authority in the service? Why should the head of the relevant service not be subject to direction from relevant Ministers about the exercise of the powers? No satisfactory answer or explanation was, or can be, given in respect of these questions to support the construction of s 72(4) for which the plaintiff contended. The lack of satisfactory answer to these questions is reason enough to reject the construction of s 72(4) proffered on behalf of the plaintiff. But there is an additional affirmative reason for preferring a construction which would permit a maritime officer to take to a place determined at whatever level in the chain of command (up to and including the civilian control exercised by relevant Ministers) is judged appropriate in the particular circumstances of the case. As has been noted, s 74 obliges a maritime officer to consider whether a person who is detained and taken to a place under s 72(4) will be safe in that place. These are issues about which a maritime officer on the scene must be able to obtain advice from others, including from within the command structure of the organisation of which the particular officer is a member. If, as might have been expected to be the case here, a person detained claims to fear persecution in his or her country of nationality, a maritime officer will be better able to reach the degree of satisfaction required by s 74 if the decision about where to take the person is made on the basis of better information than may be available at the scene. That may mean that the decision will be taken at whatever point in the chain of command and civilian control is best able to identify what courses of action are available. For these reasons, the facts that the National Security Committee decided that those on the Indian vessel should be taken to India and that maritime officers acted in accordance with that decision do not render the consequent detention and taking beyond the power given by s 72(4). Answering Question 1 Having regard to the conclusions that have been reached, a "speaking" answer, rather than bare affirmative or negative answers, should be given to the first of the questions stated for the opinion of the Court. And the answer that is given should be to the whole of the question and should not treat the three sub-paragraphs as posing separate questions. We would answer the question: "Section 72(4) of the Maritime Powers Act 2013 (Cth) did not authorise a maritime officer to detain and take the plaintiff to India when, at the time that destination was chosen, the plaintiff had neither the right nor permission to enter India. Subject to that limitation, s 72(4) authorised a maritime officer to detain and take the plaintiff, a person reasonably suspected of having been on the Indian vessel when it was detained under that Act, to a place outside Australia determined by the National Security Committee of Cabinet, and to place the plaintiff in that place if the officer was satisfied, on reasonable grounds, that it would be safe for the plaintiff to be in that place. Otherwise it is not appropriate to answer this question." Answering Question 2 Question 2 in the Special Case reads: "Did s 72(4) of the Maritime Powers Act authorise a maritime officer to: take the steps set out in paragraph 20 in implementing the decision to take the plaintiff to India; detain the plaintiff for the purposes of taking the plaintiff to India?" The steps set out in par 20 of the Special Case were detaining the plaintiff (and others) on the Commonwealth ship while it travelled towards India and continuing to detain the plaintiff (and others) on the Commonwealth ship "while waiting for it to become practicable to complete the taking of those persons to India". Because the plaintiff had no right or permission to enter India, s 72(4) did not authorise a maritime officer to detain and take the plaintiff to India, whether by implementing the steps described in the Special Case or otherwise. Both parts of Question 2 should be answered "No". Answering Question 4 Question 4 asks whether the power under s 72(4) to take the plaintiff to a place outside Australia, being India, was subject to an obligation to give the plaintiff an opportunity to be heard about the exercise of that power and, if so, whether that obligation was breached. Having regard to the conclusions already reached about the absence of power under that provision to take the plaintiff to India, it is not necessary to answer this question. Non-statutory executive power The Commonwealth parties submitted that, even if s 72(4) did not authorise the detaining and taking of the plaintiff to India, the non-statutory executive power of the Commonwealth did. Question 3 in the Special Case reads: "Did the non-statutory executive power of the Commonwealth authorise an officer of the Commonwealth to: take the steps set out in paragraph 20 for the purpose of preventing the plaintiff from entering Australia; detain the plaintiff for the purposes of taking the plaintiff to India?" As has already been noted, the steps set out in par 20 of the Special Case were detaining the plaintiff (and others) on the Commonwealth ship while it travelled towards India and continuing to detain the plaintiff (and others) on the Commonwealth ship "while waiting for it to become practicable to complete the taking of those persons to India". Question 5 asks whether any non-statutory executive power of the Commonwealth to take the plaintiff to "a place outside Australia, being India" was subject to an obligation to give the plaintiff an opportunity to be heard about the exercise of that power and, if so, whether that obligation was breached. The Commonwealth parties emphasised that s 5 of the MP Act provides that "[t]his Act does not limit the executive power of the Commonwealth". The plaintiff emphasised that s 3 provides that "[t]his Act binds the Crown in each of its capacities". The essence of the argument advanced by the Commonwealth parties about the so-called "non-statutory executive power" is best captured by Roskill LJ in Laker Airways Ltd v Department of Trade115, when his Lordship asked "can the Crown, having failed to enter through the front door ... enter through the back door and in effect achieve the same result by that means of entry"? In this case the Commonwealth parties submitted that if what was done was not authorised by the MP Act, they could enter through what amounts to the back door of the so-called "non-statutory executive power" and achieve the same result by that means of entry. It is greatly to be doubted that the MP Act, and s 5 in particular, should be read as permitting so strange a result. Rather, it is 115 [1977] QB 643 at 719. probable that s 5 of the MP Act should be read as saying no more than that no negative inference should be drawn about the ambit of executive power from the enactment of the MP Act. And that would be a construction of s 5 which would sit more easily with s 3 providing that the MP Act binds the Crown in each of its capacities. For the reasons that follow, however, it is not necessary to decide this question. Consideration of whether some non-statutory executive power of the Commonwealth could authorise the detention of the plaintiff on board the Commonwealth ship must begin with a clear identification of the content of the question that is asked. The question is not asking about whether a power exists or what the extent of that power may be. The relevant question is much narrower and more focused. It is whether the exercise of a power (described no more precisely than as a "non-statutory executive power") justified what otherwise would be a false imprisonment and any associated trespass to the person. This being the relevant question, it is not useful to begin by asking what power Australia as a nation, or the Executive government in particular, has to regulate the arrival of aliens within Australian territory. Nor is it useful to appeal, as so much of this aspect of the argument on behalf of the Commonwealth parties did, to notions of "the defence and protection of the nation"116. Arguments beginning in those ideas depend ultimately on assertion117: that the government of the nation must have the power to regulate who enters the nation's territory and must have the power to repel those who seek to do so without authority. But even if it were to be accepted that it is necessary or appropriate (or even, if relevant, convenient) that the government have such a power, observations of that kind would not answer the questions118 about the scope of the power and the organ or organs of government which must exercise it. And no matter whether those assertions are said to be rooted in the royal prerogative or said to inhere in the notion of the executive power of the Commonwealth vested by s 61 of the Constitution in the Queen and "exercisable by the Governor-General as the Queen's representative", they remain assertions about a capacity to project force at, or in this case beyond, the geographical boundaries of the nation. Those assertions can then be tested only by resort to 116 [2014] HCATrans 228 at 6625-6626, 6647. 117 Selway, "All at Sea β Constitutional Assumptions and 'The Executive Power of the Commonwealth'", (2003) 31 Federal Law Review 495. 118 Winterton, Parliament, the Executive and the Governor-General, (1983) at 29-30; Evans, "The Rule of Law, Constitutionalism and the MV Tampa", (2002) 13 Public Law Review 94 at 97; Zines, "The Inherent Executive Power of the Commonwealth", (2005) 16 Public Law Review 279 at 281, 291-292. notions of "sovereignty"119 and "jurisdiction"120, which all too often are used to mask deeper questions about their meaning and application. What is presently in issue is whether the so-called "non-statutory executive power" provides an answer to a claim made in an Australian court that officers of the Commonwealth committed a tort against the plaintiff. That is, the Commonwealth parties seek to assert that the plaintiff's claim for damages for wrongful imprisonment is met by saying that his detention was an exercise of a species of executive power. As this Court's decision in Blunden v The Commonwealth121 shows, it is necessary to begin by asking what law is to be applied in deciding the plaintiff's claim. And in this case, answering that question requires recognition that the jurisdiction being exercised is federal jurisdiction, under s 75(iii) of the Constitution, as a matter in which the Commonwealth and a person being sued on behalf of the Commonwealth are parties. Section 80 of the Judiciary Act 1903 (Cth) is thus engaged and "[s]o far as the laws of the Commonwealth are not applicable or so far as their provisions are insufficient to carry them into effect, or to provide adequate remedies or punishment, the common law in Australia as modified by the Constitution ... shall, so far as it is applicable and not inconsistent with the Constitution and the laws of the Commonwealth", govern the Court in its exercise of the federal jurisdiction conferred by s 75(iii). In this case, the events giving rise to the claim occurred on the high seas. Some of the events, including the initial detention of the plaintiff, took place in Australia's contiguous zone but the rest of the events occurred beyond that zone. The tort of which complaint is made is, for that reason, what the choice of law writers have described122 as a "maritime tort". As four members of this Court said123 in Blunden: 119 cf H W R Wade, "The Basis of Legal Sovereignty", [1955] Cambridge Law Journal 172; R v Kidman (1915) 20 CLR 425 at 436 per Griffith CJ; [1915] HCA 58. 120 Baxter v Commissioners of Taxation (NSW) (1907) 4 CLR 1087 at 1142 per Isaacs J; [1907] HCA 76; Lipohar v The Queen (1999) 200 CLR 485 at 516-517 [78]-[79] per Gaudron, Gummow and Hayne JJ; [1999] HCA 65. 121 (2003) 218 CLR 330; [2003] HCA 73. 122 See, for example, Dicey, Morris and Collins, The Conflict of Laws, 15th ed (2012), vol 2 at 2215-2217. 123 (2003) 218 CLR 330 at 340 [23] per Gleeson CJ, Gummow, Hayne and Heydon JJ. "where ... the relevant events giving rise to a 'maritime tort' occurred on the high seas, one asks what body of law other than that in force in the forum has any better claim to be regarded by the forum as the body of law dispositive of the action litigated in the forum?124" In this case, where the detention was on board an Australian ship, no law other than Australian law has any claim to be dispositive of the action. Accordingly, the immediately relevant question is whether, under Australian law, the Commonwealth may meet a claim for wrongful imprisonment by saying only that the detention was effected by officers of the Commonwealth in pursuance of instructions given by the Executive government to prevent the persons concerned entering Australian territory without a visa. Does the executive power of the Commonwealth of itself provide legal authority for an officer of the Commonwealth to detain a person and thus commit a trespass? That question must be answered "No". It is enough to repeat what was said in Chu Kheng Lim v Minister for Immigration125: "Neither public official nor private person can lawfully detain [an alien who is within this country, whether lawfully or unlawfully] or deal with his or her property except under and in accordance with some positive authority conferred by the law126. Since the common law knows neither lettre de cachet nor other executive warrant authorizing arbitrary arrest or detention, any officer of the Commonwealth Executive who purports to authorize or enforce the detention in custody of such an alien without judicial mandate will be acting lawfully only to the extent that his or her conduct is justified by valid statutory provision." (emphasis added) No later decision of this Court casts any doubt on the accuracy of this statement. There is no basis for limiting the force of what is said there, or treating127 the decision as not dealing with whether, absent statutory authorisation, the Executive has power to detain. No doubt, the passage quoted 124 cf Foote, A Concise Treatise on Private International Law, 5th ed (1925) at 524. 125 (1992) 176 CLR 1 at 19 per Brennan, Deane and Dawson JJ; [1992] HCA 64. 126 See, generally, Kioa v West (1985) 159 CLR 550 at 631; [1985] HCA 81; Ex parte Lo Pak (1888) 9 LR (NSW) 221 at 244-245; Ex parte Walsh and Johnson; In re Yates (1925) 37 CLR 36 at 79-80; [1925] HCA 53; Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 528-529; [1987] HCA 12. 127 cf Ruddock v Vadarlis (2001) 110 FCR 491 at 543 [195], 544 [197]. from Chu Kheng Lim focused upon the exercise of power within Australia. This case concerns actions taken beyond Australia's borders. But why should some different rule apply there, to provide an answer to a claim made in an Australian court which must be determined according to Australian law? To adopt and adapt what was said in Chu Kheng Lim, why should an Australian court hold that an officer of the Commonwealth Executive who purports to authorise or enforce the detention in custody of an alien without judicial mandate can do so outside the territorial boundaries of Australia without any statutory authority? Reference to the so-called non-statutory executive power of the Commonwealth provides no answer to that question. Reference to the royal prerogative provides128 no answer. Reference to "the defence and protection of the nation" is irrelevant, especially if it is intended to evoke echoes of the power to declare war and engage in war-like operations. Reference to an implied executive "nationhood power" to respond to national emergencies129 is likewise irrelevant. Powers of those kinds are not engaged in this case. To hold that the Executive can act outside Australia's borders in a way that it cannot lawfully act within Australia would stand legal principle on its head. Both parts of Question 3 in the Special Case should be answered "No". Those answers make it unnecessary to answer Question 5. Unlawful detention For the reasons which have been given, taking the plaintiff to India was not authorised by s 72(4) or by any non-statutory executive power of the Commonwealth. It follows that the plaintiff's detention on the Commonwealth ship for so long as he was being taken to India and while the ship was "near India" "waiting for it to become practicable to complete the taking" of the plaintiff and others to India was not authorised. And, depending upon what further facts may be revealed at trial about journey times and related issues, it may be that part of the time taken to travel from "near India" to the Territory of the Cocos (Keeling) Islands was longer than would have been reasonably necessary to take the plaintiff from the point at which the Indian vessel was detained to the place in Australia at which he was ultimately discharged from the Commonwealth ship. The Commonwealth parties submitted that none of these observations matters. Rather, so they submitted, it is necessary to recognise that, if, following the detention of the Indian vessel, the plaintiff had been taken immediately to a 128 Entick v Carrington (1765) 2 Wils KB 275 at 291 [95 ER 807 at 817]. 129 Pape v Federal Commissioner of Taxation (2009) 238 CLR 1; [2009] HCA 23. place in Australia, he would at once have been detained under s 189 of the Migration Act and would have been subject to the regional processing provisions of subdiv B of Div 8 of Pt 2 of that Act. The Commonwealth parties submitted that, in these circumstances, the plaintiff should be held to have no claim to anything more than nominal damages. The submission made by the Commonwealth parties takes as its premise that the detention in fact effected by officers of the Commonwealth was not lawful. The submission is that the plaintiff can have no remedy for that unlawful conduct, other than nominal damages, because, no matter how long the unlawful detention persisted and no matter what were the conditions of the detention which was in fact effected, the plaintiff could and would have been subject, in another place and under different conditions, to a lawful deprivation of his liberty. The differences are probably reason enough to reject the submission. But there is a more fundamental reason to do so. The submission of the Commonwealth parties implicitly assumed that damage is the gist of the tort of false imprisonment. It is not. Like all trespassory torts, the action for false imprisonment is for vindication of basic legal values: in this case the value long assigned by the common law to liberty from restraint, especially restraint at the behest of government. False imprisonment is, and long has been130, actionable without proof of special damage. the imprisonment131, or for some other reason suffered no substantial loss132, neither denies the availability of the action nor provides a defence to it. Such matters are relevant, if at all, only to the assessment of damages but do not, of themselves, require the conclusion that only nominal damages may be awarded. that a plaintiff was unaware of Hence, demonstrating One other strand of argument advanced on behalf of the Commonwealth parties should be identified and considered briefly. They submitted that once aboard the Commonwealth ship, the plaintiff and others who had been on the Indian vessel were subject the Commonwealth ship. Hence, the argument continued, it was open to the that were made for the particular arrangements commander accommodating the plaintiff and others on board the ship. So much may be the commander of the control of to make 130 See, for example, Huckle v Money (1763) 2 Wils KB 205 [95 ER 768]; Pollock, The Law of Torts, (1887) at 159, 188-193. 131 See Prosser, "False Imprisonment: Consciousness of Confinement", (1955) 55 Columbia Law Review 847. See also Murray v Ministry of Defence [1988] 1 WLR 692 at 703; [1988] 2 All ER 521 at 529. 132 R (Lumba) v Secretary of State for the Home Department [2012] 1 AC 245. accepted for the purposes of argument. But the central complaint which the plaintiff makes is about his being detained on the Commonwealth ship, not about the conditions in which he was detained. The conditions in which he was detained may or may not be relevant to damages. It is neither necessary nor desirable to express any view about whether that is so. For immediate purposes it is enough to observe that the lawfulness of the plaintiff's detention directs attention to whether coming under the control of the commander of the Commonwealth ship for the period the plaintiff was on board that ship was lawful. Those are questions determined by the proper construction and application of the MP Act and, in particular, s 72. Whether this is a case in which only nominal damages should be allowed should not be decided on the facts recorded in the Special Case. Plainly, such a verdict is open in a case where a form of lawful detention was available and would have been effected. But it would not be right to foreclose the examination that can take place only at a trial of whether the differences between the form of detention (as to both place and conditions of detention) actually effected and the form of detention which could and would lawfully have been effected may warrant allowing more than nominal damages. Question 6 should be answered accordingly. Other issues Several other issues were touched on in the course of the argument of this matter. It is not necessary to consider either the plaintiff's argument that the decision to take the plaintiff and others to India was made for an impermissible or improper purpose of deterring others or the riposte of the Commonwealth parties that this claim falls outside the scope of the Special Case. The conclusion reached about the places outside Australia to which a person may be taken, coupled with the operation of s 74, renders further consideration of these questions unnecessary in this case. In addition, as has already been noted, it is not necessary in this case to decide whether or to what extent the ambit of the power given by s 72(4) is affected by Australia's accession to the Refugees Convention, the ICCPR or the CAT. Finally, there remain the last two questions in the Special Case, about costs and orders for the further conduct of the matter. Although the answers which should be given to the questions stated in the Special Case are not those propounded by the plaintiff, and although several of the arguments advanced on the plaintiff's behalf either have not been accepted or need not be considered, the plaintiff has had sufficient success to warrant his having his costs. The defendants should pay the costs of the Special Case. The matter should be remitted to the Federal Circuit Court of Australia for such further interlocutory steps as that Court considers necessary and thereafter for trial. Conclusion and orders For these reasons, the questions asked in the Special Case should be answered as follows: Did s 72(4) of the Maritime Powers Act authorise a maritime officer to detain the plaintiff for the purpose of taking him, or causing him to be taken, to a place outside Australia, being India: (a) whether or not the plaintiff would be entitled by the law applicable in India to the benefit of the non-refoulement obligations; in implementation of a decision by the Australian Government that the plaintiff (and others on the Indian vessel) should be taken to India without independent consideration by the maritime officer of whether that should be so; and (c) whether or not, prior to the commencement of the taking of the plaintiff to India, an agreement or arrangement existed between Australia and India concerning the reception of the plaintiff in India? Answer: Section 72(4) of the Maritime Powers Act 2013 (Cth) did not authorise a maritime officer to detain and take the plaintiff to India when, at the time that destination was chosen, the plaintiff had neither the right nor permission to enter India. Subject to that limitation, s 72(4) authorised a maritime officer to detain and take the plaintiff, a person reasonably suspected of having been on the Indian vessel when it was detained under that Act, to a place outside Australia determined by the National Security Committee of Cabinet, and to place the plaintiff in that place if the officer was satisfied, on reasonable grounds, that it would be safe for the plaintiff to be in that place. Otherwise it is not appropriate to answer this question. Did s 72(4) of the Maritime Powers Act authorise a maritime officer to: take the steps set out in paragraph 20 in implementing the decision to take the plaintiff to India; detain the plaintiff for the purposes of taking the plaintiff to India? Answer: (a) No. (b) No. Did the non-statutory executive power of the Commonwealth authorise an officer of the Commonwealth to: take the steps set out in paragraph 20 for the purpose of preventing the plaintiff from entering Australia; detain the plaintiff for the purposes of taking the plaintiff to India? Answer: (a) No. (b) No. 4. Was the power under s 72(4) of the Maritime Powers Act to take the plaintiff to a place outside Australia, being India, subject to an obligation to give the plaintiff an opportunity to be heard about the exercise of that power and, if so, was that obligation breached? Answer: It is not necessary to answer this question. 5. Was any non-statutory executive power of the Commonwealth to take the plaintiff to a place outside Australia, being India, for the purpose of preventing the plaintiff from entering Australia, subject to an obligation to give the plaintiff an opportunity to be heard about the exercise of that power and, if so, was that obligation breached? Answer: It is not necessary to answer this question. 6. Was the detention of the plaintiff unlawful at any, and if so what period, from 1 July 2014 to 27 July 2014 and if so [is he] entitled to claim damages in respect of that detention? Answer: The detention of the plaintiff during some or all of the period from 1 July 2014 to 27 July 2014 was unlawful and the plaintiff is entitled to claim damages in respect of that detention. Both the duration of the unlawful detention and the amount of damages to be allowed for that detention (whether nominal or substantial) should be determined at trial. 7. Who should pay the costs of this Special Case? Answer: The defendants. 8. What if any order should be made to dispose of the proceeding or for the conduct of the balance (if any) of the proceeding? Answer: The matter should be remitted to the Federal Circuit Court of Australia for such further interlocutory steps as that Court considers necessary and thereafter for trial. Crennan CRENNAN J. The plaintiff is a Sri Lankan national of Tamil ethnicity. He was one of 157 people removed from an unseaworthy Indian flagged vessel in Australia's contiguous zone to a Commonwealth ship on 29 June 2014, about 16 nautical miles from Christmas Island. None of the persons on the Indian vessel had a visa entitling him or her to enter Australia. The Indian vessel had been travelling since June 2014 from Pondicherry in India towards Christmas Island. On or about 26 or 27 June 2014, a person on the Indian vessel called the Australian Maritime Safety Authority and requested assistance. On 29 June 2014, the Indian vessel was intercepted by the Commonwealth ship, and all of the persons on the Indian vessel were detained on the Indian vessel. The same day, those persons, including the plaintiff, were removed from the Indian vessel and placed on the Commonwealth ship. Implementing a decision of the National Security Committee of Cabinet made on 1 July 2014, the Commonwealth ship travelled towards India (between 1 July and about 10 July 2014), arrived near India (on about 10 July 2014), and waited near India (between about 10 July and about 22 July 2014). Then, implementing a decision of the Minister for Immigration and Border Protection made on or about 23 July 2014, the Commonwealth ship travelled to the Territory of the Cocos (Keeling) Islands (between 23 July and 27 July 2014). On 27 July 2014, the plaintiff and the other persons from the Indian vessel disembarked the Commonwealth ship at the Territory of the Cocos (Keeling) Islands, and were detained under s 189(3) of the Migration Act 1958 (Cth) ("the Migration Act"). The plaintiff claims to have a well-founded fear of persecution in Sri Lanka, and to be a person in respect of whom Australia owes non-refoulement obligations by reference to the Convention relating to the Status of Refugees (1951) as amended by the Protocol relating to the Status of Refugees (1967) ("the Refugees Convention"), the International Covenant on Civil and Political Rights, and the Convention against Torture and Other Cruel, Inhuman and Degrading Treatment or Punishment (1984). There are no facts in the special case which establish that the plaintiff fears persecution in India or that he fears direct or indirect refoulement to Sri Lanka from India. While the special case is silent about the circumstances in which the plaintiff was in India before setting out for Christmas Island on the Indian vessel, there is no fact in the special case from which it could be inferred that he had no permission to be and remain in India prior to his departure from the Indian port of Pondicherry, or that India was not a safe place for him. As at 1 July 2014, the Australian government had no agreement or arrangement in place with the government of India for the persons from the Indian vessel to be taken to India, and it may be inferred that there was no such agreement as at 23 July 2014. Crennan On 7 July 2014, while the Commonwealth ship was travelling towards India, a person representing a class which included the plaintiff issued a writ of summons and obtained an interim injunction from this Court restraining the Minister and the Commonwealth of Australia ("the defendants"), until 4:00 pm the following day, from removing persons in the class into the custody of the government of Sri Lanka. On 8 July 2014, the Solicitor-General of the Commonwealth gave an undertaking to the Court on behalf of the defendants not to engage in the restrained conduct without giving 72 hours' written notice. In these proceedings, commenced in the original jurisdiction of the High Court, the plaintiff seeks declaratory relief and damages in relation to his detention on the Commonwealth ship between 1 July and 27 July 2014. (The plaintiff does not complain of his detention on the Indian vessel on 29 June 2014 or of his transfer later that day from that vessel to the Commonwealth ship.) Until 29 July 2014 (shortly after the date of the plaintiff's disembarkation at the Territory of the Cocos (Keeling) Islands), the plaintiff also sought injunctive relief, among other things, to restrain the defendants from taking him to Nauru or Papua New Guinea. The defendants did not contest that the plaintiff was detained on the Commonwealth ship between 1 July and 27 July 2014 ("the detention"). The essential question in this proceeding is whether the detention was lawful. The tort of false (ie unlawful) imprisonment is a form of trespass to the person. It is committed when one person subjects another to total deprivation of freedom of movement without lawful justification or consent. If a plaintiff proves that he or she has been imprisoned by a defendant it is for the defendant to prove lawful justification or consent133. The defendants' answer to the plaintiff's case is that the detention was authorised by s 72(4) of the Maritime Powers Act 2013 (Cth) ("the Act"). The special case states six substantive questions for the consideration of this Court directed to the plaintiff's claim that the detention was unlawful and that appropriate false imprisonment. for wrongful detention and includes damages relief Question 6 asks: "Was the detention of the plaintiff unlawful at any, and if so what period, from 1 July 2014 to 27 July 2014 and if so [is the plaintiff] entitled to claim damages in respect of that detention?" 133 See Myer Stores Ltd v Soo [1991] 2 VR 597. See also R v Governor of Brockhill Prison; Ex parte Evans (No 2) [2001] 2 AC 19 at 28 per Lord Steyn. Crennan For the reasons which follow, that question must be answered "No". The Act The Act provides powers ("maritime powers") for use in, and in relation to, maritime areas for the purpose of giving effect to Australian laws and certain international agreements and decisions. An "authorising officer"134 may authorise the exercise of maritime powers in relation to a vessel if the vessel is suspected, on reasonable grounds, of being involved in a contravention of an Australian law135, or for the purposes of administering or ensuring compliance with a monitoring "contravention" of an Australian law includes, but is not limited to, an offence against the law137. law136. Since 1994, unlawful entry to and presence in Australia has not been an offence under the Migration Act138. Section 42(1) of the Migration Act relevantly provides that "a non-citizen must not travel to Australia without a visa that is in effect." It was common ground that the plaintiff would have contravened s 42(1) if he had succeeded in travelling to Australia on the Indian vessel139. The exercise of maritime powers is subject to a number of limits. In general, an authorisation must be given under Div 2 of Pt 2 of the Act before maritime powers may be exercised in relation to a vessel140. Once an 134 See Act, s 16. 135 Act, s 17. 136 Act, s 18. The Migration Act is a "monitoring law": see Act, s 8. 137 Act, s 8. 138 See Al-Kateb v Godwin (2004) 219 CLR 562 at 598 [86] per Gummow J; [2004] HCA 37. 139 If the Indian vessel had entered Australian territorial waters, those operating the vessel (and others associated with the vessel) may have committed an offence against s 229 of the Migration Act (prohibiting the carriage of non-citizens to Australia without documentation) or ss 233A and 233B of the Migration Act (dealing with the offences of people smuggling and aggravated people smuggling). 140 See Act, s 30. An authorising officer authorised the exercise of maritime powers in relation to the Indian vessel on 29 June 2014, on the basis that he suspected, on (Footnote continues on next page) Crennan authorisation is in force, maritime powers may only be exercised for the purposes set out in Div 4 of Pt 2 of the Act141. The exercise of maritime powers is also subject to the geographical limits set out in Div 5 of Pt 2 of the Act. Relevantly, maritime powers may be exercised in relation to a foreign vessel in the contiguous zone only for certain limited purposes142, reflecting the fact that Australia is a signatory to the United Nations Convention on the Law of the Sea It was common ground that the power to determine who may enter Australia and to exclude non-citizens is an incident of a state's sovereignty over territory143. Furthermore, the plaintiff did not contest that he was subject to the defendants' limited authority and control in the contiguous zone. The maritime power at the centre of this proceeding is set out in s 72(4) of the Act. Section 72 is in Div 8 of Pt 3, which deals with "[p]lacing and moving persons". So far as is presently relevant, s 72 provides as follows: "(1) This section applies to a person: on a detained vessel or detained aircraft; or (b) whom a maritime officer reasonably suspects was on a vessel or aircraft when it was detained. (4) A maritime officer may detain the person and take the person, or cause the person to be taken: reasonable grounds, that the vessel was involved in a contravention of the Migration Act. 141 See Act, ss 31 and 32. Relevantly, s 32(1)(a) provides that a maritime officer may exercise maritime powers "to investigate or prevent any contravention of an Australian law that the officer suspects, on reasonable grounds, the vessel ... to be involved in". 142 See Act, s 41(1)(c). Section 41(1)(c)(ii) has the effect that a maritime officer may exercise maritime powers in relation to a foreign vessel in the contiguous zone to prevent a contravention of the Migration Act occurring in Australia. 143 See Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1 at 29-32 per Brennan, Deane and Dawson JJ; [1992] HCA 64. See also Re Woolley; Ex parte Applicants M276/2003 (2004) 225 CLR 1 at 12-13 [18] per Gleeson CJ; [2004] HCA 49. Crennan to a place in the migration zone; or to a place outside the migration zone, including a place outside Australia. For the purposes of taking the person to another place, a maritime officer may within or outside Australia: place the person on a vessel or aircraft; or restrain the person on a vessel or aircraft; or remove the person from a vessel or aircraft." It can be seen that s 72(4)(b) provides for the exercise of a compound power to detain and take to a place outside the migration zone ("the s 72(4)(b) power"). There is no express statutory requirement that a person detained under s 72(4) be taken to a place "as soon as practicable"144. Before turning to consider s 72(4)(b) in more detail, it is worth noting some further provisions relevant to the exercise of the power. Section 74, also in Div 8 of Pt 3, provides that a maritime officer "must not place or keep a person in a place, unless the officer is satisfied, on reasonable grounds, that it is safe for the person to be in that place." Section 95, in Pt 5 of the Act, provides that "[a] person arrested, detained or otherwise held under this Act must be treated with humanity and respect for human dignity, and must not be subject to cruel, inhuman or degrading treatment." Finally, s 97, also in Pt 5 of the Act, provides that: If a person is detained and taken to another place under subsection 72(4) (persons on detained vessels and aircraft), the detention ends at that place. Subsection (1) does not prevent: the person being taken to different places on the way to the other place; or 144 cf Act, s 98 (which imposes such a requirement for a person detained under s 73) and s 101 (which imposes such a requirement for a person arrested under the Act). See also Act, s 96 (which sets out factors which must be taken into account in determining when a maritime officer has done something "as soon as practicable"). Crennan the arrest of the person; or the detention of the person under another Australian law; or the exercise of any other power in relation to the person." The questions The significant question to be determined is whether s 72(4), both as a matter of construction, and for consistency with Ch III of the Constitution, requires that, prior to any exercise of the power to take a person to a place outside the migration zone, there must be an agreement between Australia and another country permitting the person to enter and remain in the place to which the person is to be taken ("a prior agreement") (Question 1(c)). A subsidiary question is whether the s 72(4)(b) power, exercised to take the plaintiff to India, was subject to an obligation to afford the plaintiff procedural fairness, in the form of a hearing, before commencing the journey (Question 4). There were also questions arising from the plaintiff's contentions that the s 72(4)(b) power was subject to limitations to be implied from Australia's non- refoulement obligations under the Refugees Convention (Question 1(a)) and the chain of command applicable to maritime officers (Question 1(b)). An understanding of the arguments concerning the construction of s 72(4)(b) is facilitated by reference to the following passage from the special case: "Between 1 July 2014 and about 23 July 2014, maritime officers on the Commonwealth ship implemented the decision to take the plaintiff and the other persons from the Indian vessel to India by: between 1 July 2014 and about 10 July 2014, causing the Commonwealth ship to travel towards India, and continuing to detain the plaintiff and the other persons from the Indian vessel on the Commonwealth ship during that period; between about 10 July 2014 and about 22 July 2014, after the Commonwealth ship arrived near India, continuing to detain the plaintiff and the other persons from the Indian vessel on the Commonwealth ship while waiting for it to become practicable to complete the taking of those persons to India, the duration of that wait being influenced by the absence of the favourable weather conditions required to make it safe to disembark the persons from the Indian vessel, the time required to conduct diplomatic negotiations between Australia and India (including the time Crennan required to arrange and undertake meetings at a Ministerial level) and, between about 18 July 2014 and 21 July 2014, the travel and other steps required for the re-provisioning of the Commonwealth ship. On or about 23 July 2014, the First Defendant decided that, for operational and other reasons, it would not be practicable to complete the process of taking the plaintiff and the other persons from the Indian vessel to India within a reasonable period of time, and that those persons should be taken to the Territory of the Cocos (Keeling) Islands." Question 1(c): a prior agreement? Section 72(4), expressed language, positively authorises in clear derogation from rights of persons on a detained vessel (including by deprivation of personal liberty)145, so as to prevent a contravention of the Migration Act. The grant of a power to detain and take a person from the contiguous zone to a place outside the migration zone in order to prevent a contravention of the Migration Act includes a power to move a person over the seas to a destination in another country, irrespective of the person's wishes or preferences, provided the person is not subjected to cruel, inhuman or degrading treatment146. It was not contested that a destination chosen for the purposes of s 72(4)(b) may be other than a person's preferred destination or a destination to which he or she would go voluntarily. Some may consider the use of such powers harsh, in circumstances where the plaintiff might have reached Australian territorial waters had the Indian vessel not become unseaworthy, and they may oppose the policy underlying the Act for that reason. When considering provisions in the Migration Act which clearly and unambiguously authorised executive detention of children, Gleeson CJ explained that the role of the Court is not to frustrate such legislation on the basis of opposition to the policy underlying such provisions147. That explanation is apt here. 145 See Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 528-529 per Deane J; [1987] HCA 12; Chu Kheng Lim (1992) 176 CLR 1 at 19 per Brennan, Deane and Dawson JJ. See also Lee v New South Wales Crime Commission (2013) 251 CLR 196 at 307-311 [307]-[314] per Gageler and Keane JJ; [2013] HCA 39. 146 Act, s 95. 147 Re Woolley (2004) 225 CLR 1 at 9 [9]. See also Burton v Honan (1952) 86 CLR 169 at 179 per Dixon CJ; [1952] HCA 30. Crennan In that context, it might be noted that, under the Refugees Convention, refugees are not invariably able to claim protection in their preferred choice of country148. The arguments The plaintiff contended that a power to take a person to a place outside the migration zone necessarily implies that the place chosen as a destination must be a place where the reception of the person will be achieved. This was said to require an agreement to that effect at the time when a decision to take is made under s 72(4)(b). The constitutional principles for which Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs149 stands as authority were also invoked as compelling that interpretation, not least so as to ensure that the plaintiff was not indefinitely detained at the discretion or whim of the Executive. Applying that interpretation of s 72(4)(b), it was submitted that, if there was no agreement between Australia and India as at 1 July 2014, it was never "practicable" to discharge the plaintiff in India. The absence of such an agreement meant that, from 1 July 2014, the detention was not authorised as it was not reasonably capable of being seen as necessary for the purpose of taking the plaintiff to a place outside the migration zone within the meaning of s 72(4)(b). Alternatively, it was submitted that, even if the discharge of the plaintiff in India was practicable at the commencement of the journey to India on 1 July 2014, that discharge and reception subsequently became impracticable. The defendants relied on the clear language of s 72(4)(b). They contended that, provided the s 72(4)(b) power is exercised within a reasonable time150 and in accordance with the express requirements in the Act, detention for the purpose of preventing the entry into Australia of a person who has no right to enter Australia is not incompatible with Ch III. The defendants contended that neither s 72(4)(b) nor Ch III of the Constitution requires that the decision to take a person to a place, and an ability to discharge the person at that place, coincide in time. It was submitted that a place to which a person is to be taken may change if, having 148 See Hathaway, The Rights of Refugees Under International Law, (2005) at 161, 332-333. See also Lauterpacht and Bethlehem, "The scope and content of the principle of non-refoulement: Opinion", in Feller, TΓΌrk and Nicholson (eds), Refugee Protection in International Law: UNHCR's Global Consultations on International Protection, (2003) 87 at 110-111, 122 and 159-160. 149 (1992) 176 CLR 1. 150 See Koon Wing Lau v Calwell (1949) 80 CLR 533 at 573-574 per Dixon J, 590 per Williams J; [1949] HCA 65. See also Folkard v Metropolitan Railway Co (1873) LR 8 CP 470. Crennan arrived near the chosen place, it would not be practicable to complete taking the person to that place within a reasonable time. The word "practicable" was used in the paragraphs of the special case extracted above and by all parties in their arguments to mean "capable of achievement". A textual limitation? The general question of construction to which the statutory language gives rise is: to which places (within power) can a person be taken? The power to detain and take is clearly expressed, but the statutory phrase "a place outside the migration zone" is a description of wide application. Reference has already been made to a number of limitations on the s 72(4)(b) power, both express (the need for an authorisation151, the requirement to exercise the power for a particular purpose152, geographical limitations153, the requirement that a person not be placed in a place which is not safe154, and the need for treatment consonant with human dignity155) and implied (the need to exercise the power within a reasonable time156). To these can be added the need to exercise the power in good faith157. These limitations make it plain that the defendants are not empowered to take someone in the plaintiff's position to any place on the earth's surface. 151 Act, s 30. 152 Act, Div 4 of Pt 2. 153 Act, Div 5 of Pt 2. 154 Act, s 74. 155 Act, s 95. 156 See Koon Wing Lau v Calwell (1949) 80 CLR 533 at 573-574 per Dixon J, 590 per 157 See Water Conservation and Irrigation Commission (NSW) v Browning (1947) 74 CLR 492 at 505 per Dixon J; [1947] HCA 21; K-Generation Pty Ltd v Liquor Licensing Court (2009) 237 CLR 501 at 523 [59] per French CJ; [2009] HCA 4; Plaintiff M70/2011 v Minister for Immigration and Citizenship (2011) 244 CLR 144 at 180 [59] per French CJ, 194 [109] per Gummow, Hayne, Crennan and Bell JJ; [2011] HCA 32. See also Bingham, The Rule of Law, (2010) at 62. Crennan There are also practical limitations. The exercise of a power to take a person to a place outside the migration zone may be affected by weather conditions and dangerous seas; fuel, provisioning and safe navigation will all be critical considerations. As noted in the second reading speech for the Maritime Powers Bill 2012158: "Enforcement operations in maritime areas frequently occur in remote locations, isolated from the support normally available to land-based operations and constrained by the practicalities involved in sea-based work. The unique aspects of the maritime environment merit a tailored approach to maritime powers, helping to ensure flexibility in their exercise and to assist maritime officers to deal with quickly changing circumstances and often difficult and dangerous situations." Further, if a taking under s 72(4)(b) involves taking to a country which is not a person's country of nationality, an exercise of the power cannot be completed without cooperation between Australia and the relevant country. That cooperation cannot be compelled. Even taking a person to his or her country of nationality (at his or her request) assumes that the country of nationality can be expected to honour its international responsibilities (an assumption which appears to have been made in Chu Kheng Lim159). It can be accepted that a prior agreement permitting disembarkation of a person at a place outside the migration zone (other than his or her country of nationality) may the prospect of a successful disembarkation. However, contingencies such as natural disasters or the revocation of a prior agreement may confound assumptions made at the commencement of a journey and render the taking of a person to a place (in train, and once practicable) incapable of achievement. render more probable Such considerations suggest that, although a prior agreement may be a desirable and sufficient condition for commencing a coercive journey to a place outside the migration zone, the existence of a right or a permission to disembark at the commencement of a journey cannot be determinative of the lawfulness of any detention for that purpose. A right can be denied, a permission revoked or 158 Australia, House of Representatives, Parliamentary Debates (Hansard), 30 May 159 See Al-Kateb (2004) 219 CLR 562 at 604 [109] per Gummow J. Crennan natural events intervene, having the effect that a permission will not necessarily coincide with the arrival of a detained person. Section 72(4)(b) permits a maritime officer to take a person to a place outside the migration zone in order to prevent a contravention of the Migration Act, if it is practicable to disembark the person at that place, within a reasonable time. The section contains no requirement that there be any degree of certitude of disembarkation beyond practicability within a reasonable time. That construction has the support of authorities to which both parties made reference160. A statutory purpose of taking a person to a place outside the migration zone in order to prevent a contravention of the Migration Act is a statutory purpose which is relevantly indistinguishable from a statutory purpose of removing from Australia a person detained in custody as an unlawful non-citizen. The limitation on an express power to detain to achieve either of those statutory purposes is "practicability". Only once it is clear that a taking (or removing) has become incapable of achievement is the power to detain for that purpose exhausted. The plaintiff's construction of s 72(4) advances "certainty" rather than "practicability" as the criterion of the lawfulness of the detention. That approach does not reflect the statutory language. It is not congruent with the maritime conditions in which decisions under s 72(4) must be made. Further, it constrains the scope of "place" in s 72(4)(b) in a way that has the potential to frustrate, rather than advance, the objects and purposes of the Act. It can be accepted that it might be beyond power (including for want of good faith) to commence a journey to a place if the facts and circumstances are that there is no prospect of successful disembarkation. But that is not this case. The choice of India as a place to take the plaintiff was rational. He had connections with India: he was there before he left, there are no facts in the special case which indicate that it was not a safe place for him, and the vessel on which he travelled from India was an Indian flagged vessel. There is no fact in the special case which indicates that the s 72(4)(b) power was exercised in bad faith or that the period from 1 July to 27 July 2014 was not a reasonable time within which to take the plaintiff to an initial chosen destination of India (s 72(4)(b)) and a subsequent chosen destination of Australia (s 72(4)(a)). 160 Plaintiff M47/2012 v Director-General of Security (2012) 251 CLR 1; [2012] HCA 46; Plaintiff M76/2013 v Minister for Immigration, Multicultural Affairs and Citizenship (2013) 251 CLR 322; [2013] HCA 53. Crennan In the light of that construction of s 72(4), the detention of the plaintiff was lawful. Between 1 July and 23 July 2014, during which time diplomatic negotiations occurred, the plaintiff's disembarkation in India was practicable, and was authorised by s 72(4)(b). Once it became evident that the plaintiff's disembarkation could not be achieved, the plaintiff's continued detention between 23 July and 27 July 2014 was for the purpose of taking him to the Territory of the Cocos (Keeling) Islands, and was authorised by s 72(4)(a). There is one further observation that can be made. Australia is a signatory to the International Convention on Maritime Search and Rescue (1979) ("the SAR Convention"), which obliges states to coordinate and cooperate to ensure that "survivors assisted are disembarked from the assisting ship and delivered to a place of safety"161. The responsibility to disembark rescued persons and deliver them to "a place of safety" must be discharged "as soon as reasonably practicable"162. There is inherent tension between the obligations of Australian authorities (whether under the SAR Convention or otherwise) to assist persons in the contiguous zone on unseaworthy vessels in conditions of distress and danger, the federal legislature's object of preventing contraventions of the Migration Act in the contiguous zone, and the preference of persons like the plaintiff to access non-refoulement obligations under the Refugees Convention in Australia rather than in another country. That inherent tension is not unlike the inherent tension in the Refugees Convention between humanitarian concerns for the individual and that aspect of state sovereignty concerned with the exclusion of entry by non- citizens163. An interpretation of s 72(4)(b) which has the potential to impose conflicting duties and obligations on maritime officers who transfer persons from an unseaworthy vessel (which could be found, as a fact, to be a rescue), and who exercise simultaneously or almost simultaneously the maritime powers under consideration, risks creating an incoherence in the law, not unlike the incoherence deprecated by this Court in Sullivan v Moody164. 161 SAR Convention, Annex, par 3.1.9. 162 SAR Convention, Annex, par 3.1.9. 163 See Applicant A v Minister for Immigration and Ethnic Affairs (1997) 190 CLR 225 at 273-274 per Gummow J; [1997] HCA 4. 164 (2001) 207 CLR 562 at 579-580 [50]-[53]; [2001] HCA 59. Crennan A constitutional limitation? The constitutional principles for which Chu Kheng Lim stands are part of the backdrop to the task of statutory construction, and the reasoning in Chu Kheng Lim was given a good deal of attention in argument. However, there is nothing in the constitutional principles for which Chu Kheng Lim stands which compels acceptance of the plaintiff's construction of s 72(4)(b), namely that a taking under s 72(4)(b) is beyond power unless, before it commences, there is an agreement between Australia and another country permitting the person (detained in the defendants' custody and taken to that country) to be disembarked in that other country. A convenient starting point is what was said of Chu Kheng Lim in Plaintiff M76/2013 v Minister for Immigration, Multicultural Affairs and Citizenship, in the joint judgment of Crennan, Bell and Gageler JJ165: "The constitutional holding in Lim was that ... laws authorising or requiring the detention in custody by the executive of non-citizens, being laws with respect to aliens within s 51(xix) of the Constitution, will not contravene Ch III of the Constitution, and will therefore be valid, only if: 'the detention which they require and authorise is limited to what is reasonably capable of being seen as necessary for the purposes of deportation or necessary to enable an application for an entry permit to be made and considered.' The necessity referred to in that holding in Lim is not that detention itself be necessary for the purposes of the identified administrative processes but that the period of detention be limited to the time necessarily taken in administrative processes directed to the limited purposes identified. The temporal limits and the limited purposes are connected such that the power to detain is not unconstrained ... A non- citizen can therefore invoke the original jurisdiction of the Court under s 75(iii) and (v) of the Constitution in respect of any detention if and when that detention becomes unlawful. What begins as lawful custody under a valid statutory provision can cease to be so." (emphasis in original; footnotes omitted) Following Chu Kheng Lim, the connection between the temporal limits and the limited purposes of executive detention of persons who are non-citizens 165 (2013) 251 CLR 322 at 369-370 [138]-[139]. Crennan has been affirmed by this Court on many occasions where the achievement of a statutory obligation has been conditioned on temporal limits166. What those authorities show is that the temporal limits of executive detention of a non-citizen connected to the achievement of limited statutory purposes are not necessarily capable of arithmetical calculation because the achievement of a statutory purpose (for example, removal from Australia) may require internal administrative processes, which necessarily take time. In the different statutory context of the Act, diplomatic negotiations seem no different. What those authorities also demonstrate is that a circumstance of that kind poses no difficulties. This Court is well-equipped to assess whether it can be concluded that the achievement of a statutory purpose is a practical possibility or not, and is accustomed to doing so167. For those reasons, the plaintiff's interpretation of s 72(4)(b) is not necessary to ensure respect for the plaintiff's personal liberty or to avoid indefinite detention or detention at the discretion or whim of the Executive government. Question 1(a): risk of refoulement The Refugees Convention is a part of the context of the Act, considered widely168. If the s 72(4)(b) power had been invoked to return the plaintiff to Sri Lanka or to take the plaintiff to a place outside the migration zone which was not safe, questions might have arisen about an interpretation of s 72(4)(b) consistent with Australia's obligations under the Refugees Convention169. However, no such issues arose on the facts in the special case. Following established practice, no decision should be made in the absence of a state of facts requiring a decision in order to do justice in the case or to determine the rights of the parties170. 166 See, for example, Plaintiff M47 (2012) 251 CLR 1; Plaintiff M76 (2013) 251 CLR 322; Plaintiff S4/2014 v Minister for Immigration and Border Protection (2014) 88 ALJR 847; 312 ALR 537; [2014] HCA 34. See also Al-Kateb (2004) 219 CLR 562 at 572-573 [3], 579 [25] per Gleeson CJ, 606 [115], 607 [117] per Gummow J. 167 See Plaintiff M47 (2012) 251 CLR 1; Plaintiff M76 (2013) 251 CLR 322. 168 See CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408 per Brennan CJ, Dawson, Toohey and Gummow JJ; [1997] HCA 2. 169 Refugees Convention, Art 33(1). See also Hathaway, The Rights of Refugees Under International Law, (2005) at 161, 333. 170 See Plaintiff M76 (2013) 251 CLR 322 at 344 [31] per French CJ, 372 [148] per Crennan, Bell and Gageler JJ. Crennan Question 1(b): chain of command The relevant facts, relevant provisions of the Act and related legislation, and submissions concerning Question 1(b), are set out in the reasons of others, and are not repeated here save as necessary to explain these reasons. As a member of an organisation specified in s 104 of the Act, a maritime officer is subject to the command of his or her superiors within that organisation's hierarchical structure. Each organisation (which includes its members) is subject ultimately to the control of the Executive government. As mentioned above, a decision to take a person over the seas from the contiguous zone to a place outside the migration zone is a decision which will usually require cooperation between Australia and relevant authorities in another country, which cooperation cannot be compelled. The nature of the decision to exercise the s 72(4)(b) power shows it to be a decision which a maritime officer plainly would not be able to make. For that reason alone, the implied limitation which the plaintiff seeks to read into s 72(4)(b) (that the maritime officer must make the decision) must be rejected. The nature of the decision to exercise the s 72(4)(b) power can be compared with the nature of a decision under s 74 of the Act, as to whether a place is "safe". It may be appropriate for a maritime officer to make a decision under s 74, with or without the assistance of his or her superiors in the command structure of his or her organisation, because plainly the maritime officer may be most immediately and best placed to make that decision. The circumstances here, that the National Security Committee of Cabinet decided that persons (including the plaintiff) from the Indian vessel should be taken to India and that maritime officers on the Commonwealth ship acted to implement that decision from 1 July to 23 July 2014, do not invalidate the exercise of the s 72(4)(b) power undertaken in respect of the plaintiff. Question 4: procedural fairness Question 4 asks whether the exercise of the s 72(4)(b) power was subject to an obligation to give the plaintiff an opportunity to be heard. Requirements of procedural fairness depend critically upon the terms of the legislation under consideration, especially as it affects a person's rights, interests or expectations, and the facts and circumstances of the particular case. What has been said in these reasons concerning the chain of command is also relevant to this branch of the plaintiff's argument. Having noted that, I agree with the reasons of Gageler J for answering "No" to Question 4, and have nothing to add. Crennan Other questions These reasons support the conclusion that the detention of the plaintiff was authorised under s 72(4) of the Act and was lawful. That makes it unnecessary to consider the alternative source of lawful support for the detention of the plaintiff, s 61 of the Constitution, rendering it unnecessary to answer Questions 3 and 5. Questions and answers The questions stated for the opinion of the Court should be answered as follows: Did s 72(4) of the Maritime Powers Act authorise a maritime officer to detain the plaintiff for the purpose of taking him, or causing him to be taken, to a place outside Australia, being India: (a) whether or not the plaintiff would be entitled by the law applicable in India to the benefit of the non-refoulement obligations; implementation of a decision by the Australian Government that the plaintiff (and others on the Indian vessel) should be taken to India without independent consideration by the maritime officer of whether that should be so; and (c) whether or not, prior to the commencement of the taking of the plaintiff to India, an agreement or arrangement existed between Australia and India concerning the reception of the plaintiff in India? Answer: This question does not arise on the facts agreed in the special case. (b) Yes. (c) Yes. Did s 72(4) of the Maritime Powers Act authorise a maritime officer to: take the steps set out in paragraph 20 in implementing the decision to take the plaintiff to India; Crennan detain the plaintiff for the purposes of taking the plaintiff to India? Answer: (a) Yes. (b) Yes. Did the non-statutory executive power of the Commonwealth authorise an officer of the Commonwealth to: take the steps set out in paragraph 20 for the purpose of preventing the plaintiff from entering Australia; detain the plaintiff for the purposes of taking the plaintiff to India? Answer: It is not necessary to answer this question. 4. Was the power under s 72(4) of the Maritime Powers Act to take the plaintiff to a place outside Australia, being India, subject to an obligation to give the plaintiff an opportunity to be heard about the exercise of that power and, if so, was that obligation breached? Answer: 5. Was any non-statutory executive power of the Commonwealth to take the plaintiff to a place outside Australia, being India, for the purpose of preventing the plaintiff from entering Australia, subject to an obligation to give the plaintiff an opportunity to be heard about the exercise of that power and, if so, was that obligation breached? Answer: It is not necessary to answer this question. 6. Was the detention of the plaintiff unlawful at any, and if so what period, from 1 July 2014 to 27 July 2014 and if so [is the plaintiff] entitled to claim damages in respect of that detention? Answer: 7. Who should pay the costs of this special case? Answer: The plaintiff. Crennan 8. What if any order should be made to dispose of the proceeding or for the conduct of the balance (if any) of the proceeding? Answer: The proceeding should be dismissed with consequential orders to be determined by a single Justice of this Court. 230 KIEFEL J. The plaintiff is a person of Tamil ethnicity and Sri Lankan nationality. In June 2014 he left India on an Indian-flagged sea vessel ("the Indian vessel") which had 157 people on board. Its destination was Christmas Island. None of the persons on board held a visa which would permit them to enter Australia. On or about 26 or 27 June 2014 a person on the Indian vessel contacted the Australian Maritime Safety Authority and requested assistance. The Indian vessel was subsequently intercepted by an Australian Customs vessel ("the Australian vessel") approximately 16 nautical miles from Christmas Island, in the contiguous zone which lies outside Australia's territorial sea. Customs officers from the Australian vessel boarded the Indian vessel and detained the persons on board it. These actions were authorised by the person in command of the Australian vessel. At some point thereafter, the engine of the Indian vessel seized and then caught fire, causing irreparable damage to the engine. As a result, the Indian vessel became unseaworthy. The plaintiff and the other persons were removed to the Australian vessel. On 1 July 2014 the National Security Committee of Cabinet of the Australian Government ("the NSC") decided that the persons from the Indian vessel should be taken to India. The decision was an implementation of Government policy that persons who are not Australian citizens and who seek to enter Australia by boat without a visa will be intercepted and removed from Australian waters. At that time the Australian Government had no agreement or arrangement in place with the Government of India which would permit the disembarkation of the persons from the Indian vessel in India. Between 1 and about 10 July 2014 the Australian vessel travelled towards India with the plaintiff and the other persons detained on board. Between about 10 and about 22 July 2014, after the Australian vessel arrived near India (but presumably not in its territorial waters), the plaintiff and the others continued to be detained whilst the successful conclusion of diplomatic negotiations between Australia and India, necessary to allow disembarkation to occur, and favourable weather conditions, were awaited. On or about 23 July 2014 the first defendant, the Minister for Immigration and Border Protection, determined that, for "operational and other reasons", it would not be practicable to complete the process of taking the plaintiff and the other persons to India within a reasonable amount of time and that they should instead be taken to the Territory of the Cocos (Keeling) Islands, which is within Australia's migration zone. On 27 July 2014 the plaintiff and the other persons arrived in that place, and were there detained pursuant to s 189(3) of the Migration Act 1958 (Cth). The plaintiff claims that he is a refugee within the meaning of the Refugees Convention171 in that he claims to have a well-founded fear of persecution in Sri Lanka. Whilst on board the Australian vessel he was asked questions concerning his personal and biographical details, but was not asked questions as to why he left Sri Lanka or India and whether he claimed to be a person in respect of whom Australia might owe non-refoulement obligations. He was not given an opportunity to comment upon where he might be taken. Whilst on board the Australian vessel, the plaintiff was permitted to speak to lawyers in Australia, which he did through interpreters. Proceedings were brought on his behalf in the original jurisdiction of this Court against the Minister and the Commonwealth ("the Commonwealth defendants"). It is not necessary to detail the claims initially made or the history of the proceedings. It is sufficient to observe that at an early directions hearing in this matter, which took place whilst the plaintiff was on board the Australian vessel travelling to a destination then unknown to the plaintiff and his legal advisors, an undertaking was given by the Commonwealth defendants not to surrender or deliver the plaintiff and the others into the custody of the Government of Sri Lanka, without prior notice. The plaintiff later amended his claim to seek a declaration that his detention on board the Australian vessel, between the time the Australian vessel left the contiguous zone, or shortly thereafter, and the time he was brought to Australia, was unlawful and to seek damages for wrongful detention and imprisonment. The Questions Stated The parties subsequently stated questions for the opinion of the Full Court of this Court as follows: "(1) Did s 72(4) of the Maritime Powers Act authorise a maritime officer to detain the plaintiff for the purpose of taking him, or causing him to be taken, to a place outside Australia, being India: (a) whether or not the plaintiff would be entitled by the law applicable in India to the benefit of the non-refoulement obligations; implementation of a decision by the Australian Government that the plaintiff (and others on the Indian vessel) should be taken to India without independent 171 Convention relating to the Status of Refugees (1951) as amended by the Protocol relating to the Status of Refugees (1967). consideration by the maritime officer of whether that should be so; and (c) whether or not, prior to the commencement of the taking of the plaintiff to India, an agreement or arrangement existed between Australia and India concerning the reception of the plaintiff in India? (2) Did s 72(4) of the Maritime Powers Act authorise a maritime officer to: take the steps set out in paragraph 20 in implementing the decision to take the plaintiff to India; detain the plaintiff for the purposes of taking the plaintiff to India? (3) Did the non-statutory executive power of the Commonwealth authorise an officer of the Commonwealth to: take the steps set out in paragraph 20 for the purpose of preventing the plaintiff from entering Australia; detain the plaintiff for the purposes of taking the plaintiff to India? (4) Was the power under s 72(4) of the Maritime Powers Act to take the plaintiff to a place outside Australia, being India, subject to an obligation to give the plaintiff an opportunity to be heard about the exercise of that power and, if so, was that obligation breached? (5) Was any non-statutory executive power of the Commonwealth to take the plaintiff to a place outside Australia, being India, for the purpose of preventing the plaintiff from entering Australia, subject to an obligation to give the plaintiff an opportunity to be heard about the exercise of that power and, if so, was that obligation breached? (6) Was the detention of the plaintiff unlawful at any, and if so what period, from 1 July 2014 to 27 July 2014 and if so are they [sic] entitled to claim damages in respect of that detention? (7) Who should pay the costs of this special case? (8) What if any order should be made to dispose of the proceeding or for the conduct of the balance (if any) of the proceeding?" Paragraph 20 of the Special Case, to which reference is made in the Questions Stated, outlines the steps taken between 1 and 23 July 2014 to implement the decision to take the plaintiff and the other persons to India. The issue for this Court is whether the detention of the plaintiff was justified. If the answer to the first part of Question (6) is that the plaintiff's detention in the relevant period was unlawful, the question of the plaintiff's entitlement to damages falls to be determined. As the Questions Stated disclose, the Commonwealth defendants rely upon two, alternative, sources of lawful authorisation: the Maritime Powers Act 2013 (Cth) ("the MP Act") and a non-statutory Commonwealth executive power which is said to exist in addition to the powers given by the MP Act. Questions (1), (2) and (4) are directed to the exercise of power under s 72(4), which appears in Pt 3 of the MP Act. Part 3 deals with maritime powers. Section 72(4) applies to a person on a detained vessel172 and provides that: "A maritime officer may detain the person and take the person, or cause the person to be taken: to a place in the migration zone; or to a place outside the migration zone, including a place outside Australia." Question (2) is framed generally and may be understood to permit statements of conclusion, drawn from the answers to Question (1), and in particular as to whether s 72(4) authorised the plaintiff's detention. Questions (1) and (4) concern whether the power given by s 72(4) required, for its valid exercise, that certain conditions be met: that a maritime officer personally make the decision as to where the plaintiff is to be taken and make it independently of others, including the NSC; that the plaintiff be entitled to the benefit of non-refoulement obligations in that country; that, before the decision is made, the plaintiff be given an opportunity to comment on the exercise of the power; and that the country of destination chosen be one with which Australia has an existing arrangement or agreement which would enable him to be disembarked in that country. Questions (3) and (5) are directed to a non-statutory power of the Executive Government. Those questions ask whether such a power authorised the detention of the plaintiff for the purposes of taking him to India and whether 172 Maritime Powers Act 2013 (Cth), s 72(1). it was subject to an obligation to afford the plaintiff an opportunity to comment on the exercise of the power. Shortly stated, the non-statutory Commonwealth executive power is said by the Commonwealth defendants to be the power to exclude or expel an alien, which would require an associated power of detention. The power in question is said to reside in s 61 of the Constitution, the scope of which is informed by the prerogative rights of the Crown. This non-statutory executive power is claimed to exist even though the MP Act contains similar powers and, as will be seen, provides for the conditions of their exercise in some detail. The MP Act The Guide to the MP Act173 states that the Act provides a broad set of enforcement powers for use in, and in relation to, maritime areas. What constitutes a maritime area is not defined. The MP Act applies to a vessel, installation, aircraft or protected land and to a person who is on, or in the vicinity of, one of these things. In the balance of these reasons reference will be limited to the MP Act's application to vessels and persons on them. The maritime powers, which are set out in Pt 3, may be exercised by maritime officers, who are defined as members of the Australian Defence Force ("the ADF") and the Australian Federal Police, and officers of Customs174. Additionally, the Minister may appoint a maritime officer175. Whilst the exercise of maritime powers is not limited to Australian waters, it is acknowledged176 that, "[i]n accordance with international law, the exercise of powers is limited in places outside Australia." Section 40 provides that the MP Act does not authorise the exercise of maritime powers at a place in another country unless one of a number of conditions is met. One of the conditions is that the powers are exercised at the request of or with the agreement of the other country177. In relation to a foreign vessel that is outside Australia's territorial sea, such as the Indian vessel, maritime powers may only be exercised in the circumstances 173 Maritime Powers Act 2013, s 7. 174 Maritime Powers Act 2013, s 104(1). 175 Maritime Powers Act 2013, s 104(1)(d). 176 Maritime Powers Act 2013, s 7. 177 Maritime Powers Act 2013, s 40(a). provided by s 41(1) of the MP Act. Section 41(1)(c)(ii) provides that maritime powers may be exercised in the contiguous zone of Australia to prevent a contravention of certain laws occurring in Australia. ("Contiguous zone" bears the same meaning178 as in the United Nations Convention on the Law of the Sea (1982).) The detention of the Indian vessel occurred in that zone. However, once the persons on board that vessel were transferred to the Australian vessel, the limitation in s 41(1) no longer applied. The exercise of maritime powers with respect to vessels requires authorisation. If an "authorising officer" suspects, on reasonable grounds, that a vessel is involved in a contravention of an Australian law, the officer may authorise the exercise of maritime powers in relation to that vessel179. An "authorising officer" is defined by s 16(1): "For the purposes of authorising the exercise of maritime powers in relation to a vessel, installation, aircraft, protected land area or isolated person, each of the following is an authorising officer: the most senior maritime officer who is in a position to exercise any of the maritime powers in person; the most senior member or special member of the Australian Federal Police who is in a position to exercise any of the maritime powers in person; the most senior maritime officer on duty in a duly established operations room; in command of a Commonwealth ship or the person Commonwealth aircraft from which the exercise of powers is to be directed or coordinated; a person appointed in writing by the Minister." In the present case the authorising officer was the person in command of the Australian vessel. It is accepted that the authorising officer had reasonable grounds to suspect that the Indian vessel "was involved in a contravention" of the Migration Act180. The purposes for which maritime powers may be exercised 178 Maritime Powers Act 2013, s 8. 179 Maritime Powers Act 2013, s 17(1). 180 Section 233A of the Migration Act 1958 (Cth) creates an offence of people smuggling. include the investigation of contraventions of Australian law and, relevantly, the prevention of contraventions181. Other purposes for which maritime powers may be exercised include182 the administration of, and ensuring compliance with, a "monitoring law", which is defined to include183 the Migration Act, the Customs Act 1901 (Cth), the Fisheries Management Act 1991 (Cth), the Torres Strait Fisheries Act 1984 (Cth) and certain provisions of the Criminal Code (Cth). Additional powers are given by reference to international agreements184 which provide for the exercise by Australia of powers in relation to vessels, where the powers are prescribed by regulation and are exercised for the purposes of administering, ensuring compliance with or investigating a contravention of the agreement. Maritime powers may be exercised on, or in any part of, a vessel; in relation to any person or thing on, or in the vicinity of, the vessel; or with respect to any person who a maritime officer suspects was on or is intending to go on the vessel; or with respect to things which the maritime officer suspects were to be taken on board185. Such force may be used in the exercise of the powers against a person or thing as is necessary and reasonable in the circumstances186. However, a maritime officer must not subject a person to any greater indignity than is necessary and reasonable, or do anything likely to cause death or grievous bodily harm, save in the limited circumstances which are specified187. The maritime powers provided for in Pt 3 include powers of boarding and entry188, and the power to require a vessel to stop or to manoeuvre189, and to chase a vessel190. Section 69 provides that a maritime officer may detain a vessel 181 Maritime Powers Act 2013, s 32(1)(a). 182 Maritime Powers Act 2013, ss 31, 32. 183 Maritime Powers Act 2013, s 8. 184 Maritime Powers Act 2013, s 33. 185 Maritime Powers Act 2013, s 34. 186 Maritime Powers Act 2013, s 37(1). 187 Maritime Powers Act 2013, s 37(2). 188 Maritime Powers Act 2013, ss 52, 53. 189 Maritime Powers Act 2013, s 54(1)(a). 190 Maritime Powers Act 2013, s 54(3)(a). and take it to a port or other place, even if it is necessary to travel outside Australia to reach that port or that place. Section 71 provides that a maritime officer exercising powers in relation to a vessel may place or keep a person in a particular place on the vessel. Because the Indian vessel was detained by maritime officers in order to prevent a contravention of Australian law, s 72 applied to the plaintiff as a person on a detained vessel191. A maritime officer may return such a person to the vessel192 or require the person to remain on it193. Those options were not available in this case. Section 72(4) is set out above and provides that a maritime officer may detain the person and take the person to a place in the migration zone or a place outside that zone and outside Australia. For the purpose of taking the person to another place, s 72(5) provides that a maritime officer may place the person on a vessel, restrain the person on a vessel or remove the person from a vessel. Section 74 provides that a maritime officer must not place or keep a person in a place, unless the officer is satisfied, on reasonable grounds, that it is safe for the person to be in that place. If a person is detained and taken to another place under s 72(4), s 97(1) provides that the detention ends at that place. A non-statutory power of the Executive Government? The Commonwealth defendants contend for the existence of a power for the expulsion and associated detention of an alien, which inheres in the Executive Government and does not require statutory authority. Such a power would not be subject to the conditions for the exercise of the s 72(4) power. Indeed, the Commonwealth defendants contend that the only limit upon the Commonwealth executive power is that of reasonable necessity arising from s 61 of the Constitution. identified as As mentioned above, s 61 the Commonwealth executive power. It has been observed on many occasions that the terms of s 61 do not offer much assistance in resolving questions as to the scope of executive power. The Commonwealth defendants say that the scope of this power is informed by the prerogative powers of the Crown. The power contended for is characterised by the Commonwealth defendants as the power to exclude and expel an alien from Australia's territory and return the alien to the the source of 191 Maritime Powers Act 2013, s 72(1)(a). 192 Maritime Powers Act 2013, s 72(2). 193 Maritime Powers Act 2013, s 72(3). country from which the alien entered. The power to expel is said to carry with it the power to do all things necessary to make the exercise of the power effective, including restraining the person outside Australia's territory. As will be discussed, the executive power to which the Commonwealth defendants refer is one which resides in every nation State, as an aspect of its sovereignty. That being the case, it should not be confused with what has sometimes been described as the nationhood power, which arises under the Constitution and has been held capable of responding to events such as a national emergency194. This case does not involve such a power, nor those powers relevant to conditions of war or the protection of Australia as a nation. The Commonwealth executive power for which the Commonwealth defendants contend is said to be that discussed by the Privy Council in Attorney- General for Canada v Cain195. The Commonwealth defendants rely upon the following statement by Lord Atkinson in Cain196, and upon its acceptance by this Court, as supporting the existence of the power contended for: "One of the rights possessed by the supreme power in every State is the right to refuse to permit an alien to enter that State, to annex what conditions it pleases to the permission to enter it, and to expel or deport from the State, at pleasure, even a friendly alien". So much was apparently conceded in Cain. It necessarily followed, his Lordship said: "that the State has the power to do those things which must be done in the very act of expulsion, if the right to expel is to be exercised effectively at all". The right therefore necessarily carried with it the right to detain, even on the high seas. These statements need to be understood in the context of the issue in Cain. What was said in that case has little relevance to this matter. The issue in Cain was whether the "Alien Labour Act"197, which provided that the Attorney- General of Canada could take an illegal immigrant into custody and return him to 194 Pape v Federal Commissioner of Taxation (2009) 238 CLR 1; [2009] HCA 23. 196 [1906] AC 542 at 546. 197 Dominion statute 60 & 61 Vict, c 11, as amended by 1 Edw 7, c 13, s 13. the country from which he came, was ultra vires the Dominion Parliament. The essential question was whether the delegation of the British Crown's powers to the Dominion Parliament by Imperial statute was sufficient authority for extra- territorial action. Lord Atkinson reasoned that the Crown of Great Britain became possessed of all executive and legislative powers within Canada and its dependencies when the country was ceded to Great Britain in 1763. The supreme power in every State includes the right to expel aliens and that right necessarily carries with it the right to detain an alien outside the State's territories in order to effect expulsion. The Imperial Parliament had delegated those powers to the Dominion Parliament by statute. The Dominion Parliament was therefore clothed with all the necessary authority and the challenged provision of the Alien Labour Act was valid. Lord Atkinson was speaking of a sovereign right of a nation State, which is recognised by international law. This is what was conceded in that case. It was in this sense that Griffith CJ, in Robtelmes v Brenan198, referred to Cain. His Honour also referred199 to the statement in Nishimura Ekiu v United States200, that "[i]t is an accepted maxim of international law, that every sovereign nation has the power, as inherent in sovereignty β¦ to forbid the entrance of foreigners". In Chu Kheng Lim v Minister for Immigration201, it was observed, by reference to the first passage from Cain set out above, that "[t]he power to exclude or expel even a friendly alien is recognized by international law as an incident of sovereignty over territory." The judgment in Cain says nothing about the distribution of powers as between the arms of the Dominion Government. It says nothing about whether the Executive of the Dominion Government could exercise the power of detention and expulsion without statutory authority. There was no suggestion in Cain that the Alien Labour Act was unnecessary. In so far as Lord Atkinson may be taken to have assumed that the prerogative to expel, deport and detain existed at the time of the decision in Cain, or that the Executive Government of the United Kingdom exercised it, there is a good body of case law and writings which suggests to the contrary, as the 198 (1906) 4 CLR 395 at 400, 404-405; [1906] HCA 58; see also Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1 at 29-30; [1992] HCA 64. 199 Robtelmes v Brenan (1906) 4 CLR 395 at 402. 200 142 US 651 at 659 (1892). 201 (1992) 176 CLR 1 at 29-30. detailed analysis undertaken by Black CJ in Ruddock v Vadarlis202 demonstrates. Two decisions of Australian courts in 1888, to which his Honour refers, are particularly noteworthy. In Ex parte Lo Pak203, Darley CJ of the Supreme Court of New South Wales said that: "It may be that the Sovereign of England may have such power according to the principles laid down by writers on international law, but so far as I can understand, it has not been a power that has ever been exercised in England. On the contrary, even in times of war, where it has been necessary to exclude aliens from the realm, or to deal with aliens then present within the realm, it has been considered necessary to pass a statute for the express purpose of enabling that to be done." In Toy v Musgrove204, Holroyd J of the Supreme Court of Victoria pointed out that there is evidence of a practice of the Crown in this area before the end of the 16th century, but went on to say: "for nearly three centuries no British Sovereign has attempted to exercise the right of expelling aliens or of preventing their intrusion in time of peace by virtue of his prerogative; and no British Minister, not even the strongest advocate in theory for the plenitude of the Royal authority, has ventured in this matter to reduce his theory into practice." Other texts and dicta referred to by Black CJ in Ruddock v Vadarlis are to similar effect. In Robtelmes, Griffith CJ said that he did not understand the power of expulsion of which Cain spoke, in the context of nations, to be denied by "eminent statesmen and lawyers". What was denied, his Honour said, was "the right or power of the Executive Government, in the absence of any legislative provision, to exercise what was called the prerogative right of the Crown for that purpose."205 His Honour later added206: "I doubt whether the Executive authority 202 (2001) 110 FCR 491 at 495-501 [4]-[29]. 203 (1888) 9 NSWR 221 at 237. 204 (1888) 14 VLR 349 at 423-425. 205 Robtelmes v Brenan (1906) 4 CLR 395 at 400-401. 206 Robtelmes v Brenan (1906) 4 CLR 395 at 403. of Australia ... could deport an alien except under the conditions authorized by some Statute". The common law of Australia has maintained a like approach to the suggestion that the Commonwealth Executive has an inherent power to deport207 or extradite persons. Although a view persisted until the 19th century that there was a prerogative power to arrest and surrender aliens to foreign states, that view has long since been rejected208. In Barton v The Commonwealth209, Barwick CJ said that: "In the common law countries, statutory authority is necessary for the surrender of a person to another country and to provide for custody and conveyance." That the position of the Commonwealth Executive respecting the exercise of the powers here in question was generally regarded to be, at the least, doubtful may explain why the Commonwealth Parliament has legislated on these topics since Federation β from the Immigration Restriction Act 1901 (Cth) to the current Migration Act β and indeed why the MP Act contains such powers. In the joint judgment in Lim210, Brennan, Deane and Dawson JJ were able to say: "In this Court, it has been consistently recognized that the power of the Parliament to make laws with respect to aliens includes not only the power to make laws providing for the expulsion or deportation of aliens by the Executive but extends to authorizing the Executive to restrain an alien in custody to the extent necessary to make the deportation effective." Lim stands for the proposition that the authority given by the Migration Act to the Commonwealth Executive to detain a person in custody, that authority being limited to the purpose of effectuating the person's expulsion and deportation, does not infringe Ch III of the Constitution, because it is neither 207 Ex parte Walsh and Johnson; In re Yates (1925) 37 CLR 36 at 79, 122, 139; [1925] HCA 53. 208 Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 521 per Brennan J; [1987] HCA 209 (1974) 131 CLR 477 at 483; [1974] HCA 20. 210 (1992) 176 CLR 1 at 30-31. punitive nor part of the judicial power of the Commonwealth211. Lim also holds212 that a statute is required to authorise and enforce the detention by the Commonwealth Executive of aliens for the purpose of expulsion. Where conferred by statute, the power of the Commonwealth Executive to detain takes its character from the legislative powers to exclude and deport aliens, of which it is an incident. The Commonwealth defendants sought to derive assistance from another passage from Cain and what was said about it in Lim. Lord Atkinson had referred213 to methods of delegation of the powers in question β by proclamation, Imperial statute or local statute to which the Crown assented β to the Governor or the Government of a Colony. His Lordship went on to say that if that delegation had taken place "the depositary or depositaries of the executive and legislative powers and authority of the Crown can exercise those powers". It was said in Lim214 that the words just quoted indicate that the power to expel or deport an alien, and the associated power to confine under restraint, were seen as "prima facie executive in character". In the context of Lim and the issue concerning Ch III of the Constitution, the identification of the powers as executive in character served to distinguish the nature and purpose of those powers from the power of detention which is part of judicial power. It is apparent from the reasons of the joint judgment, and those of Mason CJ agreeing, that the character of the executive powers is derived from the statutory authority provided. What was said in Lim is not limited to actions of the Commonwealth Executive within Australia. The actions of officers of the Commonwealth extra- territorially, on the high seas, remain subject to this Court's jurisdiction given by s 75(v) of the Constitution in the same way as Defence Force service tribunals, which are constituted by Commonwealth officers215 and may be conducted outside Australia216, are. The statements of Rich J in R v Bevan; Ex parte Elias 211 Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1 at 32 per Brennan, Deane and Dawson JJ, see also at 10 per Mason CJ agreeing. 212 Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1 at 19, 63; see also Al-Kateb v Godwin (2004) 219 CLR 562 at 604 [110] per Gummow J; [2004] HCA 213 Attorney-General for Canada v Cain [1906] AC 542 at 546. 214 (1992) 176 CLR 1 at 30. 215 Haskins v The Commonwealth (2011) 244 CLR 22 at 44 [56]; [2011] HCA 28. 216 See for instance Defence Force Discipline Act 1982 (Cth), s 136(b). and Gordon217 imply that his Honour considered that navy personnel on naval vessels on the high seas would have been treated as Commonwealth officers, to whom s 75(v) applied, had they not been transferred with Commonwealth naval vessels to the King's naval forces. Even if one assumes, for present purposes, that a Commonwealth executive power of the kind contended for existed at Federation, statutes have for a long time provided for powers of expulsion and detention. As a matter of principle any Commonwealth executive power may in those circumstances be considered lost or displaced. In Cain, Lord Atkinson observed218 that the Crown remained possessed of its powers "save so far as it has since parted with [them] by legislation, royal proclamation, or voluntary grant". And in Barton219, Barwick CJ said that, where statutory authority exists, the Crown prerogative, "if it existed before such legislation, has clearly been superseded." What was spoken of on each of these occasions was the constitutional principle that any prerogative power is to be regarded as displaced, or abrogated, where the Parliament has legislated on the same topic. When a matter is directly regulated by statute, the Executive Government derives its authority from the Parliament and can no longer rely on a prerogative power. Where the Executive Government exercises such authority, it is bound to observe the restrictions which the Parliament has imposed220. It is not necessary to survey each statute which has dealt with the powers of expulsion and detention of aliens since Federation. It is sufficient to observe, by reference to the discussion of the MP Act above, that the MP Act authorises the use of the coercive powers of expulsion and detention for which the Commonwealth defendants contend and provides for their exercise in a detailed way. The Commonwealth defendants do not point to any relevant deficiency in the MP Act. It would be difficult for them to do so. 217 (1942) 66 CLR 452 at 462; [1942] HCA 12. 218 Attorney-General for Canada v Cain [1906] AC 542 at 545-546. 219 (1974) 131 CLR 477 at 484. 220 Attorney-General v De Keyser's Royal Hotel Ltd [1920] AC 508 at 575 per Lord Parmoor; see also at 526 per Lord Dunedin, 539-540 per Lord Atkinson, 554 per Lord Moulton, 561 per Lord Sumner; Jarratt v Commissioner of Police (NSW) (2005) 224 CLR 44 at 69-70 [85]; [2005] HCA 50; Northern Territory v Arnhem Land Aboriginal Land Trust (2008) 236 CLR 24 at 58 [27]; [2008] HCA 29. The Commonwealth defendants submit that s 5 of the MP Act makes plain a legislative intention that the Act is to operate in addition to, and not in derogation of, the claimed non-statutory executive power. Section 5 provides: "[t]his Act does not limit the executive power of the Commonwealth." The relevant "intention" of a statute is that which is revealed to the court by ordinary processes of statutory construction221. Consistently with this observation, in John Holland Pty Ltd v Victorian Workcover Authority222, this Court said, of a statement in a Commonwealth statute to the effect that the statute is intended to apply to the exclusion of laws of the States or Territories where they dealt with a particular subject matter and class of persons, that: "such a statement is only a statement of intention which informs the construction of the Act as a whole. It must be an intention which the substantive provisions of the Act are capable of supporting." It can hardly be said that a statute such as the MP Act, which authorises a decision that the relevant powers be exercised in a particular way and details the manner and conditions of their exercise, and in respect of which the role of the Commonwealth Executive is discernible, supports an intention that the Commonwealth Executive is to retain a complete discretion as to how such powers are to be exercised. Section 5 is better understood as preserving such other Commonwealth executive powers as may be exercised conformably with the MP Act provisions. Such a construction would be consistent with s 3 of the MP Act, which provides that the Act binds the Crown in each of its capacities. The result of the construction for which the Commonwealth defendants contend confirms that this construction is unlikely to have been intended. In Attorney-General v De Keyser's Royal Hotel Ltd223, it was argued that the prerogative power was maintained despite a statute dealing with the same subject Lord Dunedin described224 as "unanswerable" the response of matter. Swinfen Eady MR in the Court of Appeal225: "what use would there be in imposing limitations, if the Crown could at its pleasure disregard them and fall 221 Momcilovic v The Queen (2011) 245 CLR 1 at 74 [111]-[112], 133-134 [315], 141 [341], 235 [638]; [2011] HCA 34. 222 (2009) 239 CLR 518 at 527 [20]; [2009] HCA 45. 224 Attorney-General v De Keyser's Royal Hotel Ltd [1920] AC 508 at 526. 225 In re De Keyser's Royal Hotel Ltd; De Keyser's Royal Hotel Ltd v The King [1919] 2 Ch 197 at 216. back on prerogative?" An intention to this effect, on the part of the legislature, is not readily inferred. The source of the relevant powers, of detention and removal of the plaintiff to a place outside Australia, is the MP Act and their exercise is subject to its conditions. The answer to Question (3) is therefore "no". It is unnecessary to answer Question (5), since it is premised upon an affirmative answer to Question (3). The exercise of power under s 72(4) Section 72(4) applied to the plaintiff as a person who had been on a detained vessel in respect of which maritime officers had been authorised to exercise maritime powers. The decision under s 72(4) β made by whom? Whilst s 72(4) speaks of the actions of detaining and taking a person to a place, it necessarily authorises a decision as to where the person is to be taken. The decision to be made under s 72(4) involves a choice, as between a place in Australia's migration zone and a place outside that zone, including a place outside Australia. If a person is taken to a place in the migration zone, procedures under the Migration Act may be available to the person. This choice of place may therefore be informed by Government policy, such as the policy applied in this case. The disembarkation of a person in a place outside Australia requires an arrangement or agreement to have been reached with the country in which that place is located, entered into after diplomatic negotiations. This choice of place would therefore be informed by the availability of such an arrangement or agreement. A maritime officer cannot be expected to know of relevant Government policies or the details of arrangements or agreements with other countries. It cannot therefore be taken as intended that the maritime officer exercising the maritime powers would make the decision necessary for the exercise of the maritime powers under s 72(4). Nor does the language of s 72(4) suggest that the decision resides with the maritime officer. The position of a maritime officer is the subject of an agreed fact in the Special Case. It is an agreed fact that: "The maritime officers on navy vessels and Australian customs vessels perform their duties and exercise their powers, including their powers under the Maritime Powers Act, in the context of a chain of command in which they are governed by orders and instructions from superior or senior officers." Acceptance of this fact creates a difficulty for the plaintiff's argument that s 72(4) required the maritime officer to make the decision as to where the plaintiff should be taken and to make it independently of any other person. The plaintiff's further submission that s 72(4) does not contemplate a decision being made by the Executive Government, and the NSC in particular, ignores the role of the Minister in the scheme of the MP Act and the matters which are necessary to take into account in making the decision under s 72(4). It overlooks that the powers vested in the service chiefs of the Defence Force and in the Secretary of the Department of Defence and the Chief of the Defence Force, to whose command a maritime officer who is a member of the ADF is subject, are to be exercised subject to, and in accordance with, any direction of the Minister226. In Bread Manufacturers of NSW v Evans227, consideration was given to the extent to which it might be expected that a public official, or a tribunal, could take into account, and act upon, the advice of the Government or a Minister. It was accepted that no universal answer could be given to such a question, but that account would need to be taken of the particular statutory function, the nature of the question to be decided, the character of the tribunal or official and the relationship between the tribunal or official and the responsible Minister. The exercise of the power under s 72(4) will require a decision to be made by the Executive Government as to the place where persons such as the plaintiff should be taken. That decision will be passed down, through the chain of command, to the maritime officer who exercises the power. Question (1)(b) should therefore be answered "yes". Non-refoulement and considerations of the plaintiff's safety By contrast with s 72(4), s 74 is expressed in terms which require a maritime officer to be satisfied, himself or herself, as to the safety of the person in the place in which the person is to be put. If the maritime officer is not so satisfied, s 74 prohibits the person being put in that place. This provision implies that the maritime officer is capable of assessing the "place" in question. The "place" spoken of in s 74 is the particular place on a vessel where the maritime officer places the person. This is apparent from the terms of ss 71 and 72, read with s 74. Section 71 permits a maritime officer to "place or keep a person in a particular 226 Defence Act 1903 (Cth), s 8. 227 (1981) 180 CLR 404 at 429; [1981] HCA 69. place on the vessel". Section 72(5)(a) likewise permits a maritime officer to place a person on a vessel, for the purposes of taking the person to another place. The place which is the subject of the prohibition in s 74, consistently with ss 71 and 72, is a place on a vessel. A maritime officer present on a vessel would be in a position to assess its features, in order to determine whether it is safe for the person to be in a particular place on the vessel. An obligation, on the part of a maritime officer, to ensure that the point of disembarkation for a person is, in its immediate physical aspects, safe may be implied by reference to both s 72(4) and s 74. However, s 74 does not require a maritime officer to be satisfied that the place in the migration zone or outside Australia, to which the person may be taken, would be a place where the person would not face a real risk of harm more generally. Meeting such an obligation would involve wider considerations not appropriate to the role of a maritime officer under the MP Act. If the absence of a real risk of harm at the place to which the person is to be taken is a consideration necessary to a decision under s 72(4), it must have a different source. Article 33(1) of the Refugees Convention obliges Contracting States, of which Australia is one, not to return ("refouler") a person to a country where "his life or freedom would be threatened on account of his race, religion, nationality, membership of a particular social group or political opinion." Article 33(1) permits removal to a safe third country. A country will only be a safe third country if there is no danger that a refugee might be sent from there to a country where he or she will be at risk of harm228. The Replacement Explanatory Memorandum to the Maritime Powers Bill 2012 acknowledges that s 72(4) may engage Australia's non-refoulement obligations229. It recognises that a person dealt with under the Bill may be eligible to apply for a protection visa under s 36(2)(aa) of the Migration Act, which reflects the complementary provisions of the ICCPR230 and the CAT231, and that the implied non-refoulement obligations under Arts 6 and 7 of the 228 Lauterpacht and Bethlehem, "The scope and content of the principle of non- refoulement: Opinion", in Feller, TΓΌrk and Nicholson (eds), Refugee Protection in International Law: UNHCR's Global Consultations on International Protection, 229 Australia, Senate, Maritime Powers Bill 2012, Replacement Explanatory Memorandum at 6. 230 International Covenant on Civil and Political Rights (1966). 231 Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment (1984). ICCPR and the Second Optional Protocol to the ICCPR may be engaged. It is said in the Replacement Explanatory Memorandum that, in such circumstances: "in order to ensure that a maritime officer who has detained a person aboard a vessel acts in accordance with Australia's non-refoulement obligations, procedures relating to the consideration of refoulement risks would need to be in place. The Bill does not inhibit or impose any restriction on a maritime officer acting in accordance with Australia's non- refoulement obligations." The Bill was to take effect within 12 months of Royal Assent. This was considered to allow sufficient time for enforcement agencies to review the necessary operational practices and procedures for the exercise of maritime powers under the Bill. The Special Case does not mention any procedures that were put in place by which a maritime officer could ascertain whether Australia's non-refoulement obligations were engaged with respect to a person detained, although the Replacement Explanatory Memorandum shows that it was clearly assumed that such a consideration was relevant to a decision under s 72(4). The discussion in the Replacement Explanatory Memorandum may have its source in an understanding, and acceptance, of Australia's treaty obligations. The plaintiff argues that the MP Act, and s 72(4) in particular, should be construed in accordance with those treaty obligations. The question is whether it can be so construed. Before embarking upon such an exercise it may be useful to analyse the enquiry which Question (1)(a) actually poses. Despite the parties having agreed to state the question in the terms set out above, the Commonwealth defendants spent some time in argument pointing to the difficulties in an answer being provided to it. It must first be mentioned that the plaintiff does not claim to fear persecution in India β which, after all, was the country in which he was present prior to boarding the Indian vessel. Question (1)(a), clearly enough, is addressed to the prospect that, were the plaintiff taken to India, he might be sent from there to Sri Lanka. So understood, and despite some difficulty in the way in which the question is framed, Question (1)(a) enquires as to the state of Indian law. Shorn of the words preceding it, which create the difficulty, the essential question is: "would [the plaintiff] be entitled by the law applicable in India to the benefit of the non-refoulement obligations"? India is not a signatory to the Refugees Convention, and has not ratified the CAT, Art 3 of which also contains a prohibition on refoulement. India is a party to the ICCPR, which does not contain an express provision to this effect. However, Art 6 of the ICCPR provides a right to life, and Art 7 contains an obligation not to subject a person to torture or cruel, inhuman or degrading treatment or punishment. The United Nations Human Rights Committee has stated that signatories to the ICCPR are subject to a non-refoulement obligation in cases involving potential breaches of Arts 6 and 7 of that Convention232. This statement does not provide a sufficient basis for an answer to Question (1)(a). The Special Case states no fact as to Indian State practice or as to whether obligations of non-refoulement are accepted by the domestic law of India. The factual position in the Special Case regarding Question (1)(a) may be compared with that provided with respect to Question (1)(c): it is accepted that no agreement concerning the reception of the plaintiff in India existed between Australia and India prior to him being taken there. In the absence of necessary facts respecting the law of India, all that can be said about Question (1)(a) is that the Special Case does not permit an answer to it. Procedural fairness The plaintiff submits that the Commonwealth defendants were required, at least, to notify the plaintiff that consideration was being given to the possible exercise of the powers conferred by s 72(4) and to give him the opportunity to be heard as to that proposed exercise of power, as to his claims (if any) to be a person in respect of whom Australia owed non-refoulement obligations and as to whether being taken to a place other than Australia might threaten his safety. The requirements of procedural fairness are essentially practical and depend upon the legislative framework and the circumstances of the particular case233. The operation of the MP Act does not admit of an opportunity to be 232 See for instance Human Rights Committee, Views: Communication No 470/1991, 48th sess, UN Doc CCPR/C/48/D/470/1991 (30 July 1993) at [13.1]-[13.2] ("Kindler v Canada"); Human Rights Committee, Views: Communication No 692/1996, 60th sess, UN Doc CCPR/C/60/D/692/1996 (28 July 1997) at [6.9] Communication ("ARJ v Australia"); Human Rights Committee, Views: No 1205/2003, 92nd sess, UN Doc CCPR/C/92/D/1205/2003 (3 April 2008) at [6.3] ("Bauetdinov v Uzbekistan"); Human Rights Committee, Decision: Communication No 1540/2007, 94th sess, UN Doc CCPR/C/94/D/1540/2007 (30 October 2008) at [7.3] ("MWN and LQ v Sweden"). 233 Heatley v Tasmanian Racing and Gaming Commission (1977) 137 CLR 487 at 513-514; [1977] HCA 39; Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82 at 109 [60]; [2000] HCA 57; Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1 at 14 [37], 16 [48]; [2003] HCA 6; Applicant VEAL of 2002 v Minister for Immigration and (Footnote continues on next page) given to the plaintiff to comment upon where he might be taken and whether he should be detained in that process. He was a person on a vessel which was detained in order to prevent the contravention of an Australian law. In a circumstance where the Indian vessel was unseaworthy, the only option available under the MP Act was to detain the plaintiff and take him to a place where he might be disembarked. The plaintiff could assert no right, interest or expectation in the outcome of the decision234. No opportunity for him to comment upon these matters could arise. Further, there would be good reason, having regard to the security of the 56 maritime officers and crew aboard the Australian vessel, not to advise the 157 persons placed on board that they were not to be taken to Australia and instead were to be taken to the place from which they had come. The plaintiff's interest in his personal safety, in not being exposed to the risk of harm in Sri Lanka, stands in a different category. In this regard the plaintiff may be understood to claim that he should have been given the opportunity to answer enquiries about his life in Sri Lanka sufficient to identify that he feared persecution and harm. These enquiries could have informed the decision as to where he was to be taken. It seems reasonable to infer that, from an early point after the Indian vessel was intercepted, it would have been evident to maritime officers on the Australian vessel that the plaintiff is a Tamil. There were persons on board who are said to have spoken Tamil and English and acted as interpreters for the plaintiff and others. The plaintiff gave personal and biographical details as requested. It is not suggested that these enquiries failed to elicit the plaintiff's ethnicity and nationality. The Special Case records particular questions that the plaintiff was not asked, which one infers the plaintiff considers should have been asked, such as "why he left Sri Lanka" and whether he claimed, in effect, to be a refugee. The fact that the plaintiff is a Tamil would itself be sufficient to alert maritime officers to the likelihood that he may claim to fear persecution in Sri Lanka. There was therefore no need to ask him directly as to these matters and whether he claimed to be a person in respect of whom Australia owes protection obligations. The omission of the maritime officers to make further enquiries of the plaintiff, therefore, did not constitute a breach of procedural fairness. The answer to Question (4) is therefore "no". Multicultural and Indigenous Affairs (2005) 225 CLR 88 at 99 [25]; [2005] HCA 234 See Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82 at 121 [101]. An agreement with India? The central question with respect to the exercise of power under s 72(4) is whether it authorised a decision to take the plaintiff and the others to India, without there being an agreement in place which would allow the plaintiff and the others to disembark there. Arrangements of this kind, between Australia and the Republic of Nauru, and Australia and the Independent State of Papua New Guinea, were in place at the relevant time. There was no such agreement between Australia and India on 1 July 2014, when the NSC made the decision that the persons from the Indian vessel be taken to India. Absent such an agreement, the prospect that the plaintiff and the others could disembark on arrival was clearly speculative. It may be inferred that such an agreement was not arrived at between 1 July and 23 July 2014, on or about which date the decision was made to take the plaintiff to the Cocos (Keeling) Islands. The answer to this question does not lie merely in considerations of expedition. Unlike other provisions of the MP Act235, s 72(4) does not require that a person is to be taken to another place as soon as practicable. Furthermore, the choice provided by s 72(4), between taking the plaintiff to a place within the migration zone or to a place outside Australia, forecloses the possibility that a requirement to that effect may be implied in s 72(4). Where no time requirement is provided by a statute for the doing of an act, the law will imply a requirement that it be done as soon as reasonably practicable236, at least where such an implication is possible. Section 72(4) does not admit of that possibility. It leaves open the choice that a person be taken to a place which may be further from the point of interception than other places. To comply with an obligation to take the plaintiff to a place and disembark him as soon as reasonably practicable would have likely required the plaintiff to be taken to Christmas Island, which was only some 16 nautical miles from the point of interception. Such an obligation would render nugatory the choice provided for in s 72(4). That is not to say that the law will not imply any time requirement with respect to the exercise of the powers under s 72(4). The decision where to take a person such as the plaintiff would have to be made within a reasonable time and the time taken to reach the chosen destination would also have to be reasonable. The point is that the reasonableness of the time taken would be adjudged by 235 See, for example, Maritime Powers Act 2013, s 98(1). 236 Koon Wing Lau v Calwell (1949) 80 CLR 533 at 573-574; [1949] HCA 65; Plaintiff S4/2014 v Minister for Immigration and Border Protection (2014) 88 ALJR 847 at 853 [28], 854 [34]; 312 ALR 537 at 543, 544; [2014] HCA 34. reference to that destination, but a requirement of time does not dictate the choice of destination. It is no part of the Special Case that the exercise of the power under s 72(4), and the decision to take the plaintiff and the other persons to India, involved an improper purpose, one foreign to the MP Act. Although the plaintiff seeks to argue that the powers were exercised for the purpose of deterring other non-citizens from seeking to enter Australia by sea without a permit, in accordance with the Government's policy, the Commonwealth defendants' objection to that contention as being outside the terms of the Special Case is properly made and should be upheld. The question with respect to s 72(4) is not whether it was reasonable, in a legal sense237, for the decision-maker to have believed that the necessary agreement with the country in question would be achieved before the destination was reached and the person detained due to be disembarked. It is a question of legislative authority, which is answered by consideration of the terms of s 72(4) itself and other provisions of the MP Act relevant to it and to the detention of persons such as the plaintiff. Section 72(4) requires that a person be taken to a "place" in or outside Australia. Section 97(1) provides that the detention ends at that place, which is to say, when that place is reached. When that place is reached, and the person's detention comes to an end, the person must be disembarked as soon as reasonably practicable. Section 72(5)(c) provides for the removal of the person at that place. These factors point strongly to the need for certainty about the choice of place. They point to the decision under s 72(4) being limited to one place, which is identified at the time the decision is made as one where it is known that the detained person may be disembarked. Why would this not be so? After all, a person such as the plaintiff is detained for as long as is necessary to effect his or her removal to that place. Whilst the choice of place is not constrained by considerations of which is closest, as discussed above, it is quite another matter to suggest that the decision under s 72(4) may be provisional only, as is the case where disembarkation is dependent on the outcome of negotiations which are to take place with another country. This is the effect of the Commonwealth defendants' construction. To construe s 72(4) to require certainty about disembarkation at the chosen destination could not create unforeseen difficulties for Australian vessels 237 Minister for Immigration and Citizenship v Li (2013) 249 CLR 332; [2013] HCA in circumstances such as the present. The problem of vessels entering Australia's migration zone with persons on board who have no right of entry is not a new one. The powers under s 72(4) may be taken as addressed to such a situation, as the Replacement Explanatory Memorandum confirms238. At the time the MP Act was passed it was known that, for disembarkation to be effective, arrangements must be in place with countries in the region. Some such arrangements had already been made. Section 40, which, it will be recalled, provides that the agreement of another country may be necessary for the exercise of any maritime powers in that country, confirms that this was understood. Section 40 serves to point up, if it were necessary to do so, the importance to the decision under s 72(4) of an agreement being in place. It may also be taken as understood, as Lim holds, that detention by the Commonwealth Executive can only validly be for the limited purpose of effecting the expulsion of a person. That limited purpose cannot expand the scope of operation of s 72(4). It would not be consistent with that limited purpose for a person to be taken on a voyage on the high seas when the length of the person's detention was unknown239. Section 72(4) should be construed to provide the necessary certainty. Section 97(2)(a) does not detract from this construction of s 72(4). Section 97(2)(a) provides that the requirement in s 97(1), that a person's detention ends at the place chosen under s 72(4), does not prevent the person being taken to different places where they are "on the way to the other place". Section 97(2)(a) is addressed to the need to account for the practicalities of a journey. It does not support a construction of s 72(4) by which detention could be prolonged by the need to make arrangements which would permit the disembarkation of persons detained. In the absence of such an arrangement or agreement, the decision to take the plaintiff to India was not authorised by s 72(4). The answer to Question (1)(c) is "no". It follows that the detention of the plaintiff between 1 July 2014 and 27 July 2014 was unlawful. 238 See, for example, Australia, Senate, Maritime Powers Bill 2012, Replacement Explanatory Memorandum at 1. 239 Plaintiff S4/2014 v Minister for Immigration and Border Protection (2014) 88 ALJR 847 at 853 [29]; 312 ALR 537 at 543-544. Damages? Unlawful detention is a trespass and actionable as a tort regardless of whether the plaintiff has suffered harm240. In the present case, had the plaintiff not been detained on the Australian vessel for the period in question, he would have been detained in immigration detention. The circumstances of this case are similar to those pertaining in R (Lumba) v Secretary of State for the Home Department241. In that case, the claimants were falsely imprisoned, but the Supreme Court of the United Kingdom held that it was inevitable that they would have been detained in any event, had correct principles and lawful policies been applied. The claimants were held to have suffered no loss or damage as a result of the unlawful exercise of the power to detain and therefore nominal damages only could be awarded. The plaintiff submits that this Court should leave the question as to the extent of any award of damages to be assessed on remitter. However, it seems to me that only one conclusion is possible and the terms of any remitter ought to be made clear. Damages could only be awarded for the infraction of the MP Act. In such circumstances, only nominal damages can be awarded242. Answers to questions The Questions Stated should be answered as follows: The Special Case does not permit an answer to this question. (b) Yes. (c) No. (5) Unnecessary to answer. 240 R (Lumba) v Secretary of State for the Home Department [2012] 1 AC 245 at 274 242 Owners of Steamship "Mediana" v Owners, Master and Crew of Lightship "Comet" (The "Mediana") [1900] AC 113 at 116. (6) Yes. The plaintiff was unlawfully detained from 1 July 2014 to 27 July 2014. He is entitled to nominal damages. The Commonwealth defendants should pay the plaintiff's costs. The matter should be remitted to the Federal Circuit Court of Australia for assessment of nominal damages. Introduction The plaintiff is a person of Tamil ethnicity and of Sri Lankan nationality. He claims to be a "refugee" within the meaning of the Refugees Convention243, on the basis of having a well-founded fear of persecution in Sri Lanka. He claims also to be a person in respect of whom Australia has obligations, under the Torture Convention244 and the International Covenant on Civil and Political Rights, not to return him directly or indirectly to Sri Lanka. The plaintiff was one of 157 persons who were on board an Indian flagged vessel which left Pondicherry in the Republic of India in June 2014 and which was intercepted by an Australian border protection vessel approximately 16 nautical miles off the coast of the Territory of Christmas Island on 29 June 2014. The Indian flagged vessel was on that day boarded. None of the 157 persons on board were found to be Australian citizens and none were found to have any right to enter Australia. All were detained. They were transferred to the border protection vessel that same day after a fire in the engine room made the Indian flagged vessel unseaworthy. The policy of the Australian Government was to the effect that anyone seeking to enter Australia by boat without a visa would be intercepted and removed from Australia. The National Security Committee of Cabinet confirmed that policy and decided on 1 July 2014 that all 157 persons then detained on the border protection vessel should be taken to India. The Australian Government at that time had no agreement or arrangement with the government of India for any of those persons to be taken to India. In the implementation of that policy of the Australian Government, and specifically in the implementation of that decision of the National Security Committee of Cabinet, the border protection vessel on which the 157 persons continued to be detained started travelling towards India on 1 July 2014. It arrived near India on or about 10 July 2014. There it stood for about 12 days. During that period, diplomatic negotiations were conducted between Australia and India. On or about 23 July 2014, the Minister for Immigration and Border Protection formed the view that it was not practicable to complete the process of 243 Convention relating to the Status of Refugees (1951) as amended by the Protocol relating to the Status of Refugees (1967). 244 Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment (1984). taking the 157 persons to India within a reasonable time. The border protection vessel on which the persons continued to be detained then started travelling towards the Territory of the Cocos (Keeling) Islands, where it arrived on 27 July 2014. There the persons were disembarked and were immediately detained under s 189 of the Migration Act 1958 (Cth). The plaintiff commenced proceedings against the Minister and the Commonwealth of Australia in the original jurisdiction of the High Court soon after he was detained. What the plaintiff now claims in these proceedings is that his detention between 1 July and 27 July 2014 was unlawful. He claims damages in tort for wrongful imprisonment. The Minister and the Commonwealth say in their defence that, during the whole of the period between the time of his initial detention in waters off the coast of Christmas Island on 29 June 2014 and the time of his arrival at the Cocos (Keeling) Islands on 27 July 2014, the plaintiff was lawfully detained under s 72(4) of the Maritime Powers Act 2013 (Cth) ("the Act"). They say, the further or alternatively, Commonwealth was sufficient authority for his lawful detention throughout the whole of that period without need for statutory supplementation. They go on to say that the plaintiff would not be entitled to substantial damages even if his detention between 1 July and 27 July 2014 had been unlawful. That is because the plaintiff would have been kept in detention during that period in any event. Had he been taken directly to Christmas Island, or to the Cocos (Keeling) Islands or to some other part of Australia, following his detention on 29 June 2014, he would have been detained there under s 189 of the Migration Act. the non-statutory executive power of that The parties have agreed on a special case, which asks six substantive questions of the Full Court. Three of those substantive questions are about s 72(4) of the Act. Each of them is framed to reflect one or more of a larger number of arguments which are put on behalf of the plaintiff as to why that provision had no application. Two of the other substantive questions are about the non-statutory executive power of the Commonwealth. The last is about damages. As has only recently been affirmed245: "It is not the practice of the Court to investigate and decide constitutional questions unless there exists a state of facts which makes it necessary to 245 Plaintiff M76/2013 v Minister for Immigration, Multicultural Affairs and Citizenship (2013) 251 CLR 322 at 372 [148]; [2013] HCA 53, quoting Lambert v Weichelt (1954) 28 ALJ 282 at 283. decide such a question in order to do justice in the given case and to determine the rights of the parties." If the proper conclusion is that the plaintiff was lawfully detained under s 72(4) of the Act at all times between 29 June and 27 July 2014, that conclusion is a complete answer to the plaintiff's claim and the other substantive questions, in particular the constitutional questions, need not be answered. It is therefore appropriate to turn immediately to consider the questions which the special case asks about s 72(4) of the Act. Consideration of those questions is conveniently undertaken in stages. The first stage is to locate that provision within the scheme of the Act. The next stage is to relate the scheme of the Act to the events which occurred to the extent its application is uncontroversial. The arguments put on behalf of the plaintiff as to the non-application of s 72(4) can then be identified and considered thematically. The Act The Act was enacted to provide a single comprehensive framework for enforcing Australian law at sea246. The scheme of the Act, in broad terms, is to provide for "maritime officers" to be able to exercise "maritime powers", for specified purposes and subject to specified geographical limitations, if and for so long as there is in force an authorisation by an "authorising officer" for the exercise of maritime powers. The scheme is designed to ensure "flexibility" in the exercise of maritime powers and "to assist maritime officers to deal with quickly changing circumstances and often difficult and dangerous situations"247. Maritime officers comprise members of the Australian Defence Force, officers of Customs, members and special members of the Australian Federal Police and persons appointed as maritime officers by the Minister248. In exercising maritime powers under the Act, "a maritime officer may use such force against a person or thing as is necessary and reasonable in the 246 Australia, House of Representatives, Parliamentary Debates (Hansard), 30 May 247 Australia, House of Representatives, Parliamentary Debates (Hansard), 30 May 248 Section 104 of the Act. circumstances"249, provided always that the person is not subjected to cruel, inhuman or degrading treatment250. Maritime powers include those expressed in terms that a maritime officer "may": board a vessel251; require a person to answer questions or produce records or documents252; conduct a search253; examine a thing254; secure a weapon255; seize a weapon256; seize any thing that the officer suspects, on reasonable grounds, may afford evidence of a contravention of an Australian law (being any law of the Commonwealth or a State or Territory other than one prescribed by regulation257)258; and seize any thing that the officer suspects, on reasonable grounds, is a border controlled drug or a border controlled plant within the meaning of the serious drug offences provisions of the Criminal Code (Cth)259 or is owned by the Commonwealth or a State or Territory260. Of central relevance to the present case is that maritime powers include those expressed in terms that a maritime officer "may detain a vessel"261, that a maritime officer may take the vessel so detained to a port or other place that the officer considers appropriate262, and, under s 71, that "[a] maritime officer 249 Section 37(1) of the Act. 250 Section 95 of the Act. 251 Section 52(1) of the Act. 252 Section 57(1) of the Act. 253 Section 59(1) of the Act. 254 Section 63(1) of the Act. 255 Section 66(1) of the Act. 256 Section 67(1)(a) of the Act. 257 Section 8 of the Act ("Australian law"). 258 Section 67(1)(b)(i) read with s 8 of the Act ("evidential material"). 259 Section 67(1)(b)(ii) of the Act. 260 Section 67(1)(b)(iii) of the Act. 261 Section 69(1) of the Act. 262 Section 69(2)(a) of the Act. exercising powers in relation to a vessel ... may place ... a person in a particular place on the vessel ... or land". The maritime powers in s 72 apply specifically in relation to a person on a "detained vessel"263 or "whom a maritime officer reasonably suspects was on a vessel β¦ when it was detained"264. Those maritime powers include that a maritime officer "may return the person to the vessel"265 and "may require the person to remain on the vessel" until it is taken to a port or other place266. Section 72(4), the focus of present attention, is expressed in terms that a maritime officer: "may detain the person and take the person, or cause the person to be taken: to a place in the migration zone; or to a place outside the migration zone, including a place outside Australia." The expression "migration zone" has the same meaning as in the Migration Act267, being the area consisting of the States, the Territories, Australian resource installations and Australian sea installations268. Section 72(5) expands on the content of s 72(4), providing: "For the purposes of taking the person to another place, a maritime officer may within or outside Australia: place the person on a vessel or aircraft; or restrain the person on a vessel or aircraft; or remove the person from a vessel or aircraft." 263 Section 72(1)(a) of the Act. 264 Section 72(1)(b) of the Act. 265 Section 72(2) of the Act. 266 Section 72(3)(a) of the Act. 267 Section 8 of the Act ("migration zone"). 268 Section 5(1) of the Migration Act ("migration zone"). Section 74, the relationship of which with s 72(4) will require further examination, provides: "A maritime officer must not place or keep a person in a place, unless the officer is satisfied, on reasonable grounds, that it is safe for the person to be in that place." If a person is detained and taken to another place under s 72(4), the detention ends at that place269. In the meantime, any restraint on the liberty of the person which results from the operation of s 72(4) is not unlawful270. Authorising officers, who are given capacity to authorise the exercise of maritime powers in relation to a vessel, comprise any of: the most senior maritime officer, or member or special member of the Australian Federal Police, who is in a position to exercise any of the maritime powers in person271; the most senior maritime officer on duty in a duly established operations room272; the person in command of a Commonwealth ship or Commonwealth aircraft from which the exercise of powers is to be directed or coordinated273; and a person appointed as an authorising officer by the Minister274. The Act provides that an authorising officer "may authorise the exercise of maritime powers in relation to a vessel" in specified circumstances. One of those circumstances is expressed as being "if the officer suspects, on reasonable grounds, that the vessel ... is involved in a contravention of an Australian law"275. A vessel is sufficiently "involved in a contravention of a law" for that purpose if "there is some β¦ connection between the vessel β¦ and a contravention, or intended contravention, of the law"276. Another circumstance in which an authorising officer may authorise the exercise of maritime powers in relation to a vessel is expressed as being "for the purposes of administering or ensuring 269 Section 97(1) of the Act. 270 Section 75(1) of the Act. 271 Section 16(1)(a) and (b) of the Act. 272 Section 16(1)(c) of the Act. 273 Section 16(1)(d) of the Act. 274 Section 16(1)(e) of the Act. 275 Section 17(1) of the Act. 276 Section 9(1)(b) of the Act. compliance with a monitoring law"277. A monitoring law is any of a number of specified Commonwealth laws, which include the Migration Act, the Customs Act 1901 (Cth), the explosives import-export278 and drug trafficking279 offence provisions of the Criminal Code, the Fisheries Management Act 1991 (Cth) and the Torres Strait Fisheries Act 1984 (Cth)280. An authorisation lapses if powers have not been exercised under it within 72 hours after it is given281. Otherwise, an authorisation remains in force until the continuous exercise of powers under it ends282. According to the scheme of the Act, where there is in force in relation to a vessel an authorisation given on the basis of an authorising officer suspecting on reasonable grounds that the vessel is involved in a contravention of an Australian law, a maritime officer may exercise maritime powers in relation to the vessel to "investigate the contravention"283. Similarly, where there is in force in relation to a vessel an authorisation given for the purpose of administering or ensuring compliance with a monitoring law, a maritime officer may exercise maritime powers in relation to the vessel to "administer or ensure compliance with the monitoring law"284. The maritime officer is not, however, limited to exercising maritime powers for those purposes. In either case, the maritime officer may also exercise maritime powers for other specified purposes which include: "to investigate or prevent any contravention of an Australian law that the officer suspects, on reasonable grounds, the vessel ... to be involved in"285, and "to administer or 277 Section 18 of the Act. 278 Section 72.13 of the Criminal Code. 279 Division 302 of the Criminal Code. 280 Section 8 of the Act ("monitoring law"). 281 Section 23(1)(b) and (3) of the Act. 282 Section 23(1)(a) and (2) of the Act. 283 Section 31(a) of the Act. 284 Section 31(b) of the Act. 285 Section 32(1)(a) of the Act. ensure compliance with any monitoring law"286. The Explanatory Memorandum accompanying the Bill for the Act in that respect explained287: "This provision will provide maritime officers acting under an authorisation operational flexibility in the maritime environment. The benefits of maritime officers being able to operate flexibly and quickly in the maritime environment, particularly in circumstances of urgency, outweigh the reduced oversight of maritime officers resulting from not obtaining further authorisations." The Act contains the introductory explanation that "[i]n accordance with international law, the exercise of powers is limited in places outside Australia"288. Section 41 imposes particular geographical limitations on the exercise of powers in relation to a foreign vessel which are framed to reflect Australia's rights and obligations under the Law of the Sea Convention289. Section 41(1)(c) is specifically framed to reflect Art 33(1) of the Law of the Sea Convention. It provides: "This Act does not authorise the exercise of powers in relation to a foreign vessel at a place between Australia and another country unless the powers are exercised: in the contiguous zone of Australia to: investigate a contravention of a customs, fiscal, immigration or sanitary law prescribed by the regulations that occurred in Australia; or prevent a contravention of such a law occurring in Australia; 286 Section 32(1)(b) of the Act. 287 Australia, Senate, Maritime Powers Bill 2012, Replacement Explanatory Memorandum at 34. 288 Section 7 of the Act. 289 United Nations Convention on the Law of the Sea (1982). The expression "contiguous zone" as used in the Act has the same meaning as that given by Art 33(2) of the Law of the Sea Convention290, being a maritime zone that may not extend beyond 24 nautical miles from the baselines from which the breadth of the territorial sea is measured. The contiguous zone for Australia is declared by, and its limits are proclaimed under, the Seas and Submerged Lands Act 1973 (Cth). The Migration Act is amongst the laws which have been prescribed by regulations made under the Act for the purpose of s 41(1)(c)(i) of the Act291. Application of the Act The special case records that 35 maritime officers were on board the border protection vessel at the time of interception of the Indian flagged vessel. It was those maritime officers who first boarded the Indian flagged vessel, who then detained the Indian flagged vessel, who went on to detain the plaintiff and other persons on the Indian flagged vessel, who then transferred them to the border protection vessel, and who later kept them in detention on the border protection vessel while attempting to take them to India in the implementation of the policy of the Australian Government and of the decision of the National Security Committee of Cabinet. The special case also records that those events were preceded by the person in command of the border protection vessel, being an authorising officer, authorising the exercise of maritime powers in relation to the Indian flagged vessel on the basis that he suspected, on reasonable grounds, that the vessel was involved in a contravention of the Migration Act. It is not in dispute that the suspected contravention was an intended contravention of s 42(1) of the Migration Act, which provides that "a non-citizen must not travel to Australia without a visa that is in effect". The special case also records that the place approximately 16 nautical miles off the coast of Christmas Island where the Indian flagged vessel was intercepted and boarded, and where the plaintiff and other persons were initially detained, was within Australia's contiguous zone. The plaintiff does not dispute that maritime officers acted in the lawful exercise of maritime powers in boarding and detaining the vessel. Nor does the plaintiff dispute that maritime officers acted in the lawful exercise of the particular maritime power conferred by s 72(4) of the Act when they initially detained him and when they transferred him to the border protection vessel on 29 June 2014. What is said on the plaintiff's behalf is that the maritime power 290 Section 8 of the Act ("contiguous zone"). 291 Section 8 of the Maritime Powers Regulation 2014 (Cth). conferred by that provision ceased to authorise his detention at the time the maritime officers commenced their attempt to take him to India on 1 July 2014. The arguments made on the plaintiff's behalf as to why the maritime power conferred by s 72(4) of the Act ceased to authorise his detention at the time the maritime officers commenced their attempt to take him to India divide broadly into two categories. There are those which rely in varying degrees on reading s 72(4) as a decision-making power, which is said to have been invalidly exercised by the maritime officers concerned. There are those which involve reading s 72(4) as subject to an implied limitation, which is said to arise by reference to the international context in which it operates. The arguments are conveniently addressed in that order. A decision-making power? The word "power" is often used in a statutory setting to connote the conferral of legal authority to act in derogation or alteration of legal rights. The legal authority is often conferred on the express or implied condition that, before so acting, the repository of power must form a particular state of mind or must undertake a particular process of reasoning. Hence, it is common to think of an exercise of statutory power as the product of a statutory decision. The maritime powers conferred on maritime officers under the Act do not fit that standard pattern in all respects. The maritime powers are conferrals of legal authority on maritime officers to do specified acts in derogation of legal rights to liberty and property. Their conferral is on conditions, some of which are express and some of which are implied. It may be accepted to be an implied condition of each maritime power that the maritime officer must act in good faith and that the maritime officer cannot be motivated by considerations which can be judged to be "definitely extraneous to any objects the legislature could have had in view"292. The Act also provides for circumstances in which the exercise of one or more maritime powers is subjected to a further express condition that a maritime officer must form a particular state of mind before acting. Section 74 is an example. Otherwise, maritime powers are not subject to any express or implied condition that a maritime officer must form any particular state of mind or must undertake any particular process of reasoning. They are rather powers available to be exercised, where the precondition of authorisation is met, in the implementation by maritime officers of decisions made by others within a chain of command. That chain of command extends ultimately to the Governor- 292 Water Conservation and Irrigation Commission (NSW) v Browning (1947) 74 CLR 492 at 505; [1947] HCA 21. General, by whom the non-statutory executive power of the Commonwealth is formally exercisable by s 61 of the Constitution and who is made titular commander in chief of the navy and military forces by s 68 of the Constitution. That ultimate command is in practice exercised by Ministers appointed by the Governor-General under s 64 of the Constitution and in particular, in accordance with contemporary practice, exercised by those Ministers who collectively form the National Security Committee of Cabinet. The specified purposes for which the Act allows maritime officers to exercise maritime powers are not to be equated with the subjective purposes of the particular maritime officers who exercise particular powers. They are objective purposes, discernible by reference to the totality of the circumstances in which the particular powers are exercised where a particular authorisation is in force. That understanding of the nature of maritime powers is not contrary to the general intention of the Commonwealth Parliament appearing in s 33(2A) of the Acts Interpretation Act 1901 (Cth), that the word "may" in a statute which it enacts connotes the conferral of a discretion to do an act or thing. The distinction to which s 33(2A) speaks is between a power and a duty, between what can be done and what must be done. The provision does not speak to the conditions which must exist for a power to be exercised. That understanding of the nature of maritime powers is a complete answer to arguments made on the plaintiff's behalf to the effect that the maritime officers on the border protection vessel, in attempting to take him to India, impermissibly acted under the dictation of the National Security Committee of Cabinet and impermissibly fettered a discretion (to take him to a place in the migration zone) conferred by s 72(4)(a) by implementing that part of the policy of the Australian Government which was to the effect that anyone seeking to enter Australia by boat without a visa would be removed from Australia. For a maritime officer to act on the command of the National Security Committee of Cabinet, and in the implementation of a policy of the Australian Government, is permissible in the exercise by that maritime officer of the maritime power conferred by s 72(4). To the extent that it is argued on behalf of the plaintiff that the policy of the Australian Government was objectively inconsistent with the purposes for which maritime powers were capable of being exercised under the Act in the circumstances of the authorisation, based as it was on the Indian flagged vessel being involved in a suspected contravention of s 42(1) of the Migration Act, that argument must be rejected. The Migration Act, as has been noted, is both a monitoring law and a law prescribed by the regulations for the purpose of s 41(1)(c)(i) of the Act. A policy to the effect that anyone seeking to enter Australia by boat without a visa in contravention of s 42(1) of the Migration Act will be intercepted and removed from Australia is objectively consistent with the permitted purpose of ensuring compliance with s 42(1) of the Migration Act. It is a means to that end. In its application to the exercise of maritime powers in relation to a foreign vessel at a place in the contiguous zone of Australia, the policy is also consistent with the purpose of preventing a contravention of s 42(1) of the Migration Act from occurring in Australia. On that basis, it is within s 41(1)(c)(ii) of the Act. The wisdom of the policy is not for a court to judge. That understanding of the nature of maritime powers is also an answer to the primary way in which it is argued on behalf of the plaintiff that the attempt to take him to India breached what is argued to be an implied condition of s 72(4) that he be afforded procedural fairness. According to that argument, an exercise of the maritime power conferred by s 72(4) necessarily involves a maritime officer making two decisions. The first is a decision to detain a person. The second is a separate decision to take that person to a place. The argument accepts that the first of those putative decisions is not conditional on the maritime officer affording the person procedural fairness. The argument nevertheless goes on to posit that nothing in the nature of the power or the context of the Act excludes the implication of procedural fairness as a condition of the valid making of the second putative decision to take the person to a place; procedural fairness not being excluded, the person must be given an opportunity to explain and justify why he or she should or should not be taken to a particular place. The argument breaks down at the first hurdle if no part of the exercise of the maritime power conferred by s 72(4) necessarily involves a maritime officer making any decision. Whilst the conclusion that no part of the exercise of the maritime power conferred by s 72(4) necessarily involves a maritime officer making a decision is sufficient to reject the primary way in which it is argued on behalf of the plaintiff that the validity of the exercise of the maritime power is impliedly conditioned on the observance of procedural fairness, it is not alone sufficient to exclude the implication of procedural fairness. The implication of procedural fairness is the product of a strong common law presumption applicable to any statutory power the exercise of which is capable of having an adverse effect on legally recognised rights or interests293. Forcibly taking a person to a place to which the person does not want to go has an obvious immediate adverse effect on that person's right to liberty and may have longer term adverse effects on other rights and interests of the person depending on conditions which exist in the place to which the person is forcibly taken. Procedural fairness as implied in some contexts can have a flexible, chameleon-like, content capable of varying according to the exigencies of the exercise of power between nothingness at one extreme and a full-blown trial at the other294. To imply procedural fairness as a condition of the lawful 293 Plaintiff S10/2011 v Minister for Immigration and Citizenship (2012) 246 CLR 636 at 666 [97]; [2012] HCA 31. 294 Kioa v West (1985) 159 CLR 550 at 615; [1985] HCA 81. exercise of a statutory power is therefore not necessarily to require a hearing in every case in which the power might be exercised. Ordinarily, procedural fairness does not require providing a person whose interests are likely to be affected by an exercise of statutory power any greater opportunity to be heard than is reasonable in all the circumstances295. There are, however, two other factors which tell against the implication of procedural fairness as conditioning the exercise of the power conferred by s 72(4) to any degree and in any circumstances. One is the very nature of a maritime power, conferred as it is exclusively on maritime officers. To pick up on the earlier quoted language of the Explanatory Memorandum, maritime powers are powers which maritime officers must be able to exercise flexibly and quickly in the maritime environment, particularly in circumstances of urgency. Just as it has been recognised that it might conflict with the exercise of statutory responsibilities for the common law to impose a duty of care in the exercise of a statutory power of investigation296, and that it would be "opposed alike to reason and to policy" for the common law to impose a duty of care in the conduct by military personnel of warlike operations297, so too it would be incongruous for the common law to imply a duty on a maritime officer to afford procedural fairness as a condition of the exercise of a maritime power. The implication would be tantamount to imposing an obligation on a maritime officer to afford a detained person an opportunity to present a case as to where the person should or should not be taken whenever the circumstances are such that a court might later judge that it would be reasonable for the person to be afforded that opportunity. Taking a person to a place in breach of that obligation (because it would result in a withdrawal of the authority conferred by the power) would result in the maritime officer acting unlawfully and being liable to the person in tort for false imprisonment. The implication would go beyond "supply[ing] the omission of the legislature"298, to the point of impairing the operation of the legislation. The other factor which tells against the implication of procedural fairness as a condition of the exercise of the maritime power conferred by s 72(4) is the presence of s 74. The prohibition in that section, against a maritime officer placing a person in a place "unless the officer is satisfied, on reasonable grounds, that it is safe for the person to be in that place", has application (amongst other 295 Kioa v West (1985) 159 CLR 550 at 627. 296 Sullivan v Moody (2001) 207 CLR 562 at 582 [60]; [2001] HCA 59. 297 Shaw Savill and Albion Co Ltd v The Commonwealth (1940) 66 CLR 344 at 361; [1940] HCA 40. 298 Kioa v West (1985) 159 CLR 550 at 609, quoting Cooper v Wandsworth Board of Works (1863) 14 CB(NS) 180 at 194 [143 ER 414 at 420]. circumstances) to the placing of a person on land by a maritime officer exercising the maritime power conferred by s 71 after the person has been taken to a place in the exercise of the power conferred by s 72(4). The presence of that prohibition in s 74 bears on the content of the maritime power conferred by s 72(4) in a number of cumulative respects. Most importantly, it is s 74 which expressly addresses what will inevitably be a crucial practical issue arising from the forcible taking of a person to a place under s 72(4): the safety of the person in the place to which the person is taken. There is no reason to read its reference to safety narrowly or technically. A person cannot be safe in a place if the person is exposed there to a real risk of harm for any reason, including but not limited to a reason which would give that harm the character of persecution within the meaning of the Refugees Convention. Section 74 addresses that issue of the safety of a person in the place to which the person is forcibly taken at a particular point in time and in a particular way. The point in time is the point of disembarkation at a place, after a person has been taken to that place under s 72(4) and after detention under that provision has come to an end. If the person is not willing to disembark voluntarily at that place, the person can only be made to disembark by the maritime officer exercising the separate maritime power conferred by s 71 forcibly to place the person on land there. Section 74 makes the ability of the maritime officer there and then to place the person on land turn on the maritime officer's satisfaction, on reasonable grounds, as to the safety of a person in that place. To be able to form that prerequisite satisfaction on reasonable grounds, a maritime officer might well need to give personal consideration to the individual circumstances of the person. But that will not necessarily be so in every case. Satisfaction might well be formed on reasonable grounds as a result of the maritime officer obtaining information in other ways, including through reasonable reliance on the opinion or assurance of other persons with apparent knowledge and authority. What the combination of those aspects of the operation of s 74 demonstrates is that the Act operates through the express terms of that section to provide protection to a detained person from risk of harm at the place to which the person is taken under s 72(4). The Act does so by imposing a conditional prohibition on the exercise by a maritime officer of the separate maritime power conferred by s 71 of the Act which (in its relevant operation) applies at the point of exercise of the separate maritime power forcibly to place that person on land at that place. The Act does not do so by impliedly adopting the indirect and preliminary alternative or additional approach of imposing a condition of procedural fairness on the exercise of the maritime power involved in forcibly taking the person to that place under s 72(4). The international context Three main arguments are put on behalf of the plaintiff concerning limitations said to arise by implication by reference to the international context within which the maritime power conferred by s 72(4) of the Act necessarily falls to be exercised. One relies on that context as giving rise to a general limitation as to the place to which a person can be taken under the provision: it must be a place that the person at the time of taking has a right or permission to enter. The other indirectly from obligations under international law. limitations drawn two rely on The first of those arguments starts with the proposition, deriving from Ch III of the Constitution, that a Commonwealth statute which authorises executive detention must limit the duration of that detention to what is reasonably capable of being seen to be necessary to effectuate an identified statutory purpose which is reasonably capable of being achieved. That proposition is supported by authority299. I accept it. From that it is argued to follow that s 72(4) of the Act cannot be read as authorising a maritime officer to detain a person for the purpose of taking that person to a place outside Australia (if the person has no right to enter that place) unless there exists at the time of taking an agreement or arrangement between the Australian Government and the government of that place for that person to be received on arrival. I am unable to see why that should be so. The maritime power conferred by s 72(4) of the Act is expressed to be a composite power to detain a person and to take that person to a place. Detention of a person under the provision triggers a concomitant duty to take the detained person to a place. For continuing detention of the person to fall within the authority conferred by the provision, it must therefore be able to be said at any given time during the period of detention that a maritime officer is at that time performing that duty of taking the person to a place. Like any other statutory duty for which no time for performance is specified, the duty to take, once triggered by detention, must be completed within a reasonable time300. 299 Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1 at 33; [1992] HCA 64; Plaintiff M76/2013 v Minister for Immigration, Multicultural Affairs and Citizenship (2013) 251 CLR 322 at 369-370 [138]-[140]; Plaintiff S4/2014 v Minister for Immigration and Border Protection (2014) 88 ALJR 847 at 852-853 [25]-[29]; 312 ALR 537 at 542-544; [2014] HCA 300 Koon Wing Lau v Calwell (1949) 80 CLR 533 at 574; [1949] HCA 65. Section 72(4) makes explicit that the place to which the detained person must be taken in the performance of that duty may be any place, whether inside Australia or outside Australia. The place must be objectively identifiable at the time of taking. But the place need not be a place which is proximate to the place of detention, and it need not be a place with which the detained person has any existing connection. The choice of place from within that range of possible places is left to be made within the chain of command. The choice so made must be consistent with the legislatively identified purposes for which the maritime power conferred by the provision is available to be exercised having regard to the particular authorisation that is in force. The choice so made must also be consistent with any applicable geographical limitation on the exercise of the maritime power. Here the applicable geographical limitation is spelt out in s 41(1)(c) of the Act. Those are significant limitations which arise from the express terms of the Act. To impose by implication a limitation that there be some pre-existing right or permission for the person to enter the chosen place (and for that purpose that an agreement or arrangement between the Australian Government and the government of that place already exist) would be to introduce an additional limitation which finds no anchor in the text of the Act and which is not consonant with the scheme of the Act. Having regard to the myriad circumstances in which, and myriad geographical locations at which, the maritime power to detain and to take might fall to be exercised, it would amount to a significant constraint on operational flexibility. To impose by implication a further limitation that the choice of place could be made only once would be to introduce an even more artificial limitation. It is not a reason for saying that a person is not being taken to a place that the person was previously being taken to another place. To treat choice of place as an irrevocable election would have the potential to frustrate the legislatively identified purposes for which the maritime power is available to be exercised where an authorisation is in force, and would also have the potential to extend the period of detention. Were it to become apparent that (for any reason) the person might not be able to be safely disembarked at an initially chosen place, or were it to become apparent that taking the person to that initially chosen place would be likely to take longer than appeared reasonable, the maritime power would be unworkable were a maritime officer not able to take the person to another place. The duty to take the person to a place would remain. That duty must remain capable of performance. The detained person could not be detained indefinitely and could not be left to drift. Were the duty to take a detained person to a place within a reasonable time to be breached, the limits of the authority conferred by s 72(4) to continue to detain the person would be transgressed. That would be so were the time involved in taking the person to a place to extend beyond a reasonable period. It would not be so simply by reason of there being no existing right or permission for the person to enter the place to which the person is, or was first, in the process of being taken. The absence of an existing agreement or arrangement between the Australian Government and the government of India for the plaintiff to be received on arrival was not an impediment to maritime officers, having detained the plaintiff with the authority conferred by s 72(4), continuing validly to exercise the authority conferred by that provision in attempting to take the plaintiff to India during that period. The special case discloses no basis for concluding that the attempt initially to take the plaintiff and 156 other persons to India resulted in the overall period of the plaintiff's detention being unreasonable. It could not be said that there was no prospect of the plaintiff being safely disembarked in India. That is where the Indian flagged vessel had come from. Diplomatic negotiations were being conducted between Australia and India. There is no suggestion that they were not being conducted in good faith. The second argument put on behalf of the plaintiff starts with the uncontroversial proposition that the exercise of maritime powers over persons on board a foreign vessel in the Australian contiguous zone is subject to international law. The argument is that the law of India afforded the plaintiff no protection against being returned from India to Sri Lanka and that, in the absence of agreement between the Australian Government and the government of India that he would not be returned to Sri Lanka, his return by Australia to India would have contravened an implied limitation on the maritime power conferred by s 72(4) of the Act because it would have been in breach of Australia's obligations under each of the Refugees Convention, the International Covenant on Civil and the Political Rights and Commonwealth join issue both as to the content of the law of India and as to the content of Australia's obligations under each of those international instruments. the Torture Convention. The Minister and The unbridgeable gap in the argument is the inability to demonstrate how the statutory duty to take a detained person to a place in the exercise of the maritime power conferred by s 72(4) is conditioned on observance of Australia's obligations under any of the Refugees Convention, the International Covenant on Civil and Political Rights, or the Torture Convention. The principle that "a statute is to be interpreted and applied, as far as its language permits, so that it is in conformity and not in conflict with the established rules of international law"301 does not assist. Application of that principle to a statute conferring power on an executive officer to take action 301 Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273 at 287; [1995] HCA 20. outside Australia requires the language of that statute to be read so far as possible as empowering the officer to act in conformity with applicable international law norms, as understood within the international community302. The principle gives rise to no presumption that the statute is to be read as legislatively constraining the officer to act in conformity with international law norms as those norms might be ascertained, interpreted and then enforced by a domestic court303. Nor does the plaintiff derive assistance from the explanatory statement in the Act that "[i]n accordance with international law, the exercise of powers is limited in places outside Australia". The statement is neither a self-executing statutory limitation nor a statement of unbridled generality. It points in context to the specific geographical limitations which the Act goes on to impose on the exercise of maritime powers and which are designed to reflect Australia's rights and obligations under the Law of the Sea Convention. Nothing in the scheme of the Act supports an affirmative implication of another and more general limitation on the scope of the maritime powers which would make the validity of their exercise conditional on the observance of all applicable international law norms. The international context points rather to wider issues associated with the assertion of Australia's international law rights and compliance with Australia's international law obligations being left to be addressed by the Australian Government from time to time as the exigencies of the occasion might require. It is the Australian Government, more precisely the executive government of the Commonwealth, which is in ultimate command of the exercise of maritime powers (subject to the express and implied limitations which the Act imposes on the maritime officers who must exercise those powers) and it is the Australian Government which is responsible to other nation states in international law for their exercise. The Explanatory Memorandum accompanying the Bill for the Act, although called in aid on behalf of the plaintiff, confirmed the design of the Act as being to empower, as distinct from disable, a maritime officer exercising a maritime power to act in conformity with applicable international law norms. Referring specifically to the Torture Convention and the International Covenant on Civil and Political Rights, the Explanatory Memorandum acknowledged that circumstances might arise in which, "in order to ensure that a maritime officer who has detained a person aboard a vessel acts in accordance with Australia's 302 Cf Queensland v The Commonwealth (1989) 167 CLR 232 at 239-240; [1989] HCA 36. 303 Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1 at 33 [101]; [2003] HCA 6. See also R (Hurst) v London Northern District Coroner [2007] 2 AC 189 at 217-218 [56]. non-refoulement obligations, procedures relating the consideration of refoulement risks would need to be in place"304. That reference was to the need to develop operational procedures which would ensure that a maritime officer exercising a maritime power under the Act would act in accordance with obligations imposed on Australia by the identified international instruments. The Explanatory Memorandum contained no suggestion that compliance with those obligations was to be made a condition of a maritime officer validly exercising a maritime power under the Act. The Explanatory Memorandum went on to explain that the Bill for the Act did "not inhibit or impose any restriction on a in accordance with Australia's non-refoulement maritime officer acting obligations"305. The third of the arguments put on behalf of the plaintiff is a variation of the second. The argument appeals to legislative history to support the proposition that s 72(4) of the Act is conditioned on observance of Australia's obligations at least under the Refugees Convention. The argument starts with the observation that s 72(4) confers a maritime power on maritime officers in substantially identical terms with a power which had previously been conferred on migration officers by a provision of the Migration Act306. The argument is that, in that earlier incarnation, the power to detain and take was implicitly conditioned on observance of Australia's obligations under the Refugees Convention. That implicit limitation, it is then said, was implicitly carried over when the power was reproduced in s 72(4) of the Act and is confirmed by references in the Act to the Migration Act which show that the two are to work together as an integrated scheme. In support of so much of that argument as posits that the earlier incarnation of the power in the Migration Act was conditioned on observance of Australia's obligations under the Refugees Convention, reliance is placed by way of analogy on Plaintiff M61/2010E v The Commonwealth307 and Plaintiff M70/2011 v Minister for Immigration and Citizenship308. It is sufficient to note that at the forefront of the reasoning in both of those cases was the overarching 304 Australia, Senate, Maritime Powers Bill 2012, Replacement Explanatory Memorandum at 6. 305 Australia, Senate, Maritime Powers Bill 2012, Replacement Explanatory Memorandum at 6. 306 Section 245F(9), which was amended by items 37-39 of Sched 4 to the Maritime Powers (Consequential Amendments) Act 2013 (Cth). 307 (2010) 243 CLR 319; [2010] HCA 41. 308 (2011) 244 CLR 144; [2011] HCA 32. contextual observation that the Migration Act, as it then existed, proceeded on the assumption that Australia owed obligations to individuals under the Refugees Convention309. That assumption had earlier been described in NAGV and NAGW of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs310 as "false but legislatively required". The textual basis for that assumption was removed by an amendment to s 36 of the Migration Act in 2012311, before the enactment of the Act and the simultaneous consequential amendment of the provision of the Migration Act which was the precursor to s 72(4)312. There is no basis for considering that the erroneous statutory assumption, having been corrected in the Migration Act, was implicitly picked up and carried over to the Act. The result is that the exercise of the maritime power conferred by s 72(4) is not conditioned on observance of Australia's obligations under the Refugees Convention, the International Covenant on Civil and Political Rights or the Torture Convention. That result makes it unnecessary to form a view either as to the content of Indian law or as to the content of the obligations imposed on Australia under those international instruments. Conclusion At all times between 29 June and 27 July 2014, the plaintiff was lawfully detained under s 72(4) of the Act. The detention of the plaintiff having been so authorised by statute, the plaintiff's claim for damages for wrongful imprisonment cannot succeed. The questions reserved are set out in the reasons for judgment of other members of the Court and need not be repeated. As to those questions, I would answer each of them in the manner proposed by French CJ. 309 Plaintiff M61/2010E v The Commonwealth (2010) 243 CLR 319 at 339 [27]; Plaintiff M70/2011 v Minister for Immigration and Citizenship (2011) 244 CLR 310 (2005) 222 CLR 161 at 172 [27]; [2005] HCA 6. 311 Migration Legislation Amendment (Regional Processing and Other Measures) Act 2012 (Cth). 312 Items 37-39 of Sched 4 to the Maritime Powers (Consequential Amendments) Act 2013 (Cth). 394 KEANE J. The plaintiff is a Sri Lankan national of Tamil ethnicity. While he was a passenger on a vessel travelling from India to Australia, that vessel ("the Indian vessel") was intercepted by an Australian border protection vessel ("the Commonwealth ship") in Australia's contiguous zone313. The plaintiff did not hold a visa entitling him to enter Australia. Had the plaintiff reached Australia, he would thereby have contravened s 42(1) of the Migration Act 1958 (Cth) ("the Migration Act"), which provides that "a non-citizen must not travel to Australia without a visa that is in effect." The Indian vessel was detained by officers of the Commonwealth. While it was detained, it became unseaworthy; and the plaintiff was transferred, along with the other passengers on the Indian vessel, to the Commonwealth ship. The Commonwealth ship sailed towards India pursuant to a decision made by the National Security Committee of Cabinet ("the NSC"), which included the Minister for Immigration and Border Protection ("the Minister"). At this time no assurance was available from India that the plaintiff would be permitted to disembark there. When the Commonwealth ship was near India, the NSC decided that it was not practicable to discharge the plaintiff and his companions in India within a reasonable time. The Commonwealth ship was then instructed to sail to the Australian Territory of the Cocos (Keeling) Islands. Upon the plaintiff's arrival, he was taken into immigration detention. The plaintiff claims to be a refugee within the meaning of Art 1 of the Refugees Convention314 ("the Convention") on the basis that he has a well-founded fear of persecution in Sri Lanka. He also claims that he is a person in respect of whom Australia owes non-refoulement obligations under Art 33(1) of the Convention, Art 7 of the International Covenant on Civil and Political Rights315 ("the ICCPR") and Art 3 of the Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment316. 313 Section 8 of the Maritime Powers Act 2013 (Cth) provides that "contiguous zone" has the same meaning as in the United Nations Convention on the Law of the Sea (1982); [1994] ATS 31, namely, a "zone [not extending] beyond 24 nautical miles from the baselines from which the breadth of the territorial sea is measured" (Art 33). 314 The Convention relating to the Status of Refugees (1951) as amended by the Protocol relating to the Status of Refugees (1967). 315 [1980] ATS 23. 316 [1989] ATS 21. The plaintiff has brought proceedings in the original jurisdiction of this Court claiming that his detention on the Commonwealth ship while being taken to India was unlawful. He seeks declarations that the defendants acted unlawfully in causing him to be detained and taken to a place or places other than Australia. He also claims damages for false imprisonment. The plaintiff's claim and the defences raised by the defendants assume that the governing law is Australian law. The tort of false imprisonment is committed when a person's freedom of bodily movement is restrained without lawful justification. The person who actually imposes the restraint and the person who directs the other to do so may be liable for the tort317. At issue in the present case is whether the defendants' direction to restrain the plaintiff was lawfully justified. The plaintiff contended that his detention aboard the Commonwealth ship while on the voyage to India was unlawful. In this regard, he advanced a number of arguments. First, he argued that, when the decision was made to take him to India, no arrangement had been made with India to receive him. Because he was not being taken to a place where he could be safely disembarked, so he argued, he was not being "taken to a place" within the meaning of s 72(4) of the Maritime Powers Act 2013 (Cth) ("the Act"). The plaintiff also argued that the defendants, in attempting to take him to India, failed to have proper regard to his claim to refugee status, so that the decision to detain him for the purposes of that voyage was not an exercise of the power conferred by s 72(4) of the Act. It was also said that the maritime officers responsible for detaining him and taking him towards India made their decision to do so at the dictation of the NSC and without exercising an independent discretion as to where he should be taken. Finally, the plaintiff argued that what he called the "taking decision" was void because the maritime officers on the Commonwealth ship failed to afford him procedural fairness in taking him towards India without asking him about his circumstances or wishes. Pursuant to r 27.08.1 of the High Court Rules 2004 (Cth), the parties agreed in stating questions of law for the opinion of the Full Court. The determination of these questions of law depends, in large part, on the effect of s 72 of the Act. It is convenient, therefore, to summarise the material provisions of the Act at this stage. The facts of the case may then be set out in greater detail 317 Dickenson v Waters Ltd (1931) 31 SR (NSW) 593. in order to facilitate an understanding of the discussion of the arguments agitated by the plaintiff. The Act Section 3 of the Act provides that it binds the Crown. Section 5 of the Act provides that the "Act does not limit the executive power of the Commonwealth." Section 7 of the Act summarises the statutory scheme relevantly as follows: "This Act provides a broad set of enforcement powers for use in, and in relation to, maritime areas. Most of these powers are set out in Part 3. The powers can be used by maritime officers to give effect to Australian laws and international agreements and decisions. The following are maritime officers: Customs officers; (b) members of the Australian Defence Force; (c) members of the Australian Federal Police; other persons appointed by the Minister. An authorisation is necessary to begin the exercise of powers in relation to a vessel ... The only exceptions are the exercise of ... powers to ensure the safety of persons. Once an authorisation is in force, maritime officers can exercise powers for a range of purposes. In accordance with international law, the exercise of powers is limited in places outside Australia." Section 104(1) of the Act defines the expression "maritime officer" to include officers of Customs, members of the Australian Defence Force ("the ADF") and members of the Australian Federal Police ("the AFP"). Part 2 of the Act deals with the authorisation of the exercise of so-called "maritime powers". In that regard, s 16(1) of the Act provides, relevantly: "For the purposes of authorising the exercise of maritime powers in relation to a vessel ... each of the following is an authorising officer: the most senior maritime officer who is in a position to exercise any of the maritime powers in person; the most senior member or special member of the Australian Federal Police who is in a position to exercise any of the maritime powers in person; the most senior maritime officer on duty in a duly established operations room; in command of a Commonwealth ship or the person Commonwealth aircraft from which the exercise of powers is to be directed or coordinated; a person appointed in writing by the Minister." It is common ground that the officer who authorised the exercise of maritime powers in relation to the Indian vessel was the commander of the Commonwealth ship and was an "authorising officer" within the meaning of s 16(1)(d) of the Act. Section 18 of the Act provides, relevantly: "An authorising officer may authorise the exercise of maritime powers in relation to a vessel ... for the purposes of administering or ensuring compliance with a monitoring law." Section 8 of the Act provides that the Migration Act is a "monitoring law". Section 42(1) of the Migration Act provides, subject to exceptions which are not presently relevant, that "a non-citizen must not travel to Australia without a visa that is in effect." It follows that, if the plaintiff had succeeded in travelling to Australia, he would have contravened s 42(1) of the Migration Act. On that basis, the authorisation of the exercise of maritime powers in relation to the Indian vessel was valid under s 18 of the Act. in accordance with Division 4 of Pt 2 of the Act identifies the purposes for which maritime powers may be exercised. Under s 31, a maritime officer "may exercise maritime powers β¦ the contravention" of an Australian law or "administer or ensure compliance with the monitoring law". Section 32 empowers a maritime officer to exercise maritime powers to "prevent any contravention of an Australian law that the officer suspects, on reasonable grounds, the vessel β¦ to be involved in", and to "ensure compliance with any monitoring law". the authorisation" to "investigate Division 5 of Pt 2 of the Act deals with the geographical limits upon the exercise of maritime powers under the Act. Section 41(1) of the Act provides, relevantly: "This Act does not authorise the exercise of powers in relation to a foreign vessel at a place between Australia and another country unless the powers are exercised: in the contiguous zone of Australia to: investigate a contravention of [an] ... immigration ... law prescribed by the regulations that occurred in Australia; or prevent a contravention of such a law occurring in Australia; to administer or ensure compliance with a monitoring law that applies to foreign vessels, or persons on foreign vessels, in that place". The Indian vessel was a "foreign vessel" within the meaning of s 41(1). Part 3 of the Act sets out the "maritime powers" that are conferred by the Act. In that regard, s 69 of the Act provides, relevantly: "(1) A maritime officer may detain a vessel β¦ (4) A vessel detained under subsection (1) is a detained vessel." Section 71 provides that a "maritime officer exercising powers in relation to a vessel β¦ may place or keep a person in a particular place on the vessel". The powers that may be exercised in respect of persons on a detained vessel are set out in s 72 of the Act, which provides, in relation to a person who "a maritime officer reasonably suspects was on a vessel β¦ when it was detained": "(4) A maritime officer may detain the person and take the person, or cause the person to be taken: to a place in the migration zone; or to a place outside the migration zone, including a place outside Australia. For the purposes of taking the person to another place, a maritime officer may within or outside Australia: place the person on a vessel ...; or restrain the person on a vessel ...; or remove the person from a vessel". Four observations may be made here about the terms of s 72(4). As will be seen, the arguments advanced by the plaintiff proceed upon a different view of the operation of s 72(4). First, s 72(4) confers a power to "detain and take" a person to a place: it does not confer a power to detain which must invariably be exercised separately from, and as a precondition to the exercise of, the power to take the person to a place. The purposes for which the compound power is conferred by s 72(4) are not identified in that provision; they are to be found in ss 31 and 32. To read s 72(4) so that the power to detain must be exercised separately from the removal of a person to a place is to lose sight of the point that the power conferred by s 72(4) is to effect the compulsory movement of a person for the purposes of the Act, including for the purpose of ensuring compliance with the Migration Act. Secondly, the power which s 72(4) confers on a maritime officer operates in relation to a person reasonably suspected of having been on a vessel when it was detained pursuant to s 69(1). The action which s 72(4) authorises is necessarily apt to be contrary to the wishes and interests of the person affected by it. In these circumstances, the principle of statutory construction that a statute said to authorise interference with common law rights must state that intention expressly or by words of necessary intendment318 is of little assistance. Section 72(4) expressly authorises the detention and movement of a person who was reasonably suspected of having been on a detained vessel. The legislature has directed its attention squarely to the question whether the liberty of such a person should be invaded in those circumstances, and has determined that such a person may be moved against his or her wishes. As was said by this Court in Australian Securities and Investments Commission v DB Management Pty Ltd319: 318 Lee v New South Wales Crime Commission (2013) 251 CLR 196 at 202-203 [3], 264-265 [171]-[173], 307-311 [307]-[314]; [2013] HCA 39. 319 (2000) 199 CLR 321 at 340 [43]; [2000] HCA 7. "It is of little assistance, in endeavouring to work out the meaning of parts of [a legislative] scheme, to invoke a general presumption against the very thing which the legislation sets out to achieve." Thirdly, the authorising officers described in s 16 and maritime officers in ss 7 and 31, respectively, are officers in a chain of command within the Executive government of the Commonwealth. While authorising officers may authorise the exercise of maritime powers, they themselves must act, as it is agreed they acted in this case, under the ultimate direction of the civilian Executive government of the Commonwealth. In contrast with s 69(2) (and s 74), s 72(4) does not condition the exercise of the power which it confers on a maritime officer upon the beliefs or opinions of the maritime officer. Moreover, s 72(4) does not require or authorise a maritime officer to make a decision which, by taking account of any claim by a detainee, is contrary to a direction from a superior in the chain of command. The Executive government of the Commonwealth derives its authority from ss 61 and 64 of the Constitution. The provisions of s 72 of the Act assume the existence of that authority and facilitate its effective exercise; they do not purport to supplant it. Section 72(4) does not deprive the Executive government of its power to give directions to subordinate officers within the chain of command in accordance with its view of the public interest. That said, any constraints upon the exercise of the power conferred by s 72(4) of the Act must be observed in the implementation of a decision by the Executive government, where the facility provided by s 72(4) is the instrument by which that decision is implemented. Fourthly, the authority conferred on a maritime officer by s 72(4) is to "detain the person and take the person, or cause the person to be taken" to a place in the migration zone or outside the migration zone including a place outside Australia. Section 72(4) authorises the compulsory movement of a detainee to one of the places described in s 72(4)(a) and (b). The compulsory movement thus contemplated is from the place of first detention to another place. That other place must be identified for the purpose of moving the detainee: no one suggests that a detainee may be detained on an aimless and indefinite voyage. But the language of s 72(4) does not suggest that the compulsory movement of the detainee to an identified place may begin only if safe disembarkation at that place is assured at the time of the commencement of the voyage. In this regard, it is significant that s 74 expressly contemplates that safe disembarkation may not be possible at the completion of the voyage. Section 74 provides: "A maritime officer must not place or keep a person in a place, unless the officer is satisfied, on reasonable grounds, that it is safe for the person to be in that place." Four observations may be made here about the terms of s 74. First, the obligation imposed on a maritime officer by s 74 is in terms which make it clear that the maritime officer must personally satisfy himself or herself that a detained person is disembarked in a place where the detainee will be safe. Whatever the maritime officer's orders from his or her superiors in the Executive government may be, the maritime officer is obliged to satisfy himself or herself, on reasonable grounds, that it is safe for the detained person to disembark at that place. The contrast in this regard between s 72(4) and s 74 tells against the contention that s 72(4) requires a maritime officer to satisfy himself or herself that obedience to superior orders for the taking of a detainee to a place is appropriate before acting upon those orders. Secondly, the temporal aspect to the operation of s 74 is important in that it expressly contemplates that a compulsory movement of a detainee has taken place whereby the detainee has been brought to a place of possible disembarkation. It is at that point in time that the personal obligation of the maritime officer to be satisfied as to the safety of the disembarkation of the detained person arises. Thirdly, the circumstance that s 74 is directed to a time after a compulsory movement of a detainee has occurred indicates that a "taking decision" is not an irreversible decision to be made once and for all. If it is not practicable to land a detainee safely at a place to which the detainee has been moved, another destination must then be chosen. That this should be so is hardly surprising given the unpredictability of the circumstances of such voyages. Fourthly, ss 72(4) and 74 observe a distinction between compulsorily moving a detainee to a place and placing the detainee at that place. As already noted, s 74 expressly contemplates that a detainee may have been taken to a place where safe disembarkation is not then practicable. The express provision made by s 74 in relation to the circumstances in which the compulsory movement of a detainee may not be concluded by disembarkation tells against a reading of s 72(4) whereby the power conferred by it is conditioned upon the satisfaction of the maritime officer β or his or her superiors β that a safe disembarkation of the detainee at the initially preferred destination is assured at the beginning of the voyage. If assurance of this kind is not necessary, then, if it is accepted that the power conferred by s 72(4) must be exercised reasonably, the question is whether the belief that safe disembarkation would be possible was reasonably held when the movement commenced. And what is reasonable in this regard is necessarily a question of fact having regard to all the circumstances of the case. Factual background The parties agreed upon a number of facts to enable the Court to determine the questions of law referred for its determination. The statement of the factual background which follows is taken from those facts. In June 2014, the plaintiff and 156 other persons departed from India on board an Indian flagged vessel (the Indian vessel) that was headed to Australia. Neither the plaintiff, nor any other person on board the Indian vessel, had any legal right to enter Australia. On 29 June 2014, the Indian vessel was intercepted by the Commonwealth ship in Australia's contiguous zone, approximately 16 nautical miles from Christmas Island. The officer in command of the Commonwealth ship formed a reasonable suspicion that the Indian vessel was involved in a contravention of the Migration Act and authorised the exercise of maritime powers in relation to the Indian vessel under the Act. A maritime officer from the Commonwealth ship detained all the persons on board the Indian vessel. The Indian vessel became unseaworthy by reason of a mechanical failure. As a result, all persons from the Indian vessel were transferred to the Commonwealth ship, where they remained under detention. On 1 July 2014, the NSC decided that all persons from the Indian vessel should be taken to India. At the time that decision was made, no agreement or arrangement existed between Australia and India allowing the plaintiff or the other persons from the Indian vessel to be taken to India. The decision of the NSC was made in accordance with a general policy of the Australian government to intercept and remove from Australian waters any person without a visa seeking to enter Australia by boat. The decision was not made on the basis of any adverse information personal to the plaintiff or any other persons from the Indian vessel. The plaintiff was asked questions concerning his personal and biographical details by the maritime officers on the Commonwealth ship; but he was not asked why he left Sri Lanka, why he left India, whether he had claims to be a person in respect of whom Australia owes non-refoulement obligations, or where he wanted to go. The maritime officers on the Commonwealth ship were aware of the policy of the Executive government that anyone seeking to enter Australia by boat without a visa will be intercepted and removed from Australian waters. The plaintiff was not informed of any matter concerning his detention or movement and he was not provided with an opportunity to be heard on any matter concerning his detention or movement. Between 1 July 2014 and about 23 July 2014, maritime officers on the Commonwealth ship implemented the decision of the NSC. In particular, between 1 July 2014 and about 10 July 2014, the Commonwealth ship travelled toward India; and between about 10 July 2014 and about 22 July 2014, the Commonwealth ship waited near India. The duration of the wait was influenced by weather conditions which did not favour disembarkation, the time required to conduct diplomatic negotiations (including at a ministerial level) between India and Australia to facilitate the disembarkation of the plaintiff and his companions in India, and the steps taken to re-provision the Commonwealth ship. On or about 23 July 2014, the Minister decided that it would not be practicable to complete the process of taking the plaintiff and the other persons from the Indian vessel to India within a reasonable period of time. The reasons for that decision are unexplained in the materials before this Court. The Minister decided that the plaintiff and his companions should be taken to the Territory of the Cocos (Keeling) Islands, within Australia's migration zone. The Commonwealth ship arrived at the Cocos (Keeling) Islands on 27 July 2014. From that point, the plaintiff and the other persons from the Indian vessel were detained pursuant to s 189(3) of the Migration Act. There is no suggestion that the plaintiff had any reason to fear persecution if he had disembarked in India. India is not a party to the Convention. It is, however, a party to the ICCPR. There is no suggestion that the plaintiff was at risk of being returned to Sri Lanka by Indian authorities had he disembarked in India. It is also common ground that at no time did the defendants seek to cause the plaintiff to be taken to Sri Lanka. The questions for determination Questions 1, 2 and 3 of the Special Case involve several arguments advanced by the plaintiff which may conveniently be considered together under the rubric of whether the plaintiff's detention and taking to India was authorised by law as an exercise of either s 72(4) of the Act or the non-statutory executive power of the Commonwealth. Questions 4 and 5 raise a number of arguments which may be considered together under the rubric of whether the failure to afford the plaintiff an opportunity to be heard in relation to the exercise of power under either s 72(4) of the Act or the non-statutory executive power of the Commonwealth made the decision to take him to India unlawful. Question 6 is concerned with the plaintiff's asserted entitlement to recover damages if the earlier issues are resolved in his favour. Was the plaintiff's detention authorised under s 72(4) of the Act or the non-statutory executive power of the Commonwealth for the purpose of taking the plaintiff to India? Detention under the Act The plaintiff argued that it was unlawful for him to be detained for the purpose of being taken to India. The plaintiff's argument was that what he described as the "taking decision" was invalid. That was said to be so for three broad reasons: there was no assurance that the plaintiff would be allowed to disembark in India; there was no legal guarantee of non-refoulement by India; and the maritime officer in command of the Commonwealth ship did not exercise an independent discretion to take the plaintiff to India. These arguments may now be considered in turn. No assurance of disembarkation in India The plaintiff contended that s 72(4) could not be construed as authorising detention for the purpose of taking a person to a particular place unless permission to discharge the person at that place had first been obtained from the authorities at that place. It was said that because at the time of the decision to take the plaintiff to India it was not certain that it would be practicable to effect his disembarkation there, the "taking decision" was not authorised by s 72(4) of the Act. Because the taking decision was invalid, his detention consequent upon that decision was said to be unlawful. That an attempt was made to obtain India's permission to discharge the plaintiff in India after the NSC had decided he should be taken there was said to be beside the point. The plaintiff argued that s 72(4) contemplates that a particular place to which the person is to be taken must be chosen by the maritime officer at the time of making the decision to take. The plaintiff analysed s 72(4) as providing for a two-step process of decision-making on the part of the maritime officer: first, there must be a decision "to detain", and then there must be a decision "to take". On the plaintiff's analysis of s 72(4), the decision "to take" a detainee to a designated destination is one which can only be made once and for all: after a "taking decision" is made, the place chosen by the maritime officer cannot be varied at the officer's discretion. It will be apparent that the understanding of s 72(4) on which the plaintiff's argument depends is substantially at odds with the analysis of s 72(4) set out above. The plaintiff's argument proceeds on the basis that s 72(4) is concerned with "a taking decision" by a maritime officer; but this reasoning is unsound in at least two respects. First, s 72(4) does not confer a power to detain to be exercised independently of the power to take: rather, s 72(4) confers a power compulsorily to move a person who was on a detained vessel from the place of detention to another place. Secondly, the exercise of that power does not necessarily depend upon a decision by the maritime officer as to whether or not the power should be exercised: the power may be exercised in compliance with an order from a superior. As noted earlier, the parties agreed in the Special Case that the decision that the plaintiff should be taken to India was made by the Minister in consultation with the other members of the NSC, not by the maritime officers on board the Commonwealth ship. The maritime officers who gave effect to the decision in this case were acting within the chain of command on which ss 7 and 16 of the Act are predicated. The decision that the plaintiff should be taken to India was not made under s 72(4); and, just as s 72(4) was not a source of the decision-making power exercised by the Executive government, so it was not a source of constraint on the power of the Executive government by the NSC to decide to give effect to the general policy of the Australian government to intercept and remove from Australian waters any person without a visa seeking to enter Australia by sea. Of course, the implementation of that decision by means of the facility afforded by s 72(4) was subject to such constraints as are expressed by, or necessarily implicit in, s 72(4); but the power conferred by s 72(4) was exercisable for the purposes of ensuring compliance with the Migration Act. Action to prevent a contravention of s 42 of the Migration Act was within the scope of that purpose. The general policy given effect by the decision of the NSC was not at odds with that purpose. The defendants accepted that detention and taking under s 72(4) for the purposes identified in ss 31 and 32 of the Act must be effected within a reasonable time. That concession was rightly made, consistently with the principle of interpretation that ordinarily applies in cases where no period is specified in a statute for doing an act authorised or required by the statute320. As Dixon J said in Koon Wing Lau v Calwell321: "What is a reasonable time will depend upon all the facts". The plaintiff's argument is, in effect, that the question of what is a reasonable time for the completion of the compulsory movement of a detainee under s 72(4) is determined in his favour by only two facts: first, that his disembarkation in India was not assured when the decision was made to take him there; and, second, a voyage to Australian territory offered the shortest route to a safe place of disembarkation. To read s 72(4) as requiring that a detainee may only be taken to a place decided upon, once and for all, at the outset of the voyage is to adopt an 320 Koon Wing Lau v Calwell (1949) 80 CLR 533 at 573-574, 590; [1949] HCA 65. 321 (1949) 80 CLR 533 at 574. interpretation which not only strains the language in which s 72(4) is cast, and ignores the significance of s 74; it also insists upon a level of inflexibility in the practical exercise of the power which one would be slow to attribute to the legislation. Further, it is not necessary to adopt that interpretation to avoid the unpalatable conclusion that s 72(4) permits indefinite detention. That conclusion is avoided by an appreciation that the power is exercisable for the purposes stated in ss 31 and 32 of the Act, and by the application of the ordinary rule that a power must be exercised within a reasonable time having regard to the purpose for which it was conferred and the circumstances in which it falls to be exercised. What is a reasonable time within which the exercise of the power conferred by s 72(4) is to be completed is not to be determined simply by the adoption of the destination best suited to minimise the duration of the detained person's detention. In particular, s 72(4) does not require that the power to detain and take must be exercised to discharge a detained person at the closest point of land. That would produce the absurd result that the Executive government would have been obliged, through its maritime officers, to facilitate the completion of the plaintiff's travel to Australia β in contravention of s 42 of the Migration Act β merely because that was the shortest distance to land. Once it is accepted that the decision as to the plaintiff's destination was not required to be determined by the location of the nearest point of land, then it can be seen that time spent in attempting to identify another place where the plaintiff might be safely discharged is not necessarily time wasted unreasonably. Moreover, a decision to proceed to India, in the expectation that the plaintiff could safely be discharged there, could be said to be a reasonable attempt to avoid an unnecessary prolongation of time spent by the plaintiff in detention at sea. While an assurance from the Indian authorities had not been given that the plaintiff would be allowed to disembark, there is no suggestion that the NSC had been informed by the Indian authorities that the plaintiff would not be allowed to disembark. It might, in some circumstances, reasonably be thought that the movement of a detainee to a safe place should not be delayed until some form of binding confirmation was provided by the receiving country that the detainee will be accepted by it. It is obviously undesirable that persons should remain at sea for longer than necessary while waiting for confirmation to be forthcoming. In addition, the circumstance that a person comes from a country where the person is unlikely to be persecuted is another consideration that might reasonably warrant exploring the possibility of landing the person in that country in preference to taking the person to Australia. In such circumstances, a reasonable course might involve taking a person toward a place of expected disembarkation while negotiations with the authorities at that place are underway, regardless of the uncertainty as to whether the receiving country will accept the person. Whether the level of uncertainty is such as to make that course unreasonable may itself raise questions of fact and degree. In these circumstances, the facts agreed in the Special Case do not warrant the conclusion that the period of the plaintiff's detention at sea was unreasonably extended by the decision of the NSC to attempt to place him in India so as to vitiate the lawful authority of the defendants to detain him. Non-refoulement The plaintiff contended that s 72(4) should be construed to preclude the taking of a person to a place that is not legally obliged to protect the person from persecution on the grounds set out in Art 1 of the Convention. The plaintiff's case was focused upon Art 33(1) of the Convention, by which Australia is obliged not to: "expel or return ('refouler') a refugee in any manner whatsoever to the frontiers of territories where his life or freedom would be threatened on account of his race, religion, nationality, membership of a particular social group or political opinion." The plaintiff argued that his being taken to India was contrary to Australia's non-refoulement obligations, in that India was not a party to the Convention. Judicial authority in Australia, the United Kingdom and the United States of America suggests that a state's obligations under the Convention arise only with respect to persons who are within that state's territory322. The plaintiff does not accept that this body of authority is correct, but it is unnecessary to come to a conclusion on that point. Whatever the true effect of the Convention may be, the terms of the Migration Act are clear. Australian courts are bound to apply Australian statute law "even if that law should violate a rule of international law"323. International law does not form 322 Minister for Immigration and Multicultural Affairs v Khawar (2002) 210 CLR 1 at 15 [42]; [2002] HCA 14; R (European Roma Rights) v Prague Immigration Officer [2005] 2 AC 1 at 29-31 [15]-[18]; Sale v Haitian Centers Council Inc 509 US 155 323 Polites v The Commonwealth (1945) 70 CLR 60 at 69, 74, 75, 78, 79, 81; [1945] HCA 3; Koowarta v Bjelke-Petersen (1982) 153 CLR 168 at 204; [1982] HCA 27; Kartinyeri v The Commonwealth (1998) 195 CLR 337 at 384 [97]; [1998] HCA 22. part of Australian law until it has been enacted in legislation324. In construing an Australian statute, our courts will read "general words β¦ subject to the established rules of international law" unless a contrary intention appears from the statute325. In this case, there is no occasion to invoke this principle of statutory construction. The terms of the Act are specific. They leave no doubt as to its operation. The power conferred by s 72(4) is not subject to observance of Art 33(1) of the Convention. As a matter of municipal law, the power to "detain and take" a person to a place is simply not limited in the way for which the plaintiff argues. The plaintiff sought to rely upon the decision of this Court in Plaintiff M70/2011 v Minister for Immigration and Citizenship (Malaysian Declaration Case)326. The Malaysian Declaration Case was concerned with the interpretation of the provisions of the Migration Act which authorised officers of the Executive government to take non-citizens who had entered Australia unlawfully to a country in respect of which a declaration had been made by the Minister under s 198A(3) of the Migration Act. A declaration was made in respect of Malaysia, which was not a party to the Convention. The Court's conclusion that Malaysia was not a country capable of being declared resolved a question as to the proper construction of s 198A(3) of the Migration Act. No such question arises in this case. The plaintiff's argument appears to involve the notion that the benefits of the Migration Act, which are available to a non-citizen within Australia, are also available to a non-citizen outside Australia. The terms of the Migration Act do not support that notion327. In addition, as will be explained, the power of the Executive under the common law to prevent the entry into Australia of a non-citizen without a visa who is outside Australia, which is the power under which the relevant decision was made in this case, is not abrogated by the Migration Act. That is so, notwithstanding that the non-citizen might wish to make a claim for refugee status under the Migration Act. 324 Dietrich v The Queen (1992) 177 CLR 292 at 305, 360; [1992] HCA 57; Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273 at 286-287; [1995] HCA 20; Victoria v The Commonwealth (Industrial Relations Act Case) (1996) 187 CLR 416 at 480; [1996] HCA 56. 325 Polites v The Commonwealth (1945) 70 CLR 60 at 77, 79; Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1 at 38; [1992] HCA 64. 326 (2011) 244 CLR 144; [2011] HCA 32. 327 Plaintiff M47/2012 v Director-General of Security (2012) 251 CLR 1 at 101-102 [260]-[261], 184-187 [506]-[514]; [2012] HCA 46. The plaintiff also placed reliance on this Court's decision in Plaintiff M61/2010E v The Commonwealth ("Plaintiff M61")328. This decision does not assist his argument. Plaintiff M61 was concerned with the operation of provisions of the Migration Act in respect of non-citizens who were in Australia, albeit unlawfully. This Court held that the exercise of power under s 46A or s 195A of the Migration Act must be procedurally fair and in conformity with the law. As French CJ and Kiefel J observed in Plaintiff S10/2011 v Minister for Immigration and Citizenship329, the decision in Plaintiff M61 applied only to non-citizens within Australia who were able to invoke the provisions of s 46A(2) of the Migration Act. In the present case, what the plaintiff refers to as the "taking decision" was not made under the Migration Act. Whether it was within the executive power of the Commonwealth is a different question. In any event, the circumstance that India is not a party to the Convention does not mean that the plaintiff was at risk of refoulement to Sri Lanka. The issue is a practical one. Australia's non-refoulement obligations under the Convention are satisfied if the country that the plaintiff is taken to offers effective protection as a matter of fact, whether or not that country is party to the same treaties as Australia. In Patto v Minister for Immigration and Multicultural Affairs, French J (as his Honour then was) explained330 the scope of the non-refoulement obligation in the Convention thus: "Return of the person to a third country will not contravene Art 33 notwithstanding that the person has no right of residence in that country and that the country is not a party to the Convention, provided that it can be expected, nevertheless, to afford the person claiming asylum effective protection against threats to his life or freedom for a Convention reason." As noted above, it was not suggested that the plaintiff was at a practical risk of refoulement by India to Sri Lanka. Acting under dictation? The plaintiff's third contention under this rubric was that his being taken towards India was unlawful because the maritime officers who took him there 328 (2010) 243 CLR 319; [2010] HCA 41. 329 (2012) 246 CLR 636 at 652 [42]; [2012] HCA 31. 330 Patto v Minister for Immigration and Multicultural Affairs (2000) 106 FCR 119 at were acting pursuant to an unlawful policy or, alternatively, under the dictation of the NSC. The plaintiff argued that the maritime officers who took the plaintiff towards India acted under the dictation of the NSC in that they failed to determine themselves whether taking the plaintiff to India was appropriate. The plaintiff argued that a repository of a power must turn his or her own mind to the exercise of power, rather than act at the direction or behest of another. It was said that the maritime officers who took the plaintiff towards India failed to do that in this case, in that they simply implemented the decision of the NSC without independently considering whether it was appropriate to do so. Once again, the plaintiff's argument is founded upon a misunderstanding of the operation of s 72(4) of the Act. As explained above, a maritime officer who acts in accordance with superior orders is not acting contrary to the requirements of s 72(4). There may be cases where a maritime officer will have no alternative but to make the choice of destination for himself or herself; but that possibility may be put to one side in this case because the maritime officer who had detained the plaintiff was obliged to obey the orders of the Executive government which were communicated through the chain of command. As noted above, in such circumstances the terms of s 72(4), in contrast to the terms of s 74, do not suggest that a maritime officer given such an order is obliged, or even permitted, to exercise an independent discretion in such a case; rather, the terms of s 72(4) facilitate the execution by the maritime officer of orders received through the chain of command. The chain of command in Australia's naval and military forces ensures those forces remain under civilian control. Only the clearest language could require military officers to exercise powers independently of superior civilian orders. Section 72(4) does not exhibit any such intention. As noted above, it contemplates that maritime officers will exercise their powers according to the exigencies of the existing command structure within which maritime officers operate. The observation by French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ in Haskins v The Commonwealth331 in relation to members of the ADF is equally applicable to Customs officers and members of the AFP: "Obedience to lawful command is at the heart of a disciplined and effective defence force." For the sake of completeness, it should be noted that the plaintiff advanced an argument in his written submissions that the defendants purported to exercise the powers conferred by s 72(4) for the improper purpose of generally deterring other non-citizens from seeking to enter Australia without a visa. The defendants objected to this argument being entertained by the Court on the basis 331 (2011) 244 CLR 22 at 47 [67]; [2011] HCA 28. that it was outside the terms of the Special Case. That objection should be upheld. There is no foundation in the agreed facts for such an argument. In particular, there is no foundation for an inference that the plaintiff was being singled out for harsh treatment to make a point to others. Detention pursuant to non-statutory executive power Because of the view I have taken in relation to the scope of authority conferred on a maritime officer by s 72(4) of the Act, it is strictly unnecessary to decide the questions raised in relation to the scope of the non-statutory power of the Commonwealth. Nevertheless, it is desirable to note the deficiencies in the plaintiff's arguments on Question 3. The plaintiff advanced three arguments with respect to the exercise of non-statutory executive power to prevent non-citizens from entering Australia. He argued, first, that such a power does not exist; secondly, that if it does, it was abrogated by the Act; and thirdly, that even if it were not abrogated, the power did not permit the plaintiff to be detained for the purpose of being taken to India. These arguments may now be addressed in turn. A want of executive power The plaintiff contended that the Commonwealth lacks non-statutory executive power to prevent non-citizens entering Australia and to detain them for that purpose. This contention cannot be accepted. It is well-settled that the power of the Executive government under the common law to deny entry into Australia of a non-citizen such as the plaintiff, including by compulsion, is an incident of Australia's sovereign power as a nation. Shortly after the creation of the Commonwealth, in Robtelmes v Brenan, Griffith CJ said332 that "there can be no doubt" as to the correctness of the following observations of the Judicial Committee of the Privy Council in Attorney-General for Canada v Cain333: "One of the rights possessed by the supreme power in every State is the right to refuse to permit an alien to enter that State, to annex what conditions it pleases to the permission to enter it, and to expel or deport 332 Robtelmes v Brenan (1906) 4 CLR 395 at 400; [1906] HCA 58. See also Re Minister for Immigration and Multicultural Affairs; Ex parte Te (2002) 212 CLR 162 at 170 [21]; [2002] HCA 48; Plaintiff M47/2012 v Director-General of Security (2012) 251 CLR 1 at 154 [402]. 333 [1906] AC 542 at 546. See also Ah Yin v Christie (1907) 4 CLR 1428 at 1431; [1907] HCA 25. from the State, at pleasure, even a friendly alien, especially if it considers his presence in the State opposed to its peace, order, and good government, or to its social or material interests". In Robtelmes v Brenan, O'Connor J concluded334 that the Commonwealth Parliament, having the power to exclude aliens, may "leave the question of the mode or place of deportation to the discretion of the government." That the observations of the Privy Council in Attorney-General for Canada v Cain remained an authoritative statement of the law was recognised in the judgment of Brennan, Deane and Dawson JJ in Chu Kheng Lim v Minister for Immigration335. More recently, in Ruddock v Vadarlis French J (as his Honour then was) said336: "the Executive power of the Commonwealth, absent statutory extinguishment or abridgement, would extend to a power to prevent the entry of non-citizens and to do such things as are necessary to effect such exclusion. This does not involve any conclusion about whether the Executive would, in the absence of statutory authority, have a power to expel non-citizens other than as an incident of the power to exclude. The power to determine who may come into Australia is so central to its sovereignty that it is not to be supposed that the Government of the nation would lack under the power conferred upon it directly by the Constitution, the ability to prevent people not part of the Australia community, from entering." That power was "sufficient to authorise the barring of entry by preventing a vessel from docking at an Australian port and adopting the means necessary to achieve that result."337 That power necessarily includes the power to do all things necessary to exercise the power, including physically restraining non-citizens from entering Australia338. That the position is different in relation to non-citizens who are actually within Australia, as stated in Chu Kheng Lim v 334 Robtelmes v Brenan (1906) 4 CLR 395 at 422. 335 (1992) 176 CLR 1 at 29-30. 336 Ruddock v Vadarlis (2001) 110 FCR 491 at 543 [193]. 337 Ruddock v Vadarlis (2001) 110 FCR 491 at 544 [197]. 338 Attorney-General for Canada v Cain [1906] AC 542 at 546; Ruddock v Vadarlis (2001) 110 FCR 491 at 544 [197]. Minister for Immigration339, does not suggest that Ruddock v Vadarlis was wrongly decided. It is settled that the executive power referred to in s 61 of the Constitution includes powers necessary or incidental to the execution and maintenance of the laws of the Commonwealth340. Moreover, it is not in doubt that the executive power referred to in s 61 of the Constitution extends to the making of war and peace and the acceptance of obligations between nations even though these matters may involve extra-territorial action by Australian forces341. Given that it is clear that the executive power extends thus far, recognition that it extends to the compulsory removal from Australia's contiguous zone of non-citizens who would otherwise enter Australia contrary to the Migration Act can hardly be controversial342. It is also to be noted that the power exercised by the Executive to instruct maritime officers to take the plaintiff to India was not exercised in respect of a vessel going about its lawful occasions, but in respect of a vessel in Australia's contiguous zone carrying non-citizens who were, as a matter of undisputed fact, seeking to enter Australia contrary to s 42 of the Migration Act. If the Indian vessel had completed its voyage, those operating it would have contravened the provisions of s 229 of the Migration Act (which proscribes the carriage to Australia of non-citizens without visas), and s 233A or s 233C (which proscribe forms of people smuggling). The power of the Executive government was exercised in the pursuit of a policy which accords with the purposes of ss 31 and 32 of the Act to ensure compliance with Australian law by preventing a contravention of s 42 of the Migration Act. It may be accepted, for the sake of argument, that the exercise of executive power to prevent the entry into Australia of a non-citizen without a visa was subject to constraints under public law principles which ensure that 339 (1992) 176 CLR 1 at 19. 340 R v Kidman (1915) 20 CLR 425 at 440-441; [1915] HCA 58; Barton v The Commonwealth (1974) 131 CLR 477 at 498; [1974] HCA 20; Davis v The Commonwealth (1988) 166 CLR 79 at 109-110; [1988] HCA 63; Re Residential Tenancies Tribunal (NSW); Ex parte Defence Housing Authority (1997) 190 CLR 410 at 464; [1997] HCA 36; Williams v The Commonwealth (2012) 248 CLR 156 at 184 [22], 190 [31]; [2012] HCA 23. 341 Barton v The Commonwealth (1974) 131 CLR 477 at 505; Pape v Federal Commissioner of Taxation (2009) 238 CLR 1 at 61-63 [130]-[131], 89 [233]; [2009] HCA 23. 342 Moore, Act of State in English Law, (1906) at 93-95. administrative action is lawful. In particular, it may be accepted that, even though the plaintiff had no right to enter Australia, a decision to exercise a greater level of compulsion than was necessary to prevent his entry into Australia would be unlawful at common law. However, as noted above, the facts agreed in the Special Case do not support the conclusion that the movement of the plaintiff towards India involved the use of force in excess of what was necessary to ensure that the plaintiff did not complete his travel to Australia. The plaintiff had come from India, where there was no suggestion that he was unsafe. No other destination, other than Australia, is identified in the Special Case as a place to which the plaintiff might safely be taken. There was no suggestion that the decision that the plaintiff should be taken to India was made with a view to prolonging his detention beyond that necessary to return him safely to a place other than Australia. There was no suggestion that any attempt to negotiate an agreement with the Indian authorities to permit the plaintiff to disembark in India was so devoid of prospects as to be a waste of time. To decide, in these circumstances, that the best way to shorten the duration of the plaintiff's detention, other than by bringing him directly to Australia, was to take him to India and to seek to negotiate an agreement that he be received at that destination cannot be said to involve use of the power of the Executive government in excess of what was necessary to prevent the plaintiff's entry into Australia. Has the power been abrogated? The plaintiff contended that, if the Court were to hold that a non-statutory executive power to prevent persons from entering Australia does exist, then that power was abrogated by the Act and the Migration Act, both of which were said to operate as part of a single statutory scheme, displacing any non-statutory executive power with respect to the exercise of power concerning immigration into Australia. In Ruddock v Vadarlis, the Full Court of the Federal Court of Australia held343, by majority, that the Migration Act did not abrogate executive power in this regard. The plaintiff argued that that case was wrongly decided. That argument should be rejected. Powers exercisable by the Executive government under the common law are not limited by international law obligations not incorporated into domestic 343 (2001) 110 FCR 491 at 514 [94], 545 [202]. law344. The provisions of an international treaty to which Australia is a party do not form part of Australian law unless those provisions have been validly incorporated into our municipal law by an Act of the Commonwealth Parliament345. In point of constitutional principle, an international treaty made by the Executive government can operate as a source of rights and obligations under our municipal law only if, and to the extent that, it has been enacted by the Parliament. It is only the Parliament that may make and alter our municipal law346. In Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam347, McHugh and Gummow JJ observed that: "in the case law a line has been drawn which limits the normative effect of international obligations upon discretionary what are unenacted decision-making under powers conferred by statute and without specification of those obligations β¦ [S]uch obligations are not mandatory relevant considerations attracting judicial review for jurisdictional error." Under the Migration Act, the protection obligations imposed on the Executive government are afforded to non-citizens who are within Australian territory. The authorities suggest that this limitation is consistent with the circumstance that the protection obligations imposed by the Convention concern rights to be afforded to persons within the territory of Contracting States348. 344 R (Bancoult) v Foreign Secretary (No 2) [2009] AC 453 at 490 [66], 507 [116]; New South Wales v The Commonwealth ("the Seas and Submerged Lands Case") (1975) 135 CLR 337 at 493-494; [1975] HCA 58. 345 Chow Hung Ching v The King (1948) 77 CLR 449 at 478; [1948] HCA 37; Bradley v The Commonwealth (1973) 128 CLR 557 at 582; [1973] HCA 34; Simsek v Macphee (1982) 148 CLR 636 at 641-642; [1982] HCA 7; Koowarta v Bjelke-Petersen (1982) 153 CLR 168 at 211-212, 224-225; Kioa v West (1985) 159 CLR 550 at 570; [1985] HCA 81; Dietrich v The Queen (1992) 177 CLR 292 at 305; Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273 at 286-287, 298, 303-304, 315; J H Rayner Ltd v Department of Trade and Industry [1990] 2 AC 418 at 500. 346 Simsek v Macphee (1982) 148 CLR 636 at 641-642. 347 (2003) 214 CLR 1 at 33 [101]; [2003] HCA 6. 348 Minister for Immigration and Multicultural Affairs v Khawar (2002) 210 CLR 1 at 15 [42]; R (European Roma Rights) v Prague Immigration Officer [2005] 2 AC 1 at 29-31 [15]-[18]; Sale v Haitian Centers Council Inc 509 US 155 at 183, 187 However that may be, neither the Act nor the Migration Act limits the power of the Executive government to prevent the entry into Australia of non-citizens without visas who claim to be refugees, and the consequent engagement of the Migration Act. The continued existence of the power of the Executive under the common law to use compulsion to prevent the unauthorised entry into Australia of non-citizens outside Australia is consistent with the provisions of the Migration Act, in particular, s 42. The power did not permit detention The plaintiff's third contention was that any non-statutory executive power to prevent persons from entering Australia which may still exist does not extend to detaining the plaintiff and taking him to India since the power is subject to the same constraints as apply to the exercise of power under s 72(4) of the Act, and those constraints were infringed. For the reasons already given in relation to s 72(4) of the Act, this contention should be rejected. Finally under this rubric, it should be noted that the sooner the plaintiff was brought into Australia, the sooner he would have been lawfully detained by reason of the operation of s 189 of the Migration Act. On no view of the facts would the plaintiff have been at liberty during the period in which he claims to have been falsely imprisoned. It may well be that the circumstances of the plaintiff's detention at sea were a greater hardship than they would have been had he been detained on land in Australia; yet the fact remains that the plaintiff could not have been at liberty on land in Australia at any time material to his case. The extent to which this difficulty affects the plaintiff's case will be considered in the discussion of Question 6. Was the plaintiff's detention subject to an obligation to afford the plaintiff procedural fairness? The plaintiff contended the Commonwealth ship were obliged to give the plaintiff an opportunity to be heard in respect of the exercise of any statutory or (if it exists) non-statutory power to take the plaintiff to a place outside Australia. the maritime officers aboard that Procedural fairness in the exercise of power under the Act The plaintiff's argument under this heading took as its starting point the proposition that the exercise of power under s 72(4) of the Act had the capacity to prejudice his right to liberty. The exercise of that power was said, therefore, to be subject to the provision of procedural fairness. The plaintiff cited the decision of this Court in Saeed v Minister for Immigration and Citizenship, in which French CJ, Gummow, Hayne, Crennan and Kiefel JJ said349: "In Annetts v McCann350 it was said that it could now be taken as settled that when a statute confers power to destroy or prejudice a person's rights or interests, principles of natural justice regulate the exercise of that power351. Brennan J in Kioa v West352 explained that all statutes are construed against a background of common law notions of justice and fairness. His Honour said: '[W]hen the statute does not expressly require that the principles of natural justice be observed, the court construes the statute on the footing that "the justice of the common law will supply the omission of the legislature". The true intention of the legislation is thus ascertained.'" The plaintiff argued that the Act did not express an intention to dispense with the observance of procedural fairness as a condition of the exercise of power under s 72(4). Indeed, the plaintiff asserted that provisions of the Act indicate that observance of procedural fairness was required. The plaintiff submitted that prior to the making of any decision under s 72(4) as to where the plaintiff was to be taken, the defendants were required, at a minimum, to: notify him that consideration was being given to the possible exercise of power under s 72(4); and give him an opportunity to be heard as to that proposed exercise of power, including whether he was a person in respect of whom Australia owes non-refoulement obligations and whether his safety might be threatened if taken to a particular place. The plaintiff relied here upon s 74, which, as noted above, requires a maritime officer not to "place" or "keep" a person in a particular place unless he or she is satisfied on reasonable grounds that it is "safe for the person to be in that place". That provision was said to contemplate that maritime officers would allow persons under their control to comment on whether it would be safe to 349 (2010) 241 CLR 252 at 258 [11]; [2010] HCA 23. 350 (1990) 170 CLR 596; [1990] HCA 57. 351 Annetts v McCann (1990) 170 CLR 596 at 598 per Mason CJ, Deane and 352 (1985) 159 CLR 550 at 609 (citation omitted). keep them in a particular place. The position was said to be the same with respect to the exercise of power under s 72(4), which was said to contemplate that maritime officers would allow persons to comment on whether it would be safe to take them to a particular place. The short answer to the plaintiff's arguments under this rubric is that they proceed upon an erroneous understanding of the operation of s 72(4) of the Act in the circumstances of this case. Here, there was no occasion under the statute for a maritime officer to consult with the plaintiff as to the destination to which he was to be compulsorily removed. Once again, the plaintiff's contentions depend upon a misplaced focus on s 72(4) as the source of the decision to take him to India. Section 72(4) confers a power upon maritime officers to be exercised within the context of the chain of command. Even if it might be the case that in some circumstances a maritime officer would be obliged to make a choice under s 72(4) on his or her own initiative, it does not contemplate that such officers may decide whether or not to comply with superior orders, which pre-empt any such initiative. Accordingly, the maritime officers came under no obligation to afford the plaintiff an opportunity to be heard as to his preferred destination. The maritime officers on the Commonwealth ship had no decision-making function in the circumstances of this case, and, even if they did, they had no authority to disobey the orders they had been given. Hence, there was no occasion for them to question the plaintiff about the matters referred to in the Special Case. The plaintiff's argument fails to recognise the significance of the differences between s 72(4) and s 74 adverted to earlier in these reasons. It may be that if the maritime officers on the Commonwealth ship were minded to place the plaintiff on Indian soil, observance of s 74 of the Act would have obliged them to make inquiry of the plaintiff as to whether he would be "safe" in India. But that occasion did not arise. The foregoing is sufficient to dispose of this aspect of the plaintiff's case, but two further difficulties with the plaintiff's argument may be noted briefly. First, a decision to take a detained person to a particular country is likely to involve difficult issues of international relations. It is hardly to be supposed that such a decision would be left to a maritime officer upon hearing where a detainee would like to be taken. Secondly, the plaintiff had no right under Australian law to enter Australia. Section 72(4) operated indifferently to any preference on the part of the plaintiff to come to Australia rather than to some other place. Procedural fairness in the exercise of non-statutory executive power Once again, because of the view I have taken in relation to the sufficiency of the authority conferred on the maritime officers who dealt with the plaintiff under s 72(4) of the Act, it is strictly unnecessary to answer Question 5, which raises this issue. It is, however, desirable to note some of the difficulties in the plaintiff's arguments. The plaintiff contended that the exercise of non-statutory executive power was, at least, capable of being conditioned by procedural fairness. The plaintiff argued that the key question therefore was whether there was any reason to conclude that procedural fairness did not apply to the exercise of non-statutory executive power in this case. The plaintiff argued that there was not. The defendants submitted that, if it were accepted that the exercise of prerogative power was amenable to judicial review353, the power to exclude non-citizens from entering the territory of Australia is unsuited to examination by the courts. This is because it involves consideration of sensitive political and public policy considerations involving matters of defence, border protection and international relations. The exercise of the executive power to prevent entry into Australia is not limited by an implied obligation to afford persons procedural fairness for the same reasons that s 72(4) of the Act is not so limited. As a matter of municipal law, the Commonwealth may exercise its sovereign power to prevent a person who has no right to enter Australia from doing so. The plaintiff, as a non-citizen, had no common law right to enter Australia354. Nor was the plaintiff entitled to be brought to Australia given the provisions of s 42 of the Migration Act. These considerations, together with the absence of an occasion for the maritime officers on the Commonwealth ship to give independent consideration to the plaintiff's wishes in relation to his destination, lead to the conclusion that the plaintiff was not denied any common law entitlement to have his wishes considered as a condition of the exercise of the power of the Executive government to order that he be taken to India with a view to his disembarkation there. Question 6: the entitlement to damages Given that the plaintiff's contentions on the other issues have been rejected, the answer to Question 6 must be "No". It is, therefore, strictly unnecessary to determine the issues raised by Question 6 because the issues of 353 Jarratt v Commissioner of Police (NSW) (2005) 224 CLR 44 at 65 [69]; [2005] HCA 50. 354 Ruddock v Vadarlis (2001) 110 FCR 491 at 519-521 [109]-[125]; Zines, "The Inherent Executive Power of the Commonwealth", (2005) 16 Public Law Review liability on which they depend should be resolved against the plaintiff. But since those issues were argued by both sides, and because it is undesirable that the difficulties which confront a claim of this kind should be overlooked, it is desirable to note those difficulties. In R (Lumba) v Secretary of State for the Home Department355 ("Lumba's Case"), the Supreme Court of the United Kingdom held, by majority, that where a claimant had been directly and intentionally imprisoned by a public authority empowered to detain the claimant, the public authority bore the burden of showing lawful justification for the imprisonment. The discharge of that burden required the public authority to prove that the power to detain was exercised lawfully; and a failure in that regard meant that, by reason of the breach of principles of public law in relation to the exercise of the power to detain, an action at common law for damages for false imprisonment would be made out356. A differently constituted majority held, however, that if the power to detain had been exercised lawfully in accordance with public law principles, it was inevitable that the claimant would have been detained, and the claimant would therefore be entitled to recover only nominal damages357. In the present case, the issue is as to the duration of lawful detention. If the plaintiff had been brought directly to Australia, he would have been detained immediately under s 189 of the Migration Act. In those circumstances, the plaintiff would have been in lawful detention at all material times, whether the authority for that detention derived from s 72(4) of the Act or s 189 of the Migration Act. In this scenario, there would be no need for a lawfully made executive decision to justify the plaintiff's ongoing detention. The present case differs from Lumba's Case in this respect. This difference might well leave the plaintiff in a worse position than the claimant in Lumba's Case, so far as a claim for damages for unlawful imprisonment is concerned, in that even nominal damages would not be recoverable. The questions for determination The questions stated by the parties for determination by the Court should be answered as follows: 356 Lumba's Case [2012] 1 AC 245 at 274-276 [64]-[72], 280 [88]-[89], 303 [175], 308 357 Lumba's Case [2012] 1 AC 245 at 281-284 [95]-[101], 301 [169], 316 [222], 319 Did s 72(4) of the Maritime Powers Act authorise a maritime officer to detain the plaintiff for the purpose of taking him, or causing him to be taken, to a place outside Australia, being India: (a) whether or not the plaintiff would be entitled by the law applicable in India to the benefit of the non-refoulement obligations; in implementation of a decision by the Australian Government that the plaintiff (and others on the Indian vessel) should be taken to India without independent consideration by the maritime officer of whether that should be so; (c) whether or not, prior to the commencement of the taking of the plaintiff to India, an agreement or arrangement existed between Australia and India concerning the reception of the plaintiff in India? Answer: Section 72(4) of the Maritime Powers Act 2013 (Cth) authorised the plaintiff's detention at all times from 1 July 2014 to 27 July 2014. This question is not otherwise answered. (b) Yes. (c) Yes. Did s 72(4) of the Maritime Powers Act authorise a maritime officer to: take the steps set out in paragraph 20 in implementing the decision to take the plaintiff to India; detain the plaintiff for the purposes of taking the plaintiff to India? Answer: (a) Yes. (b) Yes. Did the non-statutory executive power of the Commonwealth authorise an officer of the Commonwealth to: take the steps set out in paragraph 20 for the purpose of preventing the plaintiff from entering Australia; detain the plaintiff for the purposes of taking the plaintiff to India? Answer: (a) Unnecessary to answer. (b) Unnecessary to answer. 4. Was the power under s 72(4) of the Maritime Powers Act to take the plaintiff to a place outside Australia, being India, subject to an obligation to give the plaintiff an opportunity to be heard about the exercise of that power and, if so, was that obligation breached? Answer: 5. Was any non-statutory executive power of the Commonwealth to take the plaintiff to a place outside Australia, being India, for the purpose of preventing the plaintiff from entering Australia, subject to an obligation to give the plaintiff an opportunity to be heard about the exercise of that power and, if so, was that obligation breached? Answer: Unnecessary to answer. 6. Was the detention of the plaintiff unlawful at any, and if so what period, from 1 July 2014 to 27 July 2014 and if so [is he] entitled to claim damages in respect of that detention? Answer: 7. Who should pay the costs of this Special Case? Answer: The plaintiff. 8. What if any order should be made to dispose of the proceeding or for the conduct of the balance (if any) of the proceeding? Answer: The proceeding should be dismissed with consequential orders to be determined by a single Justice of this Court. |
HIGH COURT OF AUSTRALIA Matter No A198/2003 APPELLANT AND THE QUEEN Matter No A202/2003 RESPONDENT CHISEKO MARK MKOKA APPELLANT AND THE QUEEN RESPONDENT Mkoka v The Queen [2003] HCA 74 10 December 2003 A198/2003 and A202/2003 ORDER In each matter: Appeal dismissed. On appeal from Supreme Court of South Australia Representation: B J Powell QC with R B Harrap for the appellant in A198/2003 (instructed by Harrap & Stokes) S W Tilmouth QC with I L White for the appellant in A202/2003 (instructed by McGee Solicitors) P J L Rofe QC with J P Pearce for the respondent in both matters (instructed by Director of Public Prosecutions (SA)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Mkoka v The Queen Criminal law β Murder β Appeals against conviction β Directions to jury concerning statutory murder β Whether trial judge erred in directing jury that presentation of a knife in the course of an armed robbery amounted to an "act of violence" for the purposes of s 12A, Criminal Law Consolidation Act 1935 (SA) β Whether misdirection gave rise to miscarriage of justice β Causation β Whether reference to "but for" test of causation constituted a misdirection β Whether presentation of a knife in the course of an armed robbery could be regarded as a substantial cause of death of deceased β Application of proviso in circumstances where not possible to tell whether jury's verdict of guilty of murder was based on statutory murder or common law murder. Criminal law and procedure β Trial for murder β Appeals against conviction β Whether High Court should allow appellants to raise for the first time a new point concerning the adequacy of the trial judge's directions on causation as an ingredient of the offence β Proviso β Whether in circumstances of established misdirection on ingredients of the offence of murder the conviction of the appellants was inevitable β Test for application of the proviso. Words and phrases β "act of violence". Criminal Law Consolidation Act 1935 (SA), ss 12A, 353(1). GLEESON CJ, GUMMOW, HAYNE, CALLINAN AND HEYDON JJ. The appellants were tried jointly, in the Supreme Court of South Australia, before Debelle J and a jury, and convicted of murder, wounding with intent to do grievous bodily harm, and attempted armed robbery. They were sentenced to lengthy terms of imprisonment. A co-accused, Carlos Escalante, pleaded guilty to murder, wounding with intent to do grievous bodily harm, and attempted armed robbery. Each appellant appealed unsuccessfully to the South Australian Court of Criminal Appeal. For reasons that are presently immaterial, the appeals were heard by differently constituted courts1. The appeal to this Court concerns only the convictions of murder, and, as will appear, the grounds of appeal are relatively confined. The facts The events giving rise to the charges occurred at Stepney, an inner suburb of Adelaide, in the early hours of Saturday 11 December 1999. The two appellants, with three other men (Carlos Escalante, Raylon Smith and Christian Sinclair), were in a stolen car. They agreed to find someone to "roll" for a mobile telephone. The appellant Mkoka agreed in cross-examination that this meant robbery involving force if necessary. The five men were travelling away from the city, along North Terrace towards its intersection with Fullarton Road. As the car approached the intersection, Sinclair, who was in the front passenger seat, noticed two men, Hillam and Bourne, walking in the same direction along the north western footpath of North Terrace. Hillam was speaking on a mobile telephone. The car stopped a short distance behind Hillam and Bourne. The two appellants and Escalante left the car. The appellant Mkoka was armed with a cue ball in a stocking (described as a "cosh"). The appellant Arulthilakan had with him in the car a knife wrapped in cardboard. That knife came into the possession of Mkoka. Arulthilakan said that he took the knife, still wrapped in cardboard, from his jacket pocket, intending to leave it on the back seat of the car. Mkoka asked if he could take the knife with him. Arulthilakan agreed. In the case of the appellant Mkoka, R v CMM (2002) 81 SASR 300; in the case of the appellant Arulthilakan, R v NJA [2002] SASC 113. Escalante was also carrying a knife. It was not in dispute that this was the knife that was used to stab Hillam and Bourne. The blade of Escalante's knife was about 18 centimetres long. Its maximum width was 2.8 centimetres. Mkoka was aware that Escalante regularly carried a knife, and he knew Escalante was carrying a knife on this occasion. Arulthilakan said that he knew Escalante had a knife, and, of course, he had given Mkoka his own knife. The two appellants and Escalante accosted Hillam and Bourne, who kept walking. They crossed the intersection diagonally towards a hotel, which was closed. The three men followed. Escalante made aggressive demands for the mobile phone. Hillam told the three men to go away. Escalante rushed at him. Hillam punched Escalante and then felt a blow to his side. He looked down and saw that he had been stabbed. Hillam sustained four wounds. Two were relatively minor: to the outside of the left knee and to the left leg. Two were substantial: one to the left chest, and another to the left flank. He sought help from a passing taxi driver, entered the taxi, and asked the driver to take him to hospital. Meanwhile, Mkoka had moved towards Bourne when Escalante attacked Hillam. He dropped the knife he had been given by Arulthilakan and put the cosh in his right hand. He dropped the knife in order to get a better grip on the cosh. He said that "obviously a fight had started and [he] thought [Bourne] might go and help [Hillam] in beating up [Escalante]". Mkoka said Bourne came towards him. There was a struggle between the two. Mkoka said he swung the cosh at Bourne and hit him somewhere in the upper body. There followed a period of grappling between the two, during which Mkoka attempted to use the cosh. At some point in the struggle, Escalante intervened and stabbed Bourne. Mkoka and Bourne fell to the ground, still struggling. Mkoka then struck Bourne, who released his grip. Mkoka kicked him in the upper body. Mkoka said he did not know of the stabbing of Bourne until they were back in the car. Hillam gave evidence that when he looked back from the taxi he saw Bourne in the middle of the intersection being kicked and punched by all three men. Bourne's death resulted from a stab wound to the right side of his chest, between the fifth and sixth ribs. Expert evidence explained that the knife caused a puncture wound in the right atrium of Bourneβs heart and the resultant blood loss would have caused death within a few minutes. There were other lacerations on his scalp consistent with blows from a blunt object. There was no dispute at trial that the fatal blow was struck immediately before Bourne fell to the ground. There was no specific evidence as to the total time that elapsed from when the appellants and Escalante alighted from the car until the fatal stabbing of Bourne. In his summing up, the trial judge, without objection, suggested that it appeared from the evidence to have been a period of at most about two or three minutes. At the trial, the appellants sought to make out a case of self-defence. The trial judge declined to leave self-defence to the jury. In both cases, the Court of Criminal Appeal upheld that decision. The case of self-defence was hopeless, and the argument was not pursued in this Court. The central issue in the present appeal concerns the complicity of the appellants in the stabbing by Escalante of Bourne. In that respect, the defence case was that the stabbing of Bourne by Escalante was an independent act on his part, undertaken in the heat of an affray, and after any attempt at robbery had ceased. Plainly, that case was rejected by the jury. The prosecution case of murder The prosecution case against each appellant on the charge of murder was left to the jury on three alternative bases: the first two related to murder at common law; the third related to what was described as statutory murder. The grounds of appeal in this Court are confined to the directions given concerning statutory murder. In relation to common law murder, the directions proceeded upon the basis that the prosecution had to establish that Escalante stabbed Bourne, intending either to kill him, or at least to inflict grievous bodily harm. On that assumption, the first basis on which murder was left was described as joint enterprise. The prosecution case was that the two appellants were acting jointly with Escalante in pursuit of a common unlawful purpose (armed robbery) which could involve inflicting at least grievous bodily harm. The jury were told that it was necessary for the prosecution to prove that the scope of the agreement or understanding between the three was such that the crime committed by Escalante was either in their actual contemplation or, alternatively, it was in their contemplation that it was possible that one of them might, in the course of the attempted robbery, use a knife to cause grievous bodily harm. The second basis was that the appellants aided and abetted Escalante in the murder of Bourne. In that connection, the jury were told that the prosecution had to prove knowledge that Escalante intended to stab Bourne, and assistance or encouragement in the commission of the crime. It is unnecessary to go into further detail concerning the case of common law murder. In the alternative, the jury were invited to consider statutory murder. As counsel for the appellants submitted, the possibility that the jury convicted on the Criminal Law this basis cannot be disregarded. Consolidation Act 1935 (SA) provides: Section 12A of "12A. A person who commits an intentional act of violence while acting in the course or furtherance of a major indictable offence punishable by imprisonment for ten years or more (other than abortion), and thus causes the death of another, is guilty of murder." Armed robbery is a major indictable offence of the kind referred to in s 12A. The directions on statutory murder The trial judge began by telling the jury that the crime of statutory murder does not require an intention on the part of the accused to cause death or grievous bodily harm; the crime is committed if death results from an intentional act of violence perpetrated while acting in the course of or in furtherance of an armed robbery. He said the first question for the jury to consider was whether the act of violence relied on by the prosecution was committed in the course of an armed robbery. The case for the appellants was that, by the time any use of weapons occurred, they and Escalante were resisting a counter-attack from Hillam and Bourne, and defending themselves. At least theoretically, therefore, there was an open question as to whether the act of violence (said to be the presentation of a knife by Escalante) occurred in the course of the robbery. The defence claimed that, by the time the alleged act of violence had occurred, the attempted robbery was over. The trial judge continued: "However, if you are satisfied of that fact, you must then consider three other questions. The first is, was there an act of violence? Ladies and gentlemen, I direct you, as a matter of law, that the introduction of the knife into this affray, for the purpose of threatening or intimidating, or for the purpose of stabbing another, is an act of violence. It constitutes a form of assault. If you find that Escalante presented the knife for the purpose of threatening or intimidating Hillam, or for the purpose of stabbing him, that constitutes an act of violence. As you will hear in a moment, that is the act of violence upon which the prosecution relies. The next matter is whether the act of violence was intentional. You may think that the presenting of the knife and use of it requires a deliberate and intentional act. It is not something which inadvertently or accidentally occurs. It is for you to determine whether the knife was intentionally presented and used. The next question is whether the act of violence caused Bourne's death. Ladies and gentlemen, the law takes a commonsense view about causation. It looks to see if there is a causal link or a causal connection between one act and another. Did one act cause another to occur? The act does not have to be the sole cause of the other act occurring. It is enough if it is a substantial cause. It is enough if it is shown that, but for that one event, all the other events would not have happened as they did. It is the Crown case that if the knife had not been presented and used at the commencement of this attempted armed robbery, the death of Bourne could not have occurred. It says that, having presented the knife, Escalante used it to stab Hillam and then to stab Bourne. The Crown says he was attacking both for the purpose of the armed robbery, or for the purpose of extricating themselves from it. The defence says there is no possible causal link between the presenting of the knife at that early stage in the robbery, and the later stabbing of Bourne. It says that Escalante had become very aggressive, that he was acting quite independently of the others, and that he made a separate decision to stab Bourne. You will decide, ladies and gentlemen, whether you are satisfied that the presenting of the knife at the very outset of this attempted armed robbery caused Bourne's death. If you are satisfied the act of violence was committed whilst all the accused were in the course of the attempted armed robbery, or extricating themselves from it, there are two alternative routes by which it is open for you to find these accused guilty of statutory murder. Again, it is either by the route of joint enterprise, or by the route of aiding and abetting. As to joint enterprise, if you are satisfied that all of the accused had the common purpose that they would roll or rob Hillam, and for the purpose of their joint enterprise they would be armed with knives and a billiard ball, that they would use the knives and billiard ball if necessary to achieve their purpose in the course of the attempted armed robbery, the knives or billiard ball would be used to threaten or intimidate the victims. I realise that sounds very similar to the concept of joint enterprise in relation to common law murder, but it is different in that it is not necessary that any of the accused had an intention to cause death, or to cause grievous bodily harm, or contemplated as part of the joint enterprise the possibility that the use of the knives could result in an intentional inflicting of grievous bodily harm. That is the difference between them. The case for both the Crown and the defence on this issue are very similar to those I have already outlined in relation to common law murder. As to joint enterprise, the prosecution says that all of this occurred in the course of the armed robbery, or whilst they were endeavouring to extricate themselves from it and remove themselves from the scene. The prosecution says that this all plainly occurred in the course of the armed robbery. Resistance, says the Crown, is always a real likelihood if you are going to commit an armed robbery. They met that resistance. Thus, they were inextricably involved in this attempt and had to escape from it. Thus, says the Crown, it is plain that all of this occurred in the course of the commission of the armed robbery, and that the initial presentation of the knife for its use to threaten or to stab Hillam was a cause of the death of Bourne. The defence case, of course, is that by this time the robbery was all over, if it had ever started. The defence case is that it was quite unrealistic to suppose that by the time these events occurred the robbery β there was any commission of an attempted armed robbery. I remind you of what I have already said in relation to that in the context of either common law murder or the intent to cause grievous bodily harm. The defence also says that in no respect is it fair to say or to conclude that the initial presenting of this knife at the early stage of attempted armed robbery, even if it was on foot, caused Bourne's death. Escalante was behaving, they said, quite aggressively and independently. Similarly, in the case of the question whether they aided or abetted Escalante in the commission of the offence, this is much the same as in relation to the earlier offences. The prosecution case is that they did aid and abet, and that they both willingly engaged in the attempted armed robbery, and that indicates their intent. The defence case is that there was a fight, each defending the other; they had no idea that knives would be used in the fight. Mkoka, indeed, had thrown his away. All they were doing was acting in their own defence and in defence of each other." The trial judge returned to the matter of causation at the end of his summing-up, when he said: "You have to be satisfied that there is a causal link between the introduction of the knife into the affray, and the death of Bourne. It is the Crown case that if the knife had not been presented and used at the commencement of this attempted armed robbery, the death of Bourne could not have occurred. The Crown says that having introduced the knife into the affray, Escalante used it to stab Hillam, and then to stab Bourne. The Crown says he was attacking both Hillam and Bourne for the purpose of the armed robbery. The defence, I repeat, says there is absolutely no possible causal link between the presenting of the knife at this early stage of the affray, this early introduction of it into the affray, and the stabbing of Bourne, which, on any view, had to have occurred later. It says that Escalante had become very aggressive. It says not even Hillam saw the knife being presented. It says that Escalante's aggression was such that he was acting quite independently, and that he made quite a separate decision to stab Bourne ... so says the defence, there is no causal link between the introduction of this knife at the beginning of this affray, and the later stabbing of Bourne." To put into context the references, in explaining the defence case, to an "early stage of the affray", and what occurred "later", it is to be remembered that the entire episode occupied about two or three minutes. In relation to the directions on causation, to which no objection was taken, it is to be noted that what the trial judge said about the subject was, of course, closely related to the competing cases as fought at the trial. The defence case on causation was that Escalante's use of his knife was not part of the armed robbery which all three men had undertaken but was, rather, an independent act of aggression on his part in response to the violence that erupted when Hillam and Bourne resisted their pursuers. The prosecution case was that Escalante's use of his knife was part of the armed robbery, and that the response of Hillam and Bourne was foreseeable and, indeed, the very kind of contingency for which the attackers had prepared by arming themselves with knives and a cosh. Those were the competing views of the facts to which the concept of causation had to be applied. The grounds of appeal Two criticisms are now made of the directions set out above. The first criticism relates to the first paragraph in the directions quoted and, in particular, to the statement that, as a matter of law, the presentation of the knife by Escalante constituted an act of violence. The respondent acknowledges that it would have been better if the learned judge had directed the jury that it was open to them to find as a fact that the presentation of the knife constituted an act of violence, or that the presentation of the knife was capable of being regarded as an act of violence. Nevertheless, the respondent points to the whole of what was said in the paragraph, and to the hypothesis upon which the direction "as a matter of law" was given. The jury were told that, if they found that Escalante presented the knife for the purpose of threatening or intimidating Hillam, or for the purpose of stabbing him, then that constituted an act of violence. In a report to the Court of Criminal Appeal the trial judge said: "The issue whether the presenting of the knife was an act of violence was argued as a question of law by all counsel. No one objected to the manner in which it was left to the jury." Whether an act is an act of violence is a question of fact. There may be a question of law as to whether an act is capable of being regarded as an act of violence. The judge invited the jury to find as a fact whether Escalante presented his knife for the purpose of threatening, or intimidating, or stabbing the owner of the mobile telephone. On the assumption that they made such a finding of fact, the jury were told that, as a matter of law, that conduct involved an act of violence. They should have been told that, as a matter of law, the conduct was capable of being regarded as an act of violence. In the circumstances, however, it makes little difference. How else might such conduct have been regarded? The complaint of the appellants is that the direction foreclosed an issue. In a practical sense, there was no real issue. If the jury made the finding of fact which formed the condition upon which the direction of law was given, it was not reasonably open to them to come to any conclusion other than that the presentation of the knife was an act of violence. The directions went on to outline the defence case, and to remind the jury of the arguments advanced against the conclusion of fact for which the prosecution contended. If, however, that conclusion were drawn, then the further conclusion that what was involved was an act of violence was inescapable. Technically, there was a misdirection, but it gave rise to no miscarriage of justice. The second criticism of the directions was not advanced either at trial or in the Court of Criminal Appeal. It relates to what was said concerning causation. The ground of appeal is expressed as follows: "... [the] directions: withdrew from the jury's consideration the issue of whether the production of the knife by [Escalante] in the circumstances indicated by the trial judge, [was] a substantial or significant cause of the death of Bourne ...; had the effect as a matter of law of directing the jury that 'but for that one event', the death of Bourne would not have happened; and/or (iii) withdrew from the jury's consideration the issue whether the production of the knife in the circumstances indicated by the trial judge, was no more than a negligible or de minimis cause of the death of Bourne, and hence not causative in law." In argument, counsel for the appellants directed attention particularly to the concluding sentence of the third of the paragraphs from the directions quoted above. They submitted that a proper direction would have been that causation was a matter of fact for the jury, to be determined, applying common sense, but with an appreciation that they were deciding legal responsibility and that the act for which the accused was responsible must be a substantial or significant cause in a common sense and practical way, but need not be the sole cause. When those submissions are compared with what the trial judge said, it is evident that the principal difference is in the sentence earlier mentioned, and in particular, in the reference to a "but for" approach to causation. The respondent agreed with the appellants as to what was described as "the status of the 'but for' test in civil and criminal law" and contended that, if there was a misdirection, there was no miscarriage of justice. Reference was made on both sides to the judgments in this Court in Royall v The Queen2. in which The context the question of causation arose required consideration of whether an intentional act of violence (the presentation by Escalante of a knife for one of the purposes earlier mentioned) in the course or furtherance of an armed robbery was a cause of the death of Bourne. The defence case was that Escalante was acting, not in the course of the planned robbery, but independently in response to the conduct of Hillam and Bourne, the attempted robbery having come to an end. (1991) 172 CLR 378. In Ryan v The Queen3, Windeyer J, dealing with the common law concept of felony murder, said4: "There was a time when a man was guilty of murder, and punished accordingly, if while doing any unlawful act he happened to kill another man, however unexpectedly and unintentionally. This harsh rule became gradually mitigated. By the eighteenth century, although a man who in the course of committing a crime unintentionally killed another might still for that reason be guilty of murder, this was only when the crime was a felony. By the middle of the nineteenth century doubts had begun to be expressed about this doctrine ... The generally accepted rule of the common law today is, however, that an unintended killing in the course of or in connexion with a felony is murder if, but only if, the felonious conduct involved violence or danger to some person." In South Australia, the law on the subject is now to be found in s 12A; but what was said by Windeyer J explains the genesis of the statutory provision. Causing the death of another by committing an intentional act of violence in the course of a major indictable offence, even though there is no intent to kill or cause grievous bodily harm, constitutes statutory murder. There was nothing artificial about the prosecution's identification of the intentional act of violence on which it relied. The plan upon which the appellants and Escalante embarked was to "roll" Hillam in order to obtain his mobile telephone. That involved robbery, accompanied, if necessary, by force. Perhaps there was a theoretical possibility that Hillam would hand over the telephone without resistance, but the three intending robbers had, between them, two knives and a cosh. They were not intending to rely on their powers of verbal persuasion. They had equipped themselves to deal with resistance. The appellants knew Escalante was armed. It was not difficult to infer why he was armed. The jury came to the matter of causation on the assumption that they had already found that Escalante presented his knife to Hillam for the purpose of threatening or intimidating or stabbing him. That was how he introduced his knife into the proceedings. That was an intentional act of violence, in the course or furtherance of a robbery. Bearing in mind the events that unfolded, and the brief interval of time in which they occurred, it was open to the jury to find that the act of (1967) 121 CLR 205. (1967) 121 CLR 205 at 240-241. violence was a substantial cause of the death of Bourne. Once the jury found that Escalante had presented a knife to Hillam for the purpose described, then it was open to them to reason that the resistence of Hillam and Bourne, the resulting struggle, and the fatal stabbing of Bourne, were all part of a sequence of events resulting from the act of violence. Of course, the defence endeavoured to put a different complexion on the events. But the jury rejected the defence case. The question is whether there was error in the way in which the prosecution case was left to them and, if so, whether there was a miscarriage of justice. In some contexts, the identification of an act as causing the death of a victim may be important because it will affect issues of voluntariness, intent, or other matters relevant to the offence charged. Ryan5 and Royall6 provide examples of the relationship between such issues and questions of causation. In Ryan, where the accused shot the deceased, there were a number of possible, and significantly different, views open as to the manner in which the gun discharged. It was necessary to identify the various possibilities, and give appropriate directions, because, depending on which view was taken, the act of the accused which caused the death of the deceased might or might not have been voluntary. In Royall, the problem arose because, although it was clear that the victim fell to her death from the window of a sixth floor flat, there was uncertainty as to how she came to fall from or through the window, and there was a question of identifying an act of the accused which caused that fall. A number of alternative possibilities were left to the jury. The question was whether the trial judge properly directed the jury as to the particular acts, any one of which they might regard as the cause of the deceased's death. The question was significant because, on the issue of intent, different matters might have been taken into account, depending upon which act of the deceased was identified as an act which caused death7. Of the various possibilities left to the jury, that which required the most careful direction on causation and intent was a possibility that the victim had jumped from the window in response to aggressive conduct on the part of the accused. A majority of the Court thought the directions on that possibility were satisfactory. McHugh J disagreed, but found that there was no miscarriage of justice. It was to that particular problem of causation that the observations of the various members of the Court were addressed. It was the problem presented by the case of a victim who dies as a result of his or her own (1967) 121 CLR 205. (1991) 172 CLR 378. (1991) 172 CLR 378 at 386-387. act in the course of attempting to escape from an attacker. That problem is far removed from the present case. Deane and Dawson JJ said:8 "In a defenestration case such as the present one it is as likely as not that the accused will not have intended the deceased to meet his or her death by jumping from a window, but it is important to keep the question of causation separate from that of the mental state required for murder. Provided that the words or actions of the accused which cause the deceased to jump or fall from the window (that is, the words or actions which cause death) are accompanied by the requisite intent, that will be sufficient to constitute murder. Of course, there may be no single cause of the death of the deceased, but if the accused's conduct is a substantial or significant cause of death that will be sufficient, given the requisite intent, to sustain a conviction of murder. It is for the jury to determine whether the connexion between the conduct of the accused and the death of the deceased was sufficient to attribute causal responsibility to the accused." McHugh J emphasised the particular difficulty that arose on the facts of the case. It was in that context that he made reference to the "but for" test. He said:9 "If [Royall's] conduct ... induced the deceased to jump out of the window so as to avoid further attack, it might be thought that 'but for' the attack the deceased would not have lost her life and that the applicant, therefore, had caused her death. But this Court has recently rejected the proposition that in the law of negligence the test of causation at common law is the 'but for' test: March v Stramare (E & MH) Pty Ltd10. In criminal cases, the common law has also refused to apply the 'but for' test as the sole test of causation. Nevertheless, the 'but for' test is a useful tool in criminal law for determining whether a causal link existed between an accused's act or omission and the relevant injury or damage. But before a person will be (1991) 172 CLR 378 at 411. (1991) 172 CLR 378 at 440. 10 (1991) 171 CLR 506. held criminally liable for his or her act or omission, the causal link between that act or omission and the injury or damage must be sufficiently cogent to justify attributing causal responsibility, ie legal responsibility, to that person." (first emphasis added; second emphasis in original) He went on to point out that difficult issues of causation could arise where an accused's act would not have brought about the event or occurrence without the intervention of a subsequent act of the victim or a third party. In such cases, courts "have sought to use more specific tests for determining whether 'but for' acts or omissions of the accused were 'causally responsible' for the event or occurrence"11. He concluded that, in a case of the kind he was considering, an accused should not be held causally responsible unless his or her conduct induced the victim to take action which resulted in harm to him or her and that harm was either intended by the accused or was of a type which a reasonable person could have foreseen as a consequence of the accused's conduct12. In the present case, the competing arguments on causation did not give rise to legal difficulties of the kind that arose in Royall. On the prosecution case, a robbery was in progress from the time the three men left the stolen car until the time of the fatal stabbing of Bourne. Their purpose was to rob Hillam of his mobile telephone. They were armed to threaten their victims, and to deal with any resistance they might encounter. The victims resisted, as was clearly foreseeable. Escalante used his knife in the resulting encounter, first stabbing Hillam, and then Bourne. His presentation of the knife for the purpose of threatening or stabbing Hillam was an act of violence in the course of an armed robbery, and the sequence of events was such that it could be, and ought to be, regarded as a substantial cause of the death of Bourne. That was how the case was left to the jury. The competing view of the case, which was fairly put to the jury, was as summarised in the last paragraph of the directions quoted above. The directions did not withdraw from the jury a consideration of any factual issue that arose for decision. One of the dangers of a "but for" test of causation is that, in some cases, it is capable of indicating that a negligible causal relationship will suffice, but that was not a realistic risk in the present case, especially where the trial judge, in the sentence preceding the sentence that is now criticised, referred to "a substantial cause". The concluding sentence in the 11 (1991) 172 CLR 378 at 441. 12 (1991) 172 CLR 378 at 451. third of the paragraphs quoted above could not fairly be understood as qualifying the previous sentence. The two sentences were plainly intended to be read together. Evidently, it never occurred to anyone at the trial that the judge intended to tell the jury that a negligible causal connection would suffice. If that impression had been created, objection would surely have followed. Now, two stages removed from the trial, such a complaint is made for the first time. It should be rejected. On the prosecution case, as it was left to the jury, what the trial judge described as "the introduction [by Escalante] of the knife into the affray" was clearly capable of being regarded as a substantial cause of the death of Bourne, not just because, if Escalante had been unarmed, he could not have stabbed Bourne, but because this was an armed robbery, accompanied by the obvious possibility of resistance and violent struggle. The trial judge made that clear. The response of the defence at trial was, not to seek to meet that argument on its own terms, but to endeavour to persuade the jury to a view (or possible view) of the facts according to which, when Hillam and later Bourne were stabbed, there was no longer an armed robbery in progress, and Escalante was acting independently of the appellants in his use of his knife. The issues that arose in relation to causation were fairly put to the jury. This ground of appeal has not been made out. Conclusion Both appeals should be dismissed. Kirby KIRBY J. These appeals from judgments of the Court of Criminal Appeal of South Australia13 present four questions concerning the appellants' convictions of murder in accordance with the Criminal Law Consolidation Act 1935 (SA) ("the Act"). The questions should be answered favourably to the appellants. Their convictions should be quashed and a new trial ordered. The facts, trial, directions and appeals The background facts are explained in the reasons of Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ ("the joint reasons")14. Also explained there are the three bases upon which the charge of murder was left to the jury in the joint trial of Mr Noel Arulthilakan and Mr Chiseko Mkoka ("the appellants")15. The only issues argued in this Court concern the directions given to the jury by the trial judge (Debelle J) relating to statutory murder as provided in s 12A of the Act. Most of the relevant directions of the trial judge concerning the requirements of the Act are set out in the joint reasons16. Those directions address the three elements appearing in the definition of statutory murder, namely (1) whether the conduct constituted "an intentional act of violence"; (2) whether such conduct was committed whilst the accused were acting in the course or furtherance of a "major indictable offence"; and (3) whether the intentional act of violence caused the death of Mr Matthew Bourne ("the deceased"). There was no contest that armed robbery of the deceased and his companion Mr Colin Hillam, the victims of the criminal conduct, constituted a "major indictable offence" attracting the application of s 12A of the Act. Accordingly, the argument in this Court focused on elements (1) and (3) of the statutory elements. Whereas the appellants advanced their complaint about the directions on element (1) before the different benches of the Court of Criminal Appeal that heard their respective appeals, the complaint concerning the issue of causation, raised by element (3), was not argued until the matter reached this Court. 13 In the case of Mr Mkoka's appeal: (2002) 81 SASR 300. In the case of Mr Arulthilakan's appeal: R v NJA [2002] SASC 113. 14 Joint reasons at [3]-[15]. 15 Joint reasons at [12]. 16 Joint reasons at [16]-[17]. Kirby Before us, the appellants submitted that there was a material misdirection to the jury concerning the pertinent "intentional act of violence" disclosed by the evidence, relevant to the way the jury should approach this consideration. They also argued that the directions on causation were erroneous. They submitted that each of these misdirections of law, and especially cumulatively, deprived them of a trial according to law and occasioned a substantial miscarriage of justice. Notwithstanding the earlier failure to take precise objection to the points argued in this Court, the appellants submitted that no impediment of a constitutional or discretionary character stood in the way of the determination of the points in these appeals in which the lawfulness of their convictions was still a live question for the decision of the judicature. The issues The four issues presented by the appeals are: The new appeal ground issue: Whether this Court should allow the appellants to raise the point concerning the adequacy of the trial judge's directions on causation, now argued for the first time. The intentional act of violence issue: Whether in respect of statutory murder, the judge misdirected the jury on the law relating to the "intentional act of violence" as applicable to the requirements of the Act and whether the presentation of a knife by the appellants' co-accused, Mr Carlos Escalante, to the deceased's companion, Mr Hillam was capable of constituting an "intentional act of violence" for the purpose of the offence. The causation issue: Whether the trial judge erred in law in the way in which he directed the jury concerning causation in respect of statutory murder. The proviso issue: Whether, if the answers to the foregoing issues are in the affirmative, the "proviso"17 should be applied, on the basis that no substantial miscarriage of justice has actually occurred affecting the convictions of the appellants. The additional grounds may be raised An earlier suggestion that, for constitutional reasons, a failure to raise and argue a ground of appeal was fatal to the consideration of the point by this Court, 17 Criminal Law Consolidation Act 1935 (SA), s 353(1). Kirby having regard to the nature of the "appeal" to it18 (being a strict appeal), has been rejected19. Where proceedings remain alive within the judicature, it is open to this Court to permit new grounds of appeal to be added. Doing this, is subject to any relevant considerations of procedural fairness and to applicable discretionary factors. Conventionally, one such discretionary factor, favouring rejection of a propounded new ground, is where it is concluded that the course taken at trial was adopted for reasons of forensic advantage. I see no such consideration in the present case. At all times, counsel for the appellants objected to, or complained about, the reliance of the prosecution on statutory murder. Specifically, at trial, counsel objected to the prosecution's argument that statutory murder was available in relation to each of the appellants as an alternative to "common law murder". From the point of view of the appellants, the distinction between "common law" and statutory murder was one presenting serious forensic disadvantages. Statutory murder did not require proof beyond reasonable doubt of an intention on the part of each accused to cause death or grievous bodily harm to the deceased. Nor did it require proof that the accused reasonably contemplated, as part of a joint enterprise, the possibility that use of knives could result in an intentional infliction at least of grievous bodily harm. The new point now raised by the appellants was clearly expressed at the special leave hearing. The adequacy of directions on the issue of causation involves a point of law20. It is alleged to affect the lawfulness of the conduct of the appellants' trial. It can be decided by this Court on the basis of the trial transcript. It has been fully argued. If made good, subject to the "proviso", it requires the quashing of the appellants' convictions for most serious offences. Like the other members of the Court, I consider that the failure of the appellants to reserve the point at trial is not fatal to its determination by this Court. The first issue should therefore be decided in favour of the appellants. The directions on "act of violence" were erroneous The trial judge directed the jury that "as a matter of law β¦ the introduction of the knife [by Mr Escalante] β¦ for the purpose of threatening or 18 Constitution, s 73. 19 Pantorno v The Queen (1989) 166 CLR 466 at 475-476; Gipp v The Queen (1998) 194 CLR 106 at 116 [23], 153-155 [134]-[138], 164 [170]-[171]; cf 128-129 [65]; Crampton v The Queen (2000) 206 CLR 161 at 171 [10], 182-184 [47]-[50], 206- 20 The issue of causation itself is one of fact and thus reserved for the jury's decision: Royall v The Queen (1991) 172 CLR 378 at 441. Kirby intimidating, or for the purpose of stabbing another, is an act of violence". Having regard to the language of this instruction, the jury would have felt bound to comply with what the judge told them was a direction of law. The judge reminded the jury that the particular "act of violence" relied upon by the prosecution was the introduction of the knife into the affray by Mr Escalante presenting the knife to the deceased's companion, Mr Hillam. I agree with the joint reasons that the direction on this point was erroneous in law21. Whether any particular conduct constituted an "intentional act of violence" was a question of fact for the jury; not a matter of law upon which the judge was entitled to direct the jury. At most, the judge was entitled to say that, having regard to the evidence, the conduct of Mr Escalante in presenting the knife to Mr Hillam was capable of being regarded by them as a relevant "intentional act of violence". He should have told the jury that it remained for them (in accordance with s 12A of the Act) to determine whether that act of Mr Escalante in fact amounted to a relevant "intentional act of violence" in the case or not. And that the onus of proof rested on the prosecution to establish that fact beyond reasonable doubt. More than once, in recent times, this Court has had occasion to insist that it is not the function of a judge in a criminal trial to direct the jury as to how they should reason towards a conclusion of guilt22. Least of all is it for a judge to withdraw from the jury's consideration an essential factual element of the offence by informing them that the subject to be decided is a "matter of law", when it is in truth a matter of fact. The correct approach for the judge to take was that observed in R v Butcher23. There, in respect of an analogous provision, a direction that "[i]t will be open β¦ to find that the accused in fact committed an act of violence in holding the knife out the way he did β¦" was approved. By directing the jury to act on the proposition that the production of the knife by Mr Escalante was, as a matter of law, the relevant "intentional act of violence", effectively the trial judge gave the jury no option but to find that this was so. The joint reasons conclude that this misdirection was "technically" made out24. the misdirection was is suggested If by "technically" inconsequential, I disagree. With respect to the trial judge who conducted the trial with clarity and fairness, upon the hypothesis posited, that the jury convicted the appellants of statutory murder, the direction wrongly assumed judicial that 21 Joint reasons at [23]. 22 eg Azzopardi v The Queen (2001) 205 CLR 50 at 69-70 [50]. 23 [1986] VR 43 at 52-53. 24 Joint reasons at [23]. Kirby responsibility for a factual finding concerning one of the three relevant factual ingredients of the offence. On the face of things, this is not a technical error but one that mis-stated an ingredient of the offence and the respective parts played in the trial by the judge and the jury. The issue of whether the error occasioned a miscarriage of justice within the "proviso" raises a different question. It is one that only arises where a misdirection or insufficient direction of law is established, as it is here. The "proviso" issue should be dealt with separately and in conjunction with any other error(s) that are established. Only then will the "proviso" be applied accurately in relation to an evaluation of the overall conduct of the trial and of the convictions resulting from it. There are dangers in segregating suggested errors in a trial, disposing of them one by one as "technical" and failing to consider the effect of the errors cumulatively on the safety of the trial. With respect, this is an error evident in the approach of the joint reasons. It involves a misapplication of the "proviso" for that provision of the Act directs attention to the global question of whether there has been a miscarriage of justice. That question can only be answered when the entirety of the trial is considered, including every established error or misdirection of law that occurred within it. The decisions must be made taking distinct steps. The directions on causation were erroneous The appellants complained about the trial judge's directions on the third element in the definition of statutory murder. They accepted that the judge was correct in instructing the jury that the specified "act of violence", as defined, did not have to be the sole cause of the deceased's death and that it was enough if it was a substantial cause. That this is so is shown by much authority25. No complaint was made about the judge's direction that it was enough for the jury to decide that Mr Escalante's presentation of the knife to Mr Hillam was a "substantial cause" of the deceased's death for which the appellants were liable under the Act. The judge also referred in his directions on causation to "commonsense". To that extent, he mentioned a consideration which this Court, both in civil26 and criminal27, cases has said the decision-maker must take into account in resolving contested questions of causation. 25 eg McAuliffe v The Queen (1995) 183 CLR 108 at 118; R v Hallett [1969] SASR 26 Fitzgerald v Penn (1954) 91 CLR 268 at 277-278; Bennett v Minister of Community Welfare (1992) 176 CLR 408 at 412-413; Chappel v Hart (1998) 195 CLR 232 at 238 [6], 243 [24], 268-269 [93.2], 281-282 [111]; cf Alphacell Ltd v Woodward [1972] AC 824 at 847. 27 Royall v The Queen (1991) 172 CLR 378 at 387, 423. Kirby The complaint of the appellants was that the judge misdirected the jury on causation in two particular ways: In his reference to "commonsense", he did not instruct the jury that it was their commonsense that they should bring to bear in the resolution of the causation problem. Instead, he stated that "the law takes a commonsense view about causation". As so expressed, the direction could have been understood to be one of law made by the judge, not one of fact left to the jury to decide; and The judge told the jury (with emphasis added) that "[i]t is enough if it is shown that, but for that one event, all the other events would not have happened as they did". Contested issues of causation are amongst the most difficult that have to be resolved in the law, as in other fields where aetiology is in issue28. In Ryan v The Queen29, Barwick CJ emphasised that "the choice of the act causing death is not for the presiding judge or for the Court of Criminal Appeal: it is essentially a matter for the jury under proper direction". In that case, Barwick CJ pointed out that the mere presentation of a gun, which subsequently discharged allegedly without intention on the part of the accused, could only be the cause of death if the unwilled discharge of the gun ought to have been in the contemplation of the accused at the time. This analysis makes vital the correct identification of the event propounded as the "cause" and accurate instruction on the proper approach of the jury to linking that event with a subsequent one. Here, the propounded primary event was Mr Escalante's presentation of the knife to Mr Hillam. The propounded secondary event was the stabbing of the deceased by Mr Escalante which was the immediate cause of his death. It was essential that each of the events be clearly identified and drawn to the jury's notice with accurate instruction on the way the relevant statutory concept of causation was to be approached. Otherwise, there would be a misdirection or a failure to direct the jury adequately on the law essential to the third element of the offence of statutory murder. As to the first complaint, concerning the judge's failure to tell the jury that it was their commonsense which they had to bring to bear in the causation question, I would not find error. In the context, the trial judge was telling the jury the approach they should take. That is how I consider they would have interpreted what his Honour said. 28 See Chappel v Hart (1998) 195 CLR 232 at 263-264 [86]-[87]. 29 (1967) 121 CLR 205 at 218. Kirby The reference to the "but for" test of causation is, however, a legal misdirection. In civil cases, this Court in March v Stramare (E & M H) Pty Ltd30 rejected the "but for" test as the exclusive test of causation. At most, the "but for" test can only constitute a "threshold test for determining whether a particular act or omission qualifies as a cause"31. It is insufficient to "make that act or omission a legal cause of the damage"32. The problem of the "but for" test is that, on its own, it casts the net of causation too widely. It includes acts of a remote and peripheral or purely temporal connection which have no part to play in the determination of the "legal cause". There is no reason for the test of causation for the purposes of attaching criminal liability to be different from that adopted by this Court in cases of civil liability. If anything, the reasons that have led to the rejection of the "but for" test in civil trials have greater applicability in the context of the criminal law. This is because, as McHugh J pointed out in Royall v The Queen33, the inquiry is one addressed to whether a link has been proved by the prosecution that is "sufficiently cogent legal responsibility, to that person". justify attributing causal responsibility, In this Court, the respondent agreed with the appellants' submission that the "but for" test for determining criminal responsibility was inadequate and incomplete. In effect, it did not seek to support the directions to the jury of the trial judge on that issue. Instead, it sought to defend the outcome of the trial by reference to the "proviso" and to an alternative contention. It follows that the jury were erroneously instructed as to the test of causation that they were to apply to the supposed link between the presentation by Mr Escalante of a knife to threaten Mr Hillam and the death of the deceased shortly thereafter. There was thus a cumulative misdirection of law. It affected the third element of statutory murder upon which the prosecution relied. The appellants have therefore made out their complaint that the conduct of their trial 30 (1991) 171 CLR 506 at 516-517, 522. 31 (1991) 171 CLR 506 at 530; cf at 534. 32 (1991) 171 CLR 506 at 530. 33 (1991) 172 CLR 378 at 440 (original emphasis). cf Yeo, "Giving Substance to Legal Causation", (2000) 29 Criminal Reports (5th) 215 at 219; Yeo, "Blamable Causation", (2000) 24 Criminal Law Journal 144 at 148; Editorial, "Semantics and the threshold test for imputable causation", (2000) 24 Criminal Law Journal 73; Presser, "All for a Good Cause: The Need for Overhaul of the Smithers Test of Causation", (1994) 28 Criminal Reports (4th) 178. Kirby was tainted by legal error. This enlivens, effectively for the first time, the provisions of the "proviso". Given the unanimous rulings of this Court on the misdirections, and the very proper concessions for the respondent in that regard, essentially this is an appeal concerned with the "proviso". That is so because it is established, or conceded, that errors of law occurred in the directions given by the trial judge to the appellants' jury. The proviso is inapplicable Requirement of accurate trials: The starting point for the consideration of the "proviso" is a reminder of the fundamental postulate of our criminal law that everyone facing trial by jury is entitled to have the jury accurately instructed on the law that they are to apply. That is especially true in respect of the elements constituting the offence(s) upon which the jury is asked to reach their verdict. It is of particular importance that the jury be accurately instructed in a case, as here, where the offences charged were that of murder, the most serious offence in the criminal calendar34. Because conviction of murder ordinarily, as here, results in a sentence of life imprisonment, with consequential prolonged deprivation of liberty35, and because each of the appellants was a juvenile at the time of the offence and of his trial36, these facts constitute further contextual considerations that oblige this Court to examine very closely all of the matters relevant to the trial, before affirming convictions that followed guilty verdicts preceded by erroneous legal directions on the elements of the offence of which the appellants were found guilty. Where legal error in the directions to a criminal jury is shown, it is for the prosecution to establish affirmatively that no substantial miscarriage of justice has actually occurred. This means that the prosecution must demonstrate that the error that is established could not reasonably have been supposed to have affected the result of the trial37 or, as it is sometimes put, that the convictions of the appellants were inevitable38. 34 Charlie v The Queen (1999) 199 CLR 387 at 400 [29]. 35 Counsel informed the Court that Mr Mkoka and Mr Arulthilakan were each sentenced to life imprisonment with a 10 year non-parole period: [2003] HCA Trans 289 at 69-70. 36 Mr Mkoka was 15 years old at the time of the offence. He was, for the purposes of the Young Offenders Act 1993 (SA) a "child". See (2002) 81 SASR 300 at 313 [56]. Mr Arulthilakan was 17 years old at the time of the offence. 37 Mraz v The Queen (1955) 93 CLR 493 at 514-515; Stokes v The Queen (1960) 105 CLR 279 at 284-285; Driscoll v The Queen (1977) 137 CLR 517 at 543. 38 Conway v The Queen (2002) 209 CLR 203 at 226 [63]; cf 242 [106]. Kirby Inferring the jury's reasoning: The verdicts taken from the jury in the appellants' trial did not differentiate between the respective ways in which the count of murder was decided. That count was charged by reference to the common law applicable in South Australia39 and also to statutory murder, formerly known as felony murder, as now provided by the Act40. The trial judge directed the jury on the count of murder as defined at common law and then explained the elements of statutory murder. Because there is no way of discovering with certainty how the jury proceeded in their reasoning, and because the verdicts themselves are inconclusive in this regard, it is a matter of speculation as to whether the jury proceeded first by the "common law" route (involving consideration of the alleged common purpose of the appellants and Mr Escalante) or whether they first considered statutory murder (with its more restricted elements, requiring no specific finding that the appellants each intended the death of, or grievous bodily harm to, the deceased or was to be taken to have so intended by the circumstances in which that death occurred). Before this Court, each side presented competing arguments on this issue. The respondent suggested that the manner in which the judge's directions proceeded and the logic of the case indicated that the first way in which the jury would have determined the guilt of the appellants was by reference to common law principles, involving the identification of the common purpose of the appellants and Mr Escalante. On the other hand, the appellants submitted that the jury may well have found the test for statutory murder a simpler point at which to 39 The Act, s 11. That section provides: "Any person who commits murder shall be guilty of an offence and shall be imprisoned for life". Although described as common law murder, it is in fact a statutory offence whose ingredients are defined by the common law. 40 The Act, s 12A. The section was inserted in the Act by the Criminal Law Consolidation (Felonies and Misdemeanours) Amendment Act 1994, s 5. The amendment followed a Discussion Paper by Goode, "The Abolition of Felonies and Misdemeanours", Attorney-General's Department (SA) 1994. In the paper the author cites Professor Fisse's criticism that felony murder was "a barbarous relic which quite unnecessarily complicates the law": Fisse, Howard's Criminal Law, 5th ed (1990) at 71. See also Lanham, "Felony Murder β Ancient and Modern", (1983) 7 Criminal Law Journal 90 at 101. Numerous law reform bodies had urged abolition. In Canada, felony murder was found to be contrary to the Canadian Charter of Rights and Freedoms: see R v Vaillancourt (1987) 39 CCC (3d) 118. The Discussion Paper urged retention of "statutory murder" on the basis of its "popular appeal": see Goode, "The Abolition of Felonies and Misdemeanours", Attorney-General's Department (SA) 1994 at [4.5]. Kirby begin their deliberations, having regard to the confined scope of the statutory definition, particularly following the misdirections of law of the trial judge. As a matter of logical inference, there is some ground for preferring the submission that the jury would probably have first considered the question of whether statutory murder had been made out. Counsel for the prosecution told the jury that "β¦ above all else, in this trial, that one offence [statutory murder] is abundantly clear". The jury might well have agreed. Accurately described, statutory murder omitted disputable considerations relevant to the intentions and purposes of the appellants. It therefore seems distinctly possible that the jury might have proceeded to decide their verdict on the basis of statutory murder first without considering the common law principles at all. Against this proposition, the respondent contended that the jury's verdicts finding the appellants guilty on the third count (which charged the appellants with wounding Mr Hillam)41 were an indication that the jury had reached a conclusion that the appellants had engaged in an unlawful joint enterprise in respect of Mr Hillam. This indicated, so it was argued, that the jury had considered the intention of the appellants in respect of the offence against Mr Hillam. From this, the respondent urged it was but a small step to infer that the jury similarly decided their verdicts on the count of murder on the footing of the common intention of the appellants and Mr Escalante, directed to the wounding of the deceased that caused his death. Further, the structure of the trial judge's instructions to the jury placed emphasis upon murder at common law. His Honour dealt with that first and then gave his directions on statutory murder stating that "[t]he Crown simply puts it forward as an alternative route by which you can find the accused guilty of the crime of murder". Whilst it is certainly possible that the jury dealt first with "common law" murder, it is impossible to be certain. Thus the charge concerning the wounding of Mr Hillam was quite distinct from that of the murder of the deceased. That wounding happened earlier in time. It occurred in a different place. It involved a different victim. The jury were correctly instructed to consider each of the counts separately. The issue of intention in relation to Mr Hillam had to be decided to reach a verdict on the third count. It did not have to be decided in relation to the more serious first count if the route of statutory murder was taken. The verdict on the third count does not inevitably demonstrate that the appellants were convicted of murder on the basis of the "common law"42. In the end, therefore, identification of the jury's basis for reaching the verdicts of murder is a matter of pure speculation. 41 Contrary to the Act, s 21. 42 As applied by the Act, s 11. Kirby Was conviction inevitable? This being the case, the approach that must be followed is that adopted in Domican v The Queen43. That was an appeal involving directions on identification evidence which were found to have been inadequate in what was otherwise a very strong prosecution case. The majority of this Court concluded that the "proviso" could not be applied to overcome the misdirection unless the Court, invited to apply the proviso, considered that conviction of the appellant was inevitable, independently of the identification evidence44. The applicable principle is stated by Brennan J45: "β¦ where, on the evidence and consistently with the directions of the trial judge, it is open to a jury to convict on any of two or more independent bases, a misdirection or an inadequate direction which would vitiate a conviction on one of those bases necessarily results in the setting aside of a guilty verdict despite the availability of another sound basis for conviction. That is because it is not possible to conclude that a guilty verdict has been founded on a sound basis when it was open to the jury to convict on a basis affected by the misdirection or inadequate direction. A Court of Criminal Appeal cannot apply the proviso by speculating either that the jury acted on a body of evidence which was unaffected by the misdirection or inadequate direction; nor can the Court speculate that, if the jury had acted on such evidence, they would have convicted. If a misdirection or inadequate direction would vitiate a conviction β¦ and that basis of conviction was open to the jury, it is impossible to be satisfied that, by reason of the misdirection or inadequate direction, the accused did not lose a chance of acquittal." Applying that approach to the present case, the establishment of two errors in the explanation of the ingredients of the offence of murder upon the basis of either of which the jury might have reached their verdicts, necessitates the quashing of the convictions unless it can be said that the verdicts of guilty to murder were inevitable. Is that a conclusion that should be reached in this appeal? The appellants' forensic arguments: In my opinion, it is not. It is true that the appellants took part in a shocking crime. Their proved conduct deserves condign punishment. There were numerous charges, alternative to murder, upon 43 (1992) 173 CLR 555. 44 (1992) 173 CLR 555 at 565-566. 45 (1992) 173 CLR 555 at 570-571. His Honour dissented on the basis that the direction on identification was adequate. The dissent does not affect the correctness of the approach to the proviso explained in this passage. Kirby which they could have been presented for trial. By choosing the most serious charge of murder, the prosecution assumed a significant burden. That choice also required an accurate trial. The immediate act that killed the deceased was that of Mr Escalante in stabbing him and puncturing his heart. Neither of the appellants stabbed the deceased. Neither of them personally and individually carried or inserted the knife that was the proximate cause of death. Those acts were done, and done only, by Mr Escalante. At the beginning of the trial, Mr Escalante pleaded guilty to statutory murder, leaving the guilt of the appellants, relevantly of murder, to be determined by the jury. Because the appellants did not themselves perform the act that led to the profound loss of blood in the chamber of the deceased's heart occasioning his death, their guilt of murder is the consequence of the application to their conduct of a legal fiction46. In factual terms, they were guilty of attempted armed robbery and other offences. However, their guilt of murder is the result either of a common law doctrine or of the statute so far as it provides for an expansion of the ordinary notion of murder and alters the requirements of that crime. In saying this, I do not minimise the conduct of the appellants by their participation in the offences against Mr Hillam and the deceased, Mr Bourne. I simply draw to notice that, in the forensic context, the appellants' moral culpability for the death of the deceased was much less than that of Mr Escalante. Such considerations can sometimes weigh heavily in the deliberations of a jury. So might the appellants' respective ages. It cannot therefore be said that this was a trial where the appellants had no available forensic arguments. It is true that the entire events that culminated in Mr Escalante's stabbing of the deceased, happened in a matter of minutes. But that is not unusual in affrays of this kind. The focus of the statute is upon the cause of death of the deceased. The price of removing the necessity of establishing intent to cause that death or at least grievous bodily harm is the obligation, imposed on the prosecution by the Act, to establish beyond reasonable doubt that an identified intentional act of violence for which the accused is responsible caused that death. Only then is the accused rendered by law "a person who β¦ is guilty of murder". It is true that each of the appellants had a personal involvement with a knife as he embarked upon his criminal conduct. However, again, in the evidentiary setting, both appellants were left with distinct arguments to advance before the jury. The possession and carrying of knives is reprehensible, dangerous and morally culpable, especially for those who take part in an armed robbery knowing that another participant has a knife. But to secure a conviction 46 cf R v Martineau [1990] 2 SCR 633. Kirby for statutory murder it remains for the prosecution to prove the causal link between the accused and the identified act of violence of someone else and the ensuing death by the use of a knife by that other person. This Court should do nothing to enlarge the fiction that courts and scholars have pointed out is otherwise inconsistent with the fundamental postulates of our criminal law, namely liability for intentional acts. Certainly, it should do nothing in such a case to minimise the burden cast on the prosecution by law to prove each and every element of the offence in the case of each accused. Mr Arulthilakan had originally left his knife in the stolen car in which he was travelling with the other offenders. His conduct in leaving his knife behind could be viewed by the jury as a positive act, somewhat unusual in such circumstances, to distance himself from the use of knives in the ensuing confrontation. Whilst it is true that he agreed to Mr Mkoka's request to take the knife he had left in the car into the affray, his evidence was that he did so solely to facilitate the robbery not for use in stabbing anyone. On the basis of the evidence, Mr Arulthilakan had distinct evidentiary submissions to urge upon the jury relevant to his acquittal of murder. Similarly, Mr Mkoka, although he took Mr Arulthilakan's knife into the affray, dropped the knife on the road. Arguably, this action was also capable of being viewed by the jury as distancing himself from the use of the knife in such a dangerous situation. He gave evidence that he was aware that Mr Escalante was in possession of a knife as he approached the victims and that he knew that Mr Escalante carried a knife "fairly often". However, Mr Mkoka asserted that he did not see the knife in Mr Escalante's hand when he dropped the knife he had taken and proceeded to use a cosh. The cosh struck the deceased on his head. Whilst the actions of Mr Mkoka, directed at a stranger are shocking, it was common ground that the wounds occasioned by the cosh did not themselves cause the deceased's death. The cosh was an instrument used in the attempted armed robbery. It follows that Mr Mkoka was also left with arguments to urge upon a jury that separated his actions from the cause of the deceased's death. trial judge himself appeared In exchanges with counsel, the acknowledge the difficulty which, forensically, the prosecution faced in linking Mr Escalante's presentation of his knife to Mr Hillam and the act that caused the deceased's death. Trial counsel for Mr Arulthilakan, referring to the identified "act of violence", asked "How, with respect, can it be said that the stabbing of Hillam can be the act of violence causing the death of Bourne? That is untenable." To this remark, the trial judge said "I agree". If the learned trial judge agreed to this argument, it was clearly open to the jury to agree with it. The presentation of Mr Escalante's knife to Mr Hillam occurred on the side of the road opposite that on which Mr Escalante later stabbed the deceased in the heart. Whilst the events were closely interrelated and compressed into a matter of minutes, the causation issue remained a real question to be answered by Kirby the jury. It was a factual question. It was one upon which the jury were obliged to deliberate. On the facts it was not inevitable that a jury would convict the appellants. It was open to a properly instructed jury, on the evidence, to conclude that the appellants were involved (including in the case of Mr Mkoka with his cosh) solely in the attempted armed robbery. It was open to the jury to decide that the significant cause, and the sole substantial cause, of the death of the deceased (and thus the legal cause contemplated by the Act) was the independent act of Mr Escalante alone (a man revealed by the evidence to have been highly agitated, excitable and apparently violent). If the jury so decided it was open to them to conclude that the appellants were not guilty of statutory murder. This would have consigned the prosecution to establishing the requisite intention necessary to secure a conviction of each appellant of murder at common law. The same evidentiary considerations were available to each of the appellants on this score. Guilt of causation of murder was not inevitable. Conclusion: a new trial: This analysis made the trial judge's instructions to the jury on the elements of statutory murder important, and potentially decisive. In the event, the two errors of law in the directions on this point were crucial. Once the judge had informed the jury that, as a matter of law, the introduction by Mr Escalante of the knife for the purpose of threatening, intimidating or stabbing Mr Hillam was the relevant "intentional act of violence", this effectively confined the jury's role, in respect of statutory murder, to deciding the causation issue. But in the context, if the jury concluded that the involvement of the appellants was solely in relation to the attempted armed robbery, their verdict, as a matter of fact, on the "intentional act of violence" for which the appellants were responsible, was vital in reaching their verdict on statutory murder. Even more importantly, the "but for" direction given by the trial judge on the issue of causation confined even more narrowly the remaining issue that the jury then had to decide. On the basis of that direction, it was a very small step for the jury to conclude that the event involving Mr Escalante and Mr Hillam was closely connected to Mr Escalante's stabbing of the deceased so soon afterwards. Each involved Mr Escalante. Each involved his knife. The direction therefore diverted the jury from deciding the question of causation presented by the definition of statutory murder contained in the Act. Properly explained, this would have required the jury to decide whether the presentation by Mr Escalante of his knife to Mr Hillam was the cause of the subsequent death of the deceased or, at least, a significant contributing cause of that death for which the appellants were liable47. In law it was not enough that it was simply one event in the chain of events that unfolded. Defining it in such a way made it virtually impossible for the appellants to escape a guilty verdict of statutory murder. 47 R v Nette [2001] 3 SCR 488 at 513-514 [44]-[46]. Kirby Conclusion and orders The appellants are entitled to raise the points they have argued in this Court. Misdirections of law have been established, as is now accepted by the entire Court. The misdirection on causation was specially significant in this case. This Court cannot know whether the foundation of the jury's verdicts of guilty of murder was based on statutory murder or common law murder. In the circumstances, the only basis upon which the misdirections may be excused is if the respondent establishes that the convictions of the appellants were inevitable. The evidence demonstrates that the appellants had real factual arguments to present to the jury. It was essential, therefore, that the elements of the offence of statutory murder be accurately explained to the jury. They were not. In the light of the factual arguments, it cannot be said that the convictions of the appellants were inevitable. Accordingly, the "proviso" does not apply. The appeals should be allowed. The orders of the Court of Criminal Appeal of South Australia in respect of each of the appellants should be set aside. In lieu thereof, it should be ordered that the appellants' appeals to that Court be allowed; their convictions quashed; and a new trial ordered. |
HIGH COURT OF AUSTRALIA Matter No S107/2009 ACQ PTY LIMITED AND APPELLANT GREGORY MICHAEL COOK & ANOR RESPONDENTS Matter No S108/2009 AIRCAIR MOREE PTY LIMITED APPELLANT AND GREGORY MICHAEL COOK & ANOR RESPONDENTS ACQ Pty Limited v Cook Aircair Moree Pty Limited v Cook [2009] HCA 28 5 August 2009 S107/2009 & S108/2009 ORDER Matter No S107/2009 Appeal dismissed. Appellant to pay the costs of the first respondent. Matter No S108/2009 Appeal dismissed. Application for special leave to cross-appeal dismissed. Appellant to pay the costs of the first respondent of both the appeal and the application for special leave to cross-appeal. On appeal from the Supreme Court of New South Wales Representation B W Walker SC with G Curtin for the appellants in both matters (instructed by P Menzies QC with G Giagios for the first respondent in both matters (instructed Submitting appearances for the second respondent in both matters Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS ACQ Pty Limited v Cook Aircair Moree Pty Limited v Cook Aviation β Liability for damage caused by aircraft β Crop dusting aircraft collided with conductor in cotton field β Electrical linesman dispatched to repair conductor tripped or fell near it β Injury occurring after electric arc β Whether injury "caused by ... something that is a result of an impact" with an aircraft in flight β Damage by Aircraft Act 1999 (Cth), s 10(1). Words and phrases β "something", "caused by". Damage by Aircraft Act 1999 (Cth), ss 10(1), 11. FRENCH CJ, GUMMOW, HEYDON, CRENNAN AND BELL JJ. The background facts At about 5.30am on 28 December 2000 a crop dusting aircraft was spraying a cotton field known as Field 19 about 21.5km north of Moree. The aircraft was owned by ACQ Pty Limited. It was operated by Aircair Moree Pty Limited, a company which employed the pilot1. Field 19 had a power line β a 22kV conductor β passing over it. At the lowest point the line was about 6.2m above the ground. In the course of flying under the conductor, the aircraft collided with it and caused it to drop to a height of about 1.5m from the ground at its lowest point. NorthPower (now known as Country Energy), which was responsible for the conductor, was informed of the incident at about 6.04am. Less than a quarter of an hour later NorthPower despatched two of its employees, Mr Cook ("the plaintiff") and Mr Buddee, to deal with the problem. They each arrived at about 6.45am. They agreed that Mr Buddee would drive to a links site seven kilometres away and isolate the conductor. They also agreed that the plaintiff would wait until the conductor was isolated before commencing his assessment. Despite that agreement the plaintiff entered the field before the conductor was isolated in order to see what damage had been caused and assess what repair work might be required. On the field were planted cotton plants in rows one metre apart, the rows running in a north-south direction. The plants were more than half a metre high. They grew into each other, so that the rows formed low hedges. Between the rows were troughs in which water collected when the field was irrigated. Thus the ground in profile had the configuration of crests with troughs spaced one metre apart. The ground was uneven and extraordinarily boggy. The conductor, being thin, was difficult to see against the overcast sky. The plaintiff approached the conductor, about 65m from his truck, by crossing through lines of plants in a slightly diagonal direction. The plaintiff then stumbled or fell in the muddy conditions and came within 60mm of the conductor. An electric arc between the conductor and the plaintiff took place, injuring him badly. The legislation There were numerous controversies in the courts below, but the only claim which is relevant to these appeals is a claim which the plaintiff made against the 1 ACQ Pty Limited and Aircair Moree Pty Limited are referred to below as "the appellants". Crennan Bell appellants. He made the claim under the Damage by Aircraft Act 1999 (Cth) ("the Act"). Section 10(1) provides: "This section applies if a person or property on, in or under land or water suffers personal injury, loss of life, material loss, damage or destruction caused by: an impact with an aircraft that is in flight, or that was in flight immediately before the impact happened; or an impact with part of an aircraft that was damaged or destroyed while in flight; or an impact with a person, animal or thing that dropped or fell from an aircraft in flight; or something that is a result of an impact of a kind mentioned in paragraph (a), (b) or (c)." Section 10(2) provides that if s 10 applies, both the operator of the aircraft immediately before the impact happened, and the owner of the aircraft immediately before the impact happened, are jointly and severally liable in respect of the injury, loss, damage or destruction. Section 11 provides: "Damages in respect of an injury, loss, damage or destruction of the kind to which section 10 applies are recoverable in an action in a court of competent jurisdiction in Australian territory against all or any of the persons who are jointly and severally liable under that section in respect of the injury, loss, damage or destruction without proof of intention, negligence or other cause of action, as if the injury, loss, damage or destruction had been caused by the wilful act, negligence or default of the defendant or defendants." The trial In the District Court of New South Wales, Johnstone DCJ found that the appellants were liable, and that s 9 of the Law Reform (Miscellaneous Provisions) Act 1965 (NSW) did not apply by reason of the fact that s 5A of the Civil Liability Act 2002 (NSW) was not enlivened, as the plaintiff's claim was not a claim in negligence. Consequently, there was no reduction in damages on the ground of any contributory negligence on the part of the plaintiff. The trial judge Crennan Bell entered a verdict for the plaintiff against the appellants for $953,141.00 and gave The appellants submitted to the trial judge that s 10(1)(a)-(c) would only apply if the aircraft, or part of it, or something falling from it, struck the plaintiff, and that s 10(1)(d) would only apply if one of those objects struck an object that then struck the plaintiff. The trial judge rejected that submission. He held that the plaintiff had suffered personal injury caused by "something" that was the result of an impact of the aircraft, in flight, with the conductor. That "something" was the dislodgment of the conductor from a supporting pole, which created a foreseeable risk for persons near, or persons who might approach, the live conductor, such as linesmen from NorthPower. The Court of Appeal The Court of Appeal of the Supreme Court of New South Wales (Campbell JA, with Beazley and Giles JJA concurring) dismissed an appeal by the appellants3. The appellants repeated the submission they had made to the trial judge. However, the Court of Appeal considered that the impact of the aircraft with the conductor caused it to hang low over "a field that was uneven, extraordinarily boggy, and methodically strewn with obstacles in the form of the rows of cotton bushes." It said: "The conductor was extremely dangerous in itself; the impact caused it to be in a position where people were at risk of getting dangerously close to it, and [the plaintiff] was injured when he encountered that precise risk." Thus the "something" which caused the plaintiff's personal injuries was the creation of a danger to persons who got close to the conductor4. The appellants, by special leave, have appealed to this Court. Each appeal should be dismissed for the following reasons. 2 Cook v Aircair Moree Pty Ltd (2007) 5 DCLR (NSW) 142; [2007] NSWDC 164. 3 ACQ Pty Ltd v Cook [2008] NSWCA 161. 4 ACQ Pty Ltd v Cook [2008] NSWCA 161 at [140]-[142]. Crennan Bell The appellants' primary arguments The appellants did not repeat the argument which had been rejected by the trial judge and the Court of Appeal. Rather they submitted that the legislation did not provide a universal comprehensive scheme to award damages to every person who sustained an injury that was in some way connected to the impact of an aircraft, part of an aircraft, or something which fell from an aircraft whilst in flight. In particular they submitted that "something that is a result of an impact" of those kinds should be construed as being a thing (for example, a fire or a collapse of a building) which "has an immediate (or reasonably immediate) temporal, geographical and relational connection with an impact." The appellants relied on the words "a person or property on, in or under land or water". They contended that those words created a "geographical limitation". They argued that those words could not have referred to all persons except those aloft, because that conception could have been much more straightforwardly expressed. They submitted that if that was all the phrase "on, in or under land or water" did, it was "puzzling" and "odd". It was "an extremely roundabout crabwise way of saying as long as you are not in an aircraft in flight." Hence the appellants submitted that the land or water had to be located in a place linking the impact and the claimed damage. The words did "not obviously include" persons brought to the scene by reason of the impact (including those who came to rectify or repair the state of affairs created by the impact). Thus, the words required plaintiffs to be at a place on, in or under land or water which was linked with the impact at the time of the impact. The appellants claimed to disavow any attempt to contend that whatever the extent to which the plaintiff's own negligence had contributed to his loss, it was so high as to break the chain of causation. They criticised the Court of Appeal for analysing the case from the point of view of whether the plaintiff was "the sole author of his own misfortune"5. Rather they submitted that the chain of causation was too remote to apply to a well-trained worker who came a considerable distance to remedy a fault arising out of a static set of circumstances which would have caused no danger to the plaintiff had he not, voluntarily, fully appreciating the danger from the damaged conductor and the muddy field, and without the press of emergency, departed from his agreement with Mr Buddee to do nothing until the conductor had been isolated. 5 ACQ Pty Ltd v Cook [2008] NSWCA 161 at [141]. Crennan Bell The appellants further submitted that for s 10(1)(d) to operate, there had to be injury caused by "something" β not a series of things or a narrative of intermediate events or "the whole ensemble of circumstances that combined to bring [the plaintiff] from his home to within 60mm of the conductor." Paragraph (d) of s 10(1) had "to be useful and to add something", in the singular, and "caused by" did not "include β¦ multistage narrative to link the impact with the outcome." Section 10(1)(d) added one more permissible stage between the impact and the outcome, but only one. Narrow basis of this decision The words of the legislation are brief and general. The circumstances to which arguably they may or may not apply are very numerous and diverse. The arguments of the parties raised for consideration many factual possibilities other than the one before the Court. This is, it seems, the first case in which it has been necessary for curial analysis to be given to the construction of the legislation. The field of debate, causation, is one of the most difficult in the law, and one about which abstract discussion is seldom valuable for courts and those who practise in them. It is thus undesirable to deal with possible applications of the legislation which are not essential for the decision of this case. Most cases on s 10(1) are likely to be intensely fact-specific. Certainly the present one is. Hence no endeavour should be made to resolve other cases while deciding this one. The appellants' concession and its consequences In the course of illustrating the scope of s 10(1) as they submitted it to be, the appellants gave an illustration of a plane exploding on landing, thus setting alight structures nearby and causing death or injury to a plaintiff whose house is burned down. They conceded that a fire fighter who was summoned to fight the fire and who was injured by it would be within s 10(1)(d), even if the scene of the fire was some distance from the fire station. That concession was correct because, as the appellants accepted, there was no reason not to conclude that the fire fighter's injury was caused by "something" that was a result of an impact between the aircraft and the ground, namely the fire. The appellants, however, distinguished that case from the present one: "There is the world of difference between a rescuer who is answering the call of either nature or society to save another person β¦ from peril, on the one hand, and on the other hand, a person who comes to a scene of evident danger precisely because the danger is evident and because of their skills, experience and position, occupation, in order to Crennan Bell repair or rectify that dangerous position where there is no peril to another person β¦ requiring the risks to be undertaken in order to answer the calls of nature or social duty." The distinction is not a valid ground on which to deny liability in the present case. First, it cannot be said that the damaged conductor involved "no peril to another person". One of the reasons why the plaintiff and Mr Buddee were sent to the scene was to nullify a peril to agricultural workers and others who might approach it. Secondly, given that the conductor did involve a peril to agricultural workers and others, there is no difference between the role of fire fighters in reducing perils from the fire and the role of linesmen in reducing and overcoming perils from the damaged conductor. The plaintiff was engaged in activities incidental to the reduction and abatement of those perils β inspecting the damage and assessing what repair work was necessary. He may have been negligent in breaching his agreement with Mr Buddee and in other ways, but, as noted above, the appellants did not contend that his negligence was such as to be the true or sole cause of his injuries. The appellants' concession, and its application to the plaintiff here, involved an abandonment of their argument based on the words "on, in or under land or water" β for the land on which the hypothetical fire fighter and the plaintiff were at the time of the impact was some distance from the scene of the impact, and they had to travel that distance to get there. To call the drafting roundabout, puzzling, odd and crabwise is an exaggeration. The words "on, in or under land or water" serve to distinguish those accidents to which s 10(1) applies from accidents in the air, to which other legal regimes apply. There is no linguistic strain in characterising what happened to the plaintiff as a personal injury caused by "something" that is "a" result of an impact between the aircraft in flight and the conductor. The plaintiff adopted the trial judge's conclusion that the "something" was the movement of the conductor into a dangerous place, 1.5m above the ground at its lowest point, creating a foreseeable risk for persons near it. The Court of Appeal appeared to treat the "something" as the movement of the conductor into a position where people were at risk of getting dangerously close to it. There is no substantive difference between these characterisations in this case, and they are correct. The injury was caused by the dangerous position of the conductor, and its dangerous position was the result of an impact between the aircraft and it. Crennan Bell The appellants' specific criticisms of the Court of Appeal considered The appellants submitted that on the approach of the Court of Appeal there was "virtually no limit" to the liability created by s 10(1)(d) for results flowing from the impacts described in s 10(1)(a)-(c). The appellants submitted that there were two particular errors in the reasoning of the Court of Appeal. The first error lay in the following utilisation of the legislative history6: "Article 1 of the Rome Convention had provided for there to be no right to compensation 'if the damage is not a direct consequence of the incident giving rise thereto'." The Court of Appeal said that s 10(1)(d) altered this so that not only the direct consequences of an impact attracted limited liability, but also the indirect or consequential results of an impact. The Court of Appeal said that this construction was consistent with the language, the legislative history, and the purpose of the Act. The background is that Art 1(1) of the Convention on Damage Caused by Foreign Aircraft to Third Parties on the Surface agreed at Rome on 7 October 19527 ("the Rome Convention") provided: "Any person who suffers damage on the surface shall, upon proof only that the damage was caused by an aircraft in flight or by any person or thing falling therefrom, be entitled to compensation as provided by this Convention. Nevertheless there shall be no right to compensation if the damage is not a direct consequence of the incident giving rise thereto, or if the damage results from the mere fact of passage of the aircraft through the airspace in conformity with existing air traffic regulations." (emphasis added) Section 8(1) of the Civil Aviation (Damage by Aircraft) Act 1958 (Cth) provided that the provisions of the Rome Convention had the force of law in Australia. That legislation was repealed by the Act (s 13 and Sched 1). Section 3 of the Act provides: 6 ACQ Pty Ltd v Cook [2008] NSWCA 161 at [136] (italics in original). 7 310 UNTS 181. Crennan Bell "The main object of this Act is to facilitate the recovery of damages for certain injury, loss, damage or destruction caused by aircraft, or by people, animals or things that are dropped, or that fall, from aircraft that are in flight." According to the Court of Appeal the word "facilitate" showed "an intention to improve the pre-existing situation."8 The Court of Appeal also referred to various parts of the Minister's Second Reading Speech9 which spoke of improving compensation and making it comprehensive, which identified drawbacks to the Rome Convention regime, and which described gaps in State and Territory legislation. The appellants submitted that it was erroneous to conclude that the purpose of ss 10 and 11 was to include, "apparently without relevant limitations β¦, indirect or consequential results of an impact." In particular, they submitted that such a purpose was "unsupported by all the extrinsic material." It is not proposed to analyse the Second Reading Speech or the use to which the Court of Appeal put it. Nor is it proposed to analyse the fairly numerous references which the parties made to that speech and to other extrinsic material. That is because whatever utility those materials might have in relation to other cases, they are not determinative of any particular construction which is decisive of this case10. The appellants were correct to say, at least in relation to this case, that there is nothing in the extrinsic materials definitively supporting the result at which the Court of Appeal arrived. The Court of Appeal, nevertheless, was correct to conclude that s 10(1)(d) does in a sense extend liability from "direct consequences" to "indirect or consequential results". What these two categories of expression may mean is another issue. The second criticism which the appellants made of the Court of Appeal related to the relationship between s 10(1) and the common law. The Court of 8 ACQ Pty Ltd v Cook [2008] NSWCA 161 at [114]. 9 Australia, House of Representatives, Parliamentary Debates (Hansard), 24 March 10 The same is true of an even more remote guide to which both parties appealed in different respects, namely this Court's decision in Allianz Australia Insurance Ltd v GSF Australia Pty Ltd (2005) 221 CLR 568; [2005] HCA 26, a case on very different legislation. Crennan Bell Appeal applied to s 10(1) "the understanding of the concept of causation"11 expressed in March v E & M H Stramare Pty Ltd by Mason CJ, Deane, Toohey and Gaudron JJ12 in relation to the tort of negligence and applied in Wardley Australia Ltd v Western Australia13. As stated by the Court of Appeal14, the relevant test is: to commonsense and experience, and one "a test of causation whereby it was a question of fact to be answered by reference into which considerations of policy and value judgments necessarily enter. When causation is so regarded, the law has no difficulty in recognising that there can be multiple causes of the one damage." The Court of Appeal said that that understanding should be applied to the words "caused by" in s 10(1). It said15: "While the meaning that is given to an expression in one area of the law is not necessarily the same as the meaning given to that same expression in a different area of the law, [there is] nothing in the purpose for which a judgment about causal connection is made in the law of negligence that differentiates it from the purpose for which a judgment is made about causal connection for the purpose of the application of [the Act]. In both cases, the purpose is deciding how legal liability to pay damages for loss or damage should fall. Further, in [the Act] there is a particularly close connection between the way in which causation works to attribute that responsibility, and the way causation works in the law of negligence. It arises in [s 11 of the Act], where it provides that damages of a kind referred to in [s] 10 are recoverable 'as if the injury, loss, damage or destruction had been caused by the wilful act, negligence or default of the defendant or defendants'." 11 ACQ Pty Ltd v Cook [2008] NSWCA 161 at [139]. 12 (1991) 171 CLR 506; [1991] HCA 12. 13 (1992) 175 CLR 514 at 525 per Mason CJ, Dawson, Gaudron and McHugh JJ; [1992] HCA 55. 14 ACQ Pty Ltd v Cook [2008] NSWCA 161 at [137]. 15 ACQ Pty Ltd v Cook [2008] NSWCA 161 at [139] (italics in original). Crennan Bell The appellants criticised the last sentence on the ground that the words "as if" in s 11 could not point to any particular causation test: s 10(1) dealt with causation as a "self-contained code", while s 11 assumed satisfaction of s 10(1). The appellants also criticised the Court of Appeal for failing to act on a passage which it quoted from Mason CJ's reasons for judgment in March v Stramare16: "[A] factor which secures the presence of the plaintiff at the place where and at the time when he or she is injured is not causally connected with the injury, unless the risk of the accident occurring at that time was greater". Not every lawyer has found the analysis of causation in March v Stramare helpful. But, without casting doubt on anything that was said in March v Stramare or in Wardley Australia Ltd v Western Australia, it is not necessary in construing s 10(1) to rely on any analogy with what was said in those cases, at least in the course of resolving the present appeals. To this limited extent there is some force in the appellants' submissions. And quite independently of the Court of Appeal's translation of March v Stramare to s 10(1), one of the principal points extracted by the Court of Appeal from that case is uncontroversial, and was not controverted by the appellants β the proposition that there can be multiple causes of the damage suffered by a plaintiff. Further, the context of the passage quoted from Mason CJ's reasons for judgment in March v Stramare reveals that Mason CJ was concerned merely to reject the "but for" test as an exclusive criterion of causation. It is true that but for the impact of the aircraft on the conductor the plaintiff would not have been injured; but the causal relationship between the impact and the injury was much closer than that, and did not rest exclusively on a "but for" analysis. The appellants' reliance on arguments from absurdity A final argument by the appellants was that on the Court of Appeal's approach, the plaintiff could have recovered damages if, after he had been summoned to the scene of the accident, he had injured himself hurrying from his house to his truck, or driven off the road on his journey, or injured himself while alighting from the truck on arrival. This conclusion (and other illustrations which the appellants gave), they said, would rest on an "absurd, extraordinary, 16 (1991) 171 CLR 506 at 516. Crennan Bell capricious, irrational or obscure" construction17. It is far from clear that those epithets would be correct: but, in any event, decisions about the injuries postulated can be made when it is necessary to make them. The problems they pose are different from the problems posed in these appeals. Proposed cross-appeal For those reasons the appeals should be dismissed. The plaintiff filed an application for special leave to cross-appeal against the Court of Appeal's allowing of an appeal against the trial judge's conclusion that the operator was in breach of a duty of care owed to the plaintiff. The application was defensive in the sense that it was filed only against the possibility that the appeals by the appellants succeeded. Since those appeals must fail, there is no need to consider the application for special leave to cross-appeal, and it should be dismissed. Because that application took up very little time, and because it was only triggered by the appeal of the operator, it is appropriate that the operator pay the costs of the application for special leave to cross-appeal. Orders The following orders should be made. No S107 of 2009 The appeal is dismissed. The appellant is to pay the costs of the first respondent. No S108 of 2009 The appeal is dismissed. The application for special leave to cross-appeal is dismissed. The appellant is to pay the costs of the first respondent of both the appeal and the application for special leave to cross-appeal. 17 Citing Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 321 per Mason and Wilson JJ; [1981] HCA 26. |
HIGH COURT OF AUSTRALIA GRANT TOMLINSON APPELLANT AND RAMSEY FOOD PROCESSING PTY LIMITED RESPONDENT Tomlinson v Ramsey Food Processing Pty Limited [2015] HCA 28 12 August 2015 ORDER Appeal allowed. Set aside paragraphs 2, 3, 4 and 5 of the order of the Court of Appeal of the Supreme Court of New South Wales made on 21 July Remit the matter to the Court of Appeal to determine the issue raised by the respondent's notice of contention in this Court. The respondent pay the appellant's costs of the appeal to this Court and of the appeal to date in the Court of Appeal. On appeal from the Supreme Court of New South Wales Representation D M J Bennett QC with R I Goodridge for the appellant (instructed by Monaco Solicitors) B W Walker SC with K W Andrews for the respondent (instructed by Colin Biggers & Paisley Solicitors) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Tomlinson v Ramsey Food Processing Pty Limited Estoppel β Issue estoppel β Appellant employed at abattoir operated by respondent β Appellant subsequently employed by third party providing labour services to respondent β Appellant complained to Fair Work Ombudsman that entitlements not paid upon termination of employment β Fair Work Ombudsman commenced proceedings in Federal Court of Australia against respondent β Federal Court determined respondent, not third party, was appellant's employer β Appellant commenced proceedings claiming damages from respondent for personal injury sustained at abattoir β Appellant argued third party, not respondent, was his employer β Respondent argued appellant was issue estopped by reason of Federal Court proceedings from denying that respondent was appellant's employer β Whether appellant was issue estopped by reason of declarations and orders made in Federal Court proceedings β Whether appellant was privy in interest with Fair Work Ombudsman in Federal Court proceedings. Words and phrases β "claim under or through", "estoppel", "issue estoppel", "on behalf of", "privity of interest", "privy in interest". FRENCH CJ, BELL, GAGELER AND KEANE JJ. The question in this appeal is whether the claiming by the Fair Work Ombudsman and the making by a court of declarations and orders in a civil penalty proceeding created an issue estoppel on which a respondent to that proceeding was entitled to rely in a subsequent common law proceeding brought against it by a worker. The resolution of the question is that the claiming and the making of the declarations and orders created no issue estoppel, for want of sufficient connection in interest between the Fair Work Ombudsman and the worker. How the question arises Ramsey Food Processing Pty Limited ("Ramsey") operated an abattoir at South Grafton from 2005 until 2009. Mr Tomlinson started work at the abattoir Mr Tomlinson and other workers at the abattoir were told in October 2006 that their previous employment was at an end and that they would from then on be employed by Tempus Holdings Pty Ltd ("Tempus"). Mr Tomlinson and other workers at the abattoir were told in November 2008 that Tempus had then ceased "providing labour" to Ramsey, as a result of which Tempus was unable to offer them ongoing employment. Mr Tomlinson afterwards complained to the Fair Work Ombudsman that his "entitlements" had not been paid when he was made redundant. The Fair Work Ombudsman is established under the Fair Work Act 2009 (Cth)1. The statutory functions of the Fair Work Ombudsman include to commence proceedings in a court "to enforce" the Workplace Relations Act 1996 (Cth) and awards made under that Act2. The statutory functions of the Fair Work Ombudsman also include "to represent" employees who are or may become parties to proceedings in a court if the Fair Work Ombudsman considers that 1 Sections 681 and 696 of the Fair Work Act 2009 (Cth). 2 Section 682(1)(d) of the Fair Work Act 2009 (Cth), read with item 13(2) of the Fair Work (Transitional Provisions and Consequential Sched 18 Amendments) Act 2009 (Cth). Bell representing those employees will promote compliance with the Workplace Relations Act or such an award3. In the exercise of the first of those functions, as distinct from the second, the Fair Work Ombudsman commenced a proceeding against Ramsey in the Federal Court of Australia. The Fair Work Ombudsman sought in that proceeding orders under a section of the Workplace Relations Act which conferred power on an "eligible court" to impose a civil penalty on application by the Fair Work Ombudsman on a person bound by and in breach of an "applicable provision"4. The latter expression was defined to encompass a term of an award made under the Workplace Relations Act as well as a term of the Australian Fair Pay and Conditions Standard5. The section of the Workplace Relations Act which conferred power on an eligible court to impose a civil penalty went on to confer power on that court to order that a person found to be an "employer" pay an amount to a person found to be an "employee". The relevant sub-section provided6: "Where, in a proceeding against an employer under this section, it appears to the eligible court that an employee of the employer has not been paid an amount that the employer was required to pay under an applicable provision ... the court may order the employer to pay to the employee the amount of the underpayment." The Fair Work Ombudsman alleged in the proceeding against Ramsey in the Federal Court: that Ramsey, not Tempus, had been the employer of Mr Tomlinson and 10 other persons at the abattoir; that Ramsey, as employer, had been bound by the terms of an award applicable to employment in the meat industry made under the Workplace Relations Act7 as well as by the terms of the 3 Section 682(1)(f) of the Fair Work Act 2009 (Cth), read with item 13(2) of the Fair Work (Transitional Provisions and Consequential Sched 18 Amendments) Act 2009 (Cth). 4 Section 719 of the Workplace Relations Act 1996 (Cth), read with s 718 of that Act, s 701 of the Fair Work Act 2009 (Cth) and item 13(1) of Sched 18 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth). 5 Section 717 of the Workplace Relations Act 1996 (Cth). 6 Section 719(6) of the Workplace Relations Act 1996 (Cth). 7 Federal Meat Industry (Processing) Award 2000. Bell Australian Fair Pay and Conditions Standard8; and that Ramsey, as employer, had failed to pay Mr Tomlinson and the other 10 persons amounts which Ramsey was required to pay to them on termination of their employment under particular terms of the applicable award9 and under a particular term of the Australian Fair Pay and Conditions Standard10. The Fair Work Ombudsman sought a civil penalty for those breaches, together with orders that Ramsey pay Mr Tomlinson and the other persons the required amounts. Mr Tomlinson and the other persons were not parties to the proceeding. The principal issue in the proceeding in the Federal Court was whether Ramsey or Tempus had been the employer of Mr Tomlinson and the 10 other persons at the abattoir. The Federal Court (Buchanan J), after a trial on the merits in which Mr Tomlinson provided evidence, determined that issue adversely to Ramsey11. The Federal Court held: that Ramsey had been the true employer; that everything done by Tempus had been done on behalf of Ramsey; and that the interposition of Tempus was a sham. The Federal Court went on to make declarations which included: that Mr Tomlinson and eight of the other persons had been employed at the abattoir at least since October 2006 (and that the other two persons had been employed since October and November 2007 respectively); that the employment of each of those persons had been terminated by Ramsey in November 2008; and that Ramsey had breached specified terms of the applicable award and of the Australian Fair Pay and Conditions Standard in failing to make specified payments to those employees. At the time of making those declarations, the Federal Court also made orders that Ramsey pay to Mr Tomlinson and to each of the other 10 persons specified amounts calculated as the amounts which Ramsey had underpaid those employees together with interest. The Federal Court went on in a later phase of the proceeding to impose a civil penalty on Ramsey payable to the Commonwealth in respect of the breaches the Court had declared12. 8 Part 7 of the Workplace Relations Act 1996 (Cth). 9 Clause 10 of the Federal Meat Industry (Processing) Award 2000. 10 Section 235 of the Workplace Relations Act 1996 (Cth). 11 Fair Work Ombudsman v Ramsey Food Processing Pty Ltd (2011) 198 FCR 174. 12 Fair Work Ombudsman v Ramsey Food Processing Pty Ltd (No 2) [2012] FCA Bell Mr Tomlinson subsequently brought a proceeding against Ramsey in the District Court of New South Wales in which Mr Tomlinson claimed damages in negligence at common law in respect of a personal injury he had sustained when working at the abattoir in June 2008. The case that Mr Tomlinson sought to mount was that, while Tempus was his employer, Ramsey as the party in control of the workplace owed him a duty of care akin to that owed by an employer, and that Ramsey's breach of that duty caused his injuries. If Ramsey was Mr Tomlinson's "employer" in June 2008, Mr Tomlinson was prevented from bringing that claim, or from recovering damages, by a number of provisions of New South Wales legislation governing management of13, and limiting recovery for14, workplace injuries. Ramsey relied on those provisions in its defence in the District Court proceeding. Ramsey argued that Mr Tomlinson was estopped by the declarations and orders made in the Federal Court proceeding from denying that Ramsey was his employer. Ramsey argued in the alternative that Ramsey was in fact Mr Tomlinson's employer. Neither party suggested in the District Court, or has suggested at any stage since, that there was any relevant difference between an employer for the purposes of that New South Wales legislation and an employer for the purposes of the Fair Work Act and the Workplace Relations Act. The District Court (Mahony DCJ), after a trial on the merits, rejected Ramsey's argument of issue estoppel and found on the evidence before the District Court (which was more limited than the evidence that had been before the Federal Court) that Mr Tomlinson's employer in June 2008 had been Tempus and not Ramsey15. The District Court found the elements of Mr Tomlinson's cause of action in negligence to have been established and entered judgment for Mr Tomlinson against Ramsey for damages. 13 Sections 280A, 315 and 318A of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) and s 151C of the Workers Compensation Act 1987 (NSW). 14 Section 280B of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) and ss 151H and 151G of the Workers Compensation Act 1987 (NSW). 15 Tomlinson v Ramsey Food Processing Pty Ltd [2013] NSWDC 64 at [39]. Bell The question in the Court of Appeal The Court of Appeal of the Supreme Court of New South Wales (Meagher, Ward and Emmett JJA) unanimously allowed an appeal by Ramsey16. The Court of Appeal set aside the judgment entered in the District Court and ordered instead that there be judgment for Ramsey. The Court of Appeal held that the declarations and orders made in the earlier Federal Court proceeding created an estoppel on the issue of who had been Mr Tomlinson's employer between October 2006 and November 2008. That estoppel, the Court of Appeal held, was binding on Mr Tomlinson in the District Court proceeding by reason of Mr Tomlinson having been "privy" in interest with the Fair Work Ombudsman in the Federal Court proceeding according to the principle stated and applied in this Court in Ramsay v Pigram17. The Court of Appeal reasoned that Mr Tomlinson was privy in interest with the Fair Work Ombudsman according to that principle because the Fair Work Ombudsman, having sought those declarations and orders for his benefit, in a proceeding in which he participated by giving evidence, claimed in the Federal Court proceeding "under or through", or "on behalf of", Mr Tomlinson18. that the evidence before Emmett JA, with whom Ward JA agreed, indicated that he would have been disposed to allow Ramsey's appeal to the Court of Appeal on the alternative ground that Mr Tomlinson's employer in June 2008 had in fact been Ramsey and not Tempus19. In light of his conclusion that Mr Tomlinson was estopped from asserting the contrary, however, Emmett JA did not reach a concluded position on that alternative ground of appeal. Meagher JA, in separate reasons for judgment, did not address the alternative ground of appeal. the District Court established 16 Ramsey Food Processing Pty Ltd v Tomlinson [2014] NSWCA 237. 17 (1968) 118 CLR 271; [1968] HCA 34. 18 Ramsey Food Processing Pty Ltd v Tomlinson [2014] NSWCA 237 at [19], [22], 19 Ramsey Food Processing Pty Ltd v Tomlinson [2014] NSWCA 237 at [22], [93]- Bell The question in this Court Mr Tomlinson, in his appeal by special leave to this Court, challenges the holding of the Court of Appeal that he was estopped from asserting in the District Court proceeding that Ramsey was not his employer. He says that he was not privy in interest with the Fair Work Ombudsman. Mr Tomlinson says that he did not claim "under or through" the Fair Work Ombudsman in the District Court proceeding, nor did the Ombudsman claim "under or through" Mr Tomlinson in the Federal Court proceeding. Ramsey supports the reasoning of the Court of Appeal. By notice of contention, Ramsey also repeats the alternative argument, not determined in its appeal to the Court of Appeal, that the evidence before the District Court established that Mr Tomlinson's employer had in fact been Ramsey. The question in perspective It is common ground between Mr Tomlinson and Ramsey that the question of whether Mr Tomlinson was privy in interest with the Fair Work Ombudsman for the purpose of issue estoppel is to be determined by reference to the principle governing privity of interest stated and applied in this Court in Ramsay v Pigram. That principle, in the language of Barwick CJ, is that the "basic requirement of a privy in interest is that the privy must claim under or through the person of whom he is said to be a privy"20. It is not argued that some wider principle, along the lines of that which has since come to be adopted in the United Kingdom21 or New Zealand22 or Canada23, should now be adopted in Australia. Nor does resolution of the question of whether Mr Tomlinson was privy in interest with the Fair Work Ombudsman call for consideration of the related but distinct principle of mutuality, referred to in Ramsay v Pigram24, by which an 20 (1968) 118 CLR 271 at 279. 21 Eg Gleeson v J Wippell & Co Ltd [1977] 1 WLR 510 at 515; [1977] 3 All ER 54 at 59-60; Johnson v Gore Wood & Co [2002] 2 AC 1 at 32. 22 Eg Shiels v Blakeley [1986] 2 NZLR 262. 23 Eg Rasanen v Rosemount Instruments Ltd (1994) 112 DLR (4th) 683. 24 (1968) 118 CLR 271 at 276. Bell issue estoppel has traditionally been understood to be capable of assertion in a subsequent proceeding only by a party who was also a party, or the privy of a party, to the first proceeding25. The benefit of an estoppel in the District Court proceeding is claimed here only by Ramsey, which was both defendant in the District Court and respondent in the Federal Court. To put the principle governing who is privy in interest stated and applied in Ramsay v Pigram in perspective, however, it is appropriate to say something more generally as to the place of issue estoppel in Australian law. An exercise of judicial power, it has been held, involves "as a general rule, a decision settling for the future, as between defined persons or classes of persons, a question as to the existence of a right or obligation, so that an exercise of the power creates a new charter by reference to which that question is in future to be decided as between those persons or classes of persons"26. The rendering of a final judgment in that way "quells" the controversy between those persons27. The rights and obligations in controversy, as between those persons, cease to have an independent existence: they "merge" in that final judgment28. That merger has long been treated in Australia as equating to "res judicata" in the strict sense29. Estoppel in relation to judicial determinations is of a different nature. It is a common law doctrine informed, in its relevant application, by similar 25 Handley, Spencer Bower and Handley: Res Judicata, 4th ed (2009) at [9.05]. 26 R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361 at 374; [1970] HCA 8. 27 Fencott v Muller (1983) 152 CLR 570 at 608; [1983] HCA 12. 28 Victorian Stevedoring and General Contracting Co Pty Ltd and Meakes v Dignan (1931) 46 CLR 73 at 106; [1931] HCA 34; Blair v Curran (1939) 62 CLR 464 at 532; [1939] HCA 23; Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502 at 510; [1988] HCA 21. 29 Blair v Curran (1939) 62 CLR 464 at 532; Jackson v Goldsmith (1950) 81 CLR 446 at 466; [1950] HCA 22. Compare Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2014] AC 160 at 180 [17]. Bell considerations of finality and fairness30. Yet its operation is not confined to an exercise of judicial power; it also operates in the context of a final judgment having been rendered in other adversarial proceedings31. It operates in such a context as estoppel operates in other contexts: as a rule of law, to preclude the assertion of a right or obligation or the raising of an issue of fact or law32. Three forms of estoppel have now been recognised by the common law of Australia as having the potential to result from the rendering of a final judgment in an adversarial proceeding. The first is sometimes referred to as "cause of action estoppel"33. Estoppel in that form operates to preclude assertion in a subsequent proceeding of a claim to a right or obligation which was asserted in the proceeding and which was determined by the judgment. It is largely redundant where the final judgment was rendered in the exercise of judicial power, and where res judicata in the strict sense therefore applies to result in the merger of the right or obligation in the judgment. The second form of estoppel is almost always now referred to as "issue estoppel"34. Estoppel in that form operates to preclude the raising in a subsequent proceeding of an ultimate issue of fact or law which was necessarily resolved as a step in reaching the determination made in the judgment35. The classic expression of the primary consequence of its operation is that a "judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot 30 Dow Jones & Co Inc v Gutnick (2002) 210 CLR 575 at 604 [36]; [2002] HCA 56; D'Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at 17 [34]; [2005] HCA 31 Administration of Papua and New Guinea v Daera Guba (1973) 130 CLR 353 at 453; [1973] HCA 59; Kuligowski v Metrobus (2004) 220 CLR 363 at 373-374 [22]; [2004] HCA 34. 32 Jackson v Goldsmith (1950) 81 CLR 446 at 466. 33 The expression was coined by Diplock LJ in Thoday v Thoday [1964] P 181 at 197- 34 The expression was coined by Higgins J in Hoysted v Federal Commissioner of Taxation (1921) 29 CLR 537 at 560-561; [1921] HCA 56. 35 Blair v Curran (1939) 62 CLR 464 at 510, 531-533; Jackson v Goldsmith (1950) 81 CLR 446 at 466-467. Bell afterwards be raised between the same parties or their privies"36. The third form of estoppel is now most often referred to as "Anshun estoppel"37, although it is still sometimes referred to as the "extended principle" in Henderson v Henderson38. That third form of estoppel is an extension of the first and of the second. Estoppel in that extended form operates to preclude the assertion of a claim39, or the raising of an issue of fact or law40, if that claim or issue was so connected with the subject matter of the first proceeding as to have made it unreasonable in the context of that first proceeding for the claim not to have been made or the issue not to have been raised in that proceeding41. The extended form has been treated in Australia as a "true estoppel"42 and not as a form of res judicata in the strict sense43. Considerations similar to those which underpin this form of estoppel may support a preclusive abuse of process argument. The present significance of the recognition of those three forms of estoppel is that each has the potential to preclude assertion of a right or obligation, or the raising of an issue of fact or law, between parties to a proceeding or their privies. Absent a principled basis for distinction β and none 36 Blair v Curran (1939) 62 CLR 464 at 531. See also Kuligowski v Metrobus (2004) 220 CLR 363 at 373 [21]. 37 After Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; [1981] HCA 45. 38 (1843) 3 Hare 100 [67 ER 313]. 39 Eg Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; Bryant v Commonwealth Bank of Australia (1995) 57 FCR 287 at 297-298; Ling v Commonwealth (1996) 68 FCR 180 at 184, 188, 193. 40 Hoysted v Federal Commissioner of Taxation (1925) 37 CLR 290; [1926] AC 155. 41 Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 at 598, 602- 42 Rogers v The Queen (1994) 181 CLR 251 at 275; [1994] HCA 42. See also Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 at 601-602, rejecting the approach in Yat Tung Investment Co Ltd v Dao Heng Bank Ltd [1975] AC 581 43 Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502 at 509, Bell has been suggested β one principle must govern the identification of privies for the purpose of all forms of estoppel which result from the rendering of a final judgment in an adversarial proceeding. To explain contemporary adherence to the comparatively narrow principle in Ramsay v Pigram, it is appropriate also to explain the relationship between the doctrine of estoppel and the doctrine of abuse of process as it has since come to be recognised and applied in Australia. The doctrine of abuse of process is informed in part by similar considerations of finality and fairness. Applied to the assertion of rights or obligations, or to the raising of issues in successive proceedings, it overlaps with the doctrine of estoppel. Thus, the assertion of a right or obligation, or the raising of an issue of fact or law, in a subsequent proceeding can be simultaneously: (1) the subject of an estoppel which has resulted from a final judgment in an earlier proceeding; and (2) conduct which constitutes an abuse of process in the subsequent proceeding. Abuse of process, which may be invoked in areas in which estoppels also apply, is inherently broader and more flexible than estoppel. Although insusceptible of a formulation which comprises closed categories44, abuse of process is capable of application in any circumstances in which the use of a court's procedures would be unjustifiably oppressive to a party or would bring the administration of justice into disrepute45. It can for that reason be available to relieve against injustice to a party or impairment to the system of administration of justice which might otherwise be occasioned in circumstances where a party to a subsequent proceeding is not bound by an estoppel. Accordingly, it has been recognised that making a claim or raising an issue which was made or raised and determined in an earlier proceeding, or which ought reasonably to have been made or raised for determination in that earlier proceeding, can constitute an abuse of process even where the earlier proceeding might not have given rise to an estoppel46. Similarly, it has been recognised that making such a claim or raising such an issue can constitute an 44 Batistatos v Roads and Traffic Authority (NSW) (2006) 226 CLR 256 at 262 [1], 265 [9]; [2006] HCA 27. 45 PNJ v The Queen (2009) 83 ALJR 384 at 385-386 [3]; 252 ALR 612 at 613; [2009] HCA 6. 46 Walton v Gardiner (1993) 177 CLR 378 at 393; [1993] HCA 77, citing Reichel v Magrath (1889) 14 App Cas 665 at 668; Coffey v Secretary, Department of Social Security (1999) 86 FCR 434 at 443 [25]. Bell abuse of process where the party seeking to make the claim or to raise the issue in the later proceeding was neither a party to that earlier proceeding, nor the privy of a party to that earlier proceeding, and therefore could not be precluded by an estoppel47. The final element of the legal context relevant to explaining continuing adherence to the comparatively narrow principle in Ramsay v Pigram is the continuing existence of the distinct rule, equitable in origin, which prevents a person from actually recovering more than once for a given loss that results from breach of a given obligation48. The rule applies irrespective of the part, if any, which the person might have played in a proceeding which would otherwise facilitate the double recovery against which it guards. Its distinct operation was noted more than two centuries ago in the seminal explanation of issue estoppel49. There it was explained that "a finding upon title in trespass not only operates as a bar to the future recovery of damages for a trespass founded on the same injury, but also operates by way of estoppel to any action for an injury to the same supposed right of possession" and that "it is not the recovery, but the matter alleged by the party, and upon which the recovery proceeds, which creates the estoppel"50. The explanation continued51: "The recovery of itself in an action of trespass is only a bar to the future recovery of damages for the same injury: but the estoppel precludes parties and privies from contending to the contrary of that point, or matter of fact, which having been once distinctly put in issue by them, or by 47 O'Shane v Harbour Radio Pty Ltd (2013) 85 NSWLR 698 at 722-724 [99]-[111] and the cases there cited. See to similar effect Reichel v Magrath (1889) 14 App Cas 665 and Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2014] AC 160 at 185 [25], explaining Johnson v Gore Wood & Co [2002] 2 AC 1. 48 Roxborough v Rothmans of Pall Mall Australia Ltd (2001) 208 CLR 516 at 554 [99]; [2001] HCA 68. See also Registrar-General (NSW) v Behn (1981) 148 CLR 562 at 569; [1981] HCA 36; Thompson v Australian Capital Television Pty Ltd (1996) 186 CLR 574 at 608; [1996] HCA 38. 49 Outram v Morewood (1803) 3 East 346 [102 ER 630], quoted in Hoysted v Federal Commissioner of Taxation (1925) 37 CLR 290 at 299-300; [1926] AC 155 at 166- 50 Outram v Morewood (1803) 3 East 346 at 354-355 [102 ER 630 at 633]. 51 Outram v Morewood (1803) 3 East 346 at 355 [102 ER 630 at 633]. Bell those to whom they are privy in estate or law, has been, on such issue joined, solemnly found against them." The privity principle explained The principle adopted and applied in Ramsay v Pigram, as that governing the identification of a person who is privy in interest with a party to proceedings for the purpose of an estoppel resulting from the rendering of a final judgment, was the principle propounded in argument in that case by Mr Deane QC. By reference to a passage in an early text on the law of estoppel, Mr Deane advanced the following proposition52: "As regards estoppel, the same doctrine applies to each category, namely that one who claims through another is, to the extent of his claim, subject to and able to take advantage of all estoppels affecting the person through whom he claims." The higher-level principle which informed the formulation of that proposition was identified in a preceding passage in the same text. It was identified in terms of the maxim qui sentit commodum sentire debet et onus: who takes the benefit ought also to bear the burden53. That higher-level principle has long been recognised as informing the determination of the extent of the preclusive effect of other forms of estoppel54. It has particular resonance in relation to an estoppel which results from the rendering of a final judgment. Another early legal text explained its significance this way55: 52 Ramsay v Pigram (1968) 118 CLR 271 at 273-274, reflecting Everest, Everest and Strode's Law of Estoppel, 3rd ed (1923) at 55. 53 Everest, Everest and Strode's Law of Estoppel, 3rd ed (1923) at 52. See to similar effect Croom-Johnson and Bridgman, A Treatise on the Law of Evidence as Administered in England and Ireland, by His Honour the Late Judge Pitt Taylor, 12th ed (1931), vol 1 at 87 [90] and vol 2 at 1062-1064 [1689]-[1691], quoted in part in Ramsay v Pigram (1968) 118 CLR 271 at 287-288. 54 See generally Partridge v McIntosh & Sons Ltd (1933) 49 CLR 453 at 462-463; [1933] HCA 38 and the cases there cited. See also Taylor v Needham (1810) 2 Taunt 278 at 282-283 [127 ER 1084 at 1086]. 55 Herman, Commentaries on the Law of Estoppel and Res Judicata, (1886), vol 1 at 148 (footnotes omitted). Bell "The maxim 'qui sentit commodum sentire debet [e]t onus' is ... particularly explanatory of this branch of the law of estoppel, in accordance with which the record of a verdict followed by a judgment inter partes will estop not only the original parties, but those also who claim under them. A man will be bound by that which bound those under whom he claims quoad the subject-matter of the claim, for he who derives the benefit from a thing ought to sustain the burden, or feel the disadvantages attending it. And no man, except in certain cases, which are regulated by the statute law and law merchant, can transfer to another, a better right than he himself possesses. The grantee shall not be in a better condition than he who made the grant, and, therefore, privies in blood, law and estate shall be bound by and take advantage of estoppels. In order to give full effect to the rule by which parties are held estopped by a judgment, all persons who are represented by the parties or claim under them or in privity with them are as equally and as effectually estopped by the same proceedings." That is the essential rationale for the pithy, already quoted statement of principle by Barwick CJ in Ramsay v Pigram56. Barwick CJ's explanation of the application of that statement of principle in Ramsay v Pigram is useful in illustrating its content. The result was to deny that the Government of New South Wales, then sued by the respondent for damages in negligence arising out of a collision with a police car, was privy in interest with the police officer driving that car, who had earlier sued the respondent for damages in negligence arising out of the same collision. His "In every respect the action between the respondent and the police officer was personal to each of them, neither being in any sense in relation to the action or any of the issues involved in it, representative of another. Nor can it be said that the Government in any sense claims under or in virtue of the police officer or of any right of his, or that it derives any relevant interest through him." It is important to recognise that Barwick CJ's explanation of the application of his statement of principle had two limbs. The conclusion that the 56 Cf Richards v Jenkins (1887) 18 QBD 451 at 456-457. 57 (1968) 118 CLR 271 at 279. Bell Government was not privy in interest with the police officer was based on the absence of either representation of interest or derivation of interest. Consistently with the rationale for the principle, the explanation demonstrates that a party to a later proceeding ("A") can be privy in interest with a party to an earlier proceeding ("B") on either of two bases. One basis is that A might have had some legal interest in the outcome of the earlier proceeding which was represented by B, or that B has some legal interest in the outcome of the later proceeding which is represented by A. The extent to which the representation by A or B will be sufficient to bind the other is the critical issue which will be explored later in these reasons. The other basis is that, after that earlier proceeding was concluded by judgment, A might have acquired from B some legal interest in respect of which B would be affected by an estoppel which A then relies on in the later proceeding. Other bases on which a person might potentially be privy in interest with a party need not be explored. For present purposes, it is sufficient to focus on one operation of the first basis illustrated by the application of the principle in Ramsay v Pigram: where A has a legal interest in the outcome of the earlier proceeding which was represented by B. Subsequent applications of the principle in Ramsay v Pigram have for the most part correctly emphasised that the interest of the privy must in each case be a legal interest: an economic or other interest on the part of A in the outcome of the earlier proceeding is insufficient. Those applications have also correctly emphasised that, absent a legal interest, such influence as A might have had over the conduct of the earlier proceeding is irrelevant even if that influence amounted to control. Thus, directors of a company, who also held shares in its parent company, were held not to be estopped from pursuing a later action to recover damages to compensate for a loss on their own account in circumstances where they had stood to gain financially from an earlier action by the company claiming damages for loss on the company's account. That was despite the directors having been found to have exercised effective control over the company's conduct of that earlier action58. The constraint on the conduct of A in such 58 Effem Foods Pty Ltd v Trawl Industries of Australia Pty Ltd (1993) 43 FCR 510. See also Trawl Industries of Australia Pty Ltd (In liq) v Effem Foods Pty Ltd (1992) 36 FCR 406 and Trawl Industries of Australia Pty Ltd v Effem Foods Pty Ltd (1992) 108 ALR 353. Bell circumstances lies not in an estoppel but, in an appropriate case, in abuse of process59. One subsequent application of the principle is especially instructive for the present case. It is Young v Public Service Board60. There, government employees claiming a declaration that their employer, the Public Service Board, had not determined their ordinary hours of work were held not to be estopped by a contrary finding of fact made in the course of resolving an earlier dispute between the Board and an industrial association of which they were members. The reasoning of Lee J in support of that conclusion acknowledged that the industrial association had in that earlier dispute made a claim which it was in the interests of its members collectively to assert. The reasoning acknowledged also that the claim was one which would, if accepted, have resulted in an award which was made binding by statute on the employees as well as the Board. But it emphasised that the claim was made by the association in an industrial context in which members individually had no capacity to appear in or control the proceedings which resulted in the resolution of the dispute61. The reasoning emphasised, in addition, that the employees were claiming the declaration sought in the later proceedings simply as employees of the Board, without regard to the industrial association or their membership of it62. The first strand of the reasoning in Young illustrates that a person does not become bound by an estoppel by reason of a party having represented legal interests of that person in an earlier proceeding merely as a consequence of that party having lawfully asserted a claim which, if accepted, would have resulted in a determination enhancing or enforcing a legal entitlement of the person. In the absence of the person having authorised the assertion of the claim, the representation must at least have been of such nature as to have protected the person from being unjustifiably subjected to an unwanted estoppel. Why that should be so is not difficult to explain. It is a principle at the core of our legal system that a party claiming or denying the existence of a legal right or obligation should have an opportunity to present evidence and arguments to establish the facts and law on which the claim or denial is founded. There are 59 Cf Johnson v Gore Wood & Co [2002] 2 AC 1 at 30-31. 60 [1982] 2 NSWLR 456. See also Eljazzar v BHP Iron Ore Pty Ltd (1996) 65 IR 40. 61 [1982] 2 NSWLR 456 at 465-466. 62 [1982] 2 NSWLR 456 at 466. Bell countervailing considerations, some of which operate to create exceptions to that principle. Finality and fairness, including maintaining the certainty of past adjudicated outcomes and ensuring the predictability of future adjudicated outcomes, are amongst those countervailing considerations, and the estoppels informed by those considerations are amongst the exceptions to the principle. The operation of an estoppel, it must be remembered, is to preclude the assertion in a subsequent proceeding of what is claimed to be the truth. The justice of binding to an estoppel a person who was a party to an earlier proceeding is readily apparent: the person has already had an opportunity to present evidence and arguments. The justice of binding to an estoppel a person whose legal interests stood to benefit from the making or defending of a claim by someone else in an earlier proceeding will often also be apparent. With the benefit of the claim or defence also comes the detriment of the estoppel. That, at least, is the underlying theory. But it is a theory which has limitations. It would be quite unjust for such a person to be precluded from asserting what the person claims to be the truth if the person did not have an opportunity to exercise control over the presentation of evidence and the making of arguments in the earlier proceeding and if the potential detriment to the person from creating such an estoppel was not fairly taken into account in the decision to make or defend the claim in the earlier proceeding or in the conduct of the earlier proceeding. Traditional forms of representation which bind those represented to estoppels include representation by an agent, representation by a trustee, representation by a tutor or a guardian, and representation by another person under rules of court which permit representation of numerous persons who have the same interest in a proceeding63. To those traditional forms of representation can be added representation by a representative party in a modern class action64. Each of those forms of representation is typically the subject of fiduciary duties imposed on the representing party or of procedures overseen by the court (of which opt-in or opt-out procedures and approval of settlements in representative or class actions are examples), or of both, which guard against collateral risks of representation, including the risk to a represented person of the detriment of an estoppel operating in a subsequent proceeding outweighing the benefit to that person of participating in the current proceeding. 63 As to the latter, see Carnie v Esanda Finance Corporation Ltd (1995) 182 CLR 398 at 423-424; [1995] HCA 9. 64 Zhang v Minister for Immigration, Local Government and Ethnic Affairs (1993) 45 FCR 384 at 399-406. Bell That is not necessarily the nature of the representation which occurs in a proceeding commenced by a statutory entity (whether a regulatory or other authority) or a statutory office-holder in the exercise of a power or capacity to make a claim to enforce a legal entitlement of another person. The entity or office-holder necessarily acts for statutorily mandated or permitted reasons within a statutorily defined area of responsibility in making such a claim. Other than where the entity or office-holder is specifically required or authorised by statute to make such a claim as a representative of another person, the entity or office-holder would not ordinarily be required by statute to consider interests of the person beyond those interests which fall within its own statutorily defined area of responsibility. The entity or office-holder might not even be permitted to consider broader interests of the other person, because to do so might conflict with the proper discharge of that statutory responsibility. Were a person whose legal entitlement the statutory entity or office-holder claimed to enforce thereby to be privy in interest with the entity or office-holder for the purpose of the common law doctrine of estoppel, pursuit of the claim by the statutory entity might foreclose not only the pursuit of the same and other claims by that person, but also the raising by that person of issues of fact or of law in defence of claims brought against that person. The entity or office-holder, in acting within its statutorily defined area of responsibility, might in that way unwittingly preclude the future enforcement of other rights or obligations of far more value to that person. For the conduct of the statutory entity or statutory office-holder to constrain the future conduct of the person would therefore have the real potential not only to occasion injustice to that person but to impose a practical impediment the entity or statutory office-holder's statutory responsibilities. If such a result is not imposed by the statute under which the entity or office-holder acts, then such a result should not be superimposed by the common law of estoppel. the performance of The privity principle applied The Court of Appeal erred in concluding that the Fair Work Ombudsman was Mr Tomlinson's privy on the basis that, in the Federal Court proceeding, the Fair Work Ombudsman was enforcing Mr Tomlinson's entitlements "under or through", or "on behalf of", Mr Tomlinson. In truth, the Fair Work Ombudsman was acting pursuant to his statutory power to commence proceedings in a court Bell "to enforce" the Workplace Relations Act and an award made under that Act65. That power was not derived from Mr Tomlinson or his entitlements. The Fair Work Ombudsman was not acting pursuant to his distinct power "to represent" employees who are, or may become, a party to proceedings in a court66. The orders for the payment of Mr Tomlinson's entitlements were made, not in satisfaction of a claim asserted on behalf of Mr Tomlinson by the Fair Work Ombudsman as his representative, but pursuant to the power of the court to make such an order, which power arose when the court found that employees had not been paid their entitlements. The statutory function conferred by the Fair Work Act on the Fair Work Ombudsman of commencing proceedings in a court to enforce terms of the Australian Fair Pay and Conditions Standard and of awards made under the Workplace Relations Act, as distinct from the statutory function of representing employees who are or may become parties to proceedings in a court, cannot be interpreted as requiring the Fair Work Ombudsman to consider legal interests of employees beyond the legal interests specifically protected by the enforcement action the Fair Work Ombudsman is authorised to undertake. Nor are those wider legal interests protected by the procedures which govern the exercise of power on the part of an eligible court. Performing that function and invoking those procedures, the Fair Work Ombudsman did not represent the legal interests of Mr Tomlinson, in the sense which gives rise to an estoppel, by seeking in the Federal Court orders that Ramsey pay Mr Tomlinson and others amounts which Ramsey had failed to pay in breach of applicable terms. The fact that Mr Tomlinson had complained to the Fair Work Ombudsman and the fact that he provided evidence in the proceeding make no difference to that conclusion. Counsel for Ramsey disavowed any suggestion that Mr Tomlinson in fact gave to the Fair Work Ombudsman some additional non-statutory authority to act as his agent. The Fair Work Ombudsman acted in the discharge of its own statutory responsibility. It follows that the declarations and orders made by the Federal Court in the proceeding commenced by the Fair Work Ombudsman created no estoppel binding on Mr Tomlinson in the subsequent District Court proceeding or in any 65 Section 682(1)(d) of the Fair Work Act 2009 (Cth), read with item 13(2) of the Fair Work (Transitional Provisions and Consequential Sched 18 Amendments) Act 2009 (Cth). 66 Section 682(1)(f) of the Fair Work Act 2009 (Cth). Bell other subsequent proceeding between Mr Tomlinson and Ramsey. Mr Tomlinson was paid the amount that the Federal Court determined Ramsey to have underpaid and that it ordered Ramsey to pay to him, Mr Tomlinson would be prevented from personally pursuing Ramsey for the same amount. That would not be because of the operation of an estoppel arising from the order made by the Federal Court. It would be the result of the operation of the distinct rule against double recovery. It has never been suggested that Mr Tomlinson's conduct in bringing the District Court proceeding constituted an abuse of process. Disposition of the appeal There remains the question, raised but not determined in Ramsey's appeal to the Court of Appeal and raised again by Ramsey in its notice of contention in this appeal, as to whether or not the evidence before the District Court established that Mr Tomlinson's employer had in fact been Ramsey. Neither party suggests that the determination of that question involves any novel or important question of principle. What the determination of that question does involve is an analysis of the evidence before the District Court as distinct from that which had been before the Federal Court. It is inappropriate that such an evidentiary analysis be undertaken for the first time in this Court. The appropriate disposition of this appeal, in those circumstances, is by the making of the following orders: (1) Appeal allowed. Set aside paragraphs 2, 3, 4 and 5 of the order of the Court of Appeal of the Supreme Court of New South Wales made on 21 July Remit the matter to the Court of Appeal to determine the issue raised by the respondent's notice of contention in this Court. The respondent pay the appellant's costs of the appeal to this Court and of the appeal to date in the Court of Appeal. Nettle NETTLE J. In 2010, the Fair Work Ombudsman instituted a proceeding in the Federal Court of Australia ("the Fair Work proceeding") against the respondent ("Ramsey Food") in which the Ombudsman ultimately succeeded. In giving judgment in favour of the Ombudsman, Buchanan J found, inter alia, that at relevant times Ramsey Food was the appellant's employer and that Ramsey Food had failed to pay the appellant amounts due to the appellant as an employee. The question for determination in this appeal is whether the appellant was estopped by those findings from contending in a later District Court proceeding between the appellant and Ramsey Food that, at relevant times, Tempus Holdings Pty Ltd ("Tempus") was the appellant's employer. For the reasons which follow, it should be concluded that the appellant was not. The facts On 4 October 2006, Greenwood J handed down judgment in McIlwain v Ramsey Food Packaging Pty Ltd (No 4)67 ("the McIlwain proceeding"). His Honour found that three of the companies in what was called "the Ramsey Group" had breached s 298K of the Workplace Relations Act 1996 (Cth) by terminating the employment of 12 employees for reasons that were prohibited under the Act. Greenwood J imposed penalties for breach of the Act totalling $84,000 and ordered that compensation be paid to the employees. In August 2010, the Fair Work Ombudsman instituted the Fair Work proceeding against Ramsey Food and Mr Stuart Ramsey pursuant to s 682(1)(d) of the Fair Work Act 2009 (Cth) and s 719 of the Workplace Relations Act. The claim alleged that Ramsey Food had acted in breach of the Federal Meat Industry (Processing) Award 2000 ("the Award") and thus the Fair Work Act by failing to pay the appellant and ten other former employees of Ramsey Food payments of wages in lieu of notice, severance pay, accrued annual leave and interest on those entitlements. Buchanan J handed down judgment in the Fair Work proceeding on 19 October 201168. In his reasons for judgment, his Honour described the issue for determination as being whether Ramsey Food as the employer of 11 "complainant employees" failed to pay those employees amounts due to them under the Award and s 235 of the Workplace Relations Act (as it then stood). He defined the principal question in the proceeding as being whether the employees had been employed by Ramsey Food (as the Ombudsman contended) or by 67 (2006) 158 IR 181; [2006] FCA 1302. 68 Fair Work Ombudsman v Ramsey Food Processing Pty Ltd (2011) 198 FCR 174. Nettle Tempus, a company which had been "inter-positioned between [Ramsey Food] and the employees" (as Ramsey Food contended). There was also a related question of whether Mr Ramsey was knowingly concerned in the conduct of Ramsey Food69. Buchanan J found that, at all relevant times since 1998, Mr Ramsey had been in effective control of the management and operation of an abattoir in Grafton, New South Wales, and had so exercised control through a number of companies established by him or at his request which were called the Ramsey Group70. Then, shortly after Greenwood J made final orders in the McIlwain proceeding, Mr Ramsey arranged for the acquisition of a new shelf company (Tempus) to be added to the Ramsey Group and at the same time for the winding up of each of the three employing companies71. Then, having instigated those arrangements, Mr Ramsey directed that letters dated 16 October 2006 be sent by Tempus to each of the 11 complainant employees, as follows72: "On the 4th October last the Federal Court of Australia made orders against your employer. These orders fined, penalised and awarded costs against your employer causing it to be insolvent and accordingly, your employer cannot continue to incur wage commitments whilst insolvent. Accordingly, your employment with your employer is at an end. You are at liberty to approach Tempus Holdings Pty Limited who may have a position for you, and who may be willing to honour your entitlements." In consequence of those measures, nine of the 11 complainant employees, including the appellant, "were transferred to the books of Tempus at about this 69 Fair Work Ombudsman v Ramsey Food Processing Pty Ltd (2011) 198 FCR 174 at 70 Fair Work Ombudsman v Ramsey Food Processing Pty Ltd (2011) 198 FCR 174 at 71 Fair Work Ombudsman v Ramsey Food Processing Pty Ltd (2011) 198 FCR 174 at 72 Fair Work Ombudsman v Ramsey Food Processing Pty Ltd (2011) 198 FCR 174 at Nettle time"73 but, apart from that alteration, "nothing changed for employees who were allowed to remain in employment"74: "The result of the practices followed at the direction of Mr Ramsey was that money passed through the Tempus account only so often and to such an extent as was necessary to shortly thereafter discharge the obligations assumed by Tempus. Those were in truth nothing more than clerical arrangements. For all practical purposes the Tempus bank account was treated as an account within the Ramsey Group. I am satisfied, on the whole of the evidence, that those arrangements were adopted so as to give colour to the proposition that it was Tempus, rather than [Ramsey Food], which was legally liable for those payments. The effect of Mr Ramsey's evidence was that similar practices had earlier been followed with respect to the four companies within the Ramsey Group used to employ labour at the abattoir before late 2006."75 Buchanan J found that application of relevant legal principle to the facts so found led to three possible conclusions in support of the Ombudsman's case. The first was that, despite the interposition of Tempus between Ramsey Food and the complainant employees, Tempus did not become or act as the employer of the complainant employees as a matter of "real substance"76: "First, despite the [arrangements], Tempus never became, nor acted as, the employer of the complainant employees. Tempus did not exercise any form of control over the engagement, performance of work, payment or ultimate termination of employment of any of the complainant employees. All such responsibilities were borne by some different legal entity ... [Ramsey Food], in whose business the complainant employees worked and on whose behalf all the functions referred to above were carried out."77 73 Fair Work Ombudsman v Ramsey Food Processing Pty Ltd (2011) 198 FCR 174 at 74 Fair Work Ombudsman v Ramsey Food Processing Pty Ltd (2011) 198 FCR 174 at 75 Fair Work Ombudsman v Ramsey Food Processing Pty Ltd (2011) 198 FCR 174 at 76 Fair Work Ombudsman v Ramsey Food Processing Pty Ltd (2011) 198 FCR 174 at 77 Fair Work Ombudsman v Ramsey Food Processing Pty Ltd (2011) 198 FCR 174 at Nettle The second was that, if the arrangements were effective, Tempus acted as Ramsey Food's agent78: "[I]f any steps taken to inter-position Tempus between the complainant employees and [Ramsey Food] are to be regarded as having any effect at all it is abundantly clear that everything which was done in the name of Tempus was done by Tempus (or others) acting on behalf of [Ramsey Food]." The third was that "everything done in the name of Tempus was ... a sham"; but his Honour added that it was unnecessary to say so and that the conclusion that it was a sham "supports and reinforces the earlier two, although [it is] not necessary for either"79. In the result, Buchanan J concluded that the Ombudsman's case succeeded and he made orders accordingly, including orders pursuant to s 719 of the Workplace Relations Act that Ramsey Food pay the appellant the amount by which his entitlements had been underpaid. The District Court proceeding Subsequently, the appellant instituted a proceeding against Ramsey Food in the District Court of New South Wales for damages for personal injuries suffered in 2008 in the course of his employment at the abattoir ("the District Court proceeding"). By his statement of claim in the District Court proceeding, the appellant alleged that, at relevant times, he had been an employee of Tempus and that, pursuant to a labour hire agreement (of the particulars of which it was stated he was unaware), Tempus had made him available to Ramsey Food to perform work in the abattoir. The appellant further alleged that, by reason thereof, Ramsey Food had become the appellant's employer pro hac vice and, as such, Ramsey Food had negligently failed to take sufficient care of the appellant as employee, whereby the appellant had been injured. In its defence, apart from denying negligence and in the alternative alleging contributory negligence, Ramsey Food pleaded that, by reason of Buchanan J's finding in the Fair Work proceeding that the appellant was at relevant times employed by Ramsey Food, the appellant was estopped from 78 Fair Work Ombudsman v Ramsey Food Processing Pty Ltd (2011) 198 FCR 174 at 79 Fair Work Ombudsman v Ramsey Food Processing Pty Ltd (2011) 198 FCR 174 at Nettle contending that he was at those times employed by Tempus. It was also pleaded that the appellant had not made a claim against Ramsey Food for lump sum compensation, or been paid lump sum compensation, in accordance with ss 280A and 280B of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) and s 151C of the Workers Compensation Act 1987 (NSW) and had not served a pre-filing statement on Ramsey Food or referred the claim to mediation in accordance with ss 315 and 318A of the Workplace Injury Management and Workers Compensation Act; and, consequently, that the appellant was precluded by those provisions from bringing the District Court proceeding. Relevant legislation At relevant times s 280A of the Workplace Injury Management and Workers Compensation Act provided that a claim for work injury damages in respect of an injury cannot be made unless a claim for "lump sum compensation"80 is made before or at the same time as the claim for damages. Section 280B provided that damages cannot be recovered from "the employer liable to pay compensation under this Act" unless and until any permanent impairment compensation to which the worker is entitled has been paid. Section 151C of the Workers Compensation Act provided that "[a] person to whom compensation is payable under this Act" is not entitled to commence proceedings for damages in respect of work injury "against the employer liable to pay that compensation" until six months after giving notice of the injury to "the employer". Sections 315 and 318 of the Workplace Injury Management and Workers Compensation Act provided inter alia that, before a claimant may commence court proceedings for recovery of work injury damages, the claimant must serve a "pre-filing statement" on the defendant and for the claim pleaded to be limited to the claim made in the pre-filing statement. Section 318A provided that a claimant must refer a claim for work injury damages to mediation before commencing court proceedings. The appellant's claim was in common law negligence rather than for compensation under Injury Management and Workers Compensation Act and the Workers Compensation Act. He had thus not complied with the statutory requirements set out in those Acts in respect of the Workplace 80 "Lump sum compensation" was defined in s 4 of the Workplace Injury Management and Workers Compensation Act as meaning compensation under Pt 3, Div 4 of the Workers Compensation Act. In substance, lump sum compensation is compensation payable for permanent impairment suffered by an injured worker. Nettle Ramsey Food. If, therefore, the appellant were found to have been employed by Ramsey Food, the claim would necessarily fail. It was, however, common ground between the parties in the District Court that, if the appellant were found to have been an employee of Tempus, the action would be governed by the Civil Liability Act 2002 (NSW) and thus the pre-action requirements in the Workplace Injury Management and Workers Compensation Act and the Workers Compensation Act would not apply. The District Court's judgment At the outset of the District Court proceeding, counsel for Ramsey Food applied to have the plea of estoppel dealt with as a preliminary issue but the judge rightly chose to defer consideration of the point until after the evidence had been heard81. In his reasons for judgment following trial, the judge defined the estoppel issue as being whether he was: "bound by the judgment of Buchanan J in the [Fair Work proceeding] to the effect that the Plaintiff was employed by the defendant at the time of his injury. The defendant contends that that finding creates an issue estoppel." The judge concluded that the finding did not create the issue estoppel alleged, for three reasons. The first was that he considered that a natural person or corporation may be an employer for one purpose and not another. Although the judge did not say so in terms, it appears that what his Honour meant to convey was that, although Tempus was not regarded as the employer for the purposes of the Fair Work proceeding, it did not follow that Tempus could not be regarded as the employer for the purpose of the District Court proceeding; and, in view of the way in which Tempus had acted, it should be regarded as the employer for the purposes of the District Court proceeding. In that connection, the judge referred to the fact that the letter of 16 October 2006 made it clear that the appellant's employment by one of the employing companies had been terminated. From that point on, the appellant had believed that he was employed by Tempus. Tempus provided labour to the abattoir and the appellant was one of the employees so provided. Tempus paid those employees. Tempus took out workers' compensation insurance and made claims for employees on its workers' compensation policy. And Tempus issued group certificates to its employees and had tax office accounts in its name and credited super guarantee charge in respect of its employees. 81 See Wickstead v Browne (1992) 30 NSWLR 1 at 5-6 per Kirby P in dissent; affirmed by this Court (1993) 10 Leg Rep SL2. Nettle The second reason was based on the reasoning of Lee J in Young v Public Service Board82. The judge held that, because the appellant was not party to the Fair Work proceeding and had no control over the Fair Work proceeding, and because the subject matter of the Fair Work proceeding was in substance different from the issues raised in the District Court proceeding, there was no privity of interest between the appellant and the Ombudsman. The third reason was that, if there were privity of interest, it was apparent that Ramsey Food was seeking to take advantage of an arrangement which Buchanan J had labelled a "sham" and, in the judge's view, equity would intervene to prevent Ramsey Food placing reliance on the arrangement83. Ultimately, therefore, the judge gave judgment for the appellant in the amount of $155,069 for damages for work injury suffered in the course of his employment at the abattoir, with no reduction for contributory negligence. The appeal to the Court of Appeal The Court of Appeal held that the judge erred in rejecting Ramsey Food's plea that the appellant's claim was barred by reason of the issue estoppel alleged. Emmett JA delivered the principal judgment. His Honour reasoned that the only question litigated in the Fair Work proceeding so far as the appellant was concerned was whether Ramsey Food was liable to pay the amounts to which the appellant was entitled on the termination of his employment, and that the only basis on which Ramsey Food could be liable to pay those amounts was that Ramsey Food was the appellant's employer during the relevant period. Buchanan J had finally determined that Ramsey Food was the employer at that time. Hence, to assert the contrary was to assert that Buchanan J's judgment was erroneous. Emmett JA observed that privity of interest is a matter of substance, not form, and that the necessary degree of identity of interest may arise where "the relationship is mutual"84. But his Honour recognised that, because the Ombudsman was carrying out the function set out in s 682(1)(d) of the Fair Work Act, the mere fact of the Fair Work proceeding was not enough to make the Ombudsman the appellant's privy. Nevertheless, his Honour said, the facts were that the Ombudsman had asserted the appellant's claim against Ramsey Food; the appellant had participated in the claim by providing affidavit evidence in support 82 [1982] 2 NSWLR 456. 83 Cf Linsley v Petrie [1998] 1 VR 427 at 443-446 per Callaway JA. 84 Ramsey Food Processing Pty Ltd v Tomlinson [2014] NSWCA 237 at [83]. Nettle of it; declarations and orders had been made for the appellant's benefit; and thus "an inference is clearly available that [the appellant] authorised the Fair Work Ombudsman to make the claim on his behalf"85. It followed, his Honour concluded, that, although the Ombudsman was acting in the public interest in seeking penalties against Ramsey Food, the Ombudsman was also making claims under s 719 of the Workplace Relations Act "on behalf of the claimant employees", including the appellant86. That meant that the Ombudsman was the appellant's privy for the purposes of issue estoppel87. Meagher JA delivered a concurring judgment in which he added short reasons of his own. He said that, because of the nature of the relief which was sought in the Fair Work proceeding, it was necessary for the Ombudsman to establish that Ramsey Food was the appellant's employer at the relevant time. That fact was so established and Buchanan J so finally determined. The claim for the orders which Buchanan J made in favour of the appellant was made on behalf of and for the benefit of the appellant, and with his consent. Hence, the claim was, in the language of Barwick CJ in Ramsay v Pigram, made by the Ombudsman "under or through the person of whom he is said to be a privy"88. Ward JA agreed with Emmett JA and Meagher JA. The appellant's contentions Before this Court, the appellant contended that the Court of Appeal erred by failing to consider the decisions in Young v Public Service Board89 and Eljazzar v BHP Iron Ore Pty Ltd90, and thus in failing to hold that, because the appellant's position was relevantly no different from those of the claimants in those cases, there was no issue estoppel. In Young, a professional association had previously brought an Industrial Commission proceeding for interpretation of an industrial award covering the association's members. None of the members of the association was party to that 85 Ramsey Food Processing Pty Ltd v Tomlinson [2014] NSWCA 237 at [90]. 86 Ramsey Food Processing Pty Ltd v Tomlinson [2014] NSWCA 237 at [91]. 87 Ramsey Food Processing Pty Ltd v Tomlinson [2014] NSWCA 237 at [91]. 88 (1968) 118 CLR 271 at 279; [1968] HCA 34, quoted in Ramsey Food Processing Pty Ltd v Tomlinson [2014] NSWCA 237 at [19]. 89 [1982] 2 NSWLR 456. Nettle proceeding. In the Supreme Court, Lee J held that the members of the association were not bound by findings essential to the Commission's interpretation of the award. His Honour reasoned that there was no privity of interest between the members and their association because the proceeding had been brought by the association for relief on an "industry" basis and the individual employees had no control over it91. Most importantly, his Honour said, the proceeding before him had not been brought "through or under"92 the association. In Trawl Industries of Australia Pty Ltd (In liq) v Effem Foods Pty Ltd93, Gummow J referred to Young with apparent approval as having followed the principles illustrated by Ramsay v Pigram94. the union instituted a proceeding In Eljazzar95, a union had entered into an industrial agreement with an employer that obliged the employer to refer any unresolved industrial dispute to the Western Australian Industrial Relations Commission. Pursuant to that agreement, the Commission for determination of whether the dismissal of two employees had been unfair. The Commission found that it had not been. In separate proceedings brought by one of the employees in the Industrial Relations Court of Australia, Madgwick J held that the employee was not estopped by that finding from later instituting proceedings on his own behalf for unfair dismissal. His Honour reasoned that the union "had legitimate interests of its own to consider, which may or may not entirely have coincided" with the interests of the claimant96. Although the claimant was one of the intended beneficiaries of the union's application to the Commission, in a practical sense the claimant had a relatively limited capacity to control the way his case was put and the extent to which it was advanced, still less to ensure that only his own interests were taken into account97. Thus, his Honour concluded, it could not be said that the claimant had de facto assumed 91 Young [1982] 2 NSWLR 456 at 466. 92 Young [1982] 2 NSWLR 456 at 466; see Ramsay v Pigram (1968) 118 CLR 271 at 93 (1992) 36 FCR 406 at 414. 94 (1968) 118 CLR 271. 96 (1996) 65 IR 40 at 43. 97 (1996) 65 IR 40 at 43. Nettle the role of an "actual party"98 or that there was otherwise a sufficient degree of identification between the union and the claimant to make it just to hold that the decision should be binding against the claimant99. Hence, there was no privity of interest. Analysis There appears to be some justification for the appellant's complaint that the Court of Appeal did not refer to Young or Eljazzar. Counsel for the appellant placed heavy reliance on both decisions in his submissions before the Court of Appeal and yet none of the judges of appeal mentioned either decision, still less explained why they considered each to be inapposite. Possibly, the Court of Appeal considered that Young was distinguishable on the basis that the relief which the professional association sought in that case was the interpretation of an award on an industry-wide basis. The true substance of the dispute was thus considered to be a dispute between the union and the employer rather than between the employer and individual members. It was not open to individual members of the professional association to be joined as parties to the proceeding or otherwise to influence the conduct or outcome of it. In contrast, what the Ombudsman sought in the Fair Work proceeding included orders for payment to the so-called complainant employees of the amounts which Ramsey Food had underpaid on account of the employees' statutory entitlements. As Emmett JA remarked, the true substance of the dispute was to that extent whether Ramsey Food was obligated to the employees in the amounts which they claimed. As Emmett JA also observed, the appellant was involved in the proceeding to the extent of swearing an affidavit in support of the claim100. Eljazzar is perhaps also distinguishable on the basis that, in that case, although the union's claim was specifically addressed to the lawfulness of the termination of the employment of two of its members, there was no opportunity for the two members to be joined to the proceeding and no opportunity for them to influence the conduct or outcome of the proceeding. There was as well a clear 98 (1996) 65 IR 40 at 44; cf Trawl (1992) 36 FCR 406 at 413-417 per Gummow J; Effem Foods Pty Ltd v Trawl Industries of Australia Pty Ltd (Receivers and Managers Appointed, In Liquidation) (1993) 43 FCR 510 at 520-528 per Northrop and Lee JJ, 534-543 per Burchett J. 99 Cf Gleeson v J Wippell & Co Ltd [1977] 1 WLR 510 at 515 per Megarry VC; [1977] 3 All ER 54 at 60. 100 Ramsey Food Processing Pty Ltd v Tomlinson [2014] NSWCA 237 at [89]-[91]. Nettle actual or potential conflict of interest between the two members, and, therefore, a potential conflict of interest between each member and the union. In contrast, in this case there was undisputed evidence that the appellant went to the Ombudsman seeking assistance in recovering his unpaid entitlements. To that extent, the appellant was an initiator of the Fair Work proceeding. As Emmett JA said, the appellant gave evidence in the Fair Work proceeding. And as was conceded in argument before this Court, the appellant could have been joined as a party to the Fair Work proceeding. There was also less chance of an actual or potential conflict of interest between the Ombudsman and the appellant in the Fair Work proceeding. Even allowing for those differences, however β why should they be considered enough to require the conclusion that the appellant was bound to the outcome of the claim made by the Ombudsman in respect of the appellant and such findings of fact as were essential to its outcome? The elements of issue estoppel In Kuligowski v Metrobus101, this Court adopted Lord Guest's formulation of the elements of issue estoppel in Carl Zeiss Stiftung v Rayner & Keeler Ltd (No 2). That was as follows102: "(1) that the same question has been decided; (2) that the judicial decision which is said to create the estoppel was final; and, (3) that the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised or their privies." The notion of privies was earlier essayed by Barwick CJ in an oft-cited passage of his judgment in Ramsay v Pigram. In that case, the respondent had been involved in a motor accident with a vehicle driven by a police officer. In an earlier action brought by the police officer against the respondent for damages caused by the respondent's negligence, the respondent had pleaded contributory negligence and it had been held that the police officer was without negligence. The respondent subsequently brought an action against the government for damages suffered as a result of the accident, and once again alleged that the accident was caused by the police officer's negligence. In response, the government pleaded that the respondent was estopped from controverting the determination in the previous proceeding that the police officer was without 101 (2004) 220 CLR 363 at 373 [21] per Gleeson CJ, McHugh, Gummow, Kirby, Hayne, Callinan and Heydon JJ; [2004] HCA 34. 102 [1967] 1 AC 853 at 935 (emphasis added). Nettle negligence103. It was held that there was no estoppel because there was no privity of interest. The government were not claiming under or through the police officer. The police officer had not sued the respondent on behalf of the government. The government had no interest in his claim. Hence the government had no claim under or through him to the benefit of the determination that he was without negligence. Barwick CJ expressed the position thus104: "Of the three classes of privies of blood, of title and of interest, the only one which is submitted and indeed could be submitted to be relevant is that of a privy in interest. ... The basic requirement of a privy in interest is that the privy must claim under or through the person of whom he is said to be a privy. Here it is quite clear that the Government had no interest in the action between the respondent and the police officer: nor can it be said that the action brought by the police officer was brought by him in any sense on behalf of the Government or that in relation to the defence of contributory negligence the respondent could have been treating the Government as the real 'defendant' to that claim. In every respect the action between the respondent and the police officer was personal to each of them, neither being in any sense in relation to the action or any of the issues involved in it, representative of another. Nor can it be said that the Government in any sense claims under or in virtue of the police officer or of any right of his, or that it derives any relevant interest through him." Claim "under or through" a privy The concept of a claim under or through a privy goes back a long way. To begin with, a final decision of a court of competent jurisdiction was only binding between parties to the proceeding. But, by at least the early nineteenth century, it had been extended to a party claiming under or through a party to the proceeding. Lord Penzance so explained the development of it in Spencer v Williams105, as follows: "The decision in Barrs v Jackson106 was founded on a true principle, and supported by a sound judgment. If two parties have once, before a court 103 (1968) 118 CLR 271 at 275. 104 (1968) 118 CLR 271 at 279 (emphasis added). 105 (1871) LR 2 P & D 230 at 235-237 (one footnote omitted). 106 (1845) 1 Ph 582 [41 ER 754]. Nettle of competent jurisdiction, litigated any question of fact, and that question has been finally decided, it is not reasonable that either of them, in any other court, should re-open it. ... Such was the case of Barrs v Jackson, in which the Court of Chancery held the parties were barred. It is material to observe, in passing, that in the Court of Chancery, in that case, the parties were actually, one a party to the suit in the Ecclesiastical Court, and the other a party claiming under the party to the original suit. So that the principle is carried one degree further, and not only is the suit barred where the parties are the same, but where they claim under the original parties. Can the doctrine in these cases be extended any further? In the suit before me the parties are not the same as in the suits in the Court of Chancery, nor do they claim under the same. The parties in the suits of Chancery were Sarah Spencer, Samuel Williams, and others. Here the plaintiffs are the children of Sarah Spencer, but they do not claim through their mother as such ... they rest their claim on the ground that Mary Emsley died intestate ... It is proper, therefore, where the question is raised between the same parties, or those claiming under them, that they should be estopped; but the decisions give no authority for a proposition of a wider character". Unsurprisingly, the expression "under or through" is redolent of the party's claim either deriving from or otherwise depending upon the privy's title. Clearly enough, however, it now goes further than that. In Carl Zeiss, Lord Reid described the sufficiency of connection as existing where the putative privy of a party to a subsequent proceeding has sued or defended in a previous proceeding "on account of or for the benefit of" the party to the subsequent proceeding107. The difficulty is that the precise content of that concept is not yet settled. It is established by the decided cases that privity of interest exists where party and privy share the same interest, in the sense that they are equally entitled to assert a discrete legal right; or where they share an interest by reason of an established legal or equitable relationship, such as agency or trusteeship; or, in some of the more recently decided cases, where the privy claims "under or through" or "on account of or for the benefit of" the party in a manner which is sufficiently analogous to one or other of the same interest or established legal or equitable relationship cases to warrant its inclusion. But the problem is in deciding what is sufficiently analogous. Plainly, "on account of or for the benefit of" includes cases where a trustee has sued or defended on behalf of a beneficiary and where a party to a proceeding relies on the putative privy's title. But it also extends to cases where 107 [1967] 1 AC 853 at 911-912. Nettle a party has employed a servant or agent in an attempt to re-litigate an issue already determined against the principal in a previous proceeding108 and where an action has been brought by a party at the direction and with the authority of the putative privy109; and, in England, it has been held to extend to a case where a party to litigation is "the corporate embodiment" of a natural person in the sense that the natural person made decisions and gave instructions on behalf of the corporation110. In England, it has also been said that it is enough that there be "a sufficient degree of identification between the two to make it just to hold that the decision to which one was party should be binding in proceedings to which the other is party"111. But in contrast, in this country, that formulation has been judicially criticised for its evident circularity112 β it is what Lord Wright might perhaps have denigrated as "idem per idem"113 β and, in any event, it is subject to the limitations of any category of indeterminate reference114. The approach in this country, therefore, remains one of identifying characteristics of a relationship between party and privy which, although not amounting to a shared same interest or established legal or equitable relationship like agency or trusteeship, are sufficiently analogous to the established categories of sufficient connection to warrant inclusion in the concept. And, for present purposes, the important characteristics of the established forms of representation which emerge from the decided cases appear to be that a principal is generally able to control the conduct of an agent, and that the imposition of fiduciary duties on certain kinds of representatives has the effect of guiding the representative's conduct and providing remedies to the principal on default. 108 Wenman v Mackenzie (1855) 5 El & Bl 447 [119 ER 547]; Nana Ofori Atta II v Nana Abu Bonsra II [1958] AC 95 at 101-102 per Lord Denning. 109 Kinnersley v Orpe (1780) 2 Dougl 517 [99 ER 330]. 110 Johnson v Gore Wood & Co [2002] 2 AC 1 at 32 per Lord Bingham of Cornhill. 111 Gleeson [1977] 1 WLR 510 at 515 per Megarry VC; [1977] 3 All ER 54 at 60. 112 Trawl (1992) 36 FCR 406 at 416 per Gummow J. 113 Lord Wright of Durley, Legal Essays and Addresses, (1939) at 259; see also Stone, Legal System and Lawyers' Reasonings, (1964) at 258. 114 Stone, Legal System and Lawyers' Reasonings, (1964) at 263-267. Nettle Was the Fair Work Ombudsman a privy of the appellant? It follows from what was said in Ramsay v Pigram that, in order for Ramsey Food to succeed in its contention that the appellant was bound by issue estoppel to the result of Buchanan J's findings in the Fair Work proceeding, Ramsey Food had to establish that the appellant had an interest in the Ombudsman's claim in the Fair Work proceeding or that the Ombudsman's claim in the Fair Work proceeding was brought on behalf of the appellant. For the following reasons, it should be concluded that the appellant did not have an interest in the Ombudsman's claim in the Fair Work proceeding and that the relationship between the appellant and the Ombudsman was not such that the Ombudsman should be regarded as having brought the Fair Work proceeding "on account of or for the benefit of" the appellant. No identity of interest Dealing first with whether the appellant had an interest in the Ombudsman's claim in the Fair Work proceeding, it is necessary to begin with the terms of the Fair Work Act and the Workplace Relations Act. As Emmett JA observed115, there were two powers available to the Ombudsman under the Fair Work Act to obtain an order for the appellant to be paid his entitlements. The first was the power under s 682(1)(f) to represent employees who are or may become a party to proceedings in a court under the Act or a fair work instrument. If the Ombudsman had invoked that power, it might have been that the claim for an order in favour of the appellant would have been made "on behalf of" the appellant. But that power was not invoked because the appellant was not a party to the proceeding and it was not contemplated that he might become party to the proceeding. The other power was under s 682(1)(d) of the Act, to commence proceedings in a court to enforce a fair work instrument, and that was the power which was invoked. Emmett JA appears to have accepted that the invocation of that power was not enough in itself to establish privity of interest. With respect, his Honour was correct. The order which the Ombudsman sought and which was made under s 719 of the Workplace Relations Act was for payment to the appellant of "the amount of the underpayment". To the extent that Ramsey Food complied with the order, Ramsey Food's obligations to the appellant were pro tanto discharged. But it does not follow that the appellant had an interest in the Ombudsman's claim. 115 Ramsey Food Processing Pty Ltd v Tomlinson [2014] NSWCA 237 at [85]-[88]. Nettle As has been seen, in this country, "interest" for the purposes of issue estoppel means a legal interest. As Gummow J stressed in Trawl, a mere economic interest is not regarded as a sufficient indicium of privity in successive or mutual relationships116. For that reason, in Trawl it was held to be insufficient to raise an issue estoppel against Trawl's guarantors that, if Trawl had succeeded in its earlier claim against Effem, its success would have resulted in an award of damages which might have gone in reduction of Trawl's indebtedness to its bank and thereby ameliorated the guarantors' liabilities to the bank. The applicant and the guarantors shared a mutual economic interest in the success of Trawl's earlier claim but mutual economic interests were not enough to amount to privity of interest for the purposes of issue estoppel117. Equally, to establish that a party has an interest in a putative privy's claim, it is not enough to establish that the party and putative privy have different legal interests productive of a unity of outcome. It is necessary that they share the same legal interest118. Here, despite the fact that the appellant had an entitlement to be paid by Ramsey Food and the Ombudsman claimed an order that the appellant be paid his entitlement, the appellant and the Ombudsman did not have the same legal interest in the Ombudsman's claim. Comprehension of that point may perhaps be assisted by reference to a more prosaic example of its application. If for good consideration A covenants with B, and also for good consideration covenants severally with C, that A will pay benefits to C, B obtains a contractual entitlement to performance of A's covenant with B and a legal interest in performance of that covenant which is separate and distinct from C's contractual entitlement to performance of A's covenant with C and C's legal interest in the performance of the latter covenant. Thus, despite the evident mutuality of B and C's economic interests in the performance of A's covenants with B and C, they do not have the same interest for the purposes of issue estoppel119. And, in those circumstances, if A fails to pay C, and B brings a proceeding for specific performance of A's covenant with B to pay C120, then, unless C is joined as party to the 116 (1992) 36 FCR 406 at 414-415. 117 Cf Bank of Montreal v Mitchell (1997) 143 DLR (4th) 697 at 740; affd (1997) 151 DLR (4th) 574. See Handley, Spencer Bower and Handley: Res Judicata, 4th ed 118 Spencer v Williams (1871) LR 2 P & D 230 at 236 per Lord Penzance. 119 Trawl (1992) 36 FCR 406 at 413-414. 120 Coulls v Bagot's Executor and Trustee Co Ltd (1967) 119 CLR 460 at 479 per Barwick CJ, 499-503 per Windeyer J; [1967] HCA 3. Nettle proceeding121, C will not be bound by the outcome of the proceeding or by any of the essential issues decided in the proceeding. Arguably, it would be different if, instead of entering into several covenants with B and C, A covenanted with B and C jointly. In the case of a joint covenant, there is only one covenant, to the benefit of which each of the covenantees is jointly entitled, and it might be said that there is sufficient mutuality of interest to render each of the covenantees privies in interest122. If so, C would be bound by the outcome of B's proceeding against A, regardless of whether C were joined as party to the proceeding, at least if C had notice of the proceeding and chose not to become involved123. But where covenants are several, the legal interest of each of the covenantees is separate and distinct. Here, the Ombudsman's entitlement to seek an order under ss 682(1)(d) and 719 was analogous to B's entitlement to seek an order for specific performance of A's covenant with B to pay C. Just as B's contractual entitlement to require A to pay C arises separately and distinctly from C's contractual entitlement to be paid by A, the Ombudsman's statutory entitlement to seek an order under ss 682(1)(d) and 719 arose separately and distinctly from the appellant's statutory and contractual entitlement to be paid by Ramsey Food. Just as B's equitable entitlement to seek an order for specific performance of A's covenant with B to pay C is predicated on A's failure to pay C the amount which is due to C, the Ombudsman's statutory entitlement to seek an order that Ramsey Food pay the underpayment to the appellant was predicated on Ramsey Food's failure to pay the appellant what was due to the appellant. Just as there is mutuality of economic interests between B and C, there was mutuality of economic interests between the Ombudsman and the appellant. But, just as the separate and distinct legal entitlements of B and C mean that there is no privity of interest between them, the separate and distinct statutory entitlements of the Ombudsman and the appellant were insufficient to constitute privity of interest between them. Claim not on behalf of the appellant It remains to deal with whether the Ombudsman's claim was made "on behalf of" the appellant. For the following reasons, it was not. 121 Cf Sandtara Pty Ltd v Abigroup Ltd (1997) 42 NSWLR 5 at 8-9 per Gleeson CJ, Meagher and Handley JJA. 122 Coulls (1967) 119 CLR 460 at 493 per Windeyer J. 123 House of Spring Gardens Ltd v Waite [1991] 1 QB 241 at 254. Nettle It will be recalled that Emmett JA went on to identify a number of factors which he considered led to the conclusion that the Ombudsman was acting on behalf of the appellant. The relevant section of his Honour's reasoning was as follows124: "While the Fair Work Ombudsman may have been acting in the public interest in seeking penalties from Ramsey Food in the Federal Court Proceedings, there can be no doubt that the Fair Work Ombudsman was also making claims under s 719 of the Workplace Relations Act on behalf of the claimant employees, including Mr Tomlinson. The Fair Work Ombudsman had no entitlement to moneys payable by the employer of the claimant employees upon the termination of their employment. It was seeking to enforce, and did enforce, the rights vested in the employees, including Mr Tomlinson, under the Award. In so far as the Fair Work Ombudsman was enforcing Mr Tomlinson's entitlement, under the Award, to a payment in lieu of notice and a severance payment, the Fair Work Ombudsman was doing so on behalf of Mr Tomlinson. The Fair Work Ombudsman was Mr Tomlinson's privy for the purposes of the application of the doctrine of issue estoppel." As can be seen, there are two critical links in that reasoning, namely: (1) that the Ombudsman was making claims under s 719 "on behalf of ... Mr Tomlinson"; and (2) that "[i]n so far as the Fair Work Ombudsman was enforcing Mr Tomlinson's entitlement ... the Fair Work Ombudsman was doing so on behalf of Mr Tomlinson". With respect, neither is correct. The reference to s 719 appears to be a reference to s 719(6) and (7), which at relevant times provided as follows: "(6) Where, in a proceeding against an employer under this section, it appears to the eligible court that an employee of the employer has not been paid an amount that the employer was required to pay under an applicable provision (except a term of an ITEA), the court may order the employer to pay to the employee the amount of the underpayment. (7) Where, in a proceeding against an employer under this section, it appears to the eligible court that the employer has not paid an amount to a superannuation fund that the employer was required, under an applicable provision (except a term of an ITEA), to pay on behalf of a person, the court may order the employer to make a 124 Ramsey Food Processing Pty Ltd v Tomlinson [2014] NSWCA 237 at [91] (emphasis added). Nettle payment to or in respect of that person for the purpose of restoring the person, as far as practicable, to the position that the person would have been in had the employer not failed to pay the amount to the superannuation fund." The orders which were made in favour of the appellant in the Fair Work proceeding were made in pursuance of those sub-sections. Since the proceeding was brought under s 682(1)(d) of the Fair Work Act and s 719 of the Workplace Relations Act, it logically cannot be that the Ombudsman's claim in relation to the appellant was made by the Ombudsman as representative of the appellant or otherwise "on behalf of" the appellant. The Ombudsman was not representing the appellant in a claim under s 719 but acting in exercise of the Ombudsman's own statutory right of action to enforce the Fair Work Act. The Ombudsman was not making the appellant's claim "on behalf of" the appellant but making the Ombudsman's own claim pursuant to s 682(1)(d) of the Fair Work Act under s 719 of the Workplace Relations Act for an order to compel the enforcement of the Fair Work Act. Nor is the claim by the Ombudsman under s 719 otherwise of such a nature that it should be regarded as made "on behalf of" the appellant. The relationship between the appellant and the Ombudsman did not fall into one of the established categories of legal and equitable relationships earlier described. The appellant did not engage the Ombudsman as his agent to litigate the question of whether Ramsey Food was his employer and as such had failed to pay his entitlements. As far as can be told, the appellant did not have any control over the conduct of the Ombudsman's claim. The highest the evidence went in that regard was that the appellant placed the facts of his predicament before the Ombudsman and asked the Ombudsman if there was anything which the Ombudsman could do to procure for the appellant his entitlements. There is nothing about the power conferred on the Ombudsman by s 682(1)(d) of the Fair Work Act or on the court by s 719 which could be viewed as imposing anything in the nature of a fiduciary duty on the Ombudsman in favour of the appellant. The Ombudsman could not realistically be regarded as the corporate embodiment of the appellant β even for just the purposes of recovery of the appellant's unpaid entitlements β in the sense of the appellant being the person who made decisions and gave instructions on behalf of the Ombudsman as to how the Fair Work proceeding should be conducted. On the evidence, the scope of the appellant's involvement was limited to being a witness. Nettle Further, because of the Ombudsman's statutory responsibilities to enforce the Act generally, it is not possible to exclude the potential for at least some conflict of interest between the Ombudsman's objectives in and manner of conducting the Fair Work proceeding and the appellant's interests in recovering his entitlements. It follows that, even on an expansive view of "on behalf of" of the kind suggested by some of the English authorities, there was not here such a degree of identification between the Ombudsman and the appellant that the decision in the Fair Work proceeding should be taken to bind the appellant for the purposes of the District Court proceeding. Consequences of no estoppel Counsel for Ramsey Food submitted that so to hold would lead to the "scandal" that, despite an order being made under s 719 and satisfied by payment in full, an employer would then be at liberty to institute a fresh proceeding against the employee for recovery of the amount so paid as money paid under a mistake as to the employment relationship. Counsel acknowledged that there might be other solutions to that problem but contended that the most logical and appropriate manner in which to respond to it was by recognising that where orders are made under s 719, they result in issue estoppels. The submission is not persuasive. The short answer to it is that, in the circumstances postulated, the payment would not be a payment under mistake of fact or law but rather in satisfaction of a binding legal obligation constituted of the order made under s 719. As such, it would be a payment made for good consideration125. Counsel did not make the point but it might also be thought "scandalous" if an employee, having taken the benefit of an order under s 719 against one entity as employer, could then turn around and bring a fresh proceeding against another entity as employer for payment of the amount already paid and received pursuant to the order. The avoidance, however, of potential difficulties of that kind does not necessitate the application of issue estoppel in relation to s 719 orders. In such circumstances, the employee would be bound to bring the amounts received under the s 719 order to account on the basis that, although paid by a third party, they were paid in intended reduction of the underpayment 125 Barclays Bank Ltd v W J Simms Son & Cooke (Southern) Ltd [1980] QB 677 at 695 per Robert Goff J; David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 at 380 per Mason CJ, Deane, Toohey, Gaudron and McHugh JJ; [1992] HCA 48. Nettle of the employee's entitlements qua employee and thus pro tanto discharged the underpayment126. There might be still further circumstances in which, having taken the benefit of an order under s 719 and thus the benefit of the findings on the basis of which it was made, it would appear unjust that an employee should be permitted to contend that the entity ordered to make the payment under s 719 was not in fact the employer. If so, however, that would likely be so because the employee has so conducted himself or herself in taking the benefit of the payment ordered and other parties have so acted in reliance upon the assumed state of affairs thereby created that it would be unconscionable for the employee to depart from that basis of assumption127. In such circumstances, the employee would be estopped from departing from the assumed state of affairs and therefore estopped from contending that the entity ordered to make the payment under s 719 was not in fact the employer. But, in that event, the estoppel would be an estoppel in pais, not an issue estoppel, and in this case estoppel in pais was not relied upon. Ramsey Food did not allege an estoppel in pais. Had it sought to do so, it would have had to deliver a very different pleading and to prove the assumed basis of dealing between the parties and circumstances which were said to render it unconscionable for the appellant to depart from the assumption. No such thing was attempted. Notice of contention Under cover of notice of contention128, counsel for Ramsey Food argued that, if the Court of Appeal were wrong in holding that issue estoppel applied, the appeal to this Court should nevertheless be dismissed on the basis that it was open to the Court of Appeal to adopt Buchanan J's findings, and that this Court should similarly adopt Buchanan J's findings, that Ramsey Food was at all relevant times the appellant's employer. 126 Graham v Baker (1961) 106 CLR 340 at 349-351 per Dixon CJ, Kitto and Taylor JJ; [1961] HCA 48; Fox v Wood (1981) 148 CLR 438; [1981] HCA 41; cf The National Insurance Co of New Zealand Ltd v Espagne (1961) 105 CLR 569 at 571-574 per Dixon CJ; [1961] HCA 15. 127 Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641 at 674-675 per Dixon J; [1937] HCA 58; The Commonwealth v Verwayen (1990) 170 CLR 394 at 410 per Mason CJ, 444-446 per Deane J; [1990] HCA 39; Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 88 ALJR 552 at 576-577 [85]-[89] per Hayne, Crennan, Kiefel, Bell and Keane JJ; 307 ALR 512 at 539-540; [2014] HCA 14. 128 Filed with leave out of time. Nettle That contention should also be rejected. Even if Buchanan J's findings could be followed or adopted as a matter of precedent or comity, as it was submitted they could be, the only thing which his Honour relevantly determined was that Ramsey Food remained the employer for the purposes of the Workplace Relations Act. As Buchanan J said, that was a question of "substance and reality" as opposed to legal form129. In contrast, the issue for the District Court judge involved a question of statutory construction of whether Tempus was "the employer liable to pay ... compensation" under the Workers Compensation Act within the meaning of s 151C of that Act (scil whether Tempus was bound to obtain a workers' compensation policy in respect of the appellant in accordance with s 155 of the Workers Compensation Act). That was a different question, which was predominantly one of legal form. As the District Court judge appreciated, it by no means follows from the fact that Ramsey Food was the employer for the purposes of the Workplace Relations Act that Tempus was not "the employer liable to pay ... compensation" under the Workers Compensation Act within the meaning of s 151C of that Act. Perhaps it might be said that Buchanan J also decided that Tempus may have acted as agent for Ramsey Food, and possibly that the arrangements between Ramsey Food and Tempus were a "sham"130. But those findings do not assist Ramsey Food either. If Tempus contracted as agent for Ramsey Food then, based on the District Court judge's findings131 that Tempus was nominally the employer in all relevant legal respects and that, at all relevant times, the appellant believed that he was employed by Tempus, it is to be inferred that Tempus contracted as agent for Ramsey Food as undisclosed principal. As such, Tempus was personally liable for performance of the obligations thus created132 and, therefore, personally liable as the employer liable to pay compensation under the Workers Compensation Act. If by a "sham" Buchanan J meant that the arrangement between Tempus and Ramsey Food was devoid of legal effect, the result might well be different. But, given that his Honour said that it was unnecessary to decide whether the arrangement between Tempus and Ramsey Food was a sham and more 129 Fair Work Ombudsman v Ramsey Food Processing Pty Ltd (2011) 198 FCR 174 at 130 Fair Work Ombudsman v Ramsey Food Processing Pty Ltd (2011) 198 FCR 174 at 131 Against which there was no appeal. 132 Higgins v Senior (1841) 8 M & W 834 at 844 per Parke B [151 ER 1278 at 1282]; Perpetual Trustee Co (Ltd) v Bligh (1940) 41 SR (NSW) 33 at 40 per Jordan CJ for Jordan CJ, Bavin and Roper JJ. Nettle significantly that, if it were a sham, it would support the conclusion that Tempus acted as agent for Ramsey Food, he cannot have meant that the arrangement was a sham in the sense of being devoid of legal effect133. Rather, it appears that when his Honour spoke of the arrangement as a "sham" he conceived of it as one which, although apparently productive of legal rights and obligations according to their terms, did not detract from the conclusion that, in real substance, Ramsey Food remained the employer for the purposes of the Fair Work proceeding. To that may be added that, on the basis of the evidence and findings made below, there seems little reason to doubt that Tempus was bound to obtain a workers' compensation policy in accordance with s 155 of the Workers Compensation Act and, therefore, was the employer liable to pay compensation under that Act. On the facts as found by the District Court judge (against which there was no appeal) Tempus was the nominal employer who was responsible for group tax and superannuation obligations. Tempus did obtain a workers' compensation insurance policy. And the insurer under that policy paid compensation under the Act in respect of the injuries the subject of the appellant's work injury claim. Buchanan J did not hold to the contrary or even have reason to consider the point. Finally, Ramsey Food did not plead in the District Court proceeding or otherwise suggest that the appellant failed to give Tempus a notice under s 151C of the Workers Compensation Act or that the appellant did not make a claim for lump sum compensation against Tempus under s 280A of the Workplace Injury Management and Workers Compensation Act, or that that claim had not been paid under s 280B of that Act. Nor was it pleaded or otherwise suggested that, despite Tempus being the Workers Compensation Act, and its insurer having paid compensation under that Act, Ramsey Food remained the employer liable to pay compensation under the Act in respect of those injuries. Ramsey Food only ever pleaded or otherwise contended that it was enough to bar the appellant's work injury claim that the appellant was bound by Buchanan J's findings. to pay compensation under liable Of course, so to observe is not necessarily to exclude the possibility that Ramsey Food might also have been required to take out cover or be covered under a workers' compensation policy. Sub-sections (1B) and (2) of s 155 of the Workers Compensation Act suggest that it might have been so. Nor is it to deny the possibility that, if the appellant had made a claim for compensation against Ramsey Food in respect of the injury the subject of the work injury claim, Ramsey Food would have been liable to pay compensation under the Workers 133 Sharrment Pty Ltd v Official Trustee in Bankruptcy (1988) 18 FCR 449 at 453-454 per Lockhart J, 468 per Beaumont J; Raftland Pty Ltd v Federal Commissioner of Taxation (2008) 238 CLR 516 at 531-532 [34]-[36]; [2008] HCA 21. Nettle Compensation Act in respect of that injury. But there has been no consideration or determination of those issues at any level, still less of whether Tempus would thus have ceased to be liable to pay compensation under the Workers Compensation Act and so ceased to be "the employer liable to pay ... compensation" under the Workers Compensation Act within the meaning of s 151C of that Act. The sole question for Buchanan J was whether Ramsey Food was as a matter of "substance and reality" the appellant's employer for the purposes of the Fair Work Act. Conclusion and orders In the result, the District Court judge was right to hold that Buchanan J's finding that Ramsey Food was the employer for the purpose of the Fair Work proceeding did not estop the appellant from contending that Tempus was his employer for the purpose of the District Court proceeding. Accordingly, the appeal should be allowed with costs. Orders 2 to 5 of the Court of Appeal dated 21 July 2014 should be set aside. In their place it should be ordered that the appeal to the Court of Appeal be dismissed with costs. |
HIGH COURT OF AUSTRALIA Matter No S119/2014 PLAINTIFF AND THE STATE OF NEW SOUTH WALES DEFENDANT Matter No S138/2014 NUCOAL RESOURCES LIMITED PLAINTIFF AND STATE OF NEW SOUTH WALES DEFENDANT Matter No S206/2014 CASCADE COAL PTY LIMITED & ORS PLAINTIFFS AND THE STATE OF NEW SOUTH WALES DEFENDANT Duncan v New South Wales NuCoal Resources Limited v New South Wales Cascade Coal Pty Limited v New South Wales [2015] HCA 13 15 April 2015 S119/2014, S138/2014 & S206/2014 ORDER Matter No S119/2014 The questions asked by the parties in the special case dated 18 September 2014 and referred for consideration by the Full Court be answered as follows: Question 1 Are clauses 1 to 13 of Schedule 6A to the Mining Act 1992 (NSW), or any of them, invalid? Answer Question 2 Who should pay the costs of this Special Case? Answer The plaintiff. Matter No S138/2014 The questions asked by the parties in the special case dated 23 September 2014 and referred for consideration by the Full Court be answered as follows: Question 1 Are clauses 1 to 13 of Schedule 6A to the Mining Act 1992 (NSW), or any of them, invalid? Answer Question 2 Is clause 11 of Schedule 6A to the Mining Act inconsistent with the that Copyright Act 1968 (Cth) and inconsistency? the extent of inoperative Answer This question does not arise on the facts of the special case. Question 3 Who should pay the costs of the special case? Answer The plaintiff. Matter No S206/2014 The questions asked by the parties in the special case dated 23 September 2014 and referred for consideration by the Full Court be answered as follows: Question 1 Are clauses 1 to 13 of Schedule 6A to the Mining Act 1992 (NSW), or any of them, invalid? Answer Question 2 Is clause 11 of Schedule 6A to the Mining Act inconsistent with the Copyright Act 1968 (Cth) and that inconsistency? the extent of inoperative Answer This question does not arise on the facts of the special case. Question 3 Who should pay the costs of this Special Case? Answer The plaintiffs. Representation A S Bell SC with B K Lim for the plaintiff in S119/2014 (instructed by Yeldham Price O'Brien Lusk Lawyers) W Sofronoff QC with G J D Del Villar for the plaintiff in S138/2014 (instructed by Quinn Emanuel Urquhart & Sullivan) A S Bell SC with B K Lim for the plaintiffs in S206/2014 (instructed by TressCox Lawyers) M G Sexton SC, Solicitor-General for the State of New South Wales and S J Free with Z C Heger for the defendant in each matter (instructed by Crown Solicitor (NSW)) Interveners J T Gleeson SC, Solicitor-General of the Commonwealth with J S Stellios for the Attorney-General of the Commonwealth, intervening (instructed by Australian Government Solicitor) M G Hinton QC, Solicitor-General for the State of South Australia with L K Byers for the Attorney-General for the State of South Australia, intervening (instructed by Crown Solicitor (SA)) S G E McLeish SC, Solicitor-General for the State of Victoria with K L Walker SC for the Attorney-General for the State of Victoria, intervening (instructed by Victorian Government Solicitor) G R Donaldson SC, Solicitor-General for the State of Western Australia with D E Leigh for the Attorney-General for the State of Western Australia, intervening (instructed by State Solicitor (WA)) P J Dunning QC, Solicitor-General of the State of Queensland with J A Kapeleris and W E Wild for the Attorney-General of the State of Queensland, intervening (instructed by Crown Law (Qld)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Duncan v New South Wales NuCoal Resources Limited v New South Wales Cascade Coal Pty Limited v New South Wales Constitutional law β Judicial power β Independent Commission Against Corruption produced reports which recommended passing legislation to cancel three exploration licences granted under Mining Act 1992 (NSW) β Mining Amendment (NSW) ("Amendment Act") inserted Sched 6A into Mining Act 1992 (NSW), cancelling three licences without compensation β Whether Amendment Act involves exercise of judicial power in nature of, or akin to, bill of pains and penalties. (ICAC Operations Jasper and Acacia) Act 2014 Constitutional law β Constitution Act 1902 (NSW) β Legislative competence of New South Wales Parliament β Whether Amendment Act is "law" within meaning of s 5 of Constitution Act 1902 (NSW). Constitutional law β Inconsistency between Commonwealth and State laws β Provision of Amendment Act authorised use or disclosure of information contained in works β Whether provision of Amendment Act inconsistent with Copyright Act 1968 (Cth) and invalid to extent of inconsistency. Words and phrases β "bill of pains and penalties", "judicial power", "law". Constitution, Ch III, s 109. Constitution Act 1902 (NSW), s 5. Mining Act 1992 (NSW), Sched 6A. Mining Amendment (ICAC Operations Jasper and Acacia) Act 2014 (NSW). FRENCH CJ, HAYNE, KIEFEL, BELL, GAGELER, KEANE AND NETTLE JJ. The Mining Amendment (ICAC Operations Jasper and Acacia) Act 2014 (NSW) ("the Amendment Act") amends the Mining Act 1992 (NSW) ("the Mining Act") to cancel, without compensation, three specified exploration licences issued under the Mining Act. The Amendment Act was enacted following consideration by the Houses of the New South Wales Parliament of reports of investigations undertaken by the Independent Commission Against Corruption ("ICAC"), established under the Independent Commission Against Corruption Act 1988 (NSW) ("the ICAC Act"). Those reports contained findings that the Minister administering the Mining Act, and other individuals, had engaged in corrupt conduct in relation to the issue of the exploration licences. In three separate proceedings against the State of New South Wales in the original jurisdiction of this Court, the corporate licensees of two of the cancelled exploration licences (together with their parent company and one of its former directors), and the parent company of the corporate licensee of the other cancelled exploration licence, seek declarations that the amendments introduced into the Mining Act by the Amendment Act are invalid. Between them, they challenge the validity of the Amendment Act on three grounds. Those grounds are subsumed in questions which, by special case, the parties have agreed to reserve for the consideration of the Full Court. First, it is contended that the Amendment Act is not a "law" within the meaning of the provision of the Constitution Act 1902 (NSW) ("the Constitution Act") which provides for the legislative competence of the New South Wales Parliament. Second, it is contended that the Amendment Act is a legislative exercise of judicial power by that Parliament, contrary to what is argued to be an implied limitation, which derives either from an historical limitation on colonial legislative power unaffected by the Australia Act 1986 (Cth) or from Ch III of the Constitution. Third, it is contended that particular consequential provisions of the Amendment Act, relating to the use and disclosure of information required to be provided by the licensees, are inconsistent with provisions of the Copyright Act 1968 (Cth) ("the Copyright Act") and are for that reason inoperative by force of s 109 of the Constitution. None of those grounds of invalidity is established. The Amendment Act is a law within the competence of the New South Wales Parliament. The Amendment Act is not an exercise of judicial power by that Parliament. The existence and scope of any implied limitation on the ability of a State Parliament to exercise judicial power therefore does not arise for consideration and is not Hayne Bell Nettle explored in these reasons for judgment. The question of inconsistency is not shown by the facts agreed in the special cases to be the subject of real controversy, and is for that reason inappropriate to be answered. Before turning to explain each of those conclusions, it is appropriate to recount something more of the context of the Amendment Act, to set out the precise terms of the amendments it introduced into the Mining Act, and to note in more detail the arguments against validity. Context of the Amendment Act The exploration and development of coal resources in New South Wales is governed in part by the Mining Act, the objects of which include "to encourage and facilitate the discovery and development of mineral resources in New South Wales" and specifically "to ensure an appropriate return to the State from mineral resources"1. The Mining Act empowers the Minister to grant exploration licences, either on application2 or in some circumstances after calling for tenders3. An exploration licence is granted for a fixed term of five years or less4, is renewable on application5, and remains in force pending determination of an application for renewal6. An exploration licence entitles its holder to prospect for specified minerals on specified land in accordance with the conditions of the licence7. The holder is obliged to prepare and lodge with the Department reports of all such 1 Section 3A(d). 2 Sections 13 and 22. 3 Sections 14, 15 and 23. 4 Section 27. 5 Sections 113-114. 6 Section 117. 7 Section 29. Hayne Bell Nettle prospecting8, including both annual reports and (within 30 days of the expiration or cancellation of the licence) a "final report" containing detailed data of all surveys and other information not provided in annual reports9. Those reports are required to be kept confidential for the period during which the exploration licence (or any assessment lease or mining lease subsequently granted to the holder of the exploration licence in respect of the same land and mineral) remains in force10, and the information contained in them cannot be disclosed other than in circumstances which include "with the consent of the person from whom the information was obtained"11, "in connection with the administration or execution of [the Mining] Act"12, or "with the concurrence of the Minister"13. The Mining Act empowers the Minister to cancel an exploration licence only on specified grounds, which include satisfaction that the holder has contravened a provision of the Mining Act14. It is relevant to note in this respect that, in 2008 and 2009, the Mining Act contained a provision making it an offence to furnish false or misleading information in connection with an application made under the Act15. For much of 2008 and 2009, the Minister administering the Mining Act was Ian Macdonald MLC. The Minister oversaw the Department of Primary Industries. 8 Section 163C. 9 Clause 57 of the Mining Regulation 2010 (NSW). 10 Clause 58 of the Mining Regulation 2010 (NSW). 11 Section 365(1)(a). 12 Section 365(1)(b). 13 Section 365(1)(e). 14 Section 125(1)(b). 15 Section 374. Hayne Bell Nettle On 15 December 2008, Mr Macdonald granted an exploration licence entitling its holder for a term of four years to prospect for coal on specified land at Doyles Creek ("EL 7270") to Doyles Creek Mining Pty Limited ("Doyles Creek"). One of the directors of Doyles Creek was then John Maitland. Mr Maitland ceased to be a director in the middle of 2009. In early 2010, all of the shares in Doyles Creek were acquired by NuCoal Resources Limited ("NuCoal"), a publicly listed company floated for that purpose. Doyles Creek applied for renewal of EL 7270 in November 2012. By that time, Doyles Creek had carried out exploration and development work, at a cost of more than $25 million, as a result of which it had ascertained the area of EL 7270 to contain more than 500 million tonnes of coal. On 21 October 2009, an exploration licence entitling its holder for a term of five years to prospect for coal on specified land ("EL 7405") was granted to Glendon Brook Coal Pty Ltd ("Glendon Brook"), and another ("EL 7406") was granted to Mt Penny Coal Pty Ltd ("Mt Penny"). The Mt Penny exploration licence related to specified land in the Bylong Valley, a substantial part of which was beneficially owned by Edward Obeid Snr MLC, members of the Obeid family and their friends. Glendon Brook and Mt Penny were then, and remain, wholly owned subsidiaries of Cascade Coal Pty Limited ("Cascade"). One of the directors of Cascade between February and July 2009 was Travers Duncan. Under the authority of EL 7405, Glendon Brook subsequently carried out exploration and development work, at a cost of approximately $84,000. Under the authority of EL 7406, Mt Penny subsequently carried out exploration and development work, at a cost of more than $9.5 million, as a result of which it ascertained the area of EL 7406 to contain more than 170 million tonnes of coal. An independent valuation undertaken in February 2011 placed Cascade's then value at between $459 million and $587 million, with the "Mt Penny Open Cut" being the most significant component of that value. On 23 November 2011, both Houses of the New South Wales Parliament, by resolution, referred a number of matters to ICAC for investigation, including the circumstances surrounding the application for and allocation to Doyles Creek of EL 7270. The subsequent investigation by ICAC, styled "Operation Acacia", became the subject of a report by ICAC which was laid before the Houses of Parliament in September 2013 ("the Operation Acacia report"). Hayne Bell Nettle On 12 November 2012, in the course of another investigation, which it had commenced after receiving an allegation from a private individual, ICAC commenced a public inquiry, styled "Operation Jasper", into, amongst other things, the circumstances surrounding the grant and use of EL 7405 and EL 7406. The public inquiry resulted in a report by ICAC which was laid before the Houses of Parliament in August 2013 ("the Operation Jasper report"). It is unnecessary to examine in any detail the provisions of the ICAC Act which governed the conduct of those investigations and the production of those reports. Two features only need to be noted. One is that it is an element of corrupt conduct, as defined for the purposes of the ICAC Act, that the conduct could constitute or involve a criminal offence16. The other is that ICAC is nevertheless not authorised to include in a report any finding or opinion that a specified person is guilty of, or has committed, a criminal offence17. In the Operation Acacia report, ICAC made findings that corrupt conduct had occurred in events which led to the grant of EL 7270. In the Operation Jasper report, ICAC made findings that corrupt conduct had occurred in events which led to the grants of EL 7405 and EL 7406. Common to each report were findings that ICAC was satisfied that Mr Macdonald had acted contrary to his public duty as a Minister in circumstances which, if proved on admissible evidence to the criminal standard, would have established that Mr Macdonald had committed one or other of the common law offences of misconduct in public office or of conspiracy to defraud. In the Operation Acacia report, ICAC found Mr Macdonald to have so acted in granting the exploration licence to Doyles Creek substantially for the purpose of benefiting Mr Maitland. In the Operation Jasper report, it found Mr Macdonald to have so acted in: entering into agreements with Mr Edward Obeid Snr (and one of his sons, Moses Obeid) under which he arranged for the creation of the Mt Penny mining tenement, for the purpose of benefiting Mr Edward Obeid Snr, Mr Moses Obeid and members of the Obeid family; providing confidential information to members of the Obeid family, again for the purpose of benefiting Mr Edward Obeid Snr, Mr Moses Obeid and members of the Obeid family; 16 Sections 7(1) and 9(1)(a) of the ICAC Act. 17 Section 74B(1)(a) of the ICAC Act. Hayne Bell Nettle deciding to reopen an expression-of-interest process for exploration licences so that companies associated with Mr Duncan would be able to participate; and providing Mr Duncan with confidential information in the knowledge that Mr Duncan could use the information for his financial benefit. ICAC found that Mr Macdonald had acted because of what was variously described as a "close" or "strong" relationship between himself and each of Mr Maitland, Mr Edward Obeid Snr, Mr Moses Obeid and Mr Duncan. ICAC's findings in the Operation Acacia report also included that Mr Maitland had made false statements to the Department in connection with the application by Doyles Creek for EL 7270 (conduct which ICAC was satisfied, if proved on admissible evidence to the criminal standard, would constitute an offence under the Mining Act18, as well as under other State and Commonwealth laws19) and that other former directors of Doyles Creek had agreed to Mr Maitland doing so (conduct which ICAC was satisfied, if proved on admissible evidence to the criminal standard, would constitute substantially the same offences). Its findings in the Operation Jasper report also included that Mr Duncan, together with other former directors of Cascade, had deliberately misled the Department and other New South Wales Government agencies, including by failing to disclose the Obeid family involvement (conduct which ICAC was satisfied, if proved on admissible evidence to the criminal standard, would constitute offences against State and Commonwealth laws20). After the Operation Acacia report and the Operation Jasper report, ICAC went on to produce a further report in relation to both Operation Acacia and Operation Jasper, which was made public on 18 December 2013 and laid before the Houses of Parliament on 30 January 2014 ("the December report"). On the basis of the findings it had made in the Operation Acacia report and the Operation Jasper report, ICAC expressed the view in the December report that the granting of the Doyles Creek, Glendon Brook and Mt Penny exploration licences "was so tainted by corruption that [they] should be expunged or 18 Section 374. 19 Identified in the Operation Acacia report to be s 178BB of the Crimes Act 1900 (NSW) and s 184(1) of the Corporations Act 2001 (Cth). 20 Identified in the Operation Jasper report to be s 192E(1)(b) of the Crimes Act 1900 (NSW) and s 184(1) of the Corporations Act 2001 (Cth). Hayne Bell Nettle cancelled and any pending applications regarding them should be refused". ICAC recommended that the New South Wales Government consider enacting legislation to achieve that expunging, noting that "[s]uch legislation would have the benefit of reducing risks arising from challenges in the courts to any ministerial decision to cancel or not renew current [licences]". On 19 December 2013, NuCoal, Glendon Brook and Mt Penny were informed that the New South Wales Government was considering ICAC's recommendations and were invited to make submissions as to why those recommendations should not be implemented. In response, NuCoal and Cascade each made submissions objecting to the implementation of the recommendations. On 20 January 2014, the Premier announced the intention of the New South Wales Government to introduce legislation to cancel the three exploration licences without compensation. On 30 January 2014, the Bill for the Amendment Act was introduced into, read three times in, and passed without amendment by, both Houses of the New South Wales Parliament. Second reading speeches for the Bill were made in substantially identical terms, in the Legislative Council by the Minister for Roads and Ports21, and in the Legislative Assembly by the Premier22. Both speeches explained that the Bill would cancel the Doyles Creek, Glendon Brook and Mt Penny exploration licences, as "was, of course, recommended" by ICAC23. Both recorded that some of ICAC's findings were "the subject of current or 21 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 30 January 2014 at 26558. 22 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 30 January 2014 at 26649. 23 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 30 January 2014 at 26558; New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 30 January 2014 at 26649. Hayne Bell Nettle threatened legal challenge" and that ICAC's jurisdiction "to recommend cancellation of the licences [was also] being challenged"24. Both continued25: "However, the action proposed in this bill does not stand or fall based on the findings or recommendations of [ICAC]. Having regard to the information that has been exposed to public scrutiny, the Parliament itself can and should form its own view as to whether these licences should be cancelled." Both noted that some submissions to the Government had suggested that cancellation of the licences without compensation "may raise concerns about sovereign risk"26. The Minister then stated27: "In response to that I say that the greatest form of sovereign risk, the greatest threat to the stability and certainty needed by business in dealing with governments, is the risk of corruption. It is the risk that corrupt public officials and their private sector mates will distort public processes, will manipulate markets and will act for their own private benefit in secret deals, all at the expense of the public interest. This bill puts an end to that." 24 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 30 January 2014 at 26558; New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 30 January 2014 at 26649. 25 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 30 January 2014 at 26558; New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 30 January 2014 at 26649. 26 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 30 January 2014 at 26559; New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 30 January 2014 at 26650. 27 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 30 January 2014 at 26559-26560. Hayne Bell Nettle The Premier made a statement in substantially the same terms28. Having been passed by both Houses, the Bill received Royal Assent on 31 January 2014. Three months later, the New South Wales Parliament enacted the Mining and Petroleum Legislation Amendment Act 2014 (NSW) ("the Further Amendment Act"). The Further Amendment Act amended the Mining Act, relevantly, to ensure power on the part of the Minister to refuse to grant or renew an exploration licence on the ground that, in the opinion of the Minister, the applicant is not a fit and proper person29, and to allow the Minister, for the purpose of considering whether or not an applicant is a fit and proper person, to take into consideration whether the applicant has "compliance or criminal conduct issues"30. Amongst categories of persons or bodies corporate specified as meeting that description are those who previously held exploration licences that were then cancelled31. Text of the Amendment Act The Amendment Act, which was expressed to commence on the date of its assent32, inserted into the Mining Act a new Sched 6A33. For the purpose of Sched 6A, the date of assent to the Amendment Act is defined as the "cancellation date"34. 28 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 30 January 2014 at 26650. 29 Section 380A(1)(a). See Sched 1 [24] to the Further Amendment Act. 30 Section 380A(2)(a). 31 Section 380A(3)(c). 32 Section 2 of the Amendment Act. 33 Schedule 1 to the Amendment Act. 34 Clause 2 of Sched 6A to the Mining Act. Hayne Bell Nettle Clause 3 of Sched 6A to the Mining Act, headed "[p]urposes and objects", is in the following terms: "(1) The Parliament, being satisfied because of information that has come to light as a result of investigations and proceedings of [ICAC] known as Operation Jasper and Operation Acacia, that the grant of the relevant licences, and the decisions and processes that culminated in the grant of the relevant licences, were tainted by serious corruption (the tainted processes), and recognising the exceptional nature of the circumstances, enacts the [Amendment Act] for the following purposes: restoring public confidence in the allocation of the State's valuable mineral resources, promoting integrity in public administration above all other considerations, including financial considerations, and deterring future corruption, placing the State, as nearly as possible, in the same position as it would have been had those relevant licences not been granted, recognising that it is not practicable in the circumstances to achieve, through financial adjustments or otherwise, an alternative outcome in relation to the relevant licences based on what would have happened had the relevant licences been granted pursuant to processes other than the tainted processes. To those ends, the specific objects of the [Amendment Act] are as follows: to cancel the relevant licences and ensure that the tainted processes have no continuing impact and cannot affect any future processes (such as for the grant of further [licences]) in respect of the relevant land, to ensure that the State has the opportunity, if considered appropriate in the future, to allocate mining and prospecting rights in respect of the relevant land according to proper processes in the public interest, Hayne Bell Nettle to ensure that no person (whether or not personally implicated in any wrongdoing) may derive any further direct or indirect financial benefit from the tainted processes, to protect the State against the potential for further loss or damage and claims for compensation, without precluding actions for personal liability against individuals, including public officials, who have been implicated in the tainted processes and have not acted honestly and in good faith." Clause 4 of Sched 6A states: "(1) The following exploration licences are cancelled by this Schedule: exploration licence number 7270 dated 15 December 2008, exploration licence number 7405 dated 21 October 2009, exploration licence number 7406 dated 21 October 2009. The cancellation takes effect on the cancellation date. The cancellation of an exploration licence by this Schedule does not affect any liability incurred before the cancellation date by or on behalf of a holder of a relevant licence or by or on behalf of a director or person involved in the management of a holder of a relevant licence." Clause 5 of Sched 6A states that any "associated application" (including an application for renewal35) lodged or made but not finally disposed of under the Mining Act before the cancellation date "is, on the cancellation date, void and of no effect"36 and "[a]ccordingly ... is not to be dealt with any further"37. Clause 6 provides for the refund of fees paid in connection with each of the three 35 Clause 5(3)(a). 36 Clause 5(1). 37 Clause 5(2). Hayne Bell Nettle exploration licences cancelled by cl 4(1). Clause 7 states that compensation is not payable by or on behalf of the State because of the enactment or operation of the Amendment Act, because of any direct or indirect consequence of that enactment or operation, or because of any conduct relating to that enactment or operation38. However, the clause is expressed not to exclude or limit any personal liability of a person for conduct occurring before the grant of any of the exploration licences cancelled by cl 4(1)39. Clause 8 protects and immunises the State from all civil liability in relation to those exploration licences40, and extends that protection and immunity to an employee or former employee of the State "acting honestly and in good faith in the performance or purported performance of his or her functions"41. in accordance with an exploration Clause 9 of Sched 6A declares the continuing obligation of the holder to prepare and lodge with the Department annual and final reports of all prospecting licence42 notwithstanding undertaken cancellation of the licence by cl 4(1). Clause 10 ensures that "exploration information", obtained from or in other ways relating to the licences, and corresponding records, remain subject to general powers of compulsion under the Mining Act43. Clause 11 permits use or disclosure of any information obtained in connection with the administration or execution of the Mining Act in respect of a licence cancelled under cl 4(1) or in respect of the area of such a licence "if the use or disclosure is in connection with any application or tender" under the Mining Act "or is for any other purpose approved by the Minister"44. The clause 38 Clause 7(1). 39 Clause 7(3). 40 Clause 8(1)-(4). 41 Clause 8(5). 42 Section 163C. 43 Part 12, and in particular s 248B. 44 Clause 11(1). Hayne Bell Nettle intellectual property right or duty of specifically provides confidentiality ... prevents the use or disclosure" so authorised45, and that "[n]o liability attaches to the State or any other person in connection with the use or disclosure" so authorised46. that "[n]o Challenges to validity The validity of the Amendment Act is in issue in separate proceedings brought against the State of New South Wales by each of Mr Duncan, NuCoal, and Cascade, Mt Penny and Glendon Brook. By special case in each proceeding, the parties have reserved questions for the consideration of the Full Court in each of those proceedings. The special cases have been heard together. The principal ground of challenge to the validity of the Amendment Act is the same in each case. The argument, as refined in the course of oral submissions, is that the Amendment Act involves an exercise of judicial power in the nature of, or akin to, a bill of pains and penalties. Such an exercise of judicial power, it is argued, is denied to the Parliament of New South Wales by an implied limitation on State legislative power. That limitation, it is variously contended, derives either from Ch III of the Constitution or from an historical limitation on colonial, and subsequently State, legislative power which, it is argued, was not overtaken by the Australia Act. In support of the contention that the Amendment Act is an exercise of judicial power, Mr Duncan, NuCoal and the Cascade parties highlight the expression by the New South Wales Parliament in cl 3(1) of Sched 6A of satisfaction that the grant of the exploration licences was "tainted by serious corruption". NuCoal argues that that reference is to be understood as the Parliament being satisfied at least of the existence of facts which, if proved on admissible evidence to the criminal standard, would amount to one or more of the pre-existing criminal offences identified by ICAC in the Operation Acacia report and the Operation Jasper report. Mr Duncan and the Cascade parties argue that it is to be understood instead as the Parliament finding that the holders of the three identified exploration licences (Doyles Creek, Mt Penny and Glendon Brook) had contravened a novel norm of conduct which the Parliament 45 Clause 11(3). 46 Clause 11(4). Hayne Bell Nettle retrospectively imposed by enacting the Amendment Act, being the "norm of not being involved in 'serious corruption'". In further support of the contention that the Amendment Act is an exercise of judicial power, Mr Duncan, NuCoal and the Cascade parties emphasise the express identification by cl 3(1)(b) of Sched 6A of "deterring future corruption" as one of the "purposes" of the Amendment Act. They argue that an important, if not predominant, purpose of the legislative cancellation of the three exploration licences without compensation was to punish transgression and to instil fear of similar punishment in those who might similarly transgress in the future. Mr Duncan and the Cascade parties go on to submit that the punitive purpose of the Amendment Act is carried further by cl 5 (avoiding their renewal applications) and by cl 11 (which they argue attempts to confiscate their intellectual property). They argue that the specific purpose of punishing past breaches of a general norm of conduct explains the references in the second reading speeches directed to allaying concerns about sovereign risk. They also call in aid the Further Amendment Act, which they argue forms part of the same legislative scheme as the Amendment Act and furthers its punitive purposes by stigmatising Doyles Creek, Mt Penny and Glendon Brook as having "compliance or criminal conduct issues" and by inhibiting their ability to apply for further licences. Mr Duncan and the Cascade parties rely in the alternative on the logically anterior ground that the Amendment Act is not a "law" within the competence of the New South Wales Parliament to enact under s 5 of the Constitution Act. That is because, they argue, Sched 6A "does not merely vary existing rights but destroys them by way of punishment for what the Parliament has judged to be 'serious corruption'". NuCoal and the Cascade parties argue in addition that cl 11 of Sched 6A is inconsistent with rights conferred on them as owners of copyright by provisions of the Copyright Act, with the consequence that cl 11 is inoperative to the extent of that inconsistency by force of s 109 of the Constitution. Hayne Bell Nettle The Amendment Act is a law Having defined "The Legislature" to mean "His Majesty the King with the advice and consent of the Legislative Council and Legislative Assembly"47, the Constitution Act provides, in s 5: "The Legislature shall, subject to the provisions of the Commonwealth of Australia Constitution Act, have power to make laws for the peace, welfare, and good government of New South Wales in all cases whatsoever". In Union Steamship Co of Australia Pty Ltd v King48 this Court referred to longstanding authority49 for the proposition that, within the limits of the grant, the legislative power so conferred "is as ample and plenary as the power possessed by the Imperial Parliament itself"50. Subsequently, in Kable v Director of Public Prosecutions (NSW)51, three members of the Court expressly rejected an argument that an enactment of the New South Wales Parliament which purported to authorise the continued detention of a specified individual was not a "law" within the meaning of s 5 of the Constitution Act. Recalling that private Acts were not uncommon in nineteenth century England and have been enacted at times in Australia, Brennan CJ said that "[s]pecificity does not deny the character of law to an enactment that is otherwise within power"52. The same view was articulated by Dawson J when he said that, in the context of s 5, "the word 'laws' is synonymous with the word 'statutes'", added that "[i]f any limitation is to be found upon the 47 Section 3. 48 (1988) 166 CLR 1; [1988] HCA 55. 49 See in particular Powell v Apollo Candle Company (1885) 10 App Cas 282 at 290. 50 (1988) 166 CLR 1 at 10. 51 (1996) 189 CLR 51; [1996] HCA 24. 52 (1996) 189 CLR 51 at 64. Hayne Bell Nettle power of the Parliament, it is to be found elsewhere in the [Constitution Act] or in the words 'peace, welfare, and good government'"53, and continued54: "Section 5 is not seeking to impose a distinction between statutes which embody a law and those which do not, according to a definition of law imported from elsewhere. In an appropriate context (and s 5 is one), a statute may be synonymous with a law because of the manner of its creation. It may be so even if the law lacks validity for it is quite permissible to speak of an invalid law in such a context." That view of Brennan CJ and of Dawson J was expressly adopted by McHugh J55, and is consistent with the holding of other members of the majority in Kable that the enactment in issue was rendered invalid by operation of Ch III of the Constitution. There is no warrant for departing from it. The word "laws" in s 5 of the Constitution Act implies no relevant limitation as to the content of an enactment of the New South Wales Parliament. In particular, the word carries no implication limiting the specificity of such rights, duties, liabilities or immunities as might be the subject of enactment or the purpose of their enactment. Mr Duncan's and the Cascade parties' contention that the Amendment Act is not a law within the competence of the New South Wales Parliament to enact under s 5 of the Constitution Act necessarily fails. The Amendment Act is a law. The Amendment Act is not an exercise of judicial power Some functions of their nature pertain exclusively to judicial power. The determination and punishment of criminal guilt is one of them56. The non- consensual ascertainment and enforcement of rights in issue between private 53 (1996) 189 CLR 51 at 76. 54 (1996) 189 CLR 51 at 77. 55 (1996) 189 CLR 51 at 109. 56 Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1 at 27; [1992] HCA 64. Hayne Bell Nettle parties is another57. The termination of a right conferred by statute is not of that nature. That is so even where the basis for termination is satisfaction of the occurrence of conduct which, if proved on admissible evidence to the criminal standard, would constitute a criminal offence58. In terminating exploration licences issued under the Mining Act and in making consequential provision, the Amendment Act exhibits none of the typical features of an exercise of judicial power. It quells no controversy between parties. It precludes no future determination by a court of past criminal or civil liability. It does not determine the existence of any right that has accrued or any liability that has been incurred. Save for the limited immunity it confers on the State and its current or former employees, it does not otherwise affect any accrued right or existing liability. The contention that the Amendment Act is a legislative exercise of judicial power relies on characterisation of the Amendment Act as nevertheless being in the nature of, or akin to, a bill of pains and penalties. Two features are commonly identified as underlying the characterisation of a law as a bill of pains and penalties, and as thereby "a legislative intrusion upon judicial power"59. One is legislative determination of breach by some person of some antecedent standard of conduct. The other is legislative imposition on that person (alone or in company with other persons) of punishment consequent on that determination of breach. Neither in form nor in substance does the Amendment Act exhibit either of those characteristics. 57 Brandy v Human Rights and Equal Opportunity Commission (1995) 183 CLR 245 at 258; [1995] HCA 10. 58 Australian Communications and Media Authority v Today FM (Sydney) Pty Ltd (2015) 89 ALJR 382; 317 ALR 279; [2015] HCA 7. 59 Haskins v The Commonwealth (2011) 244 CLR 22 at 37 [25]; [2011] HCA 28, quoting Polyukhovich v The Commonwealth (1991) 172 CLR 501 at 649-650; [1991] HCA 32. See generally Polyukhovich v The Commonwealth (1991) 172 CLR 501 at 536, 685-686; Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1 at 69-71; United States v Lovett 328 US 303 at 322-324 (1946); Kariapper v Wijesinha [1968] AC 717 at 736. Hayne Bell Nettle The Amendment Act does not adopt, and does not fasten upon, any of the numerous specific findings made by ICAC in the Operation Acacia report and in the Operation Jasper report as to the corrupt conduct of individuals. Nor does it impose any legal burden on any of those individuals. They remain subject to the ordinary processes of the criminal law. What the New South Wales Parliament has done in the Amendment Act is of a different nature. Having informed itself by reference to the Operation Acacia report, the Operation Jasper report and the December report, but without having limited its consideration or linked its conclusions to any one or more specific findings in those reports, the Parliament has formed and expressed its own satisfaction that the administrative processes by which the three specified exploration licences were issued were tainted by corruption. The Parliament has gone on to express, and to give effect to, its own determination that it was in the public interest that the products of those tainted processes β the licences themselves β be cancelled, that the State be restored so far as possible to the position the State would have been in had those licences not been issued, and that those who had held the licences not obtain any advantage from having done so. The operative provisions of the Amendment Act, including those of cl 11 of Sched 6A concerning the use and disclosure of exploration information, can all be seen to be directed to those ends. That NuCoal, Mt Penny and Glendon Brook were deprived by those provisions of valuable assets, for which they were not compensated by the State, does not mean that they were thereby punished in the sense in which that term is used when describing an exercise of judicial power consequent on a finding of criminal guilt. Legislative detriment cannot be equated with legislative punishment. The specific reference in cl 3(1)(b) of Sched 6A to the purposes of the Amendment Act including "deterring future corruption" does not point in any different direction. It does not bear the weight which the parties challenging validity seek to place on it. It is to be read, in the context of the clause as a whole, as a reference to an aspect of promoting integrity in public administration. It is not indicative of an additional purpose of retribution. Nor does the Further Amendment Act shed any different light on the Amendment Act. Assuming, without deciding, that the Further Amendment Act can be treated as part of the same legislative scheme, the further amendments it introduced into the Mining Act are not indicative of stigmatisation or Hayne Bell Nettle penalisation. The effect of their designation of a former holder of a cancelled exploration licence as a person having "compliance or criminal conduct issues" is no more than to raise a consideration relevant to be taken into account in an overall assessment of whether or not that person is a fit and proper person to hold another licence under the Mining Act. It is not determinative of that inquiry. The case for characterising the Amendment Act as an exercise of judicial power in the nature of, or akin to, a bill of pains and penalties is weaker than that rejected by the Privy Council in Kariapper v Wijesinha60 in upholding the validity of a statute enacted by the Parliament of Ceylon which imposed civic disabilities in the form of disqualification from office, with consequent loss of emoluments, on specified persons who had been members of that Parliament in respect of whom allegations of bribery had been found by a commission of inquiry to be proved. In the judgment of the Board, to which reference has been made in a number of decisions of this Court, Sir Douglas Menzies held that the statute contained neither of the two elements which might justify its characterisation as a bill of pains and penalties in that61: "[f]irst, it contain[ed] no declaration of guilt of bribery or of any other act"; and "[s]econdly, the disabilities imposed by the [statute] are not, in all the circumstances, punishment". As to the second, Sir Douglas went on to say62: "It is, of course, important that the disabilities are not linked with conduct for which they might be regarded as punishment, but more importantly the principal purpose which they serve is clearly enough not to punish but to keep public life clean for the public good." The Amendment Act, like the legislation considered in that case, serves the legislative purpose of promoting integrity in public administration. The case for characterising the Amendment Act as an exercise of judicial power is weaker than in that case because of the absence of any necessary connection between ICAC's administrative findings of individual misconduct and the New South Wales Parliament's cancellation of the three specified exploration licences on the basis of them being the products of compromised processes. 61 [1968] AC 717 at 736. 62 [1968] AC 717 at 736. Hayne Bell Nettle The Amendment Act cannot be characterised as an exercise of judicial power. The argument that the Amendment Act contravenes an implied limitation on State legislative power therefore fails on its minor premise without the need to examine its major premise. No question of inconsistency arises on the facts This Court does not decide a constitutional question unless satisfied that there exists a state of facts which makes it necessary to decide that question in order to determine rights of the parties in actual controversy63. The parties to the NuCoal and the Cascade proceedings have agreed by their special cases to reserve for the consideration of the Full Court a question as to whether cl 11 of Sched 6A to the Mining Act is inconsistent with the Copyright Act, so as to be inoperative by force of s 109 of the Constitution to the extent of the inconsistency. But they have failed to show by those special cases that there exists a state of facts which makes it necessary for that question to be decided. The NuCoal special case records no agreement as to the existence or ownership of copyright, merely that "NuCoal asserts ownership of copyright" in reports submitted in accordance with Doyles Creek's obligations under the Mining Act as holder of EL 7270, and in "core samples and related information" provided in response to a notice issued under a general power of compulsion. The Cascade special case records agreement that Mt Penny owns copyright in a final report submitted in accordance with its obligation under the Mining Act as holder of EL 7406, and that Glendon Brook owns copyright in a final report submitted in accordance with its corresponding obligation as holder of EL 7405. However, that special case provides no basis to infer that the State of New South Wales has engaged or threatens to engage in any act which might amount to an infringement of that copyright. To the contrary, in correspondence annexed to the special case, the State has noted that it will rely on its statutory licence under s 183(1) of the Copyright Act to do acts comprised in the copyright in the reports and that it will discharge its obligation to pay equitable remuneration under s 183A of the Copyright Act. 63 Lambert v Weichelt (1954) 28 ALJ 282 at 283. Hayne Bell Nettle Disposition Each special case asks whether cll 1 to 13 of Sched 6A to the Mining Act, or any of them, are invalid. The answer is "No". The NuCoal and Cascade special cases ask in addition whether cl 11 of Sched 6A to the Mining Act is inconsistent with the Copyright Act and inoperative to the extent of the inconsistency. The response is "This question does not arise on the facts of the special case". To the final question in each special case, as to who should pay the costs of that special case, the answer is "The plaintiff" or "The plaintiffs", as the case may be. |
HIGH COURT OF AUSTRALIA APPELLANT AND CROWN MELBOURNE LIMITED & ORS RESPONDENTS Kakavas v Crown Melbourne Limited [2013] HCA 25 5 June 2013 ORDER Appeal dismissed with costs. On appeal from the Supreme Court of Victoria Representation A J Myers QC with P Zappia and R A Heath for the appellant (instructed by Strongman & Crouch) N J Young QC with N D Hopkins SC for the respondents (instructed by Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Kakavas v Crown Melbourne Limited Equity β Unconscionable conduct β Where appellant gambled at first respondent's casino and lost $20.5 million β Where appellant diagnosed as suffering from condition known as "pathological gambling" β Where appellant subject to "interstate exclusion order" under Casino Control Act 1991 (Vic) β Whether gambling transactions affected by unconscionable dealing β Whether appellant suffered from special disadvantage making him susceptible to exploitation β Whether first respondent had sufficient knowledge of any special disadvantage. Words and phrases β "actual knowledge", "constructive notice", "interstate exclusion order", "special disadvantage", "unconscionable conduct". Casino Control Act 1991 (Vic), ss 76, 77(2), 78B. Trade Practices Act 1974 (Cth), s 51AA. FRENCH CJ, HAYNE, CRENNAN, KIEFEL, BELL, GAGELER AND KEANE JJ. Between June 2005 and August 2006, the appellant lost $20.5 million playing baccarat at the casino in Melbourne operated by Crown Melbourne Limited ("Crown"). On 6 March 2007, the appellant issued proceedings against Crown and its employees, Mr John Williams and Mr Rowen Craigie (the second and third respondents), claiming that Crown engaged in unconscionable conduct contrary to s 51AA of the Trade Practices Act 1974 (Cth) ("the TPA") and that Mr Williams and Mr Craigie were involved in that contravention. He also claimed compensation for losses suffered by him as a result of Crown's unconscionable conduct under the general law which informs s 51AA1. The appellant made other claims as well, but it is not necessary to refer to them here. In the forefront of the appellant's case at trial was the proposition that Crown had incited the appellant, a known problem gambler, to gamble at its casino by incentives such as rebates on losses and the offer of transport on Crown's corporate jet. After a lengthy trial, the primary judge dismissed the appellant's claims and gave judgment for Crown on its counterclaim for $1 million in unpaid debts2. On 21 May 2012, the Court of Appeal of Victoria dismissed the appellant's appeal3. The issues in this Court In this Court the focus of the appellant's forensic strategy shifted away from the proposition that Crown lured or enticed him into its casino. The emphasis of the case advanced here, by the appellant, was upon the exploitation of the appellant's inability, by reason of his pathological urge to gamble, to make worthwhile decisions in his own interests while actually engaged in gambling. 1 Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (2003) 214 CLR 51 at 62-63 [5]-[8], 71-72 [40], 74 [46]; [2003] HCA 18. 2 Kakavas v Crown Melbourne Ltd [2009] VSC 559. 3 Kakavas v Crown Melbourne Ltd [2012] VSCA 95. Hayne Crennan Bell The appellant submitted that Crown exploited his condition by allowing him to gamble at its casino. The appellant submitted that, on the findings of fact made by the primary judge, he had made good his claim to relief in accordance with the statement by Mason J in Commercial Bank of Australia Ltd v Amadio4 of the "principle which may be invoked whenever one party by reason of some condition or circumstance is placed at a special disadvantage vis-Γ -vis another and unfair or unconscientious advantage is then taken of the opportunity thereby created", to relieve the innocent party of the consequences of that conduct. In stating the principle, Mason J went on "to emphasize that the disabling condition or circumstance is one which seriously affects the ability of the innocent party to make a judgment as to his own best interests, when the other party knows or ought to know of the existence of that condition or circumstance and of its effect on the innocent party."5 The appellant argued that the primary judge and the Court of Appeal erred by giving insufficient attention to the finding by the primary judge that the appellant is a problem gambler, and by addressing instead the question whether the appellant enjoyed equality of bargaining power with Crown. The primary judge and the members of the Court of Appeal erred, so it is said, in failing to have regard to Crown's exploitation of the appellant's special disadvantage when he was actually at the gaming table, that being the time when his pathological urge to gamble adversely affected his ability to make rational decisions in his own interests about the amount and frequency of his wagers. The appellant also claimed to suffer another special disadvantage in that, at the time of his losses, he was subject to an interstate exclusion order (IEO) made in New South Wales by the Commissioner of Police. Because of the IEO, under the Casino Control Act 1991 (Vic) ("the Casino Control Act") any winnings payable to the appellant by Crown as a result of his gambling activities were forfeited to the State of Victoria6. If he had known that this was the effect of the IEO, he would not have gambled at Crown's casino at all. (1983) 151 CLR 447 at 462; [1983] HCA 14. 5 Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 at 462. 6 Casino Control Act 1991 (Vic), s 78B. Hayne Crennan Bell The appellant submitted that because Crown knew of, or ought to have been aware of, the appellant's special disadvantages, or was sufficiently on notice of them to have been obliged, in accordance with notions of constructive notice, to make further inquiries concerning the appellant's circumstances, Crown ought now be made to disgorge its takings to the appellant. The respondents submitted that, notwithstanding the primary judge's finding that the appellant was affected by a pathologically strong predisposition to gamble, he was not in a situation of special disadvantage, much less a disadvantage which Crown sought knowingly to exploit. The respondents contended that the primary judge's findings of fact support two crucial propositions: first, that the appellant's abnormally strong urge to gamble was not a compulsion which deprived him of the ability to make a worthwhile choice whether or not to gamble, or to continue to gamble, with Crown or anyone else; and, secondly, that Crown's employees did not knowingly exploit the appellant's abnormal interest in gambling. In this regard, the respondents submitted that the appellant presented as a successful businessman able to afford to indulge himself in the high stakes gambling in which he chose to engage. Crown's employees accepted him as he sought to present himself. The respondents also submitted that the appellant's claim to recover his gambling losses should fail on the ground that his gambling was prohibited by statute. Further, the respondents submitted that the appellant would have continued to gamble at other casinos had he not gambled at Crown's casino. Accordingly, he suffered no compensable loss by reason of the circumstance that he happened to be gambling with Crown at the time he suffered his losses. As will become apparent, it is not necessary to address the respondents' submissions in relation to illegality and causation. For the reasons that follow, the appeal should be dismissed. The reasons commence with an overview of the appellant's case and proceed to a summary of the important findings of fact in relation to the dealings between the appellant and Crown. That summary will be followed by a discussion of the appellant's arguments. Overview The decisions of in which claims for relief from unconscionable conduct have been litigated, illustrate the necessity for close this Court, Hayne Crennan Bell consideration of the facts of each case in order to determine whether a claim to relief has been established7. The appellant's counsel disavowed any challenge to the primary judge's findings of fact. In due course we will summarise the findings in relation to the salient dealings between the appellant and Crown; but before doing that we should make some general observations by way of an overview of the appellant's case. In advancing a claim based on the principle expounded by Mason J in Amadio, the standards of personal conduct compendiously described as the conscience of equity. According to Pomeroy's the appellant relies upon "the 'conscience' which is an element of the equitable jurisdiction came to be regarded, and has so continued to the present day, as a metaphorical term, designating the common standard of civil right and expediency combined, based upon general principles and limited by established doctrines, to which the court appeals, and by which it tests the conduct and rights of suitors, β a juridical and not a personal conscience." The conscience spoken of here is a construct of values and standards against which the conduct of "suitors" β not only defendants β is to be judged9. The principle which the appellant invokes is concerned with a species of equitable fraud. In Earl of Chesterfield v Janssen10 Lord Hardwicke LC 7 Blomley v Ryan (1956) 99 CLR 362; [1956] HCA 81; Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447; Louth v Diprose (1992) 175 CLR 621; [1992] HCA 61; Bridgewater v Leahy (1998) 194 CLR 457; [1998] HCA 66; Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (2003) 214 CLR 51. 8 A Treatise on Equity Jurisprudence, 5th ed (1941), vol 1 at 74. 9 Gummow, Change and Continuity: Statute, Equity, and Federalism, (1999) at 44- 10 (1751) 2 Ves Sen 125 at 155-156 [28 ER 82 at 100], approved in Earl of Aylesford v Morris (1873) LR 8 Ch App 484 at 491 and in Blomley v Ryan (1956) 99 CLR Hayne Crennan Bell explained that it is a "kind of fraud ... which may be presumed from the circumstances and condition of the parties contracting: ... it is wisely established in this court to prevent taking surreptitious advantage of the weakness or necessity of another: which knowingly to do is equally against the conscience as to take advantage of his ignorance: a person is equally unable to judge for himself in one as the other." The invocation of the conscience of equity requires "a scrutiny of the exact relations established between the parties" to determine "the real justice of the case"11. Where an appeal is made by a plaintiff to the standards of equity embodied in the Amadio principle, the task of the courts is to determine whether the whole course of dealing between the parties has been such that, as between the parties, responsibility for the plaintiff's loss should be ascribed to unconscientious conduct on the part of the defendant12. In Louth v Diprose13, Deane J explained the basis on which the conscience of equity is engaged to apply the Amadio principle: "The intervention of equity is not merely to relieve the plaintiff from the consequences of his own foolishness. It is to prevent his victimization". In proceeding to consider whether equitable intervention is warranted in this case, a number of points may be made at the outset. First, the principle which the appellant invokes is not engaged by the circumstance that a plaintiff's transaction with a defendant has resulted in loss to the plaintiff, even loss amounting to hardship. In Tanwar Enterprises Pty Ltd v Cauchi, Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ said that it is wrong "to speak of 'unconscionable conduct' [as suggesting] that sufficient foundation for the existence of the necessary 'equity' to interfere in relationships established by ... the law of contract, is supplied by an element of hardship or unfairness in the terms of the transaction in question, or in the manner of its performance."14 11 Jenyns v Public Curator (Q) (1953) 90 CLR 113 at 118-119; [1953] HCA 2. 12 Jenyns v Public Curator (Q) (1953) 90 CLR 113 at 118-119; Tanwar Enterprises Pty Ltd v Cauchi (2003) 217 CLR 315 at 325 [23]; [2003] HCA 57. 13 (1992) 175 CLR 621 at 638. 14 (2003) 217 CLR 315 at 325 [26]. Hayne Crennan Bell Secondly, equitable intervention does not relieve a plaintiff from the consequences of improvident transactions conducted in the ordinary and undistinguished course of a lawful business. A plaintiff who voluntarily engages in risky business has never been able to call upon equitable principles to be redeemed from the coming home of risks inherent in the business. The plaintiff must be able to point to conduct on the part of the defendant, beyond the ordinary conduct of the business, which makes it just to require the defendant to restore the plaintiff to his or her previous position. At the trial of this action the appellant sought to accomplish this task by arguing that Crown and the other respondents should be required to accept responsibility for the appellant's loss because they deliberately preyed upon his personality flaws to entice him to gamble in Crown's casino. That case having failed, the appellant now focuses upon Crown's acceptance of the benefit of the appellant's improvident activities at the gaming tables. That shift in focus is a bold strategy; bold strategies do not always succeed. The particular flaw in the appellant's new strategy is that it reveals a case which consists essentially of a complaint about the outcome of risk-laden activity between the parties conducted in the ordinary course of Crown's business. The appellant seeks to distinguish his dealings with Crown from the ordinary course of its business, but it is difficult to see the special factual foundation required to shift responsibility for the party whose conduct did not go beyond his own conduct onto accommodating the appellant's wish to engage in risky business. It is telling that the parties referred to no decided case in which the doctrine articulated by Mason J in Amadio15 has been successfully invoked by a plaintiff complaining of the net loss suffered on account of multiple transactions conducted over many months with a putative "predator". This circumstance does not mean that the Amadio principle cannot apply to multiple transactions, but it does highlight the practical difficulty which confronts the appellant in his claim that the transactions in which he engaged are fairly described as a case of victimisation. 15 cf Blomley v Ryan (1956) 99 CLR 362; Louth v Diprose (1992) 175 CLR 621; Bridgewater v Leahy (1998) 194 CLR 457; Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (2003) 214 CLR 51. Hayne Crennan Bell To focus, as the appellant's case now does, on his state of excitement while he was actually at the gaming table is to lose sight of the reality that he was present at the gaming table on each of these occasions because of decisions voluntarily made by him when he was not in the grip of his abnormal enthusiasm. Importantly in this regard, the appellant does not have the benefit of a finding of fact that he suffered from a continuously operating compulsion which disabled him from choosing to stay away from the gaming tables. It was the appellant's choice β exercised many times over a period of many weeks when he was indisputably not at the tables in the casino in the grip of any gambling frenzy β to put himself in the position in which he might lose money at Crown's tables. Again, it is telling that none of the authorities cited by the parties affords an example of a successful claim by a party who has voluntarily chosen to indulge his or her "special disadvantage" by a decision made when not in the grip of that disadvantage. The observations of Spigelman CJ in Reynolds v Katoomba RSL All Services Club Ltd16, albeit made in the context of a claim in negligence, are apposite here: "It may well be that the appellant found it difficult, even impossible, to control his urge to continue gambling beyond the point of prudence. However, there was nothing which prevented him staying away from the club." It is also a circumstance relevant to the justice of the appellant's appeal to the conscience of equity that the activities in question took place in a commercial context in which the unmistakable purpose of each party was to inflict loss upon the other party to the transaction. Gambling transactions are a rare, if not unique, species of economic activity in a civilised community, in that each party sets out openly to inflict harm on the counterparty. In the language of Lord Hardwicke, there was nothing "surreptitious" about Crown's conduct. Generally speaking, it would be an odd use of language to describe the the outcome of such voluntary, and avowedly rivalrous, behaviour as victimisation of one side by the other. This is especially so once the focus of the appellant's case shifts away from his complaint of being lured or enticed into Crown's casino. To describe the business of a casino as the victimisation of the 16 (2001) 53 NSWLR 43 at 53 [48]. Hayne Crennan Bell gamblers who choose to frequent it might well make sense in moral or social terms depending on one's moral or social philosophy; but it does not make a lot of sense so far as the law is concerned, given that the conduct of the business is lawful. And the courts of equity have never taken it upon themselves to stigmatise the ordinary conduct of a lawful activity as a form of victimisation in relation to which the proceeds of that activity must be disgorged17. As the primary judge observed, "[i]n the absence of a relevant legislative provision, there is no general duty upon a casino to protect gamblers from themselves."18 A prominent feature of the relationship between the appellant and Crown was that the appellant was a high roller19. At times, he made a lot of money at Crown's expense: between 24 June 2005 and 13 March 2006, he had made profits of over $2.69 million on a turnover of around $480.5 million. By August 2006, his gambling with Crown had generated a turnover of $1.479 billion and he had lost $20.5 million to Crown20. During and after this period he continued to gamble in other casinos around the world. High rollers typically exhibit an abnormal interest in gambling. That abnormality might be described as pathological; it might also be that it is difficult for an observer to distinguish between a pathological high roller and one who is not. That a high roller may incur substantial losses is always, and obviously (and quite literally) on the cards. Motives other than the profit motive may explain the high roller's behaviour; but whether or not that is so in the case of a particular individual is a question which each high roller is entitled, invoking values of privacy and autonomy, to say is no one else's business. Whatever a high roller's motivation may be, members of that class of gambler present themselves to the casino, and are welcomed by it in the ordinary course of its business, as persons who can afford to lose and to lose heavily. It is for that reason that operators of 17 The position at common law is discussed in Reynolds v Katoomba RSL All Services Club Ltd (2001) 53 NSWLR 43 at 53 [49], 82 [125]-[126], 85 [141], 88 [152]. 18 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [436]. 19 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [31], [523]. 20 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [32]-[33]. The full details of the appellant's gambling with Crown during this time are set out at [259]-[422] of the primary judgment. Hayne Crennan Bell casinos are prepared to incur heavy expenses to attract their patronage away from other casinos. In return for lavish complimentary benefits, high rollers deliberately put at risk, and regularly lose, vast sums of money. Even if it were open to the courts to second guess the legislature's judgment to permit this sort of activity, it would be to descend into incoherence for the courts to require the return of losses suffered by high rollers so as to oblige operators of casinos to close their doors to high rollers while leaving them open to ordinary punters who, while less extravagant in their gambling habits, are also less able to absorb their losses. The purpose of these preliminary observations is to make the point that there is little scope for the intervention of equity to undo the result of transactions undertaken on the unmistakable footing that no quarter is asked and none is given by either party to the transaction, at least so long as the transaction has been conducted honestly in accordance with the rules of the game. It was not suggested that Crown ran a dishonest game. It is necessary to be clear that one is not concerned here with a casino operator preying upon a widowed pensioner who is invited to cash her pension cheque at the casino and to gamble with the proceeds. One might sensibly describe that scenario as a case of victimisation. One could also speak sensibly of a gambler, who presents at a casino with the cash necessary to play the game, as a victim of the casino, if there are factors in play other than the occurrence of the outcome that was always on the cards. For example, the gambler may be evidently intoxicated, or adolescent, or senescent, or simply incompetent21. But absent additional factors of this nature, it is difficult sensibly to describe the accommodation by an operator of a casino of a patron's desire to gamble as a case of victimisation. That is especially so in the case of the high roller who has the means, should he or she enjoy a run of luck, to hurt the casino. In the present case, there was no finding that the appellant could not afford to indulge himself as he did, much less that Crown knew that he could not do so. 21 See GNOC Corporation v Aboud 715 F Supp 644 (1989); Greate Bay Hotel & Casino v Tose 34 F 3d 1227 (1994); Hakimoglu v Trump Taj Mahal Associates 70 F 3d 291 (1995); see also Hallam, "Rolling The Dice: Should Intoxicated Gamblers Recover Their Losses?", (1990) 85 Northwestern University Law Review 240. Hayne Crennan Bell Nor was there any suggestion that the appellant gambled while intoxicated, or that he was, and was regarded by Crown as, an incompetent card player. He usually22, though not always23, gambled at Crown's casino with "front money", that is to say, funds which he brought with him to deposit with the casino for the purpose of gambling as part of the "programs" in which he engaged with Crown. The source of the appellant's funds was not made clear to Crown or for that matter to the Supreme Court at trial; but it is clear that the appellant had access to large sums of money and that he presented himself to Crown as a successful businessman whose pleasure it was to gamble and who could afford to sustain heavy losses. As will be seen, there was no suggestion that Crown was made aware that the appellant had any financial difficulty until the last occasion on which he gambled at Crown's casino, in August 2006. It is in this context that one must consider the appellant's claim that he was victimised by Crown by virtue of his abnormal desire to gamble and his ignorance of the effect of the IEO. These are the features on which the appellant relies to distinguish the dealings between himself and Crown from the general run of the business of a casino. As is apparent from the summary of the appellant's dealings with Crown set out below, he could and did choose to refrain from gambling. He chose to stay away from Crown's casino when it suited him to do so. The appellant knew that he could self-exclude if he chose: he had done so in the past in relation to Crown's casino and others. The primary judge found nothing in the appellant's dealings with Crown which would have suggested to Crown that the appellant could not self-exclude if he decided that it was in his interests to do so. To accept the appellant's claim that, on the occasions he turned up to gamble at Crown's casino, Crown's employees should have singled him out from the other high rollers and refused to accommodate him, would be to cast a burden of responsibility on Crown which goes well beyond refraining from exploitation. 22 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [259], [270], [285], [293], 23 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [274], [306], [383], [386], Hayne Crennan Bell And in any event, having regard to the primary judge's findings, the appellant's likely response would have been to take his business elsewhere. The appellant does not have the benefit of a finding that he would have avoided his gambling losses by staying away from Crown's casino. Indeed, the learned primary judge found that "Harry Kakavas had chosen to gamble. The only remaining choice was where."24 That the appellant singles out Crown as the target of his attempt to recover losses is not merely relevant to the causation argument raised by Crown, it also causes one to regard with some circumspection the basis of his claim upon the conscience of equity. One basis advanced by the appellant for fixing upon Crown as the "predator" who victimised him is that Crown knew or ought to have known of his pathological enthusiasm for gambling and that his gambling had been associated with his troubled past. But the appellant went to considerable lengths to assure Crown that his troubles with gambling were now behind him when he sought to be re-admitted to Crown's casino. That he did so is a circumstance to be borne in mind in considering his claim upon the conscience of equity. The other basis advanced for fixing upon Crown as the party responsible for the appellant's losses is the effect of the IEO and the alleged knowledge of Crown's employees of its effect upon the appellant's entitlement to retain his winnings. But the appellant does not have the benefit of a finding that Crown's employees adverted to the effect of the IEO or knew that the appellant did not appreciate its effect; indeed, the primary judge's findings are to the contrary. Finally, by way of preliminary observation, once attention is directed to the effect of the appellant's gambling enthusiasm while at the tables, as the occasion on which his special disadvantage was in play, it becomes difficult to see a good reason to single the appellant out as a person suffering from a "special" disadvantage by reason of his "relationship" with Crown. The observations of Mandie JA are apposite25: "[T]he special disability or disadvantage must be one that exists 'in dealing with the other party' and that puts the person at a disadvantage in dealing 24 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [427]. 25 Kakavas v Crown Melbourne Ltd [2012] VSCA 95 at [33]. Hayne Crennan Bell with that other party. Here, the wagers were standard gambling transactions and Crown had no greater advantage over the appellant than it had over any other gambler. The house had an edge as the appellant well knew. If the appellant had gambled less frequently, he may have won less or he may have lost less. If the appellant's wagers had been of smaller amounts, he may have won less or he may have lost less. No doubt there was some limit on what the appellant could afford to lose (although it is not clear on the evidence what that limit was) and if the appellant had gambled less frequently or in smaller amounts, that limit may have taken longer to reach (assuming that he was 'unlucky'). In the long run, the appellant was neither more likely nor less likely to win than any other gambler. These considerations also show that the wagering transactions were in any event not unfair, unjust or unreasonable as required by the Amadio doctrine." The dealings between the appellant and Crown We turn to summarise the salient dealings between the appellant and Crown. The following summary is drawn from the findings of the primary judge. For many years before the end of 2004, the appellant was not welcome at Crown's casino. When he was invited back at the end of 2004, he did not return to the casino until June 2005. The invitation, when it came, was prompted by Crown's understanding that the appellant was gambling large sums of money, which he could evidently afford to lose, with other casinos. At that stage, it was evident that, as the primary judge said: "Harry Kakavas had chosen to gamble. The only remaining choice was where."26 Ten years previously, the appellant had commenced gambling at Crown's casino in July 199427. He was then aged 27. In the course of 1994 he lost $110,000 of his father's money28. He also defrauded Esanda Finance Corporation Ltd ("Esanda") of approximately $286,00029. In seeking to mitigate his offence 26 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [427]. 27 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [81]. 28 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [82]. 29 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [82]. Hayne Crennan Bell in the ensuing criminal proceedings, the appellant asserted that his fraud was committed to support an addiction to gambling30. Crown was sceptical of that assertion31, believing that it "was a mere pitch, calculated to gain the sympathy of the judge who sentenced him for the Esanda fraud."32 Nevertheless, in 1995, the appellant was referred by Crown to Dr Jack Darmody, who ran a program for problem gamblers, the Crown Assistance Program33. The appellant, to Crown's knowledge, was treated by Dr Darmody for ongoing gambling issues34. On 8 November 1995, while the criminal proceedings were pending, the appellant applied for and was granted a self-exclusion order by Crown. This order prevented him from gambling at the casino35. The primary judge found that no Crown employee knew or believed the appellant's self-exclusion "was to address genuine gambling problems."36 In 1996, Dr Darmody referred the appellant to Mr Bernard Healey, a clinical psychologist who specialised in gambling related diseases37. Mr Healey diagnosed the appellant as a "classic pathological gambler"38. Mr Healey, to Crown's knowledge39, treated the appellant for his problem. 30 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [1]. 31 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [2]. 32 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [2]. 33 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [94], [467]. 34 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [467]. 35 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [2]. 36 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [471]-[473]. 37 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [103]. 38 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [104]. 39 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [110]. Hayne Crennan Bell In early 1998 the appellant was sentenced to serve four months in gaol for the Esanda fraud. After his release from gaol, the appellant sought revocation of his self- exclusion order40. The appellant's revocation application included an acknowledgment that the appellant had given careful consideration to the matter and would contact Crown immediately if he had any concerns about his decision41. The application was accompanied by a report dated 3 June 199842 from Mr Tim Watson-Munro, a psychologist. The report stated that Mr Watson-Munro's treatment of the appellant had been "very successful" and that the appellant "no longer [felt] the pathological compulsion to gamble which had plagued him in earlier times."43 Crown accepted Mr Watson-Munro's report as true44 although Mr Bill Horman, one of Crown's employees, regarded it as unsatisfactory, in the sense that he did not believe that the appellant had ever felt a pathological compulsion to gamble45. On or about 18 June 1998 the appellant's self-exclusion order was revoked, but was replaced by a withdrawal of licence (WOL) to enter or remain in the casino or on Crown premises46. The WOL was related to pending armed robbery charges against the appellant47. The primary judge found that the WOL 40 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [113]. 41 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [113]. 42 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [114]. 43 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [114]. 44 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [5]. 45 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [121]. 46 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [122]. 47 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [112], [124]. Hayne Crennan Bell was warranted by the pending charges and was not connected to a concern on Crown's part about the appellant's gambling48. Between 1998 and 2001 the appellant repeatedly, but unsuccessfully, sought re-entry to Crown's casino and revocation of the WOL. His requests were denied49. After 2001, the appellant ceased his attempts to return to Crown's casino50. In the meantime, on 28 September 2000, the New South Wales Police Commissioner directed that he be excluded from the Star City Casino in Sydney51 ("the NSW exclusion order"). Two employees of Crown, Mr Horman and Mr Craigie, became aware of the NSW exclusion order by early November 200052. The primary judge accepted that their knowledge was Crown's knowledge53; further, the existence of the order was recorded in several Crown documents54. The appellant moved to the Gold Coast in Queensland in about 2000. He held himself out to the world as a very successful Gold Coast businessman who made a lot of money out of property development and managed to combine the roles of real estate salesman and recreational gambler55. 48 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [6]. 49 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [8], [130], [153]-[154], [157]. 50 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [157], [172]. 51 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [138]. 52 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [144]-[146], [559]. 53 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [86]. 54 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [144], [150], [166], [559]. 55 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [7]. Hayne Crennan Bell In 2000, the appellant chose to exclude himself from Jupiters Casino on the Gold Coast56. Crown, through Mr Horman, became aware of this self-exclusion. In July 2002, the appellant told Mr Horman that it was still in place57. By April 2001, the appellant had also chosen to exclude himself from Burswood Casino58. Crown, through its employees, Mr Horman and Mr Peter Fleming, knew of this self-exclusion59. In January 2003, Mr Horman referred to the NSW exclusion order in an email to Mr Fleming for the purposes of passing information on to Burswood Casino60. In July 2003, the appellant met with Mr Ishan Ratnam, the Manager at that time of VIP Services for Crown61. During this meeting they spoke about how well the appellant was doing and his trips to gamble in Las Vegas62. The appellant asked Mr Ratnam if he could talk to Mr Horman about allowing him to return to Crown's casino. Mr Ratnam mentioned this meeting to other employees of Crown, Mr Williams and Mr Howard Aldridge63. The fact that the appellant was said to be gambling in Las Vegas64 prompted discussion within Crown about 56 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [137]. 57 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [478]. 58 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [159]. 59 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [479]. 60 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [166]. 61 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [173]. 62 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [175]. 63 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [176]. 64 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [177]. Hayne Crennan Bell allowing the appellant back to its casino; but Crown did not respond to the appellant's approach at this time65. On 27 October 2004, Mr Williams sent an email to Mr Aldridge and Mr Horman as to the steps which would be required for the appellant to return to Crown's casino66. Mr Horman initiated some internal checks in relation to the appellant's position and discovered that the appellant had been very successful in business67. By October 2004, Crown's senior executives, including Mr Williams and Mr Craigie, learned that the appellant was "travelling well" financially, while he was losing money gambling in Las Vegas68. Between May and October 2004, Crown's senior executives, including Mr Williams, Mr Craigie and Mr Horman, gave consideration to the appellant's return to the casino69. On 29 October 2004, there was a meeting of a committee described variously as the "Persons of Interest Committee"70 or the "WOL Committee"71. The meeting considered the question of the appellant's return to Crown's casino. Minutes of the meeting recorded that he was then gambling at Star City Casino72 in Sydney. The committee concluded that the appellant should be allowed to return to Crown's casino73. 65 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [179]. 66 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [181]. 67 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [188]. 68 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [178], [181]-[182], [186]. 69 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [177]-[191]. 70 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [192]-[193]. 71 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [198]. 72 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [478]. 73 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [195]. Hayne Crennan Bell Although Mr Horman did not himself believe that the appellant had a gambling problem, he thought the appellant should obtain a report from a psychologist or psychiatrist74. That was because he wished to protect Crown against an allegation that it had breached a duty of care to the appellant by allowing him to gamble, even though he regarded the appellant's history since 1998 as giving him, in relevant aspects, a clean bill of health75. Mr Horman brought the IEO to mind in late 200476. Crown initiated contact with 12 November 2004 Mr Ratnam telephoned the appellant and said that Mr Williams had asked for his number78. The appellant was happy for Mr Ratnam to pass this on79 and said that he was happy to recommence gambling at Crown's casino. Mr Ratnam gave the appellant's number to Mr Williams80. Mr Williams did not immediately call the appellant81, however, and a week later, on 19 November 2004, the appellant called Mr Williams, leaving three voicemail messages82. Mr Williams returned the calls, and eventually made contact with the appellant83. At that time, some of Crown's officers still had some residual concern about his standing as a "some-time" problem gambler84. Crown 74 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [197]. 75 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [493]. 76 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [166], [197]. 77 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [204]-[205], [212], [214]. 78 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [204]-[206]. 79 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [204]. 80 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [204]. 81 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [212], [218]. 82 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [218]. 83 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [212]. 84 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [25], [493]. Hayne Crennan Bell subsequently informed the appellant that his WOL would be revoked upon the appellant making a written application accompanied by an opinion from a psychiatrist or psychologist stating that he no longer had any gambling problems85. On or about 8 or 9 December 2004 Mr Richard Doggett, a senior Crown officer, had a telephone conversation with the appellant. Mr Doggett explained that Crown was "being very pedantic with your application ... because you've been excluded from other casinos and you were excluded by the Chief Commissioner of Police in New South Wales"86. In December 2004, Mr Healey declined to provide the appellant with a report clearing him of gambling problems. The appellant informed Mr Doggett of this fact and Mr Doggett urged the appellant to "try any psychologist"87. On 9 or 10 December 2004, Mr Doggett met the appellant at Coolangatta Airport to have him sign a letter in respect of his return to gaming with Crown88. The letter stated that it enclosed a letter from a psychiatrist or psychologist who had made a current assessment of the appellant. In fact, the appellant had not then been assessed89. Subsequently, Ms Janine Brooks, a psychologist, prepared a report dated 23 December 2004 to support the appellant's return to Crown's casino90. She reported that she was "unable to do an assessment of his suitability for re-admission to [the casino]", but that the appellant had told her that between 1990 and 1998 he was a compulsive gambler but had turned his life around91. 85 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [219]-[220], [224]. 86 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [222]. 87 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [213], [494], [583]-[584]. 88 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [223]. 89 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [223]. 90 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [12]. 91 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [225]. Hayne Crennan Bell She reported that he said "he had conquered his past demons, but if he had a relapse he would again self-exclude."92 Ms Brooks noted that the appellant was "an intelligent, highly motivated, and goal driven individual who [had] in the past shown himself able to self regulate his behaviour as evidenced by his 'self-exclusion' from Crown"93. She referred to the appellant's "relapse plan", which the appellant said he "would not hesitate to implement."94 The primary judge found that the appellant was perfectly capable of disclosing to Ms Brooks any vulnerability about which he was concerned, but that he did not do so95. Further, his Honour found that Crown was entitled to accept the appellant's representations made through Ms Brooks96. As Crown saw it, the central question in late 2004 was not whether the appellant's gambling was a problem, but whether there remained any of the behavioural issues which had led to the WOL97. In January 2005, Crown decided to revoke the WOL. Mr Fleming issued a notice to that effect on 9 February 2005. On the same day, Mr Horman noted in an email that "there is no rush to progress this matter."98 92 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [225]. 93 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [225]. 94 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [225]. 95 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [584]. 96 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [500]. 97 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [471]. 98 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [582]. Hayne Crennan Bell Before the appellant recommenced gambling at Crown's casino, he did not suggest to any Crown employee that he had any gambling problems99. The primary judge found that100: "Crown accepted what Mr Kakavas wanted Crown to believe: that, by November 2004, he had become a highly respected Gold Coast businessman whose liking for the gaming tables had caused problems in the past, but who had since conquered those problems to the extent that he had been able to amass wealth from his business activity." In late January 2005, the appellant was invited to be Crown's guest at the Australian Open tennis tournament101. The appellant did not gamble at Crown's casino during this visit102. However, he met with Mr Williams and, among other things, sought to negotiate the privileges he would receive from Crown upon his jet, gambling rebates, return accommodation for the appellant and guests, and applicable table limits for bets. These discussions continued after the appellant returned to the Gold Coast. the use of Crown's private including: The appellant negotiated vigorously with Mr Williams in relation to the privileges offered to high roller gamblers in Las Vegas, including travel by private jet103. Mr Williams said Crown would not be willing to provide its jet until he had made a number of visits104. The appellant stayed at the Crown Hotel for an evening on 5 March 2005 but did not gamble during this visit105. Significantly, the appellant did not 99 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [8]. 100 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [441]. 101 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [232]. 102 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [238]. 103 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [241]. 104 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [241]. 105 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [243]. Hayne Crennan Bell gamble on this occasion because Crown would not agree to the hand limit he was seeking106. We pause to observe that these negotiations reveal that the appellant was capable of making rational decisions in his own interests, and of bargaining in pursuit of those interests. It may also be noted that the WOL was revoked in January 2005; but the appellant did not recommence gambling at Crown's casino until 24 June 2005107. Between 24 June 2005 and 17 August 2006, the appellant visited Crown's casino on numerous occasions. He entered into premium player agreements108. He was provided with lavish inducements to gamble at the casino including the use of a private jet, lucky money109, special rebates and commissions, cheque cashing facilities, and free food, beverages and accommodation. Between 24 June 2005 and 17 August 2006, the appellant visited Crown's casino to gamble on 28 occasions and entered into 30 separate gambling programs. In that period he "never suggested to Crown that he was other than financially capable of maintaining his high roller status, and keen to do so."110 Nor did he attempt to employ the self-exclusion mechanism111. It is to be noted that he did not gamble at Crown's casino between October 2005 and March 2006. The appellant's "patterns of play between June 2005 and August 2006 were generally consistent with the picture of himself which he sought to present to the world: that of a successful businessman who enjoyed gambling, but with an appropriate awareness of the need for balance."112 The appellant entertained 106 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [243]. 107 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [259]. 108 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [266]. 109 "Lucky money" is the payment of a complimentary allowance in cash. 110 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [18]. 111 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [18]. 112 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [521]. Hayne Crennan Bell friends at the casino and enjoyed outside entertainment and meal breaks. He also promoted his financial capacity to Crown consistently throughout this period. This self-promotion included a boast that he had a gaming bank of many millions of dollars113. On his visit on 24 June 2005 (Program 1) the appellant deposited $1 million by way of front money114. When he stopped gambling to have dinner with his guests, he was ahead by $1 million115. On his visits between 1 and 3 July 2005 (Programs 2 and 3) the appellant, again, deposited $1 million front money116. On this trip, he ran out of money, at which point Crown agreed to match him dollar for dollar up to $350,000 if he could secure further funds. Crown transported the appellant to a branch of his bank where he withdrew $345,000, which he provided to Crown. The casino matched it by providing credit in a like amount117. The appellant used the $690,000 to gamble and lost it all118. On his visit on 1 September 2005 (Program 4) the appellant deposited front money in the sum of $5 million119. Although he lost all of his money, he ended the visit with a previously agreed 20 per cent rebate which amounted to $1,010,000. He transferred this amount directly to his bank for use on his next gambling trip120. 113 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [548], [557]. 114 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [259]-[260]. 115 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [268]. 116 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [270]. 117 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [274]. 118 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [277]. 119 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [285]. 120 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [291]. Hayne Crennan Bell On his visit on 8 September 2005 (Program 5) the appellant negotiated an agreement with Crown that, if he brought $4 million as front money, Crown would provide him with $1 million credit121. Crown records show that the appellant won $2.5 million and returned to the Gold Coast taking with him his winnings and his front money122. On his 9 September 2005 visit (Program 6) the appellant deposited front money in the sum of $3.5 million123. On this occasion, Mr Aldridge authorised the issue to the appellant of various vouchers totalling $17,500124. The appellant won $4,550,000125. The appellant then repurchased his $3.5 million bank cheque and received a Crown cheque for $4.5 million together with cash of $50,000126. On his visit of 12 September 2005 (Program 7) the appellant was advised he did not have to bring any front money, as a "special deal" by Mr Williams127. On this visit he was granted a non-transferable restricted cheque cashing facility of $4.5 million128. The appellant won $2,040,000 on this visit129. 121 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [293]. 122 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [301]. 123 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [302]. 124 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [303]. 125 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [304]. 126 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [304]. 127 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [305]. 128 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [306]. 129 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [311]. Hayne Crennan Bell On 16 September 2005 (Program 8) the appellant brought $2.3 million front money130. He lost the $2.3 million, and he did not gamble again on that visit131. On 4 and 5 October 2005 (Program 9) the appellant brought $1.1 million as front money132. On this visit he signed a premium player program agreement which gave him a 0.65 per cent commission on a minimum $4 million turnover133. On 4 October, he lost the $1.1 million, but received a commission of $326,362134. The following day, the appellant deposited a further $1.1 million, which he lost, but received $200,000 and $38,465 as commission on turnover. The appellant then deposited a third cheque for $1.5 million, and received $87,897 by way of this day's turnover135. The appellant did not gamble at Crown's casino between October 2005 and March 2006136. On 6, 7 and 10 March 2006 the appellant returned to Crown's casino (Program 10). He brought $1.5 million front money137. At the end of the session on the 6th, he had a balance of $10,000, which he cashed in138. The appellant was given a gaming chip voucher for $100,000139 and he received $200,000 in 130 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [312]. 131 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [314]. 132 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [326]. 133 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [326]. 134 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [327]. 135 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [328], [330]. 136 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [333]. 137 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [340]. 138 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [341]. 139 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [342]. Hayne Crennan Bell commission for the turnover on the 6th140. He gambled again on the 7th and lost $1.1 million, but was paid $45,242 in commission at the end of this session141. The appellant went home to the Gold Coast, but returned on 10 March with a further $4 million front money142. At the end of this session he repurchased his bank cheque for $4 million and was given a Crown cheque for $2.4 million together with a further cheque for $200,161 being his turnover commission143. On 11 March 2006 (Program 11) the appellant used the $2.4 million cheque as front money144. The primary judge outlined the appellant's activities as follows145: "The electronic Crown turnover records β¦ show he gambled on 11 March 2006 from 2.13pm until 3.42pm and lost $446,925, then from 3.44pm to 4.14pm when he lost a further $493,000, and then from 4.10pm to 5.43pm when he won $1,490,000. The plaintiff was entitled to commission of $202,698 on his turnover of $31,184,300. At 5.46pm the plaintiff withdrew $12,698 in cash and received two Crown cheques, one for $3m and the other for $190,000. He then redeposited his $3m cheque at 6.46pm and returned to gamble at 6.48pm until 7.49pm when he won $1,000,000, again from 9.16pm to 9.26pm when he lost $570,000, then from 9.28pm to 10.53pm when he lost $519,950 and then from 9.26pm to 12.21am when he won $2.1m. Following this second bout of gambling the plaintiff was entitled to commission of $255,598 on turnover of $39,322,700. At 12.48am he withdrew $5,598 in cash and received two Crown cheques, one for $250,000 and the other for $5,050,000." 140 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [343]. 141 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [343]. 142 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [344]. 143 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [345]. 144 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [347]. 145 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [348]. Hayne Crennan Bell We pause here in the narrative to note that the appellant's conduct on various occasions referred to above affords a practical demonstration of his ability to stop gambling when it suited him to do so. This ability was very much on display in mid-March 2006. On 12 March 2006 (Programs 12 and 13) the appellant deposited front money of $640,161 with Crown146. He also deposited a bank cheque for a further tables $4 million, apparently because he was playing at simultaneously147. He redeemed his $4 million bank cheque and received in addition two Crown cheques for $1 million and $997,374148. He deposited his $4 million bank cheque into his Crown account149. After further gambling, he again redeemed this cheque along with Crown cheques for $1 million and $126,822 (commission)150. two different On 13 March 2006 (Programs 14 and 15) the appellant deposited $4 million as front money151. At the end of that day's gambling he withdrew the balance of his winnings and commission as a Crown cheque for $10 million, and redeemed his $4 million front money152. On 17 to 19 March 2006 (Program 16) the appellant deposited a $4 million bank cheque as front money153. On the 17th he gambled for a while, then redeemed his $4 million cheque and received a Crown cheque for 146 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [350]. 147 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [351]-[352]. 148 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [352]. 149 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [354]. 150 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [354]. 151 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [355]. 152 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [355]-[356]. 153 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [360]. Hayne Crennan Bell $2.2 million, $547 in cash and commission of $196,547154. Later that day he resumed playing and finished ahead by $54,500155. On 18 March, he redeemed his $4 million cheque and received two Crown cheques for $1.5 million and $350,000 together with $7,474 cash156. At the end of 19 March, the appellant was paid a Crown cheque for $150,000 and $149 in cash157. For the period between 30 March and 3 April 2006 (Program 17) the appellant brought a $1.8 million cheque by way of front money158. On 31 March he further deposited a cheque for commission that he had received of $200,000159. On 3 April, the appellant deposited a cheque for $1.5 million160. He then lost $1,456,000161. He was entitled to $91,811 commission, of which he took $90,000 in chips and $1,811 in cash162. He then lost again. He was entitled to a commission of $2,490, which was deposited into his Crown account163. 154 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [362]. 155 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [364]. 156 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [366]. 157 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [367]. 158 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [370]. 159 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [371]. 160 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [373]. 161 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [373]. 162 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [373]. 163 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [373]. Hayne Crennan Bell On 13 April 2006 (Program 18) the appellant brought a $1.5 million cheque by way of front money164. He lost, leaving the casino with $2,912 (including commissions received)165. On 27 April 2006 (Program 19) the appellant brought a cheque for $1.7 million by way of front money166. At one point he received commission of $125,000, which he withdrew as chips167. He deposited a further two bank cheques (which appear to have amounted to $500,000)168. It appears that he lost it all, but he received another $31,206 commission, which he drew as cash169. For the period between 3 and 5 May 2006 (Program 20) the appellant brought a $2 million cheque by way of front money170. On 3 May he applied for, and was granted, a $500,000 cheque cashing facility171. He lost all of his front money, but received commission of $114,335, which he withdrew as $14,335 cash and a $100,000 chip purchase voucher172. He lost all of the $100,000173. He then drew on the $500,000 cheque cashing facility to purchase an equivalent amount in chips174. The next day he deposited another cheque for $1 million, which he withdrew as chips. Of this, it appears that he lost $635,000, but 164 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [374]. 165 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [375]. 166 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [376]. 167 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [377]. 168 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [377]. 169 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [377]. 170 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [379]. 171 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [380]. 172 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [383]. 173 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [383]. 174 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [383]. Hayne Crennan Bell received commission of $114,900, $14,900 of which he took in cash175. He applied for, and was granted, a second cheque cashing facility for $500,000 to purchase chips176. He then won $5,194,000 ($4 million and $1.2 million in chips were deposited into his Crown account)177. He then lost around $2 million and received $105,000 commission (a $100,000 chip purchase voucher and $5,000 cash)178. In the early morning of the next day, the appellant deposited $3 million worth of chips into his Crown account and had $1.5 million transferred out179. During 5 May he withdrew $2 million from his account as a chip purchase voucher180. He received $1,068,000 commission, which he drew as a chip purchase voucher. He deposited a further bank cheque for $2 million and used those funds to draw a chip purchase voucher181. He received further commission of $200,000, which he drew as a chip purchase voucher182. He later took $5,000 as cash183. The appellant was granted a further $500,000 cheque cashing facility, upon which he drew that night184. He later deposited a further $94,000 and drew 175 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [384]. 176 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [385]. 177 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [385]. 178 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [385]. 179 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [385]. 180 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [386]. 181 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [386]. 182 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [386]. 183 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [386]. 184 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [386]. Hayne Crennan Bell it as a chip purchase voucher185. He took his final commission of $42,619 as cash at the end of the night186. On 11 and 12 May 2006 (Program 21) the appellant produced a bank cheque for $2.5 million, which he drew as a chip purchase voucher on the 12th187. He was winning, but drew upon another $500,000 cheque cashing facility to obtain that amount as a chip purchase voucher188. He later drew $400,000 as a chip purchase voucher from commissions he had received189. He then drew again on the $500,000 cheque cashing facility. He gambled and lost the entire amount190; but he received $15,350 by way of commission, which he then took as cash191. On 18 May 2006 (Program 22) the appellant brought with him $2.5 million as front money. He also used commission of $90,000 in the form of a chip purchase voucher and drew $500,000 on a cheque cashing facility192. At the end of this play he received $20,803, which he took as cash193. For the period between 24 and 26 May 2006 (Program 23) the appellant was given $30,000 in gaming chip vouchers by Crown194. He had two bank 185 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [386]. 186 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [386]. 187 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [387]. 188 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [387]. 189 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [387]. 190 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [387]. 191 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [387]. 192 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [388]. 193 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [388]. 194 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [391]. Hayne Crennan Bell cheques each for $2 million available to him195. He deposited one cheque into his Crown account and drew a chip purchase voucher. It also appears that the appellant drew $500,000 from a cheque cashing facility196. On 25 May he paid the second $2 million cheque into his Crown account, and he also used a $500,000 cheque cashing facility197. After his gambling on that day, he deposited, in chips, two tranches of $2 million and seems to have redeemed both $2 million cheques198. He then lost it all199. He drew down the $500,000 cheque cashing facility and lost that too200. The appellant continued gambling on 26 May. At the end of this day, the appellant took only his commission of On 31 May 2006 (Program 24) the appellant brought with him a $2 million cheque by way of front money202. He drew $500,000 on the cheque cashing facility203. He received $234,000 commission and drew a chip purchase voucher in that amount204. The final position at the end of this session was that the appellant had lost $2,230,750; but he received $270,386 commission205. 195 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [392]. 196 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [392]. 197 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [393]. 198 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [393]. 199 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [393]. 200 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [393]. 201 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [395]. 202 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [397]. 203 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [397]. 204 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [397]. 205 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [398]. Hayne Crennan Bell On 6 July 2006 (Program 25) the appellant had insufficient funds. As the appellant told Mr Williams he was to receive $1.5 million on 7 July through a property settlement, Mr Williams arranged a special $1.5 million credit on the basis that the appellant would repay Crown once settlement had taken place206. The appellant lost the entire amount but received $29,624 by way of commission, which he took as cash207. On 11 and 12 July 2006 (Program 26) the appellant drew from a $500,000 cheque cashing facility208. After gambling for a time on 11 July, he was ahead by $1,728,465 and deposited $1,650,000 into his Crown account209. On 12 July the appellant won a further $2,084,250 and received $179,274 commission210. He withdrew $30,000 from his Crown account and took a Crown cheque for $3.65 million when he left the casino on this visit211. On 19 July 2006 (Program 27) the appellant brought $390,000 front money and used a $500,000 cheque cashing facility. He lost $932,150 and received $29,239 in commission212. On 5 August 2006 (Program 28) the appellant called upon a $500,000 cheque cashing facility. He redeemed two cheques for $100,000 and $400,000 respectively213. 206 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [404]. 207 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [406]. 208 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [408]. 209 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [408]. 210 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [409]. 211 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [409]. 212 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [411]-[412]. 213 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [413]. Hayne Crennan Bell On 11 August 2006 (Program 29) the appellant deposited a bank cheque for $500,000 by way of front money and drew upon a $1 million cheque cashing facility214. After losing his front money and the $1 million cheque cashing facility, the appellant signed a counter cheque to Crown for $1 million215. This cheque was subsequently dishonoured216. It was the basis for Crown's counterclaim. On 17 August 2006 (Program 30), the appellant's final visit to Crown's casino, he deposited a bank cheque in the sum of $298,000, and another for $76,106, then later, another for $2 million217. He lost it all218; but he received commission of $51,575, of which he used $50,000 to purchase a chip purchase voucher219. He received another $2,195 commission, which he took as cash220. Not surprisingly given these dealings, Crown regarded the appellant as a person of considerable means221. Mr Craigie gave evidence that the appellant would have been one of Crown's largest Australian players but not in the same league as Crown's top international players. While the appellant was gambling at Crown's casino, he had the capacity to self-exclude222; he had a demonstrated capacity to participate in negotiations 214 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [414]. 215 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [415]. 216 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [415]. 217 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [420]. 218 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [421]. 219 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [421]. 220 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [421]. 221 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [557]. 222 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [11]. Hayne Crennan Bell with Crown involving the cut and thrust of offer and counter-offer223; he regularly completed programs with funds to his credit224; and he was quite capable of declining to visit Crown's casino β not for a week or even a fortnight, but for considerable periods (eg, January 2005 to June 2005, and October 2005 to March 2006)225. When the appellant last gambled at Crown's casino, on 17 August 2006, he had a conversation with Mr Williams. Mr Williams gave evidence that this conversation was the first time that the appellant had expressed concern about his losses with him226. Mr Williams told the appellant to "have a rest for a while"227. The appellant had not, until that day, discussed with any Crown employee the losses he had sustained228. After 17 August 2006, the appellant repeatedly pressed Crown to allow him to gamble at the casino229. On at least three occasions the appellant asked to be allowed to deposit front money into his Crown account, but Crown declined his request230. 223 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [18]. 224 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [522], [527]-[530]. 225 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [18]. 226 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [417]. 227 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [417]. 228 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [418]. 229 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [423]. 230 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [423]. Hayne Crennan Bell Between August and November 2006, the appellant gambled, and lost money, at casinos in Las Vegas, the Bahamas and New Zealand231. According to the appellant, at the time of the trial, he had not gambled since. One should also note that, on a number of occasions between June 1998 and November 2000, the appellant made threats to sue Crown if it did not revoke the WOL232. Discussion of the appellant's arguments We turn now to discuss the arguments advanced in this Court on behalf of the appellant. We will deal in turn with the contentions that the courts below erred in failing to appreciate the significance of the primary judge's findings of fact in relation to the appellant's special disadvantages, and in failing to conclude that Crown's employees were sufficiently aware of the appellant's special disadvantages to engage the Amadio principle. In regard to this latter issue we will also discuss the appellant's reliance on constructive notice. The primary judge's approach The first argument advanced on behalf of the appellant is that the primary judge and the Court of Appeal erred in not applying the principle enunciated by Mason J in Amadio. It is said that they erred in approaching the matter as if the relevant question was whether the parties enjoyed equal bargaining power rather than addressing the circumstances of the appellant's special disadvantages and their effects upon him when he was at the gaming tables. The primary judge concluded233: "Crown certainly wanted his custom. People like him fed its business. Crown executives, including the individual defendants, were involved in planning for his return as a high-rolling patron. But Crown had no 231 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [425]. 232 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [115], [117], [132], [141]- 233 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [21]. Hayne Crennan Bell conception of Mr Kakavas as suffering from any kind of relevant disadvantage. There was, indeed, no inequality of bargaining power, and no exploitation of, or any plan to exploit, any special disability from which Mr Kakavas might have been suffering." In this regard, the primary judge drew upon the reasons of Deane J in Amadio rather than the enunciation of principle by Mason J234. In the Court of Appeal Mandie JA did not "discern there to be any real difference between the formulations of Mason J and Deane J."235 The absence of a reasonable equality of bargaining power by reason of the special disability of one party to a transaction, while not decisive, is important given that the concern which engages the principle is to prevent victimisation of the weaker party by the stronger. That this is so can be seen from the following passage from the reasons of Deane J in Amadio236: "The jurisdiction of courts of equity relieve against unconscionable dealing developed from the jurisdiction which the Court of Chancery assumed, at a very early period, to set aside transactions in which expectant heirs had dealt with their expectations without being adequately protected against the pressure put upon them by their poverty (see O'Rorke v Bolingbroke237). The jurisdiction is long established as extending generally to circumstances in which (i) a party to a transaction was under a special disability in dealing with the other party with the consequence that there was an absence of any reasonable degree of equality between them and (ii) that disability was sufficiently evident to the stronger party to make it prima facie unfair or 'unconscientious' that he procure, or accept, the weaker party's assent to the impugned transaction in the circumstances in which he procured or accepted it. Where such circumstances are shown to have existed, an onus is cast upon the stronger party to show that the transaction was fair, just and reasonable: 'the 234 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [428], [434]-[435], [439]. 235 Kakavas v Crown Melbourne Ltd [2012] VSCA 95 at [32]. 236 (1983) 151 CLR 447 at 474-475. 237 (1877) 2 App Cas 814 at 822. Hayne Crennan Bell burthen of shewing the fairness of the transaction is thrown on the person who seeks to obtain the benefit of the contract' (see per Lord Hatherley, O'Rorke v Bolingbroke238; Fry v Lane239; Blomley v Ryan240). The equitable principles relating to relief against unconscionable dealing and the principles relating to undue influence are closely related. The two doctrines are, however, distinct. Undue influence, like common law duress, looks to the quality of the consent or assent of the weaker party (see Union Bank of Australia Ltd v Whitelaw241; Watkins v Combes242; Morrison v Coast Finance Ltd243). Unconscionable dealing looks to the conduct of the stronger party in attempting to enforce, or retain the benefit of, a dealing with a person under a special disability in circumstances where it is not consistent with equity or good conscience that he should do so. The adverse circumstances which may constitute a special disability for the purposes of the principles relating to relief against unconscionable dealing may take a wide variety of forms and are not susceptible to being comprehensively catalogues. In Blomley v Ryan244, Fullagar J listed some examples of such disability: 'poverty or need of any kind, sickness, age, sex, infirmity of body or mind, drunkenness, illiteracy or lack of education, lack of assistance or explanation where assistance or explanation is necessary'. As Fullagar J remarked, the common characteristic of such adverse circumstances 'seems to be that they have the effect of placing one party at a serious disadvantage vis-Γ -vis the other'." 238 (1877) 2 App Cas 814 at 823. 239 (1888) 40 Ch D 312 at 322. 240 (1956) 99 CLR 362 at 428-429. 241 [1906] VLR 711 at 720. 242 (1922) 30 CLR 180 at 193-194; [1922] HCA 3. 243 (1965) 55 DLR (2d) 710 at 713. 244 (1956) 99 CLR 362 at 405. Hayne Crennan Bell Essential to the principle stated by both Mason J and Deane J in Amadio is that there should be an unconscientious taking advantage by one party of some disabling condition or circumstance that seriously affects the ability of the other party to make a rational judgment as to his or her own best interests. It may well be that an unconscientious taking of advantage will not always be manifest in a demonstrated inequality of bargaining power or in a demonstrated inadequacy in the consideration moving from the stronger party to the weaker; but the abiding rationale of the principle is to ensure that it is fair, just and reasonable for the stronger party to retain the benefit of the impugned transaction. That having been said, Mandie JA did not accept the appellant's contention that the primary judge had "rejected established law"245. Mandie JA concluded that the appellant246: "has failed to demonstrate that the judge's conclusion that the appellant was not in a position of special disadvantage was erroneous. The appellant's argument was that he was in a situation of special disability or disadvantage because he lacked the ability to control the frequency with which he gambled and the amount of money that he wagered or to make rational decisions about those matters. The judge rejected that argument and in my view was entitled on the evidence to do so." If this conclusion is correct, it is unnecessary to come to a final view on the question agitated by the appellant as to the orthodoxy of the approach of the primary judge and his Honour's ultimate conclusion. That is because the shift in the appellant's forensic strategy, away from his enticement case to a focus on his impaired ability actually to leave the gaming tables, directs this Court's attention away from the ultimate conclusions of the courts below. It is the case, however, that the findings of fact of the primary judge address, in detail, the nature of the appellant's abnormality and its bearing on the dealings between the appellant and Crown. The issue tendered to this Court by the appellant is whether those findings are sufficient to sustain the case of serial victimisation presented on behalf of the appellant in this Court. 245 Kakavas v Crown Melbourne Ltd [2012] VSCA 95 at [32]. 246 Kakavas v Crown Melbourne Ltd [2012] VSCA 95 at [33]. Hayne Crennan Bell In Jenyns v Public Curator (Q)247 Dixon CJ, McTiernan and Kitto JJ explained that the invocation of equitable doctrines, such as those concerned with the conscience of a party to a transaction, in order to impugn that transaction248: "calls for a precise examination of the particular facts, a scrutiny of the exact relations established between the parties and a consideration of the mental capacities, processes and idiosyncrasies of the [other party]. Such cases do not depend upon legal categories susceptible of clear definition and giving rise to definite issues of fact readily formulated which, when found, automatically determine the validity of the disposition. Indeed no better illustration could be found of Lord Stowell's generalisation concerning the administration of equity: 'A court of law works its way to short issues, and confines its views to them. A court of equity takes a more comprehensive view, and looks to every connected circumstance that ought to influence its determination upon the real justice of the case': The Juliana249." That the approach adumbrated in Jenyns remains the orthodox approach to the determination of cases of unconscionable conduct was confirmed by Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ in Tanwar250. It does not accord with that approach to consider the appellant's "special disadvantage" separately, in isolation from the other circumstances of the impugned transactions which bear upon the principle invoked by the appellant. The issue as to special disadvantage must be considered as part of the broader question, which is whether the impugned transactions were procured by Crown's taking advantage of an inability on the appellant's part to make worthwhile decisions in his own interests, which inability was sufficiently evident to Crown's 247 (1953) 90 CLR 113. 248 Jenyns v Public Curator (Q) (1953) 90 CLR 113 at 118-119. 249 (1822) 2 Dods 504 at 521 [165 ER 1560 at 1567]. 250 (2003) 217 CLR 315 at 325 [23]. Hayne Crennan Bell employees to render their conduct exploitative251. We will return to this point in discussing the appellant's arguments about constructive notice. We turn now to discuss the appellant's arguments in the light of the findings of the primary judge. The appellant's special disadvantages: pathological gambling It is convenient here to set out the factual findings of the primary judge on which the appellant seeks to build his case in this Court. Because there was much debate as to the significance of these findings, it is desirable to set them out in full. His Honour said252: "In my opinion it is clear that Mr Kakavas was a problem, and indeed very possibly a pathological, gambler. His judgment, as could be seen when set against the judgment of the generality of members of the community, was overly influenced by a desire to gamble. Even making allowances for the truth that we all have different priorities, and that the objects of one person's desire are the subjects of his neighbour's derision, nevertheless the extent to which the urge to gamble influenced the thinking and the actions of Harry Kakavas far exceeded its influence on the vast majority of his fellows. It is generally accepted by psychiatrists and psychologists of repute that there exists a condition known as pathological gambling. It is described in the American Psychiatric Association's Diagnostic and Statistical Manual of Mental Disorders, now in its fourth (revised) edition and referred to as DSM IV (2000). The International Classification of Diseases (ICD-10, 2000) similarly recognises pathological gambling as a psychiatric disorder, while acknowledging that some people gamble to excess in the absence of any psychopathology. Indeed, there is continuing debate among the experts about whether pathological gambling is a psychiatric condition or a behavioural disorder. There remains no doubt, and I accept, 251 Louth v Diprose (1992) 175 CLR 621 at 632. 252 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [440]-[445]. Hayne Crennan Bell that some people suffer from a persistent and recurrent maladaptive pattern of gambling behaviour characterised by their failure to control the urge to significant deleterious psychosocial consequences in the domains of personal, familial, financial, vocational and legal functioning. to gamble, leading I find that Harry Kakavas was one such person. Expert witnesses have been called, and have said so. I accept their evidence. But in late 2004 and early 2005, he did not present as such. And on the evidence before me, his level of functioning in each of the personal, familial, financial, vocational and legal levels was at that time unremarkable. He was in a steady relationship with the woman who was to become, and remains, his wife. He was on excellent terms with his parents, and when in September 2005 his father fell gravely ill with heart disease, Mr Kakavas devoted much of his time in caring for the patient. His finances were, at least to outward appearances and perhaps in fact, in sound, perhaps excellent, shape. His business appeared to be flourishing. And he was respected generally on the Gold Coast, then his home territory, as a successful and law-abiding citizen. One of the problems of diagnosis in this area is that persistent gamblers who nevertheless have great wealth β the high rollers β can exhibit many of the criteria of problem or pathological gambler. The signs are often ambiguous. Yet misdiagnosis might cause very serious and unnecessary offence." His Honour did not find that the appellant's unusual interest in gambling robbed him of the capacity to make worthwhile decisions in his own self-interest. That was not inconsistent with his Honour's acceptance of the diagnosis of a pathological gambling condition in terms of the DSM-IV. The DSM-IV itself stated (at xxxiii) that: "the fact that an individual's presentation meets the criteria for a DSM-IV diagnosis does not carry any necessary implication regarding the individual's degree of control over the behaviours that may be associated with the disorder. Even when diminished control over one's behaviour is a feature of the disorder, having the diagnosis in itself does not demonstrate that a particular individual is (or was) unable to control his or her behaviour at a particular time." Hayne Crennan Bell Four expert witnesses gave evidence in relation to whether the appellant should be given a DSM-IV diagnosis of pathological gambling; but it is sufficient, in order to understand his Honour's findings, to refer to the evidence of Dr Alex Blaszczynski, a clinical psychologist called by the appellant, and Dr Clive Allcock, a psychiatrist called by the respondents. Dr Blaszczynski expressed the following opinions in relation to the appellant's gambling: "Mr Kakavas' capacity to control his behaviour appeared to be impaired. Factors contributing to this can be classified into two components. The first being the intense reinforcing effects produced by the excitement and physical and subjective levels of arousal associated with gambling β¦ The second component is inexorably linked with, and exacerbates the effects of the first component ... This is his personality trait. Individuals like Harry Kakavas who have strong narcissistic traits have an over- inflated view of their skills and abilities and a strong sensitivity to reward that affects their decision-making processes. Such individuals are more likely to take larger risks and to persist in chasing losses as a result of a false belief/over-confidence in their capacity to perform better than others. In this sense, Mr Kakavas can be considered to suffer an impaired capacity to control the amount of money gambled. Mr Kakavas suffered from a condition of pathological gambling ... characterized by the failure to control gambling behaviour as evidenced by repeated unsuccessful attempts to cease gambling and his excessive preoccupation and urge to gamble. The pathological gambling condition (urges and preoccupation) in conjunction with his narcissistic personality traits characterised with an over-inflated confidence, propensity to take risks, and sensitivity to rewards and need for status, can be construed as important factors influencing his capacity to make rational decisions regarding all aspects of his behaviours: frequency, intensity and sources of funding. Hayne Crennan Bell The nature of Mr Kakavas' pathological gambling condition and his narcissistic personality traits are such that his capacity to resist positive inducements to gamble would be seriously diminished. Mr Kakavas self-excluded from Australian casinos in an attempt to reduce his gambling behaviour which he saw as excessive and out of control. Yet his urge to gamble persisted. Under these circumstances, it would be extremely difficult for Mr Kakavas to resist any efforts on the part of a casino or its representatives to offer the opportunity to lift a self-exclusion order or to accept complementary [sic] gifts or privileges designed to attract him back to gambling. Should a situation prevail where a casino offered an inducement for Mr Kakavas to visit a venue for purposes of gambling, it is my opinion that Mr Kakavas' ability to make a judgment as to own best interest and to accordingly [sic] would be severely and seriously impaired. This opinion is based on Mr Kakavas' impaired capacity to control his urges and behaviours in the absence of external inducements as shown by his repeated decisions to gamble despite taking steps to cease (through voluntary exclusion orders). The presence of external inducements catering to his narcissistic needs would act to make it virtually impossible to resist his urges to resume gambling." (footnotes omitted) Dr Allcock did not dispute Dr Blaszczynski's diagnosis of pathological gambling, but differed markedly on the appellant's ability to control his urge to gamble. He said: "The issue of control of gambling is much debated. Some would argue the individual once into the 'swing' of gambling is blind to their [sic] behaviour and its consequences, merely functioning as an automaton until the money runs out or the venue closes the action or some event stops the 'machine'. Others would counter and say the individual is choosing 'not to control'. While being under enormous pressure it may appear they are out of control but when the behaviour is closely examined and questioned the many trips to the ATM or the cashing of cheques reflects each time a decision to keep gambling. The commonest reason advanced is the chasing of losses. Losing is both emotionally and financially an unpleasant experience for which the only solution is to try and [sic] win. Hayne Crennan Bell Other beliefs can be significant in making the decision to continue gambling β the cognitive distortion that the machine is due to pay, the cards will change, big wins have occurred in the past when continuing to gamble and so they will again are features that can interplay with the need to recover losses and so gambling persists or recommences on other occasions. I am of the choice 'not to control' view. The phrase 'impaired control' may cover this as well as such a phrase implies some control remains but is reduced/affected by the pressure to keep playing for any of the reasons given. [A]t certain times decisions not to gamble can be made. The condition does not in most cases lock one into a permanent pattern. Likewise even those with a current diagnosis do not gamble all the time ... People leave the gambling arena some days with money still in the account, but other days none. Ultimately though decisions not to gamble at certain times, under certain circumstances, after certain events (eg a partner leaving) show that these decisions are reviewed and can be resisted. It is harder for a person with pathological gambling to make that decision because of the severe habit, the chasing and the faulty cognitions referred to but these decisions are still possible. Self-exclusion is part of the decision to stop. Clearly control has occurred or is intended to be used when such a decision is made. As people contemplate away from the venue, and usually after a losing session, that they may have a problem then gradually the consideration of giving up the chase, with or without help, can grow. Action to change may happen soon or take some time." In light of the differences in the opinions of Dr Blaszczynski and Dr Allcock as to the extent of the appellant's ability to choose to refrain from, or to cease, gambling, it is evident that, when the primary judge expressed his acceptance of all the experts without adverting to these differences, he was Hayne Crennan Bell referring only to the diagnosis of the appellant as a man who suffered from a "maladaptive pattern of gambling behaviour characterised by [a] failure to control the urge to gamble". His Honour did not find that the appellant suffered from incapacity to control the urge to gamble; he may be taken to have accepted the evidence of Dr Allcock on this point253. That this is so is confirmed by the circumstance that the primary judge specifically rejected the view (expressed by Dr Blaszczynski) that the appellant found it "virtually impossible to resist his urges to resume gambling." In this regard, the primary judge said254: "I accept that the inducements proffered by Crown had a part to play in the plaintiff's decision to gamble at the Crown facility. Any high roller player, having experienced the privileges offered by casinos around the world, would be astute to ensure that comparable benefits would be granted by any casino seeking his or her patronage. But the evidence was that by the time Crown first approached Mr Kakavas in 2004 he had already resumed gambling; this was not the case of a man who, having gambled in the past to the point where he was diagnosed as a pathological gambler, had valiantly abstained from all such activity and was, in accordance with the warning given him by Judge Wodak, leading a life of vigilance and discipline. I am satisfied that in offering standard VIP complimentary benefits, Crown was not engaging in any nefarious activity designed to ensnare a man who had eschewed gambling. It was, rather, legitimately seeking to compete for the business of a man who was already enmeshed in the high roller world. Moreover, I am not satisfied that Mr Kakavas found it 'virtually impossible to resist his urges to resume gambling.' There are a number of telling instances where he was perfectly capable of resisting the urge to lay one more bet, and where he demonstrated an ability to play in a controlled manner consonant with the behaviour of a recreational gambler." It is also tolerably clear that, whether one is focused upon the "enticement case" or the theory of exploitation of the appellant's "special disabilities" advanced in this Court, the primary judge found that the appellant did not 253 Abalos v Australian Postal Commission (1990) 171 CLR 167 at 178-179; [1990] HCA 47; Fox v Percy (2003) 214 CLR 118 at 127 [26]; [2003] HCA 22. 254 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [592]. Hayne Crennan Bell "present" to Crown as a man incapable of making worthwhile decisions in his own interests so far as gambling with Crown was concerned. Importantly, his Honour found that the appellant's "level of functioning in each of the personal, familial, financial, vocational and legal levels was ... unremarkable."255 Further, his Honour found that the appellant's "finances were, at least to outward appearances and perhaps in fact, in sound, perhaps excellent, shape."256 These findings are quite inconsistent with a view of the appellant as a person unable to make a responsible decision as to whether he could afford to indulge himself as a high roller, and should or should not do so, much less that Crown knew, or should have known, that he could not. The findings of fact summarised above, understood in the light of the preference of the primary judge for the evidence of Dr Allcock, support the conclusion of Mandie JA, with whom Almond AJA agreed, that257: "His Honour's finding about the plaintiff's pathological gambling condition (taking it at its highest) did not necessitate a finding that the plaintiff was in a position of special disability when dealing with Crown or, more precisely, when entering his various gambling transactions (ie making his wagers)." In the light of the primary judge's findings, we do not accept that the appellant's pathological interest in gambling was a special disadvantage which made him susceptible to exploitation by Crown. He was able to make rational decisions to refrain from gambling altogether had he chosen to do so. He was certainly able to choose to refrain from gambling with Crown. The appellant's special disadvantages: the IEO From 19 June 2002, the Gaming Legislation (Amendment) Act 2002 (Vic) effected amendments to the Casino Control Act, the result of which was that any person subject to an "interstate exclusion order" (as defined in s 3(1) of the 255 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [444]. 256 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [444]. 257 Kakavas v Crown Melbourne Ltd [2012] VSCA 95 at [27]. Hayne Crennan Bell Casino Control Act) became excluded from all casinos in Victoria 258. Further, the amendment imposed a duty upon Crown to include the name of any person the subject of an IEO of which it is or was aware in a daily list of excluded persons to be provided to regulatory personnel259. to on The Gambling Regulation Act 2003 (Vic) was assented 16 December 2003. Section 12.1.2 of that Act inserted s 78B into the Casino Control Act. The new section, headed "Forfeiture of winnings", took effect on 1 July 2004. It provided that all winnings paid or payable to a person the subject of an IEO are forfeited to the State of Victoria. We do not accept that the IEO can itself be described as a special disability or disadvantage of the kind discussed in the authorities. To the extent that the existence of the IEO adversely affected the appellant in terms of his ability to retain his winnings, that cannot sensibly be described as a personal disability. Rather, it was a legal constraint upon the appellant imposed, as the primary judge found, by the Commissioner of Police in light of security concerns260. The effect of the IEO can sensibly be described as a special disadvantage only because the appellant was ignorant of its effect. There is no finding that Crown's employees adverted to the effect of the IEO when the appellant returned to Crown's casino in mid-2005. Furthermore, there is no finding, and indeed no evidence, that any of Crown's employees were aware that the appellant did not appreciate the effect of the IEO under the Casino Control Act. Exploitation of the appellant's special disadvantages: Crown's knowledge The appellant argues that Crown's employees knew of, or were put on inquiry as to, his pathological urge to gamble in a number of ways: the Esanda fraud, the WOL, the IEO, the refusal by Mr Healey to provide a report on the appellant's condition at the end of 2004 and the absence of a full psychological 258 Casino Control Act 1991 (Vic), s 77(2). 259 Casino Control Act 1991 (Vic), s 76. 260 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [559]-[560]. Hayne Crennan Bell On the appellant's behalf it is said that when Crown initiated contact with the appellant in late 2004, it was sufficiently concerned about the appellant as a problem gambler to require him to undergo an assessment and to provide it with a report clearing him of any gambling problems. The appellant points to the finding by the primary judge that Crown "knew of a problem [and] might have acknowledged, if asked in 2004 whether the problem would re-surface when Mr Kakavas returned to the Casino, that that was a possibility."261 Further, in that regard, Crown knew that he had a history of gambling problems for which he had been medically treated, and that he was, in 2004, gambling and losing millions of dollars in Las Vegas. It also knew that Mr Healey had declined to provide the appellant with a clearance, and that Ms Brooks' report stated that she was "unable to do an assessment of his suitability for re-admission"262 to the casino. None of these circumstances required the primary judge to find that Crown's employees came to an appreciation that the appellant was labouring under a special disability which adversely affected his capacity to make worthwhile decisions in his own interests as to whether or not to avail himself of Crown's gambling facilities. It needs to be borne in mind that there is no suggestion that Ms Brooks' report did not accurately reflect the view which the appellant wished to convey to Crown, viz, that he "had conquered his past demons" and that he had a "relapse plan" which he "would not hesitate to implement". It is not possible to say that Crown's employees did not accept Ms Brooks' report at face value. Nor is it possible to accept the attempt on the appellant's behalf to characterise the evidence given by Crown's employees in this regard as a cynical attempt to conceal their predatory attitude towards the appellant. To accept that view of their evidence would not be consistent with either the primary judge's findings of fact, or the appellant's disclaimer of any challenge to those findings. Further, one cannot accept the invitation on behalf of the appellant to infer that the concern of some of Crown's employees that the appellant should obtain a report from a psychologist concerning the appellant's suitability for re-admittance to its casino itself revealed an appreciation of his disability. The concern of 261 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [661]. 262 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [225]. Hayne Crennan Bell Crown's employees is readily understood as self-protective prudence. Given the appellant's criminal past and his threats to sue Crown, it is readily understandable that some of Crown's employees would be astute to ensure that there should be an accurate record of the basis of the appellant's re-admittance to its casino. The primary judge was well placed to make a sound assessment of the character of the witnesses and the dynamics of the relationship between the appellant and Crown's employees. It is pertinent to note here the observations by Dawson, Gaudron and McHugh JJ in Louth v Diprose263 that proof of the interplay of a dominant and subordinate position in a personal relationship depends, "in large part, on inferences drawn from other facts and on an assessment of the character of each of the parties." Their Honours observed that findings by a trial judge264, "which were substantially dependent on the trial judge's assessment of character and credit and which were reached having regard to the demeanour of the parties in the witness box ... are findings which, unless some error is to be discerned, an appeal court must respect." In this regard, the primary judge said265: "[I]t is opportune at this point to set out my observations generally about Mr Kakavas' demeanour. In the witness box the plaintiff struck me as someone who was a natural salesman and negotiator. I could well imagine that he thrived in his chosen profession. He was determined, eloquent and ready with a quick riposte. He was robust and confident β perhaps too confident β during prolonged and rigorous cross examination. He demonstrated an ability to be focussed and clear in conveying what he wanted to say, and would not be swayed from that position, even where at times it became apparent that his answers were not responsive. Of course, it may be said that the man who gave evidence in this Court in 2009 was not the man struggling under the burden of a disability in 2005 and 2006. 263 (1992) 175 CLR 621 at 639-641. See also Wilton v Farnworth (1948) 76 CLR 646 at 654-655; [1948] HCA 20; Blomley v Ryan (1956) 99 CLR 362 at 409; Fox v Percy (2003) 214 CLR 118 at 126-129 [25]-[30]. 264 (1992) 175 CLR 621 at 641. 265 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [593]. Hayne Crennan Bell But I do not think so. Whatever the configuration of his inner landscape in 2005 and 2006, in my view Mr Kakavas presented the world with a charming and confident faΓ§ade." This assessment by the primary judge of how the appellant "presents" must be accorded significant weight, given his Honour's finding that the appellant did not present to Crown as a man whose ability to make worthwhile decisions to conserve his own interests was adversely affected by his unusually strong interest in gambling. The appellant did not present as a target for victimisation by Crown, any more than the other high rollers feted by Crown at its casino while they chose to gamble there. Furthermore, and importantly in relation to the issue of constructive notice, the primary judge's assessment of the appellant as a man "who was a natural salesman and negotiator ... determined, eloquent and ready with a quick riposte ... robust and confident β perhaps too confident" suggests a practical problem in now relying on notions of constructive knowledge to fix Crown with the full appreciation of the full nature and extent of the appellant's abnormality which might have been derived from active inquiry into the appellant's personality. The practical success of any such inquiry would depend in large measure on the willingness of the appellant to cooperate with those conducting the inquiry. Having regard to the primary judge's assessment of the appellant, there must be a question as to whether his cooperation would have been forthcoming. It is not necessary to resolve that question here, given that, as we will explain directly, the appellant's attempt to rely upon constructive notice must fail in point of principle. As to the IEO, to the extent that the appellant was obliged by the Casino Control Act to forfeit his winnings by reason of the operation of the IEO, there is no finding that Crown's employees adverted to that circumstance, much less that they decided to exploit that circumstance: Crown paid the appellant his winnings. As the primary judge found266, Crown's officers "did not appreciate the significance" of the IEO. On that basis, the IEO "did not form part of any unconscientious decision to welcome Mr Kakavas as a patron." That Crown's employees were inadvertent as to the consequences of the IEO, requiring the appellant to forfeit his winnings, may be said to reflect poorly on them, as the 266 Kakavas v Crown Melbourne Ltd [2009] VSC 559 at [570]. Hayne Crennan Bell individuals responsible for ensuring that Crown complied with the Casino Control Act, but it does not suggest that they were seeking to victimise the appellant. On the primary judge's findings, they were as ignorant of the consequences of the IEO as he was. It may also be said that it was the appellant's responsibility, as the subject of the IEO, to ascertain the effects of an order made against him. There is no reason why, as between them, Crown should be responsible for his ignorance: there was no suggestion that the relationship between Crown and the appellant was one in which the appellant looked to Crown for advice on such matters. Exploitation of the appellant's special disadvantages: constructive notice The appellant submits that the primary judge erred in failing to apply the principles of constructive notice267. In particular, it is said that Crown was "aware of the possibility that [a] situation [of special disadvantage] may exist or [was] aware of facts that would raise that possibility in the mind of any reasonable person"268. In Amadio, Mason J said269: "As we have seen, if A having actual knowledge that B occupies a situation of special disadvantage in relation to an intended transaction, so that B cannot make a judgment as to what is in his own interests, takes unfair advantage of his (A's) superior bargaining power or position by entering into that transaction, his conduct in so doing is unconscionable. And if, instead of having actual knowledge of that situation, A is aware of the possibility that that situation may exist or is aware of facts that would raise that possibility in the mind of any reasonable person, the result will be the same." 267 Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 at 462. See also Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (2003) 214 CLR 51 at 76-77 [55]. 268 cf Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 at 467. 269 (1983) 151 CLR 447 at 467. Hayne Crennan Bell The appellant relies upon this passage as authority for importing, into the application of the principle against unconscionable dealing, which is a species of equitable fraud, notions of constructive notice. Constructive notice applies to the resolution of disputes as to priority of interests as between a legal interest and a prior competing equitable interest270. The rules of constructive notice were developed for the purpose of deciding whether the holder of a later legal estate should prevail over the holder of a prior equitable estate as a bona fide purchaser of the legal estate without notice. As to what is notice for the purpose of this rule, the purchaser is deemed to have constructive notice of all matters of which he or she would have received notice if he or she had made the investigations usually made in similar transactions, and of which he or she would have received notice had he or she investigated a relevant fact which has come to his or her notice and into which a reasonable person ought to have inquired. Of the concept of constructive notice, in Manchester Trust v Furness271, Lindley LJ said: "[A]s regards the extension of the equitable doctrines of constructive notice to commercial transactions, the Courts have always set their faces resolutely against it. The equitable doctrines of constructive notice are common enough in dealing with land and estates, with which the Court is familiar; but there have been repeated protests against the introduction into commercial transactions of anything like an extension of those doctrines". Consistently with that approach, in Oxley v James272, Jordan CJ observed that "in commercial transactions ... means of knowledge are not actual knowledge". More recently, in Garcia v National Australia Bank Ltd, Gaudron, McHugh, Gummow and Hayne JJ did not welcome the use of constructive notice 270 Garcia v National Australia Bank Ltd (1998) 194 CLR 395 at 410-411 [39]; [1998] HCA 48. 271 [1895] 2 QB 539 at 545. See also Barnes v Addy (1874) LR 9 Ch App 244 at 251, 255; Scandinavian Trading Tanker Co AB v Flota Petrolera Ecuatoriana [1983] 2 AC 694 at 703-704. 272 (1938) 38 SR (NSW) 362 at 375. See also Port of Brisbane Corporation v ANZ Securities Ltd (No 2) [2003] 2 Qd R 661 at 674-675 [22]. Hayne Crennan Bell to establish that a transaction is impeachable for equitable fraud. Their Honours said273: "Such an analysis may be required in ordering the priority of competing interests in property but in the present context it may well distract attention from the underlying principle: that the enforcement of the legal rights of the creditor would, in all the circumstances, be unconscionable." In our respectful opinion, Mason J cannot be taken to have supported the importation of the concept of constructive notice into the operation of the principle he enunciated in Amadio. In this regard, the passage from the reasons of Mason J on which the appellant relies followed, and was evidently intended to paraphrase, the statement of Lord Cranworth LC in Owen and Gutch v Homan274. There his Lordship said275: "it may safely be stated that if the dealings are such as fairly to lead a reasonable man to believe that fraud must have been used in order to obtain [the advantage], he is bound to make inquiry, and cannot shelter himself under the plea that he was not called on to ask, and did not ask, any questions on the subject. In some cases wilful ignorance is not to be distinguished in its equitable consequences from knowledge." It is apparent from what Mason J said in relation to the transaction under consideration in Amadio that his Honour was speaking of wilful ignorance, which, for the purposes of relieving against equitable fraud, is not different from actual knowledge. In this regard, Mason J observed that it must have been obvious to the appellant bank's officer that the transaction was an improvident one from the respondents' point of view. On that basis, it was "inconceivable" that the possibility did not occur to him that the respondents' entry into the transaction was due to their misplaced reliance on their son and that the 273 (1998) 194 CLR 395 at 410-411 [39]. See also Mason, "The Impact of Equitable Doctrine on the Law of Contract", (1998) 27 Anglo-American Law Review 1 at 15. 274 (1853) 4 HLC 997 [10 ER 752]. 275 (1853) 4 HLC 997 at 1035 [10 ER 752 at 767]. Hayne Crennan Bell respondents' lack of understanding of the extent of their exposure was manifest from their questions of the bank's officer276. Similarly, Deane J, with whom Wilson J agreed, said that the bank's officer "simply closed his eyes to the vulnerability" of the respondents "and the disability which adversely affected them."277 His Honour concluded278: "The case is one in which 'wilful ignorance is not to be distinguished in its equitable consequences from knowledge' (per Lord Cranworth LC, Owen and Gutch v Homan279)." In Louth v Diprose280 Deane J made it clear that the extent of the knowledge of the disability of the plaintiff which must be possessed by the defendant is an aspect of the question whether the plaintiff has been victimised by the defendant. In this regard, Deane J said that the special disability must "sufficiently evident to the other party to make it prima facie unfair or 'unconscionable' that that other party procure, accept or retain the benefit of, the disadvantaged party's assent to the impugned transaction in the circumstances in which he or she procured or accepted it." This approach of Deane J accords with that explained by Dixon CJ, McTiernan and Kitto JJ in Jenyns in the passage cited above. 276 (1983) 151 CLR 447 at 466-468. 277 (1983) 151 CLR 447 at 478. 278 (1983) 151 CLR 447 at 479. 279 (1853) 4 HLC 997 at 1035 [10 ER 752 at 767]. 280 (1992) 175 CLR 621 at 637. See also Australian Competition and Consumer Commission v Radio Rentals Ltd (2005) 146 FCR 292 at 298 [21]. 281 (1992) 175 CLR 621 at 637. Hayne Crennan Bell Even if, contrary to the findings of the primary judge, the appellant did suffer from a psychological impairment, the issue here is whether, in all the circumstances of the relationship between the appellant and Crown, it was sufficiently evident to Crown that the appellant was so beset by that difficulty that he was unable to make worthwhile decisions in his own interests while gambling at Crown's casino. On the findings of fact made by the primary judge as to the course of dealings between the parties, the appellant did not show that his gambling losses were the product of the exploitation of a disability, special to the appellant, which was evident to Crown. Equitable intervention to deprive a party of the benefit of its bargain on the basis that it was procured by unfair exploitation of the weakness of the other party requires proof of a predatory state of mind. Heedlessness of, or indifference to, the best interests of the other party is not sufficient for this purpose. The principle is not engaged by mere inadvertence, or even indifference, to the circumstances of the other party to an arm's length commercial transaction. Inadvertence, or indifference, falls short of the victimisation or exploitation with which the principle is concerned. The appellant's attempt to rely upon constructive notice to supply the want of findings of awareness on the part of Crown's employees of any personal disability which affected the appellant should be rejected. Conclusion and orders The appellant's challenges to the decision of the Court of Appeal fail. The appeal should be dismissed with costs. |
HIGH COURT OF AUSTRALIA Matter No P45/2019 APPELLANT AND THE STATE OF WESTERN AUSTRALIA RESPONDENT Matter No P46/2019 APPELLANT AND THE STATE OF WESTERN AUSTRALIA RESPONDENT Matter No P47/2019 APPELLANT AND THE STATE OF WESTERN AUSTRALIA RESPONDENT Matter No P48/2019 APPELLANT AND THE STATE OF WESTERN AUSTRALIA RESPONDENT APPELLANT Matter No P49/2019 TSM (A CHILD) AND THE STATE OF WESTERN AUSTRALIA RESPONDENT Pickett v Western Australia Mead v Western Australia Mead v Western Australia TSM (a child) v Western Australia [2020] HCA 20 Date of Hearing: 13 March 2020 Date of Judgment: 29 May 2020 P45/2019, P46/2019, P47/2019, P48/2019 & P49/2019 ORDER In each matter: Appeal dismissed. On appeal from the Supreme Court of Western Australia Representation S Vandongen SC with A J Robson for the appellants in all matters (instructed by Legal Aid WA) A L Forrester SC with L M Fox for the respondent in all matters (instructed by Director of Public Prosecutions (WA)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Pickett v Western Australia Mead v Western Australia Mead v Western Australia TSM (a child) v Western Australia Criminal law β Parties to offences β Where group of eight males assaulted victim β Where group included appellants and a youth aged 11 years ("PM") β Where one member of group stabbed victim causing death β Where appellants charged with murder under Criminal Code (WA) β Where Crown alleged seven males who did not stab victim deemed to have taken part in committing offence under s 7(b), s 7(c) or s 8 of Criminal Code β Where ss 7(b), 7(c) and 8 of Criminal Code operated when "an offence is committed" β Where reasonably possible that PM inflicted fatal stab wound β Where PM could not be criminally responsible for acts unless he had capacity to know he ought not to do act under s 29 of Criminal Code β Where prosecution adduced no evidence to establish capacity β Where trial judge declined to direct jury that they could not convict appellants of murder unless satisfied beyond reasonable doubt PM did not cause death β Where appellants convicted of murder β Whether trial judge erred in declining to direct jury that they could not convict appellants of murder unless satisfied that PM did not cause death β Whether "offence" committed for purposes of ss 7(b), 7(c) and 8 where failure to prove criminal responsibility of person who may have done act constituting offence. Words and phrases β "accessorial criminal liability", "an offence is committed", "authorised or justified or excused by law", "commission of an offence", "common law antecedents", "construction of the Code", "criminally responsible", "enabler or aider", "excuse", "justification", "liable to punishment", "offence", "participants in the offence", "parties to the offence", "party to an unlawful common purpose", "principal offender", "unlawful killing". Criminal Code (WA), Chs V, XXVI; ss 1, 2, 7, 8, 29, 36, 268, 277, 279. KIEFEL CJ, BELL, KEANE AND GORDON JJ. The issue in these appeals is whether ss 7(b), 7(c) and 8 of the Criminal Code (WA) ("the Code") apply to render an enabler or an aider, or a party to an unlawful common purpose, guilty of murder in circumstances where the deceased may have been actually killed by a child who had not been shown to be criminally responsible for the killing because of the operation of s 29 of the Code. The appellants contend for a negative answer to this question. Their contention should be rejected and their appeals dismissed. The provisions of ss 7(b), 7(c) and 8 of the Code operate to attribute to an accused person who is respectively an enabler or an aider, or a party to an unlawful common purpose the prosecution of which had, as a probable consequence, the killing or causing of grievous bodily harm to another, the acts of another person who actually killed the deceased. But they do not attribute to another participant circumstances personal to the actor that, under Ch V of the Code, relieve the actor of criminal responsibility for his or her acts. In the present case, the circumstance that the person who actually killed the deceased may not have been criminally responsible for his act by reason of s 29 of the Code is immaterial to the guilt of each of the appellants under s 7(b), s 7(c) or s 8 of the Code. The liability of each of the appellants to punishment for the murder of the deceased did not depend on proof beyond reasonable doubt that the child who may have fatally wounded the deceased had the capacity to know that he ought not strike that blow. The facts On 27 January 2016, at about 3.30 am, Patrick Steven Slater ("the Deceased") died as a result of a stab wound to his chest1. The wound was inflicted during an attack by a group of eight male persons. That group included the appellants: Clinton Mead, Dylan Anthony, Robert Pickett, Stefan Mead and a youth identified as TSM2. The stabbing took place on the first floor of The Esplanade Train Station complex in Perth3. It occurred at the conclusion of the third of three altercations that took place in the early hours of 27 January 2016, between two groups of 1 Birdsall v Western Australia (2019) 54 WAR 418 at 427 [1]. 2 Birdsall v Western Australia (2019) 54 WAR 418 at 427 [3], [6]. 3 Birdsall v Western Australia (2019) 54 WAR 418 at 428 [17]. Bell Gordon people4. One group comprised the five appellants as well as three other persons: Christopher Birdsall and the juveniles PM and JW ("the Appellants' Group"). PM was aged 11 at the time of the stabbing; it is uncontested that he may have been the person who inflicted the fatal wound to the Deceased. The other group consisted of the Deceased and his acquaintances ("the Deceased's Group")5. The first altercation commenced about 2.45 am and lasted for about five minutes6. Physical fighting broke out between members of the two groups7. It involved the Deceased producing a machete without striking or threatening anyone with it8. Another member of the Deceased's Group hit Robert Pickett with a The second altercation occurred about 15 minutes after the first had concluded10. It involved members of both groups throwing rocks and pieces of concrete at one another11. The Deceased's Group ran up the escalators or stairs to the first floor of the complex; members of the Appellants' Group ran after them12. Some members of the Appellants' Group threw objects towards the Deceased and another member of the Deceased's Group, but the objects did not strike anyone13. After the conclusion of the second altercation, Christopher Birdsall, Robert Pickett, TSM, Stefan Mead, JW and PM entered Stefan Mead's motor vehicle and drove a short distance away from The Esplanade where they met with 4 Birdsall v Western Australia (2019) 54 WAR 418 at 428 [18]. 5 Birdsall v Western Australia (2019) 54 WAR 418 at 428 [18]. 6 Birdsall v Western Australia (2019) 54 WAR 418 at 428 [19]. 7 Birdsall v Western Australia (2019) 54 WAR 418 at 428 [19]. 8 Birdsall v Western Australia (2019) 54 WAR 418 at 428 [19]. 9 Birdsall v Western Australia (2019) 54 WAR 418 at 428 [19]. 10 Birdsall v Western Australia (2019) 54 WAR 418 at 428 [20]. 11 Birdsall v Western Australia (2019) 54 WAR 418 at 428 [20]. 12 Birdsall v Western Australia (2019) 54 WAR 418 at 428 [20]. 13 Birdsall v Western Australia (2019) 54 WAR 418 at 428 [20]. Bell Gordon Clinton Mead and Dylan Anthony, who had not been involved in the first two altercations14. The Appellants' Group collected various items capable of being used as weapons, before walking back towards The Esplanade15. The third altercation began shortly before 3.30 am16. Each of the eight members of the Appellants' Group was captured by CCTV footage proceeding to the first floor of The Esplanade Train Station complex using either the stairs or the escalators17. Each appeared to be carrying weapons or objects that could be used as weapons in their hands, although the nature of some of those objects could not readily be discerned18. Robert Pickett was seen on the footage walking up the stairs holding pieces of blue and white cloth in his left hand and reaching into his pocket with his right hand to retrieve an apparently flat object19. PM was seen walking up the stairs carrying a bottle in his right hand and a socket bar in his left hand20. As appears from the CCTV footage, the Deceased ran across a concrete concourse towards a grassed area, and the Appellants' Group followed him21. At the conclusion of the chase, the Appellants' Group assaulted the Deceased for about 50 seconds, but there was no CCTV footage of the assault22. The Deceased suffered 23 external injuries as a result of actions undertaken by the Appellants' Group during the assault23. There was evidence that during the assault, Christopher Birdsall kicked the Deceased on the head and other parts of his body, 14 Birdsall v Western Australia (2019) 54 WAR 418 at 428-429 [21]. 15 Birdsall v Western Australia (2019) 54 WAR 418 at 428-429 [21]. 16 Birdsall v Western Australia (2019) 54 WAR 418 at 429 [22]. 17 Birdsall v Western Australia (2019) 54 WAR 418 at 429 [22]. 18 Birdsall v Western Australia (2019) 54 WAR 418 at 429 [22]. 19 Birdsall v Western Australia (2019) 54 WAR 418 at 429 [23]. 20 Birdsall v Western Australia (2019) 54 WAR 418 at 429 [23]. 21 Birdsall v Western Australia (2019) 54 WAR 418 at 429 [24]. 22 Birdsall v Western Australia (2019) 54 WAR 418 at 429 [24]. 23 Birdsall v Western Australia (2019) 54 WAR 418 at 429 [25]. Bell Gordon Clinton Mead struck the Deceased with the metal star picket and Dylan Anthony struck the Deceased with a long wooden pole24. At some stage, one of the Appellants' Group used a screwdriver to stab the Deceased in the chest, puncturing his aorta and both lungs and causing him to bleed to death shortly afterwards25. The Appellants' Group fled, making no attempt to assist the Deceased26. CCTV footage showed that as the Appellants' Group descended the stairs, Robert Pickett was carrying a piece of red cloth under his left arm and PM was carrying the socket bar and a screwdriver27. The proceedings Each of the eight males of the Appellants' Group was charged with murder28. JW pleaded guilty to manslaughter, and his plea was accepted by the Crown29. PM was tried separately in the Children's Court of Western Australia30. He was convicted of manslaughter31. The appellants and Christopher Birdsall pleaded not guilty and were tried together in the Supreme Court of Western Australia before a judge and jury32. The appellants' trial At the trial of the appellants and Christopher Birdsall, the case for the prosecution was put on the basis that one member of the Appellants' Group 24 Birdsall v Western Australia (2019) 54 WAR 418 at 429 [25]. 25 Birdsall v Western Australia (2019) 54 WAR 418 at 429 [26]. 26 Birdsall v Western Australia (2019) 54 WAR 418 at 429 [27]. 27 Birdsall v Western Australia (2019) 54 WAR 418 at 430 [29]. 28 Birdsall v Western Australia (2019) 54 WAR 418 at 427 [3]. 29 Birdsall v Western Australia (2019) 54 WAR 418 at 427 [5]. 30 Birdsall v Western Australia (2019) 54 WAR 418 at 427 [4]. 31 Birdsall v Western Australia (2019) 54 WAR 418 at 427 [11]. 32 Birdsall v Western Australia (2019) 54 WAR 418 at 427 [8]. Bell Gordon inflicted the stab wound which killed the Deceased during the third altercation33. While that person, and only that person, actually caused the death of the Deceased for the purposes of s 7(a) of the Code34, the prosecution case was that each of the other seven males was, on one or more of the following bases, deemed to have taken part in committing the offence35: (1) As a person who did an act for the purpose of enabling or aiding one of the other seven males to commit the offence, pursuant to s 7(b) of the Code. (2) As a person who aided another one of the seven males in committing the offence, pursuant to s 7(c) of the Code. (3) As a person who formed a common intention, with the person who committed the offence, to prosecute an unlawful purpose (being assault to the Deceased or another member of the Deceased's Group) with that other person, and in the prosecution of that purpose an offence of murder was committed of such a nature that its commission was a probable consequence of the prosecution of such purpose, pursuant to s 8 of the Code. The prosecutor, in her final address, invited the jury to conclude that Robert Pickett had a screwdriver in his hands when he arrived at the third altercation, that this screwdriver was the weapon that inflicted the fatal wound, and that Robert Pickett could have been the person who stabbed the Deceased in the chest and killed him36. It is now not in dispute, however, that the prosecution had not proved beyond reasonable doubt that it was Robert Pickett, rather than PM, who stabbed the Deceased. The argument in this Court and in the Court of Appeal thus proceeded on the basis that it was reasonably possible that PM stabbed the Deceased. By reason of s 29 of the Code, because PM was under the age of 14 at the time of the offending, but over the age of ten, he could not be criminally responsible for his acts in killing the Deceased unless it was proved by the prosecution that, at the time of the killing, he had the capacity to know that he 33 Birdsall v Western Australia (2019) 54 WAR 418 at 430 [31]. 34 Birdsall v Western Australia (2019) 54 WAR 418 at 430 [31]. 35 Birdsall v Western Australia (2019) 54 WAR 418 at 430 [32]. 36 Birdsall v Western Australia (2019) 54 WAR 418 at 430 [34]. Bell Gordon ought not to do the act. It is common ground that the prosecution adduced no evidence to establish PM's capacity beyond reasonable doubt at the appellants' trial37. It was argued that because the prosecution had not proved that PM had the capacity to know that he ought not to have killed the Deceased, he could not be guilty of the murder of the Deceased, and the appellants could not have been parties to the offence of murder unless the jury were satisfied beyond reasonable doubt that the fatal blow was struck by an assailant other than PM. The trial judge (Martino J) declined to direct the jury that it was not open to them to convict any of the appellants or Christopher Birdsall of murder unless they were satisfied beyond reasonable doubt that PM was not the person who stabbed the Deceased38. Each of the appellants and Christopher Birdsall was convicted of murder39. Appeals to the Court of Appeal of the Supreme Court of Western Australia by the appellants were unsuccessful. The Court of Appeal The majority of the Court of Appeal (Buss P and Mazza JA) held that in ss 7 and 8 of the Code, the expression when "an offence is committed" refers to the doing of an act or the making of an omission, being the element of conduct that constitutes an offence under the Code40. Their Honours further held that ss 7 and 8, when engaged, operate to attribute those acts to the other participants in the offence41. This approach reflected the view of the proper construction of the Code that prevailed in R v Barlow42. That view had earlier been taken by the Queensland 37 Birdsall v Western Australia (2019) 54 WAR 418 at 434 [60]. 38 Birdsall v Western Australia (2019) 54 WAR 418 at 433 [55]. 39 Birdsall v Western Australia (2019) 54 WAR 418 at 427 [8]. 40 Birdsall v Western Australia (2019) 54 WAR 418 at 449-450 [158]-[159], 41 Birdsall v Western Australia (2019) 54 WAR 418 at 449-450 [158]-[159], (1997) 188 CLR 1 at 11. Bell Gordon Court of Criminal Appeal in R v Jervis43. A contrary view was subsequently taken in Hind and Harwood44; and that contrary view was overruled by the decision of this Court in Barlow. Buss P and Mazza JA went on to hold that each of the appellants was rightly convicted of the murder of the Deceased by reason of the operation of s 7(b), s 7(c) or s 8 of the Code notwithstanding that PM, as the hypothetical killer, was not criminally responsible for killing the Deceased45. Their Honours said46: "[C]riminal responsibility is not an element of an offence. The fact that a person has actually done or is deemed to have done all of the acts or made all of the omissions which constitute an offence is separate and distinct from whether the person is criminally responsible for those acts or omissions." Beech JA, in dissent, reasoned that the operation of ss 7 and 8 was dependent on the commission of an offence by a "principal offender"47. His Honour held that because PM was not criminally responsible for killing the Deceased, no offence was committed by him, and so ss 7(b), 7(c) and 8 of the Code had no operation in relation to the appellants48. Accordingly, in the view of Beech JA, the trial judge erred in law in failing to direct the jury that in the circumstances, they could convict the appellants only if satisfied beyond reasonable doubt that PM was not the person who inflicted the injury that caused the death49. [1993] 1 Qd R 643 at 652-653. (1995) 80 A Crim R 105 at 136-137, 140; cf at 142-143. 45 Birdsall v Western Australia (2019) 54 WAR 418 at 455 [194]. 46 Birdsall v Western Australia (2019) 54 WAR 418 at 452 [177]. 47 Birdsall v Western Australia (2019) 54 WAR 418 at 507 [495]. 48 Birdsall v Western Australia (2019) 54 WAR 418 at 492-493 [422]. 49 Birdsall v Western Australia (2019) 54 WAR 418 at 507 [495]. Bell Gordon The Code determines the issue The issue that divided the Court of Appeal in this case is an issue as to the proper construction and application of the Code. In Brennan v The King50, Dixon and Evatt JJ, having observed that s 8 of the Code "appears to be based in some respects" upon Sir Michael Foster's statement of the position under the common law, said: "But it forms part of a code intended to replace the common law, and its language should be construed according to its natural meaning and without any presumption that it was intended to do no more than restate the existing law. It is not the proper course to begin by finding how the law stood before the Code, and then to see if the Code will bear an interpretation which will leave the law unaltered". In Stuart v The Queen51, Gibbs J, with whom Menzies and Mason JJ agreed, referred to this passage as stating the correct approach to the interpretation of a section of the Criminal Code (Qld) ("the Code (Qld)"). Gibbs J went on to say52: "This passage does not mean that it is never necessary to resort to the common law for the purpose of aiding in the construction of the Code β it may be justifiable to turn back to the common law where the Code contains provisions of doubtful import, or uses language which had previously acquired a technical meaning, or on some such special ground: see Robinson v Canadian Pacific Railway Co, cited in R v Scarth. If the Code is to be thought of as 'written on a palimpsest, with the old writing still discernible behind' (to use the expressive metaphor of Windeyer J in Vallance v The Queen), it should be remembered that the first duty of the interpreter of its provisions is to look at the current text rather than at the old writing which has been erased; if the former is clear, the latter is of no relevance." The proper approach to the resolution of the issue before the Court is illuminated by the exposition of ss 7 and 8 by Brennan CJ, Dawson and Toohey JJ, (1936) 55 CLR 253 at 263. (1974) 134 CLR 426 at 437. See also R v Jervis [1993] 1 Qd R 643 at 647 per McPherson A-CJ. 52 Stuart v The Queen (1974) 134 CLR 426 at 437 (footnotes omitted). Bell Gordon who constituted the majority in Barlow. It will be necessary to pay close attention to that exposition; but at this stage it is sufficient to note that in Barlow their Honours focused, not upon the common law antecedents of ss 7 and 8, but upon the text of these provisions in their context in the Code (Qld), and upon the guidance afforded by the structure of the Code (Qld). Indeed, their Honours referred to the common law only to note, having concluded their discussion of the proper construction of the Code (Qld), that "[s] 8 operates in the same way in this respect as the common law"53. It is desirable now to set out the relevant provisions of the Code before addressing the arguments advanced by the appellants in this Court. The relevant provisions of the Code Chapter II of the Code makes provision in relation to the parties to an offence. Section 7 of the Code provides: "When an offence is committed, each of the following persons is deemed to have taken part in committing the offence and to be guilty of the offence, and may be charged with actually committing it, that is to say β Every person who actually does the act or makes the omission which constitutes the offence; Every person who does or omits to do any act for the purpose of enabling or aiding another person to commit the offence; Every person who aids another person in committing the offence; (d) Any person who counsels or procures any other person to commit the offence. In the fourth case he may be charged either with himself committing the offence or with counselling or procuring its commission. A conviction of counselling or procuring the commission of an offence entails the same consequences in all respects as a conviction of committing the offence. Any person who procures another to do or omit to do any act of such a nature that, if he had himself done the act or made the omission, the act or 53 R v Barlow (1997) 188 CLR 1 at 14. See also at 12. Bell Gordon omission would have constituted an offence on his part, is guilty of an offence of the same kind, and is liable to the same punishment as if he had himself done the act or made the omission; and he may be charged with himself doing the act or making the omission." Section 8 of the Code provides: "(1) When 2 or more persons form a common intention to prosecute an unlawful purpose in conjunction with one another, and in the prosecution of such purpose an offence is committed of such a nature that its commission was a probable consequence of the prosecution of such purpose, each of them is deemed to have committed the offence. (2) A person is not deemed under subsection (1) to have committed the offence if, before the commission of the offence, the person β (a) withdrew from the prosecution of the unlawful purpose; and by words or conduct, communicated the withdrawal to each other person with whom the common intention to prosecute the unlawful purpose was formed; and having so withdrawn, took all reasonable steps to prevent the commission of the offence." The terms "criminally responsible" and "criminal responsibility" are defined in s 1(1) of the Code as follows: "The term criminally responsible means liable to punishment as for an offence; and the term criminal responsibility means liability to punishment as for an offence". Section 2 of the Code explains the meaning of the term "offence": "An act or omission which renders the person doing the act or making the omission liable to punishment is called an offence." Chapter V of the Code sets out circumstances relevant to questions of criminal responsibility generally. Within Ch V, s 36 provides: "The provisions of this Chapter apply to all persons charged with any offence against the statute law of Western Australia." Bell Gordon In the same chapter, s 29 provides: "A person under the age of 10 years is not criminally responsible for any act or omission. A person under the age of 14 years is not criminally responsible for an act or omission, unless it is proved that at the time of doing the act or making the omission he had capacity to know that he ought not to do the act or make the omission." Section 279 of the Code relevantly provides: If a person unlawfully kills another person and β the person intends to cause the death of the person killed or another person; or the person intends to cause a bodily injury of such a nature as to endanger, or be likely to endanger, the life of the person killed or another person; or the death is caused by means of an act done in the prosecution of an unlawful purpose, which act is of such a nature as to be likely to endanger human life, the person is guilty of murder." As to whether a killing is unlawful, s 268 provides: "It is unlawful to kill any person unless such killing is authorised or justified or excused by law." Chapter XXVI of the Code makes provision for the circumstances in which it is lawful to kill a person. It is sufficient to note here that none of the provisions of Ch XXVI were relied upon by the appellants. The appellants' argument Beech JA, in order to determine whether "an offence is committed" for the purposes of ss 7 and 8, focused upon the criminal responsibility of PM as the possible "principal offender", rather than the responsibility of the appellants for Bell Gordon the acts or omissions that caused the death of the Deceased. In this regard, his Honour said54: "The definition of offence directs attention to whether the person doing the act is rendered liable to punishment by having done the act. In other words, the language of the definition of offence directs attention to the liability to punishment of 'the person doing the act'. If that person is not criminally responsible for the act, the act is not one which 'renders the person doing the act ... liable to punishment'." The appellants, following that approach, argued that, having regard to the definition of "criminally responsible" in s 1(1), and "offence" in s 2 of the Code, a person to whom s 29 applies is not liable to punishment for his or her acts or omissions. Because, by virtue of s 29, PM is not liable to punishment for any offence, it was said that in the killing of the Deceased, no offence was committed by PM or, by reason of the non-operation of s 7 or s 8, by anyone else. One may note immediately that the appellants' argument slides from the proposition that PM is not liable to punishment for any offence in relation to the killing of the Deceased to the proposition that no offence has been committed by anyone. The error in the reasoning of Beech JA (and the appellants' arguments based on it) can be seen from the passage cited. His Honour concluded that if the person who does the act "is not criminally responsible for the act, the act is not one which 'renders the person doing the act ... liable to punishment'". This conclusion was said to follow from the focus in the language of the definition of "offence" upon "the liability to punishment of 'the person doing the act'". This focus led Beech JA to read the definition of "offence" as if it referred to "an act ... which of itself renders the person doing the act liable to punishment". In other words, his Honour equated "an act ... which renders the person doing the act ... liable to punishment" with "an act ... which suffices to establish the liability of the person doing the act ... to punishment". As will be seen, the majority in Barlow explained that the definition of "offence" refers, not to the concatenation of elements and circumstances that establish liability to punishment, but to the conduct element of an offence (being an act or omission), which, if combined with other circumstances, renders the offender liable to punishment. On the hypothesis that PM struck the fatal blow, one may accept, in the absence of any evidence regarding his capacity, that PM was not criminally responsible for the murder of the Deceased because of his immature age. But it is another thing to say that it follows that no offence was committed by him or by 54 Birdsall v Western Australia (2019) 54 WAR 418 at 497 [445]. Bell Gordon those of mature age who enabled or aided him to stab the Deceased. Given the circumstances of the death of the Deceased, it is, to say the least, surprising that it could be suggested that the death of the Deceased did not involve the commission of an offence. The evidence that the Deceased was stabbed in the chest with a screwdriver and died as a result was unchallenged; and the inference that whoever struck that blow did so with murderous intent is compelling, as the jury's verdict confirms. And there is no suggestion that it was not open to the jury to conclude that each of the appellants either struck the fatal blow himself with murderous intent or aided the person who did so knowing that person was possessed of such an intention. In cases like the present, it may be practically impossible to identify the participant who struck the killing blow. That this is so has not been suggested to be an obstacle to the operation of ss 7 and 8. It has not been suggested that there was any deficiency in the terms of the indictment presented by the prosecution in this case. The indictment alleged simply that "[o]n 27 January 2016 at Perth [the appellants] murdered [the Deceased]". None of the appellants was alleged to be the "principal offender" whose offence the others enabled or aided. It has not been suggested that it was necessary for the jury in the present case to come to a conclusion as to the identity of the person who actually struck the blow that fatally wounded the Deceased as a condition precedent to a determination of the guilt of the alleged participants who were on trial. To the extent that it is now an integral part of the appellants' argument that proof that the fatal blow was not struck by PM as the "principal offender" is a condition precedent to the application of ss 7 and 8 against any of the appellants, the argument rests upon a view of the Code that is not supported by the terms of the Code. Even without the instruction afforded by this Court's exposition of ss 7 and 8 in Barlow, it can be seen that the appellants' argument departs from the terms of the Code in its suggestion that ss 7 and 8 have no operation unless liability to punishment of a "principal offender" is established. Neither s 7 nor s 8, by its terms, distinguishes between principal and secondary offenders. Rather, each section makes each of the persons within its scope a principal offender. Section 7 is explicit in this regard; and there is no reason to regard s 8 as operating upon a different basis. While it is, no doubt, convenient to speak of a person who actually does an act or makes an omission which constitutes an offence as "the principal offender", the use of that short-hand for the purposes of discussion should not be allowed to obscure the point that s 7 expressly attributes to the persons mentioned in s 7 the acts or omissions that constitute the offence. In this regard, it proceeds from the assumption that an "offence is committed". The appellants' argument also departs from the Code by suggesting that, by the operation of ss 7 and 8, it is the criminal responsibility of the "principal Bell Gordon offender", rather than his or her acts or omissions, that is imputed to other participants. It is to be noted that s 7(a) refers expressly to "the act or ... omission which constitutes the offence". It is hardly to be supposed that the word "offence" in the introductory words of s 7, "[w]hen an offence is committed", bears a meaning different from that spelt out in terms in s 7(a). And it is noteworthy that neither s 7 nor s 8 speaks of "criminal responsibility" or "liability to punishment" in relation to that which is attributed to the other participants. As to the appellants' reliance upon the definition of "criminal responsibility" in s 1(1), and the description of "offence" in s 2, it has long been accepted that the freedom from criminal responsibility conferred by s 36 and the other provisions of Ch V of the Code must be negatived in order to establish criminal responsibility where an issue arises in the case as to the possible application of those provisions55. Whether the act or omission that constitutes an offence entails the conclusion that the person doing the act or making the omission is liable to punishment may depend upon whether, in the circumstances of the case, the possible application of the provisions of Ch V of the Code has been negatived by the prosecution. But it has never been suggested that the freedom from criminal responsibility enjoyed by an individual participant in a crime, by reason of circumstances personal to that individual that are apt to engage the provisions of Ch V, also enures to confer a like freedom on others not similarly circumstanced. The provisions of Ch V of the Code do not alter the terms of the Code's proscriptions or defences. If PM, as the hypothetical killer of the Deceased, had struck the lethal blow in self-defence in accordance with s 248(4), which is to be found in Ch XXVI of the Code, his assault upon the Deceased would not have been unlawful. It might be said that PM's act was not the conduct element of an offence because his assault was a lawful act under s 248(4). But there was no suggestion that PM acted in self-defence and so no issue arises in that regard. Nor, for that matter, was there any suggestion that the stabbing occurred in any of the other circumstances that might make an assault lawful under Ch XXVI of the Code. Chapter V of the Code applies, by virtue of s 36, to "all persons charged with any offence against the statute law of Western Australia". Reading s 36 epexegetically, it applies the provisions of Ch V to "all persons charged with any act or omission against the statute law of Western Australia". Accordingly, as has previously been said56, an act or omission that otherwise constitutes an offence 55 Hunt v Maloney; Ex parte Hunt [1959] Qd R 164 at 172, 182-183; Kehoe v Dacol Motors Pty Ltd; Ex parte Dacol Motors Pty Ltd [1972] Qd R 59 at 64-65, 77, 79-81. 56 See Pickering v The Queen (2017) 260 CLR 151 at 159 [21]. Bell Gordon under the Code may not entail liability to punishment by reason of the application of one or more of the provisions of Ch V. As will be seen, this view of the operation of s 2 of the Code draws support from the reasons of the majority of this Court in Barlow. Barlow In Barlow, the accused, a prisoner in gaol in Brisbane, was alleged to have been a party with other prisoners to a plan to kill their fellow inmate, Bart Vosmaer. Barlow's co-offenders were convicted of murder. The jury acquitted Barlow of murder but convicted him of manslaughter, evidently on the basis that he was a party to a plan to assault Vosmaer, but not to kill him or inflict grievous bodily harm on him. The Court of Appeal of Queensland, following its earlier decision in Hind and Harwood, allowed Barlow's appeal against his conviction for manslaughter on the ground that, where the prosecution relies on s 8 to found a charge of murder against an accused person, a verdict of manslaughter is not open to the jury where they find the actors who actually assaulted the deceased guilty of murder. The particular issue that fell to be resolved in Barlow was whether s 8 of the Code (Qld) allows for alternative verdicts of murder and manslaughter against participants in the prosecution of an unlawful purpose to inflict physical harm on another. In Hind and Harwood57, the Court of Appeal of Queensland had held that alternative verdicts were not permitted on the basis that the expression "the offence" in s 8 refers to the offence for which the actual assailant is convicted and punished. This approach produced an "all or nothing" outcome whereby, if one of the parties to an unlawful purpose is convicted of murder, s 8 requires that other parties to the purpose must be either convicted of murder or acquitted. In the course of rejecting this approach, Brennan CJ, Dawson and Toohey JJ said58: "As the doing of an unlawful act by the principal offender has to be proved by evidence admitted against the secondary party β and not by a verdict in the case of the principal offender β should the secondary party be entitled to an acquittal if the jury be left in a reasonable doubt on the evidence in his case as to whether the principal offender had the intention that would make him liable for a more serious offence? So bizarre an interpretation of s 8 confirms, in our respectful opinion, the correctness of the majority view in (1995) 80 A Crim R 105 at 136, 141. 58 R v Barlow (1997) 188 CLR 1 at 11 (footnote omitted). Bell Gordon Jervis and the consequent error of the view espoused in Hind and Harwood." The fundamental error in Hind and Harwood that was decisively corrected by the decision in Barlow was the notion that ss 7 and 8 were concerned to impute to other participants in an offence the criminal responsibility of the person who did the act or made the omission that constituted the offence. As Brennan CJ, Dawson and Toohey JJ explained in relation to s 8 in particular, it is the conduct of the actor, that is to say, his or her acts or omissions, upon which the Code fastens59. The circumstances of the offence, including its result and the state of mind which accompanied the acts or omissions that constituted it, establish the offence as being of a particular "nature" for the purposes of s 8 of the Code60. In overruling Hind and Harwood, Brennan CJ, Dawson and Toohey JJ said that s 8 "sheets home to the secondary offender such conduct (act or omission) of the principal offender as (1) renders the principal offender liable to punishment but (2) only to the extent that that conduct (the doing of the act or the making of the omission) was a probable consequence of prosecuting a common unlawful purpose"61. These observations were directed to the issue raised by the invocation of s 8 in the case before them. Their Honours' observations were concerned, not to assert that criminal responsibility on the part of the actor (which was not in issue in that case) is necessary to the operation of the section against a participant, but to make the point that s 8 does not operate to deem a participant to be criminally responsible to the same extent as the actor. The majority in Barlow held that a participant other than the actor may be criminally responsible for a lesser offence than that for which the actor is criminally responsible, by reason of a difference in the states of mind accompanying their participation in the acts that constitute the offence. Consistently with that holding, ss 7 and 8 may apply so that a participant other than the actor may be criminally responsible for an act or omission of the actor, even though the actor is not criminally responsible by reason of a difference in his or 59 R v Barlow (1997) 188 CLR 1 at 10. See also R v Keenan (2009) 236 CLR 397 at 60 R v Barlow (1997) 188 CLR 1 at 10. See also R v Keenan (2009) 236 CLR 397 at 61 R v Barlow (1997) 188 CLR 1 at 10. Bell Gordon her personal circumstances and the engagement of different provisions of the Code as a result of those circumstances. When "an offence is committed" In ss 7 and 8, the expression when "an offence is committed" is not to be taken as suggesting that the actor's liability to punishment for that offence is a condition precedent to the operation of the provisions. That this is so is apparent in s 7 itself because s 7(a) expressly deems "[e]very person who actually does the act or makes the omission which constitutes the offence" to be guilty of the offence. That deeming would be otiose, and indeed would make little sense, if proof of the commission of the offence by that person was a pre-condition to the operation of s 7 at all. As has been observed, neither s 7 nor s 8 suggests that it is necessary to identify a principal offender who has committed an offence. Rather, as reference to the analysis in Barlow shows, the relevant issue in the trial of an accused participant where the prosecution relies upon ss 7 and 8 is whether the prosecution has proved against the accused that an act or omission has occurred which constitutes the conduct element of an offence, and in relation to which the accused participant has such a connection as to be deemed to have taken part in that act or omission. An offence In Barlow, Brennan CJ, Dawson and Toohey JJ held that in ss 7 and 8 of the Code (Qld), the term "offence" refers to the element of conduct (an act or omission) which, subject to the operation of the other provisions of the Code (Qld) based upon the personal circumstances of the particular accused participant, may render the accused liable to punishment62. Their Honours began by acknowledging that "offence" in s 8 was capable of more than one meaning. In their Honours' view, "offence" might mean "an offence as defined in the Code" or "what a principal offender has actually done or omitted that renders the principal offender liable to punishment"63. Their Honours concluded that the term was not to be understood as the concatenation of elements which constitute a particular offence under the Code (Qld), nor as the combination of facts which together render an actual offender liable to punishment. Rather, the term was to be understood as (1997) 188 CLR 1 at 9-10. 63 R v Barlow (1997) 188 CLR 1 at 8. Bell Gordon referring to the element of conduct (being an act or omission) which, if combined with the other prescribed circumstances, renders the offender liable to It is necessary to pay close attention to what their Honours said65: "'Offence' is a term that is used sometimes to denote what the law proscribes under penalty and sometimes to describe the facts the existence of which render an actual offender liable to punishment. When the term is used to denote what the law proscribes, it may be used to describe that concatenation of elements which constitute a particular offence (as when it is said that the Code defines the offence of murder) or it may be used to describe the element of conduct (an act or omission) which attracts criminal liability if it be accompanied by prescribed circumstances or if it causes a prescribed result or if it be engaged in with a prescribed state of mind (as when it is said that a person who strikes another a blow is guilty of the offence of murder if the blow was unjustified or was not excused, if death results and if the blow is struck with the intention of causing death). Correspondingly, when the term 'offence' is used to denote the facts the existence of which renders an actual offender liable to punishment, the term denotes either the concatenation of facts which create such a liability (as when it is said that Barlow's co-accused committed the offence of murder) or the conduct of the offender (an act or omission) which, with other facts of the case, create such a liability (as when it is said that the co-accused who struck Vosmaer the blow which caused his death and who did so with the intention of killing him or doing him grievous bodily harm is guilty of the offence of murder)." Their Honours resolved the competing possibilities as to the meaning of "offence" in ss 7 and 8 in favour of the view that it means the "element of conduct (an act or omission) which attracts criminal liability if it be accompanied by prescribed circumstances or if it causes a prescribed result or if it be engaged in with a prescribed state of mind"66. That resolution is inconsistent with the understanding of "offence" that lies at the heart of the reasons of Beech JA. 64 R v Barlow (1997) 188 CLR 1 at 9. See also R v KAR [2019] 2 Qd R 370 at 392 [57]. 65 R v Barlow (1997) 188 CLR 1 at 9 (emphasis in original). 66 R v Barlow (1997) 188 CLR 1 at 9. Bell Gordon Their Honours found contextual support for their conclusion in s 2 of the Code (Qld)67: "Section 2 of the Code makes it clear that 'offence' is used in the Code to denote the element of conduct (an act or omission) which, if accompanied by prescribed circumstances, or if causing a prescribed result or if engaged in with a prescribed state of mind, renders a person engaging in the conduct liable to punishment. Section 7(a) confirms that 'offence' is used to denote the element of conduct in that sense. By the ordinary rules of interpretation, the term must bear the same meaning in pars (b), (c) and (d) of s 7 as it bears in par (a). Section 8, which complements s 7 and extends the net of criminal liability for an offence to the parties who have formed a common intention of the kind therein mentioned, reveals no ground for attributing a different meaning to 'offence' in s 8." In R v Keenan68 Kiefel J, with whom Hayne, Heydon and Crennan JJ agreed, referred to this passage with evident approval. Importantly, in Barlow, Brennan CJ, Dawson and Toohey JJ went on to support their preferred construction of "offence" by reference to the structure of the Code (Qld). Their Honours explained69: "The structure of Ch V of the Code shows this to be the meaning of 'offence' generally in the Code. The first paragraph of s 23 deals first with criminal responsibility for an act or omission then with criminal responsibility for the result. It then adverts in the second paragraph of s 23 to specific intent to cause a result as a state of mind distinct from the voluntariness referred to in the first paragraph of s 23. The element of specific intent is dealt with again by the third paragraph of s 28 which makes provision for the effect of intoxication. Section 24 deals with mistake as to the circumstances in which an act is done or an omission is made. Section 27 and the first paragraph of s 28 relate to disorders of the mind that might affect voluntariness in the doing of an act or the making of an omission or a mistake in circumstances accompanying an act or omission 67 R v Barlow (1997) 188 CLR 1 at 9. (2009) 236 CLR 397 at 435-436 [130]-[131]. 69 R v Barlow (1997) 188 CLR 1 at 9-10. Bell Gordon as well as a capacity 'to know that he ought not to do the act or make the omission'." It is convenient also to note here that s 23A(2) of the Code provides that "[a] person is not criminally responsible for an act or omission which occurs independently of the exercise of the person's will". In Kaporonovski v The Queen70, Gibbs J (with whom Stephen J agreed) said of the Queensland analogue to s 23A(2) that the "act" to which the provision refers is a physical action apart from its consequences. His Honour gave as examples the firing of the gun rather than the wounding in Vallance v The Queen71, and the wielding of the stick rather than the killing of the baby in Timbu Kolian v The Queen72. Here, the "act" that constitutes the offence for the purposes of ss 7 and 8 is the physical act of stabbing the Deceased rather than the physical harm the Deceased suffered as a consequence73. In this case, the stabbing of the Deceased was an act that constituted the conduct element of the offence of murder, having regard to the murderous intent of the assailant and the consequences of the stabbing. But, consistently with the view that prevailed in Barlow, it was the stabbing that was the "offence" that was committed so as to engage the operation of ss 7 and 8 of the Code. The observations of Brennan CJ, Dawson and Toohey JJ acknowledge that the provisions of Ch V of the Code apply where an act has been committed for which the offender would be liable to punishment, depending on the circumstances74. Consistently with that view, an offence within the meaning of ss 7 and 8 may be committed even though the person who did the act or made the omission that constituted the offence is not criminally responsible for the offence by reason of the application of Ch V of the Code. True it is that in Barlow, there was no suggestion that the equivalent of the provisions of Ch V of the Code were in play. But the guidance afforded by their Honours' acknowledgement of the significance of Ch V to the proper understanding of ss 7 and 8 is important. The personal circumstances referred to in the provisions of Ch V adverted to by their Honours are immaterial to whether an act has been done, and so to (1973) 133 CLR 209 at 231. (1961) 108 CLR 56. (1968) 119 CLR 47. 73 See Pickering v The Queen (2017) 260 CLR 151 at 159-160 [22]. 74 See also Pickering v The Queen (2017) 260 CLR 151 at 159 [21]. Bell Gordon whether an offence has been "committed" for the purposes of ss 7 and 8. Rather, as their Honours recognised, these provisions operate upon the hypothesis that liability to punishment as for an offence would otherwise be established under the provisions of the Code or other statutes. It would be inconsistent with their Honours' reasoning to treat the possible application of the provisions of Ch V to one participant in the doing of an act that constitutes an offence as an obstacle to the operation of s 7 or s 8 of the Code in relation to others. The overarching application of Ch V of the Code means that while the commission of an offence is a necessary condition of criminal responsibility, the commission of an offence is not always sufficient of itself to establish liability for punishment. One may illustrate this aspect of the operation of the Code by reference to ss 24 and 27, which, like s 29, are to be found in Ch V of the Code. First, it is to be noted that ss 24 and 27(2)75 speak in terms of a person being criminally responsible for an act or omission to an "extent". The notion that a person may be criminally responsible for an act or omission only to the extent contemplated by ss 24 and 27(2) confirms that an offence may be committed that incurs only limited criminal responsibility on the part of the offender. That is because, as explained in Barlow, the determination of a person's criminal responsibility is a question distinct from whether the act that constitutes an offence has been committed. Secondly, on the approach urged by the appellants, a person who aids an insane person intentionally to strike and thereby kill another person could not be held criminally responsible for murder. But the understanding of the meaning of "offence" in ss 7 and 8 explained in Barlow means that the Code does not have that result. On that understanding, a person who enables or aids a person of unsound mind to strike a blow that kills another is not relieved of criminal responsibility for what is an unlawful killing by the circumstance that the person who intentionally struck the killing blow is not criminally responsible by reason of insanity. Similarly, a person who enables the doing of the act or the making of the omission by another, and is thereby deemed by s 7(b) to have taken part in the act or omission, will not be criminally responsible for the offence constituted by it if the 75 Section 27(2) provides that "[a] person whose mind, at the time of his doing or omitting to do an act, is affected by delusions on some specific matter or matters, but who is not otherwise entitled to the benefit of subsection (1), is criminally responsible for the act or omission to the same extent as if the real state of things had been such as he was induced by the delusions to believe to exist". Section 27(1) provides relevantly that "[a] person is not criminally responsible for an act or omission on account of unsoundness of mind if at the time of doing the act or making the omission he is in such a state of mental impairment as to deprive him of capacity to understand what he is doing". Bell Gordon enabler has acted under a mistake of fact within the meaning of s 24 of the Code. On the other hand, if the person who actually does the act or makes the omission that constitutes the offence does so under a mistake of fact within the meaning of s 24, but the enabler has not been under any such mistake, the enabler will be criminally responsible for the offence even though the actor is not. And so, in the present case, a person who enables or aids a person of immature age to murder another person is not relieved of criminal responsibility for his participation in the murder. As noted above, the circumstances of the death of the Deceased were such that it was open to the jury to infer that the person who actually plunged the screwdriver into the chest of the Deceased, thereby killing him, acted with the intention of causing death or grievous bodily harm so that murder had been committed. On the hypothesis that it was PM who actually struck the lethal blow, s 29 operates with ss 1(1) and 2 of the Code, not to say that no offence had been committed, but to say that PM was not liable to punishment for the act that constituted the offence. And so, even on that hypothesis, it was open to the jury to apply ss 7 and 8 to conclude that the appellants were guilty of the offence of murder constituted by the acts of PM in stabbing the Deceased with murderous intent. The appellants argued that the observations of Gageler, Gordon and Edelman JJ in Pickering v The Queen76 are an obstacle to this construction of ss 7 and 8. Pickering was concerned with the application of s 31 of the Code (Qld), which provides that a person is "not criminally responsible" for an act if the person does the act in one of the circumstances prescribed by s 31(1). Gageler, Gordon and Edelman JJ said that "an act done in one of the circumstances specified in s 31(1) is not an offence; the act does not constitute an offence"77. This observation was concerned, not with the criminal responsibility of a participant under ss 7 and 8 of the Code (Qld), but with the exculpatory effect of a provision invoked by an individual as a defence to a charge of murder. There was no occasion in Pickering to attend to the difference between whether an offence has been committed and whether a particular accused is criminally responsible for the offence. The issue was whether s 31(1) of the Code (Qld) was available in the (2017) 260 CLR 151. 77 Pickering v The Queen (2017) 260 CLR 151 at 165 [40] (emphasis added). Bell Gordon circumstances to exculpate the accused in relation to the offence charged78. That being so, it was convenient and relevantly innocuous to speak of s 31(1) of the Code (Qld) as having the effect that no offence had been committed79. Issues requiring more nuanced attention, such as those thrown up by ss 7 and 8 of the Code, did not arise for consideration. Certainly, their Honours cannot be taken to have been expressing disapproval of the analysis in Barlow. The appellants advanced a further argument, adopting the view of Beech JA, that the final paragraph of s 7 of the Code supported their preferred construction. Beech JA considered that this paragraph was an express and exhaustive statement of the only circumstances in which a participant may be criminally responsible where the doing of the relevant act does not render the actor liable to punishment80. But the last paragraph of s 7 cannot be read as having a limiting operation upon the scope of paras (a) to (d) of s 7. The last paragraph has a different scope: it is apt to cover cases to which the earlier paragraphs do not apply. The last paragraph of s 7 is apt to cover cases where the act done or omitted simply does not, for some reason such as ignorance of facts on the part of the person doing the act, constitute an element of any offence at all81. Given that the last paragraph of s 7 has work to do, it is not to be seen as implying a more limited operation for the provisions which it follows. Conclusion On the authoritative exposition of the Code in Barlow, s 7, in referring to "an offence", refers to the act or omission which constitutes the offence. In its operation, s 7 deems each category of person referred to in paras (a) to (d) to be a person who may be charged with the offence constituted by the act or omission. Similarly, s 8 of the Code deems each of two or more persons to have done the act, the doing of which was a probable consequence of the prosecution of an unlawful purpose. It is the doing of the act or the making of the omission by the actor that is attributed to another person or other persons, not the criminal responsibility of the 78 Pickering v The Queen (2017) 260 CLR 151 at 165 [43]. 79 Compare Walden v Hensler (1987) 163 CLR 561 at 573. 80 Birdsall v Western Australia (2019) 54 WAR 418 at 496-497 [438]-[444]. 81 See White v Ridley (1978) 140 CLR 342 at 346-347; R v Webb [1995] 1 Qd R 680 at 684-685. See also Kehoe v Dacol Motors Pty Ltd; Ex parte Dacol Motors Pty Ltd [1972] Qd R 59 at 75-76. Bell Gordon actor. Sections 7 and 8 of the Code render a person other than the actor liable to criminal punishment for those acts or omissions, subject to the personal circumstances of that other person having regard to the other provisions of the Code. The circumstance that one of those persons may have an immunity from criminal responsibility by reason of his or her personal circumstances addressed in Ch V of the Code does not prevent the operation of ss 7 and 8 against the other persons82. Accordingly, paras (b) and (c) of s 7 apply to an enabler or aider of another person to do an act or make an omission that is the element of conduct of an offence under the Code, whether or not that other person is criminally responsible for the act or omission. And s 8 of the Code applies to a person who, with one or more other persons, forms a common intention to prosecute an unlawful purpose with another, where in the prosecution of that purpose an "offence" is committed of such a nature that its commission was a probable consequence of the prosecution of the purpose; and that is so, whether or not those other persons or some of them are criminally responsible for the act or omission. When regard is had to the evidence in the present case of the nature and extent of the injuries inflicted upon the Deceased including the circumstances of the fatal wounding, it was open to the jury to conclude that whichever of the Deceased's assailants stabbed the Deceased did so without lawful excuse for the act and with murderous intent, and that that intent was shared by each participant in the attack. That the particular assailant who stabbed the Deceased may not have been criminally responsible for the offence of murder by reason of some personal circumstance peculiar to that assailant did not affect the operation of ss 7 and 8, which was to attribute the stabbing to any person who aided or enabled the stabbing, or who participated in the pursuit of the common purpose of assaulting the Deceased in the course of the prosecution of which an assault on the Deceased with murderous intent was a probable consequence. In the circumstances of the attack upon the Deceased, such a person was liable to criminal punishment as for the offence of murder unless his personal circumstances were also such as to relieve him from criminal responsibility for the murder. In the present case, the liability of each of the appellants to criminal punishment for the murder of the Deceased did not depend upon proof beyond reasonable doubt either that PM had the capacity to know that he ought not to strike 82 The position has been held to obtain in cases arising otherwise than under the Code. See Osland v The Queen (1998) 197 CLR 316 at 329-330 [27], 342 [72], 346 [81]; IL v The Queen (2017) 262 CLR 268 at 272-273 [2], 282 [29], 296-297 [65]. Bell Gordon the blow that killed the Deceased, or that he did not strike that blow. Accordingly, the trial judge did not err in declining to instruct the jury that it did. Order Each appeal should be dismissed. Nettle NETTLE J. These appeals are from a decision of the Court of Appeal of the Supreme Court of Western Australia83 concerning the meaning of ss 7 and 8 of the Criminal Code (WA) ("the Code (WA)"), contained in the Schedule to Appendix B of the Criminal Code Act Compilation Act 1913 (WA) ("the Compilation Act"). The question is whether the majority of the Court of Appeal were correct in holding that a person could be convicted of an offence of murder contrary to s 279 of the Code (WA) as an aider under s 7(b) or (c) of the Code (WA) or as a party to a common unlawful purpose under s 8 of the Code (WA) where it was reasonably possible that the killing was committed by another person, under the age of 14 years, who was not proven to be criminally responsible pursuant to s 29 of the Code (WA). For the reasons which follow, the majority were correct, and the appeals should be dismissed. The facts Following a trial before judge and jury in the Supreme Court of Western Australia, the five appellants and another male person (Birdsall) were convicted of murder contrary to s 279 of the Code (WA). The prosecution case at trial was that, shortly before 3.30 am on 27 January 2016, the appellants β along with Birdsall and two male persons then aged 11 and 14 ("PM" and "JW", respectively) β were engaged in an altercation with the deceased, Mr Slater; that one of the group unlawfully killed the deceased within the meaning of s 279 of the Code (WA), and thus was guilty of murder under s 7(a) of the Code (WA), by plunging a screwdriver some 25 cm into his chest, thereby puncturing his aorta, from which he bled to death; and that the other members of the group were guilty of murder under s 7(b) or (c) or s 8 of the Code (WA). It was open to the jury to find that PM was the member of the group who killed the deceased. The prosecution did not, however, adduce evidence sufficient to establish beyond reasonable doubt that PM had the capacity to know that he ought not do the act which killed the deceased and was thus criminally responsible under s 29 of the Code (WA), and the trial judge declined to direct the jury that it was not open to convict any of the appellants or Birdsall pursuant to s 7(b) or (c) or s 8 of the Code (WA) unless satisfied beyond reasonable doubt that PM was not the person whose act killed the deceased. The appellants sought leave to appeal to the Court of Appeal on grounds including that the trial judge erred in law by failing to give that direction. In support of that ground, they asserted, in substance, that none of them could be convicted unless the jury were satisfied beyond reasonable doubt that the person whose act killed the deceased had thereby committed the offence of murder, and that PM, who was possibly the killer, could not be found to have committed that offence in the absence of proof beyond reasonable doubt that he had the capacity to know that he ought not do the act which killed the deceased. By majority (Buss P and 83 Birdsall v Western Australia (2019) 54 WAR 418. Nettle Mazza JA; Beech JA dissenting), the Court of Appeal dismissed the appeals. By grant of special leave, the appellants now appeal to this Court. Relevant legislative provisions The offence of murder Section 2 of the Code (WA) defines an "offence" as follows: "An act or omission which renders the person doing the act or making the omission liable to punishment is called an offence." Section 268 of the Code (WA) provides that: "It is unlawful to kill any person unless such killing is authorised or justified or excused by law." (emphasis added) Section 277 of the Code (WA) provides that: "Any person who unlawfully kills another is guilty of a crime which, according to the circumstances of the case, may be murder or manslaughter." (emphasis added) Section 279(1) of the Code (WA) defines the circumstances in which a person who unlawfully kills another person is guilty of "murder" as follows: "If a person unlawfully kills another person and β the person intends to cause the death of the person killed or another person; or the person intends to cause a bodily injury of such a nature as to endanger, or be likely to endanger, the life of the person killed or another person; or the death is caused by means of an act done in the prosecution of an unlawful purpose, which act is of such a nature as to be likely to endanger human life, the person is guilty of murder." (emphasis added) Section 279(4) provides in substance that a person other than a child who is guilty of murder must be sentenced to life imprisonment unless that sentence would be clearly unjust in the circumstances and the person is unlikely to be a threat to the safety of the community, in which event the person is liable to imprisonment for a term of 20 years. Section 279(5) provides in substance that a Nettle child who is guilty of murder is liable to either life imprisonment or detention at the Governor's pleasure. Justifications and excuses Section 5 of Appendix B to the Compilation Act, which is headed "No civil action for lawful acts; saving", provides, so far as is relevant, that: "When, by the Code, any act is declared to be lawful, no action can be brought in respect thereof." Section 1(1) of the Code (WA) provides, inter alia, that: "The term criminally responsible means liable to punishment as for an offence; and the term criminal responsibility means liability to punishment as for an offence". Chapter XXVI of the Code (WA) is headed "Assaults and violence to the person generally: Justification, excuse and circumstances of aggravation". It includes s 222, which defines "assault" in terms of the application of force to the person without consent, and s 223, which provides that an assault is "unlawful", and constitutes an offence, unless it is "authorised or justified or excused by law". It also includes two further types of provisions relevant to the disposition of these appeals. Provisions of the first type specify circumstances in which an act or omission that could otherwise constitute an unlawful application of force to the person is "lawful". Thus, in general terms, s 224 provides for the execution of a lawful sentence by a person charged with doing so; ss 225 and 226 provide for arrest or detention by a person charged with executing the lawful process of a court or a lawful warrant, or by anyone assisting that person; s 231 provides for the use of necessary force by a person lawfully executing a sentence, process or warrant or making an arrest, or by anyone assisting such a person, to overcome forcible resistance; ss 233 and 235 provide for the use of necessary non-lethal force by a person who is seeking to make or has made an arrest, or by anyone assisting that person, to prevent escape84; s 238 provides for the use of necessary and proportionate force by any person to suppress a riot; ss 239 and 240 provide for the use of force by a police officer, and by any person in obedience to an order of a justice, as believed to be necessary and proportionate to suppress a riot; s 241 provides for the use by any person of force believed to be necessary and proportionate to prevent serious mischief from a riot; s 242 provides for obedience 84 cf Code (WA) (as enacted), s 233, referring to arrest only by "a police officer", repealed and replaced by Criminal Law Amendment Act 1985 (WA), s 6. Nettle by a member of the military to the command of a superior to suppress a riot; s 243 provides for the use of necessary force by any person to prevent another person believed to be mentally impaired from doing violence to person or property85; s 244 provides for the use of such non-lethal force by the occupant in peaceable possession as is believed to be necessary to prevent a home invader from wrongfully entering, to cause a home invader to depart or to defend against violence used or threatened by the home invader; s 247 provides for the use of necessary non-lethal force by any person to prevent the repetition of an act or insult of such nature as to provoke an assault; s 248 relevantly provides for the doing of a "harmful act"86 by a person in "self-defence"87, which does not include defence of a person from "a harmful act that is lawful", although, for that purpose, "a harmful act is not lawful merely because the person doing it is not criminally responsible for it" (emphasis added)88; ss 251 to 256 provide for the use of necessary non-lethal force by a person acting under a claim of right, or by anyone acting by that person's authority, to defend or obtain possession of property; s 257 provides for the use of reasonable force by a parent or a person in loco parentis towards a child by way of correction; and s 258 provides for the use of reasonable force by the person in command of a vessel or aircraft, or by anyone acting under that person's instruction, as believed to be necessary to maintain good order and discipline. Finally, s 260 provides in substance that, in any case in which the use of force is lawful, "the use of more force than is justified by law under the circumstances is unlawful" (emphasis added). Provisions of the second type specify circumstances in which a person whose act or omission could constitute an unlawful application of force, and thus who would otherwise be liable to punishment as for an offence, is "not criminally 85 cf Code (WA) (as enacted), s 243, referring to prevention of violence by a person believed to be "of unsound mind", amended by Criminal Law Amendment Act 1996 (WA), s 13 and Mental Health (Consequential Provisions) Act 1996 (WA), s 9 and repealed and replaced by Criminal Investigation (Consequential Provisions) Act 2006 (WA), s 23. 86 See s 248(1), defining "harmful act" as "an act that is an element of an offence under [Pt V] other than Chapter XXXV". 87 See s 248(4), defining circumstances of "self-defence" in terms of a person's belief that the harmful act is necessary to defend the person or another and a reasonable response in the circumstances as the person believes them to be, and the existence of reasonable grounds for such belief. 88 cf Code (WA) (as enacted), s 248, referring to defence against an unlawful and unprovoked "assault", repealed and replaced by Criminal Law Amendment (Homicide) Act 2008 (WA), s 8. Nettle responsible". Unlike provisions of the first type, they do not declare that such conduct is itself lawful, but rather deny the person's liability to criminal punishment for the conduct89. Thus, in general terms, s 228 operates in favour of a person who executes or assists in executing a sentence, process or warrant in good faith and with a mistaken belief that the court, justice or other person who passed or issued it had authority to do so and who would have been "justified" under ss 224 to 227 had that been so; s 229 operates in favour of a person who, pursuant to warrant, arrests a person in good faith and with a mistaken belief on reasonable grounds that the person so arrested is the person named in the warrant; s 230 operates in favour of a person who acts on a warrant in good faith and with a mistaken belief on reasonable grounds that it is good in law; s 246 operates in favour of a person who commits an assault upon the sudden while deprived by provocation of the power of self-control, provided the force used is not disproportionate to the provocation; and ss 259 and 259A operate in favour of a person who administers a reasonable treatment or performs an inoculation procedure in good faith and with reasonable care and skill. Chapter V of the Code (WA), which is headed "Criminal responsibility" and which, perforce of s 36, applies with some exceptions to "all persons charged with any offence against the statute law of Western Australia", stipulates further circumstances in which a person is "not criminally responsible" for an act or omission that could otherwise constitute an offence. Thus, s 22 provides in substance that, while ignorance of the law affords no "excuse" for an act or omission that would otherwise constitute an offence, a person is not criminally responsible as for a property offence for an act or omission in the exercise of an honest claim of right without intention to defraud; ss 23A and 23B provide that, subject to provisions on negligent acts and omissions90, a person is not criminally responsible for an act or omission that occurs independently of the exercise of the person's will or by accident; s 24 provides in substance that a person is not criminally responsible for an act done or omission made under an honest and reasonable mistake of fact to any greater extent than if the real state of things had been as believed to be; ss 25 and 32 provide in substance that a person is not criminally responsible for an act done or omission made "in an emergency"91 or 89 See [80] above. 90 See Ch XXVII, s 444A. 91 See s 25(3), defining "an emergency" in terms of a person's belief that an act or omission is a necessary response to a sudden or extraordinary emergency, the reasonableness of the response and the existence of reasonable grounds for such belief. Nettle "under duress"92; s 27 provides in substance that a person is not criminally responsible for an act done or omission made in such a state of mental impairment as to deprive him or her of capacity to understand what he or she is doing, to control his or her actions or to know that he or she ought not do the act or make the omission; s 29 provides in substance that a person under the age of ten years is not criminally responsible for any act or omission and that a person under the age of 14 years is not criminally responsible for an act or omission unless it is proved that, at the time of the act or omission, he or she had the capacity to know that he or she ought not do the act or make the omission93; s 30 provides in substance that except as expressly provided, a judicial officer is not criminally responsible for an act or omission in the exercise of his or her judicial function; and s 31 provides in substance that a person is not criminally responsible for an act or omission in execution of the law or obedience to the order of a competent authority that is not manifestly unlawful. Parties to an offence Chapter II of the Code (WA), which is headed "Parties to offence", includes s 7, headed "Principal offenders", and s 8, headed "Offence committed in prosecution of common purpose". Section 7 provides as follows: "When an offence is committed, each of the following persons is deemed to have taken part in committing the offence and to be guilty of the offence, and may be charged with actually committing it, that is to say β Every person who actually does the act or makes the omission which constitutes the offence; Every person who does or omits to do any act for the purpose of enabling or aiding another person to commit the offence; Every person who aids another person in committing the offence; 92 See s 32(2), defining "duress" in terms of a person's belief that an act or omission is necessary to prevent a threat being carried out, the reasonableness of the response and the existence of reasonable grounds for such belief. 93 cf Code (WA) (as enacted), s 29, specifying seven years as the age under which a person is not criminally responsible for any act or omission and providing for a presumption against the capacity of a male person under the age of 14 years to have carnal knowledge, amended by Acts Amendment (Sexual Assaults) Act 1985 (WA), s 4 and Acts Amendment (Children's Court) Act 1988 (WA), s 44. Nettle (d) Any person who counsels or procures any other person to commit the offence. In the fourth case he may be charged either with himself committing the offence or with counselling or procuring its commission. A conviction of counselling or procuring the commission of an offence entails the same consequences in all respects as a conviction of committing the offence. Any person who procures another to do or omit to do any act of such a nature that, if he had himself done the act or made the omission, the act or omission would have constituted an offence on his part, is guilty of an offence of the same kind, and is liable to the same punishment as if he had himself done the act or made the omission; and he may be charged with himself doing the act or making the omission." Section 8 provides as follows: "(1) When 2 or more persons form a common intention to prosecute an unlawful purpose in conjunction with one another, and in the prosecution of such purpose an offence is committed of such a nature that its commission was a probable consequence of the prosecution of such purpose, each of them is deemed to have committed the offence. (2) A person is not deemed under subsection (1) to have committed the offence if, before the commission of the offence, the person β (a) withdrew from the prosecution of the unlawful purpose; and by words or conduct, communicated the withdrawal to each other person with whom the common intention to prosecute the unlawful purpose was formed; and having so withdrawn, took all reasonable steps to prevent the commission of the offence." The reasoning of the Court of Appeal In the Court of Appeal, the majority reasoned94 that: "The exemption or immunity [conferred by s 29 of the Code (WA)] is personal to the child in that s 29 is concerned with whether, at the material 94 Birdsall v Western Australia (2019) 54 WAR 418 at 452 [175]. Nettle time, the particular child had the capacity to know that his or her acts or omissions were 'wrong'." From this, their Honours deduced95 that: "the child's personal exemption or immunity from criminal responsibility for his or her acts or omissions which caused the death does not, of itself, exculpate from criminal responsibility any other person to whom s 7(b), s 7(c), s 7(d) or s 8, read with s 268, s 270, s 277, s 279 and s 280, applies". And, more generally, their Honours concluded96 that: "A person who is charged with an offence may or may not be criminally responsible for his or her actual and deemed acts or omissions. However, criminal responsibility is not an element of an offence. The fact that a person has actually done or is deemed to have done all of the acts or made all of the omissions which constitute an offence is separate and distinct from whether the person is criminally responsible for those acts or omissions. The provisions of s 7(a) with respect to an alleged 'principal', and the provisions of s 8 with respect to an alleged 'principal', are concerned with acts or omissions committed by the alleged 'principal', and not with the criminal responsibility of the alleged 'principal' for those acts or omissions." (emphasis added) In dissent, Beech JA reasoned97 to the contrary that, if a person who does an act or makes an omission is not criminally responsible for the act or omission by reason of any of the provisions of Ch V of the Code (WA), the person commits no "offence" within the meaning of s 2; accordingly, that no "offence is committed" within the meaning of ss 7 and 8; and, consequently, that neither of those provisions is engaged. It followed, in his Honour's view98, that the trial judge had erred in failing to direct the jury of the need to be satisfied beyond reasonable doubt of PM's criminal capacity. 95 Birdsall v Western Australia (2019) 54 WAR 418 at 452 [176]. 96 Birdsall v Western Australia (2019) 54 WAR 418 at 452 [177]-[178]. 97 Birdsall v Western Australia (2019) 54 WAR 418 at 487 [395], 492-493 [422]. 98 Birdsall v Western Australia (2019) 54 WAR 418 at 487 [396]. Nettle The common law origins of the Code provisions As Mason, Wilson and Deane JJ indicated in Boughey v The Queen99, a "basic objective of any general codification of the criminal law" is to ensure the accessibility and comprehensibility of the field of law codified for those "obliged to observe the law", as well as those who "participate in its enforcement"100. Such an objective would be frustrated by an inflexible method of construction which involved, in the words of Dixon and Evatt JJ in Brennan v The King101, "finding how the law stood before the Code" and then proceeding "to see if the Code will bear an interpretation which will leave the law unaltered". At the same time, as Windeyer J explained in Vallance v The Queen102, "general provisions" intended to codify "established principles of criminal responsibility" that formed part of a "coherent general system" cannot be interpreted "as if they were written on a tabula rasa, with all that used to be there removed and forgotten". Hence, although it may be that the first duty of the interpreter of a provision of a code is to look to the natural and ordinary meaning of its terms103 β and, if that be clear, the common law will likely prove irrelevant β where, for example, a provision of a code is ambiguous or imports terms to which the common law or statute has assigned a special meaning, there is good reason to seek guidance in the provision's common law or statutory antecedents104. A fortiori, where the interaction between the (1986) 161 CLR 10 at 21. 100 See Bentham, "Letter IV: II Of Completeness, as applied to the Body of the Laws: β and herein of Common Law", in Bentham, Papers Relative to Codification and Public Instruction (1817), supp, 104 at 115; Field, "Codification of the Law", in Sprague (ed), Speeches, Arguments, and Miscellaneous Papers of David Dudley Field (1884), vol 1, 349 at 350, 352; Stephen, "Codification in India and England" (1872) 12 Fortnightly Review (New Series) 644 at 654; Griffith, Draft of a Code of Criminal Law (1897) at iv; cf Austin, Lectures on Jurisprudence or the Philosophy of Positive Law, 5th ed (1885), vol 2 at 653-654. 101 (1936) 55 CLR 253 at 263. 102 (1961) 108 CLR 56 at 75-76, citing Thomas v The King (1937) 59 CLR 279 at 304 103 See and compare Stuart v The Queen (1974) 134 CLR 426 at 437 per Gibbs J; CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408 per Brennan CJ, Dawson, Toohey and Gummow JJ; R v A2 (2019) 93 ALJR 1106 at 1117 [32] per Kiefel CJ and Keane J; 373 ALR 214 at 223. 104 Bank of England v Vagliano Brothers [1891] AC 107 at 145 per Lord Herschell. See also and compare Robinson v Canadian Pacific Railway Co [1892] AC 481 at 487 per Lord Watson for the Board; Stuart (1974) 134 CLR 426 at 437 per Gibbs J; Nettle general provisions of a code turns on the meaning of an ambiguous term of legal art, such as the word "offence" at issue here105, it is not only logical but entirely in accordance with current conceptions of statutory interpretation to look to the common law and the available extrinsic materials as to how much of the common law the code was intended to embrace106. Sections 7 and 8 Sections 7 and 8(1) of the Code (WA) derive from ss 7 and 8 of the Criminal Code contained in Sch 1 to the Criminal Code Act 1899 (Qld) ("the Code (Qld)"), which, in turn, derive from ss 8, 9 and 10 of Sir Samuel Griffith's Draft of a Code of Criminal Law (1897) ("the Draft Code"). Specifically, paras (a), (b) and (c) of s 7 of the Code (WA), and of the Code (Qld) (as enacted), are identical to paras (a), (b) and (c) of s 8 of the Draft Code, which is headed "Principal Offenders"107; the remainder of s 7 of the Code (WA), and of the Code (Qld), is substantially identical to the remainder of s 8 and s 9 of the Draft Code, which is headed "Accessories before the Fact to Offences"108; and s 8(1) of the Code (WA), and s 8 of the Code Sungravure Pty Ltd v Middle East Airlines Airliban SAL (1975) 134 CLR 1 at 22 per Mason J; Boughey (1986) 161 CLR 10 at 30-31 per Brennan J; Mellifont v Attorney-General (Q) (1991) 173 CLR 289 at 309 per Mason CJ, Deane, Dawson, Gaudron and McHugh JJ; Bellino v Australian Broadcasting Corporation (1996) 185 CLR 183 at 220-221 per Dawson, McHugh and Gummow JJ; R v Barlow (1997) 188 CLR 1 at 11-12 per Brennan CJ, Dawson and Toohey JJ, 19 per McHugh J, 31-32 per Kirby J; R v LK (2010) 241 CLR 177 at 220 [97] per Gummow, Hayne, Crennan, Kiefel and Bell JJ. 105 See [109] below. 106 See Director of Public Prosecutions (NT) v WJI (2004) 219 CLR 43 at 50-51 [17]-[19], 53-54 [29]-[31] per Gummow and Hayne JJ. See also Zecevic v Director of Public Prosecutions (Vict) (1987) 162 CLR 645 at 665 per Wilson, Dawson and Toohey JJ, referring to the virtue of consonance between "the common law" and "the law in the code States"; R v Jervis [1993] 1 Qd R 643 at 647 per McPherson A-CJ, referring to use of "decisions given at common law or under comparable statutory provisions" as "practical illustrations of particular problems and of the approach adopted in solving them". 107 Griffith, Draft of a Code of Criminal Law (1897) at 4. 108 Griffith, Draft of a Code of Criminal Law (1897) at 5. Nettle (Qld), equate to s 10 of the Draft Code, which is headed "Offences committed in prosecution of Common Purpose"109. Sections 8, 9 and 10 of the Draft Code were designed to achieve what Sir Samuel Griffith correctly understood to be the "common law"110 of principal and accessorial criminal liability as amended by various nineteenth century statutes. That provenance is common to many provisions in the Draft Code, as Sir Samuel explained in his explanatory letter to the Attorney-General of Queensland which accompanied the Draft Code111: "I have embodied in the Code a good many provisions ... which I believe to be either correct statements of the Common Law or propositions which will commend themselves as rules that, if they are not, ought to be, recognised as the law. ... In accordance with the intention expressed in my letter of 1st June, 1896, the pages are arranged in two columns, the proposed provisions of the Code being printed in the right-hand column, and the sources from which they are derived, or other analogous provisions, being stated or referred to in the left-hand column." And as can be seen from the left-hand column of the Draft Code, the source of ss 8, 9 and 10 of the Draft Code was the "Common Law" as amended by identified statutes β mostly in the reign of Queen Victoria β that relevantly deemed accessories to be liable to punishment as principals112. In the result, the operation 109 Griffith, Draft of a Code of Criminal Law (1897) at 5. 110 But see Gammage v The Queen (1969) 122 CLR 444 at 462 per Windeyer J, noting that "it is misleading to speak glibly of the common law in order to compare and contrast it with a statute", "especially ... when the law of homicide is under discussion". 111 Griffith, Draft of a Code of Criminal Law (1897) at vii, xiv. See Darkan v The Queen (2006) 227 CLR 373 at 386 [38] per Gleeson CJ, Gummow, Heydon and 112 Punishment for Manslaughter Act 1822 (UK) (3 Geo 4 c 38), s 4; Piracy Act 1837 (UK) (7 Wm 4 & 1 Vict c 88), s 4, adopted by Criminal Law Statutes Adoption Act 1838 (NSW) (2 Vict No 10), s 1; Forgery Act 1865 (Qld) (29 Vict No 3), s 52; Coinage Offences Act 1865 (Qld) (29 Vict No 4), s 34; Injuries to Property Act 1865 (Qld) (29 Vict No 5), ss 58, 65; Larceny Act 1865 (Qld) (29 Vict No 6), ss 103, 104; Accessories Act 1865 (Qld) (29 Vict No 7), ss 1, 2, 5, 8; Offences against the Person Act 1865 (Qld) (29 Vict No 11), s 68; Justices Act 1886 (Qld) (50 Vict No 17), s 41. Nettle of ss 7 and 8 of the Code (WA) is significantly informed by common law doctrines of principal and accessorial criminal liability. Under the common law doctrines of principal and accessorial criminal liability, an aider or abettor to felony who was present at the commission of the crime113, and each participant in a joint criminal enterprise114, was a principal to the felony, whereas one who counselled or procured a felony committed in his or her absence was generally an accessory before the fact, and thus only liable to punishment if the principal had been convicted or outlawed115 (until the Victorian- era statutes referred to above116). By way of exception to the latter rule, the common law recognised that, where a person "shall upon malice procure a mad man", or child lacking criminal capacity117, "to kill another, though the mad man", or child, "shall be excused, yet the incitor or procuror shall be punished as a 113 eg Matters of the Crown Happening at Salop (1554) 1 Plow 97 at 97-98 [75 ER 152 at 154-155], contrasting "the ancient law of the realm ... that they, who were present and abetting others to do the act were accessaries, and not principals" with the later recognition that "they are principals to all intents" because their presence "is a terror to him that is assaulted, so that he dare not defend himself"; The Coal-Heavers' Case (1768) 1 Leach 64 at 66 [168 ER 134 at 135]. See Foster, "Discourse III: Of Accomplices in High Treason and Other Capital Offences", in A Report of Some Proceedings on the Commission of Oyer and Terminer and Goal Delivery for the Trial of the Rebels in the Year 1746 in the County of Surry, and of Other Crown Cases, to Which Are Added Discourses upon a Few Branches of the Crown Law (1762), 339 ("Discourse on Accomplices"), ch 1, s 2 at 347-348; Johns (TS) v The Queen (1980) 143 CLR 108 at 117 per Stephen J; Giorgianni v The Queen (1985) 156 CLR 473 at 480 per Gibbs CJ, 493 per Mason J; cf Osland v The Queen (1998) 197 CLR 316 at 342 [71] per McHugh J; IL v The Queen (2017) 262 CLR 268 at 285 [35] per Kiefel CJ, Keane and Edelman JJ. 114 R v Plummer (1701) Kel 109 at 112-113 per Lord Holt CJ [84 ER 1103 at 1105]. See Foster, Discourse on Accomplices, ch 1, s 4 at 350, s 7 at 351-353; McAuliffe v The Queen (1995) 183 CLR 108 at 113-114 per Brennan CJ, Deane, Dawson, 115 See Stephen, A History of the Criminal Law of England (1883), vol 2 at 232-233, describing this notion that "accessorius sequitur naturam principalis sui" as "half scholastic, half derived from the Roman law (a fertile mother of arbitrary rules put forward as self-evident truths)". 116 See Stephen, A History of the Criminal Law of England (1883), vol 2 at 235-237. 117 eg R v Michael (1840) 9 Car & P 356 at 358 per Alderson B [173 ER 867 at 868]; R v Manley (1844) 1 Cox CC 104 per Wightman J. Nettle principall"118, lest the wrongdoing go unpunished119. But that extension of liability β somewhat imprecisely described as "innocent agency"120 β in no way denied the principal liability of aiders and abettors to, and parties to a joint criminal enterprise with, persons who were not criminally responsible121. Chapters XXVI and V Generally speaking, the provisions of Chs XXVI and V of the Code (WA) set out above also derive from provisions of the Code (Qld), and thus the Draft Code, which, in turn, derive from justifications and excuses at common law. As Sir Samuel Griffith explained in the covering letter to the Attorney-General122: "I have attempted to state specifically all the conditions which can operate at Common Law as justification or excuse for acts primΓ’ facie criminal, but have not formally excluded other possible Common Law defences. It is, however, I think, only with reference to assaults and defamation that any possible Common Law defence could be suggested under circumstances not enumerated in the Code. And I venture to think that the provisions of the Code might with safety, and if with safety certainly with advantage, be made exclusive with respect to these offences." The left-hand column and footnotes in the Draft Code acknowledge that some justifications and excuses at common law remained controversial even as at the end of the nineteenth century123. Nevertheless, s 29 of the Code (WA), which 118 Dalton, The Countrey Justice, Containing the Practice of the Justices of the Peace out of their Sessions, 6th ed (1643), c 95 at 298. See also Hale, The History of the Pleas of the Crown (1736), vol 1 at 615, 617. 119 Foster, Discourse on Accomplices, ch 1, s 3 at 349. 120 See White v Ridley (1978) 140 CLR 342 at 353-354 per Stephen J, cf at 346-347 per 121 Insofar as the latter is innocent of wrongdoing, the former is liable as principal in the first degree: R v Tyler (1838) 8 Car & P 616 at 618-619 per Lord Denman CJ [173 ER 643 at 644]; Osland (1998) 197 CLR 316 at 348 [85] per McHugh J. 122 Griffith, Draft of a Code of Criminal Law (1897) at vii. 123 See especially Griffith, Draft of a Code of Criminal Law (1897) at 13 fn 3, commenting that, "perhaps, no branch of the criminal law" had "given rise to more discussion and difference of opinion than the relation of mental infirmity to criminal Nettle (as has been seen) defines the criminal responsibility of children of immature age, is substantially identical to s 31 of the Draft Code (except that the age of complete irresponsibility has been raised and the presumption as to carnal knowledge has been removed124), and the source of s 31 of the Draft Code is denoted in the left- hand column, without qualification, as being the "Common Law". The distinction between justifications and excuses at common law Although sometimes contested, the distinction between justifications and excuses has long been significant to the common law of crimes against the person. As Windeyer J explained in Mamote-Kulang v The Queen125, historically, "[k]illing in the execution of public justice" β including pursuant to a lawful sentence of death126 and, later, to prevent felony127 β "was justifiable, and a ground for an absolute acquittal". By contrast, killing only in self-defence (se defendendo) or by misadventure (per infortunium) was merely excused by royal pardon, eventually granted as of right, but with the killer liable to fine and forfeiture128. With the influence of Roman and ecclesiastical law, this category of misadventure contributed not only to the definitional concept of mens rea, but also to specific excuses such as infancy and madness129. responsibility", the subject of s 29 of the Draft Code and s 27 of the Code (Qld) and the Code (WA). 124 See [84] fn 93 above. 125 (1964) 111 CLR 62 at 78. 126 Bracton on the Laws and Customs of England, Woodbine ed, Thorne tr (1968), vol 2 127 R v Compton (1348) 22 Ass, f 97, pl 55, translated in Kiralfy, A Source Book of English Law (1957) at 27. See Zecevic (1987) 162 CLR 645 at 657-658 per Wilson, 128 See Pollock and Maitland, The History of English Law Before the Time of Edward I, 2nd ed (1898), vol 2 at 479-484. 129 Bracton on the Laws and Customs of England, Woodbine ed, Thorne tr (1968), vol 2 at 384, paraphrasing D 48.8.12 (Modestinus, Rules, bk 8), translated in The Digest of Justinian, Watson tr ed, rev ed (1998), vol 4 at 335. Nettle Over time, judges came to permit, then direct, verdicts of acquittal in cases of excusable homicide130, and, in the course of the nineteenth century, forfeiture was abolished131. Hence, from the point of view of a killer, there has since been no difference in criminal liability at common law between a justification and an excuse: each results in an acquittal. But the distinction remains significant in other respects, inasmuch as justified conduct continues to be regarded as not unlawful, while excused conduct continues to be regarded as unlawful. The point was explained in normative terms by Glanville Williams132, elaborating on the seminal work of George Fletcher133 thus: "A defence is justificatory (for the purpose of the criminal law) whenever it denies the objective wrongness of the act (that is, wrongness apart from matters of excuse). ... Normally a justification is any defence affirming that the act, state of affairs or consequences are, on balance, to be socially approved, or are matters about which society is neutral. Injuring people is socially deplored, and it remains deplored, or at least regretted, even though the actor has the defence of duress, provocation, infancy, insanity, lack of mens rea, or lack of negligence, as the case may be; consequently, these defences are only excuses. In contrast, a lawful arrest by a constable is socially desired, so the defence of lawful arrest is a justification." The consequences of this distinction between various "defences"134 were in turn the subject of Sir John Smith's 1988 Hamlyn Lecture, which acknowledged135 130 Blackstone, Commentaries on the Laws of England, 9th ed (1783), bk 4 at 188. 131 eg Offences against the Person Act 1828 (Eng) (9 Geo IV c 31), s 10; Forfeiture Act 1870 (UK) (33 & 34 Vict c 23). 132 Glanville Williams, "The Theory of Excuses" [1982] Criminal Law Review 732 at 133 Fletcher, Rethinking Criminal Law (1978), ch 10. 134 Of course, to describe justifications and excuses as "defences" is not to deny the "golden thread" of the criminal law stated by Viscount Sankey in Woolmington v The Director of Public Prosecutions [1935] AC 462 at 481-482, that justifications and excuses other than insanity must generally be disproved by the prosecution beyond reasonable doubt. 135 Smith, Justification and Excuse in the Criminal Law (1989) at 19, 27-28. Nettle that, at least in clear cases, "merely excusable conduct may be resisted by a person who is threatened by it", whereas "justifiable conduct may not". In Australia, that proposition has been considered by reference to the statement of Gibbs J in Viro v The Queen136 that "a person cannot rely upon the plea of self-defence unless the violence against which he sought to defend himself was unlawful"; as Brennan J observed in Zecevic v Director of Public Prosecutions (Vict)137, "unlawful" in that context does not "connote the criminal responsibility of the victim for an offence", which may be denied by matters of excuse that do not affect the unlawfulness of the victim's conduct. More pertinently for present purposes, however, the distinction also determines the scope of principal and accessorial liability arising from conduct that is prima facie criminal but subject to a defence. Specifically, because justifiable conduct is not unlawful, a person who aids or abets another in its commission, or who participates in a joint criminal enterprise extending to its commission, or who counsels, procures or commands another to commit it, is not liable to punishment. By contrast, because excusable conduct remains unlawful, a person who aids or abets its commission, or who participates in a joint criminal enterprise extending to its commission, or who counsels, procures or commands another to commit it, is liable to punishment, unless he or she is also excused, even if the other person is an innocent agent138. For example, as self-defence is properly regarded as a justification for this purpose139, a person who aids another to wound in self-defence, or who is a participant in a joint criminal enterprise in the course of which another participant wounds a third person in self-defence, may be entitled to plead that his or her actions in aiding the other person to wound or participating in the joint criminal enterprise that resulted in the wounding were, to that extent, not unlawful, and hence that he or she is not criminally liable for the wounding140. By contrast, as insanity and doli incapax are invariably regarded as excuses, a person who aids or procures a person of unsound mind, or a child lacking in criminal capacity, to 136 (1978) 141 CLR 88 at 116. 137 (1987) 162 CLR 645 at 667; cf R v Lawson and Forsythe [1986] VR 515 at 556 per 138 See [95] above. 139 See and compare Zecevic (1987) 162 CLR 645 at 658 per Wilson, Dawson and Toohey JJ, 666 per Brennan J. 140 See Zecevic (1987) 162 CLR 645 at 667-668 per Brennan J. Nettle wound a third person is not entitled to plead that his or her actions in aiding or procuring the wounding were not unlawful141 (although, of course, he or she might be independently entitled to be excused from criminal responsibility β for example, if he or she were also insane or doli incapax). The proper construction of the Code (WA) Although specific justifications and excuses in Chs XXVI and V of the Code (WA) differ in some respects from their common law antecedents, there is no reason to doubt that the statute maintains the fundamental distinction discussed above142. As Thomas J observed in R v Prow143, in relation to the Code (Qld): "Within the forty sections in [Ch XXVI] there are twenty-eight instances where the formula 'it is lawful for β¦' is used, (ss 247, 248, 249, 254, 256, 257, 258, 259, 260, 261, 262, 263, 264, 265, 266, 267, 270, 271 (first limb), 271 (second limb), 273, 274, 275, 276, 277, 278, 279, 280 and 281); and there are six instances in which the formula 'a person β¦ is not criminally responsible for β¦' is used, (ss 251, 252, 253, 269, 272 and 282). The former may be taken to afford justification and the latter excuse in favour of a person in respect of acts which would otherwise carry criminal liability. The distinction no doubt allows certain consequences to ensue in civil law, but for the purposes of the criminal law it is clear enough that both formulae afford protection of an accused person against criminal liability in respect of the specified acts." (emphasis added) Further, although the consequences of the distinction for civil liability are provided expressly144, it cannot sensibly be supposed that the Criminal Code otherwise assimilates excuses with justifications for all purposes. The point may 141 See Bourne (1952) 36 Cr App R 125 at 128-129 per Goddard LCJ for the Court; R v Cogan [1976] QB 217 at 224 per Lawton LJ for the Court; Matusevich v The Queen (1977) 137 CLR 633 at 638 per Gibbs J; R v Hewitt [1997] 1 VR 301 at 311 per Winneke P; Osland (1998) 197 CLR 316 at 325 [16]-[17] per Gaudron and 142 See and compare CTM v The Queen (2008) 236 CLR 440 at 446 [5] per Gleeson CJ, Gummow, Crennan and Kiefel JJ. 143 [1990] 1 Qd R 64 at 68. 144 See also R v Kaporonowski [1972] Qd R 465 at 512 per Lucas J. Nettle be illustrated by reference to an example in Sir James Fitzjames Stephen's Digest of the Criminal Law145, which was a primary influence on the Draft Code: "A, a madman, violently attacks B in such a manner as to cause instant danger to B's life. B may kill A, though A is not committing any crime." And as Brennan J concluded in Zecevic146, the same result must obtain under laws derived from the Draft Code. Section 268 As has been seen, ss 223 and 268 of the Code (WA) provide that an assault or killing is unlawful "unless" it is "authorised or justified or excused by law". Construed in isolation, those provisions might be thought to have the result that, insofar as A's assault is "excused by law", it is lawful, and thus B's conduct would not lawfully be done in self-defence. Such a result, however, would not only be unreasonable, but also give rise to an inconsistency with the express provision in s 248, which was introduced in accordance with recommendations of the Law Reform Commission of Western Australia147, that "a harmful act is not lawful merely because the person doing it is not criminally responsible for it". One possible way of avoiding that result might be to construe the term "excused by law" as not including circumstances denying criminal responsibility like insanity148. But that construction would ill accord with the conventional description of those circumstances as excuses149, and so ill accord with the history and theory explained above. The preferable solution is to recognise that the concept of unlawfulness in the Code (WA) is not binary150 and thus to construe "unless" as introducing cases "in which an exception to [the] preceding ... statement will or 145 3rd ed (1883) at 138. 146 (1987) 162 CLR 645 at 667-668. 147 Law Reform Commission of Western Australia, Review of the Law of Homicide: Final Report, Project 97 (2007) at 171-172, citing Zecevic (1987) 162 CLR 645 at 663 per Wilson, Dawson and Toohey JJ. 148 See Zecevic (1987) 162 CLR 645 at 668 per Brennan J. 149 eg Pickering v The Queen (2017) 260 CLR 151 at 159 [21] per Kiefel CJ and 150 See and compare R v Dabelstein [1966] Qd R 411 at 415 per Hanger J, 430 per Nettle may exist"151 β with the result that conduct is not absolutely lawful for all purposes merely because it is "authorised ... or excused by law". That accommodates the logicality that, just as an authorisation may be limited in its scope, and thus may authorise conduct only to the extent of the authorisation, an excuse may be limited in its scope, and thus may deny the unlawfulness of an act or omission only to the extent that the person doing the act or making the omission is not himself or herself criminally responsible. So, for example, although an assault or killing by a person aged under ten years is not unlawful to the extent that the child doing the act is not criminally responsible, it remains unlawful to the extent that such violence may lawfully be prevented. More significantly for present purposes, it remains unlawful to the extent that a person who aids or procures the violence is criminally responsible unless he or she is independently excused. Sections 2, 7 and 8 Relying on the reasoning of Beech JA in dissent152, the appellants submitted that, because a person who is not "criminally responsible" is not "liable to punishment as for an offence" under s 1(1) of the Code (WA), an act done or omission made by such a person cannot be "called an offence" under s 2 of the Code (WA). That submission must be rejected. As the plurality in R v Barlow observed153, the word "offence" has various senses in law and ordinary acceptation: it may be used generically "to denote what the law proscribes" or specifically "to denote the facts the existence of which renders an actual offender liable to punishment"; and, when used generically, the term may describe either the entire "concatenation of elements which constitute a particular offence" or "the element of conduct (an act or omission) which attracts criminal liability if it be accompanied by prescribed circumstances or if it causes a prescribed result or if it be engaged in with a prescribed state of mind". Further, as their Honours concluded154, the text and structure of the Code (WA) make it clear that "offence" is used in the latter generic sense in ss 7 and 8, "to denote the element of conduct ... which, if accompanied by prescribed circumstances, or if causing a prescribed 151 Oxford English Dictionary, online, "unless", sense B1a (emphasis added). 152 Birdsall v Western Australia (2019) 54 WAR 418 at 492-493 [422]. 153 (1997) 188 CLR 1 at 9 per Brennan CJ, Dawson and Toohey JJ. 154 Barlow (1997) 188 CLR 1 at 9 per Brennan CJ, Dawson and Toohey JJ (emphasis added). Nettle result or if engaged in with a prescribed state of mind, renders a person engaging in the conduct liable to punishment". It follows that an offence may be committed although the person who actually engaged in the conduct is not liable to punishment because of the absence of prescribed circumstances, a prescribed result or a prescribed state of mind, and thus that an offence may be committed although some person engaging in the conduct would not be liable to punishment because of circumstances denying criminal responsibility irrespective of the person's conduct, such as those in Chs XXVI and V. Hence, where an offence is committed, albeit by a person who is not criminally responsible, ss 7 and 8 of the Code (WA) may operate according to their terms to deem another person liable to punishment except insofar as that other person is not criminally responsible pursuant to Chs XXVI and V155. That conclusion accords with the common law doctrines of principal and accessorial liability, and the common law distinction between justifications and excuses, which the Draft Code was designed to embody. In the result, upon its proper construction: s 7(a) applies, in effect, to a person who actually does the act or makes the omission which comprises the offence, so long as that person is criminally responsible for that act or omission; s 7(b) applies, in effect, to a person who does any act or makes any omission for the purpose of enabling or aiding another person to do an act or make an omission that constitutes an "offence" (regardless of whether the latter person is criminally responsible for that offence), so long as the former person is criminally responsible for the enabling or aiding act or omission; s 7(c) applies, in effect, to a person who aids another person to do an act or make an omission that constitutes an "offence" (regardless of whether the latter person is criminally responsible for that offence), so long as the former person is criminally responsible for the aiding; s 7(d) applies, in effect, to a person who counsels or procures another person to do an act or make an omission that constitutes an "offence" (regardless of whether the latter person is criminally responsible for that offence), so long as the former person is criminally responsible for the act of counselling or procuring; and s 8(1) applies, in effect, to a person who, with one or more other persons, forms a common intention to prosecute an unlawful purpose 155 See Barlow (1997) 188 CLR 1 at 9-10 per Brennan CJ, Dawson and Toohey JJ. Nettle with one another, where in the prosecution of such purpose an "offence" is committed of such a nature that its commission was a probable consequence of the prosecution (regardless of whether the other persons are criminally responsible for that offence), so long as the first-mentioned person is criminally responsible for forming the intention. Conclusion It follows from these reasons that the expression "an offence is committed", where appearing in ss 7 and 8 of the Code (WA), must be taken to include not only an act or omission which renders the actor or omitter liable to criminal punishment β and is, therefore, an "offence" within the meaning of s 2 β but also an act or omission which, but for the actor or omitter being excused of criminal responsibility, would be an "offence" within the meaning of s 2. It follows in turn that, in the circumstances of this matter, it was not incumbent upon the prosecution to negative the possibility that PM was not criminally responsible by reason of s 29 of the Code (WA), and, therefore, that the trial judge did not err in refusing to direct the jury that it was not open to convict any of the appellants or Birdsall unless satisfied beyond reasonable doubt that PM was not the person whose act killed the deceased. The appeals should be dismissed. |
HIGH COURT OF AUSTRALIA TANWAR ENTERPRISES PTY LIMITED APPELLANT AND JOSEPH CAUCHI & ORS RESPONDENTS Tanwar Enterprises Pty Limited v Cauchi [2003] HCA 57 7 October 2003 ORDER Appeal dismissed with costs. On appeal from the Supreme Court of New South Wales Representation: F M Douglas QC with L J W Aitken and R C Scruby for the appellant (instructed by Alexander Lee & Associates) I M Wales SC with M A Ashhurst for the respondents (instructed by Low Doherty & Stratford) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Tanwar Enterprises Pty Limited v Cauchi Vendor and purchaser β Contracts for sale of land β Default by purchaser β Notice of termination β Supplemental deed requiring completion by stipulated date β Time of essence β Default by purchaser β Notice of termination β Purchase price available following day β Specific performance β Whether unconscientious for vendors to exercise right of termination β Whether relief on the ground of "accident" available in face of essential time stipulation. Equity β Relief against forfeiture β Contracts for sale of land β Default by purchaser β Whether unconscientious for vendors to exercise right of termination β Whether default occasioned by "accident" β Whether relief on the ground of "accident" available in face of essential time stipulation. GLEESON CJ, McHUGH, GUMMOW, HAYNE AND HEYDON JJ. This is an appeal from the New South Wales Court of Appeal (Handley and Beazley JJA, Mathews AJA)1. That Court dismissed an appeal by the present appellant ("Tanwar") from orders by a judge in the Equity Division of the Supreme Court (Windeyer J)2 dismissing an application by Tanwar for specific performance of three contracts dated 19 October 1999 under which Tanwar was the purchaser. The subject-matter of the contracts was three adjoining parcels of land at Glenwood near Blacktown. Two of the parcels were owned by one or more of the first, second and third respondents, members of the Cauchi family, and the third by the fourth respondent, Julian Dalley. The vendor under the first contract was Joseph Cauchi. The vendors under the second were Joseph, Angelo and Mary Cauchi. The vendor under the third contract was Julian Dalley. The total purchase price was $4,502,526.90. The history of the litigation The vendors' solicitor issued notices of termination of the contracts on the afternoon of 26 June 2001. The Equity proceedings were instituted on the next day and heard on 2 August. Windeyer J delivered his judgment on 9 August. By its amended summons, Tanwar sought declarations that the three contracts were still on foot and had not been validly terminated and orders for specific performance or, in the alternative, orders for specific performance consequent upon orders for relief against forfeiture of the contracts. An order also was sought, pursuant to s 55(2A) of the Conveyancing Act 1919 (NSW) ("the Conveyancing Act"), for a return to Tanwar of the deposits. The primary judge refused any relief and dismissed the amended summons. Tanwar, by seeking relief against the termination of the contracts with a declaration that the contracts were still on foot, proceeded on the basis that, as a necessary preliminary, it was essential to reinstate the contracts3. In Stern v McArthur4, Gaudron J left that matter open, and it is unnecessary to say any more here respecting it. 1 Tanwar v Cauchi (2003) NSW Conv R ΒΆ56-048. 2 Tanwar Enterprises Pty Ltd v Cauchi (2002) NSW Conv R ΒΆ55-994. cf Latec Investments Ltd v Hotel Terrigal Pty Ltd (in liquidation) (1965) 113 CLR (1988) 165 CLR 489 at 537. The case did not proceed on pleadings. Had there been pleadings, the issues of legal principle with which the Court of Appeal was, and now this Court is, concerned may have more readily appeared. To plead its suit as purchaser for specific performance (and for related declaratory relief), Tanwar would allege the making of each contract and the relevant terms, its performance and its readiness and willingness to perform the terms of the contract then to be performed, and its readiness and willingness to do all matters and things on its part thereafter to be done5. To that, the respondents as vendors no doubt would respond that, in the events that had happened, and before the institution of the suit, the contracts had been brought to an end by the giving of the notices of termination on 26 June, there being contractual stipulations that time was of the essence. It then would be for Tanwar to reply that, in the events that had happened, in equity time had not been of the essence on 26 June or, more precisely, that it was unconscientious of the vendors to plead the essential time stipulation and its breach as founding the purported termination on 26 June6. That would focus attention upon what, as a matter of law and fact, was involved in the alleged unconscientious use by the vendors of their legal rights, given in terms by the contracts, to terminate upon failure by Tanwar to complete by 4.00 pm on 25 June. That is the essential issue in the case as it stands in this Court. The leading judgment in the Court of Appeal was delivered by Handley JA. His Honour gave detailed consideration to the decisions of this Court in Legione v Hateley7 and Stern8 and concluded that those two cases "lack a clear ratio which is binding on this Court". Handley JA also observed, with reference to the decision of the Privy Council in the Hong Kong appeal Union Eagle Ltd v Golden Achievement Ltd9, that it was "also clear that equitable relief will be available in Australia in circumstances where it would be refused in England". In this Court, each side sought support from one or more of the 5 Fitzgerald v Masters (1956) 95 CLR 420 at 434; Green v Sommerville (1979) 141 CLR 594 at 610. cf Spry, The Principles of Equitable Remedies, 6th ed (2001) at 211. (1983) 152 CLR 406. (1988) 165 CLR 489. judgments in Legione and Stern. Neither side sought leave to re-open those cases, but there was a measure of disagreement as to the propositions of law for which they are authority. Before returning to those matters, it is necessary to say something more respecting the facts in this appeal. The contracts The contracts were in the 1996 edition of the Standard Form prepared by the Law Society of New South Wales and the Real Estate Institute of New South Wales. The form was supplemented by further conditions issued by those two bodies in 1998 and by various special conditions agreed by the parties and dealing, in particular, with proposed development of the land. The first and third contracts, those with Mr Cauchi and Mr Dalley, required Tanwar to obtain development consents for an "excision plan", whereby there would be excised from the subject parcel of land in each case a lot to be retained by the vendor. Further, in the case of the first contract, Tanwar was to obtain development consent for the subdivision of the lot to be retained by Mr Cauchi. In addition, with respect to the lots retained by Mr Cauchi and Mr Dalley, Tanwar was obliged to arrange for the provision of services such as water, sewerage and drainage. The vendors retained the same firm of solicitors. The contracts stipulated the same completion date, 28 February 2000, but did not specify that time was of the essence in that regard. The contracts required payment of deposits in each case of some 10 per cent of the purchase price. Each of the contracts provided for the payment of the deposit by three instalments, the last to be paid on 28 February 2000. On 5 November 1999, the contracts were amended by deeds which extended the settlement dates until a date in August 2000. On 18 February 2000, Tanwar obtained development consents under the Environmental Planning and Assessment Act 1979 (NSW) to the excision of the vendor's lots from the first and third contracts, the subdivision of the vendor's lot so retained by Mr Cauchi, and the subdivision of the land to be acquired by Tanwar. Tanwar paid two sums of $225,126.32 on account of the deposits, the first on 19 October 1999 and the second on 30 May 2000. In addition, between 30 June 2000 and 20 July 2000, Tanwar paid a total of $397,473.40 on account of the purchase price. The contracts did not stipulate for payment of the purchase price by instalments and the reason for those payments is not readily apparent. However, it does appear that delays in readying the contracts for completion did occur and the payments on account of the purchase price may have been the result of bargaining between the parties to keep the contracts on foot. At all events, on 20 July 2000 Tanwar also paid a total of $80,000 in consideration of an extension of the completion date. At the trial, it appears not to have been disputed that Tanwar would be entitled in equity to relief against the forfeiture of the $397,473.40 representing part-payment of the purchase price were it to fail to obtain orders for specific performance of the contracts. If Tanwar were to succeed in obtaining specific performance, any question of this forfeiture would cease to be of significance. As indicated above, the essential issue in this case is different. It concerns the alleged unconscientious reliance upon the essential time stipulation to found the termination of the contracts which Tanwar, for its part, wishes to complete. The distinction sought to be made in the last paragraph may be seen in the statement by Gaudron J in Stern10: "The issue raised by a purchaser who seeks specific performance of a contract which has been rescinded is not whether relief should be granted against the forfeiture of the interest arising under that contract, but whether remedy specific notwithstanding rescission." performance available remains Each contract provided that, if either side became entitled to issue a notice to complete making time of the essence, then 14 days was a reasonable and proper time to specify in the notice. On 20 August 2000, the vendors gave Tanwar notices of termination of the contracts, but negotiations between the parties appear to have followed. A significant period later, on 5 June 2001, Tanwar and the respective vendors entered into three deeds ("the 2001 Deeds"). The 2001 Deeds recited entry into the contracts on 19 October 1999, the amending deeds of 5 November 1999 and the notices of termination. Recital D stated that the parties had agreed to complete the sales on the terms and conditions contained in the 2001 Deeds. Clauses 1, 2, 3 and 6 were in identical terms in each of the 2001 Deeds and should be set out in full: The Notice of Termination dated 20th August, 2000 is withdrawn. 10 (1988) 165 CLR 489 at 537. Completion of the sale to take place by 4.00 pm on Monday 25th June, 2001, time of the essence. The Purchaser will pay to the Vendor on completion the moneys as set out in the annexed settlement statement (after making adjustments for outgoings). The Purchaser acknowledges that the contents of this Deed are a final arrangement to complete the sale of the Property. If the Purchaser does not complete the sale in accordance with the provisions of this Deed the Purchaser will: forfeit all moneys paid pursuant to the Contract for Sale and acknowledges the Vendor's rights under clause 9 of the Contract for Sale; (b) withdraw any caveat against the property; not commence any Court proceedings to dispute the Vendor's termination of the Contract for Sale." The rights under cl 9 were stated to arise if the purchaser did not comply with the contract "in an essential respect". They included termination by serving a notice and thereafter, among other things, keeping the deposit to a maximum of 10 per cent of the price, recovering damages for breach of contract and holding part-payments as security for anything recoverable by the vendors under cl 9. Clause 9 read: "Purchaser's default If the purchaser does not comply with this contract (or a notice under or relating to it) in an essential respect, the vendor can terminate by serving a notice and after the termination β keep or recover the deposit (to a maximum of 10% of the price); hold any other money paid by the purchaser under this contract as security for anything recoverable under this clause β for 12 months after the termination; or if the vendor commences proceedings under this clause within 12 months, until those proceedings are concluded; and sue the purchaser either β 9.3.1 where the vendor has resold the property under a contract made within 12 months after the termination, to recover β the deficiency on resale (with credit for any of the deposit kept or recovered and after allowance for any capital gains tax payable on anything recovered under this clause); and the reasonable costs and expenses arising out of the purchaser's non-compliance with this contract or the notice and of resale and any attempted resale; or to recover damages for breach of contract." Failure to settle The parties agreed to settle at the Office of State Revenue on the afternoon of the last day available, Monday, 25 June 2001. Tanwar's sources of finance included foreign sourced funds to be provided by second mortgagees. Mr Cormack, of Corrs Chambers Westgarth, acted for those second mortgagees. He attended at the settlement meeting and informed the parties that his clients were unable then to proceed. Earlier on 25 June, Mr Cormack had become aware that the Singapore authorities were conducting additional checks on certain international money transfers; hence the delay. However, he told those present that the funds should be available on the next day. That came to pass and, on 26 June, the funds were received from Singapore into a trust account conducted by Mr Cormack's firm. On that morning, Tanwar's solicitor informed the vendors' solicitor of this and that settlement could proceed. However, the vendors already had given instructions to terminate the contracts and confirmed those instructions when informed that the second mortgagees were now in a position to proceed to settlement. Thereafter, on the afternoon of 26 June, notices of termination were issued. The essential issue It now is convenient to return to the essential issue identified earlier in these reasons. Wherein lies the alleged unconscientious use by the vendors of their legal right to terminate upon failure by Tanwar to complete in accordance with the essential time stipulation imposed by the 2001 Deeds? Unconscionable conduct The terms "unconscientious" and "unconscionable" are, as was emphasised in Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd11, used across a broad range of the equity jurisdiction. They describe in their various applications the formation and instruction of conscience by reference to well developed principles. Thus, it may be said that breaches of trust and abuses of fiduciary position manifest unconscientious conduct; but whether a particular case amounts to a breach of trust or abuse of fiduciary duty is determined by reference to well developed principles, both specific and flexible in character. It is to those principles that the court has first regard rather than entering into the case at that higher level of abstraction involved in notions of unconscientious conduct in some loose sense where all principles are at large. The term "unconscionable conduct" is used in authorities such as Legione and Stern. There is nothing new in this. The terms "unconscionable" and "against conscience" were, for example, used without distinction by Farwell J in Mussen v Van Diemen's Land Co12 in 1937. However, as Deane J explained in The Commonwealth v Verwayen13, with reference to the discussion by Story14 of the lien of the unpaid vendor, the term "unconscionable" is used to refer to that which "ought not, in conscience," be allowed as between the parties; the purchaser, having taken a conveyance of the estate of the vendor, should not be 11 (2003) 77 ALJR 926 at 933-934 [42]-[43]; 197 ALR 153 at 164. 12 [1938] Ch 253 at 262-263. 13 (1990) 170 CLR 394 at 440-441. See also Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 at 227 [45]; Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (2003) 77 ALJR 926 at 933 [41]; 197 ALR 153 at 164. 14 Commentaries on Equity Jurisprudence, 2nd Eng ed (1892), Β§1219. allowed to keep it without payment of the full purchase price. Hence, as Deane J also pointed out15, "unconscientious" is the more accurate term. In the present case, that more accurate term directs attention to the question why the vendors ought not to be heard to assert the exercise of their legal right to terminate in answer to the claim by Tanwar for specific performance. The conscience of the vendors which equity seeks to relieve is, as Gleeson CJ put it in Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd16, a "properly formed and instructed conscience". In Guise v Kouvelis17, when considering the defence of qualified privilege in defamation law, Dixon J lamented the lot of the judge called upon to apply 'flexible' categories or tests of responsibility or immunity". "'broad' or Nevertheless, as this Court emphasised in the judgment in Jenyns v Public Curator (Q)18, to which Dixon CJ was a party, the application of equitable doctrines and remedies may turn upon close analysis of the facts of the particular case. Cases of alleged undue influence and catching bargains are obvious examples; that is because the governing equitable principle in this field is concerned with the production by malign means of an intention to act. In that context, it is easy to speak of the conduct of the stronger party as unconscionable. But the phrase "unconscionable conduct" tends to mislead in several respects. First, it encourages the false notions that (i) there is a distinct cause of action, akin to an equitable tort, wherever a plaintiff points to conduct which merits the epithet "unconscionable"; and (ii) there is an equitable defence to the assertion of any legal right, whether by action to recover a debt or damages in tort or for breach of contract, where in the circumstances it has become unconscionable for the plaintiff to rely on that legal right19. 15 (1990) 170 CLR 394 at 444. 16 (2001) 208 CLR 199 at 227 [45]. 17 (1947) 74 CLR 102 at 116. 18 (1953) 90 CLR 113 at 119 per Dixon CJ, McTiernan and Kitto JJ. 19 cf Kalamazoo (Aust) Pty Ltd v Compact Business Systems Pty Ltd [1990] 1 Qd R Secondly, and conversely, to speak of "unconscionable conduct" as if it were all that need be shown may suggest that it is all that can be shown and so covers the field of equitable interest and concern. Yet legal rights may be acquired by conduct which pricks no conscience at the time. A misrepresentation may be wholly innocent. However, at the time of attempted enforcement, it then may be unconscientious to rely upon the legal rights so acquired. To insist upon a contract obtained by a misrepresentation now known to be false is, as Sir George Jessel MR put it in Redgrave v Hurd20, "a moral delinquency" in a court of equity. Thirdly, as a corollary to the first proposition, to speak of "unconscionable conduct" may, wrongly, suggest that sufficient foundation for the existence of the necessary "equity" to interfere in relationships established by, for example, the law of contract, is supplied by an element of hardship or unfairness in the terms of the transaction in question, or in the manner of its performance. The vendors contend that the thrust of the submissions by Tanwar reveals this weakness in its case. Legione In submissions, extensive reference was made to the decision in Legione21. That case made it plain that the principles identified as promissory or equitable estoppel may operate to preclude the enforcement of contractual rights and so may estop a party from treating the contract in question as terminated for failure to meet an essential time stipulation. The division of opinion within the Court turned upon the question whether a particular telephone conversation was sufficient to found the necessary estoppel; in particular, whether the conversation contained a representation of the necessary clarity to the effect that observance of the time stipulation was not insisted upon. The majority (Mason, Brennan and Deane JJ) held that the terms of the conversation did not meet the necessary standard. The facts of the present appeal supply no foundation for an estoppel against reliance by the vendors upon the essential time stipulation in the 2001 Deeds. 20 (1881) 20 Ch D 1 at 12-13. 21 (1983) 152 CLR 406. In Legione22, the Court also received written submissions upon a further question. This was identified as being whether the purchasers should be relieved against "the forfeiture" brought about by the notice of rescission. Pursuant to the contract, the purchasers had been entitled to go into possession on payment of the deposit. They had done so and had built a house on the land before the due date for completion which was nearly 12 months after the date of the contract. The "forfeiture point" had not been pursued to any degree at the trial in Legione and the order made by this Court was that the case be remitted to the Supreme Court of Victoria for the determination of that issue23. The conclusion reached by Mason and Deane JJ had been that the Supreme Court had the necessary jurisdiction to relieve against forfeiture and that there was a serious question to be tried in the exercise of that jurisdiction24. Gibbs CJ and Murphy J concurred in the order giving effect to that conclusion25. Brennan J dissented. Subsequently, in the joint judgment of five members of the Court in Ciavarella v Balmer26, it was held that there was no evidence to found any estoppel against termination of the contract for sale of land. An application to amend the notice of appeal in this Court so as to claim relief against forfeiture was refused27. The Court described as follows the circumstances which had led to the order of remittal in Legione28: "[T]he material in evidence strongly indicated unconscionable conduct on the part of the vendor in seeking to insist on the rescission of the contract in circumstances where the statement of the vendor's solicitors had helped lull the purchaser into a belief that the vendor would accept completion provided it took place within a few days and where the consequence of 22 (1983) 152 CLR 406 at 411. 23 (1983) 152 CLR 406 at 459. 24 (1983) 152 CLR 406 at 450. 25 (1983) 152 CLR 406 at 429-430. 26 (1983) 153 CLR 438 at 449-450. 27 (1983) 153 CLR 438 at 453-454. 28 (1983) 153 CLR 438 at 453. rescission was that the vendor would reap the benefit of the very valuable improvements which the purchaser had effected to the property." In the present appeal, there is nothing to suggest that the vendors lulled Tanwar into any relevant false sense of security. To the contrary, the terms of the 2001 Deeds strikingly demonstrated an attitude by the vendors which would keep Tanwar on edge. What then remains to support any case of unconscientious reliance by the vendors upon their legal right to terminate? It is convenient at this stage to consider the decision in Stern. Stern The dispute concerned an instalment contract made in 1969 under which the last instalment would be paid in 1983. Time was made of the essence, after various vicissitudes, by notice given in 1979. Completion did not take place when specified and, in response to an action for an order for possession, the purchasers cross-claimed for specific performance and relief against forfeiture of their estate and interest in the land. By majority (Deane, Dawson and Gaudron JJ), the Court upheld the order of the New South Wales Court of Appeal29. This ordered relief against forfeiture and specific performance on terms including an inquiry as to the balance of the purchase money still owing and the interest to be payable thereon. Deane and Dawson JJ said that "the contract as it was carried into effect was essentially an arrangement whereby the appellants undertook to finance the respondents' purchase upon the security of the land" so that "there was a close and obvious parallel between it and a purchase with the aid of a mortgage"30. The contracts between Tanwar and the vendors do not share that characteristic. Gaudron J, the third member of the majority in Stern, doubted whether the instalment contract there in question was in substance part of a security transaction31. Her Honour decided the appeal on a wider footing. This was that a 29 McArthur v Stern (1986) 5 NSWLR 538 at 558. 30 (1988) 165 CLR 489 at 528. 31 (1988) 165 CLR 489 at 540; cf Union Eagle Ltd v Golden Achievement Ltd [1997] AC 514 at 522. decree of specific performance would secure all that the vendors had bargained for, whereas to deny that remedy would prejudice the purchasers. A house had been built on the land, the land had increased in value and the balance unpaid was a relatively insignificant amount32. These circumstances, to which the vendors had not contributed, made it unconscionable for the vendors to insist on their contractual rights. On the other hand, Mason CJ (in the minority as to the outcome) stressed that this was not a case like Legione where the conduct of the vendors had led to, caused, or contributed to, the breach of contract by the purchasers33. At bottom, the case put by Tanwar depends upon acceptance of the view of the equity jurisdiction taken by Gaudron J at the expense of that preferred by Mason CJ. The view of Mason CJ should be accepted. In Legione, Mason and Deane JJ instanced "fraud, mistake, accident, [and] surprise" as elements which may make it inequitable to insist on termination of a contract for failure to observe its strict terms34. Subsequently, in Stern35, Mason CJ took Legione and Ciavarella as establishing that the court will not readily relieve against loss of a contract for sale validly rescinded by the vendor for breach of an essential condition; and, in particular, equity was not authorised "to reshape contractual relations into a form the court thinks more reasonable or fair where subsequent events have rendered one side's situation more favourable"36. That latter proposition is at odds with the approach by Gaudron J in Stern, to which reference has been made earlier in these reasons at [35], but, nevertheless, it should be accepted as an accurate statement of the law. The result, as indicated above, is that Tanwar's case on the appeal is significantly weakened. 32 (1988) 165 CLR 489 at 540-541. 33 (1988) 165 CLR 489 at 503-504. 34 (1983) 152 CLR 406 at 447-448. 35 (1988) 165 CLR 489 at 502-503. 36 (1988) 165 CLR 489 at 503. Mason CJ dissented as to the outcome in Stern, but this was to a significant degree because of the view he took of the nature of the particular contract in question and the denial of an analogy drawn, particularly by Deane and Dawson JJ37, to a mortgage transaction. To the extent that what Mason CJ said in Stern represented a development (or, perhaps, a contraction) of what had been put in the earlier cases, then it is to be preferred. In Stern38, Mason CJ also stated that equity intervenes only where the vendor has, by the vendor's conduct, caused or contributed to a circumstance rendering it unconscionable for the vendor to insist upon its legal rights. That helps explain why mere supervening events and changes in the relevant circumstances are insufficient. But it should be noted that cases falling within the heads of mistake or accident will not necessarily be the result of activity by the vendor. In addition, his Honour spoke in Stern39 of the circumstances being "exceptional" to attract equitable intervention. That also emphasised the insufficiency of subsequent events which are adverse to the interests of one side. However, the term "exceptional" is apt to be misunderstood, and it will be necessary to return to it later in these reasons under the heading "The present appeal". Subsidiary questions? In Legione, Mason and Deane JJ had concluded their analysis of what they saw as the relevant principles by saying as follows40: "In the ultimate analysis the result in a given case will depend upon the resolution of subsidiary questions which inevitably arise. The more important of these are: (1) Did the conduct of the vendor contribute to the purchaser's breach? (2) Was the purchaser's breach (a) trivial or slight, and (b) inadvertent and not wilful? (3) What damage or other adverse consequences did the vendor suffer by reason of the purchaser's breach? (4) What is the magnitude of the purchaser's loss and the vendor's gain if 37 (1988) 165 CLR 489 at 528. 38 (1988) 165 CLR 489 at 502-503. 39 (1988) 165 CLR 489 at 502-503. 40 (1983) 152 CLR 406 at 449. the forfeiture is to stand? (5) Is specific performance with or without compensation an adequate safeguard for the vendor?" Tanwar relies upon those five "subsidiary questions". It accepts that the first question should be answered unfavourably because the conduct of the vendors did not contribute to Tanwar's breach. However, Tanwar says that its breach was trivial or slight, or inadvertent, that the vendors have suffered but nominal damage and no adverse consequences, that specific performance would be an adequate safeguard for the interests of the vendors, and that the vendors stood to gain the advantages flowing from the expenditure by Tanwar in obtaining the development approvals, together with the increase in value of the land which apparently occurred between the date of the contracts and the termination. With respect to the third, fourth and fifth "subsidiary questions" posed in Legione by Mason and Deane JJ, the vendors respond that Tanwar entered into arrangements with the proposed second mortgagees dependent upon the arrival of funds from Singapore on the last day when settlement was required under the 2001 Deeds, and that notions of trivial or inadvertent breach must be considered in that light. With respect to the alleged increase in value, the vendors, correctly, emphasise that the first of the comparative dates is not 19 October 1999, but 5 June 2001, the date of the 2001 Deeds. This postdated the obtaining of the development approvals on 18 February 2000. In any event, there had been no valuation evidence to found any specific finding respecting increase in value due to those consents or to other market forces. No such finding had been made. However, it was accepted that the benefit of the approvals would, with termination, accrue to the vendors. But that was an inevitable outcome bargained for when the 2001 Deeds had been negotiated. The "interest" of Tanwar The vendors also challenge treating as determinative of Tanwar's appeal these five "subsidiary questions". The vendors are correct in doing so. the doctrinal basis for What was said by Mason and Deane JJ in Legione respecting the "subsidiary questions" must be treated with care. That to which the questions are said to be "subsidiary" is the basic issue presented earlier in their joint judgment. This is expressed as41: 41 (1983) 152 CLR 406 at 440. "the respondent's submission that she is entitled to relief against the forfeiture of her interest in the land upon terms that she pay to the appellants the amount of $30,188.24 that was tendered to them on 15 August 1979 and not accepted, being the balance of the purchase moneys under the contract". (emphasis added) But what, if any, was the interest in the land enjoyed by Tanwar as purchaser? If there was such an interest, did it attract the exercise of the jurisdiction to relieve against forfeiture? What is the relationship between, on the one hand, the attitude of equity respecting forfeiture, and, on the other hand, the attitude of equity respecting the observance of express time stipulations? Without answers to these questions, the significance for this appeal of the basic issue expressed in Legione, and thus the relevance of the five "subsidiary questions", cannot be assessed. But the answers are to be supplied only by a patient examination of several fundamentals, the understanding of which by equity courts has changed across time. One commences by identifying the "interest" of a purchaser in the land the subject of an uncompleted contract. In Lysaght v Edwards42, Sir George Jessel MR described the position of the vendor at the moment of entry into a contract of sale as "something between" a bare trustee for the purchaser and a mortgagee who in equity is entitled to possession of the land and a charge upon it for the purchase money; in particular, the vendor had the right in equity to say to the purchaser "[e]ither pay me the purchase-money, or lose the estate". This way of looking at the relationship in equity between vendor and purchaser before completion appeared also in the works of eminent writers of the period in which the Master of the Rolls spoke43. Later, Kitto J44 and Brennan J45 preferred to treat what was said in Lysaght as indicating that "to an extent" the purchaser acquired the beneficial ownership upon entry into the contract. 42 (1876) 2 Ch D 499 at 506. 43 Maitland, Equity, 2nd ed rev (1936) at 314-315; Pomeroy, A Treatise on the Specific Performance of Contracts, (1879), §§315, 322, 389; Williams and Lightwood, A Treatise on the Law of Vendor and Purchaser of Real Estate and Chattels Real, 4th ed (1936), vol 1 at 59-60. 44 Haque v Haque [No 2] (1965) 114 CLR 98 at 124. 45 KLDE Pty Ltd v Commissioner of Stamp Duties (Q) (1984) 155 CLR 288 at 301. This analogical reasoning in turn suggested (i) the purchaser had before completion an equitable estate in the land which would be protected against loss consequent upon termination of the contract by the principles developed in equity for relief against forfeiture and (ii) in the same way as failure to redeem a mortgage upon the covenanted date for repayment did not destroy the equity of redemption without the proper exercise of a power of sale46 or a foreclosure suit in equity47, failure to complete the contract on the due date did not bar the intervention of equity to order specific performance. But what, on this way of looking at the matter, was the significance of a contractual stipulation specifying a date for completion as essential? The treatment by the English equity judges of this subject developed in the course of the nineteenth century, as Justice Lindgren has detailed in his extrajudicial writing on the subject48. While Lord Thurlow would have pushed the mortgage analogy to the extreme that a time stipulation in equity could never be essential unless there was something in the nature of the subject-matter of the contract, such as its fluctuating or depreciating value49, to give it that quality, his view was doubted by Lord Eldon in Seton v Slade50 and rejected by Sir Lloyd Kenyon MR in Mackreth v Marlar51. If the express contractual stipulation fixing time as an essential matter was not to be disregarded, how did that attitude stand with the analogy drawn from the relief against forfeiture cases? The answer given by Pomeroy52, with 46 Latec Investments Ltd v Hotel Terrigal Pty Ltd (in liquidation) (1965) 113 CLR 47 Maitland, Equity, 2nd ed rev (1936) at 182-183. 48 Time in the Performance of Contracts, 2nd ed (1982), [210]-[222]. 49 Hanbury, Modern Equity, 8th ed (1962) at 85-86. 50 (1802) 7 Ves Jun 265 [32 ER 108]. See also Pomeroy, A Treatise on the Specific Performance of Contracts, (1879), Β§389. 51 (1786) 1 Cox 259 [29 ER 1156]. 52 A Treatise on the Specific Performance of Contracts, (1879), Β§391. reference to In re Dagenham (Thames) Dock Co, Ex parte Hulse53, was that equity would relieve the purchaser from the operation of an essential time stipulation, "and from the forfeiture", if the provision was inserted as a penalty to secure completion of the contract at the purchaser's risk of loss of the equitable interest in the land under the executory contract. That reasoning, together with the authority of Dagenham, was relied upon in the majority judgments in Legione54. What the Court of Appeal in Chancery decided in Dagenham, and on what facts and grounds, is not fully apparent from the abbreviated report55. But it must be remembered that in Dagenham there had been forfeiture of a payment of half the purchase price, so that it was not surprising that the forfeiture was treated as penal56. It should be added that, in Dagenham, as in Stern and other instalment contract cases, there would have existed an equitable lien securing for the purchaser the payments so made57. It has been held in this Court that the lien may be enforceable even though there may be a good defence to a claim to specific performance of the contract58. It is the payment and retention of the moneys, not the availability of specific performance, which is critical59. But there remains the question, unnecessary to decide here, whether the lien of the purchaser necessarily is lost upon termination of the contract for breach by the purchaser of an essential time stipulation60. 53 (1873) LR 8 Ch App 1022. 54 (1983) 152 CLR 406 at 426, 441. 55 See Harpum, "Relief Against Forfeiture and the Purchaser of Land", (1984) Cambridge Law Journal 134 at 147-148. 56 Lang, "Forfeiture of Interests in Land", (1984) 100 Law Quarterly Review 427 at 57 Hewett v Court (1983) 149 CLR 639 at 663-664. 58 Hewett v Court (1983) 149 CLR 639 at 650, 664. 59 Rose v Watson (1864) 33 LJ Ch (NS) 385 at 389-390. 60 Harpum, "Relief Against Forfeiture and the Purchaser of Land", (1984) Cambridge Law Journal 134 at 139. At all events, the analogies drawn over a century ago in Lysaght61 with the trust and the mortgage are no longer accepted. Jacobs J observed in Chang v Registrar of Titles62 that: "[w]here there are rights outstanding on both sides, the description of the vendor as a trustee tends to conceal the essentially contractual relationship which, rather than the relationship of trustee and beneficiary, governs the rights and duties of the respective parties." Subsequently, in Kern Corporation Ltd v Walter Reid Trading Pty Ltd, Deane J said63: "[I]t is both inaccurate and misleading to speak of the unpaid vendor under an uncompleted contract as a trustee for the purchaser". In Stern, Gaudron J points out64, consistently with authority in this Court65, that the "interest" of the purchaser is commensurate with the availability of specific performance. That availability is the very question in issue where there has been a termination by the vendor for failure to complete as required by the essential stipulation. Reliance upon the "interest" therefore does not assist; it is bedevilled by circularity. There is the further point subsequently made by Lord Hoffmann in Union Eagle concerning the adaptation here of the principles respecting penalty and forfeiture, even allowing the existence of a pre-completion equitable interest in 61 (1876) 2 Ch D 499 at 506. 62 (1976) 137 CLR 177 at 190. 63 (1987) 163 CLR 164 at 192. 64 (1988) 165 CLR 489 at 537. 65 Brown v Heffer (1967) 116 CLR 344 at 349; Legione v Hateley (1983) 152 CLR 406 at 456-457; Bahr v Nicolay [No 2] (1988) 164 CLR 604 at 612, 645-646. See also the warning by Stamp LJ in Berkley v Poulett [1977] 1 Estates Gazette Law Reports 86 at 93 against error caused by putting "the cart before the horse", to which Austin J referred in Chief Commissioner of Stamp Duties v Paliflex Pty Ltd (1999) 47 NSWLR 382 at 390. the land. His Lordship distinguished66 the well established67 jurisdiction in equity to relieve against forfeiture of part-payments and amounts in excess of a "reasonable deposit", matters not involved in Tanwar's appeal to this Court. He then proceeded68: "But the right to rescind the contract, though it involves termination of the purchaser's equitable interest, stands upon a rather different footing. Its purpose is, upon breach of an essential term, to restore to the vendor his freedom to deal with his land as he pleases. In a rising market, such a right may be valuable but volatile. Their Lordships think that in such circumstances a vendor should be able to know with reasonable certainty whether he may resell the land or not." The five "subsidiary questions" stated by Mason and Deane JJ in Legione69, and set out above, reflect the treatment by Lord Wilberforce in Shiloh Spinners Ltd v Harding70 (a lease case) of the "appropriate" considerations guiding the exercise of equity's jurisdiction to relieve against forfeiture for breach of covenants added by way of security for the production of a stated result. His "The word 'appropriate' involves consideration of the conduct of the applicant for relief, in particular whether his default was wilful, of the gravity of the breaches, and of the disparity between the value of the property of which forfeiture is claimed as compared with the damage caused by the breach." However, the end sought to be protected, on the analysis by Mason and Deane JJ in Legione, was the interest of the purchaser in the land. That 66 [1997] AC 514 at 520. 67 McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457; Pitt v Curotta (1931) 31 SR (NSW) 477. 68 [1997] AC 514 at 520. 69 (1983) 152 CLR 406 at 449. 71 [1973] AC 691 at 723-724. "interest", being for its existence dependent upon the administration of the very remedy in issue, does not suffice. Perhaps aware of the difficulty involved, Mason and Deane JJ went on in Legione72, as later did Deane and Dawson JJ in Stern73, to say there was much to commend what they said was a competing view of Sir Frederick Jordan. In Ch V of his Chapters on Equity in New South Wales, and in the course of dealing with equitable assignments for valuable consideration, and the transfer of the equitable title to the assignee, Sir Frederick Jordan said74: "This result is to be ascribed to the maxim that equity considers that done which ought to be done; and the principle is effective only in so far as the Court of Equity would, in all the circumstances of the case, grant specific performance of the agreement". He added, somewhat obscurely, in a footnote75: this sense means not merely specific "Specific performance performance in the primary sense of the enforcing of an executory contract by compelling the execution of an assurance to complete it, but also the protection by injunction or otherwise of rights acquired under a contract which defines the rights of the parties". (emphasis added) In the New South Wales Court of Appeal76, doubt since has been cast upon the support for any such general principle by the authorities cited by Sir Frederick Jordan, beginning with Tailby v Official Receiver77. It is sufficient for present purposes to observe that, where the issue, as in Tanwar's appeal, 72 (1983) 152 CLR 406 at 446. 73 (1988) 165 CLR 489 at 522. See also Hewett v Court (1983) 149 CLR 639 at 665; KLDE Pty Ltd v Commissioner of Stamp Duties (Q) (1984) 155 CLR 288 at 297; Chan v Cresdon Pty Ltd (1989) 168 CLR 242 at 253. 74 6th ed (1947) at 52 (footnote omitted). 75 6th ed (1947) at 52, fn (e). 76 Chief Commissioner of Stamp Duties v ISPT Pty Ltd (1998) 45 NSWLR 639 at 77 (1888) 13 App Cas 523 at 547-549. concerns alleged unconscientious reliance by vendors upon their contractual right to terminate, it does not assist to found the equity of the purchaser upon the protection of rights to injunctive relief acquired under a contract the termination of which has taken place. Whilst the contracts here were on foot, breach thereof by the vendors would have been restrained. But there was no relevant breach of contract by the vendors, and the contracts were terminated in exercise of a contractual right to do so. The present appeal What Lord Wilberforce in Shiloh Spinners called "the special heads of fraud, accident, mistake or surprise"78 identify in a broad sense the circumstances making it inequitable for the vendors to rely upon their termination of Tanwar's contracts as an answer to its claim for specific performance. No doubt the decided cases in which the operation of these "special heads" is considered do not disclose exhaustively this equitable intervention. But, at least where accident and mistake are not involved, it will be necessary to point to the conduct of the vendor as having in some significant respect caused or contributed to the breach of the essential time stipulation. Tanwar's situation falls beyond that pale. The statement by Mason CJ in Stern79 respecting the insignificance of subsequent events for which the vendors were in no way responsible is fatal to the main thrust of Tanwar's case. the circumstances which merit It should be made clear that what is said above does not support any proposition that the circumstances must be "exceptional" before equity intervenes. In their joint judgment in Stern80, Deane and Dawson JJ, with reference to what had been said by Mason and Deane JJ in Legione81, said, in a passage which puts the point of present significance: "Mason and Deane JJ were not saying that there must be unconscionable conduct of an exceptional kind before a case for relief can be made out. Rather, what was being said was that a court will be reluctant to interfere with the contractual rights of parties who have chosen to make time of the 78 [1973] AC 691 at 723. 79 (1988) 165 CLR 489 at 502-503. 80 (1988) 165 CLR 489 at 526. 81 (1983) 152 CLR 406 at 449. essence of the contract. The circumstances must be such as to make it plain that it is necessary to intervene to avoid injustice or, what is the same thing, to relieve against unconscionable β or, more accurately, unconscientious β conduct." Thus, it remains for Tanwar to show that it is against conscience for the vendors to set up the termination of the contracts. In the present appeal, as already has been indicated, there was no representation by the vendors which could found any estoppel. Nor has Tanwar asserted that there was any mistake in any relevant sense. In Ciavarella82, the order for remittal made in Legione was seen to have been made on the footing that there were already in the evidence indications that the vendors in Legione had helped to lull the purchasers into the belief that they would accept completion provided it occurred within a few days. To relieve in those circumstances would be an exercise of the jurisdiction with respect to "surprise". That, as remarked earlier in these reasons, cannot be asserted in the present case. The second matter which Mason and Deane JJ emphasised in Legione was the possibility that a case might be made out in the Supreme Court that the vendors were seeking to reap the benefits of the very valuable improvements to the property which the purchasers had effected whilst in possession under the contract83. It is not clear from their Honours' remarks whether the reaping of the benefit of the improvements as a consequence of termination of itself would be sufficient to deny insistence by the vendors upon their rescission. It is not readily apparent how that circumstance alone could be sufficient. The contract in Legione had permitted the purchasers to enter into possession and any improvements they then made were at risk of the operation of the contractual provisions for termination. Accident In its extremity, Tanwar then founds upon the jurisdiction to relieve against the consequences of "accident". 82 (1983) 153 CLR 438 at 453. 83 (1983) 152 CLR 406 at 449; Ciavarella v Balmer (1983) 153 CLR 438 at 453. In Legione84, Mason and Deane JJ referred to authorities disputing the treatment of cases of relief against penalties and forfeitures as instances of relief against accident. The jurisdiction with respect to accident was recognised at a time before the development of any settled body of equitable principles. The point is well made by Professors Keeton and Sheridan85: "'Accident' was a vague term which covered many situations, in their nature unforeseen, and it could, in particular situations, shade off into fraud. The law of mistake, particularly in relation to contracts and conveyances, is included under this head, and it led in turn to the development of the equitable rules governing the rectification of contracts and other instruments, and the rescission of documents of all kinds." What then remains as the subject-matter of accident in modern equity? In Baird v BCE Holdings Pty Ltd86, Young J referred to various writings on the subject which distinguish mistake as supposing an operation of the will of the agent in producing the event, albeit by reason of erroneous impressions on the mind. Spence, writing in 1846, said that the kinds of accidents or cases of extremity which might be relieved against were only to be ascertained from an examination of the cases87. He instanced forfeiture and penalties. Other instances include the accidental diminution of assets in the hands of an executor, lost evidence and the defective execution of powers of appointment88, all far from the present case. However, the learned writers on the subject emphasise and put to one side those situations where the event which has come to pass is one for which an express exculpatory provision might have been made, but was not sought or was not agreed to, and where to relieve against its consequences after it has occurred would deprive the other party to the contract of an essential right89. In particular, 84 (1983) 152 CLR 406 at 444. 85 Equity, 3rd ed (1987) at 38. 86 (1996) 40 NSWLR 374 at 385-386. 87 The Equitable Jurisdiction of the Court of Chancery, (1846), vol 1 at 628. 88 Snell's Equity, 30th ed (2000) at 603-606. 89 Bispham, The Principles of Equity, 6th ed (1903), §§175, 176; Merwin, The Principles of Equity and Equity Pleading, (1895), Β§419. equity will not relieve where "the possibility of the accident may fairly be considered to have been within the contemplation of the contracting parties"90. Story wrote91: "And this leads us naturally to the consideration of those cases of accident in which no relief will be granted by Courts of Equity. In the first place, in matters of positive contract and obligation created by the party (for it is different in obligations or duties created by law), it is no ground for the interference of equity that the party has been prevented from fulfilling them by accident, or that he has been in no default, or that he has been prevented by accident from deriving the full benefit of the contract on his own side. ... The reason is, that he might have provided for such contingencies by his contract if he had so chosen; and the law will presume an intentional general liability where he has made no exception." (footnotes omitted) It is here that the circumstances leading up to, and the terms of, the 2001 Deeds are of critical importance. The vendors withdrew the earlier notices of termination in return for the assumption by Tanwar of obligations to complete couched in unqualified terms. The obligation in the 2001 Deeds to settle by the stipulated time was not made subject to the availability of Tanwar's finance on that day. That there might be a failure by a third party to provide the finance was reasonably within the contemplation of Tanwar. The failure by Tanwar to avail itself of the advantages it obtained by negotiating the 2001 Deeds and by keeping the contracts on foot had the effect of exposing Tanwar again to the exercise by the vendors of their rights to terminate the contracts92. Equity does not intervene to prevent the effective exercise of those rights. The claim by Tanwar for relief against the consequences of the failure in the timely provision of the second mortgage does not succeed. Result The appeal should be dismissed with costs. 90 Smith, Principles of Equity, 4th ed (1908) at 243-244. 91 Commentaries on Equity Jurisprudence, 13th ed (1886), vol 1, Β§101. 92 cf Cameron v UBS AG (2000) 2 VR 108 at 115-116. Kirby KIRBY J. This appeal is one of two93 from the Court of Appeal of the Supreme Court of New South Wales in which this Court must review decisions concerning the provision of equitable remedies for what is alleged to have been an unconscientious use of a legal right to terminate a contract for the sale of land. The equitable remedies invoked are those of relief against forfeiture and specific performance. In each of the two cases, the same primary judge was involved94. The Court of Appeal was differently constituted in each. It reached opposite conclusions concerning the availability of equitable relief against the respective vendors' insistence upon their legal rights. In each case, the Court of Appeal approached its task as one of applying a trilogy of recent decisions of this Court95. In each case at trial the primary judge observed that it was "extraordinarily difficult to obtain from these decisions some common basis upon which this question must be decided"96. The differences of conclusion in the Court of Appeal may reflect the fact (illustrated also by decisions of this Court97) that judges often disagree upon such matters, reflecting as they do (to some extent) "ideological differences about the limits of equitable intervention to modify strict legal rights"98 as well as the peculiarities of complex factual circumstances and individual judicial reactions to them. If all that the two appeals demonstrated was that such questions are difficult, allowing for differing opinions, their utility would have been lost. 93 The other is Romanos v Pentagold Investments Pty Ltd [2003] HCA 58. 94 Windeyer J sitting in each case in the Equity Division of the Supreme Court of New South Wales. 95 Legione v Hateley (1983) 152 CLR 406; Ciavarella v Balmer (1983) 153 CLR 438; Stern v McArthur (1988) 165 CLR 489. 96 Windeyer J in Tanwar Enterprises Pty Ltd v Cauchi (2002) NSW Conv R ΒΆ55-994 at 58,188 [12] citing his reasons in Pentagold Investments Pty Ltd v Romanos (2001) 10 BPR [97911] at 19,039-19,040 [10]; (2001) NSW Conv R ΒΆ55-987 at 97 eg in Legione (1983) 152 CLR 406, Brennan J dissented. In Stern (1988) 165 CLR 489, Mason CJ and Brennan J dissented. 98 Parkinson, "The Conscience of Equity", in Parkinson (ed), The Principles of Equity, 2nd ed (2003) 29 at 33. Kirby The decision of the Privy Council in Union Eagle Ltd v Golden Achievement Ltd99, given after the trio of decisions in this Court, evidences a distinct approach involving a rather different emphasis. In a sense, that decision challenges the approach of this Court both as to its interpretation of past legal authority and in its application of legal policy. Accordingly, this and the companion appeal provide this Court with an occasion to clarify the applicable equitable doctrines. In this appeal doing so necessitates an examination not only of the general approach expressed in the three decisions of this Court dealing with relief for unconscientious conduct but also (if this is not sufficient to sustain relief) a separate consideration of the rules governing "accident" as that consideration is separately propounded to justify the grant of equitable relief. The facts The basic facts are set out in other reasons100. Those essential to the resolution of this case were within a short compass. Members of the Cauchi family and Mr Dalley ("the vendors") owned three adjoining parcels of land at Glenwood, near Sydney. In October 1999 they entered into separate contracts to sell the land to Tanwar Enterprises Pty Ltd ("the purchaser") for a combined price of approximately $4.5 million. The original date for completion of the contracts was 28 February 2000. This was later extended to August 2000. That date was not adhered to. On 20 August 2000 the vendors issued notices of termination of each contract. However, the parties eventually negotiated deeds dated 5 June 2001, each to the same effect and each containing a new completion date of 4 pm on Monday 25 June 2001. There had been a dispute concerning the final date for completion β the vendors wishing to give two weeks from the date of the deeds, the purchaser seeking four weeks. The parties compromised on three weeks and so stipulated in each deed. Time was stated to be of the essence. Each deed contained a stipulation whereby the purchaser acknowledged the terms as "a final arrangement to complete the sale of the Property", with stated consequences of forfeiture of all moneys paid in the event of non-completion of the sale in accordance with the deed and affording each vendor the right to terminate by serving a notice on the purchaser. In accordance with the deeds, arrangements were made for settlement to take place on 25 June 2001. The funds for a second mortgage over the combined land were to come from a source in Singapore. In the event, those funds did not 100 Reasons of Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ at [7]-[18]; reasons of Callinan J at [126]-[131]. Kirby arrive on the due date. The delay was supposedly the result of added requirements imposed by Singapore exchange control authorities in consequence of a money laundering scandal in that country. The funds arrived in the trust account of the solicitors for the second mortgagees on 26 June 2001. Settlement could have taken place that afternoon. However, the vendors, by their solicitors, served notice of termination of each contract. It appears the vendors issued instructions to terminate on 26 June 2001 prior to being notified that all the funds were available. They then confirmed their instructions upon receiving information that the purchaser was ready, willing and able to settle. The purchaser commenced proceedings in the Supreme Court of New South Wales. Ultimately, its claim was for relief against forfeiture and for specific performance of each contract or alternatively for return of each deposit101. The history of the proceedings Decision at first instance: The primary judge rejected the claim to relief against forfeiture. He dismissed the contention that the delay in the transfer of funds from Singapore constituted an "accident" within the power of a court of equity to grant relief for non-compliance with the terms of a contract that was the result of "fraud, accident, mistake or surprise"102. So far as the primary judge was concerned, the cause of the purchaser's failure to comply with the contract was the unavailability of the funds. This was "always a risk if funds were to be transferred from overseas on the final day"103. In judging whether the failure to complete the contract had occurred in circumstances that made it unconscionable for the vendors "to exercise clear contractual rights of termination and forfeiture" the primary judge looked to the history of the parties' entire dealings. He accepted that there had been a probable increase in the value of the land in consequence of the development consents obtained by the purchaser. He pointed out that there was no specific evidence either of this increase or of the costs of development that the purchaser had incurred104. He therefore concluded that it was not unconscionable for the vendors to insist on their rights. He also rejected the purchaser's claim for the return of the deposits. 101 Pursuant to the Conveyancing Act 1919 (NSW), s 55(2A). 102 Tanwar Enterprises Pty Ltd v Cauchi (2002) NSW Conv R ΒΆ55-994 at 58,188 [11] (emphasis added). 103 Tanwar Enterprises Pty Ltd v Cauchi (2002) NSW Conv R ΒΆ55-994 at 58,189 [14]. 104 Tanwar Enterprises Pty Ltd v Cauchi (2002) NSW Conv R ΒΆ55-994 at 58,189 [17]. Kirby Decision of the Court of Appeal: Handley JA105, who gave the reasons of the Court of Appeal106, dismissed the purchaser's appeal. A challenge to the rejection of evidence expressed in terms of approximate costs incurred by the purchaser was dismissed. Understandably, that issue has not been pressed upon this Court. Handley JA addressed unconscionability in terms of the five questions posed by Mason and Deane JJ in Legione v Hateley107. At trial, the vendors had acknowledged the purchaser's entitlement to relief against forfeiture of sums paid to the vendors in addition to the deposits but excluding the consideration paid by the purchaser for extensions of time granted by the vendors. That differentiation was upheld by Handley JA108. By application of what was described as the "clearest guidance for lower courts" expressed in the joint reasons of five members of this Court in Ciavarella v Balmer109, Handley JA referred to the "absence of precipitate conduct on the part of the vendor" and "the need to prove unconscionable conduct β¦ and β¦ exceptional circumstances before relief against forfeiture can be granted after an otherwise valid rescission"110. His Honour then decided in favour of the vendors. Whilst Handley JA was prepared to accept an "unearned increase" in the value of the land, he declined to treat this as an "exceptional circumstance" in respect of land values in and around Sydney in cases in which settlement of a sale was deferred. He could see no analogy to the factual circumstances that this Court had held to be "exceptional" in Legione and in Stern v McArthur111. The only "exceptional circumstances", in Handley JA's opinion, were the earlier extensions of time for completion and the agreement expressed in the supplementary deeds, in what he described as contracts of a "commercial 105 With whom Beazley JA and Mathews AJA agreed. 106 Tanwar Enterprises Pty Ltd v Cauchi (2002) 10 BPR [97921]; (2003) NSW Conv R ΒΆ56-048. 107 (1983) 152 CLR 406 at 449. 108 Tanwar Enterprises Pty Ltd v Cauchi (2002) 10 BPR [97921] at 19,110 [19]; (2003) NSW Conv R ΒΆ56-048 at 58,660-58,661. 109 (1983) 153 CLR 438. 110 Tanwar Enterprises Pty Ltd v Cauchi (2002) 10 BPR [97921] at 19,113 [35]; (2003) NSW Conv R ΒΆ56-048 at 58,663 referring to Ciavarella (1983) 153 CLR 111 (1988) 165 CLR 489. Kirby nature"112, to make the final time essential. However, these were exceptional considerations favouring the vendors rather than the purchaser. Appeal to this Court: In this Court the purchaser's alternative argument in relation to the return of the deposits was not pressed. There was no challenge by any party to the law as laid down in Legione, Ciavarella and Stern. The purchaser complained both about the approach of the Court of Appeal to the authority binding on it concerning relief against forfeiture and consequential orders where unconscionable conduct was shown and about its failure to regard the default that occasioned the rescission as having been the result of an "accident". Legal principle and policy Proportionality in the law's operation: As in many other areas of legal authority, the law applicable to this case is striving to achieve proportionality in its operation. By this I mean a proper adjustment between the enforcement of the legal rights of the parties, derived from the terms of the contract in which those parties have agreed upon their respective rights and duties, and the perceived substantial merits of the respective positions of the parties, including in respect of the response to the established breach. On many occasions the law recoils from absolute outcomes, to which logic or the strict letter of the law might seem to point113. There are countless illustrations of this tendency within the broadly stated exceptions to general rules acknowledged by statute and the common law. And where the common law was thought to result in consequences considered extreme and disproportionate, equity would sometimes come to the rescue. The difficulty of such exceptions is that they introduce potential causes of uncertainty in the identification and enforcement of the legal rights of the parties. Particularly where that uncertainty affects commercial interests or interests in real property, the law inclines to prefer the certainty of rules over the uncertainty of exceptions. This is especially so where the exceptions are expressed in discretionary language or in open textured criteria such as "unconscionable or unconscientious behaviour of an exceptional kind"114. What is "unconscionable" 112 Tanwar Enterprises Pty Ltd v Cauchi (2002) 10 BPR [97921] at 19,113 [37]; (2003) NSW Conv R ΒΆ56-048 at 58,663-58,664. 113 cf State Rail Authority (NSW) v Earthline Constructions Pty Ltd (In Liq) (1999) 73 ALJR 306 at 332 [93], fn 131; 160 ALR 588 at 621-622. 114 Stern (1988) 165 CLR 489 at 527-528. Kirby or "exceptional" in the opinion of one decision-maker may not be so regarded by another. Inescapably, such language invites differing evaluations by different people depending upon each person's reaction to the evidence, readings of earlier cases and response to the factors there stated that tend to weigh in such matters. Arguments supporting equitable relief: Take, for example, the present case. A number of salient elements in the evidence tended, in a general way, to favour the provision of relief to the purchaser. These were: (1) the extremely short interval involved in the ultimate default, being less than one day; (2) the long history of negotiations which included past tolerance by the vendors of earlier defaults; (3) the unexpected and largely unpredictable events in Singapore that held up the arrival of the second mortgage funds for reasons over which the purchaser had no control; (4) the growing tendency of the Australian money market to rely upon investment funds moved across national borders with only rare impediments of the kind that happened in this case and the undesirability of adopting rules that would unreasonably impede access to such funds; (5) the inference, readily drawn (even if not formally proved), that substantial costs would have been incurred by the purchaser to obtain development consents and to set up the development of the consolidated land; (6) the inference (even if not formally proved) that with the development consents and the general increase in property values, the termination of the contracts for sale would result in a significant windfall advantage to the vendors; and (7) the fact that the purchaser was not claiming for unjust enrichment of the vendors but only for specific performance to complete the sale, subject to the payment of any provable losses suffered by the vendors in consequence of the delay115. Arguments denying equitable relief: As against these considerations a number of salient elements in the evidence tended to weigh in favour of the vendors. These were: (1) the background in the dealing between the parties which produced the deeds indicating that, after earlier delays, "a final arrangement" was agreed to; (2) the clear and emphatic terms of those deeds and the agreement of all parties that the time stated in them should be treated as being of the essence; (3) the attempt by the solicitors for the purchaser to secure a longer interval of four weeks within which to settle the transfer but the insistence of the vendors on a shorter period to which the purchaser eventually agreed; (4) the commercial character of the transaction and the law's reluctance to interfere with fairly negotiated commercial transactions; (5) the relatively large sums at stake; (6) the fact that the parties were legally represented and therefore able to obtain accurate and independent advice, if they sought it, about their respective entitlements and obligations under the deeds; (7) the accepted fact that the vendors had played absolutely no part in the purchaser's default; (8) the fact that each contract had been validly terminated following the breach so that any 115 cf Legione (1983) 152 CLR 406 at 429, 450-451. Kirby latitude would necessitate enforcement of a different contract, effectively in different terms; (9) the fact that the purchaser had omitted to prove actual losses and had left these (and any windfall gains made by the vendors) to inference and speculation; (10) the inherent risk of difficulties in settling the sale on time where funds were procured from overseas and the argument that this necessitated, in the circumstances, arrangements to ensure the availability of the funds on the day before settlement; (11) the fact that upholding clear rules where time is made essential facilitates the certain and efficient conduct of land title conveyancing in a context in which the existence of clear rules is at a premium116; and (12) the danger of too readily superimposing upon such transactions the open textured principles of equity which commonly necessitate litigation, increased uncertainty as to rights and a burden upon the parties and the marketplace consequent on delay and argument whilst the respective entitlements are being determined. Objectification and equitable categories: The resolution of this appeal does not depend, as such, upon simply weighing and evaluating the foregoing and other arguments of the merits to ascertain where the balance lies: whether that balance be described as a balance of justice, of fairness or of conscience. The purchaser accepted that "unconscionability" in this context was not synonymous with a generalised sense of fairness as between the parties or with undefined notions of justice117. In order to tame the elements of unpredictability introduced into legal relationships by the imposition of equitable principles, controls upon what might otherwise become a purely discretionary assessment are accepted. They include respect for the particular categories that have emerged in equitable jurisdiction, such that it is not taken to be at large118. They also emphasise that the conscience that is in question is not that of the judicial decision-maker but that of the party against whom equitable relief is sought119, in this case the vendors. However, such controls, whilst useful, have their own limitations. Verbalising the tests and elaborating their content can only take the mind of the 116 Butt, "Recovery of deposit", (2002) 76 Australian Law Journal 151 at 152; Butt, "Purchasers relieved against loss of contract", (2002) 76 Australian Law Journal 117 Stern (1988) 165 CLR 489 at 514 per Brennan J (diss) citing Muschinski v Dodds (1985) 160 CLR 583 at 616. 118 Muschinski v Dodds (1985) 160 CLR 583 at 616; Breen v Williams (1996) 186 CLR 71 at 113, 134; cf Austotel Pty Ltd v Franklins Selfserve Pty Ltd (1989) 16 NSWLR 582 at 585. 119 Moorgate Tobacco Co Ltd v Philip Morris Ltd [No 2] (1984) 156 CLR 414 at 438; Breen v Williams (1996) 186 CLR 71 at 82. Kirby decision-maker so far in evaluating the conclusion that equitable remedies are or are not required in the particular case. As in the common law, equity develops by analogy. Relief against forfeiture was traditionally available in equity to lessees, with respect to their interest in the reversion, and mortgagors, with respect to their interest in the equity of redemption120. Whilst it is true that the exact nature of the equitable interest of a purchaser in an executory contract for the sale of land is controversial121, it is now too late to suggest that such cases are excluded from relief against forfeiture or that the categories of relief are limited to cases of leasehold and mortgage interests where there has been a time default. The equitable principle has developed by analogy to embrace the interests of a purchaser under a contract for the sale of land122. It follows that the categories are not closed. They may develop to meet new cases so long as such cases are perceived as sufficiently similar to the established ones. Whether in the common law or in the rules of equity, "excessive subtlety and refinement" should be avoided123. to objectify Furthermore, whilst the reference to the vendor's conscience has the important function of attempting the potentially nebulous consideration of unconscionable conduct (and to focus primary attention upon the acts and omissions of the person against whom relief is claimed), ultimately someone must evaluate the equitable claim. In these cases, this responsibility rests with the judge. He or she is obliged to consider the question in terms of the burden on the conscience, as here, of the vendors. But the sharp differences of opinion evident in the cases illustrates the inescapable truth that the judicial decision-maker's views about the alleged unconscientious conduct of the vendor are necessarily influenced by that person's own conscientious reaction to the facts disclosed by the evidence. Looking behind the categories: Every now and then, in dealing with the application of established law, it becomes necessary "to look behind the authorities to the reasons which have been put forward to sustain"124 the principles that they establish. In my view, in cases of this kind, those principles 120 Stern (1988) 165 CLR 489 at 529. 121 Gummow, "Forfeiture and Certainty: The High Court and the House of Lords", in Finn (ed), Essays in Equity (1985) 30 at 35-36. 122 As in Legione (1983) 152 CLR 406; Ciavarella (1983) 153 CLR 438; and Stern (1988) 165 CLR 489. 123 cf Weininger v The Queen (2003) 77 ALJR 872 at 877 [24]; 196 ALR 451 at 457- 458 citing R v Storey [1998] 1 VR 359 at 372. 124 Legione (1983) 152 CLR 406 at 446 per Mason and Deane JJ. Kirby are striving to apply an equitable rule that affords a proportionate resolution in particular circumstances of the clash between the entitlements to legal rights and the apparent demands of justice and good conscience125. Where "[t]o enforce the legal rights of the vendors β¦ would be to exact a harsh and excessive penalty for a comparatively trivial breach"126, this Court has upheld the intervention of equity. However, it has insisted that such intervention will only be allowed in an "exceptional case". The task of the courts in individual cases, and the role of judges in responding to them, is to attempt to impose on the imprecision of the applicable criteria identified categories and a specific judicial approach. Such categories and approach are expressed in words. Those words are designed to promote consistency and to reduce unpredictability in the application of what are, ultimately, very broadly stated powers of intervention. Before turning to the applicable principles as they stand in Australia, it is useful to notice the way in which the principles have developed and how, lately, their formulae have diverged in this country from those stated by English judges, addressing the same problem. The course of authority The nineteenth century English cases: The traditional strictness of the common law's approach to contractual provisions as to time was nowhere more rigorously enforced than in time stipulations for the completion of contracts for the sale of land127. Where, by law, the contract was required to be evidenced in writing, it was not thought possible for a time in writing to be substituted by parol evidence which was different from the time stipulated in writing. For many years it was considered impossible for the stipulated time to be waived by parol128. Originally, the distinction between "essential" and "non-essential" conditions did not exist at common law in respect of stipulations as to the time for completion of a contract for the sale of land. This was because all such stipulations, where they were found, were regarded as essential. Courts of equity, however, adopted a distinct approach to stipulations as to time. In the application of that approach, such courts, at least by the early 125 cf Legione (1983) 152 CLR 406 at 429 per Gibbs CJ and Murphy J. 126 Legione (1983) 152 CLR 406 at 429. 127 Lindgren, Time in the Performance of Contracts, 2nd ed (1982) at 9 [203] citing Wilde v Fort (1812) 4 Taunt 334 [128 ER 359]. 128 Lindgren, Time in the Performance of Contracts, 2nd ed (1982) at 9-10 [203] citing Stowell v Robinson (1837) 3 Bing NC 928 [132 ER 668]; Stead v Dawber (1839) 10 Ad & E 57 [113 ER 22]; Marshall v Lynn (1840) 6 M & W 109 [151 ER 342]. Kirby nineteenth century, would intervene to grant equitable remedies, including the remedy of relief against forfeiture and specific performance, against the legal consequence following a party's inability to enforce its interests because of a breach of a contractual stipulation as to time129. In early cases, regard was had by equity to such considerations as the length of the defaulting party's delay, the extent of any affirmation of the contract despite the delay, whether the delay was "not sufficiently apologised for"130 and whether there was waiver or acquiescence. By the beginning of the nineteenth century, within the Court of Chancery in England, differences emerged concerning this subject131. In effect, such differences remain to this day in the conflicts of opinion that may be found in the case books concerning the occasions for equitable intervention and the verbal formulation of the principles that will permit it. By the time of Lord Eldon LC, equity came to give relief to protect lessees against forfeiture of the lease and mortgagors in respect of their rights of redemption as well as relief against penalty interest clauses. However, these categories of relief were to come, in time, to be seen as but instances of cases where the defaulting party could demonstrate such an interest in the subject matter of the property as to render the enforcement of legal rights on some occasions offensive to conscience. It was in this context, and as an adjunct to the exercise of its powers to afford relief, that equity drew a distinction between "essential" and "non- essential" conditions as to time. It imposed upon the party who set up the provision as to time the onus of establishing the essentiality of the stipulation132. This distinction was drawn in deference to equity's search for the "real contract" between the parties and its willingness to intervene where their conduct was deemed inconsistent with the "real contract". Unsurprisingly, the response of common lawyers in retaliation against these developments was to draft contracts that contained express provisions stipulating that time was of the essence of the agreement between the parties. 129 Lindgren, Time in the Performance of Contracts, 2nd ed (1982) at 11-12 [210]- [211] citing Lennon v Napper (1802) 2 Sch & Lef 682 at 683-684; Gregson v Riddle (1784) cited in Seton v Slade (1802) 7 Ves Jun 265 [32 ER 108]. 130 Lindgren, Time in the Performance of Contracts, 2nd ed (1982) at 12 [212] citing Mackreth v Marlar (1786) 1 Cox 259 [29 ER 1156]. 131 Lindgren, Time in the Performance of Contracts, 2nd ed (1982) at 13 [213]-[214]. 132 Lindgren, Time in the Performance of Contracts, 2nd ed (1982) at 14 [216] citing Hearne v Tenant (1807) 13 Ves Jun 287 [33 ER 301]; Tilley v Thomas (1867) LR 3 Ch App 61 at 67 per Lord Cairns LJ. Kirby Such stipulations were included in the obvious hope of repelling equitable intervention by providing a foothold for the argument that it would be unjust, and indeed unconscionable, for equity to intervene to defeat the expressly agreed legal rights and obligations of the parties. Notwithstanding such express terms, a series of decisions in England, after the coming into effect of the Supreme Court of Judicature Act 1873 (UK)133, maintained the opinion that equity could relieve a defaulting purchaser against forfeiture of an interest in land, even when that party had failed to comply with the condition of the contract stipulating that time was of the essence. The cases to this effect stretch back to Vernon v Stephens134. They include In re Dagenham (Thames) Dock Co; Ex parte Hulse135 and, upon one interpretation, the decision of the Privy Council in Kilmer v British Columbia Orchard Lands Ltd136. These decisions were sometimes viewed in Australia as having preserved the right of equity to give relief which remained available notwithstanding the express contractual stipulation as to time137. This understanding of the continuing availability of equitable relief in such cases was central to the decision of the majority of this Court in Legione138. The Privy Council in Steedman and Brickles: This view of equity's continuing entitlement to grant relief against forfeiture of an interest in a legal estate in land for default of an essential stipulation as to time, was seemingly confirmed by the House of Lords as late as 1914 in Stickney v Keeble139. However, there then intruded two decisions of the Privy Council in Steedman v 133 Which by s 25(7) made specific provision as to time. The sub-section has counterparts in Australia: Conveyancing Act 1919 (NSW), s 13; Property Law Act 1958 (Vic), s 41; Property Law Act 1974 (Q), s 62; Law of Property Act 1936 (SA), s 16; Property Law Act 1969 (WA), s 21. 134 (1722) 2 P Wms 66 [24 ER 642]. 135 (1873) LR 8 Ch App 1022. 137 See McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457 at 478. 138 (1983) 152 CLR 406 at 425-428 per Gibbs CJ and Murphy J; 441-443 per Mason Kirby Drinkle140 and Brickles v Snell141. Those decisions appeared to stand for the proposition that specific performance by way of equitable relief against forfeiture is never ordered by equity where a stipulation as to time, expressed by the contract to be essential, has not been observed. In Steedman, Viscount Haldane could not have been clearer142: "Courts of Equity, which look at the substance as distinguished from the letter of agreements, no doubt exercise an extensive jurisdiction which enables them to decree specific performance in cases where justice requires it, even though literal terms of stipulations as to time have not been observed. But they never exercise this jurisdiction where the parties have expressly intimated in their agreement that it is not to apply by providing that time is to be of the essence of their bargain." Against the background of the decisions in Re Dagenham and Kilmer it is difficult to accept what Viscount Haldane said as an accurate statement of the law to that time. For this reason, Steedman (and Brickles which quickly followed) were subject to much academic criticism, charging that they amounted to the rewriting of legal history143. Nevertheless, as decisions of the Privy Council, they bound Australian State courts. They enjoyed the deference of this Court until, in Legione, the issue of their correctness as a matter of authority was subjected to explicit examination. The Australian and English resolution: In Legione, the majority in this Court returned to what they saw as the position that had prevailed before Steedman was "thought to hold the field"144. They embraced "an expansive view of the equitable jurisdiction to relieve against forfeiture"145. Such a view was considered not only more in keeping with English legal theory, until interrupted by Steedman, but also with the development of the law in the United States146 and with basic equitable principle. In Legione, Brennan J alone was unconvinced. He would have adhered to the law as propounded in Steedman, Brickles and the 142 [1916] 1 AC 275 at 279 (emphasis added). 143 cf Union Eagle Ltd v Golden Achievement Ltd [1997] AC 514 at 521. 144 Legione (1983) 152 CLR 406 at 443 per Mason and Deane JJ. 145 Legione (1983) 152 CLR 406 at 444. 146 Legione (1983) 152 CLR 406 at 448 citing Cheney v Libby 134 US 68 at 78 (1890). Kirby Australian cases, including in this Court, that had followed them147. His Honour was also later in dissent in Stern. Whilst acknowledging there that he was bound by the holding in Legione, he continued to protest his "difficulties in accepting [its] proposition"148. Meantime, in England, in Shiloh Spinners Ltd v Harding149, Lord Wilberforce had set out two heads of the jurisdiction to relieve against forfeiture of property. His speech appeared to reflect something of a return to the large view of intervention that equity had asserted before the Privy Council decisions in Steedman and Brickles. Thus, Lord Wilberforce acknowledged the existence of the jurisdiction to relieve against forfeiture: "First, where it is possible to state that the object of the transaction and of the insertion of the right to forfeit is essentially to secure the payment of money, equity has been willing to relieve on terms that the payment is made with interest, if appropriate, and also costs β¦ Secondly, there were the heads of fraud, accident, mistake or surprise, always a ground for equity's intervention, the inclusion of which entailed the exclusion of mere inadvertence and a fortiori of wilful defaults." This restatement of equity's beneficent role was influential in the shift in doctrine in the trio of Australian cases that followed Shiloh Spinners. It was a shift consciously made, repeatedly upheld and applied since in countless decisions. It was not challenged in this appeal. The Privy Council's decision in Union Eagle: I trust that this exordium of authority will be judged venial150. It leads to the last piece of the legal mosaic that appears in the reconsideration of the issue in the judgment of the Privy Council in Union Eagle151. That was a case where a purchaser had failed to complete by a time that was stipulated in the contract to be of the essence. A courier arrived ten minutes late with the balance of the settlement moneys. The vendor rescinded the contract and forfeited the deposit. 147 Legione (1983) 152 CLR 406 at 458. 148 (1988) 165 CLR 489 at 511. 149 [1973] AC 691 at 722. 150 cf Forestal Land, Timber and Railways Co v Rickards [1941] 1 KB 225 at 247 per MacKinnon LJ. Kirby The purchaser lost at trial, in the Hong Kong Court of Appeal and before the Privy Council. Lord Hoffmann, delivering the judgment of the Board, cited and applied the dictum of Viscount Haldane in Steedman. He noted the criticism of those reasons in academic writings and in the Australian cases. He referred to Legione and Stern, laying emphasis upon the dissenting opinions of Mason CJ and Brennan J in the latter. He distinguished the case before him from those cases on the factual footing that the purchaser had not been subjected to a penalty nor the vendor unjustly enriched by obliging compliance with the strict terms of the agreement that the parties had made. The Privy Council left any relaxation of the principle stated in Steedman to a future case where the facts might be more propitious. Then, as if to answer the question that justice or conscience might suggest (viz that a ten minute default was trivial rendering the vendor's rescission of the contract for sale adventitious and unconscionable), Lord Hoffmann went on152: "The present case seems β¦ to be one to which the full force of the general rule [in Steedman] applies. The fact is that the purchaser was late. Any suggestion that relief can be obtained on the ground that he was only slightly late is bound to lead to arguments over how late is too late, which can be resolved only by litigation. For five years the vendor has not known whether he is entitled to resell the flat or not. It has been sterilised by a caution pending a final decision in this case. In his dissenting judgment [in the Court of Appeal of Hong Kong], Godfrey JA said that the case 'cries out for the intervention of equity.' Their Lordships think that, on the contrary, it shows the need for a firm restatement of the principle that in cases of rescission of an ordinary contract of sale of land for failure to comply with an essential condition as to time, equity will not intervene." In this appeal the vendors did not invite this Court to reconsider the correctness of Legione, Ciavarella and Stern. However, they naturally drew attention to the approach adopted by the Privy Council in Union Eagle. Since that decision was given, commentary has divided along the fault lines that are evident in judicial opinions since Lord Eldon's time. There are those who, for reasons of legal authority and policy, support the exceptional intervention of equity acknowledged by this Court in its three decisions and suggest that such intervention might have been appropriate in the Hong Kong case153. There are 152 [1997] AC 514 at 523. 153 eg Thompson, "Time runs out in Hong Kong", (1997) The Conveyancer 382; Abedian and Furmston, "Relief Against Forfeiture after Breach of an Essential Time Stipulation in the Light of Union Eagle Ltd v Golden Achievements Ltd", (1998) 12 Journal of Contract Law 189. Kirby others who are more favourable to the general approach preferred by the Privy Council. They lay emphasis, where time is expressly made essential, upon holding parties to their obligations in the particular case so as to avoid or discourage protracted litigation about such matters in the generality of cases154. The applicable principles It is now necessary to state the principles applicable to cases such as the present that I take to emerge from legal authority applicable in Australia: The basic principle is that, subject to statute, a party of full capacity is bound by legal obligations assumed in a valid agreement with another. Equity, it is said, mends no man's bargain155. This rule is founded not only upon ancient authority of the common law that is normally respected by equity. Legal policy reinforces the rule. It represents an important attribute of economic freedom156. Certainty in contractual obligations, freely assumed, is an economically valuable feature of a modern market economy. It is made the more important by the growth of international trade conducted sometimes between parties of differing linguistic, cultural and legal traditions. If parties agree to be contractually bound by a provision that stipulates that time is essential to their contractual dealings, prima facie they should be held to that agreement. On one view, it will ordinarily be offensive to conscience to do otherwise. Nevertheless, in Australia, equitable relief may be granted against forfeiture of property in established cases. The mere fact that the agreement between the parties makes time essential does not exclude equity's jurisdiction to afford relief. However, such jurisdiction is reserved to cases in which "exceptional circumstances" are shown157. In judging whether the circumstances are "exceptional", regard must be had 154 cf Butt, "Recovery of deposit", (2002) 76 Australian Law Journal 151 at 152; cf Heydon, "Equitable Aid to Purchasers in Breach of Time-Essential Conditions", (1997) 113 Law Quarterly Review 385; Butt, "Purchasers relieved against loss of contract", (2002) 76 Australian Law Journal 347. 155 Shiloh Spinners Ltd v Harding [1973] AC 691 at 723; Legione (1983) 152 CLR 156 Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (2003) 77 ALJR 926 at 942 [85]; 197 ALR 153 at 176. 157 The source of this expression appears to be Shiloh Spinners [1973] AC 691 at 725; cf Legione (1983) 152 CLR 406 at 429, 449; Ciavarella (1983) 153 CLR 438 at Kirby to the entire relationship between the parties, the concern of equity being with substance, not form. The entire circumstances must be judged as exceptional. It is not enough to prove exceptional unconscionability on the part of the party insisting on its legal rights158. 3. Whatever may be the precise content of the "equitable interest" of a purchaser under a contract for the sale of land, it is now accepted that, in a proper case, it is sufficient to sustain equitable jurisdiction to relieve that party against forfeiture of such an interest for time default, even in respect of a time provision agreed to be essential159. The equitable interest has developed to relieve from forfeiture a party with a substantial stake in the property in consequence of an exercise of legal rights that is shown to be the result of fraud, mistake, accident or surprise or otherwise unconscionable in all the circumstances160. In deciding whether it would be unconscientious conduct for a party to take advantage of the forfeiture consequent on a breach of an essential time stipulation leading to a termination of the contract, various factual considerations, typical of such cases, have often been taken into account. The five mentioned in Legione161 are not exhaustive. They are merely cited as "[t]he more important" of those that normally have to be considered. Other factual considerations that may be taken into account in judging the existence or absence of unconscionable conduct for this purpose include (a) the character of the contract in which the time stipulation appears (ie whether it is of a commercial, domestic or personal kind); (b) the relevant background facts explaining any special significance of the stipulation as to time; (c) whether the parties have access to appropriate independent legal advice; and (d) any degree to which the party in default may be regarded as disadvantaged, vulnerable or in need of equity's protection from the insistence on its rights of a party in a superior economic or other position162. Generally speaking, equity is more solicitous for the plight of the vulnerable. In this regard a parallel 158 cf Stern (1988) 165 CLR 489 at 526, 527-528. 159 Union Eagle [1997] AC 514 at 520. 160 Stern (1988) 165 CLR 489 at 527. 161 (1983) 152 CLR 406 at 449. 162 Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (2003) 77 ALJR 926 at 945 [99]; 197 ALR 153 at 180; cf Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 at 461; Halsbury's Laws of England, 4th ed, vol 16 (1992 reissue) at [677]. Kirby development in the law of torts in recent years mimics the traditional concern of equity163. In deciding whether relief should be offered, it is proper to expect the moving party, seeking the exceptional intervention of equity, to establish by admissible evidence any fact said to be relevant to that intervention. Where, for example, it is claimed that a consideration relevant to the provision of relief against forfeiture is that, otherwise, the party relying on its legal rights will gain a windfall and the party seeking relief will lose significant expenditure that it has paid on the assumption of settlement, proof of such considerations should be tendered. They should not normally be inference, speculation or suggested common knowledge. Otherwise, for losses of such a kind, the party unable to prove them will be left to any remedies it may have, such as a claim for unjust enrichment164 or (as sought here) a statutory claim for a return of the deposit. left In deciding whether relief against forfeiture (and associated remedies) should be granted in the particular case, due consideration should be given, in evaluating the exceptional character of the circumstances, to the disadvantages suffered by the contesting party which, earlier and during any ensuing litigation, is typically (as in this case) kept out of the exercise of its legal rights in its property. In some cases, the exceptional circumstances and the assessment of the requirements of good conscience will be seen to warrant the claim for relief and resulting uncertainties165. But the deprivation of rights and the delays and costs incurred reinforce the obligation to demonstrate that the circumstances are exceptional and that unconscionable conduct has been proved. 7. Where a primary judge has determined the issues presented by a claim for relief against forfeiture, an appellate court should exercise restraint in disturbing that assessment. It should not intervene merely because, on the facts, the appellate judges would themselves have reached a different conclusion. Error is required to justify appellate disturbance of such decisions. They are not discretionary, as such, inviting the appellate restraint appropriate to cases involving the exercise of discretion. 163 cf Perre v Apand Pty Ltd (1999) 198 CLR 180 at 227-230 [123]-[129], 289 [296]. 164 Legione (1983) 152 CLR 406 at 459. 165 Roxborough v Rothmans of Pall Mall Australia Ltd (2001) 208 CLR 516 at 573- 574 [155]; cf Dunn, "Equity is Dead. Long Live Equity!", (1999) 62 Modern Law Review 140 at 144. Kirby However, they are evaluative166. They involve judgment by reference to criteria stated in very broad language. The same appellate restraint applies to this Court in performing its functions of reviewing the conclusions of an appellate court made by reference to such considerations167. I turn to apply these principles to the present appeal. Unconscionable conduct is not demonstrated Consideration of the parties' dealings: To the extent that the evidence permitted, the primary judge and the Court of Appeal were correct to take into account the history of the dealings between the parties that led to the execution of the deeds of 5 June 2001. Sometimes, perhaps often, an express stipulation in a contract for the sale of land, to the effect that time is of the essence, will be included as a standard provision in a printed form. But the terms of the deeds of 5 June 2001 applicable in this case deny that character to the special conditions upon which the parties agreed. The opening clause of each deed acknowledged a withdrawal by the vendors of a notice of termination that they had given to the purchaser on 20 August 2000. The vendors were therefore surrendering any rights that they may have had under that notice to bring previous defaults in timely settlement to a head and to be returned to a position where they once again had unrestricted control over the disposition of their property. The language of the deeds is emphatic. It is clear and specific. The circumstance of the negotiation, and rejection, of the four week period for settlement sought by the purchaser adds evidentiary emphasis to the vendors' insistence on adherence to the "final arrangement" as it was described in cl 6 of the deeds. The purchaser has a minor criticism of the reasons of Handley JA. It complained that it was inconsistent with the approach of considering the entire history of the dealings between the parties as he did, for his Honour to restrict the relevant accretion in the value of the property to the period between the deeds and the date of settlement or termination. I accept that criticism. It is fairly made. If substance and not form are to govern the assessment, it is necessary to examine the losses and gains over the entire period of the parties' dealings. However, the error is insubstantial, indeed trivial. Terms of the deeds and exceptional circumstances: The language of the deeds, reinforced by the evidence as to their origin, sustains the conclusion that 166 Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (2003) 77 ALJR 926 at 942 [82]; 197 ALR 153 at 175. 167 Liftronic Pty Ltd v Unver (2001) 75 ALJR 867 at 877-880 [64]-[65]; 179 ALR 321 Kirby this was a time stipulation that both sides consciously entered into to govern their future dealings. Having bound themselves to conform to such a clear stipulation, the vendors had the legal right, in the default that occurred, to exercise the powers conferred on them by cl 9 of the contracts to terminate the sale. That right the vendors exercised. The complaint that the one vendor who gave oral evidence did no more than to refer to the time default in explanation of the vendors' conduct is unavailing. He had no need to say more. Correctly, the purchaser accepted that the vendors had not caused, or contributed to, the default which was wholly its own. To obtain relief from equity, it was therefore the obligation of the purchaser to show, relevantly, exceptional circumstances and that it would be unconscientious for the vendors to terminate the sale and to take advantage of the forfeiture. This was not a case where the breach was inadvertent. True, it was unintended. But knowing as it did the strict provisions of the deeds and the earlier refusal of the vendors to agree to a four week interval for settlement, it was extremely perilous for the purchaser to proceed on the footing that strict conformity as to time would be waived if the funds were not available for the settlement on the date "finally arranged". In some circumstances, it might conceivably be safe to draw down funds on a second mortgage at the last possible minute. But this was not such a case. At least it was open to the judges below to so conclude. No error is shown in the conclusions that they reached. Absence of special vulnerability: Nor can it be said that the purchaser was specially disadvantaged, vulnerable or in need of the protection of equity from the vendors' misuse of a superior position. The purchaser is a development company with access to good legal advice. No doubt in relying upon Singapore- based funds it did so for good commercial reasons. A different source, locally, might have reduced the risks of delay or permitted alternative funds to be found in the event of delay. Although it is true that the international flow of investment funds is a feature of contemporary financial transactions, it is also true that foreign countries have exchange controls. At least in circumstances such as the present, prudence dictated arrangements to safeguard against any last-minute interruptions. None were made. The transaction between the parties was a commercial one. It did not involve the sale of a single lot of land of relatively modest value (as was the case in Legione and Stern). Instead, it contemplated the sale of consolidated properties for more than $4.5 million with a view to a substantial investment development by the purchaser. The considerations that called for the intervention of equity in Legione and Stern were missing in this case as the judges of the Supreme Court correctly held. I remain of the view that I expressed in Austotel Pty Ltd v Franklins Selfserve Pty Ltd168: 168 (1989) 16 NSWLR 582 at 585-586. Kirby "At least in circumstances such as the present, courts should be careful to conserve relief so that they do not, in commercial matters, substitute lawyerly conscience for the hard-headed decisions of business people: cf State Rail Authority of New South Wales v Heath Outdoor Pty Ltd169 and Geftakis v Maritime Services Board of New South Wales170. If courts do not show caution here they will effectively force on commercial parties terms which the court [decides] β¦ [T]he contract then enforced will not be that which the parties have concurred in but a different one, determined by the court."171 These observations were addressed the exercise of equitable jurisdiction. They were not intended to deny or cast doubt upon the existence of that jurisdiction; nor could they in the state of Australian authority172. The same is true in the present case. In the absence of a direct challenge to the principles established in Legione, Ciavarella and Stern, it must be accepted that equity may intervene in this country notwithstanding an express stipulation as to time in the parties' agreement. That principle, and not the reaffirmation of Steedman by the Privy Council's judgment in Union Eagle, still rules in Australia. The utility of clear rules as to time: However, in judging all of the circumstances of the case, and in eliciting the conclusion as to whether it exceptionally called for the intervention of equity on the ground of the existence of unconscionable conduct, it was proper to take into account the price that must typically be paid where equity's intervention is sought to prevent the application of the legal rights of the parties according to the terms of their agreement. As between vulnerable small property holders of the kind involved in Legione and Stern, the protection of one party from another taking unconscientious advantage of a default will sometimes be justified. In the case of a substantial commercial 169 (1986) 7 NSWLR 170 at 177. 170 (1988) NSW Conv R ΒΆ55-378 at 57,476. 171 cf Whitlock v Brew (1968) 118 CLR 445 at 457. 172 Mason, "The Place of Equity and Equitable Remedies in the Contemporary Common Law World", (1994) 110 Law Quarterly Review 238; Priestley, "Influences on Judicial Law-Making", in Saunders (ed), Courts of Final Jurisdiction: The Mason Court in Australia (1996) 99; Reynolds, "Maritime and other influences on the common law", (2002) Lloyd's Maritime and Commercial Law Quarterly 182 at 195 cited by Gummow, "Equity: too successful?", (2003) 77 Australian Law Journal 30 at 34; Zines, "Judicial Activism and the Rule of Law in Australia", in Campbell and Goldsworthy (eds), Judicial Power, Democracy and Legal Positivism (2000) 391 at 392. Kirby transaction, as in the present appeal, it can only be said that such a proceeding, as with the apartment purchased by a corporation in Hong Kong at stake in Union Eagle, ties up valuable property rights in a way that should not happen without a clear and substantial ("exceptional") case. To the extent that the purchaser relied in its case on costs to itself and windfall gains to the vendors, remarkably it failed to prove these items properly at trial. It could therefore expect only the limited allowance for them that was acknowledged by the judges below. The challenges to the judgment of the Court of Appeal in the terms in which it was explained therefore fail. No error was demonstrated in the approach of that Court to the arguments based on unconscionable conduct. Particularly when it is remembered that equity would only intervene to protect the purchaser from unconscionable conduct on the part of the vendors in rescinding the contracts for sale, the decisions of the primary judge and of the Court of Appeal were correct. To that extent, the appeal should be rejected. Accident is not established Meaning of accident in this context: In numerous passages in the reasons of judges of this Court, it is acknowledged that equity will intervene to protect a party to a contract for the sale of land from forfeiture where it is shown that, by reason of "fraud, mistake, accident, surprise or some other element"173, it would be "unconscionable or inequitable to insist on forfeiture of the purchaser's interest under the contract because he has not performed in strict accordance with its terms [and] there is no injustice to the innocent party in granting relief against forfeiture by means of specific performance with or without compensation"174. It is to be noted that "accident" in this context, as one of the stated grounds for equity's intervention, is not expressed as a free-standing foundation for a new and so far unelaborated development of equitable principle. Instead, as hypothesised, it remains for the party relying on the relevant "accident" to render it applicable, as a source of equitable relief, by showing that, although the accident was not occasioned by the "innocent party", it is sufficient of itself to render it unconscionable or inequitable for that party to insist upon its legal rights. This formulation makes it clear that, in the end, the provision of equitable relief comes back to a consideration of whether, in the light of an accident caused by a stranger, it is unconscionable or inequitable for the innocent party to the contract to proceed as otherwise in law it is entitled to do. Self-evidently, where 173 eg Legione (1983) 152 CLR 406 at 447 (emphasis added). 174 Legione (1983) 152 CLR 406 at 447. Kirby the vendor in a contract of sale with a strict time stipulation is entitled under the contract to enforce its legal rights, it takes an exceptional "accident" to burden the innocent vendor with obligations of conscience derived from an event over which it had no control and for which it was not responsible. Various hypotheses were mentioned in the authorities cited by the purchaser in support of this ground for relief. They include the case of a party robbed on the way to discharging an obligation to pay money at a specified day and place175; cases involving the prevention of payment caused by a flood or by the intervention of the Plague; accident caused by the effect of the weather176; or a lessee delayed in the payment of rent because called away to active service during the English Civil War177. Instances more apt for today were also suggested, including an unforeseen "crash" in the computer network at the Land Titles Office178 or delay to a courier in a traffic accident or through heart attack of the purchaser's agent whilst on the way to deliver a payment that would otherwise have arrived on time. Requirement of a burden upon conscience: There are defects in the arguments and authorities relied upon by the purchaser under this heading. As the vendors pointed out, all of the cases nominated are, in law or substance, mortgage or lease cases in which the applicants for relief have explained the circumstances that led them to being in default and have negatived wilful default. At least in such cases, it is unnecessary, in order to obtain relief against forfeiture, to prove the concurrent existence of unconscionable conduct. The nature of the property interest is itself sufficient to attract the relief of equity. As was explained in Stern179, in such cases "no proof of fraud, mistake, accident or surprise is required to establish the equity because the very nature of the transaction is such that the court, acting upon conscience, will grant relief". However, that leaves the question whether, acting by analogy, equity would intervene for "accident" in a case of time default by a purchaser in a contract for the sale of land where time had been made of the essence. I am prepared to assume that it might. But it is still necessary, in such a case, to establish that the accident is such as to render it unconscionable or inequitable for the vendor to rely on its legal rights. In the present instance, for the reasons 175 Anonymous Cary 1 [21 ER 1]. 176 Hill v Barclay (1811) 18 Ves Jun 56 at 62 [34 ER 238 at 240]. 177 Cocker v Bevis (1665) 2 Freeman 129 [22 ER 1105]. 178 cf the facts in Re Ronim Pty Ltd [1999] 2 Qd R 172. 179 (1988) 165 CLR 489 at 527; cf Legione (1983) 152 CLR 406 at 445. Kirby already sufficiently explained, there is no such burden on the vendors' conscience. Given the nature of the transaction and of the parties, the background of the earlier defaults, the language of the strict stipulation as to time and its obvious purpose, the arrangement of the purchaser, providing for the second mortgage funds from overseas to be made available at the last minute, was one that carried inherent risks of delay resulting in breach of the essential stipulation. When those risks eventuated, they did not constitute an accident. Conclusion: no accident: The failure to settle on the stipulated day and time was unintended and undesired. But it was not an accident in the sense of an "unforeseen event which occasioned loss where neither the event nor the loss was attributable to any misconduct, negligence or culpable inadvertence on the part of the person concerned"180. It follows that the separate claim for equitable relief on the ground of accident also fails. There was no separate basis to warrant disturbance of the primary judge's decision refusing an order for the return of the deposits paid as an assurance for compliance with the legal obligations accepted by the deeds. Orders The appeal should be dismissed with costs. 180 Snell's Equity, 30th ed (2000) at 603. Callinan CALLINAN J. This case raises the same questions as Romanos v Pentagold Investments Pty Ltd181 which was argued with it: in what circumstances and according to which principles may a defaulting purchaser under a contract of sale of land which makes time of the essence, obtain relief against forfeiture and a decree of specific performance? The facts The appellant entered into separate contracts with each of the respondents for the purchase of three adjoining lots of land dated 19 October 1999 for completion on 28 February 2000. It was a term of two of them that a parcel of land would be excised from the lot the subject of it for retention by the vendor. The appellant would also be obliged to arrange, but at a cost to the respondents concerned, services to the excised parcels. The total purchase price was $4,502,526.90. The date for completion of each contract was extended until a date in August 2000 by a deed dated 5 November 1999. Settlement did not take place on this date, and the respondents terminated the contracts by giving notices of termination of each of them on 20 August 2000. Notwithstanding the termination, the parties continued to negotiate, and, on 5 June 2001, separate but similar deeds again extending the date of completion, this time until 4pm Monday 25 June 2001, were executed. The deeds stated time to be of the essence and the consequences of a failure by the appellant to complete in emphatic language which I will set out later. The deeds also provided that the appellant should pay various additional amounts to the respondents, including on settlement, of $110,000. In the meantime, the three properties were consolidated into one title to enable the appellant to obtain, at some cost, development approvals which were granted on 18 February 2000. The appellant paid to the respondents a total of $225,126.32 on 19 October 1999, and a further $225,126.32 on 30 May 2000 by way of deposits. The appellant also made part payment of the prices between 30 June 2000 and 20 July 2000, and an additional payment of $80,000 on 20 July 2000 in consideration of an extension of time. Although no offer was earlier made to repay any of the money received by the respondents, it was conceded before the primary judge that the appellant was entitled to be relieved against forfeiture of the sum of $397,473.40 paid by way of part payment of the purchase price. The parties arranged to settle at the Office of State Revenue on the last day available to them under the deeds, Monday 25 June 2001. The finance upon 181 [2003] HCA 58. Callinan which the appellant depended included money to be secured on second mortgage. The appellant was unable to settle at the appointed time because of a delay in the transfer of funds on behalf of the proposed second mortgagees from Singapore. The parties were informed of this on 25 June 2001. The stated reason for it was the occurrence of an international money laundering scandal in Singapore. In consequence, the government of that nation was conducting additional, and therefore apparently delaying checks on some international transfers of money. The solicitor for the second mortgagees also informed the parties that the funds should be available the next day, and that he had only become aware of the problem earlier that day. The money did in fact come to hand from Singapore on 26 June 2001. The appellant's solicitor immediately told the solicitor for the respondents that the funds were available and that settlement could proceed. On the afternoon of the same day, the solicitor, on instructions from the respondents, and after their solicitor became aware that funds were available, served notices of termination upon the appellant. The respondents had however given instructions to terminate before they personally knew that the funds were available. When this came to their notice they nevertheless confirmed their instructions. It was accepted that a tender of the full balance of the price was made and rejected on 26 June 2001. At first instance The appellant applied to the Supreme Court of New South Wales for declarations that the contracts remained on foot and had not been validly terminated, and that they be specifically performed. The applications which came on for hearing before Windeyer J were dismissed182. It was his Honour's opinion that the unqualified terms of the contracts and deeds, and the failure of the appellant to complete on time, made the respondents' position almost unassailable: it was not unconscionable for them to exercise their clear contractual rights of termination and forfeiture. His Honour's opinion was unaffected by the possibility of any increase in the value of the lots (a matter which he was apparently prepared to assume) and that the appellant may have incurred costs in securing the development approvals, as to which there was no evidence. Had there been such evidence, he would, his Honour said, have needed to balance it against the passage of time between execution of the contracts and termination, and the aggregation of the parcels in one title, which, if there were to be a resale in separate titles, would require subdivision. His Honour also upheld the respondents' forfeiture of the deposits, because it had not been shown that the respondents had enjoyed a windfall as a result of the termination. 182 (2002) NSW Conv R ΒΆ55-994. Callinan The Court of Appeal The appellant unsuccessfully appealed to the Court of Appeal of New South Wales183. Handley JA, with whom Beazley JA and Mathews AJA agreed, after reciting the facts and rejecting some currently non-relevant arguments of the appellant's, said that the conduct of the parties had to be evaluated in the light of the complete history of the transaction and the whole of the circumstances184. His Honour went on to say185: "The purchaser's breach on 25 June, evaluated in this light, cannot be characterised as trivial. On 5 June the parties, by deed, fixed 25 June as the date for completion, with time to be of the essence. The date for completion was not fixed unilaterally by a notice to complete, but consensually. The date was fixed and agreed in circumstances where some 10 months earlier the purchaser had failed to complete in breach of contract and the vendors had purported to rescind. The validity of that rescission was disputed and the Court knows nothing of the merits. That dispute was compromised by the deeds of 5 June to give the purchaser a last chance ('final arrangement') to complete on a time of the essence basis. The purchaser failed to do so on the day, and in that respect its failure was complete. There was a substantial shortfall in the funds required for completion. The breach was not inadvertent because the purchaser did not have all its funding in place on 5 June when it agreed to settle on 25 June on a time of the essence basis and it took a risk." His Honour distinguished Legione v Hateley186 and Stern v McArthur187 on their facts. It was appropriate for his Honour to look at the facts of those cases not only because they disclosed no want of good faith on the part of the purchasers, that hardship would descend on them, and a likely windfall to the vendors would eventuate, if the purchasers were to fail, but also because those facts were influential in shaping the principles which were to emerge from them. In Ciavarella v Balmer188 also this Court looked closely at the facts there to distinguish them from those of Legione. In Legione, the purchasers had entered 183 (2003) NSW Conv R ΒΆ56-048. 184 (2003) NSW Conv R ΒΆ56-048 at 58,661 [22]. 185 (2003) NSW Conv R ΒΆ56-048 at 58,661 [23]. 186 (1983) 152 CLR 406. 187 (1988) 165 CLR 489. 188 (1983) 153 CLR 438 at 453-454. Callinan into possession and built a house on the land, which, in its improved state, were it to revert to the vendor, would confer an undeserved windfall189. Stern, although again involving an entry into possession and construction of a house on the land by the purchasers, had its own peculiar features. Both cases however, Handley JA said, lacked a clear ratio binding on the Court of Appeal. His Honour accepted nonetheless that relief against forfeiture could be granted in Australia in circumstances in which it might be refused in England190. He thought most assistance was to be derived from the joint judgment of Gibbs CJ, Mason, Wilson, Deane and Dawson JJ in Ciavarella. His Honour said191: "The joint judgment of Gibbs CJ, Mason, Wilson, Deane and Dawson JJ in Ciavarella v Balmer192 provides the clearest guidance for lower courts in factual situations removed from those in Legione and Stern. The Court referred to the absence of precipitate conduct on the part of the vendor193, the need to prove unconscionable conduct194, and the need to show exceptional circumstances before relief against forfeiture can be granted after an otherwise valid rescission195. These vendors cannot be accused of precipitate conduct, and in my judgment exceptional circumstances have not been shown. The unearned increase in the value of the land is not an exceptional circumstance. As far as land in and around Sydney is concerned it is the normal result of a deferred settlement. The actual increase in value due to the development consents is not known and, for the reasons given, uncertain. The circumstances which were held to be exceptional in Legione and Stern are not present here." The appeal to this Court Before I come to the appellant's submissions, I should state the principles which in my opinion govern this case. 189 (2003) NSW Conv R ΒΆ56-048 at 58,661-58,662 [24]-[26]. 190 (2003) NSW Conv R ΒΆ56-048 at 58,663 [32]. 191 (2003) NSW Conv R ΒΆ56-048 at 58,663 [35]-[36]. 192 (1983) 153 CLR 438. 193 (1983) 153 CLR 438 at 453. 194 (1983) 153 CLR 438 at 452-453. 195 (1983) 153 CLR 438 at 454. Callinan I do not understand it to be the position in this country that non- compliance with a term making time of the essence by a party to a contract for the sale of land is to be equated with, and to be treated with the same tolerance in equity as a like non-compliance by a lessee or mortgagor. Tolerance towards lessees and mortgagors historically owes its existence in part at least to the assumption, and in past times, probably generally correct assumption, that a lessor or mortgagee was in an especially powerful and superior position to a lessee or mortgagor, and was therefore more able, and likely, to act unconscionably in exploiting that position. Whether in modern times in which corporations may find it more efficient and less expensive to utilize borrowed funds than to seek further invested funds from shareholders, and banks, national retailers and others may prefer for their own reasons to be tenants instead of owner-occupiers, that assumption is universally valid, is not a matter that requires exploration here. It is right to point out however that no such assumption could safely be made in respect of vendors and purchasers of land today. Nor do I think that the outcome of a case of this kind depends upon an exact characterization of the parties' rights or interests under the contract: that is, for example, whether the vendor's retention of the title should be regarded as a mere security for the balance of the price; or, whether the purchaser's interest, certainly when the contract is, or has become unconditional, amounts to an equity in the land196. It does not follow that if a vendor receives the price and compensation to cover the cost of the purchaser's breach, the latter is automatically entitled to specific performance and the court should make a decree accordingly. If that were the law, terms imposing time limits would become, if not meaningless, of little or no utility, and purchasers would come to enjoy an undeserved advantage over vendors. It would also lead to legal and commercial uncertainty. It is not for the courts to impose upon the parties after one of them has defaulted, a different contract from the one for which they bargained and which they concluded. A grant of relief to a purchaser does not depend upon whether a court might think an aspect of the contract was unfair or unreasonable, or that circumstances have changed to the disadvantage of a purchaser. The law which I would distil from the cases is that a court may relieve a defaulting purchaser against forfeiture even in cases in which time is of the essence. When however time is of the essence, there are six conditions for a grant of relief: the purchaser must be able to explain the default; the purchaser 196 See KLDE Pty Ltd v Commissioner of Stamp Duties (Q) (1984) 155 CLR 288 at 296-297 per Gibbs CJ, Mason, Wilson and Dawson JJ, 300 per Brennan J. Callinan must show that it occurred as a result of an event for which he is not responsible, or by accident; the purchaser must produce evidence of real hardship if relief were not to be granted; and the purchaser must be prepared and able to compensate the vendor for any loss that may have been caused. The fifth is that there must be something in or about the vendor's conduct which goes beyond reliance on contractual rights and involves an element of oppression or imposition, such that it can be described as unconscionable. And the sixth condition, as five Justices of this Court held in Ciavarella197, is that the purchaser must show that the circumstances are exceptional. Two of the cases in which relief has been granted in this Court were ones clearly of hardship to the purchaser. In each of Legione and Stern the purchasers had been allowed to take possession of the land and had built a house on it. It is easy to see how a defaulting purchaser could suffer undue hardship, and a vendor entering into possession, could enjoy a windfall in such a situation. Even so, the Justices who decided in favour of the purchasers in those cases were not unanimous in their reasons for their decisions. In Ciavarella, the other of the cases in which relief was sought by the purchaser, the facts were quite different and the purchaser failed198. The appellant submitted in this Court that the Court of Appeal erred by taking into account the whole history of the transaction, and drawing, in at least one respect, an erroneous conclusion about it, that the appellant was responsible for the delay that had occurred before the execution of the deeds. Furthermore, the appellant submitted, it had, in effect paid in part at least for the delays: by paying $80,000 on 20 July 2000; and agreeing to pay a further sum of $110,000 on settlement. Properly viewed, as the courts below should have, the appellant's failure to settle was, in the circumstances, slight and trivial. It is convenient to dispose of this submission immediately because of the absence of a good factual foundation for it. By the time of the payment of $80,000 and the promise to pay more on settlement, the respondents had already been out of their money for some time and were to be out of it for a further period. There is no reason to believe that the payment, and the promise to pay more, were other than for the restoration, to the extent that this could be achieved, of the respondents' initial position. The deeds were especially emphatic as to the essentiality of time. Clause 6 provided: 197 (1983) 153 CLR 438 at 454 per Gibbs CJ, Mason, Wilson, Deane and Dawson JJ; see also Legione v Hateley (1983) 152 CLR 406 at 429 per Gibbs CJ and Murphy J and Stern v McArthur (1988) 165 CLR 489 at 502-503 per Mason CJ. 198 (1983) 153 CLR 438 at 453-454. Callinan The Purchaser acknowledges that the contents of this Deed are a final arrangement to complete the sale of the Property. If the Purchaser does not complete the sale in accordance with the provisions of this Deed the Purchaser will: forfeit all moneys paid pursuant to the Contract for Sale and acknowledges the Vendor's rights under clause 9 of the Contract for Sale; (b) withdraw any caveat against the property; not commence any Court proceedings to dispute the Vendor's termination of the Contract for Sale." A failure to observe an avowedly essential, express term of the contracts (the deeds) in circumstances in which there had been admitted cost to the respondents, and for which compensation in part already had had to be provided, cannot be accurately described as slight or trivial. The appellant contended that its breach was inadvertent or accidental. Factually, the submission is not made out. The appellant knew of the relevant matters: that the money would be required as a matter of essentiality on the due date. The provision of that money was its responsibility. If "accident" there was, it was of choosing as one of its lenders a financier who needed to import funds from overseas at the eleventh hour to enable it to fulfil its contractual obligations with all such risks of non-arrival as that might involve. This is not an accident which can avail the appellant in seeking equitable relief. The appellant submitted that the respondents suffered either no, or minimal losses only by reason of the appellant's failure to complete on time. Indeed, it is put, the respondents probably gained from an enhancement in value of the land, a matter which is open to doubt, and which may have occurred in any event well before the date of settlement. But against that, if it were so, had to be set, the appellant argued, the costs and losses to the appellant incurred in seeking development approval, the money paid by way of deposit, and the loss of its bargain. The submission is one that goes to the relativity of prejudice, or, hardship suffered on each side. Again I would reject it on the facts. A way, and I think, not an unfair one, of viewing the facts is that, for a sum of money, the deposits, the appellant has had very considerable benefits: the right to seek development approval over the land, to resell it, albeit conditionally, and to prevent its sale to anyone else for a long time, 20 months between the execution of the first contracts on 19 October 1999 and 25 June 2001, the date of settlement. There is no reason why this Court should decide, in weighing the losses and gains on each side, that the nett result is of hardship in any, let alone a substantial degree, to the appellant. Nor is there any reason why the Court, especially in the absence of evidence, not only of changes in values of the land at the material times, but also the reasons for those changes, should not equate what Callinan the appellant has had, with an option over the land for the period that elapsed. There is no reason at all to infer that what the appellant has had was not at least as valuable as an option, or that the nett result of what occurred constituted a windfall to the respondents. I have not taken into account, because it was not a matter that was explored before the primary judge, the possibility that the appellant may have had a remedy against the second mortgagees, but it may be that such a possibility would be relevant in an appropriate case. I would similarly disregard the possibility that increases in value of the land, if any, might in part at least be more apparent than real because of inflation, another matter not explored at first instance. Even if the land had increased in real value during the elapsed time, it would not be right for the benefit of the increase to be described as unmerited. The possibility of an increase, as well as of a decrease in value of land subject to contract not to be performed in a short time, is always open. The parties must have been aware of this, and, with it in mind freely to have agreed to enter into contracts (the deeds), a term of which was that time should be of the essence. The appellant criticized the proposition that relief should only be granted in exceptional circumstances. This was why, except to the extent that the alleged hardship, accident or windfall, or a combination of these might be characterized as an exceptional matter, the appellant did not submit that there was anything exceptional about what occurred here. Nor could it have. This was simply a case in which a financier failed to provide the funds it was expected to provide, and the appellant was bound to have available by a certain time. The true, indeed the only test, the appellant submitted, was not whether the circumstances were exceptional, but rather whether the vendors acted unconscionably. I would reject that submission. The authorities to which I have referred require exceptional circumstances. The facts of the particular case are important. This Court is obliged to look at the totality of them as Handley JA did. And it is only on the basis of the exceptional nature of the case so viewed that relief may be granted. This was not an exceptional case in any relevant respect. It may not be the terminus, but an important starting point for a consideration of its exceptional nature or otherwise, is that time was agreed as being of the essence. A second point is that the appellant had already effectively been given time. The third is, as the appellant conceded, that the respondents in no way contributed to the appellant's default. The fourth is that neither hardship nor a windfall on either side has been established. The fifth is that there was no relevant accident or inadvertence. A breach of an essential term can rarely be, and is not here, characterizable as trivial. The respondents did not act in any oppressive or imposing way towards the appellant. This was a case in which the conditions for a grant of relief were absent. I would dismiss the appeal with costs. |
HIGH COURT OF AUSTRALIA MINISTER FOR IMMIGRATION AND MULTICULTURAL AFFAIRS APPELLANT AND RESPONDENTS S152/2003 RESPONDENTS Minister for Immigration and Multicultural Affairs v Respondents S152/2003 [2004] HCA 18 21 April 2004 1. Appeal allowed. ORDER 2. Set aside orders 1, 2 and 3 made by the Full Court of the Federal Court on 23 May 2002 and, in lieu thereof, order that the appeal to the Full Court of the Federal Court be dismissed. 3. Appellant to pay the respondents' costs of the appeal to this Court. On appeal from the Federal Court of Australia Representation: J Basten QC with S B Lloyd for the appellant (instructed by Sparke Helmore) N J Williams SC with B M Zipser for the respondents (instructed by the respondents) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Minister for Immigration and Multicultural Affairs v Respondents Immigration β Refugees β Applications for protection visas by de facto husband and wife nationals of Ukraine β Well-founded fear of persecution β Husband claimed to suffer religious persecution as Jehovah's Witness β Refugee Review Tribunal found that incidents of which husband complained were individual and random incidents and did not amount to persecution, and that the chance that he would suffer persecution in future was remote β Tribunal rejected claim that state encouraged or condoned persecution of Jehovah's Witnesses β Whether Full Court of Federal Court erred in concluding that Tribunal committed jurisdictional error in failing to consider a different claim of whether the husband might suffer future harm from private individuals because of religious belief and whether the government of Ukraine was able in a practical sense to stop such harm occurring β Absence of evidence before Tribunal to support a conclusion that Ukraine did not provide level of protection required. Immigration β Refugees β Applications for protection visas β Relevance of attitude or capacity of state to whether fear of harm well-founded, to whether there is persecution, to whether a person is outside country of nationality owing to well-founded fear of persecution and to unwillingness of person to seek protection of state β Protection theory and accountability theory β Non-state actor β Harm by non-state actors β Persecution by non-state actors β State complicity in persecution β Persecution tolerated or condoned by state β Failure of state protection β Unwilling or unable to provide protection. International law β Treaty β Interpretation β Refugees Convention β "Persecution" β Different theories of persecution β Meaning of treaty provisions β Proper approach to meaning β Primacy of text β Approaches of courts in countries of refuge β Protection theory and accountability theory β Whether a third theory applicable. Words and phrases β "well-founded fear", "persecution", "protection". Migration Act 1958 (Cth), s 36(2). Convention relating to the Status of Refugees, Art 1A(2). GLEESON CJ, HAYNE AND HEYDON JJ. The issue in this appeal concerns the application of the definition of "refugee" in the Refugees Convention as amended by the Refugees Protocol ("the Convention") in a case where the feared conduct in a person's country of nationality is that of private individuals, and where neither the government nor its officers encourage, condone or tolerate conduct of the kind in question. The respondents applied for protection visas, relying on s 36(2) of the Migration Act 1958 (Cth) ("the Act"), and claiming that they were persons to whom Australia had protection obligations under the Convention. Article 1A(2) of the Convention provides that the term "refugee" shall apply to any person who: "owing to well-founded fear of being persecuted for reasons of race, religion, nationality, membership of a particular social group or political opinion, is outside the country of his nationality and is unable or, owing to such fear, is unwilling to avail himself of the protection of that country; or who, not having a nationality and being outside the country of his former habitual residence, is unable or, owing to such fear, is unwilling to return to it." The respondents are Ukrainian nationals. The first respondent had suffered serious harm from some fellow citizens in Ukraine because he was a Jehovah's Witness. The nature of that harm will be explained below. The first respondent needed to establish that he feared persecution for reasons of religion, that his fear was well-founded, that he was outside Ukraine owing to such fear, and that he was unable or, owing to such fear, unwilling to avail himself of the protection of his country of nationality. The respondents are de facto husband and wife. The second respondent is not a Jehovah's Witness, and it was the position of the first respondent that was the focus of attention. The respondents left Ukraine in December 1998, and arrived in Australia in the same month. In February 1999, they applied for protection visas. On 7 May 1999, their application was refused by a delegate of the Minister. They applied for review of that decision by the Refugee Review Tribunal ("the Tribunal"). In September 2000, the Tribunal affirmed the delegate's decision. The respondents sought judicial review of the Tribunal's decision in the Federal Court of Australia. The matter came before Wilcox J, who found no error of law in the Tribunal's reasons, and who, on 9 April 2001, dismissed the application. The respondents then appealed successfully to the Full Court of the Federal Court (Lee, Moore and Madgwick JJ). Before considering the decision of the Full Court, it is necessary to examine the case that was put to the Tribunal, the findings of the Tribunal, and the Tribunal's reasons for affirming the delegate's decision. Hayne The first respondent said that he became interested in the Jehovah's Witnesses religion in about May 1998. He was given some literature by a friend, and started to attend meetings on Sunday evenings. He began to distribute publications to his neighbours, and to engage in other forms of proselytising. Sometimes his activities were received with hostility and insults. On an occasion in June 1998, a group of drunken teenagers set upon him as he was returning to his home unit. They called him "a stinking sectarian", and punched and kicked him. He suffered severe injuries. An ambulance was called. He was given emergency treatment at a hospital, and then spent a week at home in bed. A policeman visited him at home, and asked for his account of what happened. The first respondent, who did not know the identity of his attackers, did not make a formal statement. On an occasion in July 1998, there was an apparent attempt to set fire to the front door of the unit in which the first respondent was living. Written on a nearby wall were the words: "Death to sectarians! Bitch, if you want to live, stop your filthy activities, or else!" In September 1998, on an occasion when the first respondent went into a building to distribute magazines, he was attacked and beaten by four men. The first respondent's religious beliefs and activities also incurred the resentment of his employer. He was dismissed on a ground that he regarded as spurious. He then decided to leave Ukraine. The Tribunal took account of country information from the United States Department of State, the British Home Office, and the Australian Department of Foreign Affairs and Trade. That information was consistent. It contained no suggestion that the Ukrainian government was not in control of the country, or that the police force and the judicial system were not reasonably effective and impartial. It said that the Ukrainian government permitted freedom of religious practice in the case of "traditional religions", which included Jehovah's Witnesses, although "new religions", such as Scientology, were treated differently. It was noted that, as part of the Soviet Union for most of the 20th century, Ukraine was a society in which, for a long time, the public practice of religion had been strongly and officially discouraged, and that sections of the community were still likely to be hostile to religious proselytising. The Tribunal noted that there were more than 100,000 Jehovah's Witnesses in Ukraine, and that the Church itself, in its published material, did not claim to be persecuted there. The Tribunal found "that the [first respondent] was assaulted and that he was assaulted because some individuals were affronted by his religious beliefs. Hayne However, these incidents must be seen as individual and random incidents of harm directed at the [first respondent] and not as persecution for a Convention reason." The first respondent set out to convince the Tribunal that the government of Ukraine, both directly and through the state-controlled media, encouraged persecution of Jehovah's Witnesses. That proposition was rejected. The first respondent also asserted that the police condoned violence towards Jehovah's Witnesses. The Tribunal did not accept that. The Tribunal said: "On the basis of the above information, the Tribunal is not satisfied that the authorities can be said to be unwilling or unable to protect their citizens. The fact that the [first respondent] experienced incidents about which he either did not make a statement, or did not persevere in any way if discouraged from making a statement, cannot be taken as evidence that the authorities condoned such incidents. On the occasion on which the police were alerted to an assault by the ambulance officers, they responded appropriately." The Tribunal also said: "In short, the Tribunal accepts the independent evidence of the US State Department, the British Home Office and DFAT, but more particularly of the official Jehovah's Witness website itself, that Jehovah's Witnesses in the Ukraine do not face State-sanctioned persecution. It accepts that harm may sometimes befall individual church members, probably more frequently when they go out and proselytise β putting themselves deliberately into an interaction with members of the general public β but that this harm befalls them on a one-off, individual basis. In the case of the [first respondent], he has suffered two assaults and some property damage that can almost certainly be attributed to adverse reaction to his new-found religious beliefs. However, the Tribunal finds that they were individual attacks with different perpetrators being involved. The Tribunal further rejects his claims that the State is implicated through its manipulation of the media and that it is unwilling or unable to protect its citizens." In the light of what the Full Court later said, it is to be noted that the Tribunal twice expressed the conclusion that it was not satisfied that the Ukrainian authorities were unable or unwilling to protect citizens from violence based on antagonism of the kind here involved. Hayne It is also to be noted that the first respondent's case before the Tribunal was that the government of Ukraine actively encouraged persecution of Jehovah's Witnesses. It was not asserted that the judicial system, or the police force, of the country lacked the power to deal effectively with unlawful violence, if they wanted to do so. The allegation was not one of absence of power, or even one of mere absence of will. It was one of positive encouragement of certain forms of unlawful violence. That was the context in which the Tribunal's reasons were expressed. As sometimes happens, by the time the case reached a further level of decision-making, a new point was made. But a fair reading of the Tribunal's reasons requires an understanding of the case it was addressing. The respondents were unrepresented before the Full Court. The reasons of the Full Court record that, during the hearing of the appeal, an issue emerged that had not been raised before Wilcox J. How it emerged does not appear. The issue was said to relate to "the Tribunal's rejection of the [first respondent's] claim that the Ukrainian authorities were either unable or unwilling to provide protection to their citizens". To describe that as the first respondent's claim is perhaps not entirely accurate. His claim was that the authorities were unwilling to provide protection in the sense that they were the instigators of the harm. The Full Court said that the Tribunal was entitled to find that there was no evidence that the Ukrainian authorities encouraged persecution of "However, the Tribunal did not address the question of possible future harm befalling the [respondents] or whether the Ukrainian government was able, in a practical sense, to prevent such harm, given the history of violence towards [the first respondent] on account of his religious beliefs. These matters were relevant in determining whether the [respondents'] fear of persecution was well-founded." The Full Court went on: "Counsel for the [Minister] submitted that the Tribunal did make a finding that the State had the ability to protect its citizens ... However, examination of the Tribunal's reasons indicates it only went so far as considering whether the [first respondent] sought and failed to obtain protection from the Ukrainian authorities. There was no specific consideration of the State's ability, in a practical sense, to provide protection. It is not an answer, in our opinion, simply to assert that the harm suffered by the first [respondent] 'must be seen as individual and random incidents of harm and not persecution'." It is not completely clear what the Full Court meant by its references to the Ukrainian government's ability "in a practical sense" to prevent harm to the first respondent. It appears, however, that what the Full Court had in mind was that the first respondent had suffered harm in the past (in the manner and on the occasions described above), and that there was no assurance that the same would Hayne not happen to him again in the future. The suggested error of the Tribunal, said by the Full Court to be jurisdictional error, lay in failing "to consider the right question, namely, whether, in a practical sense, the State was able to provide protection particularly in light of the pervasive pattern of harm". Since the Tribunal had found that the three attacks on the first respondent were random and unco-ordinated, that the attackers were different, and that each group was unknown to the others, the "pervasive pattern of harm" must be the hostility, in certain elements of the community, towards "sectarian" religious practice and proselytising, and the propensity of some of those elements to express their hostility in a violent manner. The Full Court said that the practical ability, or lack of ability, to provide protection was relevant in determining whether the first respondent's fear was well-founded. It did not advert expressly to whether it was also relevant to determining whether that which the first respondent feared was persecution, or to whether the first respondent's unwillingness to avail himself in Australia of the protection of the Ukrainian authorities was "owing to" such fear. It was pointed out in Minister for Immigration and Multicultural Affairs v Khawar1 that, although the paradigm case of persecution contemplated by the Convention is persecution by the state or agents of the state, it is accepted in Australia, and in a number of other jurisdictions, that the serious harm involved in what is found to be persecution may be inflicted by persons who are not agents of the state. But not all serious harm inflicted upon a person by his or her fellow- citizens amounts to persecution, even if it is inflicted for one of the reasons stated in the Convention. The word used by Art 1A(2) is "persecuted", not "harmed", or "seriously harmed". Furthermore, it is used in a context which throws light on its meaning. The immediate context is that of a putative refugee, who is outside the country of his nationality and who is unable or, owing to fear of persecution, unwilling to avail himself of the protection of that country. As explained in Khawar2, we accept that the term "protection" there refers to the diplomatic or consular protection extended abroad by a country to its nationals. In the present case, the first respondent must show that he is unable or, owing to his fear of persecution in Ukraine, unwilling to avail himself of the diplomatic or consular protection extended abroad by the state of Ukraine to its nationals. Availing himself of that protection might result in his being returned to Ukraine. Where diplomatic or consular protection is available, a person such as the first (2002) 210 CLR 1 at 10-11 [22]. (2002) 210 CLR 1 at 10 [21] per Gleeson CJ. See also at 21 [61]-[62] per McHugh Hayne respondent must show, not merely that he is unwilling to avail himself of such protection, but that his unwillingness is owing to his fear of persecution. He must justify, not merely assert, his unwillingness. As the Supreme Court of Canada put it in Canada (Attorney General) v Ward3, a claimant's unreasonable refusal to seek the protection of his home authorities would not satisfy the requirements of Art 1A(2). In Applicant A v Minister for Immigration and Ethnic Affairs4, Brennan CJ referred to Art 1C(5), which refers to the possibility that circumstances may change in such a way that a refugee can no longer refuse to avail himself of the protection of the country of his nationality. This indicated, he said, that the definition of "refugee" must be speaking of a fear of "persecution that is official, or officially tolerated or uncontrollable by the authorities of the country of the refugee's nationality"5. The wider context is that of an instrument which provides an important, but defined and limited, form of international responsibility towards a person whose fundamental human rights and freedoms have been violated in a certain respect in the person's country of nationality. Because it is the primary responsibility of the country of nationality to safeguard those rights and freedoms, the international responsibility has been described as a form of "surrogate protection"6. "Protection" in that sense has a broader meaning than the narrower sense in which the term is used in Art 1A(2) but, so long as the two meanings are not confused, it is a concept that is relevant to the interpretation of Art 1A(2). The wider context was referred to by Dawson J in Applicant A7 when he said that international refugee law was meant to serve as a substitute for national protection where such protection was not provided in certain circumstances, and by Lord Hope of Craighead who said in Horvath v Secretary of State for the Home Department8 that the general purpose of the Convention is to enable a person who no longer has the benefit of protection against persecution for a Convention reason in his own country to turn for protection to the [1993] 2 SCR 689 at 724. (1997) 190 CLR 225 at 233. (1997) 190 CLR 225 at 233. 6 The term was used in Hathaway, The Law of Refugee Status (1991) at 135, and adopted by Lord Hope of Craighead in Horvath v Secretary of State for the Home Department [2001] 1 AC 489 at 495. (1997) 190 CLR 225 at 248. [2001] 1 AC 489 at 495. Hayne international community. A further part of the context is Art 33 of the Convention, which prohibits the expulsion or return of a refugee to the frontiers of territories where his life or freedom would be threatened on account of one of the factors referred to in Art 1A(2). Having regard to both the immediate and the wider context, a majority of the House of Lords in Horvath took the view that, in a case of alleged persecution by non-state agents, the willingness and ability of the state to discharge its obligation to protect its citizens may be relevant at three stages of the enquiry raised by Art 1A(2). It may be relevant to whether the fear is well- founded; and to whether the conduct giving rise to the fear is persecution; and to whether a person such as the first respondent in this case is unable, or, owing to fear of persecution, is unwilling, to avail himself of the protection of his home state. Lord Hope of Craighead quoted with approval a passage from the judgment of Hale LJ in the Court of Appeal in Horvath9 where she said, in relation to the sufficiency of state protection against the acts of non-state agents: "[I]f it is sufficient, the applicant's fear of persecution by others will not be 'well founded'; if it is insufficient, it may turn the acts of others into persecution for a Convention reason; in particular it may supply the discriminatory element in the persecution meted out by others; again if it is insufficient, it may be the reason why the applicant is unable, or if it amounts to persecution unwilling, to avail himself of the protection of his home state." Horvath was a case not unlike the present. A Roma citizen of Slovakia claimed asylum in the United Kingdom, saying that he feared serious harm by skinheads against whom the Slovak police failed to provide adequate protection. It was found that, although the appellant's evidence as to the harm inflicted on him was credible, Slovakia provided citizens with a sufficient level of state protection against violence. On those findings, four members of the House of Lords held that there was no persecution, no well-founded fear, and no inability, or unwillingness owing to such fear, on the part of the appellant to avail himself of the protection of Slovakia. The fifth member, Lord Lloyd of Berwick, agreed in the result, but confined his reasons to the third ground. The outcome of the case may be compared with Canada (Attorney General) v Ward10 where the Supreme Court of Canada upheld a claim that the Convention applied. In that case the issues were narrow. The person making the claim had been sentenced to [2001] 1 AC 489 at 497. 10 [1993] 2 SCR 689. Hayne death at a court martial by a paramilitary organisation in Ireland. The Attorney General of Canada conceded that the government of Ireland was unable to protect him11. She also argued that state complicity is a prerequisite to persecution, but conceded that a state's inability to protect its citizens amounts to complicity if what is involved is otherwise persecution on a Convention ground. Problems of interpretation of instruments may arise because, although a provision was not intended to be confined in its operation to a certain kind of case, such a case was in the forefront of the contemplation of the drafters, and dominated their choice of language. When that occurs, the provision may operate smoothly and coherently in its application to the paradigm case, but in other cases it may give rise, not to impossibility of application, but to difficulty. In a case where the harm feared by a putative refugee is harm inflicted by the state, or agents of the state, in the country of nationality, the significance for the application of Art 1A(2) of the complicity of the state in the harm inflicted is clear. Assuming the harm to be sufficiently serious, and the reason for it to be a Convention reason, the fear of harm will be well-founded (because of its source); it may readily be characterised as persecution, and identified as the reason the person in question is outside the country of nationality; the external protection, which may involve being sent back, is illusory; and the unwillingness to seek such protection may be explained and justified by the fear of persecution. (It is unnecessary in the present case to examine what is involved in the concept of inability to seek external protection. There is a Ukrainian Embassy in Australia, and before that there was a consulate. The first respondent must rely upon unwillingness.) Even where the harm feared is harm not inflicted by the state, or agents of the state, but where the state is complicit in the sense that it encourages, condones or tolerates the harm, the same process of reasoning applies. The attitude of the state is relevant to a decision whether the fear of harm is well- founded; it is consistent with the possibility that there is persecution; it is consistent with the person being outside the country of nationality because of a well-founded fear of persecution; and it supports a conclusion of unwillingness to seek (external) protection based on a fear of persecution because of the state's encouragement, condonation or tolerance of the persecution. What of a case such as the present? The Full Court held that the Tribunal failed to consider Ukraine's ability to provide internal protection, the question being "whether, in a practical sense, the State was able to provide protection particularly in light of the pervasive pattern of harm". In addition to rejecting explicitly a claim that the state encouraged the harm suffered by the first respondent, the Tribunal, on more than one occasion, said that it was not 11 [1993] 2 SCR 689 at 710. Hayne prepared to find that the Ukrainian authorities were unable or unwilling to protect him. This was in a context where there were two physical attacks on the first respondent and one on his property, the attacks were random and unco-ordinated, the police had interviewed the first respondent about one of them and he had been unable to identify his attackers, he had never made a statement to the police, and the police were found to have "responded appropriately". The first respondent is outside his country of nationality owing to a fear resulting from a violent response of some Ukrainian citizens to his religious proselytising. The Tribunal's conclusion that the violence was random and unco- ordinated was not merely an assertion. It was a finding based on the evidence, and it was directly relevant to the case the first respondent was seeking to make, which was that the violence was orchestrated and state-sponsored. The first respondent did not set out to demonstrate that his country was out of control. On the contrary, he was claiming that the government was in control, and was using its power and influence to harm people like him. The new case, raised for the first time in the Full Court, has to be related to the terms of Art 1A(2). What kind of inability to protect a person such as the first respondent from harm of the kind he has suffered would justify a conclusion that he is a victim of persecution and that it is owing to a well-founded fear of persecution that, being outside his country, he is unwilling to avail himself of his country's protection? No country can guarantee that its citizens will at all times, and in all circumstances, be safe from violence. Day by day, Australian courts deal with criminal cases involving violent attacks on person or property. Some of them may occur for reasons of racial or religious intolerance. The religious activities in which the first respondent engaged between May and December 1998 evidently aroused the anger of some other people. Their response was unlawful. The Ukrainian state was obliged to take reasonable measures to protect the lives and safety of its citizens, and those measures would include an appropriate criminal law, and the provision of a reasonably effective and impartial police force and justice system. None of the country information before the Tribunal justified a conclusion that there was a failure on the part of Ukraine to conform to its obligations in that respect. In fact, there was no evidence before the Tribunal that the first respondent sought the protection of the Ukrainian authorities, either before he left the country or after he arrived in Australia. According to the account of events he gave to the Tribunal, he made no formal complaint to the police, and when the police interviewed him after the first attack, he made no statement because he could not identify his attackers. The Tribunal considered the response of the police on that occasion to be appropriate. It is hardly surprising that there was no evidence of the failure of Ukraine to provide a reasonably effective police and justice system. That was not the case that the first respondent was seeking to Hayne make. The country information available to the Tribunal extended beyond the case that was put by the first respondent. Even so, it gave no cause to conclude that there was any failure of state protection in the sense of a failure to meet the standards of protection required by international standards, such as those considered by the European Court of Human Rights in Osman v United Kingdom12. The first respondent sought to explain and justify his unwillingness to seek the protection of the Ukrainian authorities, either at home or abroad, on the basis that they were the instigators, directly or indirectly, of the attacks on him. That case was rejected by the Tribunal. The Full Court found no fault with that part of the Tribunal's decision. The only other basis upon which the first respondent's unwillingness to seek the protection of the Ukrainian government could be justified, and treated as satisfying that element of Art 1A(2), would be that Ukraine did not provide its citizens with the level of state protection required by international standards. It is not necessary in this case to consider what those standards might require or how they would be ascertained. There was no evidence before the Tribunal to support a conclusion that Ukraine did not provide its citizens with the level of state protection required by such standards. The question of Ukraine's ability to protect the first respondent, in the context of the requirements of Art 1A(2), was not overlooked by the Tribunal. Because of the way in which the first respondent put his claim, it was not a matter that received, or required, lengthy discussion in the Tribunal's reasons. If the Full Court contemplated that the Tribunal, in assessing the justification for unwillingness to seek protection, should have considered, not merely whether the Ukrainian government provided a reasonably effective police force and a reasonably impartial system of justice, but also whether it could guarantee the first respondent's safety to the extent that he need have no fear of further harm, then it was in error. A person living inside or outside his or her country of nationality may have a well-founded fear of harm. The fact that the authorities, including the police, and the courts, may not be able to provide an assurance of safety, so as to remove any reasonable basis for fear, does not justify unwillingness to seek their protection. For example, an Australian court that issues an apprehended violence order is rarely, if ever, in a position to guarantee its effectiveness. A person who obtains such an order may yet have a well-founded fear that the order will be disobeyed. Paradoxically, fear of certain kinds of harm from other citizens can only be removed completely in a highly repressive society, and then it is likely to be replaced by fear of harm from the state. 12 (1998) 29 EHRR 245. Hayne The Tribunal's finding that it was not satisfied that the Ukrainian government was unable to protect the first respondent, and its finding that the first respondent was not a victim of persecution, must be understood in the light of the terms of Art 1A(2), the evidence that was before the Tribunal, and the nature of the case the first respondent sought to make. Once the Tribunal came to the conclusion that the contention that the Ukrainian authorities instigated or encouraged the harm suffered by the first respondent must be rejected, and that the attacks on him or his property were random and unco-ordinated, then its finding about the government's willingness and ability to protect the first respondent must be understood as a finding that the information did not justify a conclusion that the government would not or could not provide citizens in the position of the first respondent with the level of protection which they were entitled to expect according to international standards. That being so, he was not a victim of persecution, and he could not justify his unwillingness to seek the protection of his country of nationality. It was not enough for the first respondent to show that there was a real risk that, if he returned to his country, he might suffer further harm. He had to show that the harm was persecution, and he had to justify his unwillingness to seek the protection of his country of nationality. Wilcox J was correct to conclude that the Tribunal's reasons disclosed no errors of law and no jurisdictional error. The appeal should be allowed. The orders of the Full Court, save as to costs, should be set aside. In place of those orders, it should be ordered that the appeal to the Full Court be dismissed. In accordance with the terms of the grant of special leave to appeal it should be ordered that the appellant pay the respondents' costs of the appeal. McHugh 31 McHUGH J. The Full Court of the Federal Court of Australia set aside a decision of the Refugee Review Tribunal ("the Tribunal") that the respondents were not refugees within the meaning of the Refugees Convention13. The Full Court held that, in reaching its decision, the Tribunal had fallen into jurisdictional error. The error consisted in failing to consider whether the respondents might suffer future harm from random acts committed by private individuals because of the male respondent's religious belief and whether the government of their country of nationality was able in a practical sense to prevent such harm occurring. The issue in this appeal is whether the Full Court erred in holding that the Tribunal had fallen into jurisdictional error. In my opinion, the Tribunal acted within its jurisdiction in reaching its decision and committed no error of law that required its decision to be set aside. When a person fears persecution for a Convention reason from the random and uncoordinated acts of private individuals, the ability of that person's country to eliminate or reduce the risk of persecution may be relevant in determining whether the person has a well-founded fear of persecution. It is likely to be relevant to that issue when the persecutor is known or readily ascertainable. But determining whether the government of the country of nationality is able to prevent harm from the random and uncoordinated acts of private individuals is not a necessary element in determining whether the person's fear of harm from random acts is well-founded. The need for such a determination is a variable factor that may be decisive in some cases but irrelevant in others. Nor is the absence of protection of the person by the State, in the context of a purported duty to protect, an element of persecution. In determining the issue of well-founded fear, the critical question is whether the evidence established a real chance that the asylum seeker will be persecuted for a reason proscribed by the Convention, if returned to the country of nationality. If the evidence shows that the persecutors have targeted the asylum seeker, the ability of the country of nationality to protect that person will be relevant to the issue of well-founded fear. If the evidence shows no more than that private individuals randomly harm the class of persons to which the asylum seeker belongs but fails to show that that person has a real chance of suffering harm, the ability of the country to eliminate those acts is irrelevant. Every year motor car accidents cause the death of or serious injury to thousands of Australians. But that does not mean that every driver who fears death or serious injury from a motor accident has a well-founded fear that he or she will suffer death or serious injury in that way. The inability of Australian governments to 13 The Convention relating to the Status of Refugees done at Geneva on 28 July 1951, as amended by the Protocol relating to the Status of Refugees done at New York on 31 January 1967. McHugh eliminate those deaths and injuries does not determine whether the fear is well- founded. In the present case, the Tribunal found that in the past the male respondent had not suffered acts of persecution for a Convention reason and that there was only a remote chance that he would suffer such acts in the future. That was a factual conclusion open to the Tribunal and was not reviewable in the Federal Court. Having made that finding of fact, the Tribunal was not bound to determine whether the country of nationality had the ability β in a practical sense or otherwise β to eliminate those acts. Statement of the case The respondents, who are Ukrainian nationals, are de facto husband and wife. The husband is a Jehovah's Witness; the wife is not. They arrived in Australia in December 1998. In February 1999, the husband applied for a protection visa on the ground that he was a refugee who had fled Ukraine to escape religious persecution. The wife also applied for a protection visa. Her claim for asylum was a derivative one based on her husband's claim. Australia has protection obligations under the Refugees Convention to any person who is a refugee. Article 1A(2) defines a refugee as a person who: "owing to well-founded fear of being persecuted for reasons of race, religion, nationality, membership of a particular social group or political opinion, is outside the country of his nationality and is unable or, owing to such fear, is unwilling to avail himself of the protection of that country A delegate of the Minister for Immigration and Multicultural Affairs refused the respondents' applications. The Tribunal affirmed the delegate's decision. The Tribunal found that the husband had been assaulted on two occasions and that a fire had been lit outside his property on another occasion "because some individuals were affronted by his religious beliefs". It was the husband's case before the Tribunal that the government of Ukraine encourages the persecution of Jehovah's Witnesses and that members of its police force condone violence towards Jehovah's Witnesses. He claimed that the harm that he suffered was the result of the policies of the Ukrainian government. In evidence before the Tribunal, the husband said that Ukraine was "a country where they whip up hatred against the JWs". He also said "the authorities do not want young people (like the [husband]) being active in the church as they may be more successful in spreading the word". The husband said that the arson attack "confirmed what dreadful conditions there were for members of the JW faith in the Ukraine". However, the Tribunal rejected the husband's claim that "the government in the Ukraine and ... its tame press ... actively encourages McHugh The Tribunal found that the incidents of which the husband complained were individual and random incidents and did not constitute persecution. It rejected the claim that the Ukrainian government encouraged or condoned attacks on Jehovah's Witnesses. The Tribunal found that, although a police officer came to the husband's apartment after the first assault, he took the matter no further when the husband "for some reason" did not make a statement. However, the husband claimed that he went to the police station after the second assault and that the police officers would not take his or another person's statement. The Tribunal found that, even if this was so, there were at least two police stations where the husband could have complained. One of them was the station that had sent the officer who had investigated the first assault. In addition, said the Tribunal, the husband could have gone to the office of the Procurator-General. He also had the option of complaining to his Church. In concluding that the Ukrainian government did not encourage or condone attacks on the Witnesses, the Tribunal took into account a "recent Country Information report" of the Department of Foreign Affairs and Trade. That report stated that Jehovah's Witnesses were considered to be one of the traditional religions in Ukraine which "are respected almost as native traditional religions". The Tribunal said that the official website of "the Jehovah's Witnesses, a sophisticated and well-resourced organisation", showed that its membership in Ukraine was increasing and that it had "823 congregations across the country". It said that these matters indicated "that the organisation is not being suppressed by the authorities; nor are Ukrainians terrified to join or frightened to continue their membership of the church". The Tribunal said: "On the basis of the above information, the Tribunal is not satisfied that the authorities can be said to be unwilling or unable to protect their citizens." (emphasis added) Later, the Tribunal said: "In short, the Tribunal accepts the independent evidence of the US State Department, the British Home Office and DFAT, but more particularly of the official Jehovah's Witness website itself, that Jehovah's Witnesses in the Ukraine do not face State-sanctioned persecution. It accepts that harm may sometimes befall individual church members, probably more frequently when they go out and proselytise β putting themselves deliberately into an interaction with members of the general public β but that this harm befalls them on a one-off, individual basis." The respondents applied to the Federal Court of Australia for judicial review of the Tribunal's decision. Wilcox J, who heard the application, found no McHugh error in the Tribunal's reasons and dismissed the application. However, the Full Court of the Federal Court allowed an appeal against his Honour's decision. After stating that "the Tribunal concluded that there was no evidence of general condonation or active participation in persecution to support the claim that the government was unable or unwilling to protect its citizens", the Full Court said: "However, the Tribunal did not address the question of possible future harm befalling the [respondents] or whether the Ukrainian government was able, in a practical sense, to prevent such harm, given the history of violence towards [the husband] on account of his religious beliefs. These matters were relevant in determining whether the [respondents'] fear of persecution was well-founded. The evidence, as accepted by the Tribunal, was that the [husband], over a period of months had been assaulted on two occasions, suffered property damage which may have led to personal harm, and had been dismissed from his employment because of his religious beliefs. These findings clearly raised an issue about whether there was a risk of harm for a Convention reason that the authorities could not provide protection against." The Full Court went on to say: "The Tribunal accepted that the harm inflicted on the [husband] was carried out by Ukrainian citizens for reasons of religion, namely, 'his new- found religious beliefs'. The acts of harm were such that they could have been accepted, severally or in combination, as acts of persecution ... Therefore, the harm suffered could have been regarded by the Tribunal as past acts of persecution inflicted for a Convention reason, and highly relevant to the issue before the Tribunal, namely, was there a real chance ... that the [husband] may suffer acts of persecution in the future, thereby making his fear of such persecution a well-founded fear." The Full Court then summarised what it saw as the husband's case before the Tribunal. It said: "The [husband's] case was that he feared the continuation of acts of harm for reasons of religion committed by Ukrainian citizens from time to time. That is, such acts reflected an attitude within the Ukrainian populace that a person such as the [husband] should be so treated because of profession of adherence to the Jehovah's Witness religion. The [husband] feared such assaults would continue because of the degree of hostility in the community to his religion and the apparent belief that proselytisers for the Jehovah's Witness' religion should be so dealt with. Contrary to the statement of the Tribunal, such events as suffered, or McHugh feared, by the [husband] did not fail to constitute persecution if they were 'individual attacks with different perpetrators'." However, it is difficult to accept that this is an accurate statement of the husband's case before the Tribunal. The Full Court's summary leaves out the fact that the husband's case before the Tribunal was that the Ukrainian government encouraged attacks on Jehovah's Witnesses. Before the Tribunal, the husband's case was that the State was responsible for the persecution that he feared. It does not seem to have been any part of his case before the Tribunal that he feared persecution by private citizens and that he was a refugee because the Ukrainian government was unable to prevent harm to him. It is unnecessary to determine whether the appeal should be allowed on the ground that there was no jurisdictional error as found by the Full Court because the ability of the Ukrainian government to protect the husband was never an issue before the Tribunal. As will appear, even if that issue had been raised, the findings of the Tribunal did not require it to be decided. After finding that the Tribunal had only considered whether the husband sought and failed to obtain protection from the Ukrainian authorities, the Full Court said that "[t]here was no specific consideration of the State's ability, in a practical sense, to provide protection". The Full Court then said: "The Tribunal failed to consider the right question, namely, whether, in a practical sense, the State was able to provide protection particularly in light of the pervasive pattern of harm. That question related directly to whether the [husband and wife's] fear of persecution was well-founded and ultimately relevant to their application for a protection visa." The Full Court set aside the decision of the Tribunal and remitted the matter to it for further hearing. Subsequently, this Court granted the Minister special leave to appeal against the Full Court's order. The issues It is not clear what the Full Court had in mind when it referred to a "pervasive pattern of harm". In its context, it must mean that harm to Jehovah's Witnesses in Ukraine is widespread and follows a pattern. However, the Tribunal made no such finding. It had found that three incidents concerning the husband had occurred, that his attackers were different on each occasion, and that each group was unknown to the other groups. The Tribunal also accepted: McHugh "that harm may sometimes befall individual church members, probably more frequently when they go out and proselytise ... but that this harm befalls them on a one-off, individual basis". Three incidents do not constitute a "pervasive pattern". Nor do those incidents in combination with the finding that harm "may sometimes befall" Jehovah's Witnesses. A finding that there was a pervasive pattern of harm is a factual finding that the Tribunal did not make and the phrase "pervasive pattern of harm" is not synonymous with what it did find. Indeed, the Tribunal's findings negate the idea that in Ukraine there is a widespread pattern of harmful acts against Jehovah's Witnesses. In a refugee appeal, the Full Court has no jurisdiction or power to make factual findings. The issues for determination in the appeal must be considered on the facts that the Tribunal did or did not find. The question then is whether the Tribunal fell into jurisdictional error in failing to determine whether "in a practical sense" the State was able to protect the husband, as a member of the Jehovah's Witness Church, from one-off, individual harmful incidents that from time to time befall those members. The Full Court thought that determining this issue was a necessary element in determining whether the husband and wife had a well-founded fear of persecution. Thus, this question raises issues concerning: a well-founded fear of persecution; a State's obligation to protect its citizens from Convention-related attacks by non-State agents; and a Convention signatory's obligation to give asylum to persons who are persecuted by private citizens in circumstances where the home State is unable to protect those persons against such persecution. The purpose of the Convention The chief object of the Convention is to impose obligations on the signatories to the Convention to provide protection and equality of treatment for the nationals of countries who cannot obtain protection from their own countries14. That follows from the obligation of the signatories to protect a person who is outside his or her country, has a well-founded fear of persecution for a Convention reason and "is unable or, owing to such fear, is unwilling to 14 Lambert, "The Conceptualisation of 'Persecution' by the House of Lords: Horvath v Secretary of State for the Home Department", (2001) 13 International Journal of Refugee Law 16 at 18, 20; Hathaway, The Law of Refugee Status, (1991) at 105; cf Minister for Immigration and Multicultural Affairs v Khawar (2002) 210 CLR 1 at 11 [24] per Gleeson CJ. McHugh avail himself of the protection of that country". However, views differ as to the extent of a signatory's obligation where non-State agents carry out the persecution15. The accountability theory The "accountability" theory reflects one of these views of the Convention. Under the accountability theory, a signatory State is required to extend protection only when the government of the country of nationality is responsible for the persecution of a person for a Convention reason either by inflicting, condoning or tolerating the persecution16. Under this theory, a signatory State owes no obligation in respect of persecution caused by non-State agents that the government of the country of nationality does not condone or tolerate17. Thus, no Convention obligation is owed where the government of the country of nationality has reacted effectively to prevent the persecution or the persecution is beyond its resources or capacity to prevent18. That is because, on the accountability theory, the country of nationality cannot be held responsible for the acts of non-State agents that it has not condoned or tolerated19. The accountability theory of the Convention prevails in Germany20. The German Federal Administrative Court, following principles laid down by the Federal Constitutional Court, has held that, if the country of nationality "is generally unable to provide protection including when it attempts to do so, refugee status 15 Goodwin-Gill, The Refugee in International Law, 2nd ed (1996) at 72-74. 16 Wilsher, "Non-State Actors and the Definition of a Refugee in the United Kingdom: Protection, Accountability or Culpability?", (2003) 15 International Journal of Refugee Law 68 at 71. 17 Wilsher, "Non-State Actors and the Definition of a Refugee in the United Kingdom: Protection, Accountability or Culpability?", (2003) 15 International Journal of Refugee Law 68 at 71; Grahl-Madsen, The Status of Refugees in International Law, vol 1 (1966) at 189. 18 European Council on Refugees and Exiles, Non-State Agents of Persecution and the Inability of the State to Protect β the German Interpretation, London, September 2000 at 6-7. 19 European Council on Refugees and Exiles, Non-State Agents of Persecution and the Inability of the State to Protect β the German Interpretation, London, September 2000 at 6. 20 European Council on Refugees and Exiles, Non-State Agents of Persecution and the Inability of the State to Protect β the German Interpretation, London, September 2000 at 7. McHugh will be denied"21. France22, Italy23 and Switzerland24 are other countries that have applied the accountability theory of the Convention although these countries now "appear to have broken away, if not in doctrine, in practice, though in a discretionary and for Immigration and Multicultural Affairs v Khawar26, Gummow J and I said that there was no need to determine, for the purpose of that case, whether the accountability theory was part of Australian law. informal way"25. In Minister The protection theory Many countries that reject the accountability theory β and they constitute the majority of signatories β favour the "protection" theory of the Convention27. That theory proceeds from the widely accepted premise that the object of the Convention is to provide "substitute protection" and "fair treatment" where such treatment is lacking in the country of nationality28. Professor James Hathaway, a 21 European Council on Refugees and Exiles, Non-State Agents of Persecution and the Inability of the State to Protect β the German Interpretation, London, September 2000 at 7. 22 Goodwin-Gill, The Refugee in International Law, 2nd ed (1996) at 72-73; European Council on Refugees and Exiles, Non-State Agents of Persecution and the Inability of the State to Protect β the German Interpretation, London, September 2000 at 14. 23 European Council on Refugees and Exiles, Non-State Agents of Persecution and the Inability of the State to Protect β the German Interpretation, London, September 2000 at 14. 24 European Council on Refugees and Exiles, Non-State Agents of Persecution and the Inability of the State to Protect β the German Interpretation, London, September 2000 at 14. 25 European Council on Refugees and Exiles, Non-State Agents of Persecution and the Inability of the State to Protect β the German Interpretation, London, September 2000 at 14. 26 (2002) 210 CLR 1 at 25-26 [73]-[75]. In Minister for Immigration and Multicultural Affairs v Haji Ibrahim (2000) 204 CLR 1 at 53-55 [151]-[155], 80-81 [228], Gummow and Callinan JJ also left the question open. 27 Horvath v Secretary of State for the Home Department [2001] 1 AC 489 at 496C. 28 R v Secretary of State for the Home Department, Ex parte Sivakumaran [1988] AC 958 at 992-993; Horvath v Secretary of State for the Home Department [2001] 1 AC 489 at 495, 509; Lambert, "The Conceptualisation of 'Persecution' by (Footnote continues on next page) McHugh leading exponent of the protection theory, has argued that "refugee law is designed to interpose the protection of the international community only in situations where there is no reasonable expectation that adequate national protection of core human rights will be forthcoming"29. He has referred to this class of protection as "surrogate or substitute protection"30. Influenced by Professor Hathaway's writings, the House of Lords31 and the New Zealand Court of Appeal32 have determined a signatory State's Convention obligations by reference to the protection theory. In Horvath v Secretary of State for the Home Department33, Lord Hope of Craighead said: "If the principle of surrogacy is applied, the criterion must be whether the alleged lack of protection is such as to indicate that the home state is unable or unwilling to discharge its duty to establish and operate a system for the protection against persecution of its own nationals." (emphasis in original) The protection theory imposes greater obligations on signatory States than the accountability theory imposes. It can require a signatory State to provide protection in cases where a person is likely to be persecuted for a Convention reason as the result of the inability of the country of nationality to provide protection. State complicity β whether by perpetration, condonation or approbation β is not a requirement of the protection theory of the Convention because it is based on the premise that the purpose of the Convention is to help those who are in need of international protection34. According to that theory, however, not all those who are persecuted for a Convention reason require international protection. Proponents of the theory also contend that "[t]he purpose of refugee law is to offer surrogate protection when [the country of the House of Lords: Horvath v Secretary of State for the Home Department", (2001) 13 International Journal of Refugee Law 16 at 18, 20. 29 Hathaway, The Law of Refugee Status, (1991) at 124. 30 Hathaway, The Law of Refugee Status, (1991) at 135. 31 Horvath v Secretary of State for the Home Department [2001] 1 AC 489. 32 Butler v Attorney-General [1999] NZAR 205. 33 [2001] 1 AC 489 at 495H. 34 KΓ€lin, "Non-State Agents of Persecution and the Inability of the State to Protect", (2001) 15 Georgetown Immigration Law Journal 415 at 423. McHugh nationality] fails in its duty"35 to protect its citizens. Consequently, there is no obligation on a signatory State to give refugee protection merely because, upon return to the home country, non-State agents might breach a person's rights, even if the breach will be committed for a Convention reason. Thus, according to proponents of the protection theory, persecution by non-State actors occurs only when there is a violation of a right and the State has a duty to prevent that violation36. And, as interpreted by the House of Lords in Horvath, a person may not be a refugee although that person has a well-founded fear of persecution by non-State agents. In Horvath, Lord Hope of Craighead said37: "A person may satisfy the fear test because he has a well-founded fear of being persecuted, but yet may not be a 'refugee' within the meaning of the article because he is unable to satisfy the protection test." Lord Hope went on to say38: "I would hold therefore that, in the context of an allegation of persecution by non-state agents, the word 'persecution' implies a failure by the state to make protection available against the ill-treatment or violence which the person suffers at the hands of his persecutors. In a case where the allegation is of persecution by the state or its own agents the problem does not, of course, arise. There is a clear case for surrogate protection by the international community. But in the case of an allegation of persecution by non-state agents the failure of the state to provide the protection is nevertheless an essential element. It provides the bridge between persecution by the state and persecution by non-state agents which is necessary in the interests of the consistency of the whole scheme." The protection theory should be rejected This construction of the Convention, however, leads to the implausible result that what is "persecution" for the purpose of the Convention when carried 35 Lambert, "The Conceptualisation of 'Persecution' by the House of Lords: Horvath v Secretary of State for the Home Department", (2001) 13 International Journal of Refugee Law 16 at 20. 36 Lambert, "The Conceptualisation of 'Persecution' by the House of Lords: Horvath v Secretary of State for the Home Department", (2001) 13 International Journal of Refugee Law 16 at 20. 37 [2001] 1 AC 489 at 497F. 38 [2001] 1 AC 489 at 497G-498A. McHugh out by the State is not persecution when carried out by non-State agents. The construction was developed from the analysis of Art 1A(2) by Lord Lloyd of Berwick in Adan v Secretary of State for the Home Department39 who said that "the asylum-seeker must satisfy two separate tests: what may, for short, be called 'the fear test' and 'the protection test'". In Horvath40, Lord Hope of Craighead, basing himself on this statement, held that persecution required an absence of State protection. Lord Lloyd, who also delivered a speech in Horvath, adhered to the two separate tests, although his Lordship came to the same result41. Thus, when the State or its agents persecute, the protection test is automatically satisfied. Yet the same acts carried out by non-State agents do not constitute persecution within the meaning of the Convention. The applicant must show both persecutory acts by the non-State agents and that the State has breached its duty to protect the applicant. The decision in Horvath42 illustrates the point. In Horvath, the House unanimously held that a person was not a refugee, within the meaning of Art 1A(2), even though the person had a well-founded fear of violence from "skinheads"43 against whom the police of the home State had failed to provide "I consider that the obligation to afford refugee status arises only if the person's own state is unable or unwilling to discharge its own duty to protect its own nationals. I think that it follows that, in order to satisfy the fear test in a non-state agent case, the applicant for refugee status must show that the persecution which he fears consists of acts of violence or ill- treatment against which the state is unable or unwilling to provide protection. The applicant may have a well-founded fear of threats to his life due to famine or civil war or of isolated acts of violence or ill- treatment for a Convention reason which may be perpetrated against him. But the risk, however severe, and the fear, however well founded, do not entitle him to the status of a refugee." 39 [1999] 1 AC 293 at 304E. 40 [2001] 1 AC 489 at 497F. 41 [2001] 1 AC 489 at 503A-G. 43 Horvath v Secretary of State for the Home Department [2001] 1 AC 489 at 493H. 44 [2001] 1 AC 489 at 499G-500A. McHugh Lord Clyde thought that it was not possible to give a complete or comprehensive formulation of what constituted the relevant level of protection. "The use of words like 'sufficiency' or 'effectiveness', both of which may be seen as relative, does not provide a precise solution. Certainly no one would be entitled to an absolutely guaranteed immunity. That would be beyond any realistic practical expectation. Moreover it is relevant to note that in Osman v United Kingdom (1998) 29 EHRR 245 the European Court of Human Rights recognised that account should be taken of the operational responsibilities and the constraints on the provision of police protection and accordingly the obligation to protect must not be so interpreted as to impose an impossible or disproportionate burden upon the authorities ... There must be in place a system of domestic protection and machinery for the detection, prosecution and punishment of actings contrary to the purposes which the Convention requires to have protected. More importantly there must be an ability and a readiness to operate that machinery. But precisely where the line is drawn beyond that generality is necessarily a matter of the circumstances of each particular case." Both the House of Lords in Horvath and Lord Lloyd of Berwick in Adan concluded that the words "outside the country of his nationality and is unable or, owing to such fear, is unwilling to avail himself of the protection of that country" required the construction they placed on Art 1A(2). As the United Nations High Commissioner for Refugees has pointed out46, on this view of the concluding words, "protection by the state apparatus inside the country of origin ... forms an indispensable part of the test for refugee status, on an equal footing with the well- founded fear of persecution test". In Khawar, Gummow J and I rejected this construction of Art 1A(2)47. We held that the concluding words of Art 1A(2) referred to external protection and not internal protection. We rejected the "internal protection" theory accepted by the House of Lords in Horvath. We concluded that the reference to the unwillingness of the applicant to avail him or herself of protection meant unwillingness to be returned to the country of nationality where the feared persecution could occur. It was not directed to protection within the country of nationality but to seeking diplomatic or consular protection available to citizens 45 [2001] 1 AC 489 at 510F. 46 "The International Protection of Refugees: Interpreting Article 1 of the 1951 Convention Relating to the Status of Refugees", (2001) 20 Refugee Survey Quarterly 77 at 87. 47 (2002) 210 CLR 1 at 24-25 [72]-[73]. McHugh who are outside that country. We adopted48 the statement of the United Nations High Commissioner for Refugees: "[I]t may surely be legitimate for a person who fears non-state agents not to accept diplomatic protection outside the country as this would provide the country of origin with the possibility of lawfully returning him or her to that country. This would expose the refugee to the feared harm and therefore would make his or her unwillingness to avail of such external protection both reasonable and 'owing to such fear' of persecution." For the reasons that Gummow J and I gave in Khawar, the protection theory of the Convention, as expounded by the House of Lords in Horvath, does not represent the law of Australia. The judgment of Gleeson CJ in Khawar also rejects the view that "protection" in Art 1A(2) refers to internal protection49. If conduct constitutes persecution for a Convention reason when carried out by the State or its agents, it is persecution for a Convention reason when carried out by non-State agents. In neither its ordinary nor its Convention meaning does the term "persecution" require proof that the State has breached a duty that it owed to the applicant for refugee status. Where the State is involved in persecution, it will certainly be in breach of its duty to protect its citizens from persecution. But that is beside the point. State culpability is not an element of persecution. The attitude of the State may be relevant, however, to whether a person has a well-founded fear of persecution, a point recognised by Gleeson CJ in Khawar50. The accountability theory should also be rejected Rejection of the protection theory of the Convention is not necessarily inconsistent with the accountability theory of the Convention. But once it is accepted that State culpability is not an element of "persecution", it is difficult to accept the accountability theory. It could only be accepted if the Convention was exclusively concerned with State persecution of persons or if international refugee law in 1951 was concerned only with the creation of rules applicable to the relationship between States and their citizens. German courts have adopted both these rationales to justify the accountability theory of the Convention51. 48 (2002) 210 CLR 1 at 25 [73]. 49 (2002) 210 CLR 1 at 10 [21]. 50 (2002) 210 CLR 1 at 11 [24]. 51 European Council on Refugees and Exiles, Non-State Agents of Persecution and the Inability of the State to Protect β the German Interpretation, London, September 2000 at 4-6. McHugh No doubt the widespread State persecution of refugees was the catalyst for enacting the Convention. But the Convention's reference to persecution is general; it does not refer to persecution by a State or its agents. To read down the general words of the Convention to give effect to the catalyst for the Convention would be contrary to the principles for interpreting treaties as laid down in Art 31 of the Vienna Convention on the Law of Treaties. Under those principles, primacy is given to the text although context, object and purpose must also be considered52. Furthermore, nothing in the Convention supports the view of the German courts that the Convention was concerned with the creation of rules applicable to the internal relations between States and their citizenry. On the contrary, the terms of the Convention show that it was concerned with imposing obligations on the signatories to the Convention. It was not directed to persecuting States; it was directed to the signatories to the Convention. It specified the criteria for determining who was a refugee and what obligations each signatory country owed to refugees who sought asylum in that country. Moreover, as Professor Goodwin-Gill has pointed out, "there is no basis in the 1951 Convention, or in general international law, for requiring the existence of effective, operating institutions of government as a pre-condition to a successful claim to refugee status"53. Hence, to read a requirement of State conduct into the Convention's definition of "refugee" is to add a further element to the definition54. In my view, the accountability theory has no part to play in interpreting Art 1A(2) of the Convention. Well-founded fear of persecution The findings of the Tribunal show that the individual assaults and the other conduct of which the husband complained were not part of a pattern. Nor did they involve sustained discriminatory conduct. The Tribunal regarded them as individual acts by different perpetrators. However, the Full Court said that "[t]hese findings clearly raised an issue about whether there was a risk of harm 52 Applicant A v Minister for Immigration and Ethnic Affairs (1997) 190 CLR 225 at 53 Goodwin-Gill, The Refugee in International Law, 2nd ed (1996) at 73-74. 54 KΓ€lin, "Non-State Agents of Persecution and the Inability of the State to Protect", (2001) 15 Georgetown Immigration Law Journal 415 at 418. McHugh for a Convention reason that the authorities could not provide protection against". And, as I have said, the Full Court held that the Tribunal had fallen into jurisdictional error by not considering whether, in a practical sense, the State was able to provide protection against individual acts by different perpetrators. Hence, as I have indicated, the Full Court must have considered that that question was a necessary element in determining whether the husband and wife had a well-founded fear of persecution. In its ordinary meaning, persecution involves selective harassment or oppression of any kind. The terms "harassment" and "oppression", particularly the former, imply repetitive, or the threat of repetitive, conduct. In its ordinary meaning, persecution always involves discrimination of some kind although discrimination is not necessarily persecution55. The harassment or oppression will ordinarily be motivated by enmity or by the desire to achieve an objective. It frequently involves the infliction of systematic harm over a period directed against those who hold particular beliefs or who refuse to comply with the persecutor's wishes. In the Convention, however, the notion of persecution is not at large. Either expressly or by necessary implication or inference, the Convention controls and narrows the meaning of persecution for its purposes. Thus, the selectivity and motivation of the harassment or oppression is defined by reference to five matters: reasons of race, religion, nationality, political opinion and membership of a particular social group56. Further, not every kind of harassment or oppression constitutes persecution for the purpose of the Convention. The Convention is concerned with persons who are outside their country of nationality and are unable or unwilling to seek the protection of that country because of a well-founded fear of what will happen to them if they return to that country. This factor, together with the imposition of obligations on the country where asylum is sought, indicates that the feared harm must be of a serious nature that goes beyond simple discrimination and requires the country of asylum to protect the refugee. It is not to be supposed that the Convention required signatory States to give asylum to persons who were persecuted for a Convention reason but who were unlikely to suffer serious infringement of their rights as human beings. Thus, for the purpose of the Convention, the feared harm will constitute persecution only if it is so oppressive that the individual 55 Chan v Minister for Immigration and Ethnic Affairs (1989) 169 CLR 379 at 388; Minister for Immigration and Multicultural Affairs v Haji Ibrahim (2000) 204 CLR 1 at 18-19 [55]; Minister for Immigration and Multicultural Affairs v Khawar (2002) 210 CLR 1 at 26 [76]-[77]. 56 Applicant A v Minister for Immigration and Ethnic Affairs (1997) 190 CLR 225 at McHugh cannot be expected to tolerate it so that refusal to return to the country of the applicant's nationality is the understandable choice of that person57. Implicit in that statement is the further proposition that there is a real chance that the feared conduct will be repeated or, if it has not already occurred, will occur, if the asylum seeker returns to the country of nationality. Most forms of persecution involve sustained discriminatory conduct or a pattern of discriminatory conduct against an individual or a group of individuals58. But a well-founded fear of persecution may be established for the purpose of the Convention although it does not derive from conduct that is part of a pattern or involve sustained discriminatory conduct. The fear may arise from an announcement as to a future course of conduct or from a single act59 that was directed at the asylum seeker or at others. It is not necessary that the asylum seeker should have been persecuted in the past60. The Convention looks to the future. What has occurred in the past does not determine whether a person is a refugee for the purpose of the Convention. In determining whether that person has a well-founded fear that he or she will be persecuted if returned to the country of nationality, the past is a guide β a very important guide β as to what may happen61. But that is all. The Convention does not refer to persecutors. It refers to persecution, not persecutors. The persecution to which the Convention refers may be carried out by the State or its agents or by one or more private citizens62. From the victim's point of view, the result is the same. In determining whether a person has a well-founded fear of persecution, however, it may matter a great deal whether the State or its agents or a private individual or individuals will inflict the persecution. 57 Minister for Immigration and Multicultural Affairs v Haji Ibrahim (2000) 204 CLR 58 cf Minister for Immigration and Multicultural Affairs v Haji Ibrahim (2000) 204 CLR 1 at 7 [18] per Gaudron J. 59 Minister for Immigration and Multicultural Affairs v Haji Ibrahim (2000) 204 CLR 60 Minister for Immigration and Multicultural Affairs v Haji Ibrahim (2000) 204 CLR 1 at 7 [16] per Gaudron J. 61 Minister for Immigration and Ethnic Affairs v Guo (1997) 191 CLR 559 at 574- 62 Minister for Immigration and Multicultural Affairs v Haji Ibrahim (2000) 204 CLR 1 at 7 [17] per Gaudron J. McHugh Where fear of persecution springs from the conduct of the State and there is a real chance that the conduct will continue and affect the asylum seeker, a finding that the fear is well-founded will be virtually inevitable. Similarly, where the persecutory conduct of State agents is widespread, a finding that the fear is well-founded will be virtually inevitable. On those hypotheses, refusal to return to the country of nationality is the only practical means of avoiding the real chance of persecution. More difficult issues arise where the persecution is the work of private individuals, particularly where there are many of them and their conduct is uncoordinated, or where the persecution is perpetrated by isolated State agents. As Gaudron J pointed out in Minister for Immigration and Multicultural Affairs v Haji Ibrahim63, "a well-founded fear of persecution may be based on isolated incidents which are intended to, or are likely to, cause fear on the part of persons of a particular race, religion, nationality, social group or political opinion". If the threat of persecution arises from an individual or a small group of individuals and the State is prepared to act against the individual or group, in most cases the threat is likely to be eliminated or greatly reduced. In such a case, the proper conclusion may well be that the fear is not well-founded because there is no real chance that the persecutory conduct will occur. If the State refuses to act or tolerates the conduct of the individual or group, the State itself will be complicit. On that hypothesis, unless there is only a remote chance that the asylum seeker will be persecuted, ordinarily the proper conclusion is that the fear is well-founded. Both the State and the individual or group will be guilty of persecution. The case that presents most difficulty is one where harm to individuals for a Convention reason may come from any one or more of a widely dispersed group of individuals and the State is willing but is unable to prevent much of that harm from occurring. In societies divided by strongly held ethnic or religious views, it commonly happens that members of one group have a real chance of suffering harm β often violent harm β because of the pervasive but random acts of members of another group. Such harm occurs although the State makes every effort to prevent it. In such cases, it would be a misuse of language to say that the fear of persecution is not well-founded because the State has "a system of domestic protection and machinery for the detection, prosecution and punishment of actings contrary to the purposes which the Convention requires to have protected"64. In Horvath, relying on the protection theory, the House of Lords limited the scope of the definition of "refugee" by requiring that a State be unwilling or unable to eliminate persecutory conduct by private individuals. Nothing in the Convention, however, supports this limitation. It should not be read into the Convention. 63 (2000) 204 CLR 1 at 7 [16]. 64 Horvath v Secretary of State for the Home Department [2001] 1 AC 489 at 510H. McHugh If there is a real chance that the asylum seeker will be persecuted for a Convention reason, the fear of persecution is well-founded65 irrespective of whether law enforcement systems do or do not operate within the State. In Haji Ibrahim, all members of this Court recognised66 that persons may be persecuted for a Convention reason although the State is unable to protect them because a civil war is raging in the country. No different view should be taken where in peace-time a State is unable to protect its citizens from harm inflicted for a Convention reason. As Gleeson CJ pointed out in Haji Ibrahim67, "[p]ersecution and disorder are not mutually exclusive". In the same case, Gaudron J said that persecution may exist for the purpose of the Convention "whether or not the conduct occurs in the course of a civil war, during general civil unrest or ... [where] it may not be possible to identify any particular person or group of persons responsible for the conduct said to constitute persecution"68. In order to establish that fear is well-founded in cases of private persecution, an asylum seeker will no doubt have to show more than that persons holding the same beliefs, opinions or membership of races, nationality or particular social groups are being persecuted. The asylum seeker will have to show that there is a real chance that he or she will be one of the victims of that persecution. That person will have to show some fact or circumstance that indicates that there is a real chance that he or she will be among the victims. Thus, it may be enough to show that, by reason of the conduct of the asylum seeker, he or she stands a greater chance of harm than other persons who hold the same beliefs or opinions, or membership of the particular group. Or it may be enough to show that a very high percentage of such persons are persecuted for a Convention reason and the circumstances of the applicant are similar to those who have been persecuted. In many β perhaps most β cases, however, more will be needed than proof that a percentage of members holding beliefs, opinions or membership similar to the asylum seeker have been harmed for a Convention reason. Statistical percentages based on experience of past events are usually an accurate guide to the chance of similar events occurring in the future. Insurance companies and financial institutions, for example, bet heavily on such statistical percentages 65 Chan v Minister for Immigration and Ethnic Affairs (1989) 169 CLR 379 at 389, 66 (2000) 204 CLR 1 at 5 [7], 7 [18], 24 [73], 51-53 [145]-[150], 65-66 [185]-[188], 67 (2000) 204 CLR 1 at 5 [7]. 68 (2000) 204 CLR 1 at 7 [18]. McHugh when estimating the chance of future events occurring. But a percentage chance based on the results of a number of events, by itself, seldom throws light on whether a future event is likely to affect any particular person, place or property. To make the percentage useful for predicting the occurrence of an individual event, the predictor has to know a good deal about the inputs that form the basis of the statistical calculation. The predictor must know, for example, the source and nature of the inputs, the period and the area over which they were collected and their significance for the subject of the prediction. Each year, a significant percentage of Australians, aged between 50 and 60, suffer heart attacks. But that says little about the chance of any individual in that age bracket suffering a heart attack. The statistical chance of such a person having a heart attack has predictive value only when other factors concerning the individual are known β weight, levels of cholesterol or blood pressure, smoking, diet, exercise and genetic predisposition, for example. When they are known, their correlation with the risk of heart attack may convert an insignificant percentage concerning the age group as a whole into a high risk for the individual. Hence, in determining whether an asylum seeker has a well-founded fear of persecution, usually the decision-maker has to know a good deal more than that other persons holding similar beliefs, opinions or membership have been persecuted. It will ordinarily be necessary to know whether the circumstances of those persons were similar in all material respects to those that the asylum seeker will likely face. Only then will the experience of other members of the relevant category throw light on whether there is a real chance that the asylum seeker will be persecuted. However, once the asylum seeker is able to show that there is a real chance that he or she will be persecuted, refugee status cannot be denied merely because the State and its agencies have taken all reasonable steps to eliminate the risk. Nothing in the Convention supports such a conclusion. The Tribunal did not err It follows that the ability of the Ukrainian government to protect the husband from harm because of his religious beliefs was potentially relevant to whether his fear of persecution was well-founded. But it was relevant only if there was otherwise a real chance that private individuals would persecute the husband in the future. If the Tribunal found that there was no real chance of private individuals persecuting him, the ability or inability of Ukraine to protect him from harm did not arise. And the reasons of the Tribunal show that it found as a fact that the husband had not been persecuted in the past and there was only a remote chance that he would be persecuted in the future. The Tribunal said: McHugh "The Tribunal is satisfied that the [husband] has not suffered harm amounting to persecution for a Convention reason in the past and that the chance that he would so suffer in the reasonably foreseeable future is remote. It follows that the Tribunal is not satisfied that [he] has a well founded fear of persecution for a Convention reason. He is not a refugee." After examining the evidence concerning the activities of Jehovah's Witnesses in Ukraine, the Tribunal had earlier said: "This independent evidence does not negate the fact that the [husband] was assaulted and that he was assaulted because some individuals were affronted by his religious beliefs. However, these incidents must be seen as individual and random incidents of harm directed at the [husband] and not as persecution for a Convention reason." In its reasons, the Full Court said that the Tribunal had "erred in law if it understood that harm inflicted for a Convention reason could not constitute persecution within the meaning of the Convention unless inflicted regularly in a coordinated pattern". However, the Full Court made no finding that the Tribunal had so erred, and there is no reason to think that the Tribunal fell into this error. As I indicated above, the matter for the Tribunal's determination was not whether the husband's previous suffering amounted to persecution, although that was a relevant consideration, but whether he had a well-founded fear of future persecution. The reasons of the Tribunal show that it thought that the incidents that had befallen the husband were random events by different individuals. There was thus no reason for concluding that the husband would suffer harm in the future from these individuals. Hence, to make out a case of future harm, the husband could only rely on the finding that: "harm may sometimes befall individual church members, probably more frequently when they go out and proselytise β putting themselves deliberately into an interaction with members of the general public β but that this harm befalls them on a one-off, individual basis". (emphasis added) In finding that "the chance that [the husband] would so suffer in the reasonably foreseeable future is remote", the Tribunal probably concluded from all the evidence that attacks on Jehovah's Witnesses did not occur frequently enough to conclude that there was a real chance that he would suffer harm. There was no evidence that suggested that the husband was the target of attacks or that he stood a greater chance than other Jehovah's Witnesses of being harmed. Nor was there any evidence that the circumstances that he would face as a Jehovah's Witness were not materially dissimilar from the circumstances faced by those who had been harmed in the past. Not only was there no evidence as to the frequency or the percentage of Jehovah's Witnesses who "sometimes" suffered harm but there was no evidence as to the times or places of such McHugh occurrences. It was open to the Tribunal to conclude, therefore, that, despite the husband's earlier experiences, and those of other Jehovah's Witnesses, the statistical chance of his being harmed was too small to classify that chance as a real one. Whether the Tribunal's finding on future persecution was correct in fact is beside the point. It was a finding of fact that was not reviewable in the Federal Court. Having found that the husband and, through him, his wife did not have a well-founded fear of persecution, the Tribunal was not required to determine whether Ukraine had the ability in a practical sense or otherwise to eliminate acts that harmed Jehovah's Witnesses. The Full Court erred, therefore, in finding that the Tribunal had fallen into jurisdictional error. Order The appeal must be allowed. Kirby KIRBY J. This is another appeal concerning refugee law. The Full Court of the Federal Court of Australia unanimously69 upheld an appeal from the primary judge (Wilcox J)70. It reversed his Honour's order adverse to the present respondents, who were applicants for protection visas ("the applicants") before the Refugee Review Tribunal ("the Tribunal"). In effect, by its judgment, the Full Court required that the Tribunal reconsider the applicants' claim. By special leave, the Minister for Immigration and Multicultural Affairs ("the Minister") appeals to this Court. She seeks restoration of the orders of the primary judge. If successful, that would close the applicants' legal right to the reconsideration of their application by the Tribunal. The background facts The applicants are male and female domestic partners whose country of nationality is Ukraine. Effectively, the matter was determined in light of events that had primarily concerned the male applicant. No point of distinction was made concerning the female applicant. It was accepted by the Tribunal that the male applicant had suffered harm in the course of two beatings and in an attack in or near his apartment71. It was clear that these attacks were related to the fact that the male applicant had become interested in the teachings of the Jehovah's Witnesses, a denomination of the Christian religion. The male applicant had promoted that religious denomination, including by handing out relevant literature. It appears that these activities occasioned animosity on the part of the male applicant's assailants. Whether his assailants followed the more traditional religions of Ukraine, whether they were adherents to the former secularist beliefs of that country, promoted during the long period that Ukraine was part of the Soviet Union, or otherwise, is undisclosed. The Tribunal accepted that the violence directed towards the male applicant was an "adverse reaction to his religion" and that he had suffered because of his religion72. Such violence preceded the departure of the applicants from Ukraine for Australia, their arrival in this country and their claim for protection visas on the ground of refugee status73, which was promptly made. 69 [2002] FCAFC 145 per Lee, Moore and Madgwick JJ. 70 [2001] FCA 652. 71 [2002] FCAFC 145 at [3]. Background facts are stated in the reasons of Gleeson CJ, Hayne and Heydon JJ at [2]-[16]. 72 [2002] FCAFC 145 at [3]. 73 Under the Migration Act 1958 (Cth), s 36(2). Kirby The existence of "fear", in a subjective sense, as claimed by the male applicant, appears to have been accepted. The next question thus became whether that fear was "well-founded", whether it involved a fear of "being persecuted for reasons of β¦ religion" and whether it otherwise attracted the requirements contained in Art 1A(2) of the Refugees Convention as amended by the Refugees Protocol ("the Convention")74, incorporated into Australian law by the Migration Act 1958 (Cth) ("the Act"). Rejection of state complicity in the harm to the male applicant Before the Tribunal, the applicants' claim to fall within the Convention definition of "refugee" substantially relied upon the basis that Ukraine, and in that sense its state apparatus, agencies and officials, was complicit in the attacks suffered by the male applicant. It was submitted that Ukraine had encouraged the violence directed at the male applicant through the media and otherwise. This was the essential evidentiary case presented, upon the basis of which the applicants sought protection visas in Australia. Obviously, if such a case could be made good, the applicants would have enjoyed good prospects of success. Persecution of members of the Jehovah's Witness religion by the official apparatus of nation states is not unknown in history, including recent history. Discrimination against Jehovah's Witnesses has been claimed in Australian history and considered by this Court75. However, upon this case of complicity and involvement by Ukraine in the harm suffered by the male applicant, the applicants failed before the Tribunal. They did so on the evidentiary merits. The reasons given for their loss in this respect are compelling. They were grounded in country information from reliable governmental and other sources to the effect that state authorities in Ukraine generally accept traditional religions (of which Jehovah's Witnesses are treated as one). The reasons were also supported by the references to the website of the international organisation of the Jehovah's Witnesses Church naming certain countries as unfriendly and worse to members of their denomination. Some of the neighbours of Ukraine are amongst those countries so named. However, Ukraine itself is not mentioned. On the contrary, the website indicates that there are more than 100,000 members of the Jehovah's Witnesses in Ukraine and that there are 823 congregations. 74 Convention relating to the Status of Refugees done at Geneva on 28 July 1951, [1954] Australian Treaty Series No 5; Protocol relating to the Status of Refugees done at New York on 31 January 1967, [1973] Australian Treaty Series No 37. 75 Adelaide Company of Jehovah's Witnesses Inc v The Commonwealth (1943) 67 CLR 116. Kirby In these circumstances, the finding by the Tribunal against the applicants, on the case that they propounded, was scarcely surprising. Certainly, it was supported by the evidence. There is no indication of jurisdictional or other legal error in that determination. No one now suggests otherwise. The case of harm by non-state actors The applicants appeared before the Tribunal (and in the Federal Court) without legal representation. This made it appropriate for the Tribunal and that Court to adopt an approach of special vigilance. This is because of the duty imposed on the Tribunal by the Act to approach its own functions in a generally inquisitorial and not strictly an adversarial manner76. Furthermore, the Federal Court would be aware of the importance of refugee decisions under the Act and that unrepresented applicants could not be expected to know about all the many nuances of that law. Trained lawyers often find it difficult to distinguish jurisdictional from non-jurisdictional error. I have confessed to difficulty myself. In such circumstances, it was proper for the Federal Court to engage in its own scrutiny of the approach adopted by the Tribunal and by the primary judge to see if a relevant undisclosed error appeared warranting a rehearing before the Tribunal. This is what the Full Court did. The Full Court's consideration of the alternative case which it felt was open to the applicants and unconsidered by the Tribunal and the primary judge, was probably enlivened by the then recent publication of this Court's decision in Minister for Immigration and Multicultural Affairs v Khawar77. That decision was announced on 11 April 2002. That was after the primary judge had delivered his judgment, after the hearing in the Full Court and little more than a month before the publication of the Full Court's reasons. It can be assumed, as the Full Court indicated, that the decision was therefore at the forefront of its thinking78. In Khawar, as in this case, the applicant for refugee status was unable to succeed on the case common in persecution claims, namely persecutory activity by the apparatus of the state, its agencies and officials, in the country of nationality of the applicant for refugee status. In Khawar the complaint, by a female citizen of Pakistan, was that she was the victim of repeated violence by 76 Abebe v The Commonwealth (1999) 197 CLR 510 at 576 [187]; Re Minister for Immigration and Multicultural Affairs; Ex parte Epeabaka (2001) 206 CLR 128 at 77 (2002) 210 CLR 1. 78 [2002] FCAFC 145 at [15]. Kirby non-state actors (her husband and his family) which state agencies (namely the police) had failed to investigate or follow up by laying charges in respect of complaints by women, including Mrs Khawar, who alleged domestic violence against them by their husbands and by members of their husbands' families. In Khawar, this Court by majority79 held that "persecution" within the Convention definition of "refugee" could exist as a matter of law although the relevant harm was inflicted on the applicant by non-state actors. Such non-state actors could include private citizens. "Persecution" could arise where the relevant conduct was tolerated or condoned by the state in a discriminatory manner80. The principle endorsed by the Court rejected the notion that "persecution" as used in the Convention's criteria for "refugee" status inherently implied a necessity of intolerable conduct by agents of the state in inflicting, condoning or tolerating the persecution ("the accountability theory")81. I considered that it was sufficient if the "persecution" involved serious harm and the failure of state protection. In my reasons, at some admitted risk of oversimplification, I adopted the concise formula which Lord Hoffmann had propounded in R v Immigration Appeal Tribunal; Ex parte Shah82 and 79 Gleeson CJ, McHugh and Gummow JJ and myself. Callinan J did not decide the point but dissented from the orders of the Court. 80 Minister for Immigration and Multicultural Affairs v Khawar (2002) 210 CLR 1 at 12-13 [29]-[31] per Gleeson CJ, 26-27 [76]-[80] per McHugh and Gummow JJ, 37- 40 [112]-[118] of my own reasons. 81 For discussion of the accountability theory see the reasons of McHugh J at [54]. Also see Moore, "Whither the Accountability Theory: Second-Class Status for Third-Party Refugees as a Threat to International Refugee Protection", (2001) 13 International Journal of Refugee Law 32; KΓ€lin, "Non-State Agents of Persecution and the Inability of the State to Protect", (2001) 15 Georgetown Immigration Law Journal 415 at 417-423; Marx, "The Notion of Persecution by Non-State Agents in German Jurisprudence", (2001) 15 Georgetown Immigration Law Journal 447; Phuong, "Persecution by Third Parties and European Harmonization of Asylum Policies", (2001) 16 Georgetown Immigration Law Journal 81 at 82-83; Moore, "From Nation State to Failed State: International Protection from Human Rights Abuses by Non-State Agents", (1999) 31 Columbia Human Rights Law Review 81 at 106-108. See further Minister for Immigration and Multicultural Affairs v Haji Ibrahim (2000) 204 CLR 1 at 53-54 [151]-[154] per Gummow J; R v Secretary of State for the Home Department; Ex parte Adan [2001] 2 AC 477 at 522-523 per Lord Hutton; R (Yogathas) v Secretary of State for the Home Department [2003] 1 AC 920 at 935-936 [39]-[42] per Lord Hope of Craighead, 944-945 [65] per Lord Hutton. 82 [1999] 2 AC 629 at 653. Kirby Lord Clyde had endorsed in Horvath v Secretary of State for the Home Department83: "Persecution = Serious Harm + The Failure of State Protection." This represents the alternative theory of "persecution" accepted by most contemporary elaborations of the Convention ("the protection theory")84. The most obvious failure of state protection will arise when the state and its agencies and officials are the actual perpetrators of serious harm to a person who subsequently claims protection on the ground of refugee status. However, another class that will enliven the Convention is a case like Khawar, where the agencies of the state are unable or unwilling to provide protection to their nationals85. Where the evidence establishes that this is the case it will potentially lend support to claims of "fear". It may sustain such claims of fear as "well- founded". This is because, to the extent that state agencies or officials engage in the harmful conduct or neglect or omit to provide protection or redress, they render subjective fears substantial and "well-founded". They are "well-founded" because of the protective role ordinarily to be attributed to a state and its 83 [2001] 1 AC 489 at 515-516. 84 For discussion of the protection theory, see the reasons of McHugh J at [55]-[58]. It is also sometimes referred to as the "persecution theory": R v Secretary of State for the Home Department; Ex parte Adan [2001] 2 AC 477 at 518 per Lord Steyn, 522 per Lord Hutton. See further Randall, "Refugee Law and State Accountability for Violence Against Women: A Comparative Analysis of Legal Approaches to Recognizing Asylum Claims Based on Gender Persecution", (2002) 25 Harvard Women's Law Journal 281; Lambert, "The Conceptualisation of 'Persecution' by the House of Lords: Horvath v Secretary of State for the Home Department", (2001) 13 International Journal of Refugee Law 16; Anker, "Refugee Status and Violence Against Women in the 'Domestic' Sphere: The Non-State Actor Question", (2001) 15 Georgetown Immigration Law Journal 391; Moore, "Whither the Accountability Theory: Second-Class Status for Third-Party Refugees as a Threat to International Refugee Protection", (2001) 13 International Journal of Refugee Law 32 at 33-35; KΓ€lin, "Non-State Agents of Persecution and the Inability of the State to Protect", (2001) 15 Georgetown Immigration Law Journal 415 at 424; Moore, "From Nation State to Failed State: International Protection from Human Rights Abuses by Non-State Agents", (1999) 31 Columbia Human Rights Law Review 81 at 102, 119; Adjin-Tettey, "Failure of State Protection within the Context of the Convention Refugee Regime with Particular Reference to Gender-Related Persecution", (1997) 3 Journal of International Legal Studies 53 at 85 Hathaway, The Law of Refugee Status, (1991) at 125-128. Kirby functionaries, the resources that the state normally has to carry out its functions and the scope for sustained oppression where the state is actively or passively involved in the conduct amounting to "persecution". When these qualifications are met, the relevant acts and omissions will arguably fall within the notion of "persecution" as used in this context. They will help establish the necessary link between the "well-founded fear" and the propounded ground, in this case "for reasons of β¦ religion". In the case of an applicant for refugee status who is outside the country of nationality, they will potentially explain why he or she is "owing to such fear β¦ unwilling to avail himself [or herself] of the protection of [the] country [of nationality]"86. Consideration of the issues by primary judge Although the primary judge did not have Khawar available to him, he did not overlook the possibility that the Tribunal had committed an error warranting intervention of the Federal Court on the basis of the inability, as well as the unwillingness, of the Ukrainian authorities to protect their citizens from persecution on religious grounds87. His Honour expressly referred to, and considered, an argument of the applicants that "the government [of Ukraine] condoned such mistreatment, or was unwilling to do anything about it in a proper case". On the basis of the Tribunal's conclusions, and the evidence before it, the primary judge detected no error requiring intervention by the Federal Court on this footing. He said88: "[T]here was nothing in this case to indicate any general attitude of condonation [of mistreatment] or unwillingness [of police to do anything about it in a proper case]." The primary judge went on89: "[I]t seems a large jump to infer, from the reaction of one officer in one police station [about which the male applicant complained], that the 86 Applying the criteria for "refugee" status in the Convention. See the reasons of Gleeson CJ, Hayne and Heydon JJ at [2]. As to the last criterion, see Fortin, "The Meaning of 'Protection' in the Refugee Definition", (2001) 12 International Journal of Refugee Law 548. 87 [2001] FCA 652 at [24] where the "ability" of the national authorities is specifically referred to. 88 [2001] FCA 652 at [26]. 89 [2001] FCA 652 at [29] (emphasis added). Kirby government of the Ukraine, considering that entity as a whole, was unable or unwilling to protect Ukrainian citizens against assault arising out of their religious beliefs β¦ I can understand the Tribunal's unwillingness to make a finding that the Ukrainian government was unwilling or unable to protect its citizens in the absence of evidence of β¦ other options having been tried [by the male applicant] and proved unsuccessful." The primary judge pointed out that the issues belatedly raised by the applicants were ones of fact and merits for the Tribunal90, and that the Federal Court's powers of judicial review were strictly limited91. His approach appears orthodox, careful and correct. Clearly enough, it was expressed in terms of the protection theory hitherto generally adopted as the international approach to the Convention definition. The primary judge did not adopt the narrower accountability theory of persecution that would limit "persecution" to the acts of a state or its agencies or those acts of non-state actors impliedly condoned or tolerated by the state. The accountability theory has not been accepted in this country. In advance of Khawar, correctly, the primary judge appears to have turned his attention to, and considered, the issue of practical neglect and inability on the part of the authorities in Ukraine to protect the male applicant from serious wrongdoing by non-state actors. As his Honour pointed out, partly because of the way the applicants had presented their case before the Tribunal, the evidence did not sustain a case of unwillingness or inability of Ukraine to protect its nationals. On the face of things, this made the case an unpromising one for judicial review within the limited grounds available for the Federal Court to disturb a decision of the Tribunal. The competing theories of "persecution" In his reasons in this appeal, McHugh J has suggested that the protection theory of "persecution" is as flawed as the accountability theory92. He points to the primary duty of a national court to give effect to the Refugees Convention according to its language93. According to McHugh J, the notion of "persecution" itself contains no foothold for importing a necessity of some state involvement (by conduct or relevant omission), and this Court should now reject that approach and accept a new theory of its own ("the third theory"). The new theory of "persecution" would confine the consideration of responses, if any, of state 90 [2001] FCA 652 at [30]. 91 The Act, Pt 8, especially s 476. See [2001] FCA 652 at [31]-[34]. 92 Reasons of McHugh J at [32], [59]-[65], [75]-[79]. 93 Reasons of McHugh J at [67]. Also see Vienna Convention on the Law of Treaties done at Vienna on 23 May 1969, [1974] Australian Treaty Series No 2, Art 31(1). Kirby agencies and officials to the question whether the "fear" is "well-founded". The consideration would not be relevant to whether the impugned conduct was "persecution". I accept the power of the arguments of text and policy that McHugh J has deployed in support of his approach. On the other hand, there are some contrary indications in the Refugees Convention, its history, nature, language and purpose, that suggest that the protection theory of persecution may not be incorrect. Historically, the Refugees Convention arose out of the egregious history of Europe before, during and immediately after the Second World War, where huge numbers of refugees were displaced and forced to seek asylum because of state organised, condoned and tolerated conduct persecutory of such persons. The Convention is an international treaty. It is made by nation states, between nation states, imposing serious obligations upon nation states that cut across the normal duties and rights of nationality. In such circumstances, the reading of "persecution" in the Convention definition, to imply at least some passive involvement of the state of nationality, its agents and officials, would be unsurprising. The Refugees Convention is not, at first blush, a treaty addressed as such to the conduct of private individuals and corporations having no connection with the state of nationality. The language of the Convention definition of refugee seems to support the connection, at least to some extent. The "fear" will not ordinarily be "well-founded" at all if the asylum seeker can properly look to the state of nationality, its agencies and officials, to sanction the conduct of private individuals who are acting oppressively. The limited categories of "reasons" for relevant persecution nominated in the Convention (race, religion etc) are commonly of a kind of interest to governmental agencies and officials, both positively and negatively. By definition, the claim for protection is made outside the country of nationality. It is so serious as to warrant the conclusion that the claimant is "unable" or "unwilling" to avail himself or herself of the protection of the country of nationality. A desire not to return to that country is insufficient. To impose obligations on the country of refuge, something more, in the form of a failure of protection of the country of nationality, is required. One can accept that "protection" in the Convention definition means external, not internal, protection. But treaties, like local texts, must be read as a whole, not word by isolated word94. The reason for the inability or unwillingness of the claimant to 94 See Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389 at 396-397; Interpretation of Peace Treaties with Bulgaria, Hungary and Romania (Second Phase) (1950) ICJ 221 at 235; Case Concerning the Arbitral Award of 31 July 1989 (Guinea-Bissau v Senegal) (1991) ICJ 53 at 136. Kirby avail himself or herself of the protection of the country of nationality casts light upon the "persecution" that has contributed to, or caused, that reaction. The ultimate purpose of the Convention is to shift a very important obligation of external protection from the country of nationality to the international community. On the face of things, this may suggest that there is some good reason for doing so β either the active participation or collusion of that country, its agencies and officials in the persecutory acts, or the failure of that country to afford protection where ordinarily, by international standards, that could be expected. I do not decide finally, in this appeal, whether the third theory suggested by McHugh J should now be accepted by this Court. It is not necessary to do so in order to reach a conclusion. On the outcome of this appeal, we are unanimous. The points of difference are not determinative. Nor was a third theory fully argued at the hearing and supported by reference to legal writings and relevant materials. A further reason for hesitation before embracing it at this stage is that, to date, no other final court has adopted the third theory. Whilst this is not a reason for inaction where this Court concludes that error is clearly shown, it is desirable, so far as possible, to observe common approaches to the interpretation and application of an international treaty. This is particularly so in a treaty of major practical significance in the principal countries of refuge which have hitherto generally followed the protection theory, including Australia and the United Kingdom. Whilst reserving the issue for another day, it is therefore appropriate for me to continue to approach the alleged conduct of non-state actors in accordance with the protection theory that I have previously accepted as applicable to claims of "persecution" under the Convention, at least where there is a functioning state apparatus as in Ukraine95. The Full Court's finding of oversight of a material issue The Full Court concluded that the Tribunal had erred and, by inference, that the primary judge had failed to detect and require correction of that error. It accepted the uncontroversial principle that a foundation for the Federal Court's intervention would arise if the Tribunal "identifies a wrong issue, asks itself a wrong question, ignores relevant material or relies on irrelevant material in such 95 See Khawar (2002) 210 CLR 1 at 39-40 [118]. See also Minister for Immigration and Multicultural Affairs v Haji Ibrahim (2000) 204 CLR 1 at 66 [188], 70-71 Kirby a way as to affect the exercise of its powers"96. But how, in the light of the foregoing analysis, could it be said that the Tribunal and the primary judge had erred by reference to these considerations? The Full Court expressed the error that it detected in various ways. At one stage it said that the Tribunal had failed to ask itself the right question, namely "whether, in a practical sense, the State was able to provide protection particularly in light of the pervasive pattern of harm"97. Elsewhere, the default was explained as the omission to consider "whether the Ukrainian government was able, in a practical sense, to prevent such harm, given the history of violence towards [the male applicant]"98 and "whether there was a risk of harm for a Convention reason that the authorities could not provide protection against"99. With respect to the Full Court, I consider these findings of errors of omission and neglect on the part of the Tribunal, and of the primary judge, to be strained and unconvincing. There is no absolute obligation on the part of a state to "provide protection" to its nationals, whatever the circumstances. Nor, within the protection theory, can it reasonably be expected that a state will prevent every harm perpetrated against a national by antisocial elements in that person's society. No reasonable reader of the Convention could expect the text to effectively oblige the fulfilment of such standards. They are not the standards against which the obligations to provide protection were written in the Convention. They are not the standards that were accepted in Khawar. There it was demonstrated that a systematic and discriminatory denial of legal protection by agencies and officials of the state existed on a Convention ground. Such was not the evidence before the Tribunal in the present case. Certainly, it was not the evidence that the Tribunal accepted. Every case turns on its own facts. Cases will doubtless exist where the evidence shows neglect or indifference on the part of the state to the action of private parties, or turning a blind eye to it, that will enliven the criteria for protection of a person as a refugee, either because the harm involved is so serious or the conduct so repeated and intolerable. Khawar was such a case. However, 96 [2002] FCAFC 145 at [22], citing Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 at 351-352 [82]-[84]. Also see Appellant S395/2002 v Minister for Immigration and Multicultural Affairs (2003) 78 ALJR 180 at 190 [54], 195 [88]-[89]; 203 ALR 112 at 126, 133; Germov and Motta, Refugee Law in Australia, (2003) at 653-655. 97 [2002] FCAFC 145 at [22]. 98 [2002] FCAFC 145 at [16]. 99 [2002] FCAFC 145 at [17]. Kirby in this case the evidence of harm directed at the male applicant, and of the official response to it, fell far short of the circumstances that would attract the Convention to the case. Certainly, it was open to the Tribunal to so conclude on the evidence before it. As it did. The Convention does not require or imply the elimination of all risks of harm. As Lord Hope of Craighead said in Horvath100, the Convention adopts a "practical standard, which takes proper account of the duty which the state owes to all its nationals". It posits a reasonable level of protection, not a perfect one101. It must apply to the variety of nations in the world with their differing resources, traditions and institutional attitudes. It is not geared to the fears of the supersensitive. By the same token, it is not indifferent to conditions which reasonable human beings should not have to accept and are entitled to escape from and in respect of which they are entitled to seek protection from the international community102 because they feel that invocation outside their country of nationality of protection from that country will only lead to their being returned to conditions of risk of harm that they ought not to have to tolerate103. Conclusion: there was no such oversight The Tribunal did not fail to consider such matters in the applicants' case. It specifically rejected any suggestion that "the authorities [of Ukraine could] be said to be unwilling or unable to protect their citizens". It concluded that: "The fact that the [male] applicant experienced incidents about which he either did not make a statement, or did not persevere in any way if discouraged from making a statement, cannot be taken as evidence that the authorities condoned such incidents. On the occasion on which the police were alerted to an assault [of the male applicant] by the ambulance officers, they responded appropriately." 100 [2001] 1 AC 489 at 500. 101 See Williams, "The Correlation of Allegiance and Protection", (1950) 10 Cambridge Law Journal 54. 102 Canada (Attorney General) v Ward [1993] 2 SCR 689; Applicant A v Minister for Immigration and Ethnic Affairs (1997) 190 CLR 225 at 231-232 per Brennan CJ, 247 per Dawson J; Chen Shi Hai v Minister for Immigration and Multicultural Affairs (2000) 201 CLR 293 at 307-308 [45]-[47]. 103 Fortin, "The Meaning of 'Protection' in the Refugee Definition", (2001) 12 International Journal of Refugee Law 548. Kirby It was therefore unsurprising that the Tribunal, having rejected the propounded case of systemic or institutional neglect or indifference to protecting the male applicant and having earlier rejected the claim of state complicity in the acts directed against him, rejected the suggestion that what had happened to him was "persecution" within the Convention. The Tribunal, instead, classified that harm as nothing more than "individual and random incidents of harm β¦ and not as persecution". That was clearly a view of the facts open to the Tribunal on the evidence. In accordance with the protection theory, such incidents would not amount to "persecution" without some indication of complicity or condonation and approbation of discrimination and violence against the male applicant on the part of Ukrainian state authorities and agencies. This was an inference which the Tribunal rejected. Such rejection was clearly open to the Tribunal on the evidence. It was not amenable to criticism, or correction, by the Full Court. Contrary to the Full Court, I do not read the Tribunal's reasons as suggesting that harm inflicted on the male applicant for his religious beliefs could only amount to persecution if it were shown to have followed a coordinated pattern104. This is not what the Tribunal concluded. All that the Tribunal said was that the incidents were random. For that reason, they did not demonstrate any state complicity. Nor did they evidence serious neglect and discriminatory indifference on the part of state authorities and agencies to providing a level of protection proper to nationals in a civilised community. In such circumstances both the affirmative and negative aspects of "persecution" were duly considered by the Tribunal. There was no failure on the Tribunal's part to consider and decide any issue inherent in the case. In a similar way, the primary judge gave proper consideration to both aspects of "persecution". There was thus no failure to address the relevant legal issue, nor did the Tribunal or the primary judge ask themselves the wrong question, ignore relevant material or rely on irrelevant material. In the end, this is yet another case where persons who failed before the Tribunal on the merits, sought to re-canvass factual findings in an impermissible way and to argue their claim for judicial review in a manner significantly different from the argument advanced before the Tribunal105. The Federal Court must be attentive to the risk of oversight of relevant legal issues by vulnerable and unrepresented applicants for protection as refugees. The seriousness of the 104 [2002] FCAFC 145 at [19]. 105 Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S154/2002 (2003) 77 ALJR 1909 at 1920-1921 [69]; 201 ALR 437 at 452-453. Kirby issues involved for those making such applications requires rigorous examination of suggested, or otherwise demonstrated, jurisdictional and legal errors106. By the same token, the Federal Court must also be careful not to read the Tribunal's reasons in an overzealous or overcritical way or to allow unsuccessful applicants to turn an application for judicial review into an attempted reconsideration of the factual merits107. Essentially, that is what the applicants tried to achieve. Their attempt fails. As I approach this appeal it thus involves no new principle and no important proposition of law. It concerns nothing more than the application of the hitherto established law on refugees and the clear law governing the functions of judicial review of primary administrative decisions. To enliven a larger debate about the meaning of the Refugees Convention and the competing theories of "persecution" propounded in relation to it, another case will be necessary in which those theories have been thoroughly canvassed below and where deciding amongst them is important for the outcome. That is not the position here. Orders The Minister undertook on the grant of special leave to pay the reasonable costs of the applicants of the appeal. The appeal should be allowed. The other orders proposed by Gleeson CJ, Hayne and Heydon JJ should be made. 106 R v Secretary of State for the Home Department; Ex parte Bugdaycay [1987] AC 107 Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 |
HIGH COURT OF AUSTRALIA Matter No D2/2007 ATTORNEY-GENERAL FOR THE NORTHERN TERRITORY AND APPELLANT CAMERON OWEN CHAFFEY & ANOR RESPONDENTS Matter No D3/2007 SANTOS LIMITED AND APPELLANT CAMERON OWEN CHAFFEY & ANOR RESPONDENTS Attorney-General for the Northern Territory v Chaffey Santos Limited v Chaffey [2007] HCA 34 2 August 2007 D2/2007 & D3/2007 ORDER Appeals allowed. Set aside the order of the Full Court of the Supreme Court of the Northern Territory made on 15 September 2006 and, in its place, order that the questions asked in the special case be answered as follows: Q. Whether for the period up to 26 January 2005 the amendment constitutes an acquisition of the Worker's property inconsistent with s 50 of the Northern Territory (Self-Government) Act and as such is invalid to the extent of such inconsistency? Q. Whether for the period after 26 January 2005 the amendment constitutes an acquisition of the Worker's property inconsistent with s 50 of the Northern Territory (Self-Government) Act and as such is invalid to the extent of such inconsistency? The appellants to pay the respondents' costs of the appeals to this Court. On appeal from the Supreme Court of the Northern Territory Representation T I Pauling QC Solicitor-General for the Northern Territory with S L Brownhill for the appellant in D2/2007 and the second respondent in D3/2007 (instructed by Solicitor for the Northern Territory) S J Gageler SC with P M Barr QC for the second respondent in D2/2007 and the appellant in D3/2007 (instructed by Hunt & Hunt) B W Walker SC with M P Grant QC and N Christrup for the first respondent in both matters (instructed by Ward Keller Lawyers) D M J Bennett QC Solicitor-General of the Commonwealth of Australia with M the A Perry QC Attorney-General of the Commonwealth of Australia (instructed by Australian Government Solicitor) intervening on behalf of and G M Aitken Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Attorney-General for the Northern Territory of Australia v Chaffey Santos Ltd v Chaffey Constitutional law (NT) β Acquisition of property β The respondent was a worker entitled to compensation under the Work Health Act (NT) ("the WHA") β The Work Health Amendment Act 2004 (NT) amended s 49 of the WHA so as to exclude employers' superannuation contributions from the definition of a worker's "remuneration" β Whether the amendment to s 49 was an acquisition of property otherwise than on just terms. Constitutional law (NT) β The legislative power of the Northern Territory does not extend to the making of laws with respect to the acquisition of property otherwise than on just terms β Statutory right to compensation β Whether amendment to the WHA amounted to an acquisition of property β Relevance of statutory right being "subject to" and "in accordance with" the statute as in force from time to time β Relevance of statutory obligation to provide "such compensation as is prescribed" β Inherent variability of statutory entitlements to workers' compensation. Words and Phrases β "acquisition of property", "just terms", "remuneration". Northern Territory (Self-Government) Act 1978 (Cth), ss 5, 6, 50. Work Health Act (NT), Pt 5, ss 49, 52, 53. Work Health Amendment Act 2004 (NT). GLEESON CJ, GUMMOW, HAYNE AND CRENNAN JJ. These appeals, which were heard together, are brought by the Attorney-General for the Territory and by Santos Limited ("Santos"). They were the unsuccessful parties to a special case stated for the opinion of the Supreme Court of the Northern Territory pursuant to s 115 of the Work Health Act (NT) (the "Work Health Act") and referred by a Judge thereof (Mildren J) for determination by the Full Court. The Self-Government Act The starting point for consideration of these appeals is presented by s 5 of the Northern Territory (Self-Government) Act 1978 (Cth) (the "Self-Government Act"). This established the Northern Territory of Australia as "a body politic under the Crown" and s 6 conferred upon the Legislative Assembly power to make laws for the peace, order and good government of the Territory. However, the conferral of legislative power by s 6 is expressed therein as being subject to other provisions of the Self-Government Act. In that regard, s 50 states: "(1) The power of the Legislative Assembly conferred by section 6 in relation to the making of laws does not extend to the making of laws with respect to the acquisition of property otherwise than on just terms. Subject to section 70, the acquisition of any property in the Territory which, if the property were in a State, would be an acquisition to which paragraph 51 (xxxi) of the Constitution would apply, shall not be made otherwise than on just terms." Section 70 is a special provision dealing with acquisition of interests in land and does not bear upon the present dispute1. As a general proposition, subject to any applicable constitutional qualification, the power of an Australian legislature to make laws, here conferred upon the Assembly by s 6 of the Self-Government Act, "includes the power to unmake them". Statements to that effect were made in Kartinyeri v Commonwealth2. In the case of the Assembly that power is expressly subjected to the restraint imposed by s 50 of the Self-Government Act. This in turn calls cf Newcrest Mining (WA) Ltd v Commonwealth (1997) 190 CLR 513. (1998) 195 CLR 337 at 355 [13], 368-369 [47], 372 [57]. See also R v Public Vehicles Licensing Appeal Tribunal (Tas): Ex parte Australian National Airways Pty Ltd (1964) 113 CLR 207 at 226. Crennan for the application of the decisions which have construed s 51(xxxi) of the Constitution. Counsel for the Attorney-General for the Territory stressed that in contrast to the position of the Parliament under s 51 of the Constitution, the power of the Assembly is not conferred by reference to enumerated heads of power. This was said to render inapposite in the Territory those authorities3 which found in other heads of legislative power enumerated in s 51 a contrary indicator to the provision of just terms. However, these appeals may be considered without pursuit of any such distinction between s 51(xxxi) and s 50 of the Self- Government Act. The Facts Mr Chaffey, the first respondent to each appeal in this Court, was employed by Santos as a maintenance operator working at the Mereenie Gasfield, approximately 200 km west of Alice Springs. His employment commenced on or about 24 March 2003 and at all material times he was a "worker" within the meaning of the Work Health Act. Mr Chaffey's employment with Santos was pursuant to a written contract of employment dated 19 February 2003. At all material times pursuant to the contract Santos made superannuation contributions on his behalf at the rate of 10 percent of salary. On or about 10 September 2003 Mr Chaffey sustained an injury within the meaning of the Work Health Act for which Santos accepted liability. It appears to have been common ground that for the purposes of these appeals the compensation rights of Mr Chaffey under the Work Health Act accrued when he sustained his injury. Reference to the statute in these reasons, save where otherwise indicated, are to the statute as it stood when Mr Chaffey was injured. The facts do not disclose whether, had the relevant common law still been in force in the Territory, Mr Chaffey would have had an action for damages against Santos. 3 See Theophanous v Commonwealth (2006) 80 ALJR 886 at 889-890 [9]-[14], 896 [55]-[58]; 226 ALR 602 at 606-607, 614-615; Dixon, "Overriding Guarantee of Just Terms or Supplementary Source of Power?: Rethinking s 51(xxxi) of the Constitution", (2005) 27 Sydney Law Review 639 at 650-651. Crennan The Work Health Act The Work Health Act repealed the Workmen's Compensation Act 1949 (NT) and commenced on 1 January 1987. Part II thereof (ss 6-15) constitutes the Work Health Authority ("the Authority") as the body to administer and enforce the statute. Part V (ss 49-91A) establishes a scheme of workers' compensation. Part VII (ss 117-177) provides for the funding of the scheme, with compulsory insurance to be taken out by employers with an insurer approved by the Authority (s 126), and with provision also for approved self-insurers (s 120) and for the establishment of a Nominal Insurer (s 150) to administer the Nominal Insurer's Fund (s 162). The stated purpose of ss 75-78 is to ensure rehabilitation of injured workers. An assignment of compensation payable under the statute is void and against an employer or an insurer (s 186). A Scheme Monitoring Committee, with a representative of the Authority and the other members appointed by the responsible Minister, is to monitor the viability and performance of the scheme (ss 141, 145). Two provisions of Pt V are of immediate importance. First, s 52 states that the statutory regime operates with effect from 1 January 1987 to the exclusion of certain common law actions for damages which otherwise would have arisen thereafter. Secondly, s 53 provides that "[s]ubject to this Part", where a worker suffers an injury which results in or materially contributes to the death, impairment or incapacity of that worker, "there is payable by [the] employer to the worker or the worker's dependants, in accordance with this Part, such compensation as is prescribed." (emphasis added). The term "prescribed" means prescribed by the Work Health Act or by an instrument of a legislative or administrative character made under that statute. This follows from the Interpretation Act (NT), s 18 ("the Interpretation Act"). Section 187(g) of the Work Health Act confers upon the Administrator of the Territory the power to make regulations "prescribing the amount of compensation payable or by reference to which compensation is to be calculated". Section 65 of the Work Health Act provides that, in certain cases of long term incapacity, compensation is to be paid until attainment of the normal retirement age or the age of 65, whichever is the longer period. A component of the prescribed compensation is calculated by reference to the "normal weekly earnings" of the worker and that expression is defined in s 49(1) by reference to the "remuneration" of the worker. Crennan The 2004 Act the In Hastings Deering (Australia) Ltd v Smith (No 2)4 term "remuneration" in s 49(1) was construed by the Northern Territory Court of Appeal as including superannuation contributions made by an employer for the benefit of a worker. The sequel was the enactment of s 49(1A) which was inserted in the Work Health Act by the Work Health Amendment Act 2004 (NT) ("the 2004 Act"). The 2004 Act commenced on 26 January 2005 but it also inserted s 195, the effect of which was to give s 49(1A) a measure of retrospective operation which applied to the circumstances of Mr Chaffey. In introducing the Bill for the 2004 Act, the responsible Minister made clear to the Assembly that its purpose was to "restore the status quo by confirming what was considered to be the intention of [the Work Health Act]". Section 5 of the 2004 Act amended s 49 of the Work Health Act by inserting the following after sub-s 49(1): "(1A) For the purposes of the definition of 'normal weekly earnings' in subsection (1), a worker's remuneration does not include superannuation contributions made by the employer. (1B) Subsection (1A) is taken to have come into operation on 1 January Section 58 of the Interpretation Act provides that every Act amending another Act shall be construed with the earlier statute and as part thereof. That section is declaratory of the common law principles of statutory construction and interpretation5. The Special Case The special case posed for determination by the Full Court two questions respecting the validity of the amendment made to s 49 by the 2004 Act. By majority (Mildren and Southwood JJ, Angel J dissenting)6 the Full Court ordered that the questions be answered as follows: (2004) 18 NTLR 1. 5 Commissioner of Stamps (SA) v Telegraph Investment Co Pty Ltd (1995) 184 CLR (2006) 18 NTLR 22. Crennan Question 1. Whether for the period up to 26 January 2005 the amendment constitutes an acquisition of [Mr Chaffey's] property inconsistent with s 50 of the [Self-Government Act] and as such is invalid to the extent of such inconsistency? Answer 1. Yes. Question 2. Whether for the period after 26 January 2005 the amendment constitutes an acquisition of [Mr Chaffey's] property inconsistent with s 50 of the [Self-Government Act] and as such is invalid to the extent of such inconsistency? Answer 2. Yes." In the period before 26 January 2005, Mr Chaffey had received compensation but in sums not allowing for the holding in Hastings Deering. Thereafter further payments were computed in the same way but now with the additional support given by the 2004 Act in reversing the effect of the holding in Hastings Deering. Questions 1 and 2 were so framed as to allow for the particular circumstances of Mr Chaffey, but the same answer was given to both Questions. The Appeals to this Court The Attorney-General for the Territory intervened in the proceeding in the Full Court and instituted the first of the two appeals now before this Court. Santos has the Commonwealth intervened in support of each appellant. The Attorney-General of its own appeal. instituted For the reasons that follow, the appeals should be allowed. It was a term of each grant of special leave that the appellant not seek to disturb any costs in favour of Mr Chaffey in the Full Court and that the appellant bear its costs of the appeal to this Court. The Submissions The appellants submit that the critical provisions in the Work Health Act are the stipulations in s 53 that the obligation imposed upon the employer to make payments to the worker or the dependants of the worker is imposed "subject to" and "in accordance with" Pt V and is an obligation to provide "such Crennan compensation as is prescribed". These references to Pt V are naturally to be construed as identifying Pt V as amended from time to time7. Further, the reference to "such compensation as is prescribed" is naturally construed as a reference to such compensation as is prescribed from time to time. It follows that on the proper construction of Pt V of the Work Health Act the method prescribed for quantification of the amount of compensation payable to a worker by an employer had not been fixed in permanent form at the date of the injury to Mr Chaffey and was always subject to variation. It was that construction of Pt V which Mr Chaffey disputed. Counsel pointed to other provisions of Pt V which were said to show that the temporal elasticity apparent from the terms of s 53 is limited, so that in respect of each injured worker the obligation of the employer thereafter is fixed by reference to the terms of the statute as it stood at the time of injury. Hence, in the case of Mr Chaffey, the changes made by the 2004 Act so diminished his accrued rights under the Work Health Act, his "property", as to amount to proscribed "acquisition". For the reasons that follow the construction of s 53 advanced by Mr Chaffey should be rejected, and that advanced by the appellants accepted. The result is that on the proper construction of the Work Health Act, s 50 of the Self-Government Act had no application to the change made by the 2004 Act. Acquisition of Property In the Industrial Relations Act Case8 Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ observed: "It is well established that the guarantee effected by s 51(xxxi) of the Constitution extends to protect against the acquisition, other than on just terms, of 'every species of valuable right and interest including ... choses in action'9. It has been held to prohibit the extinguishment of 7 Ocean Road Motel Pty Ltd v Pacific Acceptance Corporation Ltd (1963) 109 CLR 276 at 280, 282-284; Commonwealth v WMC Resources Ltd (1998) 194 CLR 1 at 74 [200]. (1996) 187 CLR 416 at 559. 9 Minister for the Army v Dalziel (1944) 68 CLR 261 at 290. See also Bank of NSW v The Commonwealth (1948) 76 CLR 1 at 299, 349; Australian Tape Manufacturers Association Ltd v The Commonwealth (1993) 176 CLR 480 at 509; (Footnote continues on next page) Crennan vested causes of action10. At least that is so if the extinguishment results 'in a direct benefit or financial gain ... and the cause of action is one that arises under the general law'11." Further, contraction in what otherwise would be the measure of liability in respect of a cause of action or other "right", may constitute an "acquisition" of property for the purposes of s 51(xxxi)12. Hence the change brought about by the 2004 Act in the content of the "remuneration" by reference to which the right of Mr Chaffey to compensation had been measured since 2003 could, all else being equal, constitute an "acquisition" of property in the necessary sense. But these appeals do not turn upon the notion of "acquisition". They depend upon the identification of the "property" to which s 50 of the Self-Government Act is said to apply. Counsel for Santos properly emphasised that the first task is to identify that bundle of rights which is said to constitute the "property" to which s 50 of the Self-Government Act applies. Counsel for Mr Chaffey did not dispute this. The term "property" is used in various settings to describe a range of legal and equitable estates and interests, corporeal and incorporeal13. In its use in s 51(xxxi) the term readily accommodates concepts of the general law. Where the asserted "property" has no existence apart from statute further analysis is imperative. It is too broad a proposition, and one which neither party contended for in these appeals, that the contingency of subsequent legislative modification or extinguishment removes all statutory rights and interests from the scope of Mutual Pools & Staff Pty Ltd v The Commonwealth (1994) 179 CLR 155 at 172, 10 Georgiadis v Australian and Overseas Telecommunications Corporation (1994) 179 CLR 297. 11 Georgiadis v Australian and Overseas Telecommunications Corporation (1994) 179 CLR 297 at 305. 12 See Commonwealth v WMC Resources Ltd (1998) 194 CLR 1 at 16 [15], 29- 30 [56], 37 [81]-[83], 49 [128]; Smith v ANL Ltd (2000) 204 CLR 493 at 13 Yanner v Eaton (1999) 201 CLR 351 at 388-389 [85]. Crennan s 51(xxxi). Newcrest Mining (WA) Ltd v The Commonwealth14 is an example to the contrary. That case concerned the use of statute to carve out mining interests from the radical title enjoyed by the Commonwealth upon the acceptance of the Territory pursuant to s 111 of the Constitution. Again, a law reducing the content of subsisting statutory exclusive rights, such as those of copyright and patent owners, would attract the operation of s 51(xxxi)15. On the other hand, the statutory licensing scheme for off-shore petroleum exploration the validity of which was upheld in the Commonwealth v WMC Resources16 was constructed so as to subject the scope and incidents of licences to the form of the legislation from time to time. In WMC, as with Pt V of the Work Health Act, by express legislative stipulation in existence at the time of the creation of the statutory "right", its continued and fixed content depended upon the will from time to time of the legislature which created that "right". Abolition of Common Law Rights The written submissions for Mr Chaffey stressed the importance of the abolition of certain common law rights by s 52 of the Work Health Act; the section is to be read with the transitional provision in s 189 which preserved accrued common law rights. Section 189 thus is a provision itself consistent with s 50 of the Self-Government Act. Subsections (1) and (2) of s 52 state: "52 Abolition of certain rights to bring action Subject to section 189, no action for damages in favour of a worker or a dependant of a worker shall lie against β the employer of the worker; any person who, at the relevant time, was a worker employed by the same employer as the deceased or injured worker; or 14 (1997) 190 CLR 513. 15 Commonwealth v WMC Resources Ltd (1998) 194 CLR 1 at 70-71 [182]-[187]. 16 (1998) 194 CLR 1. See also Minister for Primary Industry and Energy v Davey (1993) 47 FCR 151 at 163-165; Bienke v Minister for Primary Industry and Energy (1996) 63 FCR 567 at 585-587. Crennan the Nominal Insurer, in respect of β an injury to the worker; or the death of the worker β as a result of; or (ii) materially contributed to by, an injury. The purpose of subsection (1) is to ensure that, so far as the legislative power of the Legislative Assembly permits, no action for damages at common law shall lie in the Territory or otherwise in the circumstances described in that subsection and nothing in this Act shall be construed as derogating from that purpose." Mr Chaffey submitted that rights arising under the Work Health Act "represent a statutory expression of previously existing general law rights subsisting as between worker and employer in relation to work-related injuries". In oral submissions counsel put the point in rather different terms. These were that the abolition of common law rights by s 52 aided a construction of s 53 which gave to the statutory right a fixed rather than unstable character. This was far from saying that what "replaces" common law rights by a statutory regime such as that here, should be taken as having its characteristics. The common law was not concerned with the creation and funding of rights to compensation which might continue for many years, with compulsory insurance, a purpose of rehabilitation, and monitoring by a Scheme Monitoring Committee. Other Provisions Counsel for Mr Chaffey also relied upon s 65. This is the central provision dealing with long term incapacity and the making of payments of a stipulated percentage of average weekly earnings until the worker attains 65 years or, if it be a later date, normal retirement age. But the regime is, by the opening words of s 65(1) subjected to the rest of Pt V, including s 53. Crennan Reliance also was placed upon s 69. This was misplaced. This provides for the settlement by mediation, with a right of appeal given the worker if mediation should fail, of disputes arising from proposed cancellation or reduction of payments. Conclusions The appellants' construction of s 53 of the Work Health Act as it stood at the time of the injury suffered by Mr Chaffey is correct. The consequence is that his rights to compensation under that statute were of a nature which rendered them liable to variation by a provision such as that made by the 2004 Act. Once this nature of the "property" involved is understood it is apparent that there was no "acquisition" spoken of in s 50 of the Self-Government Act. The Attorney-General for that subsequent legislation might so remove the content of rights to compensation, as to go beyond what was contemplated by s 53 and amount to abolition. But that is not this case, and the prospect need not here be further considered. the Territory accepted Nor is it necessary to consider the alternative ground advanced by the appellants, that what was involved here was not an "acquisition" of property, but an adjustment and regulation by the 2004 Act of competing claims, rights and liabilities of "stakeholders" in the system established by the Work Health Act17. Orders The appeals should be allowed. The order of the Full Court should be set aside and in place thereof, each question answered "No". 17 Cf Nintendo Co Ltd v Centronics Systems Pty Ltd (1994) 181 CLR 134 at 161. Kirby KIRBY J. These two appeals, from a divided decision of the Full Court of the Supreme Court of the Northern Territory18, have taken this Court once again to the constitutional principles governing the obligation to provide "just terms" for the acquisition of property from a person, pursuant to an enacted law. As explained in the reasons of Gleeson CJ, Gummow, Hayne and Crennan JJ ("the joint reasons")19, the law challenged in the appeals is one enacted not by the Federal Parliament but by the legislature of the Northern Territory of Australia, acting pursuant to the Northern Territory (Self-Government) Act 1978 (Cth), These appeals have required this Court, once again, to consider the large number of decisions, many delivered in recent years, concerning the "just terms" requirement and the meaning of each of the individual words in its composite expression. Those words include whether the law in question was one "with respect to" the subject of the "just terms" guarantee; whether it was one involving an "acquisition"; whether, if so, what was acquired was "property"; and whether, in that case, the law provided for "just terms". Over the years, in the circumstances of individual cases, each and every word in the formulation has been closely scrutinised. The suggested imprecision of "just terms" discourse In recent times, members of this Court21 and academic commentators22 have noted what they have perceived to be inconsistencies or overly-fine distinctions that present difficulties for later courts and for other decision-makers seeking to apply the Court's doctrine on this subject in the circumstances of a new case. Thus, Professors Blackshield and Williams, by reference to several recent decisions, have suggested that outcomes in such cases appear to depend on "difficult questions of judgment" and "subtle distinctions β¦ exacerbated by the 18 Chaffey v Santos Ltd (2006) 18 NTLR 22. 19 Joint reasons at [1]-[4]. 20 cf Constitution, s 51(xxxi). 21 See, for example, Smith v ANL Ltd (2000) 204 CLR 493 referred to in the reasons of Callinan J at [56]. 22 Blackshield and Williams, Australian Constitutional Law and Theory, 4th ed (2006) at 1285; Dixon, "Overriding Guarantee of Just Terms or Supplementary Source of Power?: Rethinking s 51(xxxi) of the Constitution", (2005) 27 Sydney Law Review 639 at 639-640; Allen, "The Acquisition of Property on Just Terms", (2000) 22 Sydney Law Review 351. Kirby judicial differences in emphasis and approach."23 Similar suggestions have been made in other areas of judicial decision-making24. A measure of imprecision is probably inherent in all constitutional decisions and therefore deserving of no particular apology25. The way to bring clarity to this area of discourse would seem to be by attempting to identify more explicitly the purposes of the "just terms" guarantee26. However, the present appeals were argued within the four walls of recent decisional authority. No party made an attempt to propound a new or different approach so as to bring a brighter and more consistent light to bear on the task in hand. These appeals would not, therefore, afford a suitable occasion to attempt a new analysis, aided by contradictory submissions. Two disqualifications from "just terms" entitlements Adjustment of rights: Within the present approach two disqualifications appear to stand out, each of them relevant to the decision in these appeals. Unsurprisingly, they are interrelated. In Nintendo Co Ltd v Centronics Systems Pty Ltd27, six Justices of this Court said: "[A] law which is not directed towards the acquisition of property as such but which is concerned with the adjustment of the competing rights, claims or obligations of persons in a particular relationship or area of activity is unlikely to be susceptible of legitimate characterisation as a law with respect to the acquisition of property for the purposes of s 51 of the Constitution." (footnote omitted) 23 Australian Constitutional Law and Theory, 4th ed (2006) at 1285. 24 See eg Albarran v Members of the Companies Auditors and Liquidators Disciplinary Board (2006) 81 ALJR 1155 at 1168 [69]; 234 ALR 618 at 633 concerning the constitutional doctrine of the separation of the judicial power. 25 Theophanous v The Commonwealth (2006) 225 CLR 101 at 126 [60]. 26 Evans, "When Is an Acquisition of Property Not an Acquisition of Property? β The Search for a Principled Approach to Section 51(xxxi)", (2000) 11 Public Law Review 183 at 184. 27 (1994) 181 CLR 134 at 161 per Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ. See also Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 166, 198. Kirby In Commonwealth v WMC Resources Ltd28, I cited this passage but acknowledged that it was not always easy to ensure its consistent application: "In Nintendo, the character of the Act in question was determined to be beyond the reach of the constitutional guarantee of just terms. There have been other, similar cases. The difficulty has been to draw a satisfactory line between such cases and others where valuable rights are affected by legislation in a way adverse to the interests of the property owner. No formula of universal application can be expressed. This is because the task of characterisation which is invoked obliges the Court to evaluate all of the features of the law in question in order to classify it as falling within, or outside, the operation of the guarantee in s 51(xxxi)." (footnote omitted) These words remain true today. They are applicable to the decisions in these appeals. Inherent variability: The second relevant disqualification acknowledges, as a touchstone for the task of characterisation, that particular types of legislation will be outside the ambit of the guarantee to provide "just terms" for an "acquisition" because the statutory rights acquired may be seen as inherently susceptible to variation29. This category of non-application of the guarantee is usually traced to this Court's decision in Health Insurance Commission v Peverill was a case involving a claim based on a federal law of retrospective operation. That law was designed to reduce the amount which patients (and, by assignment of the benefits, medical practitioners) were entitled to claim by way of reimbursement for pathology services. The whole Court dismissed the attack on the challenged law, albeit for varied reasons, holding either that the benefit entitlement did not constitute "property", or that the retrospective reduction in the amount of benefits payable was not an "acquisition of property" within the meaning of s 51(xxxi)31. Relevantly, Mason CJ, Deane and Gaudron JJ held that the statutory right to reimbursement in the case was of a 28 (1998) 194 CLR 1 at 98-99 [251]-[252]. 29 The inherent susceptibility to modification or extinguishment was the essential argument of the appellants below. See Chaffey v Santos Ltd (2006) 18 NTLR 22 at 30 (1994) 179 CLR 226. 31 See (1994) 179 CLR 226 at 243 per Brennan J, 250-251 per Dawson J, 254-256 per Toohey J, 265-266 per McHugh J. Kirby kind inherently susceptible to variation32. When such variation occurred, with results disadvantageous to a person, this did not amount to "acquisition" of the property of that person, nor was the law to be characterised with respect to such acquisition. The guarantee was therefore not attracted. In Commonwealth v WMC Resources Ltd33, I endeavoured to explain how this category applied: "Some interests, of their nature, are much more likely to be catalogued as protected by the guarantee than others. If the interests are ephemeral, prone to ready variation or dependent upon benefits paid out of the consolidated revenue, they will much more readily be classified as falling outside the constitutional protection than where they are exclusive, transferable, require substantial investment, impose significant obligations and partake, by analogy, of the familiar features of stable and valuable property interests long recognised by the common law. The creation of legislation can scarcely be a new property consideration which, of itself, puts such interests beyond the protection of s 51(xxxi). After all, the Commonwealth can ordinarily create property interests only by legislation. Several interests created by federal legislation have been held to attract the protection of s 51(xxxi). Newcrest[34] is but the latest case to deny the proposition that all legislative rights are inherently provisional and of their nature liable to repeal without the provision of just terms." interests by federal I realise that expressions such as "inherently susceptible to variation" or "inherently provisional", like the equivalent phrase of disqualification "inherently incongruous"35, are not wholly satisfactory. They postulate as self-evident a disqualifying feature that needs to be established convincingly when it is challenged. Moreover, the feature is assumed to act as a disqualification from the "just terms" entitlement without necessarily explaining why it has that effect. However, this may be another illustration of the fact that, in legal reasoning and 32 (1994) 179 CLR 226 at 237. 33 (1998) 194 CLR 1 at 99 [253]. 34 Newcrest Mining (WA) Ltd v The Commonwealth (1997) 190 CLR 513. 35 Burton v Honan (1952) 86 CLR 169 at 180-181; Re Director of Public Prosecutions; Ex parte Lawler (1994) 179 CLR 270 at 285; Mutual Pools & Staff Pty Ltd v The Commonwealth (1994) 179 CLR 155 at 219-220; Georgiadis v Australian and Overseas Telecommunications Corporation (1994) 179 CLR 297 at 306-307; Newcrest (1997) 190 CLR 513 at 595; Theophanous v The Commonwealth (2006) 225 CLR 101 at 126 [60]. Kirby in constitutional elaboration especially, a point may ultimately be reached where the decision is sustained by considerations of impression and judgment. Verbal explanations, in such instances, can only go so far. Expressions such as "inherently variable" or "inherently incongruous" may still be useful for reaching the judgment necessary to decision-making. Application of the disqualifications in this case Approach to the problem: Whilst I accept the criticisms that have been levelled at the current doctrine and the occasional difficulty of reconciling the outcomes of particular cases36, the foregoing two considerations lead me, in the present case, to the conclusion that the appeals must be allowed. My reasoning is essentially the same as that of Heydon J37. Adjustment of entitlements: The scheme of the Work Health Act (NT) ("the Act") is designed to adjust the competing rights, claims and obligations of persons in the particular relationship of employment38. One can have views concerning the justice of particular adjustments made from time to time, and specifically of the adjustment in the present case which abolished (with retrospective operation) the inclusion of employer-paid superannuation payments as part of the "remuneration" of the "worker"39, Mr Chaffey, upon which his entitlement to compensation would otherwise be calculated40. However, indisputably, the legislation in question here, which was justified as an attempt to restore the previous understandings of the operation of the Act41, involved an adjustment in a statute containing a range of provisions burdening employers and favouring workers in specified ways. Most importantly, the history of workers' compensation law in Australia, since its first introduction in the early years of the twentieth century, has been one of frequent and repeated legislative change and adjustment both in the types of available benefits and in their quantification. Commonly, the adjustment has 36 See eg Commonwealth v WMC Resources Ltd (1998) 194 CLR 1 at 76-77 [211]. 37 Reasons of Heydon J at [59]-[67]. 38 See reasons of Heydon J at [64]-[66]. 39 The Act, s 3(1). 40 See joint reasons at [11]-[13]; cf Hastings Deering (Australia) Ltd v Smith (No 2) (2004) 18 NTLR 1. 41 See Northern Territory, Legislative Assembly, Parliamentary Debates (Hansard), 14 October 2004, cited in Chaffey v Santos Ltd (2006) 18 NTLR 22 at 39 [47]. Kirby seen the gradual increase in worker benefits. However, sometimes (as is said to be the case here), particular benefits have been reduced or abolished within a legislative "package" including a different mix of new entitlements and burdens. It was not too much to say, as Angel J did in the Full Court, with some hyperbole, that "[t]he percentage level of compensation, like interest rates and one-time goldmining 'booms' in Natal, may well have its 'ups and downs'"42. Inherent variability: Moreover, the particular provision of the Act, concerning the property right allegedly acquired by the removal of the superannuation component in the computation of the respondent's compensation benefits (s 53), contains a triple indication of the impermanency of the benefits accorded by the Act. The three indications of this susceptibility are shown in the critical section, reproduced as it was in force at the time, with appropriate emphasis: "Subject to this Part, where a worker suffers an injury within or outside the Territory and that injury results in or materially contributes to his or her β death; impairment; or incapacity, there is payable by his or her employer to the worker or the worker's dependants, in accordance with this Part, such compensation as is prescribed". Each of the emphasised phrases indicates, from the text of the statute, the impermanency and variability of the entitlement in question, and the necessity to read the statutory compensation "right", as it was provided by law from time to time. The right was, and is, therefore, a "right" inherently susceptible to variation. It follows that a law fulfilling the predicted variation was not a law with respect to the "acquisition" of property, nor was the "right" that was varied "property" that was susceptible to acquisition for "just terms" purposes. Conclusion: "just terms" inapplicable These two features of the Act are therefore sufficient, within the present principles endorsed by this Court, to deny an entitlement to compensation for 42 Chaffey v Santos Ltd (2006) 18 NTLR 22 at 30 [16], invoking Laughton v Griffin [1895] AC 104 at 106-107 per Lord Macnaghten. Kirby what is, after all, simply the latest "adjustment" and "variation of benefits" by the Act. In this case, there was not an uncompensated acquisition by abolition of a pre-existing right to bring an action for damages at common law such as led to the outcome in Smith v ANL Ltd43. Instead, there was an adjustment and variation in entitlements wholly of a statutory kind. Although the origin of the entitlements in statute was not necessarily fatal to the entitlement to "just terms" for their abolition or variation, their inherent impermanency and variability was. The impugned provision of the Act therefore did no offence to the "just terms" requirement in the Northern Territory (Self-Government) Act. It was valid. Orders I therefore agree in the orders proposed in the joint reasons. 43 (2000) 204 CLR 493. See also Georgiadis (1994) 179 CLR 297 at 310-311. Callinan CALLINAN J. Subject to the matters which I later discuss, I agree with the construction of the relevant legislation adopted in the joint judgment, and the orders proposed by its authors. The fact that a right or interest is the entire creature of an enactment does not, on that account, immunize its extinguishment, alteration, reduction or acquisition against an obligation on the part of the responsible polity to pay compensation. Many rights and interests, as well as obligations, are the creature of statute, but people coming to possess the former outlay money, time and effort by and on the faith of that possession. Others dealing with the possessor similarly do so. Everything that the Commonwealth lawfully does and creates, it does pursuant to statute and the Constitution. That certainly does not have the consequence that the Commonwealth may escape the operation of s 51(xxxi). It is subject to these basic propositions that various statements made by the Court, in a quite different setting, respecting repeals and amendments in Kartinyeri v Commonwealth44 must be read. Sometimes reference has been made to the "fragility" of a particular right, title or interest45. That description, although it may be relevant to value, has nothing to say about the existence of the right, title or interest. All legislation is amendable or repealable. Amendments and repeals may however come at a price. It is not merely the inherent quality of legislative change that will defeat a right to compensation, but also the nature and quality of the object of the legislation, here the provision of benefits of specially adapted kinds to workers. Those benefits may not be confined to monetary benefits: for example, they might include access to rehabilitation or changed working conditions. So too, the benefits may fluctuate as the economy itself fluctuates. Workers compensation is a unique form of benefit, closely associated with working conditions generally. These are notorious matters. Sometimes the employer and its insurer may appear to be advantaged, at others the employees. Arrangements and transactions, for example, sales of going concerns employing many people are made with an awareness of these possibilities. These are considerations which distinguish workers compensation from conventional choses in action and other interests. 44 (1998) 195 CLR 337. 45 See, for example, Western Australia v Ward (2002) 213 CLR 1 at 93 [91], 240-241 [561], 262-263 [616], 303-304 [702]; Wilson v Anderson (2002) 213 CLR 401 at 457 [138], 458-459 [142]; Fejo v Northern Territory (1998) 195 CLR 96 at 150- Callinan I do not doubt that s 50 of the Northern Territory (Self-Government) Act 1978 (Cth) should be construed in the same way as the Constitutional guarantee. It is not necessary however, for the purposes of this case to attempt to resolve the unsatisfactory state of the conflicting authorities and pronouncements in regard to it to which I referred in Smith v ANL Limited46, and in respect of which my views remain unchanged. The appeals should be allowed. 46 (2000) 204 CLR 493. See the judgment of Callinan J. HEYDON J. The background is set out fully in the joint judgment, and the abbreviations in it are adopted below. Mr Chaffey's rights to compensation under the Work Health Act were of a nature that rendered them inherently liable to variation by provisions such as those in the 2004 Act, and hence the 2004 Act did not effect an acquisition. This is so not because of the specific terms of s 53 of the Work Health Act read in isolation, but for the following reasons. First, legislation relating to workers compensation has historically been peculiarly subject to frequent and often extensive amendment in the light of changes in economic conditions, the solvency of insurers, and the fluctuating positions of executive governments in relation to indemnifying under-funded workers compensation schemes. It is thus unlikely that persons affected by workers compensation legislation will commonly have any expectation that it will remain immune from amendment in a way which can alter existing rights. Secondly, the Work Health Act reflects a particular balance between the interests of those affected by it. From the point of view of workers, apart from the provisions for the payment of benefits in Pt V, the Work Health Act has the following purposes appearing in its long title: "[T]o promote occupational health and safety in the Territory to prevent workplace injuries and diseases, to protect the health and safety of the public in relation to work activities [and] to promote the rehabilitation and maximum recovery from incapacity of injured workers ..." These purposes are carried out by the creation in Pt IV of numerous statutory duties on employers, occupiers, self-employed persons, manufacturers, owners and workers (ss 29-31). Provision is made for work health officers to be appointed (s 35) and to carry out investigations (ss 36-39). Provision is made for the Authority to issue improvement (s 40) and prohibition (s 41) notices, and for the creation of health and safety committees in workplaces (ss 44A-44G). Specific provision is made to ensure the rehabilitation of injured workers following an injury (ss 75-78). The Scheme Monitoring Committee also has the functions of advising the effectiveness of premiums in encouraging employers who do, and penalising employers who do not, develop and maintain safe working practices (s 145(1A)). the Minister (s 145(1)(d)) and reporting on How are these advantages for workers to be secured? The Act creates a system of insurers approved by the Work Health Authority, where approval depends in part on the ability to provide the necessary insurance services and on financial viability (ss 119(3)(a) and (c) and 120(3)(a) and (b)). Unless an employer is a self-insurer (s 120), it is compulsory to take out insurance with an approved insurer (s 126). There is a statutory duty on approved insurers to indemnify the employers they have insured (s 126(A)). There is provision for a Nominal Insurer (s 150) and a Nominal Insurer's Fund (s 162) to protect injured workers whose employers lack workers compensation insurance (s 150(1A)(a)) and to protect employers and injured workers where insurers default in payment of compensation (s 150(1A)(b); and see ss 137 and 167). The "viability and performance of the workers compensation scheme" is to be monitored by the Scheme Monitoring Committee (s 145(1)(a)), as are premium rates (s 145(1)(aa)) and overall underwriting results (s 145(1)(c)). The Committee has on it a representative of the Authority and other members appointed by the Minister (s 141), and the Authority is obliged to supply it with information (s 146). It is crucial to the operation of the Committee that insurers and self-insured employers be able to provide relevant statistical and other information, which is a matter material to their approval (ss 119(3)(d) and 120(3)(c)). Section 25(1) provides that the Work Health Advisory Council has the functions of inquiring into and reporting to the Minister on matters referred to it by the Minister, and of investigating and making recommendations to the Minister about any matter under the Act or relating to the administration of the Act (s 25(1)(a) and (b)). Thus the Council can inquire into and report on the adequacy of benefits payable to injured workers and the consequences, including the costs consequences of changing those benefits. The existence of these mechanisms for giving information and advice to the Minister about how the scheme is operating suggests that an implication of the legislation is that the scheme will remain workable, and that it will be amended if it is not. The scheme involves reciprocity in the sense that the rights of workers to compensation depend on the duty of employers to pay it. Many employers will be unable to fulfil their duty to pay compensation unless they can obtain insurance in order to enable them to pay it. The availability of insurance depends on the willingness of insurers to enter the particular market, their ability to offer affordable premiums, and their capacity to pay on the policies entered by employers. It is possible that injured workers could receive payments until the attainment of the age of 65 (or normal retirement age if that is longer) (s 65(1)). The liability of insurers under particular policies could continue for very long periods. Thus, as Angel J said in dissent in the Full Court, the scheme created by the Work Health Act47: "manifestly balances the rights of the worker to proper compensation for work injury irrespective of fault against the employer's ability to pay that compensation. It is a compromise between payer and payee, on the one 47 Chaffey v Santos Ltd (2006) 18 NTLR 22 at 29 [12]. hand providing an adequate level of compensation to injured workers, on the other containing that level to one which is affordable by employers, and, ultimately, by society at large." In these circumstances it is clear that the legislation contemplates the possibility of frequent amendment in order to adjust, and ensure the continuing operation of, the scheme in the interests of workers, employers and insurers over long periods of time during which economic and commercial conditions are likely to fluctuate, perhaps radically. For these reasons the reference in s 53 to "such compensation as is prescribed" means "prescribed by or under the Act from time to time". The orders proposed in the joint judgment should be made. |
HIGH COURT OF AUSTRALIA COMPTROLLER GENERAL OF CUSTOMS APPELLANT AND DOMENIC ZAPPIA RESPONDENT Comptroller General of Customs v Zappia [2018] HCA 54 14 November 2018 ORDER Appeal allowed. Set aside orders 1, 2 and 3 of the order of the Full Court of the Federal Court of Australia made on 19 September 2017 and, in their place, order that the appeal to that Court be dismissed. On appeal from the Federal Court of Australia Representation S P Donaghue QC, Solicitor-General of the Commonwealth, with D F C Thomas and R A Minson for the appellant (instructed by Australian Government Solicitor) G O'L Reynolds SC with R S Angyal SC, D P Hume and J K Mee for the respondent (instructed by Hall Partners) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Comptroller General of Customs v Zappia Customs and excise β Customs control β Dutiable goods β Possession, custody or control of dutiable goods β Where company held warehouse licence under Customs Act 1901 (Cth) β Where dutiable goods stolen from company's warehouse before goods entered for home consumption β Where respondent employed by company as general manager and warehouse manager β Where s 35A(1) of Customs Act relevantly provided that a person who "has, or has been entrusted with, the possession, custody or control" of dutiable goods subject to customs control and who fails to keep goods safely shall, on demand by Collector, pay amount equal to customs duty which would have been payable if goods had been entered for home consumption on day of demand β Where respondent served with demand by Collector under s 35A(1) β Where respondent applied to Administrative Appeals Tribunal for review of Collector's demand β Where Tribunal found respondent directed what was to happen to goods on day-to-day basis β Whether respondent was person who "has, or has been entrusted with, the possession, custody or control" of dutiable goods subject to customs control. Words and phrases β "authority to deal with", "Collector", "customs control", "dutiable goods", "employee", "fails to keep the goods safely", "has, or has been entrusted with", "home consumption", "management or control", "operational control", "owner", "possession, custody or control", "power or authority", "warehouse licence". Customs Act 1901 (Cth), ss 30, 35A, 36, 37, Pt V. KIEFEL CJ, BELL, GAGELER AND GORDON JJ. This appeal from a judgment of the Full Court of the Federal Court1, given on appeal on a question of law from a decision of the Administrative Appeals Tribunal2, turns on whether an employee of the holder of a warehouse licence can meet the description of "a person who has, or has been entrusted with, the possession, custody or control of dutiable goods which are subject to customs control" in s 35A(1) of the Customs Act 1901 (Cth) ("the Act"). Contrary to the conclusion of the majority in the Full Court, an employee of the holder of a warehouse licence can meet that statutory description. Moreover, on the facts found by the Tribunal, Mr Domenic Zappia ("Domenic") met that description in his capacity as an employee of Zaps Transport (Aust) Pty Ltd ("Zaps"). The Act "Dutiable goods", within the meaning of the Act, include goods in respect of which customs duty is payable3. Tobacco products are dutiable goods4. Customs duty is payable on dutiable goods by the time those goods are entered for home consumption5. The customs duty is payable as a debt to the Commonwealth by the "owner" of the goods6. The term "owner" in respect of goods is defined for the purposes of the Act to include "any person (other than an officer of Customs) being or holding himself or herself out to be the owner, importer, exporter, consignee, agent, or person possessed of, or beneficially interested in, or having any control of, or power of disposition over the goods"7. The object of that definition is "to extend 1 Zappia v Comptroller-General of Customs (2017) 254 FCR 363. 2 Re Zaps Transport (Aust) Pty Ltd and Comptroller General of Customs [2017] AATA 202. 3 Section 4(1) of the Act (definition of "dutiable goods"). 4 See ss 15, 16, 19AB and 19AC and Sch 3 Ch 24 of the Customs Tariff Act 1995 (Cth). Item 1 of the table in s 132AA(1) of the Act. 6 Section 165 of the Act. 7 Section 4(1) of the Act (definition of "owner"). Bell Gordon to several persons liabilities in respect of the same goods"8. The customs duty on the goods "follows the goods until the duties are paid" and "a personal liability arises in the case of any person who becomes owner of the goods before the duties are paid"9. By operation of s 30 of the Act, goods imported into Australia become subject to "customs control" and remain subject to customs control until either exported from Australia or delivered into home consumption in accordance with an authority or permission under the Act. Ordinarily, an authority to deliver goods into home consumption must be given by a "Collector", who can be the Comptroller-General of Customs10 (who has the general administration of the Act11) or an officer of Customs12, after goods have been entered for home consumption and any applicable customs duty has been paid13. During the period in which the goods remain subject to customs control, the goods cannot be moved, altered or interfered with except as authorised by or under the Act14. The statutory policy which underlies that operation of s 30 was identified by O'Connor J soon after the enactment of the Act. Because goods become difficult to trace once delivered into home consumption or "circulation", goods must "from the time they are first imported until duty is paid ... be kept under customs control" for the protection of the revenue15. 8 Wing On & Co Ltd v Collector of Customs (NSW) (1938) 60 CLR 97 at 104; [1938] HCA 71. See also Moama Refinery Ltd v Chief Executive Officer of Customs (2001) 115 FCR 205 at 214 [28]. 9 Wing On & Co Ltd v Collector of Customs (NSW) (1938) 60 CLR 97 at 106. 10 Section 8(1)(a) of the Act. 11 Section 7 of the Act. 12 Section 8(1)(b) read with the definition of "officer" in s 4(1) of the Act. 13 Section 71C(4) of the Act. 14 Section 33 of the Act. 15 R v Lyon (1906) 3 CLR 770 at 784; [1906] HCA 17. Bell Gordon That statutory policy continues in the Act, which, in its amended form, must be read as an integrated whole16. Relevantly, the policy informs interlocking provisions of the Act designed to facilitate the warehousing of imported goods prior to those goods being entered for home consumption. Where goods are imported, the owner of the goods has the option of entering them for warehousing as an alternative to immediately entering them for home consumption17. Where the goods are entered for warehousing and any applicable charges or fees have been paid, an authority must be given to the owner of the goods to take the goods into warehousing18. The warehoused goods must then be stored in a licensed warehouse where they remain subject to customs control under s 30 until such time as the goods are entered for home consumption and a further authority is given, after payment of the applicable customs duty19. Part V of the Act makes elaborate provision for the grant, suspension and cancellation of warehouse licences by the Comptroller-General. Grant of a warehouse licence is on written application20. Where the applicant is a company, it is required to describe any director, officer, shareholder and employee who "would participate in the management or control of the warehouse"21. Any warehouse licence then granted is subject to standard conditions which include that the holder of the licence must notify the Comptroller-General if a person not so described in the application "commences ... to participate" in "the management or control of the warehouse"22. Amongst the circumstances in which the Comptroller-General is prohibited from granting a warehouse licence is if he or she is of the opinion that a director, officer, shareholder or employee of the applicant "who would participate in the management or control of the 16 Section 11B(1) of the Acts Interpretation Act 1901 (Cth). See Commissioner of Stamps (SA) v Telegraph Investment Co Pty Ltd (1995) 184 CLR 453 at 463, 479; [1995] HCA 44. 17 Section 68(2) of the Act. 18 Sections 68(3B) and 71DJ(1), (4) of the Act. 19 Sections 68(3A) and 71C(1), (4) of the Act. 20 Section 80(a) of the Act. 21 Sections 80(d) and 81(1)(c), (d) of the Act. 22 Sections 82(1)(a) and 82C of the Act. Bell Gordon warehouse is not a fit and proper person so to participate"23. Correspondingly, amongst the circumstances in which the Comptroller-General may suspend or cancel a warehouse licence is if he or she is satisfied that a director, officer or shareholder or an employee of the holder of the licence, being a person "who participates in the management or control of the warehouse", is "not a fit and proper person so to participate"24. A person is taken to participate in the management or control of a warehouse for each of those purposes if he or she has authority to "direct the operations of the warehouse" or "direct activities in the warehouse, the removal of goods from the warehouse, or another important part of the operations of the warehouse" or "direct a person who has [such] authority ... in the exercise of that authority"25. The "holder of a warehouse licence" is subject to a number of specific obligations26. One of them is that the holder "must not permit warehoused goods to be delivered for home consumption" unless the goods "have been entered for home consumption" and "an authority to deal with them is in force"27. Within that overall context, s 35A(1) of the Act provides: "Where a person who has, or has been entrusted with, the possession, custody or control of dutiable goods which are subject to customs control: fails to keep those goods safely; or (b) when so requested by a Collector, does not account for those goods to the satisfaction of a Collector in accordance with section 37; that person shall, on demand in writing made by a Collector, pay to the Commonwealth an amount equal to the amount of the duty of Customs which would have been payable on those goods if they had been entered for home consumption on the day on which the demand was made." 23 Section 81(1)(c) and (d) of the Act. 24 Sections 86(1)(e), (f) and 87(1)(a) of the Act. 25 Section 78(3) of the Act. 26 See ss 90 and 99 of the Act. 27 Section 99(2) of the Act. Bell Gordon The Court was informed on the hearing of the appeal that, in practice, officers of the Australian Taxation Office have been appointed as officers of Customs for the purpose of exercising the powers of a Collector under the Act in relation to tobacco products. Like customs duty, an amount payable by a person on whom a demand is made by a Collector pursuant to s 35A(1) is a debt due to the Commonwealth28. Liability to pay that amount does not affect the liability of that person under or by virtue of any other provision of the Act29, including such criminal liability as the person might have under s 36 of the Act. Mirroring the language of s 35A(1)(a) and (b), s 36 of the Act provides that a person who "has, or has been entrusted with, the possession, custody or control" of dutiable goods which are subject to customs control commits an offence of strict liability if the person "fails to keep the goods safely"30 or "when so requested by a Collector, does not account for the goods to the satisfaction of a Collector in accordance with section 37"31. Bearing on the operation of s 35A(1)(b), and on the operation of equivalent language in s 36, is s 37 of the Act. Section 37 provides that a person accounts for goods to the satisfaction of a Collector in accordance with that section if, and only if, the Collector sights the goods or (if the Collector is unable to sight the goods) the person satisfies the Collector that the goods have been dealt with in accordance with the Act. A decision of a Collector to make a demand under s 35A(1) is subject to review by the Tribunal32. From the decision of the Tribunal on review an appeal lies on a question of law to the Federal Court33. 28 Section 35A(2) of the Act. 29 Section 35A(4)(a) of the Act. 30 Section 36(2) and (3) of the Act. 31 Section 36(6) and (8) of the Act. 32 Section 273GA(1)(a) of the Act. 33 Section 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth). Bell Gordon The facts Zaps operated a warehouse pursuant to a warehouse licence issued to it under Pt V of the Act. Mr John Zappia was the sole director of Zaps. Domenic, his son, was employed by Zaps as its "general manager" and its "warehouse manager". In accordance with the standard condition of its warehouse licence which required such notification, Zaps had notified the Australian Taxation Office that each of Domenic and his father was a person who participated in the management or control of the warehouse. Tobacco products were stolen from the warehouse in a break-in which occurred when none of Zaps' employees were present. Following a meeting between Domenic representing Zaps and officers of the Australian Taxation Office, a Collector served a notice of demand under s 35A(1) of the Act on each of Zaps, Domenic and his father. Each notice asserted a failure to keep the stolen goods safely as required by s 35A(1)(a) and demanded from each respective person payment of an amount equal to the customs duty which would have been payable on the stolen goods if those goods had been entered for home consumption on the day on which the demand was made. Zaps, Domenic and his father each applied to the Tribunal for review of the decision to demand payment from them. Each was unsuccessful; the Tribunal affirmed each decision of the Collector. In affirming the Collector's decisions to demand payment, the Tribunal found that the tobacco products had not been kept safely34, that Zaps had been entrusted with the possession, custody and control of those tobacco products by their owner35, that Domenic's father as the person "in overall command of the business"36 exercised control over the stolen goods and had also been entrusted with that control in his capacity as an officer of Zaps37, and that Domenic also exercised control over the tobacco products38. 34 [2017] AATA 202 at [13]. 35 [2017] AATA 202 at [16]-[19]. 36 [2017] AATA 202 at [22]. 37 [2017] AATA 202 at [30]. 38 [2017] AATA 202 at [31]. Bell Gordon In relation to the control exercised by Domenic, having recounted evidence to the effect that he made the operational decisions at the warehouse, that he oversaw and was responsible for what happened to warehoused goods and that he had operational control of the warehouse subject to needing to refer anything "big" β meaning any decision that might require legal advice or that might have taxation consequences β to his father39, the Tribunal expressed its finding as follows40: "I am also satisfied Domenic exercised control over the goods, albeit that his control was subordinate to that of his father and β ultimately β that of the company. The evidence establishes that he was the one who directed what was to happen to the goods on a day-to-day basis. He exercised delegated authority under which he could accept and release the goods. If he gave orders with respect to the goods, the employees followed them. His operational role was underlined by the fact he met with the officers from the [Australian Taxation Office] ... to discuss what had happened to the goods." Domenic appealed from the Tribunal's decision to the Federal Court. No appeal was brought on behalf of or by his father, who was a bankrupt, or by Zaps, which was in liquidation. The Full Court The Federal Court was constituted for the purpose of the appeal by a Full Court comprised of Davies, White and Moshinsky JJ. By majority, the Full Court allowed the appeal, set aside the decision of the Tribunal and declared that the demand made by the Collector on Domenic was "invalid and of no effect"41. The majority, White and Moshinsky JJ, concluded that s 35A(1) on its proper construction "is not to be understood as directed to the kind of control exercised by an employee of a licensed warehouse, acting in that capacity"42. The principal steps by which their Honours reached that conclusion were: first, to disaggregate the section's reference to "a person who has, or has been 39 [2017] AATA 202 at [24]-[25]. 40 [2017] AATA 202 at [31]. 41 (2017) 254 FCR 363 at 392 [138]. 42 (2017) 254 FCR 363 at 389 [116]. Bell Gordon entrusted with, the possession, custody or control of dutiable goods" into six distinct applications43; second, to treat the section's disaggregated application to a person who "has" the "possession" of dutiable goods as limited to a person who has exclusive possession of the goods44; and third, to treat the section's similarly disaggregated application to a person who has "the control" of dutiable goods as similarly limited to a person who has exclusive physical control of the goods45. Control exercised by employees, their Honours opined, "is not generally of that kind"46. Adoption of that construction meant that, in the opinion of the majority, the Tribunal had erred in law in its understanding of "control". "It determined the review adversely to Domenic even though he was an employee and even though he had incomplete control over the goods."47 Davies J disagreed. Her Honour took the view that "the possession, custody or control" in s 35A(1) should be read as a composite phrase in which "possession", "custody" and "control" each connoted a degree "of some right, power or authority to deal with the goods in question"48, with the result that the question of liability will "in each case ... depend on the measure of control exercised by the person over the dutiable goods"49. Her Honour accordingly declined to construe the section to mean that a person acting in the capacity of an employee and under the direction of someone else "could never be liable under that section"50, and noted that the Tribunal found that Domenic exercised "operational control"51. 43 (2017) 254 FCR 363 at 380 [68]. 44 (2017) 254 FCR 363 at 385-386 [97]. 45 (2017) 254 FCR 363 at 386 [98], 389 [116]. 46 (2017) 254 FCR 363 at 389 [116]. 47 (2017) 254 FCR 363 at 389 [119]. 48 (2017) 254 FCR 363 at 372 [31]-[32]. 49 (2017) 254 FCR 363 at 374 [36]. 50 (2017) 254 FCR 363 at 374 [36]. 51 (2017) 254 FCR 363 at 374-375 [37]-[38]. Bell Gordon Her Honour nevertheless considered that the Tribunal erred in law in failing specifically to address the statutory question posed by s 35A(1)(a) of whether the operational control was such that it could be said that Domenic "failed" to keep the stolen goods safely on the occasion of the break-in52. On that basis, her Honour would have allowed the appeal and remitted the matter to the Tribunal for reconsideration53, a course which White and Moshinsky JJ would have taken if their conclusion had been wrong54. The appeal to this Court The Comptroller-General, in the appeal by special leave to this Court, argues that Davies J was correct to decline to construe s 35A(1) of the Act in a way that puts an employee beyond the section's reach, and challenges the reasoning which led the majority in the Full Court to the contrary conclusion. The Comptroller-General goes on to argue that the facts found by the Tribunal are sufficient to establish that Domenic both had control of the stolen goods and failed to keep those goods safely on the occasion of the break-in. For Domenic, it is argued that the majority in the Full Court was correct in its ultimate conclusion that the Tribunal erred in law in its understanding of "control" in s 35A(1) of the Act, on the basis that the section's reference to "a person who has ... the ... control of dutiable goods" should be construed in context to connote a person who has "paramount control" as distinct from "subordinate control" of dutiable goods. That narrow construction is argued to be indicated by the "quasi-penal" nature of s 35A(1) and by the use of the same language in the offence-creating provisions of s 36. Although his father might have had paramount control, the argument is that on the facts found by the Tribunal Domenic did not. Construction of s 35A(1) The description in s 35A(1) of the Act of "a person who has, or has been entrusted with, the possession, custody or control of dutiable goods which are subject to customs control" must be read in light of the statutory purpose of subjecting dutiable goods to customs control, namely, to ensure that customs duty is paid before delivery of those goods into home consumption. The 52 (2017) 254 FCR 363 at 374-375 [35], [37]-[38]. 53 (2017) 254 FCR 363 at 375-376 [41]. 54 (2017) 254 FCR 363 at 389 [120]. Bell Gordon description must also be read in light of the obligations imposed by s 35A(1)(a) and (b) on a person who meets that statutory description, breach of either of which, on demand for payment by a Collector, triggers civil liability on the part of that person to pay to the Commonwealth an amount equal to the customs duty which would have been payable on those goods if they had been entered for home consumption on the day of the demand. Stated in affirmative terms, the obligation imposed by s 35A(1)(a) is to keep the dutiable goods safely, including by preventing their entry into home consumption without customs duty being paid. Stated in similarly affirmative terms, the obligation imposed by s 35A(1)(b) when read with s 37 is, on request by a Collector, either to show the dutiable goods to a Collector or to satisfy the Collector that those goods have been dealt with in accordance with the Act. The critical reference within the description to "the possession, custody or control" must be read in that context, recognising that none of the terms "possession", "custody" or "control" has a fixed legal meaning and that the power or authority of a person in relation to a thing connoted by any one or more of those terms in statutory collocation is a question of degree55. The individual terms, used disjunctively, serve to indicate both that the requisite degree of power or authority is not closely confined and that the requisite degree of power or authority can arise from such a range of sources that, depending on the circumstances, one term might be more appropriate to use than another. Plainly, the reference within the description is to a degree of power or authority in relation to dutiable goods which need not rise to the level of having such control of, or power of disposition over, the dutiable goods as is needed for a person to be an owner of those goods within the meaning of the Act. Equally plainly, the reference is to a degree of power or authority in relation to dutiable goods which subsists despite those goods being subject to customs control under s 30 and which is sufficient to enable a person to meet the affirmative content of the obligations in s 35A(1)(a) and (b). The combination of the last two of those characteristics yields the relevant discrimen. The reference to "the possession, custody or control" of dutiable goods is appropriately construed as a compendious reference to that degree of power or 55 Federal Commissioner of Taxation v Australia and New Zealand Banking Group Ltd (1979) 143 CLR 499 at 519-520, 532-533; [1979] HCA 67. See also Queensland v Congoo (2015) 256 CLR 239 at 255 [11], 301-302 [161]; [2015] HCA 17. Bell Gordon authority which is sufficient to enable a person to meet the obligations both to keep those goods safely and, on request by a Collector, either to show the goods to a Collector or to satisfy a Collector that the goods have been dealt with in accordance with the Act. A person who "has" the possession, custody or control of dutiable goods within the meaning of the section is a person who possesses power or authority in relation to those goods to that degree, irrespective of the manner in which that person might choose to exercise that power or authority. This construction of s 35A(1) of the Act is consistent with the construction of an earlier and materially identical provision in s 60(1) of the Excise Act 1901 (Cth) adopted in Collector of Customs (NSW) v Southern Shipping Co Ltd56. There a manufacturer had delivered, to a shipping company, excisable tobacco products which had not been entered for home consumption and which therefore remained "subject to the control of the Customs". Pending shipment, and with the knowledge and approval of an examining officer employed by the Department of Customs and Excise, agents of the shipping company had locked the tobacco in a store on a wharf which was owned by the Maritime Services Board of New South Wales. The agents had then handed the keys to the Customs office operated by the Collector of Customs for New South Wales. The wall of the store was broken and the excisable goods were stolen from it. The Collector of Customs afterwards demanded payment of the amount of excise which would have been payable had the goods not been stolen. The questions asked of the Full Court of this Court on a case stated included whether, as a matter of law within the meaning of s 60, the shipping company was "a person who had the possession custody or control" of the excisable goods and "a person who had been entrusted with the possession custody or control" of those goods. Also included in the case stated was a question whether, as a matter of law within the meaning of s 60(1)(a) β the equivalent of s 35A(1)(a) of the Act β the shipping company "failed" to keep those goods safely57. To each of those questions the unanimous answer of the Court was affirmative58. In so answering those questions, all members of the Court rejected arguments put on behalf of the shipping company to the effect that the "possession, custody and control" of the goods had passed to the Collector of Customs on the handing over of the key "because the Customs had a greater interest in the goods than the [shipping company] who was a mere carrier for 56 (1962) 107 CLR 279; [1962] HCA 20. 57 (1962) 107 CLR 279 at 282. 58 (1962) 107 CLR 279 at 286-287, 289-292, 294-297, 300-302, 304-305, 307. Bell Gordon reward" and to the effect that the shipping company had not "failed" to keep the goods safely because there had been no "dereliction of duty"59. Rejecting the argument that the shipping company had not "failed" to keep the goods safely, McTiernan J said that "[t]he task of keeping goods safely cannot be said to have been fulfilled if the goods are stolen even though reasonable precautions were taken"60. Yet his Honour also rejected as too extreme an argument made on behalf of the Collector of Customs to the effect that "fails" in s 60(1)(a) meant no more than "does not" and thereby imposed absolute liability. He said61: "'Fails' is a word with various meanings. I think that in s 60 its appropriate meaning is that the person concerned is to be liable if he comes short of keeping the goods safely, that is preserving them from loss or damage. The word 'fails' in my opinion is not strong enough to impose upon the person concerned so onerous a duty as that of avoiding the unavoidable. ... Lex non cogit ad impossibilia. Paragraph (a) should be read subject only to that presumption." Dixon CJ, with whom Windeyer J agreed, adopted a similar construction of the word "fails"62. The reasoning of the other members of the Court, with the exception of Owen J63, was not inconsistent with this approach64. Once it is accepted that s 35A(1)(a) of the Act β and by parity of reasoning s 35A(1)(b) of the Act β imposes an obligation which a person must have the capacity to comply with in order to meet the description of "a person who has, or has been entrusted with, the possession, custody or control of dutiable goods", there is no reason why the power or authority that the person possesses needs to be exclusive or paramount. 59 (1962) 107 CLR 279 at 283-284. 60 (1962) 107 CLR 279 at 290. 61 (1962) 107 CLR 279 at 291. 62 (1962) 107 CLR 279 at 287, 302. 63 (1962) 107 CLR 279 at 305. 64 (1962) 107 CLR 279 at 292, 295, 299. Bell Gordon The subject of s 35A(1) is "a person". Consistent with the section's purpose of protecting the revenue, the operation of s 35A(1) is wider than that of a section dealing with, for example, the "holder of a warehouse licence". Several persons may each possess power or authority to the requisite degree within a chain of command or hierarchy of responsibility. Within the scheme of the Act, there is nothing surprising about the potential for several persons to be subject to liability under s 35A(1) for the same amount. Just as an amount of customs duty will be payable on dutiable goods entered for home consumption by each of several persons who meet the definition of "owner" until that amount is paid by some person65, so an amount equal to the customs duty which would have been payable on dutiable goods if they had been entered for home consumption will be payable, on demand, by each person who meets the description of "a person who has, or has been entrusted with, the possession, custody or control" of those goods and who fails to comply with an obligation in s 35A(1)(a) or (b) until that amount is paid by some person. Thus, as is implicit in the detail of the licensing regime in Pt V of the Act to which attention has already been drawn, multiple directors, shareholders, officers or employees of the holder of a warehouse licence might have such authority to direct the operations of the warehouse or a part of the operations of the warehouse as to meet the description of "a person who has, or has been entrusted with, the possession, custody or control" of the dutiable goods within their respective spheres of responsibility. The mere fact that one or some of those persons might act subject to the direction of another is insufficient to disqualify any of them from having the requisite degree of power or authority in relation to the dutiable goods. Contrary to the argument advanced on behalf of Domenic, application of that approach to the equivalent language imposing criminal liability in s 36 of the Act does not run counter to the general principle of statutory construction that the imposition of criminal liability should be "certain and its reach ascertainable by those who are subject to it"66. The task of identifying the employees of the holder of a warehouse licence on whom that criminal liability is imposed is not 65 See Wing On & Co Ltd v Collector of Customs (NSW) (1938) 60 CLR 97 at 104. 66 Construction Forestry Mining and Energy Union v Mammoet Australia Pty Ltd (2013) 248 CLR 619 at 634-635 [48]; [2013] HCA 36, quoting Director of Public Prosecutions (Cth) v Keating (2013) 248 CLR 459 at 479 [48]; [2013] HCA 20. Bell Gordon significantly more difficult than the task of identifying the employees whom the holder of a warehouse licence is obliged to notify as persons who participate in the management or control of the warehouse. It is also incorrect to characterise the civil liability created by s 35A(1) of the Act as "quasi-penal in character"67. To construe the common language of ss 35A and 36 in the manner indicated does not involve "extending any penal category"68. Application of s 35A(1) The facts found by the Tribunal were sufficient to establish that Domenic was a person who had the possession, custody or control of the stolen goods and who failed to keep those goods safely. The fact that he had authority to direct what was to happen to the goods in the warehouse on a day-to-day basis was sufficient to establish that he had the requisite degree of power or authority in relation to the goods. And the fact that the goods were stolen from the warehouse during a period in which he continued to have that authority was sufficient to establish that he failed to keep the goods safely. Orders The appeal is to be allowed. Orders 1 to 3 of the orders made by the Full Court on 19 September 2017 are to be set aside and, in their place, the appeal to the Federal Court is to be dismissed. In accordance with an undertaking given by the Comptroller-General at the time of the grant of special leave to appeal, there is to be no order as to costs. 67 cf Murphy v Farmer (1988) 165 CLR 19 at 29; [1988] HCA 31. 68 R v Adams (1935) 53 CLR 563 at 568; [1935] HCA 62. Nettle NETTLE J. I agree with Kiefel CJ, Bell, Gageler and Gordon JJ and wish to add only the following. As Gibbs A-CJ observed69 in Federal Commissioner of Taxation v Australia and New Zealand Banking Group Ltd ("ANZ"), the meaning that words are to bear depends on the context in which they appear. Thus, where s 264(1) of the Income Tax Assessment Act 1936 (Cth) gave the Commissioner of Taxation power to require a person to furnish the Commissioner with such information as the Commissioner specified and to produce all books, documents and other papers in the person's custody or under the person's control relating to the person's or any other person's income or assessment, it was apparent from the context that "control" was not limited to legal control but included physical control. As Gibbs A-CJ stated: "The section is not concerned with the legal relationship of the person to whom the notice is given to the documents which he is required to produce: it is concerned with the ability of the person to whom the notice is addressed to produce the documents when required to do so. β¦ [A] notice can be given under the section to any person who has physical control of the documents in question β¦ [but] 'control' in s 264(1) is not limited to physical control, and β¦ notice could be given to the master, who has legal control of the documents, as well as to the servant [who has physical control]." By contrast, in Goben Pty Ltd v Chief Executive Officer of Customs [No 2], where s 33 of the Business Franchise Licences (Tobacco) Act 1987 (NSW) provided that, if tobacco in excess of a specified quantity were found in a person's possession, custody or control, it should be presumed that the tobacco was possessed for sale and that the person was carrying on tobacco wholesaling, Davies J reasoned70 that, because the object of the section was to make possession of tobacco evidence of tobacco wholesaling, the denotation of "possession, custody or control" looked not to the proprietor of the warehouse where the goods were stored but rather to the person on whose behalf the goods were kept. In effect, ANZ and Goben represent the end points of the range of contexts which may inform the meaning of the expression "possession, custody or control" and its cognates. ANZ is representative of cases where the context is a statutory provision that has the object of obtaining production of something in a person's custody or control, and which therefore implies that custody or control extends to persons having de facto power of disposition over the thing which is sought to be produced. In contrast, Goben is representative of cases in which the 69 (1979) 143 CLR 499 at 519-520; [1979] HCA 67. 70 (1996) 68 FCR 301 at 307. Nettle context is a statutory provision that has the object of attributing an intent to sell to a person in possession, custody or control of specified goods and which therefore implies that "possession, custody or control" is limited to persons having legal power to sell those goods. This case is of the former kind. The evident object of s 35A(1) of the Customs Act 1901 (Cth) is the practical one of motivating persons with the ability de facto to keep dutiable goods safely, and to account therefor to the satisfaction of a Collector, to do just that, and to ensure that, if such persons fail to do so, a Collector may recover from them the duty for home consumption payable in respect of the goods71. The provision is thus concerned not so much with the legal relationship of those persons to the goods in their possession, custody or control as with the ability of those persons in fact to prevent those goods passing into home consumption without the payment of duty. It follows, on the facts of this case and for the reasons given by Kiefel CJ, Bell, Gageler and Gordon JJ, that s 35A(1) should be construed as applying to the respondent. 71 See and compare Collector of Customs (NSW) v Southern Shipping Co Ltd (1962) 107 CLR 279; [1962] HCA 20. |
HIGH COURT OF AUSTRALIA AND CONSUMER TRADER AND TENANCY TRIBUNAL & ANOR RESPONDENTS McNamara (McGrath) v Consumer Trader and Tenancy Tribunal [2005] HCA 55 29 September 2005 ORDER Appeal allowed with costs. Set aside the orders of the Court of Appeal of the Supreme Court of New South Wales made on 23 February 2004 and, in place thereof, order that: Leave to appeal to that Court be granted; The appeal is allowed with costs; and The orders of Dunford J are set aside and in their place order: Appeal allowed with costs; Set aside the decision of the Consumer Trader and Tenancy Tribunal dated 8 April 2002; (iii) Remit the matter to the Tribunal to be determined according to law. The above costs orders are made against the second respondent only. On appeal from the Supreme Court of New South Wales Representation: S C Churches with S D Ower for the appellant (instructed by Marrickville Legal Centre) No appearance for the first respondent M G Sexton SC, Solicitor-General for the State of New South Wales with J M Jagot for the second respondent (instructed by Crown Solicitor for New South Wales) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS McNamara (McGrath) v Consumer Trader and Tenancy Tribunal Landlord and Tenant β Applicability of the Landlord and Tenant (Amendment) Act 1948 (NSW) ("the LTA Act") β Appellant was a tenant of the Roads and Traffic Authority of New South Wales ("the RTA") in respect of certain premises ("the Premises") β The RTA sought from the Consumer Trader and Tenancy Tribunal an order for vacant possession of the Premises pursuant to the Residential Tenancies Act 1987 (NSW) ("the Tenancies Act") β Appellant argued that Premises were "prescribed premises" under the LTA Act and therefore exempt from the application of the Tenancies Act β Whether the RTA entitled to the benefit of an exemption from the application of the LTA Act for "the Crown in right ... of the State". Statutes β Construction β The RTA was constituted under the Transport Administration Act 1988 (NSW) ("the Transport Act") β Transport Act, s 46(2)(b) provides that the RTA "is, for the purposes of any Act, a statutory body representing the Crown" β Whether "a statutory body representing the Crown" entitled to the benefit of a statutory exemption in favour of "the Crown in right ... of the State". Words and phrases β "the Crown in right of the State", "statutory body representing the Crown". Landlord and Tenant (Amendment) Act 1948 (NSW), s 5. Transport Administration Act 1988 (NSW), s 46(2)(b). GLEESON CJ. I agree with the orders proposed by McHugh, Gummow and Heydon JJ, and with their reasons for those orders. Section 46(2)(b) of the Transport Administration Act 1988 (NSW) ("the 1988 Act"), provides that, for the purposes of any Act, the Roads and Traffic Authority of New South Wales ("the RTA") is a statutory body representing the Crown. Section 5 of the Landlord and Tenant (Amendment) Act 1948 (NSW) ("the LTA Act"), provides that the LTA Act does not bind the Crown in right of the State of New South Wales. The question is whether the combined effect of those two provisions is that the LTA Act does not bind the RTA. In Wynyard Investments Pty Ltd v Commissioner for Railways (NSW)1 this Court, by a narrow majority2, held that an identically worded provision in s 4(2) of the Transport (Division of Functions) Act 1932 (NSW) ("the 1932 Act"), in combination with the LTA Act, had the effect that the LTA Act did not bind the Commissioner for Railways. The competing views as to the meaning of s 4(2) were summarised in the dissenting judgment of Kitto J as follows3: "In the Supreme Court a majority of their Honours treated this provision as if it meant that, in considering the applicability of any provision of any Act to the commissioner, he shall be deemed to represent the Crown. If that were the true meaning, the result in this case would necessarily be that the immunity of the Crown from s 62 of the [LTA Act] would involve the immunity of the commissioner as a notional agent of the Crown in relation to the possession of the subject land. But the language of s 4(2) does not appear to me to bear this construction. It is, no doubt, more than a definition section, but its natural meaning would seem to be that whenever you find in an Act a provision dealing with statutory bodies described as representing the Crown, you are to deem the Commissioner for Railways to be such a body and apply the Act to him accordingly." There were, and still are, numerous provisions in Acts dealing with statutory bodies described as representing the Crown. In brief, Kitto J, with whom Fullagar J agreed, rejected the view that s 4(2) meant that any reference in any Act to the Crown included a reference to the Commissioner for Railways. (If the Commissioner were to be given all the privileges and immunities of the Crown, why would that be limited to those given by statute and not include those given by common law?) Rather, he considered it meant that, where a provision (1955) 93 CLR 376. 2 Williams, Webb and Taylor JJ; Fullagar and Kitto JJ dissenting. (1955) 93 CLR 376 at 400-401. in an Act referred to statutory bodies representing the Crown, then that reference would include the Commissioner for Railways. Section 46(2)(b) of the 1988 Act presents the same question of construction as arose in relation to s 4(2) of the 1932 Act, and this case presents the same problem of the interaction with the LTA Act as arose in Wynyard Investments. Even though, technically, the decision in Wynyard Investments concerned a different statute, and therefore does not govern the present case directly, nevertheless a preference for the reasoning of the minority in that case would not of itself justify a different conclusion in the present case. The point of construction is one on which different views are fairly open. Having regard to the subject matter, it may readily be inferred that the 1988 Act was drafted with an understanding of the judicial interpretation that had been placed upon the words of the 1932 Act. This Court would undermine its own authority if it departed from the effect of a previous decision on a question of statutory construction merely because of a later preference for another view4. There is, however, more to it than that. First, as both Kitto J and Fullagar J emphasised, the outcome in Wynyard Investments is difficult to reconcile with the earlier decision of this Court in Rural Bank of NSW v Hayes5. Secondly, the issue runs deeper than the interpretation to be placed upon a particular statutory formula. As Kitto J pointed out in Wynyard Investments6, the question that must be decided is whether the application to the subject (there, the Commissioner) who invokes the Crown's immunity (there, conferred by s 5 of the LTA Act) would be, in legal effect, an application of it to the Crown. It is not merely one of attributing to someone the status of a representative of the Crown. It concerns the relationship to the Crown in which the subject stands "in respect of the particular matter in which the impact of the relevant provisions is incurred". Thirdly, the correct approach to such a question is that stated by Gibbs CJ in 1982 in Townsville Hospitals Board v Townsville City Council7: cf Geelong Harbour Trust Commissioners v Gibbs Bright & Co (1974) 129 CLR (1951) 84 CLR 140. (1955) 93 CLR 376 at 394-395. (1982) 149 CLR 282 at 291. "All persons should prima facie be regarded as equal before the law, and no statutory body should be accorded special privileges and immunities unless it clearly appears that it was the intention of the legislature to confer them. It is not difficult for the legislature to provide in express terms that a corporation shall have the privileges and immunities of the Crown, and where it does not do so it should not readily be concluded that it had that intention." That was the approach that prevailed in this Court at the time of the enactment of the 1988 Act, and that has prevailed ever since. Fourthly, even if the minority view as to the meaning of s 4(2) of the 1932 Act had been accepted in Wynyard Investments, the statutory formula there employed would have had useful work to do, and would probably have been repeated in the 1988 Act. It is, therefore, far from clear that the New South Wales Parliament enacted s 46(2)(b) of the 1988 Act on the faith of the decision of this Court in Wynyard Investments. In argument in the present appeal, close attention was given to whether the New South Wales Parliament had so acted, but that was not shown to have been the case. In those circumstances, this Court should not be inhibited from giving effect to its own opinion on the issues of principle and of statutory construction that arise in the present case. McHugh 11 McHUGH, GUMMOW AND HEYDON JJ. The second respondent, the Roads and Traffic Authority of New South Wales ("the RTA"), is a statutory corporation constituted pursuant to s 46 of the Transport Administration Act 1988 (NSW) ("the Transport Act"). By operation of that statute8 there was transferred to the RTA all real and personal property previously vested in various statutory bodies ("the Commissioner"). This included the property situated at 67 Cromwell Street, Croydon Park, a suburb of Sydney ("the Premises"). These comprise a brick and tile bungalow constructed in the 1920s. the Commissioner of Main Roads including Mrs McNamara, the appellant, has resided at the Premises continually since 1981 and is tenant of the RTA. The litigation giving rise to this appeal stems from an attempt by the RTA to obtain vacant possession of the Premises. The appellant's husband and the Commissioner were parties to an initial tenancy agreement executed in 1981. The appellant resided with her husband at the Premises up to the time of his death in 1985 and she has since been in actual possession of the Premises. Moreover, in 1986, the appellant signed a further fixed term tenancy agreement with the Commissioner. Throughout the period covered by these events and subsequently, rent has been paid, first to the Commissioner, and then to the RTA. There has been no lease of the Premises registered under s 5A of the Landlord and Tenant (Amendment) Act 1948 (NSW) ("the LTA Act"). Nor has there been a fair rents determination made under that statute in relation to the Premises. The first respondent ("the Tribunal") was established by s 5(1) of the Consumer, Trader and Tenancy Tribunal Act 2001 (NSW) ("the Tribunal Act"). It is empowered by s 5(2) to "exercise such functions as are conferred or imposed on it by or under any Act". One such Act is the Residential Tenancies Act 1987 (NSW) ("the Tenancies Act"). This provides (s 64(1)) that, if a landlord gives notice of termination of a residential tenancy agreement under Pt 5 of that Act and the tenant fails to deliver up vacant possession of the relevant residential premises on the day specified, the landlord may, not later than 30 days after that day, apply to the Tribunal for an order terminating the agreement and an order for possession of the premises. The RTA has sought to utilise these provisions. The ultimate issue for this Court is whether the Tribunal has statutory competence to deal with the matter. The appellant denies that competence and her submissions should be accepted. 8 Sched 7, Item 24. McHugh We turn to explain why this is so, beginning with some further narration of the facts. On 5 October 2000, the RTA served on the appellant a 60-day termination notice in respect of the Premises and, on 27 December 2000, it filed with the Tribunal an "Application for an Order β Residential Tenancies Act 1987" seeking an order for vacant possession of the Premises. In proceedings before the Tribunal, the appellant submitted that the Premises were "prescribed premises" within the meaning of s 8(1) of the LTA Act9, and that therefore they attracted the application of Pts 2, 3, 4 and 5 of that statute. The Tenancies Act (s 6(2)(a)) exempts from the application of the statute "premises to which Parts 2, 3, 4 and 5 of [the LTA Act] apply". The appellant contended that as a result the Tribunal had no jurisdiction with respect to the application by the RTA for an order for vacant possession of the Premises. On 8 April 2002, the Tribunal determined that it did have jurisdiction. The Tribunal decided that the RTA had the benefit of the exemption provided for in s 5 of the LTA Act. That section reads: "This Act shall not bind β the Crown in right of the Commonwealth or of the State; or The Housing Commission of New South Wales." The result of this reasoning was that the appellant could not resist the RTA's application for vacant possession by relying upon the exemptions in the Tenancies Act for "prescribed premises" under the LTA Act. 9 The text of the relevant definition reads: "'prescribed premises' means β (a) where a dwelling-house does not form part of other premises β that dwelling-house; (b) where premises consist only of a number of dwelling-houses β those premises and each of those dwelling-houses; and (c) where premises consist partly of dwelling-houses and partly of other premises β such part of the premises as consists of dwelling-houses and each dwelling-house of which that part consists, and includes any land or appurtenances leased with any prescribed premises as defined in paragraph (a), (b) or (c) of this definition". McHugh The litigation The appellant filed a summons in the Supreme Court of New South Wales, seeking to appeal from the decision of the Tribunal with respect to a matter of law, pursuant to s 67 of the Tribunal Act. Dunford J dismissed the summons with costs and remitted the proceedings to the Tribunal for further hearing. In so deciding, his Honour referred to s 46(2)(b) of the Transport Act, which provides that the RTA "is, for the purposes of any Act, a statutory body representing the Crown". Dunford J held that the construction of this provision and its relationship with s 5 of the LTA Act were governed by what was said by a majority (Williams, Webb and Taylor JJ) in Wynyard Investments Pty Ltd v Commissioner for Railways (NSW)10. In that case the minority comprised Fullagar J and Kitto J. The principal reasons of the minority were given by The appellant sought leave to appeal to the Court of Appeal from Dunford J's decision. The Court of Appeal (Meagher JA and Young CJ in Eq) refused such leave, delivering brief ex tempore reasons and citing Wynyard Investments in support of its conclusions. It is from that decision that, by special leave, the appellant brings her appeal to this Court. In accordance with the in R v Australian Broadcasting Tribunal; Ex parte principle repeated Hardiman11, the Tribunal, the first respondent, did not take an active part in this appeal. The active disputant has been the RTA. The question in this appeal The question in this appeal is one concerned principally with the application of a statutory exemption. Less apparent, however, is the precise formulation of the question thus identified. Several points should be made in that regard. First, this Court is not invited to determine whether the RTA constitutes, for the purposes of s 5 of the LTA Act, "the Crown in right β¦ of the State". Secondly, the Court is not asked to consider whether the RTA is entitled to claim, in the words of Jordan CJ in another context, "the benefit of the Crown's prerogative privileges and immunities, including that of not being bound by statute unless an intention in that behalf appears"12. This last question could 10 (1955) 93 CLR 376. 11 (1980) 144 CLR 13 at 35-36. 12 Skinner v Commissioner for Railways (1937) 37 SR (NSW) 261 at 269. McHugh only have arisen in these proceedings if the RTA had sought to escape the reach of the LTA Act by establishing the following two propositions: one is that it is entitled to claim for itself the benefit of the presumption, identified in Bropho v Western Australia13 as a rule of statutory construction, that the Crown is not bound by a general statutory provision; and the other is that there is nothing in the LTA Act either to displace that presumption or to suggest a legislative intention to bind the RTA. Given the express terms of s 5 of the LTA Act, the RTA chose to take what promised to be a less circuitous route towards its desired destination. Thirdly, in Bass v Permanent Trustee Co Ltd14, six members of this Court remarked upon the inapt use in modern conditions of expressions such as "shield of the Crown" and "binding the Crown". The various senses in which the expression "the Crown" has been used in constitutional theory were discussed in Sue v Hill15. In s 5(a) of the LTA Act "the Crown in right ... of the State" identifies what was described in Sue v Hill as "the executive as distinct from the legislative branch of government [in this case, in New South Wales], represented by the Ministry and the administrative bureaucracy which attends to its business"16. For present purposes, to ask whether the RTA forms part of that bureaucracy is apt to mislead, because that question conceals the issue in this appeal. That issue, in broad terms and to adapt the language employed by Kitto J in Wynyard Investments17, is whether "the application of [the LTA Act] to [the RTA] would be, in legal effect, an application of it to the Crown". If so, then the RTA may invoke the immunity granted in terms by s 5 of the LTA Act to "the Crown in right ... of the State". It should be noted that such a conclusion would not depend upon the RTA establishing an identity between itself and the Crown. 13 (1990) 171 CLR 1. 14 (1999) 198 CLR 334 at 347 [17]. See also Commonwealth v Western Australia (1999) 196 CLR 392 at 409-411 [31]-[39], 429-432 [105]-[110]. 15 (1999) 199 CLR 462 at 497-503 [83]-[94]. 16 (1999) 199 CLR 462 at 499 [87]. See to similar effect the statement by Gleeson CJ and Gaudron J in Commonwealth v Western Australia (1999) 196 CLR 392 at 410 17 (1955) 93 CLR 376 at 394. McHugh Nor, as Kitto J also pointed out, would such a conclusion be arrived at by asking, glibly, whether the RTA "represents" the Crown18. Rather, a successful invocation of the s 5 immunity by the RTA must have as its basis a finding to the effect that the operation of the LTA Act upon it would result, again in Kitto J's words, in "some impairment of the existing legal situation of the Sovereign"19. The mode of reasoning thus outlined was adopted by this Court in NT Power Generation Pty Ltd v Power and Water Authority20 and the appellant stressed the importance of that case in considering the present authority of the reasoning of the majority in Wynyard Investments. Extending a statutory immunity of the Crown Wynyard Investments was decided in 1955. Consideration of the present appeal conveniently commences by focusing upon the decision of this Court in 1982 in Townsville Hospitals Board v Townsville City Council21. That case preceded the enactment of the Transport Act which established the RTA. At issue in Townsville was whether the Board was bound by the provisions of a by-law which required, before the erection of a building, that plans and specifications for that building, as well as a written application for approval, be submitted to the relevant local authority. The Board sought to rely, in support of its position, upon a limited exemption from these requirements that was engaged, pursuant to s 4 of the Building Act 1975 (Q), where a building was to be erected "by or on behalf of a person or body who represents the Crown in right of the State" (emphasis added). Murphy, Wilson and Brennan JJ agreed with the judgment of Gibbs CJ. His Honour said22: "All persons should prima facie be regarded as equal before the law, and no statutory body should be accorded special privileges and immunities unless it clearly appears that it was the intention of the legislature to 18 (1955) 93 CLR 376 at 394. 19 (1955) 93 CLR 376 at 393. See also NT Power Generation Pty Ltd v Power and Water Authority (2004) 79 ALJR 1 at 34-35 [166]-[170]; 210 ALR 312 at 357-359. 20 (2004) 79 ALJR 1 at 34-35 [166]-[170]; 210 ALR 312 at 357-359. 21 (1982) 149 CLR 282. 22 (1982) 149 CLR 282 at 291. McHugh confer them. It is not difficult for the legislature to provide in express terms that a corporation shall have the privileges and immunities of the Crown, and where it does not do so it should not readily be concluded that it had that intention." This reasoning sets at a high level the threshold degree of control exercisable by the Crown over the appellant Board at and above which it might be said that the operation of the by-law upon the Board would impair the existing legal situation of the Crown in right of the State of Queensland. "Control" is used here in the sense apparent from a statement of Lord Reid23, namely of control and direction of activities. The relevance of what was said by Gibbs CJ in Townsville to assessing the significance of the supposition that the framers of s 46(2)(b) of the Transport Act have relied upon the earlier majority judgment in Wynyard Investments will be discussed later in these reasons. More immediately, the statement of principle by Gibbs CJ in Townsville invites consideration of whether the ambit of the immunity afforded to the Crown in right of New South Wales in s 5(a) of the LTA Act is confined by the presence in that section of par (b). This, it will be recalled, identifies, as an alternative to par (a), The Housing Commission of New South Wales. Had the legislature intended to extend that immunity to such statutory bodies as the RTA, it would have been unnecessary to include the explicit reference in par (b) to the Housing Commission, a statutory corporation constituted pursuant to the Housing Act 1941 (NSW). This is especially so, given the principal holding in North Sydney Municipal Council v Housing Commission of New South Wales24. The New South Wales Full Court there held that the Housing Commission was in such a position vis-Γ -vis the Crown that it was entitled to rely upon the presumption that a general statute does not bind the Crown25. However, thereafter, in Electricity Commission of New South Wales v Australian United Press Ltd, Street CJ 23 Bank voor Handel en Scheepvaart NV v Administrator of Hungarian Property [1954] AC 584 at 616. 24 (1948) 48 SR (NSW) 281 at 284. 25 The statute stated that the Commission, in the exercise of its powers, authorities, duties and functions, was "subject to the control and direction of the Minister". 26 (1954) 55 SR (NSW) 118 at 123. See also the judgment of Brereton J at 128-129. McHugh "even if it may have been unnecessary to make express reference to the Housing Commission in order to exclude that body from the operation of [the LTA Act], I think that the specific mention of the Commission is more likely to be due to a superabundance of caution on the part of the legislature rather than to any indication of a legislative intent as to the meaning of the word 'Crown'". Against the reasoning of Street CJ may be set an observation by Dixon J in Grain Elevators Board (Vict) v Dunmunkle Corporation27. His Honour remarked that, had land owed by statutory bodies enjoying the privileges and immunities of the Crown been intended to come within the exemption from rates for "land the property of His Majesty"28, there would have been no need also to provide explicitly for similar exemptions in respect of "land vested in, among other bodies, the Victorian Railways Commissioners, the Minister for Public Instruction and the Board of Land and Works"29. Of course, it is necessary to note too that Dixon J was there remarking upon a statutory provision that purported to confer an exemption upon the property of the Crown, rather than upon the Crown itself. The question that Dixon J was answering in Grain Elevators thus differed markedly from that which arises in this appeal30. However, given that the RTA sought to place itself within the immunity conferred upon the Crown in s 5 of the LTA Act solely by means of s 46(2)(b) of the Transport Act, it is unnecessary presently to determine the significance of s 5(b). Nor, for the same reason and despite the circumstance that the Chief Executive Officer of the RTA is "in the exercise of his or her functions, subject to the control and direction of the Minister"31, is it necessary to consider whether 27 (1946) 73 CLR 70. 28 As provided for in s 249(1) of the Local Government Act 1928 (Vic). 29 (1946) 73 CLR 70 at 84. 30 See (1946) 73 CLR 70 at 84: "The parties seemed inclined to argue the case as if the question was whether the [Grain Elevators] Board was an agency of the Crown enjoying the Crown's privileges and immunities and as if the consequence of an affirmative answer to that question would be that the land rated, though vested in point of property in the [Grain Elevators] Board, would enjoy the exemption conferred upon land the property of His Majesty. I cannot agree in the adoption of any such test." 31 Transport Act, s 49. McHugh the operation of the LTA Act upon the RTA would actually entail "an interference with some right, interest, power, authority, privilege, immunity or purpose belonging or appertaining to the Crown"32. Nevertheless, the test so expressed by Kitto J in Wynyard Investments and the contrast between it and what was said in earlier authorities are relevant to the construction of s 46(2)(b) of the Transport Act. To those issues we now turn. A "statutory body representing the Crown" As appears from the majority judgment in Wynyard Investments33, the genesis of the expression, "statutory body representing the Crown", at least as an adornment in the statute book of New South Wales, may be found in s 4 of the Local Government Act 1919 (NSW) ("the 1919 Act"). That section originally provided in the following terms: "'Statutory body,' or 'statutory body representing the Crown,' includes the Board of Water Supply and Sewerage, the Hunter District Water Supply and Sewerage Board, the Sydney Harbour Trust Commissioners, the Board of Fire Commissioners of New South Wales, the Railway Commissioners for New South Wales, the Metropolitan Meat Industry Board, and any public body proclaimed under this Act as a statutory body representing the Crown." There was thus no content given to the defined expression beyond the names of the public bodies either listed as falling within its scope or subsequently proclaimed as such. The expression was not employed, for example, as a shorthand signifier for those bodies which were entitled to receive the benefit of the prerogative privileges and immunities of the Crown. To the extent that those bodies identified in the definition were to benefit from the privileges and immunities conferred upon the Crown by the 1919 Act34, this was achieved by another device. This was to define the term "Crown" in the 1919 Act so as to include any "statutory body representing the Crown"35. 32 Wynyard Investments Pty Ltd v Commissioner for Railways (NSW) (1955) 93 CLR 33 (1955) 93 CLR 376 at 386. 34 An example is afforded in s 132, which exempted certain lands vested in the Crown from local government rates. 35 Local Government Act 1919 (NSW), s 4. McHugh Thereafter, in numerous pieces of New South Wales legislation, the expression "statutory body representing the Crown" was defined by reference to the definition given to it in the 1919 Act and the term "Crown" likewise defined to include any such statutory body36. However, this cannot be said of the LTA Act, in which the word "Crown" is not defined and, more importantly, the phrase "statutory body representing the Crown" does not appear. It is true that that expression "representing the Crown" and like terms have long appeared in judgments as a convenient means of denoting either the entitlement of a statutory body to the privileges and immunities enjoyed by the Crown or the status of such a body as an agent of the Sovereign. In Sydney Harbour Trust Commissioners v Wailes37, for example, O'Connor J spoke of a transfer of property "from one corporation, representing the Crown in one function of Government, to another corporation representing the Crown in carrying on another function of Government". Jordan CJ in Skinner v Commissioner for Railways38 distinguished between, on the one hand, a body that "represents the Crown" β which his Honour defined to mean either a "branch or department of the Government" or a "body which, though independent of the Government, performs functions which are inalienable Governmental functions" β and on the other, a "body independent of the Government with independent powers and discretions of its own"39. The issue in Skinner was whether the Commissioner for Railways enjoyed the Crown's immunity from discovery. The Crown in right of the State had been deprived of that immunity by statute40 and it was held that the Commissioner could not be in a better position. 36 See Metropolitan Water, Sewerage, and Drainage Act 1924 (NSW), s 4; Sydney Corporation Act 1932 (NSW), s 2; Hunter District Water, Sewerage and Drainage Act 1938 (NSW), s 3; Broken Hill Water and Sewerage Act 1938 (NSW), s 3. See also Barnett, "Statutory Corporations and 'The Crown'", (2005) 28 University of New South Wales Law Journal 186 at 206-207. 37 (1908) 5 CLR 879 at 885. 38 (1937) 37 SR (NSW) 261. 39 (1937) 37 SR (NSW) 261 at 269-270. 40 Common Law Procedure Act 1899 (NSW), s 102. McHugh The distinction which Jordan CJ drew in Skinner assumed that the question of whether the privileges and immunities of the Crown may extend to a given statutory body could be fully stated by asking whether that body "represents" the Crown. However, for the reasons given by Kitto J in his dissenting judgment in Wynyard Investments41 and accepted by McHugh and Gummow JJ in State Authorities Superannuation Board v Commissioner of State Taxation (WA)42, that assumption cannot hold true. Rather, "[t]he question", as "is really not one of attributing to the subject the status of a representative of the Crown; for, even where 'representative' is an apt word to use, representation of the Crown generally is not what such a contention must be understood as necessarily asserting. The question concerns only the relationship to the Crown in which the individual stands in respect of the particular matter in which the impact of the relevant provisions is incurred." However, the majority in Wynyard Investments (Williams, Webb and Taylor JJ) acted on the assumptions which underpinned the position advanced by Jordan CJ in Skinner. Wynyard Investments, like the present case, was concerned with the availability to a statutory corporation β the Commissioner for Railways (NSW) β of the immunity provided for in s 5 of the LTA Act. In invoking that immunity, the Commissioner sought to rely upon s 4(2) of the Transport (Division of Functions) Act 1932 (NSW) ("the Division of Functions Act"). This provided that "for the purposes of any Act the Commissioner for Railways shall be deemed a statutory body representing the Crown" (emphasis added). Williams, Webb and Taylor JJ framed as follows the issue that arose for consideration44: "The question at issue is a very familiar one. It arises with ever increasing regularity as Governments persistently enlarge the scope of their activities beyond those of a truly governmental character into the sphere of trade and commerce and for that purpose create statutory corporations which are not slow to claim that they are agents or servants 41 (1955) 93 CLR 376 at 394-395. 42 (1996) 189 CLR 253 at 280. 43 (1955) 93 CLR 376 at 394-395. 44 (1955) 93 CLR 376 at 382. McHugh of the Crown (these being the proper words of description45) and as such entitled to the benefit of the prerogatives, privileges and immunities of the Crown." Their Honours then said, in a passage which contains the core of their reasoning46: "The only way a statutory body could represent the Crown would be to act as the agent or servant of the Crown and this must be the meaning of the word 'represent' in [s 4(2) of the Division of Functions Act]. The representation is 'for the purpose of any Act', so that for the purpose of any Act the Commissioner for Railways must be deemed to represent the Crown." It was held, on the basis of this asserted congruence between identification as representative of the Crown and entitlement to its privileges and immunities, that the Commissioner for Railways was not bound by the LTA Act. In sharp contrast, Kitto J (with whom Fullagar J agreed) concluded that s 4(2) of the Division of Functions Act was more than a definition section. Rather, its natural meaning was that47: "whenever you find in an Act a provision dealing with statutory bodies described as representing the Crown, you are to deem the Commissioner for Railways to be such a body and apply the Act to him accordingly". It should be added that the meaning given here to "deem" is an example of what Windeyer J later identified48 as "the effect or meaning which some matter or thing has" and without importing any "artificiality or fiction". The significance of the limitation "for the purpose of any Act" is a matter to which we will return. During the course of oral argument in this appeal, there was some debate as to whether, in order for the appellant to prevail, it was required that Wynyard Investments be overruled. However, this is a false issue. Wynyard Investments decided that a particular form of words in s 4(2) of the Division of Functions Act 45 International Railway Co v Niagara Parks Commission [1941] AC 328 at 343. 46 (1955) 93 CLR 376 at 388. 47 (1955) 93 CLR 376 at 401. 48 Hunter Douglas Australia Pty Ltd v Perma Blinds (1970) 122 CLR 49 at 65. McHugh had a particular meaning: it is not authority that the reasoning process that commended itself to the majority when construing s 4(2) must dictate the construction of other legislation. It would be an error to treat what was said in construing one statute as necessarily controlling the construction of another; the judicial task in statutory construction differs from that in distilling the common law from past decisions49. It should be noted that what was at stake in John v Federal Commissioner of Taxation50 was the application of s 51, the same section of the Income Tax Assessment Act 1936 (Cth), to facts "relevantly indistinguishable"51 from those of Curran v Federal Commissioner of Taxation52. The relationship between this case and Wynyard Investments is not of that character. What was said in John respecting the criteria for the overruling of previous decisions53 is not immediately applicable. However, that does not mean that the Court is now at liberty to ignore the reasoning of the majority in Wynyard Investments and, as Gibbs J once put it54, "to arrive at [its] own judgment as though the pages of the law reports were the fundamental (and constitutional) blank". responsibility of the Court not to allow the perpetuation of previous error in Nevertheless, it remains The present issue is best posed by asking whether the earlier majority reasoning should be adopted in construing s 46(2)(b) of the Transport Act, or that of Kitto J preferred, and recognising that this requires the most careful consideration. In Wynyard Investments, Kitto J proposed, and a majority of this 49 See Ogden Industries Pty Ltd v Lucas [1970] AC 113 at 127; Brennan v Comcare (1994) 50 FCR 555 at 572. 50 (1989) 166 CLR 417. 51 (1989) 166 CLR 417 at 435. 52 (1974) 131 CLR 409. 53 (1989) 166 CLR 417 at 438-439. 54 Queensland v The Commonwealth (1977) 139 CLR 585 at 599. 55 Babaniaris v Lutony Fashions Pty Ltd (1987) 163 CLR 1 at 13; John v Federal Commissioner of Taxation (1989) 166 CLR 417 at 439-440; Brennan v Comcare (1994) 50 FCR 555 at 572-575. McHugh Court accepted in NT Power Generation, that asking whether a statutory body is representative of the Crown does not correspond to asking whether it is entitled to the privileges and immunities of the Sovereign. The cogency of this should not be gainsaid. There then seems little reason to accept that a statutory provision stating that such a body is so representative should be sufficient to render available to it a statutory immunity expressed to be conferred upon the Crown. immunity enjoyed by This conclusion finds reinforcement in the circumstance that a body may be deemed to be a "statutory body representing the Crown" for a purpose other than direct engagement of some statutory the instrumentalities of the executive government. Such a purpose may be to identify by some convenient label a class of statutory bodies, upon which (as was the case with the 1919 Act) an immunity or privilege of the Crown is then conferred by some other drafting device, or which (as is the case in s 5(1) of the Crown Proceedings Act 1988 (NSW)56) are intended to be treated differently from other entities defined as being "the Crown". These considerations would suggest that there is no automatic congruence between the phrase, "representing the Crown", and entitlement to its privileges and immunities. Moreover, these considerations afford some recognition to the use of the plural "purposes" in the phrase by which s 46(2)(b) of the Transport Act is prefaced. "For the purposes of any Act" This phrase confines the deeming effect of s 46(2)(b) to statutes of New South Wales57. If the reasoning advanced by Williams, Webb and Taylor JJ in Wynyard Investments were to be adopted in disposing of this appeal, the RTA would receive the benefit of the full panoply of the privileges and immunities enjoyed pursuant to statute by the Crown in right of New South Wales. But this 56 The term "Crown" is defined in s 3 of the Crown Proceedings Act 1988 (NSW) as including "a statutory corporation, or other body, representing the Crown in right of New South Wales", but s 5(1) provides: "Any person, having or deeming himself, herself or itself to have any just claim or demand whatever against the Crown (not being a claim or demand against a statutory corporation representing the Crown) may bring civil proceedings against the Crown under the title 'State of New South Wales' in any competent court." 57 Interpretation Act 1987 (NSW), s 65. McHugh would not, for example, extend to those prerogative immunities in litigation58 which have not been displaced by statute. The majority in Wynyard Investments sought to explain this anomaly by attributing it to the circumstance that59: "the duties, powers and functions of the commissioner are derived so largely from statutes. Common law rights and obligations must often arise during their exercise but the Crown in New South Wales can be sued both in contract and in tort, and the commissioner would receive little benefit from any wider protection." However, that, with respect, is unconvincing. As previously discussed in these reasons, where the legislature creates by statute an immunity in the Crown, the criterion which it may be taken to have intended as determinative of whether and to what extent that immunity might cover entities other than the Crown is the possibility of impairment to the Crown's existing legal situation. The legislature may be taken to have intended that the precise nature of the duties, powers and functions of a statutory body should, in large part, determine whether that body may successfully invoke a statutory immunity enjoyed by the Crown. However, to accept in this appeal what was said by the majority in Wynyard Investments would be to suggest that, in the eyes of the New South Wales Parliament, the primary factor in determining the range of the Crown's statutory immunities susceptible to enjoyment by the RTA is the statutory origins of its duties, powers and functions, and not their nature or their impact upon the executive government. It is difficult to see why this should be so. There is a further, and more emphatic, reason for rejecting the reasoning adopted by the majority in Wynyard Investments. If, as their Honours accepted, there is a congruence between "representing the Crown" and entitlement to its privileges and immunities, then the phrase "for the purposes of any Act" in s 46(2)(b) of the Transport Act must mean "for the purpose of determining whether the RTA may invoke an immunity or privilege conferred upon the Crown by any Act". This would be a distortion of its natural meaning. When seen in this light, it becomes apparent that their Honours' concern at the prospect 58 A convenient list is to be found in Selway, The Constitution of South Australia, 59 (1955) 93 CLR 376 at 387. McHugh that Kitto J's reasoning would add unnecessary words to that phrase60 was misplaced. The significance of Wynyard Investments the holding It has already been suggested in these reasons that, for the appellant to succeed, in Wynyard Investments need not be overruled. Nonetheless, it is appropriate to address the significance of the circumstance that the decision in Wynyard Investments may have formed part of the context in which s 46(2)(b) of the Transport Act was drafted. To that end, more must said about the observations of Gibbs CJ, speaking for the Court, in Townsville. It will be recalled that the Court was there concerned with a statutory provision which contained language not dissimilar from that in s 46(2)(b) of the Transport Act. In determining whether the appellant Board fell within the terms of that language, specifically the expression "a person or body who represents the Crown in right of the State", Gibbs CJ remarked upon the reluctance of courts, in the absence of a clear indication of legislative intent, to extend the immunities and privileges of the Crown to statutory corporations61. His Honour also cited the judgment of Kitto J in Wynyard Investments as authoritative support for the proposition that it "is possible that the Board might be given the immunities and privileges of the Crown for one purpose and not for another"62. More importantly, Gibbs CJ rejected the notion of a perfect congruence between "representing the Crown" and being entitled to its privileges and immunities63: "Although the word 'represent' is not infrequently used in this context, it would be more precise to say that the question is whether the Board, in erecting the building, enjoys the privileges and immunities of the Crown." Thus the assumptions in the reasoning of the majority in Wynyard Investments were not accepted in Townsville. Nor, it should be emphasised, did the Court in Townsville treat the reasoning in Wynyard Investments as foreclosing or controlling the construction of later legislation. These circumstances also 60 (1955) 93 CLR 376 at 386. 61 (1982) 149 CLR 282 at 291. 62 (1982) 149 CLR 282 at 288. 63 (1982) 149 CLR 282 at 288. McHugh form part of the context in which s 46(2)(b) of the Transport Act is to be understood. That context, at the least, showed that the phrase, "statutory body representing the Crown", could act as a shorthand signifier for a statutory body entitled to the immunities and privileges enjoyed by the Crown. That this could be so, and was so understood, is shown by s 308(6) of the Duties Act 1997 (NSW) ("the Duties Act"). This provides: "For avoidance of doubt, in this section, the Crown includes any statutory body representing the Crown." (emphasis added) When seen in the light of this provision, the reasoning in Wynyard Investments cannot have assumed talismanic significance for the framing of later New South Wales legislation. Some consideration should also be given to the circumstance that the phrase "statutory body representing the Crown" is frequently employed in other New South Wales legislation as a reference point for identifying entities or individuals upon which powers, functions or privileges are conferred and duties imposed. For instance, s 4 of the Confiscation of Proceeds of Crime Act 1989 (NSW) defines the term "State authority" as follows: "a Minister of the Crown, a statutory body representing the Crown, a member of the Police Force or a person or body prescribed by the regulations for the purposes of this definition or of a class or description so prescribed". And s 4 of the Criminal Records Act 1991 (NSW) provides64: "public authority means a public or local authority constituted by or under any Act, a government department or a statutory body representing the Crown, and includes a person exercising functions on behalf of the authority, department or body". Similarly, the term "public officer" is defined in s 3 of the Criminal Procedure Act 1986 (NSW) as including "an officer or employee of a statutory body representing the Crown", and this is replicated in the definition of "law 64 A definition in identical terms appeared in s 57 of the District Court Act 1973 (NSW) and a similar, though more expansive and detailed, one appears in s 4 of the Environmental Planning and Assessment Act 1979 (NSW). McHugh enforcement officer" in s 3 of the Fines Act 1996 (NSW). In none of these statutes is the expression "statutory body representing the Crown" defined. These examples from the New South Wales statute book direct attention to a significant matter. This is that if, as the majority in Wynyard Investments asserted, a "statutory body representing the Crown" is neither more nor less than an agent or a servant of the Crown and as such entitled to its privileges and immunities, then an unacceptable level of uncertainty would be allowed to colour the identification of who or what is, for the purposes of a vast range of legislation in New South Wales, a "State authority" or a "public authority" or a "public officer" or a "law enforcement officer". This is because the decision whether a statutory corporation is entitled to the privileges and immunities of the Crown requires, in the absence of a provision such as s 46(2)(b) of the Transport Act, close attention to the functions of that body and the degree of control exercisable over it by the executive government. The New South Wales Parliament should not be taken to have designed such a result, and therefore, by extension, to have placed great reliance upon the reasoning in Wynyard Investments. This and the frequency with which the phrase "statutory body representing the Crown" appears in New South Wales legislation65 would suggest that that phrase is but a verbal formula employed for a multitude of purposes and given content by such provisions as s 46(2)(b) of the Transport Act. Particular reference has been made to an important revenue law, the Duties Act, and something more should be said respecting s 163ZU of that statute. This sets down as a criterion for the registration of a wholesale unit trust scheme a requirement that not less than 80 per cent of the units in the unit trust scheme be held by, among others, "the Crown in right of the Commonwealth, a State or a Territory (including any statutory body representing the Crown in right of the Commonwealth, a State or a Territory)". This may be taken prima facie as indicating that the expression "statutory body representing the Crown" is more than a verbal formula. Especially is this so if the Commonwealth statute book contains no provision in terms similar to s 46(2)(b) of the Transport Act, suggesting that the expression must derive its content from a source other than such a provision. However, in reading s 163ZU, one cannot separate the phrase "statutory body representing the Crown" from the words that follow it. The expression "any statutory body representing the Crown in right of the 65 The phrase appears in some 138 statutes currently in force in New South Wales. The cognate expression "statutory corporation, or other body, representing the Crown" appears in the Co-operative Schemes (Administrative Actions) Act 2001 (NSW), s 13; the Corporations (Administrative Actions) Act 2001 (NSW), s 10; the Crown Proceedings Act 1988 (NSW), s 3; the Luna Park Site Act 1990 (NSW), s 9. McHugh Commonwealth, a State or a Territory" thus refers to a concept quite different from that denoted by the contrasting expression "statutory body representing the Crown". Whereas the latter is a mere verbal formula, the former, by referring to the various polities within the Australian federal system, may serve as a shorthand signifier for those statutory bodies that are entitled to the immunities and privileges of the executive government in those polities. Inconvenience or detriment Finally, during oral argument the question was raised whether departure from the majority's reasoning in Wynyard Investments would be cause for inconvenience, either to the RTA or the Crown, for example, in relation to local government rates. However, this factor does not supply a convincing basis upon which to resist what has already been said in these reasons. If the appeal were allowed, this would establish that the RTA was bound by the LTA Act and required to comply with the provisions therein dealing with the recovery of possession of prescribed premises (ss 62-87B). But, in relation to the example given, the term "Crown" is defined in the dictionary appended to the Local Government Act 1993 (NSW) ("the 1993 Act") as including "any statutory body representing the Crown". The RTA would therefore, by reason of this and s 46(2)(b) of the Transport Act, retain the benefit of those privileges conferred upon the Crown by the 1993 Act, including the exemption from rates for "land owned by the Crown, not being land held under a lease for private purposes"66. The device of so defining the expression "the Crown" to include any "statutory body representing the Crown" may be found in several New South Wales statutes, reference to some of which has already been made67. So, too, the device of providing explicitly that a particular immunity or privilege should be enjoyed both by the Crown and by a "statutory body representing the Crown"68. 66 The 1993 Act, s 555(1)(a). 67 See also the Land Tax Management Act 1956 (NSW), s 3(1); the Building and Construction Industry Long Service Payments Act 1986 (NSW), s 38(1); the Luna Park Site Act 1990 (NSW), s 9(3); the Dividing Fences Act 1991 (NSW), s 25(3); the Duties Act, ss 259(1), 308(6); the Co-Operative Schemes (Administrative Actions) Act 2001 (NSW), s 13(3); the Corporations (Administrative Actions) Act 2001 (NSW), s 10(3). 68 See the Moratorium Act 1932 (NSW), s 4(1); the Printing and Newspapers Act 1973 (NSW), s 3(4); the Strata Schemes (Freehold Development) Act 1973 (NSW), ss 8(2), 8A(3); the Strata Schemes (Leasehold Development) Act 1986 (NSW), (Footnote continues on next page) McHugh There is also in New South Wales a multitude of statutes which extend some immunity or privilege to the Crown without also providing explicitly for statutory bodies representing the Crown69. This suggests the exercise of legislative choice, rather than oversight, to limit the extent to which statutory bodies may be entitled to the benefit of the immunities or privileges of the executive government. Any inconvenience which might be suffered by the RTA as a consequence of the construction of the legislation accepted in these reasons for judgment should not be a cause for alarm. Furthermore, to allow this appeal would not cause inconvenience or detriment to the State, identified as the Crown in right of New South Wales. The State would retain the benefit of the presumption that it is not bound by statutes of general application. And to deny the RTA the benefit of s 5 of the LTA Act is not to foreclose a contention elsewhere that the RTA too should be able to benefit from that presumption on the grounds that the application of a given statute to its operations would, in legal effect, be an application of the statute to the Crown. In short, the principles articulated by Kitto J in Wynyard Investments, which protect the Crown from impairment to its existing legal situation, are not dependent upon an acceptance of the reasoning of the majority ss 7(2A), 10(3); the Tow Truck Industry Act 1998 (NSW), s 6(1); the Rail Safety Act 2002 (NSW), s 104(3). 69 See the Conveyancing Act 1919 (NSW), ss 129(6), 157(2), 178; the Limitation Act 1969 (NSW), s 10; the Dangerous Goods Act 1975 (NSW), s 41(3); the Environmental Planning and Assessment Act 1979 (NSW), ss 109M, 109N; the Land and Environment Court Act 1979 (NSW), s 64(1); the Perpetuities Act 1984 (NSW), s 5(2); the Biological Control Act 1985 (NSW), s 6(2); the Insurance (Application of Laws) Act 1986 (NSW), s 4(2); the Confiscation of Proceeds of Crime Act 1989 (NSW), s 11(2); the Crown Lands Act 1989 (NSW), s 170; the Trade Measurement Act 1989 (NSW), s 5(2); the Grain Marketing Act 1991 (NSW), s 98; the Roads Act 1993 (NSW), s 8; the Sydney Water Act 1994 (NSW), Sched 2; the Agricultural Livestock (Disease Control Funding) Act 1998 (NSW), s 31(2); the Road Transport (Driver Licensing) Act 1998 (NSW), s 6(2); the Financial Sector Reform (New South Wales) Act 1999 (NSW), s 4(2); the Price Exploitation Code (New South Wales) Act 1999 (NSW), s 16(1), (2); the Fitness Services (Pre-paid Fees) Act 2000 (NSW), s 7(2); the Water Management Act 2000 (NSW), s 312; the Coal Industry Act 2001 (NSW), s 52; the Game and Feral Animal Control Act 2002 (NSW), s 53; the Institute of Teachers Act 2004 (NSW), McHugh in that case. The construction of s 5 of the LTA Act and of s 46(2)(b) of the Transport Act urged upon this Court by the appellant should be accepted and the appeal allowed. Orders The appeal should be allowed with costs. The order of the Court of Appeal should be set aside and in place thereof, leave to appeal to that Court should be granted, the appeal allowed with costs and the orders of Dunford J set aside. In place of the orders of Dunford J, the appeal to the Supreme Court should be allowed with costs, the decision of the Tribunal dated 8 April 2002 set aside and the matter be remitted to the Tribunal to be determined according to law. All the above costs orders should be made against the RTA, not the Tribunal. Hayne HAYNE J. I agree with McHugh, Gummow and Heydon JJ. In Wynyard Investments Pty Ltd v Commissioner for Railways (NSW)70 the Court held, by majority, that the Commissioner for Railways was the Crown in right of the State of New South Wales within the meaning of s 5(a) of the Landlord and Tenant (Amendment) Act 1948 (NSW). The majority (Williams, Webb and Taylor JJ) considered71 that this conclusion followed from the provision in s 4(2) of the Transport (Division of Functions) Act 1932 (NSW) ("the Division of Functions Act") that "for the purposes of any Act" the Commissioner "shall be deemed to be a statutory body representing the Crown". As the dissenting reasons of Kitto J reveal, however, this conclusion about the construction of s 4(2) of the Division of Functions Act was not inevitable. The present appeal concerns s 46(2)(b) of the Transport Administration Act 1988 (NSW). It provides that the second respondent, the Roads and Traffic Authority ("the Authority") is, for the purposes of any Act, a statutory body representing the Crown. This verbal formula is not materially different from the expression used in s 4(2) of the Division of Functions Act and considered in Wynyard. If the expression in Wynyard was construed as requiring the application of s 5(b) of the Landlord and Tenant (Amendment) Act to the Commissioner for Railways, the statutory body then in question, why does s 5(b) not apply to the Authority? Does not using the same verbal formula in s 46(2)(b) of the Transport Administration Act as was used in s 4(2) of the Division of Functions Act require the same conclusion about the Landlord and Tenant (Amendment) Act as was reached in Wynyard? The arguments in favour of that conclusion would be powerful if, in the years between the decision in Wynyard and the enactment of the Transport Administration Act, there had been no development of the law relating to the privileges and immunities of the Crown. Those developments, in response to what was subsequently described72 as the reach of "the activities of the executive industrial and into almost all aspects of commercial, government β¦ developmental endeavour", included the recognition, in Townsville Hospitals Board v Townsville City Council73, of three propositions of particular relevance. 70 (1955) 93 CLR 376. 71 (1955) 93 CLR 376 at 385. 72 Bropho v Western Australia (1990) 171 CLR 1 at 19. 73 (1982) 149 CLR 282. Hayne First74, "[i]t is not difficult for the legislature to provide in express terms that a corporation shall have the privileges and immunities of the Crown, and where it does not do so it should not readily be concluded that it had that intention." Secondly, as had been pointed out by Kitto J in Wynyard75, and was noted in Townsville Hospitals Board76, a statutory body might be given the privileges and immunities of the Crown for one purpose and not another. Thirdly77, "[a]lthough the word 'represent' is not infrequently used in this context, it would be more precise to say that the question is whether [the body concerned, in performing a particular function,] enjoys the privileges and immunities of the Crown." The legislation now most immediately in question (s 46(2)(b) of the Transport Administration Act) was enacted in 1988 against the background not only of the decision in Wynyard, but also the subsequent development of the law relating to the privileges and immunities of the Crown. It follows that what was decided in Wynyard does not require the conclusion that the present appeal should fail. The construction of s 4(2) of the Division of Functions Act adopted in Wynyard should not be applied to s 46(2)(b) of the Transport Administration Act. It should not be applied because to do so would fail to give proper effect to the later recognition, in Townsville Hospitals Board, that the fundamental principles concerning Crown privileges and immunities require consideration of more than the single question regarded as determinative by the majority in Wynyard78: is the particular statutory body "to be regarded as an agent or servant of the Crown"? Rather, s 46(2)(b) is engaged by the various provisions found in other New South Wales legislation which use the phrase "statutory body representing the Crown" as a point of reference79. For these reasons, and the reasons given by McHugh, Gummow and Heydon JJ, the appeal should be allowed with costs against the Authority and consequential orders made in the terms their Honours propose. 74 (1982) 149 CLR 282 at 291 per Gibbs CJ. 75 (1955) 93 CLR 376 at 394. 76 (1982) 149 CLR 282 at 288. 77 (1982) 149 CLR 282 at 288. 78 (1955) 93 CLR 376 at 383. 79 See, for example, Confiscation of Proceeds of Crime Act 1989 (NSW), s 4; Criminal Records Act 1991 (NSW), s 4; Duties Act 1997 (NSW), s 308(6). Callinan CALLINAN J. If a New South Wales enactment states, as do many other enactments of that State, that for the purposes of any Act, a statutory creature represents the Crown, does that creature enjoy the benefit of the immunities that another enactment confers upon, or reserves to the Crown? This is the question that this appeal raises. The facts, the relevant sections of the legislation, and the course of the proceedings so far, are fully stated in the joint reasons of McHugh, Gummow and In Wynyard Investments Pty Limited v Commissioner for Railways (NSW)80 this Court (Williams, Webb and Taylor JJ, Fullagar and Kitto JJ dissenting) was required to construe the words "for the purposes of any Act the Commissioner for Railways shall be deemed a statutory body representing the Crown"81. To deem something to be so is to decree, or to declare it to be so. The word "deemed" therefore adds little or nothing. Accordingly, in my opinion there is no material difference between the words construed in Wynyard and the expression that the Court has to construe in this case82. But before dealing with Wynyard I should refer to other, earlier authority in which language of the kind to be construed here was considered and given the operation preferred by the majority in the former. In Skinner v Commissioner for Railways83, Jordan CJ (with whom Halse Rogers and Bavin JJ agreed) said this of s 4(1)(2) of the Transport (Division of Functions) Act 1932 (NSW)84: "Whatever might be the position of the Commissioner for Railways apart from this special provision of the Act of 1932, it is at least clear that he must now in New South Wales for the purposes of any Act be deemed a statutory body representing the Crown, and entitled to all such immunities as flow from that status." 80 (1955) 93 CLR 376. 81 Transport (Division of Functions) Act 1932 (NSW), s 4(2). 82 Section 46(2)(b) of the Transport Administration Act 1988 (NSW) states that the Roads and Traffic Authority is "for the purposes of any Act, a statutory body representing the Crown." 83 (1937) 37 SR(NSW) 261. 84 (1937) 37 SR(NSW) 261 at 272. Callinan Street CJ and Brereton J considered s 5(a) and (b) of the Landlord and in Electricity Tenant (Amendment) Act 1948 (NSW) ("the LTA Act") Commission of New South Wales v Australian United Press Ltd85. The Commission had been established by the Electricity Commission Act 1950 (NSW). It was subject to ministerial control and direction. The respondent there argued that even if the Commission were an agent of the Crown, the words "Crown in right ... of the State" in s 5(a) ought to be construed narrowly because the statutory language of s 5(b) made an express and separate exemption of the Housing Commission of New South Wales. It was submitted that if the "Crown in right of New South Wales" meant "a statutory body representing the Crown", then the express clarification in s 5(b) of the LTA Act that it should not bind the Housing Commission would be redundant. That Parliament included a separate reference to the Housing Commission supported the drawing of a distinction between the "Crown in right of New South Wales" and "a statutory body representing the Crown". The argument was rejected by Street CJ on the basis that the express exemption reflected no more than a super-abundance of caution on the part of the legislature86. Brereton J thought the exemption amounted to the piling of precaution upon precaution87. In the result, their Honours concluded that the Commission was acting as a servant or agent of the Crown and could not be bound by the LTA Act. In Wynyard the majority said this88: "The only way a statutory body could represent the Crown would be to act as the agent or servant of the Crown and this must be the meaning of the word The representation is 'for the purpose of any Act', so that for the purpose of any Act the Commissioner for Railways must be deemed to represent the Crown." 'represent' in this special provision. The appellant asks this Court to prefer the reasoning and conclusion of Kitto J with whom Fullagar J agreed. His Honour put the matter this way89: 85 (1954) 55 SR(NSW) 118. 86 (1954) 55 SR(NSW) 118 at 123. 87 (1954) 55 SR(NSW) 118 at 129. 88 (1955) 93 CLR 376 at 388 per Williams, Webb and Taylor JJ. 89 (1955) 93 CLR 376 at 396. Callinan "The point which I regard the cases as insisting upon is that when one turns, as one must, to examine the special legislation under which a statutory corporation acts (in a case where there is no express extension of the relevant Crown immunity to the corporation), one does so for a precise purpose. It is not to ascertain whether there is in some vague sense an approximation of the corporation to a government department. The object in view is to ascertain whether the Crown has such an interest in that which would be interfered with if the provision in question were held to bind the corporation that the interference would be, for a legal reason, an interference with some right, interest, power, authority, privilege, immunity or purpose belonging or appertaining to the Crown." His Honour later said this90: "Moreover, it is difficult ... to suppose that an extension of the Crown immunity from the operation of statutes could have been intended without an intention to give the commissioner the advantages enjoyed by agents of the Crown not only for the purposes of Acts but for all the purposes of the law. Then, too, s 4(2) does not provide that the commissioner shall be deemed to represent the Crown: he is to be deemed 'a statutory body representing the Crown'. The expression has about it the ring of a stereotyped formula used in statutes as a generic description of public bodies of a more or less fixed class which are repeatedly grouped with the Crown as a subject of legislation, that is to say as the subject of specific exempting provisions." He concluded his judgment in this way91: "A clear intention appears to me to emerge that, except as regards Acts which specially exempt statutory bodies described as representing the Crown, the commissioner shall be subject, to the same extent as other people, to the laws which Parliament sees fit to make from time to time. And when Parliament came to enact the [LTA Act] it did not exempt statutory bodies representing the Crown. It exempted only the Crown itself and one corporation, the Housing Commission of New South Wales. In the result I am of opinion that the Commissioner for Railways is not entitled to invoke the Crown's immunity in order to escape from the provisions of the [LTA Act]." 90 (1955) 93 CLR 376 at 401. 91 (1955) 93 CLR 376 at 402. Callinan The appellant submits that the decision in Wynyard has been overtaken, perhaps even implicitly overruled, by subsequent authority. An instance of that, the appellant contends, is the approval by the majority (McHugh ACJ, Gummow, Callinan and Heydon JJ) of the approach of Kitto J in Wynyard in NT Power Generation Pty Ltd v Power and Water Authority92 in which this was said93: "In Wynyard Investments Pty Ltd v Commissioner for Railways (NSW), Kitto J also identified another two classes of case. The first involves cases where94: 'a provision, if applied to a particular individual or corporation, would adversely affect the exercise of an authority which he or it possesses as a servant or agent of the Crown to perform some function so that in law it is performed by the Crown itself'. The second class consists of cases95: 'in which a provision, if applied to a particular individual or corporation, would adversely affect some proprietary right or interest of the Crown, legal, equitable or statutory'". The expression of a preference by a majority of the Court for an approach to the statutory construction of an enactment which had earlier been adopted by dissenting judges in another case concerned with a different enactment of a different legislature, undoubtedly has persuasive value in a third case such as this one in which the statutory language is materially very similar. But the expression of that preference does not necessarily determine the third case even though the third case is in the same jurisdiction as the one in which the dissenting opinion was expressed. Other important considerations have to be taken into account, including the extent to which the decision of the majority in the first case has been followed or acted upon by legislatures and others. The appellant referred to Townsville Hospitals Board v Townsville City Council96. There the relevant statutory language was "... a person or body who 92 (2004) 79 ALJR 1; 210 ALR 312. 93 (2004) 79 ALJR 1 at 34-35 [168]; 210 ALR 312 at 358. 94 (1955) 93 CLR 376 at 394. 95 (1955) 93 CLR 376 at 394. 96 (1982) 149 CLR 282. Callinan represents the Crown in right of the State"97. Gibbs CJ (with whom Murphy, Wilson and Brennan JJ agreed) proffered this caution98: "All persons should prima facie be regarded as equal before the law, and no statutory body should be accorded special privileges and immunities unless it clearly appears that it was the intention of the legislature to confer them. It is not difficult for the legislature to provide in express terms that a corporation shall have the privileges and immunities of the Crown, and where it does not do so it should not readily be concluded that it had that intention." That caution should of course be respected. It would deserve however even more respect if it had been accompanied by an identification and explanation of the other precise intention to be attributed to the legislature when it used the formula. For myself, I would not attribute to the legislature the sort of mindlessness that Kitto J seemed to think impelled the inclusion of the relevant language in the Act which his Honour was construing in Wynyard. The appellant also sought to rely on Bropho v Western Australia99. There, six Justices (Mason CJ, Deane, Dawson, Toohey, Gaudron and McHugh JJ)100 cited with approval a passage from Potter v Minahan101: "[it is] in the last degree improbable that the legislature would overthrow fundamental principles, infringe rights, or depart from the general system of law, without expressing its intention with irresistible clearness; and to give any such effect to general words, simply because they have that meaning in their widest, or usual, or natural sense, would be to give them a meaning in which they were not really used." The right to a protected tenancy could hardly however be described as a right enjoyed as a matter of fundamental principle. It is a right that owes its existence to statute. Its creation, by enactment, represents a marked departure from the general system of law of landlord and tenant. The Court did not in Bropho have to construe an expression of the kind that has been enacted here. It was a case in which reliance was placed by the respondent State upon an 97 Building Act 1975 (Q) s 4(4). 98 (1982) 149 CLR 282 at 291. 99 (1990) 171 CLR 1. 100 (1990) 171 CLR 1 at 18. 101 (1908) 7 CLR 277 at 304 per O'Connor J (footnote omitted). Callinan "entrenched presumption that a statute does not bind the Crown"102 only. Bropho therefore offers little assistance in the resolution of this case. Wynyard has stood for a long time. Only very powerful considerations would justify its overruling. I discussed some of the considerations to be taken into account in reversing earlier cases in Esso Australia Resources Ltd v Federal Commissioner of Taxation103, a case relating to legal professional privilege. I will not repeat that discussion here. I adhere to the opinions that I expressed in One particular consideration that I thought relevant and important in Brodie v Singleton Shire Council104 is present here: that the common law principle or doctrine which a party wished to have overruled, or held to have been propounded in error, had been recognized or enshrined in legislation105. It is true that the appellant was able to identify no fewer than eighteen Acts of the New South Wales Parliament which confer a benefit upon the Crown, and which define the Crown to include "a statutory body representing the Crown". One example is the Crown Proceedings Act 1988 (NSW) which relevantly provides106: "In this Act: Crown means the Crown in right of New South Wales, and includes: 102 (1990) 171 CLR 1 at 14. 103 (1999) 201 CLR 49 at 101-105 [153]-[154], [158]-[159], [163]-[164]. 104 (2001) 206 CLR 512 at 647 [374]-[375]. 105 The principle was that highway authorities should have an immunity for non- feasance. Section 12(1) of the State Roads Act 1986 (NSW) provided: "The Authority has, and may exercise, in relation to a classified road or a toll work, the functions and immunities of a council in relation to a public road." Callinan a statutory corporation, or other body, representing the Crown in right of New South Wales." Language of that kind does suggest that there may well be a distinction between the Crown in right of New South Wales, and statutory bodies in that State representing the Crown. But the provision in question here was enacted following Wynyard. In 1973, the Transport (Division of Functions) Act 1932 (NSW) was amended by the Main Roads (Amendment) Act 1973 (NSW). The sections in the Transport (Division of Functions) Act relating to the constitution of the Commissioner for Main Roads were deleted and inserted in the Main Roads Act 1924 (NSW) (ss 4A to 4C). The Commissioner appointed under the 1932 Act was deemed to be a corporation sole, and a continuation of the same legal personality despite the repeal of s 6 of that Act. Under s 4A(2)(f) of the Main Roads Act, the continued corporation was "... for the purpose of any Act, a statutory body representing the Crown." The same provision also appears in the State Roads Act 1986 (NSW), which repealed the relevant part of the Main Roads Act, as amended. Section 6 of the State Roads Act constituted the Commissioner for Main Roads as a corporation sole, again a continuation of the same legal personality, and s 6(2)(g) provided that the continued corporation was "... for the purpose of any Act, a statutory body representing the Crown." There was, as there almost always is in a case of this kind, the submission that to confer upon the State or any of its emanations, exemptions from any laws of any kind at any time, except in the most special of circumstances, is unfair, and that the Court ought to strive to construe the statutory language in such a way as to avoid that result. This is an attractive submission. But there are important caveats upon its unqualified acceptance. First, the language of the relevant enactment must be reasonably open to such a construction. Secondly, there may be an important public interest to be weighed against the private interest affected, the former of which the Court may be in a position inferior to that of Parliament to assess and bring into account. Thirdly, the Court should be restrained in the implication of words that the enactment does not contain, if an implication in order to achieve a particular result would be necessary. Fourthly, an even more cautious approach by the Court is desirable when the activity being undertaken under the enactment is not of a commercial kind, or the emanation of the State undertaking it, is not of a commercial or competitive character, or is not established deliberately as a separate corporate personality divorced and seen to be divorced from the State107 for all or most purposes. One relevant 107 Puntoriero v Water Administration Ministerial Corporation (1999) 199 CLR 575 Callinan consideration in that regard may be that the activities of the corporation are financed or subsidized by the State. As to this last matter, it has to be kept in mind that a great deal has been done in Australia since 1788 by or on behalf of the colonial, State and federal polities, that in other democracies tended to be done by persons engaged in private enterprise. It is not always easy therefore to categorize an activity or an enterprise in this country as either a commercial or State one. It is not surprising therefore that the Crown may sometimes claim an immunity, or an enactment may provide for it, in respect of an activity capable of characterization in more than one way. There is no evidence that the second respondent here was engaged in a regular business of letting residential properties. That it was seems unlikely in view of its statutory objects and functions108. Having regard to the matters that I have mentioned and the further matters which I will summarize, I have concluded that the appeal should be dismissed. The decision of the majority in Wynyard cannot be said to be plainly erroneous by any means, or as a failure to give effect to the legislative intention109. Their Honours in the majority did not think that the reference in the enactment there, as here, to representation for statutory but not other legal purposes demanded a different result. They explained themselves in this way110: "... the duties, powers and functions of the commissioner are derived so largely from statutes. Common law rights and obligations must often arise during their exercise but the Crown in New South Wales can be sued both in contract and in tort, and the commissioner would receive little benefit from any wider protection." 108 The second respondent is constituted by Pt 6, Div 1A of the Transport Administration Act 1988 (NSW). Its functions are conferred by that Act and the following New South Wales Acts: the Roads Act 1993, the Traffic Act 1909, the Motor Vehicles Taxation Act 1988, the Road Transport (Heavy Vehicles Registration Charges) Act 1995 and the Road Transport (Driver Licensing) Act 109 see Babaniaris v Lutony Fashions Pty Ltd (1987) 163 CLR 1 at 13 per Mason J. 110 (1955) 93 CLR 376 at 387. Callinan The legislature of New South Wales has frequently enacted the same provision or its like since the decision in Wynyard111. The decision has stood now for 50 years. Wynyard has been applied in New South Wales and elsewhere on several occasions112. Furthermore, there are some statements in the reasons for judgment of Kitto J in Wynyard with which I am unable to agree. His Honour said there that there was no express extension of the relevant Crown immunity to the corporation. That was in a sense to beg the question. On the majority view, the words "representing the Crown" did constitute an extension expressed perhaps not in the precise language used by Kitto J, but in language little or no less unambiguous. For a body to represent the Crown must mean that it is to stand in the shoes of the Crown in carrying out its necessary and incidental statutory functions. Otherwise the phrase would be no more than an empty statutory formula. Crown immunity is one of the particular advantages historically available to the state, and it is difficult to believe that one of the purposes of legislating that a corporation represent the Crown was not to confer that, or at least some significant immunity upon it. So too, the reference by Kitto J to "some right, interest, power, authority, privilege, immunity or purpose belonging or appertaining to the Crown" is not particularly helpful. There was a time when all of these were claimed absolutely by the Crown. Nowadays it can be said that all of the activities undertaken by the State are, or should be undertaken, not in any regal, personal or capricious interest, but in the public interest and at public expense. That is a circumstance that can argue at least as much in favour of Crown immunity as against it. I am also inclined to doubt whether his Honour's pejorative description of the statutory formula as a stereotypical generic description of a class of public bodies repeatedly grouped with the Crown, assists in the resolution of the issue of immunity. Consistency of language is designed to produce consistency of result. Grouping with the Crown implies association, and the sharing of characteristics with, the Crown. I acknowledge the strength of the arguments advanced in favour of the appellant. I am far from convinced however that acceptance of them would allow, as the appellant argues, the first respondent to claim an immunity in any 111 For example, see the following New South Wales Acts: Crown Lands Act 1989, s 13(4); Education Act 1990, s 99(2); Government Telecommunications Act 1991, s 29(3); Housing Act 2001, s 6(4); Motor Accidents Compensation Act 1999, s 198(2); Ports Corporatisation and Waterways Management Act 1995, s 35(2). 112 Aborigines Welfare Board v Saunders [1961] NSWR 917; Randwick Municipal Council v Commissioner for Government Transport [1967] 1 NSWR 428; Holflex Pty Ltd v Paradox Pty Ltd (1989) 97 FLR 438; Chief Commissioner of State Revenue v Darling Harbour Authority (2001) 114 LGERA 97. Callinan other circumstances. The first task, that Kitto J thought that the Court had to undertake, of identifying a power, or right, or privilege (of the Crown), may cause particular difficulty in this country in which State, and therefore Crown activities are, and historically have been, very diverse. The most persuasive of the matters that argue in favour of the second respondent is the enactment by the New South Wales legislature of at least 80 Acts, to some only of which I have referred, containing exactly the same, or virtually the same, formula, and which have been identified in detail by the parties. I would dismiss the appeal. |
HIGH COURT OF AUSTRALIA PLAINTIFF M1/2021 PLAINTIFF AND MINISTER FOR HOME AFFAIRS DEFENDANT Plaintiff M1/2021 v Minister for Home Affairs [2022] HCA 17 Date of Hearing: 30 November 2021 Date of Judgment: 11 May 2022 ORDER The questions of law stated for the opinion of the Full Court in the Special Case filed on 28 April 2021 be answered as follows: In deciding whether there was another reason to revoke the Cancellation Decision pursuant to s 501CA(4)(b)(ii) of the Migration Act 1958 (Cth), was the Delegate required to consider the plaintiffβs representations made in response to the invitation issued to him pursuant to s 501CA(3)(b) of the Migration Act, which raised a potential breach of Australiaβs international non-refoulement obligations, where the plaintiff remained free to apply for a protection visa under the Migration Act? Answer: In deciding whether there was "another reason" to revoke the Cancellation Decision pursuant to s 501CA(4)(b)(ii) of the Migration Act 1958 (Cth), where the plaintiff remained free to apply for a protection visa under the Migration Act: the Delegate was required to read, identify, understand and evaluate the plaintiff's representations made in response to the invitation issued to him under s 501CA(3)(b) that raised a potential breach of Australia's international non-refoulement obligations; (2) Australia's international obligations unenacted in Australia were not a mandatory relevant consideration; and non-refoulement the extent Australia's international non-refoulement obligations are given effect in the Migration Act, one available outcome for the Delegate was to defer assessment of whether the plaintiff was owed those non-refoulement obligations on the basis that it was open to the plaintiff to apply for a protection visa under the Migration Act. In making the Non-Revocation Decision: did the Delegate fail to exercise the jurisdiction conferred by s 501CA(4) of the Migration Act? did the Delegate deny the plaintiff procedural fairness? did the Delegate misunderstand the Migration Act and its operation? Answer: (a) No. (b) No. Is the Non-Revocation Decision affected by jurisdictional error? Answer: Does not arise. Should the period of time fixed by s 486A(1) of the Migration Act and rr 25.02.1 and 25.02.2 of the High Court Rules 2004 (Cth) within which to make the Application be extended to 5 January 2021? Answer: 5. What, if any relief, should be granted? Answer: None. 6. Who should pay the costs of, and incidental to, the Special Case? Answer: The plaintiff. Representation R C Knowles QC and C Mintz for the plaintiff (instructed by Corrs Chambers Westgarth) C L Lenehan SC with B D Kaplan for the defendant (instructed by Australian Government Solicitor) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Plaintiff M1/2021 v Minister for Home Affairs Immigration β Visas β Cancellation of visa β Revocation of cancellation β Where plaintiff's visa cancelled under s 501(3A) of Migration Act 1958 (Cth) β Where plaintiff made representations seeking revocation of cancellation decision under s 501CA(4) β Where representations raised potential breach of Australia's international non-refoulement obligations β Where delegate of Minister decided there was not "another reason" to revoke cancellation decision under s 501CA(4)(b)(ii) β Where delegate considered it unnecessary to determine whether non-refoulement obligations owed because plaintiff could make valid application for protection visa β Where delegate considered existence or otherwise of non-refoulement obligations would be fully assessed in course of processing protection visa application β Whether, in deciding whether there was "another reason" to revoke cancellation decision, delegate required to consider plaintiff's representations raising potential breach of Australia's non-refoulement obligations β Whether delegate failed to exercise jurisdiction conferred by s 501CA(4) β Whether delegate denied plaintiff procedural fairness β Whether delegate misunderstood Migration Act and its operation. Words and phrases β "another reason", "domestic law", "due process", "international non-refoulement obligations", "mandatory relevant consideration", "procedural fairness", "protection visa", "read, identify, understand and evaluate", "reasonable consideration", "representations concerning non-refoulement", "requisite level of engagement". Migration Act 1958 (Cth), ss 36, 501, 501CA, 501E. KIEFEL CJ, KEANE, GORDON AND STEWARD JJ. The plaintiff was born in the Republic of the Sudan and is a citizen of the Republic of South Sudan. On 3 June 2006, the plaintiff entered Australia as the holder of a Refugee and Humanitarian (Class XB) Subclass 202 (Global Special Humanitarian) visa, which is not a protection visa1. On 19 September 2017, the plaintiff was convicted of two counts of unlawful assault and was sentenced to an aggregate term of 12 months' imprisonment. On 27 October 2017, the plaintiff's visa was cancelled pursuant to s 501(3A) of the Migration Act 1958 (Cth) because a delegate of the then Minister for Immigration and Border Protection2 ("the Minister") was satisfied that the plaintiff had been sentenced to a term of imprisonment of 12 months or more and therefore had a substantial criminal record3, and that he was serving a full-time custodial sentence ("the Cancellation Decision"). On that same day, 27 October 2017, an officer of the Department of Immigration and Border Protection notified the plaintiff of the Cancellation Decision and, under s 501CA(3)(b) of the Migration Act, invited him to make representations to the Minister about revocation of the Cancellation Decision. sought The plaintiff the Cancellation Decision. revocation of His representations to the Minister stated, among other things, that if he were returned to South Sudan he would face persecution, torture and death. Further, in a subsequent letter, the plaintiff relevantly stated: "[D]ue to 'non-refoulment obligations', I didn't think it was possible to force me back to South Sudan, even if I wasn't making the effort I've been making to better myself. I spoke to my mother last night, and she tells me that the situation in regards to my tribe ... remains fundamentally unchanged to the killing since we fled there just over 20 years ago ... I'm outright scared about the prospect of being forced back to South Sudan. I had to leave there, along with the rest of my family, because our lives were in danger, and I don't understand why you would want to send me to my death?" On 9 August 2018, a delegate of the Minister ("the Delegate") made a decision, pursuant to s 501CA(4) of the Migration Act, not to revoke the 1 Migration Act 1958 (Cth), s 35A. 2 Now the Minister for Home Affairs and Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs. 3 Migration Act, s 501(6)(a) and (7)(c). Gordon Steward Cancellation Decision because they were not satisfied that the plaintiff passed the character test or that there was "another reason" why the Cancellation Decision should be revoked ("the Non-Revocation Decision"). The Delegate stated that they had considered the plaintiff's representations and documents submitted in support of his representations and, relevantly, that included representations that he would "be captured, tortured and killed" if returned to South Sudan because of his ethnicity. Under the heading "International non-refoulement obligations", the Delegate stated that they considered it was unnecessary to determine whether non-refoulement obligations were owed in respect of the plaintiff because the plaintiff could make a valid application for a protection visa and the existence or otherwise of non-refoulement obligations would be fully assessed in the course of processing such an application. In September 2018, the plaintiff completed his custodial sentence and he has been detained in immigration detention since then. Also in September 2018, the plaintiff applied for a protection visa. Two years later, in September 2020, a delegate of the Minister refused that application. After obtaining legal advice in late 2020, the plaintiff filed out of time an application for a constitutional or other writ in this Court seeking, among other things, a writ of certiorari to quash the Non-Revocation Decision and a writ of mandamus, or an injunction, to compel the Minister to exercise the power under s 501CA(4) of the Migration Act according to law ("the Application"). The plaintiff and the Minister agreed to state questions of law for the opinion of the Full Court. The primary question presented by the Special Case is whether, in deciding whether there was "another reason" to revoke the Cancellation Decision pursuant to s 501CA(4)(b)(ii) of the Migration Act, the Delegate was required to consider the plaintiff's representations which raised a potential breach of Australia's international non-refoulement obligations where the plaintiff was able to make a valid application for a protection visa. Ultimately, what divided the parties was not if those representations should have been considered by the Delegate, but how. For the reasons that follow, in deciding whether there was "another reason" to revoke the Cancellation Decision pursuant to s 501CA(4)(b)(ii) of the Migration Act, where the plaintiff remained free to apply for a protection visa under the Migration Act: the Delegate was required to read, identify, understand and evaluate the plaintiff's representations made in response to the invitation issued to him Gordon Steward under s 501CA(3)(b) that raised a potential breach of Australia's international non-refoulement obligations; (2) Australia's international non-refoulement obligations unenacted Australia were not a mandatory relevant consideration; and to the extent Australia's international non-refoulement obligations are given effect in the Migration Act, one available outcome for the Delegate was to defer assessment of whether the plaintiff was owed those non-refoulement obligations on the basis that it was open to the plaintiff to apply for a protection visa under the Migration Act. Statutory scheme Section 501(3A) of the Migration Act4 relevantly provides that the Minister must cancel a visa that has been granted to a person if they are satisfied that the person has been sentenced to a term of imprisonment of 12 months or more and therefore has a substantial criminal record5, and that the person is serving a sentence of imprisonment on a full-time basis in a custodial institution ("the original decision"). The rules of natural justice do not apply to a decision made under s 501(3A)6. That is, the person's visa is cancelled without the person being given procedural fairness7. Several consequences flow from the cancellation of a visa under s 501(3A). First, unless the cancellation decision is set aside or revoked, the former visa holder cannot apply for another visa except a protection visa or a visa specified in the Migration Regulations 1994 (Cth)8. In other words, it remains open to a person 4 As it stood at the relevant time. 5 Migration Act, s 501(6)(a) and (7)(c). 6 Migration Act, s 501(5). See Minister for Immigration and Border Protection v EFX17 (2021) 95 ALJR 342 at 349 [30]; 388 ALR 351 at 359; Ratu v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2021] FCAFC 141 at [56]. 8 Migration Act, s 501E(1) and (2). At the relevant time, the only visa specified in the Migration Regulations was a Bridging R (Class WR) visa: Migration Regulations, Gordon Steward whose visa has been cancelled under s 501(3A) (which is not a protection visa) to apply for a protection visa9. If, however, the visa cancelled under s 501(3A) was a protection visa, s 48A relevantly provides that the former visa holder "may not make a further application for a protection visa while in the migration zone"10. The Minister does, however, retain a personal power to determine that s 48A does not apply to a non-citizen11. Second, the status of the former visa holder is changed from that of lawful non-citizen to that of unlawful non-citizen12. The former visa holder must be taken into immigration detention under s 189 of the Migration Act and must be removed from Australia as soon as reasonably practicable under s 19813. Third, and relatedly, s 197C provides that, for the purposes of removal under s 198, "it is irrelevant whether Australia has non-refoulement obligations in respect of an unlawful non-citizen"14 and "[a]n officer's duty to remove as soon as reasonably practicable an unlawful non-citizen under section 198 arises 9 Migration Act, s 501E(2). Section 35A provides for classes of visa that are protection visas. If a valid application for a protection visa is made, the decision-maker must determine whether or not they are satisfied that the relevant criteria have been met: see ss 36 and 65. 10 Migration Act, s 48A(1B); see also s 48A(1C)(a) and (d). Paragraph 14.1(6) of Direction No 65 β Migration Act 1958 β Direction under section 499 β Visa refusal and cancellation under s 501 and revocation of a mandatory cancellation of a visa under s 501CA ("Direction 65") relevantly provided that if a person seeking revocation of a cancellation decision under s 501CA(4) had a protection visa cancelled and they were unable to apply for a subsequent protection visa, then "decision-makers should seek an assessment of Australia's international treaty obligations" and "[a]ny non-refoulement obligation should be weighed carefully against the seriousness of the non-citizen's criminal offending or other serious conduct in deciding whether or not the non-citizen should have their visa reinstated". 11 Migration Act, s 48B. See also Direction 65, para 14.1(5). 12 Migration Act, s 15; see also ss 13 and 14. See also Falzon v Minister for Immigration and Border Protection (2018) 262 CLR 333 at 356 [84], 360 [96]. 13 See Migration Act, ss 198(2A)(b), 198(2A)(c)(ii), 198(2B)(b), 198(2B)(c)(ii). 14 Migration Act, s 197C(1) (as it stood at the relevant time). Gordon Steward irrespective of whether there has been an assessment, according to law, of Australia's non-refoulement obligations in respect of the non-citizen"15. "[N]on-refoulement obligations" is defined in the Migration Act to include such obligations as may arise because Australia is party to the Convention relating to the Status of Refugees, the International Covenant on Civil and Political Rights or the Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment, and obligations accorded by customary international law that are of a similar nature16. In those circumstances, the Minister retains the personal non-delegable power to grant a visa to a person who is in detention under s 189 if they think it is in the public interest to do so17. Where a person's visa has been cancelled under s 501(3A), s 501CA provides a procedure for possible revocation of the original decision. The procedure relevantly has two aspects18 β as soon as practicable after making the original decision, the Minister must: give the person a written notice that sets out the original decision19; and "invite the person to make representations to the Minister ... about revocation of the original decision"20 (emphasis added). Section 501CA(4) then provides that the Minister may revoke the original decision if the person makes representations in accordance with the invitation issued under s 501CA(3)(b)21 and the Minister is satisfied that the person passes 15 Migration Act, s 197C(2) (as it stood at the relevant time). 16 Migration Act, s 5(1) definition of "non-refoulement obligations" read with definitions of "Refugees Convention", "Covenant" and "Convention Against Torture". 17 See Migration Act, s 195A. 18 See Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs v Viane (2021) 96 ALJR 13 at 17-18 [13]; 395 ALR 403 at 407. 19 Migration Act, s 501CA(3)(a)(i). 20 Migration Act, s 501CA(3)(b). 21 Migration Act, s 501CA(4)(a). Gordon Steward the character test (as defined in s 501)22 or "that there is another reason why the original decision should be revoked"23. This case is concerned with the latter. At the relevant time, Direction No 65 β Migration Act 1958 β Direction under section 499 β Visa refusal and cancellation under s 501 and revocation of a mandatory cancellation of a visa under s 501CA ("Direction 65")24, given by the Minister under s 499 of the Migration Act25, relevantly provided that, in exercising the discretion to revoke a mandatory visa cancellation under s 501CA, delegates had to take into account what were described as "primary"26 and "other"27 considerations. The considerations listed in Direction 65 were non-exhaustive. "International non-refoulement obligations"28 was listed as the first of the "other considerations". In relation to "International non-refoulement obligations", para 14.1 of Direction 65 relevantly provided: "(1) A non-refoulement obligation is an obligation not to forcibly return, deport or expel a person to a place where they will be at risk of a 22 Migration Act, s 501CA(4)(b)(i). 23 Migration Act, s 501CA(4)(b)(ii). 24 On 28 February 2019, Direction 65 was revoked and replaced by Direction No 79 β Migration Act 1958 β Direction under section 499 β Visa refusal and cancellation under s 501 and revocation of a mandatory cancellation of a visa under s 501CA. 25 The Minister has power to "give written directions to a person or body having functions or powers under [the Migration Act] if the directions are about: (a) the performance of those functions; or (b) the exercise of those powers": s 499(1). The person or body must comply with the direction: s 499(2A). The Minister is not empowered to give directions that would be inconsistent with the Migration Act or the Migration Regulations: s 499(2). 26 Direction 65, paras 7(1)(b) and 13. The "primary considerations" were "Protection of the Australian community" (para 13.1); "Best interests of minor children in Australia affected by the decision" (para 13.2); and "Expectations of the Australian community" (para 13.3). 27 Direction 65, paras 7(1)(b) and 14. The "other considerations" included "Strength, nature and duration of ties" (para 14.2); "Impact on Australian business interests" (para 14.3); "Impact on victims" (para 14.4); and "Extent of impediments if removed" (para 14.5). 28 Direction 65, para 14.1. Gordon Steward specific type of harm. Australia has non-refoulement obligations under the 1951 Convention relating to the Status of Refugees as amended by the 1967 Protocol (together called the Refugees Convention); the Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment (the CAT); and the International Covenant on Civil and Political Rights and its Second Optional Protocol (the ICCPR). The [Migration Act] reflects Australia's interpretation of those obligations and, where relevant, decision-makers should follow the tests enunciated in the [Migration Act]. (4) Where a non-citizen makes claims which may give rise to international non-refoulement obligations and that non-citizen would be able to make a valid application for another visa if the mandatory cancellation is not revoked, it is unnecessary to determine whether non-refoulement obligations are owed to the non-citizen for the purposes of determining whether the cancellation of their visa should be revoked." (emphasis added) Non-refoulement As has been identified, the Migration Act expressly recognises and draws a distinction between Australia's non-refoulement obligations under international law and the extent to which those non-refoulement obligations have been implemented in Australian domestic law29 by express provisions in the Migration Act. Australia's non-refoulement obligations, to the extent enacted as domestic law, are addressed in the Migration Act in provisions concerning the grant of protection visas, being a class of visa created specifically to allow decision-makers 29 Applicant S270/2019 v Minister for Immigration and Border Protection (2020) 94 ALJR 897 at 902 [34]-[35]; 383 ALR 194 at 200-201, citing Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1 at 33 [101] and CPCF v Minister for Immigration and Border Protection (2015) 255 CLR 514 at 627 [385], 650-651 [490]-[491]. See also SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362 at 366 [4]-[5]; DQU16 v Minister for Home Affairs (2021) 95 ALJR 352 at 357 [12]; 388 ALR 363 at 368. Gordon Steward to grant visas to persons who cannot be removed from Australia consistently, but not co-extensively, with Australia's non-refoulement obligations under international law30. There are relevantly two criteria for the grant of a protection visa: "that the applicant is a non-citizen in Australia 'in respect of whom the Minister is satisfied Australia has protection obligations because the person is a refugee' under s 36(2)(a); and, if the applicant does not satisfy that criterion, that the applicant meets the complementary protection criterion under s 36(2)(aa), which gives effect to some of Australia's non-refoulement obligations under international instruments"31. But the applicant must also satisfy "ineligibility criteria"32, including that "the applicant is not a person whom the Minister considers, on reasonable grounds ... having been convicted by a final judgment of a particularly serious crime, is a danger to the Australian community"33. Direction No 75 β Refusal of protection visas relying on section 36(1C) and section 36(2C)(b) ("Direction 75"), given under s 499 of the Migration Act, requires delegates to have regard to the refugee and complementary protection criteria before considering the ineligibility criteria34. Whether it would have been unreasonable or irrational for a decision-maker (such as the Minister) who was not bound by Direction 75 to consider ineligibility criteria without first considering claims to protection is not raised by the questions of law in this case. 30 Applicant S270 (2020) 94 ALJR 897 at 902 [34]; 383 ALR 194 at 200-201; Migration Act, ss 5H, 5J, 35A, 36, 37A, 91A-91X. 31 DQU16 (2021) 95 ALJR 352 at 354 [1]; 388 ALR 363 at 364. 32 Migration Act, ss 36(1C) and 36(2C)(b). See Direction No 75 β Refusal of protection visas relying on section 36(1C) and section 36(2C)(b). cf Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs v FAK19 [2021] FCAFC 33 Migration Act, s 36(1C)(b). 34 As of 25 May 2021, it is a requirement of the Migration Act that, relevantly, in considering an application by a non-citizen for a protection visa, the Minister must consider whether they are satisfied that the non-citizen satisfies the criteria in s 36(2)(a) and (aa) before considering whether the non-citizen satisfies any other criteria for the grant of the visa: s 36A, inserted by Migration Amendment (Clarifying International Obligations for Removal) Act 2021 (Cth), s 3 read with Sch 1, item 1. Gordon Steward Australia's international non-refoulement obligations, as distinct from the criteria for the grant of a protection visa, are addressed separately and later in the scheme of the Migration Act in the context of removal35. That distinction is important. In point of constitutional principle, an international treaty (or customary international law obligations of a similar nature) can operate as a source of rights and obligations under domestic law only if, and to the extent that, it has been enacted by Parliament. It is only Parliament that may make and alter the domestic law36. The distinction also has significant consequences for discretionary decision-making under powers, such as s 501CA, conferred by statute and without specification of unenacted international obligations: such obligations are not mandatory relevant considerations attracting judicial review for jurisdictional error37. Section 501CA(4) It is in that context that the specific issue in this case is to be addressed β whether a decision-maker considering revocation under s 501CA(4) is required to determine whether non-refoulement obligations are owed to the former visa holder where the person makes representations which raise a potential breach of those obligations but the person remains free to apply for a protection visa. As has been stated, the dispute between the parties was not if, but how, such representations should be considered by the decision-maker. Decision-makers' approach to representations Section 501CA(4) of the Migration Act confers a wide discretionary power38 on a decision-maker to revoke a decision to cancel a visa held by a non-citizen if satisfied that there is "another reason" why that decision should be revoked. The statutory scheme for determining whether the decision-maker is satisfied that there is "another reason" for revoking a cancellation decision 35 See [13] above. See also Applicant S270 (2020) 94 ALJR 897 at 902 [34]; 383 ALR 194 at 200; Migration Act, s 197C. 36 CPCF (2015) 255 CLR 514 at 650-651 [490]; see also 627 [385]. 37 Lam (2003) 214 CLR 1 at 33 [101]; CPCF (2015) 255 CLR 514 at 650-651 38 Applicant S270 (2020) 94 ALJR 897 at 902 [36]; 383 ALR 194 at 201; Viane (2021) 96 ALJR 13 at 17 [12]; 395 ALR 403 at 406. Gordon Steward commences with a former visa holder making representations. In determining whether they are satisfied that there is "another reason" for revoking a cancellation decision, the decision-maker undertakes the assessment by reference to the case made by the former visa holder by their representations39. It is, however, improbable that Parliament intended for that broad discretionary power to be restricted or confined by requiring the decision-maker to treat every statement within representations made by a former visa holder as a mandatory relevant consideration40. But the decision-maker cannot ignore the representations. The question remains how the representations are to be considered. Consistently with well-established authority in different statutory contexts, there can be no doubt that a decision-maker must read, identify, understand and evaluate the representations41. Adopting and adapting what Kiefel J (as her Honour then was) said in Tickner v Chapman42, the decision-maker must have regard to what is said in the representations, bring their mind to bear upon the facts stated in them and the arguments or opinions put forward, and appreciate who is making them. From that point, the decision-maker might sift them, attributing whatever weight or persuasive quality is thought appropriate. The weight to be afforded to 39 Applicant S270 (2020) 94 ALJR 897 at 902 [36]; 383 ALR 194 at 201; Viane (2021) 96 ALJR 13 at 17 [13]; 395 ALR 403 at 407. See also Australia, House of Representatives, Migration Amendment (Character and General Visa Cancellation) Bill 2014, Explanatory Memorandum at 16 [92]. 40 See Viane (2021) 96 ALJR 13 at 17-18 [13]; 395 ALR 403 at 407. See also Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 39-40; Minister for Home Affairs v Buadromo (2018) 267 FCR 320 at 331-332 [41]. 41 Applicant S270 (2020) 94 ALJR 897 at 902 [36]; 383 ALR 194 at 201; Viane (2021) 96 ALJR 13 at 17 [13]; 395 ALR 403 at 407. See also Tickner v Chapman (1995) 57 FCR 451 at 462, 476, 495; Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57 at 81-82 [81]-[82]; Dranichnikov v Minister for Immigration and Multicultural Affairs (2003) 77 ALJR 1088 at 1092 [24], 1101 [88], 1102 [95]; 197 ALR 389 at 394, 407, 408; Minister for Immigration and Border Protection v SZMTA (2019) 264 CLR 421 at 435-436 [13], 463 [105]; DVO16 v Minister for Immigration and Border Protection (2021) 95 ALJR 375 at 380 [12]; 388 ALR 389 at 393. (1995) 57 FCR 451 at 495. Gordon Steward the representations is a matter for the decision-maker43. And the decision-maker is not obliged "to make actual findings of fact as an adjudication of all material claims" made by a former visa holder44. It is also well-established that the requisite level of engagement by the decision-maker with the representations must occur within the bounds of rationality and reasonableness45. What is necessary to comply with the statutory requirement for a valid exercise of power will necessarily depend on the nature, form and content of the representations46. The requisite level of engagement β the degree of effort needed by the decision-maker β will vary, among other things, according to the length, clarity and degree of relevance of the representations47. 43 See Peko-Wallsend (1986) 162 CLR 24 at 41; Abebe v The Commonwealth (1999) 197 CLR 510 at 580 [197]; Minister for Immigration and Citizenship v SZJSS (2010) 243 CLR 164 at 176 [33]. 44 Viane (2021) 96 ALJR 13 at 18 [14]; 395 ALR 403 at 407. 45 Viane (2021) 96 ALJR 13 at 18 [13]; 395 ALR 403 at 407. See also R v Connell; Ex parte The Hetton Bellbird Collieries Ltd (1944) 69 CLR 407 at 430; Enfield City Corporation v Development Assessment Commission (2000) 199 CLR 135 at 150 [34]; Minister for Immigration and Multicultural Affairs v Jia Legeng (2001) 205 CLR 507 at 532 [73]; Minister for Immigration and Multicultural and Indigenous Affairs v SGLB (2004) 78 ALJR 992 at 998 [38]; 207 ALR 12 at 20; Minister for Immigration and Citizenship v Li (2013) 249 CLR 332 at 370-371 [90]-[92]; Wei v Minister for Immigration and Border Protection (2015) 257 CLR 22 at 35 [33]. 46 Peko-Wallsend (1986) 162 CLR 24 at 40; CRI026 v Republic of Nauru (2018) 92 ALJR 529 at 544-545 [66]; 355 ALR 216 at 234; SZMTA (2019) 264 CLR 421 at 435-436 [13], 463 [105]; AXT19 v Minister for Home Affairs [2020] FCAFC 32 at [56]; Viane (2021) 96 ALJR 13 at 18 [15]; 395 ALR 403 at 407. 47 Dranichnikov (2003) 77 ALJR 1088 at 1092 [24], 1102 [95]; 197 ALR 389 at 394, 408; CRI026 (2018) 92 ALJR 529 at 544-545 [66]; 355 ALR 216 at 234. See also Tickner (1995) 57 FCR 451 at 462-463; Singh v Minister for Immigration and Multicultural Affairs (2001) 109 FCR 152 at 164-165 [59]. Gordon Steward The decision-maker is not required to consider claims that are not clearly articulated or which do not clearly arise on the materials before them48. Labels like "active intellectual process"49 and "proper, genuine and realistic consideration"50 must be understood in their proper context. These formulas have the danger of creating "a kind of general warrant, invoking language of indefinite and subjective application, in which the procedural and substantive merits of any [decision-maker's] decision can be scrutinised"51. That is not the correct approach. 48 See Applicant S270 (2020) 94 ALJR 897 at 902 [33]; 383 ALR 194 at 200; Viane (2021) 96 ALJR 13 at 18 [15]; 395 ALR 403 at 407. cf Dranichnikov (2003) 77 ALJR 1088 at 1100 [78]; 197 ALR 389 at 405. 49 See, eg, Tickner (1995) 57 FCR 451 at 462; Carrascalao v Minister for Immigration and Border Protection (2017) 252 FCR 352 at 363-364 [45]-[46]; He v Minister for Immigration and Border Protection (2017) 255 FCR 41 at 51-52 [53]; Singh v Minister for Home Affairs (2019) 267 FCR 200 at 208 [30]; Hands v Minister for Immigration and Border Protection (2018) 267 FCR 628 at 638 [38]; Minister for Home Affairs v Omar (2019) 272 FCR 589 at 607 [37]; Ali v Minister for Home Affairs (2020) 278 FCR 627 at 643 [45]; MQGT v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (2020) 282 FCR 285 at 291-292 [20], quoting Hernandez v Minister for Home Affairs [2020] FCA 415 at [16]-[20]; DVO16 (2021) 95 ALJR 375 at 380 [12]; 388 ALR 389 at 393. 50 See, eg, Khan v Minister for Immigration and Ethnic Affairs (unreported, Federal Court of Australia, 11 December 1987) at 11; NAIS v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 228 CLR 470 at 482 [37], 526 [171]; SZJSS (2010) 243 CLR 164 at 175-176 [29]-[30]; Bondelmonte v Bondelmonte (2017) 259 CLR 662 at 675 [43]. See also Swift v SAS Trustee Corporation (2010) 6 ASTLR 339 at 351-352 [45]-[47]. 51 Ayoub v Minister for Immigration and Border Protection (2015) 231 FCR 513 at 520 [24], quoting Minister for Immigration and Multicultural Affairs v Anthonypillai (2001) 106 FCR 426 at 442 [65]. See also SZJSS (2010) 243 CLR 164 at 175-177 [29]-[34]; Minister for Immigration and Border Protection v MZYTS (2013) 230 FCR 431 at 448 [54]; Carrascalao (2017) 252 FCR 352 at 360-361 [32]-[34]; Minister for Immigration and Border Protection v Maioha (2018) 267 FCR 643 at 654 [42]; CXS18 v Minister for Home Affairs [2020] FCAFC 18 at [35]; AXT19 [2020] FCAFC 32 at [56]; XFCS v Minister for Home Affairs [2020] FCAFC Gordon Steward As Mason J stated in Minister for Aboriginal Affairs v Peko-Wallsend Ltd52, "[t]he limited role of a court reviewing the exercise of an administrative discretion must constantly be borne in mind". The court does not substitute its decision for that of an administrative decision-maker. None of the preceding analysis detracts from, or is inconsistent with, established principle that, for example, if review of a decision-maker's reasons discloses that the decision-maker ignored, overlooked or misunderstood relevant facts or materials53 or a substantial and clearly articulated argument54; misunderstood the applicable law55; or misunderstood the case being made by the former visa holder56, that may give rise to jurisdictional error. Decision-makers' approach to non-refoulement Where the representations do not include, or the circumstances do not suggest, a non-refoulement claim, there is nothing in the text of s 501CA, or its subject matter, scope and purpose, that requires the Minister to take account of any non-refoulement obligations when deciding whether to revoke the cancellation of any visa that is not a protection visa57. (1986) 162 CLR 24 at 40; see also 30, 71. 53 Craig v South Australia (1995) 184 CLR 163 at 179; SZJSS (2010) 243 CLR 164 at 175 [27], citing Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 at 351-352 [82]-[84]; Plaintiff M64/2015 v Minister for Immigration and Border Protection (2015) 258 CLR 173 at 185 [25]; SZMTA (2019) 264 CLR 421 at 436 [13]; Viane (2021) 96 ALJR 13 at 19 [22]; 395 ALR 403 at 409. See also Aronson, Groves and Weeks, Judicial Review of Administrative Action and Government Liability, 6th ed (2017) at 271-274 [4.770]. 54 See SZMTA (2019) 264 CLR 421 at 436 [13], 463 [105]. See also Dranichnikov (2003) 77 ALJR 1088 at 1092 [24]-[25], 1102 [95]; 197 ALR 389 at 394, 408. 55 Hetton Bellbird Collieries (1944) 69 CLR 407 at 430; Miah (2001) 206 CLR 57 at 81-82 [81]-[82]; Wei (2015) 257 CLR 22 at 35 [33]. 56 Dranichnikov (2003) 77 ALJR 1088 at 1101 [88]; 197 ALR 389 at 407. 57 Applicant S270 (2020) 94 ALJR 897 at 902 [33], 902-903 [36]; 383 ALR 194 at 200, 201; Viane (2021) 96 ALJR 13 at 18 [13]; 395 ALR 403 at 407. Gordon Steward Where the representations do include, or the circumstances do suggest, a non-refoulement claim by reference to unenacted international non-refoulement obligations, that claim may be considered by the decision-maker under s 501CA(4)58. But those obligations cannot be, and are not, mandatory relevant considerations under s 501CA(4) attracting judicial review for jurisdictional error59 β they are not part of Australia's domestic law. Where the representations do include, or the circumstances do suggest, a claim of non-refoulement under domestic law, again the claim may be considered by the decision-maker under s 501CA(4)60, but one available outcome for the decision-maker is to defer assessment of whether the former visa holder is owed those non-refoulement obligations on the basis that it is open to the former visa holder to apply for a protection visa. Prior decisions After the hearing, the Minister provided a list of decisions of the Federal Court of Australia identifying specific paragraphs in each decision which the Minister submitted are inconsistent with the analysis set out above. Although each case was fact specific and the approach adopted and the ultimate result depended on the decision-maker's reasoning in the particular case, it is necessary to address what might be seen as five related paths of reasoning arising from the decisions. Where, in prior decisions, error was found on the basis that the decision-maker conflated the concept of Australia's non-refoulement obligations under international law with protection obligations under the Migration Act61 58 See Direction 65, para 14.1. 59 Lam (2003) 214 CLR 1 at 33 [101]; CPCF (2015) 255 CLR 514 at 650-651 60 Direction 65, para 14.1. Ibrahim v Minister for Home Affairs (2019) 270 FCR 12 at 36-37 [106]-[117]; FQM18 v Minister for Home Affairs [2019] FCA 1263 at [10]-[15]; Kio v Minister for Home Affairs [No 2] [2019] FCA 1293 at [30]-[31]; EKC19 v Minister for Home Affairs [2019] FCA 1823 at [28]; DGI19 v Minister for Home Affairs [2019] FCA 1867 at [78]-[79]; DGP20 v Minister for Home Affairs [2020] FCA 1055 at [37]; PKZM v Minister for Immigration, Citizenship, Migrant Services and Multicultural Gordon Steward (the first path), failed to appreciate the qualitative differences in the manner in which Australia's non-refoulement obligations may be considered for the purposes the protection visa process62 of s 501CA(4) and (the second path), or misunderstood that the protection visa process does not call for full exploration of whether Australia is in breach of non-refoulement obligations under international law63 (the third path), the decisions overlook that Parliament made a choice about the extent to, and manner in, which Australia's international non-refoulement obligations are the Migration Act. As Direction 65 states, "[t]he [Migration Act] reflects Australia's interpretation of those obligations and, where relevant, decision-makers should follow the tests enunciated in the [Migration Act]"64. To the extent that these paths of reasoning were relied on in previous authorities to conclude that it was not open to a decision-maker to defer consideration of non-refoulement obligations, they should not be adopted. incorporated into The fourth path of reasoning was that error could be found on the basis that a decision-maker representations about non-refoulement obligations (or non-refoulement claims squarely arising from the materials) by deferring assessment of whether a former visa holder was owed non-refoulement obligations to a potential protection visa application65. This path failed adequately to consider Affairs [2021] FCA 845 at [96]-[111]; FAK19 [2021] FCAFC 153 at [110]-[111], 62 BCR16 v Minister for Immigration and Border Protection (2017) 248 FCR 456 at 467-468 [48]-[49]; Omar v Minister for Home Affairs [2019] FCA 279 at [43]-[46]; see also [73]; DGI19 [2019] FCA 1867 at [66]; Hernandez [2020] FCA 415 at [61]-[64]; Ali (2020) 278 FCR 627 at 663-665 [107]-[112]; FAK19 [2021] FCAFC 153 at [114], [139]-[142]; AFD21 v Minister for Home Affairs (2021) 393 ALR 398 at 411 [49], 415 [59]. See also LGLH v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2021] FCA 1529 at [120]-[125]. Ibrahim (2019) 270 FCR 12 at 32-37 [87]-[112]; DGI19 [2019] FCA 1867 at [84]; Hernandez [2020] FCA 415 at [58]-[59]; Ali (2020) 278 FCR 627 at 665-666 64 Direction 65, para 14.1(1). 65 Omar [2019] FCA 279 at [66]-[67], [77]-[78], [82]; Hernandez [2020] FCA 415 at [56], [61]-[64], [68]; Ahmed v Minister for Immigration, Citizenship and Multicultural Affairs [2020] FCA 557 at [142]-[149]; Ali (2020) 278 FCR 627 at 643-648 [45]-[49], 662-663 [101]-[103]; Minister for Immigration, Citizenship, Gordon Steward of reasoning is inconsistent with the statutory scheme set out above and, to the extent of unenacted international non-refoulement obligations, contrary to constitutional principle. To the extent that those paths of reasoning focused on decision-makers failing to properly consider the consequences, both to a former visa holder and to Australia (for example, the impact on Australia's reputation and standing in the global community), which would flow from removing a former visa holder contrary to non-refoulement obligations under international law66, they ignored the choice Parliament made about the extent to, and manner in, which Australia's international non-refoulement obligations are incorporated into the Migration Act. At least in some cases where a non-refoulement claim was raised expressly or by necessary implication, the reasoning required a decision-maker to address a number of questions: whether Australia owed the person non-refoulement obligations; whether returning the person would breach those non-refoulement obligations; the consequences of such a breach for the person; and the consequences for Australia for breaching its non-refoulement obligations67. Where a decision-maker defers assessment of a person's claim to non-refoulement, none of those questions are required to be asked or answered68. The fifth path of reasoning was that error could be found on the basis that a decision-maker misunderstood the likely course of decision-making under the Migration Act because that non-refoulement obligations would necessarily be considered in the protection the decision-maker erroneously assumed Migrant Services and Multicultural Affairs v CTB19 (2020) 280 FCR 178 at 190-192 [29]-[39]; LGLH [2021] FCA 1529 at [112]-[117]. 66 See, eg, Hernandez [2020] FCA 415 at [63]; BHL19 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (2020) 277 FCR 420 at 463 [224]; Ali (2020) 278 FCR 627 at 660 [91], 662 [99], [101], 663 [103], 665-666 [115], [117]; FAK19 [2021] FCAFC 153 at [124], [156]-[159]; LGLH [2021] FCA 1529 at [112]. See also Hands (2018) 267 FCR 628 at 630 [3]; Omar [2019] FCA 67 See LGLH [2021] FCA 1529 at [112]; see also [113]-[116]. See also Ali (2020) 278 FCR 627 at 662 [99], 663 [103], 665-666 [115], [117]; FAK19 [2021] FCAFC 153 68 cf PKZM [2021] FCA 845 at [72]-[80]; see also [81], [86], [88]. Gordon Steward visa process69. Incrementally, that path of reasoning has been addressed by Direction 75 from 6 September 201770 and, from 25 May 2021, by s 36A of the Migration Act71. In considering a valid application for a protection visa, decision-makers must assess whether the refugee and complementary protection criteria are met before considering any other criteria72. Plaintiff M1/2021 The Delegate was required to read, identify, understand and evaluate the plaintiff's representations. The Delegate's reasons record that they did so. The Delegate accurately identified that the plaintiff's representations raised a potential breach of Australia's non-refoulement obligations but said that it was unnecessary to determine whether non-refoulement obligations were owed in respect of him because he was able to make an application for a protection visa, "in which case the existence or otherwise of non-refoulement obligations would be fully considered in the course of processing that application". The Delegate decided not to bring the plaintiff's representations in relation to non-refoulement to account (in the sense of giving weight to them and balancing them against other factors) in making the Non-Revocation Decision, reasoning that a protection visa application was "the key mechanism provided for by the [Migration Act] 69 BCR16 (2017) 248 FCR 456 at 470 [62], 471-472 [66]-[68]; see also 467-469 [42]-[52]; ALN17 v Minister for Immigration and Border Protection [2017] FCA 726 at [14]-[27]; Steyn v Minister for Immigration and Border Protection [2017] FCA 1131 at [11]-[16], [19]-[20]; Ibrahim v Minister for Immigration and Border Protection [No 2] (2017) 256 FCR 50 at 60-61 [41]-[47]; Minister for Immigration and Border Protection v BHA17 (2018) 260 FCR 523 at 549-550 [84]-[91]; DDN17 v Minister for Immigration and Border Protection [2018] FCA 1126 at [16]-[40]; FKP18 v Minister for Immigration and Border Protection [2018] FCA 1555 at [25]-[36]; Hamidy v Minister for Immigration and Border Protection (2019) 164 ALD 149 at 154 [25]; FAK19 [2021] FCAFC 153 at [129]-[138]. 70 Direction 75 requires that protection claims must be considered before any character or security concerns. 71 The Migration Amendment (Clarifying International Obligations for Removal) Act, s 3 read with Sch 1, item 1 inserted s 36A into the Migration Act. 72 Migration Act, s 36A (as currently in force). Gordon Steward for considering claims by a non-citizen that they would suffer harm if returned to their home country". That approach was not inevitable, but it was not erroneous. Contrary to the plaintiff's submissions, the Delegate's reasons do not reflect a misunderstanding of the operation of the Migration Act. For the reasons explained above, the Delegate was not required to determine whether the plaintiff was owed non-refoulement obligations (by conducting an assessment of the merits of the plaintiff's claim) in the same manner, or to the same extent, as would be called for by a direct application of the international instruments to which Australia is a party or by reference to the domestic implementation of those obligations. The Court is not "astute to discern error" in the reasons of an administrative decision-maker73. The Delegate's reasons convey that the Delegate had read and understood the plaintiff's claim and proceeded on the basis that non-refoulement obligations could be assessed to an extent and in a manner that they considered appropriate and sufficient to deal with the claim, namely in accordance with the specific mechanism chosen by Parliament for responding to protection claims in the form of protection visa applications. That provided a reasonable and to potential non-refoulement rational justification for not giving weight obligations as "another reason" for revoking the Cancellation Decision. Consequently, the Delegate did not fail to exercise the jurisdiction conferred by s 501CA(4) of the Migration Act or deny the plaintiff procedural fairness. Where the cancelled visa is not a protection visa and a decision-maker defers assessment of whether non-refoulement obligations are owed to permit a former visa holder to avail themselves of the protection visa procedures provided for in the Migration Act, it nevertheless may be necessary for the decision-maker to take account of the alleged facts underpinning that claim where those facts are relied upon by a former visa holder in support of there being "another reason" why the Cancellation Decision should be revoked74. 73 Plaintiff M64 (2015) 258 CLR 173 at 185 [25], citing Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 271-272, 278, 282. 74 See DOB18 v Minister for Home Affairs (2019) 269 FCR 636 at 681 [185]; Omar (2019) 272 FCR 589 at 607 [39]; GBV18 v Minister for Home Affairs (2020) 274 FCR 202 at 223 [45]; DCC18 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2020] FCA 395 at [38], citing Ezegbe v Minister for Immigration and Border Protection (2019) 164 ALD 139 at 147 [36]; AFD21 (2021) 393 ALR 398 at 413 [55]. Gordon Steward Here, the reasons record the Delegate's consideration of the issues of fact presented by the plaintiff's non-refoulement claims. The Delegate stated that they had considered the plaintiff's "claims of harm upon return to [South] Sudan outside the concept of non-refoulement and the international obligations framework" and that they accepted that, "regardless of whether [the plaintiff's] claims [were] such as to engage non-refoulement obligations, [the plaintiff] would face hardship arising from tribal conflicts were he to return to [South] Sudan". The harm, which formed the basis of his non-refoulement claims, was that if he was returned to South Sudan he faced persecution, torture and death. In concluding that they were not satisfied that there was another reason to revoke the Cancellation Decision, the Delegate stated that they had "considered all relevant matters including ... an assessment of the representations received in relation to the invitation for the purposes of s 501CA(4)(a)". The Delegate concluded that the plaintiff represented an unacceptable risk of harm to the Australian community and that the protection of the Australian community outweighed both the interests of his children and "other countervailing considerations", which would include the hardship identified by the Delegate. Given the answers to questions 1, 2 and 3 of the questions of law stated in the Special Case, it would be futile to grant the plaintiff the extension of time he would need to bring the proceeding. Answers For those reasons, the questions of law stated in the Special Case filed on 28 April 2021 should be answered as follows: In deciding whether there was another reason to revoke the Cancellation Decision pursuant to s 501CA(4)(b)(ii) of the Migration Act 1958 (Cth), was the Delegate required to consider the plaintiff's representations made in response to the invitation issued to him pursuant to s 501CA(3)(b) of the Migration Act, which raised a potential breach of Australia's international non-refoulement obligations, where the plaintiff remained free to apply for a protection visa under the Migration Act? Answer: In deciding whether there was "another reason" to revoke the Cancellation Decision pursuant to s 501CA(4)(b)(ii) of the Migration Act 1958 (Cth), where the plaintiff remained free to apply for a protection visa under the Migration Act: Gordon Steward the Delegate was required to read, identify, understand and evaluate the plaintiff's representations made in response to the invitation issued to him under s 501CA(3)(b) that raised a potential breach of Australia's international non-refoulement obligations; (2) Australia's international non-refoulement obligations unenacted in Australia were not a mandatory relevant consideration; and to the extent Australia's international non-refoulement obligations are given effect in the Migration Act, one available outcome for the Delegate was to defer assessment of whether the plaintiff was owed those non-refoulement obligations on the basis that it was open to the plaintiff to apply for a protection visa under the Migration Act. In making the Non-Revocation Decision: did the Delegate fail to exercise the jurisdiction conferred by s 501CA(4) of the Migration Act? did the Delegate deny the plaintiff procedural fairness? did the Delegate misunderstand the Migration Act and its operation? Answer: (a) No. (b) No. (c) No. Is the Non-Revocation Decision affected by jurisdictional error? Answer: Does not arise. Should the period of time fixed by s 486A(1) of the Migration Act and rr 25.02.1 and 25.02.2 of the High Court Rules 2004 Gordon Steward (Cth) within which to make the Application be extended to 5 January 2021? Answer: What, if any relief, should be granted? Answer: None. Who should pay the costs of, and incidental to, the Special Case? Answer: The plaintiff. I agree with the answers proposed by Kiefel CJ, Keane, Gordon and Steward JJ to Questions (2) to (6). Without disagreeing with their reasoning in support of the answer proposed by them to Question (1), I prefer to respond: "Inappropriate to answer". The question is inappropriate to answer because it is in a form inappropriate to be asked. The question is inappropriate to be asked because it is unduly abstract and because it is cast in contentious and ambiguous language. The consequence is that to answer the question requires elaboration of legal principle at a level of generality more appropriate to be included in reasons for judgment, one purpose of which is to guide legal analysis in similar cases through the outworking of the doctrine of precedent, than to be included in a judicial order, the sole purpose of which is to bind the parties in the resolution of the case at hand. This Court has recently emphasised that the function performed in answering a question of law stated by parties in a special case is "not advisory but adjudicative"75 and that performance of the function, like the performance of any adjudicative function performed in an adversarial context, "proceeds best when it proceeds if, and no further than is, warranted to determine a legal right or legal liability in controversy"76. Unlike a question of law framed by an applicant for special leave to appeal with a view to highlighting its "public importance, whether because of its general application or otherwise"77, a question of law stated by parties who choose to agree a special case must be framed with a view to obtaining by its answer the judicial determination of a legal right or legal obligation as a step in resolving the justiciable controversy between them. The question should be directed to the specific legal right or legal obligation and should be cast in succinct, unambiguous and uncontentious language. To reflect the principal ground on which the plaintiff seeks a constitutional writ of mandamus, Question (1) would be appropriately framed by asking: "Was the Delegate obliged by s 501CA(4)(b)(ii) of the Migration Act 1958 (Cth) to form an opinion on the correctness of the plaintiff's representations to the effect that his removal to South Sudan would be contrary to international non-refoulement obligations owed by Australia in respect of him?". For the reasons given by 75 Mineralogy Pty Ltd v Western Australia (2021) 95 ALJR 832 at 846 [58]; 393 ALR 76 Clubb v Edwards (2019) 267 CLR 171 at 217 [137], quoted in Mineralogy Pty Ltd v Western Australia (2021) 95 ALJR 832 at 846 [58]; 393 ALR 551 at 566. 77 See s 35A(a)(i) of the Judiciary Act 1903 (Cth). See also Smith Kline & French Laboratories (Aust) Ltd v The Commonwealth (1991) 173 CLR 194 at 218. Kiefel CJ, Keane, Gordon and Steward JJ, the answer appropriate to be given by judicial order would then be "No". Edelman A sentence of death "Sending me back to South Sudan is sentencing me to the same fate as my father ... I will either get killed, or persecuted then killed, or tortured then killed." These representations were made by the plaintiff, and reiterated again and again, to a delegate of the Minister for Home Affairs in seeking to have his refugee and humanitarian visa cancellation revoked. There is no dispute about the factual accuracy of the representations: a later delegate concluded that on return to South Sudan, the plaintiff would face "a real risk of being extorted, kidnapped and potentially killed". The plaintiff made these representations with an understanding that "due to 'non-refoulement' obligations, [he] didn't think it was possible to force [him] back to South Sudan". That understanding was wrong. But the plaintiff was entitled to a reasonable consideration by the Minister of his representations as a whole. The Minister's duty to consider the plaintiff's representations as a whole might be described as a duty related to process rather than to outcome. But process-related powers and duties must be exercised or performed reasonably just as outcome-related powers and duties must be exercised or performed reasonably78. The failure to exercise a process-related power in a reasonable way was the gist of the plaintiff's allegation, which was described as a denial of procedural fairness in question 2b of the special case. Whilst purporting to accept this very basic implication of fair process, requiring performance of the Minister's duty in a reasonable manner, the Minister's submissions on this special case paid only lip service to it. Indeed, the Minister sought to have this Court overturn no fewer than 24 decisions of the Federal Court of Australia or the Full Court of the Federal Court of Australia, including a decision from which special leave to appeal was refused for reasons including the insufficiency of the prospects of success79. Although expressed in various ways, many of those decisions involve little more than an application of this basic implication, which is based in reasonable expectations of treatment with respect for human dignity. The underlying theme of those decisions is that reasonable and fair process matters. Sometimes, as in this case, it could be a matter of life or death. The plaintiff was denied due process by the delegate, who concluded, under s 501CA(4)(b)(ii) of the Migration Act 1958 (Cth), that there was not "another 78 ABT17 v Minister for Immigration and Border Protection (2020) 269 CLR 439 at 79 Minister for Immigration and Border Protection v BCR16 [2017] HCATrans 240. Edelman reason" why the decision to cancel the plaintiff's visa should be revoked. The delegate refused to take into account the plaintiff's representations concerning "non-refoulement obligations" on the basis that those matters would be considered in the course of processing an application for a protection visa, which was later made and refused. In refusing to take those matters into account, the delegate ignored or brushed aside the plaintiff's many representations of persecution, torture, and death. At the very most and even then, in light of the reasons of Gleeson J, with considerable generosity, the active consideration given by the delegate to those matters of life or death was no more than a passing euphemism, five words in the middle of the delegate's decision, where the delegate said that the plaintiff would suffer "hardship arising from tribal conflicts". For the reasons below, I respectfully dissent. The approach of the delegate was not a legally reasonable consideration of the plaintiff's representations as a whole. The plaintiff was entitled to have reasonable consideration given to his representations that he would be persecuted, tortured, and killed. This entitlement follows not merely as a matter of principle, based upon considerations of dignity and humanity, but also as a matter of authority. The entitlement is consistent with a long line of authority in the Federal Court, including the Full Court of the Federal Court. The Federal Court now has vast expertise and refined knowledge in the field of migration law. In relation to issues of interpretation and application of the terms and meaning of the Migration Act, which for decades now has seen refinement upon refinement by both the courts and Parliament, this Court should pause for serious thought before concluding that such a large swathe of decisions of the Federal Court should be overturned. Background The plaintiff is a citizen of the Republic of South Sudan. In 2006, at the age of 19, the plaintiff, together with other members of his family, entered Australia holding a Refugee and Humanitarian (Class XB) visa, subclass 202 (Global Special Humanitarian) ("Refugee visa"). This class of visa is distinct from a On 19 September 2017, the plaintiff was convicted of two counts of unlawful assault and sentenced to an aggregate term of 12 months' imprisonment. The plaintiff had previously been imprisoned on several occasions with the longest term being six months' imprisonment. In September 2018, the plaintiff completed the custodial term of his sentence and was transferred to immigration detention. As a consequence of the plaintiff's sentence of 12 months' imprisonment, a delegate of the Minister cancelled the plaintiff's Refugee visa, as was required by s 501(3A) of the Migration Act. On 27 October 2017, the Minister sent the plaintiff 80 Migration Act 1958 (Cth), s 35A. Edelman written notice of this decision and, pursuant to s 501CA(3)(b), invited the plaintiff to make representations to the Minister on a Revocation Request Form within 28 days about revocation of the cancellation decision, together with any additional information that the plaintiff wished to provide, including subsequently to the 28-day period, before a decision about revocation was made. In a Revocation Request Form dated 3 November 2017, with the assistance of another prisoner, the plaintiff made representations to the Minister about revocation of the cancellation decision. Consistently with the Minister's invitation, the plaintiff made further representations, including a number of months later, on 10 May 2018. As the delegate of the Minister explained, the plaintiff's representations could "reasonably be summarised as follows: He has been in Australia for 12 years. He has two minor children for who[m] he would like to be a role model and to bring up; he wants to make sure they don't repeat the same mistakes he has made. His family will be devastated if he is removed. He will not re-offend. He is ashamed of his mistakes and he has learn[ed] [that] alcohol is not the effective way to cope with stress. He has done courses and will adopt different strategies to cope with stress. He will have no direct contact with his former partner, the victim of much of his offending. He will be killed if he returns to South Sudan because of his ... ethnicity." The last of these matters in the delegate's summary was a theme that was repeated again, again, and again in the plaintiff's representations. He wrote of "sending me to a premature death". He said that "[s]ending me back to South Sudan is sentencing me to the same fate as my father", who was killed. He said: "I might be tortured before being killed by [another tribe] or ISIS in an attempt to extract any possibly useful information I might have. They won't know I know nothing of use to them until after they've tortured me, but I fear that ISIS might try to use my capture to pressure my family in Australia, either for money, or maybe for something much worse." Later, in a passage substantially repeated on a further two occasions in the course of the plaintiff's representations, he added: Edelman "We left South Sudan as refugees because ... we were being hunted by [a] much larger and more powerful ... tribe, and because my father was amongst the first of us to be killed we had no protection whatsoever. [That other tribe], already a brutal people, are now the majority tribe in that region, and as such has political and military dominance, which makes it very dangerous to be [another] ... tribesperson in South Sudan. Despite having left South Sudan as a child, the tribe I was born into will still be the primary defining characteristic that I'd be judged by, and forcing me to return without any political or military alliances, affiliations or aspirations is exactly the same as sentencing me to death. To further complicate the matter I understand that more recently ISIS has been active in the region, having aligned many of its local interests with the [other tribe] in its efforts to gain further support, and in doing so has decimated much of my homeland, and most of my people. ... I've little doubt that sending me to a premature death would leave my entire family devastated." Still later, when reiterating the sentence of death that would be the effect of refouling him, as a member of his particular tribe, to South Sudan, the plaintiff said, "I will either get killed, or persecuted then killed, or tortured then killed". On a further occasion, when repeating, again, the "sentence of death" that he would face upon refoulement to South Sudan, the plaintiff added that "because my father was amongst the first of us to be killed we had no protection whatsoever". And, still later, he added that "I've no doubt that sending me to a premature death would no doubt leave my entire family devastated". He again later pleaded that: "Sending me back to South Sudan is sentencing me to the same fate as my father, and no doubt my entire family would be devastated ... I will either get killed, or persecuted then killed, or tortured then killed." On 10 May 2018, the plaintiff supplemented his representations with further representations in a letter which responded to a letter that he said he had received from the Australian Border Force. The plaintiff said that "due to 'non-refoulement obligations', I didn't think it was possible to force me back to South Sudan". He added: "I spoke to my mother last night, and she tells me that the situation in regards to my tribe ... remains fundamentally unchanged to the killing since we fled there just over 20 year[s] ago ... I had to leave there, along with the rest of my family, because our lives were in danger, and I don't understand why you would want to send me to my death?" Edelman On 9 August 2018, the delegate determined that the visa cancellation should not be revoked. About one month later, again with the assistance of another prisoner, the plaintiff applied for a protection visa. Two years later, on 21 September 2020, the plaintiff's protection visa application was refused by a delegate of the Minister. The delegate made findings including the following: "the perpetrators specified by the applicant do commit large-scale human rights abuses, including killings and torture, against those whom they consider their tribal or political enemies"; the plaintiff would be "targeted by non-state actors because he is perceived to be wealthy and/or an outsider"; and, since the plaintiff "is identifiable as a [member of his tribe], he is unlikely to be able to access protection from [other] groups". In a finding which was repeated twice, the delegate concluded that there is a real chance that the plaintiff would be "forced into destitution, extorted, kidnapped, and possibl[y] killed". Despite making the findings above about the real risk to the plaintiff of destitution, extortion, kidnapping, and possible death upon return to South Sudan, the delegate refused the plaintiff a protection visa due to ss 36(1C)(b) and 36(2C)(b)(ii) of the Migration Act. Those provisions qualify the availability of a protection visa on various grounds if the Minister considers, on reasonable grounds, that the applicant, having been convicted of a particularly serious crime, is a danger to the Australian community. The delegate considered that the application of either of those provisions would have been sufficient to require the refusal of a grant of a protection visa. the plaintiff No issue was raised in this Court concerning the operation of s 36(2C)(b)(ii), which neither permits nor requires the Minister to refuse a s 36(2)(a). protection visa where Section 36(2C)(b)(ii) permits refusal only on the ground of complementary protection (s 36(2)(aa)), for essentially the same reasons concerning conviction of a particularly serious crime and being a danger to the Australian community. By contrast, s 36(1C)(b) provides that "[a] criterion for a protection visa is that the applicant is not a person whom the Minister considers, on reasonable grounds ... having been convicted by a final judgment of a particularly serious crime, is a danger to the Australian community". refugee under is a The reasonableness condition upon consideration of representations under s 501CA(4) of the Migration Act Under s 501(3A) of the Migration Act, cancellation of a visa is mandatory if the Minister is satisfied that the person has been sentenced to a term of imprisonment of 12 months or more and therefore has a substantial criminal record, and the person is serving a sentence of imprisonment on a full-time basis Edelman in a custodial institution81. The cancellation decision under s 501(3A) can be made by a delegate of the Minister. And the cancellation decision is not subject to rules Upon cancellation of a visa, the person's status is changed from a lawful non-citizen to an unlawful non-citizen83 and, subject to circumstances which include a power to grant a "detainee visa" to the person84, or the person (whose cancelled visa under s 501(3A) was other than a protection visa) making an application for a protection visa85, or pending consideration of representations by the person about revocation of the cancellation decision86, they must be detained in immigration detention and removed from Australia as soon as practicable87. Section 501CA makes provision for revocation of the original cancellation decision under s 501(3A). As soon as practicable after making the cancellation decision, the Minister must give the person a written notice setting out the cancellation decision, and must invite the person to make representations to the Minister about revocation of the decision88. Section 501CA(4) of the Migration Act empowers the Minister to revoke the original decision cancelling a visa. It provides: "The Minister may revoke the original decision if: the person makes representations in accordance with the invitation; and the Minister is satisfied: 81 Migration Act, ss 501(3A), 501(6)-501(7). 82 Migration Act, s 501(5). 83 Migration Act, ss 13-15. 84 Migration Act, s 195A. 85 Migration Act, ss 501E(1)-501E(2). 86 Migration Act, s 501CA(4)(a). 87 Migration Act, ss 189, 193(1)(a)(iv), 198(2A). 88 Migration Act, s 501CA(3). Edelman that the person passes the character test (as defined by section 501); or that there is another reason why the original decision should be revoked." Under s 501G(1)(e), the Minister is required to provide reasons for a decision not to revoke a decision to cancel a visa. Section 501CA(4)(b) has two limbs, each permitting revocation of a cancellation decision. The first limb, which must be considered first, requires the satisfaction of the Minister that the person passes the character test (as defined by ss 501(6)-501(7)). The second limb arises if the person does not pass the character test. In those circumstances, the Minister must then consider whether there is "another reason" why the cancellation decision should be revoked. The reasons that can constitute "another reason" are unlimited, other than that they must be reasons other than whether the person has passed the character test. With this small exception, s 501CA(4)(b) is thus an example of a provision that does not expressly confine the matters which the decision-maker can take into account89. The Minister was therefore correct to disclaim any submission that it was not open for the decision-maker to take into account non-refoulement considerations, such as treaty obligations, when considering the second limb of s 501CA(4)(b). The effect of the conjunction "and" between ss 501CA(4)(a) and 501CA(4)(b) is that the satisfaction of the Minister must be formed by having regard to the representations made by the person. In other words, the Minister has a duty to consider the representations as a whole. But as Robertson J observed in Goundar v Minister for Immigration and Border Protection90, and as has been reiterated many times since91, although the Minister's duty to consider the representations means that the representations, as a whole, are a mandatory relevant consideration, the same is not necessarily true of "any particular statement in the representations". 89 Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 40. (2016) 160 ALD 123 at 133 [56]. 91 Minister for Immigration and Border Protection v BHA17 (2018) 260 FCR 523 at 562 [139]; Viane v Minister for Immigration and Border Protection (2018) 263 FCR 531 at 546-547 [70]-[72]; Minister for Home Affairs v Buadromo (2018) 267 FCR 320 at 331-332 [41]; Minister for Home Affairs v Omar (2019) 272 FCR 589 at 603 Edelman Whilst it is not the case that every representation made by an applicant is a mandatory relevant consideration for the delegate who makes a decision under s 501CA(4), the delegate's duty to take into account the representations as a whole is not entirely at large. Like the exercise of a power that is not subject to an express constraint92, a duty cannot be performed in bad faith or outside the scope of the statutory purposes93. Further, the duty to take into account the representations as a whole will not be satisfied by any erroneous, cursory, or perfunctory consideration of the representations as a whole. The conferral of this duty upon the Minister, as is common with other statutory powers and duties, carries with it the "usual implication"94 that the power will be exercised, or the duty performed, in a reasonable manner95. The existence and content of the implied requirement of reasonableness will depend upon the nature, terms, and context of the power or duty. The inference to be drawn as to the existence of that implication arises as a matter of ordinary language, although, unless the language reveals otherwise, the reasonable reader of legislation must take into account the expectation of basic values that underlie the common law. Some of those basic values have been expressed as individual self-realisation, good administration, electoral legitimacy, and decisional autonomy96. The basic values inform the presuppositions of the common law and the usual implications, by implicatures conditioning the exercise of statutory 92 Victorian Railways Commissioners v McCartney and Nicholson (1935) 52 CLR 383 at 391; R v Trebilco; Ex parte F S Falkiner & Sons Ltd (1936) 56 CLR 20 at 32; Swan Hill Corporation v Bradbury (1937) 56 CLR 746 at 757-758; Water Conservation and Irrigation Commission (NSW) v Browning (1947) 74 CLR 492 at 93 Walton v Gardiner (1993) 177 CLR 378 at 409; Walton v ACN 004 410 833 Ltd (formerly Arrium Ltd) (In liq) (2022) 96 ALJR 166 at 193-194 [135]-[137]; 399 ALR 1 at 35. 94 Minister for Home Affairs v DUA16 (2020) 95 ALJR 54 at 61 [27]; 385 ALR 212 at 95 See, eg, Minister for Immigration and Multicultural Affairs v Jia Legeng (2001) 205 CLR 507 at 532 [73]; Minister for Immigration and Citizenship v SZMDS (2010) 240 CLR 611 at 623 [33], 625 [40]-[42]; Minister for Immigration and Citizenship v Li (2013) 249 CLR 332 at 362 [63]; Plaintiff M174/2016 v Minister for Immigration and Border Protection (2018) 264 CLR 217 at 227 [21], 245 [86], 249 [97]; ABT17 v Minister for Immigration and Border Protection (2020) 269 CLR 439 96 Daly, Understanding Administrative Law in the Common Law World (2021) at 14. Edelman powers and performance of statutory duties, such as conditions of reasonableness97. In relation to s 501CA(4), the implication of the usual condition of reasonableness as a requirement for the manner of performance of the Minister's duty is further reinforced by the circumstance that cancellation of the visa of a non-citizen under s 501(3A) is a matter to which, as the heading provides, "natural justice does not apply". Hence, the only opportunity provided by the Migration Act for a non-citizen to have representations about the cancellation of their visa considered by the Minister is under s 501CA(4). The importance of this opportunity, combined with the potentially devastating consequences of the decision, reinforces the importance of the implication of reasonableness in the manner of performance of the duty. Of course, in assessing whether consideration has been undertaken reasonably, it is necessary to have regard to the particular circumstances of every case, including the relevance, importance, and clarity of the representations made98. Ultimately, therefore, the Minister was correct to accept in oral submissions that the obligation in s 501CA(4) upon the Minister or the delegate to consider the plaintiff's representations as a whole was an obligation that was required to be performed reasonably. Many of the 24 decisions of the Federal Court which the Minister sought to have this Court overturn involved little more than the application of this basic condition of reasonableness in consideration by the Minister under s 501CA(4) of a non-citizen's representations. It is unnecessary to consider all of those decisions. Unsurprisingly, the application of a condition of reasonableness will require close consideration of the facts and circumstances involved. One example suffices to illustrate the point. In Minister Immigration, Citizenship, Migrant Services and Multicultural Affairs v FAK1999, one of the two appeals heard by the Full Court of the Federal Court involved the circumstance, like that in the plaintiff's case now for 97 MZAPC v Minister for Immigration and Border Protection (2021) 95 ALJR 441 at 478-479 [166]-[169]; 390 ALR 590 at 632-633. 98 Tickner v Chapman (1995) 57 FCR 451 at 462-463; Singh v Minister for Immigration and Multicultural Affairs (2001) 109 FCR 152 at 164-165 [59]. See also Dranichnikov v Minister for Immigration and Multicultural Affairs (2003) 77 ALJR 1088 at 1092 [24], 1102 [95]; 197 ALR 389 at 394, 408; CRI026 v Republic of Nauru (2018) 92 ALJR 529 at 544-545 [66]; 355 ALR 216 at 234. [2021] FCAFC 153. Edelman before this Court, of mandatory cancellation of the visa of the appellant, FAK19, under s 501(3A). Upon review by the Administrative Appeals Tribunal, constituted by two members who disagreed, with the decision of the presiding member therefore prevailing100, the Tribunal affirmed a decision not to revoke the cancellation. In the Federal Court, the primary judge, and the unanimous Full Court (Kerr and Mortimer JJ, with whom Allsop CJ agreed), held that the Tribunal had made a jurisdictional error by excluding from its consideration the effect of the cancellation of the plaintiff's visa on Australia's international non-refoulement obligations101. This issue had been the subject of "a lengthy discussion between the Tribunal and counsel for both FAK19 and the Minister"102. Although the nature of this jurisdictional error was characterised in various ways by Kerr and Mortimer JJ, it is relevant that their Honours endorsed a statement that there is "a statutory obligation on the Minister to engage, in an active intellectual sense with the representations"103. Many other decisions of the Federal Court have expressed the obligation on a delegate of the Minister under s 501CA(4) to consider reasonably the representations as a whole as requiring that the Minister "engage in an active intellectual process" with the applicant's significant and clearly expressed representations104. The source of this description of an "intellectual process" may be the decision in 1995 in Tickner v Chapman105, in which each of Black CJ106, Burchett J107, and Kiefel J108 spoke of the "intellectual process" required by the 100 Administrative Appeals Tribunal Act 1975 (Cth), s 42(2). 101 [2020] FCA 1124 at [60]; [2021] FCAFC 153 at [156]-[159]. 102 [2021] FCAFC 153 at [161]. 103 [2021] FCAFC 153 at [76], citing Minister for Home Affairs v Omar (2019) 272 FCR 589 at 604-607 [35]-[37] and the authorities cited therein. 104 Minister for Home Affairs v Omar (2019) 272 FCR 589 at 606 [36(d)]; MQGT v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (2020) 282 FCR 285 at 292 [20]; Ali v Minister for Home Affairs (2020) 278 FCR 105 (1995) 57 FCR 451. 106 (1995) 57 FCR 451 at 462. 107 (1995) 57 FCR 451 at 476. 108 (1995) 57 FCR 451 at 495. Edelman statutory requirement to "consider" in s 10(1)(c) of the Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (Cth). The use of expressions such as engagement in an "active intellectual process" with the applicant's significant and clearly expressed representations is simply an application of the implied requirement that the Minister's duty to consider representations be performed in a reasonable way. Whether or not the approach of the presiding member of the Tribunal in FAK19 was unreasonable involved an assessment of the nature and consequences of the approach that was taken by the presiding member. There is no occasion to revisit in this case whether that approach was unreasonable. As will be explained below, this is because the extent of any unreasonableness in FAK19 pales almost into insignificance in comparison with the enormity of the unreasonableness of the approach taken by the delegate in this case. The decision of this Court in Applicant S270/2019 The Minister submitted that the decision of this Court in Applicant S270/2019 v Minister for Immigration and Border Protection109 precluded the possibility of any implied obligation in s 501CA(4) of the Migration Act having the effect of requiring the Minister or delegate to take particular representations into account. There is no such inconsistency. In Applicant S270/2019, the issue was whether non-refoulement was required to be considered by the delegate in circumstances in which no claim for non-refoulement had been made by the applicant for revocation of a cancellation decision. This Court held that, without any such claim, non-refoulement was not a mandatory relevant consideration. The Court was not concerned with the extent of any obligation upon the delegate to consider, reasonably, representations concerning non-refoulement. The scope of reasonableness in the consideration of representations that were made is plainly a very different question from any particular obligation to consider matters that were not raised. The joint judgment of Nettle, Gordon and Edelman JJ thus said that "[i]t is unnecessary to decide, however, whether consideration of [non-refoulement] can be deferred where a non-refoulement claim is made in a revocation request"110. A footnote to the sentence quoted above directed attention as a comparison to reasoning in BCR16 v Minister for Immigration and Border Protection111. In that case, the Assistant Minister had declined to consider the representations of an 109 (2020) 94 ALJR 897; 383 ALR 194. 110 (2020) 94 ALJR 897 at 902 [34]; 383 ALR 194 at 201. 111 (2017) 248 FCR 456 at 470 [63]. Edelman applicant concerning international non-refoulement obligations on the basis that those representations would be considered if a protection visa application were made. In a paragraph of the reasons of Bromberg and Mortimer JJ in the majority, which was cited in Applicant S270/2019, their Honours said that "[t]he error could also be characterised as a failure to carry out the task required under s 501CA(4) which requires consideration of whether there is 'another reason' to revoke the visa cancellation". An application for special leave to appeal in that case was dismissed for reasons including the insufficiency of the prospects of success112. The delegate's reasons concerning the claims of persecution, torture, and death Given that the plaintiff had been sentenced to 12 months' imprisonment, the delegate was not satisfied that the plaintiff passed the character test, which is the first of the two alternative limbs of s 501CA(4)(b). The delegate thus turned to whether the second limb was satisfied, in other words whether there was "another reason" to revoke the original cancellation decision. Senior counsel for the plaintiff submitted that, in considering the second limb of s 501CA(4)(b), the delegate did not merely fail to consider legal questions of non-refoulement matters, but also failed to consider "the precise claims or basis upon which [the claim of non-refoulement was] put", which included the hardship or harm that was "wrapped up in" the non-refoulement claim. Those claims had been made clearly and repeatedly. They went to the heart of the plaintiff's representations and concerned matters of devastating consequence. The extent of the failure by the delegate had the effect that the delegate acted unreasonably in their consideration of the plaintiff's representations. That submission should be accepted. It is necessary to set out in full the consideration by the delegate of the plaintiff's representations about his persecution, torture, and death if he were sent back to South Sudan. The consideration was contained in a section of the delegate's reasons, paras 46-50, entitled "International non-refoulement obligations". The only subsequent reference back to this discussion was towards the end of the delegate's reasons, in para 60: [The plaintiff] arrived in Australia on a Class XB Subclass 202 Global Special Humanitarian visa, and as such, his circumstances may give rise to international non-refoulement obligations and I note that he submits that he does not think it is possible that he will be sent back to South Sudan because of 'non refoulement obligations'. 112 Minister for Immigration and Border Protection v BCR16 [2017] HCATrans 240. Edelman I note that [the plaintiff] states that he might be captured, tortured and killed by [another] tribe or ISIS if he returns to South Sudan. [The plaintiff] belongs to [a] ... tribe which is hunted by [a] much larger and more powerful ... tribe in South Sudan; he states that his father was killed because of the conflict. They may use his capture to pressure his family in Australia for money or something worse. He stated that sending him back would be sending him to a premature death. that is unnecessary to determine whether I consider non-refoulement obligations are owed in respect of [the plaintiff] for the purposes of the present decision as he is able to make a valid application for a Protection visa, in which case the existence or otherwise of non-refoulement obligations would be fully considered in the course of processing that application. 49. A protection visa application is the key mechanism provided for by the Act for considering claims by a non-citizen that they would suffer harm if returned to their home country. Further, I am aware that the Department's practice in processing Protection visa applications is to consider the application of protection-specific criteria before proceeding with any consideration of other criteria, including character-related criteria. To reinforce this practice, the Minister has given a direction under s 499 of the Act (Direction 75) which, among other things, requires that decision-makers who are considering an application for a Protection visa must first assess whether the refugee and complementary protection criteria are met before considering ineligibility criteria, or referring the application for consideration under s 501 of the Act. I am therefore confident that [the plaintiff] would have the opportunity to have his protection claims fully assessed in the course of an application for a Protection visa. I have also considered [the plaintiff's] claims of harm upon return to Sudan outside the concept of non-refoulement and the international obligations framework. I accept that regardless of whether [the plaintiff's] claims are such as to engage non-refoulement obligations, [the plaintiff] would face hardship arising from tribal conflicts were he to return to Sudan. 60. While I find [the plaintiff] will not suffer any substantial language or cultural barriers returning to Sudan or South Sudan, I accept that his return will cause him some hardship." Edelman Following the section of the delegate's reasons concerning "international non-refoulement obligations", the delegate proceeded to consider the strength, nature, and duration of the plaintiff's ties to Australia and the extent of impediments that he faced if he were to be removed to South Sudan. In relation to the latter, the delegate observed: the plaintiff had no family living in South Sudan; he would not see his children and family again; and his return would cause him "some hardship", which appears to be a reference back to the hardship from tribal conflict referred to in para 50 of the delegate's reasons. All those factors were then weighed by the delegate against the serious crimes committed by the plaintiff. The delegate concluded that "[t]he Australian community should not have to accept any risk of further harm" and decided that the cancellation decision should not be revoked. Senior counsel for the plaintiff submitted that in the context of the whole of the delegate's reasons a particular meaning should be given to the delegate's remark in para 50, set out above, that consideration had been given to the plaintiff's "claims of harm upon return to Sudan outside the concept of non-refoulement and the international obligations framework". That meaning was that the plaintiff's claims of harm had been considered only to the extent that those claims of harm existed outside the concept of non-refoulement and the framework of Australia's international obligations of non-refoulement. The meaning of para 50 of the delegate's reasons is, to say the least, difficult. None of the plaintiff's claims of harm were outside the concept of non-refoulement and Australia's international obligations unless the delegate is taken to be referring only to international law rather than its implementation in domestic law. But whatever was meant by the delegate in para 50, it is plain that the delegate was not considering the plaintiff's claims of persecution, torture, and death. The only possible harm alleged by the plaintiff which, as the delegate expressed it, concerned the plaintiff's generalised claim of "hardship arising from tribal conflicts" was separate from the plaintiff's claims of persecution, torture, and death. The delegate's reference to hardship appears to have been a reference to the plaintiff's more generalised representations that South Sudan is a country with "longstanding tribal feuds" and that he was a member of a tribe which "being both peaceful and a minority simply made [them] the targets of everyone else". The delegate's reference in paras 50 and 60 of their reasons to "hardship arising from tribal conflicts", and "some hardship" on return, could not possibly be understood to encompass the plaintiff's repeated representations of persecution, torture, and death. Those perfunctory references to "hardship" comprised fewer words of the 69 substantive paragraphs in the delegate's reasons for decision than the delegate's discussion of how long the plaintiff had worked in Australia as a meat worker. The references to hardship responded in terms to a different representation by the plaintiff about hardship from generalised tribal conflict. The references cannot reasonably be understood to be considering the plaintiff's repeated and clearly expressed representations of persecution, torture, and death. Edelman Whether or not it is even possible to characterise death following torture by the extraordinary euphemism of "some hardship", this is not what the delegate can reasonably be understood to have meant. Since writing these reasons I have had the benefit of reading the reasons of Gleeson J. Her Honour interprets the delegate's reference to hardship arising from tribal conflicts as bearing no relation to the plaintiff's representations at all and as perhaps being little more than repetition of sentences from a template113. With respect, there is great force in that interpretation, for the reasons that her Honour gives. It is, however, unnecessary for me to reach a final view on whether my initial interpretation of the delegate's reasons was wrong because, on the interpretation of Gleeson J, the consideration by the delegate of the plaintiff's claims is even more unreasonable than it would be under the interpretation that I had initially preferred. That issue of unreasonableness is discussed immediately below. The unreasonableness of the consideration by the delegate The Minister submitted that the delegate considered the plaintiff's submissions about the persecution, torture, and death to which the plaintiff would be exposed on return to South Sudan. The Minister's argument was effectively that these representations were reasonably "considered" because they were read and understood by the delegate, who stated in their reasons that the plaintiff's representations and documents submitted in support of his representations had been "considered", even though that "consideration" involved reasoning that the representations should not be considered in any detail because they would be considered by another delegate if the plaintiff later brought a protection visa application, which was potentially doomed because of the character concerns that arose from the plaintiff's criminal record114. In other words, the delegate "considered" the representations by reaching a considered view not to consider them. That submission should not be accepted. The implied obligation to consider the plaintiff's representations in a reasonable way should be applied as a matter of substance, not as a matter of verbal prestidigitation. As a matter of substance, the delegate declined to engage with the heart of the plaintiff's submissions and the most powerful and clearly expressed of the plaintiff's representations, matters that were almost as grave and devastating as could be imagined and which the plaintiff had repeated again and again. 113 Reasons of Gleeson J at [111], [113]. 114 Migration Act, s 36(1C)(b). Edelman is unnecessary The Minister relied upon cl 14.1(4) of Direction 65115, made pursuant to s 499 of the Migration Act, which provides that, where a non-citizen can make an to determine whether application for another visa, "it non-refoulement obligations are owed to the non-citizen for the purposes of determining whether the cancellation of their visa should be revoked". The Minister submitted that the delegate acted consistently with that direction by declining to consider whether any non-refoulement obligations were owed to the plaintiff. It is unnecessary for the purposes of this special case to consider whether, as the plaintiff submitted, cl 14.1(4) is ultra vires in so far as it purports to remove a possible consideration from the statutory reference to "another reason" in s 501CA(4)(b)(ii). This issue is unnecessary to determine because, on any view of cl 14.1(4), it does not make it unnecessary for a delegate to consider core, clearly articulated factual claims that might give rise to non-refoulement obligations. As has been explained, that is what the delegate failed to do in this case. It can be accepted that if the plaintiff were to bring a later application for a protection visa, and if the plaintiff were to repeat the same claims in the same terms in that application, then those claims would be considered in that later protection visa application, even if it was ultimately doomed due to character considerations. A consideration of those claims would be required even in a doomed protection visa application due to Direction 75116. Direction 75 requires a delegate, in "considering elements of the Protection visa assessment for applicants who raise character or security concerns", to undertake the consideration by "first assess[ing] the applicant's refugee claims with reference to section 36(2)(a) and any complementary protection claims with reference to section 36(2)(aa) before considering any character or security concerns". But the possibility that factual representations by the plaintiff might be considered in a later protection visa application made by the plaintiff did not make it reasonable for the delegate expressly to decline to consider the heart of the plaintiff's representations when considering whether the plaintiff had raised "another reason" to revoke the original decision cancelling his visa within s 501CA(4). To the extent that the Minister asserted that the plaintiff had not discharged his onus of proof that the unreasonableness of the delegate was material, this 115 Direction No 65 β Migration Act 1958 β Direction under section 499 β Visa refusal and cancellation under s 501 and revocation of a mandatory cancellation of a visa under s 501CA. 116 Direction No 75 β Refusal of Protection visas relying on section 36(1C) and section 36(2C)(b). Edelman submission cannot be maintained. It is impossible to deny the possibility that the result of the delegate's consideration might have been different if the delegate had added to their balancing of the relevant representations the plaintiff's claims of persecution, torture, and death. Conclusion At its simplest, this special case involves little more than asking whether the consideration by the delegate of the whole of the plaintiff's representations was reasonable. In Hands v Minister for Immigration and Border Protection117, Allsop CJ, speaking of s 501 of the Migration Act, said that, "where decisions might have devastating consequences visited upon people, the obligation of real consideration of the circumstances of the people affected must be approached confronting what is being done to people". The consequences of persecution, torture, and death are the most devastating consequences that could be encountered by a person facing removal from Australia. Even with the usual strict sense in which the standard of reasonableness is applied there is no sense in which it was reasonable for the delegate to decline to engage with the plaintiff's repeated pleas not to expose him to persecution, torture, and death. A lengthy extension of time is required for this application, including an extension of 845 days under s 486A of the Migration Act. In the exceptional circumstances of this case, that extension is appropriate for four reasons. First, the merits of the plaintiff's case are strong and the issues are of considerable public importance. Secondly, the substance of the plaintiff's case concerns matters of the gravest import to him. Thirdly, the plaintiff has limited ability to read and write in English and relied heavily upon the assistance of another prisoner in the preparation of his application. In the course of receiving that assistance, a substantial part of the delay, including two years between the application and decision, was caused by the plaintiff applying for a protection visa, which was the course that the delegate's reasons had asserted to be the only manner in which the plaintiff's claims of non-refoulement could be considered. Fourthly, the Minister did not suggest any specific prejudice would arise from the grant of an extension of time. Answers to the questions stated in the special case Two points should be made about the manner in which the questions in the special case were expressed. First, question 1 was expressed broadly by the plaintiff, no doubt to ensure that it did not confine his submissions concerning the unreasonableness of the delegate's consideration of the plaintiff's representations. Those submissions were not limited to the delegate's failure to engage with Australia's international non-refoulement obligations but extended also to the 117 (2018) 267 FCR 628 at 630 [3]. Edelman failure to engage with the heart of the plaintiff's representations: that removal would result in his persecution, torture, and death. Secondly, as the plaintiff's submissions made clear, question 2b relied upon the concept of "procedural fairness" in a broad, perhaps loose, sense that also encompassed unreasonableness in the process of decision-making. The answer to that question reflects that extended sense in which procedural fairness was also relied upon. The questions in the special case should be answered as follows: Question 1: In deciding whether there was another reason to revoke the Cancellation Decision pursuant to s 501CA(4)(b)(ii) of the Migration Act 1958 (Cth), was the plaintiff's representations made in response to the invitation issued to him pursuant to s 501CA(3)(b) of the Migration Act, which raised a potential breach of Australia's international non-refoulement obligations, where the plaintiff remained free to apply for a protection visa under the Migration Act? the Delegate required to consider Answer: The delegate was required to consider reasonably the plaintiff's representations as a whole. Question 2a: In making the Non-Revocation Decision did the Delegate fail to exercise the jurisdiction conferred by s 501CA(4) of the Migration Act? Answer: No. Question 2b: In making the Non-Revocation Decision did the Delegate deny the plaintiff procedural fairness? Answer: Yes. The delegate considered the plaintiff's representations in an unreasonable manner. Question 2c: In making the Non-Revocation Decision did the Delegate misunderstand the Migration Act and its operation? Answer: Unnecessary to answer. Question 3: Is the Non-Revocation Decision affected by jurisdictional error? Answer: Yes. Question 4: Should the period of time fixed by s 486A(1) of the Migration Act and rr 25.02.1 and 25.02.2 of the High Court Rules 2004 (Cth) within which to make the Application be extended to 5 January 2021? Answer: Yes. Edelman Question 5: What, if any relief, should be granted? Answer: The relief set out in the paragraph immediately below. Question 6: Who should pay the costs of, and incidental to, the Special Case? Answer: The defendant. Orders should be made as follows: The time for filing an application for constitutional writs be extended to 5 January 2021. A writ of certiorari issue to quash the decision made on 9 August 2018 by a delegate of the defendant, purportedly pursuant to s 501CA(4) of the Migration Act 1958 (Cth), not to revoke the decision made on 27 October 2017 to cancel the plaintiff's Refugee and Humanitarian (Class XB) visa, subclass 202 (Global Special Humanitarian). A writ of mandamus issue to compel the defendant to exercise the power under s 501CA(4) of the Migration Act according to law. The defendant pay the plaintiff's costs. Gleeson 102 GLEESON J. The relevant facts and relevant portions of the delegate's decision record are stated in the reasons of Kiefel CJ, Keane, Gordon and Steward JJ, and In his application the plaintiff identified, as the matter that the delegate failed to consider, "that his removal to South Sudan would be contrary to international non-refoulement obligations owed to him". In the Special Case, the first question of law identified by the parties concerned whether the delegate was required to consider that aspect of the plaintiff's representations made in response to the invitation issued under s 501CA(3)(b) of the Migration Act 1958 (Cth) "which raised a potential breach of Australia's international non-refoulement obligations". In general terms, an international non-refoulement obligation is an obligation, arising under an international convention to which Australia is a party, not to forcibly return, deport or expel a person to a place where they will be at risk of a specific type of harm118. It is necessary to look at the representations to see how they "raised a potential breach". In the representations, the plaintiff claimed that he faced persecution, torture and death, at the hands of another tribe or ISIS, if he was returned to South Sudan by reason of membership of his tribe ("the relevant claims"). As Edelman J illustrates, the plaintiff made his claims in stark terms that comprised death by killing as a certainty and persecution or torture as possibilities. Thus, the plaintiff "raised a potential breach of Australia's international non- refoulement obligations" principally, if not solely, by claiming that he would suffer serious and lethal harm if forcibly returned to his home country. The plaintiff asked the delegate to confront what he claimed would be the devastating consequences visited upon him in South Sudan if the cancellation of his visa was not revoked119. Separately, the plaintiff stated that "due to 'non-refoulement' obligations, I didn't think it was possible to force me back to South Sudan". The delegate was required to consider the plaintiff's representations in order to decide whether there was "another reason" why the decision to cancel the plaintiff's visa should be revoked. This entailed engaging with any substantial and clearly articulated argument contained in the plaintiff's representations that there was "another reason" why the cancellation of the plaintiff's visa should be 118 cf Direction 65, para 14.1. 119 cf Hands v Minister for Immigration and Border Protection (2018) 267 FCR 628 at Gleeson revoked120. Failure to consider such an argument is at least a denial of procedural fairness and may also constitute a constructive failure to exercise jurisdiction121. As Edelman J observes122, the reasons that can constitute "another reason" are not confined by the terms of s 501CA except that they must be reasons other than whether the person whose visa has been cancelled has passed the character test. Direction 65, followed by the delegate in accordance with s 499(2A) of the Migration Act, recognised international non-refoulement that Australia's obligations may be a reason why a decision to cancel a visa should be revoked123. As to possible consequences for the former visa holder in the event that non- refoulement obligations are found to be owed, Direction 65 stated that Australia would not remove a non-citizen, as a consequence of the cancellation of their visa, to the country in respect of which the non-refoulement obligations exist124. On this basis, the Direction stated, the existence of a non-refoulement obligation did not preclude non-revocation of the mandatory cancellation of a non-citizen's visa. The Direction added that the consequence of non-revocation of a visa cancellation may be the prospect of indefinite detention "[g]iven that Australia will not return a person to their country of origin if to do so would be inconsistent with its international non-refoulement obligations"125. The delegate did not record any finding as to the likely or possible consequences to the plaintiff of non-revocation of the visa cancellation. However, the delegate made findings about the impediments that the plaintiff would face if removed to South Sudan, concluding that "his return will cause him some hardship". The delegate did not identify any other possible consequence for the plaintiff apart from removal from Australia, consistent with s 197C of the 120 Dranichnikov v Minister for Immigration and Multicultural Affairs (2003) 77 ALJR 1088 at 1092 [24]; 197 ALR 389 at 394; Minister for Immigration and Citizenship v SZJSS (2010) 243 CLR 164 at 177 [35]; Minister for Immigration and Border Protection v SZMTA (2019) 264 CLR 421 at 436 [13]. 121 Dranichnikov v Minister for Immigration and Multicultural Affairs (2003) 77 ALJR 1088 at 1092 [24]-[25]; 197 ALR 389 at 394; Minister for Immigration and Border Protection v SZMTA (2019) 264 CLR 421 at 435-436 [13], 442 [35]. See also Plaintiff M61/2010E v The Commonwealth (2010) 243 CLR 319 at 356 [90]. 122 Reasons of Edelman J at [70]. 123 Direction 65, para 14(1). 124 Direction 65, para 14.1(2). 125 Direction 65, para 14.1(6). Gleeson Migration Act, which expressly provided that non-refoulement obligations are irrelevant when considering the power to remove an unlawful non-citizen, and that the duty to remove arises irrespective of whether there has been an assessment of such obligations. These aspects of the delegate's decision indicate that the delegate approached the question of whether there was "another reason" for revoking the visa cancellation upon the basis that the plaintiff's removal to South Sudan was a likely or possible consequence of non-revocation of the visa cancellation. In that context, the relevant claims constituted a substantial and clearly articulated argument that another reason why the cancellation of the plaintiff's visa should be revoked was to avoid serious harm to the plaintiff, including torture and death, if he were returned to South Sudan. Unlike Kiefel CJ, Keane, Gordon and Steward JJ (with whom Gageler J agrees), I am unable to accept that the delegate's reasons record, beyond assertion, adequate consideration of the issues of fact presented by the plaintiff's non- refoulement claims. Such consideration would be "proper, genuine and realistic" consideration126, addressing the merits of the factual basis for the relevant claims or, in other words, an "active intellectual process"127 of evaluating those issues of fact to the extent necessary to decide whether the plaintiff identified "another reason" why the cancellation of his visa should be revoked. The relevant passage of the decision record is set out in Edelman J's reasons128. The passage commences by acknowledging that the plaintiff's circumstances may give rise to international non-refoulement obligations and noting that the plaintiff adverted to that matter in his representations. Next, the delegate misstates the gist of the plaintiff's claims concerning the consequences if he is returned to South Sudan by recording a claim that the plaintiff "might" be captured, tortured and killed, when the plaintiff represented that death was a certainty. Next, the delegate explains why they consider it to be unnecessary to determine whether non-refoulement obligations are owed in respect of the plaintiff. The reasons include that a protection visa application is "the key mechanism provided for by the Act for considering claims by a non-citizen that they would suffer harm if returned to their home country" and that the plaintiff 126 Khan v Minister for Immigration and Ethnic Affairs (unreported, Federal Court of Australia, 11 December 1987) at 11; NAIS v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 228 CLR 470 at 482-483 [37]; Azriel v NSW Land & Housing Corporation [2006] NSWCA 372 at [51]; Swift v SAS Trustee Corporation (2010) 6 ASTLR 339 at 342 [1], 351-352 [45]; Bondelmonte v Bondelmonte (2017) 259 CLR 662 at 675 [43]. 127 DVO16 v Minister for Immigration and Border Protection (2021) 95 ALJR 375 at 380 [12], 393 [77]; 388 ALR 389 at 393, 411. 128 Reasons of Edelman J at [85]. Gleeson would have "the opportunity to have his protection claims fully assessed in the course of an application for a Protection visa". To this point, there is no evidence in the decision record that the delegate engaged with the substance of the relevant claims, except that the delegate has misunderstood the claims by interpreting them as claims about possible rather than certain lethal harm. The final relevant portion of the delegate's reasons is cryptic. It is convenient to set out the relevant sentences in full: "I have also considered [the plaintiff's] claims of harm upon return to Sudan outside the concept of non-refoulement and the international obligations framework. I accept that regardless of whether [the plaintiff's] claims are such as to engage non-refoulement obligations, [the plaintiff] would face hardship arising from tribal conflicts were he to return to Sudan." Similar language appears in many decisions concerning visa cancellations around the time of the delegate's decision129. The mere fact that a decision maker appears to have used a template, or copied the language of another decision maker, is not necessarily indicative of a denial of procedural fairness or some other jurisdictional error130. Template reasons may evidence a sufficient intellectual process of genuine engagement with relevant claims or issues presented by claims in the circumstances of the particular case. However, in this instance, when considered in relation to the relevant claims, the repetition of language that may have been apt as a response to different representations does not disclose an intellectual process of the kind required to decide whether the plaintiff had identified "another reason" why the cancellation of his visa should be revoked. While the delegate evidently considered the plaintiff's claims of harm in some confined or constrained fashion ("outside the concept of non-refoulement 129 See, for example, DOB18 v Minister for Home Affairs (2019) 269 FCR 636 at 661- 662 [106]; Ibrahim v Minister for Home Affairs (2019) 270 FCR 12 at 28 [67]; Sowa v Minister for Home Affairs (2019) 369 ALR 389 at 393 [6]; GBV18 v Minister for Home Affairs [2019] FCA 1132 at [21]; EVK18 v Minister for Home Affairs (2020) 274 FCR 598 at 606 [22]; DQM18 v Minister for Home Affairs (2020) 278 FCR 529 at 540-541 [43]; Ali v Minister for Home Affairs (2020) 278 FCR 627 at 631-632 130 Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 266; Minister for Immigration and Citizenship v SZLSP (2010) 187 FCR 362 at 367 [10]; MZZZW v Minister for Immigration and Border Protection (2015) 234 FCR 154 at 172-173 [66]; Hands v Minister for Immigration and Border Protection (2018) 267 FCR 628 at 630 [3]; Ali v Minister for Home Affairs (2020) 278 FCR Gleeson and the international obligations framework"), the decision record reveals nothing about the intellectual process applied by the decision maker to those claims. I do not understand the plaintiff to have made any claims to which that concept and that framework would not apply. In this regard, I respectfully disagree with Edelman J that the plaintiff made a generalised claim of hardship arising from tribal conflicts. Addressing a question about factors that may help to explain the plaintiff's offending, the plaintiff argued that he had suffered from extreme trauma during his early childhood as a result of circumstances in his home country, which included longstanding tribal feuds and persecution of his tribe. The argument was addressed to historical circumstances and not to the consequences of removal to South Sudan. The factual finding that the plaintiff would face hardship arising from tribal conflicts were he to return to South Sudan bears no relation to the plaintiff's representations. The plaintiff said nothing about hardship: his claims were far more drastic. The decision record says nothing to explain what kind of hardship the delegate envisaged would be faced by the plaintiff. At most, this finding might be understood as a response to the delegate's mistaken appreciation of the plaintiff's claims, that the plaintiff "might be captured, tortured and killed", so that the relevant hardship might be living in fear of such an eventuality. Otherwise, the nature or degree of the accepted hardship can only be a matter of speculation. Without more, the delegate's statements that they "considered [the plaintiff's] representations" and "considered all relevant matters including ... an assessment of the [plaintiff's] representations" do not reveal the requisite evaluation of the relevant claims. The statutory task for the delegate concerned the particular visa that the plaintiff had previously held and whether there was "another reason" why the cancellation of that visa should be revoked. By failing to consider, in the sense explained above, whether the relevant claims afforded another reason why the visa cancellation should be revoked, and where a likely consequence of non-revocation was the plaintiff's removal to South Sudan, the delegate denied the plaintiff procedural fairness131. "Deferring" assessment of whether non-refoulement obligations were owed to a prospective protection visa application was no answer to the plaintiff's representations about the adverse consequences to him of non- revocation of the visa cancellation. The practical injustice suffered by the plaintiff in this case was not that he lost the opportunity of having the relevant claims considered at all. The practical injustice was that he was denied the delegate's consideration of a substantial and clearly articulated argument presented by the 131 NAIS v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 228 CLR 470 at 502-503 [104]-[105], 526 [172]; Swift v SAS Trustee Corporation (2010) 6 ASTLR 339 at 352 [47]. Gleeson plaintiff in support of revocation of the cancellation of his visa132. The loss of that opportunity could not be remedied in the course of a subsequent protection visa application, directed towards the grant of a different visa and affected by different considerations133. For the reasons given by Edelman J, the plaintiff should be granted an extension of time to make his application. Accordingly, I would answer the questions stated in the Special Case in the same terms as Edelman J except for Question 2b, which I would answer "Yes". 132 Khan v Minister for Immigration and Ethnic Affairs (unreported, Federal Court of Australia, 11 December 1987); Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1 at 13-14 [37]-[38]. 133 See particularly ss 36(1C)(b) and 36(2C)(b)(ii). |
HIGH COURT OF AUSTRALIA Matter No M61/2010 AND PLAINTIFF COMMONWEALTH OF AUSTRALIA & ORS DEFENDANTS Matter No M69/2010 PLAINTIFF M69 OF 2010 AND PLAINTIFF COMMONWEALTH OF AUSTRALIA & ORS DEFENDANTS Plaintiff M61/2010E v Commonwealth of Australia Plaintiff M69 of 2010 v Commonwealth of Australia [2010] HCA 41 11 November 2010 ORDER In each matter: Declare that, in recommending to the second defendant that the plaintiff was not a person to whom Australia has protection obligations, the third defendant made an error of law, in that the third defendant did not treat the provisions of the Migration Act 1958 (Cth) and the decisions of Australian courts as binding, and, further, failed to observe the requirements of procedural fairness. Application otherwise dismissed. First and second defendants to pay the plaintiff's costs. Representation D S Mortimer SC with R M Niall and K E Foley for the plaintiff in M61/2010 (instructed by Allens Arthur Robinson Lawyers) S G E McLeish SC with L G De Ferrari and P D Herzfeld for the plaintiff in M69/2010 (instructed by Holding Redlich) S J Gageler SC, Solicitor-General of the Commonwealth with S P Donaghue and D F O'Leary for the first and second defendants in both matters (instructed by Australian Government Solicitor) S P Donaghue for the third and fourth defendants in both matters (instructed by Australian Government Solicitor) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Plaintiff M61/2010E v Commonwealth of Australia Plaintiff M69 of 2010 v Commonwealth of Australia Administrative law β Procedural fairness β Error of law β Refugees β Migration β Offshore processing β Plaintiffs were "offshore entry persons" under Migration Act 1958 (Cth) ("Migration Act") β Plaintiffs detained under s 189(3) of Migration Act β Each claimed Australia owed him protection obligations under Refugees Convention as amended by Refugees Protocol β Each plaintiff precluded from making valid visa application unless Minister decided in public interest to allow: s 46A of Migration Act β Minister had power to grant visa in absence of valid application: s 195A of Migration Act β Each plaintiff subject to "Refugee Status Assessment" by departmental officer and subsequent "Independent Merits Review" by independent contractor β Each departmental officer and independent reviewer concluded plaintiff not a person to whom Australia had protection obligations β Powers under ss 46A and 195A "may only be exercised by the Minister personally" β Minister not under duty to consider whether to exercise power under s 46A or s 195A β Whether continuing detention lawful because assessment and review were steps taken under and for purposes of Migration Act β Whether Minister had decided to consider exercising power under s 46A or s 195A of Migration Act in every case where an offshore entry person claimed to be owed protection obligations β Whether those who conducted assessment and review bound to afford procedural fairness to plaintiffs and act according to law β Whether each review procedurally fair and undertaken in accordance with law. Constitutional law (Cth) β Validity of Commonwealth laws β Section 75(v) of Constitution β Whether s 46A of Migration Act invalid because consideration of exercise of power could not be enforced β Whether Minister's power arbitrary. High Court β Original jurisdiction β Constitutional writs and orders β Minister not bound to consider exercising powers under s 46A or s 195A of Migration Act β Whether mandamus available β Whether certiorari would have practical utility β Whether declaration would produce foreseeable consequences for the parties. Words and phrases β "Carltona principle", "excised offshore place", "Independent Merits Review", "offshore entry person", "Pacific Strategy", "Refugee Status Assessment", "unlawful non-citizen". Constitution, s 75(v). Migration Act 1958 (Cth), ss 46A, 189(3), 193(1)(c), 195A, 196(1), 198(2), Migration Amendment (Excision from Migration Zone) Act 2001 (Cth). Migration Amendment Provisions) Act 2001 (Cth). from Migration Zone) (Excision (Consequential FRENCH CJ, GUMMOW, HAYNE, HEYDON, CRENNAN, KIEFEL AND BELL JJ. The plaintiff in each of these matters entered Australian territory by entering the Territory of Christmas Island. The Territory of Christmas Island is what the Migration Act 1958 (Cth) ("the Migration Act") calls an "excised offshore place"1. Neither plaintiff is an Australian citizen. Neither held a valid visa to enter Australia. On arriving at Christmas Island, each was detained under s 189(3) of the Migration Act2. Each plaintiff is a citizen of Sri Lanka. Each arrived at Christmas Island by boat. Each claims that he is a non-citizen in Australia to whom, in the words of s 36(2)(a) of the Migration Act, "Australia has protection obligations under the Refugees Convention as amended by the Refugees Protocol"3. The Migration Act provides4 that a person who, like each of the plaintiffs, became what the Act calls "an unlawful non-citizen" by entering Australian territory at an excised offshore place, cannot make a valid application for a visa. Accordingly, although the plaintiffs claim to be non-citizens to whom Australia has protection obligations, they cannot validly apply for that class of visa known as protection visas. They therefore cannot engage those provisions of the Migration Act which would oblige the Minister to consider an application and, if satisfied that the criteria for granting the visa are met, grant the visa5. While the plaintiffs were detained, officers of the Department of Immigration and Citizenship made, in each case, what departmental documents refer to as a "Refugee Status Assessment", or "RSA", and concluded that neither plaintiff was a person to whom Australia had protection obligations. Each 2 Section 189(3) provides: "If an officer knows or reasonably suspects that a person in an excised offshore place is an unlawful non-citizen, the officer may detain the person." 3 The "Refugees Convention" means the Convention relating to the Status of Refugees done at Geneva on 28 July 1951; the "Refugees Protocol" means the Protocol relating to the Status of Refugees done at New York on 31 January 1967. s 46A(1). Crennan Bell plaintiff asked for the decision made by the relevant officer of the Department to be reviewed. What the Department calls an "Independent Merits Review", or "IMR", was undertaken by persons who were not officers of the Department, but had been engaged by a company with which the Department had contracted for the provision of such reviews. In each case, the reviewer concluded that the plaintiff was not a person to whom Australia had protection obligations. The lawfulness of the plaintiffs' detention is not in issue in these proceedings. But the plaintiffs assigned a radically different basis for the conclusion that their detention was lawful from that given by the Commonwealth and the Minister. The plaintiffs submitted that their continuing detention, while inquiries were made about their claims to be refugees, was lawful because those steps were being taken under and for the purposes of the Migration Act. By contrast, the Commonwealth and the Minister submitted that the plaintiffs were detained while inquiries having no statutory foundation, whether in the Migration Act or otherwise, were conducted and that the detention was lawful because those inquiries might, but need not, lead to an exercise of powers under the Migration Act. The resolution of this issue is critical to the outcome of the litigation. The proceedings Each plaintiff instituted proceedings in the original jurisdiction of this Court, naming the Commonwealth, the Minister, and the person who conducted the review, as defendants. Plaintiff M61 joined as the fourth defendant the departmental officer who made the original assessment; Plaintiff M69 joined the Secretary of the Department as the fourth defendant. Each plaintiff alleged, among other things, that he was not afforded procedural fairness during the original assessment or the subsequent review. Each plaintiff alleged that the persons who undertook the assessment and the relevant review made errors of law by not treating themselves as bound to apply relevant provisions of the Migration Act and what this Court and other Australian courts have held about the way in which the criterion of being a person to whom Australia owes protection obligations must be understood and applied. The plaintiff in the second matter, Plaintiff M69, further alleged that the provision of the Migration Act which precludes him from making a valid application for a protection visa (s 46A(1)), and the rest of the section of which that provision forms a part, are invalid. Crennan Bell Each plaintiff claims relief by way of injunction, certiorari and mandamus. Plaintiff M69 also claims relief by way of declaration. One of the declarations claimed by Plaintiff M69 is a declaration that s 46A of the Migration Act is invalid but these reasons will show that the challenge to the validity of s 46A should fail. In considering whether other relief claimed by the plaintiffs should be granted, attention must focus on what was done in the Independent Merits Review. What was done in the Refugee Status Assessment was overtaken by that review. These reasons will show that, in conducting a review, the reviewer was bound to afford procedural fairness to the person whose claim was being reviewed, and was bound to act according to law by applying relevant provisions of the Migration Act and decided cases. These reasons will further show that, although certiorari and mandamus should not issue, a declaration should be made in each case that the person who conducted the Independent Merits Review made the error of law that has been identified and that the plaintiff was not afforded procedural fairness in the conduct of that review. There being no present threat to remove either plaintiff without a further RSA being undertaken, in which the law would be correctly applied and procedural fairness afforded, it is not now necessary to consider granting an injunction. The most important of the steps that lead to these conclusions can be summarised as follows: Because the Minister has decided to consider exercising power under either s 46A or s 195A of the Migration Act in every case where an offshore entry person claims to be a person to whom Australia owes protection obligations, the RSA and IMR processes taken in respect of each plaintiff were steps taken under and for the purposes of the Migration Act. Because making the inquiries prolonged the plaintiffs' detention, the rights and interests of the plaintiffs to freedom from detention at the behest of the Australian Executive were directly affected, and those who made the inquiries were bound to act according to law, affording procedural fairness to the plaintiffs whose liberty was thus constrained. The inquiries were not made according to law and were not procedurally fair. Crennan Bell Because the Minister is not bound to consider exercising either of the relevant powers, mandamus will not issue to compel consideration, and certiorari would have no practical utility. But in the circumstances of each case, a declaration should be made to the effect described earlier. Neither the issues which arise in these matters, nor the particular questions of statutory construction and application which fall for consideration, can be understood without close attention to the critical provisions of the Migration Act, ss 46A and 195A, placing those provisions in their relevant legislative and historical contexts. Sections 46A and 195A So far as relevant, s 46A provides: "(1) An application for a visa is not a valid application if it is made by an offshore entry person who: is in Australia; and is an unlawful non-citizen. If the Minister thinks that it is in the public interest to do so, the Minister may, by written notice given to an offshore entry person, determine that subsection (1) does not apply to an application by the person for a visa of a class specified in the determination. The power under subsection (2) may only be exercised by the Minister personally. The Minister does not have a duty to consider whether to exercise the power under subsection (2) in respect of any offshore entry person whether the Minister is requested to do so by the offshore entry person or by any other person, or in any other circumstances." So far as presently relevant, s 195A provides: Crennan Bell "Persons to whom section applies This section applies to a person who is in detention under section 189. Minister may grant visa If the Minister thinks that it is in the public interest to do so, the Minister may grant a person to whom this section applies a visa of a particular class (whether or not the person has applied for the visa). In exercising the power under subsection (2), the Minister is not bound by Subdivision AA, AC or AF of Division 3 of this Part or by the regulations, but is bound by all other provisions of this Act. Minister not under duty to consider whether to exercise power The Minister does not have a duty to consider whether to exercise the power under subsection (2), whether he or she is requested to do so by any person, or in any other circumstances. Minister to exercise power personally The power under subsection (2) may only be exercised by the Minister personally." It will be observed that both s 46A and s 195A give a power that it is said "may only be exercised by the Minister personally"6. Both provide7 that the Minister does not have a duty to consider whether to exercise the power. The power given by s 46A is, in effect, to determine that an offshore entry person may make a valid application for a visa of a class specified. It is commonly referred to as a decision to "lift the bar" (scil. on making a valid application for a visa). The power given by s 195A is, in effect, to grant a visa without there first ss 46A(3), 195A(5). ss 46A(7), 195A(4). Crennan Bell having been a valid application for that visa. Both are powers that are exercisable "[i]f the Minister thinks that it is in the public interest to do so". The issues Each plaintiff's claim for relief, on account of the alleged denial of procedural fairness and error of law, necessarily directed attention to what power was exercised when the relevant departmental officer conducted a Refugee Status Assessment of each plaintiff, and when the independent contractor conducted the review of that assessment. There can be no consideration of what are the limits on the exercise of a power without first identifying the power that is exercised. The Commonwealth and the Minister submitted that both the assessments and the reviews of the assessments were undertaken in exercise of non-statutory executive power under s 61 of the Constitution. It followed, so they submitted, that there was no obligation to afford procedural fairness in the conduct of those assessments and reviews, and that it mattered not whether those who undertook the inquiries had misunderstood or misapplied the law. Plaintiff M61 alleged that the RSA and IMR processes, undertaken after the plaintiff had entered Australian territory, are properly seen as "either part of the Minister's exercise of powers in ss 46A and 195A or as informing their exercise because of the centrality of a refugee status determination to the execution of the Act". Although Plaintiff M69 adopted these submissions as an alternative way of putting his case, the principal argument advanced on behalf of Plaintiff M69 was that s 46A of the Migration Act is invalid because sub-s (7) gives "an effectively unfettered and unreviewable statutory power to decide whether or not to exercise the power in sub-s (2)". Plaintiff M69 further submitted that, if the inquiries made in the course of the RSA and IMR processes were made pursuant to executive power under s 61 of the Constitution, and not under any authority conferred by statute, those making the inquiries were still obliged to act with procedural fairness and address the legally correct questions. No party submitted that, on any branch of the arguments advanced, the privative provisions of s 474 of the Migration Act were engaged. As noted earlier, evaluation of the competing submissions requires consideration of ss 46A and 195A in their proper statutory and historical contexts. The chief feature of statutory context to which regard must be had is Crennan Bell those provisions of the Migration Act that provide for the detention and removal of unlawful non-citizens and, in particular, offshore entry persons. Detention and removal As noted at the outset of these reasons, each plaintiff was detained in the Territory of Christmas Island pursuant to the powers given by s 189(3) of the Migration Act. Section 196(1) fixes the duration of that detention. It provides that: "An unlawful non-citizen detained under section 189 must be kept in immigration detention until he or she is: removed from Australia under section 198 or 199; or deported under section 200; or granted a visa." In the circumstances of these cases, where s 200 has no application, the relevant operation of s 196(1) is that each plaintiff must be kept in detention until he is either removed from Australia or granted a visa. Division 8 of Pt 2 of the Migration Act (ss 198-199) regulates the removal from Australia of unlawful non-citizens. the circumstances of these cases are certain of the provisions of s 198(2). That sub-section, so far as presently relevant, provides that: Immediately relevant "An officer must remove as soon as reasonably practicable an unlawful non-citizen: (a) who is covered by ... paragraph 193(1)(b), (c) or (d); and (b) who has not subsequently been immigration cleared; and (c) who ... has not made a valid application for a substantive visa that can be granted when the applicant is in the migration zone". Crennan Bell Section 193(1)(c) refers to a person "detained under subsection 189(2), (3) or (4)". Each plaintiff, having been detained under s 189(3), is therefore an unlawful non-citizen "covered by ... paragraph 193(1) ... (c)". Since each plaintiff is an offshore entry person, neither has been, or could have been, immigration cleared8. Since each plaintiff is an offshore entry person in Australia, neither can make a valid application for a visa9. On an initial reading of s 198(2), it might be thought that the conditions which engaged the obligation to remove each plaintiff from Australia "as soon as reasonably practicable" were satisfied as soon as the plaintiffs entered the Territory of Christmas Island. If that were so, it would also follow that the continued detention of the plaintiffs, for so long as was necessary to undertake the RSA or the IMR, was unlawful. (In neither case were processes for the plaintiff's removal from Australia set in train until after the completion of both the assessment and the review.) Detention is required and authorised by the Migration Act until removal or grant of a visa. But if attention were confined to the words of s 198(2), there being a duty to remove each plaintiff as soon as reasonably practicable, with there being no possibility of making a valid application for a visa, prolongation of detention for so long as was necessary for the Department to conduct inquiries about the refugee status of the plaintiffs might, at first sight, appear to have been unlawful. As noted at the outset of these reasons, however, it is important to explore the foundations for accepting, as the plaintiffs did, that their detention while the RSA and IMR processes were undertaken was lawful. Exploration of those foundations shows what powers were being exercised when the RSA was conducted and a review of that assessment was undertaken. To read s 198(2) as not permitting detention for so long as was necessary to undertake the RSA and IMR processes would impermissibly divorce it from its text and its context. First, there is a textual reason for reading s 198(2) as permitting detention for those purposes. ss 166(1)(a)(ii), 172(1)(b). s 46A(1). Crennan Bell Section 198(2)(c) expressly contemplates that an unlawful non-citizen who is covered by s 193(1)(c) could make a valid application for a substantive visa that can be granted when the applicant is in the migration zone. Yet, by operation of s 46A(1), no offshore entry person in Australia can make a valid application for a visa. Section 193(1)(c) deals with persons who are detained under s 189(2), (3) or (4). Sub-sections (2), (3) and (4) of s 189 contemplate detention of persons in various circumstances. Sub-section (2) of s 189 deals with persons in Australia, but outside the migration zone, suspected of seeking to enter the migration zone; sub-s (3) with unlawful non-citizens in an excised offshore place; sub-s (4) with persons in Australia, but outside the migration zone, suspected of seeking to enter an excised offshore place. Whichever of those powers of detention were to be engaged, the person detained, if brought into Australia, would be an offshore entry person precluded by s 46A(1) from making a valid application for a visa. The only power to permit the making of a valid application for a visa by an offshore entry person in Australia is the power in s 46A(2). The fact that s 198(2)(c) contemplates the making of a valid application for a substantive visa by a person who is covered by s 193(1)(c) suggests strongly that s 198(2) should be read as permitting detention while steps are taken to determine whether the person detained should be permitted to make such an application by the Minister exercising power under s 46A(2). There are also contextual reasons that point to the conclusion that detention while steps are taken to determine whether the detainee should be permitted to make a valid application for a visa is lawful. First and foremost among those contextual reasons is that, read as a whole, the Migration Act contains an elaborated and interconnected set of statutory provisions directed to the purpose of responding to the international obligations which Australia has undertaken in the Refugees Convention and the Refugees Protocol. In some respects, as was explained in NAGV and NAGW of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs10, the provisions of the Migration Act may, at times, have gone beyond what would be required to respond to those obligations. It is not necessary to explore those issues here. Rather, what is presently significant is that the Migration Act proceeds, in important respects, from the assumption that Australia has 10 (2005) 222 CLR 161 at 178-180 [54]-[59]; [2005] HCA 6. Crennan Bell protection obligations to individuals. Consistent with that assumption, the text and structure of the Act proceed on the footing that the Act provides power to respond to Australia's international obligations by granting a protection visa in an appropriate case and by not returning that person, directly or indirectly, to a country where he or she has a well-founded fear of persecution for a Convention reason. To understand how that assumption is reflected in the Migration Act, it is necessary to recognise some features of the history of the relevant provisions. Historical context In 2001, the Parliament enacted six Acts11, one after the other, which affected the entry into, and remaining in, Australia by aliens. Those six Acts were all assented to, and for the most part came into operation, on the same day. The first of those Acts, the Border Protection (Validation and Enforcement Powers) Act 2001 (Cth) ("the Border Protection Act"), sought to validate certain actions taken between 27 August 2001 and the commencement of the Act. The actions in question were actions taken by the Commonwealth, by any Commonwealth officer, or by any other person acting on behalf of the Commonwealth, in relation to the MV Tampa and certain other vessels, and actions in relation to persons who were on board those vessels during the relevant period. The circumstances that gave rise to those actions are sufficiently described in Ruddock v Vadarlis12. In addition, the Border Protection Act, and several of the other five Acts, amended the Migration Act to change the way in which persons who arrived in, or sought to enter, Australian territory without a valid visa were to be dealt with. 11 Border Protection (Validation and Enforcement Powers) Act 2001 (Cth); Migration Amendment (Excision from Migration Zone) Act 2001 (Cth); Migration Amendment (Excision from Migration Zone) (Consequential Provisions) Act 2001 (Cth); Migration Legislation Amendment Act (No 1) 2001 (Cth); Migration Legislation Amendment Act (No 5) 2001 (Cth); Migration Legislation Amendment Act (No 6) 2001 (Cth). 12 (2001) 110 FCR 491. Crennan Bell Those changes had a number of features of immediate relevance to the present matters. First, certain Australian territory, including the Territory of Christmas Island, was excised from the migration zone13, thus introducing the category of places called excised offshore places. A person who entered Australia at an excised offshore place, after the excision time, and who became an unlawful non-citizen because of that entry, was identified as an "offshore entry person". The Migration Act was amended14, by inserting s 46A, to provide that an application for a visa is not a valid application if it is made by an offshore entry person who is in Australia and is an unlawful non-citizen. One of the consequential provisions made for dealing with unauthorised arrivals in places excised from the migration zone was to provide, by the insertion of s 198A into the Migration Act15, that offshore entry persons might be taken from Australia to a country declared under that section. The new s 198A(3) provided that the Minister might declare a country for the purposes of that section by declaring that, in effect, the country in question provides access for persons seeking asylum to effective procedures for assessing their need for seeking asylum pending protection; provides protection determination of their refugee status; provides protection to persons who are given refugee status pending their voluntary repatriation to their country of origin or resettlement in another country; and meets relevant human rights standards in providing that protection. An offshore entry person being dealt with under that provision is taken16 not to be in immigration detention. The Republic of Nauru and Papua New Guinea were declared countries and persons were removed from Australia to those places in exercise of the power given by s 198A. for persons The Department referred to the procedure contemplated by s 198A, of removing offshore entry persons from Australia to another country, as the "Pacific Strategy". Removal of offshore entry persons to those countries began in 2001 but ceased in 2008. 13 Migration Amendment (Excision from Migration Zone) Act. 14 Migration Amendment (Excision from Migration Zone) Act, s 3, Sched 1, item 4. 15 Migration Amendment (Excision from Migration Zone) (Consequential Provisions) Act, s 3, Sched 1, item 6. 16 s 198A(4). Crennan Bell While the so-called Pacific Strategy was operating, claims by offshore entry persons taken to a declared country that they were owed protection obligations were assessed according to procedures specified by the Department. The document that recorded those procedures began by stating Australia's international obligations in the following terms: "Australia's primary obligation under the Refugees Convention is not to refoule (return) a refugee, either directly or indirectly, to a country where they have a well-founded fear of persecution for a Convention ground. Australia's protection obligations extend to refugees who have entered Australia's territorial seas. The Pacific strategy in no way detracts from these obligations." (emphasis added) Because persons dealt with under these procedures were not in Australia, but were in either Nauru or Papua New Guinea, s 46A of the Migration Act did not apply to prevent their making a valid application for a visa. But being outside Australia, and in a declared country, such persons could apply for only certain classes of visa and, in particular, could not apply for a Protection (Class XA) visa. It is not necessary to examine further the operation of the arrangements that were made to effect the Pacific Strategy. What is presently important is that the changes to the Migration Act that were worked by inserting s 46A and, in consequence, inserting s 198A, are to be seen as reflecting a legislative intention to adhere to that understanding of Australia's obligations under the Refugees Convention and the Refugees Protocol that informed other provisions made by the Act. As the document recording procedures for administration of the so-called Pacific Strategy said: framework legislation underpinning the Pacific strategy has "The new two mechanisms that reflect Australia's obligations under Article 33 of the Refugees Convention and other Conventions. These mechanisms are: Immigration and Multicultural and Indigenous Affairs to decide whether to allow an application for a visa to be made by unauthorised arrivals on excised offshore places (offshore entry persons) (while in Australia), following consideration of protection obligations under the relevant United Nations Conventions; and the Minister to enable for Crennan Bell the ability to take unauthorised arrivals who have entered Australia at excised offshore places (such as Ashmore Reef and Christmas Island) to another country provided that the Minister for Immigration and Multicultural and Indigenous Affairs has declared under s 198A of the Migration Act 1958 that the country [meets the requirements described earlier]." (emphasis added) In the light of these considerations of text and context, the obligation created by s 198(2)(a) to remove an unlawful non-citizen who is covered by s 193(1)(c) "as soon as reasonably practicable" should be read as accommodating the making of inquiries, in the words quoted earlier, "to enable the Minister ... to decide whether to allow an application for a visa to be made by unauthorised arrivals on excised offshore places". That is, s 198(2) should be read as accommodating the taking of steps for the purpose of informing the Minister of matters relevant to the possible exercise of power under either s 46A or s 195A. Assuming the relevant steps were taken promptly (and the contrary was not suggested in either of these matters) detention while the inquiries were made would be lawful. To state the accommodation between s 198(2) and the possible exercise of power under s 46A or s 195A in this way does not expressly identify whether, or to what extent, there has been any exercise of power under those sections. Or, to put the same point another way, what exactly is meant by "the taking of steps for the purpose of informing the Minister of matters relevant to the possible exercise of power"? Given that the Commonwealth and the Minister submitted that the inquiries that were made were not undertaken under either s 46A or s 195A, but were made in exercise of non-statutory executive power, it is necessary to examine the matter further. To do that, it is necessary to begin by considering what the Minister has directed be done. The Minister's announcement On 29 July 2008, the Minister announced that the Government had decided to strengthen and enhance the RSA process. This announcement followed an earlier announcement by the Government "that asylum claims of future unauthorised boat arrivals would be processed on Christmas Island". Following the announcement of 29 July 2008, the Department developed two procedural manuals describing the operation of the RSA process: one entitled "Refugee Status Assessment Procedures Manual" ("the RSA Manual"), Crennan Bell and the other "Guidelines for the Independent Merits Review of Refugee Status Assessments" ("the IMR Manual"). Argument of the present matters proceeded on the basis that the editions of those manuals produced in September 2009 and August 2009 respectively were used in connection with the assessment and review of each plaintiff's claims. The manuals were cast in terms that made plain that the processes for which each provided were to be applied to all unlawful non-citizens who entered Australia at an excised offshore place and who, as the RSA Manual said, raised "claims or information which prima facie may engage Australia's protection obligations". The adoption of these procedures, and their application in these particular cases, can only be understood as implementing the announcements that have been mentioned: one that the Pacific Strategy would no longer be followed; the other that steps of the kind ultimately recorded in the RSA Manual and the IMR Manual would be undertaken as the means of meeting Australia's obligations under the Refugees Convention and Refugees Protocol, instead of following the Pacific Strategy. And if the power to remove offshore entry persons from Australia under s 198A was not to be used, the only statutory powers that could be engaged to avoid breaching Australia's international obligations were the powers under ss 46A and 195A. The RSA Manual The purpose of the RSA process was described in the RSA Manual as being "so that the Minister ... can be advised whether Australia's protection obligations under the Refugees Convention are engaged". It was said that "[c]onsideration of the exercise of the Minister's power under s 46A to allow a visa application to be made will occur following assessment of protection obligations as outlined in this manual". Much emphasis was given in the Manual to the RSA process being "a non-statutory process". But the source of the power to undertake the process was not identified. Rather, the Manual described what were said to be some consequences of the process being "a non-statutory process". In particular, it was said that "[t]his means that the Migration Act, the Migration Regulations 1994 ... and Australian case law on the interpretations of the definition of a refugee and 'protection obligations' do not apply", though it was said that "officers should be guided by these as a matter of policy". Crennan Bell The Manual said that the common law rules of natural justice or procedural fairness were to be applied "to safeguard the fairness of the RSA procedures". The particular procedures laid down in the Manual were described as being "modelled closely on the onshore [p]rotection visa determination procedures". In that respect, it may be noted that, although the process was repeatedly described as "non-statutory", the Manual proceeded on a footing that suggested that some provisions of the Migration Act applied to at least some aspects of the process. So, for example, the directions given in the Manual about seeking further information or comment from a claimant proceeded on the footing that what the Migration Act describes as "non-disclosable information"17 need not be disclosed, regardless of whether procedural fairness would require that to be done. If, at the end of the RSA process, an offshore entry person was found to be owed protection obligations, the Manual described the consequence as being that a submission would be prepared by the Department for the Minister "advising the Minister that Australia's protection obligations are engaged and seeking his/her agreement to lift the bar under s 46A of the Act". By contrast, if the officer making the assessment determined that the person was not a person to whom Australia has protection obligations, no submission would go to the Minister. Instead, an opportunity would be given to seek the review of the decision under the IMR process. If the outcome of the review was negative, an opportunity would be given to the person to provide any new or additional information which he or she wished the Department to take into consideration. A further assessment would be undertaken by the Department of whether any other international treaty obligation was engaged in the particular case. If no other international obligation was engaged, the process for removal of the person from Australia would begin. The IMR Manual As would be expected, much that was set out in the IMR Manual followed or reflected what was said in the RSA Manual. It is therefore not necessary to do more than mention some particular matters arising from the IMR Manual. 17 ss 5, 424A(3)(c). Crennan Bell The system of Independent Merits Review was described, in the IMR Manual, as having been introduced as one of the new arrangements announced by the Minister on 29 July 2008. Previously, reviews of departmental assessments of refugee status had been undertaken by a senior officer of the Department. Much emphasis was given in the IMR Manual (as it was in the RSA Manual) to the RSA process and the IMR process being "non-statutory". Again, however, the Manual did not seek to identify what power was being exercised. Rather, the consequences said to follow from the process being "non-statutory" were identified. In particular, it was said in the IMR Manual that independent reviewers "may still be guided by the legislated interpretations of the Refugees Convention in sections 36 and 91R-91U of the Act and Australian case law on the interpretation of 'protection obligations'", but it was also said to be "important to note that these sources of interpretation are not binding authorities". The IMR process was subject to what the Department described as "a quality assurance check before an offshore entry person would be notified of the outcome of the IMR review". That process, now supervised by the Registrar of the Refugee Review Tribunal (while on secondment to the Department), was said to "primarily for spelling, grammatical, cut and paste or other obvious errors". But it was a process that may "result in a suggestion being made to an independent reviewer that he or she may wish to consider an additional matter, consider more up to date country information, or clarify parts of a decision-record or recommendation". [involve] checking recommendations IMR At the end of the review, the reviewer was to make a recommendation about whether Australia had protection obligations to the claimant. If the reviewer concluded that Australia did have protection obligations to the claimant, a departmental officer would prepare a submission to the Minister for consideration of the exercise of power under either s 46A(2) or s 195A. If the reviewer concluded that Australia did not have protection obligations to the claimant, no submission would be made to the Minister. Steps of the kind described in connection with the RSA process for considering engagement of any other relevant international obligation would be undertaken and, subject to that, processes for removing the claimant would then begin. Crennan Bell Review by contractors What, if any, significance attaches to the fact that, as noted at the outset of these reasons, the IMR process was conducted by persons engaged by an independent contractor, Wizard People Pty Ltd? That company (the contractor) had agreed with the Commonwealth that it would make specified persons available to undertake reviews of unfavourable Refugee Status Assessments of offshore entry persons "seeking to engage Australia's protection obligations under the Refugees Convention". As noted above, the only function of the reviewer was to make a recommendation about whether protection obligations were owed. Any decision to permit the making of an application for a visa or to grant a visa would be made by the Minister. Any decision to remove a claimant would be made by a departmental officer. It may be accepted, for the purposes of the present matters, that neither the contractor, nor any of the specified persons engaged by the contractor to perform the services it had agreed to provide, is an officer of the Commonwealth. More particularly, it may be accepted that the reviewers who are named as defendants in these matters are not officers of the Commonwealth. Accepting that to be so does not determine, however, whether relief of the kind sought by either plaintiff can now be granted. Rather, the observation that those who conducted the independent reviews are assumed not to be officers of the Commonwealth could determine only that a claim for mandamus, prohibition or injunction against those persons would not, standing alone, found the original jurisdiction of this Court under s 75(v) of the Constitution. In these particular matters, the jurisdiction of the Court is found in s 75(iii) (as matters in which the Commonwealth, or a person being sued on behalf of the Commonwealth, is a party), s 75(v) (as matters in which mandamus and injunction are sought against the Minister and either a departmental officer or the Secretary of the Department β all officers of the Commonwealth) and even, perhaps, s 75(i) (as matters arising under any treaty β the Refugees Convention and the Refugees Protocol). Accordingly, it is appropriate to leave, for another day, the question whether a party identified as "an independent contractor" nevertheless may fall within the expression "an officer of the Commonwealth" in s 75(v) in circumstances where some aspect of the exercise of statutory or executive authority of the Commonwealth has been "contracted out". Instead, attention must be directed to what power was being exercised in each of these cases when, while the claimant was detained, a departmental officer undertook a Refugee Status Assessment and then an independent contractor Crennan Bell reviewed that assessment. Was it, as the Commonwealth and the Minister submitted, no more than a non-statutory executive power to inquire? Was it, as Plaintiff M61 submitted, an exercise of power under s 46A or s 195A? Was it, as Plaintiff M69 submitted, an exercise of non-statutory executive power to inquire because s 46A is invalid? The question of validity must be examined first. Validity of s 46A The argument advanced on behalf of Plaintiff M69, that s 46A is wholly invalid, began from observations made in a number of cases18 about the special significance of s 75(v). As was said in Bodruddaza v Minister for Immigration and Multicultural Affairs19, "[a]n essential characteristic of the judicature provided for in Ch III is that it declares and enforces the limits of the power conferred by statute upon administrative decision-makers20". Section 75(v) furthers that end by controlling jurisdictional error and makes it "constitutionally certain that there [is] a jurisdiction capable of restraining officers of the Commonwealth from exceeding Federal power"21. The argument proceeded from these premises to a conclusion that, not only will the courts declare and enforce the limits of power, there must exist in every case limits on power that can be enforced. More particularly, it was submitted that there cannot be a grant of power on terms of the kind found in s 46A(7): that the person to whom the power is granted need not consider its exercise, whether asked to do so or in any other circumstances. Such a power, it was submitted, would be an arbitrary power, and the purpose of s 75(v) is to prevent arbitrary power. Further support for the argument was sought by reference to three other considerations. First, reference was made to the notion of rule of law and the well-known dictum of Dixon J in Australian Communist 18 Bodruddaza v Minister for Immigration and Multicultural Affairs (2007) 228 CLR 651 at 668 [45]; [2007] HCA 14; Bank of NSW v The Commonwealth (1948) 76 CLR 1 at 363 per Dixon J; [1948] HCA 7. 19 (2007) 228 CLR 651 at 668 [46]. 20 Enfield City Corporation v Development Assessment Commission (2000) 199 CLR 135 at 152-153 [43]; [2000] HCA 5. 21 Bank of NSW v The Commonwealth (1948) 76 CLR 1 at 363. Crennan Bell Party v The Commonwealth22 that the Constitution is framed in accordance with many traditional conceptions of which some, including the rule of law, are simply assumed. Second, reference was made to what was said in Kirk v Industrial Court (NSW)23: that to deprive a State Supreme Court of its supervisory jurisdiction enforcing the limits on the exercise of State executive and judicial power by persons and bodies other than that Court "would be to create islands of power immune from supervision and restraint". Third, reference was made to the uncontroversial proposition that "a non-judicial body cannot determine the limits of its own power". As noted earlier, the particular conclusion urged, that s 46A(7) is invalid, proceeded from the broad proposition that there cannot be a valid grant of power without enforceable limits. The merits of that broader proposition need not be examined. The argument in this case necessarily focused upon a much narrower aspect of that broad proposition: whether there can be a valid grant of power on terms that consideration of the exercise of that power cannot be enforced. Contrary to the submissions on behalf of Plaintiff M69, neither s 46A as a whole, nor s 46A(7) in particular, is a provision which is of so little content as not to constitute an exercise of legislative power or to be a "law" as a rule of conduct or a declaration as to power, right or duty24. The relevant content of the provision is readily expressed: "the Minister may ... but need not consider whether to ...". And that is not a form of grant of power unknown to the federal statute book, at least in recent years25. 22 (1951) 83 CLR 1 at 193; [1951] HCA 5. 23 (2010) 239 CLR 531 at 581 [99]; [2010] HCA 1. 24 Cf Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476 at 513 [102]; [2003] HCA 2, quoting The Commonwealth v Grunseit (1943) 67 CLR 58 at 82 per Latham CJ; [1943] HCA 47. 25 See, for example, Migration Act, ss 37A, 46B, 48B, 72, 91F, 91L, 91Q, 137N, 195A, 197AA-197AG, 261K, 351, 391, 417, 454, 495B, 501A, 501J, 503A; Australian Citizenship Act 2007 (Cth), s 48; Australian Crime Commission Act 2002 (Cth), s 9; Commonwealth Radioactive Waste Management Act 2005 (Cth), s 3C; Taxation Administration Act 1953 (Cth), Sched 1, s 357-70; Trade Marks Act 1995 (Cth), s 84A. Crennan Bell Grant of power on the terms set out in s 46A(7) does not clash with s 75(v), or with its place or purpose in the Constitution. Maintenance of the capacity to enforce limits on power does not entail that consideration of the exercise of a power must always be amenable to enforcement, whether by mandamus or otherwise. Nor does it entail that every discretion to exercise a power must be read as if satisfaction of identified criteria would require its exercise26. Yet it was one or other of these propositions which underpinned the arguments for invalidity. Nor do considerations of the kind embraced by the expression "the rule of law" yield some contrary conclusion. As developed in argument, the relevant content of the rule of law was said to be that it is for the courts to enforce the limits on power and for the Parliament to confer a power on a Minister subject to limits. The contravention of the rule of law was described as being to prevent the constitutional jurisdiction in s 75(v) being exercised in relation to the power. But that is not so. Section 46A(7) does not prevent any exercise of jurisdiction under s 75(v). The repository of the power given by s 46A does not determine the limits of the power. If the power is exercised, s 75(v) can be engaged to enforce those limits. No "island of power" is created. Rather, what s 46A(7) does is provide that the repository of the relevant power need not consider whether to exercise it. That is, there being no duty to exercise the power, mandamus will not go to compel its exercise. But that does no more than deny that the particular grant of power entails a duty to consider its exercise. The challenge to the validity of s 46A(7) was not made good. No question therefore arises about the validity of the other provisions of s 46A. This being so, the question β what power was exercised when Refugee Status Assessments and Independent Merits Reviews were conducted with respect to each plaintiff? β becomes was it, as the Commonwealth submitted, no more than a non-statutory executive power to inquire? Was it, as Plaintiff M61 26 Cf Julius v Lord Bishop of Oxford (1880) 5 App Cas 214; Finance Facilities Pty Ltd v Federal Commissioner of Taxation (1971) 127 CLR 106; [1971] HCA 12; Leach v The Queen (2007) 230 CLR 1; [2007] HCA 3. Crennan Bell submitted (and Plaintiff M69 adopted as an alternative argument), an exercise of power under s 46A or s 195A? Power The following six considerations bear upon the issue. First, the powers under ss 46A and 195A may only be exercised by the Minister personally27. Second, the assessment and review were made in consequence of a ministerial direction. Third, in the circumstances of these cases, the continued detention of an offshore entry person, while an assessment and review were conducted, was lawful only because the relevant assessment and review were directed to whether powers under either s 46A or s 195A could or should be exercised. Fourth, if, on assessment or subsequent review, it was decided that Australia did have protection obligations to the claimant, a submission concerning the exercise of power under s 46A would be made to the Minister. Fifth, the plaintiffs submitted that a favourable assessment always or, as the plaintiffs put it, "automatically" led to the Minister exercising power under s 46A. Sixth, if, on assessment or subsequent review, it was decided that Australia did not have protection obligations to the claimant, no submission would be made to the Minister. Of these six considerations, it is the first three that are most important. They are the most important because they present not only an apparent tension between considerations, but also the means of resolving that tension. There is an appearance of tension between the first consideration (that the statute requires that the relevant powers to lift the bar under s 46A, or grant a visa under s 195A, can only be exercised by the Minister personally) and the third (the lawfulness of continued detention for the purposes of inquiry). There is the appearance of tension between those considerations because together they invite the question: how could continued detention under the Migration Act be lawful if what prolongs the detention (the Department making inquiries) has no statutory footing? Yet a central contention of the Commonwealth and the Minister was that the inquiries which were made, and which necessarily prolonged each plaintiff's detention, were not made under statute. It is not readily to be supposed that a statutory power to detain a person permits continuation of that detention at the unconstrained discretion of the 27 ss 46A(3), 195A(5). Crennan Bell the Minister. the Commonwealth and Executive. Yet a proposition of that kind lay at the heart of the submissions advanced on behalf of The Commonwealth and the Minister submitted that detention of an offshore entry person was permitted while the officer detaining the person awaited the possibility of the exercise of power under either s 46A or s 195A. That is, the obligation to bring to an end the detention of an unlawful non-citizen who is covered by s 193(1)(c), who has not subsequently been immigration cleared, and who has not made (and cannot make) a valid application for a visa, by removing that person from Australia as soon as reasonably practicable, was said to be suspended for so long as there remains a possibility (presumably a reasonable possibility) of an exercise of power under s 46A or s 195A. Several points may be made about this proposition. First, the existence of any relevant possibility is wholly within the control of the Executive. It follows that the period of an individual's detention would be wholly within the control of the Executive. Second, deciding whether there is a relevant possibility of the exercise of power under either s 46A or s 195A would require some prediction of the likelihood of the exercise of a personal non-compellable power. A criterion of that kind is a very uncertain basis for determining whether detention is lawful or unlawful. Such a construction of the relevant provision should not be adopted unless no other construction is reasonably open. Instead, accommodation of the provisions governing detention and its duration, with what is done in relation to the possible exercise of power under ss 46A and 195A, must seek a firmer statutory foundation. In these cases, that foundation is revealed by recognising the significance of the second matter that has been identified: that the inquiries that are made for the purposes of both the RSA and IMR processes are made in consequence of the decision announced in July 2008. There would otherwise appear to be an irreducible tension between the exercise of a statutory power to detain in a way that prolongs detention, because inquiries are being made, and those inquiries having no statutory foundation. This tension does not arise if the decision to establish and implement the RSA and IMR procedures, announced by the Minister, is understood not just as a direction to provide the Minister with advice about whether power under s 46A or s 195A can or should be exercised, but as a decision by the Minister to consider whether to exercise either of those powers in respect of any offshore entry person who makes a claim that Australia owes the claimant protection obligations. Crennan Bell Although the parties gave some prominence in argument to each of the other three considerations identified earlier as bearing upon the question of power, each is less important than the first three that have just been discussed. So, although it is right to observe, as the Commonwealth and the Minister emphasised, that no submission is put before the Minister if the outcome of the RSA and IMR processes is unfavourable to the claimant, that fact does not, of itself, deny that the Minister has begun the task of considering whether to exercise power under either s 46A or s 195A. That the Minister has begun that task is shown by consideration of the first three matters that have been mentioned. Likewise, while the plaintiffs sought to demonstrate that a favourable assessment or review has always led to the Minister exercising power under either s 46A or s 195A, that fact (if it be so) may assist in showing that the Minister has begun to consider whether to exercise the relevant power, but standing alone it does not require that conclusion. It is convenient at this point to deal with how resolution of the issue that is now under consideration fits in with what is usually called the "Carltona principle"28. The Carltona principle has been described29 as a principle of agency, distinct from a delegation of power, which allows an agent to act in the principal's name and use all of the principal's power. The Commonwealth and the Minister submitted that, while the Carltona principle would allow activities of a Minister's Department to be attributed to a Minister, the position is different where (as here) the relevant powers are ones which the statute requires be exercised by the Minister personally. The Commonwealth and the Minister further submitted that an analogy could be drawn between the circumstances of these cases and those provisions of the Administrative Decisions (Judicial Review) Act 1977 (Cth) which deal with conduct for the purpose of making a decision and which were held, by the Federal Court of Australia in Margarula v Minister for Environment30, to be confined to conduct of the relevant 28 Carltona Ltd v Commissioners of Works [1943] 2 All ER 560. See also Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 37-38 per Mason J; [1986] HCA 40; Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 449-453 [176]-[188] per Gummow and Hayne JJ; [2001] HCA 51. 29 Aronson, Dyer and Groves, Judicial Review of Administrative Action, 4th ed 30 (1999) 92 FCR 35. Crennan Bell decision-maker. Here, so the Commonwealth and the Minister submitted, the departmental inquiries should not be found to be any exercise of the Minister's powers under either s 46A or s 195A. is not necessary to decide whether the analogy which the Commonwealth and the Minister sought to draw is apt. Nor is it necessary to attempt to identify the limits of the Carltona principle. What is presently important is that what the Department did, in conducting assessments and obtaining reviews, was done in consequence of a ministerial decision that those steps be taken. In requiring those steps to be taken, the Minister did not seek to (and did not) delegate any power. But the fact that the steps were taken in consequence of a ministerial decision is important. Exercise of the powers given by ss 46A and 195A is constituted by two distinct steps: first, the decision to consider exercising the power to lift the bar or grant a visa and second, the decision whether to lift the bar or grant a visa. The Minister is not obliged to take either step. Sections 46A(7) and 195A(4) expressly provide that the Minister does not have a duty to consider whether to exercise the relevant power. And ss 46A(2) and (3) and 195A(2) and (5) make plain that it is for the Minister personally to decide whether to exercise the relevant power. But here, the effect of the Minister's announcement was that, instead of removing offshore entry persons from Australia to a declared country under the powers given under s 198A, consideration would be given to exercising the powers given by ss 46A and 195A in every case in which an offshore entry person claimed that Australia owed that person protection obligations. The outcome of that consideration in any individual case would depend upon the result of the processes established by the Department in response to the ministerial announcement. But in order that Australia not breach the international obligations it had undertaken in the Refugees Convention and Refugees Protocol, consideration would be given, in every case, to the exercise of the only statutory powers available when the Pacific Strategy was no longer to be pursued: the powers given by ss 46A and 195A. Having decided that he should consider the exercise of power under s 46A or s 195A with respect to every offshore entry person who thereafter claimed that Australia owed that person protection obligations, the Minister required his Department to undertake the inquiries necessary to make an assessment and, if needs be, review the conclusion reached. There having been a decision to consider exercise of the relevant powers in the present and other similar cases, the unchallenged assumption made in these Crennan Bell matters, that detention during the conduct of the assessment and review processes was lawful, is seen to be soundly based. The obligation to remove as soon as reasonably practicable, imposed by s 198(2), is read in the light of other provisions of the Migration Act. The express reference in s 198(2)(c) to the possibility of making a valid application for a visa accommodates the consideration of whether to exercise the powers given by ss 46A and 195A. The accommodation is founded upon the taking of the first step towards the exercise of those statutory powers: the decision to consider their exercise. It is not founded upon necessarily uncertain prognostications about whether exercise of the available powers will ever be considered. Limits on power? What, if any, relevant limits are there on the way in which the assessment and any subsequent review are conducted? For the reasons that have already been given, the inquiries undertaken in making a Refugee Status Assessment, and any subsequent Independent Merits Review, were inquiries made after a decision to consider exercising the relevant powers and for the purposes of informing the Minister of matters that were relevant to the decision whether to exercise one of those powers in favour of a claimant. Those being the circumstances in which the inquiries were conducted, it is not necessary to examine the submissions advanced on behalf of Plaintiff M69 and the Commonwealth and the Minister about whether exercise of non-statutory executive power is or may be limited by a requirement to afford procedural fairness. Rather, the inquiries having the particular statutory foundations that have been identified, the principles that govern what limits there are to the way in which the assessment and any subsequent review are conducted are well established. It was said, in Annetts v McCann31, that it can now be taken as settled that when a statute confers power to destroy, defeat or prejudice a person's rights, 31 (1990) 170 CLR 596 at 598 per Mason CJ, Deane and McHugh JJ; [1990] HCA 57. See also Jarratt v Commissioner of Police (NSW) (2005) 224 CLR 44 at 61 [51] per McHugh, Gummow and Hayne JJ; [2005] HCA 50; Saeed v Minister for Immigration and Citizenship (2010) 84 ALJR 507 at 511 [11]; 267 ALR 204 at 208; [2010] HCA 23. Crennan Bell interests or legitimate expectations, principles of natural justice generally regulate the exercise of that power. In Kioa v West, different views were expressed about whether the requirements of procedural fairness arise from the common law32 or instead depend upon drawing an implication from the legislation which confers authority to decide33. It is unnecessary to consider whether identifying the root of the obligation remains an open question34 or whether the competing views would lead to any different result. It is well established, as held in Annetts35, that the principles of procedural fairness may be excluded only by "plain words of necessary intendment". In the present cases, the Commonwealth and the Minister submitted that, if any power was being exercised under s 46A(2) (and they submitted that it was not), there was no implied obligation to afford procedural fairness because the power is not a power to destroy, defeat or prejudice a right; it is a discretionary power to confer a right. This submission was framed in a way that took up only part of what was said in Annetts. Reference was made in Annetts to power to destroy, defeat or prejudice not just rights but also interests or legitimate expectations. It will not be necessary to explore in this case what place the notion of legitimate expectations has in this field of discourse36. It is enough to say that the references in Annetts to "prejudice", "interests" and "legitimate expectations" suggest that the contrast which the Commonwealth and the Minister sought to draw between destruction, defeat or prejudice of a right, on the one hand, and a discretionary power to confer a right, on the other, proceeds from too narrow a conception of the circumstances in which an obligation to afford procedural fairness might arise. The more comprehensive statement of 32 (1985) 159 CLR 550 at 584 per Mason J; [1985] HCA 81. 33 (1985) 159 CLR 550 at 609, 615 per Brennan J. 34 Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82 at 142-143 [168]; [2000] HCA 57; Saeed (2010) 84 ALJR 507 at 511 [11]-[13]; 267 ALR 204 at 35 (1990) 170 CLR 596 at 598. See also The Commissioner of Police v Tanos (1958) 98 CLR 383 at 396; [1958] HCA 6. 36 See Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1; [2003] HCA 6. Crennan Bell principle by Mason J in FAI Insurances Ltd v Winneke37 sufficiently answers the submissions by the Commonwealth and the Minister. His Honour said that the obligation to afford procedural fairness is not limited to cases where the exercise of the power affects rights in the strict sense, but extends to the exercise of a power which affects an interest or a privilege. It is then important, in the present matters, to identify the rights and interests affected. Rights or interests affected? Contrary to the submissions of the Commonwealth and the Minister, the Minister's decision to consider whether power should be exercised under either s 46A or s 195A directly affected the rights and interests of those who were the subject of assessment or review. It affected their rights and interests directly because the decision to consider the exercise of those powers, with the consequential need to make inquiries, prolonged their detention for so long as the assessment and any necessary review took to complete. That price of prolongation of detention is a price which some claimants may have paid without protest. After all, they sought entry to Australia and this was the only way of achieving that end. And they claimed that return to their country of nationality entailed a real risk of persecution. But even if it were the fact that individuals were content to have detention prolonged, that must not obscure that what was being done, for the purposes of considering the exercise of a statutory power, had the consequence of depriving them of their liberty for longer than would otherwise have been the case. Because the Minister was not bound to exercise power under either s 46A or s 195A, no matter what conclusion was reached in the assessment or review, it cannot be said that a decision to consider exercising the power affected some right of the offshore entry person to a particular outcome. The offshore entry person had no right to have the Minister decide to exercise the power or, if the assessment or review were favourable, to have the Minister exercise one of the relevant powers in his or her favour. Nonetheless, once it is decided that the assessment and review processes were undertaken for the purpose of the Minister considering whether to exercise power under either s 46A or s 195A, it follows from the consequence upon the claimant's liberty that the assessment and review must be procedurally fair and must address the relevant legal question or 37 (1982) 151 CLR 342 at 360; [1982] HCA 26. Crennan Bell questions. The right of a claimant to liberty from restraint at the behest of the Australian Executive is directly affected. The claimant is detained for the purposes of permitting the Minister to be informed of matters that the Minister has required to be examined as bearing upon whether the power will be exercised. The Minister having decided to consider the exercise of power under either or both of ss 46A and 195A, the steps that are taken to inform that consideration are steps towards the exercise of those statutory powers. That the steps taken to inform the consideration of exercise of power may lead at some point to the result that further consideration of exercise of the power is stopped does not deny that the steps that were taken were taken towards the possible exercise of those powers. Nor does it deny that taking the steps that were taken directly affected the claimant's liberty. There being no exclusion by plain words of necessary intendment, the statutory conferral of the powers given by ss 46A and 195A, including the power to decide to consider the exercise of power, is to be understood as "conditioned on the observance of the principles of natural justice"38. Consideration of the exercise of the power must be procedurally fair to the persons in respect of whom that consideration is being given. And likewise, the consideration must proceed by reference to correct legal principles, correctly applied. What relief is to be afforded if the inquiries that are made are not procedurally fair, or if those inquiries do not proceed by reference to correct legal principles, correctly applied, raises separate issues that will be considered later in these reasons. It is first necessary to examine whether what was done in these two cases was procedurally unfair or attended by relevant legal error. Plaintiff M61 β Procedural fairness and error of law The written and oral submissions advanced on behalf of Plaintiff M61 about procedural fairness and error of law focused upon the review of the Refugee Status Assessment that was conducted by the third-named defendant (the reviewer). The steps taken by the fourth-named defendant in conducting the initial Refugee Status Assessment were rightly treated as overtaken by the subsequent review. The reviewer concluded that Plaintiff M61 did not meet the 38 Kioa v West (1985) 159 CLR 550 at 615 per Brennan J. Crennan Bell definition of a refugee set out in Art 1A of the Refugees Convention (as amended by the Refugees Protocol) and recommended that he should not be recognised as a refugee. The reviewer's reasons It is necessary to notice three aspects of the reasons the reviewer stated for forming the opinions he did. First, early in his statement of reasons, the reviewer said that: "While this merits review is not bound by Australian law and is of a non-statutory nature, it is appropriate to have regard to Australian legislation and relevant case law as an aid to the interpretation of the Refugees Convention." Second, the reviewer set out a list of the material that he had before him. Those documents included a submission by the plaintiff's adviser and a copy of a statement that the plaintiff had made. In the submission, the plaintiff's adviser described the plaintiff's claims as having two bases. First, the adviser submitted that the plaintiff feared that, if he was returned to his country of nationality (Sri Lanka), he would suffer persecution or substantial discrimination amounting to a gross violation of human rights (or both) at the hands of Sri Lankan authorities or "pro-government paramilitary groups". The submission stated that the feared persecution or discrimination was on account of six matters (including ethnicity and imputed political opinion on account of his brother's membership of the Liberation Tigers of Tamil Eelam β "LTTE"). The submission went on to state a second and separate claim. It said that country information indicated that the plaintiff also faced a risk of harm on account of "his profile as a shop owner" and on account of his membership of particular social groups: "Tamil business owners" or "Tamils who are perceived to be wealthy". The plaintiff referred in his statement to the matters which were said to demonstrate the foundation of this second claim. In his reasons, the reviewer considered the first set of claims. He did not examine, and did not refer in his reasons, to the second claim. The third point to notice about the reviewer's reasons is that he did not accept that the plaintiff had left his country, and could not return there, for the reasons he claimed. An important basis for the conclusion that the plaintiff's Crennan Bell fears were not well founded was information provided to the reviewer by the Department as country information. In the course of the reviewer's interviewing the plaintiff, none of that country information was put to the plaintiff. In particular, none of the propositions recorded in the reviewer's reasons β that groups whom the plaintiff said he feared were now joining and integrating into the mainstream of politics, that magistrates and judges were ordering the release of LTTE suspects, and that the way in which the authorities dealt with persons returning to Sri Lanka did not accord with the plaintiff's description of his treatment on return from Egypt in 2008 β were raised with him or his adviser for their comment or consideration. Reviewable error? Each aspect of the reviewer's reasons that has been noted reveals error. First, the determination of whether Australia had protection obligations to the plaintiff was to be made according to law. It is an essential characteristic of the judicature established by Ch III that it declares and determines the limits of power conferred by statute upon decision-makers39. The various legislative powers for which the Constitution provides are expressed as being "subject to" the Constitution and thus to the operation of Ch III, in particular to the exercise of jurisdiction conferred by s 7540. The reasoning supporting decisions made in particular controversies acquires a permanent, larger and general dimension as an aspect of the rule of law under the Constitution41. One of the powers whose exercise was being considered was the power to lift the bar under s 46A and permit the plaintiff to make a valid application for a protection visa. Exercise of that power on the footing that Australia owed that protection obligations the plaintiff would be pointless unless 39 Enfield City Corporation v Development Assessment Commission (2000) 199 CLR 40 Darling Casino Ltd v NSW Casino Control Authority (1997) 191 CLR 602 at 632; [1997] HCA 11. 41 Pape v Federal Commissioner of Taxation (2009) 238 CLR 1 at 69 [158]; [2009] HCA 23. Crennan Bell determination was made according to the criteria and principles identified in the Migration Act, as construed and applied by the courts of Australia. For the purposes of the Minister considering the exercise of power under s 46A, what the RSA Manual and the IMR Manual both referred to as "Australian legislation and relevant case law" had, therefore, to be treated as binding upon those who made the assessments and those who reviewed those assessments, not just as "aid[s] to the interpretation of the Refugees Convention". Although expressed generally β as whether Australia owed the plaintiff protection obligations β the fundamental question to which the assessment and review processes were directed had to be understood as whether the criterion stated in s 36(2)42, as a criterion for grant of a protection visa, was met. Necessarily, that question had to be understood by reference to other relevant provisions of the Migration Act, and the decided cases that bear upon those provisions. If the legislation and case law were treated as no more than aids to interpretation, the assessment or review would not address the question that the Minister had to consider when deciding whether to lift the bar under s 46A. Whether another, different, question about the application of the Refugees Convention (as amended) according to some understanding of the Convention different from that adopted in Australian legislation and case law could be relevant to the issues presented by the possible application of s 195A need not be considered. 42 Section 36(2) provides: "A criterion for a protection visa is that the applicant for the visa is: a non-citizen in Australia to whom the Minister is satisfied Australia has protection obligations under the Refugees Convention as amended by the Refugees Protocol; or a non-citizen in Australia who is a member of the same family unit as a non-citizen who: is mentioned in paragraph (a); and (ii) holds a protection visa." Crennan Bell Second, failing to address one of the claimed bases for the plaintiff's fear of persecution meant that the Minister was not informed about a matter that bore upon the question that the Minister had asked to be considered: whether Australia owed the plaintiff protection obligations. The failure to deal with the claim was a denial of procedural fairness43. Third, procedural fairness required the reviewer to put before the plaintiff the substance of matters that the reviewer knew of and considered may bear upon whether to accept the plaintiff's claims. The Migration Act makes special provision about how the Refugee Review Tribunal is to conduct its reviews. It provides44 that the Tribunal must give an applicant "clear particulars of any information that the Tribunal considers would be the reason, or a part of the reason, for affirming the decision that is under review". But that obligation is subject to qualifications. In particular, it does not extend45 to information "that is not specifically about the applicant or another person and is just about a class of persons of which the applicant or other person is a member". Hence country information is treated as a class of information which need not be drawn to the attention of applicants for review by the Refugee Review Tribunal. But those provisions were not engaged in respect of Independent Merits Reviews of the kind now under consideration or, we would add, in respect of the initial Refugee Status Assessments. The reviewer should have put to the plaintiff for his consideration and comment those aspects of country information known to the reviewer which the reviewer considered may bear upon the claims the plaintiff made. He did not. What follows from these conclusions will be considered later in these reasons under the heading "What relief may be granted?". Before dealing with that subject, it is necessary to undertake the same kind of analysis of the case of Plaintiff M69 as has just been made in relation to Plaintiff M61. 43 Dranichnikov v Minister for Immigration and Multicultural Affairs (2003) 77 ALJR 1088 at 1092 [24], 1102 [95]; 197 ALR 389 at 394, 408; [2003] HCA 26. 44 s 424A(1). 45 s 424A(3)(a). Crennan Bell Plaintiff M69 β Procedural fairness and error of law Plaintiff M69 made a number of complaints about want of procedural fairness and error of law. Although his submissions were directed to both the recommendation made at the end of the Refugee Status Assessment and the Independent Merits Review, attention can be confined latter recommendation. And having regard to what has already been said in relation to similar complaints by Plaintiff M61, the treatment of the complaints made by Plaintiff M69 may be quite brief. the Plaintiff M69 alleged that the third defendant (the reviewer) made the same error of law as was made in the case of Plaintiff M61 by treating the Migration Act and decided cases as no more than guides to determining the issues presented. The plaintiff further alleged that he, like Plaintiff M61, had been denied an opportunity to deal with adverse country information. He further alleged that, after the reviewer had completed her review, but before the plaintiff was notified of its result, the plaintiff made a sur place claim. That claim arose out of the broadcasting of some images of persons in immigration detention who were being moved from Christmas Island to a detention centre on the mainland. The plaintiff's sur place claim was not considered by the reviewer. The reviewer's reasons In her reasons, the reviewer made a deal of reference to country information concerning the state of affairs in the plaintiff's country of origin (Sri Lanka) and, in particular, the Jaffna district and a hospital at which the plaintiff said he had worked. She concluded that this, and other country information, supported the conclusion that the plaintiff was not at risk for the reasons he claimed. The reviewer relied on country information available to her to conclude, contrary to the plaintiff's contention, that the plaintiff's illegal exit from Sri Lanka did not put him at risk. Reviewable error? It is sufficient for present purposes to conclude that, for the reasons given in connection with Plaintiff M61, the first and second complaints made on behalf of Plaintiff M69 were made good. It is not necessary to consider any of the other ways in which the plaintiff put his case. Crennan Bell For the reasons given in relation to Plaintiff M61, the reviewer made an error of law by treating the Migration Act and decided cases as no more than guides to decision making. As for want of procedural fairness, it may well be that some of the facts said to be revealed by country information were sufficiently put to the plaintiff or his adviser for comment. It is plain, however, that the reviewer did not put to the plaintiff country information she had before her concerning the treatment of failed asylum seekers returning to Sri Lanka. Not putting the substance of the country information to the plaintiff for his consideration and comment denied him procedural fairness. What relief may be granted? Because ss 46A and 195A both state, in terms, that the Minister does not have a duty to consider whether to exercise the power given by the section, mandamus will not issue to compel the Minister to consider or reconsider exercising either power. That the Minister decided to consider exercising the powers and, for that purpose, directed the making of Refugee Status Assessments and Independent Merits Reviews does not entail that, if the process of inquiry miscarried, the Minister can be compelled again to consider exercising the power. As was explained in Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Applicants S134/200246, the unavailability of mandamus entails that there is no utility in granting certiorari to quash the recommendation which the reviewer made in each of these matters. It is thus not necessary to consider whether certiorari to quash the recommendations would lie. More particularly, it is not necessary to examine whether, as was submitted47 on behalf of the Commonwealth and the Minister, certiorari will not go to quash a 46 (2003) 211 CLR 441 at 461 [48]; [2003] HCA 1. 47 Referring to R v Collins; Ex parte ACTU-Solo Enterprises Pty Ltd (1976) 50 ALJR 471 at 475; 8 ALR 691 at 699; Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 580-581, 595; [1992] HCA 10; Hot Holdings Pty Ltd v Creasy (1996) 185 CLR 149 at 159-165, 178-180; [1996] HCA 44; R v Criminal Injuries Compensation Board; Ex parte Lain [1967] 2 QB 864 at 888. Crennan Bell decision or recommendation prior to the final exercise of a discretion that directly affects legal rights unless that decision or recommendation must be taken into account by the ultimate decision-maker. (In considering the exercise of power under either s 46A or s 195A, the Minister might, but need not, take account of the recommendations made by those who had conducted an assessment or review of an assessment of an offshore entry person's claim that Australia owes that person protection obligations.) Nor is it necessary to examine whether, or how, the proposition advanced on behalf of the Commonwealth and the Minister, expressed as it is in absolute terms, might permit or require modification to accommodate cases such as the present, where the right that is affected by conducting the impugned process of decision making is a right to liberty. The claims to certiorari and mandamus must be refused. Although the plaintiffs' claims for certiorari and mandamus should be rejected, a declaration should be made in each case that the processes undertaken to arrive at the reviewer's recommendation were flawed in the respects that have been identified. In many cases, the conclusion that certiorari and mandamus do not lie would require the further conclusion that no declaration of right should be made. Why should a declaration be made in these matters? The power to grant declaratory relief is a power which "[i]t is neither possible nor desirable to fetter ... by laying down rules as to the manner of its exercise"48. As pointed out in Ainsworth v Criminal Justice Commission49, it is a form of relief that is confined by considerations which mark out the boundaries of judicial power. In the circumstances of this litigation it cannot be said that a declaratory order by the Court will produce no foreseeable consequences for the parties50. Declaratory relief is directed here to determining a legal controversy; it is not 48 Forster v Jododex Aust Pty Ltd (1972) 127 CLR 421 at 437; [1972] HCA 61; Ainsworth (1992) 175 CLR 564 at 581-582. 49 (1992) 175 CLR 564 at 582. See also Pape (2009) 238 CLR 1 at 68 [152]. 50 Gardner v Dairy Industry Authority (NSW) (1977) 52 ALJR 180 at 188 per Mason J, 189 per Aickin J; 18 ALR 55 at 69, 71. Crennan Bell directed to answering some abstract or hypothetical question51. Each plaintiff has a "real interest"52 in raising the questions to which the declaration would go. In these cases, the procedures which are said to be infirm were conducted for the purpose of informing the Minister of matters directly bearing upon the exercise of power to avoid breach by Australia of its international obligations. The statutory powers to the exercise of which the inquiries were directed are placed in the statutory and historical context earlier described. That context demonstrates the importance attached to the performance of the relevant international obligations by both the legislative and executive branches of the Government of the Commonwealth. Moreover, there is a considerable public interest in the observance of the requirements of procedural fairness in the exercise of the relevant powers53. Accordingly, each plaintiff should have a declaration moulded in terms similar to the declaration made by this Court in Ainsworth. Orders In each matter there should be a declaration that, in recommending to the Minister that the plaintiff was not a person to whom Australia has protection obligations, the third-named defendant made an error of law, in that he (or in the matter of Plaintiff M69, she) did not treat the provisions of the Migration Act 1958 (Cth) and the decisions of Australian courts as binding, and further, failed to observe the requirements of procedural fairness. The Commonwealth and the Minister should pay the plaintiffs' costs. Otherwise, each application should be dismissed. 51 Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 at 355-356 [46]-[47]; [1999] HCA 9. 52 Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd [1921] 2 AC 438 at 448, quoted with approval in Forster (1972) 127 CLR 421 at 53 Cf Gedeon v Commissioner of New South Wales Crime Commission (2008) 236 CLR 120 at 134 [25]; [2008] HCA 43. Crennan Bell |
HIGH COURT OF AUSTRALIA AND APPELLANT VELIKA TRAYANS RESPONDENT Pipikos v Trayans [2018] HCA 39 12 September 2018 ORDER Appeal dismissed with costs. On appeal from the Supreme Court of South Australia Representation G O'L Reynolds SC with M J O'Meara and P A R Scragg for the appellant (instructed by Peter Scragg & Associates) D M J Bennett QC, A L Tokley SC and S J White for the respondent Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Pipikos v Trayans Equity β Doctrine of part performance β Where respondent sole registered proprietor of property purchased by respondent and her husband β Where respondent and her husband made improvements to property β Where appellant claimed agreement between appellant and respondent entitled appellant to half-interest in unimproved land β Where alleged agreement did not meet formality requirements of s 26(1) of Law of Property Act 1936 (SA) β Where s 26(2) of Law of Property Act provides that s 26 does not affect law relating to part performance β Whether acts of part performance entitled appellant to specific performance of alleged agreement β Whether acts of part performance must be unequivocally, and in their own nature, referable to agreement of kind alleged β Whether sufficient for purposes of doctrine of part performance to establish that contracting party has knowingly been induced or allowed by counterparty to alter his or her position on faith of contract. Words and phrases β "enforcement of equities", "equitable estoppel", "equitable fraud", "equity of the statute", "fraud", "parol contract", "part performance", "specific performance", "Statute of Frauds", "unequivocally referable". Law of Property Act 1936 (SA), s 26. KIEFEL CJ, BELL, GAGELER AND KEANE JJ. South Australia, in common with the other States and the Territories1, requires that contracts for the sale of land meet certain formal requirements to be enforceable. Section 26(1) of the Law of Property Act 1936 (SA) ("the Act"), the modern iteration of s 4 of the Statute of Frauds 16772, relevantly provides that: they are "No action shall be brought upon any contract for the sale or other disposition of land or of any interest in land, unless an agreement upon which such action is brought, or some memorandum or note thereof, is in writing, and signed by the party to be charged". Section 26(2) of the Act provides relevantly that the section does not "affect the law relating to part performance". In Cooney v Burns3, Isaacs J summarised the law relating to part performance as being that a "bargain in fact made, though devoid of an enforceability either at law or in equity, has been so acted upon by partly performing it that for the defendant to recede from it at that stage would be a fraud on the plaintiff." (emphasis in original) In Maddison v Alderson, the Earl of Selborne LC said4 that "the acts relied upon as part performance must be unequivocally, and in their own nature, referable to some such agreement as that alleged". The appellant submitted that it is unduly demanding of a party seeking specific performance of a parol contract for the sale of land to require that the acts of part performance be "unequivocally, and in their own nature, referable" to a contract of the kind asserted by the party seeking specific performance; and that in this case the courts below erred in adhering to this requirement. The appellant urged the adoption of a more relaxed approach, akin to the approach taken in the context of equitable estoppel, said to have been 1 Conveyancing Act 1919 (NSW), s 54A; Property Law Act 1974 (Q), s 59; Conveyancing and Law of Property Act 1884 (Tas), s 36; Instruments Act 1958 (Vic), s 126; Law Reform (Statute of Frauds) Act 1962 (WA), s 2; Civil Law (Property) Act 2006 (ACT), s 204; Law of Property Act (NT), s 62. 2 29 Car II c 3. (1922) 30 CLR 216 at 233; [1922] HCA 8. See also at 226 per Knox CJ. (1883) 8 App Cas 467 at 479. See also at 491 per Lord FitzGerald. adumbrated by Lord Cranworth LC in Caton v Caton5. On the appellant's argument, the question a court must ask is whether a contracting party has knowingly been induced or allowed by the counterparty to alter his or her position on the faith of the contract. The resolution of this argument is the principal issue in this Court. The appellant's argument that the requirement of unequivocal referability stated by Lord Selborne in Maddison v Alderson should be relaxed must be rejected for the reasons which follow. Accordingly, the appeal must be dismissed. Against the possibility that the appeal might succeed, the respondent sought special leave to argue by way of cross-appeal that the Full Court of the Supreme Court of South Australia erred in overturning the trial judge's conclusion that no contract had been concluded between the appellant and the respondent. It was conceded on behalf of the respondent that special leave to cross-appeal should be granted only if this Court were disposed to allow the appeal. That concession was correctly made. The proposed cross-appeal would involve an extensive review of the evidence and of the particular findings of fact made by the courts below rather than the consideration of an issue of principle of general importance. Only if the appeal were to be allowed without resolution of the issue raised by the cross-appeal would the interests of justice warrant this Court entertaining the cross-appeal. There being no sufficient basis to warrant the grant of special leave to permit the cross-appeal to proceed, the application for leave to cross-appeal was dismissed at the conclusion of the argument of the appeal. Background The appellant is the former brother-in-law of the respondent. In 2002, the respondent and her then husband ("George"), who is the appellant's brother, purchased a property at Clark Road, Virginia, South Australia. George and the respondent built a house on, and made other improvements to, the land. The (1866) LR 1 Ch App 137 at 148. respondent was the sole registered proprietor of the property6. The property was subject to a registered mortgage to a financier7. In February 2004, George signed a contract to purchase a parcel of land at Taylors Road, Virginia for $299,500. The brothers agreed to purchase the property together. The purchase was largely financed by way of a loan from Suncorp, with the appellant, his wife ("Sophie"), George and the respondent contributing equally to the balance of the purchase price and to the transaction costs. The appellant and Sophie jointly held a half-interest in the property, whereas George held the other half in his name alone8. In July 2004, the appellant, Sophie, George and the respondent acquired a parcel of land at Penfield Road, Virginia for $260,000. George signed the contract, which named him or his nominee as purchasers. The memorandum of transfer provided that the property be transferred to the appellant, Sophie, George and the respondent as tenants in common, with each couple holding a half-share as joint tenants. The purchase was financed in part by way of a loan from a financier to the appellant, Sophie, George and the respondent secured by a mortgage. The appellant and Sophie paid the deposit and the balance of the purchase price, which together totalled $74,883.629. George and the respondent continued to live at Clark Road after 2004. They paid the mortgage on the property, as well as all other outgoings. They did not pay any rent or otherwise account to the appellant for their occupation of the In 2008, the mortgagee served default notices in respect of the mortgages on both the Clark Road and the Penfield Road properties. The appellant paid the 6 Pipikos v Trayans [2015] SADC 149 at [24]; Pipikos v Trayans (2016) 126 SASR 7 Pipikos v Trayans [2015] SADC 149 at [25]. 8 Pipikos v Trayans [2015] SADC 149 at [27]-[28]; Pipikos v Trayans (2016) 126 SASR 436 at 439-440 [11]. 9 Pipikos v Trayans [2015] SADC 149 at [29]; Pipikos v Trayans (2016) 126 SASR 10 Pipikos v Trayans [2015] SADC 149 at [31]; Pipikos v Trayans (2016) 126 SASR arrears on each mortgage in late 2009. When the loans fell into arrears again in 2012, the mortgagee instituted proceedings for the possession and sale of the properties. Those proceedings were discontinued when the arrears were discharged11. On 3 August 2009, the respondent signed, at the appellant's request, a handwritten note agreeing that the appellant was "the owner of half of the [Clark Road] land β¦ via an agreement between George Pipikos and Leon Pipikos of [sic] the purchase of Penfield Road, Virginia property"12. In July 2012, the appellant lodged a caveat on the Clark Road property, claiming a half-interest, enforceable in equity, in the "unimproved land". In September 2012, after the respondent applied to have the caveat removed, the appellant instituted proceedings in the District Court of South Australia in which he sought a declaration that the respondent holds a half- interest in the Clark Road property on trust for him or, alternatively, an order that he be registered as a joint proprietor of "one undivided moiety" of the Clark Road property13. Before summarising the course of the proceedings instituted by the appellant, it is necessary to mention some other matters of background. George and the respondent separated and, in October 2013, consented to the making of a matrimonial property settlement in the Family Court of Australia. In that settlement, George surrendered his interests in the Clark Road, Taylors Road and Penfield Road properties to the respondent, who assumed his liabilities in relation to those properties14. 11 Pipikos v Trayans [2015] SADC 149 at [33], [35]-[37]; Pipikos v Trayans (2016) 126 SASR 436 at 440 [17]. 12 Pipikos v Trayans [2015] SADC 149 at [34]; Pipikos v Trayans (2016) 126 SASR 13 Pipikos v Trayans [2015] SADC 149 at [38], [46]; Pipikos v Trayans (2016) 126 SASR 436 at 440 [18]. 14 Pipikos v Trayans [2015] SADC 149 at [23], [39]; Pipikos v Trayans (2016) 126 SASR 436 at 440 [16], [19]. The Taylors Road and Penfield Road properties were rented out, with George initially collecting the rent and making the payments on the mortgages and outgoings. A dispute arose when George appropriated some of the rent for his own purposes. By 2014, the appellant had taken over the rent collection on the Taylors Road property. In about July 2014, the appellant stopped applying the rent to the Taylors Road mortgage15. In February 2014, the appellant, Sophie and the respondent consented to the sale of all three properties. As at the date of the judgment of the court below, the Clark Road property had not yet been sold16. The trial At trial in the District Court of South Australia, the first issue was whether an agreement was concluded between the appellant and the respondent, pursuant to which the appellant was entitled to a half-interest in the unimproved land at Clark Road. The appellant claimed that in July 2004 he and George had agreed that the appellant would acquire half of the respondent's interest in the Clark Road property (but not the improvements) for $45,000, to be paid largely by way of funding of George and the respondent's share in the purchase of the Penfield Road property. The appellant gave evidence that an oral agreement was made during an inspection of the Penfield Road property, and then in a discussion at Clark Road immediately after the inspection. He said that he and Sophie had decided to purchase the property, and that George said that he wanted to be partners on the property. The appellant said that he told George that he would have to contribute between $35,000 and $40,000 upfront if he wanted to purchase a half-interest in the property. He said that George responded that he did not have sufficient funds available but suggested that they could do a deal whereby a half-interest in the Clark Road property could be sold to the appellant and then the brothers together with their respective spouses would each own a half-share in all three properties. The appellant said that he and George agreed that the value of the unimproved land of the Clark Road property was approximately $80,000 to $90,000, and therefore settled on a purchase price of $45,000. The appellant relied on the note 15 Pipikos v Trayans [2015] SADC 149 at [30], [40]; Pipikos v Trayans (2016) 126 SASR 436 at 440 [14], 441 [20]. 16 Pipikos v Trayans [2015] SADC 149 at [41], [43]; Pipikos v Trayans (2016) 126 SASR 436 at 441 [21]. signed by the respondent on 3 August 2009 as supporting his evidence of the making of the agreement. The second issue at trial was whether, despite the circumstance that the agreement did not meet the formalities required by s 26(1) of the Act, the doctrine of part performance entitled the appellant to a decree of specific performance of the agreement. In this regard, the appellant contended that, by operation of the doctrine of part performance, he was entitled to a decree of specific performance requiring the respondent to convey a half-interest in Clark Road to him, subject to an obligation that he account to George and the respondent for the value of any improvements. The appellant relied upon the following acts of part performance: the payment of the deposit and the balance of the purchase price for the Penfield Road property; the payment of $7,500 to $8,000 to George; the payment in December 2009 of $2,500 on the Clark Road mortgage; and the attempts to document or enforce the agreement by way of the respondent's signed note of 3 August 2009, the lodging of a caveat and the institution of the proceedings. The trial judge determined both questions in the negative. As to the first issue, her Honour noted that there was no contemporaneous record of the alleged agreement, nor any subsequent attempt to register or record the interest alleged by the appellant. The trial judge observed, too, that there was a degree of uncertainty in relation to the terms of the alleged agreement, including a failure to identify with precision either the parties to the agreement or its precise terms17. Further, the judge noted that the appellant's alleged interest in the land, but not the improvements on the land, was not one that was recognised by the law: the fixtures on land are subsumed within the estate in fee simple18. The appellant had attempted to overcome this difficulty by arguing that his interest would crystallise only upon sale of the Clark Road property, but the trial judge said that the appellant's own evidence about his discussions with the respondent and George did not suggest that the agreement had been framed in this way, and that this term was itself inconsistent with the appellant being entitled to a present 17 Pipikos v Trayans [2015] SADC 149 at [95], [98]; see also at [61], [116]. 18 Pipikos v Trayans [2015] SADC 149 at [112]. 19 Pipikos v Trayans [2015] SADC 149 at [109]-[113]. The trial judge found that the circumstance that the appellant and Sophie paid the entire owners' contribution to the purchase price of the Penfield Road property, together with the transaction costs, was not compelling evidence of an agreement between the appellant and the respondent as to the sale of an interest in Clark Road, particularly in light of the appellant and George's substantial history of business transactions20. The trial judge, despite concluding that no contract in the terms asserted by the appellant was binding upon the respondent, proceeded to deal with whether the appellant would have been entitled to a decree of specific performance vindicating his asserted interest in the Clark Road property. The trial judge quoted Lord Selborne's speech in Maddison v Alderson in support of the proposition that the acts of part performance had to be "unequivocally, and in their own nature, referable to some such agreement as that alleged"21; and proceeded to hold that the acts said by the appellant to constitute part performance were not unequivocally referable to a contract of the kind asserted by him. In particular, the trial judge held that the payment of the deposit and the balance of the price for the Penfield Road property was consistent with a loan to the respondent and George, or an unequal contribution to the brothers' partnership that, either way, would eventually be brought to account between them; that the payment to George of $7,500 to $8,000 had not been proved; that the payment on the Clark Road mortgage was consistent with a loan to be repaid; and that the attempts at documentation, including obtaining the note signed by the respondent on 3 August 2009, were not acts of performance of any agreement but attempts by the appellant to enforce his claim22. The Full Court The Full Court overturned the trial judge's conclusion that the alleged agreement had not been established, but held that the requirements of the doctrine of part performance were not satisfied. On that basis, the appellant's appeal was dismissed. 20 Pipikos v Trayans [2015] SADC 149 at [96]. 21 (1883) 8 App Cas 467 at 479, quoted in Pipikos v Trayans [2015] SADC 149 at 22 Pipikos v Trayans [2015] SADC 149 at [108]. As to part performance, Kourakis CJ, with whom Kelly and Hinton JJ agreed, held that acts of part performance must be unequivocally referable to a contract whose terms are consistent with those of the asserted contract23; and that although the House of Lords had taken a more liberal approach in Steadman v Steadman24, Australian courts had not followed suit25. Kourakis CJ held that the purchase of the Penfield Road property was not unequivocally referable to an agreement of the kind asserted, because the purchase of the Penfield Road property was "complete in itself", and the payment by the appellant and Sophie of George and the respondent's share of the owners' contribution to the purchase price could be "the manifestation of any number of arrangements and contracts"26. The appellant now appeals against the Full Court's conclusion that the doctrine of part performance was not engaged. The appellant's submissions The appellant submitted that underlying the doctrine of part performance is the concern of equity to prevent unconscientious or fraudulent reliance on the Statute of Frauds to avoid enforcement of a contract on which a party has been allowed or induced to rely to his or her detriment27. The appellant argued that he had relied on the contract in relation to the Clark Road property in agreeing to finance George and the respondent's portion of the owners' contribution to the Penfield Road property, so that it would be unconscientious or fraudulent to deny enforcement of the Clark Road contract. The appellant argued that the approach of Lord Selborne in Maddison v Alderson was flawed in that it focused upon a concern about the evidence required to prove the parol contract. The true basis of the doctrine, the appellant submitted, is the concern, discussed by Lord Cranworth LC in Caton v Caton, to prevent unconscientious conduct. 23 Pipikos v Trayans (2016) 126 SASR 436 at 460-461 [94]-[95]. 25 Pipikos v Trayans (2016) 126 SASR 436 at 462 [98]. 26 Pipikos v Trayans (2016) 126 SASR 436 at 462 [100]. 27 Citing Regent v Millett (1976) 133 CLR 679 at 682; [1976] HCA 40. It was also said that the doctrine of part performance should be extended to the circumstances of the present case consistently with liberalising trends in the development of the law of equitable estoppel. The appellant argued that the course of authority in Australia did not preclude acceptance of his argument. In particular, he argued that the "unequivocal referability" test had never formed part of the ratio decidendi of a decision of this Court. It is convenient to address this aspect of the appellant's argument immediately and then to discuss the issues of principle agitated in the course of argument. The Australian authorities At the forefront of the appellant's argument in this Court was the contention that in Regent v Millett28 Gibbs J, with whom Stephen, Mason, Jacobs and Murphy JJ agreed, expressed a preference for a more liberal approach to the availability of part performance as a basis for the enforcement of a parol contract for the sale of land than that stated by Lord Selborne in Maddison v Alderson. This contention was based on the circumstance that Gibbs J said29 that "[t]he principle upon which the doctrine of part performance rests was stated by Lord Cranworth, Lord Chancellor in Caton v Caton30 in words which appear to have a direct application to the present case". The passage then cited by Gibbs J was in the following terms31: "[W]hen one of two contracting parties has been induced, or allowed by the other, to alter his position on the faith of the contract, as for instance by taking possession of land, and expending money in building or other like acts, there it would be a fraud in the other party to set up the legal invalidity of the contract on the faith of which he induced, or allowed, the person contracting with him to act, and expend his money." 28 (1976) 133 CLR 679. 29 (1976) 133 CLR 679 at 682. 30 (1866) LR 1 Ch App 137. 31 (1866) LR 1 Ch App 137 at 148. It is apparent that Gibbs J regarded this statement as having a direct application to the case before him because it supported the proposition that32: "the entry into possession alone, or the taking of possession coupled with the expenditure of money by one party on the improvement of property, with the cognizance of the other party to the contract, may amount to part performance". On this basis, Gibbs J held that, in the case before him, "the giving and taking of possession by itself was sufficient part performance of the contract"33. Nothing in the use made of Caton v Caton by Gibbs J in Regent v Millett gives any support for the relaxation of the approach of Lord Selborne in Maddison v Alderson. On the contrary, Gibbs J went on to say34: "the test suggested by the Earl of Selborne LC in [Maddison v Alderson]35, that the acts relied upon as part performance 'must be unequivocally, and in their own nature, referable to some such agreement as that alleged', has been consistently accepted as a correct statement of the law. It is enough that the acts are unequivocally and in their own nature referable to some contract of the general nature of that alleged (see McBride v Sandland36)." It is simply not possible to understand these observations as expressing reservation or doubt about the correctness of Lord Selborne's statement. It is also noteworthy that Gibbs J went on to say37 that the taking of possession was unequivocally referable to the contract even though the contract permitted, but did not require, the plaintiffs to take possession of the land. In other words, his Honour's judgment rejected the suggestion that only an act to the detriment of a plaintiff on the faith of the contract would suffice as an act of part 32 (1976) 133 CLR 679 at 682. 33 (1976) 133 CLR 679 at 683. 34 (1976) 133 CLR 679 at 683. 35 (1883) 8 App Cas 467 at 479. 36 (1918) 25 CLR 69 at 78; [1918] HCA 32. 37 (1976) 133 CLR 679 at 683-684. performance. As will be seen, the decision in Regent v Millett differs, in this respect, from the approach of Lord Reid in Steadman v Steadman38. Earlier decisions of the High Court also support the view that Lord Selborne's requirement of unequivocal referability is to be taken as a correct statement of the law. In McBride v Sandland39, Isaacs, Rich and Powers JJ accepted Lord Selborne's statement of the law; and in Cooney v Burns40, Knox CJ, Isaacs, Higgins, Gavan Duffy and Starke JJ did likewise. It is true that, in McBride v Sandland41, Isaacs and Rich JJ accepted that an act of part performance must be done "by the party relying on it on the faith of the agreement, and β¦ the other party must have permitted it to be done on that footing" if the moral turpitude that is the "ground of jurisdiction" is to be established. That view may not accord with what Lord Selborne actually said or with the decision in Regent v Millett. But otherwise there can be no doubt that in Australia Lord Selborne's statement of the law in Maddison v Alderson is unshaken by the course of authority in this Court. the appellant's contention that Lord Selborne's unequivocal referability requirement has not been the reason for the decision of any case in this Court, it would be difficult, to say the least, to reconcile a decision in the appellant's favour in this case with this Court's decision in Cooney v Burns. In that case, the defendant agreed to sell to the plaintiff the lease of a hotel of which the defendant was the lessee. After the contract was made, the lease of the hotel was handed to the plaintiff's solicitors for the purpose of having an assignment of the lease prepared together with notices of an application for the transfer of the associated liquor licence. The plaintiff's solicitors proceeded to prepare an assignment of the lease and the notices of application. An inventory of the furniture included in the sale was also taken. The plaintiff incurred expense in relation to these steps. These acts on the part of the plaintiff were held to be insufficient as acts of part performance in that they did not alter the relative positions of the parties in relation to the land the subject of the contract in terms 38 [1976] AC 536 at 540. 39 (1918) 25 CLR 69 at 77-79, 98-99. 40 (1922) 30 CLR 216 at 223, 229-231, 239, 243, 243-244. 41 (1918) 25 CLR 69 at 79. of the title to, or possession of, or use of that land42. The same may be said of the acts of part performance relied upon in this case by the appellant. A rule of evidence or a principle of substance? It was common ground between the parties in the present case that the rationale of the doctrine of part performance is not concerned with the proof of the contract but with the enforcement of equities arising from the partial performance of the contract. On the appellant's behalf, it was argued that the requirement of unequivocal referability is a vestige of the tenacious heresy that the doctrine of part performance is concerned with the proof of the parol contract by a process of inference from the acts of part performance. It was said that Lord Selborne had erred by applying rules of Chancery procedure that had, by the time of Maddison v Alderson, been repealed, and that this had led to courts treating the requirement of unequivocal referability as a substantive rule when, in truth, it was an erroneously invoked rule of evidence. It is true that some statements in the cases are far from clear as to the rationale of the doctrine of part performance. In some of the cases, the basal principle is stated in terms of a concern to enforce the equities that have arisen by reason of the performance of obligations under the parol contract in order to prevent the equitable fraud that would occur if the defendant were allowed to resile from a partly completed transaction43. On this view, as Pomeroy says44, the ground of equitable intervention is "a fraud inhering in the consequence of setting up the statute as a defense". In other cases, the principle has been stated in terms of a concern that evidence is necessary to satisfy a peculiarly high standard of proof to establish the fact of the making of a parol contract for the sale of land45. In Corbin on 42 (1922) 30 CLR 216 at 235, 241-242, 243, 244-245. 43 Caton v Caton (1866) LR 1 Ch App 137 at 148; Maddison v Alderson (1883) 8 App Cas 467 at 475-476, 489; Steadman v Steadman [1976] AC 536 at 540, 542-543, 558, 568; Regent v Millett (1976) 133 CLR 679 at 682. 44 Symons, Pomeroy's Equity Jurisprudence, 5th ed (1941), vol 4, Β§1409. See also Story, Commentaries on Equity Jurisprudence, as Administered in England and America, 13th ed (1886), vol 2, §§754 and 758. 45 Morphett v Jones (1818) 1 Swans 172 at 181 [36 ER 344 at 348]; Maddison v Alderson (1883) 8 App Cas 467 at 479, 485; Thomas v The Crown (1904) 2 CLR 127 at 138; [1904] HCA 29; Maiden v Maiden (1909) 7 CLR 727 at 737-738; (Footnote continues on next page) Contracts46, in relation to the requirement that the acts of part performance be unequivocally referable to some such contract as that alleged by the plaintiff, it is said that the "principal idea that is struggling for expression is that the part performance must be clearly evidential of the existence of a contract". The view that the court enforces the equities arising from partial performance, rather than the rights conferred by the parol contract itself, while attended with a degree of subtlety, has the powerful merit of being consistent with the Statute of Frauds. The view that part performance is concerned with matters of proof of the parol contract cannot stand with the Statute of Frauds, the evident purpose of which is to prevent the enforcement of a parol contract, however clear may be the proof of its making. It is not correct to say that Lord Selborne's statement of principle evinces the view that part performance operates as acceptable evidence of the parol contract in question in place of the writing required by the statute. When Lord Selborne spoke of acts "unequivocally β¦ referable" to "some such agreement"47, his Lordship was not speaking of the particular contract in question. The very circumstance that Lord Selborne spoke of referability to "some such agreement" itself suggests that the requirement is not concerned with proof of the particular contract in question, but with dealings between the parties which in their nature establish that the parties are in the midst of an uncompleted contract for the sale or other disposition of land. Given that part performance is relevant only in relation to contracts for the sale or other disposition of land48, it is not difficult to appreciate that the acts described by Lord Selborne are acts unequivocally and inherently referable to a transaction for the sale or other disposition of the land. Lord Selborne was clear that unequivocal referability is concerned with the proof of acts partially executing a transaction that remains uncompleted, and that proof of the agreement that had been made was not required to show the equity to have the transaction completed. [1909] HCA 16; Chaproniere v Lambert [1917] 2 Ch 356 esp at 361; Kingswood Estate Co Ltd v Anderson [1963] 2 QB 169 at 189. See also Actionstrength Ltd v International Glass Engineering IN.GL.EN SpA [2003] 2 AC 541 at 549-550 46 Brown, Corbin on Contracts, rev ed (1997), vol 4 at 521. 47 Maddison v Alderson (1883) 8 App Cas 467 at 479. 48 cf Heydon, Leeming and Turner, Meagher, Gummow and Lehane's Equity: Doctrines and Remedies, 5th ed (2015) at 684. It is significant in this respect that Lord Selborne expressly adopted49 the statement of Sir James Wigram V-C in Dale v Hamilton50 that it is in general of the essence of an act of part performance: "that the Court shall, by reason of the act itself, without knowing whether there was an agreement or not, find the parties unequivocally in a position different from that which, according to their legal rights, they would be in if there were no contract." (emphasis added) In a case where the parties are found, as a matter of fact, to be in that position, equity requires that the transaction be completed notwithstanding the objection of the defendant that the contract itself cannot be enforced by reason of non-compliance with the Statute of Frauds. The requirement for unequivocal referability is essential to Lord Selborne's thesis that the court is not enforcing the contract β that would be contrary to the Statute of Frauds β but the equities generated by its partial performance. It is only where the acts of part performance are inherently and unequivocally referable to such a contract that it cannot be objected that, in truth, and contrary to the legislation, it is the parol contract that is being enforced. In Burns v McCormick51, Cardozo J explained the essential requirement this way: "There must be performance 'unequivocally referable' to the agreement, performance which alone and without the aid of words of promise is unintelligible or at least extraordinary unless as an incident of ownership, assured, if not existing. 'An act which admits of explanation without reference to the alleged oral contract or a contract of the same general nature and purpose is not, in general, admitted to constitute a part performance.' β¦ What is done must itself supply the key to what is promised. It is not enough that what is promised may give significance to what is done." 49 Maddison v Alderson (1883) 8 App Cas 467 at 479. 50 (1846) 5 Hare 369 at 381 [67 ER 955 at 960]. 51 135 NE 273 at 273 (NY 1922), quoting Woolley v Stewart 118 NE 847 at 848 (NY The equity to have the transaction completed arises where the acts that are proved are consistent only with partial performance of a transaction of the same nature as that which the plaintiff seeks to have completed by specific performance. At that point, regard may be had to the terms of the oral contract in order to ascertain the appropriate orders by way of specific performance. So, in Maddison v Alderson, Lord Selborne stated52 that the terms of the parol contract may be taken into account only when the equity to have the transaction carried to completion has been established and it becomes necessary to establish the terms of the order to be made. At that point53: "The matter has advanced beyond the stage of contract; and the equities which arise out of the stage which it has reached cannot be administered unless the contract is regarded." In McBride v Sandland, Isaacs and Rich JJ explained54 that the logical order in which the issues in a case such as the present should be addressed is first to determine whether the acts performed establish the equity and then, and only then, to refer to the terms of the parol agreement in order to ascertain the terms in which the equity is to be enforced. Applying that reasoning to the present case, because the acts of part performance relied upon by the appellant are consistent with some transaction other than a sale of the Clark Road property, he was not able to show a partially completed sale of the Clark Road property that he was entitled in equity to have fully executed by means of a decree of specific performance. It also follows from the above that the appellant's contention that Lord Selborne erroneously applied repealed rules of Chancery procedure is incorrect, and must be rejected. On the contrary, his Lordship was expounding a rule of substance calculated to avoid Chancery acting in a manner repugnant to the Statute of Frauds. 52 (1883) 8 App Cas 467 at 475-476. 53 (1883) 8 App Cas 467 at 476. 54 (1918) 25 CLR 69 at 77-78. Part performance and equitable estoppel It has been suggested55 that "the modern and divergent rules of proprietary and equitable estoppel β¦ secret trusts β¦ and part performance sprang from [the] common root" that a person may not rely on his or her strict legal rights where to do so is against the conscience of equity. But the appellant's invitation to subsume part performance within the development of equitable estoppel fails to appreciate that, while in some cases the doctrines may have an overlapping operation, they do not cover the same ground. While it may well be that equity's concern to prevent unconscientious conduct is the common root of equitable estoppel and part performance, there are discernible differences in the scope and operation of these doctrines as each has developed in Australia. The first such difference is that part performance may be invoked by a vendor of land to enforce a parol contract56, whereas equitable estoppel is available only against a vendor of land to vindicate the interests of a prospective purchaser57. Next, equitable intervention by way of equitable estoppel to prevent a defendant resiling from a promise that is not enforceable at law is justified, not by the existence of an unperformed or partially performed promise, but by a concern that the plaintiff should not be left to suffer a detriment by the defendant's so resiling58. So, in Waltons Stores (Interstate) Ltd v Maher59 Mason CJ and Wilson J noted that, as a general rule, a "failure to fulfil a promise does not of itself amount to unconscionable conduct" and so "mere reliance on an executory promise to do something, resulting in the promisee changing his 55 Heydon, Gummow and Austin, Cases and Materials on Equity and Trusts, 3rd ed 56 Turner v Bladin (1951) 82 CLR 463 at 473; [1951] HCA 13. 57 Cf Dillwyn v Llewelyn (1862) 4 De G F & J 517 [45 ER 1285]; Ramsden v Dyson (1866) LR 1 HL 129. 58 Giumelli v Giumelli (1999) 196 CLR 101 at 121-122 [35]; [1999] HCA 10; Sidhu v Van Dyke (2014) 251 CLR 505 at 522-523 [58]; [2014] HCA 19. 59 (1988) 164 CLR 387 at 406; [1988] HCA 7. position or suffering detriment, does not bring promissory estoppel into play." In the same case60, Brennan J explained: "The protection which equity extends is analogous to the protection given by estoppel in pais to which Dixon J referred in Grundt v Great Boulder61, ie, protection against the detriment which would flow from a party's change of position if the assumption (or expectation) that led to it were deserted." Thirdly, the nature of the equity enforced by part performance differs from that enforced by equitable estoppel. In some cases of equitable estoppel, the relief granted may require the taking of active steps by the defendant to meet the expectations generated by the transaction62, but in other cases the requirements of good conscience may mean that such an order would not reflect the measure of relief required to protect the plaintiff against the apprehended detriment63. If the doctrine of part performance covered the same ground as equitable or promissory estoppel, one might have expected that there would need to be, in each case where part performance is invoked, an analysis of the extent to which a defendant's attempt to resile from completion of the transaction would result in detriment to the plaintiff, and that the relief granted would be moulded accordingly to prevent that detriment64. But that has not been the case. Indeed, in the case of part performance, as is apparent from this Court's decision in Regent v Millett, there is not even an insistence that there be detrimental reliance on the part of the plaintiff to establish an equity to relief. A defendant's act in putting a plaintiff into possession might not of itself be a detriment to the plaintiff, but there can be no doubt that it is a sufficient act of part performance65. Where part performance is established the plaintiff will be entitled to a decree of specific performance without needing to establish that a lesser form of relief 60 (1988) 164 CLR 387 at 418-419. 61 (1937) 59 CLR 641; [1937] HCA 58. 62 Dillwyn v Llewelyn (1862) 4 De G F & J 517 [45 ER 1285]; Ramsden v Dyson (1866) LR 1 HL 129; Sidhu v Van Dyke (2014) 251 CLR 505 at 529 [82]. 63 The Commonwealth v Verwayen (1990) 170 CLR 394 at 441; [1990] HCA 39; Sidhu v Van Dyke (2014) 251 CLR 505 at 529 [83]. 64 Cf Crabb v Arun District Council [1976] Ch 179 at 198. 65 Regent v Millett (1976) 133 CLR 679 at 682. would be inadequate. In this respect, the operation of part performance may be contrasted with equitable estoppel, where, as Mason CJ and Wilson J noted in Waltons Stores (Interstate) Ltd v Maher66, the plaintiff's equity may be enforced by the grant of relief falling short of an order for the satisfaction of the plaintiff's expectation interest67. In Maddison v Alderson68, Lord Selborne illustrated his thesis that the defendant "is really 'charged' upon the equities resulting from the acts done in execution of the contract" by the example of: "a parol contract to sell land, completely performed on both sides, as to everything except conveyance; the whole purchase-money paid; the purchaser put into possession; expenditure by him (say in costly buildings) upon the property; leases granted by him to tenants. The contract is not a nullity β¦ All the acts done must be referred to the actual contract, which is the measure and test of their legal and equitable character and consequences." His Lordship went on to say69: "The choice is between undoing what has been done (which is not always possible, or, if possible, just) and completing what has been left undone. The line may not always be capable of being so clearly drawn as in the case which I have supposed; but it is not arbitrary or unreasonable to hold that when the statute says that no action is to be brought to charge any person upon a contract concerning land, it has in view the simple case in which he is charged upon the contract only, and not that in which there are equities resulting from res gestae subsequent to and arising out of the contract." In the example offered by Lord Selborne it is readily apparent, having regard to the acts performed on the strength of the contract, that a court of equity would regard specific performance of the contract β which, ex hypothesi, would involve only an order for the transfer of the legal title β as the only remedy 66 (1988) 164 CLR 387 at 405. 67 See also Sidhu v Van Dyke (2014) 251 CLR 505 at 528-530 [79]-[86]. 68 (1883) 8 App Cas 467 at 475. 69 (1883) 8 App Cas 467 at 476. sufficient to do justice. A contract or other arrangement which remains largely unperformed on both sides may not always have the same claim on the conscience of equity in terms of the remedies provided by the court as a contract which has been performed to the extent of that hypothesised by Lord Selborne70. And so it can be seen that it is something peculiar to part performance that the equity of the plaintiff that arises in reliance upon the partial performance of the contract has been regarded as sufficiently strong, without more, save a readiness, willingness and ability to do equity71, to support an order for specific performance in order to vindicate the equity of the plaintiff that arises from the part performance of the contract. In J C Williamson Ltd v Lukey and Mulholland72, Dixon J, with whom Gavan Duffy CJ agreed, explained why this is "The acts of part performance must be such as to be consistent only with the existence of a contract between the parties, and to have been done in actual performance of that which in fact existed. But in such a case the equity which so arises is to have the entire contract carried into execution by both sides. Because the acts done upon the faith of the contract could not have taken place if it had not been made, and the contract is of a kind which it is considered equitable to enforce in specie, a party who has so acted in partial execution of the contract obtains an equity to its complete performance." Lord Selborne's requirement that the acts of part performance relied upon be unequivocally referable to a contract of the kind asserted by the plaintiff is best understood as being necessary to give rise to this peculiarly strong equity. His Lordship said73: "the rule β¦ requires some evidentia rei to connect the alleged part performance with the alleged agreement. There is not otherwise enough in the situation in which the parties are found to raise questions which 70 Cf In re Cuming (1869) LR 5 Ch App 72; Chang v Registrar of Titles (1976) 137 CLR 177 at 184-185, 189-190; [1976] HCA 1. 71 Mehmet v Benson (1965) 113 CLR 295 at 307-308, 314-315; [1965] HCA 18. Cf Langman v Handover (1929) 43 CLR 334 at 345, 356; [1929] HCA 42; Mayfair Trading Co Pty Ltd v Dreyer (1958) 101 CLR 428 at 452-453; [1958] HCA 55. 72 (1931) 45 CLR 282 at 300; [1931] HCA 15. 73 Maddison v Alderson (1883) 8 App Cas 467 at 478. may not be solved without recourse to equity. It is not enough that an act done should be a condition of, or good consideration for, a contract, unless it is, as between the parties, such a part execution as to change their relative positions as to the subject-matter of the contract." Steadman v Steadman In the appellant's written submissions in this Court, reliance was placed on the decision of the House of Lords in Steadman v Steadman74. In Steadman, it was held75 that acts of part performance were sufficient if they pointed to the existence of some contract between the parties and either showed the nature of, or were consistent with, the parol agreement alleged by the plaintiff. To the extent that the decision in Steadman points to a broadening of the doctrine of part performance, it is not to be followed in preference to the position established by Maddison v Alderson and the earlier decisions of this Court to which reference has been made. It is noteworthy that in Steadman, none of their Lordships suggested that the decision involved a departure from the approach of Lord Selborne in Maddison v Alderson. Nevertheless, Lord Reid justified his conclusion by reasoning in terms of estoppel76: "If one party to an agreement stands by and lets the other party incur expense or prejudice his position on the faith of the agreement being valid he will not then be allowed to turn round and assert that the agreement is unenforceable." Two things may be said about Lord Reid's statement of principle. First, to the extent that it speaks of the avoidance of detriment as an essential condition of the operation of the doctrine of part performance, it differs from both Lord Selborne's reasoning and this Court's decision in Regent v Millett; and secondly, it does not explain how it is that the doctrine supports an order for specific performance of a contract rather than an order limited to remedying the detriment to the plaintiff. 75 [1976] AC 536 at 541-542, 553-554, 564. 76 [1976] AC 536 at 540. In Steadman, Viscount Dilhorne and Lord Salmon seem, at least to some extent, to have justified their conclusions on the basis that the acts relied upon were sufficient proof of a parol contract in the absence of the writing required by In oral argument, senior counsel for the appellant, acknowledging the disparate reasoning of the members of the majority of the House of Lords in Steadman, rightly did not press this Court to follow that decision. Given the absence from their Lordships' reasons of analysis critical of Lord Selborne's reasoning, and given further that, in point of principle, the doctrine of part performance is neither a species of equitable estoppel nor a mode of proof of a parol contract, Steadman does not provide a sound basis for departing from the position established by the course of authority in this Court. In Cooney v Burns78, Higgins J, writing in 1922, observed: "The cases on the subject cannot be all reconciled. Lord Selborne made an heroic effort in 1883, in the case of Maddison v Alderson79, to bring order to the chaos, to give system to the unsystematic; and perhaps for practical purposes, it would be well to treat that case as being, at all events primΓ’ facie, a complete exposition of the law." The importance of the reconciliation achieved by Lord Selborne should not be discounted. It should not be thought, as the submissions advanced on behalf of the appellant appear to assume, that part performance is, like equitable estoppel, the original and unconstrained creation of the courts of equity, the elements of which can be reformulated at large to "do justice against a defaulting defendant"80. In particular, the argument advanced on the appellant's behalf fails to appreciate that Lord Selborne's articulation of the law of part performance was driven by the conscious need to reconcile the decisions of the courts of equity with the clear words of s 4 of the Statute of Frauds81. 77 [1976] AC 536 at 553-554, 567-569. 78 (1922) 30 CLR 216 at 239. 79 (1883) 8 App Cas 467. 80 Cooney v Burns (1922) 30 CLR 216 at 239. 81 Maddison v Alderson (1883) 8 App Cas 467 at 474-475. It may be that the Chancery judges of the late 17th century did not regard the Statute of Frauds as applying to proceedings in equity82, but by the time Maddison v Alderson came to be decided the idea that a court of equity could regard itself as outside the prescriptions of the Parliament had become, as it remains, unacceptable83. Lord Selborne's reconciliation of the tension between the older cases and the Statute of Frauds has, for well over a century, provided an acceptable balance between parliamentary insistence on certainty in dealings in land and curial insistence on the prevention of unconscionable conduct in relation to such dealings. To detach the practical operation of the doctrine from this reconciliation, of which the unequivocal referability requirement is an integral part, is to make a case for the abolition of the doctrine as "a direct and inexcusable nullification" of the Statute of Frauds84. To say that the notion of unequivocal referability is unduly stringent is not to make a cogent argument for a more expansive operation for the doctrine of part performance but to demonstrate that the doctrine of part performance cannot satisfactorily be reconciled with the text of the statute and so should be discarded altogether. The enactment of s 26, including sub-s (2), after the evident approval by the High Court in McBride v Sandland and Cooney v Burns of Lord Selborne's reconciliation confirms the strength of this consideration. It is hardly to be supposed that the enactment of s 26(2) of the Act left room for judicial development of the law relating to part performance the balance effected by Lord Selborne's reconciliation. that would upset In this regard, it may be noted that the decision in Steadman was followed by the legislative abolition in the United Kingdom of the doctrine of part performance by the Law of Property (Miscellaneous Provisions) Act 1989 (UK), which provided that s 40 of the Law of Property Act 1925 (UK) shall cease to have effect and which, by s 2(1), provided: 82 Heydon, Gummow and Austin, Cases and Materials on Equity and Trusts, 3rd ed 83 Maddison v Alderson (1883) 8 App Cas 467 at 474, 482-483; Cooney v Burns (1922) 30 CLR 216 at 229. 84 Corbin, Corbin on Contracts, (1950), vol 2, Β§430. "A contract for the sale or other disposition of an interest in land can only be made in writing and only by incorporating all the terms which the parties have expressly agreed in one document or, where contracts are exchanged, in each." This legislative response to Steadman was recommended by the Law Commission of England and Wales85. The decision in Steadman contributed to the conclusion of the Law Commission that the doctrine of part performance was so confused86 that its abrogation by the legislature was desirable. The Law Commission considered that the most common example of injustice arising from undocumented dealings is the case of a plaintiff who incurs expenditure in effecting improvements to land to the knowledge of the owner and in the expectation generated by the owner of a transfer of the land; and that that injustice would be remedied by equitable estoppel. But as noted above, the "coverage" provided by equitable estoppel is not the same as that provided by part performance. And the law of part performance, as explained by Lord Selborne and in decisions of this Court, does not create the confusion that the Law Commission perceived in Steadman. The result in the present case It was argued in the written submissions made on the appellant's behalf that even if the unequivocal referability requirement were applied he should succeed on the appeal; but in the course of oral argument, it was conceded that, if Lord Selborne's approach were applied to the circumstances of this case, the acts on which the appellant relied at trial and before the Full Court would not suffice as acts of part performance. That concession was rightly made. In Cooney v Burns87, Starke J fixed upon the statement of Lord Selborne that an act is not a sufficient act of part performance "unless it is, as between the parties, such a part execution as to change their relative positions as to the 85 Law Commission, Transfer of Land: Formalities for Contracts for Sale etc of Land, Law Com No 164, (1987) at 23 [6.4]. 86 Law Commission, Transfer of Land: Formalities for Contracts for Sale etc of Land, Law Com No 164, (1987) at 3 [1.9]. See also Law Commission, Transfer of Land: Formalities for Contracts for Sale etc of Land, Working Paper No 92, 87 (1922) 30 CLR 216 at 244. subject-matter of the contract."88 Starke J went on to conclude89 that the act relied on in the case before him by way of part performance was not sufficient to support an order for specific performance because it did not "change the relative positions of the parties as to the subject matter of the contract, namely, the land"; in particular, the acts in question did not "alter the title in the land β¦ affect the possession or the right to possession of the land, [or] β¦ affect the use of the land or touch or concern the land in any way whatever." Similar observations may be made in the present case. Here, neither party performed any act that was unequivocally referable to the Clark Road property. There was no giving or taking of possession of that land. There were no other acts indicative of a change in the respective positions of the parties in relation to the land. The Full Court was therefore correct to conclude that the acts on which the appellant relied were not sufficient to engage the doctrine of part performance. Conclusion and orders Considerations of authority and principle combine to require that the appellant's contention be rejected. Accordingly, the appeal should be dismissed with costs. 88 Maddison v Alderson (1883) 8 App Cas 467 at 478. 89 (1922) 30 CLR 216 at 244. See also at 236-238 per Isaacs J, 240-241 per NettleJ NETTLE AND GORDON JJ. We agree with the judgment of Kiefel CJ, Bell, Gageler and Keane JJ, for the reasons their Honours give, that the appeal should be dismissed but we wish to add the following. The essential question which arises in this appeal is whether this Court should now relax the conditions of the doctrine of part performance to allow for application of the doctrine to cases in which the acts of part performance relied upon are not unequivocally referable to the kind of contract alleged. For the reasons which follow, in addition to those stated in the judgment of Kiefel CJ, Bell, Gageler and Keane JJ, the question should be answered, no. Origins of the equitable doctrine of part performance The equitable doctrine of part performance has been described as a mystery90 and an anomaly91. As Stramignoni has written92, the mystery is twofold: when was the doctrine of part performance first employed and why was it not mentioned in s 4 of the Statute of Frauds 167793? As to the first, legal historians are now largely agreed94 that the doctrine was first employed by Lord Nottingham in the Court of Chancery during the latter half of the 17th century. Its origins lay in the established equitable precept that part performance on one side required as a matter of conscience, civilis et politica, that performance should be ordered on the other side95. Why the doctrine was 90 Simpson, A History of the Common Law of Contract: The Rise of the Action of Assumpsit, (1987) at 614. 91 Pound, "The Progress of the Law, 1918-1919: Equity", (1920) 33 Harvard Law Review 929 at 935. 92 Stramignoni, "At the Dawn of Part Performance: A Hypothesis", (1997) 18(2) Journal of Legal History 32 at 32. 93 29 Car II c 3. 94 See for example Viner, A General Abridgment of Law and Equity, 2nd ed (1792), vol 5 at 523; Roberts, A Treatise on the Statute of Frauds, (1807) at 130-131; Simpson, A History of the Common Law of Contract: The Rise of the Action of Assumpsit, (1987) at 614; Stramignoni, "At the Dawn of Part Performance: A Hypothesis", (1997) 18(2) Journal of Legal History 32 at 41; Baker, An Introduction to English Legal History, 4th ed (2002) at 350. 95 Cook v Fountain (1676) 3 Swans 585 at 600 per Lord Nottingham [36 ER 984 at 990]. See also Stramignoni, "At the Dawn of Part Performance: A Hypothesis", (1997) 18(2) Journal of Legal History 32 at 35-36; Baker, An Introduction to English Legal History, 4th ed (2002) at 110. NettleJ not mentioned in the Statute remains a mystery, although it may be conjectured that its authors, including Lord Nottingham96, the so-called "Father of Equity"97, did not conceive of the Statute as applying to cases involving part performance. Earlier editions of Megarry and Wade's The Law of Real Property posited98 that the first reported case in which the doctrine of part performance was applied after the enactment of the Statute of Frauds was the judgment of Lord Jeffreys in Butcher v Stapely99. But as Simpson later identified100, it is apparent from the preceding judgment of Lord Guilford in Hollis v Edwards101 that the doctrine was known in some form before Butcher v Stapely. On the available information, it seems likely that Hollis v Edwards and Butcher v founded on Potts v Turvin102, which was decided by Stapely were Lord Nottingham very shortly after the enactment of the Statute. In Potts v Turvin103, a parol agreement was entered into under which Potts was to assign mortgaged property to Turvin as security for a loan and upon repayment of the loan Turvin was to reconvey the property. Potts conveyed the mortgaged property the agreement and subsequently repaid the loan. But, in breach of the agreement, Turvin refused to execute a deed of defeasance which provided for the reconveyance of the in accordance with to Turvin 96 Costigan, "The Date and Authorship of the Statute of Frauds", (1913) 26 Harvard Law Review 329 at 334-336, 339. 97 Story, Commentaries on Equity Jurisprudence, 1st Eng ed (1884) at 34-35 Β§52. 98 See for example Megarry and Wade, The Law of Real Property, (1957) at 523; Megarry and Wade, The Law of Real Property, 2nd ed (1959) at 555; Megarry and Wade, The Law of Real Property, 3rd ed (1966) at 570. 99 (1685) 1 Vern 363 [23 ER 524]. 100 Simpson, A History of the Common Law of Contract: The Rise of the Action of Assumpsit, (1987) at 614. 101 (1683) 1 Vern 159 [23 ER 385]. 102 (1681) Lord Nottingham's Chancery Cases, Volume II, Selden Society vol 79 (1961), Case 1074. See also Stramignoni, "At the Dawn of Part Performance: A Hypothesis", (1997) 18(2) Journal of Legal History 32 at 36-40. 103 This account of the facts of Potts v Turvin is based on Stramignoni, "At the Dawn of Part Performance: A Hypothesis", (1997) 18(2) Journal of Legal History 32 NettleJ property to Potts and, in answer to the bill entered by Potts, Turvin pleaded the Statute of Frauds in bar of the claim. Despite the Statute, Lord Nottingham ordered104 that Turvin seal a deed of defeasance, and thereby established the precedent in effect relied upon in Hollis v Edwards and Butcher v Stapely of continuing after the enactment of the Statute to apply the pre-Statute practice of the Court of Chancery of compelling execution of formal covenants agreed to be but not yet sealed105. The pre-Statute of Frauds Chancery practice of compelling execution of formal covenants agreed to be but not sealed was also the basis of intervention in most of the other early cases following the enactment of the Statute106. But the doctrine evolved rapidly. During the latter part of the 17th century and the first half of the 18th century, equity added to the category of sufficient acts of part performance the acts of entering into possession of land under a parol contract107 (apparently by reference to mediaeval conceptions of livery of seisin that putting a purchaser into possession was of the essence of a common law conveyance of land108), entering into possession and incurring expenses pursuant to a lease of land109, and paying the purchase price of land in whole or in part110. 104 Potts v Turvin (1681) Lord Nottingham's Chancery Cases, Volume II, Selden Society vol 79 (1961), Case 1074. 105 See generally Yale (ed), Lord Nottingham's 'Manual of Chancery Practice' and 'Prolegomena of Chancery and Equity', (1965) at 75-77, 309-311; Jones, The Elizabethan Court of Chancery, (1967) at 446; Kerly, An Historical Sketch of the Equitable Jurisdiction of the Court of Chancery, (1890) at 86-88; Stramignoni, "At the Dawn of Part Performance: A Hypothesis", (1997) 18(2) Journal of Legal History 32 at 36, 41-42. 106 See for example Hollis v Whiteing (1682) 1 Vern 151 [23 ER 380]. See generally Gummow, Change and Continuity, (1999) at 6-11, 18-22. 107 See Butcher v Stapely (1685) 1 Vern 363 [23 ER 524]. 108 Pound, "The Progress of the Law, 1918-1919: Equity", (1920) 33 Harvard Law Review 929 at 939; Moreland, "Statute of Frauds and Part Performance", (1929) 78 University of Pennsylvania Law Review 51 at 69-73; Yale, Lord Nottingham's Chancery Cases, Volume I, Selden Society vol 73 (1957) at ciii. See and contrast Kepner, "Part Performance in Relation to Parol Contracts for the Sale of Lands", (1951) 35 Minnesota Law Review 431 at 438. 109 See Floyd v Buckland (1703) 2 Freem Ch 268 [22 ER 1202]. 110 See Lacon v Mertins (1743) 3 Atk 1 [26 ER 803]. NettleJ At the same time, however, as Lord Selborne later observed in Maddison v Alderson111, judges of the greatest authority were also endeavouring to keep the doctrine of part performance "within limits intended to prevent a recurrence of the mischief which the statute was passed to suppress": fraudulent oral transactions disposing of an interest in land commonly endeavoured to be upheld by perjury and subornation of perjury112. Thus developed the restrictions which today require that acts of part performance be unequivocally referable to the kind of contract alleged113, exclude preliminary acts from the category of sufficient acts of part performance114, and require that a parol agreement be specifically enforceable115. The requirement that acts of part performance relied upon be unequivocally referable to the kind of contract alleged first emerged in the early 18th century in Gunter v Halsey116. It took longer, however, for equity to settle the categories of acts of part performance recognised as having that quality. In Gunter v Halsey117, Lord Hardwicke stated that a contract is taken out of the mischief of the Statute of Frauds when the acts done in part performance are such as could be done with no other view or design than to perform the agreement and it would be a prejudice to the party who has done the acts if the agreement was to be void. In Lacon v Mertins118, Lord Hardwicke stated that the act of part performance relied upon must be such that it appears that it would not have been done unless on account of the agreement, and that there are several 111 (1883) 8 App Cas 467 at 478. 112 Statute of Frauds, preamble. See also Steadman v Steadman [1976] AC 536 at 551 per Viscount Dilhorne, 558 per Lord Simon of Glaisdale, 567 per Lord Salmon; Spry, The Principles of Equitable Remedies: Specific Performance, Injunctions, Rectification and Equitable Damages, 9th ed (2014) at 263. 113 See Gunter v Halsey (1739) Amb 586 [27 ER 381]; Maddison v Alderson (1883) 8 App Cas 467. 114 See Clerk v Wright (1737) 1 Atk 12 [26 ER 9]. 115 See McManus v Cooke (1887) 35 Ch D 681; cf J C Williamson Ltd v Lukey and Mulholland (1931) 45 CLR 282 at 297 per Dixon J (Gavan Duffy CJ agreeing at 290); [1931] HCA 15. 116 (1739) Amb 586 [27 ER 381]. 117 (1739) Amb 586 at 586-587 [27 ER 381 at 381]. 118 (1743) 3 Atk 1 at 3-4 [26 ER 803 at 805]. NettleJ categories of acts of that class. His Lordship noted119 that the delivery of possession was strong evidence of the part execution of an agreement and that the payment of money had "always" been held in the Court of Chancery to be a sufficient act of part performance. By contrast, by the 19th century, although the giving and taking of possession continued to be recognised120 as an act unequivocally referable to the kind of contract alleged and, therefore, a sufficient act of part performance, it had come to be accepted121 that the payment of money alone is not a sufficient act of part performance because it is an equivocal act not in itself indicative of a contract concerning land. It is possible that the requirement that an act of part performance be unequivocally referable to the kind of contract alleged grew out of the subsequently discredited notion that, as a matter of construction, the Statute of Frauds did not apply to cases in which the circumstances precluded the possibility of perjury. Lord Blackburn essayed the idea in Maddison v Alderson122. But be that as it may, once the requirement of unequivocal referability was identified in Gunter v Halsey it was never questioned again until the latter part of the 20th century. As will be seen, it remained the law in England until 1974 when the decision in Steadman v Steadman123 was handed down and, for the present, it remains the law in this country, as it does in a number of jurisdictions in the United States of America. During the 19th century, there was a tendency on the part of some English judges to engage in what Pound later described124 as ex post facto rationalisation of equitable developments that were more the product of historical accident than of an all-encompassing jurisprudential theory. Thus, for example, whereas the origins of the doctrine of part performance appear to have lain in the pre-Statute of Frauds practice of the Court of Chancery of compelling execution of 119 Lacon v Mertins (1743) 3 Atk 1 at 4 [26 ER 803 at 805]. 120 See for example Dale v Hamilton (1846) 5 Hare 369 at 381 [67 ER 955 at 960]. 121 Clinan v Cooke (1802) 1 Sch & Lef 22 at 40-41; Hughes v Morris (1852) 2 De G M & G 349 at 356 [42 ER 907 at 910]; Britain v Rossiter (1879) 11 QBD 123 at 130-131 per Cotton LJ; Maddison v Alderson (1883) 8 App Cas 467 at 478-479 per Lord Selborne. 122 (1883) 8 App Cas 467 at 488. 124 Pound, "The Progress of the Law, 1918-1919: Equity", (1920) 33 Harvard Law Review 929 at 936-937, 943-944. NettleJ covenants agreed to be but not yet sealed, and the rule that the granting and taking of possession was a sufficient act of part performance may have sprung from the mediaeval notion of seisin that the granting and taking of possession was of the essence of a common law conveyance of land, in Mundy v Jolliffe125 Lord Cottenham spoke more expansively of courts of equity exercising jurisdiction to decree specific performance of partly performed oral agreements for the purpose of preventing the great injustice which would arise from one party escaping from liability under an agreement after the other party has, upon the faith of the agreement, expended money or otherwise acted in execution of the agreement. Likewise, in Caton v Caton126, Lord Cranworth declared that: "The ground on which the Court holds that part performance takes a contract out of the purview of the Statute of Frauds is, that when one of two contracting parties has been induced, or allowed by the other, to alter his position on the faith of the contract, as for instance by taking possession of land, and expending money in building or other like acts, there it would be a fraud in the other party to set up the legal invalidity of the contract on the faith of which he induced, or allowed, the person contracting with him to act, and expend his money." Building on those pronouncements, and on some 50 other English and American decisions which also spoke of equitable fraud as the basis of equity's intervention in cases of part performance, Pomeroy later expounded127 a general theory of part performance as follows: "The doctrine was settled at an early day in England, and has been fully adopted in nearly all the American states, that a verbal contract for the sale or leasing of land β¦ if part performed by the party seeking the remedy, may be specifically enforced by courts of equity, notwithstanding the statute of frauds1. The ground upon which the remedy in such cases rests is that of equitable fraud. It would be a virtual fraud for the defendant, after permitting the acts of part performance, to interpose the statute as a bar to the plaintiff's remedial right. The acts of part performance, therefore, in order to satisfy this principle, must be done in pursuance of the contract, and must alter the relations of the parties. β¦ 125 (1839) 5 My & Cr 167 at 177 [41 ER 334 at 338]. 126 (1866) LR 1 Ch App 137 at 148. 127 Pomeroy, Pomeroy's Equity Jurisprudence, 4th ed (1919), vol 4 at 3345-3347 NettleJ 1 β¦ Fundamental ground of the jurisdiction. β The ground is equitable fraud; not an antecedent fraud in entering into the contract, but a fraud inhering in the consequence of setting up the statute as a defense. If the defendant knowingly permits the plaintiff to do acts in part performance of the verbal agreement, acts done in reliance on the agreement, which change the relations of the parties and prevent a restoration to their former condition, it would be a virtual fraud for the defendant to interpose the statute as a defense, and thus to secure for himself the benefit of the acts of part performance, while the plaintiff would be left not only without adequate remedy at law, but also liable for damages as a trespasser". (footnote omitted) Pomeroy's theory met with wide-ranging acceptance, particularly in the United States of America. But, at least in this country, its application is subject to qualification. As Spry observes128, the fraud that is required to be shown in cases of part performance is a particular kind of equitable constructive fraud that arises through the presence of circumstances that are specified in the authorities. Or, as Pound put it more starkly129, it is an historical anomaly which is to be understood only by reference to 17th century and 18th century legal institutions and modes of thought, and which, therefore, defies logically satisfactory analytical treatment. While the notion that the doctrine's constituent elements and restrictions are capable of satisfactory explanation by reference to an all-encompassing theory of equitable fraud is correct at a high level of abstraction, it is in significant respects jurisprudentially simplistic, and, unless understood as such, calculated to lead to the misconception propounded by the appellant in this case that the doctrine remains capable of principled expansion beyond established categories. As is apparent from the full text of the speeches of Lord Cottenham in Mundy v Jolliffe and Lord Cranworth in Caton v Caton, their Lordships' asseverations regarding equitable fraud were attempts to explicate the state of 19th century authority, not theses for further development or expansion of the doctrine. There is nothing in either speech, or in any of the other English decisions130 to which Pomeroy referred131, which runs counter to 128 Spry, The Principles of Equitable Remedies: Specific Performance, Injunctions, Rectification and Equitable Damages, 9th ed (2014) at 262. 129 Pound, "The Progress of the Law, 1918-1919: Equity", (1920) 33 Harvard Law Review 929 at 937. 130 Lester v Foxcroft (1700) Colles 108 [1 ER 205]; Clinan v Cooke (1802) 1 Sch & Lef 22; Bond v Hopkins (1802) 1 Sch & Lef 413; McCormick v Grogan (1869) LR 4 HL 82; Haigh v Kaye (1872) LR 7 Ch App 469. 131 Pomeroy, Pomeroy's Equity Jurisprudence, 4th ed (1919), vol 4 at 3347 Β§1409. NettleJ the overall thrust of 19th century English authority towards restricting the reach of the doctrine and a stricter holding to the Statute of Frauds132. The course of development in the United States of America has been different. At various points in time, courts in some jurisdictions in America have held that the doctrine of part performance is applicable to cases not involving acts unequivocally referable to the kind of contract alleged, on the basis of a general theory of equitable fraud of the type propounded by Pomeroy that, where one party to a contract has so acted to his or her detriment on the faith of the contract that it would be fraudulent for the other party to resile from it, equity will enforce the contract133. In such cases, however, the relief accorded has ordinarily been restricted to equitable compensation sufficient to put the plaintiff in the position in which the plaintiff would have been had he or she not acted on the faith of the contract134. And as Kiefel CJ, Bell, Gageler and Keane JJ in effect observe135, that is tantamount to the kind of relief which might be accorded in this country in a case of promissory estoppel. Although the doctrine of part performance is related at a high level of abstraction to equity's capacity to restrain unconscionable departure from representations on the faith of which a representee has acted to his or her detriment, it is necessary, as Pound emphasised136, to keep in mind that the two doctrines are different, have separate and distinct jurisprudential underpinnings and are governed by different criteria. 132 See Pound, "The Progress of the Law, 1918-1919: Equity", (1920) 33 Harvard Law Review 929 at 942. 133 See for example Tilton v Tilton 9 NH 385 at 390 (1838); Farrar v Patton 20 Mo 81 at 84-85 (1854); Vestry and Wardens of the Church of the Advent v Farrow 7 Rich Eq 378 at 385 (1855); Freeman v Freeman 4 Hand 34 at 38 (1870); Wright v Pucket 22 Gratt 370 at 374 (1872); Horn v Ludington 32 Wis 73 at 76-77 (1873); Newkumet v Kraft 10 Phila 127 at 127 (1874); Cole v Cole 41 Md 301 at 304 (1875); Seaman v Aschermann 8 NW 818 at 819 (1881); Sherman v Scott 27 Hun 331 at 333 (1882); Brown v Hoag 29 NW 135 at 137 (1886). See and compare American Law Institute, Restatement of the Law Second, Contracts, (1979), Β§129, comments a, d, reporter's note; Brown, Corbin on Contracts, rev ed (1997), vol 4 134 See for example Parkhurst v Van Cortlandt 1 Johns Ch 273 at 284 (1814); Deisher v Stein 7 P 608 at 610 (1885). See also Watson, "Specific Performance", in Garland and McGehee (eds), The American and English Encyclopaedia of Law, 2nd ed (1904), vol 26, 7 at 61. 135 See at [61]. 136 Pound, "The Progress of the Law, 1918-1919: Equity", (1920) 33 Harvard Law Review 929 at 937. NettleJ Consequently, the tendency that developed in the United States of America at various points in time to run the two doctrines together is one to be resisted. One comes then to Maddison v Alderson, and so to Lord Selborne's seminal ex post facto rationalisation of the doctrine of part performance and the restrictions to which it is subject. In substance, Lord Selborne identified137 the doctrine as applying only to contracts concerning land138. His Lordship then held139 that the Statute of Frauds is not to be taken as avoiding parol contracts for the disposition of an interest in land but only as precluding the bringing of actions to enforce them by charging the defendant on the contract itself and some breach of it. In contrast, his Lordship said, in a suit for specific performance on the basis of part performance the defendant is charged not upon the contract itself but upon the equities resulting from the acts done in execution of the contract in order to prevent injustice of the kind which it is conceived the Statute cannot be thought to have had in contemplation140. The Statute is thus to be taken as limited to simple cases in which the defendant is charged only on the contract and so as not applying to cases in which there are equities resulting from acts or res gestae subsequent to and arising out of the contract141. His Lordship reasoned as follows142: "So long as the connection of those res gestae with the alleged contract does not depend upon mere parol testimony, but is reasonably to be inferred from the res gestae themselves, justice seems to require some such limitation of the scope of the statute β¦ 137 Maddison v Alderson (1883) 8 App Cas 467 at 474. 138 See and contrast Taylor v Beech (1749) 1 Ves Sen 297 [27 ER 1042]; Hammersley v De Biel (1845) 12 Cl & F 45 [8 ER 1312]; Lassence v Tierney (1849) 1 H & Tw 115 [47 ER 1620]; Surcome v Pinniger (1853) 3 De G M & G 571 [43 ER 224]; Ungley v Ungley (1877) 5 Ch D 887; Hollander v Atkinson (1885) 6 LR (NSW) Eq 69; Hall v Johnson (1904) 29 VLR 649. 139 Maddison v Alderson (1883) 8 App Cas 467 at 474-475. 140 Maddison v Alderson (1883) 8 App Cas 467 at 475. 141 Maddison v Alderson (1883) 8 App Cas 467 at 476. 142 Maddison v Alderson (1883) 8 App Cas 467 at 476-479, quoting Dale v Hamilton (1846) 5 Hare 369 at 381 [67 ER 955 at 960]. NettleJ The doctrine, however, so established has been confined by judges of the greatest authority within limits intended to prevent a recurrence of the mischief which the statute was passed to suppress. The present case, resting entirely upon the parol evidence of one of the parties to the transaction, after the death of the other, forcibly illustrates the wisdom of the rule, which requires some evidentia rei to connect the alleged part performance with the alleged agreement. There is not otherwise enough in the situation in which the parties are found to raise questions which may not be solved without recourse to equity. It is not enough that an act done should be a condition of, or good consideration for, a contract, unless it is, as between the parties, such a part execution as to change their relative positions as to the subject-matter of the contract. ... All the authorities shew that the acts relied upon as part performance must be unequivocally, and in their own nature, referable to some such agreement as that alleged β¦ '[A]n act which though in truth done in pursuance of a contract, admits of explanation without supposing a contract, is not in general admitted to constitute an act of part performance taking the case out of the Statute of Frauds; as for example, the payment of a sum of money alleged to be purchase-money.'" Arguably, Lord Selborne's thesis that the defendant is charged not upon the contract itself but rather upon the equities resulting from acts done in execution of the contract is open to the objection that the remedy of specific performance enforces the terms of the contract as if they were legally binding, and, in contradistinction to the relief that might be awarded in cases of equitable estoppel, is not limited to what is necessary to protect the plaintiff against the detriment he or she would suffer from the defendant's change of position143. But, as against that, it may be observed that, by enforcing the terms of the contract, the doctrine of part performance is little different in operation from what is 143 See Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at 404-405 per Mason CJ and Wilson J, 419, 427 per Brennan J; [1988] HCA 7; The Commonwealth v Verwayen (1990) 170 CLR 394 at 411-413, 416 per Mason CJ (Gaudron J agreeing at 487), 428-429 per Brennan J, 442-443 per Deane J, 454 per Dawson J, 501 per McHugh J; [1990] HCA 39; Giumelli v Giumelli (1999) 196 CLR 101 at 123-125 [42]-[48] per Gleeson CJ, McHugh, Gummow and Callinan JJ; [1999] HCA 10; Sidhu v Van Dyke (2014) 251 CLR 505 at 528-530 [79]-[85] per French CJ, Kiefel, Bell and Keane JJ (Gageler J agreeing at 530 [89]); [2014] HCA 19. NettleJ sometimes described as Dillwyn v Llewelyn144 proprietary estoppel β under which the prima facie measure of equitable relief is to enforce a representation of intention to confer an interest in land on the faith of which the plaintiff has acted to his or her detriment145 β or, more generally, from the jurisdiction to enforce promises which was exercised in equity until Jorden v Money146 restricted estoppel by representation to representations of existing fact and Low v Bouverie147, for a time at least, confined estoppel by representation to a rule of evidence148. Either way, Lord Selborne was surely correct, however, that, by the time of Maddison v Alderson, at least a century of development of the doctrine of part performance had confined its operation to acts of part performance unequivocally referable to some such contract as is alleged, and definitively determined that the payment of money alleged to be the purchase price is not within that criterion. Maddison v Alderson remained the law in England until Steadman v Steadman149, to which it will be necessary to return later in these reasons. The state of authority in this Court A century ago, in McBride v Sandland150, Isaacs and Rich JJ embraced Lord Selborne's explanation of the underlying principle of the doctrine of part performance as being that the defendant is not charged upon the contract itself 144 (1862) 4 De G F & J 517 [45 ER 1285]. 145 Giumelli v Giumelli (1999) 196 CLR 101 at 112 [5]-[6], 123-125 [42]-[48] per Gleeson CJ, McHugh, Gummow and Callinan JJ (Kirby J agreeing at 127 [63]); Sidhu v Van Dyke (2014) 251 CLR 505 at 528-530 [79]-[86] per French CJ, Kiefel, Bell and Keane JJ (Gageler J agreeing at 530 [89]). See also Heydon, Leeming and Turner, Meagher, Gummow and Lehane's Equity: Doctrines and Remedies, 5th ed (2015) at 524 [17-105]; Robertson, "The Reliance Basis of Proprietary Estoppel Remedies", [2008] The Conveyancer and Property Lawyer 295. 146 (1854) 5 HL Cas 185 [10 ER 868]. 148 See generally Kirk, "Confronting the Forms of Action: The Emergence of Substantive Estoppel", (1991) 13 Adelaide Law Review 225 at 228-236, 239. 150 (1918) 25 CLR 69 at 77-79; [1918] HCA 32. NettleJ and some breach of it but rather upon the equities arising from the acts of part performance of the contract that are relied upon. Thus, where the doctrine is invoked, the proper course is to seek first to establish such performance as must necessarily imply the existence of the kind of contract alleged and, when and if that has been achieved, to admit of parol evidence to prove the terms of the alleged contract. In their joint judgment, Isaacs and Rich JJ summarised151 the position as follows: "(1) The act relied on must be unequivocally and in its own nature referable to 'some such agreement as that alleged.' That is, it must be such as could be done with no other view than to perform such an agreement (Maddison v Alderson; Gunter v Halsey; Ex parte Hooper). (2) By 'some such agreement as that alleged' is meant some contract of the general nature of that alleged (Maddison v Alderson; Savage v Carroll; Fry on Specific Performance, 5th ed, at p 292). (3) The proved circumstances in which the 'act' was done must be considered in order to judge whether it refers unequivocally to such an agreement as is alleged (Savage v Carroll; Hodson v Heuland). Expressions are found in some cases which, if literally read, are to the effect that mere possession by a stranger is sufficient to let in parol evidence of any contract alleged. Those cases were prior to Maddison v Alderson, and the expressions if literally read appear to be too wide, because, so read, they would conflict with the requirement that the act must unequivocally refer to some such contract as is alleged, and because bare possession does not necessarily connote trespass or, alternatively, a contract at all; indeed, some contracts would not justify the act done. Possession may be the result of mere permission. But if the circumstances under which the possession was given are proved, then the Court may judge whether the act indicates permission or contract, and, if contract, its general character. For instance, in Frame v Dawson the expression 'some agreement' is used, we think, in contradistinction to the specific terms of the agreement, and not in the most general sense of any agreement whatever. (4) It must have been in fact done by the party relying on it on the faith of the agreement, and further the other party must have permitted it to be done on that footing. Otherwise there would not be 'fraud' in refusing to carry out the agreement, and fraud, that is moral turpitude, is 151 McBride v Sandland (1918) 25 CLR 69 at 78-79. NettleJ the ground of jurisdiction (Fry on Specific Performance, 5th ed, par 588; McCormick v Grogan; Whitbread v Brockhurst; Phillips v Alderton). (5) It must be done by a party to the agreement (Fry on Specific Performance, par 589). These requirements must be satisfied before the actual terms of the alleged agreement are allowed to be deposed to. Further, when those terms are established, it still remains to be shown :β (6) That there was a completed agreement (Thynne v Glengall). (7) That the act was done under the terms of that agreement by force of that agreement (Thynne v Glengall)." (footnotes omitted) Four years later, in Cooney v Burns152, this Court unanimously accepted what was said by Lord Selborne in Maddison v Alderson and Isaacs J added153 to what he and Rich J had said in McBride v Sandland that what equity enforces under the doctrine of part performance is not a contractual right but an equity which arises from such acts of part performance of the alleged contract as would make it a fraud upon the plaintiff for the defendant to recede from the contract, and, therefore, that the test for the doctrine's engagement is whether the defendant has gone so far, as purchaser, directly or indirectly exercising, or, as vendor, in permitting the purchaser directly or indirectly to exercise, rights of ownership over the property in suit as to make it a fraud on the plaintiff unless ownership is completely and effectively conveyed pursuant to the alleged agreement. Consequently, as his Honour observed154: "[T]here is always in part performance the actual transfer by enjoyment, directly or indirectly, of some right of ownership which the legal title would confer." (emphasis in original) 152 (1922) 30 CLR 216 at 221-222 per Knox CJ, 229-230 per Isaacs J, 239 per Higgins J (Gavan Duffy J agreeing at 243), 243-244 per Starke J; [1922] HCA 8. 153 Cooney v Burns (1922) 30 CLR 216 at 231-235. 154 Cooney v Burns (1922) 30 CLR 216 at 235. NettleJ The point was later reiterated by Dixon J in J C Williamson Ltd v Lukey and Mulholland155 thus: "In cases of specific performance, the party is said to be charged upon the equities arising out of the acts of part performance and not merely upon the contract. The acts of part performance must be such as to be consistent only with the existence of a contract between the parties, and to have been done in actual performance of that which in fact existed." Similarly, in Regent v Millett156, Gibbs J, with whom all other members of the Court agreed, referred with apparent approval to McBride v Sandland and Cooney v Burns and stated: "The principle upon which the doctrine of part performance rests was stated by Lord Cranworth, Lord Chancellor in Caton v Caton in words which appear to have a direct application to the present case. He said: 'β¦ when one of two contracting parties has been induced, or allowed by the other, to alter his position on the faith of the contract, as for instance by taking possession of land, and expending money in building or other like acts, there it would be a fraud in the other party to set up the legal invalidity of the contract on the faith of which he induced, or allowed, the person contracting with him to act, and expend his money.' The books are full of cases in which it has been held that the entry into possession alone, or the taking of possession coupled with the expenditure of money by one party on the improvement of property, with the cognizance of the other party to the contract, may amount to part performance (see the cases cited in Halsbury's Laws of England, 3rd ed, vol 36, par 416). ... [T]he test suggested by the Earl of Selborne LC in [Maddison v Alderson], that the acts relied upon as part performance 'must be unequivocally, and in their own nature, referable to some such agreement as that alleged', has been consistently accepted as a correct statement of the law. It is enough that the acts are unequivocally and in their own nature referable to some contract of the general nature of that alleged (see McBride v Sandland)." (footnotes omitted) 155 (1931) 45 CLR 282 at 300 (Gavan Duffy CJ agreeing at 290). 156 (1976) 133 CLR 679 at 682-683; [1976] HCA 40. NettleJ The requirement of unequivocal referability In this case, the appellant contended that Maddison v Alderson, and therefore McBride v Sandland and Cooney v Burns, proceeded from a misconception that acts of part performance relied upon must be unequivocally and of their own nature referable to some such agreement as is alleged. Counsel for the appellant submitted that the requirement for unequivocal referability evolved in the Court of Chancery as part of the Court's adjectival requirement of strict proof of contracts for disposition of interests in land and not as part of the substantive principle of equitable fraud relied on by parties to overcome the Statute of Frauds. It followed, it was submitted, that when Chancery procedure was reformed in the 19th century, and the mode of proof in Chancery became as it is at law, the requirement for strict referability should logically have been dispensed with while the substantive fraud principle should have remained a means of overcoming the Statute. Instead of that, counsel contended, it was apparent that 19th century Chancery judges not sufficiently cognisant of the distinction between adjectival matters of proof and substantive matters of principle had erroneously maintained the requirement for strict referability as if it were an essential condition of the substantive doctrine of part performance. Counsel submitted that the true underlying principle of the doctrine is what he described as the broad principle of equitable fraud expounded by Lord Cranworth in Caton v Caton, and more fully developed by Pomeroy as part of his all-embracing theory of equitable fraud. Under such a principle, counsel submitted, there is no requirement of unequivocal referability but only of proof on the balance of probabilities of such acts of part performance on the faith of the alleged contract as would make it unconscionable for the other party to the contract to be allowed to deny it. And so much, it was contended, was implicitly recognised by Gibbs J in Regent v Millett. Those contentions face difficulties at a number of levels, and should be rejected. First, the strict rules of proof which applied in Chancery were in operation at the time of Potts v Turvin in 1681, some 60 years before Lord Hardwicke first articulated the requirement of unequivocal referability in Gunter v Halsey. There is nothing that suggests that Lord Hardwicke conceived of the requirement of unequivocal referability as an aspect of Chancery procedure that a succession of Lord Chancellors before him had overlooked. Secondly, as was explained in Walton v Hobbs157, the rule of proof in Chancery was that where there was only a single deposition by a plaintiff against the oath of a defendant there could be no decree of specific performance, but where there were a great many circumstances strengthening and supporting the 157 (1739) 2 Atk 19 at 19 [26 ER 409 at 409]. NettleJ plaintiff's deposition the case did not come within the rule158. That rule applied equally to proof of acts unequivocally referable to the kind of contract alleged as to the terms of the contract159. In some cases, the strong circumstances necessary to corroborate the plaintiff's testimony as to the terms of the contract may have been the same as those required to prove the acts unequivocally referable to the kind of contract alleged but in other cases they may have been different. Thus, in some cases, there would have been circumstances which sufficiently corroborated the plaintiff's testimony of the acts of part performance relied upon but which did not sufficiently prove the terms of the contract. That possibility logically belies the suggestion that the unequivocal referability rule owed anything to the mode of proof in Chancery. Thirdly, as has been seen, the requirement for unequivocal referability as first articulated in Gunter v Halsey in 1739 is likely to have sprung from the then extant notion that a contract was taken out of the mischief of the Statute of Frauds where the acts done were such as could be done with no other view or design than to perform the agreement. That idea was equally accepted at law as it was in equity160. So far from being a byproduct of the mode of proof applied in Chancery, it appears that the requirement of unequivocal referability was in effect a judicially imposed, free-standing policy limitation on the spread of the doctrine of part performance to cases which it was thought might frustrate the object of the Statute161. Fourthly, there was no misunderstanding among 19th century Chancery judges of the distinction between the rules of proof which operated in Chancery prior to the procedural reforms and the separate and distinct requirement that acts of part performance relied upon to take a case out of the scope of the Statute of Frauds be unequivocally referable to the kind of contract alleged. To the contrary, as is apparent from Lord Blackburn's speech in Maddison v Alderson162, 19th century Chancery judges were acutely aware of the differences in modes of proof brought about by the procedural reforms and of the difficulties which they 158 See also Sir Thomas Janson, Bart v Rany (1740) 2 Atk 140 [26 ER 488]. 159 See Story, Commentaries on Equity Jurisprudence, 1st Eng ed (1884) at 506 Β§764. 160 See Maddison v Alderson (1883) 8 App Cas 467 at 488 per Lord Blackburn. 161 Pound, "The Progress of the Law, 1918-1919: Equity", (1920) 33 Harvard Law Review 929 at 944; Spry, The Principles of Equitable Remedies: Specific Performance, Injunctions, Rectification and Equitable Damages, 9th ed (2014) at 162 (1883) 8 App Cas 467 at 489. NettleJ might create, and yet remained adamant that there should be no change to the scope of the doctrine of part performance: "There are many rules laid down as to what should guide a judge, determining for himself what the facts are, in thinking the proof of a contract sufficient. I see great difficulty, now that equity is to be administered by a Court which has the facts found by a jury, in applying these to a trial by jury, but that is a question not raised now. But I do not think this anomaly [that entering into possession will always take a case out of the Statute] should be extended; and it is not a little remarkable that there is no case, at least none was cited, and I have found none, in which there has not been a change in the possession of the land, or, in the case where the purchaser was a tenant already in possession, a change in the nature of his tenure, which, rightly or wrongly, was held equivalent to a change in the possession." Fifthly, the idea that Lord Cranworth's observations in Caton v Caton are to be seen as expressing some broader principle of equitable fraud of the kind subsequently propounded by Pomeroy and adopted at various times in parts of the United States of America is misplaced. As has been emphasised, Lord Cranworth in Caton v Caton, just like Lord Cottenham in Mundy v Jolliffe, was doing no more than articulating an ex post facto rationalisation of the incidents of the doctrine of part performance as developed as a matter of legal history. So much is especially clear in Lord Cranworth's speech where, having stated that the ground on which the doctrine of part performance takes a contract out of the purview of the Statute of Frauds arises where a party to a contract has acted to his or her detriment on the faith of a contract, his Lordship immediately went on to add163 epexegetically that such acts included "taking possession of land, and expending money in building or other like acts" (both being established categories of acts of part performance unequivocally referable to the type of contract alleged). Sixthly, there is nothing in Gibbs J's judgment in Regent v Millett that suggests an intention to depart from the requirements of the doctrine of part performance as adumbrated by Lord Selborne in Maddison v Alderson and adopted by this Court in McBride v Sandland and Cooney v Burns. It is true that his Honour referred164 to the possibility of it being easier to hold for a plaintiff if the test were as propounded in Steadman v Steadman. But Gibbs J decided the case on the basis of established principle. His Honour's reference to Caton v 163 Caton v Caton (1866) LR 1 Ch App 137 at 148. 164 Regent v Millett (1976) 133 CLR 679 at 683. NettleJ Caton was evidently to make the point in support of the orthodox application of established principle that the facts in Regent v Millett coincided more or less precisely with the example identified in Caton v Caton of proof of acts of part performance unequivocally referable to the kind of contract alleged such as taking possession of land and spending money in building or other like acts. Should the requirement for unequivocal referability be abandoned? The appellant further contended that, notwithstanding previous authority, this Court should now adopt the broad approach to part performance propounded by Pomeroy on the basis that it is more consistent with equitable principle165 and better accords with developments in England, the United States of America, Canada and New Zealand. That contention is unpersuasive. Reference was earlier made to the decision of the House of Lords in Steadman v Steadman166, which concerned parties to a dissolved marriage who had orally agreed that the wife would surrender her interest in the matrimonial home for Β£1,500 and that the husband's Β£194 arrears of maintenance would be remitted except for Β£100. Thereafter consent orders were made by the magistrates' court in accordance with the terms of the agreement, and the husband paid the Β£100 and his solicitor, on instructions, tendered to the wife a deed of transfer of the matrimonial home. The wife refused to sign the deed. It was held by a majority that what the husband had done in pursuance of the oral agreement comprised sufficient acts of part performance. It is difficult to extract a definitive ratio from the speeches of the majority. Lord Reid held167 that it was sufficient if the acts of part performance relied upon proved on the balance of probabilities (leaving aside evidence about the alleged contract) that there must have been a contract, and in effect concluded that the husband's acts of sending the deed of transfer to the wife and incurring to do so constituted a sufficient act of part performance. expense Viscount Dilhorne held168 that it was necessary that the acts relied upon point to the existence of some such contract as alleged (having regard to evidence of the contract), and concluded that the acts relied upon met that description, either on 165 See and compare Spry, The Principles of Equitable Remedies: Specific Performance, Injunctions, Rectification and Equitable Damages, 9th ed (2014) at 167 Steadman v Steadman [1976] AC 536 at 540-542. 168 Steadman v Steadman [1976] AC 536 at 553-554, 556. NettleJ the basis that what had been said in the magistrates' court in support of the consent orders made it plain that the Β£100 was paid in part performance of the alleged contract or, alternatively, because that fact coupled with the tender of the deed of transfer to the wife was consistent with the agreement which the husband alleged. Lord Simon of Glaisdale accepted169 that the test was that the acts of part performance relied upon be more likely than not referable to some such contract as alleged, and that there was part performance because it was more probable than not that the husband acted as he did because of a contract with the wife consistent with that alleged. Lord Salmon applied170 Maddison v Alderson, which he considered stood for the principle that "acts which prima facie establish the existence of some contract no more likely to be concerned with land than with anything else cannot be sufficient part performance", but said that he did not accept the line of authority which had established that payment of money can never constitute a sufficient act of part performance. His Lordship held171 that the payment of the Β£100, and the other acts of purported part performance, when viewed in light of the surrounding circumstances, engaged the doctrine of part performance. Lord Morris of Borth-y-Gest, in dissent, adopted172 an orthodox approach of requiring unequivocal referability in accordance with Maddison v Alderson and concluded that the acts of part performance relied upon did not satisfy that requirement. Given that Lord Reid and Lord Simon were the only Law Lords who were prepared openly to depart from the Maddison v Alderson requirement of unequivocal referability, and each of them adopted a different basis for doing so, and that Viscount Dilhorne and Lord Salmon purported to adhere to Maddison v Alderson, there is, with respect, little in any of the majority speeches that provides a satisfactory or compelling basis to depart from Maddison v Alderson. Much more compelling, with great respect, is the reasoning of Lord Morris in dissent173: "Courts of equity did not set out to make the terms of an Act of Parliament virtually nugatory. What the courts did was to consider the alleged acts of part performance and to decide whether the reasonable explanation of them was that the parties must have made (or stated otherwise had made) 169 Steadman v Steadman [1976] AC 536 at 563-564, 566. 170 Steadman v Steadman [1976] AC 536 at 567-568, 570. 171 Steadman v Steadman [1976] AC 536 at 572-573. 172 Steadman v Steadman [1976] AC 536 at 546-548. 173 Steadman v Steadman [1976] AC 536 at 547. NettleJ some contract such as the contract alleged. As the whole area of the law of part performance relates to contracts 'for the sale or other disposition of land or any interest in land,' I would have thought that it followed that on a consideration of alleged acts of part performance it has to be decided whether their reasonable explanation is that the parties must have made some contract in relation to land such as the contract alleged." To that may be added that the doctrine of part performance was abolished in England by s 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989 (UK) and hence that there will be no further development of the law relating to the Statute of Frauds in that country174. So far as the United States of America is concerned, having regard to what has already been said in relation to the topic, it is perhaps sufficient to observe that the approach in that country varies from jurisdiction to jurisdiction, and from time to time, and, in some jurisdictions, still precisely accords to Maddison v Alderson. The fact that some American jurisdictions have adopted Pomeroy's thesis while others have adhered to the status quo ante is not a sufficient reason to depart from long-established authority. Furthermore, to return to something mentioned earlier in these reasons, in some if not all of the American jurisdictions that have adopted Pomeroy's thesis, the relief ordinarily accorded is or was not specific performance but rather a lesser remedy sufficient to put the plaintiff in the position in which he or she would have been but for acting on the faith of the contract to his or her detriment. As was earlier observed, that more closely resembles the kind of relief which may be accorded in this country in cases of equitable estoppel, and it is notable that the appellant has not sought that kind of relief. He has only ever sought the specific performance of the contract alleged. The only Canadian decision to which counsel for the appellant referred was the judgment of the Supreme Court of Canada in Hill v Nova Scotia (Attorney General)175. In that case, the province of Nova Scotia ("the Province") expropriated a strip of land for a controlled access highway that bisected Hill's farm. Representatives of the Province's Department of Transport represented to Hill, orally and in writing, that as part of the compensation he had accepted he would receive an interest in the highway to permit him to move people, equipment and livestock back and forth across the highway. In furtherance of the agreement, the Department built fences, gates and ramps, which Hill and his sons 174 See also Firstpost Homes Ltd v Johnson [1995] 1 WLR 1567 at 1571 per Peter Gibson LJ (Hutchison LJ agreeing at 1576); [1995] 4 All ER 355 at 358, 363. 175 [1997] 1 SCR 69. NettleJ used, and the Department maintained for 27 years. The Province then alleged that the agreement did not create an interest in land and argued that certain legislation forbade it. That legislation provided that no person shall, without a written permit from the relevant Minister, construct or use any private road, entrance way or gate that opens up onto a controlled access highway. The judge at first instance held that the Province had granted an equitable easement across the highway to Hill. The Nova Scotia Court of Appeal allowed an appeal by majority. On appeal to the Supreme Court, it was held176 that the representation made to Hill that he had an interest in the highway similar to an easement formed part of the consideration for the expropriation of the land, and that, by the Department's actions over 27 years, it had confirmed that representation. Hill had thereby acquired an equitable permission or interest in the land in the form of a right of way to enter upon and cross the highway. It was further observed177 that the legislation required the permission to be in writing, and on the facts it may have been, but, if it were not, the doctrine of part performance prevented the Province from relying on the legislation. Specifically with reference to the application of the doctrine of part performance, the Court held that178: "Where the terms of an agreement have already been carried out, the danger of fraud is averted or at least greatly reduced. To borrow a phrase from the law of tort, the thing speaks for itself. In the present case, for example, it does not matter so much what was said. What is critical is what was done; and what was done was the construction and maintenance of access ramps. There is no mistaking the purpose for which those ramps were constructed: it was to allow Mr Hill a way of reaching and crossing the highway. Accordingly, in this instance strict adherence to the literal terms of the writing requirement would not serve the purpose for which it was devised. Fraud would not be prevented; rather, [Hill and his sons] would be defrauded. It is for this reason that equity evolved the doctrine of part performance: '[This doctrine] was evoked when, almost from the moment of passing of the Statute of Frauds, it was appreciated that it was being used for a variant of unconscionable dealing, which the statute itself was designed to remedy. A party to an oral contract for the disposition of an interest in land could, despite performance 176 Hill v Nova Scotia (Attorney General) [1997] 1 SCR 69 at 73-74 [6]-[8]. 177 Hill v Nova Scotia (Attorney General) [1997] 1 SCR 69 at 74-77 [8]-[14]. 178 Hill v Nova Scotia (Attorney General) [1997] 1 SCR 69 at 74-75 [9]-[11]. NettleJ of the reciprocal terms by the other party, by virtue of the statute disclaim liability for his own performance on the ground that the contract had not been in writing. Common Law was helpless. But Equity, with its purpose of vindicating good faith and with its remedies of injunction and specific performance, could deal with the situation. The Statute of Frauds did not make such contracts void but merely unenforceable; and, if the statute was to be relied on as a defence, it had to be specifically pleaded. Where, therefore, a party to a contract unenforceable under the Statute of Frauds stood by while the other party acted to his detriment in performance of his own contractual obligations, the first party would be precluded by the Court of Chancery from claiming exoneration, on the ground that the contract was unenforceable, from performance of his reciprocal obligations; and the court would, if required, decree specific performance of the contract. Equity would not, as it was put, allow the Statute of Frauds "to be used as an engine of fraud." This became known as the doctrine of part performance β the "part" performance being that of the party who had, to the knowledge of the other party, acted to his detriment in carrying out irremediably his own obligations (or some significant part of them) under the otherwise unenforceable contract. [Steadman v Steadman, supra, at p 558.]' Quite simply equity recognizes as done that which ought to have been done. A verbal agreement which has been partly performed will be enforced." (emphasis added) As can be seen, the Supreme Court made no reference to Maddison v Alderson or to any other authority on the subject except the quoted passage of Lord Simon's speech from Steadman v Steadman. Nor did the Supreme Court condescend to any sort of analysis of the quality of acts needed to bring a matter within the doctrine of part performance. It is notable that, by giving possession of the land in suit to the Province in accordance with the agreement, Hill in fact did an act of part performance which was unequivocally referable to the kind of contract he alleged, and, on that basis, parol evidence would have been admissible to prove the terms of the agreement in accordance with Maddison v Alderson. But whatever the basis of the Supreme Court's decision, given that it does not consider the requirement of unequivocal referability, and does not appear to suggest an intention to depart from that requirement, it should not be regarded as a reason to depart from the requirement. Finally, with respect to New Zealand, counsel for the appellant invoked the decision of the Court of Appeal of New Zealand in Mahoe Buildings Ltd v NettleJ Fair Investments Ltd179, in which it was observed that the formulation of the requirements of part performance undertaken by Tipping J in T A Dellaca Ltd v PDL Industries Ltd180 provided a helpful analysis for the purposes of the case in question. In T A Dellaca Ltd v PDL Industries Ltd181, after an extensive review of authorities, Tipping J stated: "I am of the view that in a part performance case the Court must consider three points which I would frame as follows: 1. Was there a sufficient oral agreement such as would have been enforceable but for the Act? Has there been part performance of that oral agreement by the doing of something which: clearly amounts to a step in the performance of a contractual obligation or the exercise of a contractual right under the oral contract; and (b) when viewed independently of the oral contract was, on the probabilities, done on the footing that a contract relating to the land and such as that alleged was in existence. Do the circumstances in which that part performance took place make it unconscionable (fraudulent in equity) for the defendant to rely on the Act?" Reference to the remainder of Tipping J's reasoning182 reveals that his Honour took the ratio of Steadman v Steadman to be that, contrary to earlier authority, the payment of money can in certain circumstances amount to an act of part performance and that he did not consider it necessary to refer to any of the cases in England before Steadman v Steadman. His Honour added183, however, that: 179 [1994] 1 NZLR 281 at 287. 180 [1992] 3 NZLR 88 at 109. 181 [1992] 3 NZLR 88 at 109. 182 T A Dellaca Ltd v PDL Industries Ltd [1992] 3 NZLR 88 at 102. 183 T A Dellaca Ltd v PDL Industries Ltd [1992] 3 NZLR 88 at 104. NettleJ "While it is true that in some ways their Lordships may have relaxed the rule to some extent, it seems to me that there is an underlying theme throughout all the speeches that the act to qualify as one taken in part performance must be an act which, as Viscount Dilhorne put it, can reasonably be described as an act of part performance in ordinary parlance. It was that sort of act which founded the doctrine in the first place." In the result, it is not immediately apparent that Tipping J in T A Dellaca Ltd v PDL Industries Ltd or the Court of Appeal in Mahoe Buildings Ltd v Fair Investments Ltd intended to depart from the requirement of unequivocal referability. It is also not without significance that the acts of part performance in both T A Dellaca Ltd v PDL Industries Ltd and Mahoe Buildings Ltd v Fair Investments Ltd were of a kind unequivocally referable to the type of contract alleged. Accordingly, there does not appear to be sufficient reason in either decision to abandon the requirement of unequivocal referability. In John v Federal Commissioner of Taxation184, the judgment of the plurality laid down that, in determining whether to overrule an earlier decision of the Court, the considerations that are relevant include whether the earlier decision rested upon a principle carefully worked out in a significant succession of cases; whether there was a difference between the reasons of the Justices constituting the majority in the earlier decision; whether the earlier decision has achieved a useful result or has caused considerable inconvenience; and whether the earlier decision has been independently acted upon in a way that militates against change. In this case, each of those considerations points towards retention of the requirement of unequivocal referability. As has been seen, the requirement rests on a principle developed over some 300 years as a means of preventing the doctrine of part performance expanding to cases which would frustrate the intended operation of the Statute of Frauds. There was no relevant difference between the reasoning of the Law Lords in Maddison v Alderson or between the reasoning of the Justices who adopted Maddison v Alderson in McBride v Sandland and Cooney v Burns. The principles therein accepted have been acted on repeatedly, by this Court and by other courts in this country185, for more than a 184 (1989) 166 CLR 417 at 438-439 per Mason CJ, Wilson, Dawson, Toohey and Gaudron JJ; [1989] HCA 5. 185 See for example Regent v Millett (1976) 133 CLR 679 at 683 per Gibbs J (Stephen J, Mason J, Jacobs J and Murphy J agreeing at 684); Ogilvie v Ryan [1976] 2 NSWLR 504 at 524-525; Thwaites v Ryan [1984] VR 65 at 78 per Fullagar J (Starke J agreeing at 70); McMahon v Ambrose [1987] VR 817 at 847 per Marks J; Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at 432 per Brennan J; Khoury v Khouri (2006) 66 NSWLR 241 at 244 [16] (Footnote continues on next page) NettleJ century, and there is little reason to doubt that the comparatively stringent requirement continues to serve the objective that it was created to achieve: to prevent recurrence of the mischief which the Statute was enacted to suppress. Conclusion The appellant's contentions in support of some broader principle of equity not subject to the requirement of unequivocal referability should be rejected. per Hodgson JA, 263-267 [77]-[86] per Bryson JA (Handley JA agreeing Edelman Introduction The principal issue on this appeal is whether the Full Court of the Supreme Court of South Australia was correct in concluding that the doctrine of part performance did not apply, effectively because the alleged act of part performance was not unequivocally referable to some such contract of the general nature of that alleged186. The appellant's submission was that this requirement is not an entrenched part of the doctrine of part performance in Australia and that it is contrary to the principle upon which the doctrine is based. He submitted that this Court should place the doctrine on a firmer footing by following what was said to be the path briefly paved by the House of Lords in Steadman v Steadman187, until legislative intervention brought that path to a dead end188. The appellant's submissions, rightly, focused upon the principled basis for the doctrine and its historical development. Properly understood, the appellant submitted, the foundation of the doctrine of part performance is the avoidance of fraud. With such a foundation, he submitted, there can be no place for a requirement that acts of part performance be unequivocally referable to a contract of the general nature of that alleged. He submitted that to the extent that this requirement is recognised, the doctrine should be extended to abolish it. The reach of the doctrine should not be extended, because that extension cannot be justified by the rationale for the doctrine. The reasons that follow explain why the rationale for the doctrine is not that the Statute of Frauds 1677189 and equivalent statutes must not be used as an instrument of fraud. Nor is it that the court enforces "equities" arising from an act of part performance. Rather, the court enforces the contract itself. The rationale is the imposition of a moral principle despite the terms of the statute. The historical basis for that rationale for part performance lay in the 17th century doctrine by which a court would ignore matters falling within the terms of a statute if they were outside the statute's "equity". The doctrine of the "equity of the statute" permitted an imposition of external morality despite the terms of the statute. Although that 186 Pipikos v Trayans (2016) 126 SASR 436 at 462 [100]. 188 Law of Property (Miscellaneous Provisions) Act 1989 (UK), ss 2(1), 2(8), 4, Sched 2. 189 29 Car II c 3. Edelman view has long been discarded, as Lord Blackburn said in Maddison v Alderson190 the construction of the Statute of Frauds is not res integra. Nor is the construction of the equivalent statutory provisions. Relevantly, on this appeal, the doctrine of part performance is expressly preserved by s 26 of the Law of Property Act 1936 (SA). The doctrine cannot, and should not, be abolished judicially. But it certainly should not be extended. The appeal must be dismissed. The doctrine and its development Section 26 of the Law of Property Act provides as follows: "(1) No action shall be brought upon any contract for the sale or other disposition of land or of any interest in land, unless an agreement upon which such action is brought, or some memorandum or note thereof, is in writing, and signed by the party to be charged or by some person thereunto by him lawfully authorised. This section does not affect the law relating to part performance, or sale by the court." This section was based upon s 4 of the Statute of Frauds, which provided that "noe Action shall be brought whereby to charge ... any person ... upon any Contract or Sale of Lands ... unlesse the Agreement upon which such Action shall be brought or some Memorandum or Note thereof shall be in Writeing and signed by the partie to be charged therewith or some other person thereunto by him lawfully authorized". The doctrine of part performance was conceived in order to enforce a contract that did not satisfy the requirements of writing contained in the Statute of Frauds. It required the person seeking to enforce a contract that did not satisfy the statutory writing requirements to prove sufficient acts of part performance as a "condition precedent"191 to "let in"192 or "open the 190 (1883) 8 App Cas 467 at 489. 191 Pomeroy, A Treatise on the Specific Performance of Contracts, (1879) at 151. 192 Chaproniere v Lambert [1917] 2 Ch 356 at 361; Rawlinson v Ames [1925] Ch 96 at 114; Fry and Northcote, A Treatise on the Specific Performance of Contracts, 6th ed (1921) at 277 Β§580. Edelman door"193 to oral evidence of the whole agreement, which would be enforced if it were an agreement that, of its nature, was enforceable by a court of equity194. initially developed Part performance was together with another circumstance in which an agreement without sufficient writing could be enforced despite the provisions of the Statute. That circumstance was where the agreement was admitted by the defendant. This is illustrated by the decision of Lord Hardwicke LC in Lacon v Mertins. Dickens' report of that case referred only to the Lord Chancellor's observation, reiterating a point that he and Lord Macclesfield LC had made previously195, that, if a defendant admitted the agreement, the admission would take the case out of the Statute of Frauds196. The admission would also have bound the defendant's representative when the defendant died before the decree197. However, in Atkyns' more detailed report of the case, the Lord Chancellor is reported as referring also to part performance as a basis upon which the contract "ought to be performed"198. The allied exception concerning admissions was soon abolished. In Popham v Eyre199, the Lord Chancellor said that for the court to enforce an agreement that did not satisfy the statutory requirements of writing due only to an admission would be to repeal the Statute of Frauds. And in Moore v Edwards200, Lord Loughborough LC focused upon Lord Hardwicke's alternative remarks about part performance in Lacon v Mertins and said that Atkyns' report about admission as a ground for specific performance was a "complete[] mis-statement". In 1806, Sir William Grant MR said that admissions were "immaterial"; if a defendant insisted upon the benefit of the Statute, then the 193 Brough v Nettleton [1921] 2 Ch 25 at 28. 194 Chaproniere v Lambert [1917] 2 Ch 356 at 361; Fry and Northcote, A Treatise on the Specific Performance of Contracts, 6th ed (1921) at 277 Β§580; Williams, The Statute of Frauds Section Four, (1932) at 259-260. 195 See Child v Godolphin (1723) Dick 39 [21 ER 181]; Cottington v Fletcher (1740) 2 Atk 155 [26 ER 498]. 196 (1743) Dick 664 at 664 [21 ER 430 at 430]. 197 Story, Commentaries on Equity Jurisprudence, (1836), vol 2 at 57 fn 1. 198 (1743) 3 Atk 1 at 3 [26 ER 803 at 804]. 199 (1774) Lofft 786 at 808 [98 ER 919 at 930-931]. 200 (1798) 4 Ves Jun 23 at 24 [31 ER 12 at 13]. Edelman plaintiff was required to show a complete written agreement201. Apart from pleading issues, the consensus became that an admission was not generally sufficient to take the matter outside the Statute202. The relevance of an admission became generally limited to a way to prove the terms of the contract after sufficient acts of part performance had been proved203. The legitimacy of the doctrine of part performance was also disputed. Lord Eldon LC said that the Court of Chancery had "gone much farther than a wholesome attention to this Statute with reference to the specific performance of agreements will justify"204. Roberts described the doctrine as executing an agreement "in the teeth of the statute"205. Lord Kenyon "lament[ed] extremely that exceptions were ever introduced in construing the Statute of Frauds"206. Lord Blackburn said that the Statute was construed "as if it contained these words, 'or unless possession of the land shall be given and accepted'"207. Part performance was described as a doctrine by which the Court of Chancery "radically modified"208 the provisions of the Statute. At the conclusion of the 18th century, Sir Richard Arden MR said209: "I admit, my opinion is, that the Court has gone rather too far in permitting part-performance and other circumstances to take cases out of 201 Blagden v Bradbear (1806) 12 Ves Jun 466 at 471 [33 ER 176 at 178]. See also Cooth v Jackson (1801) 6 Ves Jun 12 at 20-21 [31 ER 913 at 918]. 202 Sugden, A Practical Treatise of the Law of Vendors and Purchasers of Estates, 7th ed (1826) at 102; Story, Commentaries on Equity Jurisprudence, (1836), vol 2 at 59-60 Β§757; Mitford and Tyler, A Treatise on the Pleadings in Suits in the Court of Chancery by English Bill, (1876) at 355. 203 Cooth v Jackson (1801) 6 Ves Jun 12 at 37-38 [31 ER 913 at 926-927]. 204 Morison v Turnour (1811) 18 Ves Jun 175 at 183 [34 ER 284 at 287]. 205 Roberts, A Treatise on the Statute of Frauds, (1807) at 133. 206 Chater v Beckett (1797) 7 TR 201 at 204 [101 ER 931 at 933]. 207 Maddison v Alderson (1883) 8 App Cas 467 at 489. See also Maitland, Equity also the Forms of Action at Common Law, (1910) at 241. 208 Simpson, A History of the Common Law of Contract: The Rise of the Action of Assumpsit, (1987) at 614. See also Holdsworth, A History of English Law, 2nd ed (1937), vol 6 at 393. 209 Forster v Hale (1798) 3 Ves Jun 696 at 712-713 [30 ER 1226 at 1234]. Edelman the Statute, and then, unavoidably perhaps, after establishing the agreement, to admit parol evidence of the contents of that agreement. As to part-performance, it might be evidence of some agreement; but of what must be left to parol evidence. I always thought the Court went a great way. They ought not to have held it evidence of an unknown agreement ... Those cases are very dissatisfactory. It was very right to say, the Statute should not be an engine of fraud; therefore compensation would have been very proper." Yet the doctrine survived. It did not evolve into a different, or narrower, doctrine, such as one that provided monetary compensation to relieve detriment. It was expressly preserved in some legislation that re-enacted s 4 of the Statute of Frauds, including the relevant legislation on this appeal. Although the doctrine survived, judicial doubts about its legitimacy led to it being constrained. The constraint upon the doctrine relevant to this appeal was that the acts of part performance must be "such as could be done with no other view or design than to perform the agreement"210. This was later expressed by Sir Thomas Plumer MR as a requirement that the acts must be "unequivocally [referable] to the agreement"211. Initially, this requirement was treated loosely so that payment of a material part of the purchase price would suffice212. But the sufficiency of payment of money was later denied213, and there became few circumstances that did not include the giving or taking of possession that would suffice to satisfy this requirement214. Other constraints were sometimes imposed upon the doctrine. One was that the acts must have been done in part performance of the contract alleged215. In other words, once the agreement was proved, it must be 210 Gunter v Halsey (1739) Amb 586 at 586-587 [27 ER 381 at 381]. 211 Morphett v Jones (1818) 1 Swans 172 at 181 [36 ER 344 at 348]. See also Frame v Dawson (1807) 14 Ves Jun 386 at 387 [33 ER 569 at 569]; Maddison v Alderson (1883) 8 App Cas 467 at 479. 212 Lacon v Mertins (1743) 3 Atk 1 at 3-4 [26 ER 803 at 804-805]. 213 Buckmaster v Harrop (1802) 7 Ves Jun 341 [32 ER 139]; Clinan v Cooke (1802) 1 Sch & Lef 22 at 41; Hughes v Morris (1852) 2 De G M & G 349 at 356 [42 ER 907 at 910]; Sugden, A Practical Treatise of the Law of Vendors and Purchasers of Estates, 7th ed (1826) at 112, discussing Butcher v Butcher (1804) 9 Ves Jun 382 [32 ER 650]; Story, Commentaries on Equity Jurisprudence, (1836), vol 2 at 64-66 214 Maddison v Alderson (1883) 8 App Cas 467 at 489. 215 McBride v Sandland (1918) 25 CLR 69 at 79; [1918] HCA 32; Cooney v Burns (1922) 30 CLR 216 at 231-232; [1922] HCA 8; J C Williamson Ltd v Lukey and (Footnote continues on next page) Edelman shown that the acts were done under the terms of the agreement. Another suggested constraint was that the acts of part performance must be acts by the party seeking to enforce the contract216. It is unnecessary on this appeal to consider those constraints or other possibilities raised in some of the older authorities. When a significant reform is proposed to a controversial doctrine that has existed for around three centuries, it is necessary to understand the rationale for the doctrine in light of its origins and development. Once that is understood, it is possible to consider whether the doctrine should now be placed on a different footing. The various rationales for the doctrine Different modes of proof and procedure in Chancery A core part of the appellant's oral submissions was devoted to rejecting a proposed rationale for the doctrine of part performance, namely, that the doctrine was concerned with unique principles of proof and procedure in Chancery. The submissions on this point should be accepted. The essence of this proposed rationale is that the Statute of Frauds did not apply to bills in equity, or applied in a different way, because of the unique features of Chancery proof and procedure. This rationale had strong support. In Litton Strode v Falkland217, the Lord Chancellor was attributed with saying that a hearing in Chancery "is not like the Case of Evidence to a Jury, who are easily [biased] by it, which this Court is not". Relying upon this obiter dictum, Thayer218 and Wigmore219, who were followed by Holdsworth220, argued that Mulholland (1931) 45 CLR 282 at 300; [1931] HCA 15; Regent v Millett (1976) 133 CLR 679 at 683; [1976] HCA 40. 216 Caton v Caton (1866) LR 1 Ch App 137 at 148; Ashburner, Principles of Equity, (1902) at 540. Cf Williams, The Statute of Frauds Section Four, (1932) at 261, discussing Dickinson v Barrow [1904] 2 Ch 339. 217 (1708) 3 Chan Rep 169 at 177 [21 ER 758 at 760]. 218 Thayer, A Preliminary Treatise on Evidence at the Common Law, (1898) at 431. 219 Wigmore, A Treatise on the System of Evidence in Trials at Common Law, (1905), vol 4 at 3421 Β§2426. 220 Holdsworth, A History of English Law, 2nd ed (1937), vol 6 at 393. Edelman Chancery did not depend upon a jury to find facts, and the parties were able to give evidence. The different procedures and proof requirements of Chancery trials may have been the context in which some judges chose not to apply the Statute of Frauds according to its terms, but those different procedures do not provide any rationale for why the Statute ought not apply. If those procedures were somehow the rationale for the doctrine of part performance, the common law should have recognised the doctrine once its procedures also allowed facts to be found by the judge and the parties to give evidence. Further, as Professor Macnair has observed, the content of the Statute of Frauds shows that the concern of the Statute was not merely with jury trials. The Statute addressed problems with proof of wills in the church courts, and required writing in matters of pure equity, such as trusts and the assignment of equitable interests221. At the time the Statute was passed, on occasion equity courts would also send issues of fact for determination by a common law jury222. The only attempt at a substantive justification for the doctrine based upon unique Chancery procedures was made by A W B Simpson, who observed that the Statute speaks in language redolent only of the common law, referring to "actions" to "charge" defendants. However, as Simpson acknowledged, there is no trace in any of the cases of any reliance upon these verbal distinctions as a means to justify the exclusion of equitable principles from the reach of the Statute223. Many of the early cases, not involving part performance, were concerned with whether the requirements of the Statute had been met in equity bills for specific performance224. Enforcement of the equities, not the contract An alternative rationale for the doctrine of part performance was that suggested by Lord Selborne LC in Maddison v Alderson225, although his was not the first such suggestion226. The Lord Chancellor said that, in a suit founded on 221 Macnair, The Law of Proof in Early Modern Equity, (1999) at 153-154. 222 Macnair, The Law of Proof in Early Modern Equity, (1999) at 157-158. 223 Simpson, A History of the Common Law of Contract: The Rise of the Action of Assumpsit, (1975) at 615. 224 Macnair, The Law of Proof in Early Modern Equity, (1999) at 160. 225 (1883) 8 App Cas 467 at 475. 226 Story, Commentaries on Equity Jurisprudence, (1836), vol 2 at 57 Β§754. Edelman part performance, the defendant is not charged upon the contract itself but "upon the equities resulting from the acts done in execution of the contract". He said that, on those equities, the "choice is between undoing what has been done ... and completing what has been left undone"227. This explanation has the great benefit of reconciling the doctrine with the terms of the Statute of Frauds. It was adopted by Isaacs and Rich JJ in McBride v Sandland228, and was described by Evatt J in J C Williamson Ltd v Lukey and Mulholland as "put[ting] forward the doctrine from the point of view of Courts of Equity in the most effective and plausible way"229. In the same case, Dixon J referred to this rationale, although in much more cautious terms: "the party is said to be charged upon the equities arising out of the acts of part performance and not merely upon the contract" (emphasis added)230. However, he continued, in terms that undermined this rationale: "in such a case the equity which so arises is to have the entire contract carried into execution by both sides". The immediate problem with this rationale, based only upon "equities", is that it is inconsistent with the courts' focus in all the cases upon proof of the terms of the contract without sufficient writing, and the order of specific performance of those terms. The order is not limited to requiring performance of a contract, or "an equity" that is implied only from the acts alleged to invoke the doctrine. As explained above, part performance opens the door for a plaintiff to prove the terms of the actual contract, including by admission or evidence. It is then the terms of the actual contract that are enforced, not the "equities" arising from the part performance. Lord Selborne LC was also incorrect in his assumption that, if the "equities" were enforced, the available choices were only to (1) make orders undoing the acts that had been done, or (2) order that performance be completed. This flaw in the Lord Chancellor's logic was soon exposed by Ashburner, who said231: "Acts done under a contract which cannot be actively enforced may give the party doing them an independent equity; but that is, or may be, entirely 227 (1883) 8 App Cas 467 at 476. 228 (1918) 25 CLR 69 at 77. 229 (1931) 45 CLR 282 at 308. 230 (1931) 45 CLR 282 at 300. 231 Ashburner, Principles of Equity, (1902) at 540. See also Browne, Ashburner's Principles of Equity, 2nd ed (1933) at 392. Edelman different from the right to have the contract enforced. Such an equity may be satisfied by much less than the enforcement in the plaintiff's favour of all the terms of the contract. Eg, expenditure on land may be satisfied by giving a lien on the land for the amount expended." The same point was made by Pound, who observed that Lord Selborne LC was not suggesting that relief should be confined to restitution in equity232. Pound correctly said that the courts did not "enforce the equitable claims of the plaintiff arising from fraud or part performance as such, but rather the contract itself, exactly as if it were a legally enforceable contract for which the legal remedy was inadequate"233. Hence, the three Justices who addressed the point in this Court in J C Williamson Ltd v Lukey and Mulholland234 rejected a submission that an injunction, rather than specific performance of the contract, could be ordered on the basis of the "equities" arising from part performance. There are two further difficulties with the rationale that only the "equities" are enforced, rather than the oral contract itself. First, the theory cannot explain why these "equities" of part performance were initially enforced, in the absence of any part performance, where the agreement was admitted. In other words, before the decline of the enforcement of a contract because it was admitted, this rationale would have meant that the equities could be enforced even when there were no equities. One response to this may be that, as the doctrine developed, its true rationale emerged as one that enforced equities, or new legal rights, arising from the acts themselves. On this approach, as Sir John Baker suggested, the doctrine of part performance would have become "something like an equitable estoppel"235. Pomeroy argued that this path was taken in the United States236: "When a verbal contract has been made, and one party has knowingly aided or permitted the other to go on and do acts in part performance of the agreement, acts done in full reliance upon such agreement as a valid and binding contract, and which would not have been done without the agreement, and which are of such a nature as to change the relations of the parties, and to prevent a restoration to their former condition and an 232 Pound, "The Progress of the Law, 1918-1919: Equity", (1920) 33 Harvard Law Review 929 at 936-937. 233 Pound, "The Progress of the Law, 1918-1919: Equity", (1920) 33 Harvard Law Review 929 at 936. 234 (1931) 45 CLR 282 at 290, 300-301, 308. 235 Baker, An Introduction to English Legal History, 4th ed (2002) at 350. 236 Pomeroy, A Treatise on the Specific Performance of Contracts, (1879) at 144-145. Edelman adequate compensation for the loss by a legal judgment for damages, then it would be a virtual fraud in the first party to interpose the statute of frauds as a bar to a completion of the contract". However, as explained in the reasons of Kiefel CJ, Bell, Gageler and Keane JJ237 and the reasons of Nettle and Gordon JJ238, English and Australian law retained the clear differences between the doctrines of part performance and estoppel. Most notably, from its inception the doctrine of part performance in English and Australian law has remained a manner by which a contract without the required statutory writing could be proved and enforced. A second difficulty with the rationale that the doctrine enforces the equities rather than the contract is that this rationale could lead to results that are contrary to principle and precedent. Since it is said to be the "equities" that are specifically performed, and not the contract, a plaintiff would have no right to damages in substitution of "specific performance of any covenant, contract, or agreement" if there were some bar, or circumstances, precluding an order for specific performance that would otherwise have been made. Yet, one of the very reasons for Lord Cairns' Act239 was to ensure that the court had jurisdiction to award compensation in such a case240. There was no suggestion in this Court in J C Williamson Ltd v Lukey and Mulholland241 that the trial judge would have erred in awarding damages under the Victorian equivalent of Lord Cairns' Act242, had he been correct that part performance was established. Allowing the action in order to prevent a fraud In the early decisions on part performance, the few explanations that were given generally expressed the basis of the doctrine as being the avoidance of fraud. There were some cases of genuine fraud where the Statute was not 239 Chancery Amendment Act 1858 (UK) (21 & 22 Vict c 27). 240 United Kingdom, Chancery Commission, The Third Report of Her Majesty's Commissioners Appointed to Inquire into the Process, Practice, and System of Pleading in the Court of Chancery, (1856) at 4. 241 See (1931) 45 CLR 282 at 297. 242 Supreme Court Act 1928 (Vic), s 62(4). Edelman applied243. But it was not usually this genuine fraud to which reference was had in instances of part performance244. A decision that relied upon this rationale is Lord Cranworth LC's speech in Caton v Caton245. In that case, the Lord Chancellor said that the reason "part performance takes a contract out of the purview of the Statute of Frauds" was that: "it would be a fraud in the other party to set up the legal invalidity of the contract on the faith of which he induced, or allowed, the person contracting with him to act, and expend his money". In this speech, the Lord Chancellor echoed statements by Sugden (later, Lord St Leonards) that specific performance was ordered so that "one side may not take advantage of the statute, to be guilty of fraud"246. But to rely upon provisions of a general statute to the disadvantage of another is not fraudulent. As Lord Selborne LC said in Maddison v Alderson247, with reference to fraud, "it cannot be meant that equity will relieve against a public statute of general policy in cases admitted to fall within it". The same point had been made in 1807 in Roberts' work on the Statute of Frauds. He observed that, unlike cases where the transaction involves actual fraud, in the case of part performance the so-called fraud consisted only in "unconscientiously insisting upon the statute" to prevent enforcement of the antecedent agreement248. He continued249: "It is easy to see that this is a very different mode of procedure from that which the courts are to be regarded as pursuing in the case of fraudulent suppression or representation". 243 See Pym v Blackburn (1796) 3 Ves Jun 34 at 38, fn (1) [30 ER 878 at 881]. 244 Pound, "The Progress of the Law, 1918-1919: Equity", (1920) 33 Harvard Law Review 929 at 937. See also Maddison v Alderson (1883) 8 App Cas 467 at 490. 245 (1866) LR 1 Ch App 137 at 148. 246 Sugden, A Practical Treatise of the Law of Vendors and Purchasers of Estates, 7th ed (1826) at 104. See also Buckmaster v Harrop (1802) 7 Ves Jun 341 at 346 [32 ER 139 at 141]. 247 (1883) 8 App Cas 467 at 474. 248 Roberts, A Treatise on the Statute of Frauds, (1807) at 135. 249 Roberts, A Treatise on the Statute of Frauds, (1807) at 136. Edelman The fictitious nature of fraud when used as the rationale underpinning the doctrine of part performance can be seen by contrasting (i) the entitlement to rely upon the Statute at any point until immediately before the other party acts in a manner unequivocally referable to a contract of the general nature of that alleged, and (ii) the lack of such entitlement from that point, even if the acts are performed without the knowledge of the person wishing to rely on the Statute. The suggestion that performance of those acts turns the other party, even without knowledge, into a fraudster reveals the simple point that the "fraud" in such cases is not genuine fraud250. Since such conduct was neither actual fraud nor a vitiating factor that is sometimes described as "equitable fraud", part performance has been described as "equitable or constructive fraud"251. But this conceals the real justification for the doctrine, in the same way that describing a dog as a "constructive cat" fails to explain why a dog should be treated as if it were a cat252. Recognising that there was no actual fraud in many cases of part performance, Story said that the jurisdiction of equity was based upon taking "every one's act according to conscience, and not to suffer undue advantage to be taken of the strict forms of positive rules"253. As Williams observed, in the 17th and 18th century cases on part performance the courts "seem[] invariably to have been concerned with the moral aspect of the matter"254. The remaining, and accurate, rationale explains, as a matter of history, why it was possible for judges to prevent a party from insisting upon the terms of a statute by imposing external notions of conscience or morality upon the statute, despite its terms. Enforcing the agreement for moral reasons despite the Statute The reason that the doctrine of part performance was recognised, despite the terms of the Statute of Frauds, was the principle of morality, sometimes described as public conscience. In the context of what would become the secret trust exception to the Statute, Lord Nottingham denied that this morality was the idiosyncratic conscience of an individual Chancellor, insisting that it was a notion of objective, public conscience255. The principle of morality was that a 250 See Matthews v Holmes (1853) 5 Gr 1 at 80. 251 Spry, The Principles of Equitable Remedies, 9th ed (2014) at 262. 252 See Swadling, "The Fiction of the Constructive Trust", (2011) 64 Current Legal Problems 399 at 399. 253 Story, Commentaries on Equity Jurisprudence, (1836), vol 1 at 324 Β§330. 254 Williams, The Statute of Frauds Section Four, (1932) at 234. 255 Cook v Fountain (1676) 3 Swans 585 at 600 [36 ER 984 at 990]. Edelman contract, which was accepted by the judge to be unequivocally in existence, should be performed. That principle informed the decisions to take outside the Statute of Frauds both (i) cases of part performance256, and (ii) early cases where a contract was admitted257. This was the morality that led courts to characterise the failure to perform an agreement using the fiction of fraud as "a fraud upon the person performing", rather than attempting to suggest that "the agreement was not originally within the contemplation of the statute"258. Also using fraud in this sense, Lord O'Hagan said in Maddison v Alderson259 that some of the older, "bold decisions" had been "prompted no doubt by a desire to defeat fraud and accomplish justice". In 1999, Gleeson CJ, Gaudron and Gummow JJ said that the doctrine of part performance has a history of three centuries of case law to "the effect of allowing specific performance of a contract which on its face the Statute of Frauds renders unenforceable"260 (emphasis added). As Gummow J observed extrajudicially261, early cases that allowed enforcement of a contract by part performance did so "in an age when the doctrine of the equity of the statute ... was given fairly free rein". One limb of the doctrine of the equity of the statute, prevailing at the time of the Statute of Frauds262, was that "cases within the terms of the statute but not within its mischief might be placed outside its operation"263. This doctrine of the equity of the statute, and its application to part performance, was thus "closely connected with the attitude of seventeenth- and eighteenth- 256 Story, Commentaries on Equity Jurisprudence, (1836), vol 1 at 324 Β§330. 257 Roberts, A Treatise on the Statute of Frauds, (1807) at 156-157; Whitchurch v Bevis (1786) Dick 664 at 665 [21 ER 430 at 430]. 258 Whitbread v Brockhurst (1784) 1 Bro CC 404 at 413 [28 ER 1205 at 1210]. 259 (1883) 8 App Cas 467 at 485. 260 Esso Australia Resources Ltd v Federal Commissioner of Taxation (1999) 201 CLR 49 at 60 [19]; [1999] HCA 67. 261 Gummow, Change and Continuity, (1999) at 66-77. 262 Coke, The First Part of the Institutes of the Laws of England, 9th ed (1684), c 2, 263 Nelson v Nelson (1995) 184 CLR 538 at 553; [1995] HCA 25. Edelman century courts toward statutes" where Lords Chancellors saw their exercise of power "over ... ethical lines" when construing statutes264. One reason the breadth of this approach to the Statute of Frauds was less controversial in the 17th century than today was that the draftsperson of a statute could be the judge called upon to construe it. Lord Nottingham was likely the first draftsman265 of the Statute of Frauds, as well as being one of those who first construed it266. In a case shortly after its enactment, he said that he "had some reason to know the meaning of this law; for it had its first rise from me"267. Prior to the enactment of the Statute of Frauds, as Lord Nottingham had written extrajudicially268 and judicially269, equity would not compel the performance of a parol agreement, that is, an agreement that was not in the form of a deed, unless it had been executed in part or executed on one side270. By continuing to recognise specific performance of partly performed agreements that did not 264 Pound, "The Progress of the Law, 1918-1919: Equity", (1920) 33 Harvard Law Review 929 at 941. 265 Costigan, "The Date and Authorship of the Statute of Frauds", (1913) 26 Harvard Law Review 329 at 335; Hening, "The Original Drafts of the Statute of Frauds (29 Car II c 3) and their Authors", (1913) 61 University of Pennsylvania Law Review 266 See, eg, Turner v Turner (1678) in Yale (ed), Lord Nottingham's Chancery Cases, (1961), vol 2, 711 at 712; Alfary v Sergeant (1679) in Yale (ed), Lord Nottingham's Chancery Cases, (1961), vol 2, 761; Combs v Norrington (1680) in Yale (ed), Lord Nottingham's Chancery Cases, (1961), vol 2, 793; Mowbray v Bacon (1680) in Yale (ed), Lord Nottingham's Chancery Cases, (1961), vol 2, 852; Potts v Turvin (1681) in Yale (ed), Lord Nottingham's Chancery Cases, (1961), vol 2, 856. 267 Ash v Abdy (1678) 3 Swans 664 at 664 [36 ER 1014 at 1014]. 268 Yale (ed), Lord Nottingham's 'Manual of Chancery Practice' and 'Prolegomena of Chancery and Equity', (1965) at 310. As to the date at which he wrote, see Dawson, "Book Review", (1966) 10 American Journal of Legal History 82 at 83. See also Khoury v Khouri (2006) 66 NSWLR 241 at 262 [74]. 269 Reasby & Smallwood (1677) in Yale (ed), Lord Nottingham's Chancery Cases, (1961), vol 2, 514; Taylor & Badderley (1678) in Yale (ed), Lord Nottingham's Chancery Cases, (1961), vol 2, 667; Cope & North (1678) in Yale (ed), Lord Nottingham's Chancery Cases, (1961), vol 2, 695. 270 Macnair, The Law of Proof in Early Modern Equity, (1999) at 148, citing The Practice of the High Court of Chancery Unfolded, (1651) at 48 and Sheppard, The Faithful Councellor, (1651) at 619-621. Edelman satisfy the statutory requirements of writing, the courts of equity, in that respect, substantially disregarded the Statute of Frauds. This technique of construction was not initially controversial because it arose at a time that predated modern notions of separation of powers, as well as parliamentary sovereignty271. It has been said that "so long as the law maker is his own interpreter the problem of a technique of interpretation [construction] does not arise"272. Although substantial changes were made to Lord Nottingham's first draft of the Statute of Frauds273, his claim to the original draftsmanship was seen as giving him a licence that would not exist after the recognition of a separation of powers. The doctrine of the equity of the statute, in its strong sense involving imposition of external ethical considerations despite the terms of the statute, fell into disfavour. It was criticised by Bentham in the second half of the 18th century274, and by others during the 19th century275. In 1874, Sedgwick said that the doctrine "approaches so near the power of legislation that a wise judiciary will exercise it with reluctance, and only in extraordinary cases"276. In the same year as his speech in Maddison v Alderson, Lord Selborne LC said that in the construction of statutes "[i]n ancient times the provinces of the Judge and of the legislator were not unfrequently confounded"277. Similar concerns were 271 Nelson v Nelson (1995) 184 CLR 538 at 552. See also Manning, "Textualism and the Equity of the Statute", (2001) 101 Columbia Law Review 1 at 42-43. 272 Thorne, "The Equity of a Statute and Heydon's Case", (1936) 31 Illinois Law Review 202 at 203. See also Costigan, "Interpretation of the Statute of Frauds", (1919) 14 Illinois Law Review 1 at 9-10. 273 Hening, "The Original Drafts of the Statute of Frauds (29 Car II c 3) and their Authors", (1913) 61 University of Pennsylvania Law Review 283 at 291; Simpson, A History of the Common Law of Contract: The Rise of the Action of Assumpsit, 274 Bentham and Hart, Of Laws in General, (1970) at 239-240. See also Nelson v Nelson (1995) 184 CLR 538 at 552-553. 275 Pollock, Essays in Jurisprudence and Ethics, (1882) at 85. See also Gwynne v Burnell (1840) 6 Bing (NC) 453 at 561 [133 ER 175 at 217]. 276 Sedgwick and Pomeroy, A Treatise on the Rules which Govern the Interpretation and Construction of Statutory and Constitutional Law, 2nd ed (1874) at 251, citing Monson v Chester 22 Pick 385 at 387 (1839). 277 Bradlaugh v Clarke (1883) 8 App Cas 354 at 363. Edelman expressed about the breadth of doctrines that had developed, contrary to the terms of the Statute of Frauds278, through the use of the equity of the statute. The development of constraints upon part performance confined the doctrine's operation and thus reduced conflict with the terms of the Statute. Hence, as Maitland recognised, there needed to be "cogent evidence in the situation of the parties before you can receive oral evidence of the agreement"279. In Maddison v Alderson, Lord Blackburn acknowledged that the doctrine of part performance was "an established anomaly" but, refusing to relax existing constraints upon the doctrine, held that this anomaly should not be extended280. Indeed, the particular constraint in issue on this appeal, namely, that the acts of part performance must be unequivocally, and in their own nature, referable to some such agreement of the general nature of that alleged, was sometimes expressed in stricter terms. For instance, in Maddison v Alderson281, Lord O'Hagan, further narrowing an approach of Sir William Grant MR282, described it as a requirement that the acts "necessarily imply the existence of the contract". Although there is no principled reason now to tighten this constraint, almost three centuries after it was first introduced283, the history of the doctrine and its questionable rationale are powerful reasons not to loosen or abandon the constraint. Conclusion Although the requirement of unequivocal referability has sometimes been expressed by different verbal formulations284, the constraint that the acts of part performance must be unequivocally, and in their own nature, referable to some such agreement as that alleged has been "consistently accepted as a correct 278 Chater v Beckett (1797) 7 TR 201 at 204 [101 ER 931 at 933]; Hindson v Kersey (1765) in Burn, The Ecclesiastical Law, 9th ed (1842), vol 4, 116 at 118. See also Roberts, A Treatise on the Statute of Frauds, (1807) at xviii-xix. 279 Maitland, Equity also the Forms of Action at Common Law, (1910) at 241. 280 (1883) 8 App Cas 467 at 489. 281 (1883) 8 App Cas 467 at 483-484. 282 Frame v Dawson (1807) 14 Ves Jun 386 at 388 [33 ER 569 at 569]. 283 See Gunter v Halsey (1739) Amb 586 at 586-587 [27 ER 381 at 381]. 284 See, eg, J C Williamson Ltd v Lukey and Mulholland (1931) 45 CLR 282 at 300. Edelman statement of the law"285. I agree with Kiefel CJ, Bell, Gageler and Keane JJ that the decision of the House of Lords in Steadman v Steadman286 is not a sound basis to alter it. The requirement that the act be unequivocally referable to some such agreement as that alleged involves loose terms. There has been much room for dispute about (i) when an act will sufficiently relate to a contract, so as to be unequivocally referable to it, and (ii) when a contract will be "some such agreement" as the agreement that is alleged. Each of these questions may ultimately depend on evaluative conclusions based upon all the circumstances surrounding the act or acts. Those conclusions should be drawn with regard to the nature and rationale of the doctrine of part performance and the need to keep the doctrine within narrow limits. Certainly, the doctrine of part performance should not be shorn of this well-established constraint of unequivocal referability. The need for the acts to be unequivocally referable to "some such agreement as that alleged" requires only that the acts be referable to an agreement "of the general nature of that alleged"287. For instance, the giving or taking of possession will generally be a sufficient act of part performance of a contract for the sale of land, even though it is an act that may be equally referable to a contract of lease. It is unnecessary to explore these issues on this appeal. As Kiefel CJ, Bell, Gageler and Keane JJ explain, the appellant's acts were consistent with transactions other than those of the general nature of a sale of the Clark Road land. The appellant conceded in oral submissions that the acts were not unequivocally referable to a contract of the general nature of a sale of that land. The appeal must be dismissed and the order made as proposed by Kiefel CJ, Bell, Gageler and Keane JJ. 285 Regent v Millett (1976) 133 CLR 679 at 683. See, eg, Gunter v Halsey (1739) Amb 586 at 586-587 [27 ER 381 at 381]; Frame v Dawson (1807) 14 Ves Jun 386 at 387 [33 ER 569 at 569]; Morphett v Jones (1818) 1 Swans 172 at 181 [36 ER 344 at 348]; Maddison v Alderson (1883) 8 App Cas 467 at 479; Thomas v The Crown (1904) 2 CLR 127 at 138; [1904] HCA 29; Maiden v Maiden (1909) 7 CLR 727 at 737-738; [1909] HCA 16; McBride v Sandland (1918) 25 CLR 69 at 78. 287 McBride v Sandland (1918) 25 CLR 69 at 78; Regent v Millett (1976) 133 CLR |
HIGH COURT OF AUSTRALIA VICTORIAN BUILDING AUTHORITY APPELLANT AND NICKOLAOS ANDRIOTIS RESPONDENT Victorian Building Authority v Andriotis [2019] HCA 22 7 August 2019 ORDER Appeal dismissed with costs. On appeal from the Federal Court of Australia Representation K L Walker QC, Solicitor-General for the State of Victoria, and C M Harris QC with S Gory for the appellant (instructed by Victorian Government Solicitor) K P Hanscombe QC with T J D Chalke for the respondent (instructed by Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Victorian Building Authority v Andriotis Statutes β Construction β Statutory powers β Mutual recognition β Where s 17(1) of Mutual Recognition Act 1992 (Cth) provides that person registered in one State for occupation entitled to be registered in equivalent occupation in second State where person lodges written notice with local registration authority of second State β Where s 20(1) of Mutual Recognition Act provides that registration in first State sufficient ground of entitlement to registration in second State β Where s 20(2) of Mutual Recognition Act provides that local registration authority of second State "may" grant registration on that ground β Where s 17(2) of Mutual Recognition Act provides that mutual recognition principle subject to exception that it does not affect operation of laws that regulate manner of carrying on occupation in second State, provided laws not based on attainment or possession of some qualification or experience relating to fitness to carry on occupation β Where respondent registered as waterproofer in first State β Where respondent refused registration in second State for non-compliance with "good character" requirement in local Act β Whether local registration authority has discretion to refuse registration β Whether "good character" requirement is law based on "qualification" relating to fitness to carry on occupation. Words and phrases β "character requirement", "disciplinary action", "discretionary power", "entitlement to registration", "fitness to carry on an occupation", "good character", "local registration authority", "may", "mutual recognition principle", "mutual scheme", "qualification or experience", "registration for an occupation", "residual discretion", "sufficient ground of entitlement to registration". recognition Acts Interpretation Act 1901 (Cth), ss 2, 13, 15AA, 33. Building Act 1993 (Vic), ss 170, 179, 180. Mutual Recognition Act 1992 (Cth), ss 3, 6, 16, 17, 19, 20, 21, 22, 23, 33, 36, 37. KIEFEL CJ, BELL AND KEANE JJ. The factual background and statutory provisions relevant to this appeal are set out in the reasons of Nettle and Gordon JJ. It is not necessary to repeat them in full. This appeal concerns the operation of the Mutual Recognition Act 1992 (Cth) ("the MRA"). The MRA was enacted pursuant to s 51(xxxvii) of the Commonwealth Constitution, which provides the Commonwealth legislature "to make laws for the peace, order, and good government of the Commonwealth with respect to β¦ matters referred to the Parliament of the Commonwealth by the Parliament or Parliaments of any State or States". The relevant referrals by the States and the requests by the legislatures of the Territories followed upon an intergovernmental agreement between the Commonwealth, the States and the Territories1 concerning mutual recognition. the power of for The principal purpose of the MRA is to promote the goal of freedom of movement of goods and service providers in a national market in Australia2. That goal is sought to be achieved by providing for the recognition within each State and Territory of the Commonwealth of regulatory standards adopted elsewhere in Australia regarding goods and occupations, as the MRA's long title suggests. Part 2 of the MRA deals with goods produced in or imported into a State and their sale in another State3. Part 3 is concerned with the ability of a person who is registered in connection with an occupation in a State to carry on an equivalent occupation in another State4. The entitlement of a person registered in one State ("the first State") to carry on an occupation in another State ("the second State") is stated in the "mutual recognition principle" in s 17(1) of the MRA. It is to the effect that after the person notifies the local registration authority of the second State of his or her registration in the first State, the person is (a) entitled to be registered in the second State for the equivalent occupation; and (b) pending that registration, entitled to carry on the equivalent occupation in the second State. 1 Coca-Cola Amatil (Aust) Pty Ltd v Northern Territory (2013) 215 FCR 377 at 381- 382 [13] per Griffiths J. 2 MRA, s 3; see also Trans-Tasman Mutual Recognition Act 1997 (Cth). 3 MRA, s 8(2). 4 MRA, s 16(2). Bell Section 19 enables a person who is registered in the first State to lodge a written notice with the local registration authority in the second State seeking registration for the equivalent occupation5. The notice is required to contain certain statements, including that the person is not the subject of disciplinary proceedings or preliminary investigations or action which might lead to such proceedings, that the person's registration in any State is not cancelled or suspended, and that the person is not otherwise prohibited from carrying on the occupation in any State, and a statement specifying any special conditions to which the person is subject in carrying on such occupation in any State6. Registration must be granted within one month after the notice is lodged and takes effect from the date of the notice7. However, the local registration authority has power, within one month after the notice is lodged, to postpone or refuse the grant of registration8. If a grant is postponed, the authority may later refuse registration9. The circumstances in which a grant may be postponed or refused are set out in ss 22(1) and 23(1). The circumstances in which a grant of registration may be refused under s 23(1) are that: any of the statements or information in the notice as required by s 19 are materially false or misleading; any document or information required by s 19(3) has not been provided or is materially false or misleading; or the authority decides that the occupation in which registration is sought has no equivalent and equivalence cannot be achieved by the imposition of conditions. Section 20(1) provides that a person who lodges a notice under s 19 is entitled to be registered in the equivalent occupation in the second State "as if the law of the second State that deals with registration expressly provided that registration in the first State is a sufficient ground of entitlement to registration". Section 20(2) then provides that the local registration authority "may grant registration on that ground and may grant renewals of such registration". The respondent, Mr Andriotis, notified the Victorian Building Practitioners Board ("the Board"), the then relevant local registration authority, that he was the holder of an "Endorsed Contract Licence β Waterproofing" which 5 MRA, s 19(1). 6 MRA, s 19(2)(d)-(g). 7 MRA, s 21(1), (2). 8 MRA, s 21(3). 9 MRA, s 22(2). Bell had been issued in New South Wales. He sought registration as a waterproofer in Victoria. The mutual recognition principle in s 17(1) is expressed to be subject to Pt 3. If no other provision of Pt 3 created any impediment it would seem to follow from the principle and ss 20(1) and 20(2) that Mr Andriotis would have been entitled to be registered in Victoria as a waterproofer. There is no suggestion that he did not meet the requirements for notification in s 19 or that any of the bases for refusal of registration given by s 23 were present. If Mr Andriotis had applied for registration as a "Domestic Builder Class W β Waterproofing" under the Building Act 1993 (Vic), rather than under the MRA, he would have been required by s 170(1)(c) of the Building Act to satisfy the Board that he was a person "of good character". The Board refused to register Mr Andriotis under the MRA on that ground. The Administrative Appeals Tribunal affirmed that decision10. The Board was subsequently abolished11. Its decisions are taken to be those of the appellant, the Victorian Building Authority ("the VBA")12. On Mr Andriotis' appeal to a Full Court of the Federal Court, the VBA argued that the MRA permits the approach adopted by its predecessor in ensuring that requirements of the Building Act were met by an applicant for registration under the MRA. It submitted that the VBA retains a discretion under s 20(2), not the least because the word "may" is used in relation to the grant of registration. The other argument advanced by the VBA relied on s 17(2) of the MRA. Section 17(2) subjects the mutual recognition principle to an exception. The exception is "that it does not affect the operation of laws that regulate the manner of carrying on an occupation in the second State". The laws in question must satisfy two further conditions to come within the exception. They must apply equally to all persons "carrying on or seeking to carry on the occupation" under the law of the second State. They must not be based "on the attainment or possession of some qualification or experience relating to fitness to carry on the occupation". The VBA argued that the requirement of s 170(1)(c) of the Building Act, that a person be of good character, is not a "qualification" relating 10 Andriotis and Building Practitioners Board [2017] AATA 378. 11 Building Legislation Amendment (Consumer Protection) Act 2016 (Vic), s 17; Building Act, Sch 8, cl 3. 12 Building Act, Sch 8, cl 6. Bell to fitness to carry on an occupation so as to exclude it from the description of a law to which s 17(2) refers. The Full Court (Flick, Bromberg and Rangiah JJ) rejected both arguments on the hearing of Mr Andriotis' appeal. In their Honours' view, s 20(2) does not connote a general discretionary power, and is to be understood as permissive13 or enabling14. As to the second argument, their Honours held that there is no basis to read the word "qualification" in s 17(2) as excluding any consideration as to the integrity or moral characteristics of a person seeking registration15. The Full Court allowed the appeal, set aside the decision of the AAT and ordered that the matter be remitted to the AAT to be heard and determined according to law. We agree with Nettle and Gordon JJ that the appeal to this Court should be dismissed with costs for the reasons which follow. The exception in s 17(2) The VBA's argument, that the good character requirement of s 170(1)(c) of the Building Act is exempt from the mutual recognition principle in s 17(1) of the MRA and the entitlement to registration which it states, raises two issues. The first is whether s 170(1)(c) is a law to which s 17(2) applies, which requires that the law not be based on a "qualification" relating to fitness (s 17(2)(b)). The second concerns the operation of s 17(2). It is whether a State law to which s 17(2) refers applies to a person seeking registration notwithstanding the mutual recognition principle or whether such a law applies only after registration. The VBA requires both issues to be determined in its favour in order to succeed on the appeal. The VBA submits that s 170(1)(c) of the Building Act is a law falling within the exception to the mutual recognition principle because: (a) it is a law regulating the manner of carrying on an occupation; (b) it applies equally to all persons; and (c) it is not based on the attainment or possession of some 13 Andriotis v Victorian Building Authority (2018) 359 ALR 427 at 452 [106] per 14 Andriotis v Victorian Building Authority (2018) 359 ALR 427 at 445-446 [68] per 15 Andriotis v Victorian Building Authority (2018) 359 ALR 427 at 442-443 [51] per Flick J, 449 [91], 450 [94] per Bromberg and Rangiah JJ. Bell qualification or experience relating to fitness to carry on the occupation. It may be accepted that the provision fulfils (a) and (b). The question is whether it meets the negative condition in (c), which reflects s 17(2)(b) of the MRA. The term "qualification" is not defined in the MRA. It does appear in s 4(1), which defines "occupation" to mean an occupation, trade, profession or calling that may be carried on by registered persons, where registration is dependent on "the attainment or possession of some qualification (for example, training, education, examination, experience, character or being fit or proper)". The VBA submits that the definition of "occupation" should not be taken to control that of "qualification". The text of s 17(2)(b) suggests "qualification" has a narrower meaning than is given in s 4(1). It cannot have the same meaning as in the definition of "occupation" because the latter includes "experience" as a qualification, whereas s 17(2)(b) treats "experience" as different from a qualification in its reference to "qualification or experience". This would suggest that "qualification" is intended to refer merely to an academic or other educational or technical qualification, as was held in Re Director-General of Health (Cth); Ex parte Thomson16. The context provided by Pt 3 also indicates a narrow meaning of "qualification" in s 17(2)(b) which does not extend to character, the VBA submits. The same phrase is used in s 20(4), which provides that continuation of registration is subject to the laws of the second State, which are described in the same way as in s 17(2). Such laws must not be based on the attainment or possession of some qualification or experience relating to fitness to carry on the occupation. If "qualification or experience" is construed to extend to character requirements, it would produce the absurd and unintended consequence that a person's registration in the second State could never be revoked on the basis that the person ceased to be of good character, the VBA contends. A harmonious reading of ss 17(2) and 20(4) requires a conclusion that s 17(2)(b) does not encompass requirements as to character. The text of s 17(2)(b) does not support the VBA's submission. If only the words "qualification or experience" appeared there, there might be something to be said for the view that "qualification" is intended to refer to some technical qualification. The relevant provisions in Thomson required regard to be had to the "qualifications, experience and standing" of a medical practitioner in determining whether he or she be recognised as a specialist. But s 17(2)(b) contains a further description. It refers to a qualification or experience "relating 16 (1976) 51 ALJR 180; 11 ALR 471. Bell to fitness to carry on the occupation". Not only do these words suggest a broader meaning than that a qualification be of an educational or technical kind, they clearly encompass the subject matter of s 170(1)(c) of the Building Act, namely whether a person is of good character and therefore fit to carry on the occupation. The evident purpose of the enquiry under the Building Act is to determine whether the person has that inherent characteristic or quality. So understood, the meaning of "qualification" in s 17(2)(b) is consistent with that appearing in the definition of "occupation". Indeed, were the text of s 17(2)(b) itself not so clear, one would wonder why the definition of "occupation" in s 4(1) would not be useful as an aid to construction. It may not itself provide a definition of "qualification" but it gives examples of what may be taken to fall within that description and "character or being fit or proper" are included amongst them in addition to "education" and "experience". This is understandable since these characteristics would generally be understood to be requirements of most occupations, unless the context suggested otherwise such as in Thomson. The examples given in s 4(1) should be taken to indicate that the term "qualification" when it is used in the MRA is to have a broader meaning than as relates to education. A construction of s 17(2)(b) which excludes a law which allows a local registration body to determine the question of the fitness of a person to carry on an occupation as a prerequisite to registration is consistent with the scheme of the MRA and the mutual recognition principle on which it is founded. The mutual recognition principle accepts that registration for an occupation in the first State is sufficient for registration in the second State, without any further requirements of the laws of the second State being fulfilled. Were it otherwise, the primary purpose of the MRA would be substantially undermined. This understanding of the operation of the mutual recognition principle is confirmed by s 20(1), which speaks of an entitlement to be registered in the second State on notification of registration in the first State, and of the law of the second State being taken to accept that as a sufficient ground for registration. A State Act such as the Building Act is, by s 20(1), to be understood to so provide. The fact that, when granted, registration takes effect as from the date of notice17 further confirms, if that were necessary, that notification of registration is the basis for the entitlement. It does not suggest as necessary any further 17 MRA, s 21(2). Bell consideration of matters which it may be expected the first State has addressed when granting registration, such as fitness or suitability for the occupation. This is borne out by what was said in the Second Reading Speech of the Bill that became the MRA18: "A person will only need to give notice ... to be entitled immediately to commence practice in an equivalent occupation in that second State or Territory. Local registration authorities will be required to accept the judgment of their interstate counterparts of a person's educational qualifications, experience, character or fitness to practise." This is not to say that the local registration authority of the second State is unable to make any enquiries. By s 19(2)(h) a person is required to consent to that taking place and to exchanges of information between the authorities of any States. But these enquiries can only be directed to the exercise of the powers given by the MRA to the local registration authority of the second State other than that to grant registration. They are the powers to postpone or refuse registration19 or to condition it20. The powers to postpone or refuse registration are limited to the circumstances outlined above. The VBA submits that a person registered in the first State cannot be said to have an absolute entitlement to registration. This may be seen by the operation of s 17(2) with respect to a State law. The VBA gives as an example s 169(2)(e)(i) of the Building Act, which requires an applicant for registration under that Act to prove that they have insurance cover. Section 17(2) would permit that requirement to be imposed. The answer to the submission lies in the power given by the MRA to the local registration authority of the second State to condition registration under s 20(5). It may do so as long as the conditions are not more onerous than would be imposed in similar circumstances. The use of that power to condition would be consistent with the scheme of the MRA; satisfaction of a requirement of a State Act as a precondition to a grant would not. The VBA also argues that a construction of the MRA contrary to that for which it contends would have the unintended consequence that a person's 18 Australia, House of Representatives, Parliamentary Debates (Hansard), 3 November 1992 at 2433. 19 MRA, ss 22, 23. 20 MRA, s 20(5). Bell registration in the second State could never be revoked under s 20(4) of the MRA on the basis of the person ceasing to be of good character. The submission cannot be accepted if it implies that the second State is powerless to discipline persons having regard to their conduct in the course of their occupation. It is unlikely that legislation regulating occupations will contain an express requirement of the maintenance of good character or permit an authority to examine or review a person to ascertain its continued presence. The Building Act for example contains no such provision. It does contain provisions by which persons coming within its purview may be subjected to disciplinary proceedings if their conduct breaches the standards imposed by the Act21. Section 20(4) of the MRA expressly subjects the continuance of a person's registration to the laws of the second State and therefore to a law of this kind. A law which sets standards to be met by persons carrying on an occupation in the second State following registration under the MRA and which enables that person to be disciplined if a standard of conduct is breached is not a law which falls within the exception in s 20(4)(b). It is not a law which involves an assessment of a person's good character as such, a matter which is left to the first State to undertake if necessary prior to registration. The MRA makes notice the basis for registration as a person entitled to carry on an occupation. It does not leave the person to do so unregulated by the second State. Section 33(1) of the MRA contemplates the possibility that the person's registration may be cancelled or suspended by a local registration authority in either State. It provides that if a person's registration is cancelled or suspended on disciplinary grounds, the person's registration in the equivalent occupation in any other State is affected in the same way. It is strictly not necessary to consider the VBA's argument that a law to which s 17(2) refers can be applied by the local registration authority at the point of grant or refusal of registration. Section 170(1)(c) of the Building Act is not such a law because it is a law which is based on the possession of a qualification relating to fitness to carry on an occupation. However, the VBA submits that the joint judgment in the Full Court held, in effect, that s 17(2) does not qualify s 17(1) and the power to grant registration in s 20(2) but instead operates only upon laws regulating the "post-registration carrying on of an occupation"22. Something more should be said about that. 21 Building Act, s 179. 22 Andriotis v Victorian Building Authority (2018) 359 ALR 427 at 454 [113] per Bell The VBA submits that the language of s 17(2)(a) indicates that s 17(2) is intended to have operation in the field of registration and not simply the subsequent carrying on of the occupation. Section 17(2)(a) requires a law to apply equally to "all persons carrying on or seeking to carry on the occupation". The VBA points to the words "seeking to carry on" as referable to an applicant for registration under the MRA. The difficulty with the submission is that it does not correctly identify the persons to whom s 17(2)(a) refers. They are not persons who are applicants for registration under the MRA, but rather those who are either carrying on the occupation under the law of the second State (which is to say persons who are registered under that State law), or seeking registration under the law of the second State. Section 17(2)(a) requires the State law which is to be excepted from the mutual recognition principle to be non-discriminatory in its application. As to the broader question, it is no doubt generally correct to observe that State laws to which s 17(2) refers will operate to regulate the occupation carried on by the person after registration, as s 20(4) confirms. This is subject to the qualification that State laws operating by force of s 17(2) may also operate pending registration. It is to be recalled that the mutual recognition principle entitles a person who notifies the local registration authority of his or her registration in the first State to carry on the equivalent occupation in the second State pending registration. Section 17(2) permits laws regulating the manner of carrying on an occupation in the second State to operate in that short period. A discretion? The VBA's argument that the MRA admits of some residual discretion in a local registration authority to refuse registration on a ground other than as provided by the MRA is not one which is consistent with the scheme of the MRA. It may be dealt with shortly. The discretion for which the VBA contends is said not to be a general discretion, but rather a narrow one confined by the context of the MRA. The VBA does not explain how the limits to such a discretion might be identified, save by its reference to the potential harmful consequences of an interpretation that compels registration of a person unfit to carry on an occupation. It does not explain how the discretion can exist conformably with the legislative scheme and its express provisions. It is difficult to accept that any kind of discretion to refuse a grant of registration could exist in a scheme which provides a rule by which an entitlement to a grant of registration arises on fulfilment of the notification provisions and where power is given to a local registration authority to refuse Bell registration on limited grounds relating to the provision of false and misleading information in the notice or the lack of an equivalent occupation. It is especially difficult when it is expressly provided that the law of the second State is to be taken to accept registration in the first State as a sufficient ground of entitlement to registration under the MRA. The VBA, however, submits that the language of s 20(2) falls short of compelling registration. Its language is indirect. If it had the effect that a person must be registered subject only to the power in s 23 to refuse a grant there would be no work for s 20(2) to do. There is little ambiguity about what s 20(1) does. Consistently with the mutual recognition principle, it creates an entitlement for a person to be registered in an equivalent occupation where that person lodges a notice under s 19. Registration is granted on the "ground" referred to above, namely registration in the first State. An Act such as the Building Act is to be understood to say that that is a sufficient ground of entitlement to registration. Central to the VBA's argument is that the use of the word "may" necessarily imports some discretion. It relies upon s 33(2A) of the Acts Interpretation Act 1901 (Cth), which provides that where it is provided "that a person, court or body may do a particular act or thing, and the word may is used, the act or thing may be done at the discretion of the person, court or body". The VBA presses this as an absolute rule of construction. But of course s 33(2A) is subject to any contrary intention appearing in the process of construction23. Most commonly such an intention will arise by reference to the context in which the word is used. A particular context may make "may" a simple empowering word and indicate the circumstances in which the power is to be exercised24. That is the case here. Section 20(2) gives a local registration authority power to grant registration under the MRA on one "ground", the ground referred to in s 20(1), namely registration in the first State. No other ground is provided. There is no room for the operation of a discretion when a person notifies the authority of that registration. That is the scheme of the MRA. The word "may" must be understood in context to be the grant of a power to register on that one ground and no more. 23 Acts Interpretation Act 1901 (Cth), s 2(2). 24 Finance Facilities Pty Ltd v Federal Commissioner of Taxation (1971) 127 CLR 106 at 134; [1971] HCA 12. Bell The VBA's reliance upon the decision in Re Petroulias25 and the cases which follow it26, as accepting that the MRA admits of some discretion in a local registration authority to refuse a grant to which a person is otherwise entitled under the MRA, is misplaced. In Re Petroulias the applicant for admission as a legal practitioner did not make the declaration required by s 19(2)(d) of the MRA, that he was not the subject of any investigation in another State which might lead to disciplinary proceedings. He could not do so because he was in fact the subject of such an investigation, but he made no mention of it. De Jersey CJ held that because the applicant did not accurately verify the statutory declaration his notice did not meet the requirements of s 19. The entitlement to registration did not therefore crystallise. Davies JA preferred to view the applicant's silence as materially false and misleading for the purposes of the postponement or refusal powers (ss 22 and 23 of the MRA). In Re Petroulias the Court of Appeal of Queensland also expressed the view that the court retained its inherent jurisdiction respecting the admission of lawyers regardless of the MRA. This is a view that has been adopted by other courts. The correctness of it does not arise for consideration on this appeal. A view about the co-existence of a superior court's inherent jurisdiction and the MRA does not avail the VBA's argument for a more general discretion. 25 [2005] 1 Qd R 643. 26 Re Tkacz; Ex parte Tkacz (2006) 206 FLR 171; Scott v Law Society of Tasmania [2009] TASSC 12. The ultimate question in this appeal, from a judgment of the Full Court of the Federal Court27 setting aside on appeal a decision of the Administrative Appeals Tribunal28 which had affirmed on review a decision of the Victorian Building Practitioners Board ("the VBPB"), is whether it is open to a local registration authority under the Mutual Recognition Act 1992 (Cth) ("the MRA") to refuse to register for an equivalent occupation in its own State a person who is registered for an occupation in another State on the basis that the local registration authority has reached the conclusion that the person is "not of good character". My opinion is that the Full Court of the Federal Court was correct to answer that question in the negative, and that the Full Court was correct, in arriving at that answer, to reject arguments of the Victorian Building Authority (the successor to the VBPB) that a local registration authority can refuse registration on the ground that a person is not of good character either as an incident of the exception to the mutual recognition principle expressed in s 17(2) of the MRA or in the exercise of the discretion conferred by s 20(2). My reasons, which follow, are explained in stages. First, I examine the origin and purpose of the MRA. Next, I outline its structure. Then I explain specifically and in turn how and why I make particular constructional choices presented by the language of each of ss 17(2) and 20(2) of the MRA. The reasons for judgment of Nettle and Gordon JJ, with the substance of which I agree, relieve me of any need to set out the facts or procedural history. Origin and purpose of the MRA The Prime Minister, the Premier of each State and the Chief Minister of each self-governing Territory in 1992 established the Council of Australian Governments ("COAG") as an ongoing body for consultation between them29. One of the first acts of COAG was to enter into an intergovernmental agreement for the establishment of a national mutual recognition scheme30. The scheme had earlier been outlined in a discussion paper on mutual recognition circulated under 27 Andriotis v Victorian Building Authority (2018) 359 ALR 427. 28 Andriotis and Building Practitioners Board [2017] AATA 378. 29 Communique, Heads of Government Meeting, Canberra, 11 May 1992. 30 Agreement Relating to Mutual Recognition Between the Commonwealth of Australia, the State of New South Wales, the State of Victoria, the State of Queensland, the State of Western Australia, the State of South Australia, the State of Tasmania, the Australian Capital Territory and the Northern Territory of Australia, 11 May 1992. the authority of a Special Premiers' Conference31. Commencing in 1993, the MRA implemented the national mutual recognition scheme, and was followed by complementary State and Territory legislation32. Formulated soon after landmark decisions of this Court which reinterpreted the imperatives of s 92 of the Constitution that "trade, commerce, and intercourse among the States ... shall be absolutely free"33 and of s 117 of the Constitution that a resident in one State "shall not be subject in any other State to any disability or discrimination which would not be equally applicable" if that resident were resident in the other State34, the national mutual recognition scheme was an exercise in "co-operative federalism"35. The scheme was formulated to achieve structural microeconomic reform at a national level with the support of the States and the self-governing Territories through the exercise of the legislative powers conferred on the Commonwealth Parliament by ss 51(xxxvii) and 122 of the Constitution. The Minister for Science and Technology and Minister Assisting the Prime Minister described it on the second reading of the Bill for the MRA in the House of Representatives as involving "a recognition by heads of government that the time [had] come for Australia to create a truly national market β a goal which the founding fathers of this nation enshrined in the Constitution but which the parochial politics of successive State and Territory governments [had] frustrated for almost 100 years"36. The national mutual recognition scheme has since been substantially replicated in the trans-Tasman mutual recognition scheme to which effect is 31 Special Premiers' Conference, The Mutual Recognition of Standards and Regulations in Australia: A Discussion Paper (1991) at 5-9 [6.2.1]-[6.3.6]. 32 Mutual Recognition (Australian Capital Territory) Act 1992 (ACT); Mutual Recognition (New South Wales) Act 1992 (NSW); Mutual Recognition (Northern Territory) Act 1992 (NT); Mutual Recognition (Queensland) Act 1992 (Qld); Mutual Recognition (South Australia) Act 1993 (SA); Mutual Recognition (Tasmania) Act 1993 (Tas); Mutual Recognition (Victoria) Act 1993 (Vic); Mutual Recognition (Victoria) Act 1998 (Vic); Mutual Recognition (Western Australia) Act 1995 (WA); Mutual Recognition (Western Australia) Act 2001 (WA); Mutual Recognition (Western Australia) Act 2010 (WA). 33 See Cole v Whitfield (1988) 165 CLR 360; [1988] HCA 18. 34 See Street v Queensland Bar Association (1989) 168 CLR 461; [1989] HCA 53. 35 cf Re Wakim; Ex parte McNally (1999) 198 CLR 511 at 556 [54]; [1999] HCA 27. 36 Australia, House of Representatives, Parliamentary Debates (Hansard), 3 November 1992 at 2432. given in Australia by the Trans-Tasman Mutual Recognition Act 1997 (Cth) ("the TMRA") and complementary State and Territory legislation37. Effect is given to the scheme in New Zealand by the Trans-Tasman Mutual Recognition Act 1997 Reflecting the ambition of those who framed the national mutual recognition scheme finally to create a truly national market, the MRA explains that its principal purpose "is to enact legislation authorised by the Parliaments of States under paragraph (xxxvii) of section 51 of the Commonwealth Constitution, and requested by the legislatures of the Australian Capital Territory and the Northern Territory, for the purpose of promoting the goal of freedom of movement of goods and service providers in a national market in Australia"38. To the extent that the provisions of the MRA give rise to constructional choice, the interpretation that would allow the MRA best to achieve that purpose must be preferred to each other interpretation39. Insight into the basic design which the MRA adopts in the implementation of the national mutual recognition scheme to promote the goal of freedom of movement of goods and service providers in a national market in Australia is provided by the long title to the MRA40. The long title describes it as an "Act to provide for the recognition within each State and Territory of the Commonwealth of regulatory standards adopted elsewhere in Australia regarding goods and occupations". The description provides the greatest illumination when it is read together with the MRA's definitions of "goods" and of "occupation": "goods" encompass "goods of any kind"41, and "occupation" encompasses "an occupation, trade, profession or calling of any kind that may be carried on only by registered persons, where registration is wholly or partly dependent on the attainment or 37 Trans-Tasman Mutual Recognition (New South Wales) Act 1996 (NSW); Trans- Tasman Mutual Recognition Act 1997 (ACT); Trans-Tasman Mutual Recognition Act 1998 (NT); Trans-Tasman Mutual Recognition (Victoria) Act 1998 (Vic); Trans-Tasman Mutual Recognition (South Australia) Act 1999 (SA); Trans- Tasman Mutual Recognition (Queensland) Act 2003 (Qld); Trans-Tasman Mutual Recognition (Tasmania) Act 2003 (Tas); Trans-Tasman Mutual Recognition (Western Australia) Act 2007 (WA). 38 Section 3 of the MRA. 39 Section 15AA of the Acts Interpretation Act 1901 (Cth). 40 See s 13(2)(a) of the Acts Interpretation Act 1901 (Cth). 41 Section 4(1) of the MRA (definition of "goods"). possession of some qualification (for example, training, education, examination, experience, character or being fit or proper)"42. Expressed in the MRA's long title when read together with those definitions is the underlying premise of the national mutual recognition scheme: that regulatory standards adopted in any one State or Territory are generally satisfactory to be adopted in any other State or Territory. That is so for regulatory standards applicable to service providers as for regulatory standards applicable to goods. On that premise, as the Minister explained in his second reading speech43: "The legislation is based on two simple principles. The first is that goods which can be sold lawfully in one State or Territory may be sold freely in any other State or Territory even though the goods may not comply with all the details of regulatory standards in the second State or Territory: if goods are acceptable for sale in one State or Territory, then there is no reason why they should not be sold anywhere in Australia. The second principle is that, if a person is registered to carry out an occupation in one State or Territory, then he or she should be able to be registered and carry on the equivalent occupation in any other State or Territory: If someone is assessed to be good enough to practise a profession or occupation in one State or Territory, then they should be able to do so anywhere in Australia. A person will only need to give notice, including evidence of his home registration, to the relevant registration authority in another jurisdiction to be entitled immediately to commence practice in an equivalent occupation in that second State or Territory. Local registration authorities will be required to accept the judgment of their interstate counterparts of a person's educational qualifications, experience, character or fitness to practise." The MRA is structured to give effect to each of those two principles in ways that bear out that explanation. 42 Section 4(1) of the MRA (definition of "occupation"). 43 Australia, House of Representatives, Parliamentary Debates (Hansard), 3 November 1992 at 2433. Structure of the MRA The MRA is divided into four Parts. Part 1 is preliminary. As well as containing a definition of "State", which includes the Australian Capital Territory and the Northern Territory44, and the definitions of "goods" and of "occupation" already noted, it relevantly contains definitions of "registration" and of "local registration authority" of a State for an occupation. The former is defined to include any form of authorisation required of a person by or under legislation for carrying on an occupation45. The latter is defined to mean "the person or authority in the State having the function conferred by legislation of registering persons in connection with their carrying on that occupation in the State"46. Part 4 is general, relevantly containing in s 44(1) provision to the effect that "[t]he mutual recognition principle and the provisions of this Act may be taken into consideration in proceedings of any kind and for any purpose". Part 2 is headed "Goods". The Part commences with the explanation in s 8 that "[t]he mutual recognition principle as applying to goods is as set out in this Part" and with the further explanation that it "deals with goods produced in or imported into a State [called 'the first State'] and their sale in another State [called 'the second State']". Section 9 then states: "The mutual recognition principle is that, subject to this Part, goods produced in or imported into the first State, that may lawfully be sold in that State either generally or in particular circumstances, may, because of this Act, be sold in the second State either generally or in particular circumstances (as the case may be), without the necessity for compliance with further requirements as described in section 10." The remaining provisions of Pt 2, including s 10 (which, as foreshadowed in s 9, describes "further requirements" that do not need to be complied with if goods are to be sold in the second State), are devoted to the explication and qualification of the mutual recognition principle as applying to goods stated in Part 3 is headed "Occupations". The Part is divided into five Divisions. Division 1, headed "Preliminary", mirrors Pt 2 in commencing in s 16 with the explanation that "[t]he mutual recognition principle as applying to occupations is as set out in this Part" and the further explanation that the Part "deals with the ability of a person who is registered in connection with an occupation in a State 44 Section 4(1) of the MRA (definition of "State"). 45 Section 4(1) of the MRA (definition of "registration"). 46 Section 4(1) of the MRA (definition of "local registration authority"). [called 'the first State'] to carry on an equivalent occupation in another State [called 'the second State']". Within Div 1, s 17 then states: "(1) The mutual recognition principle is that, subject to this Part, a person who is registered in the first State for an occupation is, by this Act, entitled after notifying the local registration authority of the second State for the equivalent occupation: to be registered in the second State for the equivalent occupation; and pending such registration, to carry on the equivalent occupation in the second State. (2) However, the mutual recognition principle is subject to the exception that it does not affect the operation of laws that regulate the manner of carrying on an occupation in the second State, so long as those laws: apply equally to all persons carrying on or seeking to carry on the occupation under the law of the second State; and are not based on the attainment or possession of some qualification or experience relating to fitness to carry on the occupation." Division 2 of Pt 3 is headed "Entitlement to registration". It commences with s 19, which provides that "[a] person who is registered in the first State for an occupation may lodge a written notice with the local registration authority of the second State for the equivalent occupation, seeking registration for the equivalent occupation in accordance with the mutual recognition principle"47. The section goes on to specify the contents of the notice48, to require the notice to be accompanied by a certified document evidencing the person's existing registration49, and to require the statements and information in the notice to be verified by statutory declaration50. To be included in the notice, amongst other things, are statements that the person "is registered for the occupation in the first 47 Section 19(1) of the MRA. 48 Section 19(2) of the MRA. 49 Section 19(3)-(4) of the MRA. 50 Section 19(5) of the MRA. State"51, "is not the subject of disciplinary proceedings in any State" in relation to the occupation52, and "give[s] consent to the making of inquiries of, and the exchange of information with, the authorities of any State ... regarding matters relevant to the notice"53. Pivotal to the operation of Div 2, and with s 17 central to the issues in the appeal, is s 20. So far as it has the potential to bear on the issues in the appeal, s 20 provides: "(1) A person who lodges a notice under section 19 with a local registration authority of the second State is entitled to be registered in the equivalent occupation, as if the law of the second State that deals with registration expressly provided that registration in the first State is a sufficient ground of entitlement to registration. The local registration authority may grant registration on that ground and may grant renewals of such registration. Continuance of registration is otherwise subject to the laws of the second State, to the extent to which those laws: apply equally to all persons carrying on or seeking to carry on the occupation under the law of the second State; and are not based on the attainment or possession of some qualification or experience relating to fitness to carry on the occupation. This section has effect subject to this Part." Following on from s 20 within Div 2 are then ss 21, 22 and 23. Understanding their combined operation is critical to understanding the scope and operation of the power conferred on a local registration authority by s 20(2) to grant registration on the ground identified in s 20(1) to a person who has lodged a notice under s 19. 51 Section 19(2)(a) of the MRA. 52 Section 19(2)(d) of the MRA. 53 Section 19(2)(h) of the MRA. Sections 21 and 22 are addressed essentially to the timing of the exercise of the power to grant registration. Section 21 provides that registration "must be granted within one month after the notice is lodged with the local registration authority under section 19"54, subject to the qualification that "the local registration authority may, subject to this Part and within one month after the notice was lodged, postpone or refuse the grant of registration"55. Section 22 sets out circumstances in which a local registration authority "may postpone the grant of registration". Those circumstances are expressed to include that any statement or information in the notice required by s 19 or any document required to accompany it is materially false or misleading56. However, "[t]he local registration authority may not postpone the grant of registration for longer than a period of 6 months, and the person is entitled to registration immediately at the end of that period, unless registration was refused at or before the end of that period"57. Section 23 is addressed to circumstances in which a local registration authority "may refuse the grant of registration". The circumstances in which refusal is permitted under s 23 overlap with those in which postponement is permitted under s 22 in that they are expressed to include that any statement or information in the notice required by s 19 or any document required to accompany it is materially false or misleading58. Division 3 of Pt 3 is headed "Interim arrangements". Within Div 3, s 25 provides that, pending grant or refusal of registration under Div 2, a person who lodges a notice under s 19 is taken to be registered in the second State59. By force of s 26, that "deemed registration"60 ceases when the person is either granted or refused actual registration under Div 261. 54 Section 21(1) of the MRA. 55 Section 21(3) of the MRA. 56 Section 22(1)(a) and (b) of the MRA. 57 Section 22(3) of the MRA. 58 Section 23(1)(a) and (b) of the MRA. 59 Section 25(1) of the MRA. 60 Section 25(2) of the MRA. 61 Section 26(2) and (3) of the MRA. Division 4 of Pt 3 is concerned only with determination of equivalence of occupations for the purposes of the Part and can for present purposes be ignored. Division 5 contains provisions of a general nature only two of which need be noted. One is s 34(1), which provides for an application for review of a decision of a local registration authority to be made to the Administrative Appeals Tribunal. The other is s 33(1), which relevantly provides that cancellation or suspension of a person's registration in one State on "disciplinary grounds" affects the person's registration in the equivalent occupation in another State in the same way. Section 17(2) of the MRA Legislative expression of a principle, as distinct from legislative statement of a command, legislative prescription of a right or an obligation, or legislative statement of a purpose or an object, is a form of drafting not often encountered in Australian legislation. In some contexts, a principle can be a guide to statutory interpretation or a consideration to be taken into account in curial or administrative decision-making. In other contexts, a principle can be a statutory rule that forms a fundamental tenet of the statutory scheme of which it forms part. Plainly enough, the mutual recognition principle as applying to goods set out in s 9 of the MRA is a statutory rule. And plainly enough, if the mutual recognition principle as applying to goods set out in s 9 of the MRA is a statutory rule, then the mutual recognition principle as applying to occupations set out in s 17 of the MRA is also a statutory rule. Section 44 makes clear that the mutual recognition principle as applying to goods and the mutual recognition principle as applying to occupations are iterations of the same principle. Expression of the mutual recognition principle in the MRA and its complementary State and Territory legislation, as it applies to goods and as it applies to occupations, is the expression of a statutory rule that forms a fundamental tenet of the statutory scheme of which it forms part. The terminology is explicable by reference to the quasi-constitutional status of the mutual recognition scheme which that legislation implements. The terminology serves to highlight the breadth of application and the structural importance of the legal entitlement which each iteration of the mutual recognition principle operates legislatively to confer. Harmoniously with the expression in s 9 of the MRA of the mutual recognition principle as applying to goods, the expression in s 17 of the MRA of the mutual recognition principle as applying to occupations must therefore be read as having an immediate legal operation. The extent of that immediate legal operation, however, can be discerned only by interpreting each of those expressions of the mutual recognition principle to confer an entitlement the content of which accords with the detail of the provisions of the Part of the MRA in which the particular expression of the mutual recognition principle is located. The entitlement of a person who is registered for an occupation in one State to obtain registration for an equivalent occupation in another State β which s 17(1)(a) operates to confer β is, accordingly, an entitlement the content of which must be understood to conform to the entitlement that is worked through in the detailed provisions of Div 2 of Pt 3. The entitlement of the person to carry on the equivalent occupation in the second State pending registration β which s 17(1)(b) operates to confer β is, correspondingly, an entitlement the content of which must be understood to conform to the entitlement that is worked through in the detailed provisions of Div 3 of the same Part. That which s 17(2) refers to as an "exception" to the mutual recognition principle as applying to occupations must be understood to operate congruently. Its operation is not as a detraction from the content of the entitlements to registration conferred by s 17(1)(a) and to carry on the equivalent occupation conferred by s 17(1)(b). Its operation is as a clarification of the extent of the entitlements conferred by s 17(1)(a) and (b) that again conform to the detail of Divs 2 and 3 of Pt 3 and that, in particular, conform to the provision for the continuance of registration in s 20(4). The laws that regulate the manner of carrying on an occupation in the second State, which s 17(2) operates to ensure are not affected by the mutual recognition principle as applying to occupations, must be understood to be laws that regulate the carrying on of the occupation by a person who is registered in the second State in fulfilment of the entitlement conferred by s 17(1)(a) or (b) and to include laws that can affect the continuance of that registration. Registration for an equivalent occupation in a second State comes about under s 20(2) of the MRA through the outworking of the fiction in s 20(1) that the law of the second State that deals with registration expressly provides that registration in the first State is a sufficient ground of entitlement to registration. Section 17(2) simply does not speak to that entitlement to registration. What s 17(2) does in combination with s 20(4) is to move forward from the point of registration under s 20(2) (on the fiction that registration has occurred in the second State as if the law of the second State that dealt with registration expressly provided that registration in the first State was a sufficient ground of entitlement to registration) to make clear that a law of the second State that regulates the manner of carrying on an occupation in the second State operates to affect the continuance of that registration. The provisions combine in that way to facilitate cancellation or suspension by the local registration authority of the second State of registration that has occurred under s 20(2) in the exercise by the local registration authority of a power conferred by a law of the second State to cancel or suspend registration on what s 33(1) of the MRA refers to as "disciplinary grounds". If that occurs, then registration in the equivalent occupation in another State is automatically and by force of s 33(1) to be affected in the same way. Sections 17(2) and 20(4) also combine to make clear, however, that no law of the second State can affect the continuance of the registration that has occurred under s 20(2) of the MRA unless that law meets the two prerequisites spelt out in identical terms in ss 17(2)(a) and 20(4)(a) and in ss 17(2)(b) and 20(4)(b) respectively. By operation of ss 17(2)(a) and 20(4)(a), the law of the second State must have equal application to all persons carrying on or seeking to carry on the equivalent occupation under the law of the second State: the law cannot discriminate against an out-of-State registrant. By the added operation of ss 17(2)(b) and 20(4)(b), in order to affect the continuance of that registration in the second State, the law of the second State must not be "based on the attainment or possession of some qualification or experience relating to fitness to carry on the occupation". That additional requirement cannot be interpreted otherwise than in light of that part of the definition of "occupation" which links carrying on an occupation to a requirement for registration that is "wholly or partly dependent on the attainment or possession of some qualification" of which the definition specifically gives "training, education, examination, experience, character or being fit or proper" as examples. The minor textual variance that "experience" is separated from "qualification" in ss 17(2)(b) and 20(4)(b) and that "experience" is given as an example of "qualification" in the definition of "occupation" is of no moment. Sections 17(2)(b) and 20(4)(b) as so interpreted combine to ensure that a law of the second State which regulates the manner of carrying on an occupation in the second State has no application to the continuance of a person's registration under s 20(2) of the MRA in the second State if, and to the extent that, the law requires or allows discontinuance of registration in the second State to be based on the registrant possessing or not possessing some experience or qualification of which training and education, as well as character and being fit or proper, are each examples. The result is that questions as to the continuing qualification of a person to engage in an occupation for which the person has been registered in the second State β including questions as to the person's continuing good character or continuing fitness or propriety to engage in the occupation β are questions which the local registration authority of the second State has no authority to decide. Questions of that nature must be left by the local registration authority of the second State to be answered by the local registration authority of the first State. The result accords with the generality of the already quoted explanation in the Minister's second reading speech that "[l]ocal registration authorities will be required to accept the judgment of their interstate counterparts of a person's educational qualifications, experience, character or fitness to practise". The result also accords with the detail of the proposed mutual recognition scheme that was foreshadowed in the discussion paper on mutual recognition which preceded COAG entering into the intergovernmental agreement for the establishment of the national mutual recognition scheme. The discussion paper explained the elements of the scheme to include that practitioners registered under it would be "subject to the conditions for delivery of services in the jurisdiction in which the service is provided" and added62: "Disciplinary action would be taken by the registering authority in the jurisdiction in which the breach occurred and would automatically apply to all other jurisdictions. Disciplinary action could only be taken in reference to matters of actual service delivery, not in reference to the right to practise or the need for registration in the place where the breach occurs." Placing the express purpose of the MRA, relevantly of promoting the goal of freedom of movement of service providers in a national market in Australia, in an historical perspective serves to explain why the MRA would have been designed to ensure that a law of the second State providing for discontinuance of registration on the basis of a registrant's character or fitness or propriety has no application to continuance of registration for an occupation in the second State. Criteria making registration for an occupation dependent on character or fitness or propriety had existed in State legislation long before the establishment of a national mutual recognition scheme and had long been recognised to give a registration authority in a State "the widest scope for judgment and indeed for rejection"63. By reason of that wide and indefinite operation, criteria of that nature in State legislation purporting to regulate the manner of carrying on a trade within a State had been found to erect a practical barrier to entry by out-of- State traders and on that basis held to transgress the bounds of reasonable The practical operation of the construction just expounded can be illustrated by reference to provisions of the Building Act 1993 (Vic) in the form in which that Act has been argued by the Victorian Building Authority in its 62 Special Premiers' Conference, The Mutual Recognition of Standards and Regulations in Australia: A Discussion Paper (1991), Technical Attachment at 11- 63 Hughes and Vale Pty Ltd v New South Wales [No 2] (1955) 93 CLR 127 at 156; [1955] HCA 28. 64 eg, Hughes and Vale Pty Ltd v New South Wales [No 2] (1955) 93 CLR 127 at 164-165, 187, 201, 203-204; Boyd v Carah Coaches Pty Ltd (1979) 145 CLR 78 at 84-86; [1979] HCA 56. appeal to this Court to have had application to the decision of the Administrative Appeals Tribunal appealed to the Full Court. The Building Act contained in s 170(1) a list of requirements to be met in respect of an applicant for registration as a building practitioner under that Act. The VBPB had under s 170(1) a duty to register the applicant if satisfied that all of the requirements were met, and under s 170(2) a discretion to refuse registration if not satisfied that all of the requirements were met. One of those requirements, listed in s 170(1)(c), was that the applicant be of "good character". Because s 17(2) of the MRA is not addressed to initial registration under s 20(2), s 17(2) did not operate to make any part of s 170 of the Building Act applicable to registration as a building practitioner under the MRA. The Building Act also conferred by s 179(2) discretion on the VBPB to suspend or cancel registration as a building practitioner under that Act if the VBPB, on an inquiry into the conduct of the building practitioner, made any one or more of the findings for which provision was made in s 179(1). One of the findings which might trigger suspension or cancellation, for which provision was made in s 179(1)(a), was that the building practitioner had been "guilty of unprofessional conduct". Another of the findings which might trigger suspension or cancellation, for which provision was made in s 179(1)(da), was that the building practitioner had shown in certain information "that he or she [was] not a fit and proper person to practise as a building practitioner". Section 17(2) of the MRA operated in conjunction with s 20(4) of the MRA to make s 179 of the Building Act generally applicable to the continuance of registration of a person registered under s 20(2) of the MRA as a building practitioner in Victoria. Accordingly, s 17(2) of the MRA operated in conjunction with s 20(4) of the MRA to confer discretion on the VBPB to suspend or cancel registration of a person registered as a building practitioner under s 20(2) of the MRA if the VBPB found in terms of s 179(1)(a) that the person had been "guilty of unprofessional conduct". The effect of the prerequisite in ss 17(2)(b) and 20(4)(b) was nevertheless to deprive the VBPB of discretion to suspend or cancel registration of a person registered as a building practitioner under s 20(2) of the MRA if the VBPB found in terms of s 179(1)(da) that the person was "not a fit and proper person to practise as a building practitioner". Section 20(2) of the MRA Subject always to a contrary legislative intention65, use of the word "may" in Commonwealth legislation enacted after 198766 connotes conferral of "discretion"67. That the use of "may" in s 20(2) of the MRA connotes conferral of a discretion on a local registration authority can therefore be accepted. The "may" in s 20(2) is facultative and is not to be read as if it were "must". But to accept that the use of "may" in s 20(2) of the MRA connotes conferral of a discretion on a local registration authority says nothing of itself about when and how that discretion is to be exercised and, in particular, says nothing of itself about "whether the discretion must be exercised in a particular way or upon a particular occasion"68. Any discretion takes its incidents from its context, and there is no novelty in the proposition that a discretion to take action to give effect to an entitlement can operate in substance as a duty compellable in an appropriate case by mandamus69. The discretion conferred on a local registration authority by s 20(2) of the MRA is in its terms limited to a discretion to grant and renew registration as if the law of the second State expressly provided that registration in the first State is a sufficient ground of entitlement to registration in the second State and to grant registration on that ground to a person who, having lodged a notice under s 19, has an entitlement to registration on that ground under s 20(1). The incidents of the discretion to grant registration are confined, both as to the timing of its exercise and as to the considerations that might properly be brought to bear on its exercise, by the operation of ss 21, 22 and 23. The combined effect of those provisions is as follows. The discretion must be exercised to grant registration within the period, set by s 21, of one month from the date of lodgment of the notice or such further period of up to six months as might be set, under s 22, by the local registration authority in a decision to postpone registration. And the discretion must be so exercised to grant registration unless the local registration authority decides, at or before the end of the applicable period, to refuse to grant 65 Section 2(2) of the Acts Interpretation Act 1901 (Cth). 66 Sections 2(1) and 3 of the Statute Law (Miscellaneous Provisions) Act 1987 (Cth), read with Sch 1. 67 Section 33(2A) of the Acts Interpretation Act 1901 (Cth). 68 Commissioner of State Revenue (Vict) v Royal Insurance Australia Ltd (1994) 182 CLR 51 at 64; [1994] HCA 61. 69 eg, Commissioner of State Revenue (Vict) v Royal Insurance Australia Ltd (1994) 182 CLR 51 at 64-66, 81, 87-88, 97-99. registration, which the local registration authority is specifically empowered to do in the exercise of the discretion separately conferred on it by s 23 in the limited circumstances specified in that section. The express conferral by s 23 of the MRA of a discretion on the local registration authority to refuse registration in the limited circumstances specified in that section is sufficient to invoke the ordinary principle of construction by which a specific power to do a thing subject to restrictions as to its exercise is read as operating to the exclusion of a general power in the same legislation which might otherwise have been read as authorising the doing of the same thing without needing to observe the same restrictions70. The principle leaves no room for a residual discretion to refuse registration under s 20(2) outside the circumstances specified in s 23. To construe s 23 so as to leave no room for the discretion conferred by s 20(2) to be exercised to permit refusal of registration outside the circumstances specified in s 23 fits comfortably with the language of entitlement in s 20(1) and in s 17(1) of the MRA. More importantly, it is to arrive at the construction of s 20(2) that, of the contextually available alternatives, best achieves the MRA's stated purpose of promoting the goal of freedom of movement of service providers in a national market in Australia and that again does so in a manner consistent with the premise that regulatory standards applied for registration in one State are to suffice for registration in another State without supplementation or second-guessing by the local registration authority of that other State. Prior cases Reference was made in argument to three decisions of State Supreme Courts, each of which concerned the position of a person who, having been admitted to practice as a legal practitioner in another State and having given notice or purported notice under s 19 of the MRA, had been denied or granted registration under s 20(2) as a legal practitioner in a State: Re Petroulias71, Re Tkacz; Ex parte Tkacz72 and Scott v Law Society of Tasmania73. Reference was also made to a decision of the Court of Appeal of the Supreme Court of New 70 Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia (1932) 47 CLR 1 at 7; [1932] HCA 9. See also Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom (2006) 228 CLR 566; [2006] HCA 50. 71 [2005] 1 Qd R 643. 72 (2006) 206 FLR 171. 73 [2009] TASSC 12. South Wales which concerned the position of a person who, having been admitted to practice as a legal practitioner in New Zealand and having given equivalent notice, had been granted registration under the equivalent provision of the TMRA: Prothonotary v Comeskey74. Only one of those decisions, Re Tkacz, has the potential to bear materially on the issues in the appeal. Exactly what Re Tkacz decided is not entirely clear. To the extent that Re Tkacz might be understood to have decided either that s 17(2) of the MRA renders a State law requiring that a legal practitioner be of good character applicable to registration under s 20(2) of the MRA or that the discretion conferred on a local registration authority by s 20(2) of the MRA extends to allowing a local registration authority to refuse registration of a person who has been admitted to practice as a legal practitioner in another State and who has given notice under s 19 of the MRA on the basis of its own assessment that the person is not of good character75, it will be apparent from what I have written that I consider that case to have been wrongly decided. To the extent that Re Tkacz held that a State Supreme Court is a local registration authority for the purpose of the MRA and to the extent that it might be taken to have held that the inherent jurisdiction of a State Supreme Court is unaffected by the MRA76, I would reserve my consideration of its correctness for a case in which the correctness of each of those holdings squarely arose and was fully argued. Examination of the correctness of the first of those holdings would require consideration of whether a State Supreme Court fits the description of a "person"77 or "authority"78 within the MRA's definition of a local registration authority and of the weight to be attached in answering that question to the general provision that is made in the MRA for review of a decision of a local registration authority by the Administrative Appeals Tribunal. Examination of the correctness of the second of the holdings would require consideration of the potential for operation in a proceeding in the inherent jurisdiction of a State Supreme Court of the prescription in s 44(1) of the MRA that the mutual 74 [2018] NSWCA 18. 75 (2006) 206 FLR 171 at 186-187 [62]-[67]. See also Scott v Law Society of Tasmania [2009] TASSC 12 at [42]. 76 (2006) 206 FLR 171 at 178 [24], 180 [35], 182-183 [45], 188 [69]. 77 cf Canadian Pacific Tobacco Co Ltd v Stapleton (1952) 86 CLR 1 at 6; [1952] HCA 32. 78 cf Federal Commissioner of Taxation v Silverton Tramway Co Ltd (1953) 88 CLR 559 at 565-566; [1953] HCA 79. recognition principle and the provisions of the MRA "may be taken into consideration in proceedings of any kind" and of the import of that prescription. Orders The appeal must be dismissed with costs. NettleJ NETTLE AND GORDON JJ. The respondent, Mr Andriotis, was registered in New South Wales as a waterproofer. He said in his application to the New South Wales local registration authority that he had certain work experience. That was not true. Mr Andriotis then sought registration in Victoria, pursuant to the Mutual Recognition Act 1992 (Cth), as a building practitioner under the Building Act 1993 (Vic), the Victorian scheme regulating registration. The Mutual Recognition Act provides for recognition within each State and Territory of regulatory standards adopted elsewhere in Australia regarding goods and occupations and, thus, for recognition of registration for an occupation in one State by other States. The Victorian Building Practitioners Board refused Mr Andriotis' application because his New South Wales application demonstrated dishonesty and he was therefore not of "good character", as required by the Building Act79. The issue in this appeal was whether the Mutual Recognition Act permitted the Victorian Building Practitioners Board80 to consider whether Mr Andriotis was of "good character" within the meaning of the Building Act when considering his application for registration in Victoria. These reasons will show that it was not open to the Board to determine whether Mr Andriotis was of good character as required by the Building Act. Mr Andriotis was entitled to registration in Victoria because, having lodged a written notice with that Board under the Mutual Recognition Act, the fact of his registration in New South Wales was itself a sufficient ground of entitlement to registration for the equivalent occupation in Victoria. Whether Mr Andriotis attained or possessed the necessary qualifications or experience relating to fitness to carry on an occupation was to be determined solely by New South Wales. To explain that conclusion it is necessary to consider the statute in some detail. It is convenient first, however, to summarise the procedural history. 79 See Building Act compiled 1 July 2015, s 170(1)(c). 80 From 1 September 2016, the Building Practitioners Board was abolished and the registration functions previously conferred on the Board were vested in the Victorian Building Authority ("the VBA"): Building Legislation Amendment (Consumer Protection) Act 2016 (Vic), Div 2 of Pt 3; Victoria Government Gazette, S261, 23 August 2016. All decisions and actions of the Building Practitioners Board are taken to be decisions and actions of the VBA: Building Act compiled 1 September 2016, Sch 8, cll 3(1) and 6; see also s 3(1) definition of "Authority". NettleJ Procedural history In March 2015, Mr Andriotis was issued with an "Endorsed Contract the New South Wales Fair Trading β Licence β Waterproofing" by Home Building Service. On 3 June 2015, Mr Andriotis lodged an application with the Board seeking registration in Victoria as a "Domestic Builder Class W β Waterproofing". That application for registration was made under the Mutual Recognition Act. On 28 October 2015, the Registrar of the Board wrote to Mr Andriotis seeking further information. The Registrar noted that Mr Andriotis had stated in his New South Wales application that he had worked as a waterproofer from February 2012 to March 2015 for Oxford Builders Pty Ltd but the Registrar was unable to verify his work with that company. The Registrar also requested three written references from professional referees in order for the Board to be satisfied Mr Andriotis was of good character. On 11 November 2015, Mr Andriotis provided the requested information. Mr Andriotis stated that in addition to work with Oxford Builders Pty Ltd, he had worked for Delray Constructions. Mr Andriotis provided references from a director of Oxford Builders Pty Ltd and from Delray Constructions. On 30 November 2015, the Board refused Mr Andriotis' registration on the ground that he failed to satisfy the Board that he was of good character as required by s 170(1)(c) of the Building Act. Mr Andriotis applied to the Administrative Appeals Tribunal for review of the Board's decision. On review, the Tribunal affirmed the Board's decision and concluded that Mr Andriotis was not of good character as required by s 170(1)(c) of the Building Act81. The Tribunal found that "the evidence supporting Mr Andriotis' application for registration under the Mutual Recognition Act was materially defective and misleading"82 and that he "had not dealt forthrightly, honestly and with candour with registration and regulatory authorities"83. Mr Andriotis appealed to the Federal Court of Australia. The Full Court of the Federal Court determined that the Tribunal erred in concluding that it was entitled to take into account and apply the good character requirement in 81 Andriotis and Building Practitioners Board [2017] AATA 378 at [135], [137]. 82 Andriotis [2017] AATA 378 at [140]. 83 Andriotis [2017] AATA 378 at [142]. NettleJ s 170(1)(c) of the Building Act and, on that basis, set aside the decision of the Tribunal and remitted the matter to the Tribunal to be heard and decided again according to law. The Mutual Recognition Act The principal purpose of the Mutual Recognition Act is to promote the "goal of freedom of movement of goods and service providers in a national market in Australia"84. The scheme is not unique85. In a State or Territory86, there are two paths to registering for an occupation: either a person can apply under the prevailing State regulatory scheme (here, the Building Act), or, if they are registered for an equivalent occupation in another State, they can apply for recognition of that registration under the Mutual Recognition Act. These are therefore two parallel means of achieving the same end. The Mutual Recognition Act does not limit the operation of a law of a State so far as it can operate concurrently with that Act87. The Mutual Recognition Act leaves room for State laws to continue to operate with respect to registration of occupations. Section 20 in Pt 3 of the Mutual Recognition Act, headed "Entitlement to registration and continued registration", provides: "(1) A person who lodges a notice under section 19 with a local registration authority of the second State is entitled to be registered in the equivalent occupation, as if the law of the second State that deals with registration expressly provided that registration in the first State is a sufficient ground of entitlement to registration. The local registration authority may grant registration on that ground and may grant renewals of such registration. 84 Mutual Recognition Act, s 3. 85 See Trans-Tasman Mutual Recognition Act 1997 (Cth). 86 In accordance with the definition of "State" in s 4(1) of the Mutual Recognition Act, the word "State" used in this judgment shall include, where relevant, the Australian Capital Territory or the Northern Territory. 87 Mutual Recognition Act, s 6(2). NettleJ (3) Once a person is registered on that ground, the entitlement to registration continues, whether or not registration (including any renewal of registration) ceases in the first State. Continuance of registration is otherwise subject to the laws of the second State, to the extent to which those laws: apply equally to all persons carrying on or seeking to carry on the occupation under the law of the second State; and are not based on the attainment or possession of some qualification or experience relating to fitness to carry on the occupation. local registration authority may The impose conditions on registration, but may not impose conditions that are more onerous than would be imposed in similar circumstances (having regard to relevant qualifications and experience) if it were registration effected apart from this Part, unless they are conditions that apply to the person's registration in the first State or that are necessary to achieve equivalence of occupations. This section has effect subject to this Part." (emphasis added) Section 20(1) expressly provides that the fact of registration in the first State is itself a sufficient ground of entitlement to registration, subject to the requirements in s 19. Section 20(2) provides that the local registration authority of the second State may grant registration on that ground. But the use of the word "may" in this context should not mislead88. Under s 21 of the Mutual Recognition Act, a local registration authority has only three options: to grant, postpone or refuse the registration. If it does not postpone or refuse, it "must" grant the registration within one month89. The three options before the local registration authority are shaped by the entitlement to registration in s 20(1), subject to the requirements in s 19. In other words, if the statutory conditions are met, the local registration authority of the second State must grant the registration. 88 See Smith v Watson (1906) 4 CLR 802 at 811-812; [1906] HCA 80; Ward v Williams (1955) 92 CLR 496 at 505-508; [1955] HCA 4; Finance Facilities Pty Ltd v Federal Commissioner of Taxation (1971) 127 CLR 106 at 134-135, 138-139; [1971] HCA 12, citing Julius v Lord Bishop of Oxford (1880) 5 App Cas 214. 89 Mutual Recognition Act, s 21(1), (3), (4). NettleJ The question then is whether the second State can refuse registration under s 20(2) of the Mutual Recognition Act on the basis that the applicant is not of good character within the meaning of the local regulatory scheme. The answer is no. Section 20 must be read subject to Pt 390. The "mutual recognition principle", as applying to occupations, is set out in Pt 391. Section 17(1) in Div 1 of Pt 3 defines the mutual recognition principle as follows: "The mutual recognition principle is that, subject to this Part, a person who is registered in the first State for an occupation is, by this Act, entitled after notifying the local registration authority of the second State for the equivalent occupation: to be registered in the second State for the equivalent occupation; and pending such registration, to carry on the equivalent occupation in the second State." (emphasis added) A person registered for an occupation in the first State is entitled, after notifying the local registration authority of the second State, to be registered in the second State for an equivalent occupation. The entitlement to registration in the second State arises "after notifying"92 the second State authority. It does not require "applying to" that authority, only "notifying" it. That view is reinforced by Div 2 of Pt 3, headed "Entitlement to registration", which provides for the practical application of the mutual recognition principle in Div 1. Section 19(1) provides that a "person who is registered in the first State for an occupation may lodge a written notice with the local registration authority of the second State for the equivalent occupation, seeking registration for the equivalent occupation in accordance with the mutual recognition principle" (emphasis added). 90 Mutual Recognition Act, s 20(6). 91 Mutual Recognition Act, s 16(1). 92 Mutual Recognition Act, s 17(1). NettleJ The entitlement to registration is "subject to [Pt 3]"93. That is, the entitlement to registration does not arise unless the applicant is registered for an "occupation" in another State94; the entitlement to registration only applies to "equivalent" occupations, being those where the authorised activities are "substantially the same"95; and the entitlement to registration does not arise unless the applicant lodges a notice under s 1996. The notice must, information, enclose documents or information evidencing the existing registration, and be verified by a statutory declaration97. Relevantly, under s 19(2) the notice must: relevantly, prescribed contain state that the person is not the subject of disciplinary proceedings in any State (including any preliminary investigations or action that might lead to disciplinary proceedings) in relation to those occupations; and give consent to the making of inquiries of, and the exchange of information with, the authorities of any State regarding the person's activities in the relevant occupation or occupations or otherwise regarding matters relevant to the notice." If the applicant cannot truthfully make the statements required by s 19(2) or provide a true instrument or sufficient information evidencing their registration in the first State98, they will be unable to lodge the s 19 notice in the form required, and no entitlement to registration in the second State will arise. Consistent with the primacy of registration in the first State being a sufficient ground of entitlement the second State, registration must be granted by the local registration authority in the second State registration 93 Mutual Recognition Act, ss 17(1) and 20(6). 94 Mutual Recognition Act, s 19(1) read with s 4(1) definition of "occupation". 95 Mutual Recognition Act, s 19(1) read with s 29(1). 96 Mutual Recognition Act, ss 19(1) and 20(1). 97 Mutual Recognition Act, s 19(2)-(5). 98 Mutual Recognition Act, s 19(3)-(5). NettleJ after lodgement one month notice99. within However, that requirement is subject to Pt 3, and the fact that within one month of lodgement, the authority may postpone or refuse the grant of registration100. If the authority takes no action within that time, the person is immediately entitled to registration and "no objection may be taken to the notice on any of the grounds on which refusal or postponement may be effected, except where fraud is involved"101. the The mutual recognition principle in s 17 expressly provides that it does not affect the operation of laws that regulate the manner of carrying on an occupation in the second State, subject to two exceptions in s 17(2) which are in the following terms: "However, the mutual recognition principle is subject to the exception that it does not affect the operation of laws that regulate the manner of carrying on an occupation in the second State, so long as those laws: apply equally to all persons carrying on or seeking to carry on the occupation under the law of the second State; and are not based on the attainment or possession of some qualification or experience relating to fitness to carry on the occupation." (emphasis added) This appeal is concerned with the exception in s 17(2)(b) β while s 17(2) provides that the mutual recognition principle does not affect laws of the second State that regulate the manner of carrying on an occupation, this only applies to laws that are not based on the attainment or possession of some qualification or experience relating to fitness to carry on the occupation. Section 17(2)(b) means, at least, that the second State cannot impose higher qualifications for registration than the first State. The question is whether the exception provided by s 17(2)(b) means that the second State cannot consider whether the applicant is of good character either because the applicant misstated what qualifications the applicant had when seeking registration in the first State, or for some other reason. Or, put in different terms, is a law requiring a person to be of good 99 Mutual Recognition Act, s 21(1). 100 Mutual Recognition Act, s 21(1) and (3). 101 Mutual Recognition Act, s 21(4). NettleJ character a law about the attainment or possession of some qualification or experience relating to fitness to carry on the occupation102? The answer is found in the mutual recognition principle, reflected in Pt 3 of the Mutual Recognition Act read as a whole. The fact of registration in the first State is a sufficient ground of registration in the second State in respect of all aspects of qualification and experience, including any character requirements, relating to fitness to carry on an occupation. Thus, it is not open to the second State to go behind registration in the first State and seek to challenge or review any aspect of the applicant's qualifications and experience, including any character requirements, relating to their fitness to carry on the occupation in the first State. As was stated during the Second Reading Speech in the House of Representatives in relation to the Mutual Recognition Bill 1992, "[i]f someone is assessed to be good enough to practise a profession or occupation in one State or Territory, then they should be able to do so anywhere in Australia"103. There are several other elements of the statutory context that support that construction. Part 3 deals with the ability of a person who is registered in connection with an occupation in a State (the first State) to carry on an equivalent occupation in another State (the second State). "Occupation" is relevantly defined to mean "an occupation, trade, profession or calling of any kind that may be carried on only by registered persons, where registration is wholly or partly dependent on the attainment or possession of (for example, training, education, examination, experience, character or being fit or proper)"104. As is apparent, when defining what is an "occupation" under the Mutual Recognition Act, a qualification includes character and being a fit or proper person. As the Minister said during the Second Reading Speech, "[l]ocal registration authorities will be required to accept the judgment of their interstate counterparts of a person's educational qualifications, experience, character or fitness to practise"105. some qualification 102 It is not disputed that s 170(1)(c) of the Building Act is a law "that regulate[s] the manner of carrying on an occupation in the second State" within the meaning of s 17(2) of the Mutual Recognition Act. 103 Australia, House of Representatives, Parliamentary Debates (Hansard), 3 November 1992 at 2433. 104 Mutual Recognition Act, s 4(1) definition of "occupation". 105 Australia, House of Representatives, Parliamentary Debates (Hansard), 3 November 1992 at 2433. NettleJ Next, postponement of registration is addressed in s 22. It provides that a local registration authority may postpone the grant of registration for no longer than a period of six months if106: any of the statements or information in the notice as required by section 19 are materially false or misleading; or any document or information as required by subsection 19(3) has not been provided or is materially false or misleading; or the circumstances of the person lodging the notice have materially changed since the date of the notice or the date it was lodged; or the authority decides that the occupation in which registration is sought is not an equivalent occupation." That power to postpone the grant of registration for up to six months is important. It permits the local registration authority in the second State to make inquiries. Indeed, by lodging a notice under s 19, an applicant gives consent to that local registration authority "making ... inquiries of, and [exchanging] information with, the authorities of any State regarding the person's activities in the relevant occupation or occupations or otherwise regarding matters relevant to the notice"107. Moreover, the power of postponement under s 22 is not only of assistance to the second State. It also provides the first State with time to take any necessary disciplinary action under the laws of the first State. Those actions could, for example, include suspending or revoking the applicant's registration in that State, thereby removing the basis of the applicant's entitlement to registration in the second State under the Mutual Recognition Act. That is, the Mutual Recognition Act presumes that each relevant State registration authority will, consistent with the applicable local statute, take action to ensure that those registered in that State comply with the basis upon which they were registered in that State; and investigate, if required, whether they should remain registered. Refusal of registration by the second State is addressed in s 23. That section provides that a local registration authority may refuse the grant of registration if108: 106 Mutual Recognition Act, s 22(1) and (3). 107 Mutual Recognition Act, s 19(2)(h). 108 Mutual Recognition Act, s 23(1). NettleJ any of the statements or information in the notice as required by section 19 are materially false or misleading; or any document or information as required by subsection 19(3) has not been provided or is materially false or misleading; or the authority decides that the occupation in which registration is sought is not an equivalent occupation and equivalence cannot be achieved by the imposition of conditions." None of those grounds is engaged in the present appeal. But expressly providing that the local registration authority in the second State may refuse registration if the applicant makes false statements to that authority tends to suggest that the local registration authority is not to be concerned with examining whether registration in the first State was obtained by false statements. Indeed, the three grounds for refusal reflect the requirements in s 19 of the Mutual Recognition Act. Section 23(1) gives the local registration authority power to refuse registration where the s 19 requirements have not been met. Section 23(1) is exhaustive. Moreover, pending the grant or refusal of registration, a person who lodges a notice under s 19 is "taken to be registered as provided in section 20"109. Subject to certain limitations, a person who has such "deemed registration" may carry on the occupation in the second State as if the deemed registration were "substantive registration" in the second State110. Those limitations include a requirement that to carry on the occupation under deemed registration, the person must comply with requirements regarding insurance, fidelity funds, trust accounts and the like that are designed to protect the public, clients, customers or others111. Once the authority in the second State is satisfied that the person is indeed registered in the first State for an equivalent occupation, it must grant the registration and the interim arrangements under Div 3 of Pt 3 of the Mutual Recognition Act cease to apply. In this way, both the grounds for refusal and the intervening deemed registration reflect the primacy of the registration in the first State as the ground for registration in the second State. 109 Mutual Recognition Act, s 25(1); see also s 26. 110 Mutual Recognition Act, s 27(1). 111 Mutual Recognition Act, s 27(3)(a). NettleJ Continuance of registration is addressed in s 20(4). It provides that: "Continuance of registration is otherwise[112] subject to the laws of the second State, to the extent to which those laws: apply equally to all persons carrying on or seeking to carry on the occupation under the law of the second State; and are not based on the attainment or possession of some qualification or experience relating to fitness to carry on the occupation." (emphasis added) Continuation of registration is subject to the laws of the second State but subject to the same exceptions to the mutual recognition principle in s 17(2). The exceptions are in the same terms. A strong reason would be needed to read the two provisions differently and no reason, let alone a strong reason, has been identified. Thus, on its face, s 20(4)(b), like s 17(2)(b), reflects the primacy of the laws of the first State in relation to the attainment or possession of some qualification or experience relating to fitness to carry on the occupation. That analysis of the statutory scheme provides a complete answer to the submission of the Victorian Building Authority ("the VBA") that because it, or its predecessor, "may" grant registration under s 20(2) of the Mutual Recognition Act, the Board had a discretionary power to refuse registration based on Mr Andriotis not being of good character. As has been observed, there is no such discretion. Three further provisions of the Mutual Recognition Act were relied upon by the VBA as support for its contention that the local registration authority in the second State may refuse registration on the basis of factors outside the s 19 requirements. First, the VBA contended that s 19(2)(h) demonstrated that the inquiries of the local registration authority are not limited to the matters the subject of the s 19 notice and, by extension, permitted the VBA to refuse registration on the basis of other matters. That contention should be rejected. The consent, and the scope of the activities permitted to be investigated by the local registration authority, are identified by the concluding words in s 19(2)(h), namely "regarding the person's activities in the relevant occupation or occupations or otherwise regarding matters relevant to the notice" (emphasis added). These words limit the scope of the matters to be investigated by the local registration authority. 112 Referring to Mutual Recognition Act, s 20(3). NettleJ Next, the VBA contended that the reference to fraud in s 21(4) meant that the power to refuse registration on the basis of fraud must be found elsewhere than in s 23(1). That contention proceeds on an incorrect premise. A notice lodged under s 19 that has been procured by fraud is not a "notice under section 19" within the meaning of s 20(1)113. Thus, an applicant who lodges a notice procured by fraud does not cross the s 19 threshold. the grant Finally, it is necessary to refer to s 36, which provides that "[r]esidence or domicile in a particular State is not to be a prerequisite for or a factor in entitlement this Part". The VBA contended that s 36 is a qualification on the entitlement to registration that is outside the scope of s 19. Section 36 is not an additional qualification. It simply confirms that the requirement for the applicant to be "registered in the first State" under s 19(1) does not mean that the applicant must be resident or domiciled in that State. As explained, s 23(1) provides an exhaustive statement of the grounds for refusal of registration. registration arising under For these reasons, the local registration authority in the second State is not permitted to go behind the person's registration in the first State. Section 170 of the Building Act has no application to those seeking registration under the Mutual Recognition Act and only applies to those seeking registration under the parallel local scheme. No inconsistency between s 170 of the Building Act and the Mutual Recognition Act arises. At first blush, it may seem odd that the laws of the first State in relation to the attainment or possession of some qualification or experience relating to fitness to carry on the occupation are given primacy over the laws of the second State. Putting the same point as a question β does reading the Mutual Recognition Act in a way that obliges the second State to register an applicant who is registered in the first State distort the operation of the Act? In particular, does it mean that giving that operation or meaning to ss 17(2)(b) and 20(4)(b) leads to some unintended or absurd result in regulating the continuing conduct of persons registered under the Mutual Recognition Act? The answer is no. To show why reading the Mutual Recognition Act as requiring registration of Mr Andriotis in Victoria does not lead to an unintended or absurd result, even though he had misstated his experience when seeking registration in New South Wales, it is necessary to say something briefly about the disciplinary provisions under the relevant Victorian legislation β the Building Act. 113 See Lazarus Estates Ltd v Beasley [1956] 1 QB 702 at 712; SZFDE v Minister for Immigration and Citizenship (2007) 232 CLR 189 at 196-199 [15]-[22], 200-201 [29], 206 [51]-[52]; [2007] HCA 35. NettleJ Those provisions114 would apply if, after registration, Mr Andriotis engaged in conduct contrary to the standards established by that Act. More particularly, s 20(4)(b) of the Mutual Recognition Act would not preclude the engagement of the disciplinary provisions in relation to Mr Andriotis' conduct or events occurring after he was registered in Victoria. Indeed, in Div 5 of Pt 3 of the Mutual Recognition Act, which deals in part with disciplinary action, s 33(1) provides that if a person's registration in an occupation in "a State" is cancelled, suspended or subject to a condition "on disciplinary grounds, or as a result of or in anticipation of criminal, civil or disciplinary proceedings, then the person's registration in the equivalent occupation in another State is affected in the same way". Further, s 37(2)(c) requires the first State authority to furnish relevant information to the second State authority if the information is required by the second State in connection with "actual or possible disciplinary action" against registrant. The construction of the Mutual Recognition Act adopted here would not distort the operation of those provisions or bring about absurd outcomes. the Thus, where registration in one State is obtained on the basis that the relevant person has attained or possessed some qualification or experience relating to fitness to carry on the occupation under the laws of that State, it is not open to the second State to go behind that registration. If a person seeks registration in a second State under the Mutual Recognition Act then, prior to registration as well as after registration in the second State under the Mutual Recognition Act, it is for the first State to address the applicant's attainment or possession of some qualification or experience relating to fitness to carry on the occupation under the laws of the first State. The exact ambit of what constitutes the "attainment or possession of some qualification or experience relating to fitness to carry on the occupation" in ss 17(2)(b) and 20(4)(b) may require further consideration in later cases. the long as registered the person first State, remains their registration, and the continuation of their registration, in the second State is governed by the mutual recognition scheme. However, the application of ss 17(2)(b) and 20(4)(b) to the laws of the second State that apply to a person registered under the Mutual Recognition Act does not mean that the local regulatory authority in the second State cannot, and should not, prosecute a person for contravening laws of the second State that do not fall within the ambit of laws based on the attainment or possession of some qualification or experience relating to fitness to carry on the occupation. 114 See Building Act compiled 26 September 2018, ss 178 and 179. NettleJ The Building Act in Victoria in its application to Mr Andriotis is illustrative. The Building Act The Building Act regulates building practitioners in Victoria115. The local registration authority at the relevant time was the Building Practitioners Board (now Section 170, headed "Registration", provided117: Part 11 concerned the VBA116). registration. "(1) The Building Practitioners Board must register an applicant in each category or class applied for if it is satisfied that the applicant β has complied with section 169; and either β holds an appropriate prescribed qualification; or holds a qualification that the Board considers is, either alone or together with any further certificate, authority, experience or examination equivalent to a prescribed qualification; and is of good character; and has complied with any other condition prescribed for registration in that category or class. The Building Practitioners Board may refuse to register an applicant if the requirements of subsection (1) are not met. In this section qualification means any degree, diploma, certificate, training, experience or examination accreditation, authority, 115 Building Act compiled 1 July 2015, s 1(d); see also s 3(1) definition of "building practitioner", which includes the term "domestic builder". 116 See fn 80 above. 117 Building Act compiled 1 July 2015. After 1 September 2016, the "good character" test in s 170(1)(c) was replaced with a "fit and proper person" test: Building Legislation Amendment (Consumer Protection) Act 2016 (Vic), s 20(2). This change is not an issue in dispute. NettleJ (whether obtained inside or outside Victoria)." (first emphasis added) As explained earlier, it was not open to the Board or the Tribunal to have regard to s 170(1)(c) in addressing Mr Andriotis' entitlement to registration or his continued registration in Victoria. But that did not preclude the possible operation of s 179 of the Building Act, which, at the time of the Board's decision, permitted it to take disciplinary action, such as by cancelling, suspending or imposing conditions on registration118, if the Board was to find, for example, that Mr Andriotis was "guilty of unprofessional conduct"119 by reason of his conduct after registration. In its current form, s 179 of the Building Act provides that disciplinary action can be taken if, among other things, "the practitioner has engaged in unprofessional conduct or has failed to comply with a code of conduct"120 or where "the practitioner has engaged in conduct in relation to the practitioner's practice as a building practitioner that is β (i) constituted by a pattern of incompetence; or (ii) negligent in a particular matter"121. In addition, under Subdiv 3 of Div 3 of Pt 11 of the Building Act, after registration, grounds for immediate suspension of the registration of a registered building practitioner include insolvency122, where the practitioner has been convicted of an indictable offence involving fraud, dishonesty, drug trafficking or violence123, where the practitioner has ceased to be covered by the required insurance124 and where the practitioner has failed to comply with a condition of the practitioner's registration125. 118 See Building Act compiled 1 July 2015, s 179(2)(da), (e), (f). 119 Building Act compiled 1 July 2015, s 179(1)(a). 120 Building Act compiled 26 September 2018, s 179(1)(b). 121 Building Act compiled 26 September 2018, s 179(1)(f). 122 Building Act compiled 26 September 2018, s 180(a). 123 Building Act compiled 26 September 2018, s 180(c). 124 Building Act compiled 26 September 2018, s 180(d). 125 Building Act compiled 26 September 2018, s 180(g). NettleJ These provisions are capable of operating, and are intended to operate, concurrently with the Mutual Recognition Act126. Previous authorities Contrary to the VBA's submissions, the construction of the Mutual Recognition Act it contended for is not supported by earlier authorities which had considered aspects of the Mutual Recognition Act in its application to legal practitioners. In Re Petroulias, the applicant applied for registration as a solicitor in Queensland under the Mutual Recognition Act127. Mr Petroulias was unable to make the declarations required by s 19(2) of the Mutual Recognition Act truthfully with the result that his s 19 "notice was consequently not apt to crystallise the entitlement to registration in Queensland", the second State, provided by s 20 of the Mutual Recognition Act128. The Queensland Court of Appeal held that Mr Petroulias' registration in Queensland, based on his registration in another State as a sufficient ground of entitlement to registration in Queensland, should be set aside129. Mr Petroulias did not cross the s 19 threshold. Re Tkacz; Ex parte Tkacz130 concerned a legal practitioner who, having fully disclosed a criminal conviction, was admitted to practice in New South Wales. Mr Tkacz applied to be admitted in Western Australia131. The question for the Full Court of the Supreme Court of Western Australia was whether the Mutual Recognition Act, whether by express words or necessary implication, removed or curtailed the residual power of the Supreme Court in its inherent jurisdiction to refuse to admit an applicant who has otherwise satisfied the admission requirements132. The Full Court held that the Mutual Recognition Act did not displace the Court's inherent power to regulate admission to practice in 126 See Mutual Recognition Act, s 6(2). 127 [2005] 1 Qd R 643 at 648 [1]. 128 Re Petroulias [2005] 1 Qd R 643 at 651 [19]. 129 Re Petroulias [2005] 1 Qd R 643 at 654 [38], 656 [53]. 130 (2006) 206 FLR 171. 131 Re Tkacz (2006) 206 FLR 171 at 174-175 [4]-[6]. 132 Re Tkacz (2006) 206 FLR 171 at 186 [61]. NettleJ that State133. For present purposes, it is unnecessary to determine whether that is so. Here, the VBA has no similar inherent jurisdiction which might operate independently of the Mutual Recognition Act. In Scott v Law Society of Tasmania134, which involved relevantly similar facts to Re Petroulias, the applicant failed to disclose in her notice under s 19 of the Mutual Recognition Act that she had been the subject of a complaint in the Northern Territory in which the council of the Law Society of the Northern Territory had made a finding of unprofessional conduct, and resolved that the applicant be admonished under the Legal Practitioners Act (NT)135. Crawford CJ (with whom Slicer and Evans JJ agreed) correctly stated that "because the Mutual Recognition Act, s 20(1), establishes entitlement to admission under the Act as if the law of the second State expressly provides that admission in the first State is sufficient ground of entitlement to admission, provided that the applicant is a person who has lodged a notice seeking admission under s 19 ... [o]n its face, s 20(1) leaves little room for a discretion based on the applicant's character or prior conduct"136. The question of what significance should be attributed to his Honour's subsequent statement that there is, however, authority for the proposition that there is a remaining discretion by reference to Re Petroulias and Re Tkacz is something which, for present purposes, need not be decided. Conclusion and orders For those reasons, the appeal should be dismissed with costs. 133 Re Tkacz (2006) 206 FLR 171 at 188 [69]. 134 [2009] TASSC 12. 135 [2009] TASSC 12 at [19]-[25], [30], [37]-[38]. 136 Scott [2009] TASSC 12 at [42]. Edelman EDELMAN J. Mr Andriotis was registered as a waterproofer in one Australian State (New South Wales). He applied for registration as a waterproofer in a different State (Victoria). He relied upon the "mutual recognition principle" in the Mutual Recognition Act 1992 (Cth) ("the MRA"). That principle, as it applies to occupations in Pt 3 of the MRA, is concerned with an application by a registered member of an occupation in one State to be registered to carry on an equivalent137 occupation in another State. The central issue in this appeal is whether the MRA permitted the Victorian Building Practitioners Board ("the Board") to consider whether Mr Andriotis was of "good character", within the meaning of s 170(1)(c) of the Building Act 1993 (Vic), when assessing his application for registration. I gratefully adopt the facts relevant to this appeal and the background to the MRA that are set out in the other judgments. For the reasons below, Mr Andriotis' interpretation of Pt 3 of the MRA should be accepted. The MRA did not permit the Board to consider whether Mr Andriotis was of good character. The appeal must be dismissed. Mutual recognition principle At the heart of this appeal is the "mutual recognition principle". The MRA uses the expression "mutual recognition principle" in the sense of a "justification for adopting and applying"138 rules, or a guide or foundation for rules, but not itself intended for direct application. As a principle, mutual recognition is therefore a matter that applies to the facts and circumstances of a case indirectly by affecting the application of a rule rather than being, itself, a rule capable of direct application. A clear example of the mutual recognition principle being used in this sense of a principle can be seen in s 44(1) of the MRA, which provides that the mutual recognition principle is a matter that "may be taken into consideration in proceedings of any kind and for any purpose". The mutual recognition principle is used in relation to both goods and occupations in Pts 2 and 3 of the MRA as a high-level statement or summary that guides the rules in those Parts. So, in relation to goods, the rules can be seen in provisions that include: s 8(2), which provides that Pt 2 deals with goods produced in or imported into a State ("the first State") and their sale in another State ("the second State"); s 10, which describes requirements of the law of the second State that do not need to be complied with for that sale; s 11, which describes those requirements that do need to be complied with; and ss 14 and 15, which set out various exemptions. In contrast, the mutual recognition principle in s 9 describes only the broad effect of Pt 2 of the MRA. That broad effect, 137 MRA, s 29(1). 138 Dworkin, Taking Rights Seriously (1977) at 28. Edelman which is expressly made subject to the particular provisions of Pt 2, is to permit the sale in a second State of goods produced or imported into a first State without complying with requirements of the law of the second State that are listed in s 10. The mutual recognition principle in relation to occupations in Pt 3 of the MRA is used in this same sense of a high-level statement not intended for direct application. The instantiation of the mutual recognition principle in Pt 3 of the MRA The mutual recognition principle in Pt 3 is stated in s 17. It is a principle of entitlement to be registered in the second State for the equivalent occupation (and, pending registration, to carry on the equivalent occupation in the second State) after notifying the local registration authority. The section thus describes the intention that there be a general entitlement to be registered upon notification, subject to the "exception" in s 17(2) to preserve particular laws that "regulate the manner of carrying on an occupation in the second State". Section 17(2) is an exception to the principle, not an additional principle. In other words, the principle is singular and is concerned with an entitlement to be registered rather than a principle concerning an entitlement to be registered and a separate principle concerning an entitlement to continue to carry on the occupation. As a high-level statement, the mutual recognition principle does not explain when or how the local authority of the second State must be notified. It does not provide for the detail of the operation of "deemed registration", as described in s 25, pending a decision to grant or refuse registration by the local authority of the second State. It does not provide a time period in which the local authority must take action to register a person (s 21). It does not provide for circumstances in which the grant of registration might be postponed after notification (s 22). It does not provide for the circumstances in which registration might be refused or how the local authority might inform the person of its decision (ss 23 and 24). All these rules, and other relevant rules, of direct application are set out in the subsequent Divisions of Pt 3. The mutual recognition principle is neither intended for, nor capable of, direct application. The narrow interpretation, for which the Victorian Building Authority ("the VBA") contended, is concerned with the rule in s 20(4)(b). The structure of s 20 is as follows. First, it provides for a general entitlement to registration in the second State after lodgement of a notice (s 20(1)). Secondly, it provides a duty for the local registration authority of the second State to grant that registration, and renewals of that registration (s 20(2)). Sub-section (2) is expressed in terms that the registration and renewals "may" be granted because they are subject to grounds for refusal in s 23. Thirdly, it provides for the registration in the second State to "continue" even if registration in the first State or a renewal of registration in the first State lapses (s 20(3)). Fourthly, it provides that "[c]ontinuance of registration", which must be a reference to the initial registration in the second State and any renewal of registration, is subject to the Edelman laws of the second State, with exceptions including where the laws are "based on the attainment or possession of some qualification or experience relating to fitness to carry on the occupation" (s 20(4)). Fifthly, it permits the local registration authority of the second State to impose conditions on registration subject to certain requirements (s 20(5)). Three interpretations of the requirements of Pt 3 of the MRA There are at least three possible interpretations concerning the extent to which registration of the person in the first State, including any assessment of character or fitness to carry on an occupation, must be recognised and continued in the second State. Each of these interpretations is subject to exceptions that can be put to one side for present purposes139. The three interpretations can be contrasted to illustrate why the third interpretation best reflects the intention of the Commonwealth Parliament. The first interpretation is at one extreme, maximising the autonomy of the second State. On the first interpretation, the mutual recognition principle would require the local authority of the second State to respect only the assessment by the local authority of the first State of a person's technical qualifications and experience. It would not require respect for the assessment by the first State's local authority of the person's character or fitness to carry on the occupation. This means, for example, that if after registration in the first State and whilst carrying on that occupation in the first State a person commits serious dishonesty offences without being deregistered in the first State, the local authority of the second State could refuse to register the person if the dishonesty offences meant that the person failed the second State's character requirements for registration. A second interpretation is at the other extreme, with the greatest impairment of the autonomy of the second State, including significant impairment after the registration of the person in the second State. Although no party contended for this second interpretation, the language of the MRA leaves open this alternative interpretation. The second interpretation is that the mutual recognition principle would require the local authority of the second State at all times to respect the assessment by the local authority of the first State of both (i) the person's technical qualifications and experience, and (ii) the person's character or fitness or propriety to carry on the occupation for all purposes relating to carrying on the occupation. This means that a person convicted of a serious dishonesty offence whilst carrying on an occupation in the second State could not, after a disciplinary hearing, have her or his registration suspended or cancelled by the local authority of the second State on the basis of bad character or lack of fitness or propriety to carry on the occupation. Any assessment of 139 See MRA, ss 21(3), 22, 23. Edelman character or fitness or propriety to carry on the occupation would fall to the local authority of the first State, even if the person no longer practises the occupation in the first State. The third interpretation is a media sententia lying between the two extreme interpretations. The third interpretation is that the mutual recognition principle requires the local authority of the second State to respect the assessment by the local authority of the first State of the person's technical qualifications, experience and character for the initial registration without generally affecting the ability of the second State's local authority subsequently to take disciplinary action against the person based on the person's present lack of good character or fitness or propriety to carry on the occupation. Therefore, using the example above, this means that the second State could take disciplinary action against a person convicted of a serious dishonesty offence whilst carrying on an occupation in that State, on the basis of lack of good character or fitness or propriety to carry on the occupation. The first interpretation should not be adopted The first interpretation is essentially the interpretation proposed by the VBA. In short, the VBA submitted that a narrow interpretation should be given to one of the preconditions for laws such as s 170(1)(c) of the Building Act to fall within the exception to the mutual recognition principle. The relevant precondition, stated in the expression of the principle in s 17(2)(b) and in the rule in s 20(4)(b), is that the laws of the second State regulating the manner of carrying on an occupation "are not based on the attainment or possession of some qualification or experience relating to fitness to carry on the occupation". The VBA submitted that that qualification was intended in its narrow sense to mean only academic qualifications140 or some kind of qualification acquired after completion of an examination, and did not include matters such as "good character" within the meaning of s 170(1)(c) of the Building Act. The text, history, purpose, and context of the MRA combine to require the conclusion that this first interpretation is too narrow. Textually, the first interpretation fails to give sufficient weight to the words "relating to fitness to carry on the occupation" in s 17(2)(b) and s 20(4)(b), which do not naturally connote only formal qualifications. Contextually, the first interpretation is inconsistent with the broad meaning given to "qualification" in the definition of "occupation" in s 4(1) as "the attainment or possession of some qualification (for example, training, education, examination, experience, character or being fit or proper)". Further, with respect to context and history, 140 Relying upon Re Director-General of Health (Cth); Ex parte Thomson (1976) 51 ALJR 180 at 181-182; 11 ALR 471 at 475. Edelman the first interpretation is inconsistent with the statement made by the Minister in the Second Reading Speech of the Bill that became the MRA that "[l]ocal registration authorities will be required to accept the judgment of their interstate counterparts of a person's educational qualifications, experience, character or fitness to practise"141. Finally, the purpose expressed in s 3 of the MRA, "of promoting the goal of freedom of movement of goods and service providers in a national market in Australia", supports a constraint upon the laws of the second State confined not merely to respecting the first State's assessment of formal qualifications but also to respecting the first State's assessment of a person's character and fitness or propriety to practise. However, relevantly to the second interpretation, this purpose does not require respect for the first State in relation to issues concerning discipline for matters affecting the person's fitness to practise in the second State occurring after registration has been granted. The third interpretation should be preferred to the second The third interpretation is relied upon by Mr Andriotis. As between the second and third interpretations, the third interpretation gives best effect to the intention of the Commonwealth Parliament for the following three reasons. (1) The context of the high-level mutual recognition principle As explained, the entitlement to registration in s 20 does not incorporate the high-level statement of the mutual recognition principle in s 17 as a rule in s 20. The high-level statement only provides a guide to the interpretation of s 20. However, the importance of that guide is that it illustrates that s 20 is concerned with, and provides a rule of direct application for, an entitlement to registration and renewals of registration. In light of the s 17 principle, as a single principle concerned with registration, and not two principles concerned with (i) rights of registration, and (ii) rights of carrying on an occupation, s 20 should not be interpreted as though s 20(1) provided, in addition to an entitlement to registration (including renewals of registration), an entitlement to remain registered or to continue to be registered despite any disciplinary concerns by the second State. Section 20 reflects this instantiation of the mutual recognition principle. Section 20(1) is the core rule that gives effect to the mutual recognition principle. The following sub-sections are concerned with the mechanics of that entitlement to registration. In the context of s 20(1)-(3), the restriction in s 20(4)(b) is concerned with the initial registration and any renewals of registration. to renewals of registration ("continuing" registration), By applying also 141 Australia, House of Representatives, Parliamentary Debates (Hansard), 3 November 1992 at 2433. Edelman s 20(4)(b) ensures that the second State cannot pay lip-service to the mutual recognition principle by granting an initial registration despite concerns about the person's character or fitness or propriety to practise and then refusing renewal for the same concerns. By contrast, any suspension or cancellation of registration as a result of a disciplinary hearing in the second State is not a grant or a renewal of the registration. It is a separate procedure concerned with the standards of the present delivery of the service. (2) The separate preservation of disciplinary action Subject to one constraint discussed below, s 33 of the MRA, entitled "Disciplinary action", is a rule that reinforces the boundaries of the mutual recognition principle. Section 33(1) has the effect that the cancellation or suspension of registration, or the imposition of conditions on registration, by the local authority of either the first or the second State will affect the person's registration in the other State in the same manner. Sub-section (2) provides for the possibility of different results for registration in different States following a disciplinary hearing in one State. The local authority of the State in which disciplinary action is not taken has the power to reinstate a cancelled or suspended registration or waive a condition if it thinks it appropriate in the circumstances. Sub-section (3) provides that the rule in s 33 extends to registration effected apart from the MRA, where restrictions imposed by the mutual recognition principle do not apply. And sub-s (4) provides that s 33 "has effect despite any other provisions of [Pt 3]". Sub-sections (2), (3), and (4) of s 33 thus make manifest the intention that the mutual recognition principle does not support an interpretation of s 20 that would proscribe consideration, in disciplinary proceedings, of any requirements relating to character or fitness or propriety to carry on the occupation. However, while disciplinary action is not generally within the scope of the mutual recognition principle, and although s 33 has effect despite any other provisions of Pt 3, s 33 cannot undermine the entirety of the mutual recognition principle. A constraint imposed on the ability of the local authority of the second State to take disciplinary action is therefore that such action can only be taken in respect of "actual service delivery"142. The laws of the second State could not empower the second State's local authority to take disciplinary action for the 142 Special Premiers' Conference, The Mutual Recognition of Standards and Regulations in Australia: A Discussion Paper (1991), Technical Attachment at 12 Edelman failure of the person to obtain a right to practise by separate registration in the second State143. (3) The extraordinary consequences of the second interpretation An obvious consequence of the second interpretation is that it has the to undermine many State provisions concerning potential substantially disciplinary action across numerous occupations existing both at the time of enactment of the MRA and subsequently. This consequence is so stark that it casts significant doubt upon whether the second interpretation could have been intended by the Commonwealth Parliament. The context of that intention is that the MRA was enacted pursuant to a referral of power to the Commonwealth Parliament from the States under s 51(xxxvii) of the Constitution, and requests from the Australian Capital Territory and the Northern Territory, following an inter-governmental agreement between the Commonwealth, the States, the Australian Capital Territory, and the Northern Territory144. It would be surprising if the States intended to refer power, and the Commonwealth intended to legislate on that referral, in a manner that would undermine numerous existing and likely future State disciplinary provisions. The consequence of the second interpretation is that it would have rendered, and would continue to render, inoperative all those State provisions permitting the local authority of the second State to suspend or cancel a registration, after disciplinary inquiries or hearings, on the basis of character or fitness to practise. At the date of enactment of the MRA there were many State provisions that enabled local authorities to take disciplinary action against registered members of occupations or licence holders on the basis of character or fitness to practise. Some of the many examples of these provisions in 1992 were fishers, health professionals, lawyers, pest controllers, real estate agents, teachers, builders, plumbers and drainers, and electrical contractors145. It would 143 Special Premiers' Conference, The Mutual Recognition of Standards and Regulations in Australia: A Discussion Paper (1991), Technical Attachment at 11- 144 Agreement Relating to Mutual Recognition Between the Commonwealth of Australia, the State of New South Wales, the State of Victoria, the State of Queensland, the State of Western Australia, the State of South Australia, the State of Tasmania, the Australian Capital Territory and the Northern Territory of Australia, 11 May 1992. 145 Fisheries Act 1976 (Qld), s 80(1)(f); Chiropractors and Osteopaths Act 1991 (NSW), ss 28(1)(e), 49(1)(g); Dentists Act 1989 (NSW), ss 31(1)(g), 47(1)(b); Dental Act 1939 (WA), ss 30(1)(e), 30(3)(e); Nurses Act 1991 (NSW), ss 44(1)(f), 64(1)(g); Podiatrists Act 1989 (NSW), ss 14(1)(e), 16(1)(h)-(i); Podiatrists (Footnote continues on next page) Edelman also reasonably have been expected in 1992 that many more State provisions would continue to enable local authorities to take such action. And these now include such disciplinary inquiries into fitness to practise in occupations requiring registration such as childcare service providers146, fishers147, health professionals148, labour hire service providers149, lawyers150, motor vehicle (Qld), s 131R(1)(d); Auctioneers and Agents Act 1941 Registration Act 1984 (WA), ss 28(1)(e), 28(2)(a); Psychologists Act 1989 (NSW), ss 14(1)(e), 16(1)(g)-(h); Psychologists Registration Act 1976 (WA), ss 39(1)(e), 39(2)(a); Legal Profession Act 1987 (NSW), ss 123 (para (b) of the definition of "professional misconduct"), 163(1); Legal Profession Practice Act 1958 (Vic), ss 2A (para (j) of the definition of "misconduct"), 38ZB(1)(c), 84(1)(i); Health Act (NSW), ss 29(1)(b)-(c), 29(3); Estate Agents Act 1980 (Vic), ss 25(2)(a)(ii), 28(1)(b), 28(2); Land Agents, Brokers and Valuers Act 1973 (SA), ss 85(1)(c), 85a(1)(c)(ii), 85a(2)(c)(ii), 85a(3)(c), 85a(4)(c)(ii), 85a(5)(c); Auctioneers and Agents Act 1971 (Qld), ss 23(4), 81B(d), 81C(d), 81G(c)-(d); Real Estate and Business Agents Act 1978 (WA), ss 103(1)(c), 103(2)(d), 103(3)(c), 103(4)(d); Education Act 1972 (SA), s 65(2)(b); Education (Teacher Registration) Act 1988 (Qld), ss 4 (para (b) of the definition of "misconduct"), 39(2)(b); Building Services Corporation Act 1989 (NSW), ss 55(1)(b), 55(2)(d), 74(e)-(f); Building Control Act 1981 (Vic), ss 101(7)(e), 103(1)(c), 103(3)(c); Electricity (Licensing) Regulations 1991 (WA), regs 17(1), 30(1)(a), 46(1)(a). 146 Children (Education and Care Services) National Law (NSW), ss 21(1), 25(a), 31(a); Education and Care Services National Law (Vic), ss 21(1), 25(a), 31(a); Education and Care Services National Law (SA), ss 21(1), 25(a), 31(a); Education and Care Services National Law (Qld), ss 21(1), 25(a), 31(a); Education and Care Services National Law (WA), ss 21(1), 25(1)(a), 31(a); Education and Care Services National Law (Tas), ss 21(1), 25(a), 31(a). 147 Fisheries Act 1995 (Vic), ss 58(1)(a)(i), 58(5); Fish Resources Management Act 1994 (WA), s 143(1)(cc). 148 Health Practitioner Regulation National Law (NSW), ss 55(1)(h)(i), 60(1), 149C(1)(d); Health Practitioner Regulation National Law (Vic), ss 5 (para (c) of the definition of "professional misconduct"), 196(1)(b)(iii), 196(2)(d)-(e); Health Practitioner Regulation National Law (SA), ss 5 (para (c) of the definition of "professional misconduct"), 196(1)(b)(iii), 196(2)(d)-(e); Health Practitioner Regulation National Law (Qld), ss 5 (para (c) of the definition of "professional misconduct"), 196(1)(b)(iii), 196(2)(d)-(e); Health Practitioner Regulation National Law (WA), ss 5 (para (c) of the definition of "professional misconduct"), 196(1)(b)(iii), 196(2)(d)-(e); Health Practitioner Regulation National Law (Tas), ss 5 (para (c) of the definition of "professional misconduct"), 196(1)(b)(iii), 196(2)(d)-(e). Edelman and inspectors pest controllers153, pyrotechnicians154, teachers157, and various tradespersons158. repairers151, passenger transport real estate agents155, service providers152, tattooists156, 149 Labour Hire Licensing Act 2018 (Vic), ss 22, 39(1)(a)(ii), 40(1)(b); Labour Hire Licensing Act 2017 (SA), ss 10, 23(1)(f); Labour Hire Licensing Act 2017 (Qld), ss 22(1)(b)(v), 24(1)(c), 27. 150 Legal Profession Uniform Law (NSW), ss 297(1)(b), 302(1)(h); Legal Profession Uniform Law (Vic), ss 297(1)(b), 302(1)(h); Legal Practitioners Act 1981 (SA), ss 20AC(a), 20AD(1), 69(b), 82(6)(a)(iv), 89(2)(c); Legal Profession Act 2007 (Qld), ss 60(a), 61(2)(b)-(c), 419(1)(b), 456(2)(b); Legal Profession Act 2008 (WA), ss 55(a), 56(3)(b)-(c), 403(1)(b), 439(a); Legal Profession Act 2007 (Tas), ss 64(a), 65(2)(b)-(c), 421(1)(b), 471(b). 151 Motor Dealers and Repairers Act 2013 (NSW), ss 38(1)(c), 45(1)(c), 45(1)(g); Road Transport (Vehicle Registration) Regulation 2017 (NSW), cll 72(1)(b), 90(3)(c); Road Safety Act 1986 (Vic), s 15A(1)(a). 152 Passenger Transport Act 2014 (NSW), s 33(1)-(2); Passenger Transport Act 1994 (SA), ss 36(2)(e)(ii), 36(3)(c)(iii)-(iv), 50(1)(c); Passenger Transport Regulations 2009 (SA), reg 31(a)(ii); Transport (Road Passenger Services) Act 2018 (WA), ss 42(1)(d), 79(1)(e); Passenger Transport Services Act 2011 (Tas), s 31(1)(b)(i). 153 Pesticides Act 1999 (NSW), ss 5B(1), 52(2)(f); Controlled Substances (Pesticides) Regulations 2017 (SA), reg 14(c)(i)(C); Health (Pesticides) Regulations 2011 (WA), regs 38(2)(d), 39(2)(e), 50(d), 51(1)(b)-(c). 154 Explosives Act 2003 (NSW), s 21(b); Explosives (Fireworks) Regulations 2016 (SA), reg 32(c); Explosives Act 1999 (Qld), ss 23(d), 24(3); Explosives Regulations 2012 (Tas), reg 53(2)(e). 155 Property, Stock and Business Agents Act 2002 (NSW), ss 191(e), 192(1)(f)-(g); Estate Agents Act 1980 (Vic), ss 25(1)(b), 28A(1)(d)-(e); Property Occupations Act 2014 (Qld), ss 36(1)(a), 172(1)(g)(i), 172(1)(g)(vii), 186(2)(a)-(b); Real Estate and Business Agents Act 1978 (WA), ss 103(1)(c), 103(2)(d), 103(3)(c), 103(4)(d); Property Agents and Land Transactions Act 2016 (Tas), ss 83(1) (para (b) of the definition of "professional misconduct"), 110(1)(a)-(b). 156 Tattoo Parlours Act 2012 (NSW), ss 3(1) (para (b)(i) of the definition of "adverse security determination"), 25(1), 26(1)(b); Tattoo Industry Act 2013 (Qld), ss 33(1), 34(1)(a)(i). 157 Education and Training Reform Act 2006 (Vic), ss 2.6.46(1)(c), 2.6.46(2)(i)-(j); Teachers Registration and Standards Act 2004 (SA), ss 33(1)(c), 35(2)(c)(ii)-(iii); (Footnote continues on next page) Edelman The consequence of the second interpretation is that the local authority of the second State, in which the person now practises, would be powerless in disciplinary proceedings under these provisions to deregister the person or to suspend or cancel her or his licence to practise, even in the most serious cases of unfitness to practise. If the second interpretation were correct then although a person might reside and practise exclusively in the second State, deregistration could only occur if action were taken by the first State, which has no present connection with the person. In other words, the State with a direct interest in discipline could not take action and action could only be taken by the State with no interest in taking disciplinary action. Conclusion The third interpretation, as submitted by Mr Andriotis, should be accepted. Neither the text nor the context of the MRA, particularly s 20, supports the first interpretation. And, for the three reasons that I have explained above, the third interpretation should be preferred to the second. It may be that some or all of the three reasons for preferring the third interpretation to the second interpretation led the Office of Regulation Review to say without qualification, in a paper discussing the impact of mutual recognition, that "once registered, practitioners are subject to the disciplinary powers of the local registering authority"159. Similarly, in an early review of the mutual recognition scheme, it was said without qualification that a basic principle of the scheme was that160: "the newly registered practitioners are subject to the local laws or regulations covering how the services in question are to be provided or Education (Queensland College of Teachers) Act 2005 (Qld), ss 92(1)(h), 160(2)(d)-(e); Teacher Registration Act 2012 (WA), ss 24(d)(ii), 47(f)(ii), 70(1)(d), 84(1)(b)(i)-(ii); Teachers Registration Act 2000 (Tas), ss 17J, 20(3)(e), 24(b)-(d). 158 Home Building Act 1989 (NSW), ss 56(b), 57(b), 62(e)-(f); Building Act 1993 (Vic), ss 178(f)-(g), 179(1)(g), 179B(1); Plumbers Licensing and Plumbing Standards Regulations 2000 (WA), regs 27(b), 34(1)(f)-(g); Electricity (Licensing) Regulations 1991 (WA), regs 30(1)(a), 31(2)(a)-(c), 46(1)(a), 47(2)(a)-(b); Occupational Licensing Act 2005 (Tas), ss 90(1)(c), 90(2)(c), 90(2)(d)(ii), 93(1)(d)-(e). 159 Office of Regulation Review, Impact of Mutual Recognition on Regulations in Australia: A Preliminary Assessment, Information Paper (1997) at 2. 160 Head, "The Scheme Affecting Occupations", in Thomas and Saunders (eds), The Australian Mutual Recognition Scheme: A New Approach to an Old Problem Edelman how the business is to be conducted. Therefore, they are also subject to the local codes of conduct and local disciplinary powers." The appeal should be dismissed with costs. |
HIGH COURT OF AUSTRALIA STATE OF NEW SOUTH WALES APPELLANT AND RESPONDENT New South Wales v Williamson [2012] HCA 57 12 December 2012 ORDER Appeal dismissed with costs. On appeal from the Supreme Court of New South Wales Representation J B Simpkins SC with D F Villa for the appellant (instructed by Crown Solicitor (NSW)) B W Walker SC with F L Austin for the respondent (instructed by Byles Anjos Lawyers) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS New South Wales v Williamson Costs β Limit on maximum costs in connection with claim for "personal injury damages" β Legal Profession Act 2004 (NSW), s 338 β Where "personal injury damages" defined to have same meaning as in Civil Liability Act 2002 (NSW), Pt 2 β Whether maximum costs limitation applies to claims for personal injury damages resulting from intentional acts. Costs β Limit on maximum costs in connection with claim for "personal injury damages" β Legal Profession Act 2004 (NSW), s 338 β Claim for false imprisonment not claim for "personal injury damages" β Where such claim is included in claim for damages and not severable part of claim, the claim for damages not claim for "personal injury damages". Statutory interpretation β Principles β Reading provision in context β Whether, when operative statute adopts term in source statute, account must be taken of operation of term in source statute β Effect of amendments to statute. Words and phrases β "award of personal injury damages", "claim for personal injury damages", "false imprisonment", "maximum costs", "personal injury damages", "same meaning". Civil Liability Act 2002 (NSW), Pt 2, ss 3B, 11. Legal Profession Act 2004 (NSW), Pt 3.2 Div 9, ss 337, 338. FRENCH CJ AND HAYNE J. This appeal was heard together with three appeals brought by Certain Lloyd's Underwriters against John Cross, Mark George Thelander and Jill Maria Thelander. These reasons should be read with the reasons in those appeals1 ("the Lloyd's Appeals"). The issues As in the Lloyd's Appeals, this appeal concerns the construction of New South Wales statutory provisions fixing the maximum costs that can be awarded in certain personal injury damages matters. Two questions arise in this appeal. Does a "claim for personal injury damages" include a claim for personal injury damages based on an intentional tort? Does it include a claim for damages for false imprisonment? Answering these questions requires consideration of Div 9 of Pt 3.2 (ss 337-343) of the Legal Profession Act 2004 (NSW) ("the 2004 Legal Profession Act") and the Civil Liability Act 2002 (NSW) ("the Liability Act") as it stood after the amendments made by the Civil Liability Amendment (Personal Responsibility) Act 2002 (NSW) ("the Personal Responsibility Act")2. The facts The respondent sued the State of New South Wales in the District Court of New South Wales for damages for trespass to the person and false imprisonment. He alleged that the State was vicariously liable for the actions of police officers who, in August 2006, had allegedly thrown him to the ground, restrained him, confined him in a police wagon, further assaulted him and then, without explanation, released him without charge. The action in the District Court was settled and orders were made by consent disposing of the proceedings. Judgment was entered for the respondent (as plaintiff) for $80,000 "plus costs of these proceedings as agreed or assessed". Proceedings at first instance and in the Court of Appeal No agreement having been reached about the costs that were to be allowed, the respondent applied for an order transferring the proceedings to the 1 Certain Lloyd's Underwriters Subscribing to Contract No IH00AAQS v Cross [2012] HCA 56. 2 Although the Liability Act has been amended since the amendments made by the Personal Responsibility Act, the detail of those later amendments need not be considered. They do not suggest any different answer to the determinative question of construction. Hayne Supreme Court and for a declaration that costs in the proceedings "are not regulated by section 338 of the Legal Profession Act [2004]". Hall J made3 orders to that effect. By leave, the State appealed to the Court of Appeal (Hodgson, Campbell and Macfarlan JJA) against the orders of Hall J. The Court of Appeal dismissed4 the appeal and identified two different bases for doing so. First, the Court held5 that a claim for false imprisonment, at least in so far as it extends to a claim for damages for deprivation of liberty and loss of dignity, is not a claim for personal injury damages within the meaning of s 338(1) of the 2004 Legal Profession Act. Where such a claim is included in a claim for damages settled by a single undifferentiated sum, the Court concluded6 that the amount recovered, though less than $100,000, is not recovered "on a claim for personal injury damages" and does not engage s 338(1). Second, the Court of Appeal held7, following the earlier decision of a differently constituted Court of Appeal in Cross v Certain Lloyds Underwriters8, that the expression "personal injury damages" in the 2004 Legal Profession Act does not include claims for intentional torts. Appeal to this Court By special leave the State now appeals to this Court. These reasons will show that the costs limiting provisions of Div 9 of Pt 3.2 of the 2004 Legal Profession Act apply if the amount recovered on a claim for personal injury damages does not exceed $100,000, whether that claim is framed in negligence or as an intentional tort. In particular, contrary to the conclusion reached by the Court of Appeal, s 338(1) should not be construed as confined in its operation to claims that might result in awards to which Pt 2 of the Liability Act would apply. These reasons will further show, however, that the Court of Appeal was right to hold that the costs limiting provisions did not apply in this case. The 3 Williamson v State of New South Wales (2010) Aust Torts Reports ΒΆ82-055. 4 State of New South Wales v Williamson [2011] NSWCA 183. [2011] NSWCA 183 at [54]-[56], [61]-[67] per Campbell JA (Hodgson and [2011] NSWCA 183 at [54]-[56], [68] per Campbell JA. [2011] NSWCA 183 at [3] per Hodgson JA, [27], [40] per Campbell JA, [117] per [2011] NSWCA 136. Hayne respondent received a lump sum settlement of his District Court proceedings for trespass to the person and false imprisonment. At least to the extent to which the claim for false imprisonment seeks damages for deprivation of liberty and loss of dignity, it is not a claim for damages for personal injury. Because no part of the lump sum settlement can be attributed to either the respondent's claim for trespass or his claim for false imprisonment, it is not possible to say of the amount that was recovered that it was "recovered on a claim for personal injury damages". It is necessary to refer to the provisions that apply in this case and to notice some differences between these provisions and those considered in the Lloyd's Appeals. The applicable provisions Section 338(1) of the 2004 Legal Profession Act, like its legislative ancestor9 considered in the Lloyd's Appeals, fixed the maximum costs for legal services provided to a party in connection with "a claim for personal injury damages", "[i]f the amount recovered on [the claim] does not exceed $100,000". A law practice and its client could contract out of this limitation10 by a "costs agreement" complying with Div 5 of Pt 3.2 of the 2004 Legal Profession Act. But s 338(4)(b) provided that, subject to some exceptions that need not be considered, when the maximum costs for legal services provided to a party are fixed by Div 9 of Pt 3.2, "a court or tribunal cannot order the payment by another party to the claim of costs in respect of those legal services in an amount that exceeds that maximum". Like its legislative ancestor11, the 2004 Legal Profession Act provided12 a definition of "personal injury damages" that referred to the Liability Act. Section 337(1) of the 2004 Legal Profession Act provided that: "personal injury damages has the same meaning as in Part 2 of the Civil Liability Act 2002." 9 Legal Profession Act 1987 (NSW), s 198D(1). 11 s 198C(1). Hayne The definition's reference to a particular Part of the Liability Act was new and reflected amendments that had been made to the Liability Act by the Personal Responsibility Act before the 2004 Legal Profession Act was enacted. intoxication, self-defence and The Personal Responsibility Act altered the structure of the Liability Act. When originally enacted, the Liability Act had been divided into two parts: Pt 1 dealt with preliminary matters and Pt 2 regulated the amount recoverable as an "award of personal injury damages". The Personal Responsibility Act introduced a new Pt 1A dealing with negligence and new Pts 3-10 dealing with subjects as diverse as mental harm, proportionate liability, liability of public and other authorities, recovery by criminals, good samaritans, volunteers and apologies. The definition of "personal injury damages" which had originally appeared in Pt 1 of the Liability Act13 was moved into Pt 214 together with an amended definition of "injury". Whereas the original definition of "injury" included15 "psychological or psychiatric injury", the Personal Responsibility Act amended it to include16 "impairment of a person's physical or mental condition". The Personal Responsibility Act also changed the definition of "personal injury damages". The original definition was17 "damages that relate to the death of or injury to a person caused by the fault of another person" (emphasis added) whereas the amended definition β "damages that relate to the death of or injury to a person"18 β made no reference to cause or fault. As originally enacted, s 9 of the Liability Act governed the application of the provisions of Pt 2 to awards of personal injury damages. It provided19, in effect, that subject to certain stated exclusions, the Part applied "to and in respect of an award of personal injury damages" even if the damages were recovered in an action for breach of contract or in any other action. The Personal Responsibility Act introduced a new s 3B which was cast in terms that regulated the application of the whole Act, not just one or more particular Parts of the Act. By sub-s (1), it provided that "[t]he provisions of this Act do not apply to or in 19 s 9(1) and (3). Hayne respect of civil liability (and awards of damages in those proceedings)" of seven different classes. By sub-s (2), it provided that certain identified provisions of the Act were to apply to motor accidents. And by sub-s (3), it provided that regulations made under the Act might exclude a specified class or classes of civil liability (and awards of damages in those proceedings) from the operation of all or any specified provisions of the Act. The first class of excluded liabilities, identified in s 3B(1)(a), was: "civil liability in respect of an intentional act that is done with intent to cause injury or death or that is sexual assault or other sexual misconduct". In respect of this first class, it was provided that the whole Act except Pt 7, concerning self-defence and recovery by criminals, was not to apply. Having thus provided that the provisions of the Act, subject to some exceptions, do not apply to or in respect of certain classes of civil liability (and awards of damages in those proceedings), the Personal Responsibility Act further regulated the application of Pt 2 of the Act concerning personal injury damages. It inserted a new s 11A, which provided that: "(1) This Part [Pt 2] applies to and in respect of an award of personal injury damages, except an award that is excluded from the operation of this Part by section 3B. This Part applies regardless of whether the claim for the damages is brought in tort, in contract, under statute or otherwise. (3) A court cannot award damages, or interest on damages, contrary to this Part." It is as well to deal first with the general question of whether a claim for damages for an intentional tort is a "claim for personal injury damages" before moving to the more specific issue about the claim for damages for false imprisonment. Construction The definition of "personal injury damages" in s 337(1) of the 2004 Legal Profession Act lay at the centre of the debate about construction in this Court, just as the definition of the same expression in the Act's legislative ancestor lay at the centre of the debate in the Lloyd's Appeals. The central point of difference between the parties in this appeal mirrored that in the Lloyd's Appeals: does the definition of "personal injury damages" in the 2004 Legal Profession Act (it "has the same meaning as in Part 2" of the Liability Act) direct attention only to the words of the definition of that expression in s 11 of the Liability Act or does it Hayne direct attention to both the words of the definition and the kinds of awards of personal injury damages to which Pt 2 of that Act applied? The appellant advanced the first construction, the respondent the second. The first construction should be adopted. "Personal injury damages" in the 2004 Legal Profession Act means any and every form of damages that relate to personal injury to a person whether that injury results from a failure to take reasonable care or the commission of an intentional act with intent to cause injury. This construction accords with the text of the relevant provisions of both Acts. The second construction does not. The definition of "personal injury damages" in s 337(1) does not refer to the operation or application of the Liability Act. It refers to the meaning of the expression in Pt 2 of the Liability Act, and s 11 in Pt 2 of the Liability Act provides that personal injury damages "means damages that relate to the death of or injury to a person" (emphasis added). That definition draws no distinction between damages awarded in claims for negligence and damages awarded in claims for an intentional tort. The respondent in this appeal made submissions in support of the second construction β limiting Div 9 of Pt 3.2 of the 2004 Legal Profession Act to claims that, if successful, would result in awards of damages regulated by Pt 2 of the Liability Act β that differed from those presented in the Lloyd's Appeals in support of the same construction of the earlier legislation. In this appeal, the respondent emphasised three elements of the statutory text. The first element was the words "meaning" and "as in" in the definition of "personal injury damages" in s 337(1) of the 2004 Legal Profession Act (it "has the same meaning as in Part 2" of the Liability Act). The respondent submitted that the "definition of a term may simply describe the words which are printed in a definition section" but that the "meaning of the term is the way in which it operates β what it signifies" (emphasis added). "The meaning is the way in which the word is used to convey what it conveys, either to bring about a legal consequence to describe a state of affairs or to stipulate a state of affairs". And the respondent submitted that the words "as in Part 2" command a reader to understand the defined expression "in the way it is used in Part 2". The second element was s 3B of the Liability Act. As noted earlier, s 3B(1) provided that "[t]he provisions of this Act do not apply to or in respect of civil liability (and awards of damages in those proceedings)" in certain listed classes of liability. The respondent observed that "those are very broad words of disapplication". One class of excluded civil liability was20, subject to exceptions that need not be considered, "civil liability in respect of an intentional act that is 20 s 3B(1)(a). Hayne done with intent to cause injury". It followed, so the respondent submitted, that intentional torts have "absolutely no connection with Part 2 at all" because the Liability Act as a whole did not apply to intentional acts done with intent to injure except in very limited (and presently irrelevant) respects. Accordingly, the argument continued, "personal injury damages" in the 2004 Legal Profession Act could not have a meaning that would include claims for personal injury damages for intentional torts because including claims of that kind would not give the expression "the same meaning as in Part 2" of the Liability Act. The third element of the text emphasised by the respondent was ss 11 and 11A of the Liability Act. The respondent pointed out that s 337(1) of the 2004 Legal Profession Act referred to Pt 2 of the Liability Act and that it did not make specific reference to the definition of "personal injury damages" in s 11. The respondent further pointed out that s 11A(1) excluded from Pt 2 those classes of liability excluded by s 3B of the Liability Act and that s 11A is in Pt 2 of the Liability Act. The latter observation was said to be important because having regard to s 11A was thus consistent with the definition of "personal injury damages" in the 2004 Legal Profession Act (it has the same meaning "as in Part 2"). In aid of these arguments, the respondent relied on statements by Dixon J in The Producers' Co-operative Distributing Society Ltd v Commissioner of Taxation (NSW)21 emphasising the need to consider the context provided by other provisions of an Act when considering a definition provided for in that Act and picked up and applied by another. The respondent was right to focus attention on the text of the relevant provisions and to disclaim any particular reliance upon extrinsic material to overcome the statutory language. Nevertheless the respondent's argument should be rejected. The text does not support the construction urged. First, the respondent's argument assumed that the expression "personal injury damages" was the hinge on which Pt 2 of the Liability Act turned. Hence, the respondent submitted that the expression "personal injury damages" should be understood as having a particular meaning when used in Pt 2 of the Liability Act because of s 11A(1). But that is not right. Section 11A(1) used the larger composite expression "award of personal injury damages". Section 11A identified the awards of personal injury damages that are regulated by Pt 2 of the Liability Act. It says nothing about the meaning of the defined expression "personal injury damages". That the larger composite expression, and not simply is further "personal injury damages", the fulcrum of the provision 21 (1944) 69 CLR 523 at 536; [1944] HCA 39. Hayne demonstrated by the second phrase of s 11A(1): "except an award that is excluded from the operation of this Part by section 3B" (emphasis added). What Dixon J said in the Producers' Co-operative Case does not support the respondent's arguments. Dixon J observed22 that if the provisions of the Act in which a definition is found (that definition then being picked up by another Act) give "any guidance as to the meaning or application of such a phrase in the definition ... we should refer to it and in interpreting the definition give the context as much effect" in construing that Act as in construing the Act that picks up that definition (emphasis added). But the respondent's arguments in this case did not look to Pt 2 of the Liability Act for guidance on what the definition of "personal injury damages" in s 11 means ("damages that relate to the death of or injury to a person"). The meaning of those words is clear, and the provisions about an "award of personal injury damages" provide no guidance in construing them. Secondly, the respondent's arguments did not take account of the differences in the provisions that each Act made for its own sphere of application. Each Act contained provisions that expressly excluded23 certain classes of awards or claims from the operation of its provisions. Some, but not all, of the exclusions mirrored each other, with the result that some awards excluded from Pt 2 of the Liability Act would be made following claims for personal injury damages excluded from the operation of Div 9 of Pt 3.2 of the 2004 Legal Profession Act. For example, particular awards of damages for dust diseases under the Dust Diseases Tribunal Act 1989 (NSW) were excluded24 from the operation of the Liability Act and claims for those kinds of awards were excluded by s 337(2)(d) from the application of Div 9 of Pt 3.2 of the 2004 Legal Profession Act. But the exclusions which the two Acts made were not identical. Importantly, the Liability Act excluded25 intentional acts done with intent to injure but the 2004 Legal Profession Act did not. The difference in the express exclusions in each Act is important. Because the exclusions are different, each Act is expressly given a different area of operation from the other. Yet the fundamental premise for the respondent's submissions was that the two Acts must be given the same area of operation. The express terms of each Act deny that premise. And, for the reasons already given, 22 (1944) 69 CLR 523 at 536. 23 2004 Legal Profession Act, s 337(2); Liability Act, ss 3B and 11A(1). 24 ss 3B(1)(b) and 11A(1). 25 ss 3B(1)(a) and 11A(1). Hayne the conclusion which the respondent sought to draw from that premise (that the two Acts have an identical area of operation because "personal injury damages" in the 2004 Legal Profession Act was confined to damages the award of which was regulated by Pt 2 of the Liability Act) is not open. Neither s 338(1) of the 2004 Legal Profession Act nor s 11A(1) of the Liability Act affects the meaning that is to be given to the expression "personal injury damages". Each turns on a larger composite expression (award of or claim for "personal injury damages"). None of the provisions that turn on those larger composite expressions affects the sense in which the defined expression "personal injury damages" was used in either Act. Finally, as explained in the Lloyd's Appeals, no legislative "purpose" or "intention" to tie the operation of the costs limiting provisions of the legislative ancestor of the 2004 Legal Profession Act to the scope of application of the Liability Act is to be discerned. The course of legislative history after the first enactment of the Liability Act does not provide a basis for construing the 2004 Legal Profession Act otherwise than according to its terms. That the Liability Act was amended by the Personal Responsibility Act and some years later the 2004 Legal Profession Act was passed separately provides no support for the respondent's construction. Nor was it suggested that any of the amendments made to the Liability Act after the Personal Responsibility Act provided any support for the respondent's construction. For these reasons, in addition to those given in the Lloyd's Appeals, the construction favoured by the Court of Appeal and supported by the respondent should be rejected. False imprisonment and recovery on a claim for personal injury damages The costs limiting provisions of the 2004 Legal Profession Act are engaged26 where an amount has been "recovered on a claim for personal injury damages". As already explained, "personal injury damages" was defined27 to have the same meaning as in Pt 2 of the Liability Act. And as has already been noted, s 11 of the Liability Act defined "personal injury damages" as "damages that relate to the death of or injury to a person" and "injury" as "personal injury", including "impairment of a person's physical or mental condition". The respondent sued the appellant for trespass to the person (alleging several instances of battery) and false imprisonment. He alleged that the batteries he had suffered had caused him personal injury, but it was far from clear Hayne that he alleged that the wrongful deprivation of his liberty had itself impaired his physical or his mental condition. Often but not always, a battery will cause personal injury to the victim. False imprisonment is often accompanied by an assault and battery and the accompanying battery may (but need not28) cause personal injury. There may be cases where an act of false imprisonment itself causes psychiatric, even physical injury29. Even assuming, however, that the respondent did allege that the act of wrongful imprisonment (as distinct from the batteries he alleged he had suffered) had caused him some personal injury, the claim for false imprisonment was necessarily a claim for damages on account of the deprivation of liberty with any accompanying loss of dignity and harm to reputation. The deprivation of liberty (loss of dignity and harm to reputation) is not an "impairment of a person's physical or mental condition" or otherwise a form of "injury" within s 11 of the Liability Act. The claim for false imprisonment, at least to the extent to which it sought damages for deprivation of liberty, is not a "claim for personal injury damages". The judgment entered in this matter in the District Court did not identify how the damages were computed or on what account they were allowed. On its face, the judgment was consistent with the allowance of damages only for the deprivation of liberty with no allowance for any impairment of the respondent's physical or mental condition. It is not possible to show that the sum which the respondent recovered was "recovered on a claim for personal injury damages". The costs limiting provisions of Div 9 of Pt 3.2 of the 2004 Legal Profession Act were thus not engaged. Conclusion and orders The Court of Appeal was right to dismiss the appeal to that Court on the basis that the respondent's lump sum settlement was not an amount that had been "recovered on a claim for personal injury damages". The appeal to this Court should accordingly be dismissed with costs. 28 See, for example, Watson v Marshall and Cade (1971) 124 CLR 621; [1971] HCA 29 cf Lowden v Goodrick (1791) Peake 64 [170 ER 80]; Pettit v Addington (1791) Peake 87 [170 ER 89]; McGregor, McGregor on Damages, 18th ed (2009) at 1573 CRENNAN AND BELL JJ. This appeal was heard with the appeals brought by Certain Lloyd's Underwriters against John Cross, Mark Thelander and Jill Thelander ("the Lloyd's appeals") and these reasons are to be read with our reasons in the Lloyd's appeals. The factual background and procedural history are set out in the reasons of French CJ and Hayne J and need not be repeated. The respondent's claim was found by the primary judge30 (Hall J) and the New South Wales Court of Appeal (Hodgson, Campbell and Macfarlan JJA) not to be within the provision restricting the recovery of party and party costs in certain claims for "personal injury damages" in the Legal Profession Act 2004 (NSW)31 ("the 2004 LP Act"). The Court of Appeal's holding was made on two bases. First, the respondent's judgment was for a single undifferentiated sum which included claims under heads of damage that were not for personal injury32. Secondly, claims for damages for personal injury caused by an act done with the intention of causing injury or death are not claims for "personal injury damages" for the purposes of s 338(1) of the 2004 LP Act33. The second basis raises the same question as to the meaning of "personal injury damages" that is addressed in the Lloyd's appeals. It is determinative of this appeal. The Lloyd's appeals concern the cost-capping provisions of Div 5B of Pt 11 of the Legal Profession Act 1987 (NSW) ("the 1987 LP Act"). From 6 December 2002, when the relevant provisions of the Civil Liability Amendment (Personal Responsibility) Act 2002 (NSW) commenced, the provisions of Div 5B of Pt 11 of the 1987 LP Act became identical to the provisions of Div 9 of Pt 3.2 of Ch 3 of the 2004 LP Act in their application to this appeal. For the reasons given in the Lloyd's appeals, the meaning of "personal injury damages" in s 337(1) of the 2004 LP Act is damages relating to the death of or injury to a person (in the extended way injury is defined in s 11 of the Civil Liability Act 2002 (NSW) ("the Liability Act")) to which Pt 2 of the Liability Act applies. The expression does not include a claim for damages for personal injury occasioned by an act done with the intention of causing injury or death34. This conclusion 30 Williamson v State of New South Wales (2010) Aust Torts Reports ΒΆ82-055 at 31 2004 LP Act, s 338. 32 State of New South Wales v Williamson [2011] NSWCA 183 at [2] per Hodgson JA, [68] per Campbell JA, [117] per Macfarlan JA. 33 State of New South Wales v Williamson [2011] NSWCA 183 at [4] per Hodgson JA, [27] per Campbell JA, [117] per Macfarlan JA. 34 Liability Act, s 3B(1)(a). makes it unnecessary to address the appellant's challenges to the first basis of the Court of Appeal's determination. Orders The appeal should be dismissed with costs. KIEFEL J. These reasons should be read with my reasons in the Lloyd's appeals35. The first question raised by this appeal concerns s 337(1) of the Legal Profession Act 2004 (NSW) ("the 2004 LP Act"). Section 338(1) of that Act fixes the maximum costs for legal services provided in connection with a "claim for personal injury damages" if the amount recovered on the claim does not exceed $100,000. Section 337(1) provides that "personal injury damages" has the same meaning as in Pt 2 of the Civil Liability Act 2002 (NSW). Sections 337(1) and 338(1) have their predecessors in ss 198C(1) and 198D(1) of the Legal Profession Act 1987 (NSW). These were the subject of the Lloyd's appeals, as was the Civil Liability Act 2002, as amended by the Civil Liability Amendment (Personal Responsibility) Act 2002 (NSW) (referred to together as "the Liability Act"). The first question raised in the present proceeding is whether the definition of "personal injury damages" in the 2004 LP Act is informed only by the definition of that term in s 11 of the Liability Act, namely damages that relate to the death of or injury to a person, or whether it extends to the kinds of awards to which Pt 2 of the Liability Act applies, taking into account the exclusions effected by ss 11A and 3B(1). Those exclusions extend to awards for damages respecting injuries caused by an intentional act. The answer to this question is that the definition of the term for the purposes of the 2004 LP Act follows only from the definition provided in the Liability Act, for the reasons given by me in the Lloyd's appeals. It follows that, for the purposes of the 2004 LP Act, a "claim for personal injury damages" includes one where the injury results from an intentional act. The second question is whether a claim for personal injury damages includes a claim for damages for false imprisonment. I agree, for the reasons given by French CJ and Hayne J, that it does not. It follows that the provisions of Div 9 of Pt 3.2 of the 2004 LP Act are not engaged. I agree with the orders proposed by French CJ and Hayne J. 35 Certain Lloyd's Underwriters Subscribing to Contract No IH00AAQS v Cross [2012] HCA 56. |
HIGH COURT OF AUSTRALIA Matter No S142/2010 APPLICANT AND THE QUEEN Matter No S143/2010 GLYN MORGAN JONES AND THE QUEEN RESPONDENT APPLICANT RESPONDENT Hili v The Queen [2010] HCA 45 8 December 2010 S142/2010 & S143/2010 ORDER Matter No S142/2010 Special leave to appeal granted on grounds one to six inclusive of the draft notice of appeal. Appeal treated as instituted and heard instanter, and dismissed. Matter No S143/2010 Special leave to appeal granted on grounds one to six inclusive of the draft notice of appeal, but refused on ground seven. Appeal treated as instituted and heard instanter, and dismissed. On appeal from the Supreme Court of New South Wales Representation J T Svehla with R J Webb for the applicants in both matters (instructed by Snelgroves) P W Neil SC for the respondent in both matters (instructed by Commonwealth Director of Public Prosecutions) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Hili v The Queen Criminal law β Sentence β Principles β Federal offences β Applicants pleaded guilty to federal offences β Prosecution successfully appealed on ground of manifest inadequacy against head sentences and recognizance release orders imposed by sentencing judge β Court of Criminal Appeal stated that "the 'norm' for a period of mandatory imprisonment under the Commonwealth legislation is between 60 and 66% [of head sentence]" β Whether any judicially determined "norm" for ratio between time to be served in custody by federal offender and length of head sentence imposed β How consistency in federal sentencing to be achieved β Whether sentences imposed by sentencing judge manifestly inadequate β Whether Court of Criminal Appeal's reasons sufficient. Words and phrases β "manifest inadequacy". Crimes Act 1914 (Cth), Pt IB. Judiciary Act 1903 (Cth), s 68. FRENCH CJ, GUMMOW, HAYNE, CRENNAN, KIEFEL AND BELL JJ. The applicants seek special leave to appeal against sentences imposed by the Court of Criminal Appeal of the Supreme Court of New South Wales, following a successful prosecution appeal against sentences that had been imposed on them in the District Court of New South Wales. The applicants had pleaded guilty, in the District Court, to offences committed in evading income taxation. Proceedings and sentences in the District Court Mr Hili pleaded guilty to one charge of obtaining a financial advantage by deception from a Commonwealth entity (the Commissioner of Taxation) contrary to s 134.2(1) of the Criminal Code Act 1995 (Cth) ("the Code"). Mr Jones pleaded guilty to three charges: one of defrauding the Commonwealth contrary to s 29D of the Crimes Act 1914 (Cth) ("the Crimes Act"), one of obtaining a financial advantage by deception (the Commissioner of Taxation) contrary to s 134.2(1) of the Code, and one of money laundering contrary to s 400.4(1) of the Code. from a Commonwealth entity The applicants were friends. In 1997, they had formed a company to perform painting and carpentry contract work for the New South Wales Department of Housing. Mr Hili had then introduced Mr Jones to his accountants, a firm which carried on its practice in Burwood, New South Wales. Each thereafter used the firm to perform accounting work. It was this firm of accountants which later invited each applicant to participate in a scheme for evading taxation. It was agreed, for the purposes of sentencing, that each applicant had evaded taxation that would otherwise have been payable in respect of the years ended 30 June 2001, 2002 and 2003 by a company or companies he controlled, and evaded taxation that would otherwise have been payable personally for the same years. Mr Jones was also alleged to have evaded taxation otherwise payable in respect of the years ended 30 June 2000 and 30 June 2004 by a company he controlled. Taxation was evaded by claiming deductible expenses for fees falsely said to have been paid by the relevant company. The amounts falsely claimed as deductions were passed through an international round robin of transactions. These transactions passed most of the money said to have been paid by the relevant company, through accounts in the names of companies owned and operated by an accounting and business advisory firm based in Vanuatu, into the hands of one or other of the applicants. The receipts were falsely described as loans by a foreign lender. Crennan Bell The frauds were effected over a long time. Mr Hili engaged in 15 round robin transactions between January and November 2002. He lodged false income tax returns for two companies and for himself for the year ended 30 June 2002, for one of the companies and for himself for the year ended 30 June 2003, and for the same company for the year ended 30 June 2004. Mr Jones engaged in 11 round robin transactions between April 2001 and February 2004. He lodged false tax returns for his company for the year ended 30 June 2000, for himself and for his company for the years ended 30 June 2001, 30 June 2002 and 30 June 2003, and for the company for the year ended 30 June 2004. Mr Hili and his companies evaded taxation totalling $398,537.82. Mr Jones and his companies evaded taxation totalling $362,925.24. Having regard to penalties and interest, Mr Hili became liable to pay over $1 million to the Australian Taxation Office as a result of his conduct. Mr Jones was liable to pay an amount of between $900,000 and $1 million. At the time of sentence, Mr Hili had paid some of what was owing, and was realising assets to pay the rest. Mr Jones was also taking steps to pay what he owed. In the District Court, Morgan DCJ sentenced Mr Hili to imprisonment for a total of 18 months, with a recognizance release order to take effect after seven months. Mr Jones was sentenced on each count to 18 months. Each sentence was made concurrent with the others. Again, a recognizance release order was made to take effect after seven months. The sentencing judge noted that each applicant was previously of good character. Each had pleaded guilty at the earliest opportunity. Each had admitted his guilt in the course of interviews with police, and provided the authorities with what police believed to be "all information and assistance available to him". Each undertook to co-operate with law enforcement agencies, including by giving evidence in any subsequent proceedings brought in respect of four named persons who were alleged to have been instrumental in establishing and operating the evasion scheme the applicants had used. The undertakings are enforceable through the mechanisms prescribed by s 21E of the Crimes Act (by which the Director of Public Prosecutions may appeal against the reduction of a sentence where promised co-operation is not provided). The sentencing judge took the view "that in each case the appropriate discount [on account of pleas of guilty and past and future assistance] is one of fifty per cent for the plea and the assistance of which twelve and a half per cent is referable to future assistance in accordance with the undertaking signed by each offender". Crennan Bell Prosecution appeal to the Court of Criminal Appeal The prosecution appealed against the sentences imposed, alleging that the sentences were manifestly inadequate. The Court of Criminal Appeal (McClellan CJ at CL, Howie and Rothman JJ) allowed1 the appeal in respect of the single sentence imposed on Mr Hili, and allowed the appeal in respect of the sentences imposed on Mr Jones with respect to the first two counts, of defrauding the Commonwealth and obtaining a financial advantage by deception. On re-sentencing, the Court of Criminal Appeal sentenced Mr Hili to a term of three years with a recognizance release order to take effect after 18 months. Mr Jones was re-sentenced to a fixed term of 12 months on the first count (of contravening s 29D of the Crimes Act) and two years six months on the second count (of contravening s 134.2(1) of the Code) to commence six months after the commencement of the sentence for the first count. The effect of those sentences was that Mr Jones was to be imprisoned for three years. A recognizance release order was made to take effect after 18 months' imprisonment. No order was made by the Court of Criminal Appeal with respect to the sentence of 18 months' imprisonment imposed on Mr Jones for money laundering. The Court of Criminal Appeal expressed2 the view that the facts alleged to found the money laundering offence were all facts necessary to establish the other offences with which Mr Jones was charged, and that3 to charge the money laundering offence raised "serious issues relating to double jeopardy". The correctness of that view was not in issue in this Court and had not been in issue in the Court of Criminal Appeal. It would be wrong to express any view about it in these reasons. What is presently relevant is that, on one view of the matter, the fact that the Court of Criminal Appeal made no order with respect to the sentence imposed for money laundering left intact the recognizance release order made at first instance in respect of that sentence. 1 R v Jones; R v Hili (2010) 76 ATR 249. On 3 September 2010, after the applications for special leave had been filed, the Court of Criminal Appeal published supplementary reasons for judgment correcting two slips in its original reasons: R v Jones; R v Hili (No 2) (2010) 242 FLR 64. The supplementary reasons need not be examined in any detail. (2010) 76 ATR 249 at [17]. (2010) 76 ATR 249 at [18]. Crennan Bell Applications to this Court The applicants seek special leave to appeal against the sentences imposed by the Court of Criminal Appeal. That application was referred for argument, as on appeal, before the whole Court. The applicants sought to argue three questions. First, is there, or should there be, "a norm or starting point, expressed as a percentage" for the period of imprisonment that a federal offender should actually serve in prison before release on a recognizance release order? Second, did the Court of Criminal Appeal give adequate reasons for its conclusion that the sentences imposed at first instance were manifestly inadequate? Third, did the orders made by the Court of Criminal Appeal leave intact the recognizance release order made at first instance in respect of the sentence imposed on Mr Jones for money laundering? The first question should be answered "no". There neither is, nor should be, a judicially determined norm or starting point (whether expressed as a percentage of the head sentence, or otherwise) for the period of imprisonment that a federal offender should actually serve in prison before release on a recognizance release order. As to the second question, concerning adequacy of reasons, the Court of Criminal Appeal was right to conclude that the sentences imposed at first instance were manifestly inadequate. There is no reason to doubt that the sentences ordered by the Court of Criminal Appeal were within the range of sentences that could properly be imposed on the applicants following a successful prosecution appeal. The reasons given by the Court of Criminal Appeal for arriving at its orders did not state the relevant principles in a way that should be adopted, but sufficiently revealed why the sentences imposed were manifestly inadequate. The applicants did not demonstrate that, if proper principles had been applied, any lesser sentence should have been passed by the Court of Criminal Appeal on either applicant. As to the third question, if, as the applicants submitted, the orders made by the Court of Criminal Appeal left intact the recognizance release order made at first instance in respect of the charge of money laundering preferred against Mr Jones, this Court should not deal with the issue. No party submitted that the alleged error (if it was made) could not be corrected by the Court of Criminal Appeal on application by the Attorney-General, the Director of Public Crennan Bell Prosecutions or Mr Jones4. No application having been made to the Court of Criminal Appeal to correct any alleged deficiency in the recognizance release order it made with respect to Mr Jones, this Court should not now deal with that aspect of the matter. Special leave to appeal to raise the third question should be refused. Special leave to appeal should be granted in respect of the remaining grounds of appeal, but each appeal dismissed. The structure of these reasons It will be convenient to deal with the issues that are raised in relation to the first question ("norm" or starting point) and the second question (sufficiency of reasons) by examining relevant provisions of the Crimes Act that deal with the sentencing, imprisonment and release of federal offenders, next noticing some aspects of the reasons of the Court of Criminal Appeal, and then dealing with the questions of "norm" or starting point and sufficiency of reasons in that order. The question of "norm" or starting point raises questions about consistency in sentencing federal offenders. It will therefore be necessary to examine what is meant by "consistency", and to consider the means by which consistency is achieved. These reasons will show that the consistency that is sought is consistency in the application of the relevant legal principles, not some numerical or mathematical equivalence. Consistency in sentencing federal offenders is achieved by the proper application of the relevant statutory 4 Section 19AH(1) of the Crimes Act 1914 (Cth) ("the Crimes Act") provides, so far as presently relevant: "Where a court fails ... to make, or properly to make, a recognizance release order, under this Act: that failure does not affect the validity of any sentence imposed on a person; and the court must, at any the Attorney-General, the Director of Public Prosecutions or the person, by order, set aside any ... recognizance release order that was not properly ... made and ... make a recognizance release order under this Act." time, on application by Crennan Bell provisions, having proper regard not just to what has been done in other cases but why it was done, and by the work of the intermediate courts of appeal. Reference to the proper application of the relevant statutory provisions directs attention to a fundamental point that is the starting place for any consideration of the issues in these applications. A fundamental starting point For the most part, the relevant statutory provisions that were to be applied in sentencing the applicants are to be found in Pt IB of the Crimes Act. Of their own force the laws of the States with respect to the sentencing of offenders could have no operation with respect to the sentencing of offenders against laws of the Commonwealth5. Any relevant operation is by reason of a federal law which "picks up" State law. By operation of s 68 of the Judiciary Act 1903 (Cth) ("the Judiciary Act"), some State and Territory laws in relation to the sentencing of offenders are picked up and applied when a court, exercising federal jurisdiction conferred by s 68, sentences a federal offender6. But, to the extent to which Pt IB of the Crimes Act otherwise provides, State and Territory laws in relation to the sentencing of offenders are not picked up. As explained in Putland v The Queen7, s 68(1) of the Judiciary Act is "to be read in the sense it would have if, as a matter of express statement rather than implication, there was a qualification for provision otherwise made from time to time by the laws of the Commonwealth". Of most immediate relevance to the first of the questions that is to be considered in these applications (the question of "norm" or starting point) it is to be observed that State and Territory provisions relating to the fixing of the period an offender must serve in prison, before being released, or eligible for release, are not picked up by s 68(1). Division 4 of Pt IB of the Crimes Act, concerning the 5 Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 at 352 [35]; [1999] HCA 9; Solomons v District Court (NSW) (2002) 211 CLR 119 at 134 [21]; [2002] HCA 6 Putland v The Queen (2004) 218 CLR 174; [2004] HCA 8. (2004) 218 CLR 174 at 189 [41]. Crennan Bell fixing of non-parole periods and the making of recognizance release orders with respect to federal offenders, makes exhaustive provision for the subject with which it deals. Because it makes exhaustive provision for that subject, State or Territory laws relating to the fixing of non-parole periods are not picked up by, and therefore are not applied by, s 68(1) of the Judiciary Act. Part IB of the Crimes Act Division 2 of Pt IB of the Crimes Act sets out general sentencing principles that are to be applied in sentencing federal offenders. Division 1 provides definitions of terms used in the Part. Chief among the principles stated in Div 2 is that provided by s 16A(1): that "[i]n determining the sentence to be passed, or the order to be made, in respect of any person for a federal offence, a court must impose a sentence or make an order that is of a severity appropriate in all the circumstances of the offence". Section 16A(2) prescribes a list of matters that a sentencing court must take into account in determining the sentence to be passed or the order to be made, if those matters are relevant and known to the court. Section 16A(2) recognises that there may be other matters which may or must be taken into account. As noted in Johnson v The Queen8, s 16A of the Crimes Act, on its proper construction, accommodates the application of common law principles of sentencing, such as the principle of "totality" discussed in Mill v The Queen9. Section 16A accommodates the application of that and some other judicially developed general sentencing principles because those principles give relevant content to the statutory expression "of a severity appropriate in all the circumstances of the offence" used in s 16A(1), as well as some of the expressions used in s 16A(2), such as "the need to ensure that the person is adequately punished for the offence"10. But s 16A does not permit the making of (2004) 78 ALJR 616 at 622 [15] per Gummow, Callinan and Heydon JJ; 205 ALR 346 at 353; [2004] HCA 15. Cf the express provisions considered in Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd (2003) 216 CLR 161 at 168-169 [15]-[16], 178 [54], 205 [134]; [2003] HCA 49. (1988) 166 CLR 59; [1988] HCA 70. 10 s 16A(2)(k). Crennan Bell generalisations across all forms of federal offence about how individual sentences are to be fixed. To attempt such a generalisation would depart from the injunction that the sentencing court "must impose a sentence or make an order that is of a severity appropriate in all the circumstances of the offence" [scil. the particular offence for which a sentence is to be imposed]. Division 4 of Pt IB (ss 19AB-19AK) of the Crimes Act governs the fixing of non-parole periods and the making of recognizance release orders. A recognizance release order is defined in s 16 of the Crimes Act as an order made under s 20(1)(b). Section 20(1)(b) enables a court, before which a person is convicted of one or more federal offences, to sentence the person to imprisonment in respect of the offence, or each offence, "but direct, by order, that the person be released, upon giving security of the kind referred to in [s 20(1)(a)] either forthwith or after he or she has served a specified period of imprisonment in respect of that offence or those offences that is calculated in accordance with [s 19AF(1)]". As is apparent from the phrase "either forthwith or after he or she has served a specified period of imprisonment", s 20(1)(b) permits a sentencing court to make a recognizance release order that will take effect at any time within the period of the sentence imposed: from the time at which the sentence is imposed, to a very short time before it expires. Whatever time the recognizance release order takes effect, s 19AF requires that the sentencing court must fix the pre-release period (the period to be served before being eligible for release on giving security) so that it ends not later than the end of the sentence, as reduced by any remissions or reductions under s 19AA. (The remissions and reductions picked up by s 19AA are remissions or reductions provided for by a law of a State or Territory in respect of State or Territory sentences.) Subject to s 19AB(3), if a court imposes a federal sentence or federal sentences that in aggregate exceed three years (and the person is not already serving or subject to a federal sentence), the court must11 either fix a single non-parole period in respect of that sentence or those sentences, or make a recognizance release order. Section 19AB(3) permits a court to decline to fix a non-parole period or make a recognizance release order "if, having regard to the nature and circumstances of the offence or offences concerned and to the antecedents of the person, the court is satisfied that neither is appropriate". Subject to s 19AC(3) and (4), if a court imposes a federal sentence or federal 11 Crimes Act, s 19AB(1). Crennan Bell sentences that in aggregate do not exceed three years (and the person is not already serving or subject to a federal sentence) the court must12 make a recognizance release order and must not fix a non-parole period. The qualification provided by s 19AC(3) relates to sentences that, in aggregate, do not exceed 6 months. The qualification provided by s 19AC(4) is of the same kind as is made by s 19AB(3): the sentencing court need not make a recognizance release order if satisfied it is not appropriate to do so. The general provisions made by ss 19AB and 19AC (as well as certain other provisions of the Crimes Act) have effect subject to s 19AG13. That section provides, in effect, that for certain specified offences (treachery, terrorism offences, and offences against Divs 80 or 91 of the Code, which deal with treason, sedition and offences relating to espionage and similar activities) a court must fix a single non-parole period of at least three-quarters of the sentence for that offence. But, as noted earlier, the combined effect of ss 20(1)(b) and 19AC was that, in the present cases, the statute made no provision fixing any relationship between the head sentence and a recognizance release order. On the contrary, the sentencing court had power to fix the recognizance release orders to take effect at any time during the period of the head sentences. The reasons of the Court of Criminal Appeal The reasons of the Court of Criminal Appeal were given by Rothman J. The other members of the Court agreed with those reasons. The reasons made no reference to the provisions of Pt IB of the Crimes Act. The failure to do so led the Court to state applicable principles in a way which, at the very least, is apt to mislead. The Court of Criminal Appeal noted14 the submission put by the prosecution that there was an "appropriate ratio between a non-parole period and the head sentence", and that "the non-parole period should be between 60% and 66% of the total sentence". In written submissions to the Court of Criminal Appeal, the prosecution had put forward those propositions in support of the 12 s 19AC(1). 13 s 19AG(5). 14 (2010) 76 ATR 249 at [31]. Crennan Bell general proposition that "an important principle to be observed is consistency in sentencing of Commonwealth offenders". A large part of the reasons given by the Court of Criminal Appeal was directed to responding to the submission that there is, or should be, some normal ratio between the time to be served in custody by a federal offender and the length of the head sentence imposed. The Court of Criminal Appeal noted that in R v Viana15, Meagher JA had said: "The principles of law applicable in this area have been laid down by this Court in Bernier v The Queen16. There is in fact no statute which requires the non-parole period to bear any particular proportion in relation to the head sentence, nor is there any mandatory precedent in this Court which requires a fixed sentence. The most that can be said is that this Court has usually in cases of this sort, thought the proportion ought to be somewhere between 60 and 66 per cent. That is not to say that higher percentages cannot stand." The Court of Criminal Appeal also noted17 what had been said by Atkinson J, for the Court of Appeal of the Supreme Court of Queensland, in R v CAK & CAL; Ex parte Commonwealth DPP18: "The norm for non-parole periods and periods required to be served before a recognizance release order for Commonwealth offences is generally considered to be after the offender has served 60 to 66 per cent of the head sentence. The precise figure may be outside this range as it is a matter of judicial discretion and is not necessarily capable of precise mathematical calculation, but that is the usual percentage of the sentence. A sentence that was well outside that range would have to have most unusual factors to justify it. In this case taking into account the offenders' early pleas of guilty, by way of ex officio indictment, the past co-operation by the respondents, the payment of the loss sustained to the 15 [2001] NSWCCA 171 at [3]. 16 (1998) 102 A Crim R 44. 17 (2010) 76 ATR 249 at [36]. 18 [2009] QCA 23 at [18]. Crennan Bell Commonwealth by the respondents and their apparent rehabilitation, the appropriate period before a recognizance release order was appropriate would have been towards the lower end of that range in the region of 60 per cent or after serving 21 and a half months imprisonment." (emphasis added, footnotes omitted) The Court of Criminal Appeal quoted extensively from the decision of the Queensland Court of Appeal in R v Ruha, Ruha & Harris; Ex parte Commonwealth DPP19, a decision given after CAK & CAL. The conclusion that the Court of Criminal Appeal drew from Ruha was expressed20 in the following terms: "In my view, the Queensland Court of Appeal have, with great respect, accurately recounted the principles applied by this Court, namely, that the 'norm' for a period of mandatory imprisonment under the Commonwealth legislation is between 60 and 66%, which figure will be affected by special circumstances applicable to a particular offender." (emphasis added) Despite the repeated citation of references to there being a "norm" for the relationship between the term to be served and the head sentence imposed, of between 60 and 66 per cent, the Court of Criminal Appeal, when re-sentencing the applicants, fixed a recognizance release order in respect of each of the applicants which was 50 per cent of the head sentence imposed. The Court of Criminal Appeal did that on the footing21 that there were grounds upon which the sentencing judge "could find that there are special circumstances that warrant fixing [the period of time to be served in custody] as low as 50% (but no lower)", and that the Court of Criminal Appeal should continue the sentencing judge's approach of fixing a "lower than usual" proportion of the head sentences as the term to be served in custody. The special circumstances were said22 to include "that this is the first time these offenders will be in prison; the good prospects of rehabilitation; and the necessity to ensure assistance in assimilating back into the community and dealing with their past alcohol issues". 19 [2010] QCA 10. 20 (2010) 76 ATR 249 at [39]. 21 (2010) 76 ATR 249 at [44]; see also (2010) 242 FLR 64 at [56]-[64]. 22 (2010) 76 ATR 249 at [44]; see also (2010) 242 FLR 64 at [60]. Crennan Bell How do the orders made and reasons given by the Court of Criminal Appeal accord with Pt IB of the Crimes Act? It is best to approach that issue by first considering the utility of references to a "norm". A "norm"? 'norm' for a period of mandatory The proposition stated23 by the Court of Criminal Appeal in this matter: the "that the Commonwealth legislation is between 60 and 66%, which figure will be affected by special circumstances applicable to a particular offender" should not be accepted. Its error is revealed by consideration of two points: the first point is a general proposition about references to a "norm"; the second comprises a set of more specific propositions drawn from what was said by the Queensland Court of Appeal in Ruha. imprisonment under First, any reference to a "norm" for non-parole periods for federal offences is, at the very least, apt to mislead. Reference to a "norm" is ambiguous. It does not reveal whether the proposition is prescriptive or descriptive. That is, is the "norm" that is identified a statement of what ought to be, or is it an observation of what has been done in past cases? If it is the former, what is its statutory root? As the earlier description of the applicable statutory provisions shows, there is none. Is it a proposition of universal application, or are there exceptions? Apparently there are exceptions: in "special circumstances". What are "special circumstances"? What is the source of these exceptions? None was identified. If reference to a "norm" is intended as a compendious description of what has been done in other cases, what are those other cases? Why are they useful comparators? Is the historical description of what has been done intended to guide what should be done thereafter? What is the principle that will tell a sentencing judge when or how the "norm" should be applied? Even if the ambiguities inherent in references to a "norm" were to be resolved, references to a "norm" will necessarily mislead if they distract attention from the applicable statutory provisions: Pt IB of the Crimes Act. They will mislead if they suggest that the same kind of sentencing outcome will generally be expected in the sentencing of any federal offender. That is, they will mislead if they are read as saying that the same proportionate relationship should (or 23 (2010) 76 ATR 249 at [39]. Crennan Bell should normally) exist, between the time that is to be served in prison and the length of the head sentence imposed, in relation to all federal offences, no matter whether the offender has defrauded the Commonwealth, has been knowingly concerned in the importation of prohibited imports, or has committed some other federal offence. They will mislead if they suggest that matters such as the absence of prior convictions, or the willingness to co-operate with authorities, can have no effect on fixing a non-parole period, or time to be served before a recognizance release order takes effect, greater than a stated small percentage of the head sentence. They will mislead if they suggest that the offender must demonstrate some special circumstance to warrant departure from a set, mathematically calculated, relationship between the time to be served in custody and the head sentence. In Ruha, the Queensland Court of Appeal went to some lengths24 to emphasise the cardinal importance of beginning consideration of the sentencing of any federal offender by examining the applicable statutory provisions, particularly Pt IB of the Crimes Act. The Court of Appeal summarised25 the effect of the relevant provisions of the Crimes Act in three propositions, but neither the summary, nor any of the individual propositions is, or was intended to serve as, a substitute for the statutory language. The Court of Appeal in Ruha examined26 what considerations bear upon fixing the length of a pre-release period under a recognizance release order. As the Court of Appeal rightly said27, ss 16A(1) and (2) "make it plain that all of the circumstances, including the matters in the non-inclusive list in s 16A(2), must be taken into account in making recognizance release orders just as they must be taken into account in imposing a sentence of imprisonment". In determining what recognizance release order is to be made, s 16A(1) requires the sentencing court to "make an order that is of a severity appropriate in all the circumstances of the offence". What is the "severity appropriate" is determined having regard 24 [2010] QCA 10 at [32]-[43]. 25 [2010] QCA 10 at [44]. 26 [2010] QCA 10 at [45]-[55]. 27 [2010] QCA 10 at [45]. Crennan Bell to the general principles identified by this Court in Power v The Queen28, Deakin v The Queen29 and Bugmy v The Queen30. In the present cases, one consideration critical to the making of recognizance release orders was the determination of what was the period of imprisonment that justice required that each offender must serve in custody. And as the Queensland Court of Appeal pointed out in Ruha31, again correctly, "the necessary deterrent and punitive effects of sentences for serious tax fraud must be reflected both in the head sentence and also in any provision for earlier release from custody". The Queensland Court of Appeal was right to conclude, as it did32, that: "because the relevant factors and the relative differences in the weight to be afforded to each factor in the different aspects of the overall sentencing process may differ according to infinitely variable circumstances, there 'mechanistic or formulaic'33 approach which requires can be no sentencing judges to ensure that the proportion which the pre-release period bears to the sentence of imprisonment must or must usually fall within a range which is substantially narrower than the whole period of the imprisonment, which is the range the statute expressly contemplates for recognizance release orders. The proportions commonly encountered in the decided cases should themselves be the results of application of conventional sentencing principles to the particular circumstances of each case: the appellant's argument inverts that proper approach by requiring 28 (1974) 131 CLR 623; [1974] HCA 26. 29 (1984) 58 ALJR 367; 54 ALR 765; [1984] HCA 31. 30 (1990) 169 CLR 525; [1990] HCA 18. See also Inge v The Queen (1999) 199 CLR 295; [1999] HCA 55. 31 [2010] QCA 10 at [45] (footnote omitted). 32 [2010] QCA 10 at [47]. 33 See R v Harkness [2001] VSCA 87 per Callaway JA, quoting from his Honour's judgment in R v Pope (2000) 112 A Crim R 588 at 597 [28]. Crennan Bell that the sentence in a particular case be substantially dictated by a pre-determined range unless there are unusual factors." (emphasis added) The same point had been made 20 years earlier by Hunt J, at first instance in the Supreme Court of New South Wales in R v Paull34. His Honour said that "the application of set ratios in fixing non-parole periods necessarily masks the consideration which must be given to the individual facts of a particular case". And the point was repeated by the Court of Criminal Appeal in Bernier35, and in Viana36, and was later made by the Court of Appeal of the Supreme Court of Western Australia in Bertilone37. These are reasons enough to conclude that there neither is, nor should be, a judicially determined norm or starting point (whether expressed as a percentage of the head sentence, or otherwise) for the period of imprisonment that a federal offender should actually serve in prison before release on a recognizance release order. More particularly, these are reasons enough to conclude that it is wrong to say, as the Court of Criminal Appeal did38, "that the 'norm' for a period of mandatory imprisonment under the Commonwealth legislation is between 60 and 66%, which figure will be affected by special circumstances applicable to a particular offender". It is wrong to begin from some assumed starting point and then seek to identify "special circumstances". Rather, a sentencing judge should determine the length of sentence to be served before a recognizance release order takes effect by reference to, and application of, the principles identified by this Court in Power, Deakin and Bugmy. While this deals with the first question the applicants sought to argue in this Court, it is important to go on to consider the more general question of consistency in sentencing, upon which the prosecution based its arguments in favour of a mathematical approach to fixing the period to be served in custody for a federal offence. 34 (1990) 20 NSWLR 427 at 435 per Hunt J. 35 (1998) 102 A Crim R 44 at 49. 36 [2001] NSWCCA 171 at [3]. 37 (2009) 231 FLR 383 at 392 [41]. 38 (2010) 76 ATR 249 at [39]. Crennan Bell Consistency in federal sentencing The mathematical approach to fixing the period to be served in custody that was urged in the Court of Criminal Appeal (and maintained on the applications to this Court) was advanced as a means of ensuring consistency in the sentencing of federal offenders. How is consistency in federal sentencing to be achieved? As Gleeson CJ pointed out, in Wong v The Queen39: "All discretionary decision-making carries with it the probability of some degree of inconsistency. But there are limits beyond which such inconsistency itself constitutes a form of injustice. The outcome of discretionary decision-making can never be uniform, but it ought to depend as little as possible upon the identity of the judge who happens to hear the case. Like cases should be treated in like manner. The administration of criminal justice works as a system; not merely as a multiplicity of unconnected single instances. It should be systematically fair, and that involves, amongst other things, reasonable consistency." (emphasis added) Consistency is not demonstrated by, and does not require, numerical equivalence. Presentation of the sentences that have been passed on federal offenders in numerical tables, bar charts or graphs is not useful to a sentencing judge. It is not useful because referring only to the lengths of sentences passed says nothing about why sentences were fixed as they were. Presentation in any of these forms suggests, wrongly, that the task of a sentencing judge is to interpolate the result of the instant case on a graph that depicts the available outcomes. But not only is the number of federal offenders sentenced each year very small, the offences for which they are sentenced, the circumstances attending their offending, and their personal circumstances are so varied that it is not possible to make any useful statistical analysis or graphical depiction of the results. The consistency that is sought is consistency in the application of the relevant legal principles. And that requires consistency in the application of 39 (2001) 207 CLR 584 at 591 [6]; [2001] HCA 64. Crennan Bell Pt IB of the Crimes Act. When it is said that the search is for "reasonable consistency", what is sought is the treatment of like cases alike, and different cases differently. Consistency of that kind is not capable of mathematical expression. It is not capable of expression in tabular form. That is why this Court held40 in Wong that guidelines that the New South Wales Court of Criminal Appeal had determined should be used in sentencing those knowingly concerned in the importation of narcotics were inconsistent with s 16A of the Crimes Act. Those guidelines had made the weight of the narcotic the chief factor determining the sentence to be imposed, thus distracting attention from the several considerations set out in the non-exhaustive list of matters prescribed by s 16A(2) as matters "the court must take into account" in fixing a sentence, if those matters are relevant and known to the Court. The first and paramount means of achieving consistency in federal sentencing is to apply the relevant statutory provisions. And that requires the application of those provisions without being distracted or influenced by other and different provisions that would be engaged if the offender concerned were not a federal offender. As was explained in Putland41, Pt IB of the Crimes Act is not "an exhaustive statement of the will of the Parliament with respect to sentencing for federal offences". As noted earlier, there are some powers given by State or Territory law in relation to the sentencing of offenders that are picked up and applied by s 68(1) of the Judiciary Act when a court, exercising federal jurisdiction, sentences a federal offender. So, for example, in Putland, the Court held that s 68(1) picked up a provision of Northern Territory legislation relating to the imposition of an aggregate term of imprisonment. In addition, there are respects in which Pt IB of the Crimes Act itself refers to and picks up State and Territory legislation affecting service of a sentence of imprisonment. Those provisions of the Crimes Act include: s 16E concerning the commencement of sentences; s 18(2) concerning imprisonment in a particular kind or class of prison; s 19A concerning detention of federal offenders in State or Territory prisons; s 19AA concerning remissions and 40 (2001) 207 CLR 584 at 608 [65], 612-613 [78], 616 [87] per Gaudron, Gummow and Hayne JJ, 632 [131] per Kirby J. 41 (2004) 218 CLR 174 at 193 [53]. Crennan Bell reductions of sentences; and s 19AZD concerning leave of absence for and pre-release of prisoners. But Div 4 of Pt IB (which deals with the fixing of non-parole periods and the making of recognizance release orders) does not expressly engage any State or Territory law which prescribes how non-parole periods are to be fixed in sentencing under State or Territory law. And, as was pointed out in Putland42, the provisions of Div 4 of Pt IB are cast in terms that not only provide "a separate regime for fixing federal non-parole periods rather than relying on applied State or Territory legislation"43, those provisions deal exhaustively with that subject. State and Territory legislation concerning the fixing of non-parole periods has no application to the sentencing of federal offenders. Next, in seeking consistency, sentencing judges must have regard to what has been done in other cases. In the present matter, the prosecution produced detailed information, for the sentencing judge and for the Court of Criminal Appeal, about sentences that had been passed in other cases arising out of tax evasion as well as cases of customs and excise fraud and social security fraud. Care must be taken, however, in using what has been done in other cases. In Director of Public Prosecutions (Cth) v De La Rosa44, Simpson J accurately identified the proper use of information about sentences that have been passed in other cases. As her Honour pointed out45, a history of sentencing can establish a range of sentences that have in fact been imposed. That history does not establish that the range is the correct range, or that the upper or lower limits to the range are the correct upper and lower limits. As her Honour said46: "Sentencing patterns are, of course, of considerable significance in that they result from the application of the accumulated experience and wisdom of first instance judges and of appellate courts." But the range of sentences that have been imposed in the past does not fix "the boundaries within which future judges 42 (2004) 218 CLR 174 at 193 [52]. 43 Australia, House of Representatives, Crimes Legislation Amendment Bill (No 2) 1989, Explanatory Memorandum at 1. 44 [2010] NSWCCA 194 at [303]-[305]. 45 [2010] NSWCCA 194 at [303]. 46 [2010] NSWCCA 194 at [303]. Crennan Bell must, or even ought, to sentence"47. Past sentences "are no more than historical statements of what has happened in the past. They can, and should, provide guidance to sentencing judges, and to appellate courts, and stand as a yardstick against which to examine a proposed sentence"48 (emphasis added). When considering past sentences, "it is only by examination of the whole of the circumstances that have given rise to the sentence that 'unifying principles' may be discerned"49. As the plurality said in Wong50: "[R]ecording what sentences have been imposed in other cases is useful if, but only if, it is accompanied by an articulation of what are to be seen as the unifying principles which those disparate sentences may reveal. The production of bare statistics about sentences that have been passed tells the judge who is about to pass sentence on an offender very little that is useful if the sentencing judge is not also told why those sentences were fixed as they were." Consistency in federal sentencing is to be achieved through the work of the intermediate courts of appeal. As was explained in Wong51, the Court of Criminal Appeal was exercising federal jurisdiction in the present matters. That jurisdiction was invested in the Court by s 68 of the Judiciary Act. The laws of the State respecting the procedure for the hearing and determination of appeals (here an appeal by the Director of Public Prosecutions of the Commonwealth) were to apply and be applied, subject to s 68 of the Judiciary Act, so far as they were applicable. The relevant State provisions engaged by s 68 of the Judiciary Act were those of s 5D of the Criminal Appeal Act 1912 (NSW). Section 5D provides that the Attorney-General or the Director of Public Prosecutions (in each case of the State) may appeal to the Court of Criminal Appeal against any 47 [2010] NSWCCA 194 at [304]. 48 [2010] NSWCCA 194 at [304]. 49 [2010] NSWCCA 194 at [304], citing Wong v The Queen (2001) 207 CLR 584 at 50 (2001) 207 CLR 584 at 606 [59]. 51 (2001) 207 CLR 584 at 602-603 [46]-[51]. Crennan Bell sentence pronounced by the court of trial in any proceedings to which the Crown was a party, and that the Court of Criminal Appeal "may in its discretion vary the sentence and impose such sentence as to the said court may seem proper". And, as explained in Wong52, the Attorney-General of the Commonwealth (and by operation of s 9(1) of the Director of Public Prosecutions Act 1983 (Cth), the Director) may also appeal against a sentence imposed for a federal offence. In dealing with appeals against sentences passed on federal offenders, whether the appeal is brought by the offender or by the prosecution, the need for consistency of decision throughout Australia is self-evident. It is plain, of course, that intermediate courts of appeal should not depart from an interpretation placed on Commonwealth legislation by another Australian intermediate appellate court, unless convinced that that interpretation is plainly wrong53. So, too, in considering the sufficiency of sentences passed on federal offenders at first instance, intermediate appellate courts should not depart from what is decided by other Australian intermediate appellate courts, unless convinced that the decision is plainly wrong. Manifestly inadequate? The single ground of appeal advanced by the Director in each appeal to the Court of Criminal Appeal was that the sentences imposed at first instance were manifestly inadequate. That is, the error which the Director asserted that the sentencing judge had made was of the last kind mentioned in House v The King54. By asserting manifest inadequacy, the Director alleged that the result embodied in the sentencing judge's orders was "unreasonable or plainly unjust". The Director did not allege that any specific error could be identified (as would be the case if the sentencing judge were said to have acted upon wrong principle, allowed extraneous or irrelevant matters to guide or affect her, mistaken the facts 52 See Wong (2001) 207 CLR 584 at 602 [47], and the cases there cited. 53 Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485 at 492; [1993] HCA 15; Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 at 151-152 [135]; [2007] HCA 22. See also CAL No 14 Pty Ltd v Motor Accidents Insurance Board (2009) 239 CLR 390 at 411-412 [48]-[50], 417 [63]; [2009] HCA 47. 54 (1936) 55 CLR 499 at 505; [1936] HCA 40. Crennan Bell or not taken into account some material considerations). Rather, the Director asserted that it was to be inferred from the result that there was "a failure properly to exercise the discretion which the law reposes in the court of first instance"55. As was said in Dinsdale v The Queen56, "[m]anifest inadequacy of sentence, like manifest excess, is a conclusion". And, as the plurality pointed out57 in Wong, appellate intervention on the ground that a sentence is manifestly excessive or manifestly inadequate "is not justified simply because the result arrived at below is markedly different from other sentences that have been imposed in other cases". Rather, as the plurality went on to say58 in Wong, "[i]ntervention is warranted only where the difference is such that, in all the circumstances, the appellate court concludes that there must have been some misapplication of principle, even though where and how is not apparent from the statement of reasons". But, by its very nature, that is a conclusion that does not admit of lengthy exposition. And, in the present matters, the Court of Criminal Appeal, having described the circumstances of the offending and the personal circumstances of the offenders, said59 that "the sentence imposed in these matters is so far outside the range of sentences available that there must have been error". The Court of Criminal Appeal also said60 that "manifest error is fundamentally intuitive". That is not right. No doubt, as the Court went on to say61, manifest error "arises because the sentence imposed is out of the range of sentences that could have been imposed and therefore there must have been error, even though it is impossible to identify it". But what reveals manifest excess, or inadequacy, of sentence is consideration of all of the matters that are relevant to 55 House v The King (1936) 55 CLR 499 at 505. 56 (2000) 202 CLR 321 at 325 [6]; [2000] HCA 54. 57 (2001) 207 CLR 584 at 605 [58]. 58 (2001) 207 CLR 584 at 605 [58]. 59 (2010) 76 ATR 249 at [42]. 60 (2010) 76 ATR 249 at [41]. 61 (2010) 76 ATR 249 at [41]. Crennan Bell fixing the sentence. The references made by the Court of Criminal Appeal to the circumstances of the offending and the personal circumstances of each offender were, therefore, important elements in the reasons of the Court of Criminal Appeal. The applicants' submissions criticising the sufficiency of the reasons given by the Court of Criminal Appeal pointed out that the Court of Criminal Appeal identified no specific error in the sentencing judge's findings of fact or reasons. That is right, but because the only ground advanced by the Director was the ground of manifest inadequacy, it had to be assumed that the Director alleged no specific error. That the Court of Criminal Appeal identified no specific error is, therefore, unsurprising. The absence of identification of such an error does not bespeak error on the part of the Court of Criminal Appeal. The reasons given by the Court of Criminal Appeal for concluding that the sentences passed were manifestly inadequate sufficiently revealed the bases for that conclusion. In the present matters, the inadequacy of the sentences imposed at first instance was evident from consideration of all of the matters that were relevant to fixing a sentence (and making a recognizance release order) "of a severity appropriate in all the circumstances of the offence"62. The chief considerations which pointed to inadequacy in these cases were the nature of the offending, and the sentences that had been imposed in cases most closely comparable with the present. The applicants' offending was sustained over a long time. It was planned, deliberate and deceitful, requiring for its implementation the telling of many lies. The applicants acted out of personal greed. The amount of tax evaded was not small. Detection of offending of this kind is not easy. Serious tax fraud, which this was, is offending that affects the whole community. As was pointed out in Ruha63, the sentences imposed had to have both a deterrent and a punitive effect, and those effects had to be reflected in the head sentences and the recognizance release orders that were made. Of the many other cases of fraud against the Commonwealth, to which the prosecution drew attention, at first instance and on appeal to the Court of 62 Crimes Act, s 16A(1). 63 [2010] QCA 10 at [45]. Crennan Bell Criminal Appeal, only one or two were closely comparable with the offences committed by the applicants. Rightly, the prosecution gave prominence to those cases in its written submissions to the Court of Criminal Appeal. In the County Court of Victoria, Judge Wood had sentenced64 to two and a half years' imprisonment an offender who had evaded taxation of about $318,000 by what were described65 as "complex arrangements to funnel Australian earned funds offshore, under the guise of authenticity". His Honour had made a recognizance release order to take effect after 15 months' imprisonment. The offender, in that case, was a public figure. The sentencing judge found that the offender had been the subject of widespread public opprobrium for two years before he was sentenced. The offending was found to have been borne out of need, not greed. An appeal to the Court of Appeal of the Supreme Court of Victoria against the sentence was abandoned when the Court of Appeal informed counsel that consideration may be given to increasing the sentence that had been passed66. The second case to which the prosecution gave special emphasis67 concerned multiple charges of tax fraud involving just under $329,000. The offender, a tax agent, was sentenced to six years' imprisonment with a non-parole period of four and a half years. A non-parole period of four years was fixed on appeal (the fixing of four and a half years being treated as a slip on the part of the sentencing judge) but the appeal against sentence otherwise dismissed. The sentences passed on the applicants at first instance were very much lower than those passed in either of those cases. Allowing, as one must, for the different circumstances of each of the cases under consideration, the difference in sentences passed on the applicants at first instance, and those that were passed on the other offenders, is so large that the Court of Criminal Appeal was right to conclude that "there must have been some misapplication of principle [by the 64 R v Wheatley (2007) 67 ATR 531. 65 (2007) 67 ATR 531 at 542 [69]. 66 R v Wheatley unreported, 29 September 2007. 67 Ly v The Queen [2007] NSWCCA 28. Crennan Bell sentencing judge], even though where and how is not apparent from the statement of reasons"68. No separate argument was advanced by the applicants to the effect that the sentences that were passed on each applicant by the Court of Criminal Appeal were more severe than should have been passed. Having regard to the matters that have been mentioned, there is no reason to conclude that, applying proper principles, the Court of Criminal Appeal should have imposed any lesser sentence on either applicant than it did. Each applicant should have special leave to appeal, limited in each case to grounds raising the first two questions identified at the start of these reasons (grounds one to six inclusive). Each appeal should be treated as instituted and heard instanter but dismissed. 68 Wong (2001) 207 CLR 584 at 605 [58]. HEYDON J. I agree with the orders proposed by French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ, and the answers given to the three questions argued, but would adopt different reasoning in relation to the "norm" question in one respect. I agree that no relevant statute requires the non-parole period of a sentence for a federal offender to represent any particular proportion of the head sentence. Nor does any common law rule. I agree that there must be consistency of decision among sentencing judges, and among intermediate appellate courts hearing sentencing appeals, in the sense that there must be consistency in the identification of the relevant legal principles; and that to that end an intermediate appellate court should not depart from a decision of another Australian intermediate appellate court about what those legal principles are unless convinced that that decision is plainly wrong. But the same does not necessarily apply in relation to aspects of sentencing other than legal principles. A proposition asserted to be a proposition of legal principle is either right or wrong: if it is wrong, it will sometimes fall into the category of being "plainly wrong". To that statement qualifications must be made. Some time may pass before the moment arrives when the authorities have moved into a position permitting lawyers, and in particular courts, to say confidently that a proposition of legal principle β whether it be the construction of a statute or a common law rule β is right. The proposition may have developed as the result of particular choices being made as new problems to which the proposition must be applied come to attention. At least in the case of a common law principle, there will often be inherent in it seeds of future development, and some of those seeds may germinate in the medium term, the long term, or the very long term. Some authorities holding a principle to be right may later be overruled. But, subject to those qualifications, our law, including the law relating to sentencing, is characterised for the most part by principles which, at least in the short term, have a measure of certainty and predictability in being fixed and clear. That is because most judges avoid what Lord Bingham of Cornhill called "excessive innovation and adventurism"69. The less fixed and clear the principles are, the less is the system governed by the rule of law, and the closer it would go towards lacking a feature which in Hayek's opinion has been the greatest contribution to the prosperity of the West70. But a sentencing judgment does not rest only on identifying the correct legal principles. Those legal principles render some matters relevant and others into particular factual irrelevant. They sometimes require an inquiry 69 "The Rule of Law", (2007) 66 Cambridge Law Journal 67 at 71. 70 The Constitution of Liberty, (1960) at 208. circumstances. If they affect how the sentencing discretion should be exercised, being mandatory, they restrict the scope of the sentencing discretion. Thus so far as sentencing principles allocate the weight to be given to particular factors or mandate how they should be employed in relation to each other, those principles diminish the extent to which the court exercises a discretionary judgment, for those allocations and mandates would create duties, not discretions. The legal principles applicable to sentencing in our law do, however, ordinarily leave room for discretionary judgment. As Starke J said in House v The King71: "the sentence imposed upon an accused person for an offence is a matter peculiarly within the province of the judge who hears the charge: he has a discretion to exercise which is very wide, but it must be exercised judicially, according to rules of reason and justice, and not arbitrarily or capriciously or according to private opinion." This is not, however, inconsistent with the rule of law. Hayek saw one "essential point" of the rule of law as being "that the discretion left to the executive organs wielding coercive power should be reduced as much as possible."72 That does not deny the legitimacy of judicial discretion as described by Starke J. The existence of judicial discretion in sentencing has been criticised73. But the starkest alternatives β fixed sentences or fixed minimum sentences β have been in general decline for the last two centuries, and, at least in Australia, a recent revival is very minor in scope and of unproven utility. Thus although, pending resolution of the problem in this Court, a court in one jurisdiction is at liberty to reach a point of view on a question of legal principle which contradicts an earlier court in another jurisdiction if the later court thinks that the earlier is plainly wrong, and although, subject to that, it is not possible for two courts to reach contradictory views on a point of legal principle which are both correct, it is possible for two courts, each acting on an identical legal principle, making no error of fact, omitting no relevant consideration and taking into account no irrelevant consideration, to arrive at different sentences without either of them being "wrong". As McHugh, Hayne and Callinan JJ said in Pearce v The Queen74: "Sentencing is not a process that leads to a single correct answer arrived at by some process admitting of mathematical precision". The the "character, antecedents and circumstances of particular crimes and 71 (1936) 55 CLR 499 at 503; [1936] HCA 40. 72 The Road to Serfdom, (1962) at 54 (emphasis added). 73 Various arguments may be seen in Ashworth, Sentencing and Criminal Justice, 5th ed (2010) at 23-24, 41-42, 49, 52-53, 76-77, 276-277 and 417-418. 74 (1998) 194 CLR 610 at 624 [46]; [1998] HCA 57. conditions"75 of particular offenders are so various, the combinations in which they can occur are so numerous, and the relationship between these factors and the purposes which criminal sentences are to serve can be so impalpable, that the application to them of discretionary judgment permitting a range of legitimate outcomes is inevitable. Section 16A(1) of the Crimes Act 1914 (Cth) requires the court to impose a sentence of "a" severity appropriate in all the circumstances: it does not follow that only one correct sentence is possible. It is not surprising that the leading case in this Court on the power of appellate courts to intervene in discretionary judgments, House v The King, is a sentencing case. Nor is it surprising that in House v The King the Court divided appellable errors in discretionary judgments like sentencing judgments into two categories. The first was stated thus76: "If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so." The second existed where the order was unreasonable or plainly unjust77. "It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred." In the second category, appellate intervention takes place because the character of the order indicates that some underlying error within the first category has taken place, even though it is not possible to identify it. is "manifestly excessive" or "manifestly When the second category is relied on, the usual complaint is that the sentence Mere excessiveness or inadequacy will not reveal that there is an error of either an identifiable or an unidentifiable nature. The difficulty which the principles in House v The King create for appellants in sentencing appeals β whether inadequate". 75 Lowe v The Queen (1984) 154 CLR 606 at 612 per Mason J; [1984] HCA 46. 76 House v The King (1936) 55 CLR 499 at 505 per Dixon, Evatt and McTiernan JJ. 77 House v The King (1936) 55 CLR 499 at 505 per Dixon, Evatt and McTiernan JJ. defendants complaining of "manifest excessiveness" or the prosecution complaining of "manifest inadequacy" β is that they give sentencing judges "a wide measure of latitude which will be respected by appellate courts."78 But it does not follow that, when a sentencing judge in one case looks back on the reasons for judgment of an earlier sentencing judge in a similar case, the later judge should give the earlier one "a wide measure of latitude" in the sense of not departing from the outcome unless it is plainly wrong. Sentences must be reasonably consistent. But it does not follow that disparities between them may not exist. Within the boundaries of reason, and leaving aside the special instance of co-offenders, where marked disparity renders sentences vulnerable on appeal79, it cannot be said that any particular disparate sentence is necessarily wrong merely because it is disparate. Indeed, even within a single jurisdiction, one court, while bound by whatever this Court or the intermediate appellate court for that jurisdiction has held to be the correct legal principles (statutory or common law), may arrive at sentencing results in particular cases which are different from those reached by earlier courts in that jurisdiction without being open to appellate reversal or criticism for "error" merely because of those differences. Thus two courts may arrive at different sentences because the later court considers the first to have erred, not in relation to the identification of legal principle, but in relation to factual reasoning or in relation to the exercise of discretionary judgment. It is open to a later court (whether an intermediate appellate court or a trial court) to depart from the sentencing conclusion of an earlier intermediate appellate court or trial court even though the circumstances seem indistinguishable. It is open for the later court to do this simply because the later court thinks that the earlier court erred in fact: in that event the circumstances become distinguishable. It is also open for the later court to do this merely because it thinks the earlier court erred in the exercise of discretionary judgment β that is, arrived at a sentence which the later court, accepting the correctness of the legal principles stated, the facts found and the considerations taken or not taken into account by the earlier court, considers nonetheless to be too high or too low. The later court's liberty to differ from the sentencing conclusion reached by the earlier court does not exist only where it thinks the earlier court to be plainly wrong. It exists where the later court thinks the earlier court's conclusion to be merely wrong. Indeed it exists even where the later court does not think the earlier court's conclusion to be "wrong", but just disagrees with it. The liberty of the later court continues even if more than one 78 Postiglione v The Queen (1997) 189 CLR 295 at 336 per Kirby J; [1997] HCA 26. 79 Lowe v The Queen (1984) 154 CLR 606; Postiglione v The Queen (1997) 189 CLR earlier court has reached a conclusion with which the later court disagrees. Even after a court carrying out the difficult obligation of sentencing has identified the correct legal principles, found the facts correctly, taken into account all relevant considerations and excluded all irrelevant considerations, the court is left with a field in which to exercise a discretionary judgment. It is no doubt right for a sentencing court to examine what has happened in cases similar to the one under consideration. And it is no doubt reasonable for a sentencing court to behave with humility in reading the opinions of other judges in earlier cases who may be abler, better qualified, more learned, or more experienced. But in exercising its discretionary judgment, the primary duty of a sentencing court is to be true to its own perception of what degree of severity or leniency is appropriate. If the position were otherwise, a later court would be compelled to impose sentences on offenders which it thought to be too harsh or too lenient merely because earlier courts had followed that path, even though the question whether a sentence should be heavy or light is not a question of law. This would be a novel application of the doctrine of precedent. For a "sentence itself gives rise to no binding precedent. What may give rise to precedent is a statement of principles which affect how the sentencing discretion should be exercised"80. 80 Wong v The Queen (2001) 207 CLR 584 at 605 [57] per Gaudron, Gummow and Hayne JJ; [2001] HCA 64. |
HIGH COURT OF AUSTRALIA APPLICANT AND COMMISSIONER OF POLICE FOR NEW SOUTH WALES & ANOR RESPONDENTS Jarratt v Commissioner of Police for New South Wales [2005] HCA 50 8 September 2005 ORDER Special leave to appeal granted and the appeal be treated as instituted and heard instanter. Appeal allowed with costs. Set aside the orders of the Court of Appeal of the Supreme Court of New South Wales made on 11 November 2003 and in their place order that the appeal to that Court is dismissed with costs. On appeal from the Supreme Court of New South Wales Representation: M L D Einfeld QC with D R Campbell SC and R D Glasson for the applicant (instructed by Verekers) R C Kenzie QC with P Ginters for the respondents (instructed by Crown Solicitor for New South Wales) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Jarratt v Commissioner of Police for New South Wales Police β Tenure β Dismissal from office β Applicant was Deputy Commissioner of Police and a member of the senior executive service under Part 5 of the Police Act 1990 (NSW) ("the Act") β Commissioner of Police recommended to Governor that the applicant be dismissed from office pursuant to the Act β Governor dismissed applicant β Applicant afforded no hearing β Whether dismissal from office invalid as breaching requirements of natural justice. Constitutional law β Prerogatives of the Crown β Prerogative to dismiss Crown servants at pleasure β Whether implied term of contract of employment of Crown servant β Whether compatible with modern-day conditions of public service β Whether compatible with statutory regime for employment of senior police officers β Whether compatible with obligation to accord natural justice. Statutes β Construction β Provision for Governor to dismiss senior police officer "at any time" on advice of Commissioner of Police β Whether the words "at any time" import into the statute the Crown's right to dismiss Crown servants at pleasure β Whether obligation to accord natural justice implicitly excluded. Contract β Damages β Where employment contract entered into pursuant to statutory provision following appointment to office β Where dismissal from office necessarily resulted in termination of contract β Whether award of damages may be made for repudiation resulting from invalid exercise of statutory power β Relevance of statutory scheme for compensation for dismissal from office. Words and phrases β "at any time", "dismissal at pleasure". Police Act 1990 (NSW), ss 8, 11, 33-35, 39, 40, 41, 42, 43, 51, 53, 181D. GLEESON CJ. This application for special leave to appeal was referred to a Full Court and argued as on an appeal. The issues concern the application of the requirements of natural justice to the removal of Mr Jarratt ("the applicant") from the office of Deputy Commissioner, Field Operations and Development, within the Police Service of New South Wales, and the consequences of a failure to comply with those requirements. The applicant was appointed (in fact, re-appointed) to the office of Deputy Commissioner on 5 February 2000 for a term of five years. He was removed on 12 September 2001, with effect from 14 October 2001. The removal was by the Governor of New South Wales, acting under s 51 of the Police Service Act 1990 (NSW)1 ("the Act") upon a recommendation of the Commissioner (pursuant to s 51(1)(a)) submitted with the approval of the Minister for Police (pursuant to s 51(1A)). The removal was said in a media release from the Commissioner to be on the ground of "performance", by which was obviously meant non- performance. The applicant complained that he was given no opportunity to be heard on the substance of any criticisms of his performance before a recommendation was made that he be removed. Whatever room there might have been for factual argument about that matter, no such argument was advanced on behalf of the respondents in these proceedings. Rather, their case was simply that the applicant was not entitled to such an opportunity. The facts, and the history of the litigation, are set out in the reasons of McHugh, Gummow and Hayne JJ. At first instance in the Supreme Court of New South Wales, Simpson J2 held that there had been a denial of natural justice to the applicant, that his purported removal was invalid, that his discharge from the Police Service constituted a repudiation of his contract of employment, and that (after allowing for compensation that had already been paid to him) he was entitled to damages in the sum of $642,936.35. The Court of Appeal reversed the decision of Simpson J, holding that the applicant had not been entitled to a hearing by the Commissioner before recommending removal, and that his removal was valid and effective3. 1 This Act is now known as the Police Act 1990 (NSW), see Police Service Amendment (NSW Police) Act 2002 (NSW), Sched 1(3). Jarratt v Commissioner of Police for NSW (2002) 56 NSWLR 72. 3 Commissioner of Police (NSW) v Jarratt (2003) 59 NSWLR 87. Police officers The authors of Halsbury's Laws of England4 describe the history of the police force as the history of the office of constable, upon which an organised police force was later superimposed. In former times in the United Kingdom, constables, or officers under other titles, were responsible for keeping the peace. In Enever v The King5, Griffith CJ said: "At common law the office of constable or peace officer was regarded as a public office, and the holder of it as being, in some sense, a servant of the Crown. The appointment to the office was made in various ways, and often by election. In later times the mode of appointment came to be regulated for the most part by Statute, and the power of appointment was vested in specified authorities, such as municipal authorities or justices. But it never seems to have been thought that a change in the mode of appointment made any difference in the nature or duties of the office, except so far as might be enacted by the particular Statute. Again, at common law constables had large powers necessarily incident to the discharge of their functions as peace officers or conservators of the peace, amongst which perhaps the most important was the authority to arrest on suspicion of felony." The individual authority and responsibility of constables gave rise to particular legal consequences, such as the absence at common law of vicarious responsibility on the part of the body or authority appointing the constable6. The Supreme Court of Canada described the office as one of "certain offices that survive because their historical roots are still nourished by functional Crown service "at pleasure" At common law, subject to the provisions of any statute or to the terms of any valid contract, and, in Australia, subject also to the Constitution, people in the service of the Crown held their offices during the pleasure of the Crown. This was an implied term of their appointment or engagement8. This Court held 4 4th ed (Reissue), vol 36(1) at [201]-[204]. (1906) 3 CLR 969 at 975-976. 6 Enever v The King (1906) 3 CLR 969. 7 Wells v Newfoundland [1999] 3 SCR 199 at 213. Shenton v Smith [1895] AC 229 at 234-235; Fletcher v Nott (1938) 60 CLR 55 at in Fletcher v Nott9 that the rule applied to members of the police force of New South Wales. Dixon J said10: "The general rule of the common law is that the King may refuse the services of any officer of the Crown and suspend or dismiss him from his office". It is no longer appropriate to account for the rule in terms redolent of monarchical patronage11. The rule has a distinct rationale in its application to the armed services, but in its application to the public service generally it is difficult to reconcile with modern conceptions of government employment and accountability. Perhaps it could be justified, if justification be sought, by reference to the need of the executive government to retain the overall capacity to alter the size and structure of the public service, or to respond to political exigencies, without contractual inhibition12. Yet most ordinary contracts of employment cannot be made the subject of an order for specific performance, and, at common law, a wrongful dismissal is ordinarily effective to bring the employment relationship to an end, even if the employee does not accept the repudiation of the employment contract, and even though there may be a liability to pay damages to the employee13. To say that an office is held at pleasure means that whoever has the power to remove the office-holder may exercise that power at any time, and without having to provide, either to the office-holder, or to a court examining the decision to remove, any justification of the decision14. No period of notice, and no justification or cause for removal, is required by law15. No fault or incapacity of the office-holder, or other compelling circumstance, need be shown. The corollary has generally been taken to be that such an officer has no right to be heard before removal. In Ridge v Baldwin16, Lord Reid gave as the explanation (1938) 60 CLR 55. 10 (1938) 60 CLR 55 at 77. 11 Wells v Newfoundland [1999] 3 SCR 199 at 212. 12 See the differing points of view expressed in Suttling v Director-General of Education (1985) 3 NSWLR 427. 13 Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 427-428 per Brennan CJ, 14 Ridge v Baldwin [1964] AC 40 at 65-66 per Lord Reid. 15 Coutts v The Commonwealth (1985) 157 CLR 91. 16 [1964] AC 40 at 66. that, if the person with power to remove is not bound to give a reason to the office-holder, then there is nothing for the office-holder to argue about, and if a court cannot require the person to give a reason to the court, then there is no way in which the court can determine whether it would be fair to hear the officer's case before taking action. That explanation may call for further examination. Lord Reid also pointed out that, as a practical matter, when an office-holder is removed, a reason will commonly be given. The facts of the present case illustrate why that is so. The removal of a Deputy Commissioner of Police is a public event. The applicant was not removed without explanation. The public were told that the applicant's performance was unsatisfactory. This was bound to have an adverse effect on the applicant's reputation. In its nature, it is a charge that a person might wish to answer. Any answer the applicant gave would almost certainly have gone before the Minister, and the Governor, and would probably have become public. The Governor-in-Council would act on the Minister's advice, but, in the circumstances of a case such as the present, it would be wrong to assume that there could be no purpose in giving the office-holder an opportunity to be heard. Furthermore, in Malloch v Aberdeen Corporation17, Lord Wilberforce pointed out that the rigour of the "at pleasure" rule may make it all the more important, in some circumstances, for a person whose career, or pension rights, may be affected, to have an opportunity to state his or her case. His Lordship went on to say that, while courts will respect the right, for good reasons of public policy, to dismiss without assigned reasons, this should not prevent them from examining the statutory framework and the context to determine whether there is a right to be heard. Logic does not dictate that it is the necessary corollary of a power to remove an office-holder without assigning a reason that the office-holder should be denied the possibility of being heard. Of course, to conclude that the requirements of natural justice must be complied with leaves open the question of the practical content of those requirements in a given case. It is possible to imagine circumstances in which the public interest might demand peremptory removal of a senior police officer, or in which such an officer might have nothing that could possibly be said in his or her defence. In argument in Ridge v Baldwin18 (a case about a chief constable of police who was denied natural justice) some colourful examples were given: a chief constable who assaults the chairman of a watch committee; or a chief constable who is seen "drunk in the gutter". Such, however, is not the present case. The common law rule concerning service at pleasure was established long before modern developments in the law relating to natural justice, and the 17 [1971] 1 WLR 1578 at 1597; [1971] 2 All ER 1278 at 1295-1296. 18 [1964] AC 40 at 57. approach to statutory interpretation dictated by those developments19. It was also established at a time when public service was less likely to be subject to statutory and contractual regulation than at present. We are here concerned, not with the pristine common law principle, but with a statutory scheme of office-holding and employment. The Act provided the framework and context of the applicant's appointment, and determined the nature and extent of his rights. The Act is not a code. It does not exclude the common law. It is, however, one thing to say that the common law explains some features of the Act. It is a different thing to say that the Act embodies, or gives statutory effect to, common law principles without modification. Without doubt, an understanding of the common law is important for an appreciation of the statutory scheme. Nevertheless, the Act made substantial alterations to the common law. The Police Service Act It is convenient to refer to the Act in its form at the time relevant to the applicant's case. The Act is described in its long title as an Act to establish the Police Service of New South Wales, and to provide for the management of the Service and for the employment of its members. The Police Service comprises the Commissioner, members of the Police Service Senior Executive Service ("PSSES"), all other police and administrative officers employed under the Act, and temporary employees (s 5). The ranks of police officers within the service are: Commissioner; Member of the PSSES; Superintendent; Inspector; Sergeant; and Constable (s 12). The applicant fell within the second of those ranks. Subject to the direction of the Minister, the Commissioner is responsible for the management and control of the Service. His or her responsibility includes the effective, efficient and economical management of the Service (s 8). The Minister's capacity to direct the Commissioner imports the possibility of political control, and carries with it political accountability. The Minister's responsibility is to Parliament. One of the Commissioner's powers is to create, classify and grade positions within the Service (s 10). Part 4 of the Act deals with the Commissioner, who is to be appointed by the Governor on the recommendation of the Minister (s 24). Subject to the Act, the Commissioner holds office for such period, not exceeding five years, as is specified in the instrument of appointment. The term is renewable (s 26). The employment of the Commissioner is governed by a contract of employment between the Commissioner and the Minister, and a number of the later provisions 19 FAI Insurances Ltd v Winneke (1982) 151 CLR 342; Annetts v McCann (1990) 170 CLR 596. It provides the Commissioner (s 28(8)). relating to executive officers also apply to the Commissioner (s 27). The Governor may remove the Commissioner from office on the recommendation of the Minister. Such a recommendation may be made only after the Minister has given the Police Integrity Commission a reasonable opportunity to comment on the proposed recommendation (s 28). Section 28 provides the exclusive basis for removal of two substantial modifications of what would have been the position at common law. First, while the Commissioner's contract of employment is with the Minister, it is the Governor, acting on the recommendation of the Minister, who has the power of removal. This means, of course, the Governor-in-Council. Secondly, the Minister's power to make a recommendation is fettered by the need to notify the Police Integrity Commission of what is proposed and to give that Commission an opportunity to comment. The removal of a Commissioner of Police would almost certainly be accompanied by wide publicity. That practical consideration, coupled with the need to inform the Police Integrity Commission, and bring the matter before the Governor, seems to make it likely that, in most cases, a reason for a removal recommendation would exist and be made public. There is nothing in the Act that says that the Commissioner may be removed only for breach of contract or incapacity. Even so, the procedure that must be followed makes it practically certain that the Minister would seek to justify the recommendation for removal. The provisions of the Act which deal with the Commissioner are not directly relevant, but they form part of the statutory context. It would be odd if the requirements of natural justice were to apply to the removal of a Commissioner but not to the removal of a Deputy Commissioner. Part 5, which deals with the PSSES, applied to the applicant. The PSSES comprises the persons holding the positions referred to in Sched 2 of the Act. The list of positions in the Schedule begins with "Deputy Commissioner (2 positions)". It was to one of those positions that the applicant was appointed. Appointments to vacant PSSES positions are to be made by the Governor on the recommendation of the Commissioner in the case of appointments to the position of Deputy Commissioner or Assistant Commissioner, and by the Commissioner in other cases (s 36). Appointments are to be on merit (s 39). Division 4 of Pt 5 deals with the terms of employment of PSSES officers. An officer holds office for such period not exceeding five years as is specified in the officer's instrument of appointment. The terms are renewable (s 40). There is to be a contract of employment with each officer, which is to be between the officer and the Commissioner, and which governs the officer's employment (s 41). Section 41 makes two significant provisions about such contract. First, the Commissioner, in such contract, "acts for and on behalf of the Crown" (s 41(6)). Secondly, the contract does not effect the officer's appointment, nor is the officer's term of office fixed by the contract of employment (s 41(3)). The instrument of appointment specifies a period, not exceeding five years, during which the officer is to hold office (s 40). That specification is subject to the Act; it is not, however, subject to the officer's contract. The contract deals with such matters as the officer's duties, and the officer's remuneration (s 42). In respect of those matters, the contract is a source of both rights and obligations20. There is to be an annual review by the Commissioner of an officer's performance (s 43). the Commissioner in any other case. Division 6 of Pt 5 deals with the removal and retirement of PSSES officers. The position of an officer becomes vacant if the officer is removed from office under the Act (s 49). Section 51 provides that a PSSES officer may be removed from office at any time by the Governor on the recommendation of the Commissioner in the case of a Deputy Commissioner or Assistant Such a Commissioner, or by recommendation requires the approval of the Minister. Provision is made for a PSSES officer who is removed or otherwise leaves office to return to the public sector in certain circumstances. Section 53 provides for compensation to be paid to a PSSES officer who has no right to return to the public sector. The section applies to a PSSES officer who is removed from office under s 51, or who is otherwise removed from office (except for misbehaviour after due inquiry). The reference to "otherwise removed" would pick up s 181D, which is not presently relevant, and which empowers the Commissioner, by order in writing, and subject to certain conditions, to remove a police officer from the Police Service if the Commissioner does not have confidence in the police officer's suitability. Section 53(4) provides that the maximum compensation payable is an amount equal to 38 weeks' remuneration. Section 53(5) provides that a person to whom the section applies is not entitled to any other compensation for the removal from office or to any remuneration in respect of the office for any period afterwards. Following his removal, the applicant sought and obtained compensation under s 53. Nevertheless, in these proceedings the applicant's primary contention is that he was not validly removed under s 51, and it was not argued that his earlier claim for compensation under s 53 prevents him from raising that argument. This is a matter to which it will be necessary to return. Part 6 deals with non-executive officers, including commissioned officers, sergeants and constables. Commissioned officers are appointed for renewable five year terms (ss 72A, 72B). It is of marginal interest that a decision by the Commissioner not to renew such an officer's appointment can only be made on the ground of inability to meet required standards, and that provision may be made for review of such a decision (s 72C). For present purposes, the key provisions of the Act are ss 40, 41 and 51, read in the wider context of the Act as a whole. 20 See also s 46. Sections 40, 41 and 51 Section 41 establishes and defines the relationship between the statutory and the contractual aspects of the position of an officer such as the Deputy Commissioner. The employment of the officer is "governed by" a contract of employment between the officer and the Commissioner, such contract being made by the Commissioner for and on behalf of the Crown, that is, the Crown in right of the State of New South Wales. Although the contract governs the employment, and (pursuant to s 42) deals with such matters as the officer's duties and remuneration, it does not amount to an instrument of appointment, and it does not fix the officer's term of office (s 41(3)). Section 40 provides that, subject to the Act, an executive officer holds office for such period (not exceeding five years) as is specified in the officer's instrument of appointment. In the present case, the applicant was, by his instrument of appointment, to hold office for five years. That was reflected in his contract of appointment, but was not itself a term of the contract. He held office by virtue of the Act and the appointment made under the Act, and his term of office, by virtue of s 40, was five years, subject to the Act, which, for present purposes, means subject to s 51. Section 51 relevantly provides that a Deputy Commissioner may be removed from office at any time by the Governor, on the recommendation of the Commissioner submitted with the approval of the Minister. That this provision reflects, and gives partial effect to, the common law principle discussed above is not in doubt. The words "at any time" mean that, if the requirements of the statute are observed, no period of notice of termination is required. The officer's contract assumes valid appointment to, and continued holding of, office, but appointment and removal occur by force of the Act, not the contract. The power of removal given by s 51 is not qualified by reference to grounds for removal. In that respect, s 51 may be contrasted with s 181D. The grant of a power to remove a Deputy Commissioner from office at any time is, therefore, significant, not only in what is said, but also in what is not said. The validity of the removal does not depend upon the existence of any particular cause for removal, except to the extent that the statutory power must be exercised in good faith and for the purpose for which it is given. It does, however, depend upon compliance with certain procedures, involving recommendation by the Commissioner, approval by the Minister, and a decision of the Governor-in- Council. As has already been pointed out, those procedures, and the context in which they operate (removal of a Deputy Commissioner of Police before the expiry of his or her term of office), mean that it is practically certain that some cause for removal will be considered to exist, and highly likely that such cause will be made public, as happened in the present case. The issue is whether, in that statutory context, there is a legal requirement on the part of the Commissioner (the practical content of which may vary with the circumstances of particular cases) to give the Deputy Commissioner an opportunity to be heard before a recommendation goes to the Governor-in-Council. That problem is essentially one of statutory construction. The precise question to be asked is whether the exercise of the power of removal conferred by s 51 of the Act is conditioned upon the observance of the rules of natural justice21. Natural justice The form of natural justice to which the applicant says he was entitled was an opportunity to be heard by the Commissioner on the question whether he should be removed from office. His assertion that he was not given any such opportunity has not been contested in the proceedings. In consequence, it is unnecessary to examine what such an opportunity might have entailed in the circumstances. It was announced to the public that the applicant was removed because of his failure to adequately perform his duties. Because of the basis on which the applicant's claim was defended, there was no occasion for the primary judge to make any finding as to what sort of case the applicant might have been able to make out had he been given the opportunity to answer that complaint. Section 51 of the Act confers upon public officials (the Governor, acting on the recommendation of the Commissioner submitted with the consent of the Minister) a power to remove the applicant from public office, and thereby prejudice the applicant's rights and interests. In Annetts v McCann22 it was said that it can now be "taken as settled" that the rules of natural justice regulate the exercise of such a power "unless they are excluded by plain words of necessary intendment". There are no plain words of necessary intendment, in s 51 of the Act or elsewhere, that indicate that the power of removal conferred by s 51 may be exercised without giving a Deputy Commissioner a fair opportunity to be heard. What is involved is not removal in the exercise of monarchical prerogative. What is involved is a statutory power which requires certain procedures to be followed. It is conceivable that there may be cases of a valid exercise of the power for reasons, or on the basis of considerations, that are of such a nature that there would be nothing on which a Deputy Commissioner could realistically have anything to say. It is clear, however, that the power may also be exercised for reasons about which a Deputy Commissioner could have a good deal to say. The very breadth of the statutory power seems to me to be an argument for, rather than against, a conclusion that it was intended to be exercised fairly. So also is the consideration that, in practice, the power would normally be exercised for cause, even though such cause is not legally necessary. 21 Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57 at 68-69 [29]. 22 (1990) 170 CLR 596 at 598 per Mason CJ, Deane and McHugh JJ. Far from relying on plain words of necessary intendment to exclude the requirements of fairness in the exercise of the power conferred by s 51 of the Act, the respondents are driven to rely on an implication, founded upon the words "may be removed from office at any time", read in the context of the common law principle as to service of the Crown at pleasure. We are not here concerned with the monarch's "prerogative" power to dispense with the services of a subject at pleasure. We are concerned with a statutory scheme for the management of the Police Service and for the employment of its members, likely to have been intended to embody modern conceptions of public accountability. Where Parliament confers a statutory power to destroy, defeat or prejudice a person's rights, interests or legitimate expectations, Parliament is taken to intend that the power be exercised fairly and in accordance with natural justice unless it makes is an the contrary acknowledgment by the courts of Parliament's assumed respect for justice23. This principle of intention plain. interpretation In the Court of Appeal, Mason P considered that s 53, and in particular sub-ss (4) and (5), supported the conclusion that s 51 embodied the "at pleasure" principle, and excluded the requirements of natural justice. Those provisions in effect impose a cap on the entitlement to compensation of a person who is validly removed from office. Suppose that there was a purported removal under s 51 involving a failure to comply with the procedural requirements of that section because, the Commissioner's the Minister's approval recommendation was not obtained. The provisions of s 53 would not apply to such a case. They do not throw light upon the question of what is required for valid removal. for example, Simpson J was right to conclude that the power conferred by s 51 is conditioned upon observance of the requirements of natural justice and that, since there was no attempt to argue that those requirements were observed in the present case, the applicant's removal from office was invalid. Relief Questions of relief in the present case are affected by three considerations: the nature of the statutory scheme, involving aspects of both office-holding and contract; the conduct of the parties following the invalid removal; and the manner in which the case was argued before the primary judge. Like the chief constable in Ridge v Baldwin24, the applicant did not seek to be reinstated as Deputy Commissioner. He did not challenge the validity of the 23 cf Al-Kateb v Godwin (2004) 78 ALJR 1099 at 1105 [20]; 208 ALR 124 at 130. 24 See [1964] AC 40 at 81. appointment of his successor. The Act provides for only two Deputy Commissioners. The other position was at all material times filled. The applicant did not claim that the successor to his position was not entitled to be regarded as the new Deputy Commissioner. He did not continue to perform, or attempt to perform, the duties of a Deputy Commissioner. It has been noted above that, in the case of an ordinary contract of employment, a wrongful dismissal usually terminates the employment relationship, because an ordinary contract of employment is not specifically enforceable; the services of the employee cannot normally be forced upon an unwilling employer. The applicant, far from claiming that he was still Deputy Commissioner, promptly made a claim for compensation under s 53, and compensation (in the maximum sum) was assessed. In the proceedings before Simpson J, in which the applicant sought and obtained declarations that his removal was invalid and that the termination of his contract was wrongful, the applicant's claim for compensation under s 53 was treated as having been made without prejudice to his contention that his removal was invalid. Simpson J recorded that no argument was advanced that, by making an application under s 53, the applicant forfeited his right to challenge his removal. Having regard to the identity of the respondents, whose concern in the litigation has been with the larger question of legal principle, this is not surprising. Mason P thought that it would have been strongly arguable that the applicant could not approbate and reprobate but, the point not having been taken, expressed no concluded view. He agreed with Simpson J that s 53 applies only in the case of a valid removal. Having resolved the issues of statutory construction in favour of the applicant, Simpson J assessed damages for wrongful removal from office and termination of employment in an orthodox fashion. Conclusion Special leave to appeal should be granted. The appeal should be treated as heard instanter and allowed with costs. The orders of the Court of Appeal should be set aside, and in place of those orders it should be ordered that the appeal to that Court be dismissed with costs. McHugh 34 McHUGH, GUMMOW AND HAYNE JJ. On 5 February 2000, Mr J T Jarratt, whom we shall call the applicant, was appointed Deputy Commissioner within the Police Service of New South Wales ("the Police Service"). He was removed from that position on 12 September 2001. This litigation arises from that removal and the circumstances attending it. The applicant's application for special leave was adjourned for argument before the Full Court as if on an appeal. Special leave should be granted and the appeal allowed. To explain why that result should follow it is convenient to begin with some consideration of the applicable legislation governing the Police Service. The position of Deputy Commissioner The Police Act 1990 (NSW) ("the Act") repealed various statutes, the first of which was the Police Regulation Act 1899 (NSW) ("the 1899 Act"). Further reference to the 1899 Act will be made later in these reasons. The Police Service was established by s 4 of the Act and s 5 specified its composition as including the Commissioner and members of the Police Service Senior Executive Service ("the Senior Executive Service"). Part 4 of the Act (ss 24-31) provided further for the office of Commissioner. The responsibility of the Commissioner included "the effective, efficient and economical management of the functions and activities of the Police Service" (s 8(2)). Part 5 of the Act (ss 32-61) made provision for the Senior Executive Service and for two positions of Deputy Commissioner. The appointment of the applicant in 2000 was made by the Governor with the advice of the Executive Council25 and on the recommendation of the Commissioner (Mr Ryan) and with the approval of the Minister for Police. These steps were required by s 36 of the Act. The appointment of the applicant was for a term of five years, from 5 February 2000 to 4 February 2005. That was the maximum term permitted by s 40 of the Act, with an eligibility, if otherwise qualified, for re-appointment. 25 A reference in the Act to the Governor is a reference to the Governor with the advice of the Executive Council: s 14 of the Interpretation Act 1987 (NSW) ("the Interpretation Act"). McHugh The applicant had joined the Police Service in 1967 as a Probationary Constable and had held various ranks. He had first been appointed as a Deputy Commissioner in 1997 for a three year period. It is important for consideration of the issues which arise on this appeal to note immediately that the position of Deputy Commissioner was created by statute, and that the procedures for the making of the appointment by the Governor in Council were specified by statute. This also, as will appear, was true of the power of removal from that position. Thus, the present case differs from those military and civil appointments which, in the United Kingdom, have been made by or in the name of the sovereign without supporting legislation and, as it is said, under the prerogative. It will be necessary to return to this distinction. Section 41 of the Act stipulated that the applicant's employment as a Deputy Commissioner was to be governed by a contract of employment between him and the Commissioner, in which capacity the Commissioner acted "for and on behalf of the Crown" (s 41(6)). The reference to "the Crown" is to "the Crown in right of New South Wales"26 and, it would appear, to the body politic identified as the State of New South Wales27. The contract was not to exclude any provision of the Act or the Regulations thereunder (s 41(5)) and was not to provide for the applicant's appointment or term of office (s 41(3)). However, the contract might be made before or (as in this case) after the appointment (s 41(2)). The applicant's contract was in writing bearing the date 28 April 2000 ("the Contract"). Clause 4 gave as the title of the applicant's position "Deputy Commissioner, Field Operations and Development". Clauses 15-17 provided for his remuneration. The confluence between the Act and the Contract rendered apt the identification in McVicar v Commissioner for Railways (NSW)28 of an engagement of employment on terms partly statutory and partly contractual. 26 Interpretation Act, s 13(b). 27 Sue v Hill (1999) 199 CLR 462 at 498 [84]. 28 (1951) 83 CLR 521 at 528. McHugh The litigation In a proceeding instituted by the applicant in the Supreme Court of New South Wales against the Commissioner and the State of New South Wales29, Simpson J gave judgment on 5 July 2002. Her Honour made declarations to the effect that removal from office and consequent termination of the Contract were invalid, and entered the sum of $642,936.3530. In quantifying that sum, her Honour allowed for a sum received by the applicant and which had been determined as compensation by the Statutory and Other Offices Remuneration Tribunal ("the Remuneration Tribunal") under s 53 of the Act. It may be observed that the damages were awarded at a time when, but for the events that had happened, the applicant would have had several years of his term still to complete. judgment against both defendants An appeal by the defendants to the Court of Appeal (Mason P, Meagher and Santow JJA) succeeded31 and in this Court the applicant seeks reinstatement of the orders of Simpson J. The removal of the applicant More must now be said of the legislative basis for the removal of the applicant from his position as a Deputy Commissioner. The applicant was removed by steps taken in reliance upon s 51 of the Act. That section was stated (by s 51(7)) not to prevent removal from office by other means; these include s 181D. This latter provision empowered the Commissioner, by order in writing, to remove a police officer from the Police Service where the Commissioner lacks confidence in that officer but set out a procedure requiring the giving of notice to the officer with the Commissioner. to make written submissions the opportunity Section 51, on the other hand, vested the power of removal from office in the Governor in Council and conditioned the exercise of that power upon, in the applicant's case, the recommendation of the Commissioner. The giving of the 29 Section 5(1) of the Crown Proceedings Act 1988 (NSW) identified this as the proper title in a civil proceeding against the Crown in right of the State. The State was added as a party during the hearing. 30 Jarratt v Commissioner of Police for New South Wales (2002) 56 NSWLR 72. 31 Commissioner of Police (NSW) v Jarratt (2003) 59 NSWLR 87. McHugh recommendation required the approval of the Minister. As they stood at the relevant time, sub-ss (1) and (1A) of s 51 stated32: "(1) An executive officer may be removed from office at any time: the Governor on the the Commissioner, in the case of a Deputy Commissioner or Assistant Commissioner, or recommendation of by the Commissioner, in any other case. (1A) A recommendation referred to in subsection (1)(a) may not be submitted to the Governor except with the approval of the Minister." By stipulating for the recommendation of the Commissioner, s 51 is to be considered as conferring upon the Commissioner the power to make the recommendation, conditioned upon the Minister's approval33. That power was not expressly limited by the statement of the criteria for its exercise but, in accordance with the general principles explained in Klein v Domus Pty Ltd34, two considerations applied. First, regard was had to the scope and purpose of the provision as guiding the formation of a view as to the justice of the case. Here, the responsibility of the Commissioner included the effective, efficient and economical management of the functions and activities of the Police Service (s 8(2)). Secondly, a particular exercise of the power which was actuated and dominated by a reason outside the scope of the purpose of the power would be vitiated. 32 As enacted in 1990, s 51(1) provided for removal on the recommendation of the Police Board. The Board was abolished and s 51 amended by the Police Legislation Further Amendment Act 1996 (NSW). After the delivery by Simpson J of her reasons on 5 July 2002, s 51(1) was amended by the Public Sector Employment and Management Act 2002 (NSW), Sched 7.6, Item [3], by adding after "at any time" the words "for any or no reason and without notice". It is agreed that, for this appeal, the Act is to be considered in its form before that change: see s 30 of the Interpretation Act. 33 See Attorney-General (Cth) v Oates (1999) 198 CLR 162 at 171-172 [16]. 34 (1963) 109 CLR 467 at 473. McHugh Procedural fairness However, it is not upon the above limitations which the applicant founds his case. The applicant fixes upon the statement made, with ample citation of modern authority, by Mason CJ, Deane and McHugh JJ in Annetts v McCann35 to the effect that, unless excluded by plain words of necessary intendment, the conferral of power upon a public official such as the Commissioner to prejudice the rights of the applicant was attended by the rules of natural justice. No doubt the content of the hearing rule may vary from case to case36. In argument, situations of extreme urgency were postulated where neither the giving of notice to a Deputy Commissioner nor the opportunity for submissions would be appropriate. But that was not this case. On the evening of 5 September 2001, the applicant received at his house a copy of a press release issued on that day at 6.10 pm. This stated that the Commissioner had recommended the termination of the contract of the applicant "on the grounds of performance". The Governor in Council acted on 12 September. In the meantime, on 10 September, the applicant received a copy of a document signed by the Commissioner and stated to have been prepared in order to assist the consideration of a compensation determination by the Remuneration Tribunal. The evidence of the applicant, which was not tested in cross-examination, was that none of the matters respecting the adequacy of his performance described by the Commissioner in that document had been raised with him, nor had he been given any opportunity to make comments, observations or submissions on those matters. The Commissioner did not give evidence. In these circumstances, Simpson J concluded that the requirement of procedural fairness had entailed at the least that, when the Commissioner was contemplating a recommendation of removal of the applicant, the applicant should have been notified of the proposal, advised of any specific allegations against him and the content of any adverse report, and given an opportunity to respond to those allegations and any criticisms of his performance as a Deputy Commissioner. Subject to the other arguments on which the respondents resisted the appeal, there was no real dispute that, unless there had been no obligation whatever to afford procedural fairness, Simpson J had been correct. 35 (1990) 170 CLR 596 at 598. 36 See, for example, Barratt v Howard (2000) 96 FCR 428 at 451-452. McHugh Simpson J made a declaration that, by reason of the failure of the Commissioner to accord the applicant procedural fairness in making the recommendation for his removal from office, the decisions to remove him and to terminate the Contract were invalid. The invalidity of the removal from office purportedly under s 51(1) would follow because the exercise of that power by the Governor in Council was posited by s 51(1) upon a valid exercise of the anterior power of recommendation by the Commissioner. This appeal thus may be disposed of without consideration of what, if any, duty to observe procedural fairness to the applicant attended the deliberations of the Governor in Council37. Wrongful dismissal The applicant, not having been removed under s 51(1), did not cease to be an executive officer. This result otherwise would have followed from the operation of s 51(4). The effect of s 51(4) is that, where an executive officer is removed under s 51(1) and not declared by the Commissioner to be an unattached officer in the Police Service, the officer ceases to be an executive officer, unless appointed to another executive position. But the absence of a removal effective in law, of itself, said nothing as to the continued operation of the Contract whereunder the applicant was remunerated. However, the press release of 5 September 2001 spoke of the termination of the applicant's contract and the Commissioner's Chief of Staff, when writing to the Remuneration Tribunal on 7 September 2001, spoke of the termination of the applicant's employment, the inference being that this was because he was no longer capable of acting thereunder because of the removal from office. That amounted to a repudiation of the Contract. Upon the footing that the purported removal of the applicant from his statutory office was invalid, the authorities in this Court38 indicate that the refusal to allow the applicant to perform his duties for the balance of his term and receive his remuneration was without justification and amounted to, or was 37 cf FAI Insurances Ltd v Winneke (1982) 151 CLR 342. 38 Williamson v The Commonwealth (1907) 5 CLR 174; Lucy v The Commonwealth (1923) 33 CLR 229; McVicar v Commissioner for Railways (NSW) (1951) 83 CLR McHugh "analogous to"39, wrongful dismissal. The reasoning in the authorities appears sufficiently from the statement of Starke J in Lucy v The Commonwealth40: "The relation between the Crown and its officers is contractual in its nature. Service under the Crown involves, in the case of civil officers, a contract of service β peculiar in its conditions, no doubt, and in many cases subject to statutory provisions and qualifications β but still a contract41. And, if this be so, there is no difficulty in applying the general law in relation to servants who are wrongfully discharged from their service. A servant so treated can bring an action against his master for breaking his contract of service by discharging him. The measure of damages in such an action is not the wages agreed upon42, but the actual loss sustained, including, of course, compensation for any wages of which the servant was deprived by reason of his dismissal43." This reasoning indicates why, in the present case, the award of damages by Simpson J did not cut across the principle that, where there has been a denial of procedural fairness in the exercise of statutory or prerogative powers, the law does not recognise a cause of action for damages and confines the complainant to public law remedies44. In assessing damages in a case such as the present and by analogy to an action for wrongful dismissal, it may well be urged that account has to be taken that at some time in the balance of his term the applicant may have been liable for removal under procedures which did meet the requirements of the Act. However, statements of Rich J and of Starke and Dixon JJ in Geddes v Magrath45 39 Geddes v Magrath (1933) 50 CLR 520 at 534. 40 (1923) 33 CLR 229 at 253; cf Director-General of Education v Suttling (1987) 162 CLR 427 at 437-438. 41 Gould v Stuart [1896] AC 575 at 577. 42 See Emmens v Elderton (1853) 4 HLC 624 [10 ER 606]; Cutter v Powell (1795) 6 TR 320 [101 ER 573]. 43 Goodman v Pocock (1850) 15 QB 576 [117 ER 577]. 44 See the remarks of Deane J in Attorney-General (NSW) v Quin (1990) 170 CLR 1 45 (1933) 50 CLR 520 at 530-531, 533-535. McHugh appear to suggest the contrary and that the presence of a power of removal would be disregarded in assessing damages against the respondents. The respondents' case As indicated by their Notice of Appeal to the Court of Appeal, the respondents' case at trial was that, because the applicant had held a position "at pleasure", there could be no case for denial of procedural fairness by the Commissioner and no award of damages by reason of the wrongful deprivation of office. Nor did the respondents contend that the acceptance by the applicant of the compensation payment awarded by the Remuneration Tribunal represented his election between remedies or otherwise barred his claim to damages. The respondents took their stand at trial on the basis that there had been an entitlement to dismiss at pleasure and they were not to be drawn into questions of justification and damages. Any deficiency in the evidence which now may be seen as adversely affecting the respondents' interests in those matters falls at their feet. In this Court, the respondents do not contend the contrary. The Court of Appeal held that (i) the "dismissal at pleasure principle" applied; (ii) it was not displaced by the scheme of the Act and (iii) the peremptory dismissal of the applicant did not involve any invalid or unlawful act. The respondents support and the applicant challenges these holdings. It is convenient now to consider the "dismissal at pleasure principle", and then to return to the terms of the Act. Dismissal at pleasure The common law principles respecting the nature and incidents of a public office evolved before the development in the nineteenth century, both in the United Kingdom and in those colonies with representative and responsible government, of a modern system of public administration. To that new structure some of the common law principles were readily adapted; others such as that supporting dismissal at pleasure were less so46. 46 Selway, The Constitution of South Australia, (1997) at 155. McHugh In Marks v The Commonwealth47, Windeyer J, in the course of a judgment much informed by a knowledge of English constitutional history, remarked48: "Servants of the Crown, civil and military, are by the common law employed only during the pleasure of the Crown. Except when modified by statute, that rule has an overriding place in all engagements to serve the Crown. All offices under the Crown are so held at common law, except some ancient offices of inheritance and certain offices created by patent with a tenure for life or during good behaviour, as in the case of judges of the superior courts. ... Its consequence is that the Crown may dismiss its servants at will, without notice at any time." Writing in England in 1820, Chitty had given as an instance of a high situation held only during the King's pleasure the ancient office of Lord "Offices may be granted at will, of which there are many instances; and it is a general common law rule, upon which, however, various exceptions have been engrafted by statute, that the King may terminate at pleasure the authority of officers employed by his Majesty." The significance of the references in these passages to the operation of statute is a matter to which it will be necessary to return after making the following observations. First, the general common law rule of which Chitty spoke developed at a time and in a political system very different from that obtaining in Australia. Some of the offices spoken of above carried the right to exact fees, retained by the office-holder; others (including until 1870 military commissions50) were items of property which might be bought and sold. In Marks v The 47 (1964) 111 CLR 549. 48 (1964) 111 CLR 549 at 586. See, further, Coutts v The Commonwealth (1985) 157 CLR 91 at 99, 120. 49 Chitty, A Treatise on the Law of the Prerogatives of the Crown, (1820), ch 7, sec 1 at 82 (footnote omitted). 50 Marks v The Commonwealth (1964) 111 CLR 549 at 568-569. 51 (1964) 111 CLR 549 at 568. McHugh "The notion of an office as a form of property in which a man can have an estate is foreign to present-day ideas. But it is, I think, the key to an understanding of the legal meanings of resigning an office and of holding an office at pleasure." Secondly, the proposition that an office-holder under the Crown might be dismissed in any case at will and without cause previously was supported in the United Kingdom by the view, since discredited there52, that the manner of exercise of non-statutory powers of the executive government was never susceptible of judicial review. In Australia, as Windeyer J explained in Marks53, the constitutional structure after federation rendered inapplicable any such general proposition. Thirdly, the ancient office of constable or peace officer was one with peculiar characteristics. Appointment was made in various ways, including by election; thereafter, the power of appointment (and removal) was vested by statute in specified authorities, such as municipal bodies54. The Chief Constable of Brighton, the appellant in Ridge v Baldwin55 was placed in that position by operation of the Municipal Corporations Act 1882 (UK)56. Further, whilst, as Griffith CJ put it in Enever v The King57, the holder of an office of constable or peace officer was regarded by the common law "as being, in some sense, a servant of the Crown", the responsibility for unjustifiable acts of such an officer did not extend to the appointor to the office. Nor was an action per quod servitium amisit available to the Crown against a third party. In Attorney- General for New South Wales v Perpetual Trustee Company (Ltd)58, the Privy Council held that no action per quod lay for the loss of services of a police officer appointed in New South Wales under the 1899 Act. 52 Council of Civil Service Unions v Minister for the Civil Service [1985] AC 374; M v Home Office [1994] 1 AC 377. 53 (1964) 111 CLR 549 at 564-565. 54 See Enever v The King (1906) 3 CLR 969 at 975. 56 [1964] AC 40 at 64. 57 (1906) 3 CLR 969 at 975. 58 (1955) 92 CLR 113; [1955] AC 457. McHugh Fourthly, the rationale for the "at pleasure principle", namely, as Lord Diplock put it59: "the theory that those by whom the administration of the realm is carried on do so as personal servants of the monarch who can dismiss them at will, because the King can do no wrong" cannot now, if it ever did, adequately support that "principle" in a contemporary setting of public administration. Nor can the theory that the executive government should not be hampered by contract "in matters which concern the welfare of the State"60. Hence the well-based criticisms by McHugh JA in Suttling v Director-General of Education61. Finally, the retention of the prerogative as the source of obligation for those in military and civil service persisted in the United Kingdom well after statute had taken the field in Australia. With respect to the army, this was still true of the United Kingdom at the time Marks was decided in this Court62. It appears that for the most part the regulations which govern the Civil Service in the United Kingdom still have no statutory basis and are made under the prerogative63. The public service of the Australian colonies, then of the Commonwealth and the States, developed quite differently. 59 Council of Civil Service Unions v Minister for the Civil Service [1985] AC 374 at 60 Fletcher v Nott (1938) 60 CLR 55 at 67. See, however, as to the contractual fettering of statutory discretions, Ansett Transport Industries (Operations) Pty Ltd v The Commonwealth (1977) 139 CLR 54 at 74-76; Rose, "The Government and Contract", in Finn (ed), Essays on Contract, (1987) 233 at 242-244. 61 (1985) 3 NSWLR 427 at 444-447. See also the statements by the Supreme Court of Canada in Wells v Newfoundland [1999] 3 SCR 199 at 215-219. 62 (1964) 111 CLR 549 at 564-565. See now Halsbury's Laws of England, 4th ed Reissue, vol 8(2), §§883-885. 63 Council of Civil Service Unions v Minister for the Civil Service [1985] AC 374 at 397; Halsbury's Laws of England, 4th ed Reissue, vol 8(2), Β§549. McHugh Professor Finn has described the processes whereby the public service in the colonies was marked off from its British counterpart so that in Australia, as confirmed by the Privy Council in Gould v Stuart64, the position was that65: "the Crownβpublic servant relationship was a contractual one; that the relevant Act and its regulations prescribed the conditions on which the contract was to be made; and that the contract and thus the Act founding it, were enforceable in the courts". The remarks of Starke J in Lucy v The Commonwealth66 set out earlier in these reasons display that understanding of the position in this country. In New South Wales, s 37 of the Constitution Act 1855 (Imp) vested in the Governor in Council "the appointment to all public offices under the Government of the colony hereafter to become vacant or to be created"67. Thereafter, the Civil Service Act 1884 (NSW) was said by Owen J in Josephson v Young68 to have been passed "to provide a complete code for the service". The provision corresponding to s 37, namely s 47 of the Constitution Act 1902 (NSW) ("the Constitution Act"), is not entrenched and frequently has been impliedly amended by subsequent legislation, so that the reference therein to the appointment by the Governor in Council of "all public offices under the Government" has been said to be obsolete69. What then remains for the operation in New South Wales today of a principle adopted from the United Kingdom in colonial times that no action lies for wrongful dismissal occasioned by the refusal to retain in office a person holding that office at the pleasure of the Crown, the exercise of that pleasure necessarily not being wrongful? 65 Finn, Law and Government in Colonial Australia, (1987) at 66. 66 (1923) 33 CLR 229 at 253. 67 Certain "minor appointments" were excepted; the appointment of Ministers was "vested in the Governor alone". 68 (1900) 21 NSWR 188 at 196. See also Gould v Stewart [1896] AC 575. 69 Twomey, The Constitution of New South Wales, (2004) at 713. McHugh In making their case for the persistence of such a principle and its application to the present case, the respondents draw attention to various considerations. First, particular statutes may provide for the bringing about of a relationship between the Crown in right of New South Wales and an appointee to a statutory office which is a contract of employment between them70. The statement in s 41(6) of the Act that, in any contract of employment between the officer and the Commissioner, the latter acts for and on behalf of the Crown is said to provide an immediately relevant example. Secondly, the respondents emphasise that it was said by Griffith CJ in Ryder v Foley71, a case concerning dismissal under the Police Act 1863 (Q), "it is an implied term in the engagement of every person in the Public Service, that he holds office during pleasure, unless the contrary appears by Statute". That proposition was adopted by Latham CJ in Fletcher v Nott73, with respect to the 1899 Act. In Ryder v Foley, O'Connor J had said that any contract was74: "entirely unilateral β a contract enabling the Government to put an end to it at any time they might think fit". That statement was approved, with reference to the situation under the Police Regulation Act 1955 (Tas), in the joint judgment in Kaye v Attorney-General for Tasmania75. 70 See, generally, the observations of Mahoney JA in Holly v Director of Public Works (1988) 14 NSWLR 140 at 146-148. Mahoney JA there said (at 147) that "'employment' is a term long applied to a position in the Public Service". Speaking of statutory officers in South Australia such as the Auditor-General, the Electoral Commissioners and the Director of Public Prosecutions, Justice Selway wrote that the question whether they were employees may well depend upon the context in which the issue arose: The Constitution of South Australia, (1997) at 157. 71 (1906) 4 CLR (Pt 1) 422. 72 (1906) 4 CLR (Pt 1) 422 at 435-436. 73 (1938) 60 CLR 55 at 64. 74 (1906) 4 CLR (Pt 1) 422 at 450. 75 (1956) 94 CLR 193 at 201. McHugh The implication expressed in these cases appears to have been made as one of law. The necessity for it76 was suggested by Dixon J in Fletcher v Nott77 to be found in the character of the police force as "a disciplined force in the service of the Crown". Some executive officers to whom s 51 could apply may not be sworn as police officers78 and thus not immediately part of that disciplined force. More importantly, however, it may today be doubted whether the blanket denial of any right to procedural fairness by the Commissioner before making a recommendation under s 51(1) of the Act is necessary "lest the contract be deprived of its substance, seriously undermined or drastically devalued in an important respect". The latter expressions, respecting the necessity for implication by law of contractual terms, are those of McHugh and Gummow JJ in Byrne v Australian Airlines Ltd79. It is unnecessary to express a concluded opinion upon the question of persistence in New South Wales of the "at pleasure principle" in respect of appointments made by the executive government under the power conferred by s 47 of the Constitution Act and otherwise not supported by statute. The powers of appointment and removal of the applicant were created by the Act. Nor is it necessary to determine whether the implied term identified by Griffith CJ continues to have any vitality. This is because the term is expressed, necessarily so, as being controlled by statute. It should be added that the use in argument in the appeal of the term "the prerogative" was inapt. Lord Diplock's remark that what is involved with the "prerogative" is "a residue of miscellaneous fields of law in which the executive government retains decision-making powers that are not dependent upon any statutory authority"80 indicates why. This litigation arises from exercises of statutory powers by the Commissioner and then by the executive government of the State of New South Wales. 76 Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 447-453. 77 (1938) 60 CLR 55 at 77; cf R v Cox; Ex parte Smith (1945) 71 CLR 1 at 23-24. 78 ss 11 and 33-35 of the Act. 79 (1995) 185 CLR 410 at 453. 80 Council of Civil Service Unions v Minister for the Civil Service [1985] AC 374 at McHugh The Act The statute with which this appeal turns does not, as did, for example, the Air Force Regulations considered in Coutts v The Commonwealth81, state that the appointment was held "at pleasure" and did "not create a civil contract". It is true that the power of removal of the applicant from his position was exercisable by the Governor in Council "at any time" during the period of the appointment which was specified as ending on 4 February 2005. But the power of removal was not exercisable at will. The exercise of the power was conditioned upon anterior steps by other parties, the making by the Commissioner of a recommendation with the approval of the Minister. In Fletcher v Nott82, rules made under the 1899 Act for procedures dealing with discipline and dismissal of police officers were, in effect and in the language of that time, treated as directory rather than mandatory83. However, and properly, no argument was advanced on this appeal that the requirement in s 51(1) respecting the Commissioner was other than critical to the effectiveness in law of an exercise of power by the Governor in Council. Significance was attached by the Court of Appeal to the operation of s 53 of the Act. In particular, it was said that the "capping" provision made in s 53(5) with respect to "compensation" embraced any form of claim for damages for loss of office. Reference has been made earlier in these reasons to s 53. There is an entitlement under s 53(2) to such compensation (if any) as the Remuneration Tribunal determines; the maximum compensation is an amount equal to the remuneration package for 38 weeks (s 53(4)); there is no entitlement "to any other compensation" for removal from office (s 53(5)). Those to whom the section is stated by s 53(1) to apply include "an executive officer who is removed from office under section 51", and "an executive officer who is otherwise removed from office (except for misbehaviour after due inquiry)". The latter description would speak to removals under s 181D. That is not relied upon here. As to s 51, the reference to removal from office would, on ordinary principles of construction, not identify those purportedly, but in law ineffectively, removed. That was this case. 81 (1985) 157 CLR 91 at 110. 82 (1938) 60 CLR 55 at 69, 75, 78. 83 cf Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355. McHugh Conclusion The essential dispute was seen by the Court of Appeal as being whether "the common law dismissal at pleasure principle [was] not qualified by a common law implication of procedural fairness". That, however, posits a false conflict. The applicant held, and was dismissed from, a statutory office, not one created under what appears to be the obsolete or at least obsolescent prerogative power recognised by s 47 of the Constitution Act. By necessary implication, the prerogative found in s 47, and which might have been employed to create the applicant's position as Deputy Commissioner as one at pleasure, was abrogated or displaced by the Act itself84. Speaking in Re Residential Tenancies Tribunal (NSW); Ex parte Defence Housing Authority85 of the principle laid down in Attorney-General v De Keyser's Royal Hotel86, McHugh J said87: "That principle is that, when a prerogative power of the Executive Government is directly regulated by statute, the Executive can no longer rely on the prerogative power but must act in accordance with the statutory regime laid down by the Parliament." It may be accepted that this reasoning would not apply where, as in R Venkata Rao v Secretary of State for India88, the statute providing for the new office and its incidents itself expressly states that the office is held during pleasure. The New South Wales Parliament did not so provide in the Act. Section 51(1) does use the term "at any time" but, as already remarked, that, when read with the balance of the section, is not apt to unfetter that power of the Governor in Council which may be exercised from time to time but only subject to satisfaction of the condition attached to it respecting the Commissioner. The respondents must found upon the implication, as a matter of law, of the term accepted in this field by earlier decisions of this Court. The reasoning 84 Attorney-General v De Keyser's Royal Hotel [1920] AC 508; Barton v The Commonwealth (1974) 131 CLR 477 at 501. 85 (1997) 190 CLR 410. 87 (1997) 190 CLR 410 at 459. 88 [1937] AC 248 at 256. McHugh which has supported that term did not refer to, and may appear at odds with, that in De Keyser. At all events, even if it otherwise be now appropriate to accept the existence of such a term in the Contract, it must be subject to the Act and thus to the considerations, adverse to the respondents, already discussed. When these matters are appreciated, it becomes apparent that there was in the Act no displacement of an obligation of procedural fairness upon the decision-making power of the Commissioner exercised in this case. From that conclusion there follow the legal consequences culminating in the relief granted Orders Special leave should be granted, the appeal treated as heard instanter and allowed with costs, the orders of the Court of Appeal entered on 8 December 2003 set aside and in place thereof the appeal to that Court dismissed with costs. Callinan Issue This application for special leave was heard by the Court as if it were an appeal. In the Court of Appeal of New South Wales, the question posed was whether the dismissal of an executive officer of the police service pursuant to s 51 of the Police Service Act 1990 (NSW)89 ("the Act") was an exercise of the Crown prerogative to dismiss at pleasure. An alternative formulation proposed by the applicant in this Court is, whether on its proper construction, s 51(1) of the Act empowers the Governor to remove the applicant in disregard of procedural fairness. Facts The applicant began his career in the New South Wales Police Service on 14 October 1967 as a probationary constable. On 5 February 1997, he was appointed a Deputy Commissioner for a term of three years. This appointment was renewed for a further term of five years on 5 February 2000 by instrument of appointment recorded in a Minute of the Executive Council approved by the Governor. On 28 April 2000, the applicant and the first respondent entered into a contract of employment ("the contract"). The contract Under the heading "Contract Operation and Application", the contract provided: This Contract constitutes a contract of employment for the purposes of s 41 of the Act, and governs the employment of the employee while employed in the position referred to in clause 4. The executive officer is not appointed by, nor is the executive officer's term of office fixed by this contract. The parties acknowledge that the employment of the employee is affected by Acts of Parliament and Regulations made under such Acts, including the Act, Public Sector Executives Superannuation Act 1989, Police Regulation (Superannuation) Act 1906 and the Statutory and Other Offices Remuneration Act 1975. The NSW Senior Executive Service manuals, Premier's Memoranda, Premier's Department and Public Employment Office Circulars and 89 This Act is now known as the Police Act 1990 (NSW), see Police Service Amendment (NSW Police) Act 2002 (NSW), Sched 1(3). Callinan Memoranda and other Government directions contain information relevant to the executive officer's employment." (emphasis added) "The Act" referred to in the contract was the Act to which I have referred. Clause 5 of the contract stated that the period for which the applicant was to hold the position was from 5 February 2000 until 4 February 2005. Under the heading "Duties and Obligations of the Executive Officer", this appeared: "6. During the term of the appointment, the executive officer must carry out any duties imposed by law with respect to the position and the additional duties and obligations specified in Schedule A of the Contract. The duties specified in Schedule A may be varied by a further contract between the executive officer and the employer. The executive officer agrees to comply with the employer's Code of Conduct and Ethics." Schedule A of the contract, entitled "Duties and Responsibilities", was expressed to commence from 5 February 2000. It set out in general terms the various duties that the applicant was required to carry out. Under the heading "Performance Agreement and Review", the contract contained these terms: The Act provides for an executive officer's performance to be reviewed, at least annually, by the executive officer's employer or some officer nominated by that employer. Any such review is to have regard to the agreed performance criteria for the position and any other relevant matter. The performance criteria specified in Schedule B may be varied by a further contract between the executive officer and the employer. The employer must give the officer at least 7 days notice in writing that a performance review is to be conducted. 12. Within one month of the conclusion of a performance review, or as soon as is practicable thereafter, the employer will prepare and send to the executive officer a written statement which sets out: Callinan the employer's conclusions about the executive officer's performance during the period for which performance was reviewed; any proposal by the employer to vary the performance criteria as a consequence of the performance review; and any directions given or recommendations made by the employer to the executive officer in relation to the executive officer's future performance of the duties of the position. The employer undertakes that if a performance review is not held within the time contemplated by s 43 of the Act, this will not operate to the prejudice of the executive officer in any decision made by the employer in relation to the executive officer, unless the failure to hold the performance review within that time was the fault of the executive officer. The employer and executive officer must, as soon as possible after the executive officer receives the written statement referred to in clause 12, attempt to come to agreement on any proposal by the employer the performance criteria and on any recommendations by the employer as to the future performance of the duties of the position by the executive officer." to vary Schedule B of the contract was entitled "Performance Agreement and Criteria". It provided relevantly as follows: "The key accountabilities and performance criteria are set out in the attached agreement. Performance reviews will be based on the performance criteria in the performance agreement attached to this Schedule. The executive officer should ensure the performance criteria remain relevant and are amended as necessary by agreement with the employer to take into account major changes that impact on the executive officer's performance." Without any prior notice to the applicant revealed by the evidence, on 5 September 2001, the Commissioner of Police notified the media that he had recommended to the Minister that the applicant's contract be "terminated on the grounds of performance". Two days elapsed before the applicant received a letter from the Commissioner stating that he had, with the approval of the Minister of Police, recommended to the Governor that the applicant be removed from office "pursuant to the Police Service Act 1990." On 10 September 2001, the applicant was provided with a "Statement of Reasons" signed by the Commissioner and addressed to the Statutory and Other Callinan Offices Remuneration Tribunal ("the Tribunal"). Its purpose was to assist the Tribunal to determine the amount of compensation payable to the applicant under s 53 of the Act. The reasons given were: "The principle [sic] matters giving rise to my recommendation were: The management by [the applicant] of operation issues at Cabramatta. In particular, his recommendations for appointment to senior command positions at Cabramatta and his supervision and management of officers so appointed. [The applicant's] inaccurate and inappropriate advice with respect to the working environment at Cabramatta with particular emphasis on the working relationships between command staff, operational police and the community in the Cabramatta Local Area Command during 1999 and 2000. The timeliness and accuracy of advice on operational issues provided by [the applicant]. A series of unsatisfactory judgement decisions on a range of issues." On 12 September 2001, the Administrator, acting under deputation from Her Excellency the Governor, removed the applicant from office with effect from 14 October 2001. The Executive Council Minute recited the Commissioner's recommendation (cf s 51(1)(a)) and the approval of the Minister for Police (cf s 51(1A)). Because the Commissioner made no declaration pursuant to s 51(2)(a), and as the applicant was not appointed to another position in the Police Service, he ceased to be a member of the Police Service from 14 October 2001 (s 51(4), It should be noted that the Commissioner did not seek to invoke s 181D of the Act for the removal of the applicant on the basis that the Commissioner did not have confidence in the applicant's suitability to continue as an officer, having regard to his competence, integrity, performance or conduct, notwithstanding that the reasons provided to the Tribunal appear to question one or more of these. Reliance on that section would have required prior notice to the applicant and have afforded him statutory rights of review (ss 181D(3), 181E-181J). On 21 November 2001, the Tribunal determined that the applicant was entitled to compensation of $159,175 representing remuneration for 38 weeks from 15 October 2001, the maximum that he could receive in the circumstances of his removal under s 51. Callinan The Act The more relevant of the provisions of the Act should be set out as they were at the time of the applicant's removal from office. Section 40 contemplated appointment for up to five years, not by or pursuant to a contract, but by instrument of appointment. The term of appointment was regulated by s 40 which provided: "40 Term appointments Subject to this Act, an executive officer holds office for such period (not exceeding 5 years) as is specified in the officer's instrument of appointment, but is eligible (if otherwise qualified) for re- appointment." Section 41 provided that an executive officer's employment should be governed, subject to the Act and regulations, by a contract of employment which might not itself fix the term of employment: "41 Employment of executive officers to be governed by contract of employment The employment of an executive officer shall be governed by a contract of employment between the officer and the Commissioner. (2) A contract of employment may be made before or after the appointment of the executive officer concerned. (3) An executive officer is not appointed by, nor is an executive officer's term of office fixed by, the contract of employment. (4) A contract of employment may be varied at any time by a further contract between the parties. A contract of employment may not vary or exclude a provision of this Act or the regulations. The Commissioner acts for and on behalf of the Crown in any contract of employment between the officer and the Commissioner." (emphasis added) Section 42 dealt with the matters for inclusion in a contract (including duties and remuneration) and for the making, between the parties, of further agreements: Callinan "42 Matters regulated by contract of employment The matters to be dealt with in a contract of employment between an executive officer and the Commissioner include the following: the duties of the executive officer's position (including performance criteria for the purpose of reviews of the officer's performance), the monetary remuneration and employment benefits for the executive officer as referred to in Division 5 (including the nomination of the amount of the remuneration package if a range of amounts has been determined for the remuneration package), any election by the executive officer to retain a right of return to the public sector under s 52. (2) A contract of employment may provide for any matter to be determined: by further agreement between the parties, or by further agreement between the executive officer and some other person specified in the contract, or by the Commissioner or other person or body specified in the contract." Section 43 made performance reviews, at least annually, mandatory: "43 Performance reviews (1) An executive officer's performance must be reviewed, at least annually, by the Commissioner or by some person nominated by the Commissioner. (2) Any such review is to have regard to the agreed performance criteria for the position and any other relevant matter." (emphasis added) Callinan Section 51(1) and (1A) regulated removal. Significantly they neither required nor even spoke in terms of removal either for reason or cause. But on the other hand they did not contain such familiar language as90: "... nothing in this Act shall be construed or held to abrogate or restrict the right or power of the Crown to dispense with the services of any person employed ..." Instead they provided: "51 Removal of executive officers from office (1) An executive officer may be removed from office at any time: the Governor on the the Commissioner, in the case of a Deputy Commissioner or Assistant Commissioner, or recommendation of by the Commissioner, in any other case. (1A) A recommendation referred to in subsection (1)(a) may not be submitted to the Governor except with the approval of the Minister. The Commissioner: (a) may declare an executive officer who is removed from an executive position under subsection (1) to be an unattached officer in the Police Service, and (b) may revoke any such declaration. (3) While a declaration under subsection (2) remains in force, the person to whom the declaration relates: is to be regarded as an executive officer, although not holding an executive position, and is entitled to monetary remuneration and employment benefits as if the person had not been removed from his or her position. 90 See s 97 of the Education Commission Act 1980 (NSW) referred to in Director- General of Education v Suttling (1987) 162 CLR 427 and s 54 of the Public Sector Management Act 1988 (NSW) referred to in Kelly v Commissioner of Department of Corrective Services (2001) 52 NSWLR 533. Callinan an executive officer is removed from an executive position under subsection (1) and a declaration is not made in relation to the officer under subsection (2), or a declaration under subsection (2) made in relation to an executive officer is revoked, the officer ceases to be an executive officer, unless appointed to another executive position. (5) A member of the Police Service who ceases to be an executive officer because of subsection (4) ceases to be a member of the Police Service, unless appointed to another position in the Police Service. The making of a declaration under subsection (2) in relation to an executive officer does not prevent the officer from ceasing to be an executive officer because of the completion of the officer's term of office. This section does not prevent an executive officer being removed from office apart from this section." Section 53 provided for compensation without reference to the basis upon which it fell to be assessed, or the relevance of the reason or cause for the removal except to the extent that the "general directions" referred to in s 53(3)(b), which were not before the Court, might bear upon these: "53 Compensation where executive officer has no right to return to public sector This section applies to: an executive officer who is removed from office under section 51 and who ceases to be an executive officer as referred to in section 51(4), or an executive officer who is otherwise removed from office (except for misbehaviour after due inquiry), or (Repealed) an executive officer who was employed in the public sector when first appointed as an executive officer, whose term of office as an executive officer expires and who is not re- appointed, Callinan being a person who is not entitled to be engaged in the public sector under section 52. (2) A person to whom this section applies is entitled to such the Statutory and Other Offices compensation (if any) as Remuneration Tribunal determines. The Statutory and Other Offices Remuneration Tribunal: (a) may determine that compensation is payable for the failure to re-appoint an executive officer only if the Tribunal is satisfied that the person had a reasonable expectation of being re-appointed, and (b) must have regard to any general directions given to the Tribunal by the Minister administering the Statutory and Other Offices Remuneration Act 1975 as to the matters to be taken into consideration when it makes determinations under this section. The maximum compensation payable is an amount equal to the person's remuneration package for the period of 38 weeks. The person is not entitled to any other compensation for the removal or retirement from office or for the failure to re-appoint the person or to any remuneration in respect of the office for any period afterwards (except remuneration in respect of a subsequent re-appointment to the office). (6) An executive officer who is removed from office or not re- appointed is not entitled to compensation under this section if: the person is appointed on that removal or expiry of the term of office to another executive position, and the remuneration package for the holder of that position is not less than the remuneration package for the holder of the former position. the Statutory and Other Offices Remuneration Tribunal determines that compensation is payable under this section, it must, in its determination, specify the period to which the compensation relates. The person may not be engaged in the public sector during the period so specified, unless arrangements are made for a refund of the proportionate amount of the compensation." Callinan Despite s 43 of the Act and cl 9 of the contract, it was common ground that no performance review was conducted during the term of the applicant's service. The proceedings at first instance The applicant commenced proceedings against the first respondent by summons filed on 20 September 2001 in the Supreme Court of New South Wales seeking various declarations of invalidity of the termination of his office, breach of contract, damages and costs. The second respondent, the State of New South Wales, was joined as a party, by consent, during the hearing. The matter was heard by Simpson J who declared the applicant's removal from office to be invalid, and awarded him $642,936.35 in damages91. The applicant argued before her Honour that he was entitled, before being removed from office, to be accorded procedural fairness which required advice, before his removal, that it was under consideration, and that he should have been given an opportunity to be heard on the question whether he should or should not be removed. Worse, he submitted, he was not told of any specific allegations against him, and not given any opportunity to respond to them. The respondents accepted that these asserted facts were true. The respondents' defence was that they were not required to afford procedural fairness to the applicant, and could remove him from office at any time without explanation, justification or excuse. In making the declarations that she did, Simpson J said92: "In my opinion, the recourse had by the [respondents] to early authority concerning the entitlement of the Crown to act in relation to its employees or appointees in the high-handed manner for which they contend is, in the twenty-first century, and in the light of modern authority, misplaced. The focus in the Act on merit as the basis of appointment, and the requirement of annual performance reviews, support that view. That conclusion is the more acceptable because the basis for the recommendation for the [applicant's] removal was specifically to do with the manner in which he performed his duties. It was not to do with the general structure of the Police Service or policy decisions in relation to that service. The [applicant] was entitled, not only to the benefit of a review of his performance in accordance with s 43, but also, when his 91 Jarratt v Commissioner of Police for NSW (2002) 56 NSWLR 72. 92 (2002) 56 NSWLR 72 at 84-85 [43]-[44]. Callinan removal was being contemplated on performance grounds, to be notified of that fact and given an opportunity to respond to the proposal and the criticisms of his performance. Further, he was entitled to be advised of any specific allegations against him, and to the content of any adverse report, and to be given an opportunity to respond to those. He was denied each of those opportunities. The decision of the Commissioner to recommend to the Governor that the [applicant] be removed from his office was legally flawed and is invalid." Simpson J made declarations of breach of contract and unlawful removal, and awarded the applicant damages corresponding to the salary that he would have been paid for the balance of the unexpired term of five years, less an allowance for sums earned in the meantime, the compensation that he received from the Tribunal, and an amount that he could otherwise be expected to earn before the expiration of the term. The Court of Appeal The respondents successfully appealed to the Court of Appeal (Mason P, Meagher and Santow JJA). The reasons of the Court were delivered by the President with whom the other members of the Court agreed. After reciting the facts and referring to authority affirming the durability of the Crown prerogative despite academic and other criticisms of it, the President stated the question in this way: "whether the principle [of Crown prerogative] was abrogated by the "Some of the reasoning in early cases applying the dismissal at pleasure principle turned upon the absence of any contractual relationship, or the designation of the contract as 'unilateral' in the sense of binding The mere existence of a contract does not exclude the Crown's right to dismiss at will95. This is so, whether the principle is seen as a prerogative or as a term of the contract (implied at law or in fact) that has not been displaced. 93 Commissioner of Police (NSW) v Jarratt (2003) 59 NSWLR 87 at 108 [72]-[76]. 94 See, eg Fletcher v Nott (1938) 60 CLR 55 at 68. 95 Reilly v The King [1934] AC 176 at 180; Kodeeswaran v Attorney-General (Ceylon) [1970] AC 1111 at 1123. Callinan There is much debate as to whether a valid contract for a fixed term excludes the Crown's right under the principle. ... This debate has no bearing on the present case, because the [applicant's] contract went out of its way to negate any suggestion that it was fixed as regards its term ... Not only was the contract silent as to any such provision. More to the point, the Act stipulated most clearly that an executive officer's term of office was not (that is, could not be) fixed by the contract of employment (s 41(3). See also s 41(5) and s 61). In Director-General of Education (NSW) v Suttling Brennan J (with whom Mason CJ and Deane J agreed) said96: 'If the relationship is contractual, the contract must be consistent with any statutory provision which affects the relationship. No agent of the Crown has authority to engage a servant on terms at variance with the statute. To the extent that the statute governs the relationship, it is idle to inquire whether there is a contract which embodies its provisions. The statute itself controls the terms of service.' For this reason it was, in my view, not open for any declaration of breach of contract to have been made. Nor should the case have proceeded as if contractual damages were to be assessed as on a wrongful dismissal. An employee's action for damages for wrongful dismissal is at bottom a claim based on breach of the employer's promise of work for a fixed term or, alternatively, for an indefinite period terminable only upon due notice. This contract had no such conditions. Declaration 2 [that the Commissioner acted contrary to the Act in breach of contract] must therefore be set aside on this ground alone." His Honour then turned his mind to the other declarations made by the primary judge that there had been contravention of the applicant's statutory rights. He rejected as material each of the indicators, relied upon by the applicant, of a legislative intention to exclude what he had earlier referred to as the "dismissal at pleasure principle", these being: the requirement of an annual review (s 43); the limited exclusion of judicial review (s 44); the absence of express provision for retention of the principle; and the alternative provision for removal subject to procedural fairness (s 181D). The parties focused particularly on s 51 of the Act, in respect of which, the 96 (1987) 162 CLR 427 at 437-438. 97 Commissioner of Police (NSW) v Jarratt (2003) 59 NSWLR 87 at 113-114 [113]. Callinan "I have not overlooked these passages in relation to my respectful disagreement with Simpson J as regards the application of Annetts98. Without, I trust, being circular in my reasoning, I cannot detect the same intensity of indicators in s 51 supporting the direct implication of a duty of procedural fairness. Conversely, s 51 strikes me as standing in the long line of provisions affirming and applying the dismissal at pleasure principle as an opportunity of last resort to the Executive in the efficient administration of a disciplined police force. The words 'at any time' suggest this. So too does the fact that Parliament has seen fit to ameliorate the impact of summary dismissal by conferring rights of return to public sector employment and of compensation (s 52 and s 53) upon those removed from office by the sharp hand of s 51." Regarding damages, the subject of a discrete challenge by the respondents, his Honour concluded99: "The point that was taken, and which I would uphold, is that s 53 (subs (5) in particular) reinforces the conclusion that s 51 is not circumscribed in the way found by Simpson J. Section 51 restates the dismissal at pleasure principle, but qualifies it by the procedural requirements found in s 51(1) and s 51(1A) and mitigates its harsh impact by the provisions made in s 52 and s 53. I see no reason why the reference in s 53(5) to 'compensation' does not embrace any form of claim for damages for loss of office. It is difficult to see what else could be envisaged. As Dixon J put it in Nelungaloo Pty Ltd v Commonwealth100: 'Now "compensation" is a very well understood expression ... It is to place in the hands of the owner expropriated the full money equivalent of the thing of which he has been deprived. Compensation prima facie means recompense for loss ...' In McKerlie v State of New South Wales101 Dunford J construed a corresponding section in the Public Sector Management Act 1988 [NSW] 98 Annetts v McCann (1990) 170 CLR 596. 99 Commissioner of Police (NSW) v Jarratt (2003) 59 NSWLR 87 at 117-118 [138]- 100 (1948) 75 CLR 495 at 571. 101 [2000] NSWSC 998. Callinan (s 55) as precluding a claim for damages for wrongful dismissal being brought by a person dismissed at pleasure from a Crown office. I agree with this decision and would apply its reasoning to s 53(5)." Callinan Disposition of the appeal The first task is to construe s 51 in the context of the Act as a whole. Having done so, I have decided that the section does not exclude the rules of procedural fairness. First, I would however point out that the police force, or, as it is now called, the Police Service, is different in many ways from other organs of the Executive. It is an armed, uniformed body of special state employees, entrusted with many intrusive and unique powers, required to act in conformity with high standards of discipline and integrity, and bound to submit to rigorous supervision. Historically, even though police officers are paid and appointed by the state, the state is not, in the absence of statutory mandate, vicariously liable for their actions: a police officer is not an agent or servant of the Crown. The incidents of the relationship between the Crown and a police officer, and the personal obligations of the latter are fully explained in Enever v The King102. At an early stage differences emerged between the roles in the colonies of police officers, and the relationship between them and the Colonial Secretary or other police ministers on the one hand, and the police force and the government and local authorities in the United Kingdom, on the other. In Police and Government: Histories of Policing in Australia, Professor Finnane makes the following observation in respect of the historical evolution of the relationship103: "For all of the Australian colonies, therefore, the control of police was from the earliest moment vested in the governor. Yet the path from the governor's prerogative in the appointment of constables or police magistrates to the enactment of legislation authorising centralised police forces under single police heads with substantial autonomy was not inevitable. It was fought out in often contentious circumstances." The author's further observation suggests that the intrusion of politics into policing is no new matter104: 102 (1906) 3 CLR 969 at 975-977 per Griffith CJ; Attorney-General for NSW v Perpetual Trustee Co Ltd (1952) 85 CLR 237; affirmed [1952] AC 457; Griffiths v Haines [1984] 3 NSWLR 653. 103 Finnane, Police and Government: Histories of Policing in Australia (1994) at 16. 104 Finnane, Police and Government: Histories of Policing in Australia (1994) at 44. See also s 8(1) of the Act which subjects the Commissioner to the direction of the Minister in the management and control of the Police Service. Callinan "It is difficult not to conclude that the relationship between police minister and police commissioner will continue to be a contentious one. Reviewing the arrangements in different Australian States, the Queensland Public Service Management Commission concluded in 1993 that 'the experience from all jurisdictions indicates the degree of difficulty involved in defining an appropriate relationship between the Minister and the Police Commissioner'. The division of labour in modern cabinet government has produced ministries with ever closer identification of ministers with important domestic portfolios. A century ago police administration was just a sub-branch of the colonial secretary's office in most colonies. A specific portfolio of police is a quite recent development in most States. Only in Western Australia does it predate the Second World War, with Tasmania the only other State having a separate police ministry before 1960. Today all States have a distinct portfolio, though sometimes linked to other ministerial responsibilities." (footnotes omitted) Factors to which I have referred have implications both favouring and adverse to the applicant's case. The latter include the public interest in the availability of the means of ready dismissal and speedy rectification of lapses on the part of police officers, and the conventional but not unreasonable abstention of the responsible minister from intervention in operational police matters. The former include that the obligations and rights have now almost entirely been the subject of detailed legislation, and accordingly that any presumption of the survival of a relevant Crown prerogative should not lightly be made. Schedule 2 of the Act makes provision for two positions of Deputy Commissioner. The position ranks immediately below that of Commissioner. Section 3 of the Act defines merit and requires that appointments and recommendations be made on the basis of it: "merit, in relation to a decision of the Commissioner to appoint or recommend for appointment a person to a position in the Police Service, means: the possession by the person of qualifications determined in respect of the position by the Commissioner, and the aptitude of the person for the discharge of the duties of the position, and the integrity, diligence and good conduct of the person." It might therefore reasonably be assumed that the applicant must have been appointed on merit and that accordingly, subject to the Act, would retain his position for its term unless his service ceased to be meritorious. Callinan Section 8 of the Act makes the Commissioner responsible for the management and control of the Police Service subject to the direction of the Minister. That section obliges the Commissioner to do that economically and efficiently. Section 28(7) uses some of the same language as s 53(1)(b), "for misbehaviour after due inquiry". The statutory regime for removal of other officers sheds no light on the understanding of the regime for the removal of executive officers of whom the applicant was one, and understandably so because no doubt of the eminence of his position and the special need for confidence in his performance in it. Pursuant to s 33 of the Act, a Deputy Commissioner is a member of the Police Service Senior Executive Service. By s 36, appointments to that service are made by the Governor on the recommendation, in the case of a Deputy Commissioner, of the Commissioner. Section 39(2)(b) provides that a vacancy to an executive position filled after advertisement must be on merit. Only current officers may be so appointed absent advertisement, and the appointee must be the officer having "the greatest merit". I regard these provisions as providing another indication, albeit a slight one, that some reason would ordinarily be required to be demonstrated as a ground for removal of the appointee. A further such indication is the requirement, by s 40 of the Act, of an appointment for a term up to, and in this case of, five years. The legislative requirement of a fixed term does suggest that the term will be served, subject to an absence of reason for its abbreviation, and of course the Act. An appointee could be expected, and could readily be understood by the appointer to be expected, to arrange his affairs on that basis. True it is that both should also be taken to be aware of the Act and its provision for earlier removal, but that does not mean of itself that it should also be taken that earlier removal will, or may be effected capriciously, or without notice, or otherwise procedurally unfairly. It would have been very easy for the legislature to have explicitly provided that a relevant appointment should not be for any fixed term, or should be indefinite, or was expressly terminable at pleasure, or without notice, reason or cause. Section 51(1) of the Police Act 1990 (NSW) was amended by the Public Sector Employment and Management Act 2002 (NSW) and now reads: "An executive officer may be removed from office at any time for any or no reason and without notice ... ." For myself, I would have regarded that amendment as significant, but there is a question as to the extent to which subsequent legislation may be used to construe and ascertain the intention of earlier enactments105. Section 41 is relevant. Subject to the Act (s 41(5)), the contract (for the term of five years specified by the officer's instrument of appointment) is to govern the employment. Section 41(6) does however make it plain that the Commissioner 105 Commissioner of State Revenue (Victoria) v Pioneer Concrete (Vic) Pty Ltd (2002) 209 CLR 651 at 670 [54]. Callinan acts for and on behalf of the Crown, providing accordingly, by its reference to the Crown, a counter indication to the abolition by, and for the purposes of the Act, of a prerogative or privilege of the Crown. Section 42 compels the inclusion in the contract of "performance criteria for the purpose of reviews of the officer's performance". The section refers in terms to the contract as a contract of employment. The notion of a contract of employment, and periodic reviews of performance under it, does not, absent express statutory indication otherwise, sit comfortably with a right to end the contract summarily, and without reason, or a notice, or a right to question the reason relied upon for its termination. Section 44 is an extensive privative provision. It provides that any question or dispute about an officer's employment is not an industrial matter for the purposes of the Industrial Relations Act 1996 (NSW). It excludes an appeal to the Police Tribunal or to the Government and Related Employees Appeal Tribunal ("GREAT"), and s 44(7) forbids prerogative and related relief in respect of the appointment, or failure to appoint a person to a vacant position. Not much assistance, I think, can be derived from this. The sub-section is simply not concerned with dismissals, suspensions or removals from office. Division 5 of Pt 5, ss 45 to 47, deals with remuneration and allowances and may be passed over. It is Div 6 of Pt 5 containing s 51 that is of greatest importance and which must be most closely examined, as much, it may be observed, for what it does not say, as what it does say. And what it does not say is that an executive officer may be removed without reason, at pleasure, summarily or without notice, and without compensation. The process for which s 51 provides is recommendation by the Commissioner, approval of it by the Minister, and actual removal by the Governor, that is to say the Governor with the advice of the Executive Council (s 14 of the Interpretation Act 1987 (NSW)). This is quite an elaborate procedure. It is a procedure quite different from a simple and unqualified dismissal by the Governor in the exercise of some kind of Crown, reserved or special gubernatorial power, or indeed by the Governor as defined, in the exercise of an unrestricted non-statutory Executive power. The fact that both the engagement and the removal are carried out under an enactment is itself significant. Why make statutory provision for any of this if all that is involved, or is to be left unimpaired, is naked Crown privilege or prerogative? The fact also that a recommendation has to be made is significant: so too that an approval by the Minister is a prerequisite. A recommendation is unlikely to be required unless it is to be a recommendation for a reason or reasons. The same may be said of the approval of the Minister. The approval or disapproval of the Minister is unlikely to be required and given without reason. If it were otherwise, both the recommendation and the approval and the statutory provision for them would be seen and read as meaningless formalities when, if dismissal at pleasure were Callinan available, there was no need of them. I should say that "reason" may not necessarily mean "cause", a matter which I will address later. What I have said of s 51 however stands, by itself, as a powerful indicator that Crown prerogative does not bear upon the case. The first thing to be noticed about s 53 is that it is to apply indiscriminately to an executive officer, that is to say, all executive officers removed under s 51 (except for officers removed for misbehaviour after due inquiry). This means that it may apply to compensate executive officers who are, or have become, incompetent or are otherwise without merit, as well as, for example, officers who are no longer required due to no fault on their part. Section 53(2) makes provision for the assessment of compensation (if any) for an executive officer's removal in such amount as the Tribunal determines. In so doing the Tribunal must have regard to any general directions given to it by the Minister administering the Statutory and Other Offices Remuneration Act 1975 (NSW) in making a determination (s 53(3)(b)). The Court has no evidence as to whether these relate to the merit, conduct, efficiency or the integrity of an officer or to the amount of compensation he should receive; but even if they do, they cannot alter the construction of the Act. Section 53(4) limits the compensation to the equivalent of the officer's "remuneration package" for a period of 38 weeks. Officers whose positions are abolished or changed are to have no greater rights to compensation (s 57(3)). The topic with which Pt 9 deals is the management of conduct within the police service. Sections 173-181 make extensive provision for notice of misconduct and unsatisfactory performance, and for reviews of decisions by the Commissioner in relation to such a matter. The respondents place weight on the presence of s 181D in the Act which relevantly provided as follows: "181D Commissioner may remove police officers The Commissioner may, by order in writing, remove a police officer from the Police Service if the Commissioner does not have confidence in the police officer's suitability to continue as a police officer, having regard to the police officer's competence, integrity, performance or conduct. (2) Action may not be taken under subsection (1) in relation to a Deputy Commissioner or Assistant Commissioner except with the approval of the Minister. Before making an order under this section, the Commissioner: Callinan (a) must give the police officer a notice setting out the grounds on which the Commissioner does not have confidence in the officer's suitability to continue as a police officer, and (b) must give the police officer at least 21 days within which to make written submissions to the Commissioner in relation to the proposed action, and (c) must take into consideration any written submissions received from the police officer during that period. The order must set out the reasons for which the Commissioner has decided to remove the police officer from the Police Service. Except as provided by Division 1C: no tribunal has jurisdiction or power to review or consider any decision or order of the Commissioner under this section, and no appeal lies to any tribunal in connection with any decision or order of the Commissioner under this section. this subsection, tribunal or administrative review body, and (without limitation) includes GREAT and the Industrial Relations Commission. tribunal means a court, (7A) Nothing in this section limits or otherwise affects the jurisdiction of the Supreme Court to review administrative action. The Commissioner may take action under this section despite any action with respect to the removal or dismissal of the police officer that is in progress under some other provision of this Act and despite the decision of any court with respect to any such action." Section 181E makes provision for an application by an officer for a review of the Commissioner's decision under s 181D by the Industrial Relations Commission on the ground that the removal was harsh, unreasonable or unjust. Section 181F prescribes the steps which the Commission must take, and the matters to which regard must be had in undertaking a review, and imposes the onus upon an applicant to establish harshness, unreasonableness or injustice. It is the respondents' submission that the provision, by s 51 and s 181D, of two quite separate regimes for the removal of an executive officer, is the clearest Callinan possible legislative indication that each should be given full scope, that the plain differences between them should be recognised, and, in particular, that it should be accepted that whilst s 181D provides in explicit detail for notice and review, s 51 deliberately and unmistakably does not: no implication should therefore be made by the Court of any requirement of notice or judicial oversight of any kind in respect of removal under the latter section. The rational basis for that distinction was said to be that s 51 was intended to deal with urgent and clear cases, and s 181D with cases of lesser urgency or importance. This submission of the respondents has considerable force. I do not think however that the fact that s 181D of the Act provides for the procedures that it does, necessarily leads to the conclusion that s 51 either embodies, or simply restates the "dismissal at pleasure" principle, or should otherwise be read as intended to exclude the rules of natural justice. In resolving a question of this kind, the authorities to which I will refer require that careful regard be had to the scope, purpose and objects of the enactment in question, as well of course to the sorts of contextual indications in the Act which I have discerned and discussed. This is not to say that the right of the Crown to dismiss at pleasure, whether characterized as a prerogative of the Crown, or an implied term of a contract with it, absent statutory intervention, has in some way dwindled into obsolescence. The applicant rightly accepted this to be so. Its rationale lies in the requirement, as a matter of public policy, that the Crown have the power to act in the public interest, or for the public good, if the continued employment of its servants might be detrimental to the interests of the State106. In Shenton v Smith107 the right to dismiss was held not to derive from a special Crown prerogative, but to be based upon the somewhat unlikely assumption of a common understanding that the Crown could dismiss its servants at pleasure "because such are the terms of their engagement, as is well understood throughout the public service"108; and in Dunn v The Queen this was said to be so because there was "imported into the contract 106 Shenton v Smith [1895] AC 229 at 235; Dunn v The Queen [1896] 1 QB 116 at 118, 120; Gould v Stuart [1896] AC 575 at 578; Carey v The Commonwealth (1921) 30 CLR 132 at 137; Lucy v The Commonwealth (1923) 33 CLR 229 at 238, 249, 254; Fletcher v Nott (1938) 60 CLR 55 at 67-68; Kaye v Attorney-General for Tasmania (1956) 94 CLR 193 at 198; Coutts v The Commonwealth (1985) 157 CLR 91 at 103, 105; Suttling v Director-General of Education (1985) 3 NSWLR 427 at 445, 446; Kelly v Commissioner of Department of Corrective Services (2001) 52 NSWLR 533 at 558. 108 [1895] AC 229 at 234-235 per Lord Hobhouse. Callinan for the employment ... the term which is applicable to civil servants in general, namely, that the Crown may put an end to the employment at its pleasure"109. The alternative view is that the right of dismissal "flows from statute or the prerogative"110 or derives "from the residue of the Sovereign's prerogative ... or from the common law as subsuming that prerogative ..."111. It is unnecessary to explore in this appeal the true nature of the right or prerogative, or the extent of its current vitality112 because, in my view, the relevant sections of the Act to which I have referred in some detail, manifest an intention to displace or replace it to some extent at least. In reaching that conclusion I have been influenced by three cases in this Court one of which is a very recent one. In the first, Salemi v MacKellar [No 2]113, Gibbs J made it plain that in a case of a statutory power, the question (as to a requirement of procedural fairness) will depend upon the true construction of the statutory provision in light of the common law presumptions. The second is Annetts v McCann in which Mason CJ, Deane and "It can now be taken as settled that, when a statute confers power upon a public official to destroy, defeat or prejudice a person's rights, interests or legitimate expectations, the rules of natural justice regulate the exercise of that power unless they are excluded by plain words of 109 [1896] 1 QB 116 at 119 per Lord Herschell. 110 Coutts v The Commonwealth (1985) 157 CLR 91 at 105 per Brennan J. 111 Suttling v Director-General of Education (1985) 3 NSWLR 427 at 437 per Kirby P. 112 The Crown's right to dismiss at pleasure has been described as "exceptional", "anachronistic", "curious", "doctrinally erroneous" and a "cause of blatant injustice": see Coutts v The Commonwealth (1985) 157 CLR 91 at 105, 106; Commissioner of Police for New South Wales v Jarratt (2003) 59 NSWLR 87 at 107 [68]; Suttling v Director-General of Education (1985) 3 NSWLR 427 at 446, 447. See also the following academic writings to a similar effect: Nettheim, "Dunn v The Queen Revisited", (1975) 34 Cambridge Law Journal 253; Campbell, "Termination of Appointments to Public Offices", (1996) 24 Federal Law Review 1 113 (1977) 137 CLR 396 at 419. 114 (1990) 170 CLR 596 at 598. Callinan necessary intendment ... In Tanos115, Dixon CJ and Webb J said that an intention on the part of the legislature to exclude the rules of natural justice was not to be assumed nor spelled out from 'indirect references, uncertain inferences or equivocal considerations'. Nor is such an intention to be inferred from the presence in the statute of rights which are commensurate with some of the rules of natural justice ... In Kioa v West116 Mason J said that the law in relation to administrative decisions 'has now developed to a point where it may be accepted that there is a common law duty to act fairly, in the sense of according procedural fairness, in the making of administrative decisions which affect rights, interests and the clear legitimate expectations, subject only manifestation of a contrary statutory intention.' In Haoucher117 Deane J said that the law seemed to him 'to be moving towards a conceptually more satisfying position where common law requirements of procedural fairness will, in the absence of a clear contrary legislative intent, be recognized as applying generally to governmental executive decision- making." (some footnotes omitted) Words of necessary intendment to the contrary of procedural fairness, do not, as I have said, appear in Div 6 of Pt 5 (ss 48-54) or elsewhere in the Act. The words "at any time" in s 51 do not convey it. Those words may make it clear that the making of a contract by way of instrument of appointment, for a term does not mean that the term will necessarily run its length, but that does not mean that the scope, purposes and objects of the Act should be taken to be irrelevant to a removal at any time, otherwise than in accordance with the rules of natural justice adapted of course according to the scope, purposes and objects of the Act, and its intendment with respect to removal as stated by the express statutory language that deals with the topic. The third of the cases is Sanders v Snell in which Gleeson CJ, Gaudron, Kirby and Hayne JJ said118: "Whatever may be the content or the continued utility of [the doctrine of legitimate expectation] it has long been held that the repository of statutory power should afford procedural fairness to those whose livelihood is affected by the exercise of that statutory power." 115 Commissioner of Police v Tanos (1958) 98 CLR 383 at 396. 116 (1985) 159 CLR 550 at 584. 117 Haoucher v Minister for Immigration and Ethnic Affairs (1990) 169 CLR 648 at 118 (1998) 196 CLR 329 at 348 [45]. Callinan The scope of the Act is generally a comprehensive one, to deal with all matters affecting the Police Service. In that respect, it would be unlikely that it intended to leave intact the "dismissal at pleasure" principle. The preamble of the Act states in terms that it is to provide, among other things, for the employment of police officers. The purpose and objects of the Act appear from s 7 which states the values of the Police Service, and s 8(2) which imposes upon the Commissioner a duty to manage the service effectively, efficiently and economically. Procedural fairness is not incompatible with that duty. Indeed, a requirement of procedural fairness by its beneficial effect on morale and the influence that it may have on policing generally is likely to enhance efficiency. So too an understanding that the Commissioner will be required to act in a procedurally fair way in making and terminating appointments can only serve to maintain public confidence in, and therefore public co-operation with, the Police Service. Certainly the Commissioner, and even perhaps the Minister, were bound to afford the applicant procedural fairness, and this they failed to do. The fact that the former only recommended, and the latter merely approved the recommendation, and that the final decision was formally, at least, the decision of the Governor-in-Council, does not deny the requirement of procedural fairness119. Because however the case focused on the recommendation, and not the approval, it would not be right to decide and to declare that the Minister denied the applicant procedural fairness. It follows that the appeal must be allowed but not that the declarations made by the primary judge should be restored. Declarations 1, 2 and 3 made by her Honour should not be restored. These, referring as they do to the requirements of the Act and the contract are inappropriate, particularly the second which declares that there has been a breach of contract. There is nothing in the contract which requires that the applicant be afforded procedural fairness and accordingly failure to do so was not a breach of it. The obligation to ensure procedural fairness to the applicant stems from the common law which was not displaced by the Act. I would however in substance restore the fourth declaration that was made by the primary judge with the deletion of the reference to the applicant's contract of employment. The declaration would then read as follows: "Declare that the first respondent in making a recommendation to the Governor that the applicant should be removed from his office as Deputy Commissioner of 119 In Sanders v Snell, it was contemplated that relief was available against the Minister who merely recommended and was not the ultimate decision maker: (1998) 196 CLR 329 at 347-348 [43]-[45]. Callinan the New South Wales Police Service, failed to afford to the applicant procedural fairness thus rendering the decision to remove the applicant from office invalid." Two further matters need discussion. The first is the content of procedural fairness in this case. In my view, the Commissioner and perhaps the Minister should have given the applicant reasonable notice of their intention to recommend removal and to approve respectively. The notice should have given a reason or reasons for the recommendation and arguably also the approval. As Lord Reid pointed out in Ridge v Baldwin, if the reason for the decision is not known, whether or not the decision maker is bound to give it to the person affected by the decision, it is not possible to determine the fairness or otherwise of the latter's case against the making of the decision120. I have deliberately chosen "reason" or "reasons" rather than "cause" because the latter may imply a need for some dereliction in duty before removal. The Act, when the Commissioner proceeds under s 51 does not require that. Without attempting to be comprehensive, incompatibility, restructuring, or the emergence of a superior performer might well and quite properly provide a reason for removal. But it must be assumed that there be a reason in fact capable of articulation and communication to the officer concerned; otherwise caprice might rule. The applicant should also have been given the opportunity to attempt to persuade the Commissioner and perhaps the Minister not to proceed, even if the reason be any of the three that I have suggested as possible examples of a sufficient reason. The respondents argued that on no view was the applicant entitled to damages; the limit of his entitlement was the compensation which he had been paid equating with 38 weeks of salary. I would reject that argument although what the applicant was entitled to receive and was awarded by the trial judge was not properly characterizable as damages for breach of contract. I have held that the applicant's removal was invalid. He therefore remained in office and was entitled to the emoluments of his office for the period that he could have expected to serve in it. In some respects this case is analogous with Lucy v The Commonwealth121 in which it was declared that the office of a public servant had been wrongfully terminated. Starke J said that in such a case damages for wrongful removal or dismissal from office are not available. But his Honour went on to say that there is no difficulty in applying the general law in relation to servants who are wrongfully discharged from their service, and that the measure of damages is not the wages agreed upon but the actual loss sustained, including compensation for any wages of which the servant was deprived by reason of his dismissal. His Honour applied that measure in the case of the plaintiff there and I would accordingly do the same here with the result that the award made by the 120 Ridge v Baldwin [1964] AC 40 at 65-66. 121 (1923) 33 CLR 229. Callinan trial judge should stand. The respondents argued that the applicant should not be compensated for the whole of the balance of the unexpired term of his appointment; to do so made no allowance for contingencies and vicissitudes in particular, the possibility, indeed the likelihood, that had he been afforded procedural fairness his appointment would still have been terminated well before the balance of the five years elapsed. This is an argument which may be compared with an argument of a failure to mitigate, the onus in respect of which lies upon a defendant. No reason for removal was proved or suggested, and hence there was no evidence of how the applicant might have responded to it. This means that the Court cannot make any assessment of the validity of the respondents' assertions and argument in this regard122. In those circumstances, and because the removal was invalid and no further attempt at removal was made, the applicant must be taken as having remained in office and being entitled to its emoluments in full, subject only to the deductions actually made by the trial judge. The orders that I would make therefore are as follows: Order that there be special leave to appeal from the decision of the Court of Appeal of New South Wales of 11 November 2003. Order that the hearing of the application for special leave be treated as the hearing of the appeal. Order that the appeal be allowed. Order that the respondents pay the applicant's costs application for special leave to appeal in this Court, and of the appeal. Set aside the orders of the Court of Appeal and of Simpson J made on 5 July 2002 and in lieu thereof make the following declaration and orders: (a) Declare that the first respondent in making a recommendation to the Governor that the applicant should be removed from his office as Deputy Commissioner of the New South Wales Police Service, failed to accord to the applicant procedural fairness thus rendering the decision to remove the applicant from office invalid. Judgment for the applicant against the respondents in the sum of (c) Order that the respondents pay the applicant's costs of the trial and the appeal to the Court of Appeal. 122 cf Ridge v Baldwin [1964] AC 40. 148 HEYDON J. The circumstances and principal statutory provisions are set out in Callinan J's reasons for judgment. His proposed orders 1 to 4 and 5(b) and (c) should be made for the following reasons. The position of Deputy Commissioners The present applicant had been in the police force for 30 years before the five year appointment involved in this case was made. He had held a three year appointment as Deputy Commissioner in the period immediately before it was made. Occupants of so senior a statutory office as Deputy Commissioner of the New South Wales Police Service will not usually have attained it without building up a considerable reputation for competence and integrity over a number of years. The peremptory termination of an appointment to a senior statutory office of this kind, apart from its effects on the occupant's income, is likely to be very damaging to that reputation. This is so particularly where, as here, the only public indication given as to the grounds for termination was the word "performance". An event of this kind is likely to disable the person removed from the office from ever obtaining an equivalently senior appointment. Indeed it is also likely to make it difficult for that person to get very many opportunities for employment at all. The proposition that these consequences must be allowed to flow without the person to be removed being informed why, and without any chance to oppose that course, is a very extreme one. Strong statutory language to the contrary would be needed to make it convincing. Hence, unless the Police Service Act 1990 (NSW)123 ("the Act") otherwise provided, the Commissioner had a duty to afford procedural fairness in deciding whether to recommend to the Governor in Council that the applicant be removed from office. Procedural fairness required the Commissioner to give notice of an intention to recommend removal and to consider anything that the applicant said in response to that notice. Since the respondents conceded that if there was a duty of procedural fairness it had not been complied with, it is unnecessary to consider its precise content further. The legislative scheme The appointment of a Deputy Commissioner was to be made by the Governor on the recommendation of the Commissioner (s 36(1)(a)). The Commissioner was obliged not to recommend the applicant's appointment to that office unless in the opinion of the Commissioner he had "the greatest merit" 123 This Act is now known as the Police Act 1990 (NSW): see Sch 1(3) of the Police Service Amendment (NSW Police) Act 2002 (NSW). (s 39(1)(b) and (2)(b)). Questions of "merit" were to be judged by reference to his qualifications, aptitude, integrity, diligence and good conduct (s 3). At the time when the applicant was appointed to the office from which he was dismissed, it was also the duty of the Commissioner not to recommend the applicant's appointment without integrity inquiring (s 39(3)(a)) and without having regard to any information that came to the Commissioner's attention whether as a result of those inquiries or otherwise (s 39(3)(b) and (4)). No doubt that inquiry was made, and no doubt the answer did not question the applicant's suitability in that respect124. The office from the applicant's into 124 At the relevant time s 39 provided: In deciding to make a recommendation for the appointment of a person to a vacant executive position which has been duly advertised: the Commissioner may only select a person who has duly applied for appointment to the vacant position, and the Commissioner must, from among the applicants eligible for appointment to the position, select the applicant who has, in the opinion of the Commissioner, the greatest merit. In deciding to make a recommendation for the appointment of a person to a vacant executive position which has not been duly advertised: the Commissioner may only select a member of the Police Service who is a police officer or an administrative officer (as the case requires), and the Commissioner must, from among the eligible members of the Police Service, select the member who has, in the opinion of the Commissioner, the greatest merit. It is the duty of the Commissioner, before recommending the appointment of, or appointing, a person to a vacant executive position: to make inquiries (from the Police Integrity Commission and from any other person or body the Commissioner considers appropriate) as to the person's integrity, and to have regard to any information that comes to the Commissioner's attention (whether as a result of inquiries under paragraph (a) or otherwise) as to the person's integrity. (4) The Police Integrity Commission is required to furnish a report to the Commissioner (on the basis of information available to it and without (Footnote continues on next page) which the Deputy Commissioner was to be removed was, by reason of s 40 and the applicant's instrument of appointment, in this case, one for a five year term. It was subject to the power to remove conferred by s 51, but it would ordinarily be assumed that once a five year term had been selected, it would endure unless some good contrary reason emerged. If this were not so, the terms of appointment would be self-contradictory: the appointment would be for five years or any shorter period as decided at any time within the five years. The statutory duty on the Commissioner or the Commissioner's nominee to review the officer's performance (s 43(1)) by reference to the criteria set out in the officer's contract (ss 42(1)(a) and 43(2)) also suggests that the appointment would continue unless some good contrary reason emerged. In argument before this Court some attention was devoted to the question of what limits, if any, there were to the grounds on which the Commissioner could act in making a s 51 recommendation. The respondents submitted that the Commissioner could have acted for good reasons, no reasons or bad reasons, including bad faith. That submission must be rejected. In the absence of contrary statutory language, it cannot be concluded that the Commissioner was entitled to act on whim, caprice or malice; rather he was obliged to exercise his s 51 power, as much as his other responsibilities, with a view to the effective, efficient and economical management of the Police Service (s 8(2)). It is convenient to proceed on an assumption favourable to the respondents β that the Commissioner's power was not more narrowly limited. Hence, it is unnecessary to decide whether a recommendation could only be based on some "fault" in the person whose dismissal was recommended, or whether there had to be some other "cause" for doing so125. the need for any special investigation or inquiry) on any person the subject of an inquiry referred to in subsection (3) (a). (5) As soon as practicable after a person is appointed to a vacant executive position, the Commissioner is required to notify the Police Integrity Commission of the identity of the person so appointed." 125 It would seem, however, that in order to act under s 51 the Commissioner did not need to have lost confidence in the Deputy Commissioner's suitability to continue as a police officer by reason of the factors of competence, integrity, performance or conduct. Those were the criteria set out in s 181D(1); they applied in relation to all police officers, not to the smaller class of executive officers listed in Sched 2, and in particular not in that narrow segment of very senior officers β Deputy Commissioners or Assistant Commissioners β which was described in s 51(1)(a). That conclusion is supported by the contrast between s 53(1)(a) and s 53(1)(b), which in turn points to a contrast between s 51 removal and s 181D removal. Section 53(1)(b) itself suggests a contrast between the grounds for s 181D removal in general and a narrow class of grounds resting on misbehaviour. It does not, however, follow from the fact that the assumed power of the Commissioner to recommend removal was wide, that the Commissioner was not obliged to give procedural fairness to the officer who was to be the subject of the recommendation. The procedure β a recommendation by the Commissioner and approval by the Minister, before removal by the Governor in Council β suggested that the matter had a degree of seriousness and complexity. Whether or not the Governor in Council was obliged to act on a recommendation of the Commissioner approved by the Minister without being given any reasoning process to justify this course, the Minister, being responsible to Parliament for his approval, would be unable, as a practical matter, sensibly to approve a proposed removal unless the Commissioner had explained why the approval should be given. That the Commissioner had to go to that trouble as a practical matter points against a construction of the Act as extinguishing an obligation of the Commissioner to give procedural fairness to the officer who is the subject of the recommendation β for example, by stating how it was thought that effectiveness, efficiency and economy in the management of the functions and activities of the Police Service was to be advanced by making it. Very often there might be nothing the notified officer could have said, but that is no reason why the Act should be read as having excluded the opportunity to be heard. "As everybody who has anything to do with the law well knows, the path of the law is strewn with examples of open and shut cases which, somehow, were not; of unanswerable charges which, in the event, were completely answered; of inexplicable conduct which was fully explained; of fixed and unalterable determinations that, by discussion, suffered a change."126 Further, it is a matter of ordinary experience that an officer whose appointment is terminated without having been afforded any opportunity to influence the course of events is likely to experience feelings of resentment127. Perception of that resentment by former colleagues of the officer would tend to diminish the effective, efficient and economical management of the Police Service. It was submitted that to conclude that s 51 did not exclude procedural fairness would be damaging to the efficiency of the Police Service. Allusions were made to the need to make urgent decisions, and to instances in which providing an officer with the opportunity to be heard would result in the officer not having anything to say, or at least nothing relevant. It is true that the way in 126 John v Rees [1970] Ch 345 at 402 per Megarry J. 127 John v Rees [1970] Ch 345 at 402 per Megarry J. which the duty to give procedural fairness is to be complied with in particular cases may well vary with the circumstances. What is necessary to satisfy procedural fairness where there is no great urgency, or where there is some factual complexity, may be unnecessary in circumstances of great urgency or where the state of affairs is not factually complex. But that does not negate the existence of the duty to give procedural fairness in its entirety. Each party to the appeal contended that the law relating to the dismissal of persons employed by the executive government "at pleasure" was central to their arguments. The applicant submitted that there was no language suggesting that he was employed at pleasure. The respondents pointed to the law about employment at pleasure as important background to the Act. But even if it is important background, the construction of the legislation is clear: it does not exclude procedural fairness. The body of law relating to dismissal at pleasure has no determinative significance in this case and it is unnecessary to decide what its present content is. It is to be left to the cases (cases which are probably now rare and cases of which this is not one) where there is no statutory regulation of the engagement, or where the relevant statute uses language apparently adopting it128, or the cases where the executive government in terms relies on supposed rights under that body of law, and the parties conduct the proceedings by reference to that reliance129. The respondents also relied on the words "at any time" in s 51(1). Those words refer only to the power to remove and the time at which removal may be effected, not the procedure by which or the grounds on which a recommendation for removal should be made. It follows that the Act does not exclude the duty of the Commissioner to give procedural fairness in making a s 51 recommendation. The declarations made by the trial judge It is not necessary to make declarations 1-3: the trial judge's declaration 4 sufficiently encapsulated the ground of the applicant's success. Declaration 5(a) proposed by Callinan J differs from the trial judge's declaration 4 in deleting a reference to the applicant's contract. That reference is desirable because the precise level of his remuneration depended on the contract. Whether or not the contract required procedural fairness, its termination was occasioned only by the 128 For example the statutory language in Coutts v The Commonwealth (1985) 157 CLR 91. 129 For example, Kelly v Commissioner of Department of Corrective Services (2001) 52 NSWLR 533 at 539 and 546-548. invalid removal from office, and therefore the decision to terminate was itself invalid. Accordingly the fourth declaration made by the trial judge should be restored. Monetary relief Orders 5(b) and (c) proposed by Callinan J should be made for the reasons he gives. Section 53(5) is no bar to the order proposed as par 5(b): it limits compensation only in cases of valid removal from office, not, as here, invalid removal from office. The respondents contended that the Court of Appeal had not dealt with an issue about whether the damages awarded by the trial judge should have been reduced for "vicissitudes", but the ground of appeal to the Court of Appeal said to raise that issue does not do so. The applicant's submission that the matter had not been the subject of evidence or argument at trial was not contradicted by the respondents. Orders The orders which should be made are orders 1 to 4 and 5(b) and (c) proposed by Callinan J. In place of order 5(a) proposed by Callinan J, the declaration made in par 4 of the trial judge's orders should be made. |
HIGH COURT OF AUSTRALIA APPELLANT AND COMMISSIONER OF TAXATION RESPONDENT Addy v Commissioner of Taxation [2021] HCA 34 Date of Hearing: 24 June 2021 Date of Judgment: 3 November 2021 ORDER Appeal allowed with costs. Set aside orders 1 and 3 of the orders of the Full Court of the Federal Court of Australia made on 6 August 2020 and, in their place, order that the appeal to that Court be dismissed. On appeal from the Federal Court of Australia Representation T H J Hyde Page for the appellant (instructed by Harmers Workplace Lawyers) S B Lloyd SC with G J D del Villar QC for the respondent (instructed by Australian Government Solicitor) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Addy v Commissioner of Taxation Income tax (Cth) β Where Art 25(1) of Convention between Australia and United Kingdom for Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income and on Capital Gains ("United Kingdom convention") provides United Kingdom nationals not be subjected in Australia to "other or more burdensome" taxation than imposed on Australian nationals "in the same circumstances, in particular with respect to residence" β Where Pt III of Sch 7 to Income Tax Rates Act 1986 (Cth) applied new tax rate to persons holding Working Holiday (Temporary) (Class TZ) (Subclass 417) visa ("working holiday visa") β Where new tax rate imposed on working holiday visa holders more burdensome than tax rate imposed on Australian nationals deriving taxable income from same source during same period β Where new tax rate under Pt III of Sch 7 differentiates between Australian residents for tax purposes who hold working holiday visas and others who do not β Where Commissioner of Taxation assessed United Kingdom national who was Australian resident for tax purposes applying Pt III of Sch 7 β Whether application of Pt III of Sch 7 contravened Art 25(1) of United Kingdom convention. taxation Words and phrases β "Australian resident for taxation purposes", "bilateral agreements", "discrimination based on nationality", "discriminatory treatment", same "double circumstances", "non-discrimination clause", "non-resident taxpayer", "OECD Model Convention", "other or more burdensome", "resident taxpayer", "tax burden", "working holiday maker", "working holiday taxable income", "working holiday visa". "hypothetical comparator", treaties", the Income Tax Act 1986 (Cth), ss 4 and 5(1). Income Tax Rates Act 1986 (Cth), Pts I and III of Sch 7. International Tax Agreements Amendment Act 2003 (Cth), Sch 1. KIEFEL CJ, GAGELER, GORDON, EDELMAN AND GLEESON JJ. The appellant, Ms Catherine Addy, is a national of the United Kingdom. On 3 July 2015, she applied for and was granted a Working Holiday (Temporary) (Class TZ) (Subclass 417) visa under the Migration Act 1958 (Cth) (a "working holiday visa")1. Ms Addy travelled to Australia on her British passport and, on 20 August 2015, entered Australia on her working holiday visa. Between August 2015 and May 2017, Ms Addy primarily lived and worked in Australia while holding a working holiday visa. During the 2017 income year, Ms Addy derived taxable income of $26,576 working in casual employment as a food and beverage waiter in Sydney. In December 2016, a new tax rate applicable to persons holding working holiday visas was enacted by inserting a new Pt III into Sch 7 to the Income Tax Rates Act 1986 (Cth) ("the Rates Act"), to take effect in relation to assessable income derived on or after 1 January 20172. Part III applied a flat rate of tax of 15 per cent to the first $37,000 of an individual's "working holiday taxable income"3, a maximum tax liability of $5,550. Under Pt I of Sch 7 to the Rates Act, the tax burden for an Australian national deriving taxable income from the same source as an individual earning working holiday taxable income during the same period would be less; they were entitled to a tax-free threshold for the first $18,200 and were then taxed at 19 per cent up to $37,0004, a maximum tax liability of Australia and the United Kingdom are signatories to the Convention between the Government of Australia and the Government of the United Kingdom of Great Britain and Northern Ireland for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and on Capital 1 The tax rates applicable to holders of working holiday visas under Pt III of Sch 7 to the Income Tax Rates Act 1986 (Cth) also relevantly apply to holders of a Work and Holiday (Temporary) (Class US) (Subclass 462) visa: s 3A(1). Income Tax Rates Amendment (Working Holiday Maker Reform) Act 2016 (Cth), s 2 and Sch 1, items 7 and 8. 3 Rates Act, Sch 7, Pt III, cl 1, table item 1. 4 Rates Act, Sch 7, Pt I, cl 1, table item 1 read with s 3(1) definition of "tax-free threshold". Gordon Edelman Gleeson Gains ("the United Kingdom convention")5 made at Canberra in August 2003. The United Kingdom convention entered into force, and was incorporated into Australian domestic law, on 17 December 20036. Article 25(1) of the United Kingdom convention relevantly provides that nationals of the United Kingdom shall not be subjected in Australia to "other or more burdensome" taxation than is imposed on Australian nationals "in the same circumstances, in particular with respect to residence". It prevails7 over the Income Tax Assessment Act 1936 (Cth) (other than Pt IVA) and the Income Tax Assessment Act 1997 (Cth)8 ("the Assessment Acts"), as well as a law imposing taxation, to the extent of any inconsistency. the 20 December Commissioner Taxation ("the Commissioner") issued Ms Addy with an amended notice of assessment for the 2017 income year which applied Pt III of Sch 7 to Ms Addy's assessable income after 1 January 20179. Ms Addy objected to the assessment on the relevant ground that the application of Pt III of Sch 7 to her assessable income contravened Art 25(1) of the United Kingdom convention. The Commissioner disallowed Ms Addy's objection. The Commissioner found that Ms Addy was "an Australian resident year" and a "working holiday maker" earning "working holiday taxable income" within the meaning of s 3A of the Rates Act and was, therefore, subject to the tax [income] purposes taxation during the for [2003] ATS 22. International Tax Agreements Act 1953 (Cth), ss 4 and 5(1) read with s 3AAA(1) definition of "United Kingdom convention"; International Tax Agreements Amendment Act 2003 (Cth), Sch 1. International Tax Agreements Act, ss 4 and 5(1). See Commissioner of Taxation v Lamesa Holdings BV (1997) 77 FCR 597 at 600; Satyam Computer Services Ltd v Federal Commissioner of Taxation (2018) 266 FCR 502 at 506-507 [16]-[17]; Burton v Federal Commissioner of Taxation (2019) 271 FCR 548 at 555 [42], 575-576 [113]. See also Australia, House of Representatives, International Tax Agreements Amendment Bill 2003, Explanatory Memorandum at 89 [1.327]. See International Tax Agreements Act, s 3(1) definition of "Assessment Act". 9 The Commissioner had issued Ms Addy with previous assessments in respect of the year ended 30 June 2017 which are not presently relevant. Gordon Edelman Gleeson rates in Pt III of Sch 7. But, the Commissioner did not accept Ms Addy's ground of objection based on Art 25(1) of the United Kingdom convention. Ms Addy commenced proceedings in the Federal Court of Australia appealing the objection decision. The Federal Court allowed the appeal and ordered that the matter be remitted to the Commissioner for the making of a consequential amended assessment. An appeal by the Commissioner to the Full Court of the Federal Court was allowed by majority. Ms Addy sought and was granted special leave to appeal to this Court. The sole ground of appeal was that the majority in the Full Court erred in holding that Ms Addy should not obtain relief under Art 25(1). The principal question before this Court was whether, in contravention of Art 25(1) of the United Kingdom convention, Pt III of Sch 7 to the Rates Act imposed a more burdensome taxation requirement on Ms Addy, a national of the United Kingdom, than that imposed on an Australian national in the same circumstances. That question is ultimately a question of domestic law and, as with the application of any domestic taxing law, the question is specific to a taxpayer in a specific income year and the answer may vary within any income year10. That is, of course, not to deny that transposed text of Articles in the United Kingdom convention that are applied as domestic law "should bear the same meaning in the domestic statute as it bears in the treaty"11. There was no dispute in this Court that Ms Addy was a "national" of the United Kingdom as defined in Art 3(1) of the United Kingdom convention, that Ms Addy was an Australian "resident" for tax purposes during the 2017 income year12 and that the rates in Pt III of Sch 7 to the Rates Act imposed taxation that was "other or more burdensome" than that which applied to resident Australian nationals. 10 See, eg, Australia, House of Representatives, Income Tax Rates Amendment (Working Holiday Maker Reform) Bill 2016, Explanatory Memorandum at 4 [1.4]. 11 Applicant A v Minister for Immigration and Ethnic Affairs (1997) 190 CLR 225 at 230-231, citing Koowarta v Bjelke-Petersen (1982) 153 CLR 168 at 265. See also Povey v Qantas Airways Ltd (2005) 223 CLR 189 at 202 [25], 230 [128] and the authorities cited there; Federal Commissioner of Taxation v SNF (Australia) Pty Ltd (2011) 193 FCR 149 at 186 [119]-[120]; Bywater Investments Ltd v Federal Commissioner of Taxation (2016) 260 CLR 169 at 224 [147]. Income Tax Assessment Act 1936, s 6(1) definition of "resident" para (a)(ii). Gordon Edelman Gleeson The question is whether that more burdensome taxation was imposed on Ms Addy owing to her nationality. The short answer is "yes". When the position of Ms Addy is compared with that of an Australian national, as it must be, that is the only conclusion which may be drawn. Pt III of Sch 7 to the Rates Act was applied to Ms Addy, a national of the United Kingdom. Ms Addy's circumstances in the 2017 income year including that of her residency in Australia for taxation purposes were relevantly the same as an Australian national. She did the same kind of work and earned the same amount of income from the same source; yet an Australian national was required by Pt I of Sch 7 to the Rates Act to pay less tax. In contravention of Art 25(1) of the United Kingdom convention, the more burdensome taxation was imposed on Ms Addy owing to her nationality and, for that reason, the tax rates in Pt III of Sch 7 did not apply to Ms Addy in the 2017 income year. The appeal should be allowed. Legislative framework The Income Tax Act 1986 (Cth) incorporates the Assessment Acts and imposes income tax at the rates declared by the Rates Act13. The Assessment Acts relevantly contain the ordinary taxing provisions for taxpayers. Income tax, payable by an individual in any income year14, is worked out by reference to a less any allowable taxpayer's deductions β multiplied by the applicable income tax rate or rates in the Rates Act, less any tax offsets16. income15 β all assessable income taxable Prior to the introduction of Pt III of Sch 7 in 2016, the Rates Act provided differential tax rates on the taxable income of a "resident taxpayer"17 and a Income Tax Act, ss 4 and 5(1); Income Tax Assessment Act 1936, s 6(1) definition of "this Act". Income Tax Assessment Act 1997, ss 3-5(1), 4-1, 4-10(1), 9-1. Income Tax Assessment Act 1997, ss 4-10(2), 4-15(1), Div 8 of Pt 1-3. Income Tax Assessment Act 1997, s 4-10(3). 17 Rates Act, s 12(1) and Sch 7, Pt I read with s 3(1) definition of "resident taxpayer" (as in force on 1 December 2016). Gordon Edelman Gleeson "non-resident taxpayer"18. For waiters working in Sydney who were residents of Australia for tax purposes in a year of income, the tax rate was the same regardless of nationality β they were entitled to a tax-free threshold for the first $18,200 and were then taxed at 19 per cent up to $37,00019. The tax rate applied to the taxable income of a taxpayer deriving income in Australia calculated under the Assessment Acts and imposed by the Income Tax Act depended on residency for Australian tax purposes, not nationality. It did not depend on whether the taxpayer held a working holiday visa20. Part III of Sch 7 to the Rates Act Part III of Sch 7, however, applied a 15 per cent income tax rate to "working holiday taxable income"21 derived by a "working holiday maker" on amounts up to $37,000, with ordinary income tax rates applying for income exceeding this amount22. An individual was a "working holiday maker" if the person relevantly held a working holiday visa, or a bridging visa granted in relation to a working holiday visa, under the Migration Act23. At the relevant times, to be eligible for a working holiday visa, a person had to be aged 18 to 30; be a citizen 18 Rates Act, s 12(1) and Sch 7, Pt II read with s 3(1) definition of "non-resident taxpayer" (as in force on 1 December 2016). 19 Rates Act, Sch 7, Pt I, cl 1, table item 1 read with s 3(1) definition of "tax-free threshold" (as in force on 1 December 2016). 20 cf Income Tax Rates Amendment (Working Holiday Maker Reform) Act, Sch 1, item 7. 21 Rates Act, s 3A(2): "working holiday taxable income" was relevantly defined as an individual's assessable income for the year of income derived from sources in Australia while the individual was a working holiday maker, less related deductions. Section 3A(3) provided that the individual's working holiday taxable income does not include any superannuation remainder or employment termination remainder of the individual's taxable income for the year of income. 22 Australia, House of Representatives, Income Tax Rates Amendment (Working Holiday Maker Reform) Bill 2016, Explanatory Memorandum at 3-4 23 Rates Act, s 3A(1). Gordon Edelman Gleeson of, and hold a passport from, an eligible country; and apply for the visa from outside Australia if they had not previously held a working holiday visa24. The United Kingdom was an eligible country. Part III of Sch 7, which applied irrespective of whether a "working holiday maker" was a resident of Australia for tax purposes, was enacted to "increase Australia's attractiveness as a destination of choice for working holiday makers, whilst ensuring that they pay tax at a fair rate on their earnings in Australia"25. United Kingdom convention The United Kingdom convention is one of a number of bilateral agreements, or treaties, concluded between Australia and other countries based upon the Model Tax Convention on Income and on Capital, which was published by the Organisation for Economic Co-operation and Development ("the OECD Model Convention")26. The bilateral agreements, or treaties, based on the OECD Model Convention allocate the taxing powers between the two Contracting States27, in this case the United Kingdom and Australia. 24 Migration Regulations 1994 item 1225(3A) and Sch 2, (Cth), Sch 1, cl 417.211(1)-(2) read with cl 417.111 definition of "working holiday eligible passport"; Arrangements for Work and Holiday and Working Holiday Visa Applications 2015 (IMMI 15/040); Arrangements for Work and Holiday and Working Holiday Visa Applications 2016/056 (IMMI 16/056). It is unnecessary to address the other requirements. 25 Australia, House of Representatives, Income Tax Rates Amendment (Working Holiday Maker Reform) Bill 2016, Explanatory Memorandum at 3 [1.2]. 26 The OECD first published the OECD Model Convention in 1977, having previously published the Draft Double Taxation Convention on Income and Capital in 1963. In 1997, the OECD Council recommended that member countries conform to the OECD Model Convention when concluding and applying bilateral tax conventions on income and capital: see OECD, Recommendation of the Council concerning the Model Tax Convention on Income and on Capital (23 October 1997) at [I.2]-[I.3]. 27 See, eg, Chong v Commissioner of Taxation (2000) 101 FCR 134 at 141-142 [26]; GE Capital Finance Pty Ltd v Federal Commissioner of Taxation (2007) 159 FCR 473 at 482 [36]; Undershaft (No 1) Ltd v Federal Commissioner of Taxation (2009) 175 FCR 150 at 161 [45]-[46]; Chevron Australia Holdings Pty Ltd v Federal Commissioner of Taxation [No 4] (2015) 102 ATR 13 at 40-44 [50]-[60]; Gordon Edelman Gleeson One of the purposes of the United Kingdom convention was to "updat[e] all the Articles, having regard to Australian, United Kingdom and OECD tax treaty developments since the existing treaty was entered into and later revised in 1980[28]"29. Prior to 2003, Australia had only ever agreed to the inclusion of a non-discrimination clause in its double taxation treaty with the United States, which was not incorporated into Australian domestic law30. The inclusion of a binding non-discrimination clause in the United Kingdom convention followed, and was expressly introduced in response to, a recommendation made by the Review of Business Taxation identifying Australia as the only OECD country which did not include a non-discrimination clause in its double taxation treaties31. The United Kingdom convention, incorporated into Australian domestic law, applies, among other things, to "the income tax ... imposed under the federal Satyam Computer Services (2018) 266 FCR 502 at 509 [26]; Burton (2019) 271 FCR 548 at 575-576 [113]. 28 Agreement between the Government of the Commonwealth of Australia and the Government of the United Kingdom of Great Britain and Northern Ireland for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and Capital Gains [1968] ATS 9 and the Protocol to that Agreement (see [1980] ATS 22). 29 Australia, House of Representatives, International Tax Agreements Amendment Bill 2003, Explanatory Memorandum at 17 [1.4]. 30 Australia, House of Representatives, International Tax Agreements Amendment Bill 2003, Explanatory Memorandum at 73 [1.243]. 31 Review of Business Taxation, A Tax System Redesigned: More Certain, Equitable and Durable (1999) at 678 [22.22]; Australia, House of Representatives, International Tax Agreements Amendment Bill 2003, Explanatory Memorandum at 73 [1.244]. Since entering into the United Kingdom convention, Australia has concluded binding agreements containing non-discrimination clauses based on the OECD Model Convention with 11 countries, all of which have been incorporated into Australian domestic law. The countries are Norway, Finland, Japan, South Africa, New Zealand, Chile, Turkey, India, Switzerland, Germany and Israel: see International Tax Agreements Act, ss 3AAA(1) and 5(1). Gordon Edelman Gleeson law of Australia"32. Article 14, headed "Income from employment", relevantly provides that salaries, wages and other, similar remuneration derived by a resident of a Contracting State in respect of employment shall be taxable only in that Contracting State. A person is a "resident" of Australia if they are a resident of Australia for the purposes of Australian tax33. As has been observed, Ms Addy was a resident of Australia for the purposes of Australian tax, she derived wages in Australia and her wages were taxed in Australia. Article 25(1) of the United Kingdom convention, however, provides: "Nationals of a Contracting State [the United Kingdom] shall not be subjected in the other Contracting State [Australia] to any taxation or any requirement connected therewith, which is other or more burdensome than the taxation and connected requirements to which nationals of that other State [Australia] in the same circumstances, in particular with respect to residence, are or may be subjected." (emphasis added) There was no dispute in this Court that, under the United Kingdom convention, Ms Addy was a "national" of the United Kingdom34, being a British citizen who had the right of abode in the United Kingdom. In its terms, Art 25(1) disapplies any domestic taxing provision which imposes different or more onerous the tax United Kingdom in Australia than that imposed on Australian nationals deriving the same income from the same source in the same circumstances. The authors of Klaus Vogel on Double Taxation Conventions explained the effect of non-discrimination clauses like Art 25(1) in these terms35: treatment on nationals of "All provisions of national law discriminating against certain categories of persons ... are overridden to the extent that one or more of the 32 United Kingdom convention, Art 25(7) read with Art 2(1)(b). 33 United Kingdom convention, Art 4(1)(b). 34 "[N]ational", in relation to the United Kingdom, is relevantly defined to mean "any British citizen, or any British subject not possessing the citizenship of any other Commonwealth country or territory, provided that individual has the right of abode in the United Kingdom": United Kingdom convention, Art 3(1)(l)(i). 35 Reimer and Rust (eds), Klaus Vogel on Double Taxation Conventions, 4th ed (2015), vol II at 1683 [2] (footnote omitted). Gordon Edelman Gleeson non-discrimination rules apply. Instead of such discriminatory provisions, the more advantageous domestic rules laid down for a state's own nationals or residents, as the case may be, become applicable." (emphasis added) Issues In this Court, it was common ground that Art 25(1) requires a comparison to be made between a national of the United Kingdom, Ms Addy, and a hypothetical taxpayer in the same circumstances and that if the comparison showed that the tax burden imposed by Pt III of Sch 7 to the Rates Act was higher for Ms Addy by reason of her nationality, then Art 25(1) prevented the imposition of the excess taxation. The dispute between the parties was the basis for, and content of, the comparator. Ms Addy contended, first, that Art 25(1) is not confined to prohibiting discriminatory treatment based solely on nationality (such that the paragraph would also prohibit discriminatory tax treatment based on, for example, ethnicity). Second, Ms Addy contended that, in any event, contrary to Art 25(1), Pt III of Sch 7 does discriminate solely on the basis of nationality. The Commissioner, on the other hand, contended that Art 25(1) is concerned with differential taxation that is imposed solely by reason of nationality, but that here the differential rates were imposed because of Ms Addy's visa type and not her nationality. The Commissioner further submitted that the words "in the same circumstances" in Art 25(1) mean "identical in all matters relevant to the imposition of taxation except nationality" and that, because here "it was not possible for an Australian national to earn working holiday income while holding a working holiday visa", an Australian national could never be "in the same circumstances" as Ms Addy. Accordingly, the Commissioner submitted, Art 25(1) was not engaged. Decisions below The primary judge held that the rates of tax in Pt III of Sch 7 did discriminate against Ms Addy on the basis of her nationality in contravention of Art 25(1). The primary judge remitted the matter to the Commissioner for the making of an amended assessment on the footing that, until 1 May 2017 (when Ms Addy left Australia), Ms Addy was a "resident" as defined by s 6(1) of the Income Tax Assessment Act 1936 and that the rates of tax specified in Pt III of Sch 7 to the Rates Act did not apply to her income from 1 January 2017. The Commissioner's appeal to the Full Court of the Federal Court was allowed by majority. Derrington J held that Art 25(1) was not infringed because the holding of a particular type of visa was not necessarily bound to nationality, Gordon Edelman Gleeson such that there was no causal nexus between Ms Addy's nationality and her liability to pay tax at the rates imposed by Pt III of Sch 7. His Honour reasoned that although Ms Addy held a working holiday visa, she did not hold it because she was a British national: it was "not a necessary concomitant" of her nationality. His Honour further held that the comparison that was required to be made under Art 25(1) could not be undertaken because holding a working holiday visa was a distinguishing tax-related characteristic which could not be excluded when attempting to make the required comparison. Steward J reasoned to a similar effect. His Honour held that Art 25(1) was not offended because it was "no part of the discrimen" for the application of the rates in Pt III of Sch 7 that a person bear any particular nationality. His Honour reached that conclusion on two primary bases: first, that s 3A of the Rates Act did "not refer at all to a person's nationality"; and second, that the circumstances of the hypothetical taxpayer that go to, or affect, tax liability had to be the "same" in order for Art 25(1) to be engaged and the circumstances therefore had to include the holding of the same visa. In dissent, Davies J held that taxation at the rates in Pt III of Sch 7 infringed Art 25(1) because the designation of a person as a "working holiday maker" for tax purposes was based upon the taxpayer's foreign nationality and visa status and the requirement to hold a visa arose directly from, and could not "sensibly be divorced from", the person's nationality. Construction of Art 25(1) The principles of interpretation applicable to a tax treaty are well settled36. Although the text of the treaty is the starting point and has primacy in the interpretation process, it is mandatory "that courts look to the context, object and 36 Thiel v Federal Commissioner of Taxation (1990) 171 CLR 338 at 349, 356; Applicant A (1997) 190 CLR 225 at 251-256; Bywater Investments (2016) 260 CLR 169 at 227-228 [165]-[167]. See also Lamesa Holdings (1997) 77 FCR 597 at 604-605; McDermott Industries (Aust) Pty Ltd v Commissioner of Taxation (2005) 142 FCR 134 at 143 [37]-[38]; SNF (Australia) (2011) 193 FCR 149 at 184 [113], 186 [119]-[120]; Resource Capital Fund III LP v Federal Commissioner of Taxation (2013) 95 ATR 504 at 516-521 [46]-[53]; Task Technology Pty Ltd v Federal Commissioner of Taxation (2014) 224 FCR 355 at 358 [12]; Tech Mahindra Ltd v Federal Commissioner of Taxation (2015) 101 ATR 755 at 768-771 [51]-[61]. Gordon Edelman Gleeson purpose of treaty provisions as well as the text ... consistent with the general principle that international instruments should be interpreted in a more liberal manner than would be adopted if the court was required to construe exclusively domestic legislation"37. Article 25(1), as a matter of ordinary language, requires a comparison between a national of the United Kingdom and an Australian national who is, otherwise than with respect to nationality, "in the same circumstances, in particular with respect to residence". In the present case, Ms Addy was, for the purposes of Art 25(1), a resident of Australia for Australian tax purposes38. The question presented by Art 25(1) was whether Pt III of Sch 7 to the Rates Act imposed more burdensome taxation on her than on an Australian national resident in Australia for Australian tax purposes "in the same circumstances". This directs attention to what is meant by "in the same circumstances" in Art 25(1). Throughout these proceedings, the Commissioner submitted that the appropriate hypothetical comparator under Art 25(1) is a "notional Australian national" whose circumstances are "identical in all matters relevant to the imposition of taxation except nationality". The Commissioner contended that, because s 29 of the Migration Act ensures that an Australian national cannot hold a working holiday visa39, no comparison of the kind required by Art 25(1) is possible, and Art 25(1) is not engaged. In support of this submission, the Commissioner relied on the decision of the Court of Appeal of New Zealand in Commissioner of Inland Revenue v United 37 Applicant A (1997) 190 CLR 225 at 255; see also 231, 240, 253-255. See also Lamesa Holdings (1997) 77 FCR 597 at 604-605; Vienna Convention on the Law of Treaties (1969), Art 31. The principles in the Vienna Convention apply even though that Convention has not been enacted as part of the law of Australia: see Minister for Immigration and Multicultural and Indigenous Affairs v QAAH of 2004 (2006) 231 CLR 1 at 15 [34]. Income Tax Assessment Act 1936, s 6(1) definition of "resident" para (a)(ii). See also United Kingdom convention, Art 4(1)(b). 39 Subject to some supposed exceptions identified by the Commissioner in oral argument which are referred to below. Gordon Edelman Gleeson Dominions Trust Ltd40. There, the Court observed that "in the same circumstances" for the purposes of a largely equivalent non-discrimination clause meant "in substantially identical circumstances in all areas except nationality", the word "same" being said to connote "uniformity, ... exactness in comparison"41. In that case, the taxpayer, a company incorporated in (and a national and resident of) the United Kingdom, had argued that more burdensome taxation imposed on companies that are nationals of the United Kingdom constituted discrimination based on nationality42. The Commissioner's reliance on United Dominions Trust is misplaced. The Court of Appeal held that the additional taxation imposed on the taxpayer was based on residence, not nationality, a permissible ground of differential treatment under the applicable double taxation agreement between the United Kingdom and New Zealand43. The same is true of the United Kingdom convention. Article 25(1), as well as Art 25(5), make explicit that foreign residency is a permissible basis for imposing other or more burdensome tax requirements on foreign nationals β accordingly, if Ms Addy were a non-resident "working holiday maker", Art 25(1) would offer no relief. But this is of no assistance in the present case: it is precisely because of the Commissioner's initial acceptance of Ms Addy's status as an Australian resident for tax purposes that Ms Addy's objection to her assessment was chosen by the parties as a "test case" to determine the effect of Art 25(1). With respect to tax residency during the relevant period, at least, there is no doubt that Ms Addy was "in the same circumstances" as an Australian national who was also a tax resident. There is a further difficulty with the Commissioner's submission that no comparison is possible under Art 25(1). The difficulty is that, consistent with the text, context, object and purpose of Art 25(1), the relevant comparator is the hypothetical taxpayer in the same circumstances apart from the criterion on which the claim of discriminatory taxation is based44. The phrase "in the same [1973] 2 NZLR 555. 41 United Dominions Trust [1973] 2 NZLR 555 at 561; see also 566, 568, 575. 42 United Dominions Trust [1973] 2 NZLR 555 at 557. 43 United Dominions Trust [1973] 2 NZLR 555 at 562, 566, 574. 44 cf Purvis v New South Wales (2003) 217 CLR 92 at 131-133 [119]-[123] and authorities cited there, 160-161 [222]-[224]. See generally Avery Jones et al, Gordon Edelman Gleeson circumstances" means in the same circumstances apart from those circumstances attached to the prohibited basis for discriminatory taxation. Here, that is visa status, a characteristic which depends on nationality β a person not being an Australian national β the very attribute protected by Art 25(1). The question presented by Art 25(1) is not assisted by asking whether the distinction that Pt III of Sch 7 draws between taxpayers is based on some "proxy for nationality" or depends "solely" or "only" on nationality. Rather, the inquiry about Art 25(1) in this case must begin by recognising that the Rates Act differentiates between Australian residents for tax purposes who hold certain forms of visa and others who do not hold a visa. The visas β working holiday visas β are sought by and issued to non-citizens of Australia. Hypothetical cases at the outer limits in which an Australian citizen might in the most strained and distorted circumstances hold a working holiday visa can be and should be put aside. Discrimination jurisprudence establishes that the circumstances of the person alleged to have suffered discriminatory treatment and which are related to the prohibited ground are to be excluded from the circumstances of the comparator45. In sum, the "same circumstances" that must be considered of the hypothetical comparator cannot include being or not being the holder of a working holiday visa just as they cannot include being or not being an Australian national. The Commissioner's contention that a comparison is not possible in the present case because an Australian national cannot hold a working holiday visa is rejected. The question then is whether the more burdensome taxation imposed on those holding a working holiday visa, which depends upon being not an Australian national, contravenes Art 25(1). The short answer is "yes": applying the ordinary taxation laws to an Australian national in substantially similar circumstances deriving the same income from the same source (that is, "in the same circumstances" in all respects relevant to taxation excluding the protected "The Non-Discrimination Article in Tax Treaties β I" (1991) 10 British Tax Review 45 Purvis (2003) 217 CLR 92 at 131 [119]. Gordon Edelman Gleeson characteristic and consequences flowing from the protected characteristic), they would be taxed at the lower rates under Pt I of Sch 746. That construction of Art 25(1) is consistent with the commentary that accompanied the OECD Model Convention at the time Australia and the United Kingdom made the United Kingdom convention. The OECD commentaries can be used in construing Art 2547. Article 25(1) is in largely the same terms as Art 24(1) of the OECD Model Convention. The commentary on Art 24 relevantly stated48: This paragraph establishes the principle that for purposes of taxation discrimination on the grounds of nationality is forbidden, and that, subject to reciprocity, the nationals of a Contracting State may not be less favourably treated in the other Contracting State than nationals of the latter State in the same circumstances. The expression 'in the same circumstances' refers to taxpayers (individuals ...) placed, from the point of view of the application of the ordinary in substantially similar circumstances both in law and in fact. ... laws and regulations, taxation In applying paragraph 1, therefore, the underlying question is whether two persons who are residents of the same State are being treated differently solely by reason of having a different nationality. ... Furthermore, paragraph 1 has been deliberately framed in a negative form. By providing that the nationals of a Contracting State may not be subjected in the other Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which nationals of the other Contracting 46 See Reimer and Rust (eds), Klaus Vogel on Double Taxation Conventions, 4th ed (2015), vol II at 1695 [35]. 47 Thiel (1990) 171 CLR 338 at 344, 349-350, 356-357; Bywater Investments (2016) 260 CLR 169 at 228-229 [167]-[169]. See also fnn 36-37 above. 48 OECD, Model Tax Convention on Income and on Capital (Condensed Version) Gordon Edelman Gleeson State in the same circumstances are or may be subjected, this paragraph has the same mandatory force as if it enjoined the Contracting States to accord the same treatment to their respective nationals. But since the principal object of this clause is to forbid discrimination in one State against the nationals of the other, there is nothing to prevent the first State from granting to persons of foreign nationality, for special reasons of its own, or in order to comply with a special stipulation in a double taxation convention, ... certain concessions or facilities which are not available to its own nationals. As it is worded, paragraph 1 would not prohibit this. Subject to the foregoing observation, the words '...shall not be subjected... to any taxation or any requirement connected therewith which is other or more burdensome...' mean that when a tax is imposed on nationals and foreigners in the same circumstances, it must be in the same form as regards both the basis of charge and the method of assessment, its rate must be the same and, finally, the formalities connected with the taxation (returns, payment, prescribed times, etc) must not be more onerous for foreigners than for nationals." (emphasis added) Two aspects of that commentary reinforce the construction adopted. First, the "underlying question is whether two persons who are residents of the same State are being treated differently solely by reason of having a different nationality"49 (emphasis added). Ms Addy's contention that Art 25(1) should be construed as providing relief from the imposition of a higher tax burden other than on the basis of nationality is contrary to the text, context, object and purpose of Art 25 read as a whole and as reinforced by the OECD commentary on Art 25(1). Second, the commentary recognises that the phrase "in the same circumstances" refers to taxpayers, "from the point of view of the application of the ordinary taxation laws and regulations, in substantially similar circumstances both in law and in fact"50 and that "when a tax is imposed on nationals and foreigners in the same circumstances, it must be in the same form as regards both the basis of charge 49 OECD, Model Tax Convention on Income and on Capital (Condensed Version) 50 OECD, Model Tax Convention on Income and on Capital (Condensed Version) Gordon Edelman Gleeson and the method of assessment, its rate must be the same"51 (emphasis added). Or, put in different terms, it enjoins52 Australia to accord the same treatment to a national of the United Kingdom. In the present case, the application of the ordinary taxation laws β the basis of the charge and the method of assessment in relation to the taxable income of Australian nationals and nationals of the United Kingdom in the same circumstances β was the same, but the tax rate was not. The tax rate was more onerous for Ms Addy, a national of the United Kingdom, than it was for an Australian national in the same circumstances β doing the same work, earning the same income, under the same ordinary taxation laws. Since the making of the United Kingdom convention, the OECD has published further commentaries on the OECD Model Convention53. It is not necessary to decide if or on what basis the subsequent commentaries might be used54. It is sufficient to note that because Australia signed the United Kingdom convention in August 2003 and then incorporated it (including an amended version of Art 24 of the OECD Model Convention55) into Australian domestic law in December 200356, no question arises about Australia's recorded reservations to 51 OECD, Model Tax Convention on Income and on Capital (Condensed Version) 52 OECD, Model Tax Convention on Income and on Capital (Condensed Version) In 1991, the OECD Committee on Fiscal Affairs adopted the concept of "an ambulatory Model Convention providing periodic and more timely updates and amendments" to "ensure that the Model Convention continues to reflect accurately the views of Member countries at any point in time": OECD, Model Tax Convention on Income and on Capital (Condensed Version) (2003) at 9 [9], [11]; see also 7 [3]. 54 See Federal Commissioner of Taxation v Pike (2020) 280 FCR 429 at 445-446 [28]; cf Burton (2019) 271 FCR 548 at 579-580 [124]. 55 See Australia, House of Representatives, International Tax Agreements Amendment Bill 2003, Explanatory Memorandum at 73 [1.245], 75 [1.255], [1.257], International Tax Agreements Amendment Act 2003, Sch 1. Gordon Edelman Gleeson Art 24 support58, or at least are not inconsistent with, the construction adopted. in January 200357. Moreover, the subsequent OECD commentaries Conclusion and orders For those reasons, the appeal should be allowed with costs. Orders 1 and 3 of the orders made by the Full Court of the Federal Court on 6 August 2020 should be set aside and, in their place, it should be ordered that the appeal be dismissed. 57 OECD, Model Tax Convention on Income and on Capital (Condensed Version) 58 See, eg, OECD, Model Tax Convention on Income and on Capital (Full Version) (2017) at C(24)-1 [1]. See generally Reimer and Rust (eds), Klaus Vogel on Double Taxation Conventions, 4th ed (2015), vol I at 49 [106]. |
HIGH COURT OF AUSTRALIA ATTORNEY-GENERAL FOR THE NORTHERN TERRITORY & ANOR APPELLANTS AND REGINALD WILLIAM EMMERSON & ANOR RESPONDENTS Attorney-General (NT) v Emmerson [2014] HCA 13 10 April 2014 ORDER Appeal allowed. Set aside the order of the Court of Appeal of the Northern Territory made on 28 March 2013 and paragraphs 1, 2 and 4 (first appearing) of the order of the Court of Appeal made on 13 May 2013 and, in their place, order that the appeal to that Court be otherwise dismissed with costs. The second appellant pay the first respondent's costs in this Court. On appeal from the Supreme Court of the Northern Territory Representation M P Grant QC, Solicitor-General for the Northern Territory with R H Bruxner and S L Brownhill for the appellants (instructed by Solicitor for the Northern Territory) A Wyvill SC and N Christrup with P W Johnston for the first respondent (instructed by Ward Keller Lawyers) Submitting appearance for the second respondent Interveners J T Gleeson SC, Solicitor-General of the Commonwealth with C J Horan for the Attorney-General of the Commonwealth, intervening (instructed by Australian Government Solicitor) M G Sexton SC, Solicitor-General for the State of New South Wales with N L Sharp for the Attorney-General for the State of New South Wales, intervening (instructed by Crown Solicitor (NSW)) W Sofronoff QC, Solicitor-General of the State of Queensland with G J D del Villar for the Attorney-General of the State of Queensland, intervening (instructed by Crown Law (Qld)) M G Hinton QC, Solicitor-General for the State of South Australia with A C Carter for the Attorney-General for the State of South Australia, intervening (instructed by Crown Solicitor (SA)) G R Donaldson SC, Solicitor-General for the State of Western Australia with K E McDonald for the Attorney-General for the State of Western Australia, intervening (instructed by State Solicitor (WA)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Attorney-General (NT) v Emmerson Constitutional law (Cth) β Judicial power of the Commonwealth β Constitution, Ch III β Section 36A of Misuse of Drugs Act (NT) and s 94 of Criminal Property Forfeiture Act (NT) effect statutory scheme for forfeiture of property β Section 36A provides that Supreme Court can declare a person to be a "drug trafficker" β Section 94(1) provides for forfeiture to Northern Territory of property subject to restraining order that is owned, effectively controlled or given away by that person β Where Director of Public Prosecutions successfully applied to Supreme Court for declaration that first respondent was a drug trafficker β Whether statutory scheme enlists Supreme Court to give effect to decisions of Executive β Whether statutory scheme compatible with independence and institutional integrity of Supreme Court as repository of federal jurisdiction. Legislative power β Acquisition of property on just terms β Section 50(1) of Northern Territory (Self-Government) Act 1978 (Cth) provides that power of Northern Territory Legislative Assembly does not extend to making laws with respect to acquisition of property otherwise than on just terms β Where statutory scheme provides for forfeiture to Northern Territory of property subject to restraining order that is owned, effectively controlled or given away by person declared to be a "drug trafficker" β Whether statutory scheme effects acquisition of property otherwise than on just terms. Words and phrases β "acquisition of property", "forfeiture", "institutional integrity", "just terms", "Kable principle". Constitution, Ch III, s 51(xxxi). Criminal Property Forfeiture Act (NT), ss 3, 10, 44, 52(3), 94. Criminal Property Forfeiture (Consequential Amendments) Act 2002 (NT). Misuse of Drugs Act (NT), s 36A. Northern Territory (Self-Government) Act 1978 (Cth), s 50(1). FRENCH CJ, HAYNE, CRENNAN, KIEFEL, BELL AND KEANE JJ. The sole ground in this appeal from the Court of Appeal of the Northern Territory (Kelly and Barr JJ, Riley CJ dissenting)1 is error in that Court in holding invalid a statutory scheme for the forfeiture of property, effected by the combined operation of s 36A of the Misuse of Drugs Act (NT) and s 94 of the Criminal Property Forfeiture Act (NT) ("the Forfeiture Act"). Section 36A of the Misuse of Drugs Act provides that the Supreme Court of the Northern Territory can declare that a person who, within a 10 year period, has been convicted three or more times of certain offences is a "drug trafficker". Section 94(1) of the Forfeiture Act provides for the forfeiture to the Northern Territory of property owned, effectively controlled or given away by that person without the need for further curial order. The Director of Public Prosecutions ("the DPP") applied to the Supreme Court for a declaration that the first respondent was a drug trafficker. It was not contested that the relevant conditions specified in s 36A were satisfied2, or that the property listed in an extant restraining order was owned or effectively controlled by the first respondent3 as required by s 94(1). The questions The principal questions raised in the appeal are whether the provisions are beyond the legislative power of the Northern Territory Legislative Assembly, and invalid, either for contravention of the principle first stated in Kable v Director of Public Prosecutions (NSW)4 or for contravention of the limitation5 on legislative power that the power does not extend to the making of laws with respect to the acquisition of property otherwise than on just terms. 1 Emmerson v Director of Public Prosecutions (2013) 33 NTLR 1. 2 Director of Public Prosecutions v Emmerson (2012) 32 NTLR 180 at 196 [23]; Emmerson v Director of Public Prosecutions (2013) 33 NTLR 1 at 9 [6]. 3 Director of Public Prosecutions v Emmerson (2012) 32 NTLR 180 at 197 [34]. (1996) 189 CLR 51; [1996] HCA 24. 5 Northern Territory (Self-Government) Act 1978 (Cth), s 50(1). Hayne Crennan Bell Both questions should be answered "No". A subsidiary issue regarding the construction and application of s 52(3) of the Forfeiture Act, in the particular circumstances of the first respondent, should also be resolved against the first respondent and in favour of the appellants. The course of proceedings Between August 2007 and September 2011, the first respondent was convicted of a series of drug-related offences. Two of those offences, the subject of charges laid on 21 February 2011, were the supply of 18.6646kg of cannabis and the possession of $70,050, which the first respondent was alleged to have obtained directly from the commission of offences under the Misuse of Drugs Act. On 28 February 2011, the DPP applied to the Supreme Court for a restraining order pursuant to ss 41(2) and 44 of the Forfeiture Act on the basis that, if the first respondent were to be found guilty of the offence of supplying 18.6646kg of cannabis, his history of drug offences during the previous 10 years meant that he was likely to be declared a drug trafficker under s 36A(3) of the Misuse of Drugs Act. As a consequence, the first respondent's property would be forfeited to the Northern Territory (the second appellant) under s 94(1) of the Forfeiture Act. On 2 March 2011, an interim restraining order was made over some of the first respondent's property. On 11 April 2011, the Supreme Court (Mildren J) made a further restraining order, by consent, in respect of all real and personal property owned or effectively controlled by the first respondent 6. It was common ground that, apart from the $70,050 seized from the first respondent, the rest of the property subject to the restraining order was not "crime-derived property" 7, "crime-used property"8 or "unexplained wealth"9 within the meaning of those expressions in the Forfeiture Act. Rather, it was property (valued in excess of 6 Emmerson v Director of Public Prosecutions (2013) 33 NTLR 1 at 9 [4]. 7 Forfeiture Act, s 12. 8 Forfeiture Act, s 11. 9 Forfeiture Act, s 68. Hayne Crennan Bell $850,000) which the first respondent had acquired through legitimate means, and which had no connection with any criminal offence. On 22 September 2011, the first respondent was convicted of the offences charged on 21 February 2011. On 15 August 2012, the DPP's application to have the first respondent declared a drug trafficker (made on 13 February 2012) succeeded before the primary judge (Southwood J) and an application by the first respondent to have the restraining order set aside was dismissed10. Subsequently, the Court of Appeal allowed the first respondent's appeal and made orders which set aside the primary judge's declaration that the first respondent was a drug trafficker and dismissed the DPP's application for a declaration under s 36A of the Misuse of Drugs Act11. In setting aside the declaration made by the primary judge, the majority in the Court of Appeal concluded that the statutory scheme effected by s 36A and s 94 was invalid because it required the Supreme Court to act in a manner incompatible with the proper discharge of the Court's function as a repository of federal jurisdiction, and with its institutional integrity. In dissenting reasons, Riley CJ found to the opposite effect, that the powers and functions reposed in the Court under s 36A required the resolution of a real justiciable controversy in accordance with ordinary judicial processes. All members of the Court of Appeal rejected the first respondent's submission that the statutory scheme was invalid within the meaning of s 50(1) of the Northern Territory (Self-Government) Act 1978 (Cth)12 as an acquisition of property otherwise than on just terms. Further, all members of the Court of Appeal rejected a construction of s 52(3) of the Forfeiture Act essayed by the first respondent, about which more will be said later. Special leave to appeal was granted upon an undertaking by the appellants to pay the first respondent's costs of the appeal and of the special leave application. The Northern Territory has provided a written undertaking in those 10 Director of Public Prosecutions v Emmerson (2012) 32 NTLR 180. 11 Emmerson v Director of Public Prosecutions (2013) 33 NTLR 1. 12 Section 5 of the Northern Territory (Self-Government) Act establishes the Northern Territory of Australia as a "body politic under the Crown". Hayne Crennan Bell terms. The DPP (as second respondent) made a submitting appearance in this Court. The appellants' case in this Court is that there is no feature in the operation of the statutory scheme which provides any foundation for the first respondent's various attacks on validity, described in more detail below, and that the first respondent's construction of s 52(3) is incorrect. In this Court, the Attorneys-General of the Commonwealth and the States of New South Wales, Queensland, South Australia and Western Australia intervened to support the appellants' case for validity. As foreshadowed, the reasons which follow explain why the appellants' case should be accepted and the appeal allowed. Some history The statutory scheme in question exemplifies the acceptance by legislatures in Australia and elsewhere of the utility of the restraint and forfeiture of property, not only as a strong and drastic sanction vindicating a law and encouraging its observance13, but also as a means of depriving criminals of profits and preventing the accumulation of significant assets by those involved in criminal activity, particularly in relation to drug offences14. 13 Burton v Honan (1952) 86 CLR 169 at 178-181 per Dixon CJ; [1952] HCA 30; Theophanous v The Commonwealth (2006) 225 CLR 101 at 115 [10], 116 [14] per Gleeson CJ; [2006] HCA 18. 14 International Finance Trust Co Ltd v New South Wales Crime Commission (2009) 240 CLR 319 at 344-345 [25]-[29] per French CJ, 361-362 [81]-[82] per Gummow and Bell JJ; [2009] HCA 49. See generally Freiberg and Fox, "Forfeiture, Confiscation and Sentencing", in Fisse, Fraser and Coss (eds), The Money Trail: Confiscation of Proceeds of Crime, Money Laundering and Cash Transaction Reporting, (1992) 106; Australian Law Reform Commission, Confiscation That Counts: A review of the Proceeds of Crime Act 1987, Report No 87, (1999). Hayne Crennan Bell Forfeiture or confiscation of property, in connection with the commission of serious crime, has a long history in English law15. Until its abolition by statute in 187016, a felon incurred general forfeiture of property17, a sanction stretching back to medieval times. Felony forfeiture provided Crown revenue and constituted the subject matter, at certain times, of Crown patronage18. In distinguishing between a felon's forfeiture of land (strictly, escheat of land), a consequence of attainder following a judgment of death or outlawry, and the forfeiture of goods and chattels, a consequence of conviction and sentence19, Blackstone noted the severe deterrent effect of forfeiture as a punishment for serious crime because it affected posterity as well as the individual offender20. In a parallel development, another long-standing species of forfeiture21 arose at common law, as Blackstone put it "from the misfortune rather than the crime of the owner" of a chattel22. Until its abolition in 184623, a deodand β a 15 Re Director of Public Prosecutions; Ex parte Lawler (1994) 179 CLR 270 at 289 per Dawson J; [1994] HCA 10; International Finance Trust Co Ltd v New South Wales Crime Commission (2009) 240 CLR 319 at 344 [25] per French CJ, 361-362 [82] per Gummow and Bell JJ. 16 Forfeiture Act 1870 (UK) (33 & 34 Vict c 23). 17 Kesselring, "Felony Forfeiture in England, c 1170-1870", (2009) 30 Journal of Legal History 201; Freiberg, "Criminal Confiscation, Profit and Liberty", (1992) 25 Australian and New Zealand Journal of Criminology 44 at 46-47. 18 See, for example, Magna Carta (1297), c 22; Bill of Rights (1688), "Grants of Forfeitures". 19 Sentence was necessary because following the issue of capias after conviction, a person could pray the "benefit of clergy" and thereby arrest the judgment and avoid the consequence of forfeiture. 20 Blackstone, Commentaries on the Laws of England, (1769), bk 4, c 29 at 375-376. 21 Sutton, "The Deodand and Responsibility for Death", (1997) 18(3) Journal of Legal History 44. 22 Blackstone, Commentaries on the Laws of England, (1765), bk 1, c 8 at 290. 23 An Act to abolish Deodands 1846 (UK) (9 & 10 Vict c 62). Hayne Crennan Bell personal chattel occasioning accidental death β was forfeit to the Crown, originally as "an accursed thing" which might fund pious acts of expiation and, later, compensation to relatives24, but it came over time also to be part of the Crown's revenue25. The abolition of the institution was part of the legislative reforms which included Lord Campbell's Act26, placing on a modern footing compensation to relatives for wrongful death. Further, there have been many historical instances of statutory forfeiture27. To take a familiar example, procedures for the imposition of penalties and forfeiture of goods, in the context of customs and excise legislation, have a unique history. As explained by Hayne J in Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd28, such procedures were founded upon proceedings in the Exchequer for the recovery of sums owed to the Crown. They were much affected by statute and were distinctly different from either proceedings brought in the Crown's name for the punishment of crime, or civil proceedings for the vindication of rights and duties between subjects29. Despite common historical origins, in the United States of America procedures for forfeitures and penalties under customs and excise legislation do not engage the double jeopardy clause in the Constitution, or violate due process requirements, 24 Blackstone, Commentaries on the Laws of England, (1765), bk 1, c 8 at 290-291. See also Sutton, "The Nature of the Early Law of Deodand", (1999) 30 Cambrian Law Review 9 at 10, 12, 16. 25 Blackstone, Commentaries on the Laws of England, (1765), bk 1, c 8 at 290-292. 26 Fatal Accidents Act 1846 (UK) (9 & 10 Vict c 93). 27 See, for example, Treason Act 1351 (25 Edw 3 Stat 5 c 2), which clarified the common law in respect of treason. The course of successive statutory amendment over the centuries in respect of treason can be found in Treason Act 1695 (7 & 8 Will 3 c 3); Treason Act 1795 (UK) (36 Geo 3 c 7); Treason Felony Act 1848 (UK) (11 & 12 Vict c 12). 28 (2003) 216 CLR 161 at 192 [101]; [2003] HCA 49. 29 Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd (2003) 216 CLR 161 at 193-195 [103]-[107]. Hayne Crennan Bell because the remedies available do not include conviction of a defendant30. For that reason, one remedial purpose recognised as being secured by such forfeitures is the reimbursement of government losses accruing from the evasion of customs Modern civil forfeiture laws for confiscating the proceeds of, or profits from, crime go beyond the condemnation of goods used in, or derived from, crime. Many are designed expressly to render a person's pursuit of certain crimes unprofitable in the economic sense32. No single precept drawn from historical examples of forfeiture could be said to inform modern civil forfeiture laws. What the historical examples show, however, is that overlapping rationales underpinning forfeiture as a criminal or civil sanction, which include both strong deterrence and the protection of society, are not especially novel. Protection of the public is a familiar factor in judicial decision-making in sentencing after the determination of criminal guilt33. In the context of terrorism, it has been said that the protection of the public is a permissible legislative purpose, not alien to adjudicative processes34. 30 The Palmyra 25 US 1 at 14-15 (1827); United States v Ursery 518 US 267 at 274-288 (1996) per Rehnquist CJ, 295-296 per Kennedy J, cited in Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd (2003) 216 CLR 161 at 173 [31] per Gummow J; see also at 197 [112] per Hayne J. 31 United States v Bajakajian 524 US 321 at 342 (1998). 32 International Finance Trust Co Ltd v New South Wales Crime Commission (2009) 240 CLR 319 at 345 [28]-[29] per French CJ, 361-362 [82] per Gummow and Bell JJ, the latter citing R v May [2008] AC 1028 at 1034 [9] per Lord Bingham of Cornhill. See generally Australian Law Reform Commission, Confiscation That Counts: A review of the Proceeds of Crime Act 1987, Report No 87, (1999) at 33 Veen v The Queen [No 2] (1988) 164 CLR 465 at 476; [1988] HCA 14; Muldrock v The Queen (2011) 244 CLR 120 at 129 [20] fn 54; [2011] HCA 39. 34 Thomas v Mowbray (2007) 233 CLR 307 at 354-355 [108]-[109]; [2007] HCA 33; see also Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 592 [20] per Gleeson CJ; [2004] HCA 46. Hayne Crennan Bell As Dawson J observed in Re Director of Public Prosecutions; Ex parte Lawler35, the rationale for employing forfeiture as a punishment may go beyond the common aims of deterrence and retribution, and involve "an element of incapacitation" (affecting even innocent holders of property), so as to ensure that an offence will not be repeated by the same means. Undoubtedly the aim of incapacitating an offender can inform sentencing and justify removal from society and detention in custody36. It was not suggested, nor could it be, that economic incapacitation of a repeat offender of drug crimes may not inform a political decision resulting in an enactment imposing "an economic penalty" rendering such crime "unprofitable"37. This is particularly so given the incontestable proposition, stated in Wong v The Queen38, that the commission of serious drug crime has "great social consequences". These might include significant social costs for a state, over and above the economic costs of law enforcement. Whilst there are a number of important differences, statutes with objects not dissimilar to those under consideration in this appeal have been enacted throughout Australia39. 35 (1994) 179 CLR 270 at 290, referring to Calero-Toledo v Pearson Yacht Leasing Co 416 US 663 at 686-687 (1974). 36 Ryan v The Queen (2001) 206 CLR 267 at 283 [47] per McHugh J; [2001] HCA 37 Calero-Toledo v Pearson Yacht Leasing Co 416 US 663 at 686-687 (1974). 38 (2001) 207 CLR 584 at 607 [64] per Gaudron, Gummow and Hayne JJ; [2001] HCA 64. 39 See, for example, Customs Act 1901 (Cth), s 229A; Criminal Assets Recovery Act 1990 (NSW); Crime (Confiscation of Profits) Act 1993 (Tas); Confiscation Act 1997 (Vic); Criminal Property Confiscation Act 2000 (WA); Proceeds of Crime Act 2002 (Cth); Criminal Proceeds Confiscation Act 2002 (Q); Confiscation of Criminal Assets Act 2003 (ACT); Criminal Assets Confiscation Act 2005 (SA). See generally, Skead, "Drug-trafficker property confiscation schemes in Western Australia and the Northern Territory: A study in legislation going too far", (2013) 37 Criminal Law Journal 296. Hayne Crennan Bell The statutory scheme Proceedings on applications made under the Forfeiture Act are taken to be civil proceedings for all purposes40. The rules of evidence applicable to civil proceedings apply and any question of fact is to be decided in accordance with the civil standard of proof, on the balance of probabilities41. It is desirable to set out the critical provisions of the statutory scheme. Section 36A of the Misuse of Drugs Act relevantly provides: "(1) The Director of Public Prosecutions may apply to the Supreme Court for a declaration that a person is a drug trafficker. (2) An application under subsection (1) may be made at the time of a hearing for an offence or at any other time. (3) On hearing an application by the Director of Public Prosecutions under subsection (1), the court must declare a person to be a drug trafficker if: the person has been found guilty by the court of an offence referred to in subsection (6) that was committed after the commencement of this section; and subject to subsection (5), in the 10 years prior to the day on which the offence was committed (or the first day on which the offence was committed, as the case requires), the person has been found guilty: on 2 or more occasions of an offence corresponding to an offence referred to in subsection (6); or on one occasion of 2 (or more) separate charges relating to separate offences of which 2 or more 40 Forfeiture Act, s 136(1). 41 Forfeiture Act, s 136(2)(b) and (d). Hayne Crennan Bell correspond to an offence or offences referred to in subsection (6)." An offence referred to in sub-s (3)(b) may have been committed before or after the commencement of the section and may have been tried either summarily or on indictment42. As can be seen, establishing the statutory criteria to be satisfied requires reference to be made to sub-s (6). Sub-section (6) lists a series of offences relevant for the purposes of sub-s (3), and includes certain categories of cultivation and possession of drugs (which may involve minor quantities) as well as offences which might be commonly understood as directed to drug traffickers and cultivators of commercial or trafficable quantities of drugs. Section 94(1) of the Forfeiture Act provides: "If a person is declared to be a drug trafficker under section 36A of the Misuse of Drugs Act: all property subject to a restraining order that is owned or effectively controlled by the person; and all property that was given away[43] by the person, whether before or after the commencement of this Act; is forfeited to the Territory." Section 44 of the Forfeiture Act sets out the conditions under which a restraining order may be made and the property to which such an order may apply. It relevantly provides: "(1) The Supreme Court may, on application by the DPP, make a restraining order in relation to the property of a person named in the application if: 42 Misuse of Drugs Act, s 36A(4). 43 This appeal does not concern any property that was given away by the first respondent. Hayne Crennan Bell the person has been charged, or it is intended that within 21 days after the application the person will be charged, with an offence that, if the person is convicted of the offence, could lead to the person being declared to be a drug trafficker under section 36A of the Misuse of Drugs Act; or (2) A restraining order under this section can apply to: all or any property that is owned or effectively controlled by the person at the time of the application for the restraining order, whether or not any of the property is described or identified in the application; and all property acquired: by the person; or by another person at the request or direction of the person named in the application for the restraining order; after the restraining order is issued." The DPP is not bound (whether by the Forfeiture Act or otherwise) to make an application in every case in which there are reasonable grounds for believing that a restraining order would be made. However, it should be noted that the Forfeiture Act casts a duty on the DPP to apply to the Supreme Court to set aside a restraining order in certain circumstances44. Part 5 of the Forfeiture Act45 provides for "objection proceedings" whereby an order obtained in the circumstance covered by s 44(1)(a) may be set aside on limited grounds46. A number of orders may be made by the Supreme 44 Forfeiture Act, s 50(2). 45 Forfeiture Act, ss 59-66. 46 Forfeiture Act, s 65(1). Hayne Crennan Bell Court in respect of property which is subject to a restraining order, including appointing the Public Trustee to manage the property47. The effect of a restraining order, subject to Div 3 of Pt 4 (covering "permitted" as well as "prohibited" dealings), is that property subject to a restraining order cannot be dealt with48, although the Court may release property to meet the "reasonable living and business expenses of the owner"49. Furthermore, the making and receiving of mortgage payments in respect of property subject to a restraining order is not prevented50. As soon as practicable after a restraining order is made, a copy must be served personally on affected persons51. It was accepted that, under the statutory scheme, persons who are innocent third parties in respect of restrained property are not excluded from any relevant adjudicative process. Some parts of the Forfeiture Act plainly use the word "property" to refer to land and things which are the subject of property interests, even though "property" is defined to mean "real or personal property of any description, wherever situated and whether tangible or intangible" or "a legal or equitable interest" in the same52, a not unfamiliar ambulatory definition53. 47 Forfeiture Act, s 46(1)(c). 48 Forfeiture Act, s 49(1)(a). 49 Forfeiture Act, s 49(3). 50 Forfeiture Act, s 57. 51 Forfeiture Act, s 47(1). 52 Forfeiture Act, s 5. 53 White v Director of Public Prosecutions (WA) (2011) 243 CLR 478 at 483 [5] per French CJ, Crennan and Bell JJ, 489 [28] per Gummow J; [2011] HCA 20. See also Corporations Act 2001 (Cth), s 9, definition of "property". See generally Yanner v Eaton (1999) 201 CLR 351 at 365-367 [17]-[20] per Gleeson CJ, Gaudron, Kirby and Hayne JJ; [1999] HCA 53. Hayne Crennan Bell Section 52 of the Forfeiture Act governs the cessation of a restraining order and relevantly states: If a restraining order has been issued under section 44(1)(a) in relation to property of a person who has been charged, or who was to be charged and a charge has been laid within 21 days after the date of the order, the order ceases to have effect: if the charge is finally determined but the person is not declared under section 36A of the Misuse of Drugs Act to be a drug trafficker; or if the charge is disposed of without being determined." As foreshadowed, the correct construction of sub-s (3) of s 52 is in issue. Whilst not immediately relevant to the first respondent's challenge to the validity of the statutory scheme, as it operates in respect of a declared drug trafficker, it can be noted that property which is "crime-used" or "crime-derived" is also targeted under the Forfeiture Act, as is "unexplained wealth"54. Relevant declarations in respect of those categories of property may be sought by the DPP and made by the Supreme Court under the Forfeiture Act. Each category of targeted property is subject to separate forfeiture regimes55, reflecting differences between forfeiture in rem, attaching to the property connected to an offence, and forfeiture in personam56, applied to a particular person (here a declared drug trafficker) after criminal proceedings against that person. 54 See Forfeiture Act, ss 10(3), 11, 12 and 67. 55 Part 6, entitled "Proceedings for declarations", provides for the DPP to apply to the Supreme Court for the making of declarations in respect of "unexplained wealth" (Div 1 β ss 67-72), "a criminal benefit" (Div 2 β ss 73-80) and "crime-used property" (Div 3 β ss 81-86). 56 Young (ed), Civil Forfeiture of Criminal Property, (2009), Pts I and II. Hayne Crennan Bell Objectives of the statutory scheme Section 3 of the Forfeiture Act provides: "The objective of this Act is to target the proceeds of crime in general and drug-related crime in particular in order to prevent the unjust enrichment of persons involved in criminal activities." In pursuit of the objective in s 3, s 10(2) provides that the Forfeiture Act is to apply to forfeit to the Territory property owned or effectively controlled by persons "involved or taken to be involved in criminal activities" so as "to compensate the Territory community for the costs of deterring, detecting and dealing with" those activities. Relevantly for present purposes, a person is "taken to be involved in criminal activities" if "the person is declared under section 36A of the Misuse of Drugs Act to be a drug trafficker"57. Although there is no challenge in these proceedings to the statutory provisions concerning "crime-used" or "crime-derived" property, it can be noted that s 10(3) states that such property is also forfeit to the Territory so as "to deter criminal activity and prevent the unjust enrichment of persons involved in criminal activities." That the stated objectives are penal, and additional to punishment imposed in criminal proceedings, was explained prior to the enactment of the statutory scheme. Section 36A was inserted into the Misuse of Drugs Act by the Criminal Property Forfeiture (Consequential Amendments) Act 2002 (NT). In the second the reading speech Attorney-General for the Northern Territory described the proposed legislation as "a mechanism outside the criminal jurisdiction for forfeiture of property" 58. By the Bill which became the amending Act, for 57 Forfeiture Act, s 10(4)(a); see also s 8. 58 Northern Territory, Legislative Assembly, Parliamentary Debates (Hansard), 16 May 2002 at 1321. Hayne Crennan Bell reference to an Australian Law Reform Commission report59, he stated that the objectives of laws for the forfeiture of proceeds of crime are threefold60: to deter those who may be contemplating criminal activity by reducing the possibility of gaining a profit from that activity; to prevent crime by diminishing the capacity of offenders to finance future criminal activities; and to remedy the unjust enrichment of criminals who profit at society's expense." Some argument was directed to whether, and how, the stated objectives cast light on the construction and application of the critical provisions of the Forfeiture Act. It is not necessary to resolve those issues. In particular, it is not necessary to decide whether a court asked to make a forfeiture order is permitted or required to examine whether, or to what extent, the particular order sought would, in some sense, either "prevent the unjust enrichment"61 of the offender whose property it is sought to forfeit or "compensate the Territory community for the costs of deterring, detecting and dealing with"62 the criminal activities of that person. Kable The error alleged by the appellants in the reasoning of the majority in the Court of Appeal is expressed in the notice of appeal as: "holding that the statutory scheme comprised by the inter-operation of s 36A ... and s 94 ... is invalid because the scheme enlists the Supreme Court of the Northern Territory to give effect to executive decisions 59 Australian Law Reform Commission, Confiscation That Counts: A review of the Proceeds of Crime Act 1987, Report No 87, (1999). 60 Northern Territory, Legislative Assembly, Parliamentary Debates (Hansard), 16 May 2002 at 1321-1322. 61 Forfeiture Act, s 3. 62 Forfeiture Act, s 10(2). Hayne Crennan Bell and/or legislative policy in a manner which undermines its institutional integrity in a degree incompatible with its role as a repository of federal jurisdiction." The incompatibility referred to is identified in Kable, a case which considered the involvement of a Supreme Court in a decision-making process concerning detention. The principle for which Kable stands is that because the Constitution establishes an integrated court system, and contemplates the exercise of federal jurisdiction by State Supreme Courts63, State legislation which purports to confer upon such a court a power or function which substantially impairs the court's institutional integrity, and which is therefore incompatible with that court's role as a repository of federal jurisdiction, is constitutionally invalid64. In Mistretta v United States65, the fundamental nature of judicial independence and the relationship between institutional integrity and impartiality were identified by the Supreme Court of the United States: "The legitimacy of the Judicial Branch ultimately depends on its reputation for impartiality and nonpartisanship. That reputation may not be borrowed by the political Branches to cloak their work in the neutral colors of judicial action." Ultimately the inquiry in respect of a function or process bestowed upon, or required of, a court was "whether [it] undermines the integrity of the Judicial Branch."66 63 Constitution, s 77(iii). 64 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 101-103 per Gaudron J, 114-116 per McHugh J, 138, 143 per Gummow J; North Australian Aboriginal Legal Aid Service Inc v Bradley (2004) 218 CLR 146 at 163 [29] per McHugh, Gummow, Kirby, Hayne, Callinan and Heydon JJ; [2004] HCA 31. 65 488 US 361 at 407 (1989), cited in Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 133 per Gummow J. 66 Mistretta v United States 488 US 361 at 404 (1989). Hayne Crennan Bell The ad hominem legislation in Kable (the stated object of which was "to protect the community"67) authorised the Supreme Court of New South Wales to order preventive detention without any breach of the law being alleged or any adjudication of guilt68. A majority of this Court found that task incompatible with the institutional integrity of the Supreme Court because the legislation drew the Court into implementing what was essentially a political decision or government policy that Mr Kable should be detained, without the benefit of ordinary judicial process69. This Court has subsequently confirmed that Kable applies beyond its extraordinary circumstances to the Supreme Courts of the Territories70 and to all State and Territory courts as Ch III courts71. Some mention should be made of the authorities in this Court, after Kable, which were relied upon in argument in this appeal. By comparison with Kable, in Fardon v Attorney-General (Qld)72, legislation of general application authorising the continued detention or supervised release of prisoners who were "a serious danger to the community" was upheld as valid. This was because the adjudicative process required of the State Supreme Court in that case supported the maintenance of the institutional 67 Community Protection Act 1994 (NSW), s 3(1) and (2). 68 Community Protection Act 1994 (NSW), ss 3(1), 3(3) and 5(1). 69 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 98 per Toohey J, 106-107 per Gaudron J, 122, 124 per McHugh J, 133-134 per 70 Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 at 363 [81] per Gaudron J; [2000] HCA 63; North Australian Aboriginal Legal Aid Service Inc v Bradley (2004) 218 CLR 146 at 163 [29] per McHugh, Gummow, Kirby, Hayne, Callinan and Heydon JJ; South Australia v Totani (2010) 242 CLR 1 at 49 [72] per French CJ; [2010] HCA 39. 71 South Australia v Totani (2010) 242 CLR 1 at 47-48 [69] per French CJ, 81-83 [201]-[208] per Hayne J, 156-157 [425]-[428] per Crennan and Bell JJ. See also Assistant Commissioner Condon v Pompano Pty Ltd (2013) 87 ALJR 458 at 487-488 [123]-[126] per Hayne, Crennan, Kiefel and Bell JJ; 295 ALR 638 at 673-674; [2013] HCA 7. 72 (2004) 223 CLR 575. Hayne Crennan Bell integrity of the Court73 and the adjudicative process required could be performed "independently of any instruction, advice or wish of the legislative or executive branches of government."74 Since Kable, it has been stated often that a court must satisfy minimum requirements of independence and impartiality75, even though it is not possible to make a single statement embracing all of the defining characteristics of a court76. In the context of the arguments advanced in this appeal, it is worth repeating the well-established proposition that independence and institutional impartiality mark a court apart from other decision-making bodies77. A legislature which imposes a judicial function or an adjudicative process on a court, whereby it is essentially directed or required to implement a political decision or a government 73 (2004) 223 CLR 575 at 592 [19]-[20] per Gleeson CJ, 596-597 [34] per McHugh J, 621 [114]-[115] per Gummow J, 648 [198] per Hayne J, 658 [234] per Callinan 74 (2004) 223 CLR 575 at 621 [116] per Gummow J. See also at 598 [35], 600-602 75 North Australian Aboriginal Legal Aid Service Inc v Bradley (2004) 218 CLR 146 at 163 [29] per McHugh, Gummow, Kirby, Hayne, Callinan and Heydon JJ; Forge v Australian Securities and Investments Commission (2006) 228 CLR 45 at 67-68 [41] per Gleeson CJ; [2006] HCA 44; Gypsy Jokers Motorcycle Club Inc v Commissioner of Police (2008) 234 CLR 532 at 552 [10] per Gummow, Hayne, Heydon and Kiefel JJ; [2008] HCA 4; K-Generation Pty Ltd v Liquor Licensing Court (2009) 237 CLR 501 at 544 [153] per Gummow, Hayne, Heydon, Crennan and Kiefel JJ; [2009] HCA 4; South Australia v Totani (2010) 242 CLR 1 at 41 [58] per French CJ, 157 [427] per Crennan and Bell JJ. 76 North Australian Aboriginal Legal Aid Service Inc v Bradley (2004) 218 CLR 146 at 163 [30] per McHugh, Gummow, Kirby, Hayne, Callinan and Heydon JJ; Forge v Australian Securities and Investments Commission (2006) 228 CLR 45 at 76 [64] per Gummow, Hayne and Crennan JJ. 77 Forge v Australian Securities and Investments Commission (2006) 228 CLR 45 at 78 [68] per Gummow, Hayne and Crennan JJ; South Australia v Totani (2010) 242 CLR 1 at 157 [428] per Crennan and Bell JJ; Assistant Commissioner Condon v Pompano Pty Ltd (2013) 87 ALJR 458 at 477 [67] per French CJ; 295 ALR 638 at Hayne Crennan Bell policy without following ordinary judicial processes, deprives that court of its defining independence and institutional impartiality. This was exemplified in International Finance Trust Co Ltd v New South Wales Crime Commission78. Section 10 of the Criminal Assets Recovery Act 1990 (NSW) required the Supreme Court of New South Wales to hear and determine an application, made ex parte, for a restraining order in respect of property, if a law enforcement officer suspected that the owner of the property had committed one of a range of crimes or that the property in question derived from criminal activity. Members of the majority in this Court found that s 10 conscripted the Supreme Court into a process incompatible with, and repugnant in a fundamental degree to, the judicial function of the Court and ordinary judicial processes79. That conclusion embraced a proposition established in Gypsy Jokers Motorcycle Club Inc v Commissioner of Police80 that legislation which purports to direct the courts as to the manner and outcome of any exercise of jurisdiction is apt to impair, impermissibly, the character of courts as In South Australia v Totani82, the legislation under consideration was directed to the making of control orders. Section 14(1) of the Serious and Organised Crime (Control) Act 2008 (SA) provided that, on application by a member of the Executive (the Commissioner of Police), the Magistrates Court of South Australia was required to make a "control order" against a defendant if satisfied the defendant was a member of a "declared organisation", without the need to determine, by ordinary judicial processes, whether the defendant engaged in, or had engaged in, serious criminal activity. A "declared organisation" was an organisation that was subject to an anterior declaration by another member of the Executive (the Attorney-General). By majority, s 14(1) was held invalid on the 78 (2009) 240 CLR 319. 79 (2009) 240 CLR 319 at 355 [56] per French CJ, 366-367 [97]-[98] per Gummow and Bell JJ, 386-387 [159]-[161] per Heydon J. 80 (2008) 234 CLR 532 at 560 [39] per Gummow, Hayne, Heydon and Kiefel JJ. 81 International Finance Trust Co Ltd v New South Wales Crime Commission (2009) 240 CLR 319 at 360 [77] per Gummow and Bell JJ. 82 (2010) 242 CLR 1. Hayne Crennan Bell ground that it authorised the "enlistment" or "recruitment" of the Magistrates Court to implement the decisions of the Executive in a manner incompatible with the proper discharge of its federal judicial responsibilities and its institutional integrity83. Reasoning in the Court of Appeal As noted earlier, the majority in the Court of Appeal held the statutory scheme invalid because it was said to enlist the Supreme Court to give effect to executive decisions or legislative policy (or both) in a manner which undermined that Court's institutional integrity. Using the language of Totani84, and echoing Mistretta85, Kelly J found that the statutory scheme represented "a substantial recruitment of the judicial function of [the Supreme Court] to an essentially executive process", thus giving "the neutral colour of a judicial decision" to the DPP's decision to make an application under s 36A86. In agreeing that the statutory scheme engaged the Kable principle, Barr J was chiefly influenced by his view that a declaration under s 36A could be made "contrary to the actual facts"87, by which his Honour meant contrary to a common understanding of the expression "drug trafficker"88. 83 (2010) 242 CLR 1 at 52 [82] per French CJ, 67 [149] per Gummow J, 88-89 [226] per Hayne J, 160 [436] per Crennan and Bell JJ, 173 [481] per Kiefel J. 84 (2010) 242 CLR 1 at 52 [82] per French CJ. 85 488 US 361 at 407 (1989), cited in Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 133 per Gummow J; Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 602 [44] per McHugh J, 615 [91] per Gummow J; Gypsy Jokers Motorcycle Club Inc v Commissioner of Police (2008) 234 CLR 532 at 593 [168] per Crennan J; South Australia v Totani (2010) 242 CLR 1 at 172 [479] per Kiefel J; Momcilovic v The Queen (2011) 245 CLR 1 at 228 [602] per Crennan and Kiefel JJ; [2011] HCA 34. 86 Emmerson v Director of Public Prosecutions (2013) 33 NTLR 1 at 34 [92]. 87 Emmerson v Director of Public Prosecutions (2013) 33 NTLR 1 at 45 [127]. 88 Emmerson v Director of Public Prosecutions (2013) 33 NTLR 1 at 47 [131]. Hayne Crennan Bell The parties' submissions The appellants The appellants submitted that such discretions as the Supreme Court has under both s 36A of the Misuse of Drugs Act and s 44 of the Forfeiture Act were to be exercised judicially in accordance with ordinary judicial processes without any government interference in respect of the outcome. It was contended that the role of the DPP in the statutory scheme was a familiar and unexceptional role, distinguishable from the role of the Attorney-General which was critical to a finding of legislative invalidity in Totani. Forfeiture, said to operate by reference to the first respondent's status, did not engage the common law values encapsulated in the expressions "double jeopardy" or "double punishment". Further, it was submitted that forfeiture under the statutory scheme exacted or imposed punishment for breach of provisions prescribing a rule of conduct. Accordingly, it was said that the guarantee of just terms was incompatible with that exaction. Finally, the appellants contested the first respondent's construction of s 52(3) of the Forfeiture Act. The first respondent It is necessary to describe in a little more detail the first respondent's case that s 36A, and the statutory scheme comprising s 36A and s 94, involve an invalid exercise of the legislative power of the Northern Territory. By way of response to the appeal, the first respondent sought to support the conclusion of the majority in the Court of Appeal by making three points. It was contended that the statutory scheme (1) contravened the Kable principle; (2) conferred an impermissible discretion on the DPP; and (3) effected an acquisition of property other than on just terms. Relying on Kable, and focussing on the process of obtaining a declaration, it was contended that s 36A was incompatible with, and repugnant to, the institutional integrity of the Supreme Court because a function was conferred on the Court pursuant to which it was directed to make orders which "brand respondents pejoratively". More broadly, it was contended that the outcome of any proceedings under the statutory scheme, namely forfeiture by operation of s 94(1), was dominated impermissibly by decisions of the DPP to apply for a s 36A declaration and a restraining order. Subsumed into that complaint was a complaint that the Supreme Court's discretion under s 44 was limited, such that the Court could not remedy alleged "harshness" of any forfeiture worked by the Hayne Crennan Bell statutory scheme, to the extent that it could encompass assets said to be lawfully acquired. Next it was contended that the statutory scheme empowered a member of the Executive, the DPP, to impose a penalty constituting a "double punishment" on a declared drug trafficker without the benefit of ordinary judicial processes. It was asserted that the discretion of the DPP to make applications under the statutory scheme was "open-ended, unconstrained and unreviewable"89. It was further contended that in making an application under the statutory scheme for either a restraining order or a drug trafficker declaration, the DPP exercised a discretion which was "impermissibly arbitrary in the constitutional sense." These arguments appeared to evoke constitutional principles and common law values, rooted in British legal history, which preclude the arbitrary exercise of sovereign power. For example, a financial exaction imposed by a legislature, such as a tax, must be clear both as to the identification of the taxpayer and as to the taxpayer's liability to pay the tax. Delegation by a legislature to a member of the Executive of a discriminatory dispensing power in respect of such an exaction would offend against the separation of powers90. Another example is that administrative decisions in respect of the issue of search warrants are subject to stringent limitations, imposed first by judges in the common law courts and often now found in statutes91. Detention of a person in custody without just cause is also prohibited, which evokes the constitutional principle derived from Ch III of the Constitution stated in Chu Kheng Lim v Minister for Immigration, 89 See Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476 at 512 [101] per Gaudron, McHugh, Gummow, Kirby and Hayne JJ; [2003] HCA 2. That language can be traced back, in part at least, to Australian Communist Party v The Commonwealth (1951) 83 CLR 1 at 258 per Fullagar J; [1951] HCA 5; Giris Pty Ltd v Federal Commissioner of Taxation (1969) 119 CLR 365 at 372-373 per Barwick CJ; [1969] HCA 5. 90 Giris Pty Ltd v Federal Commissioner of Taxation (1969) 119 CLR 365 at 383-384; MacCormick v Federal Commissioner of Taxation (1984) 158 CLR 622 at 639-641; [1984] HCA 20; Deputy Federal Commissioner of Taxation v Truhold Benefit Pty Ltd (1985) 158 CLR 678 at 683-685; [1985] HCA 36. See generally Vestey v Inland Revenue Commissioners [1980] AC 1148 at 1172, 1174, 1176. 91 New South Wales v Corbett (2007) 230 CLR 606 at 610-612 [16]-[22] per Kirby J, 628-632 [89]-[105] per Callinan and Crennan JJ; [2007] HCA 32. Hayne Crennan Bell Local Government and Ethnic Affairs92 and referred to in Kable93: "adjudging and punishing criminal guilt" is an "exclusively judicial function", not to be delegated to the Executive. The first respondent's next argument β that the statutory scheme effected an acquisition of property other than on just terms β depended on the proposition that the particular form of forfeiture imposed on a declared drug trafficker stood outside categories of forfeiture for which the requirement of just terms has been found by this Court not to apply. It was contended that the "reality and scale" of the forfeiture under the statutory scheme was such that a point was reached "where the law is no longer inconsistent or incongruous with the guarantee" of just terms. Finally, the construction of s 52(3) of the Forfeiture Act accepted in the courts below was challenged by the first respondent. Application of Kable The impugned provisions are compatible with the constitutional requirements imposed on a Ch III court because they do not require the Northern Territory Supreme Court to give effect to any decision made by the Executive, here the DPP. This is demonstrated by the powers, and concomitant duties, conferred on the Supreme Court, the role of the DPP, and the judicial processes required to be undertaken to give effect to the statutory scheme. Section 36A authorises and empowers the Supreme Court to make a declaration that a person is a drug trafficker if the conditions attached to the power are satisfied. It is well established that Australian legislatures can empower courts to make specified orders if certain conditions are satisfied, even if satisfaction of such conditions depends on a decision, or application, 92 (1992) 176 CLR 1 at 27; [1992] HCA 64. See also Polyukhovich v The Commonwealth (1991) 172 CLR 501; [1991] HCA 32. 93 (1996) 189 CLR 51 at 97-98 per Toohey J, 131-132 per Gummow J. See also at 107 per Gaudron J, 121-123 per McHugh J. Hayne Crennan Bell made by a member of the Executive94. A statement of McHugh J in Fardon is apt95: "The exercise of judicial power often involves the making of orders upon determining that a particular fact or status exists. It does so, for example, in the cases of matrimonial causes, bankruptcy, probate and the winding up of companies." Such provisions are not, for that reason alone, taken to trespass on the judicial function96 or to be impermissibly determinative of the outcome of an exercise of jurisdiction97. In selecting the Supreme Court as the repository of a power to determine a particular fact or status, in the absence of any express or implicit contrary legislative intention, it can be inferred that Parliament accepts that the power will be exercised in accordance with standards characterising In Silbert v Director of Public Prosecutions (WA)99, a statutory provision empowering a court to make forfeiture or pecuniary penalty orders, in circumstances where a person was "to be taken to have been convicted", was 94 Palling v Corfield (1970) 123 CLR 52 at 58-59 per Barwick CJ, 62-63 per McTiernan J, 64-65 per Menzies J, 67 per Owen J, 69-70 per Walsh J; [1970] HCA 53; International Finance Trust Co Ltd v New South Wales Crime Commission (2009) 240 CLR 319 at 352 [49] per French CJ, 360 [77] per Gummow and Bell JJ, 373 [121] per Hayne, Crennan and Kiefel JJ; South Australia v Totani (2010) 242 CLR 1 at 48-49 [71] per French CJ, 154-155 [420] per Crennan and Bell JJ. 95 (2004) 223 CLR 575 at 597 [34]. 96 Leeth v The Commonwealth (1992) 174 CLR 455 at 469-470 per Mason CJ, Dawson and McHugh JJ; [1992] HCA 29. 97 International Finance Trust Co Ltd v New South Wales Crime Commission (2009) 240 CLR 319 at 360 [77] per Gummow and Bell JJ. 98 Thomas v Mowbray (2007) 233 CLR 307 at 340 [55] per Gummow and Crennan JJ; International Finance Trust Co Ltd v New South Wales Crime Commission (2009) 240 CLR 319 at 360 [79] per Gummow and Bell JJ. 99 (2004) 217 CLR 181; [2004] HCA 9. Hayne Crennan Bell upheld by this Court as valid. Faced with the similarity between the operation of the relevant provisions in Silbert and the operation of s 36A, senior counsel for the first respondent acknowledged that the attack on the validity of s 36A was occasioned, in large part, by the circumstance that not all offences encompassed by the statutory criteria would be commonly understood to be drug trafficking offences. That attack is based on a misconception of the Supreme Court's powers and duties under the statutory scheme. The Supreme Court is authorised to determine whether the statutory criteria set out are satisfied and, if they are, the Court must make the declaration sought. The Forfeiture Act provides the consequences which follow from the Supreme Court's declaration. Together, these steps are an unremarkable example of conferring jurisdiction on a court to determine a controversy between parties which, when determined, will engage stated statutory consequences. That the controversy is initiated by an officer of the Executive, the DPP, does not deprive the Supreme Court of its independence. The DPP's decision to make an application to the Supreme Court in respect of an individual (whether under s 36A or s 44) is a discretionary decision, similar to the well-recognised prosecutorial discretion to decide who is to be prosecuted and for what offences100. As Menzies J observed in Palling v Corfield101, in exercising a discretion to initiate judicial action (a common necessity in an adversarial system of justice, in which a court can only act if a party makes an application) a member of the Executive "makes no law". An executive or administrative decision which exposes an individual to a risk of conviction, or the imposition of a penalty, is not an adjudication of rights and liabilities102 and therefore not an exercise of judicial power. So much was recently confirmed by five members of this Court in declining to overrule Fraser Henleins Pty Ltd v Cody103, the source 100 Magaming v The Queen (2013) 87 ALJR 1060 at 1067 [20] per French CJ, Hayne, Crennan, Kiefel and Bell JJ; 302 ALR 461 at 466; [2013] HCA 40. 101 (1970) 123 CLR 52 at 64-65. 102 Fraser Henleins Pty Ltd v Cody (1945) 70 CLR 100; [1945] HCA 49. 103 See Magaming v The Queen (2013) 87 ALJR 1060 at 1068-1069 [34]-[38] per French CJ, Hayne, Crennan, Kiefel and Bell JJ; 302 ALR 461 at 468-469, citing Fraser Henleins Pty Ltd v Cody (1945) 70 CLR 100. Hayne Crennan Bell of that proposition. The role of the DPP in the statutory scheme reflects no more than procedural necessity in the adversarial system. Unlike the position in Kable, the statutory scheme is not directed ad hominem. The Supreme Court is not required to make any order providing for the further detention of any person who is alleged to meet the statutory criteria104. The DPP is a statutory officer. In representing the state in the prosecution of an accused person, the DPP is subject to what are sometimes called "traditional considerations" (or obligations) of fairness105. Those obligations, and the standards of fairness which they entail, spring not so much from statute as from rules of practice; established by judges over the years, they are calculated to enhance the administration of justice by ensuring that an accused has a fair trial106. Certain discretions exercised by a prosecutor in the initiation and to review107. conduct of criminal proceedings are not readily subject Nonetheless, the fact that criminal proceedings in Australia are adversarial in character, and accusatorial by nature, obliges the maintenance of those standards of fairness. That maintenance has long rested on the powers of a trial judge, and appellate courts, in discharging their responsibilities to ensure that an accused has a fair trial108 and to prevent an abuse of the court's process in criminal proceedings109. 104 See other civil penalty schemes: Burton v Honan (1952) 86 CLR 169 at 179-180 per Dixon CJ; Theophanous v The Commonwealth (2006) 225 CLR 101 at 125-127 [58]-[63] per Gummow, Kirby, Hayne, Heydon and Crennan JJ. 105 See Whitehorn v The Queen (1983) 152 CLR 657 at 664; [1983] HCA 42; Cannon v Tahche (2002) 5 VR 317 at 339 [56]. 106 Cannon v Tahche (2002) 5 VR 317 at 339 [56]. 107 Maxwell v The Queen (1996) 184 CLR 501; [1996] HCA 46. 108 Whitehorn v The Queen (1983) 152 CLR 657 at 665; Connelly v Director of Public Prosecutions [1964] AC 1254 at 1347-1348. 109 Jago v District Court (NSW) (1989) 168 CLR 23; [1989] HCA 46; Polyukhovich v The Commonwealth (1991) 172 CLR 501. Hayne Crennan Bell The appellants and several interveners, particularly the Attorney-General for the State of South Australia, sought to draw an analogy between the discretions a prosecutor has in criminal proceedings and the role of the DPP in the statutory scheme. The DPP commits to the Supreme Court for its decision, in civil forfeiture proceedings, the question of whether a person meets certain statutory criteria, the consequences of which are penal. It could not be doubted that the Supreme Court has an inherent power to prevent an abuse of process in respect of any decision of the DPP under that statutory scheme. The possibility that a member of the Executive may exercise an administrative discretion unfairly, or engage in some malpractice, does not, without more, enliven the constitutional implications recognised in Kable so as to narrow the scope of a grant of legislative power110. A declaration can only be made by the Supreme Court on receipt of evidence sufficient to satisfy the civil standard of proof in respect of a person's requisite number of past convictions. There is nothing in the statutory scheme which indicates that the determination to be made by the Supreme Court is to be undertaken other than in open court, in circumstances where an affected party has a right to be heard, may have legal representation, and may make submissions and receive reasons. That the determination of whether the statutory criteria are satisfied may readily be performed, because of the ease of proof of the criteria, does not deprive the process of its judicial character. The effect of a declaration is the creation of a legal status for the purposes of the Misuse of Drugs Act, reflecting the satisfaction of the statutory criteria. As submitted by the Attorney-General of the State of Queensland intervening, which submission should be accepted, there is nothing in the statutory scheme which would inhibit a judge making a declaration from treating the expression "drug trafficker" as the reflex of the statutory criteria set out, and recording that the declaration is made for the purposes of the Misuse of Drugs Act. The usual rights of appeal subsist in respect of the making of any declaration111. Equally, an application by the DPP for a restraining order under the statutory scheme involves a judicial assessment of the merits of the application, an exercise of discretion, and the making of a judgment. Such an application is 110 Giris Pty Ltd v Federal Commissioner of Taxation (1969) 119 CLR 365. 111 Supreme Court Act (NT), s 51. Hayne Crennan Bell also subject to reconsideration under the objection procedures and to the usual rights of appeal. There were differences of views in the courts below as to the width of the discretion covered by the use of the word "may" in s 44 of the Forfeiture Act, governing the making of a restraining order112. The condition upon which the discretion is granted under s 44(1)(a) arguably makes it clear that the discretion is of the type which must be exercised upon proof of the particular case to which the power to make a restraining order is directed113. In the Court of Appeal, the appellants never contended otherwise114. There is no challenge in this Court to the validity of s 44, or to the Court of Appeal's findings in respect of that provision. For the purposes of the first respondent's argument it may be assumed, without deciding, that the discretion given to the Supreme Court under s 44 is limited. Notwithstanding that circumstance, the Supreme Court is obliged to engage in orthodox adjudicative processes involving the hearing of evidence and the making of a determination which is subject to the usual processes of appeal. Nothing in the detail of the statutory scheme supports the first respondent's submission that the scheme requires the Supreme Court to act at the behest of the Executive β the DPP β or to give effect to government policy without following ordinary judicial processes. Further, the authorities in this Court after Kable, including Totani, do not support any contrary conclusion. DPP's discretion impermissible? As already explained, the assertion that the statutory scheme conferred a discretion on the DPP which was constitutionally impermissible touched on a number of long-standing constitutional principles and common law values, 112 Emmerson v Director of Public Prosecutions (2013) 33 NTLR 1 at 11-12 [13]-[14], 113 As to which see International Finance Trust Co Ltd v New South Wales Crime Commission (2009) 240 CLR 319 at 373 [121] per Hayne, Crennan and Kiefel JJ, citing Finance Facilities Pty Ltd v Federal Commissioner of Taxation (1971) 127 CLR 106; [1971] HCA 12. 114 Emmerson v Director of Public Prosecutions (2013) 33 NTLR 1 at 26 [72] fn 53 per Kelly J. See also at 11-12 [12]-[16] per Riley CJ. Hayne Crennan Bell particularly in respect of double punishment and double jeopardy, but never distinctly articulated why the discretion was impermissible. Whilst the first respondent's submissions in respect of this branch of the argument were said to be distinct from his arguments based on Kable, the submissions depended equally on a misconception of the DPP's role in the statutory scheme. First, as explained, the DPP's decision to make an application under the statutory scheme is a familiar procedural necessity in the adversarial system and is subject to the Supreme Court's inherent jurisdiction to take whatever steps are necessary to avoid any abuse of process. Further, senior counsel for the first respondent rightly accepted (as he was bound to do) that penal ends may be pursued in civil proceedings which result in additional punishment. Second, this branch of the argument also critically turned on the proposition that the DPP's exercise of discretion to make an application under the statutory scheme (chiefly under s 36A, but also under s 44) was the operative decision determining which persons answering the statutory criteria would forfeit their property. For the reasons given, which do not need repeating, that proposition not only misconceives the DPP's role, it leaves out of account the statutory scheme's requirements that not one but two curial orders, following ordinary judicial processes, are the cumulative conditions stated as necessary for the operation of s 94(1) of the Forfeiture Act. Acquisition of property As has been explained, the relevant operation of the Forfeiture Act depends upon the Supreme Court making a declaration that a person is a drug trafficker. That is, the relevant operation of the Forfeiture Act depends upon the person's conviction for certain crimes within a specified time. The stated objectives of the statutory scheme, set out in ss 3 and 10 of the Forfeiture Act, must be read in the recognition that the Forfeiture Act prescribes penal Two consequences which flow from a person's conviction for crime. consequences follow from these observations. First, because the forfeiture worked by the Forfeiture Act is imposed as punishment for crime, the impugned provisions do not amount to an acquisition of property other than on just terms. Second, whether that punishment fits the crime (in this case, the repeated commission of certain crimes) is a matter for the legislature. It is irrelevant (and wrong) for the courts to attempt to determine Hayne Crennan Bell whether any forfeiture which may be worked by the Forfeiture Act (or which is worked in this particular case) is proportionate to the stated objectives. Section 50(1) of the Northern Territory (Self-Government) Act restricts the power conferred on the Legislative Assembly to make laws "for the peace, order and good government" of the Territory115, by providing that the power does not extend to "the making of laws with respect to the acquisition of property otherwise than on just terms." The contrast between the way in which the Northern Territory (Self-Government) Act confers legislative power on the Territory's Legislative Assembly and the way in which the Constitution confers powers upon the federal Parliament, by reference to the enumerated heads of power in s 51 of the Constitution116, was acknowledged. In relying on s 50(1), the first respondent referred to well-established principles concerning s 51(xxxi) of the Constitution. It was accepted that several authorities in this Court have found, in s 51 of the Constitution, heads of legislative power in respect of which just terms "is an inconsistent or incongruous notion."117 This development was traced in Theophanous v The Commonwealth118. Marking the boundary of "just terms", by reference to the application of a requirement that an exaction is "inconsistent" or "incongruous" 115 Northern Territory (Self-Government) Act, s 6. 116 See Attorney-General (NT) v Chaffey (2007) 231 CLR 651 at 659 [4]; [2007] HCA 34. 117 Theophanous v The Commonwealth (2006) 225 CLR 101 at 124 [56] per Gummow, Kirby, Hayne, Heydon and Crennan JJ, quoting Re Director of Public Prosecutions; Ex parte Lawler (1994) 179 CLR 270 at 285 per Deane and 118 (2006) 225 CLR 101 at 125-126 [57]-[60] per Gummow, Kirby, Hayne, Heydon and Crennan JJ, citing Trade Practices Commission v Tooth & Co Ltd (1979) 142 CLR 397; [1979] HCA 47; R v Smithers; Ex parte McMillan (1982) 152 CLR 477; [1982] HCA 76; Rich v Australian Securities and Investments Commission (2004) 220 CLR 129; [2004] HCA 42. Hayne Crennan Bell with them, may admittedly involve difficult questions of degree and judgment119. Notwithstanding such difficulties, marking the boundary in that way is120: "grounded in the realisation that to characterise certain exactions of government (such as levying of taxation, imposition of fines, exaction of penalties or forfeitures, or enforcement of a statutory lien) as an acquisition of property would be incompatible with the very nature of the exaction." The first respondent did not urge any reconsideration or overruling of authorities illustrative of that proposition121. The first respondent's submissions sought to distinguish the statutory scheme from earlier statutory schemes for forfeiture, including forfeiture provisions fastening on property connected with an offence122, or property used to commit an offence123, or where property had been originally conferred so as to deter commission of an offence124, or the value of property forfeited had a commensurate relationship with the offence125. That effort turned on a distinction sometimes made between "forfeiture", directed to property used in or 119 Theophanous v The Commonwealth (2006) 225 CLR 101 at 126 [60]. 120 Theophanous v The Commonwealth (2006) 225 CLR 101 at 126 [60]. 121 Burton v Honan (1952) 86 CLR 169 at 180-181; Trade Practices Commission v Tooth & Co Ltd (1979) 142 CLR 397 at 408; R v Smithers; Ex parte McMillan (1982) 152 CLR 477 at 488-489; Re Director of Public Prosecutions; Ex parte Lawler (1994) 179 CLR 270 at 288-289. 122 Burton v Honan (1952) 86 CLR 169 at 175, 180-181. 123 Re Director of Public Prosecutions; Ex parte Lawler (1994) 179 CLR 270 at 124 Theophanous v The Commonwealth (2006) 225 CLR 101 at 127 [63]. 125 R v Smithers; Ex parte McMillan (1982) 152 CLR 477 at 485, 488. Hayne Crennan Bell derived from crime, and "confiscation" of the proceeds or profits of crime made by a person from drug offences126. By reference to the statutory objectives "to compensate the Territory community for the costs of deterring, detecting and dealing with β¦ criminal activities"127, the statutory scheme was then characterised by the first respondent as a non-regulatory revenue-raising scheme which played no legislative role in the enforcement of the criminal law in relation to drug offences or in the deterrence of such activities. The argument subsumed a complaint that the statutory scheme targeted "legitimately generated wealth", which suggested some want of proportion between the purposes of the statutory scheme and the possible adverse impacts on persons declared to be drug traffickers. It was never explained how or why the concept of "proportionality", which may not be applicable to non-purposive heads of legislative power enumerated in s 51 of the Constitution128, confines the scope of the legislative powers granted to the Territory legislature. These arguments, raising issues of substance and form in relation to "property" that are familiar in the established doctrine concerning s 51(xxxi) of the Constitution129, invite a speculative inquiry as to the topics which were the main preoccupation of the Territory's legislature in enacting the legislation. The proper inquiry, however, is the subject matter of the statutory scheme130. The question is whether the statutory scheme can be properly characterised as a law with respect to forfeiture, that is, a law which exacts or imposes a penalty or sanction for breach of provisions which prescribe 126 As to which, see Hodgson, Profits of Crime and Their Recovery, (1984) at 5; Alldridge, Money Laundering Law: Forfeiture, Confiscation, Civil Recovery, Criminal Laundering and Taxation of the Proceeds of Crime, (2003) at 71-88. 127 Forfeiture Act, s 10(2). 128 Theophanous v The Commonwealth (2006) 225 CLR 101 at 128 [69]-[70] per Gummow, Kirby, Hayne, Heydon and Crennan JJ. 129 JT International SA v The Commonwealth (2012) 86 ALJR 1297 at 1329-1331 [144]-[154] per Gummow J, 1335-1336 [180]-[189] per Hayne and Bell JJ; 291 ALR 669 at 705-708, 713-714; [2012] HCA 43. 130 Fairfax v Federal Commissioner of Taxation (1965) 114 CLR 1 at 6-7, 11-13 per Kitto J; [1965] HCA 64. Hayne Crennan Bell a rule of conduct131. That inquiry must be answered positively, which precludes any inquiry into the proportionality, justice or wisdom of the legislature's chosen measures132. The provisions comprising the statutory scheme in respect of declared drug traffickers do not cease to be laws with respect to the punishment of crime because some may hold a view that civil forfeiture of legally acquired assets is a harsh or draconian punishment. As Dixon CJ said, concerning the customs legislation providing for forfeiture considered in Burton v Honan133: "once the subject matter is fairly within the province of the Federal legislature the justice and wisdom of the provisions which it makes in the exercise of its powers over the subject matter are matters entirely for the Legislature and not for the Judiciary." More recently, in R v Smith (David)134, Lord Rodger of Earlsferry said: "If in some circumstances [a confiscation scheme] can operate in a penal or even a draconian manner, then that may not be out of place in a scheme for stripping criminals of the benefits of their crimes. That is a matter for the judgment of the legislature". The reference in the statutory objectives to the costs of "deterring" or "dealing with" the consequences of a drug trafficker's activities is not fairly to be read as restricted to the "costs" of law enforcement, capable of arithmetical calculation for the purposes of raising revenue. A remedial purpose confined thus might raise a question of proportionality, but the social consequences of drug crime referred to in Wong v The Queen135 are not so confined. Further, the legislative purpose of protecting society by incapacitating a drug trafficker 131 Re Director of Public Prosecutions; Ex parte Lawler (1994) 179 CLR 270 at 278. 132 Burton v Honan (1952) 86 CLR 169 at 180; Re Director of Public Prosecutions; Ex parte Lawler (1994) 179 CLR 270 at 290, 294. 133 (1952) 86 CLR 169 at 179. 134 [2002] 1 WLR 54 at 61 [23]; [2002] 1 All ER 366 at 373. 135 (2001) 207 CLR 584 at 607-608 [64]. Hayne Crennan Bell through forfeiture or confiscation of his or her assets is a method of "dealing with" the consequences of such criminal activities. The Territory legislature has determined that a person who is proven to have committed at least three qualifying drug offences within a specified period is liable to have his or her property forfeited or confiscated. Characterising those provisions as an acquisition of property without provision of just terms is erroneous. The requirement of just terms is "incompatible with the very nature of the exaction"136, being a punishment for crime. It is within the province of a legislature to gauge the extent of the deleterious consequences of drug trafficking on the community and the soundness of measures, even measures some may consider to be harsh and draconian punishment, which are thought necessary to both "deter" and "deal with" such activities. The political assessments involved are matters for the elected Parliament of the Territory and complaints about the justice, wisdom, fairness or proportionality of the measures adopted are complaints of a political, rather than a legal, nature137. Construction of s 52(3) The first respondent contended that s 52(3)(a) of the Forfeiture Act, set out above, contained a temporal limitation. The principle relied upon is the principle of legality. Shortly stated for present purposes, legislation affecting fundamental rights must be clear and unambiguous, and any ambiguity must be resolved in favour of the protection of those fundamental rights138. Statutory forfeiture abrogates fundamental property rights. The next step in the argument involved construing s 52(3)(a) as though it were amended by addition and alteration to read "if at the time the charge is finally determined the person has 136 Theophanous v The Commonwealth (2006) 225 CLR 101 at 126 [60] per Gummow, Kirby, Hayne, Heydon and Crennan JJ. 137 Magaming v The Queen (2013) 87 ALJR 1060 at 1081 [108] per Keane J; 302 ALR 461 at 485. 138 Coco v The Queen (1994) 179 CLR 427 at 437 per Mason CJ, Brennan, Gaudron and McHugh JJ; [1994] HCA 15; Saeed v Minister for Immigration and Citizenship (2010) 241 CLR 252 at 271 [58] per French CJ, Gummow, Hayne, Crennan and Kiefel JJ; [2010] HCA 23. Hayne Crennan Bell not been declared under section 36A of the Misuse of Drugs Act to be a drug trafficker". The first respondent was convicted and sentenced in respect of the third relevant charge on 22 September 2011. The s 36A declaration was made on 15 August 2012. Applying the first respondent's construction, as set out immediately above, it was then contended that s 52(3)(a) operates so that the restraining order ceased to have effect on 22 September 2011. The consequence of applying that construction of s 52(3)(a) is that a necessary condition of forfeiture under s 94(1), namely an extant restraining order in respect of property, did not exist at the time of the making of the s 36A declaration. The Court of Appeal rejected this construction. It held that s 52(3)(a) provides for the cessation of the effect of a restraining order without the need for further court order where the relevant charge is finally determined and the Supreme Court does not make a s 36A declaration139. The circumstances in which this might occur could at least include a finding in the criminal proceedings that a person is not guilty, or a failure of the DPP to proceed, or to prove what is required, under s 36A. The Court of Appeal's construction accords with numerous textual considerations: the words used, the specified requirement that a s 36A declaration cannot be made until at least three relevant convictions have been recorded, and the provision that an application for such a declaration may be made "at the time of a hearing for an offence or at any other time."140 Unlike the first respondent's proffered construction, the Court of Appeal's interpretation of s 52(3)(a) accords with, and does not frustrate, the stated objectives of the statutory scheme and must be upheld. Conclusions The result is that s 36A of the Misuse of Drugs Act and s 94(1) of the Forfeiture Act do not, singly or together, operate to deny the Supreme Court of the Northern Territory such independence and impartiality as is compatible with its constitutional role as a repository of federal jurisdiction. Further, the 139 Emmerson v Director of Public Prosecutions (2013) 33 NTLR 1 at 21 [53] per Riley CJ, 22 [57] per Kelly J, 35 [99] per Barr J. 140 Misuse of Drugs Act, s 36A(2). Hayne Crennan Bell provisions do not effect an acquisition of property within the contemplation of the Northern Territory (Self-Government) Act141. Orders For the reasons given the following orders should be made: Appeal allowed. Set aside the order of the Court of Appeal of the Northern Territory made on 28 March 2013 and paragraphs 1, 2 and 4 (first appearing) of the order of the Court of Appeal made on 13 May 2013 and, in their place, order that the appeal to that Court be otherwise dismissed with costs. The second appellant pay the first respondent's costs in this Court. 141 Northern Territory (Self-Government) Act, s 50(1). Introduction Section 6 of the Northern Territory (Self-Government) Act 1978 (Cth) ("the Self-Government Act") confers power on the Legislative Assembly of the Northern Territory "to make laws for the peace, order and good government of the Territory". The power is subject to the express limitation in s 50(1) of the Self-Government Act that it "does not extend to the making of laws with respect to the acquisition of property otherwise than on just terms". Section 36A of the Misuse of Drugs Act (NT) ("the Misuse Act") and ss 44(1)(a) and 94 of the Criminal Property Forfeiture Act (NT) ("the Forfeiture Act") contravene that express limitation on the power of the Legislative Assembly. They are laws with respect to the acquisition of property otherwise than on just terms. To explain why, it is necessary to start with an identification of the critical features of their legal operation. Legislative scheme The Supreme Court of the Northern Territory is established by the Legislative Assembly under the Supreme Court Act (NT). It is a court which the Commonwealth Parliament can invest, under s 122 of the Constitution, with jurisdiction in respect of matters arising under Commonwealth laws applicable throughout Australia, which is properly described as "federal jurisdiction". Together with other Territory courts, and with State courts which the Commonwealth Parliament can invest with federal jurisdiction under s 77(iii) of the Constitution, the Supreme Court is therefore a court in which the "judicial power of the Commonwealth" can be vested within the meaning of s 71 of the Constitution142. Together with other State and Territory courts, it is a Ch III court. The Director of Public Prosecutions ("the DPP") is a statutory officer appointed under the Director of Public Prosecutions Act (NT). The DPP exercises functions on behalf of the "Crown", meaning the executive government which is the repository of the executive power formally vested in the 142 North Australian Aboriginal Legal Aid Service Inc v Bradley (2004) 218 CLR 146 at 162-163 [27]-[28]; [2004] HCA 31. Administrator of the Territory143. The DPP's functions include functions conferred by the Misuse Act and the Forfeiture Act. Section 36A of the Misuse Act allows the DPP to apply to the Supreme Court for a declaration that a person is a "drug trafficker"144. The Supreme Court, on hearing the DPP's application, must declare the person to be a drug trafficker if satisfied of two conditions145. One is that the person has been found guilty by the Supreme Court of a drug offence146 of a kind specified in the section147. The other is that the person has been found guilty of two or more corresponding drug offences in the 10 years prior to committing that offence148. A declaration under s 36A of the Misuse Act that a person is a drug trafficker has no substantive legal effect other than that given to it by s 94 of the Forfeiture Act. By force of that section, the declaration has the effect that there is "forfeited to the Territory": "all property subject to a restraining order that is owned or effectively controlled by the person", and "all property that was given away by the person". The statutorily declared purpose of that forfeiture is "to compensate the Territory community for the costs of deterring, detecting and dealing with the [person's] criminal activities"149. Difficult issues might arise as to the effect of forfeiture on interests of other persons. Those issues can be put to one side. For present purposes, it is sufficient to focus on the most straightforward operation of the provisions: to forfeit property wholly owned by the person who is declared to be a drug trafficker. Property of that nature extends to "all or any property" owned by the person150, including all or any legal or equitable interests of the person in "real or personal property of any description, wherever situated and whether tangible or 143 Section 31 of the Self-Government Act; s 11(1)(a) of the Director of Public Prosecutions Act (NT). 144 Section 36A(1). 145 Section 36A(3). 146 Section 36A(3)(a). 147 Section 36A(6). 148 Section 36A(3)(b). 149 Section 10(2). 150 Section 44(2)(a). intangible"151. The necessary and sufficient condition of the forfeiture of property owned by a person who is declared to be a drug trafficker is that the property is subject to a restraining order at the time of the declaration. limit the property restrained having regard The Supreme Court can make a restraining order under s 44(1)(a) of the Forfeiture Act in relation to all or any property of a person, on the application of the DPP, in any case where the person is charged (or is intended within 21 days to be charged) with an offence that could lead to the person being declared to be a drug trafficker. The Supreme Court has discretion as to the making of a restraining order. Plainly, however, it is no part of the Supreme Court's discretion the penal consequences (for the person) or to the compensatory consequences (for the Territory) of the forfeiture which would follow should the person be found guilty of the offence charged and should the DPP then make a separate application for a declaration that the person is a drug trafficker. A restraining order can be set aside on specified grounds, which relevantly include that the person charged does not own the property restrained152, but otherwise the restraining order remains in force until the charge is finally determined153. If the person is found guilty of the offence charged, the Supreme Court is specifically prohibited from making any allowance in sentencing the person for the fact or prospect of the person's property being forfeited as a result of the person being declared to be a drug trafficker154. Proceedings on an application under the Forfeiture Act, including an application for a restraining order under s 44(1)(a), are taken to be civil proceedings for all purposes155. Proceedings on an application under s 36A of the Misuse Act partake of the same civil character. The Supreme Court's adjudication of criminal guilt is a precondition to the Supreme Court making a declaration. But the making of the declaration is the culmination of a civil process which operates separately from the criminal process. The forfeiture which results under s 94 of the Forfeiture Act is independent of and cumulative upon the punishment for criminal guilt. 151 Section 5, "property". Cf White v Director of Public Prosecutions (WA) (2011) 243 CLR 478 at 483 [5], 485-486 [10]-[12], 489 [28]-[29]; [2011] HCA 20. 152 Section 65(1). 153 Section 52(3)(a). 154 Section 5(4)(c) of the Sentencing Act (NT). 155 Section 136(1). The legislative scheme therefore operates at its core to effect a civil forfeiture under s 94 of the Forfeiture Act, on declaration of a person to be a drug trafficker under s 36A of the Misuse Act, of all or any of the property owned by that person provided only that the property is subject to a restraining order under s 44(1)(a) of the Forfeiture Act at the time of the declaration. Two features of that core operation of the scheme will be seen to have a critical bearing on the characterisation of those sections as laws with respect to the acquisition of property otherwise than on just terms. First, the forfeiture of property takes effect only on the Supreme Court making a declaration that a person is a drug trafficker. The Supreme Court must make the declaration if the DPP applies for the declaration. The Supreme Court cannot make the declaration if the DPP does not apply. The declaration if made does not declare a previously existing status; the declaration is itself the "factum" by reference to which the legislative scheme operates to effect forfeiture156. That first feature of the scheme distinguishes the statutory forfeiture which results from the making of a declaration that a person is a drug trafficker from felony forfeiture which existed at common law and which was abolished by statute late in the nineteenth century157. The common law rule applied to every felon (fee β landholding; lon β price158) on conviction by a court159. The conviction resulted in an "attainder or corruption of blood" which operated automatically to escheat the felon's real property and to forfeit the felon's personal property160. The common law rule was for a time overlaid by a legislative practice of enacting bills "of attainder" or of "pains and penalties", by 156 Cf Baker v The Queen (2004) 223 CLR 513 at 532 [43]; [2004] HCA 45. 157 Forfeiture Act 1870 (UK) (33 & 34 Vict c 23), s 1; Imperial Act Adopting Act 1873 (WA) (37 Vict No 8); Treason and Felony Forfeiture Act 1874 (SA) (37 & 38 Vict No 25), s 1; Forfeitures for Treason and Felony Abolition Act 1878 (Vic) (42 Vict No 627), s 1; Criminal Law Procedure Act 1881 (Tas) (45 Vict No 14), s 13; Criminal Law Amendment Act 1883 (NSW) (46 Vict No 17), s 416; Escheat (Procedure and Amendment) Act 1891 (Q) (55 Vict No 12), s 12. 158 According, at least, to Blackstone: Commentaries on the Laws of England, (1769), bk 4 at 95-96. But see Pollock and Maitland, The History of English Law, 2nd ed (1898), vol 2 at 464-465. 159 Mitchell, Taylor & Talbot on Confiscation and the Proceeds of Crime, 2nd ed 160 Explained in Dugan v Mirror Newspapers Ltd (1978) 142 CLR 583 at 588-589, 592, 602, 609-610; [1978] HCA 54. See also Kesselring, "Felony Forfeiture in England, c 1170-1870", (2009) 30 Journal of Legal History 201. force of which forfeiture of property might be inflicted on identified or identifiable individuals, for a breach of the criminal law, without judicial trial161. That legislative practice "disappeared from the English scene" before colonial settlement in Australia162. The Constitution of the United States prohibits it, expressly and comprehensively163. Chapter III of the Constitution has repeatedly been held to stand in the way of its reintroduction by Commonwealth legislation enacted in reliance on s 51 of the Constitution164. Whether Ch III would stand in the way of its reintroduction by or under Commonwealth legislation enacted in reliance on s 122 of the Constitution need not now be determined. Second, although s 3 of the Forfeiture Act states that the objective of that Act is to "target the proceeds of crime in general and drug-related crime in particular in order to prevent the unjust enrichment of persons involved in criminal activities", that statement cannot be taken to be comprehensive and does not describe the operation of the scheme constituted by ss 44(1)(a) and 94 of the Forfeiture Act operating in combination with s 36A of the Misuse Act. The DPP can apply for and, subject to the limited discretion of the Supreme Court, obtain a restraining order in respect of all or any of the property of a person shown by later conviction to have been involved in criminal activities. The property subject to a restraining order then forfeited on declaration need have no connection with those or any other criminal activities. That feature of the scheme distinguishes it from most other schemes of criminal forfeiture which now exist under Commonwealth, State and Territory statutes, including under the Forfeiture Act itself, for the forfeiture of "crime- used property"165 or "crime-derived property"166 and for payment of amounts 161 Plucknett, A Concise History of the Common Law, 5th ed (1956) at 205. See also Lehmann, "The Bill of Attainder Doctrine: A Survey of the Decisional Law", (1978) 5 Hastings Constitutional Law Quarterly 767 at 768-770. 162 Mann, "Outlines of a History of Expropriation", (1959) 75 Law Quarterly Review 188 at 211. See also Halsbury's Laws of England, 5th ed, vol 24, par 643. 163 Article I, s 9, cl 3; Art I, s 10, cl 1. 164 Polyukhovich v The Commonwealth (1991) 172 CLR 501 at 535-536, 539, 607, 646-649, 686, 704, 719-721; [1991] HCA 32; Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1 at 27, 69-70; [1992] HCA 64; Haskins v The Commonwealth (2011) 244 CLR 22 at 37 [25]; [2011] HCA 28. 165 Eg ss 11, 44(1)(b), 81-86, 95, 96 and 101. 166 Eg ss 12, 95 and 97. assessed to be "unexplained wealth"167 or "criminal benefits"168. That feature also distinguishes the scheme from multifarious statutory schemes for the forfeiture of property used in the commission of particular crimes, for which there is long historical precedent. It distinguishes the scheme as well from the common law of "deodand" (Deo β to God; dandam β to be given)169, forfeiting property in things causing death, which was abolished by statute in the middle of the nineteenth century170. The scheme was introduced in the Territory in 2002171. It was modelled in part on a scheme which had been introduced in Western Australia in 2000172. The Western Australian scheme was itself without precedent in Australia at the time of its introduction. If precedent existed elsewhere, no mention was made of it at that time and no mention of it was made in argument in this case. Acquisition of property Section 50(1) of the Self-Government Act invokes the language of s 51(xxxi) of the Constitution. It has a corresponding operation. Section 50(1) is to s 6 of the Self-Government Act as s 51(xxxi) is to the other paragraphs of s 51 of the Constitution. Section 50(1) carves out from the legislative power conferred on the Legislative Assembly by s 6 of the Self-Government Act a specific prohibited area of legislative power ascertained by reference to that which s 51(xxxi) carves out (or "abstracts"173) from other legislative powers 167 Eg ss 67-72 and 100. 168 Eg ss 73-80 and 99. 169 Explained: Airservices Australia v Canadian Airlines International Ltd (1999) 202 CLR 133 at 314-316 [549]-[550]; [1999] HCA 62. 170 Abolition of Deodands Act 1846 (UK) (9 & 10 Vict c 62); Imperial Acts Adopting Ordinance 1849 (WA) (12 Vict No 21); Deodands Abolition Act 1849 (NSW) (13 Vict No 18). 171 Criminal Property Forfeiture Act 2002 (NT). 172 Sections 8 and 159 of the Criminal Property Confiscation Act 2000 (WA) and s 32A of the Misuse of Drugs Act 1981 (WA) (as amended by the Criminal Property Confiscation (Consequential Provisions) Act 2000 (WA)). 173 Eg JT International SA v The Commonwealth (2012) 86 ALJR 1297 at 1333 [167]; 291 ALR 669 at 710; [2012] HCA 43. conferred on the Commonwealth Parliament by s 51 of the Constitution174. No question arises as to the relationship between s 51(xxxi) and s 122 of the Constitution175. Analysis under s 50(1) of the Self-Government Act therefore conveniently proceeds by hypothesising a Territory law to be a Commonwealth law sought to be made under a paragraph of s 51 of the Constitution and asking whether power to make that law is abstracted by s 51(xxxi). The settled understanding is that s 51(xxxi)'s abstraction from other legislative powers in s 51 of the Constitution arises by implication from the condition it attaches to the particular legislative power it confers176. The particular legislative power β to make laws "with respect to ... the acquisition of property" β "was introduced β¦ not β¦ for the purpose of protecting the subject or citizen, but primarily to make certain that the Commonwealth possessed a power compulsorily to acquire property"177. The condition β "on just terms" β was "included to prevent arbitrary exercises of the power at the expense of a State or the subject"178. The condition operates to prevent an "acquisition of property" within the meaning of the power from occurring otherwise than "on terms" which are provided by law and which can be characterised as "just"179. The "standard of justice" is one of "fair dealing" considered in accordance with "the life and experience" of the Australian community180. That condition of just terms would be a hollow thing were laws with respect to the acquisition of property within the 174 Attorney-General (NT) v Chaffey (2007) 231 CLR 651 at 659 [3]-[4]; [2007] HCA 175 Cf Wurridjal v The Commonwealth (2009) 237 CLR 309; [2009] HCA 2. 176 Nintendo Co Ltd v Centronics Systems Pty Ltd (1994) 181 CLR 134 at 160; [1994] HCA 27. 177 Grace Brothers Pty Ltd v The Commonwealth (1946) 72 CLR 269 at 290-291; [1946] HCA 11. 178 Grace Brothers Pty Ltd v The Commonwealth (1946) 72 CLR 269 at 291. 179 Grace Brothers Pty Ltd v The Commonwealth (1946) 72 CLR 269 at 291; Smith v ANL Ltd (2000) 204 CLR 493 at 512-513 [48]; [2000] HCA 58. 180 Nelungaloo Pty Ltd v The Commonwealth (1952) 85 CLR 545 at 600; [1952] HCA 11; The Commonwealth v Tasmania (1983) 158 CLR 1 at 291; [1983] HCA 21. See also Bank of New South Wales v The Commonwealth (1948) 76 CLR 1 at 300; [1948] HCA 7; Poulton v The Commonwealth (1953) 89 CLR 540 at 574; [1953] HCA 101. meaning and scope of s 51(xxxi) to fall also within the scope of other legislative powers to which the same condition does not attach. Equally settled is the understanding that not all laws which acquire property are laws with respect to the acquisition of property within the meaning of s 51(xxxi) so as to attract the condition of just terms. There are some laws acquiring property, it has long been understood, which must be able to be enacted under other legislative powers conferred by s 51 of the Constitution and in respect of which the condition of just terms would be "inconsistent", "irrelevant" or "incongruous"181. Laws imposing fines or forfeitures as penalties or punishments for breaches of norms of conduct have long been held to be amongst them. So it has been explained182: "There are some kinds of acquisition which are of their nature antithetical to the notion of just terms but which were plainly intended to be permissible under laws made pursuant to one or more of the grants of power contained in s 51. An example of those kinds of acquisition is the compulsory forfeiture to the Commonwealth of money or specific property as punishment for breach of some general rule of conduct prescribed by a valid law of the Commonwealth. Such an acquisition stands apart from the kinds of 'acquisition of property' which constitute the subject matter of s 51(xxxi) and such laws are beyond the reach of the paragraph's guarantee of just terms." To similar effect183: "A law which imposes a penalty or sanction for breach of a provision prescribing a rule of conduct and which, apart from its imposition of the penalty or sanction, is a law with respect to a head of power other than s 51(xxxi) cannot be classified as a law with respect to the acquisition of property within s 51(xxxi). To place it within the s 51(xxxi) category would be to annihilate the penalty or sanction and thus to weaken, if not destroy, the normative effect of the prescription of the 181 Eg Airservices Australia v Canadian Airlines International Ltd (1999) 202 CLR 133 at 251 [342]; Theophanous v The Commonwealth (2006) 225 CLR 101 at 115 [11], 125-126 [57]-[60]; [2006] HCA 18. 182 Mutual Pools & Staff Pty Ltd v The Commonwealth (1994) 179 CLR 155 at 187; [1994] HCA 9. See also Re Director of Public Prosecutions; Ex parte Lawler (1994) 179 CLR 270 at 274-275, 284-285; [1994] HCA 10. 183 Re Director of Public Prosecutions; Ex parte Lawler (1994) 179 CLR 270 at 278. rule of conduct. The irrelevance of s 51(xxxi) to the imposition of fines and forfeitures is trite law." The Solicitor-General of the Commonwealth, with the support of the Solicitor-General for the Northern Territory, advanced the proposition that it is always necessary to ask whether an impugned law is with respect to the acquisition of property within the meaning of s 51(xxxi) before asking whether that law can be supported by another legislative power. The proposition has some judicial support184, but it runs counter to the settled understanding reflected in the passages already quoted. A law acquiring property which escapes the just terms condition in s 51(xxxi) is first and foremost a law which is supported by another legislative power. As every legislative power conferred by s 51 is "subject to" the Constitution, a law imposing a penalty or sanction for breach of a provision prescribing a rule of conduct which is supported by another legislative power conferred by s 51 must comply with Ch III of the Constitution. The method of imposition could not involve the conferral of judicial power other than on a Ch III court and could not compromise the institutional integrity of a Ch III court. The Solicitor-General of the Commonwealth, again with the support of the Solicitor-General for the Northern Territory, advanced the further proposition that a law forfeiting property can never be a law with respect to the acquisition of property within the meaning of s 51(xxxi) if the primary purpose of the law is to impose a penalty or sanction for breach of a norm of conduct. That must be so, he argued, because just terms would be inconsistent with fulfilment of that purpose; it would "annihilate" the penalty and "weaken" the norm. The "justice and wisdom" of such a legislative choice, he emphasised, "are matters entirely for the Legislature and not for the Judiciary"185. The proposition did not go so far as to suggest that consistency with legislative purpose is always the sole determinant of whether or not a law which acquires property and which is otherwise within legislative power is with respect to the acquisition of property within the meaning of s 51(xxxi). Were that so, a law which extinguished a liability for the purpose of reducing the cost of administering a statutory scheme would pass muster186, as would a law which imposed liability on a named entity (say an interstate trader187 or a foreign 184 Airservices Australia v Canadian Airlines International Ltd (1999) 202 CLR 133 185 Burton v Honan (1952) 86 CLR 169 at 179; [1952] HCA 30. 186 Cf Smith v ANL Ltd (2000) 204 CLR 493 at 500-501 [8]-[9]. 187 Section 51(i). corporation188) for the purpose of contributing to consolidated revenue189. For a law acquiring property to escape the just terms condition in s 51(xxxi), the law must at least have a purpose consonant with the constitutional purpose of that condition: to prevent arbitrary acquisition. Nor did the proposition go so far as to suggest that the means adopted to achieve a permissible legislative purpose are irrelevant to determining whether a law which acquires property and which is otherwise within legislative power is with respect to the acquisition of property within the meaning of s 51(xxxi). Yet the proposition is still too sweeping. A law which forfeits property for the primary purpose of imposing a penalty or sanction for breach of a norm of conduct and which escapes the just terms condition in s 51(xxxi) is an example of a law which has the general characteristics of a law which acquires property without attracting that condition: the objective of the law must be within power; the acquisition must be a necessary or characteristic feature of the means the law selects to achieve that objective; and the means must be appropriate and adapted to achieving that objective. Those characteristics were identified by Brennan J in Mutual Pools & Staff Pty Ltd v The Commonwealth190 and were embodied in the test adopted and applied by Gleeson CJ and Kirby J in Airservices Australia v Canadian Airlines International Ltd191. They are a reflection of the underlying purpose of the just terms condition to prevent arbitrary acquisitions. To conclude that a law which acquires property and which is otherwise within legislative power is one in respect of which the condition of just terms would be inconsistent, irrelevant or incongruous is necessarily to conclude that the dominant character of the law is informed by those characteristics. A law forfeiting property which has as its primary purpose imposing a penalty or sanction for breach of a norm of conduct will ordinarily have the first of those characteristics: it will ordinarily have an objective that is within power. The law will not necessarily have the other characteristics. That will depend on whether the particular forfeiture is a necessary or characteristic feature of the means the law selects to achieve that objective and on whether those means are appropriate and adapted to achieving that objective. 188 Section 51(xx). 189 Cf Australian Tape Manufacturers Association Ltd v The Commonwealth (1993) 176 CLR 480 at 509-510; [1993] HCA 10. 190 (1994) 179 CLR 155 at 179-180. 191 (1999) 202 CLR 133 at 180 [98]. The applicable test is more stringent than that which will sometimes apply to determine whether the law is otherwise within power. As befits the application of a constitutional guarantee, the inquiry is not as to "whether the law is capable of being reasonably considered to be appropriate and adapted to the end sought to be achieved" but rather as to "whether the burden or restriction [that is to say, the acquisition of property] is reasonably appropriate and adapted, in the court's judgment, to the legitimate end in view"192. Analysis "must begin from an understanding of the practical and legal operation of the legislative provisions that are in issue"193. As ought go without saying, consideration of the merits of the law purporting to impose the taking (the "justice and wisdom" of its provisions194) forms no part of the analysis. "It is not the name, but the character of the taking, that controls the outcome of constitutional characterisation."195 Forfeiture laws in other cases Unsurprisingly, given its almost unprecedented nature, none of the cases in which a law imposing a fine or forfeiture as a penalty or sanction for breach of a norm of conduct, which has been held or assumed not to be a law with respect to the acquisition of property within the meaning of s 51(xxxi), have concerned forfeiture under a legislative scheme like the present. In Burton v Honan196, one of the laws in question automatically forfeited crime-used property on the commission of an offence197; the other automatically condemned the forfeited property on conviction198. Both were enacted under ss 51(i) and 51(ii) of the Constitution. 192 Cunliffe v The Commonwealth (1994) 182 CLR 272 at 300; [1994] HCA 44; Attorney-General (SA) v Corporation of the City of Adelaide (2013) 87 ALJR 289 at 310-311 [62]; 295 ALR 197 at 219; [2013] HCA 3. 193 Telstra Corporation Ltd v The Commonwealth (2008) 234 CLR 210 at 232 [49]; [2008] HCA 7. 194 Cf Burton v Honan (1952) 86 CLR 169 at 179. 195 Airservices Australia v Canadian Airlines International Ltd (1999) 202 CLR 133 at 196 (1952) 86 CLR 169. 197 Section 229 of the Customs Act 1901 (Cth). 198 Section 262 of the Customs Act 1901 (Cth). In Cheatley v The Queen199, the law in question authorised a court to order forfeiture of crime-used property as punishment on conviction of an offence200. So also did the law in question201 in Re Director of Public Prosecutions; Ex parte Lawler202. Both were laws enacted under s 51(x) of the Constitution. In R v Smithers; Ex parte McMillan203, the law in question authorised a court in civil proceedings to order a person to pay a pecuniary penalty calculated by reference to the court's assessment of benefits derived by the person from criminal activity204. The law was enacted under s 51(i) of the Constitution. In Della Patrona v Director of Public Prosecutions (Cth) [No 2]205, the law in question forfeited automatically on conviction property owned by the convicted person, previously restrained by a court on application of the Commonwealth Director of Public Prosecutions, not shown by that person to have been lawfully acquired and not used in, or in connection with, the commission of the relevant offence206. The law was, again, enacted under s 51(i) of the Constitution207. Theophanous v The Commonwealth208, on which the Solicitor-General of the Commonwealth and the Solicitor-General for the Northern Territory placed particular reliance, concerned forfeiture under a law enacted under s 51(xxxvi) of the Constitution of parliamentary pension entitlements themselves conferred under a law enacted under s 51(xxxvi) of the Constitution. The means by which that forfeiture was imposed certainly bear some similarity to the present scheme. Forfeiture occurred on the making of a forfeiture order, which a court was 199 (1972) 127 CLR 291; [1972] HCA 63. 200 Section 13AA of the Fisheries Act 1952 (Cth). 201 Section 106(1)(a) of the Fisheries Management Act 1991 (Cth). 202 (1994) 179 CLR 270. 203 (1982) 152 CLR 477; [1982] HCA 76. 204 Section 243B of the Customs Act 1901 (Cth). 205 (1995) 38 NSWLR 257. See also Webb v The Commonwealth (1999) 73 ALJR 206 Sections 30, 43 and 48(4) of the Proceeds of Crime Act 1987 (Cth). 207 See also Director of Public Prosecutions v Toro-Martinez (1993) 33 NSWLR 82. 208 (2006) 225 CLR 101. required to make, on application by the Commonwealth Director of Public Prosecutions (acting on the authority of a Commonwealth Minister), if the court was satisfied that the holder of the pension entitlements to be made the subject of the order had been convicted of a corruption offence relevantly involving abuse of his or her parliamentary office209. Forfeiture of that property by those means was held to be justified, consistently with s 51(xxxi), not as punishment for a corruption offence, but as an incident of the statutory scheme under which the pension entitlements were provided210. The forfeiture was a "qualification" to those entitlements "by way of a sanction for corrupt abuse of office"211. It was a vindication of "the public interest in denying to those who succumbed to ... temptation" entitlements provided "to encourage probity in legislators"212. Laws imposing sanctions by way of forfeiture, as was said in Theophanous, "are, and long before the Commonwealth were, regular features of the law in England, the Australian colonies and now of the Commonwealth"213. This forfeiture law is different. This forfeiture law The two distinguishing features of the Territory legislative scheme have already been identified. Forfeiture occurs under s 94 of the Forfeiture Act only if the Supreme Court, on the application of the DPP, makes a declaration under s 36A of the Misuse Act that a person is a drug trafficker. Forfeiture extends to all or any of the property owned by the person irrespective of any connection with criminal activity provided only that the property is the subject of a restraining order earlier made by the Supreme Court, on the application of the DPP, under s 44(1)(a) of the Forfeiture Act. Would a law imposing forfeiture on those terms sought to be made under s 51 of the Constitution escape characterisation as a law with respect to the acquisition of property within the meaning of s 51(xxxi)? 209 Sections 16, 19 and 21 of the Crimes (Superannuation Benefits) Act 1989 (Cth). 210 Cf Kariapper v Wijesinha [1968] AC 717 at 737, quoted in Albarran v Companies Auditors and Liquidators Disciplinary Board (2007) 231 CLR 350 at 358-359 [17]; [2007] HCA 23. 211 (2006) 225 CLR 101 at 115 [10], 116 [14]. 212 (2006) 225 CLR 101 at 127 [63]. 213 (2006) 225 CLR 101 at 126 [60]. The sole legislatively declared purpose of the forfeiture, it will be recalled, is "to compensate the Territory community for the costs of deterring, detecting and dealing with the [person's] criminal activities". That legislative purpose cannot explain the extent of the forfeiture consonantly with the constitutional purpose of the just terms condition to prevent arbitrary acquisition. That is because the means chosen by the law are not appropriate and adapted to achieve it. No attempt has been made in the legislative scheme to link the value of the property forfeited to the amount of the costs identified. The Solicitor-General of the Commonwealth and the Solicitor-General for the Northern Territory sought to supplement that legislatively declared purpose by arguing that the forfeiture has the additional purpose (they went so far as to say the primary purpose) of imposing a penalty or sanction for breach of a norm of conduct. Forfeiture is a deterrent, they argued, to a person who has been found guilty of two or more corresponding drug offences in 10 years going on to commit another offence. No doubt forfeiture under the legislative scheme does act as a deterrent to the commission of another offence, but how? The penalty or sanction it imposes for breach of the identified norm of conduct is not imposed as part of the process of the adjudication and punishment of the offence by a court. The penalty or sanction does not, like felony forfeiture at common law, result automatically by operation of law on commission or conviction of the offence. The character of the penalty or sanction is, rather, as captured in the submission of the Solicitor- General for the Northern Territory that "[t]he legislature has determined that a person who is proven to have committed three qualifying drug offences is liable to have his or her property confiscated". The words are his; the emphasis is mine. The penalty or sanction imposed by the legislative scheme, such as it is, lies in the threat of statutorily sanctioned executive expropriation: the forfeiture (or not) of all (or any) property at the discretion of the DPP. The Solicitor-General for the Northern Territory, with the support of the Solicitor-General for South Australia, argued that the DPP could be expected to exercise discretion in administering the legislative scheme of civil forfeiture in a manner no different from "ordinary prosecutorial discretion": considering whether the Supreme Court would be likely to make the order sought; if so, considering whether seeking the order is in "the public interest"; and, if so, making the relevant application. Be that so. Be it also accepted that the DPP will exercise the discretion with the utmost propriety. It serves simply to highlight that a person who is proven to have committed three qualifying drug offences is, under the legislative scheme, made liable to the confiscation of such of his or her property as the DPP considers in the public interest. The discretion of the DPP is not relevantly akin to the prosecutorial discretion considered in Palling v Corfield214. That discretion was enlivened by conviction of a person of an offence of failing to attend a medical examination the purpose of which was to determine whether the person was fit for compulsory military service. The discretion was to request the person to enter into a recognisance to attend and submit to a subsequent medical examination and to sentence the person to imprisonment if the person refused215. The discretion was plainly appropriate and adapted to the defence of the Commonwealth. It was supported by s 51(vi). Its exercise did not result in forfeiture of property so as potentially to engage s 51(xxxi). There is a serious question as to whether, if sought to be made under s 51 of the Constitution, the conferral of an executive discretion to obtain civil forfeiture as a means of punishment for criminal guilt would contravene Ch III of the Constitution by purporting to confer on the DPP part of an exclusively judicial function216. That question was not specifically addressed in argument and is for that reason best left to one side. It is sufficient to observe that conferral of executive discretion of that nature is not a necessary or characteristic feature of penal forfeiture, and to conclude that forfeiture by means which involve the conferral of such an executive discretion is not appropriate and adapted to achieving an objective of imposing a penalty or sanction for breach of the identified criminal norm. Sections 44(1)(a) and 94 of the Forfeiture Act and s 36A of the Misuse Act, in imposing forfeiture on those terms, do not have the characteristic of laws which acquire property for a purpose and by means consistent with the underlying purpose of the just terms condition to prevent arbitrary acquisitions. Their dominant character is that of laws with respect to the acquisition of property within the meaning of s 51(xxxi). Within the meaning of s 50(1) of the Self-Government Act, they are laws with respect to the acquisition of property otherwise than on just terms. Conclusion The Court of Appeal of the Northern Territory by majority set aside an earlier declaration that the first respondent is a drug trafficker and with it an earlier restraining order. The appeal from that judgment to this Court should be 214 (1970) 123 CLR 52; [1970] HCA 53. 215 Section 49 of the National Service Act 1951 (Cth). 216 See Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1. dismissed for the reason that ss 44(1)(a) and 94 of the Forfeiture Act and s 36A of the Misuse Act are beyond the power of the Legislative Assembly by operation of s 50(1) of the Self-Government Act. It is unnecessary and inappropriate to address the distinct issue (which divided the Court of Appeal) of whether s 36A of the Misuse Act if otherwise valid would compromise the institutional integrity of the Supreme Court as a Ch III court. |
HIGH COURT OF AUSTRALIA COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA & ORS PLAINTIFFS AND QUEENSLAND RAIL & ANOR DEFENDANTS Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Queensland Rail [2015] HCA 11 8 April 2015 ORDER The questions asked by the parties in the special case dated 6 August 2014 and referred for consideration by the Full Court be answered as follows: Question 1 Is the first defendant (Queensland Rail) a corporation within the meaning of s 51(xx) of the Commonwealth Constitution? Answer It is unnecessary to answer this question. Question 2 If so, is Queensland Rail a trading corporation within the meaning of s 51(xx) of the Commonwealth Constitution? Answer Yes. Question 3 If so, does the Fair Work Act 2009 (Cth) apply to Queensland Rail and its employees by the operation of s 109 of the Constitution, to the exclusion of the [Queensland Rail Transit Authority Act 2013 (Q)] or the Industrial Relations Act 1999 (Q) or both? Answer Except to say that the Fair Work Act 2009 (Cth) applies to Queensland Rail as a "national system employer" for the purposes of that Act and that ss 69, 72 and 73 of the Queensland Rail Transit Authority Act 2013 (Q) and ss 691A-691D of the Industrial Relations Act 1999 (Q) are to that extent inconsistent with the Fair Work Act 2009 (Cth) and invalid in so far as they apply to Queensland Rail or its employees or the QR Passenger Pty Limited Traincrew Union Collective Workplace Agreement 2009 and Queensland Rail Rollingstock and Operations Enterprise Agreement 2011, it is not necessary to answer this question. Question 4 What relief, if any, are the plaintiffs entitled to? Answer Questions of relief should be determined by a single Justice. Question 5 Who should pay the costs of the special case? Answer The first defendant. Representation J K Kirk SC with H El-Hage for the plaintiffs (instructed by Hall Payne Lawyers) P J Dunning QC, Solicitor-General of the State of Queensland with S E Brown QC and G J D Del Villar for the first defendant (instructed by Crown Law (Qld)) Submitting appearance for the second defendant Interveners J T Gleeson SC, Solicitor-General of the Commonwealth with K E Foley for the Attorney-General of the Commonwealth, intervening (instructed by Australian Government Solicitor) M G Sexton SC, Solicitor-General for the State of New South Wales with J E Davidson for the Attorney-General for the State of New South Wales, intervening (instructed by Crown Solicitor (NSW)) S G E McLeish SC, Solicitor-General for the State of Victoria with G A Hill for the Attorney-General for the State of Victoria, intervening (instructed by Victorian Government Solicitor) G R Donaldson SC, Solicitor-General for the State of Western Australia with R Young for the Attorney-General for the State of Western Australia, intervening (instructed by State Solicitor (WA)) M G Evans QC with C Jacobi for the Attorney-General for the State of South Australia, intervening (instructed by Crown Solicitor (SA)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Queensland Rail Constitutional law β Constitution, s 51(xx) β "[T]rading or financial corporations formed within the limits of the Commonwealth" β Queensland Rail Transit Authority Act 2013 (Q) established right and duty bearing entity which "is not a body corporate" β Functions of entity included provision of labour hire services β Functions to be carried out as a commercial enterprise β Whether entity a trading corporation formed within the limits of the Commonwealth. Words and phrases β "is not a body corporate", "trading corporation". Constitution, s 51(xx). Queensland Rail Transit Authority Act 2013 (Q), s 6. FRENCH CJ, HAYNE, KIEFEL, BELL, KEANE AND NETTLE JJ. The issue The Queensland Rail Transit Authority Act 2013 (Q) ("the QRTA Act") established1 the Queensland Rail Transit Authority ("the Authority"). The Authority is now called2 Queensland Rail. The Authority can create and be made subject to legal rights and duties, which are its rights and its duties3. It can sue and be sued in its name4. It can own property5. The QRTA Act provides6 that the Authority "is not a body corporate". The QRTA Act provides7 that the Authority does not represent the State, and it follows from this provision, coupled with the provisions which give the Authority separate legal personality, that the Authority is not, and is not a part of, the body politic which is the State of Queensland8. The Authority operates as a labour hire company, providing labour used by Queensland Rail Limited ("QRL") to operate railway services in Queensland. QRL is a company governed by the Corporations Act 2001 (Cth). Pursuant to s 67 of the QRTA Act, the Authority holds all the shares in QRL. s 7(1)(b). 8 No party or intervener, other than the Attorney-General for Victoria, submitted that the Authority is part of the body politic which is the State of Queensland. Hayne Bell Nettle Is the Authority a "trading or financial corporation formed within the limits of the Commonwealth" within the meaning of s 51(xx) of the Constitution? If it is, the relations between the Authority and its employees are governed by federal industrial relations legislation. If it is not, State industrial relations legislation applies. The Authority accepts that it is an artificial legal entity formed within the limits of the Commonwealth. It submits that it is not a trading or financial corporation. Rather, it submits, it is an entity which is not a "corporation" and which is not a "trading or financial" corporation. These submissions should be rejected. The Authority is a trading or financial corporation within the meaning of s 51(xx). The litigation The plaintiffs are all associations or organisations of employees. Some are registered under the Fair Work (Registered Organisations) Act 2009 (Cth); some are registered under the Industrial Relations Act 1999 (Q) ("the Queensland Industrial Relations Act"). Members of the State organisations are also members of the federal associations. In a proceeding brought in the original jurisdiction of this Court, the plaintiffs allege that the Authority is a trading corporation within the meaning of s 51(xx) of the Constitution. They allege that it follows that the Authority is a "constitutional corporation" as defined in s 12 of the Fair Work Act 2009 (Cth)9, and a "national system employer"10 for the purposes of that Act. The plaintiffs allege that provisions of the QRTA Act11 (which apply the Queensland Industrial Relations Act to the Authority's employees and treat some federal enterprise agreements as certified under the Queensland Industrial Relations Act) are inconsistent with the Fair Work Act 2009 and invalid to the extent of that inconsistency by operation of s 109 of the Constitution. The plaintiffs also allege that ss 691A-691D of the Queensland Industrial Relations Act (which apply to certain industrial instruments applying to "the employment of persons in a "[A] corporation to which paragraph 51(xx) of the Constitution applies". 10 s 14(1)(a). 11 ss 69, 72 and 73. Hayne Bell Nettle government entity"12) are inconsistent with the Fair Work Act 2009, and thus invalid by operation of s 109 of the Constitution so far as they purport to apply to the Authority, its employees or two identified industrial instruments13. The second defendant to the proceeding (the Queensland Industrial Relations Commission) filed a submitting appearance. The plaintiffs and the Authority (as the active defendant in the proceeding) agreed in stating questions of law for the opinion of the Full Court in the form of a special case based upon certain agreed facts. The first two questions ask whether the Authority is a "corporation" within the meaning of s 51(xx) and, if so, whether it is a "trading corporation". Question 3 asks whether the Fair Work Act 2009 applies to the Authority and its employees to the exclusion of the QRTA Act or the Queensland Industrial Relations Act or both. Questions 4 and 5 relate to relief and costs. Section 51(xx) The questions stated by the parties assume that it is useful to direct separate attention to what is a "corporation" and what is a "trading corporation" within the meaning of s 51(xx). The validity of the assumption was not directly challenged by any party or intervener and it is convenient to proceed without examining that issue. But this must not obscure the obvious importance of recognising that the subject matter of s 51(xx) is not "corporations"; it is "foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth". And neither the word "corporations", where twice appearing, nor the collocation "trading or financial corporations formed within the limits of the Commonwealth" is to be construed without regard to the context within which the expression appears. The competing submissions The chief point of difference between the plaintiffs and the Authority was whether the Authority is a "corporation" within the meaning of the second limb 12 s 691B(1). 13 QR Passenger Pty Limited Traincrew Union Collective Workplace Agreement 2009 and Queensland Rail Rollingstock and Operations Enterprise Agreement Hayne Bell Nettle of s 51(xx). The plaintiffs submitted that "an entity established under law with its own name, and with separate legal personality and perpetual succession, is a corporation within the meaning of s 51(xx)". The Attorney-General of the Commonwealth, intervening, proffered a generally similar description of what is a corporation: "any juristic entity with distinct, continuing legal personality (evidenced by, for example, perpetual succession, the right to hold property and the right to sue and be sued) that is not a body politic reflected or recognised in the Constitution". By contrast, the Authority (with the support of the Attorneys-General for New South Wales and Victoria) submitted that not all artificial entities having separate legal personality are corporations. The Authority submitted that "the intention of Parliament is the defining feature of whether an artificial juristic entity is created as a corporation, and that intention is manifested either by express words or by necessary implication". Hence, so the Authority submitted, the express provision, by s 6(2) of the QRTA Act, that the Authority "is not a body corporate" is especially significant because it reveals the intention of the Parliament and requires the conclusion that the Authority is not a "corporation". The Attorney-General for Victoria submitted that a State has broad scope to create bodies which have a separate legal existence as right and duty bearing entities but which are, or are not, corporations. The submission proffered no criterion for identifying the characteristics that are necessary or sufficient to identify the entity as a "corporation", other than to submit that "[i]f Parliament intended to establish a corporation, it may be expected in a modern statute that express terms of incorporation would be used". Hence, the submission appeared to go no further than the Authority's submission that it is the "intention" of the enacting Parliament which is determinative. The Authority further submitted that, even if it is a "corporation", it is not a "trading or financial corporation". No party or intervener suggested that the Authority is a financial corporation and that aspect of the second limb of s 51(xx) may be left aside from further examination. The Authority accepted that, apart from the case where a corporation is dormant or has barely begun to trade, an "activities" test14 determines whether it is a "trading corporation". But it submitted that its activities do not warrant it being classed as a trading 14 cf R v Federal Court of Australia; Ex parte WA National Football League (1979) 143 CLR 190; [1979] HCA 6. Hayne Bell Nettle corporation because its only activity is to provide employees to a company not at arm's length (QRL) for an amount which yields no profit for the Authority. A "corporation"? For the purposes of deciding this case, it is not necessary to attempt to state exhaustively the defining characteristics of a corporation (whether a "foreign corporation" or a "trading or financial corporation"). Whether the Authority is a trading corporation can be answered without attempting that task. The QRTA Act creates the Authority as a distinct entity. The Authority can have rights and duties. It is, therefore, a separate legal entity: one of those "basic units" of the legal system which "possess the capacity of being parties to the claim-duty and power-liability relationships"15. At the time of federation16, and for centuries before that time17, the only artificial persons in English law were corporations, and corporations were either aggregate or sole. The development of the trust in English law had permitted the establishment and maintenance of arrangements about property and its use without the interposition or creation of any separate artificial legal entity. And in this respect English law differed markedly from systems of law such as that provided by the German Civil Code18 under which "the advantage of corporateness could be acquired by societies of divers sorts and kinds"19. The Authority is neither a corporation sole nor a corporation aggregate of a kind that existed at the time of federation. It bears no resemblance to any of the 15 Paton, A Text-Book of Jurisprudence, 3rd ed (1964) at 351-352. 16 See, for example, Maitland, "The Corporation Sole", (1900) 16 Law Quarterly Review 335 at 335. 17 Coke, The First Part of the Institutes of the Lawes of England, or, A Commentarie upon Littleton, (1628) at Β§1, 2a, Β§413, 250a. 18 Maitland, "Trust and Corporation", in Fisher (ed), The Collected Papers of Frederic William Maitland, (1911), vol 3, 321. 19 Maitland, "The Making of the German Civil Code", in Fisher (ed), The Collected Papers of Frederic William Maitland, (1911), vol 3, 474 at 482. Hayne Bell Nettle ecclesiastical20 or other forms21 of corporation sole then known, and it has no corporators who join, or are joined, together to form the separate entity. (The QRTA Act provides22 expressly that "the Authority is not constituted by the members of the board".) But the Authority expressly disclaimed any argument that "corporation" as used in either limb of s 51(xx) should be read as restricted to corporations of a kind that were known to foreign law or to English or colonial law at the time of federation. And the Authority was right to do so. It is not to be supposed that the only kinds of "foreign corporations" and "trading or financial corporations" with respect to which s 51(xx) gives legislative power are bodies constituted and organised in the way in which corporations of those kinds were constituted and organised in 1900. Foreign corporations are constituted and organised according to the law of another jurisdiction. That law may, and commonly will, differ from Australian law, sometimes markedly. Absent referral of power under s 51(xxxvii), the trading or financial corporations formed within the limits of the Commonwealth to which s 51(xx) refers will typically be constituted and organised according to the laws of a State. (No party or intervener challenged New South Wales v The Commonwealth (The Incorporation Case)23.) Hence, often, the entities with which s 51(xx) deals are entities which owe their existence and form to a law other than a law of the federal Parliament. Before and after federation, there were many radical changes to the legislation (both English and colonial) under which corporations could be constituted and were regulated. Relevant nineteenth century developments were 20 See Maitland, "The Corporation Sole", (1900) 16 Law Quarterly Review 335. 21 See, for example, Fulwood's Case (1591) 4 Co Rep 64b [76 ER 1031] (concerning the Chamberlain of the City of London as a corporation sole) and The Case of Sutton's Hospital (1612) 10 Co Rep 23a [77 ER 960] (concerning the King as a corporation sole). See also Financial Administration and Audit Act 1977 (Q), s 43 and Financial Accountability Act 2009 (Q), s 53 (preserving, continuing and constituting the Treasurer of Queensland as a corporation sole for some purposes). 23 (1990) 169 CLR 482; [1990] HCA 2. Hayne Bell Nettle described in New South Wales v The Commonwealth (Work Choices Case)24 and need not be repeated here. It is enough to observe that issues about corporations and their regulation had been in "legislative and litigious ferment"25 in the later years of the nineteenth century and, after initial hesitation, were seen as warranting the grant of national legislative power. There is no reason to read s 51(xx) as granting power to deal only with classes of artificial legal entities having characteristics fixed at the time of federation. To read the provision in that way would hobble its operation. The course of events in the nineteenth century described in the Work Choices Case points firmly against reading the provision as so restricted. And there is no textual or contextual reason to conclude that the Parliament's power with respect the Commonwealth should be frozen in time by limiting the power to entities of a kind that existed at federation. Nor is there any textual or contextual reason to conclude that the Parliament should have legislative power with respect only to those entities constituted and organised under the laws of foreign states which are entities of a kind generally similar to those that existed or could be formed under foreign law as it stood in all its various forms in 1900. trading or financial corporations formed within limits of the Accepting, then, that the Authority was right to disclaim an argument that a "corporation" must be an entity of a kind known in 1900, what is it that marks an artificially created legal entity as a "trading or financial corporation formed within the limits of the Commonwealth"? As has been noted, the Authority sought to answer this question by reference only to whether the Parliament providing for the creation of the entity "intended" to create a "corporation". But this answer gave no fixed content to what is a "corporation". The Authority's submissions proffered no description, let alone definition, of what it means to say that the entity created is or is not a "corporation". Hence the "intention" to which the Authority referred, and upon which it relied as providing the sole criterion for determining what is or is not within the legislative power of the Commonwealth, was an intention of no fixed content. Rather, it was an intention to apply, or in this case not to apply, a particular label. A labelling intention of this kind provides no satisfactory criterion for determining the content of federal legislative power. 24 (2006) 229 CLR 1 at 90-98 [96]-[124]; [2006] HCA 52. 25 Work Choices Case (2006) 229 CLR 1 at 95 [113]. Hayne Bell Nettle Section 6(2) The Authority's submissions about "intention" were closely related to, even dependent upon, s 6(2) of the QRTA Act and its provision that the Authority is not a "body corporate". But how is s 6(2) to be construed, and what is the work that it does? the phrase "trading or The Authority's submissions treated "body corporate" (in s 6(2)) as financial synonymous with "corporation" corporations"). But treating the two different expressions in that way assumed rather than demonstrated that a statutorily created artificial legal entity (that is not a body politic) may be a form of right and duty bearing entity which is distinct from entities called (interchangeably) either "corporations" or "bodies corporate". That is, the submissions took as their premise that there is a class of artificial right and duty bearing entities (other than bodies politic) called either "corporations" or "bodies corporate" and a class of those entities which are not, and cannot be, described by either expression. The assumed division of artificial legal entities that are not bodies politic between "corporations" or "bodies corporate" on the one hand, and "other artificial legal entities" on the other, cannot be made. No criteria which would differentiate between the two supposed classes of entities were identified. Neither s 6(2) itself, nor the QRTA Act more generally, supports a division of that kind. The premise for the Authority's submissions is not established. If s 6(2) does not support (or make) a division of artificial legal entities between "corporations" or "bodies corporate" and "other artificial legal entities", what is the purpose or effect of its provision? Taken as a whole, the QRTA Act makes plain that it proceeds on the footing that the Authority's relations with its employees are not governed by the Fair Work Act 2009. It may be accepted, therefore, that one purpose of the QRTA Act was to create an entity which would provide labour to QRL in circumstances where the relations between employer and employee would be governed by State industrial relations law. If s 6(2) were to be understood as intended to do no more than take the Authority outside the federal industrial relations law, by taking the Authority outside the reach of s 51(xx), it would be necessary to observe that a State Parliament cannot determine the limits of federal legislative power. More particularly, it would be necessary to observe that whether an entity is a corporation of a kind referred to in s 51(xx) presents an issue of substance, not mere form or label. But s 6(2) has a larger purpose than Hayne Bell Nettle simply attaching a label designed to avoid the application of an otherwise applicable federal law. Providing that the Authority "is not a body corporate" engages other Queensland statutory provisions. In particular, although the Authority is what the Government Owned Corporations Act 1993 (Q) ("the GOC Act") calls a "government entity"26, the Authority is not a government entity that is "established as a body corporate under an Act or the Corporations Act"27. Because that is so, the Authority cannot be declared28 by regulation to be a "government owned corporation" for the purposes of the GOC Act. In addition, it may be that the provision that the Authority is not a body corporate could be said to deny the application of s 46 of the Acts Interpretation Act 1954 (Q). Section 46 provides that a provision of an Act relating to offences punishable on indictment or summary conviction "applies to bodies corporate as well as individuals". Whether s 6(2) of the QRTA Act does have the effect of denying the operation of s 46 of the Acts Interpretation Act need not be decided. The exclusion of the application of the GOC Act by s 6(2) of the QRTA Act providing that the Authority is not a body corporate means that the provision is more than mere labelling. Section 6(2) takes its place, and is to be given its meaning and application, in the context provided by the Queensland statute book generally and the GOC Act in particular. Understood in that context, s 6(2) provides that the entity which the QRTA Act creates is one with which other provisions of Queensland law engage in a particular way. Section 6(2) is not to be understood as providing that the entity created is one of a genus of artificial legal entities distinct from what s 51(xx) refers to as "corporations". The decided cases Reference was made in argument to a number of decisions which it was suggested is a "corporation". Particular emphasis was given to this Court's decisions in Chaff and Hay Acquisition Committee v J A Hemphill and Sons Pty Ltd29 and Williams v light on whether the Authority throw 26 s 4(b). 27 s 5(a). 28 s 5(b). 29 (1947) 74 CLR 375; [1947] HCA 20. Hayne Bell Nettle Hursey30, as well as some of the cases about the status of trade unions in the United Kingdom31. But neither of the cases in this Court decided any issue about the reach of the legislative power conferred by s 51(xx) and, of course, the British trade union cases were even further removed from the issues which must be decided in this case. Not only are the British trade union cases about issues far removed from the issues in this case, they are decisions which were very much the product of their times and the legislation which then governed the organisation of labour and liability for trade disputes. They offer no useful guidance to the resolution of the present issues. It is, however, necessary to say something about each of the decisions of this Court and the decision of the Supreme Court of the United States in Liverpool Insurance Company v Massachusetts32, which was referred33 to in Chaff and Hay Acquisition Committee. The issue in Chaff and Hay Acquisition Committee was whether the committee, a statutory body created under South Australian legislation, was a legal entity which the courts of New South Wales should recognise as competent to sue or be sued in its own name. This Court held that the committee had an independent legal existence which should be recognised. It rejected arguments that recognition should not be given to the committee because it was "to operate as a Crown agent"34 or that it had but a temporary existence35. As the Full Court of the Supreme Court of New South Wales did36, this Court noted37 that the 30 (1959) 103 CLR 30; [1959] HCA 51. 31 Taff Vale Railway v Amalgamated Society of Railway Servants [1901] AC 426; National Union of General and Municipal Workers v Gillian [1946] KB 81; Bonsor v Musicians' Union [1956] AC 104. 33 (1947) 74 CLR 375 at 388 per Starke J. 34 (1947) 74 CLR 375 at 379. 35 (1947) 74 CLR 375 at 384. 36 J A Hemphill & Sons Pty Ltd v Chaff and Hay Acquisition Committee (1946) 47 SR (NSW) 218 at 220. 37 (1947) 74 CLR 375 at 385 per Latham CJ, 388 per Starke J. Hayne Bell Nettle statute constituting the committee had not used express words of incorporation38 and that the committee was not "created a corporation according to the requirements of English law in force in South Australia"39. But neither of those observations was treated as determinative of the issue that was before the Court: could the committee sue and be sued in its own name? Understood in the light of that issue, what was said in Chaff and Hay Acquisition Committee gives no direct assistance in deciding this case. In particular, and contrary to the tenor of the Authority's submissions, Chaff and Hay Acquisition Committee does not support drawing a distinction between corporations of the kind or kinds referred to in s 51(xx) and other forms of artificial legal entity that are not bodies politic. In Liverpool Insurance Company, the Supreme Court of the United States decided40 that, despite declarations in the English statutes constituting the insurance company that it was not a corporation, "[s]uch local policy can have no place here in determining whether an association, whose powers are ascertained and its privileges conferred by law, is an incorporated body". Especially was that so when, as the Supreme Court rightly observed41, what was said in the relevant English statutes was directed to denying that the members of the insurance company had limited liability and did not detract from what the Court called the "true character" of the company. The decision in Liverpool Insurance Company offers no guidance about the reach of the legislative power given by s 51(xx). It does emphasise, however, the need to examine the reasons for, and effect to be given to, a legislative declaration that a body is or is not a "body corporate" or a "corporation". Williams v Hursey concerned the liability of an organisation of employees to damages for the tort of conspiracy and directed particular attention to whether the Waterside Workers' Federation and its Hobart "branch" could sue or be sued. The Federation was an organisation registered under the Conciliation and Arbitration Act 1904 (Cth); the Hobart branch was not registered under that Act or the Trade Unions Act 1889 (Tas), which reproduced the English Trade Union 38 cf Mackenzie-Kennedy v Air Council [1927] 2 KB 517 at 534. 39 (1947) 74 CLR 375 at 388 per Starke J. 40 77 US 566 at 576 (1870). 41 77 US 566 at 576 (1870). Hayne Bell Nettle Acts of 1871 and 1876. Members of the Hobart branch were also members of the registered organisation. Fullagar J, with whose reasons Dixon CJ and Kitto J agreed, made two points of present relevance. First, he said42 that the Conciliation and Arbitration Act 1904 gave the Federation, as a registered organisation, "what I would not hesitate to call a corporate character β an independent existence as a legal person". Second, Fullagar J said43 that "[t]he notion of qualified legal capacity is intelligible, but the notion of qualified legal personality is not" (emphasis added). Hence, the section of the Conciliation and Arbitration Act 1904 which provided that every registered organisation "shall for the purposes of the Act have perpetual succession and a common seal, and may own possess and deal with any real or personal property"44 was, without more, "quite enough to give to a registered organization the full character of a corporation"45. Neither the particular statutory root of incorporation nor the particular capacities which the body was given were treated as determining whether it had "the full character of a corporation". Rather, independent existence as a legal person, which is to say recognition as a right and duty bearing entity, was the determinative consideration. Williams v Hursey points firmly against accepting the Authority's submissions that corporations, or bodies corporate, form a class of statutorily created right and duty bearing entities distinct from another class of statutorily created right and duty bearing entities identified only according to whether the constituting legislation (and legislature) "intended" to create the entity concerned as a corporation. It also points against accepting the submissions of the Attorney-General for Victoria that the power of a State to create artificial legal entities gives it a "broad scope" to create a right and duty bearing entity which is not a corporation for the purposes of s 51(xx). 42 (1959) 103 CLR 30 at 52. 43 (1959) 103 CLR 30 at 52. 44 (1959) 103 CLR 30 at 52 per Fullagar J, citing s 136 of the Conciliation and Arbitration Act 1904. 45 (1959) 103 CLR 30 at 52. Hayne Bell Nettle Like the Federation considered in Williams v Hursey, the Authority is created as a separate right and duty bearing entity. It may own, possess and deal with real or personal property. It is an entity which is to endure regardless of changes in those natural persons who control its activities and, in that sense, has "perpetual succession". Its constituting Act provides for mechanisms by which its assumption of rights and duties may be formally recorded and signified. The Authority has "the full character of a corporation". A "trading corporation"? As already noted, the Authority submitted that its activities were not such as to make it a trading corporation. In its written submissions, the Authority submitted that it dealt only with a related entity, QRL, and made no profit from those dealings, and that these "peculiar" activities did not make it a trading corporation. The Authority did not elaborate on these matters in oral argument. By contrast, some of the interveners, especially the Attorney-General of the Commonwealth and the Attorney-General for Victoria, advanced detailed submissions about what test or tests should be applied in deciding whether a corporation is a trading corporation. In order to decide this case, however, it is not necessary to examine those submissions in any detail. Instead, it is enough to conclude that no matter whether attention is directed to the constitution and purposes of the Authority, or what it now does, or some combination of those considerations, the Authority must be found to be a trading corporation. The QRTA Act established the Authority as an entity having functions which included "managing railways"46, "controlling rolling stock on railways"47, "providing rail transport services, including passenger services"48 and "providing services relating to rail transport services"49. The QRTA Act provides50 that the Authority is to "carry out its functions as a commercial enterprise". Provision is 46 s 9(1)(a). 47 s 9(1)(b). 48 s 9(1)(c). 49 s 9(1)(d). Hayne Bell Nettle made51 for the Authority to pay dividends to the State and, to that end, the Authority is obliged52 to give the responsible Ministers in May each year an estimate of its profit for the financial year. Not only that, the Authority is liable53 to pay to the Treasurer, for payment into the consolidated fund of the State, amounts equivalent to the amounts for which the Authority would have been liable if it had been liable to pay tax imposed under a Commonwealth Act. In light of these provisions, the conclusions that the Authority was constituted with a view to engaging in trading and doing so with a view to profit are irresistible. Even if the Authority is treated as now doing nothing more than supplying labour to QRL (a related entity) for the purposes of QRL providing rail services and even if, as the Authority submitted, the Authority chooses to supply that labour at a price which yields it no profit, those features of its activities neither permit nor require the conclusion that the Authority is not a trading corporation. Labour hire companies are now a common form of enterprise. The engagement of personnel by one enterprise for supply of their labour to another enterprise is a trading activity. That the parties to the particular supply arrangement are related entities does not deny that characterisation of the activity. That the prices for supply are struck at a level which yields no profit to the supplier likewise does not deny that the supplier is engaged in a trading activity. In combination, these considerations require the conclusion that the Authority is a trading corporation. It is not necessary to consider which of them is or are necessary or sufficient to support the conclusion. Inconsistency of laws Little attention was given in oral argument to the question asked in the special case about inconsistency between the QRTA Act and the Fair Work Act 2009 or between the Queensland Industrial Relations Act and the Fair Work Act 2009. Instead, argument proceeded on the footing that, if the Authority is held to be a trading corporation, the inconsistency consequences urged by the plaintiffs would follow. The answer which is given to the question about inconsistency of laws follows from the conclusion that the Authority is a trading corporation but 52 s 56(1)(a). Hayne Bell Nettle should be framed by reference to the particular provisions which were the focus of the litigation. Conclusion and orders The plaintiffs are entitled to have the questions asked in the special case answered substantially in their favour. Having regard, however, to what has been said about the parties' assumption that it is useful to ask a separate question about whether the Authority is a "corporation" within the meaning of s 51(xx), it is better to provide no answer to that question and, instead, answer the second question, which directs attention to whether the Authority is a "trading corporation". What relief the plaintiffs should have in the proceedings is a matter better dealt with by a single Justice. The questions in the special case should be answered as follows: Is the first defendant (Queensland Rail) a corporation within the meaning of s 51(xx) of the Commonwealth Constitution? Answer: It is unnecessary to answer this question. If so, is Queensland Rail a trading corporation within the meaning of s 51(xx) of the Commonwealth Constitution? Answer: Yes. If so, does the Fair Work Act 2009 (Cth) apply to Queensland Rail and its employees by the operation of s 109 of the Constitution, to the exclusion of the [Queensland Rail Transit Authority Act 2013 (Q)] or the Industrial Relations Act 1999 (Q) or both? Answer: Except to say that the Fair Work Act 2009 (Cth) applies to Queensland Rail as a "national system employer" for the purposes of that Act and that ss 69, 72 and 73 of the Queensland Rail Transit Authority Act 2013 (Q) and ss 691A-691D of the Industrial Relations Act Hayne Bell Nettle are to that extent inconsistent with the Fair Work Act 2009 (Cth) and invalid in so far as they apply to Queensland Rail or the QR Passenger Pty Limited Traincrew Union Collective Workplace Agreement 2009 and Queensland Rail Rollingstock and Operations Enterprise Agreement 2011, it is not necessary to answer this question. its employees or What relief, if any, are the plaintiffs entitled to? Answer: Questions of relief should be determined by a single Justice. Who should pay the costs of the special case? Answer: The first defendant. Introduction to corporations with respect Commonwealth legislation often refers to entities on which it confers rights or imposes duties as "constitutional corporations" and defines that expression to mean "corporations" to which s 51(xx) of the Constitution applies. The statutory reference the Commonwealth Parliament is empowered by s 51(xx) to make laws: "foreign corporations" and "trading or financial corporations formed within the limits of the Commonwealth". Questions have often arisen as to whether particular entities constituted under State legislation, not disputed to be "corporations formed within the limits of the Commonwealth", answer the constitutional description of "trading or financial" corporations. The anterior question in this case is whether a particular entity constituted under State legislation answers the constitutional description of a "corporation". to which That anterior question arises because the Queensland Rail Transit Authority Act 2013 (Q), despite establishing "Queensland Rail"54, conferring on it "all the powers of an individual"55 (specifically including to "enter into contracts", "acquire, hold, dispose of, and deal with property", "employ staff", "appoint agents and attorneys", and "engage consultants"56), and providing that it "may sue and be sued in the name it is given"57, declares that it "is not a body corporate"58. If effective to prevent Queensland Rail answering the constitutional description of a corporation, that declaration would take Queensland Rail outside the operation of the Fair Work Act 2009 (Cth), which governs employment by constitutional corporations to the exclusion of State and Territory industrial laws59. Removal of Queensland Rail from the operation of the Fair Work Act was part of the legislative design of the Queensland Rail Transit Authority Act, as is made plain by transitional and other provisions which expressly contemplate 54 Sections 6(1) and 63. 55 Section 7(1). 56 Section 7(1)(a)-(e). 57 Section 7(4). 58 Section 6(2). 59 Sections 14 and 26 of the Fair Work Act 2009 (Cth). that employment by Queensland Rail would be governed by the Industrial Relations Act 1999 (Q)60. Whatever operation the statutory declaration that Queensland Rail is not a body corporate might have under other Queensland legislation61, or on any rule of the common law, that statutory declaration is ineffective to prevent Queensland Rail answering the constitutional description of a corporation. It answers that description because it is an entity established by law with capacity to own property, to contract and to sue. Once it is concluded that Queensland Rail answers the constitutional description of a corporation, there can be no doubt that Queensland Rail also answers the constitutional description of a trading corporation. It answers that description because its statutory functions under the Queensland Rail Transit Authority Act include the provision of "rail transport services" and "services relating to rail transport services"62. Those, on any view, are substantial trading purposes. Queensland Rail also answers that description because it in fact provides the services of its employees under contract to its wholly owned subsidiary, Queensland Rail Limited. That, on any view, is a substantial trading activity. Queensland Rail is therefore a constitutional corporation governed by the Fair Work Act to the exclusion, by force of s 109 of the Constitution, of Queensland industrial laws, and in particular to the exclusion of the Industrial Relations Act. Queensland Rail is a corporation Professor Frederic Maitland wrote with accentuated simplicity in 190063: "Persons are either natural or artificial. The only natural persons are men. The only artificial persons are corporations. Corporations are either aggregate or sole." 60 Sections 69, 73, 74, 75 and 76. 61 Eg s 46 of the Acts Interpretation Act 1954 (Q). 62 Section 9(1)(c) and (d). 63 Maitland, "The Corporation Sole", (1900) 16 Law Quarterly Review 335 at 335. That, Maitland added, "would be an orthodox beginning for a chapter on the English Law of Persons, and such it would have been at any time since the days Maitland elsewhere described a legal "person" as "a right-and- duty-bearing unit"65. Implicit in that description, often since repeated66, is the traditional, essentially functional, understanding of legal "personality" as lying in the existence of legally conferred or legally recognised capacity to have or to form legal relations67. Implicit also is the traditional understanding of legal personality as unitary: "[t]he notion of qualified legal capacity is intelligible, but the notion of qualified legal personality is not"68. To refer to an "artificial" legal person necessarily implies no more than the existence of a unit or entity, not being merely a natural person, in respect of which legal personality has been conferred or recognised69. It is not to deny the existence of other units or entities created or recognised by law to have capacities other than to have or to form legal relations, such as those whose capacities are confined to the arbitral70 or administrative71. The particular position of the "state" or the "Crown", controversial in 190072 and incompletely theorised even 64 See Co Lit 2a. See also Blackstone, Commentaries on the Laws of England, (1765), Bk 1 at 119. 65 Maitland, "Moral Personality and Legal Personality", (1905) 6 Journal of the Society of Comparative Legislation 192 at 193. 66 Eg Paton, A Text-Book of Jurisprudence, (1946) at 249; Pound, Jurisprudence, (1959), vol 4 at 191-192. 67 Dewey, "The Historic Background of Corporate Legal Personality", (1926) 35 Yale Law Journal 655; Smith, "Legal Personality", (1928) 37 Yale Law Journal 283. 68 Williams v Hursey (1959) 103 CLR 30 at 52; [1959] HCA 51. 69 Pollock, "Has the Common Law Received the Fiction Theory of Corporations?", (1911) 27 Law Quarterly Review 219. 70 Eg R v Duncan; Ex parte Australian Iron and Steel Pty Ltd (1983) 158 CLR 535 at 587; [1983] HCA 29. 71 Eg Church of Scientology v Woodward (1982) 154 CLR 25 at 56-57; [1982] HCA 78; Nair v Minister for Immigration and Multicultural Affairs (2001) 107 FCR 60 72 Maitland, "The Crown as Corporation", (1901) 17 Law Quarterly Review 131; Harrison Moore, "The Crown as Corporation", (1904) 20 Law Quarterly Review (Footnote continues on next page) today73, can for present purposes be put to one side given that the Constitution, in sustaining the "Commonwealth" and the "States", and in providing for the "government of any territory"74, "goes directly to the conceptions of ordinary life" in that it "treats the Commonwealth and the States as organizations or institutions of government possessing distinct individualities"75 and enables self- governing Territories to be treated in the same way76. The orthodox historical understanding that all corporations are either "corporations aggregate" (incorporated groups of co-existing natural persons) or "corporations sole" (an incorporated series of individuals) underlay the common statutory practice in Australia in the nineteenth and twentieth centuries of creating government business enterprises: by declaring the holder of a specified office (frequently a "Commissioner") to be a "corporation sole"77; by declaring the holders of a number of specified offices (frequently "Commissioners") to be a "body corporate"78; or, as became over time more common, by "establishing" an entity (frequently a "Board", an "Authority", or a "Commission") as a "body corporate" to "consist" of the holders of specified appointments79. Not infrequently, cases came before the courts raising issues as to whether such statutory entities, although expressly so incorporated, nevertheless fell within the "shield of the Crown" so as to have immunity from suit. There was in those cases, as was noted more than once, "evidence of a strong tendency to regard a 351; Jethro Brown, "The Personality of the Corporation and the State", (1905) 21 Law Quarterly Review 365. 73 Cf Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1 at 24 [74]-[75]; [2003] HCA 6. 74 Section 122. 75 Bank of New South Wales v The Commonwealth (1948) 76 CLR 1 at 363; [1948] HCA 7. 76 Capital Duplicators Pty Ltd v Australian Capital Territory (1992) 177 CLR 248 at 271-273; [1992] HCA 51. 77 Eg Railway Act 1863 (Q), s 7; Railways Act 1914 (Q), ss 6 and 8, considered in Crouch v Commissioner for Railways (Q) (1985) 159 CLR 22; [1985] HCA 69. 78 Eg Government Railways Act 1888 (NSW), s 6. 79 Eg Australian National Airlines Act 1945 (Cth), ss 6 and 7, considered in Australian National Airways Pty Ltd v The Commonwealth (1945) 71 CLR 29; [1945] HCA 41. See generally Sawer, "The Public Corporation in Australia", in Friedmann (ed), The Public Corporation: A Comparative Symposium, (1954) 3. statutory corporation formed to carry on public functions as distinct from the Crown unless parliament has by express provision given it the character of a servant of the Crown"80. The orthodox historical understanding that all corporations are either corporations aggregate or corporations sole underlay the observation of Quick and Garran in 1901, with reference to the words "the incorporation of banks" in s 51(xiii) of the Constitution, that "[a]n Act of Incorporation is an Act creating an artificial or fictitious person, the peculiarity of which is that it has a legal existence separate and distinct from the individual units of which it is composed"81. The same understanding also underlay the scepticism Griffith CJ displayed as late as 1914 when, after noting that Commonwealth legislation established the Commonwealth Bank as a body corporate without corporators, he chose to "pass by the question whether in the nature of things it is competent for the Commonwealth Parliament to declare that such an abstraction disassociated from any material persons shall be regarded as a corporation"82. The question having been so left, Dixon J later took the opportunity to say that he saw "no reason to doubt" the power of the Commonwealth Parliament "for a purpose within its competence, to create a juristic person without identifying an individual or a group of natural persons with it, as the living constituent or constituents of the corporation"83. His Honour continued84: "In other legal systems an abstraction or even an inanimate physical thing has been made an artificial person as the object of rights and duties. The legislative powers of the Commonwealth, while limited in point of subject matter, do not confine the legislature to the use of existing or customary legal concepts or devices, that is, except in so far as a given subject matter may be defined in terms of existing legal conceptions, as perhaps in some respects may be the case in, for example, pars (ii), (xii), (xiv), (xvii), (xviii), (xxiv) and (xxv) of s 51." 80 Launceston Corporation v The Hydro-Electric Commission (1959) 100 CLR 654 at 662; [1959] HCA 12; Townsville Hospitals Board v Townsville City Council (1982) 149 CLR 282 at 291; [1982] HCA 48. See also State Electricity Commission of Victoria v City of South Melbourne (1968) 118 CLR 504 at 510; [1968] HCA 49. 81 Quick and Garran, The Annotated Constitution of the Australian Commonwealth, 82 Heiner v Scott (1914) 19 CLR 381 at 393; [1914] HCA 82. 83 Bank of New South Wales v The Commonwealth (1948) 76 CLR 1 at 361. 84 Bank of New South Wales v The Commonwealth (1948) 76 CLR 1 at 361. His Honour's omission of s 51(xx) from that list of examples of Commonwealth legislative powers unconfined by customary legal concepts or devices can be taken to have been deliberate. The power of the Commonwealth Parliament to make laws with respect to "foreign corporations" (entities on which legal personality has been conferred or recognised under other legal systems), to say nothing of its power to make laws with respect to "trading or financial corporations", would from its inception have been deprived of much of its potential scope and utility were those references to "corporations" confined to categories of corporations known domestically in 1900. The orthodox historical understanding that the only artificial persons are corporations, to which Maitland referred in 1900, was very soon after challenged by the uncertain status afforded to an English trade union in the reasoning of the House of Lords in Taff Vale Railway v Amalgamated Society of Railway Servants85, combined with the emphatic observation of Farwell J at first instance in that case that "although a corporation and an individual or individuals may be the only entity known to the common law who can sue or be sued", it was undoubtedly competent to create by legislation an entity with capacity to form legal relations which was neither86. The same orthodox historical understanding had earlier been challenged by the emergence in the nineteenth century of a category of joint stock companies, "sometimes said to be quasi incorporated"87, which were associations of stockholders on which legislation expressly conferred capacity (through designated office bearers) variously to contract, to hold property and to sue and be sued, but in respect of which the same legislation also refrained from express incorporation. There were often good commercial reasons for maintaining such a structure notwithstanding the potential for express incorporation under more general statutes88. As Professor Geoffrey Sawer explained89: "It was common form in the early United Kingdom and colonial private Acts creating trading companies to avoid express incorporation (which 86 [1901] AC 426 at 429. 87 Lindley, A Treatise on the Law of Companies, Considered as a Branch of the Law of Partnership, 5th ed (1889) at 7. 88 As to the development of which see New South Wales v The Commonwealth (Work Choices Case) (2006) 229 CLR 1 at 90-93 [97]-[106]; [2006] HCA 52. 89 Sawer, "Government as Personalized Legal Entity", in Webb (ed), Legal Personality and Political Pluralism, (1958) 158 at 165. would have removed personal liability of shareholders altogether and so seriously reduced the company's 'credit rating'), and instead provide that the company might sue and be sued in the name of its chairman or treasurer, and that the liability of shareholders should be some specified amount in addition to their shareholding." Legislation of the New South Wales and Victorian Parliaments which made provision for such quasi incorporated companies commonly contained express declarations that "[n]othing herein contained shall extend or be deemed taken or construed to extend to incorporate the [members of the company]"90. It was foreseeable in the decade leading to Federation, and was in fact the case, that substantial companies would continue to trade under such structures into the twentieth and even twenty-first centuries91. Whilst "it is impossible to distil any conclusion about what the framers intended should be the meaning or the ambit of operation of s 51(xx) from what was said in debate about the power, or from the drafting history"92, were s 51(xx)'s reference to "trading or financial corporations formed within the limits of the Commonwealth" (as ultimately formulated in the wake of the widespread corporate collapses of the 1890s93) to have omitted such quasi incorporated companies would have been a somewhat surprising oversight. A relevant example of such legislation of the New South Wales and Victorian Parliaments was that providing for the carrying on of business in those colonies of the "company or partnership" established in England in 1836 by the name of "The Liverpool Fire and Life Insurance Company", the name of which later went through several iterations, one of which was "The Liverpool and London Fire and Life Insurance Company". In conferring capacity on that company through designated office bearers to contract, to hold property and to 90 See eg Australian Marine Assurance Company Act 1832 (NSW), s 6; Union Assurance Company Act 1836 (NSW), s 7; Australian Gas Light Company Act 1837 (NSW), s 10; Bathurst Bank Act 1839 (NSW), s 11; Melbourne Auction Company Act 1842 (NSW), s 12; Australasian Fire and Life Insurance Company Act 1857 (Vic), s 6; Union Bank of Australia Act 1858 (Vic), s 8. 91 Notably the Australian Gas Light Company, the structure of which remained as established by the Australian Gas Light Company Act 1837 (NSW) until the AGL Corporate Conversion Act 2002 (NSW). See Austin and Ramsay, Ford's Principles of Corporations Law, 15th ed (2013) at 43 [2.100]. 92 New South Wales v The Commonwealth (Work Choices Case) (2006) 229 CLR 1 at 93 As to which see New South Wales v The Commonwealth (Work Choices Case) (2006) 229 CLR 1 at 94-96 [110]-[116]. sue and be sued, and in also expressly declaring that "nothing [herein] contained shall extend or be deemed construed or taken to extend to incorporate the said [C]ompany", the New South Wales and Victorian legislation substantially replicated legislation earlier enacted by the United Kingdom Parliament94. That United Kingdom legislation was considered by the Supreme Court of the United States in holding in Liverpool Insurance Company v Massachusetts that the Company, as trading in Massachusetts, was not to be characterised as a mere association of its members, some of whom were citizens of the United States entitled to the protection of the privileges and immunities clause of the United States Constitution, but was rather to be characterised as a corporation, to whom that clause had no application95. The Supreme Court noted that the Company, under its deed of settlement as "legalized and enlarged by the acts of Parliament", "possesse[d] many, if not all, the attributes generally found in corporations for pecuniary profit which are deemed essential to their corporate character"96. The Supreme Court stated that "whatever may be the effect" in the courts of the United Kingdom of the express declaration that it was not to constitute a corporation, "it cannot alter the essential nature of a corporation or prevent the courts of another jurisdiction from inquiring into its true character"97. The significance of Liverpool Insurance Company v Massachusetts for present purposes lies in the Supreme Court's recognition that a joint stock company, despite being only quasi incorporated by legislation in a form common in England and in the Australian colonies, was nevertheless a corporation for the purposes of the United States Constitution. There can be no doubt that it is open to any Australian legislature, as it may be open to the legislature of the United Kingdom or of any other foreign power, to "provide for the creation of a body which, as distinct from the natural persons composing it, has legal personality, whether or not the legislature chooses to identify its creature by the term 'corporation'"98. There can equally be 94 Liverpool and London Fire and Life Insurance Company Act 1857 (NSW); Liverpool and London Fire and Life Insurance Company Act 1862 (NSW), s 5; Liverpool and London and Globe Insurance Company Act 1865 (NSW), s 8; Liverpool and London and Globe Insurance Company Act 1877 (Vic), s 12. See Liverpool Fire and Life Insurance Company Act 1836 (UK), s 13; Liverpool and London Fire and Life Insurance Company Act 1847 (UK), s 7; Liverpool and London and Globe Insurance Company Act 1864 (UK), s 22. 95 77 US 566 at 573, 575-576 (1870). 96 77 US 566 at 574 (1870). 97 77 US 566 at 576 (1870). 98 Re McJannet; Ex parte Minister for Employment, Training and Industrial Relations (Q) (1995) 184 CLR 620 at 664; [1995] HCA 31, citing Chaff and Hay Acquisition (Footnote continues on next page) no doubt that the description which that legislature chooses to give to the body it so creates cannot determine the character of that body for the purpose of s 51(xx) of the Constitution. In words which derive from those of Marshall CJ in McCulloch v Maryland99, and which have come so often to be repeated that their full significance may be overlooked, O'Connor J said in Jumbunna Coal Mine NL v Victorian Coal Miners' Association100 that "it must always be remembered that we are interpreting a Constitution broad and general in its terms, intended to apply to the varying conditions which the development of our community must involve" and continued: "For that reason, where the question is whether the Constitution has used an expression in the wider or in the narrower sense, the Court should ... always lean to the broader interpretation unless there is something in the context or in the rest of the Constitution to indicate that the narrower interpretation will best carry out its object and purpose." Murphy J embraced that fundamental tenet of constitutional construction when he said in R v Federal Court of Australia; Ex parte WA National Football League ("Adamson's Case")101: "In s 51(xx) of the Constitution, the word, corporations, is not used in any narrow sense. For example, foreign corporations may include syndicates or joint ventures, common in European and other legal systems whose law of incorporation is based on principles different from those of Australian States and England. A corporation is an entity with status as an artificial person; this involves it having its own capacities rights and liabilities which are distinct from those of its members (if it has any members)". The term "corporations" is, and was in 1900, readily capable of encompassing all artificial legal persons; that is to say, all entities, not being merely natural persons, invested by law with capacity for legal relations. There is nothing in the context or in the rest of the Constitution to indicate that any narrower interpretation would best carry out the object and purpose of the Committee v J A Hemphill and Sons Pty Ltd (1947) 74 CLR 375 at 384-386, 389- 390, 391; [1947] HCA 20. 99 17 US 316 at 407 (1819). 100 (1908) 6 CLR 309 at 367-368; [1908] HCA 95. 101 (1979) 143 CLR 190 at 238-239; [1979] HCA 6. conferral by s 51(xx) of a national legislative power with respect to both foreign corporations and trading or financial corporations formed within the limits of the Commonwealth. The constitutional context, both structural and historical, points in favour of the application of the broad orthodox historical meaning. The constitutional reference to foreign corporations encompasses all artificial entities invested with legal personality under other systems of law. The constitutional reference to corporations formed within the limits of the Commonwealth encompasses all artificial entities invested with legal personality under Australian law. Queensland Rail has legal personality because it is legislatively conferred with capacity to own property, to contract and to sue. It is unnecessary to consider whether any lesser subset of those attributes might suffice. The statutory declaration that Queensland Rail is not a body corporate does not deprive Queensland Rail of any of those attributes. Queensland Rail is a trading corporation The word "trading" is one descriptor of the class of Australian corporations with respect to which s 51(xx) confers power on the Commonwealth Parliament to make laws. Not being a term of art, but being instead an adjectival form of the noun "trade", "trading" in s 51(xx) is to be interpreted and applied with the same liberality as "trade" in ss 51(i) and 92. There is no reason to consider that "trading" must be descriptive of every "trading corporation" in the same way. trading corporations Immediately after referring to a corporation as "an entity with status as an artificial person", Murphy J in Adamson's Case went on to state that "[t]he constitutional description of those bodies incorporated for the purpose of trading; and also those corporations which trade"102. Those two ways in which his Honour identified the constitutional description of trading corporation as capable of applying to a corporation β by reference to its trading purpose or alternatively by reference to its trading activity β must each be qualified to exclude that which is insubstantial. This is not a case which calls for any examination of that qualification or for any consideration of how purpose and activity might interact in a case where the substantiality of a trading purpose or of a trading activity might be marginal. includes The basic point that the constitutional description of trading is capable of being applied to a corporation either by reference to its substantial trading purpose (irrespective of activity) or by reference to its substantial trading activity (irrespective of purpose) is sound in principle and is supported by authority. I 102 (1979) 143 CLR 190 at 239. would reject on both of those bases the submission made on behalf of the Attorney-General for Victoria which attempts to introduce as a substitute an inquiry into a corporation's "true character", to be evaluated by reference to that corporation's "characteristic activity". In terms of principle, Victoria's submission runs counter to the standard approach to constitutional construction that a subject-matter of Commonwealth legislative power need not be reduced to a single or predominant characterisation. It is enough, for example, that the subject-matter of a law with respect to "lighthouses", made under s 51(vii), be either something designed for use as a lighthouse or something in fact used as a lighthouse; it is not necessary to go on to attribute to that thing the "true character" of a lighthouse. In terms of authority, Victoria's submission does not explain the outcome in Fencott v Muller103 (in which the company held to be a trading or financial corporation had not engaged in any activity at all), and is inconsistent with the rejection of a need to focus on a corporation's predominant or characteristic activity in the reasoning of a majority of this Court in each of Adamson's Case104, State Superannuation Board v Trade Practices Commission105 and The Commonwealth v Tasmania (The Tasmanian Dam Case)106. Looking to its statutory functions, and irrespective of its activities (if any) from time to time, it is sufficient to conclude that Queensland Rail answers the constitutional description of a trading corporation that those functions include the provision of services of and relating to rail transport. Whilst it can be observed that Queensland Rail is statutorily obliged to carry out its statutory functions as a commercial enterprise107, a profit-making objective is not essential to trade108. Looking alternatively to its current activities, and independently of any consideration of its statutory functions, it is sufficient to conclude that Queensland Rail answers the constitutional description of a trading corporation 103 (1983) 152 CLR 570 at 601-602; [1983] HCA 12. 104 (1979) 143 CLR 190 at 208, 236, 237, 239. 105 (1982) 150 CLR 282 at 303-304; [1982] HCA 72. 106 (1983) 158 CLR 1 at 155-157, 179, 240, 292-293; [1983] HCA 21. 107 Section 10(1) of the Queensland Rail Transit Authority Act 2013 (Q). 108 Re Ku-ring-gai Co-operative Building Society (No 12) Ltd (1978) 22 ALR 621 at 648-649; State Superannuation Board v Trade Practices Commission (1982) 150 CLR 282 at 305-306. that Queensland Rail in fact provides the services of its employees under contract to Queensland Rail Limited. It is not to the point that Queensland Rail Limited is its only customer. Nor is it to the point that Queensland Rail Limited is its wholly owned subsidiary. Nor is it to the point that the services are supplied only on a cost recovery basis. Answers to questions I agree that the questions raised for the consideration of the Full Court should be answered in the manner proposed in the joint reasons for judgment, save that I would answer the first and third questions "Yes". |
HIGH COURT OF AUSTRALIA APPELLANT AND THE QUEEN RESPONDENT Kentwell v The Queen [2014] HCA 37 9 October 2014 ORDER Appeal allowed. Set aside the order of the Court of Criminal Appeal of the Supreme Court of New South Wales made on 14 November 2013. Remit the application dated 26 June 2013 to the Court of Criminal Appeal for determination. On appeal from the Supreme Court of New South Wales Representation T A Game SC with J L Roy for the appellant (instructed by Legal Aid NSW) J H Pickering SC with T L Smith for the respondent (instructed by Solicitor for Public Prosecutions (NSW)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Kentwell v The Queen Criminal law β Appeal β Application to extend time within which to apply for leave to appeal against sentence β Principles to be applied in determining whether extension of time should be granted β Whether applicant required to demonstrate that refusal of application would occasion substantial injustice β Relevance of principle of finality β Relevance of prospect of success should extension be granted β Whether extension of time should be granted. Criminal law β Appeal β Appeal against sentence β Appellate court's power to re- exercise sentencing discretion β Where error of the kind identified in House v The King (1936) 55 CLR 499 established β Whether appellate court must form positive opinion that some other sentence is warranted in law before intervening. Words and phrases β "Abdul test", "principle of finality", "substantial injustice", "warranted in law". Criminal Appeal Act 1912 (NSW), ss 6(3), 10(1)(b). Criminal Appeal Rules (NSW), rr 3A, 3B. FRENCH CJ, HAYNE, BELL AND KEANE JJ. The appellant is presently serving sentences that were imposed on him in the District Court of New South Wales (Johnstone DCJ) on 20 February 2009. The sentencing judge sentenced for the offences for which a standard non-parole period is prescribed1 in the manner explained in R v Way2. Subsequently, this Court held that Way was incorrectly decided3. In light of the principles explained in Muldrock v The Queen4, it is apparent that the sentencing for the standard non-parole period offences was flawed. On 28 June 2013, the appellant applied to the Court of Criminal Appeal of the Supreme Court of New South Wales (Hoeben CJ at CL, Johnson and Bellew JJ) for an extension of time in which to apply for leave to appeal against sentence ("the application"). The correctness of the principles applied by the Court of Criminal Appeal to the determination of the application is the issue in the appeal. The Court of Criminal Appeal approached the exercise of the discretion conferred by the Criminal Appeal Act 1912 (NSW)5 ("the Act") and the Criminal Appeal Rules (NSW)6 ("the Rules") to extend time by applying a test formulated in Abdul v The Queen7 for applications based on "Muldrock error". The test, drawn from English decisions involving a "change of law", requires the court to ask whether refusal of the application would occasion substantial injustice. The Court of Criminal Appeal found that the sentencing of the appellant was affected by material error8. Nonetheless, it dismissed the application because the 1 Crimes (Sentencing Procedure) Act 1999 (NSW) ("Sentencing Act"), Pt 4, Div 1A. (2004) 60 NSWLR 168. 3 Muldrock v The Queen (2011) 244 CLR 120 at 131 [25]; [2011] HCA 39. (2011) 244 CLR 120. 5 Section 10(1)(b). 6 Rules 3A and 3B (made under the Supreme Court Act 1970 (NSW)). [2013] NSWCCA 247 at [53]. 8 Kentwell v The Queen [2013] NSWCCA 266 at [69]. Hayne Bell appellant had failed to demonstrate that substantial injustice was occasioned by the sentence9. On 16 May 2014, Hayne and Bell JJ granted the appellant special leave to appeal. For the reasons to be given, the Court of Criminal Appeal erred in confining the exercise of its discretion by the "substantial injustice" test. The order dismissing the application must be set aside and the application remitted to the Court of Criminal Appeal for determination. The sentence hearing The appellant was tried on an indictment containing seven counts. He was convicted of the first, third, fourth, fifth and seventh counts10. These counts charged the appellant with the following offences β count one: recklessly causing grievous bodily harm11; count three: maliciously destroying property12; count four: sexual intercourse without consent knowing that the victim was not consenting ("sexual intercourse without consent")13; count five: assault14; and count seven: sexual intercourse without consent. Each of the offences of violence was committed against the same victim, with whom the appellant had been involved in an intimate relationship. The property that the appellant maliciously destroyed belonged to that victim. The offences charged in counts one, three and four occurred on or about 29 October 2007. The offences charged in counts five and seven occurred on or about 2 November 2007. All the offences occurred while the victim was in her home. On each occasion, the sexual offence was preceded by prolonged, drunken acts of violence against the victim. 9 Kentwell v The Queen [2013] NSWCCA 266 at [90]. 10 No verdict was taken on count two, which was an alternative count. The appellant was acquitted of the offence charged in count six. 11 Crimes Act 1900 (NSW), s 35(2). 12 Crimes Act, s 195(1)(a). 13 Crimes Act, s 61I. 14 Crimes Act, s 61. Hayne Bell The appellant is Aboriginal. He was adopted by a non-Aboriginal family when he was 12 months old. He led evidence of his long-standing addiction to illegal drugs and alcohol. Two reports by a forensic psychiatrist, Dr Allnutt, were tendered in his case. Dr Allnutt considered that, at the time of the offending, there was evidence to support the conclusion that the appellant was experiencing delusional beliefs, compounded by auditory hallucinations and ideas of reference. The sentencing judge said that Dr Allnutt's opinion was almost entirely dependent upon the history given by the appellant. His Honour expressed a degree of scepticism concerning that history. Nonetheless, as Dr Allnutt had not been required for cross-examination, his Honour accepted his evidence. However, he concluded that the appellant's mental condition did not have any connection to the sexual offending. Nor did his Honour consider that the appellant's mental illness made it inappropriate to apply principles of general deterrence in sentencing him. The offence of sexual intercourse without consent has a standard non-parole period of seven years15. The offence of recklessly causing grievous bodily harm was not subject to a standard non-parole period at the date of the appellant's offence16. The sentencing judge was informed, wrongly, that the offence was subject to a four year standard non-parole period. His Honour sentenced for this offence and the two offences of sexual intercourse without consent by considering whether there were good reasons for not imposing the standard non-parole period. Subject to consideration of totality, his Honour concluded that there were no such reasons for a departure. His Honour found that the appellant's mental condition and history of drug and alcohol abuse amounted to special circumstances which justified a departure from the statutory proportion between the non-parole period and the term of the sentence17. The appellant was sentenced to an aggregate term of 12 years' imprisonment with a non-parole period of eight years made up of the following sentences β count one: a fixed term of four years' imprisonment to date from 15 Sentencing Act, Pt 4, Div 1A, Table, Item No 7. 16 Schedule 1, item 9 of the Crimes (Sentencing Procedure) Amendment Act 2007 (NSW), which commenced on 1 January 2008, amended the Sentencing Act and imposed a standard non-parole period of four years for recklessly causing grievous bodily harm. 17 Sentencing Act, s 44(2). Hayne Bell 6 April 2008; count three: a fixed term of one month's imprisonment to date from 6 April 2008; count four: a fixed term of seven years' imprisonment to date from 6 August 2008; count five: a fixed term of three months' imprisonment to date from 6 December 2008; and count seven: a non-parole period of seven years to date from 6 April 2009 and to expire on 5 April 2016 with an additional term of four years to date from 6 April 2016 and to expire on 5 April 2020. Extending time under the Act and the Rules A person convicted on indictment may appeal to the Court of Criminal Appeal against the sentence with the leave of the Court 18. Notice of intention to apply for leave to appeal is required to be given within 28 days after the sentence19. The notice is valid for six months after the date of filing20. If notice of intention to apply for leave is not given, a notice of application for leave to appeal may be given within three months after the sentence21. The Court may extend the period of three months before or after the expiry of the period22. The power to extend the time within which a notice of intention to apply for leave to appeal is required to be given to the Court under the Act is wide23: "The court may, at any time, extend the time within which the notice [of intention to apply for leave to appeal] is required to be given to the court or, if the rules of court so permit, dispense with the requirement for such a notice." So, too, wide discretion is conferred by the Rules to extend the period for which a notice of intention to apply for leave to appeal has effect24 or to extend the period of three months, in a case in which no notice of intention to apply for 18 Criminal Appeal Act 1912 (NSW), s 5(1)(c). 19 Criminal Appeal Act, s 10(1)(a). 20 Criminal Appeal Rules (NSW), r 3A(1)(b). 21 Criminal Appeal Rules, r 3B(1)(b). 22 Criminal Appeal Rules, r 3B(2). 23 Criminal Appeal Act, s 10(1)(b). 24 Criminal Appeal Rules, r 3A(2). Hayne Bell leave to appeal has been filed25, before or after expiry of the relevant period. The discretion to extend time under the Act and the Rules may be exercised by the Registrar26. The history following the sentence hearing The appellant was represented by the Aboriginal Legal Service at the sentence hearing. A notice of intention to appeal was completed on the appellant's behalf and filed in the Registry of the Court of Criminal Appeal on 23 February 2009. It appears that extensions to the notice of intention to appeal were granted during the period when the Aboriginal Legal Service was acting for the appellant. At some time before March 2010, the Aboriginal Legal Service identified a conflict of interest in continuing to act for the appellant and it transferred his file to Legal Aid NSW. On 24 March 2010, the appellant applied for a grant of legal aid. On 25 January 2011, the appellant was advised that his application had been refused. There matters stood until February 2013, when a solicitor from Legal Aid NSW contacted the appellant and invited him to complete a further application for legal aid. Legal Aid NSW identified the appellant's case in the course of carrying out a review of sentences which may have been affected by a "Muldrock error". The appellant made a further application for legal aid and, following receipt of that application, Legal Aid NSW set about obtaining a transcript of the proceedings on sentence and exhibits. Counsel was briefed and, on 28 June 2013, the application was filed in the Registry of the Court of Criminal Appeal. The application was supported by an affidavit affirmed by a solicitor employed by Legal Aid NSW setting out the procedural history and by two affidavits affirmed by the appellant. The first of the appellant's affidavits gave details of his progress in custody. This included that a psychiatrist had commenced him on fortnightly injections of a drug named Risperidone and that the appellant had been free of illegal drugs while in custody. In his second affidavit, the appellant confirmed that a notice of intention to appeal had been completed on his behalf on the day he was sentenced and that he had subsequently been refused legal aid to pursue the appeal. 25 Criminal Appeal Rules, r 3B(2). 26 Criminal Appeal Rules, r 3C. Hayne Bell A notice of grounds of appeal was filed with the application. It contained four grounds of appeal, which in summary contended: error in application of sentencing principle respecting the standard non-parole period in light of the decision in Muldrock; error in increasing the balance of term of the sentence imposed on count seven to reflect the finding of special circumstances27; error in imposing fixed terms of imprisonment for the offences which carried a standard non-parole period; and error in the consideration of the psychiatric evidence. The Court of Criminal Appeal The Court of Criminal Appeal found that each of the errors identified in the grounds of appeal was established. As to ground one, the Court of Criminal Appeal said that the sentencing judge had used the standard non-parole period as a starting point in determining the appropriate sentences for the offences of sexual intercourse without consent and in so doing had given it determinative significance28. This was a material error in that it "clearly had the capacity to infect the exercise of the sentencing discretion"29. As to ground two, the Court of Criminal Appeal found there was an inconsistency between the finding of "special circumstances" and the structure of the sentence imposed on count seven30. This was not a material error because the 27 Section 44(2) of the Sentencing Act provides that "[t]he balance of the term of the sentence must not exceed one-third of the non-parole period for the sentence, unless the court decides that there are special circumstances for it being more (in which case the court must make a record of its reasons for that decision)". 28 Kentwell v The Queen [2013] NSWCCA 266 at [36]. 29 Kentwell v The Queen [2013] NSWCCA 266 at [37]. 30 Kentwell v The Queen [2013] NSWCCA 266 at [44]. Hayne Bell finding of special circumstances was reflected in the structure of the aggregate sentence31. As to ground three, the Court of Criminal Appeal said the fixed term sentence imposed on count four was contrary to s 45(1) of the Sentencing Act, which does not permit the court to decline to set a non-parole period when sentencing an offender to imprisonment for an offence for which a standard non-parole period is specified32. In light of the structure of the aggregate sentence, the Court of Criminal Appeal said that this was not a material error33. As to ground four, the Court of Criminal Appeal found that the sentencing judge's consideration of the psychiatric evidence contained three errors. First, there was objective evidence of the appellant's disturbed mental condition dating from January 199534. It followed that the sentencing judge's conclusion that Dr Allnutt's opinion was based almost entirely upon the history given by the appellant was wrong35. Secondly, the acceptance of Dr Allnutt's opinion could not be reconciled with the sentencing judge's conclusion that mental illness had not contributed to the sexual offending in a material way36. Thirdly, it was wrong to give weight to general deterrence in sentencing the appellant given that Dr Allnutt's opinion supported the conclusion that the appellant suffers from a "serious mental illness"37. The Court found that each of the errors in the consideration given to the appellant's psychiatric condition was a material error. The Abdul test In Abdul v The Queen, the Court of Criminal Appeal formulated the following principles to be applied to the determination of an application to 31 Kentwell v The Queen [2013] NSWCCA 266 at [45]. 32 Kentwell v The Queen [2013] NSWCCA 266 at [49]. 33 Kentwell v The Queen [2013] NSWCCA 266 at [50]-[51]. 34 Kentwell v The Queen [2013] NSWCCA 266 at [61]. 35 Kentwell v The Queen [2013] NSWCCA 266 at [62]. 36 Kentwell v The Queen [2013] NSWCCA 266 at [64]. 37 Kentwell v The Queen [2013] NSWCCA 266 at [65] citing Muldrock v The Queen (2011) 244 CLR 120 at 139 [55]. Hayne Bell extend the time within which to apply for leave to appeal against a sentence on a ground asserting "Muldrock error"38: "[A]ll relevant factors need to be considered β the length of the delay, the reasons for the delay, the interests of the community, the interests of the victim and whether, if an extension of time were refused, substantial injustice would result. This last factor will inevitably require an assessment of the strength of the proposed appeal although as Etchell[39] made clear, that assessment can be carried out in a 'more summary fashion' than would be done in an application for leave to appeal that was brought within time." Applying these principles to the appellant's case, the Court of Criminal Appeal addressed the relevant factors, characterising the delay as "substantial" and the reasons for the delay as "largely unexplained"40. This second factor took into account that grounds two, three and four were unconnected to "Muldrock error" and could have been challenged timeously. The Court acknowledged that the appellant's failure may have been the result of the change in his legal representation and the significant delay in the assessment of his legal aid application. It noted that the appellant was not at fault in either of these respects. The Court considered that it was "at least possible" that an extension of time may affect the victim. Finally, the Court said that an extension of time would "offend the principle of finality". It concluded that the majority of relevant factors were against the grant of an extension of time41. The Court proceeded to assess the prospects of success should the extension be granted. Conformably with the statements in Abdul, this consideration was carried out in a more summary way than had the Court been determining an application for leave to appeal that was brought within time. The Court concluded that although material error had been established, none of the matters advanced on the appellant's behalf, including his mental illness, 38 Abdul v The Queen [2013] NSWCCA 247 at [53]. 39 Etchell v The Queen (2010) 205 A Crim R 138. 40 Kentwell v The Queen [2013] NSWCCA 266 at [68]. 41 Kentwell v The Queen [2013] NSWCCA 266 at [68]. Hayne Bell supported the conclusion "that there has been substantial injustice arising out of the sentence imposed, or that some other sentence is warranted in law"42. The submissions The appellant's principal challenge is to the adoption of the Abdul test of "substantial injustice". In addition, he challenges the Court of Criminal Appeal's conclusion that a majority of relevant factors were against the grant of the extension sought. The reasons for the delay were explained: the appellant had been refused legal aid to pursue the challenge to his sentence. The fact that his grounds of challenge were good suggested that Legal Aid NSW's assessment of his application had been wrong, but this was not his fault. Next, the appellant submits that the possibility that his victim may be affected by the prospect of the sentence being re-opened must be balanced against the interests of justice in reviewing a sentence that is acknowledged to be attended by material error and that is still being served. Finally, the appellant submits that the assessment of merit should be confined to the grounds of the proposed appeal. The respondent counters that the last-mentioned submission conflates the principles that apply to the determination of an application to extend time with those that apply to the determination of an application for leave to appeal brought within time. The respondent submits that it has long been accepted that "substantial reasons"43 or "special reasons"44 are required before the grant of an extension of time to appeal or to apply for leave to appeal against a conviction or sentence. The need for substantial or special reasons reflects that the proceedings are closed following the expiration of the time within which to apply for leave to appeal against sentence and that the grant of an extension is not a mere formality. The test of "substantial injustice" is suggested to encapsulate the importance of the principle of finality to the determination. The respondent submits that, in its practical application, the test of "substantial injustice" imposes no higher threshold than a test expressed as "what justice requires". The test of substantial injustice The Court in Abdul drew on a line of English decisions that are concerned with re-opening a conviction in consequence of the correction by a court of 42 Kentwell v The Queen [2013] NSWCCA 266 at [90]. 43 Rigby (1923) 17 Cr App R 111 at 112. 44 R v R [2007] 1 Cr App R 10 at 161 [30]. Hayne Bell authority of a misconception as to the state of the law45. In cases of this kind, the Court of Appeal asks whether refusal of an extension of time would occasion "substantial injury" or "substantial injustice" to the applicant46. The same test is applied to applications to challenge convictions in light of the Human Rights Act 1998 (UK) jurisprudence47. In R v R, the Court took into account that, while the applicants' convictions for conspiracy to engage in money laundering could not stand, their own cases at trial, taken with the verdicts, established that they had committed one or more substantive money laundering offences. This was against finding the applications48. A similar consideration was noted in Hawkins, although it was not determinative49. injustice would be occasioned by refusing that substantial The reliance in Abdul on the English line of authority was misplaced. The interests of justice in the review of a sentence that has been imposed upon wrong sentencing principle and that is still being served are to be distinguished from the interests of justice in the review of a stale conviction. The review of an old conviction may raise consideration of the capacity to hold a new trial that is fair to both sides50. For example, witnesses may no longer be available and exhibits may have been lost or destroyed. Re-opening a conviction for an offence of violence may occasion acute stress to the victim, including by the prospect of being required to give evidence again51. This appeal does not provide the 45 Abdul v The Queen [2013] NSWCCA 247 at [46]-[49]. 46 Hawkins [1997] 1 Cr App R 234 at 240-241; R v R [2007] 1 Cr App R 10 at 161 [30]; R v Jawad [2013] 1 WLR 3861 at 3873 [29]; R v Bestel [2014] 1 WLR 457 at 47 R v R [2007] 1 Cr App R 10 at 162-163 [33] citing R v Benjafield [2003] 1 AC 48 R v R [2007] 1 Cr App R 10 at 164 [39]. 49 Hawkins [1997] 1 Cr App R 234 at 240-241. 50 R v Gregory [2002] NSWCCA 199 at [42]. See also R v Unger [1977] 2 NSWLR 990; Spencer, "Criminal Appeals Founded on a Change in Case-Law", (2014) 73 Cambridge Law Journal 241. 51 Chapter 6, Pt 5, Divs 3 and 4 of the Criminal Procedure Act 1986 (NSW) provide for the admission of the record of the original evidence of the complainant at the re-trial of a person for a prescribed sexual offence or in new trial proceedings for such an offence. Hayne Bell occasion to consider the issues raised by an application to extend time in which to challenge a conviction on the ground that a misconception as to the law has been removed by later authoritative decision. In R v Young, the Court of Criminal Appeal observed that it is impossible to foresee all of the circumstances that may bear on the determination of an application to extend time in which to seek leave to appeal against a sentence52. Correctly, the Court refrained from formulating any guideline for the exercise of the discretion, holding that the application was to be determined by asking whether "it is just under the circumstances that such an order should be made"53. The wide discretion conferred on the Court of Criminal Appeal under the Act and Rules is to be exercised by consideration of what the interests of justice require in the particular case. Abdul was wrongly decided. It was an error to introduce in applications for an extension of time based on asserted "Muldrock error" consideration of whether refusal of the application would occasion substantial injustice. The respondent's submission that, in its application, the test applied by the Court of Criminal Appeal in the appellant's case amounted to no more than the determination of "what justice requires" must be rejected. Before turning to the principal reason for that rejection, something should be said about the Court of Criminal Appeal's treatment of the relevant factors. The weighing of the factors of the length of the delay, the reasons for it and the possibility of adverse effect on the victim were matters of judgment. However, the Court went on to identify as a discrete factor against the grant of the extension that it would "offend the principle of finality"54. The Act confers a right in stated circumstances55 and provides for an appeal against conviction56 and/or sentence57 to appeal against conviction 52 [1999] NSWCCA 275 at [35]. 53 R v Young [1999] NSWCCA 275 at [35]. See also R v Gregory [2002] NSWCCA 54 Kentwell v The Queen [2013] NSWCCA 266 at [68]. 55 Criminal Appeal Act, s 5(1)(a). 56 Criminal Appeal Act, s 5(1)(b). 57 Criminal Appeal Act, s 5(1)(c). Hayne Bell with the leave of the Court. These provisions (among others) are exceptions to finality in the trial and sentencing of offenders. The principle of finality finds expression in the prescription of the time limit within which an appeal or an application for leave to appeal may be brought. The discretionary power to extend the time limit is a legislative recognition that the interests of justice in a particular case may favour permitting an appeal or an application for leave to appeal to be heard, notwithstanding that it was not brought within time. The interests of justice will often pull in different directions. As earlier noted, they may include consideration of the adverse effect on the victim, or on the community generally, occasioned by re-opening a concluded criminal proceeding. However, at least in the case of an out-of-time challenge to a sentence that is being served, the principle of finality does not provide a discrete reason for refusing to exercise the power. Relevant to the determination of the interests of justice on an application to extend time is the prospect of success should the extension be granted. Contrary to the appellant's submission, the Court of Criminal Appeal's acceptance that his grounds of appeal were established did not conclude its consideration of the merits of the appeal. As the appellant acknowledged on the hearing of the appeal, notwithstanding conceded "Muldrock error", a sentence may be so demonstrably lenient that the Court of Criminal Appeal concludes that there is no prospect that a lesser sentence would be imposed were the appeal to be entertained. Consideration of the merits of an appeal against sentence is addressed by reference to s 6(3) of the Act: "On an appeal ... against a sentence, the court, if it is of opinion that some other sentence, whether more or less severe is warranted in law and should have been passed, shall quash the sentence and pass such other sentence in substitution therefor, and in any other case shall dismiss the appeal." The history of the provision is touched on in Lacey v Attorney-General (Qld)58. Notwithstanding the breadth of its language, it was settled at an early stage that the appellate court's authority to intervene is dependent upon demonstration of error59. The significance to the function of the appellate court of the distinction between specific error, of any of the kinds identified in House v 58 (2011) 242 CLR 573; [2011] HCA 10. 59 Skinner v The King (1913) 16 CLR 336 at 340; [1913] HCA 32. Hayne Bell The King60, and the conclusion of manifest excess or inadequacy is explained by Hayne J in AB v The Queen61. In the case of specific error, the appellate court's power to intervene is enlivened and it becomes its duty to re-sentence, unless in the separate and independent exercise of its discretion it concludes that no different sentence should be passed. By contrast, absent specific error, the appellate court may only intervene if it concludes that the sentence falls outside the permissible range of sentences for the offender and the offence. intermediate step between the respondent contends for an In supplementary submissions filed by leave after the hearing of the appeal, the identification of specific error and the re-exercise of the sentencing discretion. On this analysis, the appellate court, having identified error, considers whether the sentence passed by the court of first instance is nonetheless warranted in law in that it is within the permissible range. The argument is constructed on a passage in the joint reasons in House, in which their Honours, speaking of the identification of specific error, state that "[the sentencing court's] determination should be reviewed and the appellate court may exercise its own discretion in substitution for [the sentencing court's] if it has the materials for doing so"62. The point being made by their Honours is that the power to intervene is not enlivened by the fact that judges composing the appellate court consider that, had they been in the position of the sentencing judge, they would have taken a different course63. The verb "review" is not employed to posit an intermediate step between identification of specific error and the engagement of the appellate court's sentencing discretion. It is the latter to which their Honours refer in speaking of the "special or particular power to review sentences imposed upon convicted persons"64. 60 (1936) 55 CLR 499; [1936] HCA 40. 61 (1999) 198 CLR 111 at 160 [130]; [1999] HCA 46. See also at 151-153 [104]- 62 (1936) 55 CLR 499 at 505 per Dixon, Evatt and McTiernan JJ. 63 (1936) 55 CLR 499 at 505 per Dixon, Evatt and McTiernan JJ. 64 (1936) 55 CLR 499 at 505 per Dixon, Evatt and McTiernan JJ. Hayne Bell The respondent's argument calls in aid decisions of the Court of Criminal Appeal that were decided before AB65 and Dinsdale v The Queen66. In R v Oastler67, the Court said that the specific errors it found: "[did] not mean necessarily that the appeal should be upheld on the ground that the sentence is excessive. The question which then remains for the court under section 6(3) of the Criminal Appeal Act, is whether the sentence in fact left by the sentencing Judge, is excessive or to use the words of the section ... whether another sentence is 'warranted in law'." Statements to the like effect were made in Astill (No 2)68. The respondent submits these statements accord with the interpretation of s 6(3) in R v Simpson: specific error does not enliven the Court of Criminal Appeal's discretion to re-sentence; first it must form "a positive opinion" that some other sentence is warranted in law. The reference is to the last sentence in paragraph 79 of "Sentencing appeals in this Court frequently proceed as if the statutory trigger for the quashing of a sentence were expressed as follows: 'If it is of the opinion that error has occurred in the sentencing process'. That is not the statutory formulation. By s 6(3) this Court must form a positive opinion that 'some other sentence β¦ is warranted in law and should have been passed'. Unless such an opinion is formed, the essential pre-condition for the exercise of the power to 'quash the sentence and pass such other sentence in substitution therefor' is not satisfied." (emphasis added) 65 (1999) 198 CLR 111. 66 (2000) 202 CLR 321; [2000] HCA 54. 67 Unreported, Court of Criminal Appeal of the Supreme Court of New South Wales, 7 October 1992 at 9. 68 (1992) 64 A Crim R 289 at 304 per Lee AJ. 69 R v Simpson (2001) 53 NSWLR 704 at 720-721 [79]. Hayne Bell The respondent's argument is reminiscent of its submission in Douar v The Queen70. The submission was rejected71 taking into account the statements of principle in House, AB and Dinsdale. Applying those principles, Johnson J, giving the leading judgment, determined72 that, error having been identified, the Court's discretion to re-sentence was enlivened with the consequence that evidence of events occurring since the sentence hearing was admissible because it was relevant to the determination of the statutory question of whether the Court "is of opinion that some other sentence ... is warranted in law". In Baxter v The Queen73, the Court of Criminal Appeal returned to a consideration of its function under s 6(3). Spigelman CJ took the opportunity to clarify the meaning of the last sentence in paragraph 79 of his reasons in Simpson74: "The import of [79] of Simpson was to ensure that submissions in the Court of Criminal Appeal did not proceed as if the identification of error created an entitlement on the part of an Applicant to a new sentence, for example, by merely adjusting the sentence actually passed to allow for the error identified. That would be to proceed on the assumption that the sentencing judge was presumptively correct, when the Court has determined that the exercise of the discretion had miscarried. Section 6(3) is directed to ensuring that the Court of Criminal Appeal does not proceed in that manner, but re-exercises the sentencing discretion taking into account all relevant statutory requirements and sentencing principles with a view to formulating the positive opinion for which the subsection provides." The other members of the Court in Baxter expressed differing views respecting the interpretation of s 6(3). Kirby J said that where error is identified it is not incumbent on the applicant to demonstrate that the sentence appealed against is manifestly excessive; it is sufficient if the Court of Criminal Appeal infers that the error may have infected the reasoning of the sentencing judge such 70 (2005) 159 A Crim R 154 at 174 [107]-[111]. 71 (2005) 159 A Crim R 154 at 176 [120]. 72 Douar v The Queen (2005) 159 A Crim R 154 at 178 [124]. 73 (2007) 173 A Crim R 284. 74 Baxter v The Queen (2007) 173 A Crim R 284 at 287 [19]. Hayne Bell that, absent the error, a lesser sentence may have been imposed75. Latham J agreed with Spigelman CJ's observations but confined error to those that are material in the sense that they have the capacity to infect the exercise of the sentencing discretion, regardless of whether it can be demonstrated that the error has in fact influenced the outcome76. Spigelman CJ's analysis in Baxter should be accepted. When a judge acts upon wrong principle, allows extraneous or irrelevant matters to guide or affect the determination, mistakes the facts or does not take into account some material consideration77, the Court of Criminal Appeal does not assess whether and to what degree the error influenced the outcome. The discretion in such a case has miscarried and it is the duty of the Court of Criminal Appeal to exercise the discretion afresh taking into account the purposes of sentencing78 and the factors that the Sentencing Act79, and any other Act or rule of law, require or permit. As sentencing is a discretionary judgment that does not yield a single correct result, it follows that a range of sentences in a given case may be said to be "warranted in law". A sentence that happens to be within the range but that has been imposed as the result of a legally flawed determination is not "warranted in law" unless, in the exercise of its independent discretion, the Court of Criminal Appeal determines that it is the appropriate sentence for the offender and the offence. This is not to say that all errors in the sentencing of offenders vitiate the exercise of the sentencer's discretion. By way of example, s 44(1) of the Sentencing Act requires the court when sentencing an offender to imprisonment to first set the non-parole period and then set the balance of the term. Prior to 1 February 2003, a court was required to first set the term of the sentence and then specify the non-parole period. A court which sentences an offender to imprisonment after 1 February 2003 by first setting the term of the sentence commits legal error. Without more, the error does not affect the exercise of the sentencer's discretion. After having identified specific error of the kind described in House, the Court of Criminal Appeal may conclude, taking into account all relevant matters, 75 (2007) 173 A Crim R 284 at 294 [60]. 76 (2007) 173 A Crim R 284 at 298 [83]. 77 House v The King (1936) 55 CLR 499 at 505 per Dixon, Evatt and McTiernan JJ. 78 Sentencing Act, s 3A. 79 Sentencing Act, s 21A. Hayne Bell including evidence of events that have occurred since the sentence hearing80, that a lesser sentence is the appropriate sentence for the offender and the offence. This is a conclusion that that lesser sentence is warranted in law. The result of the Court of Criminal Appeal's independent exercise of discretion may be the conclusion that the same sentence or a greater sentence is the appropriate sentence. In neither case is the Court required to re-sentence. Nor is the Court required to re-sentence in a case in which it concludes that a lesser sentence is appropriate for one or more offences, but that a greater sentence is appropriate for another or other offences, with the result that the aggregate sentence that it considers warranted in law exceeds the aggregate sentence that is the subject of appeal. The occasions calling for the Court of Criminal Appeal to grant leave, allow an offender's appeal and substitute a more severe sentence are likely to be rare. Were the Court to grant leave in such a case, convention would require that it inform the appellant of its intended course so that he or she might abandon the appeal81. In assessing the prospects that the appellant's appeal would succeed, it was wrong to determine that the appellant had failed to demonstrate that substantial injustice was occasioned by the sentence. This is best understood as a conclusion that the aggregate sentence did not impress the Court, upon summary review, as excessive. The appellant is entitled to be sentenced according to law. The issue for the Court's consideration was whether upon the hearing of the appeal it might conclude, taking into account the full range of factors including the evidence of the appellant's progress in custody and current mental state, that a lesser sentence is warranted in law. The Court of Criminal Appeal wrongly confined its discretion by applying a test which required the appellant to demonstrate that substantial injustice would attend the refusal of the application. The appeal must be allowed. However, it is not appropriate to accede to the appellant's submission that this Court extend the time within which he may apply for leave to appeal and grant him that leave. The application should be remitted to the Court of Criminal Appeal for its determination. 80 Douar v The Queen (2005) 159 A Crim R 154 at 178 [124]; Baxter v The Queen (2007) 173 A Crim R 284 at 287 [19] per Spigelman CJ. 81 Neal v The Queen (1982) 149 CLR 305 at 308 per Gibbs CJ; [1982] HCA 55; Parker v Director of Public Prosecutions (1992) 28 NSWLR 282 at 290 per Kirby P citing Reischauer v Knoblanche (1987) 10 NSWLR 40 at 45 per Kirby P (Samuels JA agreeing at 47, Priestley JA agreeing at 48). Hayne Bell Orders The following orders should be made: (1) Appeal allowed. (2) Set aside the order of the Court of Criminal Appeal of the Supreme Court of New South Wales made on 14 November 2013. (3) Remit the application for extension of time to the Court of Criminal Appeal for determination. The error of the sentencing judge β the "Muldrock error" β was to proceed on an incorrect construction of a sentencing statute. Had he proceeded on the correct construction, the sentencing judge might have imposed a different sentence. That is common ground. The result was an error of law in the sentencing process sufficient to require the Court of Criminal Appeal to re- exercise the sentencing discretion in the appeal against sentence if an extension of time and leave to appeal were granted. There is no occasion in this appeal to consider the significance, if any, of the differences in the more general explanations by members of the Court of Criminal Appeal in Baxter v The Queen82 of the circumstances in which an identified error of law will be sufficient to require re-exercise of the sentencing discretion in an appeal against sentence. Subject to that observation, I agree with the joint reasons. 82 (2007) 173 A Crim R 284. |
HIGH COURT OF AUSTRALIA APPELLANT AND EDITH COWAN UNIVERSITY RESPONDENT Czatyrko v Edith Cowan University [2005] HCA 14 6 April 2005 ORDER Appeal allowed with costs. Set aside the orders of the Full Court of the Supreme Court of Western Australia made on 9 December 2002 and in their place order that the appeal is dismissed with costs. On appeal from the Supreme Court of Western Australia Representation: B L Nugawela with J J Stribling (instructed by Vertannes Georgiou) B W Walker SC with J R Clyne for the respondent (instructed by Phillips Fox) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Czatyrko v Edith Cowan University Negligence β Duty of care β Employer and employee β Safe system of work β Suitable plant and equipment β Employee injured when attempting to stand on moveable platform while loading a truck β Platform not in position β Employee stepped backwards onto platform in belief it was raised β Absence of warning beeper β Absence of oral warning β Whether employer failed to devise and implement a safe system of work β Whether employer failed to provide suitable plant and equipment. Negligence β Contributory negligence β Employee injured when attempting to stand on moveable platform while loading a truck β Platform not in position β Employee stepped backwards onto platform in belief it was raised β Whether employee should have looked behind him before stepping backwards. GLEESON CJ, McHUGH, HAYNE, CALLINAN AND HEYDON JJ. This appeal raises no question of general principle and depends on its own facts. The only question that it poses is whether the Full Court of the Supreme Court of Western Australia was wrong in deciding that a trial judge erred in holding that an employer failed in its duty of care to an employee by not providing him with a system of work, and plant and equipment to enable him to carry out his work safely. Facts The appellant began to work for the respondent as a general assistant in February 1990. His duties included the shifting of furniture and the distribution of mail. On 13 January 1997, the appellant and another employee, Mr Fendick, were required to load 30 or so boxes on to a truck for removal to another campus. The boxes contained books and documents. The truck was parked on a grassy area outside a building. It was fitted with an enclosed tray, to which was attached an unenclosed hydraulic lifting platform. The platform was about 1.5m deep and its width was approximately the same as that of the truck. The platform was powered by the battery in the truck and was operated by a switch. It emitted a loud noise when it was being raised and a "clanging" sound when it "hit the top" (to bring it level with the tray of the truck). No sound was emitted however when it was being lowered. The appellant and Mr Fendick each had a trolley. Together, they collected boxes and loaded them on to the truck, both using the platform. A storeman gave them a message that their supervisor wanted them to get on with the job more quickly. Mr Fendick suggested to the appellant that the appellant should work on the truck while Mr Fendick brought the remaining boxes to him. The appellant agreed. Mr Fendick, who was operating the platform control, then collected some boxes on his trolley, took them up to the appellant on the platform, unloaded them, and went down again on the platform to collect more boxes. The appellant remained on the truck re-organizing the boxes that were already loaded in order to make the best use of the available space, which was almost three- quarters filled. Mr Fendick brought another load of boxes up on the platform. He placed them on the truck. By this time, there was little room left on the truck. Mr Fendick, without saying anything further to the appellant, went down again on the platform. When the platform was about two-thirds of the way down, and still descending, the appellant, who did not realize it had moved, and who was still re-organizing the boxes on the truck, stepped backwards. If the platform had McHugh Hayne Callinan still been there, he would have been secure. Instead, he stepped into space, and fell heavily. The proceedings in the District Court The appellant sued the respondent in the District Court of Western Australia for damages for negligence, as well as breaches of the Occupational Safety and Health Act 1984 (WA) and the Occupiers' Liability Act 1985 (WA). The Statement of Claim alleged common law negligence in the form of failing to provide safe equipment and failing to provide a safe system of work. The case was argued in the Full Court, and in this Court, on the basis that the statutory counts added nothing material to the appellant's case. Argument was directed entirely to the common law claim. The appellant claimed that the respondent had failed to take reasonable precautions to ensure his safety in these ways: by failing to provide a warning device to indicate that the platform was in the process of being lowered; by instructing the appellant and Mr Fendick to do their work hurriedly and in a manner that "ignored safety issues"; and, by failing to have in place a system of work requiring the employee operating the platform to inform other employees of its movements at any time. The respondent denied liability and contended, among other things, that the appellant's injuries were caused or contributed to by his own negligence in failing to look behind him before stepping backwards. In cross-examination of him at the trial, the appellant conceded that in the course of doing the work it was necessary for him to turn around and to continue to look behind him from time to time to see what he had to pick up and stack. It was not controverted that the platform could readily and inexpensively have been fitted with a device that would emit warning sounds. Apart from the appellant and Mr Fendick, the only other witness who gave evidence about these matters at trial was an engineer who said that he himself had designed a lifting platform similar to the one in use in this case and had "felt it was absolutely essential to have a warning beeper". He agreed, however, that "it is in the marketplace very unusual to have a beeper attached to them". The trial judge (Martino DCJ) found that the respondent had exposed the appellant to an unnecessary risk of injury. His Honour said that as the loading of the truck continued, standing room would be reduced. The appellant would then be compelled to step on to the platform. As the platform could be lowered soundlessly, it was foreseeable that the appellant would not know that the platform had been lowered and would lose his step when he attempted to stand on it. McHugh Hayne Callinan The trial judge formed the opinion that the risk of injury to the appellant could have been avoided if the appellant were to be given a clear warning as and when the platform was lowered. An appropriate warning could have been given, either by a device which emitted sound when the platform was being lowered, or by the respondent's insistence on a system of work requiring that the person lowering the platform inform the loader that the platform was about to be lowered. As to the respondent's alternative plea of contributory negligence, the trial judge thought it relevant that the appellant believed that the platform would be in place when he stepped backwards "because he had not been told that the platform was to be lowered nor heard any sound to indicate that it was being lowered". Plainly the trial judge considered the belief was not unreasonable. Accordingly it was not negligent of the appellant to step backwards without looking to see whether the platform was in such a position or not. Having found that the respondent was entirely responsible for the appellant's injuries, it was unnecessary for the trial judge to consider the appellant's alternative causes of action. He accordingly gave judgment in favour of the appellant in the sum of $379,402. The Full Court The respondent successfully appealed to the Full Court of the Supreme Court (Wallwork, Murray and Templeman JJ)1. Murray J, with whom Wallwork and Templeman JJ agreed, observed that a person "paying attention to where he was putting his feet would have been perfectly safe"2. His Honour stressed that the appellant was under an obligation to take reasonable care to avoid foreseeable risk of injury to himself: the appellant's injuries were materially caused by his own negligence. In any event, even if the respondent were in breach of its duty of care by not making provision for a warning, the appellant's negligence in failing to look where he was stepping should nonetheless be regarded as a substantial cause of his injuries. In those circumstances, his Honour would have apportioned liability to the extent of 70% against the appellant. He said this3: 1 Edith Cowan University v Czatryko [2002] WASCA 334. [2002] WASCA 334 at [11]. [2002] WASCA 334 at [16]-[17]. McHugh Hayne Callinan "It seems to me that the true issue upon which the case turned was simply whether, in the circumstances, the omission to provide a warning, in either form suggested, that the lifting platform was to be or was being lowered breached the duty of care, or whether this was a case where, as Kirby J said in Romeo v Conservation Commission (NT)4: 'Where a risk is obvious to a person exercising reasonable care for his or her own safety, the notion that the occupier must warn the entrant about that risk is neither reasonable nor just.' In that event, because the obligation of the [respondent] is to take reasonable care to avoid foreseeable risks of injury, the duty will not be breached by the failure to warn. Of course, one must be careful not to elevate that observation, which was directed to the facts of Romeo, into some form of definitive statement of the law, but the remark was described by Gleeson CJ in Woods v Multi-Sport Holdings Pty Ltd5 as 'fair comment' 'as a generalisation'. The Court must not lose sight of the fact that, as Gleeson CJ said in Woods6, 'ultimately, the question of fact is what a reasonable person, in the position of the defendant, would do by way of response to the risk'." Murray J went on to say7: "[I]n my respectful opinion, the breach of the duty of care owed by the respondent was not established simply by the observation of the trial Judge ... that it was obvious that, 'when the loading of the truck was almost complete so that there was limited space left on the tray of the truck, the [appellant] would step on to the platform'. To my mind, the chance that he would do so without looking where he was going was, although reasonably foreseeable, remote. (1998) 192 CLR 431 at 478 [123]. (2002) 208 CLR 460 at 474 [45]. (2002) 208 CLR 460 at 472 [39]. [2002] WASCA 334 at [28]-[32]. McHugh Hayne Callinan In my opinion, the [respondent] was, acting reasonably, entitled to expect that the [appellant] would look where he was going rather than that he would step back, knowing that he was about to step off the back of the truck tray, without looking to see whether the hoist, which he knew was constantly on the move and which he knew he would not necessarily hear being lowered, was in fact in a position level with the tray of the truck. Further, unless he looked or heard what was happening behind him and so positively satisfied himself that it was safe to step backwards, the [appellant] could not know whether there were cartons of books on the hoist or whether, as was the case when the accident happened, [Mr] Fendick was there. There was no substitute for the [appellant] looking where he was going and, in my view, it was not negligent for the respondent to rely upon him to do so. If, however, I am wrong on the issue of breach of duty, it is convenient in respect of the liability of both parties to have regard to the question of contributory negligence ... [The trial judge] did not find this to be a case of mere inadvertence. He found that the [appellant] stepped back without looking because he believed that the hoist would be in a position for him to do so safely. He was of that belief, his Honour found, because the [appellant] had not been told that the hoist was to be lowered and had not heard any sound to indicate that it was being lowered. Again, in my respectful opinion, that is not to the point. The question was whether the [appellant] failed to take due care for his own safety in any of the respects pleaded; in short, by failing to look where he was going when there was no suggestion that there was anything to prevent him doing so. In my respectful opinion, the [appellant's] failure in that regard was very much the substantial cause of the receipt of the [appellant's] injuries. If the [respondent] was negligent in failing to have a system to warn the [appellant] when the hoist was being lowered, then, in my opinion, the [appellant's] failure to take the simple precaution of looking to see that it was safe to step backwards was contributory negligence and, in my view, the proper apportionment would have been 70 per cent against the [appellant], having regard to all the circumstances of the case." McHugh Hayne Callinan The appeal to this Court The appellant relied in this Court on these basic general principles. An employer owes a non-delegable duty of care to its employees to take reasonable care to avoid exposing them to unnecessary risks of injury8. If there is a real risk of an injury to an employee in the performance of a task in a workplace, the employer must take reasonable care to avoid the risk by devising a method of operation for the performance of the task that eliminates the risk, or by the provision of adequate safeguards9. The employer must take into account the possibility of thoughtlessness, or inadvertence, or carelessness, particularly in a case of repetitive work10. The appellant's reliance on these principles is well founded. This case is in our opinion a tolerably clear one. This is not simply a case of a failure to warn. It is a case of a failure to devise and implement a safe system of work, or to provide the appellant with proper and sufficient equipment to enable him to carry out his work safely. The risk that the appellant would attempt to step backwards on to the platform in the belief that it was raised, without checking whether this was the case, was plainly foreseeable. There was no system in place to guard against it. The risk could have been readily obviated by the respondent by the taking of simple measures. The measures included the fitting of a warning "beeper" or the introduction of a system for the giving of an oral warning as and when the platform was being lowered. In light of its failure to implement such or like measures, the respondent was in breach of its duty to take reasonable care to prevent the risk of injury to the appellant. The Full Court therefore erred, in our opinion, in its determination that the respondent was not in breach of its duty. Compliance by the respondent, as an employer, with its duty of care to an employee was not to be measured by reference to the reasonableness of imposing on an occupier of land an obligation to warn members of the public about the obvious risks on the land. The case for the appellant was not that he should have 8 Hamilton v Nuroof (WA) Pty Ltd (1956) 96 CLR 18 at 25 per Dixon CJ and Kitto J. 9 Smith v The Broken Hill Pty Co Ltd (1957) 97 CLR 337 at 342 per Taylor J. 10 Smith v The Broken Hill Pty Co Ltd (1957) 97 CLR 337 at 342-343 per Taylor J; Da Costa v Cockburn Salvage & Trading Pty Ltd (1970) 124 CLR 192 at 218 per Gibbs J; Woods v Multi-Sport Holdings Pty Ltd (2002) 208 CLR 460 at 500 [128] McHugh Hayne Callinan been warned by his employer that if he fell off the truck he might suffer injury, or that if he stepped off the back of the truck into space he would fall. It was not a question of warning the appellant of a risk. It was a question of creating a risk by failing to adopt a safe system of work. There should have been in place a system of work designed to avoid the risk that a person required to step backwards and forwards on and from a moveable platform might do so without first looking behind him. The system of work necessarily had also to take into account that the task was a repetitive one to be performed in a diminishing space. Proper account of these matters was not taken by the respondent. It did no more than require that the appellant and Mr Fendick load the truck. That proper account of these matters was not taken was overlooked or disregarded by the Full Court. An employer has another obligation. It is to provide employees with suitable plant and equipment to enable them to carry out their work safely. This case could also be characterized as a case of a failure to do that. The simplicity and inexpensiveness of a warning device that could have been fitted, required that it be fitted here. This was another matter to which the Full Court failed to pay due regard. The respondent was negligent. The Full Court erred in holding to the contrary. The respondent submits, nevertheless, that even if the Full Court erred, its provisional finding of contributory negligence of 70% on the part of the appellant should not be disturbed. In the present case, the appellant did no doubt omit to take a simple precaution of looking to see whether the platform was raised before stepping on to it, and this omission was a cause of his injuries. But in acting as he did, the appellant did not disobey any direction or warning from the respondent. No directions or warnings of any kind were given by the respondent in relation to the use of the platform. Furthermore, both the appellant and Mr Fendick were under pressure from their supervisor to complete the job promptly. The work was repetitive. In all of these circumstances it presented a fertile field for inadvertence. The onus of proving contributory negligence lay upon the respondent. This it failed to do in this case. The appellant's attempt to step on to the platform in the mistaken belief that it was still raised, and in an effort to finish loading the truck, was the product of nothing more than "mere inadvertence, inattention or misjudgment"11. It was not a remote risk that the 11 Bankstown Foundry Pty Ltd v Braistina (1986) 160 CLR 301 at 310. McHugh Hayne Callinan appellant might step back without looking behind him. His actions were neither deliberate, intentional, nor in disregard of a direction or order from the respondent. No finding of contributory negligence should have been made. The appeal should be allowed. We would make orders as follows: The appeal should be allowed with costs. The orders of the Full Court of the Supreme Court of Western Australia made on 9 December 2002 should be set aside and in their place it should be ordered that the appeal is dismissed with costs. |
Subsets and Splits